Professional Documents
Culture Documents
A Consumer Decision Making in Automobile Industry: Report On
A Consumer Decision Making in Automobile Industry: Report On
A CONSUMER DECISION
MAKING IN
AUTOMOBILE INDUSTRY
By:
Nitesh Singh Pundir
12BSP0799
Section- A
Page 1 of 16
Table of Contents
Topic Page
Abstract 3
Introduction 4
Literature Review 7
Methodology 8
Data Analysis 9
Conclusion 13
Appendix 14
Bibliography 16
ABSTRACT:
The growing middle class population of India and the paucity of reliable public transport
system is leading to a large number of vehicles added to the roads every day.
Demand in Automobile, FMCG and retail is growing at a faster pace than anticipated due to
rise in its consumption patterns which is creating demand and margins for Indian Inc.
India is the second largest producer of two-wheelers in the world. In the last few years, the
Indian two-wheeler industry has seen spectacular growth. The country stands next to China
and Japan in terms of production and sales respectively.
The present scenario of especially decision making process of purchasing vehicles, and its
importance, current trends are highlighted. In this article study for the demand of vehicles and
influencing factors like family, friends, dealers, service and mileage for the process of
purchasing vehicles is done.
INTRODUCTION
Automobile Industry:
Automobile industry is one of the fastest growing industries of the world. With more than 2
million new automobiles rolling out each year, on roads of India, the industry is set to grow
further. Automobile industry made its silent entry in India in the nineteenth century. Since the
launch of the first car in 1897, India automobile industry has come a long way. Today India is
the largest three wheeler market in the world and is expected to take over China as the second
largest automobile Industry in the coming year.
Indian automobile industry; manufacturing cars, buses, three wheelers, two wheelers,
commercial vehicles, heavy vehicles, provides employment to a large number of workforce.
The abolition of license raj in 1991opened the doors for international automobile
manufacturers. A number of leading global automotive companies entered into joint ventures
with domestic manufacturers of India and thus started the large-scale production of
automobiles in India. Some of the well-known players of Indian automobile industry include:
Hindustan Motors, Maruti Udyog, Fiat India Private Ltd, Ford India Ltd., General Motors
India Pvt. Ltd, Toyota Kirloskar Motor Ltd among others. The production of automobiles in
India is mainly for the domestic customers. Cars with 79% of automobiles in India, dominate
the automobile industry in India. The Indian Automobile Industry is manufacturing over 11
million vehicles and exporting about 1.5 million every year. The dominant products of the
industry are two wheelers with a market share of over 75% and passenger cars with a market
share of about 16%. Commercial vehicles and three wheelers share about 9% of the market
between them. About 91% of the vehicles sold are used by households and only about 9% for
commercial purposes. The industry has attained a turnover of more than USD 35 billion and
provides direct and indirect employment to over 13 million people.
“Consumer behaviour describes how consumers make purchase decisions and how they use
and dispose of the purchase goods or services” therefore we can understand the importance of
consumer behaviour for a marketer and as a vital process during the decision purchase
process. A marketer needs to identify who their consumers are in order to be capable of
selling their products, generate revenue and profitability but also to be able to satisfy them for
future purposes such as market share through recognition, and only once identifying their
consumer‟s behaviour can success be achieved.
Information Search: When a consumer discovers a problem, he/she is likely to search for
more information . We actively seek information by visiting stores, talking to friends, or
reading magazines, among others. Through gathering information, the consumer learns more
about some brands that compete in the market and their features and characteristics.
Evaluation and Selection of Alternatives: How does the consumer process competitive
brand information and evaluate the value of the brands? Under this, 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.
Post-purchase Evaluation: “Did I make the right choice? Should I have gone with other
brand?” This is a common reaction after making a difficult, complex, relatively
permanent decision. This type of doubt and anxiety is referred to as post-purchase
Evaluation.
J.D. Singh (1981) conducted a survey on „A study of brand loyalty in India‟. The primary
objective of this study was to examine the state of art regarding brand loyalty among
consumers in India.
Nishar Ahamed N. (1997) examined the factors determining purchase and post-purchase
behaviour of two wheeler users. His findings revealed that friends and neighbours' form the
most important source which is followed by one‟s own experience, family members, news
papers and observation.
Arjun Chowdhri (2006) has remarked that brand commitment is an important determinant in
buying behaviour for consumers.
Rachel Dardis and HoracioSoberon-Ferrer (1994) have investigated the rapport between
automobile attributes and household characteristics to consumer preferences for cars. The
analysis was confined to households that purchased new cars in 1986 and employed two-
stage probit analysis. Results indicated that the coefficients of five automobile quality
attributes were statistically significant while the coefficients of most household
characteristics were not significant. Households were interested in more fuel efficient and
heavier cars as well as cars with lower depreciation rates and a lower frequency of repair
are more likely to buy Japanese than non-Japanese cars.
Gary A. Knight (1984) has compared the consumer preferences on automobile made abroad
and made in the home country by both home country and foreign firms. Indeed he has
suggested that the country of manufacture and product quality strongly influence consumer
decision making in globally available product categories.
METHODOLOGY:
Data Collection
Primary Data: Survey method was used to collect the primary data from the respondents. A
structured questionnaire was prepared to extract responses from the respondents. The study
was conducted on a sample of 96 consumers.
Secondary Data: Secondary data was collected from books, articles, Internet and previous
research papers that had been conducted by the company representatives and officials.
Respondent Profile
Age group: 45% below the age of 30 years.
Education: 50% of the respondents were educated up to SSC
Occupation: Agriculture (4%), private service (70%), small businessmen (24),
others (2%).
Income Profile: 80% of the respondents had annual Income of less than Rs.1, 50,000
Source of Finance: 59% of the respondents purchased the two-Wheeler on cash
Payments and remaining opted for loans.
1) The study was conducted in 7 days that is not enough for such a vast topic.
3) There is a big number of automobile companies carry out the research more efficiently.
4) As the nature of research was exploratory so it was difficult to cover each and every
buyer.
5) Many buyers don’t express their original perception and views because of biasness.
DATA ANALYSIS:
In this study, a number of statistical techniques like simple percentage and chi-square
test have been used in order to study the objectives.
1. Sources of Information.
The above Table1 shows that Majority of the respondents are influenced by their
Friends/relatives (57.29%) and the major source of information followed by previous
experience (32.30%).
.
Hypotheses:
(H0): There is no Significance relationship between sources of information and the
influence on purchase decision of vehicles.
(H1): There is Significance relationship between sources of information and the
influence on purchase decision of vehicles.
X2 Cal= 50.583
Degree of freedom = (r-1) = (4-1) =3
X2 Table for 3df at 5% level of significance = 7.815
X2 Cal= 50.583 X2 Calculated Value >X2 Table Value
Hence, there is Significance relationship between sources of information and the
influence on purchase decision of vehicles.
2. Influencing Role on the Brand selection.
Total 96 100
Total 96 100
Marketers must fully understand both the theory and reality of consumer behaviour. A
consumer‟s buying behavior is influenced by cultural, social, and personal factors. At
the time of purchase of product friends are most influenced factor. In this above
Table 3 it is observed that 44.80% of the respondents were accompanied by friends /
relatives at the time of Purchase, while 30.20% respondents were went alone, and
21.87% of the respondents were accompanied by family members.
Hypotheses:
(H0): There is no Significance relationship between sources of Person accompanying
at the time of purchasing vehicles.
(H1): There is Significance relationship between sources of Person accompanying at
the time of purchasing vehicles.
X2 Cal= 34.844
Degree of freedom = (r-1) = (4-1) =3
X2 Table for 3df at 5% level of significance = 7.815
X2 Cal= 34.844 X2 Calculated Value >X2 Table Value
Hence, there is Significance relationship between sources of Person accompanying at
the time of purchasing vehicles.
4. Factors Influencing the Purchase Decision.
Total 96 100
A number of factors come to the fore when purchasing a two-wheeler. These include
price, design, mileage, quality, service availability, etc…. In this above Table 4
reveals that 36.46% of respondents were preferred to mileage, 26.04% of respondents
preferred to quality, 17.70% of respondents were preferred to design,10.42% for
price, 6.25% offers/gifts and only 3.13% of respondents service.
Hypotheses:
(H0): There is no Significance relationship between sources of preferences factors
influencing at the time of purchasing vehicles.
(H1): There is Significance relationship between sources of preferences factors
influencing at the time of purchasing vehicles.
X2 Cal= 45.501
Degree of freedom = (r-1) = (6-1) =5
X2 Table for 3df at 5% level of significance = 11.070
X2 Cal= 45.501 X2 Calculated Value >X2 Table Value
Hence, there is Significance relationship between sources of preferences factors
influencing at the time of purchasing vehicles.
FINDINGS & SUGGESTIONS:
CONCLUSION:
Currently; there is high demand for the automobiles across all the segments. With the
growing economy, people are left with more disposable income to be spent on meeting their
mobility needs on automobiles. Banks and other financial institutions have an assortment of
vehicle loan schemes with attractive rates of interest and convenient number of instalments; it
will give additional support to the automobile sector, to boost sales across various segments.
Appendix
Consumer Survey:
NAME:-
AGE:-
PHONE NO.:-
Friends\Relatives
Family Members
Media
Showrooms
Previous Experience
www.mouthshut.com
www.studygalaxy.com
www.decisionanalyst.com
www.studymode.com