Country of Origin and Its Effect on Car Choice

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Buyer Behaviour and Analysis 561
Group Project Assessment Sheet

Create a ‘schema’ for cars ‘Made in Ger., Jap. and US’|

Car purchase in general

The weighty decision of purchasing such an item of great value like a car is not likely to be reached at a glance; instead, it is considered the extended problem solving decision, which includes high involvement, high financial cost, and perceived risk (Solomon 2009, 334). In fact, consumers are driven by various factors that lead to the final decision. This paper aims at developing a logical knowledge structure for cars made in Germany, Japan, and USA, in order to investigate how consumers link certain attributes and features to a car and accordingly to examine whether the created ‘schema’ can be generalised and applied to other product categories. To reach the very final stage of car purchase, consumers are influenced by various factors, to name but a few, such as personal factors like age, sex, place of domicile, occupational and economic conditions, personality and self-concept (Horská and Sparke 2007). In this paper, the most common factors are considered and divided into two following groups:

Internal factors

These factors consist of motivation, involvement, responsibility, perception, positions, personality, skills and knowledge, lifestyle of consumers (Brown 2006 quoted from Stávková 2008). It can be stated that many of us since childhood have developed own perceptions on cars through the very first times playing with car miniatures. Facing the intention of buying a car, consumers’ purchase decision is based on both emotional and rational aspects (Goyal & Sadasivam 2010). To some degree, consumers may see their personality in the way they make consumptions, regardless of purchase frequency, value, feature etc. of the products and services. Car purchase is not an exception, which on the contrary could say something about the driver. In reality, the majority of consumers buying hybrid cars in the US supposed that the cars could reflect themselves (Thaler and Sunstein 2008); not to mention Cadillac is favoured because it can create social status together with other luxury goods (Broadbent 2007). Car purchase biases also result from the behavioural theories of mental accounting regarding the way people value things does not remain consistent but changes over time (Thaler 1985). Based on the theory of loss aversion, consumers are more likely to respond to the situation that a German car might cost an extra $XX of petrol compared to the fuel efficiency of Japanese car, which could help them save $XX. Moreover, to simplify the car purchasing process consumers are likely to resort to heuristics, which in the case of a car purchase may demonstrate in the country-of-origin effect, market beliefs (Solomon 2009, 357), word-of-mouth, normally from family, friends and acquaintances. According to Story (2005) the association of a product with a particular country influences the evaluation process of consumers, i.e. they are influenced by attitudes and beliefs about a certain country (Solomon 2011). Consumers associate certain characteristics as well as features with the countries in which the cars are manufactured. Thus, in consumers’ perception, cars of several country brands may be linked with good quality or energy efficiency, whereas others are considered to be pompous or highly fuel consumptive. In addition, it is of common sense that when considering the price of a car, consumers may compare it with the prices storing somewhere in their mind, such as that of the previous car, or the car of some relatives, sometimes it can be the recommend retail price in store.

External factors

In the context of car purchase, marketing stimuli are considered rational drivers such as unquantifiable attributes (brand, safety, comfort, after-sale maintenance etc.) and quantifiable attributes (exterior design/size, advanced technology, engine size, CO2 emissions, fuel...
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