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Including Socioeconomic Drivers in Strategic PlanningThe Problem: What Are the Impacts of Socioeconomic Drivers on Motorbike Segments?A major manufacturer of motorcycles traditionally based its strategic planning and budget processes on expected consumer preferences, as well as on technology developments and competitor behavior. Management realized that other drivers impact the demand for motorbikes, and that it needed to measure that impact. Demographic, sociological, and economic drivers needed to be analyzed. Our Approach: Identify Drivers and Quantify Elasticity by Segment Global Insight integrated client data on motorbike registrations with its own databases. The motorbike market in each of the five largest European countries was split into between two and six major segments, consistent with the client's market segmentation. For each segment, in each country, Global Insight built econometric models to test which were the relevant socioeconomic drivers, including age cohorts (the population cohorts relevant for each segment were weighted by sales and by gender), number of new models launched, relative prices (with prices in each segment weighted by sales), weather, disposable income, unemployment, interest rates, consumption for entertainment, etc.  Global Insight's models identified and quantified the robust impact of socioeconomic drivers on each motorbike segment in each country. In general, the weighted demographic index, real income per household, and unemployment rates proved to be relevant for all segments, while more specific drivers, such as number of models, were appropriate where more granular segmentation was analyzed. |
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