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Sunday, December 14, 2003

How the Internet Gives Consumers the Upper Hand

In just a few short years, some 60,000 auto-related discussion forums and Web logs have emerged on the Internet as gathering spots where vocal, influential owners and potential customers talk about auto companies and vehicles—-24 hours a day, seven days a week.

Moreover, key decision makers and stakeholders—-competitors, government agencies, the media, attorneys, current and former employees, and suppliers—-are increasingly listening and referring to these online discussion communities for real-time insights.

Today, nearly 75% of consumers cite word-of-mouth recommendations as the most influential factor in their car-buying .  In the space of a few short years, the Internet has evolved into a useful medium for particular kinds of commerce.  After the dot-com hype of the 1990s, several car-buying Web sites emerged as some of the most popular of all Web destinations for consumers.

In addition to these quasi-official sites for information and opinions about vehicles, a parallel universe of Internet communities also sprang up where consumers freely shared information and informal opinions about all phases of the automotive experience—-new-car attributes and drawbacks, subjective accounts about ownership, comparisons of competing vehicles, anticipation about new models, safety issues, product recalls, service problems, launch glitches and hassles with dealers.

These online communities, populated almost exclusively by consumers who love to talk about their cars, trucks and SUVs, have become an increasingly legitimate, albeit unstructured, source of car-related information in the eyes of all potential consumers.

Quite inevitably, this vast new storehouse of highly believable, unsolicited, unstructured information has begun to exercise huge infl uence on consumers’ behavior.

Left unmonitored and unchecked, these free-form and unstructured Internet discussions can both boost and harm automotive companies’ brand images, loyalty and satisfaction levels, product-quality perceptions, sales and profi ts.

As this paper will explore, these influential consumers, and the consumers and stakeholders they infl uence, are directly affecting the bottom lines of automotive manufacturers and dealers.

Of consumers who purchased a 2001 or 2002 vehicle, nearly 20% participated in online discussion groups before buying (Source: JD Power & Associates).

Consumers continue to rely on car companies and the automotive media for updated product information, auto reviews and new-model information, but more and more of them are looking to the Internet to narrow their choices and evaluate their options.

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Posted on 12/14
Motor IndustryPermalink