How do car companies incentivize consumers to purchase their cars?

Source: https://auto.howstuffworks.com

The economic principle I examined was people respond to incentives in predictable ways.  There are many situations where this economic principle can be applied to the real world. For instance, while studying how car companies incentivize consumers to purchase their products, I found many examples of this principle.

First,car companies use focus groups  to determine what consumers want in a car. A focus group is a small, random group of diverse people that are studied to adjust or perfect products based on their opinions. They meet face-to-face with consumers to discuss what they, and others, want in a car. This shows how car companies reach out to their consumers in order to maximize the incentive to purchase one of their cars.

Second, car companies use statistics to determine their horizon. They note the top selling car types in certain domains then use that info to distribute those cars to that domain. For example, all-wheel drive in snowy climates, or SUVs in rugged-mountain terrain. This demonstrates that car companies read through statistics to calculate what cars are most common and will sell best in certain climates and terrains.

Third, car companies use a complex process to develop new features. This means that, since it can take years to develop a new feature, car companies must predict the ideal car 5 years in advance. Once they predict several prototypes, they get to work on the development process. To summarize the process, it is basically a complex and lengthy trial and error process.

Overall, you can see that car companies have a variety of methods to incentivize their consumers to purchase their cars. These methods range from statistics all the way to meeting consumers face-to-face.