Realising opportunities in the premium automotive market via context-oriented new product positioning

Abstract

The increasing variety of car concepts is a key characteristic of today's passenger car markets. Particularly in the premium segment with higher revenue opportunities, competition intensity is rising continuously. Numerous traditional car concepts, as well as new body styles, explicitly address heterogeneous premium customers' expectations. The build-up of body styles, exterior designs, and engine types result in a loss of traditional basing points for new car categorisation. Therefore, new car positioning is no longer the sheer outcome of technical data. Instead, it turns out to be a key issue of successful product management and a trigger of customers' purchasing decisions. Against this background, we investigated two positioning alternatives – ‘high’ versus ‘premium’ – by means of a large-scale customer base generated from an innovative car clinic set-up. The paper illustrates the effects of alternative positioning strategies and corresponding context effects on the willingness to pay, design perception, and purchase intention. The derived revenue mark-ups prove adequate product positioning as a relevant factor for revenue optimisation.

Keywords:

• new product positioning
• reference effects
• context effects
• automotive industry
• car clinics

Notes

¹The discrimination of ‘premium’ and ‘high’ products can also be adapted to other product categories like clothes and spirits, where (brand) reputation plays a major role. In a fashion positioning context, Bruce and Kratz (2007) even distinguish three top market segments, namely ‘accessible luxury’, ‘middle luxury’, and ‘inaccessible luxury’.

²This process of getting familiar with the design of the cars on display is essential for measuring emotional reactions (Desmet, Overbeeke, & Tax, 2001) as they underlie our research question.