ABSTRACT
Over the years, firms have made considerable investment into various types of branding activities in order to become competitive and profitable by virtue of consumer purchase decisions. But the exact brand activities that significantly influence consumer preference for automobile brands in Ghana has not been empirically for some time now. Therefore, the purpose of this study is to identity the drivers of automobile brand choice among Ghanaian automobile users. Based on this objective, literature was reviewed on the concept of branding, of which five drivers of automobile brand choice were identified. These factors are emotional connection, social influence, brand price, brand awareness and brand accessibility. To empirically examine these factors, the adopted quantitative approach with the use of a questionnaire for data collection. Data was collected from two hundred and forty-nine automobile users within the Legon enclave. Data was coded using Stata statistical software package where the findings were presented using descriptive statistics, linear regression and Pearson correlation coefficient. Whiles the finding of the study revealed a significant positive relationship between the independent and dependent variables, emotional connection, brand awareness and brand accessibility were found to have the strongest relationship with behavioural intention. On the other hand, social influence and brand price were found to have insignificant relation with behavioural intention. The new empirical insights into factors influencing consumers’ purchase decision of automobiles from the study will be significant to automobile manufacturers and dealers operating in developing countries such as Ghana. The study therefore recommends that automobile dealers must build car brands that connect emotionally with consumers, and made easily accessible and create the needed awareness for them.
CHAPTER ONE INTRODUCTION
Background of the Study
In this dynamic era of globalisation, marketing revolution and impact of marketing activities on consumer behaviour, consumers are more brand conscious in most of the products (Sciffman & Kanuk 2007). As a result, before consumers decide to purchase a product, there is some level is association using factors such as quality, features, country of origin of the product, performance and many other benchmarks (Josiassen & Harzing 2008). Suffice to state that, these associated factors only bother on high involving products. Broadly, consumers scrutinize products with two established variables namely the intrinsic and extrinsic variables (Escalas & Bettman 2005; Gürhan-Canli, Sarial-Abi, & Hayran, 2018). The intrinsic variables bother on intangible characteristics of the product (e.g. taste, design, performance etc.) whiles the extrinsic variables is concerned with tangible attributes of the products (e.g. price, brand name, warranty, country of origin), all of which are potential sources of information to customers. Evidence suggest that in case of limited information about intrinsic cues, customers are generally relying and using the extrinsic cues such as COO effect for evaluating products; however, these also act as an alternative variable in the absence of the knowledge about intrinsic cues of a product (Escalas & Bettman 2005). Considering the Ghanaian automobile landscape, there might likewise be a few explanation and factors behind consumer’s preference towards the origin of automobile brands. Along these lines, there is additionally a need to uncover the explanation and factors behind Ghanaian consumers’ preference for foreign and local automobile brands.
Consumers are in a tough spot because they are exposed to different window of information and varieties of automobile brands, many great deals of choices and options available in the market place influence their preference for an automobile brand (Ezeh, Abamara, Ugwuoju, & Obike, 2017). As noted by Balabanis and Siamagka, (2017), choosing from among brands in an environment that is cluttered with promotion and price information and other economic indices. These stimuli include not only the large number of brands from which to choose, but also the variety of promotional cues available. It is also being suggested by Ahmed and d’Astous, (2002) that the interpretation and consumer preference towards foreign and local brands is different among individuals and also influenced by internal consumer behavior (perception, attitude, and motivation) and external factors (family roles, peer influence and group influence). Very intriguing however is the observation made by Omonike, Vincent and Adelaja (2011) that some consumers would prefer indigenous products anytime, even if they fall within the same price range with foreign products. Conversely, some consumers would prefer foreign products even if they are three times more expensive. Therefore, factors influencing consumer preference towards foreign and local brands varies (Sun, Zheng, Su & Keller, 2017).
As economies undergoes transformational changes and becomes more affluent, emerging social forces make consumers spend a greater part of their income in way remarkably different from what took place in the past (Ogunnaike, 2010). Achumba (1996) opine that, consumers ideally take the advantage of the affluent and the latest services that technology and business can offer. These consumers are personalities whose behaviour is directed by diverse and wide-ranging influences such as past experience, perception and expectations, income, societal beliefs, attitude, educational
level and social groups. These form his taste choice and product preference. Price is regarded as one of the most important factors affecting the consumers’ preference of automobile brands. This suppose that once consumers perceive a price disparity between local and foreign automobiles, price differences start to affect their preference for local goods. Conversely, if consumers realise that local items are more expensive than foreign ones, their preference move toward the foreign products. The notion most often is that, a higher price denotes product quality while lower price implies lower quality (Halkias, Davvetas & Diamantopoulos, 2016).
Although Ghana’s automobile industry is relatively young with Kantaka as the major player with incredible range of product offerings, many Ghanaian automobile consumers are of the view that, foreign automobiles have images that bestow quality (Hill, Afriyie-Gyawu, Shah, Hansen & Veeravalli, 2017). Then again, many consumers, country of origin of the brands are the places they would wish cherish to visit or for image boosting purposes. As a result they buy their products as a way of identifying themselves with those countries (Ogunnaike, 2010). Available data suggest that foreign automobile in the Ghanaian market constitute well over 98 percent of the entire population of automobiles. The general perception is that, made in Ghana products are perceived inferior, even when the foreign products were not really better in value or physically different from the domestic alternatives. Considering that, the success of a firm depends to a large extent on its capabilities to attract consumers towards its brands. In particular, it is critical for the survival of a company to attract and retain its current customers, and to make them loyal to the brand by identifying what key factors or motivation drive consumers to make car choices. This study, therefore, examines the factors influencing consumers’ preference towards local and foreign automobile brands in Ghana.
Problem Statement
As a characteristic of developing economies, large number of products from developed economies are imported each year and automobile brands are not an exception (Cleverland, Laroche, and Papadopoulos, 2009; Hill, Afriyie-Gyawu, Shah, Hansen & Veeravalli, 2017). This development has brought stiff competition to indigenous companies in developing economies. In other words, consumers are exposed to alternative preference for domestic made products and foreign products (Halkias, Davvetas & Diamantopoulos, 2016). Juxtaposing this background against Government of Ghana’s Industrialisation drive – supporting and encouraging local businesses, requires that the behaviour of Ghanaian consumer must be understood because their insatiable taste for locally produced goods is what will give meaning to the industrialization agenda.
A careful look at the literature on consumer preference decision reveals that studies conducted within the Sub-Sahara Africa context have largely been focused on the concept from the organisation’s point of view (Hinson et al, 2006) and consumers behaviour in relation to low involvement products (Hinson et al, 2009; Solomon, Dahl, White, Zaichkowsky, & Polegato, 2014). However, there is fairly no studies conducted with respect to high involvement product specifically automobile brands. Some studies conducted on consumer brand choice have also mainly being conducted in the Western worlds (Sun, Zheng, Su & Keller, 2017; Balabanis & Siamagka, 2017). The question of what drives consumer brand choice of automobiles has been under researched in Ghana even though the market for automobile keeps growing on a daily basis. The current study is intended to address the need for more knowledge on what drives consumer
brand choice of automobile in Ghana. This study is thus positioned to explore from a Ghanaian context the key motivation behind automobile users’ choice of cars.
Research Purpose
The study seeks to identify and examine the factors responsible for consumer preference or choice of automobile in Ghana. It also aims to identify whether Ghanaian automobile brand can be preferred above foreign brands.
Research Objectives
- To determine the drivers of consumer brand choice of foreign or local automobiles in Ghana.
- To examine the relative importance of these drivers or factors in driving consumer choice of foreign or local brand.
Research Questions
- What are the drivers of consumer brand choice of foreign or local automobile brands in Ghana?
- What is the relative importance of these drivers in consumer preference for foreign or local automobile brands in Ghana?
