files GM Chevy Volt Ipsos For More Information, Contact: John Kiser Direct: Main:

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1 Ipsos files GM Chevy Volt For More Information, Contact: John Kiser Direct: Main: May 2011 Predicting the Business Impact of Marketing Decisions

2 Performance Summary GM s Chevy Volt is a hybrid electric-gas automobile for sale in the United States. A $7,500 tax credit is offered to those who purchase the $40,000 vehicle. Designed to run solely on electrical power (via rechargeable lithiumion battery) for the first 40 miles of a journey, the car is also equipped with a gasoline-powered engine to extend the 40-mile battery range for longer trips. The Volt generates a strong profile, with at least average performance on nearly every consumer metric, yielding an above-average Market Success Score. The technical details of the Volt s two power sources did not appear too cumbersome for consumers to understand, as they were the statements most frequently cited as purchase drivers. As a result of this strong performance, the Volt earns an above-average Market Success Score as well as Top 20% Message Power and Buzz Power scores. Source: Ipsos Vantis Files 2

3 Key Findings Market Potential Key Market Segments GM s Chevy Volt exhibits solid market potential. Its average Market Success Score was driven by aboveaverage value, liking and uniqueness ratings, though was limited by low perceived need and only average purchase intent. Nonetheless, these are encouraging results for a high-ticket, long purchase cycle product. Likely purchasers have a strong internet presence, particularly in gaming and entertainment streaming. Demographically, they are young (<35), have kids at home, and live in rural area apartments. Communications Overview Critical Success Factors The initiative benefits from strong (Top 20%) Message Power and Buzz Power scores. The copy points most highlighted as purchase drivers appeared towards the end of the concept and reflected the technical details of the Volt s power sources. While it is encouraging that these copy points were not too sophisticated for consumers to understand, there exists an opportunity for further optimization by moving these ideas earlier in the concept for better attention-grabbing. GM and Chevrolet in particular may need to play a role to educate consumers and generate need for an electric-hybrid vehicle, however given rapidly rising fuel prices, this may happen organically. Side-by-side comparisons versus other fuel-efficient (gas-powered) vehicles may help facilitate this. At $40K, the Chevy Volt competes with some entry-level luxury vehicles. GM will need to prepare marketing materials which emphasize the Volt s design aesthetics, comfort and overall feeling in order to be considered a strong contender in this price range Ipsos Vantis Files 3

4 Vantis Files Scores Explained Market Success Score The Market Success Score (MSS) is a calculation of the probability of success in market. MSS relies on Vantis forecasting background; specifically its ability to convert survey claims to true estimates of demand. A high MSS indicates mass potential in the market. Concepts in the top third on this measure have a 70% success rate when launched. A MSS in the middle requires more analysis. We look for hidden winners in this section niche or targeted products and breakthroughs (see Key Measure Scorecard below for more information). Most concepts with a low MSS are not ready for advancing without some improvement, typically in the messaging. Key Measure Scorecard Ipsos Vantis owns the world s largest database of new concept scores in technology, durable goods, health, and services sectors. Key survey measures for a concept are compared to survey norms for a relevant subset of new products from the Vantis Database. The pattern of the scores across the scorecard is as important as the overall strength of the scores. There are two dozen new product archetypes patterns of survey scores -- into which every new product can be classified. Some of the biggest opportunities often go missed because they have lower purchase intent, and reside in the middle of the pack. The key measure scorecard will find the obvious winners, and will distinguish between truly Average ideas that should not be pursued and Breakthrough or Niche ideas with enormous potential. Key Consumer Segments Vantis Files utilize the standardized Vantis Express survey that includes demographics, shopping and media habits. The summary is meant to give a top-line understanding of the consumer target which is essential to market success and also provides the framework for the market size (right product : right audience rather than wrong product : wrong audience). Message Power Score Message Power scores the ability to execute the message in mass marketing. A high score vs. the norm results when one or a few clear, differentiated benefits are present. An offer with high Message Power Score will be very responsive to advertising spend. Thus, seeing heavy spend is a signal of an uptick in business trajectory. Buzz Power Score Some products are more likely to be discussed, even hyped by faithful buyers. Buzz Power indicates how much word-of-mouth (buzz) a new product will generate. Buzz Power links directly to demand potential, whereby high buzz scores translate to incremental awareness in the market. Breakthrough products will generally have high potential here. Critical Success Factors Phrase-by-phrase analysis, indicating why consumers will buy. This analysis, based on a concept highlighter exercise, identifies key message components that motivate the target audience. Top 5 Phrases This elevator test identifies the 5 most important parts of the message - phrases that A) reach the consumer and B) persuade them. Reach is calculated using the click rate for each phrase in the concept highlighter exercise. Persuasion is derived by correlating the click rate (reach) with the key measure scorecard Ipsos Vantis Files 4

5 Vantis Scores Market Performance Indicators The Chevy Volt generates solid performance in terms of consumer metrics, with most placing at least average versus the Vantis database. Despite its high sticker price, the Volt s value rating was above average along with liking and especially uniqueness. Consumer interest was average, while need fulfillment was the only measure to place below average. As a result, the Chevy Volt s performance yields a Market Success Score that is average, indicating a relatively good possibility of a successful launch. Market Success Score MSS Interpretation: Determine If Hidden Winner Key Measure Scorecard Seek Information (Top Two Box %) Purchase Intent (Top Box %) Purchase Intent (Top Two Box %) Liking (Mean 6-Point Scale) Price/Value (Mean 5-Point Scale) Uniqueness (Mean 5-Point Scale) Believability (Top Box%) Need Fulfillment (Top Two Box %) Raw Score 50% 6% 23% % 29% Bottom 20% Vantis Database Ranking Below Avg. Average Above Avg. Top 20% Although the Vantis Database consists of over 20,000 product evaluations, the scores of this study were compared to a subset of approximately 536 similarly priced products Ipsos Vantis Files 5

6 Key Market Segments (1 of 2) Likely buyers of the Chevy Volt tend to be young (<35) and exhibit typical characteristics of younger consumers: they have kids at home (mostly between the ages of 6 and 12), live in apartments, watch news parodies and late-night talk shows, watch movies online, and participate in online gaming. Other noteworthy distinctions include a more rural lifestyle, and the fact that the Chevy Volt appealed to African American and Hispanic consumers Ipsos Vantis Files 6

7 Key Market Segments (2 of 2) Likely buyers of the Chevy Volt tend to be young (<35) and exhibit typical characteristics of younger consumers: they have kids at home (mostly between the ages of 6 and 12), live in apartments, watch news parodies and late-night talk shows, watch movies online, and participate in online gaming. Other noteworthy distinctions include a more rural lifestyle, and the fact that the Chevy Volt appealed to African American and Hispanic consumers Ipsos Vantis Files 7

8 Communications Overview The Top 5 analysis identifies those phrases that had the greatest impact and are correlated with purchase intent. For the Chevy Volt, the most impactful phrases mainly appeared in the latter half of the copy, suggesting potential for greater attention-grabbing if some of these ideas can be incorporated earlier in the copy, or even made into a headline Nonetheless, the concept generated a Top 20% Message Power Score, which is indicative of strength of advertising. The Chevy Volt also earned a Top 20% Buzz Power Score, which means it has strong potential to generate organic word-of-mouth awareness. This is a function of consumers general acceptance of the product, as well as their deep use of the internet. Communications Indices Message Power Score Top 5 Phrases Rank 1 Phrase Vantis Database Ranking Bottom Below Above Top Average 20% Avg. Avg. 20% Unlike traditional electric cars, Chevy Volt has a revolutionary propulsion system that takes you beyond the power of the battery. Order in Concept 2 without a single drop of gas. 8 3 with a gasoline-powered, range-extending engine that drives a generator to provide electric power when you drive beyond the 40-mile battery range. 4 will use a lithium-ion battery 13 5 Buzz Power Score Chevy Volt is designed to move more than 75 percent of America's daily commuters 2011 Ipsos Vantis Files

9 Critical Success Factors Concept Highlighter (1 of 2) These two pages show the phrases in the order they appear in the Chevy Volt concept. Similar to the Top 5 Analysis, the copy points most highlighted as purchase drivers mostly appeared later in the concept and reflected the technical details of its efficiency ( revolutionary propulsion system, lithium ion battery, etc.). Extended Range Electric Vehicle 18% redefining the automotive world 17% no longer just a rumor. 20% In fact, its propulsion system is so revolutionary, it's unlike any other vehicle or electric car that's ever been introduced. 9% And we're making this remarkable vision a reality, 4% one day you'll have the freedom to drive up to 40 miles gas-free. 4% Chevy Volt is designed to move more than 75 percent of America's daily commuters 9% without a single drop of gas. 21% 0% 20% 40% 60% 80% Reasons to Buy 2011 Ipsos Vantis Files 9

10 Critical Success Factors Concept Highlighter (2 of 2) These two pages show the phrases in the order they appear in the Chevy Volt concept. Similar to the Top 5 Analysis, the copy points most highlighted as purchase drivers mostly appeared later in the concept and reflected the technical details of its efficiency ( revolutionary propulsion system, lithium ion battery, etc.). That means for someone that drives less than 40 miles a day, 12% will use zero gas 8% produce zero emissions. 3% Unlike traditional electric cars, Chevy Volt has a revolutionary propulsion system that takes you beyond the power of the battery. 41% will use a lithium-ion battery 33% with a gasoline-powered, range-extending engine that drives a generator to provide electric power when you drive beyond the 40-mile battery range. 26% Launching % $40,000 minus $7,500 Tax Credit 13% 0% 20% 40% 60% 80% Reasons to Buy 2011 Ipsos Vantis Files 10

11 Essential Guidance For The GM Chevy Volt GM Chevy Volt GM should focus its marketing messages on the mechanics that yield the Volt s superior efficiency versus other automobiles. These messages resonated with consumers as reasons to purchase the car, demonstrating that they were not too technical to understand. Since need fulfillment ratings were below average, GM may need to work a bit harder to educate consumers as to why this new vehicle is the logical next step. Luckily, given rapidly rising fuel costs, this may not be too difficult and may even happen organically. GM could also include side-by-side comparisons versus other compact sedans, to demonstrate monthly and yearly fuel cost savings afforded by the Volt. To take full use of inbound marketing techniques, GM should: Steer the customers in the dealership towards the Volt, particularly those who fit the profile of likely buyers (young males; those inquiring online first). As this is an important initiative for GM as a whole, this marketing could even take place in non-chevrolet GM dealerships Ensure that reviews of the Volt are available in both online and offline literature; likely buyers tend to consult expert reviews as a source of information. Create more buzz by heavily promoting the Volt through GM-sponsored Twitter accounts, Facebook pages, and targeted landing pages around TV and movie streaming websites as well as gaming sites. Going forward, GM should: Emphasize the tax credit and cost savings, as well as design elements of the Volt: As an efficient sedan, the Volt competes with cars that are much lower priced, and the car s value will need to be adequately communicated. At the same time, the Volt s $40K price point places it in competition with entry-level luxury cars, a segment that Chevrolet is not particularly associated with. GM will need to emphasize the Volt s design and convenience features to enable competition with the luxury market. Source: Ipsos Vantis Files 11

12 Methodology Country Dates of Fieldwork Data Collection Method Concept Specs USA November 20, 2009 November 30, 2009 Online JPEG 1 pg Sample Size Sample Definition Exposure Method Length of Survey N=155 General population Internet access Sequential monadic survey 3 concepts per respondent Test concept exposure rotated to avoid order bias 15 minutes 2011 Ipsos Vantis Files 12

13 Questionnaire Details Key Measure Scorecard Seek Information Purchase/Sign-Up Intent Liking Price/Value Uniqueness Need Fulfillment Believability Which statement best describes how likely you would be to seek more information about the product/service? Response on a 5-Point Scale Definitely Would to Definitely Would Not Which statement best describes how you feel about buying/signing up for the product/service? Response on a 5-Point Scale Definitely Would to Definitely Would Not Buy How much do you think you would like or dislike the product/service? Response on a 6-Point Scale Like Extremely Well to Not Like at All Considering the price, how do you feel about the value of the product/service? Response on a 5-Point Scale Very Good Value to Very Poor Value How would you rate the product/service in terms of being new and different from other products currently available? Response on a 5-Point Scale Extremely New and Different to Not at All New and Different How well would the product/service solve a problem or fulfill a need for you? Response on a 5-Point Scale Definitely Would to Definitely Would Not Which statement best describes how you feel about the believability of the statements made about the product/service? Response on a 4-Point Scale Very Believable to Not at All Believable Buzz Power Agree/Disagree (5 pt scale) If I owned this product, I would want people to know I personally own it or use it I would tor tell friends and family about this I would recommend this to people I know I would search websites for consumer ratings, blogs, or more information about it This product will create a lot of excitement and will be talked about 2011 Ipsos Vantis Files 13

14 About Ipsos Vantis Predicting the Business Impact of Marketing Decisions Experience Ipsos Vantis is a world leader in forecasting and optimizing new products and services before they are introduced in market. Over the past 20 years Vantis has conducted 20,000 new product concept studies, and built the world s largest database of new product survey scores in technology, durable goods, health, and services sectors. Forecasting validation is an absolute necessity for the success of our business among corporate and institutional investor clients. Ipsos Vantis tracks its forecasts vs. market launches and has observed a high degree of accuracy: 80% of forecasts are within 20% of actual sales results Early stage concepts clearing the Vantis hurdles have a 70% success rate in-market Philosophy Forecasting validation is a necessity for our business in order to ensure the validity of the advice, but our attention is placed on delivering research that informs the right business decision. Every Ipsos Vantis study delivers results that depict business impact. Our unique point-of-difference in the market research community is the ability to translate survey data to business results. We report answers to business questions in terms that business partners can understand: Sales, Revenue, Probability of Success in Market. Vantis Files and the Vantis Philosophy Vantis Files serve several purposes. Independent evaluations of new, emerging, and newsworthy product and service offerings Monitoring a new product or service s ongoing market acceptance, buzz potential, and reach Competitive intelligence on new product and service offerings that you monitor Vantis Files are highly standardized, making it easy, fast, and affordable to review the results of our independent tests of new product and service offerings. Vantis Files are based upon the metric of Vantis Express, our succinct collection of powerful market-proven metrics that relate to the three major components of a new offering s success: demand potential, key consumer targets, and critical success factors. Vantis Files results, like our custom Vantis Express work, hold true to the philosophy of translating survey scores to business impact. Vantis Files detail the opportunity for a new product or service offering, leaving little doubt as to the strength of the new idea Ipsos Vantis Files 14