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Values and Automobile markets.

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 a 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
attribute, 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 cars' 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.
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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 other incentive to complete the surveys. Of the
498 questionnaires originally sent, 17 were returned by the post office as undeliverable. One
hundred fifty-five completed surveys were received, for a response rate of 32.2 percent.
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 were 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 4.1.) A list of 12 car attributes was developed from the initial

interviews with consumers and by consulting Consumer Reports. (See Case Exhibit 4.2.) The
importance of each attribute was measured with a 7-point numerical scale with end points
label d "very important" and "very unimportant." The List of Values (LOV) scale in Case
Exhibit 4 was used to measure the importance of values. 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 percent) owned an American luxury car, 38 (24.5
percent) owned a European luxury car, and 59 (38.1 percent) owned a Japanese luxury car. The
majority of the sample consisted of older (85 percent were 35 years of age or above), more
educated (64 percent were college graduates).
EXHIBIT 1 Issues that Consumers Consider When Buying Luxury Automobiles
Subjects response were measured with 7 as strongly agree and as strongly
disagree
Having a luxury car is a major part of my fun and excitement.' (Issue 1)
Owning a luxury car is a part of "being good to myself." (Issue 2)
When I was able to buy my first luxury car, I felt a sense of accomplishment. (Issue 3)
I enjoy giving my friends advice about luxury cars. (Issue 4)
Getting a good deal when I buy a luxury car makes me feel better about myself. (Issue 5)
I seek novelty and I am willing to try new innovations in cars. (Issue 6)
I tend to buy the same brand of the car several times in a row. (Issue 7)
I tend to buy from the same dealer several times in a row. (Issue 8)
I usually use sources of information such as Consumer Reports in deciding on a car. (Issue 9)
I usually visit three or more dealerships before I buy a car. (Issue 10)
I would read a brochure or watch a video about defensive driving. (Issue 11)
When buying a new luxury car, my family's opinion is very-important to me. (Issuel2)
My family usually accompanies me when I am shopping for a new luxury car. (Issue 13)

I usually rely upon ads and salespersons for information on cars


I usually rely upon friends and acquaintances for information on cars. (Issue 15)
When shopping for a car, it is important that the car dealer make me feel at ease. (Issue 16)
Most of my friends drive luxury import cars. (Issue 17)
Most of my friends drive luxury domestic cars. (Issue 18)
I think celebrity endorsers in ads influence peoples choice of luxury cars(issue 19)
I would not buy a luxury car if I felt that my debt level is higher than usual (issue 20)

Case exhibit :Car Attributes


(Very important to you = 7; very unimportant to you = 1)
Attribute
Comfort
Safety
Power
Speed
Styling
Durability

Code
Comfort
Safety
Power
Speed
Styling
Durabil

Attribute
Low maintenance cost
Reliability
Warranty
Nonpolluting
High gas mileage
Speed of repairs

Code
Lome
"Rely
Warrant
Nonpol
Gasmle
Repairs

Case exhibit: List of Variables and Computer Codes


(Very important = 7; very unimportant = 1)
Value
Fun-Enjoyment-

Code
Fun

Being well
respected
Self -fulfillment

well Respect
Selfful

Security

Security

Warm relationship

Warm

Sense of
accomplishment

Accomp

belongingness
self respect

Belong
selresp

ID--Identification number
AGE (categories are 2 = 35 years and under, 3 = 36-45 yrs, 4 = 46-55 yrs, 5 = 5665 yrs, 6 = 65 + yrs)
SEX (1 = male, 0 = female)
EDUC--Education (1 = less than high school, 2 = high school grad, 3 = some
college, 4 = college grad, 5 = graduate degree)
INCOME (1 = less than $35,000, 2 = $35-50,000, 3 = $50-65,000, 4 = $65,000+)
CAR--Type of luxury car (American car, European car, Japanese car)

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