Determinants of Vehicles Buying Decision: in case of Addis Ababa
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Date
2018-06-18
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Addis Ababa University
Abstract
Understanding the consumer behavior, what factors affect buying behavior and how buyers make a purchase decision helps to market the goods or services successfully. The main objective of this paper was to investigate determinants of vehicles buying decision. The hypothesis that consists of five independent variables and one dependent variable was developed in parallel with research questions and research objectives. The representatives of the study were taken from Addis Ababa using quota and convenience sampling. A total of 390 questionnaires were distributed to sub cities found in Addis Ababa and 378 were returned. But, 371 were valid and used for statistical analysis. Due to the nature of study undertaken, explanatory research design was used. Based on the exploration from theoretical and empirical review, private automobile owners were found to be purchase their Vehicles influenced by multiple factors. There were a positive and significant effect relationship between Price and vehicle buying decision with effect of (𝛽=0.342) followed by brand of the car (with effect of 𝛽=0.244), and social factor (with effect of 𝛽=0.211). Conversely, there were no significant relationship between two variables that are cost of ownership (𝛽=0.072) and feature of the car (𝛽=0.057) and vehicle decision making. Expect p-value of feature of the car and cost of ownership, all the factors were significant with p-value less than p=0.05 but the p-value of feature of the car and cost of ownership were not less than the common alpha level of 0.05, which indicates that, statistically not significant. The regression analysis for this study specified that the independent variables are predictors of buying decision which is confirmed by R square 0.499. The factors predict the value of vehicles decision making by 50%. Price of the car, brand of the car and external factors were variables that highly considered by vehicle buyers during purchase decision making. The study revealed that cost of ownership and feature of the car are insignificant and don’t considered by buyers.
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Cost of ownership, Brand, Price