Business research methods and applications

Values and the Automobile Market

In the last decade, the luxury car segment became one of the most competitive in the automobile market. Many American consumers who purchase luxury cars prefer imports from Germany and Japan.

A marketing vice president with General Motors once commented, "Import-committed buyers have been frustrating to us." This type of thinking has led industry analysts to argue that to successfully compete in the luxury car segment, U, S, carmakers need to develop better understanding of the consumers so that they can better segment the market and better position their products via more effective advertising. Insight into the foreign-domestic luxury car choice may result from examining owners' personal values in addition to their evaluations of car attributes, because luxury cars, like many other conspicuously consumed luxury products, may be purchased mainly for value-expressive reasons.

Industry analysts believe it would be important to assess whether personal values of consumers could be used to explain ownership of American, German, and Japanese luxury cars. Further, they believe they should also assess whether knowledge of owners' personal values provides any additional information useful in explaining ownership of American, German, and Japanese luxury cars beyond that obtained from their evaluations of the car's attributes.

Personal values are likely to provide insights into reasons for ownership of luxury cars for at least two reasons. First, Americans have always had a very personal relationship with their cars and have used them as symbols of their self-concept. For instance, people who value a sense of accomplishment are quite likely to desire a luxury car that they feel is an appropriate symbol of their achievement, whereas people who value fun, enjoyment, and excitement are likely to desire a luxury car that they perceive as fun and exciting to drive. An advertiser trying to persuade the former segment to purchase a luxury car should position the car as a status symbol that will help its owners demonstrate their accomplishments to others. Similarly, an advertiser trying to persuade the latter segment to purchase a luxury car should position the car as a fun and exciting car to drive. In other words, effective advertising shows consumers how purchasing a given product will help them achieve their valued state, because brands tied to values will be perceived more favorably than brands that deliver more mundane benefits.

Second, when a market is overcrowded with competing brands offering very similar options -as is the case with the luxury car market- consumers are quite likely to choose between brands on the basis of value-expressive considerations.

METHOD

Data were collected via a mail survey sent to 498 consumers chosen at random from a list obtained from a syndicated research company located in an affluent county in a southern state. The list contained names of people who had purchased either a luxury American car (Cadillac or Lincoln Mercury), a luxury German car (Mercedes or BMW), or a luxury Japanese Car (Infiniti or Lexus) within the last year. A cover letter explained that the survey was part of an academic research project. People were asked to return the questionnaires anonymously to a university address (a postage-paid envelope was provided with each survey). Beyond an appeal to help the researchers, respondents were not offered any incentives to complete the surveys. Of the 498 surveys originally sent, 17 were returned by the post office as undeliverable. One hundred fifty-five completed surveys were receive, for a response rate of 32.2% [155/(498-17)].

The Survey Instrument

The survey included questions on (1) various issues that people consider when purchasing new cars, (2) importance of car attributes, (3) importance of different values, and (4) demographics (sex, age, education, and family income). Questions relating to the issues that people consider when purchasing new cars where developed through initial interviews with consumers and were measured with a 7-point Likert scale with end anchors of "strongly agree" and "strongly disagree." (See Case Exhibit 32.1.) A list of 12 car attributes was developed from the initial interviews with consumers and by consulting Consumer Reports. (See Case Exhibit 32.2.) The importance of each attribute was measured with a 7-point numerical scale with end points labeled "very important" and "very unimportant." For measuring the importance of values, the List of Values (LOV) scale was used to measure the importance of values. (See Case Exhibit 32.3.) Respondents were asked to rate each of the eight values (we combined fun, enjoyment, and excitement into one value) on a 7-point numerical scale with end points labeled "very important" and "very unimportant."

The Sample

Of the 155 respondents in the sample, 58 (37.4%) owned an American luxury car, 38 (24.5%) owned a European luxury car, and 59 (38.1%) owned a Japanese luxury car. The majority of the sample consisted of consumers who were older (85% were 35 years of age or above), more educated (64% were college graduates), and economically well-off (87.2% earned $65,000 or more).

The Code Book

Case Exhibit 32.4 lists the Excel File variable names and identifies codes for these variables.

ADDITIONAL INFORMATION

Several of the questions will require the use of a computerized database. It is in the Excel Format attached together in Please use the raw data emailed to complete the questions below.

Questions

Is the sampling method adequate? Is the attitude measure scale sound? Explain.

Using the computerized database with a statistical software package, calculate the means of the three automotive groups for the values variables. Do any of the values variables show significant differences among American, Japanese, and European car owners?

Are there any significant differences on importance of attributes?

Write a short statement interpreting the results of this research.

Are any of the value scale items highly correlated?

Should multivariate analysis be used to understand the data?

Issues That Consumers Consider When Buying Luxury Automobiles (Case Exhibit 32.1)

Codes Issues

Having a luxury car is a major part of my fun and excitement* Issue

Owning a luxury car is part of "being good to myself." Issue

When I was able to buy my first luxury car, I felt a sense of accomplishment Issue 3 enjoy giving my friends advice about luxury cars Issue

Getting a good deal when I buy a luxury car makes me feel better about myself Issue 5 seek novelty and I am willing to try new innovations in cars Issue 6 tend to buy the same brand of the car several times in a row Issue 7 tend to buy from the same dealer several times in a row Issue 8 usually use sources of information such as Consumer Reports in deciding on car Issue 9 usually visit three or more dealerships before I buy a car

Issue10 would read a brochure or watch a video about defensive driving

Issue11

When buying a new luxury car, my family's opinion is very important to me

Issue12