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Inside the Shop…… Customer Sales Identify and evaluate products Resell Identify sellers Stay informed Customize Service Negotiate Finance Drive Purchase Repair Insure Isn’t it very troublesome to go through sooooooooo many processes???!!!!???!!! NOW ……… .

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slide3

Inside the Shop……

Customer

Sales

Group JCAIS, HKUST

slide4

Identify and

evaluate

products

Resell

Identify

sellers

Stay informed

Customize

Service

Negotiate

Finance

Drive

Purchase

Repair

Insure

Isn’t it very troublesome to go through sooooooooo many processes???!!!!???!!!

Group JCAIS, HKUST

slide5
NOW……….
  • We can slim up the all the procedures by only visiting…..

Group JCAIS, HKUST

slide12

Autobytel.com Case Study

Annie Lam

Janet Liu

Cherry Sun

Irit Zhang

Simon Zheng

Group JCAIS, HKUST

agenda
Agenda
  • Company Background
  • Autobytel.com ‘s features
  • Problems and solutions
  • Theory
  • Sources of Revenues
  • Updates: Autobytel.com TODAY
  • Suggestions to Autobytel.com
  • Q&A

Group JCAIS, HKUST

company background
Company Background:
  • Founded by Pete Ellis
  • Initially owned 16 dealerships in California and Arizona
  • 1980s business was in upside
  • 1990s hit by the recession, went bankrupt
  • 1995, Auto-By-Tel Corporations was off and running
  • 1998, name changed to autobytel.com
  • Business has been running well since then until now

Group JCAIS, HKUST

autobytel com as in infomediary

Peripheral Processes

Peripheral Processes

Peripheral Processes

Alternative Brands

InsuranceFinance

Content...

CoreCompetence

CoreCompetence

CoreCompetence

Supplier

Supplier

Peripheral Processes

OutsourcedService

OutsourcedService

Outsourced

Outsourced

CoreCompetence

Service

Service

Service

Service

Buy

Drive

Autobytel.com as in Infomediary

Generating Leads

Dealer

Customers

Dealer

OrderFulfillment

OEM

Group JCAIS, HKUST

benefits for customers
Benefits for Customers:
  • Keep Customers totally informed
  • Offer haggle-free low prices
  • Variety of choices in shopping for vehicles
  • Provide specific vehicle-related decisions
  • Comprehensive service range, like Financing, Insurance and Warranty…
  • Online shopping minimizes transportation and other related costs

Group JCAIS, HKUST

slide17
Problems and Solutions
  • Theory

Group JCAIS, HKUST

Group JCAIS, HKUST

as a internet company
As a Internet Company
  • Six years compare with Nasdaq(like technology and internet) in stock market

Group JCAIS, HKUST

competition
Competition
  • Auto Vantage
  • Microsoft’s CarPoint
  • Auto Connect
  • CarsDirect.com
  • Manufacturer and Dealer Sites

Group JCAIS, HKUST

competition20
Competition
  • Just low price is not enough.
  • To face the rapidly changing market, there is no time to reflect.
  • Advertising should be traditional media plus modern media.

Group JCAIS, HKUST

problems and solutions
Problems and Solutions
  • Loyalty
    • Dealer
      • Autobytel gave each dealer an exclusive geographic territory power using Autobytel system, which was always larger than the territory assignment by manufacturer.
      • Autobytel guarantee a large enough volume of quality purchase requests for dealer to reduce their cost.
    • Customer
      • Loyalty program: rewards, points accumulation and discount based on track record

Group JCAIS, HKUST

problems and solutions22
Problems and Solutions
  • How to arrange customers to dealers
    • Separate subscription fee
      • Dealer’s subscription fee based on a number of factors, including the location of dealership, the type of franchise (likes BMW vs. Benz), internet penetration in the area.
    • Sign-up fee
      • Dealer also need to pay sigh-up fee based on per car brand when they join Autobytel.

Group JCAIS, HKUST

two sided market
Two-sided Market
  • Car dealer

Dealer was charged $500--$7500 US dollars monthly.

  • Car buyer

Consumer paid nothing for the services.

  • Existence of Car dealer
    • Most state franchise laws made it impossible to cut the dealer out of new car buying process.
    • Autobytel.com make the contact with the dealer effective and pleasant.

Group JCAIS, HKUST

traditional problem
Traditional Problem
  • Asymmetric Information
    • Higher margin
    • Moral hazard
    • Transaction cost
  • Lemon Market
    • Pre-owned Car

Group JCAIS, HKUST

information searching services
Information Searching Services
  • Symmetric information to build trust
  • Intermedia platform for matching
  • All you want to know
    • Even for how to drive…
  • Once information were publicized, the best way is to join Autobytel at the first time.

Group JCAIS, HKUST

dealer
Dealer
  • Requirement for being an accredited Autobytel.com dealer
    • Sign agreement to provide prompt responses to customers, no-haggle pricing, and full disclosure regarding vehicle availability, add-ons, and related matters.
    • Meet a variety of criteria like customers satisfaction metrics and sufficient inventory.
    • Go through the extensive training at Autobytel University.

Group JCAIS, HKUST

customer
Customer
  • Warranties for Customers
    • Manufacturer’s warranty
      • Price
      • Free from defects – any necessary repair at no charge
      • Three years or 36,000 miles
    • Pre-owned car
      • Translatable warranty
      • Buyer's Guide Sticker

Group JCAIS, HKUST

marketing strategy

Marketing Strategy

Group JCAIS, HKUST

Group JCAIS, HKUST

income statement
Income Statement

Group JCAIS, HKUST

sources of revenue
Sources of Revenue
  • 1. Lead Fee (US$ 21.5m)
  • 2. Advertising (US$ 3.4m)
  • 3. CRM Service (AVV) (US$ 5.3m)
  • 4. Data & Application (US $1.5m)

Group JCAIS, HKUST

latest financial data jul 2004
Latest Financial Data (Jul 2004)
  • Revenue US$31.5m (45% inc y-o-y)
  • 2 acquisitions (iDriveonline & Car.com)
  • Net Income US$1.3m (13% y-o-y inc)

Group JCAIS, HKUST

latest financial data jul 200432
Latest Financial Data (Jul 2004)
  • Total Purchase Request 1.2m (45% sequential increase) (139,000 Financial Request)
  • Dealer closing ratio : 18%
  • Dealers: 35,800

Group JCAIS, HKUST

branding
Branding
  • #1 in automotive e-brand in mid-99
  • #7 most recognized e-brand in US
  • Building Brand awareness
  • Driving traffic to website

Group JCAIS, HKUST

brand awareness
Brand awareness
  • Co-op with Yahoo!, Excite, Infoseek, Netscape & Lycos (many of them are EXCLUSIVE!)
  • Provide engine for the automotive information service like Edmunds.com, Kelly Blue book & IntelliChoice.com
  • Spent US$3.7m on Internet marketing & advertising

Group JCAIS, HKUST

traditional advertising
Traditional advertising
  • Ad in Computer & hobbyist magazines
  • Ad in Major automotive magazines
  • TV Ads (CNN, CNET, NBC, MSNBC)
  • FIRST Internet Co appear in SUPER BOWL in 97 & 98

Group JCAIS, HKUST

today
Today…
  • Most visited new vehicle buying & research destination (03 & 04)
  • 76th most visited property on the internet (3Q 2004)
  • 8.2m average monthly unique visitors
  • #1 Ward’s Dealer Business e-Dealer 100 report (2004)
  • Web Control as #1 independent customer management tool

Group JCAIS, HKUST

autobytel worldwide
Autobytel Worldwide
  • UK (1998)
  • Sweden (1998)
  • Japan (1999)
  • Europe (2000)
  • Netherlands (2001)

Group JCAIS, HKUST

more than auto by tel
More than Auto-by-tel?
  • AVV, Inc. (Dealership Mgt System)
  • AIC (Online automotive information & content provider)
  • Autoweb.com (research-driven buyers)
  • Autosite.com (entry level buyers)
  • Carsmart.com
  • Car.com

Group JCAIS, HKUST

autobyteldirect
AutobytelDirect
  • Integrated Multimedia Marketing Tools
  • Allow marketers to search active customers

Group JCAIS, HKUST

what s next
What’s next?
  • Enter Chinese Market?
    • Soaring Car Sales (Car sale grow at an annual rate of more than 10%, accounted for 15% of global growth in the next 5 years)
    • Lack of high quality service
    • Under developed after-sales sector

Group JCAIS, HKUST

conclusion
Conclusion
  • Profit shows that Auto-by-tel is moving to a good direction
  • Making use of its own advantage to generate more revenue
  • Must plan ahead

Group JCAIS, HKUST

slide42

Q & A

Please feel free to raise questions.

Group JCAIS, HKUST

questions
Questions
  • What’s the value of Autobytel.com to Customers??
  • What is the key elements that contributes to the success of Autobytel.com? Explain.

Group JCAIS, HKUST