Consumer Learning and Hybrid Vehicle Adoption - Case Study Example

? (Consumer behaviour) Critically discuss the barriers associated with perceived risk in decision-making processes for the chosen product Contents Contents 2 Introduction 3 Discussion 3 The barriers associated with perceived risk in decision-making processes 3 Marketing recommendations 5 Conclusion 6 6 References 7 Introduction For this study regarding the consumer behaviour pattern associated with perceived risk factors and sustainable consumption the innovation of hybrid cars and the reaction of the target customers toward this particular product have been considered. It is evaluated whether the hybrid cars have met the environmental expectations, how far they have been successfully integrated into the society, and the expected future of this kind of technology. Analysis of the consumer behaviour in terms of buying cars, both non-hybrid and hybrid has helped to determine the key factors that a consumer looks into while buying a car. The marketing strategy for the hybrid cars vary for different companies. The company may instigate customer interest by creating a website which maps the development of the product as Toyota had done before the launch of Prius. Also creating online brochures and e-marketing are ways to reach more customers. Discussion The barriers associated with perceived risk in decision-making processes Petrol-electric hybrid cars are launched as alternatives to conventional, internal combustion engine cars. The hybrid automobiles are aimed at achieving higher economy of fuel by combining a conventional engine with a rechargeable battery. The fuel economy of hybrid cars are important in today’s world in perspective to the climatic changes as well is because of the concerns of energy security. The use of petrol-electric hybrid cars causes almost half of the carbon dioxide emissions petrol consumed in conventional fuel cars. Hybrid cars are capturing an increasing share of the domestic automobile (The New York Times, 2007, p.2). Though hybrid cars are not widely integrated into the market still it is a growing range of product and can be successfully used to combat energy and ecological issues. Therefore, it is vital to know the main influencing factors which influence the decision making process of a customer in buying a hybrid car. Some factors are similar to those arising in the acceptance of a new technology by the consumer market. In consumer behaviour, the choice of a product depends on a varying number of factors. In the case of choosing an automobile for buying, customer decision making is a high involvement and often quite complicated process. An automobile, though being a product for regular use, it comes under a product category which is rarely bought and bought after an intricate evaluation process followed by the customer. Also, a car is expensive, a certain range of automobiles come under the premium products category and a number of alternative brands and types can be found in the market. Additionally, the customer has the perceived risk of not choosing the perfect automobile to suit his needs and having to bear a huge cost to rectify the mistake and cars being an investment for a long time, consumers show the trend of having a more complex and long process of decision making. The consumer decision making process involves both intrinsic and extrinsic methods (The Wall Street Journal, 2009). Mostly, hybrid cars are seen to be purchased for social reasons and concern for environment is a lesser influential factor in the consumer decision making process. It is seen that though many people are aware of the potential damage and threats to then ecological system and want to help in balancing the environment, the willingness of the customers rarely changes into the actual buying behaviour due to the above mentioned factors that majorly influence their buying behaviour. The increase in energy prices and incomes largely and most significantly impact the buying behaviour of the consumers for the hybrid vehicles (Edwards, 2010, p. 56). Some factors like high energy consumption and more emissions involved in producing hybrid automobiles makes it difficult to compete with the conventional fuel automobiles. Marketing recommendations The technological advances and efficiency gains are not sufficient for bringing the consumer consumption patterns to adopt a sustainable approach. Major changes are needed to be influenced into the lifestyles of the consumers and the behavioural pattern of the consumers in evaluating and buying the cars. The companies have to play a leadership role in encouraging and developing more sustainable choices for the consumers (Anderson, 2005, p.12). The companies which manufacture petrol-electric hybrid cars should use effective marketing strategies to remove the barriers associated with the decision making process of the consumers. They should use effective advertising and campaigns to raise awareness in order to encourage and influence the customers’ decision making process while buying an automobile. The awareness campaigns and extensive market communications would influence and redirect the choice of the customers towards the hybrid vehicles. The implementation of social marketers to work further on these factors should be done to influence the customers, policy makers and the whole community to promote the usage of these hybrid cars keeping in mind the benefits that the ecosystem will derive from an increased popularity of these low emission cars (Dunn, 2013, p.4). The pricing strategy should be such that the company offers the best price for selling instead of setting a high price so that the target consumer finds it attractive enough to make a quick buying decision. The company should highly promote the hybrid mainly focusing on customer awareness and on keeping the customers informed about the developments. This is the same strategy implemented by the Toyota Prius when it was launched in the market. The companies can collaborate with public transport companies to use hybrid automobiles in public transportation which is likely to be a very beneficial situation for all. The Prius ensured high customer value due to certain unique factors like efficiency in fuel cost, saving time for gas filling, generated high buzz in the market, ensured in providing environmental benefit. Apart from these factors, the marketing of Prius was supported by the high reputation of Toyota in the automobile industry. The use of Toyota’s penetration strategy for selling the Prius helped the company to build and hold on to a huge market share. So, when an eco-friendly sustainable product is launched in the market, the company should make sure that the product has competitive advantage in terms of features and specifications apart from the green advantages. While marketing, most stress should be given on the feature of eco friendliness and sustainability of the product. At times, consumers are likely to make buying decisions based on the environmental status the car will provide. Conclusion Since the market for hybrid cards is growing at a steady rate, a hybrid car manufacturing company can create a high sustainable competitive advantage in the automobile industry by implementing effective marketing strategies. There are a number of opportunities for a hybrid car to be successful in the market considering that the governments are eager to support eco-friendly technologies which include the development of these kind of automobile and that the demand for hybrid are growing and there is a huge market for this technology. After the launch of more hybrid cars like The Lexus ES 300, Honda Accord Hybrid and Chevrolet Malibu in the automobile market , an acceleration in the growth of this product segment is expected as is a change in the consumer behaviour pattern to adopt the new sustainable technologies. References Anderson, C. 2005. Electric and Hybrid Cars: A History. [Print]. New Jersey. McFarland. Dunn, P. 2013. Prius Marketing strategies. [Online]. Available at http://www.academia.edu/239996/Prius_Marketing_Case_Study. Edwards, M. 2010. Economics & Business Journal: Green Purchasing Behavior. [Pdf]. Available at http://ecedweb.unomaha.edu/EBJIP2010Edwards.pdf. Heutel, G. 2012. Consumer Learning and Hybrid Vehicle Adoption. [PDF]. Available at http://www.hks.harvard.edu/var/ezp_site/storage/fckeditor/file/pdfs/centers-programs/centers/mrcbg/publications/fwp/mrcbg_fwp_2010-04_Muehlegger_hybridvehicle.pdf. The New York Times. 2007. Green Consumerism: Buying Into the Green Movement. [Online]. Available at http://www.nytimes.com/2007/07/01/fashion/01green.html?pagewanted=all&_r=0. The Wall Street Journal. 2009. House Passes Climate Bill.ouse passes Climate BillH [Online]. Available at http://online.wsj.com/news/articles/SB124602039232560485. Read More