6 Tips to Successful Market Research in the Automotive Industry
The automotive industry market is large and growing. Automotive companies around the world are ready to leverage the latest trends and embrace digital transformation to improve engineering, design, manufacturing, and efficiency of vehicles, as well as reduce the negative environmental impact. Market research is a great tool that can help automotive companies determine where to focus the effort in the first place to meet market demand and get the best return on investment.
Why Automotive Industry Needs Market Research
Successful market research of the automotive industry can provide a wealth of benefits for both manufacturers and dealers. These benefits include:
- The ability to align strategy to market potential
- Exploration of political, economic, social, and technological forces affecting the target market (PEST analysis)
- Useful insight informing marketing strategies and brand image management
- Aligning strategies for new product development with demographics and customer expectations
- Being aware of macroeconomic conditions affecting the industry and target market opportunities and threats
- The ability to predict revenues based on the income and expenditure profile of a target audience
Like any other business, automotive companies should base their managerial and strategic decisions on the solid knowledge of the existing data and market trends insights. Otherwise, they risk losing momentum, overspending on irrelevant innovations, marketing the product to the wrong target audience and, consequently, exiting the market being unable to generate sustainable revenue growth.
Providing automotive IT consulting for many years, FPT Software experts have singled out 6 tips that help companies do successful market research in the automotive industry.
Make Market Research an Ongoing Process
The automotive market and society itself develop fast, so it is necessary to be on the constant lookout for industry trends, emerging technologies, and customer feedback. Thus, do not think of market research as of a one-time report. Instead, approach it as an ongoing process that should inform all the decisions and practices of your organization. Continuous monitoring of economic conditions, consumer behaviour, and competitors’ activity are sure to have a positive impact on the management of your business.
Know Your Objectives
Market research is not an expenditure - it is an investment. What does it change? Well, you are not obliged to do research, so if you do invest in it, there should be a clear rationale for doing so. Therefore, the very first step to successful market research in the automotive industry is defining your research goals. You should clearly define what question the research should answer and how answering this question will help you reach the overall goals of your organization. Only then can your market research be a smart investment and a tool for growing business.
Confirm the Reliability of Data
Most researches are based on census data; however, they are not as reliable as it is generally believed. Refer to good analysts to dive deeper and account for error rates, changes in the category definition, sample peculiarities, and other limitations of the data. Use several sources of information and different methods of research including literature reviews, surveys, focus groups, field research, etc. A good idea will be to use a market research platform that has integrated tools for data quality control. This way, you will be able to get the information you can trust.
Use Both Quantitative and Qualitative Research
The choice of research methodology is just as important. While automotive IT companies love to see clear graphs and statistics on sales, there is a clear sentiment standing behind each purchase. Qualitative research provides valuable insight into the emotions of your clients, which can further be used for creating a product roadmap and advertising. Thus, make sure your market research involves both quantitative and qualitative methods.
Make Sure You Understand the Report
If you cooperate with an automotive it consulting company, do not hesitate to ask how the market research applies to your company. While it is preferable to have a concise report starting with conclusions, it is vital that all the stakeholders understand the sources and the implications of the data. If you cannot answer the “so what?” question after reading a market research report, it is not likely to have any impact on your company no matter how scrupulous the research was.
Commit to Acting Upon the Market Research
The success of market research depends on its applicability. Still, resistance to change can make the management not act upon it even it presents actionable insights into the market. Embrace the idea that market research may not fit into your current strategy or differ from your assumptions about the market. Thus, be ready to recognise your mistakes and manage change.
Market research is a valuable tool that helps automotive companies respond to market demand and grow their revenues. Nevertheless, its successful application depends on many factors, the quality of research and the company’s readiness to change in particular.