Quantcast
Latest Stories

MARKETING RX

‘How do I grow my car dealership business?’

By ,

Q: We’ve been in car dealership since we married about 20 years ago. We’ve read your Segmenting book on Amazon Kindle (referring to the Senior MRx-er’s book). We particularly like your book’s theme that “the ultimate source of growing a business is marketing segments.” And so we’re thinking of getting into a related market segment. That’s the used-car dealership.

Most of our friends in the car dealership industry are no longer talking about survival. We’re now optimistic and talking of business growing. We believe the worst of our country’s economic crisis is over.

However, my wife and I also recall that, in exploring “unserved and underserved” market segments, your book advises that we should think of two or more options and not commit to just one. Can you please help us what two or more related market segments for growing our business can we study and get into?

A: It’s businessmen like you that we need in overcoming and reversing the difficulties of tough times. Like you, we regard business confidence more as a driver of economic recovery and less as its consequence.

Market segments

Now to your question: What other market segments can grow your car dealership business? Before answering, we’d like to say first that your identifying the used-car market segment is an excellent choice for business growing.

We don’t have the car sales statistics in the Philippines. In the United States, however, it’s known that used-car sales are about 2.5 times those of new-car sales. According to Art Macapagal, the Toyota car dealership head in the country, it’s in recognition of this larger segment market size that the Toyota head office in Japan is encouraging Toyota Philippines to get into this market segment.

In participating in this market segment, we’re sure you are aware that it’s a price-sensitive market. So you have to be prepared to compete on price. But as the Segmenting book says, if you’re a known brand with an established brand capital or brand equity like Toyota of Art Macapagal, it’s this brand equity that is your protection against predatory used-car price competitors.

In searching for a meaningful answer to your question on two or more unserved and underserved market segments to explore, you’re always better off by starting from a market segmentation model of sorts. One such meaningful model in your specific business relates to the car buyer’s “purchase system.”

You’ve heard us talk about this concept before. As applied to car buyers, “car purchase system” refers to all those products and services that car buyers also buy together with the car. There are at least two kinds: (1) products and services that most car buyers find necessary or absolutely necessary to have with the car; and (2) products and services that most car buyers find nice to have but not necessary when purchasing a car.

Necessary products

What quickly comes to mind as examples of the necessary and absolutely necessary products and services are emergency lights and tools for the frequent out-of-town, night driving car owners, and car insurance as service necessity. All other products and services, like signature car seat covers, carpets, mufflers, and other car cosmetics would fall under the nice-to-have-but-not-necessary category.

Focus your search on the necessary or absolutely necessary products and services. The frequent out-of-town, night-driving car owners are a market segment. These car buyers believe that when they buy their car, they simply must have those emergency lights and tools. This is a ready-to-buy market segment. And because the price of those emergency lights and tools is “just” a fraction of the price of the car, these are “ideal” customers to have. They’re price-insensitive.

The market segment for car insurance is much larger and car buyers’ price sensitivity is just as low if not lower. So this is a business-growing market segment for a car dealer business like yours to participate in.

We’re certain that you will now appreciate why the Ayalas, in acquiring the Honda dealership, also went into a joint venture with a non-life insurance company. We’re not saying this is the only reason for that joint venture, but it most certainly must have been a major consideration.

Segmentation models

You can find more market segment leads for business growing in the market segmentation models covered in the Senior MRx-er’s Segmenting book. It’s worth your while to reread the book. Incidentally, you can tell your business friends that the Segmenting book is now up and available on Amazon Kindle, if they have a Kindle, or iPad (just download the Kindle app, if they have an iPad, Blackberry or any Android tablet).

Keep your questions coming. Send them to us at MarketingRx@pldtDSL.net or drnedmarketingrx@gmail.com. God bless!


Follow Us


Follow us on Facebook Follow on Twitter Follow on Twitter


Recent Stories:

Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.

Tags: auto , Business , car dealership



Copyright © 2014, .
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City, Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94
Advertisement
Advertisement

News

  • Saudi Arabia reports 3 more deaths from MERS virus
  • Suspect in Vhong Navarro’s mauling wants to turn state witness – De Lima
  • Why are Americans obsessed with missing plane?
  • Napoles to have surgery on Tuesday – report
  • Mayor’s assassination linked to black sand mining controversy
  • Sports

  • PBA D-League: Waves edge skidding Superchargers
  • Ilad’s last-second basket lifts Gems over Bakers
  • Reigning champs Miami open playoffs with win
  • Spurs subdue Mavericks in playoff opener
  • Wawrinka beats Federer to win Monte Carlo Masters
  • Lifestyle

  • Miss America: Don’t suspend teen over prom invite
  • Transitions and resurrection in the performing arts
  • ‘Archaeology tour’ of Cebu’s heritage of faith
  • Historic Fort Bonifacio tunnel converted into a septic tank
  • ‘Imports’ from London, and play of the year
  • Entertainment

  • Arrest warrants out vs. Deniece Cornejo, Cedric Lee, et al over serious illegal detention
  • Lindsay Lohan says she had a miscarriage
  • Discovery network cancels Everest jump
  • ‘Captain America’ stays strong atop US box office
  • Easter musings
  • Business

  • Century Pacific Food sets IPO price at P13.75 per share
  • Oil prices down in quiet Asian trade
  • Asian shares mixed in holiday-thinned trade
  • BDO seen keen on bidding for Cocobank
  • Bataan freeport investment pledges up 1,302%
  • Technology

  • PH has slowest internet in Southeast Asia
  • Nintendo’s trailblazing Game Boy marks 25th anniversary
  • Nasa’s moon-orbiting robot crashes down
  • Netizens pay respects to Gabriel Garcia Marquez
  • Nokia recalls 30,000 chargers for Lumia 2520 tablet
  • Opinion

  • Gigi’s home
  • Palace stonewalls on MRT inquiry
  • Couple of things too
  • There is plenty of water behind Wawa Dam
  • Triduum thoughts of a young boy
  • Global Nation

  • Filipinos in Middle East urged not to panic amid MERS-CoV scare
  • Obama on mission to quiet Asia skeptics
  • Search for Etihad passengers launched
  • Japan presents $57-B ‘dream plan’ to solve Metro congestion
  • Tim Tebow’s charity hospital in Davao seen to open in 7 months
  • Marketplace