OnStar

1. OnStar Jeff Schoenle CSR 631 November 4, 2008

2. Topics • OnStar • Company Overview • Technology • Product Services • Consumer Behavior Theories • Theory • Marketing Strategies • Conclusion

3. Company Overview • Owned and operated by General Motors Corporation • OnStar services are optional on approximately 50 different GM vehicles • Chevy, Buick, Pontiac, GMC, Hummer, Saab, Cadillac, Saturn • Paired with Verizon Wireless cellular service • Can tie in OnStar service to your wireless plan • Formed in 1995 through partnership between GM, Hughes Electronics Corp., and Electronic Data Systems • Companies worked together in designing software and hardware in order to bring the OnStar service online

4. Technology • Works with GPS and cellular communication technology • Cellular antenna is located in vehicle • Sends signal to OnStar Center • Can talk with representative at center 24/7/365 via microphone located in cabin • GPS determines location of the vehicle to aid in response • Three Button System • White button on left controls hands-free calls • If You Need To Make An Important Phone Call • Blue button in middle connects you with an OnStar representative • Red button on right signals an emergency

5. Product Services • Vehicle Diagnostics • Monthly reports on your vehicle’s diagnostics • Reports available on demand • Turn-By-Turn Navigation • Voice-guided directions from one location to a destination • Automatic Airbag Deployment Response • Representative will try to contact you in vehicle if airbags deploy • Emergency Services • Can notify emergency services if accident occurs • Crisis Assist • Can help you in case of poor weather or natural disaster • Stolen Vehicle Assistance • Can help locate your vehicle if stolen • Stolen Vehicle Slowdown Technology • Remote Door Unlock • Locking keys in your car • Roadside Assistance • Flat tire, out of gas, blown engine – NO PROBLEM! • Accident Assist • For fender benders

6. Product Services (cont.) • Ride Assist • Can help you find a ride if you are unable to drive • If This Looks Like You • Information/Convenience Services • Hotel or restaurant recommendations • Remote Horn and Lights • Locate your vehicle if you forgot where you parked it • Virtual Advisor • Local traffic and weather, stock updates • Driving Directions • Connect with a real person for directions to your destination

7. Marketing Strategies • Target Market • Car owners/buyers or prospective car owners/buyers • On-the-go population • Families • Working adults • Sales reps • Travel enthusiasts • Those taking long or frequent trips • Impacts of Consumer Behavioral Traits • Want to feel secure • Want to feel like part of community • Want to feel important • Want to feel like they are receiving more value than they are giving up • Cost/Benefit basis

8. Marketing Strategies • Possible New Markets • Small businesses • Pizza/Food delivery • Package Delivery Services • Possibly work with computer companies to develop transitional software for these businesses • Other Car Companies • Currently only available on GM vehicles • Sell services to competitors • Reduce Cost • Price currently set at $18.95/month or $199/year • Affordability • Luxury Item • Economic Troubles

9. Consumer Behavior Theory • Consumer Value • Consumer value is defined as an interactive relativistic preference experience (Hilliard 1950) • These four aspects are interrelated • Each aspect can influence the others • Interactive • Involves an interaction between the consumer and the product • Relativistic • Consumer value is comparative, personal, and situational • “It was nice, but just wasn’t for me. I suppose it would be good for people who get in accidents or get lost easily or have car problems, but it wasn’t for me and wasn’t worth the price.” – Shelley Poznic (Portage, IN) • Preference • Consumers have preferences based on value judgments • Experience • Consumer value resides in the consumption experience

10. Consumer Value • Extrinsic vs. Intrinsic • Receive value from consumption results, achievement of goals • Receive value from the act of consuming • Self-Oriented vs. Other-Oriented • Value the consumption for the benefit it gives to yourself • Value the consumption for the benefit it gives to another party • Active vs. Reactive • A physical or mental interaction with the object or product • Responding to something done or caused by the object or product

11. What Do You Think? • What category (categories) do you believe OnStar will fit into?

12. My Thoughts • Efficiency • Convenient one touch buttons • Hands free dialing • Directions to get you where you need to go quicker • Notices about traffic and weather • Diagnostic checks on vehicle condition • Excellence • Can give you hotel and restaurant recommendations • Search for quality • Spirituality • Stolen Vehicle Slowdown • Emergency Assist • Feeling of safety and security for family or other passengers

13. Conclusions • OnStar is classic example of the aspects of consumer value • May also be viewed using consumer choice theory • Against competitors or similar products (TomTom)

14. Sources • Information about OnStar can be found at the OnStar website or on the General Motors website • Information pertaining to Consumer Value was found in the article “Consumer Value: A Framework for Analysis and Research”; Morris B. Holbrook, 1999.