Market
Discuss about the Preferences For Shared Autonomous Vehicles.
The purpose of this paper is to focus on the concept of highly automated and fully automated vehicles and their impacts on the market of Australia. It will also review the influences of consumer behavior on the promotion of these vehicles. Furthermore, this paper will discuss the market size and market trends of Australia’s automotive market along with the product positioning of these vehicles. Moreover, it will also explain the target market of the company and how the company can market their products more efficiently to the targeted consumer of the company.
The market of highly automated and fully automated vehicles is growing at an exponential rate. The market size of highly autonomous vehicles is slightly larger than the fully autonomous vehicles. It is estimated that 30% of the vehicles sold in the next ten years will be autonomous cars. The market share of Volkswagen will increase to a considerable level in the next five years. Volkswagen will introduce self-driving car named Sedric on an international scale within the next few years (En.volkswagen.com, 2018). Reduced energy consumption, increased lane capacity, and real-time information is the three benefits that would drive the autonomous vehicle market of Australia. Product lifecycle is defined as the sequence of steps from the introduction to its decline. In the introductory phase, Volkswagen will promote the products offerings and explain the uniqueness of their autonomous cars. In the growth phase, the company will try to build their revenue by appealing to the wider audience of the country. In this stage, these self-driving cars will be more popular. In the maturity phase, consumers will be interested in purchasing these cars, thus neither resulting in decline or growth (Sun et al., 2017). As more developed products will be available in the market, the market size of this cars will gradually decrease.
The top competitors of Volkswagen in Australia are Tesla, Toyota, and Hyundai. These companies are the primary competitors of Volkswagen. Apple is one of the secondary competitors of Volkswagen in the market for self-driving cars. Their analysis is given below:
An American multinational corporation which has reputation for developing electric vehicles and other futuristic vehicles including self-driving cars. This company is founded in 2003, and they are considered to be one of the competitors of Volkswagen regarding self-driving cars (Hillier et al., 2015). They have earned number 12 position in the market in terms of self-driving cars.
Competitors
It is a Japanese company founded in 1937, which manufactures cars with the name of the brand Toyota. It owns some share in Subaru Corporation and other industries. It is one of the strongest competition of Volkswagen in terms of self-driving cars. Toyota has enough resources to develop these cars giving them a competitive advantage over the other companies.
Hyundai is a South Korean vehicle company established in 1967 and it is headquartered in Seoul, South Korea. Aslan, Eon, Elantra, and Azera are some of the brands produced and sold all over the world. They have decided to develop self-driving cars by the end of 2030. They are considered to be one of the strongest competitors of Volkswagen in terms of level 5 autonomous cars. Various research academies have identified that Hyundai is the tenth company in the market to develop these cars.
Apple Inc. has been planning to develop self-driving cars for quite some time. They intend to develop highly automated and fully automated self-driving cars within the next few years. They have the resources to develop these cars successfully. They can be a tough competition to Volkswagen’s self-driving cars. They are one of the topmost indirect competition to Volkswagen and other automobile companies who are developing self-driving cars.
The self-driving cars from Volkswagen should be positioned in a way that it should reach a majority of the targeted customers of the company. These cars are very easy to navigate and this feature will appeal to technology-savvy consumers of the company, which constitutes their main target group. The safety and reliability of these cars should be marketed to these customers so that a majority of customers of the target group would like to purchase these cars (Payre et al., 2014). The pioneering technology used to develop these cars should appeal to this group because they like to have as firsthand experience of any technologically advanced automobiles.
Segmentation is defined as the process by which the consumers of a particular market according to the demands of their consumer base. Segmentation is done on the basis of the geographic, demographic, behavioral and psychographic profile of the consumers. Based on the demographic and psychographic segmentation, there are three groups which can be targeted by Volkswagen. These three groups consist of technology geeks, parents and old citizens of the country (Stephens et al., 2016). The technology geeks consist of a group of consumers whose age ranges from 18 to 34 years old. This group is highly educated and they want to have firsthand experience on these self-driving cars. The costs of these cars are high, thus these consumer groups should belong to the high-income group of the country. These consumers want to experience convenience and fun while traveling from one place to another. These driverless cars will provide both of this sensation to them. Most of these consumers will be from the urban area while having easy access to technological advancements. Based on their psychographic profile these groups share the notion of having better services with the help of technology. These consumers are the main target group of the company.
Product positioning
Another target group of Volkswagen can be identified as the old people who are physically handicapped and incapable of driving. The average age of this group of people lies around 50 to 60 years of age and they are physically handicapped (Colquitt and Dowsett, 2017). The rate of accident in these self-driving cars is less than the traditional cars which can prompt them to buy these cars for the safety of their children. Volkswagen can target the group of technology geeks to increase the sales of their self-driving cars (Litman, 2017). These groups consist of the largest section of potential customers in the market of Australia. These group of consumers will play a vital role in increasing the sales of these cars. They will be eager to have a firsthand experience on these cars and will provide accurate feedback about the performance of these cars.
The consumer decision process is consists of five stages namely, need recognition, information search, evaluation of alternatives, purchasing choice and lastly post-purchase behavior. Actual state is defined as their current state of need and the desired state is defined as the state the consumers wish to acquire. The young group of consumers has a tendency to gain experience about these technologically advanced self-driving cars (Stocker and Shaheen, 2017). These group of customers will buy this car to increase the level of convenience of their transportation. They do not want to wait for public transportation and they do not want to be late for work. They want to reach their decision quickly and safely, with the help of advanced technology. This is the reason or need of this group of young customers of Australia. The next stage is the information search, which consists of three stages; pre-purchase search, internal search consideration set, and external search. These customers have to conduct research before deciding whether they should buy these cars or not. They would evaluate the safety of using these cars for themselves and their family (Davidson and Spinoulas, 2015). If they think these cars from Volkswagen are safe they will buy these cars otherwise not.
These customers will think about their reliability and safety of these cars from Volkswagen, thus he is using his internal search consideration set. He will use this information to guide him towards taking a right decision. He will further ask their friends and relatives about their versatility thus conducting an external search. These group will consider cars from other brands and evaluate them in terms of price, performance and safety features of these cars. After evaluating these options they will decide to buy these autonomous cars from Volkswagen due to their high performance and the level of safety associated with it. Higher reliability is the decision rule guiding the choice of these customers and they will select a retail outlet which is located closest to their residential area. The final stage of these decision-making process is the post-purchase behavior of these customers. Customer satisfaction will increase the sales of these cars from Volkswagen thus increasing their profitability. If the customer is not satisfied, the company should ask them about their feedback and work on the areas which need improvement. Developing products according to the feedback from the customers increase the sales of the company.
Target market segmentation
Internal influences are the personal beliefs, attitudes, and values which affects the behavior of these customers of the company. These cars from Volkswagen are so positioned in the market to satisfy the needs and motives of these customers. These cars are positioned to satisfy psychological needs of these customers. They fulfill safety needs of a person, which lies in the second level of Maslow’s Hierarchy of Needs. These cars have a low tendency to cause accidents and have a higher level of security system associated with them. Consumers tend to make decisions about the product based on their perception rather than real information. Volkswagen should employ brand marketing to create stages of perception. These campaigns are able to create the stages of perception such as sensation, attention, interpretation, and retention. The consumers tend to select how to respond to specific stimuli based on the interaction they have with their marketers. According to the perception of these customers, cars from Volkswagen excel in terms of performance, safety, and reliability. These consumers tend to judge the quality of the cars based on some informational cues they receive from their external sources. Volkswagen can use the learning theory of reasoning to promote the self-driving cars from their brand. They can promote their self-driving cars using the theory of reasoning, as these products fulfill the safety needs of these customers. Fear, uncertainty, and doubt can encourage these consumers to decide whether they should buy these cars or not. They can prioritize the concept of the value of the product, safety and reliability by among these consumers.
A reference group consists of people who share same interests and values among themselves. Recommendations from these groups have an influential role to change the behavior of the customers. Family members are referred to as the primary reference group of the targeted consumer market of Volkswagen. This reference group has an influential role in influencing the decisions of the young technology savvy customers of the organization (Slovic, 2016). These customers will not just buy the product just for their own convenience, but for the convenience of their family members. Safety of their family members will play an influential role in the decision-making process of these customers. These customers will seek the opinions of their family members before making any decision about purchasing these self-driving cars. Different type of situations plays a different role in the customer decision-making process (Tomczak et al., 2018). These situations are communication, purchase, usage, and disposal. Volkswagen can advertise their products in appropriate media to influence the behavior of the customers. These advertisements will enable them to influence the communication situation (Hoffmann and Tooth, 2017) Marketers should use appropriate strategies to develop interpersonal relationships in order to influence the purchase situation. The marketers should understand how the products should be used in order to influence the decision of the customers (Borden, 2015). Disposal of products is considered to be an important attribute by some of the customers of this company. The targeted group of the company, which is the technology savvy group, shares the values of conservation and self-enhancement. With the consumption of this product, these values are upheld among these groups of consumers (Oliver, 2014). Self-driving cars appeal to the demands of early adopters, who have a significant presence in the market.
Decision-making process, involvement, and perceived risk
Volkswagen is considered as one of the major players in the automotive market of Australia, and they are thinking about developing self-driving cars for quite some time. Their very first fully automated car Sedric is the first self-driving car of level 5 automation. This car is able to provide better mobility experience to their customers. This product is eco-friendly thus it does not have a harmful effect on the environment. Safety features associated with this car is higher than their normal cars in the market. A button will be provided so that the user can interact with the car and have better driving experience. It will be able to provide mobility service to anyone at any time (Armstrong et al., 2015). The company should market the convenience of operating this car to the targeted audience of the company. They should also market the safety and reliability features of the car to convince this group of customers to by this car.
Volkswagen designed this car using advanced technology and using advanced materials with the help of their research and development department. These cars are naturally placed at a higher price than the rest of the cars of the company. However, they should look for ways to reduce the price of their cars without compromising with any of the features of this car (Tanner and Raymond, 2015). They should develop more cars that can fit the budget of the targeted consumers of the company. They must allow the consumers to have a better experience while driving. If they want to keep the prices of these cars, they should consider adding some features within that price range to attract more customers from the targeted group.
Volkswagen is a Germany-based company who has developed their business on a global scale. They have opened their branches in 1953 and their very first car launched in Australia was Beetle. They are able to sell more than 650,000 vehicles all over Australia. They have played an important role to satisfy the car-loving people of Australia (Cohen et al., 2014). With time, orders for self-driving cars will increase all over in Australia. They should be able to handle such pressure and they need to increase their capacity of production to meet these demands and deliver this product on time.
Volkswagen has to promote their first self-driving cars through public relations and advertising their products on a large scale. It will help them to reach new customers and appeal to their personalities without spending much money on marketing. They have to promote their products online to reach a wider group of consumers. They must gain positive reputation from their customers by supporting charitable causes (Buch et al., 2018). They should reveal information regarding the production process of their very first fully automated car Sedric.
Conclusion
This paper concludes that fully automated self-driving cars will change the concept of transportation on a global scale. It will also have a significant effect on the markets of Australia, the market size for these vehicles is growing at an exponential rate. The product should be positioned in such a way so that it could reach more potential customer across the country. Furthermore, it can be concluded that various external and internal factors influence consumer behavior of Volkswagen. Volkswagen should develop appropriate marketing strategy using 4Ps of the marketing mix to market their products to their targeted consumers, which consists of young technology savvy people of the country.
References
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