FACTORS AFFECTING CONSUMER PURCHASING DECISION IN KENYA’S

MOTOR INDUSTRY: CASE OF TOYOTA KENYA CUSTOMERS

BY

HITESH MEHTA

UNITED STATES INTERNATIONAL UNIVERSITY AFRICA

ii

SPRING 2015

FACTORS AFFECTING CONSUMER PURCHASING DECISION IN KENYA’S

MOTOR INDUSTRY: CASE OF TOYOTA KENYA CUSTOMERS

BY

HITESH MEHTA

A Project Report Submitted to the Chandaria School of Business in Partial Fulfilment

of the Requirements for the Masters of Business Administration (MBA)

iii

UNITED STATES INTERNATIONAL UNIVERSITY AFRICA

SPRING 2015

STUDENT’S DECLARATION

I, the undersigned, declare that this is my original work and has not been submitted to any

other college, institution or university other than United States International University.

Signed: ________________________ Date: __________________

Mehta Hitesh Nitin (625367)

This research report has been presented for examination with our approval as the appointed

supervisors.

Signed: ________________________ Date: __________________

Dr. Peter Kiriri

Signed: ________________________ Date: __________________

Dean Chandaria School of Business

iv

COPYRIGHT

All rights reserved including rights of reproduction in whole or part in any form without the

prior permission of the author or United States International University or Office of the

Deputy Vice Chancellor Academic Affairs.

© 2015

v

ABSTRACT

The general objective of the study was to examine factors affecting consumer purchasing

decisions in Kenya’s motor vehicle industry. The study was guided by the following specific

objectives: to determine the economic factors affecting consumer purchasing decisions in

Kenya’s motor vehicle industry; to examine the psychological factors affecting consumer

purchasing decisions in Kenya’s motor vehicle industry; to examine the social-cultural

factors affecting consumer purchasing decisions in Kenya’s motor vehicle industry, and; to

analyze the demographic 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 data

was analyzed using descriptive and inferential statistics with the help of the Statistical

Package for Social Sciences (SPSS). The results were then presented in tables and figures.

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.

The study further revealed there was a positive significant relationship between

psychological factors and purchasing decision. This findings imply that the consumer

purchasing decision is influenced by psychological factors such as perception, motivation

from friends and family, attitude towards the brand, innovative of the car and brand,

personal beliefs as well as knowledge sharing from friends and colleagues.

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It was also revealed that there was a positive significant relationship between Social-cultural

factors and purchasing decision. This finding implies that the consumer purchasing decision

is influenced by Social-cultural factors such as perception, motivation from friends and

family, attitude towards the brand, innovative of the car and brand, personal beliefs as well

as knowledge sharing from friends and colleagues.

Finally the study revealed that there was a positive significant relationship between

demographic factors and purchasing decision. This finding implies that the consumer

purchasing decision is influenced by demographic factors such as demographic factors such

as personality, gender, Age, Changing life, level of education, lifestyle, lifecycle status and

occupation.

The study concludes that psychological factors, social-cultural factors, economic factors, as

well as demographic factors affect consumer purchasing decisions in Kenya’s motor vehicle

industry in Kenya.

The study recommends that firms dealing with motor vehicle need to consider the various

economic factors that influence consumer decision making such as interest rates, income as

well as rising fuel prices. In this regard they need to design motor vehicle for different

categories of customers in different income brackets in Kenya. There is a need to make sure

that investments in quality occur in areas that will resonate with customers.

Finally it was important to understand the little things that consumers use as the basis for

making a judgment of when it comes to purchasing decisions. The study recommends the

need for automobile companies to consider consumers’ demographic characteristics such as

age, gender, marital status, occupation, education and income when designing the products

to offer into the Kenyan market. This is because demography factors are vital and

measurable statistics of a population that helps to locate target market, they are easier to

measure and are suitable for psychographic and socio-cultural studies. Additionally

demographic factors have a huge impact on the assessment of different features which are

generally associated with consumer behaviour.

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ACKNOWLEDGMENTS

I wish to acknowledge my Supervisor for his guidance throughout my research and my

parents for their support.

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DEDICATION

This study is dedicated first and foremost to God for seeing me through, to my family and

my friends.

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TABLE OF CONTENTS

STUDENT’S DECLARATION ........................................................................................... iii

COPYRIGHT ........................................................................................................................ iv

ABSTRACT............................................................................................................................ v

ACKNOWLEDGMENTS ................................................................................................... vii

DEDICATION .................................................................................................................... viii

TABLE OF CONTENTS ..................................................................................................... ix

LIST OF TABLES ............................................................................................................... xii

CHAPTER ONE .................................................................................................................... 1

1.0 INTRODUCTION ....................................................................................................... 1

1.1 Background to the study ................................................................................................ 1

1.2 Problem Statement ......................................................................................................... 5

1.3 General Objective .......................................................................................................... 5

1.4 Specific Objectives ........................................................................................................ 5

1.5 Significance of the Study ............................................................................................... 6

1.6 Scope of the Study ......................................................................................................... 6

1.7 Definition of Terms ....................................................................................................... 7

1.8 Chapter Summary .......................................................................................................... 8

CHAPTER TWO ................................................................................................................... 9

2.0 LITERATURE REVIEW ........................................................................................... 9

2.1 Introduction .................................................................................................................... 9

2.2 Economic Factors Affecting Consumer Purchasing Decisions ..................................... 9

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2.3 Psychological Factors Affecting Consumer Purchasing Decisions ............................. 14

2.4 Social-Cultural Factors Affecting Consumer Purchasing Decisions ........................... 18

2.5 Demographic Factors Affecting Consumer Purchasing Decisions ............................. 22

2.6 Chapter Summary ........................................................................................................ 26

CHAPTER THREE ............................................................................................................. 27

3.0 RESEARCH METHODOLOGY ............................................................................. 27

3.1 Introduction .................................................................................................................. 27

3.2 Research Design .......................................................................................................... 27

3.3 Population and Sampling Design................................................................................. 28

3.4 Data Collection Methods ............................................................................................. 30

3.5 Research Procedures .................................................................................................... 30

3.6 Data Analysis Methods ................................................................................................ 31

3.7 Chapter Summary ........................................................................................................ 31

CHAPTER FOUR ............................................................................................................... 32

4.0 RESULTS AND FINDINGS ..................................................................................... 32

4.1 INTRODUCTION ....................................................................................................... 32

4.2 Background Information .............................................................................................. 32

4.3 Economic Factors and Purchasing Decision ................................................................ 38

4.4 Psychological Factors and Purchasing Decision ......................................................... 40

4.5 Social-Cultural Factors and Purchasing Decision ....................................................... 43

4.6 Demographic Factors and Purchasing Decision .......................................................... 45

4.7 Chapter Summary ........................................................................................................ 49

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CHAPTER FIVE ................................................................................................................. 50

5.0 DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS ........................ 50

5.1 Introduction .................................................................................................................. 50

5.2 Summary ...................................................................................................................... 50

5.3 Discussion .................................................................................................................... 52

5.4 Conclusions.................................................................................................................. 57

5.5 Recommendations ........................................................................................................ 58

REFERENCES .................................................................................................................... 61

Appendix 1: Questionnaire ................................................................................................. 65

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LIST OF TABLES

Table 4.1: Gender of the Respondents ................................................................................... 32

Table 4.2: Age of the Respondents ........................................................................................ 33

Table 4.3: Level of Education ............................................................................................... 34

Table 4.4: Number of Years using Toyota Cars .................................................................... 34

Table 4.5: Cross Tabulations for Gender and Number of Years Using Toyota Cars ............ 35

Table 4.6: Cross Tabulations for Education and Number of Years Using Toyota Cars ....... 35

Table 4.7: Cross Tabulations for Age and Number of Years Using Toyota Cars ................. 36

Table 4.8: Correlation Analysis ............................................................................................. 37

Table 4.9: Economic Factors ................................................................................................. 38

Table 4.10: Economic Factors and Purchasing Decision ...................................................... 39

Table 4.11: Psychological factors .......................................................................................... 41

Table 4.12: Psychological Factors and Purchasing Decision ................................................ 41

Table 4.13: Social-cultural factors ......................................................................................... 43

Table 4.14: Social-Cultural Factors and Purchasing Decision .............................................. 44

Table 4.15: Demographic Factors .......................................................................................... 46

Table 4.16: Demographic Factors and Purchasing Decision ................................................. 46

Table 4.17: Multiple Regression ............................................................................................ 48

1

CHAPTER ONE

1.0 INTRODUCTION

1.1 Background to the study

Consumer behavior is regarded to be that particular the action which an individual takes in

the process of purchasing and using products and services. This process also includes the

mental as well as the social processes which come before these actions. It means therefore

that one of the biggest challenges facing businesses is the process of predicting and

understanding consumer behavior. At present, the competitive market forced producers to

produce goods based on customer needs (Tafler, 2014). The study of consumer purchase

behavior, which was initially known as consumer behavior, offers relevant information

regarding consumers and their consumption patterns.

An organization can actually survive if it can be able to supply consumer needs and

demands with a comprehensive understanding of them. This means therefore that there is

need to study consumer behavior. In this regard, there is need to understand consumer

behavior which is not so simple. Customers likely do not know their own deeper inner

motivation or they are likely therefore to react to affecting factors in the last moment, and

this can simply change their mind. However, marketers need to consider their customers’

requests, intakes and buying behaviors (Kotler, 2009).

Knowledge of consumer behavior is therefore considered to be very essential if

organizations seek to gain commercial success. The relationship between consumer behavior

as well as marketing strategy is very much emphasized since the success of companies’

marketing strategies depends on how well managers’ understand of consumer behaviour

(Kotler, 2009).

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Consumer buyer behavior is regarded to be the multi-step decision-making process where

people take part in it and it also include the actions consumers take to satisfy their needs and

wants in the marketplace. The study of customer behaviour is therefore mainly focused on

consumer buying behaviour, in that the customer plays three essential roles: user, payer as

well as buyer (Kotler, 2009).

According to previous studies conducted on consumer behavior it has not been easy to

predict what goes through the mind of the consumers during the purchase decision. This is

because it involves the psychological processes which consumers undergo in recognizing

their needs, while seeking ways to solve these needs, making purchase decisions,

interpreting information, making plans, and finally implementing these plans.

One of the most fundamental assumptions in the study of consumer behaviour is that indeed

individuals often buy products on the basis of their perceived values as compared to their

primary functions (Stávková, Stejskal & Toufarova, 2009). This however is not to say that

that the main functions of the products are not essential. However it simply means that the

contemporary duty of a product is more when compared to its basic use-value. In most

cases, consumers do not rate products in relations to their core attributes but, rather

according to the so-called real product as well as the extended product, which simply

represents a set of intangible factors, which confer a desired perceived advantage on the

consumer and which includes; image consultancy, and after-sale service (Foret &

Procházka, 2009).

Consumer buying behavior is often unconsciously affected by some factors. For instance

social factors play an essential role when it comes to the decision of buying certain products,

including the most sensitive products such as cars. The important social factors are:

reference groups, family, role and status. There are four important psychological factors

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affecting the consumer buying behavior: perception, motivation, learning and beliefs and

attitudes. The economic factors that most commonly affect consumer behavior include

occupation, economic situation and personality (Blythe, 2009).

Successful businesses are well aware of how to leverage the different factors that influence

consumer buying behavior in order to effectively market their products and as such

maximize sales. Studies have revealed that there are generally four main factors that play a

role in the consumer's buying behavior. The factors include cultural factors, social factors,

personal factors and psychological factors (Blackwell et al., 2001). This study therefore

sought to explore of the four main factors that influence consumer buying behavior of the

automotive.

A study done by Havkinze, Roger & Kenth (2009) was able to establish that the consumer’s

disposable income is indeed very essential when it comes to determining what to buy and in

what quantities, however this mostly depends on the income elasticity of a certain product.

In the event that the consumers disposable income increases and that the income elasticity of

demand for that good is greater than one then the proportional rise in the demand for that

product is greater than the rise in income levels. Their study also reported that the influence

of culture on buying behavior varies from country to country therefore marketers have to be

very careful in analyzing the culture of different groups, regions or even countries.

Peter & Olson (2009) are of the opinion that customer possesses specific belief and attitude

towards various products. This is because such beliefs and attitudes are what comprises

brand image and therefore affect consumer buying behavior. In this regard, it is important

for marketers to change the beliefs and attitudes of customers through the launch of special

campaigns.

4

The Automotive industry in Kenya is primarily involved in the retail and distribution of

motor vehicles. The motor industry in Kenya contributes to at least 6% to the GDP. There

are a number of motor vehicle dealers operating in the country, with the most established

being Toyota (East Africa) Cooper Motor Corporation, General Motors, Simba Colt and DT

Dobie. There are also three vehicle assembly plants in the country, which concentrate on the

assembly of pick-ups and heavy commercial vehicles.

The established dealers face intense competition from imported second-hand vehicles,

mainly from Japan and United Arab Emirates. These imports now account for about 74% of

the market (Mwangi, 2013). The last ten years for instance has witnessed a significant

decline when it comes to the number of new vehicles being sold in the Kenyan market. This

therefore indicates a steady recovery in the last four years, however these numbers are still

fall far short of the numbers recorded a decade ago.

The main brands category from Toyota Kenya sold in Kenya are; Corolla, Rav 4, Hilux,

Fortuner, Prado and Land Cruiser. The company mostly sell salon cars, buses and trucks.

Increased demand for buses and trucks helped Toyota Kenya to become the country’s largest

car dealer by unit sale. Toyota Kenya employs approximately 5000 employees in the various

branches Data from the Kenya Motor Industry Association (KMI) shows that Toyota’s

market share is more than 50 per cent.

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1.2 Problem Statement

There are a number of research and studies that have been conducted to examine factors

affecting new motor vehicle sale in America, Europe, India, China and even South Africa.

Locally, Ndungu (2008) conducted a survey of the vertical integration strategies used in the

automotive industry in Kenya while Kipchirchir (2008) carried out a survey on the Kenyan

Motor Vehicle Industry.

However, studies done in Kenya did not establish the factors affecting new vehicle sale in

the Kenya. This study, therefore sought to fill this information gap by investigating the

factors that influence customer buying behavior of the motor industry.

1.3 General Objective

The general objective of the study was to examine factors affecting consumer purchasing

decisions in Kenya’s motor vehicle industry.

1.4 Specific Objectives

The study was guided by the following specific objectives:

1.4.1 To determine the economic factors affecting consumer purchasing decisions in

Kenya’s motor vehicle industry

1.4.2 To examine the psychological factors affecting consumer purchasing decisions in

Kenya’s motor vehicle industry

1.4.3 To examine the social-cultural factors affecting consumer purchasing decisions in

Kenya’s motor vehicle industry

1.4.4 To analyze the demographic factors affecting consumer purchasing decisions in

Kenya’s motor vehicle industry.

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1.5 Significance of the Study

1.5.1 Automotive Companies

The study is important in order to provide information to automotive Companies in Kenya

especially when it comes to selling their automotive products; this automatically taps into

their strategic goals.

1.5.2 Consumers

This study will also be beneficial to the consumers in that they will have more knowledge

about motor vehicle products and the importance of motor vehicles, they will also learn

about the different factors affecting their buying decisions.

1.5.3 Researchers and Academicians

This study will also be helpful to other researches and academic institutions to learn about

Kenya’s motor industry. This study will also be the centre piece idea to other students

willing to pursue a research on a similar field. This is so because the final draft of the

completed research will provide further areas of research.

1.6 Scope of the Study

The study was conducted on consumer buying behaviour of motor vehciles in Kenya. This

study was based on Toyota Kenya customers in Nairobi Kenya. It included a target market

of people ranging from ages 19 – 60 who have disposable income to spend on motor

vehciles, it targeted both walk in clients and existing clients.

The study was conducted in October 2014 to April 2015, and was limited to the activities of

this year. The limitations of the study was the fear of ananymity on the side of the

respondents. This was however eliminated by the assurance that the study was for academic

purposes and that the findings was not to be shared to any other party.

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1.7 Definition of Terms

1.7.1 Consumer buyer behavior

This refers to the multi-step decision-making process people engage in and the actions they

take to satisfy their needs and wants in the marketplace (Kotler, 2008).

1.7.2 Economic Factors

According to Brassington (2011), economic factors include among others; the level of

income, credit availability, attitude towards spending, liquid assets.

1.7.3 Socio cultural factors

Social cultural factors include a number of factors that characterize the relationships and

activities of a group of people within a particular set environment (Jones, 2007).

1.7.4 Psychological factors

The term psychosocial refers to the psychological and social factors that influence mental

health (Smith, 2009).

1.7.5 Demographic Factors

This includes age, occupation, family size and family life cycle and sex of the individual

(Kotler, 2008).

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1.8 Chapter Summary

This chapter provides a background of the problem followed by the statement of the

problem. Thereafter, research objectives are provided, followed by significance of the study

in that order. Chapter two will provide literature review organized in terms of the research

objectives. In chapter three, research design, methodology, as well as the data type and the

data collection instruments are explained. Chapter four will provide the study findings in

terms of descriptive and logic regression results based on the study objectives. Chapter five

will provide the summary as well as conclusions and recommendations.

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CHAPTER TWO

2.0 LITERATURE REVIEW

2.1 Introduction

In this chapter, literature is reviewed based on research objectives. To start with, reviewed

relevant literature relating to the economic factors affecting consumer purchasing decisions

in Kenya’s motor vehicle industry then the psychological factors affecting consumer

purchasing decisions in Kenya’s motor vehicle industry as well as the social-cultural factors

affecting consumer purchasing decisions in Kenya’s motor vehicle industry and finally the

demographic factors affecting consumer purchasing decisions in Kenya’s motor vehicle

industry.

2.2 Economic Factors Affecting Consumer Purchasing Decisions

2.2.1 Level of Income

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 (2011) 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 (2009) 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

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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, 2011). For example, a study conducted by Nagai, Fukuda, Okada, and

Hashino (2013) revealed that two- and four-wheeled vehicle ownership in Thailand depends

largely on the income levels of individuals.

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 ones 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 posses 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

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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).

2.2.2 Interest Rates

Interest rates are among one of the most influential factors when it comes to purchasing

decision for consumers. This is mainly because financial contracts for consumer durables are

mainly made up of multiple terms and conditions that include a price (interest rate) as well

as a payment period, which therefore makes it unlikely that the financial costs of different

contracts are exactly the same. Dasgupta, Siddart & Silva-Risso (2009) carried out an

analysis of the behaviour of consumers with regards to the choice of the funding method for

automobiles (Banerjee, 2010).

They were able to compare the credit and leasing options. This study revealed that

consumers are very myopic and will therefore prefer contracts that come with lower

payment streams, even when they have higher total costs. They also established that indeed

most consumers are more likely to lease than to finance cars with higher maintenance costs.

This is simply because these options provide consumers with the option to return the car

before maintenance costs become too high. Wonder et al., (2009) on the other hand opined

that respondents preferred low interest rates, a high rebate, and down payment. This view is

contrary to that held by Doyle (2007) who argues that an interest rate increase is likely not

affect real motor vehicle sales if the automakers are able to counteract the rate increases with

lower prices.

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2.2.3 Fuel Prices

McManus (2009) conducted a study to examine the link between fuel prices and sales of

cars and trucks in the U.S. In the analysis, He was able to show that economic theory

predicts a direct link between fuel prices and SUV sales, and more broadly between fuel

prices and vehicle sales. He therefore concluded that for an individual to make a rational

choice at the time of purchase, the shopper requires a prediction (simple or sophisticated) of

what future fuel prices are likely to be. He 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.

2.2.4 Price of the Car

Pricing is considered to be one among the four P's of the marketing mix (Brassington, 2011).

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 (or percentage) to the retailers cost. This simply involves charging the amount

suggested by the manufacturer and usually printed on the product by the manufacturer

(Jones, 2007).

A well-chosen price needs to be able to achieve the financial goals of the company such as

profitability. It should also fit the realities of the marketplace while at the same time support

a product's positioning and be consistent with the other variables in the marketing mix. Price

is largely influenced by the type of distribution channel used, the type of promotions used,

and the quality of the product. Price therefore needs to be relatively high if costs incurred are

high, distribution will without doubt be exclusive, and the product is supported by extensive

13

advertising and promotional campaigns. In this regard therefore a low price can be a viable

substitute for product quality, effective promotions, or an energetic selling effort by retailers

(Jobber, 2010).

In Turkey, Alper & Mumcu (2009) carried out an estimate on the demand for new

automobiles using quarterly data on price, quantity, quality, country of origin, and product

characteristics of the new automobile sales market demand during the period 1996-1999. He

therefore established that the demand for new automobiles is price inelastic in the short run.

Similarly, Zhan & Vrkljan (2013) in South-Western Ontario carried out a study on the older

drivers’ (70-90 years old) perceptions of vehicle safety and how they influence their vehicle

purchase.

The findings revealed that safety was superseded by other purchasing considerations - most

notably, price. Price was therefore identified and emphasized as the key factor that

influenced vehicle purchase decisions. Fuel efficiency, which participants considered in

their overall cost of the vehicle, was also listed as an important consideration in the vehicle

purchase decision process.

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 associations 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, 2009). 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.

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2.3 Psychological Factors Affecting Consumer Purchasing Decisions

2.3.1 Perception

Perception is regarded to be the energy that simply makes us aware of the world around us

and also goes ahead to attach a meaning to it after a sensing process. Human beings in

particular are able to view their surroundings differently. This is because different people

have the different ideas about a specific event. It means therefore that no one can see or feel

the 100% of all things. Ever wonder why people buy certain products? It is all about

perception. Perception is considered to be how consumers understand the world around them

on the basis of the information they receive through their senses. In response to stimuli,

consumers are likely to subconsciously evaluate their needs, values and expectations, and

then they use that evaluation to select, organize and interpret the stimuli (Connolly, 2010).

The marketplace’s perception of a brand or industry is considered to be very essential which

is why big brands work so hard to ensure that the general perception surrounding them and

their industry is as positive as possible. As a result, companies like Gillette, will pay David

Beckham to ‘model’ their products. By aligning the way people feel about Beckham, with

the Gillette brand, Gillette can improve the perception of their brand or reinforce what’s

already positive about it (Taylor, 2006).

A study carried out by Hawkins & Mothersbaugh (2010) was able to show that perception

begins with consumers’ exposure and attention to marketing stimuli and thereafter ends with

their interpretation of the stimuli. Etzel, Walker & Stanton (2014), on their side believe that

consumers’ perception is not only determined by the characteristics of the stimuli, but it is

also determined by the characteristics of the consumer him or herself. It is therefore

important for that marketers obtain a thorough understanding of their target markets as well

as how consumers will perceive various marketing-related stimuli.

For example, Etzel et al., (2007) argues that the four elements of the marketing mix, namely

product, place, distribution and promotion, are likely to influence consumers’ perceptions of

15

the business, and therefore their selection. Manning & Reece (2007) also opines that

customers are likely to perceive the product’s value on the basis of its benefits which, in

turn, is greatly influenced by the product’s performance, features, quality, warranties,

packaging as well as labelling.

2.3.1.1 Perceived Quality

In Kenyan markets, customers look for product quality and features that will satisfy their

needs. For example a vehicle is no longer seen to be just a means of transport but has to

emphasis on safety, durability, among other features like space, seating capacity, 4WD or

engine power and reliability among other features. The massive literature has emphasized

on actual quality and this has gone further to conspire against what we describe as the

neglected frontier of quality: an outside-in perspective driven through the customer-centric

perception of quality by intrinsically dealing with the voice of the customer. The perception

of the consumer regarding quality of products has its own distinct definition and form of

measurement. It therefore goes a long way to touch on subjectivity, and is the level of

perceived value reported by the customer who benefits from a process or its outcome

(Cronin & Taylor, 2012).

Perceived quality is in the mind of the believer, and is a poor offspring because our methods

of today are all focusing attention on the business and not to the customer outside of the

business. Perceived product quality is therefore considered to be one of the most important

constructs in marketing. In recent years, for example perceived quality has been seen to be

the subject of considerable interest by both practitioners and researchers, mainly in services

marketing (Cronin & Taylor, 2012). However, work that integrates the role of perceived

product quality within the context of other marketing variables like product involvement,

consumer satisfaction and purchase intentions has received less attention.

Indeed, the belief that high perceived quality leads to repeated purchases is the bedrock of

any business. It means therefore that it is important to achieve perceptions of quality

however this requires the quality claim to have substance. It also means that it is important

to generate an understanding of what quality means to customer segments, as well as a

16

supportive culture and a quality improvement process that will enable the organization to

deliver quality products and service (Gronmo, 2013).

Additionally the creation of a quality product or service is only a partial victory; perceptions

must be created as well. Perceived quality may differ from actual quality for a variety of

reasons. First, consumers may be overly influenced by a previous image of poor quality.

Because of this, they may not believe new claims, or they may not be willing to take the

time to verify them. Thus it is critical to protect a brand from gaining a reputation for

shoddy quality from which recovery is difficult and sometimes impossible (Parasuraman,

Zeithaml & Berry, 2009).

Second, a firm may be achieving quality on a dimension that consumers do not consider

important. For example when Citibank dramatically increased back-office efficiency by

automating its processing activities, the expected impact on customer evaluations was

disappointing. Customers, it turned out, either did not notice the changes or did not

recognize any benefit from them. There is a need to make sure that investments in quality

occur in areas that will resonate with customers (Parasuraman et al., 2009).

Third, consumers will in very few circumstances have all the information required to make a

rational and objective judgment on quality and even if they do have such information, they

may not be having the time and motivation to process it. In the end such consumers rely on

one or two cues that they associate with quality; the key to influencing perceived quality is

the mere understanding and managing these cues properly. Thus, it is important to

understand the little things that consumers use as the basis for making a judgment of quality

(Parasuraman et al., 2009).

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

17

judged by its corresponding tangibles, reliability, competence, responsiveness and empathy

(Aaker, 1991). 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

(Papadopoulos et al., 2011).

2.3.2 Learning

Learning is mainly associated with changes in an individual’s behavior that come about

from experience. In every circumstance an individual’s perception is conditioned by his or

her prior experience, for it is this which constitutes our preparatory set or expectations and

the framework into which we seek to place and organize new stimuli. In other words, we

have learned from our earlier experience and seek to maintain balance or consistency by

relating to and interpreting new stimuli in terms of past or learned stimuli (Blythe, 2008).

The most important part about this is that marketers can build demand for a product by

associating it with strong drives, using motivating cues, and to the same drives as

competitors and providing similar cues because buyers are more likely to transfer loyalty to

similar brands then to dissimilar ones (Lamb, 2010).

Learning can take two forms: Experiential Learning and Conceptual learning. Experiential

learning occurs when an experience changes your behavior. Conceptual learning on the

other hand is not acquired through direct experience.

2.3.3 Related Utilities

Enjoys related utilities are considered to be having a relationship with practical and effective

sides and are therefore not based on objective sides of products (Samuel, 2014). Usually

consumers are seen to achieve enjoys related utilities that include entertainment, exploration,

as well as self-expression. Buying enjoys on the other hand are made up of consumer’s

personality traits that they strive to enjoyable buying and experience more buying enjoys.

Entertainment enjoys are important for peoples who enjoy from buying, and they achieve

18

buying related extra advantage with lower price. Therefore these efforts lead to increasing

people’s utilities.

On the other hand exploration utility is related to characteristics such as innovation, Variety

seeking, and impulsiveness (Ailawadi et al., 2011). Innovative consumers may have

desirable tendency to products drives, so these efforts could motivate them to achieving

novel products.

Ailawadi et al., (2011) believes that there are impacts of information exploring in

consumer’s reaction to price discounts could characterize as perceived explored profits. It

means that such consumers are exploring resources when products buying help consumers to

satisfy their main needs about diversity information or innovation.

2.4 Social-Cultural Factors Affecting Consumer Purchasing Decisions

Consumer decisions are likely to be influenced by a number of socio-cultural factors. This

section presents a detailed literature review of how these factors come into play in light of

the consumer buying decisions.

Hofstede (1980) demonstrates that there are national and regional cultural groupings that

affect the behavior of organizations. Hofstede looked for national differences between over

100,000 of IBM's employees in different parts of the world, in an attempt to find aspects of

culture that might influence business behavior.

Hofstede identified five dimensions of culture in his study of national influences: Power

distance; the degree to which a society expects there to be differences in the levels of power.

A high score suggests that there is an expectation that some individuals wield larger

amounts of power than others. A low score reflects the view that all people should have

equal rights (Hofstede, 1980).

19

Uncertainty avoidance: reflects the extent to which a society accepts uncertainty and risk.

Individualism vs. collectivism; individualism is contrasted with collectivism, and refers to

the extent to which people are expected to stand up for themselves, or alternatively act

predominantly as a member of the group or organization. However, recent researches have

shown that high individualism may not necessarily mean low collectivism, and vice versa.

Research indicates that the two concepts are actually unrelated. Some people and cultures

might have both high individualism and high collectivism, for example. Someone who

highly values duty to his or her group does not necessarily give a low priority to personal

freedom and self-sufficiency (Hofstede, 1980).

Masculinity vs. Femininity; refers to the value placed on traditionally male or female values

(Hofstede, 1980). Male values for example include competitiveness, assertiveness, ambition,

and the accumulation of wealth and material possessions. This area will look at the external

factors that contribute to an organizations’ corporate culture. This can be influenced by the

industry, competition among other (Hofstede, 1980).

Culture is part of the external influences that impact the consumer. That is, culture

represents influences that are imposed on the consumer by other individuals. The definition

of culture offered in one textbook is “That complex whole which includes knowledge,

belief, art, morals, custom, and any other capabilities and habits acquired by man person as a

member of society (Kileba, 2011). Culture is the complex of values, ideas, attitudes and

other meaningful symbols that allows human to communicate, interpret and evaluate as

members of society (Blackwell et al., 2011).

It is the primary reason behind a person’s wants and behavior. Although, different societal

groups have their own culture that affects consumers buying behavior, the extent to which it

influences the behavior might vary from country to country. Each cultural group can be

divided into groups consisting of people with common life experiences and situations, also

known as subcultures (Kotler et al., 2005) such as nationality, racial groups, religion, and

geographical areas. The third cultural factor is social class, which is constituted of other

variables: occupation, income, education, and wealth (Blackwell et al., 2011).

20

The knowledge and belief are important parts of culture, in Kenya it is a common believe

that person with quick learning ability and sharp brain will do better in study, similarly

hardworking and a skilled guy will be successful while, in most of the developing countries

Kenya included luck is believed as important as hard work. The culture varies with region

and religion. Every culture has smaller groups with shared values and beliefs due to

common life experience and situations. These groups are very important to marketers since

many of these subcultures make up important market segment (Kotler et al., 2011). Every

society in Kenya has some form of social class structure; this class system is different for

every country in point of distribution and ratio.

Brands are also considered to be symbols used to convey meanings to consumers, some

brands for instance Mercedes Benz convey meanings of prestige and quality. On the

contrary, there are also brands that convey meanings relating to low price such as Virgin

Airlines. It means therefore that brands help consumers to minimize and provide a sense of

familiarity, which further reduces the purchasing risk involved (Lehmenn & Winer, 2007)

an aspect that appeals to consumers who poses high uncertainty avoidance.

A study by Bao, Zhou & Su (2013) revealed that indeed the Chinese were less brand

conscious despite being a culture that places high emphasis on ‘saving face’ according to

Hofstede’s (2001) scores.

A study by Mitchell and Walsh (2014) compared the decision-making styles of male and

female shoppers in Germany. The study confirmed the construct validity of all eight CSI

factors for female shoppers as well as four of the factors for male shoppers. They therefore

came to a conclusion that indeed male individuals are slightly less likely to be perfectionists,

somewhat less novelty and therefore fashion conscious, and further less likely to be

confused when it comes to making purchases as compared to their female counterparts.

21

Bakewell & Mitchell (2006) carried out a similar study in the UK, where he made use of a

sample of 480 male and female undergraduate students, which he established that indeed

nine decision-making styles were common to both genders. Additionally, three new male

traits (store-loyal/low-price seeking, confused time-restricted and store-promiscuity) and

three new female traits (bargain seeking, imperfectionism and store loyal) were also

identified in their study.

Hanzaee & Aghasibeig (2008) in a study on the Iranian setting established that Generation Y

male and female consumers are different in their decision-making styles. However, of the

10-factor solution, it was confirmed for males and 11-factor solution for females, nine

factors were seen to be common to both genders. The authors therefore concluded that this

similarity is as a result of the changing gender roles in modern Iran.

2.4.1 Religion

Regarding religion, Clement & Nyovani (2014) study revealed that religion was associated

with choice of consumer products. The study revealed that Christians in Zimbabwe were

significantly using different products than those from other religions. Although from the

foregoing discussion religion was found to choice of consumer products and services, it was

not clear how the inference was arrived at. Religion will be considered in the current study

as a variable. The aim is to examine how different religious background affects the choice of

motor vehicles.

In the study by Clements & Nyovani (2014), various factors including religion, educational

level, age and residential areas had significant effects on the consumer choice of products

and services. In the current study, these variables were considered among other

demographic, socio-economic and facility factors to examine their effect on the choice of

motor vehicles. Unlike Clements & Nyovani (2014), who based their analysis on secondary

data, the current study will use primary data. Similarly, as a departure from Clements &

Nyovani (2014), a theoretical model will be developed in the current study.

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2.4.2 Family

Previous research on corporate culture has showed that the element of family has a

relationship with consumer choice. Van der Post et al., (1998) examined the relationship

between family and consumer choice in South Africa. The results showed that family has a

positive relationship with the consumer choice of certain products and service. The results of

the study also showed that individuals are more likely to purchase goods and services based

on how they have been brought up. This means that their family backgrounds have dictated

their purchase decisions (Rashid, Sambasivan & Johari, 2013).

A research by Denison (2009) revealed that the strength of the culture was predictive of

short-term individual purchase decisions. Gordon & DiTomaso (1992) in a follow-up study

found supporting evidence that a strong family tie was predictive of an individual’s purchase

behaviour. In an attempt to replicate Denison’s (2009) study, they also defined cultural

strength using the inverse of standard deviations across the scales in their instrument. They

found that a strong family tie, regardless of content in which a substantive value was placed

on adaptability, was associated with consumer choice, at least in the preceding three years.

More importantly, they found that adaptability to changes in purchase decisions was also

predictive of family links

2.5 Demographic Factors Affecting Consumer Purchasing Decisions

Apart from external situational contexts that affect consumer choices, there are a number of

essential internal factors, which are recognized as influential to buying behavior. Among

these internal factors are consumers’ demographic characteristics that include age, gender,

marital status, occupation, education as well as income. Demography can be described as the

vital and measurable statistics of a population, demographics helps to locate target market,

they are easier to measure and are suitable for psychographic and socio-cultural studies.

23

Demographic variables go a long way to reveal ongoing trends that include a shift in age,

gender and income distribution that signal business opportunities. The demographic factors

are seen to have a huge impact when it comes to the assessment of different features which

are generally associated with clothes. Consumers who belong to a higher social class are

likely to prefer a certain type of vehicles which they would feel would cater their needs.

Similarly the purchasing decisions of such consumers would also be depending on the age

group. The features younger consumers are most likely to look for in cars may not be the

same with older consumers. Other demographic variables include income, education and

occupation.

2.5.1 Gender Differences

According to nature: the past, present, and paradisal future of consumer gender identity by

(Kacen, 2010), consumption has always been gendered. Most of the available products in

the market these days do have a specific gender type, some are made with masculine

features while some are made with feminine features. Products’ gender are therefore created

and sustained by marketers for example; princess phones, Barbie dolls.

Research suggests that shopping is a more exciting activity for women with respect to men.

Female consumers feel more independent when they do shopping in accordance with men.

Another point that men and women present differentiation is women consider shopping is a

social need whereas male consumers pay importance to main function of a product instead

of secondary function. Gender has an important role in consumer behavior, this for the

reason that there are differences between men and women about expectation, want, need,

life-style etc. reflect to their consumption behaviour (Akturan, 2009).

Davis & Rigaux (2009) established that women were are always dominant during the

problem recognition and information search stage for “traditional” female products that

include home furnishing, appliances, cereals among others. On the other hand men were

seen to be more dominant in the information search stage for male dominated products like

automobiles, television sets, razors, among other. Gender has therefore been identified as a

24

factor that largely influence information search as well as other meaningful consumer

behavior constructs (Putrevu, 2011).

Men are also known to have a tendency of going to the most salient cue while women in

most cases tend to comprehend all information available (Ailawadi et al., 2011).

Additionally women are seen to more subjective, intuitive, comprehensive, as well as

relational processing while men on the other hand are viewed as being more logical,

analytical, selective as well as item-specific processing.

It means therefore that males’ selectivity and item-specificity predict that they may search

less comprehensively than females and focus on certain information sources and topics.

When it comes to decision making women use other people’s opinions to help make their

own decision while men use other people’s decisions to help them form their own opinion.

According to the French study done on more than 700 adults (Helga, Karen, & Rosie, 2014)

women were seen to be as much stronger buying involvement than did men, particularly in

terms of emotional involvement whereas men were high on quality and efficiency. Block &

Morwitz (2009) also established that the probability that a purchased product was on a

planned list was higher for females than for males.

2.5.2 Age Differences

Age differences are considered key to purchasing decisions. Many marketers have today

curved themselves a niche in the market place by concentrating on some specific group base

on demographic variables. Marital status has traditionally been the focus of most marketing.

For majority of products and services, age differences continues to be the relevant

consuming unit, marketers are interested in the number of and kinds of household that own

and/or buy certain products, more so, marketers have discovered the benefits of targeting

specific marital status groupings.

Studies have shown that for the elderly, then, habits are more likely to be activated and

relied on (Ailawadi et al., 2011). This therefore means that age can be proxy for the amount

25

of associate reinforcement. Indeed, research indicates that age is associated with reductions

in the individual tendency to generate uncommon free associates and increases in the

tendency to repeat a behavior (Drolet et al., 2007). Aging goes a long way to bring about

certain cognitive deficits that can be related to the increased development of and reliance on

more automatic, habit-driven behavior. Although cognitive and behavioral performances

tend to slow with age, field studies show that the real-world performance of elderly adults is

usually on par with that of young adults.

The development of habits goes a long way to equalize performance. Ironically, then, older

are likely to be wiser despite the fact that older adults expend fewer cognitive resources

because they can rely on habits. Age is a variable that captures many socioeconomic and

individual difference characteristics. Interestingly, despite an average age difference of

nearly 50 years, research shows that elderly and young adults generally agree as to what

habits are “good” versus “bad” (Drolet & Suppes, 2009).

However, it can be argued that there are differences between age groups in terms of the

kinds of habit behaviors reported. For example, compared to young adults, the elderly

emphasize habits related to interpersonal relationships, such as friend behaviors like giving

and helping. This shift in the kind of habits elderly versus young adults report is seen to be

very much consistent with the qualitative shift in how older versus younger adults process

information and make decisions. Specifically, the elderly tend to focus more on personal

experiences and emotion. This qualitative shift appears adaptive for elderly adults.

2.5.3 Changing Life Events

Changing life events are very instrumental to consumer purchasing decisions. This is mainly

because such coping mechanisms and their relationships with goods and services exhibit an

increased propensity for coping mechanisms to change consumer behaviour. The increased

propensity to purchase implies a relationship between coping mechanisms and the need for a

product or service.

26

Further it also means that exploration in the marketing discipline regarding this relationship

is required because coping mechanisms present a trigger, or aroused need, for altered

purchasing behaviour. In this regard therefore the mere understanding how the process is

triggered and the resultant changes in decision making variables would benefit marketing

research in terms of effectiveness and efficiency of sales and communications mechanisms.

It also means that life events change consumer behaviour (Mathur, et al., 2012) and that

many coping mechanisms exhibit similarities with consumer decision-making, it can be

assumed that individuals experiencing life events can undertake a decision-making process.

Nevertheless, how the life event affects the decision-making process is still a topic under

research by a number of scholars and forms the central point of this research. Before life

events and decision-making are discussed in more depth another stream of research, role

transition must be discussed. Role transition has also been found to influence changes in

consumer behaviour. It requires consideration to gain a complete picture of the main area of

interest; life events and changes in consumer behaviour.

2.6 Chapter Summary

This chapter summarizes the literature review in relation to the objectives raised above. The

first section provided literature on how economic factors influence consumer decisions. The

second section explores how psychological factors influence consumer decisions. The third

section explored how socio-cultural factors influence consumer decision and the final

subsection looked at how demographic factors affected consumer buying decision. The next

chapter will look at the research methodology.

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CHAPTER THREE

3.0 RESEARCH METHODOLOGY

3.1 Introduction

This chapter is mainly concerned with the analysis of the research method which was used

in the study. The chapter mainly focused on the study population, sampling design, sampling

techniques, sampling frame, sample as well as the sample size that was used in the study. It

also focused on the data collection methods, research procedures as well as the data analysis

techniques that were employed in the study. Information regarding the presentation of the

findings will also be provided in the chapter.

3.2 Research Design

The study made use of the descriptive research design with the view of getting access to the

data to be analysed. Burns and Bush (2010) describes a descriptive research design to be one

where methods as well as procedures are used to describing variables. Cooper and Schindler

(2001) on the other hand argues that a descriptive study basically investigates these variables

by answering who, what, where, when and how questions.

Sloman (2010) further defines a descriptive analysis as one which involves direct

observation of behaviour in a natural environment and therefore it normally provides a

means to gather baseline rates of the problem behaviour. The dependent variable of the

study was consumer choice, while the independent variables were the economic factors,

physiological factors and the socio-cultural factors.

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3.3 Population and Sampling Design

3.3.1 Population

Population is described as that total collection of elements on which a researcher seeks to

make inferences while conducting the study (Saunders, Lewis and Thornhill, 2009).The

target population in the study was 2,913 Toyota Kenya customers in Nairobi. It was

however not possible to meet all the customers at one place. It meant therefore that the

researcher needed to strategically position himself at a point where he could be able to

interview them.

3.3.2 Sampling Design

3.3.2.1 Sampling Frame

Sampling frame can be defined to be the list of elements where the researcher can actually

pick the actual sample (Cooper & Schindler, 2000). The sample frame is also known as the

working population. The sampling frame in this study included a list of all Toyota Kenya

customers. This information was acquired from the customer relationship managers at the

company headquarters in Nairobi.

3.3.2.2 Sampling Technique

The technique that was selected for this study was simple random sampling technique. This

methodology was considered to be very good for the study. This is because it gives all the

members of a population an equal chance of being selected to participate in the study.

Saunders, Lewis and Thornhill (2003) argues that this technique involves one selecting the

sample at random from the sampling frame. Simple random sampling was mainly focused

on the concept of random selection-a controlled procedure that assures that each population

element is given a known nonzero chance of selection.

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3.3.2.3 Sample Size

Churchill (2003), states that a sample size needs to be adequately and accurately selected so

as to make sure that the sample is indeed a representative of the whole population under

study in order to provide reliable and accurate information needed. The sample size is a

representation of the whole population from which the researcher can indeed make

inferences on the whole population by use of the sample. The sample was therefore selected

in a way that increases reliability and validity. In order to obtain the sample size the

following statistical formula borrowed from Saunders et al. (2003) was used.

n =

2

%%%

e

zqp

Where:

n is the minimum sample size required; p% is the proportion belonging to the specified

category in this case Kenyans using Toyota Kenya products; q% is the proportion not using

Toyota products; z is the z value corresponding to the level of confidence required in this

case 1.96 for a 95% level of confidence, while e% is the margin of error that can be

tolerated. In the study, p and q was assumed to take the value of 0.2 and 0.8, respectively.

n =

2

08.0

96.18.02.0

= 96.04

In order to cater for problems of response rate, 100 respondents were targeted. The

researcher is of the opinion that this size is accommodative enough to give views that could

be generalized to the whole population given that Toyota is known to have a large customer

base.

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3.4 Data Collection Methods

In order to acquire accurate information the study relied mainly on primary sources of data.

This type of data was collected using questionnaires which were formulated by the

researcher on the basis of the research objectives. According to McNabb (2008) a

questionnaire is considered to be the best tool for collecting data in a descriptive design and

when accessibility to the respondents is challenging. The questionnaire was divided in three

main sections, the first section was made up of questions seeking background information of

the respondents. The second part of the questionnaire had questions with regards to the four

research objectives. The questionnaire had both open and closed ended questions, all

designed on a likert scale.

3.5 Research Procedures

The researcher conducted a pilot study to test the reliability and validity of the research.

According to Churchill and Brown (2003), a pilot test helps to test the reliability and validity

of data collection instruments. Since the company headquarters is a security controlled area,

the researcher first sought permission for conducting the study on the company premises or

on its customers. This was of course accompanied with a brief introduction of the aim of the

study and its significance.

The researcher was able to identify the respondents with the help of the Toyota brand

managers whom the researcher sampled and called them to introduce the study and request

their participation in the study. A questionnaire was then delivered and collected back. The

mode of delivery of the questionnaires was either by emails or one on one delivery to the

respondents depending on the respondent’s preference. Questionnaires were thereafter

collected after completion and taken for analysis. In order to ensure a high response rates,

follow ups were made to the respondents, especially to those who were sent questionnaires

via mail.

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3.6 Data Analysis Methods

The collected data was coded and cleaned before being analysed. The study adopted

quantitative methods of data analysis. The study used descriptive statistics such as

frequencies and percentages. This was to enable the researcher reduce, summarize, and

describe quantitative data obtained from empirical evidence. Additionally the study also

used inferential statistics specifically regression analysis. This was analyzed using Statistical

Package for Social Sciences (SPSS) program which is a program that helps interpret data to

understandable format. The analysed data was thereafter presented in form of tables and

figures.

3.7 Chapter Summary

The chapter provides a detailed report on the methodology adopted in the study. It describes

the population under study, sampling technique, sample size and sampling frame. The study

will make use of a descriptive approach and the data was collected using a questionnaire.

The analysis was by use of Statistical Package for social sciences. The next chapter presents

a results and findings of the study.

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CHAPTER FOUR

4.0 RESULTS AND FINDINGS

4.1 Introduction

This chapter presents a summary of findings with regards to the four objectives of the study.

The first subsection presents findings with regards to how economic factors influence

purchasing decisions for motor vehicles, followed by findings on how psychological factors

influence consumers’ decisions to purchase motor vehicles. The third subsection presents

findings with regards to how socio-cultural factors influence consumers’ decisions to

purchase motor vehicles and finally the last subsection presents findings with regards to how

demographic factors influence consumers’ decisions to purchase motor vehicles.

4.2 Background Information

This subsection presents findings with regards to the background information of the

respondents. Specifically on gender, age, level of education and number of years using

Toyota cars.

4.2.1 Gender of the Respondents

Table 4.1 presents findings with regards to the gender of the respondents. As seen in the

table majority of the respondents were female (54 percent), followed by men who were 46

percent. It is interesting to see that women motorists are more than their male counterparts

especially with regards to Toyota motor vehicles. This finding could imply that more

women prefer Toyota cars as compared to their male counterparts.

Table 4.1: Gender of the Respondents

Gender Frequency Percent

Male 46 46.0

Female 54 54.0

Total 100 100.0

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4.2.2 Age of the Respondents

Age is critical to the choice of motor vehicle one purchases and as such it was important for

the study to include it among the variables under study. As seen in table 4.2 majority of the

respondents involved in the study were between the age of 31-35 years (69 percent),

followed by 15 percent who were at the age of 36 years and above thereafter 14 percent of

the respondents between 26-30 years and finally 2 percent between 20-25 years. It is

expected that at the age of 31-35 years most people would be in a position to own a motor

vehicle, and therefore it is not surprising that majority of the respondents were in this age

bracket. It can also be concluded that people at the age of 30 years and above would go for

Toyota cars unlike the younger group of people who would go for speeding car brands such

as Subaru and Mitsubishi.

Table 4.2: Age of the Respondents

Age of Respondents Frequency Percent

Between 20 and 25 Years 2 2

Between 26 and 30 Years 14 14.0

Between 31 and 35 Years 69 69.0

36 Years and Over 15 15.0

Total 100 100.0

4.2.3 Level of Education

Table 4.3 presents findings with regards to the level of education of the respondents. As

presented in the table 66 percent of the respondents had undergraduate qualifications

followed by 16 percent with Masters Degrees and 11 percent with diplomas and only 7

percent with Doctorates. This findings imply that indeed most of the respondents were

equipped with relevant academic qualifications which is likely to have influenced their

choice of motor vehicles.

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Table 4.3: Level of Education

Level of Education Frequency Percent

Diploma 11 11.0

Undergraduate 66 66.0

Masters 16 16.0

Doctorate 7 7.0

Total 100 100.0

4.2.4 Number of Years using Toyota Cars

Table 4.4 reveals that majority of the respondents involved in the study (43 percent), have

used Toyota cars for more than 10 years, followed by 29 percent who have used Toyota cars

between 6-10 years. Additionally 16 percent of the respondents have used Toyota cars for

less than 3 years and finally 12 percent of the respondents between 3-5 years. This finding

confirms the previous finding on the age of the respondents implying that indeed have been

using Toyota cars long enough to understand the benefits and demerits of such cars.

Table 4.4: Number of Years using Toyota Cars

Number of Years using Toyota Cars Frequency Percent

Less than 3 Years 16 16.0

3-5 Years 12 12.0

6-10 Years 29 29.0

More than 10 years 43 43.0

Total 100 100.0

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4.2.5 Cross Tabulations for Gender and Number of Years Using Toyota Cars

In order to test how gender and number of years using Toyota cars relate, table 4.5 shows

that in most cases women have been more loyal to using Toyota cars as compare to their

male counterparts. This findings could implicate that men are always trying out new car

brands and therefore the reason why more women have used Toyota cars for long.

Table 4.5: Cross Tabulations for Gender and Number of Years Using Toyota Cars

Number of Years using Toyota Cars Gender Total

Male Female

Less than 3 Years 9.0% 7.0% 16.0%

3-5 Years 12.0% 12.0%

6-10 Years 14.0% 15.0% 29.0%

More than 10 years 23.0% 20.0% 43.0%

Total 46.0% 54.0% 100.0%

4.2.6 Cross Tabulations for Education and Number of Years Using Toyota Cars

As seen in the table 4.6, it is interesting that as the level of education increases the loyalty to

Toyota cars goes down. This is because most respondents with Masters and Doctorate

Degrees have few years of using Toyota cars as compared to those with Diploma and

Degrees.

Table 4.6: Cross Tabulations for Education and Number of Years Using Toyota Cars

Number of Years using

Toyota Cars

Level of Education Total

Diploma Undergraduate Masters Doctorate

Less than 3 Years 2.0% 7.0% 6.0% 1.0% 16.0%

3-5 Years 1.0% 10.0% 1.0% 12.0%

6-10 Years 3.0% 21.0% 3.0% 2.0% 29.0%

More than 10 years 5.0% 28.0% 6.0% 4.0% 43.0%

Total 11.0% 66.0% 16.0% 7.0% 100.0%

4.2.7 Cross Tabulations for Age and Number of Years Using Toyota Cars

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Table 4.7 reveals that majority of the respondents between 26-30 years had used Toyota cars

for long followed by those at the age between 31-35 years, followed by those with the age

between 20-25 years and finally those above 36 years of age.

Table 4.7: Cross Tabulations for Age and Number of Years Using Toyota Cars

Number of Years using

Toyota Cars

Age Total

Between 20

and 25 Years

Between 26

and 30 Years

Between 31

and 35 Years

36 Years

and Over

Less than 3 Years 4.0% 11.0% 1.0% 16.0%

3-5 Years 10.0% 2.0% 12.0%

6-10 Years 3.0% 22.0% 3.0% 1.0% 29.0%

More than 10 years 8.0% 26.0% 8.0% 1.0% 43.0%

Total 15.0% 69.0% 14.0% 2.0% 100.0%

4.2.8 Correlational Analysis

Table 4.8 shows that there was a positive significant relationship between purchasing

decisions for motor vehicles and economic factors (.606, at the 0.01 level), psychological

factors(.719, at the 0.01 level),, social-cultural factors(.201, at the 0.05 level), as well as

demographic factors(.401, at the 0.01 level).

37

Table 4.8: Correlation Analysis

Economic

Factors

Psychological

Factors

Social-

Cultural

Factors

Demographic

Factors

Purchasing

Decision

Economic

Factors

Pearson

Correlation 1 .468** .326** .293** .606**

Sig. (2-

tailed)

.000 .001 .003 .000

N 100 100 100 100 100

Psychological

Factors

Pearson

Correlation .468** 1 .597** .672** .719**

Sig. (2-

tailed) .000

.000 .000 .000

N 100 100 100 100 100

Social-

Cultural

Factors

Pearson

Correlation .326** .597** 1 .801** .201*

Sig. (2-

tailed) .001 .000

.000 .045

N 100 100 100 100 100

Demographic

Factors

Pearson

Correlation .293** .672** .801** 1 .401**

Sig. (2-

tailed) .003 .000 .000

.000

N 100 100 100 100 100

Purchasing

Decision

Pearson

Correlation .606** .719** .201* .401** 1

Sig. (2-

tailed) .000 .000 .045 .000

N 100 100 100 100 100

**. Correlation is significant at the 0.01 level (2-tailed).

*. Correlation is significant at the 0.05 level (2-tailed).

38

4.3 Economic Factors and Purchasing Decision

The first objective of the study was to determine the economic factors affecting consumer

purchasing decisions in Kenya’s motor vehicle industry. As seen in the table 4.9it is evident

that the following economic factors influence purchasing decision below: Price of the car,

location and accessibility, level of income, the relation between income growth and quality

of car, maintenance costs, the resale value of a car, payment options (such as hire purchase,

lease), the ease of finding a mechanic to repair the specific car brand, low interest rates and

fuel prices influence my choice of motor vehicle.

Table 4.9: Economic Factors

Economic factors S

tro

ngly

dis

agre

e

Dis

agre

e

Neu

tral

Agre

e

Str

on

gly

agre

e

Mean

Price of the car 31.7 35.0 13.3 13.3 3.3 3.74

Location and accessibility 36.7 26.7 16.7 13.3 1.7 3.42

Level of income 25.0 35.0 25.0 10.0 0 3.61

The relation between income growth and

quality of car

23.3 35.0 26.7 5.0 1.7 3.61

Maintenance costs 30.0 35.0 23.3 10.0 1.7 3.51

The resale value of a car 30.0 33.3 26.7 6.7 1.7 3.5

Payment options(such as hire purchase, lease) 18.3 23.3 31.7 13.3 6.7 4.04

The ease of finding a mechanic to repair the

specific car brand

31.7 35.0 13.3 13.3 3.3 3.62

Low interest rates 36.7 26.7 16.7 13.3 1.7 3.55

Fuel prices influence my choice of motor

vehicle

25.0 35.0 25.0 10.0 0 3.61

39

Table 4.10 (a) shows that the R square value of the model was .367 indicating that 36.7

percent of 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.

Table 4.10: Economic Factors and Purchasing Decision

(a) Model Summary

Model R R Square Adjusted R Square Std. Error of the

Estimate

1 .606a .367 .361 1.52790

a. Predictors: (Constant), Economic Factors

(b) ANOVA

Table 4.10 (b) reveals that there was a significant relationship between economic factors and

consumer purchasing decision with the F value of 56.913.

Model Sum of Squares Df Mean Square F Sig.

1

Regression 132.861 1 132.861 56.913 .000b

Residual 228.779 98 2.334

Total 361.640 99

a. Dependent Variable: Purchasing Decision

b. Predictors: (Constant), Economic Factors

40

The coefficients table 4.10 c), shows that there was a positive significant relationship

between economic factors and purchasing decision with a beta of .395 and a T-value of

7.544. This findings imply 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

(c) Coefficients

Model Unstandardized

Coefficients

Standardized

Coefficients

T Sig.

B Std. Error Beta

1

(Constant) 1.723 1.290 1.336 .185

Economic

Factors .395 .317 .606 7.544 .000

a. Dependent Variable: Purchasing Decision

4.4 Psychological Factors and Purchasing Decision

The second objective of the study was to determine the psychological factors affecting

consumer purchasing decisions in Kenya’s motor vehicle industry. Table 4.11 further shows

that indeed the following psychological factors influence the purchasing decisions of motor

vehicles, these include: Perception about the car and brand, motivation from friends and

family on a specific brand, consumer attitude towards the brand of car, innovative of the car

and brand, personal beliefs, knowledge sharing from friends and colleagues, and finally

motivation from friends and family on a specific brand influences my purchase decision for

the motor vehicle.

41

Table 4.11: Psychological factors

Psychological factors Strongly

disagree

Disagree Neutral Agree Strongly

agree

Mean

Perception about the car and

brand

70.1 20.9 5.0 2.0 2.0 3.68

Motivation from friends and

family on a specific brand

60.1 11.9 20.0 8.0 0 3.6

Consumer attitude towards the

brand of car

55.0 35.0 5.0 5.0 0 3.61

Innovative of the car and

brand

72.0 15.0 3.0 5.0 5.0 3.61

Personal beliefs 69.0 24.0 7.0 0 0 3.51

Knowledge sharing from

friends and colleagues

74.0 23.0 3.0 0 0 3.91

Motivation from friends and

family on a specific brand

influences my purchase

decision for the motor vehicle

67.0 23.3 1.7 1.3 7.0 4.08

Table 4.12 (a) shows that the R square value of the model was .516 indicating that 51.6

percent of the consumer purchasing decision is influenced by psychological factors such as

perception, motivation from friends and family, attitude towards the brand, innovative of the

car and brand, personal beliefs as well as knowledge sharing from friends and colleagues.

Table 4.12: Psychological Factors and Purchasing Decision

(a) Model Summary

Model R R Square Adjusted R Square Std. Error of the

Estimate

1 .719a .516 .511 1.33596

a. Predictors: (Constant), Psychological Factors

42

Table 4.12 (b) reveals that there was a significant relationship between psychological factors

and consumer purchasing decision with the F value of 104.624.

(b) ANOVA

Model Sum of Squares df Mean Square F Sig.

1

Regression 186.731 1 186.731 104.624 .000b

Residual 174.909 98 1.785

Total 361.640 99

a. Dependent Variable: Purchasing Decision

b. Predictors: (Constant), Psychological Factors

The coefficients table 4.12 c), shows that there was a positive significant relationship

between psychological factors and purchasing decision with a beta of .911 and a T-value of

10.229. This findings imply that the consumer purchasing decision is influenced by

psychological factors such as perception, motivation from friends and family, attitude

towards the brand, innovative of the car and brand, personal beliefs as well as knowledge

sharing from friends and colleagues.

(c) Coefficients

Model Unstandardized

Coefficients

Standardized

Coefficients

t Sig.

B Std. Error Beta

1

(Constant) 3.356 1.112 3.017 .003

Psychological

Factors .911 .285 .719 10.229 .000

a. Dependent Variable: Purchasing Decision

43

4.5 Social-Cultural Factors and Purchasing Decision

The third objective of the study was to determine the Social-cultural factors affecting

consumer purchasing decisions in Kenya’s motor vehicle industry. Table 4.13 shows that the

following socio-cultural factors influence purchasing decisions of consumers: Different

cultures, shared values, the social class, status in the society, buzz marketing and social

media influences the brand of motor vehicle, reference groups like motor vehicle forums

that form attitudes and behavior like “top gear”, membership groups such as “4X4 enthusiast

groups, aspirational groups, religion as well as the country of origin of the motor vehicle

Table 4.13: Social-cultural factors

Socio cultural factors Strongly

disagree

Disagree Neutral Agree Strongly

agree

Mean

Different cultures 60% 31% 5% 2% 2% 4.25

Shared values 60% 20% 12% 9% 0 4.45

The social class 75% 18% 3% 5% 5% 3.91

Status in the society 65% 28% 7% 0 0 3.15

Buzz marketing and social

media

75% 24% 3.0 0 0 3.62

Reference groups like motor

vehicle forums

62% 29% 1% 2% 7% 4.09

Membership groups such as

“4X4 enthusiast groups:”

60% 43% 7% 0 0 4.11

Aspirational groups 57% 34% 10% 3% 0 4.23

Religion 55% 44% 6% 2% 1% 3.96

The country of origin of the

motor vehicle

58% 42% 6% 0 0 4.19

44

Table 4.14 (a) shows that the R square value of the model was .400 indicating that 40

percent of the consumer purchasing decision is influenced by Social-cultural factors such as

different cultures, shared values, the social class, status in the society, buzz marketing and

social media, reference groups like motor vehicle forums that form attitudes and behavior

like “top gear”, aspirational groups, religion and finally the country of origin.

Table 4.14: Social-Cultural Factors and Purchasing Decision

(a) Model Summary

Model R R Square Adjusted R Square Std. Error of the

Estimate

1 .401a .400 .031 1.88182

a. Predictors: (Constant), Social-Cultural Factors

Table 4.14 (b) reveals that there was a significant relationship between Social-cultural

factors and consumer purchasing decision with the F value of 4.122.

(b) ANOVA

Model Sum of

Squares

df Mean Square F Sig.

1

Regression 14.597 1 14.597 4.122 .004b

Residual 347.043 98 3.541

Total 361.640 99

a. Dependent Variable: Purchasing Decision

b. Predictors: (Constant), Social-Cultural Factors

45

The coefficients table 4.14 c), shows that there was a positive significant relationship

between Social-cultural factors and purchasing decision with a beta of .594 and a T-value of

4.030. This findings imply that the consumer purchasing decision is influenced by Social-

cultural factors such as perception, motivation from friends and family, attitude towards the

brand, innovative of the car and brand, personal beliefs as well as knowledge sharing from

friends and colleagues.

(c) Coefficients

Model Unstandardized

Coefficients

Standardized

Coefficients

t Sig.

B Std. Error Beta

1

(Constant) 3.716 2.089 1.778 .001

Social-Cultural

Factors .594 .588 .401 4.030 .004

a. Dependent Variable: Purchasing Decision

4.6 Demographic Factors and Purchasing Decision

The fourth objective of the study was to determine the demographic factors affecting

consumer purchasing decisions in Kenya’s motor vehicle industry. Table 4.15 shows that the

following factors influence consumer purchase decisions: Personality, gender of consumers,

age of consumers, changing life events, level of education, lifestyle, lifecycle status,

occupation as well as personality.

46

Table 4.15: Demographic Factors

Demographic factors Strongly

disagree

Disagree Neutral Agree Strongly

agree

Mean

Personality 77% 15% 2% 2% 4% 4.15

Gender of consumers 77% 12% 4% 5% 2% 4.01

Age of consumers 66% 18% 4% 5% 7% 3.97

Changing life events 72% 5% 12% 6% 5% 3.99

Level of education 65% 15% 11% 4% 5% 3.86

Lifestyle 78% 12% 2% 4% 4% 4.17

Lifecycle status 68% 15% 4% 3% 10% 3.98

Occupation 81% 8% 2% 4% 5% 4.20

Personality 77% 15% 2% 2% 4% 4.15

Table 4.16 (a) shows that the R square value of the model was .400 indicating that 40

percent of the consumer purchasing decision is influenced by demographic factors such as

personality, gender, Age, Changing life, level of education, lifestyle, lifecycle status and

occupation.

Table 4.16: Demographic Factors and Purchasing Decision

(a)

Model R R Square Adjusted R Square Std. Error of the

Estimate

1 .401a .361 .353 1.75945

a. Predictors: (Constant), Demographic Factors

47

Table 4.16 (b) reveals that there was a significant relationship between demographic factors

and consumer purchasing decision with the F value of 18.822.

(b) ANOVA

Model Sum of

Squares

df Mean Square F Sig.

1

Regression 58.266 1 58.266 18.822 .000b

Residual 303.374 98 3.096

Total 361.640 99

a. Dependent Variable: Purchasing Decision

b. Predictors: (Constant), Demographic Factors

The coefficients table 4.16 c), shows that there was a positive significant relationship

between demographic factors and purchasing decision with a beta of .305 and a T-value of

4.338. This finding implies that the consumer purchasing decision is influenced by

demographic factors such as demographic factors such as personality, gender, Age,

Changing life, level of education, lifestyle, lifecycle status and occupation.

(c) Coefficients

Model Unstandardized

Coefficients

Standardized

Coefficients

t Sig.

B Std. Error Beta

1

(Constant) .577 1.971 .293 .770

Demographic

Factors .305 .508 .301 4.338 .000

a. Dependent Variable: Purchasing Decision

48

Table 4.17 further presents multiple regression results showing that the R square value of the

model was .723 indicating that 72.3 percent of the consumer purchasing decision is

influenced by economic factors, psychological factors, social-cultural factors as well as

demographic factors.

Table 4.17: Multiple Regression

(a)

Model Summary

Model R R Square Adjusted R Square Std. Error of the

Estimate

1 .850a .723 .711 1.02666

a. Predictors: (Constant), Social-Cultural Factors, Economic Factors, Psychological

Factors, Demographic Factors

Table 4.17 (b) reveals that there was a significant relationship between, economic,

psychological, social-cultural as well as demographic factors and consumer purchasing

decision with the F value of 62.026.

(b)

ANOVAa

Model Sum of

Squares

Df Mean Square F Sig.

1

Regression 261.508 4 65.377 62.026 .000b

Residual 100.132 95 1.054

Total 361.640 99

a. Dependent Variable: Purchasing Decision

b. Predictors: (Constant), Social-Cultural Factors, Economic Factors, Psychological

Factors, Demographic Factors

49

The coefficients table 4.17 c), shows that there was a positive significant relationship

between all demographic factors with a beta of .456, economic factors with a beta of .523,

psychological factors with a beta of .779 and finally social-cultural factors with a beta of

.248. This findings imply that the consumer purchasing decision is influenced economic

factors, psychological factors, social-cultural and demographic factors.

(c)

Coefficientsa

Model Unstandardized

Coefficients

Standardized

Coefficients

t Sig.

B Std. Error Beta

1

(Constant) 3.123 1.312 2.381 .019

Demographic

Factors .456 .545 .265 2.674 .009

Economic Factors .523 .243 .385 6.259 .000

Psychological

Factors .779 .321 .686 8.663 .000

Social-Cultural

Factors .248 .545 .546 5.963 .000

a. Dependent Variable: Purchasing Decision

4.7 Chapter Summary

This chapter presented a summary of findings with regards to the four objectives of the

study. The first subsection presented findings with regards to how economic factors

influence purchasing decisions for motor vehicles, followed by findings on how

psychological factors influence consumers’ decisions to purchase motor vehicles. The third

subsection presented findings with regards to how socio-cultural factors influence

consumers’ decisions to purchase motor vehicles and finally the lasts subsection presented

findings with regards to how demographic factors influence consumers’ decisions to

purchase motor vehicles. The next chapter will look at a summary of the findings, as well as

discussions, conclusions and recommendations.

50

CHAPTER FIVE

5.0 DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS

5.1 Introduction

This chapter consists of four sections, namely summary, discussion, conclusions, and

recommendations following that order. The first section provides a summary of the

important elements of the study which includes the study objectives, methodology and the

findings. The second section discusses the major findings of the study with regards to the

specific objectives. The third section discusses the conclusions based on the specific

objectives, while using the findings and results which are obtained in the fourth chapter.

5.2 Summary

The general objective of the study was to examine factors affecting consumer purchasing

decisions in Kenya’s motor vehicle industry. The study was guided by the followed by the

following specific objectives: to determine the economic factors affecting consumer

purchasing decisions in Kenya’s motor vehicle industry; to examine the psychological

factors affecting consumer purchasing decisions in Kenya’s motor vehicle industry; to

examine the social-cultural factors affecting consumer purchasing decisions in Kenya’s

motor vehicle industry, and; to analyze the demographic 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 data was analyzed using descriptive and

inferential statistics with the help of the Statistical Package for Social Sciences (SPSS). The

results were then presented in tables and figures.

51

The study revealed that there was a positive significant relationship between economic

factors and purchasing decision with a beta of .395 and a T-value of 7.544. This findings

imply 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.

The study further revealed there was a positive significant relationship between

psychological factors and purchasing decision with a beta of .911 and a T-value of 10.229.

This findings imply that the consumer purchasing decision is influenced by psychological

factors such as perception, motivation from friends and family, attitude towards the brand,

innovative of the car and brand, personal beliefs as well as knowledge sharing from friends

and colleagues.

It was also revealed that there was a positive significant relationship between Social-cultural

factors and purchasing decision with a beta of .594 and a T-value of 4.030. This findings

imply that the consumer purchasing decision is influenced by Social-cultural factors such as

perception, motivation from friends and family, attitude towards the brand, innovative of the

car and brand, personal beliefs as well as knowledge sharing from friends and colleagues.

Finally the study revealed that there was a positive significant relationship between

demographic factors and purchasing decision with a beta of .305 and a T-value of 4.338.

This findings imply that the consumer purchasing decision is influenced by demographic

factors such as demographic factors such as personality, gender, Age, Changing life, level of

education, lifestyle, lifecycle status and occupation.

52

5.3 Discussion

5.3.1 Economic Factors influencing Consumer Purchase Decision

The study revealed that there was a positive significant relationship between economic

factors and purchasing decision with a beta of .395 and a T-value of 7.544. This findings

imply 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.

The study affirms that indeed 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 (2011) 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.

The findings agree with Mogridge (2009) 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, and Zeng, 2011).

53

The findings also agree with Dasgupta et al., (2009) who carried out an analysis of the

behaviour of consumers with regards to the choice of the funding method for automobiles

(Banerjee, 2010). They were able to compare the credit and leasing options. This study

revealed that consumers are very myopic and will therefore prefer contracts that come with

lower payment streams, even when they have higher total costs. They also established that

indeed most consumers are more likely to lease than to finance cars with higher maintenance

costs. This is simply because these options provide consumers with the option to return the

car before maintenance costs become too high. Wonder et al., (2009) on the other hand

opined that respondents preferred low interest rates, a high rebate, and down payment. This

view is contrary to that held by Doyle (2007) who argues that an interest rate increase is

likely not affect real motor vehicle sales if the automakers are able to counteract the rate

increases with lower prices.

5.3.2 Psychological Factors influencing Consumer Purchase Decision

The study further revealed there was a positive significant relationship between

psychological factors and purchasing decision with a beta of .911 and a T-value of 10.229.

This findings imply that the consumer purchasing decision is influenced by psychological

factors such as perception, motivation from friends and family, attitude towards the brand,

innovative of the car and brand, personal beliefs as well as knowledge sharing from friends

and colleagues.

The findings agree with a study by carried out by Hawkins & Mothersbaugh (2010) who

were able to show that perception begins with consumers’ exposure and attention to

marketing stimuli and thereafter ends with their interpretation of the stimuli. Etzel et al.,

(2014), on their side believe that consumers’ perception is not only determined by the

characteristics of the stimuli, but it is also determined by the characteristics of the consumer

him or herself. It is therefore important for that marketers obtain a thorough understanding

of their target markets as well as how consumers will perceive various marketing-related

stimuli.

54

The findings also affirm that 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, 1991). 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 (Papadopoulos et al., 2011).

Finally the findings affirm that indeed people have attitudes regarding religion, politics,

clothes, music, food, etc. Attitude of consumer also influences the consumer behavior. If

consumer’s attitude towards a product is favorable, then it will have positive effect on

consumer behavior. The marketers discover prevailing attitude towards their product and try

to make it positive, and if it is already positive, then try to maintain it (Hoyer & Deborah,

2008).

5.3.3 Social-Cultural Factors influencing Consumer Purchase Decision

It was also revealed that there was a positive significant relationship between Social-cultural

factors and purchasing decision with a beta of .594 and a T-value of 4.030. This findings

imply that the consumer purchasing decision is influenced by Social-cultural factors such as

perception, motivation from friends and family, attitude towards the brand, innovative of the

car and brand, personal beliefs as well as knowledge sharing from friends and colleagues.

55

The study findings show that indeed brands are also considered to be symbols used to

convey meanings to consumers, some brands for instance Mercedes Benz convey meanings

of prestige and quality. On the contrary, there are also brands that convey meanings relating

to low price such as Virgin Airlines. It means therefore that brands help consumers to

minimize and provide a sense of familiarity, which further reduces the purchasing risk

involved (Lehmenn & Winer, 2007) an aspect that appeals to consumers who poses high

uncertainty avoidance.

The findings also agree with a study by Clement & Nyovani (2014) which revealed that

religion was associated with choice of consumer products. The study revealed that

Christians in Zimbabwe were significantly using different products than those from other

religions. Although from the foregoing discussion religion was found to choice of consumer

products and services, it was not clear how the inference was arrived at. Religion will be

considered in the current study as a variable. The aim is to examine how different religious

background affects the choice of motor vehicles.

The findings are also in line with a study by Bakewell & Mitchell (2006) carried out a

similar study in the UK, where he made use of a sample of 480 male and female

undergraduate students, which he established that indeed nine decision-making styles were

common to both genders. Additionally, three new male traits (store-loyal/low-price seeking,

confused time-restricted and store-promiscuity) and three new female traits (bargain

seeking, imperfectionism and store loyal) were also identified in their study.

Finally the findings align with Van der Post et al., (2008) who examined the relationship

between family and consumer choice in South Africa. The results showed that family has a

positive relationship with the consumer choice of certain products and service. The results of

the study also showed that individuals are more likely to purchase goods and services based

on how they have been brought up. This means that their family backgrounds have dictated

their purchase decisions (Rashid et al., 2013).

56

5.3.4 Demographic Factors influencing Consumer Purchase Decision

Finally the study revealed that there was a positive significant relationship between

demographic factors and purchasing decision with a beta of .305 and a T-value of 4338. This

findings imply that the consumer purchasing decision is influenced by demographic factors

such as demographic factors such as personality, gender, Age, Changing life, level of

education, lifestyle, lifecycle status and occupation.

This findings affirm that the past, present, and paradisal future of consumer gender identity

by (Kacen, 2010), consumption has always been gendered. Most of the available products in

the market these days do have a specific gender type, some are made with masculine

features while some are made with feminine features. Products’ gender are therefore created

and sustained by marketers for example; princess phones, Barbie dolls. Research suggests

that shopping is a more exciting activity for women with respect to men. Female consumers

feel more independent when they do shopping in accordance with men. Another point that

men and women present differentiation is women consider shopping is a social need

whereas male consumers pay importance to main function of a product instead of secondary

function. Gender has an important role in consumer behavior, this for the reason that there

are differences between men and women about expectation, want, need, life-style etc. reflect

to their consumption behaviour (Akturan, 2009).

The findings also affirm that for the elderly, then, habits are more likely to be activated and

relied on (Ailawadi et al., 2011). This therefore means that age can be proxy for the amount

of associate reinforcement. Indeed, research indicates that age is associated with reductions

in the individual tendency to generate uncommon free associates and increases in the

tendency to repeat a behavior (Drolet et al., 2007). Aging goes a long way to bring about

certain cognitive deficits that can be related to the increased development of and reliance on

more automatic, habit-driven behavior. Although cognitive and behavioral performances

57

tend to slow with age, field studies show that the real-world performance of elderly adults is

usually on par with that of young adults.

Finally the findings show that exploration in the marketing discipline regarding this

relationship is required because coping mechanisms present a trigger, or aroused need, for

altered purchasing behaviour. In this regard therefore the mere understanding how the

process is triggered and the resultant changes in decision making variables would benefit

marketing research in terms of effectiveness and efficiency of sales and communications

mechanisms. It also means that life events change consumer behaviour (Mathur et al., 2012)

and that many coping mechanisms exhibit similarities with consumer decision-making, it

can be assumed that individuals experiencing life events can undertake a decision-making

process.

5.4 Conclusions

5.4.1 Economic Factors influencing Consumer Purchase Decision

This findings lead to a conclusion 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.

5.4.2 Psychological Factors influencing Consumer Purchase Decision

This findings also lead to a conclusion that the consumer purchasing decision is influenced

by psychological factors such as perception, motivation from friends and family, attitude

towards the brand, innovative of the car and brand, personal beliefs as well as knowledge

sharing from friends and colleagues.

58

5.4.3 Social-Cultural Factors influencing Consumer Purchase Decision

This study concludes that the consumer purchasing decision is influenced by Social-cultural

factors such as perception, motivation from friends and family, attitude towards the brand,

innovative of the car and brand, personal beliefs as well as knowledge sharing from friends

and colleagues.

5.4.4 Demographic Factors influencing Consumer Purchase Decision

Finally the study concludes that there was a positive significant relationship between

demographic factors and purchasing decision. This findings imply that the consumer

purchasing decision is influenced by demographic factors such as demographic factors such

as personality, gender, Age, Changing life, level of education, lifestyle, lifecycle status and

occupation.

5.5 Recommendations

5.5.1 Recommendations for Improvement

5.5.1.1 Economic Factors influencing Consumer Purchase Decision

The study recommends that firms dealing with motor vehicle need to consider the various

economic factors that influence consumer decision making such as interest rates, income as

well as rising fuel prices. In this regard they need to design motor vehicle for different

categories of customers in different income brackets in Kenya. They should also come up

with payment modes that are friendly to the consumer for instance payments through

installments as well as car financing to clients. Price segmentation would also be key in

enhancing consumers attraction and retention.

59

5.5.1.2 Psychological Factors influencing Consumer Purchase Decision

Study acknowledges that each human being in the world sees his/her surroundings

differently. Several people have the same ideas about a specific event. As such, automobile

companies need to evaluate consumer their needs, values and expectations, when they are

designing automobiles meant for the Kenyan market. This can be enhanced when the

company achieves quality on a dimension that consumers consider to be important. There is

a need to make sure that investments in quality occur in areas that will resonate with

customers. Finally it is it is important to understand the little things that consumers use as

the basis for making a judgment of when it comes to purchasing decisions.

5.5.1.3 Social-Cultural Factors influencing Consumer Purchase Decision

The study has acknowledged that consumer decisions are likely to be influenced by a

number of socio-cultural factors. In this sense brands are also considered to be symbols used

to convey meanings to consumers. The study therefore recommends the need for automobile

companies to consider social cultural factors when designing some of their products into the

market. This is especially so for consumers who have deep roots in their culture and will

therefore go for nothing less than what conforms to their cultural practices.

5.5.1.4 Demographic Factors influencing Consumer Purchase Decision

The study recommends the need for automobile companies to consider consumers’

demographic characteristics such as age, gender, marital status, occupation, education and

income when designing the products to offer into the Kenyan market. This is because

demography factors are vital and measurable statistics of a population that s helps to locate

target market, they are easier to measure and are suitable for psychographic and socio-

cultural studies. Additionally demographic factors have a huge impact on the assessment of

different features which are generally associated with consumer behaviour.

60

5.5.2 Recommendations for Further Studies

The study recommends for additional studies on this area of study since the motor vehicle

industry is one of the fastest growing industries in Kenya. Additionally it is important for

other researchers to consider carrying out longitudinal studies in this particular area since the

present research was merely cross-sectional. Finally it will be interesting to examine how

the various factors examined in this particular study affect consumer purchasing decisions in

other automobile brands such as Nissan, Mitsubishi, Mercedes Benz, Land Rovers,

Volkswagen, Isuzu and many others.

61

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Appendix 1: Questionnaire

Section A: Background Information

Kindly, fill all the questions either by ticking () in the boxes or writing in the spaces

provided.

NAME (Optional) ……………………………………………………

1. Gender? Male ( ) Female ( )

2. Age? (years)

20-25 years 26-30 years 31-35 years 36 years and over

3. Level of education?

1. Primary 5. Masters

2. Secondary 6. Doctorate

3. Diploma 7. Others

4. Undergraduate

4. Occupation?

……………………………………………………….

5. For how long have you been using Toyota cars?

Less than 3 years 3-5 years

6-10 years More than 10 years

Section B: The economic factors affecting consumer purchasing decisions in Kenya’s

motor vehicle industry

Kindly tick as appropriate in the spaces provided the extent to which you think the following

factors influence consumer choice.

.

The following economic factors influences my

decision to purchase motor vehicles

Strongly

disagree

Dis

agree

Neut

ral

Agree Strongly

agree

I always go for a renowned brand of car

regardless of price 1 2 3 4 5

I am influenced to buy a car based on the

location and accessibility 1 2 3 4 5

My level of income is a critical factor

influencing my decision on the car to purchase 1 2 3 4 5

Price is a determining factor on the choice of car

I’d buy 1 2 3 4 5

The relation between income growth and quality

of car is a fundamental issue in purchasing

decision.

1 2 3 4 5

66

One’s level of income influences the willingness

to pay marginally higher prices as a social

responsibility towards the motor vehicle

1 2 3 4 5

Maintenance costs influence my decision of the

motor vehicle to select to purchase 1 2 3 4 5

The resale value of a car is critical factor I’d

consider when purchasing a motor vehicle 1 2 3 4 5

Payment options(such as hire purchase, lease)

are a concern I’d consider when purchasing a

motor vehicle

1 2 3 4 5

The ease of finding a mechanic to repair the

specific car brand influences my motor vehicle

purchase decision.

1 2 3 4 5

Low interest rates are critical in influencing my

decision to purchase a motor vehicle 1 2 3 4 5

Fuel prices influence my choice of motor vehicle 1 2 3 4 5

Please state any other economic factor that you think in your opinion influences consumer

behavior………………………………………………………………………………………

…………………………………………………………………………………………………

Section C: The psychological factors affecting consumer purchasing decisions in

Kenya’s motor vehicle industry

Kindly tick as appropriate in the spaces provided the extent to which you think the following

factors influence consumer choice.

.

The following psychological factors influences

my decision to purchase motor vehicles

Strongly

disagree

Dis

agree

Neu

tral

Agree Strongly

agree

My perception about the car and brand

influences my purchase decision of a motor

vehicle

1 2 3 4 5

Motivation from friends and family on a specific

brand influences my purchase decision for the

motor vehicle

1 2 3 4 5

My attitude towards the brand of car affects my

purchase decision for the motor vehicle 1 2 3 4 5

My attitude towards the brand of the car affect

my purchase decision for the motor vehicle 1 2 3 4 5

Innovative of the car and brand is a concern I

consider when purchasing a motor vehicle 1 2 3 4 5

67

My personal beliefs are an important factor in

the purchase decision of a motor vehicle 1 2 3 4 5

Knowledge sharing from friends and colleagues

influences my purchase decision of a motor

vehicle

1 2 3 4 5

There is a significant relationship between

psychological factors and consumer choice of

motor vehicle

1 2 3 4 5

Please state any other psychological factor that you think in your opinion influences

consumer

behavior………………………………………………………………………………………

………………………………………………………………………

Section D: the social-cultural factors affecting consumer purchasing decisions in

Kenya’s motor vehicle industry

Kindly tick as appropriate in the spaces provided the extent to which you think the following

factors influence consumer choice.

.

The following social cultural factors

influences my decision to purchase motor

vehicles

Strongly

disagree

Dis

agree

Neut

ral

Agree Strongly

agree

Different cultures have different buying

behavior decisions for motor vehicles 1 2 3 4 5

Shared values with others influences my motor

vehicle purchase decisions 1 2 3 4 5

The social class that I belong to influences my

motor vehicle purchase decisions 1 2 3 4 5

My status in the society influences my motor

vehicle purchase decisions 1 2 3 4 5

Buzz marketing and social media influences the

brand of motor vehicle that I would purchase 1 2 3 4 5

Reference groups like motor vehicle forums that

form attitudes and behavior like “top gear”

influence the choice of motor vehicle to be

purchased

1 2 3 4 5

Membership groups such as “4X4 enthusiast

groups:” influences my purchase decision for a

motor vehicle

1 2 3 4 5

Aspirational groups that we wish to belong

inspire the choice of motor vehicle that I would 1 2 3 4 5

68

purchase

My religion would influence the choice of motor

vehicle that I would purchase 1 2 3 4 5

The country of origin of the motor vehicle my

motor vehicle purchase decisions 1 2 3 4 5

Please state any other psychological factor that you think in your opinion influences

consumer

behavior………………………………………………………………………………………

…………………………………………………………………………………………………

Section E: Demographic factors affecting consumer purchasing decisions in Kenya’s

motor vehicle industry.

Kindly tick as appropriate in the spaces provided the extent to which you think the following

factors influence consumer choice.

.

The following demographic factors influences

my decision to purchase motor vehicles

Strongly

disagree

Dis

agree

Neu

tral

Agree Strongly

agree

My personality would impact on my decision on

which motor vehicle to purchase 1 2 3 4 5

My gender would influence the choice of motor

vehicle to purchase 1 2 3 4 5

My Age would influence the choice of motor

vehicle to purchase 1 2 3 4 5

Changing life events would influence the choice

of motor vehicle to purchase 1 2 3 4 5

My level of education would influence the

choice of motor vehicle to purchase 1 2 3 4 5

My lifestyle would influence the choice of motor

vehicle to purchase 1 2 3 4 5

Lifecycle status if the motor vehicle model and

brand would influence my purchase decision 1 2 3 4 5

My occupation would help me to make an

appropriate choice of what motor vehicle I’d

purchase

1 2 3 4 5

Please state any other demographic factors that you think in your opinion influences

consumer

behavior………………………………………………………………………………………

………………………………………………………………………………………………