Consumers Will Pay More If Vehicle Audio Wears A Brand

A new study by J.D. Power & Associates suggests that automakers shouldn't ignore the trademark on the audio entertainment they put in new cars and trucks, especially if that equipment is premium.

The firm's new "U.S. Automotive Emerging Technologies Study," based on responses from more than 17,000 consumers in July, says branding gives a boost to the amount of money consumers are willing to pay for audio systems. But it also says certain in-vehicle technologies drop off the charts when consumers hear how much they cost.

Among consumers who indicate they are highly interested in having a premium surround-sound system in their next vehicle, more than 80% are willing to pay twice the average market price if the system wears a brand.

The study, which the firm says measures familiarity, interest and purchase intent for emerging automotive technologies, rates those parameters both before and after consumers are given a ballpark cost of the product.

Mike Marshall, director of automotive emerging technologies at the consultancy, says the firm organized the survey so that customers first got a brief description (and graphic) of a feature, and then were asked how interested they would be in the product. The next screen offered up prices, and they were asked again if they would purchase at the price given.



The study finds that the majority of consumers who are highly interested in premium surround-sound systems are willing to pay an average of $1,000 for a branded system--twice the suggested market price of $500.

Marshall says consumers were shown 24 brands of premium surround-sound brands with their brand trademarks. "I didn't expect over 80% of consumers to opt to pay more," says Marshall. "[By] doubling that price, you'd only lose one in five buyers [if the system was branded]. It was surprising because other than putting a brand on it, we didn't put any verbiage on it--didn't say it would be a better system."

The study suggests that 60% of consumers want audio devices capable of playing multiple formats. Half are winning to pay $100 for a USB connection, and 43% said they'd shell out $150 for an iPod jack.

Consumers' ages, perhaps not surprisingly, made a big difference in interest levels before price was revealed. "Younger consumers are more geared to entertainment and communications features, older consumers more to safety," Marshall says--adding that among younger consumers, slightly more males than females are interested in audio communications and entertainment systems.

This suggests that things have become less gender-defined since the 1970s, when in-car communications and machismo collided with the CB-radio fad and one-hit wonders like "Convoy."

On the consultancy's list of in-car tech products, run-flat tires, which cost about $600, garnered 77% interest, followed by two-stage smart airbags, a navigation system, premium surround-sound audio and active cornering headlight systems.

At the bottom of the list was in-vehicle Internet, even though respondents were told the monthly price is only around $15.

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