Marketing Strategies for Autonomous Vehicles in Australia

This report provides a comprehensive analysis of the autonomous vehicle market in Australia, focusing on highly automated and fully automated vehicles. It examines market size, trends, and the competitive landscape, highlighting key players like Volkswagen, Tesla, Toyota, Hyundai, and Apple. The r...Read More

Autonomous vehicle
Table of Contents
Introduction.................................................................................................................................................2
Market.........................................................................................................................................................2

Competitors.................................................................................................................................................2
Product positioning......................................................................................................................................3
Target market segmentation........................................................................................................................4
Decision-making process, involvement, and perceived risk........................................................................5
Internal influences.......................................................................................................................................6
External influences......................................................................................................................................6
Marketing strategy.......................................................................................................................................7
Conclusion...................................................................................................................................................9
References.................................................................................................................................................10
1 | P a g e

Introduction
The purpose of this paper is to focus on the concept of highly automated and fully automated
vehicles and their impacts on the market of Australia. It will also review the influences of
consumer behavior on the promotion of these vehicles. Furthermore, this paper will discuss the
market size and market trends of Australia’s automotive market along with the product
positioning of these vehicles. Moreover, it will also explain the target market of the company and
how the company can market their products more efficiently to the targeted consumer of the
company.
Market
The market of highly automated and fully automated vehicles is growing at an exponential rate.
The market size of highly autonomous vehicles is slightly larger than the fully autonomous
vehicles. It is estimated that 30% of the vehicles sold in the next ten years will be autonomous
cars. The market share of Volkswagen will increase to a considerable level in the next five
years. Volkswagen will introduce self-driving car named Sedric on an international scale within
the next few years (En.volkswagen.com, 2018). Reduced energy consumption, increased lane
capacity, and real-time information is the three benefits that would drive the autonomous vehicle
market of Australia. Product lifecycle is defined as the sequence of steps from the introduction to
its decline. In the introductory phase, Volkswagen will promote the products offerings and
explain the uniqueness of their autonomous cars. In the growth phase, the company will try to
build their revenue by appealing to the wider audience of the country. In this stage, these self-
driving cars will be more popular. In the maturity phase, consumers will be interested in
purchasing these cars, thus neither resulting in decline or growth (Sun et al., 2017). As more
developed products will be available in the market, the market size of this cars will gradually
decrease.
Competitors
The top competitors of Volkswagen in Australia are Tesla, Toyota, and Hyundai. These
companies are the primary competitors of Volkswagen. Apple is one of the secondary
competitors of Volkswagen in the market for self-driving cars. Their analysis is given below:
2 | P a g e

Tesla
An American multinational corporation which has reputation for developing electric vehicles and
other futuristic vehicles including self-driving cars. This company is founded in 2003, and they
are considered to be one of the competitors of Volkswagen regarding self-driving cars (Hillier et
al., 2015). They have earned number 12 position in the market in terms of self-driving cars.
Toyota
It is a Japanese company founded in 1937, which manufactures cars with the name of the brand
Toyota. It owns some share in Subaru Corporation and other industries. It is one of the strongest
competition of Volkswagen in terms of self-driving cars. Toyota has enough resources to
develop these cars giving them a competitive advantage over the other companies.
Hyundai
Hyundai is a South Korean vehicle company established in 1967 and it is headquartered in Seoul,
South Korea. Aslan, Eon, Elantra, and Azera are some of the brands produced and sold all over
the world. They have decided to develop self-driving cars by the end of 2030. They are
considered to be one of the strongest competitors of Volkswagen in terms of level 5 autonomous
cars. Various research academies have identified that Hyundai is the tenth company in the
market to develop these cars.
Apple
Apple Inc. has been planning to develop self-driving cars for quite some time. They intend to
develop highly automated and fully automated self-driving cars within the next few years. They
have the resources to develop these cars successfully. They can be a tough competition to
Volkswagen’s self-driving cars. They are one of the topmost indirect competition to Volkswagen
and other automobile companies who are developing self-driving cars.
Product positioning
The self-driving cars from Volkswagen should be positioned in a way that it should reach a
majority of the targeted customers of the company. These cars are very easy to navigate and this
feature will appeal to technology-savvy consumers of the company, which constitutes their main
target group. The safety and reliability of these cars should be marketed to these customers so
3 | P a g e

that a majority of customers of the target group would like to purchase these cars (Payre et al.,
2014). The pioneering technology used to develop these cars should appeal to this group because
they like to have as firsthand experience of any technologically advanced automobiles.
Target market segmentation
Segmentation is defined as the process by which the consumers of a particular market according
to the demands of their consumer base. Segmentation is done on the basis of the geographic,
demographic, behavioral and psychographic profile of the consumers. Based on the demographic
and psychographic segmentation, there are three groups which can be targeted by Volkswagen.
These three groups consist of technology geeks, parents and old citizens of the country (Stephens
et al., 2016). The technology geeks consist of a group of consumers whose age ranges from 18 to
34 years old. This group is highly educated and they want to have firsthand experience on these
self-driving cars. The costs of these cars are high, thus these consumer groups should belong to
the high-income group of the country. These consumers want to experience convenience and fun
while traveling from one place to another. These driverless cars will provide both of this
sensation to them. Most of these consumers will be from the urban area while having easy access
to technological advancements. Based on their psychographic profile these groups share the
notion of having better services with the help of technology. These consumers are the main target
group of the company.
Another target group of Volkswagen can be identified as the old people who are physically
handicapped and incapable of driving. The average age of this group of people lies around 50 to
60 years of age and they are physically handicapped (Colquitt and Dowsett, 2017). The rate of
accident in these self-driving cars is less than the traditional cars which can prompt them to buy
these cars for the safety of their children. Volkswagen can target the group of technology geeks
to increase the sales of their self-driving cars (Litman, 2017). These groups consist of the largest
section of potential customers in the market of Australia. These group of consumers will play a
vital role in increasing the sales of these cars. They will be eager to have a firsthand experience
on these cars and will provide accurate feedback about the performance of these cars.
4 | P a g e

Decision-making process, involvement, and perceived risk
The consumer decision process is consists of five stages namely, need recognition, information
search, evaluation of alternatives, purchasing choice and lastly post-purchase behavior. Actual
state is defined as their current state of need and the desired state is defined as the state the
consumers wish to acquire. The young group of consumers has a tendency to gain experience
about these technologically advanced self-driving cars (Stocker and Shaheen, 2017). These
group of customers will buy this car to increase the level of convenience of their transportation.
They do not want to wait for public transportation and they do not want to be late for work.
They want to reach their decision quickly and safely, with the help of advanced technology. This
is the reason or need of this group of young customers of Australia. The next stage is the
information search, which consists of three stages; pre-purchase search, internal search
consideration set, and external search. These customers have to conduct research before deciding
whether they should buy these cars or not. They would evaluate the safety of using these cars for
themselves and their family (Davidson and Spinoulas, 2015). If they think these cars from
Volkswagen are safe they will buy these cars otherwise not.
These customers will think about their reliability and safety of these cars from Volkswagen, thus
he is using his internal search consideration set. He will use this information to guide him
towards taking a right decision. He will further ask their friends and relatives about their
versatility thus conducting an external search. These group will consider cars from other brands
and evaluate them in terms of price, performance and safety features of these cars. After
evaluating these options they will decide to buy these autonomous cars from Volkswagen due to
their high performance and the level of safety associated with it. Higher reliability is the
decision rule guiding the choice of these customers and they will select a retail outlet which is
located closest to their residential area. The final stage of these decision-making process is the
post-purchase behavior of these customers. Customer satisfaction will increase the sales of these
cars from Volkswagen thus increasing their profitability. If the customer is not satisfied, the
company should ask them about their feedback and work on the areas which need improvement.
Developing products according to the feedback from the customers increase the sales of the
company.
5 | P a g e

Internal influences
Internal influences are the personal beliefs, attitudes, and values which affects the behavior of
these customers of the company. These cars from Volkswagen are so positioned in the market to
satisfy the needs and motives of these customers. These cars are positioned to satisfy
psychological needs of these customers. They fulfill safety needs of a person, which lies in the
second level of Maslow’s Hierarchy of Needs. These cars have a low tendency to cause accidents
and have a higher level of security system associated with them. Consumers tend to make
decisions about the product based on their perception rather than real information. Volkswagen
should employ brand marketing to create stages of perception. These campaigns are able to
create the stages of perception such as sensation, attention, interpretation, and retention. The
consumers tend to select how to respond to specific stimuli based on the interaction they have
with their marketers. According to the perception of these customers, cars from Volkswagen
excel in terms of performance, safety, and reliability. These consumers tend to judge the quality
of the cars based on some informational cues they receive from their external sources.
Volkswagen can use the learning theory of reasoning to promote the self-driving cars from their
brand. They can promote their self-driving cars using the theory of reasoning, as these products
fulfill the safety needs of these customers. Fear, uncertainty, and doubt can encourage these
consumers to decide whether they should buy these cars or not. They can prioritize the concept
of the value of the product, safety and reliability by among these consumers.
External influences
A reference group consists of people who share same interests and values among themselves.
Recommendations from these groups have an influential role to change the behavior of the
customers. Family members are referred to as the primary reference group of the targeted
consumer market of Volkswagen. This reference group has an influential role in influencing the
decisions of the young technology savvy customers of the organization (Slovic, 2016). These
customers will not just buy the product just for their own convenience, but for the convenience
of their family members. Safety of their family members will play an influential role in the
decision-making process of these customers. These customers will seek the opinions of their
family members before making any decision about purchasing these self-driving cars. Different
type of situations plays a different role in the customer decision-making process (Tomczak et al.,
2018). These situations are communication, purchase, usage, and disposal. Volkswagen can
6 | P a g e

advertise their products in appropriate media to influence the behavior of the customers. These
advertisements will enable them to influence the communication situation (Hoffmann and Tooth,
2017) Marketers should use appropriate strategies to develop interpersonal relationships in order
to influence the purchase situation. The marketers should understand how the products should
be used in order to influence the decision of the customers (Borden, 2015). Disposal of products
is considered to be an important attribute by some of the customers of this company. The
targeted group of the company, which is the technology savvy group, shares the values of
conservation and self-enhancement. With the consumption of this product, these values are
upheld among these groups of consumers (Oliver, 2014). Self-driving cars appeal to the demands
of early adopters, who have a significant presence in the market.
Marketing strategy
Product
Volkswagen is considered as one of the major players in the automotive market of Australia, and
they are thinking about developing self-driving cars for quite some time. Their very first fully
automated car Sedric is the first self-driving car of level 5 automation. This car is able to provide
better mobility experience to their customers. This product is eco-friendly thus it does not have a
harmful effect on the environment. Safety features associated with this car is higher than their
normal cars in the market. A button will be provided so that the user can interact with the car
and have better driving experience. It will be able to provide mobility service to anyone at any
time (Armstrong et al., 2015). The company should market the convenience of operating this car
to the targeted audience of the company. They should also market the safety and reliability
features of the car to convince this group of customers to by this car.
Price
Volkswagen designed this car using advanced technology and using advanced materials with the
help of their research and development department. These cars are naturally placed at a higher
price than the rest of the cars of the company. However, they should look for ways to reduce the
price of their cars without compromising with any of the features of this car (Tanner and
Raymond, 2015). They should develop more cars that can fit the budget of the targeted
consumers of the company. They must allow the consumers to have a better experience while
7 | P a g e

driving. If they want to keep the prices of these cars, they should consider adding some features
within that price range to attract more customers from the targeted group.
Place
Volkswagen is a Germany-based company who has developed their business on a global scale.
They have opened their branches in 1953 and their very first car launched in Australia was
Beetle. They are able to sell more than 650,000 vehicles all over Australia. They have played an
important role to satisfy the car-loving people of Australia (Cohen et al., 2014). With time,
orders for self-driving cars will increase all over in Australia. They should be able to handle such
pressure and they need to increase their capacity of production to meet these demands and
deliver this product on time.
Promotion
Volkswagen has to promote their first self-driving cars through public relations and advertising
their products on a large scale. It will help them to reach new customers and appeal to their
personalities without spending much money on marketing. They have to promote their products
online to reach a wider group of consumers. They must gain positive reputation from their
customers by supporting charitable causes (Buch et al., 2018). They should reveal information
regarding the production process of their very first fully automated car Sedric.
8 | P a g e

Conclusion
This paper concludes that fully automated self-driving cars will change the concept of
transportation on a global scale. It will also have a significant effect on the markets of Australia,
the market size for these vehicles is growing at an exponential rate. The product should be
positioned in such a way so that it could reach more potential customer across the country.
Furthermore, it can be concluded that various external and internal factors influence consumer
behavior of Volkswagen. Volkswagen should develop appropriate marketing strategy using 4Ps
of the marketing mix to market their products to their targeted consumers, which consists of
young technology savvy people of the country.
9 | P a g e

References
Armstrong, G., Kotler, P., Harker, M. and Brennan, R., 2015. Marketing: an introduction.
Pearson Education.
Borden, N.H., 2015. The concept of the marketing mix. Harvard Business school.
Buch, R., Beheshti-Kashi, S., Nielsen, T.A.S. and Kinra, A., 2018, February. Big Data Analytics:
A Case Study of Public Opinion Towards the Adoption of Driverless Cars. In International
Conference on Dynamics in Logistics (pp. 347-351). Springer, Cham.
Cohen, S.A., Prayag, G. and Moital, M., 2014. Consumer behaviour in tourism: Concepts,
influences and opportunities. Current Issues in Tourism, 17(10), pp.872-909.
Colquitt, J. and Dowsett, D., 2017. Driverless cars: How innovation paves the road to investment
opportunity.
Davidson, P. and Spinoulas, A., 2015, June. Autonomous vehicles: what could this mean for the
future of transport. In Australian Institute of Traffic Planning and Management (AITPM)
National Conference, Brisbane, Queensland.
En.volkswagen.com. (2018). volkswagen.com. [online] Available at: http://en.volkswagen.com/
[Accessed 14 May 2018].
Hillier, P., Wright, B. and Damen, P., 2015, February. Readiness for self-driving vehicles in
Australia. In Workshop Report, February, ARRB Group Ltd.
Hoffmann, T. and Tooth, L., 2017. Shared decision making. Evidence-Based Practice Across the
Health Professions-E-pub, p.337.
Krueger, R., Rashidi, T.H. and Rose, J.M., 2016. Preferences for shared autonomous
vehicles. Transportation research part C: emerging technologies, 69, pp.343-355.
Litman, T., 2017. Autonomous vehicle implementation predictions. Victoria Transport Policy
Institute.
Oliver, R.L., 2014. Satisfaction: A behavioral perspective on the consumer. Routledge.
10 | P a g e

Payre, W., Cestac, J. and Delhomme, P., 2014. Intention to use a fully automated car: Attitudes
and a priori acceptability. Transportation research part F: traffic psychology and behaviour, 27,
pp.252-263.
Schoettle, B. and Sivak, M., 2014. A survey of public opinion about autonomous and self-driving
vehicles in the US, the UK, and Australia.
Slovic, P., 2016. The perception of risk. Routledge.
Stephens, T.S., Gonder, J., Chen, Y., Lin, Z., Liu, C. and Gohlke, D., 2016. Estimated bounds
and important factors for fuel use and consumer costs of connected and automated vehicles (No.
NREL/TP-5400-67216). National Renewable Energy Lab.(NREL), Golden, CO (United States).
Stocker, A. and Shaheen, S., 2017, July. Shared automated vehicles: Review of business models.
In International Transport Forum.
Sun, Y., Olaru, D., Smith, B., Greaves, S. and Collins, A., 2017. Road to autonomous vehicles in
Australia: an exploratory literature review. Road and Transport Research, 26(1).
Tanner, J. and Raymond, M., 2015. Principles of marketing. University of Minnesota Libraries
Publishing.
Tomczak, T., Reinecke, S. and Kuss, A., 2018. Introduction. In Strategic Marketing (pp. 1-18).
Springer Gabler, Wiesbaden.
11 | P a g e