Assessing Customer Willingness to Pay for Vehicle Subscription Services

The automotive world is transforming to not only focus on vehicle hardware, but also software. Vehicles now come equipped with high-tech systems offering a variety of possible subscription services from music streaming and maps to crash detection and exterior cameras. As possibilities emerge for the...

Full description

Saved in:
Bibliographic Details
Published inIISE Annual Conference. Proceedings pp. 1 - 6
Main Authors Domagalski, Rachel, Keenan, Philip, Owen, Jon, Schmitter, Kurt, Wu-Smith, Peiling
Format Journal Article
LanguageEnglish
Published Norcross Institute of Industrial and Systems Engineers (IISE) 01.01.2023
Subjects
Automobile industry
Automobiles
Consumers
Customer services
Customers
Market penetration
Market strategy
Net present value
Preferences
Prices
Subscriptions
Vehicles
Willingness to pay
Online AccessGet full text

Cover

More Information
Summary:The automotive world is transforming to not only focus on vehicle hardware, but also software. Vehicles now come equipped with high-tech systems offering a variety of possible subscription services from music streaming and maps to crash detection and exterior cameras. As possibilities emerge for these extra add-on amenities, automakers must decide which services to offer, at what prices and payment terms, and in which combinations. In this study, we utilize market research conjoint studies and discrete choice modeling to predict optimal go-to-market strategies for subscription services. We analyze customer preferred payment terms and bundling approaches that maximize revenue and sales.
DOI:10.21872/2023IISE_2485