CONSUMER PERCEPTION TOWARDS THE USE OF NEW AND USED PRODUCT (AUTOMOBILE INDUSTRY)
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
    Consumer perception is critical and fundamental to understand as it shapes their buying decisions, based on their sensory preferences-sight, sound, taste, smell and touch. Of course the culture, demographics, family and friends and other factors influences the consumer perception and interpretations (Gothan& Erasmus, 2008). The perceptions consumers have towards a products or service have a dramatic effect on their purchasing behavior. That is why businesses spend so much money marketing themselves, honing their customer service and doing whatever else they can to favorably influence the perceptions of target consumers. With careful planning and execution, a business can influence those perceptions and foster profitable consumer behaviour.
    In recent days, Nigeria is witnessing a change in consumerism. The market is now predominantly consumer driven. The focus is shifting for product based marketing to need based marketing (Adekunle, 2003). Consumer is given many options to decide. New and used products segment is no exception to this general trend. An effective market communication is imperative for reaching the target audience. So it is important that we study the consumer perceptions and behaviour towards new and used products in the Nigerianautomobile industry.
Human beings in general, are complex creatures who often do not seem even to know their own minds. It is seldom easy, and sometimes impossible, to generalize about human behaviour. Each individual is a unique product of heredity, environment and experience. Predicting such a strange behaviour of people is a difficult and complicated task, filled with uncertainties, risks, and surprises. Accurate predictions can yield vast fortunes and inaccurate predictions can result in the loss of millions of naira. Today, business around the world recognizes that“the consumer is the king” (Adekunle, 2003).Knowing why and how people consume products helps marketers to understand how to improve existing products, what types of products are needed in the market place, or how to attract consumers to buy their products. The era of liberalization, privatization and globalization has brought changes in society and life style of people.
Marketers can justify their existence only when they are able to understand consumers’ wants and satisfy them. The modern marketing concept for successful management of a firm requires marketers to consider the consumer as the focal point of their business activity. Although, it is important for the firm to understand the buyer and accordingly evolve its marketing strategy, the buyer or consumer continues to be an enigma- sometimes responding the way the marketer wants and on other occasions just refusing to buy the product from the same marketer. For this reason, the buyer’s mind has been termed as a black box, which should be opened by the seller to be a successful marketer. The study of consumer behaviour also includes an analysis of factors that influence purchase decisions and product use. Understanding how consumers make purchase decisions can help marketing managers in several ways. For example, if a manager knows through research that fuel mileage is the most important attribute for a certain target market, the manufacturer can design the product to meet that criterion. If the firm cannot change the designing the short run, it can use promotion in an effort to change consumer’s decision making criteria. For example, an automobile manufacturer can advertise a car’s maintenance- free features while downplaying fuel mileage.
    Perception is not a singular concept but a complex interactive process that occurs virtually simultaneously (Kaufman-Scarborough, 2001; Hawkins,2007). The perceptual process is initiated when the consumer becomes aware of and pays attention to an environmental stimulus (Cant, 2006; Babin& Harris, 2009). If the stimulus is important enough for the consumer, it will be interpreted either positively or negatively (Otieno, 2005), resulting in a perception.
Positive perceptions can influence consumers to purchase a product or use a certain stimulus, whereas negative perceptions can cause consumers to ignore a specificproduct or stimulus based on their previous experiences (Rousseau &Spoelstra,2003; De Klerk &Lubbe, 2008).
Consumers’ perceptions can, therefore, also be referred to as the consumer’s frameof reference for making purchasing decisions (Erasmus, 1995). Although perception is an important aspect in consumer behaviour there is limited researchfound in Nigeria regarding consumers’ perceptions of automobile products (VanEck 2004), which includes limited research regarding automobile product.Such research is needed as consumers from a Third-World Country, such as Nigeria, cannot be compared to consumers from a First-World Country due to thedifferent lifestyles, cultural diversities and attitudes influencing consumers’ purchasing behaviour (D’Andrea 2006; Gothan& Erasmus, 2008).
Therefore, the current study regarding consumers’ perceptions of automobile product will be conducted to form a better understanding of their pre- and post-purchasing behaviour of these product which might result in consumers’ satisfaction towards automobile products. In order to gain insight into consumers’ perceptionsregarding automobileproduct, each concept in the perceptual process isaddressed.
    1.2 Statement of Research Problems
A key factor in influencing consumer perception is exposure. The more information consumers have about a product, the more comfortable they are in buying it. As a result, businesses do all they can to publicize their offerings. However, this causes a problem; when every business bombards consumers with marketing messages, consumers tend to tune out. To influence consumer perception, a business not only must expose its product to consumers, it also must make it product stand out from the crowd.
Consumer risk perception is another factor businesses must take into account when trying to encourage buying behaviour. The more risky a proposition is, the more difficult it is to get consumers to act. If consumers aren’t familiar with a brand of product, they can’t assess the risk involved; it could be poorly built, for instance, or too costly compared to substitutes. Businesses can overcome this hesitancy by offering as much product information as possible in the form of advertisements or by encouraging product reviews. Allowing potential customers to hand the product in stores or test it at home also decreases risk perception, as does offering a flexible return policy.
1.3 Research Questions
Based on the research problems stated above, the following research questions were developed:
Do brand names have any significant impact on purchasing decision of new or used automobile products?
To what extent does the goodwill of the company have a significant influence on purchasing decision of new or used automobile products?
To what extent does advertising of a product by firms affect purchasing decisions of new or used automobile products?
Does ethical belief have any significance on the purchase of new or used automobile products?
1.4 Objective of the Study
The main objective of the study is to ascertain the role of consumer perception is purchasing decisions. The specific objectives were:
To evaluate customers perception and behaviour pertaining to brand names and how it affects the purchase of new and used products.
To identify and analyze how the goodwill of a company influences consumer purchasing decisions.
To identify the role of advertising in influencing consumer perception and purchasing decisions.
To evaluate the role of ethical belief in influencing consumer purchasing decisions.
1.5 Research Hypotheses
In order to empirically investigate the influence of the information contents of consumer perception towards the use of new and used product (automobile industry), the following hypotheses stated in their null forms have been formulated.
Ho1. Brand names do not have any significant impact on purchasing decision of new or used automobile products.
Ho2. Goodwill of the company does not have a significant influence on purchasing decision of new or used automobile products.
Ho3. Advertising of a product by firms affect purchasing decisions of new or used automobile products.
Ho4. Does ethical belief have any significance on the purchase of new or used automobile products?
1.6 Scope of theStudy
This study will focus on the perception of consumers towards the use of new and used automobile products in Lagos State, Nigeria, being one of the most important city in the Federation. Lagos is estimated to count for over 60% of the nation’s industrial and commercial establishments, has a population of over 20 million people and also one of the most populous state in Nigeria with many industries and end users of automobile products.  
1.7 Significance of the Study
This research would be beneficial to managers, marketers and potential entrepreneurs, because proper investigation of information contents of consumer perception toward the use of new and used products (automobile) would undoubtedly enhance efficient and effective decision making. This study would also be significant to companies and other business organizations.
This study will also serve as a resource material for the researchers for further research in related areas.