ABSTRACT

The automobile industry today is the most lucrative industry. Due to increase in disposable
income in both rural and urban sector and availability of easy finance are the main drivers of
high volume car segments. Further competition is heating up with host of new players
coming in and global brands like Porsche, Bentley, and Ferrari all set to venture in Indian
market. This research will be helpful for the existing and new entrant car manufacturing
companies in India to find out the customer expectations and their market offerings. Indian
Automobile car business is influenced by the presence of many national and multinational
manufacturers. This paper presents analysis of research in the area of Consumer Behavior of
Automobile Car Customer. Proper understanding of consumer buying behavior will help the
marketer to succeed in the market. All segments in Indian Car industry were studied and
found that buyer has different priority of behaviors in each segment, where as main driver for
car purchase is disposable income.

Value for money, safety and driving comforts top the rank in terms of customer requirement;
whereas perceived quality by customers mainly depends on brand image. For this research,
methodology adopted was to study the research papers in the area of Passenger Car segment,
study the purchase decision process and its interaction with behavior parameters across all the
segments of car such as small & Hatch Back segment, Sedan class segment, SUV & MUV
segment and Luxury Car segment. The objective of this study is the identification of factors
influencing customer’s preferences for particular segment of cars. This paper also attempts to
consolidate findings & suggestions to overcome present scenario of stagnancy in sales and
cultivate future demand for automobile car market.
INTRODUCTION

India being the second most populated country in the world and the growth rate of Indian
economy is also high as compared to developed countries, which attracts the presence of
huge demand in the Automobile Small Car Industry. India is becoming emerging market for
worldwide auto giants. India is on growth path and has lowest passenger vehicle penetration,

There are various reasons for the growth of the Indian automobile market such as –

1. The people have more disposable income as economy is growing.

2. Increase in the need of mobility due to urbanization and leisure travel.

3. Car Finance options available from Financial Institutes at reasonable rate of interest.

4. Availability of service centers and spare parts in near vicinity. 5. Improvement in highway
infrastructure.

For most of the people, purchasing a car is the second most important and expensive
decision, next to purchase of a house; for the automotive manufacturers, first-time car buyers
give them the opportunity to create positive brand image which definitely could be reflected
in next coming years because consumers could make repeat car purchasing.

The concept of “buying behavior” is of prime importance in marketing and has evolved over
the years. It is very important to understand consumer buying behavior as it plays a vital role
while purchasing products. Day to day human wants are growing, expectation is growing. Car
Models are no exception to this behavior. Consumer behavior is fairly complex as Car
Purchase implies a high level of social and psychological involvement. Consumer buying
behavior is a blend of Economic, technological, political, cultural, demographic and natural
factors as well as Customer’s own characteristics which is reflected by his attitude,
motivation, perception, personality, knowledge and lifestyle.

This lead to constant modifications of Car Models and its features in terms of their size,
capacity, styling etc. and today we see a new model coming into the market practically every
quarter. Market has become very competitive and has become very ‘important place’ to study
the behavior of consumers and also provide useful insights what a consumer requires in a
product in a constant dynamic environment. Consumer behavior also differs for same Car
under below conditions.
1. New Car launch in market

2. Car is in market for 1-2 years

3. Car is in the market for more than 4 years

4. Purchase of second hand Car

It is only through research that a company will be able to study the buying behavior of
consumers. With better understanding of customer’s perceptions, companies can determine
the actions required to meet the customer’s need. They can identify their own strengths and
weaknesses, where they stand in comparison to their competitors, chart out the future
progress path and improvement.

The passenger car market changed very rapidly due to the fierce competition and advance
technology, therefore, it requires the automotive manufactures to understand the consumer’s
preference on time and take fast actions to reflect market changes quickly. So it would be
very interesting to know consumer’s preference in today’s fast-changing passenger car
market and how is the customer’s buying process.

The automobile industry of India is one of the largest in the world, contributing 7.1% to the
Gross Domestic Product (GDP)[1]. As a person moves up the ladder in his income, his/her
first priority is to buy a car. It is becoming more of a necessity nowadays to own a car than a
luxury. Presently, a 100% Foreign Direct Investment (FDI) is allowed in this area meaning
the foreign investors do not need any prior permission from the government of India. The
sales of private vehicles grew by 9.17% commercial vehicles by 3.03% and 2 wheelers by
8.29% during the period AprilJanuary 2017[2].

During the financial year 2016-17 a total of 37, 91, 540 units of passenger vehicles; 8, 10,
286 units of commercial vehicles; 7, 83, 149 units of three-wheelers and 1, 99, 29, 485 units
of two-wheelers were produced as shown in table 1 [3].

The world standing for the Indian automobile sector, as per the Confederation of the Indian
industry is the largest three-wheeler market, second largest two-wheeler market, tenth largest
passenger car market, fourth largest tractor market, fifth largest commercial vehicle market
and fifth largest bus and truck segment. In India, a total of Rs. 92, 218.42 crore or 5.02% of
the total FDI inflows in India, from April 2000 to March 2017 has been towards the
automobile industry[4]
Some of the previous studies done in various zones in India like West Haryana [5], New
Delhi [6], Jaipur [7] and Kerala [8] on car purchasing behavior have reported changing trends
as per changing times as also the effect of multinationals on the Indian automobile market.
Most studies have reported the advent of newer technology as the biggest decision maker in
this aspect.

Whereas Television advertising is amongst the biggest influencers [9] other medium like
word of mouth, magazines and ratings also have their weightage. Some research have studied
factors like family needs, fuel efficiency, pricing, safety and social status as important in
automobile buying behavior of the consumer [10] whereas others have also focused on value
for money [11], affordability [12] and brand personality alongwith the impact of
manufacturer’s websites in this decision making process [13]. The husbands in families have
been found to be major decision makers while purchase of cars [14].

TABLE 1: Automobile Production Trends in India from 2011 – 2017

Year Passenger vehicle production Passenger vehicle domestic

sales
2011-12 31, 46, 069 26, 29, 839
2012-13 32, 31, 058 26, 65, 015
2013-14 30, 87, 973 25, 03, 509
2014-15 32, 21, 419 26, 01, 236
2015-16 34, 65, 045 27, 89, 208
2016-17 37, 91, 540 30, 46, 727

In today’s world, consumers do not only consider engine performance as a major factor. They
look for those differentiating parameters, through which they can make the choice from one
brand to another. As stated by financial time, India has become fifth largest passenger vehicle
market, after China, US, Japan, and Germany. The sale of passenger vehicles too grew 9.24%
to 3.04 million during 2016-17, the fastest growth rate seen since 2010-11, when they grew
28.2%.[16]

With the dynamic international norms as regards to both business and environmental
protection, the car industry has to keep pace with the changing scenarios. There has been a
shift towards automated and electronically controlled cars. This has been brought about by
ambient intelligence systems [17] and manufacturers must keep this in mind while designing
future cars. The increasing competition among car manufacturers also means that they have
to keep a lot of data regarding consumer preferences and incorporate findings of past
marketing research. This big data management surely will help them in analyzing the
consumer preference trends and design future strategies [18]

The present paper is intended to find outcurrentpreferences of car buying behavior among the
consumers and analyze the rationale behind them.

Phases of Evolution

Phase 1- Pre-Colonial Indian Economy:

Economic history of India can be traced down to as far as 1700 AD back to the Indus Valley
Civilization. As it is evident from the coins recovered, India had good trade relations with the
rest of the world and it accounted for 33% of the world’s GDP prior to the Industrial
Revolution. (Maddison, 2003)

Phase 2- Colonial Indian Economy:

This second phase is marked by the arrival of the East India Company which helped the
British Empire to conquer India. During the British rule, Indian economy suffered extreme
strain where the British Empire purchased Indian raw material at extremely low prices and
sold finished products using the same raw material at extremely high prices. The effects were
so drastic that during this phase, India’s share of world income fell from 22.3% in 1700 AD
to only 3.8% in 1952. (Indian Economy, no date)

Phase 3- Post-Colonial Indian Economy

The third phase of the Indian Economy is the current phase and it began when India gained
independence from the British rule on 15th August 1947. The government then took serious
measures to cure and improve the Indian economy by formulating and implementing short
term plans known as the Five Year Plan. The first Five Year Plan was implemented in 1952.
This plan was based on the Harrod-Domas Model. In the 6th (target 5.2%, achieved 5.66%)
and 7th (target 5.0%, achieved 6.01% ) Five Year Plan India crossed its target growth rate.
(UPSC Guide, no date) It was during the 8th Five Year Plan when India went under major
economic reforms and opened up many industrial sectors for foreign direct investment. Since
then Indian Economy has come a long way. (Planning Commission, 2012) The 12th Fiver
Year Plan came into action in 2012 and will last till 2017. This was formulated when the
whole world was facing economic crisis. This phenomenal growth in the Indian economy can
be accredited to these Five Year plans formulated by the government. In 2006 the Indian
Ministry of Heavy Industries and Public Enterprises introduced the Automotive Mission Plan
2006-2016. The vision of this plan was to, “To emerge as the destination of choice in the
world of design and manufacture of automobiles and auto components with output reaching a
level of US$ 145 billion accounting for more than 10% of the GDP and providing additional
employment to 25 million people by 2016.” Automotive Mission Plan (2006). These forces
together have contributed in shaping and molding the buying behavior of the Indian Middle
Class and their role has been explained in the following sub chapter

The Indian Middle Class trends and future:

Middle class income group of a country is usually a direct reflection of a countries economic
health, development and overall standard of living. There are many methods of identifying
middle class income group of a country. According to Lester Thurow of MIT’s Sloan School
of Management there is a reference point, the median to be a dividing line where there would
be equal number of people on either side of the line. He defined middle class income group as
the group lying between 75% and 125% of the median. (The Economist, 2009).

In strict economic terms Indian Middle Class can be pegged down to a household belonging
to a monthly income of between $334 (Rs.20,000) to $1,667 (Rs.1,00,000). Estimated
households belonging to this criterion currently are in excess of 160 million, which is a
considerable swell from the rather tiny 25 million households in 1996. These numbers are
expected to keep growing and at a stronger rate. By 2015 this number is expected to expand
and reach 267 million. (Varma, 2013) Expected population of India in 2015 is 1.3 billion.
Therefore Indian middle class would comprise roughly 20% of Indian population by 2015.
(World Population Statistics, 2013). McKinsey and Company published a report on the
projected growth of Indian economy. According to this report, over the next two decades
income levels are supposed to triple. India will also climb up and become the 5th largest
consumer market from its current position of 12th . 1 There is an overall continuous rise in
these figures. The report predicts that by 2025, over 291 million Indians will escape poverty
and enjoy a better standard of living. (Ablett et al, 2007, p. 12)
1Annual income: globals = >1,000,000 rupees; strivers = 500,000–1,000,000; seekers =
200,000–499,999; aspirers = 90,000–199,999;deprived =

India—unlike China, where urban growth is spread across a large number of cities—the
economy will continue to be dominated by the megacities (Delhi and Mumbai) plus the six
next-largest urban agglomerations.2 Nevertheless, a handful of smaller places, such as
Chandigarh and Ludhiana, will have per capita incomes rivaling those of the major cities and
emerge as attractive markets. The shift in spending power from the countryside to the cities
will place the bulk of India’s private consumption within easier reach of major companies.

Today 57 percent of private spending is spread across rural areas, but by 2025 cities will
command 62 percent of the country’s spending power. Along with the shift from rural to
urban consumption, India will witness the rapid growth of its middle class—households with
disposable incomes from 200,000 to 1,000,000 rupees a year.3 That class now comprises
about 50 million people, roughly 5 percent of the population. By 2025 a continuing rise in
personal incomes will spur a tenfold increase, enlarging the middle class to about 583 million
people, or 41 percent of the population. The purpose of this dissertation is to understand the
changes in the Indian Middle class market with reference to purchase of automobiles;
especially Maruti Suzuki Cars. Further it identifies, if there is a connection between brands
and the consumer decision making process and how it has evolved in the last 5 years. This
study is aimed at helping marketers have a better understanding of the middle class, Maruti
Suzuki in the family market. It also aims in finding what factors influence brand choice and
consumption behavior for this product category.
From a research perspective, there are very few studies involving the Indian Middle class and
the car purchasing consumer category. (Alamgir, Nasir et al, 2010) wrote a paper on the
influence of brand name on consumer decision making in purchase of cars. The methodology
included distribution of questionnaires and survey method. It was concluded that well known
branded cars are very famous among the people because consumers trust the brand name.
However there wasn’t any special focus on the middle class as such. Therefore, this study
could lead to further research studies in the future. Finally, this literature adds to existing
studies on car brand choice

Overview of the Indian Automobile Market

Indian automotive industry is one of the largest auto markets in the world. It has grown up
very fast in last one decade. India’s passenger car and commercial vehicle manufacturing
industry is 6th largest in the world after China, US, Japan, Brazil and Germany. (Invest India,
2012) The automobile industry is one of India’s major sectors and accounts for 22% of the
country’s manufacturing GDP. Indian Automobile market is majorly dominated by two
wheelers and they account for a total of 75%. It might seem then that the car industry is fairly
small in India as the majority is dominated by two wheelers but that is not the case due to size
and population of India. According to industry statistics provided by SIAM (Society of Indian
Automobile Manufacturers), passenger car sales crossed two million units in financial year
2011-2012. (SIAM, 2012) The car industry continues to grow stronger and faster still. The
Indian Government has provided automobile manufacturers with various incentives as the
Automotive Mission Plan 2006-2016 states that the aim of this plan is to accelerate and
sustain the growth of automobile sector of India and make India the global automotive hub.
Like many other industries in India, the automobile industry is also dominated by 2-3 major
players. The major players of the Indian automobile market are. (‘Top Automobiles
Passenger Vehicles Companies in India’, no date)

1.4.1. Maruti Suzuki: Maruti Suzuki India Limited (MSIL, formerly known as Maruti Udyog
Ltd.) is a subsidiary of Suzuki Motors from Japan. Maruti Suzuki is lovingly referred to as
people’s car in India. It is the current market leader with 49.24% market share in the Indian
car market.

1.4.2. Hyundai Motor India: Hyundai Motors India is a wholly owned subsidiary of India and
is the second largest car manufacturer in India. Hyundai Motor India currently offers 10
different car models across its product range. (Kaulgi, 2012) Hyundai has the second largest
market share in Indian car market and accounts for 21.44% of the total market share.

1.4.3. Honda Cars India: Honda cars India holds India’s third largest chunk of Indian car
market and holds 6.56% of the market share. 1.4.4. Tata Motors: Tata Motors Ltd. is a part of
Tata Group and is India’s largest automobile company. It is also world’s fourth largest truck
and bus manufacturer. (‘Top Automobiles Passenger Vehicles Companies in India’, no date)
Tata motors also holds the four largest chunk of market share and accounts for 6.18% of the
total Indian car market.

As demonstrated in the pie chart above, even global giants like Volkswagen, Fiat and General
Motors are struggling to gain market share.
STATEMENT OF THE PROBLEM

Due to the emergence of globalization and liberalization there is a stiff completion among the
Automobile industries which are focusing attention in capturing the Indian markets an
automobile are no more considered as luxury once, now occupies a part of dayto-day life and
has become a necessity. Customers have now changed their attitude that yesterday’s luxuries
are today’s necessities. To be a successful marketer it is absolutely essential to study the
perceptions of the prospective buyers and track their drivers of those perceptions.

OBJECTIVES OF THE RESEARCH

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

· To determine the demographic variables of the customers of different brands of cars.

· Examine the customer perception about the cars.

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

· The research tracks responses at following two layers

1. Product related parameters

2. Dealer related parameters

To analyze the psychographic variables of the customers of different brand of the cars.
SCOPE OF THE STUDY

It is aimed to study the car market and buying behavior of the customer. The project is
analyzed the demographic, psychographic and buying characteristics of the customers in
buying the car. It includes the detailed study of customers focusing on the various parameters
that lead to identifying and understanding the perception of the customer in buying the car
brands.

Significance of the study

A brand is a set of expectations and associations evoked from company or product. A brand
is how key constituents- customers, employees etc. experiences what you do. Some brands
are of such great importance to people, that we speak of them as a part of one’s life and
identity, being used to express one. Some would say that these brands have their own
personality, the brand perception, which can be defined as the set of human characteristics
associated with a given brand.

Because many people interact with brand as though they were other people, it is important to
understand what a brand perception consists of, and how its characteristics can be used to
affect the relationship between the brands and its users. Knowing and understanding the
brand perception gives a good insight into this relationship, and into peoples’ attitudes
towards the brand, and is also an important guide to communicating the brand.

Like apparel and lifestyles brands, a car is extension of one’s perception. People buy cars
which either matches their personalities or those which provide them opportunities of being
perceived as somebody they aspire to be. This becomes significant as consumers move up the
value chain from small compact cars to midsize and upwards.
LITERATURE REVIEW

A brand is “a set of expectation and association evoked from a company or product. A brand
is how your key constituents- customers, employees, shareholders etc. experience what you
do.” Some brands are of such great importance to people, that we speak of them as a part of
one’s life and identity, being used to express one. Some would say that these brands have
their own personality, the brand personality, which can be defined as “the set of human
characteristics associated with a given brand”. Thus, it includes such characteristics as
gender, age and socioeconomic class, as well as such classic human personality is both
distinctive enduring.

Based on the premise that brand can have the personalities in much the same way as humans,
brand personality describe brands in terms of human characteristics. Brand personality is seen
as valuable factor in increasing brand engagement and brand attachment, in much the same
way as people relate and bid to other people. Much of the work in the area of brand
personality is based on translated theories of human personality and similar measures of
personality attributes and factors. Brand personality refers to the set of human characteristics
we associated with the brand. A common way of determining this is to reply on the metaphor:
“If the brand was a person, what would he/she be like?” we then list and group the traits to
describe the brand as, for example: caring, approachable and trustworthy These two
companies are actually competitors in a service industry. If you were asked of these two
companies you would like to be your fiends, you would probably choose company B, as did
95% of other respondents. It is not surprising that the service level of company B can be
better experience for customers than that of company A. it is also easy to conclude that if
customers consistently experience these differences between the two companies, then the
brand image of company B will be much better than company A.

A further point of interest arising out of this research is that people tend to prefer brands that
fit their self-concept. Everyone has views about themselves and how they would like to be
seen by others. And they tend to like personalities that are similar to theirs, or to those whom
they admire. Thus, creating brands with personalities similar to those of a certain group of
consumers will be an effective strategy. The closer the brand personality is to the consumer
personality (or one which they admire or aspire to), the greater will be the willingness to buy
the brand and deeper the brand loyalty.

The Creation of Brand Personality

Brand personality traits are formed and influenced by any direct or indirect contact that the
consumer has with a brand. A brand, unlike a person, cannot think, feel or act. A brand has
no objective existence at all; it is simply a collection of perception on the mind of the
consumer. Consumers accept the marketing actions to humanize brands. One explanation fort
this can be found in the theories of animism, which suggest that there exists need by people to
anthropomorphize objects in order to facilitate interaction with the nonmaterial world.
Anthropomorphize occurs when human qualities are attributed to non human objects, e.g.
brands. Consumers easily assign personality quality to inanimate objects like brands in
thinking about the brands as if they are human characters.

The brand-person associations can also have a more personal nature. Brands can be
associated with person who use or used that particular brand, for example a close friend or a
family member. Also, brands received as gifts can also be associated with the person from
whom the gift was received. These person associations serve to animate the brand as a vital in
the minds of the consumers. Obviously, this aspect is much less under the control of the
marketers. Indirectly, the brand personality is created by all the elements of the marketing
mix. Betra, Lehman and Singh suggest that the personality of a brand is created over time, by
the entire marketing mix of the brand - “its price (high or low, odd or even), retail store
location (imaginary associations), product formulation (ingredients, benefits), and product
form (solid/liquid. Etc.), packaging details (color, size, material, shape), symbol; used an all
phases of the brand communication, sales promotion, and media advertising”.

The process will be

 Define the target audience

 Find out what they need, want and like

 Build a consumer personality profile

 Create the product personality to match that profile

Non product related brand personalities drivers

User imaginary – user imaginary can be based on either typical users (people you see using
the brand) or idealized users (as portrayed in advertising and else were). User imaginary can
be powerful driver of brand personality, in part because the user is already a person and thus
the difficulty of conceptualizing the brand personality is reduced. For example Charlie has a
feminine, strongly independent brand personality driven by it user imaginary. The upscale
personality of Mercedes and the sexy, sophisticated personality of Calvin Klein are similarly
influenced by user imaginary.

Sponsorship – activities such as events sponsored by the brand will influence its personality.
Swatch, for example, reinforces its offbeat, youthful personality will targeted sponsorships
that have included the Freestyle Ski World Cup in Breckenridge, the first International.

 Age – how long a brand has been on the market can affect its personality. Thus new
entrants such as Apple, MCI, and Saturn tend to have younger brand personalities than brand
such as IBM, AT&T, and Chevrolets, and it as all too common far a major dominate brand to
see as strongly and old fashioned, a brand for older people

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

controlled and can have extremely strong associations. Apples bitten apple, the Marlboro
cowboy, the Michelin mans all helps to create and reinforce a personality for their brands.

Why use brand personality

The brand personality construct can help brand strategies by enhancing their understandings
of people’s perceptions of and attitude towards the brand, contributing to a differentiating
brand identity guiding the communication effort and creating brand equality.

Enriching understanding

The brand personality metaphor can help a manager gain an in-depth understanding of
consumer perceptions and attitudes towards the brand. By asking people to describe a brand
personality, feelings and relationship can be identified that often provide more insight than is
gained by asking about attribute perceptions.

Contributing to a differentiating identity

Strategically, a brand personality, as a part of a core or extended identity, can serve as the
foundation for meaningful differentiations. Advertising agencies such as Young & Rubicam
and Ogilvy & Mather routinely include a brand personality statement as a part of their brand
positioning strategy.

Guiding the communication effort

Tactically the brand personality concept and vocabulary communication the brand identity
which richness and texture to those who must implement the identity building effort. Practical
decisions need to be made about not only advertising but packaging, promotions.

Brand personality of cars

Are you what you drive? That is what are companies seem to be asking and in the same
breath trying to convince you about. In other words, are you the Hyundai accent owner who
commands immediate respect wherever she goes (including fro the potential father-in-law) or
are you the suave executive from the Chevrolet ad who is ever ready to share a moment with
loved one? With a plethora of new models in the market, and generic benefits (such as space
or fuel efficiency) of a particular car segment hardly a distinguishing factor between car
models, marketer are increasingly differentiating on the emotional pay-off a particular car
model/brand provides to the customer. This, of course, varies from the segment to segment
and also on how long a particular model has been in the market. For instance, while
advertising for entry level or smaller cars tends to focus more on the rational or functional
benefits of the vehicles, the differentiations is increasingly on the emotional benefits when it
comes to high end cars. “Generally, it has been seen as one move up the value chain, the
differentiation is more on the emotional pay-off. People buy car as an extension of their
personality rather than just features. A car, in India, helps build up show off, social esteem
value. The advertising would also vary according to the segment.

Manish Kumar Srivastava, A.K. Tiwari [1], studies the consumer behavior for A3 segment
vehicles such as Honda City and SX4 in a particular region Jaipur. Data collected from 100
respondents 50 each from Honda City and Maruti SX4. Respondents were considered from
various backgrounds like Gender, Occupation, Income class. Also customer purchase
parameters considered for study are Price, Safety, Comfort, Power & Pickup, Mileage, Max
Speed, Styling, After Sales Service, Brand Name and Spare Parts Cost. Based on above
parameters and analysis made in this it revealed that, while purchasing A3 segment car
Customer give much importance to Safty, Brand Name and seating and driving comfort. Also
word of mouth publicity and advertisements in car magazines are more effective
communication medium for promotion of Cars. Prasanna Mohan Raj [2], studied the factors
influencing customers brand preference of the economy segment SUV’s and MUV’s. Data
collection was made through direct interaction and customer intercept survey using
questionnaire. Descriptive analysis was used to transform data into understand format and
factor analysis was used for identification of factors influencing customer preference. In light
of study findings, the preference of a given brand can be explained in terms of six factors
namely Product reliability, monetary factor, trendy appeal, frequency of non-price
promotions offered, trustworthiness and customer feeling or association towards brand. There
is need for marketers to take these factors into consideration when crafting product
innovations in the SUV segment of Automobile market.

Nikhil Monga, Bhuvender Chaudhary, Saurabh Tripathi [3], this research attempts to answer
some of the questions regarding brand personality of selected cars in India by conducting the
market research. This personality sketching will help in knowing what a customer (or a
potential customer) thinks about a given brand of car and what are the possible factors
guiding a possible purchase. Similarly, the idea of measuring the customer satisfaction will
serve the same purpose of determining the customer perception. Thus, by measuring the
willingness of exciting users of a car to recommend it to others will help the car
manufacturers to chock out the entire customer Buying Behavior. The study shows that brand
perception is something which starts building up before a car is purchased and goes on with
its use and is reflected in the recommendations. The customer makes to his acquaintances for
the same car. Also it is seen that the customer might not be using the car still he holds the
perceptions about it. Brand personality of a car is enforced by the sellers in the mindsets of
the customers and customers reacts to it by forming their perception about the car and this
reflects in the overall brand image of the car. So brand image and brand personality
complement each other and the brand perception. ISSN 2250-3153 www.ijsrp.org aids the
building of brand images. As per the study findings, dealers play a very important role in
building up the brand perceptions of the cars.

Samin Rezvani, Goodarz Javadian Dehkordi, Muhammad Sabbir Rahman [4], this paper
reviews the country of origin and different variables that influence consumer purchase
intention, also highlight the relationship of variables and customer purchase intention. Study
demonstrate that people care about which country products come from and where they are
made and consider these factors when evaluating the quality of product. Stereotypes of
country and the preferences of customers, influence the purpose intention. Political system,
culture and the economy of the country can be a cause of sensitivity to people. There are
many factors that have an impact on consumer purchase intention. Research and
methodologies have shown that even when consumers can evaluate all the intrinsic product
characteristics by expressing the product, the effect of extrinsic cues has more influence on
consumer product evaluation. Country of origin is one of the extrinsic cues; in addition, there
is no doubt that country of origin has considerable influence on the purchase intention
process.

K.Vidyavathi [5], the study throws light on various aspects that the manufactures should
concentrate on to attract the prospective buyers. The demand for the small Automobile
segment is increasing because of the growing number of nuclear families as well as parking
problems. Hence the manufactures should find out the needs, wants, tastes and preferences of
consumers in order to design the products. Also fuel economy and driving comfort are the
most important parameters followed by availability of spares and their price. Balakrishnan
Menon, Jagathy Raj V.P.[6], study findings shows that due to price difference in Gasoline
and Diesel, about one third of the car owners were having diesel vehicles. The research
results showed that about one seventh of car for the city drive for family usage, while using
the second car for office and business usage. Foreign brand cars show clear preference in the
Kerala car market. Also it was observed that in the information gathering and consumer
purchase initiation stage, TV commercials on car models and brands, search on internet
website of the manufacturer and visit to dealers / distributors were the prime sources where
customers gathers information on car models.

Ramita Verma, Shubhkamana Rathore [8], studied the luxury car segment of India.
Researches and studies have revealed that the luxury car market is growing at a steady speed
of 25% per annum with more and more numbers of luxury cars entering Indian car market.
Luxury cars are preferred by HNI (High Net worth Individuals). HNI wants to differentiate
themselves from crowd for various reasons. Change in attitude of the customer accounts for
the sudden acceleration in the Luxury car Market in India, as the emphasis has been shifted
from price consideration and affordability to design, quality and pleasure. Study also throws
light on market drivers of luxury cars like

Political-government taxation, business sentiments, import-export policies, government

stability.

 Demographical factors like Consumer trends, Income growth, spending power.

 Customer requirements such as status symbol, indulgence, technological factors.

 Socio cultural factors such as Lifestyle and preferences of people which impact their choice
of types of automobiles. Social norms that impact the decision to own and use automobiles
versus other means of transport.

E. Thangasamy & Dr. Gautam Patikar (2014):The consumers aim at attaining optimum
consumer surplus, be it durables or non- durables, while making such purchases to satisfy
their wants. For this reason, the marketers do continually rely on research studies about the
dynamic consumer behaviour to position their product planning and development strategies
to meet the requirements efficiently. This complex consumer buying behaviour does,
therefore, necessitate a critical investigation by the researchers in every nook and corner of
the world. In this paper researcher has study about buying behavior of consumer, the behavior
of consumer not same for any locality. The Behavior of consumer are depend on their
income, standard of living, size of family there are factors influence of consumer buying
behavior.

Rakesh Kumar (December 2013):The term consumer behaviour is defined as the behaviour
that consumer display in searching for, purchasing, using, evaluating and disposing of
product, services and ideas that they expect will satisfy their needs. Consumer behaviour is
the process whereby, individuals decide whether, what, when, where, how, and from whom
to purchase goods and services. Due to the increase in income level and easy finance being
provided by all the financial institutes, the four wheelers sales have been significantly
increased. This paper we analysis the buying behavior of consumer towards four wheelers
Industries. And how the consumer has preferences specific brand, quality products, good
services and so on.

D. ARTHI & K. MALAR MATHI (Oct 2013):Customer playing the three distinct roles of
user, payer and buyer differ in their intention towards buying a product, some purchase for
need, while some purchase for the want of status, status seeking consumers are those who
give much importance to the non functional attributes of the product such as beauty,
attractiveness, brand, social comparison, prestige etc than the functional attribute. Car a
common means of transport is bought by people not only for the transportation purpose, it is
also bought for comfort, convenience, fun, prestige/status. The research paper has indicate
consumer has buy four wheelers for increasing the income and to show their status.
Ratan Binodini Amiya Priyadarsini (May 2013):As India’s economy continues to grow at a
rapid pace, the automobile industry will be a key beneficiary. This is widely true across
automotive markets—from those serving customers with four-wheelers to those offering
commercial vehicles. The main factors behind such growth are the increasing affluence of the
average consumer, overall GDP growth, the arrival of ultra-low-cost cars, and the increasing
maturity of Indian original equipment manufacturers (OEMs). However, India’s path to mass
motorization will be very different from that of developed countries; it must first develop the
new technologies, business models, and government policies that will pave the way to
increased automobile penetration. The automotive sector is one of the core industries of the
Indian economy, whose prospect is reflective of the economic resilience of the country. This
research paper are give the information for how the automobile sector has grown up in this
city due to increasing the GDP rate in the city.

Dr. H. S. Adithya (Jan 2013):Automobile Industry is one of the fastest growing sectors in our
country. Cars were once considered as a luxury and now it has become a necessity. They
have become a part and parcel of today’s life and most of the car manufacturers target the
middle class segment to a great extent. The introduction of small cars is a classic example for
this. Today’s consumer has plenty of options available to him. We are in a consumers market
where the marketers do not merely satisfy a need but try to achieve consumer delight. The
decision to purchase a car is not a one man decision. The purchase is normally influenced by
many including their own perceptions and behaviour.The author has clearly define in this
paper perception of consumer towards car owner and their behavior of purchasing decision.
Every consumer decision different so they analysis then give the opinion.

Prof. Elizabeth Chacko, Ms. Punnya Selvaraj (2014):The Automobile Industry is growing
and if compared the sales and production of four wheelers is more. Also if we compare the
four wheeler models like car which can be driven by females were least in market because the
market was male dominant. But now there is drastic change. Earlier car which can be driven
by female was only Maruti 800, all other like Tata Sumo, Bolero, Ambassador etc. In this
new era we can see segment for small four wheeler car quite large. This research paper has
most innovative, author are analysis only female consumer Pattern and how they driving new
car and also the purchasing pattern of their brand, Services, quality, mileage etc

Prof. Madhavi Dhole, (June 2013):The automobile sector is a key player in the global and
Indian economy. Indian automobile industry embarked on a new journey in 1991 with de
licensing of the sector and subsequent opening up for 100 percent FDI through automatic
route. In India, the automobile industry provides direct employment to about 5 lakh persons.
In this paper the author has given information about the history of automobile sector and they
also inform how the Indian market are developing & increasing by financial way so the
consumer purchasing power has increasing.

K.P Najeemudeen and Dr. N. Panchanatham (December 2014): India’s automobile industry is
one of the key drivers that boost the economic growth of the country. Spurred by rapid
economic growth, personal vehicle ownership in India is increasing at a fast pace. The
relative popularity of the various vehicle segments by size and price are also undergoing
marked changes. A fast-paced shift towards private motorized transport is a substantial
change, especially in a country where motorized and non- motorized informal transport
serves the majority of the trips, along with public transport in bigger cities. The research
paper has giving knowledge about the automobile sector and how it was small and not that
much develop and now its to much growth and also getting perpetual succession.

Vikram Shende (February 2014): The automobile industry today is the most lucrative
industry. Due to increase in disposable income in both rural and urban sector and availability
of easy finance are the main drivers of high volume car segments. Further competition is
heating up with host of new players coming in and global brands like Porsche, Bentley, and
Ferrari all set to venture in Indian market. All segments in Indian Car industry were studied
and found that buyer has different priority of behaviors in each segment, where as main
driver for car purchase is disposable income.

Now a days competition has to much increasing due to this every company will try to capture
the market and develop their business, similarly four wheelers sectors are increasing due to
easy finance available, different-different attractive scheme has came so consumer can easy
affordable the four wheelers.

M.C. VIJAYAKANTH URS, A N SANTOSH KUMAR, A.N. HARI RAO (May, 2013)
Automobile Industry has played a major role in the Indian economy during the last decade.
With the Indian market opening its wings to MNC‘s, the competition has become severe in
terms of product quality and service. This has brought forward the focus on customer
satisfaction especially at the dealer level. Companies now are becoming more responsive,
they offer a better product and keep improving it through Total Quality Management
technique. Dealers are core part of this they are not just sale the four wheelers to the customer
but also providing after sale services. When the dealers are giving good services or quality for
any product then consumer are satisfy. Consumer are important part of market with them not
any product will sale in market.

M.C. Vijayakanth Urs, A N Santosh Kumar, A.N. Hari Rao (OCT 13)

Customer satisfaction is the key to business servers. According to a study Customer in India
are more concerned with the service that are performed at timely manner with the affordable
cost The Dealer in India must be responsive to all the needs of their customer; simply
providing a good product at a good price is no longer enough. satisfied customer’s form the
foundation of any successful business as customer satisfaction leads to repeat purchase, brand
loyalty, and positive word of mouth. Customer are satisfy only they get good or positive
services from the dealers. It is good enough to the dealers when they maintain proper quality
so customer can attract.

Dr. M. Prasanna Mohan Raj, (January 2013): The heterogeneous behaviour of consumers
towards the choice of various brands in a particular segment can be explained by the
influence of various factors underlying their decisions and its brand equity. The objective of
this study is the identification and study of factors influencing customers’ brand preferences
of the economy segment SUV’s and MUV’s as well as brand equity as a function of product
choice. This paper has indicate how the customer are prefer the particulars brand for example
there are people select specific brand in four wheelers like Maruti or TATA, so people are
purchase car which they really like. Brand factors are core part for customer point of view.

Gupta Bhuwan, Agarwal Nisha (2013): The Indian Automobile Industry has got a incredible
market potential. With the growth of population and change in their pattern of life style as a
result of urbanization, there has been a rapid increase in demand for Indian automobiles. The
purpose of this chapter is to survey the growth of Automobile Industry in India and their role
in economic development and to bring out the profile of the study area. In recent days India is
witnessing a change in consumerism. The market is now mainly consumer driver. The focus
is shifting for product based marketing to need based marketing. Consumer is given many
options to make a decision. Passenger car segment is no omission to this general trend. In this
paper the author has indicate costumer preferences to their car and how they behave for
taking decision to purchases car.
Dr.G.Syamala,VinayakGhosh(DEC2012):TheautomotiveindustryinIndiaisoneofthelargestinth
e world;itisoneofthefastestgrowingindustriesglobally. Its passenger car and commercial
vehicle segment is the sixth largest in the world. Indian small car market is increasing by
leaps
andbounds.Theindigenousmarketforsmallcarsnowoccupiesasubstantialshareofaround70%ofth
ean nualcarproductioninIndiawhich is about one million. Almost all automobile in India are
competing with each other in terms of design, innovation, pricing and technology. The
following paper is an attempt to study the satisfaction level of customers who own small car.
The research covers the areas of Aundh, Pashan, Baner in Pune, Maharashtra. The author has
inform in this paper about the small car and consumer satisfaction regarding this for example
Maruti alto, maruti 800, Chevrolet Beat. The small car buy only the small family, they are
satisfy to purchase small car with good mileage and services.

Dr. K. Ravichandran (December):This paper has made a scientific approach to identify the
key factors that influence the consumers (1) while selecting the appropriate four wheelers
especially cars by considering the parameters such as mileage, maintenance cost, brake
failure, comfort and brand which are obscure and imprecise in nature. With regards to the
selection of four wheelers like cars, the consumers are in dilemma to identify and select an
appropriate model. The survey has been conducted in an automobile industry by analyzing
the customer’s preferences in buying a car. Whenever any consumer buy four wheelers they
should identify which company has providing good quality, services, mileages and most
important after sale services so consumer can buy without any hesitation.

Nikhil Monga (February 2012):The concept of “buying behavior” is of prime importance in

marketing and has evolved over the years. It is important to understand consumer buying
behavior as it plays a vital role in crating an impact on purchase of products. The human
wants are unlimited and always expect more and more. Car Models are no exception to this
behavior. This lead to constant modifications of Car Models & its features and today we see a
new model coming into the market practically every quarter. The market is a very important
place to study the behavior of consumers and also provide useful insights what a consumer
requires in a product. It is only through research that a company will be able to study the
buying behavior of consumers. The four wheelers sectors has launch any car before they
launch they analysis the market, locality, income level of particulars group or family for
example TATA Nano has capture middle class people and they get good response and also
increasing sales.
NATARAJ S; DR. N.NAGARAJA (June 2012): Online bookings and online purchase are the
current wave in Indian car industry. Internet is gradually hitting the core of every industry
including the car industry. It creates a greater awareness of the vehicle and influences the
buyer to purchase. Internet is believed to have a greater impact on the sales process and will
definitely give higher level of sales satisfaction. In this paper has giving the information
about online purchase or booking four wheelers, due to rising the competition company has
develop their strategy to sell the car for example now a days most popular website is
CarDekho.com and CarTrade.com both of this getting nice response from customer and
customer will satisfy.

Minwir Al-Shammari (November 2014) In today's high competitive global market, the
importance of the service sector has sharply increased in both the developing and already
developed countries. Service providers are primarily focused on delivering superior service
quality to achieve high levels of customer satisfaction and loyalty. This research paper has
the author has study or examine the quality providing by automobile company and whether
the consumer are really satisfy with this services. To develop the reputation in the business
market every company have to do the good services and maintain the quality.

CUSTOMERS PERCEPTION TOWARDS TATA NANO CAR IN COIMBATORE. (May,

2014) The Indian automobile industry is the tenth largest in the world with an annual
production of two million units. Indian Auto Industry promises to become the major
automotive industry in the upcoming years and the industry experts are hopeful that it will
touch ten million units mark. Tata Motors dominates over 60% of the Indian commercial
vehicle market. Tata motors are the largest medium and heavy commercial vehicle
manufacturers in India. This research paper has purely base on only one four wheelers that is
TATA NANO. This car is more comfort to suitable for small family even price are also
reasonable so consumer can easily affordable. Verities of colors and effective advertising
display by company so customer are attract more.

Consumers’ Perceived Quality, Perceived Value and Perceived Risk Towards Purchase
Decision on Automobile. 2011: As the level of competition keep on increasing in Malaysia
automobile market, it is essential for every automobile producer companies to understand
customer insight in order to further increase their share of wallet. Thus, they need to
understand what factors might influence their customers’ decision in purchasing an
automobile. Due to raising the competition in the market every company has to do something
new or innovative so people can buy quickly. If we talking about the quality Honda name has
came in our mouth. It is not that much costly but people can buy for showing their status.

Third edition Michael Solomon,Gary Bamossy Consumer Behaviour. The field of consumer
behaviour covers a lot of ground: it is the study of the processes involved when individuals or
groups select, purchase, use or dispose of products, services, ideas or experiences to satisfy
needs and desires. In its early stages of development, the field was often referred to as buyer
behaviour, reflecting an emphasis on the interaction between consumers and producers at the
time of purchase. Consumer response may often be the ultimate test of whether or not a
marketing strategy will succeed. In its early stages of development, the field was often
referred to as buyer behavior, reflecting an emphasis on the interaction between consumers
and producers at the time of purchase. Every consumer decision, purchase behavior, buying
power are different its not analysis for quickly. In this book the author has given details how
the consumer behavior changes for there lifestyle, culture, income level etc. some time
consumer behavior or their decision are unique in nature.

Dr. khaled ibn Abdul-raheman Al-jeraisy : As a consumer behavior defined as the activity of
the consumer engages in when looking for a goods and a services to satisfy his need or want
and when evaluating, obtaining, using. In addition to related decision making processes.
When any consumer has to take decision to buy the product he should analysis or getting
information for particulars product then he will purchase to take decision. After the
purchasing the product and using this consumer are satisfy. For example when the consumer
are take decision to buy four wheelers they he will get information for other people about this
car and then he purchase. Some time company has giving the test Drive also if customer like
than they buy otherwise they move to buy other four wheelers.

Inamullah khan (March 2012): The results show that customer satisfaction has significant
while customer behavior has impact on customer loyalty. The implications of the study are
that a company should better manage their relationships with the customers as a competitive
policy in four wheelers market place. The crucial part of this when the company has
providing better services and also the good quality the consumer can trust blindly for this
company and company has to fulfill the all requirement which consumer wants. It is
significant important to analyze it in the context of customer behavior and customer
satisfaction, these two variables are of immense important to analyze the customer loyalty.
Firms can maximize level of profitability by providing safe and sound products and services
to their loyal customers. With this the company has not just giving good product but they
provide after sales service to the customer.

Dacia-Group Renault -focus to customers’ satisfaction:The decisions of a company with

global vision is oriented mainly on product markets rather than on the domestic market. Since
2000 we witness companies focus on knowing how to conquer a market (marketing know-
how), to the will to choose strategic alternatives, sustained by the will to act according to a
strategy anchored to the changes in the company’s marketing environment. Thus, now the
company becomes a producer of product proposals offered to the market, the consumer
produces satisfaction, the distribution produces exchanges, and the environments are
producing beliefs. The best example of this long time ago Mahindra & Renault are merger
but now a days when the Renault has launch their individual four wheelers i..e Renault
Duster in Mumbai area it is good responses for this car, even with attractive colors consumer
are not just satisfy but also delight. Renault are capture the market very quickly and they not
just launch on four wheelers they are try to doing something innovative so consumer car
attracting more for this company.

K. J. Vinodini (Jan-Mar 2014): The Automobile Sector plays a very important role in the
economy, where they manufacture millions of wheelers and sell it year by year. This sector is
the fastest growing sector where it holds the ‘n’ number of customers for buying their
vehicles. The wants are unlimited in nature; though a person belongs to a middle class family
his desire in buying a four wheeler can‘t be predicted. People may belong to rural or urban
area but they want to change their lifestyle at least by consuming a car. The four wheeler
market is getting expanded day by day with new innovations. As we all know due to
increasing the population, competition also increasing day by day, year by year. Every new
company has enter in the market specially in four wheelers sector.

Paul Greenberg CRM at the speed of light, Third Edition: In the business market selling a
product like four wheelers or any luxury car is not that much easy task for sales persons.
When he talk to the consumer for the car feature, whether the customer agree with him and
whatever he said about the product. In whole process of marketing if businessman really want
to do the satisfy the customer then Customer Relationship has crucial part of marketing
process. To make a good relationship with the customer, businessman or Dealers has give
special offers, Discount, Schemes, to providing easy finance when the customer buy four
wheelers.
When the term CRM is use in business process, we are typically talking about a set of
possible interaction that lead to a result from a customers. This is governed by business rules
that are set by the company.

Philip Kotler, Marketing Management: analysis, planning, implementation, and control. 9th
edition . The aim of four wheelers industries has to satisfy target customers needs & their
wants. To identify or analysis consumer market and consumer behavior is not that much easy
task. The four wheelers sectors has introduce any product they looking first or analysis the
individual, family, group, high class people as well as low class people. With that or after the
analysis whole market they launch product. For example in six to seven year ago luxury car
like BMW, Mercedes are not that much popular in Mumbai area, as income level are
increasing for people they are starting to launch in Mumbai are now they are running well in
this area. Due to increasing the technology four wheelers market has try to do every time
innovative, creative. For that second example in four wheelers more comfort in that TV
facility, Google map, automatic lock system etc

Consumer Behavior sixth edition by Leon G. schiffman and Leslie Lazar kanuk: To run
successful business in the business Market, business man has to focusing on competitors and
also the customer satisfaction. As specially in four wheelers industries making innovative
ideas that have been developing world class four wheelers in the market. Due to changing
pattern & lifestyle needs wants to the consumer. Whenever four wheelers industry has
making the product it aim to helping the safety of every individual customer. When the four
wheelers sectors build up any product they take care and protect the consumers its creating
good image in customers mind. The luxuries example in that Jaguar, Range Rover, Land
Rover this four wheelers are highly costly in the market but there are consumer for showing
their status they can buy this. In Mumbai area this kind of four wheelers are hardly buying for
few consumer either top industrialist or Politician.

Consumer Behavior Buying, Having, and being: sixth edition by Michael R. Solomon
Consumer satisfaction is determine by the person’s overall feeling toward the product after
purchase. There are many factors influencing preference of product quality, including price,
brand name, and product performance. Satisfaction is often determining by the degree to
which a product’s performance is consistent with the consumer’s prior expectations of how
well it will function. Consumer satisfaction is determining by overall feelings, or attitude, a
person has about a product after has been purchasing consumer engage in a constant process
of evaluating the things they buy as they integrate these products into their daily consumption
activity.

Consumer Behavior ninth edition by Leon G. Schiffman, Leslie Lazar Kanuk: It is important
to understand how consumer attitudes vary from situation to situation. For instance, it is
useful to know whether consumer preferences for various brand of like Maruti, Mahindra,
Renault, Mitsubishi etc. first identify consumer needs and then develop product & services to
satisfy those needs. Consumer research also is used to better understanding consumption
behavior. Many of these applications of consumer research are managerial in perspective,
they are designed to helps a market make specific marketing decision concerning product,
price, promotion, and distribution. It also able the marketer to build consumer meaning into
the product or services by discovering which attributes are most important to the target
market and integrating them into the product or services design.
RESEARCH METHODOLOGY

However all the studies made in Consumer buying behavior of Automotive Car for various
segments from small up to luxury car provides the knowhow for Car Manufacturer but fails
to provide scientific approach for factors of Consumer behavior and their drivers. In this
paper an attempt is made to

Study & Classify Car market based on segments like – small car, Hatch back, Sedan Class,
premium Sedan, SUV & MUV and Luxury Car. 4.2. Study on purchase decision process. 4.3.
Broad classification of behaviors and their effect on various car segments.

India Car Market Segments:

The Indian car industry is now the seventh largest car manufacturer in the world. The overall
Indian automobile industry has grown at a high rate of around 15% (CAGR 2007-12) on the
back of a healthy macro-economic growth and overall positive sentiments. As India is a
developing economy with relatively low GDP per capita, the Indian automobile industry is
dominated by 2-Wheelers which comprise of ~77% of the overall market. Passenger vehicles
are the 2nd largest segment of the industry with a share of ~15% and commercial and three
wheelers comprise of 8% of the market share. In India Passenger Vehicle market is further
classified into three segments –

Passenger Cars (PC)

 Utility Vehicles (UV)

 Vans ( Mini Vans - not included in study)

Passenger Cars sub-segment dominates the passenger vehicle market in India with ~70%
share. The next biggest sub-segment is the Utility Vehicles segment which has a share of
~20%, followed by Mini Vans

Passenger Car Segment: The Passenger Car (PC) segment is categorized into 9 sub-segments
primarily based on overall vehicle length as shown in figure 2.
Out of the 9 sub-segments, 3 sub-segments viz. Compact, Mini and Super Compact comprise
~90% of the overall passenger car (PC) market. The largest sub-segment is Compact
followed by Mini. The demand for small cars is the highest because of relatively lower per-
capita incomes and high traffic density in urban areas. Compact and Mini sub-segments
primarily comprise of hatchbacks which are preferred due to relatively low price, high fuel
efficiency and easy maneuverability. Suzuki is the leading player in the passenger car
segment with a dominant share of ~45%, distantly followed by Hyundai with a share of
~20%

Purchase Decision Process:

In order to assess the importance of the environmental awareness in the car purchase
decision, it is necessary to get an insight into the process of purchasing itself. The consumer’s
decision to purchase a product is a multi staged process. Kotler (2006) identifies that the
consumer will go through five stages. Vehicle purchase behavior fairly complex, as car
purchase implies a high level of social and / or psychological involvement. Therefore, the
consumer will transit each stage of purchase decision making process as presented in figure-
3.

a) Problem Recognition: In this information processing model, the consumer buying process
begins when the buyer recognizes a problem or need. When we found out a difference
between the actual state and a desired state, a problem is recognized. When we find a
problem, we usually try to solve the problem. We, in other words, recognize the need to solve
the problem. But how?

b) Information Search: When a consumer discovers a problem, he/she is likely to search for
more information. Through gathering information, the consumer learns more about some
brands that compete in the market and their features and characteristics.

c) Evaluation and Selection of Alternatives: How does the consumer process competitive
brand information and evaluate the value of the brands? Unfortunately there is no single,
simple evaluation process applied by all consumers or by one consumer in all buying
situations. One dominant view, however, is to see the evaluation process as being cognitively
driven and rational. Under this view, a consumer is trying to solve the problem and ultimately
satisfying his/her need. In other words, he/she will look for problem-solving benefits from the
product. The consumer, then, looks for products with a certain set of attributes that deliver the
benefits. Thus, the consumer sees each product as a bundle of attributes with different levels
of ability of delivering the problem solving benefits to satisfy his/her need. The distinctions
among the need, benefits, and attributes are very important. One useful way to organize the
relationships among the three is a hierarchical one.

Decision Implementation: To actually implement the purchase decision, however, a consumer

needs to select both specific items (brands) and specific outlets (where to buy) to resolve the
problems. There are, in fact, three ways these decisions can be made: 1) simultaneously; 2)
item first, outlet second; or 3) outlet first, item second. In many situations, consumers engage
in a simultaneous selection process of stores and brands. Once the brand and outlet have been
decided, the consumer moves on to the transaction (“buying”). e) Post-purchase Evaluation:

Post-purchase evaluation processes are directly influenced by the type of preceding decision-
making process. Directly relevant here is the level of purchase involvement of the consumer.
Purchase involvement is often referred to as “the level of concern for or interest in the
purchase” situation, and it determines how extensively the consumer searches information in
making a purchase decision. Although purchase involvement is viewed as a continuum (from
low to high), it is useful to consider two extreme cases here. Suppose one buys a certain
brand of product as a matter of habit (habitual purchase). For him/her, buying a is a very low
purchase involvement situation, and he/she is not likely to search and evaluate product
information extensively. In such a case, the consumer would simply purchase, consume
and/or dispose of the product with very limited post-purchase evaluation and generally
maintain a high level of repeat purchase motivation.

Broad Classification of consumer behavior:

Consumer behavior is a blend of Economic, Technological, Political, Cultural, Demographic

and natural factors as well as his own characteristics which is reflected by his attitude,
motivation, perception, personality, knowledge and lifestyle. Marketers can rationalize their
existence only when they are able to understand consumer behavior. From study it was
envisaged to classify these behavior parameters under broad categories – Economic, Social,
Demographic, Geographic, Psychological, Product & Technology. Various customer
behavior parameters can be clubbed as given in below Table 1.
Based on the analysis and as shown in figure 4, it is evident that, increase in disposable
income seems to be the most important reason for buying a car. This trend is reflected in the
growth of the per capita income and consequently the growth of the Indian automobile
Industry. Similarly, the growing family needs like working partners, increasing family size,
status, etc. add to the motives of buying a car. At the same time affordability of car price is
the most important factors for purchasing a particular segment car.
Customer Behaviors of various Passenger Car segments are as described below: Micro Car
Segment (Length < 3.2 Meter) - It is the lowest cost segment with only one Tata Nano Car.
Despite being the cheapest car, had serious initial quality issues which damaged its brand
image and customer faith. As a product this segment will get preference for city drive over
congested road conditions wherein safety on road will be better than two wheeler. Mini Car
Segment (3.2 < L < 3.6 Meter) - It is the 2nd largest sub-segment in the passenger car market
is highly consolidated with 2~3 significant players having 7 products. The reason for
presence of relatively few players in this segment is because of highly price sensitive
consumer. To enable competitive low cost manufacturing, high volumes and thus a large
network is required.

Maruti Suzuki and Hyundai are the dominant players in the sub-segment as they were the
early entrants and have low cost manufacturing competence. Consumers of these segment
cars are 1st time car buyers with product price as deciding factor. M800, Suzuki Alto, Zen,
Wagon R, Santro, Spark are the cars from this segment. Compact car segment (3.6 < L < 4.0
Meter) –

It is the most crowded segment with about 13 players and 20 product offerings as it is the
largest sub-segment (~45% share) in passenger cars. Yet, the ability to manufacture low cost
good quality cars has resulted in the market being relatively consolidated with 2 players –
Maruti Suzuki and Hyundai – dominating the market with a combined share of over 50%.
While Maruti Suzuki, Hyundai and Tata were the early entrants in the sub-segment, Honda
has already overtaken Tata to become the 3rd largest player in the sub-segment. This has
happened because of high brand equity and competitive pricing of Honda products. Swift,
i10, Jazz, Vista, Beat, Figo, Polo, Micra, Liva, Vibe, Punto, Pulse etc. are the cars from this
segment. Super Compact (4.0 < L < 4.25 Meter) and Mid size Segment (4.25 < L < 4.5
Meter): “Super Compact”, the largest sub-segment, is comprised of sedans and marks the
beginning of 3 box cars in the segment. This subsegment is dominated by Maruti Suzuki with
cheapest sedan Swift Dzire developed on its most successful compact hatchback car platform.
The dominance of Maruti Suzuki ends at this sub-segment in the hierarchy. “Mid-size” is the
4th largest sub-segment in passenger car market. It is also the relative more fragmented sub-
segment with 11 players offering 14 products. Most players in this segment either offer a
product which shares platform with it offering in the Compact subsegment or a global
product. Hyundai is the dominant player in this segment due to competitively priced feature-
rich product with option of both gasoline and diesel powered engines. The choice of car in
this segment is driven by income. In this segment customers first preference is for safety,
driving & Seating comfort and brand, second most preference is for after sales service, price,
power and pickup, mileage whereas maximum speed is of lowest preference. Also this
segment requires value for money, best features, and customer friendly vehicle.

Executive (4.5 < L < 4.7 Meter) and Premium class segment (4.7 < L < 5.0 Meter) : Due to
low sub-segment volumes, most players offer global products which are manufactured using
CKDs (Completely Knocked Down kits). Hyundai and Toyota are the leading players in the
segment. This is an executive and premium class segment customer; most of these owners
tend to have purchased a car previously, the customer has potentially developed an attitude
towards car. In this segment attitude becomes an evaluating judgment based on prior or
present experience. These customers preference is for attractive styling, brand image, best
product performance in terms of acceleration, max speed and higher horse power. These
customers seek to show personality, leadership from brand of car as most of the customers
prefer this segment for business purpose. Car price, fuel efficiency, spares cost are of
secondary importance. Car interiors styling such as IP shape & finish, all customer touch
points, seat, steering door handle etc. are of high importance. Also exterior styling, overall
look, paint finish and safety & driving comforts are of prime importance.

Luxury and Coupe sub-segment: These are relatively marginal segments with less than 1%
combined share of the passenger car market. Almost all products in these sub-segments are
offered through the CBU route (Completely Built Unit) due to miniscule volumes which
neither justify neither localization nor local assembly. This segment is of high end luxury cars
such as Audi, BMW, Jaguar, Mercedes, Lexus, Porsche, Rolls-Royce, as these brands are
considered luxury. Average car price of this segment cars is more than Rs. 35 Lakh and is
growing at an average rate of 20% Y-O-Y. According to the Report of World Wealth by
Capegemini and Merrill Lynch Wealth Management, most countries in the world have
increased their HNI (High Net-worth Individuals) count. While, India has more than doubled
it – maximum compared to any other country in the world. HNI customers are celebrities,
business leaders, and corporate honchos, politicians from urban and rural India. Their
attitudes are “Got it? Flaunt it”, “Power Show”, “Image and Uniqueness”. High social status
from perceived brand image is the common driving factor of this segment. Superior
functionality, best in class quality and high end & customized features are the most preferred
parameters of this segment.
SUV & MUV Segment: This segment is actually utility segment further segmented into UV1,
UV2, UV3 and UV4 based on length and price parameter. Economy segment UV’s are
Sumo, Safari, Aarya, Bolero, Scorpio, XUV500, Xylo, Innova. Whereas high end UV market
is very limited and dominated by Fortuner, Prado, Landcrusier, Pajero etc. Customers of
economy and high end SUV shows difference mainly in terms of affordability of vehicle
price, spares cost and serviceability. Whereas the main driving factor of this segment is fun,
road presence, egocentric relationship. In India economy class SUV’s found to be of better
choice in rural area as product image is rugged, muscular, rough& tough, worthiness to bad
roads. High end SUV customers are celebrities, business tycoons, politicians those want to
use car as indulgence. These segment cars are having high perceived safety by customers
because of looks, overall structure and exterior styling of vehicle

A research process consists of stages or steps that guide the project from its conception
through the final analysis, recommendations and ultimate actions. The research process
provides a systematic, planned approach to the research project and ensures that all aspects of
the research project are consistent with each other.

This chapter aims to understand the research methodology establishing a framework of

evaluation and revaluation of primary and secondary research. The techniques and concepts
used during primary research in order to arrive at findings; which are also dealt with and lead
to a logical deduction towards the analysis and results.

I propose to first conduct a intensive secondary research to understand the full impact and
implication of the industry, to review and critique the industry norms and reports, on which
certain issues shall be selected, which I feel remain unanswered or liable to change, this shall
be further taken up in the next stage of exploratory research. This stage shall help me to
restrict and select only the important question and issue, which inhabit growth and
segmentation in the industry.

The various tasks that I have undertaken in the research design process are :

 Defining the information need

 Design the exploratory, descriptive and causal research

The research process has four distinct yet interrelated steps for research analysis It has a
logical and hierarchical ordering:
 Determination of information research problem.

 Development of appropriate research design.

 Execution of research design.

 Communication of results.

Each step is viewed as a separate process that includes a combination of task , step and
specific procedure. The steps undertake are logical, objective, systematic, reliable, valid,
impersonal and ongoing.

EXPLORATORY RESEARCH

The method I used for exploratory research was

 Primary Data

 Secondary data

PRIMARY DATA

New data gathered to help solve the problem at hand. As compared to secondary data which
is previously gathered data. An example is information gathered by a questionnaire.
Qualitative or quantitative data that are newly collected in the course of research, Consists of
original information that comes from people and includes information gathered from surveys,
focus groups, independent observations and test results. Data gathered by the researcher in
the act of conducting research. This is contrasted to secondary data which entails the use of
data gathered by someone other than the researcher information that is obtained directly from
first-hand sources by means of surveys, observation or experimentation.

Primary data is basically collected by getting questionnaire filled by the respondents.

SECONDARY DATA

Information that already exists somewhere, having been collected for another purpose.
Sources include census reports, trade publications, and subscription services. Data that have
already been collected and published for another research project (other than the one at hand).
There are two types of secondary data: internal and external secondary data. Information
compiled inside or outside the organization for some purpose other than the current
investigation. Data that have already been collected for some purpose other than the current
study. Researching information which has already been published. Market information
compiled for purposes other than the current research effort; it can be internal data, such as
existing sales-tracking information, or it can be research conducted by someone else, such as
a market research company or the U.S. government. Published, already available data that
comes from pre-existing sets of information, like medical records, vital statistics, prior
research studies and archival data.

Secondary source of data used consists of books and websites

My proposal is to first conduct a intensive secondary research to understand the full impact
and implication of the industry, to review and critique the industry norms and reports, on
which certain issues shall be selected, which I feel remain

DESCRIPTIVE RESEARCH

STEPS in the descriptive research:

 Statement of the problem

 Identification of information needed to solve the problem

 Selection or development of instruments for gathering the information

 Identification of target population and determination of sampling Plan.

 Design of procedure for information collection

 Collection of information

 Analysis of information

 Generalizations and/or predictions

DATA COLLECTION

Data collection took place with the help of filling of questionnaires. The questionnaire
method has come to the more widely used and economical means of data collection. The
common factor in all varieties of the questionnaire method is this reliance on verbal responses
to questions, written or oral. I found it essential to make sure the questionnaire was easy to
read and understand to all spectrums of people in the sample. It was also important as
researcher to respect the samples time and energy hence the questionnaire was designed in
such a way, that its administration would not exceed 4-5 mins. These questionnaires were
personally administered.

The first hand information was collected by making the people fill the questionnaires. The
primary data collected by directly interacting with the people. The respondents were
contacted at shopping malls, markets, places that were near to showrooms of the consumer
durable products etc. The data was collected by interacting with 200 respondents who filled
the questionnaires and gave me the required necessary information. The respondents
consisted of house wives, students, business men, professionals etc. the required information
was collected by directly interacting with these respondents

DETERMINATION THE SAMPLE PLAN AND SAMPLE SIZE

TARGET POPULATION

It is a description of the characteristics of that group of people from whom a course is

intended. It attempts to describe them as they are rather than as the describer would like them
to be. Also called the audience the audience to be served by our project includes key
demographic information (i.e.; age, sex etc.).The specific population intended as beneficiaries
of a program. This will be either all or a subset of potential users, such as adolescents,
women, rural residents, or the residents of a particular geographic area. Topic areas:
Governance, Accountability and Evaluation, Operations Management and Leadership. A
population to be reached through some action or intervention; may refer to groups with
specific demographic or geographic characteristics. The group of people you are trying to
reach with a particular strategy or activity. The target population is the population I want to
make conclusions about. In an ideal situation, the sampling frames to matches the target
population. A specific resource set that is the object or target of investigation. The audience
defined in age, background, ability, and preferences, among other things, for which a given
course of instruction is intended.

I have selected the sample trough Simple random Sampling

SAMPLE SIZE:

This involves figuring out how many samples one need.

The numbers of samples you need are affected by the following factors:

· Project goals

· How you plan to analyze your data

· How variable your data are or are likely to be

· How precisely you want to measure change or trend

· The number of years over which you want to detect a trend

· How many times a year you will sample each point · How much money and manpower you
have

SAMPLING TECHNIQUE

Simple random sampling technique has been used to select the sample

A simple random sample is a group of subjects (a sample) chosen from a larger group (a
population). Each subject from the population is chosen randomly and entirely by chance,
such that each subject has the same probability of being chosen at any stage during the
sampling process. This process and technique is known as Simple Random Sampling, and
should not be confused with Random Sampling.

ERRORS IN THE STUDY

Interviewer error

There is interviewer bias in the questionnaire method. Open-ended questions can be biased by
the interviewer’s views or probing, as interviewers are guiding the respondent while the
questionnaire is being filled out. The attitudes the interviewer revels to the respondent during
the interview can greatly affect their level of interest and willingness to answer openly. As
interviewers probing and clarifications maximize respondent understanding and yield
complete answers, these advantages are offset by the problems of prestige seeking, social
desirability and courtesy biases.
Questionnaire error

The questionnaire designing has to careful so that only required data is concisely reveled and
there is no redundant data generated. The questions have to be worded carefully so that the
questions are not loaded and does not lead to a bias in the respondents mind

Respondent error

The respondents selected to be interviewed were not always available and willing to co
operate also in most cases the respondents were found to not have the knowledge, opinion,
attitudes or facts required additionally uninformed response errors and response styles also
led to survey error.

Sampling error

We have taken the sample size of 100, which cannot determine the buying behavior of the
total population. The sample has been drawn from only National Capital Region

Research Design

Research design is a conceptual structure within which research is conducted. A research

design is the detailed blueprint used to guide a research study towards its objective. It is a
series of advanced decision taken together comprising a master plan or a model for
conducting the research in consonance with the research objectives. Research design is
needed because it facilitates the smooth sailing of the various research operations, thereby
making research as efficient as possible yielding maximum information with the minimum
effort, time and money.

The research aims to examine the buying behavior of consumer for passenger cars in Delhi.
As the universe of the study is large, the researchers have decided to select sample
respondents by adopting the Simple Random Sampling Technique. A total of 100 Interview
schedules were prepared and out of this, only 80 interview schedules were filled up and
collected. A scrutiny of these schedules led to the rejection of 30 interview schedules on
account of incomplete responses. Thus 50 completed interview schedules were used for the
present study. (Table 1)

Table 1: Distribution of consumers by Age

5. Purchase behavior of customers

For determining the pre-purchase behavior of the customers, they were asked about the
sources of information while purchasing new product and who influenced their decision.
Majority of respondents were found to be relying upon friends and advertisements.
6. Test of Hypothesis

The consumer behavior towards passenger cars was analyzed with the help of following
respondent’s profile Occupation, Usage of car, Income and Brand Name Chi Square test =
(O-E)2/E
7. Result and Discussion

Degree of freedom = (C-1) (r-1) =5

For 5 degree of freedom at 55 level of significance =9.49 Calculated value=28.88 Table value
=9.49

The calculated value 28.88 is greater than the table value 9.49 and the hypothesis is rejected.
Hence, there is significant relationship between the occupation and usage of car.

8. Income and Brand name

DATA ANALYSIS AND INTERPRETATION

This chapter presents the data analysis, empirical findings, conclusion and recommendations.
The data is acquired through primary data harvested by the medium of survey questionnaire.
SPSS by IBM was used to represent the data in visual formats like bar graphs as well
descriptive tables, giving a neat representation of distribution of respondent’s opinion,
frequency and percentage acquired by different options across the questionnaire. Initially the
various aspects of demographics such as salary, gender, age group, employment status,
marital status and education level have been discussed and their possible impact on consumer
behaviour and purchase decision has been highlighted. Secondly, bar graphs give a visual
representation of empirical findings about the most preferred car brands and their frequency
giving an idea of the market share. After that research object 2 was achieved by highlighting
key influences that affect purchase decision of Indian middle class. These key influencers
include factors like fuel type, attitude towards new brands, etc. Finally by employing tools
like descriptive statistics and Spearman’s correlation coefficient, factors have been identified
that are causing consumers to migrate from one brand to another and the degree to which
these factors are responsible for this migration.

SAMPLE DEMOGRAPHICS

SALARY

Respondents were asked to disclose their monthly salaries. In the sample of 250 respondents
it was observed that there was a very uneven distribution within the various salary bands.
Maximum number of respondents, i.e. 77 out of 250 (30.8%) belonged to the salary group of
INR 60,001 to 80,000 (€727.99 to €970.64). Second biggest group consisted of 69 (27.6%)
respondents and they belonged to the salary group of INR 40,001 to 60,000 (€485.33 to
€727.98). Monthly salary band of INR 20,000 to 40,000 (€242.66 to €485.32) consisted of
43(17.2%) respondents. With only 24 (9.6%) respondents, a very small number of
respondents belonged to the salary group of INR 80,001 to 100,000 (€970.65 to €1,213.30).
Individuals with salary higher than INR 100,000 (€1,213.30) accounted for 14.8% of the total
sample size. As it can be observed, a clear majority of the sample, i.e. 58.4% belonged to the
salary group of INR 40,001 to 80,000 (€485.33 to €727.99). This data also shows buying
power of Indian middle class household and its ability to not only own a car but also own
multiple cars.

Gender

In the sample of 250 respondents, the gender front showed extremely uneven distribution.
Females formed the minority of this group with only 72 respondents being female and
owning cars. Females accounted for a mere 28.8%. Male formed the majority with 71.2%
(178) of the respondents being males. The major reason for the low amount of female
respondents that own car is the slowly dissolving tradition of women becoming housewives
after marriage.

Age group

Maximum number of respondents belonged to the age group of 31-40. 81 (32.4%)

respondents belonged to this age group. The following age group of 31-40 accounted for the
second biggest group with roughly equal amount of respondents totalling up to 76, i.e. 30.4%
of the total sample size. 49 (19.6%) respondents were older than 50 years and 20-30 age
group consisted of the least number of respondents accounting for only 17.6% (44
respondents) of the sample size. It can be observed that the younger generation accounted for
the biggest group. Adding up the age group of 20-40 accounted for 50% of the sample
population. It can therefore be observed that the younger Indian generation had equal amount
of disposable income as the elder Indian population.

Employment

In the sample size of 250, a negligible amount of respondents were unemployed. Only 7
respondents said they were unemployed accounting for 2.8%. Students also formed a
minority group with only 18 respondents categorizing themselves as students forming only
7.2% of the sample size. The remainder of the sample was roughly divided equally between
individuals engaged in business and in service sector. 106 respondents were engaged in
business accounting for 42.4% of the sample population. Respondents from the service sector
formed the majority group with 119 respondents in this group accounting for a 47.6%.
Therefore when these two groups of people engaged in business and people from service
sector are added together, they account for 90% of the sample population.

Education level

Respondents were asked to answer their level of education. Only 21 respondents were at the
level of higher school education and had not attended college. They formed for an extremely
small 8.4% of the sample population. The numbers of respondents holding a master’s degree
were roughly the same as the respondents holding a bachelor’s degree. 92 respondents had a
master’s degree and accounted for 36.8%. 91 respondents had a bachelor’s degree and
accounted for 36.4% of the sample. The number of respondents with a Dr. as a prefix was 46
accounting for 18.4%. It can be observed that 91.6% of the sample went to college and is
extremely educated making them aware consumers.

Marital Status

The marital status was divided into three categories from which respondents could choose
one. The three categories were “Single”, “Married” and “Married with kids”. There was an
uneven distribution of the sample population within these three categories. A very small
percentage of the sample population was single with only 54 respondents categorizing
themselves as single and accounted for 21.6% of the sample. Married respondents accounted
for 34.8% (87 respondents) of the sample size. “Married with kids” category consisted of the
maximum respondents with 109 respondents falling into this category. The accounted for
43.6%. The important trend to be observed in this data is that a total of 78.4% of the total
sample size wasn’t single which means that it can be safely concluded that they had direct
influencers in form of spouse and/or children that will had an effect on their purchase
decision.

By the data analysed above it can be concluded that 58.4% of the sample has a monthly
income between INR 40,000 to 80,000 (€485.33 to €727.99), half of the sample belongs to
the age group of 20-40 and the remaining half to the age group of 40 and above making it an
even distribution across the band, more than 70% of the sample is male, 90% of the sample
population is either engaged in business or service, 91.6% of the sample population is highly
educated and has attended college and 78.4% of the respondents have influencers in form of
their family.

The 250 respondents were asked to name their car manufacturers name. As discussed in the
literature review Maruti Suzuki had the biggest market share in this sample as well. 81
respondents owned a Maruti Suzuki and accounted for 32.4% of the total sample population.
Although Maruti had the biggest share, Hyundai wasn’t far behind. 72 respondents owned a
Hyundai and accounted for a market leader challenging 28.8% of the sample size. This shows
the shrinking size and the effect of new entrants on the market share of Maruti Suzuki. Honda
and Tata had an equal ownership rate and 17 respondents belonged to each brand and
together accounted for 13.6% (6.8% Honda and 6.8% Tata). This was followed by another
homegrown company Mahindra and its Korean subsidiary Mahindra Ssangyong with 16
respondents owning a vehicle from this brand and accounting for 6.4% of the sample size.
Volkswagen India, which is a relatively new entrant especially when compared to indigenous
companies like Tata and Mahindra and joint ventures like Maruti Suzuki acquired a major
chunk of the sample population with 12 respondents owning a Volkswagen. Volkswagen
owners accounted for 4.8% of total sample size and have edged past companies like
ToyotaKriloskar, Chevrolet and Ford. Only 10 respondents owned a Toyota giving a small
4% share in the sample to the world’s top selling automaker. (Korzeniewski, 2014). 8
respondents owned a Ford accounting for 3.2%. Chevrolet and Skoda were owned by 4
respondents each, together accounting for 3.2% (1.6% Chevrolet and 1.6% Skoda). Nisan and
Renault that have entered India in form of a joint venture had an equal share with 3
respondents belonging to each brand and accounted for 2.4% (1.2% each). Fiat,
Volkswagen’s global rival was far behind Volkswagen and was second last in the survey.
Only 2 respondents owned a Fiat and accounted for 0.8% of the sample size. Only 1
respondent owned a Datsun.

It can be observed in the data that although Maruti Suzuki has the biggest market share,
Hyundai is not very far behind and is ready to challenge Maruti Suzuki. Together however,
Maruti Suzuki and Hyundai account for a total of 61.2%. Although Hyundai seems like the
biggest threat, Volkswagen which entered India in 2007 accounted for 4.8% which may not
seem like a lot but considering the fact that it is more than some older companies like Toyota
shows the degree and speed of penetration of Volkswagen amongst Indian middle class.
Along with this, homegrown giants like Tata and Mahindra also accounted for 13.2% of the
sample population. As discussed in the literature review, these statistics show the amount of
new entrants as well as old entrants that are proving to be viable threat to Maruti Suzuki’s
status as the market leader
Research Objective

To

highlight key influences that affect purchase decision of Indian middle class.

Respondents were asked about the type of fuel used by their cars. 111 (44.4%) respondents
said they were using petrol cars. 83 (33.2%) respondents were using diesel. There was
roughly an even distribution between respondents using LPG and CNG cars with 26 and 28
respondents in each category respectively. They together accounted for 21.6%. An extremely
small amount of respondents were using cars with hybrid system with only 2 respondents
classifying their cars in this category. Although petrol cars formed the majority, diesel was
not very far away and LPG and CNG powered cars also have a substantial share. For this
distribution of consumers between different fuel types, manufacturers with a small range of
cars and engine options, who are not able to provide their consumers with option of diesel,
LPG and CNG powered cars will experience difficulty in consumer retention and will also
witness their consumer’s migration to their competitors.

Indigenous v/s foreign:

Consumers were asked about their preference between indigenous car brands like Tata,
Mahindra, etc. and foreign car brands like Volkswagen, Nissan, Renault, Toyota etc.
Respondents were extremely unevenly distributed in this question and were in favor of
foreign brands. 189 respondents preferred foreign brands like Volkswagen, Hyundai, Renault,
etc. accounting for 75.6% of the total sample. A relatively smaller amount of respondents
preferred homegrown brands like Tata, Mahindra, etc. over foreign brands and accounted for
24.4%. This data shows that the sample is open to foreign brands and this could eventually
result in loss of consumers for indigenous brands like Tata and Mahindra.

Awareness:

Respondents were asked about how much research they did before purchasing their car. It
was done to find out how many of the respondents made an informed purchase decision.
It was observed that 99 respondents did an extensive research before purchasing their car.
The biggest group of the respondents belonged classified themselves to the category of “I
compared only the popular brand and what friends and family suggested”. This category
accounted for 51.2% with 128 respondents lying in this category. This shows that majority of
the sample population is not an early adopter but a mainstream follower. Only 23 respondents
said that they didn’t conduct any research. The data above shows that the majority of the
sample makes an informed decision or follows the popular brand. Therefore lesser known
brands in India like Renault and Skoda will struggle with the mainstream followers.

Attitude towards lesser known brands:

Respondents were asked about their attitude towards lesser known brands and whether they
purchased one.
171 respondents said they did not even consider lesser known or new entrant brands while
making the purchase decision. They accounted for 68.3% of the respondents. An extremely
small amount of respondents considered and bought a lesser known brand or a new entrant
and the accounted for only 12.9% (32 respondents). 47 respondents said they considered a
new entrant during their purchase decision but didn’t end up buying one. Like stated above,
this data supports the fact that the majority of Indian middle class is not an early adopter but a
mainstream follower which makes it extremely hard for new entrants to penetrate.

Brand preference:

The respondents
were asked to rank
their top 3 most
preferred brand.
Hyundai and Maruti Suzuki had an almost equal amount of respondents’ preference with 93
and 89 respondents choosing Hyundai and Maruti Suzuki respectively. A relatively newer
entrant, Volkswagen was the 3rd most popular brand amongst the sample. Although it should
be noted that the most preferred brand is not essentially the brand owned by the sample but
could also be the brand they aspire to own. This data also shows that although Maruti Suzuki
is the leader in terms of market share, Hyundai is slightly more popular.

To find out what changes in the purchase decision are responsible for migration of the
Indian middle class from one manufacturer to another.

The following alternative and null hypotheses are proposed for testing with regards to what
factors cause consumers to migrate from one manufacturer to another and to what degree
these factors affect the decision.

1. H1a: Equipment & Interior quality has caused consumers to migrate from one brand to
another. H1an: Equipment & Interior quality has not caused consumers to migrate from one
brand to another.

2. H2a: Eco-friendliness of the car is causing consumer to migrate from one manufacturer to
another. H2an: Eco-friendliness of the car is not causing consumer to migrate from one
manufacturer to another.

3. H3a: Brand Image is causing consumers to switch manufacturers. H3an: Brand Image is
not causing consumers to switch manufacturers.

4. H4a: Prestige (Pride of ownership) is causing consumers to move from one manufacturer
to another. H4an: Prestige (Pride of ownership) is not causing consumers to move from one
manufacturer to another.

5. H5a: Friends/Family recommendation results in consumers to switch from one

manufacturer to another. H5an: Friends/ family recommendation don’t result in consumers to
switch from one manufacturer to another.

6. H6a: Financing is a cause of consumers to migrate from one manufacturer to another. H6n:
Financing is not a cause of consumers to migrate from one manufacturer to another.
7. H7a: Value for money causing consumers to migrate from one manufacturer to another.
H7an: Value for money is not causing consumers to migrate from one manufacturer to
another.

8. H8a: Fuel consumption is a cause for consumers to migrate from one manufacturer to
another. H8an: Fuel consumption is not a cause for consumers to migrate from one
manufacturer to another.

9. H9a: Looks/exteriors are causing consumers to move from one manufacturer to another.
H9an: Looks/exteriors are not causing consumers to move from one manufacturer to another.

10. H10a: After-sales service is resulting in consumers to switch manufacturers. H10an:

After-sales service is not resulting in consumers to switch manufacturers

Hence consumers were asked to answer how much weightage they gave to each of these
factors. The results are first represented in descriptive format in form of descriptive statistics
and then a Spearman’s correlation coefficient tests were conducted to examine the
relationship between these factors and consumers switching manufactures.

H1a: Equipment & Interior quality has caused consumers to migrate from one brand to
another.

H1an: Equipment & Interior quality has not caused consumers to migrate from one brand to
another.

As given in the table, highest number of respondents ticked on 3 putting equipment & interior
neither very important nor very unimportant. There was an equal distribution between the
respondents that considered equipment and interior important factor as respondents
considering it an unimportant factor while choosing a car.

Spearman’s Correlation between owing cars from more than one manufacturer and
Equipment and Interior

The above table employees the use of Spearman’s correlation coefficient and shows that the
correlation value is 0.021. This shows that although there is a positive relation between these
two variables, the degree of dependence is not very strong. Therefore equipment and interior
is not a major influencer causing consumers to migrate from one manufacturer to another.
There null hypothesis H1an is rejected in favor of H1a.

H2a: Eco-friendliness of the car is causing consumer to migrate from one manufacturer to
another.

H2an: Eco-friendliness of the car is not causing consumer to migrate from one manufacturer
to another
It can be observed that majority of people said that they didn’t consider the eco-friendliness
of the car while making the purchase decision. They accounted for a total of 64%. Only
14.8% agreed to have considered it as a strong influencer in the buying decision.

Spearman’s Correlation between owing cars from more than one manufacturer and
Eco Friendliness

The Spearman’s correlation coefficient shows a negative correlation value. This shows that
the eco-friendliness or the impact a car has on the environment is not causing the Indian
middle class consumers to migrate from one brand to another. Therefore H2a will be rejected
in favor of hypothesis H2an. H3a: Brand Image is causing consumers to switch
manufacturers. H3an: Brand Image is not causing consumers to switch manufacturers.

The table above shows that 44.4% consumers agreed that brand image is an important
influence while making purchase decision and 26.6% of the respondents didn’t give brand
image any importance while making the purchase decision.
Spearman’s Correlation between owing cars from more than one manufacturer and
Brand Image.

The above table shows there is a positive relation between brand image and consumers that
own cars from more than one manufacturer. The Spearman’s correlation coefficient value in
this case is a positive .469 and therefore H3an will be rejected in favor of H3a. It is therefore
concluded that brand image, although not a very strong factor, causes consumers to migrate
from one manufacturer to another.

H4a: Prestige (Pride of ownership) is causing consumers to move from one manufacturer to
another.

H4an: Prestige (Pride of ownership) is not causing consumers to move from one
manufacturer to another.
The above table shows that 78.8% of the respondents ranked Prestige or pride of ownership
between extremely important and extremely unimportant influencer in while making a
purchase decision.

Spearman’s Correlation between owing cars from more than one manufacturer and
Prestige

The Spearman’s correlation coefficient table above shows that there is, albeit very weak, a
positive relation between these two variables. Therefore it can be concluded that Prestige or
pride of ownership, although negligible, is a cause for consumers to migrate from one
manufacturer to another. Hypothesis H4an is rejected in favor of H4a.

H5a: Friends/Family recommendation results in consumers to switch from one manufacturer

to another.

H5an: Friends/family recommendation does not result in consumers to switch from one
manufacturer to another

The above table shows that 61.2% of the respondents agreed to the fact that the
recommendation of family and friends was an important influencer in making a purchase
decision. We have also observed above in the demographics section that a total of 196
respondents were either married or married and had children.

Spearman’s Correlation between owing cars from more than one manufacturer and
Friends / Family recommendation
The Spearman’s correlation coefficient table above shows that there is a positive relation
between the two variables. The correlation coefficient value is also very strong, .701. It can
therefore be concluded that recommendation of friends and family is a strong cause for
consumers to migrate from one manufacturer to another. Therefore hypothesis H5an is
rejected in favor of H5a.

H6a: Financing is a cause of consumers to migrate from one manufacturer to another.

H6n: Financing is not a cause of consumers to migrate from one manufacturer to another

Respondents were asked to rate the importance of in-house financing options while
purchasing a car. 52.4% of the respondents deemed it to be an important influencer while
purchasing a car. Only 19.6% said it wasn’t and important influencer. 28% respondents didn’t
rank it as important nor unimportant.

Spearman’s Correlation between owing cars from more than one manufacturer and
Financing
The Spearman’s correlation coefficient table above shows the directly proportional relation
between the two variables. The value 0.754 is also extremely high. It should be concluded
that in house financing options is a major cause of consumer’s migration from one
manufacturer to another. Therefore hypothesis H6an will be rejected in favor of H6a.

H7a: Value for money causing consumers to migrate from one manufacturer to another.

H7an: Value for money is not causing consumers to migrate from one manufacturer to
another.

The above table shows how the respondents ranked the importance of value for money for a
middle class household while making a purchase decision. 64% of the respondents
considered it to be important. Only 10% of the respondents said value for money was not did
not influence their purchase decision.

Spearman’s Correlation between owing cars from more than one manufacturer and
value for money / price
The table above shows the positive relation between the two variables in question. With a
correlation coefficient value of 0.623, value for money or a better package for money is one
of the causes of consumer’s migration from one manufacturer to another. Therefore
hypothesis H7an will be rejected in favor of H7a.

H8a: Fuel consumption is a cause for consumers to migrate from one manufacturer to
another.

H8an: Fuel consumption is not a cause for consumers to migrate from one manufacturer to
another.

Respondents were asked to rank importance of fuel consumption in their purchase decision. 0
respondents ranked it as extremely unimportant. 62.4% of the respondents ranked it as
important. 21% didn’t rank it as important nor unimportant. Only 15.6% respondents ranked
fuel consumption as an unimportant.
Spearman’s Correlation between owing cars from more than one manufacturer and
Fuel consumption

The Spearman’s correlation coefficient shows a strong relation between the two variables. A
correlation coefficient value of 0.808 is extremely high and it shows that fuel consumption is
a major cause for consumer’s migration from a manufacturer to another manufacturer.
Therefore hypothesis H8an will be rejected in favor of H8a.

H9a: Looks/exteriors are causing consumers to move from one manufacturer to another.

H9an: Looks/exteriors are not causing consumers to move from one manufacturer to another.

Respondents were asked to rank the importance of Looks/Exterior or styling and aesthetic
appeal of the car while making a purchase decision. 61.2% of the consumers said that looks/
exteriors of the car were neither important nor unimportant. 30.4% of the consumers said that
it was important and only 8.4% said that it wasn’t important.
Spearman’s Correlation between owing cars from more than one manufacturer and
looks / exterior

The Spearman’s correlation coefficient table above shows that there is a positive relation
between the two variables in discussion and the value of 0.407 shows a moderate degree of
dependence between the two variables. Therefore looks/exterior, although has a moderate
impact on consumers migration from one manufacturer to another, it still is one of the causes
for the migration. Therefore hypothesis H9ab will be rejected in favor of H9a.

H10a: After-sales service is resulting in consumers to switch manufacturers.

H10an: After-sales service is not resulting in consumers to switch manufacturers.

Respondents were asked to rank the importance of after-sales service while making a
purchase decision. 61.4% respondents said it was unimportant and did not influence the
purchase decision. Only 6.4% of respondents identified it as extremely important. 16.8% of
the respondents didn’t consider after-sales service as an important nor unimportant
influencer.

Spearman’s Correlation between owing cars from more than one manufacturer and
after sales service

The Spearman’s correlation coefficient table above shows that there is the relationship
between the two variables is negative. Therefore it can be concluded that after-sales service is
not causing consumers to switch manufactures. Hypothesis 10a will be rejected in favor of
hypothesis H10n.
FINDINGS

1. After 68 years of freedom India is still dependent on gulf countries for its fuel requirement.
Uncertainty and dependability for fuel on other countries restricts the growth of Indian car
industry. Also currency used globally for fuel pricing is USD and any fluctuation in currency
has direct impact on fuel cost which dampens the car sale. Manufacturers need to focus on
alternative fuels to propel the future of car industry.

2. India is developing nation with low per capita income. Instability in Indian economy will
have an immediate effect on car sale, as car is perceived as life style product. Though car
industry cannot be insulated from the effects of slow down and recession in economy,
industry needs to be more insync with growth and development of India.

3. Growth in disposable income and higher education will remain the main drivers of future
advance cars. Car manufacturers need to track these trends and align their product strategies.

4. Indian government should come forward, reduce the taxation and revise the duty structure
for green vehicles those are - less pollutant, high fuel efficient, safe drive vehicles.
Government should ensure better quality cars to be available on roads and implement ELV
( End of Life ) norms. Cars plying on roads for more than 10 years should be re-inspected for
their proper functioning and roadworthiness. Road infrastructure needs to be further updated
to support technological requirements such as ABS, Air Bag, and Vehicle tracking through
GPS, RFID and electric car by proving road side electrical charging.

5. Car dealers and manufacturers show very good hospitality to customers during their visits
to the place of showroom before and immediately after their purchase. But after some time
they face a problem with their dealers regarding after sales service. Therefore, it is suggested
that the services rendered r to be rendered should be properly explained, friendly approach
and reliability in service to be further improved. Cost of spare parts to be charged reasonably.

6. The increase in number of women car owners, using the car for their office, personnel and
family work, thus becoming an influential group, calls for separate attention of car
manufacturers and marketers to focus their strategic efforts in this direction.

7. During initial search, TV commercials on car models and brands, search on internet
websites of the manufacturer and visit to dealers / distributors were the prime sources where
customers gathered information on car models and brands, marketers might want to focus on
these factors to catch the attention of the intending future customers.

8. When it came to decision based on preferences, personal needs, the top slot parameters
were - the need of the business firm, peer pressure from other family members owning a car
and upgraded the model to suit personal ambition. Marketers need to understand these
requirements and focus their marketing strategies towards these customer requirements.

9. In the category of personal preference on comfort factors, dominant factors were comfort
in driving, value for money and interior design, which topped the requirement list. Car
segment wise analysis also brought out these specific comfort requirements across all the
brands. Manufacturers might look into these aspects to their car design, so to attract car
passengers, prone to decide the models based on these criteria
SUGGESTIONS AND RECOMMENDATIONS

A recommendation to be made for future studies on this topic would be to expand the sample
on terms of occupations as well as size. Another recommendation would be to shift the
location to a metro city like Delhi or Mumbai where the Indian middle class is experiencing a
faster growth and if possible collect data from two or more cities. It would be more beneficial
to conduct this study over a wider time horizon against the relatively limited 81 days of time
allocated for this research.

It would be a valuable addition if a comparison is made between joint middle class families
and nuclear middle class families and highlight the difference between them. It would be
interesting to conclude further research around 2017 when the Twelfth Five Year Plan
concludes and Thirteenth Five Year Plan has been defined and highlight its impact on middle
class consumers.
Conclusion:

With the help of secondary data, it was established in the Literature Review chapter that the
set of government five year plans (10th Five Year Plans and 11th Five Year Plans) sprang
into action and there successful attainment of their objectives such as, creating 70 million
new work opportunities, increasing wage of unskilled labor by 20% and reducing
unemployment of educated individuals less than 5%, increase literacy rate by 85% and
providing broadband connectivity to all villages in the country. These factors have been
greatly responsible for both progress of the Indian middle class as well evolution of their
consumption behavior. Research question regarding the primary factors influencing purchase
decision and their degree have been answered by analysis of primary data collected via
survey questionnaire. In order to understand these factors, it is important to keep in mind the
various demographic aspects of the sample population.

It is to be noted that 58.4% of respondents had a monthly salary of (€485.33 to €970.64).

71.2% of the sample was male and 50% of the sample belonged to the age group of 20-40
years. On the occupational front, 119 (47.6%) respondents were engaged in service and
91.6% of the respondents had at least an undergraduate degree. Only 21.6% of the
respondents were single. Primary data concluded that the two most popular car brands
amongst Indian consumers were Maruti Suzuki (owned by 32.4% of respondents) and
Hyundai (owned by 28.8% of respondents). Analysis of primary data also showed that even
after continuous increase in fuel prices, the priciest fuel petrol still remained this most
popular fuel and was followed by diesel. The newly introduced fuels CNG and LPG were
found to be fast growing but only 2 respondents used a car powered by Hybrid system.

Therefore it should be concluded that only a negligible amount of people use cars powered by
hybrid system. Primary data also showed that 75.6% of the respondents preferred foreign car
brands like Suzuki and Hyundai over indigenous car brands like Tata and Mahindra. This
finding falls in harmony with the two most popular car brands owned by the Indian middle
class as discussed above (Maruti Suzuki being Japanese and Hyundai being Korean). An
interesting trend that was discovered by the collection of primary data was that not even 50%
of Indian middle class conduct an extensive research while purchasing a car which is
interesting as a car purchase comprises of a substantial percentage of Indian middle class
families disposable income, yet most of the households are mainstream followers and they
turn to opinion leaders and highest selling product to guide them through the purchase
decision. Respondents also stated their three most preferred brands. Top three voted brands
were foreign brands and not homegrown. Top three in order were Maruti Suzuki, Hyundai
and Volkswagen. It is important to understand that these are not the brands respondents’
necessarily own but what they might aspire to own which explains Volkswagen high
popularity but extremely low market share.

Primary data was they employed to answer the last research objective, what changes in the
purchase decision are responsible for migration of the Indian middle class from one
manufacturer to another.

Respondents were asked to rank the weightage they gave to various attributes so that it could
be determined what factors are responsible for consumers migration from one brand to
another and to what extent these factors are causing migration of consumers from one
manufacturer to another by employing Spearman’s correlation coefficient and using the its
value to rank these factors.

These factors are now explained in order of their influencing strength. By the analysis of
primary data it was discovered that the strongest reason for consumer’s migration from one
manufacturer to another was fuel consumption (achieved a correlation value of 0.808).

The second strongest factor causing consumer’s migration of brands was financing. In-house
financing or/and ease of financing was the second strongest cause of consumer’s switching
car manufacturer.

Third most influential factor was recommendation of family and friends. This falls in line
with the fact that only 21.6% of respondents were single and majorities were mainstream
followers and not early adapters. With a correlation value of 0.701, it is a strong influencer.
Value for money was the fourth most influential factor causing migration of consumers.

The fifth most influential factor was brand image with a correlation coefficient value of 0.469
and was followed by looks/exterior or aesthetic appeal of the car. Prestige or pride of
ownership had an extremely low correlation value of 0.074 and it had a negligible effect on
consumers switching car manufacturers.
Equipment and interior had the lowest value of 0.021 and it also had a negligible effect.
Interestingly Eco-friendliness of the car and after sales service had a negative value of
correlation coefficient. After sales service also had a negative value and it can be concluded
that although consumers rated these factors as an important determinants in choosing a
vehicle, it is not causing consumers to migrate from one brand to another.

Another interesting factor to be observed is that a blank space was left in case a respondent
wanted to add any other factor they considered while making the purchase decision and not a
single respondent from the sample size of 250 mentioned safety features. This shows that
Indian middle class is not very inclined towards safety features of a car.

Little research has been done to explore factors causing middle class consumers in India to
switch car manufactures; it is difficult to compare these findings with previous findings.

This research therefore contributes to a lesser explored dimension of the Indian automobile
market, middle class consumer behavior and the relation between them. This research will
form a platform further research and investigation in this area.
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