Infegy and Phoenix Marketing International Release “The Impact of Automotive Recalls on Consumer Opinion” Report

KANSAS CITY, Mo. & RHINEBECK, N.Y.

Infegy, a provider of social media intelligence technology for marketing and research professionals, and Phoenix Marketing International (PMI), a leading market research firm, today released a report of “The Impact of Automotive Recalls on Consumer Opinion.” Combining traditional survey research with social media intelligence research, the report shows that while the impact on purchasing decisions is low, automotive manufacturers that issue recalls experience brand erosion. The full report can be downloaded here: http://store.phoenixmi.com/collections/all-products/products/the-impact-of-automotive-recalls-on-consumer-opinion.

Following a year of many major safety-related recalls from popular brands such as GM, Honda, Toyota, Ford, Nissan and BMW, this report aimed to understand how recalls affect consumer opinions of automotive brands. Findings suggested that while recalls have moderate effects on consumer perceptions of quality and desirability, the negative feedback lifecycle can last longer than six months.

One of the biggest recalls of 2014 was due to defective airbags supplied by manufacturer Takata, which affected almost 11 million vehicles from nearly every major car maker. While brands with higher number of recalls and multiple announcements received more negative attention, the most compelling finding is that the severity of impact to the overall brand was rather unpredictable.

Although Honda saw the biggest impact with more than five million cars recalled, year-over-year perceptions of quality for the models that were recalled remained flat. Furthermore, negative sentiment for Honda only increased by two points.

However, Mazda received the most attention in proportion to the number of cars recalled, with 13 mentions for every 50 cars. This was likely caused by Mazda’s handling of the recall, limiting it to the Southeast region because of humidity’s contribution to airbag failure. Mazda received lower scores on quality and sentiment than the other brands that did not limit recalls to the Southeast region.

“Manufacturers must go to great lengths to regain consumers’ trust when recalls occur,” said Dennis Syrkowski, President of Automotive for Phoenix Marketing International. “Simply recalling vehicles in specific areas of the country where the defects are most likely, even if justified, can have a big negative impact on the public’s quality perception and overall opinion of a particular manufacturer.”

Additional takeaways from the report:

• The impact of vehicle recalls is less on consumers who are currently in the vehicle buying cycle than among those who are not. This can help explain why there was little to no impact on new vehicle sales during 2014.
• Consumers shopping in the luxury vehicle segments were more aware of brand recalls, which could have implications for brands trying to attract this highly profitable market segment.
• Awareness of the wave of automotive recalls among consumers in the market for a new vehicle was relatively high, with between 50 and 60 percent of automotive consumers stating they were aware of the recalls between April and July.
• Consumers are becoming more aware of the role of suppliers in the design and assembly of critical vehicle components. This raises issues for manufacturers in handling recalls in a way that maintains consumer trust in their brands as well as key suppliers.

“Innovative and forward-thinking market researchers like PMI are integrating social media-based research to help inform survey questions, rapidly uncover consumer insights and augment focus groups,” said Rion Martin, marketing director at Infegy. “This report demonstrates just how well these methods can be combined to get even greater clarity.”

This report is unique in that it merged traditional and new methods of research, with PMI auditing consumers and Infegy analyzing consumer dialogue across the web. Both sets of data showed similar findings, demonstrating how social media intelligence can complement traditional research for real-time, accurate data.

Methodology:

PMI researched consumer reactions to more than 9,000 automotive ads. PMI’s Auto Audit is conducted continuously with consumers in the market for a new vehicle. The Auto Audit features an industry leading diagnostic model that goes beyond ad awareness and recall measures to help marketers understand key drivers of creative performance and in getting consumers to take action and engage with brands.

Infegy collected online data from social networks, blogs, news sites and community forums through its flagship product, Infegy Atlas, a next-generation analytics platform leveraging advanced algorithms to deliver brand and consumer insights in easily digestible stories and headlines.

About Infegy:

Infegy provides social media intelligence technology that empowers marketing and research professionals to quickly and accurately understand consumers. Its flagship product, Infegy Atlas, elevates consumer research beyond simple measurements and provides real-time answers by analyzing huge volumes of online dialog and commentary including target audiences, current trends, brand perception, purchase intent and competitive landscape. Powered by its proprietary linguistic analysis engine, the easy-to-use, cloud-based platform helps inform and customize market research, product research and development, sales pitches and forecasting, strategic planning, advertising campaigns and more. Founded in 2007, Infegy Atlas has been proven to offer the most sophisticated and accurate sentiment analysis in the market, with 93 percent accuracy and 97 percent recall. For more information, visit www.infegy.com or follow on Twitter @Infegy.

About Phoenix Marketing International

Phoenix Marketing International is a premier global marketing services firm providing its clients with tailored, unique insight into their customers and markets via a wealth of existing proprietary data. Coupled with custom research products and the latest qualitative and quantitative techniques, Phoenix has extensive research experience across the Automotive, Financial Services, Healthcare, Converged Technology and Media, Restaurant, and Travel/Leisure sectors. From the strategic definition of consumer needs to effective marketing program implementation, PMI provides profit-driven market solutions and is committed to maximizing a client’s Return on Marketing Investment (ROMI) by leveraging the ability to attract and retain new business through cost efficient data acquisition and statistical modeling techniques. Founded in 1999 by Chairman and CEO, Allen R. DeCotiis and President, Martha Rea, Phoenix Marketing International has established its global presence with offices in major locations such as New York, New Jersey, Boston, Philadelphia, Raleigh/Durham, Detroit, and London.

Photos/Multimedia Gallery Available: http://www.businesswire.com/multimedia/home/20150326005207/en/

Gabriel Marketing Group (for Infegy)
Michiko Morales, 571-455-9996
michim@gabrielmarketing.com
or
Phoenix Marketing International
Michael Volpatt, 415-994-8864
michael@larkinvolpatt.com