Tag Archives: automobiles

Hum Rider

Hum Rider is a custom-build car that can master any traffic jam with a flick of a switch. The car widens and elevates so that you can drive right over the cars in front of you!  Really, it works.

But, unfortunately, the Hum Rider is not a real car that can be purchased. (Too bad, because if it existed, it would sell)! The Hum Rider is however an ingenious advertisement (and a specially-built vehicle) to promote a new service, Hum by Verizon.

Hum is a device that makes cars smarter and more connected with a suite of features. The device notifications include mechanic hotline, maintenance reminders, boundary and speed alerts, and for an additional fee, includes Wi-Fi hot spot.

Hum is priced at a subscription fee of $10 per month, plus $20 activation fee, plus $29.99 equipment fee. To use: download the app, clip Hum speaker to car visor, plug the Hum reader into a car’s OBD-II port, and it’s ready to go.

The video was a viral hit garnering 35 million views on Facebook in 48 hours. But sadly, it just can’t jump over the cars in front of you on the highway.

Group Activities and Discussion Questions:

  1. Pricing is usually a complex topic. Discuss the six steps for pricing (determining objectives, estimating demand, determining cost/profit relationships, select price level, set list price, and make adjustments).
  2. Discuss the various pricing models in class: demand-oriented, cost-oriented, profit-oriented, and competition-oriented.
  3. Show the Hum Rider video: https://youtu.be/faU7-6u58zM
  4. View the Web site Hum by Verizon: https://www.hum.com/
  5. For Hum, divide students into groups and have each group work on any/all of the six steps.
  6. When setting the price level, assign each team a different model to use (demand-oriented, cost- oriented, etc.).

Source:  Ad Week  

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By Subscription: Luxury Vehicles from Cadillac

Subscription businesses are a great business model. They set up a recurring revenue stream and introduce products in front of customers who might normally not use them. We are very familiar with subscriptions from magazines and newspapers, food, shaving products, beauty products, pet food, meals, and movies. And now, for the first time from Cadillac comes a luxury vehicle subscription service called “Book by Cadillac.”

Book by Cadillac includes 10 luxury, high-end car models, all equipped with OnStar, Sirius XM, and 4G LTE. Customers can exchange up to 18 vehicles in 12 months, getting the type of car they need for that particular activity. At $1,500 per month, and currently offered only in New York City, the new programs already has 5,000 customers. The monthly fee covers all ownership costs of vehicles including unlimited mileage, high-end vehicles, insurance, maintenance, repairs, vehicle registration, and taxes. And it is only a month-to-month commitment to try the service.

It is easy to use: Download the app, request a vehicle, schedule delivery date/time, and then drive away!

What do you want to drive today?

Group Activities and Discussion Questions:

  1. Show the WSJ video about the service: http://www.wsj.com/video/latest-auto-trend-car-subscription-services/E8B0F667-33C3-4A50-8B2A-42AB2F6A277C.html
  2. Also show the Web site – Book by Cadillac:

https://www.bookbycadillac.com/

  1. Poll students: Who would try this subscription model? Why or why not?
  2. Discuss the changing model of car ownership and how this service fits into changing consumer behavior.
  3. Divide students into teams and have each team develop a profile of a target market for Book by Cadillac. Include demographics, psychographics, behaviors, values, attitudes, etc.
  4. Based on the target market profile, what makes this product unique for these customers?

Source:  Wall Street Journal   

 

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Vehicle Dependability Study

Cars are one of the most expensive and involved purchases that consumers make. They have an extended decision-making process, use multiple information sources, and include multiple evaluation criteria before making a final decision. The decisions that car buyers make impact not only their immediate budgets, but also their long-term budgets with respect to repairs and vehicle dependability (post-purchase behavior).

One source often used by consumers is the J.D. Power Vehicle Dependability Study. According to the most recent study, car buyers avoid models with poor reputations for dependability. The good news is that buyers do not have to spend a lot of money in order to get a dependable vehicle.

The study examines problems experienced over the past 12 months by original owners of 3-year cars. Eight categories are examined, including exterior, engine/transmission, audio/communication/entertainment/navigation, interior, features/controls/displays, the driving experience, heating/ventilation/air condition, and seats. The survey examined responses from 35,186 original owners of 2014 auto models.

Check out the report and see where your vehicle placed.

Group Activities and Discussion Questions:

  1. Review key aspects of developing a product positioning map, including determining the axis labels for positioning.
  2. Poll students: What are factors that influence consumer purchases of cars?
  3. Divide students into teams.
  4. Have each team select two criteria and draw a positioning map for automobiles using those criteria (Ex: price and reliability).
  5. Show the J.D. Power report and video:
  6. http://www.jdpower.com/cars/awards/Vehicle-Dependability-Study-%2528VDS%2529-by-Category/1882ENG
  7. Based on the J.D. Power ranking, how could different auto manufacturers use the rankings to reposition their products?

Source:  J.D. Power, Manufacturing Business Technology

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