study of consumer behavior towards honda cars
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study of consumer behavior towards honda cars
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today is the most lucrative industry. Due to the increasein disposable income in both rural and urban sector and easy finance beingprovided by all the financial institutes, the passenger car sales have increased atthe rate of 38% per annum in June 2006-07 over the corresponding period in thepervious year. Further competition is heating up in the sector with a host of newplayers coming in and other like Porsche, Bentley, Audi, and BMW all set toventure in the Indian markets. One factor that could help the companies in themarketing of their product is by knowing and creating a personality for theirbrands. 2
3. Projectsformba.blogspot.comThis report attempts to answer some of the questions regarding brandpersonality of selected cars in India by conducting the market research. Thisreport is categorized into parts, deals with introduction to brand personality,companies selected, product and the industry.This personality sketching will help in knowing what a customer (or a potentialcustomer) thinks about a given brand of car and what are the possible factorsguiding a possible purchase. Similarly, the idea of measuring the customersatisfaction will serve the same purpose of determining the consumer behavior.Thus, by measuring the” willingness of existing users of a car to recommend it toothers” will help the car manufacturers to chalk out the entire Customer Behavior. The reports shall attempt to answer some of the questions regardingconsumer behavior and brand personality of selected cars in India by conductinga market research. The market research will be helpful for the new car entrantcompanies in India to find out the possible gaps between the customerexpectations and the present market offerings. This way these companies will beable to find their share in the ever-expanding Indian market pie.The research will track the customer satisfaction in the following two layers: • Product related Parameters • Dealers related parametersThe customer satisfaction index will be calculated for the car brands taken intoconsideration. 3
4. Projectsformba.blogspot.comIt will be mainly a primary research and the information will be gathered fromboth primary and secondary research. The study will analyze the applicability ofexisting research concepts, theories, and tools for evaluating consumersatisfaction. 4
5. Projectsformba.blogspot.comINTRODUCTIONIt is true fact that if you are satisfied you recommended to others. Word of mouthand customer satisfaction play a very important role in determining marketperception about an automobile. It is the market perception that determines thesuccess of a company and so it is very important for the car manufacturers tomeasure the “willingness of existing users of a product to recommend it toothers”. The same is a lot of interest to customers as well for it helps them makethe purchase decision.A car is one of the most significant purchases that an Indian household makesand this project addresses the most important question that perplexes carmanufacturers:“What makes the perfect car that influence will willfully purchase and satisfactionlevel?”The project highlights the factors that influence the buying decision of aconsumer.The factor under consideration would be:  Price  Income of the consumer  Features in the car  Safety standard  Warranty scheme  Finance facility 5
6. Projectsformba.blogspot.comIs an Indian consumer ready for more? Which is the driving motive behind theeffective demand of the car? How the coming of new models like swift does isgoing to effect the buying decision of consumer and especially the Tata 1 lakhcar.In other words, from the spread of choices offered by various manufacturersunder various segments, of which one the customer will finally turn the ignition onand drive.Customer satisfaction index: some of the most advance thinking in the businessworld recognizes that customer relationships are best treated as assets, and thatmethodical analysis of these relationships can provide a road map for improvingthem“If you cannot measure it, you cannot improve it.” – Lord William Thomson Kelvin(1824-1907)“The fact that word of mouth sales are a big deal in this industry has also helped.Industry players and market surveys reveal that 20-30 percent of sales arethrough word of mouth”.For the purpose of the project has undergone through  Surveying the relevant consumer base through exhaustive questionnaire.  Understand the elements underplaying in each segment  Deducing A analytical overview through different statistical methods 6
7. Projectsformba.blogspot.comRecommendation comes from satisfaction and satisfaction comes from Product Quality Service Quality Relationship QualityOVERVIEW OF THE AUTO SEGMENTIndians have emerged as avid car enthusiasts sporting their prized possessionsas status symbols and speed machines. Foreign car companies have discoveredthe Indian consumer as well as the R & D potential in the Indian technicalfraternity and are setting up manufacturing plants right and left across the countryat lower costs. The Indian automobile industry is currently experiencing anunprecedented boom in demand for all types of vehicles. This boom has beentriggered primarily by two factorsSad1) increase in disposable incomes and standards of living of middle class Indianfamilies estimated to be as many as four million in number; and 7
8. Projectsformba.blogspot.com(2) The Indian governments liberalization measures such as relaxation of theforeign exchange and equity regulations, reduction of tariffs on imports, andbanking liberalization that has fueled financing-driven purchases. Industry observers predict that passenger vehicle sales will triple infive years to about one million, and as the market grows and customerspurchasing abilities rise, there will be greater demand for higher-end modelswhich currently constitute only a tiny fraction of the market. These trends haveencouraged many multinational automakers from Japan, U. S. A., and Europe toenter the Indian market mainly through joint ventures with Indian firms.India is increasingly becoming a global automotive hub both for the vehicles andcomponent industry. India is fast integrating itself into the world economy andopen to international automotive companies, who are increasingly investing inIndia.The Indian automotive and component industry is looking to increase the qualityof production from existing levels, to develop new products and to increaseexports. In the long run India is well set to become a key market for automotiveand component manufacturers in terms of local demand and as a base forexport.Additionally, companies such as GM, Daimler Chrysler, Toyota, Delphi andMICO/Bosch are utilizing India’s well developed IT / software capabilities andhave set up R&D hubs here for their global operations 8
9. Projectsformba.blogspot.comDomestic and Foreign Vehicle ManufacturersTongueassenger VehiclesThe main domestic manufacturers of passenger vehicles are as follows: • Maruti Udyog • Tata / Telco • Mahindra / Mahindra • Hindustan MotorsForeign competitors manufacturing locally including Hyundai, Ford, GeneralMotors, Honda, and Toyota.Car demand has seen a turnaround since mid 2001 thanks to heavydiscounts and cheaper finance. A large number of new models, both locallyassembled and imported, have also revitalized the market.In terms of volumes: • The A/B segments are where India’s strength and future lies. The A/B segment accounts for over 65% of the total passenger vehicles produced. Competition in this segment is stiff with Maruti the market leader with around 55% market share. New models from Telco (Indica), Hyundai (Santro) and Fiat (Palio) however are eroding Maruti’s long standing dominance in this segment. • The mid / luxury range is developing with the introduction of Ford (Ikon), Hyundai (Accent/Sonata) and Skoda (Octavia), although the volumes are not significant. 9
10. Projectsformba.blogspot.com • The UV segment remains sluggish with growth at just over 1%. The clear market leader, Mahindra (44% market share) posted increased sales of 9% in the first 3 quarters of 2002/03. Toyota and Telco domestic UV business remains flat.Commercial VehiclesThe main Indian companies in the Commercial Vehicle segment are: • TATA Engineering and Locomotive Company (TELCO) • Ashok Leyland • Bajaj Tempo Ltd • Eicher Motors Ltd • Swaraj MazdaThere is only one international company currently manufacturing CVs in India,Volvo but again volumes are not large. Other global players are active, althoughin partnership with one of the domestic manufacturers E.g.:- IVECO(manufacturing their range of trucks in association with Ashok Leyland.There has been a significant turn around in this segment over the last 18 monthswith over 30% growth being seen in terms of both production and sales.This sector has received a huge boost with India’s massive demand from theinfrastructure sector (particularly roads), cyclical fleet replacement by fleetowners and an upturn in the cement and steel sectors. 10
11. Projectsformba.blogspot.com Automobile Manufacturers Market Share Passenger Cars LCV 0.604 Mn 0.083 Mn Hyundai Bajaj 18% Tem po Eicher HM Tata Ashok 7% 8% 2% M&M 13% Leyland 30% Fiat 1% 4% Ford 3% HMMaruti 2% 55% Honda Tata Sw araj Toyota GM 2% 44% Mazda 0.3% Daimler 8% Chrysler Mitsubishi Skoda 1% 0.2% 1% 1% • Maruti (JV of Suzuki), leading the market, • Tata and M&M are the key players a) Followed by Hyundai and Tata, together hold close to 75% of market b) Daewoo stopped production, mainly due to financial issues 2 years back 11
12. Projectsformba.blogspot.com • Review of Literature 12
13. Projectsformba.blogspot.comBrand PersonalityA brand is “a set of expectation and association evoked from a company orproduct. A brand is how your key constituents- customers, employees,shareholders etc. experience what you do.” Some brands are of such greatimportance to people, that we speak of them as a part of one’s life and identity,being used to express one. Some would say that these brands have their ownpersonality, the brand personality, which can be defined as “the set of humancharacteristics associated with a given brand”. Thus, it includes suchcharacteristics as gender, age and socioeconomic class, as well as such classichuman personality is both distinctive and enduring.Based on the premise that brand can have the personalities in much the sameway as humans, brand personality describe brands in terms of humancharacteristics. Brand personality is seen as valuable factor in increasing brandengagement and brand attachment, in much the same way as people relate andbid to other people. Much of the work in the area of brand personality is based ontranslated theories of human personality and using similar measures ofpersonality attributes and factors. Brand personality refers to the set of humancharacteristics we associated with the brand. A common way of determining thisis to reply on the metaphor: “If the brand was a person, what would he/she belike?” we then list and group the traits to describe the brand as, for example:caring, approachable and trustworthy. However, there is a lot more we can do.Because many people interact with brands as though they were other people, itis important to understand what a brand personality consists of, and how itscharacteristics can be used to affect the relationship between the brand and itsuser. Knowing and understanding the brand personality gives a good insight intothis relationship, and into peoples’ attitudes towards the brand, and is also asimportant guide to communicating the brand. 13
14. Projectsformba.blogspot.comVALUES AND CHARACTERISTICSS OF BRAND PERSONALITYPeople’s personalities are determined largely through the value and beliefs theyhave, and other personality characteristics they develop. An example of value orbelief is honesty.Many people believe in being honest in everything they do and say. An exampleof characteristic is confidence. This is not a belief, but more of a behavior. Thereare, of course, many value/beliefs and characteristic that a person may have, butthere are some that are particularly likeable. It is these likeable values andcharacteristics that people are inevitably attracted. Examples of these includedependability, trustworthiness, honesty, reliability, friendliness, caring, and fun-loving.There are about two hundred words that describe personality characteristics, andthese can be used for putting personality into brands. To illustrate how peoplethink in personality terms when making judgments about brands, here are theresults of consumer research into how people feel about tow companies. Whenasked question: “if these companies are people, how would you describe them?”their replies were:Company A Company BSophisticated Easy goingArrogant ModestEfficient HelpfulSelf- centered CaringDistant ApproachableDisinterested InterestedThese two companies are actually competitors in a service industry. If you wereasked of these two companies you would like to be your fiends, you would 14
15. Projectsformba.blogspot.comprobably choose company B, as did 95% of other respondents. It is not surprisingthat the service level of company B can be better experience for customers thanthat of company A. it is also easy to conclude that if customers consistentlyexperience these differences between the two companies, then the brand imageof company B will be much better than company A.A further point of interest arising out of this research is that people tend to preferbrands that fit their self-concept. Everyone has views about themselves and howthey would like to be seen by others. And they tend to like personalities that aresimilar to theirs, or to those whom they admire. Thus, creating brands withpersonalities similar to those of a certain group of consumers will be an effectivestrategy. The closer the brand personality is to the consumer personality (or onewhich they admire or aspire to), the greater will be the willingness to buy thebrand and deeper the brand loyalty.The Creation of Brand PersonalityBrand personality traits are formed and influenced by any direct or indirectcontact that the consumer has with a brand. A brand, unlike a person, cannotthink, feel or act. A brand has no objective existence at all; it is simply a collectionof perception on the mind of the consumer. Consumers accept the marketingactions to humanize brands. One explanation fort this can be found in thetheories of animism, which suggest that there exists need by people toanthropomorphize objects in order to facilitate interaction with the nonmaterialworld. Anthropomorphize occurs when human qualities are attributed to nonhuman objects, e.g. brands. Consumers easily assign personality quality toinanimate objects like brands in thinking about the brands as if they are humancharacters. 15
16. Projectsformba.blogspot.comIn a direct way, personality traits are associated with a brand by the peopleassociated to that brand. One direct way to form and influence brand personalityis user imaginary. User imaginary is defined as the set of human characteristicsassociated with the typical or stereotype user of the brand. Associations with thecompany employees or CEO and the brand’s product endorsers are also directways by which brand personality traits are formed and influenced. Thepersonality traits that of the people associated with a brand are transferreddirectly to the brand. The theories of animism describe another processmechanism that directly explains the specific ways in which the vitality of thebrand can be realized (Fournier, 2004). Spokespersons that are used inadvertising can have personalities that fit those of the brand they advertise. Overtime, the personalities of the spokesperson are transmitted to the brand. Thebrand-person associations can also have a more personal nature. Brands can beassociated with person who use or used that particular brand, for example aclose friend or a family member. Also, brands received as gifts can also beassociated with the person from whom the gift was received. These personassociations serve to animate the brand as a vital in the minds of the consumers.Obviously, this aspect is much less under the control of the marketers.Indirectly, the brand personality is created by all the elements of the marketingmix. Betra, Lehman and Singh suggest that the personality of a brand is createdover time, by the entire marketing mix of the brand - “its price (high or low, odd oreven), retail store location (imaginary associations), product formulation(ingredients, benefits), and product form (solid/liquid. Etc.), packaging details(color, size, material, shape), symbol; used an all phases of the brandcommunication, sales promotion, and media advertising”.Another form of animism explains how brand personality is created in a moreindirect way. This form of animism involves complete anthropomorphization ofthe brand object itself. Human qualities of emotionality and thought aretransferred to the brand. This is achieved with the help of the marketing actions, 16
17. Projectsformba.blogspot.comespecially advertising. For example, the brand character of M&M in the M&Mcommercials has the capacity to laugh and joke.One of the advantage of the brand personality is that based on their distinctivepersonalities, consumers are able to differentiate between brands. Anotheradvantage is that the consumer can interpret the brand’s image in such a waythat it is personally more meaningful. Brand personality encourages more activeprocessing on the part of the consumer. Thus, the consumer put more efforts increating and using the brand personality. A further advantage of brandpersonality is that life is given to a brand. By vitalizing a brand, anotherperspective of brand personality can be examined, namely the role of a brand asrelationship partner in a consumer-brand relationship. Next we will concentrateon these consumer-brand relationships.Whether the brand is a product or a company, the company has to decide whatpersonality traits the brand is to have. There are various ways of creating brandpersonality. One way is to match the brand personality as closely as possible tothat of consumers or to the personality that they like. The process will be  Define the target audience  Find out what they need, want and like  Build a consumer personality profile  Create the product personality to match that profileThis type of approach is favored by companies such as Levi Strauss, whoresearch their target audience fastidiously. For Levis the results is a masterbrand personality that is:  Original  Masculine 17
18. Projectsformba.blogspot.com  Sexy  Youthful  Rebellious  Individual  Free  AmericanA related byproduct brand personality (for a specific customer group) such asLevi’s 501 jeans is:  Romantic  Sexually attractive  Rebellious physically prowess  Resourceful  Independent  Likes being admiredBoth profile appeal mostly to the emotional side of the people’s minds- to theirfeelings and sensory function. This profiling approach aims to reinforce the self-concept of the consumers and their aspirations. The approach is ideal for brandsthat adopt a market-niche strategy, and can be extremely successful if a marketsegment has a degree of global homogeneity, as is the case with Levis.Non product related brand personalities drivers  User imaginary – user imaginary can be based on either typical users (people you see using the brand) or idealized users (as portrayed in advertising and else were). User imaginary can be powerful driver of brand personality, in part because the user is already a person and thus 18
19. Projectsformba.blogspot.com the difficulty of conceptualizing the brand personality is reduced. For example Charlie has a feminine, strongly independent brand personality driven by it user imaginary. The upscale personality of Mercedes and the sexy, sophisticated personality of Calvin Klein are similarly influenced by user imaginary.  Sponsorship – activities such as events sponsored by the brand will influence its personality. Swatch, for example, reinforces its offbeat, youthful personality will targeted sponsorships that have included the Freestyle Ski World Cup in Breckenridge, the first International  Age – how long a brand has been on the market can affect its personality. Thus new entrants such as Apple, MCI, and Saturn tend to have younger brand personalities than brand such as IBM, AT&T, and Chevrolets, and it as all too common far a major dominate brand to see as strongly and old fashioned, a brand for older people.  Symbol – a symbol can be powerful influence on brand personality because it can be controlled and can have extremely strong associations. Apples bitten apple, the Marlboro cowboy, the Michelin mans all helps to create and reinforce a personality for their brands. 19
20. Projectsformba.blogspot.comWhy use brand personalityThe brand personality construct can help brand strategies by enhancing theirunderstandings of people’s perceptions of and attitude towards the brand,contributing to a differentiating brand identity guiding the communication effortand creating brand equality.  Enriching understanding The brand personality metaphor can help a manager gain an in-depth understanding of consumer perceptions and attitudes towards the brand. By asking people to describe a brand personality, feelings and relationship can be identified that often provide more insight than is gained by asking about attribute perceptions.  Contributing to a differentiating identity Strategically, a brand personality, as a part of a core or extended identity, can serve as the foundation for meaningful differentiations. Advertising agencies such as Young & Rubicam and Ogilvy & Mather routinely include a brand personality statement as a part of their brand positioning strategy.  Guiding the communication effort Tactically the brand personality concept and vocabulary communication the brand identity which richness and texture to those who must implement the identity building effort. Practical decisions need to be made about not only advertising but packaging, promotions, which events to associate with, and the style of person interactions between the customer and the brand. 20
21. Projectsformba.blogspot.com  Crating brand equity The brand personality creates brand equity. The self-expression model explains this. The model says that for certain groups of customers; some brands become vehicles to express a part of their self-identity. People express their own or idealized identity in a variety of ways, such as a job choices, attitudes, options, activities and lifestyles. Brand that people like, admire, discuss, buy and use also provide a vehicle for self-expression.Brand personality of carsAre you what you drive? That is what are companies seem to be asking and inthe same breath trying to convince you about. In other words, are you theHyundai accent owner who commands immediate respect wherever she goes(including fro the potential father-in-law) or are you the suave executive from theChevrolet ad who is ever ready to share a moment with loved one? With aplethora of new models in the market, and generic benefits (such as space orfuel efficiency) of a particular car segment hardly a distinguishing factor betweencar models, marketer are increasingly differentiating on the emotional pay-off aparticular car model/brand provides to the customer. This, of course, varies fromthe segment to segment and also on how long a particular model has been in themarket.For instance, while advertising for entry level or smaller cars tends to focus moreon the rational or functional benefits of the vehicles, the differentiations isincreasingly on the emotional benefits when it comes to high end cars.“Generally, it has been seen as one move up the value chain, the differentiationis more on the emotional pay-off. People buy car as an extension of theirpersonality rather than just features. A car, in India, helps build up show off, 21
22. Projectsformba.blogspot.comsocial esteem value. The advertising would also vary according to the segmentwhich one is targeting,” he says. For instance, the Chevrolet Optra ad (whichdepicts a young husband driving his wife to see the moon on the occasion ofKarvachauth) shows an Optra consumer as someone who believes in familyvalues and indulging loves ones.“We find that typically profile of an Optra consumer is someone who is in the agegroup of 35-45years and has a chauffer. He buys a car not only for himself butalso for the family and tries to make up, for not being able to spend enough time,by indulging love ones,” points out dutta. The positioning goes well with thecompanies catch lines of “for a special journey called life”.High end car maker Skoda auto too, through its advertising, attempts to connectwith its consumer on emotional level. “Car is the extension of the personality andour advertising shows the consumer to be youthful, image-conscious and evenbit a macho. The campaign jointly made by Skoda’s marketing department andad agency IB&W not only communicates the quality of the brand but anappreciation for the finer things in life. The target Skoda consumer is a SEC A1,primarily male, businessman or someone in the senior management,” saysShashank vaid, manger (marketing), Skoda Auto India. Surely, image buildingdoes come higher in the consumer’s scheme of priorities when buying a new carthan ever before.The importance of brand image has risen sharply in the last few years. At thesegment level, the increase in importance is greater for the mid-size cars,indicating the relevance of brand among the more expensive market segments.The manufacturer need to focus more o how consumers perceive them asoffering exciting cars and being committed towards them. Contemporariness ofmodel has a big impact on purchase decision. The perception of the car in termsof its performance and design, quality, sales, after sales, cost of ownership, apartfrom brand image, all impact upon the purchase decision.” 22
23. Projectsformba.blogspot.comAccording to Bhatia, as long as advertising for cars is strongly differentiated andsharply positions the model and at the same time satisfies a define needsegment, it shall have the capability to break the clutter and creates a unique andcompelling reason for consumers to purchase. “One good example of this is FordIkon- the josh machine made a tremendous impact on consumers in offering tosatisfy a clear need. You can see some more of this with a recently launchedpremium hatch back as well”.Interestingly, the strategy marketer follow changes a bit when it comes toaddressing the smaller car category with the rational benefits of a brand tendingto be the focal point of the campaign. “We have found that typically a buyer for asmaller car (sub Rs 4 lac) looks for aspects such as reliability and fuel efficiency.This changes as we move up since in case the consumer has been with thecategory for a longer time and hence it is important t to talk of an emotional payoff.A case in point is the Maruti 800 campaign in which the kids who is playing with atoy Maruti 800 exclaims to his dad (when asked how long will he keep on runningthe car), “papa ki Kara, petrol khatam hi nahin Honda.” The ad cleverly conveysthat the car just keeps going on and on. It ends with the voiceover telling us thatMaruti Suzuki is most fuel-efficient car.However in the small car segment, the rational benefits magic is not alwaysapplicable. Take the case of Hyundai Santro, the advertising of which hasevolved over the years from initially conveying mainly the functional benefits ofthe model to connecting with the consumer on an emotional level now. “When welaunched the Santro, we started with the positioning if the car being a completefamily car which was completely rational positioning. But then two thingshappened- the product found acceptance in the market and the competitioncame up with similar product in the market.
24. Projectsformba.blogspot.comBrand image is not driven by good advertising alone but is significantly impactedupon by the cars performance and design, quality, and the cost of ownership.Among the three, product quality has the highest correlation with brand image.Small car buyer seeks capability in advertising, and fuel efficiency is relativelymore important to them. Technology, innovation, and good influence premiummid-size buyers. One reality for us in India is that the market is extremelyprice/value conscious. While making purchases based on above, there is rationalside, which does have an impact on the decision on a particular make and modelof car. Be it rational or an emotional decision, consumers would have to think asa bevy of new models flood the Indian market. 24
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