Consumer Behaviour for

Sedan and Luxury Cars

Principles of Marketing Project

Submitted By -
Kartik Jain (2314)
Jaswant Singh (2313)
 CERTIFICATE OF ORIGINALITY

This is to certify that this research project has been made by Mr. Jaswant Singh and Mr. Kartik
Jain. Second year students of Bachelor of Management Studies, Ramanujan College, Delhi
University under the guidance of our Principles of Marketing professor, Dr. Vibhash Kumar. The
project submitted is our original work and we are responsible for the content, except as specified
in acknowledgements or references.

____________________________________________________________________

Jaswant Singh

Kartik Jain

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 Acknowledgement

Firstly, we would like to thank the faculty members, and all our respondents who helped us in
the completion of this project. The completion of this inter-disciplinary project required a lot of
coordination, cooperation, and combined efforts of several sources of knowledge.

We would like to show our gratitude towards Dr. Vibhash Kumar, for giving us this golden
opportunity and guiding us on each and every step. Without his moral support and continuous
motivation, this wouldn’t have been possible. We thank him for giving his important inputs and
modification to this case study to make it more relevant and also proving immense support to us
in each and every step while doing our project.

We would also like to give our sincere gratitude to the car dealers and who spared their time to
fill in our questionnaire with utmost honesty, without which this research would have been
baseless and incomplete.

THANK YOU

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 Index
S. No. Particulars Page No. Contribution

1 Certificate of Originality 2 Kartik Jain

2 Acknowledgement 3 Jaswant Singh

3 Introduction 5 Kartik Jain

4 Objectives 6 Kartik Jain and

Jaswant Singh

5 Scope of Study 6 Kartik Jain

6 Methodology 6 Jaswant Singh

7 Analysis and Interpretation 7 Kartik Jain and

Jaswant Singh

8 Conclusion 14 Kartik Jain

9 References 15 Kartik Jain

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Introduction
India, the world's fastest growing economy is in top-gear with world's second-fastest growing
auto market. India being the second most populated country in the world attracts a huge demand
in the Automobile Industry. Growth in disposable income in urban and rural areas, availability of
easy finance and improvement in infrastructure are other reasons for high growth rate of the
automobile market. The statistics also prove this, as the Automobile Sector contributes 8% to the
Indian GDP. India's automobile market is also flooded with opportunities and has wide scope of
development.

For Indian consumers, buying a car is one of the most important decisions. It has now become a
very important task for the Indian Automobile Manufacturers to understand consumer "buying
behaviour" as it plays a critical role in decision making regarding purchase of products. The
automobile companies should be able to the study the buying behaviour of the consumers to get a
better understanding of their perceptions and take fast action in the competitive environment to
meet the needs of customers.

This purpose of this report is to study the consumer buying behaviour for sedan and luxury cars.
We will try to understand the perception of consumers towards these segments of cars and why a
consumer buy the cars in these two segments. Through a survey we have tried to find out which
are the most preferred cars in these two segments and the reasons behind their popularity. We
have also tried to find the consumer process of decision making and evaluation and selection of
alternatives.

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Objectives
This study tries to meet various objectives, to study the consumer behaviour for both sedan as
well as luxury cars in India. The objectives of this study are as follows :-

 To find out the reason behind purchase of Sedan and Luxury cars.
 To find out the purpose of use of the cars of these two segments.
 To find out the income group of people buying sedan and luxury cars.
 To find the most preferred cars in these two segments.
 To find out the consumer perception and the reason behind their preference.
 To find the buying decision influencers in the process of buying a car.
 To find out the time taken in the process of evaluation and selection of alternatives while
buying a car.

Scope of Study
Nowadays, with the rise in the income level of the consumers, a car has become a status symbol
for an individual. Therefore, there is a significant scope to examine the purchase behaviour and
perception of the consumers. This study uses primary collection of data with responses from 50
consumers to get an insight into the consumers mind to get to know their buying behaviour for
sedan and luxury cars. This study also used the knowledge of car dealers to get to know why
consumer prefer the sedan and luxury segment of cars by collection of primary data through
meetings with various dealers of cars. This study might help a seller to select their target segment
and evolve marketing strategies to increase the sales. It also leads to identify and understand the
scope of growth opportunities for both sedan as well as luxury car segments in India.

Methodology

The study is based on the response collected in form of questionnaires from 50+ respondents
who have been targeted through internet. The study is based on the primary data collected using
a structured questionnaire which was sent to the respondents through various platforms. We also
went to showrooms to collect first hand data where we directly asked various questions to car
dealers and fill this questionnaire. The random sampling was used to choose the respondents.

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Analysis and Interpretation
Sedan Cars

1. To know more about consumer buying behaviour toward sedan cars in India we met Mr. Rajneesh at
Ring Road Honda Showroom, Dwarka Sector 9, New Delhi, 110075. We asked various questions to
him through which we get some more knowledge about consumers of sedan cars like
 The choice of car in this segment is driven by income. In this segment customers first preference
is for safety, driving & Seating comfort and brand, second most preference is for after sales
service, price, power and pickup, mileage whereas maximum speed is of lowest preference. Also
this segment requires value for money, best features, and customer friendly vehicle.

 High school student buying his first car or a small family looking for a safe, reasonably priced
vehicle, sedans are the perfect cars for many drivers. Many models are small enough for easy
navigation (think: beginner drivers as well as drivers operating on tight, busy streets), but many
also are large enough to accommodate the seating and cargo needs of average-sized families.

 Limitation- sedans won't work for everyone For example, if a consumer have large family and/or
is involved in many extracurricular activities (carpooling and hauling around all that sports
equipment can take a lot of space), they might not find a large enough sedan.

 Similarly, if a consumer enjoy activities like off-roading, or live in an area with rough weather or
sketchy terrain, most sedans aren't up to those challenges. He/She might consider a sports utility
vehicle (SUV) or pickup truck in these cases.

2. To find out the most popular sedan car in the Indian Market we asked a question in the
questionnaire which asked them

The most popular sedan car in the Indian market is Honda City. It received 37.2% responses
when the consumers were asked about their preference of the sedan cars available in the
Indian market. The price range of Honda City starts at 8.72 Lakhs and go up to 13 Lakhs.

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 The City sedan has been Honda’s most successful car in India till date and is now in its
fourth generation in the country. This is an important car for Honda as it one of the models
that helps them in the volume game. It has helped Japanese car-maker Honda to take on the
likes of the Hyundai Verna and Maruti Suzuki Ciaz.
Hyundai Verna has followed Honda City in the list of most popular sedans. 18.6% people
preferred it over other sedans available in the Indian automobile market. The price range of
Hyundai Verna starts at 8 Lakhs and go up to 12.88 Lakhs. In the Indian market, the new
Verna is Hyundai’s take on the growing C-segment sedan category as this part of the market
has been gaining a lot of popularity.
It is followed by Toyota's Corolla Altis which received 14% responses.

3. To find out the reason behind their preference the next question was asked from them, the
purpose of this was to find the most desired quality in as sedan car. It can help the marketers
help develop a product which matches the needs of a consumer when they go to buy a sedan
car.

In the sedan cars also the most important factor which makes it different, and also makes it to
stand out in the market from its competitors is the exterior and interior design of the car. 74.4%
chose it as a factor they would certainly consider while buying the sedan car. The manufacturers
need to focus on improvement in the interior and exterior and look for innovative designs to
attract consumers to buy their sedan cars.

The next thing people consider or want in their sedan cars is comfort. They prefer the car which
is comfortable and spacious. Sedan cars are also chosen on the basis of technical superiority and
brand value. In India customers prefer new technology and also have certain perceptions
regarding brand image of a car. So it is important for companies to work on making preferable
brand image which can help them in the long run.
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Luxury Cars

4. To study the consumer perception towards buying luxury cars in India we met Mr. Varun
Seth at Audi Delhi Central, Connaught Place, Delhi. We asked him various questions to get a
knowledge about the consumers who buy luxury cars and why they buy them. These are
some certain findings.
 Income Group - Affordability is the major concern in the case of luxury cars for the
consumers, HNI's or High Net Worth Individuals generally buy such cars. Generally
people who file ITR of Rs. 15,00,000 or more buy luxury cars as they can afford a
down payment of Rs. 8,00,000. We also found out that various loan schemes have
been launched by the automobile manufacturers and the financial institutions which
has made it easy for the people to buy luxury cars. And also with the IT boom, many
youngsters are earning high pay packages which enable them to buy luxury cars.
 Purpose/Usage - Generally the people buying these cars buy them for official use.
Most of the people buying luxury cars already use another car for daily and routine
purposes. Luxury cars make their owners look successful and wealthy and it is
mostly used as a status symbol. The consumers also buy them as they prove to be
more comfortable and faster than other cars.
 Limitations - Certain reasons which stops a consumer from buying a luxury car are
the high service and maintenance cost. Sourcing of spare parts and maintenance
require additional expenditure, which is also a major concern. We also found that
another reason that people in India restraint from buying a luxury car is that excess
expenditure can also attract attention from the tax authorities, who will require a
detailed explanation of the cash that was used to buy the car.

5. To find out the most popular luxury car in the Indian Market we asked a question in the
questionnaire which asked them

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 Tata's Land Rover Range Rover Evoque was the most popular luxury car in the Indian
Market, as majority of the consumers which amounts to 31% would purchase it over
other luxury cars. Land Rover Range Rover Evoque price starts at Rs. 42.93 Lakhs and
goes upto Rs 57.72 Lakhs. It is a compact luxury crossover SUV which has been
produced since July 2011 in three and five-door versions. The Evoque, which was
designed to add a more affordable model to the 'high-end' classic Range Rover range, was
received positively by the automotive press for retaining the features, amenities, and off-
road capabilities of a traditional Range Rover in a smaller package.
It is followed by Tata's Jaguar XJ which is preferred by 19% respondents. The Jaguar
XJ is the name of a series of full-size luxury cars sold by the British automobile
brand, Jaguar Cars since 1968. The current Jaguar XJ was launched in 2009.
It was followed by Mercedes-Benz CLA class with 16.7% responses.

6. To find out the perception of the consumers and the reason behind their preference the next
question was asked from them, the purpose of this was to find the most desired quality in a
luxury car. It can help the marketers help develop a product which matches the needs of a
consumer when they go to buy a luxury car.

A staggering 88.1% people chose styling and design as the reason behind their choice of the
luxury car. The main reason for which a consumer prefers a luxury car over another is it's styling
and design. Styling is one of the biggest reasons people buy the car they drive. Luxury cars being
seen a status symbol are preferred over their design and styling. So the companies should focus
on innovation in design and styling and look for ways to make it better.

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The next biggest factor is brand value. Luxury cars are bought for the name of their brand which
is a very important factor. Brands selling luxury cars have generally positioned themselves as a
luxury car brand and sell only luxury cars.

Performance and Engine is also a very important factor. Luxury cars generally come with a
superior engine. In earlier times high performance in a luxury vehicle was considered useless,
but now it has become possible to meld performance with luxury in the modern vehicle. It has
been done with keeping in mind the needs and wants of the consumers.

Sedan and Luxury Cars : Factors involved in decision making

7. The next question was asked to know that if the consumers believed that travelling in a
luxury or a sedan vehicle raises their social status

More than 80% of the respondents agreed to fact that a sedan/luxury car raise their social
status. None of the respondents disagreed to this question. This proves the fact upper middle
class and upper class consumers generally buy these vehicles to flaunt their wealth. In the
modern times the consumers generally buy the luxury vehicles buy looking at the brand value
of the company and quality matters. The achievers, who adapt to the latest happening and
like to be dominant, are always quick in buying the heavy priced sedans. The development of
the Indian economy and the increased disposable income has influenced people to make their
cars a status symbol.

8. To find about the time which a consumer take to know more about the car and to final the
decision before buying a car we asked the next question in our questionnaire. The purpose of
this was to find out the time consumers spend on exploring various options.

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 As we can see in above fig. the red and yellow color have the largest portion followed by
green, blue and violet. The car consumers take enough time before buying the car to collect
information because they want the best one in their limit so most of the consumes take 2
weeks to one month. For Indian consumers buying a car is the second most important and
expensive decision for a family after their house. So people generally spend a lot of time on
research to find out the best car available in the market and then they try to find the best deal
for that car. It becomes important for manufacturers to provide the information that these
buyers seek in the time frame and provide resources for the availability of these information
sources.

9. To find out about the information sources that consumers use and the importance of these
information sources we asked the next question. The purpose of this question was to find out
the sources which influence the decision of a consumer when they buy a car.

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We asked this question because it's very important for marketing head of any car company to
know which factors influence or persuade the consumers to buy the car. It was found that the
most of the consumers gave importance to the perception and the views of their friends and
family about the cars available in the market. More than 50% of the respondents consider friends
and family as the influencer behind their decision of buying their next car. The next influencer
which persuades people to buy a car is internet, it has given rise to various websites like
cardekho.com and carwale.com which helps people compare different cars. After this are car
shows, car magazines and dealer advice which influence people. These areas can be a good
platform for marketing and advertisements by automobile companies.

10. The next question was asked to see if the consumer perception regarding a car in the Indian
market whether they looked and bought cars as a fashion item or to full fill their need or for the
work

From the Pie chart give above we can see approximately 70% of the respondent think car as
fashion item where as only 7% of them disagree with this statement. This also strongly proves
the fact that most of the consumers buy cars by looking at their styling and design. Interiors and
exteriors of a car play a vital role in making it better from the competition. Many cars in the
Indian market have been successful because of their design and styling. The perception of
consumers to see a car as a fashion item would play a big role in the process of designing of a car
by an automobile company. Manufacturers should focus on the design along with other factors
such as power, engine, mileage etc.

11. The next and the last question was asked to find out that while making the final decision of
buying a car after collecting all the pre-purchase information, what is the importance of various
decision making sources around a consumer.

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It was found that the most important decision making source are the consumer themselves. They
can be persuaded by their friends or family members but while making the final decision they
give the most importance to their decision only. This shows that there is a huge scope for
marketers to help consumer in finalizing the decision while buying a car. Many options may
make consumers confused, but the marketers can take the benefit of this confusion and help them
in evaluation and selection of alternatives.

Conclusion
It was established through the report that Indian automobile customers are quite rational when
looking to buy a car. While looking for a sedan car customers look for styling and design, safety,
performance, brand value and comfort. Honda City is the most preferred sedan car in the Indian
market. For a sedan car exterior and interior design is very important, and is the one of the most
preferred features. The perception of a brand in the eyes of a consumer also plays an important
role and companies should work upon shaping such perceptions, which would benefit them in
the long run. Luxury cars generally start from a range of Rs. 30 Lakhs and are bought buy upper-
middle class and upper class people and is mostly used as a status symbol. Land Rover Range
Rover Evoque is the most preferred luxury car in India. In luxury cars consumers look for better
style and designing, brand value and better performance. Most of the consumers also agreed to
the fact that a car is used as a fashion item and also it a symbol of status. It shows that the
achievers, who adapt to the latest happening and like to be dominant, are always quick in buying
the heavy priced sedans. For Indian consumers buying a car is the second most important and
expensive decision after their house, so people generally spend a lot of time on research to find
out the best car available in the market which is generally more than a month. In the decision
making process, the advice and influence of family and friends was considered the most
important. But still the importance of the decision of the final consumer is the most while buying
a car. This report would provide various insights into the consumer behavior for sedan and
luxury cars which could help marketers to develop marketing strategies for such cars.

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References
https://www.carwale.com/honda-city

https://a1alimo.com/important-speed-performance-modern-luxury-car/

https://www.ibef.org/industry/india-automobiles.aspx

https://www.ermt.net/docs/papers/Volume_6/5_May2017/V6N5-103.pdf

https://docs.google.com/forms/d/19h4kPcqbMnUPer3FXh7h3-
sQeTf3yEVu5IpLNLo1lmo/edit#responses

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