A Comparative Consumer Behaviour of Audi, BMW and Mercedes in Thailand and UK - Essay Example

Topic: A Comparative Consumer Behaviour of Audi, BMW and Mercedes in Thailand and UK Table of Contents Introduction and Aim................................................................................................................. 3 Methodology............................................................................................................................... 4 What we did................................................................................................................................ 4 What Went Wrong..................................................................................................................... 5 Summary of the Findings............................................................................................................ 5 Research into Luxury Automobiles............................................................................................ 5 Consumer Behaviour of Luxury Automobiles’ Clients.............................................................. 7 Luxury Automobiles’ Consumer Segmentation......................................................................... 8 Analysis..................................................................................................................................... 10 Thailand and the UK customer Perception of Luxury Automobiles......................................... 10 Directions of Market Performance............................................................................................. 10 Importance of the Luxury Automobile Characteristics in Influencing Consumer Behaviour... 13 The Importance of Social Influence on Client Behaviour.......................................................... 14 Conclusion.................................................................................................................................. 15 Work Cited................................................................................................................................. 16 Introduction and Aim The total, universal sales of finest richness and excess luxury saloons, as well as sports cars are approximately 1.5 million sections per years. In terms of trade scale, the key markets in the modern society are the USA, Germany, the UK and Japan. Research shows that ?21.1 billion UK automobile market is in constant conflict with France and Italy (Done, 57). This makes it the second biggest European country in the automobile market after Germany. The African continent also has a number of states that are rated among this trading in luxury cars, led by South Africa. However, limitations in sales are based on the total business area or by local market situations, in addition to customer preference. As such, the general prosperity car market is undergoing social change with luxury brands appearing less primitive, less diverse and more comprehensive with the state of being improving. Because of this, there is increased competition between different car brands resulting into brand identity. As a result of continuous improvement in the car products, the outward look of an automobile plays a significant role in influencing the consumers’ decisions. Premium marquees like BMW, Lexus and Mercedes-Benz should develop qualities and values that show transforming social attributes, which affect clients psychologically, so that they retain their profitability in the automobile industry. This paper will look at consumer behaviour differences between Thailand and the UK, considering three brands of cars (BMW, Audi, and Mercedes Benz). Methodology What we Did For purposes of defining clients’ sensitivity towards luxury automobiles, a set of ideas variables that potential consumers of wealth cars might need was developed with permission from car dealers (Audi, Jaguar, Mercedes, Lexus and Volvo). This was done at London Motor show ’97 at Earl’s Court Exhibition. As such, a number of variables were established including reliability, quality, durability, safety, security, performance, efficiency, technology, and handling among other variables. These variables were done within the objective category. However, variables like value, style, comfort, prestige, image and visual impact were done on the basic model of subjectivity. Notably, the different perceptions are directly in connection with various types of customer as cognition, feelings and reaction interest of consumers are organized into a series of stratified emotional reactions. The research methods included both primary and secondary data collection techniques. Direct interviews were conducted with potential clients as well as the manufacturers to determine consumer behaviour and preferences. In addition, questionnaires were distributed to customers after they had been informed of the ethical issues associated with the research being conducted. To minimise the possibilities of biased information, considerations were given across all classes of individuals in terms of social and economic status (Engel, Blackwell & Miniard, 1995). What Went Wrong Establishing clientele impression is one of the most challenging aspects during research. In the first place, the act of acquiring information from primary sources is entirely subjective. It all depends upon the customer point of view on the variables that were found by the research team. This in most cases is subject to biased information being collected. In addition, secondary data could not bring out the consistency in research ever done in the same field. The rationale behind inconsistencies is that lifestyles have changed over time. As a result, consumer behaviour has changed, as well. The secondary material would suggest at some point that it could not stand the test of time, and, therefore; further research using primary data is highly recommended. Summary of the Findings Research into Luxury Automobiles Research into the field of clients’ perception and performance has been initiated by American researchers. However, there is extremely little research that indicates examinations into customer view points about luxury cars (Done, 61). Most of the work has been focused on customer loyalty and brand switching. As such, many researchers have concerned themselves with cost segmentations in the Automobile industry, as opposed to the graving theme of extra segment. This has to do with free customer choice between brand image awareness and private selection of potential consumers, which play a key role in trade profitability (Bauer & Herrmann, 79). However, most companies overlook clients’ individual differences that offer differing perceptions towards the cars. The action is critical in influencing the purchasing choice of customers. This research proposes that automobile clients only look out for product-associated attributes. This implies that institutional, visible and outward appearance of the cars, as well as the utility matter in the choice of car. According to some researchers, demanders obtain a multitude of features as opposed to the products themselves. Still, it has been noted that this is not an objective quality since clients vary widely just like the automobile industry has a lot of cars in the market. Following subjectivity in the consumer behaviour, there is a difference between business-to-business consumers and retail car buyers. When business-to business is considered, knowledge is based on professionalism and practical benefits of the respective automobile. As a result, their use is typical based and institutional. Looking at the table below, Lexus GS300 cars were bought more as fleet cars as compared to BMW 728i from 1994 to 1995. On the other hand, 728i and GS300 have the same insurance benefit. GS300’s value is lower than that of the 728i. It possesses more demanding technical features: a huge engine, elevated horse power, faster acceleration, and higher top speed than the 728i (Done, 31). BMW 728i Lexus GS300 1993 1994 1995 1993 1994 1995 F NF F NF F NF F NF F NF F NF 391 4631 526 2559 55 11820 185 509 3122 421 5314 64122 For this reason, the Lexus GS300 is seen as providing better value for income in the workplace. On the other hand, customers at the retail level select BMW 728i as compared to the Lexus GS300. As such, the 728i has higher sales in total for the period mentioned above, in spite of the better approach and technological traits of the GS300. This is based on the fact that retail clients are amateur buyers who spend their personal funds for non-routine consumption. As such, they look forward to achieve experiential or significant benefits from the automobile type instead. This is a definite exposition of diversity among clients (Bauer & Herrmann, 22). Specificity in this case relies heavily on the buyer’s distinction between basic and requirements. Needs and wants affect how customers create their purchases. In case consumers consider meaning as implying essentially, then all additional features like speed, acceleration rate, horse power and the size of the machine become crucial in the investment decision making. Consumer Behaviour of Luxury Automobiles’ Clients Most modern luxury car owners tend to have bought a car in the previous years; the client has essentially developed an attitude towards the car (Done, 43). As such, the attitude becomes a critical judgment based on current or past experiences. For instance, the initial satisfaction from the sellers or the product affects the following purchases. In addition, experience and the socio-economic status may determine as to whether the consumer prefers the carriage of not. It is also anticipated that the attitude can be influenced based on the first information without necessarily having experienced, since the purchaser develops preferences or subjectivity for or against a type according to the portrayal of the label by other people who have had a record. The purchasing power of individual clients is vital in the analysis of consumer behaviour for purchases in the automobile industry. As much as a buyer may have a positive attitude towards the luxury car, he or she may lack the ability to own the cars following inadequate purchasing ability or desire to go into buying the car. For clients that have higher purchasing power, they tend to overlook low-luxury cars. This difference is because low income to moderate income earners may expect the condition of smaller sized automobiles of manufacturers from the lower sector. Good examples of such cars include the Fiat, Ford, Peugeot, and the Vauxhall. Such cars are more affordable to small income and average income earners (Engel, Blackwell & Miniard, 19). Contrary to this, high income earners will prefer high value cars from luxury marquees, and they may affect cheap cars from any organization of their choice. Similarly, in case a person is involved in predicting customer behaviour of grandeur cars, an assessment of potent user’s attitude towards the automobile is required. Luxury Automobiles’ Consumer Segmentation According to a wide range of reports done, psychology and other behavioural sciences on disposition have forced marketing researchers to measure personality traits under theories. This is done for testing label or store preferences. Early researchers in the field of customer performance based on automobiles used 12 variables that were neutral. Some of the variables included the auto age, income earned by the potential buyer, and other demographics, to substantiate the presumption that automobile clients differ in nature structure. This research was faulty as the researcher was not able to make appropriate tests of clients’ character in Ford or Chevrolet owners in about 70% of the cases done (Evans & Berman, 100). A conclusion drawn at this level was that nature is not indispensable in establishing automobile brand ownership (Engel, Blackwell & Miniard, 42). This was emphasized by other forms of research that there is no relationship between personality and product selection. This implies that character in just a single variable, in the broader process of consumer decision making. Other variables are significant in the establishment of decisions made by clients on which automobile result to search for. Accordingly, even though character could have made sense in decision making, it yet could not have contributed to customer segmentation. The inference being drawn is that sellers need to remember that people and their social need overhaul continually. It has long been established that most manufacturers ignore the details of consumers in their products and even bear the length of confronting them publicly (Evans & Berman, 51). This reduces consumer tendency towards a product. From the examination carried out on consumer perception, most of them were not acknowledgeable on some products. This was most intense in the automobile industry in which case a wide range of products had not become a flagship marquee. As such, they did not have enough information on the product they wanted. Time change has caused the automobile industry as well as clients to change. For instance in the 1990s, the period was marked by value driven consumers and suppliers. This time, clients were exposed to more mass media for information purposes as opposed to the earlier years. This offer data on the continually increasing brands so that competition among firms is high. Based on this fact, mainstream consumers become more sophisticated, and their capacity to distinguish between brands is increased. It is imperative that manufacturers and business owners in the automobile industry realise that client content is based on feelings. On the contrary, customer value is based on user behaviour (Engel, Blackwell & Miniard, 119). For purposes of establishing variations in consumer behaviour, in the automobile industry, the VALS II typology has been used. The typology is segmented into main categories: need-driven, outer-directed, inner-directed, and integrated. Within these four categories, there are nine lifestyles: survivors, sustainers, belongers, emulators, achievers, I-am-me, Experiential, and Societal-conscious. Following this approach, research revealed that most people buy used cars because of need-driven. This amounts to about 11%. The list moves on and on till the portion of achievers is 20% (Engel, Blackwell & Miniard, 141). They buy expensive cars like BMW and Mercedes to achieve their self actualization point. This data support the facts to an understanding of automobiles consumer category. As such, need-driven element is not likely to get brand-new cars as well as avoiding the high consumption cars. In addition, this gives room for marketers to communicate more efficiently with key clients, and this leads to efforts to organize other affluence cars in life divisions. This is better than the description localised on demographics. Analysis Thailand and the UK customer Perception of Luxury Automobiles Directions of Market Performance For purposes of comparison, a study between Thailand and the UK luxury automobiles’ user viewpoints, relative demand and supplies were done. Among the product released in Thailand and the UK in 1995 to 1997, it is notable in the sales functionality that Germany is the key country of origin. This gives the reason as to why Germany models are imported in Thailand and the UK which have a higher perception of opulence in cars. In the two states, Audi, BMW and Mercedes are the top most cars used for their luxury (Engel, Blackwell & Miniard, 99). This is evident in the figure below. 1997 1996 1995 1994 Market Share % 1997 Market Share % 1996 Market Share % 1995 Market Share % 1994 Audi 35524 30327 25555 22978 1.64 1.50 1.31 1.20 BMW 63734 56840 55034 45574 2.94 2.81 2.83 2.38 Jaguar 9507 8401 8727 6659 0.44 0.41 0.45 0.35 Lexus 25602 23267 24670 22127 1.18 1.15 1.27 1.16 Mercedes 42530 35813 32694 29186 1.96 1.77 1.68 1.52 Porsche 2333 1490 1139 1300 0.11 0.07 0.06 0.07 Rolls-Royce 878 638 493 460 0.04 0.03 0.03 0.02 From the table above, it is noted that Mercedes is the most expensive car as compared to the BMW in every division for the two states. However, BMW is more popular in the UK, whereas Mercedes is conventionally more popular in Thailand (Cohen & Basu, 28). This follows consumer perception based on their economic power and functionality for the same automobiles. From the economic perspective, clients from richer sides of the UK would prefer to purchase the Mercedes Benz as compared to poorer clients in Thailand. Contrary to this, the outperformance of Mercedes Benz in poorer sections of Thailand may be because of cultural diversity such as vulnerability to social impacts. This des not reveal itself as a new phenomenon in the automobile industry. A lot of research has been done in the field. It is revealed that country formed opinions have some level of influence on product examinations, and purchasing power decisions. This is particular to some brands in the automobile industry as well as the luxury field. In addition, clients may hold diverse perceptions to brand images and identity. The ultimate effect is in the individual consumer differences, decision making process and the service marketing strategy. At this level, psychological elements start playing a vital role in branding (Bauer & Herrmann, 117). The consumers from both countries have a wide range of products to choose. Still, the brands offer functional excellence and, other factors have to be considered in influencing the clientele perception. At one point, it is revealed that technology plays a significant role in influencing client behaviour to purchase the automobiles. The contrast is that cultural differences like upheld social values contribute largely on the choice of cars to buy. Most people at the upper stratum of economic structure prefer to get expensive cars for self-actualization. This gives enough reason as to why most people in the UK would prefer to purchase Mercedes and the BMW, as opposed to Audi. According to Keller (1993), the perception of these cars is based on brand awareness, and image as core factors to impact on customer behaviour. In the first component, of brand knowledge is linked to the brand associations, which comprise attitudes of price, packaging, usage imagery, benefits and other attitudes. On the other hand, consumers consider brand favourability and uniqueness of brand linkage. Importance of the Luxury Automobile Characteristics in Influencing Consumer Behaviour The first variables considered as objective in this study are quantitative attributes. As such, they can be evaluated through comparison of their standard specifications of the BMW and Mercedes. This is done in terms of economy, engine functionality, security, and safety dimensions among other factors (Engel, Blackwell & Miniard, 131). Price is imperative in decision making by consumers on which car to purchase. The table above reveals that both Thailand and UK, BMW automobiles provide lower prices as they have more formidable engines. As such, the cars have higher performance in terms of sales realized. Still, such marvellous, functional characteristics have not propelled the BMW to outweigh Mercedes in Thailand due to the cultural implication attached to the cars. In other words, benefits of automobiles caused by functions may not be efficient to characterise brand associations and hence, customer behaviour. This cannot persuade the opulence car clients to prefer them over the BMW brand name. This may be because BMW does not offer a favourable brand association viewpoint in terms of user perception, usage imagery as well as symbolic importance. These characteristics are, however, imperative for a wide range of opulent car consumers in Thailand (Engel, Blackwell & Miniard, 77). The Importance of Social Influence on Client Behaviour When we talk of imagery in the customer behaviour, this is the process through which mental information and experiences from past events are represented in the short-term memory (Cohen & Basu, 97). In this case, user perception and usage imagery be linked to the social class and economic status. The symbolic activity of wealth can be illustrated using the social constructionist theory. According to this theory, affluence is a socially shared symbol of identity. As a result, all consumers in the three luxury cars share, in the process of transmitting, replicating and changing the social implication attached to the cars. Basing on the fact that BMW is popular in the UK and Mercedes, in Thailand opulent decision, is then not a surprise to recall the scenery of Thai Royal family, politicians, and millionaires seated in Mercedes cars whereas the UK Excellencies and billionaires seated in the Audi. To improve this, promotions on the Mercedes Benz are far much expensive since they are luxury cars and have a high reputation. Companies dealing in such cars involve in marketing strategies for purposes of increasing the automobiles’ reputation on reliability. Customer behaviour is then associated with the psychological elaboration technique. This would function to increase the general state of interest in the cars under concern (Cohen & Basu, 86). As such, these individuals will be regarded as successful people living an opulent lifestyle in the society just because they own such unique and expensive cars. Worse still, there are traces of a small percentage of Thailand people who prefer the BMW in terms of sporting activities. This is prevalent despite high traffic congestion showing a function for inclination towards image and identity of automobiles. Even though, most buyers in Thailand lack frequent opportunities to attain functional and experiential benefits of activity in dealing with BMW cars, they can still utilise the car based on the technology used in building the car. They prefer these cars because of stability and durability so that they serve them sporting purposes (Done, 37). Conclusion According to the results gotten in this research, Mercedes cars outsell the BMW and Audi in states that have consumers of similar socio-economic status and cultural orientation. Such countries can be associated by markets in which BMW and Mercedes automobiles are the best selling products. The meaning being brought out for marketing directors is that, as the states’ economy improves, their respective market scale transforms. This means that the BMW cars have been utilised to show individualistic requirements in terms of activity and experience significance for clients in affluent countries like the United States of America, UK, Australia and Switzerland. It has been noted that cultural influences on consumer perception in purchasing such expensive cars is paramount. Most of the people will prefer to go for Mercedes limousines for the purpose of self-actualization yet; others may lack the purchasing power due to low economic power. 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