Explain Consumer Behaviour in the Automotive Sector.
In today’s time, the automotive industry is considered to be a very lucrative industry. Due to the high level of research and development infrastructure, highly qualified workers, integration of value chain in the complete industry, helps in creating a world-class automotive environment. This kind of environment helps to develop technology which helps to cater tomorrow’s needs. As the disposable income is increasing in both the urban and the rural sector and finances are made available by the financial institution very easily, the sales of the motor vehicles have increased at the rate of 39% P.A. as compared to the previous years (Barlow and Chatterton, 2002). Competition has also increased in this sector with the entry of the new players. The factor which helps in the marketing of a particular product is by knowing their brand and creating a personality for their brands.
This report answers the questions relating to the brand personality and to review, identify and analyse the key influences which affect the buyer’s behaviour.
The automotive industry is experiencing an unprecedented boom in the demand for various types of the vehicles currently. This boom is mainly because of two reasons: First is the increase in the income and living standards of the people and second is Liberalisation in the government policies of equity regulations, reduction of import tariff, banking liberalisation, etc. (Clark-Murphy, 2010). The automotive industry has observed that the sale of vehicles will be triple in the next five years with the growth in the market and increase in the customer purchasing power which will lead to the increase in demand of high- end models.
The creation of brand personality is done by using all the elements of marketing mix which includes its price, store location, formulation of the product, brand communication, media advertising and sales promotion (Dassisti and Giovannini, 2012). Innovation, good production standards, and know how helps to strengthen the automotive industry in the near future. Automotive engineers today are working hard to improve the engine efficiency, developing the different drive technologies which include hybrid, electric and lightweight electronics and material. For the growth of automotive industries factors like smartly managing traffic technique, targets to reduce carbon emission and initiatives of the government electric method are used.
The objective to carry out this research is to determine the demographic variables of the consumers, examining the perceptions of the consumers and to measure the satisfaction levels of the owners of the vehicles. Fulfilling customers requirement cannot create customer satisfaction has his have to be met in any case, however, falling short in creating customer requirement can lead to customer dissatisfaction (Gover and Harris, 2009). The major attributes to create satisfaction among the consumers includes product quality, packaging of the product, price, keeping up the delivery commitments, overall attitude, communication and responsiveness in resolving the complaints.
The process will be to first define the target audience then find out their needs, build up the consumer profile and lastly create the product which matches the profile of the customer.
The procedure followed in this research are: First defining the need of information and second is designing a descriptive, exploratory and causal research.
The research process comprises of four distinct but yet interrelated steps for research analysis which are the determination of the information research problem, then developing an appropriate research design, then executing the research design and lastly communication of the result (Jullien and Pardi, 2013).
The acts and decision processes of the customer are associated with buying, evaluating, consuming and discarding the product for personal consumption. Due to increase in the environmental awareness, the increase in the gas prices and strict CO2 rules and regulations in the new vehicles the demand of efficient drive systems has increased (Kaneko, 2006). The factors which helps in the decision-making of the buyer of automobile vehicles like a car is due to external and internal influences. External influences include family, cultural, reference group and environment whereas internal influences include personality, lifestyle, motivation and decision- making process. The external and internal influences play a very important role to change the decision of the buyer. The cultural values and the social status of a person is a very important factor in the decision making of the consumer. Whereas environment, circumstances and location are also very important. In the near future, the demand for vehicles which are connected to the internet is going to increase.
When the consumers decide which vehicle to purchase than they start to focus more on safety, price, reliability, technology and fuel economy. The bottom of his list consists of cash back incentives, however, the cash back incentives does not affect the decision of the consumer much in the past few years which mean that the consumers are now very less interested in gimmicks (Kim and You, 2013). The gender and age of the consumer also affect its decision like for example older customers focus more on safety and reliability whereas younger generation analyses their decision depending upon the information available on the internet.
People form an impression of a particular brand on the bases of conversation with family and friends, advertisements, news reports and product experience. But until the customers purchases actively all that exposure appears wasted. But when someone decides to buy a product than these factors shapes the initial consideration of the customer (Kim and You, 2013). The customer then narrows the initial consideration by weighing options than they make the decision and then they buy the product. After the product is purchased by the buyer, the post-sale phase determines the loyalty of the customer towards the brand so that they could purchase the product again. Marketers should push their marketing towards the consumers at each stage so that they can influence their behaviour. The decision- making process is a circular journey which consists of four phases: Initial consideration, then the process of researching the potential purchases which an active evaluation, closure means when consumers purchase the brand and the last is post purchase, which is when consumers experience the brand.
The factors that affect the consumer choice of vehicle depends on reliability of brand, safety, price, fuel economy, quality of its interior styling, after sales services, extra option with no extra cost, availability of the vehicle, environmental factors, trade in value,0% or low financing, cash back incentives (Williamson, 2005). The steps which influence the decision of the user are as mentioned below:
Need recognition- the need recognition is the most important step in the process of buying. If there does not exist the need for the product than there is no buy for the product. The need for a particular product arises due to internal factors or due to external factors like society etc.
Information search- Once the consumer is identified with the need than the process of information starts which means the possible solution to a problem. The information can be gathered through internal factors or through external factors (Teng and Nguyen, 2010). Internal information depends on the customer’s personal experience with the brand or the opinion that he has about the particular brand. External information is gathered through friends and family, press, media and through advertisement.
Evaluation of alternatives- Once the consumer has gathered all the information then he evaluates all the alternate available to him and chooses the one which is most suitable for him.
Purchase decision- Since now the customer has evaluated the options available to him and has selected the best among the best which suits his requirement he will proceed to purchase the product.
Post purchase behaviour- Now since the customer has purchased the product, he will evaluate the product by using it and that he is satisfied with the decision he has made and if the customer is satisfied with the product then that will build up the loyalty of the customer towards the particular product.
Developing the marketing strategy-The brand can improve their marketing strategy by enhancing their knowledge on the process of consumers buying decision. It will help to respond effectively and be present there with their customers at every stage of their buying decision, which will, in turn, strengthen their relationship with their customer, create and raise the need for their product which in turn will grow the sales of the brand (Takhire and M.R, 2015).
By increasing the expenses on research and development and using new technology will also influence the buyer decision. Close interaction with the clients should be done at the pre-development level. High technology use and innovation should be of prime importance for the manufactures. The customer buys a product depending on their needs; therefore, the brand should reinforce or generate the need for the product with the help advertising campaign. Advertisement campaign which is good can help to develop the need for the product in the mind of the consumer. During the alternative evaluation procedure of the customer buying decision process, customers are searching for reliable, solid and tangible information which will help them to make their choice (MacNeill and Bailey, 2010). The brand at this stage is required to provide the concrete information about the product and the features of the product, the added value of the product and why it is better as compared to other competitors which in turn will help to create a positive influence in their decision- making process. Lastly post purchase behaviour of the brand can help in developing the long- lasting relationship with the customer. The brand should provide good customer services in the case the customer is dissatisfied with the product or has a certain issue with the same. Developing proper supply chain models which mainly consist of the three processes like physical flow, planning and operational processes and strategies.
The physical flows presents the information flow and all the processes relating to the movement and status of the goods which is in transit. In the planning and operational processes, various activities are performed to guarantee that the supply chain works effectively. This strategy helps in creating responsiveness and flexibility of customer requirement and the changing market condition in a very cost effective manner.
7. Conclusion
Measures are required to be taken for the expansion of the automotive industry. Innovations and R&D are required in this industry to cater to the requirement of the future. The manufacturers and the dealers should be able to understand the factors that affect the purchasing behaviour of the customer. The information provided by the salesperson on the easy availability of the spare parts, safety, technology, etc. affect the purchasing behaviour of the consumers. People in today’s time are more conscious about the information which is provided to them easily and on the spot. The technology used and the availability of service station also plays a very important role.
The result of the research shows that the companies in today’s time play on peripheral cues to maintain total relationship management and also to connect both their potential and present customers (Jullien and Pardi, 2013). The companies in now a time are operating in a very competitive and highly aggressive global market which in return requires the companies to an emphasis on all the aspects of quality. Total quality management focuses on the coordination, integration and continuous improvement of all the processes and activities.
Whereas total relationship management is a new marketing strategy which focuses on all the integrated external and internal activities between and within the organisation. Both the terms mentioned above are integrated which helps the manufacturer in building a good quality product and in building a better relationship with the customers and the dealer and helps in providing better service levels.
Finally, a very important point emerges out of this study is a caution for all the manufacturers. It says that although the market is increasing but all the companies have a long way to go and to convince all their customers about how its suits the buyers perspective and its brand personality. Simply because there is no guarantee that the satisfaction of the customer will convert into the sale or not.
8.References
Barlow, N. and Chatterton, P. (2002). Improving the Competitiveness of Companies in the UK Automotive Sector. Industry and Higher Education, 16(5), pp.315-319.
Clark-Murphy, D. (2010). Do Interactive Theories Really Explain Public Sector Managerial Decision-Making?. Asian Social Science, 6(3).
Dassisti, M. and Giovannini, A. (2012). Ontologies for interoperating sustainable manufacturing: new opportunities for the automotive sector. IJATM, 12(3), p.273.
Gover, J. and Harris, R. (2009). Global automotive sector. IEEE Veh. Technol. Mag., 4(4), pp.85-89.
Jullien, B. and Pardi, T. (2013). Structuring new automotive industries, restructuring old automotive industries and the new geopolitics of the global automotive sector. IJATM, 13(2), p.96.
Kaneko, M. (2006). Prospect of Neutron Analysis for Automotive Industry. hamon, 16(1), pp.68-69.
Kim, P. and You, J. (2013). Strategic CSR through Innovation and Top Management Team Decision Making: Evidence from Eco-Friendly Automobile Industry Case Analyses. JOAMS, pp.383-388.
Klonowski, D. (2008). The consolidation of the automotive parts aftermarket sector in transitioning economies: the case of Poland. IJATM, 8(1), p.90.
Lee, B., Park, Y. and Yoo, J. (2010). Buying Customer Classification in Automotive Corporation with Decision Tree. The Journal of the Korea Contents Association, 10(2), pp.372-380.
Lewis, W. and Samuel, A. (1991). An analysis of designing for quality in the automotive industry.Design Studies, 12(4), pp.252-260.
MacNeill, S. and Bailey, D. (2010). Changing policies for the automotive industry in an ‘old’ industrial region: an open innovation model for the UK West Midlands?. IJATM, 10(2/3), p.128.
Takhire, M. and M.R, T. (2015). Evaluation of Effective Factors on Customer Decision-Making Process in the Online Environment. International Journal of Managing Public Sector Information and Communication Technologies, 6(3), pp.01-11.
Teng, T. and Nguyen, T. (2010). Assessment of the pedestrian friendliness of a vechicle using subsystem impact tests. International Journal of Automotive Technology, 11(1), pp.67-73.
Williamson, I. (2005). Low volume; high flexibility [automotive industry]. Manufacturing Engineer, 84(6), pp.40-43.
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