Socio-Economic Determinants Influencing Consumer Choice for Motor Vehicles in Kenya: a Case of Toyota Kenya

SOCIO-ECONOMIC DETERMINANTS INFLUENCING CONSUMER CHOICE FOR MOTOR VEHICLES IN KENYA: A CASE OF TOYOTA KENYA

OSORO JARED NYAEMA

A RESEARCH PROJECT SUBMITTED TO THE SCHOOL OF MANAGEMENT AND LEADERSHIP IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF THE MASTERS DEGREE OF BUSINESS ADMINSTRATION OF THE MANAGEMENT UNIVERSITY OF AFRICA

OCTOBER, 2019

DECLARATION

This project is my original work and has not been presented for a degree or other awards in any other university.

Signature______Date______Osoro Jared Nyaema

MBA/12/00095/1/2018

This project has been submitted for examination with my approval as University Supervisor

Signature______Date______Brown Kitur The Management University of Africa

DEDICATION

This research project is dedicated to my children who have been a great source of motivation and inspiration and to my entire family for the mentorship.

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ACKNOWLEDGMENT

I would like to pass my sincere gratitude to all those who in one way or another, ensured the successful completion of this project. I would like to recognize the efforts of the lecturers at The Management University of Africa, who struggled towards my understanding of the course. I would like to thank most sincerely my supervisor Brown Kitur for positive guidance and direction towards the completion of this project. I would like to thank the management of Toyota Kenya for allowing me to take up a research in the organization.

ABSTRACT

The overall study objective was to explore the socio-economic determinants influencing consumer choices in motor vehicles industry with regard to Toyota Kenya. The study was guided by the following specific objectives; to determine how pricing affects consumer choice on motor vehicle at Toyota Kenya; to establish how branding affects consumer choice on motor vehicle at Toyota Kenya; to determine the effects of awareness on consumer choice on motor vehicle at Toyota Kenya and to determine how country of origin affects the choice on motor vehicle at Toyota Kenya. The researcher used descriptive survey research design in collecting the data from respondents. The target populations were consumers from Toyota Kenya. The researcher applied the procedure of stratified random sampling for selecting a sample which represented the whole population. The size of the sample of this research was 70 respondents which represented 10% of the population size. The researcher applied both primary and secondary sources in collecting data. The study carried a pretest for purposes of increasing the instrument reliability and validity. Data analysis involved qualitative and quantitative analysis. Data presentation was in form of Bar graphs, Pie-charts and Tables. Qualitative data was provided in form of explanatory notes. The study established that pricing influenced the choice of Toyota model the respondent were using. The study established that branding influence customer choice of the model. The study established that awareness influence customer’s choice of the model choice. The study revealed that the country of origin affects the choice on motor vehicle at Toyota models to great extent. The study concludes that pricing, branding, awareness Creation and product country of origin all had a significant effect on consumer choice of motor vehicles. The study recommends that Motor vehicle companies in Kenya must adopt better pricing strategies that will help them in persuade customers to buy their vehicle model. To increase their market, share and increase customer loyalty the study recommends that motor vehicle companies to come up with brands that will strongly influence the consumer choice of their brand. Toyota Kenya must have constant promotional activities that will help them in creating awareness to customers of their various product.

TABLE OF CONTENTS DECLARATION...... ii DEDICATION...... iii ACKNOWLEDGMENT ...... iv ABSTRACT ...... v LIST OF TABLES ...... ix LIST OF FIGURES ...... x LIST OF ABBREVIATIONS ...... xi OPERATIONAL DEFINITION OF TERMS ...... xii CHAPTER ONE ...... 1 INTRODUCTION...... 1 1.0 Introduction ...... 1 1.1 Background to the Study ...... 1 1.2 Statement of the Problem ...... 6 1.3 Objectives ...... 7 1.4 Specific Objectives ...... 7 1.5 Research Questions ...... 8 1.6 Significance of the Study ...... 8 1.7 Scope of the Study...... 9 1.8 Chapter Summary ...... 9 CHAPTER TWO ...... 10 LITERATURE REVIEW ...... 10 2.0 Introduction ...... 10 2.1 Theoretical Literature Review ...... 10 2.2 Empirical Literature Review ...... 13 2.3 Summary and Gaps to be filled by the Study ...... 33 2.4 Conceptual Framework ...... 35 2.5 Operationalization of Variables ...... 36 2.6 Chapter Summary ...... 36

CHAPTER THREE ...... 38 RESEARCH DESIGN AND METHODOLOGY ...... 38 3.0 Introduction ...... 38 3.1 Research Design ...... 38 3.2 Target Population ...... 38 3.3 Sample and Sampling Technique ...... 39 3.4 Research Instruments ...... 39 3.5 Pilot Study ...... 40 3.6 Data Collection Procedure ...... 41 3.7 Data Analysis and Presentation ...... 41 3.8 Ethical Considerations...... 42 3.9 Chapter Summary ...... 43 CHAPTER FOUR ...... 44 DATA ANALYSIS AND INTERPRETATION ...... 44 4.1 Introduction ...... 44 4.2 General Information ...... 44 4.3 Pricing Strategies and Consumer Choice on Toyota Motor Vehicle Products ...... 45 4.4 Branding Strategies and consumer choice on Toyota motor vehicle products ...... 47 4.5 Influence of Brand Awareness Creation on consumer choice on Toyota ...... 50 4.7 Influence of Country of Origin on Consumer Choice on Toyota Motor Vehicle ...... 52 4.8 Performance of Toyota Kenya ...... 53 4.9 Regression Test ...... 54 4.10 Chapter Summary ...... 56 CHAPTER FIVE ...... 57 SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS ...... 57 5.1 Introduction ...... 57 5.2 Summary of Finding...... 57 5.3 Conclusion ...... 60 5.4 Recommendation ...... 61

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5.5 Suggestion for Further Research ...... 62 REFERENCES ...... 63 APPENDICES ...... 69 APPENDIX I: INTRODUCTION LETTER...... 69 APPENDIX II: QUESTIONNAIRE ...... 70

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LIST OF TABLES Table 2.1 Summary and Gaps ...... 34 Table 2.2 Operationalization of Variables ...... 36 Table 3.3 Target Population ...... 38 Table 3.4 Sample Size ...... 39 Table 4.5: Distribution of Respondents by Age ...... 44 Table 4.6: Effect of Pricing on Consumer’s Choice on Motor Vehicle Products ...... 47 Table 4.7: Effect of Branding on Consumer’s Choice on Motor Vehicle Products ...... 49 Table 4.8: Effect of Product Awareness on Consumer’s Choice on Motor Vehicle Products .... 50 Table 4.9: Effect of brand awareness on Consumer’s Choice on Motor Vehicle Products ...... 51 Table 4.10: Effect of Country of Origin on Consumer’s Choice on Motor Vehicle Products .... 52 Table 4.11: Effect of Country of Origin on Consumer’s Choice on Motor Vehicle Products .... 52 Table 4.12: Performance of Toyota Kenya ...... 53 Table 4.13: Model Summary ...... 54 Table 4.14: Summary of One-Way ANOVA results ...... 55 Table 4.15: Coefficients ...... 55

LIST OF FIGURES Figure 2.1: Conceptual Frame Work ...... 35 Figure 4.2 Respondents Gender ...... 45 Figure 4.3: Effect of Pricing on Consumer’s Choice on Motor Vehicle Products ...... 46 Figure 4.4: Effect of Branding on Consumer’s Choice on Motor Vehicle Products ...... 48

LIST OF ABBREVIATIONS

ANOVA: Analysis of Variance

ASEAN: Association of South East Asian Nations

CEO: Chief Executive Officer

CMC: Cooper Motor Corporation

COA: Country of Assembly

COB: Country of Branding

COM: Country of manufacturing

COO: Country of Origin

COT: Country of Target

GDP: Gross Domestic Product

NGOs: Non-Governmental Organisation

TMC: Toyota Motor Group

TTC: Toyota Tshusho Corporation

UK: United Kingdom

UN: United Nations

USP: Unique Selling Proposition

VMT: Vehicle-Miles Traveled

OPERATIONAL DEFINITION OF TERMS

Awareness creation: Alludes to the capacity of directly knowing, perceiving, feeling or being cognizant on events. Brand: The level of consumers’ familiarization with the image or qualities of a specific brand of services or goods

Consumer: This is anyone who uses products and services from a particular producer or manufacturer.

Liberation: Liberation refers to the process of removing legal regulatory or protectionism from the market in a given economy to allow all market players to operate freely from both local and international market and allow free flow of goods and services in the market.

Market share: Alludes to the per cent of every sale in a market which is held by a single product or brand of a firm.

Price: This is the compensation or payment quantity that one party gives to the other in exchange of a unit of services or goods. Costs of production and demand does influence a price.

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CHAPTER ONE

INTRODUCTION

1.0 Introduction The chapter gives a presentation of the background of the study, the statement of the problem, objectives of the study, significance, scope and summary of the study. The study analysed factors influencing consumer choice for motor vehicles in Kenya a case of Toyota Kenya.

1.1 Background to the Study Understanding consumer choices in buying new vehicles has been of a major interest for automobile manufacturers. Producers marketing and operations decisions are significantly based on the buyer’s preferences and likings. These decisions are also influenced by exogenous factors such as economy condition and government policies (Sullivan, 2015). Purchasing is tied in with getting required products and services from a seller. However, present day customers buy items to reward themselves to satisfy psychological needs or to make themselves feel good. Modern customers buy things to flaunt their identity or to help their self-regard. Purchasing gives individuals, a feeling of achievement. For some, it gives life a sense, a reason, esteem, and capacity. Looking for enthusiastic and mental reasons has turned into the new mantra of current society (Keller, 2014)

According to Choo and Mokhtarian, (2015) automobiles have traditionally been thought of as bundles of attributes desired by consumers, such as fuel economy, durability, style, performance, safety, and brand. Different makes and models are distinguished by the various attributes they offer. Consumers make choices among various makes and models so as to maximize their utility by choosing the make and model considered superior to those of all other available choices. A car’s market share, and thus its competitive success is determined by the number of buyers who consider the cars combination of attributes to be superior to other cars. Yet, consumers themselves are also heterogeneous and automobile purchase decisions are driven by consumer attributes such as age, sex, household size and household income (Wildt, 2016).

According to Kibera and Waruingi (2015), firms in the UK, Germany, and Japan, where the greater part of the vehicles are delivered, are basically assessing the inside and outer condition with the improvement of focused procedures keeping in mind the end goal to fulfill buyers and in the meantime expand benefits so as to stay in business. There is no industry that has been saved by the opposition and firms have along these lines come up approaches to battle it. To adapt up to rivalry, firms have taken different vital measures including flat mergers, acquisitions, rebuilding, rearrangement, re-designing, improvement of less expensive items and division. Ferrel (2016) noticed that as the earth is changing so are the customers. They are winding up more sophisticated, complicated and learned, dictating what and how to be served.

It has turned out to be basic that industry players need to comprehend their consumers well with the end goal for them to outline effective strategies. For example, in 2014, South Africa was in charge of the make of 84 percent of all vehicles delivered in Africa, 7 million of which are on the South African streets. Additionally, in 2014, the industry made a 6.7 percent commitment to the GDP of South Africa and 29 percent of all South African producers made up the nation's car industry (Kibera & Waruingi, 2015). In Africa, firms are progressively utilizing promotional campaigns to make mindfulness as well as for showcase development by increasing more consumers from competitors and enrolling nonusers of the items. The expansion in the quantity of players in the market combined with the diminished purchasing power of the buyer has prompted competitive pricing by firms. Business associations have needed to plan successful appropriation frameworks to guarantee that the items achieve the consumers at the perfect place and time. Since purchaser behavior is affected by numerous factors, it has turned out to be troublesome for business administrators to anticipate with assurance what the buyers will purchase and in what amounts at a given timeframe (McCarthy, 2011). In any case, the motor business has kept on impelling development in the individual nations.

The Kenyan motor industry is one such industry that is critical in the national advancement activity. In the mid-nineties, the motor business in Kenya had more than thirty key players under the umbrella body, Kenya Motor Industry Association. The business was by then not changed and the establishment holders had set number of model varieties, which implied that clients did not have much decision (Kibera & Waruingi, 2015). The situation has since changed an extraordinary arrangement because of progression, which prompted an uncommon convergence 2

of reconditioned vehicles. The quantity of players has likewise expanded and consumers have progressively turned out to be observing yet with a diminishing discretionary cash flow.

A large portion of the automotive companies that operate in Kenya are franchise holders and the substances of the changing condition requests that establishment holders ought to work productively and successfully with a specific end goal to survive. The requests of freedom and expanded rivalry have implied that establishments should endeavor to set up vital measures that would give them an edge over their rivals. In light of this relentless rivalry, the industry players have advanced new showcasing and promoting programs that have guaranteed the proceeded with accomplishment of significant players like D.T Dobie, Isuzu East Africa, Simba Colt Motors Limited and different merchants (Kibera & Waruingi, 2015).

1.1.1 Pricing Pricing is considered to be one among the four P's of the marketing mix (Brassington, 2016). It is therefore the manual or automatic process of applying prices to purchase and sales orders, on the basis of factors such as a fixed amount, quantity break, promotion or sales campaign, specific vendor quote, price prevailing on entry, shipment or invoice date, combination of multiple orders or lines, and many others. Automated systems therefore need to have more setup and maintenance but this is likely to prevent pricing errors. The pricing technique used by most retailers is cost-plus pricing. This involves adding a mark-up amount to the retailer’s cost. This simply involves charging the amount suggested by the manufacturer and usually printed on the product by the manufacturer (Jones, 2017).

1.1.2 Branding Brand is a name in every consumer's mind (Mooiji, 2017) and it is characterized by a noticeable name or symbol which can differentiate the goods and services from the rivals' (Aaker, 2015). In addition to a specific brand name, a brand is also composed of products, packaging, promotion, advertising, as well as its overall presentation. From the consumers' perspective, brand is a guarantor of reliability and qualifying consumer products (Roman, 2015). Added to this, consumers would like to buy and use brand-name products with a view to highlight their personality in different situational contexts (Fennis & Pruyn, 2016).

Similar to brand awareness, perceived quality is determined by a number of factors. To be more specific, perceived quality can further be classified into product quality and service quality. Regarding product quality, there are seven dimensions which affect the consumers’ perception, namely performance, features, conformance with specifications, reliability, durability, and serviceability as well as fit and finish. Service quality, on the other hand, is judged by its corresponding tangibles, reliability, competence, responsiveness and empathy (Aaker, 2015). As mentioned by Srikatanyoo & Gnoth (2012), consumers are inclined to develop stereotypical beliefs about the products from particular countries. Hence, consumers could have their preferences for products made from one country over another (Patricia, 2017).

1.1.3 Awareness Creation Awareness is the element in an organization's marketing mix that serves to inform, persuade, and remind the market of the organization and-or its products (Patricia, 2017). It is an attempt to influence the recipient's feelings, beliefs, or behavior. One of the attributes of a free society is the right to use communication as a tool of influence. Intense competition among different industries and firms puts tremendous pressure on the promotional programs of sellers. In an economy of abundance, a product designed to satisfy a basic physiological need requires strong persuasive promotion since consumers have many brands to choose from (Keller, 2014).

1.1.4 Country of Origin Country of origin (COO) is an international term that indicates where a product is manufactured, produced, processed or grown (Alba, 2014). Think of it as where a product is born. Research shows that consumers' broad general perceptions of a country, including of its national characteristics, economic and political background, history, traditions, and representative products, combine to create an overall image or stereotype that is then attached to the products of that country. For example, a survey carried out by Taylor (2016), reported that Country of origin image has a significant influence on consumer perceptions and behaviours, and in situations in which additional information is unavailable or difficult to get can be the sole determinant of whether or not someone buys a product.

1.1.1 Motor Vehicle Industry in Kenya The Kenya’s sector of motor vehicles is quite competitive, encompassing recognized dealers that encounter strong competition from the imported vehicles which are second-hand, majorly from United Arab Emirates and Japan. Seemingly Kenya happens to be a profitable market in the field of automobiles and in accordance with the forecasts on growth of automobiles, the present condition looks ready for improving more (Bonyo, 2017). Therefore, companies that sell motors keep tracking the changes in the preferences of consumers or their choices in order for them to capable of acquiring a reasonable market share. The different choices or preferences of the consumer mostly are used in determining the strategies of marketing since the significance of formulation of such strategies is relating a company to its wide-ranging environment (Engel, 2013)

To cope with the market challenges, many automobiles dealers have undertaken various strategic measures. Marketers are now trying to maintain minimum quality standards, reduce overheads and keep the end price low. As consumers are bombarded with a wider range of choices depending on their tastes and preferences companies ride on a unique selling proposition to stay ahead of the competitors (Berry, 2010). To be competitive in the market motor vehicles company brands must have features such as quality, vehicle pricing, safety social influence, country of origin and vehicle performance that appeal to customers more than its competitors and must be salient to consumers and can flow from the product itself or from other factors such as technology, production cost, consumer franchise and distribution among others; while taking into consideration consumer income and brand loyalty (Bonyo, 2017).

1.1.2 Toyota Kenya When Toyota Kenya begun, it was called Toyota East Africa, It’s characteristics and the background of models by models Toyota Kenya started operating in the year 1999. The company is a subsidiary of Japan’s Toyota Tsusho corporation, wholly acquired. The firm provides after sales support services for Vehicles for models of motor vehicles from Toyota and brands of Yamaha nationwide. On April year 2011 the designation changed to being the present Toyota Kenya for reflecting its operations which only are in Kenya (Toyota Kenya, 2012). The Head Offices are situated in Nairobi; having branches in Lokichogio, Mombasa, Kirinyaga road, Westlands and Eldoret. It as well has a local representation in Kericho, Kisumu, Nyeri and 5

Nakuru. Ownership of Toyota Kenya is 100 per cent by the Toyota Tshusho Corporation [TTC] the trading arm of Toyota Motor Group [TMG]. Toyota is the foremost distributor of motor vehicles in the country, and this has been the case for over the last 9 years.

Products of Toyota undergo marketing on a segmentation technique where by every market has distinct strategies on effective handling of the needs of customers. Focus segments comprise of NGOs, diplomatic community, individuals, government bodies, corporate and missionaries. Portfolio of Toyota model comprise of these types; V8, Land Cruisers, Fielder, Allion, Probox, Axio, Hilux, Avanza, Premio, Corollas, and Camry amongst others (Toyota Kenya, 2018). Toyota brand is linked with indispensable qualities for instance trust, integrity, quality, customer satisfaction, consistency, honesty and reliability. The promotion of the brand is done by websites, product launches, national media, magazines, outdoor street signage, magazines, direct marketing through sponsorships, campaigns, sales team, direct mailing, golf tournaments, clients event support, joint promotions with other brands and public relations. Rivals include Simba Colt Motors, General Motors, C.M.C, Grey imports and D.T. Dobie.

1.2 Statement of the Problem In Kenya, as in many developing countries, the lack of proper market information makes it difficult for potential investors to make decisions about what products to offer. This therefore requires that marketers conduct studies to analyze consumer choices and needs before launching their products. This can be quite expansive especially in a fast-changing technological environment.

Data from Kenya Motor Industry (2018) show that the sale of new motor vehicles dropped by 39 percent in 2017. The hemorrhage in the market place is due to the country's underperforming economy that is keeping potential customers mainly government and corporate Kenya away from showrooms. Most individuals have opted for the second hand versions, lured by lower pricing despite the high maintenance costs they expose the Kenyan economy to, and foreign exchange loss as a result of importation of spare parts which are not locally available and have high failure rate compared to the new vehicles. 84 percent of the Kenyan motor industry is controlled by second hand vehicles.

Toyota Kenya imports brand new cars and it serves as the outlet of its mother company in Kenya. Through this car import system consumers acquire quality car, make fantastic saving and avoid nuisance and stress associated with importation of second hand cars. This forms a fundamental ground for our research since we are dealing with individuals using brand new Toyota East Africa model. Given the wide varieties to choose from consumers have become very selective and demand value for their money. The various motor vehicle brands available in Toyota Kenya mean that consumers have a wide variety of brands to choose from which are retailing at similar prices.

Research and studies investigating consumer choice for motor vehicles have been done in America, Europe, India, China and even South Africa. Locally, Ndungu (2014) conducted a survey of the vertical integration strategies used in the automotive industry in Kenya while and Kipchirchir (2016) carried a research on exchange risk management practices; a survey of motor vehicle industry in Kenya. Waboi (2014) directed a study on the viability of worldwide web- based business technique among chose enlisted motor vehicle merchants in Nairobi. However, to the best of the researchers’ knowledge, no research has been done to establish the socio- economic determinants influencing consumer choice for motor vehicles in Kenya. It is for that reason that this study sought to identify other socio-economic determinants influencing consumer choices in motor vehicles industry with regard to Toyota Kenya.

1.3 Objectives The overall study objective was to explore the socio-economic determinants influencing consumer choice in motor vehicle industry with regard to Toyota Kenya.

1.4 Specific Objectives This study was guided by the following specific objectives;

i. To determine how pricing affect consumer’s choice on motor vehicle at Toyota Kenya. ii. To establish how branding affect consumer choice on motor vehicle at Toyota Kenya. iii. To determine the effects of awareness creation on consumer choice on motor vehicle at Toyota Kenya.

iv. To determine how the country of origin affect the choice on motor vehicle at Toyota Kenya.

1.5 Research Questions The study sought information to address and answer the following research questions:

i. How does pricing affect consumer’s choice on motor vehicle at Toyota Kenya? ii. How does branding affects consumer choice on motor vehicle at Toyota Kenya? iii. To what extent does awareness creation influence consumer choice on motor vehicle at Toyota Kenya? iv. What is the effect of the country of origin on the consumer choice on motor vehicle at Toyota Kenya?

1.6 Significance of the Study The findings of this study are expected to be significant to the various groups as shown below:

1.6.1 Practice The study outcomes are going to assist manufactures in coming up with brands of vehicles that satisfy the market requirements of customers and thus raising their share of the market. Also, it will assist in developing brands that are suitable to the wants of every customer and thus using resources in an optimal way on designing their target needs.

The study will likewise be huge to the representatives of Toyota Kenya for they will realize what it requires to cooperate with their clients and additionally knowing how to treat them with the point of helping them manufacture trust with the organization and furthermore advance their purchasing practices. The discoveries of this study will likewise be noteworthy to different organizations that may jump at the chance to improve their client purchasing practices which would see their organizations develop all things considered.

1.6.3 Policy The government can apply the study outcomes to attract investors who may be interested in this target market to produce particular brands specifically for the target market and any other market they may seem profitable. This will in turn generate revenue to the government in terms of taxes from the investors. 8

1.6.4 Theory The study will provide the background information to research organizations and scholars who will want to carry out further research in this area. The study will facilitate individual Researchers to identify gaps in the current research and carry out research in those areas.

1.7 Scope of the Study The research was conducted to establish the socio-economic determinants influencing consumer choices in motor vehicles industry with regard to Toyota Kenya. It included a target market of people ranging from ages 19 to 60 years who have disposable income to spend on motor vehicles. It targeted both walk in clients and existing clients. The study was conducted in two months as targeted.

1.8 Chapter Summary The chapter has specified the main purpose of the study, which is to explore the socio-economic determinants influencing consumer choices in motor vehicles industry with regard to Toyota Kenya. Specific objects of the study included establishing how price, awareness, country of origin and branding influence consumer choice in motor vehicle industry. Chapter two covered the literature review on the subject under the study. Chapter three covered research methodology. Chapter Four covered data analysis while Chapter Five covered summary conclusion and recommendations.

CHAPTER TWO

LITERATURE REVIEW

2.0 Introduction In this chapter, the researcher discussed the socio-economic determinants influencing consumer choices in motor vehicles industry with regard to Toyota Kenya. The writer used both empirical and conceptual literature to explore consumer choices in motor vehicles industry. The literature review was guided by the following specific objectives; to determine how pricing affects consumer’s choice on motor vehicle at Toyota Kenya; to establish how branding affects consumer choice on motor vehicle at Toyota Kenya; to determine the effects of awareness creation on consumer choice on motor vehicle at Toyota Kenya and to determine how country of origin affects the choice on motor vehicle at Toyota Kenya.

2.1 Theoretical Literature Review This research was grounded on the theories that follow asymmetric information theory, buyer/ consumer motivation theory, and instinct theory of motivation.

2.1.1 Asymmetric Information Theory This concept was originally presented by Akerlofs (1970) paper The Market for “Lemons”: Quality Uncertainty and the Market Mechanism. In this paper, Akerlof developed asymmetric information having a case of market of automobiles. His elementary argument was that in a big number of markets, a buyer makes use of statistics for measuring value of goods. Therefore, the purchaser views average information of the entire market whereas the seller holds deeper information concerning a particular item.

Akerlof (1970) contends that the asymmetry of information gives the advantage to the seller for selling goods that are of less quality as compared to the average quality in the market. The average quality of products in the market are going to decrease same as the size of the market. Those differences on private and returns may be alleviated through various institutions. Akerlof (1970) starts by undertaking an automobiles market model in which there includes four types of cars; old and new cars that the two can either be bad or be good, the bad ones are called lemons 10

in this case. In the course of purchasing a car, it is highly probable that the car is good (q) and probably the car is a lemon (1-q). This tends to be certain for the old and the new cars. Asymmetric information between market participants arises when they do not share the same amount of information. The case of particular interest in finance is a transaction in which one party has better information than the other.

On the relevance of this theory, it expounds that in the market, the person that possesses more information on a particular item to be transacted is in a position to negotiate optimal terms for the transaction than the other party. The party that knows less about the same specific item to be transacted is therefore in a position of making either right or wrong decision concerning the transaction.

2.1.2 Buyer / Consumer Motivation Theory This theory was created by Engel and Kollat in the late 1960s.The theory dwells on Motivation which refers to the force initiating, guiding and maintaining behaviours that are goal oriented. This makes one to take an action, probably grabbing a snack for purposes of reducing hunger or enrolling at the University for Purposes of getting a degree. This theory looks at 5 stages namely; problem recognition, information search, alternative evaluation, choice and outcome. In the first step of the buying cycle, the consumer identifies a problem which needs to be solved, or a need which needs to be satisfied. At this level, the consumer is looking to resolve a state of discomfort. The discomfort could arise from many things for example the inability to get work done in time or from a frustrating technology or processes (Batra, 2015). A consumer may recognize his need upon realizing that differences exist between his current state and the state which he desires (Neal & Quester, 2016).

The second step in the decision-making process involves gathering all the information about the existing possible solutions. The larger the purchase decision the more time the consumer will take in gathering required information. A consumer will want to be thorough in their search and will look out for information regarding availability, unique product features, pricing, ease of use, etc (Shiffman, 2014). The third step within the buying process is the evaluation of alternatives. At this stage, many consumers have a check list of the criteria that the solution must meet. In this phase consumers decide what’s a deal-maker, and what’s a deal-breaker. Here, the consumer will

put into consideration aspects such as brand, price, quality, etc. In the fourth step, the consumer makes a choice regarding the product/service they would like to buy. There are several factors which will affect the purchasing decision such as the availability of the desired item and the influence of the shop attendant (Wiedmann, 2017). If a consumer has previously bought and used a product and they were satisfied with the experience they got, then in future they are likely to repeat the purchase meaning they will skip the other steps in the process and start right at this stage (Solomon, 2010). The last step in the buying decision is the post purchase behaviour. In this phase, the buyer’s feelings and product evaluation after the sale are significant for the marketer because they can influence repeat purchases and develop brand loyalty or stop the use of the product for ever. Many companies regard satisfied and happy customers as their best form of advertising.

This theory is relevant to this study because it provides a clear depiction of the process of consumer decision making and is easy to comprehend and intuitively pleasing. However, the model has been criticized to be too mechanistic and too restrictive to accommodate all the variety of consumer decision making situations. The theory has also been criticized for failure to further develop the role of individual motives for purchase is only alluded to within need recognition, appearing to somewhat neglect a rich theoretical and important area of consideration.

2.1.3 Instinct Theory of Motivation This theory was proposed by William James (1890) and William McDougall (1923) which made lists of instincts that were seem as mainsprings of all kinds of behaviors, simple and complex. Later, Murray (1937) made another classification of human needs. Murray, however, distinguished a directional aspect and an arousal component that actually kicks the behaviour off and that can be motivated in a number of ways. Needs, in Murray's concepts, are hypothetical constructs directing behaviour toward certain goals, or end state Based on this theory, individuals are inclined to act in a particular way since they are programmed evolutionarily to do that. A relevant case for this theory is the world of animals during the temporal periodic migration. Animals in this case happen not to study on how to do that, but are born with that behavior.

James (2012) came up with a list entailing instincts of humans which involved, attachment, love, fear, shame, shyness anger, play and modesty. The unfortunate thing concerning the theory is the fact that it gave a description of behaviour but failed to explain it. In the 1920s, this theory was pushed to favour other theories of motivation, though contemporary evolutionary psychologists are still doing research on the impacts of heredity and genetics in the behaviour of humans. The behaviour of consumers is influenced by numerous uncontrollable aspects.

From this perspective, it appears that motivation is mediated by external events or environmental cues rather than internal drives. Although external factors are the main impetus for motivating an individual, the instinct theory nonetheless supports the indirect role of intrinsic motivation in pushing the individual toward the attainment of the incentive goal. James, one of the proponents of this theory, stressed the significant role of emotions and of the affective state of the individual in influencing how internal and external stimuli acquire incentive value. The attractiveness of a goal object or a stimulus, however, varies in accordance with changes in the motivational state associated with it. 2.1.4 Stimulus Response Model (Black Box theory) The black box theory maintains that marketing promotion and other stimuli enter into a consumer black box and produce different purchase/choice responses (Kotler, 2009). The role of the marketer is to identify what is in the consumers “black box” and how their marketing stimuli are changed into responses (Yakup & Jablonsk, 2012). The four P’s are the elements of marketing stimuli and include promotion, place, price, and product. Other stimuli consist of major events and forces in the consumers’ environment, such as, political, cultural, technological and economic (Kotler, 2009). These factors enter into the consumers’ brain and are converted into a group of observable responses (Jain & Jain, 2013). These responses include brand product and dealer choice (Kotler & Armstrong, 2012). The main focus of firms is to comprehend the factors influencing this conversion inside the consumers’ black box to give the desired responses (Sandhusen, 2000).

2.2 Empirical Literature Review The evaluation process of a car is complex. The consumer wants to make a well- reasoned purchase decision and will consider several car attributes when making his decision. In general, the consumer will assign different levels of importance to attributes. By use of a quantitative 13

survey of 581 people who recently bought a car, OIVO (2014) found out that the three most important attributes consumers take into account when evaluating car alternatives are the purchase price, the operating cost and the quality of the car. Based on these attributes, consumers will select certain alternatives. Once these alternatives are selected, consumers will base their actual choice by the evaluation of other car attributes.

Purchase decision involves a sequence of choices formed by a consumer before making a purchase which starts once he/she has a willingness to fulfil a need. The consumer should reach a decision with regard to the place of purchasing, the desired brand, model, purchase quantity, time to buy, amount of money to be spent and the method of payment. These decisions can be influenced by marketers by providing information about their products or services that may inform consumer’s assessment process. Schiffman and Kanuk (2017) stated that consumers normally search for information relevant about a specified consumption-related need from their past experiences before looking for external sources of information. In other words, past purchase experience is regarded as an internal source of information that a consumer relies on before making a decision. In addition, several consumers’ decisions are most likely to be formed by integrating past purchase experience as well as marketing programs and non-commercial information sources (Schiffman & Kanuk, 2017).

Customer perceived value is an amount of potential customers that the company having and it is outcome of what customers paying and in return what they are receiving (Sweeney & Soutar, 2016). Customer perceived value is a bundle of different dimensions such as operational value, conditional value, psychological value, communal value and cognitive value (Gross, 2011). In which operational value creates an intention to purchase, psychological value stimulates interests on a particular product (Woodruff, 2017). Thus, customer perceived value evaluates that what customer is paying and what he is getting in return (Bolton & lemon, 2015). It is an important component for benefits received by the customers and thus it replicates customer’s satisfaction over the product. Further, the amount of customer’s satisfaction will increase only when they are reaping more benefits from products. Accordingly, it influences dynamically other persons purchase decision also (Yang & Jolly 2017). Hence, manufactures should concentrate on how to increase the value to their products and thus customers may have perceived more value from the

product. Consequently, customers will engage in positive word of mouth marketing with prospective consumers. Blackwell (2015) reported that to comprehend consumers’ purchasing decisions, marketing managers should understand their consumption process and the benefits of organizational products and services in their perceptions. The authors also added that when consumers intend to buy certain products, they pass through numerous phases which would influence their purchase decision process and post-purchase behaviour. The first phase represents the problem recognition wherein consumers intend to satisfy their needs and wants. The role of marketers in this phase emerges while using advertisements, personal selling and packaging to arouse the recognition of desired needs or wants. In the second phase, consumers begin to seek information from either internal sources about the products or outside sources, for example, friends, family, relatives, neighbours, annual reports, publications, sales persons, social media or packaging label. Finally, consumers evaluate the alternatives and select from brands that best suit them and satisfy their needs.

According to Potoglou and Kanaroglou (2016), the attributes of the car can be categorized into the monetary attributes, the non-monetary attributes, the socio-economical attributes and the environmental attributes. Out of the monetary attributes, the purchase price is the first factor consumers take into account when purchasing a car (Cao & Mokhtarian, 2013). Borgsteede and van Tatenhove (2014) state that consumers define in advance a certain price category to which the car of their choice has to belong. More specific, the consumer defines in advance a maximum price the purchase of a car cannot exceed. This maximum price determines which types of vehicles the consumer will choose from. The purchase price will only be irrelevant for those consumers who have a large income (Borgsteede & van Tatenhove, 2014).

A second important criterion when choosing a car is the operating cost (Cao & Mokhtarian, 2013). The operating cost consists of the maintenance cost and the cost of fuel consumption. According to OIVO (2014), fuel consumption is a very important car attribute as they found that during the car purchase decision, the assessment of fuel consumption is based on the comparison of fuel consumption between vehicles of the same type, rather than on a specific analysis of the

cost per kilometre. Importantly, the fuel consumption will only be taken into consideration because of the fuel costs, and not because of environmental issues (Clase, 2014).

Out of the non-monetary attributes, the quality of the car is the third important car attribute (OIVO, 2014). Consumers want their car to be safe, moreover the car has to react how the consumer wants. However, the actual choice for a certain car is also induced by other intrinsic characteristics of the car, mentioned here after (Cao & Mokhtarian, 2013; OIVO, 2014; Borgsteede & van Tatenhove, 2014). Looks play an important role in the purchase of a car. Acceleration time, horsepower and the sound of engine are elements that are important for two reasons. First of all, certain consumers want their car to accelerate fast because they like to drive sportive. Secondly, these elements are important in terms of safety. Comfort, number of seats and luggage space play also a role in the car purchase process.

A last important non-monetary attribute is brand loyalty (May, 2013; Newman & Werbel, 2015; Dowling & Uncles, 2017). According to these authors, consumers are likely to buy a car of the same brand as their previously owned car, based on their experiences with that brand. Socio economic attributes play an important role too as a car has for many people an important image- function and carries a certain status. Consumers are inclined to choose products that communicate their role and status in society (Kotler, 2006). As consumers buy products that reflect their personality, lifestyle and the social class to which they belong, personal, social and cultural factors will have an important influence on the decision-making process.

Moreover, Choo and Mokhtarian (2012) state that travel attitude, and demographic characteristics such as age and gender play an important role too in the vehicle type choice. According to the travel attitude, workaholics or people who do not enjoy personal vehicle travel for short distance are more likely to choose large cars; people who tend to be organizers are more likely to choose mid-sized cars; people who tend to be status seeking and who travel a lot by airplane are more likely to drive luxury cars; sports cars are more frequently bought by younger, status seeking people who are not workaholics and calm people are more likely to drive minivans. Out of the demographic characteristics, the consumer s age is found negatively associated with driving small or sports cars and Service Utility Vehicles (SUV). 16

What gender is concerned, Choo and Mokhtarian (2012) found out that females are less likely to drive pickups than other vehicle types. Males, on the other hand, are more likely to buy bigger cars (Miller, 2013). Finally, car purchase is also influenced by household characteristics. Kurani (2016) state that households are the fundamental unit for decisions on vehicle purchase. This is confirmed by Kotler (2006), who says that the family of procreation has the most direct impact on the buying behavior. As a consequence, the importance of car attributes such as number of seats, luggage space, and size will depend on the need of the household (Kurani, Turrentine & Sperling, 2016).

According to Beggs and Cardell (2015), the choice of the vehicle s size depends on household size, income level and the type of vehicle which the smallest car complements in the household fleet. The larger the household s income, the more likely the household will buy luxury cars and SUV s. When the household already has a large car, it will be more likely that the second car in the household fleet will be a smaller one. Kurani and Turrentine (2015) state that households that own two or more cars can be potential buyers of environmentally friendly cars for the second or third car in the household fleet. These households are referred to in the literature as hybrid households (Kurani & Turrentine, 2015).

2.2.1 Pricing and Consumer Choice The price of luxury products is usually very much higher (Kapferer & Bastien, 2017). They are not comparative but superlative. The high price makes the product less accessible suggesting the status of a rare product. There is an interesting phenomenon with the price of luxury products. If the price of the product is decreased, it is construed as non-luxury thus decreasing the demand for the product and an increase in price leads to higher demand for the product. Studies have shown when the prices of luxury products are high it is perceived high quality product. Thus, marketers will fix a high price suggesting that the product has high quality and a high status value and this leads to making certain products more desirable. At the same side the increased price leads to less accessibility of the product to many consumers and eventually inaccessible to everyone (Groth & McDaniel, 2018).

Pricing typically belongs to the 4 P's of the marketing mix (Brassington, 2017). Jones, (2017) posits that pricing refers to the automatic or manual process of using prices in purchasing and making sale orders based on aspects such as combination of multiple lines or orders, fixed amount, specific vendor quote, quantity break, price prevailing on entry, invoice or shipping date, promotion or sales campaign amongst other. Therefore, automated systems should consider more maintenance and setup though this has a probability of preventing errors from pricing. This method applied by many retailers is the cost-plus pricing method. This includes placing a mark- up above the cost put by the retailers. This basically includes charging the suggested amount by a manufacturer and mostly is printed on the manufacturer’s product (Jones, 2017).

Milton (2017) carried a study a study on motor vehicle choice consumer behaviour in Australia and Vietnam. The study was a descriptive survey whereby correlation analysis was carried. Data used was both primary and secondary. The study revealed that the luxury car market is was growing at a steady speed of 25% per annum in Australia with more and more numbers of luxury cars entering Vietnams car market. Luxury cars were preferred by the high net worth individuals. These individuals wanted to differentiate themselves from crowd for various reasons. These includes affordability to design, quality and pleasure. This study only concentrated on the purchase of the luxurious cars disregarding customers with a low purchasing power. One essential economic factor that influences consumer buyer behavior is income. This mainly because the amount of goods bought by a consumer as well as the type bought differs depending on the wage which a consumer earns. In the event that a buyer has greater income, chances are very high that such a consumer will go for more luxury goods like high-end cars. Taylor (2015) is of the opinion that a reduction in income shifts purchasing behavior from buying normal goods to inferior goods. This simply means that as consumers buy fewer specialty items, such as shoes and clothing, and buy more store-brand items. Mogridge (2016) posits that the main essential concept when it comes to consumer buyer behavior is that the average person of a given income level is likely to spend a given quantity of money on the purchase of cars. He therefore goes ahead to argue that there is a function which gives, for every income level, as well as an average expenditure on a car purchase. More recent studies that have been conducted in this area have shown that there is a positive relationship between income levels and vehicle purchase decisions by individuals (Feng, Wang & Zeng, 2015). For example, a study conducted by Nagai, Fukuda,

Okada, and Hashino (2016) revealed that two- and four-wheeled vehicle ownership in Thailand depends largely on the income levels of individuals.

Khaniwale (2015) study on consumer buying behavior established that an individuals’ occupation had a bearing on their buying decision. People selected items which were aligned to their occupation and were needed in their profession. Khan, Rana, and Masmali (2015) conducted a study on the influence of occupation in choosing the type of retail outlets in Saudi Arabian retailers. The study found that store characteristics and occupation played a substantial role in selecting a retail store. Padmaja and Mohan (2015) study on the causes of consumer online buying behavior Bengaluru City, India concluded that that demographic factors like age, income and occupation had an effect on online buying behaviour. Rouzbahani, Rezai, Goudarzi, and Naghibi (2013) examined the effect of individual factors on consumers' purchasing decisions. The personal factor dimensions investigated in the study were age and life cycle stage, occupation, economic situation, lifestyle, and personality.

In another similar study Diaz-Olvera, Plat & Pochet (2008) and Blumenberg & Pierce (2012) established that income or lack of it influences how a household purchases their mode of transportation as well as the way in which individuals choose to travel. They therefore are of the opinion that indeed low-income households are less likely to own cars (Rahman, 2011) and more likely to travel by other modes of transportation other than motor vehicle. This therefore means that the income level of an individual has a positive relation with buying decision. It also means that individuals who have high income are likely to buy expensive products. Mathios (2012) on his part argues that family income level influences one’s decision on the choice of a motor vehicle to purchase. This indeed is a reflection of a high efficiency in collecting information on motor vehicles. Such individuals are likely to possess the financial support to purchase such vehicles and this therefore influences them to buy more expensive cars whose price is higher.

Gould and Lin (2014) on his study established the level of income for an individual relates positively with health knowledge, especially when it comes to choosing and potentially using motor vehicles (Cotugna et al., 2012). Some studies have shown that indeed income level plays a role in predicting consumer awareness related to a person’s attitude contraction. This is mainly because there is a positive relationship between income growth and quality of car. This is

therefore a fundamental issue when it comes to consumers purchasing decision. The level of income of an individual influences the willingness to pay marginally higher prices as a social responsibility towards the motor vehicle. In other empirical studies carried out in jurisdictions with low income per capita do not show any improvement in the willingness to spend more on vehicles (Bloom & Sevilla, 2014). Therefore, the income level moderates the relations between consumers behavior towards purchase decisions of motor vehicles.

Gronmo (2008) has opined that individuals who are not able to fulfill their primary needs, especially regarding self-esteem or self-actualization, are likely to compensate these desires through alternative means . This means therefore that low-income households, or those facing racial or ethnic discrimination, are more or less likely spend heavily on socially visible products so as to make up for their lack of status in society. In the event that traditional indicators of social status, such as wealth or occupational prestige, are not accessible, people will without doubt resort to the consumption of status products that are easily seen as symbols of a higher class (Fontes & Fan, 2006).

McManus (2016) conducted a study to examine the link between fuel prices and sales of cars and trucks in the U.S. The study adopted a longitudinal research design and was carried for a period of 10 years. The study revealed that economic theory predicts a direct link between fuel prices and SUV sales, and more broadly between fuel prices and vehicle sales. The study therefore concluded that for an individual to make a rational choice at the time of purchase, the shopper requires a prediction of what future fuel prices are likely to be. The study further concluded that indeed a significant portion of changes in vehicle prices is likely to be explained by changes in fuel prices. In effect, rising fuel prices lower the prices of automobiles. This specifically, includes the negative impact of rising fuel prices on vehicle prices is greater for less fuel- efficient vehicles than for more fuel-efficient vehicles. This study was carried in a more developed economy more than Kenya. Its findings would therefore not give a clear picture on what is happening in the developing economies.

Raj (2016) carried a study in India on the effects of gasoline and Diesel prices on the choice of motor vehicle used. The study was descriptive in nature and data was collected from 400 motor vehicle users using a structured questionnaire. The findings show that due to price difference in

Gasoline and Diesel, about one third of the car owners were having diesel vehicles. The research results showed that about one seventh of car for the city drive for family usage, while using the second car for office and business usage. Also, it was observed that in the information gathering and consumer purchase initiation stage, TV commercials on car models and brands, search on internet website of the manufacturer and visit to dealers and distributors were the prime sources where customers gathers information on car models. This study only concentrated on the prices of fuel and failed to show the effects of the actual price of the car or the spare parts on consumer choice.

In Mumcu, Alper & Turkey (2018) conducted an estimation concerning the new automobiles demand by use of a quarter year’s data on the product’s characteristics, quantity, price, quality and country of origin from the year 2011 to the year 2015. This study used panel data for a period of 5 years. The study consequently recognized that the new automobiles’ demand tends to be price inelastic in the short run. This study was also carried in a developed economy and only secondary data was used. The current study will use both primary and secondary data.

Likewise, Vrkljan & Zhan (2016) in South-Western Ontario conducted a research on past perceptions concerning vehicle safety and the influence they have on their purchasing their vehicle. The outcomes showed, safety happened to be outdated by other considerations of purchase most precisely, price. It was therefore stressed and identified that price was a major factor influencing decisions concerning purchasing a vehicle. Fuel efficiency, the participants counted as a cost in the sum of the vehicle’s cost, was as well named as a key consideration during the process of making a decision to purchase a vehicle.

East (2014) argues that in traditional economics prices are simply treated as a cost. This is because the recognition that a price merely serves to inform the consumer about the good is more of recent origin. Price, one of the non-product attribute of brand associations where it can be an important association in the formation of brand perceptions, particularly with regard to value and desirability and is a criterion by which consumer often segment their knowledge of a market or category (Batey, 2014). High quality products, as well as fancy packaging, exclusive store locations, high retail margins, expensive promotions, advertising campaigns, notwithstanding brand names are all seen to be the contribution to the higher prices of luxury goods. Companies

therefore go ahead to make large investments into these components in order to make their products instantly recognizable and familiar. The luxury products are also likely to lose their rarity and exclusivity characteristics if they are not priced high.

According to Aaker (2015) the motor industry consumers relate perceived quality of the product and price. This majorly is the issue without the presence of any available information for judging the quality of the product, a quite suitable case for this matter with features of environmental products generally as well as intangible goods. Additionally, the essence of price in judging the quality of a product raises where the consumers have a perception of higher uncertainties, a broad range of differences in quality amongst good or where there is a high risk of making a wrongful decision as a result, firms that offer goods risk to lose their real clients pioneers segment through reduction of prices which probably do not give a door for significant consumption or trigger doubtful thoughts concerning the product’s quality. A certain problem which arises from the perceptions on quality of products comes with the products. Just like it has been contended, the increased prices of oil may be thought of having robust influence on the value of that product by the customer. Nevertheless, it cannot be argued that the considerable price premium is a reflection of substantial superiority of the quality of the product (Raman & Haines, 2015).

Mehta (2015) analyzed factors affecting consumer purchasing decisions in Kenya’s motor vehicle industry. Descriptive research design was employed in the study. The target population included all 2,913 customers of Toyota Kenya in Nairobi. Simple random sampling techniques was employed while data collection was conducted with the help of a questionnaire. The study revealed that there was a positive significant relationship between economic factors and purchasing decision. Implying that the consumer purchasing decision is influenced by economic factors such as level of income, price, quality of car, maintenance costs, resale value of the car, payment options, ease of finding a mechanic to repair the specific car brand, interest rates as well as fuel prices. This study only concentrated on the economic factors. It failed to show the impacts of other important determinants of consumer’s choice such as awareness creation, branding and the country of origin.

2.2.2 Branding and Consumer Choice Branding is a marketing term that refers to a company's efforts to build and maintain an image or an identity (Jean-Noel, 2008,). Product marketing occurs when a company delivers marketing messages and campaigns to promote a particular product. In general, branding is broader and has a long-term emphasis, while marketing for a given product often has a shorter-term purpose. A brand is the meaning behind the name, logo or other symbol used to signify a company and its products. Companies typically try to associate certain positive traits or attributes with it when using marketing to build a brand. Brands are regarded as imagery in the minds of consumers and the target groups (Esch, 2010) and are linked to the characteristics of the core luxury products which are high level of price, quality, aesthetics, rarity, extraordinariness, and high degree of nonfunctional associations. These brands are created by the companies for identifying and differentiating their products from those of other companies. Luxury brands have often been associated with the core competences of creativity, exclusivity, craftsmanship, precision, high quality, innovation and premium pricing. These product attributes give the consumers the satisfaction of not only owning expensive items but the extra-added psychological benefits like esteem, prestige and a sense of a high status that reminds them and others that they belong to an exclusive group of only a select few, who can afford these pricey items (Philip Kotler ,2009).

Brand loyalty indicates the preference of a customer towards purchasing a specific brand; clients think that, that brand does provide enjoyable images, enjoyable features, quality standards, images and at the correct pricing (Milton, 2017). This customers’ faith and belief becomes the foundation for fresh buying behaviours. At first, clients are going to buy a particular brand for purposes of trying it, when they become contented, they will continuously buy that product form the specific brand. Brand loyalty mirrors an inspiring technique to a brand that results to regular buying of that brand for a reasonable time. Brand Loyalty mirrors a ratio for satisfied and regular purchasers who really like that product. This happens to be quite important in product marketing to customers who are there already as a result of good brand loyalty it s going to be less costly, no much effort needed, as compared to attracting new clients (Berkman, 2017).

William (2016) studied the factors influencing customers brand preference of the economy segment SUV’s and MUV’s in United Kingdom. Data collection was made through direct

interaction and customer intercept survey using questionnaire. Descriptive analysis was used to transform data into understand format and factor analysis was used for identification of factors influencing customer preference. In light of study findings, the preference of a given brand can be explained in terms of six factors namely Product reliability, monetary factor, trendy appeal, frequency of non-price promotions offered, trustworthiness and customer feeling or association towards brand. There is need for marketers to take these factors into consideration when crafting product innovations in the SUV segment of Automobile market. The study purely targeted high- class vehicles which cannot be easily afforded by middle class in the developing economies.

Manish (2017) analyzed consumer behaviour for A3 segment vehicles such as Honda City and SX4 in a particular region Jaipur. Data collected from 100 respondents 50 each from Honda City and Maruti SX4. Respondents were considered from various backgrounds like Gender, Occupation, and Income class. Also, customer purchase parameters considered for study are Price, Safety, Comfort, Power & Pickup, Mileage, Max Speed, Styling, After Sales Service, Brand Name and Spare Parts Cost. Based on above parameters and analysis made in this it revealed that, while purchasing A3 segment car Customer give much importance to Safety, Brand Name and seating and driving comfort. Also, word of mouth publicity and advertisements in car magazines are more effective communication medium for promotion of Cars. The study was only concentrated on the Indian markets but failed to show the consumer behaviour of other market segments outside the Indian Market.

Many of the researchers have suggested that the youth segments are lavish spenders when it comes to branded and luxury products (Taylor & Cosenza, 2015). O’Cass and Frost (212) have also proved that these younger consumers are driven by the need to possess and display status brands. The youngster’s main motivation is to gain the acceptance and respect from people surrounding them. According to Chaudhuri (2016) the Indian class behaviour and economic resource distribution are different from those existing in Western societies and so is the consumption culture. However, recent socio-economic transitions have significantly changed Indian consumption habits. India has always had a very hierarchy- and status-conscious society which began with the caste system and has now evolved into more of a class-based system (Venkatesh & Swamy, 2014). Thus, there has always been a search for signs and markers of

status and class, and successful Indians would always like to display their affluence through ostentatious exhibition of the goods they own (Singh, 2015).

Patricia (2017) carried a study in an attempt to answer some of the questions regarding brand personality of selected cars in Saudi Arabia by conducting the market research. The study was carried on 235 middle class car users and data was collected using a structured questionnaire. The study shows that brand perception is something which starts building up before a car is purchased and goes on with its use and is reflected in the recommendations. The customer makes to his acquaintances for the same car. Also, it is seen that the customer might not be using the car still he holds the perceptions about it. Brand personality of a car is enforced by the sellers in the mindsets of the customers and customers reacts to it by forming their perception about the car and this reflects in the overall brand image of the car. So, brand image and brand personality complement each other and the brand perception aids the building of brand images. As per the study findings, dealers play a very important role in building up the brand perceptions of the cars.

According to Solomon (2014) consumers can engage in brand switching for many reasons. It can be a lack of interest in a current product or simply the interest to try a new brand. When consumers want to try new things, they get involved in variety seeking. This happens especially when there is less stimulation in the environment or people are in a good mood. Another reason for brand switching can be better price, better quality, better selection or better features. If consumers switch the brand due to a lower price and the product does not deliver its promise, it will not keep consumer long. Nonetheless, people tend to buy same brand every time they go to store. As mentioned earlier, consumers can buy a specific brand out of habit, because the decision can be made with little or no effort. In these situations, another product can be bought also easily, for example if the original product is out of stock. Consumers just need the right incentive to change the brand without consideration. On the other hand, the consumer can also be brand loyal and buy the same brand every time when the experience with the same brand has been positive and the consumer has made a conscious decision to buy that brand. Over time this purchase decision that has been based on brand loyalty, will chance to habitual buying (Perreau 2014).

Winer (2015) posits that where loyal clients saw that there was no attachment to an attribute of a brand, then she or he shifted to choosing other brands which offered a greater deal. The purpose of purchasing a similar product from a brand that is familiar is time saving and cuts down the perception of the risk. The customer’s brand loyalty is mostly the center of brand equity. In case clients are uninterested to that brand and, truly purchase respecting the characteristics, price as well as persuade having less concern towards the name of the brand it is possible to have less equity. Conversely, if they keep on purchasing that brand after facing competitors that have better features; convenience and price; reasonable value is present in that brand and probably the slogan and symbol of the brand (Keller, 2016).

As consumers are bombarded with cheaper substitute products to choose from, they become aware of their tastes and preferences. To win the consumers, businesses have to ride on a unique selling proposition (USP) to stay a head of the competitors (Kotlern & Armstrong, 2005). Any brand, which succeeds overtime, has something about it, which is better than its competitors. The advantages must be salient to consumers or to the trade, and can flow from the product itself or from other factors such as technology, production cost, consumer franchise and distribution among others. Companies have further employed sales representatives countrywide who sell and market on daily basis (Rangan, 2015).

Musyoki (2015) investigated the factors that influence customer buying behavior of the automotive products at the General Motors East Africa Limited. This study used descriptive cross-sectional survey research design. The population for this study consisted of 180 customers who own GM products from General Motors (GM) Kenya limited. Vehicle owners of the brands listed were randomly selected to participate in the study. The questionnaires were used in this study mainly for the purpose of collecting primary and secondary data. The study concluded that the perception of the culture of certain automotive brands makes customers repurchase more and more and Customers always belief in what their friends prefer. Product image influence the attitude and commitment of a customer in repurchasing the automotive of choice to a great extent. Product image of automotive is dependent on shape, size, color and dimensions. The level of income influences consumer buying behavior and repurchasing power of the customer on the automotive of choice. This study only used descriptive statistics in data analysis. The current study will use both descriptive and inferential statistics in data analysis. 26

2.2.3 Awareness Creation and Consumer Choice As indicated by Cuizon (2015) deals advancement strategy utilized by the vender isn't just compelling in prevailing with regards to accomplishing here and now deals but at the same time are more financially savvy than a notice. Nema (2016) order deals advancements as Consumer Sales advancement and Trade Sales advancement. According to their examination, buyer deals advancements demonstrate any transient advancement techniques predetermined by retailers to support client prompt reaction to the items.

According to reports contained in the Munguti (2018), Bentley and Porsche were enduring decreases in yearly deals. The report showed that in the year 2017 Porsche mark saw its business decrease, offering fewer than 50 units in the year, as opposed to the earlier year where their deals were over 50 units. With an end goal to build their deals, the two extravagance organizations left on a notice crusade that included deliberately mounting announcements along Westlands and Parklands regions in Nairobi. The organization was in doing as such, utilizing area-based showcasing to target particular clients with an end goal to grow item mindfulness, create intrigue and in the end get deals. Mortimer (2016) states that a critical piece of advertising is to make the item tangible in the mind of the consumer keeping in mind the end goal to decrease apparent hazard and give a reasonable thought of what the item involves. Moreover, she thinks of it as essential to promote reliably, with the reasonable brand picture keeping in mind the end goal to accomplish separation and support informal correspondence.

Berkowitz (2014) proposed that, in the purchase decision process, at the recognition and the information search stage, the sales promotional tool that is most effective is the free samples because it helps gain low risk trials. According to them, consumers will be more likely to take the risk of trying a sample rather than buying the whole product and being disappointed. They further suggested that, at the alternative evaluation and the purchase decision stage, deals, point of purchase displays and rebates are suitable sales promotional tools because they encourage demand and repurchase of the same product by the consumer. They finally proposed that, at the post purchase stage, the best sales promotion tool would be the use of coupons, as they encourage repeat purchase from first time buyers. Mortimer (2015) states that a critical piece of advertising is to make the item tangible in the mind of the consumer keeping in mind the end

goal to decrease apparent hazard and give a reasonable thought of what the item involves. Moreover, she thinks of it as essential to promote reliably, with the reasonable brand picture keeping in mind the end goal to accomplish separation and support informal correspondence.

In the previous studies, it can be observed that price promotion is one of the main strategies frequently used by a number of marketing managers to exploit their sales and performance (Zoellner & Schaefers, 2015). Essentially, promotional sales that can be grasped through several approaches such as customer coupons, displays and price reductions are usually used in diverse retail stores around the world. Price promotions as explained by Mullin and Cummins (2010) can comprise numerous forms such as buy one and then get the other one free, extra packs and money-off coupons. In the early 1990s, several retailers used price promotions to influence consumers who have price sensitivity by presenting to them the discounts on various product items. Generally, retail managers apply promotion strategies as incentives for obtaining a greater number of consumers and uplift their sales revenues (Cui, 2016). Currently, consumers deemed to be price sensitive tend to have high awareness towards the promotional deals and look for them frequently (Yeshin, 2016).

In another similar study Diaz-Olvera, Plat & Pochet (2018) and Blumenberg & Pierce (2012) established that income or lack of it influences how a household purchases their mode of transportation as well as the way in which individuals choose to travel. They therefore are of the opinion that indeed low-income households are less likely to own cars (Rahman, 2011) and more likely to travel by other modes of transportation other than motor vehicle. This therefore means that the income level of an individual has a positive relation with buying decision. It also means that individuals who have high income are likely to buy expensive products. Mathios (2012) on his part argues that family income level influences one’s decision on the choice of a motor vehicle to purchase. This indeed is a reflection of a high efficiency in collecting information on motor vehicles. Such individuals are likely to possess the financial support to purchase such vehicles and this therefore influences them to buy more expensive cars whose price is higher. Gould and Lin (2014) on his study established the level of income for an individual relates positively with health knowledge, especially when it comes to choosing and potentially using motor vehicles (Cotugna, 2012).

Leading the opposition to advertising’s influence on product choice behavior is Ehrenberg (2014). Ehrenberg’s research has predominantly explored brand choice and brand loyalty among established and frequently purchased products. Ehrenberg (2014) postulates that advertisings main role should be to reinforce feelings of satisfaction for brands already purchased as opposed to focusing on acquiring new users. Ehrenberg (2014) reinforces his stance that product awareness resulting from advertising is of limited value to brand choice behavior through four arguments. Firstly, he claims that there are many product classes that have little if any mass media advertising but enjoys strong growth such as sailboards and marijuana. Secondly, small and medium brand leaders. Ehrenberg (2014) third argument is that there is no suggestion that failure occurs less often for highly advertised new brands. Lastly, the main difference a leading and a small brand is that the leader has more buyers. Majority of research support advertising’s influence on Product choice behavior. Deighton (2014) measured changing and recurring buy effects on awareness of a product in properly established and most often bought product groups (liquid detergent, ketchup, powder detergent). They discovered that awareness of the brand facilitated by works of advertisement through attraction of the switchers though did less in modification of repeat probabilities of buying of ones who just bought that brand. This outcome is same as the one by Neslin and Blattberg (2017) who discovered that sales promotion efforts probably would best be dedicated to those who never use the brand.

Baker (2017) limited his evaluation of effects of advertising towards the choice of brand to mere awareness and sentimental conditioning according to strategies of advertising. It was discovered that ordinary exposure strategies of advertising are as simple to execute. The research made a conclusion that ordinary awareness of the product and sentimental conditioning happened not to be successful strategies for influencing the choice of the brand over competitors that are properly established. A conclusion was arrived at that sentimental conditioning that failed to have greater performance features or motivation of deliberating during the period when purchases were low.

This outcome was then extended by Baker (2018) who arrived to a conclusion that advertising as a tool tends to be the most probable factor which influences the choice of brands where it is accessible and relevant. Marginal advertising prompts were discovered as influencing the choice

of brand. Keller (2016) discovered that marginal persuading interfered with the attitudes of consumers and their choices. It as well has been discovered that the influence advertising on the choice of brand can be watered-down by the attitudes of consumers directed to the brand. They made a conclusion that the attitude directed to an advertisement does have an independent impact towards the choice of brand. Keller, (2014) contends that contemplations sets may be influenced through advertising since it was recognized as having a stable impact on contemplating set composition.

Ehrenberg (2014) assumes that the major function of advertisings is supposed to strengthen satisfaction feelings of brands that are bought already as compared to paying attention to getting fresh users. Ehrenberg (2014) strengthens his position that awareness of a product that results from doing advertisements has a restricted value towards behaviour of choosing a brand through opinions. Initially, he argues the presence of several classes of products which got less if not zero mass media advertising though encounters robust growth for instance marijuana and sailboards. Secondly, medium and small brand leaders. Third opinion no suggestion exists on failure occurring less times for brands that are highly advertised.

2.2.4 Country of Origin and Consumer Choice on motor vehicles

Over the past 5 decades, the country in which a product originates has broadly been researched. It generally began with Kileba (2012), he claimed that the country from which a product originates impacts greatly on acceptance and acceptance of products. Most carried out researches prove that there is an effect from the country of origin, though this effect has a difference in its significance and magnitude. According to Ramya (2014) there was found evidence of the country of origin effect for products in general for classes of products, for specific types of products and for specific brands.

Rahman (2018) reviewed country of origin and different variables that influence consumer purchase intention, also highlighted the relationship of variables and customer purchase intention. The study was carried in Taiwan on a sample of 450 respondents. Both primary and secondary data was used in the study. Study demonstrate that people care about which country products come from and where they are made and consider these factors when evaluating the

quality of product. Stereotypes of country and the preferences of customers, influence the purpose intention. Political system, culture and the economy of the country can be a cause of sensitivity to people. There are many factors that have an impact on consumer purchase intention. Research and methodologies have shown that even when consumers can evaluate all the intrinsic product characteristics by expressing the product, the effect of extrinsic cues has more influence on consumer product evaluation. Country of origin is one of the extrinsic cues; in addition, there is no doubt that country of origin has considerable influence on the purchase intention process.

Srinivasan, Jain & Sikand (2014) assessed country of origin into branding country (COB) and manufacturing country (COM). This study was carried in Sweden on a period of 15 years using a longitudinal research design. They found a negative effect on consumers’ quality perception when the manufacturing country was less developed (Mexico & Malaysia) and positive effect when the manufacturing country was developed (USA & Japan). The overall suggestion of Srinivasan, Jain, & Sikand (2014) is that the seller should choose a developed country as COB to compensate the negative effect on quality perception when m41anufacturing in a less-developed country to reduce production costs. This study was only concentrated on developing economies. Similar COA results are shown from a Thai consumer perspective by the research of Chandrasen & Paliwoda (2009). Seidenfuss, Kathawala, & Dinnie (2016) divided COO in COA, COC, COB and COT. Country of Target (COT) is a synonym for ‘home country’ or the country of the respondents. They found empirical evidence to support the hypothesis that there will be no difference in perceived quality perceived image of cars depending on COT (Chandrasen & Paliwoda, 2017). Furthermore, they confirm the COA findings of other studies with similar results from an ASEAN (Association of South East Asian Nations) perspective. Yagci (2015) suggested that if a consumer is aware about a country image of a product, the image will be used to generate a fit between country and product category. A consumer who will not be aware or familiar about a product in contrast will adopt country image to get an understanding of the attributes of a product. Country image in a context works through the so called “halo-effect” (Han, 2016).

Chung Koo Kim, (2015), investigated how country- and brand-related intangible assets impacted the brands market share and effectiveness of their market. One of the research discovered that a 31

brand can generate a positive brand-specific asset that is brand popularity and without positive country name equity. It was discovered also on the other hand that, a country name for example Germany, created positive value of the brands coming from that particular country. Many research results showed that in institutional purchase decisions, country of origin plays a significant role whereas for household buyers, brand name also plays an important role. This can all be explained by the nature of products and purchase experience and because of it reaching a large population, marketers use heavy brand promotion to reach their consumers (Rangan, 2015)

Solomon (2010) is usually termed as being the first investigator to study empirically the effect. He discovered that consumers had a different perception of products that looked identical apart from the country they originated from. (Engel, 2013). Empirically it has been revealed that the origin country of a product does have an effect on the perceptions of consumers concerning the quality of a product, and finally the will to buy or prefer the product. Additionally, several researches have indicated that there is a tendency by consumers of having a comparative preference of products that originate from their country. Alba (2014) some consumers might be having a comparative preference of goods originating from particular nations. The impacts of the country that the product comes from is still under debate, with other researches how relevant is academic research concerning the country the product originates from for the managers of a business. In general, academics appear as concluding that a nation from where a product is related to, has a significant impact on the choice and evaluation of consumers over the products though that provided number of players resent, care is supposed to be provided even if another research is not carried out yet concerning the same effect. (Berry, 2010).

Based on Manish (2017) position, products can be considered as entailing an information array cues extrinsic and intrinsic cues. Intrinsic ones include the product’s physical configuration for instance fit, color, flavor and texture and much more. Intrinsic ones might not be appreciated fully till the buyer actually experiences them, for instance, sound produced by stereo speakers. Extrinsic ones are external though associated with warranties, country or manufacture and origin, brand and price. Buyers apply extrinsic cues being a foundation of evaluating the quality of the product since mostly it is hard discerning the true quality of the product. The country from which the product originates is an extrinsic cue majorly where the purchasers cannot familiarize with foreign goods or in absence (William, 2017). 32

Wasonga (2011) analyzed factors affecting consumer perception of Kenyan manufactured fast- moving goods in East African Community, a case of laundry detergents products. The target population for the study were consumers of Kenyan manufactured fast-moving consumer goods from Kenya, Uganda, Tanzania, Rwanda and Burundi. A convenience sampling was used and sample size for each country was fifty (50) respondents per country giving a total of 250 respondents. Primary data was collected using semi-structured questionnaires. Regarding the country of origin, most of the respondents agreed that they rather buy laundry products made in Kenya because they could always trust in quality, availability and other attributes. This study assessed laundry detergents products country of origin and therefore can’t be relied upon in the context of motor vehicle consumer choice.

2.3 Summary and Gaps to be filled by the Study A number of empirical studies have been carried all across the globe on the motor vehicle industry giving much focus on global markets majorly from the western nations. Table 2.1 gives a summary of gaps filled by this study

Table 2.1 Summary and Gaps

Variable Researchers Title of the study Findings Research gap and year Pricing McManus The link between fuel A significant portion of changes This study was carried in a (2016) prices and sales of in vehicle prices is likely to be more developed economy cars and trucks in the explained by changes in fuel more than Kenya. Its U.S prices findings would therefore not give a clear picture on what is happening in the developing economies. Mehta (2015) Factors affecting Consumer purchasing decision is This study only consumer purchasing influenced by economic factors concentrated on the decisions in Kenya’s such as level of income, price, economic factors. It failed motor vehicle industry quality of car, maintenance costs. to show the impacts of other important determinants of consumers choice such as awareness creation. Branding William Factors influencing Preference of a given brand can The study purely targeted (2016) customers brand be explained in terms of six high-class vehicles which preference of the factors namely Product reliability, cannot be easily afforded economy segment monetary factor, trendy appeal, by middle class in the SUV’s and MUV’s in frequency of non-price developing economies. United Kingdom promotions offered, trustworthiness and customer feeling or association towards brand Musyoki Factors that influence The study concluded that the This study only used (2015) customer buying perception of the culture of certain descriptive statistics in behaviour of the automotive brands makes data analysis. The current automotive products at customers repurchase more. study will use both the General Motors descriptive and inferential East Africa Limited statistics in data analysis. Awareness Deighton Changing and Sales promotion efforts probably Failed to give a preview on Creation (2014) recurring buy effects would best be dedicated to those who the performance of firms in on awareness of a never use the brand. the developing countries. product

Baker (2017) Effects of advertising Ordinary awareness of the product The awareness is not towards the choice of and sentimental conditioning confined to any promotion or brand happened not to be successful advertisement channel strategies for influencing the choice of the brand Country Rahman Country of origin and Stereotypes of country and the The case study adopted was of Origin (2018) consumer purchase preferences of customers, influence not adequate. intention the purpose intention Wasonga Factors affecting Most of the respondents agreed that This study assessed laundry (2011) consumer perception they rather buy laundry products detergents products country of Kenyan made in Kenya because they could of origin and therefore can’t manufactured fast- always trust in quality, availability be relied upon in the context moving goods and other attributes of motor vehicle consumer choice. Source: Author (2019)

2.4 Conceptual Framework

This is a conceptualization in functional form on how much the independent variables influence the dependent variable which is motor vehicle consumer choice as shown in figure 2.1.

Independent variables Dependent variable

Pricing

Awareness

Motor Vehicle Consumer choice

Branding

Country of Origin

Figure 2.1: Conceptual Frame Work

2.5 Operationalization of Variables

Table 2.2 Operationalization of Variables

OBJECTIVE VARIABLE INDICATOR SCALE Source -Affordability To determine how Pricing -Shipping cost Nominal McManus pricing affects -Spare parts costs (2016) consumer’s choice on Mehta motor vehicle at (2015) Toyota Kenya. -Individuals To establish how Branding Perceptions Nominal William branding affects (2016) consumer choice on -Beliefs Musyoki motor vehicle at (2015) Toyota Kenya. -Culture To determine the -Promotion effects of awareness Awareness Nominal Deighton on consumer choice -Advertisement (2014) on motor vehicle at Baker -Personal Selling Toyota Kenya. (2017) To determine how -Quality Association country of origin Country of Nominal Rahman affects the choice on origin -Production History (2018) motor vehicle at Wasonga Toyota Kenya. (2011) The choice on motor -Customer vehicle at Toyota Choice on satisfaction Nominal Sullivan, Kenya. motor vehicle 2016) -Vehicle Continual Choo and improvement Mokhtarian, (2015)

2.6 Chapter Summary

Literature review focused on maximizing accuracy in defining the need for critically and thoroughly selecting the most relevant activities done in the past. The research has done a selection of activities done in the past which are falling in the research objectives; which clearly 36

gave an account of every theoretical activity done in the past which attempted analysing determinants of socio-economy that influence the choices of a consumer in motor vehicles. This is meant to provide a conceptual and theoretical foundation from where a research methodology is going to be generated, analytical framework selected, appropriate data gathered, subsequent analyses conducted to determinants that influence the choices of consumers in motor vehicles.

CHAPTER THREE

RESEARCH DESIGN AND METHODOLOGY

3.0 Introduction The chapter was divided into several parts that include; introduction, research design, target population, sample and sampling technique, research instrument, pilot study, data collection procedures, data analysis and presentation, ethical consideration and lastly and finally the summary of the chapter.

3.1 Research Design The research used a descriptive survey research design. With regard to Kothari (2003), descriptive survey research alludes to enquiries on finding facts and adds that its purpose is describing affairs as they are at the moment. Orodho (2013) posits that descriptive survey research design happens to be appropriate since it is applied in obtaining information which defines the prevailing phenomena through asking persons concerning what perceptions they have, values, behaviors or values. The design was employed it gave room to the researcher for collecting data through the population sampled through the use of unchanged instruments within the same period of time. This design also gave the researcher a room for obtaining information relating to determinants that influence the choices of consumers in the industry of motor vehicles at Toyota Kenya.

3.2 Target Population This is a collective set that includes all the members in the research; objects or events, hypothetical or real group of individuals from where the investigator intends to make a generalization of outcomes (Frederic, 2010).

Table 3.3 Target Population

Consumers Target Population Percentage Corporate 100 14 Individuals 600 86 Total 700 100 Source: Toyota Kenya, (2019) 38

The target population for this study was both individual and corporate clients at Toyota Kenya. The total number of clients were 700 as indicated on the above table. The population of target was selected because the researcher works in the region and it was easy to get the required permission to make the study. This population represents customers who visited the Toyota Kenya car showroom within duration of one month.

3.3 Sample and Sampling Technique A sample frame alludes to a few sum of cases gotten from the entire population (Gatumu & Ingule, 2011). It is key to do sampling since it is good in saving time as well as expenses which could perhaps be consumed if one decided a study of the whole population in general (Robson, 2012).

Table 3.4 Sample Size

Consumers Target Population Sample Population Percentage Corporate 100 10 14% Individuals 600 60 86% Total 700 70 100% Source: Author (2019)

Based on the above population with 700 respondents, from the whole population, the research selected a 10 percent. Therefore, the research had a total of 70 respondents. Cooper and Schindler (2003) posits that a sample that is representative is the one that has a 10% and above of the overall population and therefore choosing the 10 percent was termed representative. In addition, Mugenda and Mugenda (2012) positions that a size of a sample that ranges from 10-30 percent of the overall population is sufficient for any kind of academic study, stratified random sampling approach was applied because the targeted population tends not to be homogeneous and this can be classified into strata or groups for purposes of getting a sample that is representative. In every category of the consumers, the targeted respondents in the research are were pick in a random manner till the anticipated figure was achieved.

3.4 Research Instruments Collection of data involves any kind of procedures of a measurement which includes asking respondents a number of questions. Schindler (2011) advocates for using a questionnaire for

descriptive research since self-administered characteristically happen to be less costly as compared to personal interviews as well, it is easy to access the population. For this research, a questionnaire was used. This questionnaire had 3 sections, (a) background information b) opinions based on the three variables c) the dependent variable questions. The first section of this questionnaire was used to gather demographic information concerning the respondents This comprised of the level of education, age, gender amongst others. The second section involved items concerning the choices of a consumer on the vehicle industry in Toyota Kenya.

3.5 Pilot Study A pilot study was conducted by the researcher for purposes of pretesting and validating the said questionnaire. It encompassed 10 respondents who are customers at the General Motors. Isaac (2005) suggests that 10 respondents and above as the size of the sample is sufficient for the research when conducting the pilot study. A sum of 10 customers from general motors were picked in a random method and then issued with a questionnaire. This pilot study focused on measuring how much reliable is the questionnaire counting the patter, structure and wording of questions. These questionnaires were delivered by hand and administration done at the business premises of the respondents for ensuring objectivity in responses and cut down the rate of having no responses. The findings of pilot study were not factored in actual research.

3.5.1 Validity

Validity alludes the extent by which the items in the sample are representative of the text that this test is supposed to examine. Content validity that was adopted for this research alludes to a determinant of how much the data gathered by the use of a specific instrument represents a particular content or domain of a specific concept. Mugenda and Mugenda (2012) argued that the normal procedure for measuring content validity is using experts or professionals in a specific domain. The expert made comments concerning how suitable or representative are the questions and gave in suggestions on where to correct the questionnaire’s structure. This assisted in improving the data’s content validity after corrections are made.

3.5.2 Reliability Test

Reliability alludes to how consistent is a measure, and this is examined by the use of test and retesting reliability approach. Reliability can be elevated as a result of inclusion of many items that are similar in a measure, through doing a test of a different sample of persons through the use of uniform procedures of testing. The researcher calculated the score of Cronbach alpha for the instrument applied in gathering primary data. Cronbach alpha ranges from 0-1. Scores that are in the range of 0-0.6 imply that their reliability of the instrument is low whereas a 0.7 score and beyond implies that the reliability of the instrument is high as well as its internal consistency (Cooper & Schindler, 2013)

3.6 Data Collection Procedure After getting consent from the University, the researcher made a trip to Toyota Kenya for purposes of obtaining consent for carrying out the research. The researcher did a budget for the needed materials that were applied in collecting data and buys materials ahead of actual data collection. The time and date needed for data collection were planned carefully. The researcher then distributed of questionnaires to respondents in their places of work. A drop and pick approach was applied for giving respondents sufficient time for fully working on those instruments. The researcher also engaged an assistant who assisted in data collection. After completing, the researcher collected the issued questionnaires from the respective participants.

3.7 Data Analysis and Presentation Ahead of responses processing, the questionnaires that had been completed were checked on accuracy and completeness. Coding of the data was done for enabling grouping of responses into different categories. The nature of the collected data was both qualitative and quantitative in nature. Descriptive statistical instruments assisted in data description and determination of the level used. Analysis was carried out qualitatively and quantitatively through the application of descriptive statistics. This comprised of standard deviation, mean and percentages whose presentation was through tables and bar charts for purposes of giving a clear view of the outcomes of the research.

Y= β0+ β1X1+β2X2+ β3X3+ β4X4 + e

Where,

Y: the dependent variable (consumer choice of motor vehicles) expressed as a linear combination of independent variables X1, X2, X3 and X4

β0: The regression constant i.e. Y = β0 when X1, X2, X3, X4..... Xk = 0

β1: Coefficient of pricing (independent variable X1)

β2: Coefficient of branding (independent variable X2)

β3: Coefficient of awareness Creation (independent variable X3)

β4: Coefficient of country of origin (independent variable X4) e: Error term

Linear regression analysis was used to estimate the coefficients of a linear equation and the Independent variables that best predict the value of the dependent variable. From this model, test of significance at 5% significant level was conducted on the various variables of this study using coefficient of determination (R2), correlation coefficient (R), F-test and ANOVA table in order to check the significant of the data analyzed. A correlation analyses was carried to establish the relationship between the dependent and the independent variables.

3.8 Ethical Considerations Ethics refers to norms of behavior which differentiates between behaviors that are acceptable and ones that are unacceptable. Ethics refers to what tends to be good for a person, moral values and the society. The following ethical procedures were paid attention to by the researcher:

3.8.1 Informed Consent The researcher searched informed consent from the participants ahead of carrying out the collection of data. The reading and discussion of the consent forms was done by the research assistants to all the participants in English. This form gave a description of the research purpose and encompassed information concerning voluntary participation as well as withdrawal from the research. 42

3.8.2 Voluntary Participation The researcher then got informed consent from the participants and ensured their participation was voluntary. This was carried out by use of word of mouth together with a letter obtained from the University. The willing respondents were the only ones given the questionnaire for purposes of collecting data.

3.8.3 Confidentiality The researcher made sure that truthfulness and transparency is kept during the review and confidentiality guaranteed for all the gathered information. There was guaranteed of the information gotten from the staff.

3.8.4 Privacy The researcher remained objective throughout the interview; during analysis of data, and interpretation of data for purposes of avoiding self-deception and minimizing the possibility of biasness. Intellectual property was respected and this was assured through providing appropriate credit or acknowledgement for the study contributions and there was no plagiarism involved. In addition, the respondent’s privacy was paid attention to.

3.8.5 Anonymity The researcher gave an indication that collection of data was done through the use of questionnaires and was applied for purposes of research. Honesty was maintained when giving reports on data, procedures, methods and results. During the research, the researcher was sensitive all through to issues on ethics for instance the participant’s privacy and confidentiality.

3.9 Chapter Summary The chapter gave an analysis of the choice of a consumer for a motor vehicle. It was divided into this section; introduction, research design, target population, sample and sampling technique, research instrument, pilot study, data collection procedures, data analysis and presentation, ethical consideration and finally chapter summary

CHAPTER FOUR

DATA ANALYSIS AND INTERPRETATION

4.1 Introduction This chapter presents the research findings to explore the factors influencing consumer choices in motor vehicle industry with regard to Toyota Kenya. The study was conducted on 70 respondents who were served with a questionnaire; out of 70 targeted respondents 62 respondents filled-in and returned the questionnaires which make a response rate of 88.6%. Descriptive statistics was used to analyze the data. In the descriptive statistics, relative frequencies were used in some questions and other were analyzed using mean scores with the help of Likert scale ratings in the analysis.

4.2 General Information This section presents the background information related with the respondents involved in this study. Specifically, the study inquired on respondent’s age category, period of service in the current position and gender.

4.2.1 Distribution of Respondents by Age Individuals of various age groups hold different opinion/judgments on various subjects. In view of gathering rich information from the assorted dimension, Respondents were required to indicate their age category.

Table 4.5: Distribution of Respondents by Age

Age Frequency Percentage 20-30 years 7 11.3 30-40 years 16 25.8 40-50 years 29 46.8 50 years and beyond 10 16.1 Total 62 100.0 Source: Research data, (2019)

Results show that most of the respondents (46.8%) were ages between 40 to50 years, 25.8% of the respondents were aged between 30 to 40 years, 16.1% of the respondents were aged 50 years

and beyond, 11.3% of the respondents were aged between 20 to30 years. This implies that respondents of various age groups were fairly involved in this study.

4.2.3 Distribution of Respondents by Gender Participants were required to indicate their gender category. This was sought in view of ensuring fair involvement of male and female respondent.

Figure 4.2 Respondents Gender Source: Research data, (2019)

Results show that majority of the respondents (62.9%) were males while 37.1% were females. This implies that both genders were fairly involved in this study and thus the finding of this study did not suffer from gender biasness.

4.3 Pricing Strategies and Consumer Choice on Toyota Motor Vehicle Products The study sought to determine whether pricing affects consumer’s choice on motor vehicle at Toyota Kenya. Results are presented in Figure 4.3.

Figure 4.3: Effect of Pricing on Consumer’s Choice on Motor Vehicle Products Source: Research data, (2019)

From the research findings, majority of the respondents (82.3%) were of the opinion that pricing affects consumer’s choice on motor vehicle at Toyota Kenya while 17.7% of the respondent were of the contrary opinion. This implies that pricing affects consumer’s choice on motor vehicle at Toyota Kenya. According to McConnell & Brue (2004) prices may weigh heavily in vehicle choice, but the price itself may influence perceived quality of the vehicle. The value that consumers place on vehicle price affects their evaluation of the car based on a car’s price. Consumer experiences and satisfaction are essentially influenced by the different attributes of the car. If a good is considered to be a luxury rather than a necessity, the greater is the price elasticity of demand (McConnell & Brue, 2004).

Table 4.6: Effect of Pricing on Consumer’s Choice on Motor Vehicle Products Statements N Min Max Mean Std. Dev To influence consumer choices Toyota Kenya uses the value- based pricing strategy, which sets prices based on the actual and 62 3.00 5.00 3.89 0.79 perceived value of the product Toyota uses the market-oriented pricing strategy to determine 62 3.00 5.00 4.21 0.66 prices based on market conditions and the prices of competitors Our company determines price levels based on market conditions 62 3.00 5.00 3.95 0.78 and customers’ perceptions. Pricing of Toyota’s is based on consumer preferences and 62 3.00 5.00 4.02 0.74 regional and local market conditions Toyota Kenya uses value-based pricing for high-end or more 62 3.00 5.00 4.26 0.81 expensive products, such as the Prius and Lexus cars Toyota’s prices vary widely, depending on the product line and 62 3.00 5.00 4.27 0.73 the product type or model Source: Research data, (2019) From the study findings, majority of the respondents agreed that Toyota’s prices vary widely, depending on the product line and the product type or model(M= 4.27 SD =0.73), Toyota Kenya uses value-based pricing for high-end or more expensive products, such as the Prius and Lexus cars (M=4.26 SD =0.81), Toyota uses the market-oriented pricing strategy to determine prices based on market conditions and the prices of competitors (M= 4.21 SD =0.66) and that pricing of Toyota’s is based on consumer preferences and regional and local market conditions(M= 4.02 SD =0.74). These finding goes hand in hand with the research findings by Rangan and Shapiro, (1995) who asserts that price had a positive effect on perceived quality, but a negative effect on perceived value and willingness to buy.

Further the study established to influence consumer choices Toyota Kenya uses the value-based pricing strategy, which sets prices based on the actual and perceived value of the product (M= 3.89 SD =0.79) the company determines price levels based on market conditions and customers’ perceptions (M=3.95 SD =0.78). These finding are in support of the research findings by Armstrong and Armstrong and (Kotler, 2001) price consciousness of individual customers also have an impact on whether they will purchase a particular product or not.

4.4 Branding Strategies and consumer choice on Toyota motor vehicle products The study sought to determine whether branding affects consumer’s choice on motor vehicle at Toyota Kenya. Results are presented in Figure 4.4

Figure 4.4: Effect of Branding on Consumer’s Choice on Motor Vehicle Products Source: Research data, (2019)

From the research firings, majority of the respondents (85.5%) were of the opinion that branding affects consumer’s choice on motor vehicle at Toyota Kenya while 14.5% was of the contrary opinion. This implies that branding affects consumer’s choice on motor vehicle at Toyota Kenya. This finding is supported by Gatignon and Robertson (2015) that product attributes have been shown to influence the consumer choice in any market place. They further found that a new feature adds greater value and increases the probability of brand choice where the brand: has relatively inferior existing features; is associated with lower; has a higher price; is both high priced and high quality

Table 4.7: Effect of Branding on Consumer’s Choice on Motor Vehicle Products Statements N Min Max Mean Std. Dev Loyalty towards a particular brand and influence buying 62 2.00 5.00 3.98 1.02 behavior of Toyota Kenya products Toyota has developed and secured high brand standards in 62 3.00 5.00 4.08 0.77 the minds of its customers Toyota Kenya operates both product and corporate brands 62 2.00 5.00 3.92 0.77 to target market segmentation Toyota has established a brand reputation with consistency 62 3.00 5.00 4.15 0.65 therefore strengthening its market share Toyota Kenya maintains deep analysis of Kenyan economic and cultural philosophies of the marketing environment and 62 2.00 5.00 4.08 0.87 its consumers attributes. Achieving brand equity is the main priority of Toyota Kenya 62 3.00 5.00 4.16 0.75 Product manufacturing standards and quality enable Toyota 62 2.00 5.00 3.97 0.89 to secure positive brand loyalty Source: Research data, (2019)

From the study findings, majority of the respondents agreed that achieving brand equity is the main priority of Toyota Kenya (M=4.16 SD =0.75), Toyota has established a brand reputation with consistency therefore strengthening its market share (M= 4.15 SD =0.65) Toyota Kenya maintains deep analysis of Kenyan economic and cultural philosophies of the marketing environment and its consumers attributes, Toyota has developed and secured high brand standards in the minds of its customers (M= 4.08SD =0.77). These finding goes hand in hand with the research findings by William (2016) brand image ensures that consumers hold strong and favorable associations of the brand in their minds adding that consumer’s choose and prefer brands they expect will give the most satisfaction based on the benefits they seek.

Further the study established loyalty towards a particular brand and influence buying behavior of Toyota Kenya products (M= 3.98 SD =1.02), product manufacturing standards and quality enable Toyota to secure positive brand loyalty (M= 3.97SD =0.89) and Toyota Kenya operates both product and corporate brands to target market segmentation (M=3.92 SD =0.77). These finding are in support of the research findings by Aaker (2011) contents that brand signals to a customer the source of a product and protects both the customer and the producer from competitors who would attempt to provide goods that appear to be identical.

4.5 Influence of Brand Awareness Creation on consumer choice on Toyota motor vehicle products The study sought to determine whether product awareness affects consumer’s choice on motor vehicle at Toyota Kenya. Results are presented in Table 4.8

Table 4.8: Effect of Product Awareness on Consumer’s Choice on Motor Vehicle Products Opinion Frequency Percentage Yes 54 87.1 No 8 12.9 Total 62 100.0 Source: Research data, (2019)

From the research findings, majority of the respondents (87.1%) were of the opinion that product awareness affects consumer’s choice on motor vehicle at Toyota Kenya while 12.9% were of the contrary opinion. This implies that product awareness affects consumer’s choice on motor vehicle at Toyota Kenya. This is in agreement with the assertions of Median (2016) who stated that organization seeks through its marketing communications to build awareness and to impress customers looking for the best range of products. According to Armstrong (2015), better sales is achieved not just by advertising but by choosing the right advertisement media and knowing how to incorporate the frequency of these adverts.

Table 4.9: Effect of brand awareness on Consumer’s Choice on Motor Vehicle Products Statements N Min Max Mean Std. Dev A motor vehicle advertisement that displays a picture accompanied by relevant price and vehicle information 62 2.00 5.00 3.98 0.90 influence the consumer choice Advertising provide the consumer with information thus creating awareness Advertising that persuade consumer to 62 3.00 5.00 4.18 0.56 buy Generation of model and brand awareness influence 62 2.00 5.00 4.13 0.71 consumer choice on motor vehicle at Toyota Kenya communication strategy of the branding tries always to facilitate the dialogue with consumers in the market they 62 2.00 5.00 4.00 0.96 are offering the products Toyota uses personal selling through dealerships' sales personnel, who personally promote products to potential 62 3.00 5.00 4.34 0.57 buyer The company also uses advertising on various media, such 62 2.00 5.00 3.81 1.01 as TV, newspapers, and websites Source: Research data, (2019)

From the study findings, majority of the respondents agreed that Toyota uses personal selling through dealerships' sales personnel, who personally promote products to potential buyer(M= 4.34 SD =0.57), advertising provide the consumer with information thus creating awareness Advertising that persuade consumer to buy (M= 4.18 SD =0.56) and that generation of model and brand awareness influence consumer choice on motor vehicle at Toyota Kenya (M=4.13 SD =0.71).These finding goes hand in hand with the research findings by Garcia and Balbaky, (2006) brand reputation also influences the rationality of the perception of saving attributed to odd price endings.

Further the study established the company’s communication strategy of the branding tries always to facilitate the dialogue with consumers in the market they are offering the products (M= 4.00 SD =0.96), a motor vehicle advertisement that displays a picture accompanied by relevant price and vehicle information influence the consumer choice (M=3.98 SD =0.90) and that the company also uses advertising on various media, such as TV, newspapers, and websites (M= 3.81 SD =1.01). These finding are in support of the research findings by Smith and Park, (2012) Brand awareness is an important part of the decision making process, which is why your

marketing efforts should be tied to improving this presence adding that the benefits of improved brand recognition are increased sales, enhanced trust and credibility and boosted loyalty.

4.7 Influence of Country of Origin on Consumer Choice on Toyota Motor Vehicle Products The study sought to determine whether country of origin affects consumer’s choice on motor vehicle at Toyota Kenya. Results are presented in Table 4.10

Table 4.10: Effect of Country of Origin on Consumer’s Choice on Motor Vehicle Products Opinion Frequency Percentage Yes 51 82.3 No 11 17.7 Total 62 100 Source: Research data, (2019)

From the research firings, majority of the respondents (82.3%) were of the opinion that country of origin affects consumer’s choice on motor vehicle at Toyota Kenya while 17.7% were of the contrary opinion. This implies that country of origin affects consumer’s choice on motor vehicle at Toyota Kenya.

Table 4.11: Effect of Country of Origin on Consumer’s Choice on Motor Vehicle Products Statements N Min Max Mean Std. Dev consumer tend to have a relatively lower preference to 62 2.00 5.00 3.66 1.05 motor vehicles from their own country The country of origin has an impact on consumers' quality perceptions of a product, as well as ultimately preference 62 4.00 5.00 4.42 0.50 for and willingness to buy that product? Country-of-origin is an intangible cue which can influence motor vehicles customers on purchase and evaluation 62 4.00 5.00 4.42 0.50 process Motor vehicle consumers in Kenya prefer foreign brands over local brands due to its symbolical social meaning that 62 2.00 5.00 4.00 1.09 portrays higher quality, sophistication, modernity, novelty and prestige consumers of developing economies regard products from developed markets as an indication of their higher status, 62 4.00 5.00 4.31 0.46 class, wealth and lifestyle The degree of global exposure, the level of familiarity with different countries and their products can influence 62 2.00 5.00 3.77 1.14 consumers’ willingness to purchase products and the extent to which they use COO cues Source: Research data, (2019)

From the study findings, majority of the respondents agreed that country-of-origin is an intangible cue which can influence motor vehicles customers on purchase and evaluation process, the country of origin has an impact on consumers' quality perceptions of a product, as well as ultimately preference for and willingness to buy that product (M=4.42 SD =0.50), consumers of developing economies regard products from developed markets as an indication of their higher status, class, wealth and lifestyle (M=4.31 SD =0.46). These findings concur with the study findings by Harzing, (2008) buyers use extrinsic cues as the basis for their evaluations of product quality because it is often difficult for them to discern a product's true intrinsic quality.

Further the study established Motor vehicle consumers in Kenya prefer foreign brands over local brands due to its symbolical social meaning that portrays higher quality, sophistication, modernity, novelty and prestige (M= 4.00 SD =1.06), the degree of global exposure, the level of familiarity with different countries and their products can influence consumers’ willingness to purchase products and the extent to which they use COO cues(M=3.77 SD =1.77) and consumer tend to have a relatively lower preference to motor vehicles from their own country (M= 3.66 SD =1.05). These findings support the study findings by Keller, (2003) Country of origin is one of the extrinsic cues particularly when buyers are less familiar with foreign products (HanT1988) or intrinsic cues are not available.

4.8 Performance of Toyota Kenya Respondents were required to indicate the trend with the following measures of organizational in in the last one three years.

Table 4.12: Performance of Toyota Kenya Trends N Min Max Mean Std. Dev Sales turnover 62 3.00 5.00 4.08 0.61 Clientele 62 4.00 5.00 4.31 0.46 Customer complains 62 1.00 2.00 1.53 0.50 Customer loyalty 62 3.00 5.00 4.16 0.63 Referrals 62 3.00 5.00 4.27 0.66 Positive comments from customers 62 3.00 5.00 4.37 0.83 Source: Research data, (2019)

From the study findings, majority of the respondents agreed that Toyota Kenya had realized significant improvement on number of clientele (M= 4.31SD =0.46), positive comments from customers (M= 4.37 SD =0.83) customer Referrals, (M= 4.27 SD .66=) customer loyalty (M= 4.16 SD =0.63), clientele (M= 4.31SD =0.46) sales turnover (M= 4.08 SD =0.61). These finding goes hand in hand with the research findings by Waithaka, (2009) Building a reliable consumer behavior model is a critical tool in understanding the market dynamics of the automobile industry.

4.9 Regression Test In this study, a multiple regression analysis was conducted to test the influence among predictor variables. The research used statistical package for social sciences (SPSS V 21.0) to code, enter and compute the measurements of the multiple regressions. The model summary is presented in the Table 4.13 below

Table 4.13: Model Summary

Model R R Square Adjusted R Square Std. Error of the Estimate 1 .793a .629 .602 .16720 Source: Research data, 2019

The study used coefficient of determination to evaluate the model fit. The adjusted R2, also called the coefficient of multiple determinations, is the percent of the variance in the dependent explained uniquely or jointly by the independent variables. The model had an average adjusted coefficient of determination (R2) of 0.602 and which implied that 60.2% of the variations on consumer choice of motor vehicles are explained by the independent variables understudy (pricing, branding, awareness Creation, and products’ country of origin).

The study further tested the significance of the model by use of ANOVA technique. The findings are tabulated in table 4.14

Table 4.14: Summary of One-Way ANOVA results

Model Sum of Squares Df Mean Square F Sig. Regression 30.320 4.00 7.580 10.412 .000b 1 Residual 41.496 57.00 0.728 Total 71.816 61.00 Source: Research data, (2019)

Critical value =2.53

From the ANOVA statics, the study established the regression model had a significance level of 0.00% which is an indication that the data was ideal for making a conclusion on the population parameters as the value of significance (p-value) was less than 5%. The calculated value was greater than the critical value (10.412.> 2.53) an indication that pricing, branding, awareness Creation and product country of origin all have a significant effect on consumer choice of motor vehicles. The significance value was less than 0.05 indicating that the model was significant.

In addition, the study used the coefficient table to determine the study model. The findings are presented in the Table 4.15 Table 4.15: Coefficients

Model Unstandardized Standardized T Sig. Coefficients Coefficients B Std. Error Beta

(Constant) 1.059 .110 9.605 .000 Pricing (X1) .428 .044 .244 9.713 .000 1 Branding (X2) .362 .040 .233 9.007 .000 Awareness Creation (X3) .604 .045 .355 13.312 .000 Product Country Of Origin (X4) .757 .045 .428 16.794 .000 Source: Research data, (2019)

As per the SPSS generated output as presented in table above, the equation (Y = β0 + β1X1 +

β2X2 + β3X3 + β4X4+ ε) becomes:

Y= 1.059 + 0.428X1+ 0.362X2 + 0.604X3+ 0.757X4

From the regression model obtained above, a unit change in pricing holding the other factors constant would positively change consumer choice of motor vehicles by a factor of 0.428; a unit change in branding while holding the other factors constant would positively change consumer choice of motor vehicles by a factor of 0.362, a unit change in product awareness creation while holding the other factors constant would positively change consumer choice of motor vehicles a factor of 0.604 while a unit change in product country of origin while holding the other factors constant would positively change consumer choice of motor vehicles by a factor of 0.757 The findings further agree with Ayodele (2011) that pricing strategies were key to achieving consumer loyalty. The analysis was undertaken at 5% significance level.

The criteria for comparing whether the predictor variables were significant in the model was through comparing the obtained probability value and α=0.05. If the probability value was less than α, then the predictor variable was significant otherwise it wasn’t. All the predictor variables were significant in the model as their probability values were less than α=0.05.

4.10 Chapter Summary This chapter presented the results from the analysed data. The chapter provided both descriptive and inferential results and further compared the results with those of other scholars from different regions. The next chapter presents the summary of the findings, conclusion. Recommendations and recommendations for further studies.

CHAPTER FIVE

SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS

5.1 Introduction From the analysis and data collected, the following discussions, conclusion and recommendations were made. The responses were based on the objectives of the study. The researcher had intended to determine how pricing affects consumer’s choice on motor vehicle at Toyota Kenya to establish how branding affects consumer choice on motor vehicle at Toyota Kenya to determine the effects of awareness on consumer choice on motor vehicle at Toyota Kenya, to determine the effect of social influence on the customer choice on motor vehicle at Toyota Kenya and to determine how country of origin affects the choice on motor vehicle at Toyota Kenya.

5.2 Summary of Finding 5.2.1 Pricing Strategies and Consumer Choice on Toyota Motor Vehicle Products

In line with the first objective, the study revealed that pricing had a significant influence on consumer choice of motor vehicles. Test regression results show that a unit change in pricing holding the other factors constant would positively change consumer choice of motor vehicles by a factor of 0.428. Descriptive results show that to influence consumer choices Toyota Kenya uses the value-based pricing strategy, which sets prices based on the actual and perceived value of the product. Toyota’s prices vary widely, depending on the product line and the product type or model and that company determines price levels based on market conditions and customers’ perceptions. These findings are in support of the with the study findings by Rangan and Shapiro, (1995) who asserts that price had a positive effect on perceived quality, but a negative effect on perceived value and willingness to buy.

The study also revealed that Toyota uses the market-oriented pricing strategy to determine prices based on market conditions and the prices of competitors. Pricing of Toyota’s is based on consumer preferences and regional, local market conditions and that Toyota Kenya uses value- based pricing for high-end or more expensive products, such as the Prius and Lexus cars, these

findings support the study findings by Armstrong and (Kotler, 2001) price consciousness of individual customers also have an impact on whether they will purchase a particular product or not.

Results also show that When firms that own leading brand reduce their prices, other firms with competing brands in the same product category tends to reduce their prices in order to stay competitive. This is especially true in cases where the competing brands see themselves as not reputable enough to match the lower prices offered by a more superior brand. Therefore, the behavior of retailers is ultimately based not only on the pricing psychology, but also other marketing and economic variables like the brand strategy, integrated marketing communication and the market structures that the firm operates.

5.2.2 Branding and Consumer Choice on Toyota Motor Vehicle Products The study revealed a significant relationship between branding and consumer choice of motor vehicles. Results also show that a unit change in branding while holding the other factors constant would positively change consumer choice of motor vehicles. Toyota Kenya maintains deep analysis of Kenyan economic and cultural philosophies of the marketing environment and its consumer’s attributes; Toyota has established a brand reputation with consistency therefore strengthening its market share and that product manufacturing standards and quality enable Toyota to secure positive brand loyalty. These findings concur with the study findings by Aaker (2011) contend that brand signals to a customer the source of a product and protects both the customer and the producer from competitors who would attempt to provide goods that appear to be identical.

Further the study revealed that loyalty towards a particular brand and influence buying behavior of Toyota Kenya products, Toyota Kenya operates both product and corporate brands to target market segmentation. Toyota has developed and secured high brand standards in the minds of its customers and that achieving brand equity is the main priority of Toyota Kenya. These findings support the study findings by William (2016) brand image ensures that consumers hold strong and favorable associations of the brand in their minds adding that consumer’s choose and prefer brands they expect will give the most satisfaction based on the benefits they seek.

The study also established that Consumer brand equity directly affects market behavior of motor vehicle customers as high brand loyalty means that the same customers stay loyal and return to purchase the same product from the company. Achieving a high degree of loyalty is an important goal in the branding process. Loyal consumers are valuable consumers because it is much more expensive to recruit new customers than nursing and keeping existing ones. These findings are in support the with the study findings by Chernatony and McDonald, (2018) Brands are important vehicles when building consumer loyalty as they provide recognizable fix points in the shopping experience.

5.2.3 Brand Awareness Creation and Consumer Choice on Toyota Motor Vehicle Products

The study revealed a significant relationship between branding awareness and consumer choice of motor vehicles. Results also show that a unit change in brand awareness while holding the other factors constant would positively change consumer choice of motor vehicles. Descriptive results show that advertising done by Toyota Kenya provide the consumer with information thus creating awareness advertising persuade consumer to buy generation of model and brand awareness influence consumer choice on motor vehicle at Toyota Kenya. The company also uses advertising on various media, such as Television, newspapers, and websites and that communication strategy of the branding tries always to facilitate the dialogue with consumers in the market they are offering the products. These findings concur with the study findings by Garcia and Balbaky, (2016) brand reputation also influences the rationality of the perception of saving attributed to odd price endings.

The findings further revealed that Toyota uses personal selling through dealerships' sales personnel, who personally promote products to potential buyer. Communication strategy of the branding tries always to facilitate the dialogue with consumers in the market they are offering the products and that a motor vehicle advertisement that displays a picture accompanied by relevant price and vehicle information influence the consumer choice. These findings are in support of the research findings by Smith and Park, (2012) brand awareness is an important part of the decision making process, which is why your marketing efforts should be tied to improving this presence adding that the benefits of improved brand recognition are increased sales, enhanced trust, credibility and boosted loyalty.

5.2.4 Country of Origin and Consumer Choice on Toyota Motor Vehicle Products

The study revealed a significant relationship between country of origin and consumer choice of motor vehicles. Results also show that a unit change in products country of origin while holding the other factors constant would positively change consumer choice of motor vehicles. Results show that customers’ level of global exposure, the level of familiarity with different countries and their products can influence consumers’ willingness to purchase products and the extent to which they use. These findings support the study findings by Keller, (2003) Country of origin is one of the extrinsic cues particularly when buyers are less familiar with foreign products (HanT1988) or intrinsic cues are not available.

The study also revealed that motor vehicle consumers in Kenya prefer foreign brands over local brands due to its symbolical social meaning that portrays higher quality, sophistication, modernity, novelty and prestige, consumer tend to have a relatively lower preference to motor vehicles from their own country and that consumers of developing economies regard products from developed markets as an indication of their higher status, class, wealth and lifestyle. These findings concur with the study findings by Harzing, (2008) ungues that buyers use extrinsic cues as the basis for their evaluations of product quality because it is often difficult for them to discern a product's true intrinsic quality. On performance the study revealed that the company registered increase in sales turnover, positive comments from customers, customer loyalty, clientele and decrease in customer complains.

5.3 Conclusion The study concludes that pricing affects consumer’s choice on motor vehicle at Toyota Kenya to very great extent as the study established that pricing influenced the choice Toyota model the respondent were using, the study found that pricing influenced customer’s choice of as shown by majority of the respondent. Pricing influenced the choice of Toyota model through the consumer purchasing power where the consumer went for the model which price was pocket friendly.

The study concludes that branding affects consumer choice on motor vehicle at Toyota Kenya to great extent, as it was established by the study that branding influence customer choice of the model, through personal attachment to certain brand, brand activities like Hilux being associated with hard work, brand loyalty and through brand image created by promotion. The study 60

established branding through personal selling influence consumer choice of the model, as the study found that most of the respondent agreed.

The study also concludes that awareness affects consumer choice on motor vehicle at Toyota Kenya models to very great extent as it was established that promotion influence customer’s choice of the model choice, through customer being perceived to buy the model through promotional campaign, creating quality perception in the promotional campaigns, creating mental picture which influence customer’s choice of the model and help the customer to get aware of the product.

Social influence on the customer choice on motor vehicle at Toyota Kenya was found to affect the vehicle model to great extent as the study established that social influence impacts customer’s choice on Toyota model, through their social class which determined the type of Toyota to buy, through their friendly make and model, through family choice of brand, work which recommended the type of vehicle model and type of business they were involved in.

The study revealed that the country of origin affects the choice on motor vehicle at Toyota kenya models to great extent as it was established that the country of origin has an impact on consumers' quality perceptions of a product, as well as ultimately preference for and willingness to buy that product.

5.4 Recommendation The study recommends that Motor vehicle companies in Kenya must adopt better pricing strategies that will help them in persuade customers to buy their vehicle model as it was found that pricing affects consumer’s choice on motor vehicle at Toyota Kenya to very great extent and pricing influence the choice of Toyota model through the consumer purchasing power where the consumer went for the model which price was pocket friendly.

For Toyota Kenya to increase their market share and increase customer loyalty the study recommends that motor vehicle companies come up with brands that will strongly influence the consumer choice of their brand, as it was established by the study that branding influence customer choice of the model, through personal attachment to certain brand, brand activities, brand loyalty and through brand image created by promotion.

Toyota Kenya companies must have constant promotional activities that will help them in creating awareness to customers of their various product as it was found by the study that awareness affects consumer choice on motor vehicle at Toyota models to very great extent, as promotion influence customer’s choice of the model choice, through customer being perceived to buy the model through promotional campaign, creating quality perception in the promotional campaigns, creating mental picture which influence customer’s choice of the model and help the customer to get aware of the product

The study recommend that motor vehicle companies in Kenya must come up with various motor brands associated with various social class , as the study found that Social influence on the customer choice on motor vehicle at Toyota Kenya was found to affect the vehicle model to great extent as social influence impacts customers choice on Toyota model, through their friend make and model, through family choice of brand, work which recommended the type of vehicle model and type of business they were involved in.

The study recommends that motor vehicle companies must associate their brand with the country of origin especially during the awareness campaign as it was established that the country of origin has an impact on consumers' quality perceptions of a product, as well as ultimately preference for and willingness to buy that product.

5.5 Suggestion for Further Research This study was a case study of Toyota Kenya; the study recommends an in-depth study on the entire motor industry to investigate whether what was found in the Toyota Kenya applies to other motor vehicle firms.

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APPENDICES

APPENDIX I: INTRODUCTION LETTER

OSORO JARED NYAEMA

Po Box 25189-00603

Nairobi

Dear Respondent,

Re: Data collection for research study

I am a student at Management University of Africa. I am conducting a study on SOCIO- ECONOMIC DETERMINANTS INFLUENCING CONSUMER CHOICE FOR MOTOR VEHICLES IN KENYA: A CASE OF TOYOTA KENYA. Please answer the following questions honestly and objectively to the best of your knowledge, the information obtained will be treated with strict confidentiality. Please do not write your name on the questionnaire. Thank you for your acceptance and support.

Yours faithfully

OSORO NYAEMA JARED

APPENDIX II: QUESTIONNAIRE INSTRUCTIONS Please answer all the questions by writing down in the space provided. Where the choices have been given, please tick on the area that best suits you. Answer the questions according to the instructions given for every question. 1. General Information Name (optional) ------Age of the respondent in years: 20-30 ( ) 30-40 ( ) 40-50 ( ) 50 and beyond ( ) Years of service in present post: 0-5 ( ) 6-10 ( ) 11-20 ( ) 20 and beyond ( ) Gender category Male ( ) Female ( ) Section B; Pricing strategies and consumer choice on Toyota motor vehicle products

In your opinion does pricing affect consumer’s choice on motor vehicle at Toyota Kenya?

Yes ( )

No ( )

Indicate your level of agreement with the following statements relating to the effects of pricing on consumer choice on motor vehicle at Toyota Kenya.(scale 1= strongly disagree, 2= disagree, 3= moderate, 4 =agree and 5 = strongly agree)

Statement 1 2 3 4 5 To influence consumer choices Toyota Kenya uses the value-based pricing strategy, which sets prices based on the actual and perceived value of the product Toyota uses the market-oriented pricing strategy to determine prices based on market conditions and the prices of competitors Our company determines price levels based on market conditions and customers’ perceptions. Pricing of Toyota’s is based on consumer preferences and regional and local market conditions Toyota Kenya uses value-based pricing for high-end or more expensive products, such as the Prius and Lexus cars Toyota’s prices vary widely, depending on the product line and the product type or model

How else does pricing influence consumer choice on motor vehicle at Toyota Kenya?

……………………………………………………………………………………………………… ………………………………………………………………………………………………………

Section C; Branding Strategies and consumer choice on Toyota motor vehicle products

In your opinion does branding affect consumer’s choice on motor vehicle at Toyota Kenya?

Yes ( )

No ( )

Indicate your level of agreement with the following statements relating to the effects of branding on consumer choice on motor vehicle at Toyota Kenya.(scale 1= strongly disagree, 2= disagree, 3= moderate, 4 =agree and 5 = strongly agree)

Statement 1 2 3 4 5 Loyalty towards a particular brand and influence buying behavior of Toyota Kenya products

Toyota has developed and secured high brand standards in the minds of its customers

Toyota Kenya operates both product and corporate brands to target market segmentation

Toyota has established a brand reputation with consistency therefore strengthening its market share

Toyota Kenya maintains deep analysis of Kenyan economic and cultural philosophies of the marketing environment and its consumers attributes.

Achieving brand equity is the main priority of Toyota Kenya

Product manufacturing standards and quality enable Toyota to secure positive brand loyalty

How else does branding influence consumer choice on motor vehicle at Toyota Kenya?

Section D; Brand Awareness Creation and consumer choice on Toyota motor vehicle products

In your opinion does product awareness creation influence consumer choice on motor vehicle at Toyota Kenya.

Yes ( )

No ( )

Indicate your level of agreement with the following statements relating to the effects of brand awareness creation on consumer choice on motor vehicle at Toyota Kenya. (scale 1= strongly disagree, 2= disagree, 3= moderate, 4 =agree and 5 = strongly agree)

Statement 1 2 3 4 5 A motor vehicle advertisement that displays a picture accompanied by relevant price and vehicle information influence the consumer choice 72

Advertising provide the consumer with information thus creating awareness Advertising persuade consumer to buy Generation of model and brand awareness influence consumer choice on motor vehicle at Toyota Kenya communication strategy of the branding tries always to facilitate the dialogue with consumers in the market they are offering the products

Toyota uses personal selling through dealerships' sales personnel, who personally promote products to potential buyer

The company also uses advertising on various media, such as TV, newspapers, and websites

How else does awareness creation influence consumer choice on motor vehicle at Toyota Kenya?

Section E; Country of Origin and consumer choice on Toyota motor vehicle products

In your opinion does country of origin creation influence consumer choice on motor vehicle at Toyota Kenya.

Yes ( )

No ( )

Indicate your level of agreement with the following statements assessing how country of origin influence consumer choice on motor vehicle at Toyota Kenya.(scale 1= strongly disagree, 2= disagree, 3= moderate, 4 =agree and 5 = strongly agree)

Statement 1 2 3 4 5 consumer tend to have a relatively lower preference to motor vehicles from their own country The country of origin has an impact on consumers' quality perceptions of a product, as well as ultimately preference for and

willingness to buy that product? Country-of-origin is an intangible cue which can influence motor vehicles customers on purchase and evaluation process Moto vehicle consumers in Kenya prefer foreign brands over local brands due to its symbolical social meaning that portrays higher quality, sophistication, modernity, novelty and prestige consumers of developing economies regard products from developed markets as an indication of their higher status, class, wealth and lifestyle degree of global exposure, the level of familiarity with different countries and their products can influence consumers’ willingness to purchase products and the extent to which they use COO cues

How else does awareness creation influence consumer choice on motor vehicle at Toyota Kenya?

Section F; Performance

How would you rate the following factors in the last one three years?

(scale 1= sharply decreased, 2= decreased, 3= constant, 4 = increased and 5 = highly increase)

Statement 1 2 3 4 5 Sales turnover Clientele Customer complains Customer loyalty Referrals Positive comments from customers

Thank you for your time