Internal and External Factors Influencing the Consumer Decision during Car Purchase - Coursework Example

Internal and External Factors Influencing the Consumer Decision Name Professor Institution Course Date Internal and External Factors Influencing the Consumer Decision Executive Summary This report is formulated to analyze the internal and external factors influencing the consumer decision during car purchase. With disposable income increasing after the global world crisis, the rates of car have really gone up (Bohlen, Carlotti & Mihas 2010, p.19). Bohlen, Carlotti & Mihas (2010, p.20) contend that the carmakers now concentrate mainly on the developing economies because major developed markets face urban driving restrictions and high cost of fuel. However, that does not mean they do not produce for the developed markets; in fact, they are now designing fuel-efficient cars such as hybrid and electric cars. Currently the automotive industry has several players which the customers can choose depending on several factors including occupation, income, personality and social class among others (Choeuke 2009, p.13). Major players in this industry comprise of Toyota, Volkswagen, BMW, Mercedes, Honda, Tata, Ford and General Motors. Introduction As the 21st century continues to unfold, we can observe numerous changes and developments happening around with all the firms in every sector trying to sustain pace with these changes and different needs of the individuals (Percy 2009, p.49). Globalization and technology have changed the business environment great deal resulting to a change in customer behavior. The managers that would like to be successful in their operations must embrace the change to its entirety. With customer as the king, the managers ought to teach the customer service representatives to remain within the emotional labor, even with the stubborn customers (Percy 2009, p.51). This is because it’s within their right to ask several questions before deciding to purchase a product or service. Just like in any other human being, customers are normally influenced by different factors prior to making a purchase decision. Based on the views, this report analyzes the influences of the internal and external factors on consumer decision process concerning car purchase. Consumer Decision Process Internal Factors Almost every human being would like to buy a car in their lifetime. A car is a sign of prestige and everybody would like to own the best car. However, the decision to purchase one is normally influenced by internal, external and situational factors (Quester et al. 2014). Consumer normally has this intrinsic personality that drives how or her to choose let say BMW over others. They are called internal factors and they include needs, motives, emotions, perception, memory, personality, lifestyles and attitude. The consumer is driven by the internal stimuli to recognize a need. As such, a consumer feels the need to own car for prestige because of social class (Hermann 2009, p.177). Personality Blackwell et al. (2006) argue that personality also plays an important role in the decision making for car buyers. Similarly, a person can be living in a terrain land which needs a 4-drive car with a large engine capacity. Therefore, he or she will go for cars like Landcruiser VX of Prado. Personality develops as one interacts with others. Some personalities are just outgoing, and in their trips they would like to stand out among the rest (Blackwell et al. 2006). Therefore, they would go for sport cars such as Rolls-Royce, Bentley, Alfa Romeo and Audi among others. Car manufactures know this secret and has the segment of personality, more so for young people. According to Quester et al (2014) big sports cars brands convey material wealth and success which could be inspirational to young executives. In respect to this, they create a brand personality to appeal to the individuals who value the characterization. Perception Perception strongly justifies a consumer's behavior, enabling them to validate ones choice on the basis of the perceived results (Blackwell et al. 2006). Customer perception in terms of quality provides the basic motivation to the consumers to purchase the car. For instance, one would buy Toyota Prius knowing that it is fuel efficient and because it reduces air pollution. Perception is normally created by the ads and also friends using the car. Baltas & Saridakis (2009, p.144) argue that the majority of customers buying cars prefer a recognized and known brand as opposed to taking a chance and opting by settling for unknown or the new brand in the market. Brand association builds a positive feeling and attitude which create a connection with the consumer with a given brand, particularly with regards to purchase decision making (Baltas & Saridakis 2009, p.147). Customers think that renowned branded cars hold an outstanding quality rather than the lesser recognized brands. For example, when Daewoo cars came to the market in 1982, customers perceived it as a lesser known brand leading to poor reception. In 2001, the Daewoo Company ran into financial constraints and was sold to general Motors (Baltas & Saridakis 2009, p.149). Learning Quester et al (2014) postulates that learning influences purchase decision making. In marketing, learning is a process of getting new, or adjusting the existing, behaviors, knowledge, values and preferences (Quester et al. 2014). This process could entail synthesizing various forms of information. It transforms in an individual’s behavior resulted from information and the experience. In the perspective of a car, some companies offer free test to make the customer learn from the experience before deciding to buy it. For instance, one may be offered a test drive for Hummer H2 by the general motors and in the process notices the car’s large consumption of fuel. For a customer who prefers car with low consumption would not risks buying the Hummer. On the other hand, the customer has the experience as long time user of the brand. This makes him have enough information in the present if he or she wants to purchase from the same brand. For some they may not buy the car for the second time due to bad experience. Motivation According to Bohlen, Carlotti & Mihas (2010, p.18), customer purchase decisions are also influenced by the level of motivation. Motivation is described as an inward drive a customer has to obtain what he needs. According to Maslow’s Hierarchy of Needs model, motivation comes at different times in life (Bohlen, Carlotti & Mihas 2010, p.20). Once the first level is met, an individual is motivated to move to the next. Most people buy cars at self actualization stage. In this stage customer feel secure and are also and are motivated by ads that companies provides security and assurance of their products. During the global financial crisis which started in 2008, number of sales of the new vehicles declined sharply almost everywhere across the globe, except for the Hyundai vehicles sales (Bohlen, Carlotti & Mihas 2010, p.19). Hyundai recognized that individuals required to feel more safe and secure and developed an advertisement campaign which guaranteed car consumers they were allowed to return their automobiles if they could not make their payments on them with no damaging of their credit. Observing the success of Hyundai, other car manufacturers started providing similar programs (Choeuke, M 2009, p.21). This confirms that different marketers provide different level of motivation to customers. Attitude Attitude plays a vital role in buying behavior of a consumer. Attitudes are the emotional feelings of “mental positions”, positive or bad assessments, and tendencies individuals hold regarding companies, institutions, products and services (Percy 2009, p.51). Attitudes have the tendencies of enduring since they are founded values and beliefs of the people, they are complex to change. For instance, some people believe in the conservation of the environment and are turned away by vehicles which smoke (Pickett-Baker & Ozaki, R 2008, p.283). For such reason, one can have a negative attitude towards the company that make the brand. Attitudes have been created by experiences and also complaints from public. Tomas (2013) claims that Toyota has faced negative attitude, especially when customer realized sold and manufactured were faulty. Since every company wants customer to hold positive attitudes concerning their product, Toyota recalled up to 110,000 Toyota and Lexus models in 2011 while in 2012 it recalled 7.43 million automobiles globally to repair faulty window power switches (Tomas 2013). The results of forms beliefs could be encouraging or bad attitudes towards their product. External factors Social norms considered to be external factors equally influence the consumer decision process of a car purchase. Quester et al (2014) state that some external factors which drives consumer decision making includes culture, reference group, income and social class etc. Culture Culture is a way of life among people or group and is frequently regarded to have the broad influence on the behavior of a consumer (Santosh & Pandey 2011, p.21). Santosh & Pandey (2011, p.22) claim that Cars have been a big business in the US because, success in their culture is determined by the type and number of cars its citizens owns. Hence, hence people do not just buy a car but look at the brand. In many societies, many people associate managerial position with success, in that way, most managers are always accorded flashy cars to portray that success image. Hermann (2009, p.180) posits that business managers, especially, Toyota Motor Company with presence in many countries now employees multicultural employees as a strategy to help the company get into new markets. Reference group Consumers are continuously seeking advice of well-informed acquaintances or friends who give the information, advice on a particular product so as to make the final purchase decision (Quester et al 2014). Therefore, it can be concluded that an individual’s behavior is greatly influenced by reference group. They drive the consumers’ behavior and attitude. For people who have dreamed of purchasing sports cars ever dreamed of buying a sports car have an inspiring reference group (Baltas & Saridakis 2009, p.147). The reference contains people who have used the sports car before and know the experience. Some consumer prefers mechanics to be their reference group when they want to buy a car. Baltas & Saridakis (2009, p.149) maintain that automobile manufacturers know the trick and employ one the celebrity who own one of their brand cars to market their products. Conclusion From this report, it is concluded that in order for car manufacturers to be successful in their development and implementation of market strategy, they must engage in a comprehensive research of consumer behavior. This research will ensure that their strategies are tailored in within the factors that influence consumer’s purchase decision making including external and internal influences. As a result, they will be able to fall within most of these influences even if they keep on changing. References Baltas, G & Saridakis, C 2009, Brand-name effects, segment differences, and product characteristics: an integrated model of the car market, Journal of Product & Brand Management Vol. 18, no.2, pp.143 – 151. Blackwell et al. 2006, Consumer Behavior, an Asia Pacific Approach, Cengage Learning, Australia. Bohlen, Carlotti & Mihas 2010, ‘How the recession has changed US consumer behaviour’, McKinsey Quarterly, no. 1, pp.17-20. Choeuke, M 2009, Long-term strategies key to future success, Marketing Week, Vol. 32, no. 5, pp. 12-27. Hermann, S 2009, The crisis and customer behavior: eight quick solutions, Journal of Customer Behaviour, Vol. 8, no.2, pp.177-186. Percy, C 2009, Forces of change: shopper behavior Re-shaping the future of grocery, Retail Digest, pp.48-57. Pickett-Baker, J & Ozaki, R 2008, Pro-environmental products: marketing influence on consumer purchase decision. Journal of Consumer Marketing, Vol. 25 no. 5, pp.281 – 293. Quester et al 2014, Consumer Behavior 7th ed, McGraw-Hill Australia. Santosh, K.R & Pandey, K.D 2011, The Influence of Culture on Consumer, Behaviour VSRD International Journal of Business & Management Research, Vol.1 no.1, pp. 21-28. Tomas, C.M 2013, Recalling Toyota, Emerald Emerging Markets Case Studies. Read More