A

PROJECT REPORT

ON

CUSTOMER BUYING BEHAVIOR

WITH REFERENCE TO

PROJECT REPORT SUBMITTED TO

DEPARTMENT OF BUSINESS ADMINISTRATION O.U

IN PARTIAL FULFILLMENT OF THE REQUIREMENT

FOR THE AWARD OF THE DEGREE OF

MASTER OF BUSINESS ADMINISTRATION

SUBMITTED

BY

M.SURESH

VATHSALYA COLLEGE OF BUSINESS MANAGEMENT

BHONGIR, NALGONDA DIST
(2008 -2010)
(Affiliated to osmania university)

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 DECLARATION

I hereby declare that this Project Report titled “CUSTOMER BUYING BEHAVIOR”
with reference to HERO HONDA BIKE! Submitted by me to the Department
of Business Management, VATHSALYA COLLEGE OF BUSINESS
MANAGEMENT affiliated to Osmania University, is a bonafide work undertaken by
me and it is not submitted to any other University or Institution for the award of any
degree diploma / certificate or published any time before.

Date :

Place :

(M.SURESH)

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 ABSTRACT

To gain an understanding of the theories and concepts of Buyer

Behavior.to apply Buyer Behavior concepts to understand what customer do in
“the real world”.To improve skills in the research and analysis of customer
segments, demand, and market potential.To utilize knowledge of the Buyer
Behavior to enhance strategic decision-making.To analyze the Buying Behavior
of the customer when selecting a particular brand.

Bridging the gap between performance expectations of the customers and

Most of the people looking for Mileage in Bikes and Next preference are given to
the Style and Look of the Bike. In the case of HERO HONDA Bikes the
customer is considering Style & Look of the bike and next is Mileage.

Performance delivered to them will ensure customer delight. It is advised that

the customers are educated about the services and employees updated on the
expectations of the customers. Even the employees in the retail outlets have to be
well trained to help the customers.

The data for the study has been obtained from secondary sources i.e., from
various books and journals fact sheets of different bikes and websites. From this
it can be seen that 96.77% of HERO HONDA customers are satisfied with their
bikes.

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 ACKNOWLEDGEMENT

It is indeed a pleasant task to thank all the people who have contributed towards the
successful completion of this project. I express my sincere gratitude to Mr.GOPI NATH
ROY(Sales Manager)PHOENIX MOTORS, for his able supervision during the course
of the project. My sincere thank to our project guide MR SRIKANTH and Head of the
Department of MARKETING and other faculty members at VATHSALYA COLLEGE
OF BUSINESS MANAGEMENT.

I extremely thankful for one and all that helped me in directly and indirectly for
the successful completion of this project.

(M.SURESH)

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Chapter-1 : INTRODUCTION

Chapter-2 : COMPANY PROFILE

PHOENIX PROFILE

HERO HONDA PROFILE

Chapter-3 : OBJECTIVES OF THE STUDY

Chapter-4 : RESEARCH METHODOLOGY

Chapter-5 : DATA ANALYSIS

Chapter-6 : CONCLUSIONS & FINDINGS

Chapter-7 : SUGGESTIONS&RECOMMENDATIONS

Chapter-8 : APPENDIX

Chapter-9 : BIBLIOGRAPHY

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6
 INTRODUCTION

What is consumer behavior?

Activities people involved in when selecting , purchasing , and using products so as to

satisfy needs and desires. Consumer behavior involves the psychological process that

consumers go through in recognizing needs, finding ways to solve these needs, making

purchase decision (e.g., whether or not to purchase a product and, if so, which brad and

where), interpret information, make plans, and implement these plans (e.g., by engaging

in comparison shopping or actually purchasing a products).

SOURCES OF INFLUENCE ON THE CONSUMER

The consumer faces numerous of influence. Often, we take cultural influences for

granted, but they are significant. An American will usually not bargain with a

storeowner. This, however, is common practice in much of the world. Physical factors

Also influence our behavior. We are more likely to buy a soft drink when we are thirsty.

For example, and food manufacturers have found that it is more effective to advertise

their products on radio in the late afternoon when people are getting hungry. A person’s

self image will also tend to influence what he /she will buy –an upwardly mobile

manager may buy a flashy car to project an image of success. Social factors also

influence what the consumers buy—often, consumers seek to imitate others whom they

Admire, and may buy the same brands. The social environment can include both the

mainstream culture (e.g., Americans are more likely to have corn flakes/ham and eggs for

brake past than to have rice, which is preferred

in many Asian countries) and a sub culture (e.g., rap music often Appeals to a segment

within the population that seeks to distinguish itself from the main stream population).

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Thus sneaker manufacturers are eager to have there products worn by admired athletes.

Finally, consumer behavior is influences by learning – you try a hamburger and learn

that it satisfies your hunger and tastes good, and the next time you are hungry, you may

consider another hamburger.

DECISION-MAKING INVOLVES SEVERAL STEPS

Need recognition

Purchase evaluation
Information search

Evaluation of
Purchase decision
alternatives

Problem recognition -- you realize that something is not as it should be. Perhaps, for

example, your car is getting more difficult to start and is not accelerating well.

Information search—what are some alternative ways of solving the problem? You

might buy a new car, buy a used car, take your car in for repair, ride the bus, ride a taxi,

or ride a skateboard to work.

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A customer can obtain information from several sources:

 Personal sources: family, friends, neighbors etc

 Commercial sources: advertising, sales forces retailers, dealers,

packaging, point-of-sale displays.

 Public sources: news papers, radio, television, consumer organizations,

specialist magazines.

 Experimental sources: handling, examining, using the product

Internal and external search for information to make a decision

Internal search:

Scan memory.

External search:

Shopping,

Personal sources,

Public media,

Advertisements.

Evaluation of alternatives A skateboard is inexpensive, but may be ill-suited for

long distances and for rainy days.

Purchase stage, and sometimes a post-purchase stage (e.g., you return a product to
The store because you did not find it satisfactory). In reality, people may go back and

fourth between the stages. For example, a person may resume alternative identification

during while evaluating already known alternatives.

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The decision maker(s) have the power to determine issues such as:

Whether to buy?

Which product to buy?

Which brand to buy?

Where to buy it? And

When to buy?

Note, however, that the role of the decision maker is separate from that of the purchaser.

From the point of view of the marketer, this introduces some problems since the

purchaser can be targeted by point-of-purchase (POP) marketing effort that cannot be

aimed at the decision maker. Also note that the distinction between the purchaser and

decision maker be some what blurred: The decision maker may specify what kind of

product to buy, but not which brand, The purchaser may have to make a substitution if

the desired brand is not in stock, The purchaser may disregard institutions (by error or

deliberately).

BUYER BEHAVIOUR – CULTURAL FACTORS

Cultural factors have a significant impact on customer behavior. Cultural is the most

basic cause of a person’s wants and behavior. Growing up, children learn basic values,

Perception and wants from the family and other important group. Marketing are always

trying to spot “cultural shift” which might point to new products that might be wanted by

customer or to increased demand. For example, the cultural shift towards greater concern

about health and fitness has created opportunities (and now industries) servicing

customers who wish to buy:

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  Low calorie foods

 Health club memberships

 Exercise equipment

 Activity or health-related holidays etc.

Similarly the increased desire for “leisure time” has resulted in increased demand for

convenience product and service such as microwave ovens, ready meals and direct

marketing service businesses such as telephone banking and insurance.

Each culture contains “sub-cultures” – groups of people with share values. Sub-cultures

can include nationalities, religions, racial groups , or group of people sharing the same

geographical location. Sometimes a sub-culture will create a substantial and distinctive

market segment of its own.

BUYER BEHAVIOR – SOCIAL FACTORS:

Introduction A customer’s buying behavior is also influenced by social factor, such as

the group to which the customer belongs and social status. In a group, several individuals

may interact to influence the purchase decision. The typical roles in such a group

decision can be summarized as follows:

Initiator the people who first suggest or think of the idea of buying a particular product

or service.

Influencer A person whose view or advice influences the buying decision

Decider The individual with the power and/or financial authority to make the ultimate

choice regarding which product to buy.

Buyer The person who concludes the transaction.

User The person (persons) who actually uses the product or service.

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 INDIVIDUAL FACTORS THAT SHAPE BUYER BEHAVIOUR PROCESS

HIGH INVOLVEMENT Extensive problem-solving (EPS)

LOW INVOLVEMENT Limited problem solving (LPS)

Reutilized response behavior (RRB)

Decision-Making Process: High involvement products

Don’t

Buy

Extensive
Problem Extensive Purchase
Information
Recognition Weighting of Decision
Search
Alternatives

Buy

Don’t Buy  Problem Still Faced.

Buy  Post Purchase Evaluation.

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Decision-Making Process: Low Involvement Products

Problem Minimal Purchase

Recognition Information Decision

Search

Purchase Decision:  Post Purchase Consumption;

 Minimal Evaluation;

TYPES OF BUYING DECISION BEHAVIOUR

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Buying behavior differs for a tube of toothpaste, a tennis racket, an expensive camera,

and a new car. More complex decisions usually involved more buying participants and

more buyer deliberation.

Significant differences

Between brands

Few differences
Complex Variety-seeking
Between brands Buying behavior Buying behavior

Consumer buying behavior

Dissonance-reducing Habitual
is based on the degree of Buying behavior Buying behavior

buyer involvement and the of differences among brands.

Complex Buying Behavior:

Consumer buying behavior in situations characterized by high consumer involvement in a

purchase and significant perceived differences among brand.

Dissonance- Reducing Buying Behavior:

Consumer buying behavior in situations characterized by high involvement but few

perceived differences among brand.

Habitual Buying Behavior:

Consumer buying behavior in situations characterized low consumer involvement and

few significant perceived brand differences.

Variety-Seeking Buying Behavior:

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Customer buying behavior in situations characterized by low consumer involvement but

few significant perceived brand differences.

KEY POINTS

Know Your Customer:

 Create a customized model of your buyer’s behavior decision process

 Identify key buyer ‘(segments)’

 Identify key marketing influence opportunities (marketing levers)

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INTRODUCTION ABOUT PHOENIX

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DEALER PROFILE (PHOENIX MOTORS)

It was established in the year of 2003 March 21st. The owner name is CH.MADHU

MATHI; the firm is located at Habsiguda in Hyderabad.

It was started with few employees and very soon it has provided an opportunity to nearly

120 members. It is now with nearly 120 employees. Now the PHOENIX had two

authorized outlets in twin cities, One is at Ramanthapur and other one at Habsiguda.

PHOENIX is providing all kind of finance support to the customers, and the

customers are no need to go for the banks to get the loan finance. PHOENIX itself

provides bank executives to help the customers in vehicle loan. They are available in the

showroom to explain about the scheme to the customers. It will make the customers easy

in decision making process.The customers also get the good service from the PHOENIX.

Here all kind of the Hero-Honda bikes spare parts are available. After purchasing the

bike PHOENIX is providing after sales service.

SALES STRATEGY OF PHOENIX MOTORS:

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 Averagely they are selling 25 vehicles per day. PHOENIX motors PVT LTD. Is the

A.P s No.1 dealership in sales and other Activities? It is a QLAD (quality leader through

quality dealer). At PHOENIX Motor they gave the quality service to the customers why

because “The cost is long forgotten but the quality is remembered for ever”. They

treat quality has a...

Q  Quest for excellence

U Understanding customer’s needs

A Action to achieve customer’s appreciation

L Leadership determined to be a leader

I Involving all the people

T Team Spirit to work for a common goal

Y Yard sticks to measure programs.

PHOENIX has tie-up with Govt banks as SBI, PNB, SBH as well as private banks like

ICICI, HSBC, HDFC and so on. So it provides all type of finance facilities to the

Customers.

ADVERTISING STRATEGY OF PHOENIX MOTORS:

They are giving the Adds through Newspapers, Wall paintings, Hoardings and Field

staff. They are upgrading sales by introducing the schemes, Group Bookings, Institutional

sales and customer Door-to-Door activities.

THE MARKETED BIKES OF PHOENIX (All Hero Honda Model)

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CUSTOMER RELATIONSHIP:

To entertain the customers the showroom providing a customers huge having pool

game, Internet facility and television with home theatre system. They provide bike

maintenance programs on every week. According to other dealers PHOENIX motors in

first in sales and best in service. They treat customer, is the very important person at

PHOENIX motors customer satisfaction is their motto, why because, the well satisfied

customer is the best advertisement. They provide better value for the customers and as

well as employees also. At PHONIX motors the customer is the boss.

SOCIAL SERVICE ACTIVITIES

PHOENIX Motors participates in social service activities. The Phoenix motors

organize a BLOOD DONATION CAMP for the trust in every year. They motivated on

the customers to participated in this camp and also provide Certificate for the customers.

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 INTRODUCTION ABOUT HERO HONDA MOTORS

Hero Honda Motors Ltd.

"Desh ki Dhadkan"

Hero Honda is the World's No.1 two-wheeler manufacturing company having the

trust of more than 5 million customers. The company is a joint venture of Hero Cycles of

India and Honda Motor of Japan. Achiever, CBZ, CD Dawn, Karizma, Passion, Pleasure

and Splendor are its famous brands on Indian roads.

Quick Facts:

Munjal Brothers: Mr. Satyanand Munjal, Mr. Brijmohan Lall

Founder
Year of Establishment
Mission
Foundational Work
Industry
Business Group
Capitalization Ratio
Listings & its codes
No. of Sales Outlets
Joint Venture
Munjal and Mr. O. P. Munjal.
1984 (The Hero Group was established in 1956)
"Its our mission to strive for synergy between technology,
systems and human resources, to produce products and services
that meet the quality, performance and price aspirations of our
customers. While doing so, we maintain the highest standards of
ethics and societal responsibilities."
- Mr Brijmohan Lall Munjal, Chairman & MD
Before the establishment of the Hero Group in 1956, Munjal
Brothers use to manufacture bicycle components in the early
1940's.
Automotive - Two Wheelers
The Hero Group
Hero Group - 26%
Honda Motor Co., Ltd. - 26%
Others - 48% (listing)
BSE - Code: 500182
NSE - Code: HERO HONDA
Bloomberg - Code: HH@IN
1500+
The Hero Group (India) with Honda Motor Co., Ltd. (Japan)

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Registered & Corporate Office 34, Community Centre
Basant Lok, Vasant Vihar
New Delhi - 110057
Tel.: +(91)-(11)-26142451 - 59
Fax: +(91)-(11)-26143321 / 3198 / 1830; 26152453 / 2132
Work Station 69 Km Stone
New Delhi-Jaipur Highway
Daruhera - 121106, Haryana
Website www.herohonda.com
www.herogroup.com

Segment and Brands:

Products Brands

Two-Wheelers
Achiever CBZ* CBZ Xtreme CD Deluxe

CD100SS CD DAWN Glamour Hunk

Karizma Passion Plus* Pleasure Splendor

Splendor+* Super Splendor*

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BOARD OF DIRECTORS
Name of the Directors Category of Directorship
No.
1 Mr. Brijmohan Lall Munjal Chairman & Whole-time Director

2 Mr. Pawan Munjal Managing Director

3 Mr. Toshiaki Nakagawa Joint Managing Director

4 Mr. Yutaka Kudo Whole-time Director

5 Mr. Om Prakash Munjal Non-executive Director

6 Mr. Sunil Kant Munjal Non-executive Director

7 Mr. Tatsuhiro Oyama Non-executive Director

8 Mr. Masahiro Takedagawa Non-executive Director

9 Mr. Takashi Nagai Director

10 Mr. Narinder Nath Vohra Non-executive & Independent Director

11 Mr. Pradeep Dinodia Non-executive & Independent Director

12 Gen.(Retd.) Ved Prakash Malik Non-executive & Independent Director

13 Mr. Analjit Singh Non-executive & Independent Director

14 Dr. Pritam Singh Non-executive & Independent Director

15 Ms. Shobhana Bhartia Non-executive & Independent Director

16 Dr. Vijay Laxman Kelkar Non-executive & Independent Director

17 Mr. Sunil Bharti Mittal Non-executive & Independent Director

ACHIEVEMENTS:

Year Awards & Recognitions

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2008 NDTV Profit Car India & Bike India Awards - Bike Manufacturer of the year
Overdrive Magazine - Bike Manufacturer of the year
TNS Voice of the Customer Awards:
• No.1 executive motorcycle Splendor NXG
• No.1 standard motorcycle CD Deluxe

• No. premium motorcycle CBZ Xtreme

2007 The NDTV Profit Car India & Bike India Awards 2007 in the following category:
• Overall "Bike of the Year" - CBZ X-treme
• "Bike of the Year" - CBZ X-treme (up to 150 cc category)

• "Bike Technology of the Year" - Glamout PGM FI

"Auto Tech of the Year" - Glamout PGM FI by Overdrive Magazine

"Bike of the Year" - CBZ X-treme by Overdrive Magazine

Ranked CBZ X-treme " Bike of the Year" - by B S Motoring Magazine

“Most Trusted Company” , by TNS Voice of the Customer Awards 2006.

CD Deluxe rated as "No 1 standard motorcycle" by TNS Voice of the Customer Awards
2006.
2006 Adjudged 7th Top Indian Company by Wallstreet Journal Asia (Top Indian Two Wheeler
Company)

One of the 8 Indian companies to enter the Forbes top 200 list of world’s most reputed
companies.

No. 1 in automobile industry by TNS Corporate Social Responsibility Award

Best in its class awards for each category by TNS Total Customer Satisfaction Awards
2006:
• Splendor Plus (Executive)
• CD Deluxe (Entry)

• Pleasure (Gearless Scooters)

Splendor & Passion - Top two models in two wheeler category by ET Brand Equity

Survey 2006

Adjudged 7th Top Indian Company by Wall street Journal Asia (Top Indian Two Wheeler
Company)

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 Top Indian company in the Automobile - Two Wheeler sector by Dun & Bradstreet -
American Express Corporate Awards 2006

Hero Honda Splendor rated as India's most preferred two-wheeler brand at the Awaaz
Consumer Awards 2006.

Certificate of Export Excellence for outstanding export performance during 2003-04 for
two-wheeler & three- wheelers - Complete (Non SSI) by Engineering Export Promotion
Council

The NDTV Profit Car India & Bike India Awards 2006 in the following category:
• Bike Maker of the Year
• Bike of the Year - Achiever
• Bike of the Year - Achiever (up to 150 cc category)
• Bike of the Year - Glamour (up to 125 cc category)

• NDTV Viewers' Choice Award to Glamour in the bike category

2005 Awaaz Consumer Awards 2005 - India's most preferred two-wheeler brand by CNBC in
the 'Automobiles' category

Bike Maker of the Year Award by Overdrive Magazine

ICWAI National Award for Excellence (Second) in Cost Management 2004 in the private
sector category by ICWAI

10th Motilal Oswal Wealth Creator Award for as the most consistent wealth creator for the
period 1991-2005
2004 Winner of the Review 200 - Asia's Leading Companies Award (3rd Rank amongst the top
10 Indian companies)

GVC Level 1 (Highest Rating) by CRISIL for corporate Governance

Adjudged as the Best Value Creator - Large Size Companies 2003-04 by The Outlook
Money

Corporate Excellence Award 2004 by Indian Institute of Materials Management

Adjudged as the Organization with Innovative HR Practices by HT Power Jobs for HR

Excellence

ICSI National Award for Excellence in Corporate Governance 2004 by The Institute of
Company Secretaries of India
2003 Winner of the Review 200 - Asia 's Leading Companies Award (3rd Rank amongst the top
10 Indian companies)

Most Respected Company in Automobile Sector by Business World

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 Bike Maker of the Year by Overdrive Magazine
2002 Bike Maker of the Year by Overdrive Magazine

Winner of the Review 200 - Asia 's Leading Companies Award (4th Rank amongst the top
10 Indian companies)

Company of the Year of ET Awards for Corporate Excellence

Ranked 4th in 'Overall Best Managed Company' category, ranked 3rd in 'Best Financial
Management' and 'Best Operational Efficiency' category, ranked 6th in 'Overall Best
Investor Relations' category, by Asia money .

Highest Wealth Creating Company of the Year Award by the Money

GVC Level 1 (Highest Rating) by CRISIL for Corporate Governance

2001 Bike Maker of the Year by Overdrive Magazine

Winner of the Review 200 - Asia 's Leading Companies Award (9th Rank amongst the top
10 Indian Companies)

Winner of Three Leaves Award for showing Corporate Environment Responsibility in the
Automobile Sector by Centre for Science & Environment
1999 National Productivity Award for the Best Productivity Award in the category of
Automobile & Tractor presented by Vice President of India
1995 The Analyst Award 1995 presented to Hero Honda Motors Ltd. on being ranked 9th
amongst the most investor rewarding companies in India
1995 National Award for outstanding contribution to the Development of Indian Small Scale
Industry (NSIC Award - Presented by President of India)
1991 Economic Times-Harvard Business School Award for Corporate Performance to Hero
Honda Motors Ltd.

SALES PERFORMANCE HERO HONDA ONCE AGAIN OUTPERFORMS

INDUSTRY ON GROWTH IN Q2 (FY 2007-2008)

Impressive performance across segments turnover of Rs. 2391 Crores in Q2 Ebidta

of 12.39%

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 Aug'06 Aug'07 FY 06-07 FY 07-08

Total Sales 2,15,076 2,40,875 12,82,860 12,63,254

MISSION STATEMENT

“We, at Hero Honda, are continuously striving for synergy between technology,

systems, and human resources to products and services that meet the quality,

performance, and price aspirations of our customers. While doing so, we maintain the

highest standards of ethics and societal responsibilities, constantly innovate products and

processes, and develop teams that keep the momentum going to take the company to

excellence in the new millennium”.

EXECUTIVE SUMMARY
The venerated patriarch and visionary of the Hero Group, Mr. Brijmohan Lall Munjal, is

A first generation entrepreneur who started very small and through sheer hard work and

perseverance has today made his two wheeler venture the World’s No.1 Two Wheeler

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company, a distinction hitherto held by a Chinese company. That is not all the

motorcycle “Splendor” which was launched in 1995 and sold 791,000 units in 2001 has

emerged as the largest selling motorcycle model in the world. The Hero comprises many

backward integrated two wheeler related companies, of which the Hero Cycle and Hero

Honda constitute the major players. He produces 5.7 million bicycles and over 1.42

million two wheeler annually. Also, Hero Cycle boasts of one of the highest labour

productivity rates in the world.

Hero cycle has been the largest manufacturer of bicycles in the world since 1984 and

figures in the Guinness Book of World Recorders. These honors have come through

sheer discipline, which according to Mr.Munjal is the refining fire by which talents

become ability. According to him ambition, confidence, enthusiasm and success are

produced by coueage, faith and hard work.

No wonder, the leading company of the group, Hero Honda, declared a whopping 850%

divided for the financial year ended 31st March 2008. It grew over 500% in five years.

Other highlights are:

For the year 2007-08: Volume up by 38%, net profit soars by 88%, total turnover up by

42% Achieves a high 48% motorcycle market share and 33% two wheeler market share.

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Over the last five years, the company’s total turnover grows by a whopping 580% and

Profit after Tax by 919%

Total Turnover of Rs.45, 394,900,000 (EURO 1,043,560,920)

Profit after Tax Rs.4, 629, 300,000 (EURO 106,420,690)

Hero Honda has surpassed by leaps and bounds the other competitors in this space who

are in joint venture with giants like Kawasaki, Yamaha, and Suzuki etc. Hero Honda is

26% owned by Honda of Japan and the balance is held by the Munjals and Indian

public. The secret of the success is the brilliant management of dealership. In fact, his

rivals attribute this phenomenal success to his excellent channel management skills. Hero

Honda has a reputation off being the most fuel-efficient and the largest selling Indian

motorcycle. It commitment of providing the customer with excellence is self-evident. A

rich background of producing high value products at a reasonable price led the world’s

largest manufacturer of motorcycle to collaborate with the world’s bicycle manufacturer.

It was this affinity in working cultures of Honda Motor Company of Japan and the Hero

Group that resulted in the setting up of Hero Honda Motors Ltd. A relationship so

harmonious that Hero Honda has managed to achieve indigenization of over 95 percent, a

Honda record worldwide. Technical promotions and excellent marketing helped Hero

Honda establish itself as an intelligent purchase.

It unique feature like fule conservation, safety riding courses and mobile workshops

helped the group reach in the interiors of the country Finance services helped acilitate

purchase, as did an efficient dealer network across the country. Well-entrenched in the

domestic market, Hero Honda Motors Ltd. Turned its attention overseas, and export have

been steadily on the rise.Over the years, the Company has received its share of accolades,

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including the National Productivity Council’s Award (1990-91), AND THE Economic

Time – Harvard Business School Association of India Award, against 200 contenders.

ADDRESS

HERO HONDA MOTERS LIMITED

34, Community Center,

Basant Lok, Vasant Vihar,

New Delhi – 110 057

Phones: 6142451, 6144121

Cable: HONDA BYKE

Fax: 6143321, 6143198, 6141830, 6152453, 6152132

URL: www.herohonda.com

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OBJECTIVES OF STUDY

36
 To gain an understanding of the theories and concepts of Buyer Behavior.

 To apply Buyer Behavior concepts to understand what customer do in “the

real world”.

 To improve skills in the research and analysis of customer segments,

demand, and market potential.

 To utilize knowledge of the Buyer Behavior to enhance strategic decision-

making.

 To analyze the Buying Behavior of the customer when selecting a

particular brand.

37
38
 INTRODUCTION TO MARKETING RESEARCH

Marketing Research is often needed to ensure that we produce what customers

really want and not what we think they want.

Several tools are available to the market researcher:

Surveys: Surveys are useful for getting a great deal of specific information. Surveys can

Contain open-ended questions (e.g., “In which city and state were you born? ________”)

Or closed-ended questions, where the respondent is asked to select answers from a brief

list (e.g., “ _______Male_______Felmale.”) Open ended questions have the advantage

that the respondent is not limited to the options listed, and that the respondent is not being

influenced by seeing a list of responses. However, respondents often skip open-ended

questions, and coding them can be quite a challenge. In general, for surveys to yield

meaningful responses, sample size of over 100 is usually required because precision is

essential.

Focus groups:

Focus groups are useful when the marketer wants to launch a new

product or modify an existing one. A focus group usually involves having some 8-12

people come together in a room to discuss their consumption preferences and

experiences. The group is usually led by a moderator, who will start out talking broadly

to the product without mentioning the product itself.

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Personal interviews:

It involve in-depth questioning of an individual about his or her interest in or experiences

with a product . The benefit here is that we can get really into depth (when the respondent

says something interesting, we can ask him or her to elaborate), but this method of

research is costly and can be extremely vulnerable to interviewer bias.

Projective techniques: These are used when a consumer may feel embarrassed to admit

to certain opinions, feelings, or preferences. For example , many older executives may

not be comfortable admitting to being intimidated by computers. It has been found that in

such cases, people will tend to respond more openly about “someone else”. Thus, we may

ask them to explain reasons why a friend has not yet bought a computer, or to tell a story

about a person in a picture who is or is not using a product . The main problem with this

method is that it is difficult to analyze responses.

Observation of consumers: It is often a powerful tool. Looking at how consumers select

products may yield insights into how they make decisions and what they look for. For

example, some American manufacturers were concerned about low sales of their products

in Japan. Observing Japanese consumers, it was found that many of these Japanese

Consumers scrutinized packages looking for a name of a major manufacturer- the product

specific-brands that are common in the U.S. (e.g., Tide) were not impressive to the

Japanese, who wanted a name of a major firm like Mitsubishi or Proctor & Gamble.

Observation may help us determine how much time consumer spends comparing prices,

or whether nutritional labels are being consulted.

Physiological measures: These are occasionally used to examine consumer response.

For example, advertisers may want to measure a consumer’s level of arousal during

various parts of an advertisement.

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Some cautions should be needed in marketing research:

First, In general, research should only be commissioned when it is worth the cost.

Thus, research should normally be useful in making specific decisions.

 What size should the product be?

 Should the product be launched?

 Should we charge?

Secondly, Marketing research can be, and often is, abused. Managers frequently have

their own “AGENDAS” (e.g., they either would like a product to be launched or would

prefer that it not be launched so that the firm will have more left over to tackle their

favorite products). Often, a way to get your way is to demonstrate through “Objective”

research that your opinions make economic sense.

41
NEED AND IMPORTANCE

Indian consumers face an increasingly complex and diverse market place. One in

six Indians say that they have been the victim of a major consumer fraud or swindle at

some point , and three in four report having a “Bad Buying” experience. Consumers are

vulnerable to unfair or deceptive business practices and potentially to fraud, for a variety

of reasons that range from the way business conduct themselves to their own behaviors,

attitudes and levels of knowledge. It is a well-known fact that most of the profits that a

company earns is from a very small segment of its customer base. Retaining this base

requires huge amount of effort from the company in terms of services, benefits etc.

especially in the case of the bikes industry, the problem of customer retention is huge.

The study emerges from the fact that a bike, which used to be a luxury around 3 to 4

years ago, has slowly changed status and become a necessity. India has witnessed a sharp

increase in the number of bike users over the past 3 to 4 years. India had millions of bike

users as compare with earlier. Moreover,

consumers are being lured day in and day out by the fabulous offers provide by the bike

companies (actually only on the face of it) which distracts them and diverts them into

thinking wrongly and suffering at a later stage.

42
 AIM OF THE STUDY

The study attempts to analyze the needs and expectations of consumers

from their service providers and how companies are able to match up them. It takes a

look at the consumer buying process and strategies followed by the companies to attract

consumers and to retain them in the long run so that they do not change to any other

company. During the course of the market study, the decision determinants of the

customer are elicited from sample.

43
 SCOPE OF THE STUDY

The study was undertaken in the twin cities of HYDERABAD and SECUNDERABAD

and was limited to 62 users of HERO HONDA Bikes within these two cities. It is

confined to the collection, analysis, and interpretation of the consumer decision process

and the strategies adopted by the companies to catch the sales from them.

44
 SOURCES OF DATA

The data will be collected from both primary and secondary sources.

Primary Sources: - Primary data will be extracting and summarized through the

distribution of questionnaires.

Secondary Sources:- Secondary data would involve the review of existing literature,

information secured from the internet and the study of information given by the

organization. The marketing researcher should, first explore the Secondary data and if

needed he should go for primary data.

• PRIMARY DATA

Primary data gathered for a specific purpose of for specific research project .This is the

data collected for the first time, gathered for a specific purpose of a project.

Primary data can be collected in four ways.

1. Observation Research

2. Focus - group Research

3. Survey Research

4. Experimental Research

Here survey method has been selected for research. It is used to learn about People’s

knowledge, beliefs, preference and satisfaction etc, and to measure the Magnitude in

Research sample.

45
 LIMITATIONS OF THE STUDY

1. Since the customer attitudes keep on changing the findings may not be applicable in all

the cases.

2. The size of the sample being relatively small, some of the findings may slightly vary

with those of the larger universe.

3. The study would be confined to the users of the bikes in the twin cities of Hyd and

Sec-bad only.

4. The study would be confined to the information willingly shared by the respondents

and the staff of various bikes organizations.

46
 METHODOLOGY OF THE STUDY

The methodology adopted for the study was that of the field survey method. A structured

Questionnaire was administered to a total of 62 HERO HONDA Bike users in the areas

Hyderabad and Secunderabad. The structured questionnaire was designed to elicit

information on demographic aspects of the respondents. Further, the opinion of the users

was obtained with regard to the promotional strategies being followed by the bike

companies. The demographic aspects include age, education, occupation and income. The

questionnaire contained both open-ended as well as close-ended questions and also

extracted some personal information from the respondents.

47
48
OCCUPATION OF RECIDENTS

A Sample of 62 Consumers of HERO HONDA Vehicle was surveyed. They

were asked questions regarding their Buying decision process. Out of 62 People

surveyed, 19 were Job holders, 12 were Students, and 29 were Business men, remaining

people were others.

STUDENTS JOB HOLDERS BUSSINESS MENS OTHERS

12 19 29 02

OTHERS
3% STUDENTS
19%

BUSSINESS MENS
47%

JOB HOLDERS
31%

A high Percentage of the individuals surveyed belong to Businessmen. Next in line are

the Jobholders.

49
DEMOGRAPHIC PROFILE

Customer buying decision process also depends upon the Age of the Customers. For

Example the age between18-25 is generally like bikes, which are very stylish.

Age between 26-40are generally like bikes which gives more mileage and which are very

Simple to look. And the age between 40&above were like the bikes which are easy to

Ride.

18-25 YEARS 26-30 YEARS 31-40YEARS 41&ABOVE

27 21 11 03

AGE OF THE RESPONDENTS

30

25

20

15

10

0
18-25 YEARS 26-30 YEARS 31-40YEARS 41&ABOVE

SOURCE OF AWARENESS

50
The stage of buyer decision process in which the consumer is aroused to search for more

information; the consumer may simply have heightened attention or may go into active

information search. The consumer can obtain the information from any of several

sources. Some of those are Paper Ads, Television Ads, Friends & Family, and any others.

The media which is selected by the respondent is:

TELIVISION ADS PAPER ADS FRIENDS OTHERS

09 03 44 06

TELIVISION
OTHERS ADS

PAPER ADS

FRIENDS

From the above chart it can be seen that even though the effect of advertising & sales

promotion is spreading, word of mouth referrals still play a vital role in spreading

Product /service awareness.

THE MEDIA WHICH IS MORE INFLUENCED ON PURCHASING

51
DECISION: - The consumer can obtain the information from various ways. Some media

is more influences on customer’s decision process. This will lead to take the decision on

particular product.

FRIENDS TELIVISION ADS PAPER ADS OTHERS

35 18 03 06

OTHERS
10%

PAPER ADS
5%

FRIENDS
TELIVISION ADS
56%
29%

It can be seen from this, that although advertisements and other sales promotional

strategies play an important role in creating awareness, word of mouth referrals seem to

be the key to any long standing business association. Word of mouth referrals play an

important part in expanding the customer base. These people are early adopters.

RATING OF BIKE CHARACTERISTICS

52
When customer wants a particular product he will try to get the data from various sources

about the product. In the huge market there is product with various company names and

brand names. So that the customer will find out the various characteristics about the

product. And based on this the customer will take decision.

A product may have various characteristics like a bike will have the characteristics
♦ Mileage
♦ Style & Look
♦ Price
♦ Brand Image
♦ Technology
♦ After Sales Services
Based on the customer need the customer will give the more importance to the

Particular characteristics.

Mileage Style & Price Brand Technology After Sales Service

Look Image
31 17 02 06 05 01

After Sales
Technology Service
Brand Image
Price
Mileage

Style & Look

PREVIOUS PURCHASE ( BRAND ) OF THE RESPONDENT

A sample of 62 customers of Hero Honda vehicle was surveyed. They were asked

53
some questions regarding their previous purchase.

Out of 62 surveyed ,38 were No purchase of any bikes, 11 people were HERO HONDA,

03 were TVS, 01 people were YAMAHA, 02 people were BAJAJ, and the remaining
people were have other brands.

HERO HONDA YAMAHA TVS BAJAJ OTHERS NO PURCHASE

11 01 03 02 07 38

40
35
30
25
20
15
10
5
0
HA

E
J
DA

S
S

JA

AS
ER
TV
A
N

BA

CH
M
O

TH
YA
H

R
O
RO

PU
HE

NO

From the above most of the people don’t have any previous purchase of vehicles. And

next in line is HERO HONDA previously purchased customers.

THE PRIMARY REASON THAT HAS MADE THE RESPONDENT TO

CHOUSE THIS BIKE ONLY

The most prompted product characteristic of the customer in decision process on the

54
following alternatives.

STYLE LOOK 17
MILEAGE 34
TECHNOLOGY 05
AFTER SALES SERVICES 01
PRICE 02
BRAND IMAGE 06

35 STYLE LOOK
30
MILEAGE
25
TECHNOLOGY
20

15 AFTER SALES
SERVICES
10 PRICE
5
BRAND IMAGE
0

When the customer wanted to purchase the bike he will consider all the characteristics of

the bikes. In the case of HERO HONDA bikes the customer is considering Mileage of the

bike and next in line is Style & Look.

IS MILEAGE A BIG ISSUE FOR THE RESPONDENT

A sample of 62 customers of Hero Honda vehicle was surveyed. Out of 62 surveyed,

most of the people were preferred Mileage as a major factor. and the remaining people,

like students were preferred style & look only and then go for Mileage.

55
 YES 51

NO 11

60

50

40

YES
30
NO

20

10

From the above, Most of the people were preferred Mileage as a major factor.

IS HERO HONDA’S BIKE HAS A “FIT IN” LOOK

A sample of 62 customers of Hero Honda vehicle was surveyed. Out of 62 surveyed,

most of the people were attracted with the Style & Look of the HERO HONDA’S

bikes/products.

56
YES 61

NO 01

70

60

50

40
YES
NO
30

20

10

From the above, Most of the people were satisfied regarding style & look of the

HERO HONDA’S bike/product.

WHAT IS THE SPECIAL FEATURE IN HERO HONDA’S BIKE, WHICH

CAN’T FOUND IN ANY OTHERS

A sample of 62 customers of Hero Honda vehicle was surveyed. Out of 62 surveyed,

most of the people were agreed with the updating Technology of the HERO HONDA

bikes/products...

57
STYLE LOOK MILEAGE TECHNOLOGY CAN’T SAY OTHERS
11 19 28 04 00

OTHERS
0%
CAN’T SAY STYLE LOOK
6% 18%

TECHNOLOGY
45%
MILEAGE
31%

From the above graph maximum people are accepted “Technology” as the special

feature. And next in line is “Mileage”.

INFLUENCES OF THE SUGGESTION ON PURCHASE DECISION

Before purchase the product consumer will try to get more information from their

friends and relatives when the customer likes to take the bike, he generally go to his

friends, who had the same or other bike to know about the bike. Some people go for his

family to select the bike. Some people will go for local mechanic to know about various

bikes and their performance, Some will directly go for showroom and get the details from

the Showroom person and he will take the suggestion which bike is suitable for him.

58
The respondent will take the suggestions from various people:

FAMILY FRIENDS LOCAL MECHANIC SHOWROOM PERSONNEL

14 32 14 02

SHOWROOM
PERSONNEL
3% FAMILY
LOCAL MECHANIC 23%
23%

FRIENDS
51%

From this it can be seen that most of the customers were taking the suggestions from the

Friends only and next in line come to the Local mechanic as well as Family.

DECISION MAKING

After collecting the information the consumer will evaluate the information. after

evaluating the information he will go for purchase decision . the customer will take the

decision is own/others. Generally, when the customer is a student, the parent may take

the final decision.

The customer will take the decision on their own:

YES 60

59
NO 02

100% NO

90%

80%

70%

60%

50% Y ES

40%

30%

20%

10%

0%

YES NO

From this it can be seen that 97.7% of the customers are taking decision on their own,

In some situations like when the customer is student then their parents may in decision

making process.

PRODUCT PERFORMANCE EVALUATION

After evaluating all the information the consumer will to purchase the product.

After purchasing the product only he get to know about the performance of the product.

Before purchasing the product he may expect something from the product after buying

the product he will compare whether the product is meeting his expectations or not.

The customer’s purchased product performance met their

expectations:

60
 YES 60

NO 02

100% NO

90%

80%

70%

60%

50%
YES

40%

30%

20%

10%

0%

YES NO

From this it can be seen that 97.7% of the customers are satisfied with the

HERO HONDA products.

.

SATISFACTION LEVEL OF THE CUSTOMER DECISION

After purchasing the product, the consumer will be satisfied or dissatisfied and

will engage in post purchase behavior of interest to the marketer. The customer is

satisfied or dissatisfied is lies in the relationship between the customer’s expectations and

the product’s perceived performance. If the product falls short of expectations, the

consumer is disappointed; if it meets expectations, the consumer is satisfied; if it exceeds

expectations, the consumer is delighted.

61
The number of respondents who are satisfied with their decision :

YES 60
NO 02

100% NO

90%

80%

70%

60%

50%
YES

40%

30%

20%

10%

0%

YES NO

From this it can be seen that 97.7% of the customers of the HERO HONDA bikes were

satisfied with their decision. Only remaining of the customers were not satisfied with

their decision.

CUSTOMER SUGGESTION LEVEL ON HERO HONDA

When the product performance will reach the customer’s expectations, he

satisfied. when he satisfied with the product he will suggest the same product to others

also. In case of HERO HONDA the customer is satisfied with the particular bike which

he had, even though he don’t want to suggest the same bike to others, Because there is a

new bike/new model in the market. Generally people often will see for latest models in

the market.

62
The customers who are ready to suggest the same product to others :

60
YES
NO 02

100% NO

90%

80%

70%

60%

50%
YES

40%

30%

20%

10%

0%

YES NO

From this it can be seen that 97.7%. Of the customers are ready to suggest the
bike/product to the others. Rest of the customers is also satisfied with their
bikes/products. But they are not ready to suggest, because of many new models are
entered in the market.

63
 CONCLUSIONS & FINDINGS

 Even though the effect of advertising and sales promotion is spreading, word of

mouth referrals still play a vital role in spreading product / service awareness.

 Although advertisements and other sales promotional strategies play an

64
 important role in creating awareness, word of mouth referrals seem to be the key

to any long standing business association. Word of mouth referrals play an

important part in expanding the customer base.

 Most of the people looking for Mileage in Bikes and Next preference are given

to the Style and Look of the Bike.

 In the case of HERO HONDA Bikes the customer is considering Style & Look

of the bike and next is Mileage.

 Most of the customer is taking the suggestions from the Friends only. Word Of

Mouth is playing a vital role.

 From this it can be seen that 96.77% of HERO HONDA customers are satisfied

with their bikes.

Nearly, 97% of the customers are ready to suggest the Bike to the others. Rest of the 3%

of the customers is not suggesting because of new models are entered in the market.

65
 s

SUGGESTIONS & RECOMMENDATIONS

 Bridging the gap between performance expectations of the customers and

66
 performance delivered to them will ensure customer delight. It is advised that the

customers are educated about the services and employees updated on the

expectations of the customers. Even the employees in the retail outlets have to be

well trained to help the customers.

 Television and Paper advertisements have to be released to cover a wide base of

all the segments and created awareness among the potential customers.

 The advertising strategies and marketing strategies should be formulated keeping

in view the profile and perception of the Bike users in order to optimize the

return on investment on the marketing activities.

 Periodic surveys to gauge consumer perception have to be undertaken to gain the

first hand perceptual image about the service and also to target the users better.

 Loyalty programs could also be introduced to reward to retain the customers.

67
CUSTOMER BUYINGBEHAVIOR_ QUESTIONNAIRE

1.Personal Information of the Customer:

a)Name :

68
 b)Age :

c)Sex :

d)Occupation :

e)Monthly Income :

f)Bike Model :

g)Contact No :

2.which media you select to gather the information?

a)Television Ads [ ] b)Paper Ads [ ] c)Friends [ ] d)Others [ ]

3.which of the following is more influenced on your decision?

a)Television Ads [ ] b)Paper Ads [ ] c)Friends [ ] d)Others [ ]

4.what are the characteristics you consider while selecting the bike? Rate
them?

RATING 1 2 3 4 5 6
Style Look
Mileage
Brand Image
Technology
Price
After Sales Services

5. What is your previous purchase? If you purchase any bike in the past?

a)HERO HONDA [ ] b) YAMAHA [ ] c) TVS [ ] d) BAJAJ[ ] e)

OTHERS [ ] f) NO PURCHASE [ ]

6.What was the primary reason that has made you to choose this bike only?

69
a)Style Look [ ] b)Mileage [ ] c) Price [ ] d) Brand Image[ ]

e) After Sales Service [ ] f) Technology [ ]

7. Is mileage a big issue for you ?

a) YES [ ] b)NO [ ]

8. Is this bike has a “fit in” look ?

a) YES [ ] b)NO [ ]

9. What is the special feature in this bike, which can’t be found in any

other ?

a) Style Look [ ] b) Mileage [ ] c) Technology [ ]

d) Can’t Say [ ] e) Others [ ]

10. From whom do you wish to take suggestions ?

a) Family [ ] b) Friends [ ] c) Local Mechanic [ ]

d) Showroom Personnel [ ]

11. Will you take your decision on your own?

a) YES [ ] b)NO [ ]

12. Is your selected product (bike) performance met your expectations?

a) YES [ ] b)NO [ ]

13. Do you satisfied with your decision?

a) YES [ ] b)NO [ ]

14. Finally, would you like to suggest the same product to others?

a) YES [ ] b)NO [ ]

70
Date :

Place : Respondent’s Signature

71
REFERENCES:-

PRINCIPLES OF MARKETING - Philip Kotler.

MARKETING RESEARCH - G.C.Beri.

72
CONSUMER BEHAVIOR - Loudon & Della Bitta.

SERVICE MARKETING - M.K.Rampal.

WEBSITES:-

www.google.com

www.prenhall.com\kotler

www.udel.edu/alex/chapt6.html

www.herohonda.com/site

www.auto.indiamart.com/hero-honda/

73