Monday, 20 October 2014
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Innovation is driven by the power of leadership, and the car in front is a BMW

Our research, conducted amongst 3,500 UK consumers across seven sectors including over 30 automotive brands, uncovers valuable insights for product and brand managers in the automotive sector which can help them understand what their brands need to do to get to the top.

In this article we will explore six of the key insights from the research.

 

1.     To succeed in the UK market automotive brands have to be seen as innovative

Unlike other sectors, where innovation primarily provides an opportunity to differentiate, in the automotive sector it is essential that consumers see your brand as innovative in order to have a right to play in the market. Over 70% of UK consumers claim it is a key purchase driver, making it a hygiene factor alongside great value for money, quality products and being a trusted brand, and considerably more important than being committed to the environment / sustainability (59%), recommended by experts (52%) or a premium brand (36%).

i3

The BMW i3 is an example of the German firm’s innovation strategy

 

2.     New technology is not enough, you have to inspire the consumer

Whilst a number of elements contribute to innovation perceptions, for automotive brands 61% of the perception is driven by leadership; more than any other sector. Put simply – manufacturers who are seen to lead the market are the ones likely to see greater sales.

So what is leadership? In the eyes of the car buyer innovative leaders are the brands first to market with the best new cars, which not only push the boundaries of technology but, crucially, use technological innovation to inspire the consumer with something genuinely new and different that offers a clear benefit.

 

3.     Great product features and inspiring communication are also essential

Two pillars need to support leadership to promote an innovative image i) relevant, easy to use features and services, and ii) great marketing that inspires consumers to find out more by communicating in new and different ways and generating buzz. These can be used to great effect; although Ford is not seen as a leader, being recognised for having great products supported by strong communications means it is the only US manufacturer to be recognised as an innovation leader by UK consumers.

 

4.     The German giants are overtaking the Japanese and US brands

Incite’s research produced a league table of the most innovative brands across seven sectors in the UK, including rankings within sector. Tracking the results over time we see that BMW has done a fantastic job, jumping seven places to the 20th most innovative brand overall, and number one in automotive. Meanwhile Honda has dropped ten places from 20th to 30th overall and is now 4th in automotive when it was once number 1. The full list of automotive brands featuring in the top 50 is below:

1.     BMW (20th overall)

2.     Ford (23rd)

3.     Audi (29th)

4.     Honda (30th)

5.     Toyota (31st)

6.     Mercedes Benz (34th)

 

5.     Honda teaches us that dreams are only powerful if they reach the consumer

The impact of Honda’s ‘Power of Dreams’ campaign has faded over time. Its leadership and communications are not seen as keeping pace with the leading German manufacturers in the eyes of the consumer.

While Honda is still recognised for pushing the boundaries of technology and science, the brand is failing to get great new ideas to market first or launch as many new and different products as its German competitors. BMW and Audi are leading the way - BMW with its ‘i’ range of electric cars and recently refreshed range, and Audi with its continued market expansion – from the entry level 1 series through to the Q and R series.

Furthermore, despite a legacy of great/innovative advertising, Honda is not the only one doing this nowadays. The German giants are actually doing just as well with consumers seeing them similarly in terms of communicating in new and different ways. Audi in particular is recognised for its online presence – from websites and social networks, to viral videos that remind us of what made the Honda ads of yester-year so great. Honda has lost one of its key points of differentiation.

 

6.     There is still all to play for

There is a glimmer of hope for the Japanese brands. BMW may be leading automotive today, but it is still 20th overall – there is plenty more room between it and the ceiling. It’s clear that the Japanese and American manufacturers need to work hard to regain lost ground, but if they can look beyond the factory floor and inspire the consumer they can lead again. If they can beat Tesla to it …


Readers' comments (7)

  • At the risk of being accused of 'party-pooping' is there anything really important in what this piece says. How for instance would a UK car manufacturer use this data to improve? Unfortunately it appears to me that once again our nation leads the world in reports, analysis, commentary, talk, discussion, review, pointing out weakness (with a barely hidden jeer, sneer, leer? - the list goes on) on Engineering related topics and not a single word of all this will advance our Nation's affairs by one penny piece.

    Big Bang shows for school children to learn about our profession- all highly laudable- BUT as long as the 'shams' are paid (and recognised in the meja!) at the obscene rates they are for manipulating man's laws to the benefit of the highest payer -unlike us who manipulate Nature's to the benefit and value of all...nothing can change. Why should it?
    Best
    Mike B

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  • Great article!

    In response to Mike's comment, I'm not sure the objective of the article was to provide advice to (e.g.) UK car manufacturers.

    That said, some of these insights might well be useful to such companies, as they outline trends in market success factors.

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  • Fellow bloggers might enjoy a recent letter to the Times:
    Dear Sir,
    * Big Bang Exhibition at NEC to encourage school children to study Science/Engineering and join the real wealth-creating economy[average salary for graduates £34,000 pa]
    * Bloody Sunday inquiry cost £119 million and took 12 years [whatever happened to its value Engineering and efficiency]
    * QC is to be paid ( at a reduced rate?) of £3,000 per hour to find out if Libor rates were 'fixed' by Bank of England Staff in cahoots with other banks?
    * Defense Barristers and solicitors on strike for more pay? [apparently trying to correct or cover-up the prosecuting lawyers errors is worth more that £68,000 pa ie X2 of normal Engineers salaries

    Four recent articles in the Times:
    just who is trying to pull the wool over who's eyes?
    As long as this legal 'free-for-all' goes unchallenged, who should any youngster (guided by their parents, school or whatever) wish to be any part of the real economy.

    Wake me up when sanity returns, if it ever does or will
    Mike Blamey

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  • Hi Mike,

    Thank you for sharing your thoughts. This is a valid and important question – how can the manufacturing industry use this data to advance? I think my recommendations would change depending on the manufacturer I was talking to, which is why the article is designed to share industry insights rather than specific recommendations. That said, I have put a couple of top-level thoughts below.

    Overall - I think it is very encouraging to see that consumers really do care about innovation, and so the efforts of the engineer are valued. However, given the feedback we get from consumers, the trick is delivering new technologies in a way that the wider population can comprehend and engage with. With that in mind I think there are three actions that manufacturers could take as a result of the data shared:


    1. Establish a clear goal for any new innovation – take the time to speak to people and understand what we need to develop in order to inspire them and enhance their lives. Only then can we lead the world with impactful innovation. The C5 was way ahead of its time in some regards, but a top speed of 15 mph and overheating when going uphill meant it was doomed to fail from the start – it didn’t solve a problem effectively.

    2. Keep the end user in mind throughout product development – make sure any new technology is easy for them to use. Simplicity is key. Some of the greatest innovations don’t actually bring any new functionality to the table, they just make is accessible to the masses. The iPhone vs. Windows Mobile is a great example of this, or maybe iDrive vs. CarPlay!

    3. Take the time to understand how to communicate new products effectively – develop easy to understand messages that clearly highlight the benefits of our engineering efforts to them. Audi took on the Italian and German supercars by driving a red R8 through Maranello and putting a V10 at full throttle on a dyno, not by explaining how it’s Quattro system works or how it’s V10 engines were more powerful than Porsches V6 engines.


    I hope you find this interesting and please do let me know your thoughts …

    JT

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  • Mike - Good post. Really highlights some big issues. One point, the average graduate engineer salary is £24k. £34k is more than many senior engineers make! A shocking statistic on its own.

    My own view on innovation from car companies. It is a way of differentiating their products and I think their customers really appreciate it. I also believe marketing plays a big part of this.

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  • Dear JT,
    I must confess to being a 'bit' far-out in my comment(s) Be assured that having taught marketing to Engineering/Textile students at several universities I endorse what you say. My concern as always is that the message is not getting through to the right (even the Left!) elements of our society: and particularly to those at the summit.

    I am not sure who's comment it is, but "if the marketing is good, the sales department can be reduced to a single girl at the switchboard with a pad & pencil" and I believe we all recognise what is being suggested.

    In the 70s (I am that old!) I did some consultancy for the World Bank in Washington [1818 H st!) They had a raft of economists advising that the way to improve the economies of developing nations was 'to increase the production of textiles and take-up of fabric and garments. They wanted to increase the 'average' annual personal usage of textiles in the Third World -from about 5 metres squared to 8...by offering loans and expertise to install and operate the full range of textile processes locally.

    I asked a simple question of a very senior economist: "when did you (or your partner) personally buy some underpants because you had not bought enough this year already!" Collapse of stout party!

    We buy clothing (and just about everything else) because we want it, not because we need it! And it is the creation of that demand within an individual person -aspirational, personal, social, even a bit of keeping up with the Jones's that does this. In 1970 I spent 6 weeks in Kursk, USSR doing technical service on textile machinery (supplied by my US employer) The Soviet authorities had decided (as it was the 100th anniversary of Lenin's birth) that they would flood the shops with clothing to show that they could supply the 'needs' of the average citizen. They too failed to differentiate between needs and wants.

    I used to use the analogy (or is it a simile, I am but a simple Engineer) that if someone really WANTS a Rolls Royce they will somehow find a means of paying for it! And surely the same applies to all consumer related products.

    Best wishes
    Mike B

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  • Hi Mike,

    Thanks for your reply.

    My hope is that the insights presented here are useful to the relevant decision makers, and that some of them may read this piece.

    The automotive industry is evolving rapidly. In part due to natural competition but also due to increasing pressures from external forces - primarily depleting natural resources. In such an environment we will see peoples' wants and needs evolve rapidly as well.

    Hopefully keeping track of public opinion can help to guide the automotive industry in the right direction - driving blind will get us nowhere.

    Best regards
    JT

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