TNS：Digital channels will dominate car buying process in China

TAPPS project lead:  Andy Turton, Global Development Director, Automotive, TNS

TNS launched its TAPPS(The Automotive Path to Purchase Study) in China recently.The study aims at helping car makers to better understand the buying processe of a consumer. To know more about TAPPS, please read our special report on http://autonews.gasgoo.com/topic/TNS-TAPPS/ .

Andy Turton,the lead of the study accept an interview with Gasgoo.com.

Gasgoo：Why do you launch the study of car-buying process?

Andy：The industry has used a model of the car buying process for decades that envisaged a buying process extending over several months and in which brand controlled messages were delivered via the 5 main media. The world has changed with the advent of digital channels - now consumers control much of what’s said about a brand and increasingly brands and consumers co-create the buying process. The traditional auto industry purchase funnel model does not capture the ways in which this co-creation happens, or the ways that consumers use the multiple digital channels available to them in making their vehicle choices. We wanted to provide a new more relevant way to think about the vehicle buying process - The Automotive Path to Purchase Study, TAPPS, does just that

Gasgoo：Your study shows that "car dealers are viewed as the most reliable source of advice throughout the buying process", and "people rely heavily on the advice of friends and family, as well as on social media." But which is the most reliable source that consumers rely most heavily?

Andy：Dealers and family friends are both trusted but they each play different roles - dealers are experts and offer technical and detailed advice on vehicle specifications and performance. Family and friends are trusted to advise on whether a specific purchase seems sensible for the person they know well; don’t forget that most family and friends have never bought a car themselves, so by definition they cannot provide ‘expert’ counsel.

Gasgoo：What are the most important factors affecting the Chinese car buyers' decision making?

Andy：TAPPS focused more on the influences on buying behavior than on the final choice of a vehicle but in our final interview we asked for the main reasons that a specific make and model was chosen and as in other parts of the world a mixture of factors emerged as important to Chinese buyers; it’s important to satisfy Chinese buyers on both a functional level with comfortable, well built and safe vehicles and on an emotional level - they want to like the way they feel in the car and the way others see them. The main factors in choice were:

· Safety and reliability

· Economic considerations ( purchase price, running costs, maintenance costs, maintains value over time)

· Suitability for life ( practical, good family car, etc)

· Easy to drive ( maneuverable, easy to drive in a city, easy to park)

· Fun to drive ( Top speed, good acceleration)

· Styling and the image projected by the vehicle about its owner (exterior appearance, family and friends really liked it, it looked great in advertising)

Gasgoo：Are the factors and their importance disparate in different regions or tiers of cities in China? And how?Which factors will play a bigger role in the future?

Andy：All buyer decisions were multi faceted regardless of their age, income or city tier but some differences in emphasis do exist: e.g. buyers in Tier 3 cities placed a greater emphasis on reliability and practicality

Vehicle styling is becoming more and more important to new car buyers - styling is increasingly seen by consumers as a way to differentiate between brands. In crowded cities maneuverability and also the functionality of vehicles will also grow in importance - the vehicle’s connectivity with other aspects of life so that time is not lost when standing in traffic will grow in importance.

Gasgoo：How is the Chinese consumers' car buying process different from that in the mature market?

Andy：TAPPS was launched in China and will roll out to other parts of the world during 2012 - once we have TAPPS information from other markets we’ll be able to answer this question

Gasgoo：Are the buying processes disparate in different regions or tiers of cities in China?

Andy：Not in significant ways

Gasgoo：How do you think the Chinese consumers' car buying process would evolve in the next five to ten years?

Andy：Digital channels will dominate the process and broadcast media will play increasingly specialized roles. Dealers will more often become fulfillment houses at which informed consumers will place their order - the power in the buying process will move inexorably towards the consumer; access to detailed and relevant information about all aspects of vehicles and brands will grow exponentially empowering the consumer.

Gasgoo：Your study shows that "the average purchase period in China is far shorter than previously thought, with 40% of consumers deciding on a make and model within one month." What's your opinion on the reason of that?

Andy：Two factors are at play - the first is a fact of human life; some process information quickly, focusing only on the details that matter to them and ignoring the rest, wasting no time in reaching a conclusion. Other people like to consider all things from every angle, reflect and take their time in making a decision . We see both of these human decision making styles at work in TAPPS. In addition and in favor of faster decision making in China, is the fact that most purchases are made with cash - there is no delay while finance is put in place.

Gasgoo：Could you tell us more about the influence of social media esp. digital media on intending buyers? What do you think of the effect of TV advertisements now and in the future?

Andy：Social media is use to check brand claims and to listen to the points of view of others who own a brand. Its influence is significant. Brands that use their CRM systems to activate current owners to talk well about them in social media channels will grow more quickly than those that do not. TV is use by auto brands to launch new models; roughly 70% of all auto brand media spend goes to TV. The channel will remain extremely important for many years to come. In time, as consumers gradually move away from TV consumption towards online entertainment options, the relevance of TV will reduce.

Gasgoo：Due to the characteristics of the Chinese consumers, what would be the key points for a successful marketing in the China auto market?

Andy：Understand in detail the buying process and its implications for CRM, dealer management, media budget allocation, brand positioning, etc

Gasgoo：Which aspects should the global car makers improve in marketing in China? Which aspects should the local (purely home-grown) car makers improve in marketing in China?

Andy：Global brands are not at equal stages of development in China - each has unique challenges and opportunities - there is not one solution/ area for improvement that unites them all

On the other hand it’s clear that Chinese brands do share a weakness - in all other major automotive markets in the world domestic brands are among the best known and the most respected. In China domestic brands are largely unknown and are generally not well regarded; this necessarily limits their growth potential, especially among the 40% of Chinese consumers who make very fast purchase decisions; for these individuals a brand that they don’t know about or do not like at the start of their process has no chance of forcing its way into consideration during their buying process.

Gasgoo：The Chinese local car makers have been trying to entering the mature markets. If they have had good cars with satisfying quality, which aspects should they pay more attention to in marketing in mature markets?

Andy：In all mature markets there is a segment of the market for whom value is the dominant consideration i.e., a reasonable quality, reliable vehicle that is inexpensive to run, easy to maintain and comes at a low purchase price. The Chinese brands that focus on addressing the needs of this market segment will enjoy the most success in mature markets.

TAPPS project lead:  Andy Turton Global Development Director, Automotive, TNS 

•    An automotive market researcher for the past twenty five years, Andy has developed and launched several new  research approaches. In his role as Global Development Director, he continues to innovate while also providing insight and guidance to key TNS Automotive clients. 
•    Equally at home with qualitative and quantitative approaches, Andy uses the tools of research to unlock insight; his focus is always on providing clear guidance to clients on the business growth opportunities available to them. 
•    After beginning his career in the UK,  Andy gained practical experience of automotive research in all the key markets of Europe, North America and Asia. He also spent ten years living in the United States.