If anything characterizes the small, task-oriented vehicle (STOV) industry it is diversity. There is virtually no unfulfilled need in the marketplace that does not draw a host of competitors looking to fill the gap. I have long described the STOV market as a “long-tail market” after the well-known book by Chris Anderson (The Long Tail: Why the Future of Business is Selling Less of More). A long-tail market is one in which the product type has been niche-driven, responding to a relatively narrow set of commercial or industrial requirements, or simply, to personal tastes of constricted consumer subsegments. Examples of this production/marketing strategy abound.
Product Diversity in the STOV Marketplace
The following table lays out a partial segmentation of representative products by manufacturer brand, most of which are reported in Golf Car Advisor’s Golf Car Directory (published in the July/August issue). There are additional product segments that apply to at least some of the listed manufacturers and within the product segments are more than a few variations.
For the most part, manufacturers have carefully evaluated market information and consumer preferences culled from their dealers’ experience and aggregated at the company level. (Once in a while, in their wisdom, companies take advantage of analysts like me.) Their response is to design new vehicles or vehicle features which meet the changing needs of the marketplace.
The new design or redesign can comprise drivetrains, including engine type, brake systems, transmissions; interior features, such as increased storage space, and exterior components, such as lighting, cowl redesign, windshields, and rearview mirrors. Into the mix goes cost of production calculations and the all important pricing point decisions.
If it (the new design) is complex from the manufacturer’s point of view, it could be argued that it is even more so from the customer’s perspective. After all, once the manufacturer is done with designing the new product, he knows what he has. At that point (or possibly during the process) an all important information dissemination effort is launched. First, the dealers and their staffs have to understand the product; second, most critically, potential buyers have to understand how they can benefit.
Role of Upgrades and Accessories
Upgrades and accessories complement, and, in fact, enlarge the basic scheme of product diversity, personalizing the vehicle to the private owner, and, in the case of utility vehicles, adding to the task capabilities of the unit. Examples include lift kits, winches and a wide variety of custom body sets and tops. It is now possible to choose from a dizzying array of options, from the basic vehicle to all (and an ever growing body of) the bells and whistles. Thus, the information problem grows ever larger. How to handle it?
Role of the Internet in Organized
A recent study by automotive consulting company Polk, in collaboration with Nielson, the ratings company, came up with a number of findings that should resonate with small vehicle manufacturers of all stripes. The study involved finding out the degree to which consumers used the internet prior to purchasing an automobile. Among the key results garnered from 130,000 consumer participants were these:
- 78%, almost 4 in 5 consumers researched multiple brands over the internet;
- 64.9% of consumers primarily used third party sites, not tied to specific manufacturers;
- The typical consumer began research four months prior to purchase and continued through the month a new vehicle is purchased (our emphasis).
It’s not too much of a stretch to conclude that STOV purchasers follow a similar pattern of research. After all most, if not all, own automobiles, and following this practice with automobiles, would do the same for small, task-oriented vehicles.
What about third party sites for STOVs? The most comprehensive, among the few that are out there is www.smallvehicleresource.com. Yes, I am partnering in the development of this website, so my evaluation could be deemed self-serving, but check it out for yourself. Small Vehicle Resource, LLC is in the process of adding dealers to the site’s get-a-quote system and will be targeting the “hotbeds” of STOV usage in its upcoming marketing campaign. If you are a dealer, and have witnessed the internet-educated customer coming to your showroom, it would behoove you to look into third party websites that feature the vehicles you sell and judge whether participating in their services would benefit you.