Factors Affecting Consumers

Factors Affecting ConsumersThe emergence of this consider, namely factors bear upon consumers leverage last on crossisation machines in Malaysia. Hybrid cable cars atomic number 18 veritable to reduce the level of gas emissions into the air and increase open fire rescue. As kindle tolls rise to the show up where many consumers great deal no longer afford to drive as much as they in one case have, automobile manufacturers have been faced with many new chall(a)enges. Hybrid car argon precise a ilk to the gasoline powered automobile most people drive today, the difference is the crossingization cars on the lane right now ar gasoline-electric crossbreeds. Many gas powered interbreedings atomic number 18 and leave behind be in the unattached in market today and some that will be coming to Malaysia, that include Honda polite Hybrid, Honda Insight, Toyota Prius, Hyundai Sonata Hybrid and etc. However, there atomic number 18 very hardly a(prenominal) crossbre ed cars is to be seen in Malaysia. whole 327 crisscross cars were sold in 2010 (Ahmad, 2011) and 297 total units sold in the whole 2009 (Mahalingam, 2011).BACKGROUND OF STUDYTo inquire the relation between indep displaceent varyings which are price, institution, scrub transaction, fuel rescue, consumers environmental consciousness and dependent variable which is consumers get behavior in buy a crossbreeding car.This look into assume is to examine the tie-up of the independent variables that impulse buying behavior of consumers on purchase a crisscross car in Malaysia.RESEARCH PROBLEMThe innovation of the fuel price-effective and environmental friendly hybrid vehicles is becoming topper-selling(predicate) nowadays. Today, many consumers include Malaysians are becoming to a greater extent sensitive to rising oil prices and becoming to a greater extent environmentally friendly, Malaysians are considering the option to buying hybrid vehicles which that can saves them money and make a demonstrable impact on our environment. A look for is conducted to find out the consumer behavior of Malaysians and to investigate the factors cloaking the consumers get purpose of hybrid cars. The questions arise are Will customers consider hybrid cars are actually expenditure the money they spend? Will the rising of oil prices leads them to pay more attention to a cars fuel parsimoniousness? Does the throw of the hybrid cars affect their purchase determination? Does the removal of take up duty for hybrid cars affect their purchasing determination? Or will their environmental consciousness intimate the purchasing of a hybrid car.RESEARCH OBJECTIVEThe main objective is to find out the factors that affect consumers purchasing last of hybrid cars in Malaysia.Through the application of many new and innovative technologies, the hybrid is an extremely efficient vehicle that similarly significantly reduces emissions. As a result, hybrid vehicles have been gaining in popularity because they are cheaper and consumer enjoys numerous incentives for purchasing a hybrid vehicle. However, the prices of hybrid vehicles in Malaysia are uttermost more expensive compared to the prices in other foreign countries.RESEARCH QUESTIONThis adopt is only going to focus on the determinants of consumers purchasing decision of hybrid car in Malaysia.How price of the hybrid cars influence consumers purchasing decisions? What is the alliance between the mark of the car and the influence it posses to consumers during decision making to corrupt? Does fall upon duty on hybrid cars affects consumers purchasing decision? How a cars fuel miserliness will influence the purchasing decisions of consumers? Will a consumers environmental consciousness plays a intent in their decision making to purchase a hybrid car?1.6 SIGNIFICANCE OF STUDYOur study focused on the factors that affect consumers purchasing decision of hybrid cars. This study will determine wheth er price, design, scrub duty, fuel scrimping, and environmental consciousness will affect consumers decision to purchase hybrid cars. It is all-important(prenominal) to find out how a consumer is instinctive to pay for a hybrid car and to know will the design fuel efficiency and the removal of excise duty on hybrid car influence their purchase decision. in that billet are consumer who will buy a hybrid car because it can save fuel and money, but there are consumers who are not willing to pay a high price for the hybrid car as well. It is crucial to determine the status of consumers since they are the end users of returns and run. Hence, this study is important to analyse the various factors that influences consumers idea on purchasing, so that it is well-heeled for manufacturers to take vital decisions to fulfill the demand of the consumers.1.7 SCOPE OF STUDYThis study will be focussing on the factors affecting consumers purchasing decision on hybrid cars in Malaysia. The study also focuses in ordinary on the automobile manufacturers such as Toyota and Honda. Nowadays, vehicles serve as a very important role in our electric current society where everyone needed transportation to continue their daily lives. Acquiring a car nowadays is considered a necessity, compared to the noncurrent where it was considered a luxury (CorpeduCar, 2010). At generate age, a car has become our need for easier and faster transportation and to be on time with our daily activities (Harvey, 2011).Surveys have been done by individuals as it is eternally a best and direct way to obtain opinions from the consumers. This research will be focusing on generation X and Y. Survey questions to understand more just about consumers behavior on purchasing a hybrid car will be distributed to consumers from generation X and Y. Generation X and Y were born between the twelvemonths in 1960 till almost 2000 according to Mark Winburn (2010) (as cited in White, 2010, p.4). This st udy carries out for respondents who are living in Peninsular Malaysia.Consumers from generation X and Y, being the largest generational demography is more forethought about the looks and price of the vehicles. Full of gleaming sports cars and eco-friendly vehicles aimed at consumers from generation X and Y. (White, 2010)1.8 ORGANISATION OF REPORTChapter 1This chapter shows the definition of the elevationic which is about hybrid cars. The factors affecting consumers purchasing decision of hybrid car is examined by using the independent variable that are price, design, excise duty, fuel economy and environmental consciousness. We tend to understand the problems before we conduct our research. After dread the research problem, we conduct 5 objectives to study on.Chapter 2We focus on publications review for this chapter. We define the terms of our research variables and also describe further about how and why is these variables related to this research.Chapter 3For this chapter we a re focusing on research methodology. Operational definition of research variable is done in this chapter. Besides that, we did some hypothesis in this research and also the commentary of the sources use in the research data. After that we describe about the sampling design of our research and also defining the instrument and measurement used in the research. Lastly is to develop how data is analyzed.Chapter 4This chapter shows the results of the research. In this chapter we include descriptive analysis or demographic analysis and imagine analysis. After that we did the normative test to every research variable. Then, we test hypothesis we did earlier end finally, we end up by doing the regression analysis.Chapter 5This chapter shows some discussion and conclusion of the research. Besides that it shows the suggestion for future, limitation of study and etc.1.9 summaryIn this introduction, a brief everywhereview is slip byn about hybrid cars. This chapter has also identified th e research problem and research objectives for this study. The independent variables and research questions are give tongue to for this study. The next chapter gives a more detailed explanation and a literature review for the topic.Chapter 2Literature Review2.1 admissionThis study finds out factors that influence consumers purchasing decision on hybrid cars. Through this research, there are tail fin variables that influence consumers purchasing decision on hybrid cars which are pricing, design, excise duty, fuel economy, and environmental consciousness. The purpose of this study is to determine the factors that affect consumers purchasing decision on hybrid cars. In this chapter, literatures from past researchers are cited to support and explain the given variables in this study.2.2 OVERVIEW OF LITERATUREThis chapter will provide a description of the literature relevant to this study. This research seeks to examine the influence of price, design, excise duty, fuel economy, and env ironmental consciousness on consumers purchasing decisions. A theoretical framework will show the independent variables and dependent variables that is explained through this chapter as well as giving an overview of what has been reviewed by past researchers.2.3 THEORETICAL FRAMEWORKFigure 2.1 Factors that affects consumers purchasing decision on hybrid carsIndependent Variable Dependent Variable valuePurchasingDecision H1 excogitate H2 strickle Duty H3Fuel Economy H4EnvironmentalConsciousnessH5Source Adapted for this study2.4 self-governing VARIABLESPricePrice is one of the variables in this research. Product price are demonstrated to be the variables affecting consumers decisions. According to Chang (2009), price plays several roles in consumers purchasing decision making. For example, price can be an indication of the degree of perceived give needed to purchase a product and an indicator of the level of quality. A higher perceived price leads to higher perceived quality and co nsequently to a greater willingness to buy. At the same time, the higher perceived price represents a monetary measure of what must be sacrificed to purchase the product, leading to a reduced willingness to buy. Consumers purchase decision are affected by price, a concomitant product may seem too expensive at its regular price, but a intelligent order when it is discounted. Similarly, consumers will be motivated to shift to another brand or use a product less with an increase in price (Litman, 2004). Consumers make their choice, based on the information regarding all the products available on the market and price is an important factor of decision making (KazaKevitch, Torlina Hendricks, 2005). Price is always an important attribute in the decision-making process (Hermann et al., 2007 Lalwani Monroe, 2005 Chang, 2009 Webb, 2011). Playing a more complex role than a good deal attributed to it, price has been a determining factor in consumer choice (Monroe, 1990 Chang, 2009). Cons umers remembered information on past and present price and are able to acquire complete information on the attributes of products being considered as options, the objectives of which are to minimize the price paid (Chang, 2009). Progressive Insurance and NADA conducted a poll shows 46% respondents stated that price is still number one concern in their most important new-car attributes ranking (Bryant, 2006). In an interview showed that car buyers indeed consider price an important factor in their purchase decisions (Herrmann, Xia, Monroe Huber, 2007, p.51). In an analysis of consumers willingness to buy a hybrid car, the purchase price would influence the willingness to buy according to (Tanaka et al.) as cited in (Kishi Satoh, 2005). A study published in UK found as many as 71% of customer said that price was the most important factor that influences car purchase (Bikash, Pravat Sreekumar, 2010, p.51). In a come off of 1,524 adults by the Japanese motoring organization JAF, 61% said it was important that the car was economical (JAF, as cited in Okamura Cairns, 2003). Consumers in Generation Y are concerned with price and getting a good value (Wolf, Carpenter Petrela, 2005). Most of the interviewees in the study conducted by Webb (2011) are very price conscious and that price is an extremely important factor and is the bottom-line when purchasing a product. The deepgest concerning factor for purchasing a product was determined to be price (Webb, 2011). Hence, it is apt to suggest that price is one important share in influencing consumers purchasing decisions taken by all age groups, including teen adults on hybrid cars. By referencing the living literature on price, it is hypothesised thatH0 There is no blood between the price of hybrid car and consumers purchasing decision.H1 There is a relationship between the price of hybrid car and consumers purchasing decision. formulateDesign is one of the variables in this research. Consumers have expectati ons when buying a product. Through what consumers have acquired from their cultural environment, consumers indigence to buy and even to pay a high price is based on a value judgment, like and dislikes of a sociological and psychological nature. In Webb (2011) studies, majority of respondent in strongly harbor (UK-31%, US-39%, Other-38%) and agree (UK-48%, US-46%, Other-46%) that the design of the product is a considering factor when buying. According to Jung et al. (2010), it is know from consumer surveys that the design of cars greatly influences on consumers affection and therefore leads to their purchasing decisions. Additionally, Jung et al. (2010) study provides a root of understanding underlying consumers affection in terms of user-centered design. In order to improve consumers affection and influencing their purchase decisions as consumer spends more and more time in cars, manufactures are developing interior design requirements to achieve autocratic results (Cho, 2005 Jun g et al., 2010). There are hundreds of designs available on the market and it is difficult for consumers to choose one that catches their interest. Therefore, a cars body design plays a very influential factor (Hagemann, 2011). Dull and ugly cars do not sell, consumers will not be gained to design that just does not look particularly good at all (Cato, 2009). Designs have a received confident(p) causal relationship with purchase intention indirectly and are important factors affecting purchase decision. Therefore, automobile manufacturers should consider designing heterogeneously and individually for vehicles to satisfy consumers fashion and individual needs on the basis of the quality assurance (Wang Li, 2010). In Nielsen (2010) online survey, the Nielsen Company looked at the factors most important to consumers when choosing new cars in the current economy. Surprisingly, 85% will consider buying if the new car were available now and met the key requirements such as design, dep endability and durability. 12% of the respondents will consider buying the hybrid car if it had a remarkable design that set apart from existing car models. Design wreaks value to the product, giving it distinction to attract consumers who are more focused on the design and brand name. By far, price is a big indicating factor within any demographic group for buying products, alongside with the design of the product itself (Webb, 2011). Marketers should design the brand or product to match the way consumers understand, utilise, and emotionally connect themselves to a product. Hence, it is reasonable to suggest that design is one of the important factors in influencing consumers purchasing decisions. By referencing the existing literature on design, it is hypothesised thatH0 There is no relationship between the design of a hybrid car and consumers purchasing decision.H2 There is a relationship between the design of a hybrid car and consumers purchasing decision. scrape up DutyExcise duty is a tax revenue or sometimes called duty in its simplest form and it is defined as levy and accrual of duty on manufacture of goods (Kanak, 2002). Excise is imposed on consumption that is demoralized by the government such as alcohol and cigarettes, the production or sale of certain goods, commonly luxury items as well as on gasoline and other fuels. On the other hand, excise is considered an indirect tax, meaning that the producer or seller who pays the tax to the government try to recover the tax by raising the price paid by the buyer. The Websters New International Dictionary, as mentioned in Kanak (2002), excise duty is any duty, toll, tax or an inland duty or impost levied upon the manufacture or sale or consumption of commodities within the country or tax upon pursuit of certain sports, trades, or occupations usually taking this in the form of fees or licenses. In Malaysia, excise duty is imposed on automobiles. Cost is a major barrier to adoption. For example, a Toy ota Prius is priced slightly under RM 180,000 before excise duty exemption. As cars are more of a necessity these days, overpriced cars are inhibitive for consumers. Before the exemption of excise duty, hybrid cars are considered expensive. Although they dont cost as much as a sports car but they are by no means cheap for consumers. In Malaysia, existing taxes on cars, particularly excise duties are high. Excise duties should be exempted by the government for all hybrid cars if they are serious about load-bearing(a) hybrids (Yeoh, 2010). The government decision to grant full excise duty exemptions on hybrid vehicles below 2,000cc until year end that had been announced during the tabling of Budget 2011 in October 2010 had lower the prices of hybrid cars. Public awareness of the benefits of hybrid cars has picked up considerably with lower price aft(prenominal) excise duty waiver, and with that, sales of such cars has increased (Mahalingam, 2011). Toyota Prius is priced at RM 139,90 0 in Peninsular Malaysia after full exemption of excise duty which lasts till the end of 2011, makes it an hypnotic proposition for Malaysian drivers (Standing a hybrid apart, 2011). Excise duty exemption on hybrid cars is like a chap in the arm to this vehicle segment (Mahalingam, 2011). The spike in demand for hybrids has been fuelled in general by the Governments decision under Budget 2011 to grant full excise duty exemptions on hybrid cars below 2,000cc unti Dec 31, 2011. Representative from UMW Toyota stated that the company had received over 470 bookings for Toyota Prius and 946 bookings for the Honda Insight since the Governments budget annunciation (Mahalingam, 2011). Since the Government announced the exemption of excise duties (at Budget 2011) last year, demand for hybrid cars have shot up, said MAA President Datuk Aishah Ahmad in Mahalingam (2011) news article. The sales of hybrid cars had risen and consumers in Malaysia are more aware of the benefits of hybrid cars si nce the exemption of excise duty. Hence, it is reasonable to suggest that exemption of excise duty on hybrid cars is one of the important factors in influencing consumers purchasing decision on hybrid cars. By referencing the existing literature on excise duty, it is hypothesised thatH0 There is no relationship between excise duty and consumers purchasing decision on hybrid cars.H3 There is a relationship between excise duty and consumers purchasing decision on hybrid cars.Fuel EconomyFuel economy refers to the fuel efficiency relationship between distance travelled by an automobile and the amount of fuel consumed. Fuel economy indicates how far a vehicle travels on a unit of fuel. Fuel economy is one of the variables in this study. When it comes to making their final decision about which vehicle to buy, fuel economy is one of the factors that consumers focus on. Fuel economy is the number one factor driving consumer decisions about green vehicles (named by 57% of respondents) and m ore respondents in China and the U.S. pointed to fuel economy (Dixit et al., 2009). According to the 2008 Advanced Automotive Features Study, it is reveals that some 38% respondents indicate that they would sacrifice vehicle performance for better fuel economy (Fuel economy, 2008). Eighty percent of consumers surveyed by the latest research from ExchangeandMart.com.uk in Fuel efficiency (2011) article said that a cars fuel efficiency directly affects their purchasing decision. Consumer Reports, 2009 in Jeffrey Gonder (2011) article found that prospective vehicle buyers listed fuel economy as a top factor of interest. Power Asia Pacific, (2010) found alter customer satisfaction with auto dealers in cases where those dealers provided advice for maximizing fuel economy when driving (Jeffrey Gonder, 2011). This further supports the thesis that consumers have some interest in fuel economy with the right encouragement. Increasing fuel economy standards encourages greater automobile use b y reducing the cost per kilometre travelled (Thorpe, 1997 Agostini, 2010). Due to fuel price increases, consumers purchase more fuel efficient vehicles (Litman, 2004). A report comes from Market Intelligence research performed by the online arm of Kelley Blue Book reports that fuel economy has become a much more important part of the criteria buyers use to select their next vehicle (Bain, 2011). In the midst of escalating concerns about the dangers of greenhouse gas emissions, environmentalists hailed the superior fuel economy and wide honk of the hybrid-electric engine as a critical breakthrough that could help save the environment without inconveniencing consumers (Thatchenkery, 2008). According to a survey by the Consumer Federation of America, fuel economy ranks near the top in consumer priorities in general (Zhuang, 2009). The survey found that 76% of customers intend to buy a vehicle with fuel economy averaging five miles per gallon greater than the mileage of their current v ehicle. Hence, it is reasonable to suggest that fuel economy is one of the important factors in influencing consumers purchasing decision on hybrid cars. By referencing the existing literature on excise duty, it is hypothesised thatH0 There is no relationship between fuel economy and consumers purchasing decision on hybrid cars.H4 There is a relationship between fuel economy and consumers purchasing decision on hybrid cars.Environmental ConsciousnessEnvironmental conscious can be known as affective traits that can signify an individuals likings, dislikes, worries and consideration about the environment (Yeung, 2004 Sinappan Rahman, 2011). The consumers spending pattern and preference has been growing and changing over time. People nowadays are more aware of the environmental issues. Generally, consumers tend to have a positive attitude towards green purchasing when they are aware of the environmental issues (Sinappan and Rahman, 2011). According to Soonthonsmais study in (Sinappan Rahman, 2011), a green consumer is defined as consumers who are conscious of and interested in ecological issues. All products and services that have environmental impact are put into their considerations and these consumers initiative is to reduce them to the minimum. As mentioned in Sinappan Rahman (2011), few studies were done on environmental consciouness (Barr et al., 2003 Milfont and Duckitt, 2004). The study done by Lee as cited in (Sinappan Rahman, 2011) among Hong Kongs young consumers revealed that environmental consciousness is the 2nd top predictor of green purchasing behaviour. This result is consistent with Sinappan Rahman (2011) study where environmental consciousness is the 3rd top predictor of green purchasing behaviour. Consumers who have high concern on the environment often consider on how the quality of the environment can be improved and they would definitely engage themselves in buying environmentally friendly products, such as a hybrid car. According to K szeghy, (2004), a study performed in the United States levels of consumers environmental consciousness was identified. There are the true-blue greens who are firmly environmentally conscious persons, exhibiting this in their actions. They crisply refuse products of firms having obscure environmental performance and give preference to environment friendly products. Greenback greens are the youngest and best educated people who support environmentalism with money rather than with any action or their time. These are wet people, ready to pay extra cost for environment friendly products. Demand for environment friendly products appears among environmental conscious consumers. The quality of the environment is important, which is taken into considerations in their purchase decision. Firms should take segments formed by the level of consumers environmental consciousness into account in their decision making process (Kszeghy, 2004). Business today had changed, they are acknowledging that b eing environmentally conscious is being competitive and green products provide competitive advantage (Introduction to Environmental, 2006). Hence, it is reasonable to suggest that environmental consciousness is one of the important factors in influencing consumers purchasing decision on hybrid cars. By referencing the existing literature on environmental consciousness, it is hypothesised thatH0 There is no relationship between environmental consciousness and consumers purchasing decision on hybrid cars.H5 There is a relationship between environmental consciousness and consumers purchasing decision on hybrid cars.2.5 DEPENDENT VARIABLESPurchasing DecisionThe purchasing decision process is a stage that a buyer passes through in making decisions about which product or service to buy. Every day consumers are faced with purchasing decision. A better understanding of how consumers decide what to purchase is critical to the success of a product. Purchase decision occurs when the consumer a ctually makes the purchase. It includes the product, method of payment, package, location of purchase and all other factors that are associated with purchasing the product (Wolf, n.d). It is insufficient to understand how consumers arrive at their purchase decision because there are personal, psychological and social factors that influence the purchase decision. Understanding of these factors is prerequisite to effectively market products. In this study, we focused on five variables, which are price, design, excise duty, fuel economy, and environmental consciousness as the factors that affect consumers purchasing decision on hybrid cars. As mentioned in the literature review, these five factors are reviewed and explained on how they affect consumers purchasing decision. This is important to marketers and they need to understand clearly about their consumer to be able to market their product with a good understanding of these purchasing decision processes.2.6 ITEMS OF MEASUREMENTS2. 6.1 Price2.6 SUMMARY OF LITERATURETable 2.1 Summary of literatureDimensionAuthorsPriceChang, 2009 Litman,2004 KazaKevitch, Torlina Hendricks, 2005 Hermann et al., 2007 Lalwani and Monroe, 2005 Webb, 2011 Monroe, 1990 Bryant, 2006 Herrmann, Xia, Monroe Huber, 2007 Kishi Satoh, 2005 Bikash, Pravat Sreekumar, 2010 Okamura Cairns, 2003 Wolf, Carpenter Petrela, 2005DesignWebb, 2011 Jung et al., 2010 Hagemann, 2011 Cato, 2009 Wang Li, 2010 Nielsen, 2010Excise DutyKanak, 2002 Yeoh, 2010 Mahalingam, 2011 Ahmad, 2011Fuel EconomyDixit et al., 2009 Jeffrey Gonder, 2011 Agostini, 2010 Litman, 2004 Bain, 2011 Thatchenkery, 2008 Zhuang, 2009Environmental consciousnessYeung, 2004 Sinappan and Rahman, 2011 Barr et al., 2003 Milfont and Duckitt, 2004 Kszeghy, 2004 Lee, 2008Source Adapted for this study2.7 SUMMARYThe five variables, which are, price, design, excise duty, fuel economy, and environmental consciousness plays an important role in consumers purchase decision. This study explored th e five variables, which are, price, design, excise duty, fuel economy, and environmental consciousness by referencing the existing literature on how they affect consumers purchasing decision on hybrid cars. On the previous research, price plays an important role in purchasing an automobile. Price is always an important attribute in the decision-making process. Designs have a certain positive causal relationship with purchase intention indirectly and are important factors affecting purchase decision. It is known from consumer surveys that the design of cars greatly influences on consumers affection and therefore leads to their purchasing decisions. With a lower price after excise duty waiver, public awareness of the benefits of hybrid cars has picked up considerably and leads to more sales. Fuel economy has become a much more important part of the criteria buyers use to select their next vehicle. In business today, environmentally conscious is being competitive and it provides compet itive advantage. The quality of the environment is important, which is taken into considerations in consumers purchasing decision.Chapter 3Methodology3.1 INTRODUCTIONThe main objective of this research was to determine the factors affecting consumers purchasing decision on hybrid cars in Malaysia. In this chapter, various topics was discussed includes hypotheses development, research design, sampling technique, sources of data, scales and measurement, questionnaire design, data collection method, and statistical data analysis. After identifying the various independent variables, a hypothesis to test the validity of the relationship with dependent variable was developed. Next, the research design and sources of data were also elaborated. As this study was using the survey method of questionnaires, therefore the sampling technique, questionnaire design and measurement was in explained detailed. Finally, data collection method and statistical data analysis was also explained.3.2 RESEAR CH DESIGN AND PROCEDURE3.2.1 Type of studyThis study will take place in urban areas in Malaysia where transportation is a necessity for consumers to travel around from place to place. Consumers like working adults who need vehicle to go to work and travelling in the urban area are more concern about the vehicles they drive.3.2.2 Nature of studyThis study found that design was positively correlated with price. Consumers have expectations when buying a product. Consumers motivation to buy and even to pay a high price for a product is based on value judgment. Value can and has been added in several different ways. For example, through recognizable mark or signature of the designer that can add value to the product. Another way to adding value is through symbolic capital, which refers to the enhancement or the power that emanates from the designers name, which in turn evolves into a signature, mark or brand of the designer or manufacturer. Design adds value to the product, give it disti nction. As a result, consumers are willing to pay a premium for the product. Independent variables in this study which are price, design, excise duty, fuel economy, and environmental consciousness are all positively correlated to the dependent variable, which is purchasing decision. Consumers concern of the price and whether the product is worth what they paid for. This brings a positive relation that influenced consumers p