Consumer Behaviour in the UK Automotive Industry

Consumer behaviour is dependent on few factors that need to be considered in any industry. In the Automotive industry, there are several intertwining factors known. The Internet as one knows well has its importance in nearly every form of trade. Trade is directly dependent on communication, and these days the Internet is considered to be the most important and reliable means of communications for trade.

In view of the Internet being an important medium through which customers may be communicated with, customer behaviour becomes an important subject. Observing customer behaviour in the recent past, its observed that there is immense scope for expanding the automotive industry. This is because there appears to be a better response from customers through the Internet.

Purchases of parts are easily made and are believed to be considerably reliable. For purchasing vehicles, advertising through the Internet is the first step towards pulling in customers. Indeed, this step is believed to be effective as there are a number of individuals who first see adds online, and then decide to physically check a promotion out. With the Internet growing more and more common in the UK, it is expected that there will be much more activity on the part of consumers, which means that the automotive industry is going to do even better than it has in the past.

Introduction:

The world has reached a stage at which everything is close-knit. There are several bodies and structures that interact with each other that appear to be systematic. Globalization for instance is something has many countries, organizations and institutions operating together. Each of the components in the globalization process exists for its self and is self-driven, yet the system functions. In this regard, one might assert that markets of different types and sizes function in a similar manner. The motive industry is an example with its visible effects.

Consumers are actively participating in the industry activity, making it an increasingly viable one for people to invest in. The services and products are known to be quite reliable with an immense amount interesting them. In recent years this has been the case and in time to come it’s expected that there is going to be even more interest in the automotive industry.

Methodology:

This paper includes views of the automotive industry and the communication processes involved. It exposes each part in considerable detail in sections. In doing so, it has managed to cover several areas of interest that explain consumer behaviour. In order to also give on an idea of what strategies organizations employ to boost their profits, fictitious company has been included with figures that are relevant tithe automotive industry. In view of the strategies involved in this company (EXCEED) one can determine how important communication is in the automotive industry.

It is clear enough that the Internet is of tremendous value here, and it is for this reason that it is important to analyse its use. The weak as well as the strong points are exposed here, and one can match these up against the ones employed in EXCEED’s strategies. According to this, one can also assess how effective EXCEED’s strategies are and whether or not they are successful in the automotive industry. In considering the success of the strategies, it must also be asserted that it is believed that the strategies are successful considerably because of the success that automotive industry has had in recent times. It is also hoped that strategies will also go on to be further improved so that the industry does even better .

Description:

The world learns through experience, but living in an image-conscious world may prevent one from learning through his experiences. This is apparently a dilemma considering the fact that one lives in an age of post modernism; a stage during which signs mask reality, and one is often deceived through image-promoting strategies. This is true to say because of the fact that signs, logos and big names are now common, and people are often lured into believing the authenticity of different products because of the promotions they have.

Consumer behaviour is considerably dependent on promotion of products; the manner in which products are promoted directly influences customer behaviour. Each medium used for promotion has its own impact, and the one that is believed to have a tremendous impact is the Internet.

It is believed to boost promotions and sales greatly, and it helps customers in their first step before actually checking a car out. It is through the advertisements on line that they may be attracted and then move towards checking a vehicle out physically at a show room. It is this behaviour that has helped boost the automotive industry significantly. In fact it must be asserted that prior to globalization, consumer behaviour was observed as having a major effect on the development of nations. This is because it helps boost the economy internally as well as having its impact externally .

Prior to the 1940s and 1950s, there was no such aim because of the fact that there were many problems that the country was faced with internally. Socially there were different levels on which the UK had to bring the people together. And perhaps during that time no one had come up with such an idea to divert the attention of the people, which occurred during the 1950s .

From this era began to the shift towards an improved way of life that would take the country into an entirely different era. This era today is called globalization, a phenomenon that brought many parts of the world together through faster communication systems.

Globalization has in fact resulted due to the fact that communication systems have been boosted in recent years. This is also the reason why the present age that people live in is called ‘the age of communication’.

Literature Review:

The expansion that has been witnessed today in organizational structures an effect of globalization too because they are spreading almost all over the world. As Organizations expand it is understood that they tend to face problems in efficiency. These problems need to be handled carefully in a logical manner so that smooth running of the organization can be restored to the way it was when it was located in its originating country. For this to be handled effectively, communication also needs to be of the highest level.

Problems in efficiency may emerge due to the lack of communication or the lack of skills with newer personnel employed in the firm. This is because they are not aware of exactly what the cultural atmosphere was at the original location of the firm. Since they have been newly employed they are bound to face problems such as these.

Strengthening the leadership of an organization automatically means that operations will be handled well, which in turn means that there will be financial gain at the end. In addition to this there won’t be a shortage of executives if organizations indulge in setting up proper training plans for their apt employees. These plans should be implemented both, at home and abroad too so that uniformity is maintained throughout the organization.

It is also essential that trainers do not get polarized in any one location geographically speaking. They should be allowed to exercise their skills and implement them wherever possible. This means that they will also gain maximum teaching experience which they can share with whoever the work with and teach. Three leadership techniques that have been found to increase the performance of an organization:

1. An efficient and lean organization;
2. A talent management plan that focuses on attracting and retaining high-performing individuals; and
3. A performance management program that “rewards employees who meet set goals” (Dorgan, & Dowdy, 2002)

From the above points one can see that the major problem that lies in organizations spreading into other cultures is the internal conflict, but aside from the internal conflicts the trend of marketing American products abroad is one that is patronized by the people of those cultures.

It is the people that make this possible, as human beings are almost always ready for a change especially if it isn’t going to harm them. Accepting new trends that are already in vogue in other neighboring countries is something that further motivates people into welcoming UK products. However, this is not only the case with receiving UK products in Asian countries .

There is now more scope than there was ever before for products to be marketed. The marketing of goods across the globe is yet an extension of what took place in the 1950s. This may be said because of the fact that the effects of this process of globalization are almost the same as what was seen in the United States during the 1950s.
The process of people welcoming products that are brought nearer totem heralds the current trend in globalization. This is the same process that was seen during the 1950s when consumer behaviour was on the rise. This trend is extended to other places in the world today through globalization, which means that there are a whole lot more people aware of what is available around the world. This also means that there is a lot more stuff for people to be engrossed in, which would further help people to be relieved of stress in their everyday lives. But it also must be realized that there are other things to consider besides stress relief and extension of culture (Annesley,1998).

It must be realized here that there is an intense effort to control people economically through consumerism. During the 1950s this was seen as people bought what was advertised. Similarly, this is seen in many countries around the world that buy American products.

An Example of an Organization in the Automotive Industry

For this section, a fictitious organization has been named, but contains data that is relevant to the automotive industry and present-day values.

In contemporary times this may seem to be a problem, as one may not really know which product to trust and which will be dependable. As opposed to having to depend on particular advertising to learn about products, people have often used other customer experiences as their guides. This means that people without experience of a particular product have in fact waited for others to purchase it; the observers its back and observes the performance and customer satisfaction.
If a product happens to satisfy a customer, others will certainly be willing to use the same service providers. Hence, it can be seen here that reputation does matter to service providers and customers.

In addition to this, it must be noted that experience of customers can be used as a vital tool in promoting services. This overshadows the uncertainty of that advertising may often portray. Though advertising is an essential strategy in promoting a product, it must be realized that there are several people that are not easily convinced simply through product display and the like.

In view of this, customer testimonials are essential in proving authenticity of a product, as this proves how many customers have been satisfied and what customers have to say about. This is what many organizations are doing these days in order to boost their services. Indeed, EXCEED is one of them; EXCEED is a motoring supplier, and caters to a significant part of UK’s market. In doing so, it needs to reassure its customers of its services and dedication them all.

EXCEED is believed to be a credible motoring product and services supplier because of its reputation; its reputation is one that has been gained through reliability that customers have experienced through time. In view of this, more and more customers have turned to EXCEED services, as they have been convinced by other customers’ experiences through time.
However, it must be asserted that an organization that operates as one of the biggest in the UK, cannot simply rely on word of mouth for gaining more business or maintaining its position in the market. Thesis because of the fact that competition can easily overturn one’s reputation. In view of this, EXCEED has to go on promoting itself and has to do so in a positive manner by focusing on its strengths and either ameliorating or doing away with products and services that are not gaining headway.

Currently with the reputation EXCEED has, it is the leader in the Upmarket, attending to millions of customers. It has more than 12 million drivers depending on them, has around 3500 uniformed patrols on the job, and caters to 7.5 million calls every year. It is apparent that with this kind of healthy activity in their business that EXCEED is number one. However, like any other organization that provides services and products, EXCEED is not satisfied with what it is doing in the sense that it wants to enhance services that are viable and either do away with or improve the services and products that are less in demand.

In doing this, they have an understanding of the market and what their potentials are, and this lays the platform for EXCEED to construct strategy in terms of marketing and advertising; a strategy that they and the customers too would gain from.*EXCEED also has been on the risen terms of the customers that turn to them. this is a positive sign because the number that turn to their services and products each year. With selling more than 650,000 breakdown policies a year, something that they currently specialize in, there is even more scope for improvement (Breakdown Cover, 2005).

According to the figure below, one can easily observe that breakdown is apparently the primary source of income in EXCEED. There are other sources as well, but this is the most important one, and indeed one that they are promoting. The important point to realize here is that EXCEED knows its strengths well due to the fact that they have kept close watch on all the activity in the company.

They know their past well, they know what is going on at the moment, and they also know what their chances are in the market. In view of their potential being strongest as far as promoting breakdown services, EXCEED believes that its marketing and advertising strategies are of immense importance, as it is through these tools that they can manage to attain a wider segment of the market. In view of the current state of affairs in the market, the following are worth noting.

Product Holding: Volume

Breakdown (motoring): 2,300,000
Motor and home Insurance: 500, 000
Other Financial Services: 45, 000
Breakdown and Insurance: 600, 500
Breakdown and Financial Services: 50, 000
Insurance and Financial Services: 5, 500
Breakdown, Insurance and Financial: 32, 000

In developing further strategies in order to improve EXCEED’s name and services, it is worth generally putting together some of the features around which the company could work. Below are few points that help paint a picture of EXCEED’s functions

EXCEED is believed to offer more than just breakdown coverage; it offers:

• EXCEED UK Breakdown Cover
• EXCEED 5 Star European Breakdown Cover – Round the clock English telephone assistance.
• EXCEED Motor Insurance – 8% discount on line.
• EXCEED Home Insurance – They fish out a panel of insurers for their customers.
• EXCEED Car Data Check – Recovers hidden history of a used car in case you want to purchase it
• EXCEED Vehicle Inspection
• EXCEED Travel Bookshop – 18% off on line from the UK’s largest provider of travel guides.
• EXCEED Driving School – Nation-wide EXCEED approved instructors

Database Strategy through the Internet:

Considering the fact that EXCEED has been allotted around 14 million Pounds to promote their services, it appears that an appropriate promotion can be created. Generally, for this first step, around 40percent of the fund may be used. This is because a database has to be established if any current one cannot be used for the proposed plan here.

In addition to this and appropriate interface has to go along with it, combined with special features that only allow input on the part of customers. In view of the services that are already being provided, EXCEED needs to search into customer needs. This search would have tube conducted through getting their feedback. It is obvious that asking each and every customer about what they would like EXCEED to provide them would not be feasible; it would be better for the customers to have access to EXCEED. This could be done through allowing customers to have access to an interface through which they could feed in their comments and recommendations online (Fill, 1999, 53-59).

They would not need to have passwords and things to that effect, as the feed in process could be made plain and simple for them. This could be carried out through creating some sort of forum where customers can view other customers’ views as well, and thereby give them even better ideas to suggest. In addition to this, the service could have a feature that provides one access to feed in their views, but after entering them, they cannot be deleted. In other words the program manager would only delete whatever is posted in the forum. In this way, comments posted would be safe (Yandi, 2001, 15-21).

In addition to an online provision, at outlets where EXCEED services are provided, the company could maintain on hand comment leaflets or even registers for comments.

The leaflets would provide customers with the opportunity of filling in their comments while they are free. The registers would have to be filled in on the spot. The data from these registers could enter into another portion of the online database for comments and views. The leaflets when filled when the customers have time could be dropped off at any EXCEED outlet of services.

The data from these could also be accumulated and fed into the database as well (Tapp, 2000, 22-34).
In addition to customers posting their comments, it is also advisable for EXCEED to develop a means through which employees such as the patrolman could give their views and comments as well. With this type of feedback EXCEED would be able to determine to what extent each side’s comments are practical. While the customers want services to improve according to their convenience, EXCEED also has to look at the possible changes from the employee’s angle. This would help the management come up with ideas that would satisfy the customers as well the employees in terms of easing their services to the customers (Tapp,2000, 22-34).

In view of the management receiving all the comments through the database, the data needs to be sorted appropriately. Since it has all been collected under employee views and customer views, there is basically no real need to segregate the comments even further. However, there’s need for better arrangement in the presentation of the collected comments. This refers to the placement of services throughout the country and where the comments have been received. This also means that in each comment entry, a customer has to state which part of the country s/he is in.

Depending on whether there is sufficient services in particular areas or not, EXCEED can enhance its services. In addition to this, they can set to work on the requested services. Since it is the Breakdown services that EXCEED wishes to focus on according to the potential in the business, they need to construct the feedback system according to what has been described above. In view of such a database interface being constructed and implemented, it also facilitates customer comments after improvements in services have been made (Smith, 1998, 25-41).

In view of the use of database, it must be asserted that the major cost of it is only in the initial stage. This is because once the databases setup; it only has to be maintained and monitored.

Direct Marketing Customers Program for existing customers:

In the direct marketing step, it must be asserted that at least another 3.5 million – 5 million might have to be invested out of the budget. This is because of the fact that EXCEED needs a stronger approach to its current customers; EXCEED requires a more comprehensive set up with more communication employees in order to realize its goal. Assuming the amount is invested, the following course of action can be taken in order to develop direct marketing.

Though EXCEED recognizes the fact that it has tremendous scope for improving the grip it has on the market and would certainly want more customers, they are wise in the sense that they acknowledge the value of their present customers; they know that if they satisfy their customers their reputation will remain as it was if not improve. In addition to this, it must be asserted that a company has better chances of maintaining stability in all forms when it focuses on the market it has already captured. Maintaining current customers is essential in terms of financial stability as well as customer loyalty.

This is because the customers get to know that the company cares about them through the services that it provides them with. EXCEED knows its products and its customers too, but they need to remain in touch with them in order to make adjustments that the customers need. In view of this concern, the customers feel that the company cares about them; EXCEED needs to make the customers feel this way in order to make sure that the customers don’t feel abandoned or stuck with a product. Hence, there is a need to make sure that each and every customer is aware of the fact that they can communicate with EXCEED directly (Evans et al,2004, 43-44).

In view of the direct communication that is a major part of promotional strategy today, it must be asserted that EXCEED needs to communicate with its customers today as much as possible. In order to communicate with them they can have in place customer relation
officers.

These officers are in charge of remaining in touch with current customers. Indeed, there are many of these officers employed because of the fact that there are also many customers that have to be dealt with. It is not an easy process but certainly is one that is necessary (Pickton, 2001, 64-67).

Considering the means of communications used, e-mail, telephone, fax,etc. are the commonly used ones. Postal mail is also used as a means of contact. However, emailing and telephone contact are most commonly used. Similar to the communication process that communication officers use to stay in touch with current customers, it also must be asserted that customers use the same means as well.

In fact, they may even be familiar with the communication officers who deal with them. This gives one an idea of how the direct communication process works and how effective it is. Certainly, if a customer becomes familiar enough to know a communication officer’s name, it is obvious that the communication process used is effective enough to get desired messages through (Smith, 1998, 25-41).

In view of the effectiveness of the communication proves, it is clear that product promotion can be enhanced. All the communication officers have to do is follow the instructions of the product and tell the customer about it. In addition to this, they can supply them with ways and means of getting hold of the products. Regarding the communication process being simple, it certainly is, but when one has to focus of the breakdown of it all, it gets a little tedious. This is because of the fact that one needs to know the market well, and see who is interested more in the products and services that EXCEED provides.

In view of this, there are few factors that have to be taken into consideration. These include: age, gender, one’s occupation, lifestyle,etc. Though most people who use EXCEED’s services would want to know more about the products and services the company has to offer it must be asserted that research into the current customer behaviour reveals that there are particular groups that are more volatile and more viable to work with.

This is why communication officers may work more with some customers and less with others. This is not seen as being prejudiced in any way, but it is true to say that the process takes into consideration customer behaviour, and since EXCEED is dealing with millions of customers they need to focus on the ones that they need to build and maintain relationship with. This is precisely what boosts customer loyalty. As far as the customers that are not communicated regularly with, it must be asserted that they are also important customers but they are ones that are easily satisfied with the services they get.

In view of the particular factors that are taken into consideration, it must be asserted that in the UK, both men and women are users of EXCEED services, especially breakdown services. While men are still more likely to be customers, younger age groups are almost even. Older men are more likely than older women to travel long distances, while older women are still likely to be drive and use EXCEED services.

As far as one’s occupation is concerned, both men and women are likely to be service holders of EXCEED because of the fact that they are compelled to drive around. Lifestyle is another thing that is taken into consideration. Again men and women are both likely to use EXCEED services, but the younger they are the less likely they are to have EXCEED services.

In view of some people not having EXCEED services, they can be targeted through the marketing strategy; current customers could be used to spread the word around. However, the more important point to focus on
includes the need to market EXCEED more to people that have already used EXCEED services. If they have not been using the services recently, they can be contacted and reminded of their expired membership. In view of communication methods that need to be used, email and telephone is most commonly used.

Almost all people have an answering machine on at home and a message would be easy to leave for the. Those that have cell phones could either be called or a message or mail could be sent to them. Emailing is common, and for those that use Internet facilities commonly can be easily contacted through it. In view of each customer’s profile, various ways of getting in touch with him or her need to be mentioned(Brierly, 2002, 27-29).

Customers may be asked on order forms how they might be contacted; these details are noted down in order to make sure the more appropriate means of contacting a customer may be used. In addition to the communication means mentioned above, EXCEED could also promote its products and services through alternative means. This would include promoting products through magazines, television, periodicals, radio, and the Internet.

This strictly refers to advertisements that are not personal, as they are opposed to emailing or telephoning a person. Though advertising in the ways mentioned here is quite effective, it must be asserted that it is not the kind that would stimulate the customer’s emotions.

Customers need to be contacted directly when they are or have been regular customers of EXCEED or any other company; it makes them feel valued, and again here it must be emphasized that the value of these feelings are crucial to maintain EXCEED services as they currently are offering incentives is important whether communication officers use direct contact of advertising strategies (Percy et al, 2001, 18-28).The difference is that when customers are contacted directly and told about the promotion they feel more valued.

What EXCEED could do is circulate information about a new product among their current customers; they could tell them all the important details about it. At a later date, the product information could be revealed to the general public through advertising in magazines, one the Internet, etc.

Since the regular customers would have already gotten the information first, they would feel more appreciated and valued. These are the kinds of techniques that could be used current customers as opposed to potential customers because it is the current customer that comes first. This is because of the fact that EXCEED needs to make sure its reputation and business stand as it is and not be lowered.

Acquisition Strategy for new Customers:

For this part of the promotional plan, EXCEED is left with a minimum of 3million Pounds. This means that funds might still fall short because television and radio promotion in addition to other forms will have to be used here. However, since television and radio communications might be used in the previous step, promoting products for newer customers could also be included. This would help save great deal of the funding, thereby allowing the whole promotional plant be implemented. The following includes how EXCEED might implement their plan to include new customers with the funds in hand.

Since EXCEED has already discovered the market and are aware of the immense potential that lies ahead, they can implement a strategy that would cater to potential customers regarding Motoring Services, Financial Services and Travel Services. Random marketing strategies could be easily employed. It must be asserted that advertising through the Internet, magazines, radio and television are all appropriate means. In view of the cost factor here, moderate advertising through television could be implemented in order to fit the budget given. Advertising through the print media is considered to be more feasible.

This is because EXCEED could have their advertisements placed in periodicals or magazines that are associated with motor companies(Yandi, 2001, 15-21). So when customers purchase cars or go through magazines that have information on particular cars, it is most likely that they would come across the advertisement. As far as motoring services are concerned, this is an appropriate means to advertise.

However, as far as financial services are concerned, it would not work. EXCEED needs to target its potential market, regarding financial services, through a means that would create more chances of potential customers viewing the advertisement. When it comes to financial services, it is better to place ads on television and radio along with other products of EXCEED. In addition to this, it also must be asserted that advertisements for financial services must be places in magazines where financial services are offered for related products.

This is believed
to boost the chances of a company’s product getting a response (Brierly, 2002, 27-29).

Concerning Travel services, it must be noted that EXCEED could advertise through television and radio along with its other products. This would save them spending excess funds on separate advertisements. However, the main advertising for travel services would have to be done through travel guides. Just like other agencies and organizations advertise EXCEED too can do the same. the advantage is that EXCEED would probably be recognized through its name from other services and products it provides. In view of this, it must be asserted that there is also the reputation of EXCEED that can be taken into consideration(Brierly, 2002, 27-29).

It must be considered that EXCEED is a company that already has many customers that it looks after and remains in contact with. Through this contact as well, services and products can be enhanced. This is a process that could indeed save some of the funds put towards promotional strategies. However, it is also worth considering whether it would actually be suitable to advertise through customers that are regular.

This is because of the fact that some customers might feel that they are really being used to promote a company free of cost. Ot