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8/6/2019 Amninder Singh Mahal
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Final Project Report
On
A study of Consumer perception
of foreign and Indian automobiles
in India.
Submitted to Punjab Technical University in partial
fulfillment of the requirements for the degree of
MASTER OF BUSINESS ADMINISTRATION(Specialization: Mark eting)
By
Amninder Singh Mahal
Roll no. - 7065222363
2007-09
Gian Jyoti Institute of Management andTechnology
MOHALI
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CERTIFICATE
This is to certify that Amninder Singh Mahal of MBA (IVth
Semester), student of Gian Jyoti Institute of Management and
Technology, Mohali has successfully completed his project titled A
study of consumer perception of foreign and Indian automobiles in
India under my supervision. This project is an original piece of
work and has not been copied from any other source. It further
certifies that this project has not been submitted to any other
Company/ University for any other purpose.
Dated: Mrs. ParamjeetKaur(Project Guide)
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ACKNOWLEDGEMENT
This humble endeavor bears the imprint of many persons who were
in one way or the other helpful in the completion of my final
research project. I would like to take this opportunity to present my
vote of thanks to my guide who acted as lighting pillars to enlighten
my way through out this project. This project would not have been
possible without the kind assistance and guidance of many peoplewho indeed were helpful, cooperative and kind during the entire
course of my project.
The acknowledgment would not be complete without expressing my
indebtedness to my Honble Chairman Sh. J.S Bedi and I express
my sincere thanks to Mrs. Paramjeet Kaur who guided me in this
project and was the constant source of reference for me and
showed full interest at each and every step of my project.
Amninder Singh Mahal
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TABLE OF CONTENTS
CHAPTER
NO. PA RTICULARS P AGE
NO.
1. IN TRODUCTION 1-46
2. REVIEW OF LI TERATURE 47-49
3. RESEARCH METH ODOLOGY 50-52
4. ANA LY SIS 53- 62
5. CONCLUSION & RECOMM ENDATI ONS 63 -65
BIBLIOGRAPHY 66
ANNEXURE 67 -68
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Chapter 1
INTRODUCTION
Economic growth over the past decade has transferred India into an
important commercial centre with a vibrant lucrative consumer
market. In recent years, India has become an attractive competitive
and fast growing market for companies around the world. The
liberalization policy followed by India after 1991 economic reforms
has given rise to the same condition for local and foreign
businesses. These developments have significantly enhanced and
affected Indias relationship with the international business
community.
With a young and rapidly growing large population base over 40%
larger than total population of many countries, India possesses a
small, very wealthy, western- oriented upper class and a sizable
and growing middle-class of salaried workers and small businessowners who are becoming major consumers of products. Therefore
this market has attracted significant attention from multinational
companies North America, Europe and Asia. To tap this potential
market, global marketers will require a comprehensive
understanding of Indian consumers.
As per capita income continues to grow, both disposable anddomestic consumption levels will fuel demand for more imports.
After the smokes of cold war between Western world and China,
Indian Market is the lenient policies followed by his democratic
country as against restricted policies of communist country like
China. The country of origin (COO) concept has come up with age.
With the spread of globalization, the need of has come with age.
With the spread of globalization, in the need of studying the impact
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of country of origin of product on its sales has increased
tremendously. The same type of product of different countries finds
different rating by different people.
In this project, an effort has been made to find the (COO) impact on
buying behavior of people. Here the respondents are students of
various colleges (PUNJABI UNIVERSITY, PATIALA) as more and
more countries are moving to other countries, it has become
extremely important for the manufacturing companies and the
marketers to find how the inhabitants of that particular country,
perceive their product. I this way they may be able to forecast thesales of their product to greater extant. Many studies have already
been undertaken on this concept but this particular study aims to
find out the forth-coming trend of car through the youth, because
ultimately they will be the future buyers. This project will not show
interest of educated students as in the near future they will
represent the major chunk of car owners.
This future car owners have different conceptions, expectations for
different countries i.e. India, Japan, Untied States that is surely
going to effect their sales in future.
Emerging markets in Asia and Latin America led advancers.
Venezuela, Russia and India led with a gain of 44%, 26% and 20%
respectively. Firm prices in commodities such as oil, iron ore and
metals supported the advances in Brazil, Mexico and Venezuela as
well. Rising corporate profits and consumers spending supported
index in India. Taiwan and South Korea delivered negative returns
for the quarter. Chief Economist at CLSA Jim Walker believes that
going ahead 2007 is likely to be tough year for global liquidity.
However, he adds that Indias economic growth could move to 9-
10%, and that Indias current account deficit is not a worry for now.
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Following India's growing openness, the arrival of new and existing
models, easy availability of finance at relatively low rate of interest
and price discounts offered by the dealers and manufacturers all
have stirred the demand for vehicles and a strong growth of theIndian automobile industry.
The data obtained from ministry of commerce and industry, shows
high growth obtained since 2003- 04 in automobile production
continuing in the first three quarters of the 2006-07. Annual growth
was 16.0 per cent in April-December, 2006; the growth rate in
2004-05 was 15.1 per cent. The automobile industry grew at acompound annual growth rate (CAGR) of 22 per cent between 1992
and 1997.
With investment exceeding Rs. 50,000 crore, the turnover of the
automobile industry exceeded Rs. 59,518 crore in 2005-06.
Including turnover of the auto-component sector, the automotive
industry's turnover, which was above Rs. 84,000 crore in 2005-06,
is estimated to have exceeded Rs.1,00,000 crore (USD 22. 74
billion) in 2005-06.
Rush of mid sized cars:
As part of its efforts to redefine the mid sized car segment, General
Motors India has rolled out Chevrolet Aveo, the first of three new
models of this class planned in the first six months of 2006.
This new sedan to be built at the GMs manufacturing facility at
Halol, Gujarat is designed with attractive styling incorporating
modern technology for extended comfort of the passengers. Having
notched up 17-18 percent growth last year, GM India would raisethe bar of performance and exceed the exceptions of customers
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with a series of launches, besides increasing the point of sales to
emerge as a big volume player in the market, said P Balendran, vice
president, Corporate Affairs, GM India.
Addressing a press conference on the eve of Aveo launch yesterday,
he said India ranked as privileged market as only few months after
this car was introduced in Shanghai it was now made available for
Indian customers. Available in 1.4 litre and 1.6 litre engines, the
Chevrolet Aveo was a global product that incorporated latest
technology to meet he highest standards of quality, he said, It has
been re-engineered based on extensive testing across the countryto meet the specific needs of our customers as well as local driving
conditions and regulations.
A crisp and modern exterior, wide stance, long wheelbase, power-
assisted steering and a performance enhanced by the companys
Variable Geometry Induction System (VGIS), which maximized
power and fuel efficiency of the car, have been the notable features
of Aveo.
Aveo is a key driver of the global expansion of Chevrolet. Following
its introduction, it is being rolled out in more than 140 countries
around the world, including several European markets and the US,
said Balendran.
Chervolet Aveo has the concept of a small car, with big design and
its enlarged wheelbase and body height increased the space of its
interior. The company would expand dealership network form the
present 77 to 110 sales points by the end of this year, and two
spare parts distribution centres would be set up in Maharashtra and
Delhi to supplement existing two such units in Gujrat and
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Tamilnadu. We also continue with extensive localization of our
product in order to reduce the price key of components.
In the last calendar year, GM India sold 30,000 units across brandsand this year the company has targeted to sell 50,000 units? Tavera
20,000, Optra 10,000, Aveo 20,000. We will also raising our
capacity at Halol Plant form the present 65,000 units per annum to
85,000 units by the end of 2006 that would need an investment of
around Rs.100 crore. The cumulative investments in GM India till
now stood at Rs. 1,380 crore.
Expressing optimism over the growth of entry-level sedan in the
Indian market, this segment posted 17 percent growth with sales of
161,000 units and was poised to record 24 percent growth this year
with sales expected at around 2 lakh units. Out of this growth, we
have targeted to net a market share of 10 percent. In the first two
months of this calendar, the entry-level sedan had been seen 25
per cent growth, as against overall industry growth of 6 per cent
only.
As the first of three new model of Chevrolet, Aveo is the forerunner
to other two cars, namely Aveo U-VA and Optra SRV, which would
be rolled out in the next few months. Having four variants in 1.4 lire
and 1.6 litre engine options, the ex-showroom
(Chennai) price ranges from Rs.5.67 Lakh to Rs.6.98 Lakh.
P layers Pro liferate:
The most visible aspect is the number of new manufacturers and
the spread of new products available in each sub-segment.
Importantly, apart from the once ubiquitous Ambassador from
Hindustan Motors, we now have top-selling models and home-
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grown brands such as the Tata Indica and Mahindra Scorpio. The
stellar performance of these products has also, in equal measure,
contributed to the expansion of the market. These `desi' companies
are now attempting to leave their footprints in markets abroad.
From sales of less than a lakh vehicles about a decade ago to
estimate sales of 7.2 lakh cars and utility vehicles this fiscal, the
industry has made a long haul. And these numbers have not just
come from small cars, but from the whole range of cars in the mid-
size, premium mid-size and super-luxury car segments.
It is a reflection of the attractiveness of the Indian car industry that
in addition to the presence of some of the biggest names in small
car technology such as Suzuki, Hyundai and Fiat, many of the high-
profile luxury brands such as Mercedes Benz, Bentley, BMW and
now Maybach and Audi are steering into India.
Diversity and Choice:
The renaissance, so to say, in the automobile industry happened
with the throwing open of the sector to overseas manufacturers
through the wholly owned subsidiary route. The credit for expanding
the car industry and discovering the market for small cars must go
to Maruti Udyog (MUL), which launched its Maruti 800 almost 20
years ago. With the entry of multinational car manufacturers,
particularly in the premium small car and mid-size sub-segments,
the industry has acquired greater diversity and choice. It also
enabled the building up of a strong manufacturing base, which
companies are now able to leverage for developing new products.
Small Car to Domin ate:
Interestingly, the still ubiquitous Maruti 800, the small car thatrevolutionised personal four-wheeled transportation in India,
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continues to be MUL's best seller. And yet, it is being debated if it
will be able to face the future. The segment will see more entrants
and a lot more technological inputs in future. As a result, the small
car segment will also continue to witness an expansion in terms of price spreads and in terms of varied trim-level positioning.
Expansio n in Mid-Size Cars:
There is the possibility of a similar market expansion in the mid-size
car segment. Near rock bottom interest rates for car financing and
competitive market forces have ensured that the affordability factor
for mid-size cars has dramatically increased.
For the first time, since the opening up of the car industry, sales of
mid-size passenger cars have crossed the one lakh mark this fiscal
and are set to close the year at an all time high.
Contemporary Features:
The combined attractiveness of the small car and mid-size
segments of the Indian car industry and the integration of Indian
emission standards with globally accepted emission norms are also
leading to the infusion of new technologies. The initial spate of cars,
especially in the small car segment, made radial tyres, air-
conditioning, power steering and side-impact protection standard
features today.
The car industry is foreseeing the possibility of emission and safety
related features such as anti-lock braking systems, common rail
injection, airbags and tiptronic transmission becoming standard
fitment in most mid-size cars, and even some premium small cars,
of the future. The new, highly aware Indian car buyer is also likely
to drive demand for new technologies.
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Strength in P arts:
The entry of new technology and the increased focus on costs
during the last few years amongst the existing manufacturers, who
have developed a strong vendor base in India, has ensured that the
component manufacturers have also had to retool their production
capacities to match global quality standards.
A number of multinational component manufacturers such as
Delphi, Visteon and Johnson Controls did set up base in India, but
the need for global quality standards amongst the local vendors
(then Tier II and Tier III suppliers) has enabled a number of Indian
companies to become Tier I suppliers. Some of them such as Bharat
Forge and Sundram Fasteners are also aspiring to become global
players through acquisitions abroad.
Beneficial Fragmentation:
With the entry of new manufacturers, the market is likely to becomeeven more fragmented. The car industry is, however, likely to
benefit from this in the form of greater depth, diversity and
increased market discovery. After all, not many of us knew that
there was such a large latent demand for small cars, until
manufacturers such as Hyundai, Fiat and Daewoo came to India in
the late 1990s.
And, as car sales near the magical one million mark, for all those
wondering where the roads are to accommodate the explosion in
car sales, you may take solace in the fact that the US too faced a
similar scenario, a few decades ago
As part of its efforts to redefine the mid sized car segment,General Motors India has rolled out Chevrolet Aveo, the first of
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three new models of this class planned in the first six months of
2006.
This new sedan to be built at the GMs manufacturing facility atHalol, Gujarat is designed with attractive styling incorporating
modern technology for extended comfort of the passengers. Having
notched up 17-18 percent growth last year, GM India would raise
the bar of performance and exceed the exceptions of customers
with a series of launches, besides increasing the point of sales to
emerge as a big volume player in the market, said P Balendran, vice
president, Corporate Affairs, GM India.
Addressing a press conference on the eve of Aveo launch yesterday,
he said India ranked as privileged market as only few months after
this car was introduced in Shanghai it was now made available for
Indian customers. Available in 1.4 litre and 1.6 litre engines, the
Chevrolet Aveo was a global product that incorporated latest
technology to meet he highest standards of quality, he said, It has
been re-engineered based on extensive testing across the country
to meet the specific needs of our customers as well as local driving
conditions and regulations.
A crisp and modern exterior, wide stance, long wheelbase, power-
assisted steering and a performance enhanced by the companys
Variable Geometry Induction System (VGIS), which maximized
power and fuel efficiency of the car, have been the notable features
of Aveo.
Aveo is a key driver of the global expansion of Chevrolet. Following
its introduction, it is being rolled out in more than 140 countries
around the world, including several European markets and the US,
said Balendran.
8/6/2019 Amninder Singh Mahal
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Chervolet Aveo has the concept of a small car, with big design and
its enlarged wheelbase and body height increased the space of its
interior. The company would expand dealership network form the
present 77 to 110 sales points by the end of this year, and twospare parts distribution centres would be set up in Maharashtra and
Delhi to supplement existing two such units in Gujrat and
Tamilnadu. We also continue with extensive localization of our
product in order to reduce the price key of components.
In the last calendar year, GM India sold 30,000 units across brands
and this year the company has targeted to sell 50,000 units? Tavera20,000, Optra 10,000, Aveo 20,000. We will also raising our
capacity at Halol Plant form the present 65,000 units per annum to
85,000 units by the end of 2006 that would need an investment of
around Rs.100 crore. The cumulative investments in GM India till
now stood at Rs. 1,380 crore.
Expressing optimism over the growth of entry-level sedan in the
Indian market, this segment posted 17 percent growth with sales of
161,000 units and was poised to record 24 percent growth this year
with sales expected at around 2 lakh units. Out of this growth, we
have targeted to net a market share of 10 percent. In the first two
months of this calendar, the entry-level sedan had been seen 25
per cent growth, as against overall industry growth of 6 per cent
only.
As the first of three new model of Chevrolet, Aveo is the forerunner
to other two cars, namely Aveo U-VA and Optra SRV which would
be rolled out in the next few months. Having four variants in 1.4 lire
and 1.6 litre engine options, the ex-showroom (Chennai) price
ranges from Rs.5.67 Lakh to Rs.6.98 Lakh.
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Classification of Cars:
Car classification is subjective since many vehicles fall into multiple
categories. Not all car types are sold in all countries and names for
the same vehicle can differ by region. The following are commonly
used classifications
CAR CLASSIFICATI ON
AMERICAN
ENGLISH
BRITISH
ENGLISH
SEGMENT EURONCAP EXAMPLE
Microcar Microcar ,
Bubble car
- - Smart Fortwo
- City car A class Fiat Panda
Subcompact
car
Supermini B class
Supermini
Hyundai
Accent
Compact car Small
family car
C class Small
family car
Ford Focus
Mid-size car Large
family car
Volkswagen
Passat
Entry-level
luxury car
Compact
executive
car
D class Large
family car
Audi A4
http://en.wikipedia.org/wiki/American_Englishhttp://en.wikipedia.org/wiki/American_Englishhttp://en.wikipedia.org/wiki/British_Englishhttp://en.wikipedia.org/wiki/British_Englishhttp://en.wikipedia.org/wiki/EuroNCAPhttp://en.wikipedia.org/wiki/Microcarhttp://en.wikipedia.org/wiki/Bubble_carhttp://en.wikipedia.org/wiki/Smart_Fortwohttp://en.wikipedia.org/wiki/City_carhttp://en.wikipedia.org/w/index.php?title=A-segment&action=edithttp://en.wikipedia.org/wiki/Fiat_Pandahttp://en.wikipedia.org/wiki/Subcompact_carhttp://en.wikipedia.org/wiki/Subcompact_carhttp://en.wikipedia.org/wiki/Supermini_carhttp://en.wikipedia.org/wiki/B-segmenthttp://en.wikipedia.org/wiki/Hyundai_Accenthttp://en.wikipedia.org/wiki/Hyundai_Accenthttp://en.wikipedia.org/wiki/Compact_carhttp://en.wikipedia.org/wiki/Small_family_carhttp://en.wikipedia.org/wiki/Small_family_carhttp://en.wikipedia.org/wiki/C-segmenthttp://en.wikipedia.org/wiki/Ford_Focushttp://en.wikipedia.org/wiki/Mid-size_carhttp://en.wikipedia.org/wiki/Large_family_carhttp://en.wikipedia.org/wiki/Large_family_carhttp://en.wikipedia.org/wiki/Volkswagen_Passathttp://en.wikipedia.org/wiki/Volkswagen_Passathttp://en.wikipedia.org/wiki/Entry-level_luxury_carhttp://en.wikipedia.org/wiki/Entry-level_luxury_carhttp://en.wikipedia.org/wiki/Compact_executive_carhttp://en.wikipedia.org/wiki/Compact_executive_carhttp://en.wikipedia.org/wiki/Compact_executive_carhttp://en.wikipedia.org/w/index.php?title=D-segment&action=edithttp://en.wikipedia.org/wiki/Audi_A4http://en.wikipedia.org/wiki/Audi_A4http://en.wikipedia.org/wiki/Compact_executive_carhttp://en.wikipedia.org/wiki/Compact_executive_carhttp://en.wikipedia.org/wiki/Compact_executive_carhttp://en.wikipedia.org/wiki/Entry-level_luxury_carhttp://en.wikipedia.org/wiki/Entry-level_luxury_carhttp://en.wikipedia.org/wiki/Volkswagen_Passathttp://en.wikipedia.org/wiki/Volkswagen_Passathttp://en.wikipedia.org/w/index.php?title=D-segment&action=edithttp://en.wikipedia.org/wiki/Large_family_carhttp://en.wikipedia.org/wiki/Large_family_carhttp://en.wikipedia.org/wiki/Mid-size_carhttp://en.wikipedia.org/wiki/Ford_Focushttp://en.wikipedia.org/wiki/C-segmenthttp://en.wikipedia.org/wiki/Small_family_carhttp://en.wikipedia.org/wiki/Small_family_carhttp://en.wikipedia.org/wiki/Compact_carhttp://en.wikipedia.org/wiki/Hyundai_Accenthttp://en.wikipedia.org/wiki/Hyundai_Accenthttp://en.wikipedia.org/wiki/B-segmenthttp://en.wikipedia.org/wiki/Supermini_carhttp://en.wikipedia.org/wiki/Subcompact_carhttp://en.wikipedia.org/wiki/Subcompact_carhttp://en.wikipedia.org/wiki/Fiat_Pandahttp://en.wikipedia.org/w/index.php?title=A-segment&action=edithttp://en.wikipedia.org/wiki/City_carhttp://en.wikipedia.org/wiki/Smart_Fortwohttp://en.wikipedia.org/wiki/Bubble_carhttp://en.wikipedia.org/wiki/Microcarhttp://en.wikipedia.org/wiki/Microcarhttp://en.wikipedia.org/wiki/EuroNCAPhttp://en.wikipedia.org/wiki/British_Englishhttp://en.wikipedia.org/wiki/British_Englishhttp://en.wikipedia.org/wiki/American_Englishhttp://en.wikipedia.org/wiki/American_English8/6/2019 Amninder Singh Mahal
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Full-size car Chrysler 300
Mid-size
luxury car
Executive
car
E class Executive
car
BMW 5
Series
Full-size
luxury car
Luxury car F class - Mercedes-
Benz S-Class
Sports car Sports car - - Porsche 911
Grand tourer Grand
tourer
- - Jaguar XK
Supercar Supercar - - Ferrari F50
Convertible Cabriolet - - BMW 3
Series
Roadster Roadster - Roadster BMW Z4
- Leisure
activity
vehicle
B class Peugeot
Partner
- Mini MPV B class Opel Meriva
Compact
minivan
Compact
MPV
C class
Small MPV
Mazda5
http://en.wikipedia.org/wiki/Full-size_carhttp://en.wikipedia.org/wiki/Chrysler_300http://en.wikipedia.org/wiki/Mid-sizehttp://en.wikipedia.org/wiki/Luxury_vehiclehttp://en.wikipedia.org/wiki/Executive_carhttp://en.wikipedia.org/wiki/Executive_carhttp://en.wikipedia.org/w/index.php?title=E-segment&action=edithttp://en.wikipedia.org/wiki/BMW_5_Serieshttp://en.wikipedia.org/wiki/BMW_5_Serieshttp://en.wikipedia.org/wiki/Full-sizehttp://en.wikipedia.org/wiki/Luxury_vehiclehttp://en.wikipedia.org/w/index.php?title=F-segment&action=edithttp://en.wikipedia.org/wiki/Mercedes-Benz_S-Classhttp://en.wikipedia.org/wiki/Mercedes-Benz_S-Classhttp://en.wikipedia.org/wiki/Sports_carhttp://en.wikipedia.org/wiki/Porsche_911http://en.wikipedia.org/wiki/Grand_tourerhttp://en.wikipedia.org/wiki/Jaguar_XKhttp://en.wikipedia.org/wiki/Supercarhttp://en.wikipedia.org/wiki/Ferrari_F50http://en.wikipedia.org/wiki/Convertiblehttp://en.wikipedia.org/wiki/Cabriolethttp://en.wikipedia.org/wiki/BMW_3_Serieshttp://en.wikipedia.org/wiki/BMW_3_Serieshttp://en.wikipedia.org/wiki/Roadsterhttp://en.wikipedia.org/wiki/BMW_Z4http://en.wikipedia.org/wiki/Leisure_activity_vehiclehttp://en.wikipedia.org/wiki/Leisure_activity_vehiclehttp://en.wikipedia.org/wiki/Leisure_activity_vehiclehttp://en.wikipedia.org/wiki/Peugeot_Partnerhttp://en.wikipedia.org/wiki/Peugeot_Partnerhttp://en.wikipedia.org/wiki/Mini_MPVhttp://en.wikipedia.org/wiki/Opel_Merivahttp://en.wikipedia.org/wiki/Compact_MPVhttp://en.wikipedia.org/wiki/Compact_MPVhttp://en.wikipedia.org/wiki/Mazda_Premacyhttp://en.wikipedia.org/wiki/Mazda_Premacyhttp://en.wikipedia.org/wiki/Compact_MPVhttp://en.wikipedia.org/wiki/Compact_MPVhttp://en.wikipedia.org/wiki/Opel_Merivahttp://en.wikipedia.org/wiki/Mini_MPVhttp://en.wikipedia.org/wiki/Peugeot_Partnerhttp://en.wikipedia.org/wiki/Peugeot_Partnerhttp://en.wikipedia.org/wiki/Leisure_activity_vehiclehttp://en.wikipedia.org/wiki/Leisure_activity_vehiclehttp://en.wikipedia.org/wiki/Leisure_activity_vehiclehttp://en.wikipedia.org/wiki/BMW_Z4http://en.wikipedia.org/wiki/Roadsterhttp://en.wikipedia.org/wiki/BMW_3_Serieshttp://en.wikipedia.org/wiki/BMW_3_Serieshttp://en.wikipedia.org/wiki/Cabriolethttp://en.wikipedia.org/wiki/Convertiblehttp://en.wikipedia.org/wiki/Ferrari_F50http://en.wikipedia.org/wiki/Supercarhttp://en.wikipedia.org/wiki/Jaguar_XKhttp://en.wikipedia.org/wiki/Grand_tourerhttp://en.wikipedia.org/wiki/Porsche_911http://en.wikipedia.org/wiki/Sports_carhttp://en.wikipedia.org/wiki/Mercedes-Benz_S-Classhttp://en.wikipedia.org/wiki/Mercedes-Benz_S-Classhttp://en.wikipedia.org/w/index.php?title=F-segment&action=edithttp://en.wikipedia.org/wiki/Luxury_vehiclehttp://en.wikipedia.org/wiki/Full-sizehttp://en.wikipedia.org/wiki/BMW_5_Serieshttp://en.wikipedia.org/wiki/BMW_5_Serieshttp://en.wikipedia.org/wiki/Luxury_vehiclehttp://en.wikipedia.org/wiki/Mid-sizehttp://en.wikipedia.org/wiki/Chrysler_300http://en.wikipedia.org/w/index.php?title=E-segment&action=edithttp://en.wikipedia.org/wiki/Executive_carhttp://en.wikipedia.org/wiki/Executive_carhttp://en.wikipedia.org/wiki/Full-size_car8/6/2019 Amninder Singh Mahal
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Minivan Large MPV D class MPV Toyota
Previa
Mini SUV Mini 4x4 B class Suzuki SX4
Compact SUV Compact
4x4
C/D class
Small Off-
Roader
Honda CR-V
Mid-size
crossoverSUV
Large 4x4 E class BMW X5
Mid-size SUV E class Jeep Grand
Cherokee
Full-size SUV
Off-roader
-
Large Off-
Roader
Cadillac
Escalade
About SUV:
A sport utility vehicle , or SUV is a passenger vehicle which
combines the towing capacity of a pickup truck with the passenger-
carrying space of a minivan or station wagon . Most SUVs are
designed with a roughly square cross-section , an engine
compartment, a combined passenger and cargo compartment, and
no dedicated trunk. Most mid-size and full-size SUVs have three
rows of seats with a cargo area directly behind the last row of seats.
Compact SUVs and mini SUVs , such as the Toyota RAV4 and Suzuki
Vitara , may have five or fewer seats.
http://en.wikipedia.org/wiki/Minivanhttp://en.wikipedia.org/wiki/Large_MPVhttp://en.wikipedia.org/wiki/Toyota_Previahttp://en.wikipedia.org/wiki/Toyota_Previahttp://en.wikipedia.org/wiki/Mini_SUVhttp://en.wikipedia.org/wiki/Suzuki_SX4http://en.wikipedia.org/wiki/Compact_SUVhttp://en.wikipedia.org/wiki/Honda_CR-Vhttp://en.wikipedia.org/wiki/Mid-sizehttp://en.wikipedia.org/wiki/BMW_X5http://en.wikipedia.org/wiki/Sport_utility_vehiclehttp://en.wikipedia.org/wiki/Jeep_Grand_Cherokeehttp://en.wikipedia.org/wiki/Jeep_Grand_Cherokeehttp://en.wikipedia.org/wiki/Full-sizehttp://en.wikipedia.org/wiki/Sport_utility_vehiclehttp://en.wikipedia.org/wiki/Cadillac_Escaladehttp://en.wikipedia.org/wiki/Cadillac_Escaladehttp://en.wikipedia.org/wiki/Passenger_vehiclehttp://en.wikipedia.org/wiki/Towing_capacityhttp://en.wikipedia.org/wiki/Pickup_truckhttp://en.wikipedia.org/wiki/Minivanhttp://en.wikipedia.org/wiki/Station_wagonhttp://en.wikipedia.org/wiki/Cross_section_%28geometry%29http://en.wikipedia.org/wiki/Compact_SUVhttp://en.wikipedia.org/wiki/Mini_SUVhttp://en.wikipedia.org/wiki/Toyota_RAV4http://en.wikipedia.org/wiki/Suzuki_Vitarahttp://en.wikipedia.org/wiki/Suzuki_Vitarahttp://en.wikipedia.org/wiki/Suzuki_Vitarahttp://en.wikipedia.org/wiki/Suzuki_Vitarahttp://en.wikipedia.org/wiki/Toyota_RAV4http://en.wikipedia.org/wiki/Mini_SUVhttp://en.wikipedia.org/wiki/Compact_SUVhttp://en.wikipedia.org/wiki/Cross_section_%28geometry%29http://en.wikipedia.org/wiki/Station_wagonhttp://en.wikipedia.org/wiki/Minivanhttp://en.wikipedia.org/wiki/Pickup_truckhttp://en.wikipedia.org/wiki/Towing_capacityhttp://en.wikipedia.org/wiki/Passenger_vehiclehttp://en.wikipedia.org/wiki/Cadillac_Escaladehttp://en.wikipedia.org/wiki/Cadillac_Escaladehttp://en.wikipedia.org/wiki/Sport_utility_vehiclehttp://en.wikipedia.org/wiki/Full-sizehttp://en.wikipedia.org/wiki/Jeep_Grand_Cherokeehttp://en.wikipedia.org/wiki/Jeep_Grand_Cherokeehttp://en.wikipedia.org/wiki/Sport_utility_vehiclehttp://en.wikipedia.org/wiki/BMW_X5http://en.wikipedia.org/wiki/Mid-sizehttp://en.wikipedia.org/wiki/Honda_CR-Vhttp://en.wikipedia.org/wiki/Compact_SUVhttp://en.wikipedia.org/wiki/Suzuki_SX4http://en.wikipedia.org/wiki/Mini_SUVhttp://en.wikipedia.org/wiki/Toyota_Previahttp://en.wikipedia.org/wiki/Toyota_Previahttp://en.wikipedia.org/wiki/Large_MPVhttp://en.wikipedia.org/wiki/Minivan8/6/2019 Amninder Singh Mahal
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It is known in some countries as an off-road vehicle or four-
wheel drive , often abbreviated to 4WD or 4x4 , and pronounced
"four-by-four". However, not all SUVs have four-wheel drive
capabilities (see Mazda Tribute , for example). Conversely, not all4WD passenger vehicles are SUVs (see, for example, Subaru
Impreza ).
More recently, manufacturers have responded to buyer's complaints
that SUVs "drive like trucks" and demands for "carlike ride" with a
new type of SUV. A new category, the crossover SUV uses car
design and components for lighter weight and better fuel efficiency ,but is no longer designed or recommended by the manufacturer for
off-road usage or towing.
Common Features Include:
High ride height and seating position
Utilitarian/High drag body configuration
High capacity engine
Long-travel suspension (for off road/rough road use)
High load and tow capacity
Large interior cabin space
5-7 Seats
4WD , or the ability to be equipped with 4WD
Due to consumer trends, several companies now also produce
crossover SUV models, based on a unibody architecture e.g. Toyota
RAV4. Typically, these models are lighter and more fuel efficient
than traditional SUVs. Crossover models sacrifice off road features
and load capacity for a performance/ride experience more closely
http://en.wikipedia.org/wiki/Off-road_vehiclehttp://en.wikipedia.org/wiki/Four-wheel_drivehttp://en.wikipedia.org/wiki/Four-wheel_drivehttp://en.wikipedia.org/wiki/4x4http://en.wikipedia.org/wiki/Mazda_Tributehttp://en.wikipedia.org/wiki/Subaru_Imprezahttp://en.wikipedia.org/wiki/Subaru_Imprezahttp://en.wikipedia.org/wiki/Crossover_SUVhttp://en.wikipedia.org/wiki/Automobilehttp://en.wikipedia.org/wiki/Fuel_efficiencyhttp://en.wikipedia.org/wiki/Four-wheel_drivehttp://en.wikipedia.org/wiki/Unibodyhttp://en.wikipedia.org/wiki/Unibodyhttp://en.wikipedia.org/wiki/Four-wheel_drivehttp://en.wikipedia.org/wiki/Fuel_efficiencyhttp://en.wikipedia.org/wiki/Automobilehttp://en.wikipedia.org/wiki/Crossover_SUVhttp://en.wikipedia.org/wiki/Subaru_Imprezahttp://en.wikipedia.org/wiki/Subaru_Imprezahttp://en.wikipedia.org/wiki/Mazda_Tributehttp://en.wikipedia.org/wiki/4x4http://en.wikipedia.org/wiki/Four-wheel_drivehttp://en.wikipedia.org/wiki/Four-wheel_drivehttp://en.wikipedia.org/wiki/Off-road_vehicle8/6/2019 Amninder Singh Mahal
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matching that of a large model family car, while maintaining much
of the appearance of a traditional SUV, these crossovers are not
SUVs in the literal sense.
The I nnovator's P rescription: The Relevance of
Brand R elevance:
New P roduct Categories can Subvert Incumb ent
Brands or Give Them a New
Lease on Life.
Business revolutions once had a bit of
continuity to them. The Industrial
Revolution lasted for decades, the
postindustrial revolution had a solid 20-
year run, and even the dot-com revolution
persevered for a good five years. But
business and consumer marketers in 2004
dont seem to have even that much luxury.From beverages and snack foods to
computers and consulting, the marketplace
for nearly every product or service today is undergoing continuous
change. Consumers and corporate buyers, more mobile and better
informed than ever before, are increasingly able to get precisely
what they want when they want it, at the price theyre willing to
pay. To meet these exacting desires, new and different productsand services appear unceasingly. Entirely new categories and
subcategories come into existence almost overnight, as existing
ones change or fade.
Illustration Dan Page,
2004
To succeed in this fast-moving environment, management must pay
attention to a new and, for most, unfamiliar attribute of the
companys products, services, and brands: their relevance.
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Relevance is fundamentally different from the characteristics
conventionally associated with a brands potency. All too often, a
brand seems strong because tracking studies show that it retains a
high level of trust, esteem, perceived quality, and maybe evenperceived innovativeness. Customers remain satisfied and loyal.
However, its market share may be slipping perhaps significantly
and fewer customers, particularly new customers, are considering
it. Conventional marketing theory and practice have difficulty
explaining this paradox.
Experience and research are now showing that a brand in declineoften is in trouble not because of an intrinsic problem, but because
the product category or subcategory with which it is associated is
fading undermined, augmented, replaced, or subsumed by a
new, faster-growing category. Older brands may actually be
inappropriate for the new category.
Brand management in the past focused on achieving preference on
the basis of differentiation, benefits, and customer satisfaction
within a set of brands under consideration for a given application.
But in todays environment, unless a brand can maintain its
relevance as categories emerge, change, and fade, narrow
application preference may not be sufficient. AOL faces a relevance
challenge with seasoned Internet users in the broadband category
because of its legacy as a friendly interface for new users in thedialup category. Hardware, paint, and flooring stores have struggled
to remain relevant as The Home Depot and Lowes, with their broad
selection of products and services, have subsumed existing
categories and, in effect, created a new kind of brand.
The relevance problem is apparent in categories as soft as fashion
and as hard as manufacturing. Imagine you were an automaker
15 years ago with a leading brand in the minivan category. As the
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category of sport utility vehicles (SUVs) emerged, it attracted a
segment of buyers who previously might have considered buying a
minivan. These potential SUV buyers still respected your minivan
and believed it offered the best quality and value on the market;they may even have loved it and recommended it to friends
interested in a minivan. But because this segments changing needs
prompted its interest in an SUV, your brand, so identified with
minivans, was irrelevant to it. This may have been true even if your
company also made SUVs or had an SUV sub-brand, because
customers interested in the new category will not consider brands
that have not developed interest and credibility within thatcategory.
The challenge of brand relevance is akin to the challenge of
innovation articulated by Clayton M. Christensen in The Innovators
Dilemma : When New Technologies Cause Great Firms to fail
(Harvard Business School Press, 1997). Professor Christensen
showed how industry leaders often are caught unawares bydisruptive innovations precisely because they focus too closely on
their most profitable customers and businesses, ignoring niche
offerings for low-value subordinate segments that have the ability
to grow in strength and value. Brand managers, likewise, are often
blindsided by changing product categories precisely because they
focus too closely on the traditional attributes of brands within their
old categories. Their ultimate tragedy is to achieve brilliance increating preference and differentiation, only to have that effort
wasted because of a relevance problem.
Brand relevance is an oft-used phrase, but it generally has not
been well defined or explained. Fortunately, there is a simple model
that executives can use to assess their brands relevance, and to
evaluate emerging product categories and subcategories. After
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A distinction should be made between categories associated with a
brand and brands associated with a category. Knowing which
categories are associated with the brand is actually not very
important. The key is determining which brands are associated withthe product category or subcategory. Those are the brands that
pass the relevance test. To be relevant, a brand should at least be
recalled without aid. Simple recognition when a customer
identifies from a provided list brands associated with a particular
product category or subcategory is generally too weak a
measure. (In fact, brands with high recognition and low recall are
often termed graveyard brands.)
However prominent a brand might be, though, visibility is not
enough to keep it relevant. Thanks to the rapid pace of global
technology transfer, capital flows, and communications streams,
product categories and subcategories can come into existence and
disappear with startling speed. Because new categories can
represent strategically important threats or opportunities,marketers have to be very attentive to the forces that drive their
emergence. There are seven such dynamics.
A new product or service dimension expands the
boundaries of an existing category:
By personalizing and improving service, the Saturn and Lexusautomotive brands changed the way customers interacted with car
dealers, creating a new product subcategory that made other
brands less relevant to a segment of consumers.
In both cases, GM (Saturns owner) and Toyota (creator of Lexus)
felt that new brand names were needed to support the novel dealer
experience that in part defined the subcategory. In the yogurt
business, the eat-on-the-go trend led Yoplait to develop Go-Gurt,
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delivered in a colorful nine-inch tube designed to enhance
portability and to appeal to kids. Go-Gurt helped Yoplait forge ahead
of Danones Dannon, a brand it had trailed for decades. A new
subcategory had been created in which Dannon was not relevant.
A new product or set of products carves out a fresh
niche in an existing category:
The energy-bar market created by PowerBar ultimately fragmented
into a variety of subcategories, including those directed at specific
segments (e.g., Luna bars for women) and some possessing specific
attributes (such as the protein-associated Balance and the calorie-
control bar Pria). Each represented a subcategory for which the
original PowerBar was not relevant. New subcategories can also be
defined by new and distinct applications. Bayer Aspirin, for
example, recognized a new application heart-attack prevention
and created a subcategory with its Aspirin Regimen Bayer Adult Low
Strength 81mg, which has an enteric safety coating to preventstomach upset.
A new competitor devises a way to bundle existing
categories into a super category.
In the late 1990s, Siebel created Internet-based customer
relationship management software by pulling together a host of applications, including customer loyalty programs, customer
acquisition, call centers, customer service, customer contact, and
sales force automation. In doing so, Siebel rendered irrelevant, for
some customers, the more specialized programs of competitors.
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A new competitor repositions existing products or
services to create an original category:
Starbucks reshaped the coffee retail experience by positioning itsoutlets as the third place (after home and office) to define a
persons day. The use experience involved aroma, a break from
routine, an affordable luxury, social interaction, and some self-
expressive benefit from the appreciation of great coffee. In the
U.K., Ford positioned its Galaxy minivan in relation to first-class air
travel comfortable enough to be suitable for busy executives. By
highlighting attributes far different from those that would appeal toa buyer looking for a family vehicle, the automaker created a new
minivan subcategory.
Customer needs propel a new product category or
subcategory:
Dual trends wellness and the use of herbs and naturalsupplements have supported a huge new beverage category,
healthy refreshment beverages. It now contains a host of
subcategories, including enhanced teas, fruit drinks, soy-based
drinks, and specialty waters. The pioneer and category leader is
SoBe, which started in 1996 with SoBe Black Tea 3G with ginseng,
ginkgo, and guarna, and now has an extensive line of teas, juices,
and energy drinks.
A new technology leads the development of a
product category or su bcategory.
Asahi reshaped the Japanese beer market by introducing an
innovative brewing process that reduced body and bitterness
while increasing alcohol content. Its new product, Asahi Super Dry,had a very different taste from that of other Japanese lagers, and
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generated a new category, dry beer. As a result, Kirin, for decades
the leading brand, with a dominant 60 percent share of market,
suddenly was not relevant for the many customers attracted to the
new category. Asahis market share 8 percent when Super Drywas launched in 1986 rose continually until it took share
leadership in 1998.
A com pany exploits changing technologies to invent
a new category:
EBAY Inc. created the online auction category by envisioning a
service impossible until the advent of the World Wide Web a
national (and subsequently global) real-time auction market for
myriad types of goods, from used guitars to new houses. Although
imitators have cropped up, they have had difficulty positioning
themselves as acceptable alternatives because of eBays operational
performance, its critical mass of users, and its authenticity as the
original category leader. TiVo Inc. created a new category for hometelevision viewing by combining the personal video player, a
computer hard drive, and an electronic program guide, changing the
way people watch television. Any new entrant has to define itself
with respect to TiVo.
The Relevance Challenge:
Becoming a trend responder is within the range of most companies
abilities. L.L. Bean has evolved its brand from its original base of
hunters, fishermen, and campers to become relevant for hikers,
mountain bikers, cross-country skiers, and water-sports
enthusiasts. Fuji Film was quick to becoming a leading digital-
imaging brand with its Super CCD high-quality sensor for digital
cameras. AOL may face challenges adapting its brand to thebroadband era, but its even older corporate sibling, Time Warner,
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has managed to become a top broad brand with its Road Runner
high-speed Internet access service.
But trend responsiveness carries its own set of risks. The drive to
maintain relevance can prompt a company to chase too many
subcategories, both real and imagined, resulting in a diffused,
ineffective, and expensive strategy. Response must be guided by
serious analyses. Is the opportunity large enough to justify? Is it
defensively necessary? Is the trend real, or is it a fad is it MP3, or
merely eight-track? Does the firm have the ability to develop the
skills needed to compete? Does it have the brand assets needed?
Companies need capabilities beyond the detection and evaluation of
emerging subcategories. They require creative, powerful new
offerings; entering an emerging category without them is more
likely to waste resources than to create relevance. A brand strategy
may require developing a new brand, an endorsed brand, or a sub-
brand to carry the flag. If the necessary brand assets are not
available, they need to be built or acquired. Finally, staying relevant
in dynamic environments can require an organization to become
more outward looking, customer focused, flexible, and nimble
perhaps the toughest challenge of all.
Small Cars by Toyota:
Chennai, March 29: Toyota-Kirloskar Motor Pvt. Ltd. may enter the
small car segment around 2010, a top official of the company has
said. Talking to new men after inaugurating Toyotas 55 th dealer
show room here, ToyokikoIno, Director, Marketing Group, said here
last evening that as the companys market share in India was
increasing, it planned to increase its dealership network to 60 by
the middle of this year.
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Cities including Rajkot, Madurai, Amritsar and Bhopal would be
added to dealership network shortly. The company maintained 20
per cent share in the country in premium and luxury segment.
The response for Innova in the utility vehicle segment was
encouraging and it has captured 32 percent market share. The
executive car, Toyota Corolla has achieved a market share of 35
percent.
Dismissing reports for that the company planned to expand its
percent manufacturing facility, he said: We neither plan to expandour facility at Bangalore nor start a new facility elsewhere in the
country. He also said the company had no plans to export cars
also, though an agent had sold six units in Nepal.
Trends expected in upper class:
Chennai: Daimler Chrysler India feels that the growing number of
younger generation buyers of its cars, especially the C Class, will
help it maintain its growth this year too. The company believes that
sales in the southern region not just in Banglore, Chennai and
Hyderabad, but also in the secondary cities- will grow faster given
the dynamism in the regions economy.
Luxu ry Car Segment:Unveiling the new S-Class and the new M-class vehicles at a
Mercedes-Benz Brand Showcase when other models like the SLK,
the CLS and the Maybach were displayed.
This segment now lagged behind Thailand, where the size was
between 4,000 and 6,000 units a year, and China, where it was
almost 15,000 a year, mainly because India was slow in liberalizing.
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However, he was confident that the Indian Luxury car market too
would catch up.
BMW s entry:
On what the entry of BMW into the Indian car market meant for the
company and the luxury car segment, Dr. Aulbur expected the
market to grow. Daimler Chryslers market share, now 99 percent,
would be Slightly affected but the numbers would continue.
South Indian Annexation by Different Car
Manufacturers:
On what the entry of BMW into the India, the German based
luxury car maker, unveiled the latest edition of the Mercedes Benz
S-class and M-Class vehicles here yesterday.
The company is keen towards developing its share in the South
Indian market. Since the southern market is responsible for twenty
five percent of the sales and the two tier cities are growing fast in
this region the South Indian market is becoming important.
D.M. is committed to offer our customers to the latest products in
the least possible time. The new S-class unveiled today is parallel tothe US market launch and clearly demonstrates Daimler Chryslers
seriousness about the Indian market.
The company was growing at CAGR of 17 percent in India and has
sold 15,000 cars in the Indian market after starting its operations in
the country ten years ago.
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Daimler Chrysler has sold about 137 units this year till February and
about 2019 cars in 2005. While 35 percent of the total sales for the
company came from the North, 30 percent was from West, 25 from
South and 10 percent from the East.
Cars In I ndia:
Maruti alto is said to be the most preferred car, as it has secured
about 50% sales of maruti alone.
Coming in at No.2 is the Maruti 800, which is known as the bread
and butter of the company. Maruti 800 is still a favorite small car
of many customers and has secured around 25 percent share in the
total sales and booking, said Parag Ohol, Sales Manger of
Chowgule Industries Ltd., an authorized dealer of Maruti cars.
Zen, the production of which has been discontinued by Maruti, is
still popular with buyers, though the corporate purchases of this
model have suffered to some extent, Somu Sen, Sales Manager,
Kothari Whales, said, some Zen aspirants have started considering
other option such as the Wagon R or the Swift LXI, Sen added
Hyundais small car Santro prices dropped by over Rs 20, 000 after
the Budget. Growth projections for the financial year of santro are
also on the upside as the production of Santro increases with an
additional shift and the company targets a 28 percent market share
against the current 21 percent. He said, We are targeting 40
percent growth rate this year.
W hy India:
INTEREST RATE NEW DELHI: Finance Minister P.C. Chidambaram on
Friday said that the Reserve Bank of India (RBI) addressing the
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liquidity issue, the rates of interest would remain attractive for both
depositors and borrowers.
In an interaction with newspersons on the sidelines of PunjabNational Bank (PNB) function here, Mr. Chidambaram said: These
[hardening and softening of interest rates] will remain attractive to
both depositors and borrowers.
Pointing out the higher rates of interest reflected the rising demand
for credit in the economy, Mr. Chidambaram said, No one in the
Government can say rising credit demand is bad or too much, asthe demand for credit was reflection of the increasing fund
requirements of various sectors of the economy. In effect, the issue
that to be addressed was the supply side of credit, he said.
As far the problem of liquidity of making more funds available in
the system [the] RBI is seized of the issue. I am totally confident
that [the] RBI will address the issue of supply side of the credit,
the Finance Minister said, RBI, Mr. Chidambaram said, had already
taken the initial step towards tackling the liquidity issue by way of
permitting banks to raise NRI (Non-Resident Indian) deposit rates
while nothing that the central bank Governor was competent person
to handle the problem of credit shortage.
In fact, the Government and the RBI were already seized of the
matter and a few steps had already been taken to partly tide over
the problem prior to the quarterly monetary review by the central
bank on April 18, A meeting between bankers and RBI Governor
Y.V.Reddy to discuss the liquidity issue was followed up with
another meeting with Mr. Chidambaram and the chiefs of public
sector banks.
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While the already-effected hike in NRI deposit rates was one of the
suggestions put forward by the Indian Banks Association (IBA),
some of the other proposals to tackle the problem were a reduction
in the cash reserve ratio (CRR) along with utilization of the excessStatutory Liquidity Ratio (SLR).
Speaking at the PNB function, Mr. Chidambaram said there was a
need to strike a balance between the demand of depositors and
borrowers. In particular, to sustain the high economic growth rate
being witnessed since the third quarter of 2004-05, the supply of
credit had to be increased to raise the investment rate, he said
Mr. Chidambaram conceded that there was a wide mismatch
between the demand and supply of credit in the while the growth in
lending thus far in the current fiscal has been 30 percent, deposits
had gone up by a mere 16 percent. To bridge this gap , he said,
ways and means had to be devised to maintain the investment rate.
Mr. Chidambaram also exhorted banks to improve the quality of
credit and hoped that they would raise more funds from the market
following the recent RBI guidelines on hybrid loans. The function
was organized by PNB to mark the launch of its 2000 th centralized
banking branch. In a years time, the bank linked 1,000 branches to
the centralized network.
Major Pow er
US + China + India > 50% economic grow th
By 2020, the combined forces of the United States, China and India
will account for more than 50 percent of all new economic growth,
according to a just issued Economist Intelligence Unit (EIU) report.
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Among EI Us predictions
Globalization of companies will increase, and there will
be sizeable growth in global economic output, but only
15 percent increase in the work force. Chinas economy will be on par with the United States
by 2020, and will have the second largest consumer
market and the largest tech sector. Asias over all share of the global economy will rise to
43 percent from its current 35 percent. India will contribute 30 percent, or 142 million, of the
new workers entering the global work force. The US will contribute 12.5 million new workers, and
the overwhelming majority of new jobs will be in the
service industry. The EIU report was sponsored by Cisco
Systems.
Emerging India
In vesting in Asia: A N ew Middle Class-
That Asia can become the engine of global economic growth is a
recurring concept in the relevant literature, a theory floated
variously throughout the centuries without yielding tangible results.
Based on a perceived inability of the region to deliver on its
potential, many people, professional, and investors included-resistthe idea that Asia can develop a sustainable, consumer-based
economic growth model. Such resistance is rooted in the regions
well documented dependence on exports to the developed
Western economies. Asia, in this construct, will remain a volatile
investment proxy to global economic growth, stuck in a perpetual
boom-and-bust cycle.
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But consider that following set of circumstances: a large population
in a demographic sweet spot, a high savings rate, an increasing
bias toward consumption, and the fact that the world needs a new
growth engine for the 21st
century. These elements portend a rise of Asian consumer that will transform the global economy. Although
this transformation is still in its early stages, marked by periods of
rapid advancement as well as periods of relative stagnation, Asia is
steadily becoming the main growth game in town.
Due to the regions internal strengths, the knowledge gained during
the boom and bust cycles, and the current state of the globaleconomy, Asias time is upon us.
The firmly entrenched belief that the world cannot grow without the
American consumer being the sole dominant force will cost
shortsighted investors the opportunity to identify and capitalize on
an emerging, gigantic trend.
Because humans are creatures of habit, it is difficult to alter our
ideas and identify change. The inability to see the transition to Latin
American and Japanese growth in the 1970s after everyone had
become extremely comfortable paying the U.S. growth stocks of the
1960s is an example of this stasis. A more recent manifestation of
this resistance to change is characterized by the fear sparked by the
1996 collapse of the Japanese consumer that the world would have
great difficulty finding a new consumption archetype.
History demonstrates that change in world economic leadership is
constant. Consider the great European powers that used to hold the
economic reigns of the world. When one city-state was at the height
of its influence, neither the citys inhabitants nor people abroad
were able to contemplate a change of the status quo.
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In the 1300s and 1400s, the Italian powerhouses of Venice, Genoa,
and Florence dominated, followed by Spain and Portugal. In the
1500s Antwerp and then Amsterdam took over as centers of world
banking and trade. In the 18th century, the power shifted toLondon, with the start of the Industrial Revolution. Eventually, the
U.S. took over the lead.
Today, those claiming things will stay the same sound even more
nave than those grew comfortable in their respective dominant
city-states. Given the already significant effects of globalization on
the worlds economy, change in the current context is a lot closer athand than many people are willing to accept.
Asias road is difficult one, perhaps more difficult than those faced
by fast-growing economic regions. Asia is coming of age during a
period of explosive globalization and technological change. Access
to technology and capital offers a lot of opportunities, but such
access is also restrictive as the region is member of an extremely
complex and interconnected world. Complicated relationship makes
decision- making especially difficult.
In the past, developing economies did not have outsiders looking
over their shoulders. As the road to prosperity is not always clearly
defined and fair, this relative solitude worked to these economies
advantage. Today, though, the rapidly emerging economies operate
under the microscope of countless worldwide organizations and
governmental agencies- all administrated by the economically
developed nations (EDNs). Developing economies must find ways to
grow and integrate into the global economic system, while
answering the questions and satisfying the demands of the great
economic powers.
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What would have happened to the Industrial Revolution in England,
or what would have been the rate of progress in the American
colonies, if they had to play by the rules that developing countries
in Asia are required to follow today?
To suggest that now is not the 18 th century and that the world has
come a long way in the civility, freedom, and the like ignores the
fact that developing Asia is today at the same position (relative to
the progress that the world has made) as the emerging economies
of more than 200 years ago. After all, 45 percent of Chinas total
workforce is still employed in the farm sector, a clear indication thatChina is still at a relatively early stage in the industrialization
process. 3
Looking Back:
Asia, especially China because of its size, has long excited the
imagination of the Western world. Marco Polo talked about the great
wonders of China, and Christopher Columbus although he never
reached China spoke of an incalculable amount of trade. In the
1800s, British merchants tried, unsuccessfully, to conquer China.
It is beyond the scope of this book to examine the details of these
failures, but some brief points are warranted. Few people appreciate
(mainly because of Britains and later, continental Europes
industrialization boom) the fact that parts of Asia, especially parts of
China, Japan, and India, were on the same economic level as
Europe until the end of the 18 th century. As Kenneth Pomeranz
noted, In sum, core regions in China and Japan circa 1750 seem
resemble the most advanced parts of Western Europe, combining
sophisticated agriculture, commerce, and non-mechanized industry
in similar, arguably even more fully realized, ways.
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This lack of appreciation, coupled with Europes spectacular
economic growth in the 19 th century, led to unshakable
misunderstandings when the West did business with China in
particular. Carl Crow put the problem into perspective in 1937. Every now and then, he write, we are visited in Shanghai by an
export manager, usually a new one, who appears to be spending his
companys money on an expensive trip around the world for the
sole purpose of discovering how many points of superiority he and
others of his nationality enjoy over the people of the country he is
visiting.
This shallow sense of superiority and a lack of sensitivity to the
regions idiosyncrasies had led to myriad mistakes by and financial
loses for Western investors.
Of course, this is a two-way street; Asias own attitudes harmed
Asia numerous times. In the 1990s, the region leaders and
businessmen accepted the theory that there was something unique
about Asia that made its economies thrive. But the work ethic of its
people notwithstanding, a careful look reveals that the regions
success was more the result of good timing than anything else. At
the time, Southeast Asia was the only part of the world not
enmeshed in crisis, and it had fairly open markets facilitating an
economic and stock market boom. With Latin America beaten own,
Africa facing its chronic problems, and Japan at the end of its run,
the tigers (for example, South Korea, Taiwan, Singapore, and so
on) were the worlds only growth investment choice.
The only rational explanation for this special status misconception
is the vanity of human beings and the conviction that, for whatever
reason, their situation- economic or otherwise is of a special kind
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that deserves special treatment, and above all is almost certainly
irreversible.
These above mentioned factors will make India a hot market forcars and thus this study will give the marketers a little overview
about the perception and exception from different countries by the
Indian consumers. It will help the marketers in developing a product
that will fit a according to their needs.
The Country-of Origin Concept:
In an era of global corporations and intertwined transitional network
of exchanges (e.g. ideas, R& D, product design, sourcing of raw
materials and subassemblies, manufacture, and distribution) that
results in the final product, Saeed (1994) defines the country of-
origin of a product as the country with which a firm that produces
the product is associated and, typically, this is the companys home
country. For example, many consumers would consider Ford Festiva
and Mercury.
Tracer American-made automobiles although Ford Festiva was
designed in the US, engineered by Mazda in Japan, and is being
built by Kia in Korea. Mercury Tracer has a Ford design, built on a
Mazda platform in Mexico, with a Ford engine manufactured in
Mexico and other components form Taiwan Also the Honda Accord
is built in Ohio and the Toyota Corolla in California out of parts
imported mostly from Japan. But in this project an effort is made to
find out the perception for cars made by different foreign players in
Indian consumers mind.
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Definition
Country of origin effects has been defined in many ways in the
literature. According to Wang and Lamb (1983), country of origin
effects is an intangible barrier to enter new markets in the form of negative consumer bias toward imported products. Johansson et
al.(1985) and Some other define it the country where corporate
headquarters of the company marketing the product or brand is
located . Typically, this is the home country for a company. Country
of origin is inherent in certain brands. IBM and Sony, for example ,
imply US and Japanese origins, respectively.
In general, the country of origin affects consumers product
evaluation since consumers evaluate a product on the basis of
information cues available. The country of origin is also found to be
one of these cues because consumers tend to be less familiar with
products of foreign origin. Some studies suggest a hierarchy of
effects among countries that is the relationship between the level of
economic development and perceived superiority of the products.
Other studies investigated the effects of country of origin on
consumer evaluations of uni-national and bi-national products since
the globalization of business functions has led to the proliferation of
hybrid products or products that have foreign made components but
a domestic brand name.
These authors further found various other sources of biases that
could influence consumers preference for products made in
different countries, including ethnocentric bias. Despite the general
consensus with regard to the influence of country-of-origin effects
non-product evaluation, Han (1989) explained how this influence
might take place. In his halo model, he posited that consumers
might use country image as an information cue to infer the quality
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consumers Lifestyle and ethnocentric behaviors to provide some
guidelines and suggestions to marketers and advertising agencies
that are operating not only in India but in neighboring countries
with similar level of socio-economic technological developments asIndia.
Conceptual Framewo rk:
One of the first conceptualizations of the county-of- origin
phenomenon was that of Nagashima. He defined the image that
consumers associate with a given country of-origin as the picture,
the reputation, the stereotype that businessmen and consumers
attach to products of a specific country. This image is created by
such variables as representative products, national characteristics,
economic and political background, history and traditions, Others
view this country image as reflecting consumers general
perceptions about the quality of products made in a particular
country and the nature of people from that country. Country of
origin perceptions entails cognitions, emphasizing specific product
and marketing attributes, and affect, regarding the countrys
people. More broadly, Samiee (1994) regards the country-of-origin
effect as any influence or bias that consumers may hold, resulting
from the country of origin of the associated product or service. The
source of the effect may be varies, some based on experience with
a product(s) from the country in question, others from personal
experience (e.g. study and travel), knowledge regarding the
country, political beliefs, ethnocentric tendencies, (or) fear of the
unknown.
The country of origin , reference group influence , and consumer
ethnocentrism literatures have developed independently ; however ,the three streams of research merge when addressing the role of
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national loyalty in the purchase Marketing decision process. While
the country-of-origin effect serves to convey global impressions to
users about the product or product attributes when knowledge is
lacking, it also serves as an indicator of ones group identity,Attachment to an in-country versus foreign produced product will be
stronger, the more salient the sense of national affiliation and
loyalty.
For instance, a person with a low sense of national loyalty is not as
likely to respond promotional campaigns focusing on a national
theme as are individuals possessing a strong sense of loyalty fortheir nation. Brand name, store image, specific product attributes,
or other non country specific cues to product quality may
persuade less nationalistic consumers to prefer foreign product as
opposed to their locally-made substitutes But, the aforementioned
factors are not related to national loyally. On the other hand, a
staunch nationalist may respond to the country-of-origin cue
because of close association of nation with ones own self-identity-
A true patriot should always support local versus foreign
produced goods and services represents an attitude reflective of
own country bias which is activated by exposure to the country-of-
origin cue. Thus, the country of-origin effect can be separated into
two discreet components. One component is informational and
provides cues to consumers regarding the value of product
attribute, which are difficult or impossible to access, or for which
there exists no prior information for assessment. Simply put, the
first component serves to convey impressions of quality,
dependability, specific information is not readily present A second
component of the country of origin cue relates directly to ones
group affiliation (i.e. second component of the effect which this
research focuses on. For the case of airline travel, it is expected
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that national loyalty plays a key role in the selection process and
the country of air carrier will influence the selection process.
Ethnocentrism:
About Ethnocentrism :The tendency of people to put their own group at the center: to see
things through the narrow lens of their ow n culture and to use the
standards of that culture to judge others.
Ethnocentrism (eth no sen triz em): Ten tendency toview the traits, ways, ideas, and values observed in other cultures
as invariably inferior and less natural or logical than those of ones
own group/
Ethnocentrism is a commonly used word in circles where ethnicity,
inter-ethnic relations, and similar social issues are of concern theusual definition of the term is thinking ones own groups ways are
superior to others or judging other groups as inferior to ones
own.
Ethnic refers to cultural heritage, and centrism refers to the
central refers to the central starting point. So ethnocentrism
basically refers to judging other groups from our own cultural point
of view. But even this does not address the underlying issue of why
people do this Most people, thinking of the shallow definition,
believe that they are not ethnocentric, but are rather open minded
and tolerant. However, as explained below, everyone is
ethnocentric, and there is now way not to be ethnocentric it
cannot be avoided, nor can it be willed away by a positive or well -
meaning attitude.
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To address the deeper issues involved in ethnocentrism calls for a
more explicit definition. In this sense, Ethnocentrism can be
defined as: making false assumptions about others ways based onour limited experience The key word is assumptions, because we
are even aware that we are being ethnocentric we dont
understand that we dont understand.
Ethnocentrism is often linked to a sociological theory called cultural
relativism , which means that: cultural relativists assert that
concepts are socially constructed and vary cross-culturally. Theseconcepts may include such fundamental notions as what is
considered true, morally correct, and what constitutes knowledge
are even reality itself this has major implications for the study of
non-Western societies. If importing a Western rationalist approach
is ethnocentric. An insiders view of the culture. Ethnography thus
becomes a process of uncovering the meanings by which people
construct reality and translating this knowledge into the discourse of
the fieldworkers own society. They key is erasing ethnocentrism is
first understanding that one is ethnocentric. For example, if one was
in France, and looking at any particular amount of francs, and asked
How much is this in real money? that person would be
ethnocentric. The first step is recognizing the attitudes and beliefs
that make us ethnocentric, and then work to dispel them.
Yesterday I dared to struggle. Today I dare to win. Berbadete
Devlin
Automobile Dealers Network In India :
In terms of Car dealer networks and authorized service stations,
Maruti leads the pack with Dealer networks and workshops across
the country. The other leading automobile manufactures are also
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trying to cope up and are opening their service stations and dealer
workshops in all the metros and major cities of the country. Dealers
offer varying kind of discount of finances who in tern pass it on to
the customers in the form of reduced interest rates
Major Manufacturers of Automobiles in In dia:
Maruti Udyog Ltd.
General Motors India
Ford India Ltd.
Eicher Motors
Bajaj Auto
Daewoo Motors India
Hero Motors
Hindustan Motors
Hyundai Motor India Ltd.
Royal Enfield Motors
Telco
TVS Motors
DC Designs
Government has liberalized the norms for foreign investment and
import of technology and that appears to have benefited the
automobile sector. The production of total vehicles increased from
4.2 million in 1998- 99 to 7.3 million in 2003-04 . It is likely that the
production of such vehicles will exceed 10 million in the next couple
of years.
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Automobile Export Numbers:
Category 2000-01 2006-07 (Apr-Dec)
Passenger Car 25468 121478
Multi Utility Vehicles 2654 3892
Commercial Vehicles 10108 19931
Two Wheelers 100002 256765
Three Wheelers 21138 51535
Percentage Grow th -16.6 32.8
The industry has adopted the global standards and this was
manifested in the increasing exports of the sector. After a
temporary slump during 2000-01and 2001-02, such exports
registered robust growth rates of well over 50 per cent in 2002-03
and 2003-04 each to exceed two and- a-half times the export figure
for 2001-02.
Sales incentives, introduction of new models as well
as variants coupled with easy availability of low cost finance with
comfortable repayment options continued to drive demand and
sales of automobiles during the first two quarters of the current
year. The risk of an increase in the interest rates, the impact of
delayed monsoons on rural demand, and increase in the costs of inputs such as steel are the key concerns for the players in the
industry.
As the players continue to introduce new models and variants, the
competition may intensify further. The ability of the players to
contain costs and focus on exports will be critical for the
performance of their respective companies
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The auto component sector has also posted significant growth of 20
per cent in 2005-06, to achieve a sales turnover of Rs.30,640 crore
(US$ 6.7 billion). Further, there is a potential for higher growth due
to outsourcing activities by global automobiles giants. Today, thissector has emerged as another sunrise sector.
Economic growth over the past decade has transferred India into an
important commercial centre with a vibrant lucrative consumer
market. In recent years, India has become an attractive competitive
and fast growing market for companies around the world. The
liberalization policy followed by India after 1991 economic reformshas given rise to the same condition for local and foreign
businesses. These developments have significantly enhanced and
affected Indias relationship with the international business
community.
With a young and rapidly growing large population base over 40%
larger than total population of many countries, India possesses a
small, very wealthy, western- oriented upper class and a sizable
and growing middle-class of salaried workers and small business
owners who are becoming major consumers of products. Therefore
this market has attracted significant attention from multinational
companies North America, Europe and Asia. To tap this potential
market, global marketers will require a comprehensive
understanding of Indian consumers. As per capita income continues
to grow, both disposable and domestic consumption levels will fuel
demand for more imports.
After the smokes of cold war between Western world and China,
Indian Market is the lenient policies followed by his democratic
country as against restricted policies of communist country like
China. The country of origin (COO) concept has come up with age.
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With the spread of globalization, the need of has come with age.
With the spread of globalization, in the need of studying the impact
of country of origin of product on its sales has increased
tremendously. The same type of product of different countries findsdifferent rating by different people. In this project, an effort has
been made to find the (COO) impact on buying behavior of people.
Here the respondents are students of PUNJABI UNIVERSITY,
PATIALA.
As more and more countries are moving to other countries, it has
become extremely important for the manufacturing companies andthe marketers to find how the inhabitants of that particular country,
perceive their product. I this way they may be able to forecast the
sales of their product to greater extant. Many studies have already
been undertaken on this concept but this particular study aims to
find out the forth-coming trend of car through the youth. Because
ultimately they will be the future buyers. This project will not show
interest of educated students as in the near future they will
represent the major chunk of car owners.
This future car owners have different conceptions, expectations for
different countries i.e. India, Japan, Untied States that is surely
going to effect their sales in future. Emerging markets in Asia and
Latin America led advancers. Venezuela, Russia and India led with a
gain of 44%, 26% and 20% respectively. Firm prices in
commodities such as oil, iron ore and metals supported the
advances in Brazil, Mexico and Venezuela as well. Rising corporate
profits and consumers spending supported index in India. Taiwan
and South Korea delivered negative returns for the quarter. Chief
Economist at CLSA Jim Walker believes that going ahead 2007 is
likely to be tough year for global liquidity. However, he adds
that Indias economic growth could move to 9-10%, and that Indias
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current account deficit is not a worry for now. He further says that,
there is not much downside to the rupee.
Hypotheses:
Given the issues discussed so far, the following two hypotheses
relating to country-of origin of automobiles, were investigated in
this study. The first hypothesis tests for significant differences in the
evaluation of Indian consumers perceptions of where automobiles
are made and their evaluations of those automobiles.
H1: Indian consumers would evaluate automobiles, which they
perceive to be made in US, Japan differently from those they
perceive to made in India.
H2: Indian consumers of different genders, education, income and
age will evaluate automobiles of different countries differently.
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CHAPTER-2
REVIEW OF LI TERATURE
Cordell (1991) suggests that consumer preferences are more
product specific for industrialized than less developed countries.
That is, a negative COO effect is evident when the home country of
manufacture is less developed than alternative sources of goods. In
general, a specific country can rank high in one product class and
low in another.
Han (1988) concluded that the emotion of patriotism played a
significant role in consumers choice of televisions and automobiles.
However, the cognitive attitude toward products made in different
countries (country images) played a limited role. The study found
that patriotic consumers tend to be older, white, and from blue
collar occupations.
Kayank and Cavusgil (1983) studied consumers perceptions of
different classes of products made in their own country but the
same respondents could be swayed to choose foreign products if
quality and price considerations were sufficiently favorable.
Specifically, they observed that consumers may not accept inferior
quality domestic products when superior foreign products are
available. They concluded that consumers attitudes towardproducts of foreign origin vary significantly across product classes.
Knight (1999) in his research paper titled as Consumer
preferences for foreign and domestic products has compared
consumer preference for goods made abroad and in the home
country by both foreign and home country firms. These preferences
and the intervening role of price-quality attributes are assessed in
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an empirical study using conjoint analysis and a MANOVA
procedure.
Results suggest that country of manufacture and product qualitystrongly influence consumers decision making in globally available
product categories. Specifically, compared to imported goods
consumer appear to prefer domestically manufacture goods and are
often willing to pay a higher price for them. It is usually when
imported goods are significantly superior quality that consumers will
pay more to obtain them. Finally, in their purchase consumers will
pay more to obtain them. Finally, in their purchase decisionsconsumer appear not to put much weight on a products perceived
importance to the home countries manufacturing base.
Pasw an and Sharma (2004) in their research Brand country
of origin (COO) image: investigation in an emerging franchise
market has investigated the relation ship between Accuracy of
brand country of origin (COO) knowledge and image, in a
franchising context. Accuracy of brand COO knowledge is found to
be positively related to COO image. In accurate brand COO
knowledge leads to a confusing and somewhat negative image
about COO.
In addition, antecedents to the brand COO knowledge
lead to a confusing and somewhat negative image about COO. In
addition, antecedents to the brand COO knowledge are also
investigated. Factors such as social class, education and travel
abroad positively influence the brand COO knowledge is also
investigated. Factors such as social class, education and travel
abroad positively influence brand COO knowledge. This
investigation conducted in an emerging especially for multinational
franchisers.
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Sulati and Baker (1998) in