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European Customer Desirability and Willingness to Pay for Infotainment Features

Published by: Frost & Sullivan

Published: Apr. 15, 2005


Table of Contents


1. Executive Summary
        1. Introduction and Key Research Findings
                1. Introduction
                2. Importance of Infotainment by Country
                3. Importance of Infotainment by Vehicle Segments
                4. Purchase Intentions for Navigation Systems
                5. Conclusions—Most Preferred Systems and Applications
                6. Key Research Findings

2. Introduction and Methodology
        1. Introduction and Objectives
                1. Objectives of the Study
        2. Product Scope of the Study
                1. Scope of the Study
        3. Sampling Process
                1. Sampling
        4. Methodology of Conjoint Analysis
                1. Conjoint Analysis

3. Customer Awareness
        1. Awareness Observations
                1. Observations
        2. Awareness of Infotainment
                1. Observations by Country
        3. Considered Part of Infotainment Umbrella
                1. Considered Systems

4. Customer Satisfaction
        1. Overall Satisfaction with Current Systems
                1. Overall Satisfaction
        2. Satisfaction with Audio System
                1. Satisfaction by Country
        3. Satisfaction with Navigation Systems
                1. Satisfaction by Country
        4. Navigation Systems—Driving time Influence
                1. Time Driving to Work Influence
        5. Satisfaction with Navigation Systems
                1. Satisfaction by Vehicle Segments
        6. Satisfaction with Phone Systems
                1. Satisfaction by Country
        7. Satisfaction with Rear Seat Entertainment System
                1. Satisfaction by Country

5. Importance of Infotainment
        1. Infotainment Importance
                1. Importance by Country
                2. Importance by Vehicle Segments
                3. Importance by Age

6. Importance of Infotainment by Segment and Country
        1. Importance of Infotainment by Country
                1. Importance of Infotainment—Spain
                2. Importance of Infotainment—Italy
                3. Importance of Infotainment—UK
                4. Importance of Infotainment—France
                5. Importance of Infotainment—Germany
        2. Importance of Driving time on Infotainment Interest
                1. Influence of Driving Time

7. Purchase Intentions by Country
        1. Purchasing Observations
                1. Observations
        2. Country Purchase Intentions
                1. Purchase Intentions—In Car Stereo
                2. Purchase Intentions—Navigation Systems
                3. Purchase Intentions—Phone Systems
                4. Purchase Intentions—Rear Seat Entertainment Systems
                5. Rear Seat Entertainment Systems—No Family Factor
                6. Purchase Intentions—SOS Button
        3. Purchase Intentions by System Types
                1. Intentions by System Types

8. Purchase Intentions By Vehicle Segments
        1. Segment Purchase Intentions
                1. Purchase Intentions—Audio Systems
                2. Purchase Intentions—Navigation Systems
                3. Purchase Intentions—Phone Systems
                4. Purchase Intentions—Rear Seat Entertainment Systems
                5. Purchase Intentions—SOS Button
        2. Interest in Features for Current Car
                1. Interest in Features

9. Portability Preference
        1. Portability Findings
                1. Findings
        2. Preferences for Fixed and Portable Devices
                1. Portability Preferences
        3. Preferences by System
                1. Portability Preference for Navigation Systems
                2. Portability Preferences for Audio System
                3. Portability Preference for Rear Seat Entertainment Systems
                4. Portability Preference for Phone Systems

10. Conjoint Analysis
        1. Introduction
                1. Infotainment System Decision Model
                2. Notes on the Conjoint Analysis
        2. Overall European Preferences
                1. European Preferences Summary
                2. Relative Importance of Attributes—Overall
        3. Attributes and Levels
                1. Attributes and Levels—Overall
                2. Attributes and Levels—France
                3. Attributes and Levels—Germany
                4. Attributes and Levels—Italy
                5. Attributes and Levels—Spain
                6. Attributes and Levels—UK
        4. Optimal Configuration
                1. Optimal Configuration—Overall
                2. Optimal Configuration Per Country
                3. Optimal Desirability Configuration—France
                4. Optimal Desirability Configuration—Germany
                5. Optimal Desirability Configuration—Italy
                6. Optimal Desirability Configuration—Spain
                7. Optimal Desirability Configuration—UK
        5. Perceived Price of Infotainment Systems
                1. Perceived Price of Infotainment Systems—Overall
                2. Perceived Price of Infotainment Systems—France
                3. Perceived Price of Infotainment Systems—Germany
                4. Perceived Price of Infotainment Systems—Italy
                5. Perceived Price of Infotainment Systems—Spain
                6. Perceived Price of Infotainment Systems—UK
                7. Dynamics of Price Perception
        6. Significant Demographic and Behavorial Factors
                1. Introduction
                2. Profile of Customers Likely to Perceive Attributes as Important—Overall
                3. Profile of Customers Likely to Perceive Attributes as Important—for Navigation Systems
                4. Profile of Customers Likely to Perceive Attributes as Important—for Multimedia Systems
                5. Profile of Customers Likely to Perceive Attributes as Important—for Phone Systems
                6. Profile of Customers Likely to Perceive Attributes as Important—for Other Systems
                7. Profile of Customers Likely to Perceive Attributes as Important—for Portability
                8. Profile of Customers Likely to Perceive Attributes as Important—for Control Device
        7. Additional Analysis for Selected Demographic Data
                1. Potential Effect of Navigation System Ownership on Preferred Configuration and Perceived Price
                2. Potential Effect of Intention to Purchase Infotainment System for Current to New Vehicle on Preferred Configuration and Perceived Price
                3. Potential Effect of Family Life/ Marriage on Preferred Configuration and Perceived Price
        8. Preference and Price By Segment—France
                1. Relative Importance of Attributes by Market Segments
                2. Optimal Configuration
                3. Perceived Price Per Market Segment
                4. Significant Market Segment Differences
        9. Preference and Price By Segment—Germany
                1. Relative Importance of Attributes by Market Segments
                2. Optimal Configuration
                3. Perceived Price Per Market Segments
                4. Significant Market Segment Differences
        10. Preference and Price By Segment—Italy
                1. Relative Importance of Attributes by Market Segments
                2. Optimal Configuration
                3. Perceived Price Per Market Segments
                4. Significant Market Segment Differences
        11. Preference and Price By Segment—Spain
                1. Relative Importance of Attributes by Market Segments
                2. Optimal Configuration
                3. Perceived Price Per Market Segments
                4. Significant Market Segment Differences
        12. Preference and Price By Segment—UK
                1. Relative Importance of Attributes by Market Segments
                2. Optimal Configuration
                3. Perceived Price Per Market Segments
                4. Significant Market Segment Differences

11. Purchase Channels
        1. Preferred Purchase Channels
                1. Preference for Point of Purchase
                2. European Preferred Purchase Channels
                3. Purchase Channels
                4. Preference for Purchase Channels

12. Control Functions and Devices Preferences
        1. Preferences of Control Devices
                1. Central Infotainment Control Unit
                2. Consumer Preferences—Control Devices

13. Internet Usage
        1. Internet Usage Analysis
                1. Downloaded Music and Usage in Vehicle
                2. Frequency of Downloaded Music—By Country
                3. Downloaded Frequencies
                4. Medium/Products Used for Music Downloads
                5. Who use Downloaded Music in their Vehicle
                6. Music Downloads

14. Navigation
        1. Analysis of Navigation System
                1. Perceived Types of Navigation Systems Installed
                2. Overall Satisfaction with Navigation Systems
                3. Navigation Systems—Time Driving to Work Influence
                4. Satisfaction with Navigation Systems—By Segment
                5. Satisfaction with Key Navigation Features—Mean by Country
                6. Satisfaction with Key Navigation Features—Mean By Vehicle Segments
                7. Type of Travel Usage of Navigation System
                8. Location Search Method
                9. Preferred Navigation Database Update Method
                10. Preferred Frequency of Updates
                11. Perceived Importance of the Points of Interest (POI)
                12. Lane Information
                13. Perceived Price—By Country
                14. Perceived Price—By Vehicle Segments
                15. Mass Market Perceived Price
                16. Portability Preference for Navigation System
                17. Country Purchase Intentions for Navigation Systems
                18. Segment Purchase Intentions for Navigation Systems
                19. Interest in Navigation for Current Car
                20. Key Observations for Driving Trends
                21. Usage of Navigation for Work
                22. Usage of Navigation for Travel
                23. Usage of Navigation for Travel Reasons
                24. Countries Visited on Holidays
                25. Destinations of those with Navigation Systems
                26. Preferred Method of Update
                27. Preferred Frequency of Update
                28. Importance of Points of Interest (POI)
                29. Lane Information—User and Non User
                30. Importance of Infotainment—Where People Live

15. Telephony
        1. Analysis of Telephony Systems
                1. Phone Systems—By Country
                2. Phone Interactivity and Connectivity
                3. Phone Interactivity—France
                4. Phone Interactivity and Connectivity—Germany
                5. Country Purchase Intentions—Phone Systems
                6. Segment Purchase Intentions—Phone Systems
                7. Interest in Phone System for Current Car
                8. Portability Preferences—Phone Users and Non Users
                9. Phone Systems wanted by Segment—Mean
                10. Portability—Buy For Current Car or Future Car

16. Conclusions and Strategic Recommendations
        1. Conclusions
                1. Most Preferred Systems and Applications
                2. Conclusions
        2. Recommendations
                1. Recommendations—OEM
                2. Recommendations—System Suppliers
                3. Recommendations—Service Providers

17. Frost & Sullivan Awards
        1. Frost & Sullivan Awards
                1. Award for Best Brand of Audio System
                2. Award for Best Brand of Navigation System
                3. Award for Best Brand of Multimedia System

18. Appendix
        1. Other Analysis
                1. Financing
                2. Frequency of Foreign Trips
                3. Frequency of Drive to Work
                4. Time Spent Driving to Work
                5. Activities Undertaken in Vehicles—By Segment
                6. Adaptive Conjoint Analysis
                7. Regression Analysis

Abstract

Improving Consumer Awareness is Key to Increasing Uptake of Infotainment Systems

Although the European infotainment industry is expected to generate €6.20 billion by 2010, there exists a lack of sufficient awareness among consumers regarding infotainment at present. Around 61.0 per cent of those sampled in the Frost & Sullivan study had not heard of the term "infotainment", indicating the failure of original equipment manufacturers (OEMs) and suppliers in raising end-user awareness. Importantly, while the D&E and multi-purpose vehicles(MPV) segments attached maximum importance to infotainment at 21.0 per cent, the crucial mass market vehicle segments recorded least influence, highlighting the urgent requirement for increasing the influence and importance of vehicular infotainment features.

This Frost & Sullivan research service evaluates the European consumers desirability and willingness to pay for vehicular infotainment features. The conjoint analysis methodology used in this study brings out the most appealing and optimal package for infotainment and includes different applications, features and pricing across countries and vehicle segments. This is likely to help OEMs and suppliers formulate effective product and pricing strategies.

Basic Audio Systems Remain the most Preferred Infotainment Application

The basic audio system with AM/FM, digital radio and a 6 CD changer, remains the most preferred infotainment solution among European drivers. While navigation and control devices form the next two choices, the preference for multimedia systems was the least and these systems were referred to as niche and only seemed to be popular in MPV and higher vehicle segments. Also, with most consumers wanting to use their own mobile phones and 68.0 per cent desiring fixed in-vehicle solution for navigation, audio and multimedia, there exists a need for integrated solutions such as black box technology.

Across Europe car dealerships are clearly the leading channel for purchasing infotainment features. However, the Internet also registered a significant presence and was particularly more prominent in the UK and Germany where 21.0 per cent of respondents opted for this purchase channel. "Respondents clearly understood that navigation, audio and rear seat entertainment systems formed ‘infotainment and phone systems and SOS buttons were thought of as additional features," says the analyst of this research service. "Interestingly only half of respondents considered phone systems as part of the infotainment system and hence manufacturers could consider ‘marketing’ these features separately."

Pricing remains a Barrier to Penetrating the Mass Market Vehicle Segment

In using the conjoint analysis to estimate the consumers perceived pricing for individual infotainment solutions as well as infotainment packages, the study found that the average perceived price for a complete infotainment system was €1540, while the consumers were only prepared to pay up to €1240. This difference in the customers willingness to pay is proving a major barrier in penetrating the mass market vehicle segment that holds tremendous revenue and return on investment (ROI) potential. Hence, with customers not willing to pay for features they do not use or value, system manufacturers and service providers need to tailor the prices and relevance of their offerings to suit the consumers expectation.

As over 50.0 per cent of consumers in France, Germany Spain and the UK are expected to equip their next vehicle with navigation systems, market penetration for such systems could rise dramatically over the next few years. Also, while 40.0 per cent of the people prefer to wait until their next purchase to have a telephone car kit, one-fourth of the respondents said they would prefer a new system for their current vehicle indicating a potential marketing opportunity. "Vehicle manufacturers must stop looking at Infotainment as an automotive product and look at it from consumer electronics product perspective," says the analyst. "With the need for improved consumer awareness, OEM’s need to increase their marketing efforts to drive home the benefits of infotainment systems and the Internet could prove an effective medium."



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