The Horsepower of Car Reviews


Bachelor Thesis, 2015

87 Pages, Grade: 1st


Excerpt

Contents

List of figures

1.0 Introduction

2.0 Market Report - Review
2.1 Introduction
2.2 Car purchasing process
2.3 Reviews usage
2.4 The UK Car market
2.5 Market Summary

3.0 Literature Review
3.1 Consumer Decision Making
3.2 Why consumers seek information from reviews
3.3 Reviews: the effect on consumers
3.4 Conclusion

4.0 Research Problem
4.1 Research Objectives

5.0 Methodology
5.1 Introduction
5.2 Research Approach
5.2.1 Primary vs Secondary
5.2.2 Qualitative vs Quantitative
5.2.3 Classification
5.3 Sampling
5.3.1 Target Population
5.3.2 Sampling Frame
5.3.3 Sampling Method
5.3.4 Sample Size
5.4 Data collection
5.4.1 In-depth Interviews
5.4.2 Questionnaires
5.4.3 Questionnaire Design
5.5 Pilot Tests
5.6 Data Analysis Methods
5.7 Ethics
5.8 Methodology Overview

6.0 Data Analysis
6.1 In-depth interviews findings
6.2 Theme 1: Car review usage
6.3 Theme 2: Car reviews in the Buying Decision Making Process
6.3.1 Information Search
6.3.2 Evaluation of Alternatives
6.3.3 Post-purchase
6.4 Theme 3: Car review sources used
6.4.1 Awareness of sources
6.4.2 Type of car review used
6.5 Theme 4: Trust in car reviews
6.5.1 Personal Reviews (Other Drivers)
6.5.2 Independent car review companies
6.5.3 Car Companies
6.5.4 Distrust among all types

7.0 Questionnaire findings
7.1 Theme 1: Car review usage
7.2 Theme 2: Car reviews in the buyer decision-making process
7.2.1 Information search
7.2.2 Evaluation of alternatives
7.2.3 Post-purchase
7.3 Theme 3: Car review sources used
7.3.1 Awareness of sources
7.3.2 Type of car review used
7.4 Theme 4: Trust in car reviews

8.0 Evaluation of findings and Conclusions
8.1 Objective 1: Do Potential Car Purchasers use review sites? Is there a difference between age categories?
8.2 Objective 2: What stage of the buying process are car reviews most influential?
8.3 Objective 3: What type of car review sites are used?
8.4 Objective 4: Which reviews have more influence, reviews from recognised companies, Independent car review companies or personal/consumer resources?

9.0 Conclusion

10.0 Limitations and Recommendations
10.1 Limitations
10.1.1 In-depth Interviews
10.1.2 Online questionnaires
10.1.3 Time restriction and unavoidable limitations
10.2 Recommendations

11.0 References

12.0 Appendices
Appendix 1 – In-depth Interview question analysis
Appendix 2 – Questionnaire questions analysis
Appendix 3 - In-depth interview coding
Appendix 4 – Chi-squared test of association between age and use of car reviews
Appendix 5 – Chi-squared test of association between interest in cars and use of car reviews
Appendix 6 – Car reviews in the information search stage calculated mean and standard deviation
Appendix 7 – Car reviews in the evaluations of alternatives stage calculated mean and standard deviation
Appendix 8 – Car reviews in post-purchase calculated mean and standard deviation
Appendix 9 – Cross Tabulation and Correlation analysis between new/used car purchase intention and type of car review most used
Appendix 10 – Cross Tabulation and Correlation analysis between type of car review trusted and type of car review most used

Abstract

Technological advancements such as the introduction of Web 2.0 has led to changes in consumer shopping behaviour; this has empowered consumers, where brand communication with consumers is no longer one way. Consumers have mass amounts of information valuable for decision-making easily accessible, and are continually incorporating the use of reviews into their decision-making processes, especially with high involvement purchases. With car purchases arguably one of the most expensive purchases made in a consumer’s lifetime; a focus on this purchase decision-making process has been taken.

Subsequent to secondary data analysis and literature evaluation, a research problem was identified and objectives were devised. The research problem was to determine the effects and uses of car reviews to consumers. Objectives consisted of investigating: whether potential buyers use car reviews; what stage of the buyer decision-making process are car reviews most influential; what type of car reviews are used; and which type of car review is most trusted. With the consideration of the research problem and objectives, methodology was constructed. An appropriate sampling method and frame was chosen given the current resources and time-scale available. In-depth interviews were used as a data collection method to gain insight into consumer use of car reviews. Moreover online questionnaires were used to gain numerical data to enable statistical analysis and conclusions.

Primary data analysis and evaluation was carried out with the consideration of academic theories and frameworks to enhance conclusions and findings. It was revealed that the majority of consumers do make use of car reviews during a car purchase process; with consumers having a preference to the use of Autotrader, Top Gear or have no preference between car review sources. Car reviews were more influential in pre-purchase stages; where it was found equally as influential in the information search stage as the evaluation of alternatives stage. Personal/consumer car reviews were used and trusted the most, independent car review companies’ reviews were 2nd most used and trusted, and car companies were the least used and trusted. It was found that personal car reviews were the most influential to consumers.

This research did carry some limitations, so use of conclusions and findings should be used objectively. It is recommended that future research may involve larger samples, different research methods such as document content analysis, or even centred on specific car review website to gain further understanding.

Acknowledgements

There are a number of people I’d like to thank for the support and encouragement for the completion of my degree.

I’d firstly like to thank my dissertation supervisor Julia, as without her help I would not have been able to complete this project. Throughout this project you have been available whenever needed and guided me well. In my view you go beyond what are the requirements of a lecturer to help students. I have been lucky to have you as a tutor and it has been an honour to have been taught by you, I believe your help has helped me very much with my future career.

I would also like to thank my girlfriend Amber, who has been with me throughout this university journey. You have loved me, cooked for me, and spoiled me these last 3 years and I cannot thank you enough. I don’t think I would have enjoyed university or done as well without you.

Finally I’d like to thank my uncle David for being a role model to me, he has always been there for help when I ask him, and has achieved everything he has through hard work. I’d also like to thank my parents for making me who I am today, I believe my work ethic and values have been created by your doing. Without your guidance I would have not made it this far through life and education. I’d also like to thank my siblings, as they always make me happy when I see them. I know when you grow up you may read this one day and possibly be doing a dissertation yourself, so good luck.

List of figures

Fig.1 Attitudes towards online research tools (Mintel, 2011)

Fig.2 Car review sources ranked through Alexa (2015)

Fig.3 Buyer decision-making process model developed from Dewey by Blackwell et al. (2006)

Fig.4 Burton and Khammash (2010) Reading themes, motives, and associated behaviours

Fig.5 Used sources for car information search

Fig.6 Sources used for purchase

Fig.7 Reasons for reading car reviews

Fig.8 Features sought in car reviews

Fig.9 "I’d use car reviews to help me search for cars that I might consider purchasing”

Fig.10 "After shortlisting more than 1 car as a possible purchase choice, I’d use reviews to help me decide”

Fig.11 "I’d read a review on the car I purchased after buying it”

Fig.12 Car review sources wareness

Fig.13 Car review sources sed

Fig.14 Type of car reviews most sed

Fig.15 Type of car review most trusted

1.0 Introduction

With the growth of the internet and technology, reviews are now easily accessible online, with 58% of consumers reading product or service reviews online (Mintel, 2013). The introduction of Web 2.0 has enabled the growth of consumer reviews, where consumers can share opinions across many platforms (Zhang et al. 2014), and communication between consumers and brands has changed; thus is a growing area to be explored.

Consumer behaviour has developed, and the internet has become an essential, with nearly all purchases incorporating its use. Current availability of the effect of reviews from academics is extensive, however they all have a different subject focus. Consequently this project is centred on car reviews and how it can influence consumers. This focus has been chosen due to the generally high costs of purchase, thus consumers are likely to have extensive search behaviour. This project aims to examine the effects of car reviews on consumers, and how it can affect their decision-making process.

This project will start by analysing the current markets and categories car reviews fall into. It will outline any current consumer and market trends, and how reviews are currently being incorporated. An analysis of the UK car market will also be taken to given an overview into performance, current communication methods and advertising spend.

Literature surrounding reviews will then be evaluated. This has been done to provide a basis of knowledge encompassing the subject area; as well as highlighting key theories and academics which will be compared and contrasted. This analysis will outline where there is a gap for research. The academics and theories highlighted will also be incorporated and discussed in data collection and evaluation of findings.

Following the identification of the gap in review research, the research problem will be outlined. From this research objectives will be devised and explained to how they can solve the research problem. These objectives will be used throughout the research, helping to devise the methodology, as well as data analysis and conclusions.

Moreover the methodology chapter outlines a plan of how the research will be conducted, it discusses various different research approaches, sampling techniques, data collection and data analysis methods. Justification for chosen methods and techniques will be detailed. Pilot testing to ensure validity of findings will be conversed, in addition to ensuring the research follows strict ethical guidelines such as participant anonymity.

After conducting the research, the data analysis chapter will present the findings, through the aforementioned methods, with participant profiles outlined and critical commentary throughout. Themes and codes will be used to present the in-depth interviews, whereas a selection of charts, graphs and statistical analysis will reveal the findings from questionnaires.

Furthermore the evaluation of findings will analyse the significant findings in relation to previous literature, and whether the findings corroborate with theories and other academic findings. It will also discuss how findings have achieved each research objective. Next a conclusion of the overall findings will be provided, and how well the research has been carried out and objectives have been achieved.

Limitations will then be conversed, in relation to the applicability of the project, accuracy and validity of findings. Finally the project will propose recommendations and considerations for possible future research into the subject area.

2.0 Market Report - Review

2.1 Introduction

This market analysis will outline how consumers are currently making car purchases, and current market data around the use of car reviews. This chapter will start by examining current consumer car purchasing processes. It will then outline how consumers are currently researching products online through reviews. Finally it will analyse the car market, how manufacturers are currently spending on advertising and communications, and an analysis of current online car review sources.

2.2 Car purchasing process

Currently 33% of consumers are searching for information on cars online before purchasing; where 22% of consumers have said that the internet made them feel more confident when comes to purchasing a car (Mintel, 2015a). Moreover it was found that different segments made use of the internet more; with 38% of AB socio economic group favouring the use of the internet during a car search, and 27% of young car owners feeling more confident through the use of the internet (Mintel, 2015a).

8 out of 10 buyers are themselves involved in the decision-making process of purchasing a vehicle (Mintel, 2015a). This high percentage of consumers is likely to do most of the information search involved in purchasing a car. Mintel (2015a) also states how certain segments are more inclined to using the internet, with some 43% of those who purchased a car less than 2 years ago saying they would use the internet for research. Additionally 14% of consumers also find that the range of models available makes choosing a car difficult (Mintel, 2015a)

Finally it was found that the popularity of the internet is having an effect on car decision-making, but has limitations which stops most buyers from purchasing online; however it is becoming increasing used to build confidence among buyers by informing them about future car purchases (Mintel, 2015a).

2.3 Reviews usage

It has been found that 3 out of 5 consumers refer to online reviews for information (Mintel, 2011). The figure below outlines consumer attitudes towards reviews:

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Fig.1 – Attitudes towards online research tools (Mintel, 2011)

59% of consumers stating they read a lot of reviews regarding expensive purchases. This indicates that use of car reviews is likely, as cars are fall into this category. Half of consumers trusted family/friends more than online reviews, suggesting that reviews have less influence on decision-making than this source.

Mintel (2011) also found that consumers rely on user generated reviews more than professional ones; and a reason for this is due to the lack of availability of professional reviews including directly from online merchants. It was also established that consumers trust consumer reviews the most, but do take note of their limitations (Mintel, 2011); consumers also used the types of reviews for different reasons; with professional reviews used for technical specifications and consumer reviews for experiences (Mintel, 2011).

2.4 The UK Car market

Currently the UK car market sales has risen year on year since 2009, and is set to grow in sales (Mintel, 2015b). Currently used car sales dominate total sales with 73.1% but this has fallen since 2010 from 77.8% (Mintel, 2015b). Although Mintel (2015b) states that despite new car sales to grow, the share of sales is set to decrease as the volume of used cars increase.

Moreover overall advertising spend in the car market has fallen since 4.3% since 2013 (Mintel, 2015a), which suggests that advertising spend is not the cause of increased sales. However the decreases in advertising spend have been in only Press, Direct Mail and Internet; with internet suffering the most with an 8% fall from 2011 (Mintel, 2015a). Whereas spend in TV advertising has seen the biggest increase, and with an increase in sales and performance of the economy, manufacturers are taking advantage of this typically expensive medium (Mintel, 2015a). This suggests that as consumer confidence has increased, other mediums such as press and internet have been less effective. Independent car review companies can fall under press advertising, which indicates that perhaps less effective in increasing sales. However consumer reviews are an external form which is currently unpaid, so perhaps manufacturers may rely more on electronic word-of-mouth than other advertising mediums.

In terms of car reviews, major current online sources have been ranked as shown in Fig.2:

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Fig.2 Car review sources ranked through Alexa (2015)

Rankings give an indication to which source of car reviews is most popular/used. Autotrader is mainly a sales website, which incorporate both expert and consumer reviews; so consumers may use them while searching to purchase at the same time. Top Gear although ranked very low, may mainly get viewings via Youtube, TV or other forms. Other websites in Fig. 2 are solely car review websites, thus consumers may looked to these for an expert opinion.

2.5 Market Summary

The analysis of current car purchasing processes, consumer usage of reviews, the UK car market and current car review sources has formed a good basis for further investigation. Themes of information search have been identified, and the increasing use of online reviews has been identified. The overall market analysis has shown an opportunity to research consumer usage of car reviews.

3.0 Literature Review

This literature review will identify and examine the relevant academic theory around the effect of reviews on the consumer decision making process. A focus on reviews on the car industry has been taken as it is an area yet to be explored, and by focusing on this industry in particular, it allows more in-depth analysis.

The review will start by outlining the consumer decision making process; this will help identify where reviews are used in consumer purchase decisions and how it can influence them. Secondly the review will analyse the key academic principles around why consumers use reviews. It will analyse how it can affect consumer purchasing decisions. By doing these it will provide a basis of knowledge around the subject area, and provide indication to where research in this paper will fit.

3.1 Consumer Decision Making

To be able to examine the effect of reviews on consumers, it is important to consider how consumers make decisions. An analysis into how consumers make decisions will reveal how reviews can affect decision making, and ultimately influence buyer behaviour.

Fig.3 Buyer decision-making process model developed from Dewey by Blackwell et al. (2006)

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Evaluation of Alternatives

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The consumer decision process, first introduced by Dewey in 1910 (Bruner and Pomazal, 1988) defines the process to which consumers go through during each purchase.

The first stage is where consumers identify a need or problem, this is an important stage as Bruner (1986) outlines that purchases will not be made if a problem is not identified. For the purpose of this paper, the need/problem would be for a car. Bruner and Pomazal (1988) describe problem recognition as the difference between 2 components: actual state and desired state; where actual state is where the person current is, and the desired state where the person wishes to be.

The second stage is information search, Blackwell et al. (2006) defines this stage as where consumers begin searching for information to meet their unmet needs, where search can be internal or external. Blackwell et al. (2006) also outlines that there are two types of information source; marketer-dominated and non-marketer dominated. Reviews are a form of external non-marketer dominated source, as it requires consumers to actively search for information, is not controlled by marketers and is a form of electronic word-of-mouth. Kulviwat et al. (2004) concludes that e-firms should utilise that the internet has allowed customizable searches; and should create minimal search cost and a hassle free experience that will encourage online search, which then leads to purchases. Consequently some car brands already do something similar, incorporating reviews and ratings into their websites. How this can differ between purchases will be later discussed in this chapter.

Moreover Baek, Ahn and Choi (2012) state that in terms of reviews, peripheral information processing occurs at this stage, narrowing down possible choices in the stage of information search. This means that consumers will be expected to be actively searching through car reviews at this stage. Moorthy et al. (1997) identified whether consumers search or not is dependent on: relative brand uncertainty, individual brand uncertainty, search cost and involvement; with relative brand uncertainty is not knowing which brand is best, and brand uncertainty is not knowing what each brand can offer. This can be applied to the car information search process, as the amount of information search and reviews read depends on individuals’ prior knowledge of brands.

The third stage is the evaluation of alternatives, this is described by Kotler (2008, p148) as “how consumers process information to arrive at brand choices”. Baek et al. (2012) state that this is where central information processing of reviews occurs. This suggests that consumers will evaluate reviews in more depth at this stage, after gathering possible car purchase options, they will analyse reviews about each possible option. Prasad et al. (2012) found that reviews are used more in the information search stage, than the evaluation of alternatives. However their research was based on hotel purchases, and its’ results may be different for a car purchase; as the decision making process with hotels will differ to those involving cars.

The fourth stage is the purchase. Kotler (2008) outlines that 2 factors can come between purchase decisions and purchase intentions: ‘attitudes of others’ and ‘unexpected situational factors’. Reviews therefore could be disregarded at this stage, as purchase intention could be built upon the reviews but stronger influencer importance such as a parent, may influence your purchase, regarding your intention as the wrong, thus changing your purchase decision. On the other hand personal reviews may still have significant effect on the purchase decision as their influencer importance can be higher and fall under ‘attitudes of others’ in comparison to company-led reviews. Furthermore reviews have been found to affect the purchase decision process, as Lee and Park (2007) state online reviews are important to purchase decisions and product sales as they serve information sources and recommenders. The effect of reviews will be further discussed later.

The last stage of the process, is post-purchase evaluation. Consumers experience levels of satisfaction and dissatisfaction at this stage, with levels depending on the difference between expectation and performance (Chaneta, 2014). This discomfort is also known as ‘cognitive dissonance’, a theory by Festinger (Kassarjian, 1965). Consumers seek dissonance reduction strategies at this stage, such as seeking information that supports or reinforces their decision, and avoidance of information that supported the alternative decision (Connole et al. 1977). This shows that it is possible that the use of car reviews can be continued at this stage; possibly as a dissonance reduction technique, reading positive articles about the car, and writing a review of their own.

On the other hand it can be argued that this process does not always occur with every purchase, nor is it always linear. For example with impulse purchases, a common shopping behaviour of modern shoppers (Hultén and Vanyushyn, 2014); it is unlikely that the consumer will follow each stage of the process. Moreover it is dependent on the buying situation, as this will change the decision process; there are 3 buying situations: routine problem solving, limited problem solving and complex problem solving (Kotler 2006; Masterson and Pickton, 2010). Car purchases are commonly categorised as complex problem solving, as it is an expensive infrequent purchase; it is possible that this causes an elaborate decision-making process.

In contrast to the consumer decision-making process there are alternative models, such as Ehrenberg’s (2000) Awareness-Trial-Reinforcement (ATR) model. His model outlines how consumers can become habitual buyers of brand, and how advertising plays a role in each stage of the model. For a car purchase this could mean after a consumer has become aware of a car brand, brought a car, and then gone on to be brand loyal after having a satisfactory experience with the product. Reviews can fit into the model also, as consumers may make a trial purchase after reading a good review and could also read reviews to reinforce their purchase decision.

Correspondingly, prospect theory by Kahneman (1979) reveals that people make decisions based on potential gains and losses, rather than final outcome. This reveals that car reviews are used to quantify gains and losses in the decision making process. However theory is very simplistic compared to other models, and the decision-making involved may be more complex, especially regarding a high involvement car purchases.

There is a clear reoccurrence of information search involved in all models of consumer decision-making, especially as cars are a high involvement and risk purchase. With reviews being an information source for consumers; to further understand the use of reviews, the literature review will now analyse why consumers seek information from reviews.

3.2 Why consumers seek information from reviews

Peer reviews on social platforms are a form of electronic word-of-mouth (Cheung et al., 2014). Hennig-Thurau, Gwinner, Walsh, & Gremler (2004, p39) define electronic word-of-mouth (e-WOM) communication as “any positive or negative statement made by potential, actual, or former customers about a product or company, which is made available to a multitude of people and institutions via the Internet”. Litvina,Goldsmith and Pan (2008) highlight that the most important information source for consumers when making a purchase decision is interpersonal influence and word-of-mouth (WOM), thus illustrating the importance of reviews to consumers.

Hennig-Thurau and Thorsten (2003) outlined 8 motives for why consumers read reviews; Burton and Khammash (2010) who examined users of ‘ciao’ an online ‘consumer portal’ found the existence of these 8 motives but also discovered a further 10 motives and developed a framework incorporating all these motives.

Fig.4 Burton and Khammash (2010) Reading themes, motives, and associated behaviours

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This framework will be a useful aid for research, as the existence of the components can then be tested in terms of car reviews. It also provides a basis for expected results, in terms of what reasons for use may occur, or what reasons to look for in future research.

The motives in the framework have been found and been supported by many academics. For example Labsomboonsiria et al. (2014, p1) discovered that “members seeking problem-solving support in combination with elements of relaxation will be more inclined to exchange with other community members and develop a social bond within that community”; thus supporting the existence of the social theme.

Furthermore there is evidence of risk reduction as a motive, as Baek et al. (2012, p99) state that “when buying products from an online retail market, consumers find it difficult to make purchase decisions based on information provided by sellers. Therefore, consumers look for more detailed product information from online reviews written by other consumers.” This suggests that consumers may find seller’s information bias, so seek reviews from other consumers to aid in making decisions; Park and Lee (2008) support this, outlining that consumer-created information aids in decision making as it provides indirect experiences. Malbon (2013) also found that consumers are heavily reliant on consumer reviews when purchasing online, and that reviews deal with the problem of asymmetric information between sellers and buyers. This implies that consumers may perceive car reviews as providing information that brands and dealerships would not provide. Additionally there seems to be a reoccurring theme of distrust of sellers from consumers.

However Burton and Khammash (2010) framework was based on users of only one review site, so the generalisations to car review websites and users may not be reliable, and their findings are limited as it’s only context specific. Whether consumers use reviews at all is dependent on the purchase, as mentioned earlier the consumer decision making process may be different for each purchase. In terms of buying situations mentioned earlier, car purchases are likely to be complex problem solving buying situations, suggesting that this situation is likely to incorporate the use of car reviews. This is supported by Lewis and Howard (2011) who found that when prices rise consumers search more.

Moreover the level of involvement affects the usage rate of reviews, as Laurent and Kapferer (1985) state that the level of involvement affects the length of time searching for information in purchases. High involvement purchases such as cars, are therefore more likely to use reviews in the decision making process. Hsu and Lee (2003) also outlines how marketing strategy is aligned with the level of involvement associated with it, and they give the example of how ads should be used to decrease financial risk for cars. Consequently car brands should look to incorporate car reviews into their marketing strategy.

Having discussed why consumers use reviews, the next section will illustrate the effects reviews have on the consumer, this will aid the understanding around the effects that can arise from car reviews.

3.3 Reviews: the effect on consumers

It is clear that consumers use reviews for many reasons. However the effect on their buyer behaviour can vary. Burnkrant and Cousineau (1975) revealed that whether or not individuals evaluate information about a product of a service, is dependent whether they perceive the information to be credible. This highlights that not all reviews will change consumers behaviour, regarding the car industry this could indicate that the most effective reviews are from highly regarded individuals or reviewers.

Furthermore there is concept of paid, owned and earned media; where reviews fall under earned media, as this is defined by Burcher (2012, p9) as “brand-related consumer actions and conversations”. Burcher (2012) reveals how the 3 types of media should work synergistically to maximise effect. This suggests that car companies should utilise all types of communication.

Stephen and Galak (2012) identify two types of earned media: traditional (e.g. publicity and press) and social (e.g. blog and online community posts). Car reviews can occur in both, with traditional earned media occurring from car review companies and social earned media can come from consumers posting their own reviews on cars. Stephen and Galak (2012) also found that both types of earned mediums effect sales. This suggests that car reviews can have an influence on what consumers choose to purchase. Bao and Chang (2014) found that that both types of earned mediums influence each other; Stephen and Glak (2012) correspondingly found that social earned media drives traditional earn media activity. This implies that there could be a link between personal consumer reviews, and what car review companies choose to post.

Moreover Katz and Lazarsfeld (1995) two-step flow theory highlights how individuals form opinions through opinion leaders and opinion formers, who themselves form opinions from mass media. Uzunoğlu and Misci (2014) adapt this theory into a modern context of bloggers and their digital influence; they develop an adapted model which reveals that bloggers act as opinion leaders, as they write reviews/blogs, the information is then discussed between readers as well as fed back to the brands. Baek, et al. (2012) results support the influence of opinion leaders, finding that reviewers who are ranked in the top 10,000 on Amazon.com are more credible to readers. This reveals that it could be effective to identify the opinion leaders and formers in the car industry, as well as the key websites from which car reviews are found.

Whether consumers adopt information from reviews is based on two aspects of the information process: usefulness and enjoyment (Park and Nicolau, 2015); this illustrates that consumers also may disregard many reviews depending on these variables. Park and Nicolau (2015) found that people find positive and negative ratings more useful and enjoyable; with negative reviews perceived as being more useful and positive ratings as more enjoyable.

On the other hand, Koller and Floh (2013) conducted a study on the effect of reviews on purchasing behaviour; they found a significant change in shopping behaviour if reviews were positive medium and strong reviews, but not in negative reviews. This suggests that although consumers may perceive negative reviews as ‘useful’, it doesn’t affect their purchase behaviour, implying reviews may reinforce already made subconscious decision. However it is difficult to measure purchase behaviour; a negative review may cause a consumer not to purchase at all, but recording this and finding a causal effect will be difficult to quantify. In addition it doesn’t outline the effects it has on future purchase behaviour and thinking, as reviews could cause the consumer to assess products in a different way.

Cheung et al. (2014) found that while both reviews and peers have an influential effect on a consumer decision, a peer’s purchase is more influential than an online review; however their research also revealed that it is also dependent on the individual, as those with more brand knowledge are less influenced, and those part of a social community are more influenced. The findings suggest that personal influencers may be more influential than online car reviews, dependent on the individual’s knowledge, and if they are part of a social community. Interestingly the study was based on an online beauty community, thus the findings may not correlate with the car industry.

3.4 Conclusion

In conclusion, it is clear that the buyer decision-making process is useful, but is not a definitive framework, which can vary dependent on many variables. Reviews are used throughout the decision-making process; in terms of car purchase decision-making, this can be explored. Consumers also use product/service reviews for a variety of different reasons, where clear themes such as risk and social interaction occur. Reviews overall, appear to have an influence on consumer purchases and intention, the degree to how much is difficult to define as there many factors and other influences to account for. Literature into reviews is readily available, however in-depth analysis into car reviews and its effects on the consumer is yet to be identified, thus revealing a gap for research. The information from this literature review will be used throughout this project, with consideration of theories and frameworks used to devise questions used in data collection, and will be discussed with findings.

4.0 Research Problem

Gibson (1998) outlines the importance of defining a good research problem to achieve successful market research. Following insights revealed by the literature review, there was a clear gap in literature when regarding car reviews. The following research problem has been identified:

Consumer Behaviour: To determine the effects and uses of car reviews to consumers.

This problem identifies the need to gain insights into the use of car reviews. In particular addressing what effects and uses car reviews may have which can be identified through this research.

4.1 Research Objectives

With the consideration of the marketing research problem the following objectives have been devised:

1. Do potential car purchasers use review sites? Is there a difference between age categories?

The literature analysed revealed many reasons for the use of reviews such as the Burton and Khammash’s (2010) framework. Whether or not this is an occurrence in all car purchases is yet to be discovered. Age could be a factor which can affect the usage of reviews; with younger consumers having grown up with the release of Web 2.0, and therefore are more accustomed to the accessibility of information, so a correlation of usage by age could occur. This objective will identify whether review sites are even used during car purchase decision processes, and whether the use of review sites is correlated to the age of the respondent.

2. What stage of the buying process are car reviews most influential?

Previous analysis revealed many potential uses of reviews within stages of the buying decision making process. At what stage it can have most influence can differ when it comes to car purchases. The aim of this objective is to identify what stages of the buying process car reviews are used, and where they have most influence.

3. What type of car review sites are used?

This objective will classify what review sites are used, are they mainly car-company specific, consumer reviews, or independent company websites. By identifying what car review sites are used it will indicate which review sites are most popular.

4. Which reviews have more influence, reviews from recognised companies, Independent car review companies or personal/consumer resources?

There may be a difference between how consumers perceive certain reviews, and can identify whether the type of review is important to the consumer. The objective will identify which type of reviews have most influence. A summary of how these objectives can fit into literature is shown below:

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5.0 Methodology

5.1 Introduction

Vasiliou, Eriotis and Daskalakis (2009) found that different methodologies can lead to different conclusions; therefore it is vital that the most reliable methodology is chosen. The literature review revealed that the effect of reviews can vary, especially regarding a high involvement purchase of cars. This indicates an area of interest to be studied. The purpose of this study is to investigate the effect of car reviews on consumers, and how it can affect their decisions.

This chapter will discuss the chosen research methodology, while also giving justification for choices. It will 1st outline the research approach; highlight the differences between primary and secondary data, and the debate between qualitative vs quantitative research. It will then describe the classification of the research design, whether this is exploratory or descriptive. The decisions on sampling will be also discussed; starting with defining target audience, moving on to the sampling frame, methods and size.

Moreover chosen data collection techniques will be outlined and explained. Questionnaire design will then be examined to ensure results are valid, reliable and unbiased. The importance of pilot testing will also be conversed, and chosen data analysis techniques will then be examined. Finally marketing ethics will deliberated, and how to ensure the research remains ethical will be described.

5.2 Research Approach

5.2.1 Primary vs Secondary

Primary research is about generating data related which will address a research problem/need; whereas secondary data is reviewing existing available data which addresses a research problem/need (McGivern, 2013, pp49-50). Throughout the literature review chapter, secondary research into the topic of reviews has already been carried out; which gave a good basis of knowledge. However it is inappropriate to use solely secondary research to address the research problem; as secondary research carries limitations.

Secondary data available is commonly done to other purposes than current research (Aaker et al. 2013, p89); this is an occurrence among car reviews research as the availability of such research is difficult to find and not completely relevant. Secondary data also carries the problem of inaccuracy, where researchers do not have control over the data, thus do not know if the research was accurate and reliable (McDaniels and Gates, 2013, p65). Secondary data also is outdated (Burns and Bush, 2014, p127), thus the relevance to address the research problem with current consumer trends may not be suitable.

Primary data collection allows the researcher to tailor research to address a problem (Malhotra et al. 2012, p115). The limitations of secondary data makes primary data collection a more appropriate method.

5.2.2 Qualitative vs Quantitative

A mixed method approach of both qualitative and quantitative research methods will be utilised, Burns and Bush (2014, p146) define this as “pluralistic research”, whereby the combination of both methods is used to gain advantages of both.

McGivern (2013, p146) outlines qualitative research being about describing, understanding and gaining insights rather than measurement. Burns and Bush (2014, p146) state that this type of research involves assembling, evaluating and translating data of observation of what people do and say. McDaniel and Gates (2013, p81) state an advantage of qualitative research is that it can “improve efficiency of quantitative research”. Malhotra et al. (2012, p183) state that qualitative research is commonly used before quantitative research to provide hypothesises and identify variables to be included in quantitative research. By first conducting qualitative research into car reviews, it will provide more in-depth understanding of the uses and effects on consumers; and will provide a basis for quantitative research.

Malhotra et al. (2012, p187) describe quantitative research, whereby data is quantified and usually statistically analysed. Wright and Crimp (2000, p374) convey that quantitative research is usually carried out in a scientific framework, which used objective criteria and procedures that achieve statistical reliability. Bradley (2013, p268) reveals that a major reason for quantitative research is the creation of meaningful segmentation; and that it goes beyond basic demographic profiles by giving information on usage and attitudes. By conducting quantitative research it will provide statistical analysis as well as larger more representative samples. It will also provide statistical conclusions and can allow hypothesises to be tested.

By undertaking a mixed method approach, this can aid to counterbalance the weaknesses of each method. A main limitation of qualitative research is the lack of generalisability, due to relatively small samples being tested (McDaniels and Gates, 2013, p82). Quantitative research also suffers from the lack of being able to obtain information on detail and context, which can have effects on the reliability and validity of a study (McGivern, 2013, p52).

5.2.3 Classification

The research design is to be classified as exploratory research. This is research design is an adaptable approach which allows researchers to understand immeasurable marketing phenomena (Malhotra, Birks and Wills. 2013, p86). Churchill, Brown and Suter (2010, p81) state that this research helps increase a researcher’s knowledge about the problem, where prior they have had no experience regarding the problem. This type of research provides insights and understanding of unexplored topics; therefore is appropriate as there has yet to be in-depth research into car reviews.

However throughout the research aspects of descriptive research will also be used. Descriptive research is a type of conclusive research which main aim is to describe (Malhotra et al. 2013, p90). Descriptive research should be used when: describing characteristics of segments; estimating buyer behaviour, and making predictions (Iacobucci and Churchill, 2010, p84). The research will also be able to provide descriptions of consumer behaviour in terms of car reviews, as well as insight into segment differences; therefore aspects of descriptive research will be employed.

Furthermore the type of descriptive study adopted will be cross-sectional. This is defined as a study during only one point in time (Burns and Bush, 2014, p103); this is most appropriate in comparison to longitudinal, as there is limited time and resources available.

[...]

Excerpt out of 87 pages

Details

Title
The Horsepower of Car Reviews
College
De Montfort University Leicester
Course
Marketing Management
Grade
1st
Author
Year
2015
Pages
87
Catalog Number
V337005
ISBN (eBook)
9783656988953
ISBN (Book)
9783656988960
File size
2318 KB
Language
English
Tags
Marketing, reviews, Car reviews, buyer behaviour, consumer decision making, consumer
Quote paper
Phoenix Hy (Author), 2015, The Horsepower of Car Reviews, Munich, GRIN Verlag, https://www.grin.com/document/337005

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