Market Consumer Perception Mahindra Thesis

Chapter-1

INTRODUCTION

It is true fact that if you are satisfied you recommend 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

thesis addresses the most important question that perplexes car manufacturers:

“What makes the perfect car and how to increase the sales of the Mahindra and

Mahindra’s passenger car ?”

The thesis 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

Re-sale value

Sturdiness and Looks

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 Honda’s Jazz 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

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methodical analysis of these relationships can provide a road map for improving

them, as somebody has said if you cannot measure it, you cannot improve it.

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. 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. Customer’s perception of service and quality of product will determine the

success of the product or service in the market. With better understanding of

customer’s perceptions, companies can determine the actions required to meet the

customer’s 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 customer’s 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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Figure-1: Major attributes of customer satisfaction

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

The buying process involves the following steps:

Values

Benefits

Features - Attributes

+ -

3

Problem Recognition

Information search

Evaluation

Post Purchase Dissonance

BuyDecision

Satisfaction = Brand Acceptance

Dissatisfaction = Brand Rejection

Figure-2

“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 knowing : How to increase passenger car sales ,it has undergone through

following:

Surveying the relevant consumer base through exhaustive questionnaire.

Understand the elements underplaying in each segment

Deducing an analytical overview through different statistical methods

Recommendation comes from satisfaction and satisfaction comes from

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Figure-3: Showing three core elements of satisfaction

OVERVIEW OF THE AUTO SEGMENT

Indians have emerged as an 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.

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 only a

tiny fraction of the market. These trends have encouraged many multinational

automakers from Japan, U.S.A., and Europe to enter the Indian market mainly

through joint ventures with Indian firms.

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India is increasingly becoming a global automotive hub both for the vehicles and

component industry. India is fast integrating itself into the world economy and open to

international automotive companies, who are increasingly investing in India. The

Indian automotive and component industry is looking to increase the quality of

production from existing levels, to develop new products and to increase exports. In

the long run India is well set to become a key market for automotive and component

manufacturers in terms of local demand and as a base for export. Additionally,

companies such as GM, Daimler Chrysler, Toyota, Delphi and MICO/Bosch are

utilizing India’s well developed IT / software capabilities and have set up R&D hubs

here for their global operations.

INDUSTRY SIZE

The domestic Indian passenger car market (including utility vehicles)

totaled900,000 units (with a CAGR of 10 per cent over the past 4 years) while the

exports were 130,000 million units (with a registered CAGR of 68 per cent over

the past 4 years) during financial year 2004

The Indian two-wheeler Industry is one of the largest in the world, and is

expected to maintain robust growth in the future

At the back of this phenomenal automotive growth is the success of the Indian

auto component industry. Presently a US$ 6.7 billion industry, it is expected to

almost treble in less than eight years time to US$ 17 billion by 2012

India offers a distinct technological and cost-competitive advantage, which global

Original Equipment Manufacturers (OEMs) and automotive suppliers are

leveraging for both manufacturing and research facilities.The passenger car

market is projected to grow at a CAGR of 12.3 per cent over the next few years.

Growth in the mid-size and premium car segments is expected to outpace the

overall market growth.

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Figure-4: Indian Automobile Industry size

Figure-5: Indian Automobile Industry Products

Automobile Industry in India is still in its infancy but growing rapidly. The

opportunities in the automobile industry in India are attracting big names with the big

purse and they are investing vigorously in infrastructure, design and development,

and marketing. Automobile industry in India is today poised for the big leap.

India is the 2nd largest two wheeler manufacturer in the world

Second largest tractor manufacturer in the world

5th largest commercial manufacturer in the world

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3rd largest car market in Asia, surpassing China in the process

Automobile industry Contributes 17% of the total indirect taxes collected by the

exchequer & is a driver of product and process technologies, and has become a

excellent manufacturing base for global players, because of its

high machine tool capabilities

Extremely capable component industry

Most of the raw material locally produced

Low cost manufacturing base

Highly skilled manpower

Special capability in supplying large volumes

Domestic and Foreign Vehicle Manufacturers:

Figure-6: Indian Automobile Manufacturers in India and Plant Locations

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Passenger Vehicles

The main domestic manufacturers of passenger vehicles are as follows:

Maruti Udyog

Tata / Telco

Mahindra / Mahindra

Hindustan Motors

Foreign competitors manufacturing locally including Hyundai, Ford, General

Motors, Honda, and Toyota.

Car demand has seen a turnaround since mid 2001 thanks to heavy discounts and

cheaper finance. A large number of new models, both locally assembled and

imported, have also revitalized the market.

In terms of volumes:

The A/B segments are where India’s strength and future lies. The A/B

segment accounts for over 65% of the total passenger vehicles produced.

Competition in this segment is stiff with Maruti the market leader with around

55% market share. New models from Telco (Indica), Hyundai (Santro) and

Fiat (Palio) however are eroding Maruti’s long standing dominance in this

segment.

The mid / luxury range is developing with the introduction of Ford (Ikon),

Hyundai (Accent/Sonata) and Skoda (Octavia), although the volumes are not

significant.

The UV segment remains sluggish with growth at just over 1%. The clear

market leader, Mahindra (51.5% market share) posted increased sales of

16% in the first 3 quarters of 2007/08. Toyota and Telco domestic UV

business remains flat.

Commercial Vehicles

The main Indian companies in the Commercial Vehicle segment are:

TATA Engineering and Locomotive Company (TELCO)

Ashok Leyland

Bajaj Tempo Ltd

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Eicher Motors Ltd

Swaraj Mazda

An international company currently manufacturing CVs in India, such as Volvo but

again volumes are not large. Other global players are active, although in partnership

with one of the domestic manufacturers E.g.:- IVECO (manufacturing their range of

trucks in association with Ashok Leyland. There has been a significant turn around in

this segment over the last 18 months with over 30% growth being seen in terms of

both production and sales.

This sector has received a huge boost with India’s massive demand from the

infrastructure sector (particularly roads), cyclical fleet replacement by fleet owners

and an upturn in the cement and steel sectors.

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Passenger Cars LCV

0.604 Mn0.083 Mn

Figure-7: Automobile Manufacturers Market Share

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Maruti (JV of Suzuki), leading the market,

Tata and M&M are the key players

a) Followed by Hyundai and Tata, together hold close to 75% of market

b) Daewoo stopped production, mainly due to financial issues

The following Table-1, explains the growth of India Car Sale during the

aforementioned period.

Passengers Vehicles (PVS)

From April-November

04-05

From April-November 05-

06

Total Market

Share (in %)

The Net Change between the period (in %)

Total number of exports in April 05-06

Maruti Udyog 2,69360 2,91,182 52.2 8.1 23,043

Hyundai Motors India Ltd.

89,075 1,07, 066 19.2 20.2 68,374

Tata Motors 95,402 24,348 16.6 -2.7 12,105

HondaSiel cars India Ltd.

23,186 24,348 4.4 5.1 31

Ford India Pvt. Ltd 15,026 10,512 1.9 -30% 9,928

Utility Vehicles

Mahindra and Mahindra Ltd.

49,897 51,540 42.7 3.3 1,878

Toyota KirloskarMotorPvt Ltd.

24,404 24,983 20.7 2.4 0

Tata Motors Ltd 19,967 21,610 17.9 8.2 905

General Motors India Pvt Ltd.

7,008 12,027 10 71.6 0

Maruti Udyog Ltd . 2682 2472 2 -7.8 54

Hyundai Motor India Ltd.

255 1,042 0.9 308.2 0

Multi-Purpose Vehicles

Maruti Udyog Ltd. 42,388 43,858 100 3.5 731

Mahindra & Mahindra Ltd

13 0 0 0 0

Medium and Heavy Commercial Vehicles

Tata Motors 79,614 73,538 61.1 -7.6 4,807

Ashok Leyland 27,577 33,406 27.7 21.1 2825

Eicher Motors 8,043 8,700 7.2 8.2 318

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Swaraj Mazda 3,573 4,080 3.4 14.2 115

Light Commercial Vehicles

Passenger Carriers

Tata Motors 5,835 6,811 46.8 16.7 1,096

Mahindra and Mahindra

2,305 1,960 13.5 -15 115

Swaraj Mazda 1,178 1,315 9 11.6 12

Force motors Ltd. 2,059 2,877 19.8 39.7 59

Goods Carriers

Tata Motors 30,955 44,380 58.9 43.4 12,461

Mahindra and Mahindra

23,563 23,731 31.5 0.7 1,600

Swaraj Mazda 2,671 2,299 3 -13.9 204

Eicher Motors 3,019 2,954 3.9 -2.1 451

Figure-8: Domestic Sale of Cars

Chapter-2

COMPANY PROFILE

M&M AUTOMOBILELTD

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Mahindra & Mahindra Limited (M&M) is a major automaker in India. It is the

flagship company of the Mahindra Group. The company was set up in 1945 as

Mahindra & Mohammed .It traded steel with suppliers in England and the United

States. M&M began by assembling complete knock down (CKD) Jeeps in 1949.It

expanded to indigenous manufacture of Jeep vehicles with a high level of local

content under license from Kaiser Jeep and later American Motors (AMC).

M&M soon branched out into manufacturing agricultural tractors and light commercial

vehicles (LCVs). It later expanded its operations to secure a significant presence in

many more important sectors. The company has now transformed itself into a group

that caters to the Indian and overseas markets with a presence in vehicles, farm

equipment, information technology, trade and finance related services, as well as

infrastructure development.

By 2005, M&M had become the largest producer of SUVs in India. The company has

recently started a separate sector, the Mahindra Systems and Automotive

Technologies (MSAT), to focus on developing components and offering engineering

services

In this thesis I have tried to describe how M&M has modified the structure of the

organization in order to implement a successful supply chain. The different processes

and initiatives taken across the supply chain of M&M have been described below.

M&M has obtained operational efficiency by keeping a constant watchful eye on the

developments on the supply chain. The endeavor of the company to reduce its costs

in order to increase the profit margins has been described.

M&M is the leader for Utility Vehicles in India today. The company has been in

existence since 1994. The company also has presence in the Light Commercial

Vehicle market. The company’s commercial three wheeler “Champion” does brisk

sales in the country. The company has six plants across the country. These plants

are in the following cities

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Mumbai

Nasik

Igatpuri

Haridwar

Zahirabad

Chennai

The plant at Mumbai specializes in the manufacturing of pick-up trucks. Kandivali,

a suburb of Mumbai has a Mahindra plant devoted to the production of MAXX

pick-ups and soft tops .This plant enjoys the great infrastructure that the city of

Mumbai offers. It has also been recommended for the TPM Excellence Award

apart from ISO/TS 16949 certification. Here forth I will put light into the various

aspects of material management with regards to M&M plant kandivli.

SCOPE OF MATERIAL MANAGEMENT IN M&M

The flow that has been shown below is the “flow of information”. The “flow of

materials” will be in a direction that is opposite to that of the flow of information.

Hence the flow of materials will start with the suppliers and the final product, after

assembling, will reach the dealers.

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Figure-9: Information of Flow of supply chain

M&M uses SAP to keep track of the events that happen across the supply chain.

According to the design it is imperative for every dealer to record the sales that have

been achieved on a particular day on to the system. M&M hence is taking a major

initiative to make all of its dealers SAP enabled. For the dealers who do not have the

access to SAP it is mandatory to report the sales of the previous day to the marketing

office every morning. In such a manner all the regional offices get the figures from

the dealers everyday. All the regional offices will then send these figures to the

Marketing Head Office at Worli. Here firstly, the dealers stocks are replenished.

Proper delivery of the products to every corner of the country where demand exists

has to be seen by the marketing department. Marketing also has to indulge in

“demand forecasting” so that the production planning can be carried out effectively.

This data is available for a number of years. The marketing department has to track

all the data over the years, considering sales achieved in the past for the particular

month for which forecasting is being done. Then by tracking the data and then

incrementing the sales which are expected considering the growth rate the marketing

department comes to a figure. This is the figure that is forecasted and passed along.

Then based on the demand and the expected growth the expected sales are

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calculated. Also based on the figure obtained from the marketing department the

production planning and the further processes are carried out. This is one of the most

important functions of the marketing department. From the supply chain point of view

this is a very essential and an indispensable function. It is the marketing department

that will give the figures for production to the production department. Why is

Demand Forecasting an Important Element in the Supply Chain ?

Figure-10: Showing the demand forecasting

Every organization wants to maximize its revenue and minimize cost to achieve

optimum profitability. Revenue can be increased by increasing the per unit price of

the vehicle and selling at the existing quantity or by selling more vehicles at the same

price.

However if the production of the vehicles happens at a rate that is faster than the rate

of sales then the finished good inventory will keep on increasing and the money

invested in the production of the vehicles will not get its returns in the form of sales. If

the rate of production of the vehicles happens at a rate that is lower than the demand

in the market then it might result in the loss of a sale as the customer might buy a

competitors product as the product that he wants is not available. Also apart from the

customer himself the distribution network of the company would start losing faith in

the company and this would lead to dilution of the companies brand image internally

and externally too (due to bad publicity by the customers lost).

Also an important fact to be seen here is that the manufacturing costs of a vehicle

are very high. So in turn the inventory holding costs will also go up considerably

However automobiles are not a low involvement product. A person will not buy an

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automobile everyday For companies who have products which have low cost of

production it makes sense for them to stock their products in to the market as the

inventory holding cost per unit would be low.

PRODUCTION PLANNING AND CONTROL

The marketing department at M&M passes the expected sales figure to the Central

Production and Planning Control (CPPC). The function of the CPPC is to take the

projected figure from marketing and then break it up in to aggregates.

Figure-11: Central Production and Planning Control

CPPC: The CPPC will take the individual figures for each of the vehicles and break

them up in to numbers for various parts required for production. These break ups are

released by the CPPC on a monthly basis. The monthly plans are released to the

departmental PPC’s.

PPC: The departmental PPC’s play a very vital role as they are the one’s who will

carry out the further break up and pass it along to the procurement team. Thus the

figure received from the CPPC is then further broken up by the PPC according to the

requirement of the individual departments. The CPPC will always release the plans

according to the monthly requirement while the PPC has to break them down and

proceed with the weekly or the fortnightly requirements for the parts. The PPC’s will

then inform the procurement team as well as the logistics team about the scheduled

quantities.

The role of the departmental PPC is very important as he has to interact with

CPPC

Procurement team

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Production (Shop floor)

The role of the PPC is to inform the CPPC about the product availability and the

available of production capacity. It will also communicate those particular

components which require further production. Based on this the numbers given by

the CPPC and hence the exact numbers required for production will alter. The PPC

will then take inputs from the CPPC and release weekly or fortnightly plans. The PPC

releases the plans based on the responsiveness or efficiency required from the

particular vehicles.

PROCUREMENT TEAM: Once the figures and the production plans have been

made the details then have to be passed on to the procurement team. They then

have to ensure the smooth procuring of materials and also the efficient delivery so

that the inventory levels are maintained.

PRODUCTION SHOP FLOOR: The production department plans production based

on the figure given by the marketing team.

Actual production of the vehicles is handled by production. The production

department has to consider a lot of factors when the production planning is done. At

every stage the costs are minimized by introducing various methods. The production

department has to regularly track the inventory levels, reduce the defects, increase

productivity and also ensure proper output of vehicles according to the demand in the

market.

SCM of M&M Kandivli

The four drivers of SCM in Kandivali are:

1. Procurement cell

2. logistics cell

3. Material disposal cell

4. PPC

Thus SCM is divided on basis of functions i.e:

1. Procurement cell

The departmental PPCs break up the quantity depending upon whether it is required

for a week or a fortnight and communicate it to the procurement team. The PPC will

give in a firm schedule and a tentative one. The firm schedule will not be altered in

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any case and the tentative schedule might change a little. This is done in order to

give the suppliers the information about what stock might be needed at which

particular point in time.

At this point the vendor response cycles will start. The procurement team will

continuously communicate with the suppliers and keep the flow of materials smooth.

Any breakdowns or irregularities in the material flow will be managed by the

procurement team.

It is also the responsibility of the procurement team to set inventory targets for each

type of part. Daily the reports are tracked and the inventory levels monitored so that

production time is not lost due to the non availability of materials.

The procurement team will also communicate with the suppliers on behalf of the

individual departments so that only they interact with the suppliers. The

communication channel of the procurement team is shown in the diagram. The

procurement team is always on the lookout for new suppliers and also the optimum

size to be given to each supplier to maintain a proper balance of inventory supplier

scheduling and supplier capacity.

A few years ago each of the production units at M&M was a business unit and hence

the procurement of materials would be handled by each department individually. This

meant that if a supplier was common to two or more units then there would be

multiple people interacting with him for the material. Also it meant that the costs

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would rise up as each unit would have their own logistics and ordering costs. The

inventory management was also done by the individual units.

The structure has changed and today the SCM team has a representative from each

of the production unit. One person will keep track of parts of similar type. He will

communicate with all the suppliers who provide that part. There is one person who

coordinates between all the buyers (employees) and he is the one responsible of

keeping track of the inventory and generating reports. Inventories are being greatly

reduced in M&M and this has ensured profitability by reducing the inventory carrying

costs.

2. Logistics

The logistics for M&M is handled by a dedicated company called “Mahindra

Logistics”. The function of the logistics department is to negotiate terms with the

contractors and co-ordinate with the transporters as to where the materials are and

when will they arrive at the factory premises.

Allocating the vehicles to particular parts and products has to be done by the logistics

department.

Free delivery

In a free delivery format the supplier will bear the transportation and the logistics

costs. The company does not have to pay for the delivery from its own pockets and

hence the onus will be on the supplier to reduce his costs.

Ex-works

Here the costs of transportation of the goods are taken up by the company. The

company will arrange for the transporter and keep track of the materials in transit.

The logistics was earlier looked upon by the Transport and Solutions Group (TSG).

This group has been made in to a separate company called Mahindra Logistics.

Milk Runs

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Milk run deliveries are deliveries that bring products from multiple originating

locations to a single receiving location. Scheduling milk run deliveries is a much more

complex task than scheduling direct deliveries. Decisions must be made about

delivery quantities of different products, about the frequency of deliveries, and most

importantly about the routing and sequencing of pickups and deliveries.

Outbound logistics

Outbound logistics deal with the finished vehicles reaching the dealers. There are

three ways by which a vehicle can reach the dealer

By road (Convoy)

By car carriers

By rail

3. Material disposal cell

Currently responsible for scrap contract finalization for 3 plants (Kandivli,Nashik and

Igatpuri).

Compared to last year there was 42% increase in revenue generation of scrap (773

lacs for the period of Apr-06 to Dec-06 against 543 lacs in the same period last year)

4. PPC – it has been explained above in the planning stage.

Vendor development

Vendors are considered the best intangible assets of any manufacturing

organization. Hence both new and established vendors are subjected to a crucial

evaluation to review their plant capacity, financial conditions, performance, etc

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Mahindra and Mahindra is an automobile industry manufacturing utility vehicles

requiring 4500 parts to be assembled. These parts are procured from a large pool of

suppliers scattered all over the country. So it is needless to say about the importance

of vendor in this organization.

Vendor selection

Just as in any manufacturing organization vendor development starts from vendor

selection. As Mahindra and Mahindra being a 62 year old company, it has a large

supplier base. This supplier base has been gathered over these years by the

purchase personnel identifying the potential supply sources.

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Key supplier

In M & M every raw material/part/component that they purchase has two key

suppliers. The supplier offering the best quality at lowest price and adhering to the

delivery schedules is selected as the key suppliers. The first key supplier supplies

approximately 60% of the material requirements and the other key supplier provides

for the remaining 40% of the materials. They have two key suppliers because 1

supplier does not have the production capacity to meet the requirements of the

company. As also in case of shortfalls, emergency it is essential to have two key

suppliers instead of one.

Vendor evaluation

It is essential to evaluate the vendors on various grounds as the qualityof the finished

product-(in this case vehicles) will finally depend on the quality of raw material.

Vendors are evaluated on the following basis:

Delivery schedules- in case of Mahindra and Mahindra they maintain inventory

according to the rolling plans i.e weekly plans. So vendors need to supply materials

at fixedand predetermined schedules. So vendors are evaluated on the basis of how

efficient they are in adhering to the delivery schedules.

Quality – in an automobile industry if the quality of the raw materials like the grade of

sheet-metals, fabric,plastic, etc is not as prescribedthe final producti.e. the quality of

the vehicle produced will be hampered. So assuring that the quality of raw materials

is as per the requirement it is absolutely essential to evaluate vendors on this ground.

One way what M&M follows is a six sigma quality check analysis on the bought out

parts and evaluate the vendor based on defects inparts per million.

Lead time- According to the classification of raw materials different categories

require different lead times. For example a product classified under ‘AX’ category

should have the least lead time and a product under ‘BX’ category would have a

relatively higher lead time. The vendors have to comply with the specified lead times

given to them by M&M. So a vendor is evaluated on the basis of the lowest lead time

offered and how efficiently does he adhere to the lead time agreed upon by both the

parties.

Flexibility- The vendor is evaluated on the basis of his flexibility to adjust with any

changes in the quantity, delivery schedule and or product/service design.

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Vendor rating

In M&M they do not have a vendor rating method as such provided that they have

such a large supplier base it is difficult to rate them and they believe it to be an added

cost to their balance sheet.

Vendor motivation

M& M tire to motivates it’s vendors by arranging for vendor meets wherein an official

from M&M visits the vendors factory and appreciates them if satisfactory and tries to

resolve issues with vendors if any. It also arranges for rewards and recognition

wherein the top 10 suppliers are awarded. As also shares are given to the suppliers

as a token of appreciation. This helps a lot in developing good supplier-buyer

relationship.

INVENTORY MANAGEMENT

Managing inventories is absolutely essential for any company. Improper ordering can

eat in to the profits by increasing the inventory carrying costs. But if there are not

sufficient inventories it might result in to the loss of production for a firm. Hence

inventory management is given so much importance.

Figure-12: Inventory management

Each upstream element in the supply chain not only aggregates the inflated demand

changes of all the elements fed by it but also overreacts to these demand changes

and adds its own safety margins to take care of perceived fluctuations in future

demand from downstream elements.

This helps the company in maintaining the right levels of inventory and hence

prevents excessive investment of money in the raw materials. Apart from reducing

the carrying costs this also means that the company has more money to invest and

more liquid cash at their disposal.

Total Productive Management:

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A few years ago M&M was experiencing a lot of production loss due to non-

availability of materials. While some of the material was not available other materials

were being excessively stocked. This resulted in very high inventories of materials. It

was also observed that the costs of buying the materials were very high and that in

most of the modules the company was overstaffed.

Hence it was decided by the company to implement TPM. TPM was introduced all

around the organization and all the employees were given guidelines which they had

to follow in order for the implementation of TPM to be successful.

In the initial phases the TPM activities were meant to focus on the following activities

Inventory reduction: Inventories were reduced by continuously measuring,

monitoring and reducing inventory levels. Techniques like Just In Time (JIT) were

introduced to maintain optimum levels of inventory and also to reduce the inventory

costs dramatically.

The following two methods were used in order to manage inventory levels better

Two Bin system

Kanban system

1) Material Cost Reduction:

Figure-13: Showing the cost management

There are two types of costs associated with materials these are

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Cost of materials (cost of ordering): Costs of materials include basic price,

packing costs, taxes and freight.

Cost on materials (cost of carrying): Costs on materials include Procurement

costs, inventory costs and material handling costs

1. Manpower reduction

Manpower reduction was achieved through job clubbing, job elimination and layout

changes

This is a way to ease out excess people from the organization. Jobs can be modified

so that one person can take more responsibilities. Unnecessary processes can be

eliminated so that no employees are employed for carrying those out.

M&M has done precisely that when they stopped inspecting the quality of the

material coming in by putting more importance on the suppliers by making him

accountable for his products.

Economic Order Quantity:

EOQ for them is on full truck load basis. They see to it that no transportation vehicle

comes half empty and it is utilized to its full capacity. But while determining the EOQ

the inventory levels in the stores are also considered.

Material Requirement/Resource Planning (MRP-1):

It is a computer based information system designed in M&M to handle ordering and

scheduling of dependent demand inventories. Raw materials, components, parts,

tools required for the production of one particular part of the vehicle say engine or

axle is termed as dependent demand inventories. A production plan for a month of

finished products in the form of master production schedule is translated into

requirements of components parts and raw materials working backward from the due

date using lead times and other information hence, requirements of end items

generate the requirements for lower level components which are broken down by

weeks so that ordering production and assembly can be scheduled accordingly.

Basis and input on which MRP runs:

Schedules: M&M's area offices update the demand plan on a weekly basis. SAP-

SCM can take into account regional demand variation, using its optimizer capabilities

to decide which plants will make what and synchronizing the procurement schedules.

M&M runs supply planning capability based on the changing demand pattern, with

27

results transmitted to MRP and posted to the private vendor Web sites. This way the

suppliers can keep up-to-date on likely plant consumption. Vendors don't supply

based on this information – the rolling plan only alerts them to what they should be

prepared for. All material flow from the suppliers is pull based, triggered by actual

consumption at the plant end.

Physical stock- it is the stock that is being seen on the system and which should

tally with the physical stock in the stores of all the unused components, parts, tools,

etc.

Bill of materials- for the production of any one part of the vehicle (engine, wheel,

axle) the number of raw materials used for its production will be reduced

automatically from the systems according to the number of units produced. The bill of

materials is the number of raw materials required for the production of 1 part of the

vehicle. If for example manufacturing an engine requires 450 parts but bill of

materials accounts for only 440 parts then the system stock and the actual stock

would not tally leading to shortfall in inventory.

Safety stock- it shows the number of raw materials which are more than the

requirement and available in case of emergency.

STORES MANAGEMENT

The store in M&M is decentralized with each production unit having their own stores.

All the stores in each of the units are next to the road so that loading and unloading

becomes easier. Also the materials can be protected from damage in this case.All

the bought out parts and work in progress inventories are kept in the stores.

The stores are divided into 3 sections depending upon its functions-

1. Receiving stores: the receiving stores is where the goods are received from

the vendors by trucks. The truck unload the contents at this area which is also

called as ‘dock’. The trucks directly unload the contents into palates.

2. Main stores: main stores is where the raw materials are stored. The COMB

type layout is followed in the main stores.

3. Finished goods stores: finishedgoods stored in this case are the processed

parts which are manufactured in the respective production units. They are

then taken to the main assembly line for assembly.

Features of stores:

28

Stores are properly ventilated with tube lights and fans.

They use an instrument that measures luminosity in the evening. Accordingly

more lights are provided.

The materials are kept in racks.

Stock verification

Stock verification is done once a year on 31st January. On this day the production is

stalled, the entire SAP system is closed, material procurement and dispatch is halted.

All the employees from all the departments then engage themselves in stock

verification. Thus they follow fixed or periodic inventory method.

Stock valuation

They follow actual price method of stock valuation for raw materials wherein oldest

stock is issued first. In this method materials are issued at actual cost and are valued

also at the same cost by keeping an account of the receipt of all the raw materials.

Material handling

Material Handling Equipment in M&M traditionally consisted of trolleys, conveyors,

forklifts, overhead travelling cranes etc. These were primarily devices of

Mechanisation; a lot of manual intervention was involved. These had limitations like

low speed, handling problems like scratches, chipping, breaking, difficulty to monitor

material flow etc.

However, they were adequate in mass production with limited variety or low volume

production. Customers were tolerant of defects like scratches, dents etc. With

transformation of manufacturing systems to be lean, agile and highly automated,

things are changing. Increased competition increases variety of components (for

product customisation ), reduces lot size, varies product mix continuously ( pull type

manufacturing ).

Since the logistics now become complex, there is a tendency to INTEGRATE

material handling systems so that they can communicate with each other - as well as

with processing machines, inspection devices, assembly stations.

In M& M they have these aisles i.e roads constructed inside the plant for identification

of safe and danger zones

Red aisle: it is put for personnel/goods movement

29

Green aisle:it is put where machines/production/assembly takes place

Yellow: it is usually used as borders to distinguish clearly between red and green

aisles

Features of material handling

In M&M plant a mezzanine floor has been put up all over the stores and it is

fire resistant. It also helps in optimum usage of the floor space.

The concept of unit load is being depicted by keeping boxes of same

materials under palates and them systematically arranging them one above

the other. Thus the number of items or bulk material is so arranged that mass

can be picked up and moved as a single object. It helps in quick and easy

movement of a lot of items than individual items.

For glass equipments they a separate storage space.

According to them material handling equipment should be such that it helps in

reducing the manufacturing cycle time and minimum fatigue is required.

Moreover they have a stores department in each production unit which helps

to reduce the material handling costs.

Lastly for all the material handling equipments they give proper training to

their personnel to avoid any mishaps and to carry out safe operations.

30

MAHINDRA XYLO

Making the Mahindra Xylo meant challenging the limitations of every car before it. It

meant determining the needs of our consumers. And pioneering technologies to meet

those needs. The Mahindra Xylo was meant to be built around you, out of your

needs.

And it took 160 engineers to do just that. Engineers that were handpicked from

across the country. Each of them regarded as an expert in their own field of

automobile development. These engineers spent time with customers across the

country, observing their interaction with vehicles. They identified need gaps and

invented solutions to fill in these gaps. And the result was India's first car to be built

inside out. Every need was catered to, every requirement met. And once the interiors

were done, the exteriors began.

A lot of research and development has gone into bringing the Mahindra Xylo from the

drawing board to 'on road'. And every manufacturing process has been optimised to

handle this special car's special requirements. Like the body assembly procedures

that are fully automated to ensure incredible levels of accuracy. So you can be sure

that extra thought and effort have gone into making the Mahindra Xylo perfect in

every way

E2

Exterior

Ski rack – (N/A)

Body coloured electric Outside rear view mirrors –BLACK (stalk)

Fog lamps – (N/A)

Rear fog lamps – (N/A)

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http://www.amitbhawani.com/auto/Images/M/Mahindra-Xylo-Car-Photos3.jpg

http://www.amitbhawani.com/auto/Images/M/Mahindra-Xylo-Car-Photos4.jpg

Wheel Cover – (silver painted)

Side body cladding – (N/A)

Coloured Bumpers– (N/A)

Coloured Grill – (N/A)

Coloured Handles & outside rear view mirrors & footstep end caps –

(N/A)

Rear wash & wipe (rear wiper) – (N/A)

Interior

Digital Clock

Digital Drive Assist System – (N/A)

Roof console for spectacle holder – (N/A)

Mobile charging points (front on IP)

Courtesy lamps (1+1)

Rear glass embedded antenna – (N/A)

Seat & Interior Trims

Theatre Style Seating (8)

Flat bed front seats

Armrest for driver and co-driver – (N/A)

3 position lumbar support for front & middle captain seats – (N/A)

Height adjustable driver seat

Foldable flight trays – (N/A)

Foldable arm rest in the middle and last seat with utility space – (N/A)

Seat material made of PVC

8 front facing seats

Safety

Tubeless tyres

intellipark reverse assist – (N/A)

32

Engine immobilizer (Transponder based)

Comfort & Convenience

HVAC

Surround cool dual AC’s – (N/A)

Floor console (half)

Power steering

Puddle lamp on front & rear doors – (N/A)

Tilt steering

Keyless entry – (N/A)

Central locking

Illumination ring

Power window

Power window express up/down (driver side) with anti-pinch – (N/A)

Two DIN audio system – (N/A)

Rear defogger – (N/A)

Electric remote fuel lid opener

E4

Exterior

Ski rack – (N/A)

Body coloured electric Outside rear view mirrors –BLACK (stalk)

Fog lamps – (N/A)

Rear fog lamps – (N/A)

Wheel Cover - Cap

Side body cladding

Coloured Bumpers– (N/A)

Coloured Grill – (N/A)

Coloured Handles & outside rear view mirrors & footstep end caps – (N/A)

33

Rear wash & wipe (rear wiper)

Interior

Digital Clock

Digital Drive Assist System – (N/A)

Roof console for spectacle holder

Mobile charging points (front on IP)

Courtesy lamps (1+1)

Rear glass embedded antenna – (N/A)


Theatre Style Seating (7,8)


Armrest for driver and co-driver – (N/A)

3 position lumbar support for front & middle captain seats – (N/A)



Foldable arm rest in the middle and last seat with utility space – (N/A)

Seat material made of fabric with PVC insert

8 front facing, 7seater (captain seats)

Safety

Tubeless tyres

intellipark reverse assist – (N/A)



HVAC

Surround cool dual AC’s

Floor console (half)

Power steering

34

Puddle lamp on front & rear doors – (N/A)

Tilt steering

Keyless entry

Central locking

Illumination ring

Power window


Two DIN audio system – (N/A)

Rear defogger – (N/A)


E6

Exterior

Ski rack

Body coloured electric Outside rear view mirrors – Electric (Body Coloured)

Fog lamps

Rear fog lamps

Wheel Cover - Cap

Side body cladding – Body Coloured (Steel insert)

Coloured Bumpers

Coloured Grill

Coloured Handles & outside rear view mirrors & footstep end caps


Interior

Digital Clock – (N/A)

Digital Drive Assist System (limited info)


Mobile charging points (front on IP and middle on centre console)

35

Courtesy lamps (1+1+2)

Rear glass embedded antenna


Theatre Style Seating (7)


Armrest for driver and co-driver

3 position lumbar support for front & middle captain seats



Foldable arm rest in the middle and last seat with utility space

Seat material made of fabric with PVC insert

7seater (captain seats)

Safety

Tubeless tyres

intellipark reverse assist



HVAC


Floor console

Power steering

Puddle lamp on front & rear doors

Tilt steering

Keyless entry

Central locking

Illumination ring

Power window

36


Two DIN audio system

Rear defogger


E8

Exterior

Ski rack – (N/A)

Body coloured electric Outside rear view mirrors – Electric (Body Coloured)

Fog lamps

Rear fog lamps

Alloy wheels

Side body cladding – Body Coloured (Steel insert)

Coloured Bumpers

Coloured Grill

Coloured Handles & outside rear view mirrors & footstep end caps


Interior

Digital Clock – (N/A)

Digital Drive Assist System


Mobile charging points (front on IP and middle on centre console)

Courtesy lamps (1+1+2)

Rear glass embedded antenna


Theatre Style Seating (7,8)


Armrest for driver and co-driver

37

3 position lumbar support for front & middle captain seats


Foldable flight trays

Foldable arm rest in the middle and last seat with utility space

Seat material made of fabric

8 front facing, 7seater (captain seats)

Safety

Tubeless tyres

intellipark reverse assist


ABS (Anti-lock Braking System)


HVAC


Floor console

Power steering

Puddle lamp on front & rear doors

Tilt steering

Keyless entry

Central locking

Illumination ring

Power window

Power window express up/down (driver side) with anti-pinch

Two DIN audio system

Rear defogger


What is that '1 big' design philosophy which was adopted for Xylo?

38

Driven by our Mantra of Customer Centricity; Xylo has been Co-created with

Customers. Understanding & fulfilling the latent needs of our target customers has

been the development plank of Xylo. The Project team members have at every stage

of the Project interacted with Customers understanding the Value benefit for

everything which has gone in the making of the Xylo. The whole approach of

designing the vehicle basis an "Inside - Out" philosophy signifies that the Xylo has

been crafted around the need of our Customers for a Luxurious, comfortable Car

which makes a Style statement which the new age Customer seeks to make. We

have followed Global Product development practices like - "QFD" in which Project

team members closely interact with Customers backed by a lot of research to

understand the un-stated needs of the customers and have subjected all elements

thru a "ReFinE" process which helps deliver an emotional connect with the

Customer.

Why is the Product not being called Ingenio?

Ingenio was never to be the Brand name; it was coined as a Project name and was

inspired by one of our Customer Centric initiative called "Ingenious Drive" which was

at full stream when this Project was announced. Though in case of Scorpio we did

continue with the Project name as the Brand name as it made terrific sense in

continuing with the Project name given the Product values & positioning. In this case

we believe that Xylo has perfect fit with what values the Product would offer to its

Customers.

What does the new Brand name mean & its significance?

Xylo is trendy & contemporary. It has multiple connotations of a Planet, of Space

travel, of High Fashion, of Technology & of Melodious sound.

What all engines are expected to be offered on Xylo?

Mahindra Xylo would be powered by m-Eagle CRDe engine, an engine from NEF

CRDe family. This engine has been fine tuned for better drivability and updated with

other technological advancements like Hydraulic Lash adjuster and Auto tensioner.

What level of testing & validation has been carried on the Xylo?

For Xylo we did a lot of upfront "Virtual Validation" with over 1500+ CAE simulations

for "First Time Right Design & Development". All the lessons learnt from our earlier

Projects were also incorporated in the making of the Xylo. This coupled with having

World - Class Vendor partners on board early in the Project has helped us develop

39

the Product in a true Global sense. Apart from Virtual Validation we also have tested

the vehicles for "Real World Usage Profile" across the world from extensive trials

throughout India to South Africa, Germany and many other countries to expose the

vehicle to extreme conditions. Over 100 prototype vehicles have covered nearly a

million kms of stringent testing & validation.

Has Xylo been designed for the Global markets and would it be launched

across the World?

Xylo has been Co-created with Customers from all the Target countries. Project team

members have traveled and conducted over 1100+ customer interactions. Spending

a "Day in the Life" of the Customers to understand and deliver the latent needs of the

customers. This coupled with Global development practices like QFD supplemented

by a ReFinE process have helped us create a true Global vehicle. We are currently

evaluating which all markets would we be launching the Xylo in. In overseas markets

where we already have a presence, Xylo would definitely help us consolidate our

position.

How many variants are expected?

Xylo is being launched in 4 variants. E2, E4, E6 and E8. The prefix E is drawn from

the Engine name m-Eagle.

40

BRAND PERSONALITY

A brand is “a set of expectation and association evoked from a company or product.

A brand is how your key constituents- customers, employees, shareholders etc.

experience what you do.” Some brands are of such great importance to people, that

we speak of them as a part of one’s life and identity, being used to express one.

Some would say that these brands have their own personality, the brand personality,

which can be defined as “the set of human characteristics associated with a given

brand”. Thus, it includes such characteristics as gender, age and socioeconomic

class, as well as such classic human personality is both distinctive and enduring.

Based on the premise that brand can have the personalities in much the same way

as humans, brand personality describe brands in terms of human characteristics.

Brand personality is seen as valuable factor in increasing brand engagement and

brand attachment, in much the same way as people relate and bid to other people.

Much of the work in the area of brand personality is based on translated theories of

human personality and using similar measures of personality attributes and factors.

Brand personality refers to the set of human characteristics we associated with the

brand. A common way of determining this is to reply on the metaphor: “If the brand

was a person, what would he/she be like?” we then list and group the traits to

describe the brand as, for example: caring, approachable and trustworthy. However,

there is a lot more we can do.

Because many people interact with brands as though they were other people, it is

important to understand what a brand personality consists of, and how its

characteristics can be used to affect the relationship between the brand and its user.

Knowing and understanding the brand personality gives a good insight into this

relationship, and into peoples’ attitudes towards the brand, and is also as important

guide to communicating the brand.

VALUES AND CHARACTERISTICSS OF BRAND PERSONALITY

People’s personalities are determined largely through the value and beliefs they

have, and other personality characteristics they develop. An example of value or

belief is honesty. Many people believe in being honest in everything they do and say.

An example of characteristic is confidence. This is not a belief, but more of a

behavior. There are, of course, many value/beliefs and characteristic that a person

may have, but there are some that are particularly likeable. It is these likeable values

41

and characteristics that people are inevitably attracted. Examples of these include

dependability, trustworthiness, honesty, reliability, friendliness, caring, and fun-loving.

There are about two hundred words that describe personality characteristics, and these

can be used for putting personality into brands. To illustrate how people think in

personality terms when making judgments about brands, here are the results of

consumer research into how people feel about tow companies. When asked question:

“if these companies are people, how would you describe them?” their replies were:

Table-2: Replies of the company as people

Company A Company B

Sophisticated Easy going

Arrogant Modest

Efficient Helpful

Self- centered Caring

Distant Approachable

Disinterested Interested

These two companies are actually competitors in a service industry. If you were

asked of these two companies you would like to be your fiends, you would probably

choose company B, as did 95% of other respondents. It is not surprising that the

service level of company B can be better experience for customers than that of

company A. it is also easy to conclude that if customers consistently experience

these differences between the two companies, then the brand image of company B

will be much better than company A.

A further point of interest arising out of this research is that people tend to prefer

brands that fit their self-concept. Everyone has views about themselves and how they

would like to be seen by others. And they tend to like personalities that are similar to

theirs, or to those whom they admire. Thus, creating brands with personalities similar

to those of a certain group of consumers will be an effective strategy. The closer the

42

brand personality is to the consumer personality (or one which they admire or aspire

to), the greater will be the willingness to buy the brand and deeper the brand loyalty.

The Creation of Brand Personality

Brand personality traits are formed and influenced by any direct or indirect contact

that the consumer has with a brand. A brand, unlike a person, cannot think, feel or

act. A brand has no objective existence at all; it is simply a collection of perception on

the mind of the consumer. Consumers accept the marketing actions to humanize

brands. One explanation fort this can be found in the theories of animism, which

suggest that there exists need by people to anthropomorphize objects in order to

facilitate interaction with the nonmaterial world. Anthropomorphize occurs when

human qualities are attributed to non human objects, e.g. brands. Consumers easily

assign personality quality to inanimate objects like brands in thinking about the

brands as if they are human characters.

In a direct way, personality traits are associated with a brand by the people

associated to that brand. One direct way to form and influence brand personality is

user imaginary. User imaginary is defined as the set of human characteristics

associated with the typical or stereotype user of the brand. Associations with the

company employees or CEO and the brand’s product endorsers are also direct ways

by which brand personality traits are formed and influenced. The personality traits

that of the people associated with a brand are transferred directly to the brand. The

theories of animism describe another process mechanism that directly explains the

specific ways in which the vitality of the brand can be realized (Fournier, 2004).

Spokespersons that are used in advertising can have personalities that fit those of

the brand they advertise. Over time, the personalities of the spokesperson are

transmitted to the brand. The brand-person associations can also have a more

personal nature. Brands can be associated with person who use or used that

particular brand, for example a close friend or a family member. Also, brands

received as gifts can also be associated with the person from whom the gift was

received. These person associations serve to animate the brand as a vital in the

minds of the consumers. Obviously, this aspect is much less under the control of the

marketers.

Indirectly, the brand personality is created by all the elements of the marketing mix.

Betra, Lehman and Singh suggest that the personality of a brand is created over

time, by the entire marketing mix of the brand - “its price (high or low, odd or even),

43

retail store location (imaginary associations), product formulation (ingredients,

benefits), and product form (solid/liquid. Etc.), packaging details (color, size, material,

shape), symbol; used an all phases of the brand communication, sales promotion,

and media advertising”.Another form of animism explains how brand personality is

created in a more indirect way. This form of animism involves complete

anthropomorphization of the brand object itself. Human qualities of emotionality and

thought are transferred to the brand. This is achieved with the help of the marketing

actions, especially advertising. For example, the brand character of M&M in the M&M

commercials has the capacity to laugh and joke.

One of the advantage of the brand personality is that based on their distinctive

personalities, consumers are able to differentiate between brands. Another

advantage is that the consumer can interpret the brand’s image in such a way that it

is personally more meaningful. Brand personality encourages more active processing

on the part of the consumer. Thus, the consumer put more efforts in creating and

using the brand personality. A further advantage of brand personality is that life is

given to a brand. By vitalizing a brand, another perspective of brand personality can

be examined, namely the role of a brand as relationship partner in a consumer-brand

relationship. Next we will concentrate on these consumer-brand relationships.

Whether the brand is a product or a company, the company has to decide what

personality traits the brand is to have. There are various ways of creating brand

personality. One way is to match the brand personality as closely as possible to that

of consumers or to the personality that they like. The process will be

Define the target audience

Find out what they need, want and like

Build a consumer personality profile

Create the product personality to match that profile

This type of approach is favored by companies such as Levi Strauss, who research

their target audience fastidiously. For Levis the results is a master brand personality

that is:

Original

Masculine

Sexy

44

Youthful

Rebellious

Individual

Free

American

A related byproduct brand personality (for a specific customer group) such as Levi’s

501 jeans is:

Romantic

Sexually attractive

Rebellious physically prowess

Resourceful

Independent

Likes being admired

Both profile appeal mostly to the emotional side of the people’s minds- to their

feelings and sensory function. This profiling approach aims to reinforce the self-

concept of the consumers and their aspirations. The approach is ideal for brands that

adopt a market-niche strategy, and can be extremely successful if a market segment

has a degree of global homogeneity, as is the case with Levis.

Non product related brand personalities drivers

User imaginary – user imaginary can be based on either typical users

(people you see using the brand) or idealized users (as portrayed in

advertising and else were). User imaginary can be powerful driver of brand

personality, in part because the user is already a person and thus the

difficulty of conceptualizing the brand personality is reduced. For example

Charlie has a feminine, strongly independent brand personality driven by it

user imaginary. The upscale personality of Mercedes and the sexy,

sophisticated personality of Calvin Klein are similarly influenced by user

imaginary.

Sponsorship – activities such as events sponsored by the brand will

influence its personality. Swatch, for example, reinforces its offbeat, youthful

45

personality will targeted sponsorships that have included the Freestyle Ski

World Cup in Breckenridge, the first International

Age – how long a brand has been on the market can affect its personality.

Thus new entrants such as Apple, MCI, and Saturn tend to have younger

brand personalities than brand such as IBM, AT&T, and Chevrolets, and it as

all too common far a major dominate brand to see as strongly and old

fashioned, a brand for older people.

Symbol – a symbol can be powerful influence on brand personality because

it can be controlled and can have extremely strong associations. Apples bitten

apple, the Marlboro cowboy, the Michelin mans all helps to create and

reinforce a personality for their brands.

Why use brand personality?

The brand personality construct can help brand strategies by enhancing their

understandings of people’s perceptions of and attitude towards the brand,

contributing to a differentiating brand identity guiding the communication effort and

creating brand equality.

Enriching understanding: The brand personality metaphor can help a

manager gain an in-depth understanding of consumer perceptions and

attitudes towards the brand. By asking people to describe a brand personality,

feelings and relationship can be identified that often provide more insight than

is gained by asking about attribute perceptions.

Contributing to a differentiating identity: Strategically, a brand personality,

as a part of a core or extended identity, can serve as the foundation for

meaningful differentiations. Advertising agencies such as Young & Rubicam

and Ogilvy & Mather routinely include a brand personality statement as a part

of their brand positioning strategy.

Guiding the communication effort: Tactically the brand personality concept

and vocabulary communication the brand identity which richness and texture

to those who must implement the identity building effort. Practical decisions

need to be made about not only advertising but packaging, promotions, which

events to associate with, and the style of person interactions between the

customer and the brand.

46

Crating brand equity: The brand personality creates brand equity. The self-

expression model explains this. The model says that for certain groups of

customers; some brands become vehicles to express a part of their self-

identity. People express their own or idealized identity in a variety of ways,

such as a job choices, attitudes, options, activities and lifestyles. Brand that

people like, admire, discuss, buy and use also provide a vehicle for self-

expression.

Brand personality of cars

Are you what you drive? That is what are companies seem to be asking and in the

same breath trying to convince you about. In other words, are you the Hyundai

accent owner who commands immediate respect wherever she goes (including fro

the potential father-in-law) or are you the suave executive from the Chevrolet ad who

is ever ready to share a moment with loved one? With a plethora of new models in

the market, and generic benefits (such as space or fuel efficiency) of a particular car

segment hardly a distinguishing factor between car models, marketer are

increasingly differentiating on the emotional pay-off a particular car model/brand

provides to the customer. This, of course, varies from the segment to segment and

also on how long a particular model has been in the market.

For instance, while advertising for entry level or smaller cars tends to focus more on

the rational or functional benefits of the vehicles, the differentiations is increasingly

on the emotional benefits when it comes to high end cars. Generally, it has been

seen as one move up the value chain, the differentiation is more on the emotional

pay-off. People buy car as an extension of their personality rather than just features.

A car, in India, helps build up show off, social esteem value. The advertising would

also vary according to the segment which one is targeting,” he says. For instance,

the Chevrolet Optra ad (which depicts a young husband driving his wife to see the

moon on the occasion of Karvachauth) shows an Optra consumer as someone who

believes in family values and indulging loves ones.

“I find that typically profile of an Optra consumer is someone who is in the age group

of 35-45years and has a chauffer. He buys a car not only for himself but also for the

family and tries to make up, for not being able to spend enough time, by indulging

love ones”. The positioning goes well with the companies catch lines of “for a special

journey called life”.

47

High end car maker Skoda auto too, through its advertising, attempts to connect with

its consumer on emotional level. “Car is the extension of the personality and our

advertising shows the consumer to be youthful, image-conscious and even bit a

macho. The campaign jointly made by Skoda’s marketing department and ad agency

IB&W not only communicates the quality of the brand but an appreciation for the finer

things in life. The target Skoda consumer is a SEC A1, primarily male, businessman

or someone in the senior management,” says Shashank vaid, manger (marketing),

Skoda Auto India. Surely, image building does come higher in the consumer’s

scheme of priorities when buying a new car than ever before.

The importance of brand image has risen sharply in the last few years. At the

segment level, the increase in importance is greater for the mid-size cars, indicating

the relevance of brand among the more expensive market segments. The

manufacturer need to focus more o how consumers perceive them as offering

exciting cars and being committed towards them. Contemporariness of model has a

big impact on purchase decision. The perception of the car in terms of its

performance and design, quality, sales, after sales, cost of ownership, apart from

brand image, all impact upon the purchase decision.”

As long as advertising for cars is strongly differentiated and sharply positions the

model and at the same time satisfies a define need segment, it shall have the

capability to break the clutter and creates a unique and compelling reason for

consumers to purchase. “One good example of this is Ford Ikon- the josh machine

made a tremendous impact on consumers in offering to satisfy a clear need. One can

see some more of this with a recently launched premium hatch back as well”.

Interestingly, the strategy marketer follow changes a bit when it comes to addressing

the smaller car category with the rational benefits of a brand tending to be the focal

point of the campaign. “We have found that typically a buyer for a smaller car (sub Rs

4 lac) looks for aspects such as reliability and fuel efficiency. This changes as we

move up since in case the consumer has been with the category for a longer time

and hence it is important t to talk of an emotional pay off.

A case in point is the Maruti 800 campaign in which the kids who is playing with a toy

Maruti 800 exclaims to his dad (when asked how long will he keep on running the

car), “papa ki Kara, petrol khatam hi nahin Honda.” The ad cleverly conveys that the

car just keeps going on and on. It ends with the voiceover telling us that Maruti

Suzuki is most fuel-efficient car. However in the small car segment, the rational

48

benefits magic is not always applicable. Take the case of Hyundai Santro, the

advertising of which has evolved over the years from initially conveying mainly the

functional benefits of the model to connecting with the consumer on an emotional

level now. “When we launched the Santro, we started with the positioning if the car

being a complete family car which was completely rational positioning. But then two

things happened- the product found acceptance in the market and the competition

came up with similar product in the market.

Brand image is not driven by good advertising alone but is significantly impacted

upon by the cars performance and design, quality, and the cost of ownership. Among

the three, product quality has the highest correlation with brand image. Small car

buyer seeks capability in advertising, and fuel efficiency is relatively more important

to them. Technology, innovation, and good influence premium mid-size buyers. One

reality for us in India is that the market is extremely price/value conscious. While

making purchases based on above, there is rational side, which does have an impact

on the decision on a particular make and model of car. Be it rational or an emotional

decision, consumers would have to think as a bevy of new models flood the Indian

market.

49

Chapter-

OBJECTIVES AND RESEARCH METHODOLOGY

OBJECTIVES OF THE STUDY

The research objective is a statement, which should be in precise terminology as

possible, of what information is needed. The research objective should be framed so

that obtaining the information will ensure that the research purpose is satisfied.

Research objective have three components.

Research question

The research question specifies the information the decision making needs. The

responsibility of the researcher is to make the researcher question as specific and

precise as possible. The researcher question asks what specific information is

required to achieve the research purpose, or answer the research problem. If the

research questions are answered by the research, then the information should aid

the decision maker.

Development of hypothesis

A hypothesis is a possible answer to a question. Development of hypotheses implies

generating basically alternative answers to research questions. The research

determines which of these alternative answers is correct. It is not always possible to

develop hypotheses, but efforts should be made.

Scope or boundaries of the research

Defining the scope of the research or the research boundaries ensures the desired

precision or accuracy of the result.

The researcher’s responsibility is to restate the initial variables associated with the

decision problem, that is convert the research problem, in the form of one or more

key question formats-

How

What

Where

When

50

Why

OBJECTIVES OF THE RESEARCH

The research objectives for the thesis undertaken can be defined as follows:

To determine the demographic variables of the customers of different brands

of cars.

Examine the customer perception about the cars.

To judge the satisfaction level of car owners of different brands.

The research tracks responses at following two layers

1. Product related parameters

2. Dealer related parameters

To analyze the psychographic variables of the customers of different brand of

the cars.

Ultimately have to carve out the result that “how to increase sales of Mahindra

and Mahindra automobile”.

SCOPE OF THE STUDY

It is aimed to study the car market and buying behavior of the customer. The project

is analyzed the demographic, psychographic and buying characteristics of the

customers in buying the car. It includes the detailed study of customers focusing on

the various parameters that lead to identifying and understanding the perception of

the customer in buying the car brands.

SIGNIFICANCE OF THE STUDY

A brand is a set of expectations and associations evoked from company or product.

A brand is how key constituents- customers, employees etc. experiences what you

do. Some brands are of such great importance to people, that we speak of them as a

part of one’s life and identity, being used to express one. Some would say that these

brands have their own personality, like: Mercedes, which can easily be associated

with high status and affluent owner. The brand perception, which can be defined as

the set of human characteristics associated with a given brand.

Because many people interact with brand as though they were other people, it is

important to understand what a brand perception consists of, and how its

51

characteristics can be used to affect the relationship between the brands and its

users. Knowing and understanding the brand perception gives a good insight into this

relationship, and into peoples’ attitudes towards the brand, and is also an important

guide to communicating the brand. Like apparel and lifestyles brands, a car is

extension of one’s perception. People buy cars which either matches their

personalities or those which provide them opportunities of being perceived as

somebody they aspire to be. This becomes significant as consumers move up the

value chain from small compact cars to midsize and upwards.

RESEARCH METHODOLOGY

A research process consists of stages or steps that guide the project from its

conception through the final analysis, recommendations and ultimate actions. The

research process provides a systematic, planned approach to the research project

and ensures that all aspects of the research project are consistent with each other.

Research studies evolve through a series of steps, each representing the answer to

a key question.

PRIMARY DATA

New data gathered to help solve the problem at hand. As compared to secondary

data which is previously gathered data. An example is information gathered by a

questionnaire. Qualitative or quantitative data that are newly collected in the course

of research, Consists of original information that comes from people and includes

information gathered from surveys, focus groups, independent observations and test

results. Data gathered by the researcher in the act of conducting research. This is

contrasted to secondary data which entails the use of data gathered by someone

other than the researcher information that is obtained directly from first-hand sources

by means of surveys, observation or experimentation.

Primary data is basically collected by getting questionnaire filled by the

respondents.

SECONDARY DATA

Information that already exists somewhere, having been collected for another

purpose. Sources include census reports, trade publications, and subscription

services. Data that have already been collected and published for another research

project (other than the one at hand). There are two types of secondary data: internal

52

and external secondary data. Information compiled inside or outside the organization

for some purpose other than the current investigation. Data that have already been

collected for some purpose other than the current study. Researching information

which has already been published. Market information compiled for purposes other

than the current research effort; it can be internal data, such as existing sales-

tracking information, or it can be research conducted by someone else, such as a

market research company or the U.S. government. Published, already available data

that comes from pre-existing sets of information, like medical records, vital statistics,

prior research studies and archival data.

53

Research Project Steps

Figure-14

54

Chapter-

FINDINGS AND ANALYSIS

Q1. Why you bought your present car? Please rank from the highest order of

preference

39

12

17

23

9

0

5

10

15

20

25

30

35

40

Increase indisposable

income

Better safetyat roads

Family needs Increase infamily size

Suits yourlifestyle andpersonality

Motives

Motives For buying a car

Series1

Figure-15: Motives of buying a car

Interpretation: As per the analysis shows, increase in disposable income seems to

be the most important reason for buying a car. This trend is reflected in the growth of

the Per capita Disposable income and consequently the growth of the Indian

automobile industry especially in the B and C segment cars. Similarly, the growing

family needs like working partners, increasing family size, status, etc. add to the

motives of buying a car.

55

Q2. You decided to buy a car brand because of (rate best 3 factors from 1 to 3 in

order of your preference)

Figure-16

Interpretation: Indian market is still the hard nut to crack for most of the automobile

manufacturers. Though the Indian car industry is among the fastest growing car

markets of the world still the Indian psyche is too complex for the manufacturers to

understand. The most important reason for buying a car when it comes to B and C

segment cars seems to be ‘value for money’. 32% of the respondents suggested that

affordable prices are the most important factor while purchasing a car. This is the

reason for sticking to a particular segment till the next substantial rise in the personal

disposable income. This reason is followed by ‘Value for money’ where the

customers look for the best product, best services and best repute all bundled in one

with the best deal they can strike. This explains the reason for the stagnant or

sudden growth in sale of B and C segment cars just before budget and near

occasions like Diwali.

56

PRODUCT SATISFACTION LEVEL

Q3.Please rate your existing car in terms of understated Interior Design features on a

scale of 1 to 5 where 1 = Highly Dissatisfied, 2 = Dissatisfied, 3 = Neutral, 4

= Satisfied, 5 = Highly Satisfied

Interiors for Segment B cars

3 4 43 4 4 4

3

4 44 4 3 4

3

3 33

44

3

44 4 4

4

4

4

11 1 1 3

14

3 3 3 3 3 3 3

0%

20%

40%

60%

80%

100%

MarutiEstilo

MarutiWagon

R

MarutiSwift

IndicaV2

Aveo Santro GetzCars

Lev

el o

f sa

tisf

acti

on

Adjustable Front Seat Headrest

Music System

Interior Colour

Dash Board

Leg Room

Seat Design

Figure-17

Interpretation: Interiors play a very important role in deciding the sale of a car.

Moreover, comfortable and exotic the interiors are more are the chances of its being

popular among the customers. For this reason manufacturers spend billions of

dollars every year on R&D to continuously improve the interiors of their cars. Seats,

leg room, dash board, armrests etc are few of the options which count for the

interiors. As the analysis show Getz scores substantially high w.r.t. its counterparts

on the account of music system installed. Similarly, Indica V2 races far ahead as far

as leg room is concerned. However, M&M Pessenger Car fares badly on this front.

Overall, almost all cars get a mixed response in this segment as far as the interiors

are concerned.

57

Customer Satisfacton based on Interiors of Cars

4 4 4 4 4 4 4

4 4 4 5 5 5 5

3 4 4 5 5 53

4 4 4 44

4

4

3 3 3 4 5 45

3 3 3 3 3 3 3

0%

20%

40%

60%

80%

100%

Esteem

Balen

o

Indi

go

Indi

go M

arin

a

Optra

Accen

t

Verna

Cars' Interior Parameters

Sat

isfa

ctio

n le

vel (

in %

age)

Adjustable Front Seat Headrest

Music System

Interior Colour

Dash Board

Leg Room

Seat Design

Figure-18

Interpretation: As one can see most of the respondents are quite happy with the

interiors of their respective cars. However, one striking point observed here are that

almost every car fares neutral on the adjustable front seat headset. These cars have

more leg room, come with attached music systems (Verna fares the best among all

cars on this front) combined with luxury features like TV screens, armrests at the

back seat etc. Talking about Mahindra and Mahindra’s Xylo it has a perfect blend of

interior,it seems that it has taken it from ‘D’ segment cars.A lavish interiors are

always a akin for good selling.

58

Q4. Please rate your existing car in terms of understated Safety features on a scale

of 1 to 5

Customer Satisfaction on the Safety Parameter

3 3 33 3 3 3

11

11

3

11

3

3 43

4

3 4

3

4 43

3

4 5

3 4 5 4

34 4

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

MarutiEstilo

(9)

MarutiWagonR(23)

MarutiSwift

IndicaV2

Aveo Santro Getz

Safety Parameters of Different cars

Cust

om

er S

ati

sfact

ion L

evel

( %

age

)

Intensity of front light

Aerodynamic Shape

ABS

Air Bags

Crossbar under Dashboard

Figure-19

Interpretation: It can be noted Passenger Cars Getz ,Swift and Indica V2 fight neck

to neck on almost every front, with Indica marginally better in features like crossbars

under the dashboard and Anti Brake systems. Most of the cars in this segment fare

relatively similar and very close to each other on most of the fronts.

59

Customer Satisfaction Level on Safety Parameters

4 44 4 4 4 4

1 1 3 3 4 4 4

4 44

44 4

5

3 3 33

4 43

3 3 45

4 4 4

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Esteem Baleno Indigo IndigoMarina

Optra Accent Verna

Cars' Safety Parameters

Cu

sto

mer

sat

isfa

ctio

n le

vel

Intensity of front light

Aerodynamic Shape

ABS

Air Bags


Figure-20

Interpretation: As one can see most of the respondents are quite happy with the

safety parameters of their respective cars. However, one striking point observed here

are that almost every car fares neutral on the safety parameters.

60

Q5. Please rate your existing car in terms of following parameters

Customer Satisfaction Level on the Fuel Efficiency

3 43 3 3 3 3

3

4

44 3

3 4

3

34

44 5

5

3 3 34 4 4 4

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

MarutiEstilo

(9)

MarutiWagonR(23)

MarutiSwift

IndicaV2

Aveo Santro Getz

Cars' Fuel Efficiency Parameters

Cust

om

er S

ati

sfact

ion L

evel

( %

age

)

Stability at higher speed

Pick up

Mileage

Fuel Consumption

Figure-21

Interpretation: The customer choice of the car highly depends upon the

performance and maintenance costs of the car. This is the reason why this class of

parameter was chosen for this study. And the results show that Hyundai Passenger

Car’s could give hints as how to increase pickups, stability at high speeds and

optimum fuel efficiency. M&M Passenger Car can fare out as the best car in its

segment as most fuel efficient car of all. Similarly, M&M Passenger Car fares the

best on the terms like mileage but it lags behind with few. So this segment shows a

mixed bag of response for the Fuel efficiency and mileage parameter. Indica V2

performs consistently on all the parameters and Getz fares really well on pick up

whereas it fares badly on fuel consumption. Considered this condition for Getz it

should be seen as a red signal for the manufacturers so that Getz does not end up

being like Fiat’s Palio famous as a car for ‘drinking petrol.

61

Customer Satisfaction Level on the basis of Fuel Efficiency

3 34

3 3 3 3

33

3

3 3 3 3

3 4 45 5 5 5

4 4 5 5 5 5 5

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Optra Accent Verna

Car's Fuel Efficiency Parameters

Cust

om

er S

ati

sfact

ion L

evel

( in %

age

te

rms) Stability at higher speed

Pick up

Mileage

Fuel Consumption

Fig-22

Interpretation: Segment C cars are known as hybrid car segment between the B

segments fuel efficiency with the luxury of the D class. Checking the same it seems

that most of the cars in this segment are placed much closed to each other with very

little difference here and there. Most of the cars are fuel efficient with respect to their

weights and pick ups. Indigo fares as the best car in terms of fuel efficiency. Baleno

fares a little bit behind than its counterparts as far as the stability at high speeds and

mileage is concerned.

62

6) What should be the top speed of your family car?

Figure-23

Interpretation: It suggests that the car having maximum speed more than 150kmph

is no problem as it is only plus as one could easily increase its speed when ever it is

required. Customers want their cars to be fully equipped with high speed systems.It

also signals toward the thrill part as by adding more thrill gears into their cars they

can really move ahead.

63

7) What is your preference when it comes to considering the availability of the

parts and accessories of your family car?

a. Parts and accessories available all over the country

b. Parts and accessories available only in big cities

c. Unique parts and accessories should be available on demand otherwise parts

should be available all over the country

d. If any other

Figure-24

Interpretation: Parts and accessories should be available all over the country in this

case the indigenous Mahindra and Mahindra automobile is far ahead of other

counterparts as it is evident that its showrooms and work shops are at all places

inIndia. As the respondents showed by their responses that the unique parts should

be made available on demand but the daily chores of the parts should be available

every where.It can further move ahead by opening more dealerships and showroom

so that all the parts could be made available easily throughout India.

64

Satisfaction level of customers with dealers of various car manufacturers on

various parameters

Q1. Please rate your Dealer on the understated parameters on the scale of 1 to

5 where, 1 = Highly Satisfied, 2 = Satisfied, 3 = Neutral, 4 = Dissatisfied, 5 =

Highly Dissatisfied

Distance ( Proximity)

Advertisements (Promotions)

Technical Facilities

Cost of Service

Availability of Spares

Information Provided

Service Time

Charges

Staff

Car Handling ( Delivery & service)

Assured Customer Transactions

Ambience of Service Center

Finance ( Credit) Schemes

Dealers are the middle men between a car manufacturer and its customers. Dealer

thus becomes the most important link in joining the company to its customers as he

is the person who will sell the product, will deliver it and will keep on providing the

after sales services to the customers as and when required. So, it becomes

necessary automatically to study dealer as a part of customers’ satisfaction journey

with the product called car!

Why M&M Passenger Car fares so well ahead of its competitors till date and its the

largest car company in India with the largest market share in A and B segment is

because during the protected regime it build a dealers network so strong that its yet

very difficult for most of the competitors to set up a network as large as M&M

Passenger Car. So wherever you go its not difficult to find a M&M Passenger Car

service station and a M&M Passenger Car dealer. This is how M&M Passenger Car

has maintained relationships with its customers and has been able to convert most of

them into a repeat customer. So, dealer network is something of such importance

that while studying the customer’s satisfaction profile its almost impossible to ignore

it.

65

Customer Satisfaction Level on the Basis of Dealers

5 54

45

45 4

4 4 4 45

34

4

3

4

4

4 4

44 4 4

4

2 34

1

2

4

4 2

54 4 5

4

4 4 42

4 53 3 5 4 4 4 4

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Dealers releated parameters for diff Manufacturers

Cus

tom

er S

atis

fact

ion

Leve

l ( in

%ag

e te

rms)

Hyundai

General Motors

Tata Motors

Maruti Suzuki

Figure-2

Interpretation: While buying a car, dealers ‘choice play a very important role in

deciding the company and model’s choice. So dealers act as influencers on the

complete buying behavior of the prospective customers. Among all the listed factors

M&M Passenger Car fares the best among all its counter parts in terms of dealer

density which is quite obvious. Also, the cost of service provided by M&M Passenger

Car dealers is the lowest followed by Tata Motors. Similarly, for B and C segment

cars M&M Passenger Car emerges out as the clear winner among the four car

companies studied all thanks to the vast, extensive and well managed dealer system.

66

Q2.How do you rate the brand image of your car?

1 = Very Low and 5 = Very High

Brand Image

3

4 4 4

3

5

3

0

1

2

3

4

5

6

MarutiEstilo

MarutiWagon R

MarutiSwift

Indica V2 Aveo Santro Getz

Car Brands

Cust

om

er P

erce

pti

on (

Avg

)

Series1

Figure-26

Interpretation: As per the analysis, Hyundai Passenger Car is the car whose brand

image is most preferred in the market. This is because of the reason, that it’s from

the house of Hyundai a South Korean company known for its overall image. On the

contrary Passenger Car Estilo and Aveo share the same platform on the brand

image. This can be attributed to the fact that both these cars are relatively new on the

block and market takes time to imbibe and give the brand an image. This is

established by the fact that TataIndica Car and Swift are exactly the same as far as

the image is concerned.

67

Customer Perception of Different Cars

4

3

4

3

5

4 4

0

1

2

3

4

5

6


Optra Accent Verna

Car Brands

Cust

om

er P

erce

pti

on (

Avg

)

Series1

Figure-27

Interpretation: As the analysis reveals GM’s Optra fares as the Best Car as far as

customers’ perception is concerned about the brand image of the car in the C

segment. This is because of the fact that GM itself commands an amazing brand

image among its customers. Accent and Verna both Hyundai cars share the same

position.

68

Q3.Will you recommend your car to your friends?

Customer's Ultimate Perception

73

27

0

10

20

30

40

50

60

70

80

Yes No

Customer Action ( Will you recommend your car to your friends?)

Fre

qu

ency

Figure-28

Interpretation: It seems logical that satisfied customers will someday become loyal

customers, in other words there is a positive correlation between customer

satisfaction scores and customer buying behavior. If a customer rates the car very

high in satisfying his or her needs, the car manufacturer should expect more referrals

and this is reflected in the analysis that 73% customers say that they will refer their

car to their friends even if they move to other segment or other brand.

69

Q4.Will you buy your new car in the

Customer Perception

11

17 17

23

7

6 7

12

0

5

10

15

20

25

30

35

40

Same Segment,same

manufacturer

Same Segment,different

manufacturers

UpperSegment, SameManufacturer

UpperSegment,Different

Manufacturer

Customer Actions

Val

ues C

B

Figure-29

Interpretation: The analysis shows that most people when moving to upper segment

will prefer a different manufacturer. And the next striking finding is that the customers

will prefer both same and different manufacturers in the B segment cars and there is

not much difference in the C segment also. This behavior is complex to understand

as this are the customers who have given whopping response for recommending

their car to their friends. It’s the reason why brand perception is so difficult to

understand.

70

DEMOGRAPHICS

20

41

21

17

age group

<21

21-35

36-55

>55

Figure-30

I surveyed around 50 people who belonged to various age groups. The survey of 4

age groups was done. The four age groups were:

Less than 21 years

21 -35 years

36-54 years

More than 55 years

71

MONTHLY FAMILY INCOME

33

28

19

19

monthly family

income

<50,000

50,001-1,00,000

1,00,001-2,00,000

>2,00,001

Figure-31

I surveyed around 50 people who belonged to various monthly family income groups.

The survey of 4 income groups was done. The four income groups were:

Less than 50000

50000 - 1,00,000

1,00,001 – 2,00,000

More than 2,00,001

Interpretation: Above graphs exhibits the income bracket of the sample size, as

evident the majority of the sample is in the income bracket of < 50,000 a month

income. Though none of the bracket is highly skewed, this enables the study to be

wide and not dependent on a set income class, which was a fortunately desirable

result of simple random sampling.

72

CROSS TABULATION

1) Motive to buy the car*segment car B and C

Affordable pricesTechnical Superiority over com

petition

Com

fort

manufacturer's im

age

value for money

Safety

After sales service

respondant's objective buying a car brand

0

5

10

15

20

Co

un

t

segment Car B

Estilo

Wagon R

Swift

Santro

Getz

Indica V2

Aveo

Esteem

Baleno

Accent

Verna

Indigo Marine

Indigo

Optra

Bar Chart

Figure-32

Interpretation: According to the result, I found that choice of car depends upon

these following factors: the choice of car is not driven only by intensive factors such

as brand perception but is hugely influenced by extensive factors such as price,

services, and models available, financing options etc. also the choice of the car is

largely influenced by the manufacture image. This is why Getz emerges out as a

winner in the B segment for this criteria as they provided value for money. As Getz is

from the house of Hyundai known for its technology and great design is far better

perceived as a preferred car than other cars. But a word of caution here, this

perception may or may not result in a converted sale. If Mahindra and Mahindra

starts providing the value for money as Getz is doing. Which means provide

something extra which could bring delight on customer’s face for an example: Lavish

interiors and excellent fuel efficiency; then certainly Mahindra and Mahindra can

surge-up its sales by leaps and bounds.Recommend the car to your friend*ranking of

73

Brand and company .

yes no

Would you recommend your car to your friends

0

10

20

30

40

Co

un

t

respondants' ranking of

brand and company

image

Very Low

Low

Neutral

High

Very High

Bar Chart

Figure-33

Interpretation: The graph shows that people who rank their car high or very high on

the brand image are the people who recommend their car to their friend. This is

something the car companies should look for as these people may not be the brand

loyal but are definitely the people who help a company to reinforce the brand image

propagated by the company. Ranking of Brand and Image*Segment B and C car

74

Very Low Low Neutral High Very High

respondants' ranking of brand and company image

0

2

4

6

8

10

Co

un

t

segment Car B and

C

Estilo

Wagon R

Swift

Santro

Getz

Indica V2

Aveo

Esteem

Baleno

Accent

Verna

Indigo Marine

Indigo

Optra

Bar Chart

Figure-34

Interpretation: This graph shows that how brand image is useful in making the

choice of a car especially in the B and C segment. So, M&M Passenger Car is the

car whose brand image can be on the top and it could be the most preferred car ,if

technological advances of swift, WagonR and Indica will be taken, to improve on all

related aspects.

75

Chapter-

RECOMMENDATIONS

According to the research and analysis done in this thesis brand personality alone is

not enough in many cases. Such as take case of Tata’s Grande it has the brand

personality made for the semi affluent group or say it was launched as segment C

car, but it could not live upto the expectation as people were asking for more that

were :better fuel efficiency, affordable price and looks to die for. people who rank

their car high or very high on the brand image are the people who recommend their

car to their friend. This is something the car companies should look for as these

people may not be the brand loyal but are definitely the people who help a company

to reinforce the brand image propagated by the company. For an example :Zen was

a segment –B car of the Maruti udyog Ltd company and it was a hit car and why

because the customer liked its fuel efficiency qualities, its looks, affordability, and say

it was complete value to the money. Definately people helped the company to

reinforce the brand image by recommending it to others which they had aimed at its

inception. As per the analysis ,its evident that customer satisfaction means retention

of customers, and hence customers bring word of mouth into play. Supposedly

according to analysis the best way to achieve optimum sales when your satisfied

customers bring word of mouth into play. Customers satisfaction is taken as an asset

by many customer centric corporations. Product satisfaction, After sales services

satisfaction and relationships satisfaction are the three core elements which

customers are looking for. Those who implied these elements, their cars are selling

like hotcakes. According to the analysis done, choice of car depends upon the factors

such as brand perception but is hugely influenced by extensive factors such as price,

service, and models available, financing options, its resale value, sturdiness and

looks, etc. Also the choice of the car is largely influenced by the manufacturer’s

image. Increase of sales could also be achieved by showing technology advances.

Car manufacturing companies research and development department should also

look at the disposable income of the citizens as analysis showing that most of them

belonged to income group that is below Rs.50000 per month and hence they want to

buy a car, which can suit their pockets. In this case ‘Xylo’ is the perfect example, the

indigenous company of Mahindra and Mahindra has shown greater research

acumen. As we all know that its (xylo) basic variant starts at Rs.6,75000 well within

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the reaches of the income groups. Such types of research acumen will definitely see

increase in selling. The analysis also shows that most people when moving to upper

segment of the car will prefer a different manufacturer.As for an example: Mahindra

and Mahindra don’t have upper segment car for affluent groups. In competition with

its foreign counterparts such as Toyota, GM, etc. It should also look to launch a

upper segment car such as land cruiser of Toyota company. So that the customer will

remain loyal to the company and increase in sales in its upper segment cars will also

be seen. On the other hand when talking about B or C segments cars customers,

they recommended for it and remained loyal, this also showed that how complex is it

to understand brand perception of the customers. Here one thing is for sure that

those who recommend their cars are satisfied customers. As per survey another very

important thing has come to the fore, and that is the availability of the parts and

accessories of the car. For an example :In India all the regions are not well

developed so many car manufacturing companies could not able to open their

showrooms and dealerships at remotest of the places. On this front company like

Mahindra and Mahindra can keep its nose ahead by opening its dealership in

remotest of areas and this will surge up the selling.

Safety gears, Interior design, over all looks, Fuel efficiency, Maintenance cost

incurred, etc. All these factors are very important factors with Segment-B and C as

such type of cars usually in the Indian car market are bought by income groups

whose newly increased disposable salary can afford but they put every step with

great caution while buying the car. In this case a car which has a perfect blend of all

the above mentioned factors, could easily surge-up the pace of the sales of the cars.

A very important role is played by dealers, which can always prove to be the main

reason behind selling or none selling. It is evident by the analysis that many

important cases are being handled by the dealers and hence lead to the customers

satisfaction and retention. Such as advertisements (promotions), providing technical

facilities, cost of service, availability of spares, information providing, services time,

finance credit schemes, car handling during servicing, etc .Customers are very clever

they look for the distance proximity of the dealership from their residing places as

well. This thing also lead to increase in sales or decrease in sales. So the dealership

should be made available if a company wants to increase its sales.

Mahindra and Mahindra is the leader in light commercial vehicles, including three-

wheelers. It is the market leader in utility vehicles in India since inception, and

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currently accounts for about half of India’s market for utility vehicles. The further more

market share could be captured, if it starts following aforementioned

recommendations.

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Chapter-

CONCLUSION

To conclude, the results show that the companies are playing on the peripheral cues

to maintain their Total Relationship Management and connect to the customers both

present and potential. The companies are operating in a highly aggressive and

competitive global market place and this climate has led to the emphasis on quality in

all aspects. TQM focuses on integration and coordination as well as the continuous

improvement of all activities and processes. Total Relationship Management (TRM)

is a very recent marketing strategy and philosophy. It focuses on and is concerned

with all integrated internal and external activities within and between the

organizations. These two terms are integrated by the manufacturers by building good

quality products and building good relationship with dealers and enhancing service

levels.

However, when studied from the point of view of a customer there seems to be no

major difference among the car brands in a segment as far as performance is

concerned. The brand perception is dependant mostly on the peripheral cues

depending upon the nature and quality of the service provided along with the pricing,

maintenance, availability of spare parts and related issues. So, a question arises

here that is this the end of road for the branding of cars? Has the commoditization of

cars has started and its time that manufacturers must read the writing on the wall? It

seems so! It seems as an undercurrent sentiment is flowing and the perception of the

customers is changing according to it. So this might be the reason that despite Verna

faring so high on the performance parameters still lags on the account of converted

sales. The study shows that brand perception is something which starts building up

before a car is purchased and goes on with its use and is reflected in the

recommendations the customer makes to his acquaintances for the same car. Also,

its seen that the customer might not be using the car still he holds the perceptions

about it. Brand personality of a car is enforced by the sellers in the mindsets of the

customers and the customers react to it by forming their perceptions about the car

and this reflects in the overall brand image of the car. So brand image and brand

personality complement each other and the brand perception aids the building of

brand image.

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Dealers, as per the study findings, play a very important role in building up the brand

perception of the cars. Since dealers are the connecting link between the customers

and the manufacturers thus becoming the most important link in joining the company

to its customers as he is the person who will sell the product, will deliver it and will

keep on providing the after sales services to the customers as and when required.

So, it becomes necessary automatically to study dealer as a part of customers’

satisfaction journey with the product called car! Their proximity to the customers, the

service provided by them and the relationship maintained by them with the customers

helps the car companies to establish and reinstate the brand personality

communicated by them to the customers.

Finally the major point that emerges out of this detailed study is a caution for the car

companies ,what are the do’s and what are the don’ts ?ultimately, “ how to increase

passenger car sales?”, the answer lies within this result of this research. It says that

there is no doubt that Indian car market may be growing with a double digit figure still

the car companies have a long way to travel to convince their customers about the

brand personality of their cars and how it suits the prospective buyers. Simply

because it simply is not a guarantee that how so ever good the customer might be

holding the brand perception and how so ever good the brand image may be it is not

a guarantee that it will convert into sale. Cars just like clothes and accessories suit

the style and persona of a person and since all cars will become commodity

someday the key to sell and excel in the market will lie with a person who knows how

to use the perceptions of the customers to its use and sell the cars ‘coz ultimately

only that car survives which sell.

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BIBLIOGRAPHY

Sites Visited -

www.siamindia.com

www.autocarindia.com

www.overdrive.com

www.mahindraandmahindra.com

www.ibef.org

a. Book referred to

Philip & Kotler: Marketing management

b. Journals

HBS (Harvard business review)

c. Magazines

Companies research paper

Business Today

d. Internet

i. Sites

(1) www.marketingtimes.com

(2) www.maruti.com

(3) www. Hyundai.com

ii. Search Engines

www.google.co.in

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http://www.maruti.com/

http://www.marketingtimes.com/

http://www.ibef.org/

http://www.overdrive.com/

http://www.autocarindia.com/

http://www.siamindia.com/

APPENDICES

QUESTIONNAIRE

For Customers:

Q1. Why you bought your present car? Please rank from the highest order of preference

1. Increase in disposable income

2. Better safety at roads

3. Family needs

4. Increase in family size

5. Suits your lifestyle and personality

Q2. You decided to buy a car brand because of (rate best 3 factors from 1 to 3 in order of your preference)

1. Affordable price

2. Technical superiority over competition

3. Comfort

4. Manufacturer’s image

5. Value for money

6. Safety

7. After sale services

Product Satisfaction Level

Q3.Please rate your existing car in terms of understated Interior Design features on a scale of 1 to 5 where

1. Highly Dissatisfied

2. Dissatisfied

3. Neutral

4. Satisfied

5. Highly Satisfied

Interior Type 1 2 3 4 5Seats designLeg Room Dash BoardInterior ColourMusic SystemAdjustable Front seat Headrest

Q4. Please rate your existing car in terms of understated Safety features on a scale of 1 to 5

Safety Parameters 1 2 3 4 5

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Air Bags

Anti Lock Breaking System

Aerodynamic Shape

Intensity of front lights

Q5.Please rate your existing car in terms of following parameters

Parameter 1 2 3 4 5

Fuel Consumption

Mileage ( Km/ltr)

Pick Up

Stability at higher speed

Top speed

6)What should be the top speed of your family car?

(a) 160kmph

(b) 150kmph

(c) 140 kmph

(d) 130 kmph

(e) between 110 to 125kmph

7) What is your preference when it comes to considering the availability of the parts and accessories of your family car?

a. Parts and accessories available all over the country

b. Parts and accessories available only in big cities

c. Unique parts and accessories should be available on demand otherwise parts shouldbe available all over the country

d. If any other

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Customers satisfaction levels with dealers of car manufacturers on various parameters

Q8. Please rate your Dealer on the understated parameters on the scale of 1 to 5 where

1. Highly Satisfied

2. Satisfied

3. Neutral

4. Dissatisfied

5. Highly Dissatisfied

1 2 3 4 5

Distance ( Proximity)

Advertisements (Promotions)

Technical Facilities

Cost of Service

Availability of Spares

Information Provided

Service Time

Charges

Staff

Car Handling ( Delivery & service)

Assured Customer Transactions

Ambience of Service Center

Finance ( Credit) Schemes

Q9.How do you rate the brand image of your car?

1 2 3 4 5

Very Low Very High

Q10.Will you recommend your car to your friends?

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Yes

No

Q11.If yes, will you buy your new car in the

Same segment , same manufacturer

Same segment, different manufacturer

Upper segment, same manufacturer

Upper segment, different manufacturer

Age group:

<21 21-35

36-55 >55

Q12What is your monthly Family income?

Less than 50000

Rs 50,000 –Rs 1, 00,000

Rs 1, 00,001– Rs 2, 00,000

More than Rs 2, 00,001

Number of car’s owned:

Present Car (s) owned:

NAME: GENDER:

Phone No:

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GGSIPU

PROJECT REPORT ON

CONSUMER PERCEPTION STUDY WITH RESPECT

TO MAHINDRA & MAHINDRA

SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF THE DEGREE OF BACHELORS OF

BUSINESS ADMINISTRATION (BBA)

TO

GURU GOBIND SINGH INDRAPRASTHA UNIVERSITY

DELHI

JAGANNATH INTERNATIONAL MANAGEMENT SCHOOL OCF

POCKET 9, SECTOR-B,VASANT KUNJ

NEW DELHI-110070

PROJECT REPORT

86

ON

CONSUMER PERCEPTION STUDY WITH RESPECT TO

MAHINDRA & MAHINDRA

MENTOR SUBMITTED BY:Mrs. ANJALI SHARMA PRIYAVART SHARMA ENROLLMENT NO. 0931421708 BBA-3

87

CERTIFICATE

The project entitled “CONSUMER PERCEPTION STUDY WITH RESPECT TO

“MAHINDRA & MAHINDRA” is Hereby approved as a bona fide work carried out and

presented by PRIYAVART SHARMA in a manner satisfactory a warrant it

acceptance to the degree after which it has been submitted. It is understood that by

this the undersigned do endorse or approve any statement made, opinion expressed

or conclusion drawn therein, but approve the project work only for which it has been

submitted.

SIGNATURE OF THE TEACHER

ACKNOWLEDGEMENT

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I wish to extend my deep sense of gratitude to my guide Mrs. ANJALI

SHARMA for providing me with valuable guidance and motivation to

make the project work as a highly useful and knowledge based

experience.

Last but not least I would like to thank all the faculty members of JIMS,

VASANT KUNJ and friends who in one way or other helped me in

bringing out this project work as a successful one.

PRIYAVART SHARMA

ENROLLMENT NO.0931421708

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ABSTRACT

The automobile industry today is one of 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 and at the rate of 37% per annum in june

2006-07 . 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. An attempt could

be taken to answer some of the questions regarding brand personality of selected

cars in India by conducting the market research. This comprehensive study is

categorized into parts, deals with introduction to brand personality, companies

selected, product and the industry.

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. 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 thesis shall attempt to answer some of the questions regarding “how to increase

passenger car sales”, specially talking about our own Indian automobile company

Mahindra and Mahindra. By conducting a survey we could know the brand

personality of selected cars in India and many more factors which could increase the

passenger car sales. The market research will be helpful for the new car entrant

companies in India as well to find out the possible gaps between the customer

expectations and the present market offerings. This way Mahindra and Mahindra

automobile Ltd will be able to increase their share in the ever-expanding Indian

market pie.

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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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TABLE OF CONTENTS

1 Abstract 2-3

2 Signatory Page 4-7

2 Acknowledgements 8

3 Table Of Contents 9

4 List Of Figures 10-11

5 List Of tables 11

5 Thesis Synopsis 12-13

6 Introduction 14-18

7 Overview of Auto Segment 19

8 Size And Share Of The Automobile Market 20-28

9 Company Profile & Logistics 29-48

10 Brand Personality 49-58

11 Objectives of Study & Objectives of Research 59-62

12 Research Methodology 62-63

13 Findings & Analysis 64-89

14 Recommendations 90-92

15 Conclusion 93-94

16 References 95-102

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LIST OF FIGURES

Serial No. Figures Page No.1 Major attributes of customer satisfaction 162 The buying Process 173 Three core elements of satisfaction 18

4-5 Indian Automobile Industry size& Indian Automobile Industry product

21

6 Indian Automobile Manufacturers in India and Plant Locations

23

7 Automobile Manufacturers Market Share 258 Domestic Sales of Cars 289 Information of Flow of supply chain 31

10 Showing the demand forecasting 3211 Central Production and Planning Control 3412 Inventory management 4213 Showing the cost management 4314 Research Project Steps 6215 Motives of buying a car 6416 Product specific reasons for buying a car 6617 Liking for the interiors of the segment B cars 6818 Cars interior’s parameters 69

19-20 Safety parameters of different cars 71-7221-22 Car fuel efficiency parameters 73-74

23 Top speed of family car 7524 Availability of parts of family car 7725 Dealer related parameters for different

manufacturers80

26-27 Brand image of the cars & perception of different cars

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28 Customer action :recommending car to friends 8329 Segment wise customer perception 8430 Demographic: Age wise perception 8531 Monthly family income 8632 Respondents objective buying a car brand 8733 Recommending a car to your friends 8834 Respondents ranking of brand and company image 89

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LIST OF TABLES

Serial No. Tables Page No.

1. Explains the growth of India Car Sale. 26-27

2. Replies of the company as people 50

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Market Consumer Perception Mahindra Thesis

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