Customer satisfaction in small car segment

CUSTOMERS SATISFACTION LEVEL IN COMPACT CAR SEGMENT WITH SPECIAL REFERENCE TO MARUTI

Project of Marketing Research

By:

Faizan Ahmad

INSTITUTE OF MANAGEMENT STUDIESLAL QUAN, GHAZIABAD – 201 009

SEPTEMBER 2008

TABLE OF CONTENTS

CHAPTER NO. CHAPTER PAGE NUMBER

1. LITERATURE REVIEW 6

2. OBJECTIVES 8

3. RESEARCH METHODOLOGY 9

4. RESEARCH DESIGN 10

5. SAMPLE DESIGN 11

6. DATA COLLECTION 12

7. DATA ANALYSIS 13

8. CONCLUSION & FINDINGS 20

9. ANNEXURE 21

2

CHAPTER 1

LITERATURE REVIEW

Kurt Matzler and Hans H. Hinterhuber in their article “How to make product development

projects more successful by integrating Kano's model of customer satisfaction into quality

function deployment” in science direct Technovation,Volume 18, Issue 1, January 1998, Pages

25-38 said that -Managers need a set of practical step-by-step tools and methods which ensure

a better understanding of customers' needs and requirements, as well as procedures and

processes to enhance communication by focusing on the voice of the customer within a product

development project.

The authors propose a methodology, based on Kano's model of customer satisfaction, to

explore customers' stated needs and unstated desires and to resolve them into different

categories which have different impacts on customer satisfaction.

Robert A. Peterson and William R. Wilson in their paper “Measuring customer satisfaction:

Fact and artifact” published in Journal of the Academy of Marketing Science October, 2007

said that- Self-reports of customer satisfaction invariably possess distributions that are

negatively skewed and exhibit a positivity bias. Examination of the customer satisfaction

literature and empirical investigations reveal that measurements of customer satisfaction

exhibit tendencies of confounding and methodological contamination and appear to reflect

numerous artifacts.

Thorsten Hennig-Thurau and Alexander Klee in their article “The impact of customer

satisfaction and relationship quality on customer retention: A critical reassessment and model

development” published in Department of Marketing II, Marketing Management, University of

Hanover, Königsworther Platz 1, 30167, Hanover, Germany said that

- Customer satisfaction with a company's products or services is often seen as the key to a

company's success and long-term competitiveness. In the context of relationship marketing,

customer satisfaction is often viewed as a central determinant of customer retention. However,

the few empirical investigations in this area indicate that a direct relationship between these

constructs is weak or even nonexistent. The overall purpose of this article is to develop a

3

conceptual foundation for investigating the customer retention process, with the use of the

concepts of customer satisfaction and relationship quality. The article involves a critical

examination of the satisfaction-retention relationship, and the development of a more

comprehensive view of the customer's quality perception.

4

CHAPTER 2

OBJECTIVES

The purpose of research is to discover answers to questions through the application of

scientific procedures. The main aim of research is to find out the hidden truth which has not

been discovered yet.

1. To check the satisfaction level in people about the different cars in the compact car

segment that they use and to develop substantial degree of awareness in them

accordingly.

2. To identify the factors the customers feel are important while selecting a particular car.

3. To identify which companies in the compact car segment are the leaders and who are

the followers.

5

CHAPTER3

RESEARCH METHODOLOGY

Research Methodology is a way to systematically solve the research problem. It may be

understood as a science of studying how research is done scientifically. (Kothari 1998)

We divided the research methedology into two stages which involve two sources for collecting

the data in order to achieve the objective of project. The first source involves collecting data

from secondary sources. Various secondary sources are used in order to determine the

Consumer attitude. Various secondary sources for collecting information are websites. The

second source for collecting information was through consumer survey throughout Delhi/NCR

region. In planning and designing a specific research project it is necessary to anticipate all the

steps that must be under taken if the project is to be successful in collecting valid and reliable

information. If it were broken down into very small parts or activities, the marketing research

process would consist of a great number of steps.

RESEARCH OBJECTIVES

The purpose of research is to discover answers to questions through the application of

scientific procedures. The main aim of research is to find out the hidden truth which has not

been discovered yet.

1. To check the satisfaction level in people about the different cars in the compact car

segment that they use and to develop substantial degree of awareness in them accordingly.

2. To identify the factors the customers feel are important while selecting a particular car.

3. To identify which companies in the compact car segment are the leaders and who are

the followers.

6

CHAPTER 4

RESEARCH DESIGN

A research design is the arrangement of the conditions for collection and analysis of data in a

manner that aims to combine relevance to the research purpose with economy in procedure.

(Kothari 1998)

Exploratory research or formulate research is to gain familiarity with a phenomenon or to

achieve insight into it. The objective of exploratory research is to gather preliminary

information that will help to define problems. Thus Exploratory Research was done to identify

the satisfaction level of the customers with respect to the car they are using currently or if they

want to shift to a new brand and factors important in selecting a particular brand of a car.

.

7

CHAPTER 5

SAMPLE DESIGN:

Sampling may be defined as the selection of some part of an aggregate or totality on the basis

of which a judgement or inference about the population is made.

The object of sampling is to maximum information about the parent population with minimum

efforts. We have gone for “Convenience random sampling”. So we approached people that

owe maruti.

Sample unit: - In this we have primarily focused on the customers of maruti because these

people are more dependent on compact car segment.

Sample size: - 100

Sampling Technique: - “Convenience Random Sampling” was opted in the research because

as the parent population is very large and it is not practically possible to segment a large

population and to conduct in-depth research.

Sampling Areas: - Dasna and Ghaziabad.

8

CHAPTER 6

DATA COLLECTION METHOD

Data can be broadly classified into two categories i.e. Primary data and Secondary data.

Primary data are those which are collected afresh and for first time. Secondary data, on the

other hand, are those which have already collected by someone else and which have already

been passed through statistical process. (Kothari 1998)

Collection of primary data: - We have obtained primary data through direct communication

through personal interview, having structured questionnaire with closed and open ended

options in advance to elicit necessary information from the respondents.

Collection of secondary data: - In planning and designing a specific research project it is

necessary to anticipate all the steps that must be under taken if the project is to be successful in

collecting valid and reliable information. If it were broken down into very small parts or

activities, the marketing research process would consist of a great number of steps. The various

sources of secondary data were

Various publications of central, state and local government.

White Papers of Research Experts

.

9

CHAPTETR 7

DATA ANALYSIS

FACTOR ANALYSIS

Communalities

InitialExtractio

nbrand name 1.000 .966dealers price 1.000 .973after sales service 1.000 .956avl of srv stations 1.000 .979avl of spare parts 1.000 .928maintenance cost 1.000 .849comfort while driving 1.000 .918back seat comfort 1.000 .964luggage space 1.000 .956leg space 1.000 .935design n dimensions 1.000 .922fuel options 1.000 .776safety features 1.000 .921ground clearance 1.000 .966sturdiness 1.000 .873engine sound 1.000 .962mileage 1.000 .942pick up 1.000 .947engine performance 1.000 .954warranty of spare parts

1.000 .826

fuel tank capaity 1.000 .889seating capacity 1.000 .888engine type 1.000 .966tyre type 1.000 .946power output 1.000 .956resale value 1.000 .947sales promotional scheme

1.000 .971

information availability

1.000 .938

financing schemes 1.000 .931availability of accessories

1.000 .935

quality of accessories 1.000 .876

10

Extraction Method: Principal Component Analysis.

Total Variance Explained

Component Initial Eigenvalues

Extraction Sums of Squared Loadings

Rotation Sums of Squared Loadings

Total% of

VarianceCumulativ

e % Total

% of Varian

ce

Cumulative

% Total

% of Varian

ceCumulati

ve %1 8.199 26.449 26.449 8.199 26.449 26.449 4.928 15.896 15.8962 4.734 15.272 41.720 4.734 15.272 41.720 4.343 14.011 29.9073 3.607 11.636 53.357 3.607 11.636 53.357 3.809 12.288 42.1954 2.992 9.651 63.008 2.992 9.651 63.008 3.241 10.454 52.6495 2.792 9.006 72.014 2.792 9.006 72.014 3.146 10.148 62.7976 2.235 7.210 79.224 2.235 7.210 79.224 2.836 9.149 71.9467 1.753 5.653 84.877 1.753 5.653 84.877 2.408 7.769 79.7148 1.408 4.542 89.419 1.408 4.542 89.419 2.077 6.701 86.4159 1.037 3.344 92.763 1.037 3.344 92.763 1.968 6.348 92.76310 .782 2.522 95.28411 .701 2.262 97.54712 .451 1.454 99.00013 .185 .597 99.59714 .125 .403 100.00015 7.98E-

0162.57E-015 100.000

16 5.88E-016

1.90E-015 100.000

17 5.72E-016

1.85E-015 100.000

18 3.20E-016

1.03E-015 100.000

19 3.06E-016

9.87E-016 100.000

20 9.82E-017

3.17E-016 100.000

21 4.95E-017

1.60E-016 100.000

22 -8.69E-

018

-2.80E-017

100.000

23 -1.20E-

-3.87E-016

100.000

11

01624 -

1.35E-016

-4.36E-016

100.000

25 -2.60E-

016

-8.38E-016

100.000

26 -2.94E-

016

-9.49E-016

100.000

27 -4.03E-

016

-1.30E-015

100.000

28 -4.96E-

016

-1.60E-015

100.000

29 -7.29E-

016

-2.35E-015

100.000

30 -7.68E-

016

-2.48E-015

100.000

31 -8.46E-

016

-2.73E-015

100.000

Extraction Method: Principal Component Analysis.

Component Matrix(a)

Component 1 2 3 4 5 6 7 8 9brand name .702 -.101 -.403 .320 .272 .047 -.252 -.011 .243dealers price .595 .094 .379 -.115 -.068 -.066 .149 -.628 .165after sales

service.754 .403 .125 -.342 -.288 -.051 .019 .072 -.033

avl of srv stations

-.273 .650 .186 .286 .175 .368 .183.4``0

6.007

avl of spare parts

.250 ` .607 .343 -.129 -.265 .098 .230 .346

maintenance cost

-.045 .672 .306 .194 -.375 -.224 -.067 -.212 .152

comfort while driving

.668 -.127 -.196 .547 -.336 .030 .055 .041 -.010

back seat .101 .501 .060 .066 .784 .111 .152 -.039 .209

12

comfortluggage space .809 -.338 .165 -.207 -.153 .160 .258 .011 .031leg space .567 .048 -.551 -.181 .287 -.187 .358 .156 .062design n

dimensions.062 .370 -.527 -.130 .524 -.415 -.052 -.191 -.032

fuel options .563 .205 .111 -.162 .487 .276 -.003 -.233 -.101safety features -.219 .263 .124 .712 .403 -.090 .249 .128 -.180ground

clearance.629 .074 .280 -.176 .101 -.507 .045 .421 .090

sturdiness .258 .779 -.231 .322 -.037 -.064 -.110 .033 -.153engine sound .603 .326 -.291 .095 .216 -.224 -.524 -.155 .054mileage .641 -.547 -.280 .064 .269 .167 .093 .104 -.173pick up .648 .028 -.330 .040 -.199 .355 -.373 .191 .273engine

performance.709 -.049 -.206 -.260 -.191 -.057 -.344 .376 -.201

warranty of spare parts

.677 -.146 -.206 -.397 .023 -.073 .343 -.142 -.060

fuel tank capaity .045 .310 .500 -.581 -.014 .296 -.214 -.006 .263seating capacity -.128 .423 .334 -.269 .541 .258 -.296 -.028 -.248engine type .739 .278 .440 -.061 .029 .349 .046 -.060 -.132tyre type .498 -.411 .250 .607 .118 .022 -.184 -.182 -.127power output .456 -.423 .340 .443 .079 -.449 -.005 -.209 .081resale value .586 -.284 .533 .255 .184 .263 -.136 .227 .037sales

promotional scheme

.552 .508 -.258 .191 -.409 .230 -.133 -.165 -.202

information availability

-.080 .713 -.268 .224 -.454 .127 .152 -.118 -.202

financing schemes

.586 .006 .525 -.096 -.037 -.159 .283 .039 -.441

availability of accessories

.131 -.141 -.324 .237 -.017 .692 .433 -.110 .240

quality of accessories

.435 .569 -.292 -.155 -.073 -.213 .406 .112 .163

Extraction Method: Principal Component Analysis.a 9 components extracted.

13

Rotated Component Matrix(a)

Component Attributes 1 2 3 4 5 6 7 8 9brand name .032 .847 -.061 .267 .143 .325 .004 .133 .169dealers price .473 .040 .114 .084 .120 -.071 .182 .819after sales service

.637 .310 .367 .336 -.029 -.354 .176 -.164 .149

avl of srv stations

-.057 -.196 .382 -.109 .482 -.035 .384 .252 -.578

avl of spare parts

.244 -.003 .135 -.051 .035 .089 .908 -.099 .051

maintenance cost

-.073 -.142 .650 -.134 .020 -.127 .518 -.190 .249

comfort while driving

.325 .546 .260 .084 -.363 .472 .134 .242 .091

back seat comfort

-.080 .004 .008 .302 .890 .065 .229 .129 .003

luggage space .771 .300 -.221 .226 -.211 -.060 .016 .248 .248leg space .156 .297 -.050 .880 .067 .118 -.135 .087 -.028design n dimensions

-.368 .100 .143 .612 .427 .128 -.229 -.336 .136

fuel options .444 .254 .008 .158 .633 -.036 -.140 .088 .244safety features -.137 -.256 .178 -.060 .397 .689 .294 .065 -.281ground clearance

.502 .226 -.189 .450 -.009 -.002 .473 -.447 -.031

sturdiness -.022 .263 .782 .191 .276 .149 .151 -.140 -.120engine sound -.017 .726 .267 .231 .294 .102 -.011 -.369 .276mileage .427 .480 -.390 .259 -.038 .368 -.353 .220 -.015pick up .157 .896 .134 .069 -.104 -.193 .014 .217 -.039engine performance

.477 .664 .041 .232 -.219 -.156 -.153 -.321 -.178

warranty of spare parts

.507 .166 -.095 .600 -.092 -.070 -.243 .091 .303

fuel tank capaity .233 -.019 -.042 -.199 .319 -.793 .216 -.054 .110seating capacity .102 -.104 .035 -.238 .803 -.271 -.116 -.248 -.129engine type .803 .258 .218 -.048 .347 -.117 .163 .127 .169tyre type .349 .397 -.167 -.343 .011 .656 .084 .046 .284power output .271 .171 -.301 -.055 -.151 .604 .333 -.175 .481resale value .620 .407 -.341 -.304 .178 .203 .319 .113 -.012sales promotional scheme

.285 .462 .803 .049 -.041 -.006 -.089 .100 .104

information availability

-.094 -.106 .937 .058 -.062 -.030 -.004 .142 -.108

financing .895 -.147 .035 .094 .028 .158 .115 -.219 .110

14

schemesavailability of accessories

.011 .146 .036 .077 .005 .080 -.139 .938 -.015

quality of accessories

.147 .081 .436 .762 .043 -.135 .235 .049 .010

Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization.a Rotation converged in 65 iterations.

On the basis of rotated component matrix the factors and the variables under them are identified which are as follows:

1 2 3 4 5 6 7 8 9Financing

Engine performance

Promotions

Design Sitting Capacity

Brand Image

Spare Parts

Accessories Servicing

Resale value

Comfort while driving

Sturdiness

Quality of accessories

Seating capacity

Brand name

Avl of spare parts

Availability of accessories

Availability of service stations

Luggage space

Engine sound

Sales promotional scheme

Leg space

Back seat comfort

Fuel tank capacity

Dealers price

Financing schemes

Mileage Information availability

Design n dimensions

Fuel options

Tyre type

Warranty of spare parts

Pick up Maintenance cost

Power output

Engine type

Engine performance

Safety features

The factors have been named on the basis of the variables underlying them.

15

Regression

ANOVA(d)

Model

Sum of Squares df

Mean Square F Sig.

1 Regression

11.572 9 1.286 28.446 .000(a)

Residual 4.068 90 .045Total 15.640 99

2 Regression

11.546 8 1.443 32.084 .000(b)

Residual 4.094 91 .045Total 15.640 99

3 Regression

11.516 7 1.645 36.697 .000(c)

Residual 4.124 92 .045Total 15.640 99

a Predictors: (Constant), REGR factor score 9 for analysis 1, REGR factor score 8 for analysis 1, REGR factor score 7 for analysis 1, REGR factor score 6 for analysis 1, REGR factor score 5 for analysis 1, REGR factor score 4 for analysis 1, REGR factor score 3 for analysis 1, REGR factor score 2 for analysis 1, REGR factor score 1 for analysis 1b Predictors: (Constant), REGR factor score 9 for analysis 1, REGR factor score 8 for analysis 1, REGR factor score 7 for analysis 1, REGR factor score 5 for analysis 1, REGR factor score 4 for analysis 1, REGR factor score 3 for analysis 1, REGR factor score 2 for analysis 1, REGR factor score 1 for analysis 1c Predictors: (Constant), REGR factor score 9 for analysis 1, REGR factor score 8 for analysis 1, REGR factor score 7 for analysis 1, REGR factor score 5 for analysis 1, REGR factor score 4 for analysis 1, REGR factor score 3 for analysis 1, REGR factor score 2 for analysis 1d Dependent Variable: satisfaction with performance of the car

Coefficients(a)

Model

Unstandardized Coefficients

Standardized Coefficients t Sig.

Collinearity Statistics

BStd.

Error BetaToleranc

e VIF BStd.

Error1 (Constant) 2.940 .021 138.285 .000

REGR factor score 1 for analysis 1

.018 .021 .044 .823 .413 1.000 1.000

REGR factor score 2 for

.165 .021 .416 7.734 .000 1.000 1.000

16

analysis 1REGR factor score 3 for analysis 1

.172 .021 .434 8.069 .000 1.000 1.000

REGR factor score 4 for analysis 1

.113 .021 .284 5.278 .000 1.000 1.000

REGR factor score 5 for analysis 1

.038 .021 .095 1.762 .081 1.000 1.000

REGR factor score 6 for analysis 1

.016 .021 .040 .753 .453 1.000 1.000

REGR factor score 7 for analysis 1

.042 .021 .105 1.961 .053 1.000 1.000

REGR factor score 8 for analysis 1

.203 .021 .511 9.498 .000 1.000 1.000

REGR factor score 9 for analysis 1

-.047 .021 -.118 -2.198 .030 1.000 1.000

2 (Constant) 2.940 .021 138.616 .000REGR factor score 1 for analysis 1

.018 .021 .044 .825 .412 1.000 1.000

REGR factor score 2 for analysis 1

.165 .021 .416 7.752 .000 1.000 1.000

REGR factor score 3 for analysis 1

.172 .021 .434 8.088 .000 1.000 1.000

REGR factor score 4 for analysis 1

.113 .021 .284 5.291 .000 1.000 1.000

REGR factor score 5 for analysis 1

.038 .021 .095 1.767 .081 1.000 1.000

REGR factor score 7 for analysis 1

.042 .021 .105 1.966 .052 1.000 1.000

REGR factor score 8 for analysis 1

.203 .021 .511 9.521 .000 1.000 1.000

REGR factor score 9 for

-.047 .021 -.118 -2.204 .030 1.000 1.000

17

analysis 13 (Constant) 2.940 .021 138.857 .000

REGR factor score 2 for analysis 1

.165 .021 .416 7.766 .000 1.000 1.000

REGR factor score 3 for analysis 1

.172 .021 .434 8.102 .000 1.000 1.000

REGR factor score 4 for analysis 1

.113 .021 .284 5.300 .000 1.000 1.000

REGR factor score 5 for analysis 1

.038 .021 .095 1.770 .080 1.000 1.000

REGR factor score 7 for analysis 1

.042 .021 .105 1.969 .052 1.000 1.000

REGR factor score 8 for analysis 1

.203 .021 .511 9.537 .000 1.000 1.000

REGR factor score 9 for analysis 1

-.047 .021 -.118 -2.208 .030 1.000 1.000

a Dependent Variable: satisfaction with performance of the car

18

CHAPTER 8CONCLUSION & FINDINGS

During the entire research process, we can conclude that:-

Out of the 100 individuals interviewed, maximum of the customers are satisfied with the

services provided by the maruti and hence this is the most important factor for purchasing

this car in the compact car segment.

Our study showed that the usually ineffective factors are sitting Capacity and the

availability of the spare parts and they are that not important in the customer satisfaction

Engine performance, design, servicing, accessories and promotions are the most

important factors which we analyzed by applying the regression i.e. 2,3,4,8 & 9 as shown

in the regression table.

We found out Mostly people take Care of the services as the most important factor for

their requirement.

19

CHAPTER 9ANNEXURE 1

QUESTIONNAIRE Age:

Occupation:

Gender:

Income: <3LPA, 3-5LPA, 5-7 LPA, >7LPA

Please rate the following attributes of your car on the basis of the satisfaction level derived

from them on a five point scale.

(Where 5 = very satisfied and 1 = very dissatisfied.

Serial no. Attributes 5 4 3 2 11. Brand name 2. Maximum Retail Price3. After Sales Service4. Availability of service stations5. Availability of spare parts 6. Maintenance costs7. Comfort while driving8. Comfort while sitting at the back seat9. Luggage space10. Leg space11. Design and Dimensions 12. Fuel options13. Safety Features14. Ground clearance15. Sturdiness16. Engine Sound17. Mileage18. Pick-up19. Engine performance20. Warranty of spare parts21. Fuel tank capacity22. Seating capacity23. Engine type24. Tyre type 25. Power output26. Resale value27. Sales Promotional schemes28. Information availability29. Financing Schemes

20

30. Availability of accessories 31. Quality of accessories 32. Rate your satisfaction level with the

performance of your car.

21