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MARKET RESEARCH PROJECT
ON
To Study Buying Behaviour of Customers
Towards Hatchback Cars Below 6 Lakhs
And
Analysis of The Responses
Using SPSS and Excel
Table of Contents
S.No Topic Pg. No
1 Background Study
i. Indian Automobile Industry
ii. Market share of passenger vehicles in India
iii. Hatchback market in India
iv. Looking forward
1
2 Research Methodology
i. Research Objective
ii. Methodology
a. Retailer & Distributor Survey
b. Customer Survey
5
3 Results & Analysis using SPSS & MS Excel 12
4 Conclusions 19
INTRODUCTION
India's automobile industry is one of the largest recipients of foreign direct investment
within the country and accounts for about 8 percent of the economy. The industry is not
only gaining ground as a global production hub; world- leading brands are increasingly
setting up local operations to tap India's lucrative domestic market. This has seen more
activity across the entire consumer market as global luxury automobile brands target the
country's burgeoning upper-middle class and high net worth individuals, while major
international carmakers are entering the highly competitive small car segment.
India is expected to become the world’s third largest automobile market by 2030, behind
the US and China, according to industry forecasts. This confidence is based on drivers
including low vehicle ownership within India, anticipated high levels of economic growth,
substantial government investments in infrastructure and an increasingly upwardly mobile
middle class.
Indian consumers are value-centric. Many carmakers, as a result, have focused their activity
within the economical hatchback segment. This contrasts with a preference for bigger, more
luxurious cars in developed countries. Car production in Brazil, Russia, India and China grew
with CAGR of 7.3 percent, 1.9 percent, 17.6 percent and 39.3 percent respectively from
2001 -10.
Market share of passenger vehicles in India:
Hatchback market in India
India's hatchback market can be broadly divided into three segments: micro, mini and
compact. Tata Nano is currently the only micro car in the market. Costing less than 200,000
rupees, the model was marketed as “the world’s cheapest car”. The mini segment includes a
mix of classic models such as the Maruti Suzuki Alto and Hyundai's Santro Xing, as well as
newer cars like the Hyundai Eon. They are typically priced from 100,000-200,000 rupees.
Tata launched India's first compact car with the Indica in 1998. Maruti Suzuki entered the
segment with the Swift in 2005. Since then compact cars have become one of the auto
industry's most competitive and fastest growing segments.
Competition has intensified within the hatchback sector and consumers have had a much
greater choice of models ever since international carmakers became more active within
India's auto market. While Indian consumers are very cost-focused, carmakers cannot
compete on price alone. If they could, Tata Nano would have been the bestselling car in
India, a position currently enjoyed by the Maruti Alto. Certain non-price based factors
influence the buying decisions of Indian consumers. Alto and Swift are the bestselling
models despite commanding relatively high prices. This is due to their combination of
contemporary design, fuel efficiency, after – sales service, build quality and price which
outstrips the offering of other players in the hatchback segment.
India's hatchback market comprises 12 automakers with three brands– Maruti Suzuki,
Hyundai and Tata – accounting for 80% of the market by volume. Foreign brands account for
less than 3 percent of the market.
The top four players namely Suzuki, Hyundai, Tata Motors and Mahindra & Mahindra
constitute 80 percent of the passenger car sales in India thereby making it a highly
consolidated market.
Hatchbacks have been the bestselling cars in India since they were introduced in the early
1980s. The image of small compact cars is changing from that of the ideal vehicle for budget
conscious middle –class consumers to something that is increasingly popular with wealthier
buyers, thanks to the introduction of more stylish customised models.
Maruti continues to lead the hatchback segment with a 48-percent market share, about
800,000 vehicles last year, despite the company facing major internal and external issues
related to production and labour management. While other major players such as Hyundai
and Tata lead in terms of innovation and vehicle performance, they still lag far behind in
terms of sales. International car giants including General Motors, Honda, Toyota and
Volkswagen have entered the market but have yet to gain a foothold or compete effectively
against the dominant local brands in hatchback segment.
Maruti took hold of the hatchback market in the 1980s when it introduced the Maruti 800, a
customised car aimed at India's mass market which dislodged Hindustan Motor’s
Ambassador from pole position. Hyundai Motors India in 1998 became the first carmaker to
seriously challenge Maruti’s dominance by launching the Santro, which was a runaway
success and became the segment's no .1 seller within the year it was launched. Tata Motors
announced India’s first totally homegrown passenger car, the Indica, in the same year. Its
rugged look was an instant hit. This enabled four models – Maruti Suzuki 800 and Alto, Tata
Indica and Hyundai Santro–to practically own the hatchback segment until the recent entry
of foreign players.
Looking forward
India is emerging as one of the most attractive automobile markets in the world. According
to the Department of Heavy Industries' Auto Mission Plan 2006 -16, the auto industry
should top US $145bn before the end of fiscal 2016. However, it is likely the target will now
be missed by as much as 20 percent due to current sluggish growth rates. Nevertheless, the
market still provides a huge opportunity for domestic and international players with CAGR
forecast at 8 percent for 2013-20.
RESEARCH METHODOLOGY
RESEARCH OBJECTIVE:
To study the buying behaviour of customers towards hatchback cars below 6 lakhs.
METHODOLOGY:
To evaluate the objective of the study, secondary data was collected using internet and
primary data using survey method. The data required for the study was collected from the
retailers and distributors by personal interview method using well-structured schedule and
by customers using questionnaire.
Research design: Descriptive type
Sampling unit: Geographical sample unit (Mumbai)
Sampling unit – 18 years and above men and women who own hatchback cars in the
range of 4-6 lakhs
Sample size - 30
Sampling method - Random probability sampling
DATA
Type – Primary and secondary
Data collection technique- Online Questionnaire and Personal Interview
RETAILER & DISTRIBUTOR SURVEY
Interview Details:
Details of Maruti Suzuki:
Maruti Suzuki provides a wide range of hatchback cars and is also the choice of a majority of
Indians. We visited its showroom, which is located at SV road Bandra, on 18th January 2014
at 6:30 pm. On entering the showroom, we spoke to one of the salesmen and told him that
we’ve come from ‘N L Dalmia Institute of Management Studies and Research’ and that we
are conducting a market research on the consumer buying behaviour towards hatchback
cars (4-6 lakhs). We asked him if he could answer a few questions, which would not take
more than 7-10 minutes. He readily agreed and took us to his table.
The interview took place as follows:
1. Which hatchback cars are offered by Maruti Suzuki within 4 to 6 lakhs?
Salesman: WagonR, A star, Zen Estilo, Swift, Ritz.
2. Out of these cars, which would you personally suggest to customers?
S: I would suggest WagonR, A star, Zen Estilo, Swift and Ritz because these cars provide
good performance. I would also suggest Alto to people who are looking at a lower price
range.
3. Which of these cars have recorded the most sales?
S: If you see all over India, Swift, WagonR and Alto are very popular among the customers.
4. So which aspect is given more importance?
S: It depends. If customers are going for Alto and WagonR, they rate mileage as very
important. But if the customer wants style along with performance they go for Swift.
5. Which cars have recorded low sales? And why?
S: Of all the cars mentioned, Zen Estilo and A Star have recorded low sales, if you compare it
with the sales of other Maruti Suzuki cars. These cars are not very popular with the
customers, and they also have a few complaints about their performance.
6. What is the most sought after price range?
S: Customers generally fall into the 5-6 lakhs bracket because most of them are looking for
an economical car.
7. Do customers come with a particular car in mind? Or does your opinion impact their
purchase intention?
S: Some customers do come with a particular car in mind. But most of the times, while
clarifying their doubts about specific cars and helping them make a decision , we do impact
their purchase intention.
8. So after they have bought the car suggested by you, have there been any complaints
or are they satisfied with the performance?
S: Sometimes there are complaints registered by customers, but that is purely because of
technical issues in 1 or 2 cars and this does not mean that all the other cars also have that
problem. But once the complaints are registered, we are very fast in resolving them. So as
such the customers are satisfies with our service.
9. What time during the year do customers generally purchase a car?
S: Customers generally make a purchase during end of March because of Gudi Padwa, at the
end of the year in December, and festivals like Diwali.
10. Are there any complimentary accessories provided?
S: We provide accessories but they are not complimentary. Customers, if interested, have to
purchase them.
11. So are they interested in buying them?
S: Yes, most of them are interested in buying them since they are very economical.
12. Do customers change their purchase intention if there is a discount on some other
car?
S: Generally discounts offered are in the range of Rs 5,000-15,000 so they don’t really
matter so much to change their purchase intention.
Once the interview was over, we thanked him for removing time to answer our questions
which would definitely help us in forming our report.
Summary of the other brands:
Hyundai: The popular hatchback cars offered by Hyundai are i20, Grand i10 and Eon.
Customers are very happy about the comfort features and aesthetics provided by the grand
i10. Customers believe it is true value for money, but think that it is not as futuristic as the
i20. The i20 comes across as a premium hatchback car. Its styling, design and comfort level
are its main features. But it is viewed as slightly more expensive than the other cars. The
main features of Eon are its design and styling, as well as fuel economy.
Toyota offers Etios Liva , that is viewed as value for money. Customers are also happy about
the top class finish provided. Its main features are its quality, durability and good fuel
economy.
Chevrolet offers Beat as its hatchback car. Customers feel that it is a convenient and
economical car. Its main features include design and futuristic interior styling. It is also very
easy to maintain.
Fiat offers Punto and Palio in the price range of 6 lakhs. Customers go for these options for
style and driving comfort. These cars are spacious. Their pick up speed is good.
But mileage conscious customers don’t go for these cars. Also the maintenance cost is little
high and the availability of spare parts is a problem and also the spare parts are expensive.
Honda offers brio in the price range of 4.19-6.19 lakhs. Customers look for this car primarily
because of the brand name and the reliability that comes with it. It has got good interiors
and is fuel efficient too. The car scores well on looks as well. One more thing that appeals to
the customers is the easy and cheap availability of its spare parts. The after sales service is
also good.
The only thing disliked by the customers in Brio is its small size. The boot space is very small
and leg space at the rear side is small too.
Volkswagen offers Polo in the price range of 4.99 to 8 lakhs. Again the brand name is one
the most appealing factors to the customers. Customers go for it also due to its style and
driving pleasure. The car is sturdy and offers good stability at high speeds.
Poor mileage and poor after sales service are the reasons for which customers don’t go for
Polo.
DEPENDENT AND INDEPENDENT VARIABLES
From the interview with retailers and distributors, following dependent and independent
variables are recognized which influences people to buy Hatchback cars.
Independent variables Dependent variables
Brand Sales
Mileage Customer satisfaction
Colour
Features
Interior design and exterior looks
Price
Comfort
CUSTOMER SURVEY
Hatchback Online Questionnaire
* Required
Age: *
18 to 30
31 to 50
Above 50
Gender: *
Male
Female
Occupation: *
Student
Working
Home Maker
Annual Family Income: *
Below 5 lakhs
5 to 10 Lakhs
10 to 15 Lakhs
Above 15 Lakhs
Do you own a car? *
Yes
No
Which car do you own? *
Maruti
Hyundai
Toyota
Chevrolet
Volkswagen
Others
Number of family members: *
1
2
3
4
5
More than 5
Rank the features in the order of importance while making purchase (1_Least 7_Highest) *
1 2 3 4 5 6 7
Mileage
Price
Safety
Brand name
Comfort
Interior &
Exterior Design
Fuel Efficiency
Who/what influences your buying decision? *
Family
Friends
Advertisements
Sales Staff
Internet (Blogs, Facebook Groups, etc)
How important are discounts and credit facilities? *
Not Important
Neutral
Somewhat Important
Very Important
Would you be willing to pay a higher price for a more popular brand? *
Yes
No
Depends
When would you typically make a purchase? *
Beginning of year
End of year
Festivals or special occasions
Anytime
Rate according to your car engine preference (1_Least 4_Highest) *
1 2 3 4
Petrol
Diesel
CNG
LPG
Please associate the automobile brand with the matching taglines. *
Maruti Hyundai Toyota Chevrolet Volkswagen
Wide Service
Network
Availability of
Parts
Value for
Money
ANALYSIS OF THE RESPONSES USING SPSS & EXCEL:
1. Age
Age:
Frequency Percent Valid Percent
Cumulative
Percent
Valid 18 to 30 12 40.0 40.0 40.0
31 to 50 16 53.3 53.3 93.3
Above 50 2 6.7 6.7 100.0
Total 30 100.0 100.0
The Age options provided were: 18-30, 31-50, above 50. Out of the total people surveyed,
12 (40%) belonged to the group 18-30, 16 (53.3%) to 31-50 and 2 (6.7%) above 50. This
shows that majority of the people buying hatchback cars are between 18-30 years.
2. Gender
Gender:
Frequency Percent Valid Percent
Cumulative
Percent
Valid Female 11 36.7 36.7 36.7
Male 19 63.3 63.3 100.0
Total 30 100.0 100.0
Out of the total people surveyed, the number of males was higher than the number of
females i.e. 63.3% males and 36.7% females.
3. Rank the features in the order of importance while making purchase (1_Least
7_Highest)
Rank
Features 1 2 3 4 5 6 7 Total
Mileage 0 0 1 2 1 13 13 30
Price 3 3 0 5 9 5 5 30
Safety 1 7 14 3 2 1 2 30
Brand Name 1 0 1 15 8 3 2 30
Comfort 5 14 10 0 0 0 1 30
Interior & Exterior Design 19 4 3 3 1 0 0 30
Fuel Efficiency 1 2 1 2 9 8 7 30
The respondents ranked Interior & Exterior Design as the most important attribute
influencing their purchasing decision. The next important attributes are Comfort, Safety and
Brand Name.
4. Please associate the automobile brand with the matching taglines.
Wide Service Network
Frequency Percent Valid Percent Cumulative Percent
Valid Chevrolet 10 33.3 33.3 33.3
Hyundai 6 20.0 20.0 53.3
Maruti 5 16.7 16.7 70.0
Toyota 8 26.7 26.7 96.7
Volkswagen 1 3.3 3.3 100.0
Total 30 100.0 100.0
0
2
4
6
8
10
12
14
16
18
20
1 2 3 4 5 6 7
Mileage
Price
Safety
BrandName
Comfort
InteriorExteriorDesign
FuelEfficiency
Rank of the features in the order of importance 1-Least 7-Highest
Frequency
Availability of Parts
Frequency Percent Valid Percent Cumulative Percent
Valid Chevrolet 1 3.3 3.3 3.3
Hyundai 15 50.0 50.0 53.3
Maruti 12 40.0 40.0 93.3
Toyota 2 6.7 6.7 100.0
Total 30 100.0 100.0
Value for Money
Frequency Percent Valid Percent Cumulative Percent
Valid Hyundai 5 16.7 16.7 16.7
Maruti 20 66.7 66.7 83.3
Volkswagen 5 16.7 16.7 100.0
Total 30 100.0 100.0
Frequency Table
Wide Service Network
Availability of Parts
Value for Money
Maruti 5 12 20
Hyundai 6 15 5
Toyota 8 2 0
Chevrolet 10 1 0
Volkswagen 1 0 5
Out of the total people surveyed:
Respondents associated Maruti with the tagline Value for Money: 20 (66.67%)
Respondents associated Hyundai with the tagline Availability of Parts: 15 (50.00%)
Respondents associated Chevrolet with the tagline Wide Service Network: 10 (33.33%)
0
5
10
15
20
25
Wide Service Network
Availability of Parts
Value for MoneyFrequency
5. Who/what influences your buying decision?
Frequency Percent Valid Percent Cumulative Percent
Valid Advertisements 9 30.0 30.0 30.0
Family 14 46.7 46.7 76.7
Friends 6 20.0 20.0 96.7
Internet (Blogs,FB Groups,etc) 1 3.3 3.3 100.0
Total 30 100.0 100.0
Out of the total people surveyed, it is seen that for almost 50% of the respondents, Family
played a major role while buying a hatchback car followed by the influence of
advertisements which was almost 30%.
6. Number of Family members:
Frequency Percent Valid Percent Cumulative Percent
Valid 3.0 10 33.3 33.3 33.3
4.0 15 50.0 50.0 83.3
5.0 5 16.7 16.7 100.0
Total 30 100.0 100.0
For the total people surveyed, the family size of the respondents was mostly of 3 to 4
people i.e. 83%. This shows hatchback cars are mostly preferred by small families.
7. How important are discounts and credit facilities?
Frequency Percent Valid Percent Cumulative Percent
Valid Neutral 7 23.3 23.3 23.3
Not Important 1 3.3 3.3 26.7
Somewhat Important 21 70.0 70.0 96.7
Very Important 1 3.3 3.3 100.0
Total 30 100.0 100.0
Out of the total people surveyed, for 70% of the respondents discounts plays an role while
buying the hatchback cars.
8. Cross Tabulation - [Annual Family Income * Which car do you own?]
Case Processing Summary
Cases
Valid Missing Total
N Percent N Percent N Percent
Annual Family Income: *
Which car do you own? 30 100.0% 0 0.0% 30 100.0%
Chi-Square Tests
Value DF
Asymp. Sig.
(2-sided)
Pearson Chi-Square 28.152a 10 .002
Likelihood Ratio 24.440 10 .007
N of Valid Cases 30
a. 16 cells (88.9%) have expected count less than 5. The minimum
expected count is .10
Annual Family Income: * Which car do you own? Crosstabulation
Which car do you own?
Total 1 2 3 4 5 6
Annual
Family
Income:
1 Count 6 2 0 0 0 1 9
% within Annual Family
Income: 66.7% 22.2% 0.0% 0.0% 0.0% 11.1%
100.0
%
2 Count 4 9 0 3 2 0 18
% within Annual Family
Income: 22.2% 50.0% 0.0% 16.7% 11.1% 0.0%
100.0
%
3 Count 0 0 1 0 2 0 3
% within Annual Family
Income: 0.0% 0.0% 33.3% 0.0% 66.7% 0.0%
100.0
%
Total Count 10 11 1 3 4 1 30
% within Annual Family
Income: 33.3% 36.7% 3.3% 10.0% 13.3% 3.3%
100.0
%
Directional Measures
Value
Asymp.
Std. Errora
Approx.
Tb
Approx.
Sig.
Nominal by
Nominal
Lambda Symmetric .323 .153 1.806 .071
Annual Family
Income: Dependent .333 .236 1.181 .238
Which car do you
own? Dependent .316 .138 2.023 .043
Goodman and
Kruskal tau
Annual Family
Income: Dependent .378 .109 .015c
Which car do you
own? Dependent .187 .072 .002c
The objective of this tabulation is to find the break-up between the percentages of people
within a particular Annual income category owning a particular car. Our findings are as
follows:
Annual Family Income Car Owned (% of respondents)
Below 5 lakhs Maruti (66.7%)
5 to 10 lakhs Hyundai (50%)
10 to 15 lakhs Volkswagen (66.7%)
Above 15 lakhs None
Chi-Square test revealed that there is a significant correlation between the annual family
income and the brand of car owned by them.
Which car do you own? 1 - Maruti 2 - Hyundai 3 – Toyota 4 – Chevrolet 5 – Volkswagen 6 - Others
Annual Family Income: 1 - Below 5 lakhs 2 – 5 to 10 lakhs 3 – 10 to 15 lakhs 4 – Above 15 lakhs