Autotrader Case Study Analysis

AutoTrader: How Research Separates Fact From Fiction Marketing 6080 Fall 2015: Case Study Analysis #2

Jasmine Henry

Table of Contents Introduction ............................................................. 3 General Analysis...................................................... 3 Question #1: What are the objectives of AutoTrader.com’s marketing research? How have its research projects contributed to the firm’s ability to meet these objectives? ............... 4 Question #2: What methods has Autotrader.com used to collect data about the effective-ness of dealer advertisements displayed on its site?............................................... 6 Conclusion ............................................................... 7 References ............................................................... 8

Autotrader: How Research Separates Facts From Fiction Marketing 6080 Fall 2015: Case Study Analysis #2

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Introduction Introduction Autotrader is an online automobile marketplace for sellers and buyers. Their website enables car dealers and private owners to advertise new, used, and certified pre-owned vehicles. Additionally, the company provides reviews and comparison tools for consumers as well as marketing data for sellers.

History & Background of Autotrader o

Founded in 1997

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Headquartered in Atlanta, Georgia

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Owned by Cox Enterprises

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Owns Kelley Blue Book

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Led by Sanford Schwartz Autotrader. (2015). History of AutoTrader.com - Autotrader Careers. Retrieved from https://careers.autotrader.com/who-is/history-of-autotrader.html

Main Objective This case study analysis aims to: o

Identify Autotrader’s marketing research objectives

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Reveal how Autotrader’s research projects meet its objectives

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Explain Autotrader’s data collection methods

General Analysis General Summary of Case Study Autotrader convinces car dealers, associations, and manufacturers to purchase advertising on its website by providing them with marketing research data. Autotrader’s marketing research provides sellers with quantitative and qualitative data that predicts consumer behavior and trends. By providing hard data, Autotrader aims to convince car dealers that their advertising dollars will be well spent.

Autotrader: How Research Separates Facts From Fiction Marketing 6080 Fall 2015: Case Study Analysis #2

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Main Ideas to Consider o o o o o

Autotrader’s direct and indirect marketing research methods The consumers’ car buying process and habits The dealers’ beliefs and involvement in the car buying process The internet’s role in the car buying process The connection between advertising and final purchase decisions

Question #1: What are the objectives of AutoTrader.com’s marketing research? How have its research projects contributed to the firm’s ability to meet these objectives? Objectives of Autotrader’s marketing research To provide car dealerships and manufacturers with data that reveals: o o o

How consumers shop for cars How Autotrader can deliver consumers to sellers The value of the Internet for selling vehicles

To connect advertising on its site to dealership visits by: o o

Using surveys to analyze consumers’ behavior Gathering information from consumers who have left dealerships

To convince car dealerships to purchase advertising on Autotrader by: o o

Ensuring their money will be spent wisely Ensuring their sales are likely to increase

How they’ve met their goals By providing hard data collected directly from dealers & consumers that shows: o o o o o

The internet is the most influential source behind consumers’ car purchasing decisions Consumers consider the internet the most helpful source of information available Buyers spend half their shopping time online Sites like Autotrader are used more frequently than dealers and manufacturers The internet plays a significant role in increasing walk-in traffic

By launching hundreds of mini-research studies including

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Pros of Autotrader’s marketing research o o o o

Debunks common assumptions held by car dealerships about effective advertising Helps convince car dealerships and manufacturers to advertise on its site Reveals what influences consumers to make vehicle purchasing decisions Reveals how much time and what mediums consumer use to make purchasing decisions

Cons of Autotrader’s marketing research o o o

Requires a fully dedicated team of marketing researchers Marketing research often requires extra resources, time, and finances Dealerships may leave after collecting data without purchasing advertising

Alternative Solution Autotrader can look into expanding into a full-fledged auto-marketing research company. While it is useful for convincing car dealerships and manufacturers to purchase advertising, any other online car listing site can offer the same services Autotrader currently provides. If Autotrader considers expanding, it can become a go to auto-market research company as well as an advertising site.

Conclusion Autotrader’s marketing research projects have provided car dealerships and manufacturers with the assurance that their advertising dollars will not go to waste. By collecting and analyzing data on consumer vehicle purchasing experiences, Autotrader has been able to provide insight as to how and why consumers make certain buying decisions. Additionally, Autotrader’s research has revealed the importance of the internet in educating consumers and encouraging them to visit certain dealerships. In the end, Autotrader’s marketing research gives the company a significant advantage over free posting sites such as Craigslist.

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Question #2: What methods has Autotrader.com used to collect data about the effectiveness of dealer advertisements displayed on its site? Methods used to collect data Direct & Indirect methods including:

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Surveys to determine what dealers believe about their customer’s behavior Phone interviews with car buyers Behavior observation Analyzing purchasing patterns of customers Online questionnaires

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Information is coming directly from the source; the customer & dealers A mixed variety of metrics and research instruments are used New data is consistently collected and analyzed

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Cannot draw direct correlations between advertising and specific purchases Surveys may only represent a small percentage of the car buying population Dealers’ beliefs on customers’ behavior may not be accurate Information may not be valid at particular car dealerships

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Pros

Cons o o o

Alternative Solution Focus groups can also be used to collect qualitative data on the car buying process. Using a focus group may result in a more diverse group of participants.

Conclusion Autotrader uses direct and indirect methods to analyze the effectiveness of advertisements displayed on its website. While it is difficult to connect advertisements to specific purchasing decisions, Autotrader’s mixed method data collection approach provides a more accurate representation of the consumer buying process.

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Conclusion Summary Autotrader’s marketing research provides car sellers with the assurance that their advertising dollars are not going to waste. Autotrader has the ability to show car sellers how consumers shop and the importance the Internet plays in their decisions. By using a mixture of qualitative and quantitative research methods, Autotrader is able to provide dealers with hard data that determines the effectiveness of their advertisements.

Pros o o o o o

Convinces car sellers to purchase advertising on their website Uses purchasing data from their website in marketing research Has a continuously growing collection of indirect and direct consumer data Has an extensive collection of listings from dealers and private sellers Handles over four million qualified customers every month

Cons o o o o o

Requires an extensive amount of research and data collection Other companies can provide the same services in the future It is not possible to accurately predict customer behavior Research findings may not be consistent among all dealers and consumers There are still skeptics who are not convinced by Autotrader’s data

Warning Autotrader must monitor the online car selling market for competition. Free listing websites like Craiglists already exist and may threaten Autotrader’s position in the future. Autotrader must also stay on top of the newest trends in car manufacturing and technology. If automobiles end up becoming obsolete in the future, Autotrader would also be ineffective.

Recommendations Autotrader should look into expanding into a full-fledged marketing research company for car sellers. Instead of just having a research team or department it could develop its own independent institution and run more efficient and effective operations. Autotrader could set the industry standards for research in this field and continue to grow as a resource for car sellers all over the world. Autotrader: How Research Separates Facts From Fiction Marketing 6080 Fall 2015: Case Study Analysis #2

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Autotrader should also look into expanding into other forms of motor vehicles such as motorcycles. Autotrader can provide the same kind of market research for motorcycle sellers and buyers and expand its offerings.

References Autotrader. (2015). History of AutoTrader.com - Autotrader Careers. Retrieved from https://careers.autotrader.com/who-is/history-of-autotrader.html Grewal, D., & Levy, M. (2010). Marketing. New York, New York: McGraw-Hill Education.

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