“A good product with good distribution will beat a great product with bad distribution”. Every business school student must have heard a variant to the quoted statement at one point or another. Distribution is indeed king, especially when you have a competitive product in the market. By distribution here, it could loosely mean but not limited to; sales, events, public relations, advertising, corporate social responsibility (CSR), marketing and so on. Distribution entails removal of existing and perceived hurdles preventing a potential customer from making a purchase of a product or service. A dead phoneline, an incorrect email address and outdated price list can discourage a prospect from writing that cheque.
Car sales is not exempt from these business principles. In the past before the advent of the internet, to sell a car, all you needed to get going were a regulatory license, an incorporated entity recognized by law, a manufacturing/assembly plant, showroom to sell the ready products and of course, workers manning the production lines while ensuring the cars are black in colour. But the internet has changed all these and shortened the sales process. Prior to the Covid outbreak, only 2% of car sales process were initiated online compared to current rate of 30%.
Innoson Motors, one of Nigeria’s indigenous car assemblers, has grown from a company that started from motorcycle importation and assembly to a successful transition to its current business model. It has, in the past decade seen its clientele grow from private individuals, corporates, state governments, Nigeria’s military and agencies and other African governments. These are remarkable feats for a company operating in a challenging economic environment with little to no state but self-provided infrastructure.
A Revamped, Befitting Website
With the baby boomers gradually leaving the stage and become sedentary with retirement and replaced in the purchasing order by millennials and Gen Z, the demand demography for car ownership has shifted. Today, a website is essential. It is a gateway to a business. It is part of an organization’s sales tool and efforts. It introduces the business and answers the questions in the mind of the customer.
In recent times, there have been frustrations especially on social media on the user experience of the company’s website and the unavailability of respective car prices. While it is understood that this could be a business decision influenced by fluctuating exchange rate and perhaps competitor monitoring, the downsides outweigh the logic of this decision. One of which is conflicting information. Carmart for example, has an estimated price list of Innoson’s cars but with erroneous 5% Value Added Tax (VAT) instead of 7.5%. Still on our search, we found a 2023 price list on Tekedia. We couldn’t ascertain the accuracy and recency.
A visit to Tesla’s website and its flagship salon car Model S and Innoson’s IVM Caris provides a few insights. The Tesla website gives a detailed overview of each car, price, option for a demo drive for undecided prospects and seamless payment option all on the website. It goes further to pitch ancillary items like chargers and roof racks with their respective prices. In a price-sensitive and impatient business environment with a shrinking disposable income like Nigeria’s, Innoson’s effort should be directed at eliminating these discouraging factors at making a buying decision.
Photo Source: www.tesla.com
Accessible and Well-Publicized Vehicle Financing
We understand there is a vehicle financing partnership between Innoson and Access Bank, according to the company’s website. However, we believe the process to access this financing product could be better. According to the website, one has to call the financing institution or walk in to open an account and then, call the car company for an invoice before making payment for a percentage of the total payment. This is rigorous and can be streamlined. How about a linked or embedded form on the website filled out and submitted with a few clicks of the button with the support of a dedicated team onboarding these prospects? Still on this, Innoson could expand the pool of companies including but not limited to startups, open to vehicle financing for employees with negotiated monthly deductions from employees’ salaries.
Auto Shows, Distributorships, Showrooms and Test Drives
A showroom in the commercial capital of each region coupled with distributorships will go a long way to bring Innoson closer to customers. A loved and mass market product is accessible unless it is B2B facing. A failure to do this creates the perception of luxury, scarcity and pricey even to a willing and able buyer. This only serves the competitors expanding their respective market shares.
Arms manufacturers, car makers and fashion businesses have all mastered the use of shows to sell. It is psychological and enhances trust-building. That thrilling feeling of how the clothes fit on you, with a fitting room equipped with mirror leaves the customer with a buying decision to make. This shortens the buying decision process. Innoson could glean some inspiration from this; a show room, an open ground for a brief test drive and a finance desk and team to close out a prospect. Saglev, an electric vehicle company recently had a test drive event and meet and greet with EV enthusiasts. We wrote about it here. It must be noted there have been marketing efforts like sponsorship of Big Brother Naija Reality Show and others.
Trade-In and Spare Parts
A nagging concern for intending customers of unpopular car brands is the availability of spare parts as the car experiences wear and tear. After the concern of affordability and durability is passed by an indigenous car brand, availability of spares remains the major hurdle before making a buying decision. An edge established car brands like the Toyotas and Hondas have over new entrants is not just the availability of spare parts but the possibility to switch parts between parts between car brands. A Honda Pilot can easily source spares from an Acura MDX. This compatibility if successfully addressed would improve Innoson’s appeal and this is case, it should be given much-needed publicity.
In this era of consumerism where customers are bound and loyal to a particular product, they tend to want a newer version of it. Time and time again, this business practice has helped companies maintain customer retention and loyalty. Ford Motors has an active trade-in program, its rival Toyota is not left out.
Despite the appeal of these propositions, we are not ignorant of the peculiarities of the market it operates in.
