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INTRODUCTION
The purpose of this study is to gain a better understanding of factors that influence consumer buying behavior in cars. Specifically, we considered a number of internal factors that influence consumer behavior including perception, motivation and learning. How a consumer's attitude, which is a lasting evaluation of a person, object, or issue, can affect what they buy also examined. Reviewed other factors that influence consumer purchasing decisions and buying behavior including personal, social, and situational issues. The personal influences on consumers are important determinants of their needs and wants. Such factors as age, income, family status, and chosen lifestyle are strongly related to the types of products people buy and the specific brands they select. Examined the stages of the consumer decision-making process for buying a car: problem recognition, information search, evaluation of alternatives between different brands of cars, product choice and post purchase evaluation with respect to after sales service, customer relationship, and resale value of the car. Also addressed the impact of the amount of effort expended and of perceived risk; factors associated with relative importance and perceived consequences of the purchase, from the consumer's perspective.
These two stages lead to the final choice. Burt and Babin developed a model, see Figure...This model is in line with previous one but gives an emphasis on an evaluation phase in the process. This model includes five stages: problem recognition, information search, evaluation of alternatives, purchase decisions, and outcomes. Locational Marketing mix is used to reinforce the advantages of the car carefully reflecting its core values and positioning. It confirms how and why it will be of interest to various segments of the car-buying public.
Psychological Influences
Price' - Reflecting the Positioning Strategy The company should have a clear understanding of its key target market for e.g. (Young people and other price-conscious car buyers) for small car segment and should designpricing strategies to best address their needs and the positioning of the car. Promotion' - Communicating Publicity in the form of motoring reviews and test drives are critical to the success of a trade launch as this activity should generate sufficient consumer curiosity and interest in the new models. By getting potential car buyers to test drive a car, product usage increases. This has a knock on effect to car sales. The primary above the line medium
used to promote and communicate a new car is through advertising. The choice of TV and outdoor advertising makes perfect marketing sense. Socio-Cultural Influences like the cultural influences ,caste setup and hierarchies, sex role playing also laterally or directly influences the final decision The consumer's behaviour is also influenced by (other) social factors as the reference groups , family , social rules and statuses A buyer's decisions are also strongly influenced by personal characteristics, like:
Primary Objective:
To study the buying process and associated behaviors in entry level cars and the perception Indian brands versus Global brands in the minds of the Indian class conscious consumers.
Secondary Objective:
1. Evaluate the passenger car segment and assess visible changes that have taken place over the years. 2. Buying behavior with respect to the passenger car segment.
3. Influence of the dealers if any in the final decision making process. 4. Environmental influence if any. 5. Extent of availability of alternatives-CSD, Second Hand Cars Market -and their resultant influence of decision making process altogether
He concluded, It is the interaction of the situation and the individual that leads to behavior. The study of consumer behavior is justified as a separate domain of inquiry because when situational cues lead people to perceive themselves as customers, they then interpret the world differently than when they do not perceive themselves as customers, and that influences their behavior. A study conducted by Evan Hirsh, Steve Hedlund & Mark Schweiger in 2001 about the perception of the brands, which concludes that in the absence of a strong brand, price is the only plausible way to affect near-term demand. Hence, curtailing incentives in an effort to build brand is not likely an economically viable option. Many manufacturers have made brand positioning and development a key item on their marketing agenda. Yet brands are not the product of manufacturers' marketing efforts. Instead, consumers base their understanding of an automotive brand's value on their accumulated experience with that brand's products. If you want to change the Brand, change the products for the better. The research conducted on the buying behaviour of cars and what role does the brand play in it by Sankar Radhakrishnan in June 2001 was a great help for conducting survey on the consumer behaviour for buying cars with relation to the perception of brands. A thought provoking point thrown up by the survey was the view that advertising does not have any impact on the choice of a particular brand by the prospective buyer. Buying a new car often set in motion by emotional need-based factors. The study found that the more rational reasons for buying a car are frequently sparked off by the psychological benefits that owning a car bring. Emotions also work throughout the purchase process, right down to the choice of the brand. The study found that both rational and emotional factors trigger the decision to buy a car and also operate throughout the purchase process. The study drives home a point that branding is here to stay. This is especially true of the category such as cars, where it is often difficult to distinguish between the competing models on purely technical or functional parameters. The brand thus becomes the most meaningful differentiator and a safe choice. While the functional parameters do trigger the decision to purchase a car and also operate through the purchase process. Many researches have been done on the consumer buying behaviour but the study done by Valerie S. Folkes (from The University of Southern California) actually helped to discover the new meaning of the buying behaviour. He concluded, It is the interaction of the situation and the individual that leads to behavior. The study of consumer behavior is justified as a separate domain of inquiry because when situational cues lead people to perceive themselves as customers, they
then interpret the world differently than when they do not perceive themselves as customers, and that influences their behavior. A study conducted by Evan Hirsh, Steve Hedlund & Mark Schweiger in 2001 about the perception of the brands, which concludes that in the absence of a strong brand, price is the only plausible way to affect near-term demand. Hence, curtailing incentives in an effort to build brand is not likely an economically viable option. Many manufacturers have made brand positioning and development a key item on their marketing agenda. Yet brands are not the product of manufacturers' marketing efforts. Instead, consumers base their understanding of an automotive brand's value on their accumulated experience with that brand's products. If you want to change the Brand, change the products for the better. All these points were found very useful from the marketer's perspective to improve the image of the brand in the minds of the consumers. Since brand form an important attribute for the decision making of a high involvement product like a car. The ethical and non-ethical practices in marketing are under exercise also . Marketing practice is now busy integrating the potential of information and communication technologies through the utilization of databases and Internet marketing. Billions of potential consumers can now be reached this way. Singhapakdi (1999) showed that marketing managers who perceive an ethical problem in a situation are more likely to have an ethical intention. Hence, we suggest that marketing professionals engage in more thought and reflect on their marketing practices on the Internet. This could lead to a greater consciousness and hence to the development of more ethical intentions and practices. The question of adopting an ethical marketing behavior does not only boil down to providing a firm's policy concerning information privacy, it should also be demonstrated in marketing actions. According to Cherrier (2005) there are two ways to view ethical consumption: Conservative and liberal. According to the conservative view consumers need to obey a prescriptive set of ethical norms in order to consume ethically. As the number of marketing messages increases, the more difficult it is to reach out with the intended marketing message. The cluttered marketing environment and the continuous exposure of marketing communication are challenging for marketers. (Rosengren, 2008) Consumer perception and purchase of fair trade products have been a topic of intrigue for researchers for a long time, because of the complexities involved in accurately measuring why and how consumers go for ethical goods. Previous research has
attributed the fair trade concept to be of interest to only a small group of usually ethically minded consumers, and recently to more highly educated high income women. Demographics also played a great part in the ethical purchases of consumers, with research from Littrell and Dickson (1999) that fair-trade buyers were demographically homogeneous and consisted of highly educated, well-off women in their forties, with a large portion being teachers, health professionals and social workers. Forte & Lamont (1998) found out that there is an increase in purchases based on a company's role in the society, with consumers more likely to purchase from a company that is actively involved in social activities in their communities than those which are not. Social responsibility and ethical purchase is not the dominant issue in consumer purchase decision (Boulstridge & Carrigan, 2000) cited in Pelsmacker et al (2005) as most consumers do not carry out what they say they will do during answering research questions. According to Boulstridge and Carrigan, (2000) consumers are expecting that companies have high ethical behaviour and are willing to pay more for products produced by companies with high ethical behaviour. However, products produced from companies that are unethical are still bought, but they are expected to be cheap. The consumers' way of retribution against unethical companies are through decreased willingness to pay high prices. Another aspect is how the businees ethics affect business relationships. According to Zineldin (2000) long-term relationships are built on ethical and moral understanding which is crucial for mutal benefits and a rewarding relationship. Furthermore, the importance of business ethics is determined by consumers interest in a just and good society. Making the decision regarding an automobile in not at all different .It vibrates on the same platform and requires similar decisional inputs before the consumer arrives at the final word.
Nano has been having issues following fire incidents with six reported cases since its launch in 2009. Tata Motors had offered to provide additional safety measures free of cost as a precautionary measure, although it claimed that the Nano is absolutely safe. The study pointed out that car owners in Northern India are relatively less satisfied compared to those in other parts of the country, primarily because of after sales services as the age of the car grows.Apart from the entry level compact car segment, MSI's Zen Estilo and A-Star jointly topped the premium compact car category in customer satisfaction. The survey covered 9,300 car buyers, opting for 56 models. In interviews, companies identified two critical issues for the growth of the small car market: Affordability & Credit: In Indian terms even small cars are costly - the average small car costs around 12 times average annual disposable income. Small, fuel efficient cars will remain the main market .It is not only a matter of the cost of the vehicle in the showroom, it is also the total cost of ownership. But what is changing is that vehicle demand used to be driven by government, by institutions and private companies now it is being driven by private, middle-class consumer demand. And for this set of consumers, affordability is the key issue. The financing and taxation will continue to shape the market for larger cars. The medium segment is still dominated by company cars, the sort of thing that medium- to high-level managers get. Either companies buy fleets, or they offer employees finance. And in this segment a lot will depend on whether there are new fringe benefit taxes. Attitudes: Indians are savers, they are frugal, they are cost conscious, and they are very driven by value for money . Most companies believe that this means that medium sized cars will remain hard to sell in volume - but that despite the conservatism of consumers, attitude changes will drive small car sales. There is a huge social shift in India . People are coming from rural areas to the cities, two-wheelers are giving way to four wheelers, and as a result the very small 800-1000 cc car market is going to grow very fast. Plus we are moving to an era of dual incomes, husband and wife both working, and we are also seeing new concerns about two-wheeler safety that support small car sales. A growing percentage of vehicles in the Indian market will run on alternative fuels Crisil Research said the Nano price point would see a 65 per cent increase in the number of families that can afford a car. However, it forecast that at the significantly redefined threshold for car ownership in India, annual car sales have the potential to increase by 20 per cent over 2007-08. India's entry-level car market is estimated at 400,000 units a year, primarily consisting of Maruti-Suzuki's 800 and Alto and some base models of the Hyundai Santro and Maruti's Wagon-R, cars that are priced below Rs 300,000 to Rs 3,50,000 on the road.
The Nano, which is expected to hit the market in September/October 2008, will be priced at roughly Rs 1,30,000 (Rs 100,000 excluding VAT and transport costs), promising to be the world's cheapest car. Several other manufacturers-- Bajaj Auto ,Ford and Honda among them -- also plan entry-level car launches, but they are unlikely to be at price points as low as the Nano. The immediate potential demand for a car at 1.6 million units is based on non-car owner respondents who were asked whether they were aspiring to buy a car-- any car-- in the next 12 months. The survey had a sample size of 1 million households, extrapolated to 215.9 million households in India with at least one earner. The survey analysis suggests that the potential buyers of cars are households with an annual income of Rs 200,000 and above that do not own a car. The analysis considers all households that can afford a small car and do not currently own a single car. According to the survey, which had a sample size of nearly a million households, over 12.88 million households out of the 19 million households with annual income above Rs 200,000 currently do not own a car (either new or second hand). In the case of households with annual income between Rs 1,50,000 and Rs 200,000, there are 10 million households that own a two-wheeler, but do not currently have a car. The survey shows nearly 55 per cent of the 1.6 million demand is expected from rural India and smaller towns, with the near-term demand from the six super metros estimated at 0.25 million. Within this, as many as 0.8 million non-car households, who were planning to buy only a two-wheeler may now aspire for a car due to the lower price point for a car like the Nano. If one were to assume that no household, with annual income above Rs 500,000 would buy a small car, the near-term demand estimate is still very high at over 1.26 million units.
The desk research will comprise of evaluating the secondary data to assess the following:
a. b. c. d. Understanding the overall passenger car market. Assess the visible changes that have taken place in the market. Evaluate the current trends in the buyer behavior. Understand the current consumer approaches towards global vs Indian brands.
The field research will be re-validation of the findings of the secondary data findings and to achieve the primary objective.
a. Method of data collection: Structured disguised questionnaire will be developed to understand the consumer perception of global vs Indian brands. b. Sampling:
1. Sample Profile: This will a mix of dealers and prospective consumers of car, selected through the simple random sampling. For the dealer it will be stratified sampling selection technique used. 2. Sample Size : Dealers - 10 , Consumers - 50 3. Sampling Technique: Simple random sampling for the consumer and stratified sampling for the dealers.
3.2 Data
Method of data collection: Structured disguised questionnaire will be developed to understand the consumer perception of global vs Indian brands. Sampling: This will a mix of dealers and prospective consumers of car, selected through the simple random sampling. The fieldwork would be undertaken with the structured disguised questionnaire to understand the middle class consumer's perception of global Vs Indian brands.
The Sample Profile comprises of dealers and prospective class conscious consumers of car, selected through the simple random sampling. For the dealer will be stratified sampling selection technique used a sample size of 10. The sample size of consumers comprises of 50.
Mini-Segment Cars
Mid-segment Cars Consider the following Parameters for their Purchase of Cars:
Diagrams 6-13 depict the parameters that people consider to purchase a new car. Out of the total respondents surveyed, 45% of the people highly agree, BRAND as parameter; 50% as STYLE, 58% as MILAGE, 44% as SPACE, 26% as comfort, 54 % as CREDIT SCHEMES, 54% as COLOUR, 34% as accessories. Diagram 14 reflects the respondent's need to buy a new car. 48% of the respondents said they would buy a new car as their family size is increased, 46% to upgrade for a better car, and only 6% were first time buyers. Diagrams 15-18 In the mini-segment car companies' maximum customers are highly satisfied with the good dealer coverage and the facilities in the outlet of Maruti Udyog. Secondly, most of the customers consider that Hyundai Motors (Korean Company) has emerged to be the No. 1 brand today and with maximum customers being highly satisfied with its after sales service. Tata Motors image and brand is deteriorating. Fiat India is doing average in all aspects
dialogue functionality to help consumers make final purchase or even additional purchases. In the post-purchase phase, auto makers and retailers may regularly check the positive or negative comments and feedbacks posted on some websites' forums by some users.
We can also conclude that the internationality of the brands does have an effect on the purchase decision of the car in the minds of the consumers. As we had already seen that the foreign brands like Hyundai, Honda, Fiat, are doing really well due to their excellence in the product quality, technology, features, price etc. All these attributes does play a very important role in comparison with the local brands like Maruti Suzuki , Tata Motors etc. whose share in the market is declining day by day. Car market in ----- is growing consistently and the flood of new models, aggressive advertising, coupled with competitive pricing and various finance options, customer is very much positive to own a four-wheeler. Observing the recommendations, it may be concluded that car manufacturers already moving the gear to motivate customer with attractive advertising and positioning, and innovations in scheme designing, tie-ups with various auto loan providers has ignited the growth fuel and the pricing game has started in the market. So the customer has more choices at competitive prices. So with more car brands set to enter the country, and existing players planning to launch new models, the options available to the prospective buyer are going to increase. However, taking a decision on which model to buy is also going to get more challenging. For the Indian car buyer it's perhaps time to get more market savvy. For the prospects of the Indian Car market, the introduction of low priced cars is critical. With the low-priced cars it is possible that the growth of the market will accelerate, as the drop in the car prices may make cars more affordable and increase the number of first time buyers. In addition, low-priced cars may satisfy demand for the second cars for households in the wealthy and upper middle classes.
e) What is the annual household income? 1) 10000-25000 p 2) 25000-50000 p 3) above 50000 f) I already have a Car . p Ye p No and p Planning to buy If Yes, which one? Maruti 800 p Santro p Indicap Zen pPaliop Matizp Alto p Wagon R
Esteemp Ford Iconp Accentp Baleno Opal Corsap Opal Astra p Honda Cityp Skoda M.Lancer p Toyota Corollap Cheveletp Mercedes Any other
g) I have-------cars.( Please tick which ever is applicable). 1p 2 p 3 and above h) I would consider the following for my new purchase: (Tick of the scale of 1-5 where one stands for most important and 5 stands for least important)
Features
Brand ppppp Mileage ppppp
Convenience
12345 Space ppppp Comfort ppppp
Cosmetics
Colour ppppp Accessories ppppp
Style ppppp
Other Influences
After sale service ppppp Exchange offer ppppp Available finance ppppp Discount ppppp i) What was the need for the new car?( Pick your choice from below)
a. b. c. d. Increase in family size p Upgrading for a better car p First time buyer p Increased Affordability p
j) My biggest influence in buying a car was (Tick on the scale of 1-5 where 1 stands for strongly agree and 5 stands for highly disagree) my family 1p 2p 3p 4p 5 my friends, relatives and colleagues 1p 2p 3p 4p 5 my dealer and its staff 1p 2p 3p 4p 5 TV advertising and Webs 1p 2p 3p 4p 5 k) How many visit did you made before you made the final purchase? 1-2 visits p 2-3 visits p more than 4 l) What is your opinion of the performance of the following brands on the following parameters on a scale of 1to 5 , where 1 stands for highly satisfied and 5 stands for highly dissatisfied?
Fuel EconomyCostFeaturesStyle Maintenance Cost Maruti 800 pppp p Santro ppppp Indica ppppp Zen ppppp Palio ppppp Alto ppppp Wagon R ppppp Esteem ppppp Ford Icon ppppp Accent ppppp Baleno ppppp Opal Corsa ppppp Opal Astra ppppp Honda City ppppp Mitsubishi Lancer ppppp Toyota Corolla ppppp Skoda ppppp Chevelet ppppp m) What is your opinion of the performance of the following company on the following parameters on a scale of 1to 5 , where 1 stands for highly satisfied and 5 stands for highly dissatisfied? Good dealer coverage Maruti Udyog p Facilities in the outlet p After sales Reputation of service the company p p Resale Value p
Hyundai Hindustan Motors Fiat Honda General Motors Daewoo Ford Toyota Tata Motors Mercedes Mahindra and Mahinra
p p p p p p p p p p p
p p p p p p p p p p p
p p p p p p p p p p p
p p p p p p p p p p p
p p p p p p p p p p p
n) Regarding car finance, would you like to undertake credit? Yes No If Yes, how would you move your loan application?
Through Car Dealer Directly approaching the bank Through loan agent Search the network for discounts Utilize on line services Others
Aim for convenience ,even if end paying more Discounts negotiation Linkages and faster work accomplishment Rely on nexus between financer, dealer, registration office