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Consumer Behavior: Mitsubishi Xpander In Indonesia Automotive Market

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Company Background

Mitsubishi was first established as a shipping company by Yataro Iwasaki (1834-1885) in 1870. In 1873, its name was changed to Mitsubishi Shokai Mitsubishi’s name consists of two parts: ‘Mitsu’ which means ‘three’ and ‘hishi’ (which being ‘bishi’ which means under ‘my title’) and therefore there are three rhombus, which are reflected in the famous company logo. This is also interpreted as ‘three diamonds’. Mitsubishi as a broad-based company, plays an important role in the modernization of Japanese industry.

At first it was a brilliant idea that sparked from a way of thinking brilliantly in taking advantage of opportunities. This opportunity arises in line with government policies to finance investment, both foreign capital and domestic capital. On May 19, 1973 PT. Mitsubishi Krama Yudha Motors and Manfacturing which has authorized capital, and the capital is paid for $ 42,866,250. Approval of a joint venture occurred on January 18, 1973 between PT. Krama Yudha (KY), Mitsubishi coorporation (MC), and Mitsubishi Motors and Manufacturing. PT. Mitsubishi Krama Yudha Motors and Manufacturing is a company with foreign investment. (Mitsubishi, 2019).

Vision Statement

  1. Making a global company by producing and remaining in the fierce competition and emerging in the Asian market where growth is very good.
  2. Manage a safe and advanced factory by implementing QCD (Quality, Cost, Delivery) control by having responsibility for the environment and placing top priority to gain consumer trust.
  3. Increase satisfaction to Shareholders, Shareholders, Government, Directors, and all Employees (Mitsubishi, 2019).

Mission Statement

  1. Decrease in Costs.
  2. Quality Improvement.
  3. Supervision of delivery schedules.
  4. Conduct smooth and good preparation for new capital products.
  5. Improvement in the fields of management, safety and environment (Mitsubishi, 2019).

Market Situation

Automotive industry in Indonesia

The automotive industry sector is predicted to still grow positively in 2019. The stretch of road infrastructure development from west to east Indonesia is expected to become one of the catalysts for the growth of the automotive industry next year with a target of achieving 1.1 million units of new car sales.

In addition, with the target of economic growth in the range of 5.3%, it still gives entrepreneurs hope for improving economic conditions. Especially with Indonesia’s vehicle ownership ratio still low at around 87 vehicles per 1,000 populations, the potential for vehicle ownership is still large (Investments, 2019).

Competitors

The tight competition in the Low Multi-Purpose Vehicle (LMPV) segment has made producers compete to be the best. But most recently, the competition converged to belong to the Toyota Avanza and Mitsubishi Xpander as the two best-selling LMPVs. The LMPV class is a favorite for consumers, because it can accommodate all family needs in activities. Therefore, other manufacturers also do not want to miss enlivening, such as the Honda Mobilio and Suzuki Ertiga. Nissan Livina and Chinese manufacturer Wuling with Confero.

Problem/Need Recoqnition

Market induced

Typically, the majority of Indonesian people is when a new product is launched, it did not take long for them to think of having. Having a new car seems to elevate their status in the public eye. Sometimes they do not see in terms of needs and only satisfy the appetite of consumers. They easily get their vehicles by means of installments.

New Stage in life

A new stage in life raises new ways to meet needs. Before marriage, people will choose small cars that can accommodate their mobility. There is no need to load many passengers but can be reached by their financial condition. For those who live in urban areas, they may prefer to use a motorbike because they can avoid severe congestion in Indonesia. But when people get married they start glancing at LMPV or MPV to accommodate family members or be used to support their business.

Information Search

Level of Risk

Before Mitsubishi manufacturers launched Xpander, the consumer stigma towards Mitsubishi vehicles was quite risky. From maintenance costs, which are relatively expensive, compared to competitors, the resale value has declined considerably. However, it seems that at this time consumer perceptions of the Mitsubishi brand began to change. This was demonstrated by consumer enthusiasm from when Xpander was launched. Xpander is considered to be a ‘game changer’, so the stigma about risk that was previously understandable.

Level of Product Knowledge

Using the internet is the fastest and most accurate way to get product information. Another way to go to automotive exhibitions is immediately see physical products. Alternatively, you can also go to the dealer to test the drive product. Prospective buyers are now very critical and they will compare all the advantages and disadvantages of the product with its competitors’ products.

3.3 Evaluation

List of evoked set and why

Customers evoked sets are the main competitors like Toyota, Honda, Suzuki and Nissan. This is all because all Japanese manufacture provides vehicles for all needs. Consumers end up with some evoked sets because many information channels can accessed as a comparison material, this will help consumers when making a purchase decision.

Compensatory and non compensatory rules

Potential buyers in Indonesia mostly use compensation rules when buying vehicles. Example: in addition to mobilizing activities, vehicles can converted to support business activities or become online taxis. This can provide benefit and compensation for the owner.

Evaluation criteria

The evaluation criteria includes a dimension or the specific attributes that are used in assessing alternative options, criteria alternative can appear in various forms, for example, in buying a car a consumer may consider the criteria, safety, comfort, price, brand, country of origin of the manufacturer and also the spec as prestige , happiness, pleasure and so on (Gerber & Bothma, 2008).

Purchase

Availability of products

The persistently high consumer interest in Xpander, of course, has an impact on the length of the pivot period for consumers. The high demand for Xpanden and the length of the queue, has made Mitsubishi increase its production capacity to 10,000 units per month by building new factories in Indonesia. So that customers can enjoy this variant within 1 month of ordering (Charm, 2019).

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Retail factor

Mitsubishi’s big name is certainly often heard, especially in the automotive world. Mitsubishi often wins the world rally championship (WRC). Many models are a mainstay for the people of Indonesia. However, actually Mitsubishi is more known as a manufacturer of powerful cars. Some of the cars that are quite well known in the era are the Mitsubishi Lancer, Eterna, Galant, and Pajero, which are quite popular models in Indonesia (Mitsubishi, 2019).

Post purchase evaluation

Post purchase feeling

The customer experience after having xpader, most of them are very satisfied with the comfort and features that Mitsubishi attaches. When compared with competitors in the segment, Mitsubishi Xpander provides a very high standard and changed the game in low MPV segment. Complacency certainly perceived by the customer, because according to the expectations of what they expect (Gerber & Bothma, 2008).

Post Purchase Cognitive Dissonance.

When there are some people who feel that Xpander is not in line with expectations. He could sell his car, because the used car market for Xpander demand is still very high and this variant is still relatively new on the market (Gerber & Bothma, 2008).

Social Influence of buying behaviour

Family

The family is quite large influential factor in the purchase of vehicles, especially in the segment LMPV. Because most of them have considerable financial condition. So that the vehicle purchased must accommodate the needs of every member of the family, even for business. When going to buy a car they will exchange ideas on the desired car (Ahmed, Ameen, Shaikh & Memon, 2015).

Social class

Indonesians are greatly affected by the recognition of social status. They want to be seen by their community for their achievements. Vehicles can be used as a benchmark for their status, even if they get it in installments. But the car is their own pride (Shavitt, Jiang & Cho, 2016).

Psychological influences on Buying Behaviour

Motivation

Several aspects that motivate customers in choosing a vehicle are in terms of the delivery process, delivery time, negotiation process, dealer facilities, document/administrative handling, salespeople, and sales initiation. Mitsubishi in its press release said that since 2008, they revitalized passenger vehicles by making improvements and improving overall quality in all aspects starting from increasing product variants and quality, developing networks and dealer facilities, and the main ones, of course, followed by an increase in mindset and human resource capabilities. itself thoroughly (Durden, 2018) .

Perception

Customer perceptions of the Mitsubishi Xpander that are considered important and in accordance with customer expectations are robust engine performance, smooth car suspension, using environmentally friendly engines, adequate safety features,, high comfort features, comfortable acceleration, versatile family car that meets the needs of its users, and customers are satisfied with Mitsubishi Xpander products (Durden, 2018) .

Personal factor influences on buying behavior

Personality

The characteristics of Avanza owners are definitely family-oriented people, because this variant includes family cars. Then have a modern lifestyle, because of its futuristic design coupled with features with the latest technology. Love the high engine performance, because Mitsubishi is famous for its reliable engine power. The last is risk taking, negative stigma such as expensive maintenance costs, low resale prices that are not a barrier for people to choose Mitsubishi (Juneja, 2019).

Ages

The age range for this variant is in the age of 25-35 years. When someone starts a family and starts doing business. Especially for those who live in urban areas. They need a means of mobilization that suits their needs (Juneja, 2019).

Marketing Strategies Recommendations

Product

  • Design is a very important factor, many prospective buyers choose Mitsubishi Xpander because it has a dashing and futuristic exterior design. Unique dynamic Shield design with no mainstream lighting layout.
  • Field Cabin: With the largest dimensions, the Expander has the most spacious cabin, even the second row seats can be sliding sideways.
  • Ground Clearance Height: Xpander is the highest in its class, which is 205 mm, moreover there is no axle bump at the bottom, making its cruising better than Avanza.

By presenting quality products that are very good, indirectly is a means of promoting the product itself. People are interested in buying Xpander because of the quality and performance that it has on the product (Mitsubishi, 2019).

Price

The price of Mitsubishi Xpander cars is able to compete and is in accordance with the ability of consumers to buy. Price conformity indicators with benefits according to consumers are appropriate for Mitsubishi Xpander products, this is due to the many latest features that are owned by Mitsubishi Xpander cars so consumers feel the price offered is in accordance with the benefits felt by consumers (Gerber & Bothma, 2008).

Place

In total there are approximately 320 motorcycle dealerships scattered across Indonesia. Prospective customers can easily visit Toyota showroom for purchase. Additionally Mitsubishi is also actively participates in the exhibition event held yearly regular vehicles such as Indonesian international motor show (Mitsubishi, 2019).

Promotion

The new campaign for Mitsubishi Xpander, starting with ad impressions on various national television channels and witnessed on the official Mitsubishi Motors Indonesia YouTube channel starting July 1, 2018. ‘Roadshow tons of real happiness’, is a form of unique and fun promotion in the form of an amusement park carnival. To show Xpander as the only full-featured Small MPV and a great power capable of bringing tons of happiness to Indonesian families (Mitsubishi, 2019)..

Conclusions

The discussion above is a bit much gives an overview of consumer behavior in Indonesia against the decision to buy a vehicle LMPV Mitsubishi Xpander. It also exposes the business strategies undertaken by Mitsubishi automotive manufacturer to the automotive industry in Indonesia. Proven Mitsubishi has managed to attract the attention of consumers, this is indicated with a huge enthusiasm and the very high demand from variant Xpander. Where this segment for more than 15 years ruled by the other Japanese manufacturers, namely Toyota. Mitsubishi managed to map the needs and desires of consumers in Indonesia. Xpander be the answer to the needs of the family, affordable transportation but has full features and exceptional comfort. So that a high level of customer satisfaction that can be beneficial for Mitsubishi to produce other new variants in the future.

Reference List

  1. Ahmed, R., Ameen, N., Shaikh, E., & Memon, F. (2015). Influence of Children on Family Purchase Decisions (1st ed.). GRIN Verlag GmbH Cite this publication.
  2. Carnews. (2017). All-New Mitsubishi Xpander Debuts In Indonesia. Retrieved from https://carnews.types-cars.com/2017/08/all-new-mitsubishi-xpander-debuts-in.html
  3. Charm, N. (2019). Mitsubishi aims to build 120,000 Xpander MPVs this year to cut waiting list | BusinessWorld. Retrieved from https://www.bworldonline.com/mitsubishi-aims-to-build-120000-xpander-mpvs-this-year-to-cut-waiting-list/
  4. Durden, O. (2018). Psychological Factors That Influence Consumer Buying Behavior. Retrieved from https://smallbusiness.chron.com/psychological-factors-influence-consumer-buying-behavior-80618.html
  5. Gerber, K., & Bothma, N. (2008). Consumer behaviour. Cape Town: Pearson Education South Africa.
  6. Indonesia Investments, I. (2019). Indonesia Has 100 Million Internet Users, Internet Penetration at 40% | Indonesia Investments. Retrieved from https://www.indonesia-investments.com/id/news/todays-headlines/indonesia-has-100-million-internet-users-internet-penetration-at-40/item6827?
  7. Investments. (2019). Automotive Manufacturing Industry Indonesia – Car Sales | Indonesia Investments. Retrieved from https://www.indonesia-investments.com/business/industries-sectors/automotive-industry/item6047?
  8. JakartaPost. (2018). Government praises Mitsubishi for exporting 21,000 Xpander vehicles. Retrieved from https://www.thejakartapost.com/news/2018/04/26/government-praises-mitsubishi-for-exporting-21000-xpander-vehicles.html
  9. Juneja, P. (2019). Personal Factors affecting Consumer Behaviour. Retrieved from https://www.managementstudyguide.com/personal-factors-affecting-consumer-behaviour.htm
  10. Mitsubishi. (2019). Mitsubishi – Homepage | Mitsubishi Motors Indonesia. Retrieved from https://www.mitsubishi-motors.co.id/
  11. Ratriyana, I. (2018). Global Brand Perception in Indonesian Young Consumer. Kne Social Sciences, 3(10), 357. doi: 10.18502/kss.v3i10.2921
  12. Shavitt, S., Jiang, D., & Cho, H. (2016). Stratification and segmentation: Social class in consumer behavior. Journal Of Consumer Psychology, 26(4), 583-593. doi: 10.1016/j.jcps.2016.08.005

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Consumer Behavior: Mitsubishi Xpander In Indonesia Automotive Market. (2022, February 21). Edubirdie. Retrieved December 2, 2022, from https://edubirdie.com/examples/consumer-behavior-mitsubishi-xpander-in-indonesia-automotive-market/
“Consumer Behavior: Mitsubishi Xpander In Indonesia Automotive Market.” Edubirdie, 21 Feb. 2022, edubirdie.com/examples/consumer-behavior-mitsubishi-xpander-in-indonesia-automotive-market/
Consumer Behavior: Mitsubishi Xpander In Indonesia Automotive Market. [online]. Available at: <https://edubirdie.com/examples/consumer-behavior-mitsubishi-xpander-in-indonesia-automotive-market/> [Accessed 2 Dec. 2022].
Consumer Behavior: Mitsubishi Xpander In Indonesia Automotive Market [Internet]. Edubirdie. 2022 Feb 21 [cited 2022 Dec 2]. Available from: https://edubirdie.com/examples/consumer-behavior-mitsubishi-xpander-in-indonesia-automotive-market/
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