Consumer Buying Behavior Towards Maruti Swift ... - · PDF fileConsumer Buying Behavior Towards Maruti Swift and Ford Figo. in ... research project titled “Consumer Buying Behavior

Research Project

on

Consumer Buying Behavior Towards

Maruti Swift and Ford Figo.

in

In Partial fulfillment of the Masters of Business Administration

Submitted To: Submitted By:

Dr. Gurdeep Singh Gur Gaurav Singh

Munish kumar

Abhinav Gupta

Dated: 28th

April, 2014

UIET,Panjab University, Chandigarh

CERTIFICATE OF APPROVAL

This is to certify that Mr.Gur Gaurav Singh,Mr. Munish Kumar, Mr. Abhinav

Gupta students of BE-MBA (10th

Semester) UIET,Panjab University have done a

research project titled “Consumer Buying Behavior Towards Maruti Swift and

Ford Figo”, under my supervision in partial fulfilment of the Masters in Business

Administration.

Their work is original and up to my satisfaction. This project has not been

submitted anywhere else for the award of any degree or diploma.

Mr. Rahul Kanwar

Acknowledgement We avail this opportunity to acknowledge the academic interaction, exchange of

views and participation of all those who directly or indirectly contributed towards

the completion of this project.

We wish to express my heartfelt thanks to my project guide Mr Rahul Kanwar for

his continuous guidance, helpful criticism and supervision through course of this

project.

We thank and sincerely acknowledge the support of all the people who have

given contribution to this research.

INTRODUCTION TO THE TOPIC Last decade witnessed a fast growth in Indian automobile. According to the Indian automobile Manufacturers (SIAM, 2008), the Indian automobile industry has maintained a steady growth of 20% till 2005. The automobile industry contributes to about 5% of the GDP of Indian economy and it is targeted to grown fivefold by the year 2016.

The 1200 cc passenger car segment

There are many car companies which provide the 1200 cc car variants in to the market. Maruti Suzuki dominates in this segment; Tata Motors is at the second place, while Hyundai and many other car companies provide their 1200 cc car variants in the market, the details of which are as given below:

1. Maruti Suzuki: Eeco, Ritz, Swift, Swift Dzire. 2. Tata Motors: Indica, Indica Vista, Indigo. 3. Hyundai: i10, i20. 4. Chevrolet: Beat, U-VA, Aveo. 5. Fiat: Grande Punto. 6. Honda: Jazz. 7. Nissan: Micra. 8. Skoda: Fabia. 9. Volkswagen: Polo. 10. Ford: Figo.

RESEARCH OBJECTIVE

To understand consumer purchasing behaviour and perspective towards Global brands vs. local brands : The Indian car industry. The objective of the research is to find whether the customers have faith in Indian

manufacturers or they prefer multinationals while purchasing a car. Here, are trying

to compare one car of Indian origin i.e. Maruti Suzuki Swift to that of Ford Ford(

German Manufacturer).Both of the cars are 1200 cc/compact cars having the same

price range and both cars belong to the Hatch back class of cars.

We are preferring Maruti Suzuki to other Indian brands like Tata motors and

Mahindra because of the price difference of the cars like Tata vista and Mahindra Verito than that of Ford Figo and all cars don‟t belongs to the same category. Vista and Verito belongs to the Sedan class while figo belongs to the Hatch back class.

Henceforth, we narrowed down our research to Maruti Swift and Ford Figo.

The sub objectives of our research will be illustrated as:

1. To find out the major variables of consumer‟s purchase decision.

2. To determine the contribution of these variables in the consumer‟s purchase decision.

3. To carry out the factor analysis to understand the perception of consumer.

2.2 Research Design: An exploratory study was conducted in the tri-city (Chandigarh, Mohali and

Panchkula) in which detailed face to face structured interviews were conducted

with the people which helped us to uncover individual‟s covert feelings and

emotions towards purchasing behavior and perspective of global brands vs. local

brands. Sampling Design: The systematic sampling technique used was to identify 53 respondents as our sample.

Understanding of the problem and linkages of variables

When the consumer is taking a purchasing decision whether to go for Indian manufacturers or to go for German manufacturer various factors influences his/her mind like reliability, fuel economy, price, safety features, warranty and service facility. But, any addition in these features many create a significant utility. However, looking to the complexity to deal with large number of variables, their reduction in the form of few factors shall follow the analysis for data summation. The variables considered for conducting the proposed study are Styling and appearance, Price and discounting policy, Passenger comfort, Driving pleasure and ride quality, Reliability, Manufacturer‟s Reputation, Engine Performance and its stability at higher speed, Fuel Efficiency, Boot space, Vehicle durability, Presence of safety features, Warranty period, Resale value, Additional features, Previous experience, Opinion of opinion leaders, Opinion of family members, Availability of spare parts and economy of maintenance of car, Impact of advertising and Environmental friendliness

Development of Hypotheses

1. Economic Issues (like price and discounting policy, fuel efficiency,

warranty, availability of spare parts etc ). 2. Comfort issues (like passenger comfort, driving pleasure and ride quality,

reliability, engine performance and stability at higher speed, boot space). 3. Safety and additional features issues (like presence of safety features,

additional features, styling and appearance). 4. Advertising and manufacturer‟s reputation. 5. Service and maintenance 6. Self-assessment issues (like previous experience, opinion of family

member, opinion of opinion leader).

Need and importance of the study:

The Indian market, one of the most promising in the world, is fast evolving. So is

the Indian consumer, across all socioeconomic strata, regions and town classes.

Rising incomes, multiple income households, exposure to international lifestyles

and media, easier financial credit and an upbeat economy are enhancing

aspirations and consumption.

The study will help in determining the factors which have a major influence on

consumer buying behaviour for domestic cars over multinational cars. This study

will help companies to project their car products according to the factor which

have a major influence on consumer buying behaviour.

70

60

50

40

frequency

30

percentage

20

10

0

Indian Multinational

Figure 3 Frequency distribution of the respondents having Indian and multinational cars in the sample

Table 1 Frequency distribution Table of the respondents having Indian and multinational cars in the sample

Frequency percentage Cumulative percentage

Indian 34 64.1509434 64.1509434

Multinational 19 35.8490566 100

Total 53 100

Satisfaction level of the people who own Indian and multinational cars in the sample

100

90

80

70

60

frequency

50

40

percentage

30

20

10

0

Indian multinational

Figure 4 Frequency distribution of the satisfaction level of people having Indian and multinational cars in the sample

Table 2 Frequency distribution Table of the satisfaction level of people having Indian and multinational cars in the sample


Indian 49 92.452 92.45

Multinational 4 7.5471 100

Total 53 100

People willing to switch their cars from Indian to multinational or vice versa.

Some people have a versatile personality always prefer or welcome

change whole heartedly.

70

60

50

40

Frequency

30

percentage

20

10

0 willing to switch from Indian to global willing to switch from global to Indian

Figure 5 Frequency distribution of the satisfaction level of people having Indian and multinational cars in the sample

Table 3 Frequency distribution Table of the satisfaction level of people having Indian and multinational cars in the sample


Willing to switch from 18 33.96 33.96 Indian to global

Willing to switch from 35 66.03 100 global to Indian

Total 53 100

MOST IMPORTANT FACTORS DEFINING THE VARIABLES Once we understand the relative importance of the variables, we need to identify what are the main factors/ traits that define them.

So, a focus group interview was conducted where we asked 53 respondents to

discuss the traits they think define the desired economic issues, safety , self-

assessment, advertising and manufacturers reputation, comfort and service and

maintenance . We collected the main factors discussed in this discussion forum

along with those taken from theories to make a list of factors to be considered

in our tool (questionnaire). Following 4 factors were considered for Economic issues: 1. Discounting policy 2. Warranty 3. Availability of spare parts 4. Fuel efficiency

Following 6 factors were considered for Comfort issues:

1. Passenger comfort 2. Driving pleasure and ride quality 3. Reliability, 4. Engine performance 5. Stability at higher speed 6. Leg space

Following 4 factors were considered for Safety issues

1. Presence of safety features 2. Additional features 3. Styling 4. Appearance

Following 2 factors were considered for Service and maintenance

1. Sales person 2. availability of spare parts

Advertising and manufacturer‟s reputation was also considered as a factor

Following 2 factors were considered for Self-assessment issues

1. Previous experience 2. Opinion of family member 3. Opinion of Sales person.

Since, all the factors won‟t be equally important in the definition of the desired

variables, so we applied factor analysis tool to identify the most important of

these factors.

5.1 Identifying key factors/ traits defining desired Economic issues

Table 10 ; KMO and Bartlett’s test for the model

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .845

Bartlett's Test of Sphericity Approx. Chi-Square 382.344

Df 190

Sig. .001

The KMO coefficient value of 0.845 (greater than 0.7), signifies that our model explains

84.5 % of the variance.

Also since the p value for the model is 0.001, this means that the model is significant at

99% level of confidence interval.

Using factor analysis, we extracted the following 2 set of components:

1. Discounting policy.

2. Fuel efficiency.

Please find the factor loadings from Table A.1 and correlation among the 2 components

from Table A.2 of Appendix A.

The components are extracted on the basis of the value of individual factor loadings of

the 4 variables considered on the 2 components extracted.

Table 11 : Total Variance Explained by the extracted components

Extraction Sums of Squared Rotation Sums of Squared Initial Eigenvalues Loadings Loadings

% of Cumulative % of Cumulative % of Cumulative

Component Total Variance % Total Variance % Total Variance %

1 2.671 36.709 36.709 2.671 36.709 36.709 1.839 28.709 28.709

2 1.425 24.254 60.963 1.425 24.254 60.963 1.737 27.254 55.963

3 1.230 12.302 73.265 1.230 12.302 73.265 1.643 16.302 72.265

4 1.038 10.383 83.648 1.038 10.383 83.648 1.146 11.383 83.648

Extraction Method: Principal Component Analysis.

From table , we conclude that the two components extracted explain 83.648% of

the variance in the data which is significantly high and acceptable.

5.2 Identifying key factors/ traits defining desired comfort:

Table 12 : : KMO and Bartlett’s test for the model

KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .780

Bartlett's Test of Sphericity Approx. Chi-Square 336.182 Df 105 Sig. .001






1. Driving pleasure and ride quality

2. Reliability

3. Engine performance

4. Stability at higher speed



The components are extracted on the basis of the value of individual factor loadings of all



Extraction Sums of Squared Rotation Sums of Squared

Initial Eigenvalues Loadings Loadings



1 4.047 26.98 26.98 4.047 26.98 26.98 2.741 24.273 24.273

2 2.351 20.672 47.652 2.351 20.672 47.652 2.599 16.329 40.602

3 1.524 12.158 59.81 1.524 12.158 59.81 2.052 13.677 54.279

4. 1.068 7.122 77.495 1.068 7.122 77.495 1.315 10.768 77.495

5 1.134 10.563 70.373 1.134 10.563 70.373 1.417 12.448 66.727

6.

.843

6.427

90.075


From table , we conclude that the five components extracted explain 77.495% of the

variance in the data which is significantly high and acceptable.

5.3 Identifying key factors/ traits defining desired safety

Table 14 KMO and Bartlett’s test for the model



Bartlett's Test of Sphericity Approx. Chi-Square 135.357

Df 28

Sig. .001






1. Presence of safety features

2. Appearance




the 4 variables considered on the 2 components extracted


Total Variance Explained

Extraction Sums of Rotation Sums of Squared

Initial Eigenvalues Squared Loadings Loadings



1 2.246 28.079 28.079 2.246 28.079 28.079 1.748 21.844 21.844

2. .778 9.720 86.564 .778 9.720 86.564 1.063 13.282 86.564

3 .533 6.662 93.226

4 .336 4.202 97.428

5 .206 2.572 100.000


From table 15, we conclude that the 2 components extracted explain 86.564% of the

variance in the data which is significantly high and acceptable.

5.4 Identifying key factors/ traits defining Service and maintenance:

Table 16 : KMO and Bartlett’s test for the model



Bartlett's Test of Sphericity

Approx. Chi-Square 382.344

Df 190

Sig. .001





Using factor analysis, we extracted the following 1 component:

1. Availability of spare parts




the 3 variables considered on the 1 component extracted.


Extraction Sums of Rotation Sums of Squared Initial Eigenvalues Squared Loadings Loadings



1 1.038 10.383 83.648 1.038 10.383 83.648 1.146 11.383 83.648

2 .843 6.427 90.075

3 .791 4.91 94.985


From table 7, we conclude that the four components extracted explain 83.648% of

the variance in the data which is significantly high and acceptable.

Identifying key factors/ traits defining desired self assessment

Table 8: KMO and Bartlett‟s test for the model

KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .780

Bartlett's Test of Sphericity Approx. Chi-Square 336.182 Df 105 Sig. .001






1. Previous experience 2. Opinion of family member



The components are extracted on the basis of the value of individual factor loadings of all


Total Variance Explained by the extracted components

Extraction

Sums of Rotation Sums of Squared

Initial Eigenvalues Squared Loadings Loadings



1 1.134 10.563 70.373 1.134 10.563 70.373 1.417 12.448 66.727

2 1.068 7.122 77.495 1.068 7.122 77.495 1.315 10.768 77.495

3 .196 0.254 100


From table , we conclude that the 2 components extracted explain 77.495% of the

variance in the data which is significantly high and acceptable

Consumer Buying Behaviour

Which car would you like to own/buy? *

o Maruti Swift

o Ford Figo

o Toyota Etios Liva

o Hyundai i20

o Others

What's your purpose of purchasing a car? *

o Business

o family

o Taxi/cab

o Others

Which variant would you prefer? *

o Diesel

o Petrol

Do you have faith in Indian manufacturers or do you prefer

multinationals? *

o Indian manufacturers

o Multinationals

Rate the factors you pay consideration to, while purchasing a car? *

Strong

Disagree Disagree Neutral Agree

Strongly

Agree

Word of

mouth

Advertisement

Status Symbol

Brand Image

Reliability Availability of

Test drive

Exterior and

Looks

Safety and Breaking *

Strongly


Strongly

Agree

Power dock

Locks

Anti-theft

alarm

Seat belt

warning

Defog

Availability

Comfort *

Strongly


Strongly

Agree

Rear

Power

Window

Automatic

climate

control

Bottle

Holder

Sunroof Foldable

seats

Mileage you are comfortable with(on Highway) *

o 16-18

o 18-20

o 20-22

Finance Scheme *

Strongly


Strongly

Agree

Lesser

Cash

Down

Payment

Lesser

EMI

Provision

of full

payment

in cash

Services *

Strongly


Strongly

Agree

Customer

Relationship

Spare parts

availability

Service

Stations

Lesser time

to service

Cost of

Service

Salesperson

Maintenance Required *

o 2-3 times a year

o 3-5 times a year

o 5-7 times a year

Are you satisfied with your car? *

o Yes

o No

Based on above, would you like to switch? *

o Yes

o No

Which one you would prefer if provided for free? *

o Maruti Swift

o Ford Figo

Personal Details This page contains information about personal details. The information is

only for the academic purpose and will be kept secret

Name

Age *

<18

18-25

25-35

35-50

>50

Annual Income *

<1,00,000

1,00,000-3,00,000

3,00,000-5,00,000

5,00,000-10,00,000

>10,00,000

Not Working

Marital Status *

Single

Married

Documents

Consumer Buying Behavior Towards Maruti Swift ... - · PDF fileConsumer Buying Behavior Towards Maruti Swift and Ford Figo. in ... research project titled “Consumer Buying Behavior