Table of Contents
Executive Summary
For any retailer or businesses, the key to
a successful strategy is based on the understanding of consumer behaviour. In
our report, we will examine each marketer’s comprehension of consumer behaviour
to influences in marketing campaigns and advertisements. We will be comparing with Kia Cerato Forte
against Toyota Corolla Altis.
Kia has a potential growing market and
positions itself as a value for money vehicle for what it can offer. In this
case, Kia Cerato Forte is offering their products at a more affordable range,
thus they also have more equipment and features such as having a classy
interior ambience. Whereas, Toyota Corolla Altis had positioned themselves at
low cost and tinged with some sporty feel due to the sleek body and sporty
features. Other direct competitors also include Honda Civic and Hyundai Avante.
The indirect competitors are Nissan Sunny and Chevrolet Cruze.
In the external influences, three main
aspects that are looked into are: culture and subculture, demographics and
group influences. Culture influences on the norms that set on certain
behaviours deemed appropriate for all people in a social context. In Singapore,
having a car is seen to a social desire and people see it as possessing a
higher status or even a better life. Subcultures within the group like car
forums would also participate in providing information and feedback to
influence potential buyer group. Genders also play a role in buying decision of
Forte because since the main target market is the young families that do not
have necessary income to purchase a car of a higher price range, therefore,
women plays a very important role in influencing their husbands’ buying
decision. Group influences such as knowledgeable car buyers who acts like
opinion leaders and enjoy exchanging information in the internet, colleagues
and peers will have a role in influencing the buyers.
The internal influences describe the means
by which consumers’ process information while they are being influenced by a
variety of groups, situations and marketing efforts. In this section, the four
main aspects that are explored are needs and motives, perception, learning and
lifestyles. Forte can fulfills needs by providing convenience on basic
transportation as well as enhancing the need for stable self-esteem. In order
to create awareness in consumers’ frame of mind, the frequency of
advertisements should be increased. Advertisement should also capture attention
of potential buyers and thus interpretation of these advertisements should be
focused on Forte’s target buyer segmentation. Operant conditioning is used in
to aid learning because we feel that the most important part of the car’s
buying process is the test drive of the car itself before making a decision.
Finally, lifestyle are enhanced with Forte with ‘something better’, ‘look at
me’ and conventional family life.
Subsequently, we examined the consumer
decision making process to find out how consumers make decision on purchasing
cars and where should marketers should place their information and provide
value-added services to retain and attract consumers. With a high involvement
product like Forte, consumers engaged in extended decision making. In which, they
will assess the internal and external information. The main evaluation criteria
used for purchasing a car are price, design and performance. Forte’s consumers
will be looking into certain aspect such as affordability. Therefore, rank
brands on evaluation importance such as lexicographic and elimination by
aspects will be possibility used. In order to build brand’s loyalty,
relationship marketing can be used as an approach.
Lastly, marketing strategy in term of 4P’s
(Product, Price, Promotion and Place) of both Forte and Altis are scrutinized
to reach a conclusion on their application of knowledge in understanding the
consumer’s behaviour and recommendations will be proposed for further
enhancement.
Introduction
In this report, we will be exploring the impact
of buyer behaviour on marketing strategy. We had chosen an automobile industry.
We will be using Kia Cerato as our main product and Corolla Altis as our
competing product. In our findings, they are both high-involvement products
with similar price ranges and primary target segmentations. However, no two
products are identical; they have different outlooks, different marketing
strategy employed by two different company and thus some functional
differences. Here, we shall scrutinize in
the each marketer’s application knowledge of consumer behaviour theory and
principles, in order to reach a conclusion of which is more successful. Finally,
recommendations will also be made for further improvement.
1. Market
1.1 Size of market
The total car population in August 2009 is 570440.
In the month of August 2009, car’s market size make up
of 62.34% of the total motor vehicle population. (Appendix A1)
1.2 Market share
In the month of August 2009, Kia’s market share is
0.082% of the total car market size. (Appendix A2)
1.3 Market position
Kia motors positions itself in the market as one of
the world's fastest growing auto brands and also as the world consumers’
exceptional vehicle at an unbeatable value. It does so by pricing their
products at a more affordable range as compared to its rival the Toyota Corolla
Altis.
1.4 Company’s principal product in terms of features and benefits
Designed by Peter Schreyer, the
new Kia Cerato Forte exudes a more aggressive presence with its gaping black
grille and strong creases that compliments the car’s overall shape. The Cerato Forte is one of the most
powerful in its 1.6-litre unit segment being bettered only by the 125bhp
1.6-litre power plant found in the Honda Civic. Its maximum torque of 156Nm is
also class-leading, beating the Japanese engine by 5Nm. In addition, the
2.0-litre Cerato Forte
also leads the pack for power.
As for the size wise, it is 30mm
longer, 40mm wider and 10mm lower than the previous Cerato with
changes made in the interior come in the form of new better quality buttons and
a newly designed centre console. The instrument cluster, like the exterior is
clean and is easily readable. On top of that, there are some eye-openers
equipment which includes a trip computer, six-CD changer, tilting and
telescoping steering wheel, automatic climate control, parking assist and
electronic stability control that will make the Cerato
Forte stand apart from its rivals, since features
like these are usually found in cars priced $10,000 to $20,000 more (Lee 2009).
1.5 Positioning of the product
The Kia Cerato Forte position itself as a tremendous
value for money vehicle. It does so by having more equipment and features such
as having a classy interior ambience and the driving position is extremely
adjustable thanks to height adjustment for the seat and a tilt and telescopic
steering column which is a rarity in the price segment than any of its
competitors.
1.6 Product life cycle stage
Product life cycle (PLC) has to do with the life of a
product in the market with respect to business costs and sales measures. A
product has a life cycle is to assert four things: 1) that products have a
limited life, 2) product sales pass through distinct stages, each posing
different challenges, opportunities, and problems to the seller, 3) profits
rise and fall at different stages of product life cycle, and 4) products
require different marketing, financial, manufacturing, purchasing, and human
resource strategies in each life cycle stage. (Levitt 1965)
With regards to Forte, it is in the growth stage of
the PLC as it can be seen by the increasing public awareness, price decreases
due to the increasing competition and the rising sales volume.
2. Competitors
The direct competitors of Kia Cerato Forte are namely
Toyota Corolla Altis, Honda Civic, Hyundai Avante and their indirect
competitors are Nissan Sunny and Chevrolet Cruze.
Toyota Corolla Altis is Singapore’s top selling car
(wilbursuen.com 2009), positioning themselves at a low cost with
differentiation of a sporty feel due to the sleek body kits and sporty
features. They are also positioned in consumers’ minds as reliable work horses.
The Honda civic positioned
itself in the upper-market in term of price; however they differentiate
themselves by their sophisticated sporty design, especially the two-tier
dashboard interior that was found in high end sport cars.
Hyundai has portrayed itself to be
efficiently equipped with low cost productions and the reputation of a car
valued for money. Although the Avante has a low cost position, they did not
differentiate themselves well enough to their competitors.
While Chevrolet Cruze tries to
differentiate themselves as a family car, its’ limited boot space will struggle with a
full weekly shop and a baby’s pram. Its design appeal and quality focus to
Singapore's value segment as a budgeted car enables Cruze to have low cost
position.
Last but not least, Nissan Sunny has a
niche market with a dedicated group of fans who likes the
old car mechanism for example hydraulic steering wheel as compared to the
automatic ones.
Refer to Appendix B1 for detailed
specifications of each car.
3. Identification of Target Market
3.1 Primary Target Segment
|
Kia Cerato Forte Target Segment
1
|
|
|
|
Demographics
|
Income Group
|
$2,000 - $4,000
|
|
Family Life Cycle
|
§
Newly-wed
Family (with young children)
§
Dual
Income Family
|
|
|
Population Size
|
4.8 million
|
|
|
Target Age Structure
|
25years – 34 years
Population: 553,000
|
|
|
Psychographics
|
Personalities
|
§
Budget-conscious
§
Altruistic
§
Outdoor
and adventurous
|
|
Lifestyles
|
§
Budget-constrained
§
Hectic
schedules
§
Trendy
lifestyles with frequent entertainments and functions to attend.
|
|
|
Activities, interests and
opinions
|
§
Car
club outings and networking with friends of the same interests in forums.
§
Interest
in car tuning, constantly upgrading car parts with the latest technology.
§
Road
adventurous
§
Stronger
opinions on value-for-money cars
§
Prioritize
convenience
|
|
|
Behavioural
|
Usage
|
§
Heavy
usage of car as a means of transport
|
|
Deal Proneness
|
§
Attracted
to promotional packages
|
|
|
Benefits
|
§
Fuel
efficient
§
Safety
features
|
|
|
Kia Cerato Forte Target Segment
2
|
|
|
|
Demographics
|
Monthly Income Group
|
$3,500 - $5,500
|
|
Family Life Cycle
|
§
Married
Family with children in their teenage years
§
Single
Income Family
|
|
|
Population Size
|
4.8 million
|
|
|
Target Age Structure
|
35years – 44 years
Population: 625,000
|
|
|
Psychographics
|
Personalities
|
§
Family-oriented
§
Practicality
§
Easy
going
|
|
Lifestyles
|
§
Laid-back
§
A
bigger-sized family with children and elderly members.
|
|
|
Activities, interests and
opinions
|
§
Prioritize
other family members’ needs above own interests.
§
Frequent
family outings.
|
|
|
Behavioural
|
Usage
|
§
Heavy
usage of car for transport.
|
|
|
Deal Proneness
|
§
Attracted
to promotional packages
|
|
|
Benefits
|
§
Fuel
efficient
§
Safety
features
|
|
Toyota Corolla Altis Target
Segment 1
|
|
|
|
Demographics
|
Income Group
|
$2,500 - $4,500
|
|
|
Family Life Cycle
|
§
Married
Family for at least 10 years
§
Average
Income Family
|
|
|
Population Size
|
4.8 million
|
|
|
Target Age Structure
|
25years – 34years
Population: 553,000
|
|
Psychographics
|
Personalities
|
§
Family-oriented
§
Egoistic
§
Urbanistic
|
|
|
Lifestyles
|
§
Average
spending power
§
Laid-back
|
|
|
Activities, interests and
opinions
|
§
Road
accessible get-away during the weekends.
§
Business
trips by car to nearby countries.
§
Ferry
the children to and fro from schools
§
Stronger
opinions on branding
|
|
Behavioural
|
Usage
|
§
Heavy
usage of cars as a means of transport.
|
|
|
Deal Proneness
|
§
A
small extend of attraction with promotional packages
|
|
|
Benefits
|
§
Fuel
efficient
§
Brand
loyalty
|
|
Toyota Corolla Altis Target
Segment 2
|
|
|
|
Demographics
|
Monthly Income Group
|
$3,500 - $5,500
|
|
|
Family Life Cycle
|
§
Married
Family with children in their teenage years
§
Single
Income Family
|
|
|
Population Size
|
4.8 million
|
|
|
Target Age Structure
|
35years – 44years
Population: 625,000
|
|
Psychographics
|
Personalities
|
§
Family-oriented
§
Practicality
|
|
|
Lifestyles
|
§
Laid-back
§
Emphasis
on the comfort of daily lifestyle
|
|
|
Activities, interests and
opinions
|
§
Stronger
opinions on branding.
§
Transport
used to ferry the children and elderly members.
|
|
Behavioural
|
Usage
|
§
Heavy
usage of cars for transport.
|
|
|
Deal Proneness
|
§
Brand
loyalty
|
|
|
Benefits
|
§
Fuel
efficient
§
Brand
loyalty and its years of reputation in the industry.
|
With the age
group 25 – 34years old, this group of people has an average monthly income of
$2,000 to $4,500, these consumers are brand loyal and seeks a value for money
means of transport meant for heavy usage, therefore values fuel efficiency.
With the age
group 35 – 44 years old, this group of people is earning a monthly income of
$3,500 to $5,500. This will be a matured family where priorities for children
and the elderly members are ranked above their own interests. They lead a laid
back and down-to-earth lifestyle with the convenience of the car as mainly for
transportation needs. However, there is a substantial degree of brand loyalty for
the purchase of a car corresponding to the years of its brand reputations in
the industry. The benefits of the car features and performance levels are also
important factors for purchase.
3.2 Potential Market Segments
|
Potential Market Segment
|
|
|
|
Demographics
|
Monthly Income Group
|
$3,500 - $5,500
|
|
|
Family Life Cycle
|
§
Single
status personal
§
Means
for social status upgrading
|
|
|
Population Size
|
4.8 million
|
|
|
Target Age Structure
|
20years – 25years
Population: 625,000
|
|
Psychographics
|
Personalities
|
§
Work-oriented
§
Emphasis
more on the outlook of the car
|
|
|
Lifestyles
|
§
Active
and adventurous
§
Enthusiastic
about their work
|
|
|
Activities, interests and
opinions
|
§
Stronger
opinions on outlook.
§
Means
of transport
§
Young
entrepreneurs
|
|
Behavioural
|
Usage
|
§
Heavy
usage of cars for transport.
§
Car
as a status symbol
|
|
|
Deal Proneness
|
§
Affordable
with sporty outlook that the younger generations will take a liking for
|
|
|
Benefits
|
§
Nicer
outlook
§
Have
the sporty feel with a hint of classiness
§
Priced
under the affordable range whereby the young entrepreneurs are able to
purchase it
|
Selected Target Segment
We will
refer to Kia Cerato Forte’s primary target segment 1 stated above for sections
4-6 below.
4. External Influences
4.1 Culture and Subculture
There are several values in the society
consistent with the consumption of the product. Firstly, it is socially
desirable to own a car, and people will work towards higher status and a better
living standard. Consumers believe that even though Japanese cars may be better
than Korean cars in terms of reliability, Korean cars offer the best value for
money for the product they offer. It is widely believed that the cost of owning
a car in Singapore is very high, and this includes the price of the car, the
Certificate of Entitlement (COE), road tax, insurance, as well as fuel costs. This
target group is also concerned with saving up for a house and for future
children, thus the want to spend less on cars. Subculture groups such as those
in the Cerato Forte Club Singapore (ceratoforte.sg 2009), or car forum groups
such as Singapore Cars Forum (singaporecarsforum.com 2009) would also play a
part in providing information and feedback influencing potential buyer group.
The product might appeal most to the early adopters as
they are well educated and relatively successful in their careers and are
willing to take calculated risk in innovation like the Forte instead of just
settling for the safer choices. They also use many information sources to aid
their decision making. They dislike failure therefore any problems they have
from the Forte would set them back.
4.2 Demographics
As previously mentioned, demographics plays a big role in
describing the population’s behaviour in consumption. The age group of 25-35 is
the main target group of the Cerato Forte. This is because the Forte is
targeted at young families that do not have the necessary income to afford a
car of a higher price range (for example the 70-80 thousand price range) and
yet needs a “workhorse” car to satisfy the basic needs of the family including
space, comfort and have a low maintenance cost.
Gender also plays a part in the buying decision of Forte.
Although the Forte is targeted more for young family man due to its size and
design characteristics, modern day women plays a very important role in
influencing the decision of their husbands as they also have a share in driving
the family car. Thus it is important for the Forte to have features that
attracts the female gender into buying one.
Lastly, socioeconomic influences play a major role in
influencing consumption. The main factor is the income group of the target
segment as the rising costs of owning a car in Singapore (rising fuel price,
insurance, road tax, Certificate of Entitlement and Electronic Road Pricing)
forces consumers to think twice about spending more money on the car itself as
they may not be able to upkeep the car.
4.3 Group Influence
Consumers in the car industry are highly susceptible
to reference group influence elements. The target group of Forte is affected by
all three types of reference-group influence and they are the normative,
informational and identification influence.
Informational influence is especially strong in the
case of knowledgeable car buyers as they enjoy exchanging information with
knowledgeable peers especially in the target age group where they frequently
search for online information on the Forte as well as share information in
special interest groups such as the Forte Club forums or any other online car
forums. It is a common belief that Korean cars do not have the quality to
compete with Japanese cars such as the Toyota Corolla Altis and feedback from
previous generation Korean cars owners give them that bad reputation and this
information may be spread around.
Normative influence may come from the buyer’s peers,
colleagues or even close family members as they would mock other buyers who had
bought a KIA Korean car or even those who rushed to buy the Forte. This would
set the buyers back as they do not want the same situation to happen to them
when they decide to buy one.
Identification influence is present when buyers in the
target group see executive dressed, people in the television advertisement of
Forte designing the car with Peter Schreyer, an ex Audi designer heading the
team. They will then feel that the car is designed and used by executives and
want to buy one. Buyers will also be influenced when they see people around
them rushed to book a Forte when it was launched and decides that is it a good
car and decides to buy it.
5. Internal Influence
5.1 Needs and Motives
Maslow's hierarchy of needs is predetermined in order
of importance. It is often depicted as a pyramid (Appendix C1) consisting of
five levels: the lowest level is associated with physiological needs, while the
uppermost level is associated with self-actualization needs, particularly those
related to identity and purpose.
With the Cerato Forte positioned itself at a more affordable
price range with a list of equipments that is rarely seen in the price segment,
the esteem needs of many can be fulfilled especially those in the target age
group. Most people have a need for a stable self-esteem which includes need for
the respect of others, the need for status, recognition, fame, prestige, and
attention. Deprivation of these needs can lead to an inferiority complex. In
addition, the classy interior ambience that is incorporated in the Forte makes
the car looks prestige as a result it helps in fulfilling the need for status
and prestige.
Furthermore, getting a vehicle is most likely to be
one of the motive in most people at the target age group of 25 to 35 years old
thus with the Forte’s affordable price range they will be able to attain it. In
this way, the esteem level in the Maslow's hierarchy of needs will be
satisfied.
5.2 Perception
Perception is an important part of consumer
information processing. It involves four stages including exposure, attention,
interpretation and memory. The first stage of exposure means that we should
expose buyers to the advertisements by increasing the frequency, the media and
the location of the advertisements. This can be done by having very large
posters on a building, having road shows in prominent places such as along
Orchard road or Shenton way, constantly exposing buyers to online website,
magazine, newspaper, television and radio advertisements.
After potential target buyers have been exposed to
these promotional efforts, they must be able to draw the attention of the
buyers. Print advertisements such as those found in posters, magazines,
newspapers and online websites must capture the attention of potential buyers
but using large advertisements that are striking in colour drawing their attention
to the style and design of the Kia Cerato Forte using contrasting colours as
well as using eye catching headliners such as ‘Style, we are there’. The
quantity of information in these advertisements should not overload and should
only contain information such as the brand and name, the car focused on in the
case the Forte, the price of the car, how to contact us and if space allow, the
features included. Television advertisements should portray an image of a very
stylish and nice ride through a long stretch of road with beautiful scenery
show casing the interior as well as the exterior of the car, with music to
match, enticing buyers to come down to the show room to have a look.
Lastly, we must influence the interpretation of these
advertisements focused on our target buyer group. This means that we cannot
have advertisements that offend the female gender but something that appeals to
both genders as buying a car in this target segment is a family decision. The
message we are trying to convey is that you can have a car as good as, if not
better than a Japanese car such as the Corolla Altis at a fraction of the price
with many more family orientated feature to add value for money. This must not
be misinterpreted to be a cheapskate choice. Thus, it is important to keep the
information straightforward and simple.
5.3 Learning
The theory most applicable to the car industry and
especially for Forte’s target segment is the operant conditioning theory of
learning. This is mainly because buying a car is a huge investment and it is
not something you can liquidate easily. That is why the final and most
important part of the car’s buying process is the test drive of the car itself
before making a decision. The positive reinforcement received such as the ride
comfort, power, the interior and exterior design, the additional features
(global positioning system, reverse sensor and auto climatic air conditioning)
and the build quality plays a big role in shaping consumers for the purchase.
Negative consequences such as vehicle breakdown or functions failing will act
as punishment and have the opposite effect. This is why product quality and
customer satisfaction is so important.
Therefore, the first step of this learning process and
the responsibility of us marketers is to use advertisements such as newspaper
advertisements and road-shows to attract consumers to come down to the car
showroom to test drive the car. In order to appeal to the targeted buyer
segment, we need to emphasize the nice styling of the car and the design in
order to mask the not so plausible image of Kia. The pricing must also be very
visible in the advertisements as it plays one of the most crucial roles in
reinforcing buyers to make the purchase.
5.4 Lifestyle
The types of lifestyle segment identified that is
related to Kia Cerato Forte are something better, look at me and conventional
family life.
With the Kia Cerato Forte priced at an affordable
range, those under ‘something better’ lifestyle segment will be able to
purchase it fulfilling their desire in terms of improved status with car
ownership. They would stretch their budget by taking a car loan in order to
achieve this.
The ‘look at me’ segment would spend all the money
they earn and are self-centered and peer driven who are highly conscious of image
and fashion. This segment would be concerned when their peers who own cars and
them not having one affecting their ego. These people also focus on the stylish
aspect of the Forte where looks take the priority when making a decision.
Lastly, the ‘conventional family life’ segment may be
the major lifestyle segment Forte is targeting. This segment consists of
younger families whose life centre around marriage and raising a family and
strives to improve family’s standard of living and enjoy spending time with
friends and family. This can be achieved by improving standard by owning a car
that is affordable and allows them to reduce the trouble and time spent on
travelling using public transport. Forte is also a mid-size sedan suitable for
small families such as these big enough for the children.
6. Consumer decision making processes
Consumer decision making processes include problem
recognition, information search, evaluation and selection, store choice,
purchase and post purchase processes (Appendix D1).
6.1 Information Search
6.1.1 Level of involvement and decision making
Consumers are generally more involved in the
decision-making process for product if they feel risky in some way. The
perceived risk in purchasing a car is high because it requires high commitment,
thus financial risk will occur if the product does not perform to its
expectation. As a result, in purchasing a complex and expensive product like
car, consumers will engage in extended decision-making and high level of
involvement.
6.1.2 Internal Search
It comprises of past searches, personal experience and
low involvement learning. Memories of past experiences by checking on websites,
friends’ opinions on the cars’ models, seeing different cars on the road
everyday will exert some influence on the consumers’ purchasing decision.
6.1.3 External Search
It includes usage of internet in gaining more
information such as accessing the car website, comparing the cars’
specifications and price, checking out in the forums on other consumers’
experiences, opinions and attitudes about Kia Cerato. Consumers will also visit
the car centre for a test drive, thus having direct experience with the
products.
6.1.4 Awareness Set
The table below shows the differences within each
subset.
|
Awareness Set
|
Definition
|
|
Evoked Set
|
Brands the
consumer is willing to consider for the solution of a particular consumption
problem.
|
|
Inert set
|
Brand which the
consumer is aware but towards which he/she is indifferent.
|
|
Inept sets
|
Brands which
the consumers actively dislike and find it completely unworthy for
purchasing.
|
(Quester et al. 2007, pp. 95 – 96)
It will depend on whether
the consumer is a potential target segment of Kia, in order to determine which
subset Kia will categorize in. For instance, if a budget consumer will classify
Kia as an evoked set whereas a wealthy consumer will not consider, and hence
Kia becomes the inept set. As for the budgeted consumers that feel indifferent
about Kia, may categorize it as the inert set.
6.2 Evaluation and Selection
6.2.1 Evaluation Criteria
The main evaluation criteria used for purchasing a car
are price, design and performance. For Kia, price is the foremost important
factor because it is targeted at the budget buyers. Others criteria may
includes features, country-of-origins and the technology.
6.2.2 Decision rules
The table below illustrated the five decision rules
that the consumers may utilize for comparisons.
|
Decision rule
|
Definition
|
|
Conjunctive
|
Brands that
meet a minimum level on each evaluative criterion
|
|
Disjunctive
|
Brands that
meet a satisfactory level on any relevant evaluative criteria
|
|
Elimination by
aspects
|
Rank brands on
evaluative criteria in terms of importance and establish satisfactory levels
for each. Start with the most important attribute and eliminate all brands
that do not meet the satisfactory level. Continue through the attributes in
order of importance until only one brand is left.
|
|
Lexicographic
|
Rank brands on
evaluative criteria importance and select the one that is highest on most
important criteria
|
|
Compensatory
|
Select brand
that has the highest score over all the relevant evaluative criteria
|
(Quester et al.
2007, pp. 139)
For
purchasing car, consumers may be looking into certain aspects such as
affordability. Therefore, rank brands on evaluation importance will be
possibility used. In this case, the two decision rules that can be applied are
lexicographic and elimination by aspects.
6.3 Store choice and purchase
In purchasing a car, the brand should be first
considered before the selection of outlet. The consumers have in mind the brand
that he/she wants to purchase. Thus, the authorized dealer for Kia is Cycle and
Carriage and therefore consumers will purchase from them.
6.4. Post-purchase process
After purchasing Kia Cerato, the consumers will make
an evaluation on the choice he/she had made. It is common for consumers to
experience doubt and anxiety, after committing into a difficult, relatively
permanent decision and giving up others attractive options. This type of reaction
is known as dissonance. Therefore not all the consumers will be satisfied with
their purchases.
Even so, marketers can reduce dissonance by increasing
the desirability of the brand purchased which can be done by providing
excellent after-sales services to match consumers’ expectation. Marketers also
can decrease the desirability of the rejected alternatives by engaging in
comparative advertising and positions Forte’s strength against other potential
competitors’ weakness. In addition, marketers can design advertisement catered
for recent purchasers, supply positive information through the internet such as
showing high satisfaction level in post-purchase survey.
6.5. Disposal
There are two main ways to dispose a car- (i) to
resell it at a lower value; or scrap it; (ii)receive some money from the
scrap-value and paper value consisting of the Certificate of Entitlement (COE)
and Preferential Additional Registration Fee (Parf) (OneMotoring.com.sg 2009).
Through the newspaper and the internet, it is relatively convenient to dispose
the product. Therefore it does not pose a problem to the consumers. However,
consumers may take into consideration the lower resale value of Korean cars as
compared to Japanese cars when making a decision.
When the car is scrapped, it does not pose problem
affecting the environment as the scrap material will be used for recycles
purpose. For example, some will end up in scrap yards where some people will
find the parts for their ride.
6.6 Brand Loyalty
In term of loyalty, Kia Cerato Forte’s potential
target segments are very different. For generation X, they had been conditioned
to expect affordable quality and expect value in order to stay loyal. In
contrast, generation Y tend to be not as brand-loyal as generation X and they
are constantly on a look-out for novel and innovative product.
Brand loyalty purchases are encouraged as Kia car
owners might decide to turn to Kia again for future purchases or even spread a
good word to their peers by word of mouth, if they are happy with their current
car or when encouraged to do so. Utilising relationship marketing as an
approach, Kia can build loyalty with its customers by ongoing, expanding
relationship with company’s current customers. Besides, providing excellent
customer support services, Kia can also design customer loyalty programs such
as allowing owners of Kia cars to trade in cars at a higher value when they buy
another car from Kia so that consumers will consider staying on with the brand.
7. Marketing strategy
7.1 Marketing Mix
7.1.1 Product
The inclusion of a trip computer, six-CD changer,
tilting and telescoping steering wheel, automatic climate control, parking
assist and electronic stability control appeals to how the Cerato
Forte position itself, since features like these are
usually found in cars priced $10,000 to $20,000 more. (Car Singapore 2009) Thus
it provides innovation at an affordable price.
The degree of innovation is considered continuous
for the Forte as it offers minor innovation for the mid size sedan class of
cars. The characteristic that will most impede innovation for Forte are type of
decision and perceived risk. As car buying usually does not just involve the
individual but also the family members and their decisions are also being influence
by peers. Furthermore cars manufactured in Korea such as the Forte are being
perceived by Singaporeans consumers to have higher risk of failing. Thus, more
quality endorsements are needed such as Kia showing the Car Maker of the Year
in United Kingdom award in advertisements to assure the Forte buyers.
Toyota Corolla Altis also offers similar features
with an addition of a racing body kit but with the interior colour limited only
to beige (Toyota 2009) while the Forte offers three choices of colours namely
grey, black and brown. The characteristic that will most impede innovation for
Altis is relative advantage because it is priced at a higher value as compared
to some of its competitors that offers similar features.
7.1.2 Price
The important criterion for the Kia Cerato Forte is
its price, as the primary target segment has limited financial capabilities.
Also since Kia cars are being manufactured in Korea which is perceived by
Singaporean consumers that they are of a lower quality to Japanese manufactured
cars, consumers are less willing to buy it at a higher price. Another surrogate
indicator for the Forte is that when consumers attribute the price of the car
to its resale value in the second hand market.
As for Toyota
Corolla Altis, price is also an important factor. However consumers getting the
Altis are willing to fork out more since they are known for their well
established reputation of having both reliability and quality. This is due to
the surrogate indicator which attributed a price premium to the reliability and
quality of the car.
7.1.3 Promotion
Value for money as it is packed with features that are
available in the higher priced cars, class leading engine performance, stylish
and continental looking are the values that are important to the Kia Cerato
Forte that can be used in the communication strategy. Toyota Corolla Altis on
the other hand, emphasizes on the sporty looked coupled with quality assurance
and reliability that comes with Toyota reputation trusted and proven. These are
the values important to the Altis that can be used in the communication
strategy.
The media use for advertising for both the Forte and
Altis are newspaper article, national television, car magazine reviews such as
torque, their individual official website and also car websites such as
sgcarmart.com.
The communication strategy of trying to change buyers’
perception of the previous generation Kia cars being ugly and cheap looking
into a new stylish and continental designed car. This is especially successful
when they launched the Forte with the “Guess What Car” campaign where they
masked the Kia logo and placed the car for viewing pleasure at numerous places
such as The Heeren, Vivocity and Chevron House (GuessWhatCar.sg 2009). They
then revealed the car to be the Kia Cerato Forte which surprising of the
general public allowing them to reposition their image.
The communication strategy of trying to change buyers’
perception of the image of Toyota Corolla Altis appealing only to the older
crowd to a sportier image by fitting the car with a new racing kit and
associating it with the Formula One event proved to be effective. In addition,
they also advertised it through the various media and road shows. This is
further substantiated by their claim of Altis being Singapore’s top selling car
in its class.
7.1.4 Place
Both Kia Cerato Forte and Toyota Corolla Altis sell
through agent, in this instance Forte’s is Cycle and Carriage and Altis’s is
Borneo Motors. They are located at Ubi which is in the east side of Singapore
and Leng Kee in the west, where most car dealer brands are situated. The type
of lifestyle is consistent with the distribution system requirements as the car
showrooms are clustered together at the above locations. Thus, it is convenient
for car buyers of any lifestyle to take a test drive of their different choices
and make a decision.
8. Evaluations and Recommendations
8.1 Evaluations of Advertising Campaign
Kia makes use of isolation by using a striking blue car and
an almost all black background to draw attention to the car. The colours used
on the Forte were mostly grayscale, monochrome and de-saturated. Only the Forte
itself was in a striking blue colour. This immediately draws the attention of
readers to the car. Because of the lack of colour and abundance of details on
the other parts of the advertisements, it will take readers a little bit longer
to decipher the rest of the details. However, upon a closer look the
advertisement shows more information and detail of the interior, specifications
and features of the car. The advertisement also features a free Forte body kit
with purchase. The cool colours use exhibits a sense of the Forte’s elegance
and power. The list price is also clearly shown below the car as price is a
major factor while advertising the Forte
Toyota chose a bright, warm and intense scheme which
immediately sets the tone and mood for the advertisement. The advertisement was
half a page and is of a significant size that would definitely attract readers
and make up for not being placed on the front page. Toyota associated them with
the upcoming F1 event by placing F1 drivers aside their cars. The strong bold
colours give off a vivid imagery of substantial power and speed. Toyota also
attempts to further entice readers to head down to their showroom by giving
free F1 tickets. They use a simple and straightforward message conveying the
major current promotions to entice readers to the showrooms to view the racing
editions of Corolla Altis.
8.2 Future Recommendations
By increasing promotions, Forte would garner a better position in the
market and convert more individuals to be a forte user. This would enhance its
product positioning in consumer’s minds and create awareness. Consumers, who
want a vehicle which is value for money, would take the Forte into
consideration.
Kia
should position itself to offer stylish and features packed cars that are
affordable and value for money offering quality comparable to Japanese cars.
8.2.1 On Product Enhancements
Extend its current product line
and come out with other designs. For example Kia could come out with a 2 door Forte
coupe or a Forte with a moon roof to further attract younger customers that
might be attracted to these sporty features.
Kia could allow their customers
to design, personalize and customize their car.
An option to make the car look different from other cars will appeal to
customers who want to stand out from the crowd. It will further reiterate the
stylishness of the Forte.
Kia could tie up with dominating
car accessories leaders and give customers an option of a trade up of stock
accessories.
This will allow customers to trade up stock accessories for branded
accessories at a lower retail price. For
example, instead of purchasing yokohama tyres from dealers at $800. Customers
can do so through Kia for $600.
8.2.2 Improved Marketing Communications
Instead to name Cerato Forte, use
Forte instead to get rid of previous Cerato image.
This will help Kia to build a new and ultimately more stylish and
desirable image for the Forte.
i)
Advertising on public transport areas to reach potential customer
groups.
By advertising at bus stops and in taxis, Kia would be able to reach out
to people who presently do not own a car but have the intention to get one.
This would be even more effective when the effect of the advertisement dwells
on them when they are going through the agony of taking public transport.
ii)
Advertising in Car websites, magazines and reviews.
A car is a high value purchase thus reduces the level of impulse
purchase. Interested customers would always look for available information
before making a decision on whether to get a car.
iii)
Sponsor the president star charity with Fortes. All stars will be chauffeured
in the Kia Forte.
The president star charity is a large scale charity event that is held
in extremely high regard. By sponsoring such an event, Kia will be able to
create more awareness for their brand. They will also build their image in the
aspect of corporate socially responsible.
8.2.3 Improved Purchase Experience
A way to improve the purchase experience is to
provide customers with information using other forms of mass communications.
This will allow customers to make fewer trips to the showroom and save them
time.
8.2.4 Enhancing Customer Satisfaction
Kia could improve on their after
sales service.
For example, they can work on a shorter waiting time for customer, a
lounge to keep customers entertained whilst waiting. The lounge could include
computers, free wifi, snacks and refreshments.
8.2.5 Identifying Potential New Customers
A viable potential customer group
is the corporate clients.
Often when companies buy cars for their staff, they look for a brand
image and fuel efficiency. The Forte satisfies these two points and thus would
make a great company car.
9. Conclusion
Kia has effectively managed to market the
Forte to their target market thus far. However, it is essential that Kia
recognizes that the Forte is still far from realizing its potential to the
fullest and can still be further marketed to the targeted market segments to
enjoy a growth in sales as well as market share. Kia should also identify other
possible market groups by implementing some of the many marketing strategies
recommended. Sustaining their current achievement and continuing to progress further
will definitely facilitate Kia in altering the consumer behaviour towards the
Forte in the most positive light.
Reference List
Borneo
Motor, 2009, Borneo Motor Singapore,
Borneo Motor, viewed 1 September 2009, < http://www.borneomotors.com.sg/en/index.html>.
Car Singapore 2009, Kia launches
the new Cerato Forte for the Singaporean market!, Car Singapore,
viewed 20 September 2009, <http://www.icars.sg/2009/1800/kia-launches-the-new-cerato-forte-for-the-singaporean-market/>.
Forte Owners
Group Singapore 2009, Forte Owners Group
Singapore Forum, Cerato Forte, viewed 20 September
2009,
<http://www.ceratoforte.sg/>
Guesswhatcar.com 2009, Presenting
the all new Kia Cerato Forte, Guesswhatcar.com,
viewed 19 September 2009, < http://guesswhatcar.sg/believe/#the_car>.
Lee, J. 2009, Loud and proud:
the Kia Cerato Forte arrives : Kia’s brand new version of its small sedan
promises greatness, Carbuyer, viewed 20 September 2009, <http://www.carbuyer.com.sg/2009/01/30/kias-new-cerato-forte-spearheads-brand-rejuvenation/>.
Levitt, T. 1965,
Exploit the product life cycle, Harvard Business Review, vol. 43 no. 6,
pp. 81–94.
Land Transport and Authority 2009, New Registration of Cars by Make: Monthly
Vehicle Statistics, viewed 20 September 2009, <http://www.lta.gov.sg/corp_info/doc/M03-Car%20Regn%20by%20make.pdf>
Land Transport and Authority 2009, Motor
vehicle population by types of vehicles: Monthly
Vehicle Statistics, viewed 20 September 2009, < http://www.lta.gov.sg/corp_info/doc/M06-Vehs%20by%20Type.pdf>
One
motoring 2009, Parf/COE rebates, Land
Transport and Authority, viewed 20 September 2009, <http://www.onemotoring.com.sg/publish/onemotoring/en/lta_information_guidelines/de_register_a_vehicle/PARF_COE_Rebates.html>
Solomon, MR. 2007, Consumer
Behavior: Buying, Having and Being, 7th edn, Pearson Prentice
Hal, New Jersey
SingaporeCarsForum.com 2009, Singapore Cars Forum,
Anderson Internet Advertising Pte Ltd, viewed 20 September
2009,
<http://www.singaporecarsforum.com/>
Quester, P,
Neal, C, Pettigrew, S, Grimmer, M, Davis, T & Hawkins, DL. 2007, Consumer Behaviour: Implications for
marketing Strategy, 5th edn, McGraw-Hill Irwin, Australia
Wilbursuen.com 2009, Corolla is top car in Singapore, The Business Times, viewed 20
September 2009 <http://wilbursuen.com/2009/03/21/corolla-altis-is-top-car-in-singapore/>
No comments:
Post a Comment