FACTORS AFFECTING BUYING BEHAVIOUR OF CUSTOMERS OF COLD ROLLED STEEL STRIPS/COILS IN LUDHIANA A Project Report Submitted by GURIQBAL SINGH Reg. No. 80101317009 In partial fulfillment for the award of the degree Of MASTERS OF BUSINESS ADMINISTRATION IN MARKETING At
factors affecting buying behaviour of automobile & bicycle industry.
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FACTORS AFFECTING BUYING BEHAVIOUR OF CUSTOMERS OF COLD ROLLED STEEL STRIPS/COILS IN LUDHIANA
A Project Report
Submitted by
GURIQBAL SINGH
Reg. No. 80101317009
In partial fulfillment for the award of the degree
Of
MASTERS OF BUSINESS ADMINISTRATION
IN
MARKETING
At
GURU NANAK DEV ENGINEERING COLLEGE
LUDHIANA
AUGUST 2009
ACKNOWLEDGEMENT
I take this opportunity to express my profound sense of gratitude & respect to all those
who helped me in this Research.
I would like to make special mention of help and encouragement that I received from Mr.
Anil Gupta & Mr. Jagmohan Syal (V.P. Marketing, Hero CRD), my project leader
Mr. Rajesh Vij (A.G.M. Marketing, Hero CRD) and special thanks to Mr. Manish
Kr. Singh (Dy. Marketing Manager, Hero CRD), Mr. Dhirendra Singh & Mrs. Lizu
Jagdish (Marketing Coordinator) which were critical in the development of this
project. I have profited immensely from working with many distinguished thinkers and
doers, who advised me at each step.
I would also like to thank the Marketing Department of Hero Cycles CR Division and
people in the organization for sparing their valuable time and providing useful insight’s
that have made my learning experience very fruitful.
Above all I want to thanks my parents, for their continuous involvement and constant
support.
Finally and most important I would like to thank to Faculty of GNDEC to
provide me with such an opportunity that has enhanced my learning horizon Last
but not least, I thank the almighty, may he stand with all of us.
GURIQBAL SINGH
REG. NO. 8010137009
MBA (2008-10)
PREFACE
I feel delighted to present my project report on “ FACTORS AFFECTING BUYING
BEHAVIOR OF CUSTOMERS OF COLD ROLLED STEEL STRIPS/COILS IN
LUDHIANA” is a matter of honor and pride for me that I got a chance to undergo my
Summer Training in a company like HERO CYCLE Ltd. (CR Division). In this period
of six weeks I got familiar to the real conditions of an organization and especially to the
work culture of such a big and prestigious group which has its name in the manufacturing
of Two Wheelers and many others products as well as Customer services.
The first task for me was to know about the concept on which my project was based.
Then I had to set criteria, on the basis of which the above concept was valued. The data
was collected for each of the parameter found responsible in influencing the purchase
decision of the customers through Marketing Research Program.
Hence, this project had to be completed in the Six weeks of time. As the time was
limited, so there is a possibility that some matters might not have been taken into
consideration, but every effort has been done from my side to include every necessary
parameter and include whole information that I got from the market during surveys as
well as the marketing Research Program.
GURIQBAL SINGH
CERTIFICATION
This is to certify that the research project entitled “FACTORS AFFECTING BUYING
BEHAVIOUR OF CUSTOMERS OF COLD ROLLED STEEL STRIPS/COILS IN
LUDHIANA” submitted for the partial fulfillment of requirement for the degree of
MASTERS OF BUSINESS ADMINISTRATION at GURU NANAK DEV
ENGINEERING COLLEGE, Ludhiana affiliated to PUNJAB TECHNICAL
UNIVERSITY, JALANDHAR is a bonafide research work carried out by Guriqbal
Singh of M.B.A under my supervision and that no part of this has been submitted for any
degree.
The assistance and help received during the course of the investigation have been fully
acknowledged.
Mr. PARAMPAL SINGH
ASSISTANT PROFESSOR
GURU NANAK DEV ENGINEERING COLLEGE
LUDHIANA
DECLARATION
I hereby declare that the project titled “FACTORS AFFECTING BUYING
BEHAVIOUR OF CUSTOMERS OF COLD ROLLED STEEL STRIPS/COILS IN
LUDHIANA” is an original piece of research work carried out by me.
The information has been collected from genuine & authentic sources. The work has been
submitted in partial fulfillment of the requirement of Master of Business Administration
to Guru Nanak Dev Engineering College Ludhiana affiliated to Punjab technical
university.
Place: Signature:
Date: Guriqbal Singh
M.B.A. (2008-10)
EXECUTIVE SUMMARY
In the age of fast changing Marketing strategies, customer behavior, new market
segments and product opportunities along with sensitivity to changing customer needs,
the Hero group develops and adapts marketing strategy and philosophy. As the Hero
group is known for its completely customer- driven approach. For that very reason Hero
Cycles CRD undergoes this project.
The main aim of the project is to know the purchase criteria / Buying Behavior of
customers of the Cold Rolled Steel Strips/ Sheets provided by the Hero Cycle C.R.
Division and used in various industries (Automobiles, Bicycle etc.) in Ludhiana.
The customer’s perceive Quality as the most important factor while purchasing. More
customers will be attracted towards the products if quality parameters such as surface
finish, peeling off etc. are improved upon by getting continuous feedback on the quality
and other services provided by the company. The second most important factor is
delivery system and price. The price should be competitive with the other suppliers. The
third most important factor is Credit policy of the company. Better credit facility should
be given to the customers and payment norms should be simplified. Quality should be
used to cover the price. Improvement in quality, Services, Delivery and Rate reduction
should be made to further increase the market share and to attract the new customers of
C.R. Steel Strips/ Sheets.
CONTENTS
CHAPTERS
CHAPTER-1
INTRODUCTION OF THE PREOJECT
REVIEW OF LITERATURE
OBJECTIVE OF STUDY
SCOPE OF STUDY
CHAPTER-2
COMPANY PROFILE
CHAPTER-3
RESEARCH METHODOLOGY
UNIVERSE OF STUDY
SAMPLING TECHNIQUES
PERIOD OF STUDY
LIMITATIONS OF STUDY
SCOPE FOR FURTHER STUDY
CHAPTER-4
ANALYSIS OF TOPIC
CONCLUSIONS
INFERENCES
SUGGESTIONS & RECOMMENDATIONS
CHAPTER-5
BIBLIOGRAPHY
QUESTIONNAIRE
CHAPTER-1
INTRODUCTION TO THE PROJECT
The project was given to me to study the “FACTORS AFFECTING BUYING
BEHAVIOR OF CUSTOMERS OF COLD ROLLED STEEL STRIPS/COILS IN
LUDHIANA”. So, the area of operation for me was the MARKETING
DEPARTMENT of the organization. The first task for me was to know about the
concept on which my project was based. Then I had to set criteria, on the basis of which
the above concept was valued. The data was collected for each of the parameter found
responsible in influencing the buying behavior of the customers though Marketing
Research Program.
INTRODUCTION TO CONSUMER BEHAVIOUR
The Business market is comprised of organizations that in some form are involved in the
manufacturing, distribution or support of products or services sold or otherwise provided
to other organizations. The amount of purchasing undertaken in the business market
easily dwarfs the total spending by consumers. Because the business market is so large, it
draws the interest of millions of companies worldwide that market exclusively to
business customers. For these marketers understanding how businesses make purchase
decision is critical to their organization’s marketing efforts. In some ways understanding
the business market is not as complicated as understanding the consumer market. For
example, in certain business market, purchase decision hinge on the outcome of a bidding
process between competitors offering similar products and services. Thus unlike
consumer markets, where building a recognizable brand is very important, for many
purchase situations in the business market this not the case.
However, in many other ways business buying is much more complicated. For instance,
the demand by business for products and services is affected by consumer purchases
(called derived demand) and because so many organizations may have a part in creating
consumer purchases, a small swing in consumer demand can create big changes in
business purchasing. Automobile purchases are a good example. If consumer demand for
cars increases many companies connected with the automobile industry will also see
demand for their product and services increase. Under these condition companies will
ratchet up their operations to ensure demand is met, which invariably will lead to new
purchases by a large number of companies. In fact, it is conceivable that an increase of
just one or two percent for consumer demand can increase business demand for products
and services by five or more percent. Unfortunately, the opposite is true if demand
declines. Trying to predict these swings requires businesses to not only understand their
immediate customers but also the end user, which as we will discuss, may be will down
the supply chain from where the business operates.
WHO MAKES UP THE BUSINESS MARKET?
There are millions of organizations worldwide selling their products and services to other
organizations. They operate in many industries and range in size from huge multinational
companies with thousands of employees to one-person small businesses. With such a
large number of originations and industries contained within the business market, a
marketer can obtain a better picture of who is involved by looking at popular business
classification systems set up by international governments, such as the North American
Industrial Classification system (NAICS), which covers Canada, Mexico and the United
States and the International Standard Industrial Classifications (ISIC), which is widely
used in Europe. These reports provide descriptions of hundreds of industry classification.
Supply Chain Members
The supply chain consists of mostly for-profit companies engaged in activities involving
product creation and delivery. Essentially the chain represents major steps needed to
manufacture a product that will eventually be sold as a final product. Each member of the
supply chain purchases products and services enabling them to carry out its business
objectives.
When making purchase decisions supply chain members may be motivated by such
factors as:
Product cost
Return on investment
Assurance of consistent supply
Reciprocity with supplying firm
An example of purchasing occurring in the supply chain includes:
Manufacturing and Plant equipment
Information Technology
Offices Supplies
Professional Business Services, etc.
Business User Markets
Besides selling final products and services to supply chain companies, several additional
User markets also make purchases either for their own consumption or they buy with the
intention of redistributing to others. In these purchase situations the buyer generally does
not radically change the product from it’s from when it was purchased from a products
manufacture.
BUSINESS MARKET V/S CONSUMER MARKET?
For marketers, the selling environment of business markets present uniquely different
circumstances when compared to selling to consumers. At the beginning of this tutorial
we saw two ways in which consumer and business markets differ:
1) Business markets are more likely to be price driven than brand driven, and
2) Demand in business markets tend to be more volatile than consumer markets.
However, the two markets are dissimilar in other ways requiring marketers to take a
different approach when selling to business customers than to consumers. These
differences include:
How decisions are made.
Existence of experienced purchasers.
Time needed to make buying decision.
Size of purchases.
Number of buyers.
Type of promotional effort needed to reach buyer.
How Decision Are Made
In the consumer market a very large percentage of purchase decisions are made by a
single person. There are situations in which multiple people may be involved in a
consumer purchase decision, such as a child influencing a parent to choose a certain
brand of cereal or a husband and wife deciding together to buy a house, but most of the
time purchases are individual decisions. The business market is significantly different.
While single person purchasing is not unusual, especially within a small company, a
significant percentage of business buying, especially within larger organizations, requires
of many. In the marketing literature those associated with the purchase decision are
known to be part of a Buying Centre, which consists of individuals within an
organization that perform one or more of the following roles:
Buyer – Buyer is responsible for dealing with suppliers and placing orders (e.g.,
purchasing Agent).
Decider – Decider has the power to make the final purchase decision. (e.g.,
C.E.O).
Influencer – has the ability to affect what is ordered such as setting order