1 CHAPTER I INTRODUCTION Bajaj is an automobile company with global presence and take pride in our Indian roots and values. KVR motors (marketing branch) at Calicut deals with the sale and service of bikes. They always intends to leverage through its strong marketing initiative like brand building, creating strong franchisees, restructuring dealerships, effective after sale service and sale of new brands. This project deals with the study of customer experience after getting the product with regard to service and also examines the service quality gap by comparing customer‟s expectations and their actual perceptions by using the SERVQUAL model. Service quality is a concept that has aroused considerable interest and debate in the research literature because of the difficulties in both defining and measuring it with no overall consensus emerging on either. Customer satisfaction and service quality are often treated together as functions of customer‟s perceptions and expectations and research has shown that high service quality contribute significantly to profitability. Service quality is required to be first measured in order to improve the quality in a service organization. The measurements used were based on the widely accepted SERVQUAL model which is the most common method for measuring service quality. Customer participation in service production process greatly influences service quality. It is related to cost, profitability, customer satisfaction, customer relation, behavioral intention and positive word of mouth. Through this project those factors can be identified that determines the relation between customer satisfaction and service quality.
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CHAPTER I
INTRODUCTION
Bajaj is an automobile company with global presence and take pride in our Indian roots
and values. KVR motors (marketing branch) at Calicut deals with the sale and
service of bikes. They always intends to leverage through its strong marketing
initiative like brand building, creating strong franchisees, restructuring dealerships,
effective after sale service and sale of new brands. This project deals with the study
of customer experience after getting the product with regard to service and also
examines the service quality gap by comparing customer‟s expectations and their
actual perceptions by using the SERVQUAL model.
Service quality is a concept that has aroused considerable interest and debate in the
research literature because of the difficulties in both defining and measuring it with
no overall consensus emerging on either. Customer satisfaction and service quality
are often treated together as functions of customer‟s perceptions and expectations
and research has shown that high service quality contribute significantly to
profitability. Service quality is required to be first measured in order to improve
the quality in a service organization. The measurements used were based on the
widely accepted SERVQUAL model which is the most common method for
measuring service quality.
Customer participation in service production process greatly influences service
quality. It is related to cost, profitability, customer satisfaction, customer relation,
behavioral intention and positive word of mouth. Through this project those factors
can be identified that determines the relation between customer satisfaction and
service quality.
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STATEMENT OF PROBLEM
The main focus of KVR Bajaj is on providing high quality service to its customers
and the firm usually uses modern technology to provide excellent service. But it‟s
the customer who only judges the service quality after using the product.
Therefore, it is essential to evaluate the service rendered by KVR, Bajaj. The
management wants to know whether the customers are satisfied with the present
service which they are rendering. So the research problem is to conduct “a study on
service quality and customer satisfaction with reference to the SERVQUAL model”
OBJECTIVES OF THE STUDY
1. To determine the different factors influencing the service quality.
2. To ascertain whether there is any actual or perceived gaps between customer
expectations and perceptions of the service offered.
3. To ascertain whether there is any gaps between Service quality
specifications and actual service delivery.
4. To know the areas where gap exists so that the company can allocate more
resources to better service and,
5. To suggest measures to improve the service quality, if found needed.
SCOPE & SIGNIFICANCE OF THE STUDY
The study is intended to conduct the existing customers of Bajaj, who owns bikes
in the small segment. The project covers the customers of KVR Bajaj in Calicut
district. As the competition is increasing day by day in automobile industry, a
company like Bajaj should understand whether the customers are valued or not.
Since the major players are intended to enter the small segment, to keep its position
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as now, they have to rethink that their customers are getting much benefits from
their product. Apart from these threats, the major fear of the firm is in increasing
the demand of the customers and retaining the customers in the market
SETTING OF HYPOTHESIS
Based on the objectives explained above, the following hypothesis has been set for
the study.
H0: There is no significance difference between customer expectations and actual
perceptions of service
H1: there is significance difference between customer expectations and actual
perceptions of service
H0: There is no significance difference between Service quality specifications and
actual service delivery
H1: there is significance difference between Service quality specifications and
actual service delivery.
RESEARCH DESIGN
The type of research design adopted is descriptive research design, since it
involves detailed numerical descriptions such as distribution of population of a
community by age, sex, geographical locality, cost and education.
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DATA SOURCES
The study is based on both secondary and primary data.
Secondary sources: Secondary data were obtained from the articles, journals,
official website of Bajaj.
Primary source: The primary data were collected from customers of Bajaj with
the help of a structured questionnaire and also, individual interview with
employees of KVR motors.
SAMPLING DESIGN
A sample design is a definite plan for obtaining a sample from a given population.
Population: All customers of KVR motor at Calicut region.
Sample size: For the convenience of study the sample size was fixed at 75
respondents. Effort was taken to include different segments of customers in the
sample.
SAMPLING TECHNIQUE
Simple random sampling is used; the structured questionnaires are given to 75
respondents who visited KVR Bajaj within the time frame of the data collection
period. The simple random method is used because each and every population has
an equal chance of being selected and also it helps to reduce bias.
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RESEARCH INSTRUMENT
In this study structured questionnaire is used as the research instrument which
contains closed ended questions.
VARIABLES OF THE STUDY
The variable list drawn up for the study included.
1. Reliability
2. Tangibility
3. Responsiveness
4. Assurance
5. Empathy
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Fig no: 1 conceptual model of service quality
Model of Service Quality Gaps
There are five major gaps in the service quality concept, are
Gap 1: The difference between management perceptions of what customers
expect and what customers really do expect
The reasons for GAP 1 - not knowing what customers expect
– lack of a marketing orientation
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– inadequate upward communication (from contact staff to
management)
– too many levels of management
Gap 2: The difference between management perceptions and service quality
specifications - the standards gap
The reasons for GAP 2 -the wrong service quality standards
-inadequate commitment to service quality
-lack of perception of feasibility - „it cannot be done‟
-inadequate task standardisation the absence of goal setting
Gap 3: The difference between service quality specifications and actual service
delivery - are standards consistently met?
The reasons for GAP 3 - the service performance gap
– role ambiguity and role conflict - unsure of what your remit is and
how it fits with others
– poor employee or technology fit - the wrong person or system for the
job
– inappropriate supervisory control or lack of perceived control - too
much or too little control
– lack of teamwork
Gap 4: The difference between service delivery and what is communicated
externally - are promises made consistently fulfilled?
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The reasons for GAP 4 - when promises made do not match actual delivery
– inadequate horizontal communication - between departments or
services
– a propensity to overpromise
Gap 5: The difference between what customers expect of a service and what
they actually receive
-expectations are made up of past experience, word-of-mouth and
needs/wants of customers
-measurement is on the basis of two sets of statements in groups according
to the five key service dimensions
These are the five factors of SERVQUAL model.
The independent variables which affect the above dependent variables can be
grouped as:
o Trust worthiness
o Service time
o Response
o Communication
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o Approach of employees
o Facilities
DATA ANALYSIS
The data collected from the respondents using the research instrument is analyzed
with the help of statistical tools for the purpose of drawing inference regarding the
study
1. Classification and Tabulation
The data collected will be classified on the basis of the variables, and tabulated
as per methodology in order to facilitate analysis. Various statistical tools will
be used
2. Statistical analysis tools
• Z test
• Measurement of skewness
• Arithmetic mean
• Standard deviation
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CHAPTERISATION
The whole project is divided into four chapters
Chapter
Number
Title Description
1 INTRODUCTION This chapter includes the brief introduction
of the topic, significance of the study,
objectives, the research methodology and
limitations of the study.
2 INDUSTRY
PROFILE
This chapter is divided into two parts. The
first part contains a detailed industry profile.
The second part deals with the company
profile.
3 LITERATURE
REVIEW
This chapter briefly describes the various
aspects of service quality
4 DATA ANALYSIS
AND
INTERPRETATION
In this part the classified and tabulated data
is analyzed using statistical tools from which
the inference is drawn. All the questions in
the questionnaire is subjected to analysis and
interpreted accordingly
5 FINDINGS AND
SUGGESTIONS
This chapter contains the main findings and
the suggestions. A summary and the
conclusion are also included in this part.
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LIMITATIONS OF THE STUDY
As the study is concentrated on a particular unit, the project gets only a
limited area under study
Data will be collected through random sampling so the disadvantage of the
same will be reflected on the project.
1. One of the most obvious limitations of simple random sampling method is
its need of a complete list of all the members of the population.
2. This list is usually not available for large populations. In cases as such, it is
wiser to use other sampling techniques.
Time constraints
The data collected from 75 respondents form the basis of the entire study.
Since the study is based on SERVQUAL model the disadvantage of the same
will be reflected on the project:
1. SERVQUAL's 5 dimensions are not universals
2. The model fails to draw on established economic, statistical and
psychological theory
3. Concept of expectation is loosely defined and leads to multiple
interpretations and resulted operationalisation of SERVQUAL is open to
multiple interpretations,
4. A number of researchers cannot agree on the different dimensions are
appropriate for expectations, perceptions and gap scores.
5. SERVQUAL only focuses on process of service delivery rather than
outcomes of service encounters.
CHAPTER II
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INDUSTRY PROFILE
The first form of motorbikes was a bicycle was a very crude one. It was
called clarifier or wooden horse which was invented in France sometime around
the 1770‟s on this model there was a fixed steering wheel and no pedals, this
means that the person riding has a very little steering capability and had to push
their feet across the ground to propel them. The next improvement was the
attachment of a movable steering, which made for much easier riding, this model
was called Drasine or dandy horse in1839 a Scottish blacksmith named Kirkpatrick
Mac Millan added a very important invention to the Drasine it was the pedal which
he attached to the back wheel this made it easier to propel the bike. It was the first
ever bike to be patented in the U.S.
The automobile was the reply of the 19th century dream of self propelling the
horse drawn carriage. The similarly the invention of the motorcycle created the self
propelled bicycle.
Edward butter an English man built the motor cycle in 1884. The first
gasoline engine motorcycle to appear publicity was built by Gottieb Daimler of
Germany in 1885. One wheel in the front and one in the back although it has a
smaller spring loaded outrigger wheel on each side. It was constructed mostly on
wood; with the wheels being of the iron banded wooden spoiled wagon type,
definitely a bone crusher chassis.
The 1980‟s saw the conversion of many bicycles or pedal cycle by adding
small certainty mounted spark ignitions engines. There was then felt the need for
reliable constructions; this lead to road trail test and completion between
manufactures such was the providing ground floor many new ideas early two stock
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cycle designs to supper charge multi mate engines mounted on aerodynamic,
carbon fiber reinforced body work.
The popularity of the vehicle grew especially after 1910 during world war-I
all branches of the armed forces in Europe was principally sent for dispatching
after the war it enjoyed a spout vogue until the great depression began in 1929.
After the world war-II a revival of interest in motorcycle lasted into late 20th
century with the vehicle being used for high speed touring and sport competition.
The practice of attaching auxiliary engines in bicycle in western Europe and
parts of the us led to the development during the 1950‟s of a new type of light
motorcycle is called moped originating in Germany has 50cc machine with simple
control and low cost. It was largely free of licensing and insurance regulations
except in Great Britain.
INDIAN SCENARIO
The Indian two wheeler industry contributes the largest volume among all
the segments in the automobile industry. Though the segments can be broadly
categorized into three sub segments viz scooters, motorcycles and mopeds. Some
categories introduced in the market area are combined of two or more segments.
Eg scooters and step thrus.
In the four to five years the two wheelers market has witnessed a market
shift towards motorcycle at the expenses of scooters. In the rural areas consumer
have come to sturdier bikes to with stand the bad road conditions. In the process of
motorcycle segment has grown from 48% to 58%. The share of scooters decline
drastically from 33% to 25% while that of Mopeds declined by 2% from 19% to
17% during the year 2000-01. The euro emission norms effective from april2000
led to the existing players in to the stroke segment to install catalytic converters.
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Excise duty on motorcycle has been reduced from 32% to 24% resulting in price
reduction which has aided in propelling the demand for motorcycles. Fierce
competition has also forced players to cut prices of certain models. Two wheelers
are the entry- levels personal transport.
THE INDIAN MOTOR CYCLE MARKET
India has traditionally been a two stroke scooter market. With the
introduction of stricter euro I and II emission norms, scooter makers were forced to
upgrade their technology, gradually robbing them of their substantial price
advantage over motorcycles. This coupled with aggressive pricing by motorcycle
turned the tables of the two wheeler market in favor of motorcycles.
The recent years have seen the motorcycle market grow at scorching rates as it
wrestles share from the scooter and moped market. For the period of 1993-94 to
2001- 02, motorcycle sales recorded a CAGR of 25.8% compared to CAGR of
0.6% for scooters and 0.8% for Mopeds.
CREATING NEW SEGMENTS
The booming motorcycle market coupled with the low growth rates of the
scooter and moped market, has led many erstwhile scooters and moped
manufacturers to jump on the four stroke motorcycle bandwagon. The majority of
the market is still accounted for by the basic 100cc Rs 40000 to 45000 motorcycle.
However, the new launches in the last two years have created entirely new
segments in the market. At the lower end, there have been successful launches in
the Rs 30000-Rs35000 band, which have redefined the entry level market. At the
same time the upper end performance segment has been flooded with many new
launches in the 125cc+category. These segments also look all set to be further sub
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segments as market players continue to launch new products to fill in any existing
gaps.
Positioning an Indian bike
While the scooters appeals to the family man, a motorcycle‟s main
audiences has always been the young mail individual. Niche brands Bajaj pulsar
are targeted towards college students, while most mainline brands have
concentrated on the young working man in the 25-35 year age group. Being a high
involvement purchase, rational benefits derived are very important in deciding the
purchase. At the same time, a motorcycle, like a car is one of the most obvious
statement of self leading to immense potential on the emotional benefits paradigm
as well the brands in the markets have tried every trick in the book to appeal to the
Indian market from promoting rational benefits such as performance to creating
brands personalities that would appeal to the male buyer. From trying to cash in on
nationalistic feelings through corporate campaigns to using celebrities such as
Hrithic Roshan and Sachin Tendulkar to endorse the brand various tactics have
been used by various players to lure the motorcycle customers.
India is the second largest manufacturer and producer of two wheelers in the
world. It stands next to Japan and China in terms of the two wheelers produced and
doestic sales respectively. This distinction was achieved due to variety reasons like
restrictive policy followed by the government of India towards the passenger car
industry, rising demand for personnel transport inefficiency in the public
transportation system etc.
The Indian two wheeler industry made a small beginning in the early 50‟s
when automobile products of India. Until 1958 API and ENFILD were the sole
producers.
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In 1948, Bajaj auto began trading in improved VESPA scooters and three
wheelers. Finally in 1960, set up a shop to manufacturer them in technical
collaboration with piaggio of Italy.
In the initial stages, the scooter segments was dominated by automobile
products or India(API) later it was over taken by Bajaj auto, LML was one of the
leading scooters at that time and nova it stands shine among the scooter industry in
India.
The motor cycle segments in India was controlled by only three
manufacturers ENFIELD, JAVA and ESCORT bullet was a four stoke bike.
Initially the market was mainly captured by ENFIELD and ESCORT. ENFIELD
was a 350cc bikes and escort 175cc bikes.
The two wheeler market was opened ended to foreign competition in the mid
80‟s. at the time it emerged the era of 100cc bikes and existing leaders enfield and
escorts werw thrown out from the market. It resulted in the emergence of hero
Honda, the only producer of four stroke bikes (100cc category)gaining the top slot.
The first japaneese motor cycle were introduced in the early 18th century.
Tvs suzki and hero Honda brought in the first two strokes and four stroke engine
motor cycles.
The entry of kinetic Honda in the later 18th with a scooter helped in
providing easy and smooth use to scooter owners. This helped in the industry in
youngter and working women towards buying scooters.
Later the scooter industry had a decline and the trend of scooters was
changed to two strokes and four strokes bikes. In 1990 the entire automobile is a
drastic fall in demand. The main reason for the recession in this sector was the
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raise in the fuel prices, high input costs and reduced purchasing power of the
people.
India is one of the very few countries manufacturing three wheelers in the
world. It is the world‟s largest manufacturing and sellers of three wheelers. Bajaj
auto commends a monopoly in the domestic market with a market share of above
80%.
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COMPANY PROFILE
About Bajaj
Bajaj automobile is one of the India‟s top 10 companies in terms of market
capitalization and one among top 5 in terms of annual turnover. Bajaj automobile
limited came into existence on Nov 29, 1945 as Automobile Pvt Ltd. The founder
of Bajaj Automobile Pvt Ltd was Jamnalal Bajaj. The wheeler areas they produce
include pick up vans, autorikshas and delivery vans. Bajaj is also popular in
manufacturing various consumer goods which have become so relevant, for all the
people over the world. Goods like bulb, tube lights, and fan are the other products.
The most important persons of Bajaj Auto Ltd are Rahul Bajaj (Managing
Director), R.A.Mahtra ,Rajiv Bajaj (President) and R.L.Ravichandran (Vice
President) with overall 350 dealership all over India and one regional office at
Cochin they are rated as the best dealer in India.
The main advantage of Bajaj Automobile are they have low maintenance value and
good mileage and pick up compared to other two wheelers.
The Bajaj two wheelers are also rated as five star vehicles in terms of its cultural
gearbox, good handling, power breaking, lasting style, comfort and of course in
terms of money which is affordable by every person. The Bajaj Auto Ltd has got
over a strength of 12000 employees, which is definitely supreme that other
automobile companies. The Bajaj
Automobile Ltd has got around 25 dealers in India including Bajaj dealers at
Calicut. The main competitors of Bajaj are Hero Honda, TVS, are Hero Honda,
TVS, Yamaha and Suzuki.
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About KVR
KVR motors is the authorized dealers of M/S Bajaj Auto Ltd for selling and
servicing of two wheelers and three wheelers in the district Calicut, Wayanad,
Kannur and Malappuram. KVR motors is a sole proprietorship concern owned by
K.P.Nair an NRI hailing from Kannur district. KVR Bajaj was started on Nov 21,
1987. KVR motors namely KVR Bajaj is now one of the leading services, sales
and spare parts provider in India.
KVR has execellent facilities at their show room and service workshop at
Chakkorathkulam, Kannur road, Calicut. The company was inaugurated on 20 th
1997 by Sri Madhur Bajaj who was the president of Bajaj Auto Ltd in 1997.
The opening of KVR group in Calicut has been born to the customers in the
Malabar region. KVR motors was the first business organization when the KVR
group had set up at Calicut 10 year back and more production projects had
followed with the main aim of providing employment to the youth of Malabar
region.
KVR motors has its main show room and service enters at WEST HILL- Calicut
and has branches at VADAKARA, QUILANDY, RAMANATTUKKARA,