This thesis focuses on the effect of advertising within the industry of luxury cars. The purpose is to develop and validate a model and an associated measurement instrument for the effect of advertising. The model is a structural equation model with latent variables, and the model should relate to advertising effect, measured as buying intention and loyalty to its driving factors. The quantitative research is carried out among existing owners of the three most common luxury car brands in the Danish market: Audi, BMW, and Mercedes-Benz. The theoretical framework comprises consumer behavior, brand equity, how marketing communication works, and how to measure the effect of advertising. Secondary data includes existing surveys and articles within the field of luxury cars. Through this research, following drivers are identified: ad awareness, ad quality, attitude towards the ad, attitude towards product category, company image, brand awareness, brand quality, brand value, brand knowledge, and brand attitude. Initially, a pre-survey is conducted in order to support the hypotheses retrieved from theory and secondary data. The hypotheses represent correlations between the drivers. Subsequently, data collected in the main survey is applied to test and estimate the structural equation model. Impacts of drivers in terms of future advertising performance are then analyzed. Results indicate that brand attitude is the main driver of buying intention and loyalty. Brand quality and brand value have the second and third largest impact on buying intention and loyalty. Attitude towards the ad has a smaller impact, as well as brand knowledge. The quality of the ad has a minor effect and company image and attitude towards the product category have the smallest, if any, impact on buying intention and loyalty. Interestingly, results also indicate that consumers who recognize the ad do not rely on brand quality as much, and attitude towards the ad has the second largest impact on buying intention and loyalty. Results are integrated in a priority plot in order to identify the strategic priorities in relation to strengthening the loyalty of luxury car owners in an advertising context. In this way it is possible to determine how the resources should be allocated in order to maximize the effect of advertising. Especially functional and symbolic associations related to the brand are important to the respondents.
|Educations||MSc in Economics and Marketing, (Graduate Programme) Final Thesis|
|Number of pages||169|