Assignment

On
Factors Influencing Consumer Buying Behavior of Car

Submitted by:
Swaraj Mathema

Submitted to:
Dr. Sanjeev Pradhan

MBA 2nd Semester, 2023 (Section B)

January 20, 2024

Introduction

Consumer preferences refer to individual interests or tastes, which can be

determined by the usage of various types of goods by consumers. They allow
consumers to rank these goods based on their usage derived by their consumption.
These preferences need not be influenced by income and prices. An individual's
interests or tastes need not necessarily depend upon one's capability to buy these
products. Consumer preference sets the base for customer demand. Change in
price, customer reaction to the change in the price, customer readiness to pay for
the product, in turn affect profitability, which will help to understand customer
behavior. Based on customer requirements, customer preferences over light
commercial vehicles depends on various factors. These factors include service
quality, latest technology, and availability of vehicles, relationship management,
resale value and comfort which would play a major role in determining customer
preference.

Understanding the buying behavior of the target market is the essential task of
marketing manager under modern marketing. It is not easy to predict the complex
mind of the consumers as each individual is a unique product of genetics,
environment and experience. Consumer behavior considers the many reasons
personal, situational, psychological, and social why people shop for products, buy
and use them, sometimes become loyal customers, and then dispose of them.
Today even marketers pay for search advertising, or ads that appear on the Web
pages, as likes to find out what kind of things interest a consumer. Businesses often
try to influence a consumer’s behavior with things they can control such as the
layout of a store, music, grouping and availability of products, pricing, and
advertising. Some of the factors influencing consumer buying behavior of car are
explained below:

1. Personal Factors

Factors that are personal to the consumers influence their buying behavior.
These personal factors differ from person to person, thereby producing different
perceptions and consumer behavior. Age is a major factor that influences buying
behavior. The buying choices of youth differ from that of middle-aged people.
Elderly people have a totally different buying behavior. Income has the ability to
influence the buying behavior of a person. Higher income gives higher purchasing
power to consumers. When a consumer has higher disposable income, it gives
more opportunity for the consumer to spend on luxurious products. Whereas low-
income or middle-income group consumers spend most of their income on basic
needs. Lifestyle is an attitude, and a way in which an individual stay in the society.
The buying behavior is highly influenced by the lifestyle of a consumer.
Age and life stage significantly impact car preferences. Younger buyers
often prioritize technology, connectivity, and stylish designs, seeking cars
equipped with the latest features and futuristic aesthetics. Meanwhile, older buyers,
especially those with families or retirees, tend to prioritize comfort, safety features,
and reliability. For them, a vehicle's ease of use and safety aspects might outweigh
the allure of cutting-edge technology.

Income and financial situations play a pivotal role in car choices.

Affordability heavily influences the range of options available to buyers. Those
with higher incomes might lean towards luxury cars that signify prestige or status,
while budget constraints might lead others to prioritize practicality and opt for
more cost-effective or fuel-efficient models that align with their financial
capabilities.

Lifestyle and usage need profoundly impact car-buying decisions. A person's

daily routine, whether they commute long distances, require ample cargo space for
hobbies or outdoor activities, or need a vehicle suitable for family use, greatly
influences their choice. For instance, someone living in an urban area might prefer
a compact car for easy maneuverability and parking, while someone in a rural
setting might prioritize off-road capabilities or towing capacity.

Personal preferences encompass a wide spectrum, including design tastes,

brand loyalty, and specific feature requirements. Design preferences range from
classic and understated to bold and futuristic, with some buyers deeply loyal to a
particular brand due to past positive experiences or perceived brand values.
Features like advanced safety technology, entertainment systems, or eco-friendly
options can heavily sway a buyer's decision based on their individual preferences
and priorities.

2. Physical factor

Products are the things which readily available in the market with the
capable to buy, utilize, feel, and thus satisfying the needs and wants of the
consumers. General products are not simply the sets composed of tangible product
attributes, but products being sold in the market, including physical products,
services, experience, events, characters, locations, belongings, organizations,
information, and ideas.

When it comes to vehicle type and size, individuals often gravitate toward
models that align with their lifestyle or specific needs. SUVs offer versatility for
families, providing ample space and often a higher seating position for better
visibility. Sedans might attract those seeking fuel efficiency and a sleeker design
for city driving. Trucks appeal to consumers requiring towing capabilities or
rugged utility for work or outdoor activities. This preference reflects not just
personal taste but also practical considerations, as the vehicle type often
determines how it will be used on a daily basis, influencing the decision-making
process significantly.

The color and exterior appearance of a car play a pivotal role in the
emotional aspect of the purchase. Personal taste and style preferences heavily
influence choices here. Some might prefer vibrant or bold colors that reflect their
personality, while others opt for more classic or subdued tones. The exterior
design, including the body shape, grille style, and overall aesthetics, contributes to
the initial attraction towards a vehicle. This emotional connection often sets the
stage for the overall satisfaction with the purchase.

Interior comfort and space are crucial factors impacting the overall driving
experience. Comfortable seating, sufficient legroom, ample cargo space, and an
ergonomic cabin layout contribute to a pleasant ride. The perceived quality of
interior materials, such as upholstery, dashboard materials, and trim, affects the
perceived value and luxury of the vehicle. Additionally, the visibility from the
driver's seat and the driving position contribute to the feeling of control and safety,
influencing the decision-making process for potential buyers. Finally, user-friendly
features, intuitive controls, and the accessibility of various functions within the car
enhance convenience and contribute significantly to the overall satisfaction of
owning the vehicle.
 3. Psychological Factors
Human psychology is a major determinant of consumer behavior. These
factors are difficult to measure but are powerful enough to influence a buying
decision. Perception and beliefs significantly shape how consumers view car
brands and their offerings. These perceptions, formed through various channels
like marketing messages, word-of-mouth, or personal experiences, deeply
influence decision-making. A brand's reputation for reliability, safety, innovation,
or even eco-friendliness can weigh heavily on a buyer's mind. Past experiences
with a particular brand can solidify beliefs and significantly impact whether
someone chooses a specific car over another, often emphasizing trust and
familiarity.

Emotions intertwine deeply with the car-buying experience. For many

individuals, a vehicle transcends mere transportation; it becomes an expression of
personal identity, values, and lifestyle. Emotions like pride, status, or the desire for
adventure become pivotal influencers. A car may symbolize someone's
achievements or aspirations, reflecting their taste and social status. The emotional
connection to a vehicle can often override purely rational considerations,
compelling individuals to choose cars that resonate with their sense of self and
desired image.

Social influence plays a compelling role in car-buying decisions. Friends,

family, and broader social circles can sway opinions through recommendations,
trends, and societal norms. Peer acceptance or expectations can significantly
impact someone's choice of vehicle. People often consider how their car choice
aligns with or stands out within their social group, sometimes leaning towards
specific brands or models that are popular or respected among their peers.
 These psychological factors collectively form a complex web that guides
individuals through the car-buying process. Personal motivations, emotional
attachments, social influences, and cognitive biases converge to shape a decision
that often extends beyond the mere functionality of the vehicle, deeply resonating
with personal identity and social integration.

4. Social Factors
Social factors play a significant role in influencing consumer buying behavior for
cars. These factors are related to the influence of social groups, culture, social
class, reference groups, and other social dynamics. Understanding these social
influences is crucial for marketers and manufacturers to effectively target and
appeal to their target audience. Here are some key social factors influencing
consumer car-buying behavior:
1. Reference Groups:
 Consumers often look to reference groups, such as friends, family,
colleagues, and online communities, for opinions and
recommendations. Positive experiences or preferences within these
groups can strongly influence an individual's choice of car.
2. Social Class:
 Social class can impact the type of car a person chooses. Different
social classes may have distinct preferences for brands, models, and
features. Luxury cars might be associated with higher social classes,
while more practical and economical choices may be preferred by
lower social classes.
3. Culture and Subculture:
 Cultural values and norms influence car preferences. For example, in
some cultures, status and prestige may be important, leading
consumers to choose luxury cars. In other cultures, practicality and
fuel efficiency may be more highly valued.
4. Social Status and Image:
 Cars often serve as status symbols, reflecting an individual's social
standing and lifestyle. Consumers may choose cars that align with
their desired social image, whether it's a high-end luxury vehicle, a
rugged off-road model, or an environmentally friendly hybrid.
5. Influence of Celebrities and Influencers:
 Celebrity endorsements and influencer marketing can have a
significant impact on consumer perceptions. If a well-known figure or
influencer promotes a particular car brand or model, it can influence
the choices of their followers.
6. Social Trends and Norms:
 Social trends and norms, such as increasing awareness of
environmental issues, can influence car-buying decisions. Consumers
may be more inclined to choose electric or hybrid vehicles if there is a
societal trend towards sustainability.
7. Word of Mouth and social media:
 Recommendations and reviews from peers, as well as information
obtained through social media platforms, play a crucial role. Social
media platforms are often used for research and sharing experiences,
influencing the opinions and decisions of potential car buyers.
8. Family and Social Structure:
 Family and social structure influence car choices. The needs and
preferences of a family, as well as cultural expectations, can guide
individuals toward specific types of vehicles, such as family-friendly
SUVs or minivans.
9. Community and Neighborhood Influences:
 The characteristics of the community or neighborhood in which an
individual resides can impact car choices. Urban and suburban
environments may have different requirements, influencing decisions
regarding car size, fuel efficiency, and parking considerations.
 10.Cultural Symbols and Iconography:
Certain car models or brands may become cultural symbols associated with
specific values or lifestyles. Advertisements often leverage these symbols to create
emotional connections with consumers.
By understanding and considering these social factors, car manufacturers and
marketers can tailor their products, messaging, and advertising strategies to
resonate with the values and aspirations of their target audience, ultimately
influencing consumer buying behavior.

5. Demographic factors:
Demographic factors play a crucial role in influencing consumer buying behavior
for cars. These factors are related to the characteristics of a population and can
provide insights into the preferences, needs, and behaviors of different consumer
groups. Here are some key demographic factors that influence car-buying
decisions:
1. Age:
 Different age groups may have varying preferences for car types and
features. For example, younger consumers might be more interested in
sporty, compact cars, while older consumers may prioritize comfort
and safety features in larger vehicles.
2. Income:
 Income levels significantly impact the type and brand of cars
consumers can afford. High-income individuals may opt for luxury or
high-performance cars, while those with lower incomes may prioritize
cost-effective and fuel-efficient options.
3. Occupation:
 The nature of one's occupation can influence the type of car needed.
For instance, a salesperson may require a reliable and fuel-efficient
vehicle for frequent travel, while someone in a managerial position
might prefer a more luxurious car.
4. Family Size:
 The size of the family can affect the choice of car. Larger families
may opt for minivans or SUVs for their spacious interiors, while
smaller families or individuals may prefer smaller, more fuel-efficient
cars.
5. Marital Status:
 Married couples may consider factors such as family needs, safety,
and practicality when purchasing a car. Single individuals may
prioritize style and performance.
6. Education:
 Education levels can influence the consumer's awareness of various
car features, technological advancements, and environmental
considerations. More educated consumers may be inclined to research
and prioritize cars with advanced features.
7. Geographic Location:
 The region or country in which consumers live can impact their car
preferences. In urban areas, individuals may prioritize compact cars
for ease of parking, while those in rural areas might prefer larger
vehicles for off-road capabilities.
8. Ethnicity and Cultural Background:
 Cultural influences can play a significant role in car preferences.
Certain ethnic or cultural groups may have specific preferences for
brands, colors, or types of cars based on cultural norms and values.
9. Gender:
 While gender stereotypes are evolving, certain preferences may still
be associated with gender. For example, sports cars might be
marketed more towards men, while compact or hybrid cars might be
targeted towards women.
10.Lifestyle:
 Consumer lifestyles, including hobbies, interests, and activities, can
influence car choices. Outdoor enthusiasts might opt for SUVs or off-
 road vehicles, while environmentally conscious consumers may
choose electric or hybrid cars.
Understanding these demographic factors helps car manufacturers and marketers
tailor their products, messaging, and advertising strategies to appeal to specific
consumer segments, ultimately influencing buying behavior.

6. Environmental factor:
Environmental factors have become increasingly important in influencing
consumer buying behavior for cars. As environmental awareness and concerns
about sustainability grow, consumers are more likely to consider the ecological
impact of their choices. Here are key environmental factors influencing consumer
car-buying behavior:
1. Fuel Efficiency and Emissions:
 Consumers are increasingly concerned about the environmental
impact of vehicle emissions. Fuel efficiency and lower emissions are
often key factors influencing car choices. Hybrid and electric vehicles
(EVs) have gained popularity as consumers seek eco-friendly
alternatives.
2. Government Regulations and Incentives:
 Government regulations and incentives, such as tax credits for electric
vehicles or stricter emissions standards, can significantly influence
consumer behavior. In regions where governments provide incentives
for environmentally friendly choices, consumers may be more
inclined to opt for green vehicles.
3. Environmental Awareness and Consciousness:
 Growing environmental awareness has led consumers to prioritize
sustainability. Car buyers may choose brands or models that are
perceived as environmentally responsible, with manufacturers
emphasizing eco-friendly features and practices.
4. Alternative Fuel Sources:
 The availability of alternative fuel sources, such as electric, hydrogen,
or biofuels, impacts consumer choices. The desire to reduce
dependence on traditional fossil fuels and lower carbon footprints may
drive consumers toward vehicles powered by alternative fuels.
5. Corporate Social Responsibility (CSR):
 Consumers are increasingly considering a company's commitment to
environmental responsibility as part of their decision-making process.
Car manufacturers with strong CSR initiatives and a commitment to
sustainability may attract environmentally conscious consumers.
6. Green Certifications and Labels:
 Eco-friendly certifications and labels, such as energy efficiency labels
or environmental certifications, can influence consumer perceptions.
Consumers may be more likely to choose cars that have been certified
as meeting specific environmental standards.
7. Recycling and Materials:
 Consumers are becoming more aware of the environmental impact of
the manufacturing process. Cars made with recycled materials or
designed for easier recycling may appeal to environmentally
conscious buyers.
8. Lawsuits and Scandals:
 Instances of environmental controversies, such as emissions scandals,
can significantly impact consumer trust. Consumers may be more
cautious and research a company's environmental track record before
making a purchase.
9. Long-Term Cost Savings:
 Some environmentally friendly vehicles, such as electric cars, may
offer long-term cost savings in terms of fuel and maintenance
expenses. This economic incentive can influence consumers looking
for both environmental benefits and financial advantages.
 10.Rising Awareness of Climate Change:
 The global focus on climate change has heightened awareness of the
environmental impact of various industries, including the automotive
sector. Consumers may choose vehicles that align with their desire to
contribute to environmental conservation and combat climate change.

Car manufacturers are responding to these environmental considerations by

developing and promoting more sustainable and eco-friendly features in their
vehicles. As consumers continue to prioritize environmental concerns, these factors
are likely to play an even more significant role in shaping buying behavior in the
automotive market.

Conclusion:

Consumer buying behavior for cars is influenced by a complex interplay of factors,

including demographic, social, and environmental considerations.
Demographically, factors such as age, income, occupation, family size, and
education impact car preferences. Social influences, including reference groups,
cultural norms, social class, and the impact of celebrities and influencers, also play
a pivotal role in shaping consumer choices.
Furthermore, the increasing importance of environmental factors cannot be
understated. Consumers are now more environmentally conscious, considering fuel
efficiency, emissions, alternative fuel sources, and a company's commitment to
sustainability. Government regulations, incentives, and certifications also
contribute to shaping environmentally conscious buying decisions.
In conclusion, car manufacturers and marketers need to carefully navigate these
multifaceted influences to tailor their products and strategies effectively, meeting
the diverse needs and values of consumers in a dynamic and evolving market.