Toyota's "Purchase Funnel" Is Running Dry; Ford's There With the Siphon
On the surface, it seems like Toyota (TM) is weathering the storm of bad publicity from the giant Toyota recalls earlier this year pretty well. After all, Toyota's U.S. sales are nearly even with last year, and the Toyota Camry (pictured) is still the best-selling car in America.
However, fewer people have Toyota on their shopping list, according to CNW Marketing Research. From top to bottom, the stages of the classic automotive purchase funnel (pictured below) are: brand awareness, familiarity, positive opinion, consideration, intention, shopping and purchase, according to GfK Custom Research North America.
Toyota has fewer people near the top of the purchase funnel, according to a recent CNW report. CNW said that in 2010 through August, about 21 percent of car shoppers say they are considering the Toyota brand. That's down from about 25 percent in 2009; 30 percent in 2008; or a recent high of 37 percent in 2007.
Ford (F) is benefiting from the downturn in Toyota consideration, CNW said. Through August, Ford consideration in 2010 was about 29 percent, up from 24 percent in 2009; 20 percent in 2008; or 19 percent in 2007.
The data also make it clear that the drop in Toyota consideration began before its unintended acceleration problems came to light in late 2009 and early 2010. The brand's quality reputation had begun to take some knocks before then, and Toyota brand loyalty had already begun to suffer. In the long run, it's also a problem for Toyota that it's more popular with Baby Boomers than with Gen X or Gen Y, also called Millennials. That's why Toyota created the Scion brand, to try and attract younger buyers.
With fewer people in the purchase funnel, the only way Toyota can grow or even sustain its sales is to do a better job of closing the deal with the people who do consider the brand. Toyota is accomplishing that, with the help of bigger incentives than Toyota has been used to giving. According to Edmunds.com, the average incentive for the Toyota, Lexus and Scion brands combined was $2,681 in August, up from $1,622 a year earlier.
CNW said it also helps Toyota that is still has a large percentage of "hard-core Toyota legacy owners," that is, people who have had a Toyota in the family for years. Where Toyota is hurting is among shoppers who are new to the brand, the research firm said.
Related:
- Toyota Recall Highlights Deep Organizational Failures
- Scion Sales Outlook: Can a Cult Car Survive Success?
- When Good Cars Sell Badly