Branding Insights

Buying a New Car and the Power of Brands

23 Oct , 2017  

People love to question the power of brands.

“With Amazon dominating the world, brands are done for,” some proclaim.

“In a digital world, you don’t need brands,” others note.

Another group insists, “Social media trumps everything! A referral from a friend is far more important than a brand.”

These are all interesting thoughts, and not without some merit, but brands aren’t obsolete. They still matter. In many categories, brands play a critical role—perhaps the most important role—in guiding purchase decisions.

I witnessed this recently when shopping for a new car with my wife. Our 2005 Honda Odyssey was fading, so we needed to find a replacement. Brands fundamentally informed our decision.

Brands and Consideration Sets

The first step in our car buying journey was defining a set of options. There are many cars available, but not all fall under every prospective car buyer’s consideration. Between shuttling my son Charlie to baseball practice, my daughter Claire to French horn rehearsal and my daughter Anna to swim practice, my schedule is tight—there isn’t a lot of time on the weekend to visit car dealerships.

We decided to eliminate a number of brands off the bat. I dropped Hyundai, because I just couldn’t see driving around in a Hyundai. I crossed VW/Audi off the list, because that company cheated on emissions testing in a most arrogant fashion. I’m a big fan of Ford, but my wife eliminated it from the running. Other brands that didn’t even make our consideration set include Kia, Cadillac, Chevrolet, Nissan and Dodge.

This first decision was driven almost exclusively by branding. We didn’t study the offerings or compare reliability charts. We didn’t search on Google for product specifications. We just made some choices based on our perceptions of the various brands—perceptions that were formed by advertising, sponsorships, recommendations and all the other brand touch points.

Perceptions

So we came up with a list of brands to consider: Honda, Toyota, Mercedes, BMW and Jeep. We then headed off to visit the dealerships and look at the offerings.

Brands fundamentally shaped our perceptions. We thought Toyota and Honda were both very reliable; BMW, Mercedes and Jeep ranked a bit further down the list.

We thought Jeep, Honda and Toyota would be the most affordable, and we worried about the price of maintaining a BMW or Mercedes. We didn’t study the actual cost; we didn’t call the various service departments. Who has time for that? We just formed opinions based on our perceptions of the brands.

The Power of Symbolism

In the end, the decision came down to two options: Toyota Highlander and BMW X5.

We dropped Honda from the list because we like the Honda brand but don’t like the look of the new Pilot. We cut Mercedes because their only SUV with a third row is a huge car, a bit difficult for our life in downtown Chicago. Jeep doesn’t have a third row.

Down to just two, we faced a tough decision. The Toyota Highlander and the BMW X5 are both lovely cars. BMW? Well that is a pretty impressive vehicle, and it is fun to drive. Highlander? Supremely practical.

In the end, we went with the Highlander.

It was ultimately a brand choice: we just didn’t want to be driving around in a BMW. It is a bit too flashy for us. It makes a powerful statement, one that we don’t want to make. I can’t see sending my daughter off to the grocery store to get some milk driving a BMW.

 

It is remarkable how brands play such a role in purchases. From a crowded field, brand equity drove consideration, perception and choice.

The challenge in cars—and in many industries—is to build a fabulous product and a powerful brand. You need both if you hope to win in this intensely competitive world.

 



9 Responses

  1. lfisher says:

    Funny — we just went through the same exercise and ended up the same place. Brand was huge in our choice. First, we looked at Volvo and Land Rover, just because they seemed like brands we could identify with…then we did more research and realized that reliability is also something we identify with, and we moved on (had we not been emotionally focused on brand, we would never have looked at those two). BMW *should have* been in the consideration set, but was a definite no, just based on brand. We wanted a bit of luxury, we’ve lived in Germany, but in Canada there’s an asshole factor with the BMW brand that we just couldn’t identify with. And then there’s making sure your brand lives up to its promise — I’ve been a Honda fan all my life, so we looked at the Acuras, but their styling was no better than the Accord I bought in 2006. Why would I pay the money for the (supposedly) upscale brand? In the end, we used a car broker who insisted that if we wanted reliability Toyota or Lexus were all we should consider, and here we are with a Highlander.

  2. Thom Disch says:

    This is an interesting discussion. I think there maybe a difference between big brands, like auto companies and small brands, like say, pasta manufacturers. The amount of investment/commitment from the consumer may change the value of the brand.

  3. Nice piece, but if this was really about strong branding, how could Subaru not even get a mention? Also, BMW’s are nice to look at, but notorious for not being worth the dollars due to the quality not being there (rough ride compared to other vehicles in that price range). Toyota’s are great, good brand, but Subaru’s branding sets the bar very high.

    • timcalkins says:

      Brett—I agree Subaru is a great brand and remarkable loyalty. Right now they just don’t have a three row option. I gather than is coming out pretty soon.

  4. Alain Weber says:

    Of course, brands influence our family decision making. For us, I should say for me (my wife does not always agree with me), Consumer Reports helps shape the decision making. For a major buy like a car, an appliance, I study CR ratings, reliability study and read their recommendations.
    I use it mainly to eliminate some brands and models which gather a low rating and then more than likely, brand influence takes over.
    We are now in Europe and after reviewing CR and the local Que Choisir, we bought a VW Polo. It was well appointed, small and with many safety features.
    I thought long and hard about VW appalling cheating but rationalized that other car makers have cheated and are cheating. It simply has not been reported yet. The rating independence of CR and Que Choisir were the major determining decision maker.
    It is faith in a different kind of brand

    • timcalkins says:

      Alain—You are probably right that all the players are guilty to some degree. CR is indeed another good brand. I’ll take a look at Que Choisir!

  5. emitahill says:

    Great timing. I’m also contemplating replacing my aged, expensively maintained 2003 Corolla either with a Prius (used) or another Corolla (used, but much younger). Long ago pre-divorce drove a used BMW. Great fun to drive but miserably expensive to maintain. Haven’t yet decided which option on my next car, but it will be a Toyota one way or another.

    • timcalkins says:

      I wouldn’t rule out a new one! The new small cars are remarkably inexpensive, and you can play one dealer off the next to get a good price.

  6. Davud S says:

    Funny anecdote to support your point. PSA, the French car manufacturer, owns – among others – 2 French brands: Peugeot and Citroen. Like for any automobile manufacturer these days, they share a lot of platforms. But they can go further. I am not sure these models still exist but once upon a time PSA had 2 mini-vans: the Peugeot 806 and the Citroen Evasion. It was the EXACT same vehicle, except for the logo. The Peugeot was selling at a premium over the Citroen …

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