Consumer’s car purchasing process

In economics and marketing literature the purchase of a car is defined as a form of ‘complex buying behaviour’ (Reed et al., 2004)50_{. Given that the car is a high-involvement product, the car-buying}

process is seen as a high-involvement process, leading to active search and use of information, deliberate evaluation of alternatives and a careful choice. Clearly the purchase of a car falls into the category of conspicuous consumption as discussed in the previous chapter. More specifically, the consumer information search itself usually includes both ‘internal search’ (retrieval of information based on previous searches and personal experiences) and ‘external search’ (accessing of different types of information sources) (Klein & Ford, 2003). Furthermore, research has highlighted that the car purchase can be seen as a two-stage process; in the first stage the vehicle class is decided

49 _{In recent years car purchase through internet has received more and more attention. It is quite likely that}

in the near future more consumers will purchase a new vehicle through the internet. However, it is unlikely that many consumers will purchase a car without ever test-driving the vehicle.

50 _{Complex buying behaviour means that consumers are highly involved in the purchase; the product itself}

on, based on costs and car capabilities, whereas in the second stage consumers undertake a more profound review of vehicles (Lane, 2005; Teisl et al., 2007).

In the last two decades the automotive market has gone through a significant change in the way information is made available to consumers. The arrival of the ‘information age’ had an enormous influence on the purchasing process of complex products, including car purchasing. Traditionally, automotive dealers were seen as the dominant source of information, resulting in a situation of consumer-salesperson interfaces in which the salesperson ‘led’ the customer through the buying process (Reed et al., 2004). Marketing research conducted in Germany by TNS Emnid (2004) showed a number of interesting developments in the automotive sector. The practice of information seeking has shifted in such a way that the majority of people purchasing a car make use of the internet as a source of information, making the internet one of the most dominant information sources.

Interestingly enough, another related development that can be witnessed is the decrease in customer ties, meaning that formerly fixed customer-supplier relations have become more and more fluid (CapGemini, 2010). Though important brand differences remain, in general, emotional attachment to a specific brand has lessened as a consequence of increased similarity and decreased quality differences in automobiles. The result is that in the past decade a strongly increased consumer empowerment has taken place. Car vending site Edmunds has summarised this development with its slogan: ‘negotiate like a pro’51_{. Not only have car salesmen noticed}

that consumers enter the showroom armed with background information about the automotive sector, but the process itself has also changed; instead of visiting ten different showrooms, most consumers make a pre-selection of approximately three car types that they investigate intensively. As a consequence, the role of the salesperson likewise has shifted from leading to guiding, and from salesperson to advisor.

There is also a general trend in consumption towards more comfort and convenience. This trend, together with higher safety requirements, has led to an increased demand in size and luxury levels of cars (Van den Brink & Van Wee, 2001). As Shove (2003a) indicates, what starts out as an extra capacity or luxury can soon become normality, thus shifting consumer preferences and expectancies for automobile characteristics. As a consequence, the price of an average new car int Netherlands has risen from € 3,389 in 1970 to € 25,742 for petrol cars and € 27,396 for diesel cars in 2009. More importantly, the fuel consumption has not seen any substantial decrease in the past 25 years (Figure 4.2). The average decrease since 2001 has been around 1% a year (PBL, 2009). Only since 2010 fuel consumption has decreased more rapidly.

When looking at stated preferences most studies observe that environmental factors do not seem to play a major role in consumer car choices (Table 4.4). So, even though consumers mention sustainability issues as a major consumer concern (NIDO, 2002), the infamous attitude-action gap reveals that consumers’ concern for environmental impact does not often translate into behavioural change (Lane, 2005). Furthermore, even though fuel consumption is mentioned as an important

51 _{An important note here is that there might be a significant difference between second-hand car purchasers}

and new car purchasers. Furthermore, Lambert-Pandraud et al. (2005) have pointed out that older consumers, who constitute an important market segment, repurchase a brand more frequently when they buy a new car.

factor, for most car buyers little effort is expended in comparisons of fuel consumption during the decision-making process (Boardman et al., 2000; Lane, 2005).

One conclusion could be that people tend to be more concerned about status value and less about environmental performance then people would admit like to admit to themselves (Johansson-Stenman & Martinsson, 2006). This would fit well into the often-heard claim made by policy-makers and car producers that ‘consumers are just not interested in environmentally friendly cars’. However, desk research by Lane (2005) sheds another light on this paradox. First of all, many buyers assume there are no major differences in fuel efficiency within the same vehicle class. By buying a new car, consumers automatically assume that it has good energy efficiency

6 7 8 9 10 800 900 1000 1100 1200 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 Fuel consumption (l/100km) Vehicle weight (kg)

Vehicle weight Fuel consumption

Year

Figure 4.2. Average car fuel consumption and average car weight of the top 50 best-selling petrol cars (Bovag).

Table 4.4. Factors mentioned as being important in the purchasing decision (Lane, 2005). Most important (10-30%) (5-10%) Least important (<5%)

Price Performance and power Depreciation

Fuel consumption Image and style Personal experience

Size and practicality Brand name Sales package

Reliability Insurance costs Dealership

Comfort Engine size Environment

Safety Equipment levels Vehicle emissions

Running costs Road tax

Style and appearance Recommendation

and is in compliance with strict environmental norms. It is also still widely believed that an environmental choice involves a certain sacrifice: in comfort, in performance or financially. Furthermore, because consumers’ knowledge is incomplete, the environmental effects of car use are often confusing and complex for consumers. The relationship between fuel efficiency, CO₂- emissions and climate change is only very generally understood. Finally, the differences between local and global emissions are often mixed up (ibid.).

Different environmental information tools and taxation schemes have been developed over the years in order to help consumers take environmental aspects into account when purchasing a car. Indeed, these strategies were specifically designed to tackle exactly the above-mentioned problems and misconceptions. Before we investigate how these environmental tools have worked out in the practice of car purchasing, first the various types of information provision will be described.