220 Part 4 Customer Behavior

convenient. One lesson Travelocity learned was that cus-

tomers don't always remember their passwords. To coun-
teract this problem, Travelocity changed the system so
that customers could reenter an address or e-mail address
and use those details to access their personal profile rather
than relying on a password. Thanks to this change, rev-
enues quickly rose by 10 percent. Watch for more
changes ahead as Travelocity finds new ways to satisfy its
customers and new places for its Gnome to visit.z
9
Questions for Discussion
How does the Travelocity Guarantee give Traveloc-
ity a competitive advantage in various stages of the
consumer buying decision process?
What is Travelocity doing to influence consumer
perceptions of and attitudes toward its product
offerings?
3. What are the major situational influences that affect
Travelocity customers' buying decisions? Explain.
A
AutoTrader.com Fuels Online Auto BuY in g
utoTrader.corn operates the largest virtual used-
car lot in the United States. Founded in 19 9 7, this
fast-growing company has accelerated beyond
competitors eBay and cars.com to capture a dominant
share of the online used-car market. At any one time, the
Auto Trader website (wwwcautotrader.com) features clas-
sified ads for more than 3 million cars, both new and
used. Buyers and sellers make contact through the site to
negotiate the final terms for purchases. Today Auto
Trader's customers can choose from vehicles offered by
40,000 dealers and 250,000 individuals across the United
States.
When Auto Trader first opened its online business,
few people had ever bought or sold a vehicle on the
Internet. Therefore, the company's initial challenge was
to change the habits of consumers and dealers who
were accustomed to using newspaper classified adver-
tising for used-car transactions. Instead of charging
dealers for every listing, as newspapers did, Auto
Trader decided to set a flat monthly fee for posting any.
number of descriptions and photos. Because dealers did
not have to pay separately for every car listed, they
could afford to post information about every vehicle in
their inventories.
As more dealers signed up and listed cars for sale,
the website . became more attractive to consumers who
wanted to choose from a large selection of vehicles.
However, the company still had to educate its primary
target market, 25- to 49 -year-old men, about an unfa-
ar buying process. Auto Trader's solution was to
run informative television commercials showing step
by step how to use its site. Its policy of charging buyers
no fee to browse or buy was a plus. Soon the site was
drawing more than 5.5 million visitors every month.
Next, Auto Trader targeted a slightly younger seg-
ment of 18- to 24-year-olds because research showed
that these first-time buyers account for a significant
percentage of used-car purchasers. The company hired
a video game specialist to adapt the look of its fast-
paced television commercials to an online promotion
titled "Slide into Your Ride." Players earned prizes for
correctly lining up three cars by matching their colors
and were entered in a sweepstakes to win a $25,000
Auto Trader shopping spree and other prizes.
Knowing that students typically search for used cars
before heading off for college in the fall, Auto Trader
scheduled this promotional game for August and
September. The company placed banner ads on popu-
lar websites and sent e-mail announcements to its
online newsletter subscribers, as well as to people on
a Sports Illustrated list. Although this promotion cost
$1 million, it was a good investment because it raised
brand awareness and drew an additional 500,000 visi-
tors to the site during the first month alone.
More than half the visitors who played the game
were women, and about one-third of the players were
in the 18- to 24-year-old age group. More than 60 per-
cent of the players signed up to receive Auto Trader's
monthly online newsletter, enabling the company to
continue building relationships with these potential
buyers. Equally important, several hundred thousand
players searched for used cars on the Auto Trader site
during the promotional period.
Meanwhile, Auto Trader noticed that online auc-
tions were becoming more popular. At one time it
cooperated with eBay, the world's best-known auction
site, to link the two sites so consumers could search for
cars on either one. After monitoring buyer behavior for
Chapter 7 Consumer Buying Behavior 221
two years, Auto Trader ended the agreement and cre-
ated its own vehicle auction operation, going into direct
competition with eBay. "We did a lot of research and
studied very closely the behavior of auction style users
on our site," says Chip Perry, Auto Trader's CEO. He
acknowledges that eBay is the "current major player in
an extremely small niche segment of the car business."
At the same time, he sees plenty of room for Auto
Trader to profitably serve customers in this $2 billion
market segment.
As its annual vehicle sales accelerate past $100 million,
Auto Trader is not putting on the brakes. The company
continues to reinforce brand recognition through televi-
sion advertising, especially during the weeks leading
to the busy fall buying season. And it constantly intro-
duces new features to draw new visitors and serve the
nearly 10 million qualified buyers who use the site every
month to check the listings, compare prices, and buy or
bid on vehicles. The firm's success can be measured in
part by its number 1 rank in J. D. Powers & Associates
satisfaction survey of new- and used-vehicle dealers."
Questions for DISCUSSION
In what ways has Auto Trader helped potential car
buyers learn how to bily cars online?
In which stage of the consumer buying decision pro-
cess would Auto Trader's television commercials be
most likely to influence potential car buyers to use
Auto Trader's website? Why?
3. Why is it important for Auto Trader to influence
first-time buyers' perceptions of its site through
online promotions such as "Slide into Your Ride".