Analysis of the car industry

The car industry plays a vital role in economies all around the world since the first mass produced automobile, the Ford Model T., the sale of the mass marketed automobile also determines the trend for travel, tourism and residential developments. By traveling throughout Europe and the United States and it enables the consumer to live in the suburbs where it is less congested than the city with a high rent to space ratio and thanks to the automobile (Abu-Eisheh and Mannering, 2002) allows consumers to choose, for instance, whether to fly or drive to their next holiday destination in countries like the US and Canada and throughout continental Europe and Asia but this paper is on the luxury automobile or exotic car Exotic cars, consumers continue to purchase them, knowing fully their disadvantages. To some these disadvantages might be their temperamental attitude of the cars, to others it might be their ridiculous price tag and build time required to make these machines. Some people might view these exotic cars as decadence and a waste especially with the mileage and the build materials required. Supercar is a term used most often to describe an ultra-high-end "exotic" automobile, whose performance is superior to that of its contemporaries. It has been defined specifically as "a very expensive, fast or powerful car". (Collins English Dictionary. Glasgow: HarperCollins Publishers. 2003. ISBN 0007109830.), Luxury car drivers are typically, according to statistical surveys usually status seekers, older or retired males, highly educated, and high income people (Choo and Mokhtarian, 2004) and are typically less inclined to research thoroughly before making a purchase (Srinivasan and Ratchford, 1991) and consider fewer brands (Lambert-Pandraud et al., 2005), making them more inclined to traditional brands with a celebrated history such as the likes of Aston Martin or Lamborghini (Ewing et al., 1995). Following demographic and economic trends and increasing consumer purchasing power in developing countries, luxury markets have expanded over the previous decade (Fiske and Silverstein, 2004). Why do they continue buying them? In the past, the roles played by husbands and wives in purchase decisions were commonly used by marketers as the basis for determining marketing segments, promotional messages, pricing, product development and distributional strategies (Debevec and Iyer, 1986) joint decision making was typically made by the spouse with greater income, or the sole provider of the household on the automobile and its various specifications while the wife concentrated on the features of the interior (wolgast,1957,1958) while “The new rich”, an increasingly affluent class in china’s society, not only influences the political and socio-economic development of the country since it transformation from a planned economy to a more open one, their changing consumption and expenditure patterns (Goodman and Robinson, 1995) also have a direct impact on the retail sector overtaking the United States as the largest market, marketers have since then concentrated on merging the needs of both the male and female consumer markets in different cultures to suit both style and substance, function and form into a product those appeals to the discerning consumer with a suited disposable income

1993). Olsen.g. 2000). and heritage (Nueno and Quelch. 1997) characteristics. and a clear reflection of personality. McDougall and Levesque. Parasuraman and Grewal. This growing fad is required in such a competitive industry to stay ahead of the game (da Silveira. value and satisfaction have been thoroughly documented as preconditions of consumer loyalty (e. Pine. p.. consumers assess the product by the psychological advantages such as fun or status (Sweeney and Soutar. Automobile manufacturing industries particularly the exotic or luxury car manufacturers assert that no two cars are identical thanks to the huge list of options and colors and in the case of some high end manufacturers. Neely. 1993) A clear example of the magnitude of economies possible comes from Ford’s production of the model T before and after the use of the assembly line in 1914 – when a cost reduction of 50 per cent accrued over the following five years. 2001) and whether it is a service or a product. 78) although the same cannot be achieved in the cases of high end . 1998. Pine. 277) and help keep the companies’ good image especially in the exotic automobile industry where the vehicles regularly get extremely low mileage or require costly and exclusive manufacturing materials. Shankar et al. high end products act as social code also. 1996). 1993). 1998. In the case of the SMART car. 2008. professional competitive drivers are used to help in the research and development of the car as well as in the marketing and sponsoring of the car. Automobile manufacturers are also looking into extending into services other than their main market (Homburg et al. 1959.As a rule. the consumer is purchasing or receiving. former research stated that value and quality are often prerequisites of fulfillment of consumer needs therefore a intermediary between customer retention and value (e. pp. Previous research has examined perceived value in monetary terms only however.. 2010) with the likes of Porsche design or Torino Lamborghini energy drinks as well corporate social responsibility advertisements in which “inform the consumer about a company’s obligation to environmental issues such as global warming or going green” (Schroder. distinctive variation. Mathieu.. 2000). exclusivity. 1998. that consumer will either have a good. luxury items are stratospherically expensive and are somewhat trivial without any clear advantage over their frugal equivalents (Dubois and Duquesne. 1997. 2002. custom options which are unavailable on the options list. 1994) Research has also shown that if the consumer is happy with his purchase then will also recommend the service or product to another (Zeithaml et al. including consistently premium quality. 2001. reputation. moreover. They attribute an exclusive set of sociology (Kiser. In the exotic car manufacturing industry. Cronin et al. p.. Figure 1 Conceptual framework Automobile manufacturing industries particularly the exotic or luxury car manufacturers assert that no two cars are identical thanks to the huge list of options and colors and in the case of some high end manufacturers. the consumers viewpoint on service quality. in line with a rapid increase in scale (Maxcy and Silberston. This growing fad is required in such a competitive industry to stay ahead of the game (da Silveira. values. it can be reconfigured to the consumers likes by adding or removing plastic colored panels or changing the alloys to meet the customers likes.g. timing. recognizability. 62-63). custom options which are unavailable on the options list. bad or indifferent experience (Carbone and Haeckel. 2002. 2000. craftsmanship.

manufacturers and suppliers increasingly take terrorism into account in their strategic planning (Suder. In today’s multinational business world. Schniederjans et al. At the same time. Klein et al. among which choices have to be made. meanwhile. Bentley. Bugatti. 2001 also has not helped to ease the situation (Giunipero and Eltantawy. Ferrari. 2004). services. Consumers.automobile manufacturers since they pride themselves on hand built cars and do not sell a high number of vehicles per year but nevertheless the influence of quality management information on performance has been widely investigated (Flynn et al. this might not be to the case. Forza and Flipini. For instance. Lamborghini. Lotus and Aston Martin and since them have released vehicles which critics say are supercars based on their lower end counterparts such as the Rolls Royce Ghost. of established automotive luxury brands became a central part of the strategic game among the dominant car manufacturers beginning in the mid-1980s. 2003. acquisitions and mergers are a common theme with the traditional brands finding themselves under the ownership of the likes of BMW and Audi. 2006) in which manufacturers study the data such as detect rate and rework required and used as a forward base to improve quality since heavy competition in the auto industry dimands the manufacturers stay in the edge of technology and produce intricate products with an even higher quality at a lower price to stay ahead of the game Why they shouldn’t or don’t want to buy them In today’s automotive market. 2006). this reverse logistics is estimated to cost the US 35$ million per year (Pogorelec. Kaynak. 1995) especially in today’s fierce environment where if manufacturers do not realize the significance of consumer service and product return. 2004. Recent investigations have shown that although the consumer prefers their products from a country of advanced economies. Czinkota et al. 2000) while product returns estimate at 6% of sales. quality is a determining factor in the success of new releases due to its influence on brands image and consumer loyalty (Cooper and Kleinschmidt. 2004). 2001. they risk harming the organizations image and alienating the consumer therefore will not repeat purchase or recommend that brand to anyone and in today’s markets where oil prices are constantly pushing upwards which in turn pushes up the price of raw materials required and the transportation of the end product.. Maserati. are exposed to a plethora of domestic and foreign products and brands. Substantial acquisition. supercars are known to have a temperamental attitude and breakdown often and will have to be brought back to the dealership for repair. (1998) has proven that Chinese consumers might shy away from products made in Japan due to the tensioned relationship between China and Japan. and even some divestment. the Audi R8. 1994. featuring ownership transitions of premium marquees such as Rolls Royce. which is based on the BMW 7 series or the Lamborghini Gallardo which shares more than half its parts with its parent company. Nijssen and Douglas (2004) found Dutch consumers to be hesitant to purchase German made products on account of the happening of World War 2 . on a similar note. Most recently... particularly since September 11. John. Morita et al. Interruptions in global supply chains can result in delayed shipments and shortages of goods. 2003. Terrorist threats. 1998. Brown and O’Cass (2006) found that “consumer ethnocentrism” had negatively affected Australian consumers’ willingness to buy wine produced elsewhere and the same can be said in the case of Italian . and critical production inputs (Christopher and Lee.

587 $2.4 billion 6.430 $384 million 1.6 billion 6573 Aston Martin .5 billion 6. 1993) Methodology 2008 Number of units sold 2009 Number of units sold 2010 Number of units sold Lamborghini $654 million 2.515 $210.3 million Ferrari $2.250 $2.consumers where they view their exotic cars as having a soul as opposed to the boring German made counterparts even when taking into account the superb image of German efficiency and reliability which helps improve the efficiency of marketing efforts into combating this negative view (Yoon et al..

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