hyundai

A

RESEARCH REPORT

ON

THE STUDY OF CONSUMER PREFERENCE

TOWARDS HYUNDAI AND MARUTI CARS”

Submitted To: Submitted By:

William sir Mansi Dhir

MBA (IB)

CONTENTS

CHAPTER 1: Introduction

CHAPTER 2: Review of Literature

CHAPTER 3: Research Methodologies

CHAPTER 4: Presentation and Interpretation of Data

CHAPTER 5: Summary of Findings and Suggestions for further study

AUTOMOBILE INDUSTRY

In India there are 100 people per vehicle, while this figure is 82 in China. It is expected that Indian automobile industry will achieve mass motorization status by 2014.

INDUSTRY OVERVIEW

S i n c e   t h e   f i r s t   c a r   r o l l e d   o u t   o n   t h e   s t r e e t s   o f  M u m b a i   ( t h e n   B o m b a y )   i n   1 8 9 8 ,   t h e Automobile Industry of India has come a long way. During its early stages the auto industry was over looked by the then Government and the pol ic ies were a lso not favorable. The liberalization policy and various tax reliefs by the Govt. of India in recent years have made remarkable impacts on Indian Automobile Industry. Indian auto industry, which is currently growing at the pace of around 18 % per annum, has become a hot destination for global auto players like Volvo, General Motors and Ford. A well developed transportation system plays a key role in the development of an economy, and India is no except ion to i t . Wi th the growth of t ransportat ion system the Automot ive Industry of India is also growing at rapid speed, occupying an important place on the 'canvas' of Indian economy. Today Indian automotive industry is fully capable of producing various kinds of vehicles and can be divided into 03 broad categories: Cars, two-wheelers and heavy vehicles.

•The first automobile in India rolled in 1897 in Bombay.

•India is being recognized as potential emerging auto market.

•Foreign players are adding to their investments in Indian auto industry.

•Within two-wheelers, motorcycles contribute 80% of the segment size.

•Unlike the USA, the Indian passenger vehicle market is dominated by cars (79%).

•Tata Motors   dominates over 60% of the Indian commercial vehicle market.

•2/3rd of auto component production is consumed directly by OEMs.

•India is the largest three-wheeler market in the world.

•India is the largest two-wheeler manufacturer in the world.

•India is the second largest tractor manufacturer in the world.

•India is the fifth largest commercial vehicle manufacturer in the world.

•The number one global motorcycle manufacturer is in India.

•India is the fourth largest car market in Asia - recently crossed the 1 million mark.

INDIAN AUTOMOBILE INDUSTRY

The origin of automobile is not certain. In this section of automobile history,

we will only discuss about the phases of automobile in the development

and modernization process since the first car was shipped to India. We will

start automotive history from this point of time. The automobile industry has

changed the way people live and work. The earliest of modern cars was

manufactured in the year 1895. Shortly the first appearance of the car

followed in India. As the century turned, three cars were imported in

Mumbai (India). Within decade there were total of 1025 cars in the city.

The dawn of automobile actually goes back to 4000 years when the first

wheel was used for transportation in India. In the beginning of 15th century

Portuguese arrived in China and the interaction of the two cultures led to a

variety of new technologies, including the creation of a wheel that turned

under its own power. By 1600s small steam-powered engine models was

developed, but it took another century before a full-sized engine-powered

vehicle was created. The actual horseless carriage was introduced in the

year 1893 by brothers Charles and Frank Duryea. It was the first internal-

combustion motor car of America, and it was followed by Henry Ford's first

experimental car that same year.

One of the highest-rated early luxury automobiles was the 1909 Rolls-

Royce Silver Ghost that featured a quiet 6-cylinder engine, leather interior,

folding windscreens and hood, and an aluminum body. It was usually

driven by chauffeurs and emphasis was on comfort and style rather than

speed.

During the 1920s, the cars exhibited design refinements such as balloon

tires, pressed-steel wheels, and four-wheel brakes. Graham Paige DC

Phaeton of 1929 featured an 8-cylinder engine and an aluminum body.

The 1937 Pontiac De Luxe sedan had roomy interior and rear-hinged back

door that suited more to the needs of families. In 1930s, vehicles were less

boxy and more streamlined than their predecessors. The 1940s saw

features like automatic transmission, sealed-beam headlights, and tubeless

tires.

“Hyundai motor company”

Founded 1967

Founder Chung Ju-yung

Chairman & CEO Chung Mong-Koo

Parent Hyundai KIA Automotive group

Location Seoul, South Korea

Industry Automobile market

Revenue 38.6 Trillion

Net income 2.96 Trillion

Employees 75000 worldwide

Website www.Hyundai-motor.com

Slogan Drive your way

COMPANY PROFILE

Hyundai Motor Company (HMC) is a division of Hyundai Kia

Automotive Group. It is South Korea's largest car maker. It is

headquartered in Yangjae-Dong Seocho-Gu Seoul. HMC is also

the world's sixth largest car maker and operates the world's

largest integrated automobile manufacturing facility in Ulsan,

South Korea.

In India the company is known by Hyundai Motor India Limited

(HMIL). It is a wholly owned subsidiary of Hyundai Motor

Company and is the second largest and the fastest growing car

manufacturer in India. Currently the company markets 32 variants

of passenger cars in six segments. Santro in the B segment, Getz

in the B+, the Accent in the C segment, Elantra in the D segment,

Sonata Embera in the E segment and the Tucson in the SUV

segment.

HMIL recorded combined sales of 252,851 during calendar year

2005 with a growth of 17.26% over previous year. It is the

country's fastest growing car company having rolled-out 10,

1,00,000 cars in just 90 months since its inception and is the

largest exporter of passenger cars with exports of over Rs. 1,800

crores. The company has recorded a growth of 27.2% in exports

over the year 2004.

The company has been awarded the benchmark ISO 14001

certification for its sustainable environment management

Hyundai brands

Accent Verna Santro Xing I10 I20 Getz

Competitors to Hyundai

Maruti Suzuki

Tata motors

M & M

General motors

Honda

Toyota

Ford

“MARUTI SUZUKI”

Founded 1981

Headquarter GURGAON, HARYANA, INDIA

Industry Automotive

Type Public (BSE, NSE)

Products Automobiles, Motor cycle

Revenue 4.8 Billion

Employees 6903

Parent Suzuki

Website www.Marutisuzuki.com

Slogan Count on us

Company Profile

Maruti Udyog Limited (MUL), established in 1981, had a prime objective to

meet the growing demand of a personal mode of transport, which is caused

due to lack of efficient public transport system. The incorporation of the

company was through an Act of Parliament.

Suzuki Motor Company of Japan was chosen from seven other prospective

partners worldwide. Suzuki was due not only to its undisputed leadership in

small cars but also to commitments to actively bring to MUL contemporary

technology and Japanese management practices (that had catapulted

Japan over USA to the status of the top auto manufacturing country in the

world).

A license and a Joint Venture agreement were signed between

Government of India and Suzuki Motor Company (now Suzuki Motor

Corporation of Japan) in Oct 1982.

The objectives of MUL, then are as cited below:

Modernization of the Indian Automobile Industry.

Production of fuel-efficient vehicles to conserve scarce resources.

Production of large number of motor vehicles which was necessary

for economic growth.

In 2001, MUL became one of the first automobile companies, globally, to

be honored with an ISO 9000:2000 certificate. The production/ R&D is

spread across 297 acres with 3 fully-integrated production facilities. The

MUL plant has already rolled out 4.3 million vehicles. The fact says that, on

an average two vehicles roll out of the factory in every single minute. The

company takes approximately 14 hours to make a car. Not only this, with

range of 11 models in 50 variants, Maruti Suzuki fits every car-buyer's

budget and any dream. India's largest automaker, Maruti Suzuki has filed

an 11% rise in the March 2010 sales on a YoY basis. With the total sales

standing at 95,123 vehicles in March 2

Maruti Brands

Maruti 800 Omni Alto Zen Estilo Wagno R Ritz Swift Swift Desire sX4 Grand Vitara

Competitors to Maruti Suzuki

Hyundai Tata Motors Mahindra & Mahindra Toyota Honda General Motors Ford B.M.W Fiat Dewood Motors

1.0 (Background to the study) 

Project aims to understand the working process of different automobile and evaluating its outcome in the four- wheeler automobile sector. Over the past few years, there has been tremendous progress made around the world in opening up travel and tourism markets to the benefits of increased competition. One of the main aspects of the project is to analyze the different products and services offered and initiatives adapted by the four- wheeler automobile sector their product. Selling“Intangible assets” is one of the toughest jobs in the world. The project is more of a team effort and will incur team returns.

1.1(Statement of the Problem)

With better understanding of consumer’s perceptions, companies can determine the actions required to meet the customer’s need. They can identify their own strengths and weaknesses, where they stand in comparison to their competitors, chart out the path future progress and improvement. It helps to promote an increased focus on customer outcomes & improvement in work practices within the company. The following problem arises which are as follows:

Product Quality Product Packaging Keeping delivery commitments Price Responsiveness & ability to response complaints & reject

projects Overall communication, accessibility & attitudes

1.2 (Objective of the study)

The objective of this trust is to address the expectations of society and to initiate the concentrate steps to extend support in the field of Health care, Educational and Vocational Training, Environment, Road Safety, Art, Science and Technology and much more. The company aims to achieve sustainable, profitable growth through the development of superior products and

customer- relevant technologies.

  Other objectives are as follows:

To know the image of product in the mind of consumer.

To compare the level of satisfaction before purchasing and after purchasing the car.

To know the most popular media for advertisement. To check the loyalty of the consumer towards the brands. To know the most motivating factor for purchasing the four –

wheeler. To know the preferable price from the customer. To study their attitude toward various Cars brand To find out the perceived positioning of different Car Brands. To know out the choice criteria which the customer while

purchasing a Car.

1.3(Need of the Study)

A brand is a set of expectations and associations evoked from company or product. A brand is how key constituents- customers, employees etc. experiences what you do. Some brands are of such great importance 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 own personality, the brand perception, which can be defined as the set of human characteristics associated with a given brand. Because many people interact with brand as though they were other people, it is important to understand what a brand perception consists of, and how its characteristics can be used to affect the relationship between the brands and its users. Knowing and understanding the brand perception gives a good insight into this relationship, and into peoples’ attitudes towards the brand, and is also an important guide to communicating the brand. Like apparel and

lifestyles brands, a car is extension of one’s perception. People buy cars which either matches their personalities or those which provide them opportunities of being perceived as somebody they aspire to be. This becomes significant as consumers move up the value chain from small compact cars to midsize and upwards.

1.4 (Purpose of the study)

The committee reviews the contents and content selection process of the company’s 2009 Sustainability Report and provides ideas for improvement.

1.5 (Scope of the study)

Review of contents in and content selection process of the report

Review of key performances and strengthen internal system and process for improvement

Review of quality of the overall report: reliability, balance, etc.

On-site verification of the performance and processes described in the report

1.6 (HYPOTHESIS)

We can suppose that the study will lead to the knowledge about various brands of cars and will provide a healthy comparative study between two cars which are Hyundai and Maruti Suzuki. A hypothesis is a possible answer to questions. Hypothesis implies generating basically alternative answers to research questions. The researches determine which of these alternative answers is correct.

REVIEW OF LITERATURE

Relevant literatures pertaining to the present study on four wheeler

automobile industry are included in this chapter. The literatures are helpful

for proper understanding the four wheeler automobile industry and its

various related aspects. Review of literature is also helpful in effectively

fulfilling the objectives for which the research project has been

undertaken.

G.S. Dangayach and S.G. Deshmukh, in their study on ‘Advanced

manufacturing technologies: evidences from Indian automobile companies’

in International Journal of Manufacturing Technology and Management,

reports the findings of an exploratory survey on ‘Advanced manufacturing

technologies (AMT)’ administered in Indian automobile companies. The

objective of the survey is to assess the status of advanced manufacturing

technologies, identify advanced manufacturing technologies relevant to

Indian automobile sector companies, identify competitive priorities, and

assess the degree of investment in advanced manufacturing technologies.

Responses from 68 companies are analysed and presented.

RNCOS industry in their study of Indian Automobile Sector provides a

forecast and analysis based on various macro- and microeconomic factors,

sector and industry specific databases, and an in-house statistical and

analytical model. This model takes into account the past and current trends

in an economy, and more specifically in an industry, to bring out an

objective market analysis. In this research main topics covered are: Study

of the Indian automobile industry structure, Analysis of performance of

industry sub-segments and their future outlook, Understanding the Indian

auto component market and its growth aspects, Identification of future

prospects for the Indian automobile industry.

S. Saraswathi undertook a study on ‘Customer Satisfaction on Post-Sales

Service with Reference to Four-Wheeler Automobile Industry’ which

reveals that the key to success of automobile industry lies not only in

having good products but also in being able to provide the customer with

the level of service they desire. Because of increasing competitiveness in

the Indian automobile industry, almost all automobile manufacturers have

invested valuable resources on customer satisfaction as a tool to

understand the needs and expectations of their customers. Increased

presence of four-wheeler vehicles throughout the country has created a

growing need for providing service infrastructures closer to the customers'

homes or offices.

Dr V Sumantran (Executive Director-Passenger Car Business Unit

and Engineering Research Centre at Tata Motors Limited during

November 2001 to August 2005, conducted a study on ‘The Indian

Auto Industry & The Role of Dealers’ which reveals that the global auto

industry has been the subject of much analysis in recent years. While

global capacity creation proceeds at a good clip on one hand, continued

capacity creation in the face of sluggish sales have led to depressed levels

of capacity utilization. Today, the Indian auto industry is one of the largest

industrial sectors with a turnover that contributes to roughly 5 per cent of

India's GDP. More importantly, it contributes to employment of over 2

million people directly and indirectly to another 10 million. The industry is

important for national policy in that it contributes 19 per cent of indirect

taxes.

Akie Takeuchi, Maureen Cropper and Antonio Bento in the Journal of

Regional Sciences published a paper on ‘The impact of policies to control

motor vehicle emissions in Mumbai, India’ which examines the impacts of

measures to reduce emissions from buses, cars, and four-wheelers in

Mumbai, India. They have considered three possible policies: conversion of

diesel buses to CNG, an increase in the price of gasoline and a tax on

vehicle ownership.

In The Wall Street Journal, India Infoline Sector Reports published a

report on Automobile- Indian four Wheelers Industry which reveals that

India is the second largest manufacturer and producer of four-wheelers in

the world. It stands next only to Japan and China in terms of the number of

four-wheelers produced and domestic sales respectively. This distinction

was achieved due to variety of reasons like restrictive policy followed by the

Government of India towards the passenger car industry, rising demand for

personal transport, inefficiency in the public transportation system etc

Dr. Amit Kumar Dwivedi and Mr. Punit Kumar Dwivedi, in their article on

Automobile Sector: Industry Vs Indian Middle Class in Indian MBA

concluded that that there are great opportunities and possibilities in the

automobile sector.  But hike in the fuel price is influencing the market of this

industry.

There is a need of a very liberal policy for the fuel prices and requires a

great good deal with fuel supplying countries.  Though, the performance of

the industry is better instead of high and unfavourable fuel policy.

The new launching of Tata's Nano 'One Lakh Car' which is also known as

People's Car is also a very good strategy to capture the middle class

customers.  Introduction of Nano and Bajaj Lite will definitely affect the

growth and sales volumes of cars which will also affect the industry by

reaching, catching the Indian middle class and fulfilment of their own car

need.

Sunila George, Raghbendra Jha, Hari K. Nagarajan in their research

paper on ‘The Evolution and Structure of the four-wheeler Industry in India’

studied the evolution of the competitive structure of the two-wheeler

industry in India. The evolution of the industry's competitive structure is

traced using Kendall’s Index of Rank Concordance and the Evans-Karras

test of convergence. The industry seems to be characterized by oligopoly

with the onset of economic reforms not making much difference to

industrial structure. Convergence of sales and capacity at the level of the

industry is conditional while it is absolute at the level of the segment.

Dr A. Subbiah and S. Jeyakumar (Ph.D research scholar at PG and

Research Department of Commerce) in their market survey report on

Automobiles: the Engines of Economic Growth concluded that A sound

transportation system plays a pivotal role in a country’s rapid economic and

industrial development. The well-developed Indian automotive industry ably

fulfils this catalytic role by producing a wide variety of vehicles. They also

studied Size and structure of the Indian automotive industry, production

trends and exports trends. They also concluded that the manufacturers

must take necessary steps to increase the production of automobiles in

India. They should adopt latest technology and introduce new models to

face stiff competition from foreign manufacturers.

CONSUMER PREFERENCE

Consumer Preference is a business term which is used to capture the idea

of measuring how satisfied an enterprise’s customers are with the

organization Efforts in a market place.

Every organization has customers of some kind. The organization provides

products (goods and services) of some kind to its customers through the

mechanism of a marketplace. The products the organization provides are

subject to competition whether by similar products or by substitution

products. The reasons on organization is interested in the satisfaction of its

customers is because customers purchase the organization’s products.

The organization is interested in retaining its existing customers and

increasing the number of its customers.

By Fareena sultan:-Examines consumer preferences for forthcoming

technological innovations. Studies consumer response to different levels of

technology over time. Looks at preferences for existing and intermediate

technologies when future ones are expected. Focuses on technological

consumer durables that are expected to evolve over time. The primary

contributions of this research are: an understanding of how consumer

preferences for a technology are affected by the time of adoption; an

understanding of the value to consumers of obtaining different levels of a

technology, at different points in time; and the utilization of parsimonious

indices to assess consumer response to different levels of technology over

time. An empirical examination is conducted for high definition television

(HDTV). Using survey data, the study explores consumer preferences for

HDTV, and for interim television technologies. Managerial implications to

aid product design, and the timing of introduction of evolving technological

innovations, are also discussed.

How Companies Find Consumer Preferences

Companies routinely test the market to find out what customers like and

dislike about their products and competitors' products. This is usually

done by an internal marketing department or outsourced to a market

research firm. Phone interviews, paper surveys, electronic surveys,

focus groups and consumer samplings are common methods for

gathering information.

Market Research Example

Here is a popular example of market research: A customer has finished

shopping and paying for merchandise at a local grocery store. Before

handing the receipt to her, the cashier points to and explains that she

has been invited to participate in a short survey about her visit. If she

chooses to participate, she will receive $5 off her next visit and a chance

to win a large monetary grand prize.

How Companies Use This Information

After gathering information, the next step for the company is to

determine what it means. Analysis of the information may lead the

company to change the formula, packaging, color, size or some other

feature of the product. In the case of the suds in the shampoo, the

manufacturers may find that customers are continuing to prefer and

associate the foamy lather with high quality cleanliness, leading them to

keep the same formula or decide to add even more of the sudsing

agent.

CONSUMER BEHAVIOUR

In today’s challenging and competitive world of last changing technology,

consumer tastes are also characterized by fast changes. So to survive in

the market the firms have to be in touch with the changing consumer

preferences. Marketers have to understand the consumer behaviour and

factors influencing the buying behaviour of the customers in order to be

successful in this dynamic and competitive environment.

Meaning of Consumer Behaviour:

Consumer Behaviour is the behaviour that the consumer display while

searching for, evaluating, purchasing and disposing off products and

services that they expect will satisfy their needs. Consumer behaviour is

the study of how consumer makes their decisions to spend their resources

on consumption related items i.e. time, efforts and money.

Study of consumer behaviour proves the marketers an insight regarding the

consume preferences and helps them in effective market segmentation and

targeting. The importance of consumer behaviour lies in the fact that

behaviour can be understood and influenced to ensure a positive purchase

decision. So a round understanding of consumer behavior is necessary for

long run success of any marketing program. That’s why the marketing

managers interest lies exactly in understanding consumer behavior to

ensure that his marketing strategy results in purchase of the product.

Deborah J. Macinnis A notable human capacity is the ability to look to the

future and aspire to achieve desired states The marketplace provides rich

sources of hope and invites us to the endless pursuit of happiness. while

some researchers recognize its importance, definitions in the psychology,

sociology, philosophy, medical, and religion literatures often conceptualize

hope in different ways. Understanding Hope and its Implications for

Consumer Behavior sheds light on the relevance and importance of hope

to consumer behavior. The authors explore the conceptual meaning of

hope and a definition of hope and the constituent elements that underlie it

is articulated.

DETERMINANTS OF CONSUMER BEHAVIOUR

The study of consumer behaviour is quite complex, because of many

variables involved and their tendency to interact with and influence each

other. The main determinants of consumer behaviour are:

1. External Variables

2. Individual determinants of Consumer Behaviour

1. External Variables : The external environment is made up of various

influences such as:

Culture

Sub Culture

Social Class

Family

Reference Groups

Personal Factors such as age and life cycle, education,

occupation, life style, personality, etc..

2. Individual Determinants of Consumer Behaviour : The individual

determinants of consumer behaviour are:

Personality and Self Concept

Motivation and Involvement

Learning

Memory

Attitude

PERCEPTUAL MAPPING

Consumer’s perceptions of products are developed in a complex way and

are not easily determined by marketers. However, a technique known as

perceptual mapping may be used in exploring consumer’s product

perceptions. Since product can be perceived on many dimensions (such as

quality, price and strength) the technique is multidimensional in nature.

That is, it allows for the influence for more than one stimulus characteristic

on product perceptions, typically consumer feel out measuring scales to

indicate their perceptions of many characteristics and similarity of

competing brands. Computer programs analyze the resulting data to

determine those products characteristics or combination of characteristics

that are most important to consumers in distinguishing between competing

brands. Results of this analysis can be plotted in terms of perceptual

“maps” which display how consumes perceive the brands, and their

differences, on a coordinate system.