Consumer Making Decision & Behavior - Term Paper Example

Consumer making decision & behaviour Table of contents Executive summary 1 Introduction 2 Influences on Consumer Decision Making 3 Toyota Camry 4 Concepts used by Toyota Camry 5 Nissan Maxima 8 Concepts used by Nissan Maxima 9 Conclusion 12 References 13 Executive summary This paper is an analysis of the consumer behaviour when purchasing a car from either Toyota or Nissan. The brands of the cars analysed are the Toyota Camry and Nissan Maxima. A brief description of Toyota Motor Corporation and Nissan Motor Company Limited has been given. The objective of the project is to analyse how the two companies differ in influencing consumer behaviour when deciding which car to buy. Information gathered shows how well Toyota and Nissan understand their target markets. Consumers are viewed as individuals and decision makers. Introduction Automobiles are manufactured with the intent of transporting passengers or goods from one place to another. Automobiles usually have four wheels and run on roads. There are roughly 600 million automobiles in the world today and that number is increasing exponentially in China and India (Shimokawa 2010). In 2007, 71.9 million automobiles were sold worldwide while in the year 2008, 70 million automobiles were produced worldwide (Shimokawa 2010). In the United States alone, there are 250 million automobiles in use today (Shimokawa 2010). In the year 2007, the 806 automobiles around the world burnt 260 billion gallons of petrol and diesel fuel (Shimokawa 2010). With the economic recession that is being felt globally, there has been a rise in oil prices that has pressured the automotive industry with a combination of changes in consumer habits and increase in the cost of raw materials. The public transport sector offers great competition as consumers are forced to re-evaluate their usage of private vehicles. Going for small cars is a smart and trendy decision for many consumers because of the volatility of oil prices. Toyota Motor Corporation (TMC) is a multinational corporation that was founded in 1937 by Kiichiro Toyoda. TMC is headquartered in Japan and has currently employed over 71000 people (Shimokawa 2010). By both production and sales, TMC is the world’s largest automobile maker. TMC began participating in motor sports after receiving its first Japanese Quality Control Award in the 1980s. Toyota has plants that manufacture and assemble automobiles for the local market. This factories are in Argentina, Australia, Brazil, Canada, China, Colombia, Czech Republic, Egypt, France, India, Indonesia, Japan, Malaysia, Mexico, Pakistan, Poland, Portugal, Russia, South Africa, Sri Lanka, Thailand, the Philippines, the United Kingdom, the United States, Turkey, UAE, Venezuela and Vietnam. Nissan Motor Company Ltd, or simply Nissan, is one of the largest multinational automobile makers and is headquartered Yokohama in Japan. Nissan, Toyota and Honda have the largest market share for the automotive industries in Asia, thereby encroaching on the previously dominant United States based General Motors, Chrysler and Ford. Since 1950, Nissan has been producing and exporting mainstream automobiles (Shimokawa 2010). Although Nissan does not develop kei cars, the company has been selling the kei cars as a joint venture with Suzuki and other Japanese automotive manufacturers. In 2010, Nissan is expected to launch electric cars with different business models in Europe (Shimokawa 2010). Nissan is currently developing a lithium-ion battery that will replace the currently used manganese spinel cell. Nissan has factories positioned all over the world in Brazil, Egypt, India, Indonesia, Iran, Japan, Malaysia, Mexico, Morocco, Pakistan, Philippines, Republic of China, Russia, South Africa, Spain, Thailand, the United Kingdom and the United States. Influences on Consumer Decision Making Motivation Motivation is an energizing force that causes someone to behave in a certain way to satisfy a need (Blundell 1988). There are five stages of the motivation process namely: Latent need drive, Want or desire, Goal and Behaviour. Once the basic psychological needs are met, such as the need to survive, safety, self-preservation, physical well-being, social needs, love and friendship, people seek to satisfy learned needs (Blundell 1988). These learned needs include achievement, status, prestige, self-respect, self-actualization needs and personal fulfilment. Perception Consumers believe that the look of an automobile is very important as it defines their personality. Three senses are used by consumers when buying a car: vision, touch and hearing (Solomon 2010). These senses are then used by the consumer to form a perception about the external world. Consumers also expect that the engine of the car will be as quiet as it possibly can so that they can remain peaceful and relaxed while driving. Culture Consumers are influenced by culture in that other individuals impose on the customer. Culture is a system of components that include knowledge, customs, art, beliefs, morals and habits that are all interdependent on each other. In marketing, culture is somewhat problematic as it tends to stereotype individuals. However, when done correctly, appealing to the cultural aspect of consumers can influence their behaviour in a way that attracts the consumer to the marketers brand. Toyota Camry The picture below is that of a 2007 Toyota Camry Sportivo (Shimokawa 2010). The Toyota Camry is a series of mid-size automobiles that were manufactured since 1980 and are sold throughout to world (Shimokawa 2010). The name ‘Camry’ comes from the Japanese word ‘kanmuri’ that means ‘crown’. The Camry has been the bestselling car in the United States over the last decade. Canada, Australia and Cambodia are other markets where the Camry has been selling very well. However, the Camry is not a popular car for the European market. Most models of the Camry are not considered as sporty as other rival automobiles because of the comfort-tuned suspensions it has. Camry models with high specifications are considered executive cars in the Asian markets. The Camrys sold in the Asian market since 2001 have sported revised front and rear end treatment. Concepts used by Toyota Camry Culture is an external influence on consumer behaviour that was used by Toyota Camry. The attitudes and believes of the African American women were used by Toyota in marketing the Camry. This is because Toyota knew that the opinions, attitudes and believes of the African American women would influence their choices if the Camry was advertised in an appealing way to them. As discussed below, Toyota used the factor of people that the African American women look up to such as Tyra Banks. Tyra Banks is a leader who the African American women respect because of her views and judgement, and her presence during the unveiling of the Camry was a great influence on consumer behaviour. When marketing the Camry, Toyota targeted African-American women because of their sophisticated social and cultural behaviours that influence their buying patterns. African-Americans have the largest spending power when compared to Hispanics and Asians (Michael & Becker 1973). As much as they are price conscious, African-Americans are motivated by choice and product quality. Toyota targeted the African-American women because they respond to advertising and products that appeal to their pride and heritage. The African-American women also respond to advertising that addresses their ethnic features and needs (Media News 2010). In their advertisement, Toyota appealed to the sociocultural influences that evolve from formal and informal relationships that African-American women have with other people. In June 2008, TMC marketed its 2009 Toyota Camry to African-American women by kicking off a new immersive campaign (Chen 2008). The title of the campaign was ‘If looks could kill’ and was on the a website that was developed by agency partner 42 Entertainment, Toyota's black marketing communications AOR and Burrell Communications Group. The ‘If looks could kill’ campaign combined real-world and digital gaming components. A series of videos were included in the site that featured a Camry driver who was involved in an espionage plot and a resourceful fashion designer. Users who visited the web site could navigate within the three dimension scene, where they could pick up clues that would help the main character and play along with the adventure. In playing the game users would have a chance to win 1000 prizes that were available throughout the campaign that lasted from June 9 to July 27 (Chen 2008). The Toyota marketing communications strategist, Chad Harp said that the campaign had a story line that had a context-driven approach that featured the Camry (Chen 2008). The Camry was a car for the African-American women that would enable her get around in a fast pace with numerous occasions where she would be in the automobile moving around a lot. The ‘If looks could kill’ campaign was also in partnership with Essence magazine, and this drove consumers to the website at a red carpet event that featured predominantly African-American women’s boutiques in national shopping parties, a fashion show and a portal on the Essence magazine’s website. Outreach magazines like Ebony and O as well as media relations worked at reaching the targeted consumers. Evidence bags that had file folders with press materials that were in lockboxes were sent to key media influences. According to Burrell’s account director, Monica Warden, the ‘If looks could kill’ campaign program focused on African-American women’s interest in real-world driven television dramas that had action and adventure, but did not have weapons or blood. This campaign cost Toyota 4.3 million pounds. On 11th July 2008, 600 VIP guests were at the campaign that showcased the online campaign (Chen 2008). The fashion show featured Ghita and the Alexis Phifer's line and Keyshia Cole performed for the showcase. The fashion production was created by Fashion Director Nefertiti Strong, MEGA Dream Productions and Richard E. Pelzer II the Fashion Producer. Three fashion models from Tyra Bank’s America’s Next Top Model were also present. Bennett Career Institute provided the makeup and hairstylists while Patricia Fields for Payless provided the shoes, Invisiwig NYC provided the hair pieces. The secret agent models were on a mission to recover diamonds worth 10 million dollars that had been stolen during an Essence cover photo shoot. This task of recovering the stolen diamonds was completed in a Toyota Camry. The models were wearing Ghita’s fashion and wore cocktail dresses that had Grecian draping on the bodice and shoulders and belts and straps that had muted colour palette of beige, blue, with pops of neon colour. Bianca, who was wearing gold high stilettos, caught the thief of the diamonds red handed. The use of chic fashion appealed to the African American women’s pride. Tyra banks and the fashion celebrities were aimed at influencing the African American women into buying the Camry(Chen 2008). The accuracy of Toyota identifying the culture of the African American women made the job of the sales staff easier. The staff members do not need to waste their time and effort trying to convince a customer why the Camry is better than the competition, and the staff can therefore focus on other good attributes about the car. Consumers choose a product because it appeals to their culture and heritage (Neal et al. 2007). Nissan Maxima The picture below is that of a 2010 Nissan Maxima (Shimokawa 2010). The Nissan Maxima is a four-door sorts car that full sized and manufactured by Nissan. The Maxima made its debut in 1976 where it was an upscale version of the Bluebird. In 1980, the Maxima spun into its own line and has been made continuously since then. Before 2004, most Maximas were built in Japan but since 2004, most Maximas for the North American market have been assembled in Tennessee, United States (Shimokawa 2010). There are three classes of Maximas: the compact class that was manufactured from 1976 to 1988, the mid-size class that was manufactured from 1989 to 2003 and the full-size class that has been in production from 2004 to present (Shimokawa 2010). Concepts used by Nissan Maxima The marketing strategy for the Nissan Maxima aimed at appealing to the internal influences on consumer behaviour. In their advertisement, Nissan appealed to two concepts of consumer behaviour namely: motivation and perception. Nissan spent a lot of money on motivation and perception in their advertisement strategy because they know that the consumers’ behaviour would be influenced in many ways once the consumer had the right message of the Nissan Maxima. The motivation used by Nissan showed customers that they would be part of an elite group of people who had access to the Maxima, the customers who had the car would be the first to use quality and the latest technology and the consumers with the Maxima would be one up on the neighbours. The perception of consumers was influenced by Nissan in making the customers want to be perceived as having good taste when they owned a Maxima. Perception was also used in that consumers who owned a Maxima would be seen to have a flair of making good choices. The Maxima was targeted at middle class people who had taste in cars. The Maxima costs more than other cars in the same calibre on the market but by appealing to customers and letting them know that they would be getting a sense of achievement by being part of a very discerning group was worth the extra more money that the consumers had to pay. The customers who had a Maxima would be perceived as ‘hot’ and a little different from everybody else. Nissan targeted people who had a desire to fit in. The 2005 Nissan Maxima’s radical campaign was one of hot wheels that would burn up city streets. The advertisement by Nissan Maxima showed a charred bicycle that was hanging at a parking sign, a parking meter that had lost its top and its coins were spilling to the ground where there was a pool of molten metal. The advertisement also featured a lamppost that had melted and slumped over. An interactive street theater was staged by the True advertising agency at three different places in New York City. The first stage was at the corner of Houston and Lafayette. The second stage was at the corner of Third and 13th Street while the last stage was at the corner of West Broadway and SoHo Grand. Opposite the Dalí-esque pieces of bent steel, the Maxima that was the supposed cause of the damage was recessed in a prop wall. In Los Angeles, the ‘Hotness’ campaign was at 3rd Street and Harper, Melrose and Spaulding and finally at Highland and Sunset. The ‘Hotness’ campaign was also on television advertisements, regular print advertisements and ‘wild’ posters. The innovative street scene marketing plan by Nissan North America was positioned under backdrops of large printed advertisements that portrayed a charred, burned effect that was caused by the ‘Hot’ Maxima. In the street scenes in New York, the ultra sensory effect was enhanced by glowing lights and heaters that were placed around the vehicles (Yuan 2005). The perception of consumers was influenced by Nissan in making the customers want to be perceived as having good taste when they owned a Maxima. The picture below shows the Nissan Maxima ‘Hot’ street scene (Yuan 2005). When two friends were passing by and saw the stage and the burnt up wall, one of the passersby turned to her friend, asking her if she could see that the Maxima was so hot that it had burned through the wall. Responding to this comment, the prop master, Daryll Merchant, said that that was the whole concept of the advertisement. According to the executive creative director of True, Christopher Davis, people nowadays don’t say ‘cool’ anymore as it is almost uncool to say it, whereas ‘Hot’ is the new vernacular. The Maxima campaign was aimed at selling the idea of hotness. The pieces of the ‘Hot’ campaign were striking. At each site, the fences of parking lots were temporarily removed to make way for the car-ravaged wall that had a built in steam engine. The wall was watched by two security guards. The advertisement was deconstructed every four days at 5:30 am and was put in its new location. The holes that were left from bolting the props down were filled with concrete (Yuan 2005). The response from the street campaign was strong. An example of this strong response was when one bus driver pulled over the bus with people in it and took a picture of the ‘Hot’ Maxima, while someone else called 911. The best compliment that the Maxima street campaign got was that from a passerby who without any prompting, remarked saying ‘Wow, that is hot!’The director of Nissan Marketing, Fred Suckow, was hoping that their unique integrated campaign would reach beyond traditional marketing. The intention of the Maxima street scenes was to engage all the senses of the consumers. The street scenes were intended to grab the attention of the onlookers in the busy metro areas as well as bring to life the ‘Hotness’ campaign and the essence of the Maxima. The customers who had a Maxima would be perceived as ‘hot’ and a little different from everybody else. Nissan targeted people who had a desire to fit in. The three senses in perception that were used in marketing the Maxima were: touch, vision, and hearing. The sense of touch comes into place when consumers enjoy good quality material used in the interior of the Maxima and enjoy a smooth ride. The ‘Hotness’ street campaigns and the televisions advertisements by Nissan Maxima offered perceived qualities that consumers are looking for in a vehicle. The ‘Hot’ campaign of the Maxima appealed to the visual perception concept of consumers. A campaign that appeals to the internal aspect of a consumer causes a hedonic consumption of a brand. The consumer may find themselves buying a product without knowing exactly why they want the product in the first place (Yuan 2005). The consumer simply finds that they are interested in the brand. Conclusion This paper was aimed at giving the consumer’s behaviour while buying either a Toyota Camry or a Nissan Maxima. Brief information about the brands of Camry and Maxima have been given and the strategies used by their companies to market the automobiles. The Toyota Camry was marketed by appealing to the cultural and sub cultural aspects of the African American women. African American women consumers were targeted because they buy brands that appeal their heritage and pride (East et al.2008). The Nissan Maxima on the other hand, targeted the psychological aspects that determine consumer behaviour. Consumers who were targeted were those who want to look and feel ‘Hot’. References Blundell, R 1988, ‘Consumer behaviour: Theory and empirical evidence-a survey’, The Economic Journal, vol. 98, no. 389, pp. 16-65. Chen, R 2008, Toyota Camry campaign targets African American women, The Truth About Cars, viewed 7 August 2010, < http://www.thetruthaboutcars.com/toyota-camry-campaign-targets-african-american-women/>. East, R, Wright, M & Vanhuele, M 2008. Consumer behaviour: Applications in marketing. SAGE Publications Ltd. Media News, 2010, Trends in Online Consumer Behaviour, Media News, viewed 10 August 2010, < http://www.mediabiznet.com.au/news/home.do?newsId=3546>. Michael, R & Becker , G 1973, ‘On the New Theory of Consumer Behaviour’, The Swedish Journal of Economics, vol. 75, no. 4, pp. 378-396. Neal, C, Genevieve, Q & Simone, P 2007. Consumer behaviour: Implications for marketing strategy. 5th ed. McGraw-Hill. Shimokawa, K 2010. Japan and the global automotive industry. Cambridge University Press. Solomon, M 2010. Consumer behavior. 9th ed. Prentice Hall. Yuan, J 2005, Hot wheels: A radical campaign burns up city streets, Nissan’s Hot Campaign, viewed 7 August 2010, . Read More