Market Analysis of Consumer Durables(Automobile Industry)

MARKET ANALYSIS OF

CONSUMER DURABLES

(AUTOMOBILE SECTOR)

Presented byGroup No.9Sumeet Mittal (171)K.Naresh kumar (172)Ashish Sharma (173)Gourav Kumar Bhut (174)Anurag Nair (175)Shashank Sharma (176)

CONSUMER DURABLES

Consumer goods are often divided into two categories: durables and non-durables.

A category of consumer products that do not have to be purchased frequently(typically more than three years).Durables have an extended product life and are not worn out or consumed quickly when you use them.

Examples of durable goods are automobiles, appliances, furniture, jewellery, consumer electronics and sporting goods.

INDIAN CONSUMER DURABLE MARKET

Multinational companies have garnered significant market share of about 30% and 25% respectively due to their superior product offerings at good prices.

According to Cygnus estimates, consumer durables market crossed the US$10.0 billion milestone by the year 2011-12, growing at a CAGR of 23.8.

It will be the key challenge for consumer durables manufacturing companies to spend in R&D for surviving in the highly competitive market.

The household income in the top 20 boom cities in India is projected to grow at 10% annually over the next eight years.

AUTOMOBILE INDUSTRY• Automobile – wheeled passenger vehicle that carries its own motor.

• The automobile industry is divided into two based on drive type• Two-wheel drive• Four-Wheel Drive

• Part of the classification process takes into account the vehicle's body style:• Coupe• Convertible• Station wagon or estate car• Sedan• Minivan• Sport utility vehicle (SUV)• Sports car• Hatchback

INDIA’S AUTOMOBILES PRODUCTION

• In 2010, India beat Thailand to become Asia's third largest exporter of passenger cars.

• The majority of India's car manufacturing industry is based around three clusters in the south, west and north.

• Chennai is the Detroit of Asia as it accounts for 6o% of Indian automobiles production.

AUTOMOBILE COMPANIES IN INDIA• Indian Automobile companies :

Chinkara Motors, Force Motors, Hindustan Motors, ICML, Mahindra, Premier Automobiles Limited, San Motors, Maruti Suzuki, Tata Motors.

• Vehicles assembled in India :BMW India, Fiat India, Ford India, General Motors India, Chevrolet, Honda Cars India Limited, Hyundai Motor India, Isuzu, Mercedes-Benz India, Mitsubishi, Nissan Motor India, Renault India, Toyota Kirloskar, Volkswagen Group sales India, Volkswagen India.

MARKET SHARE

4 P’S OF MARKETING

Product •Thing that is being sold. Not just the physical product itself, but also anything related to how it is made, packaged and named. Also includes product/service options, the after-sales service, warranties, and servicing. BMW offers varied products/services.

Price •Decisions about how much to charge for goods and services. Price affect the viability of a brand and the profitability of an organisation. Honda Amaze is priced in the mid-sized Sedan segment making it cost effective.

Promotion •Communication that relate to a specific marketing campaign. Includes communication with retailers and distributors, communication with purchasers and end users and also internal communication. XUV 500 is promoted as a go anywhere SUV.

Place •Refers to distribution. All aspects related to how goods and services are 'moved' from the producers to the end user. The target place of sell determines the place. Audi and Mercedes showrooms in major cities(Tier 1) and almost nothing elsewhere.

SUCCESSFUL MARKETING STRATEGY: PROMOTION• Maruti Suzuki promotes most of their products through TV ads and print media.

Whenever Maruti introduces any new product, it also attaches a new punch line along with it in order to create a lasting relationship with the consumers.

• Maruti came up with a new campaign based on the fuel efficiency aspect that Maruti Suzuki looks to deliver with their cars. The ad has this line- "For a country obsessed with mileage, Maruti Suzuki makes India's most fuel efficient cars."

SUCCESSFUL MARKETING STRATEGY:PLACE/ DISTRIBUTION

• Maruti has showrooms in all the major cities of the country. Maruti Suzuki has largest network of dealers among car manufactures in India with more than 4000 sales executives. Sales network is linked through secure extranet based information network. The service network of Maruti covered 1500 cities across India with the largest no of service outlets.

SUCCESSFUL MARKETING STRATEGY: PRODUCT AND PRICE

• The company recently updated its manufacturing and technology capabilities. It came up with better and efficient K-series engine. Maruti also expanded its business portfolio by starting new but related businesses such as -Maruti Driving School -Maruti True Value -Maruti Finance -Maruti Insurance.

• Maruti Suzuki offers 14 different models in a total of 92 variants. Maruti Suzuki has made its presence in the market with prices ranging from Rs 2.27 lakhs to Rs 7 lakhs. The prices were kept low to attract middle income group.

STP

Targeting is identification of attractive market segments and

fulfilling the needs of consumers. For Mahindra &

Mahindra, the mid sized Sedan can be one the target markets

Positioning is concept of defining what role the brand will play in

enhancing customers’ lives. More of psychological aspect. Mercedes positions itself as a very classy and

premium automobile

Segmentation divides the market into homogeneous

Sub-units. Price can be one segment. Economical, Premium, Super Premium

SWOT ANALYSIS

•Low cost and cheap labor•Increase in the export levels•Large pool of engineers•Increasing demand for European quality•Investments by foreign car manufacturers

strengths

•Low labor productivity•High interest rate and overhead level•Low investment in R&D area•Local demand is still towards low cost vehicles due to comparatively low income levels

weaknesses

SWOT ANALYSIS

•Growing population in the country•Focus from the government in improving the road infrastructure•Rising living standards & Increase in income level•Rising rural demand for utility vehicles•Keeping a vehicle is becoming status symbol•Women drivers have increased

Opportunities

•Less skilled labor •Lack of technologies for Indian companies•Increase in the import tariff and technology cost•Smaller players that do not fulfill international standards

Threats

PORTER’S ANALYSIS OF THE INDUSTRY

Rivalry amongst existing

competitors: High

Intense due to the entry

of foreign companiesRivalry high with any

product being matched in a few months by

competitorsSimilar technical

capabilitiesCollaboration with

international players

Suppliers Bargaining

Power: Low High competition

among low suppliersAs suppliers are reliant on high volumes, they have less bargaining

power

Buyer’s Bargaining

Power: High •The power axis is

tipped in the consumers’ favor.

Low switching costs from among competing

brands

Threat of Substitutes:

Mild A limited no of substitutes are

there implies that customers cannot easily find other

products or services

Threat of New Entrants :Very

Low High capital requirements

High sunk costs limit competition

Advanced technologies are required

Industry requires economies of scale

OBJECTIVE OF THE STUDYTo carry out a study of consumer durables (automobile sector) in India.

Analysis of Indian automobile market based on marketing theories.

To find out the factors affecting the decision making while buying a vehicle.

A small comparison study of different companies & their brand image.

METHODOLOGY

Data analysis: Survey of Consumers

marketing strategies

Factors affecti

ng

Customer

needs

Likeness among

the masses

Primary Data

Based on the

analysis, conclusio

n

Public survey of consume

rs

Secondary Data

E-Medi

a

Magazines

Internet

TOOLS USED FOR DATA ANALYSIS

Tables.

Bar graphs.

Pie charts.

SPSS.

Microsoft Excel.

DEMOGRAPHIC ANALYSIS

62%

38%

Gender

MaleFemale

40%

30%

10%

10%6%5%Age

18 - 2323 - 2828 - 3434 - 4040 - 50> 50

18%

32%27%

16%

6%Annual Income

<3 Lakhs 3-5 Lakhs

5-8 Lakhs 8-12 Lakhs

>12 Lakhs

37%

47%

5% 11%

Occupation

Services

Student

House Wife

Business

FACTORS AFFECTING PURCHASE

41%

23%

34%

2%

Type of car preferred

SedanHatchbackSUVOther

26%

54%

20%

Type of Engine preferred

PetrolDieselCNG

PRICE MILEAGE

LOOKS INTERIORS

SAFETY FEATURES SEATING CAPACITY

ENGINE PERFORMANCEACCESSORIES

AFTER-SALE SERVICES LONGEIVITY

STATUS SYMBOL

BRAND RECALL

26.23%

26.23%24.59%3.28%

4.92%

6.56% 8.20%

Brand Recalled

Maruti SuzukiHyundaiHondaFordTataM&MOthers

Factors Helping in Brand Recall

ACCESSORIES LOOKED FOR WHOM DO CONSUMERS CONSULT

COMPETITOR ANALISYS

Others

Hyundai

TATA

Maruti Suzuki

0 5 10 15 20 25 30

Company preferred for Price

Others

TATA

Hyundai

Maruti Suzuki

0 5 10 15 20 25 30

Company preferred for Mileage

Others

Audi

Volkswagen

Honda

0 5 10 15 20 25 30

Company preferred for Looks

Others

Audi

BMW

Mercedes Benz

0 5 10 15 20 25

Company preferred for Interiors

Others

Mercedes Benz

BMW

Toyota

0 2 4 6 8 10 12 14 16 18 20

Company preferred for Safety Features

Others

Audi

BMW

Mercedes Benz

0 5 10 15 20 25

Company preferrd as Status Symbol

Others

Mahindra & Mahindra

Toyota

Maruti Suzuki

0 5 10 15 20 25 30

Company preferred for Seating Capacity

Others

Maruti Suzuki

Hyundai

Toyota

0 5 10 15 20 25

Company preferred for Engine Per-formance

Others

Mercedes Benz

Skoda

Audi

0 5 10 15 20 25 30 35

Company preferred for Accessories

Others

Maruti Suzuki

Hyundai

General Motors

0 5 10 15 20 25

Company preferred for After-Sale Services

Others

Maruti Suzuki

Mahindra & Mahindra

Toyota

0 5 10 15 20 25

Company preferred from Longevity

Company preferred from Longevity

CONSUMER WITH OCCUPATION BUSINESS AND SERVICES:

ENGINE PREFERENCE

50%

39%

11%

diesel petrol cng

PREFERENCE WITH REFERENCE TO ANNUAL INCOME

hatchback sedan Suv0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

Preference reference to family annual incomAnnual income between 3-5 lakhs

hathchback sedan suv0123456789

10

Preference reference to family annual incom

Annual income between 5-8 lakhs

hatchback sedan suv sports0

1

2

3

4

5

6

7

8

Preference with reference to income

Annual income between 8-12 lakhs

hatchback sedan suv0

1

2

3

4

5

6

7

8Preference reference to annual income

Annual income below 3 lakhs

T-TEST FOR FACTORS AFFECTING PURCHASE DECISION WITH RESPECT TO GENDER

Factors Affecting Purchase Decision Significance Value

Price0.159

Mileage0.029

Looks0.303

Interiors0.464

Safety Features0.321

Seating Capacity0.319

Engine Performance0.169

Accessories0.078

After-Sale Services0.168

• Null Hypothesis(H0): The factors affecting the purchase decision are same for both males and females.

• Alternate Hypothesis(H1): The factors affecting the purchase decision are different for both males and females.

• From the Independent sample T test we see that the significance value for all factors is greater than 0.05 except for mileage. Hence, null Hypothesis is rejected in this case and we can conclude that there is a significant difference between perception of males and females with respect to mileage.

• From the mean values, we see that males give more value to mileage than females.

ANOVA TEST OF FACTORS AFFECTING PURCHASE DECISION WITH RESPECT TO AGE

Factors Affecting Purchase Decision In Respect To Age Significance Value

Price 0.697

Mileage 0.498

Looks 0.621

Interiors 0.085

Safety Features 0.001

Seating Capacity 0.382

Engine Performance 0.059

Accessories 0.269

After-Sale Services 0.697

• Null Hypothesis(H0): The factors affecting the purchase decision are same for people of all age groups.

• Alternate Hypothesis(H1): The factors affecting the purchase decision are different for people of different age groups.

• The significance value of all factors apart from Safety Features is greater than 0.05.

• Hence for all the age groups there is not much of a difference in important given for the various factors affecting the purchase decision apart from safety features.

• Safety Feature is a very important parameter for consumers above the age of 40 years.

ANOVA TEST OF FACTORS AFFECTING PURCHASE DECISION WITH RESPECT TO INCOME

Factors Affecting Purchase Decision In Respect To Income Significance Value

Price 0.597

Mileage 0.000

Looks 0.629

Interiors 0.000

Safety Features 0.481

Seating Capacity 0.056

Engine Performance 0.389

Accessories 0.728

After-Sale Services 0.240

• Null Hypothesis(H0): The factors affecting the purchase decision are same for people of all income groups.

• Alternate Hypothesis(H1): The factors affecting the purchase decision are different for people of different income groups.

• The significance value of all factors apart from Mileage and interiors is greater than 0.05.

• Hence for all the income groups there is not much of a difference in important given for the various factors affecting the purchase decision apart from mileage and interiors.

• Mileage is a very important parameter for consumers earning less than 5 lakhs.

• Interiors is an important parameter for consumers earning above 12 lakhs.

CONCLUSION• Mileage & Longevity are the most important factors which consumers consider before buying a car.

• Consumers prefer to buy sedans & diesel engines.

• Brand Logo & advertisements are the most important parameters that help consumers in recalling a brand.

• Brand ambassador does not affect the consumers to a great extent.

• Power Windows & Stereo Systems are the most preferred accessories for consumers.

• Use of social media forums for consultations is rising.

• Males give more value to mileage than females.

• Safety Features is the most important parameter for consumers above 40 years of age.

• Mileage is the most important factor for consumers with an annual income of less than 5 lakhs.

• Interiors is the most important factor for consumers with an annual income of more than 12 lakhs.