BUSI 372 Week 6 Discussion Board Forum 3 Example

Discussion Board Forum 3: Marketing New Technology

BUSI 372 Marketing and Sales, Discussion Board Forum 3 Thread and Replies

Thread by [Student Name]

The forum prompt and the classmates' threads are composites; the research cited is real.

In my view, dealers can do the most to sell electric vehicles by addressing two barriers they can actually influence, price and charging confidence, mainly through education on the sales floor.

Charging and vehicle sales depend on each other. Li et al. (2017) studied the U.S. electric vehicle market and found strong indirect network effects: more public charging stations increased electric vehicle sales, and more electric vehicles on the road attracted more charging stations. They estimated that subsidizing charging infrastructure could raise adoption more cost-effectively than subsidizing vehicle purchases. Springel (2021) reached a similar conclusion in Norway, finding that money spent on charging stations increased electric vehicle adoption more per dollar than consumer price subsidies did. For many buyers, the question is not whether they like the car but whether they can always charge it.

Price still matters, especially for buyers with tighter budgets. Muehlegger and Rapson (2022) studied a California program that offered larger incentives to lower- and middle-income buyers and found that the subsidies were largely passed through to those buyers and substantially increased their purchases of electric vehicles. Many buyers who could benefit from incentives do not know they qualify, and the rules change often, with federal credits, state rebates and utility programs each carrying their own conditions. A dealership that tracks those programs and helps customers claim them removes a barrier that advertising alone cannot touch. Leasing can also lower the monthly cost for buyers worried about battery life or resale value, since the leasing company carries that risk.

Three practices follow for a dealer. First, train salespeople to explain charging plainly: home charging options and costs, public charging along the customer's regular routes and how long charging takes. A map of nearby chargers is a stronger sales tool than any brochure, and a referral to a licensed electrician who installs home chargers can turn a hesitant buyer into a confident one. Second, present total cost of ownership, including fuel savings, lower maintenance and any federal, state or utility incentives the buyer qualifies for, so the comparison is not limited to sticker price, which is where electric models usually look worst. Third, offer longer test drives or overnight loans, because confidence comes from experience. A buyer who charges the car at home overnight and drives a normal commute learns more than any explanation can teach, and many hesitant buyers discover that their daily driving uses only a fraction of the vehicle's range.

Dealers that treat electric vehicles as a product to explain, not just to sell, will be best prepared as more models arrive. The same skills, patient explanation, honest cost comparisons and follow-up after delivery, will serve the store with every new technology that follows.

Reply to Hannah

Hannah, your thread noted that customers often know more about electric vehicles than the salespeople do, and that observation matters more than it might first appear, because trust is the product a salesperson really sells. Research on the sales process suggests that salespeople's knowledge and incentives shape what buyers choose. Li et al. (2017) showed that charging access is central to adoption decisions, so a salesperson who cannot answer charging questions leaves the buyer's biggest concern unresolved. Zettelmeyer et al. (2006) found that the internet gave buyers price information that changed negotiations; electric vehicle shoppers often arrive with the same kind of research, and a poorly informed salesperson loses credibility quickly, sometimes before the test drive even begins.

That suggests dealers should invest in specialist training rather than expecting every salesperson to learn on the job, perhaps designating product specialists for electric vehicles who are paid on satisfaction and product knowledge rather than gross profit alone. Manufacturers sometimes require such training to sell their electric models, but dealers can go further, for example by holding evening clinics where owners and prospective buyers ask questions together, which also builds the store's reputation as the local source of reliable information.

A salesperson who drives an electric vehicle personally will answer questions with more confidence than one who has only read the brochure, and customers can tell the difference within minutes. Do you think dealers should provide electric demonstrators for salespeople to drive daily, and would the cost be justified by higher sales?

Reply to Isaiah

Isaiah, your thread made a strong case for marketing electric vehicles aggressively, and your point about local utility incentives was useful, since many buyers never hear about them from anyone else. I would add that the service department will also feel the change. Electric vehicles have fewer routine maintenance needs, such as oil changes, which have long brought customers back to the dealership every few months and given advisers a chance to recommend other work. Bolton et al. (2000) found that service experiences strongly influence whether customers stay with a firm, so fewer service visits mean fewer chances to build the relationship.

Dealers may need to replace routine visits with other reasons for customers to come in or stay in touch, such as software update appointments, tire and brake service, battery health checks and seasonal inspections that give advisers a reason to call. Springel (2021) showed how important charging infrastructure is to adoption, which suggests another opportunity: installing public chargers at the dealership brings electric vehicle drivers onto the property regularly. A driver who charges at the store for thirty minutes is a natural customer for a quick inspection, an accessory or a conversation about the next vehicle.

The sales and service departments will have to plan together, sharing information about which electric vehicle owners have not visited in a year. Do you think a dealership's fixed operations can stay as profitable as electric vehicles become more common, or will dealers need new sources of service revenue, such as collision repair or accessories?

References

Bolton, R. N., Kannan, P. K., & Bramlett, M. D. (2000). Implications of loyalty program membership and service experiences for customer retention and value. Journal of the Academy of Marketing Science, 28(1), 95-108. https://doi.org/10.1177/0092070300281009

Li, S., Tong, L., Xing, J., & Zhou, Y. (2017). The market for electric vehicles: Indirect network effects and policy design. Journal of the Association of Environmental and Resource Economists, 4(1), 89-133. https://doi.org/10.1086/689702

Muehlegger, E., & Rapson, D. S. (2022). Subsidizing low- and middle-income adoption of electric vehicles: Quasi-experimental evidence from California. Journal of Public Economics, 216, Article 104752. https://doi.org/10.1016/j.jpubeco.2022.104752

Springel, K. (2021). Network externality and subsidy structure in two-sided markets: Evidence from electric vehicle incentives. American Economic Journal: Economic Policy, 13(4), 393-432. https://doi.org/10.1257/pol.20190131

Zettelmeyer, F., Scott Morton, F., & Silva-Risso, J. (2006). How the internet lowers prices: Evidence from matched survey and automobile transaction data. Journal of Marketing Research, 43(2), 168-181. https://doi.org/10.1509/jmkr.43.2.168