“A STUDY ON KEY

BUYING FACTORS THAT INFLUENCE

TOWARDS PURCHASE OF TWO–
WHEELER IN URBAN AREAS,

BY GROUP 5 (JULY 2010-12)-

ABHISHEK AGARWAL

ADITYA ALOK

CAROL KARIAN

SWATI SINHA

ALLIANCE UNIVERSITY
MASTER OF BUSINESS ADMINISTRATION
CHANDAPURA, ANEKAL
BANGALORE
 CONTENTS
CHAPTER NO.
1 EXECUTIVE SUMMARY

2 PROFILE OF THE STUDY

INTRODUCTION

3 INDUSTRY ANALYSIS
 Porter’s Five Forces Model
 Growth Rate
 Financial Highlights

4 COMPANY ANALYSIS
 SWOT Analysis
 Market Structure
 Market Share

5 RESEARCH DESIGN

6 DATA ANALYSIS

7 FINDINGS OF THE STUDY

8 SUGGESTIONS

BIBLIOGRAPHY

ANNEXURE

Page 1 of 41
 CHAPTER- 1

EXECUTIVE SUMMARY
This report deals with the two wheeler industry in India who is major player in
the automobile sector in India. This study is conducted to find out the key
buying factors that influence the customers towards the buying of two-wheeler
in urban areas. It deals with how the customers recognises and rates different
two-wheeler in a competitive scenario.

Page 2 of 41
The project named “The key buying factors that influence the customers
towards the purchase of two- wheeler in urban areas” is undertaken to
analyse the buying behaviour of customers in two-wheeler sector and how
they get along with the current trend and scenario in two-wheeler sectors.

This survey may help the two wheeler sector to evaluate the product and the
services they deliver. This may act as tool for the companies to know their
opportunities and threats in the market. Expectations from this survey are:

1) To learn consumer attitude towards two-wheeler market.

2) Know current trends in two wheeler market.
3) Customise the two wheeler sector as per customer needs.

This project is based on market survey being conducted on general

customers and thereby analysing and recording their views on present two-
wheeler markets.

PROFILE OF THE STUDY

TITLE:

“A study on key buying factors that influence towards purchase of two–

wheeler in urban areas, Bangalore”

PROBLEM DEFINITION:

Page 3 of 41
This study was conducted to find out the key buying factors that influence the
customers towards the buying of two-wheeler in urban areas. It deals with
how the customers recognises and rates different two-wheeler in a
competitive scenario.

STATEMENT OF PROBLEM:

With the changing trends and too many players in two-wheelers market, it’s
difficult for the customers to make a right decision regarding their choices
which may lead to dissatisfaction among them. Hence, the title study on key
buying factors that influence towards purchase of two–wheeler in urban areas
was selected as the subject of study.

OBJECTIVE OF THE STUDY:

 To understand the purchasing strategies of scooters and motor bikes

by customer.
 To gain valuable insight into the two wheeler sector.
 To study the current trends in two wheeler sector.

Page 4 of 41
 CHAPTER- 2

INTRODUCTION
India is the second largest producer of two-wheelers in the world. In the last
few years, the Indian two-wheeler industry has seen spectacular growth. The
country stands next to China and Japan in terms of production and sales
respectively. Majority of Indians, especially the youngsters prefer motorbikes
rather than cars. Capturing a large share in the two-wheeler industry, bikes
and scooters cover a major segment. Bikes are considered to be the favourite
among the youth generation, as they help in easy communication. Large

Page 5 of 41
varieties of two-wheelers are available in the market, known for their latest
technology and enhanced mileage. Indian bikes, scooters and mopeds
represent style and class for both men and women in India. 

Benefits of two wheelers

Two-wheelers are the most popular and highly sought out medium of
transport in India. The trend of owning two-wheelers is due to its:
 Economical price
 Safety
 Fuel-efficient
 Comfort level

However, few Indian bike enthusiasts prefer high performance imported bikes.
Some of the most popular high-speed bikes are Suzuki Hayabusa, Kawasaki
Ninja, Suzuki Zeus, Hero Honda Karizma, Bajaj Pulsar and Honda Unicorn.
These super bikes are specially designed for those who have a zeal for
speedy drive.

Page 6 of 41
 CHAPTER- 3
INDUSTRY ANALYSIS-
Financial Services

Page 7 of 41
 PORTER’S FIVE FACTOR MODEL

1) Rivalry among Existing Firms:

Previously, there were only a handful of two-wheeler models available in
the country. Currently, India is the second largest producer of two-
wheelers in the world. It stands next only to China and Japan in terms of
the number of two-wheelers produced and the sales of two-wheelers
respectively. The introduction of scooters created another segment for
people such as women and teenagers who could not get used to driving
either motorcycles or gearless scooters. Many companies such as Kinetc,
TVS, and Hero also started manufacturing mopeds that proved immensely
popular with people who wanted a simple riding machine. The change in
the governmental policy owning to pollution control norms and the Kyoto
agreement saw the phasing out of two stroke two-wheelers from
production. Some of the major players in the Indian motorcycles market

Page 8 of 41
 are Hero Honda CBZ, Bajaj Pulsar, TVS and Apache. Other brands
include Splendor, Passion, Fiero, Victor, Star City, Boxer, CD Dawn,
Karizma, Caliber, etc. Having classified the motorcycle brands into
economy, executive, and premium segments, Bajaj stands as the leader in
the economy segment, Hero Honda leads in the executive segment, and
there is a competition in the premium segment between Hero Honda and
Bajaj.

2) Threat of Substitute:
There is no perfect substitute to this industry. Also, if there is any
substitute to a two-wheeler, Bajaj has presence in it. Cars like Tata Nano,
which again are a mode of transport could be a threat of substitute.
3) Threat of New Entrants:

Mahindra & Mahindra (M&M), India’s largest tractor and utility vehicle
maker is buying the business assets of loss-making scooter maker Kinetic
Motor Company for Rs 110 crore to gain an entry into the two-wheeler
market.

4) Bargaining Power of Suppliers:

Suppliers of auto components are fragmented and are extremely critical

for this industry since most of the component work is outsourced. Proper
supply chain management is a costly yet critical need.

5) Bargaining Power of Buyers:

Buyers in automobile market have more choice to choose from and the
increasing competition is driving the bargaining power of customers uphill.
With more models to choose from in almost all categories, the market
forces have empowered the buyers to a large extent.

ANNUAL GROWTH RATE

Page 9 of 41
TREND IN TWO-WHEELERS SALES VOLUME BY CATEGORY

Two wheelers’ sales in India are spread across three main product categories:
motorcycles, scooters, and mopeds. While in the previous decade, scooters
were the largest selling product category, in the current one, consumer
preferences appear to have shifted decisively in favor of motorcycles, which
now account for over 80% of total two wheelers sales in India. The rural
market, a key demand driver for the two wheelers industry as a whole, has
been a significant contributor to the shift in preference towards motorcycles.
With their longer wheel base and better mileage, motorcycles enjoy
preference over scooters, especially in country-sides, as they ride well over
long distances and uneven roads, besides being perceived to have a superior
style quotient. However, given the practicality of scooters, especially in urban
areas, their demand is likely to be sustained. In fact, while motorcycle sales
volumes in 2007-08 and 2008-09 remained lower than the levels achieved in
2006-07, scooter volumes have maintained consistent volume growth over the
last two years.

FINANCIAL HIGHLIGHTS
Two Wheelers Sales of the Major Players for the year 2009 and 2010:

Page 10 of 41
 600000

500000

400000

300000

Two Wheeler Sales Dec-09

200000 Two Wheeler Sales Dec-10

100000

0
a
ut
o
or
s
or
s ki
ond A ot ot uzu 2W
H jaj S ra
ro Ba SM ah
M
ind
He TV m ah
Ya M

Hero Honda the world’s no. 1 two wheelers company has posted massive
growth of 33.33% in the month of December 2010 compared to December
2009. Bajaj Auto country’s second largest two wheeler maker of India has
reported growth of mere 10.80% in the month of December 2010. The
company has sold 2,43,675 units of motorcycle in the month of December
2010 compared to 2,19,920 units in the month of December 2009. The
company has posted single digit growth in export this month after posting
declining sales last month. The company exported 95,388 units in the month
of December 2010 up by 4.40% compared to 91,369 units in the month of
December 2009. TVS Motors has posted growth of 40.65% in the month of
December 2010. Yamaha Motors reported month on month basis sales
growth of 14.94%.Suzuki Motorcycle India reported massive growth of
77.59% and Mahindra two wheeler reported growth of 82.59% in the month of
December 2010 compared to December 2009.

Page 11 of 41
 CHAPTER- 4
INDUSTRY SWOT ANALYSIS

SWOT Analysis
 
Strength
Page 12 of 41
1) Skilled low cost manpower.
2) Decentralised Management.
3) Total in-house manufacturing and testing with the latest precision
instruments.
4) A Technocrat MD, in touch with new technology and fast adaptation of
this to the industry.
5) Supplier to one of the largest Two-Wheeler manufacturers in the world
has resulted in exposure to good manufacturing & functional quality
systems. 
6) Machines of International std.
7) Capital Reserves.
8) Strong Lineage with last 29 years experience in the field of Ignition Coils. 

Weaknesses
1) Low thrust marketing. 
2) Over dependence on 2 key players. 
3) Low in exports.
Opportunities
1) Price war in the market is putting pressure on O.E.Ms.in      cutting costs.
     Our QCD advantage namely-
          -High Quality Machinery,
          -Lean Organisation Structure 
          -Quality Systems in place, 
     >> mean an ability to contribute to the success of our      customers
2) Technically driven management adds value to conventional      processes
and products.
3) Globally tuned organisation open for Foreign Collaborations.
Threats
1) Foreign players. 
2) Slow growth in domestic auto sales. 
3) Government policies.

MARKET STRUCTURE

Page 13 of 41
MARKET SHARE

Page 14 of 41
Page 15 of 41
 CHAPTER- 5
RESEARCH DESIGN

RESEARCH DESIGN:

Page 16 of 41
  Descriptive Research Design - The objective of descriptive research is
to describe things, such as the market potential for a product or the
demographics and attitudes of consumers who buy the product.

METHODS OF DATA COLLECTION:

While deciding about the method of data collection to be used for study, the
researcher should keep in mind two types of data i.e. primary data and
secondary data.

Primary data:

 Individual pre and post-programs feedback forms through

Questionnaires

Secondary method:

 Websites
 Text books
 Journals and magazines
 Service centres
 Document.

LIMITATIONS OF THE STUDY:

 A depth study might not be possible due to time constraint

 Study is limited to particular locality or area
 The study cannot be authenticated and whatever people say need not
be true

Page 17 of 41
 CHAPTER- 6
DATA ANALYSIS &
INTERPRETATION

Page 18 of 41
TABLE 1: Two-wheeler you own (brand name)?

PARTICULARS NO. OF RESPONDENTS PERCENTAGE (%)

BAJAJ 30 30

HERO HONDA 20 20

YAMAHA 24 24

SUZUKI 3 3

TVS 20 20

OTHERS 3 3

TOTAL 100 100

35

30

25

20

15

10

0
Bajaj Hero H... Ya Suzuki TVS Others

ANALYSIS:

As per the data Analysis clearly states that most of the customers prefer
BAJAJ (30%) followed by YAMAHA (24%) taking the second place, HERO
HONDA (20%) and TVS securing third place, and Suzuki and others (3%)
respectively. It is inferred that most of the customers prefers BAJAJ two-
wheelers followed by rest of the two-wheeler brands.

TABLE 2: Kind of two-wheeler you own?

PARTICULAR NO. OF RESPONDENTS PERCENTAGE

Page 19 of 41
 WITH GEAR 76 76

WITHOUT GEAR 24 24

TOTAL 100 100

80

70

60

50

40

30

20

10

0
With gear Without gear

ANALYSIS:

As per the data Analysis clearly states that most of the customers prefer two-
wheeler wit gear (76%) rather than two-wheeler without gear (24%). It is also
seen that men prefer two-wheeler with gear whereas woman prefers two-
wheeler without gear. It is inferred that most of the customers prefer two-
wheeler with gear.

Page 20 of 41
TABLE 3: Who referred you the two-wheeler?

PARTICULAR NO. OF RESPONDENTS PERCENTAGE

FAMILY 15 15

FRIENDS 20 20

ADVERTISEMENTS 55 55

OTHERS 10 10

TOTAL 100 100

60

50

40

30

20

10

0
FAMILY FRIENDS ADVERTISEMENTS OTHERS

ANALYSIS:

As per the data Analysis clearly states that most of the customers have learnt
about their two wheeler through advertisement (55%) i.e. newspaper and
television advertisements etc, followed by friends recommendations (20%),
family (15%) and others (10%). It is inferred that most of the customers prefer
advertisements to know about their two wheeler followed by the rest.

Page 21 of 41
TABLE 4: What mode of payment did you undertake?

PARTICULARS NO. OF RESPONDENTS PERCENTAGE (%)

CASH 30 30

EMI 45 45

CHEQUE 22 22

OTHERS 3 3

TOTAL 100 100

50
45
40
35
30
25
20
15
10
5
0
CASH EMI CHEQUE OTHERS

ANALYSIS:

As per the data Analysis clearly states that most of the customers considers
EMI (45%) for payment, followed by cash (30%), cheque (22%) and others
(3%).It is seen that people with monthly income Rs(5000-9000 per month)
selects EMI mode of payment. It is inferred that most of the customers prefer
EMI mode of payment followed by the cash and cheque.

Page 22 of 41
Table 5: What would be the price range for the purchase of two-wheeler?

PARTICULARS NO. OF RESPONDENTS PERCENTAGE (%)

Rs 30000-40000 20 20

Rs 40000-50000 30 30

Rs 50000-70000 40 40

Rs 70000-above 10 10

TOTAL 100 100

PRICE RANGE
10%
20%

RS.30000-40000

RS.40000-50000

RS50000-70000
40%
RS.70000&ABOVE
30%

ANALYSIS:

As per the data Analysis clearly states that most of the customers i.e. is 40%
of the customers would like to purchase their two-wheeler within the price
level of Rs(50000-70000),followed by Rs (40000-50000) on 30 % ,Rs (30000-
40000) on 20% and Rs 70000 and above on 10%. It is seen that majority of
customers would like to purchase two-wheeler within the price range of Rs
(50000-70000).

TABLE 6: Key factors that influence your buying decision?

PARTICULARS NO. OF RESPONDENTS PERCENTAGE (%)

Page 23 of 41
 Mileage 45 45

Looks 20 20

Comfort 15 15

Price 20 20

TOTAL 100 100

FACTORS INFLUENCING BUYING DECISION

20%

MILEAGE LOOKS
45%

15% COMFORT PRICE

20%

ANALYSIS:

As per the data Analysis clearly states that most of the customers are
influenced by mileage factors i.e. 45%, followed by looks and price 20% and
comfort is 15%. It is seen that majority of customers are concerned about the
mileage factor as found out by the study.

Page 24 of 41
TABLE 7: Would you like a test ride before you purchase your two- wheeler?

PARTICULARS NO. OF RESPONDENTS PERCENTAGE (%)

YES 97 97

NO 3 3

TOTAL 100 100

TEST RIDE BEFORE PURCHASE

3%

YES

NO

97%

ANALYSIS:

As per the data Analysis clearly states that majority of the customers i.e. 97%
would like to have a test ride while purchasing a two-wheeler whereas the
later 3% is quite comfortable without a test ride. It is inferred that majority of
the customers would like to have a test ride to know their two wheeler in a
better way before purchasing the two wheeler.

Page 25 of 41
TABLE 8: What are the schemes that attract you the most?

PARTICULARS NO. OF RESPONDENTS PERCENTAGE (%)

ANNIVERSARY OFFER 5 5

CASH DISCOUNT 60 60

SPECIAL GIFT 15 15

EXCHANGE OFFER 10 10

FESTIVE OFFER 10 10

TOTAL 100 100

SCHEMES THAT ATTRACT

5%
10%

10% ANNIVERSARY OFFER

CASH DISCOUNT
SPECIAL GIFT
EXCHANGE OFFER
FESTIVE OFFER
15%

60%

ANALYSIS:

As per the data Analysis clearly states that cash discount offers attract
customers the most i.e. 60% of the customers, followed by special gift at 15%,
exchange and festive offer at 10% each and anniversary offer at 5%. It is
inferred that majority of the customers prefer cash discount the most as it
reduces their expenditure on the purchase of two wheeler.

Page 26 of 41
TABLE 9: Age-Wise classifications:

PARTICULAR NO. OF RESPONDENTS PERCENTAGE (%)

18-20 years 20 20

21-25 years 3O 30

26-30 years 2O 20

31-35 years 15 15

36-40 years 10 10

40years and above 5 5

TOTAL 100 100

AGE

5%
18-20 YEARS
10% 20% 21-25 YEARS
26-30 YEARS
31-35 YEARS
15% 36-40 YEARS
40 YEARS & ABOVE

30%
20%

ANALYSIS:

The study was conducted on 100 customers (respondents) with different age
group.18-20 yrs is 20%, 21-25 yrs is 30%,26-30 yrs is 20%,31-35 yrs is 15%,
36-40 yrs is 10% and 40 yrs and above is 5%.

TABLE 10: Occupation-wise classification:

Page 27 of 41
 PARTICULAR NO. OF RESPONDENTS PERCENTAGE (%)

STUDENTS 50 50

SERVICE MAN 20 20

BUSINESS MAN 13 13

PROFESSION 14 14

OTHERS 3 3

TOTAL 100 100

OCCUPATION
3%

14%
STUDENTS
SERVICEMAN
BUSINESSMAN
13% PROFESSION
50% OTHERS

20%

ANALYSIS:

The study was conducted on 100 customers (respondents) with different

occupation. The various occupations are as follows students 50%,
servicemen 20%, businessman 13%, profession 14% and others are 3%.

Page 28 of 41
TABLE 11: Income-wise classification (per month):

PARTICULAR NO. OF RESPONDENTS PERCENTAGE (%)

Rs (5000-9000) 56 56

Rs (10000-14000) 11 11

Rs (15000-19000) 13 13

Rs 20000.00 and 20 20
above

TOTAL 100 100

60

50

40

30

20

10

0
Rs.(5000-9000) Rs.(10000-14000) Rs.(15000-19000) Rs.(20000 & Above)

ANALYSIS:

The study was conducted on 100 customers (respondents) with different

income levels. The different income level of 100 customers is as follows Rs
(5000-9000) 56%, Rs (10000-14000) 11%, Rs (15000-19000) 13% and Rs
20000.00 and above is 20%.

TABLE 12: Gender-wise classification:

Page 29 of 41
 PARTICULAR NO. OF RESPONDENTS PERCENTAGE (%)

MALE 62 62

FEMALE 38 38

TOTAL 100 100

GENDER

38%
MALE

FEMALE
62%

ANALYSIS:

The study was conducted on 100 customer.62% respondents were male and
38% respondents were female.

Page 30 of 41
 CHAPTER- 7
FINDINGS OF THE STUDY

SUMMARY OF FINDINGS

Page 31 of 41
This study was conducted to find out the buying factors that influence the
purchase of two wheelers in urban areas. Questionnaire and interviews were
conducted with the respective customers for this purpose. The data so
collected was tabulated and analysed. On the evaluation of data collected and
analysed the following findings were recorded:-

 Most of the customers prefer to purchase two wheeler of BAJAJ.

 Majority of two wheeler purchaser are youngsters.
 Majority of people with income of Rs (9000-15000) per month purchase
two-wheeler the most.
 Majority of customers favour two-wheeler with gear.
 Majority of customers prefer advertisements in television, newspaper,
magazine etc. for the reference of purchasing a two-wheeler.
 Majority of customers prefers EMI mode of payment.
 Majority of customers would like to purchase two-wheeler within the
price range of Rs (50000-70000) as the two-wheeler in this price range
covers most of the expectations of customers wants.
 Most of the customer has opted for mileage as key buying factor before
purchasing a two-wheeler.
 Majority of the customers would like to have a test ride to know their
two-wheeler in a better way before purchasing the two-wheeler.
 Majority of the customers prefer cash discount the most as it reduces
their expenditure on the purchase of two-wheeler.
 Majority of customers use two-wheeler for personal purpose.

Page 32 of 41
 CHAPTER- 8
SUGGESTIONS

RECOMMENDATION AND
SUGGESTION
Page 33 of 41
Based on the study on the following subject our suggestions are as follows:

1) Companies should target the youngsters as they prefer two-wheeler

the most because they are crazy for speed, style and it is available in
low cost.

2) Companies should emphasize more on advertisements for the

promotion of their two-wheeler because in country like India media is a
very powerful weapon to reach a million people and through
advertisements in newspaper, television, radio companies can reach a
large number of populations.

3) Companies should give free gifts on test ride so as to attract the

attention of the customer as this type of activities act as a very
important promotional tool for the two wheeler companies. Customers
are attracted with these kinds of offers.

4) Companies should manufacture two-wheeler which is both stylish and

gives good mileage and performance to meet the various choices of
the customers. The main objective of the companies should be
satisfaction of the customer.
5) Companies should have cash discount offers from time to time as
customers seems to be very interested in such kind of offers.

CONCLUSION

Page 34 of 41
From this study, we found that motorbikes are highest buying trends in auto
industry of India because it is convenient transportation mode in their
respective cities. So we can conclude the following factors:

 Low income families prefer acquiring two wheelers.

 Mostly age group of 20 yrs to 25yrs prefer to purchase two-wheeler.
 We can also say that in today’s scenario information and media is
playing a very important role to motivate the customers in order to
make a purchase decision, a customer gathers relevant information
about a product before he or she buys it.
 Brand consciousness seems to be a bit changed or very less
changed in a two wheeler purchase decision, for example a
customer using Bajaj’s bike may switch to Yamaha’s bike.
 Looks and Style have been a major factor in influencing and
motivating a customer to purchase a two-wheeler.
 Advertisements play a major role in motivating customers to
purchase two-wheeler.
 Mileage is still an important factor which a customer considers while
purchasing a two-wheeler.

BIBLIOGRAPHY
Page 35 of 41
 Business Research Management textbook: C.R. Kothari.
 www.scribd.com
 www.google.com
 www.capitaline.com
 www.icra.in

Page 36 of 41
 ANNEXURE

QUESTIONNAIRE
1) Two-wheeler you own (brand name)?
Bajaj Hero Honda

TVS Yamaha

Page 37 of 41
 Suzuki Others

2) Kind of two-wheeler you own?

With gear without gear

3) Who referred you the two-wheeler?

Family Friends

Advertisements Others

4) What mode of payment did you undertake?

Cash EMI

Cheque Others

5) Key factors that influenced your buying decision?

Mileage Looks

Comfort Price

6) What would be the price range for the purchase of two- wheeler?
30000-40000 40000-50000

50000-70000 70000 and above

7) Would you like a test ride before you purchase your two-wheeler?
Yes NO

8) What are the schemes that attract you the most?

Anniversary offer Cash discount

Special gift Exchange offer

Festive offer

9) Age wise classification?

18-20 20-25

26-30 31-35

36.40 41 and above

10)Occupation wise classification?
Servicemen Student

Business Profession

Page 38 of 41
 Others

11)Income wise classification ( per month)?

5000 10000

15000 20000 and above

12)Gender wise classification?

Male Female

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