Do Suppliers Need Consumer Brands? - automobile parts suppliers - Brief Article

Automotive Industries,  March, 2000  by Maryann Keller

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In the Internet world, direct-to-consumer marketing will be essential for some auto suppliers. It's a great opportunity.

The automotive components and systems makers have long lived in obscurity to the general public. Few consumers have any clue as to who actually makes their vehicles' axles, doors, seats or wheel bearings. And for most suppliers, that's quite acceptable.

After all, their primary customer is the auto company, not the ultimate end user. Their marketing efforts emphasize their engineering, manufacturing and delivery capabilities and they have little need for the traditional gloss of consumer advertising. It wouldn't make much difference to most suppliers' bottom lines if they advertised their products and innovations to the public.

But them is a growing list of automotive products where more direct-to-consumer marketing will be essential, especially in a world where more customers are relying on the Internet to get information about the vehicles they want to buy. That opens up a great opportunity for suppliers.

Relying exclusively on the standard test-drives and a salesperson's explanation of a car or track isn't always an effective way to get the message out about a new product.

Once in a dealership, customers are guided toward models that are in stock or can be readily obtained. This is often a greater priority in the dealership than explaining the nuances of new technology, because that could lengthen the sales process.

As readers of this magazine know, automotive technologies have advanced far beyond power brakes and power steering. The future holds even more rapid advancement of electronic systems governing entertainment, communications and the driving character of the car. Since some companies serving the automotive OEM market also produce other consumer goods, they have a natural affinity for consumer marketing to boost demand. Traditional auto parts companies are going to have to do the same in some areas.

Meanwhile, if consumers are going to specify the higher-tech vehicles, they will require more contact from the suppliers who make the technologies -- just as they might demand a blue car over a red one, or four doom over two. The car selection process is lengthy, and buyers are prioritizing the features they want. If they don't understand how something works or don't perceive its value, they are largely indifferent to it.

For example, most customers don't understand why stability control systems or traction control are important, or how they should change their driving styles to gain the full benefit of the technologies. Antilock brakes never achieved their potential for reducing accidents, in part because drivers didn't understand how to apply them in an emergency stop. As a result, installation rates in the U.S. are still below their potential, though it finally appears that the educational efforts of brake suppliers have gotten the message out. Installation rates are rising.

Auto companies use technology to differentiate their vehicles. But they also let the marketplace decide if a feature should move from low installation rates to standard equipment. The process, even for exciting and valuable features, can take years. The electrochromic mirror is a good example.

There was a slow but steady progress toward its acceptance and installation. Some automakers saw it as an important safety feature and justified its higher cost in the price of their vehicles. Others took a wait-and-see attitude, letting customers ask for the feature. There must be a better way.

If consumers understand why a specific technology is valuable, they will favor vehicles that incorporate it. This applies to such items as navigation systems, collision avoidance systems, novel and high-profit entertainment units, airbags and even more conventional items like leather seats and optional airbags.

OE parts producers are going to have to approach consumers directly to ensure that their products are requested in the showroom or over the Internet. They can do this in collaboration with the automakers, but they are also going to have to do more of this for themselves. It's one way suppliers who want to can break out of obscurity.

Maryann Keller is president of auto services at Priceline.com.

COPYRIGHT 2000 Cahners Publishing Company
COPYRIGHT 2000 Gale Group