The 2011 Chrysler 200 will be the first of the new-era models for the Chrysler, hot on the heels of the Jeep’s recently launched 2011 Grand Cherokee. The 200 is an extensive reworking of the outgoing Sebring. The name change and the magnitude of the redo come in part because the Sebring was never seen as being truly competitive in its segment.
To assess the baseline market conditions for the 200’s launch, Compete compared the current Sebring against segment leaders Hyundai Sonata, Honda Accord, Ford Fusion, and Toyota Camry. The comparison leverages Compete’s proprietary in-market automotive shopper metrics, which are based on unique consumers (i.e., no double-counting of consumers doing the same activity more than once in the same month). Those metrics in turn leverage Compete’s patented normalization technology. No one is expecting the Sebring to lead the set, but the gap between the Sebring and key rivals illustrates the lift the 200 will need to generate.
Baseline Shopper Volume: In October, Sebring had 2,200 in-market shoppers. In the same month segment stars Sonata, Accord, Camry and Fusion had on average over 9 times as many shoppers.
Goal: 200 will clearly need a huge bump in shopper volume compared to Sebring even to get on the radar.
Baseline Conversion: Sebring’s most recent conversion (the ability to convert shoppers into buyers) was mid-pack among the competitive set: 21.9%, while the set averaged 22.6%. Sonata conversion trailing the set is in some ways a good thing for Hyundai: it is the result of set-leading shopper volume combined with tight supply.
Goal: 200 will need to keep Sebring’s competitive conversion after launch but will need to do so using a rich mix of retail sales (conversion here is based on total sales; fleet sales make conversion artificially high). Healthy conversion also requires well-managed incentives and optimized stocks.
Baseline Reverse Cross-Shop: Sebring’s ability to capture the interest of among in-market shoppers of Sonata, Accord, Fusion and Camry is limited. Average Sebring reverse cross-shop results so far in 2010 peaked at 2% in July. That means in July an average of only 2% of Sonata, Accord, Fusion and Camry shoppers also shopped a Sebring.
Goal: Chrysler 200 reverse cross-shop levels will need to be much better and stay better. Once the launch passes, to some extent 200 will need to rely on strong rivals’ shoppers to generate shoppers for it, which includes launching models and established high-shopper-volume models. Launch example: Ad support as a rival launches creates more shoppers; if 200 is cemented in consumers’ minds as a desirable vehicle, some of the rival launch incremental shopper s will cross-shop 200, creating more 200 shoppers. A good reverse cross-shop target among 200 for these vehicles is 10-15%. For context, in October 18.6% of all Accord shoppers cross-shopped a Sonata and 15.3% cross-shopped a Camry (not shown).
So Compete will be looking for the following as we assess the Chrysler 200 launch:
• A ramp up in shopper volume high enough to meet sales goals
• Cost-effective launch ad spend (based on dollars spent per shopper generated)
• Solid shopper volume resonance once ad spend ends
• Launch-typical conversion patterns (lower at the onset, but improving over six
months or so to set-typical)
• Optimized use of any incentives throughout and after the launch period
• The ability of 200 to capture spillover demand from rivals’ launches
But the very best first step is to create launch Roadmaps to monitor the success of the launch. These are combinations of realistic shopper volumes and conversions that yield retail sales goals. Roadmaps set expectations and then allow Chrysler to quickly develop focused responses if the launch goes better than expected or worse than expected.
Lincoln Merrihew is the Vice President of Transportation at Millward Brown Digital. At Millward Brown Digital, Lincoln is responsible for steering the Transportation Team, which encompasses the automotive and travel practices. Before Lincoln joined the Millward Brown Digital team, he worked at TNS Custom leading the Automotive team, and then continued on there to lead business development for 10 different industry verticals. Lincoln's career aspiration is to create game-changing solutions and insights. Connect with Lincoln on LinkedIn.