Analysis of Research in Consumer Behavior †MyAssignmenthelp.com

Question: Discuss about the Analysis of Research in Consumer Behavior. Answer: Introduction: The aim of the report is to study issues in the consumer behaviour in case of medium to high involvement product or brand. The study takes into the Corolla Altis Sedan by Toyota Motor Corporation as its centre set against the backdrop automobile market of Singapore. The segment of customers, which the study considers, consists of upper and upper middle class customers residing in the Singapore. The paper opens with a situation analysis of Toyota followed by the target market segmentation. The third section delves into the target market decision-making process and the fourth section deals with the influences of the society on the buying behaviour. The fifth section deals with the psychological influences on buying behaviour followed by the sixth section on personal influences on the buying behaviours of customers. The study ends with a recommendations section which forms its seventh and the last part. Toyota Motor Corporations is a multinational automobile manufacturer and marketer, which has its headquarters in Japan. The company started manufacturing vehicles in 1933. The vehicle products of Toyota include cars, vans, SUV, commercial vehicles, hybrid car, electrical cars and fuel cells. Toyota is a public limited company listed on several big stock exchanges around the world like the New York Stock Exchange (nyse.com, 2017). These factors have made the Toyota one of the most powerful automobile companies in the world (toyota-global.com, 2017). The global vision of Toyota is to lead the global automobile industry by manufacturing superior vehicles and ensuring safety of the users. The companys vision also includes sustainability, innovation and environment friendly operations. The mission of the company is to assure high quality automobile products all over the world. Toyota seeks to bring about continuous improvement in its operations and respect the stakeholders interest. Current market situation analysis: The current situation analysis of Toyota shows that the automobile manufacturer leads the automobile industry. The automobile industry is an international industry worth billions of dollars. The worldwide sales of vehicles reached 88 million cars, which is leading to high capital maximisation for the automakers (strategyand.pwc.com, 2017). The industry is experiencing a lot of innovation and entry of new varieties of cars like electric and hybrid cars. The tough competitors of Toyota are General Motors, Volkswagen and Nissan. The market share of the Japanese automobile manufacturer is 11 percent followed by General Motors enjoying 10.8 percent market share (businessinsider.in, 2017). Toyota is a Japanese car manufacturer with a global presence. Hence, it comes under the effect of political stability in its important markets like the Singapore. Singapore is a political stable country and its government encourages entry of foreign companies. Free trade agreements and bilateral political agreements between Japan and other countries like the Singapore play important role in foreign operations of Toyota (mofa.go.jp, 2017). The governments of Japan and Singapore have strong trade relationships which would encourage the companies of one country to enter the other. The analysis shows Toyota should take advantage of the political stability and bilateral relationship between its home country Japan and host country Singapore to enter the Singaporean market. However, Toyota should also form strategies to deal with negative political driving incidences like terrorist attacks which are capable of breaching the bilateral trade relationship between the two countries (Nugent, 2017). The gross domestic product and per capita income of Singapore are increasing. This means that the customers of Singapore have more disposable incomes to buy expensive premium cars like Corolla Altis Sedan (Ahmad, Choi Park, 2015). Toyota employs human resources and material resources in countries like Singapore and comes under the influences of these factors. The workforce of Singapore is highly skilled and educated workers. Singapore has a wide network of financial institutions like bank, which provide easy financial capital to business organisations. Moreover, the tax rates of the country are very low which allow the business organisation earn high profits. These analyses of the economic conditions of Singapore are favourable for Toyota to enter the market with its expensive models of cars. The company should use the resources available in Singaporean market like financial resources to enter and manufacture cars (Sarkin, Bagautdinova Averianov, 2013). Social factors: Increasing interest in the sustainable cars like electrical cars in the society are encouraging sales of Toyota. The customers of Singapore prefer using premium cars Corolla Altis Sedan due to increase in their incomes. Dynamic changes of preferences among customers in Singapore about cars require the companies like Toyota to carry out continuous innovation in their automobile manufacturing method. This analysis shows that the social conditions of Singapore favours Toyota to expand its business in Singapore by selling premium cars like Corolla Altis Sedan. As discussed, the people of Singapore prefer expensive cars, which would allow Toyota to sell its expensive models among the people to earn huge revenue. The market of Singapore is technologically advanced and encourages high level of automation in factories. This availability of advanced technology encourages innovation among the companies. Technological advancements have allowed Toyota to manufacture more sustainable and eco-friendly cars like the electric car. This is proving to be opportunity for Toyota and boosting its sales (Anderson et al., 2014). Cyber crime and data threat are the major technological threats facing the automobile companies like Toyota (Feher, 2015). This analysis shows that Singapore is technologically advanced and encourages innovations. Toyota should make use of this technological advancement to manufacture and sell premium models like Corolla Altis Sedan. However, the company should be aware of cyber crime, which can cause potential harm its business. SWOT analysis of Toyota: An analysis of the macro-environment of Toyota reveal the following strengths, weaknesses, opportunities and threats the company encounters: Strengths: 1. International brand. 2. Top market place. 3. Product line consisting of cars, SUVs, commercial vehicles, electrical and hybrid cars Weaknesses: 1.Strong competitors from other automobile companies. 2. Toyota faces scrutiny of governments since it is a automobile company whose production causes environmental pollution. 3. The company is limited to automobile manufacturing. Opportunities: 1. The automobile manufacturer is expanding into new markets. 2. Manufacturing of new models of cars. 3. Innovative products like hybrid cars. Threats: 1. Legal cases due to high level of pollution. 2. Political and economic instability. 3. Data thefts and risk of losing strategically important business data to unauthorised parties. The target market of Toyota can be evaluated based on four segmentation variables namely, demographic, psychographic, behavioural and geographic. These variables are explained as below: Cars are expensive products and require middle and high involvement of customers. The Corolla Altis Sedan comes in two variants namely the standard variant of cost $113988 and elegance variant $118988 (toyota-global.com, 2017) It is evident from the prices of the model that the target customer profiles are the upper middle and the upper class customers. The company makes expensive and sophisticated models, which match up the tastes of the upper class customers (Parise, Guinan Kafka, 2016). The high quality original spare parts and services available at the service outlets all over the world enhance the customer purchase experience about Toyota products. Psychographic segmentation of the customers takes into consideration factors like lifestyle, values, social and personality, which represent their social status. Corolla Altis targets the upper and upper class customers who view cars as status symbol. They consider the high price of the cars manufactured by Toyota as the sign of high quality and status (Shende, 2014). The behavioural segmentation of the customers Toyota serves consists of middle, upper middle and upper class people. Corolla Altis is meant particularly the upper and the upper middle class people who have considerable knowledge about cars and use them on daily basis. These classes of customers show great involvement while purchasing premium cars and enjoy driving them (Gonzlez, Crcaba, Ventura, 2015). The geographic segmentation of Toyota customer profile consists of upper and upper middle class customers all over the world. Toyota has strong presence in all the major markets and occupies high position in them. The company owns supply chain and distribution chains all over the world. These chains ensue that Toyota is able to sell its high priced cars to the rich people all over the world (Athreye, Tuncay-Celikel Ujjual, 2014). Toyota has services centres all over the world. This geographically vast network of service centres allow the company to cater to the needs of the rich people by offering them genuine parts for expensive their Toyota cars. This availability of Toyota showrooms and services all over the world encourages the upper class buy their cars because of after sales services (Murali, Pugazhendhi Muralidharan, 2016). Target market decision-making process: The target market of Toyota consists of the rich and the upper middle class customers which make decisions regarding the purchase of expensive car models like Corolla Altis. Corolla Altis is a premium car and hence, the customers show high involvement while making purchase decisions consisting of the following five steps: The target market of the customers of Toyota consisting of rich and upper middle class customers identify the problem or the need to buy an expensive car. The need can be a want of a luxurious premium car which modern features and sophisticated look which can function as a status symbol (Qian, Soopramanien, 2015). The main market of the expensive models of Toyota like Corolla Altis consists of upper and upper-middle class customers who have high disposable incomes to buy luxurious cars. However, with the increase in the income of the middle class in Singapore, the induced market for the company consists of the middle class customers as well. These middle class customers today are also preferring premium cars to exhibit their increased income and social status (Kearney Levine, 2014). The young rich and upper middle class customers often buy premium cars like Corolla Altis to mark new stages in their lives like promotions to higher ranks. These customers are technologically sound and show a lot of involvement in the technical aspects while buying expensive cars like Corolla Altis (Blanden, Gregg Macmillan, 2013). The second stage of purchase of high and middle involvement products like premium car models is searching and gaining information about them after realising the need to buy acquire expensive cars. The customers gain information about Toyota cars from various sources like acquaintances and online reviews. Expensive products like, cars involve risks both financial risks and physical risks of the rider. The customers before buying cars consider their quality, attributes and prices. The big brands like Toyota act as quality assurances for the customers. The customers also consider the on road safety the cars provide to the rider. The customers before taking purchase decisions regarding premium cars acquire adequate level of knowledge. The sources of knowledge are internet, reviews from friends and acquaintances, online reviews and even professional advisors. The customers also consider the financing aspects like availability of car loans from banks and amount of down payments available for a particular model of car (Dumortier et al., 2015). The next step in making purchase decisions is evaluation of the knowledge gained from various sources like online reviews. The customers compare and contrast between car models and aspects like financing available for them at this stage. The customers while evaluating between models of cars, create evoke sets consisting of brands of premium cars they are familiar with. The evoked list of premium cars usually consists brands like Toyota, which offer cars with modern features, which match with the tastes of the upper class customer segment. Moreover, banks usually provide financing for such luxury models at lower rates of interests. The attributes of the premium cars like Toyota Corolla Altis and easily available financing facilities are the reasons why customers consider them while making purchase decisions of buying cars (Zhang et al., 2014). Compensatory and non-compensatory rules: The compensatory rules consist of attributes which customers are not definite about while non-compensatory rules are compulsory attributes which customers consider while making purchase decisions. As far as buying premium cars are concerned, the non-compensatory rules comprise of features and safety parameters available in a model. The non-compensatory rules consist of features like, colours which if differ will not affect the rider safety and convenience. The evaluation criteria consist of the compensatory attributes like colours and non-compensatory attributes like features and on-road safety. The customers available the available car models based on these attributes to make the final purchase decision. The customer at this stage finally makes the purchase of the premium car. The top market position of Toyota shows that most of the upper class customers prefer buying models by Toyota like Corolla Altis. The customers while making the final purchase decision of buying premium cars take into account the available alternative brands. For example, the customers while considering buying a Toyota car also considers the competing brands like General Motors and Volkswagen. Toyota being worlds leading premium car manufacturers faces stiff competition from these available brands because they make the purchase decision making of customer difficult. The upper class customer prefer after sales services like availability of genuine spare parts as important retail factors while purchasing premium cars. They also take into account the availability of retail financing support from banks. Multinational manufacturers like Toyota provide superb retail support to their premium customers and the banks provide easy finances to customers who intend to buy branded cars like Toyota. Availability of these two retail factors helps in optimising customers purchase decisions to buy premium cars like Corolla Altis (Shnyrenkov Pryadko, 2015).. The post purchase evaluation of consist of evaluation of the customers after purchasing and using a high involvement product like premium cars. It is very for companies like Toyota to ensure positive post purchase evaluation because it generates repeat business and more revenue generation. Post purchase feelings: The post purchase feelings refer to the degree of customer satisfaction products of high involvement generate. A high degree of customer satisfaction makes a customer happy while low degree of satisfaction leaves a customer feeling dissatisfied or neutral to the product. The companies like Toyota seek to create customer satisfaction because happy customers promote their brands among new customers and consider buying the products themselves again in the future. The company would generate revenue in both the cases, which makes generation of positive post purchase feelings among customers important (Zhang et al., 2014). Post purchase cognitive dissonance results in lower customer satisfaction upon purchase of expensive products like cars when according to the customers opinion, the product does not match his expectations. The marketers must encourage the customers to gain accurate information about the high involvement products before making the final purchase decisions. They should not make unrealistic promises about their products to attract customers. These ways can assist marketers like Toyota to handle post purchase cognitive dissonance among customer by helping them in making accurate impression about products, which ultimately leads to customer satisfaction (Kearney Levine, 2014). The two related external influences that influence the customer decision-making process are family and social classes. The two factors are discussed in the following sections: There are several influences, which come into play while families make purchase decisions. These influences and considerations consist of factors like social status, cultural backgrounds and consumption patterns of the families. Family issues related to purchase decisions can be resolves by strategies like bargaining where one member drops his purchase decisions and face to face confrontations where two dominant members aggressive place their demands relating to purchase to arrive at the final purchase decisions. The social classes of consumers have strong influences on purchase decisions and aspects like brands of products, category of products and choice of retailers. For example, the upper class consumers prefer luxury when buying cars while middle class consumers give more priority to fuel efficiency and resultant savings. Again, the rich customers are particular about buying original spare parts from the authorised retail outlets of the car manufacturers while the middle class people often prefer locally available spare parts to expensive original spare parts. Thus, social class affects customer purchase decision in a big way. Psychological influences on buying behaviour: The two internal influences that can influence customer-buying decision are perception and learning. These two influences are explained as below The perceptions customers have about products influence the purchase decisions of the customers in a big way. Positive perceptions about products lead to optimising purchase decisions of the products. That is why companies like Toyota aim to create positive perceptions about their products in the minds of the customers through advertisements. The learning of the customers about products from their own consumption experience and experience of others play a very important role in making purchase decisions. A positive experience a customer has by using a product like Corolla Altis usually helps in optimising purchase decisions . The two personal factors, which influence decision-making process, are personality and age. The following section elaborate the role of age and personality in decision making processes as under: The personality of a consumer influences their buying choices while buying high involvement products like cars. For example, the customer with lively personality would prefer buying models of bright colours. This shows that personality has deep impact on the purchase decisions. The age of the customers, have strong impact on the purchase decisions of the buyers especially while buying high involvement products like cars. For example, aged customers would prefer models having sober shades like black or grey while younger customers would prefer gaudy colours like blue or red. Again, aged customers would prefer family cars while younger customers would prefer sports cars, which are very expensive. This discussion shows that age influences the purchase decision-making process of buyers (Qian, Soopramanien, 2015). Marketing strategy recommendations: The company must form marketing strategies to present its high-end products like Corolla Altis as family assets while advertising these premium products. Toyota must introduce the low price variant premium car models like Corolla Altis. This marketing strategy would help the company to cater to the huge middle class population in markets like Singapore. This would generate huge revenue for the company. Toyota must expand its product line to incorporate other automobile segments like motor cycle. It must also venture into the financial market. This would allow it to finance the purchases of its own products and attract more customers. The company must strengthen its hold over the emerging markets of Asia and South America. Toyota can introduce its low price variants and form marketing strategies to promote these variants. This would help the company to increase its international market penetration. The company must increase its presence on the digital platform. This will enable consumers from all over the world, view and order the premium models. Toyota must increase the number of service centres and retail outlets in profitable markets like Singapore (Gonzlez, Crcaba, Ventura, 2015). It is recommended that Toyota divide its pricing strategies into two parts. They are product price and product financing. Toyota while introducing new model must use scheming pricing to reap maximum profit from the market. Then it must lower the price and introduce discounts to compete with the competitors like Nissan. It should market the improved version of existing models in the same way. Toyota should provide hundred percent financing to customers buying premium models like Corolla Altis. Toyota is recommended to promote its low and high price brands in all its significant markets like Singapore. The company should promote its low price models among the middle class. It must promote its premium models among the high class. This combined marketing strategy would allow the company to target the middle, upper-middle and the upper class customers. This would allow the company to earn high profits and competitive advantage. Conclusion: The detailed discussion shows that middle to higher products are generally expensive and requires the companies heavy investments to manufacture them. 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