Power Of The Buyer : Medium Essay
The bargaining power of the buyer can have either a negative or positive effect on a company and the industry in which they operate. “Buyers affect an industry through their ability to force down prices, bargain for higher quality or more services, and play competitors against each other (Wheelen 112)”. The power that buyers have in the automobile industry is relatively moderate due to the following factors:
• Special Offers
- Manufacturers are desperate to sell inventory; therefore, they often offer deals for customers to buy their vehicles. While Toyota is the leading automobile manufacturer in the world; they are currently “offering finance with the purchase of a new Avalon, Camry, Corolla, Sienna, and Yaris with 0% APR” (New Car Deals). The main purpose of offering special deals in the automobile industry is to increase customer loyalty. Customer loyalty is difficult to achieve and automobile manufactures try hard to earn and retain loyal customers.
• Alternative suppliers and options
- In their efforts to increase customer loyalty, automobile manufacturers also have to realize that their customers have alternatives. Alternative for companies such as Toyota includes other manufacturers such as Honda, General Motors, or Ford as well as public transportation. There are plenty of transportation options given to the consumers and in order to compete; automobile manufacturers must meet customer expectations, provide great customer service, and…