Published in Jan-Feb 2021
A consumer’s buying decision making process is complex, and although the stages of the buying process remain the same for every product or service category, the emphasis placed or time spent in each stage differs. This happens because some products or services are low involvement purchases while others require high involvement. The rest lie anywhere on the spectrum between either extreme.
Cars are high involvement purchases as they involve money, personal image, safety and security of the family. The purchase is infrequent and therefore invokes high involvement and extensive research. The decision-makers obtain information from multiple channels and process it.
Fishbein and Ajzen’s Theory of Reasoned Actions (TRA) (see Figure 1) states that purchases for high involvement products or services start with two sets of beliefs: personal and normative. The personal beliefs create attitudes and the normative beliefs (formed by outside influences) affect subjective norms. A complex interaction of both sets of beliefs leads to purchase intentions.
In practice, both sets of beliefs interact with one another at all four stages of the buying process: Initial consideration, active evaluation, closure and post-purchase experience. This process is not linear but iterative. In the digital era, when information is abundant and updated in real-time, it is quite possible for consumers to reach the closure stage and then find new information that takes them back to the initial consideration stage and the process starts all over again.
With cars, the entire family gets involved in the decision-making process, as all family members are its users. Different family members assume diverse roles in the decision-making process. A family member can take on more than one or no role at all. Every family member has his or her own sets of internal and normative beliefs that influence the process at each stage. Conflicts on certain specifics, such as personal needs, utility and power among family members are inevitable. As it is hard for all of them to agree on everything, the car purchase decision is almost always accommodative rather than consensual. Car buying decisions have some unique dimensions: first or repeat purchase, new or used car, car type, local or imported, upgrade or same category, maintenance costs, resale value, a dealership’s ability to repair and financing rates and options.
The purchase process, as in other categories, starts with what triggers the need for a car. If it is a first purchase, they may include family commuting needs, affordability, value, safety, and security. Unlike Western markets, where people buy cars to meet individual needs, in Pakistan, family needs take precedence. Not surprisingly, we see more families than individuals enjoying the features in car ads, particularly for entry level cars, such as hatchbacks, subcompact and compact sedans. Personal beliefs influence first-time buying decisions more than normative beliefs. Rational factors such as quality, performance, value, technology, safety and security play a significant role in the type of car, new or used, and brand choice decisions. Normative beliefs influence decisions more for high-end, mid to full-size SUVs and compact to mid-size executive cars, where the buyer is motivated to make a statement of success rather than meeting rational needs. Since first-time car buyers do not have a frame of reference to compare with, factors like fuel economy, maintenance costs, technology and space play a lesser role in buying decisions. In the case of a repeat purchase, however, space, new technology, affordability, quality, performance, value and fuel efficiency take the front seat. A key decision point here is whether to upgrade or stay in the same category. Repeat buyers also use reliability, dealer service and resale value as key considerations and usually buy their next car after four to five years of buying their first car. Both first-time and repeat buyers usually consider between three to five brands at the initial stage.
At this point, consumers add or subtract brands or options as they evaluate what they want. Since a car is a high-ticket item, buyers make objective choices from the beginning. At every step, they are trying to ensure that the price divided by value equals less than one, meaning that they get the right or even more value for the amount of money they spend. The right mix of rational and emotional attributes positively contributes to the value. Both personal and normative beliefs based on the information they have collected play a significant role. Their beliefs about how each option performs on attributes, such as quality, performance, value, technology, safety and security, aesthetics, uniqueness, self-image and social status knock down some alternatives from further consideration and may draw their attention to those ignored earlier. Although online platforms have expanded their information sources to include social media, company websites, partner platforms and digital as well as traditional media, old-fashioned word of mouth is still the most trusted source of information. Reason? Credibility, because a car purchase puts a great deal of pressure on the wallet. However, the trend for younger influencers in the family, visiting online sources, and reading online product reviews is picking up.
Since a car purchase is mostly a family decision, the family reaches a purchase decision rather than makes it. This is because the process involves sequential steps. At each stage of the process, personal or normative beliefs narrow down the choice set (sometimes expanding it too, due to the availability of new information). The closing stage involves decisions regarding financing alternatives, the practicalities of the decision, the influence of brand image, credibility of the sources of information, colour and attitude of the sales staff. Consumers do their research on their own but validate their findings through dealers. Sometimes, more information from them is also welcome. Online bookings are not yet a common practice. Touching the car, feeling it, test driving it, coupled with the overall purchase experience is vital in closing the deal.
The post-purchase experience is necessary for successful marketing. The dealerships’ ability to repair or service the car, regular reminders for regular check-ups and maintenance tips result in positive word of mouth and in buyers becoming brand advocates. More than half of the respondents who consider four to five brands recommend at least one brand to others, which is often different from the one they own. It is therefore important that lost customers are also engaged to stay profitable.
In cars, brand loyalty is low, given that the buyer’s initial consideration-set starts with four or five brands. With more information flowing in, this could increase at later stages of the process. It means that car marketing companies should re-look at their loyalty programmes and build more customer engagement. Every lost customer is an opportunity to bring in another one through advocacy. Given that car purchasing is a complex decision, the odds are high that the car a customer has purchased may not be the one he loves the most.
Khalid Naseem is Head of Strategy, Firebolt63. email@example.com