Consumer Needs in Automotive Sector

Pradeep Saxena, Sr Vice President, TNS Automotive India

Understanding Consumer Needs: Why is it important?

The fundamental principle underlying the marketing discipline is satisfying consumer or customer needs. All we need to do, therefore, is to find out what consumers want or why they prefer a competitor's product and deliver something better. We all know it is a little more complex than this. Consumers do not necessarily know why they prefer one brand to another. When asked why, they will give us sound, tangible reasons. But these are not necessarily the real motivating reasons. This is because brands satisfy more than functional needs - there is also a strong emotive component. It is difficult enough to identify and understand these emotive needs, let alone how we might position a brand to tap them.

The consumer is driven by underlying emotive needs, which are a result of the consumer's psychological makeup. Consumers satisfy these needs through a variety of means. Branding the product or service provides a symbolic dimension, which enables the consumer to establish a relationship with the product. The nature of the brand relationship, if all goes well, satisfies the consumer's need. The brand, therefore, provides a symbolic overlay to the product, enabling the establishment of a stronger emotive relationship.

What are the various kinds of needs?

Emotive Needs: Let's use an example to illustrate exactly what we mean by emotive needs. Imagine someone who is very powerful and status conscious. He is quite powerful and likes to project his status in everything that he does. There are things, which can measure up to the standards that he lives by and which make him feel the same way. If something does not fit in with this scheme of things, a great deal of anxiety results. This person has a strong emotive need to project his status and authority.

Products and brands may assist this process by providing the appropriate gratification. For some, cars may serve such a purpose. Certain car brands can be used to help maintain control and focus. The product has both the physical and emotional effect of being a symbol; providing the user in this case with added focus, the feeling of being on top of things. This is what we describe as the consumer's emotive or psychological need.

Social Identity Needs: We are social animals with a strong need to fit in, to belong and to identify with a particular group. Patriotism, parochialism, family, club, and peer group identification are all expressions of social identity needs. Social roles are also expressions of identity need, the businessperson, the homemaker, the student to name but a few.

Brands also serve an important function here. Brands can become icons for a group, helping to define group belonging and role identification. One of the most overt ways brands are used is to display membership to a particular social stratum.

Functional Needs: Functional needs are the third and most accessible layer of needs. Such needs are quite tangible, and have a strong rational component. Price, availability and convenience are good examples.

 
Functional needs are easily identified through direct questioning. Consumers are very comfortable talking at this level. However, in many cases these more functional needs are no more than rationalisation for the more hidden emotive needs. This does not mean to say they are unimportant, as it is a human condition to want to be seen as rational and intelligent. The key is to understand that they are not the drivers of brand preference, but the rationalisation for it.

So how can Marketers satisfy these needs?

So far, we have talked about the three layers of needs. The other side of the coin is the brand image and how this works to satisfy consumer needs. As we have categorised the needs into three layers, we can divide brand image into three corresponding layers.

Symbolism (Personality): All brands to some degree have a symbolic meaning, a personality. The meaning is derived from the product itself and is moulded by the brand's image. Different automotive brands express this through product design and the symbolism of the brand itself, the brand's product character, styling and advertising. The symbolic meaning of the brand satisfies the more emotive needs because they are both operating at the same implicit level.

Social Values: The second layer of the brand's image is its social value. For example, where does the brand fit into the social hierarchy; is it ordinary or up market, is it male or female, young or old? If the brand's social value does not send out the right signals it won't be particularly attractive. The brand's social value satisfies our social identity need. For example, when we get a promotion, we often have the inclination to buy a larger car, to show that we are progressing in life. Therefore we would look for a brand with a more sophisticated social value, as an ordinary, everyday brand just wouldn't do.

Product features: The outer layer of the brand image is its tangible product features. These satisfy our more functional needs. Again, while not necessarily acting as the driver for brand preference, these do provide a means of differentiation and in many cases rationalisation for preference. Product features, in the automotive category include such characteristics as price and body shape, as well as product features such as ABS, alloy wheels, high-end music system, which mayor may not be overtly experienced.

Before we conclude, lets look at another example away from Automotive category. If one looks at the kind of holiday destinations that one chooses, tourism marketers recognise that countries need to be developed as brands, with distinct personalities that promise a particular feeling and experience - Australia promises a rugged kind of adventure while Italy promises a friendly people-based experience. Marketers can take advantage of this if their product's country of origin helps to build or reinforce their brand's image For example a wine claiming French heritage promises something quite different from a Spanish, Australian or Chilean wine - countries which are powerful brands in themselves. Even brands without a regional heritage can leverage image by using promotions such as travel competitions and prizes that utilise the brand image of a particular country.

Back in the Automotive sector, BMW trades on the German supreme engineering image to help give the brand a superior, 'ultimate driving machine' persona. Highlighting the German heritage of Volkswagen would be less relevant for the Beetle as it is at odds with the carefree image of the car. Peugeot, made in France, offers an understated and intelligent driving experience, while Daewoo from Korea brings a more down to earth, modest and even sedate driving experience.

India Automotive Need Segmentation Study:

The 2007 Auto Need Segmentation and brand health study by TNS Automotive, is the only initiative of its kind that has strived to understand the latent motivations behind purchase of all available brands in India. TNS did the first study of this kind in 2004 and in the past two years the needs have gotten, more sharply defined and the relative positions of the existing brands have been altered significantly by the entry of new models like the Maruti Suzuki SX4, Mahindra Renault Logan and Hyundai Verna.

The study identifies six need segments in the Indian automotive market:

 
The key drivers for the six need segments in India are summarised below:

▪	Potency buyers are motivated by a need to feel attractive and sexy and appear dashing/dynamic; product styling, which is high tech/futuristic while being tough and rugged, appeals to this group.
▪	Status buyers are motivated by the need to be successful/accomplished, influential and powerful/authoritative; the personality that they want to exhibit is one of sophistication and style. They seek a product design that is powerful and imposing, capable of driving at high speed and equipped with the latest entertainment gadgets and luxurious interiors.
▪	Control buyers have a personality that is rational, risk averse and focused. Hence, the primary gratification that they seek from their car is to feel in-control and efficient/competent. Apart form good resale value and easy maintenance, they seek durable engine and extra seating capacity.
▪	Security buyers perceive the car as a support mechanism, which will make them feel good about themselves. This in turn makes them feel secure/ protected. The buyers in this segment are largely conformist in nature, loyal, dependable and have a sensitive/gentle personality.
▪	Comfort buyers strongly believe that life is not about personal success but more about bonding with their family and society. They take pride in being providers with a heightened sense of duty and responsibility. This segment of customers stays away from radical styling, choosing a more practical and elegant design and seek cars that offer good fuel economy and low maintenance costs.
▪	Liberation is the smallest of the six need segments, but which has grown significantly over the past year - these buyers have a carefree, enthusiastic and upbeat personality. This segment of buyers, like to feel excited, young and exhilarated when using a car.

 
 
These need segments change and evolve as consumer needs evolve and marketers find ways to satisfy their needs. The sizes of need segments have changed from the last time TNS conducted this study.

Need Segment by Vehicle Categories

The six need segments exist in all vehicle categories. There are customers even in the hatchback segment, who select a certain brand, because it helps him satisfy a need to project a certain status in life, whereas there are a number of premium sedan buyers, who are more interested in providing a large and comfortable car for their family, seeking societal approval of his role as a provider.

However, if one looks at the passenger vehicle market as a category and various segments within as sub-categories, we see that that as a segment, entry level hatch back cars like Maruti 800, Maruti Alto, Hyundai Santro, etc. satisfy the need to give their lives a certain sense of control and structure. On the other hand, premium hatchbacks like the Maruti Swift and Hyundai Getz provide a sense of masculinity and dynamism. In the sedan market, the entry level sedans and regular sedan help satisfy a need of providing for the family, moving up in society, whereas premium sedans like the Honda Civic and Toyota Corolla serve as a vehicle to flaunt one's personal or professional success and signal a sense of achievement.

 
Finally, the SUV/MUV category truly serves as a middle ground for most customers. For some, it provides a sense of adventure through its rough terrain capability and high seating position, whereas the large seating capacity serves for some, as a route for inclusion and bonding with family and friends. The premium SUVs also serve a dual role of projecting status and authority, while for others it provides a sense of independence and liberation.

Corporate Imagery

The image of the automotive corporate brands throws up some very interesting insights. At first glance, one can see that the Indian manufacturers have a 'truly' Indian image of being affiliative and seeking a sense of bonding. On the other hands, Toyota, Honda, Skoda and GM all clearly have an image of superiority and assertiveness. Customer's image of Hyundai is about control, precision and focus, whereas the European brands Fiat and Renault have a rather more extroverted image.

 
There is no clear pattern as to whether it is the impact model brands that determine the image of the manufacturer or whether it is the manufacturer image that shapes the individual imagery of each of the model brands and there is no single recipe for success. While the image of the individual Maruti model brands vary widely and cater to different need segments, whereas the Honda and GM (Chevrolet) models all focus on a single need segment - Status consistently across all their individual model brands.