Abstract
This study of contemporary shifts in marketing communication and persuasion explores how and why people buy cars in a time of information overload and evolving buying patterns and selling strategies. The car is arguably one of modern society’s most cherished technical and cultural items. Over the past 100 years, the car has seen massive growth in distribution and use, with estimates that humanity collectively owns 1.3 billion vehicles. This exploratory study investigated and sought to establish how information asymmetry, persuasion and marketing communication is used by motor vehicle dealerships in Midrand, Gauteng. When a party in a transaction has more information than the other, this is called information asymmetry. A seller who knows more than the buyer about the product on sale can use this information asymmetry to sell low quality products as if they were high quality products. Buyers without the kind of information that sellers have thus have little choice but to buy products of uncertain quality. This theory of markets was first propounded by economist and Nobel laureate George Akerlof in the famous 1970 paper, “The Market for ‘Lemons’”. Akerlof argued that there is an inherent information asymmetry in markets which favors sellers. Fundamentally, “only the seller knows”. The buyer, however, is uncertain. The end result is a larger presence of people in the market who are willing to offer inferior goods to buyers who have difficulty distinguishing good quality from bad. In this study I revisited Akerlof’s theory of information asymmetry in light of the flood of information from the internet and social media that plays a role in our decision-making and persuasion about what to buy. I use examples of purposively sampled car dealerships in Midrand, Johannesburg, to establish how individual car buyers are persuaded to buy specific cars and how people persuade themselves to buy cars. The study utilised a qualitative design that employed semi-structured in-depth interviews with selected marketing representatives of three vehicle dealerships and nine selected buyers and prospective buyers. Thematic analysis was used to analyse data. The study found that the customer is still king, but not in the normative ways assumed. Rather, the customer is still able to turn indecision into decision by deploying ineffable information that is out of reach of the seller. While the seller is typically favoured by information asymmetry, the customer’s indecision-decision matrix neutralised or even checkmates this asymmetry. Unlike Akerlof’s pessimistic conclusion about lemons and dishonesty driving out quality, the study has an optimistic take way on the nature of relationships in the market. The suggestion by Akerlof that “firms establish a reputation for ‘honest’ dealing, which confers upon them a monopoly rent insofar as their services are limited in supply” is disproved by this study because it is not clear if the car dealer’s power and monopoly over information means anything if the customer can still veto the sale by choosing not to be impressed by an aspect of the dealer’s communicative performance. In the end, there is no decisive information that guarantees the market for cars. There is only the customer’s “indecision” which turns into “decision” in an unmeasurable and unknowable way, thus tipping the scales whether to buy or not to buy. The full range of aspects which turn indecision into decision require further study to unpack.
M.A. (Communication Studies)