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 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)
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Note subjects response were measured with 7 as strongly agree and as strongly disagree

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CASE EXHIBIT 4.2 Car Attributes Attribute Comfort Safety Power Speed Styling Durability Code Comfort Safety Power Speed Styling Durabil Attribute Code

Low maintenance cost Lome Reliability Warranty Nonpolluting High gas mileage Speed of repairs "Rely Warrant Nonpol Gasmle Repairs

CASE EXHIBIT 4.3 List of Values ! 1 Value Fun-EnjoymentI Excitement I r s . .b I . l ~ : ~ : eO ongmg _ l i Being well respected 1 -----I Self -fulfillment I , ~ Belon g Respect Selffu Warm relationship Security Self-respect Selfres Warm Security

Code Fun . -

Value Sense of -

Code Accomp -

CASE EXHIBIT 4.4 List of Variables and Computer Codes

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) ( IS SUES-The sequence of issues listed in Case Exhibit 4.1. (Strongly agree = 7; strongly disagree = 1) ATTRIBUTES-The sequence of car attributes listed in Case Exhibit 4.2. (Very important to you = 71; very unimportant to you = 1) VALUES-The sequence of values listed in Case Exhibit 4.3_ (Very important = 7; very unimportant = 17)