Marketing study examines what types of searches click for car buyers
When making important purchase decisions, consumers often consult multiple sources of information.
A new study from The University of Texas at Dallas examines how consumers allocated their time when searching offline and on the internet as they shopped for a new automobile, and what the outcomes were for price satisfaction.
Dr. Ashutosh Prasad and Dr. Brian Ratchford, marketing professors in the Naveen Jindal School of Management, recently published the study online in the Journal of Interactive Marketing. It will appear in the journal's November issue.
"Our data says that it's very common for a person to spend time searching online and offline prior to making a big purchase," said Ratchford, who holds the Charles and Nancy Davidson Chair in Marketing.
"The same information is available both places for the most part — whether it's a manufacturer's website or a brochure at the dealer. It's just a matter of which one a person is more comfortable accessing."
Over the long term, consumer searches have been moving online, Ratchford said. It's more convenient, and consumers can do more on the internet than before, such as take a virtual test drive or configure a vehicle according to their preferences.
By analyzing survey data on automobile purchases between 2002 and 2012, the researchers compared time spent on internet sources with time spent on offline sources, such as car dealerships.
Generally, those who search more online tend to spend more time with offline sources, the study found. In contrast, previous studies looked at the internet as a substitution for offline sources.
The analysis also revealed insights into buyer demographics and the impact of national brands, Prasad said.
Consumers older than 50 spend less time searching, both online and offline, before making a vehicle purchase, according to the study. Many people don't search at all. They merely buy the same type of automobile they already had.
"Men were more likely to search online comparison websites than women," Prasad said. "Married consumers spent more time at dealerships and were more likely to be satisfied with the price paid. The time spent at dealerships was significantly more for buyers of Korean brand cars versus U.S. brands. Knowing even minor differences in behavior can help fine-tune marketing campaigns."
Generally, longer search times were associated with higher price satisfaction — except for time spent at the dealer, the researchers found.
Ratchford said that finding is possibly related to the price negotiation process.
"We don't know exactly why, but chances are they're spending time trying to get a better deal, and they are getting frustrated," he said.
The study also found that time spent on manufacturer websites was less effective at generating price satisfaction, possibly because offline manufacturer and dealer sources, such as advertisements and brochures, perform similar functions. Dealer websites remain important because they list inventory and provide online price quotes, researchers said.
The study's results may have practical implications for manufacturers and dealers.
For example, the use of independent websites was associated with reduced time at the dealer. If dealers could identify those who obtain information online, they could save considerable demonstration time, lowering costs as a result.
Manufacturers also may want to rethink the content of their websites. According to the study, consumers who searched longer on manufacturer websites reduced their time on independent websites but increased their time on dealer websites. This suggests that more informative manufacturer websites can deter consumers from visiting comparison websites to get information.
Dr. Sungha Jang, assistant professor of marketing at Kansas State University, was a co-author of the study. He graduated from UT Dallas with a PhD in marketing in 2011.