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Old 2nd June 2005, 23:31   #1
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Default How carmakers finalize car specifications !

This is a story about ‘How carmakers finalize car specifications’. I don’t know whether it is true of false but thought it is worth sharing with you all guys.

Long back in 1970s or near about, a Japanese carmaker decided to explore the world market. Preliminary market surveys indicated that company had good chances in Germany, Saudi Arabia and the US.

Done, shiploads of car flooded in those markets but no sales!! Company got worried and then hired a marketing consultancy firm to find out the reasons and also to suggest some marketing strategies.

The agency sent its teams in the all three markets viz, Germany, Saudi Arabia and the US. Instead of asking routine questions, the interviewing team narrated a hypothetical scenario and asked only two questions.

“ Imagine you are in a boat in Pacific Ocean along with your wife, your mother and your son. Except you nobody can swim. A technical fault developed and boat started sinking. With only one life jacket, you could save only one person. To whom you would save: Wife, Mother or Son? And Why?

Results were interesting.

Majority of Germans told that they would save their son. The reason was:
“We need strong young Germans to take our beloved nation to its original glorious heights. I must save my son.”


Without a single exception all Arabs said they would save their mother. Reasons: Mother is God to me, if I loose her I will never get another. So at any cost I will save my mother.

Almost every American was in favor of his wife.

Based on this feedback the agency advice the carmaker and soon that car marker achieved a massive success in a surprising shorter time span!

What that agency suggested to the carmaker? Read on.

Well, after the first survey, that agency conducted another round of survey, this time it was rather more focused. In Germany surveyor interviewed only German kids under 16 and still staying with their parents, in Saudi Arabia only Arab mothers were interviewed and in US only married women under the age group of 30-40 were interviewed. This time the questions were more or less standard survey type checking likes and dislikes regarding car’s features, specifications, shape, size, color, interiors and of course price!

Then the agency called Design engineers of that car maker, showed them the data and asked them to design three distinct set of car models targeted to German, Arab and US markets. Cars for Germany are to be based on what German kids wanted in their new car, cars meant for Arab market must be full of features that an Arab mother would like to see and American models must reflect features that a typical American house wife wants.

Car buying (at least in those days) was a major decision (probably second to housing in terms of investment and emotional attachment) and mostly it is a family decisions. When a prospective German / Arab / American family visits a car dealership each member will want a car based on his/her own likings and no single car will satisfy all of them.

The decision maker (mostly the husband) tends to give priority to a family member; he wants to please the most!

The first survey revealed that a German give more importance to his son, Arab puts his mother next to God and American would try to please their wife.

The second survey tells what German kids want, what Arab mothers wish and what features would impress a typical American housewife.

So after introduction of revised models in each of these markets, whenever a Germany family visited a car dealership, German kids saw these models specifically tailored to their liking and no doubt German kid jumped for it. Naturally a German father had no choice but to buy that car because his son liked it. Arab blindly bought what his mother indicate and American went by his wife’s choice.

No doubt that Japanese car brand become an overnight success.


When a carmaker introduces a product in a market, it is only after a lot of market research and after being in the business for decades, they do have an army of qualified engineers, better resources and financial muscles to carry out such extensive studies and market search.

All features, specifications , options and of course the pricing offered is always a best possible compromise given the target audience, usage pattern and price sensitivity.

People often comment on certain features and in some cases go extreme in bashing a car model.

For example:

Hyundai Santro (looks)
Maruti Baleno (tire size, rear end shape)
NHC (BHP, low ground clearance)



Do you think Carmakers have no brains not to see the things that, you, me and any Tom Dick and Harry can point out so easily?
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Old 2nd June 2005, 23:37   #2
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Quote:
Maruti Baleno (tire size, rear end shape)
NHC (BHP, low ground clearance
I agree with you SMG.. why dont carmakers look at these things.. as far as the NHC is concerned Honda is not concerned since the car is selling like hot cakes.

But maruti baleno should have wider tyres and i think Maruti are already at it..
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Old 3rd June 2005, 00:52   #3
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that story does hold true to India.but......Indian mindset is average kya hai? ,brand image and what is maintanence cost.That is why companies like Opel and Fiat have failed(european thinking) but Maruti and Toyota have succeded even after offering crap cars to indian people for years(i:e not considering the new launches).now people will realise that technology comes at a price when a swift ZXi has some AC trouble and the AMCC needs to be replaced or that large taillight and headlight have to be replaced due to damage.Also the baleno is given skiner tyres to improve fuel effeciency,but it mainly failed because of the wrong pricing rather than the looks and tyres.

the reason why many people on this forum bash the santro and NHC because they have a more German kids mindset(that is they love good looks,power and tech...) than indian mindset(FE....).most of them are auto crazy unlike many indians.so common man does not bash the NHC and Santro(their sales figure shows it).

Last edited by merve_extreme : 3rd June 2005 at 00:56.
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Old 3rd June 2005, 21:59   #4
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the reason why many people on this forum bash the santro and NHC because they have a more German kids mindset(that is they love good looks,power and tech...) than indian mindset(FE....).most of them are auto crazy unlike many indians.so common man does not bash the NHC and Santro(their sales figure shows it)
you said it, bro...!!! 9007 units of santro were sold in april, second only to the alto..!!! now, how many people would buy santro if each and every one of the buyers thought like us??? none..!!!!

as merve said, the sales figures show that santro is one of the bestsellers, and so is honda city; therefore, the manufacturers go for mass appeal first, and then for individual preference.... of all the people out there, assuming 50% of our population has the capacity to buy a car, only 0.0001% of them would be afficionados like us, and car manufacturers can't gather volumes by catering to our needs only now, can they.... so, santro for the common man, accent for the dude, elantra and sonata for the executives, and the tiburon and terracan for people like us....


Quote:
Do you think Carmakers have no brains not to see the things that, you, me and any Tom Dick and Harry can point out so easily?
well, i think sometimes they tend to "overlook" certain obvious factors, hoping to achieve economies by scale, and trying to appeal to the mass.... i, for one, like the baleno's retro- rice-racer-of-the-80's, kind of style; then again, figures speak for themselves- the accent, or more recently, the honda city, outsells the baleno by a country mile, which would not have been the case if it was styled differently.... there comes the "economy" factor- redesigning a car at manufacturing level isn't cheap, so maybe maruti is thinking, that it won't be able to make up the cost that would go into redesigning the car, by selling the redesigned car....
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Old 3rd June 2005, 23:07   #5
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do indian car makers....e.g. tata, maruti etc....carry out such surverys *BEFORE DESIGN/LAUNCH* of a new model ????

and if yes, how large a part of those survery results considered and incorporated into the new product.

and again, if yes, i would definitely like to see the survey and the results based on which Maruti launched the Versa. but i guess that is not possible.

i truly was under the impression that the "options" were just stuffed down our throat.
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Old 3rd June 2005, 23:27   #6
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Originally Posted by hell_rider
do indian car makers....e.g. tata, maruti etc....carry out such surverys *BEFORE DESIGN/LAUNCH* of a new model ????

and if yes, how large a part of those survery results considered and incorporated into the new product.

and again, if yes, i would definitely like to see the survey and the results based on which Maruti launched the Versa. but i guess that is not possible.

i truly was under the impression that the "options" were just stuffed down our throat.

yes, they do. Because I took part in one survey conducted by FORD ( in 1999 when I was in Pune, India) I don't remeber the name of the sureying company , but they first called me and fixed up an apponintment, then two laptop equipped gentlemen (one of them was American!) came to my office, they properly introduced themseleves and explained me the purpose of the survey , how long it would take and how my answers would help them in bringing a better product etc. Also they were polite enough to repect my privacy (regarding to some questions in the survey)

I answered some 40 odd questions in different categories like Interior, Exterior, Engine, Safty , Usage pattern, How many outstation trips, Family, Which car your boss drives, Stik shift-Automatic, How long you would like to keep this car etc.

And at the end of the survey , I got a parker pen as a gift! Not bad either.
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Old 15th October 2009, 10:21   #7
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sorry to fast forward this thread from 2005 to 2009.

I just wants to ask you is the Indian Mind set is just as the same as in 2005. or does it change?. Is the customer is choosy while opting for features (still lacks from its European counterparts).

Regarding the trim level they offers in India, why can't these manufactures offer upgrade features as optional at a cost. like in the maruti's case Lxi to Vxi etc if a customer wishes for the same after some day/month/year of ownership. or for safety like power windows/security/alarm, ABS, Airbags etc. I think this part is entirely dominated by after markets

Interesting part is that Maruti-Suzuki/Hyundai exports car to International Market which having different and good features as well. why don't the manufacturers offer a plug and play upgrade features here.
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Old 15th October 2009, 10:45   #8
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Originally Posted by SMG View Post
When a carmaker introduces a product in a market, it is only after a lot of market research and after being in the business for decades, they do have an army of qualified engineers, better resources and financial muscles to carry out such extensive studies and market search.

All features, specifications , options and of course the pricing offered is always a best possible compromise given the target audience, usage pattern and price sensitivity.

People often comment on certain features and in some cases go extreme in bashing a car model.

Do you think Carmakers have no brains not to see the things that, you, me and any Tom Dick and Harry can point out so easily?
Yes the companies do that but will you please care to explain as to why many model bomb or become a flop. Many good products bomb only due to wrong marketing policies, either wrong price, wrong target segment, wrong positioning, poor dealers or A.S.S. and other factors. And some products are simply poorly designed technically or does not suit the target segment at all.

For example, Cruise control and Sun roof are not suitable for our conditions but many companies insist on pushing these. Honda has pushed cruise control in its refreshed Civic while it could have used the same money to provide other features which are needed in India like HID lamps or multiple other options.

Just having a degree does not mean one also gets intelligence, common sense, logic or business acumen. Even many companies manned by best of brains have gone under only because of wrong decisions, e.g., Lehman Brothers.
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Old 15th October 2009, 12:59   #9
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The tale about the agency is brilliant. That's very smart strategy asking who in the family matters most to the citizens of that country and making sure that the car specs match what those family members want.
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Old 15th October 2009, 13:31   #10
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You can be rest assured that the INDIAN mentality has not changed to a very great extent. Had the case been then Maruti would most definitely not be selling the new Alto as the A-Star & also continue to sell the old Auto side-by-side. Skoda would have brought the prices of the Fabia (& Laura) to decent levels. Jazz (the H Effect) would not have been launched at such a premium (No surprises that the car has surpassed its expectations).
There are so so many examples that I can cite, however most of them will either be rubbished or people will think that I have lost my marbles. But I am counting on the current generation (1-5 year old) who have already experienced better cars (i20, Punto). It is this generation who will compel manufacturers to bring better & improved cars.
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Old 15th October 2009, 15:14   #11
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Look at Maruti it still sells Low end hatchback cars because people are there to buy it with 4 wheels, no power windows or 2 power windows which takes you from point A to point B and still its a car. But what about safety ! well its safer than a two wheeler is in't it.

Well ! Indian market will change but slowly thou, when economy is on the rise and cars become more affordable. Soon there is going to be stiff competition in premium hatchback space with all global players coming in. Sedans, big cars, MPVs wont be so popular because of its size and mileage and city drivability as premium hatch backs will be.
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Old 16th October 2009, 11:04   #12
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Old thread but worth a read for sure. In a nutshell, what the car makers did is design their cars / specs in a way that it appeals to the opinion makers? Those whose preferences count! I still doubt whether this story is really true as, irrespective of who matters most in the family, a car buyer would be driven by his own preferences / judgement the most. Thats not to say that the opinion of family members doesn't count (quite the opposite), but surely not so much that their research only revolves around 16 year old German kids!

Quote:
Do you think Carmakers have no brains not to see the things that, you, me and any Tom Dick and Harry can point out so easily?
Evidently so. Case in point : The logan's pricing.
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Old 16th October 2009, 11:55   #13
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Actually the story seemes to be reallly well cooked (as in cooked up). Yep the guys do actually do a study, but possibly not of this kind.

And the persons doing the study are normally incapable. (The company where I work we have had a fair experience with market research and all of it quite poor so we take the research with a lot of salt)

Baleno, Logan, Versa (I was one of the persons surveyed for this vehicle), Zen Estillo, are good examples of cars released with lop sided surveys.
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Old 16th October 2009, 12:30   #14
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this makes me remember something, when nissan was in a financial crisis and about to shutdown, renault's CEO carlos ghoshn came and told the nissan guys after going through their factory that "you people know how to manufacture car, but dont know how to sell them".it is due to him that nissan gained a reputation.
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Old 16th October 2009, 14:25   #15
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Its a cooked up story, but still it makes a point. Its true not only for car markets, but for all markets.

We have average cars in the market, but they have become top sellers. I think its mainly because of marketing.

Currently i can think of the new swift ad. It projects swift as the rally car. So most of the youngsters and ppl who are crazy about speed keep swift as the first option when buying the car.
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