(A Study at PASCO Automobiles, Delhi)

Under the Supervision of
Mr. Navneet Kumar General Manager (Sales and Marketing) PASCO Automobiles

Submitted by :
Bhawna Sharma 05061118028 MBA (Marketing)


Guru Jambheshwar University of Science and Technology, Hisar (Haryana) 2005-2007



In this era of cutthroat competition, no company can even survive in the market place without knowing its and its products strengths & weakness. It has to fortify itself against threats from the environment and exploit its strengths or increases profits. And it order to do so, the company has to conduct regular surveys to know the customer’s opinions, needs and preferences. This helps the company to manufacture the product like wise for each customer’s expectations. It has now become more important for the customer confidence and higher positioning of buyer perception. Thus, Survey’s becomes genuine key to success. Our present study is on car segment. The car segment is dominated by many players viz. Maruti, Chevrolet, skoda, Hyundai, Tata Motors etc. Two major players viz. Maruti Udyog limited and Hyundai limited dominate the car segment. The market share of Maruti Udyog Limited is about 60% at resent. Other players constitute about 40% of total market share. Hyundai is the second largest car manufacturing in India. Our study will focus why Maruti captured a large market share and why others captured a little share. We will compare the both dominating companies. Then we will try to understand the strategies of both companies, which help these companies to capture a large share of the market. Further we will also study the consumer’s behavior towards the small segment cars. There will be an effort to study the car owing patter also.


The Objectives of the study are: 1. To know the current market position of Maruti Udyog Limited. 2. To Study the Consumer Behaviour. 3. To Study the Brand preference of the consumer. 4. To Study the rapid changing perception of consumers towards small segment cars. 5. To Study the satisfaction level with after sales services of company. 6. To make suggestions to the company to improve the level of satisfaction among customers. 7. To know the price effect on the purchase of the cars.




Major Automobile Players in India
Maruti Udyog Limited
Maruti Udyog Limited is India's largest automobile company. Its main factory is situated in Gurgaon district, Haryana. The company, a joint venture with of Government of India with Suzuki of Japan, has been a success story like no other in the annals of the Indian automobile industry. The first cars rolled out for sale on 14th December 1983, (the Company went into production in a record 13 months), marking the beginning of a revolution in the Indian automobile industry.

Suzuki Motor Corporation
Suzuki Motor Corporation was incorporated in 1920. Today it is one of the leading manufacturing industry in automobiles. Suzuki Motor Corporation, with headquarters in Hamamatsu, Shizuoka, Japan is the leading international manufacturer of compact cars. The Company employs some 45,510 people worldwide. And it is represented in over 192 countries and areas. Its net sales have been exceeding the previous terms for the 8th consecutive year and its operating income for 7th consecutive year, and in the fiscal 2006/2007 the turnover reached about 3,163 billion yen with an increase of 15.2 percent over the previous year. The worldwide sales cover among other things 2.22 million automobiles and 3.06 million motorcycles. Suzuki has 35 main production facilities in 23 countries.

Hyundai Motor India Ltd.
Hyundai Motor Company, Korea, has constructed its largest overseas manufacturing plant in Chennai, India. Hyundai models include Santro, Accent and Sonata. Provides information about Hyundai dealers throughout India. Hyundai Motor India Limited (HMIL) is a wholly owned subsidiary of Hyundai Motor Company, South Korea and is the second largest and the fastest growing


car manufacturer in India. HMIL presently markets 34 variants of passenger cars in six segments. The Santro in the B segment, Getz Prime, i10 in the B+ segment, the Accent and Verna in the C segment, the Elantra in the D segment, the Sonata Embera in the E segment and the Tucson in the SUV segment. Hyundai Motor India, continuing its tradition of being the fastest growing passenger car manufacturer, registered total sales of 299,513 vehicles in calendar year (CY) 2006, an increase of 18.5 percent over CY 2005. In the domestic market it clocked a growth of 19.1 percent a compared to 2005, with 186,174 units, while overseas sales grew by 17.4 percent, with exports of 113,339 units.

Daimler Chrysler India Pvt. Ltd & Mercedes-Benz India Ltd.
Daimler Chrysler India is a 100% subsidiary of Daimler Chrysler group and one of the first auto joint ventures set up in India. Daimler Chrysler India has a worldclass production facility in Pune, in Maharastra State.

Ford India Limited - Subsidiary of Ford
Ford has invested heavily in India, with a Rs. 1700 crore integrated manufacturing plant at Maraimalai Nagar, equipped with state-of-the-art Ford technology and employing 1,000 people. Models include Ikon and Mondeo. Gajra Gears Ltd. : manufacturer of automobile transmission gears.

Opel India
Manufactures the Opel Astra car in India Automotive seating systems and components for passenger cars,LCVs, tractors. S.K. Engineering & Allied Works has now become a world famous name for Dehusking and Splitting plant for pulses and peas. Our plants of capacities ranging from 50 to 150 tones per day are already installed and successfully 7

working in countries like Australia, Middle East, Canada, India, Nepal and Burma with more and more countries getting added to the list.

Tata Motors
India's most reliable, dynamic and futuristic automobile manufacturer. With more than 130 models spanning a wide range of Commercial Vehicles, Passenger Cars and Multi-Utility Vehicles, Tata Motors provides the wheels for India's growth.

Mahindra Ford India Ltd
Manufactures the Ford Escort range of cars in India

Mitsubishi Lancer
All you want to know about the car Mitsubishi Lancer.

Honda City
Luxury cars from Honda




Maruti Udyog Limited
Maruti Udyog Limited is India's largest automobile company. Its main factory is situated in Gurgaon district, Haryana. The company, a joint venture with of Government of India with Suzuki of Japan, has been a success story like no other in the annals of the Indian automobile industry. The first cars rolled out for sale on 14th December 1983, (the Company went into production in a record 13 months), marking the beginning of a revolution in the Indian automobile industry. The Indian car market had stagnated at a volume of 30,000 or 40,000 cars a year for the decade ending 1983. In 1993, this figure reached a number of 1,96,820. Maruti's figures are a different story altogether. Maruti reached a total production of one million motorcars in March 1994, becoming the first Indian company to cross this milestone and crossed the two million mark in 1997. For the year ended 1997-98, Maruti posted a turnover of US$ 2.1 billion and a Profit Before Tax of US$ 244 million. During the year, Maruti produced over 350,000 vehicles, out of which 26,000 were exported. Maruti has made profits in every single year since inception, and has been paying dividends for ten years. Through the years Maruti has provided world-class Japanese technology, suitably adapted to Indian conditions and Indian car users. Maruti's market share figures show the response of customers: In 1997-98, its market share of vehicles was over 70%. In addition to leading in the economy car segment, Maruti is also the leader in the luxury car segment with a market share of 38%. Maruti also sells the Grand Vitara, sports utility vehicle (SUV) in India. The success of the joint venture led Suzuki to increase its equity from 26% to 40% in 1987, and further to 50% in 1992. As a result, Maruti changed from being a government company to a non-government company. With the introduction of economic liberalization from July 1991, the government realized the high growth potential of the passenger car market. It took note of the contribution of this 10

segment in promoting employment, technological up gradation of industry and contribution to government revenues. Policy changes took place accordingly. Maruti's excellent performance in the post-liberalization milieu is in keeping with the earlier trend set by it. As a result, the transfer of technology from Suzuki has been a smooth process. By February 1990, a local content of above 90% was reached for the Maruti 800.

Suzuki Motor Corporation
Suzuki Motor Corporation was incorporated in 1920. Today it is one of the leading manufacturing industry in automobiles. Suzuki Motor Corporation, with headquarters in Hamamatsu, Shizuoka, Japan is the leading international manufacturer of compact cars. The Company employs some 45,510 people worldwide. And it is represented in over 192 countries and areas. Its net sales have been exceeding the previous terms for the 8th consecutive year and its operating income for 7th consecutive year, and in the fiscal 2006/2007 the turnover reached about 3,163 billion yen with an increase of 15.2 percent over the previous year. The worldwide sales cover among other things 2.22 million automobiles and 3.06 million motorcycles. Suzuki has 35 main production facilities in 23 countries. Today, the Suzuki brand is synonymous with 'value-packed' products, which offer quality, reliability and originality. An integral part of the Suzuki concept to deliver 'value-packed' products lies in ensuring that the company uses the most modern manufacturing equipment and technologies together with factory workers and engineers. In addition, various activities are aimed at continually enhancing productivity.


Snapshot of Suzuki Motor Corporation
Joint Venture Agreement Equity Structure Sales (No of Cars) Financial year 2006-07 Sales (Net of Excise) Financial year 2006-07 Profit After Tax Financial year 2006-07 Employee Strength Facilities Diesel Power train Plant Joint Venture February 1981 October 1982 54.2% Suzuki, Japan, Balance with Other Financial Institution and Public. 674, 924 including 39,295 exports. INR 152.5 Billion, Yen 423.675 Billion , $ 3.499 Billion INR 15.62 Billion, Yen 42.22 Billion, $ 358.34 Million 4993 of Financial year 2006-07 Gurgaon: 3 vehicle assembly plants Manesar: 1 vehicle assembly plant Head Office in New Delhi, India Regional offices: 16 Suzuki Power train India Limited (SPIL), Joint Venture between Suzuki Motor Corporation 70% Equity the rest is with Maruti Suzuki India Limited. Global hub for Diesel engines and transmissions for Suzuki worldwide. 15 Joint Venture companies, including Suzuki Power train India Limited for component supply.

Subsidiary Companies Network Reach Financial year 2006-07

True Value: for sale and purchase of pre-owned cars Maruti Insurance: for insurance of Maruti vehicles (four companies) Maruti Finance: for financing Maruti vehicles Sales 398 Outlets covering 228 cities Service 2421 workshops covering 1193 cities Pre-owned Car Sales 242 dealers covering 148 cities


Maruti Insurance
In line of the vision of providing enhanced services and conveniences of the customers Maruti started Insurance business like Maruti Finance and Maruti True Value. Our studies indicated that customers are looking for insurance products that provide them support, comfort and convenience, more so after their vehicle has met with an accident. Unfortunately, most of these attributes were missing in the market for car insurance. Maruti Insurance was launched to fill this gap. For this initiative, Maruti Udyog Limited have set up insurance distribution subsidiaries, Maruti Insurance Distributors Services (MIDS) and Maruti Insurance Brokers Limited (MIBL) in our dealerships. The subsidiaries of Maruti Udyog Limited have tied up with leading general insurance companies of the country as their licensed corporate agents. While MIDS has partnered with Bajaj Allianz General Insurance Company, MIBL will work with National Insurance Company Limited. Overall, the initiative in the form of Maruti Insurance promises to be a hassle free and convenient service for Maruti customers.

On-line Motor Insurance renewal
Recently, Maruti Udyog Limited introduced the 'online motor-insurance renewal' system. Again, giving flexibility and making their transactions hassle free, transparent and convenient, Maruti has taken a big leap towards customer satisfaction.


Customers can now renew their car insurance instantly, on the Internet while paying electronically through credit or debit card. Maruti insurance activities provide very much convenience to the customers. It reduces the efforts of the customers for taking insurance. These steps are very helpful to increase the sale of Maruti’s products.


Maruti Finance
Maruti Finance way back in 2002 in line of the vision of providing enhanced services and conveniences to the customers. Leading companies in auto-finance partnered with us in this venture with a mission to offer convenience, transparency and value for money to our customers. Maruti Finance is one of the auto related service businesses that they entered to provide complete mobility-related solutions to the customers. These businesses have helped us strengthen our relationship with the customer.

Benefits for the Customer
Transparency and Convenience: Through this initiative the dealerships serve as one-stop shops for customers. The car finance is offered at a transparent rate of interest, and saves customers the cost and inconvenience involved in searching for the "best deal" in the market. Interest Rate: Despite increasing interest rates, the offer rates have been competitive because Maruti Udyog Limited were able to bring together country's leading auto finance companies under a single umbrella. Wider reach:


In addition, we have been able to offer convenient finance options even in upcountry areas where there is limited availability of organized finance. Besides, it has helped to reach wider range of customer profiles. Additional services: Customers availing of loans from Maruti Finance will have the option of securing additional finance for purchase of extended warranty on their cars for upto four years. It will also provide loan "top ups" to new car customers for car insurance and purchase of Maruti Genuine Accessories.


Sales and Service
The Maruti Dealerships are the most visible parts of customer focus. Right from the way a prospective customer is welcomed to the dealership to the entire buying experience and the service experience, customers feel very 'invited'. Its what makes customers loyal to Maruti cars too. Almost 50% of our new car customers are existing customers. Almost 90% people, who trade in their used cars through 'Maruti True Value', finally buy a new Maruti.

Customer focus
Customer focus is very important, amply evident from the fact that 'Customer Obsession' is our first core value. We have been chosen by customers as the best car manufacturer in terms of customer satisfaction seven years in a row in the prestigious J D Power survey.

Wide range of cars
Maruti Udyog Limited offers 10 models and over 100 variants, ranging from the people's car, Maruti 800, for less than Rs 200,000 ($ 5000) ex-showroom to the premium sedan SX 4 and luxury SUV, Grand Vitara.

The Complete Car Experience
Maruti goes ahead to give the customer a complete car experience - a solution to have all auto needs under a single roof. Allied services like Finance (Maruti Finance), Insurance (Maruti Insurance) and sale, purchase and trade-in of pre owned cars (True Value) help customers have a hasslefree ownership experience.


Maruti Udyog Limited have a nationwide footprint in over 1172 cities in India and export to over 100 countries across the globe. Maruti grabbed the Indian automobile market. Maruti is the leading automobile organization.

Authorised Service Centers
Maruti also have been provided very approachable service centers all over the country. Maruti is also on the top regarding this matter. Maruti has large numbers of stud centers.

Easy Availability of Spares

It is also the strength of Maruti that the spares of Maruti are easily available into the market.
Service Quality standards have been one of the most important Kaizens followed at the workshops. Maruti Suzuki has been way ahead of the industry average and has been ranked No.1 in the JD Power Customer Satisfaction Index seven times in a row.

Special Service initiatives for women customers
Maruti offers a special service initiative to women, by picking up the car for service and dropping it off once completed. This is especially helpful to working women who need more time and comes in as a great service. This was a result of one of the communication meetings when the suggestion was put forward and immediately rolled out.




Consumer Behavior
The task of marketing is to identify consumers’ needs and wants accurately, then to develop products and services that will satisfy them. For marketing to be successful, it is not sufficient to merely discover what customers require, but to find out why it is required. Only by gaining a deep and comprehensive understanding of buyer behavior works to be mutual advantage of the consumer and marketer, allowing the marketer to become better equipped to satisfy the consumers’ needs efficiency and establish a loyal group of customers with positive attitudes towards the company’s products. Consumer behavior can be formally defined as––the acts of individuals directly involved in obtaining and using economic goods and services, including the decision processes that precede and determine these acts. The underlying concepts of this form a system in which the individual consumer is the core, surrounded by an immediate and a wider environment that influences his or her goals. Passing through a number of problems solving stages leading to purchase decisions ultimately satisfied these goals. In the past, the main input to the theory of consumer behavior has come from psychology. More recently, the interdisciplinary importance of consumer behavior has increased such that sociology, anthropology, economic and mathematics also contribute to the science relating to this subject.

Factors Affecting Consumer Behavior
1. Social and Cultural Influences Culture is learned behavior that has been passed down over time, reinforced in our daily lives through the family unit and through educational and religious institutions. Cultural influences, therefore, are powerful ones and if a company does not understand the culture in which a particular market operates, it cannot hope to develop products and market them successfully in that market.


In some cases, they constitute individual market segments for certain product areas. Subcultures can also exist within the same racial groups sharing common nationality. Their bases may be geographical, religious or linguistic differences and marketers must recognize these differences and should regard them as providing opportunities rather than posing problems. 2. Specific Social Influences

Social Class
This is the most prominent social influence. Traditionally, one of the chief determinants of social class was income. Since pay structures have a great deal in terms of the lower C2, D and E categories moving more towards level previously enjoyed by the higher A, B and C1 categories over past thirty years or so, classification of consumers on the basis of lifestyle is becoming more meaningful today. Income aside, social class is an indicator of life-style and its existence exerts a strong influence on individual consumer and their behavior.

Reference Groups
This can be described as a group of people whose standards of conduct mould an individual disposition, beliefs and values. This group can be small or large. Reference group can range from the immediate family to individual is unlikely to deviate too far from the behaviors norms laid down by the members of a club or hobby group. Reference group theory not state that individualism can not exit within a group but it does suggest that even rigid independent thinkers will at least be aware of what is considered normal within a group. In a small group be the family the advice and opinion of these who are regarded as knowledge will be highly regarded. Such people are termed opinion leaders. Extraneous to groups’ influences might also be at the work in opinion forming, and here there is the existence of opinion leaders who are outside of the immediate group. The opinion followers take up their opinions. In the case of a number of products, deliberate direct appeal is made to the so-called snob appeal. This is done by using marketing of company’s products acceptable to


opinion leaders, or famous personalities (Who are paid for their endorsement) in the hope that other sectors of the population will follow them. The family life cycle traditionally contains six stages, although more recently different division has been quoted. These divisions are: Unmarried––Here, financial commitments and family responsibilities tend to be low, with disposable income being high. These younger unmarried consumers tend to be more leisure-oriented and more fashion conscious. This segment thus comprises a very important market for many are and innovative products. Young newly married couples and no children––This group focuses its expenditure on that item considered necessary for setting up home. Young married couples with children––Outlay here is children oriented, and there is little surplus cash for luxury items. Although they are respective to new product ideas. This group sees economy as being the over-riding factor when making purchases. Older married couples still with children at home––Disposable income will probably have increased, often with both parents working and children being relatively independent. In some cases children may be working and the parents are able to be engage increasingly in leisure activities often in the form of more than the standards annual holidays. Consumers durable, including major items of furniture, are often replaced at this stage. Such purchases are often made with different motivation to the original motivations of strict functionality and economy that was necessary at an earlier life cycle stage. Older married couples with no children living in the home––Here, disposable income can be quite high. However, tastes are like to be firmly rooted reflected in unchanging patterns. Thus marketers will have difficulty when attempting to change predisposition, soothe best policy will be through attempts to refine and add value rather than to introduce new concepts and ideas. Older retired couples and single people––At this stage, most consumer durable have been purchased although occasional replacements will be required.


Purchasing is low and pattern of purchasing is conservative and predictable. This group of consumers increasing rapidly. Such people tend to be less reliant solely on the State Pension, many having subscribed to occupational pension from former employers, which boost the state pension. This allows to leads more active lives and the tourist industry now actively targets this particular market segment.

Individual Buyer Behavior
As well as being influenced by the outside environment, people also have their own individual beliefs. It is important that we should know that these are in order that we can better understand how individuals respond to marketing efforts. Individuals are different in terms of how they look, their education, their feelings and their responses to marketing efforts. Some will behave predictably and other less predictably according to an individuals personality. The individual consumer absorbs information and develops attitudes and perceptions. In marketing terms, this will affect an individual need as well as determining how to satisfy them. The task of marketing is to identify patterns of behavior which are predictable under given conditions, which will increased the marketer ability to satisfy customer needs, which is at the very base of marketing. In order to more fully understand this concept we shall concentrate on five psychological concepts to understand buyer behavior. These five psychological concepts are:

Personality and Self-concept
This means how we think other people see us, and how we see ourselves. As individuals we might wish to create a picture of ourselves that is acceptable to our reference group. This is communicated to the outside world by our individual behavior as it is related to our purchase and consumption of goods. The sum of this behavior is an individual self-statement and is a non-verbal form of communication. Self is influenced by social interaction and people make purchases that are consistent with their self-concept in order to protect and enhance it. The


constant process of re-evaluating and modifying the self-concept results from a changing environment and changing personal situations. Personality is the principal component of the self-concept of the self-concept. It has a strong effect upon buyer behavior. Many purchase decisions are likely to reflect personality, and marketer must consider personality when making marketing appeals. 2. Motivation An early thinker insofar as motivation in concerned was the psychologist Sigmund Freud who lived between 1856 and 1939. His theories have been criticized, but his theories are of fundamental value. He was responsible for identifying three level of consciousness. The conscious, which includes all sensations and experience of which we are aware. The preconscious, which includes the memories and thoughts, which we have stored from our experience and we can bring to mind when are wish. The unconscious that is the major driving force behind our behavior and this include are wishes and desires, of which we are not always aware. Within these levels of consciousness there are mental forces at work attempting to reconcile our instincts with the social world in which we live and there are not always in accord so we experience emotional difficulties. Freud’s terms for these are: The id, which is the reservoir for all our psychological and sensual instincts. It is selfish and seeks instant gratification regardless of social consequences. The superego, which develops as we grow and learn from family, friends, teachers, and other influences. It functions as our internal representation of the values and morals of the society in which we have grown up. It is a potent force and comes in to conflict with the demands made your id for the gratification of what might be anti social desires. The ego, which attempts to resolve the conflict between the id and the superego and tries to redirect our id impulses in to socially and morally acceptable modes of expression.


Marketers are interested in motivation when it relates to purchasing behavior. This behavior related to the motive for wishing to possess the goods or services in question, and it has been termed goal-related behavior. For a motive to exist there must be a corresponding need. Motives like hunger, thirst, warmth, and shelter are physiological. Others, like approval, success and prestige are psychological. Motives like staying alive are instinctive while motives like cleanliness, tidiness and proficiency are motives that are learned during life. We can also discern between rational and emotional motives. Most purchasing decisions are a composite of such motives, quite often a deciding factor might be price which is of course more of an economic restriction than motive. It can therefore, be seen that a number of motives might be at play when making a purchasing decision––some motives are stronger than other is and the final decision might be a compromise solution. In 1954 the psychologist Abraham Maslow put forward his classic Hierarchy of Needs, which is shown in the Figure 1 given below. This hierarchy is now central to much thinking in buyer behavior.

Self-Needs Esteem Needs Social Needs Safety Needs Physiological Needs
Fig.1 Hierarchy of Needs (From A. H. Maslow)

Physiological needs are concerned with self-preservation and these are the basic needs of life involving those elements required to sustain and advance the human race. Safety needs relate to protection against danger and deprivation. Once the more basic needs have been satisfied, behavior is influenced by the need for belonging, association and acceptable by others. In


many texts the next two needs are put together, but here we have separated respect and self-esteem in terms of qualification and recognition above this. The final need is what Maslow termed Self-actualization, which means self-fulfillment in terms of becoming that entire one is capable of being and one has reached the pinnacle of personal potential. It is argued that when more basic needs like hunger and thirst have been satisfied, then individual will move towards satisfying higher order needs towards the apex of the pyramid and look increasingly for satisfactions that will increase status and social acceptability. When the apex of the pyramid has been reached and other satisfaction has been achieved the prime motivation is then one of acquiring products and accomplishing activities that allow self-expression. This can be in the from of hobbies, particularly collecting, which may have been desired for a long time, but have been neglected until the lower order needs have been satisfied. It is of course not possible to formulate marketing strategies on the hierarchy theory on its own. Its real value is that it suggests that marketers should understand and direct their efforts at the specific needs of their customers, wherever the gods one is attempting to promote is in the hierarchy. 3. Perception Unlike motivation that required retention to stimulus, perception relates to the meaning that is assigned to that stimulus. As marketers are interested in how buyers perceive and react to products in relation to such matters as quality, aesthetics, price, and image, since products not only exist in practical terms, but also how the are perceived by consumers in relation to need satisfaction. This perception by buyer is affected by the nature of the product itself, by the circumstances of the individual buyer, and by the buyers’ innate situation in terms of how ready they are to make the purchase in terms of needing it at a particular point in time, it is, of course, necessary the product or service (i.e. the stimulus) receives the attention of the potential buyer.


Our strongest basic attitudes are implemented in our formative years and these come largely from the influence of our close family group another social interaction. More refined attitudes develop later. In marketing terms, the sum total of our attitudes can be regarded as a set of conditions that a potential buyer has in relation to stores or companies go out of their way to engender favorable attitude and it is why manufacturers see to induce loyalty towards their particular brand of products. Once this attitude has been establishes in the mind of the customer, it might be difficult to alter. Even a minor dissatisfaction can against a manufacturer or retail establishment, and a method of attempting to change attitude is through promotional appeals and through a program of public. 5. Learning Experience precedes learning and this can alter perceptions and attitudes. It is also intensifies a shift in behavior, so when a buyer perceives that certain products are more favorable than others within his or her reference group, repeat purchases are made to promote this acceptability. Every time a satisfactory purchase is made, the consumer becomes less likely to depart from this purchasing behavior. The result is brand loyalty, and the ultimate success of marketing is in terms of customer making repeat purchase of becoming brand loyal. A fundamental aim of marketer is to bring about satisfaction for their customer and this is cardinal to the concept of the marketing. Having looked at some of the issues that make up consumer behavior, we can now like at the consumer central goal. Because they are continually occupied in the quest for satisfaction, competitive offerings will always have potential appeal. Firms must seek continuous improvement to the products or services and the levels of support they provide. This is a matter of balancing costs and potential profit with customer demands, as total satisfaction, except in a minority of cases, is an unrealistically expensive goal. Models of Consumer Behavior


Now that we have examined the psychological factors that influence consumer buyer behavior now we are in a position to examine some consumer models. The aim is to bring together our present. Understanding by presenting a series of models that endeavor to explain the purchase decision in relation to pertinent variables. The Buyer Decision Process Different buying tasks present different levels of complexity to the purchaser. The AIDA model that is presented in Figure 2 considers the steps leading to a purchase in the form of a sequential problem solving process. Awareness ↓ Interest ↓ Desire ↓ Action
Fig. 2 AIDA Model of Buying Behavior

Late Dr. E. K. Strong first promoted this classical model in 1925 and it is still useful today because it is easy to apply as it describes the activities involved in the buyer process. Products and services vary in the complexity of decision making involved in their acquisition. The purchase of a new shower unit, for instance, is more complicated than the purchase of a tube of shower gel.


Robinson, Faris, and Wind in 1967 put forward a model that viewed purchasing as a problem. This is shown in Figure 3 and it describes the activities involved in the purchasing process.
Marketing Inputs Product Place Promotion Price Purchase Decision


Product Choice Location Choice Brand Choice Other Choice

Psychological Input Culture Attitude Learning Perception

Problem Recognition ↓ Information Search ↓ Evaluation of Alternatives ↓ Purchase Decisions ↓ Post Purchase Behavior
Fig. 3 The Buyer Decision Model

An individual needs a particular product. Information will be short from a variety of sources including family and friends (Called word of mouth) from advertising, from catalogues, from visits to retail establishments, and from many other sources. The more complex the products the greater will tend to be this


information search. The task of marketing is to ensure that the company products receive high exposure during these information search periods and that the best point of product is emphasizes during the evaluation of alternatives phase. This will put the company’s product in the best light prior to the purchase decision because even then the consumer is still susceptible to further influences in relating to marketing the correct choices. Marketer must also be aware of post purchase behavior because this can affect repeat business and forward looking companies attach as much importance to after sales services as they do to making the initial sales. This reduces the degree of satisfaction (or dissonance) in the case of genuine complaints. One method that is now predicted for sales of major items like new motor cars is where companies follow up a sale by some form of communication by letter or telephone with their customers. This builds confidence in the mind of the customer in having made the correct purchasing decision. The terminology that has been attached to this kind of after sales follow up is customer care. The Adoption Process The buyer decision model (Figure 3) was not specifically designed for new products and its substance was concerned with search and problem solving. Everett Rogers advanced the model shown in Figure 4, and it related to new products. It is being with awareness. Marketers must first create awareness and then assist customer with subsequent stages of the process. Consumers’ can not being to consider a new product or service as a solution to need related

Awareness ↓ Interest/Information ↓ Evaluation ↓ Trial ↓ Adoption ↓ Post Adoption Confirmation 30
Fig. 4 The Adoption Process

problems without this awareness. Successfully innovative products should attempt to be problem solving as far as the customer is concerned. Awareness can come about as a result of the marketing effort of the company or simply by word of mouth communication. If the product has potential interest and appeal, then potential purchasers will seek further information. Consumer then evaluates the new products against existing products, and then makes an initial adoption by obtaining a trial sample. Which might be a free sample or a trial purchase. The adoption stage is started when a decision is made whether to use the product or not (In case of FMCG [Fast Moving Consumer Goods] goods). Post adoption confirmation is when that product has been adopted and the consumer is seeking reassurance about the wisdom of his purchase. After a major purchase, dissonance (termed as Cognitive Dissonance) is present in the sign of unease that that what was thought to be value for money at the time of purchase may not, after all, turn out to be true value. Such dissonance should be encountered by the provision is some kind of follow up either written or through the telephone. A more detailed model is suggested in Figure 5 that develops that adoption process. A series of inputs feed in to the knowledge base. The self-input includes the psychological notions of perception, attitudes, motivation, and learning. Similar to other inputs, they set the scene for knowledge to be interpreted into a favorable situation of awareness. Figure 5 also shows that persuasion governs the rate of adoption that is affected by relative advantage, compatibility, complexity, trial opportunity, and absorbing power. The model also allows for review after the decision stage, and here consumers can be sensitive

Relative Advantage ↓ Compatibility ↓ Complexity ↓ Trial Ability ↓ Absorbability 31
Fig. 5 New Product Purchasing Decision Process

to the influences of external information sources for promotional appeals and form such influences as reference groups. It can be seen that various inputs contribute to knowledge, ranging from personal factors to company marketing activity. Persuasion is an important phase and here a number of factors, which are function of the product itself, can lead to the decision whether or not to purchase the new product or service in question. The decision means adoption or rejection. If it is adoption, them good experience can lead to its continued adoption, but if the experience of the product or service is bad then it will be discontinued. Conversely, rejection, or later adoption, perhaps, in the latter case through hearing good experience of reference group members, who have purchased. Continued adoption and later adoption need confirmation in order to continue the repeat purchase pattern. It is important that we look an innovator categories insofar as purchasing behavior is concerned because consumers, as individuals, can be more, or less, respective to new product or service idea. The process of the diffusion of innovations propose that certain groups of consumers will take on new ideas more quickly than other groups and they tend to influence later consumer groups. These groups have particular common features. Innovators are the first small segment to take on new product ideas and they are likely to be younger people, from well educated, relatively they affluent background and having a high social status. They are more probably unprejudiced, discerning people whose understanding of the new product has been more objectively ascertained than through a sale people or company from promotional material. Early adopters, possesses some of the characteristics of innovators, but they are more part of local systems, acting as opinion leaders within their specific group.


Early majority adopters tend to be above average in terms of social class Awareness ↓ Knowledge ↓ Liking ↓ Preference ↓ Conviction ↓ Purchase
Fig. 6 The Innovation Adoption Model

and rely upon company promotional efforts for data. Opinion leaders of the early adopter category will tend to be their biggest inspiration. Late majority adopters tend to adopt the product or services because earlier groups have generally accepted it. Laggards make up the final group. They tend to be more careful and older and of lower socio-economic standing. Clearly, adopter category will tend to differ depending upon the new product or service being marketed. Hierarchy of Effects Lavidge and Steiner produced a Hierarchy of Effects model of purchasing behavior in 1961. The model starts at the awareness stage, but it could be argued that there is a stage prior to this, which is when the potential purchaser is completely unaware of the product or service offering, and it is through marketing communication that such awareness is made known. The model is described in Figure 6.




Advertising is any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor.

Key Concepts of Advertising
 Advertising contains the key concepts of mass media.  Advertising constructs messages.  Advertising has its own codes and conventions.  Advertising contains bias and ideology.  Advertising is influenced by commercial implications.  Advertising is interpreted differently by different people.  Advertising is the reflection of the real world and influences one’s perception of the real world.  Objectives of Advertising  To create mediums to promote an issue influence perceptions.  To understand the concept of the market segmentation.  To design advertising using the codes and conventions of the medium.  To utilize your knowledge of the course material.  To understand the key steps for creating a promotional campaign.

Media of Advertising
Selection of media is really a great problem before advertiser. He has to keep thousand things in his mind while selection one of these. There are many Ws in media planning that are who, where, what, when e.g.  Whom do we want to reach?  Where are they located?  What is the message?  When do we run the ads? 35

Advertising message is disseminated through numerous and varied channels or media. The major media in developed countries are newspapers and consumer magazines, television, direct mail, radio, business publications, outdoor and transport advertising in addition, a significant amount of advertising is invested in miscellaneous media, such as window display, free, local newspaper and shopping news publications, calendars and even sandwich boards.  Print Media  Newspapers  Magazines  Direct Mail  Others  Audio and Visual Media  Radio  Television  Cinema  Film Advertising (Documentary, Advertising Film, Sponsored Film)  Forms of Point of Purchase Advertisement  Neon Sign  Window Display  Counter Display  Wall Display  Show Rooms Display

Choice of Advertising Media
For the purpose of choosing the appropriate medium or media or advertisement, following factors should be taken into consideration: (i). Nature of Product


Nature of the product to be advertised has an important bearing on the medium of advertisement. Product should be classified in to broad categories, namely, consumer goods and industrial goods. Consumer goods can be advertised in newspapers, magazines, radio, and television and through outdoor displays. But industrial goods can be advertised profitably in the specialized trade, technical and professional journals.


Nature of Market

Nature and extent of market can be determined by various factors like geographical region, size of population and purchasing power of the population. The market may be either local or national. Film advertising and outdoor advertising are more suitable for local products. Newspapers are the most suitable for advertising products, which can be sold throughout the country. (iii) Objective of Advertising The objective of the advertising program is very important to determining the choice of advertisement media. The objectives may b e introduction of new product, to increase demand of an existing product, or to avoid competition by the rivals. If advertising is not to be carried on a mass scale to have big impact in the short and long run, a combination of various advertising media may be chosen. Sometime advertisements are inserted in the newspapers and magazines to complement the readers in order to enhance the goodwill of the advertiser. (iv) Circulation of Media If the media have greater circulation, the message of the advertiser will reach a larger number of people. It may be mentioned that newspapers have the widest circulation, but other media have limited and selective circulation. (v) Financial Consideration The cost of advertising media is an important consideration and it should be considered in relation to (a) the amount of funds available, and (b) the circulation of the media. In the first instance, the amount of funds available may dictate the choice of a medium or a combination of media of advertisement, and secondly,


the advertiser should try to develop some relationship between the cost of the medium and its circulation. The cost-benefit analysis will enable the advertiser to take right decision in regard to selection of the advertising media. (vi) Type of Audience If the message is to convey to illiterate or less literate people, radio, television and cinema advertisement will serve the purpose in a better way. Newspapers, magazines, displayed and direct mail are used to convey the message to the educated people. Since different languages are popular in different regions, advertisements in different languages may be given to popularize the product. (vii) Life of Advertisement Outdoor display and magazines and direct mail have sufficiently longer life but the life of newspaper, radio and television advertisements is very short unless they are repeated regularly. Therefore, the advertiser should also take in to consideration the duration for which he wants to create the impression in the minds of the prospective customers. (viii) Media Used by Competitors The choice of advertising media also depends upon the media used by the competitors. If a product is being advertised in a newspaper, the producers of its substitutes will find it better to advertise them in the same newspaper. This practice has become more common these days in order to fight competition in the market.




Financial Results Of Maruti Udyog Limited
Income of Maruti Udyog Ltd. For the Year 2005-06 & 2006-07 Quarter Ended Particulars 31-Mar-06 31-Mar-07
Income From Operation Net Sales Income from Services Other Income Total Income from Operation Total Expenditure Profit Before Tax Total Tax Net Profit After Tax 326033 1668 11526 339227 279085 52545 16453 36092 441344 1632 20948 463924 387873 66863 22007 44856

Income of Maruti Udyog Ltd.
Amount (In Lacs.)



Sources of Income Net Sales Total Income from Operation Profit Before Tax Net Profit After Tax
Income For the Year 2005-06 & 2006-07
Particulars Income From Operation Net Sales 40 Year Ended 31-Mar-06 31-Mar-07 1200342 1459224

Income from Services Other Income Total Income from Operation Total Expenditure Profit Before Tax Total Tax Net Profit After Tax

4882 42919 1248143 1042563 174999 56094 118905

6165 59841 1525230 1266348 227983 71785 156198

Income For the Year 2005-06 & 2006-07
Amount (Rs. In Lacs)



Sources of Income Net Sales Profit Before Tax Total Income from Operation Net Profit After Tax


Vehicle Sold By Maruti Udyog Ltd. in the year 2006 & 2007

Year Ended
31-Mar-06 31-Mar-07
635629 39295 674924

No. of Vehicle Sold Domestic Foreign Total Vehicle Sold

527038 34781 561819

Vehicle Sold By Maruti Udyog Ltd. in the year 2006 & 2007

No. of Vehicle

2006 Year Domestic
Particulars No. of Vehicle Sold 42



Total Vehicle Sold
Quarter Ended 31-Mar-06 31-Mar-07

Vehicle Sold for the Quarter March 2006 & March 2007

Domestic Foreign Total Vehicle Sold

146275 8125 154400

185899 14213 200112

Vehicle Sold for the Quarter March 2006 & March 2007

No. of Vehicle

2006 Quarter Domestic Foreign


Total Vehicle Sold

Vehicle Sold for Quarter of June 2006 & June 2007
Particulars No. of Vehicle Sold Domestic Foreign Total Vehicle Sold Quarter Ended 30/6/2006 30/6/2007 137104 7844 144948 160604 9065 169669


Vehicle Sold for Quarter of June 2006 & June 2007

No. of Vehicle

2006 Quarter Domestic Foreign


Total Vehicle Sold

Income for the Quarter ended June 2006 & June 2007
Particulars Income From Operation Net Sales Income from Services Other Income Total Income from Operation Total Expenditure Profit Before Tax Total Tax Net Profit After Tax Quarter Ended 30/6/2006 30/6/2007 311402 1145 14330 326877 266887 53258 16301 36957 391367 1715 22325 415407 335603 70074 20114 49960


Income For the Quarter June 2006 & June 2007


30/6/2006 Quarter Net Sales Profit Before Tax


Total Income from Operation Net Profit After Tax




Analysis and Interpretation Q 1. Do you have a Car?
Car Users Yes No No. of Respondents 80 120

Users of the Car
140 120 No. of Users 100 80 60 40 20 0 Yes No 80 120

It is clear from the above diagram that most of the people do not have cars.


Q 2.

Specify the one?
Car Category Maruti Hyundai Any Other No. of Respondents 120 60 20

Analysis Any Other
It is clear from the above diagram that the Maruti have grabbed the major market share among the Car segment automobile market.
Maruti 60% 10%

Hyundai 30%


Q 3.

Of which model of Maruti Udyog you
Model of the cars Maruti 800 Maruti Alto Wagon R Swift Esteem Other Any Other No. of Respondents 90 50 30 10 10 10 3

have own?

Users of the Different Models of Maruti Udyog Ltd.
Respondents Maruti 800

Maruti Wagon Alto R




Name of the Models No. of Respondents

It is clear from the above diagram that the Model Maruti 800 is the most selling model because it is very economical & convenient for small user.


Q 4.

Who motivate you to buy the car?
Factors Your Family Peer Group Society Status Life Style Culture Any Other No. of Respondents 26 38 28 35 45 18 10
45 38 35

No. of Re sponde nts

Analysis 40
35 30 20 15 10 5 0 Your Family 26


Most of the people as it is clear from the above diagram motivated by the life 28 style, peer group and status factors to buy the car. 25
18 10

Peer Group


Status Life Style Culture

Any Other

Motivational Factors


Q 5. What are the features you look for your Cars?
Product Features Fuel Efficiency Style Comfort Price Engine Power Resale Value Any Other No. of Respondents 50 20 30 60 20 15 5

Product Features
60 50 30 20 20 15 5
Fuel Efficiency Comfort Price Style Engine Power Resale Value Any Other

No. of Respondents
It is clear from the diagram that mostly customers are looking fuel efficiency, price and comfort in his selection.


Q 6.

What are the price factors, which
Factors Reliable Off Season Schemes Discount Any Other No. of Respondents 55 40 50 45 10

motivate you to buy the Cars?

Factors Affecting the Resondents
60 50 40 30 20 10 0 55 40 50 45


el ia bl e

ea so n

O ff S

Sc he m

is co un t


No. of Respondents

From the above diagram it is clear that the price factor such as reliable, discount and schemes motivate the people to buy the Cars.

Q 7.

How much you are affected by the

promotional efforts of the company?




O th er


Promotional Efforts High Moderate Low No Effect

No. of Respondents 100 50 30 20


Promotional Efforts From the above the diagram it is clear that most of the buyer purchase decision
is highly affected by the promotional effort of the company.
Low 15% No Effect 10%

High 50%

Moderate 25%


Q 8.

According to you who provide the better
Companies Maruti Hyundai Others No. of Respondents (Total 200) 130 60 10

after sales services and spares?

Respondents of Sales & Services 140 120 100 80 60 40 20 0 130

60 10 Maruti Hynudai No. of Respondents Others

From the above diagram it is clear that Maruti provides the better after sales services and spare.




Findings of the Study
It has really been a great job of the research to present the results in the immaculate way so that the purpose for which whole of the research has been done must be fulfilled. And also the researcher like a traveler who likes to tabulate all the important landmarks encountered in the way, would also like to tabulate and go in for in-depth study of the data collected for the purpose of meeting the research objective. In the light of the specified objectives of the research study and above discussion along with the analysis of the data collected following was interpreted from the data found from the study undertaken: • Most of the people of India do not have cars. Only 30 % (approx.) of India has cars. Most of the car users are of small cars. The customers of India prefer family car than luxury car. • Cars have shown an increase in craze and sale trends in the recent past owing to the marketing strategies, mileage factors, price, and ease in handling as may be clear from the data analyzed. Maruti have shown an increase in the quantity of vehicle sold. In quarter march 2006 Maruti sold 1,46,275 vehicles in India and 8,125 vehicle in foreign countries. But in quarter March 2007 Maruti sold 1,85,899 vehicles in India and 14,213 vehicle in foreign countries. For quarter June 2006 Maruti sold 1,37,104 vehicle in India and 7,844 vehicle in foreign countries. In financial year 2005-2006 Maruti sold 5,27,038 vehicles in India and 34,781 vehicles in foreign countries. It shows an increasing trend of the sale in India as well as in foreign countries. • The advertisement plays a major role in communicating to the customer information/specification about the product. Among the supporters of advertising the most preferred media of advertising in case of cars is the


TV followed by the print-media together. This is clearly sign of increasing materialism and consumer due to the invasion of science in public life. • From the study, it was found that people are mostly motivated by user life style, peer group and status factors to buy the two-wheelers. • It was found that the customers are brand loyal to Maruti only, because of after sale services and less maintenance ability. So it is the just one time investment for the customer to be brand loyal. Different approachable service centers also contributories of the sale. • Finance is also the key factor to increase the sale. Attractive finance schemes enhance the sale into the market. Some 0% schemes, low EMI schemes are the attractions of the customers. • At present, Maruti focusing mainly on small customers. By providing low EMI and 0 % or low rate interesting schemes, it want to expand the sale in to the market. • Some models i.e. Maruti 800, Alto, Wagon R etc. are famous in middle class users. They like these models as family car. Maruti Esteem, Baleno are the famous models in the range of luxury cars. • Maruti also expand its spare business. Service centres are opened in small cities as well as in the small towns. These are approachable for the residing people in small towns. This is also the major factor of gaining fame in small users. • Maruti also has competitive advantage in the price. Some lower range models are very popular in the middle class users. • Fuel Efficiency, Style, Comfort, Engine power, Resale value are also the favorable factors for Maruti Udyog Limited. Maruti Engines are termed best engines in the automobile market. Resale value of Maruti product


are highest in the market. Maruti car is quite very easy to sale into the market • Various schemes i.e. Discount, free accessories, free service facilities are also helpful to increase the sale potential of the Maruti. • All the four Ps (Product, Price, Place, and Promotion) of the marketing mix play important roles in decision-making process of the consumer.




Limitations of the Study
It is extremely important to evaluate and consider the limitations of the study in advance in order to assess the reliability of the findings. In our study the following limitations were encountered: • Consumers sometimes find it difficult to express their feelings due to various barriers and thus the results may be far from reality. • The time and money are also big constraints in the course of the research process. • The sample size being smaller may not lead to the generalized results for a larger population base. • The intensity of advertising, their frequency and media has a combined effect on consumers along with their cultural background. Thus it is quite difficult to segregate and measure the individual factors’ impact on customers.




It can clearly be said on the basis of all the study conducted so far that advertisement play a major role in promoting among the customers. It is immaterial that customers are from which family status or background. All of them go in for advertisement when it comes to the purchase decision making of car or a given product. Advertising that distribute information to consumers that can help them make better economic decisions than they would in absence of that information provides a positive economic service. Of course, any advertising that, by deception or by any other means, induces consumers to make sub optimal decisions provides a corresponding negative economic service. Some advertising is of more value than others along this dimension. It is unreasonable to separate the economic and social factors to increase the sale. It is clear now that advertising enhances buyer decision-making by providing information and supporting brand names. It provides and efficient means to firms to communicate with their customers. By generating various product associations, advertising can add to the utility of a buyer receives from a product. It supports the various media has the largely unrealized potential to reduce extremes in the levels of consumer buying. Customer satisfaction is also the important factor, which affects the financial position & goodwill of the company. Customer demands are dynamic, but its consideration is necessary for every company to make existence into the market.




• Success of Maruti Udyog Limited assures that ad campaign has a lot to do with their success. People’s response definitely conveys that advertisement today definitely is a force to reckon with and utmost importance has to be given to them to assure success of a firm. • Today the prices of petrol are increasing speedly. Company should

manufacture more & more verities of Diesel, Gas engine vehicle. • Easy Finance scheme should launch more and more. finance is most competitive tool to increase the sale. • Proper service facility is also the key factor, which contributes in the increment of sale. A company can increase its sale by providing good & proper service facility. In this case, Maruti is the leading company. • Company should manufacture the car model as per the requirement of the customer. Customer satisfaction is the pivot of the economy. So, company should concentrate on the satisfaction level of the customer. • When it comes to increasing reputation or creating brand image for a car, TV should be given superiority than any other medium what so ever. • Sports people were found to be of the highest credibility by most of the people. So, they should be used more and more in advertisement of Cars. • People are mostly attracted by patriotism theme and cultural theme in ads. So, this should be used exclusively to achieve greater success as is evident by the success of Maruti Udyog Limited already. Because easy


Company should follow the principles of marketing. Four P’s principles should satisfy to lead the market.

TV was found to be the most attractive advertising channel by people amongst all used by various automobiles companies.




• Kotler, Phillip Marketing Management-Analysis, Planning and Control, PHI New Delhi • Kothari, C.R. Marketing Research, Vishwa Prakashan, New Delhi • • • • Schiffman, L.G. David, A, Aaker Beri, G.C. George Rosen Consumer Behavior, PHI, New Delhi Advertising Management, PHI, New Delhi Marketing Research, New Delhi Some Aspects of Industrial Finance in India (Asia publishing House, 1962) • • • Haryana for Industries Annual Reports Websites: • http://www.google.com • http://www.marutisuzuki.com Department of Industries, Chandigarh Annual Reports of Maruti Udyog Limited


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