Marketing of Motor Vehicles and Decision-Making Report

Introduction

The worldwide consumers have positioned the marketing of motor vehicles as a major purchase since the year 2007 has been notified as a significant production period of above 73 million motor vehicles comprising 22.9 million sales volumes in Europe and at a net worth of £1.58 billion in UK particularly. Thus, the customers’ response to the buying decisions of motor vehicles will vary from person to person regarding the type of similar object in relation to the number of influential factors like family, friends, neighbors, media vehicles or individual influences.

Decision making process

In case of automobile, the recognition and determination of decision making tend to be complex since it is composed of traditional economic philosophy while a consumer is assumed to be rational and the new- approach of theory oriented psychology, sociology, and related attributes which can be shown by a model originated by Allport

Graph: Allport consumer decision-making model

Popular vehicle manufacturing companies

A number of companies have been recognised as prominent players while a consumer goes through the process of decision-making. Thus, along with T-model Ford, many other brands are popular in this regard as- Daimler Chrysler, Hino, Lexus, and Daihatsu by Toyota Motor Company. Buick, Chevrolet, Cadillac, GMC, Holden, Hummer, Pontiac, Vauxhall, Saab and Saturn by General Motor Company has also good market share. Bentley, Audi, Volkswagen, and SEAT by Volkswagen Group, Mercury, Volvo and Ford by the Ford Motor, Honda by Honda Motor Company, Nissan by Nissan Motors, Ferrari, Fiat by Fiat S.P.A, BMW, MINI, Roles Royce by BMW AG has also wide popularity.

Assessment of respondents

According to the requirements, consumer purchasing decision process can be explained by a micro focus of two particular respondents who have purchased a new and second hand motor vehicles simultaneously. For this, the profile and chosen criteria regarding the product are presented below-

General factors influencing purchasing decision

A number of critical factors are important in any types of purchase as-

In broader term, it can be idealised as-

Environmental influences:

• Culture- Generally, the mass media represent a socializing institutions and marketing communication source since culture is the pattern of learned behavior exist commonly by the consumers.
• Subculture- There entails a number of choice behaviors unique to any grouping of subculture specifically in brand and choice preferences.
• Social organization and reference groups- A study of attitude towards Volkswagen shown that the members of cohesive groups pose the same characteristics were more susceptible more to the attitude change of a single customer.
• Social class- Decision-making varies among lower, middle and upper class people.
• The family- The marketers are interested about the influential member in each phase of decision and choice.

Individual influences:

• Learning: it shows selective responses to cues in the environment of product.
• Perception: it takes place by selection, product attribution, and risk factors.
• Attitudes: it indicates intense inner feeling that reflects a certain or uncertain behavior.

Important factors to John Martin’s purchase decision

Not all the factors play similar role in purchasing of a new BMW 3 Series Sedan at a price of $38000 by the selected first respondent Mr. John Martin. Of all the influential variables, the following remained most effective for him:

• Mass culture: Since the home culture of Martin reflects and sustain the marketing goal, many interpersonal communications acted as “opinion leader”. Because of the cultural change in diffusing technology or thrust towards globalization, he tended to buy that car.
• Subculture: Because of age, Martin has a general tendency to purchase products based on brand loyalty, reliability on internal search and judgment.
• Reference group: Since it poses the largest influence in purchasing cars, Martin’s primary group, which includes his peer and business associates whose influence, has been extended to maintain social class, family structure and communication purpose.
• Social class: Belonging a member of upper- middle class of society, he makes purchase to whom marketers gear promotion and product development. Thus, the membership of ‘upscale’ family characterises him much knowledgeable about the brand rather than external search.
• The family: Martin’s family influenced significantly on the purchase of the automobile through the collective or joint decision-making.
• Learning: Here, the role of brand loyalty of Martin to BMW Company played a major role since he shows more brand loyalty to some famous brand like Toyota, General Motors and BMW rather than others as widely distributed brands.
• Perception: Perception is also important since Martin holds the perception of product attributes regarding price, quality, and brand names.
• Personality: Martin has chosen the car since it affords him to the personality characteristics he would like to posses.
• Attitude: A reliable measure of Martin’s attitude is the most powerful predictor of brand choice.
• Budget: Somewhat insignificantly, budget has also been important in purchasing that model 3 Series Sedan car since Martin assumed a budget of $40000 for buying a new car.

Theory basis for factors

To describe the theoretical implication of John Martin’s purchase of a new BMW car, a model of consumer decision making should be stood on that will reflect both cognitive and emotional appeal of the consumer as depicted below:

• Input: The input component implies external influences as source of information about BMW automobile and influence Martin’s automobile- related values, attitudes and behavior.
• Marketing inputs: These inputs place the particular marketing – mix strategies including the brand’s quality, service, guarantees, mass- media ads, direct marketing, pricing and distribution channels from the company to Martin.
• Socio-cultural inputs: Here, the impact of peer and business associates affected the purchase of the car. Besides, an editorial on newspaper, an article in the consumer report and feature of internet played significant role.

Process: Three stages are:

• Need recognition: The need recognition occurred when Martin found his recent model backdated. Between the two types of problem recognition, Martin appears to be a desired state of consumer since his used car could do the job.
• Pre-purchase search: The reallocation of experiences provided Martin adequate information to choose the new car. Here, Martin searched on his memory before seeking external information along with the reliable sources of internet search had a great impact on search of pre- purchase since BMW web sites provide product specification, sticker prices, discount prices, and graphics of the desired item.
• Evaluation of alternatives: While evaluating potential alternatives, Martin went through the following process:

1) Evoked set:

Within the decision-making context, the evoked set refers to the specific brands or models like BMW, Toyota, or Cadillac brands Martin considered in making purchase within new motor vehicles. It was is different from the inept set that consist of the brands he excludes from the purchasing as unacceptable like- Mercury, Ford or Maruti and from the inert set that consist of the brands of which he is indifferent like- Chrysler, Hyundai or Mitsubishi. This evoked set of chosen and rejected brands can be presented as-

2) Criteria used for evaluating new branded automobiles:

In case of Martin’s choosing of BMW sedan while there existed a selection of “right product” with an insignificant or no concern on price reflecting the personality characteristics, and entailed “love at the first sight”. Therefore, here, brand credibility influenced brand choice by finding that brand credibility improves the chances that BMW could be involved in the consideration set. Thus, the most important features in such credibility are:

• Perceived quality of BMW.
• Savings of information expenses with the car.
• Assumption of risk factors with purchased item.

3) Decision rules:

The heuristics decision strategies decreased Martin’s load of formulating complex decision through the specific guidelines.

4) Going online for getting assistance in making decision:

Martin depended largely on BMW’s informative web site as that shows various new-modeled automobiles of the company with pictorial review along with MSRP price range of $33,400-$42,000 and invoice price rage of $30,730-$38,640 with additional option of making an online purchase.

5) Lifestyle as a part of decision strategy:

Through a strong impact of social class and reference group, Martin’s lifestyle directs the consumption of updated and polished consumption of heavily used items like a new motor vehicle.

6) A series of decisions:

Here, Martin engaged in multiple decisions like choosing a global divisional car originated by a foreign company, the dealer, and the financing and other specific options.

Output: The output segment of decision phase consists of two post- decision activities. As:

• Purchase behavior- Consumers generally makes three types of purchases- trial, repeat and long- term commitment purchases of which Martin has made long- term commitment purchase since he gets satisfaction with his new car and finds it better than other brands he had used. Thus, it is closely related with the psychological view of brand loyalty.
• Post- purchase evaluation- Because of this new purchase, performance of the new BMW car exceeds the expectation of Martin resulting a positive disconfirmation of expectation for which he tends to reassure own-self with the wisdom making selection by the reduction of post- purchase cognitive dissonance. He also likes to persuade his friends and relatives for buying that branded car. This, post- purchase evaluation “feeds back” the experience to Martin’s psychological boundary for influencing the future purchase of a new car.

Important factors in McMillan Fog’s purchase decision

As noted earlier McMillan Fog who is a teacher recently purchased a second hand Volvo XC70 at $15000 from a friend of him. For this major purchase, a number of factors influenced him a lot as following:

• Culture and subculture- According to the mod- aged traits, Fog relied mostly on internal search and personal judgment for buying the Volvo car.
• Budget- Budget served as the most influential factor in case of Fog since he had a budget constraint of buying that item among the range $12000 to $16000.
• Usage rate- The car has been purchased for the purpose of extensive use for family transportation vehicle. For this, Fog searched such vehicle that would afford to maintain such pressure of usage rate.
• Reference group- The friends, colleagues and neighbors of him served as major source of information search.
• Time constraint- The car has been purchased on immediate basis since the previous one has been crashed by an accident for which he needed to by another car as essential mode of living.
• Brand image- Fog normally prefers Ford branded car, so buying the same company car at an affordable price influenced him a lot.
• Perception- Product attributes perception tended to impulse him with price, quality, total used duration and the most important perception of risk factor.
• Personality- Belonging a moderate- income personality, Fog exhibited confidence and independence in searching information.
• Family- The essence and interest of peer and children also motivate him to buy the Volvo.

Theoretical implication of decision-making

According to the previous model, Fog’s decision making also advances by a similar format of flow chart consists of input, process and output. However, this can be viewed also by the following short chart-

First Phase: instead of firm’s marketing effort, here the seller or Fog’s friend from whom the purchase has been made with a set of marketing mix consisting Volvo XC70 as product, $15000 as price and direct sell as a channel of distribution had offered such effort. Socio- cultural inputs comprise of a number of non- commercial influences. Thus, Fog has been influenced by comments from friends, colleagues, social class culture and family for evaluating the car as important inputs.

Thus, the combined influence of marketing effort by the seller, family, friends and neighbors all affect Fog’s purchase as well as the usage mode.

Second Phase: – The process phase directs three activities as following-

At first, Fog recognised the need of immediately purchasing a motor vehicle by facing problem while his last car has been destroyed by an accident. Therefore, he was in the actual state type by perceiving the item failure because of spoilage.

Fog’s pre-purchase search starts by understanding that the need can be met by buying and consuming the car. Here, Fog’s decision had based on internal sources mainly through asking for information and getting advices from reference groups. Because this purchase has been associated with risk factors, he had to make extensive search from selected sources.

In evaluating the alternatives, Fog decided up the evoked set with no attention towards inept and inert set since the concern has mainly been placed on affordability:

• In setting criteria for brand evaluation, Fog considered a number of factors like- price, quality, used time, outlook, duration of total service, stability and traction control, engines, maintenance etc. Brand credibility also influenced a lot by the quality, risks and information costs.
• Fog mainly used compensatory decision rule while he evaluated the brand in terms of noted attributes and calculates the weight of preferred brands including Ford, Land- Rover and Suzuki.
• Fog’s purchasing decision closely committed with lifestyle for which “voluntary simplicity” can be noticed.
• Regarding a series of decisions, Fog has preceded the purchase decision of whether or not to buy the second hand car.

Third Phase: This phase indicates the output of the above processes involving-

• Purchase behavior of Fog entailed a trial or exploratory stage of behavior in which he liked to evaluate the car by direct use. Since the car belongs old, he perceived that a trial would be helpful to primarily judge its effectiveness.
• In case of post- purchase evaluation, the second hand Volvo’s performance matched Fog’s expectation by making him satisfied.

Comparison of decision-making

A number of dissimilarities can be notified in the decision-making process between Martin and Fog with their new and second hand purchase of motor vehicles. Because of factorial differences, socio- economic views, budget and need variables, such differences occurred. However, the comparison of decision- making of the selected respondents is presented below-

• The need recognition process of Fog and Martin seemed to be dissimilar since Martin has been desired consumer state while Fog has been in actual type of state.
• Martin’s purchase decision has been consisted of both internal and external sources with searching information from primary reference group as well as non- personal source of outsider reports and internet. In contrast, Fog relied on internal sources involving friends, families and related ones.
• Along with consideration set, Martin emphasised on both inert and inept set while Fog has been indifferent of that.
• Fog took compensatory decision with an intension of saving money as practical loyalist that can not be seen in Martin’s case.
• Lifestyle analysis of both consumers shown a difference in new and second hand purchase of automobile.
• New purchase mainly considered dealer, financing and quality while other considered mainly current use and price.
• Martin believes on commitment purchase and becomes satisfied but Fog relied on trial basis for drawing satisfaction.

Awareness for Motor vehicle manufactures:

The manufacturers of several motor vehicle manufacturers should learn several marketing implication from those decision- making phases of different consumers as following:

• The automobile manufacturers can modify their promotional strategies for facilitating consumer’s processing of information with a distinct knowledge of decision-making rules. For example, the web site of the companies should explore information that is more detailed on completely featuring the brands attributes so that the consumers can be well informed.
• Since external search is a great opportunity to the producers, they should include easy means of getting a pre-designed package of information.
• They should make a balance between price and quality.
• Manufacturers should also be conscious about segmenting the target consumers regarding their choice, affordability and influential variables.

List and evaluation of new purchase

Table 1. Six new motor vehicles

The asking of two other respondent resulted into voting for Toyota by one and BMW by other. For choosing that brands, they used a number of evaluative criteria as following:

• Quality: Quality remains to of their evaluation since both Toyota and BMW perceived as high- quality automobiles in the world.
• Design: Both the brand offers latest model and design frequently.
• Service: The serviceability and usage rate of cars places upward in mind.
• Price: Entails the range of price for indicating affordability.

Additional features:

• Speed of automatic transmission
• Engine
• Traction control and
• Dynamic stability

Conclusion

Thus, it can be said that marketing of motor vehicle should highly be concerned with consumer decision making process as preference and purchasing highly vary with person to person.

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