Trust of Customers on Electric Motor Vehicles

Baljeeet Singh Harmanpreet

ME-MBA CIVIL-MBA
[email protected] [email protected] Jashanpreet Singh Sadioura
9856423528 COE-MBA
9656760793
[email protected]
Mukul Singla 9780840002
Karan Moudgill
CIVIL-MBA CIVIL-MBA
[email protected] [email protected]
9786526923

Abstract—The traditional motor vehicles creates the disadvantages that make them less attractive. Current battery
environment problems which are affecting the ecosystem technology, not allowing unlimited driving ranges, relatively
including human life. Considering these problems an long recharging times and high initial purchase prices are
alternative to traditional motor vehicles have to introduced. some of the EVs’ major disadvantages. On the other hand,
Hence, electric motor vehicles were discovered but after so
fuel for EVs is inexpensive, electric motors last significantly
many years people still donot have trust on the electric motor
vehicles and there can be various factors to this, Some of the longer than internal combustion engines and motor
factors like technology, awareness, advertisement and trust are maintenance is minimal. If the full costs of current environ-
taken into consideration in this paper and research survey has mental pollution were taken into account, EVs would
been done to study the impact of these factors on the buying compare more favourably to ICVs. Hence, an important
intention of the people. The research model that we put challenge for marketers and policy-makers wanting to create
forward is a mediation model. a global market for EVs is to assure that the market is
adequately informed, not only about the dis- advantages, but
Keywords—Technology, Trust, Awareness, Advertisement, also about the advantages of this new technology.
Mediation
Seen with the eyes of a potential customer, the EV
Today the world’s automobile population is growing at a
technology is a new (and unknown) propulsion system,
much faster rate than the human population. In 1950, there
which mainly removes one of the many non-market
were about 50 million vehicles on Earth. By 1994 the
disadvantages of traditional ICVs (local emissions) and
vehicle population had grown to almost 600 million, and if
reduces significantly a second (greenhouse gas emissions).
the present trend continue there will be over 3 billion
However, these societal benefits come at high costs to the
vehicles on Earth by the year 2050 (Sperling, 1995). Besides
individual owner/user of the EV: higher price, limited
granting vehicle users freedom, privacy and convenience,
driving range, shorter availability on a daily basis (due to re-
usage of the auto- mobile also threatens our environment.
charge time), less loading capacity (because of the batteries)
Particularly, by dumping increasing amounts of carbon
and lower speed and acceleration. In addition, the usability
dioxide and other climate-altering greenhouse emissions
of an EV is hampered by the lack of an infrastructure for
into the atmosphere, internal combustion engine vehicles
refuelling (recharging). On top of this, the EV does not
(ICVs) cause severe harm to both environment and humans.
solve other social ills connected with private transportation:
To reduce the harms of automobile usage, cleaner fuels have congestion, traffic accidents and the need for a dense lattice
been developed and fuel catalysts have been implemented. of paved roads.
However, these measures do not affect the emission of
A product like this hardly sells itself to potential customers.
carbon dioxide, the major contributor to the greenhouse
Hence, in addition to regulation backing the EV, skilful
effect. Dealing with the problems associated with the
marketing is needed in order for it to be accepted and
increasing number of vehicles worldwide without curtailing
diffused throughout society. A number of re- searchers have
peoples’ freedom of movement and choice – a basic value of
published thorough studies of national EV policies in
a democratic society – is one of the greatest challenges of
Europe and North America in recent years (. Studies
our time. Substituting current automobiles with an
facilitating the development of appropriate national and
environmentally sounder fleet seems to be an unavoidable
international policy for this area fulfil an obvious and urgent
element in a realistic solution. This could either be done by
need. However, even if appropriate policy suggestions
increasing the efficiency and reducing the emissions of
aiming at sup- porting the market acceptance of EVs are
ICVs, switching to less noxious fuels or by finding less
developed and implemented, the effort is in vain if a skilled
polluting propulsion systems (e.g., Sperling, 1995). The first
and committed marketing effort by EV producers is lacking.
two alternatives seem most obvious and closest at hand, but
Still, studies aiming to stimulate and support policy
in practice disappointingly little has happened in terms of
development by companies in this area are largely absent.
achieving environmental benefits along these routes. This is
Designing a marketing plan that can make the market accept
one of the reasons why increasing interest gathers around
the new product and ‘take- off’ requires knowledge and
developing vehicles with a less polluting propulsion system,
understanding of both the characteristics of the earliest
which could reduce local pollution as well as greenhouse
potential adopters, and of the new product itself. In this
emissions from the transportation system. However,
paper, an outline of a two- phase strategy for the targeted
compared to ICVs, current electric vehicles (EVs) still have

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marketing of EVs is developed, based, first, on a discussion starting point for segmenting the potential EV market and
of the current and expected future characteristics of EVs particularly for identifying early adopters. Hence, we
and, second, on a review of re- search on the characteristics suggest that the most likely early adopters are among those
of early adopters of new products. In this endeavour, we that perceive the balance between advantages and
focus solely on general issues that we judge to be disadvantages of EVs as compared with ICVs most
indiscriminately relevant for the marketing of EVs in (at favourably, perceive the EV as compatible with important
least) all developed countries. EV producers, of course, have values and do not perceive it as difficult to understand and
to adjust their marketing strategies to the special use. A plan for marketing of EVs should both target
characteristics of the national markets where they operate. potential adopters holding favourable perceptions and
influence the perceptions of these and other potential
I. LITERATURE REVIW adopters in a more favourable direction. Further, according
to Rogers classification, trialability and observability are
Under the conditions outlined earlier, who would be willing two important characteristics of EVs that should be used
to purchase an EV? Vehicle customers basically fall into actively in the marketing campaign.
two types: private individuals and (public or private)
organizations (or – as they are often referred to in this Regarding demographic and personality characteristics,
connection – fleet operators). The latter are by far the largest some of the general traits of the earliest adopters, unveiled
individual customers, but the former make up the large by previous research, may apply in this domain also (such as
majority of the vehicle market in most countries. As we will being more educated, higher in experimentation, knowledge
return to later, fleet operators form a market segment with and competence, being heavy users of similar products and
many desirable characteristics from the point of view of EV having the ability to understand the advantages of a new
marketing. In various countries, postal companies, electric product compared to old ones). Yet, due to its unique
utilities, public transportation companies, car rental combination of high costs and visibility, which makes EVs
companies and even the military have been among the first (like other cars) a high involvement product, we believe that
to test EVs (Knie et al., 1997; Anonymous, 1998a; the earliest adopters innovativeness . It seems reasonable to
O’Donnell and Oxfeld, 1998; Schulz, 1998; Morrison, assume that the most important source of domain specific
1999a,b). innovativeness is a favourable perception of the EV along
the dimensions suggested by Rogers (1995). Yet, due to its
Private individuals have approached EVs more reluctantly. unique combination of high costs and visibility, which
In 1990 the prediction was that about 1% of the American makes EVs (like other cars) a high involvement product, we
population would consider purchasing an EV (Buist, 1993). believe that the earliest adopters innovativeness . It seems
Three years later, Power and Associates (1993) found that reasonable to assume that the most important source of
6% of American house- holds could consider purchasing an domain specific innovativeness is a favourable perception of
EV. Kurani et al. 199 found that 1 of a sample of the EV along the dimensions suggested by Rogers (1995).
alifornia households would choose an EV over of an V.
a rling et al. (1998a) found that the percentage of
interested households depends on the relative performance
and price of the EV com- pared to ICVs. With the most II. METHODOLOGY
favourable – but in no way unrealistic – characteristics
included in the study, almost 30% of a sample of households 1. The problem was formulated and independent and
from a large Swedish city could consider purchasing an EV dependent variables were identified. We have taken
over an ICV. 3 constraints into consideration and the impact of
these constraints was studies on the buying
Although these percentages are highly un- certain and intention of the customers. The three constraints
difficult to compare, the conditions seem to change in taken into consideration are:
favour of EVs. However, the question is how EVs should be  Awareness
marketed in order to attract potential customers. Kurani et  Technology
al. (1994) suggest that there are many similarities between  Advertisement
the introduction of the microwave oven and the EV. Be- 2. Questions for survey were formed by taking into
fore individuals were made aware (e.g. through special consideration these three constraints and there were
cooking courses) that microwave ovens were complements 3 questions in each constraint.
of, not substitutes for, conventional ovens, acceptance was 3. Google form was formed and circulated and the
very low, while it increased dramatically afterwards. A responses were used to formulate final results.
product such as the microwave oven is a ‘high learning 4. Around 90 responses were used to formulate the
product’, meaning that to utilize its qualities individuals final results.
have to make behavioural adjustments. Although there also 5. The results were formulated and then interpretation
are obvious and important differences between the two was made using SPSS following the given steps:
products, the microwave oven and the EV have a lot in i) Data was copied into SPSS and was processed
common in this respect. to eliminate vacant entries and scaling was
done.
We believe that the classification by Rogers, (1995) of ii) Reliability analysis was done on all the three
innovations along five dimensions offers the most promising constrains to check the data reliability and the
 value for reliability for each constraint came to In our model technology impacts the advertisement
be significant for all the three constraints taken techniques and advertisement techniques further impact the
in our research model. awareness of the customers which will proportionally
iii) After checking the reliability compute increase the buying intention of the people.
variables were computed to run the regression Mediation model for our research paper is shown in the
analysis. following figure:
iv) Regression analysis was used to analyse beta
value and then to check the mediation and
moderation model for our research topic to
complete the research

III. RESULTS
1: Reliability Analysis SPSS results of impact of technology on trust:

The following table shows the reliability of the data

collected for each constraint:

A: Awareness:

SPSS results for the mediation model:

B: Advertisement:

C: Technology:

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