An International Perspective on Automobile Advertising Imran Ali Keisha Mathews Bill McMillan Debbie Montgomery Irwan Salim
The Auto Industry • By 1908, international distribution for Ford was decided.
The Auto Industry • Ford gets 66% of its sales in the U.S. • U.S. auto companies' “foreign operations are not meaningful contributors to earnings.” (U.S. Business Reporter) • But about 1/3 of European sales are from Ford, GM, and DCX.
The Auto Industry • Biggest new markets: • China • India • Malaysia • Indonesia. • But incomes remain low in many parts of these countries.
The Auto Industry • Trends: • Higher consumer debt. • More leasing. • People keep cars 8.5 years. • Auto makers returning to core operations. • Increased regulation.
Economic Factors • Auto makers concentrate on where the money is: U.S., Germany, the U.K. • “Luxury” changes meaning in lower-income countries. • Fierce competition in developing countries. • Ads may play on national loyalty.
Economic Factors • U.S. and European companies are high-tech. • Foreign auto makers may have to buy tech from the West. • Leads to competitive disadvantage.
Infrastructure • Lack of highways and bridges may limit cars to local areas: China, India. • In very urban areas, few people have cars, even if high-income, e.g., Singapore.
Effects of Natural Resources and Environment • Fuel efficiency and Environmental Friendliness exploited in ads. • Target audience is the people who want to spend less on gas and save the environment. • In developing countries "Environmental Friendliness" does not work much. People are more concerned with "Fuel Efficiency".
Effects of Natural Resources and Environment • An alternate to Petrol, Compressed Natural Gas, CNG, which is a lot cheaper than Petrol was recently introduced in the South Asian countries. Pre-installed CNG feature in cars was used in car ads. • Concept cars running with natural resources other than petrol and diesel will affect the auto advertisements even more.
Effects of Natural Resources and Environment • The Smart CDI was Daimler Chrysler's first three-liter car (100 km on 3.4 liters of fuel / 68 miles per gallon) and the most economical mass-produced car in the world. • Organizations like Green Peace are working with the U.N. and Auto Makers to ensure environment is protected. Environmental friendliness of cars will be a key feature in ads in coming years.
Effects of Natural Resources and Environment • For the first time, DaimlerChrysler introduces a fuel cell car in the United States.
Cultural Factors • Why is culture an important consideration? • Creates a perceptual framework • Influences behavior/ purchase decisions • Important elements of culture for auto makers to address. • Language • Aesthetics • Attitudes and values
Cultural Factors • Regional Similarities/ Differences • North America (U.S. dominated) • Europe (German dominated) • Asia (Japanese dominated) • Importance of subcultures • Homogeneous vs. Heterogeneous societies
Government Legislation • Russia • Columbia • Italy
Self-Regulation • Advertising Associations • Public Review Boards • Roman Catholic Church