A STUDY OF CONSUMER BEHAVIOR IN U.P.

TOWARD HYUNDAI CARS

(A CASE STUDY OF KANPUR NAGAR)

PROJECT
REPORT
SUBMITTED TO THE
DAYANAND ACADEMY OF
MANAGEMENT STUDIES

By
PRASHANT MISHRA

Under the Supervision of

Miss Stuti Jain
BBA, DAYANAND ACADEMY OF
MANAGEMENT STUDIES,
KANPUR
 Chapter-I
INTRODUCTION

“It is the customer who casts the vote that determine how
big a company would be.”

This thesis is an investigation into consumer perceptions

towards HYUNDAI CAR in Uttar Pradesh. Peter Drucker (1967) refers

automobile industry as the “Industry of Industries”. It is the backbone

of petroleum, steel and manufacturing sectors. It creates employments

for thousands and gave birth to many entrepreneurs. It satisfies one of

the most basic needs of human being, mobility. It is a well-known fact

that automobile Industry is the cornerstone of some of the most

influential economics in the world like USA and Japan. Indian

automobile industry is all set to play the same role in Indian economy.

Indian automobile industry is one of the most modern, growing and

vibrant automobile markets on the global map. The four-wheeler

market in India is also one of the fastest growing and most promising.

No wonder, it has become a center of attraction for most of the global

automobile players.
Chapter-II
LITERATURE REVIEW
 Chapter-II
LITERATURE REVIEW

This chapter reviews concepts and theories by researchers

that are highly related to the area of study. The chapter provides a
critical analysis of the views and insights of various researchers on
the subject area. The chapter starts by explaining the basics of the
study, being consumer behaviour. Consumer behaviour for
premium passenger cars in Uttar Pradesh is brought to light. The
factors that are believed to effect consumer preference for premium
passenger cars are then discussed. Further, the literature will
examine how the Indian car industry is segmented. The chapter
then reviews effects of consumer ethnocentrism with regard to the
evaluation of global brands and local brands by Indian consumers.

The literature review offers the theoretical background to the

research including definitions, framework, concepts and models.
Definitions of what constitutes consumer behaviour, along with the
consumer decision-making process, will be articulated. Further to
the above, a different view of consumer behaviour will be offered
along with the role and value of possessions.

Piplai (Research Entitled: Automobile Industry:

Shifting Strategic Focus)
Piplai (2001) examines the effects of liberalization on the Indian

vehicle industry in terms of production, marketing, export, technology

tie-up, product up-gradation and profitability. Till the 1940s, the Indian

auto industry was non-existent, since automobile were imported from

General Motors and Ford. In early 1940s, Hindustan Motors and

Premier Auto started by importing Know-How

29
from General Motors and Fiat respectively. Since the 1950s, a few

other companies entered the market for two wheelers and commercial

vehicles (CVs). However most of them either imported or indigenously

produced auto components till the mid-1950s, when India had

launched import substitution programme, thereby resulting in a

distinctly separate auto component sector. Due to the high degree of

regulation and protection in the 1970s and 1980s, the reforms in the

early 1990s had led a boom in the auto industry till 1996, but the

response of the industry in terms of massive expansion of capacities

and entry of multinationals led to an acute over capacity. Intense

competition had led to price wars and aggressive cost-cutting

measures including layoffs and large scale retrenchments. Indian

companies have started focusing on the price-sensitive consumer.

Utility Vehicles, foreign companies continues utilising their expertise

on technology-intensive vehicles for individual and corporate usage.

Thus, Piplai (2001) concludes that vehicle industry in

India has not gained much from the reforms, other than being
thrusted upon a high degree of unsustainable competition.

Howard, J. A. and Sheth, J.N. (Research Entitled:

Model of Buyer Behaviour)
Howard and Sheth (1968), postulates one of the best known
models of consumer behaviour, which explains interactions, the
theory of buyer behaviour. Practically between the inputs (stimuli
that the consumer receives from his or her environment) and
outputs (the consumers‟ actions, as observable results of the input
stimuli) of decision-making are the „constructs‟, which are the
processes, the consumer goes through to decide upon his or her
action. Authors grouped these into following two areas:

30
 1. Perceptual: Those concerned with obtaining and
handling information about the product and services.
2. Learning: The process of learning that leads to the
decision itself.
In light of the above model the consumer decision-
making is a process that the consumer goes through.

Sagar, Ambuj, D. & Chandra & Pankaj (Research Entitled:

Technological Change in the Indian Passenger Car Industry)
Sagar et al. (2004), discussed, as to how the Indian car industry

has advanced technologically driven by a confluence of factors such

as intense competition, demanding consumer preferences,

Government policies (especially tightening emission standards), and

the global strategies of the various players. They elaborated that car

manufacturers in India are based on designs, incorporating advanced

technologies, that are often comparable with those available globally

and Indian car exports are also growing rapidly.

Mandeep Kaur and Sandhu H.S. (Research Entitled: A Study on

Factors Influencing Buying Behaviour of Passenger Car Market)
Mandeep Kaur and Sandhu (2006), attempts to find out
the important features which a customer considers while
going to purchase a new car. The premium car owners
perceive that safety and comfort are the most important
features of the passenger car followed by luxuriousness.

31
Dr. S. Subadra, Dr. K. M. Murugesan, Dr. R. Ganapathi
(Research Entitled: Consumer Perceptions and Behaviour:
A study with reference to car owners in Namakkal District)
S. Subadra et al. (2007), postulates the changing perceptions

and behaviour of the consumers with special reference to the car

owners. Through this research paper the authors discussed how India

is witnessing a change in consumerism. Market has now become pre-

dominantly consumer-driven. The focus has now been shifted from

product based marketing to the need based marketing. Consumer is

given many options to choose. This paper discussed the consumer

perceptions and behaviour of the car owners which was supposed to

give a feedback on how marketing strategies work. This study throws

light on various features that the manufacturers should concentrate on

to attract the prospective buyers. The authors trace the factor-analysis

– factors influencing purchase. The general purpose of this is to

find a method of summarizing the information contained in a
number of original variables into a smaller set of new composite
dimensions with minimum loss of information. It derives out of
several variables which are identified as the influencer in purchase
decision and satisfying the consumers. Some 14 variables under
the sub-head „factors influencing purchase‟ have been discussed.
Hence, an understanding of the consumer behaviour enables a

marketer to take marketing decisions which are compatible with its

consumer needs. There are four main classes of consumer behaviour

determinants and expectations i.e., cultural, socio-economic, personal

and psychological. The manufacturers and marketers who study the

behaviour of consumers and cater to their needs will be successful.

32
Balakrishnan Menon, Dr. Jagathy Raj V. P. (Research
Entitled: “Determinant Mean percentage score factors of
the consumer purchase behaviour of passenger cars”)
Through this paper the researchers discuss the main purpose

hat is to come up with the identification of possible parameters and a

framework development, that influence the consumer purchase

behaviour patterns of passenger car owners in the state of Kerala, so

that further research could be done, based on the framework and the

identified parameters. With the multiple choices available to the Indian

passenger car buyers, it drastically changed the way, the car purchase

scenario in India. It transformed the automobile scenario from a

sellers‟ market to buyers‟ market. Passenger car customers started

developing their own personal preferences and purchasing patterns,

which were hitherto unknown in the Indian automobile segment.

Researchers conceptualized a consumer purchase behaviour model

with major parameters influencing the behavioural patterns of the

passenger car owners. In this model it is represented that the

consumer behaviour is a blend of Economic, technological, political,

cultural, demographic, and natural factors as well as his own

characteristics which is reflected by his attitude, motivation,

perception, personality, knowledge and lifestyle.

The study benefits the stakeholders of car manufacturers,

dealers, financing agencies, to formalize and sterilize their policies

towards an effective marketing strategy. All the parameters developed

in this paper and the model which has been conceptualized was tested

through an extensive research and quantitative analysis to establish

its acceptability. It is concluded that marketers can rationalize their

existence only when they are able to understand consumer behaviour.

33
Desagen Moodley (Research Entitled: “Consumer
Behaviour of the Black Middle Class with the Passenger
Vehicle Market in South Africa”)
In this research again the factors that influence the decision-
making process of the consumer while purchasing a passenger car
have been discussed. Results of this research confirmed that the
steps in the decision-making process were followed by this
segment of the population. The primary objective of this study is to
investigate the consumer decision-making process of the
consumers in purchasing a consumer motor vehicle. Further
analysis resulted in establishing both the product and situational
factors that played a vital role in influencing the purchase decision.
The research determines the factors result in the need to

purchase a passenger vehicle by evaluating the problem recognition

step of the decision making process. It is ascertained that the sources

as well as different types of information used during the information

search step and the impact of this during the decision making

process. This research is done to establish the product and situational

variables that are important to the consumers when purchasing a

passenger vehicle during the alternative evaluation step of the

decision making process evaluation of the purchase step, decision-

making process and the satisfaction of the product and so in the post-

purchase. Through this dissertation, the necessity, circumstances and

price were identified as the key factors that were identified during the

problem recognition step that contributed to the decision to purchase

a passenger vehicle.

A combination of information sources, ranging from the

internet, recommendations, advice, test drives, through the print

media were referenced prior to the purchase. From the perspective of

34
personal influence, family members, colleagues and friends were
found to be the most influential in the decision. Price, brand, fuel
consumption, features and benefits along with a maintenance/
motor-plan were identified as a top five product factors that
influence the passenger car consumers. The situational factors had
a very strong emphasis on financial implications. Personal income,
monthly instalments, interest rates, lifestyle and payment period
were identified by Moodley (2007) as the top five factors that
influenced the black middle class while making a purchase.

Thus, It is determined that the majority of the

population understand the purchase transaction process.
The majority indicated that, they were involved and or
concerned during the purchase process.

Shyamala Mathan Sankar (Research Entitled: Consumer

Perception of Global vs. Local Brands: The Indian Car Industry) Shyamala

Mathan Sankar (2006), through this research study examines consumer

perception of global brands vs. local brands in the Indian car industry.

Consumer brand perception is having substantial implications in

Marketing. This study explores and helps in understanding consumer

perceptions of global and local car brands in India by accomplishing the

secondary objectives. The secondary objectives were achieved by

highlighting the factors that affect consumer preferences for global

brands, by examining the effects of country of origin on consumer

perception for global brands and local brands, and by studying the

effects of consumer ethnocentrism

towards global brands.

The findings of this particular study advised that the consumers

who possessed global car brands preferred their car brands due to

35
factors such as global presence, worldwide reputation, and quality
of being a foreign make. It was found the prestige of status had a
very little or no influence in their preference for global car brands
consumers made favourable perceptions of the country, wherein
they tend to associate factors such as superior quality, technical
advancements modernization etc., to the country from which the
brand had taken its origin. Consumers who owned a local car brand
evaluated the local brand in a favourable manner, wherein they tend
to associate the brand to India‟s strong automobile sector that
makes quality and technically efficient cars. The study found to
have both non-ethnocentric consumers and consumers who were
low on CET. Most of the study results show, the local brands to be
good in India, but not as good as the global ones in quality,
technical expertise and designs of the cars.

Dr. M. Akber, P. Ashok Kumar (Research Entitled: “A

Study on Attributes of Car Buyers in Vellore District”)
M. Akber and P. Ashok Kumar (2012), presents this study of
consumer buying behaviour , that has proved that many factors
like price, income, distribution of income, competition with
alternatives, utility, consumer preference (economic factors) and
factors like culture, attitude, social values, lifestyles, personality,
size of family, education, health standards etc., play a major role in
buying behaviour of customers. The scientific study on the
purchase decision towards the purchasing of cars has revealed
fruitful findings and recommendations, which could be used for
enhancing the products to meet the requirements of car buyers.
This study explores aspects like: i. To investigate the reason for
the time gap between intention and actual purchase of a car.

36
ii. To identify the attribute sources of information for
purchasing a car.
iii. And to measure the significant motivating factors that
contribute for the preferences of the cars.
The overall analysis that contributes for the preference of
any car has come with five significant factors:
- Economy in fuel
- Economy in maintenance
- Purchase price
- Warranty
- Style
Pick-up, durability and size of the cars have been preferred
very less by the respondents. Resale value, company reputation,
after sale value, and prestige are the attributes which were not at
all preferred by any consumer using any brand of car.
The study has brought out the attributes of buyer of market
and different brand of a given market. If the Marketing Management
of respective car companies lesser the car as per the aspiration of
buyer revealed through the perfect study they would stand to
benefit both in intern of volume and value of turnover.

Balakrishnan Menon, Dr. Jagathy Raj V. P. (Research

Entitled: “Model development and validation for studying
consumer preferences of car owners”)
Balakrishnan Menon and Dr. Jagathy Raj V.P. (2012) present this

study to explore and conceptualize various parameters, which

influence the purchase pattern of passenger cars in the state of Kerala.

It also aims to develop a framework to study the behavioural patterns,

and also validate the acceptability of the research model so developed,

37
which might eventually influence the consumer purchase of the

passenger cars in the state. The parameters were grouped into major

categories such as product features influences, personal preferences,

market influence, external influence and influence of car financing

agencies, making it fast and affordable interest rates for car loans.

The data is collected and assimilated; the researcher

conceptualized the framework of consumer purchase behaviour
of passenger cars. The author further developed parameters for
further research study and consolidation, and identified further
areas of study for his full scale research work. The parameters
developed by the authors and the model which has been
conceptualized, could be further studied and tested through an
extensive research and quantitative analysis, for data analysis,
interpretation and recommendations.

Jakrapan Anurit (Research Entitled: “An investigation into

consumers towards the purchase of New Luxury Cars in
two culturally distinct countries: The UK and Thailand”)
This research is an investigation into consumer
perceptions towards luxury products and exemplified by
two luxury car Marques in two main markets and seeks to
explain the brand dominance of BMW in the individualistic
culture of the UK and Mercedes in communitarian Thailand.
This research aims to answer following two questions:
i. What are the factors, distinguish a luxury car?
ii. How do cultural differences between the UK and
Thailand explain the difference in purchasing
patterns of BMW and Mercedes and provides insights
for brand marketing of the two luxury car Marques?

38
 The principal contribution of this study lies in extending our

understanding of consumer behaviour through an empirical

examination of the contribution of group and social influences on

consumer behaviour towards the purchase of new luxury cars. This

thesis under study demonstrates the significance of the contribution

of group and social influences on consumer behaviour of luxury

products as exemplified are luxury cars in two main markets, the UK

and Thailand. Theoretical contributions of this thesis are as under:

- This thesis confirms Fishbein‟s behavioural model that there

can be different types of beliefs held by an individual.

- The theoretical contribution of this thesis lies in an

extension of Maslow‟s hierarchy of needs and motivation.
- This thesis develops links between culture and consumer

behaviour by linking branding and consumer needs using brand

components, i.e. - functional, social and experimental images.

Constanin Sase, Madaline V. Ariton (Research Entitled:

“Factors influencing passenger car’s consumer behaviour
and their use in the environmental Public Policy”)
Through this study author aims to make an analysis of

passenger car customer behaviour with an emphasis on the adoption

of Low-Carbon and fuel efficient vehicles, based on the research

existing on the subject. The author analysed the main ideas existing in

the academic literature on the study of the consumer behaviour for

passenger cars and highlight the role of the car in the consumers‟

mind and what blocks adopting environmental friendly cars.

According to the presented studies, it seems that the car has an

important symbolist to the consumer and doesn‟t represent only a mean

of satisfaction of the transportation need. The car is combined in

39
the consumer perception with his/her personality. It defines his/her
compared to the others and states his/her belonging to certain
consumer groups. It is presumed here that the role of the car will
not be changed in the near future; so the actions aiming to
influence the consumer behaviour need to take this into account.

Badri Narayan G., Pankaj Vashisht (Research Entitled:

“Determinants of competitiveness of the Indian Auto Industry”)
As in all other countries, the Indian automobile industry is also

one of the key drivers of industrial growth and employment, which will

further gain in importance in the coming years. Its‟ recent records of

rapid growth of output, productivity improvements and expanding

share in global market has perhaps not been so well documented. This

study fills that gap. The study helps us understand how the industry‟s

success is quite directly linked to the trade and industrial policy

reforms initiated in the early 1990s. more importantly, this study

identifies the critical constraints that prevent the industry from further

expansion in the global share and emerge as one of the major

production and export hubs in the coming years.

According to this study, the major advantage of the Indian

economy is educated and skilled workforce with knowledge of English

language. So, our disadvantages include poor infrastructure,

complicated tax structure, inflexible labour laws, interstate policy

differences and inconsistencies. This study analyses the determinants

of competitiveness in the Indian automobile industry. The effective

rate of protection on automobiles is much higher than on components.

With the higher countervailing duty and other cesses/levies, the

effective rate of protection for automobile sector would be even

higher. The differential rate of effective protection distorts resource

40
allocation and investment pattern in the industry. The import
tariff for the assembled vehicles is 60%. Given the low level of
protection both for the auto components and CKD/SKD kits,
this reflects a policy bias in favour of auto assembles.
These are few of the recommendations provided by the
authors. It has been emphasised to work out for the several
constraints, e.g. to strengthen R&D and design capacity, skill
shortages, India‟s current levels of tariff on capital goods,
higher material goods, infrastructure deficit, for strengthening of
the anti-dumping mechanism and lack of credit availability etc.
At last, the authors opine that, the recommendations provided in
this paper, if accepted and implemented, could contribute to
India‟s emergence as one of the major automobile producing
economics in the world. Given our domestic demand and the
entrepreneurial talent, this would be a natural outcome.

Mahipat Ranawat, Rajnish Tiwari (Research Entitled: “Influence

of Government Policies on Industry Development: The
case of India’s Automotive Industry”)
According to this research, the evolution of India‟s automobile

industry is identified to have occurred in four phases. In the first (1947-

1965) and second phase (1966-1979), the important policies identified

were related to protection, indigenisation and regulation of the

automotive industry. On the one-hand, these policies helped India to

build an indigenous automotive industry. While on the other it led to

unsatisfactory industry performance. In the third phase (1980-1990),

the single most important policy identified was the one with regard to

relaxation in the means of technology acquisition. The foreign

competition inducted into the industry transformed its

41
dynamics. Lastly, in the fourth phase (1991 onwards), the
liberalization with regard to foreign investment had a significant
influence on the Indian automotive industry as we see it today.
This work traces the evolution of the automotive industry from

its inception to present day and identifies the important policies made

by the Indian Government. This work also studies the influence of

important policies on the development of the industry. It is also of

interest to understand the considerations made on the part of the

Indian Government that underlie such policies and to explore the role

played by the Government in the development of the industry. With

every major shift in policies made by the Indian Government, the

automotive industry has come out stronger and better. While the shift

in policies seems to have mostly been brought by choice events, the

Indian Government has at least to be credited for making the right

decisions and implementing them correctly. It‟s paradoxical that the

Indian middle class, the most attractive features for foreign investment

in the liberalization phase, was a outcome of the statist ideologies in

the regulatory phase. Author has made a detailed historical account to

provide the context and considerations under which the policies were

formulated by the Indian Government.

Dr. H. S. Adithya (Research Entitled: “Customer Perception and

Behaviour of car-owners- an Empirical study in Bangalore city”)
Like previous ones this study also attempts to analyse the

variable that affect the buyer behaviour today. It throws light on

various features that the manufacturers should concentrate on to

attract the prospective buyers. It concludes the consumer behaviour

plays a vital role in marketing cars. Consumer behaviour consists of

the human behaviour that goes in making purchase decisions.

42
Understanding of the consumer behaviour enables a marketer to take

marketing decisions which are compatible with its customer needs.

Four major classes of consumer behaviour determinants and

expectations are cultural, socio-economic, personal and

psychological. The socio-economic determinants of consumer

behaviour consists of age, marital status, occupation, education,

income, family size, realizing the importance of passenger car industry

in the present economic situation, the researcher has analysed the

perceptions and behaviour of consumer related to the product.

From the discussion made in the paper, there are certain product

attributes which are identified in the study as influencing the purchase

decision and satisfying the consumers. Manufacturers show concentrate

on the product attributes as they influence the choice of more prospective

buyers. The population growth in India and the increasing number of

middle class consumers have attracted the attention of car manufacturers

and marketers. Those manufacturers and marketers who study the

behaviour of consumers and cater to their needs will be successful. It is

concluded that consumer behaviour has a greater role to play in the LPG

era of economic activities.

Dr. K. Singaravelu (Research Entitled: “Consumer

Behaviour: A study of influence of special features of
passenger cars in Coimbatore”)
This research is an attempt to assess the buying behaviour of

passenger cars. And to examine the pre-purchase behaviour of

passenger car buyers, study gives an analysis of influence of special

features of passenger cars. It is illustrated that Government employees

have got their salary increment after introduction of sixth pay

commission, which make them shift from two wheelers to four

43
wheelers. Hence, rising per capita income and changing demographic

distribution are conducive for growth of automotive industry. In this

research paper influence of the sources of information and influence

of special feature of passenger cars have been discussed. Sources of

information are classified into three categories, i.e., personal sources,

commercial sources and public sources. It is concluded that family

members, friends and relatives are the main motivators to purchase

the passenger cars. Likewise the factor analysis condensed and

simplified the influence of twenty seven features of passenger car and

grouped into five factors explaining 62.585 percent of the variability of

all the 27 features of the passenger cars.

The manufacturers should put in more efforts to increase the

market share in terms of introducing more innovative colours and new

models. Since, most of the customers feel that maintenance cost is

pretty high. The management should take efforts in reducing and

create awareness among customers by showing them how cheap it is

to maintain their passenger cars when compared to its competitors.

Sheth, J.N. Mittal, B. and Newman, B.I. (Research Entitled:

“Customer Behaviour Consumer Behaviour and beyond”)
Sheth et. al (1999) stated that in the individual decision-making, the

three customer roles (buyers, payers and users) could all be played by a

single individual, or each could be played by a different individual. The

buyer is the person who is engaged in the procurement of the product

from the marketplace. The buyer is the person who plays the role of

financing the purchase and also imposes the relatively inflexible budget

limits. The user is the person who actually uses and derives the benefits

or performance derived from the product or service. As a customer, each

of the above role players faces choices

44
which call for decisions. Hence, customer decisions are the decisions,

which customers make in the market place as buyers, payers and

users. Typically these decisions include whether to purchase, what to

purchase, when to purchase, from whom to purchase and how to pay

for it. Whether to purchase is the first level of decisions that entails

weighing alternative uses of money and time resources. Sheth et. al

(1999) go on to add that the product/service level choice in both a

whether to and what to purchase decision.

Mental budgeting is an important aspect of customer behaviour

particularly at the decision-making level. Mental budgeting is defined

as, “the idea that customers mentally set aside budgets for products

categories which guides their subsequent behaviour as customers”

(Sheth et. al, 1999, p. 518). Sheth et al, 1999, postulates the process of

customer decision making as shown in the figure below:

Figure 2.1 Consumer Decision Making Process

Problem Information Alternative Purchase Post -Purchase
Recognition Search Evaluation Experience

Source: Sheth, Mittal and Newman (1999, p. 529)

According to Sheth et al (1999), consumer behaviour is determined

by an individual‟s characteristics, demographics and motives.

Langford and Schultz (Research Entitled: “Gaining 3-D

insight to drive profitable growth strategy and leadership”)
According to Langford and Schultz, (2006), “consumers tend to

be rather unpredictable and as such are notoriously difficult to

understand”. Further to that consumer‟s preferences and values are

complex, often rooted in factors unknown to even themselves. It is

45
therefore justified to state that consumers say one thing and then
act is ways that almost of the time appear contradictory. Langford
and Schultz (2006) adopted the above view and through statistical
analysis showed that no correlation between brands favoured and
the actual purchase patterns. This clearly demonstrates that
knowing the perceptions of customers and say is not the same as
knowing how they will react to changes in product attributes or
Marketing messages. Knowing the minds of consumers is only
useful if it deepens one‟s understanding of their intention,
behaviour and to affect it (Langford and Schultz, 2006).

Hirschman et al. (Research Entitled: “The Experimental aspects

of consumption: Consumer Fantasies, Feelings and Fun”) Hirschman

(1982), first articulated the experimental view, built

on the evolutionary nature of understanding of consumer

behaviour. This is made evident by the fact that Hirschman (1982)
postulates that the rational choice of consumer behaviour has
evolved to a focus on irrational buying needs. In essence, the
enjoyment i.e. fun, fantasies and feelings (experimental view)
offered by a product and the resultant feeling of pleasure play a
vital role in consumer decision-making and consumption. In
contrast, the information processing model views the consumers
as logical thinkers who solve problems with purchasing decisions.
However, it is noteworthy that Hirschman (1982) indicated that

while the conventional view of understanding consumer behaviour is

useful and still prevails, the experiential view supplements and

enriches the understanding of consumer behaviour by creating a

broadened view. Most of the consumer research has focused on the

tangible benefits of conventional goods and services i.e. passenger

46
cars that perform utilitarian functions based on relatively objective
features. However, the experiential perspective explores all the
symbolic meanings of more subjective characteristics such as
cheerfulness, sociability, elegance (Hirschman, 1982).

Ms. A. Josephine Stella, Dr. K. Rajeshwari (Research

Entitled: “Consumer Behaviour towards passenger cars- A
study with reference to Virudhnagar District of Tamilnadu”)
The research focuses on the consumer behaviour towards

passenger car and involves the critical analysis of factors influence

the purchase behaviour. The research is conducted for better

understanding of the relationship between the consumer satisfaction,

brand image and information from mass media towards the purchase

evaluation at various stages of purchase decision. By understanding

the consumer‟s satisfaction of the product will help the automobile

manufacturers in developing their product to meet customer‟s needs

and designing the proper Marketing programs and strategies. The

researcher has found out that the most important factor that

influences the consumers to use passenger cars is the price of the

cars followed by low maintenance, better quality and durability.

Further, there is significant relationship between demographic

characteristics towards various features of passenger cars. It is

concluded from the following study that customer satisfaction is the

important factor which affects the financial position and goodwill of

the company. Relationship Marketing is an influential asset for

consumer behaviour analysis at it has a keen interest in the re-

discovery of the true meaning of Marketing through the re-affirmation

of the importance of the customer or buyer. A greater importance is

also placed on consumer retention, customer relationship

47
management, personalization, customization and
one-to-one Marketing.

Bell, Gerald (Research Entitled: “The Automobile Buyer

after the Purchase”)
Bell (1967) analysed how a customer feels after buying a new

car. He also explores the effect of customer‟s personalities in relation

to salesman persuasion that attempts to find customer‟s post

purchase satisfaction. This research work was conducted in a large

urban area in the western part of United States. During summer

months of 1965, when the data was collected, 289 new cars were sold.

Researcher successfully interviewed 234 persons. It was concluded

that person, with high self-confidence had very little dissonance i.e.

they made their decisions, accepted then and were happy, where the

persons with low self-confidence had low dissonance and they were

easily persuaded by salesmen but in between them, the customers

with little confidence were highly dissonant and were not easily

persuaded. Perhaps, their self-doubts started to influence their

attitudes after they completed their purchase. Lastly, it was stated that

persuadability acts as an indirect cause of buyer‟s dissonance.

Overy, R. J. (Research Entitled: “Cars, Roads and

Economic Recovery in Germany”)
Overy (1975) examined the nature of effects of motor car

revolution in Germany and demonstrated that the motor road and

motor car has played a significant part alongside rearmament in

initiating and sustaining the upwind in Germany between the year 1932

and 1938. Tables and percentage methods has been used to

demonstrate the data from the year 1920 to 1975 about production of

48
cars and their respective demands. It was observed that
Nazi Motor Plans were not interrupted by the war. They
were always on the developing phase.

Newman, J.W. & Staelin Richard (Research Entitled: “Pre-

purchase Information Seeking For New Cars and Major
Household Appliances”)
Newman and Staelin (1972), investigated the amount of
information seek by new car buyers and buyers of major household
appliances. Researcher employed two multivariate techniques,
Automatic Interaction Detector (AID) and Multiple Classification
Analysis (MCA). Data was collected from 653 households who had
bought one or more of the products of interest in 1967 or 1968 prior
to August 1968. Probability sampling was used to choose
households in USA excluding Alaska.
About 217 cars and 435 other major household appliances were

bought in that period. 29 variables were used e.g. level of satisfaction

with old products, number of television sets bought in last ten years

etc. It was found that 40 percent of buyers who had not regularly used

the products before also considered only one brand initially. Results

of the techniques used indicated that the amount of information

sought by many buyers was small, even though information was

accessible. Hence, it was concluded that buyers tried to search for the

things before purchase and unable to get proper information and the

purchase decision might prove to be wrong.

49
Davis, H. L. (Research Entitled: “Decision Making
within Household”)
Davis (1976), attempts to study the involvement of family

members in economic decisions and the process by which family

decisions are made. Davis opined that overall economic decisions

could be classified into three groups. Frequently purchased good or

services, durables and other economic decisions. One time purchase

of durables is more likely to involve more than one household member.

Purchase of durables is often preceded by a progression of

interrelated activities and decisions through time. Husbands, wives

and children have more opportunities to become involved at one or

more steps in purchase process. The studies show dominant influence

of husbands for decisions concerning price range and whether to

move, while the dominance of wives in deciding the number of

bedrooms and other house attributes. Researcher found a clear

dominance of husbands in automobile purchase, entertainment, small

decisions comprised of issues like financial management, money

management, budgeting etc. He found the role of wives as prominent

in money management. He made an agreement that group decision-

making differs in some important respects from individual decision-

making. First, families as group have characteristics that differ from

problem solving groups in organization or in the laboratory. Second,

he presented a repertoire of decision-making strategies with their use

being situational. And third, group members may not necessarily agree

about goals and agreement is not necessarily to reach decision.

50
Blomquist, Ake and Haessel, Walter (Research Entitled:
“Small cars, Large cars and Price of Gasoline”)
Blomquist and Haessel (1978) estimated disaggregated
demand functions for cars by size the age with particular attention
to the effects of gasoline prices on the composition of demand. The
data consists of cross-section of five year time series from eight
Canadian provinces. Researchers concluded that demand for each
type of cars had a relatively high short-term elasticity with respect
to the prices of gasoline was found to be relatively small, however,
the demand for older cars was found to have a substantial elasticity
with respect to price of gasoline and it was further concluded that
large new cars were affected by the change in price of gasoline.

Saish, S.M. and Bhardhwaj, Sivakumaran (Research

Entitled: “Information Search Behaviour among New Car
Buyers: A Two Step Cluster Analysis”)
Satish and Bharadwaj (2010) conducted a research on information

search behaviour among new car buyers. Data was collected from two

Indian Metros, Bangalore and Chennai. The variables, selected for the

study were taken from previous research. The data was analysed with the

help of factor analysis and variables so taken were related with attributes

of cars. Four factors were extracted e.g. styling and comfort, value for

money, safety and reliability and miscellaneous etc. The groups were

distinguished using cluster analysis which was applied on search activity

variables and personality variables. Four clusters so formed were named,

broad moderate searchers, intense heavy searchers, low broad searchers

and low searchers. So the study was the first to segment the car buyers in

India and also the results were supported with previous studies.

51
Chattopadhyay, Tanmay, Dutta, Dutta, Rudrendunarayan &
Shivani, Shradha (Research Entitled: “Media Mix Elements
affecting Brand Equity: A study of the Indian Passenger Car
Markets”)
Chattopadhyay et al. (2010) tested a model for finding the effect

of advertising frequency across different media vehicles towards

building brand equity for passenger car market. The model was tested

for both first time buyers and repeated buyers. The effect of media-mix

elements on dimension of brand equity was examined. The media-mix

elements taken for the study were TV ads frequency, print ads

frequency, event sponsorship frequency, online ad frequency and

mobile ad frequency. Dimensions of brand equity taken were

perceived quality and brand awareness for cars. Secondary data for

the research purpose was collected from „India: forecast and analysis,

2007‟. The primary data was collected with the help of pre tested

questionnaire with the help of pro-advent to administer survey across

five states in India. 494 respondents agreed to give their responses but

effective sample was 200. Sample was collected with the help of

systematic randomized sampling technique. Every third person who

parked their car in parking of mall between 3 pm to 9 pm on Friday was

contacted for survey. Structured Equation Modelling was used to

analyse the data and Cronbach Alpha was used to test validity and

reliability. It was found that all the four factors affect perceived quality

and brand awareness for both first time and repeated passenger car

buyers. It could be concluded that all media-mix elements do not have

significant impact on brand equity.

52
Goyal, B. B. & Aggarwal, Meghna (Research Entitled: “Car
industry in India- An analytical study of factors of importance”)
Goyal and Aggarwal (2008), attempts to find the relative
importance of various factors that attracts the customers while
selecting a particular car in its segment. For the purpose, the
questionnaire was developed and respondents were selected by
convenience sampling method. From Ludhiyana 277 respondents
were selected which comprised of 67 respondents from luxury car
segment and 117 from small car segment. Various statistical
techniques like Factor Analysis, Mean, Standard Deviation and Bi-
Variate Correlation had been used. The study reveals that in case of
purchase of luxury cars, the factors like horse power, model,
luggage capacity, accessories and loan facility emerged as most
significant factors and in case of medium cars, after sales service,
availability of spare parts, model, shape and engine capacity were
important. In case of small cars, the factors like accessories, engine
capacity, after sales service and price were main considerations.
Hence, it was recommended that the car manufacturers had to
properly understand the relative importance of various attributes
for the different segments of cars.

Kaushik, V. K. & Kaushik, Neeraj (Research Entitled: “Buying

Behaviour for Passenger Cars (A study in South West Haryana)”)
Kaushik and Kaushik (2008) postulated empirically customer‟s

preference towards passenger car brands in South West Haryana

region. He considered pre-purchase and post-purchase behaviour and

factors influencing the brand preference of passenger cars.

Judgemental Sampling method was used and study was carried out in

Bhiwani and Mahendragarh districts of Haryana in months of June to

53
August, 2007. Multi-Dimensional Scaling Techniques and cross

tabulation were used. It was observed from the study that Maruti 800,

Alto and Wagon R were most favourites in that region and customers

were more influenced by friends, relatives rather than dealers and

sales persons. Brand name, fuel, efficiency and price were found to be

primary determinants for buying cars in that region.

Rani, Sakthivel (Research Entitled: “Passenger Car

Industry in India”)
Rani (2008) presented a study of the passenger car industry in

India. Trends in Indian car industry had been studied prior to

liberalization and post- liberalization era. She articulated that broad

branding policy which gave new licences to broad groups of

automotive products started in 1985. In post-liberalization era, the

passenger car industry in the nineties was characterised by an

increase in the number of brands available in the market which caused

brands to compete on the basis of product features. Graph of sales of

cars increased from 264803 units in 1994-95 to 819918 units in 2004-05.

The car industry contributed 19% of indirect taxes in 2007 and gave

direct employment of over 2 million and indirect employment of about

10 million. According to the author, basic challenges to Indian car

industry were road infrastructure, transportation, fuels, technology

infrastructure and reengineering. Most of the exports were in compact

car segment and over a period of time, it is presumed that it could

grow to include luxury cars also.

Verhoef, Peter, Langerak, Fred and Donkers, Bas (Research

Entitled: “Understanding Brand and Dealer Retention in the
New Car Market: The Moderating Role of Brand Tier”)

54
 Verhoef et. al (2007) investigates the brand and dealer retention

in the new car market and also studied the moderating role of brand

tier. The study investigated the degree to which dealers contribute to

brand retention and studied how this contribution is moderated by

brand tier. The data was collected from recent car buyers and sample

size was 999 car buyers. Findings showed that dealers selling volume

brands were able to improve brand retention rates. It was revealed that

dealers of prestigious and economy brands were unable to affect

brand retention. Extrinsic dealer service qualities have the smallest

affect for dealers selling economy brands, while dealer payment equity

is the very important determinant for dealer retention for these dealers.

Renganathan, R. (Research Entitled: “Consumer

Markets and Buyer Behaviour of Cars”)
Renganathan (2005) analysed the consumer markets and buyer

behaviour of cars in Chennai area. The sample size for the study was 135

comprising of people who own a car and those who are willing to upgrade

from a two wheeler to four wheelers. Results indicated that 39% of the

surveyed respondents expect a car to be luxurious and mid-sized. It

makes clear that, the style and appearance of a car also influence a

customer‟s intention to buy a car. Hyundai has got a substantial market

share in the urban areas. It could also conduct some campaigns and road

shows in rural areas and cater to the respective markets. Further, he

suggests that when a company need an effective advertising to persuade

the consumers, it should first concentrate on selection of celebrity

endorsers. The brand managers must identify the right celebrity by

keeping the long-term impact in their minds, as

55
celebrity advertisements are not only to build powerful brand but

also assist to increase the recall level coupled with higher sales.

Sheth & Sisodia R.S. (Research Entitled: “Consumer

Behaviour in the Future”)
Sheth and Sisodia (2004), stated that human behaviour is
changing rapidly. As a result of latest technological revolution,
changes in market place behaviour will naturally follow. Future
consumers will be dramatically different from past and present
consumers. They will be more time-driven, more demanding, highly
individualistic and more information intensive. The success of
marketers will depend of their ability to deliver total customer
convenience. It includes hassle-free search (advertising-on-
demand), hassle-free acquisition (home delivery), hassle-free
consumption (e.g. products with built-in-expert systems to enable
maximal value extraction) and hassle-free disposal. Furthermore,
shopping on demand will include anytime, anywhere procurement
as well as anytime, anywhere consumption. It is concluded that
there will undoubtedly be winners and losers in change process, as
well as leaders and laggards. Marketers, who move proactively now
to redefine the function and rewrite its value equation, will position
themselves for a bright future.

York, Richard (Research Entitled: “Cross National Variation in

the size of Passenger Car Fleets: A study in
Environmentally Significant Consumption”
York (2003) presented a study on cross national variation in size

of passenger car fleets. Further, he studied multiple factors (e.g.,

demographics, economic and socio-political) that potentially influence

56
motorization. Least square regression technique had been
used to assess the influence of different factors. For the said
purpose sample was collected from 138 nations. The findings
of the study suggested that economic development appears
to increase motorization and globalization of individualistic
social and political structures lead to expansion of car fleets.

Morton, F. S. Zettelmeyer, F., & Risso, J. S. (Research

Entitled: “Consumer Information and Price Discrimination:
Does the Internet Affect the Pricing of New cars to Women
and Minorities?”)
Morton et al. (2002) analysed the relationship between car prices

and demographics and also studied the role of internet in pricing of

new cars. Researchers collected the principal data from a major

supplier of Marketing Research Information (MRI). MRI collected

transaction data from a random sample of dealers in the major

metropolitan areas of the United States. Data was collected from

January 1, 1999 to February 28, 2000. Customer information, model

and trim level of car, financing, trade information etc. were included in

the data. Data set contains 671468 transactions at 3562 dealerships.

Price was taken as a dependent variable and demographics like race,

gender, age etc. are considered as independent variables. As results

suggested that, high income and high education indicated lower

elasticity of demand as highly educated personnel were more effective

negotiators. It was observed that women paid more for cars as

compared to men. All these cause and effect relationships had been

sort out with the help of Regression analysis. Comparative analysis of

buying behaviour of African-American and Hispanic buyers was

carried out and found out the

57
following aspects like minorities were mostly unable to finalize the

transactions and bought the cars from dealers at higher cost and they

were also observed in bargaining. Other objective of effect of internet

was also concluded with the help of Regression analysis only. It was

observed that Auto bytel paid 12% less than the other customers.

Autobytel.com also helped African-Americans to cover substantial part

of price premium they would otherwise pay. Hence, it could be

concluded that internet eliminated most variations in new car prices

that resulted from individual characteristics associated with ethnicity

and race. Authors also showed that disadvantaged minorities had

more to gain from using an online buying service than do whites.

Internet hides few of the information about consumer‟s willingness to

pay so price discrimination is likely to be less pronounced.

Dr. Govind P. Shinde, Dr. Manisha Dubey (Research Entitled:

Automobile Industry and Performance of Key Players)
This study represents the figures of Indian automobile
industry during the period 2005 to 2010. The study has been
conducted considering the segments such as passenger vehicle,
commercial vehicle, utility vehicles, multi-purpose vehicles, two
wheelers and three wheelers. All the sections concisely explain
the current and future market trends, the developments in the
Indian automobile market. The methodology used to find the
trends and the market share of the Indian automobile industry.
The researcher for the said purpose, take into account, the past
and current trends in an economy, and more specifically in an
industry, to bring out an objective market analysis.
It has been concluded that despite economic slowdown, the

Indian automobile sector has shown high growth. The economic

58
sustainability and increasing living standards and purchasing powers

of the Indian customers, automobile sector has a bright coming future.

Further to the above, the industry is recording increasing growth rate

in sales, but still there are loopholes in the automobile industry and

these needs to be considered by the automobile industry to overcome.

Satish K. Batra, S. H. H. Kazmi (Book Entitled:

Consumer Behaviour (text and cases))
The author in this book presents an in-depth study of
consumer behaviour through several case studies. It is revealed
that, consumer behaviour is an applied science. Though, the
nature of the subject is such that, there are few definitive
answers. Also, the study of consumer behaviour goes well
beyond the mere act of acquiring or using the product or
service. The study includes of how having or not having things
affect our lives and how our possession or use of products or
services influences the way we feel about others and ourselves.
Furthermore, understanding consumer behaviour and knowing

consumers‟ are not that simple, in fact it is almost impossible to

predict with one hundred percent accuracy, and how consumer will

behave in a given situation. Marketers are interested, in watching

people shopping, flirting, parading, playing, entertaining as they are

keenly interested in the wide variety of behaviours they display. It is

indicated that consumers are moved by a complex set of deep and

subtle emotions. Their behaviour springs from deeply held values and

attitudes, their perceptions of the world and their place in it, from

common sense, impulse, or whimsy, all this is the outcome of a large

number of external and internal influences.

TABLE 5.6 PREMIUM PASSENGER CARS FROM FORD
Company Model
Ford Ford Mondeo Ghia Duratec
Fiesta

HYUNDAI MOTOR COMPANY

Type : Public
Industry : Automotive
Founded : December, 1967
Founder : Chung Ju-yung
Headquarters : Seoul, South Korea
Products : Automobiles, commercial vehicles, engines
Area served : Worldwide
Staff strength : 57,105 (2011)
Parent : Hyundai Motor Group
Website : www.hyundai.com, www.hyundai.co.in
Company Logo :

COMPANY PROFILE:
Hyundai Motor Company is the South Korean automobile

manufacturing company. It is placed sixth among the automobile

maker in the world. Hyundai was started in 1967, when the founders

decided to assemble someone else‟s vehicles. The founder developed

his own vehicles and succeeding in exporting vehicles to other countries. The
company launched its first car, Cortina, in 1968. In 1975, the Pony, the first
Korean car was released by the Hyundai with styling by Giorgio Giugiaro of Ital.
Design and power train technology provided by Japan‟s Mitsubishi Motors. Pony
became the top-selling car on the Canadian market due to its higher degree of
quality and refinement in the lowest price auto segment. In 1985, the one
millionth car from Hyundai was built.
In 1986, Hyundai began to sell cars in the United States. The
company started to produce models with its own technology in
1988, beginning with the mid-size Sonata. In 1991, the company
succeeded in developing its first proprietary gasoline engine, the
four cylinders Alpha, and also its own transmission, thus paving
the way for technological independence. In 1996, Hyundai Motor
India Limited was established with a production plant in
Irungattukottai near Chennai, India. Hyundai Motor India Limited
(HMIL) is a wholly owned subsidiary of Hyundai Motor Company
(HMC). In 1998, Hyundai began to overhaul its image in an attempt
to establish itself as a world-class brand. Hyundai Motor Group,
invested heavily in the quality, design, manufacturing and long-
term research of its vehicles. In 2004, Hyundai was ranked second
in “initial quality” in a survey/study by J. D. Power and Associates.
Hyundai is now one of the top 100 most valuable brands all over the
world. Since 2002, Hyundai has also been one of the worldwide
official sponsors of the FIFA World Cup. In 2011, Hyundai sold 4.05
million cars worldwide and the Hyundai Motor Group was the
world‟s fourth largest automaker. Hyundai vehicles are sold in 193
countries through some 5,000 dealerships.

147
 HMIL is the largest passenger car exporter and the second
largest car manufacturer in India. Currently, the company markets
more than 30 variants of passenger cars in six segments. HMIL‟s

rd
first passenger car, the Hyundai Santro was launched in 23
September 1998, and was a runaway success. HMIL forms a critical
part of HMC‟s global export hub, it touched 1.5 million in exports in
March 2012. It currently exports to more than 120 countries across
the world and has been India‟s number one automobile exporter for
seven year in a row. In September 3, 2013, Hyundai launched its
much awaited car, Grand i10.

MANUFACTURING FACILITIES:
Hyundai operates the world‟s largest integrated
automobile manufacturing facility in Ulsan, South Korea,
which has an annual production capacity of 1.6 million units.
Hyundai has its production plants all over the world which
include: The Ulsan Plant, the Asan Plant, the Jeonju Plant, the
America Alabama Plant, the China Plant, the Indian Plant, the
Turkey Plant, the Russia Plant and the Brazil Plant.
In India, the Hyundai Plant is located in Irungattukottai, 30
kilometres from Chennai. This plant was set up in May 1996 and
rolled out the first Santro seventeen months afterwards. The plant
is built on 500+ acres of land and had an investment of INR 2,500
crores. HMIL‟s fully integrated state-of-the art manufacturing plant
near Chennai boasts of advanced production, quality and testing
capabilities. To cater to rising demand the company commissioned
its second plant in February 2008, having an installed capacity of
330,000 units per annum. Both the manufacturing units are capable
of producing 630,000 vehicles annually. To support its growth and

148
expansion plans HMIL currently has 346 dealers and around 800
centres across India. In its commitment to provide customers
cutting edge global technology, HMIL set up a modern multi-
million dollar Research & Development facility in Hyderabad. In
terms of worldwide sales, the US, Chinese and Indian Marketing
are doing well. Hyundai has also developed a model in India for
sales. Hyundai will grab a large share of the car market by
turning its operations in China and India into key design,
manufacturing and export hubs for its entire global operations.
Hyundai has 6 centres worldwide, located in Korea, Germany,
Japan and India. Additionally, there is an American design
centre in California that develops designs for US market.

TECHNOLOGY:
Hyundai has the Alpha Engine, Theta Engine, S Engine,
Lambda FR Engine, Theta GDI Engine, Class- best power trains,
environment-friendly exhaust systems, green engines, power train
centre and highest performing power trains etc. Hyundai‟s current
design philosophy is known as Fluidic Sculpture, which is heavily
inspired by nature. Hyundai Motor India Engineering (HMIE) gives
technical and engineering support in vehicle development and CAD
&CAE support to Hyundai‟s main R&D centre in Namyang, Korea.
In 2010, Hyundai started its design activities at Hyderabad R&D

centre with Styling, Digital Design & Skin CAD Teams. The R-engine for

passenger Diesel cars that meet the Euro-5 Environmental Regulation

Standards is developed by Hyundai and the company received

certification for “low-pollution emitting vehicle in the metropolitan

area”. The company‟s TAU engine received the honour

149
of being named as the „World‟s 10 Best Engines‟ for the
past two consecutive years.

VISION AND VALUES:

Hyundai released its „Vision 2020‟ to establish the
firm as the global leader in the automobile market. The
company focuses on key vision strategies:
Automotive Vision: “to become a trusted lifetime partner of
our customer, we will bring a new perspective to
automobiles through innovative mobility solutions based
on human-centric, eco-friendly technologies and services”.
Steel Vision: “as an eco-friendly, resource-circulating company, we

will lead a new era in the steel industry by providing high value-added

products and services and realizing world‟s best competitiveness

based on co-operative relations with our stakeholders”.

Construction Vision: “As a global leading provider of high-

value engineering solutions, we will create the foundation
for a batter life through cross-business synergy and
convergence with future technologies”.
Hyundai focuses on five main values: Customer Challenge,
Collaboration, People and Globality. Providing customers top
service will be at the top of their agenda. The company will
venture into new areas and not remain traditional. The company
will have a spirit of collaboration. People will be respected and
valued. The company is not limited to country-centric areas but
will be known in the global arena.