Auto Internet Industry Analysis Term Paper

Excerpt from Term Paper :

Internet Strategies Adopted by Automobile Companies in a Changing Business Market

This is an article on the Internet strategies adopted by automobile companies in the changing business scenario.

What is the most recent fad that is tempting, informative and dangerous? The author would have loved to hear the responses from an audience, because none would have mentioned the Internet as the answer, and that is exactly what it is. Tempting because companies fall for the hype that the Internet has the potential to increase their profits by huge unrealistic percentages. Informative because the company is soon informed by its event managers that the virtual world is not what it was originally thought of, and dangerous because even after burning their fingers, they keep coming back for more! The reason why the come back is plain simple: the Internet is not directly responsible for the drubbing they received, It is their strategy that went bonkers.

In the onset of the Internet revolution companies were, frankly speaking duped to believe that income would increase phenomenally if they put some good graphics on their site. This idea of doing business was totally wrong, which is time and again being proved by the continuing accidents that companies are involved in, on the Information highway. Companies soon realized that the Internet should not be treated as a static global display board. On the contrary, what was needed was to tap the huge potential of the medium in information sharing. This change in focus is evident in the marketing strategies of many firms.

Ironically the biggest advantage and drawback of a website is its global reach and transparency. Competitors keep a watch on a company website and even employ analysts to predict what the next move of the company could be. This prevents many firms from putting their future plans on the Internet. The sectors which can be best served through the Internet is Service, Spare parts business, Customer relations, other services and of course B2B operations. The automobile industry is a niche market where competition is huge and requirements differ from people to people. Most car companies use the Internet for displaying their eye-catching models, which is expected to hit the roads very soon. Interactive technologies help customers to find out different aspects of the car that they are interested in rather than read through a brochure. Web sites have allowed companies to modularize information so that the customer can concentrate on the information that they need and not waste time on what the marketing executive thrusts on them. The Internet also has freed the customer from the hassles of going to a showroom. As far as the customer is concerned, the showroom is in his computer. As far as the company is concerned, it is like having a responsive reception team for all the 24 hours of a day, 365 days of the year.

The change in focus about the Internet has seen the collaborative growth of many industries. Important among them is the growth of the finance companies. A cursory look at any automobile site, invariably shows a link that introduces you to a range of financial options, which may be provided by the company or by third party vendors. Technically speaking this is what is called as B2B (Business to Business) computing. What we are witnessing is a virtual world that is parallely growing with the real world out here. Needless to say that the Internet also helps the growth of industries that deal in car and bike accessories, extra fittings etc.

Analysis

The renewed vigor in the Internet arena is justified. The automobile industry is set to face a substantial fall in sales, which can be counteracted only by futuristic sales strategies and innovative ideas. "World vehicle sales will drop 7.9% in 2001 to 50.6 million, and slide another 3.8% in 2002, according to Autopolis" [Author Not Known1, 2002]. Obviously the strategies of companies would be to get maximum sales through various means. Cutting costs on flabby marketing departments and reinvesting on Internet technologies to boost business has been a strong suggestion from many quarters. The idea is to maintain a small team for direct customer interaction while the web sites would entice potential customers to make the first move.

There are many common links in almost all web sites, which have become the common inclusions in almost in standard web sites. They are Model choosers, financial products, dealer locators etc. These facilities serve to simplify the online shopping experience of the customer. Most web sites have a callback facility so that a potential customer is not lost. The companies are also paying the customer incentives to buy their products from the web. This is in fact beneficial for the company because in the guise of customer satisfaction, it is actually the customer who is doing all the work, which would have otherwise required the company to employ people for that particular task.

The biggest drawback of a virtual car showroom is that the customer does not have an opportunity to test the vehicle or at least feel it, as he would normally do in a showroom. This means that the Internet mall would serve as the first level of the buying procedure where the customer has to be convinced about a brand. In such cases brands which have established themselves in the market stand a better chance than new entrants into the market.

There are many good automobile sites in the Internet, of which I think General Motors [www.gm.com],hasa very good site. Technically the site may have drawbacks, which is outside the purview of this article. The GM site opens with a display of its latest models. The site, which is artistically attractive, has an easy navigation that would help users to locate specific information. As far as marketing strategies are concerned, the site has the usual add-ons, like an interactive dealer locator, financial solutions and model chooser. What stands apart in the site is a facility by which the customer can download specific automobile information into his PDA. This I believe would have been designed to help the marketing staff on the field for easy and updated reference on a particular car model. This emphasizes the importance of clubbing technology and invaluable human talent. Similarly the company offers innovative offers like Upromise, GM cards, car rental facilities, car-leasing etc. More and more companies are concentrating on the rental and leasing business segment as the car sales have come down. Similarly the business in used car sales is also picking up very fast. GM also has country specific information to suit its customers worldwide. GM also has an archive of experiences gained through the years, which it has put on its web site. This could be a way to develop an emotional rapport with prospective customers.

Toyota [www.toyota.com]hastried to put forth a technically savvy website with a link that allows the user to build his/her model. Even though the link has some problems, it is a welcome addition to the site, which has all the common ingredients of a 'normal' auto site.

The fiat site [www.fiat.com]looksstarved when compared to other sites. The company has divided its links into country specific links. In the country links you can buy accessories and other goodies for your car. Fiat has done well to get the customer attention by including a virtual tour of its current models. This allows the potential customer to look at the car and then decide to go to the dealer for an offer. This site will certainly boost customer confidence when deciding on a buy. Maintaining customer confidence ensures future sales.

The Volkswagen site [www.vw.com]hasstressed on consumer satisfaction. As Toyota, it too has a section that allows users to build their own models. You just have to invest a few clicks, make some selections and a dealer will call on you to apprise you whether such a mix and match is possible. This is a clear strategy to get the customer talk to the dealer. Once the customer talks and takes the initiative, the company can capitalize on his needs, specific requirements and maybe even persuade him to buy an existing model. The site also has a link that takes the customer to a detailed tour of the company's manufacturing facilities.

Mercedes [http://www.mercedes.com/e/default.htm]onits part has tried to encompass all automotive related activities on the net. It has in addition to the routine links, links through which you can buy tickets for racing events, online games, sports news and a magazine. Mercedes also offers a mobility package that provides you life long mobility guarantee in case your Mercedes breaks down in any western European country. As mentioned before, such measures that takes care of customer confidence will surely go a long way in enhancing business.

Some sites announce the general culture and feelings the brand name suggests. An example is the Ducati web site [www.ducati.com].Ifound the site reflecting a sense of hurriedness. Although the links are 'everywhere' and the navigation…

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