Effect of Luxury Cars on the UK Market - Research Proposal Example

Effect of Luxury Cars on the UK Market Number June 8, Faculty Effect of Luxury Cars on the UK Market Introduction The total global sales of premium luxury and entry luxury sports and saloon cars are presently of the order of about 1.5 million units every single year (Shende, 2014). The standard markets for luxury cars in the world today are the USA, Germany, the United Kingdom and Japan. The most expensive UK new car market in the world competes with that of France and Italy and it is the second largest in Europe behind Germany market (Shende, 2014). The registration of new luxury marques’ types of cars in the United Kingdom by the year 1997 was at around 154,506 units. In other markets, especially those in the South Eastern Asia region make significant sales of other types of luxury cars too (TATT, 2010). However, these markets are always limited to the sum total volume of sales by the overall size either of the industry or by the local conditions of the market and other preferences (Shende, 2014). Consequently, the market for luxury cars generally is presently undertaking some sort of social change with some of the luxury car brands seeming to be less remote. The brands are also seen to be less varied and at the same time less exclusive with the quality, that they have in improving lives (TATT, 2010). As a result, the increment in the competition between different car makes has intensified the relevance of brand identity (Shende, 2014). Research Rationale As the standards of the product continue to go up, the customer’s perceived image of the car brand plays a major role in making the buying decision. Some of the luxury cars such as the BMW, Lexus and the Mercedes- Benz are bound to develop some values and characteristics that are seen to reflect the ever-changing social values (TATT, 2010). The values then influence the buyer’s emotions, so that the brands maintain their positions in various world regions of the global market (Shende, 2014). Critical Review of Literature In the past several years, the research into the customers’ perception and their behaviors in the luxury car industry has been driven by a couple of researchers all over the world (Shende, 2014). There is very little literature both in writing and in softcopy means that document any research done concerning customer perception of luxury cars. Most of the work is focused on the loyalty of the consumers and that of brand switching (ANURIT, NEWMAN & CHANSARKAR, n.d.). The key research that has been made has focused on the low priced segment ranges of cars rather than the luxury car segment in which any choices between the choice of individual potential buyers and brand image concept play a big role (Shende, 2014). Hence, the existing researches have all neglected all customers’ personal differences that provide them with varied perceptions towards the luxury cars (ANURIT, NEWMAN & CHANSARKAR, n.d.). The researches carry out the beliefs that luxury car users and potential customers merely strive for the attributes related to the individual products. This then agrees with the theory of Lancaster (1966) that people (demanders) tend to purchase clusters of features rather than the actual products. The buyers personalized opinions regarding the similarity of all the products must then be determined by these characteristics (TATT, 2010). The research based on the buying patterns, however, has indicated that it is not the objective features that may be tangible or technical in nature, but rather the subjective perception of the said attributes that determines the customers’ choice (ANURIT, NEWMAN & CHANSARKAR, n.d.). Therefore, there are differences that exist in the definition of business-to-business buyers and retail car buyers. Business-to-business purchasers refer to those professional and other experts defined in terms of functional benefits of the cars bought for employees. Their consumption is always on routine and functional basis. On the other side, retail customers refer to the amateur customers who spend their personal money for non-routine consumption (TATT, 2010). These types of customers always seek to gain some valuable symbolic benefits from the car brand instead. This therefore demonstrates that there are variations that are evident in the specificity among each and every individual customer’s. Specificity may often depend greatly on how the targeted buyers place their discrimination between the essential and special need in importance (TATT, 2010). Most of the luxury car brands in the world act as their own entry barrier to the market. In order to enhance the power of the brand, the most luxury cars have stretched their brands either upwards or downwards in new segments (Shende, 2014). Research Proposal Background The UK market has of late been flooded with the luxurious cars that are being sold at an alarming rate compared to other markets in UK. The research is worthwhile since the market has shifted from the other nations of Europe to UK market. Though, there was 2008 recession the UK luxurious car markets have responded well compared to other places like Spain, Italy and France. There must be a substantial reason behind this trend in UK. There is available data from the records that can be used in the study. Aim The main aim for the acquisition of luxury cars was locally seen as constrainable to the notion of buying to impress other people. With the expansion of the luxury car markets, it gets very vital to understand the behaviors of the consumers in buying luxury cars form the European market. Therefore, this study intends to evaluate the effects of luxury cars in the United Kingdom market. Research objective This study conceptualizes whether the customer’s luxury car buying behaviors are in any way influenced by factors such as premium prices of the luxury branded cars and perceived quality of the luxury branded cars. Again, factors like the societal status and the loyalty to the brand of the luxurious cars is put in to consideration. The study will also investigate whether the consumer’s income tends to have any kind of moderation effect on the consumer buying behaviors. Research Questions The study evaluates the effects of luxury cars in the UK markets. The study will therefore attempt to answer the following questions: Do the premium luxury car prices influence the behavior of customers in the UK market? Does the perceived attributes of the luxury cars brands influence the buying behavior of the customers? Does the social status of owning a luxury car in the UK influence the behaviors of the intended customers? Does the income level moderate the buying behavior of the consumers of luxury cars in the UK? Research Design Budget and Resources Activity / Resource Cost Travelling to collect data from registration centers. US $ 40 Consultation fees from various firms. US $ 20 Consulting marketing experts. US $ 20 Total US $ 80 Action plan Activity Number of weeks Topic selection 2 Gathering literature 4 Deciding on the research questions 2 Completing literature review 5 Deciding on research methods 2 Completing research project proposal 4 Revising the proposal 2 Proposal approval 2 Data collection 6 Data analysis 3 Draft paper submission 5 Submitting revised draft 2 Final research paper submission 5 Research Methodology For the purposes of the study on the effect of the luxury cars on the UK market comparable demands, perception and supplies. The new registrations of the car in UK should be evaluated to ascertain the market trend over the last few years, say four years. The marquee luxurious car manufacturers that are BMW, Audi and Mercedes-Benz, were studied, and the comparison made in the preceding years (Gwyn Topham, 2013). These three models were targeted in the research since they are the global leading luxurious cars and are regarded as the prestigious sports brands. Literature review The automobile industry is one of the most significant UK’s economy that has employed more than seven thousand workers in the industry. The luxury car industry has been in steady growth over the last few years that have led to the cars flooding the market. The automotive industry in entirely globalised, there is enormous overcapacity in European Union where the crises of Eurozone are deepening. The UK is in more significant deficit on its trade in the car industry (Harvey, 2014). The luxurious car production is growing very where the car is becoming cheaper with time. The UK market has some signs of recovering in recent years from the crisis that had hit the nation (Massey, 2015). This recovery is buoyed by the development of the luxurious car production that has flooded the market. The luxurious automotive industry had been significantly hit by the 2008 crisis, but currently there are greater events that have occurred in the industry. The industry has flooded the market with new cars where the buyers have increased, and many of them have targeted the luxurious purchases. Studies have shown that the motor industry in Britain has been growing enormously for the recent period. The study showed that the UK is a step ahead in the production of the luxurious cars. The study has also indicated that the buyers of the cars have a taste of the brands like; Ford Fiesta, VW Golf and Vauxhall Corsa. These models are favorites to many of the customers who are seeking luxurious cars. The models are always featuring in the top twenty preferred patterns in the market. The BMW series was the model that was leading in the market as at 2013 and was the bestselling car that gave significant profits to the industry (Wang, Soesilo & Zhang, 2015). The Audi and Mercedes-Benz were the close models that were following slightly behind. The greater sales of the luxury car have impressed the world market over the last two or three years. This aspect has led to encourage more manufacturers to target UK as their primary market as the nation has many willing buyers of the cars. Most of the new productions are flooding UK market. However, some companies have become worried of the market after the recession that stricken nations like France, Portugal and Italy. Hyundai is the company that has greatly invested much to the Britain car market as it is prospecting good returns in future. In UK, the market has changed substantially as the focus is currently concentrated on the sleek and smooth, fresh marketing. Jaguar is another car company that has been growing first as it has broadened its target from the older people to the young rich. The Jaguar Company is targeting the young motorists. The car industry has done a significant modification of the shape of the car to appear fancier and attract more buyers who are looking for such vehicles. Many UK companies have turned in producing SUVs that are intended to change the market dominance by Range Rovers. The UK market has become the target for the car manufacturers as the nation has developed a ready market for the luxury. The reason as to why the luxurious automotive market is doing well in UK is due to the presence of the well-paid sportsmen in football and other sporting activities. Many young people who are plying their trade in UK are earning colossal of monies every leading to them use their money to buy expensive cars. The sportsmen have offered a ready market for the cars, and many automobile companies are targeting UK as the ready market for their products. Studies have shown that the market growth in UK of the car business has influenced many car manufacturers to target this market over the last few years. The other factor that has tremendously influenced the automotive market industry in UK is the organization of the Motor Society of Traders and Manufacturers in UK that supports and promotes the tastes and interests of the automobile industry (Massey, 2015). This promotion is done at both abroad and home. The organization works in close collaboration with the affiliated companies, where it acts as the voice of the motor industry in selling their positions to the government. The association has over six hundred automobile firms that have registered with it. The association is one of the biggest and most influential in the market. The associations reputation, resources and unrivalled automobile knowledge makes it the heart of the luxurious car industry in Britain. Data collection In the year of 2014, the sales of the BMW models topped in the UK car market with over one million car sales in the global market compared to the year before. Bentley, Land Rover and Jaguar are the other automobile companies that have been registering massive growth of their sales over the last few years. Mercedes-Benz sales have increased by over ten percent in sales from the 20010 to 2014. The UK automobile industry is one of the sectors that have fared well after the recent 2008 recession that hit many markets (Massey, 2015). The records have shown that VW Golf, Ford Fiesta and Vauxhall Corsa are the models that became favorites to many buyers who are flooding the UK market. In 2013, BMW series was the bestselling model in UK market and had featured in the top twenty preferred patterns in the last few years. In 2014, the Audi sales of the luxurious cars rose by over nine percent where the manufacturer sold over one and half million vehicles. The leading luxurious car manufacturers who are Mercedes-Benz, Audi and BMW have had their sales growing exponentially in the UK markets over the last few years. Analysis of Findings The data has shown that the luxurious car industry is growing faster in the UK market as the sales are increasing every day due to the high demand that the population is offering. The sales of the BMW series have been substantially high over the last two years where it has out powered other models in the market. The other two close competitors that are Mercedes-Benz and Audi are also expanding enormously over the last two years (Wang, Soesilo & Zhang, 2015). Britain has grown to become a Europe leading market for luxurious cars. The recorded have shown that there are other companies that are doing better in the industry like Jaguar, which may reach a point of dominating the market in future. Recommendation The UK has provided a stable market for the luxurious cars in Europe.BMW and Mercedes have developed to become a brand icon at the global stage. These two brands have been widely known and preferred thus they do not require widespread advertising. The prestigious luxury cars are targeting the ready market that is being offered by the sportsmen in Britain that are being paid well and are seeking to have porch cars. This factor has contributed significantly to the development of the UK luxurious automobile industry. References ANURIT, J., NEWMAN, K., & CHANSARKAR, B. Consumer Behaviour of Luxury Automobiles: A Comparative Study between Thai and UK Customers Perceptions. Retrieved 8 June 2015, from http://www.economicswebinstitute.org/essays/carthai.pdf Brownsell, A. (2014). Premium car brands drive growth as UK car sales reach pre-recession high. Marketingmagazine.co.uk. Retrieved 8 June 2015, from http://www.marketingmagazine.co.uk/article/1226155/premium-car-brands-drive-growth-uk-car-sales-reach-pre-recession-high Gwyn Topham,. (2013). British luxury car brands report record sales. Retrieved from http://www.theguardian.com/business/2013/oct/10/british-luxury-car-brands-record-sales Harvey, M. (2014). Is the luxury car market running out of gas?. Retrieved 8 June 2015, from http://www.telegraph.co.uk/luxury/motoring/21645/is-the-luxury-car-market-running-out-of-gas.html Massey, R. (2015). Going at top speed: UK luxury car makers leave rivals in their wake. This is Money. Retrieved 8 June 2015, from http://www.thisismoney.co.uk/money/cars/article-2978465/UK-luxury-car-makers-leave-rivals-wake.html Shende, V. (2014). Analysis of Research in Consumer Behavior of Automobile Passenger Car Customer. Retrieved 8 June 2015, from http://www.ijsrp.org/research-paper-0214/ijsrp-p2670.pdf TATT, K. (2010). Factors Influencing Consumer Buying Behaviour of Luxury Branded Goods. Retrieved 8 June 2015, from http://eprints.usm.my/23695/1/ADW_622_-_Management_Project_-_Khor_Eng_Tatt.pdf Wang, S., Soesilo, P., & Zhang, D. (2015). Impact of Luxury Brand Retailer Co-Branding Strategy on Potential Customers: A Cross-Cultural Study. Journal Of International Consumer Marketing, 27(3), 237-252. http://www.economicswebinstitute.org/essays/carthai.pdf Read More