A RESEARCH REPORT ON A STUDY ON CONSUMER PURCHASE INTENTION TOWARDS AC IN RAIPUR

Submitted in partial fulfilment for the award of the degree Master of Business Administration Chhattisgarh Swami Vivekananda Technical University, Bhilai Submitted by, RUCHI RAI MBA Semester II Session -2010-11

APPROVED BY DR.SUMITA DAVE

GUIDED BY PROF.SAKET RANJAN PRAVEER

Shri Shankaracharya Mahavidyalaya

DECLARATION

I the undersigned solemnly declare that the report of the research work entitled A study on consumer purchase intention towards AC in Raipur is based on my own work carried out during the course of my study under the supervision of prof.saket Ranjan Praveer I assert that the statements made and conclusions drawn are an outcome of my research work. I further declare that to the best of my knowledge and belief the report does not contain any part of any work which has been submitted for the award of MBA degree or any other degree/diploma/certificate in this University or any other University of India or abroad.

____________ _____

(Signature of the Candidate) RUCHI RAI

ENROLLME NT NO-

CERTIFICATE

This is to certify that the work incorporated in the report <Title of the Report> is a record of research work carried out by <Name of the student> bearing Enrollment No.: <> under my/our guidance and supervision for the part fulfillment for the award of MBA Degree of Chhattisgarh Swami Vivekanand Technical University, Bhilai (C.G.), India. To the best of my knowledge and belief the Report i) Embodies the work of the candidate him/herself, ii) Has duly been completed, iii) Is up to the desired standard both in respect of contents and language for external viva.

______ ___________ (Signature of the Supervisor )

<Name of the Supervisor > <Designati on of the Supervisor >

ACKNOWLEDGEMENT

I would like to sincerely express my gratitude to Dr. Sumita Dave , Head of Department of MBA, SSMV, Bhilai (C.G.), whose encouragement and keen interest couples with valuable suggestion, served a lot in the successful completion of the work. I am privileged to acknowledge the meticulous guidance received from her. Although being very busy she helped me in going about the project. My heartiest is due to all my teachers for helping me, and developing my skills by encouraging me all the time for study and project work. I thank all my respondents, and my friends who were kind enough to provide necessary data required for the study.

TABLE OF CONTENTS

Declaration by the Student Certificate from the Supervisor / Company Acknowledgments Chapter 1. Introduction to the study

a. Explanation of the subject b. Literature Review Chapter 2. Company Profile / Industry Profile

Chapter 3.

Research Methodology

a. Objectives b. Research Plan c. Sampling Plan d. Data Collection e. Descriptive Statistics Chapter 4. Data Tabulation, Analysis and Results

a. Type of Analysis used and Why

b. Results of the Analysis Chapter 5. Chapter 6. Chapter 7. Chapter 8. References Appendices a. Research Progress Report b. Questionnaire used Findings of the study Recommendations Limitations Conclusions

CHAPTER :1 INTRODUCTION TO TH E STUDY

The pupose of this report is to provide a background understanding of what factors affect the purchase intention of AC in raipur with a view to develop marketing strategies.

With the help of this research I have tried to find out the significant impact of factors such as price,brand,quality,after sale service and warranty on

the purchase intention of consumers while purchasing AC.

CHAPTER :2

INDUSTRY PROFILE

AIR CONDITIONERS

The ongoing economic buoyancy in India .despite global economic melt down has offered opportunities for rapid growth

of consumer durable industry, and in particularly air conditioners and refrigeration industry. In general, there are different types of air conditioners, but the broader classification was room air conditioners and commercial range of air conditioners. The room air conditioners category consists of both the window and split ACs for the use in residential and commercial spaces. The commercial air conditioning comprises of the ductable split ACs to large sized chillers. This segment comprises of retail chains, MNCs, IT/ITeS sectors, BPOs, call centres, institutes, malls, etc. The market is of around Rs 3,600 crore, and is growing at the rate of approximately 25 per cent annually.

INDUSTRY OVERVIEW
The size of the air-conditioner industry in India is about Rs 2,000 crore. The industry can be sub-divided into non-ducted and ducted products. The demand for non-ducted products -window air-conditioners and mini-splits -- comes from both households and corporates. The demand for ducted products -central plants, packaged air-conditioners and ducted splits -- is only from the corporates

AC BRANDS IN INDIA

SAMSUNG AIR CONDITIONERS

WHIRLPOOL AIR CONDITIONERS ELECTROLUX AIR CONDITIONERS LG AIR CONDITIONERS VOLTAS AIR CONDITIONERS VIDEOCON AIR CONDITIONERS ONIDA AIR CONDITIONERS GODREJ AIR CONDITIONERS CARRIER AIR CONDITIONERS SANYO AIR CONDITIONERS AKAI AIR CONDITIONERS HITACHI AIR CONDITIONERS BAJAJ AIR CONDITIONERS KORYO AIR CONDITIONERS SENSEI AIR CONDITIONERS KENSTAR AIR CONDITIONERS BIRLA LIFESTYLE AIR COOLERS BLUESTAR AIR CONDITIONERS HAIER AC OTHERS

DIFFERENT TYPES OF AC

PORTABLE AC-

Can be moved from room to room No need for professional installation Some are only suitable as personal coolers rather than room coolers

SPLIT AC Very quiet operation Attractive and aesthetic designs Offers more flexibility on where to locate the outside component than wall model Can cool open-plan areas well

WINDOW MOUNTED AC Can cool single rooms well Single unit Requires lesser upfront cost as installation is simple Smaller units can be plugged into existing power points

DUCTED AIR CONDITIONERS

Energy efficient Can be designed with multiple zones so you can cool all of the home or just specific areas Offers flexibility as to where noise generating equipment is located

REVERSE CYCLE AIR CONDITIONERS

One system for heating and cooling

 Cheapest form of heating system Creates the least amount of carbon dioxide

HOW TO CHOOSE AN AC

BRITISH THERMAL UNIT- This is the standard measure of heat energy. Manufacturers classify the size, or capacity, of an air-conditioning unit in terms of Btu/h.

COOLING CAPACITY- Most ACs are rated in BTU per hour or by tonnage. It depends upon various factors such as average ambience temperature, the size of room, exposure of walls to sunlight, etc.

COMPRESSOR TYPES The compressor is the ACs most Important component. It helps in the cooling process and can be of 3 type- reciprocating, rotary and scroll.

ENERGY EFFICIENCY RATIO (EER )- its the ratio of its cooling Capacity to the electricity it consumes under standard operating conditioners. The higher the EER ratio, the better chance you have against getting a helluva electricity bill!

CHAPTER:3 LITERATURE REVIEW

CONSUMER BEHAVIOUR
It is that behaviour that consumer display in searching for, Purchasing, using, evaluating and disposing of products and services that they expect will satisfy their needs. Consumer behaviour focuses on how individuals make decision to spend their available resources (time, money, effort) on consumption of related items that includes what they buy, when they buy it, where they buy it, how often they use it, how they evaluate it after the purchase, the impact of such evaluation on future purchases and how often they dispose it of.

MAJOR FACTORS INFLUENCING BUYING BEHAVIOR

CULTURAL FACTORS

 Culture Sub culture Social class SOCIAL FACTORS Reference groups Family Roles and status PERSONAL FACTORS Age and life cycle stages Occupation Lifestyle PSYCHOLOGICAL FACTORS Motivation Perception Learning Belief and attitudes

IMPACT OF VARIOUS VARIABLES ON PURCHASE INTENTIONPRICEPrice is one element of marketing mix that produces revenue, the other elements produce costs. Prices are perhaps the easiest element of the marketing program to adjust, product features, channels and even promotion take more time. Price also communicates to the market the ongoing companys intended value positioning of its product or brand. A well designed and marketed product can command a price premium and reap big profits (by PHILIP KOTLER AND KEVIN LANE KELLER page 431) To manufacturer, price represents the quality of money received by the firm or the seller for its product. Price

determines the capability of a customer to buy. (by Rajan Saxena page 321) J.P. BOUCHAUD said that a potential powerful way to assist consumers in making dynamic decision is to disclose price information to them before they shop.

QUALITYQuality is a multi dimensional concept that cannot be easily defined or measured, a distinction can be made between objective quality and perceived quality. Objective quality refers to the actual technical excellence of the product that can be verified and measured (MONROE AND KRISHMAN 1985) in contrast; perceived quality is the consumers judgment about a products overall excellence or superiority (ZEITHAML 1988) AFTER SALE SERVICEThe level of after sale service is usually only applicable when making larger purchases, such as white goods. If buying a car, you would know that there are specialists that can fix it, if it broke down, in addition you would expect there to be some kind of warranty in place. Before making larger purchases consumer should always consider the level, and quality, of the after sale service (www.allprojectreports.com) BRANDThe consumers choice is influenced by many surrogates of whom the simplest one is a brand name. Although there may be equally satisfying products, the consumer when satisfied with some brand does not want to spend additional effort to evaluate the other alternative choices. once he or she

liked a particular brand ,he or she tends to stay with it, unless there is a steep rise in the price or a discernible better quality product comes to his/her knowledge, which prompts the consumer to switch the brand.(www.allprojectreports.com) WARRANTYProduct warranties perform important functions for marketers, serving as a persuasive sales variable (Kendall and Russ 1975) and protecting sellers from unreasonable claims by product users (Udell and Anderson 1968). According to Darden and Rao (1977) warranties serve to increase consumer satisfaction by reducing dissonance. On the other hand, Perry and Perry (1976) contend that warranties reduce consumer feelings of risk. (www.acrwebsite.org)

HISTORY OF AIR CONDITIONERS

The AC has been around for over a thousand years. The earliest type of AC device was in ancient Rome supposedly where the scientists invented it to cool down the buildings. The way the scientists and builders made these ac for the buildings was building cisterns and wind towers. The cisterns were large pools of water and when it became hot the water would evaporate into cool air and then the wind towers would blow the air into the building. Because the buildings were subject to extraordinary heat they had to find a way to cool down the environment.

In 1881, naval engineers constructed a box-like structure containing cloths saturated with melted ice water, where a fan blew hot air overhead. This contraception was able to lower a room by 20 degrees Fahrenheit but consumed half a million pounds of ice in two months time.

A close ancestor to the modern AC units was first made in 1902 by an American engineer by the name of Willis Carrier. The machine at that time was called Apparatus for treating air and was built for the Sackett - Wilhelms lithographing and publishing co. in Brooklyn, New York. Chilled coils were used in the machine to cool air and lower humidity to 55%, although the apparatus was made with enough precision that the humidity level desired was adjustable.

After the invention by Carrier, AC began to bloom. They first hit the industrial buildings such as printing plants, textile mills, pharmaceutical manufacturers, and a few hospitals. The first airconditioned home was that of Charles gates, son of Gambler

John bet a million gates, in Minneapolis in 1914. However, during the first wave of their installation, Carriers AC units were large, expensive, and dangerous due to the toxic ammonia that was used as coolant.

Presently with the help of technology and electricity the boom of AC devices have began to take effect. They have made many aircon units to choose from, permanent outside AC, residential and commercial AC. With people who have a place that they live

and cant afford residential air conditioning, a portable AC is a key thing to have and requires no permanent installation. The difference from permanent air conditioning and portable is that with one you can move the cool air wherever you go but with the permanent installation you dont have that luxury.

With the history of air conditioning and the many ways ACs have evolved, there are great ways to keep anyone cool during the summer. From ancient Rome in the 1800s to the hospitals where people are sick; air conditioning is a necessity not only during the summer but year around considering how hot it may be.

AIR CONDITIONERS AN AFFORDABLE LUXURY

Air conditioners have re-defined the home comfort. In simple terms, these home appliances are designed to replace the hot air in a room with nice and cool air. ACs allow you to control the room temperature, humidity, and the air quality making living in hot climate very comfortable.

Not too long ago ACs at home was considered a luxury item. Buying an AC was certainly beyond aam aadmis imagination. An AC was considered an expensive purchase for most middle

class households in India and having it at home remained a far stretched dream.

Not any more! This is one luxury item everyone wants to lay their hands on now. Its not very difficult to find the reasons behind this change in mindset.

The prices for AC have diminished and technological innovations have made them energy efficient, less noisy and lighter. An AC at home apart from controlling the temperature also keeps a check on relative humidity while taking care of room ventilation and air distribution.

The AC installation has become painless and the maintenance cost is also within reach

CHAPTER : 4 RESEARCH METHODOLOGY

RESEARCH METHODOLOGY Research methodology is a way to systematically solve the research problem. In it the researcher studies the various steps that are generally adopted by researcher in studying his research problem along with the logic behind them. It is necessary for the researcher to design his methodology for his problem as the same may differ from problem to problem. Thus, when a researcher talks of research methodology; he not only talks about the research methods but also consider the logic behind the methods he use in the context of his research study and explain why he is using a particular method or technique and why he is not using others so that research results are capable of being evaluated either by researcher himself or by others. 1.STATEMENT OF THE PROBLEM A study on factors affecting consumer purchase intention towards AC in raipur

2.OBJECTIVE OF THE STUDY to identify the factors affecting the consumer purchase intention .

 to find out the significance of the impact of identified factors on consumer purchase intention

to suggest strategies to the marketing policy makers.

3.POPULATION Population refers to the total of items about which information is desired. The attributes that are the object of the study are referred to as characteristics and the units possessing them are called as elementary units. The aggregate of such units is generally described as population. The population is the specific group of people which forms the pivotal of research. To achieve the objective the city of Raipur was selected.

4.RESEARCH DESIGN

5.SAMPLE

RESEARCH PLAN
Research Design: Research Method Used Research Technique Used Data Collection Sampling Plan No. of samples collected Descriptive Survey Questionnaire Raipur Simple Random 100

Measure

Item <20

Number of Respondents 32 55 11 2 77 13 5 5 51 49 72 8 9 7 4

Age

20-40 41-60 >60 < 1.5

Income (in lakhs)

1.5-2.99 3-54.50 >4.5

Gender

Male Female student Business person

Occupatio n

service professio n househol d

CHAPTER : 5 DATA TABULATION, ANALYSIS AND RESULTS

DATA ANALYSIS:
with the help of factor analysis it is found that the loading of variables was appropriate (rotated comp matrix table) I have used cluster analysis technique for data analysis. The number of clusters were 3 for data analysis

INTERPRETATION:
After the cluster analysis following annova table shows the significance level of independent variables.

( annova table)

FINDING OF THE STUDY:

1. As per the cluster analysis with the help of annova table it is found that all the independent variables , price, brand , after sale service, quality and warranty are significant.

2.

these factors are significantly responsible for purchase intention towards AC in raipur

CHAPTER 7 : LIMITATIONS OF THE STUDY

1. since the sample out of the population was 100 , the conclusion cannot be generalised for the whole raipur city. 2. the respondent were not willing to answer 3. the time for the study was limited 4. some respondents had language problem

CHAPTER: 8 CONCLUSION

The topic A study on factors affecting the consumer purchase intention towards AC in Raipur revolves around the factors and elements that influence the purchase intention of the consumer. The study was made out to know what are the factors that had influenced or up to what impact had influenced the intention of consumers. The study also focused to know the changed thinking of consumers towards AC in changing scenario of economic growth of the nation. The Indian consumer is very much conscious about the quality and price. The purpose behind study is to know the consumers likings and disliking and the factors influencing their decisions and to know how long consumer think AC as a necessity or luxurious item in the changing scenario of economic growth. The study was focused to know what are the factors which influences the consumer purchase intention.