How does Perception influences Buying decision making process by Dzmitry Aleinik

â&#x20AC;&#x153;How does the perception of the Mitsubishi Evolution and Subaru WRX brands effect the individual buying decision making criteria regarding these brands in Cyprusâ&#x20AC;?

Written by: Dzmitry Aleinik (F2006856)

This Thesis was submitted as partial fulfillment of the requirements for the Masters of Business Administration (MBA) degree at European University - Cyprus, School of Business Administration 6, Diogenous Str., Engomi, P.O. Box: 22006, 1516 Nicosia-Cyprus Date: 31/05/2010 1

Other Notes Page:

A Master’s Project In Business Administration

By Dzmitry Aleinik (F2006856)

“Submitted as partial fulfilment of the requirements for the Masters of Business Administration (MBA) degree at European University Cyprus”

Approved by:

Date of Approval:

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Acknowledgement First of all, I would like to acknowledge my friends for the assistance and support in doing this project work. Few among them are Vladimir Dus, Kyrill Asparuchov, George Todorov; thanks for all the encouragement given during this tedious procedure.

I offer my sincere thanks to all the drivers who helped me with the primary research by sparing their valuable time to answer my questions. Not to mention, without the help of my supervisor Dr. Dino Domic, it would have been impossible to accomplish this task. I would like to thank Professor Andreas Efstatiades and all the MBA staff for all their help.

Finally, I would like to thank my family and friends back home who kept me motivated throughout this research work.

Abstract On 19 of January 2010, Head of the Motor Vehicles Importers' Association (SEMO), Petros Krasias announced that Motorshow 2010 would go ahead this year, despite continually poor sales, in an effort to inject some life into the car market. "Last year, we saw a drop of around 40 per cent in car registrations, which created a big problem for all importers. The slump continues

don't

see

upturn"

said

Head

SEMO.

The annual event was cancelled last year as a result of the global economic downturn and its impact on car sales in Cyprus. From a business prospective, Cypriot car dealers target of sales increase might be achieved through either price and/or non-price measures. Mainly dealers and manufactures compete on price-bases, thus car-production is characterized as a highly competitive market. Nevertheless, price is a priority factor in buying decision process, for majority, there are competitive non-price aspects no less important. Among those factors in individual decision making this research paper is based and designed to distinguish intangible elements in buying decision making process. The objectives of this research paper are to identify the key reasons that stand behind buying decision process purchasing substitute car brands and to study its [ the perception] effects upon individual decision making process regarding two sport car brands. In this dissertation the previous work carried out on this topic has been analyzed as literature review. The secondary research gaps were identified and in consideration with the various possible research methods, most suitable methods were accepted for primary research. Questionnaire and personal interviews with existing customers were studied in order to draw a general picture on the topic. After the analysis of the results suitable recommendations are suggested and certain areas for further study are identified.

Keywords: buying decision making process; perception; brand equity; attitude; semiotics.

Glossary of terms Attitude â&#x20AC;&#x201C; a lasting, general evaluation of people (including oneself), objects or issues (Solomon M., 2006) Brand equity is a brand that has strong positive associations and consequently commands a lot of loyalty (Solomon M., 2006) Brand loyalty is a pattern of repeat product purchases accompanied by an underlying attitude towards the brand (Solomon M., 2006) Decision making can be regarded as an outcome of mental processes (cognitive process) leading to the selection of a course of action among several alternatives. Every decision making process produces a final choice (Kepner C., 1965) Mitsubishi Motors Company is the sixth largest automaker in Japan and the seventeenth largest in the world by global vehicle production. OICA (Organisation des Constructeurs dâ&#x20AC;&#x2122;Automobiles) brings together over 40 national associations of manufacturers from all over the world. OICA represents the interests of the global automobile industry and is their official representative at the United Nations (oica.net) Perception is a process by which stimuli are selected, organized and interpreted (Solomon M., 1996) Subaru is the automobile manufacturing division and brand name of Japanese transportation conglomerate Fuji Heavy Industries (FHI) Semiotics is a field of study that examines the correspondence between a sign and the meaning(s) it conveys (Solomon M., 2006)

Index: 1.

Introduction………………………………………………………..….…9 1.1 1.2 1.3 1.4

Aims and Objectives of the Research…………………….…..…9 Value of the Research……………………………………..……..10 Research background………………………………………....…11 Overview of the contestants and the US Market…………..…13

Literature Review………………………………………………….…...16 2.1 2.2 2.3 2.4

The objective of the review……………………….…………….16 Source:……………………………………………….……….…...17 Brand Management for Profit Organizations….…………..…17 Individual decision making…………………………………....18 2.4.1 Problem recognition…………………………...………....19 2.4.2 Information search……………………….……….……....19 2.4.3 Evaluation of alternatives………………………...….…..21 2.4.4. Evaluative criteria……………………………..….…...…23 3. Brand loyalty or habit ……………………………………..….….…25 4. Perception……………………………………………….……..…...…27 4.1. Theories and explanations of perception………………….….....27 4.2. Variations in perceptual organization………………………..….29 4.3. The role of symbolism in interpretation………………….……..30 5. Attitudes ................................................................................32 6. Mitsubishi Evo and Subaru WRX brand marketing…..…..…….34 6.1. Mitsubishi Evolution………………………………………….…...36 6.2. Subaru Impreza STI………………………………….……..….….40 6.2. 1.Subaru Impreza WRX brand perception survey…………….42 7. Building customer relationship; pull marketing………….….…..45 8. Issues related to brand perception …………………………………..48

3. Research Methodology……………………………………………..……..50 3.1 Plan of the Research Methodology……………………...……….….50 3.2. Research Setting……………………………………….…..…..……..50 3.3 Research Objectives…………………………………….…….………51 3.4 Research Methods………………………………..…….…….….……51 3.4.1 Primary and Secondary Resources……………….……….…...….52 3.4.2 Informal, open-ended Interviews……………………….……..…53 3.4.3 Questionnaire Survey……………………………..…..……………54 3.5 Sample Selection and Size…………………………..……….……....56 3.6 Data Analysis…………………………………………………..…..…58 3.7 Ethical Issues……………………………………………..….……..…58

3.8 Strategic Analysis of sport car industry in Cyprus …………..…...58 3.8.1 Rivalry…………………………………………………..….…………58 3.8.2 New Entrants………………………………………………..…....….59 3.8.3 Substitutes………………………………………………….…..…….59 3.8.4 Buyers……………………………………………………..…..….…..60 3.8.5 Suppliers…………………………………………….……..…….…..60 3. 8.6 Conclusion…………………………………………………..…..…..61 3.9 Gaps Identified in the Literature review……………………………62

4. Primary Data Results and Analysis of Findings …………………..….63 4.1. Primary Data Results for Objective 1…………………………..….63 4.2. Primary Data Results for Objective 2 …..…………………..….….67 4.3 Analysis of findings for objective 1…………………………...……70 4.4 Analysis of findings for objective 2………………………...…..…..73 4.4 Analysis of findings for objective .....................................................73

5. Conclusion and Recommendations…………………………………….76 7.1 Recommendations…………………………………………..….…….77 References………………………………………………………………………..80

APPENDIX 1…………………………………………………………………….85 APPENDIX 2……………………………………………………………...……..95 APPENDIX 3………………………………………………………….…………114 APPENDIX 4a…………………………………………………………………..123 APPENDIX 4b…………………………………………………………………..124 APPENDIXES 5………………………………………….………………….…..127

1. Introduction: 1.1 Aims and Objectives of the Research

The aim of the dissertation is to study the concept of individual car buying decision making in Cyprus and investigate customer perceptions regarding two popular sport carsâ&#x20AC;&#x2122; brands- Mitsubishi Evolution and Subaru Impreza WRX. The secondary research has provided information on the various aspects of purchasing decision making, perception and brand marketing. Overall, existing research studies on decision making in car industry seem limited. Brand equity building and perception alteration is a new phenomenon in Cyprus and existing literature currently amounts to be handful. However, there is abundant number of theoretical data concerning the discussed matter.

The primary research is to investigate the reasons standing beyond purchase of either Mitsubishi Evolution or Subaru Impreza WRX particular car brand and to investigate the key brand strengths attracting customers and their perceptions regarding it. Important here is to keep in mind that both Japanese car brands are unique regarding their rally history, but throughout the time both are being put on the edge of sport car competitive market. This is being carried out in two ways, where interviews will be sought to understand perception towards a chosen car brands and secondly a questionnaire survey will be used to collect data regarding customers demographics and brand perception elements. The aims and objectives would thus help in identifying strength and weaknesses of brand policy, alter perception into positive dimension as recommendations and serve a practical handout on buying decision making. This research has the following objectives: (Objective 1) To investigate the differences in perception of Mitsubishi and Subaru brands in Cyprus and demographic profile of the end user; (Objective 2) To investigate how does the perception effects the individual buying decision criteria towards purchase a Mitsubishi Evolution and/or Subaru WRX in Cyprus; (Objective 3)To determine corrective steps in marketing communication, if needed 9

1.2 Value of the Research This report focuses on the potential of correct brand management in Cyprus and tries to identify customer perceptions towards substitute products in car industry. This report will include insights from actual car owners regarding perception and decision making criteria involved in purchase of one of the studies car brands. Secondary research involves data concerning marketing, brand marketing and strategy of Mitsubishi Evolution and Subaru WRX in Europe, theoretical data regarding perception and buying decision making, in order to help the reader understand the research matter and current market dynamics. The beneficiaries of this report can be:  Managers involved with the highest levels of the strategic planning process, and consultants who help their clients with this task.  Local car importers, distributors and car dealers, banks and financial service providers, tuning and other specialized garage owners. It will support high caliber strategic planning professionals determined to succeed in this dynamic industry and willing to go an extra mile.  Thesis might prove to be useful to the actual cars’ users, willing to state their opinion regarding the key automobile features, as performance, efficiency, reliability, etc., provided that their voice is heard and necessary changes are done, overall satisfaction in time shall increase.

 Academics, since there is growth of interest and applications of consumer behavior theory onto market where the number of practical studies is considerably limited. Therefore, the user will not only benefit from the hundreds of hours that went into the methodology and its application, but also from its perspective and high quality analysis and strategic discussions.

1.3. Research background As it was noted at the second edition of OICA’s brochure of key figures of the World’s Car Industry the auto industry’s turnover is approaching €2 trillion, equivalent to the 6th largest economy in the world. Clearly this number demonstrates the importance of the auto industry in our modern society. In addition over 50 million people worldwide owe their job to the auto industry. The Auto Industry is also one of the largest investors in Research and Development (investing almost €85 billion in research), playing a key role in the technological advancement of society. These continuous efforts are also reflected in the ever improved safety and environmental performance of modern automobiles, as proven by the falling numbers of road fatalities and transport emissions. Vehicle manufacture and use are also major contributors to government revenues around the world, contributing over €430 billion in twenty six countries alone. As we will see in the table below Japan is a leader in car manufacturing, where total automobile production reaches 9 mln. units and total revenue is approaches € 436 mln. (OICA, 2008)

Source: - International Organization of Motor Vehicle Manufacturers, (2008). “Top world’s car manufacturers”, Online, Available at http://www.nationmaster.com/graph/ind_car_pro-industrycar-production#source [Accessed 09-03-10]

Clearly the Japanese automotive industry is one of the most prominent industries in the world. Japan was the world's largest vehicle manufacturer in 2008 but has ceded this position to China in 2009. It is home to a number of companies that produces cars, construction vehicles, motorcycles, engines, etc. However, its (Japanese Automobile Manufacturer) market share has decreased slightly in recent years, particularly due to old and new competition from South Korea, China and India, Japan's car industry continues to flourish, its market share had risen again, and in the first quarter of 2008 Toyota surpassed American General Motors to

become

the

world's

largest

car

manufacturer.

Source: - Japan Automobile Manufacturers Association (JAMA), 2009 [Online] Available at: http://jamaserv.jama.or.jp/newdb/eng/index.html [Accessed 10-03-10]

Intense domestic and international competition, the automotive industry crisis of 2008â&#x20AC;&#x201C; 2010 as a part of a global financial downturn, new environmental and safety regulations insure hard time for industry in general. Nevertheless, that the companies out of the Big Three of Japanese Car Industry (Toyota, Nissan and Honda) â&#x20AC;&#x201C; Fuji Heavy Industries and Mitsubishi Motors competition intensifies as the car sales and product lines are on the same level. More of it, in literally all the industry one can hardly find more intense competition between rallyevolved archrivals Mitsubishi Evolution and Subaru WRX Impreza sport sedan cars. However, both brands are regarded as car producers, competition started in rather different environment and under complex names. Subaru is a brand name of cars produced by Fuji Heavy Industries. Until 1950 the company was called Nakajima Aircraft Company. Nakajima was founded in 1917 and produced the first monoplane aircraft for the Imperial Army in 1937. The most known airplane of Nakajima was Ki-43 Hayabusa (1941). On the other hand, Mitsubishi manufactured airplanes mostly for the Imperial Navy. The counterpart of Hayabusa 12

can be A6M Zero (1940). (Appendix 5-1) After WWII, Japan was prohibited from making airplanes. The engineers of aircraft industry fed their way to two industries, car and train. During the 1960s, Japanese automakers launched a bevy of new kei cars in their domestic market. These tiny automobiles usually featured very small engines (from 360cc to 600cc) to keep taxes much lower than larger cars. The average person in Japan was now able to afford an automobile, which boosted sales dramatically and jumpstarted the auto industry toward becoming what it is today. The first of this new era, actually launched in 1958, was the Subaru 360. Other significant models were the Suzuki Fronte, Mitsubishi 500, Mazda Carol, and the Honda N360. Nowadays, Subaru Impreza WRX and Lancer Evolution are compared with one another. Due to a good reason performance/price

ratio

very

high

between these two car brands. Their rivalry is thought to start 1990's and the recent edition is no exception â&#x20AC;&#x201C; Lancer Concept X and

5-door

Subaru

WRX.

Featuring

comparably a number of similarities these two car break market fans of Japanese tuned car into two groups. 1.4. Overview of the contestants and the US Market The Mitsubishi Lancer Evolution, colloquially known as the Evo, is a high-performance sedan manufactured by Mitsubishi Motors. There have been ten official versions to date. All use two litre, turbocharged engines and All Wheel Drive systems. The Evolution was originally intended only for Japanese markets, but demand on the "grey import" market led the Evolution series to be offered through Ralliart dealer networks in the United Kingdom and in various European markets from around 1998. Mitsubishi decided to export the eighth generation Evolution to the United States in 2003 after witnessing the success Subaru had in that market with their Impreza WRX, a direct competitor in other global regions.

The Lancer Evolution is unique among its competitors in the World Rally Championship in that it was a homologated Group A car slightly modified to be able to race competitively against, from the 1997 season onwards until the San Remo Rally in 2001, World Rally Car class cars. They were successful in the WRC Rallies from 1996-1999, thanks to the Finn Tommi Mäkinen, for clinching the driver's titles from 1996–1999, and the help of teammate Richard Burns for clinching the constructors's championship for the first, and thus far only time in 1998. The Subaru Impreza WRX is a turbocharged version of the Subaru Impreza, an allwheel drive automobile. It is available as a sedan or wagon. Subaru is the automobile manufacturing division and brand name of Japanese transportation conglomerate Fuji Heavy Industries (FHI). Originally introduced in 1992 in Japan, then shortly afterward in New Zealand, Australia and Europe, the WRX had a turbocharged flat-4 2.0L (then later a 2.5L), Subaru Boxer engine. Compared to the base Impreza, the WRX has a turbo-charged drivetrain, wider low-profile tires, larger brakes, and firmer, higher-quality suspension components. The Subaru World Rally Team (SWRT) was Subaru's World Rally Championship (WRC) team. It used a distinctive blue with yellow color scheme that is a throwback to the sponsorship deal with State Express 555, a cigarette brand popular in Asia. Subaru's WRC efforts date back to 1980, however, the team, in its current form, has existed since 1989, when the British firm Prodrive took over its operations, and its base moved from Japan to Banbury, England. Subaru used the team to showcase its all wheel drive technology. It has credited the increased sales of its vehicles, especially the Subaru Impreza, with its success in the World Rally Championship, in addition to popularizing its all-wheel-drive system. The team was historically an extremely strong one, competing in the WRC longer than any other manufacturer team in their current form. It has won the manufacturers' championship three times, in (1995, 1996, and 1997), and the drivers' championship three times, in 1995, 2001, and 2003. Although both cars are new to the U.S. market — the Evo went on sale in late February 2003 while the WRX STi hit dealer showrooms in May — they have been actively engaged in 14

conflict for several years in the World Rally Championship (WRC) and the Japanese marketplace. Mitsubishi never intended to extend the Evo/WRX battle to the U.S. because it didn't believe there was a market here for a rally-inspired high-performance compact sedan. But Subaru thought differently. The executives at Fuji Heavy Industries (Subaru's parent company) decided that at the right price, they could sell 10,000 WRXs a year. Despite having to detune it from the original Japanese version's 280 bhp to 227, the $23,995 car became a tremendous hit in 2001. More than 23,000 Impreza WRXs found their way into customer hands in the first year This success of the WRX paved the way for the true high-performance torchbearer, the WRX STi, from Subaru's motorsport arm, Subaru Tecnica international (STi). But before plans were finalized for the STi in America, Mitsubishi announced that the Evo was headed to the U.S. with no reduction in performance. Based on dynamic changes that are being brought about by the convergence of technology , consumer empowerment in the present market area, popularity of both car brands in Cyprus and World Rally Championship regular presence on the calendar of events, the topic that is identified for the dissertation is:

â&#x20AC;&#x153;How does the perception of the Mitsubishi Evolution and Subaru WRX brands effect the individual buying decision making criteria in Cyprusâ&#x20AC;?

2. Literature Review According to Bell (1993), a review should provide the reader with a picture albeit limited in a short project, of the state of knowledge and of major questions in the subject area being investigated. The whole process of literature review is to help the author grasp what has already been said on the subject and the opinions about the experts. Despite the fact that there is abundance of theoretical data concerning the research data, very few publications (mainly journals) depict market development and analyze perception and its impact. As a result, more of online publications and reports are made use of for secondary data.

2.1 The objective of the review: 

Provide an introduction to consumer decision making



Theoretical review on perception



Theoretical review on attitude and its measurement



To provide an overview of non tangible issues beyond decision making process



To understand the value creation in brand equity building



To provide a strategic analysis of Mitsubishi and Subaru brand marketing



Discuss the determinants of success/failures in brand marketing



To discuss issues related to substitute goods, in marketing terms



Forming authors thoughts and shaping his initial opinion



To identify gaps in the knowledge and try to fulfill them by primary research

2.2 Source:

1. Publications, research reports from Cyprus Statistics Board; car distributorsâ&#x20AC;&#x2122; offices 2. Internet sport car journals, magazines and publications 3. Internet newspaper articles from archives (Times, Business Week) 4. Electronic Journal Databases (Emerald, ProQuest) 5. Internet Sites 6. Books related to decision making, brand equity, attitudes and perception 2.3 Brand Management for Profit Organizations To study the concept of brand management, we need to first get a grip on the basic service marketing theories that exist. This section provides a brief insight into the marketing of services for profit organizations. Fundamentally services are marketed in the same way as goods. Whether its focus is goods and services, for profit or not for profit, the organization should first select and analyze its target markets, following which the company should design a coordinated marketing mix around a differential advantage. What differentiates services from goods are its distinctive characteristics namely- intangibility, inseparability, heterogeneity (Etzel, 1997). Another dimension of service characteristics include the client relationship (Pezzullo, 1988). For profit organizations, business executives define their market as present and potential customers. Service marketers need to understand the demographic factors and how they affect the market for a service. Marketers also must try to determine their customersâ&#x20AC;&#x2122; buying behavior. Due to the intangible nature of services, the psychological determinants of buying behavior become more important when marketing services than goods. In addition, the sociological factors of social-class structure and reference groups are significant determinants of buying behavior in services markets. In terms of product planning, a marketer of services must make strategic marketing decisions regarding what services it will offer, the service-mix strategies it will adopt, features such as the branding the services will have and how it will manage the service quality (Etzel , 1997). People engaged in branding seek to develop or align the expectations behind the brand experience, creating the impression that a brand associated with a product or service has 17

certain qualities or characteristics that make it special or unique. A brand is therefore one of the most valuable elements in an advertising theme, as it demonstrates what the brand owner is able to offer in the marketplace. The art of creating and maintaining a brand is called brand management. In the case of brand perception, the marketer has to consider the following: encouraging brand usage , how it will differentiate its automobile technology from its competitors, the need to align with other industry players, to create a positive brand image, what benefits of car usage will be addressed and to which segment it should be targeted to, promotional activities such as use of celebrities, ecological projects and so on.

2.3 Individual decision making â&#x20AC;&#x153;When making a decision of minor importance, I have always found it advantageous to consider all the pros and cons. In vital matters, however, such as the choice of a mate or a profession, the decision should come from the unconscious, from somewhere within ourselves. In the important decisions of personal life, we should be governed, I think, by the deep inner needs of our nature.â&#x20AC;? Sigmund Freud Cook J., 1993

An overview of decision-making process is shown in Appendix 5.2. On the following pages the focus is given on three of the steps in the decisionmaking process; how consumers recognize the problem; customersâ&#x20AC;&#x2122; search for information about product choices; the ways in which alternatives are being evaluated to arrive at a decision. Among these steps matters studied in this paper are being emerged, transformed and enhanced. The traditional decision making process is applicable to extended problem-solving where its usually initiated by a motive that is fairly central to the self-concept and the eventual decision is perceived to carry a fair degree of risk ( Solomon, 2006). Here, a consumer required 18

maximum information, both internal and from the outside sources (external). Based on the importance of the decision, each product alternative is carefully evaluated. The evaluation is done by considering the attributes of one brand at a time and seeing how each brand’s attributes shape up to some set of desired characteristics. 2.3.1 Problem recognition At the first stage of consumer decision-making a feeling of a significant difference between customer’s current state of affairs and some desired or ideal state arouses. Important is to distinguish between two problem arousal ways: need recognition (downward move of an actual state of affairs) and opportunity recognition (upward move of an ideal state of affairs). For instance, buying an avalanche type of product or product with inadequate level of satisfaction might in practice diminish person’s actual state of affairs; thus product is available to a customer, on the other hand, opportunity recognition is merely exposition to different or better quality products, often due to person’s circumstances change. Purchase in a case of last serves to adapt to the new environment. While problem recognition often occurs naturally, there is a big deal of marketing activity involved. In some cases, marketers attempt to create primary demand, where consumers are encouraged to use a product or services, share idea, promote thoughts and fashion, etc. In light of

product

encouragement,

nowadays

car

distributors

offer

drive-tests

(http://www.fairways.com.cy/Cyprus/Web-Forms/Form-Design/Request-a-Test-Drive.aspx

Secondary demand, where consumers are prompted to prefer a specific brand instead of others, can occur only if primary demand already exists. At these point, marketing agencies or departments convince consumers that a problem is best solved by choosing their brand over others in the same category. 2.3.2 Information search Once a problem is recognized, consumers need adequate information to resolve it. Here we discuss a process by which the consumer surveys his/her environment for appropriate data to make a reasonable decision. Basically, customers’ search for information concerning required product or services is framed into pre-purchase search and ongoing search.

Determinants

Motives

Outcomes

Pre- purchase search Involvement in the purchase; Market environment; Situational factors; Making better purchase decisions

Increased product and market knowledge; Better purchase decision; Increased satisfaction with the purchase outcome;

Ongoing search Involvement with the product;

Building a bank of information for future use; Experiencing fun and pleasure; Increased product and market knowledge, leading to: - future buying efficiencies - personal influences Increased impulsive buying; Increased satisfaction from search and other outcomes;

Source: Peter H. Bloch, â&#x20AC;&#x153;Consumer search: an extended frameworkâ&#x20AC;?, Journal of consumer research, 1986

Basically, information sources can be classified into two kinds: internal and external. Classical approach is that customers prone to rely on internal search by scanning their memory bank to assemble information about different product alternatives. However, external search activity is greater when the purchase is important and/or when the relevant information is easily obtained and utilized. Customers differ in the amount of search they tend to undertake, and according to M. Solomon (2006) search tends to be greatest among those consumers who are moderately knowledgeable about the product. The relationship between amount of information search and product knowledge reminds an inverted U-shape graph. Meaning that either people with minimum product knowledge may not feel capable of searching extensively, or experts who have better sense of what information is relevant to the decision, tend to engage in selective search (focused and efficient search). The traditional decision-making perspective incorporates the economies-of-information approach to the search process: consumers form expectations of the value of additional information and continue to search to the extent of utility exceeds the costs. The most valuable units of information is being absorbed and added to what is already known. As a rule, purchase decisions that involve extensive search and/or high expectation/utility products or services entail some kind of perceived risk. Mood effects on consumersâ&#x20AC;&#x2122; attitudes and perceptions about risk are stronger when the brands are unfamiliar or product is difficult to 20

be understood. Five types of perceived risk based on a purchase of sport car is described in details at Appendix 5.3.

Source: Information search in decision making, “Consumer Behavior”, M. Solomon, 2006

The above table corresponds to complexity of the information search processes; where consumer background, personality and environment serve as a base for ‘intensity’ of external/internal search. ‘Information acquisition’ pillar is than mixed with past experience and on-going search to ‘process information’ and proceed with ‘evaluation of alternatives’. 2.3.3 Evaluation of alternatives Modern society abounds with choices. Because the brain capacity to process information is limited, consumers are very selective about what they pay attention to. One of the techniques adopted to attend to only a small portion of stimuli exposed is called perceptual selection. Depending on the decision-making process –either extended or habitual, customers exercise psychological economy. Literally through usage of evoked sets, a set of brands (products) already in memory, plus a list of prominent one’s, alternatives are being actively considered.

All alternatives

Inert set

Evoked set

Retrieval set

Inept set

Prominent brands

Source: Identifying alternatives: getting in the game, “Consumer Behavior”, M. Solomon, 2006

A study (Solomon, 2006) found that number of products included in evoked sets is limited, although there were some marked variations by product category and across countries. The alternatives that the consumer is aware of but would not consider buying are his/her inept sets, while those not under consideration at all comprise the inert set. Important, here to notice that a product is not likely to be placed in the evoked set after it has previously been considered and rejected. A new brand is more likely to be added to the evoked set than is an existing brand that was previously considered but passed over, even after additional positive information has been provided for that brand. As a result, consumers’ unwillingness to give a rejected product second chance underlines the importance of ensuring that it performs well from the time it is introduced. Product categorization is a crucial determinant of how a product is evaluated. The product in a consumer’s evoked set are likely to be those that share some similar features. This process can either help or hurt a product, depending on what people compare it with. When faced with a new product, consumers refer to their already existing knowledge in familiar product categories to form new knowledge. It is important to understand how this knowledge is represented in a consumer’s cognitive structure, which refers to a set of factual knowledge about products (beliefs) and the way these beliefs are organized in people’s minds. At this stage importance is that product categorization has many strategic implications. 22



Product positioning The success of a positioning strategy depends on the marketer’s ability to convince the consumer that his or her product should be considered within a given category. For example, research shows that $25,000 is a critical price point for new-car buyers, a middle ground where expectations transition from basic transportation to some kind of added value, be it luxury, performance, cargo hauling, overall versatility or combinations of all the above. The all-new 2009 Lancer Ralliart lands in this price point with performance aspirations powered by the iconic Lancer Evolution. (Turbo & High Tech Performance, by Evan Griffey)



Identifying competitors Consumers are often faced with choices between non-comparable categories in automobile market, in which a number of attributes exist that cannot be directly related to one another. However, the comparison is easier when consumers can derive an overlapping category that encompasses both items ( the case of Mitsubishi Evolution and Subaru WRX).



Exemplar products Judgments about category attributes tend to be disproportionately influenced by the characteristics of category exemplars. In a sense, brands that are strongly associated with a category are prominent, by defining the evaluative criteria that should be used to evaluate all category members.

2.3.4. Evaluative criteria Evaluative criteria are the dimensions used to judge the merits of competing options. However, there are different options on behalf on the criteria on which products differ from one another and thus carry more weight in the decision process. For instance, the decision about which attributes to use is the result of procedural learning in which a person undergoes a series of cognitive steps before making a choice. These steps include identifying important attributes, remembering whether competing brands differ on those attributes, etc. Different approach is involved where limited problem-solving occurs prior to making a choice, consumes often fall

back on heuristics or mental rules-of-thumb that lead to a speedy decision. Here are some of the ways to employ the “rule-of-a thumb”:

Frequently use short cut is the tendency to infer hidden dimensions of products from observable attributes. The aspect of the product that is visible acts as a product signal that communicates some underlying quality. Important product signal is a product’s country of origin being a valid piece of information in the decision-making. Certain items are strongly associated with specific countries, and often benefit from these linkages. E.g.: Japanese electronics and car, European wine and delicatessen, etc.

Country of origin can function as a stereotype – a knowledge structure based on inferences across products. These stereotypes may be biased or inaccurate, but they do play a constructive role in simplifying complex choice situations. By Solomon, 2006, recent evidence indicates that learning of product’s country of origin is not necessarily good or bad. Instead, it has the effect of stimulating the consumer’s interest in the product to a greater degree. The purchaser thinks more extensively about the product and evaluates it more carefully. The origin of the product can thus act as a product attribute that combines with other attributes to influence evaluations. In addition, the consumer’s own expertise with the product category moderates the effect of this attribute. When other information is available, experts tend to ignore country of origin information whereas novices continue to rely on it. However, when other information is unavailable or ambiguous, both expert and novices will rely on this attribute to make a decision.

The association of particular meanings with brands makes branding susceptible to semiotic analysis. In structuralism semiotics, Saussure emphasized the relational identity of signs. A semiotic system depends on the differences between signs. What matters in 'positioning' a product is not the relationship of advertising signifiers to real-world referents, but the differentiation of each sign from the others to which it is related. A structuralism semiotic analysis of a category of 24

products (such as cars) as a semiotic system would include specifying how each model is differentiated from other models produced by both the same makers and by those of other makers of cars perceived in some way as similar (e.g. family cars). Instead of just selling a car, car manufacturers companies are selling the whole package. The lifestyle (the signifier) plus the transportation (the signified) equals what one wants out of the car (the sign). See Appendix 5.4

3.5. Brand loyalty or habit In order to summarize decision making process “tree” and to come out with basic decision making rules, we need to clarify a few more important aspects. The tendency to prefer products or people of one’s own culture to those from other countries is called ethnocentrism. Opposite to polycentric consumers, first are likely to feel it is wrong to buy products from other countries, particularly because of the negative effect this may have on the domestic economy. Marketing campaigns stressing the desirability of “buying Belarus” in the Republic of Belarus, for instance, are more likely to appeal to this consumer segment. Such economic policy is required to support programs of import-exchange and economic sustainability of Belarus Rubles. Cyprus economy relies on services, and according to Statistical Data for 2008, exportimport ratio is negative (1:5.8). Local customers historically rely on foreign goods and thus represent polycentric consumers. Fundamental phenomena of “brand equity”, that is a form of repeat purchasing behavior reflecting a conscious decision to continue buying the same brand. That is why true loyalty exists when a pattern or repeat purchase is being accompanied by an underlying positive attitude toward the brand. Compared to an inertia situation (habitat buying due to less search involvement on behalf of consumer) in which the consumer passively accepts a brand, a brandloyal consumer is actively (sometimes passionately) involved with his or her favorite. Because of the emotional bonds that come about between brand-loyal consumers and products, “trueblue” users react more vehemently when these products are altered, redesigned or withdrawn. E.g.: 2010 Subaru WRX new design came a big disappointment for a great deal of non-users. (Turbo & High Tech Performance, by Evan Griffey) 25

Consumers consider sets of product attributes by using different rules, depending on the complexity of the decision and the importance of the decision to them. As we have seen, in some cases these rules are quite simple: people simply rely on a short cut to make a choice. In other cases though, more effort and thought is put into carefully selecting alternatives before coming to a decision. Same way work the decision-making rules: -

Simple decision rules are non-compensatory, where a product with a low standing on one

attribute cannot make up for this position by being better on another. People simply eliminate all options that do not meet some basic standards. -

Compensatory decision rules are employed by customers who tend to be more involved

in the purchase and thus are willing to expert the effort to consider the entire picture in a more exacting way. When using the simple additive rule here, customer merely chooses the alternative that has the largest number of positive attributes. When his or her ability or motivation to process information is not limited weighted addition rule take place, thus into the account are taken the relative importance of positively rated attributes, essentially multiplying brand ratings by importance weights.

Product evaluation is followed by actual product choice stage, where customers using a number of decision rules (described above) makes a product choice. Despite, described step-bystep process of decision making, research in the field of behavioral economics illustrates that decision making is not always strictly rational, and that the principles of mental accounting demonstrate that decisions can be influenced by framing, whether it is put in terms or gains and losses, perception and attitude towards the evaluated consumer goods, emotions, etc. In respect of cause-effect relationship of the Thesis, in the next chapter the concept of perception and its role in decision-making will be introduced.

4. Perception Perception is a highly complex activity which seems to depend on several levels of processing. Although there are many broad similarities in the way people process perceptual information and in the way they develop their perceptual abilities, it seems likely, given the variations in education, life experience, cultural background, expectations and temperament that individuals might differ slightly in their perception of the world. Sensation refers to the responses of sensory receptors and sense organs to environmental stimuli. Perception, on the other hand, is a process which involves the recognition and interpretation of stimuli which register on our senses. (P. Rookes and J. Willson, 2000) Most psychologists would agree that the boundary between sensation and perception is rather fuzzy. It is difficult to decide how complex stimuli need to be before they involve perception and how much interpretation is required before sensation becomes perception. Marketers are no less that psychologists interested in trying to understand some of the hidden complexities of perception. Some of the questions being raised up are such as: -

How are coherent perceptions derived from the myriad inputs being received all the time by sensory receptors?

How are sensory data processes to provide mental representations of our environment?

How important are factors like past experience in determining our perceptions?

Perception involves all the senses but the automobile industry is most remarkable for visual and sound. Vision is arguably the most important sense for humans and much more research has been conducted into the area of visual perception than into any other perceptual system. 4.1. Theories and explanations of perception Two important approaches to the problem of perception come from almost opposite directions. For example, some psychologists feel that perception is direct (e.g. Gibson) and all the information needed is contained in the visual display. Others believe that the brain uses past experience and other influences to construct a version of reality (e.g. Gregory). Others (e.g. Neisser) have attempted to reconcile these opposing views. Well applies to the last is a top27

down processing approach which is of a particular interest to us – how do we perceive the world around us? Top down processing is the reverse to bottom-up and is used to describe the higher, more cognitive influences on perception. It is based on the idea that sensory information from the retina is insufficient to explain how we interpret visual information. We also need to use stored knowledge about the world in order to make sense of the visual input. This higher-level information works downwards from the top in order to influence the way in which we interpret sensory inputs. This kind of processing is also called “concepts-driven processing” because prior knowledge (stored mental concepts) comes from the top to determine (drive) interpretation of sensory input at the bottom. More elaborate constructivist approach began over a hundred years ago with Helmholtz, who believed that perception was based on a process of inference. He argued that, on the basis of the sensations we receive, we draw conclusions about the nature of the object or event that the sensations are most likely to represent. Because we make these inferences so quickly and without apparent awareness, he described the process as unconscious. Modern constructivists suggest that the stimuli we receive from the environment are frequently ambiguous and have n clear-cut interpretation. This means that the observer has to solve the problem as to the identity of the stimulus. By using indirect, top-down process to make sense of the sensory input. This brings us another constructivist’s concept of perceptual sets. Allport (1955) suggests that perceptual bias affects attention. Predispositions in the perceptual system make some stimuli stand out more from the background information arriving from the senses. So, for instance, if one’s is particularly interested in cars, he/she is more likely to notice makes and models that someone who sees cars merely as a means of travelling from A to B. This theory is directly relevant to Gregory’s ideas in views perception as an active process involving information processing and interpretation. Already mentioned before, psychologies Neisser (1976) tried to reconcile the direct and constructivist positions by proposing a cyclic model of perception. He acknowledged that we are more likely to recognize objects quickly if they appear in a situational context. Human perceivers, according to Neisser, start out with certain expectations about the kinds of things they are likely to encounter in a given context. Perception, according to this view is a cyclic process in which the viewer has to check and re-check input against expectations. 28

Sensory cues/features from the visual environment

enviropnment

Analysis of sensory features (bottom-up)

Search for expected features (top-down)

Perceptual model (schema)

Source: Neisserâ&#x20AC;&#x2122;s analysis by synthesis model, â&#x20AC;&#x153;Perceptionâ&#x20AC;?, P. Rooks and J. Willson, 2000

4.2. Variations in perceptual organization Given that perception is ultimately an interpretation of incoming sensory stimuli, it seems likely that individuals might experience rather different perceptions when encountering identical stimuli. Among the factors that give rise to different perceptual experiences: -

Individual and psychological ( e.g. age, gender, personality, physiological state, mood, individual life-experience)

Social and cultural (e.g. environment conditions: weather, geography, etc., cultural background, tradition).

Regarding age, in general, perceptual abilities seem to improve and allow an increasingly accurate representation of the physical world, but there are certain perceptual abilities seem to deteriorate with age, for instance visual recognition and sound. The issue of gender differences in psychological processes is controversial. Several gender differences have been clearly demonstrated in the perception of touch, taste and smell, but for visual perception the picture is not so clear-cut. 29

People with different personalities tend to behave differently in various social situations and may respond differently to information of various sorts. People who have difficulty in detecting a target in a complex figure are called “field dependant” (Witkin, 1962). They are characterized as being socially dependant, conforming, sensitive to their social surroundings and keen to make a good impression. On the other hand, stand people, in personality terms, as selfreliant, inner directed and individualistic. Eysenck (1967) – extroverts and introverts classification map loosely on to the personality classification above. For example, introverts have more sensitive visual perception and are better at perceptual tasks requiring sustained attention (Harkins and Green, 1975). Perceptual set refers to the expectancies or predispositions which an observer brings to a perceptual situation. Our background and experience seem to “programme” us to see situations in a particular way, especially in conditions where the stimulus input is degraded or ambiguous. There are several factors which seem to influence set, and they include context, expectations, motivation, past experience and emotion. These factors interact to produce perceptual set. Among particularly interesting factors in determining a perceptual set are expectancy and occupational background (studies of Toch and Schulte, 1961 and Bruner and Postman, 1949). By looking at several factors causing individuals to have different perceptions of the same visual stimuli and considering studies, investigating the effects of culture and environment on perception, one is safe to suspect that perception does not occur in exactly same way for everyone. Perception is in the eye of the beholder. 4.3. The role of symbolism in interpretation For a reason of making sense of a marketing stimulus, whether a distinctive package, an elaborately staged television commercial or perhaps a car model on the cover of a magazine, we interpret its meaning in the light of associations or symbolism. For assistance in understanding how customers interpret the meanings of symbols we turn to a field of semiotics. According to Ch. Peirce, every message has three basic components: an object, a sign and an interpretant. A marketing message such as a Mitsubishi/Subaru car can be read on different levels. On the lowest level of reading, the object would be the product that is the focus of the message. The sign is the sensory imagery that represents the intended meaning of the object (a vehicle produced in

Japan). The interpretant is the meaning derived (high performance, reliable vehicle with underlined rallying history). From the semiotic perspective of Peirce, signs are related to objects in one of three ways. They can resemble objects, be connected to them with some kind of casual or other relation, or be conventionally tied to them. An icon is a sign that resembles the product in some way (“mitsuhishi” – literally derived from Japanese “three diamonds” or Subaru is the Japanese name for the Pleiades star cluster, which in turn inspires the Subaru logo and alludes to the six companies that merged to create FHI (Fuji Heavy Industries). A symbol is a sign that is related to a product through purely conventional associations ( e.g. Mitsubishi Evolution XI and Subaru Impreza STi rallying history, ultimate performance on asphalt, gravel and snow, innovative technology and Japanese quality). After recognition and interpretation stimuli registers on our senses, and in case of showing tendency to endure over time, applicability to more than a momentary event, might produce an attitude towards observed object, behavior, etc. In the next chapter we will consider the content of attitude, and discuss the functional theory of attitudes by Daniel Katz, in order to help us explain how attitude facilitates social behavior.

5. Attitudes

Eagly and Chaiken (1993) provided what may be the most conventional contemporary definition; “attitude is a psychological tendency that is expressed by evaluating a particular entity with some degree of favor or disfavor”. Several positions emerged that explicate the components of attitudes. People form attitudes on the basis of their cognitive, affective and behavioral responses to an entity (Eagly and Chaiken, 1993). The term attitudes is reserved for evaluative tendencies, which can both be inferred from and have an influence on beliefs, affect and overt behavior. Here I will consider affect, beliefs and behavior as interacting with attitudes rather than as being their parts. Although the term attitude structure is ubiquitous in the literature, precise definitions are less common. The concept of structure must begin with one’s conceptualization of attitude. To exist, it make sense to view the attitude as a type of knowledge structure stored in memory or created at the time of judgment. Some attitude theorists (e.g. Fazio, 1989), have proposed that attitudes be thought of as object-evaluation associations. That is, an attitude can be viewed as a simple two-node semantic network, with one node representing the object, the second node the global evaluation of the object, and the link between the two nodes the strength of the association. Although attitudes may be part of larger sets of knowledge structures (Eagly and Chaiken). The structure of an attitude can be represented as an object-evaluation association and the knowledge structures linked to it. Perhaps the most basic structural property of attitudes is that of attitude accessibility. Accessibility can be viewed as the strength of the associative link between object and evaluation, such that for highly accessible attitudes, the evaluation of an object is automatically activated from memory when that object is encountered (Fazio, 1986). Other fundamental issue concerning the essence of attitudes is expectancy. Expectancy-value models have dealt with the notion that attitudes are constructed from beliefs about the positive or negative features of objects, in which the features’ positivity/negativity is relative to goals and values to which individuals may subscribe. In order to explain how attitudes facilitate social behavior of Mitsubishi/Subaru cars in Cyprus, we will apply the functional theory of attitudes designed by the psychologist Daniel

Katz. It is important for marketers to know why a particular attitude is held before attempting to change it. 

Utilitarian function: is related to the basic principles of reward and punishment. Meaning, that drivers seeking adrenaline and distinguish themselves develop a positive attitude towards desire-satisfying car-product. The advertising slogan Subaru used in the U.K. includes, "The World's Favorite Four Wheel Drive" – a straightforward product benefit appeal to the utilitarian function.



Value-expressive function: attitudes that perform a value-expressive function express the consumer’s central values or self concept. Drivers form a product attitude not because of its objective benefits, but just like in case of most of the products, of what the product says about him/her as a person.



Ego- defensive function: attitudes that are formed to protect the person, from either external threats or internal feelings, perform ego-defensive function. Sport cars product promise to help a man project a ‘macho’ image (e.g. “since its launch in 1992, the Mitsubishi Lancer Evolution has been building a reputation as the supercar slayer.” The U.K. Mitsubishi evolution web page) may be appealing to his insecurities about his masculinity.



Knowledge function: some attitudes are formed as the result of a need for order, structure and meaning. This need is often present when a person is in an ambiguous situation or is confronted with a new product ("Plus on y pense, plus on a le gout de la conduire" (The more one thinks, the more one has the taste of driving it) in Subaru slogan in French Quebec)

An attitude can serve more than one function, but in many cases a particular one will be dominant. Through research and identification the dominant function a product serves for consumers, marketers can emphasize these benefits in their communication.

6. Mitsubishi Evo and Subaru WRX brand marketing The American Marketing Association defines a brand as “a name, term, sign, symbol, or design, or combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors”. A brand is thus a product or service that adds dimensions that differentiate it in some way from other products or services designed to satisfy the same need. These differences may be functional, rational or tangible – related to product performance of the brand. They may be more symbolic, emotional or intangible – related to what the brand represents. ( Kotler, 2005) Although, firm provide the impetus to brand creation through marketing programs and other activities, ultimately a brand is something that resides in the minds of consumers. A brand is a perceptual entity that is rooted in reality but reflects the perceptions and perhaps, even the idiosyncrasies of consumers. Brands personify organizations and their products and services. That is, brands allow non-human entities to take on human qualities such as trustworthiness, authenticity, vitality and reliability. In this way, brands enable entities to create emotional connections with customers and potential customers, resulting in more frequent usage and greater loyalty. (J. Kapferer, 2004) Proper brand positioning can ensure that people perceive the brand in ways that achieve organizational objectives. Diligent brand management efforts can move people from considering the brand (when they have specific needs), to preferring the brand, to purchasing the brand, to being completely loyal to the brand, to enthusiastically recommending the brand to others. Studies by Brad VanAuken (2007) have demonstrated that brands can produce the following benefits for organizations 

decreased price sensitivity,



increased customer loyalty,



increased bargaining power with retailers (for manufacturers),



independence from particular product categories,



increased flexibility for future growth (through brand extension),



increased ability to focus the organization's activities and resources, 34



increased market share,



increased stock price,



and increased shareholder value.

Studies have shown that an organization's two most important assets are its people and its brands. Typically, most of a company's financial value results from its brand asset value, which often far exceeds the value of all of the company's tangible assets. This brand asset value was historically called ‘goodwill' by accountants. (B. VanAuken, 2003) Elements of a strong brand include: 

the brand's intended marketplace position (including its unique value proposition) and its strategy,



its identity (including its logo and its tagline),



its marketing communication and



its customer touch point design (the way it interacts with customers and potential customers at each point of customer contact).

Through proper brand management, brands can be built, strengthened, extended into new product/service categories and leveraged in a myriad of other ways. Branding is all about bringing an organization and its story to life in ways that capture the attention and support of the brand's intended customers and other stakeholders.

Source: http://brandcool.com/branding-101.html (Online; accessed on 12.05.2010) 6.1. Mitsubishi Evolution In the following chapter we will analyze recent marketing and management issues influencing brand awareness and attitude toward the brand. Based on the Business Plan, following chapter reveals most common results of the Mitsubishi Motors Company reached on global level up to date. Mitsubishi Motors Corporation (MMC) announced a new mid-term business plan, called Step Up 2010, for fiscal years 2008 through 2010 (ending March 31, 2011). "Stepping up" from the Revitalization Plan to a new stage in which MMC will build a base for sustainable growth through application of a basic policy of "bolstering its strengths and securing steady profits". A link to the full text of the business-plan is given at the Reference (webpage N9); here we will tackle upon major elements concerning automobile production.



Differentiation through new technological improvement and sustainability

According to Lance Bradley, Mitsubishi UK’s Sales and Marketing Director the new Lancer Evolution X is drawing some unlikely new customers to Mitsubishi from premium German manufacturers as well as other Japanese competitors. A study of Evo X buyers since its launch in the UK this March has revealed some startling statistics - which 38 percent of Twin Clutch SST buyers have switched over from premium German brands such as BMW, Audi and Mercedes – with a further 31 percent defecting from competing Japanese brands such as Subaru. Sales of the manual transmission however have been dominated by existing Evo owners, accounting for 40 percent of the total with a further 19 percent from German and 20 percent from Japanese manufacturers respectively. (Car Advise Magazine, George Skentzos) 

Environmental friendly production The next generation of the Mitsubishi Evolution Lancer, the STI's arch-enemy, is

rumored to feature a plug-in hybrid powertrain. Mitsubishi has struggled in recent years, but its one bright spot is the global praise and sales success of its i-MiEV electric mini-car. And the company has been aggressively researching electric drive systems for more than a decade, with a dozen or more concept cars to show for it. Mitsubishi’s latest system combines differential electric motors with their Super All Wheel Control (S-AWC) all-wheel-drive system--already found in the Evo--plus electronically controlled active yaw control. S-AWC uses two permanent magnet synchronous motors, one each for the front and rear wheels, along with a four-cylinder MIVEC engine that also powers the front wheels or acts as a generator to recharge the lithiumion battery pack. Plans to equip Mitsubishi Evo first production models with its plug-in hybrid system is planned to take place in 2013.



Cost focus and development of new markets -

India

With the high rates of economic growth being witnessed in India, it is no wonder that the demand for luxury sedans is growing day by day. The latest company looking forward to cash-in on the trend is Mitsubishi Motors. The Japanese automobile company is all set to enter the luxury sedan category with its new model, Lancer Evolution X. Company officials explain that, Mitsubishi is planning to bring Evo 10 to India through the completely built route (import) and right now, there are no plans of making the car locally in the country. At the international level, Mitsubishi Lancer Evolution X costs $30,473 and $32,697 for different variants. With this price band, the automobile is expected to be come in direct competition with other cars like Honda Accord, Toyota Camry, Skoda Superb, Volkswagen Passat, Nissan Teana and Audi A4. The pros of Mitsubishi Lancer Evolution X will be its rugged engine and smooth driving experience, rather than interior looks. The car is a four-door, five-seater one, which is run by a 2litre engine that gives out 295 bhp power (in other words, more powerful than the 3-litre engine). It has an aluminum engine block under the hood, which makes it pretty lightweight. To add on to the experience of driving Lancer Evolution X, Mitsubishi has fitted it with a four-wheel drive (4WD) option also. -

Russia

From April 2010 the plant in Kaluga, Russia, which represents a joint initial investment of €470 million, will enable PSA (Peugeot Société Anonyme) Peugeot Citroën and Mitsubishi Motors Corporation to become major players in the Russian automotive market, whose growth potential is significant. The plant will be fully operational in 2012. From that date, the annual production capacity of the plant will be 125,000 units, split 85,000 mid-range sedan vehicles for Peugeot and Citroën and 40,000 mid-range SUVs for Peugeot, Citroën and Mitsubishi. Takashi Nishioka, MMC president, declared that "Russia will continue to be a strategically significant market for Mitsubishi Motors in the years to come. We hope that this

operation will be a cornerstone in our efforts to grow our Russian business in the mid- and longterm and hope that we can contribute to the development of Russia’s automobile industry." Important to note that both countries belong to BRIC (Brazil, Russia, India and China) the acronym was prominently used by Jim O'Neill of Goldman Sachs in 2001.Goldman Sachs argued that, since they are developing rapidly, by 2050 the combined economies of the BRICs could eclipse the combined economies of the current richest countries of the world. (Financial Times, 09/2008) Site

Kaluga, Russia

Location

180 km South-West of Moscow

Management

Didier Aleton, Managing Director Masayuki Imada, Deputy Managing Director

Surface area

About 145 hectares Adjacent to a 30-hectare supplier park

Nature of site Auto manufacturing (ironwork, paint and assembling) Production capacity

125,000 vehicles per year (in three shifts)

Vehicles produced

Mid-range sedan vehicles for Peugeot and Citroen Mid-range SUVs for Mitsubishi, Peugeot and Citroën

Initial Investment

€470 million

Production starts

2010

Headcount (recruitment)

About 3,000 employees

Source: “On-line news room”, [Online], Available at: http://media.mitsubishicars.com [Accessed on 8-05-2010]



Brand awareness and new dealer net in the US

Evoking the spirit of the competition, Rallyart which is a subsidiary of MMC, promotes Mitsubishi sport vehicles and improves the basic performance through motorsports, with roads all over the world as a stage and had created a the cornerstone of car construction for which Mitsubishi Motors aims. Essential to development of motorsport vehicles that participate in a number of motorsport events around the world, Ralliart is a flagman of Mitsubishi Motors.

Prominent company helps to establish a new trend in motorsport industry, and a new market for tuning, upgrading and selling sport vehicles. Since 90s Mitsubishi series of ever evolving Evolutions was backed by WRC history and Tomi Makkinen victories made Lancer Evolution VI exceptionally popular. Same counts for Dakar 12 victories of the most harsh and demanding motorsport event on the planet. Successful marketing decision to picture Lancer Evolution at a number of Hollywood movies and regular featuring in series of video games by Sony PlayStation, Xbox, and PCs turned rally automobile into “new religion”. Very prominent is the competition of two vehicles (Evo and Impreza) as only two 4-door family cars but with 2-liters turbocharged engines, all wheel control systems and independent suspension.

Sources: Movie shot “Too fast, too furious”, 2003, featuring Mitsubishi VII and Spider; Tuned Mitsubishi Evo VIII and Subaru Impreza Sti, Need for Speed video game

6.2. Subaru Impreza STI The Subaru Impreza STI, (formerly WRX STi, officially changed in 2006 to STI) is the highest standard-edition trim in the Subaru Impreza compact car line, produced by Japanese automaker Subaru. In the late 1980s, Subaru created the Subaru Tecnica International (STI) division to coordinate development for the FIA World Rally Championship and other motorsports activities. After the company had grown, the division was used to create high-performance consumer versions of the Subaru Impreza WRX, an all-wheel drive car with a turbocharged boxer engine, leading to the development of the Impreza WRX STi. The Subaru World Rally Team has used a race-prepared version of the WRX STI as its rally platform since the model trim's creation. 40

Analyzing marketing approach used by the Subaru regional web-pages and interviewing local marketing representative one can conclude that there is no such prone-rallying or motorsport associate technique used in brand development and advertisement in comparison to Mitsubishi Motors. Subaru Impreza brand is all well known brand, but there is a financially lacking approach to sustain on building a brand image Cyprus. There are three dealers’ showrooms in three major cities (Nicosia, Limassol and Larnaca). Main principles of brand development are limited to these: -

Potent turbocharged “boxer” engine (Subaru BOXER engines mirror the action of a boxer’s punch, literally. The pistons lie low and horizontal rather than the more common vertical position so the engine isn’t as tall giving it a lower centre of gravity and near perfect equal balance. Additionally, the opposing piston motions counteract each other to reduce vibration and the whole engine unit sits lower to reduce roll on corners giving a responsible, predictable and ultimately safe driving experience. )

Permanent Symmetrical All-Wheel Drive (AWD) system

Excellent safety reputation—including top results in all tests and IIHS Top Safety Pick status

While the global automotive industry put the economic crisis at the back of its mind now, it actively gets into the act of innovating not only technologies of future but also production and business techniques. Sport car segments are extremely competitive, with multiple brands competing for “share of mind” in the battle for overall market share. In the case of Mitsubishi Evo and Subaru Impreza the competing products and services have very similar feature sets and price points that are available through comparable channels. Brand is the key discriminating factor in a customer’s decision to select one product over another. There have been made some significant gains in building both brand and team recognition while showcasing the performance capabilities of the Subaru Impreza WRX STI according to James Han, motorsports marketing manager for Subaru of America, Inc. The following part unveils ‘Consumer Reports 2010 Car Brand Perception Survey’ results underlining successive development of distinguishing brand image of Subaru.

Issues and Subaru Impreza Sti review results: Fuji Heavy Industries, the parent company of Subaru, is currently in a partial partnership with Toyota Motor Corporation, which owns 16.5% of FHI. The joint-venture between Subaru and Toyota has already started presenting small problems for one of the Japanese manufacturers. Subaru’s marketing gurus are working hard trying to figure out how to sell a rear-wheel-drive sports car when they have spent the last 15 years promoting all-wheel-drive. Brand cannibalism is an issue together with the brand ‘loyalists’ complaining about the changes implemented with a 2008 redesign. Company responded during New York Motor show April, 2010 depicting return to ‘classic’ 4-door sedan backed by a carbon wing. Nowadays, car manufacturers, including Subaru, are working with very tight margins and cannot afford to invest in programs that do not demonstrably improve their market position. With marketing costs increasing, managers need objective input to make budget decisions for the marketing activities.

6.2. 1.Subaru Impreza WRX brand perception survey Despite experiencing one of the most turbulent years ever in the automotive market, Chevrolet, Ford, and Subaru have benefited from a dramatic increase in overall brand perception among car owners. According to Consumer Reports 2010 Car Brand Perception Survey, all three saw at least a 30-point increase in their overall perception scores over last year's scores. The scores reflect how consumers perceive each brand in seven categories: Safety, quality, value, performance,

design/style, technology/innovation, and environmentally

friendly/green. The scores reflect consumers' total perception level of a brand across those categories, and not the actual qualities of the brand's individual vehicles. Clearly, several brands emerged from the 2009 auto crisis stronger than others, and the way consumers perceive the brands is in constant change.

Best and worst in brand perception The chart below shows the overall scores for the top and bottom 10 brands, according to Consumer Reports' 2010 Car Brand Perception Survey. Overall scores are an aggregate, reflecting a brand's total perception level across seven areas. They are rounded to the nearest whole number. The top five brands in each area are listed on the Brand perception by category pages.

Overall brand perception Best

Worst

Brand

Score

Brand

Score

Toyota

196

Hummer

Ford

141

Saab

Honda

135

Mercury

Chevrolet

124

Mazda

Volvo

Suzuki

Mercedes-Benz

Infiniti

BMW

Jeep

Cadillac

Lincoln

Subaru

Kia

Lexus

Mitsubishi

Source:

http://www.consumerreports.org/cro/cars/new-cars/news/2010/01/2010-car-brand-perceptions-

survey/overview/brand-perceptions-ov.htm

Comparing the results of this year's survey with the previous year, I have noted that marketing and news coverage can be important influences, shaping brand perception over time. Conversely, the brands that can clearly deliver on core purchase factors will make lasting 43

impressions. Subaru made a leap to third place regarding “Safety”, making 1/3 of top score. 21 percent of the respondents consider it to be a safety leader, compared with 11 percent last year. This has been a record sales year for Subaru, fueled by the impressive new Legacy and Outback, and the recently redesigned Impreza. Every Subaru model provides all-wheel drive as standard equipment. And every current model has earned the coveted Top Safety Pick designation from the Insurance Institute for Highway Safety, despite a stringent new roof-crush test added to its frontal, side-impact, and rear-crash tests. No other automaker can make that claim. For consumers, it's important to remember that brand perception often reflects distortions of reality, since surveys responses often biased by current state of mind or mood of the respondent for instance. (P. Rooks, 2000) According to Consumer Reports' 2010 Car Brand Perception Survey, Mitsubishi scored low points in all seven categories. Among the reasons for such a drastic difference between archrivals discussed in the paper are financial difficulties in the industry's worst downturn in decades; raising in price Japanese yen; low in price, cheap in interior left wrong impression of a “cheap” brand; nationalistic view in favour of All American Products (applicable for the U.S.). Controversially, John Koenig, executive vice president of Mitsubishi North America, sees Mitsubishi hitting 100,000 sales in the U.S. within three years. Mitsubishi only sold 53,986 vehicles in 2009, down 44.5 percent compared to a still depressing 2008, and that's only one sixth of the Japanese automaker's 345,111 U.S. sales in 2002. According to the official Mitsubishi North America figures for the last three month sales increased more than 9 percent compared to the previous three month period (January through March. "The gain in sales for Outlander 2010 and Lancer validates the tactics and programs we have implemented, said Shinichi Kurihara, president and CEO of Mitsubishi Motors North America. (Autoblog.com, by Chris Shunk)

7. Building customer relationship; pull marketing The business terms push and pull originated in the logistic and supply chain management, but are also widely used in marketing. In a "pull" system the consumer requests the product and "pulls" it through the delivery channel. (J. Donnelly, 2002) Yorulmaz and Tan (2001), both managers of corporate strategy, Accenture, (a global management consulting, services and outsourcing company), lists four principles for building customer relationships (website10).

The listed guidelines are in essence "pull marketing"

principles to guide the process of customer acquisition, development and retention.

According to Yorulmaz and Tan (2001), they are:

Principle 1: Target your customers to build critical mass. Learning more about customers is a key step. Product awareness should be measured and steps should be taken to increase in case there is low or no understanding of the product. Even if a unique product with innovative features is rolled out by the best marketers, the product is bound to fail if there is lack of product awareness. Customers are unique and so are their needs. Therefore customerâ&#x20AC;&#x2122;s needs should be understood and segmented into â&#x20AC;&#x2DC;needs categoriesâ&#x20AC;&#x2122;. Following which, attributes such as age, occupation should be added to develop customer profiles resulting in a well defined customer acquisition strategy for achieving critical mass. During this step, "innovators," the highly influential people who have extensive personal networks of family, friends and work colleagues should be identified. Yorulmaz and Tan (2001) explains that the innovators and the talkers have the ability to win over non-users and therefore they should be targeted first in any marketing effort. Below is an illustration of different customers. In the context of brand perception, marketers need to understand who will be the first users of Mitsubishi Evolution and Subaru WRX. Accordingly, they should be targeted first to build a critical mass.

Source:-Yorulmaz and Tan (2001), From "Killer App" to "Killer Process": Achieving Success through Strong Customer Relationships, Accenture, [Online] Available at: http://www.accenture.com/Global/Research_and_Insights/Outlook/By_Alphabet/FromStrong.htm, Accessed [11-05-10]

Principle 2: Match products to customers. For sport automobile production industry to succeed, company-producer should provide technology and services that match the customer’s needs. Basic services such as after-sale services, warranty and club membership on behalf of car dealer; and reliable, easy to drive and safe machinery on behalf of producer. In such a case, they must match a need and should not be just an extension.

Principle 3: Make acquisition a positive experience. Customer experience can be tested at three stages: awareness, relevance and purchase.  The awareness stage requires trust in a brand name associated with motorsport—either the company-producer, the local car dealer or media broadcasting—and messages targeted to specific customer segments.

 In the relevance stage, companies must go beyond traditional media and use opinion leaders to deliver tailored messages that demonstrate how the product meets segment's needs. Japanese turbocharged automobiles grow into middle-class customers in North America and Europe.  At the purchase stage, the main goal must be a smooth interaction that eliminates last-minute surprises and meets all expectations regarding performance, and payment and usage terms. In terms of automobiles, pre-purchase and after-sale stage are no less important that purchase itself. Opportunity to sign for a drive test, and after-sale guarantees are vital in creation a long-term relationship with customer. Principle 4: Develop customers—one at a time. According to Yorulmaz and Tan (2001), once customers are acquired, they must be developed to increase depth and scope of usage and leverage lifetime value. In terms of cars, once the customer’s usage patterns are identified, it is important at some point to provide personalized services. Car dealers can provide relationship based services and allow customers to personalize their purchasing preferences. For instance, some customers may prefer advice on loans and hence request the bank to provide updates on any new loan offers. Also, important issues like automobile customization must be given priority – meaning that a customer can design his own version of popular sport car according to his/her taste. Example: -

Mirror covers

Side air dam foil

Pedal kits

Gear shift knob, handbrake lever

Fog lamps, etc.

In conclusion, in order to build demand for sport cars, marketing department must first learn more about their customers. Segmenting customer needs, identifying their demographics can lead to a well defined customer acquisition strategy. During this stage, the innovators should be identified as they will be the first to appreciate performance of a car. Secondly, local deal showrooms must match the service to the customer needs. The delivery of service should be seamless to provide a positive customer experience which is crucial while adopting new

technologies. Each customer should be developed over time using relationship based services and trying to provide personalized services to the customers.

Issues related to brand perception regarding Mitsubishi Evolution and

Subaru WRX

In spite of the evident benefits in development of motorsport image of new production sport vehicles, it is quite a reality that several challenges stand in the way.

The brand is gradually undermined by quarter-over-quarter revenue and profit pressures Analysis: Constant market pressures to increase revenues and profits cause a myriad of problems. One of the biggest problems is putting pressure on the brand to extend into more and more market segments to broaden its appeal and to provide for more revenue growth. This eventually comes at the expense of the meaning of the brand itself. The brands of Mitsubishi and Subaru sport versions are associated with young demographic niche of the market. Analysis: pressure over Evolution and WRX comes in a way that both car brands are low in horse power, “poor” in interior design in comparison with other same priced competitors, produce excessive engine noise. That way Mitsubishi and Subaru are not “attractive” to middleclass drivers. World financial crisis and constant grow of the petrol price put a threat to brands popularity in sensitive markets as Europe and Japan Analysis: High petrol consumption of these turbo-charged four-dour saloons is among the basic negative technical characteristics of the brand. Despite the fact that 16 mpg – urban consumption and 20 – dynamic driving, these numbers are far less than German manufacturers can offer.

Particular steps are taken in direction of integration of hybrid and/or electric engines; with no compromise to performance Mitsubishi is launching its Evo FQ-400 MR model in 2013. Negative image regarding Mitsubishi Evolution comes in a way of â&#x20AC;&#x153;stiffnessâ&#x20AC;? as a pure-breed sport car Analysis: The Impreza WRX STi's interior is more civil in nature than the Evo's. Thus making it more suitable for a every-day civil usage on public roads. Its ride is a bit more even and it's easier to drive around town, thanks to the more linear delivery of power and smoother steering response. While the Evo's sharp turn-in character is welcome on winding roads, the quick-ratio rack is a bit of a nuisance on long drives. In general, both cars lack a sense of a comfort and climate-control units, for instance, that counts bad for a high price of the vehicles. Extending the brand up to a premium segment or down to a value segment Analysis: Some companies have successfully employed this tactic to grow. Subaru is wise to broaden the appeal of the turboed Impreza to upper-class market and despite major appeal of WRX and STI for the young demographic. Company representatives believe, it is wrong to say that its customers could live every day with a version of a car that is deliberately down on power and carrying an automatic (a four-speed at that), but the 2.5 ltr engine delivers more performance than drivers could ever fully exploit during a daily commute. That makes for a car that is civilized but never caught off guard on the street and can mix it up at weekend track events. Add in the practicality of the five-door, and Subaru usher the Impreza into young adulthood. Key Point: Knowing what impact price segment extensions could have on the core brand might be done by conducting extensive consumer research before and throughout the process. There are many sub-brand and message subtleties that may be required to support such a move. Price affects quality perceptions and is an important brand-positioning cue.

3. Research Methodology Research, methodology can be defined as a systematic search for information relevant to the topic of study and subjective analysis of information collected whether it is identification of markets, emerging trends or acceptability of new technological advances. In this case ‘Brand Perception and Decision Making for Mitsubishu Evolution and Subaru Impreza WRX’, an identification of niche market is the particular topic of study. According to Jankowicz (2000), the methodology is described as an examination and justification of methods adopted when establishing any study. While, methods are described as “systematic and orderly approach taken towards the collection of data so that information can be obtained from those data” (Jankowicz, 2000). The most important condition for discriminating between methodologies is to identify the parameters of the original research questions asked. The key to defining its scope is to appreciate that research questions have both substances and form. This will give a significant clue as to what research strategy should be developed. 3.1 Review of the Research Methodology Section  Research setting  Research objectives  Research methods  Sample selection and size  Data Analysis  Ethical Issues 3.2. Research Setting Cyprus has currently 8 local Japanese car distributors, a mixture of showrooms and dealers in all major cities that are fully operational. With money not a factor, companies are looking for a bigger slice of the market through innovation in distribution, post-purchase services and perception. Traditionally, Japanese cars are popular in Cyprus due to reliability, proper match of product lines to geography (off roads, pick-ups, small cars and sport cars), long history 50

of establishment and distribution. The research will be carried out among two (Mitsubishi Motors and Fuji Heavy Industries [Subaru]) of the eight Japanese car manufacturers represented in Cyprus through relevant qualitative and quantitative techniques. These 8 Japanese cars representatives are listed below.  Toyota Motor Corporation (www.toyota.com.cy )  Honda Motor Company Ltd. (www.honda.com.cy )  Nissan Motor Company Ltd. (www.nissan.com.cy )  Suzuki Motor Corporation (http://www.tricomitis.com.cy/suzuki.htm )  Daihatsu Motor Co. Ltd. (http://www.ademosthenous.com/ )  Mazda Motor Corporation (N/A)  Mitsubishi Motors Company (www.fairways.com.cy )

√

 Subaru (Division of Fuji Heavy Industries) (www.subaru.com.cy ) √ 3.3 Research Objectives In order to select the appropriate methods for this research, it is essential to identify the research objectives. Explaining the research objective puts the target segments in perspective. Once the target is identified, choosing the suitable technique follows. These segments are identified through the research objectives. From Literature Review we have followed the history of two Japanese car manufacturers, common history of both in motorsports, recession and WRC exit, and number of other, rather technical specifications that identify these two cars as unique in the sport car market. (Objective 1) To investigate the differences in perception of Mitsubishi and Subaru brands in Cyprus and demographic profile of the end user; (Objective 2) To investigate how does the perception effects the individual buying decision criteria towards purchase a Mitsubishi Evolution and/or Subaru WRX in Cyprus; (Objective 3)To determine corrective steps in marketing communication, if needed

3.4 Research Methods

The research design to investigate the reality of the above mentioned problem is by a triangulation approach (also called "cross examination"), the combination of methodologies in the study of the same phenomenon, in the process of collecting and analyzing data. Yin (1994) state that different data collection methods can provide different perceptions of the phenomena which are useful for researchers to understand what is happening in a situation and looking for patterns which may be repeated in other similar situations. According to Hussey and Hussey (1997), it is not unusual in business to take a mixture of approaches, particularly in the methods of collecting and analyzing data because they give a broader and often complementary view of the research problem. This section will discuss the resources and the combination of qualitative and quantitative techniques utilized for this research. 3.4.1 Primary and Secondary Resources The secondary resource involves the use of existing data that has been collected for the purposes of prior studies, in order to pursue research interest that is distinct from that of the original work. Decision making, perception are relatively new phenomenon to be applied in automobile industry in Cyprus and secondary resources are derived from various sources. Information from research publications regarding perception, brand equity and the like are studied and used in this research wherever applicable. Car magazines and journals like ‘HotBurn’, ‘Road&Track’, ‘Evo’, ‘MotorTrend’ are explored to study the market highlights and the current trends in the car producing industry worldwide and in Europe. Statistics and results obtained from The Statistical Services of the Republic of Cyprus are utilized to provide richness to the literature. Also, internet sites of reviewers like Edmunds, Road and Track, Top Gear, etc. are also explored to list drive tests, polls and customers’ feedback. Most importantly, websites of the local representatives providing services in Cyprus is browsed to get a clear idea of the existing customers’ services, feedback and specialized information. In addition, information obtained from books related to the studied area were also introduced to provide depth to the literature review. Online book database at www.books.google.com proved to be useful. Primary resource is obtained through the triangulation method of combining both qualitative and quantitative techniques. According to Gay and Airasian (1999), the differences 52

between qualitative and quantitative techniques mainly result from the non-positivist perspective of the quantitative research and the positive perspective of the qualitative research. The former says that the world cannot be generalized and the latter believes that the world can be measured, understood and generalized. The qualitative research is mainly conducted through observation of survey fulfillment, personal interviews. Whereas quantitative research works mainly with the numerical data collected using questionnaire. Qualitative research tries to understand phenomena in context specific settings as they use very naturalistic approach, whereas the quantitative methods are mainly experimented and hypothetical generalizations. For the purpose of this research, personal interviews (qualitative) and questionnaire survey method (quantitative) are used.

3.4.2 Informal, open-ended question Interviews According to Fetterman (2010), interview is the most important data-gathering technique. Denzin and Lincoln (1994) stated that an interview is a technique that finds the interviewer directing the interaction and inquiry in either a structured or unstructured manner, depending on the research purpose. Van Maanen (1983) identified the advantage of in-depth interviews and according to him it is an inductive approach as the data is collected slowly and incrementally where a time gap exists between each interview which permits careful analysis by synthesizing and interpreting each interview before conducting more. This approach has an advantage over the focus groups as it provides an opportunity of flexibility in meeting independent drivers in order to gain their perceptions and attitudes. One of the objectives is to investigate the reasons driving car manufacturers and distributors towards importance of brand perception and equity (Objective 1). However, it’s the informal and open-ended interview is designed to approach (Objective 2). Informal interviews seems to be casual conversations, but whereas structured have an explicit agendas, informal interviews have specific but implicit research agenda. Informal interviews are useful in discovering what people think and how one person’s perception compares with another one’s (Fetterman, 2010). Hence, this research method is most appropriate for Objective 2. To fulfill this objective, open-ended interview questions were developed for users opinions focusing on: 

What are the reasons beyond purchase this particular sport car brand 53



Perception toward brand (pre-/post-purchase comparison)



Satisfaction of key car features



Its scope in Cyprus. Fetterman argues, that despite ignoring specific order and types of questions in ‘informal

interview’, questions progress along the interview and turns participant’s interest. Nevertheless, these interviews are some of the most difficult to control and often face ethical issues and problems.

3.4.3 Questionnaire Survey Stroh (2000) explains that through a questionnaire, a large number of people’s views can be explored. The objective 1 of the research is to investigate perception of Mitsubishi and Subaru brands in Cyprus and demographic profile of the end user. Apart, this method will be useful for objective 2 as the researcher intends to explore a large number of people’s views on the same issues. Miller (2002), state that statistically it is believed that a large sample size of questionnaires is designed for unbiased statistical results which can be implied for the whole population. The aim of the questionnaire is to maintain relevance and accuracy so as not to obtain unnecessary information and the information gathered is valid and accurate in such a way that all research objectives are achieved. For this purpose, only the present Mitsubishi Evolution and Subaru Impreza users were chosen from the public and a structured questionnaire was to focus on: 

Demographic profile of current user



Perception toward Mitsubishi Evolution and Subaru Impreza car brands in Cyprus



Concerns for media coverage



A level of key automobile features satisfaction The format of the Brand Perception questionnaire consists of three sections. The first

section involves requesting respondents to fill in the demographic characteristics. The second 54

section will follow the ‘determinant choice’ structure giving respondents 4-5 alternatives to choose from. It will include general questions exploring the reasons, attitudes, perception of Mitsubishi and Subaru brands. For instance, a question from the second section of the questionnaire is mentioned below: Example: 3. What were your reasons to purchase this car brand?

□ I need a transport vehicle to get from A to B □ I need a sport car with a space for the rest of my family □ Price – performance relationship □ I am a fan of WRC (World Rally Championship) and other motorsport □ It is cool and popular □ If other, please state …………………………………………………… Complete copy of the questionnaire used to collect research data is attached as Appendix 4b. There is no hard and fast rule on how to make the best questionnaire but there are certain guidelines, which will be followed, for example, avoiding leading questions, loaded questions, counter biasing statement, etc. As most of the people in Cyprus are bilingual and have a good command of the English language, the questionnaire will be worded in English. Even then, the respondents will be aided and monitored in filling the questionnaire to obtain precise views and avoid error. To maximize the speed, and collecting data at various ‘stop and go’ driver spots (Petrol stations, self wash stations, etc) some of the questionnaires were filled up by the author, after reading and, if needed, explaining the meaning and details.

3.5 Sample Selection and Size To satisfy Objective 1, 60 (sixty) current car users were identified and approached. Regarding objective 2 ten (10) informal interviews were designed. Due to time constraints, the interview number of respondents was limited to ten respected drivers of sport cars produced by Fuji Motors and Mitsubishi Motors companies in Cyprus. Below is a description of each individual. Nicos

Gender

Age

Occupation

male

garage owner, Lower middle Limassol,

Stamathakis Alexandros

Social class

mechanic male

class

student,

City

Ypsonas Limassol

Intercollege Limassol Vladimir Dus

male

Four

Seasons Working class

Limassol

Hotel Employee Constantinos

male

sound engineer

Working class

Limassol

male

car painter

Working class

Limassol

male

LeMeridien

Working class

Limassol

Working class

Limassol

Haralambous Panayotis Beckris George Evripidou

Spa&Resort Employee

Michele

male

chef de cousin

Muletti Costas Ziogas Panayotis

male

unemployed

Limassol

beach

Limassol

water Working class

sports attendant Kiriacos

male

car mechanic, Lower middle Limassol co-owns

a class

garage

For objective 1, the sample will include identified Japanese brands users who are currently driving one of the cars only. This will help the researcher to identify and highlight issues concerning of a quite narrow niche of local market. For instance, user may express an extreme sport lifestyle and motorsport media as a social reason influencing them to create positive attitude while the perception of might be stagnating due to high prices or spare parts as a reason for changing the car or the car brand in general. The sample size is limited to 60 (sixty) as a result of time and financial constraints. A major issue regarding search of sufficient number of identified car users are insufficient Internet data regarding sport car enthusiasts clubs, late hours of usage, little information about car users and scare of giving answers to unknown researcher. The post-market tuning of the identified car brands, is prosecuted in Cyprus, thus needless to mention of scare of the police and questions of finances. The convenience sample may not be representative of the entire potential market, so we cannot confidently generalize the findings to represent the population. The results of this study give readers’ a general idea in terms of individual decision making and user’s perceptions regarding two Japanese sport cars. More detailed research is suggested, including usage patterns of different sport car users. Future research should employ probability sampling on a wide range of subjects to ensure generalizability of the findings.

3.6 Data Analysis Based on the information collected, investigation, evaluation and discussion will be established in the thesis paper. As for the questionnaire survey data, it will be analyzed by using the Statistical Package for the Social Sciences (SPPS), version 12.0. The informal interviews will be analyzed manually and summarized while they are still “fresh” in order to avoid stacking interviews. The qualitative nature of this research might result in subjective findings however; all efforts will be made to keep bias out of final result by summarizing all the interviews collectively.

3.7 Ethical Issues Since the proposed research contains both a survey questionnaire and an informal, open-ended interview; the roles of a researcher and interviewer are important (Fontana and Frey, 2000, p.662). This role includes not only interviewing manners such as neutrality and manner before, during and after interviews but also other ethical issues such as confidentiality and anonymity. For instance, the information provided by the car drivers might be vital to brand survival in sport car industry. Therefore once the information is obtained, confidentiality agreement is necessary. These issues will be in the mind of the researcher to ensure that personal and moral values are not violated.

3.8 Strategic Analysis of sport car industry in Cyprus According to Barnes and Corbitt (2003), the complexity of the brand management challenge increases considerably when brand management penetrates to the heart of a firm’s (or industry’s) strategy. Thus, in order to understand the impacts of the brand perception we need a comprehensive strategic framework. Porter (1980) provides such a framework, and argues that an industry segment, such as the automobile industry is the result of five basic forces. This section aims to provide an analysis of the Mitsubishi/Subaru brand management from a strategic viewpoint. 3.8.1 Rivalry Highly competitive industries generally earn low returns because the cost of competition is high. The auto industry is considered to be an oligopoly, which helps to minimize the effects of price-based competition. The automakers understand that price-based competition does not necessarily lead to increases in the size of the marketplace; historically they have tried to avoid price-based competition, but more recently the competition has intensified - rebates, preferred financing and long-term warranties have helped to lure in customers, but they also put pressure on the profit margins for vehicle sales. Cypriot sport car importers might be grouped into two categories: luxury (Lotus, Larbongini) and premium (Audi, BMW, Honda, Nissan). Basically, Japanese companies are considered to be high in ‘price-performance’ ratio.

In Cyprus, rivalry is not at a cut-throat level with few car importers focusing on building relationships with customers at a young age rather than trying to lure established customers from competitors. Cypriot automobile industry is considered to be disciplined, resulted from the geographical position and regulated economy; the role of a leading firm and informal compliance with a generally understood code of conduct. Explicit collusion generally is illegal and not an option. 3.8.2 New Entrants According to Barnes and Corbitt (2003), the threat of new entrants in a sector of economy depends on the level of customer perceptions. If the customer perceptions are strong, then there is a real threat for a suitably positioned new entrant to build customer value. Perhaps an even larger threat exists from local well-presented car dealerships as they already possess a powerful

relationship with customers, developed distribution channels,

after-sale services, bank loans program, etc. Notwithstanding, the barriers to entry for carimport industry are high. In order to enter the market a potential entrant must have an excellent knowledge of the market and consumer. The capital cost is also very high in terms of the land, building spending. 3.8.3 Substitutes A key threat to the viability of sport car dealership is the availability of substitutes for the consumer.

Due to common rallying history and hosting the WRC (World Rally

Championship) event in Cyprus for more than two decades, Mitsubishi Evolution and Subaru Impreza are popular among the population for its motorsport solid image, high performance in hot climate conditions and distribution. The Cyprus Automobile Association (CAA) was established in 1933 is the organiser of the Cyprus Rally and the National Rally Championship. In terms of the origin of the popularity and common technical features two brands are substitute products. According to Porter (1980) the existence of products outside of the realm of the common product boundaries increases the propensity of customers to switch to alternative.

3.8.4 Buyers Historically, the bargaining power of automakers went unchallenged. The Cypriot consumer, however, became disenchanted with many of the products being offered by certain automakers and began looking for alternatives. On the other hand, while consumers are very price sensitive, they don't have much buying power as they never purchase huge volumes of cars.

Source: Cyprus Statistical Service, Registration of Motor Vehicles, Jan - Apr 2010

Recent years, according to the Cyprus Statistical Services, we can monitor the diminishing numbers of purchased private saloon vehicles (50% decline for January during 2007-2010). Buying power concerning car industry is low, due to fragmentation (many, different) - no buyer has any particular influence on product or price and significant buyer switching costs - products not standardized and buyer cannot easily switch to another product.

3.8.5 Suppliers The main suppliers of sport automobiles in Cyprus are the official distributors (e.g. Fairways) and small dealer shops. The distributors have the rights to import and sell brand new cars; on the other side â&#x20AC;&#x201C; dealers mainly sell used cars, however are able to acquire special rights to import brand new cars as well. However, Barnes and Corbitt (2003) state that the companies involved in automobile services, providing the infrastructure and pre-sale (test-drives) and postsale services are also an important part of the value chain. Without appropriate competencies in the development and supply, distributors cannot reach the consumer market. The automobile supply business is quite fragmented (significant number of firms). Many suppliers rely on one or 60

two automakers to buy a majority of their products. If an automaker decided to switch suppliers, it could be devastating to the previous supplier's business. As a result, suppliers are extremely susceptible to the demands and requirements of the automobile manufacturer and hold very little power. To conclude, the automobile supply in Cyprus is relatively in a mature stage. With all the major car manufacturers presented on the island, the efforts to attract customers change to nonprice competition. In spite of the additional costs involved, because it is usually more profitable than selling for a lower price, and avoids the risk of a price war. 3.8.6 Conclusion With the effort for gaining competitive advantage shifted towards non-price factors, car distributors seek to increase a product's perceived value to the customer and thereby increase brand franchise and brand equity. Study on brand perception is essential in order to analyze current ‘state of affairs’ and to make next steps in brand management. The ever-increasing spread of various media in Cyprus, enable companies to reach their market more efficient and makes easier involvement of promotional expenditures, (such as advertising, selling staff, sales promotions, coupons, special orders, or free gifts). Car distribution services can be classified in two ways. Depending on the originator of a service session, these services can be classified as “Push/Pull” nature. ‘Push’ is when the car dealer or distributor sends out information based upon an agreed set of rules while Pull’ is when the customer explicitly requests a service or information from the car importing company. Potential Benefits of brand management such as increase in sales through improved image, customer acquisition, brand equity, should improve the profitability of a brand. Research by McKinsey & Company, a global consulting firm, in 2000 suggested that strong, well-leveraged brands produce higher returns to shareholders than weaker, narrower brands. (mckinsey.com) Factors such as relative advantage, complexity, brand perception that influence the brand management throughout a social system must be considered to determine the success/failure of sport car distribution in Cyprus. In order to build demand for sport automobiles Mitsubishi Motors and Fuji Heavy Industries must first learn more about their customers. Design steps to improve usability and accessibility need to take into consideration the customer experience. In Cyprus, sport car distribution is limited due to size of the market, higher taxes and lack of specialized sport car facilities for cross-rallying, drifting, etc. 61

In brief the literature review of practical issues and studies on brand perception and decision making in sport car industry is limited and provides only a very broad picture on the topic. Most of the authors have very different perspective on the topic, but it can be seen that sport car industry is certainly evolving. The very competitive nature of the present business environment has forced car manufacturers and distributors to go for multi channel marketing and better customer relationships to enhance the life time value of customers. The keys to success are all in the management of expectations and delivery to the end users. Experts suggest that the brand management should be used to deepen the relationships with customers and help them to bias to one’s brand at decision making process.

3.9 Gaps Identified in the Literature review Crucial to notice, that the literature review of perception and decision making provides only a very broad, theoretical ‘picture’ on the topic as the field is tackled to psychological, debatable area of consumer behavior. Hence nothing concrete emerges in connection with practical aspects of nowadays sport car industry in Cyprus. Most of the authors have very different perspective on the topic, but it can be seen that brand management is a realm of the industry and practical steps are being integrated into the strategy. This research is restricted to two similar Japanese sport car brands that share similar history in the past – Mitsubishi Lancer Evolution and Subaru Impreza WRX. There is a large gap that exists between the theoretical data, marketing implementations in larger countries around the globe and Cyprus. Since this is a two way interactive process there are various cultural issues involved, but this research will not address them. And finally there is a gap in literature about the financial viability of brand management on profitability as revenue increment is the main reason why this paper is written. As this is an evolving topic in Cyprus and still in developing stage, there is no exact write-ups on the customer perceptions regarding sport car usage, which the primary research will try to analyze.

4. Primary Data Results and Analysis of Findings The purpose of this section is to publish the actual results of the primary research work, analyse the findings comparing it with secondary research. Results section deals with the production of results on the key issues explored in the research. Analysis of findings section deals with the analysis of the results from the primary research in comparison with the literature from secondary research.

4.1. Primary Data Results for Objective 1 Objective 1 of our research is to investigate the differences in perception of Mitsubishi and Subaru brands in Cyprus and demographic profile of the end user. To fulfill this objective, a quantitative approach was used. The results obtained are illustrated through bar, line and area graphs and published in APPENDIX 2. As earlier indicated, the questionnaire is divided into two sections and results are provided below accordingly. In Section-I, the demographic characteristics of the respondents are investigated.

Age : Majority of the respondents (56.7%) surveyed were between 18-25 years old, followed by 33.3% of aged between 26-30, and only 10% were in between 31-35 years old.

Education: More than half of the respondents (60%) have a diploma. In addition, 10% of the respondents have an educational qualification of a ‘degree and above’ while 20% are educated upto ‘secondary level’.

Gender: 86.7 % of the respondents were males while 13.3% of the respondents were females.

Occupation The occupation of the respondents varied significantly without any visible pattern. The industry demographic is more applicable for analysis. However, important to notice that one third of the sample were mechanics, garage owners or in some other way connected with automobile industry.

Industry: - Most of the respondents (40%) were in the ‘services’ industry followed by 26.6% of the respondents in the ‘hospitality’ industry. Significant proportion (26.7%) of the respondents was in the ‘other’ sector, meaning, that they were either unemployed or students. Section-II includes general questions exploring the reasons, preferences, knowledge of the brand and brand equity of Mitsubishi and Subaru brands customers.

(Q1) splits identified market segment into users of one of the identified in the project sport car brands. Among the approached drivers (66.7%) or two/thirds were the drivers of Mitsubishi Evolution and remaining (33.3%) were the drivers of Subaru Impreza WRX.

(Q2) relates to the level of product satisfaction and identifies the reasons of dissatisfaction. Five most common reasons to dislike a car product were chosen, like efficiency, comfort, reliability, performance and upkeep. Absolute majority (80%) of the respondents were satisfied with the chosen product and the remaining 20 % of ‘dissatisfied’ customers stated equally major car product problems, but with aspect on ‘cap upkeep’ – 10%.

(Q3) was used to generate reasons to purchase one of the sport-car brands. Majority of the respondents (30%) stated ‘sport car with space for the family’, otherwise 4door sport car as a reason to purchase identified car brand. Followed by 20% ‘popularity’ proportion of the respondents. Remaining respondents were stating the ‘price-performance’ (13.3%), WRC heritage (16.7%) were the reasons beyond the purchase of the car. In ‘others’ that counts for (6.7%) of the respondents, car users were either pursuing safety of 4 wheel drive or ‘all above elements’. (Q4) was generated to evaluate major five sport car features using the rate scale, where ‘1’ is very low quality, poor performance, expensive, inefficient; and on the opposite side of the ‘scale’ ‘5’ states excellence, efficiency, reliability, etc.

(Q4a) according to the survey, ‘price’ of the Mitsubishi and Subaru sport cars and spare parts, other gadgets were generally positive were 33.3% of the respondents states the price to be ‘good’, and equally 23.3% were prone to either ‘OK’ or ‘Excellent’. Only 16.7% stated the price to be too high and 3.3% were negative toward price charged at the market. (Q4b) appreciating the ‘performance’ the dominant responses were (76.6%) ‘excellent’ and (23.4%) ‘good’. There is no data received stating ‘bad’ or ‘unsatisfying’ performance of both automobiles.

(Q4c) there is more spreading data regarding the reliability of Mitsubishi and Subaru sport cars. So, ‘half’ (50%) of the respondents stated ‘reliability’ as ‘excellent’ and (33.3%) to be ‘good’. However, (6.7%) of the respondents mentioned negative expressions regarding ‘reliability’, stating ‘very bad’ and just ‘OK’. Remaining (3.3%) stated negative impressions concerning ‘reliability’ too. (Q4d) most of the respondents (46.7%) rate the ‘efficiency’ to be “OK”, whereas (36.7%) rated their cars to be inefficient and to consume up to 20 ltr/100 km in ‘dynamic’ mode. Only (3.3%) rated ‘efficiency’ as ‘good’, and 6.7% as ‘excellent’. (Q4e) 2/3 of the respondents were ‘positive’ about ‘safety’ aspect of their automobiles. So, (20%) rated it as ‘good’, and (50.7%) as ‘excellent’. 13.3% believed ‘safety’ of the vehicles to be ‘OK’, remaining (13.3%) did not consider their vehicles to have enough safety measures.

(Q5) in question number five, respondents were asked if they plan to change their vehicles. According to the survey, (36.7%) would like or plan to change their vehicle, but stick to the same car brand; basically ‘to upgrade’ the vehicle; (46.7%) of the respondents were ‘satisfied’ with current car, and do not plan to change in the near future. Remaining (16.7%) would like to change their car for a different automobile, and the preference was given either to smaller or more efficient, cheaper to maintain vehicles.

(Q6) in an attempt to tailer Mitsubishi Evolution and Subaru Impreza cars rallying history, and basically this models existence, question number 6 was asked. Basically, half of the respondents (53.3%) of the respondents show interest in WRC and other motor sports in various ways. And (46.7%) show little or no interest in WRC and other motorsport events.

(Q7) following the question #6, question #7 was asked to find out if the identified car drivers gather information regarding sport car industry from various data sources, like sport car magazines, web-pages, car-forums, etc. The results received, showed following, (40%) browse sport car data ‘occasionally’ and (20%) do so ‘once per week’. ‘Every day’ respondents check the car industry news (13.3%) and ‘never’ remaining (20%) of the respondents. (Q8) was asked to collect data regarding ‘influencers’ of the a sport-car purchase. Majority of the respondents stated that buying decision was based and/or influenced by either friends or family members - (46.7%). On the other hand, based on the personal experience purchase was done by (23.3%). Only few respondents stated that involvement of the mass media (6.7%) and distributors, showrooms (3.3%) influenced purchasing decision. Sufficient (20%) of the respondents stated that various mentioned above “all above” aspects were summed to make a decision. (Q9) is a simple question designed to tailor brand image and ‘likeliness’ of the used car color. Interesting conclusion can be done on the received information, whereas (53.3%) of the respondents do not believe that the ‘standard’ brand image color suits their automobile; they do prefer /use another color. Interesting that (26.7%) preferring ‘blue’ color, basically are drivers of Subaru Impreza, that is being show in advertisement in blue color. Only (20%) would like/drive cars in ‘red’ color.

(Q10) (66.7%) of the respondents do not belong, and do not plan to join any automobile organization. (16.7%) of the respondents would like to become members of either Cyprus Automobile Association or Club. (13.3%) of the respondents currently belong to various car clubs in Limassol and Cyprus. Remaining (3.3%) belong to Cyprus Automobile Association. 66

4.2. Primary Data Results for Objective 2 Objective 2 of our research is to investigate how does the perception effects the individual buying decision criteria towards purchase a Mitsubishi Evolution and/or Subaru WRX in Cyprus. In order to fulfill this objective, informal, open-ended interviews with actual drivers were conducted. The results of the interviews are published separately in APPENDIX 1. A summary of the results of the ten interviews are listed below.

Interview 1 with George Evripidou, who is driving Subaru Impreza Sti, model for more than one year. George is a hotel employee and that is his second Impreza after an accident last year. Being a great fan of an automobile, George doesn’t belong to Subaru club, or any other organization. According to him, the reason to purchase this expensive automobile was to “distinguish himself as a driver, safety of a four-wheel drive and thrilling ‘boxer’ engine sound”. Mainly using the car for transportation, George’s disappointment is high petrol consumption, but drivers like him ready to take extra expenses. Not necessary competing, drivers like George realize competitive spirit and speak a lot of the arch-rivals, like Mitsubishi, Nissan and Mazda. The car was second-hand purchased, and difficult financially to acquire. George like greay color of his car, but would prefer ‘classic’ blue with yellow rims. Being a big fan of WRC, George follows particularly this motor sport and is looking forward next year’s [WRC Round Cyprus] return to Cyprus. Interview 2 with Nicos Stamathakis, who is a Subaru Impreza driver for over three years now. Nicos belongs to Subaru Fan Club in Limassol and spends most of his time in privately owned garage in Ypsonas village outside Limassol. According to Nicos, car purchase and post-purchase modifications cost him a coin, but the enthusiasm and pleasure of driving are worth of investment. “Club organizes frequent drift racings in Larnaca”, where he can meet other drivers to compete apart from the night, illegal, street racings or merely evening driving at Amathountas Avenue, Limassol. Nicos is not much into motorsport, knows about WRC and Cyprus as a host country. Difficult to purchase and expensive to maintain, this particular car gives him a sense of prestige, safety and performance. Interview 3 with Michelle Muletti, an Italian born chef de cousine at of the Limassol restaurants. Michele drives Mitsubishi Evolution VII since arriving to an island in 2006. Having driven 67

similar car back in Italy, Michele is a big fan of Evolution and Italian WRC star G.Galli. Not necessarily competing, Michele spends most of his free time inside a car. Being asked of the history and meaning of the car name and symbol, Michele showed a good knowledge. Particularly liking red color, Michele seeks to distinguish himself as a driver of his favorite car. Admitting high monetary expenses, it was difficult to acquire particularly this car in Cyprus.

Interview 4 with Alexandros who is a Mitsubishi Evolution XI MR, 2006 driver. Alexandros is 22 and currently is a student at Intercollege, Limassol. Being a student, all the purchase burden fall on his parents. Notable young, Alexandros drives first car in his life for no more than one year. Without particular knowledge of the car history and the brand, he enjoys driving such a prominent car on the streets in Limassol.

Interview 5 with Panayotis Beckris, a Mitsubishi Evolution V driver. Panayotis is a car painter and currently owns 4 (four) different models and years of production Evolution car at his garage! Owning such a big number of car of the same brand is not typical, and probably explained with a commercial interests. Panayotis drives white Evo and doesn’t distinguish himself much as a driver of a sport car, but merely a popular and reliable automobile. Prefers white color, and quite ‘illiterate’ regarding car history and media coverage. Panayotis, being professionally involved in car industry in Cyprus, believes that there in minimum competition between Subaru and Mitsubishi, but insists that Mitsubishi is superior due to higher reliability and spare parts acquires.

Interview 6 with Costas Ziogas, a Mitsubishi Evolution VIII driver since two years. Costas admits that “the purchase was influenced by his friends”, not enthusiastic about the motorsport itself, Costas enjoys driving his ‘prominent’ red Evo VIII together with his friends.

Interview 7 was done with staying in Cyprus born Czech Vladimir Dus. Vladimir is a prominent Subaru Impreza Sti enthusiast and driver. Particularly difficult acquired, Vladimir value his car a lot, noting that sufficient expenses start after the actual purchase. Vladimir is an employee at five star hotel in Cyprus and do not belong to local clubs, adding ‘perhaps, in the future’. The car was ordered from England and is 7 years old. Being a fan of WRC, Vladimir browses various data 68

concerning Subaru, and motorsport in the Internet. According to Vladimir, his ‘attachment’ with a car started long before introduction to WRC. Agrees that there is a commercial competition between Mitsubishi and Subaru exploited in media and chooses Subaru for its looks and sound, development of symmetrical four-wheel drive

Interview 8 with Constantinos, a 28-year old Mitsubishi Evo driver, studied in Great Britain, where he first driven this car. Today Constantinos is a member of Mitsubishi Evolution Club in Limassol and has ‘various jobs’, but now he works as a sound engineer at Sigma TV channel. Just like many fellow-drivers, great expenses according to Constantinos counts on post-sale tuning, spare parts and petrol. Agreeing that a car “distinguishes him as driver” , he doesn’t believe in some sort of specific in competition between Subaru and Mitsubishi, at least no more then with other sport cars. Good technical knowledge is not maintained with knowledge of brand meaning, and rallying history.

Interview 9 with Kiriakos, a car mechanic and co-owner of a garage in Limassol. Kiriakos graduated local technical college with Diploma in Mitsubishi Evo tuning techniques. Kiriakos drives a tuned Evo VII and is a big car enthusiast. Non-member of car club, he admits “occasional participation at various local competitions”. Believes, that in Cyprus there is “competition between identified car brands”. “Most of the automobile are tuned, very few cars on the streets actually represent ‘authentic’ Evo and WRX models, but market-tuned cars.” Definitely, Japanese cars are most popular in Cyprus, and Mitsubishi and Subaru are very prominent examples. A well established Mitsubishi brand (1967 – first established Fairways distributor of Mitsubishi in Cyprus) explains popularity of Mitsubishi in general and Evo particularly due to its reliability.

Interview 10 with Panayotis, a 24-years old Mitsubishi Evo III driver. Panayotis is into water sports industry, “keen on extreme sports and believes that his first Evo gives him ‘thrill’ through driving”. A decision to purchase this car is due to friends’ advice and popularity of the brand on island. Panayotis doesn’t know much about competition between Subaru and Mitsubishi, but knows of the rallying heritage of Mitsubishi (“two manufacturer’s titles won by Tommi

Makonnen for Mitsubishi Motors”). Admits that acquiring an older version was not difficult, but plans to change it for a newer version in due time. 4.3 Analysis of findings for objective 1 Objective 1 of the research is to investigate the differences in perception of Mitsubishi Evolution and Subaru Impreza WRX brands in Cyprus and demographic profile of the end user. Comparing the literature review from secondary research with primary data results for objective 1, the perception of Mitsubishi and Subaru in Cyprus is: a) Given the variations in education, age, sex, cultural backgrounds and expectation the survey gives us an opportunity to draw up a Mitsubishi Evolution and Subaru Impreza driver’s profile in Cyprus An average Mitsubishi/Subaru driver is -aged between 18-25 years (56.7%), 26-30 – (33%), 34-35 – (10%) -is a male (86.7%) of the respondents, female (13.3%) -has graduated college/received a high diploma (60%), finished high school (30%), received a Degree (10%) - owns a garage/is a mechanic (33.3%), employee in hospitality industry (33.3%), or a student (33%) - based on the above data, and survey the majority of the car owners are involved in services (40%) and hospitality (23.3%) Based on the basic demographic profile, we can define a group of customers that share a similar set of need and wants. Thus we can distinguish car buyers who are young, educated, males employed in services sector of economy. Having in mind a distinct set of needs of this sector, being ready to pay ‘premium’ for extra car insurance and services, we deal with a niche

market – narrowly defined customer group seeking a distinctive mix of benefits. Another characteristic of this segment of a market is a specialization, and few rivals. (P. Kotler, 2005) b) There were no major product perception pattern identified According to the survey results, there were no major Mitsubishi/Subaru perception model identified, on the other hand the respondents broke into various groups, resulting: -

Spacious Japanese turbocharged automobile (30%)

Popular, easy to drive automobile (20%)

An automobile with distinct rallying history (16.7%)

High ‘price-performance’ ratio (13.3%)

On the basis of the above information, a gap of marketing communication was identified, were car distributors lack proper media brand image coverage in the market of Cyprus. Although, there is agreement about basic principles, a number of models of brand equity offer some different perspectives. Here, I briefly highlight four of the more established ones. Advertising agency Young and Rubicam (Y&R) develop a model of brand equity called Brand Asset Valuator (BAV). BAV provides comparative measures of the brand equity of thousands of brands across hundreds of different categories. There are four key components of brand equity according to this model: - differentiation measures the degree to which a brand is seen as different from others - relevance measures the breadth of a brand’s appeal - esteem measures how well the brand is regarded and respected - knowledge measures how familiar and intimate consumers are with the brand Differentiation and Relevance combine to determine Brand Strength. These two pillars point to the brand’s future value, rather than just reflecting its past. Esteem and Knowledge together create Brand Stature, which is more of a ‘report’ card on past performance.

Examining the relationships among these four dimensions – a brand’s pillar pattern reveals much about its current and future status. In Cyprus, Mitsubishi Evolution is a Leadership brand with high level of all four pillars, on the other hand Subaru Impreza is a strong new brand, and tend to show higher level of Differentiation than Relevance, while both Esteem and Knowledge are lower still. c) There is no evidence that drivers of Mitsubishi/Subaru in Cyprus perceive their vehicles as rally automobiles, but rather as ‘unique’ With 53.3% of current Mitsubishi/Subaru drivers following motor sport events, like WRC or Dakar and 17.6% stating that WRC rallying heritage influenced their buying decision criteria, one cannot claim that former competition in WRC influences and structure perception of the identified cars in Cyprus. d) Mitsubishi Evolution/Subaru Impreza WRX products in Cyprus possess strong power bonds with the users During the interview and based on the survey results, some of the results prove the statement of existence of so called ‘product attachments ‘. Where, often illogical, but strong power bonds with the products, are established and protected. For example, interview revealed that both cars older models have several technical problems, like ‘gearbox overheating’ and ‘engine seals’; during the dynamic driving both car consume substantial amounts of petrol and survey shows negative (36.7%) regarding petrol consumption rating. Apart from ‘love attachment’, most of the surveyed drivers car be classified to have strong ‘selfconcept attachment’, meaning, that drivers of Mitsubishi/Subaru seek to establish themselves via product usage, and that way to find acceptance at desired social stratum.

4.4 Analysis of findings for objective 2 Objective 2 of the research is to investigate how does the perception effects the individual buying decision criteria towards purchase a Mitsubishi Evolution and/or Subaru WRX in Cyprus. Comparing the literature review from the secondary research with primary data results for objective 1 (retrospective method), the buying decision criterion involves: a) There is a gap between customers’ usage and actual car performance According to the feedback received from the interviewed Mitsubishi/Subaru car drivers, the purchase was done under influence of socio-cultural needs, rather than actual sport utility. There are clear indications (18%) of the respondents commit purchase seeking mere ‘sport qualities’ of a particular automobile. With remaining 82% of the respondents splitting into small groups interested in either ‘transportation’ or ‘popularity’ aspects of the vehicle.

b) A hypotheses linking rally heritage of both identified sport vehicles failed Survey proves that mere 6% of the respondents explained than the reason behind purchase of one of the identified vehicles is a motor-sport heritage of a brand. Only half of the respondents follow motor-sport events at all, and particularly two prominent Japanese manufacturers, like Subaru STi and Mitsubishi Evolution, competing at World Rally Championship since 90s. c) At need recognition stage of decision making process, other than marketing efforts interfere Customers involved at purchase of an expensive automobile are at ‘opportunity recognition’ state of a problem, where they believe to distinguish themselves as drivers. Meaning that we witness an ‘upward move from the current state of affair’. In Cyprus, with its small economy, important and popular spread of information is due to ‘a word of mouth’; this fact empowers marketers to reach desirable market target through so called ‘influencers’. According to Hession (2001), decisions are determined by normative beliefs that the individual 73

attributes to significant others (friends, work colleagues, family members and the like). A fact

recognized

‘Fairways’,

official

Mitsubishi

distributor

Cyprus,

organizing/sponsorship various sport events, delivering spare parts, etc. According to the survey, 28% of the respondents rely on advise of various ‘reference groups’, including ‘family, friends’ and 14% - rely on their own experience. d) Little information search regarding ‘extensive problem solving’ takes place Customers differ in the amount of search they tend to undertake, and according to M. Solomon (2006) search tends to be greatest among those consumers who are moderately knowledgeable about the product. Highest ranking ‘occasionally’ on a scale of involvement in information search 32%, there is ‘little’ information search taking place prior-actual purchase. Interview results noting repeat purchases states that brand-loyal consumer is actively (sometimes passionately) involved with his or her favorite.

e) On the marketing front, the potential for cross-selling and customer management is improved. Designing your own vehicle and signing for a ‘test drive’ at one of the distributors allow personalization. So, car distributors can roll out products in a cost-effective way and increase chances of growth and sales.

f) There is no evidence of particular differences of attitudes towards identified Japanese sport cars brands in Cyprus

One of the questions of the interview, was directly aiming to investigate if the common in mass media competition is taking place in Cyprus in any way. However, many respondents do acknowledge competition between Japanese sport cars, there is no much to comment in ‘particular’ case, investigated here. 74

Small market in Cyprus and low development of Car enthusiasts societies eliminate examples of competition of rally competing in the past, nowadays competing for the share of market in ‘price-performance’ niche, Mitsubishi and Subaru cars, so common to markets, like the United Kingdom and the USA. g) Survey identified Subaru drivers to be more conservative, regarding ‘color’ and ‘change in design’ 9. What kind of color suits your car the best?

□ Red

□ Blue

□ Other

Answers received on question 9 of the survey give a reason to believe that Subaru Impreza drivers are more prone to a ‘classic’ WRC style ‘blue’ color of the automobile, than depicted in ‘red’ Mitsubishi Evolution WRC. The emotional bonds that come about between brand-loyal consumers and products is stronger at ‘Subaru drivers’. Example: a vehement reaction to product alteration of 2009 Subaru WRX from sedan to hatchback. (Evan Griffey, 2010). h) Despite smaller number of Subaru users in Cyprus, interview answers prove that there is a strong brand image established Without access to the statistical services of the Cyprus Police, the research lacks statistical evidence of the number of Mitsubishi Evo and Subaru Impreza car users in Cyprus. But, according to the sample data there are less Subaru Impreza drivers in Cyprus, due to various reasons. Among them are - recent market penetration, financial burdens, higher rate of breakdowns. Despite the resent facts, there is well developed and strong bond between the car and its users. So, just like the perception is a process which involves the recognition and interpretation of stimuli which register on our senses (P. Rookes and Jane Willson, 2000). Regarding Subaru Impreza, one need to mention a particular rumbling noise of the ‘Boxer’ engine, aggressive, rally-evolved car design that altogether created a strong appeal.

Conclusion and Recommendations The objective of this section is to consolidate the findings presented in the previous

sessions. The current users’ of Mitsubishi Evolution and Subaru Impreza WRX perceptions regarding the brand image and its effect on individual decision making criteria were investigated. There is a gap between customer usage and actual car performance today in Cyprus. The demographic profile indicated, applicable for Cyprus customer’ s profile, an average Mitsubishi/Subaru driver is an educated, 18-25 years employed males with High Education. Similar to the rest of Europe, both companies shift the marketing efforts toward ‘ mature’ , middle age, high income customer, through advertisement campaign, interior improvement and price policy. Similar to Europe, in Cyprus target market is small and specialized, a ‘ niche’ market, with few competitors fighting for a sector. Conducting a survey and number of informal interviews, we have identified rather vogue pattern regarding the perception of two cars in Cyprus, and denied idea of rallying history as a key factor of a purchase. Concerning the individual decision making criteria, there are common patterns measured at the paper, first of all regarding the information search and problem recognition stages. Both ‘ pillars’ lack profound approach regarding ‘ extensive problem solving’ continuum. Small market with and strong ‘ family bonds’ typical for a Cypriot society empower a word of mouth and reference groups are an important marketing moderator. This fact might be well exploited by the marketers at car distributors departments to reach ‘ shifting’ and growing market segment towards middle aged, middle-high income customers. There is no identified evidence regarding difference in attitude towards one the identified car brands. So common is media in Western Europe and the U.S., in Cyprus both brands lack numbers and media coverage to compete with one another. Mitsubishi is 2nd car distributor established in Cyprus in 1967, and count for every 5th car on the island (according to M. Haralambous, Marketing Manager of Fairways Cyprus), same cannot be said for Subaru, a new established car distributor. And finally, a large majority of the respondents are not willing to switch to another brand, but merely improve/update existing car brand. It has been stated by various companies that to retain an existing customer is easier than to gain a new customer. Hence, revenue 76

generated from a single client carries a great deal of importance. Distributors need to improve existing car services so that current users are not lost and new customers are gained. Distributors and car dealers should appreciate personal needs of their clients in order to provide value added services; for a niche market it is s necessity. Proper brand positioning can ensure that people perceive the brand in ways that achieve organizational objectives. Diligent brand management efforts can move people from considering the brand (when they have specific needs), to preferring the brand, to purchasing the brand, to being completely loyal to the brand, to enthusiastically recommending the brand to others. Studies have shown that an organization's two most important assets are its people and its brands. Thus perception studies can prove to be a very effective marketing tool as it can be used to provide time needed to alter/strengthen services. That is why most of a company's financial value results from its brand asset value, which often far exceeds the value of all of the company's tangible assets. 5.1 Recommendations

The Objective 3 of the research is to provide corrective steps needed, if any. In light of the

above

mentioned

results,

number

practical

recommendations

and

their

marketing/business implications can be drawn. These recommendations can be of great help to the managements of Cyprus car distributors in designing and implementing effective policies and programs for successfully distributing sport cars through well established distribution chains..

The main research recommendations are:

1) Cypriot car importers and distributors should design and implement sufficient promotional campaigns for creating and developing positive attitudes towards Mitsubishi Evolution and Subaru Impreza WRX, and also for providing the customers with the required information about the system. These campaigns should focus on the achievement of the following objectives:

 Educating customers about safety of four-wheal drives, the potential benefits and problems likely to be encountered.  Creating positive attitudes towards identified brands by indicating its benefits and advantages, steps taken to assure and guarantee safety and pleasure of ‘easiness of driving’ an ultimate sport automobile on every day practice.

2) While designing the marketing mix of the car brands, it is necessary to keep in mind  Customers’ evaluation of the relative importance of each car specific feature.  Behavior of existing sport car users  Behavior of potential sport car users.

As results of the study indicate, car features which customers evaluated as either very low/inefficient or good/excellent are:  Current price of an automobile (30% - good, 23.3% -excellent)  Performance (23.3% -good, 76.7%- excellent)  Reliability (33.3% - good, 50% - excellent)  Petrol consumption (36.7% - very bad, 46.7%- OK)  Safety (20% - good, 53.3%-excellent, 10%- very bad)

Accordingly, car distributors/manufacturers must guarantee the successful delivery of this car features and conduct more elaborate studies. Particularly important is the timing of such research, as car industry is out of stagnation and companies come out of the financial turndown stronger with redesigned cars and retargeted marketing mixes. In the mean time, the service mix should be a subject of continuous revision as the perception is likely to change from time to time and among customers according to their differences in demographics. Further those services such as loan advice, stock market and exchange rate enquiries that customers feel reluctant about need to be tracked and, distributors maintaining customer relation, need to inform customers vie mobile or e-mail of a new loans and purchasing options. The demand should be stimulated

through crystallizing the benefits that customers will gain from relying upon a car manufacturer and/or distributor in facing with the above mentioned car characteristics.

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[Accessed on 12-05-2010]

Website 12: Chevrolet, Ford, and Subaru jump in brand perception; Toyota is tops, according to new Consumer Reports survey [Online], Available at: http://www.consumerreports.org/cro/cars/newcars/news/2010/01/2010-car-brand-perceptions-survey/overview/brand-perceptions-ov.htm

[Accessed on 12-05-2010] Website 13: Report: Mitsubishi looking to claw back to 100,000 sales in U.S. in three years, by Chris Shunk [Online], Available at: http://www.autoblog.com/2010/01/26/report-mitsubishi-looking-to-clawback-to-100-000-sales-in-u-s/

[Accessed on 13-05-2010]

Website 14: Cyprus Statistical Service, Registration of Motor Vehicles, Jan - Apr 2010 [Online] http://www.mof.gov.cy/mof/cystat/statistics.nsf/All/F7548B1D9082DD83C225771C00339E6D?OpenDocument&s ub=1&e= [Accessed

on 15-05-2010]

Filmography: Japanese supercars: Mitsubishi Lancer Evolution, directed by Bruce Cox, 2002 Bibliography Smith A.D., ‘The Problem of Perception’ (2002) Harvard University Press

O'Neill, J., BRICs could point the way out of the Economic Mire, Financial Times, London, September 23, 2008, p. 28.

APPENDIX 1

The results of the open-ended, informal questions interview are provided below: 1 Interviewee George Evripidou 1. Do you place your car together with competitive option (Mitsubishi, Subaru) I don’t think there is more competition between Subaru and Mitsubishi, than with other sport car, take Mazda RX 7 or 9, Nissan Z360 or Nissan Skyline are superior depending on the surface and way of driving. What was the reason to go for that choice? Oh, that’s m y dream car, I always wanted a Subaru Impreza, since I first saw it rallying in Cyprus. Aggressive looks, such a powerful sound, and high performance. And safety. You know, this is my second car, I had an accident with my front left wheal of Subaru year model 1997, but no problem for me. 2. How long do you drive this particular car brand? I bought it last winter, the most expensive think I have ever bought 3. Does driving this particular car brand distinguish you as a driver? That’s for sure, you would approach to ask me these questions otherwise! 4. Do you like extreme sports, like WRC, for instance? I’m a big fan of WRC, since I was a child my father took me on stages of WRC Round in Cyprus, than I first saw P. Solberg driving it. Apart from watching, I like to play Rally kind video games with my nephew 5. Do you get or stay in touch with other drivers of the same brand? (do you belong to some society or club?) No. I currently work on my Wine Shop in Limassol, have no time for that 6. Was it difficult to acquire this particular car, finances aside? Second hand? No, as long as you can afford it, there in no problem to get one or order from England. No, no problem. 7. Do you know what does the brand name means in English/ car symbol? That’s a name of a car, what else does this mean 85

2 Interviewee Nicos Stamathakis

1. Do you place your car together with competitive option (Mitsubishi, Subaru) If yes, what was the reason to go for that choice? The car is very competitive, I like racing in Larnaca sometimes, there is a nice drift facility there. Yes, there is like a rivalry between two brands, guys at the club like to compete with each other. Subaru is better, because you can drive it easier every day and better in drifting than Evo. 2. How long do you drive this particular car brand? Long time, like three years by now 3. Does driving this particular car brand distinguish you as a driver? Of course, paying so much money I will feel that way! No, really, there are not that many such cars on the streets, I feel like I can race anyone on the street, four-wheal drive can bring me to any place in Troodos, any whether.

4. Do you like extreme sports, like WRC, for instance? No, I donâ&#x20AC;&#x2122;t like F1 and Nascar, OK, maybe WRC, there was last year in Panagia. 5. Do you get or stay in touch with other drivers of the same brand? (do you belong to some society or club?) There is a Subaru Impreza Club in Limassol, they organize some events, we pay a fee to stay a member

6. Was it difficult to acquire this particular car, finances aside? No, but it is difficult to maintain such a car, too much petrol, only one turbo costs two thousand Euro! 7. Do you know what does the brand name means in English/ car symbol? There are stars on a logo, but you cannot see mine, I changed the spoilers in front and back.

3 Interviewee Michelle Muletti

1. Do you place your car together with competitive option (Mitsubishi, Subaru) If yes, what was the reason to go for that choice? I came to Cyprus in 2006, back in Italy I drove Mitsubishi Lancer – good car, but always wanted to buy an Evolution. Here I have friends that assisted me with this purchase. Evolution is better that Subaru for me, always liked Gigi Galli driving red Mitsubishi Evolution WRC. 2. How long do you drive this particular car brand? Well since I arrived, three years from than 3. Does driving this particular car brand distinguish you as a driver? That’s why I bought it, the car has the ‘looks’, very fast and OK, I don’t drive on a track, but reliable.

4. Do you like extreme sports, like WRC, for instance? Yes, I said already, in Italy WRC is quite popular, there is regular Round in Corsica every year. I hope, next year WRC will return to Cyprus. 5. Do you get or stay in touch with other drivers of the same brand? (do you belong to some society or club?) No, I have no time for this, and first I need to learn Greek! 6. Was it difficult to acquire this particular car, finances aside? When you have money and friends, no. It was not difficult, but expensive. 7. Do you know what does the brand name means in English/ car symbol? Yeah, actually I read once about it, three diamonds in front are actually three Japanese families that united to produce car in Japan, long time ago.

4 Interviewee Alexandros 1. Do you place your car together with competitive option (Mitsubishi, Subaru) If yes, what was the reason to go for that choice? I don’t know, but Mitsubishi is the best sport car you can get for this money, very happy about it. It’s very popular, whoever I asked agreed to go for it. 2. How long do you drive this particular car brand? Almost a year, it’s new 3. Does driving this particular car brand distinguish you as a driver? For sure, that is what I was looking for. There few MR models in Limassol 4. Do you like extreme sports, like WRC, for instance? No, not really 5. Do you get or stay in touch with other drivers of the same brand? (do you belong to some society or club?) No, we drive with my friends. Maybe one day I would like to join, but for now I don’t need it. 6. Was it difficult to acquire this particular car, finances aside? No, there are car dealer that can deliver you your personalized car, and New X model is at Fairways. 7. Do you know what does the brand name means in English/ car symbol? No.

5 Interviewee Panayotis Beckris 1. Do you place your car together with competitive option (Mitsubishi, Subaru) If yes, what was the reason to go for that choice? I don’t think there some competition between Subaru and Mitsubishi, no, at least not in Cyprus. OK, there many drivers that say this one is better, or the other one, but it more depends on a driver himself and money that he/she is ready to invest. 2. How long do you drive this particular car brand? This one [Evo V], not for long, actually I have four different Evolutions. Others I fix them and sell afterwards, so I do drive them long! 3. Does driving this particular car brand distinguish you as a driver? OK, it’s a very good car, naturally I receive a pleasure when I see people paying attention on me. 4. Do you like extreme sports, like WRC, for instance? Not really 5. Do you get or stay in touch with other drivers of the same brand? (do you belong to some society or club?) No, I don’t 6. Was it difficult to acquire this particular car, finances aside? OK, when you have money, no, no problem 7. Do you know what does the brand name means in English/ car symbol? No, what does it mean?

6 Interviewee Costas Ziogas

1. Do you place your car together with competitive option (Mitsubishi, Subaru) If yes, what was the reason to go for that choice? I have friends that drive Mitsubishi, when two years ago I was looking for a sport car, they recommended it to me. So far I am very happy. I don’t like Subaru, it breaks easier. 2. How long do you drive this particular car brand? Two years 3. Does driving this particular car brand distinguish you as a driver? Yeah, it’s very nice car, people pay attention when you drive it 4. Do you like extreme sports, like WRC, for instance? No, may be football 5. Do you get or stay in touch with other drivers of the same brand? (do you belong to some society or club?) Yeah, I stay in touch with my friends, like this evening we drive a little bit, maybe race, get together to talk and show cars 6. Was it difficult to acquire this particular car, finances aside? OK, it was difficult, because you need get insurance and my car was delievered from Japan, that took some time 7. Do you know what does the brand name means in English/ car symbol? Mitsubishi, and what Evolution, it’s getting better, no?

7 Interviewee Vladimir Dus

1. Do you place your car together with competitive option (Mitsubishi, Subaru) If yes, what was the reason to go for that choice? Yes, I know about it, there are many enthusiasts in the Internet that speak about it, lots of video clips, fan clubs, especially in England and the USA. Both car are legends, and go step by step in motorsport. I like more Subaru, it looks more aggressive, drives fantastic and won the manufacturers title in WRC three times! 2 How long do you drive this particular car brand? One year, I ordered it from England 3 Does driving this particular car brand distinguish you as a driver? Oh, a lot, when I finish the work, that is my favorite thing to do, to have a ride! 4 Do you like extreme sports, like WRC, for instance? Iâ&#x20AC;&#x2122;m a big fan, not always watching, but play SPS video games, read the news, there is going to be a round in Portugal soon. 5 Do you get or stay in touch with other drivers of the same brand? (do you belong to some society or club?) No, there are clubs in Limassol, but in summer I hove time at all and the guys there are Cypriots, so Iâ&#x20AC;&#x2122;d better improve my Greek first 6 Was it difficult to acquire this particular car, finances aside? Yes, quite a lot for me, first is money, and then had to contact a friend of mine to organize the delivery from England, and so on. 7 Do you know what does the brand name means in English/ car symbol? Yes, there something regarding the symbioses of small companies in one, stars are shown on the logo

8 Interviewee Constantinos

1. Do you place your car together with competitive option (Mitsubishi, Subaru) If yes, what was the reason to go for that choice? No, I donâ&#x20AC;&#x2122;t believe there some sort of uniqueness regarding competition b/n Subie and Evo, at no more than with the rest of the sport division. 2. How long do you drive this particular car brand? Couple of years 3. Does driving this particular car brand distinguish you as a driver? Yes, of course 4. Do you like extreme sports, like WRC, for instance? Well, I like wind surfing, but WRC, apart from Rally Cyprus, no 5. Do you get or stay in touch with other drivers of the same brand? (do you belong to some society or club?) Yes, actually Iâ&#x20AC;&#x2122;m a member of Evolution Club in Limassol, where we organize different events and maintain relationships, help each other with advises, spare parts, etc. 6. Was it difficult to acquire this particular car, finances aside? Yes, to acquire and especially to maintain 7. Do you know what does the brand name means in English/ car symbol? Never asked myself, I know there three red squares

9 Interviewee Kiriakos 1

Do you place your car together with competitive option (Mitsubishi, Subaru)

If yes, what was the reason to go for that choice? Yes, there are few such popular car competitors in four-door sedans than between Mitsubishi and Subaru. 2

How long do you drive this particular car brand?

More than five years 3

Does driving this particular car brand distinguish you as a driver?

Not all the cars you see on the street are real Evo’s and STi’s, most of them are either just styled like one’s or tuned. Yes, people want to distinguish themselves when purchasing these cars.

Do you like extreme sports, like WRC, for instance?

No, I would rather compete there than watch (laughing). Yes, I do like it, but that’s all about it. 5

Do you get or stay in touch with other drivers of the same brand? (do you belong to some society or club?)

I have a garage, people often come here to help them, I have ‘a club’ myself. 6

Was it difficult to acquire this particular car, finances aside?

No, but I spent already more than the actual price of the car, it’s difficult especially financially. 7

Do you know what does the brand name means in English/ car symbol?

Have no idea

10 Interviewee Panayotis

1. Do you place your car together with competitive option (Mitsubishi, Subaru) If yes, what was the reason to go for that choice? Yeah, it’s being a lot of talks about it, but I don’t really see any particular competition between Mitsubishi and Subaru in Cyprus. 2. How long do you drive this particular car brand? This is my first Evo, it’s almost two years since I bought it. 3. Does driving this particular car brand distinguish you as a driver? It gives me a thrill that I was looking for, and of course, distinguishes me on a road. 4. Do you like extreme sports, like WRC, for instance? Yeah, actually a lot, I like extreme different kind of sports, and train myself wind-surfing and kite-surfing…WRC Tommi Makinen used to win a title driving Mitsubishi 5. Do you get or stay in touch with other drivers of the same brand? (do you belong to some society or club?) No, at least not with the cars 6. Was it difficult to acquire this particular car, finances aside? My friends helped me a lot, and it is an expensive ‘piece of machinery’ 7. Do you know what does the brand name means in English/ car symbol? Mitsubishi is ‘three diamonds’ in Japanese, that’s all I know

APPENDIX 2

The results obtained from the survey questionnaires are illustrated through bar graphs, line graphs and area graphs and are provided below.

Section I (Demographics) Age

□ 18-25 □26-30 □31-35 □36-40 □41-45

□46 and above

Education

□ Secondary school

□High Diploma

□ Degree and above

Gender

□Male

□Female

Occupation …………………………….

Industry

□IT □Finance □Services □Manufacturing □Government □Communication □ Hospitality □Other

Section II 1. Are you a driver of…

□

Mitsubishi

□

Subaru

100

2. Are you satisfied with your choice

â&#x2013;Ą

Yes

â&#x2013;Ą

.......if NO, please tick the most common feeling towards your car ?

a) the upkeep is too expensive (spare parts, service, taxes) b) too high petrol consumption c) comfort d) poor performance e) often breakdowns (electronic, hardware, etc)

101

3. What were your reasons to purchase this car brand?

102

4. Please rate the following car features from your personal perspective: ( where1 =› very bad 2 =› bad

●

Price

3 =› it is OK 4 =› good

5 =› excellent ) [ ]

103

4. Please rate the following car features from your personal perspective: ( where1 =› very bad 2 =› bad

●

Performance

3 =› it is OK 4 =› good

5 =› excellent ) [ ]

104

4. Please rate the following car features from your personal perspective: ( where1 =› very bad 2 =› bad

●

Reliability (breakdowns)

3 =› it is OK 4 =› good

5 =› excellent ) [ ]

105

4. Please rate the following car features from your personal perspective: ( where1 =› very bad 2 =› bad

●

3 =› it is OK 4 =› good

Efficient (fuel consumption, etc)

5 =› excellent ) [ ]

106

4. Please rate the following car features from your personal perspective: ( where1 =› very bad 2 =› bad

●

Safety

3 =› it is OK 4 =› good

5 =› excellent ) [ ]

107

5. Are you planning to change or purchase a new vehicle?

□ Yes, I would like to change my car, but stick to the same brand □ Yes, I would like to buy …………………. ……………..( Please state !) □ No, I’m satisfied with what I have now

108

6. Do you show interest in WRC (World Rally Championship), Dakar, or any other motorsport events?

□ Yes, I do □ No, I don’t

109

7. Do you spend time reading car magazines, browsing car forums on the Internet?

□ Occasionally □ Once a week □ Every day □ Never

110

8. Choosing a new car whom would you ask for an opinion?

□ Family, relatives, friends □ Motor show, car showroom representative □ Mass media, advertisement □ My decision bases on my experience □ All above

111

9. What kind of color suits your car the best?

□ Red

□ Blue

□ Other

112

10. Do you belong to any of the following organizations?

□ AA

□ Club

□ No, but would like to

□ No

113

APPENDIX 3 SPSS TABLES

Frequencies Notes Output Created

21-MAY-2010 21:09:19

Comments Input

Missing Value Handling

Filter Weight

Split File

<none>

N of Rows in Working Data File Definition of Missing Cases Used

User-defined missing values are treated as missing. Statistics are based on all cases with valid data. FREQUENCIES VARIABLES=age education /BARCHART FREQ /ORDER= ANALYSIS .

Syntax

Resources

Elapsed Time 0:00:01,13 Total Values Allowed

149796

Statistics age N

Valid Missing

education 60

114

Section I (Demographics)

□ 18-25 □26-30 □31-35 □36-40 □41-45 □46 and above Education □ Secondary school □High Diploma □ Degree and above Gender □Male □Female Age

Occupation ______________

□IT □Finance □Services □Manufacturing □Government □Communication □ Hospitality □Other

Industry

Frequency Tables age

Valid

18-25

Frequency 34

Percent 56,7

Valid Percent 56,7

Cumulative Percent 56,7

26-30

33,3

90,0 100,0

31-35

10,0

Total

100,0

education

Frequency Valid

Secondary school High diploma Degree Total

Percent

Valid Percent

Cumulative Percent

30,0

60,0

90,0 100,0

10,0

100,0

gender

Valid

Male Female Total

Frequency 52

Percent 86,7

Valid Percent 86,7

Cumulative Percent 86,7

13,3

100,0

115

occupation

Frequency Valid

Mechanic, engineer Garage owner Waiter, cook

Percent

Valid Percent

Cumulative Percent

33,3

66,7

Finance

3,3

70,0

Student

30,0

100,0

Total

100,0

Frequenc y 4

Percent 6,7

Valid Percent 6,7

Cumulative Percent 6,7

40,0

46,7

3,3

50,0

Hospitality

23,3

73,3

Other

26,7

100,0

Total

100,0

industry

Valid

IT Services Government

Section II

□

1. Are you a driver of…

Frequenc y Valid

Mitsubishi

Subaru

Total

Percent 66,7

□

Mitsubishi

Valid Percent

Cumulative Percent

66,7

33,3

100,0

2. Are you satisfied with your choice

Subaru

□

Yes

□

.......if NO, please tick the most common feeling towards your car ?

a) the upkeep is too expensive (spare parts, service, taxes) b) too high petrol consumption

116

c) comfort d) poor performance e) often breakdowns (electronic, hardware, etc)

Valid

Frequency 48

Percent 80,0

Valid Percent 80,0

Cumulative Percent 80,0

No, upkeep

10,0

90,0

No, comfort

3,3

93,3

No, performance

3,3

96,7

No, reliability

3,3

100,0

Satisfied

Total

3. What were your reasons to purchase this car brand?

Transportation

Percent

Valid Percent

Cumulative Percent

13,3

30,0

43,3

13,3

56,7

WRC

16,7

73,3

Popularity

20,0

93,3 100,0

Sport 4 door car Price-performance

Other

6,7

Total

100,0

117

4. Please rate the following car features from your personal perspective: ( where1 =› very bad 2 =› bad

●

3 =› it is OK 4 =› good

Price

[ ]

Frequency Valid

5 =› excellent )

Very bad

Percent

Valid Percent

Cumulative Percent

16,7

Bad

3,3

20,0

23,3

43,3

Good

33,3

76,7

Excellent

23,3

100,0

Total

100,0

4. Please rate the following car features from your personal perspective: ( where1 =› very bad 2 =› bad

●

Valid

3 =› it is OK 4 =› good

5 =› excellent )

Performance

[ ]

Frequency 14

Percent 23,3

Valid Percent 23,3

Cumulative Percent 23,3

Excellent

76,7

100,0

Total

100,0

Good

4. Please rate the following car features from your personal perspective: ( where1 =› very bad 2 =› bad

●

3 =› it is OK 4 =› good

Reliability (breakdowns)

[ ]

Frequency Valid

5 =› excellent )

Percent

Valid Percent

Cumulative Percent

Very bad

6,7

Bad

3,3

10,0

6,7

16,7

Good

33,3

50,0

Excellent

50,0

100,0

Total

100,0

118

4. Please rate the following car features from your personal perspective: ( where1 =› very bad 2 =› bad

●

3 =› it is OK 4 =› good

Efficient (fuel consumption, etc)

Frequency Valid

5 =› excellent )

Very bad

[ ]

Percent

Valid Percent

Cumulative Percent

36,7

Bad

6,7

43,3

90,0

46,7

Good

3,3

93,3

Excellent

6,7

100,0

Total

4. Please rate the following car features from your personal perspective: ( where1 =› very bad 2 =› bad

●

Valid

3 =› it is OK 4 =› good

Safety

Very bad Bad OK

5 =› excellent ) [ ]

Frequency 6

Percent 10,0

Valid Percent 10,0

Cumulative Percent 10,0

3,3

13,3

26,7

Good

20,0

46,7

Excellent

53,3

100,0

Total

100,0

119

5. Are you planning to change or purchase a new vehicle?

□ Yes, I would like to change my car, but stick to the same brand □ Yes, I would like to buy …………………. ……………..( Please state !) □ No, I’m satisfied with what I have now Frequency Valid

Percent

Valid Percent

Cumulative Percent

Upgrade

36,7

Different brand

16,7

53,3

46,7

100,0

Total

100,0

36,7

6. Do you show interest in WRC (World Rally Championship), Dakar, or any other motorsport events?

□ Yes, I do □ No, I don’t

Frequency Valid

Yes

Total

Percent 53,3

Valid Percent 53,3

Cumulative Percent 53,3

46,7

100,0

7. Do you spend time reading car magazines, browsing car forums on the Internet?

□ Occasionally □ Once a week □ Every day □ Never

120

Frequency Valid

Percent

Valid Percent

Cumulative Percent

Occasionally

40,0

Weekly

26,7

66,7

Daily

13,3

80,0

Never

20,0

100,0

Total

100,0

8. Choosing a new car whom would you ask for an opinion?

□ Family, relatives, friends □ Motor show, car showroom representative □ Mass media, advertisement □ My decision bases on my experience □ All above

Frequency Valid

Reference groups Distributor Advertisement

Percent

Valid Percent

Cumulative Percent

46,7

3,3

50,0

6,7

56,7

Experience

23,3

80,0

All above

20,0

100,0

Total

100,0

9. What kind of color suits your car the best?

□ Red

Valid

□ Blue

□ Other

Red

Frequency 12

Percent 20,0

Valid Percent 20,0

Cumulative Percent 20,0

Blue

26,7

46,7

Other

53,3

100,0

Total

100,0

121

10. Do you belong to any of the following organizations?

□ AA

□ Club

□ No, but would like to

Frequency Valid

□ No

Percent 3,3

Valid Percent 3,3

Cumulative Percent 3,3

Club

16,7

13,3

Like to join

16,7

33,3

66,7

100,0

Total

100,0

122

APPENDIX-4a

INTERVIEW SAMPLE QUESTIONS

8. Do you place your car together with competitive option (Mitsubishi, Subaru) If yes, what was the reason to go for that choice?

9. How long do you drive this particular car brand?

10.Does driving this particular car brand distinguish you as a driver?

11.Do you like extreme sports, like WRC, for instance?

12.Do you get or stay in touch with other drivers of the same brand? (do you belong to some society or club?)

13.Was it difficult to acquire this particular car, finances aside?

14.Do you know what does the brand name means in English/ car symbol?

123

APPENDIX-4b Questionnaire Hello, I am a final year MBA student of European University Cyprus, majoring in Marketing. I am currently conducting a study to find out how does the perception of the Mitsubishi Evo and Subaru WRX effects the buying decision criteria. Your assistance is vital to find convincing answers to these questions. I assure you that all information provided is confidential. Your kind support is deeply appreciated. Section I (Demographics)

□ 18-25 □26-30 □31-35 □36-40 □41-45 □46 and above Education □ Secondary school □High Diploma □ Degree and above Gender □Male □Female Age

Occupation ______________

□IT □Finance □Services □Manufacturing □Government □Communication □ Hospitality □Other

Industry

Section II 1. Are you a driver of…

□

Mitsubishi

2. Are you satisfied with your choice

□

Yes

□

Subaru

□

.......if NO, please tick the most common feeling towards your car ?

a) the upkeep is too expensive (spare parts, service, taxes) b) too high petrol consumption c) comfort d) poor performance e) often breakdowns (electronic, hardware, etc)

124

3. What were your reasons to purchase this car brand?

3 =› it is OK 4 =› good

5 =› excellent )

●

Price

[ ]

●

Performance

[ ]

●

Reliability (breakdowns)

[ ]

●

Efficient (fuel consumption, etc)

[ ]

●

Safety

[ ]

5. Are you planning to change or purchase a new vehicle?

□ Yes, I would like to change my car, but stick to the same brand □ Yes, I would like to buy …………………. ……………..( Please state !) □ No, I’m satisfied with what I have now

125

6. Do you show interest in WRC (World Rally Championship), Dakar, or any other motorsport events?

□ Yes, I do □ No, I don’t 7. Do you spend time reading car magazines, browsing car forums on the Internet?

□ Occasionally □ Once a week □ Every day □ Never 8. Choosing a new car whom would you ask for an opinion?

□ Family, relatives, friends □ Motor show, car showroom representative □ Mass media, advertisement □ My decision bases on my experience □ All above 9. What kind of color suits your car the best?

□ Red

□ Blue

□ Other

10. Do you belong to any of the following organizations?

□ AA

□ Club

□ No, but would like to

□ No

THANK YOU FOR YOUR KIND COOPERATION DRIVE SAVE AND WEAR YOUR SEATBELT ! 126

APPENDIX-5.1

Ki-43 Hayabusa

A6M Zero Source: - History of Subaru v Mitsubishi rivalry (2009). Online, Available at http://masisjournal.blogspot.com/2009/11/history-of-subaru-v-mitsubishi-rivalry.html [Accessed 1103-10]

Year 1958 Subaru 360_01

Year 1961 Mitsubishi 500_01

Source: - Japanese car industry, Wikipedia (2009). Online, Available at http://en.wikipedia.org/wiki/Japanese_car_industry [Accessed 11-03-10]

127

5.2

Feedback

5.3 Five types of perceived risk Monetary risk Functional risk Physical risk Social risk Psycho logic risk

High-price items that require substantial expenditures are most subject to this form of risk. Example: Mitsubishi Evolution X stock price is 41.000 â&#x201A;Ź Sport cars as a product, post purchase service require the buyerâ&#x20AC;&#x2122;s exclusive commitment and precludes redundancy are most sensitive. Automobiles in general, sport car in our case are most sensitive Socially visible or symbolic goods, such as Evo/Subaru are subject to social risk Expensive personal goods, durables whose use require self-discipline are most sensitive; in case our case, drivers encounter this risk due to high level of commitment while driving sport cars

5.4 One of the popular car magazines (AutoCar, June 6th 2001) reported on the 'Top 50 Cars' in the UK. The categories they used were as follows: Category

Prime Examples from AutoCar's Top 50

Supermini

Toyota Yaris 1.0 GS Skoda Fabia 1.4 16V Audi A2 TDI

Family Hatch

Ford Focus 1.6 LX

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Alfa Romeo 147 2.0 Honda Civic 1.6 SE Hot Hatch

Mini Cooper Peugeot 106 GTi BMW 325i Compact

Family Car

Ford Mondeo 2.0 Renault Laguna 2.2 dCi Citroën C5 HDi

Estate Car

Citroën C5 HDi Renault Laguna dCi Subaru Legacy 2.5

MPV

Vauxhall Zafira 1.8 Fiat Multipla JTD Renault Grand Espace

Sports Saloon

BMW M3 Mercedes C240 Avantgarde Skoda Octavia RS

Executive Car

BMW 530i Rover 75 2.5 V6 Lexus GS300 SE

Coupé

Ford Puma 1.7 Mercedes-Benz Sports Coupé 230K Peugeot 406 V6 Coupé

Roadster

Lotus Elise Porsche Boxster S Mazda MX-5 1.8i S

Off-Roader

BMW X5 3.0 SE Land Rover Freelander Td4 Range Rover 4.6

Luxury Car

Mercedes S500 Lexus LS400 BMW 740i

Supercar

Porsche 911 Turbo Ferrari 360 Modena Noble M12 GTO

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