LOUISVILLE, Ky. - As the industry battles a sluggish economy and numerous activities that vie for boaters' time and disposable income, five leading researchers Wednesday discussed how companies can best use market research to grow their business.
The four-hour session on the second day of the International BoatBuilders' Exhibition & Conference was led by Jim Petru, director of industry statistics and research for the National Marine Manufacturers Association. The panel consisted of Ron Hein of Foresight Research; Jack Ellis of Info-Link Technologies; Jerry Mona of Left Brain Marketing; Ed Mahoney of the Recreational Marine Research Center at Michigan State University; and Tom Walworth of Statistical Surveys.
The following is a synopsis of the session:
The recession's impact on consumer behavior
Although the "endearing qualities" of boating have not changed, the recession has greatly affected consumers' way of life, Mona said, adding that more than half of all Americans have seen their jobs affected by the recession.
And many baby boomers who considered buying a boat for their coming retirement are rethinking that plan.
Even when people believe the recession is over, Mona said, many plan to remain thrifty and are less likely to take on additional debt.
"The impact of the recession is widespread, much more than the 10 percent unemployment [rate]," he said.
About 60 percent of boaters are using their boats less, and "declining usage is often a precursor to defection," Mona said.
His advice to manufacturers: Know your customer, refine your products, have your value proposition, refine your target audience, refine your message, enhance your online presence, optimize your media spending and engage your customer to increase loyalty and product usage.
Marketing for today's realities
Mahoney says that as the boating industry begins to rebound, it's important that marketers don't return to old ways. The tactics of the 1980s and '90s won't work anymore.
Referring to the recession as a "his-cession," the economic downturn, he said, has given women more purchasing power and more decision-making power - a dramatic change the industry needs to embrace.
There are reduced expectations these days for the "good life," free time is scarcer for many people, diversity is the rule rather than the exception and the market continues to fragment - all of which affects marketing tactics.
Mahoney says marketing is increasingly confused with the latest technology: Using social media is not networking.
And, he stressed, the marketing person, not the sales manager or an ad agency, needs to drive a company's marketing plan.
Used boat market is an opportunity for growth
An average of 1 million recreational boats change hands each year, accounting for about $10 billion, and for every boat purchased new, three were bought used, Ellis said.
In 2009, used boats accounted for 82 percent of all sales and this year that figure could go higher. The last "normal" year was 2007 - about 73 percent of boat sales involved used boats.
Each year, about 900,000 people buy used boats and about half of those transactions occur between private parties, Ellis said.
"Only a handful of companies in our industry directly benefit from these transactions," he added. "We need to care."
Eighty-five percent of first-time buyers enter the market through a used boat and about one-third of used-boat buyers will purchase their next boat new. Used boat buyers are here to stay, Ellis stressed.
Manufacturers and dealers need to realize that owners must sell their old boat in order to buy a new one: Are there ways to help perpetuate these sales, Ellis asked. Is there an opportunity to profitably sell your product more than once, gaining the loyalty of two customers?
The auto industry has programs to help consumers: Can any of these be adapted to fit the marine industry, Ellis asked.
Results from 2010 study
Hein's study looks at what influences buyers and how segments of the industry (aluminum, pontoon, PWC, etc.) are affected.
About 3,300 people who bought boats between January 2009 and August 2010 were surveyed. The report also collected information about gender, age, education and previous boat ownership. Seventy-four percent of respondents said they had grown up boating.
Hein says the study found that in the 12 months prior to buying a boat, 84 percent had done research on the Internet, 75 percent had received advice from people they knew, 64 percent read boating magazines and 57 percent attended boat shows.
The survey also found that 15 percent discussed boats on social networks, with Facebook being the primary site they visited.
First-time buyers, he says, use an average of five sources in making their decision.
Hein says marketing managers can use this information, and much more from his survey, to determine the best ways to push their company's message.
— Beth Rosenberg