INTEGRATED CASE Auto Concepts Recall back in Case 1.2 that Nick Thomas, CEO of Auto prefer? Radio genres? Magazine types? Sections of local Concepts, a new division of a large automobile manu- newspapers? Also, the marketing department has moved to facturer, has been slowly losing market share to other spending large sums of the budget on online promotions. competitors. Auto Concepts was created to reclaim the Nick wants to know which market segments he can reach manufacturer's highly competitive level in the auto indus- through blogs, content communities such as YouTube, try by developing new models that are more competitive in social network sites such as Facebook, and online games today's new car market. and virtual worlds. Auto Concepts now has five different models that are Knowing that consumers like a particular medium is feasible in terms of engineering and production. Nick has not enough. For example, Nick may learn that the target assigned tentative model names to them. market for a particular model prefers one magazine type over another, but there are many choices of magazines 1. Super Cycle," one-seat all electric, mpg-e rating 125; within that type. Knowledge of the demographic profiles estimated MSRP (manufacturer's suggested retail of the target market segments can be helpful in selecting price) $30,000; range 200 miles. one newspaper, one magazine, or one social medium for 2. "Runabout Sport," two-seat all electric, mpg-e 99; esti- a selected market. Because all media provide information mated MSRP $35,000; range 150 miles. to potential advertisers on the demographics they reach, 3. Runabout Hatchback," two-seat gasoline hybrid, Auto Concepts should have a demographic profile of each mpg-e 50; runs on battery for 50 miles and then market segment it attempts to target. To make the most switches to gas engine; estimated MSRP $35,000; of that information, the carmaker needs information on range 250 miles. the demographics of those who most desire each model: 4. Economy Hybrid," four-seat diesel hybrid, mpg-e 75; gender, age, size of hometown or city, marital status, runs on battery for 75 miles and then switches to effi- cient diesel engine; estimated MSRP $38,000; range number of people in family, education, income, and dwelling type. 300 miles. In terms of positioning the cars, Nick knows fuel 5. "Economy Standard," five-seat economy standard gaso- line, mpg 36; runs on gasoline with computer control economy will be the key motivator. In addition, he wants for maximum efficiency; estimated MSRP $37,000; to know if appealing to consumers' concerns for global warming will have an impact on sales. Auto Concepts is range 350 miles. making a major effort to reduce carbon emissions by mov- Note: mpg-e is a measure of the average distance trav- ing to more efficient propulsion systems; should that effort eled per unit of energy used. It is the U.S. Environmental be a prominent part of its positioning statement in promo- Protection Agency's measure of efficiency when alternative tions and, if so, for which models? Nick gets a lot of mixed fuels (e.g., electricity) are used. It allows for a comparison information in the general information environment about of new energy propulsion with the fuel efficiency. global warming. He wants to know what consumers think Nick knows no single model will have universal appeal about two issues: (1) Are consumers worried about global to a huge market. Rather, different models will appeal to warming? (2) Do they believe gasoline emissions contrib- market segments, and Auto Concepts will be sharing those ute to global warming? segments with other able competitors that are working just Finally, there is the Internet of Things factor: What in- as hard to develop car models that satisfy consumer needs novations do consumers expect and desire on their autos in those segments. In other words, Auto Concepts wants of the future? Do they wish for self- and/or assisted driv- to reach target markets for the models it produces without ing, types of infotainment, dashboard diagnostic features, wasting promotional dollars on those who aren't interested or other smartphone driving aids? in the model. For example, if the company decides to pro- Assume that Nick Thomas decides to conduct market- duce a particular model, a decision must be made in terms ing research and that the marketing researcher agrees with of choosing among media types (TV, radio, magazine, the problems stated in this case. newspaper, social media) in which to promote the product. 1. State the problems. Nick would like to know each market segment's media hab- 2. Write the research objective for each problem its. Which TV show types do most people in each market defined in your answer to the first