There’s no business like the car business There is simply no business like the car business. In Australia there are over 50 brands that offer passenger vehicles. The comparison site finder.com.au currently lists 56. Within these brands, there are at least 500 models – or more, depending on what you count as a model. In addition, within models there are different vehicle grades, and these grades are significant differences in the product. If we assume an average of 2 grades per model, that means around 1000 products to select from. For the consumer, this is a dazzling and sometimes bewildering amount of choice, and that’s not even including colours and other optional features.
Yoghurt, one example of a crowded, competitive FMCG category
FMCG used to be seen as the top of the marketing tree. It was considered the most advanced marketing there was. Ambitious marketers wanted FMCG experience on their resume and a name like P&G or Unilever or Nestle on their resume. Nowadays, things have changed in FMCG, with long lag times for new products to reach the shelves, less scope for innovation, the dominance in Australia of two retailers, diminishing budgets, and the rise of generics. The room to move in FMCG is limited, at least in comparison to the auto market.
Finder.com.au currently lists 56 car brands operating in Australia.
Auto marketing is top of the tree
Competitive intensity
I’d argue that auto marketing is king of the jungle now. Why? Because it encompasses just about every aspect of modern marketing practice and is rapidly evolving. Let’s consider the 4Ps of the marketing mix and take our yoghurt example as a proxy for FMCG. Yes, I know there are 7Ps now; but let’s stick with the original 4Ps; i.e. product, price, place and promotion.
The phrase “the world’s most competitive car market” is often used to describe the Australian market, with its 56 or so brands for a population of just under 27 million people. Compare the USA, a car-obsessed nation for sure, with less brands available (finder.com currently lists 43) for a population of some 330 million.
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So, in terms of competitive intensity, the Australian car market is remarkable. To survive and prosper as one of the companies selling to the consumer, you need to be a very good marketer indeed. The competition in the new car market is even more intensive than the ‘FMCG’ (fast-moving consumer goods) categories. As an example, let’s take yoghurt, a very crowded and competitive grocery category. The Woolworths site lists 41 yoghurt brands with 363 products (which basically means flavours). Versus the Aussie new car market with 56 brands and over 1000 products.
20
Q3 2021
From what I can see, recent yoghurt product development includes: More Greek style varieties, probiotics, handy pouches for kids, thick & creamy varieties and high protein. Add vanilla bean if you want to boost the list I certainly like it!
The author finds some notable product innovation in his own fridge.
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Compare the revolution that is happening in automotive: Electric vehicles on the rise, with OEMs changing their whole line-ups; and other power trains like hydrogen fuel cell coming. Multiple new active safety features are now pouring down, not just trickling down, from luxury design. High tech convenience features like heads-up display, multi-media with touch screens, GPS. The list could go on and on; it’s a race that is transforming the car from a transport device to a lifestyle technology tool. Traction
