GUIDED BY

PROF. KHYATI PATEL

Acknowledgement
Apart from the efforts of me, the success of this project depends largely on the encouragement and guidelines of many others. We take this opportunity to express our gratitude to the people who have been instrumental in the successful completion of this project.

We would like to show my greatest appreciation to Prof. Khyati Patel & BMS Dept of Vartak College. We cant say thank you enough for your tremendous support and help. We feel motivated and encouraged every time under your guidance. Without your encouragement and guidance this project would not have materialized.

The guidance and support received from Prof Khyati Patel who guided us to complete this project, was vital for the success of the project. We are grateful for her constant support and help.

Group Members:
SURAJ JAISWAL ARVIND PATIL MILIND SAVLE JYOTI SHARMA SUDHA YADAV TUSHAR PATEL

INDEX
1. INTRODUCTION TO MARKET RESEARCH 2. MARKET RESEARCH PROCESS:STEPS INVOLVED IN MARKET RESEARCH PROCESS

3. AUTOMOBILE SECTOR:

INTRODUCTION SWOT ANALYSIS ROLE IN GDP CASE STUDY:- HYUNDAI MOTORS INDIA LTD.(HMIL)

INTRODUCTION
American Marketing Association (AMA) defines marketing research as "Marketing research is the function that links the consumer, customer, problems; marketing and public to the marketer refine, and through information marketing actions; the information used to identify and define marketing opportunities and generate, as a evaluate monitor marketing performance; and improve understanding of process. Marketing research specifies information required to address these issues, designs the methods for collecting information, manages and implements the data collection process, analyzes, and communicates the findings and their implications." Marketing research is the research that companies do to study consumers and other companies. Marketing research seeks to understand the best ways to connect a consumer and a product, with the hopes that the consumer will buy. This involved evaluating the current marketing already being done for that product, or similar products that are created by the same company, and determining how well the marketing campaigns are working. This also involves studying the marketing techniques of other companies. Marketers begin research with a problem or a question. They don't approach research with the goal to learn more about a particular market. Instead, they want to know why a particular market is doing well, or why it is falling and what can be done to change that. They may also want to know why consumers are not buying some products, but gladly purchasing similar products. Research is then done to answer the question, and that answer can be turned into a marketing technique that may get better results.

There are two types of marketing research. The first is consumer market research. The goal is to study the purchasing habits of consumers. This can be done by tallying up how much of a product is sold, through surveys or through other means. The information gathered from consumers can be used to analyze current marketing campaigns and to create new ones. Marketing research is not the same as market research. Marketing research studies how and why consumers and businesses buy, and how those sales can be increased or why they have decreased. It involves in-depth studies into the affect of advertisements and market conditions on consumers. Market research is the research that may be done into a single market, focusing on the size and trends in that market. Consider this example. Company A sells kids' cereal. It was once really popular, but now its sales have dropped almost 25 percent in the past year, and it wants to know why. Marketing research is done to answer this question. Research reveals that Company B's kids' cereal has seen a substantial jump in sales. The two companies sell a similar product. More research reveals that Company B has added some vitamins to its product, changed the look of the cereal box, and is running advertisements to promote this new "healthier" cereal. In fact, lots of food companies are developing healthier versions of their products, and they are all selling well. Even non-food products, such as sports equipment and books about healthy living, are seeing an increase in sales. Managers need information in order to introduce products and services that create value in the mind of the customer. But the perception of value is a subjective one, and what customers value this year may be quite different

from what they value next year. As such, the attributes that create value cannot simply be deduced from common knowledge. Rather, data must be collected and analyzed. The goal of marketing research is to provide the facts and direction that managers need to make their more important marketing decisions. To maximize the benefit of marketing research, those who use it need to understand the research process and its limitations.

Marketing Research vs. Market Research These terms often are used interchangeably, but technically there is a difference. Market research deals specifically with the gathering of information about a market's size and trends. Marketing research covers a wider range of activities. While it may involve market research, marketing research is a more general systematic process that can be applied to a variety of marketing The Value of Information Information can be useful, but what determines its real value to the organization? In general, the value of information is determined by:

problems.

The ability and willingness to act on the information. The accuracy of the information. The level of indecisiveness that would exist without the information. The amount of variation in the possible results. The level of risk aversion. The reaction of competitors to any decision improved by the information.

The cost of the information in terms of time and money.

The Marketing Research Process

Once the need for marketing research has been established, most marketing research projects involve these steps: 1. 2. 3. 4. 5. 6. 7. 8. Define the problem Determine research design Identify data types and sources Design data collection forms and questionnaires Determine sample plan and size Collect the data Analyze and interpret the data Prepare the research report

1. Problem Definition The decision problem faced by management must be translated into a market research problem in the form of questions that define the information that is required to make the decision and how this information can be obtained. Thus, the decision problem is translated into a research problem. For example, a decision problem may be whether to launch a new product. The corresponding research problem might be to assess whether the market would accept the new product.

The objective of the research should be defined clearly. To ensure that the true decision problem is addressed, it is useful for the researcher to outline possible scenarios of the research results and then for the decision maker to

formulate plans of action under each scenario. The use of such scenarios can ensure that the purpose of the research is agreed upon before it commences. 2. Research Design Marketing research can classified in one of three categories:

Exploratory research Descriptive research Causal research

These classifications are made according to the objective of the research. In some cases the research will fall into one of these categories, but in other cases different phases of the same research project will fall into different categories.

Exploratory research has the goal of formulating problems more precisely, clarifying concepts, gathering explanations, gaining insight, eliminating impractical ideas, and forming hypotheses. Exploratory research can be performed using a literature search, surveying certain people about their experiences, focus groups, and case studies. When surveying people, exploratory research studies would not try to acquire a representative sample, but rather, seek to interview those who are knowledgeable and who might be able to provide insight concerning the relationship among variables. Case studies can include contrasting situations or benchmarking against an organization known for its excellence. Exploratory research may develop hypotheses, but it does not seek to test them. Exploratory research is characterized by its flexibility.

Descriptive research is more rigid than exploratory research and seeks to describe users of a product, determine the proportion of the population that uses a product, or predict future demand for a product. As opposed to exploratory research, descriptive research should define questions, people surveyed, and the method of analysis prior to beginning data collection. In other words, the who, what, where, when, why, and how aspects of the research should be defined. Such preparation allows one the opportunity to make any required changes before the costly process of data collection has begun. There are two basic types of descriptive research: longitudinal studies and cross-sectional studies. Longitudinal studies are time series analyses that make repeated measurements of the same individuals, thus allowing one to monitor behavior such as brand-switching. However, longitudinal studies are not necessarily representative since many people may refuse to participate because of the commitment required. Cross-sectional studies sample the population to make measurements at a specific point in time. A special type of crosssectional analysis is a cohort analysis, which tracks an aggregate of individuals who experience the same event within the same time interval over time. Cohort analyses are useful for long-term forecasting of product demand.

Causal research seeks to find cause and effect relationships between variables. It accomplishes this goal through laboratory and field experiments.

3. Data Types and Sources Secondary Data:Before going through the time and expense of collecting primary data, one should check for secondary data that previously may have been collected for other purposes but that can be used in the immediate study. Secondary data may be internal to the firm, such as sales invoices and warranty cards, or may be external to the firm such as published data or commercially available data. The government census is a valuable source of secondary data. Secondary data has the advantage of saving time and reducing data gathering costs. The disadvantages are that the data may not fit the problem perfectly and that the accuracy may be more difficult to verify for secondary data than for primary data. Some secondary data is republished by organizations other than the original source. Because errors can occur and important explanations may be missing in republished data, one should obtain secondary data directly from its source. One also should consider who the source is and whether the results may be biased. There are several criteria that one should use to evaluate secondary data.

Whether the data is useful in the research study. How current the data is and whether it applies to time period of interest. Errors and accuracy - whether the data is dependable and can be verified. Presence of bias in the data.

Specifications and methodologies used, including data collection method, response rate, quality and analysis of the data, sample size and sampling technique, and questionnaire design.

Objective of the original data collection. Nature of the data, including definition of variables, units of measure, categories used, and relationships examined.

PrimaryData:Often, secondary data must be supplemented by primary data originated specifically for the study at hand. Some common types of primary data are:

demographic and socioeconomic characteristics psychological and lifestyle characteristics attitudes and opinions awareness and knowledge - for example, brand awareness intentions - for example, purchase intentions. While useful, intentions are not a reliable indication of actual future behavior. motivation - a person's motives are more stable than his/her behavior, so motive is a better predictor of future behavior than is past behavior. behavior

Primary data can be obtained by communication or by observation. Communication involves questioning respondents either verbally or in writing. This method is versatile, since one needs only to ask for the information; however, the response may not be accurate. Communication usually is quicker and cheaper than observation. Observation involves the recording of actions and is performed by either a person or some mechanical or electronic device. Observation is less versatile than communication since some attributes of a person may not be readily observable, such as

attitudes, awareness, knowledge, intentions, and motivation. Observation also might take longer since observers may have to wait for appropriate events to occur, though observation using scanner data might be quicker and more cost effective. Observation typically is more accurate than communication. Personal interviews have an interviewer bias that mail-in questionnaires do not have. For example, in a personal interview the respondent's perception of the interviewer may affect the responses.

4. Questionnaire Design The questionnaire is an important tool for gathering primary data. Poorly constructed questions can result in large errors and invalidate the research data, so significant effort should be put into the questionnaire design. The questionnaire should be tested thoroughly prior to conducting the survey. The questionnaire is a structured technique for collecting primary data in a marketing survey. It is a series of written or verbal questions for which the respondent provides answers. A well-designed questionnaire motivates the respondent to provide complete and accurate information. The survey questionnaire should not be viewed as a stand-alone tool. Along with the questionnaire there is field work, rewards for the respondents, and communication aids, all of which are important components of the questionnaire process.

Steps to Developing a Questionnaire:-

The following are steps to developing a questionnaire - the exact order may vary somewhat.

Determine which information is being sought. Choose a question type (structure and amount of disguise) and method of administration (for example, written form, email or web form, telephone interview, verbal interview).

Determine the general question content needed to obtain the desired information. Determine the form of response. Choose the exact question wording. Arrange the questions into an effective sequence. Specify the physical characteristics of the questionnaire (paper type, number of questions per page, etc.) Test the questionnaire and revise it as needed.

Question Type and Administration Method:Some question types include fixed alternative, projective:

open

ended, and

Fixed-alternative questions provide multiple-choice answers. These types of questions are good when the possible replies are few and clear-cut, such as age, car ownership, etc.

Open-ended questions allow the respondent to better express his/her answer, but are more difficult to administer and analyze. Often, openended questions are administered in a depth interview. This technique is most appropriate for exploratory research.

Projective methods use a vague question or stimulus and attempt to project a person's attitudes from the response. The questionnaire could use techniques such as word associations and fill-in-the-blank sentences. Projective methods are difficult to analyze and are better suited for exploratory research than for descriptive or causal research.

There are three commonly used rating scales: graphic, itemized, and comparative.

Graphic - simply a line on which one marks an X anywhere between the extremes with an infinite number of places where the X can be placed.

Itemized - similar to graphic except there are a limited number of categories that can be marked. Comparative - the respondent compares one attribute to others. Examples include the Q-sort technique and the constant sum method, which requires one to divide a fixed number of points among the alternatives.

Questionnaires typically are administered via a personal or telephone interview or via a mail questionnaire. Newer methods include e-mail and the Web.

Question Content:Each question should have a specific purpose or should not be included in the questionnaire. The goal of the questions is to obtain the required information. This is not to say that all questions directly must ask for the

desired data. In some cases questions can be used to establish rapport with the respondent, especially when sensitive information is being sought. Sensitive questions can be posed in ways to increase response likelihood and to facilitate more honest responses. Some techniques are:

Place the question in a series of less personal questions. State that the behavior or attitude is not so unusual. Phrase the question in terms of other people, not the respondent. Provide response choices that specify ranges, not exact numbers. Use a randomized response model giving the respondent pairs of questions with a randomly assigned one to answer. The interviewer does not know which question the person is answering, but the overall percentage of people assigned to the sensitive question is known and statistics can be calculated.

Form of Question Response Questions can be designed for open-ended, dichotomous, or multichotomous responses.

Open-ended responses are difficult to evaluate, but are useful early in the research process for determining the possible range of responses. Dichotomous questions have two possible opposing responses, for example, "Yes" and "No". Multichotomous questions have a range of responses as in a multiple choice test.

The questionnaire designer should consider that respondents may not be able to answer some questions accurately. Two types of error are telescoping error and recall loss.

Telescoping error is an error resulting from the tendency of people to remember events as occurring more recently than they actually did. Recall loss occurs when people forget that an event even occurred. For recent events, telescoping error dominates; for events that happened in the distant past, recall loss dominates.

Question Wording:The questions should be worded so that they are unambiguous and easily understood. The wording should consider the full context of the respondent's situation. In particular, consider the who, what, when, where, why, and how dimensions of the question. For example, the question,

"Which brand of toothpaste do you use?"

might seem clear at first. However, the respondent may consider "you" to be the family as a whole rather than he or she personally. If the respondent recently changed brands, the "when" dimension of the question may be relevant. If the respondent uses a different, more compact tube of toothpaste when traveling, the "where" aspect of the question will matter. A better wording of the question might be,

"Which brand of toothpaste have you used personally at home during the past 6 months? If you have used more than one brand, please list each of them."
When asking about the frequency of use, the questions should avoid ambiguous words such as "sometimes", "occasionally", or "regularly". Rather, more specific terms such as "once per day" and "2-3 times per week"

should

be

used.

Test and Revise the Questionnaire:The questionnaire should be pre-tested in two stages before distributing. In the first stage, it should be administered using personal interviews in order to get better feedback on problems such as ambiguous questions. Then, it should be tested in the same way it will be administered. The data from the test should be analyzed the same way the administered data is to be analyzed in order to uncover any unanticipated shortcomings. Different respondents will answer the same questionnaire differently. One hopes that the differences are due to real differences in the measured characteristics, but that often is not the case. Some sources of the differences between scores of different respondents are:

True differences in the characteristic being measured. Differences in other characteristics such as response styles. Differences in transient personal factors such as fatigue, etc. Differences in situation, such as whether spouse is present. Differences in the administration, such as interviewer tone of voice. Differences resulting from sampling of items relevant toward the characteristic being measured. Differences resulting from lack of clarity of the question - may mean different things to different people. Differences caused by mechanical factors such as space to answer, inadvertent check marks, etc.

Measurement Scales

Attributes can be measured on nominal, ordinal, interval, and ratio scales:

Nominal numbers are simply identifiers, with the only permissible mathematical use being for counting. Example: social security numbers.

Ordinal scales are used for ranking. The interval between the numbers conveys no meaning. Median and mode calculations can be performed on ordinal numbers. Example: class ranking

Interval scales maintain an equal interval between numbers. These scales can be used for ranking and for measuring the interval between two numbers. Since the zero point is arbitrary, ratios cannot be taken between numbers on an interval scale; however, mean, median, and mode are all valid. Example: temperature scale

Ratio scales are referenced to an absolute zero values, so ratios between numbers on the scale are meaningful. In addition to mean, median, and mode, geometric averages also are valid. Example: weight

Attitude Measurement Many of the questions in a marketing research survey are designed to measure attitudes. Attitudes are a person's general evaluation of something. Customer attitude is an important factor for the following reasons:

Attitude helps to explain how ready one is to do something. Attitudes do not change much over time. Attitudes produce consistency in behavior. Attitudes can be related to preferences.

Attitudes can be measured using the following procedures:

Self-reporting - subjects are asked directly about their attitudes. Selfreporting is the most common technique used to measure attitude.

Observation of behavior - assuming that one's behavior is a result of one's attitudes, attitudes can be inferred by observing behavior. For example, one's attitude about an issue can be inferred by whether he/she signs a petition related to it.

Indirect techniques - use unstructured stimuli such as word association tests. Performance of objective tasks - assumes that one's performance depends on attitude. For example, the subject can be asked to memorize the arguments of both sides of an issue. He/she is more likely to do a better job on the arguments that favor his/her stance.

Physiological reactions - subject's response to a stimuli is measured using electronic or mechanical means. While the intensity can be measured, it is difficult to know if the attitude is positive or negative.

Multiple measures - a mixture of techniques can be used to validate the findings, especially worthwhile when self-reporting is used.

5. Sampling Plan In designing the research study, one should consider the potential errors. Two sources of errors are random sampling error and non-sampling error. Sampling errors are those due to the fact that there is a non-zero confidence interval of the results because of the sample size being less than the population being studied. Non-sampling errors are those caused by faulty coding, untruthful responses, respondent fatigue, etc. There is a tradeoff between sample size and cost. The larger the sample size, the smaller the sampling error but the higher the cost. After a certain point the smaller sampling error cannot be justified by the additional cost.

While a larger sample size may reduce sampling error, it actually may increase the total error. There are two reasons for this effect. First, a larger sample size may reduce the ability to follow up on non-responses. Second, even if there is a sufficient number of interviewers for follow-ups, a larger number of interviewers may result in a less uniform interview process.

6. Data Collection In addition to the intrinsic sampling error, the actual data collection process will introduce additional errors. These errors are called non-sampling errors. Some non-sampling errors may be intentional on the part of the interviewer, who may introduce a bias by leading the respondent to provide a certain response. The interviewer also may introduce unintentional errors, for example, due to not having a clear understanding of the interview process or due to fatigue. Respondents also may introduce errors. A respondent may introduce intentional errors by lying or simply by not responding to a question. A respondent may introduce unintentional errors by not understanding the question, guessing, not paying close attention, and being fatigued or distracted. Such non-sampling errors can be reduced through quality control techniques.

7. Data Analysis - Preliminary Steps Before analysis can be performed, raw data must be transformed into the right format. First, it must be edited so that errors can be corrected or omitted. The data must then be coded; this procedure converts the edited

raw data into numbers or symbols. A codebook is created to document how the data was coded. Finally, the data is tabulated to count the number of samples falling into various categories. Simple tabulations count the occurrences of each variable independently of the other variables. Cross tabulations, also known as contingency tables or cross tabs, treats two or more variables simultaneously. However, since the variables are in a twodimensional table, cross tabbing more than two variables is difficult to visualize since more than two dimensions would be required. Cross tabulation can be performed for nominal and ordinal variables. Cross tabulation is the most commonly utilized data analysis method in marketing research. Many studies take the analysis no further than cross tabulation. This technique divides the sample into sub-groups to show how the dependent variable varies from one subgroup to another. A third variable can be introduced to uncover a relationship that initially was not evident.

Conjoint Analysis:The conjoint analysis is a powerful technique for determining consumer preferences for product attributes. Conjoint analysis infers the relative importance of attributes by presenting consumers with a set of features of two hypothetical products and asking them which product they prefer. This question is repeated over several sets of attribute values. The results allow one to predict which attributes are the more important, the combination of attribute values that is the most preferred. From this information, the expected market share of a given design can be estimated.

Discriminant Analysis:-

Analysis of the difference in means between groups provides information about individual variables, it is not useful for determine their individual impacts when the variables are used in combination. Since some variables will not be independent from one another, one needs a test that can consider them simultaneously in order to take into account their interrelationship. One such test is to construct a linear combination, essentially a weighted sum of the variables. To determine which variables discriminate between two or more naturally occurring groups, discriminant analysis is used. Discriminant analysis can determine which variables are the best predictors of group membership. It determines which groups differ with respect to the mean of a variable, and then uses that variable to predict new cases of group membership. Essentially, the discriminant function problem is a one-way ANOVA problem in that one can determine whether multiple groups are significantly different from one another with respect to the mean of a particular variable. A discriminant analysis consists of the following steps: 1. Formulate the problem. 2. Determine the discriminant function coefficients that result in the highest ratio of between-group variation to within-group variation. 3. Test the significance of the discriminant function. 4. Interpret the results. 5. Determine the validity of the analysis.

Discriminant analysis analyzes the dependency relationship, whereas factor analysis and cluster analysis address the interdependency among variables.

Factor Analysis:-

Factor analysis is a very popular technique to analyze interdependence. Factor analysis studies the entire set of interrelationships without defining variables to be dependent or independent. Factor analysis combines variables to create a smaller set of factors. Mathematically, a factor is a linear combination of variables. A factor is not directly observable; it is inferred from the variables. The technique identifies underlying structure among the variables, reducing the number of variables to a more manageable set. Factor analysis groups variables according to their correlation.

Cluster Analysis:Market segmentation usually is based not on one factor but on multiple factors. Initially, each variable represents its own cluster. The challenge is to find a way to combine variables so that relatively homogenous clusters can be formed. Such clusters should be internally homogenous and externally heterogeneous. Cluster analysis is one way to accomplish this goal. Rather than being a statistical test, it is more of a collection of algorithms for grouping objects, or in the case of marketing research, grouping people. Cluster analysis is useful in the exploratory phase of research when there are no a-priori hypotheses. Cluster analysis steps: 1. Formulate the problem, collecting data and choosing the variables to analyze. 2. Choose a distance measure. The most common is the Euclidean distance. Other possibilities include the squared Euclidean distance,

city-block (Manhattan) distance, Chebychev distance, power distance, and percent disagreement. 3. Choose a clustering procedure (linkage, nodal, or factor procedures). 4. Determine the number of clusters. They should be well separated and ideally they should be distinct enough to give them descriptive names such as professionals, buffs, etc. 5. Profile the clusters. 6. Assess the validity of the clustering.

8. Marketing Research Report The format of the marketing research report varies with the needs of the organization. The report often contains the following sections:

Authorization letter for the research Table of Contents List of illustrations Executive summary Research objectives Methodology Results Limitations Conclusions and recommendations Appendices containing copies of the questionnaires, etc.

Concluding Thoughts Marketing research by itself does not arrive at marketing decisions, nor does it guarantee that the organization will be successful in marketing its

products. However, when conducted in a systematic, analytical, and objective manner, marketing research can reduce the uncertainty in the decision-making process and increase the probability and magnitude of success.

Marketing Research for Strategic Decision Making The two most common uses of marketing research are for diagnostic analysis to understand the market and the firm's current performance, and opportunity analysis to define any unexploited opportunities for growth. Marketing research studies include consumer studies, distribution studies, semantic scaling, multidimensional scaling, intelligence studies, projections, and conjoint analysis. A few of these are outlined below.

Semantic scaling: a very simple rating of how consumers perceive the physical attributes of a product, and what the ideal values of those attributes would be. Semantic scaling is not very accurate since the consumers are polled according to an ordinal ranking so mathematical averaging is not possible. For example, 8 is not necessarily twice as much as 4 in an ordinal ranking system. Furthermore, each person uses the scale differently.

Multidimensional scaling (MDS) addresses the problems associated with semantic scaling by polling the consumer for pair-wise comparisons between products or between one product and the ideal. The assumption is that while people cannot report reliably which attributes drive their choices, they can report perceptions of

similarities between brands. However, MDS analyses do not indicate the relative importance between attributes.

AUTOMOBILE SECTOR

INTRODUCTION:Evolution and growth of Indian auto industry The year 1898 saw the first car rolling out, on the streets of Mumbai. Since then Indian auto industry has witnessed a lot of change. A land of Premier Padminis, Ambassadors, scooters, temps, trucks and autos galore, India had not seen much of choice in vehicles. Only the affluent could think of owning a personal four-wheeler and the clichd image of a car followed by lots of children on a dusty road was actually true. Protectionism Early 1980s This was the pre-1980 era where the manufacturing of automobiles especially cars was subject to strict licensing, restrictive tariff structure and limited avenues for expansion. The advent of foreign technology collaboration came with the inception of Maruti Udyog in collaboration

with Suzuki of Japan in the passenger car segment. Indian roads saw the launch of Maruti 800. It was still not very easy to own a car, first was affordability and next was a long waiting period. Liberalization 1990s In the early 1990s, with liberalization, some more Japanese manufacturers entered the two-wheeler and the commercial vehicle segment in a collaborative arrangement. This period characterized joint ventures in India and the market started opening up. Automobile Industry was delicensed in July 1991 with the announcement of the New Industrial Policy. The passenger car industry was, however, delicensed in 1993. The abolition of the controls led to an avalanche of demand. The era of controls and protection came to an end. Curbs on capacity were done away with, decrease in customs and excise duties meant that a vehicles started getting affordable. The entry of foreign banks with attractive auto finance schemes helped garner a huge base of middle class population. However the market was still ruled by the sellers. Globalization 2000s Early 2000 however saw globalization of Indian auto industry. Several policy changes were introduced with focus on boosting the auto exports. A Core Group on Automotive Research and Development (CAR) was established in 2003 for encouraging R&D activities. Foreign manufactures started looking at India for sourcing auto components. The buyers started ruling the market due to the availability of choices in the form of models, price points and brands. A vibrant economy meant an increase in the GDP and per capita income. These factors turned out to be significant contributors in pushing up the domestic demand. The vast geographic spread of India attracted foreign investments. The marquee brands from

all over the world started courting Indian consumers aggressively. The mature markets in the developed countries paled in comparison to the sheer numbers and the growth phase of the Indian auto industry. For the commercial vehicles, the steady growth in Indian economy led to demand for trucks, tempos, buses etc. The IT and BPO culture that boosted exports and employment also pushed the sales of vehicles. Indian economy also witnessed rapid industrialization. Factories needed transport both for goods and for their employees. The retail boom in India saw malls, supermarket chains mushrooming all over the urban areas, pushed the demand for efficient logistics and that in turn increased the number of commercial vehicles. Growth Trajectory of Indian Auto Industry

This graphic shows the vehicle sales in India since 1980. The sharp increase between 2001 and 2006 is the result of government initiatives, growing economy and disbursement of loans for purchase of vehicles.

A World Bank report puts India up ahead as the fourth largest economy in the world in terms of purchasing power parity. The sales of automobiles have increased due to an increase in income and a rapid increase in private final consumption expenditure. It is estimated that India will see over Rs 30,000 crore being invested by 2010. This is because Indian auto industry is racing ahead with a healthy growth. The graphic below shows the growth trend in the production of automobiles in million units.

What makes the Indian Auto Market attractive? While the markets in the developed countries reach a maturity point, markets such as India are looking very attractive. As the second largest populous country, with poor public transport and infrastructure, most of the people are depending on their personal transport for comfort, convenience and style. The consumers are being wooed by the manufacturers with attractive finance options and with models at various price points. There is a huge potential for the demand of cars because of the low penetration rates of 11 cars for 1000 people. The hub and spoke approach followed by most distributors and suppliers is pushing the demand for commercial vehicles drastically.

The automotive sector is one of the core industries of the Indian economy. Indian Auto industry has come of age only since the complete de-licensing of 1991. Indian auto industry defied global economic recession and continued to register high sales both in domestic and export markets. In 2007, India was ranked as the 12th fastest growing market in the world. Presently, India is the 2nd largest two wheeler market in the world and 4th largest commercial vehicle market worldwide. India is the 11th largest market in the passenger car segment globally which is expected to become the 7th largest market by 2016. India holds a total of 3% share in global four wheeler production and ranks 9th in the world in the production of cars. There is a huge potential which needs to be tapped through an integrated effort of the government, OEMs and also the auto component manufacturers. India is a base for the manufacturing of small cars and has attracted the attention of global giants for investing in this segment. Ernst and Young has predicted the Indian passenger car market to grow at 12 percent annually over the next five years to touch 3.75 million units by 2014 from 1.89 million units at present. Analysts with Ernest and Young say that The industrys turnover is estimated to touch $155 billion by 2016, this would make the Indian auto industry the seventh largest in the world, and the third largest by 2030, behind China and the US. The governments Automotive Mission Plan also envisages India emerging as the worlds seventh largest carmaker by 2016, contributing over 10 percent to the countrys $1.2-trillion economy from under five percent at present.

Indias Nano (the worlds cheapest car) and other small cars are forcing the world to go back to their drawing boards. Indias obsession with hatchbacks has led to designs that score high on fuel and cost efficiencies without compromising on the quality. According to Neeraj Garg, Volkswagen India group sales director: Car manufacturers are betting on hatchbacks in the B+ segment. We expect the segment to constitute nearly 75 percent of volumes in the coming years. Indias Reva (electric car) is very popular abroad as its environment friendly. Spark, the compact car from General Motors, will now come in an electric version, thanks to a tie-up with Bangalores Reva Electric Car Co. With such innovations abound, Indian auto industry is all set to grow strong and become a visible and stronger power in the Global auto industry.

SWOT ANALYSIS:STRENGTH Highly skilled human resource Low wage structure Quality of work Initiatives taken by the Government (setting up Hi-Tech Parks and implementation of e-governance projects) Many global players have set-up operations in India like Microsoft, Oracle, Adobe, etc. Employee salaries in IT sector are increasing tremendously. Low wages benefit will soon come to an end WEAKNESS Absence of practical knowledge Dearth of suitable candidates Less Research and Development Contribution of IT sector to India 's GDP is still rather small.

Following Quality Standards such as ISO 9000, SEI CMM etc. English-speaking professionals Cost competitiveness Quality telecommunications infrastructure Indian time zone (24 x 7 services to the global customers). Time difference between India and America is approximately 12 hours, which is beneficial for outsourcing of work.

OPPORTUNITY High quality IT education market Increasing number of working age people India 's well developed soft infrastructure

THREATS Lack of data security systems Countries like China and Philippines with qualified workforce making efforts to overcome the English language barrier IT development concentrated in a few

Upcoming International Players in the market

cities only

Role of automobile sector in GDP:The Role of Automobile Industry in India GDP has been phenomenon. The Automobile Industry is one of the fastest growing sectors in India. The increase in the demand for cars, and other vehicles, powered by the increase in the income is the primary growth driver of the automobile industry in India. The introduction of tailor made finance schemes, easy repayment schemes has also helped the growth of the automobile sector.

Automobile Industry in India GDP-Facts:

India has become one of the international players in the automobile market In the year 2006-07, the Indian Automobile Industry produced 2.06 million four wheelers and 9 million two and three wheelers The four wheelers include passenger cars, multi-utility vehicles, sports utility vehicles, light, medium and heavy commercial vehicles, etc The three wheelers include mopeds, motor-cycles, scooters, and three wheelers India ranks 2nd in the global two-wheeler market India is the 4th biggest commercial vehicle market in the world India ranks 11th in the international passenger car market India ranks 5th pertaining to the number of bus and truck sold in the world

It is expected that the Automobile Industry in India would be the 7th largest automobile market within the year 2016

Role of Automobile Industry in India GDP-Growth:

The growth rate of the Passenger Cars in the year 2007 is 13.50% The growth rate of the Utility Vehicles in the year 2007 is 10.10% The growth rate of the Multi Purpose Vehicles in the year 2007 is 24.40% The growth rate of the Light Commercial Vehicles in the year 2007 is 16.05% The growth rate of the Commercial Vehicles in the year 2007 is 3.43% The Maruti Udyog Ltd is the largest car manufacturer in the country and the rate of growth in the year 2007 was 20.7% The Mahindra & Mahindra Ltd's cumulative sales for the year 2007 was 1,06,094 units and the rate of growth was 35.8% The Honda Siel Cars India Ltd, the leaders in India pertaining to the manufacturing of premium cars, registered a growth of 16.1 % during the year 2007 and sold 41,638 units

The Daimler Chrysler sales for the year 2007 was 1,681 units in India and the growth rate was more than 22% The General Motors India, registered a 114% increase in the national sales in the August of 2007 The Hero Honda sold more than 2 million units in the Jan-Aug period of the year 2007 The export pertaining to the motorbikes was 3,21,321 units in the year 2007 It is estimated that in the year 2007-08 the motorcycle sales would be 7 million, the car sales would be 1.55 million, and the two-wheelers sales would be 8.3 million

Role of Automobile Industry in India GDP-Foreign Investments:-

The Indian Automobile industry is at present engaged in mergers and acquisitions on the international scale The Indian automobile industry's foreign sector worth US$ 515 million The Mahindra and Mahindra company will be establishing a utility assembly plant in collaboration with Bramont, a local company at Manuas, in North Brazil

In Egypt, the Mahindra and Mahindra company has set up assembly plants in collaboration with the Bavarian Motors The Tata Motors have entered the passenger car market in Saudi Arabia with the launch of Tata Indigo, Tata Indica, and Tata Indigo Marina The TVS Motor Company has established a two-wheeler manufacturing unit at Karawang, in Indonesia The Maruti Udyog Ltd has captured nearly 60% of the small car market in Indonesia The Nissan Motor facility in South Africa was acquired by the Tata Motors to manufacture Tata vehicle for European and South African market

The Jaguar and Land Rover companies owned by the Ford Motor Company was acquired by the Tata Motors Ltd for estimated price of US$ 1.5 billion

Role of Automobile Industry in India GDP-Sales Trends:

In the year 2006-07 the number of Passenger Car sold were 10,76,408 In the year 2006-07 the number of Passenger Vehicles sold were 13,79,698 In the year 2006-07 the number of Commercial Vehicles sold were 4,67,882 In the year 2006-07 the number of Three Wheelers sold were 4,03,909

In the year 2006-07 the number of Two Wheelers sold were 78,57,548 In the year 2006-07 the number of automobile sold were 1,01,09,037

Segmentation in Automobiles:

The non-demographic segmentation of the automobile market is more complex than that of the watch market. The segments crisscross, forming intricate patterns. Their dynamics must be seen clearly before automobile sales can be understood. Segmentation analysis leads to at least three different ways of classifying the automobile market along non-demographic lines, all of which are important to marketing planning. Value Segmentation: The first mode of segmentation can be compared to that in the watch marketa threefold division along lines which represent how different people look at the meaning of value in an automobile: 1. People who buy cars primarily for economy. Many of these become owners of the Falcon, Ford, Rambler, American, and Chevrolet. They are less loyal to any make than the other segments, but go where the biggest savings are to be found. 2. People who want to buy the best product they can find for their money. These prospects emphasize values such as body quality, reliability, durability, economy of operation, and ease of upkeep. Rambler and Volkswagen have been successful because so many people in this segment were dissatisfied. 3. People interested in "personal enhancement" (a more accurate description than "prestige"). A handsomely styled Pontiac or Thunderbird does a great deal for the owner's ego, even though the car may not serve as a status symbol. Although the value of an automobile as a status symbol has declined, the personal satisfaction in owning a fine car has not lessened for this segment of the market. It is interesting that while both watches and cars have declined in status value, they have retained self-enhancement value for

large portions of the market. Markets can change so swiftly, and the size of key segments can shift so rapidly, that great sensitivity is required to catch a trend in time to capitalize on it. In the automobile market, the biggest change in recent years has been the growth in (heterogeneity across segments), it is homogeneous within the segment (exhibits common attributes); it responds similarly to a market stimulus, and it can be reached by a market intervention. Market segmentation is the process of classifying a market into distinct subsets (segments) that behave in similar ways or have similar needs. The segmentation process in itself consists of segment identification, segment characterization, segment evaluation and target segment selection. If each segment is fairly homogeneous in its needs and attitudes, it is likely to respond similarly to a given marketing strategy. That is, they are likely to have similar feelings and ideas about a marketing mix comprising a given product or service, sold at a given price, and distributed and promoted in a certain way. Broadly, markets can be divided according to a number of general criteria, such as by industry or public versus private sector. Generally segmentation is conducted using demographic, geographic, attitudinal or behavioral data. Small segments are often termed niche markets or specialty markets. However, all segments fall into either consumer or industrial markets. Although industrial market segmentation is quite different from consumer market segmentation, both have similar objectives. The process of segmentation is distinct from targeting (choosing which segments to address) and positioning (designing an appropriate marketing mix for each segment). The overall intent is to identify groups of similar customers and potential customers; to prioritize the groups to address; to

understand their behaviour; and to respond with appropriate marketing strategies that satisfy the different preferences of each chosen segment. Revenues are thus improved. Improved segmentation can lead to significantly improved marketing effectiveness. Distinct segments can have different industry structures and thus have higher or lower attractiveness (Porter). With the right segmentation, the right lists can be purchased, advertising results can be improved and customer satisfaction can be increased.

CASE STUDY: HYUNDAI MOTORS INDIA LTD.

On January 10, 2008, Hyundai Motor India Ltd's (HMIL) i10 was awarded the 'Car of the Year Award 2008' in the seventh edition of the CNBC-TV18 Autocar Auto Awards. The i10 was described as a great success with the company claiming that 25,000 units had been sold since the time it was launched in 2007. Hyundai posted a growth of 39 percent in sales in the Indian market due to good sales of the i10 in 2007. The growth witnessed at HMIL was in the face of a drop in the sales of its rival Maruti Suzuki India Ltd.'s, entry level car M800 from 7,021 to 5,470 units (22 percent drop). HMIL is India's largest exporter of passenger cars and had shipped more than 125,000 cars in 2007 and accounted for about two thirds of India's annual exports. In July 2008, Hyundai emerged as the second largest passenger vehicle manufacturer in India with a market share of 16.91%. HMIL was incorporated in India in the year 1996 and its first car, the Santro, was launched in the year 1998. At the time of the Santro's launch, Hyundai was an unknown brand in India and Korean products were associated with

inferior quality in the minds of the Indian consumers. After an in depth study of the Indian market and the Indian consumer's psyche, HMIL signed up Shahrukh Khan, an Indian cinema star, as its brand ambassador to promote the Santro. According to analysts, HMIL also reduced the engine output of Santro to provide better fuel efficiency, priced its spares reasonably, and modified the product specifications to suit Indian conditions. The car went on to become a great success and provided HMIL with a firm foothold in the Indian automobile industry. Analysts felt that it was HMIL's strategy of providing state of the art technology cars coupled with aggressive pricing which ensured its success. The Santro was followed by a range of cars such as the Accent, the Elantra, the Getz, the Sonata, the Verna, the Terracan, and the Tucson, each positioned in a different customer segment and at a different price point. The range of cars introduced by HMIL enabled it to ensure its presence in almost all the segments of the market and to capture market share. According to analysts, Hyundai Motor Company's strategy with reference to India as of 2008 was to convert its Indian operations into a key design, manufacturing, and export hub for its global operations while expanding its presence in India. This strategy was expected to enable the company to capture a large share of the global car market. In February 2008, HMIL opened a second manufacturing plant near Chennai. The new plant increased the company's production capacity to 600,000 cars a year.6 The opening of the plant made Hyundai Motor Company's Indian production base the biggest outside South Korea. The company aimed to make its Indian operations the global manufacturing hub for all of its small car models.