A Dissertation Report on
“FACTORS DRIVING CONSUMER BEHAVIOUR IN AUTOMOTIVE
INDUSTRY FOR THE UPCOMING GENERATION”
Submitted in partial fulfilment of the requirements for the degree of
Master of Business Administration (Marketing)
(Affiliated to Savitribai Phule Pune University)
By
Digvijay Mahalle
Roll No: A 21
Under the guidance of
Dr. Pallavi Sajanapwar
At
Indira Institute of Management,
Tathawade, Pune 411033
(2018-2020)
CERTIFICATE
This is to certify that Mr. Digvijay Pramod Mahalle, student of Indira Institute of
Management-Pune has successfully completed her project titled “Factors Driving Consumer
Behaviour in Automotive Industry for Upcoming Generation” in partial fulfilment of Master’s
in Business Administration (MBA)course.
Dr. Pandit Mali
Dr. Pallavi Sajanapwar
Director, MBA
Internal Project Guide
Indira Institute of Management
Indira Institute of Management,
Pune.
Pune.
Acknowledgement
With a firm belief that a guide in a project is one who holds the candle in the maze of darkness.
I take this opportunity to express my profound gratitude to Dr. Pallavi Sajanapwar who as
guider, have enacted the role of a torch in their endeavour.
A simple word of thanks is just not enough to express our deep gratitude and appreciation for
the valuable guidance and support of my respected guide Dr. Pallavi Sajanapwar. With her
constant source of inspiration and courage during the entire project and co-operation at each
stage of my project I have been able to complete our project successfully.
Having been exposed to fair amount of the theoretical concept I was looking forward to get
first-hand experience for the project and try to correlate what I have learned at college. I am
glad to overcome difficulties, which encountered during the project.
Place: Pune
Digvijay Mahalle
Date: 2020
MBA - (Marketing)
Executive Summary
Title of the Project
Factors Driving Consumer Behaviour in Automotive Industry for the upcoming generation.
Significance of the study
The study will assist companies in having a better understanding of the parameters that
customers give importance to. It will also assist companies in better product development and
a better understanding when it comes to developing better advertising campaigns. Study also
attempts to find out what the future of the industry will be and what companies will have to do
to survive in them.
Objectives
❖ To examine the consumer perception about cars.
❖ To determine the factors affecting consumer buying behaviour of next generation
buyers.
❖ To determine the kind of product the upcoming generation want.
❖ To discuss the future of the industry.
❖ To discuss the acceptance of new technology amongst next generation buyers
INDEX
1.
Introduction
6
2.
Industry Profile
9
3.
Research Methodology
17
4.
Literature Review
19
5.
Data Analysis & Interpretation
25
6.
Suggestions & Recommendations
39
7.
Conclusions
41
8.
References
43
1. INTRODUCTION
1. Introduction
The automobile industry today is the most lucrative industry. Due to the increase in disposable
income in both rural and urban sector and easy finance being provided by all the financial
institutes.
Automobile sector in India has defined itself to be the most lucrative sector. The increase of
spending capacity of the modern India in both urban and rural sectors and finance being
provided by numerous institutes easily.
India became the fourth largest auto market in 2018 with sales increasing 8.3 per cent year-onyear to 3.99 million units. It was the seventh largest manufacturer of commercial vehicles in
2018. The Two Wheelers segment dominates the market in terms of volume owing to a growing
middle class and a young population. Moreover, the growing interest of the companies in
exploring the rural markets further aided the growth of the sector. India is also a prominent
auto exporter and has strong export growth expectations for the near future. Automobile
exports grew 14.50 per cent during FY19. It is expected to grow at a CAGR of 3.05 per cent
during 2016-2026. In addition, several initiatives by the Government of India and the major
automobile players in the Indian market are expected to make India a leader in the two-wheeler
and four-wheeler market in the world by 2020.
The increase in the market size of the automobile sector has been tremendous in the last
financial year domestic automobile sales saw an increase of 6.71% CAGR from FY13-19.
Domestic production of automobiles saw a spike of 6.96% CAGR between FY13-19
BMW registered a growth of 11 per cent year-on-year in its sales in India at 7,915 units.
Mercedes Benz ranked first in sales satisfaction in the luxury vehicles segment according to J
D Power 2018 India sales satisfaction index (luxury).
Further competition is heating up in the sector with a host of new players coming in and other
like MG, KIA, Volvo and Porsche all set to venture in the Indian markets. One factor that could
help the companies in the marketing of their product is by knowing and creating a personality
for their brands.
1.1 Future investments:
❖ Audi India plans to launch nine all-new models including Sedans and SUVs along with
futuristic e-tron electric vehicle (EV) by the end to 2019.
❖ MG Motor India to launch MG ZS EV electric SUV in early 2020 and plans to launch
affordable EV in next 3-4 years.
❖ For self-driving and robotic technology start-ups, Toyota plans to invest US$100
million.
❖ In India, 7 Series face lift launched by BMW and the new X7 SUV has been introduced
at Rs 98.90 lakh (US$ 0.14 million).
❖ Hyundai is planning to invest US$ 1 billion in India by 2020. SAIC Motor has also
announced to invest US$ 310 million in India.
❖ Mercedes Benz has increased the manufacturing capacity of its Chakan Plant to 20,000
units per year, highest for any luxury car manufacturing in India.
❖ As of October 2018, Honda Motors Company is planning to set up its third factory in
India for launching hybrid and electric vehicles with the cost of Rs 9,200 crore (US$
1.31 billion), its largest investment in India so far.
❖ On 29th July 2019, Inter-ministerial has sanctioned 5,645 electric buses for 65 cities.
❖ NATRIP’s proposal for “Grant-In-Aid for test facility infrastructure for Electric
Vehicle (EV) performance Certification from NATRIP Implementation Society” under
FAME Scheme which had been approved by Project Implementation and Sanctioning
Committee (PISC) on 3rd January 2019.
❖ Number of vehicles supported under FAME scheme increased from 5,197 in June 2015
to 192,451 in March 2018. During 2017-18, 47,912 two-wheelers, 2,202 threewheelers, 185 four-wheelers and 10 light commercial vehicles were supported under
FAME scheme.
2. INDUSTRY PROFILE
2. Industry Profile
2.1 Global Automotive Industry
The automotive industry comprises a wide range of companies and organizations involved in
the design, development, manufacturing, marketing, and selling of motor vehicles.[1] It is one
of the world's largest economic sectors by revenue. The automotive industry does not include
industries dedicated to the maintenance of automobiles following delivery to the end-user such
as automobile repair shops and motor fuel filling stations.
Around the world, there were about 806 million cars and light trucks on the road in 2007,
consuming over 980 billion liters (980,000,000 m3) of gasoline and diesel fuel yearly. The
automobile is a primary mode of transportation for many developed economies. The Detroit
branch of Boston Consulting Group predicted that, by 2014, one-third of world demand would
be in the four BRIC markets (Brazil, Russia, India and China). Meanwhile, in the developed
countries, the automotive industry has slowed down. It is also expected that this trend will
continue, especially as the younger generations of people (in highly urbanized countries) no
longer want to own a car anymore, and prefer other modes of transport. Other potentially
powerful automotive markets are Iran and Indonesia. Emerging auto markets already buy more
cars than established markets. According to a J.D. Power study, emerging markets accounted
for 51 percent of the global light-vehicle sales in 2010. The study, performed in 2010 expected
this trend to accelerate. However, more recent reports (2012) confirmed the opposite; namely
that the automotive industry was slowing down even in BRIC countries. In the United States,
vehicle sales peaked in 2000, at 17.8 million units.
2.1.1 Estimated worldwide automobile production from 2000 to 2019
2.1.2 China leads production
China is ranked as the largest passenger car manufacturer in the world, having produced more
than 21.3 million cars in 2019, and accounting for almost one third of the world’s passenger
vehicle production. Over the past decades, China has emerged as one of the main growth
markets for players in the global automobile industry.
2.1.3 American manufacturers in China
One of China’s largest car manufacturing companies is the joint venture between General
Motors and SAIC Motor Corporation Limited, known as Shanghai General Motors Company
Ltd or simply Shanghai GM. GM produces and sells passenger vehicles under the Chevrolet
and Cadillac brands, among others. Aside from manufacturing cars, the company also produces
engines and transmission systems. Shanghai GM’s production amounted to a little over two
million units in 2017.
The automotive industry has evolved significantly over the past decade. Digital technology,
change in customer sentiment and economic health have played a vital role in this evolution.
OEMs and other key industry players are taking note of this evolution and investing heavily in
non-commercial business practices of manufacturing vehicles.
Alternative revenue sources are rapidly taking over the market. Mobility companies such as
Uber have grown exponentially over the last few years and established technology companies
like Amazon and Microsoft are crunching back-end automotive data. Connected technology
has become even more important and fundamental to the advancement of vehicles, bringing in
a host of new features and offerings.
The global automotive industry is expected to begin a challenging phase in 2019, with OEMs
especially facing multiple obstacles all over the world. China faced its first even decline in
vehicles sales in over 20 years, the USA market grew marginally, the shockwaves of Brexit
and USMCA deal are expected create across global markets and the new US-China trade war.
This is expected to play out till 2020 at least with global markets expected to rebound by around
2023.
Similar to previous years, trends such as declining sedan sales, increasing alternative fuel
powertrains especially electric vehicles, and more value-added services in digital retail will
continue to remain dominant in the automotive industry. New and alternative forms of vehicle
ownership are becoming more popular, especially subscription services and e-powered ridehailing services.
2.1.4The World's Biggest Automobile Companies
2.1.5 The Four Biggest Passenger Car Manufacturers in The World
1. Toyota - 10,466,051
Toyota produced over 20 million vehicles in 2017, making it the largest car company in the
world. The Japanese company traces its history to 1933 when it became a branch of Toyoda
Automatic Loom Works. Headed by Kiichiro Toyoda, it became Toyota Motor Company in
1937. Over the years the company has managed to reduce production costs and increase vehicle
quality by adopting principles such as Just In Time (JIT) and Lean production systems. The
company’s annual revenues exceed $200 billion. Toyota's major markets are Asia (Thailand,
India, and Indonesia), Europe (Germany, France, UK, and Italy), and the US.
2. Volkswagen - 10,382,334
This German company produced 10.3 million units in 2017. The company began operations on
May 28, 1937, as a state-controlled company called Gesellschaft Zur Vorbereitung des
Deutschen Volkswagens mbH. The company's plant was destroyed in World War II, and after
reconstruction, it was denationalized in 1960. The modern-day company includes brands such
as Audi, Porsche, Bentley, SEAT, and Lamborghini. The largest markets for the company are
China and Europe. Recently, the company has hit the news in an emission scandal where
software was used in diesel engines to downplay emission levels.
3. Hyundai - 7,218,391
Hyundai is headquartered in South Korea, and it started its operations as the Hyundai Motor
Company in 1967. The company was the brainchild of Chung Ju-Yung. Over the years, the
company has slowly transformed into a conglomerate, with numerous subsidiaries and
affiliates all over the world. The company has three domestic plants and six international plants
in the US, China, Russia, India, the Czech Republic, and Turkey. Hyundai enjoys dominance
in Korea and has been in pursuit of a larger global market through branding and innovative
products.
4. General Motors - 6,856,880
General Motors is headquartered in the state of Michigan in the US, and it was established in
1908 as part of Buick. The company was renamed General Motors Corporation in 1916, and it
became the leading car manufacturer in the US by 1929. The company's global dominance has
increasingly been challenged by companies from Japan and South Korea, but the company
edges out its competitors in the North American market. China and Europe are other key
markets for the company. General Motors' brands include Cadillac, Buick, and Chevrolet.
It's 2019 and the world of cars is as muddled as ever, with manufacturers, subsidiaries,
conglomerates and independent owners creating a web of ties between some of the world’s
best known and most popular car brands. To help us understand more about the car brands we
use within our supercar driving experiences, this infographic, showing you the parent company,
and which brands they own, with the likes of Porsche, Bugatti, Lamborghini and Audi all being
owned by just one company, Volkswagen Group. With the only remaining truly independent
supercar brands being Ferrari, Aston Martin and McLaren.
Volkswagen Group: Audi, Bentley, Bugatti, Lamborghini, Porsche, Seat, Skoda, Volkswagen.
Toyota: Toyota, Daihatsu, Lexus.
Ford Motor Company: Ford, Lincoln, Troller.
General Motors: Cadillac, GMC, Chevrolet, Holden.
Renault-Nissan-Mitsubishi Alliance: Renault, Nissan, Infiniti, Dacia, Datsun, Samsung
Renault, Lada, Mitsubishi.
Hyundai Motor Group: Hyundai, KIA.
Daimler AG: Mercedes-Benz, Smart, AMG.
Fiat Chrysler Automobiles: Alfa Romeo, Dodge, Lancia, Maserati, Chrysler, Fiat, Jeep, Ram.
Honda: Honda, Acura.
BMW: BMW, Mini, Rolls Royce.
Suzuki: Suzuki, Maruti Suzuki.
Groupe PSA: Peugeot, DS Automobiles, Opel, Citroen, Vauxhall.
Tata Motors: Tata, Jaguar, Land Rover.
Geely: Lotus, Proton, Volvo.
2.2 Who owns whom in Automotive Industry?
2.3 Indian Automobile Industry
In 1897, the first car ran on an Indian road. Through the 1930s, cars were imports only, and in
small numbers.
An embryonic automotive industry emerged in India in the 1940s. Hindustan Motors was
launched in 1942, long-time competitor Premier in 1944, building Chrysler, Dodge, and Fiat
products respectively. Mahindra & Mahindra was established by two brothers in 1945, and
began assembly of Jeep CJ-3A utility vehicles. Following independence in 1947, the
Government of India and the private sector launched efforts to create an automotive-component
manufacturing industry to supply to the automobile industry. In 1953, an import substitution
programme was launched, and the import of fully built-up cars began to be restricted.
However, in this era the picture is quite different India's automobile exports have grown
consistently and reached $4.5 billion in 2009, with the United Kingdom being India's largest
export market, followed by Italy, Germany, the Netherlands, and South Africa.
According to The New York Times, India's strong engineering base and expertise in the
manufacturing of low-cost, fuel-efficient cars has resulted in the expansion of manufacturing
facilities of several automobile companies like Hyundai, Nissan, Toyota, Volkswagen, and
Maruti Suzuki.
In 2008, South Korean multinational Hyundai Motors alone exported 240,000 cars made in
India. Nissan Motors planned to export 250,000 vehicles manufactured in its India plant by
2011. Similarly, US automobile company, General Motors had announced its plans to export
about 50,000 cars manufactured in India by 2011.
In September 2009, Ford Motors announced its plans to set up a plant in India with an annual
capacity of 250,000 cars, for US$500 million. The cars were manufactured both for the Indian
market and for export. The company said that the plant was a part of its plan to make India the
hub for its global production business. Fiat Motors had announced that it would source more
than US$1 billion worth auto components from India.
n 2009, India (0.23m) surpassed China (0.16m) as Asia's fourth largest exporter of cars after
Japan (1.77m), Korea (1.12m) and Thailand (0.26m).
In July 2010, The Economic Times reported that PSA Peugeot Citroën was planning to re-enter
the Indian market and open a production plant in Andhra Pradesh that would have an annual
capacity of 100,000 vehicles, investing € 700M in the operation. PSA's intention to utilise this
production facility for export purposes however remains unclear as of December 2010.
The Maruti Ertiga, a model exported by Maruti Suzuki, India.
In recent years, India has emerged as a leading centre for the manufacture of small cars.
Hyundai, the biggest exporter from the country, now ships more than 250,000 cars annually
from India. Apart from Maruti Exports' shipments to Suzuki's other markets, Maruti Suzuki
also manufactures small cars for Nissan, which sells them in Europe. Nissan will also export
small cars from its new Indian assembly line. Tata Motors exports its passenger vehicles to
Asian and African markets, and is preparing to sell electric cars in Europe in 2010. The firm is
planning to sell an electric version of its affordable car the Tata Nano in Europe and in the U.S.
In the 2000s, Mahindra & Mahindra prepared to introduce its pickup trucks and small SUV
models in the U.S. market, but cancelled its plans. As of 2019, it is assembling and selling an
off-road vehicle (Mahindra Roxor; not certified for road use) in limited numbers in the U.S. It
is also sold in Canada. Bajaj Auto is designing a low-cost car for Renault Nissan Automotive
India, which will market the product worldwide. Renault Nissan may also join domestic
commercial vehicle manufacturer Ashok Leyland in another small car project. While the
possibilities for the Indian automobile industry are impressive, there are challenges that could
thwart future growth. Since the demand for automobiles in recent years is directly linked to
overall economic expansion and rising personal incomes, industry growth will slow if the
economy weakens.
2.3.1 Automobile Clusters in India
The leading automakers include Maruti Suzuki, Hyundai Motor and Mahindra & Mahindra. In
2019, Hyundai, Kia, and Renault were among the non-domestic car manufacturers to see the
highest growth rates. However, the entire passenger car market in India contracted by over 12
percent between 2018 and 2019. Maruti Suzuki’s Alto was India’s best-selling automobile in
the 2018-19 season. Passenger vehicles are ranked as the second most important motor vehicle
segment in terms of sales, while two-wheelers continue to be India’s bestselling motor vehicle
category.
3. RESEARCH METHODOLOGY
3. Research Methodology
3.1 Problem statement:
What are the factors that will drive the consumer buying behavior for the upcoming generation
of buyers in automotive industry?
3.2 Research objectives:
❖ To study consumer buying behavior in automotive industry
❖ Identify a certain number of factors that drive consumer buying behavior in automotive
industry
3.3 Type of research:
Research is descriptive in nature.
3.4 Research design:
Population: Subjects that are <30 years of age and >15 years of age
Sampling technique: Non-Probability sampling, Convenience sampling
Sample size: Figuring out the buying behavior in a country which 65% of the population is
below the of 35 years is a tough task however we can get a glimpse of how the psychology of
the buying behavior if we study a small sample from it. We are choosing a sample size of 100.
3.5 The numbers of samples you need are affected by the following factors:
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Project goals
How you plan to analyze your data
How variable your data are or are likely to be?
How precisely you want to measure change or trend
The number of years over which you want to detect a trend
How many times a year you will sample each point
How much money and manpower you have?
3.6 Data Collection:
Simple random sampling technique has been used to select the sample
A simple random sample is a group of subjects (a sample) chosen from a larger group (a
population) Each subject from the population is chosen randomly and entirely by chance, such
that each subject has the same probability of being chosen at any stage during the sampling
process. This process and technique known as Simple Random Sampling and should not be
confused with Random Sampling.
4. LITERATURE REVIEW
4. Literature review
Marketing is so much more than creating a catchy phrase or a jingle people will sing for days.
Understanding consumer behavior is a vital aspect of marketing. Consumer behavior is the
study of how people make decisions about what they buy, want, need, or act in regards to a
product, service, or company. It is critical to understand consumer behavior to know how
potential customers will respond to a new product or service. It also helps companies identify
opportunities that are not currently met.
A recent example of a change in consumer behavior is the eating habits of consumers that
dramatically increased the demand for gluten-free (GF) products. The companies that
monitored the change in eating patterns of consumers created GF products to fill a void in the
marketplace. However, many companies did not monitor consumer behavior and were left
behind in releasing GF products. Understanding consumer behavior allowed the pro-active
companies to increase their market share by anticipating the shift in consumer wants.
4.1 The Three Factors
4.1.1 Psychological Factors
In daily life, consumers are being affected by many issues that are unique to their thought
process. Psychological factors can include perception of a need or situation, the person's ability
to learn or understand information, and an individual's attitude. Each person will respond to a
marketing message based on their perceptions and attitudes. Therefore, marketers must take
these psychological factors into account when creating campaigns, ensuring that their
campaign will appeal to their target audience.
4.1.2 Personal Factors
Personal factors are characteristics that are specific to a person and may not relate to other
people within the same group. These characteristics may include how a person makes
decisions, their unique habits and interests, and opinions. When considering personal factors,
decisions are also influenced by age, gender, background, culture, and other personal issues.
For example, an older person will likely exhibit different consumer behaviors than a younger
person, meaning they will choose products differently and spend their money on items that may
not interest a younger generation.
4.1.3 Social Factors
The third factor that has a significant impact on consumer behavior is social characteristics.
Social influencers are quite diverse and can include a person's family, social interaction, work
or school communities, or any group of people a person affiliate with. It can also include a
person's social class, which involves income, living conditions, and education level. The social
factors are very diverse and can be difficult to analyze when developing marketing plans.
However, it is critical to consider the social factors in consumer behavior, as they greatly
influence how people respond to marketing messages and make purchasing decisions. For
example, how using a famous spokesperson can influence buyers.
4.2 Consumer Buying Behavior
Consumer buying behaviour is the sum total of a consumer's attitudes, preferences, intentions,
and decisions regarding the consumer's behaviour in the market place when purchasing a
product or service. The study of consumer behaviour draws upon social science disciplines of
anthropology, psychology, sociology, and economics. Consumer behaviour is broadly studied
field. It lets the companies understand how consumer decides about buying their product or
acquiring services. Marketing managers are always interested to know more about consumers’
behaviour so they can prepare better communication and advertising campaigns and messages
about their products and services. Consumer makes buying decision every day and many
people don’t even know the factors which derive them to this decision. Usually the factors
affecting consumer buying behaviour include psychological, social, cultural and Buying the
new home cleaning service involves consumers’ research for the best option available and it
might take various factors in account in its decision-making process. This thesis is about
studying which factors of social, cultural, personal or psychological characteristics has the most
effect on consumer decision making process when selecting home cleaning service company.
4.3 Consumer Buying Process
Far too often, retailers think that consumer buying is randomized. That certain products appeal
to certain customers and that a purchase either happens or it doesn’t. They approach product
and service marketing in the same way, based on trial and error. What if there were a distinctive
set of steps that most consumers went through before deciding whether to make a purchase or
not? What if there was a scientific method for determining what goes into the buying process
that could make marketing to a target audience more than a shot in the dark?
The good news? It does exist. The actual purchase is just one step. In fact, there are six stages
to the consumer buying process, and as a marketer, you can market to them effectively.
1.Problem Recognition
Put simply, before a purchase can ever take place, the customer must have a reason to believe
that what they want, where they want to be or how they perceive themselves or a situation is
different from where they actually are. The desire is different from the reality – this presents a
problem for the customer.
However, for the marketer, this creates an opportunity. By taking the time to “create a problem”
for the customer, whether they recognize that it exists already or not, you’re starting the buying
process. To do this, start with content marketing. Share facts and testimonials of what your
product or service can provide. Ask questions to pull the potential customer into the buying
process. Doing this helps a potential customer realize that they have a need that should be
solved.
2. Information Search
Once a problem is recognized, the customer search process begins. They know there is an issue
and they’re looking for a solution. If it’s a new makeup foundation, they look for foundation;
if it’s a new refrigerator with all the newest technology thrown in, they start looking at
refrigerators – it’s fairly straight forward.
As a marketer, the best way to market to this need is to establish your brand or the brand of
your clients as an industry leader or expert in a specific field. Methods to consider include
becoming a Google Trusted Store or by advertising partnerships and sponsors prominently on
all web materials and collaterals.
Becoming a Google Trusted Store, like CJ Pony Parts – a leading dealer of Ford Mustang parts
– allows you to increase search rankings and to provide a sense of customer security by
displaying your status on your website.
Increasing your credibility markets to the information search process by keeps you in front of
the customer and ahead of the competition.
3. Evaluation of Alternatives
Just because you stand out among the competition doesn’t mean a customer will absolutely
purchase your product or service. In fact, now more than ever, customers want to be sure
they’ve done thorough research prior to making a purchase. Because of this, even though they
may be sure of what they want, they’ll still want to compare other options to ensure their
decision is the right one.
Marketing to this couldn’t be easier. Keep them on your site for the evaluation of alternatives
stage. Leading insurance provider Geico allows customers to compare rates with other
insurance providers all under their own website – even if the competition can offer a cheaper
price. This not only simplifies the process, it establishes a trusting customer relationship,
especially during the evaluation of alternatives stage.
4. Purchase Decision
Somewhat surprisingly, the purchase decision falls near the middle of the six stages of the
consumer buying process. At this point, the customer has explored multiple options, they
understand pricing and payment options and they are deciding whether to move forward with
the purchase or not. That’s right, at this point they could still decide to walk away.
This means it’s time to step up the game in the marketing process by providing a sense of
security while reminding customers of why they wanted to make the purchase in the first time.
At this stage, giving as much information relating to the need that was created in step one along
with why your brand, is the best provider to fulfill this need is essential.
If a customer walks away from the purchase, this is the time to bring them back. Retargeting
or simple email reminders that speak to the need for the product in question can enforce the
purchase decision, even if the opportunity seems lost. Step four is by far the most important
one in the consumer buying process. This is where profits are either made or lost.
5. Purchase
A need has been created, research has been completed and the customer has decided to make a
purchase. All the stages that lead to a conversion have been finished. However, this doesn’t
mean it’s a sure thing. A consumer could still be lost. Marketing is just as important during this
stage as during the previous.
Marketing to this stage is straightforward: keep it simple. Test your brand’s purchase process
online. Is it complicated? Are there too many steps? Is the load time too slow? Can a purchase
be completed just as simply on a mobile device as on a desktop computer? Ask these critical
questions and make adjustments. If the purchase process is too difficult, customers, and
therefore revenue, can be easily lost.
6. Post-Purchase Evaluation
Just because a purchase has been made, the process has not ended. In fact, revenues and
customer loyalty can be easily lost. After a purchase is made, it’s inevitable that the customer
must decide whether they are satisfied with the decision that was made or not. They evaluate.
If a customer feels as though an incorrect decision was made, a return could take place. This
can be mitigated by identifying the source of dissonance, and offering an exchange that is
simple and straightforward. However, even if the customer is satisfied with his or her decision
to make the purchase, whether a future purchase is made from your brand is still in question.
Because of this, sending follow-up surveys and emails that thank the customer for making a
purchase are critical.
Take the time to understand the six stages of the consumer buying process. Doing this ensures
that your marketing strategy addresses each stage and leads to higher conversions and longterm customer loyalty.
4.4 Review from existing literature.
On the supply side the market is an oligopoly with few firms operating the whole market place
adopting the profit maximizing business model (Goldberg, Pinelopi Koujianou. “Product
Differentiation and Oligopoly in International Markets: The Case of the Automobile
Industry”). Customer these days are more aware about the environmental impact of cars more
than ever in today’s world, Fluctuating gasoline prices and the new laws regarding the fuel
emissions are making people to lean more towards sustainable alternatives the so-called green
vehicles (Recap Myrecap. “Factors affecting car buying behaviour of customers”).
Each customer responds differently we cannot forge a set book for stimulus that will help us
determine exact reaction of each customers, however we can use the experiences and data to
form certain parameters that will help characterize behavior of the customer into category. The
future scope of the study can be deeply studying these parameters to the full extent of its
psychological effects so as to get as to what new products the customers want. (Recap Myrecap.
“Factors affecting car buying behaviour of customers”).
Companies are paying attention to the relationship aspect extensively. Total relationship
management (TRM) is a fairly new concept and is taken seriously by the industry. While car
is a onetime purchase for most people but the post purchase is huge, probably biggest in any
industry so it becomes important for companies to improve on the relationship aspect. Brand
loyalty is a big focus in the industry, Hence it becomes important to study the dealer part of
customer satisfaction journey, the proximity that the customers share with the dealers and not
letting it being over bearing so as to overwhelm the customer and yet not seem so distant for
customers to think that the company doesn’t care.
The Literature review suggests that this poses as a caution for the car companies, There is no
doubt that the car market in India is growing with a double digit figure, But car companies have
long way to travel to convince their customers about the brand personality of their cars and
how it suits the prospective buyers. Simply because it simply is not a guarantee that how so
ever good the customer might be holding the brand perception and how so ever good the brand
image maybe it is not a guarantee that it will convert into sale. Cars just like clothes and
accessories suit the style and persona of a person and since all cars will become commodity
someday the key to sell and excel in the market will lie with a person who knows how to use
the perceptions of the customers to its use and sell the cars ‘coz ultimately only that car survives
which sells. (Harsh singh. “Consumer Buying Behavior in Automobile Industry”)
The global market in automotive industry is very volatile. The demands from the U.S. market
will be completely different from the ones in India. Demands in U.S. might include more Horse
power and performance where as in India the demands will be more space and fuel economy.
Moreover, the different laws and regulations imposed by various countries vary from each
other in many ways. The categories in which the laws vary maybe the car size, emissions,
ground clearance etc. Companies have to comply with these regulations in order to pass the bar
legally. A good example of this is Toyota Hilux, a pickup truck model which was very popular
in Middle east and in Australia but wasn’t allowed to be sold in USA due to the reason that it
violated the emission regulations in America. (Gerhard, Daniel & Brem, Alexander & Voigt,
Kai-Ingo. (2008). Product Development in the Automotive Industry: Crucial Success Drivers
for Technological Innovations. International Journal of Technology Marketing. 3.
10.1504/IJTMKT.2008.019922.)
When it comes to product development specifically Hauschildt (2004) further distinguishes the
content, subjective and normative perspectives, which are not considered here. As Hauschildt
argues, the innovation process consists of all steps from idea to realisation, which also include
production scale-up and market launch. According to this, the first two stages of idea
generation and idea evaluation can be called idea management (Voigt and Brem, 2005).
5. Data analysis & Interpretation
5. Data analysis & Interpretation
Q1) How old are you?
No. of People
30-35
4.3
25-30
20.3
20-25
66.17
15-20
4.3
0
10
20
30
40
50
60
70
No. of People
(Values in Percentages)
Analysis: Objective of the study is to determine the factors driving consumer behavior for the
upcoming generation. We want to focus on people who are going to buy cars in the coming 5
years hence we are focusing on people who are 15-35 years of age. Research focuses on the
stimulus that drives the behavioral changes in this quadrant of population. 81% of the
population is of the age group 20-30. People who most likely have the financial capability to
buy a car.
Q2) Do you own a car?
Do you own a car?
38.9
68.1
Yes
No
(Values in Percentages)
Analysis: The majority of the population does not own a car and as the age group the research
focuses on are between 20-35 the demographic that will buy a car in the 0-10 years. Hence it
is important to study the factors that drive consumer behavior for this demographic.
Q3) Would you like to own a car at some point in your life?
Would you like to own a car at some point in your life?
4.3
13
82
Yes
No
Maybe
(Values in Percentages)
Analysis: Cars in our society are often considered a status symbol and most of the population
plan to own an automotive once they enter adulthood. As this is evident from the survey that
82% of the people plan to own an automotive at some point in their life. This shows how
profitable the market is and how important it is to study this sector.
Q4) At first glance what do you look for in a car?
At first glance what do you look for in a car?
2
13
26.1
18.8
24.6
Price
Technology
Performance
Design (Aesthetics, Looks)
Size (Hatchback, Sedan, Coupé)
Comfort
(Values in Percentages)
Analysis: Impulsive response to a product is important to study at it gives us insight into where
the consumer buying process starts. From research we conclude that there are multiple factors
that works specifically for a customer. Although the customer focuses mainly on Technology,
Performance, Design but it a considerable number of people also focus on the remaining
aspects. Therefore, it becomes imperative that companies focus of each of the aspects
mentioned above as any of them can be important for the customer.
Q5) Do you think the future of cars is electric?
Do you think the future of cars is electric?
5.8
94.2
Yes
No
(Values in Percentages)
Analysis: A Mckinsey report suggests that the future of electricity is as near as 2025. As
companies are rushing to gain the first mover advantage in the new emerging markets. Indian
government has decided to make India a hub for electric cars by investing a sum of 1500cr in
developing the charging infrastructure hence it is important to learn the stance of the upcoming
on electric cars. Form research we can conclude almost all the people think that the future of
the industry is going to be electric.
Q6) Will you prefer an electric car over a combustion engine car?
Will you prefer an electric car over a combustion engine
car?
7.9
92.1
Yes
No
(Values in Percentages)
Analysis: Acceptance of a new technology can go either way from past experiences it is evident
that people often reject new technologies if they are introduced without proper research which
leads to poor product development and rejection of technology overall. A good example of this
can be Google glasses. From survey it is clear the upcoming generation of buyers are ready for
accepting the electric technology over the traditional combustion engine. As 92% of people
will prefer the modern electric cars.
Q7) What is the reason for low penetration of electric cars in India?
What is the reason for low penetration of electric cars in
India?
10.3
27.9
61.8
Lack of Infrastructure
Price
Lack of options
(Values in Percentages)
Analysis: Electric cars are very popular in Europe and USA, they are not as popular as
combustion engine yet but they have a major presence in the industry and some serious
financial support. However, in India the penetration of electric cars is nowhere near the same
as other markets. From research we can conclude that main reason for this lack of penetration
can be attributed to Lack of infrastructure. This makes people reluctant to buy the electric cars
that are available in the markets.
Q8) What type of car would you buy as your first?
What type of car would you buy as your first?
Hybrid car
7%
Hatchback
9%
Sedan
15%
Coupé
1%
Electric car
14%
SUV
33%
Compact car
4%
Sports car
17%
Sedan
Coupé
SUV
Sports car
Compact car
Electric car
Hybrid car
Hatchback
(Values in Percentages)
Analysis: Preferences in car gives an insight into what aspects of the product they prefer. For
example, a person who likes SUV will prefer space over speed, similarly a person who prefers
sports car will give up space for speed performance. Someone who prefers compact car is
looking for mobility in the city. From the survey its not one factor that the upcoming generation
is demanding its an array of different features. Biases of the population is evenly distributed
amongst the various types of cars.
Q9) What is the major appeal of electric vehicle?
What is the major appeal of electric vehicle?
5.7
17.6
75.7
Fuel Economy
Environmental benifits
Easy Maintenance
(Values in Percentages)
Analysis: From the survey we found out that the people are very accepting of the electric cars.
As it is going to be the market of tomorrow it is important to study what is that makes the
electric cars so attractive to the customers. Mahindra alternavitsm report 2019 suggests that
82% of the population are aware of climate change and want to adopt an environmentally
friendly alternative. This is also evident from the research as 75.7% if the people believe that
Environmental Benefits is the main appeal of Electric Cars.
Q10) Suppose you are going to buy a car for your private use. Among the following
factors, which one matches you most?
(Values in Percentages)
Analysis: Relatively Important- Safety, Price, Performance, Exterior Design, Technology
Relatively less important- Brand Color, Speed, Interior Design, Size, Resale Value
Of all the survey questions this is the most important. As this directly asks the question what
the customers want when they are looking to buy a car. Peculiar thing about the data analysis
of this question is that all the mentioned factors were rated in the category of Important and
very important. As mentioned above people who took survey rated safety, price, Performance,
Exterior design and Technology relatively more important than other listed factors. What this
represent that people may not have one or two particular factor that they consider most
important but there does exist a hierarchy in their preferences. Companies can focus their
efforts on exploring this hierarchy in order to pick the areas they want to improve primarily.
Q11) What is/will be the major usage of your car?
(Values in Percentages)
Analysis: The purpose for which an automotive is used for most will also determine what are
the challenges that come with it. For example, a person who rates travelling as the most usage
of his car will look for durability, Mileage, Emergency services etc. From research it is evident
that people consider that work is what they will use their automotive most for, the challenges
that come with work will be city maneuverability, compact size, more headspace, automatic
gear changes etc. This information will give us what the customer’s need that he is unaware of.
Q12) Who will influence you when you buy or want to buy a car?
Sales
Specifications
Advertisement
Seller
1%
4%
4%
Friends/Family
36%
Brand representative
(celebrity)
1%
Make my own choice
54%
Friends/Family
Brand representative (celebrity)
Make my own choice
Seller
Advertisement
Specifications
(Values in Percentages)
Analysis: As we are studying consumer buying behavior, it is important to study what are the
agents that influence the choices of our customers the most. Cars being a big and a one-time
purchase is not that susceptible to being an impulse buy. Consumer buying behavior in
automotive industry will be subject to a lot of scrutiny and discussion. The same is evident
from research as 54% majority of the people say that they make their own choice after doing
prior research themselves and 36% of the population say that they are heavily influenced by
the opinions of their family members. For better understanding of the catalyst in consumer
buying process.
Q13) To what extent, do you think purchasing a car can raise your social status?
To what extent, do you think purchasing a car can raise your
social status?
14.3
8.6
8.6
32.9
35.7
Strongly Disagree
Disagree
Neutral
Agree
Strongly agree
(Values in Percentages)
Analysis: As mentioned in the beginning of the study cars in Indian society are considered a
social status. And mostly everyone deserves to invest in a car at some point in their life. From
research it is evident that 47% of the people are consider that an automotive in some ways
elevate their social status, 17% of the people oppose the idea whereas 35.7 are indifferent about
it.
6. Suggestions and Recommendations
6. Suggestions and Recommendations
❖ Companies are dealing with a highly aware audience who is active with their research
and frequently ask discuss with friends and families about their buying decisions.
❖ Customers are aware of the future of the industry being electric and are highly accepting
pf the technology. It is recommended that companies should focus more of its resources
towards finding what is it they want in an electric vehicle for better product
development.
❖ Infrastructure will be imperative for the success of electric vehicle and the customers
are also aware of it. It is advised that for companies to focus their resources on building
a robust infrastructure setting before launching the product.
❖ Research finds that the main usage of an automotive for the customer is their daily
commute to work. It is suggested to explore the challenges that come with driving the
car in city traffic.
7. Conclusion
7. Conclusion
To conclude, the research show that the customer does not have one or two special preferences
when it comes to their automotive choices. The research has provided an insight on how
aggressive and competitive the Indian market space is. This highly competitive market space
requires the companies to focus on qualities in all aspects. Research also explores the value of
the car in the context of social currency and the role it plays in elevation the social stature.
Research shed the light on what are the impulses of the customers when the look for an
automotive. Findings will make it easier for companies to strike an impression on the customers
through advertisements by focusing on these aspects. Research also explored the idea of the
future of the industry being electric and found out that the population is ready and highly
accepting of the technology. Although the population is anticipating the rise of electric vehicle
it is aware that without proper infrastructure electric vehicles won’t be as useful. This goes to
show that the modern customer is highly aware of the requirements for the technology to
sustain. Research also tried to determine what is the appeal of electric vehicles for the customer.
The study mainly tried to determine what will be the factors that will drive the consumer
behaviour when it comes to the upcoming generation and concluded that there exists a slight
hierarchy when it comes to these factors. It is worth mentioning that differentiation between
these factors is very slight and it is advised that companies should focus on all of the factors
mentioned below with the same amount of importance.
❖ Relatively Important- Safety, Price, Performance, Exterior Design, Technology.
❖ Relatively less important- Brand Color, Speed, Interior Design.
❖ Not Important- Size, Resale Value.
8. References
8. References
❖ (https://www.ibef.org/industry/india-automobiles.aspx
❖ https://www.ibef.org/industry/india-automobiles.aspx
❖ https://www.academia.edu/7318995/Consumer_Buying_Behavior_in_Automobile_In
dustry
❖ https://www.statista.com/topics/1487/automotive-industry/
❖ https://www.prnewswire.com/news-releases/global-automotive-industry-outlookreport-2019-the-top-trends-to-watch-out-for-300915420.html
❖ www.businessinsider.com
❖ https://en.wikipedia.org/wiki/Automotive_industry_in_India
❖ https://www.investindia.gov.in/sector/automobile
❖ https://study.com/academy/lesson/what-is-consumer-behavior-in-marketing-factorsmodel-definition.html
8.1 Literature
❖ Goldberg, Pinelopi Koujianou. “Product Differentiation and Oligopoly in International
Markets: The Case of the Automobile Industry”
❖ Recap Myrecap. “Factors affecting car buying behaviour of customers”
❖ Harsh singh. “Consumer Buying Behavior in Automobile Industry”
❖ Product Development in the Automotive Industry: Crucial Success Drivers for
Technological Innovations. International Journal of Technology Marketing. 3.
10.1504/IJTMKT.2008.019922.
❖ Voigt and Brem, 2005