End Term Project Report

On
Decision making process for a car purchase
within a household

1
 September 2nd 2016

Acknowledgement

We would like to express our profound gratitude and deep regards towards Prof. Sanjay
Chandwani for providing us with the opportunity to undertake the study on consumer decision
making in a household for the purchase of a new car in the area of consumer behavior. He
provided exemplary guidance, monitoring and constant encouragement at all stages in this
endeavor. We would also like to extend our sincere thanks to our friends and family without
whose valuable time and Cooperation this study would have been just an imagination.

Last but not the least I place a deep sense of gratitude in our group who have been constant
source of inspiration during the preparation of this report.

Consumer Behavior I

Group-1

Abhishek Sharma

Aditya Contractor

Akash Agarwal

Aman Seth

2
 Abstract

Post 1991 reforms Indian market has seen the entry of many international brands in automobile
sector. Apart from many established international brands some of the homegrown brands have a
very strong hold in the market. This has led to multiple options for a consumer to choose from
along with a gradual increase in disposable income with time. This report is intends to serve the
purpose of understanding the decision making process for a car purchase within a modern
household and to identify the various factors or attributes that a consumer considers while
purchasing a new car. Apart from the various factors this study also tries to find the various
drivers for a new car purchase.

For the purpose of this study an extensive review of the existing literature was carries out. On the
basis of the review it was decided to conduct the study with help of a questionnaire. The main
answers that the questions try to seek are similar to that of the objectives of the study. In total 95
respondents provided their inputs for the purpose of study. The analysis of the data received was
carried out for-identification of the various drivers for a new car purchase decision,
understanding the effects of age, income, gender, and occupation on the decision making process
for a purchase of a new car.

The inferences and insights drawn on the basis of analysis of data collected from the 95
respondents. The sample tries to cover all the demographic characteristics of the population.
Tools like coefficient of variation, chi square test using SPSS software package and cross
tabulation using pivot table in excel are used to reach meaningful insights.

Like every other study this study also had limitations like geography, time constraint and
irrelevant responses. This leaves the scope for a better and more extensive study in the future.
We hope that this report will contribute to a better understanding of consumer behavior for the
purchase of a new car.

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4
 Table of Contents
Chapter I-Introduction ................................................................................................................. 8
Framework of Consumer Decision Making .......................................................................... 11
Relevance of the Study ............................................................................................................ 13
Objectives of the Study ........................................................................................................... 13
Chapter II- Literature Review ................................................................................................... 14
Chapter III-Methodology ........................................................................................................... 18
Research Design....................................................................................................................... 18
Data collection methods .......................................................................................................... 18
Sampling................................................................................................................................... 18
Analysis of the Survey ............................................................................................................. 18
Chapter IV- Data Interpretation & Analysis ........................................................................... 20
Conclusion ................................................................................................................................ 36
Limitations of the Study ......................................................................................................... 36
Appendix A .................................................................................................................................. 37
Questionnaire........................................................................................................................... 37
Appendix B .................................................................................................................................. 40
Appendix C .................................................................................................................................. 40
References ................................................................................................................................ 41

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 Table of Figures

Figure 1.1 Total production of automobiles in India………………………………………….8

Figure1.2 Passenger car market share in India in FY 2015…………………………………10

Cross Tab 1……………………………………………………………………………………..22

Cross Tab 2……………………………………………………………………………………..23

Cross Tab 3……………………………………………………………………………………..24

Cross Tab 4……………………………………………………………………………………..25

Cross Tab 5……………………………………………………………………………………..26

Cross Tab 6……………………………………………………………………………………..27

Cross Tab 7……………………………………………………………………………………..28

Cross Tab 8……………………………………………………………………………………..29

Cross Tab 9……………………………………………………………………………………..30

Cross Tab 10…..………………………………………………………………………………..34

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Table of Tables

Table 4.1: The total responses recorded on Likert Scale for Key Attributes and Drivers...20
Table 4.2: Coefficient of Variation (Std. Deviation/ Mean) of all the factors………..……..21

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 Chapter I-Introduction
India being the second most populated country in the world and the growth rate of Indian
economy is also high as compared to developed countries, which attracts the presence of huge
demand in the Automobile Small Car Industry. India is becoming emerging market for mostly all
the segments. India is on growth path. The domestic passenger vehicle industry in India has
registered a strong growth as compared to other nations. The domestic PV market (cars, vans and
utility vehicles) grew 7.6 per cent in January-November 2015, according to the recently released
data from Society of Indian Automobile Manufacturers (SIAM). This growth rate is higher than
in France, Britain, Germany and China while Japan, the US and Brazil are on a decline.

The primary reasons for such a high growth rate are new launches, declining fuel prices and
lower interest rates. In fact, growth coming from the Indian market is helping multinational
automobile makers with an Indian operation to cushion the decline in other markets. In order to
boost the growth further in the Indian passenger car industry as compared to the other leading
markets, there some factors that are associated which are low vehicle penetration, rising
disposable income and increasing road. By 2026, passenger vehicles are expected to increase
between 9.4 - 13.4 million units.

There are various reasons for the growth of the Indian automobile market such as –

1) The people have more disposable income as economy is growing.

2) Increase in the need of mobility due to urbanization and leisure travel.

3) Car Finance options available from Financial Institutes at reasonable rate of interest.

4) Availability of service centers and spare parts in near vicinity.

5) Improvement in highway infrastructure.

If we see in today’s world, for most of the people purchasing a car is the second most important
and expensive decision, next to purchase of a house. For the automotive manufacturers, first-time
car buyers give them the opportunity to create positive brand image which definitely could be
reflected in next coming years because consumers could make repeat car purchasing. The
concept of “buying behavior” is of prime importance in marketing and has evolved over the
years. It is very important to understand consumer buying behavior as it plays a vital role while
8
purchasing these type of products. Day to day human wants are growing, and also the
expectations. Car Models are no exception to this behavior. Consumer behavior is fairly complex
as Car Purchase implies a high level of social and psychological involvement. Consumer buying
behavior is a blend of Economic, technological, political, cultural, demographic and natural
factors as well as Customer’s own characteristics which is reflected by his attitude, motivation,
perception, personality, knowledge and lifestyle.

Figure 1.1 Total production of automobiles in India

Market share of car manufacturers in India

India is one of the world’s largest markets for automobiles and two-wheelers, trailing after
China, the United States, Japan and Germany. In 2014, within a span of 6 months about 1.6
million motor vehicles were sold in India, and around 1.3 million of which were passenger cars.
By 2025, it is expected that about 6.7 million passenger cars will be sold in India. The leading
automakers include Maruti Suzuki, Hyundai Motor and Mahindra & Mahindra. In 2015, Renault
was among the few non-domestic car manufacturers to see growth. The French carmaker’s
market share increased from 1.94 percent in 2015. Passenger vehicles are ranked as the second
most important motor vehicle segment in terms of sales, while two-wheelers continue to be the
India’s bestselling motor vehicle category.

In 2015, the country’s largest carmaker Maruti Suzuki India witnessed a growth of 11.89 percent
with sales of its passenger vehicles at 1.29 million units. It launched a premium showroom
channel called Nexa across the country which aims to provide a personalized and unique
experience to the customer. With the S-Cross and the Baleno, Maruti launched its first premium

9
cars under the Nexa channel. Even as Maruti diversified into premium cars, a bulk of its sales
came from the volume driver entry-level segment. Segment-leader Alto remained the best-seller
with average sales of above 21,000 units every month, closely followed by the Dzire and the
Swift. For Maruti’s closest rival, Hyundai Motor India, 2015 ended as a record year in terms of
sales.

In terms of Passenger Vehicle volumes, Mahindra & Mahindra finished third as the automaker
benefitted from an aggressive product launch strategy and diversification of its portfolio. In the
utility vehicle segment, which is the mainstay for the automaker, started showing some signs of
recovery in the year. However, tough competition from fresh entrants like Hyundai Motor India
resulted in a slight contraction in volumes for the company as sales of the company fell to
224,189 units. If we see the other competitors Honda Cars India also registered double-digit
growth and remained the third largest carmaker in the country with sales of 202,403 units in the
year.

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 Figure1.2 Passenger car market share in India in FY 2015 (Source: Statista)

Framework of Consumer Decision Making

1. Need recognition/ Problem recognition

The need recognition is the first and most important step in buying process. If there is no need,
there is no process. This recognition happens when there is a lag between the consumer’s actual
situation and the ideal and desired one.

The recognition of a need by a consumer can be caused in different ways. Different

classifications:

 Internal stimuli (physiological need felt by the individual as hunger or thirst) which opposes
the external stimuli such as exposure to an advertisement.

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 Classification by type of needs: there can be different types of needs which are functional
need, social need, need for change.
 Maslow’s hierarchy of needs

2. Information search

Once the need is identified, it’s time for the consumer to seek information about possible
solutions to the problem.

This can be of further 2 types:

 Internal search- it is done from previous experiences.

 External search- it is by reviewing from the family, friends and other peer groups.

3. Alternative evaluation
Once the information collected, the consumer will be able to evaluate the different alternatives
that offer to him, evaluate the most suitable to his needs and choose the one he think it’s best for
him. The person will evaluate their attributes on two aspects. The objective characteristics (such
as the features and functionality of the product) but also subjective (perception and perceived
value of the brand by the consumer or its reputation).

4. Purchase decision
Now when the consumer has evaluated the different solutions and products available for respond
to his need, he will be able to choose the product or brand that seems most appropriate to his
needs. Then proceed to the actual purchase itself. His decision will depend on the information
and the selection made in the previous step based on the perceived value, product’s features and
capabilities that are important to him.

5. Post-purchase behavior
Once the product is purchased and used, the consumer will evaluate the adequacy with his
original needs. The post-purchase evaluation may have important consequences for a brand. A
satisfied customer is very likely to become a loyal and regular customer.

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Relevance of the Study

As we all know that Indian economy is the fastest growing economy in the world and things
around are changing at staggeringly fast rate. Products which would have been considered
relevant or practices that were considered normal a decade back are no longer relevant. Whether
economically or in terms of demographics, India has come a long way after independence. So the
study aims to understand the psyche of the new Indian consumer with respect to buying decision
of a new car. It tries to find out the relative importance given to the various attributes like price,
after sales service etc. and various drivers of a new purchase by the consumers.

Objectives of the Study

 To understand the decision making process for a car purchase within a household.
 To identify the various factors or attributes that a consumer consumers consider while
purchasing a new car
 To identify the various drivers of a new car purchase decision.
 To analyze the various factors mentioned above on the basis of various age groups and salary
ranges.
 To collect, interpret and analyze the data obtained from the respondents to draw meaningful
insights for the study of the topic.

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 Chapter II- Literature Review
1. In their study, Arpita Srivastava and Mitu Matta (2014), explores the consumer behavior
towards passenger cars in Delhi NCR. The scope of the study is limited to certain important
behavioral aspects like information search and evaluation, brand preference and brand loyalty
and factors of motivation. Understanding the customer’s satisfaction of the product will help
the automobile manufacturer in developing their products to meet customer’s needs and
designing the proper marketing programs and strategy.
2. In his study, Subhash Jha (2015), highlights the importance of conscious decision making
process in consumer choice. Few of the recent studies have revealed that consumer behavior
can be influenced by mental processes that occur outside conscious awareness. This article
reviews relevant literature to bring out the difference between conscious and non-conscious
decision making. It provides a link between the choice-set, consumer knowledge, situational
factors and the decision making processes. It highlights the relationship between satisfaction
and decision making processes. The paper proposes a theoretical framework which can be
empirically tested in an experimental setting.
3. In his study Vikram Shende (2014), presents analysis of research in the area of Consumer
Behavior of Automobile Car Customer. Proper understanding of consumer buying behavior
will help the marketer to succeed in the market. All segments in Indian Car industry were
studied and found that buyer has different priority of behaviors in each segment, whereas
main driver for car purchase is disposable income. Value for money, safety and driving
comforts top the rank in terms of customer requirement; whereas perceived quality by
customers mainly depends on brand image.
4. Sangeeta Gupta (2013), analyses the changes that took place in the market post 1991
liberalization. The availability of many alternatives within the city provides an opportunity to
the consumers to make a rational decision after considering all the options. Today is an era
which is characterized by a consumer’s market where the manufacturers and marketers not
only takes into consideration the consumer orientation to make them satisfied but goes one
step ahead of achieving consumer delight. Consumers look for those differentiating
parameters, which may help them to make a best decision and can be proved as value to
money proposition for them. It makes more important to analyze the consumer perceptions
and behavior of the passenger car owners which will give the feedback pertaining to

14
 designing the marketing strategies. The objective of this paper is to investigate those
differentiating parameter and effect of reference group that influence the consumer buying
behavior of car owners within the city of New Delhi. The primary data was collected from
191 respondents, located in New Delhi using convenience sampling. The results revealed the
strong influence of attributes like price, fuel efficiency in buying decision and importance of
reference group.
5. According to Matthew J. Beck (2013), automobile is a pervasive component of modern life;
it has played a crucial role in shaping the society in which we live and the way in which we
behave and interact with those around us. This paper provides an overview of the motor
vehicle; tracing the origins of the automobile, how it helped shaped many aspects of societal
and urban development and the psychological impacts on society. It also reviews studies that
have explored the driving factors of vehicle ownership and choice at a disaggregate level and
examines the literature that addresses the environmental impacts of the motor vehicle. The
conclusion is drawn that there is perhaps no single product that has had as big an impact on
modern society as the motor vehicle, an impact that is unlikely to wane. As such, the
automobile will continue to be fertile subject matter for researchers from many disciplines
and for in policy who must make plans in the presence of the motor vehicle.
6. Pinki Rani (2014), Consumer Buying Behavior refers to the buying behavior of the ultimate
consumer. Many factors, specificities and characteristics influence the individual in what he
is and the consumer in his decision making process, shopping habits, purchasing behavior,
the brands he buys or the retailers he goes. A purchase decision is the result of each and
every one of these factors. An individual and a consumer is led by his culture, his subculture,
his social class, his membership groups, his family, his personality, his psychological factors,
etc. And is influenced by cultural trends as well as his social and societal environment. By
identifying and understanding the factors that influence their customers, brands have the
opportunity to develop a strategy, a marketing message (Unique Value Proposition) and
advertising campaigns more efficient and more in line with the needs and ways of thinking of
their target consumers, a real asset to better meet the needs of its customers and increase
sales.
7. Kusuma P (2015), liberalization, privatization and globalization Policy of India influenced
many international automobile companies trading & manufacturing in our country. The

15
 availability of many brands in country provides various alternatives to the customer. These
manufacturers offer similar value proposition, and provide highly customized products.
Engine performance is not considered very important for customers now, rather they look for
those differentiating parameters. The main objective of this paper is to identify the possible
parameters that influence the consumer buying behavior patterns of passenger car owners in
India. It is also aimed to develop a theoretical model, which influence the consumer buying
patterns of passenger cars, so that further research could be done, based on the model and the
identified parameters.
8. Arvinder Singh Gill (2001) the annual world production has grown from just a few vehicles
to over 50 million state-of the-art vehicles. During this period, enormous developments have
taken place in all areas of the automobile industry e.g. performance, fuel consumption,
safety, comfort, information for the driver etc. Changes in the demographic structure have
been leading to more and more individualized products. Recent years have seen great
benefits for car users as a result of advances in electric and electronic technology. The
Internet has become a part of daily life and is reaching out into the car. The present study has
been undertaken with the view to modestly fill this vacuum and analyze the consumer buying
behavior so as to derive some useful marketing implication for the competing Indian
passenger cars manufacturers. The main objective of the present research is to study the
consumer buying behavior for the passenger cars in India in the recently changes scenario. In
particular, the present study attempts to analyze the following: a) the Pre-purchase
information search of the consumers, b) their purchase process c) their Post-purchase
behavior, and d) the effect of the post purchase experience on re-purchase decision for future
brand to be acquired.
9. In their study Balakrishnan Menon and Dr. Jagathy Raj V.P (2012), with the multiplicity of
choices available to the Indian passenger car buyers, it drastically changed the way the car
purchase scenario in India. This transformed the automobile scene from a sellers’ market to
buyers’ market. Car customers started developing their own personal preferences and
purchasing patterns, which were hitherto unknown in the Indian automobile segment. The
main aim is to come up with the identification of possible parameters and a framework
development, that influence the consumer purchase behavior patterns of passenger car

16
 owners in the State of Kerala, so that further research could be done, based on the framework
and the identified parameters.
10. Banerjee, Saikat (2010), In India, over the last couple of years, the domestic passenger car
market has witnessed a phenomenal growth. High degree of competition compels players in
this industry to understand specific market needs while still providing value, in order to
ensure success. In a particular year, a large portion of customers buy their second car. So, for
marketers, it is important to understand the variables that influence consumer's decision to
purchase a second car. In this backdrop, an attempt has been made to uncover influencing
factors behind purchase decision of a second car. From the research, it has been found that
the segment who is buying a second car has different priority factors that guide its buying
decision. The study reveals that there are seven major factors that influence buying behavior
of a second time car buyer.
11. Mohammed Alamgir, Tasnuba Nasir, Mohammad Shamsuddoha, Alexandru Nedelea (2014),
create a deeper consideration of what influence a brand name can have, when people go for
purchasing, choose the products between different brands, especially private vehicle like car.
Moreover, this paper also tries to explore the relation between brands and the consumer
decision making process. This study has been conducted through literature study as well as
questionnaire administered survey. Simple random sampling procedure has been used to
determine sampling frame and size and a convenience sample of hundred respondents of
different age groups, income and occupation have been considered for the survey. The
collected data were analyzed to comply with the objectives and also to draw conclusions.
From the study it is revealed that when consumer purchases a car, brand names do influence
his/her choice. The study also reveals that branded cars have a great place in consumer mind,
when customers go for purchasing a car, they prefer to purchase a well-known branded car.
Customers do not want to try new or unknown branded cars because they have not much
information about the lesser known brand.

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 Chapter III-Methodology
Purpose of the report is to understand the consumer behavior of individuals while buying a new
car or the factors the consumer considered important when they bought/buy a car.

Research Design

Out of number of research methodologies available, questionnaire was considered as a right

research instrument for gathering information because it is a common way to collect information
which is known to all and people are comfortable filling up questionnaire.

Data collection methods

As mentioned the research design instrument was kept simple so as to gather maximum
information from the respondents. Questionnaire containing 26 questions was prepared which
included questions like demographics of the respondents viz. age, occupation, gender and
income, factors that they consider are important while making a purchase like price, mileage,
after sales service, cost of maintenance, etc. were represented through a Likert scale.

Sampling

Method of convenience sampling was used to collect the data whereby respondents were asked
to fill the questionnaire online of which a link was sent through mail and message.

Analysis of the Survey

Total of 26 questions were prepared for the survey which will be discussed and analyzed in the
later chapters of the report. The cumulative data of 95 respondents helped to draw important
inferences.

To draw inferences, cross tabulation of the data of different questions was done on excel using
pivot table function. Cross tabulation of different factors helped in better understanding the
correlation of different factors on one other. For e.g.: relation between income of the respondent
and the importance given to cost of maintenance of a car. These inferences in the form of tables
and charts helped in analyzing the data in a better way.

In order to validate the data obtained by respondents the 14 questions that were based on likert
scale were validated through chi square test.

18
Non-parametric method (chi test) was used for studying population as it took on a ranked order
(5 point scale). The use of non-parametric method was necessary as data had a ranking but no
clear numerical interpretation, because it was to assess preferences. SPSS software package was
used for the same. This highlighted the most important factor out of the 14 factors (likert scale
questions) that consumers consider while purchasing a car.

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 Chapter IV- Data Interpretation & Analysis
This chapter contains the analysis of the data collected using the questionnaire. The
questionnaire consisted of 26 questions prepared on the basis of the objectives of the study. The
responses to the questions are qualitative as well as quantitative. Total number of responses
considered for the purpose of this study are 95. These 95 responses are further divided on the
basis of age and monthly salary.

The profile of the respondents is as follows:

Age Group

Age Range

17 18-25
26-33
41
9
34-41
42-49
13
50-57
14

Monthly Salary

Monthly Salary

Less than 20k

27 31 20.1k-40k
40.1k-60k
60.1k-80k
8 80.1k-100k
8 3 above 100k
18

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 Table 4.1: The total responses recorded on Likert Scale for Key Attributes and Drivers

Frequency Distribution
It shows the number of respondents for each category of sources of information. It shows that out
of the total 95 respondents 73 choose to look for information online, 61 will visit dealerships for
enquiries etc. It clearly shows that people still prefer the traditional primary sources of
information to the print media or television.

Frequency Distributio of Sources of Information

80 73
Frequency (Out of the total respondents how

70 61
57
60
48
50
many choose this option)

40
30
20 14 14
10
0

Sources of Information

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 How many brands will you consider before
35
purchasing a new car?
32

30
27

25 Number of Brands

20 19

15
11
10
6
5
0
0
>5 5 4 3 2 1

Calculation of C.O.V
The coefficient of variation is the measure of variability and it indicates inconsistent attitudes by
the respondents and hence the five parameters with highest values will not be considered for
analysis.
Table 4.2: Coefficient of Variation (Std. Deviation/ Mean) of all the factors

Phase 1: It consists of the analysis of the cross tabulations created using Microsoft Excel. The
cross tabulations are prepared for the key attributes a person considers most important while
choosing a car as well as for the key drivers or triggers that prompt a consumer to buy a new car.

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Cross-Tab1

Count of people with different fuel preference on the basis of salary and age

 CNG & LPG are the least preferred fuel choice across all age groups and across various
salary categories.
 People in the age group of 18-25 years with a salary of less than 20K are most willing to
consider all the fuel types before purchasing a new car.
 People with salary of above 60K/month across all the age groups preferred only diesel and
petrol as fuel out the 4 fuel types while looking for a new car.
 People in the age group of 50-65 years with monthly incomes of above 100k prefer diesel as
fuel as most of the luxury cars in upper segment are available in diesel variants.
 In general a trend which was observed was as the salary increases the preference for diesel
and petrol increases as most of the higher models from various manufacturers come in only 2
variants i.e. diesel and petrol.

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Cross-Tab 2

Count of people with different price preference on the basis of salary and age

 People in the age group of 18-33 years with monthly salary below 20k rate price of the
vehicle as the most important factor to consider while purchasing a new car. As 20 out of the
30 respondents in this category rate it either very important or important.
 Among the same age group but with salary of upward of 60K per month (60-100K) rate it as
neutral or not important. As only 5 respondents out of the total 14 candidates rate it as
important or very important.
 In the age group of 35-65 years with salary ranging from 60k-100k agree that price is an
important factor to consider.
 The trend observed was that price remains an important factor while purchasing a car across
all the age groups but its importance slightly decreases with the increase in salary.

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Cross Tab-3

Count of people with mileage as preference on the basis of salary and age

 For the people in the age group of 18-25 years and salary up to 60K per month, mileage was
the most important criteria. But even after salary increases mileage remains very important
factor for this particular age group. It is evident from the fact none of the respondents kept it
as not important or disagreed.
 Surprisingly even the respondents in the age group of 35-65 years across all the salary ranges
rate it as important or very important criteria to look for before purchasing a car.
 We can infer that the respondents and in general Indians remain obsessed with mileage, and
will definitely consider it before buying a new car.

25
Cross-Tab 4

Count of people with after sales service as preference on the basis of salary and age

 In the age group of 18-25 years and with salary of less than 20K per month, 25 out of 30
respondents rate after sales service as important or most important. Out of the total 41
respondents in age group of 18-33 years and salary of less than 60K per month only 6
respondents have rated this factor as neutral.
 Across all the age groups with the given salary range after sales service remained an
important factor to consider before purchasing a new car.
 Across the same age group but with salaries of above 60K per month people rated this factor
as neutral or not important. Out of the total 14 respondents 8 rated it as neutral and 1 rated as
not important or disagree.
 Strikingly respondents in the age group of 50-57 years and salary of greater than 100k rate it
as very important.
 We can safely infer that as salaries increase and people opt for high end models, the quality
of after sales service becomes less important and people will consider a brand with not so
strong service network.

26
Cross-Tab 5

Count of people with low cost maintenance as preference on the basis of salary and age

 Age group of 18-25 that has an income of less than 20k a month rated cost of maintenance as
an important factor while buying a car.
 Most of the people with monthly income of 80k and above were neutral about the cost of
maintenance factor. This is because higher income people prefer an expensive car which has
to be maintained well.
 Lower income people prefer a car that has a low cost of maintenance as the car is more of a
utility purpose vehicle than a luxury product that has to be maintained well.

27
Cross-Tab 6

Count of people who prefer looks and exteriors while buying a car

 There was no pattern or correlation found with respect to age, gender or income of a person
as compared to the looks and exteriors of a car.
 Most of the respondents preferred a car that had average or good looks and hence most of the
respondents gave 3-5 ratings to the factor. No respondent gave 1 rating to the factor and only
2 respondents gave a rating of 2.
 We can infer that average or good looks of a car was an important factor irrespective of any
other factors. Therefore sample population gives high rating to the looks of the car. \

28
Cross-Tab 7

Count of people with engine capacity as preference on the basis of salary and age

 Age and gender didn’t have much relation to this factor but income. Most of the respondents
with the income of less than 40k did not consider engine capacity as an important factor
while buying a car. Whereas people with income of 100k and above who preferred premium
cars considered engine capacity as an important factor and most of them gave ratings of 3
and above.

29
Cross-Tab 8

Count of people with engine capacity as preference on the basis of salary and age

 This factor is very crucial to the middle income and lower income segment i.e. because the
government policies on the prices of petrol and diesel affect the decision of the consumer
very heavily and hence the middle income and lower income segment is very much price
sensitive towards this factor while buying a car.

The next section carries the analysis of key factors or drivers that drive a consumer to buy a new
car

30
Cross-Tab 9

People who will buy a new car due to improved fuel efficiency on the basis of age and
salary

This factor is very important for lower income groups and very much evident from the above
data but even in the higher income group and the older people are also considering this factor
very important while buying a car.

31
Hypothesis Testing

Hypothesis testing is carried for the selected nine parameters using Chi-square test. The test
result summary is as follows:

Null Alternate Test Significance Decision

value
Do you not Do you consider One sample 0.0001 Reject null
consider price price while buying chi-square hypothesis
while buying a a car? test
car?
Do you not Do you consider One sample 0.0001 Reject null
consider mileage mileage while chi-square hypothesis
while buying a buying a car? test
car?
Do you not Do you consider One sample 0.0001 Reject null
consider after sales after sales service chi-square hypothesis
service of a car of a car while test
while buying car? buying car?
Do you not Do you consider One sample 0.0001 Reject null
consider low cost low cost chi-square hypothesis
maintenance of a maintenance of a test
car while buying car while buying
this product? this product?
Do you not Do you consider One sample 0.0001 Reject null
consider exterior exterior looks of a chi-square hypothesis
looks of a car car while buying? test
while buying?
Do you not Do you consider One sample 0.0001 Reject null
consider engine engine capacity of chi-square hypothesis
capacity of a car a car while test
while buying? buying?

32
Do you not Do you consider One sample 0.0001 Reject null
consider government chi-square hypothesis
government policies like cut in test
policies like cut in petrol prices or
petrol prices or ban ban of diesel
of diesel vehicles vehicles while
while buying a buying a
passenger car? passenger car?
Do you purchase a Do you purchase a One sample 0.0001 Reject null
car not considering car considering chi-square hypothesis
the space you the space you test
require by your require by your
family? family?
Do you not Do you consider One sample 0.0001 Reject null
consider fuel fuel efficiency of chi-square hypothesis
efficiency of a car a car while buying test
while buying it? it?
Asymptotic Significance are displayed. Significance level=0.05

Test Statistics

Availa
bilityO
Low f
After Cost EasyFi
mi Sales Main nancin
pri lea Servi tena gSche
ce ge ce nce mes Looks

33
Chi
25. 54.
- 64.4 38.6 23.263 56.11
71 51
Squ a a
53a 84a b
6a
6 6
are

df 3 3 3 3 4 3

Asy
.00 .00
mp. .000 .000 .000 .000
0 0
Sig.

Test Statistics
Usage
Offers Need by other
From Govern For member
Engine Manufac ment MoreSp s of the
Capacity turers Policies ace family

Chi-
40.537a 46.211b 37.758a 42.137a 33.053b
Square

df 3 4 3 3 4

Asymp
.000 .000 .000 .000 .000
. Sig.

Test Statistics
Availability of New Improved Fuel Purchase of a Vehicle
Technology Efficiency of Better Brand

Chi-Square 53.158b 42.221a 47.789b

34
df 4 3 4

Asymp. Sig. .000 .000 .000

a. 0 cells (0.0%) have expected frequencies less than 5. The minimum expected cell
frequency is 23.8.

b. 0 cells (0.0%) have expected frequencies less than 5. The minimum expected cell
frequency is 19.0.

Cross Tab10

Showing relation b/w choice of a car and personality of the buyer

 Young respondents in the age of 18-33 years look for a car that suits their personality as well
as fits their budget. Association of personality with the car is strong for this strong.
 Even for the same age group with higher salaries i.e. 60K-80K per month most of the people
chose a car that asserts the social status as well is well within the budget.

35
 None of the respondents in all the age groups across all the salaries chose to buy a car that
symbolizes the social status of the respondent irrespective of the budget.
 Respondents in age group of 33-65 years of age and with high salaries chose all the three
factors i.e. utility, social status and personality.

Conclusion

Although initially total of 5 key drivers and 9 attributes were selected for the analysis but based
on the initial C.O.V analysis we found the results for 5 parameters to be inconsistent and hence
the analysis of rest of the 9 parameters was carried out using cross tabulation and hypothesis
testing.

Some of the Key results are as follows:

 Irrespective of the age groups or salary some of the parameters remained at the top in the
mind of the consumer before buying a car.
 Some of the parameters like price
 The rejected parameters does not show that they were completely rejected or not considered
important by the sample but they were given very less importance as compared to others.

Limitations of the Study

 As the data was collected at random and limited to 95 responses, it may not represent the
population.
 Though we tried collecting the data from different age groups, about half of the
respondents were of age 18-25 which might affect the result of the study.
 The qualitative characteristics of the data limited our analysis to certain tools hence a
comprehensive study was not possible.
 Scope of the study could have been broadened by seeking more responses and asking
more open ended question

36
 Appendix A
Questionnaire

Q1. Age

 18-25
 26-33
 34-41
 42-49
 50-57
 58-65
 65 above

Q2. Gender

a) Male
b) Female

Q3. Occupation

a) Student
b) Self Employed/ Business
c) Government Servant
d) Services
e) Unemployed

Q4. Monthly Salary

 Less than 20K

 20.1K-40K
 40.1K-60K
 60.1K-80K
 80.1K-100K
 Above 100K

37
Q5. Do you currently own a car?

a) Yes
b) No

Q6. Do you or your family plan to purchase a car in near future?

a) Yes
b) No

Q7. Which fuel do you prefer the most?

a) Petrol
b) Diesel
c) CNG
d) LPG

Q8. Please rate the following attributes that your preference which you will consider while
buying a new car on a scale of 1-5. (1 –Lowest or Least Important/ Strongly Disagree 5- Highest
or Most important/Strongly Agree)

1. Price
2. Mileage
3. After Sales Service
4. Low Cost maintenance
5. Availability of Easy financing Schemes
6. Looks/Exteriors
7. Engine Capacity
8. Offers From manufacturers
9. Government Policies

Q9. Please rate the following drivers as per your preference which will prompt you to buy a new
car on a scale of 1-5. (1 –Lowest or Least Important/ Strongly Disagree 5- Highest or Most
important/Strongly Agree)

1. Need for more space

2. Usage by other family members

38
3. Availability of new Technology
4. Improved Fuel Efficiency
5. Purchase of a vehicle of a better brand

Q10. Will you consider the road infrastructure in your locality while purchasing a car?

a) Yes
b) No

Q11. Before purchasing a car where do you look for information? (Multiple Answers)

o Online
o Visit Dealerships
o Family and Friends
o Talk to people who own a particular model
o Print Media Advertisements
o Television

Q12. How many brands will you consider before buying a car?

1. One
2. Two
3. Three
4. Four
5. Five
6. More than 5

Q13. To what extent does your social status affect your decision of purchasing a car?

a) I will buy a car that symbolizes my social status

b) I will prefer a car that symbolizes my status only if it is under my budget
c) May be may be not
d) I will buy a car which has utility as well as suits my personality
e) I will buy a car strictly for its utility

39
 Appendix B
Story board of advertisements of different automobile companies
1) Tata Nano
Ever since the Tata nano is launched in the market, the response of the market was not
much good. It has struggled to establish the desired connect with the customers. The
latest television commercial promotes the improved version of Tata Nano that targets the
youth segment, projects it as a car for the youth and showcases the fun of long drives.
The commercial begins with a young man who is going for a holiday with friends. He
drives through different cities of the country, with the joy of the long ride, peace and
comfort. After an enriching expedition, he finally reaches the beaches of Goa to meet his
friends and is shown having fun around the car.
Delna Avari, head, Nano product group, Tata Motors, says, "Our brief to Rediffusion was
to retain the brand's youthful disposition while building on the pride that came with
owning a Tata Nano and celebrate the spirit of being independent thinkers."
This TV commercial focus on youth and its price is also cheaper which many of the
youth can easily afford and thus support the spirit of being independent thinker.

2) Maruti Suzuki Ad campaigns

Maruti Suzuki launched various ad campaigns over the years like “kitna deti hai” and
“India comes home in Maruti Suzuki”.
One of the films is set underwater, featuring two scuba divers exploring the marine life.
They come across a man on an underwater bike. Using sign language, they communicate,
telling him that the bike is very ‘cool’. Asked by the duo, the biker reveals that the bike
moves at 20 knots, and goes on to show them its features. One of the two divers, an
Indian, remains unimpressed. Using sign language, he asks the biker, “Kitna deti hai?”
The biker is speechless. The TVC ends saying: “For a country that will always be
obsessed with mileage. Maruti Suzuki makes India’s most fuel efficient cars.”

Maruti Suzuki’s another brand campaign ‘Rishton mein hum jeete hain’, pays tribute to
the joy of celebrating the many colorful festivals of India, with loved ones. The TV
commercial underlines that cars from Maruti Suzuki are an intrinsic part of the lives of
Indians from different parts of the country, by showcasing different models with the
backdrop provided by a different Indian festival for each.

3) Renault Kwid
Renault recently launched a new car ‘Renault Kwid’ with a new TV commercial that
again focused on the youth saying “ I m gonna Live for More” with Kwid. The TV
Commercial featuring Ranbir Kapoor aims to create excitement around the launch slated
during the festive season, cutting across geographies and life stages.

40
 Appendix C
References

1. Articles

[i] Menon, Balakrishnan; Raj, Jagathy V P, (May 2015), Model Development and Validation for
Studying Consumer Preferences of Car Owners, International Journal of Marketing and
Technology, Volume 2, Issue 5, page numbers 148-173.

[ii] Banerjee Saikat, (2010) Journal of Marketing & Communication, Vol. 6 Issue 2, page
numbers 4-13. 10p. 5 Color Photographs, 5 Charts.

[iii] Kusuma P (2015) International Journal of Innovative Research in Science, Engineering and
Technology, Vol. 4, Issue 10.

[iv] Arpita Srivastava1 and Mitu Matta2 (2014), Global Journal of Finance and Management,
Volume 6, Number 6, page numbers 589-598

[v] Sangeeta Gupta (2013), International Journal of Business and Management Invention,
Volume 2 Issue 12, page numbers. 64-71

2. Books

[i] Michael R.Solomon, (2009), Consumer Behavior - Buying, Having and Being, 10th Edition,
Michael R. Solomon, Saint Joseph's University
[ii] David L. Loudon & Albert J. Della Bitta, 2002, Consumer Behaviour, McGraw-Hill

3. Dissertations, Theses and Research Reports

[i] Matthew J. Beck (2013), Sunday drive: Review of automobile ownership, societal and
environmental impacts and behavioral change, working paper, INSTITUTE of TRANSPORT
and LOGISTICS STUDIES, Australia

[ii] Ishan Chandra (2014), Indian Middle Class Purchase Decision and Consumer behavior and
towards Automobile sector, Dissertation, Dublin Business School, Ireland

41
[iii] 2014, Driving through the consumer’s mind Considerations for Car purchase, Research
report, Deloitte, India

4. Websites
[i] ibef, (2016), Automobile industry in India, http://www.ibef.org/industry/india-
automobiles.aspx, 25th August, 2016

[ii] Academia.edu, Consumer Buying Behavior in Automobile Industry,

http://www.academia.edu/7318995/Consumer_Buying_Behavior_in_Automobile_Industry, 26th
August, 2016

[iii] ijirset (2015), A Study on Impact of Consumer Behaviour Pattern on Buying Decision of
Small Cars, http://www.ijirset.com/upload/2015/october/66_23_A_Study.pdf, 26th August, 2016

[iv] Researchgate, CAR MARKET AND BUYING BEHAVIOR-A STUDY OF CONSUMER

PERCEPTION,https://www.researchgate.net/publication/267791569_CAR_MARKET_AND_B
UYING_BEHAVIOR-A_STUDY_OF_CONSUMER_PERCEPTION, 26th August, 2016

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