Customer Attitudes Towards and Perceptions of Telematics in Cars
R Sheldon, M Kidd, Accent Marketing & Research, UK
Business Background Telematics is an exciting, emerging technology within the automotive industry that encompasses the interactive exchange of information in-vehicle, either by voice or as data, over a wireless communications network.
Telematics offers such applications as emergency and roadside assistance, notification of air bag deployment, navigation aids, remote door unlock, vehicle security notification and stolen vehicle tracking services. More advanced systems can provide individually customised services such as travel information, voice mail and email facilities, news updates and entertainment features.
Although convinced of the enormous business potential of telematics, automotive manufacturers have been uncertain as to the precise content that end-users envisage, the service packages they most value and how much they are prepared to pay for the individual components of the telematics system.
And in the absence of real business case examples, some telematics projects have been cancelled ? as happened, for example, with the collaboration between Ford and software company Qualcomm.
It was in this context that Frost & Sullivan commissioned Accent Marketing & Research to conduct independent market research among customers in the new car market to establish customer preferences for the telematics product. The research was managed by Mark Kidd and directed by Rob Sheldon.
The main objective of the research was to establish customers? preferences for the individual features of the telematics system and their willingness to pay for the individual and combined components.
In addition, the research measured awareness and usage, customer opinions as to the quality of different offerings from different providers and their preferences for billing, position and display options.
The Research Accent developed a programme of stated preference surveys, which were conducted in October and November 2002 among customers who had purchased a new car within the previous two years. The surveys comprised computer-aided telephone interviews, each lasting about 30 minutes, and four hundred interviews were conducted, 100 each in the UK, France, Germany and Italy, using mother tongue speakers.
Due to the complexity of the concepts being explored, a detailed information pack was posted to each recruited respondent prior to the main interview being conducted. The pack also contained one of four sets of stated preference exercises to which the respondent could refer during the interview.
Segmentation was applied to the new cars, which were divided into four different price bands:
* ?12,000 to 17.999
* ?18,000 to 22,499
* ?22.500 to 26,999
The survey sought information on:
* frequency of driving on different types of roads
* awareness and use of different telematics features
* priorities of different telematics features through three stated preference exercises
* awareness and opinion of different service providers? telematics services
* billing and payment preferences of telematics services
* desirability of different telematics services
* usefulness of being able to source navigation directions to different types of points of interest
* respondent characteristics.
Stated Preference Exercises The first stated preference exercise looked at those issues concerned with road safety and comprised four different attributes. The second exercise focused on information and entertainment and comprised three attributes. Finally, the third exercise combined the first two and included a cost element.
For each of the three stated preference exercises respondents were presented with eight different paired choices, each pair comprising a different combination of levels - randomly produced - for the four attributes, and asked to say which they preferred in each case, even though they might not like either.
The analysis of the choices provided the data from which to establish the relative importance and the monetary value of each component of the telematics system. The stated preference analysis was undertaken using ALOGIT.
A report of the findings is being offered to automotive manufacturers to assist them in prioritising which features to include in their cars and how much their potential customers value them. Telematics has the potential to revolutionise road safety, vehicle security and journey planning.
Association for European Transport