Car Market and Buying Behavior a Study of Consumer Perception

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Transcript of Car Market and Buying Behavior a Study of Consumer Perception

DESSERTATION ON A STUDY ON FACTORS AFFECTING CONSUMER BUYING BEHAVIOUR TOWARDS BUDGETED CARS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE MASTERS DEGREE IN BUSINESS ADMINISTRATION OF UTTARAKHAND TECHNICAL UNIVERSITY, DEHRADUN SUBMITTED TO: INTERNAL GUIDE PROFESSOR IMS Dehradun SUBMITTED BY VIKRAM SINGH RAWAT (MB11B56) EXTERNAL GUIDE

INSTITUTE OF MANAGEMENT STUDIES, DEHRADUN BATCH 2011-13

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Table of Content

1. Executive Summary03 2. Introduction..05 3. Overview of the Auto segment12 4. Review of Literature24 5. Objective of the study32 6. Research methodology.35 7. Limitation of the study..38 8. Finding and Analysis.39 9. Conclusion59 10. Annexure...64

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Executive SummaryThe automobile industry today is the most lucrative industry. Due to the increase in disposable income in both rural and urban sector and easy finance being provided by all the financial institutes, the passenger car sales have increased at the rate of 38% per annum in June 2005-06 over the corresponding period in the pervious year. Further competition is heating up in the sector with a host of new players coming in and other like Porsche, Bentley, Audi, and BMW all set to venture in the Indian markets. One factor that could help the companies in the marketing of their product is by knowing and creating a personality for their brands. This report attempts to answer some of the questions regarding brand personality of selected cars in India by conducting the market research. This report is categorized into parts, deals with introduction to brand personality, companies selected, product and the industry. The automobile industry today is the most lucrative industry. Due to the increase in disposable income in both rural and urban sector and easy finance being provided by all the financial institutes, the passenger car sales have increased at the rate of 25% per annum in June 2005-06 over the corresponding period in the previous year. Further competition is heating up in the sector with a host of new players coming in and others like Porches, Bentley, Audi, and BMW all set to venture in Indian markets. One factor that could help the companies in the marketing of their products is buying Behavior of the consumers. The Buying Behavior of the customers can be studied by knowing their perceptions about the cars in the market and about the possible entrants in the market. One such technique is by knowing and creating a personality for the brands.

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This personality sketching will help in knowing what a customer (or a potential customer) thinks about a given brand of car and what are the possible factors guiding a possible purchase. Similarly, the idea of measuring the customer satisfaction will serve the same purpose of determining the customer perception. Thus, by measuring the willingness of existing users of a car to recommend it to others will help the car manufacturers to chalk out the entire Customer Buying Behavior. The reports shall attempt to answer some of the questions regarding brand personality of selected cars in India by conducting a market research. The market research will be helpful for the new car entrant companies in India to find out the possible gaps between the customer expectations and the present market offerings. This way these companies will be able to find their share in the ever-expanding Indian market pie.

The research will track the customer satisfaction in the following two layers: Product related Parameters

Dealers related parameters

The customer satisfaction index will be calculated for the car brands taken into consideration. It will be mainly a primary research and the information will be gathered from both primary and secondary research. The study will analyze the applicability of existing research concepts, theories, and tools for evaluating consumer satisfaction.

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INTRODUCTION

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It is true fact that if you are satisfied you recommended to others. Word of mouth and customer satisfaction play a very important role in determining market perception about an automobile. It is the market perception that determines the success of a company and so it is very important for the car manufacturers to measure the willingness of existing users of a product to recommend it to others. The same is a lot of interest to customers as well for it helps them make the purchase decision. A car is one of the most significant purchases that an Indian household makes and this project addresses the most important question that perplexes car manufacturers: What makes the perfect car that influence will willfully purchase? The project highlights the factors that influence the buying decision of a consumer. The factor under consideration would be: Price Income of the consumer Features in the car Safety standard Warranty scheme Finance facility

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Is an Indian consumer ready for more? Which is the driving motive behind the effective demand of the car? How the coming of new models like swift does is going to effect the buying decision of consumer and especially the Tata 1 lakh car. In other words, from the spread of choices offered by various manufacturers under various segments, of which one the customer will finally turn the ignition on and drive. Customer satisfaction index: some of the most advance thinking in the business world recognizes that customer relationships are best treated as assets, and that methodical analysis of these relationships can provide a road map for improving them

If you cannot measure it, you cannot improve it. Lord William Thomson Kelvin (1824-1907) Clause 8.2.1 in ISO9000: 2000 states: As one of the measurements of the performance of the quality management system, the organizations shall monitor information relating to customer perception as to whether the organization has met customer requirements. The method for obtaining and using this information shall be determined The requirement has been there in the QS9000 standard clause 4.1.6 which says: Trends in customer satisfaction and key indicators of customer dissatisfaction shall be documented and supported by objective information.

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These trends shall be compared to those of competitors, or appropriate benchmarks, and reviewed by senior management. There is obviously a strong link between customer satisfaction and customer retention. Customers perception of service and quality of product will determine the success of the product or service in the market. With better understanding of customers perceptions, companies can determine the actions required to meet the customers needs. They can identify their own strengths and weaknesses, where they stand in comparison to their competitors, chart out the path future progress and improvement. Customer satisfaction measurement helps to promote an increased focus on customer outcomes and stimulate improvements in the work practices and processes used within the company. Customer expectations are the customer-defined attributes of your product or service. We cannot create satisfaction just by meeting customers requirements fully because these have to be met in any case. However falling short is certain to create dissatisfaction. Major attributes of customer satisfaction can be summarized as: Product quality Product packaging Keeping delivery commitments Price Responsiveness and ability to resolve complaints and reject reports Overall communication, accessibility and attitudes

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Values

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Benefits

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Features

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Attributes

We cannot begin to address the customer satisfaction issue we define the parameters and measures clearly. The customer satisfaction index represents the overall satisfaction level of that customer as one number, usually as a percentage

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The buying process involves the following steps:

Problem Recognition

Information search

Evaluation

Decision

Buy

Post Purchase Dissonance

Dissatisfaction = Brand Rejection

Satisfaction = Brand Acceptance

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The fact that word of mouth sales are a big deal in this industry has also helped. Industry players and market surveys reveal that 20-30 percent of sales are through word of mouth.

For the purpose of the project has undergone through Surveying the relevant consumer base through exhaustive questionnaire. Understand the elements underplaying in each segment Deducing A analytical overview through different statistical methods

Recommendation comes from satisfaction and satisfaction comes from

Product Quality

Service Quality

Relationship Quality

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OVERVIEW OF THE AUTO SEGMENTIndians have emerged as avid car enthusiasts sporting their prized possessions as status symbols and speed machines. Foreign car companies have discovered the Indian consumer as well as the R & D potential in the Indian technical fraternity and are setting up manufacturing plants right and left across the country at lower costs. The Indian automobile industry is currently experiencing an unprecedented boom in demand for all types of vehicles. This boom has been triggered primarily by two factors: (1) increase in disposable incomes and standards of living of middle class Indian families estimated to be as many as four million in number; and (2) The Indian government's liberalization measures such as relaxation of the foreign exchange and equity regulations, reduction of tariffs on imports, and banking liberalization that has fueled financing-driven purchases. Industry observers predict that passenger vehicle sales will triple in five years to about one million, and as the market grows and customer's purchasing abilities rise, there will be greater demand for higher-end models which currently constitute o