IN DEPTH ANALYSIS OF RESEARCHCONDUCTED ON CONSUMER BEHAVIOUR

SUBMITTED BY:SHORYA JAIN

SIDDHARTH GUPTASHREYA GHOSHKANIKA VERMA

SUBMITTED TO:

DR. SATYA PRAKASH

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REPORT ON FOUR

WHEELER INDUSTRY

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FORWARDThe four wheeler industry is one of the focus industries for the consumer behaviour project, given its importance in the emerging economies like India. The Indian 4 wheeler industry has emerged stronger from the recent global downturn, and sales across all segments have seen record breaking numbers in the recent past. While the Indian industry has much to look forward to, by way of steady growth in both domestic and export markets, there are some clear challenges accompanying the opportunities in greener vehicles and alternative mobility. In order to capitalize on these opportunities, the industry needs to develop or acquire technologies and capabilities to produce vehicles that meet future market needs. The government for its part has much to do to ensure the growth trends are maintained, and encourage the development of greener vehicles, while also improving compliance to even existing environmental standards.

This report attempts to capture the behaviour of consumers towards their cars and the industry as a whole. The report basically highlights their buying patterns and their tastes and preferences for a particular car. The report is based on the market survey done in this regard which highlights the consumer inclination towards the cars they possess and they wish to possess. The cars they like, the features they consider as important or which majorly influences their buying decisions.

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INDEX

S.No Particular Page No.

1. Introduction 7

2. Major Car Companies In India 8

3. Information Regarding The Top Companies In India 9

4. Objective 14

5. Literature Review 15

6. Methodology 17

7. Statistical Analysis of the result of the Survey conducted 18

8. Conclusion 30

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INTRODUCTIONTraditionally the Indian automobile market has been dominated by the two-wheeler segment, which accounted for almost 75% of the automobile sales in the country. However, since 2005, the passenger car market (70% of which it comprises of the small car segment) has boomed.

EXIBIT 1 SHOWS THE DEMAND FOR PASSENGER CAR SEGMENTTO BE 3.8 MILLION IN THE NEXT 10 YEARS. SMALL CAR SEGMENT IS EXPECTED TO GROW TO 2.66

MILLION BY 2020.

The export market of small cars in India is growing at a rapid pace of Average Compound Average Growth Rate (CAGR) of 33% over the last five years. As per the IHS Global Insight Inc. estimates, by 2016, India is set to topple Japan as the world’s biggest small car producer, building as many as three million units. By 2013, 31% of the world’s small cars would be from India.

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MAJOR CAR COMPANIES IN INDIA

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INFORMATION REGARDING THE TOP TEN COMPANIES IN INDIA

1. MARUTI SUZUKI

When we think about a car, the first name that comes in our mind is the leader of an Indian car market ‘Maruti Suzuki’. Maruti Suzuki is a joint venture between ‘Maruti’, an Indian company, and the Suzuki, a Japanese automobile manufacturer. Maruti Suzuki started out with its first car model “Maruti 800”, which was the most successful car in India till 2010. From hatchbacks to sedans, from SUVs to MUVs, Maruti Suzuki manufactures cars for all the sections of the society.

2. HYUNDAI

Hyundai, a globally renowned car maker has occupied second place in the list of top 10 car companies in India. Hyundai made debut in India through its Indian subsidiary, Hyundai Motor India Limited in the year 1996.Hyundai Santro was the first car launched by the company in India, which was introduced in 1998. Today, the company holds numerous car models in their respective portfolios, including: Eon, Santro, Grand i10, Xcent, Verna, i20, Creta, etc.

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3. TOYOTA

Toyota is a Japanese Multinational Corporation incorporated in the year 1937 and known for making automotive products packed with the cutting edge technology. Toyota made debut in India through its subsidiary Toyota Kirloskar Motor in 1997.Their car portfolio include: Liva, Etios, Etios Cross, Corolla Altis, Qualis, and Fortuner etc. Toyota, within two decades has made a strong hold in the car segment in the country and its sales have increased manifold.

4. FORD

Ford, a globally acclaimed car company is next on this list, which was incorporated in the year 1903. Ford stands among the largest car making companies in the world. Ford India has a manufacturing facility at Maraimalai Nagar, near Chennai, which has a capacity of making more than 1.6 Lac cars. Their fleet of cars in India includes:

Classic Figo Endeavour Fiesta Ecosport

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5. HONDA

Honda Cars India Limited is a subsidiary of Japanese Multinational Corporation, Honda. The subsidiary was formed in 1995 and presently holds a significant share of a car segment in the country. Honda also manufactures other products like Power equipment, Engines, Solar cells, Mountain bikes and ATV.

6. TATA MOTORS

A part of Tata Group, Tata Motors Limited is next on this list, which is a leading automobile company in the country. Incorporated in the year 1945, Tata Motors Limited is known for making cars packed with great features at optimum prices. Apart from cars, the company also manufactures trucks, buses, construction equipment and military vehicles. Also, the company stands among the leading bus and truck manufacturer in the country.

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7. VOLKSWAGEN

A German multinational car maker, Volkswagen stands at 7th in the list of top 10 car companies in India. The company operates in India through its subsidiary, Volkswagen India, which was formed in 2007. The company, within a short span of time has managed to capture a significant market share of a car segment in the country. Vento, Jetta and Polo are some of the car models launched by the company in India.

8. MAHINDRA & MAHINDRA

Mahindra & Mahindra is the second Indian automobile maker in this list, which came into existence in 1945. Headquartered in Mumbai, Mahindra & Mahindra is a leading car and tractor manufacturer in the country. The company manufactures and sells SUVs, tractors, pickups, commercial vehicles, and recently entered into the segment of ‘two wheeled motorcycles’.

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9. RENAULT

Renault India Pvt Ltd was started in India in 2005 and ranked ninth in the list of top 10 car companies in India. Headquartered in Oragadam, Chennai, Renault has seen a great success with its compact SUV “the Duster”, one of the most successful car models of the company. Other cars under their banner include: Fluence, Koleos, Pulse and the Scala. In 2011, it was the third largest auto manufacturer in Europe and ninth in the world, by production.

10. GENERAL MOTORS – CHEVROLET

Chevrolet is not exactly a company, but a brand, of American multinational auto maker ‘General Motor’ (GM). The company sells its products under 13 brands in more than 120 countries. If we talk specifically about GM, it is the world’s largest auto manufacturer, by sales. The company manufactures numerous car models from sedan to hatchback and from compact cars to SUVs. It includes:

Chevrolet Spark Chevrolet Beat Chevrolet Sail Chevrolet Sail Chevrolet Tavera Chevrolet Enjoy and many more.

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OBJECTIVE

To study, understand and analyse the consumer behaviour in context of four wheelers (Cars) they possessed, they possess and are willing to purchase in the near future.

Studying the pattern of different features they like in their cars including price, comfort, mileage to name a few and presenting a statistical analysis of the same.

To know what factors influence their purchase decisions.

To know whether they are loyal towards their brand or not. If yes, why and if no then why not.

To find the relevant information regarding some of the areas discussed and more and then analysing their behavioural pattern respectively.

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LITERATURE REVIEW

A theory of services in product industriesMichael Cusumano, Steve Kahl and Fernaando Suarez (2008) in their research paper “A theory of services in product industries”, has concluded that in many product oriented industries, services have become increasingly important. In case of automobiles, many automakers generate the vast majority of their profits from a service activity closely tied to their product activity. The automobile industry overall generates a large portion of its profits from other product-related service activities such as insurance and repairs. The authors argued that despite the seemingimportance of services, there is not much theory to help researchers or practitioners explain the 3 conditions under which services matter in product industries. The general view that emerges from the services literature is that services tend to become important for manufacturing firms once their industries reach a mature stage.

Shashank Srivastava (2012) GM Maruti Suzuki has mentioned that the consumer is price conscious and the brand loyalty is diminishing because of the number of options in each segment moreover the customers are ready to experiment today.

Mona J Fitzsimmons (2010) has concluded that the profitability of automobile manufacturers depends on exploiting value added services for instance automobile manufacturers have discovered that financing and after sales service can achieve significant profits.

Kevin Keller (2012) Caterpillar has become a leading firm by maximizing the total customer value with the help of effective CRM, best after sales service in the industry and better trained dealer. This allows the firm to command a premium price of 10% to 20% higher than competitors such as Volvo, Komatsu etc.

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Arvind Saxena (2010) Director and Board member (marketing and sales), Hyundai Motor India (HMIL) “No company in automobile sector can fight competition on price. Companies need to have the right product, distribution, CRM and after sales service network to grow.

Abhijeet Singh (2011) Tata Motors uses a customer relationship management and dealer management system (CRM-DMS) which integrates one of the largest applications in the automobile industry, linking more than 1200 dealers across India.CRM DOS has helped Tata Motors to improve its inventory management, tax calculation and pricing. This system has also proved to be beneficial to dealers because it has reduced their working capital cost.

LINKS FOR THE LITERATURE REVIEW

http://shodh.inflibnet.ac.in/bitstream/123456789/266/3/03_literature%20review.pdf

shodh.inflibnet.ac.in › bitstream › 03_lite

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METHODOLOGY

Preparation of the Questionnaire A detailed questionnaire was designed after carefully analysing the various inputs in a way that appeals to the public. Sensitive areas where questions like their salaries etc. were carefully planned so that it doesn’t look offensive to the person in any form whatsoever. The questions were spread across scales like Likert Scale, Semantic Differential Scale, and Behaviour Intention Scale etc. Some of the areas covered in the questionnaire included: The per month income of the consumer Brand Preference What more the consumer would expect Purpose for which they use their car Factors that consumer consider important while purchasing their car. Promotional activities that influence the consumer to purchase car to name a few.

Collection of Primary DataAround 50 copies were distributed to random people of both the genders equally in which they were asked to answer the relevant questions on the basis of which the further analysis was to be made.

Collection of Secondary DataOn the basis of the relevant inputs derived from the questionnaires Statistical tools were used to analyse the data of the consumers.

Analysis of the dataThe data was analysed using excel in the form of graphs and pie charts.

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STATISTICAL ANALYSIS OF THE RESULTS OF THE SURVEY CONDUCTED

The respondents included the males and the females to whom the questionnaires were distributed and then the relevant data was extracted. According to the survey conducted the respondents included 61% males and 39% females.

Range In which Income Falls

39%

61%

Respondent Of QuestinnaireMALE FEMALE

0

5

10

15

20

25

Income Group

Number Of People

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The bar graph denotes the range in which the income of consumers falls on a monthly basis. As you can see the highest range here is above 3,00,000 per month which is 88% which means the average consumer belongs to the upper middle class segment and can afford a car of the mid to a slightly high segment. Consumers having income ranging between 1, 00,000-3, 00,000 per month are lesser in numberwith percentage of 80% of the consumers as compared to the ones mentioned above. So we can say that consumers are less likely to go for most economical cars that fall between the price range of 30, 000- 50, 000

The pie chart in the figure above denotes the consumers who are actual car owners or who possess a car at present. The results pretty much state that almost 70% of the consumers who were surveyed are car owners and only 30% of them are there who do not own a car at present.

70%

30%

Car OwnersYes No

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The bar graph shown above represents whether their present car is their first car or not. As you can see the consumer claiming “No” is almost 28%in comparison to the one claiming “Yes” which turns out to be just 22%. This indicates that the sample population who answered our survey comprises more of experienced consumers.

Usage analysis represents how long the consumer has been using his/her car. Almost 83% of consumers use their car for 1 to 5 years. This indicates that most of the consumers don’t tend to change their car so often. This indicates a high level of reliability on the brand.

Yes No

2228

First VehicleSeries1

6

25

912

0

5

10

15

20

25

30

Less than 1year

1 to 5years

6 to 9years

10 yearsand above

Usage Period

Number Of People

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Source Of information in selecting the car

This pie chart denotes the source of information a consumer chooses in selecting his/her car. It is pretty much evident that 47% of the consumers were influenced by advertisements. So it means that advertisements influence a consumer’s buying preferences in India to a great extent. So having a sound image and keeping the consumers updated with the latest products along with focusing on creating a sound brand image are the key factors the car companies need to take into consideration. 8% of the consumers who were surveyed have taken suggestions from relatives while 24% took their friends’ suggestions. This portrays the importance of having a sound customer satisfaction as it can affect the future sales to a large extent. 13% of theconsumers relied on social media and 8% were influenced by factors other than the ones mentioned above.

47%

13%8%

24%8%

Source Of Information For Selecting Car

Advertisement Social Media Realtive Friends Others

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The bar graph above portrays the consumers who have switched to a different brand recently. Taking the statistical data into consideration it can be analyzed that almost 83% of consumers chose technology as the reason for switching brands. So it is important for the car companies to take technology as a priority feature in order to retain consumers for long. Apart from that, reasons like features and comfort comprising of 67% and 20% respectively came next in line while luxury as a feature which comprised of 41% of the consumer inclination didn’t turn out to be an enticing reason for switching brands.

Preference

Technology Features Comfort Luxury

Number Of People 10 8 6 5

0

2

4

6

8

10

12

Reason For Switch

6% 14%

64%

8%8%

Reason For ChoiceSocial Status Business Purpose Comfort Less Cost Others

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The pie chart above highlights the reason for which the consumer chose the particular car he/she possesses while purchasing it. Almost 64% of the consumers have relied on comfort as the main reason for buying their car. Apart from that 14% looked at business purpose as the reason for purchase. Only 6% of the entire consumer base who were surveyed opted for social status as the reason for purchase while 8% looked forward to reasons other than the ones mentioned above.

Usage Of car

The above bar graph denotes the reasons for which the consumers use their car. Almost 83% of the consumers use their car for daily commuting. Around 40% of the consumers use their car for family outing. 33% of the consumers use their car for road trips. A very negligible percentage of the entire consumer base that was surveyed uses their car for rental basis.

0

5

10

15

20

25

30

Usage Of Car

Number Of People

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Factor effecting while purchasing car

The following bar graph represents the different factors that consumers take into consideration while making a purchase decision.

Price: Taking the factor of price into consideration, almost 93% consumers rated it as highly important. 36% of the consumers rated the price factor as important while no one turned out to be neutral and only 10% of the entire consumer base who was surveyed rated the factor of price as not important while 6% remained neutral in their choice.

Comfort: Taking the factor of comfort into consideration almost 97% of the entire consumer base who was surveyed rated comfort as the highly important factor. 30% of the consumers rated comfort as important. 6% remained neutral in their choice. Only 10% of the consumers said that theyconsider comfort as highly not important.

0

5

10

15

20

25

30

HighlyImportant

Important Neutral NotImporatnt

Highly NotImportant

Price

Comfort

Mileage

After Sale Service

Resale Value

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Mileage: Almost 60% of the consumers who were surveyed said that mileage is not a highly important factor for them. Albeit, 56% said that it is an importantfactor. Almost 20% people remained neutral in their choice. Only 3% of consumers said that mileage is a highly not important factor for them.

After Sale Service: Almost 77% of the consumer base who were surveyed said that after sale service is a highly important factor that effects their purchase decision. 37% of the people chose after sale service as an important factor. Almost 13% of the people remained neutral in their choice. 13% of them rated after sale service as highly not important.

Resale Value: Almost 37% of the entire consumer base chose resale value as ahighly important factor that influences their purchasing decision. 57% of the consumers chose resale value to be an important factor. Almost 27% of the consumers remained neutral in their choice. 27% of the entire consumer base rated resale value as highly not important.

Influence of Promotional Activity

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Strongly Agree

Agree

Neutral

Disagree

Strongly Disagree

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The above bar graph highlights what promotional activities influence purchase decisions of the consumers.

Celebrity Endorsement: Almost 45% of the entire consumer base who has been surveyed strongly agreed that celebrity endorsement influences their purchase decision. 30% consumers agreed this factor to be an important driver for influence. Almost 75% consumers remained neutral in their choice. 40% of the entire consumer base which has been surveyed disagrees with celebrity endorsement as being an important factor that drives their purchase decision while 30% strongly disagrees.

Discount Offers: Almost 70% of the entire consumer base which was surveyed strongly agreed that discount offers is a factor that entices their purchase decisions. 85% of consumers said they agree with this factor as an important driver for influence. 60% consumers remained neutral in their choice while 20% consumers disagreed.

Exchange Offer: Almost 55% of the entire consumer base that was surveyed strongly agreed that exchange offer acts as a driver for influence for them. 65% of the consumers agreed that exchange offer influences their decisions. 95% consumers remained neutral in their choice while 30% disagreed.

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TV Advertisement: Almost 40% of the entire consumer base strongly agreed that TV advertisement acts as a driver for influence for them. 70% of the consumers said that they agree with this factor as an important driver for influence. 90% consumers remained neutral in their choice. 25% of the consumers said they disagree with this factor as being an important driver for influence while 10% of them strongly disagreed.

Auto Expo: Almost 40% of the entire consumer base strongly agreed that TV advertisement acts as a driver for influence for them. Almost 60% of the consumers said that they agree with this factor as an important driver for influence. 75% of consumers remained neutral in their choice. 30% consumers strongly disagree with this factor being animportant driver of influence while 10% consumers strongly disagreed.

Social Media: Almost 45% of the entire consumer base strongly agreed that TV advertisement acts as a driver for influence for them. 25% of the consumers said that they agree with this factor as an important driver for influence. 40% consumers remained neutral in their choice. 30% of the consumers said they disagree with this factor as being an important driver for influence while 5% of them strongly disagreed.

28%

30%20%

22%

Future Purchase

Next 1-2 Years Next 2-3 Years

Next 3-5 Years After 5 or more years

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The above pie chart highlights when the consumers are looking forward to purchasing their next car in future. It is pretty much evident from the pie chart that almost 30% consumers said that they will purchase their next car in next 2-3 years, 20% said that they will purchase their next car in next 3-5 years, 28% said that they will purchase their next car in next 1-2 years and 22% said that they will purchase their next car after 5 years.

Previous Buy

The above bar graph highlights the last purchased car of the consumers. According to the analysis, almost 86% said they had Maruti as their previous car brand, 57% said they had Hyundai as their previous car brand, 21% said they had Nissan as their previous car brand, 21% said they had Chevrolet as their previous car brand and 29% said they had Renault as their previous car brand.

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Past Purchase

Number Of People

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Present car

The above bar graph represents the present car brand the consumers have. As per the analysis, 86% of the consumers have Honda, 76% of the consumers have Hyundai, 57% of the consumers have Maruti, 29% of the consumers have Fiat, 29%of the consumers have Toyota, 7% of the consumers have Audi, 7% of the consumers have BMW, 43% of the consumers have Renault, and 35% of the consumers have Volkswagen.

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Present Car Brand

Number OfPeople

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CONCLUSION

The survey conducted proved to be quite enlightening. The consumers who participated in our survey had varied taste and preferences across different domains. Some considered price to be an important factor that influenced their purchase decisions while others considered features to be more important to look forward to while purchasing their car. They provide us their inclination towards a particular brand preference and even told whether they were loyal towards it or not. They even shared their incomes and their future cars they look forward to purchasing. We even got to know about their purpose of purchasing their car. Some considered daily commuting to be an important factor while others gave preference to family outings and road trips. They also talked about how long they have been using their car and told us what factors influence their purchase. They told us about the source of information they went through in order to buy their car. After analyzing all the data provided by the respondents it can be concluded that Indian car market has a huge scope and as the purchasing power of the people are increasing, their tastes and preferences are also changing.