Is WHAT you stock a marketing decision?

[Ed Brooks]

As we approached the 11-11-11 launch of Provision, I’d been thinking a lot about dealerships’ inventories – what you stock. My question is, “Is what you stock a marketing decision?” Not necessarily a capital ‘M’ Marketing Department decision, but rather a small ‘m’ marketing decision. The noun, not the business unit.

auction.jpg

I’d submit to you that not only is it a marketing decision, it’s one of the most fundamentally important decisions made at your dealership. The classical Four P’s of marketing that have been around since the 60’s are as important today as they were 50 years ago: Product, Price, Promotion and Place. While a number of folks have tried to redefine things like the “Dealership Experience” as the product, at the end of the day, what the customer is spending thousands of dollars on is the car.

Whether you have a crusty old Used Car Manager or a handsome young one. Whether you’re using cutting edge market analytics, or shooting from the hip. No matter how the decision is made, I contend this is a marketing decision. This decision has a direct and substantial impact on your traffic today. With the amount of online research being conducted today, one of the easiest ways to eliminate yourself from contention is not having the car your customers are looking for at a price they are willing to pay.

I believe your inventory has much more impact on your success than how fully you’ve embraced Social Media, or what percentage of your budget goes to PPC campaigns or even whether you show up above your closest competitor on a Google Search. If you don’t have the car they want, at a price they are willing to pay, their search will continue.

So back to my original question, “Is what you stock a marketing decision?” What are your thoughts? Do the folks buying your inventory have a real appreciation for how crucial their decisions are to your success?

[Alex Snyder]

While a number of folks have tried to redefine things like the “Dealership Experience” as the product, at the end of the day, what the customer is spending thousands of dollars on is the car.

you're going to fight that statement till the day you die aren't you? It just shows that you don't get it ....I know you do Ed, but just have a different perspective.

The article Ed is referring to: What is the product of a car dealership?

To answer your question, and to keep this thread on topic, there are a great deal of items that play into an overall stocking strategy. It isn't as simple as calling it a "marketing decision." It is a combination of operations, marketing, intuition, experience, and many other things I haven't listed out.

[Ed Brooks]

you're going to fight that statement till the day you die aren't you? It just shows that you don't get it ....I know you do Ed, but just have a different perspective.

The article Ed is referring to: What is the product of a car dealership?

I understand that, at most dealerships, control of the cars you stock is out of most folks hands, so it's easier to redefine what the product is. I also understand how vital the Dealership Experience is. When all things are equal - or even close to equal - the Dealership Experience will most likely be the deciding factor. But it's not the product

To answer your question, and to keep this thread on topic, there are a great deal of items that play into an overall stocking strategy. It isn't as simple as calling it a "marketing decision." It is a combination of operations, marketing, intuition, experience, and many other things I haven't listed out.

The definition of marketing (small m) includes all of those things:

mar·ket·ing

noun \ˈmär-kə-tiŋ\


Definition of MARKETING

1
a : the act or process of selling or purchasing in a market b : the process or technique of promoting, selling, and distributing a product or service

2
: an aggregate of functions involved in moving goods from producer to consumer

[Alex Snyder]

We'll just 100% agree to 30% disagree on these things

[ddavis]

Ed, These are two seperate but important things. In the most basic terms, business can be reduced to your Products, People and Prospects, with everything else supporting those.

As an old Used Car dog, I would go to the auctions, the day before, to pick the vehicles that I was interested in. I would decide, the night before, my maximum bids, for each of those cars, and post that to the run list. I know these efforts made money for the store.

Today, our business is much more sophisticated. With computers and the Internet, savy Used Car Managers can be much more productive, than I was. Many of them have never written liners, for the paper, and they buy most of their cars, looking at a computer screen.

If you accept my three "Ps", acquiring products is more to the core of the business than marketing.

[JQuinn]

We'll just 100% agree to 30% disagree on these things

<strong> 60% of the Time, It Works Every Time

[Ed Brooks]

Ed, These are two seperate but important things. In the most basic terms, business can be reduced to your Products, People and Prospects, with everything else supporting those.

As an old Used Car dog, I would go to the auctions, the day before, to pick the vehicles that I was interested in. I would decide, the night before, my maximum bids, for each of those cars, and post that to the run list. I know these efforts made money for the store.

Today, our business is much more sophisticated. With computers and the Internet, savy Used Car Managers can be much more productive, than I was. Many of them have never written liners, for the paper, and they buy most of their cars, looking at a computer screen.

If you accept my three "Ps", acquiring products is more to the core of the business than marketing.

Doug, I do like your three P's. The reason I went with the original Four P's is because they are in every Marketing text book published in the past 50 or so years. So my point was how classical marketing views product decisions.

I really commend the effort you put in before you headed to the auction. Whether it was put into words or not, you clearly appreciated the importance of your decision.

With the Internet, the amount of research being done by consumers and the whole ZMOT thing, those decisions are even more important today.

[JoePistell]

...I believe your inventory has much more impact on your success than how fully you’ve embraced Social Media, or what percentage of your budget goes to PPC campaigns or even whether you show up above your closest competitor on a Google Search. If you don’t have the car they want, at a price they are willing to pay, their search will continue.

As a self-taught digital marketing specialist, here's my take on inventory.

INVENTORY SIZE (width and depth):
Each vehicle in inventory is an advertisement on the internet. The more inventory you have the more times your advertisements will be seen.


INVENTORY PRICE:
If a vehicle on the internet is a place for eye balls to land on (aka an advertisement), then, just like with all forms of advertising, PRICE IMPROVES PLACEMENT (aka visibility). This is the root idea behind Vauto's success. If your vehicle is priced too high, then your VDP traffic is weak. Using tools like vAuto, you can move your nearly invisible advertisement into a more prominent place simply by managing the vehicle's price.

...So back to my original question, “Is what you stock a marketing decision?”

Absolutely, Positively YES.

For example, Say your an Audi dealer and you're lovin' the ass woopin you're dishing out to Lexus, Infinity BMW and Caddy. I'd actively position my used inventory for conquest opportunities. I'd get low mile competitive units, price them smartly, then work some merchandising magic to reward the shopper to take the Audi Test Drive Challenge (sounds like a perfect HookLogic Fit!!!)

Same goes with the Ford Dealer. My Father, a super active internet shopper, was strongly considering a Hyundai but he had reservations about the brand. He came by to visit me, laid eyes on a 2011 Taurus and he totally loved what he saw.

Time and time again, so many ZMOT shoppers (internet shoppers) buy a totally different car than they were obsessing over, we forget the POWER of the FMOT (the dealer visit).

FMOT SELLS CARS.
ZMOT GETS THEM IN THE DOOR.

If you have a weak product mix that's priced poorly, then the world is flying by you and your phone ain't ringing.

Game. Set. Match.

[CCDealer]

I absolutely believe that what you stock is a marketing decision. When I worked at the Dodge Dealership (one of the oldest in the country), the New Car Sales Manager ordered every car as though it was going to be his own personal demo car. It was rare to find a Dodge Dakota on the lot for less than $40k, and I don't think there was a car on the lot less than $30k, except maybe a couple of Dodge Caliber SXTs that didn't have a navigation system or some other pricey option.

Consequently, you didn't see very many young customers on the lot. Very few first-time buyers. The demographic was decidedly grayer, probably had higher net worth, and, while they were great to deal with, they were the type of customers that buy a car and drive it until it stops. They were "life of loan" customers, which was fine, but you knew you wouldn't see them again for 3-6 years.

Younger, more impulsive folks didn't come around because they couldn't afford the price of admission.

The dealership was later sold and now they are a full-line dealer for Dodge, Chrysler, and Ram. They have a lot more "entry level" stuff to get people on the lot, too.

Nothing wrong with either option, but yes, Inventory = Major Marketing Decision. Just look at Yenko and his Camaros.

[Ed Brooks]

INVENTORY SIZE (width and depth):
Each vehicle in inventory is an advertisement on the internet. The more inventory you have the more times your advertisements will be seen...

...FMOT SELLS CARS.
ZMOT GETS THEM IN THE DOOR.

If you have a weak product mix that's priced poorly, then the world is flying by you and your phone ain't ringing.

Game. Set. Match.

Joe! It's great to have you back from vacation. I think today we're finally at a point where we can add some science to width and depth with some analytics. We have Provision beta testers reporting record SRPs and VDPs. Not by broadening inventory or enlarging it, but rather by targeting the exact right vehicles to what their customers are searching for online.