A study on the influence of brand perception luxury value and coo on purchase intention of luxury cars

Abstract

Car industry is one of the largest industries in the world, employing a huge number of employees and playing a major role in many economies. India is a one of the emerging markets for worldwide auto-giants. India’s luxury car market has grown despite the slowdown in the Indian automobile industry and difficult economic environment. Luxury goods are demanded not only in the Western world but also in emerging countries like China, Korea, India and the Middle East. Luxury cars are used as a symbol to illustrate the users’ status, personality and self-image, and as a way to communicate the same to others. Research on luxury value demonstrates the debate, developing on three fundamental dimensions such as social, personal and functional value perceptions. Brand perception is a consumer’s ability to identify the brand under different conditions, as reflected by their brand recognition. People would rarely see on the Indian roads, a BMW or Mercedes car a decade ago, but are now finding Porsche Cayenne SUV, Audi, Volkswagen, Chevrolet, Volvo and so on, being regularly driven with high pride and flaunt. Purchase intention can establish the likelihood of a consumer to purchase a product, the higher the intention, the higher will be the consumer’s readiness to purchase the product. The primary objectives of the research is to investigate the relationship among luxury value perception, brand value perception and purchase intentions, examine the mediating role of brand perception on variables influencing purchase intentions towards luxury cars and to study the impact of COO upon the purchase intention of luxury cars. The secondary objectives are to understand the luxury value perception, study the brand perception, and identify the factors influencing the purchase decision and v brand choice of cars and to find out the relationship between demographic variables and luxury value perception and brand perception of the respondents. This study adopted a descriptive research design. The statistical population of the study is luxury car owners in Tamil Nadu. A total of 500 respondents who are residing in Chennai, Coimbatore, Madurai, Trichy, Salem, Erode and Tiruppur in Tamil Nadu are selected by using Convenience Sampling technique and survey method is used for data collection. A structured non-disguised questionnaire is used to collect information and it has five constructs. A 5-point agree-disagree scale is used. Data collected have been analyzed using Descriptive statistics, Factor analysis, Z-test, ANOVA, Correlation, Regression and Structural Equation Modeling (SEM). They are analyzed with the help of SPSS 20 and SmartPLS 3 Software. From the findings it is inferred that majority of the luxury car owners in Tamil Nadu are male, 25-40 years of age, married, graduates, businessmen and earning between Rs. 25-50 lakhs per annum. The study finding also reveal that most of the luxury car owners drive an Audi and the car price ranges between Rs. 60-80 lakhs. COO plays a significant role in luxury car purchase. There are six luxury value perception factors are identified with the help of factor analysis such as hedonism value, uniqueness value, status value, conspicuous value, achievement and wealth value and price value. As far as brand perception is concerned, six factors such as reputation, affective perception, functional perception, integrity, brand familiarity and feeling good are identified. v Male respondents are more inclined towards uniqueness value, conspicuous value, brand reputation, affective perception and integrity when it comes to purchase intention of luxury cars. Married people are more towards hedonism value, uniqueness value, status value, achievement and wealth value, brand reputation, affective perception, functional perception and feeling good v The respondents with annual income above Rs.10 lakhs have higher levels of achievement and wealth value and the ones with income of above Rs. 50 lakhs have a higher level of brand reputation and purchase intention of luxury cars. Businessmen have a higher level of functional perception. Luxury value perception factors and brand perception factors are positively correlated with COO. Luxury value perception and brand perception factors are positively correlated with purchase intention of luxury cars. Luxury value perception and brand perception variables are good predictors of the purchase intention of luxury cars. The results of Structural Equation Modeling (SEM) reveals that uniqueness value, status value, hedonism value and brand perception strongly determine the relationship between purchase intentions of luxury cars. Brand perception plays a mediating role between luxury value perception and purchase intention of luxury cars and between COO and purchase intention of luxury cars.