CDK's purchase of Auto/Mate may create a major disruption in the dealer management system (DMS) industry. Here is our take. DOWNLOAD
The Four Hidden, Magical SECRETS to Automotive Marketing
Product: Pretty simple, what cars you choose to sell
Price: How you price those cars
Place: Where you locate your dealership
Promotion: How you talk about your cars, how you promote them and how you sell them.
If all this looks familiar, it should; The Four P’s of Marketing have been around for 50 years in print (and was discussed in some college classrooms for about a decade before that). Some have argued recently that 3 more P’s should be added; People, Process, and Physical Evidence. It’s hard to argue that the added 3 P’s aren’t vital to car sales, but I do like the simplicity of the original Four.
Let’s start with some obvious limitations.
If you are a franchise dealer, you have little control of what new cars you stock. The Product decision was made years ago in most cases. But you have a choice when it comes to used cars. Your franchise will certainly influence your used car stocking decisions, but it no longer has to control them. The Internet has become the consumers’ tool of choice for locating a car they want, and if you have that car, they will find you. Make no mistake; the cars you choose to stock are a basic marketing decision.
When it comes to Price, most successful dealers today find that the old Cost-Plus model no longer works. The Internet is the reason, pure and simple. Informed people won’t overpay – and today’s customer has an abundance of information at their fingertips. The days of making a mistake by overpaying for a car and then passing that mistake on to the consumer are behind us. I would add that buying a car with only wholesale information is also a mistake; today you need to know how you will retail your way out of a car. You need to know the retail side of the equation at acquisition, not just the wholesale side.
Place is another decision that was made years ago. The good news is the Internet has made your physical location much less relevant today.
For many automotive marketers, Promotion is their total focus. I’ll submit to you this is a mistake. If you don’t have a car the customer wants, at a price they are willing to pay, no amount of advertising or promotion will help you much. You can have multiple Inflatable Gorillas on the roof and an army of Wavy Arm Guys at every entrance and you will still struggle to get traffic. Today’s customer shops online and buys in person. The fundamental rule of promoting cars today – especially pre-owned cars – is getting the right car, at the right price with great pictures and compelling comments in front of as many prospects as possible.
If all this 50 year old Four P talk sounds Old School it is and it isn’t. The Four P’s haven’t changed, but the market has. The most progressive dealers in the country are applying these fundamentals to new reality and changing the way they are selling cars. Go back to the blackboard (OK, the whiteboard, or maybe your iPad) and take a hard look at how the Four P’s apply to today’s market. And keep in mind, the Internet isn’t your enemy, it’s your friend - don't fight it!