Chinese Automobile Industry in Egypt Essay

Introduction There are many aspects regarding the Chinese automobile industry in Egypt regarding how it mirrors on customer satisfaction, despite common believes China has been producing cars before the Koreans for almost over 50 years. The very first Chinese car was a poor copy of what European, American and Japanese manufacturers produce. It wasn’t designed with the anxiety of comfort, security nor style; it was more like wheeled boxes made of light steel, with a primitive petrol engine. After 20 years, Chinese automobile industry has finally become one of largest market in automobile market. The major advantage that Chinese cars have is its low pricing compared to other cars from western auto giants such as Germany and France, which is a satisfactory advantage to most of the Egyptians. – Besides the fact that Chinese cars are of lower prices, there are other factors that consumers look for in a car; this research measures weather Chinese cars meets the customers perceived values of satisfaction regarding performance and design or not. Foreign car manufacturers may not think that china would create any threat to their automobile industry. However, the great prospective of the Chinese car maker cannot be taken lightly. It is the time for Chinese companies to support for more future challenges and take hold of a bigger share in the global market. Consumers in Egypt are very diverse; some base their perceptions regarding products on prior experience, delivering value expected and/or through overall performance. Those creates a huge conflict of interests between personal perceptions in the Egyptian market where some perceive Chinese cars as a low quality product with a cheap price tag, and others perceive them as economic high quality vehicles. – In 2004 China generated 5 million from car sales, coming third after America which generated 17 million and Japan with 5. 9 million. This shows that the Americans and the Japanese are considered to be of a high quality regarding safety, durability, resale price, and comfort which is what most Egyptian customers look for in a car. However, according to David Thomas [1] â€Å"China is going to become the second-largest market in the world sometime over the next two or three years,† [2] he also said â€Å"China is developing in very similar ways (to the developed markets), but doing it so much quicker,† [3] enunciating on the statement â€Å"so much quicker. †[4] Theoretical framework: 2. 1) Defining Customer satisfaction: Customer satisfaction is an evaluation of how goods and services provided by an organization to meet or to exceed the customer’s expectation and it may be measured directly by survey and expressed as a percentage. Customer satisfaction is a vague and conceptual, and the tangible appearance of the state of satisfaction will differ from individual to individual and good or service to good and service. In a competitive market, where companies compete for customers, customer satisfaction is perceived as a key differentiator and increasingly become a key element of business strategy now days. 2. 1. 1) variables effecting Customer satisfaction is:- There are various elements effecting customer satisfaction starting with product quality to after sales services. This requires the organization and even third-party service firms to work as a whole to ensure that the customers are getting what they want and more â€Å"serving the customer†. Customer Satisfaction has backgrounds in two ideas about quality; gap-based view of quality, which has to do with delighting the customers rather than just satisfying them, and conformance to a standard or specification, which has to do with minimize production errors and monitoring the quality of delivery. The best method is to take a section of customers and to try to ask them about their experiences over a certain period of time; however, this only shows the regular view and will oversight any key limits that are important from operational view. Understanding the link between consumer’s information search behavior and customer satisfaction shows a better over view of what should be done to meet what the customers want. Findings suggest that the three types of consumer as defined by whether and how they search for information (passive, rational-active, and relational-dependent). [5]. Each type of customer has a different way of perceiving satisfaction. – Customer satisfaction is a key element in competitive advantage since that a satisfied customer means: 1- Long-term relationship (repeat sale). 2- Good advertising (word of mouth). 3- Customer loyalty. 4- Obtaining new customers (followers). 5- Increase in market share. The relationship marketing is one of the most important tends in the marketing due to the importance of repeat business. Relationship marketing mainly focuses on developing trust and loyalty between the customer and the supplier. Establishing and maintaining loyal base of customers is a major key to a fast growing organization. – Customer satisfaction and attractiveness are linked together. In order to accomplish customer satisfaction accurately; some variables should be recognized. There are several factors that are applicable to automobiles by which consumers look for which, product quality, services, engine performance, design, and accessories. On the other hand, most customers are keen to buy a car including all these features with reasonable pricing. However, it’s difficult to obtain high quality with low price, as it’s said, â€Å"Better price for better quality† [6], which indicates that the more the customer pays, the higher the quality. Another variable hovering over customer satisfaction is customer’s retention. This aim is achieved when the customer is convinced with the performance of the car brand he chose to the point of repurchase. No business can exist without any customers and it’s important for the business to work closely with the customers to make sure that they are satisfied and their needs are met. Companies form a close working relation with their clients; so customer relation is important. Measuring the customer satisfaction is obviously to measure the quality and the performance of the good or service that the company provides. The objective is to determine how well the good or the service to achieves the purpose or the need for which it is purchased. Understanding, meeting, and exceeding customer expectations are fundamental in creating customer satisfaction. The customer relationship is a distinctive aspect of the relationship marketing. – Through analyzing several articles, we’ve found a relation between the customer satisfactions, needs and perceived value with the quality and price of the car’s characteristics, expectations and the company’s relationship value. There is a weak relation between all the independent variables, when the customer expectations are not met when buying a car with low prices. – Thus, it varies from a car’s characteristics to meet the customer’s needs but still with high or moderate prices, also, there is a strong relation between customers’ perceived value and the company’s s relationship value. Where, if the company wants their customers to remain satisfied, they must do a direct relation with them, for an example, making more events, doing the customer’s evaluation from time to time, and create a bond between the customer with hisher car, where heshe can appreciate more the price she/he paid, besides, the relationship between the company and the customers can be sometimes deceiving, where the customer can pay no attention to the bad characteristics or quality in hisher, just because of the great relation and its service quality of the company. The customer satisfaction is a very important element to have a successful business and in order to maintain that companies have to be able to cope with the change in the environment around its business, which has to do with understanding customer preferences. Also expanding the business won’t be attainable if you don’t have a satisfied customer base and that the company must be customer oriented instead of being manufacturing oriented. In the automobile industry the purchase intentions are moving towards cars which have a low gasoline consumption rate, so the industry must take the buyers behavior in consideration. – There are a lot of fields which create and retain customer satisfaction; in order to retain customer satisfaction all the products/services offered to the costumers should be matching the customers’ perceived value. – There are also factors that affect customer satisfaction such as the economic performance, for example when the financial crisis occurred, customers started focusing on products and alternatives to brands they used to purchase with lower prices. This economic draw back affected sellers’ attitudes pessimistically which reflected negatively their relationship with the consumers; however, there were sellers who were trying to grab customer’s attention through creating a strong relationship with them. – Another point to know the importance of the customer satisfaction to maintain business excellence, a seller who creates a good relationship with his consumers and offer them more than they expect is always a seller who maintains and sustains his business excellence, because the more the customer is satisfied the more he buys and create a positive word of mouth. 2. 2) Defining the product performance: Associating between the observed and currant performance of a product, and its predicted use and efficiency has generally been the known definition for customer satisfaction. Lately companies of different fields have learned and understood the importance of such matters due to the fierce competition. Consumers have grown to be more sophisticated, more skeptics and are constantly looking for the most efficient, and the most convenient products that would satisfy their needs and wants. 2. 2. 1) Variables affecting the car’s performance: There are several variables that affect the car’s performance, beginning with the car’s engine performance, which is the main image of the car that varies in the gas consumption, how much fuel did the engine burn? Also sometimes customers’ satisfaction relies on the speed of the car, and how far can it speed up in no time. Moreover, there are several variables that represent each other in a way that the car’s quality stands for its stability, durability, and the safety features. Which are the most important variables that can affect the customer’s satisfaction that every person is looking for safety that represent the stability and low possibility of any accident accuracy? Furthermore, the design of the car is related to the stability by which, the more aero-dynamic is the design the less air force that face the front of the car, that lead to a less fuel consumption, more stability, and of course more speed. Finally, the car accessories are sometimes very expensive that can cause a low customer satisfaction, and lack in buying the car. 2. 2. 2) Defining personal experience: – Experience is being an active participant in an event or an activity which leads to a growth in one’s skills or knowledge. Where the customer can perceive a certain product wither it’s going to meet or exceed his expectations or not, through the interaction with similar products or services. 2. 2. 3) Personal experiences related to the Chinese automobile industry: – When a consumer purchases any car, a certain image or knowledge goes through his mind. This image and knowledge becomes a standard for the consumer while comparing his/her car to any other alternative, because this is his/her experience with the product so in order for him/her to know what’s best and what’s worse he/she compares the alternative’s features to his/her own product’s features such as: performance of the engine, safety features, durability and stability, car quality, fuel consumption, accessories and design of the car. – Consumers differ in their way of thinking and the bases behind their decisions, that is why Chinese car manufacturers should put in mind that a consumer who buys their product is driven to this purchase through his/her perception, and because not every consumer has the same perception about Chinese cars, Chinese car manufacturers should build a positive and strong perception with the automobile consumers about their products, as a consumer maybe more interested in the car’s safety features rather than the price or cost efficiency and vice versa. 2. 3) factors affecting the overall customer satisfaction through cars performance: – Chinese automobile manufacturer should consider their image according to the consumer’s personal experience where the consumer perceive and compare the coming alternative with their own previous experiences related to the car they owned or would like to buy. – In order to meet the customer satisfaction, car makers should provide many researches on the need and wants of the customer by which every customers’ needs change in a certain period of time. – Customers have their own perception in each car brand and its performance, where customers’ needs vary from one to the other regarding the characteristics they look for in a car, thus car manufacturers provide several models in order to meet each segment’s needs. – As Chinese automobile industry has enlarged its market share all over the world, they should put in mind that consumer will always compare their products in order to make the purchase decision, that can always be affected by the performance of their previous car, where the Chinese automakers should exceed or meet the consumer’s expectation in order to start a preferable image and reputation especially when it comes to the quality and durability of their product as it’s known as a poor product in these terms particularly compared with their competitors. Conclusion: – Studies have shown that the relation between product performance and post experience has an effect on the overall satisfaction factors. This study will further more elaborate where the Chinese car manufacturers stand in the Egyptian market regarding all aspects of performance, image, and price. This research will also cross reference the Chinese automobile industry with other automobile industries. This will show if there is any positive or negative relationship between the customer satisfactions versus car performance and previous experience concerning the Chinese automobile industry.