On the partial fulfillment of 3rd Tri-semester of POST GRADUATE DIPLOMA IN BUSINESS MANAGEMENT


We the following students submit our report entitled

Under the esteemed guidance of Prof. Manish Agarwal


:: Submitted To :: Dr. Manish Agarwal

:: Submitted By :: SHELLY DIXIT (138) TAMONASH ADITYA (160) TARUN KUMAR (165) VIGYAN (178)


This is to certify that this report contains bonafide work of SHELLY DIXIT, TAMONASH ADITYA, TARUN KUMAR, VIGYAN during Term III, session 2007-2009 for the subject Research Method in Business


Signature of Faculty


This report bears the imprint of many people and without their support it would not have existed. First of all we would like to express our sincere indebt ness and profound sense of gratitude to our parents whose support in all manners had made us capable to complete this project. We acknowledge our deepest thanks to Prof. Manish Agarwal for all her care and encouraging words and giving suggestion at different point of times. At the outset we would like to put on record our sincere gratitude to all of our friends for giving us valuable ideas throughout of our project.

Shelly Dixit(138) Tamonash Aditya (151) Tarun Kumar (153) Vigyan (178)


According to the ninth annual Capgemini automotive study – Cars Online 07/08. Each year they extend the scope and depth of their survey to explore new and evolving trends within the retail side of the automotive industry, with a particular focus on consumer buying habits. Cars Online 07/08 continues the detailed analysis of the changing patterns of consumer demand, shopping trends, web usage and customer loyalty that we have uncovered over the past eight years. This year, however, we have broadened the scope to explore in greater detail environmental issues, including fuel-efficient and alternative-fuel vehicles, as well as consumer use of new online tools, such as web logs, discussion forums and search engines. These additional areas of focus reflect changes in today’s automotive landscape. The industry is clearly in transition, with static sales in almost all developed markets; growing pressure from Asian manufacturers; eroding customer loyalty; and increased emphasis on environmental and regulatory compliance. Consumer behaviour will be a primary force in determining how this transition will evolve. Getting closer to the customer in today’s highly competitive landscape is essential for the entire industry and is no longer just a retail issue. It requires all organisations across the supply chain to work as a single enterprise, sensing and responding rapidly to consumer demand in a co-ordinated manner. Capgemini’s annual Cars Online study is designed to give automotive companies information that can help them get a better grasp on changing consumer trends, shopping patterns and demands. This year’s research involved almost 2,600 consumers in five countries: China, France, Germany, the United Kingdom and the United States. Interestingly, we found significant commonalities among responses across the more mature markets, with differences still quite apparent in the emerging Chinese automotive market. This report highlights these results, as well as country-specific differences. The executive summary provides an overview of key findings from the study, and the sections that follow offer more in-depth data and analysis on consumer behaviour, environmental issues, web usage, lead management and customer loyalty. The automotive world today is changing; consumers are changing. And the speed of change is continuing to accelerate.


Executive Summary Competitive pressures and increasing complexity have led automotive companies to look for an edge wherever they can find it. Indian auto industry. Capgemini’s Cars Online report contains insight that can help vehicle manufacturers and dealers develop and execute more effective strategies in areas such as sales. 40 . after sales service. AUTOMOBILE INDUSTRY IN INDIA In India there are 100 people per vehicle. During its early stages the auto industry was overlooked by the then Government and the policies were also not favorable. the Automobile Industry of India has come a long way. while this figure is 82 in China. Industry Overview Since the first car rolled out on the streets of Mumbai (then Bombay) in 1898. It is expected that Indian automobile industry will achieve mass motorization status by 2014. Today Indian automotive industry is fully capable of producing various kinds of vehicles and can be divided into 03 broad categories: Cars. Within two-wheelers. has become a hot destination for global auto players like Volvo. The liberalization policy and various tax reliefs by the Govt. motorcycles contribute 80% of the segment size. of India in recent years has made remarkable impacts on Indian Automobile Industry. With the growth of transportation system the Automotive Industry of India is also growing at rapid speed. A well developed transportation system plays a key role in the development of an economy. India is being recognized as potential emerging auto market. marketing and advertising. which is currently growing at the pace of around 18 % per annum. and India is no exception to it. General Motors and Ford. Snippets • • • • The first automobile in India rolled in 1897 in Bombay. Customer Relationship Management (CRM) and manufacturer/dealer collaboration. two-wheelers and heavy vehicles. Foreign players are adding to their investments in Indian auto industry. Improved consumer insight into vehicle shopping and buying behaviour can provide that valuable advantage. occupying an important place on the 'canvas' of Indian economy.

India is the second largest tractor manufacturer in the world. In commercial vehicle. In it Honda holds 46% share in scooter and TVS makes 82% of the mopeds in the country. India is the fifth largest commercial vehicle manufacturer in the world. Hero Honda contributes 50% motorcycles to the market. Tata Motors dominates the market with more than 60% share. India is the largest three-wheeler market in the world. is going to come up with the first automobile mall of the country by the second half of 2008. Miscellaneous Hyderabad. 2/3rd of auto component production is consumed directly by OEMs. Segment Know how Among the two-wheeler segment. • • • • • • • • mark. Bajaj is the leader by making 68% of the threewheelers. the Hi-Tech City.• Unlike the USA. India is the largest two-wheeler manufacturer in the world. It would be set up by city-based Prajay Engineers Syndicate in area of more than 35 acres. India is the fourth largest car market in Asia . The number one global motorcycle manufacturer is in India. Among the passenger transport. In utility vehicles Mahindra holds 42% share. motorcycles have major share in the market. Cars by Price Range 40 . Piaggio holds 40% of the market share. Tata Motors is also the world's fifth largest medium & heavy commercial vehicle manufacturer. It will also have a multi-purpose convention centre for auto fairs and product launches. Maruti Suzuki has 52% share in passenger cars and is a complete monopoly in multi purpose vehicles. This 'Autopolis' would have facilities for automobile financing institutions and insurance services to create a complete range of services required for both auto companies and customers. the Indian passenger vehicle market is dominated by cars Tata Motors dominates over 60% of the Indian commercial vehicle market. 40% of the three-wheelers are used as goods transport purpose.recently crossed the 1 million (79%). Cars dominate the passenger vehicle market by 79%.

Esteem.• Maruti 800. Optra Magnum. 5-10 Lakhs Rs. SL & CLS-Class Porsche Boxster. 911 Carrera & Cayman S Toyota Prado 40 Under Rs. Tavera Hyundai Accent. SLK. Getz Chevrolet Opel Corsa Maruti Zen. Mitsubishi Cedia Honda City ZX Mahindra Bolero Hyundai Sonata Embera Toyota Corolla Ford Mondeo & Endeavour Chevrolet Forester Skoda Octavia & Combi Honda Civic Honda CR-V Maruti Suzuki Grand Vitara Terracan & Tucson Mitsubishi Pajero Audi A4 Opel Vectra Honda Accord Mercedes C Class Toyota Camry Audi A6. 10-15 Lakhs Rs. Gypsy Ford Icon & Fiesta Tata Indica. Elantra Mahindra Scorpio Maruti Baleno Toyota Innova Tata Safari Mitsubishi Lancer. Indigo Marina Chevrolet Swing. A8 & Audi TT BMW X5. 15-30 Lakh Rs. Cayenne. 3 Lakhs • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • Rs. Omni Reva Ambassador Fiat Palio Hyundai Santro. S Class. 5 Series & 7 Series Mercedes E Class. Indigo XL. 3-5 Lakhs Rs. Versa. Wagon R. Alto. 30-90 Lakhs .

OEMs are active in the booming passenger car market in India. The passenger car and motorcycle segment in Indian auto market is growing by 8-9 per cent. Automotive Research Association of India (ARAI). Automobile Association of Southern India (AASI). Hero Honda is the largest manufacturer of motorcycles.5% rise by 2007. Maruti Udyog Ltd.7M motorcycles a year is now the largest motorcycle manufacturer in the world. Get all the contact details of Automobile Association of Upper India (AAUI). Exports of auto components. Hyundai Motors India is the second largest player in passenger car market. The two-wheeler segment will clock 11. On the revenue side.2 per cent. Passenger vehicle exports have grown over five times and two-wheeler exports have reached more than double. Bentley Continental GT & Flying Spur Rolls Royce Phantom Maybach The following links gives the complete picture of Indian Auto Industry: The first auto vehicle rolled out in India at the end of 19th century.Above Rs. is the leading 4wheelers manufacturer. Know about the number of vehicles registered as Transport or NonTransport in the Indian states and Union Territories. On the cost front. Hero Honda is the leading 2-wheelers manufacturer. Automotive Component Manufacturers Association of India (ACMA) and more Automobile History Industry Investment Industry Growth Vehicle Production Auto Export Auto Companies Vehicle Distribution Associations 40 . 1 Crore • • • Bentley Arnage. whose manufacturing costs are 30-40 per cent lower than in the West. Today. have grown at 25% a year between 2000 to 2005. Commercial vehicle to grow by 5. India is the 11th largest Passenger Cars producing countries in the world and 4th largest in Heavy Trucks. India is the the 2nd largest tractor and 5th largest commercial vehicle manufacturer in the world. Tata Motors is the fifth largest medium & heavy commercial vehicle manufacturer in the world. Hero Honda with 1. OEMs eyeing India in a big way to source products and components at significant discounts to home market.

ahalf times the export figure for 2001-02.99 to 7. The industry has adopted the global standards and this was manifested in the increasing exports of the sector. 40 .Major Manufacturers in Automobile Industry • • • • • • • • • • • • • • Maruti Udyog Ltd. It is likely that the production of such vehicles will exceed 10 million in the next couple of years. The production of total vehicles increased from 4.99 and 1999-00. Royal Enfield Motors Telco TVS Motors DC Designs Swaraj Mazda Ltd Government has liberalized the norms for foreign investment and import of technology and that appears to have benefited the automobile sector. After a temporary slump during 1998.3 million in 2003-04. Eicher Motors Bajaj Auto Daewoo Motors India Hero Motors Hindustan Motors Hyundai Motor India Ltd. such exports registered robust growth rates of well over 50 per cent in 2002-03 and 2003-04 each to exceed two and.2 million in 1998. General Motors India Ford India Ltd.

environmental issues. web usage. Effective web strategies will be vitally important. While this topline review provides a summary of key findings from this year’s Cars Online study. green issues are dynamic and it’s still too early to determine their ultimate impact on the automotive industry. but the Internet tops the list. social networking sites and virtual worlds. Consumer Behaviour: Turning to the Web and New C2C Tools Consumers today have a multitude of sources from which to gather information during the vehicle buying process. the sections that follow offer more in-depth data and analysis of consumer behaviour. And companies will need to establish and maintain a true twoway dialogue with individual customers through personalised communication. discussion forums. Manufacturer/dealer collaboration in the form of effective retail integration and integrated lead management will become more important than ever to satisfy increasingly sophisticated and demanding consumers and to retain loyalty.Anticipating Consumer Changes What do these findings tell us? They make it clear that consumer behaviour is evolving and that automotive companies need to anticipate this evolution in order to be part of. lead management and customer loyalty. As with the web. The web has become a standard resource in 40 . Automotive companies will need to stay focussed on environmental developments and evolving consumer attitudes about fuel-efficient and alternative-fuel vehicles. Is your company ready? What changes will you need to make? Companies will need to take a look at their multi-channel approach as they consider the potential market for online sales. as the online landscape evolves rapidly with the emergence of powerful consumer-to-consumer tools like blogs. the changes. or even influence.

However. vehicle buyers are visiting fewer sites and focussing more on manufacturer and C2C websites and less on third-party information sites and independent e-tailer sties. the way they use it is changing. As the web matures. with about half of web users turning to these sites. information websites were identified as the number one information source by web users responding to the Cars Online survey (tied with family and friends and manufacturer specific dealer). In comparison. Two years ago manufacturer sites held the number three position. named by 43% of web users. named by 55% of consumers. The use of dealer websites has remained steady. Manufacturer Sites a Key Information Source Just two years ago. manufacturer sites are now the top source for consumers who use the web when researching vehicles. they dropped to the number four source. 40 . named by 70% of respondents. named by 41% of web users. This year.the shopping process for eight out of 10 consumers when researching car purchases.

social networking sites and web forums is 40 . the use of new online consumer-to-consumer tools such as blogs. RSS (Really Simple Syndication) feeds. user-generated content.At the same time.

named by fewer than half of consumers. safety. Key Factors in Vehicle Choice When it comes to making their final decision about which vehicle to buy. In this year’s study. Take print advertising.growing. The numbers do fall off. For example. As web usage rises. older consumers tend to put more emphasis 40 . price and fuel economy. it was named by 69% of respondents who were 13 to 18 months from purchase. consumers focus on factors such as reliability. the number declines as consumers get closer to actually buying the car: 55% of respondents who were within three months of purchase said extra warranty coverage was important. This reflects the fact that consumers will narrow down the factors that really matter to them as they get closer to the point of purchase. Demographic factors such as age and gender accounted for some variances. however. additional warranty coverage is important to consumers who are furthest away from the point of purchase. compared with 32% in 2005. for example. indicating that consumers today seem less interested in gimmicks when it comes to their car purchases. compared with just 12% of those 50 and older. This year. which has shown a steady downward trend particularly among consumers who rely on the web during the vehicle shopping process. Vehicle manufacturers and dealers need to be aware of how fast online changes are occurring and continually adjust their marketing mix and resources accordingly to anticipate tomorrow’s mix. when it comes to blogs and web forums. it is not just the young generation who use the web to research vehicles. just 20% of web users said they use print ads when researching vehicles. The message for automotive companies is clear: Consumers trust the information they receive from manufacturer and C2C sites. However. At the bottom of the list are cash-back incentives. Marketing funds directed toward more traditional media such as print advertising should be regularly re-examined for ROI. up from 21% a year ago. The importance of incentives as a deciding factor has declined for the past several years. About 30% of the youngest consumers rely on these new tools. Where consumers are in the buying cycle can make a difference in how they rank the factors that influence their vehicle choice. (For a more detailed analysis of the use of these new online tools see separate section on “Web Usage. Almost half of consumers 50 and older visit manufacturer sites. consumer reliance on other more traditional information sources is on the decline. 29% of web users indicated that they use these kinds of tools when researching during the vehicle shopping process. For example.”) Interestingly. nearly the same number as those in the 18 to 34 age group.

fuel economy and additional warranty coverage. environmental issues. Women tend to rate most of the factors as more important than do men. 40 . Those in the 50-plus age group were also more concerned with environmental issues and fuel economy. low financing.on reliability and safety than do younger respondents. safety. The difference was most pronounced for cash-back incentives. The youngest respondents were most likely to rate the ability to research information on the Internet as an important factor in their vehicle decision.

40 .

fluctuating gasoline prices. named by 15%.S. 40 . More than one-quarter of respondents said they currently own or lease a fuel-efficient vehicle while almost half said they are planning to buy or thinking seriously about buying a fuelefficient vehicle. named by about half of current alternativefuel car owners. Current ownership of fuel-efficient and alternative-fuel vehicles tended to be quite consistent across gender and age groups.Going ‘Green’: Fuel Efficiency Takes Centre Stage Fuel efficiency and environmental issues have moved to the forefront in consumers’ minds and in automotive industry forums thanks to factors including global warming. the numbers for alternative-fuel vehicles were lower. This growing interest in so-called green vehicles was evident in this year’s Cars Online research. The alternative-fuel market remains in transition and it’s still too early to tell how it will ultimately shake out. Not surprisingly. although sales are expected to continue to grow. sales of hybrid vehicles will increase by 35% in 2007. and proposed legislation to increase fuel efficiency and reduce CO2 emissions. Just 2% of respondents currently own an alternative-fuel vehicle and 11% are planning to buy or thinking seriously about buying one. J.D. although the oldest consumers were somewhat more likely to be seriously thinking about buying an alternative-fuel car. compared with 2006. Power and Associates predicts that U. For example. Biodiesel vehicles were the second most common. The most common type of alternative-fuel vehicle represented in the survey were gas/ electric hybrids.

pointed to fuel economy. 40 .” However. Some consumers pointed to less tangible reasons such as “it makes me feel better. compared with the youngest respondents (18-34). 57% of Prius owners said because it “makes a statement about me. followed by the impact on the environment (23%). When asked why they bought a Toyota Prius. Older consumers were somewhat more likely to identify fuel economy as a primary factor. while more respondents in China and the U. Tax credits and cost factors were less important.” This is in line with research conducted by CNW Marketing Research. the Cars Online research uncovered some differences in the reasons behind consumer decisions about green vehicles. while a higher proportion of women identified environmental impact as the primary reason driving their decisions about green vehicles.Why Buy a Green Vehicle? Fuel economy is the number one factor driving consumer decisions about green vehicles (named by 57% of respondents).S. Men put more emphasis than did women on fuel economy. European consumers were more likely to cite environmental impact as a primary factor. For example.

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40 . ORGANIZATIONAL BUYING Final (or ultimate) consumers purchase for: • • • personal. the car has several unexpected breakdowns that lead you to want to purchase a different brand. but then begin to wonder if instead you should have purchased a more expensive but potentially more reliable model.PERSONAL SELLING: CONSUMER BUYING BEHAVIOR CONSUMER BUYING vs. buying. wondering if you can afford the monthly payments. and/or resale to other consumers Consumer Buying Behavior The decision processes and acts of final household consumers associated with evaluating. family. you test drive several models and finally decide on a particular model. consuming. such as a problem needing potentially expensive repair. You generally will not consider different options until some event triggers a need. you begin to ask your friends for recommendations regarding dealerships and car models. Over the next five years. or household use Organizational consumers purchase for: • • • further production. you have doubts on the way home. Once this need has put you "on the market". and discarding products for personal consumption Consider the purchase an automobile. After visiting several dealerships. but you have been very happy with the services of the local dealership and decide to again purchase your next car there. After picking up your new car. usage in operating the organization.

g. the following generic model of consumer decision making appears to hold: =====>need recognition =====>information search =====>evaluation of alternatives =====>purchase decision =====>postpurchase behavior Now consider the purchase of a quart of orange juice. When you buy orange juice. you always go to the same place in the store to pick it up. cultural. You have a favorite brand of orange juice and usually do your grocery shopping at the same store. and never notice what other brands are on the shelf or what are the prices of other brands. You purchase this product when you do your grocery shopping once per week.. How is it that the generic model above works differently in this second scenario? Why does it work differently? Why would we generally need the ministrations of a sales person in the sale of a car. but are more interested in various factors that influence how such a model might work. but we generally do not need the help of a salesperson in the purchase of orange juice? How can the marketer of orange juice get a consumer like you to exert more effort into information search or to consider alternative products? How is it that the marketer of your brand got you to ignore alternative competing brands? What is the involvement of salespeople in sales promotions that might be associated with products such as orange juice? Consumer behavior researchers are not so interested in studying the validity of the above generic model. reference group influences 40 . INFLUENCES ON THE GENERIC MODEL • external o group -e. family.In this particular case.

In some subcultures. GROUP INFLUENCES ON CONSUMER BEHAVIOR Culture the set of basic values.. Social Class A group of individuals with similar social rank. the wife will play a more dominant role.g. attitude.. If you were a used car salesperson. etc. motivation. etc.g. or behaviors • E. personality. personality. knowledge. how might you respond differently to a nineteen year old prospect accompanied by her boyfriend from one accompanied by two girlfriends? • Opinion leader A person within a reference group who exerts influence on others because of special skills. must react to different couples who are considering the purchase of a refrigerator. • inernal o lifestyle. time of day.o environmental/situational -e. and associated behaviors that are learned by a member of society Note that culture is something that is learned and that it has a relatively long lasting effect on the behaviors of an individual. decision making process. beliefs. education. etc. norms. consider how the salesperson in an appliance store in the U. your behaviors around colleagues at work or friends at school are probably different from your behaviors around your parents. in others. 40 . based on such factors as occupation. As an example of cultural influences. no matter your age or stage in the family life cycle. that affect a person's values. and wealth Reference Groups Groups. often temporary. temperature and humidity.S. the husband will play a dominant role in the purchase decision.

If you work for tips (a form of incentive related to commission) as a waiter or waitress. or other socially approved relationship ENVIRONMENTAL / SITUATIONAL INFLUENCES ON CONSUMER BEHAVIOR Circumstances. after a late meeting at the office.o You might ask the webmaster at work for an opinion about a particular software application. A prospect shopping for a new automobile while debating the wisdom of a necessary expensive repair to his car might be more interested in what cars are on the lot than in shopping for the best deal that might involve a special order. • Family A group of people related by blood. INTERNAL INFLUENCES ON CONSUMER BEHAVIOR Personality A person's distinguishing psychological characteristics that lead to relatively consistent and lasting responses to stimuli in the environment 40 . etc. but probably not as a topping on your pancakes. marriage. Software manufacturers often give away free beta copies of software to potential opinion leaders with the hope that they will in turn influence many others to purchase the product. If you are doing your Saturday grocery shopping and are looking for orange juice. You might like peas. Do you like grapes? Do you like peas? You might like grapes as a snack after lunch. you are probably much more sensitive to price than if you stop at the quick store late at night. but probably not as a dessert after a fancy meal in a restaurant. time. when you are tired and cranky. Everyday situations cause an interaction between various factors which influence our behaviors. you must certainly be aware of such interactions which can increase or decrease your sales. location.

and opinions psychographics is a technique for measuring personality and lifestyles to developing lifestyle classifications • Motivation: Multiple motives Consumers usually have multiple motives for particular behaviors. some people are "optimizers" who will keep shopping until they are certain that they have found the best price for a particular item. observing behavior is not sufficient to determine motives. and we each respond differently as consumers. while other people are "satisficers" who will stop shopping when they believe that they have found something that is "good enough. These can be a combination of: • manifest known to the person and freely admitted latent unknown to the person or the person is very reluctant to admit • Note: different motives can lead to the same behavior." If you are a salesperson in a retail shoe store. interests. 40 . how might you work differently with these two personalities? Lifestyle and Psychographics • lifestyle is a pattern of living expressed through a person's activities.We are each unique as individuals. For example.

most young college students are not open to thinking about long term 40 .even though the new parents might be struggling to make ends meet while the student is living more comfortably. Although the annual investment into a policy is much lower if started at a younger age. This modifies the way that the generic model works. and therefore presents a higher involvement situation. for example.What are the thoughts of John's friend? What is John's manifest motive? What might be his latent motive? How might a salesperson discover these motives? What features should a salesperson emphasize? Involvement Has to do with an individual's • • intensity of interest in a product and the importance of the product for that person The purchase of a car is much more risky than the purchase of a quart of orange juice. would typically be more interested in contacting a young couple who just had a baby than an eighteen year old college student . As involvement increases. A life insurance agent. consumers have greater motivation to comprehend and elaborate on information salient to the purchase.

If the buyer beleives that s/he received more in the exchange than what was paid. relatives. expensive. is much more open to thinking about issues associated with planning for the child's future education. They are also more likely to be unhappy or even abusive when the product requires post-sale servicing. or infrequently purchased e. buying a new car once every five years Under what sorts of conditions would the assistance of a salesperson be needed? Not needed? POST-PURCHASE CONSUMER BEHAVIOR Satisfaction After the sale. saving to buy a house. or even saving to take an extended vacation upon retirement. If s/he believes that s/he received less in the exchange than what was paid. TYPES OF CONSUMER PROBLEM-SOLVING PROCESSES Routinized • • • used when buying frequently purchased. low cost items used when little search/decision effort is needed e. the buyer will likely feel either satisfied or dissatisfied.. s/he might feel satisfied.. Dissatisfied buyers are not likely to return as customers and are not likely to send friends. buying a quart of orange juice once per week Limited Problem Solving • • used when products are occasionally purchased used when information is needed about an unfamiliar product in a familiar product category Extended problem solving • • used when product is unfamiliar. however.estate planning. A young couple with a new child. The above idea can be modeled as Homans' basic exchange equation: 40 . as when an automobile needs warranty maintenance.g.g. then s/he might feel dissatisfied. and acquaintences.

even though you received good value for the money spent. The reason. that you have purchased a used car for $14. explains the accountant. That the dealer appears to have received substantially greater benefit than you could lead to extreme dissatisfaction. where we are concerned with: Outcomes of A Inputs of A vs. for example. (Note that the selling dealer might actually have paid $12. "buy term insurance and invest the difference. Management of buyer perceptions is very important!) An issue related to this is attribution theory. and then might have incurred another $1.". Outcomes of B Inputs of B Consider. while her accountant advises her. people tend to assign cause to the behavior of others.blue book" value is listed at $16. she will likely be displeased with the relationship and will not take his recommendation. Mary's life insurance agent advises her to purchase a whole life policy.Costs Unfortunately." If Mary believes that the insurance agent is recommending a product merely because he receives a higher commission. This idea is called equity theory.000.000 in expenses associated with transporting the car and preparing it for sale.000 after finding that the "e.Profit = Rewards . even a buyer who "got a good deal" with respect to price and other terms of the sale might feel dissatisfied under the perception that the salesperson made out even better.000 for the car at a statewide dealer's auction. You are probably delighted with the purchase until you accidentally meet the prior owner who had received a trade-in of $10. "is that insurance agents receive substantially higher commission payments on sales of whole life policies. If the agent is able to show Mary that the recommended product is the best solution for her situation.000 on the car just a few days before. then she will likely attribute his recommendation to having her 40 . According to attribution theory.

Perhaps neither couple would be experiencing this anxiety if their landlords had given them just the smallest of assurances that they had made a good decision. on the other hand. signed a one year lease on an apartment. they are not sure if they really can afford this much of a monthly obligation. they are wondering if they should have instead leased a smaller $900 apartment in a more rough part of town. Jane and Fred.best interests in mind and will not be concerned about how it is that he is compensated for his services. Dick and Sally. committing themselves to payments of $1500 per month. the second section intended to collect the various opinions containing questions about the various factors affecting the car purchasing decision. the salesperson should provide the prospect with some reasons to be happy with the decision. Allow the car buyer to reinforce her own positive feelings by calling her a week after the purchase to ask how things are going. The questionnaire used for the sample survey is a structured and non-disguised questionnaire and consisted of two major sections. A five point Likert scale was used to capture the consumers responses ranging from strongly agree to strongly disagree. for example. The different statements regarding the various factors affecting the car buying behavior of customers were generated based on literature review 40 . Cognitive dissonance It has to do with the doubt that a person has about the wisdom of a recent purchase It is very common for people to experience some anxiety after the purchase of a product that is very expensive or that will require a long term commitment. Methodology The study is based on primary data collection with a sample size of 100 respondents residing in National Capital Region of New Delhi. A week later. India. a lack of questions can only help the buyer to convince himself that he did the right thing. The first section intended to collect the various demographic factors. and now are wondering if the savings in rent will be offset by noisy and sometimes unsafe conditions in this neighborhood. After a close on products that are expensive or that require a long term commitment. Call the new life insurance policy holder after two months to see if there are any questions. ultimately rented the $900 apartment.

To study the impact most frequently indulged in weighted average method was used. It could be therefore said that the itemized scale in this case actually asks the respondents to rank their opinions in a decreasing order of importance. India. Data analysis was done using SPSS software.2 and 3 Descriptive profile of respondents (n=100) Gender P r e ta e ec n g F m le e a M le a 0 2 0 4 0 6 0 8 0 10 0 Fig 1 Fig 2 Age 40 . Data was collected by personally contacting the respondents and explaining in detail about the survey. Data collection The study entailed data collection with the help of a questionnaire from the residents of National Capital Region of New Delhi. the break-up of which is given in Figure 1. A total of 120 customers from different areas were contacted and 100 correctly completed questionnaires were obtained from all the customers. The statistical analysis methods employed was factor analysis.as well as expert opinion in an iterative manner.

5 82 2.5 63 3.6 0 4 0 2 0 0 P rce e nta e g B l w1 eo 8 1.0 65 A o e5 bv 1 Occupation 6 0 4 0 2 0 0 S r ic ev e B s es u in s S dn tu e t H u e if o s -W e Pre t g ec n a e Fig 3 Findings and Analysis Factor Analysis for factors affecting car purchasing decision 40 .

3% of the variance is being shared or common to other statements. The nine factors and their components is given in table 7. Refer Table 2.769 1650. Varimax rotation (with Kaiser Normalization was converged in thirty-one iterations.9% of the sample and in remaining 23.Common Factor Variance Communality of each statement refers to the variance being shared or common by other statements. It means there is a significant difference between the factors affecting car purchasing decisions. “Bartlett’s Test of Sphericity” [Strength of relationship among variables is strong.] Ho : There is significant indifference of all the factors affecting car purchase decision H1 : There is significant difference of all the factors affecting car purchase decision The observe significance level is 0. Thirty items were reduced to nine orthogonal factor dimensions which explained 73. With reference to the first statement. Reliability of Data Table 1: KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy. there may occur some sort of error.555% of the overall variance (Table 4) indicating that the variance of original values was well captured by these nine factors.0000 which is less than . The respondent ratings were subject to principal axis factoring with varimax rotation to reduce potential multicollinearity among the items and to improve reliability on the data (see Table 6: Rotated Factor Matrix). 40 .Factor analysis was performed to identify the key dimensions affecting purchase of cars provided by different car manufacturing companies. It presents good idea to proceed to factor analysis for the data. we can interpret that there is no error in 76. Chi-Square df Sig. the extraction is .000 Kaiser-Meyer-Olkin [Index for comparing the magnitudes of the observed co-relation coefficient to the magnitude of the partial correlation coefficients] the From the above table. Communality”.000 435 .05. which is small enough to reject the hypothesis. Bartlett's Test of Sphericity Approx. .833 which indicates that 83.1%.

The total initial variance in the new components will be 30.000 1.000 1.000 1.650 S1 S2 S3 S4 S5 S6 S7 S8 S9 S10 S11 S12 S13 S14 S15 S16 S17 S18 S19 S20 S21 S22 S23 S24 S25 S26 S27 S28 S29 S30 Extraction Method: Principal Component Analysis.628 .000 Extraction .746 .000 1.000 1.000 1.803 .000 1.687 .000 1.662 .000 1. Table 2: Communalities Initial 1.783 .000 1.875 .000 1.684 .000 1.000 1.000 1.000 1.000 1. 40 .000 1.695 .857 .795 .710 .000 1.835 .731 .642 .782 .000 1.“Eigen Value”: Indicates the amount of variance in the original variables accounted or by each component.674 .692 .000 1.715 .000 1.653 .000 1.000 1.707 .000 1.642 .000 1.760 .000 1.800 .000 1.833 .851 .762 .000 1.728 .000 1.683 .

716 5.905 95.439 .292 51.455 3.188 1.555 3.539 11.947 2.102 23.038 .394 73.543 8.500 .960 5.431 99.537 99.924 94.327 11.501 .379 1.547 .398 11.059 66.435 62.280 4.161 3.Table 3: Total Variance Explained Extraction Sums of Squared Loadings % of Cumulative Total Variance % 7.766 .059 66.631 1.435 62.188 7.815 .543 2.891 .555 Component Total 7.555 Extraction Method: Principal Component Analysis.470 8.948 .721 56.403 91.608 98.183 .266 73.432 2.543 8.464 90.218 4.099 92.756 22.855 57.716 1.000 Rotation Sums of Squared Loadings % of Cumulative Total Variance % 3.239 5.909 6.889 85.892 .667 87.421 .710 2.712 1.200 1.227 10.476 49.194 .239 1.725 69.870 2.706 70.717 79.470 2.080 10.218 1.161 .489 .160 76.129 .706 70.161 1.289 1.798 35.960 1.018 .878 1.277 .245 .976 .292 51.520 40.798 35.102 3.672 11.477 43.209 .796 .715 2.631 5.631 89.752 96.089 .697 97.356 7.297 .475 1.556 8.278 81.567 .718 5.539 2.112 3.564 1.083 3.394 73.112 1.991 93.018 3.721 56.634 .330 .327 3.672 23.672 3.947 7.010 1.647 97.070 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Initial Eigenvalues % of Cumulative Variance % 23.364 63.672 23.396 4.455 1.350 2.967 .234 100.823 1.468 .345 2.477 43.396 1.683 . 40 .297 99.268 32.226 .271 .113 83.

which is 6.364 % of the total variance of 30 Explain a variance of 1.266 % of the total variance of 30 40 . which is 10.556.398.756 % of the total variance of 30 Explain a variance of 3.200% 63.718.725 % of the total variance of 30 Explain a variance of 1.476 % of the total variance of 30 Explain a variance of 2.Table 4: Cumulative Frequency 11.268 % of the total variance of 30 Explain a variance of 2. which is 8. which is 11. which is 10.555% Component 1 Component 2 Component 3 Component 4 Component 5 Component 6 Component 7 Component 8 Component 9 Explain a variance of 3.543.350% 40.083% 32. which is 5.280.327 % of the total variance of 30 Explain a variance of 3.327.909.327% 22.564% 69.289% 73. which is 8. which is 4.520 % of the total variance of 30 Explain a variance of 2.855 % of the total variance of 30 Explain a variance of 1.870% 49.345% 57. which is 7.356.080.

33 0. Component Matrix: This table reports the factor loadings for each variable on the unrotated components or factors. With the help of Fig1.11 1.6 0.49 0.21 0 . we can just visualize that nine factors are reduced with eigen value greater than 1.54 2 .0000 Table 5.4 2 0.1 8 0.02 0.5 7 0. we can interpret that 30 statements are now reduced to 9 components contributing 73.1 6 Eigenvalue 4 3.0 7 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Component Num ber Fig 4 With the help of table 3 and 4.23 0.555% of the total variance. Scree plot.13 0 .2 7 0.19 2 1.09 0.72 1.68 0. Component Matrix 40 .82 0 3 .63 1.5 0.28 0.95 0 .3 0 .19 0.54 2.4 4 0 .22 1.Scree Plot 8 7.1 6 0.

718 -.430 .333 .542 .363 .303 .108 .354 .527 -.109 -.256 -.211 .232 .649 -.327 .347 4 -.129 -.117 Extraction Method: Principal Component Analysis.300 .119 5 .291 .232 -.168 .122 -.139 .395 -.104 .254 .138 .121 -. Table 6: Rotated Component Matrix 40 .138 -.171 -.191 -.245 .123 -.112 -.227 .459 .100 .698 .186 .311 .357 . In these cases.117 .537 . This is done by looking for a common thread among the variables that have large loadings for a particular factor or component.124 -.166 6 7 .652 -.272 .154 -.367 .225 -.100 -.131 -.163 -.267 .265 -. Each number represents the correlation between the item and the unrotated factor.116 -.119 8 -.422 .278 -.229 -.207 .323 -.581 -.395 .144 .528 -.210 9 .503 .141 -.294 -.176 .252 -.163 .498 .161 .271 .108 .418 -.343 -.170 .125 -.592 . It is possible to see items with large loadings on several of the unrotated factors.808 -.279 .107 .368 -.106 -.161 -.115 .337 .Component S1 S2 S3 S4 S5 S6 S7 S8 S9 S10 S11 S12 S13 S14 S15 S16 S17 S18 S19 S20 S21 S22 S23 S24 S25 S26 S27 S28 S29 S30 .170 .427 1 .271 .398 .699 .147 .312 .288 .306 -.247 .535 .267 -.156 -.205 -.503 .344 .220 .689 .341 -.663 .388 -.551 .627 . it can be helpful to examine a rotated solution.119 -.195 .186 -.114 .237 . This correlation helps to formulate an interpretation of the factors or components.112 .343 -.338 .599 2 .236 .216 -.569 -.621 -.667 -.153 .244 .183 -.541 -.166 .617 . a 9 components extracted.145 .164 .481 .273 .196 .128 .249 .171 .251 .470 .430 -.226 -. which makes interpretation difficult.178 -.205 -.106 .104 -.139 .191 .158 -.103 -.484 .217 .135 -.730 .377 -.628 3 .462 -.223 .390 -.516 .177 .102 -.223 .197 .499 .132 .227 .188 .154 -.228 .115 .180 .187 .665 .106 -.346 -.224 .751 .157 .273 .382 -.335 .

152 -.513 .193 . With the help of table 6.413 .337 -.226 .271 .120 . Table 7: Factors Factor 1: • • • • S19 : Information Provided By Salesperson S25 :Safety S27 : Easy Availability Of Spare Parts S29 : Technology 40 .821 .194 .143 -.263 .323 .551 .191 .208 .250 -.570 .207 -.885 -.167 .272 .212 .461 .205 .591 .374 .225 -.422 -.134 . we can categorize each statements depending upon the factor loadings and shown in table7.129 .753 -.107 .426 .153 -.466 -.152 .111 .344 -.107 .482 -.566 -.121 .222 .189 -.139 -.138 .308 .269 -.187 -.205 .114 -.148 .141 .103 .274 .213 -.826 .109 .379 .115 .537 -.136 .499 .290 .148 .238 .670 .114 .195 -.191 .117 -.192 .851 -.175 .195 .332 -.311 .215 -.135 2 3 . a Rotation converged in 31 iterations.755 .179 .253 .158 -.643 -.152 -.385 .447 .201 Extraction Method: Principal Component Analysis.175 .799 .280 .429 .178 -.308 -.187 .122 .281 .860 .329 .134 -.Component 1 S1 S2 S3 S4 S5 S6 S7 S8 S9 S10 S11 S12 S13 S14 S15 S16 S17 S18 S19 S20 S21 S22 S23 S24 S25 S26 S27 S28 S29 S30 .131 -.151 -.413 .799 8 9 .113 .217 .190 .157 -.221 .190 .178 .276 .160 .232 .150 -.140 -.182 -.391 -.124 .123 -.165 .233 .151 -.765 7 -.304 4 5 6 .302 .219 .215 . Rotation Method: Varimax with Kaiser Normalization.371 .122 .152 -.156 -.225 .112 .289 .636 .158 .256 .295 .293 .481 .821 .177 .319 -.102 .180 .438 .135 .267 -.174 -.388 -.224 .543 -.246 -.213 .265 .570 -.235 .591 .404 .210 .172 -.282 .161 .284 -.120 .108 .105 .414 -.872 -.809 -.

Birthday S15 : Insurance Facility S18 : Credit Card Acceptance S26 : Car Accessories Factor 4: • S14 : Installment Payment Facility • S16 : Location Of The Car Dealer Shop • S24 : Looks • S28 : Availability Of Service Station Factor 5: • • • • S4 : Status Symbol S12 : Advertisements And Promotions S17 : Home Delivery Facility S30 : Overall. I Am Satisfied With My Car I Own Factor 6: • • • • S1 : Price Of The Car S2 : You Take Suggestions Of Your Family Members S9 : Family Members & Friend Circle S13 : After Sales Service Factor 7: • • S20 : Availability Of Variety Of Cars Under One Roof S21 : Information Provided By Various Car Related Magazines 40 .Factor 2: • • S10 : Government Policies And Regulations S11 : Import Duties Imposed By Government Factor 3: • • • • • • • S3 : Family Needs S5 : Brand Image S6 : Income Level S8 : Special Family Programs/Events Like Anniversary.

028 -.047 .042 -.025 -.062 .148 .009 .039 .021 -.289 .043 .084 .074 -.003 -.225 .170 6 .050 .035 .051 -.113 -.076 -.071 .022 .054 -.149 .054 -.027 .311 -.087 -.164 -.001 .117 7 -.091 -.470 -.022 .073 .002 .139 -.076 -.158 -.100 .085 -.000 -.031 .082 .034 .563 .013 .329 -.053 -.032 .179 .164 .096 . Rotation Method: Varimax with Kaiser Normalization.019 .250 .003 .061 4 -.048 -.212 .044 -.029 .193 .386 -.146 -.219 .193 -.097 -.008 .261 .081 .116 -.099 .011 .028 -.027 .054 .028 -.084 .011 .147 -.132 Extraction Method: Principal Component Analysis.444 .240 .291 -.023 .080 -.025 -.105 .010 .240 -.101 .042 .033 .305 .017 .078 .191 -.041 .282 -.077 -.018 -.040 .111 -.051 .175 .079 -.358 .040 .145 -.001 -.057 -.048 -.026 .050 .026 -.005 -.295 .130 .022 -.016 -.116 -.004 .068 .125 .226 .060 -.105 .022 .100 .124 -.099 -.001 .049 -.081 .019 .055 .062 .018 -.164 .187 -.163 .030 .001 .122 .201 9 .010 -.094 .209 .042 .179 .120 .031 .054 -.627 .041 .029 .064 -.067 -.035 -.033 -.000 -.119 -.021 -.037 -.347 -.018 -.196 .007 .058 -.037 .087 -.004 -.150 -.071 -.010 .079 .200 -.080 .110 .026 .129 -.084 .171 -.079 -.035 .018 -.035 -.102 .009 .010 -.006 .001 .150 .061 -.031 .102 -.400 .226 .023 .386 -.001 -.056 -.059 .076 .046 .080 -.097 -.078 5 -.075 .020 -.103 .111 -.067 -.244 .065 .099 .020 -. 40 .130 -.132 -.147 .013 -.068 .035 -.149 .001 .150 2 -.248 .144 .282 -.035 .289 -.017 .069 .055 .075 .202 -.Factor 8: • • S22 : Mileage S23 : Power Factor 9: • S7 : Festival Season/Offers Table 8: Component Score Coefficient Matrix Component 1 S1 S2 S3 S4 S5 S6 S7 S8 S9 S10 S11 S12 S13 S14 S15 S16 S17 S18 S19 S20 S21 S22 S23 S24 S25 S26 S27 S28 S29 S30 .034 .153 3 .006 .008 -.169 -.119 -.106 -.010 -.064 -.021 .109 8 -.177 -.084 -.120 .039 -.011 .087 -.092 .028 .047 -.148 .007 -.174 -.037 .185 .012 .007 .101 .079 .010 .112 .112 .040 .

features of the car in all are contributing in making car purchasing behaviour of customers. It is important for the car manufacturers and car dealers to be able to understand the different factors affecting the extent in car purchasing behaviour. While government obligations and various policies like import duties. table 7) of purchase of cars. The type of technology used and the wider reach of the service stations also affect the most on car purchasing decision. we can obtain the quantifiable data of each factor. advertisement and print media promotions. Factor 4. special occasions in family and the various services provided by car dealers. Factor 3 includes family needs. car accessories affects customers car purchase decision causing a variance of 3. Factor 5 shows the impact of various promotional activities and extra care taken by car dealers. The factor analysis results indicate that factor 1 (table 7) which consists of Information provided by salesperson. credit card acceptance. availability of service station showing customers accessibility to the service provided. various internal and external factors like extra care facilities. The coefficients between the statements and the factors are taken according to the statement affecting the factor ( on the basis of Table 7) Conclusions and Recommendations Since Indian Automobile market is continuously in the prowl of surging as a major car manufacturer. insurance facility. looks. safety. custom exemptions is seen as second most affecting driver (factor 2. Birthday. various information provided by car dealers. people are purchasing car as there is increase of income of common people as well as change in tastes and preferences of consumers. income level.From the table 8 of component score coefficient matrix. 40 . Table 7 includes installment payment facility. location of the car dealer shop. People are more conscious about the on spot information provided about various cars who serves according to the needs and wants of the customer. special family programs/events like Anniversary. easy availability of spare parts. location of the shops.This shows that importance of family decisions. Factors 6 shows the impact of suggestion provided by family members and peers as well as price and after sales service provided. Factor 7 includes the infrastructural benefits of the shop and the variety of cars it stores . brand image.080.The last but not the least ones shows the impact of factors of technical specifications of the car and the festive season offers Overall. technology are affecting the car purchasing behavior.

Age Below18 18-25 26-35 36-50 51 and above Occupation Service Business Student Housewife Section II According to you which of these Factors are Affecting Car Purchasing Decision in India.. Please fill according to instruction in bracket given below 40 .ANNEXURE Opinion Survey Section I Demographic Factors Name……………………………………………………………Gender………….

SDA-Strongly Disagree) Sl. 22. 26. 23. 15. 12. 6. 9. 14. 16. 8. 11. 17. Birthday Family Members & Friend Circle Government Policies And Regulations Import Duties Imposed By Government Advertisements And Promotions After Sales Service Installment Payment Facility Insurance Facility Location Of The Car Dealer Shop Home Delivery Facility Credit Card Acceptance Information Provided By Salesperson Availability Of Variety Of Cars Under One Roof Information Provided By Various Car Related Magazines Mileage Power Looks Safety Car Accessories Easy Availability Of Spare Parts 40 Strongly Agree Agree Neutral Disagree Strongly Disagree . 18. 7. 5.No 1. 20. 4. 25. 3.(SA-Strongly Agree. 19. 2. DA-Disagree. A-Agree. 24. 13. N-Neutral. 27. 21. 10. Statements Price Of The Car You Take Suggestions From Your Family Members Family Needs Status Symbol Brand Name Income Level Festival Season/Offers Special Family Programs/Events Like Anniversary.

30. Availability Of Service Station Technology Overall. 29. I Am Satisfied With My Car I Own 40 .28.

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