E commerce and the auto business
Download
1 / 32

www.bucks.edu/~szathmar/CISC226/Bucks~County~College.ppt - PowerPoint PPT Presentation


  • 1264 Views
  • Uploaded on

E-Commerce and the Auto Business Dave Mauger Cars.com Manager Philly.com [email protected] Who am I? Cars.com Manager for Philly.com- Manager of a small sales team responsible for selling Cars.com products and Philly.com advertising to local auto dealers.

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'www.bucks.edu/~szathmar/CISC226/Bucks~County~College.ppt' - bernad


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
E commerce and the auto business l.jpg

E-Commerce and the Auto Business

Dave MaugerCars.com [email protected]


Who am i l.jpg
Who am I?

  • Cars.com Manager for Philly.com- Manager of a small sales team responsible for selling Cars.com products and Philly.com advertising to local auto dealers.

  • 5 years advertising sales and management experience with NAPCO, Gannett and KRI

  • Rutgers University SCILS graduate, 1995


Who do i work for l.jpg
Who do I work for?

  • Knight Ridder- Second largest newspaper publisher in the USA, owns the Inquirer, Daily News and KnightRidder.com

  • KnightRidder.com- Online subsidiary of KRI, publisher of 30 web sites including Philly.com

  • Philly.com- Web site of the Inquirer and Daily News, #1 web site in Greater Philadelphia


What is the relationship to cars com l.jpg
What is the relationship to Cars.com?

  • Classified Ventures- A Chicago based company that produces online classified products owned by 7 newspaper conglomerates, including Knight Ridder.

  • Cars.com- A web site produced by CV that provides an online marketplace for dealers and consumers to buy and sell cars, powered by newspaper advertising.


Overview of the auto business l.jpg
Overview of the Auto Business

  • Manufacturers sell cars to dealers

  • Dealers sell cars to customers

  • Cars are used until broken, stolen, sold or traded-in to a dealer

  • Dealer resells cars to other customers


The dealer customer relationship l.jpg
The Dealer–Customer relationship

  • Both want to buy low and sell high

  • Dealers have better information-complete and accurate pricing-manufacturer programs-dealer sales incentives

  • Dealers have more experience

  • Dealers usually win this negotiation


Inter media ries help customers negotiate with dealers l.jpg
Intermediaries help customers negotiate with Dealers

  • Friends and family

  • Advertising

  • Buying Services

  • Research Tools

  • Other Sellers


Inter media ries friends make recommendations l.jpg
Intermediaries- Friends make recommendations

  • Customer Loyalty- They will give me a great deal because I buy all my cars there.

  • Testimonial- I bought a car from them and it was great.

  • Personal Favors- Your cousin Joey works there, he’ll hook you up!


Inter media ries advertising informs customers l.jpg
Intermediaries- Advertising informs customers

  • Brand Advertising-“I’ve heard of them, they must be good.” -TV, Radio, Outdoor, Newspaper, Community, etc. enable dealer to promote their brand.

  • Special Offers-”That’s a great price for that car.”-Newspaper advertising gives the dealer space to promote special limited time offers based on stock #.


Inter media ries services negotiate for customers l.jpg
Intermediaries- Services negotiate for customers

  • Wholesale Clubs, Credit Unions, etc.

  • Negotiate a deal on behalf of their members or customers, usually a fixed amount or percent about invoice price

  • Dealers offer a lower sale price in return for a lower cost per sale

  • Customers get a good deal without negotiating


Inter media ries research tools level the field l.jpg
Intermediaries- Research Tools level the field

  • NADA, Kelly Blue Book, Edmund’s, etc.

  • Provide information on pricing, warranties, safety and reliability to customers for a fee.

  • Enables customers negotiate better deals on car purchases.


Inter media ries other sellers bypass the dealer l.jpg
Intermediaries- Other Sellers bypass the dealer

  • Public auto auctions

  • Private party sales

  • Not intermediaries offline, but online they are


The internet the ultimate inter media ry l.jpg
The Internet- the ultimate Intermediary

  • Friend and family recommendations

  • Advertising- Branding

  • Advertising- Special Offers

  • Buying Services

  • Research Tools

  • Other Sellers


The internet and recommendations l.jpg
The Internet and Recommendations

  • On the Internet, friend and family recommendations are supplemented with testimonials from other car buyers and advice columns from industry experts


The internet and brand advertising l.jpg
The Internet and Brand Advertising

  • Brand awareness is created with banner advertising, sponsorships, mentions and other links to the dealer’s web site


The internet and special offers l.jpg
The Internet and Special Offers

  • Special offers on specific pieces of inventory are made online through online marketplaces like Cars.com that post complete listings of dealer inventories.


The internet and buying services l.jpg
The Internet and Buying Services

  • Buying Services like carsdirect.com, priceline, and liquidprice.com negotiate deals for customers or ask dealers to bid on offers from customers

  • Dealers have rejected this model.


The internet and research tools l.jpg
The Internet and Research Tools

  • Research Tools like NADA, Kelly Blue Book and Edmunds are available online for free

  • These sites sell advertising to generate revenue


The internet and other sellers l.jpg
The Internet and Other Sellers

  • Other Sellers like online auctioneer EBAY offer auto auctions online

  • Private party sales are available through Cars.com and other sites.


The internet the ultimate intermediary l.jpg
The Internet-The Ultimate Intermediary

  • As a result, offline Auto business Intermediaries view the Internet as both a threat and an opportunity.

  • The defend and extend strategy lead to cross-category competition.

  • Competition is stiff.


History the internet and auto by tel l.jpg
History- The Internet and Auto By Tel

  • ABT started as a telephone based quote service

  • In 1995, ABT saw the Internet as an opportunity to provide a buying service and partnered with Edmunds

  • The ABT/Edmunds service provided research tools and initially guaranteed customers a deal $100 above invoice

  • ABT no longer acts as a buying service online

  • ABT is now a 3rd party lead provider

  • Dealers receive exclusive ABT territories for a fee


History the internet and aol l.jpg
History- The Internet and AOL

  • In 1994-95, the Internet was primary used for global and national level communications

  • AOL recognized that most purchases are made on a local level

  • AOL launched the Digital Cities Network, a network of web sites with local news, directories and other content

  • Today, Digital Cities is a powerful network of web sites offering viable advertising solutions to local business


History the internet and publishers l.jpg
History- The Internet and Publishers

  • Newspaper companies and other classified advertising companies recognized competition from AOL, Yahoo! and other networks of local sites

  • Newspapers tried individual online strategies but ultimately recognized that a national network was necessary to compete against buying services like ABT and advertising networks like Digital Cities

  • In 1998, CV launched Cars.com and Cox Media launched AutoTrader.com


History the internet and microsoft l.jpg
History- The Internet and Microsoft

  • As the owner of MSN (an ISP), MS Sidewalk (a network of local content web sites and a software developer, Microsoft determined that they were in the best position to compete in the e-commerce auto business.

  • Microsoft launched CarPoint, a 3rd party lead provider in 1998

  • Today Microsoft in focused on providing OEMs with the technology to sell direct


History the internet and venture capital l.jpg
History- The Internet and Venture Capital

  • In 1999, venture capitalists recognized the potential of the Internet to change the auto business

  • Priceline.com,CarsDirect.com, CarOrder.com and other services launched car buying services

  • Customers named their price and put a deposit down

  • Dealers participated on a cost per sale basis in these programs, bidding for the business of customers

  • The complexity of the auto sales process with trade-ins and options made matching buyers and sellers difficult


History the internet and manufacturers l.jpg
History- The Internet and Manufacturers

  • OEMs were slow to react to the Internet

  • A few early adopters like VW and Subaru established a uniform online strategy for their dealers and made special online only offers to customers

  • OEMs were reluctant to provide competitive data and were not considered a valuable objective resources

  • Today, OEMs are providing competitive data and the opportunity to build a car and find a dealer


The present internet losers l.jpg
The Present- Internet Losers

  • The shake-out has begun

  • Priceline is leaving the auto business

  • CarsDirect, CarOrder are reorganizing

  • ABT ($4 per share down from $60) and AutoWeb ($.50 per share down from about $56) are getting killed in the stock market.


The present internet winners l.jpg
The Present- Internet Winners

  • Services backed by strong offline companies have the best chance to succeed

  • CarPoint- Microsoft plans to help OEMs sell direct to consumers, starting with Ford.

  • AutoTrader- owned by Manheim Auctions and Cox Media. Focusing on used cars.

  • Cars.com- owned by newspaper giants. Focus on advertising and used cars.


The future the internet and manufacturers l.jpg
The FutureThe Internet and Manufacturers

  • Manufacturer web sites will take a primary role in new car sales

  • OEMs have the products and the most money to invest in marketing

  • OEMs own the dealer relationship

  • OEMs will advertise online


The future the internet and dealers l.jpg
The FutureThe Internet and Dealers

  • Dealers will use local web sites like Philly.com and Digital Cities to promote their brand and their own web sites, along with special offers on select new and used cars.


The future the internet and third parties l.jpg
The FutureThe Internet and Third Parties

  • Third party lead providerslike Cars.com will focus on used car leads and advertising opportunities for OEMs and dealers

  • Continuous marketing and better information will drive consumers to these sites.


Tips for negotiating with dealers l.jpg
Tips for negotiating with Dealers

  • Give yourself a lot of time- 90 days or more

  • Be flexible- establish a 1st, 2nd and 3rd choice based on your wants and needs

  • Research your choices on Cars.com- print price sheets and bring them with you to the dealership

  • Check the Inquirer for great deals/sales- read the fine print

  • Be willing to take your time and/or walk away

  • Ask if the dealer owns any cars for sale

  • Secure financing before you go

  • Buy in the dealership at the end of the month (or year)


ad