Factors Influencing Consumer-Purchasing Decisions in the Automobile Market - Research Proposal Example

Name Institution Tutor Date Research proposal to the dissertation: Analysis of the factors influencing consumer-purchasing decisions in the automobile market Introduction For any business to achieve success, it is critical that the management understands the consumer behavior. This ensures the company has a proper picture of the behavior and market. Consumer purchasing decisions is an appropriate indicator worth of study. The automobile market is becoming full of different car models. Many firms are also finding new ways of targeting small families as customers. Thus, this analysis is relevant to measure the arising consumer preferences and trends in the automobile industry. This is economically useful to the automobile manufacturers and marketers for the proper understanding, strategy, and orientation of their marketing endeavors. The automobile market has brand names that create a differentiation. Customers go for brand names and can pay a premium, for instance, they do not buy cars, they buy Range Rovers, they do not buy jeans, and they buy Levi's among others. This shows how branding affect consumer purchasing decisions. Literature Review Consumer behavior theory This is a wide area with many varies direction of analysis. The models can incorporate pre-purchase patterns related to varied stimulus experienced by the consumer to relevant to past-purchase behavior and the end disposal of the product. Consumer decision-making process explanations are through various models and theories. This helps in the effective targeting of consumers by marketers. The standard consumer theory is where the decision making process occurs through the processing of many steps. Many analysts have developed five step purchasing process while other has developed multiple step purchasing models. All of these deal with motivation, awareness, attitude, and experiences. Analysis of consumer behavior greatly contributes to the success of many markets. The findings analyses are through dependent and independent variables. Other important factors of the analyses include marketing mix elements, social and physical factors. These entire factors strongly influence consumer-purchasing decisions by enabling the discovery of the rules associated with decision-making. There are factors that relate to policy within different countries. Some of the policies include regulation to monitor the emissions of automobiles. Consumers in such countries are influenced by such policies. Manufacturers must find ways of persuading the consumer to purchase low emission cars. Consumers first look at the personal benefits of purchasing an automobile before considering the external ones (Wallis, n.d.). Another model is one that divides consumers into four groups depending on wealth and need for status. Each group studies are on the way preference for branded goods relates to the desire to associate or dissociate with their own and others. Rich consumers already have status, therefore associate with their own, and can pay premium for goods that they recognize. These consumers prefer using shouting goods to signal their segregation from the others. Those without status strive to achieve status by purchasing counterfeits in order to copy the wealthy (Han, Nunes, & Drèze, 2010). Human beings are complicated creatures who do not seem to know their own minds. It is easy and sometimes impossible, to generalize about consumer behavior. Each person is as unique as his/her heredity, environment and experience. The prediction of consumer behavior is a difficult and complex task, full of surprises, risks and uncertainties. However, accurate predictions can produce massive returns and the vice versa can cause millions of losses. Presently, all businesses are aware of the fact the consumers are the critical factors in business. The knowledge on why and how people consume products helps in the improvement of products, market view and the methods of consumer attraction. The age of liberalization, privatization and globalization has transformed the society (Subadra, Murugesan, & Ganapathi, 2010). Consumers also purchase goods relying on the recommendations of other and from knowledge acquired physically. Such decisions are prudent, cautious and without credible information. This is an obstacle to the less popular goods. Consumers go for the tried-and-real when purchasing high-end goods, thus making less popular goods less recognized. The automobile market provides a reliable example of the way manufacturers can position themselves considering the intrinsic qualities and associations that the goods want to project to the automobile consumers. Marketing factor There are various types of consumers and purchasing objectives, purchasing structures and buying constraints that exist. The focus of market is the consumer. To create effective marketing plans, it is important to study consumer attributes, needs, lifestyles, and the buying processes and then create appropriate marketing-mix decisions. The analysis of consumer behavior includes the analysis of what, why, how, when, where and how often they purchase. This shows an open-ended approach of analysis that is imperative in the current global marketplace. Therefore, companies must identify and serve their target market, reduce consumer dissatisfaction and be competent. Consumers also buy goods for personal or family use. Dubois and Duquesne model found that consumers referred to price as a means of showing their wealth, the higher the income the expensive the purchase. However, the purchase of expensive automobile does not depend on economical only, but also by social and symbolic factors associated with the consumption of the automobile. They also associated cultural factors with the consumer intention to buy expensive automobiles. Belk’s model found that consumers bought expensive vehicles to spread their personality through possessions. Other related models suggest that consumers buy expensive goods as a differentiation factors from the others. People purchase expensive automobile in order to be associated with certain reference groups acting as the role model. All these consumer types have the same motivation of the need to improve their self-status. This explains the importance of consumer decision analysis (Asifo, 2011). Conceptual model Consumer decision processes are the processes undertaken concerning a market transaction during the pre, current and post purchase of a product or service. Consumers must make varied decisions each day depending on their personal needs. Some of the decisions are essential in the day-to-day life of consumers, for example buying a new automobile or buying a house, whereas at times the decisions involve virtual processes (Johanna, 2009). Information regarding decision-framing process is not readily available. Therefore, Puto suggested a conceptual model. The models bases on the information search stage which includes two reference points; one that considers the sales message and justification of the good, and the other one internal to the company expectations and purchasing objectives. Most consumers decide basing on the price, business name and brand name, to segregate their decision making process (Lake, 2009). The analysis is critical to create investigative ethics that are relevant features of the situational element in decision-making. This also applies to the link between qualities aspects and perceived quality across varied cultural entities (Lantos, 2011). Perceived quality From other analysis, many consumers consider quality as a determining factor during an automobile purchase. Some models indicate that this perception associates positively with consumer purchase decision (Lamb & Hair, 2010). Considering the economic factors, people gain disposable income with time. Thus, they seek for better automobile models as they no longer view them as transport machines but as part of their lives. People are seeking high quality and low risk automobiles that come with after sales (Lars, 2012). Howard-Sheth Model This is a detailed model of consumer behavior and consists of four main factors; the inputs, perceptual constructs, learning constructs and output. Consumers usually pick up the inputs through their senses. It considers post purchase factors with information getting back to the model influencing brand comprehension attitudes and intentions. The model also identifies steps in the decision making process where companies influence choice (Lee, 2007). Consumers' buying behavior is divergent and situational The interest of managers is on behavior of the consumers and the product performance the reason behind this is that it gives the managerial team the right orientation in the product development and position. Optimum profitability gains from a provision of a level of consumer satisfaction because of constant purchases and brand loyalty. For example the perception the consumers have perception when buying products such as television and some of the factors that influence purchase include add ons, technical features, durability , other customer reviews and the reality on the ground (Michael, 2012). Information about a certain product is vital for the consumer to use in times of product purchase. Information is power, hence, when data changes into information the buyer can use the information during decision making on the product to buy. Different kinds of data can become information depending on the treatment they receive. The relevance of the information bases on its significance in the user achieving the desired goal or making an informed choice. Research on consumer decision-making process has identified the major factors the consumers use to decide include previous results and currents statistics on a certain product (Dongyan & Xuan, 2008). In real terms buying a product occurs long before the actual purchase in that the consumer will look at a product like he or she possesses it. There five steps which moves from consumer recognition of unfulfilled need. The steps include need recognition, evaluation of alternatives, post purchase behaviors, purchase decisions, and information search. Consumer decision on automotive choice determines the composition of the vehicle fleet. Consumer choice is a personal matter but there is put into consideration; vehicle consumption for example is a matter that requires great consideration (Armstrong & Philip, 1994). The fuel consumption of a vehicle determines its impact on air quality, global climate change and energy consumption. The composition of automotive fleet influences the other costs of transportation. Some countries have different laws regarding fleet monitoring and purchases. Public agencies do not extend their influence on the policy channels in that the decision consideration is more of private than public. Consumer response to expected personal costs is an influence from the regulations and technological mandate most automobile companies have (Tatt, 2013). The consumer buying behavior is influenced by budgetary constraints; in this context, purchase of any product affects the lifestyle of the person. Any alteration on the daily routine will be fundamental in decision making of the person (William & Jerome, 2012). The consumer range of choice restricts to the amount of money in the pocket hence many consumers had to content with what was available in the market or what was on offer. Increase in the income levels, competition and access to information has enabled the consumers to have power in terms of choice, taste and preference of products in the market (Yakup, 2011). The current demand is mostly influenced by wants rather than needs as it did before. The characteristic and trend of the market in the current world mainly determined by the consumer want on a specific product (Choomchaiyo, 2012). Core marketing of product description and performance to the consumer greatly depends on the direction the consumer takes during a certain product delivery to them. For a product to receive positive feedback from consumers, it must appeal to the basic needs, wants and the market demand. Value, satisfaction and product quality are some of the considerations the consumers put forth when choosing a product. Satisfaction of the felt need is crucial in the marketing of the product as many manufacturers put more emphasis on a combination of the said effects. Value gain occurs as the difference between the values the customer gets when compared to the cost of acquiring a product. Satisfaction of the customer is determined by the extent in which the products fulfil the customers’ expectations. Current consumer behavior affects the buying of a certain product in that the customer will tend to focus on a product that covers most of the needs while maintaining value (Wallis, 2013). Methodology The section gives a detailed explanation on the methods used in the research and the structure involved. There are several methods used in the research including an extensive literature review on the topic. The main idea behind the literature review was to ascertain the different points associated with the research problem. The dominating themes were identified and classified before embarking on the data acquisition and analysis .the methods used include qualitative and quantitative methods. The first section of the study used interviews and observational data to get results. The interviews in the section are to be semi structured with some being open-ended while others were closed type of questions. Interviews were selected as the best method in this study as it gives a personal touch from experiences, opinions and previous interactions with the said product. The method also gives the interviewer a chance to gauge the accuracy of the information passed forth by the interviewee (Durmaz & Sebastian, 2012). The method is a qualitative research design that aims to explain certain phenomena in an expounded manner. The method gives the interviewer a chance to interact with the respondents and obtain maximum explanation and description on certain product and their expectations. The qualitative research design gives an expounded point of view of the different consumers’ opinions. The second part of the research uses questionnaires; this is the quantitative part of the research. It administration is in a manner that the expected results are comprehensive and large amounts of data from far locations utilized to obtain a conclusive result or data analysis. The information received from qualitative research developed the questionnaires and diversity considered in the process (Furaiji, Latuszyriska, & Wawrzyniak, 2012). Quantitative questionnaire The initial point for entering data collected through the interviews will be used to plot the two hundred and five responses into a statistical program. In this context, SPSS (Statistical Package for Social Science) comes in. the software is robust and can give a top-notch data analysis and presentation. The data obtained is used in partial least square in order to test the structural equation of the model Mean Std. Deviation Cronbach’s Alpha Ethnocentrism Brand Attitude Assembled Automobile Perceived Quality Product Service Price Image Product Attitude Face Saving Conformity Intention German-Made Mercedes Benz Perceived Product Quality Product Service Price Image Product Attitude Face Saving Conformity Intention Limitations The research faced a number of limitations, in that from the literature review many independent variables may affect consumer’s perceptions, attitudes and their intention to buy the product. The study explored an extensive methodology to accommodate all sets of variables and their interactions. Time was a factor in that the data could not undergo time series technique. Another limitation is that the study tested only a single product hence it is difficult to assume that the other types of products also will obtain the same result (Subadra, Murugesan, & Ganapathi, 2010). Social factors certain product. The degree of cognitive beliefs plays a crucial role influence the purchasing intentions and the ways in which the consumer sees a product (Han, Nunes, & Dreze, 2010). Bibliography Armstrong, K., & Philip, K. (1994). Principles of Marketing;. Prentice Hall Enterprises. Asifo, F. (2011). Factors Affecting Consumer Behaviour in Current Auto markets. San Jose. Choomchaiyo, N. (2012). factors Affecting Consumer Behaviour Intention to Buy. New York: Macmillan Press. Dongyan, L., & Xuan, B. (2008). Car Purchasing Behaviour in Beijing;An Empirical investigation Thesis. Beijing. Durmaz, Y., & Sebastian, J. (2012). Intergrated Approaches to factors Affecting Consumers Behaviour in Poland and An Empericl Study. Global Journal of Management and Business Research , 14-18. Furaiji, F., Latuszyriska, M., & Wawrzyniak, A. (2012). An Empirical Study of the of the Factors influencing Consumer Behaviours in the Electric Applieance Market. Journal oContemporary Economics , 76-86. Han, Y., Nunes, J., & Dreze, X. (2010). Signalling Status Luxury Goods .The role of Brand Prominence. London. Johanna, F. (2009). Attitudes and Behaviours towards Car Purchases. Cengage CA. Lake, L. (2009). Consumer Behaviour for Dummies. Willey Publishing Inc. Lamb, C., & Hair, J. (2010). Car Choices of Current Consumers. 2010: Cengage Learning Press. Lantos, G. (2011). Consumer Behaviour in Action Real Life Application for Marketing managers. USA: ME Sharp Inc. Lars, P. (2012). Consumer Behaviours. Oxford : Oxford University Press. Lee, S. (2007). Motivation Study Based on Expectancy Theory. Florida: Florida State University College. Michael, R. (2012). Consumer Behaviours. Allyn and Bacon. Subadra, S., Murugesan, K., & Ganapathi, R. (2010). Consumer Perceptions and Behaviour ,Study with special Reference to car Owners in Namakkal District. London. Tatt, K. (2013). Factors Influencing Consumer Buying Behaviour of Luxury Branded Goods . Wallis, N. (2013). Informing and indluencing car Buyers to support market growth for low carbon cars. Routeledge,CA. William, D., & Jerome, M. (2012). Basic Marketing. New York: McGraw Hill. Yakup, D. (2011). The Impact of Cultural factors On consumer buying Factors . Chicago: Chicago University Press. Read More