Final Project Report On

A study of Consumer perception of foreign and Indian automobiles in India.

Submitted to Punjab Technical University in partial fulfillment of the requirements for the degree of

MASTER OF BUSINESS ADMINISTRATION

(Specialization: Marketing)
By

Amninder Singh Mahal

Roll no. - 7065222363

2007-09
Gian Jyoti Technology Institute of Management and

MOHALI

CERTIFICATE

This is to certify that Amninder Singh Mahal of MBA (IVth Semester), student of Gian Jyoti Institute of Management and Technology, Mohali has successfully completed his project titled A study of consumer perception of foreign and Indian automobiles in India under my supervision. This project is an original piece of work and has not been copied from any other source. It further certifies that this project has not been submitted to any other Company/ University for any other purpose.

Dated: Kaur

Mrs.

Paramjeet

(Project Guide)

ACKNOWLEDGEMENT

This humble endeavor bears the imprint of many persons who were in one way or the other helpful in the completion of my final research project. I would like to take this opportunity to present my vote of thanks to my guide who acted as lighting pillars to enlighten my way through out this project. This project would not have been possible without the kind assistance and guidance of many people who indeed were helpful, cooperative and kind during the entire course of my project.

The acknowledgment would not be complete without expressing my indebtedness to my Honble Chairman Sh. J.S Bedi and I express my sincere thanks to Mrs. Paramjeet Kaur who guided me in this project and was the constant source of reference for me and showed full interest at each and every step of my project.

Amninder Singh Mahal

TABLE OF CONTENTS

CHAPTER NO. PARTICULARS PAGE NO.

1. INTRODUCTION 1-46

2.

REVIEW OF LITERATURE

47-49

3.

RESEARCH METHODOLOGY

50-52

4.

ANALYSIS

53- 62

5.

CONCLUSION & RECOMMENDATIONS

63 -65

BIBLIOGRAPHY

66

ANNEXURE

67 -68

Chapter 1 INTRODUCTION
Economic growth over the past decade has transferred India into an important commercial centre with a vibrant lucrative consumer market. In recent years, India has become an attractive competitive and fast growing market for companies around the world. The liberalization policy followed by India after 1991 economic reforms has given rise to the same condition for local and foreign businesses. These developments have significantly enhanced and affected Indias relationship with the international business community. With a young and rapidly growing large population base over 40% larger than total population of many countries, India possesses a small, very wealthy, western- oriented upper class and a sizable and growing middle-class of salaried workers and small business owners who are becoming major consumers of products. Therefore this market has attracted significant attention from multinational companies North America, Europe and Asia. To tap this potential market, global marketers will require a comprehensive understanding of Indian consumers. As per capita income continues to grow, both disposable and domestic consumption levels will fuel demand for more imports. After the smokes of cold war between Western world and China, Indian Market is the lenient policies followed by his democratic country as against restricted policies of communist country like China. The country of origin (COO) concept has come up with age. With the spread of globalization, the need of has come with age. With the spread of globalization, in the need of studying the impact

of country of origin of product on its sales has increased tremendously. The same type of product of different countries finds different rating by different people. In this project, an effort has been made to find the (COO) impact on buying behavior of people. Here the respondents are students of various colleges (PUNJABI UNIVERSITY, PATIALA) as more and more countries are moving to other countries, it has become extremely important for the manufacturing companies and the marketers to find how the inhabitants of that particular country, perceive their product. I this way they may be able to forecast the sales of their product to greater extant. Many studies have already been undertaken on this concept but this particular study aims to find out the forth-coming trend of car through the youth, because ultimately they will be the future buyers. This project will not show interest of educated students as in the near future they will represent the major chunk of car owners. This future car owners have different conceptions, expectations for different countries i.e. India, Japan, Untied States that is surely going to effect their sales in future. Emerging markets in Asia and Latin America led advancers. Venezuela, Russia and India led with a gain of 44%, 26% and 20% respectively. Firm prices in commodities such as oil, iron ore and metals supported the advances in Brazil, Mexico and Venezuela as well. Rising corporate profits and consumers spending supported index in India. Taiwan and South Korea delivered negative returns for the quarter. Chief Economist at CLSA Jim Walker believes that going ahead 2007 is likely to be tough year for global liquidity. However, he adds that Indias economic growth could move to 910%, and that Indias current account deficit is not a worry for now.

Following India's growing openness, the arrival of new and existing models, easy availability of finance at relatively low rate of interest and price discounts offered by the dealers and manufacturers all have stirred the demand for vehicles and a strong growth of the Indian automobile industry. The data obtained from ministry of commerce and industry, shows high growth obtained since 2003- 04 in automobile production continuing in the first three quarters of the 2006-07. Annual growth was 16.0 per cent in April-December, 2006; the growth rate in 2004-05 was 15.1 per cent. The automobile industry grew at a compound annual growth rate (CAGR) of 22 per cent between 1992 and 1997. With investment exceeding Rs. 50,000 crore, the turnover of the automobile industry exceeded Rs. 59,518 crore in 2005-06. Including turnover of the auto-component sector, the automotive industry's turnover, which was above Rs. 84,000 crore in 2005-06, is estimated to have exceeded Rs.1,00,000 crore (USD 22. 74 billion) in 2005-06.

Rush of mid sized cars:

As part of its efforts to redefine the mid sized car segment, General Motors India has rolled out Chevrolet Aveo, the first of three new models of this class planned in the first six months of 2006. This new sedan to be built at the GMs manufacturing facility at Halol, Gujarat is designed with attractive styling incorporating modern technology for extended comfort of the passengers. Having notched up 17-18 percent growth last year, GM India would raise the bar of performance and exceed the exceptions of customers

with a series of launches, besides increasing the point of sales to emerge as a big volume player in the market, said P Balendran, vice president, Corporate Affairs, GM India. Addressing a press conference on the eve of Aveo launch yesterday, he said India ranked as privileged market as only few months after this car was introduced in Shanghai it was now made available for Indian customers. Available in 1.4 litre and 1.6 litre engines, the Chevrolet Aveo was a global product that incorporated latest technology to meet he highest standards of quality, he said, It has been re-engineered based on extensive testing across the country to meet the specific needs of our customers as well as local driving conditions and regulations. A crisp and modern exterior, wide stance, long wheelbase, powerassisted steering and a performance enhanced by the companys Variable Geometry Induction System (VGIS), which maximized power and fuel efficiency of the car, have been the notable features of Aveo. Aveo is a key driver of the global expansion of Chevrolet. Following its introduction, it is being rolled out in more than 140 countries around the world, including several European markets and the US, said Balendran. Chervolet Aveo has the concept of a small car, with big design and its enlarged wheelbase and body height increased the space of its interior. The company would expand dealership network form the present 77 to 110 sales points by the end of this year, and two spare parts distribution centres would be set up in Maharashtra and Delhi to supplement existing two such units in Gujrat and

Tamilnadu. We also continue with extensive localization of our product in order to reduce the price key of components. In the last calendar year, GM India sold 30,000 units across brands and this year the company has targeted to sell 50,000 units? Tavera 20,000, Optra 10,000, Aveo 20,000. We will also raising our capacity at Halol Plant form the present 65,000 units per annum to 85,000 units by the end of 2006 that would need an investment of around Rs.100 crore. The cumulative investments in GM India till now stood at Rs. 1,380 crore. Expressing optimism over the growth of entry-level sedan in the Indian market, this segment posted 17 percent growth with sales of 161,000 units and was poised to record 24 percent growth this year with sales expected at around 2 lakh units. Out of this growth, we have targeted to net a market share of 10 percent. In the first two months of this calendar, the entry-level sedan had been seen 25 per cent growth, as against overall industry growth of 6 per cent only. As the first of three new model of Chevrolet, Aveo is the forerunner to other two cars, namely Aveo U-VA and Optra SRV, which would be rolled out in the next few months. Having four variants in 1.4 lire and 1.6 litre engine options, the ex-showroom (Chennai) price ranges from Rs.5.67 Lakh to Rs.6.98 Lakh.

Players Proliferate:
The most visible aspect is the number of new manufacturers and the spread of new products available in each sub-segment. Importantly, apart from the once ubiquitous Ambassador from Hindustan Motors, we now have top-selling models and home-

grown brands such as the Tata Indica and Mahindra Scorpio. The stellar performance of these products has also, in equal measure, contributed to the expansion of the market. These `desi' companies are now attempting to leave their footprints in markets abroad. From sales of less than a lakh vehicles about a decade ago to estimate sales of 7.2 lakh cars and utility vehicles this fiscal, the industry has made a long haul. And these numbers have not just come from small cars, but from the whole range of cars in the midsize, premium mid-size and super-luxury car segments. It is a reflection of the attractiveness of the Indian car industry that in addition to the presence of some of the biggest names in small car technology such as Suzuki, Hyundai and Fiat, many of the highprofile luxury brands such as Mercedes Benz, Bentley, BMW and now Maybach and Audi are steering into India.

Diversity and Choice:

The renaissance, so to say, in the automobile industry happened with the throwing open of the sector to overseas manufacturers through the wholly owned subsidiary route. The credit for expanding the car industry and discovering the market for small cars must go to Maruti Udyog (MUL), which launched its Maruti 800 almost 20 years ago. With the entry of multinational car manufacturers, particularly in the premium small car and mid-size sub-segments, the industry has acquired greater diversity and choice. It also enabled the building up of a strong manufacturing base, which companies are now able to leverage for developing new products.

Small Car to Dominate:

Interestingly, the still ubiquitous Maruti 800, the small car that revolutionised personal four-wheeled transportation in India,

continues to be MUL's best seller. And yet, it is being debated if it will be able to face the future. The segment will see more entrants and a lot more technological inputs in future. As a result, the small car segment will also continue to witness an expansion in terms of price spreads and in terms of varied trim-level positioning.

Expansion in Mid-Size Cars:

There is the possibility of a similar market expansion in the mid-size car segment. Near rock bottom interest rates for car financing and competitive market forces have ensured that the affordability factor for mid-size cars has dramatically increased. For the first time, since the opening up of the car industry, sales of mid-size passenger cars have crossed the one lakh mark this fiscal and are set to close the year at an all time high.

Contemporary Features:
The combined attractiveness of the small car and mid-size

segments of the Indian car industry and the integration of Indian emission standards with globally accepted emission norms are also leading to the infusion of new technologies. The initial spate of cars, especially in the small car segment, made radial tyres, airconditioning, power steering and side-impact protection standard features today. The car industry is foreseeing the possibility of emission and safety related features such as anti-lock braking systems, common rail injection, airbags and tiptronic transmission becoming standard fitment in most mid-size cars, and even some premium small cars, of the future. The new, highly aware Indian car buyer is also likely to drive demand for new technologies.

Strength in Parts:
The entry of new technology and the increased focus on costs during the last few years amongst the existing manufacturers, who have developed a strong vendor base in India, has ensured that the component manufacturers have also had to retool their production capacities to match global quality standards. A number of multinational component manufacturers such as Delphi, Visteon and Johnson Controls did set up base in India, but the need for global quality standards amongst the local vendors (then Tier II and Tier III suppliers) has enabled a number of Indian companies to become Tier I suppliers. Some of them such as Bharat Forge and Sundram Fasteners are also aspiring to become global players through acquisitions abroad.

Beneficial Fragmentation:
With the entry of new manufacturers, the market is likely to become even more fragmented. The car industry is, however, likely to benefit from this in the form of greater depth, diversity and increased market discovery. After all, not many of us knew that there was such a large latent demand for small cars, until manufacturers such as Hyundai, Fiat and Daewoo came to India in the late 1990s. And, as car sales near the magical one million mark, for all those wondering where the roads are to accommodate the explosion in car sales, you may take solace in the fact that the US too faced a similar scenario, a few decades ago

As part of its efforts to redefine the mid sized car segment, General Motors India has rolled out Chevrolet Aveo, the first of

three new models of this class planned in the first six months of 2006. This new sedan to be built at the GMs manufacturing facility at Halol, Gujarat is designed with attractive styling incorporating modern technology for extended comfort of the passengers. Having notched up 17-18 percent growth last year, GM India would raise the bar of performance and exceed the exceptions of customers with a series of launches, besides increasing the point of sales to emerge as a big volume player in the market, said P Balendran, vice president, Corporate Affairs, GM India. Addressing a press conference on the eve of Aveo launch yesterday, he said India ranked as privileged market as only few months after this car was introduced in Shanghai it was now made available for Indian customers. Available in 1.4 litre and 1.6 litre engines, the Chevrolet Aveo was a global product that incorporated latest technology to meet he highest standards of quality, he said, It has been re-engineered based on extensive testing across the country to meet the specific needs of our customers as well as local driving conditions and regulations. A crisp and modern exterior, wide stance, long wheelbase, powerassisted steering and a performance enhanced by the companys Variable Geometry Induction System (VGIS), which maximized power and fuel efficiency of the car, have been the notable features of Aveo. Aveo is a key driver of the global expansion of Chevrolet. Following its introduction, it is being rolled out in more than 140 countries around the world, including several European markets and the US, said Balendran.

Chervolet Aveo has the concept of a small car, with big design and its enlarged wheelbase and body height increased the space of its interior. The company would expand dealership network form the present 77 to 110 sales points by the end of this year, and two spare parts distribution centres would be set up in Maharashtra and Delhi to supplement existing two such units in Gujrat and Tamilnadu. We also continue with extensive localization of our product in order to reduce the price key of components. In the last calendar year, GM India sold 30,000 units across brands and this year the company has targeted to sell 50,000 units? Tavera 20,000, Optra 10,000, Aveo 20,000. We will also raising our capacity at Halol Plant form the present 65,000 units per annum to 85,000 units by the end of 2006 that would need an investment of around Rs.100 crore. The cumulative investments in GM India till now stood at Rs. 1,380 crore. Expressing optimism over the growth of entry-level sedan in the Indian market, this segment posted 17 percent growth with sales of 161,000 units and was poised to record 24 percent growth this year with sales expected at around 2 lakh units. Out of this growth, we have targeted to net a market share of 10 percent. In the first two months of this calendar, the entry-level sedan had been seen 25 per cent growth, as against overall industry growth of 6 per cent only. As the first of three new model of Chevrolet, Aveo is the forerunner to other two cars, namely Aveo U-VA and Optra SRV which would be rolled out in the next few months. Having four variants in 1.4 lire and 1.6 litre engine options, the ex-showroom (Chennai) price ranges from Rs.5.67 Lakh to Rs.6.98 Lakh.

Classification of Cars:
Car classification is subjective since many vehicles fall into multiple categories. Not all car types are sold in all countries and names for the same vehicle can differ by region. The following are commonly used classifications

CAR CLASSIFICATION

AMERICAN ENGLISH

BRITISH ENGLISH

SEGMENT EURONCAP

EXAMPLE

Microcar

Microcar, Bubble car

Smart Fortwo

City car

A class

Supermini

Fiat Panda

Subcompact car

Supermini

B class

Hyundai Accent

Compact car

Small family car

C class

Small family car

Ford Focus

Mid-size car

Large family car

D class

Large family car

Volkswagen Passat

Entry-level luxury car

Compact executive car

Audi A4

Full-size car

Executive car

E class

Executive car

Chrysler 300

Mid-size luxury car

BMW Series

Full-size luxury car

Luxury car

F class

MercedesBenz S-Class

Sports car

Sports car

Porsche 911

Grand tourer

Grand tourer

Jaguar XK

Supercar

Supercar

Ferrari F50

Convertible

Cabriolet

BMW Series

Roadster

Roadster

Roadster

BMW Z4

Leisure activity vehicle

B class

Small MPV

Peugeot Partner

Mini MPV

B class

Opel Meriva

Compact minivan

Compact MPV

C class

Mazda5

Minivan

Large MPV

D class

MPV

Toyota Previa

Mini SUV

Mini 4x4

B class

Small Roader

Off- Suzuki SX4

Compact SUV

Compact 4x4

C/D class

Honda CR-V

Mid-size crossover SUV

Large 4x4

E class

Large Roader

Off- BMW X5

Mid-size SUV

Off-roader

E class

Jeep

Grand

Cherokee

Full-size SUV

Cadillac Escalade

About SUV:
A sport utility vehicle, or SUV is a passenger vehicle which combines the towing capacity of a pickup truck with the passengercarrying space of a minivan or station wagon. Most SUVs are designed with a roughly square cross-section, an engine compartment, a combined passenger and cargo compartment, and no dedicated trunk. Most mid-size and full-size SUVs have three rows of seats with a cargo area directly behind the last row of seats. Compact SUVs and mini SUVs, such as the Toyota RAV4 and Suzuki Vitara, may have five or fewer seats.

It is known in some countries as an off-road vehicle or fourwheel drive, often abbreviated to 4WD or 4x4, and pronounced "four-by-four". However, not all SUVs have four-wheel drive capabilities (see Mazda Tribute, for example). Conversely, not all 4WD passenger vehicles are SUVs (see, for example, Subaru Impreza). More recently, manufacturers have responded to buyer's complaints that SUVs "drive like trucks" and demands for "carlike ride" with a new type of SUV. A new category, the crossover SUV uses car design and components for lighter weight and better fuel efficiency, but is no longer designed or recommended by the manufacturer for off-road usage or towing.

Common Features Include:

High ride height and seating position Utilitarian/High drag body configuration High capacity engine Long-travel suspension (for off road/rough road use) High load and tow capacity Large interior cabin space 5-7 Seats 4WD, or the ability to be equipped with 4WD

Due to consumer trends, several companies now also produce crossover SUV models, based on a unibody architecture e.g. Toyota RAV4. Typically, these models are lighter and more fuel efficient than traditional SUVs. Crossover models sacrifice off road features and load capacity for a performance/ride experience more closely

matching that of a large model family car, while maintaining much of the appearance of a traditional SUV, these crossovers are not SUVs in the literal sense.

The Innovator's Prescription: The Relevance of Brand Relevance: New Product Categories can Subvert Incumbent Brands or Give Them a New Lease on Life.
Business revolutions once had a bit of continuity Revolution to them. for The Industrial the lasted decades,

postindustrial revolution had a solid 20year run, and even the dot-com revolution persevered for a good five years. But business and consumer marketers in 2004 dont seem to have even that much luxury. From beverages and snack foods to Illustration
Dan Page,

computers and consulting, the marketplace 2004 for nearly every product or service today is undergoing continuous change. Consumers and corporate buyers, more mobile and better informed than ever before, are increasingly able to get precisely what they want when they want it, at the price theyre willing to pay. To meet these exacting desires, new and different products and services appear unceasingly. Entirely new categories and subcategories come into existence almost overnight, as existing ones change or fade. To succeed in this fast-moving environment, management must pay attention to a new and, for most, unfamiliar attribute of the companys products, services, and brands: their relevance.

Relevance

is

fundamentally

different

from

the

characteristics

conventionally associated with a brands potency. All too often, a brand seems strong because tracking studies show that it retains a high level of trust, esteem, perceived quality, and maybe even perceived innovativeness. Customers remain satisfied and loyal. However, its market share may be slipping perhaps significantly and fewer customers, particularly new customers, are considering it. Conventional marketing theory and practice have difficulty explaining this paradox. Experience and research are now showing that a brand in decline often is in trouble not because of an intrinsic problem, but because the product category or subcategory with which it is associated is fading undermined, augmented, replaced, or subsumed by a new, faster-growing category. Older brands may actually be inappropriate for the new category. Brand management in the past focused on achieving preference on the basis of differentiation, benefits, and customer satisfaction within a set of brands under consideration for a given application. But in todays environment, unless a brand can maintain its relevance as categories emerge, change, and fade, narrow application preference may not be sufficient. AOL faces a relevance challenge with seasoned Internet users in the broadband category because of its legacy as a friendly interface for new users in the dialup category. Hardware, paint, and flooring stores have struggled to remain relevant as The Home Depot and Lowes, with their broad selection of products and services, have subsumed existing categories and, in effect, created a new kind of brand. The relevance problem is apparent in categories as soft as fashion and as hard as manufacturing. Imagine you were an automaker 15 years ago with a leading brand in the minivan category. As the

category of sport utility vehicles (SUVs) emerged, it attracted a segment of buyers who previously might have considered buying a minivan. These potential SUV buyers still respected your minivan and believed it offered the best quality and value on the market; they may even have loved it and recommended it to friends interested in a minivan. But because this segments changing needs prompted its interest in an SUV, your brand, so identified with minivans, was irrelevant to it. This may have been true even if your company also made SUVs or had an SUV sub-brand, because customers interested in the new category will not consider brands that have not developed interest and credibility within that category. The challenge of brand relevance is akin to the challenge of innovation articulated by Clayton M. Christensen in The Innovators Dilemma: When New Technologies Cause Great Firms to fail (Harvard Business School Press, 1997). Professor Christensen showed how industry leaders often are caught unawares by disruptive innovations precisely because they focus too closely on their most profitable customers and businesses, ignoring niche offerings for low-value subordinate segments that have the ability to grow in strength and value. Brand managers, likewise, are often blindsided by changing product categories precisely because they focus too closely on the traditional attributes of brands within their old categories. Their ultimate tragedy is to achieve brilliance in creating preference and differentiation, only to have that effort wasted because of a relevance problem. Brand relevance is an oft-used phrase, but it generally has not been well defined or explained. Fortunately, there is a simple model that executives can use to assess their brands relevance, and to evaluate emerging product categories and subcategories. After

presenting this model, this article will examine seven important product class dynamics that drive brand relevance. Finally, it will offer a framework by which companies can develop strategies for adapting their brands to changing trends in the marketplace. Companies have three options: to be trend neglecters, trend drivers, or trend responders. Neglecting trends is a risky road that often leads to oblivion; trend driving, with its huge upside, is certainly attractive, but rarely a real option. Most firms need to learn to be good trend responders, and build the organizational skills to detect, evaluate, and react to change, and to develop a well-conceived brand portfolio strategy.

Defining Relevance:
Relevance for a brand occurs when three conditions are met:

A product or service category or subcategory defined by some combination of attributes, applications, user groups, or other distinguishing characteristics exists or emerges. There is a perceived need or desire on the part of a customer segment for the category or subcategory. The brand is in the set that segment considers to be material to the product category or subcategory.

To better understand relevance and the concept of product categories and subcategories, consider a simple model of customer brand interaction. (See Exhibit 1.) Customer choice takes place in five stages. First, the customer is motivated by a problem, need, or opportunity in this example, the need for personal transportation. Second, the customer selects a product category or subcategory perceived to be relevant to the problem or opportunity; he or she may decide to buy a luxury sports sedan rather than a compact or an SUV. Third, the customer determines which brands to consider

in this case, the choice might include Audi, BMW, Lexus, and Cadillac. In the fourth stage, perhaps after some evaluation, the consumer selects one brand from the consideration set. Finally, the product is acquired, and the process culminates in a usage experience that may influence the next cycle.

Brand relevance involves stages two and three of the framework whether the product category or subcategory is deemed to meet the customers need, and whether a brand is associated with the particular product category or subcategory. A brands relevance depends on both. Although preference based on a differentiated offering and a positive use experience can help to enhance a brands relevance, if the need or category association is missing, the brand lacks relevance, and no differentiation, attitude, or relationship will help.

A distinction should be made between categories associated with a brand and brands associated with a category. Knowing which categories are associated with the brand is actually not very important. The key is determining which brands are associated with the product category or subcategory. Those are the brands that pass the relevance test. To be relevant, a brand should at least be recalled without aid. Simple recognition when a customer identifies from a provided list brands associated with a particular product category or subcategory is generally too weak a measure. (In fact, brands with high recognition and low recall are often termed graveyard brands.) However prominent a brand might be, though, visibility is not enough to keep it relevant. Thanks to the rapid pace of global technology transfer, capital flows, and communications streams, product categories and subcategories can come into existence and disappear represent with startling speed. Because new or categories can strategically important threats opportunities,

marketers have to be very attentive to the forces that drive their emergence. There are seven such dynamics.

A new product or service dimension expands the boundaries of an existing category:

By personalizing and improving service, the Saturn and Lexus automotive brands changed the way customers interacted with car dealers, creating a new product subcategory that made other brands less relevant to a segment of consumers. In both cases, GM (Saturns owner) and Toyota (creator of Lexus) felt that new brand names were needed to support the novel dealer experience that in part defined the subcategory. In the yogurt business, the eat-on-the-go trend led Yoplait to develop Go-Gurt,

delivered

in

colorful

nine-inch

tube

designed

to

enhance

portability and to appeal to kids. Go-Gurt helped Yoplait forge ahead of Danones Dannon, a brand it had trailed for decades. A new subcategory had been created in which Dannon was not relevant.

A new product or set of products carves out a fresh niche in an existing category:
The energy-bar market created by PowerBar ultimately fragmented into a variety of subcategories, including those directed at specific segments (e.g., Luna bars for women) and some possessing specific attributes (such as the protein-associated Balance and the caloriecontrol bar Pria). Each represented a subcategory for which the original PowerBar was not relevant. New subcategories can also be defined by new and distinct applications. Bayer Aspirin, for example, recognized a new application heart-attack prevention and created a subcategory with its Aspirin Regimen Bayer Adult Low Strength 81mg, which has an enteric safety coating to prevent stomach upset.

A new competitor devises a way to bundle existing categories into a super category.
In the late 1990s, including Siebel created Internet-based programs, customer customer

relationship management software by pulling together a host of applications, customer loyalty acquisition, call centers, customer service, customer contact, and sales force automation. In doing so, Siebel rendered irrelevant, for some customers, the more specialized programs of competitors.

A new competitor repositions existing products or services to create an original category:

Starbucks reshaped the coffee retail experience by positioning its outlets as the third place (after home and office) to define a persons day. The use experience involved aroma, a break from routine, an affordable luxury, social interaction, and some selfexpressive benefit from the appreciation of great coffee. In the U.K., Ford positioned its Galaxy minivan in relation to first-class air travel comfortable enough to be suitable for busy executives. By highlighting attributes far different from those that would appeal to a buyer looking for a family vehicle, the automaker created a new minivan subcategory.

Customer needs propel a new product category or subcategory:

Dual trends wellness and the use of herbs and natural supplements have supported a huge new beverage category, healthy refreshment beverages. It now contains a host of subcategories, including enhanced teas, fruit drinks, soy-based drinks, and specialty waters. The pioneer and category leader is SoBe, which started in 1996 with SoBe Black Tea 3G with ginseng, ginkgo, and guarna, and now has an extensive line of teas, juices, and energy drinks.

A new technology leads the development of a product category or subcategory.

Asahi reshaped the Japanese beer market by introducing an innovative brewing process that reduced body and bitterness while increasing alcohol content. Its new product, Asahi Super Dry, had a very different taste from that of other Japanese lagers, and

generated a new category, dry beer. As a result, Kirin, for decades the leading brand, with a dominant 60 percent share of market, suddenly was not relevant for the many customers attracted to the new category. Asahis market share 8 percent when Super Dry was launched in 1986 rose continually until it took share leadership in 1998.

A company exploits changing technologies to invent a new category:

EBAY Inc. created the online auction category by envisioning a service impossible until the advent of the World Wide Web a national (and subsequently global) real-time auction market for myriad types of goods, from used guitars to new houses. Although imitators have cropped up, they have had difficulty positioning themselves as acceptable alternatives because of eBays operational performance, its critical mass of users, and its authenticity as the original category leader. TiVo Inc. created a new category for home television viewing by combining the personal video player, a computer hard drive, and an electronic program guide, changing the way people watch television. Any new entrant has to define itself with respect to TiVo.

The Relevance Challenge:

Becoming a trend responder is within the range of most companies abilities. L.L. Bean has evolved its brand from its original base of hunters, fishermen, and campers to become relevant for hikers, mountain bikers, cross-country skiers, and water-sports enthusiasts. Fuji Film was quick to becoming a leading digitalimaging brand with its Super CCD high-quality sensor for digital cameras. AOL may face challenges adapting its brand to the broadband era, but its even older corporate sibling, Time Warner,

has managed to become a top broad brand with its Road Runner high-speed Internet access service. But trend responsiveness carries its own set of risks. The drive to maintain relevance can prompt a company to chase too many subcategories, both real and imagined, resulting in a diffused, ineffective, and expensive strategy. Response must be guided by serious analyses. Is the opportunity large enough to justify? Is it defensively necessary? Is the trend real, or is it a fad is it MP3, or merely eight-track? Does the firm have the ability to develop the skills needed to compete? Does it have the brand assets needed? Companies need capabilities beyond the detection and evaluation of emerging subcategories. They require creative, powerful new offerings; entering an emerging category without them is more likely to waste resources than to create relevance. A brand strategy may require developing a new brand, an endorsed brand, or a subbrand to carry the flag. If the necessary brand assets are not available, they need to be built or acquired. Finally, staying relevant in dynamic environments can require an organization to become more outward looking, customer focused, flexible, and nimble perhaps the toughest challenge of all.

Small Cars by Toyota:

Chennai, March 29: Toyota-Kirloskar Motor Pvt. Ltd. may enter the small car segment around 2010, a top official of the company has said. Talking to new men after inaugurating Toyotas 55th dealer show room here, ToyokikoIno, Director, Marketing Group, said here last evening that as the companys market share in India was increasing, it planned to increase its dealership network to 60 by the middle of this year.

Cities including Rajkot, Madurai, Amritsar and Bhopal would be added to dealership network shortly. The company maintained 20 per cent share in the country in premium and luxury segment. The response for Innova in the utility vehicle segment was encouraging and it has captured 32 percent market share. The executive car, Toyota Corolla has achieved a market share of 35 percent. Dismissing reports for that the company planned to expand its percent manufacturing facility, he said: We neither plan to expand our facility at Bangalore nor start a new facility elsewhere in the country. He also said the company had no plans to export cars also, though an agent had sold six units in Nepal.

Trends expected in upper class:

Chennai: Daimler Chrysler India feels that the growing number of younger generation buyers of its cars, especially the C Class, will help it maintain its growth this year too. The company believes that sales in the southern region not just in Banglore, Chennai and Hyderabad, but also in the secondary cities- will grow faster given the dynamism in the regions economy.

Luxury Car Segment:

Unveiling the new S-Class and the new M-class vehicles at a Mercedes-Benz Brand Showcase when other models like the SLK, the CLS and the Maybach were displayed. This segment now lagged behind Thailand, where the size was between 4,000 and 6,000 units a year, and China, where it was almost 15,000 a year, mainly because India was slow in liberalizing.

However, he was confident that the Indian Luxury car market too would catch up.

BMWs entry:
On what the entry of BMW into the Indian car market meant for the company and the luxury car segment, Dr. Aulbur expected the market to grow. Daimler Chryslers market share, now 99 percent, would be Slightly affected but the numbers would continue.

South

Indian

Annexation

by

Different

Car

Manufacturers:
On what the entry of BMW into the India, the German based luxury car maker, unveiled the latest edition of the Mercedes Benz S-class and M-Class vehicles here yesterday. The company is keen towards developing its share in the South Indian market. Since the southern market is responsible for twenty five percent of the sales and the two tier cities are growing fast in this region the South Indian market is becoming important. D.M. is committed to offer our customers to the latest products in the least possible time. The new S-class unveiled today is parallel to the US market launch and clearly demonstrates Daimler Chryslers seriousness about the Indian market. The company was growing at CAGR of 17 percent in India and has sold 15,000 cars in the Indian market after starting its operations in the country ten years ago.

Daimler Chrysler has sold about 137 units this year till February and about 2019 cars in 2005. While 35 percent of the total sales for the company came from the North, 30 percent was from West, 25 from South and 10 percent from the East.

Cars In India:
Maruti alto is said to be the most preferred car, as it has secured about 50% sales of maruti alone. Coming in at No.2 is the Maruti 800, which is known as the bread and butter of the company. Maruti 800 is still a favorite small car of many customers and has secured around 25 percent share in the total sales and booking, said Parag Ohol, Sales Manger of Chowgule Industries Ltd., an authorized dealer of Maruti cars. Zen, the production of which has been discontinued by Maruti, is still popular with buyers, though the corporate purchases of this model have suffered to some extent, Somu Sen, Sales Manager, Kothari Whales, said, some Zen aspirants have started considering other option such as the Wagon R or the Swift LXI, Sen added Hyundais small car Santro prices dropped by over Rs 20, 000 after the Budget. Growth projections for the financial year of santro are also on the upside as the production of Santro increases with an additional shift and the company targets a 28 percent market share against the current 21 percent. He said, We are targeting 40 percent growth rate this year.

Why India:
INTEREST RATE NEW DELHI: Finance Minister P.C. Chidambaram on Friday said that the Reserve Bank of India (RBI) addressing the

liquidity issue, the rates of interest would remain attractive for both depositors and borrowers. In an interaction with newspersons on the sidelines of Punjab National Bank (PNB) function here, Mr. Chidambaram said: These [hardening and softening of interest rates] will remain attractive to both depositors and borrowers. Pointing out the higher rates of interest reflected the rising demand for credit in the economy, Mr. Chidambaram said, No one in the Government can say rising credit demand is bad or too much, as the demand for credit was reflection of the increasing fund requirements of various sectors of the economy. In effect, the issue that to be addressed was the supply side of credit, he said. As far the problem of liquidity of making more funds available in the system [the] RBI is seized of the issue. I am totally confident that [the] RBI will address the issue of supply side of the credit, the Finance Minister said, RBI, Mr. Chidambaram said, had already taken the initial step towards tackling the liquidity issue by way of permitting banks to raise NRI (Non-Resident Indian) deposit rates while nothing that the central bank Governor was competent person to handle the problem of credit shortage. In fact, the Government and the RBI were already seized of the matter and a few steps had already been taken to partly tide over the problem prior to the quarterly monetary review by the central bank on April 18, A meeting between bankers and RBI Governor Y.V.Reddy to discuss the liquidity issue was followed up with another meeting with Mr. Chidambaram and the chiefs of public sector banks.

While the already-effected hike in NRI deposit rates was one of the suggestions put forward by the Indian Banks Association (IBA), some of the other proposals to tackle the problem were a reduction in the cash reserve ratio (CRR) along with utilization of the excess Statutory Liquidity Ratio (SLR). Speaking at the PNB function, Mr. Chidambaram said there was a need to strike a balance between the demand of depositors and borrowers. In particular, to sustain the high economic growth rate being witnessed since the third quarter of 2004-05, the supply of credit had to be increased to raise the investment rate, he said Mr. Chidambaram conceded that there was a wide mismatch between the demand and supply of credit in the while the growth in lending thus far in the current fiscal has been 30 percent, deposits had gone up by a mere 16 percent. To bridge this gap , he said, ways and means had to be devised to maintain the investment rate. Mr. Chidambaram also exhorted banks to improve the quality of credit and hoped that they would raise more funds from the market following the recent RBI guidelines on hybrid loans. The function was organized by PNB to mark the launch of its 2000th centralized banking branch. In a years time, the bank linked 1,000 branches to the centralized network.

Major Power US + China + India > 50% economic growth

By 2020, the combined forces of the United States, China and India will account for more than 50 percent of all new economic growth, according to a just issued Economist Intelligence Unit (EIU) report.

Among EIUs predictions

Globalization of companies will increase, and there will be sizeable growth in global economic output, but only 15 percent increase in the work force. Chinas economy will be on par with the United States by 2020, and will have the second largest consumer market and the largest tech sector. Asias over all share of the global economy will rise to 43 percent from its current 35 percent. India will contribute 30 percent, or 142 million, of the new workers entering the global work force. The US will contribute 12.5 million new workers, and the overwhelming majority of new jobs will be in the service industry. The EIU report was sponsored by Cisco Systems.

Emerging India Investing in Asia: A New Middle ClassThat Asia can become the engine of global economic growth is a recurring concept in the relevant literature, a theory floated variously throughout the centuries without yielding tangible results. Based on a perceived inability of the region to deliver on its potential, many people, professional, and investors included-resist the idea that Asia can develop a sustainable, consumer-based economic growth model. Such resistance is rooted in the regions well documented dependence on exports to the developed Western economies. Asia, in this construct, will remain a volatile investment proxy to global economic growth, stuck in a perpetual boom-and-bust cycle.

But consider that following set of circumstances: a large population in a demographic sweet spot, a high savings rate, an increasing bias toward consumption, and the fact that the world needs a new growth engine for the 21st century. These elements portend a rise of Asian consumer that will transform the global economy. Although this transformation is still in its early stages, marked by periods of rapid advancement as well as periods of relative stagnation, Asia is steadily becoming the main growth game in town. Due to the regions internal strengths, the knowledge gained during the boom and bust cycles, and the current state of the global economy, Asias time is upon us. The firmly entrenched belief that the world cannot grow without the American consumer being the sole dominant force will cost shortsighted investors the opportunity to identify and capitalize on an emerging, gigantic trend. Because humans are creatures of habit, it is difficult to alter our ideas and identify change. The inability to see the transition to Latin American and Japanese growth in the 1970s after everyone had become extremely comfortable paying the U.S. growth stocks of the 1960s is an example of this stasis. A more recent manifestation of this resistance to change is characterized by the fear sparked by the 1996 collapse of the Japanese consumer that the world would have great difficulty finding a new consumption archetype. History demonstrates that change in world economic leadership is constant. Consider the great European powers that used to hold the economic reigns of the world. When one city-state was at the height of its influence, neither the citys inhabitants nor people abroad were able to contemplate a change of the status quo.

In the 1300s and 1400s, the Italian powerhouses of Venice, Genoa, and Florence dominated, followed by Spain and Portugal. In the 1500s Antwerp and then Amsterdam took over as centers of world banking and trade. In the 18th century, the power shifted to London, with the start of the Industrial Revolution. Eventually, the U.S. took over the lead. Today, those claiming things will stay the same sound even more nave than those grew comfortable in their respective dominant city-states. Given the already significant effects of globalization on the worlds economy, change in the current context is a lot closer at hand than many people are willing to accept. Asias road is difficult one, perhaps more difficult than those faced by fast-growing economic regions. Asia is coming of age during a period of explosive globalization and technological change. Access to technology and capital offers a lot of opportunities, but such access is also restrictive as the region is member of an extremely complex and interconnected world. Complicated relationship makes decision- making especially difficult. In the past, developing economies did not have outsiders looking over their shoulders. As the road to prosperity is not always clearly defined and fair, this relative solitude worked to these economies advantage. Today, though, the rapidly emerging economies operate under the microscope of countless worldwide organizations and governmental agencies- all administrated by the economically developed nations (EDNs). Developing economies must find ways to grow and integrate into the global economic system, while answering the questions and satisfying the demands of the great economic powers.

What would have happened to the Industrial Revolution in England, or what would have been the rate of progress in the American colonies, if they had to play by the rules that developing countries in Asia are required to follow today? To suggest that now is not the 18th century and that the world has come a long way in the civility, freedom, and the like ignores the fact that developing Asia is today at the same position (relative to the progress that the world has made) as the emerging economies of more than 200 years ago. After all, 45 percent of Chinas total workforce is still employed in the farm sector, a clear indication that China is still at a relatively early stage in the industrialization process.3

Looking Back:
Asia, especially China because of its size, has long excited the imagination of the Western world. Marco Polo talked about the great wonders of China, and Christopher Columbus although he never reached China spoke of an incalculable amount of trade. In the 1800s, British merchants tried, unsuccessfully, to conquer China. It is beyond the scope of this book to examine the details of these failures, but some brief points are warranted. Few people appreciate (mainly because of Britains and later, continental Europes industrialization boom) the fact that parts of Asia, especially parts of China, Japan, and India, were on the same economic level as Europe until the end of the 18th century. As Kenneth Pomeranz noted, In sum, core regions in China and Japan circa 1750 seem resemble the most advanced parts of Western Europe, combining sophisticated agriculture, commerce, and non-mechanized industry in similar, arguably even more fully realized, ways.

This

lack

of

appreciation, in the

coupled 19th

with

Europes led to

spectacular unshakable

economic

growth

century,

misunderstandings when the West did business with China in particular. Carl Crow put the problem into perspective in 1937. Every now and then, he write, we are visited in Shanghai by an export manager, usually a new one, who appears to be spending his companys money on an expensive trip around the world for the sole purpose of discovering how many points of superiority he and others of his nationality enjoy over the people of the country he is visiting. This shallow sense of superiority and a lack of sensitivity to the regions idiosyncrasies had led to myriad mistakes by and financial loses for Western investors. Of course, this is a two-way street; Asias own attitudes harmed Asia numerous times. In the 1990s, the region leaders and businessmen accepted the theory that there was something unique about Asia that made its economies thrive. But the work ethic of its people notwithstanding, a careful look reveals that the regions success was more the result of good timing than anything else. At the time, Southeast Asia was the only part of the world not enmeshed in crisis, and it had fairly open markets facilitating an economic and stock market boom. With Latin America beaten own, Africa facing its chronic problems, and Japan at the end of its run, the tigers (for example, South Korea, Taiwan, Singapore, and so on) were the worlds only growth investment choice. The only rational explanation for this special status misconception is the vanity of human beings and the conviction that, for whatever reason, their situation- economic or otherwise is of a special kind

that deserves special treatment, and above all is almost certainly irreversible. These above mentioned factors will make India a hot market for cars and thus this study will give the marketers a little overview about the perception and exception from different countries by the Indian consumers. It will help the marketers in developing a product that will fit a according to their needs.

The Country-of Origin Concept:

In an era of global corporations and intertwined transitional network of exchanges (e.g. ideas, R& D, product design, sourcing of raw materials and subassemblies, manufacture, and distribution) that results in the final product, Saeed (1994) defines the country oforigin of a product as the country with which a firm that produces the product is associated and, typically, this is the companys home country. For example, many consumers would consider Ford Festiva and Mercury. Tracer American-made automobiles although Ford Festiva was designed in the US, engineered by Mazda in Japan, and is being built by Kia in Korea. Mercury Tracer has a Ford design, built on a Mazda platform in Mexico, with a Ford engine manufactured in Mexico and other components form Taiwan Also the Honda Accord is built in Ohio and the Toyota Corolla in California out of parts imported mostly from Japan. But in this project an effort is made to find out the perception for cars made by different foreign players in Indian consumers mind.

Definition
Country of origin effects has been defined in many ways in the literature. According to Wang and Lamb (1983), country of origin effects is an intangible barrier to enter new markets in the form of negative consumer bias toward imported products. Johansson et al.(1985) and Some other define it the country where corporate headquarters of the company marketing the product or brand is located . Typically, this is the home country for a company. Country of origin is inherent in certain brands. IBM and Sony, for example , imply US and Japanese origins, respectively. In general, the country of origin affects consumers product evaluation since consumers evaluate a product on the basis of information cues available. The country of origin is also found to be one of these cues because consumers tend to be less familiar with products of foreign origin. Some studies suggest a hierarchy of effects among countries that is the relationship between the level of economic development and perceived superiority of the products. Other studies investigated the effects of country of origin on consumer evaluations of uni-national and bi-national products since the globalization of business functions has led to the proliferation of hybrid products or products that have foreign made components but a domestic brand name. These authors further found various other sources of biases that could influence consumers preference for products made in different countries, including ethnocentric bias. Despite the general consensus with regard to the influence of country-of-origin effects non-product evaluation, Han (1989) explained how this influence might take place. In his halo model, he posited that consumers might use country image as an information cue to infer the quality

of a brand when consumers are not familiar with products of the source country.

Need And Importance Of The Study:

During the past several decades, country of- origin research has attracted significant attention from researchers and practioners alike around the globe. Part of the reason for this continuous interest in the subject area is attributable to increased global competition among foreign firms operating in different parts of the globe. These firms, in most cases, are not only offering more variety in and assortment of products but also offering them at competitive prices. This, coupled with the increased standards of living and improved lifestyles of consumers around the world, and improved global communication and increased use of internet-based communication, means target consumers in the market worldwide are exposed to and are selecting from the wider range of foreign products/brands than even before. From a marketing need to understand consumers perceptions and evaluation of foreign made products more than even before. Accordingly, marketers have shown a growing interest in

understanding the factors that affect consumers evaluation of foreign in products against domestic ones. Therefore, the empirical study is designed to examine the products-country perceptions and evaluations of consumers in an advanced developing country-India. The growing Indian market in size as well consumer wealth and sophistication has attracted significant attention from multinational companies since the economic reforms started in India in 1991. Since the consumer evaluations of COO cues can be affected by consumer biases as ethnocentrism, this study also examines Indian

consumers Lifestyle and ethnocentric behaviors to provide some guidelines and suggestions to marketers and advertising agencies that are operating not only in India but in neighboring countries with similar level of socio-economic technological developments as India.

Conceptual Framework:
One of the first conceptualizations of the county-oforigin

phenomenon was that of Nagashima. He defined the image that consumers associate with a given country of-origin as the picture, the reputation, the stereotype that businessmen and consumers attach to products of a specific country. This image is created by such variables as representative products, national characteristics, economic and political background, history and traditions, Others view this country image as reflecting consumers general perceptions about the quality of products made in a particular country and the nature of people from that country. Country of origin perceptions entails cognitions, emphasizing specific product and marketing attributes, and affect, regarding the countrys people. More broadly, Samiee (1994) regards the country-of-origin effect as any influence or bias that consumers may hold, resulting from the country of origin of the associated product or service. The source of the effect may be varies, some based on experience with a product(s) from the country in question, others from personal experience (e.g. study and travel), knowledge regarding the country, political beliefs, ethnocentric tendencies, (or) fear of the unknown. The country of origin , reference group influence , and consumer ethnocentrism literatures have developed independently ; however , the three streams of research merge when addressing the role of

national loyalty in the purchase Marketing decision process. While the country-of-origin effect serves to convey global impressions to users about the product or product attributes when knowledge is lacking, it also serves as an indicator of ones group identity, Attachment to an in-country versus foreign produced product will be stronger, the more salient the sense of national affiliation and loyalty. For instance, a person with a low sense of national loyalty is not as likely to respond promotional campaigns focusing on a national theme as are individuals possessing a strong sense of loyalty for their nation. Brand name, store image, specific product attributes, or other non country specific cues to product quality may persuade less nationalistic consumers to prefer foreign product as opposed to their locally-made substitutes But, the aforementioned factors are not related to national loyally. On the other hand, a staunch nationalist may respond to the country-of-origin cue because of close association of nation with ones own self-identityA true patriot should always support local versus foreign produced goods and services represents an attitude reflective of own country bias which is activated by exposure to the country-oforigin cue. Thus, the country of-origin effect can be separated into two discreet components. One component is informational and provides cues to consumers regarding the value of product attribute, which are difficult or impossible to access, or for which there exists no prior information for assessment. Simply put, the first component serves to convey impressions of quality, dependability, specific information is not readily present A second component of the country of origin cue relates directly to ones group affiliation (i.e. second component of the effect which this research focuses on. For the case of airline travel, it is expected

that national loyalty plays a key role in the selection process and the country of air carrier will influence the selection process.

Ethnocentrism: About Ethnocentrism:

The tendency of people to put their own group at the center: to see things through the narrow lens of their own culture and to use the standards of that culture to judge others.

Ethnocentrism (eth no sen triz em): Ten tendency to

view the traits, ways, ideas, and values observed in other cultures as invariably inferior and less natural or logical than those of ones own group/ Ethnocentrism is a commonly used word in circles where ethnicity, inter-ethnic relations, and similar social issues are of concern the usual definition of the term is thinking ones own groups ways are superior to others or judging other groups as inferior to ones own. Ethnic refers to cultural heritage, and centrism refers to the central refers to the central starting point. So ethnocentrism basically refers to judging other groups from our own cultural point of view. But even this does not address the underlying issue of why people do this Most people, thinking of the shallow definition, believe that they are not ethnocentric, but are rather open minded and tolerant. However, as explained below, everyone is ethnocentric, and there is now way not to be ethnocentric it cannot be avoided, nor can it be willed away by a positive or well meaning attitude.

To address the deeper issues involved in ethnocentrism calls for a more explicit definition. In this sense, Ethnocentrism can be defined as: making false assumptions about others ways based on our limited experience The key word is assumptions, because we are even aware that we are being ethnocentric we dont understand that we dont understand. Ethnocentrism is often linked to a sociological theory called cultural relativism , which means that: cultural relativists assert that concepts are socially constructed and vary cross-culturally. These concepts may include such fundamental notions as what is considered true, morally correct, and what constitutes knowledge are even reality itself this has major implications for the study of non-Western societies. If importing a Western rationalist approach is ethnocentric. An insiders view of the culture. Ethnography thus becomes a process of uncovering the meanings by which people construct reality and translating this knowledge into the discourse of the fieldworkers own society. They key is erasing ethnocentrism is first understanding that one is ethnocentric. For example, if one was in France, and looking at any particular amount of francs, and asked How much is this in real money? that person would be ethnocentric. The first step is recognizing the attitudes and beliefs that make us ethnocentric, and then work to dispel them. Yesterday I dared to struggle. Today I dare to win. Berbadete Devlin

Automobile Dealers Network In India:

In terms of Car dealer networks and authorized service stations, Maruti leads the pack with Dealer networks and workshops across the country. The other leading automobile manufactures are also

trying to cope up and are opening their service stations and dealer workshops in all the metros and major cities of the country. Dealers offer varying kind of discount of finances who in tern pass it on to the customers in the form of reduced interest rates

Major Manufacturers of Automobiles in India:

Maruti Udyog Ltd. General Motors India Ford India Ltd. Eicher Motors Bajaj Auto Daewoo Motors India Hero Motors Hindustan Motors Hyundai Motor India Ltd. Royal Enfield Motors Telco TVS Motors DC Designs

Government has liberalized the norms for foreign investment and import of technology and that appears to have benefited the automobile sector. The production of total vehicles increased from 4.2 million in 1998- 99 to 7.3 million in 2003-04. It is likely that the production of such vehicles will exceed 10 million in the next couple of years.

Automobile Export Numbers:

Category Passenger Car Multi Utility Vehicles Commercial Vehicles Two Wheelers Three Wheelers Percentage Growth 2000-01 25468 2654 10108 100002 21138 -16.6 2006-07 (Apr-Dec) 121478 3892 19931 256765 51535 32.8

The industry has adopted the global standards and this was manifested in the increasing exports of the sector. After a temporary slump during 2000-01and 2001-02, such exports registered robust growth rates of well over 50 per cent in 2002-03 and 2003-04 each to exceed two and- a-half times the export figure for 2001-02. Sales incentives, introduction of new models as well as variants coupled with easy availability of low cost finance with comfortable repayment options continued to drive demand and sales of automobiles during the first two quarters of the current year. The risk of an increase in the interest rates, the impact of delayed monsoons on rural demand, and increase in the costs of inputs such as steel are the key concerns for the players in the industry. As the players continue to introduce new models and variants, the competition may intensify further. The ability of the players to contain costs and focus on exports will be critical for the performance of their respective companies

The auto component sector has also posted significant growth of 20 per cent in 2005-06, to achieve a sales turnover of Rs.30,640 crore (US$ 6.7 billion). Further, there is a potential for higher growth due to outsourcing activities by global automobiles giants. Today, this sector has emerged as another sunrise sector. Economic growth over the past decade has transferred India into an important commercial centre with a vibrant lucrative consumer market. In recent years, India has become an attractive competitive and fast growing market for companies around the world. The liberalization policy followed by India after 1991 economic reforms has given rise to the same condition for local and foreign businesses. These developments have significantly enhanced and affected Indias relationship with the international business community. With a young and rapidly growing large population base over 40% larger than total population of many countries, India possesses a small, very wealthy, western- oriented upper class and a sizable and growing middle-class of salaried workers and small business owners who are becoming major consumers of products. Therefore this market has attracted significant attention from multinational companies North America, Europe and Asia. To tap this potential market, global marketers will require a comprehensive understanding of Indian consumers. As per capita income continues to grow, both disposable and domestic consumption levels will fuel demand for more imports. After the smokes of cold war between Western world and China, Indian Market is the lenient policies followed by his democratic country as against restricted policies of communist country like China. The country of origin (COO) concept has come up with age.

With the spread of globalization, the need of has come with age. With the spread of globalization, in the need of studying the impact of country of origin of product on its sales has increased tremendously. The same type of product of different countries finds different rating by different people. In this project, an effort has been made to find the (COO) impact on buying behavior of people. Here the respondents are students of PUNJABI UNIVERSITY, PATIALA. As more and more countries are moving to other countries, it has become extremely important for the manufacturing companies and the marketers to find how the inhabitants of that particular country, perceive their product. I this way they may be able to forecast the sales of their product to greater extant. Many studies have already been undertaken on this concept but this particular study aims to find out the forth-coming trend of car through the youth. Because ultimately they will be the future buyers. This project will not show interest of educated students as in the near future they will represent the major chunk of car owners. This future car owners have different conceptions, expectations for different countries i.e. India, Japan, Untied States that is surely going to effect their sales in future. Emerging markets in Asia and Latin America led advancers. Venezuela, Russia and India led with a gain of 44%, 26% and 20% respectively. Firm prices in commodities such as oil, iron ore and metals supported the advances in Brazil, Mexico and Venezuela as well. Rising corporate profits and consumers spending supported index in India. Taiwan and South Korea delivered negative returns for the quarter. Chief Economist at CLSA Jim Walker believes that going ahead 2007 is likely to be tough year for global liquidity. However, he adds that Indias economic growth could move to 9-10%, and that Indias

current account deficit is not a worry for now. He further says that, there is not much downside to the rupee.

Hypotheses:
Given the issues discussed so far, the following two hypotheses relating to country-of origin of automobiles, were investigated in this study. The first hypothesis tests for significant differences in the evaluation of Indian consumers perceptions of where automobiles are made and their evaluations of those automobiles. H1: Indian consumers would evaluate automobiles, which they perceive to be made in US, Japan differently from those they perceive to made in India. H2: Indian consumers of different genders, education, income and age will evaluate automobiles of different countries differently.

CHAPTER-2 REVIEW OF LITERATURE

Cordell (1991) suggests that consumer preferences are more product specific for industrialized than less developed countries. That is, a negative COO effect is evident when the home country of manufacture is less developed than alternative sources of goods. In general, a specific country can rank high in one product class and low in another. Han (1988) concluded that the emotion of patriotism played a significant role in consumers choice of televisions and automobiles. However, the cognitive attitude toward products made in different countries (country images) played a limited role. The study found that patriotic consumers tend to be older, white, and from blue collar occupations. Kayank and Cavusgil (1983) studied consumers perceptions of different classes of products made in their own country but the same respondents could be swayed to choose foreign products if quality and price considerations were sufficiently favorable. Specifically, they observed that consumers may not accept inferior quality domestic products when superior foreign products are available. They concluded that consumers attitudes toward products of foreign origin vary significantly across product classes. Knight (1999) in his research paper titled as Consumer

preferences for foreign and domestic products has compared consumer preference for goods made abroad and in the home country by both foreign and home country firms. These preferences and the intervening role of price-quality attributes are assessed in

an

empirical

study

using

conjoint

analysis

and

MANOVA

procedure. Results suggest that country of manufacture and product quality strongly influence consumers decision making in globally available product categories. Specifically, compared to imported goods consumer appear to prefer domestically manufacture goods and are often willing to pay a higher price for them. It is usually when imported goods are significantly superior quality that consumers will pay more to obtain them. Finally, in their purchase consumers will pay more to obtain them. Finally, in their purchase decisions consumer appear not to put much weight on a products perceived importance to the home countries manufacturing base. Paswan and Sharma (2004) in their research Brand country of origin (COO) image: investigation in an emerging franchise market has investigated the relation ship between Accuracy of brand country of origin (COO) knowledge and image, in a franchising context. Accuracy of brand COO knowledge is found to be positively related to COO image. In accurate brand COO knowledge leads to a confusing and somewhat negative image about COO. In addition, antecedents to the brand COO knowledge lead to a confusing and somewhat negative image about COO. In addition, antecedents to the brand COO knowledge are also investigated. Factors such as social class, education and travel abroad positively influence the brand COO knowledge is also investigated. Factors such as social class, education and travel abroad positively influence brand COO knowledge. This investigation conducted in an emerging especially for multinational franchisers.

Sulati and Baker (1998) in their research work country or origin effects: a literature review has provided a comprehensive review of the literature regarding the effect of country of that consumer perceptions differ significantly on the basis of product/service and country of origin. The country of origin may be an important element in the perceptions differ significantly on the basis of product/service and country of origin may be an important element in the perceptions consumers have of products and services especially where little other information is known. However, the question of how much influence the country of origin provides in product and service evaluations remains unanswered and a number of other major issues yet to be resolved Directions for future research are developed.

CHAPTER - 3 RESEARCH METHODOLOGY

Problem Definition:
The problem for the project can be priestly stated as consumer perception of foreign products in India.

Objective:
The main objective will be to find out the consumer perception of foreign and Indian automobiles in India. Examine the effects of automobiles country-of-origin on Indians Consumers buying habits of automobiles. Determine how Indian consumers rate Indian, Japan, US automobiles. To provide suggestions to the marketers about the

implications of study results.

Method of Data Collection:

Both primary and secondary will be collected for data analysis. Secondary data will be collected from journals, magazine, internet etc to understand the concept of country-of-origin which will be helpful in framing the objectives of the study. Primary data will be collected from PUNJABI UNIVERSITY, PATIALA. The reason for PATIALA as a site for sample selection will be its socio-economic, cultural demographics reflecting the major

attributes in Indian culture. The respondents will be from of diverse viewpoints, behavioral tendencies and characteristics reducing the demographic errors in the study. The students of the colleges are more aware of Different brands of different countries that is why the study is restricted to students only. Moreover they will reflect the behavior of common educated masses that are going to be the buyers in coming future.

Sample Design and Sample Size:

Sampling will be carried out in PUNJABI UNIVERSITY. The reason for selecting them is their ability and knowledge about the mechanism of automobiles more than common students. During the course of the project different sampling techniques i.e. stratified and random sampling will be used according to the need and convenience of study.

Statistical Techniques used:

To come up with quantitative aspects statistical techniques i.e. nonparametric test is used.

Limitatation Of The Study:

1) The sample will be collected from one origin of the country , which would influence the generalized of the results to the whole nation. 2) The consumers will be asked to provide their evaluations about the country-of-origin cues and therefore the effects of country characteristics should be considered with caution since

consumers do not perceive all foreign products from a country as being the same or similar. 3) There can be personal biases differing from person to person. 4) There cant be one universal group from which the sample will be taken. There will be demographic differences between the samples ultimately resulting different result ultimately resulting different result. 5) The sample size was small, so generalization should be made cautiously. 6) There are chances of errors because the data was related to consumer perception-Distortions may be there because of misinterpretation of the questions.

CHAPTER - 4 ANALYSIS AND INTERPRETATION

Data Analysis:
The present study was undertaken with the purpose of dinging out the perception of people about cars made in three different countries i.e. India, Japan, and USA. This objective was achieved within the framework of the hypothesis mentioned. The raw data for the study was obtained with the help of survey. In order to screen the data for meaningful purpose and to test the hypothesis, the data was analysed by various statistical techniques an attempt has been made to relate the outcome of the analyses to the framed hypothesis and findings of the previous research so as to arrive at meaningful conclusions. Descriptive analysis was used to present to profile of percentage of data value for each of the variables.

Descriptive Analysis:
Descriptive analysis was done to present a profile of the respondents and also find to out the mean scores and standard deviation for the variables in the questionnaire.

Customer Profile:
The success of different foreign & domestic manufacturers in formulating effective marketing strategies largely depends on maintaining up-to-date profile information on the customers in the form of customer-based data. The availability of such a comprehensive profile provides marketers with a strong basis for designing effective plans and programmers regarding the marketing

of products and service. The questionnaire includes customers; age, income, education level.

Respondents:
The respondents were students of PUNJABI UNIVERSITY of the total sample size of 100, 80 were male students and the rest females. The reason for majority of the sample size comprising of male students is that boys still in India have more knowledge about automobiles than girls. SEX MALE 80% SEX
80 80%

FEMALE 20%

60

40 20%

20

0 MALE FEMALE

Age of the Students:

The respondents are mostly from MBA and ENGINEERING. So most of them are less than 25 yrs of old. The reason of selecting the students from these departments is that they possess more knowledge about the mechanism of automobiles.

AGE OF RESPODENTS AGE 20-25 YRS 92% AGE 25 & ABOVE 8%

Age group
8%

20-25 yrs 25 yrs and above 92%

Qualifications:
As the students were mostly from ENGENEERING DEPARTMENT. They are graduates. So the sample has graduates in more number. To get some more experienced view respondents were taken from other post graduate departments like Laws, Sociology, Physical Education.

Qualification Graduates 80% Post Graduates 20%

Qualification

20% Graduates Post Graduates 80%

Household Annual Income:

Most of the students respondent positively by clicking there annual household income. But some of them didnt exposed their household income. Three categories of annual income were put on the questionnaire i.e. income less than 3 lacs, between 3-6 lacs, 6 lacs and above.

Household annual Income Less than 3 lacs 31% Between 3 to 6 lacs 35% 6 Lacs And Above 14% 20% Did not Tell

Household Annual Income

40 35 30 25 20 15 10 5 0 14% 20% 35% 31%

> 3 lacs 3-6 lacs

6 lacs & did not tell above

Standard Deviation and Mean values:

The tables below show the mean and standard deviation for the independent variables i.e. Innovations Appealingness Attractiveness Honor with the car Better than those made in other counties Quality Controls Advertising Passengers Safety Reliability Price of Car Availability of spare parts Perfection Fuel efficiency Resale value Service centres Made for upper class Made for middle class Quality of work force. Most of mean values of these three different countries does not show any significant difference. Except for some in which the U.S.A and India has clear mastery but Japan was rated almost equal on all the variables. The results for each country are shown below.

Indian

mean

and

standard

derivation:
Mean Std. Derivation

Variables

Innovativeness Appealing ness Attractiveness Honor with the car Better than countries Quality Controls Advertising Passengers safety Reliability Price of car Availability of Perfection Fuel Efficiency Resale Value Service centres Made for upper class Made for middle class Quality of work force spare parts those made in other

3.0297 3.0891 3.0594 3.3663 2.9010 3.2376 3.3168 3.8020 3.0297 3.2772 3.7624 3.9010 3.1386 3.3960 3.4059 3.7822 3.0396 3.8614 3.3465

.8057 .9176 .8697 1.0171 .9950 .8961 .9688 .9594 1. 1176 .8958 1. 0213 .9747 .8606 .9174 .9917 1. 1190 1. 0190 1. 0773 .9842

The respondents rated Indian cars not far behind other foreign players but the mean values of variables innovativeness (3.0297), appealingness (3.0891) and attractiveness (3.0594) are quite low. This shows that the R&Ds that Indian Players carried out covered the huge distance between technology and India but they are still behind U.S.A and Japan. Indian cars are ranked lowest passengers

safety (3.027). Even India does not produce goods cars for upper class.

Japan

mean

and

standard

derivation:
Std. Derivation

Variables

Mean

Innovativeness Appealing ness Attractiveness Honor with the car Better than other countries Quality Controls Advertising Passengers safety Reliability Price of car Availability of Perfection Fuel Efficiency Resale Value Service centres Made for upper class Made for middle class Quality of work force spare parts

3.6040 3.7525 3.7195 3.8185 those made in 3.6964 3.8614 3.8977 3.8680 3.7756 3.6238 3.6418 3.6733 3.6089 3.5891 3.4653 3.6733 3.5743 3.5644 3.6733

1.0204 1.0492 1.0150 .9438 2.5528 .9210 .9452 .9075 1.0899 .9288 1.0005 .9785 .9928 .9167 .9626 1.0661 1.1049 1.1100 .9886

The mean values Japan are almost same on all the variables. It shows that respondents neither find any flaw nor they rated them high through these cars.

USA

Mean

and

Standard

Derivation:
Mean Std. Derivation

Variables

Innovativeness Appealing ness Attractiveness Honor with the car Better than other countries Quality Controls Advertising Passengers safety Reliability Price of car Availability of Perfection Fuel Efficiency Resale Value Service centres Made for upper class Made for middle class Quality of work force spare parts

3.7624 4.1188 4.0198 4.0891 those made in 3.8515 4.1287 4.1683 3.9802 4.1683 3.9109 3.4356 3.1089 3.8713 3.4158 3.3267 3.4158 4.2772 3.0594 3.8317

.9607 .9725 .9590 .8378 .9315 .7303 .8009 .9053 .8840 .8497 1.1438 1.0854 .8082 .9515 1.0011 1.0418 .9604 1.1029 1.0205

The Made in.. concept is still viable most for U.S.A products This survey shows the clear mastery of U.S.A cars over the other two. Indian people still think that the U.S.A cars are the best. The variables appealingness (4.1188) attractiveness (4.0198), honour (4.0891) with the car, quality (4.1287), shows controls (4.1683), passengers safety (4.1683), and cars for upper class are ranked

high. This show that U.S.A made cars are still the leader in looks, full of excitement and are very safe,

CHAPTER 5 CONCLUSIONS
The study confirms that Indian consumers attitudes towards cars of domestic & foreign origin doesnt show any significant difference. The independent variables in questionnaire are all that a buyer thinks before buying. The means of these countries doesnt reflect normal distribution, except for some variables. USA can variable are being. The study also suggests. Indian prospect buyers attitude towards locally made and foreign made towards any country i.e. India, Japan & U.S.A. Comparatively to Indian cars the prospect buyers give little edge to US made cars. The hypothesis that were formed in opening rejected, the results clearly shows that Indian car though not far in entertaining the Indian customers but still they are little behind in the good books of prospect customers. The much-hyped concept of COO in India these days is fading, may be with the sense of enthnountrism. Indian cars manufacturers showing international technical standards. The made in concept is disappearing in car segments. Few years, backs to COO was an important tool in different foreign markets even in India as the earlier studies show. But the increase in the sales of Mahindra (Scorpio), Tata (Indica) etc and coming out to expectations of customers, has changed the whole Indian customers mindset. As the research was based on calculated students, they might have more sense of ethnocetism towards Indian products, that is they rated Indian cars little behind US & Japanese Cars

MANAGERIAL IMPLICATIONS

For Indian cars segment:

The Indian car manufactures can utilize this opportunity. The result showing bleamed of Indian cars in Indian Markets. So by providing, some good products, they can swing the trend in their favour. The Indian manufacturers has opportunities to exploit on three front i.e. o Availability of spare parts. o Service Centres o Cars made for middle class The respondent rate Indian car manufacturer high on these three variables. Marutis service centre in Ladakh is an exemplifier it. The variable Cars made for middle class shows high rating to Indian cars. This is great opportunity that can be utilized in their favour with sizeable growth in middle class segment. Indian cars were rated very low on Passengers safety Innovativeness, appealingness, and attractiveness. So these are the areas of concern. The manufacturers should give importance to these.

Managerial Implication for USA manufacturers:

The Made in concept of USA still has an upper hand over the other to countries i.e. India and Japan. It implies that Indian consumers will find more the US made products in near future. The USA has still the supremacy in car manufacturing. The results clearly say it. They are rated high on customers safety, innovativeness honour with car etc. The perception of USA technology is Indian consumers has high rating. This opportunity can be utilized. But at the same time US cars are rated very low on variables of availability of spare parts, cars for middle class. They need to come with some low price products. The Chevrolet Aveo is a step towards it.

Managerial manufacturers:
Japanese cars are

Implications

for

Japanese

ranked

well

on

all

the

variables.

They

manufactures need to work on their competencies that used to be high some years before.

BIBLOGRAPHY
Knight, G.A. (1999), Consumer preferences for foreign and domestic product. Journal of consumer marketing, 16(2), 151-162 Paswan A.K. and Sarma Dheeraj (2004), Brand country of origin (COO) knowledge and COO image investigation in an emerging franchise market. Journal of Product and Brand Management, 43(3), H4-155. Okechuku, C. (1994), The importance of Product country of Origin, European Journal of Marketing, 28(4), 5-19. Haubl , G. (1996), A Cross-national investigation of the effects of country of origin and brand name on the evaluation of car. International Marketing Review, 13(5), 76-97 Sulaiti, K.A. (1998), Country of origin effects: a Literature review, Marketing Intelligence and Planning, 16(3), 150-199 Kucukemiroglu, O. (1999), Market segmentation by using consumer lifestyle dimensions and ethnocettrism International Marketing Review, 13(5), 76-97 Kaynak, E.Kuculcemiroglu, O.Hyder, A.S.(2000), Consumers country-of-origin (COO) perceptions of imported products in a homogenous less developed country.. European Journal of marketing, 34(9/10) 1221-1244

ANNEXURE QUESTIONNAIRE

YOUR DEMOGRAPHIC DETAILS

1 2. 3 4 5. 6. Name Department Sex Age Qualification House Hold Annual Income 7. Contact or e-mail : : : : : : : : _____________________________ ____________________________ Male 20-25 yrs Graduate Female 25-30 yrs 30-above

Post Graduate 3 lacs to 6 lacs

Less than 3 lacs 6 lacs & above

________________________________

Kindly mark your agreement or disagreement with the following statements. Your valuable Co-operation will appreciate. The meaning of the numbers to be used as follows:

1 Extremely Poor

2 Poor

3 Neither

4 Poor Good

5 Excellent

Not Good

Given are some well known Brands manufactured in three different countries 1) Indian -TATA (Safari, Indica, Sumo) Mahindra (Scorpio, Balero) etc. 2) Japanese - Honda (City, Accord, CRV) Toyota (Corolla, Qualis, Innova) etc. 3) U.S.A - Ford (Ikon, Fiesta, Endeavour) General Motors (Opel, Chevrolet) etc.

How do you rate the cars manufactured in India, Japan and USA on the following variables. Variables India 1 2 3 4 5 1 Innovativeness in terms of technology. 2 3 Looks of car. Attractiveness in terms of design. 4 Prestige in owning the car. 5 Better country among the three in positioning their cars 6 Interior quality Japan 1 2 3 4 5 USA 1 2 3 4 5

Controls in terms of handling the car while driving

8 9 10

Advertising Passengers safety Reliability as the consistency of the product

11 12

Price of car Availability of spare parts

13 14 15 16 17 18

Perfection Fuel Efficiency Resale Value Service centers Made for upper segment Made for middle segment

19

Quality of work force