RELATIONSHIP BETWEEN CUSTOMER SATISFACTION AND

LOYALTY AMONG PASSENGER CAR USERS

A THESIS

Submitted by

R.SRIVATS

in partial fulfillment for the award of the degree

of

DOCTOR OF PHILOSOPHY

Department of Management Studies

FACULTY OF HUMANITIES & SCIENCE

Dr.M.G.R
EDUCATIONAL AND RESEARCH INSTITUTE
UNIVERSITY
(u/s 3 of the UGC Act 1956)
CHENNAI-600 095

FEBRUARY 2013
 2

DECLARATION BY CANDIDATE

I hereby declare that the Research entitled “Relationship between Customer Satisfaction
and Loyalty among Passenger Car Users”, submitted by me to Dr.MGR Educational and
Research Institute, University for the award of Doctor of Philosophy in Management, is a
record of original work done by me under the guidance of Dr.R.K.Gopal. This study has not
previously formed the basis for award of any Degree, Diploma, Associateship, Fellowship or
other similar titles.
 3

BONAFIDE CERTIFICATE

Certified that this Thesis entitled “Relationship between Customer Satisfaction and

Loyalty among Passenger Car Users” is the bonafide work of Mr.R.Srivats who had

carried out the research under my supervision and devoid of any plagiarism to the best of my

knowledge. Certified further, that to the best of my knowledge, the work reported herein does

not form part of any other thesis or dissertation on the basis of which a degree or award was

conferred on an earlier occasion on this or any other scholar. I also certify that the veracity of

the candidate’s declaration related the thesis.

Signature of the Supervisor

Dr.R.K.GOPAL
Research Supervisor
Professor and Director
Department of Management Studies
CMR Institute of Technology
Bangalore
 4

ABSTRACT

There is a considerable talk about India becoming a passenger car manufacturing hub

by 2015. Today the passenger car Industry is becoming highly competitive because of the

Liberalization, Privatization and Globalization, which has enabled the global players

dominate their entry into the Indian market, and resulting in a highly competitive scenario in

the passenger car industry. Currently 13 major players operate in the passenger car industry.

Despite a highly competitive situation, the market is still dominated by major brands such as

Maruti, Hyundai, Tata, and General Motors (Chevrolet). The growth curve of Indian

automobile industry has been on and upswing for the past few years. It is the fourth largest

passenger car manufacturer in India and is 25th fastest growing car market in the globe.

The passenger car industry has to focus their strategies on designing their cars

towards the end user/ customer needs so as to enhance their satisfaction, thereby building the

loyalty of the passenger car users. Further customer satisfaction is the extent to which a

product’s perceived performance matches buyer’s expectations. If the product’s performance

falls short of expectations, the customer is dissatisfied. If it matches expectations, the

customer is satisfied. If it exceeds the expectations, the customer is highly satisfied or leads

to delight.

Thus the marketing companies, in order to be successful must go out of the way to

keep their customers satisfied and delighted. Hence to succeed in the business and to compete

effectively, the firms must build long lasting relations with customers and also aim to create
 5

superior value. Loyalty comes out of satisfaction and loyal customers are likely to patronize

the company’s products and services for a longer period of time. Therefore in order to attract

customers and retain them, an organization should constantly seek ways to deliver superior

customer value and satisfaction.

This research is an attempt to understand the Relationship between customer

satisfaction and loyalty among the passenger car users and is an empirical study conducted in

Bangalore city. It also further aims to understand the relationship between gender and loyalty,

the dimensions of customer satisfaction such as purchase process, after sales service, vehicle

performance and perceived value, perceived value before purchase and loyalty, and also to

develop a model for customer satisfaction. A survey of passenger car users based in

Bangalore for the four major brands such as Maruti, Hyundai, Chevrolet and Tata Nano was

undertaken. Further we have used statistical Techniques like Student’s T Test, Paired Sample

T Test, Correlation, Multiple Regression and structural equation model to test the relationship

among the different dimensions of customer satisfaction. The outcome of this research helps

the automobile manufacturer and also the dealer to formulate their strategies thereby to

enhance customer satisfaction by building long term relationship.

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ACKNOWLEDGEMENT

A study of this nature is not possible without direct and indirect help of many people. My

heartfelt sincere thanks to my research guide Dr.R.K.Gopal, Professor and Director,

C M R Institute of Technology, Bangalore. His expertise and insights inspired to undertake a

study of this magnitude. I take this opportunity to express my gratitude for his valuable

guidance and support.

I express my sincere thanks to Dr.Kaliaperumal, Dean-Purchase, Dr.MGR Educational and

Research Institute University, Chennai-95 for his valuable support. I am deeply indebted to

Dr.Ramalingam, Professor& Head, Department of Management Studies, Dr.MGR

Educational and Research Institute University, for his suggestions and support extended

during the tenure of my research work.

I thank the management of Amity Global Business School for their support rendered in my

research. I would like to express my sincere thanks to Dr.T.R.Venkatesh, Director General,

Prof.S.Murali, Dean, Amity Global Business School, for their support and advice. I thank

my other colleagues at AGBS, Bangalore for the support extended.

I would like to thank the Director of RVIM, Dr.T.V.Raju for his encouragement and support

during my tenure at RVIM.

I express my deep gratitude to my parents, my wife, friends and colleagues who have been a

constant source of support to enable me to achieve success in life. I thank all the author

researchers and other contributors in the field of my research whose work I have referred to

in my study.

vi (R.SRIVATS)
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TABLE OF CONTENTS

Chapter TITLE Page

No. No
Abstract iv
List of Tables xiv
List of figures xix
Abbreviation xx
1 INTRODUCTION-CUSTOMER SATISFACTION AND 1
LOYALTY
1.0 Overview about Buyer Behaviour 2
1.1 Customers (market) 3
1.2 The liberalized generation of consumers of today 3
1.3 Characteristics of youth in liberalized Economy 4
1.3.1 Scope and challenges of customer oriented markets 4
1.3.1.1 Market Orientation 4
1.3.2 Customer oriented markets 5
1.3.3 Challenges of customer oriented markets 5
1.4 Customer satisfaction 5
1.4.1 Factors influencing customer satisfaction 7
1.4.2 Consequence/effects of customer 7
satisfaction and dissatisfaction
1.4.3 Loyalty 8
1.4.4 Relationship between customer satisfaction, 9
Customer loyalty & retention
1.4.5 Customer satisfaction and loyalty 10
1.5 Purchase Process 10
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1.5.1 After sales service 12

1.5.2 Perceived Value 12
1.6 Indian Automobile Industry: An Overview 13
1.6.1 Advent of cars in India 18
1.6.2 Indian Passenger car industry 18
1.6.3 Current scenario in passenger car industry 20
1.6.4 Competitive forces in Indian Passenger car market 20
1.6.4.1 Critical issues and future trends, 20
Threat from the new players
1.6.4.2 Market strength of consumers is on the Increase 21
1.6.4.3 Threat from substitutes 21
1.7 Growth and future prospects 22
1.7.1 The important Aspects to be taken into consideration 23
by India to become a global automotive production hub
1.7.2 Small car segmentation 24
1.8 Brand of cars considered for the study 24
1.8.1 Maruti Udyog Limited 25
1.8.2 Hyundai Motor India Limited 26
1.8.3 General Motors 27
1.8.4 Tata Motors 27
2 LITERATURE REVIEW 29
2.1 Introduction 30
2.2 Buying Behaviour with special reference to car purchase 30
2.3 Customer Expectations 41
2.4 Customer satisfaction and loyalty 45
3 RESEARCH DESIGN 71
3.1 Introduction to research problem 72
3.1.1 Customer satisfaction and customer loyalty 73
3.2 Statement of problem 75
3.2.1 Research gaps identified 76
3.3 Objectives of the research study 77
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3.3.1 Scope of the study 77

3.3.2 The significance of the Research 77
3.3.3 Key variables considered 78
3.4 Hypothesis 79
3.4.1 Operational definition of small cars 84
3.4.2 Geographical area to be covered 84
3.4.3 Reference period 84
3.4.4 Methodology 85
3.5 Exploratory study 85
3.5.1 Descriptive study 85
3.5.2 Type of survey used 85
3.5.3 Population 86
3.5.4 Frame of reference 86
3.5.5 Population size 86
3.6 Estimation of sample size 87
3.6.1 Sampling procedure 90
3.6.2 Tools for data collection 90
3.6.3 Measurement scales used 91
3.6.4 Questionnaire development 91
3.6.5 Pilot study 93
3.6.6 Validity measures from pilot study 93
3.7 Reliability Measures 94
3.7.1 Primary data collection plan 94
3.7.2 Secondary data collection plan 95
3.7.3 Plan of analysis 95
3.7.4 Descriptive statistics 95
3.7.5 Limitations 96
4 RELATIONSHIP BETWEEN GENDER AND LOYALTY 97
4.1 Analysis 98
4.2 Method 98
4.2.1 Coding 98
4.2.2 Missing data 98
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4.2.3 Hypothesis testing 98

4.2.4 Introduction 99
4.3 Part-I Descriptive analysis on sample 99
4.3.1 Study the effect of demographic variables 100
4.3.2 Frequency distributions 100
4.3.3 Discussions 101
4.3.4 Discussions 102
4.4 Analysis of descriptive statistics for the 104
variable loyalty
4.4.1 Reliability analysis - Scale (Alpha) for the variable of 105
customer satisfaction - loyalty
4.4.2 Analysis of Cronbach alpha values for 106
the dimensions of customer satisfaction-loyalty
4.4.3 T-Test 106
4.5 Analysis of the first objective 107
4.5.1 Testing of hypothesis I (a) 108
4.5.2 Testing of sub Hypothesis I (b) 110
4.6 Inference 124
5 RELATIONSHIP AMONG VARIOUS DIMENSIONS OF 125
CUSTOMER SATISFACTION
5.1 Analysis of descriptive statistics for 127
variables of purchase process and after sales service
5.1.1 Analysis of descriptive statistics for the 129
variables vehicle performance and perceived
value before purchase.
5.1.2 Analysis and Discussion of Combined 131
Mean, SD, Kurtosis, Skewness, Variance
5.2 Reliability analysis for the variable 133
Purchase process
5.2.1 Reliability analysis for the variable 134
after sales service
5.2.2 Reliability analysis for the variable 135
vehicle performance
 11

5.2.3 Reliability analysis for the variable 136

Perceived value before purchase.
5.2.4 Analysis of Cronbach alpha values for the 137
dimensions of customer satisfaction-Vehicle performance
and perceived value.
5.2.5 Analysis of Cronbach alpha values for 137
the dimension of customer satisfaction-perceived
value before purchase.
5.3 Reliability analysis 137
5.3.1 Cronbach alpha values for all the dimensions 138
of customer satisfaction.
5.3.2 Paired Sample T Test 139
5.4 Part-II-Analysis of second objective 139
5.4.1 Analysis of relationship between dimensions 140
of customer satisfaction.
5.4.2 Testing of Hypothesis II(a) 140
5.4.3 Testing of sub Hypothesis II(b) 145
5.5 Correlation 149
5.5.1 Testing of Hypothesis II(c) 150
5.6 Inference 152
6 MODEL FOR LOYALTY AND DIMENSIONS OF 153
CUSTOMER SATISFACTION
6.1 To derive a model for loyalty and 154
dimensions of customer satisfaction
using regression model and structural
equation model
6.2 Multiple regression 155
6.2.1 Testing of hypothesis using regression 156
6.2.2 Testing of Hypothesis III(a) 157
6.3 Forward analysis of regression 159
6.3.1 Backward regression analysis of 161
dimensions of customer satisfaction.
6.4 Inference – Regression Model 163
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6.4.1 Key terms in structural equation model 163

6.5 Structural equation model on dimensions 165
of customer satisfaction.
6.5.1 The structural equation model variables. 165
6.5.2 Results and discussions 167
6.5.3 Model fit 168
6.6 Overall inference Objective III 169
7 SUMMARY OF FINDINGS, SUGGESTIONS, 170
CONCLUSIONS AND SCOPE FOR FURTHER STUDIES
7.1 Relationship between loyalty and gender 171
with reference to Brand Maruti
7.1.1 Relationship between loyalty and gender 171
with reference to Brand Hyundai.
7.1.2 Relationship between loyalty and gender 172
with reference to Brand Chevrolet
7.1.3 Relationship between loyalty and gender 172
with reference to Brand Tata Nano.
7.2 Relationship between sub dimensions of loyalty 173
and gender with reference to Brand Maruti
7.2.1 Relationship between sub dimensions of loyalty 174
and gender with reference to Brand Hyundai.
7.2.2 Relationship between sub dimensions of loyalty 175
and gender with reference to Brand Chevrolet.
7.2.3 Relationship between sub dimensions of loyalty 175
and gender with reference to Brand Tata Nano
7.2.4 Relationship between dimensions of customer satisfaction. 176
7.3 Relationship between vehicle performance and perceived 176
value and perceived value before purchase for the Brand Maruti
7.3.1 Relationship between vehicle performance and perceived value 176
and perceived value before purchase for the Brand Hyundai.
7.3.2 Relationship between vehicle performance and perceived value 177
and perceived value before purchase for the Brand Chevrolet.
7.3.3 Relationship between vehicle performance and perceived value 177
 13

and perceived value before purchase for the Brand Tata Nano.
7.4 Relationship between Purchase process and after 178
sales service with respect to Brand Maruti.
7.4.1 Relationship between Purchase process and 178
after sales service with respect to brand Hyundai.
7.4.2 Relationship between Purchase process and 179
after sales service with respect to Brand Chevrolet.
7.4.3 Relationship between Purchase process and 179
after sales service with respect to Brand Tata Nano.
7.4.4 Relationship between dimensions of customer satisfaction. 179
7.5 Model for dimensions of customer satisfaction. 180
7.5.1 Relationship between loyalty and other 180
dimensions of customer satisfaction.
7.5.2 Relationship between loyalty and other 181
dimensions of customer satisfaction.
7.5.3 Descriptive statistics on variable loyalty 181
7.6 Conclusions 182
7.7 Suggestions 183
7.8 Scope for further studies. 185
APPENDICES 186

Appendix A Item for Item Analysis 186

Appendix B SPSS Output of Primary Tables 189
Appendix C Final Questionnaire
AC 1 Questionnaire for Customers

REFERENCES

LIST OF PUBLICATIONS
 14

LIST OF TABLES

Table TITLE Page

No No

1.1 Evolution of Automobile Industry 17

2.1 Literature review of buying behaviour 62
2.2 Literature review of customer expectations 65
2.3 Literature review of customer satisfaction and loyalty 66
3.1 Hypothesis to be tested 82
3.2 Objectives and hypothesis and 83
relevant statistical test used
3.3 Classification of sample through quota sampling 87
3.4 Indicating region wise classification of customers 90
surveyed for small passenger cars in Bangalore city
3.5 Variables and codes 92
3.6 Multiple regression analysis variables for hypothesis 95
4.1 Brand wise Demographic profiles of customers 101
4.2 Demographic profiles of the number 102
of years of ownership of the present car and the number
of years once the customer changes his car
4.3 Mean and S.D for the Dimension of Customer 103
satisfaction- Loyalty

4.4 Reliability analysis for loyalty 105

 15

4.5 Independent Sample T Test for Hypothesis I (a) 108

of the Brand Maruti
4.6 Independent Sample T Test for Hypothesis I (a) 109
of the Brand Hyundai
4.7 Independent Sample T Test for Hypothesis I (a) 109
of the Brand Chevrolet
4.8 Independent Sample T Test for Hypothesis I (a) 110
of the Brand Tata Nano.
4.9 Independent Sample T Test for Sub Dimensions 111
of Loyalty and Gender for Brand Maruti with
regard to sub Hypothesis I (b)
4.10 Independent Sample T Test for Sub Dimensions of 114
Loyalty and Gender for Brand Hyundai
with regard to sub Hypothesis I (b)
4.11 Independent Sample T Test for Sub Dimensions of 118
Loyalty and Gender for Brand Chevrolet
with regard to sub Hypothesis I (b)
4.12 Independent Sample T Test for Sub Dimensions of 121
Loyalty and Gender for Brand Tata Nano
with regard to sub Hypothesis I (b)
5.1 Mean and S.D of variables for the dimensions 126
of customer satisfaction-purchase process
5.2 Mean and S.D of variables for the dimensions 127
of customer satisfaction-after sales service
5.3 Mean and S.D for the variable-vehicle performance. 128
5.4 Mean and S.D for the variables perceived 129
value before purchase.
5.5 Overall Descriptive statistics for the main variables. 131
5.6 Reliability analysis for Purchase Process 133
5.7 Reliability analysis for after sales service. 134
5.8 Reliability analysis for vehicle performance. 135
5.9 Reliability analysis for perceived value before purchase. 136
 16

5.10 Cronbach alpha value for all the dimensions 138

of customer satisfaction.
5.11 Paired sample T test between Perceived value before 141
purchase and vehicle performance for Brand Maruti
for Hypothesis II (a)
5.12 Paired sample T test between Perceived value before 142
purchase and vehicle performance for
Brand Hyundai for Hypothesis II (a)
5.13 Paired sample T test between Perceived 143
value before purchase and vehicle performance
for Brand Chevrolet for Hypothesis II (a)
5.14 Paired sample T test between Perceived value 144
before purchase and vehicle performance for
Brand Tata Nano for Hypothesis II (a)
5.15 Paired sample T test between Purchase Process 145
and After sales service for the Brand Maruti for Hypothesis II (b)
5.16 Paired sample T test between Purchase Process and 146
After sales service for the Brand Hyundai for Hypothesis II (b)
5.17 Paired sample T test between Purchase Process and 147
After sales service for the Brand Chevrolet for Hypothesis II (b)
5.18 Paired sample T test between Purchase Process and 148
After sales service for the Brand Tata Nano for Hypothesis II (b)
5.19 Correlation coefficient between Dimensions 150
of customer satisfaction.
6.1 Summary of Forward and Backward method of 158
multiple Regression Model for the Hypothesis III (objective 3)
6.2 Variables in the multiple forward regression analysis 159
6.3 Variables in the multiple Backward Regression analysis. 161

6.4 Variables in the Structural Equation Model Analysis 166

6.5 Model Fit Summary 168
AB-1 Independent Sample T Test for Loyalty and 189
Gender of Brand Maruti for Testing Hypothesis I.
 17

AB-2 Independent Sample T Test for Loyalty and 190

Gender of Brand Hyundai for Testing Hypothesis I
AB-3 Independent Sample T Test for Loyalty and 190
Gender of Brand Chevrolet for Testing Hypothesis I
AB-4 Independent Sample T Test for Loyalty and 191
Gender of Brand Tata Nano for Testing Hypothesis I
AB-5 Independent Sample T Test for Sub 192
Dimensions of Loyalty and Gender Brand Maruti
AB-6 AB-6 Indicating Independent Sample T Test for 193
Sub Dimensions of Loyalty and Gender Brand Hyundai
AB-7 AB-7 Independent SampleT Test for Sub 194
Dimensions of Loyalty and Gender Brand Chevrolet
AB-8 AB-8 Independent Sample T Test for Sub Dimensions 195
of Loyalty and Gender Brand Tata Nano for Hypothesis I
AB-9 Paired Sample T Test between Perceived value 196
before purchase and Vehicle performance and perceived
value for the brand Maruti for Testing Hypothesis II
AB-10 Paired Sample T Test between Perceived 197
value before purchase and Vehicle performance and
perceived value for the brand Hyundai for Testing Hypothesis II
AB-11 Paired Sample T Test between Perceived value 198
before purchase and Vehicle performance and perceived
value for the brand Chevrolet for Testing Hypothesis II
AB-12 Paired Sample T Test between Perceived value 199
before purchase and Vehicle performance and
perceived value for the brand Tata Nano for Testing Hypothesis II
AB-13 Indicating Paired Sample T Test between Purchase 199
Process and After sales service for the brand
Maruti for Testing Hypothesis II
AB-14 Paired Sample T Test between Purchase 200
Process and After sales service for the
brand Hyundai for Testing Hypothesis II
 18

AB-15 Paired Sample T Test between Purchase 200

Process and After sales service for the
brand Chevrolet for Testing Hypothesis II
AB-16 Paired Sample T Test between Purchase 201
Process and After sales service for the
brand Tata Nano for Testing Hypothesis II.

AB-17 Correlation Analysis Outputs (significance, N value) 201

For Hypothesis II (customers/passenger car user
data Objective 2)
AB-18 Regression-Variables Forward Regression Method 202
AB-19 Model Summary for forward Multiple Regression 202
AB-20 ANOVA for forward Multiple Regression 203
for Hypothesis-III
AB-21 Coefficients of Variables for forward 203
Multiple Regression for Hypothesis-III
AB-22 Excluded Variables for forward 204
Multiple Regression for Hypothesis III
AB-23 Regression variables Backward Regression Method (b) 205
AB-24 Model Summary for Backward 205
Multiple Regression
AB-25 ANOVA for Backward Multiple 206
Regression for Hypothesis-III
AB-26 Coefficients of Variables for 207
Backward Multiple Regression
for Hypothesis-III
AB-27 Excluded Variables for Backward 208
Multiple Regression for Hypothesis-III
AB- Structural equation Model-Outputs 209-213
28-49
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LIST OF FIGURES

FIG. NO TITLE PAGE NO

1.1 Share of major passenger car players 17
3.1 Linkage between, loyalty sub dimensions and 80
gender for Hypothesis (I)
3.2 Linkage between dimensions of customer 80
satisfaction for Hypothesis II (a and b)
3.3 Relationship between dimensions of customer 81
satisfaction for Hypothesis II (c)
6.1 Structural Equation Model 166
7.1 Relationship between customer satisfaction and 184
loyalty
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ABBREVIATION

CODE DESCRIPTION
PP Purchase Process
Af SA SER After sales service
VPPV Vehicle performance and perceived
value
PVBP Perceived Value before Purchase
LOY Loyalty
SEM Structural equation model
BUY BEH Buyer Behaviour
CS Customer Satisfaction
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CHAPTER 1

INTRODUCTION-CUSTOMER SATISFACTION AND LOYALTY

Contents Page No
------------------------------------------------------------------------------------------
1.0 Overview of buyer behaviour 2
1.1 Customers (markets) 3
1.2 The Liberalized generation of consumers today 3
1.3 Characteristics of youth in liberalized economy 4
1.4 Customer satisfaction 5
1.5 Purchase Process 10
1.6 Indian Automobile Industry – An overview 13
1.7 Growth and future prospects 22
1.8 Brands of cars considered for the study 24
------------------------------------------------------------------------------------------

Overview of buyer behavior is dwelt upon in detail with respect to the Indian context
with prime focus on the customer market. Further the present generation of consumers and
their purchase behaviour is taken into consideration with specific reference to youth in the
liberalized economy. Customer satisfaction is the central theme of the entire marketing
context. Hence it is briefly discussed with reference to the key variables taken into
consideration such as purchase process, after sales service and perceived value. The growth
of Indian automobile industry is also discussed taking into consideration its growth and future
prospects. Finally the chapter concludes with the brands of cars considered for the study

CHAPTER 1
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INTRODUCTION – CUSTOMER SATISFACTION AND LOYALTY

1.0 Overview about Buyer Behaviour:

Predicting individual human behaviour is a complex phenomenon. It is seldom easy,

and sometimes impossible, to generalize about human behaviour; each individual is a unique
combination of personality, perception, attitude, behaviour, and environment. Predicting such
a varied behaviour of people is a difficult and complicated task, filled with uncertainties,
surprises and is governed by risks. However marketers must effectively predict human
behaviour, which enables them to yield vast fortunes by understanding their buying patterns
and designing products to suit their needs and wants and thereby gain customer satisfaction,
while inaccurate/wrong predictions can lead to heavy losses. Today, business world is highly
competitive and centers on customers. A successful business always recognizes that the

“Customer is the king
. This becomes all the more important in knowing why and how
people consume products. This helps marketers to understand how to improve/modify
existing products, what type of products is needed in the market place, or how to attract
consumers to buy their products. The era of LPG (liberalization, privatization and
globalization) has brought about a vast change in lifestyle of people and also in society as
such.

The successful management of a firm requires the effective usage of modern

marketing concept, which often considers the customers as their focal point of the business
activity. Hence it becomes very important for the firm to understand the customer needs and
thereby evolve its marketing strategy. The buyer or consumer continues to be an enigma -
sometimes responding the way the marketer wants and on some occasions just refusing to
buy the product from the same marketer. For this reason, the seller/marketer must make
constant effort to capture the buyer’s mind, which is termed as Black Box in order to secure
their attention and create an image of the product, which should be long lasting. Therefore,
the study of consumer behaviour also includes an analysis of factors that influence purchase
decisions and product use.
 23

Thus understanding how consumers are influenced in making purchase decisions can
help marketing managers in several ways. For instance, if a manager of an automobile firm
identifies through research that fuel/mileage is the most essential attribute of a car for a
certain target market, he can redesign the product in order to meet that particular criterion and
also to gain long-term customer satisfaction.

1.1 Customers (Market):

The prime focus area of marketing will always remain the customer. Hence all the
activities in the area of relationship marketing will be focused towards acquiring new
customers and also simultaneously, emphasizing more on building long term customer
relationships.

1.2 The Liberalized Generation of Consumers of Today

The Consumer researchers have opined that the Indian market has been flooded by
global players, thereby enabling the buyers to change their behaviour from their conventional
wisdom to a modern thinking approach. Now-a-days, a large number of Indian buyers have
emerged as value sensitive buyers rather than being price sensitive. Further, they also expect
the product/service to provide the value they expect. Frequent foreign travel has contributed
to new perception and change in the buyer behavior. The fear that liberalization would mean
arrival of western intellectual imperialism was unfounded .The study by marketers revealed
the Indian youth is strongly espousing on Indian morals and attitude. They would exhibit
ethnocentrism to a greater extent. Even though there is a ready market for Valentine Day
cards and gifts, the traditional Indian festivals such as Raksha Bandhan, Karva Chauthi are
celebrated with gaiety and enthusiasm.
In the past, Indian consumers were very loyal and refused to change their brand.
However today no marketer can assume brand loyalty for granted. The present generation is
conditioned to a life of comfort and luxury thanks to a doting upbringing.
Today’s generation is willing to take more risks and try experimenting and innovating
with new ideas and products. For instance, with the rise in the disposable income of
consumers, they do not mind acquiring loans/credit facilities from banks and other financial
 24

institutions in order to buy a product/service. The market has exploded with a number of
brands in various product categories. There are many consumers willing to buy everything,
including house, car and other appliances on credit.
Post liberalization has brought about many socio-economic changes, rise in
disposable income in the hands of consumers, increase in the number of educated and
working women and rise in the number of nuclear families. This has affected the psyche of
the consumer, who has become more indulgent with greater focus on technology, willingness
to acquire different product and services to satisfy needs.

1.3 Characteristics of Youth in Liberalized Economy

a) They aspire to have products, which satisfy their material gains and comfort.
b) The youths are greatly exposed to the media and have access to various information
about any product/service.
c) They are more assertive with respect to their purchase decisions.
d) The change in the attitudes, values, lifestyles and aspirations of Indian youths have
enabled them to opt for brands that relates to their attitudes.
Thus from the Research, it is indicative that there are 47% in India, 1 billion
population are in the category of youth between age group of 18-25. The number of teenagers
is 160 million. Further by 2015, India’s youth will constitute 55 percent of the population.
(Source: Census India 2010).

1.3.1 Scope and challenges of customer oriented markets

1.3.1.1 Market Orientation:
Market Orientation is a shared set of values, beliefs and behavior that focuses on
putting the customer’s priorities in the first place as the most important ingredient in the
market place. (Deshpande, 1999)
Firstly, the difficulty with developing this orientation in practice is that employees are
not likely to be willing to adopt these values, beliefs, behavior without a specific structure
and system to encourage such changes.
Baker Simpson, and Siguaw (1999) and Siguaw Simpson and Baker (1998), report
that the relationship between external customer and external suppliers is stronger when there
is a match between the degree of market orientation of both consumers and suppliers
 25

Steinman, Deshpande and Farely (2000) inform of a gap between external and
internal supplier perceptions of each others market orientation, but that their perceptions gap
lessen with lengthier and stronger relationships.
Research generally indicates that the stronger the relationship between customers and
suppliers, the stronger will be the performance of both supplier and customers (Canon and
Homburg, 2001)

1.3.2 Customer oriented markets, Challenges of customer oriented markets

This market will represent all the people or the firms that buy goods and services for
the organization. They may include the end consumers /users or even intermediaries. A very
powerful element in this relationship marketing is associated with the customer service
offered in customers oriented markets. Today’s organizations have realized that to operate in
a highly competitive environment, an effective means of differentiating is through providing
a value added customer service.
Marketers catering to the needs of the rapidly growing cosmetics market segments are
working on innovative ways to build relationship as early as possible in order to gain a
competitive advantage over rivals.

1.3.3 Challenges of customer oriented markets

Along with increasing competition there has been increase in consumer/customer
expectations for personalized service makings. Hence it has become more imperative for
organizations to focus on Relationship Marketing and customized solutions not only to
sustain but also to enhance their customer base.

1.4 Customer satisfaction

The degree to which customer’s expectations of a product or service is met or
exceeded. Corporate and individual customers may have differing reasons for purchasing a
product or service and, therefore, any measurement of satisfaction will have essentially take
into account such differences. The quality of after sales service can also be a crucial factor in
influencing purchasing decision. Many companies are striving, not just for customer
satisfaction, but for customer delight, which is one step ahead of customer satisfaction.
 26

Definition: The degree of satisfaction provided by the goods or services of a company as

measured by the number of repetitive purchases made by existing customers.

Kotler (2000) defined satisfaction as a person’s feeling of pleasure or disappointment

resulting from comparing a product’s perceived performance (or outcome) in relation to
his/her expectations.

Hoyer and MacInnis (2001) indicate that satisfaction can be associated with feelings
of happiness, acceptance, relief, and delight.

Mahatma Gandhi emphasized the importance of customers to organization thus:

“A customer is the most important visitor on our premises,
He is not dependent on us.
We are dependent on him.
He is not an interruption on our work.
He is the purpose of it.
He is not an outsider on our business.
He is a part of it.
We are not doing him a favor by serving him.
S He is doing us a favor by giving us the opportunity to do so.”

Thus the means to build long lasting relations with customers is to create superior customer
value and customer satisfaction. Loyalty arises out of satisfaction and loyal customers are
likely to patronize a company’s products or services for a sustainable longer period of time.
Therefore, to attract and retain customers, an organization should constantly seek ways to
deliver superior customer value and enhance the satisfaction levels.

1.4.1 The following factors influence customer satisfaction.

Value addition
 27

Core product/services and their performance

Service quality or quality of service provided

Competitive pricing

Perceived benefits/ value.

After sales service or efficiency in service

External factors

Perceived factors.

Courteous/ friendly employees.

Successful companies involved in marketing activities go a long way and also

sometimes out of the way to keep their customers satisfied or delighted. They strive to match
customer’s expectations or needs with the company’s performance. Some companies aim to
create delight in customers by promising only what they can deliver, then delivering more
than they promise, rather than promising more and under delivering. Customer Satisfaction
Index is used by marketers to track satisfaction levels.

(La Barbera and Mazursky 1983) state that in order to focus on customer
satisfaction the organizations must be able to identify the customer’s needs, wants and satisfy
them.
Kotler (2000) highlights that Need is a state of felt Deprivation, while wants refers to
the form taken by the human needs and also shaped by personality of individual and culture.

1.4.2 Consequence/ effects of customer satisfaction and Dissatisfaction

The consequence of the customer being not satisfied can sometimes be severe.
According to Hoye (2001), dissatisfied customers can decide:

Not to purchase/discontinue the goods/product or service.

To approach the company or a third party and complain to them. Sometimes they may
even return the goods or the products purchased.

To engage in negative publicity or word of mouth among their friends/peers/relatives.

 28

Therefore, customer satisfaction becomes all the more important as it influences

repurchase intentions, whereas dissatisfaction has been seen as a primary reason for customer
defection or discontinuation of purchase.
Thus for every business to be successful, they have to be customer focused, which consists of
following aspects:
 Customers are the prime focus of all activities.

 Customers must find it easy to do business with the organization.

 Systems and structures designed within the organization must ensure customer
friendliness.

 The focus of all business plans and activities are primarily to capture the customer’s
attention.

1.4.3 Loyalty:

Sheth and Mittal (2005) define customer loyalty as customer commitment to a

brand, product, store or a supplier, based on a strong favourable attitude and is manifested in
repetitive purchase or patronage. The same is depicted in the following diagram

Behaviour
Strong Weak
Strong
Satisfied loyalty Happy latent loyalty
Attitude
Spurious loyalty No loyalty
Weak
(Source: Customer Behaviour, J.N.Mittal, B 2003, pp 404)

Many companies offer loyalty programmes or frequency marketing programs that

periodically rewards customers who buy frequently or use the service frequently. Such
loyalty programs will enable customers to continuously patronize the product or service of a
company, thereby building a long term relationship. For example, frequent flier programmes
 29

are offered by all the leading airlines, supermarkets offers patronage membership discounts;
similarly popular hotels give room upgrades to their loyal customers.

1.4.4 The relationship between customer satisfaction, customer loyalty and retention
Bansal and Gupta (2001) found that “Building customer loyalty is not a chance any
longer with businesses; it is the only way and the mantra of sustaining and building
competitive advantage”. The objective of marketing firms is to build loyalty with important
(key) customers, which is the main part of core marketing strategies. The strategic
imperatives/initiatives for building loyal customer base are as follows:
• Focus on important key customers.

• Anticipate customer’s needs and respond to them before the competition sets in.

• Generate high level of customer satisfaction with every interaction proactively.

• Follow-up with customers to tackle their queries after the product/services purchase.

Sivadass (2000) highlighted that there is an increasing expectations from customers

that firms have the ultimate objective of measuring their level of satisfaction by focusing on
effective loyalty programs. He further highlighted that for striking a healthier relationship
with customers, firm need many attributes, of which the important ones are:
 accessibility to customers.

 responsiveness and promptness in reacting to customers needs.

 knowledgeable staff to interact with customers and to provide valuable information.

 Keeping customers well informed.

 Periodical follow up with customers.

Clarke (2001) said that a business that focuses exclusively on customer satisfaction
runs the risk of becoming undifferentiated brand whose customers believe only that it meets
the minimum performance criteria for the category. Long term customer retention in
competitive markets requires both the manufacturer and the supplier to go beyond mere basic
satisfaction and look for means of establishing ties of loyalty that will help to ward off the
competitor attacks.
 30

1.4.5 Customer satisfaction and loyalty

Nigel Piercy (2002) has made an attempt to work out the possible linkage between
customer satisfaction and loyalty.
Satisfaction is viewed as an attitude of how the customer feels about an organization,
its products and services. Loyalty is behaviour which is indicative as to whether the customer
will buy the company’s product/services more than once, which in other words is known as
repetitive purchase.
It is found that customer satisfaction will be a moderate predictor of customer loyalty,
For example the users purchasing Maruti 800 are very satisfied when they drive away the car
from the showroom, but only some of them will make a repetitive purchase of the same car
next time. The other customers may either upgrade the car to a higher model of the same
manufacturer, or may shift his loyalty to other competitive brands.
Hence one has to think of distinguishing between behavioral and attitudinal loyalty (how
customers feels about organization product and services). For considering attitudinal loyalty
(measuring satisfaction intention to repurchase etc), could minimize the chance of customers
taking a bad marketing decision. Since only a small proportion of those customers who show
behavioral loyalty in reality show attitudinal loyalty as well. There are many non attitudinal
factors that affect behavioral loyalty to a great extent such as:

Feature loyalist: who give prior importance to certain features/benefits of

product/service.

Convenience loyalist: they stick to existing product/service for their own convenience.

Channel loyalist: give importance to channel of distribution.

Committed loyalist: They remain loyal towards the purchased brand.

1.5 Purchase Process

Purchase Process: The purchase process begins with the customer’s decision to buy or
purchase the product. In other words termed it is termed as purchase process or decision
making process leading to purchase decision.
 31

This process includes a series of steps such as:

 recognition of need/want i.e. perceived want

 search for relevant information
 alternatives evaluation or evaluation of alternatives
 purchase decision or decision to buy
 post purchase behaviour or experience.

The first two steps are known as pre-purchase process, the third and the fourth steps are
during purchase process, and the last step is termed as post purchase process. The buyer
behaviour of consumer involves a series of stages or activities. The process starts with the
identification or recognition of the need or want. If this need or want is not satisfied, it
becomes a drive. It follows the consumer searching for information, followed by alternative
evaluation, and a purchase decision. During the post purchase phase the consumer evaluates
the purchase and the satisfaction the product or service is likely to deliver. The following
section describes these steps in brief.
Recognition of Need or Want: the purchase process commences with the individual
beginning to feel that a certain need or desire that has arisen and is yet to be satisfied or
fulfilled. Needs may be ignited by certain internal/ external stimulus referred to as cue. The
intensity of want indicates the speed with which a person will move to fulfill the unfulfilled
want.
Search for Relevant Information: the need that has arisen has to be promptly
satisfied, when the desired product or service is easily available. The individual searching for
the information must also identify the brand/product, method of purchasing them, sources of
information etc.
Alternative evaluation: During this stage, the attributes/characteristics of the product
have to be taken into consideration. During this stage, consumers may use an evaluation
process permitting trade offs among the different alternative choices available to him/her,
Purchase Decision: After the evaluation of alternatives the buyer or the consumer
develops a like or dislike towards the product/service. This attitude enhances his intentions to
either buy the product, or acquire the product, which is known as purchase decision. Post
Purchase Behaviour: after the usage of the product, the consumer or the buyer provides
feedback of information pertaining to his attitude. If the product enhances the satisfaction of
 32

the user after the usage, it leads to enhanced brand preference and increases his satisfaction
levels.. If the product does not satisfy his expectations, he develops negative feeling leading
to increase in anxiety or doubts. This is also called cognitive dissonance.

1.5.1 After Sales Service:

Cohen and Lee (1990), Takeuchi and Quelch (1983) defined after- sales service as
those activities in which a firm engages after the customers purchase the firm’s product. It
aims at minimizing potential problems related to product use, and maximizes the value of the
consumption experience. The rapid growth of the automobile production and sales in country
after the liberalization of automobile industry has enhanced the importance of post sale
process i.e. after sales service which has become an important factor or variable taken into
consideration by the customers before they purchase a particular product. For instance when a
customer decides to purchase a brand of automobile car, the important aspect taken into
consideration by majority of customer is the after sales service rendered by the
dealer/manufacturer.
It is one of the organizational processes which a company performs considering the
growing competition and enhancing the customer satisfaction levels by providing effective
after sales service.
It is used to describe the services mostly that are rendered either by the manufacturer
or the dealer/intermediaries to the customers after the product/service has been purchased and
delivered. For example, when a customer purchases the automobile passenger car, the
services rendered to the customer comprise two sided relationship in which one side is the
automobile (selling company), other side is the dealer. Here both the service providers must
render effective service in order to enhance customer satisfaction.

1.5.2 Perceived Value: The satisfaction based on the positive difference between what is
expected by the customers and what is delivered by the firm ultimately. There are generally
two types of perceived value/ perceptions that can affect the ultimate levels of customer
satisfaction.
 33

They are as follows:

The perceptions of the consumers regarding the services received from the
manufacturer (which may be different from what the supplier organization may think
they are providing).

Expectations of customers regarding the perceived value.
For example: many of the organizations will have to manage perceptions at two levels i.e.
 Customers own perceptions regarding their needs and wants.
 The perceptions of the consumer regarding the offerings made by the service providers.
For our research study we had chosen two aspects of perceived value:

• Perceived value before purchase

• Vehicle performance and perceived value (Perceived value after purchase).
• Perceived value before purchase: This is an important aspect that is to be taken into
consideration in terms of perceptions or the expectations of the consumer in terms of
product/service performance before actually purchasing the product.
• The perceived value after purchase is the perception actually developed after the
product has been put into use. The consumer actually compares these two aspects. If he
derives positive feelings about the product, it enhances his satisfaction, which also
enhances his loyalty and makes him more loyal towards the same brand. In case the
customer is not satisfied, his loyalty tends to shift towards competitive brands.

1.6 Indian Automobile Industry - An Overview

India is emerging as one of the most attractive automobile market destination in the
globe and is poised to become a key sourcing for the automotive vehicles and also auto
components The Indian automotive sector has a presence across all vehicle segments. It has
more than 80 percent market share and also has greater volumes in the automobile sector. The
passenger car market also has 135% share. The passenger vehicle market consists of utility
vehicles and passenger cars.
Initially, the industry had few players and was protected from the global competition
till early 90s.After the government lifted the licensing, during the early 90’s i.e. after 1991,
17 new ventures have come into the Indian market. At present there are 13 manufactures of
passenger cars, 5 manufacturers of multi utility vehicles (MUVs), 9 manufacturers of
commercial vehicles, 12 of two wheelers, 4 of 3 wheelers, besides 5 manufacturers of
 34

engines. With the entry of global players, the Indian automobile sector has become highly
competitive
The growth curve of Indian automobile industry has been on an upswing for the past
few years. It is the fourth largest passenger car vehicle market in India and is 25th fastest
growing car market in the globe, with a growth of 20%. Continuing the upswing, the sector
posted impressive growth of 9%, says the economic survey 2009-10.Announcement by the
government to minimize the excise duty on small cars will enable India to grow as the largest
manufacturing hub for small or compact cars. The Indian automobile companies are moving
aggressively into other global markets. A good example is Tata Motors Ltd, and Maruti,
which have been exporting cars to other foreign markets.. Apart from the automobile brands
moving aggressively into the foreign markets there are huge foreign brands moving on the
roads of India. The Indian automobile markets will see at least 30 new launches of high end
brands in the country, spanning everything from affordable hatch bags to mid size models to
super luxury high end cars to sports utility vehicles (SUVs).Thus the Indian automobile
industry has been performing well in both domestic and international markets.

According to IBEF (India Brand Equity Foundation), India has several competitive
advantages in the automobile sector and can be explained as follows:

India has a growing qualified work force i.e. English speaking, highly skilled and trained
in designing and machining skills required by the automotive and engineering industries.

Many Indian and global players are capturing this advantage by increasingly outsourcing
activities like R & D and Product Designs to their Indian arms.

India offers a huge potential for growth opportunity for the automobile sector. Further
domestic market is large and has the potential to grow further in the future years, due to
positive demographic trends and the current low penetration level. India has nearly 23% of
the global population and is one of the most attractive consumer markets in the world today.
Income levels across population segments have been growing in India due to the boom in the
I.T Sector.
According to the National Council of Applied Economic Research (NCAER), data,
the consuming class, with an annual income of US $ 980 or above, is growing, and is
expected to constitute over 80% of the population by 2009-10. In addition, a large proportion
of the Indian population is relatively young in the age group of 20 to 39 years. This is
expected to further boost the automotive domestic market as the younger population has a
 35

higher propensity-consumption index. The rise in the income level of the Indians and the
emergence of consumer class that has higher propensity to spend, offers great opportunities
for companies across various sectors to enhance their growth. Furthermore, consumers in
India are well informed, sophisticated and more demanding due to globalization and up-
gradation in technology. Urban consumers have been especially exposed to western life styles
through frequent overseas travel. There has been an increase in number of working women in
the nuclear double income families, especially in the urban areas and other trends shaping life
styles (IBEF, 2010-11).
According to IBEF, large infrastructure development project is under way in India,
combined with favorable government policies which will enable the automotive growth in the
Indian market scenario.
The car industry in India has seen a tremendous growth potential during the recent
years and seems to be the fastest growing sector in the globe. This sector has responded with
an exponential progress in the number of new models launched in the last few years. The
craze for cars among people is growing day-by-day because of a number of global players
venturing into the Indian Market. Hence, all the car manufacturers are facing tough
competition from one another and are therefore, opting innovative ideas and strategies to
capture the market. The automotive sector is one of the core industries of the Indian
economy, whose prospect is reflective of the economic resilience of the country. Continuous
economic liberalization over the years by the government of India since 1991 has resulted in
turning India into one of the prime business destinations for many global automotive players.
The automotive sector in India is growing at around 20 per cent per annum. Automobile firms
have drastically established intermediary (dealers) throughout
India to meet the requirements and satisfaction of a variety of consumers. The scientific study
on the relationship between customer satisfaction and loyalty towards the purchase of cars
has revealed fruitful findings and recommendations, which could be used for enhancing the
products to meet the requirements of car buyers.
Automobile industry in India is an emerging sector and has a great potential to
improve over a period of time. The key players have formulated strategies to enhance their
growth as well as adding more competitive features to their firms product i.e. cars. The
increasing GDP and economical resources have augmented during the last decade resulting in
increased purchasing power or the buying power of the Indians. The car segment in India has
emerged as one of the promising sectors and has shown growth trends in terms of tremendous
 36

sales. Tata Motors has emerged as one of the key players in Indian automobile industry and
its share in commercial vehicles is 63.94%, passenger vehicles is 16.45%. Tata Motors
Limited is India’s largest automobile company, with total consolidated revenues of USD 14
billion in 2009-10. It is the leader in commercial vehicles and among the top three in
passenger vehicles.

Maruti Suzuki India Limited, a subsidiary of Suzuki Motor Corporation of Japan, one
of the India's largest passenger car companies has grabbed a share for over 55 % of the
domestic car market. Other key players in automobile segment of India have contributed
significantly. Automobile Industry in India is growing at a very high rate with more than 1
million passenger vehicle sales per annum and overall 10-15% growth annually. Now more
and more foreign manufacturers are coming to India and existing companies are coming up
with new models. India’s automotive industry is now $34 billion worth and is expected to
grow to $145 billion in another 10 years. Indian Automobile industry is the tenth largest in
the world with an annual production of approximately 2 million units. In passenger vehicle
segment, still Maruti Suzuki is still the leader with more than 50% market share followed by
Hyundai Motors with 19% and Tata Motors with 16%. Other players in this segment are
Honda Siel Cars and Ford India Pvt. Ltd, Toyota, General Motors etc. According to Society
of Indian Manufacturers (SIAM), sales of passenger vehicles segment grew by 31.34 percent
in 2010. In 2012, analysts predict that the sales momentum will continue to grow and may
achieve a growth rate of 30-35 percent in the passenger vehicle segment alone.

Despite the economic slowdown, the Indian automobile sector has shown high growth
trends. The passenger vehicle market, which constitutes around 80% of automobile sales, has
immense growth potential as passenger car stock stood at around 11 per 1,000 people in
2008. Anticipating the future market potential, the production of passenger vehicle is forecast
to grow at a CAGR of around 10% from 2009-10 to 20% in 2012-13.
 37

Fig 1.1-Share of Major Passenger Car Players

Table 1.1 Evolution of Automobile Industry

 38

1.6.1 Advent of cars in India

The advent of cars in India was way back during 1898 when the first motorcar was
ridden down India’s roads. From then till the First World War, about 4,000 cars were directly
imported to India from foreign manufacturers. The first car was manufactured in India in
1948. Since the 80s, the Indian car Industry has seen a major resurgence and due to the entry
of foreign manufacturers and collaborators. The 90s became the melting point for the car
industry in India. In 1993, with the winds of liberalization sweeping the Indian car market,
many multinationals like Daewoo, Peugeot, general Motors, Mercedes-Benz, Hyundai and
Fiat came into the Indian car market. The customers being the king, was constantly
bombarded by both the Indian and foreign manufacturers/Multinational Players. Though sales
had taken a dip in the first few months of 1999, it is back to boom time during the
millennium.
The high- end models are being launched rapidly and are flourishing. As already said,
Indian automobile industry is highly competitive with a large number of players in each
industry segment. Many of the global majors are present in the passenger vehicle and two
wheeler segments. The key players in passenger vehicles segment in India are Tata Motors,
Maruti Udyog, Honda Motors, Hyundai Motors, Toyota, Skoda, Daimler Chrysler, and
Hindustan Motors. Mercedes, BMW, General motors, Ford, Porsche, Audi, Bentley and Rolls
Royce are already here (IBEF, 2011-12)

1.6.2 INDIAN PASSENGER CAR INDUSTRY

The Indian passenger car industry is zooming ahead with the price, quality and fuel
efficiency, affordability of the customers. The Customers have a greater preference towards
driving the small and compact car in the passenger car segment. After an initial cyclical
slowdown, passenger car sales have started to accelerate at a greater pace. In the year 2003,
India became the largest producer of small cars after Japan. It crossed the one million mark in
the financial year 2004-2005. It is party time for Indian car makers, especially the small and
compact ear manufacturers, who achieved a growth rate of 20% in car sales in the domestic
market and exports. Car sales in India were increasing at a steady pace. In February 2009, the
monthly sales of passenger cars in India exceeded 100000 units. It crossed 125000 unit sales
in February 2010. With customers increasingly opting for quality, performance and features
besides the price, the compact car segment have overtaken the small car segment. The small
 39

and compact cars together occupy around 80% of the Indian car industry, leaving the mid-
segment and luxury care in terms of sales and volumes behind.
According to a new research report ( IBEF) “Indian Passenger Car Market Analysis”,
the passenger car market, which constitutes around 79 % of passenger vehicle sales (in the
financial year 2010-11), and has immense growth potential as passenger car stock stood at
around 11.6 per 1,000 people in 2009. Realizing this upward boom in the passenger car
demand in the country, many domestic and foreign automobile multinationals are beginning
to formulate capacity expansion strategies and billions of dollar worth of investments that is
already in pipeline is to be implemented. Considering the huge market potential, production
of passenger cars is projected to grow at a CAGR of around 11% between 2010-11 and 2013-
14. It is also projected that India will be a hub for exports of passenger car during 2013-14.
The increasing growth scenario projected by the passenger car segment has shown positive
effect on the sales of the car particularly because of the tourist industry growth. Passenger car
production in India is projected to cross three million units during the year 2014-15. Sales of
passenger cars during the period 2015-16 are expected to grow around 10%. Export of
passenger cars is anticipated to rise more than the domestic sales during the financial year
2015-16
Passenger car segment is dominated by the share of Maruti Suzuki India and it has
recorded a percentage of 56.07, the second position has been grabbed by the Hyundai Motors
which has a share of 20.09 percent. Third position is occupied by Tata Motors of India with
15.72 percent. The rest of the companies including General Motors have not recorded a
significant sales increase during the period and their sales are less than 10 percent i.e.8.12
percent. (Fig 1.1)
The sales of Maruti Suzuki of India has increased because of its value added service
like effective after sales service which includes regular check camps of the vehicles and free
lubricants to the customers. Maruti Suzuki of India has a team of experts always ready to
offer their expert advice to the customers regarding performance of their cars. It has
maintained its quality and fuel efficiency. The life of vehicle is also a positive aspect, which
pushes up the sale of the vehicles.
Tata Motors is yet to catch up with the leaders. Other car manufacturers have not
shown significant impact on customers. Their strategy needs to be reviewed and revised.
 40

1.6.3 Current scenario in Passenger Car Category

The dominant basis of competition in the Indian passenger car industry has changed
from price to value, especially in the passenger car segment. While the Indian market remains
price sensitive, the stranglehold of economy models has been slackening, giving way to
higher-priced products that better meet customer needs. Additionally, a dominant trend in the
Indian passenger car segment is the increasing fragmentation of the market into sub-
segments, reflecting the increasing sophistication of the Indian consumer.
With the launch of new models from the millennium onwards, the market for MUVs
has been redefined in India, especially at the upper-end. Currently, the higher-end MUVs,
commonly known as Sports Utility Vehicles (SUVs), occupy a niche in the urban market,
having successfully shaken off the tag of commercial vehicles attached to all MUVs till
recently. Domestic car manufacturers are also venturing into areas such as car financing,
leasing and fleet management, and used-car reconditioning/sales to complement their
mainstay-business of selling new cars.

1.6.4 COMPETITIVE FORCES IN INDIAN PASSENGER CAR MARKET

1.6.4.1 Critical Issues and Future Trends, Threat from new players

The most important critical issue facing the Indian passenger car industry is the
attainment of break-even volumes or break even point. This is related to the quantum of
investments made by the players in capacity creation and the selling price of the car. The
amount of investment in capacities by passenger car manufacturers in turn depends on the
production

Threat from the new players:

• Majority of global players have entered the Indian market and a few more players are
also expected to enter in the near future. Hence more competition is expected to set in
among the existing players of automotive companies.
• Financial adequacy of working capital.
• The enhanced distribution network
• Lower tariffs in the past.
• WTO may expose Indian companies to threat of import
 41

• Enhanced competition among the different players in selected segments. (which includes
both compact and mid size segments).
• Entry of new multinational players into the market.
• Large numbers of automotive component suppliers.
• Automotive firms are aiming at quality consistency aimed at by rationalizing their
vendor base.

1.6.4.2 Market Strength of Consumers is on the Increase

 The consumer’s awareness and expectations has increased. This has enabled the firms
to adopt greater innovative strategies, which is a very critical factor.
 The firms have been focusing on product differentiation via improving new features,
improved performance efficiency, and effective after sales service which is critical
success factors.
 The increasing competition has curtailed the pricing power of manufacturers.

1.6.4.3 Threat from Substitutes

The consumer preferences have been changing due to inter product substitution taking
place (Mini cars are being replaced by compact or mid sized cars). The setting up of
integrated manufacturing facilities may require huge capital investments. In recent years, the
ratio of sales to capacity (an important indicator of the ability to reach break-even volumes)
of the domestic car manufacturers have improved consistently.

India is also likely to increasingly serve as the sourcing base for global automotive
companies, and automotive exports are likely to gain increasing importance over the medium
term. However, the growth rates are likely to vary across segments. Although the mini
segment is expected to sustain volumes, it is likely to continue losing market share; growth in
the medium term is expected to be led largely by the compact and mid-range segments.
Additionally, in terms of engine capacity, the Indian passenger car market is moving towards
cars of higher capacity. This apart, competition is likely to intensify in the SUV segment in
India following the launch of new models at competitive prices.
 42

1.7 Growth and Future Prospects

The domestic passenger vehicles industry has been on a relatively steady growth
phase over majority of the last decade and has registered a 10 year CAGR of 10.3% during
the period. It has been one of the few markets worldwide which have continuously seen
growing passenger car sales during the liquidity crisis and recessionary phase witnessed
during the financial year 2010-11. The increase in economic growth, rising disposable
income levels, favorable demographics, strong growth from tier II/III cities and rural India,
together with improving availability of vehicle financing at competitive interest rates have
been the key factors contributing to growth of the Indian passenger vehicle market. Among
the emerging markets, India continues to have ‘one of the’ lowest car density, estimated at 11
cars per 1,000 people compared to other markets such as China (45), Brazil (160), and
Indonesia (42). The growth initiative has also been supported by OEM led initiatives like
whole host of new model offerings from both from existing companies and new entrants in
the market. Furthermore, in India, the car prices have remained relatively flat over the years
(adjusted for the decline in duties) compared to steadily rising per capita income levels. In
addition to the strong domestic demand, the OEMs have also been positioning themselves as
competitive small-car makers, benefiting from India’s technological capabilities in the
manufacturing small-cars, scale economies and a well-established component supplier base.
Over the past 10 years, export of vehicles have grown at a CAGR of 31.7% to achieve
volumes of 0.45 million units during the financial year 2010-11. ICRA expects overall
growth momentum to be sustained and driven by strong domestic demand and increased
thrust in exports. India is likely to emerge as a small-car production hub in the years to come.
In addition to strong domestic demand, India is well on its path of becoming a global
production hub for small-cars. In 2009, India surpassed Japan to become the largest small-car
market in the world, accounting for the sale of around 900,000 small-cars, as compared to
700,000 sold in Japan. India is now the second-largest exporter of small cars, behind only
Japan. In the financial year 2010-11, India shipped out nearly 450,000 vehicles, registering a
CAGR (%) of 29% between financial years 2006-2011. During the recent years, exports
form a considerable part of the Indian industry, accounted for 18.6% of the total PVs sold in
financial year 2010, compared to 7.3% in financial year 2002, with small cars comprising
over 90% of total passenger car exports in financial year 2011.
 43

The growth in export volumes was particularly strong during the financial year 2009 and
2010 benefiting from the demand arising largely from scrap page schemes offered by most
European nations. The export growth in the current year is affected by higher base effect and
improvement in quality and design aspects. While Hyundai Motors and Maruti Suzuki are
leading exporter accounting for more than 90% of export volumes, other global players who
have recently marked presence in India are pursuing opportunities to set-up India as their
manufacturing hub. Nissan has started exporting Micra to Europe. India has become the
largest export hub for Hyundai (outside Korea) with over 40% of its small car production
catering to export demand from India.

1.7.1 The important aspects to be taken into consideration by India to become a global
automotive production hub

In addition to low-cost manufacturing capabilities, other factors that determine a

country’s competitiveness in emerging as a global production hub include an attractive
domestic market, its government’s favorable trade policies, presence of an established and
technologically advanced component supplier base, an efficient supply chain and movement
in exchange rates.
In terms of cost competitiveness, India has built up the scale and significant
competencies and cost advantages in the production of small cars. India also benefits from
lower development and labour costs, and improving auto component manufacturing base.
However, there are some problems like poor infrastructure, resulting in higher logistics costs
and changes in international duty agreements (i.e. Federal Trade Agreement between Korea
and EU) with competing manufacturing locations remaining a significant factor in
determining the export potential of India. However, enhanced fuel efficiency and
international demand moving towards small passenger cars also facilitates well for India. The
industry is also witnessing a moving trend towards alliances or platform contributing to the
export segment growth. Considering the auto makers’ quest for lower production cost, India
has to compete increasingly with other countries across international markets that offer lower
production costs and benefit from favorable government policies.
 44

1.7.2 Small Car Segmentation

India has become one of the sourcing hubs for passenger cars. In terms of product
launches in India, OEMs are now developing models specifically to meet Indian consumer’s
preferences and market conditions compared to the past, whereas most global players have
chosen models from their existing platforms.
Toyota’s Ethos and Honda’s Brio are some of models that have been developed
clearly keeping the Indian consumer in mind. Over the past two years, nearly 50% of the
capacity addition has been by international OEMs. Barring Hyundai, foreign OEMs such as
Toyota, Honda, Ford and General Motors have so far has been largely targeting the middle
and upper segment cars while shying away from the highly competitive small-car segment.
However, recognizing the significance of entry level in India, now almost of all the OEMs
including the recent entrants such as Volkswagen and Nissan are focusing on tapping the high
volume small car segment in India.
The number of new model launches has increased substantially, particularly in the
higher priced/premium end of the segment. Being the largest segment by volumes, the small-
car segment has witnessed the highest numbers i.e. 12 new launches in the last three years (of
which five were launched in 2010) with major ones being Ritz, A-Star, Zen Estilo (from
Maruti Suzuki), i10, i20 (from Hyundai), Indica Vista (from Tata Motors), Ford Figo,
Chevrolet Beat, Polo (from VW) and Etios (from Toyota). Honda also entered the small-car
segment (with launch of Brio) and Toyota launched the hatchback version of Etios.
1.8 Brand of cars considered for the study:
The brands of car considered for the study were Maruti, Hyundai, Chevrolet and Tata
Nano. The brand Maruti was one of oldest and the leading brand of passenger cars in the
Indian market. Hyundai was the second leading brand after Maruti; Tata was one player
which was started by Indian Giant Company Tata. Tata Nano was one of the models
introduced during late 2009-2010. Chevrolet was also one of the leading players, which was
in competition with Hyundai and was launched into the Indian Market during the late 1990’s.
Further the cars considered for research were small cars, medium sized passenger cars, of the
above mentioned manufacturers. The reason of choosing these brands was that they were the
leading brands which majority of Indian customers own as compared to the brands such as
Ford, Mitsubishi etc. Tata Nano was chosen as it is easy to compare the loyalty that
customers exhibit between medium cars of the other three brands as compared to Tata Nano.
 45

Major brands of cars in the automobile industry

1.8.1 Maruti Udyog Limited: It is one of the leading premier car manufacturing
companies in India Maruti was established in the year 1981 in joint collaboration with Suzuki
motor corporation of Japan, who were into the manufacturing of cars. It is the highest volume
of car manufacturer in Asia, apart from Japan and Korea. Presently there are more than 13
companies, who are into the passenger car market in India, but Maruti still holds close to 56
percent of the total market share.
Maruti Udyog has many unique advantages with respect to the services provided to
the customers. Firstly it has bagged the first position in JD Power customer satisfaction Index
for the consecutive sixth year in a row.
It has also been ranked highest in terms of Sales Satisfaction study in the Indian
Market. MUL’s dominant position in the Indian car market and its ability to satisfy the
customers has contributed to the success that it has achieved today. Maruti Udyog Limited
has been predominantly the market leader in Indian car market for almost close to three
decades. Further MUL was ranked highest in customer satisfaction, according to the J.D
Power Asia Pacific 2005, India Customer Satisfaction Index Study. During 2004, ‘Business
World’ ranked MUL among the country’s five most respected companies and also the
country’s most respected automobile company.
As the most dominant player in the Indian automobile market, MUL is focusing on
entering new markets in India in order to increase market share. MUL has recently added
service businesses including sale and purchase of pre-owned cars, lease and fleet
management service for corporate clients, Maruti Insurance and Maruti finance. In April
2007, MUL made large investments in the new plant that would produce diesel engine cars.
After this plant became operational, MUL had increased the production of diesel engine car
segments of the market, which currently accounts for about one-fifth of the total passenger
car market in India. Competition has become fierce in some Indian market segments,
especially because of entry level compact cars. MUL’s major competitor in the Indian
Market, Hyundai Motor Company, is aggressively expanding its sales and dealer network
across India. MUL has reduced the price of Maruti 800 three times during 2010 to keep this
model cheaper than those offered by Hyundai. Even with the planned expansion to new
Indian Markets, MUL’s future success will depend greatly on how well it can compete with
 46

its international competitors who have launched into the Indian Market. Maruti offers
various models including the Maruti 800, Omni, Alto, Eeco, Zen, Zen Estillo, A-Star, Wagon
R, Swift, Ritz, Baleno, Swift Dezire, Versa, Luxury SUV, and the Grand Vitara XL7. But
currently Maruti 800 and Omni have been phased out.

1.8.2 Hyundai Motor India Limited (HML): Hyundai Motor Co. (HMC) was established
in Korea in 1967. The company’s first model (Cotina) was released, in cooperation with Ford
Motor Company in 1968. In 1998, Hyundai acquired a 51% stake in Kia, but has since
reduced its share to 37%. In 2004, Hyundai was South Korea’s largest car maker and the
world’s seventh largest car maker selling 2.3 million units. Hyundai currently offers about a
dozen cars and minivans, as well as trucks, buses and other commercial vehicles.

Some popular entries in their product lineup include the Accent, Sonata, Tucson,
Elantra, Santa Fe, and Tiburon, all of which earned the title “Best Bet” in Jack Gillis’ The
Car Book 2005 Hyundai’s outlook is on the upswing. Hyundai’s parent company,
Hyundai Motor Group began investing heavily on quality, design, manufacturing, and long-
term research of its vehicles starting in 1998. This investment paid off in 2004 when Hyundai
tied with Honda for initial brand quality in a survey from J.D. Power and Associates.
Hyundai’s increase in both quality (named “Best Value Car Award Winner” – Smart Money
magazine 2005) and safety (received “Automotive Excellence in Safety
Award” – Popular Mechanics 2005) along with its low prices will allow it to continue to grab
new market share. Reflecting this trend of low prices and increased market share, in 2004,
Hyundai reported a Dramatic increase in annual revenues to 50.7 billion dollars and only a
small gain in net income to 1.78 billion dollars.

Hyundai’s growth is attributed to increase in international sales, during the period

January-September 2007, sales in Russia increased 100% and sales in the U.S. increased 10%
year-on-year. To meet this new demand, Hyundai has been investing in manufacturing plants
in North America, India, China, Turkey and research and development centers in North
America, Japan and Europe. In June 2004, Hyundai opened its first plant in the U.S. In 2006,
Hyundai started construction on a new production plant in Europe. Counteracting these
positive international sales trends, Hyundai has recently run into trouble in its domestic
(Korean) plants.
 47

In August 2005, the production of 25,683 vehicles was delayed due to a strike by the
company’s unionized workers. Later that week, Kia’s workers joined the strike causing Kia
to delay the production of 21,273 vehicles.
Hyundai was established in India in the year 1996, which is a wholly owned
subsidiary of South Korea multinational. Hyundai Motor Company. HML is the fastest
growing and the second largest Car manufacturers in India and is presently selling close to 12
variants of passenger cars in six segments. The company has set up more than 70 dealer
workshops that are equipped with the latest technology, machinery, and international quality
press, body and paint shops, across the country, thereby providing a one-stop shop for
Hyundai customers. It has also set up an exclusive manufacturing plant, which is located in
Tamilnadu, Sriperumbudur, Irrunkattukotai near Chennai, with the State of Art facilities.
Hyundai also has a fleet of 78 on- road emergency service cars that can provide emergency
service to all its customers anytime, anywhere.
The models of Hyundai are Santro, Getz, i-10, i-20, Accent, Elantra, Sonata, Tucson,
Terracan, Verna, and Getz next generation.

1.8.3 General Motors Corporation was founded in 1908 and is the world's largest vehicle
manufacturer General Motors enlisted its name for making outstanding performance in the
field of automobile industry in India from the year 1994. The models of General motors in
India are Chevrolet Aveo, Chevrolet Optra, Spark, Beat and Tavera.

1.8.4 TATA MOTORS: Established in 1945, Tata Motors is India's largest and the only
fully integrated automobile company. Tata Motors began manufacturing commercial vehicles
in 1954 with a 15-year collaboration agreement with Daimler Benz of Germany.
TATA INDICA – Tata motors flagship brand The Company’s passenger car range
comprises the hatchback Indica, the Indigo sedan and the Marina, its station wagon variant, in
petrol and diesel versions. The Tata Indica, India's first indigenously designed and
manufactured car, was launched by Tata Motors in 1999 as part of its ongoing effort towards
giving India transport solutions that were designed for Indian conditions. Currently, the
company's passenger cars and multi-utility vehicles have a 16-per cent market share.
 48

One of the successful launches of Tata Motors has been the compact small car Tata
Nano, which is moderately successful in the Indian Markets, because of its pricing strategy.
The positioning jargon of Tata is “more cars per year”. The New Indica car offers more
space, style, power, and other options, besides enhancing the quality to compete with global
players. They have also tried to redefine its strategy in the Indian passenger car market. True
to its jargon “More cars per year”, positioning the Indica includes offering all the core
benefits of Indica, combined with its advantages/benefits. The most popular television
commercial about Indica indicates a guy portrayed as the “loveable liar”, who gets shocked
every time he lies, but not when he highlights about Indica, which implies ‘must be true The
new commercial was launched with the intention of giving the Indica V2 brand a touch of
youthfulness

Thus the passenger car market segment has achieved tremendous growth during last
one decade i.e. from the new millennium. This was the main reason why this research study
titled “Relationship between customer satisfaction and loyalty among passenger car users”
was undertaken for the study.
 49

CHAPTER 2

LITERATURE REVIEW

Contents Page No
----------------------------------------------------------------------------------------------
2.1 Introduction 30
2.2 Buying Behaviour with special Reference to car purchase 30
2.3 Customer Expectations’ 41
2.4 Customer Satisfaction and Loyalty 45
----------------------------------------------------------------------------------------------

The overview of the above three aspects are dwelt upon in short in the Introduction.
The literature review on buying behaviour deals with articles and papers focusing on buying
of passenger cars. Customer expectations scrutinize the expectations of the prospective
buyer/customer from various perspectives. This section deals briefly with not only
automobiles but also other products and services. The final section deals with papers on
customer satisfaction and loyalty. Further, the literature review also focuses on a variety of
aspects such as purchase process, after sales service, pre-purchase, actual service rendered by
manufacturer/dealer.
 50

CHAPTER 2

LITERATURE REVIEW

2.1 Introduction

Consumer buying behavior process is multifaceted with several interrelated aspects to

be considered while undertaking the study. Section 2.2 deals with literature review relevant to
all aspects of buying behavior with special focus on buying of cars/automobiles. Section 2.3
of the literature review scrutinizes the aspect of customer expectations from various
perspectives, and also deals with customer loyalty and the Section 2.4 deals with customer
satisfaction and Loyalty from products or services. Since this research aims at establishing
that loyalty is an outcome of a variety of aspects like satisfaction during the purchase process,
satisfaction of services rendered after the sales by maintaining the car in good condition,
customer expectations before purchase and actual service received, the literature review
focuses on these areas. The literature aims to focus on papers relating to loyalty as an
outcome of satisfied customers.

2.2. Buying Behavior with Special Reference to Car Purchase

Allen F. Jung (1961) in his study points out effect of the entry of new compact cars
on the prices of standard Chevrolet and Ford, and on the older compacts, Lark and Rambler,
and on the two largest selling foreign cars, Renault and Volkswagen. Dealers from whom
price quotations were obtained were questioned about financial implications. Sample was
selected from all new car dealers within Chicago. Findings revealed that effect of new
compact cars on price of the older compacts; the foreign cars and the two largest selling ‘low-
priced’ makes were not large. Monthly price variations after the steel strike were not as large
as it was commonly believed.

Gerald D. Bell (1967) in his research interviewed 234 new car buyers. It was found
that two factors combine to influence consumer: use of friends as purchase helpers from a
 51

buying team whose specific self confidence is Curvilinear related to persuability. This study
was conducted in urban Western United States. One Chevrolet dealer was chosen and the
research was conducted during June, July and August. Personal interviews were conducted to
elicit answers for the following questions:
(1) How much experience have you had in purchasing a car?
(2) Is buying a new car an area in which you have good ability?
(3) How confident are you in your efforts at buying a new car?
(4) To what extent have you not had the chance to learn about buying a new car?
The findings of the study confirm the curvilinear association between self-confidence
and persuasiveness. They also show the importance of the role of customers, friends in
making decisions. Purchase pals had significant effect on the persuability of the customers.
Similarly, the combination of a person’s general and specific self confidence influences the
kind of risks the customer sees when purchasing and, consequently the kind of purchase pals
he uses.
Fred C. Akers (1968) aims at studying the buying behavior of Afro-Americans and
Whites in an urban environment. The universe of the study included Afro-Americans and
Whites living in Chicago. Stratified, two-stage probability, block-controlled quota sampling
method was used. 431Afro-Americans and 215 Whites were considered for study.
Analysis revealed that Afro-Americans owned automobiles in a higher price class,
owned more expensive models regardless of make, and owned automobiles with more
cylinders than compared to Whites. As far as car price is concerned Afro-Americans owned
high price cars and fewer low price cars.
As far as education and purchase of automobiles are concerned, it was observed that
as education increases, the number of cylinders in automobiles owned decreases; this applies
to both Afro-Americans and Whites.
The race variable is related to income, education, sex, age, family size or mileage
driven per week. No differences between the two races were found in the age of car owned,
length of time owned or new or used purchase. If frequency of car washes is a
valid measure of personal involvement in automobile ownership, automobiles are more
important to Afro-Americans than to the Whites.
James H. Myers and Mark I. Alpert (1968) in their study of attitudes and decision
making have discussed the determinant of attitudes, their meaning and its relevance to
marketing strategy and the methods by which it can be measured. Further attitudes towards
 52

features which are most closely related to preference or to actual purchase decision are said to
be important determinant.
This research paper aims at answering what are the important features or
characteristics and how they combine overall evaluation of an item and the actual purchasing
decision. Determinant attitudes can be found out by direct questioning as to what they
consider important in purchase decision.
As far as eliciting answers for ideal attributes indirect questioning or motivational
research seems ideal.
General Motors used covariate approach to determine which attitude or feature should
be stressed in advertisement.
The authors conclude saying that results from direct or indirect questioning must be
subjected to experimental or other validation for assurance that casual relationships do exist
between attitudes identified as determinant and the actual choice, decision or action.
William H. Reynolds (1968) emphasizes that keeping attuned to fashion trends is
crucial to the success of companies in many industries. The author explains that fashion
trends can be detected fairly easily if the marketer is aware of certain factors which helps to
determine whether a particular innovation will go on to become an acceptable fashion. Cars
and Clothing are the two areas discussed by William H. Reynolds.
The thumb rules enlisted for a fashion to become a growing trend are:
1) Does the innovation meet some genuine need or does it have some genuine functional
reason for being?
2) What is the nature of the long term trends within which the particular fashion under
consideration happens to exist?
3) Understand past fashion cycles.
4) Are there concurrent trends in other industries?
5) Are there self-limiting factors?
6) Inspect the curve.
7) Consider the dicta of sociologists and anthropologists on the factors influencing the
adoption of a new product or practice.
8) Availability of inside information.
Joseph W. Newman and Richard Stadin (1971) in their article on duration of
purchase decision process for cars and major household appliances have considered using
Automatic Interaction Detector and Multiple Classification Analysis. 652 households which
 53

had purchased one or more products were interviewed. Adult respondents were randomly
selected from a probability sample of 1300 households in US, 217 had bought new cars, and
435 had bought one or more of the following: color or black & white TV sets, refrigerator or
freezer, washing machine, kitchen range or room air conditioner.
The use of AID and MCA techniques in combination contributed to understanding
differences in purchase decision times. Conventional demographic variables were of little
help in explaining the differences. Variables like old product, respondents’ own judgment or
need to trust others, prior experience affected both information seeking and decision times.
The result through the study add empirical support to the idea that product purchase and use
are learning experiences which many buyers use to limit their search time.
Harry L. Davis (1976) in his research paper evaluated the involvement of family
members in economic decision, the process by which family decisions are made and the
consequences of different family structures and decision making styles. Study reveals that
consumers as a group acting collectively suggests a re-orientation of existing theories and
methodologies. Household decision making is judged on the extent to which it influences
family counseling, information dissemination and marketing research. Studies on family
decision making have in reality been studies of husband-wife decision making and little is
known about household roles in information gathering, storage, and product use and post
decision evaluation across product domain. Third aspect is how families make decision rather
than simply stating who is involved in decision making.
John S. Greenlees (1980) attempts to measure the impact of the price of gasoline on
the mix of new automobile purchases. Conditional logit estimation is used to model the
choices of individual household between four, six and eight cylinder cars. Mix of automobile
demand affects the rate of gasoline consumption by American households.
1257 new car purchases ranging in time from January 1971 to March 1974 have been studied.
The observation spans a portion of the oil embargo period and the emphasis is on the
response of automobile purchases to gasoline price in stable non-crisis atmosphere.
Apart from gasoline price income, household automobile stock, education, age and family
composition are among the variables considered in addition to gasoline price.
Results revealed that in addition to gasoline price small cars are popular among multi-car and
multi-earner households.
Dennis W. Rook (1987) is of the opinion that impulse buying is an important aspect
of consumer Buying Behavior. This research identifies (1) the subjective experiences that
 54

distinguish the onset of Buying Impulse (2) how consumers cope with their impulsive urges
to buy and (3) the type of negative consequences they incur as a result of their impulse
buying.
Data were collected using questionnaire with open ended questions on impulse
buying. This was completed using both personal interview and self-completion approach. 133
respondents were selected from college classrooms and off campus field settings in South
Western United States. Sampling method was used to have good representation among sex,
income group. Study revealed that people vary in their impulse buying proclivities.
Consumer impulsiveness is related to general acquisitiveness and materialism to
personality traits like variety seeking and sensation seeking. It was observed that recreational
shopping is co-related positively to impulse buying frequencies.
Narasimhan Srinivasan and Brain T. Ratchford (1991) have proposed a structural
equation model of the determinants of external search for automobiles which is developed
and tested on survey data from recent automobile purchasers through this study. The model
measures endogenous constructs like Perceived risk, Size of evoked set, Perceived benefits of
search, External search and exogenous constructs like class Knowledge, Positive experience,
amount of experience, interest in cars and cost of search.
Direct evidence of linkage between perceived benefits and amount of search is provided.
New insights into the determinants of search behavior for automobiles are derived
Dardis Rahel, Soberon Ferrer and Horacio (1992) the purpose of this study was to
investigate the impact of household characteristics and preferences for Japanese cars on the
demand for small cars in the United States.
A total of 367 households which purchased new cars in 1986 were considered for the
study. 141 small American cars, 84 small Japanese cars and 142 large American cars were
purchased. Probability analysis was used to examine the factors affecting the probability of
purchasing a small car.
Household characteristics that were taken into consideration for study were income,
purchase price, household characteristics, location, and net stock.
Results revealed that the probability of purchasing a Japanese car had a positive and
significant impact on the probability of purchasing a small car.
The two economic variables disposable income and purchase price had significant
impact on probability of purchasing small car though their effects varied.
 55

Family life cycle variables were significant in most instances with age having a
negative effect and the number of adults and children having a positive effect.
Though education was not significant younger households were more likely to
purchase small cars than other households.
The results indicate that consumers are responsive to cost savings and the higher
prices of large cars allied with higher operating costs should stimulate the demand for more
fuel efficient automobiles and encourage the production of such automobiles. Higher gasoline
taxes can also lead to cars with higher fuel efficiency.

Michele D. Bunn (1993) develops classification scheme of buying patterns and

situations. Buying activities distinguish the categories, as follows:
1) Search for information, 2) use of analysis techniques 3) focus on proactive issues, and 4)
reliance on control mechanism.
The use of a particular buying decision approach depends on four situational characteristics:
1) purchase importance 2) task uncertainty 3) extensiveness of choice and 4) perceived buyer
power.
Taxonomy types include 1) casual purchase 2) routine low priority 3) simple modified re-buy
4) judgmental new task 5) complex modified re-buy and 6) strategic new task. They found
that focusing on vendor and product choice empirically based taxonomy described buying
decision approach and corresponding decision situation constitute midrange theory of buying
behavior.

William P. Jr. and Narasimhan Srivasan (1994) in their study about deliberation
process and time taken for actual purchase indicate as follows. New car purchasers in
Buffalo, New York as listed by R.L Polk Company are considered for the study. Data were
obtained through a mail survey sent to 3043 purchasers of new automobile in May 1986.
1401 response was used for analysis. Five groups of categorization were possible and they
are:
1) 32 per cent took less than a month to buy a car after first thinking about it.
2) 34 per cent took between 1 and 3 months,
3) 10 per cent took between 3 and 6 months,
4) 15 per cent took 6 to 12 months
5) 9 per cent took more than a year.
 56

The authors reiterate that understanding the deliberation duration is important because
it is basic to an understanding of buyer behavior, has practical implications for management
decisions on the nature and frequency of promotions and advertising and is necessary for
proper targeting of selective communications to desired audiences.
Chao Paul and Gupta Pola, B (1995) state that with the increasing global
competition, country-of-origin remains topic of considerable interest. This study attempts to
fill the void in country-of-origin literature by incorporating the information search and
purchase outcome as dependent variables in the research design.
Usable response from 1008 respondents was used for the study. A total of 89 car models were
reported by respondents. Total amount of search was regressed on country-of-origin, age,
knowledge level of cars, number of models considered, and level of education, price
dispersion and hourly wage rate.
Results of this study demonstrate the absence of country-of-origin effects on the
amount of search. Country-of-origin effect is product specific and category specific.
Consumer perceptions of car qualities continue to narrow between US and Japanese models.
Sridhar Moorthy, Brain T Ratchford and Debabrata Talukdar (1997) in their
study examine consumers’ information search behavior for new automobiles. The survey was
conducted while in the midst of search process and right after the purchase of the car.
260 consumers were asked to fill out questionnaires. The results show that in common
situation consumer has brand specific prior distributions, whether the consumer searches at
all depends not only on involvement, search cost and individual brand uncertainty but also on
whether there is relative brand uncertainty.
The model evolved through this study gives the base for why advertising is useful
even for product categories in which the consumer is expected to consult more objective
information sources before making purchase decision.
 57

Fred U. Ede and Bhagaban Panigrahi (2000) in their work highlight that 12 per
cent of all new cars sold in America are purchased by Afro-Americans. The attitude of
African-American consumers towards US and Japan made automobiles is explored in this
study. The authors state that Country-of-origin affects consumer attitudes. The effect of COO
is demonstrated by individuals who might rate a product reasonably high and still may act by
the product. This study determines how African-American consumers rate US made and
foreign made automobiles. It also examines the effect of automobiles’ Country-of-origin on
African-American consumers’ evaluation of those automobiles.
The study was conducted among the middle class African-American segment. The instrument
comprised 14 Likert-type scales. 7 questions were aimed at rating automobile characteristics
by Country-of-origin. Seven other questions referred to the sort of person who would
purchase the automobile made in US on Japan.
Level of involvement in purchase and demographic and socio economic questions
constituted the questionnaire. 350 questionnaires were mailed of which 190 were usable for
analysis. The study revealed that respondents perceived Japanese automobiles to be more
‘innovative’, ‘better’, ‘higher in quality’, for the upper class than their American
counterparts. As far as ownership is concerned US automobile owners felt their automobiles
were better than those made in Japan and than non-owners. Owners of Japanese automobile
perceived them as more innovative, cheap, superior and better than US automobiles. The next
aspect of study namely purchases involvement influence. The purchasers of US automobiles
who were highly involved in purchase process felt that they were cheap and innovative.
Respondents who were highly involved in purchase of Japanese automobiles perceived them
as proud showpieces.
It was observed that respondents’ knowledge of automobiles was not significantly
associated with their evaluation of Japanese automobiles.
Ellen Se Well, and Charles Bodkin (2002) in their study conducted, 5000 surveys
were mailed to North and South Carolina residents who purchases new cars or light trucks
during August 2001.
The survey was designed to compare the search process of on and off line buyers.
Internet users were asked “How much money do you think you saved by using the internet”?
The average response was $952.
 58

On-line customers are more likely than off line buyers to locate low-price dealers
without the aid of referral services. This study clearly indicates that online search yields real
and significant savings on new car purchases.
Leonard L. Berry, Lewis P. Carbone and Stephen H. Haeckel (2002) in their
study point out that manager have become aware of creating value for their customers in the
form of experiences.
To carry out such a strategy, companies must gain an understanding of the customers’
journey from the expectations they have before the experience occurs to the assessments they
are likely to make when it’s over. An organization’s first step towards managing the total
customer experiences is recognizing the clues it is sending to customers. Clues are of two
categories. The first one is the actual functioning of the product. The second category of
experience includes small sound, sight, and texture of the goods or services.
The authors suggest companies compete best when they combine functional and
emotional benefits in the offerings. Emotional bonds between companies and customers are
difficult for competitors to sever. To compete successfully in this territory, a growing number
of organizations are systematically applying the principles and tools of customer experience
management to strengthen customer loyalty. Unlike many products or service enhancements,
the holistic nature of these experiential designs makes them very difficult for competitors to
copy.
Gaby Odekerken-Schroder, Hans Ouwer Sloot, Jos Lemmink, and Janjaap
Semeijn (2003) have analyzed whether consumer segments based on relational aspects,
service aspects or price aspects have different preferences concerning these three key
decision making variables when buying a car. In addition, it assesses consumer segments
resulting from simultaneously incorporating relationships, service packages and price. The
study investigates a large sample of Mitsubishi drivers in the Netherlands emphasizing
consumers’ tradeoff between dealer relationship, service package and price. Conjoint analysis
showed that dealer relationship represents a very important decision-making variable when
buying a car and consumer preferences concerning relationships provide a useful instrument
for segmenting markets. Cluster analyses on the basis of three aspects simultaneously
revealed that some consumers do value relationships, while others emphasize the service
package in their purchase, both opposed to the third segment that is most probably not
inclined to be loyal to a car dealer. Further it is clearly indicative that different consumer
 59

segments can be distinguished on the basis of preferences for relationships and service
packages rather than on the basis of price.
Gary Reed, Vicky Story, and Jim Saker (2004) the authors opined that purchase of
a car is a highly involved process when compared with other retail experiences. Despite the
range of purchase channels available and the increased level of accessible information, a
majority of customers still choose to buy a car through a traditional dealer network.
This paper examines the impact of the introduction of a computer assisted selling process on
customer’s perceptions of the overall buying process. In order to compare the difference in
buying experience attributable to the new process, data were collected before and after the
Computer Assisted Selling Program (CASP). Study was conducted through structured
personal interviews and CCTV footage (Observational Research).
The research clearly points out that introduction of CASP system have a positive
influence on the customers’ perception of the buying process. Speed and overall process too
improved in this method. CASP can also provide insight into the usefulness of on-screen
features and can provide a direct source of feedback regarding features of these types of
systems and their usability
H.S Sandhu and Mandeep Kaur (2004) conducted a study of brands
competitiveness and positioning analysis with respect to passenger car market in India. In
their study, the main focus was that, brands do not exist in vacuum and excellent positioning
is the key to a brand’s and ultimately a company’s success. In their study, attempt was made
to identify the underlying dimensions/attributes on the basis of which consumers perceive,
evaluate, and compare differences in competing brands, besides examining as to which
brands are the most competitive and which the least in the passenger car market. More
importantly the study also deals with the positioning analysis and repositioning strategies for
the existing brands of passenger cars. The study was based on a sample of 303 car
owners/potential buyers from the major cities of the state of Punjab and the Union Territory
Chandigarh. Results of the analytical study was analyzed using advanced multivariate
techniques viz, Multidimensional Scaling coupled with Cluster analysis identified six group
classification solution, according to which Zen and Esteem compete directly with Santro,
Tata Indica. Fiat Uno and Matiz are found to have neck to neck competition. Maruti 800 and
Omni are not competing with any of the available brands and occupy distinct positions.
 60

Bo Edvardsson, Bo enquist, and Robert Johnston (2005) have developed a new

model depicting how organizations can help customers test out and experience a service prior
to purchase and consumption or use. When customers buy a new car they are allowed to test
drive to get a feel of it. When customers wish to purchase services it can be more difficult to
provide customers with a test drive.
This research introduces the motion of hyper reality that is the simulated reality of a service
experience. It introduces the concept of “experience room” the place where the simulated
experience takes place. The author applies six dimensions of experience rooms to
demonstrate how organizations co-create value in conjunction with the customer, through
hyper reality in a pre-service experience. Physical artifacts, intangible artifacts, technology,
customer placement, customer involvement, service experience through hyper reality are the
dimensions and roles used in co-creating customer value.
Eliane Pereira Lamith Brito, Ricardo Luis Beneduzzi Aguilar and Luiz Artur L.
Brito (2007) investigate the determinants of customer choice of car maintenance service
provider after the warranty period. It focuses on the alternative of using branded car dealers,
who provide this service during the warranty period or independent garages. 30 services
attribute on car maintenance services and other purchase behavior determinants such as
perceived value is considered for the study. 400 car owners were chosen and logistic
regression was used to link customer choice to service attributes. Findings revealed that
service attributes that determine customer choice are the ones consumers simultaneously
consider important and perceive differences in performances between the service providers.
The study revealed that branded dealers service operation proved to be relatively weak,
having only one of these attributes, while being better evaluated in less important ones.
Independent garages have a much better offer justifying their gains in market share.
Andreas Herrmann, Lanxia, Kent B Monroe, and Frank Huber (2007) have
linked the concepts of price fairness and customer satisfaction and empirically demonstrate
the influence of perceived price fairness of satisfaction judgment. This study also examines
specific factors that influence fairness perceptions including price perception and consumer
vulnerability.
The study was conducted in the context of automobile purchases in major German car
dealership. 246 car buyers were surveyed and their fairness perceptions and satisfaction
judgment with the car buying process measured. Research findings revealed that price
perceptions directly influence satisfaction judgment as well as indirectly through perceptions
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of price fairness. Consumers’ vulnerability, induced by demand supply relationship and

urgency of need from the consumers’ side, had negative effect on perceived price offer
fairness. The author recommends that being sensitive to buyers’ psychological state and
assuring buyers of fair treatment will enhance perceptions of price fairness without changing
price offer.
Dr. Kambiz Heidarzadeh Hanzaee (2008) in his explorative study, assessed the role
of COO in consumers’ evaluation of foreign products from Iranian customers’ point of view.
Consumers’ specified attributed about five different countries: Japan, Germany, France,
South Korea and China were studied. Results specify that Japanese products are associated
with necessary items, little advertising and recognizable brand names. French products are
associated with luxury items, more for women and young people and are unreasonably
priced. While German products are associated with exclusive, heavy industry product,
inventive, reliable, technically advanced, good workmanship, handmade, attention to
performance and for old people. Korean and Chinese products are evaluated poorly with
respect of many attributes, although Chinese products are associated with worldwide
distribution, variety and are inexpensive.

2.3 Customer Expectations

Studies that have laid emphasis on customer expectations and their outcomes are
mentioned below.
Kwortnik et.al (1997) pointed out through their research study that consumers will
be interested in purchasing the product if the product is of high value according to his
perceptions and his expectancy formed by them before the purchase of the product. This is
also true in case of passenger cars.
Sweeney Hauskeencht, Souta G and Sweeney J (2000) analyzed the concept of
cognitive dissonance over the entire decision making process. They concluded from their
study that conflict arises during the pre-purchase stage and “the construct labeled
apprehensions and increases over the decision process”. The cognitive conflict in the pre-
purchase stage plays a vital role because of these apprehensions, which are the source of true
dissonance after the purchase of the product. The product could be of high or low
involvement depending on the number of brand alternatives and differences among them. It
was also concluded that there is a positive relationship between expectations and performance
within high involvement products.
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Karnikey Budhwar (2004) through his research firstly arrives at the following
objectives as stated below:
1) to study the opinions of operators in the independent restaurant sectors on a given set
of impact variables dealing with various aspects of their services and products.
2) to evaluate the factors that has a crucial impact on the success/failure of the
restaurant.
3) to understand the attitudes of a sample customer base and assess factors which have
an impact on their dining experience at restaurants.
4) to identify and analyze the preferred choice of cuisines for a sample customer base of
60 restaurants in Delhi and surrounding areas and covers major geographical and
economic segments that comprise the capitals’ independent dining market.
The study has not taken in account restaurants within hotels due to the difference in
nature of their management and decision making processes. Survey was conducted with a
questionnaire containing nine variables and 54 sub variables, each with a five point rating
option on a likert scale. The six factors that impact customers and management alike include
menu, location, décor and design, entertainment, service system and publicity.
Another three variables that have only internal impact on the management and do not affect
the decision making for a customer directly was also taken into consideration. The empirical
observations made through the process of this research highlight that despite the fact that
comparatively little industry research takes place the average operator is fairly aware of their
customers’ current demands. Of the 32 variables analyzed for the GAP study, significant
GAPS were observed in only 8-10 variables in each category.
Some of the recommendations offered are:
1) Widen understanding of competition.
2) Talk to your customers
3) Keep a tab on your environment
4) Document standard procedure
5) Stress more on courtesy
6) Do not dilute your concept
7) Food critics and write ups are more important than what is thought about it
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8) Focus on design basics

9) Hygiene and upkeep is very essential
The above research paper was reviewed as the above factors are also very critical with
reference to the selection of passenger cars
Heejin Luin and Alan J. Dubinsky (2004) opine that a growing number of
consumers are turning to the internet to buy goods and services, yet many on-line retailers are
either cutting back or going out of business entirely, if online retailers are to retain customers
and attract new ones they need to know the criteria consumers use when selecting and
evaluating an e-tailor. Four main characteristics of e-shopping are:
Merchandise, interactivity, reliability and navigation characteristics Luin’s research
among a sample of students at a large university in Mid-Western USA reveals that
consumers’ attitude towards online purchasing is significantly affected by the merchandise
and reliability variables, but not by the interactivity or navigation characteristics. E-tailors
therefore need to pay significant attention to the contents of their web pages.
Indeed, precious research has found that the more effective descriptions are of the
products available through a web site, the less sensitive to price the web sites customers
become.
E-tailers can seek to ensure that they have the right variety of merchandise available
by using consumer profiles and tracking the sales they make through the site. Shoppers
appear to have apprehensions about revealing other personal information on the internet. To
help allay these fears, E-tailers should spell out their privacy policies, and guarantee that the
information customers provide will not be misused.
The apparent unimportance of the interactivity and navigation variables does not
imply that E-tailers should ignore these issues. The findings may result from the fact that
modern web sites tend to provide adequate customer support and navigation speed, so
customers may have come to accept them as “given”. E-tailers must be sure that their
customers do not have to suffer long downloading times.
Yanni Afthinos, Nicholas D Theodorakis and Pantelis Nassis (2005) in their study
it is observed that customers’ expectations of a service organization are considered to be of
primary importance in assessing quality. These expectations might be influenced by several
factors, which include word of mouth, communication from other customers, personal needs
of customers, past experience and external communications from service providers, including
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the price quality relations. Though fitness center and wellness services are not one and the
same the service provision criteria are the same. For instance the customer record keeping,
willingness to help, professional knowledge are some common aspects.
Sagar et.al (2004) concluded as to how the Indian car industry has advanced
technologically and has been driven by factors such as competition demanding consumer
preferences.
Nicole (2006) has studied how occupational health department gets to know about
customer’s needs wants and expectations. Much of the literature on service expectations
defines quality as meeting or exceeding customer expectations. The study revealed that
customer expectation of occupational health department includes
1. Reducing ill health caused or made worse by work. This includes vacation programs,
dealing with needle stick injuries, offering support for distressed stuff, ergonomic
assessments, dealing with environment issues.
2. Helping people who have been ill, whether caused by work or not, to return to work.
3. Improving work opportunities for people currently not in employment due to ill health
or disabilities.
4. Using work environment to help people maintain or improve health. Customers were
asked about physical facilities, accessibility, communication, and provision of
information, competence, credibility, security, confidentiality and empathy.
Kaur and Sandhu (2006) investigate the expectations or the features considered by
the customers while purchasing a particular brand of car. The study was conducted in
Chandigarh and Punjab. The analysis revealed that the expectations of the customers were
more related to factors such as safety, comfort and luxuriousness.
Chidambaram and Alfread (2007) have opined through their research that there are
certain important factors that influence the customer expectations with respect to the purchase
of car. The framework of their study reveals that customer’s expectations are more concerned
with fuel efficiency, rather than other factors. They further believe that brand name conveys
something about quality, utility, technology, and further, their expectations also includes
factors such as effective quality, durability and reasonable price.

Kotwal (2009) investigates through his research that buyer’s expectations during the
purchase of the car include aspects such as space, comfort and luxury in case of a mid-size
saloon or sedan. With the faster development of technological advancements, there has been
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a significant change with respect to maturity of taste evinced by customers due to the
popularity of Indian hatchback car market. The other important consideration such as boot
space does not seem to have greater importance as it used to once have. It was also noticed
that majority of customers buy cars with comfort and space and comparatively less boot
space as it easy to negotiate the congested traffics in the city. Further, it was found through
the study that the premium hatchback commands a respect in its particular segment; though
they are more expensive, customers buy them for their overall performance and comfort they
offer without sacrificing the feel good factor.

2.4 Customer Satisfaction and Loyalty

D. Maynard Phelps (1965) presents a discussion of the significant changes that has
taken place in the automobile industry during the sixties, and the ones that were probably
about to take place. The 47th Annual National Automobile Dealer Association Convention
pointed out that 33 per cent of the project automobile sales for 1961-70 was achieved in 62-
63 period itself. As estimated if 9.0 million cars would be sold 273 cars will be sold on an
average by each dealer.
Other Changes Affecting Franchised Dealer: Economic expansion is usually thought
of as the principal factor affecting dealers’ activities and opportunities, but other changes
taking place also are of considerable importance. Among these are segmentation of the
market, the recent extension of warranties, increased physical complexity of the product and
changes in the timing of new model introductions.
Segments of Market: When product lines are extended as a result of changes in the
market or in competitive activities, dealers’ responsibilities are multiplied. A segment is
defined as a group of consumers who want particular car features in such areas as design, size
or special combinations of them. In recent years the industry has offered greater diversity in
cars to meet the desires of particular markets.
Extension of Warranties: When warranties are too long, they suffer certain
disabilities, among them that costs cannot be predicted accurately for purpose of pricing.
Also as time goes on after purchase, it becomes increasingly difficult to determine whether
failure in performance is the fault of the producers or the user. If “free service” is given when
the fault lies with the owner, other car owners are discriminated against in price, for costs
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must appear in prices initially charged for cars. There are reasons for doubting the economic
justification of most warranties over a year in length.
Product Complexities and Other Changes: Changes in the timing of model
introduction, or just the fact that this is done more often, is a complicating factor, even
though it may provide sales opportunities.
Significance to the Franchise System: The franchise system- a marketing system
which is economically sound. It stands up well under several economic tests.
Economic Combination of Functions: Sales of new and used cars, parts, service and
financing do constitute an “economic package” of functions. The car owner is also benefited
by the simple fact that the dealer has a strong incentive in respect of sales to furnish good
service. As the profits on service work are usually low, some dealers might prefer to
concentrate only on sales; but failure to perform the service function will prove costly
Easy Availability: Vigorous retail competition, reasonable gross margins, economic
co-operation of small and large business concerns, Benefits to consumers, effect of changes
on Dealers’ problems and responsibilities, market coverage by dealers, improvement in
management, planning of capital requirements, attitudes towards service function,
implementation of new warranties, protection of franchise system and some of the other
aspects are discussed in the opportunities and responsibilities of the franchised automobile
dealers.
Gerald D. Bell (1967) opines that the consumers differ markedly in their
susceptibility to persuasion attempts. A growing body of research tries to explain why some
individuals are more easily persuaded than others. However, this research finds out how
consumers feel after being persuaded to purchase a product. The research aims to analyze
how a consumer feels after buying a new car. The study examines the consequences of being
influenced upon a buyers’ cognitive dissonance, as an automobile salesman refer to “buyers’
remorse” after the purchase. Data were collected from 289 new car owners who had bought
cars from an agency. A total of 234 out of 289 that is 81 per cent response were achieved.
Personal interview method was followed. The findings of this investigation suggest the effect
of a customers self confidence, the extent to which he can be persuaded, and the quality of
service he receives upon his cognitive dissonance. All customers are not cognitively
dissonant, as is suggested earlier. Rather, the type of personality an individual brings to the
dealership and the experiences he has while purchasing his new car determines the extent of
his dissatisfaction with the metallic object. The unhappy a customer is with his purchase, the
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less likely he will be to return to the brand and dealer. Findings suggest that the automobile
industry might well increase the amount of promotion allocated to post purchase reselling.
Feelings of the customer after the purchase are the pillars of profitability in any
company’s future. Two groups of customers stand out as deserving special attention in after
sales promotion. There are the buyers who were most easily persuaded and those who
received the worst service. There are the groups most likely to switch brands and
consequently, those who deserve the most attention from the advertising in terms of dollar
revenues.
Gilbert A. Churchill Jr. and Carol Suprenant (1982) have investigated whether it
is necessary to include disconfirmation as an intervening variable affecting satisfaction as is
commonly argued, or whether the effect of disconfirmation is adequately captured by
expectation and perceived performance. Further, they model the process for two types of
products, a durable and a non-durable goods, using experimental procedures in which three
levels of expectations and three levels of performance are manipulated for each subject
perceived expectations, performance evaluations, disconfirmation and satisfaction are
subsequently measured by using multiple measures for each construct. The results suggest
that the effects are different for the two products. For the non-durable goods, the relationships
are as typically hypothesized. The results for the durable goods are different in important
respects. First, neither the disconfirmation experience nor subjects’ initial expectations
affected subjects’ satisfaction with it. Rather, their satisfaction was determined solely by the
performance of the durable goods. Expectations did combine with performance to affect
disconfirmation, though the magnitude of the disconfirmation experience did not translate
into an impact on satisfaction. Finally, the direct performance-satisfaction link accounts for
most of the variation in satisfaction.
David Furse, Girish N Punj, and David W. Stewart (1984) aim at focusing more
extensively on the participation of others in the decision making unit. The authors attempt to
validate findings based on the analysis of consumer self-report with data gathering
independently from sales personnel. The other objective of this study is to cross validate and
synthesize the findings of previous research and offer a speculative exploratory framework
for the process which produces characteristic search patterns.
Data for the study were generated by consumers who had purchased a new
automobile during September to November 1978. Data were obtained from 1056 respondents
and 1031 respondents were actually used.
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Based on variables, six clusters were evolved and they are as follows:
1) Low search group
2) Purchase pal assisted search group
3) High search group
4) High self search group
5) Retail shopper group
6) Moderate search group
Sales persons provide the best opportunity for cross validation of at least some of the
characteristics of different shopper types. A set of 74 items formed the basis of the sales
person questionnaire. These items described potential characteristics of car buyers. A first
time buyer, prompted by an advertisement, comes to a showroom alone. The questionnaire
instructions requested that the sales person respondents think of a particular customer or type
of customer with whom they had personnel experience. They were asked to describe that
customer briefly in their own words.
Clusters evolved from sales force data are:
1. Negotiator
2. Inexperienced shopper
3. Lone shopper
4. The family shopper
5. The pain-in-the-neck
6. The moderate search shopper
The results of the sales personnel data provide additional support for the existence of
systematic search patterns similar to those identified in prior research. The fact that the
results are not a perfect replication suggests either differences in frame of reference,
considerable noise in either data sets, or both.
Valarie A. Zeithaml (1988) in his paper aims at (a) defining the concepts of price,
quality and value from the consumer’s perspective, (b) relating the concepts in a model and
developing propositions about the concepts, examining the available evidence in support of
the propositions, and suggests areas where research is needed. In order to achieve the
objectives of the study exploratory stage of research through focus group and in-depth
interviews was conducted to gain insight into consumer perceptions of quality and value.
Three distinct product lines of beverages were taken to elicit perceptions on quality and value
perceptions. Research implications can be viewed in the following areas:
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1. Current practices in measuring quality: Academic research measuring quality has

depended on uni-dimensional rating scales, allowing quality to be interpreted in any way the
respondent chooses. This practice does not ensure that respondents are interpreting quality
similarly or in the way the researcher intends. Hence the convergent and discriminant validity
of constructs of attitude and quality needs investigation. So quality measurement scales
remain to be developed.
2. Current practices in modeling consumer decision making: Three aspects of
modeling consumer decision making can be questioned if the propositions prove to be
accurate representations. The tendency to use actual attributes of products rather than
consumer perceptions of those attributes, the practice of duplicating and combining physical
attributes with high order attributes. Finally the sacrifice aspect should not be limited to
monetary price alone especially when time costs, search costs and convenience costs are
salient to the consumer.
Methods appropriate for studying quality and value: Exploratory investigation is
appropriate for investigating quality in a variety of products categories. As far as value is
concerned a major difficulty is researching value is the variety of meanings of value held by
consumers.
Prices as quality: Most experimental studies related to quality have focuses on price
as the key extrinsic quality signal. As suggested in the propositions, price is but one of
several potentially useful extrinsic cues; brand name or package may be equally or more
important, especially in packaged goods. Inclusion of other important indicators, as well as
identification of situations in which each of those indicators is important may provide more
interesting and useful answers about the extrinsic signals consumers use.
Myers James H (1991) opined that customer satisfaction usually has been defined in
terms of perceived performance of a product or service in relation to the expected
performance prior to purchase or use. A better comparison standard would be what the
customer ‘wanted’ because people can want much more than they expect to get from current
offerings and because disconfirmations of wants can be more predictive of overall
satisfaction than disconfirmation of expectations.
Sample of 170 purchasers of new automobiles in California completed a mail
questionnaire containing 20 attributes or features that people commonly use to evaluate new
car dealerships.
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Results show that many customers wanted much more attributes than they expected to
get. Findings indicate that want deficiencies can be a better way to measure customer
satisfaction than expectations deficiencies, in the sense that the former are more highly
related to overall satisfaction ratings.
Fornell C (1992) has identified through his research study that there is a strong
positive correlations between loyalty and satisfaction.
Dawn Iacobucci, Amy Astrom, and Kent Grayson (1995) conducted two studies
with divergent methodologies to examine whether or not quality and satisfaction have distinct
antecedent causes, consequential effects, or both.
In both studies, respondents report whether or not they think quality and satisfaction differ,
and if so on what dimensions or under what circumstances. In the first study qualitative
method was used to elicit service attributes that are salient to respondents.
In the second study, experimentally a number of service attributes were manipulated. The
study inferred the judgment of respondents on whether the terms quality and satisfaction were
used differently or interchangeably. Robust definition for quality and satisfaction is derived
from the consumer’s point of view.
Claes Fornell, Michael D. Johnson, Eugene W. Anderson, Jae sung cha, and
Barbara Everitt Bryant (1996) have inferred that the American Customer Satisfaction
Index (ACSI) is market based performance measure for firms, industries, economic sectors,
and national economies. The authors discuss the nature and purpose of ASCI, the nationwide
survey methodology used to collect the data, and the econometric approach employed to
estimate ACSI. ACSI is conducting bench marking studies, both cross-sectional and
overtime. Third, to demonstrate the models general applicability and usefulness, the authors
estimate the model for the seven major economic sectors for which data are collected. Fourth,
the paper discusses systematic cross sector variations in each of these areas. Fifth, it discusses
implications of ACSI for public policy makers, managers and individual customers.
Ram Mudambi and Susan Helper (1998) attempt to test whether the close but
adversarial model is supported by data from the US auto industry. The hypotheses that are
tested to bring out the model are (1) current competitive factor are important in explaining the
suppliers’ perceived probability of a switch. (2) Suppliers with large amount of specific assets
do not have a lower perceived probability of a switch than those with small amount (3) the
technological complexity of supplier’s perceived probability of a switch. (4) Difference in
product type does not affect the suppliers’ perceived probability of a switch. Data were taken
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from the survey of automotive supplier relations conducted in the United States in 1993. A
total of 675 usable responses from independent US owned firms, Japanese transplants and
vertically integrated divisions of US automakers were taken for the study.
This model consists of a framework of formal co-operation accompanied by non
cooperative behavior. Within such framework, buyers will take advantage of competitive
weaknesses of suppliers to reap short term gains. Traditional concerns of vulnerability will
affect supplier relations, leading to attempts by the buyer to minimize dependency.
Because period by period profit maximization implies that all realizable gains will be
attractive to the buyer, switching to a cheaper source will be likely in the case of a relatively
important one. This model is supported by significance of current competitive factors and the
insignificance of technological and product type factors in the determination of supplier’s
performance, perceptions of the buyers’ switching probability are certain important aspects
taken into consideration.
Christopher D. Ittner and David F. Larcke (1998) in their research examine three
questions on the value relevance of customer satisfaction measures (1) Are customer
satisfaction measures leading indicators of accounting performance? (2) Is the economic
value of customer satisfaction reflected in contemporaneous accounting book values? (3)
Does the release of customer satisfaction measures provide new or incremental information to
the stock market? Improvement in areas such as quality, customer or employee satisfaction
and innovation represent investments in firm specific assets that are not fully captured in
current accounting measures. Nonfinancial indicators of investments in intangible assets may
be better predictors of future financial performance than historical accounting measures and
should supplement financial measures in internal accounting systems. One non-financial
measures emphasized in these discussions is customer satisfaction. i.e. measures and
attributes values to using customer, business unit, and firm level data. Customer level tests
provide evidence on fundamental assumption that future period retention and revenues are
higher for more satisfied customers. Making customer satisfaction measures are leading
indicators of accounting performance. Relations between customer satisfaction measures and
future accounting performance generally are positive and statistically significant. However,
many of the relations are nonlinear, with some evidence of diminishing performance benefits
at high satisfaction levels. Customer satisfaction measures appear to be economically relevant
to the stock market but are only partially reflected in current accounting book values. Public
release of these measures is statistically associated with excess stock market returns over a
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ten-day announcement period, providing some evidence that the disclosure of customer
satisfaction measures provides information to the stock market on expected future cash flow
Ruth N. Bolton (1998) in his article models the duration of the customers’
relationship with an organization that delivers a continuously provided service, such as
utilities, financial services, and telecommunications. In the model, the duration of the
provider customer relationship is postulated to depend on the relationship, which he/she
updates according to an anchoring and adjustment process. It is hypothesized that cumulative
satisfaction serves as an anchor that is updated with new information obtained during service
experiences. The model is estimated as a left truncated, proportional hazards regression with
cross sectional and time series data describing cellular customers’ perceptions and behavior
over a 22 month period. The results indicate that customer satisfaction ratings elicited prior to
any decision to cancel or stay loyal to the provider are positively related to the duration of the
relationship. The strength of the relationship between duration times and satisfaction levels
depends on the customers’ prior experience with the organization, more heavily on prior
cumulative satisfaction and less heavily on new information. The duration of the service
provider customer relationship also depends on whether customers experienced service
transactions or failures. The effects of perceived losses arising from transactions or service
failures on duration times are directly weighed by prior satisfaction, creating contrast and
assimilation effect. By modeling the duration of the provider-customer relationship, it is
possible to predict the revenue impact of service improvements in the same manner as other
resource allocation decisions. The calculations in this article show that changes in customer
satisfaction can have important financial implications for the organization because lifetime
revenue from an individual customer depends on the duration of his/her relationship, as well
as the dollar amount of his/her purchase across billing cycles.

Bo Ed Vardsson, Michael D Johnson, Anders Gustafsson, and Tore Strandik

(2000) studied customer satisfaction and loyalty between services and products. A conceptual
model links satisfaction, loyalty and performance hypotheses that customer satisfaction have
more positive impact on profitability and revenue growth for services than products is tested.
Bowen J.T and Chen S L (2001) point out that loyal customers contribute to
company profitability by spending more on company products and services, via repeat
purchasing, and by recommending the organization to other customers.
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Perugini, Marco and Richard P Bagozzi (2001) scrutinized the role of desire and
anticipated emotions in goal. The concept of satisfaction, repurchase and loyalty might be
profitably viewed from the perspective of the theory of planned behavior, where the
consumer’s satisfaction might conclude in a desire and then influence the loyalty with its
intentions and finally results in repurchase behavior.
Lien Ti Bei, and Yu Ching Chiao (2001) have inferred that the complete products
provided by most service industries contain both tangible and intangible parts, in different
proportions. Previous empirical research in the field tended to emphasize service quality only.
The purpose of this study is 1) to explore the effects of three consumer perceptions on
satisfaction and loyal behavior. Automobile maintenance service is chosen as an examined
object because both technician skills and parts quality are essential to consumers. A survey of
495 customers is conducted in 15 repair centers of three major auto firms, Mitsubishi, Nissan
and Toyota. The results illustrate that perceived service quality mainly effects consumer
loyalty through satisfaction, while perceived product quality and perceived price fairness are
almost equally important to brand up their satisfaction.
The authors suggest that managers consider product quality and price as the
foundations to building up consumer satisfaction and loyalty and to improve service quality
as an add-on value to consumers
Edward Conlon, Sarv Devaraj, and Khalil F Matt (2001) in their paper discuss the
relationship between quality represented by consumer rating and quality related activities by
the consumer, represented by maintenance activities in the automotive industry. Based on
several converging theoretical perspectives, a model is presented and it is tested, relating
vehicle initial quality ratings to consumers’ routine maintenance. Three types of data were
collected for the study: (1) vehicle service records at a local dealership, (2) primary date from
a survey of vehicle owners, (3) consumer reports data on quality ratings and initial purchase
prices. Results of structural equation analysis of the proposed model indicate significant link
between quality and consumers’ quality behavior. This link has important strategic
implications for both automotive manufacturers and distributors particularly as “leasing”
become more prevalent in the industry.
Fullerton G (2003) brings to notice that recent studies have been built upon customer
commitment as a key mediator of the relationship between customers’ evaluations of a firms’
performance and the customers’ intentions regarding future relationship with a firm.
Traditionally satisfied customers have been thought of as less price sensitive and less
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influenced by competitors. Yet, in 1991 the Xerox Corporation made a surprising discovery.
It was found that “satisfied” customers were not behaving the way they were expected: they
were not coming back to Xerox to repurchase (Mc. Carthy, 1997, P.13). The only true loyal
customers are totally satisfied customers. Hence, the Xerox study shed new light on what had
previously been relatively explored territory: the link between Customer Satisfaction and
Customer Loyalty.
Palto Rajan Datta (2003) is of the opinion that consumer goods market in the United
Kingdom is highly competitive. Along with the major brands, own label brands also have a
considerable market share. Even small changes in the market share can have a significant
financial impact on company sales. In the face of such competition, having brand loyal
customers not only ensure sales, but also reduce marketing costs.
To create brand loyal customers and retain them, it is essential to have knowledge of
the major factors that influence brand loyalty amongst customers in the consumer goods
market in the United Kingdom. Exploratory research was conducted to investigate the major
factors that influence the consumers brand loyalty in the consumer goods market in UK. For
the purpose of the research apart from secondary data analysis, a pilot study was also
conducted. In-depth interviews and focus group interviews were used at the stage. The
research revealed that the major factors that influence brand loyalty in the UK consumer
goods market are the product performance, the satisfaction of customers, price, habit and
history of brand usage, brand names and the level of risk and involvement of the consumer.
Ching N, Ng Mk and Wong K (2004) suggest that maximizing customer retention
rates and minimum customer defections are primary strategic objectives for most firms; this
is evident from the emphasis given to CRM.

In another study Chiung-Ju Hang and Wen-Hung-Wang (2004) empirically tested a

model examining the relations among attributes, benefits, customer satisfaction,
trust/commitment and behavioral loyalty. These concepts are tested in “Asia Trust” Bank,
Merchant Banking division in Taiwan. The loan department shows that there is positive
relation between benefits and customer satisfaction. In the deposits department also symbolic
benefits have positive significance on customer satisfaction. In the department of credit cards
experiential and symbolic benefits have significant impact on customer satisfaction.
Fecikova I (2004) States that in the contemporary global and highly competitive
economy it is fatal for a business organization to be non-customer-oriented. To survive
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organizations need to produce products and services of a very good quality that yields highly
satisfied and loyal customers. Loyalty of customer is considered to be a function of
satisfaction.
Paurab Shukla (2004) in his study addresses the effect of product usage, satisfaction
derived out of the same and the brand switching behavior in several product categories while
looking at the product involvement level in the Indian market place.
Hypotheses relating to product usage and performance, involvement, satisfaction and brand
switching behavior were generated. Product categories which include toilet soap, hair oil, two
wheelers, television and ice cream were selected for the study. Research was conducted
through structured questionnaire. Seven factors including price, perceived quality, case of
service, convenience in availability, variety of features, attractiveness of product and
advertising of the product were found to be more valid; structured questionnaire with five
point likert scale was employed to measure the significance of each factor and all the factors
were found to be valid.
Sample units were selected on the basis of the minimum criteria of owning a vehicle
and a television as these categories showed the least percentage of market penetration. The
questionnaire was distributed to 254 households and 139 usable questionnaires were returned.
Findings revealed that for the category of vehicles the purchase level was annual and above
(93.53 per cent) and the usage pattern showed daily usage level of 86.33 per cent. 28.06 per
cent of vehicle customers were ready to switch. The most affecting switching factor was
perceived quality and attractiveness of the product and the least affecting switching factor
was advertising of the product. As far as television purchase is concerned 28 per cent were
ready to switch the most affecting switching factor being attractiveness of the product price
and the least affecting switching factor being convenience in availability.
As far as soaps are concerned 23.03 per cent are ready to switch and the switching
factor is perceived quality and variety of features and the least affecting switching factor is
ease of service. Similarly for hair oil while 23.02 per cent are ready to switch the most
affecting switching factor is perceived quality and variety of features and ease of service. Ice
cream too falls in the same line. This study stated that markets should be concerned about
product involvement and its relation to brand loyalty and sticking on because brand switching
behavior cannot fully be explained by manifest satisfaction.
Rowley J (2005) on the other hand classified customers based on their loyalty. The
four classifications are: Captive, convenience-seekers contented and committed
 76

Zeo S. Dimitriaces (2006) in his research study attempts to contribute to the

knowledge of how customer satisfaction, loyalty and commitment are defined and relate to
each other in the Greek context. The study is based on 200 responses collected from 20
service providers in four service settings; financial services, retailing, entertainment and
transportation services. Both factor and reliability analyses provided satisfactory results.
Surprisingly, company satisfaction was not interpreted as a conceptually distinct construct
from customer loyalty. A conceptual overlap also emerged between attitudinal loyalty and
loyal behavioral actions such as word of mouth, whereas customer commitment was highly
positively associated with loyalty and satisfaction according to expectations. Hierarchical
regression analysis was used to investigate potential moderating effects of gender and service
setting on the satisfaction commitment and between commitment and loyalty in the sample
studied. While the relationship between customer loyalty and satisfaction as well as between
commitment and customer loyalty are well understood in the literature, the inter relationship
among those constructs are not so well illustrated. The discriminant validity of satisfaction
and loyalty needs to be further investigated. It highlights potentially effects of culture,
method and measure variance.
Andrea M. Prud’homme, Kenneth K. Boyer and G. Tomas M.Hult (2007) this
study examines customers of grocers who provide both online and traditional in-store options
to determine if there are substantial differences in customer’s perceptions of service quality,
product quality, product range and sacrifice made when using a specific channel. By better
understanding customer preferences, firms can appropriately match strategy and market
expectations. Data were gathered from 271 traditional in-store customers and 1720 online
customers from three grocers. Survey results from these two groups was analyzed using
regression analysis consisting of independent variables measuring the sacrifice of using a
given channel, and the quality of service, product and product range and dependent variables
of behavioral intentions and percent of business given to the grocer. Findings revealed that
online customers have a higher level of satisfaction with their service encounters, but lower
levels with the tangible aspects of product quality, range of products available and channel
usage sacrifices. They also spend a large portion of their grocery “wallet” with the grocer and
are less price sensitive than their in-store counterparts. Online customers place a premium on
convenience and will spend more with firms that meet this need. Given the very low profit
margins in this industry, the ability to draw and retain these customers is vital. This study
presents one of the first direct channels from the same grocery provider to examine customer
 77

perceptions for improved strategic service and product delivery. This research study is taken
into consideration for review of literature as the factors mentioned above also play an
important role in the passenger car industry.
Audhesh K Paswan, Nancy Spears and Gopala Ganesh (2007) in their study focus
on the feeling associated with being rejected by the preferred service brand, and its effect on
consumer assessment of the alternative brand. Data for this study were collected using self
administered questionnaire in the context of higher education services targeted at the
international market. Findings revealed that consumers who do manage to get their preferred
service brand tend to be more satisfied with the features of the obtained brand and exhibit
higher level of brand loyalty towards that brand.
Managers should ensure that one’s service brand is high in the consideration set. This
has implications for service branding and brand positioning as well fulfilling service brand
promise through services elements. It also has implications pertaining to winning over new
customers and retaining through superior service delivery-particularly the service
augmentation elements, and the selection and training of service delivery personnel.
Bernt Krohn Solvang (2007) in his paper develops and tests a model to explain the
variation in repurchase behavior between customers shopping for grocery products and
furniture. The analysis and results of the research is based on interview data collected from
400 adult consumers in four different stores in Kristiansand, Norway.
Main differences were researched influencing repurchase in grocery stores compared
to the furniture stores. The furniture branch is a service branch, dependent on relations
between the staff and the customer to a higher degree than a grocery shop. Accordingly, the
service quality has stronger effects on satisfaction in the furniture branch than in the grocery
branch. This study revealed that the effect of service quality on the repurchase is clearly
stronger in the furniture branch compared to the grocery branch. Repurchase in the grocery
stores is more dependent on the customers’ satisfaction and loyalty. The repeatable shopping
pattern in the grocery branch seems to reduce attitudes linked to satisfaction and loyalty. This
study also revealed that the effect of satisfaction is stronger in the grocery branch than the
furniture branch and the effect of loyalty on repurchase are also strongest in the grocery
branch. The positive effect of chain image seems to follow a similar pattern. The grocery
store customers seem to build up stronger attitudes based on repeatable shopping patterns,
and these attitudes are influenced by image-enhancing marketing strategies and tactics from
the retail chain. The grocery store customer exhibits a frequent, rather stable, shopping
 78

pattern and customer beliefs and attitudes are influenced by this behavior. This influence
translates into making affective loyalty more important in the grocery branch than the others.
This study is taken into consideration as factors such as service quality, repurchase, customer
satisfaction and loyalty are not only applicable in grocery branch, but also in the passenger
car industry.
Cooli B Keiningam T, Aksoy L and Hsu M (2007) point out that customer
satisfaction and retention are generally considered among the most important long-term
objectives of firms.
Joel Espejal, Carmina Fandos and Carlos Flavian (2007) have analyzed the
perceived quality of two traditional food products with protected designation of origin.
Specifically, this study analyses the influence of perceived quality of intrinsic attributes e.g.
color, flavor, smell, appearance and extrinsic attributes that is brand, denomination of origin,
and image of traditional product on consumer satisfaction, loyalty and purchasing intention.
Data were obtained using a structured questionnaire to consumers of Olive Oil and
Air Cured Ham food products. After the field work, a screening process was performed to
obtain 223 Olive Oil and 251 Air Cured Ham valid questionnaires.
Structural equations model was applied to relate the perceived extrinsic and intrinsic quality
with satisfaction, loyalty and purchasing intention. Findings reveal that intrinsic and extrinsic
quality attributes for new PDO of olive oil, the results reveal the existence of a significant
influence of intrinsic perceived quality on satisfaction and loyalty.
Nevertheless no evidence has been found to support the link of extrinsic attributes on
satisfaction and loyalty. Second, for the consolidated PDO of air cured ham our results show
that the influence of intrinsic perceived quality on satisfaction and loyalty are not significant.
In contrast, the influence of extrinsic perceived quality is significant in this case.
The results of this paper suggest the need to promote and increase the consumer
knowledge of brands protected under the PDO and specially the PDO itself.
Larry P Pleshko, and Samar M. Bager (2008) in their study investigate the
relationships among customer satisfaction, customer loyalty and market share in a sample of
students pertaining to their usage of health club. Data for the study was gathered from a buyer
group in a large university town in Southeast USA. Sampling frame work comprised, under
graduate business students. The data are from self-administered questionnaire. Five health
clubs are included for the study based on their membership strength. The spearman rank
correlation coefficient is used to analyze the association between the variables in the model.
 79

Results of the study indicate that the model is not as broad ranging as might be expected
since one of the three proposed relationships is not supported. Findings also suggest that there
is a positive relationship in health clubs between loyalty and market share. It is also found
that there is a negative relationship between satisfaction and market share. This is not totally
unexpected in service where smaller volumes allow for better customer service.
John Andy Wood (2008) in his paper explains the influence of environmental factors
on organizational buyers’ satisfaction with service providers using survey data from a cross
section of organizational types in a business research context.
This research introduces and tests an explicit conceptual connection between
perceptions of the environment and buyers’ assessments of satisfaction through the
evaluation set of alternatives in a structural equation model. Further, the model tests the
positive relationship between satisfaction and intention to continue in the exchange
relationship. Anchoring the study with customer loyalty or intentions to remain in the
relationship, as a direct outcome of a buyer’s satisfaction with the service relationship, family
grounds the research into the existent literature.

By testing the following, hypothesis conceptual model was built:

Hypothesis 1 – A buyer’s perception of internal environmental uncertainty will positively
influence his or her perception of the availability of alternatives.
Hypothesis 2 – A buyer’s perception of internal environmental uncertainty will negatively
influence his or her perception of service performance.
Hypothesis 3 – An increase in a buyer’s perceptions of available alternatives will negatively
influence satisfaction with the relationship.
Hypothesis 4 – An increase in buyers’ perceptions of service performance will positively
influence satisfaction with the relationship.
Hypothesis 5 – An increase in a buyers’ satisfaction with the relationship will positively
influence intentions to remain in the relationship.
Hypothesis 6 – An increase in the buyer’s intentions to remain in the relationship will
negatively influence his or her perceptions of the availability of alternatives.
To test the above hypotheses a random sample of 1000 from the membership list of
metropolitan chamber of commerce was selected. 153 usable questionnaires were used for
analysis. The model demonstrates that if the customer is not satisfied, then his or her
intention to continue with that supplier is not reinforced and the customer will increase his or
 80

her search for a viable alternative. This model also provides insights into the influence of a
buyer’s perceptions of both the internal and external environment. The supplier must also be
aware that perceptions of external environmental uncertainty will cause buyers to increase the
search for available alternatives. It is also possible that as conditions of uncertainty decreases,
the perceived value of the alternative will increase to the point that they become viable
substitutes for the existing service provider. Thus this model indicates that in a business
service contest, customer satisfaction is still a viable indicator of relationship status
Rianne Appel Meulenbrook (2008) the purpose of this paper is to add the behavioral
property literature and improve the land lord tenant relationship through exploring the effect
of office ‘keep’, push and pull factors on satisfaction and loyalty of tenants.
Structural face to face interviews with 38 office tenants are used to identify the
important push, pull and ‘keep’ factors and their effects. The results are placed within
marketing theories on competition and customer intimacy and translated into management
implications. The analysis indicates that retaining a tenant requires more relationship efforts
than competing through offering a good price/quality ration. A lot of subjectivity is involved
in the tenants’ valuation process to ‘keep’ factors, which are mostly functional. Push and pull
factors are mostly technical, but can only raise satisfaction up to a certain level. This paper
gives more insight in ‘keep’ factors and how they can help benefit the relationship between
landlord and tenant. Also it places studies on tenants’ choices and building factors within
existing marketing theories on competition. The above study pertains not only to tenants but
also analyzes customer satisfaction and loyalty in other service oriented industries such as
passenger cars.
Timothy L Keininghan, Lerzan Aksoy, Brice Cooil and Tor Wallin Andreassen
(2008) suggest that customer satisfaction is the metric managers use to gauge customer
loyalty. Even without a precise definition, satisfaction is clearly understood by customers,
and its meaning is easy to communicate. A great deal of research has gone into investigating
the impact of customer satisfaction on customer behavior and business results. The results
have been consistently positive. Higher levels of customer satisfaction are linked to retention,
positive WOM, increased share of spending and so on.
Brown et.al (2010) have analyzed the consumer’s attitude towards European,
Japanese and U.SA.cars. The country of origin plays an important role in consumer
behaviour. The brand name, lower price, and distributor’s reputation have a significant
impact in enhancing customer satisfaction, brand value and sale of passenger cars.
 81

To conclude, the literature review chapter highlights studies based on consumer

buying behavior with special reference to cars. In the Indian context such studies are very few
in numbers. There are innumerable studies on Customer Satisfaction and Loyalty. But it is
also very significant that such studies have not been conducted in India especially in the
context of purchase of cars. To address the gaps mentioned above this study will aim to
explore the buying behavior of car purchasers in the Indian context. Customer satisfaction in
the context of purchase process and after sales service will be explored. An attempt is
undertaken to understand consumers’ expectations and customer satisfaction and its effect of
loyalty towards the next purchase. Finally, this study will also test a conceptual model
connecting all these concepts.
 82

Summary of Literature Review

Table 2.1 Literature Review of buying behaviour

Key variables considered in different conceptual

Main Variable Authors
models.
Buying Behaviour Allen F. Jung 1961 to measure any effect the entry of new compact cars had
on the prices of standard Chevrolet and Ford, on the
older Compacts, Lark and Rambler, and on the two
largest selling foreign cars, Renault and Volkswagen.

Gerald D. Bell 1967 Association between self-confidence and

persuasiveness.
Fred C. Akers 1968 This research aims to study the buying behavior of
Negroes and Whites in an urban environment.
James H. Myers and Mark In this study what attitudes mean in terms of decision
I. Alpert 1968 making and especially buying action is discussed.
William H. Reynolds The authors emphasizes that keeping attuned to fashion
1968 trends is crucial to the success of companies in many
industries.
Joseph W. Newman, The use of AID and MCA techniques in combination
Richard Stadin. contributed to understanding differences in purchase
1971 decision times.
Harry L. Davis Household decision making is judged on the extent to
1976 which it influences family counseling, information
dissemination and marketing research.
John S Greenless The authors attempt to measure the impact of the price
1980 of gasoline on the mix of new automobile purchases.

Dennis W. Rook 1987 Is of the opinion that impulse buying is an important

aspect of consumer Buying Behavior.

Narasimhan Srinivasan, A structural equation model of the determinants of

Brain T. Ratchford external search for automobiles is developed and tested.
1991
Contd..
 83

Literature review of buying behavior

Key Variables considered in Different

Main Variables Authors
Conceptual Models
Buying Dardis,Soberon, Ferrer, The purpose of this study was to Investigate the
Behaviour Horacio 1992 impact of household characteristics and
preferences for Japanese cars on the demand for
small cars in the USA.
Michele D. Bunn Develops classification scheme of buying
1993 patterns and situations. The use of a particular
buying decision approach depends on 4
situationalcharacteristics:1)purchase importance
2) task uncertainty 3) extensiveness of choice 4)
Perceived buyer power.
Sir William P, Deliberation process and time taken for actual
Narasimhan Srinivasan purchase is studied by these authors in their
1994 study.
Chao Paul, Gupta according to the authors with the increasing
Pola B, global competition, country-of-origin remains
1995 topic of Considerable interest.
Sridhar Moorthy, Brain T This study examines consumers’ information
Ratchford and Debabrata search behavior for New automobiles.
Talukdar 1997
Fred U.Ede and The attitude of African-American consumers
Bhagaban Panigrahi towards US and Japan made automobiles are
2000 explored in this study
Leonard L. Berry Lewis P The authors points out that managers have
Carbone and Stephen H. become aware of creating value for their
Haeckel 2002 customers in the form of experiences.
Ellen Se Well, Charles The survey was designed to compare the search
Bodkin 2002 process of online and off Line buyers.

Contd..
 84

Literature review of buying behavior

Main Key Variables considered in Different

Authors
Variables Conceptual Models
Buying Gaby Odekerken-schroder, This study analyses whether consumer segments
Behaviour Hans ouwer sloot, Jos based on relational aspects, service aspects or
Lemmink, Janjaap semeijn price aspects have different preferences
2003 concerning these three key decision making
variables when buying a car.
Gary Reed, Vicky Story, The authors opined that purchase of a car is a
Jim Saker 2004 highly involved process when compared with
other retail experiences.
H.S Sandhu and Mandeep Conducted a study of Brands Competitiveness
Kaur, 2004 and Positioning Analysis with respect to
Passenger Car Market in India
Bo Edvardsson Bo enquist, Through this research the authors developed a
Robert Johnston 2005 new model depicting how organizations can help
customers test out and experience a service prior
to purchase and consumption or use.

Eliane Pereira Lamith Brito 30 services attribute on car maintenance services

Ricardo luis, Beneduzzi and other purchase behavior determinants such as
Aguilar and Luiz Artur.L. perceived value is considered for the study.
Brito 2007
Andreas Herrmann, Lanxia, This paper aims to link concepts of price fairness
Kent B Monroe, Frank and customer satisfaction and empirically
Huber 2007 demonstrate the influence of perceived price
fairness of satisfaction judgment.
Dr. Kambiz Heidarzadeh This research, in the framework of an explorative
Hanzaee 2008 study, assessed the role of COO in consumers’
evaluation of foreign products from Iranian
customers’ point of view.
 85

Table 2.2 Literature review of Customer Expectations

Main Variable Authors Key variables considered in Different conceptual models

Consumer Kwortnik et.al (1997) pointed out through his research study that consumers will
Expectations be interested in purchasing the product if the product is of
high value
Sweeney Hauskeencht, Analyzed the concept of cognitive dissonance over the
Souta G and Sweeney entire decision making process.
J (2000)
Karnikey Budhwar The empirical observations made through the process of
2004 this research highlight that despite the fact that
comparatively little industry research takes place the
average operator is fairly aware of their customers’ current
demands
Heejin Luin and Alan Opines that growing number of consumers are turning to
J. Dubinsky (2004) the internet to buy goods and services.
Sagar et.al (2004) concluded as to how the Indian car industry has advanced
technologically
Yanni Afthinos-, In this study it is observed that customers’ expectations of a
Nicholas D service organization are considered to be of primary
Theodorakis and importance in assessing quality.
Pantelis Nassis (2005)
Kaur and Sandhu investigate the expectations or the features considered by
(2006) the customers while purchasing a particular brand of car
Nicole 2006 Has studied how occupational health department gets to
know about customer’s needs wants and expectations.
Chidambaram and have opined through their research that there are certain
Alfread (2007 important factors that influence the customer expectations
with respect to the purchase of car.
Kotwal (2009) investigates through his research that buyer’s expectations
during the purchase of the car include aspects such as
space, comfort and luxury in case of a mid-size saloon or
sedan.
 86

Table 2.3 Literature review of Customer satisfaction and loyalty

Key variables considered in

Main Variables Authors
Different conceptual models
Customer D. Maynard Phelps Presents discussion of the significant changes that have
satisfaction and 1965 taken place in the automobile industry during the sixties,
Loyalty. and the ones that had taken place.
Gerald D. Bell opines that the consumers differ markedly in their
1967 susceptibility to persuasion attempts.
Gilbert A. Churchill the authors investigate whether it is necessary to include
Jr. and Carol disconfirmation as an intervening variable affecting
Suprenant satisfaction as is commonly argued, or whether the effect
1982 of disconfirmation is adequately captured by
expectations and perceived Performance.
David Furse, Girish This study aims at focusing more extensively on the
N Punj, David W. participation of others in the decision making unit.
Stewart 1984
Valarie A. Zeithaml This paper aims at (a) defining the concepts of price,
1988 quality and value from the consumer’s perspective; (b) it
relates the concepts in a model and develops propositions
about the concepts.
Myers James H Opined customer satisfaction usually has been defined in
1991 terms of perceived performance of a product or service in
relation to the expected performance prior to purchase or
use.
Fornell 1992 has identified through his research study that there is a
strong positive correlations between loyalty and
satisfaction
Dawn Iacobucci 2 Studies with divergent methodologies were conducted to
Amy Amstrom, keit examine whether or not quality and satisfaction have
Garyson 1995 distinct antecedents causes, consequential effects or both

Contd..
 87

Literature review of Customer satisfaction and loyalty

Main Key variables considered in Different

Authors
Variables conceptual models
Customer Claes Fornell, Michael D. The American Customer Satisfaction Index
Satisfaction Johnson, Eugene W. Anderson, (ACSI) is market based performance measure for
and Loyalty Jae sung cha, Barbara Everitt firms, industries, economic sectors, and national
Bryant 1996 economies.
Ram Mudambi and Susan This paper attempts to test whether the close but
Helper 1998 adversarial model is supported by data from the
US auto industry.
Christopher D. Ittner and David This research examines three questions on the
F. Larcker value relevance of customer satisfaction measures.
1998
Ruth N. Bolton 1998 This article models the duration of the customers’
relationship with an organization that delivers a
continuously provided service, such as utilities,
financial services, and telecommunications.
Bo Ed Vardsson, Michael D Studied customer satisfaction and loyalty between
Johnson, Anders Gustafsson, services and products. A conceptual model links
Tore Strandik (2000) satisfaction, loyalty and performance
Perugini, Marco and Richard P Scrutinized the role of desire and anticipated
Bagozzi 2001 emotions in goal.
Bowen J.T and Chen S L points out that loyal customers contributes to
2001 company profitability by spending more on
company products and services, Via repeat
purchasing, and by recommending the
organization to other customers
Lien Ti Bei, Yu Ching Chiao The purpose of this study is to explore the effects
2001 of 3 consumer perceptions on satisfaction and
loyal behavior.

Contd..
 88

Literature review of Customer Satisfaction and loyalty

Main Key variables considered in

Authors
Variables Different conceptual models
Customer Edward Conlon, Sarv In this paper, relationship between quality
satisfaction Devaraj, represented by consumer rating and quality related
and loyalty Khalil F Matta 2001 activities by the consumer, represented by
maintenance activities in the automotive industry.
Fullerton G Brings to notice that recent studies have been built
2003 upon customer commitment as a key mediator of the
relationship between customers’ evaluations of a
firms’ performance and the customers’ intentions
regarding future relationship with a firm
Palto Rajan Datta Explanatory research was conducted to investigate
(2003) the major factors that influence the consumers brand
loyalty in the consumer goods market in U.K.
Ching N, Ng Mk and Suggests that maximizing customer retention rates
Wong K (2004) and minimum customer defections are primary
strategic objectives.
Chiung-Ju Hang and Empirically tested a model examining the relations
Wen-Hung-Wang among attributes, benefits, customer satisfaction,
2004 trust/commitment and behavioral loyalty.
Fecikova I 2004 To survive organizations need to produce products
and services of very good quality that yield highly
satisfied and loyal customers. Loyalty of customer is
considered to be a function of satisfaction.
Paurab Shukla Hypotheses relating to product usage and
2004 performance involvement satisfaction and
Brand switching behaviour was generated.
Rowley J On the other hand classified customers based on their
2005 Loyalty. The four classifications are: Captive,
convenience-seekers contented and committed.
Contd..
 89

Literature review of Customer satisfaction and loyalty

Main Key variables considered in

Authors
Variables Different conceptual models
Customer Zeo S. Dimitriaces 2006 The author through this study attempts to contribute to the knowledge
satisfaction of how customer satisfaction loyalty and Commitments are defined
and loyalty and relate to each other in the Greek Context.
Andrea M. Prud’ homme, This study examines customers of grocers who provide both online
Kenneth.K.Boyer and G and traditional in-store options to determine if there are substantial
Tomas M Hult 2007 differences in customer’s perceptions of service quality, product
quality, product range and sacrifice made when using a specific
channel by better understanding customer preferences.
Audhesh.K.Paswan,Nancy Findings revealed that consumers who do manage to get their
Spears and Gopala Ganesh preferred service brand tend to be more satisfied with the features of
2007 the obtained brand and exhibit higher level of brand loyalty towards
that brand.
Bernt Krohn Solvang Through this paper develops and tests model to explain the variation
(2007) is repurchase behavior between customers shopping for grocery
products and furniture.
Joel Espejal, Carmina Specifically, this study analyses the influence of perceived quality of
Fandos and carlos flavian intrinsic attributes e.g. color, flavor, smell, appearance and extrinsic
2007 attributes that is brand denomination of origin and image of
traditional product on consumer satisfaction loyalty and purchasing
intention.
Cooil B, Keiningam T, Points out that customer satisfaction and retention are generally
Aksoy L and Hsu M (2007) considered among the most important long-term objectives of firms.
Timothy L Keininghan, Higher levels of customer satisfaction are linked to retention, positive
Lerzan Aksoy, Brice Cooil WOM, increased share of spending and so on.
and Tor Wallin Andreassen
2008
Larry P Pleshko, Samar M. this study investigates the relationships among customer satisfaction,
Bager (2008) customer loyalty and market share in a sample of students pertaining
to their usage of health club.

Contd..
 90

Literature review of Customer satisfaction and loyalty

Key variables considered in

Main Variables Authors
Different conceptual models
Customer John Andy Wood The model demonstrates that if the customer is not
satisfaction and 2008 satisfied, then his or her intention to continue with
loyalty that supplier is not reinforced and the customer
will increase his or her search for a viable
alternative. This model also provides insights into
the influence of a buyer’s perceptions of both the
internal and external environment.
Rianne Appel The analysis indicates that retaining a tenant
Meulenbrook requires more relationship efforts than competing
2008 through offering a good price/quality ration.
Brown. et.al Analyzed the consumer’s attitude towards
2010 European, Japanese and U.S.A.
 91

CHAPTER 3

RESEARCH DESIGN

Contents Page No
----------------------------------------------------------------------------------------------
3.1 Introduction to Research Problem 72
3.2 Statement of Problem 75
3.3 Objectives of the Research Study 77
3.4 Hypothesis 79
3.5 Exploratory Study 85
3.6 Estimation of Sample Size 87
3.7 Reliability Measures 94
----------------------------------------------------------------------------------------------

The initial section of the Research design dwells upon the research problem in detail.
It also focuses on customer satisfaction. Statement of the problem, probes into the issue
identified for the research i.e. relationship between customer satisfaction and loyalty. The
objectives of research propose the three major objectives taken into consideration for the
research. The hypothesis takes into consideration the assumptions that are to be tested. Before
testing the hypothesis, some of the sub-sections also deal with scope and significance of the
study. The methodology of the study takes into consideration exploratory and descriptive
research study. Estimation of the sample size justifies why a certain figure is taken as the
sample. This aspect is justified through statistical formulae. Further, a questionnaire is the
tool used for the data collection. The reliability of the instrument (questionnaire) is measured
through reliability measures.
 92

CHAPTER 3

RESEARCH DESIGN

3.1 Introduction to Research Problem

The important aspect that the marketers/manufacturers/firms, have to consistently
monitor is customer satisfaction and customer loyalty, because they determine the survival of
the firm in the long run. Customer satisfaction is the new buzzword of the millennium, but
the concept as such is not new. The companies or the firms striving for satisfying customer’s
needs/wants through their products/services are indicative of their good marketing strategies.
By Marketing we do not always relate to the 4’Ps’ (Product, Price, Place, Promotion), but
rather being customer oriented or customer focused, or customer driven.
Customer satisfaction is now-a-days a part of relationship management, or firm’s
CRM strategies, that focuses on long term relationship building with existing as well as new
customers. For Instance Maruti Suzuki has been successful in the Indian Market because of
cars being focused on satisfying the customer needs/wants and also exceeding them. The
concept of customer satisfaction/dissatisfaction is the central theme for the concept of
marketing. Its importance is derived from the consensus that when a customer is satisfied it
leads to repeat purchase, while the customer is dissatisfied it leads to shift in the loyalty to
competitive firms/companies.

Further the concept of customer satisfaction has been widely used by the marketers to
design and manage marketing strategies, which focuses on retaining the existing customers.
By retaining the existing customers, they create a positive word of mouth about the firm to
others, which helps them in the long run to acquire new customers. With the increasing pace
of globalization, that has enhanced competition among different players, firms are rather
giving more importance about retaining their customers in both domestic and international
markets.
Hence designing effective marketing strategies requires the understanding of the
relationship between customer satisfaction and loyalty, which have been discussed in the
following sections of this chapter.
 93

3.1.1 Customer Satisfaction and Customer Loyalty

An important measure used by many firms to monitor their performance in the market
is to measure the percentage of satisfied customers that they possess. The measurement of
customer satisfaction index is a widely used tool by many companies which in turn enables
them to find out the extent of customer satisfaction with respect to product/service. Customer
satisfaction also enables the estimate of customer loyalty. It enables the firms or the
companies formulate strategies to enhance satisfaction or loyalty. Some customers have their
satisfaction- loyalty linked to the product alone.
Customer satisfaction is more frequently used as predictive measurement of future
customer purchases as hypothesized by Newman and Werbel (1973).
“Keller (1991) evaluated customers who purchase specific category of product for the
first time and were generally found to focus on attributes/benefits”. Satisfied customers have
greater propensity for repeat purchase of the product/service as reported by Zeithaml, Berry
and Parasuraman (1996).
For instance, when a customer decides to purchase a new brand of car, he/she looks at
aspects such as evaluation of the product in terms of quality, ambience, legroom, driving
comfort, positive experience in the dealer’s showroom, and courtesy. After the purchase of
the car they look for consistency in performance, effective mileage, and good after sales
service.
Hence they may focus on small passenger car to meet their budget criterion. Further it
is found through the research on customers using small passenger cars that satisfaction is
measured by factors such as capacity to understand customer needs, knowledge and attitude
of the mechanics, prompt delivery, effective customer care, information about the cars,
technology, capacity of engine, driving comfort and maintenance, safety measures, color,
style, accessories, engine pickup etc.
Customer satisfaction can be considered as the central determinant in all phases of
supply/contact chain. It is found through research that satisfied customers shall become less
receptive to the competitor’s offering (Fitzell 1998). Further satisfied customers apparently
show their preferences towards the existing brand of car when it comes to upgrading of their
car.
The customers of Maruti are generally brand loyal because of the reputation/goodwill
of the company and also the quality of service rendered to their customers. There lies the
 94

fortune of many automobile manufacturers and dealers. Hence the satisfaction of customers
always leads to loyalty and they are long term assets of the company.
Loyalty: “Loyalty in the marketing context may be defined as a willful, voluntary,
repeated choice of a specific brand of a product or type of service. Loyalty caters to fulfilling
a particular category of need”. In the case of one-time purchase, loyalty could be explained in
terms of the extent of commitment to the brand loyalty, commitment to the brand selected,
the positive attitude developed towards using the brand selected and the positive image the
customer projects about the brand he owns. (H Peeru Mohammed)
Researchers have found that there exists a strong correlation between satisfaction and
loyalty. The relationship between satisfaction and loyalty changes over time. However the
relationship between customer satisfaction and loyalty is dependent on the quality of the
product/service. For instance, in the automobile industry customer satisfaction depends upon
customer service and quality of product.
Customer loyalty is supposed to positively link to satisfaction and profitability.
Further the linkage between satisfaction and profitability is perceived to be self evident that
the relationship often is taken for granted. Nevertheless, only a few studies have examined
this fundamental relationship. Here the focus is on the individual customer with respect to the
links between customer satisfaction, customer (action) loyalty and customer profitability.
In practical terms, firms generally focus on customers repetitive purchase behaviour
which can apparently indicate customer preference for a brand or product (Bowen and
shoemaker 1998).
Generally the relationship between customer satisfaction and loyalty is found to have
non-linear and asymmetric threshold, because when the purchase satisfaction increases above
a threshold (maximum), the loyalty tends to increase and the vice-versa.
Further customer buying behaviour comprises a series of steps such as information
search, evaluation of alternatives, purchase- post purchase evaluation, problem solving
paradigm or through the progression of consumer’s choice from product class to brand
choice. These steps also play an important role in enhancing the long term customer
satisfaction thereby leading to loyalty.
Finally when the customer satisfaction enhances, he/she is able to purchase the
product, enhancing his/her standard of living/quality of life, thus enabling the marketers/firms
to generate profits, through the positive product experience that the customer derives by
being satisfied and thus enhancing long-term loyalty.
 95

These factors of customer behaviour play an important role in contributing to the

loyalty in their further purchases. Thus the researchers have found in their study that
significant differences exist between the loyal and the non-loyal brands and also high
correlation exists between self image and product user ratings.
Hence this research is an attempt to study the dimensions of customer satisfaction and
loyalty with specific reference to the major brands of automobile companies such as Maruti,
Hyundai and Chevrolet and a few of Tata Nano users. Further, the dimensions considered for
the research helps in understanding the customer satisfaction and whether satisfaction leads to
loyalty can be ascertained from this study. A survey of customers was undertaken in
Bangalore city for identifying the extent of satisfaction level with respect to these major
brands.

3.2 Statement of Problem

Most of the studies are either from the buyer’s perspective or the dealer’s perspective.
From the literature review, it is evident that there is no comparative study focusing on the
relationship between customer satisfaction and loyalty in the passenger car market in India.
This research is an attempt to measure the satisfaction level of customers with respect to the
various dimensions enhancing customer value. With the proliferation of the Indian passenger
car market and introduction of many models in India, offering value proposition to the
customers in the passenger car market, the car segment has been largely diversified and
differentiated.
The main problem area of the study is intended to focus the relationship between
customer satisfaction and loyalty with respect to the users of the passenger car brands such as
Maruti, Hyundai, Chevrolet, and Tata Nano. Further the dimensions of customer satisfaction
considered for the study are purchase process, after sales service, vehicle performance,
perceived value and loyalty. The study also aims at establishing the relationship among these
dimensions. This research also attempts to focus on the identified research gaps and provide
suitable solutions.
Thus the thesis is titled “Relationship between Customer Satisfaction and Loyalty,
Among Passenger Car Users”.
 96

3.2.1 Research Gaps Identified

We can see that most of the research pertaining to different conceptual models
concentrates mainly on the intangibles like cooperation, attitudes, perception, loyalty, and
shared value. The tangible benefits of customer satisfaction like product features, service
benefits, market segments, brand competitiveness, value, quality benefits, retention, provide a
lot of scope for further studies/ research in the Indian context. Further, economic benefits like
direct product cost/ pricing, quality, performance measures creates enhanced value to
customer’s loyalty along with other added benefits. There is little research which focuses on
these dimensions.
Value is created between customer and the manufacturer by focusing on the parameter
of satisfaction, which thereby creates loyalty. As far as customer is concerned, the net benefit
is derived from the manufacturer/ service provider. The manufacturer on the other hand seeks
long term commitments from the customers, which thereby enhances the brand loyalty and
also the net purchase value. It is thereby evident from the literature review that there are a
few relevant questions, which need further introspection :
• What is the relationship between customer satisfaction and loyalty with reference to
automobile/ passenger cars?

• What are the significant dimensions of customer satisfaction, which influence the
customers in the purchase of car and also their importance?

• What are the effects of demographic variables such as gender, age on the customer
satisfaction and loyalty?

• What enables customers to remain loyal to a specific brand of automobile/passenger

car?

• What influences the purchase process of customers and also its dimensions?

• What are the dimensions of after sales service?

• What are the effects of perceived value before purchase and actual vehicle
performance and perceived value?

• What are the measures of appropriate model of customer satisfaction?

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3.3 Objectives of the Research Study

The purpose of this research is to study the relationship between customer satisfaction
and loyalty among passenger car users. In the background explained through research gaps,
the following three objectives were identified for the research.

1. To understand the relationship between loyalty and gender

2. To analyze the relationship among various dimensions of customer satisfaction.
3. To derive a model for loyalty and dimensions of customer satisfaction.
3.3.1 Scope of the Study
The study is conducted among small car owners of Maruti, Hyundai and Chevrolet,
and Tata Nano. These are the four prominent players in the small car segment. Further Reva
is not considered because of its small segment of customer population in the market and also
because it belongs to the electric car segment. The brand owners of Swift, Alto and Zen from
the Maruti Udyog Limited will be considered for the study. Owners of brands of Santro, Getz
and i10 from Hyundai will be the respondents for the study. From Chevrolet, owners of
Spark, Aveo and Aveo U-VA will be third set of respondents. 150 car owners from each
company adding up to a total of 450 respondents and 50 customers of Tata Nano will be
empherically tested for the study. Owners of more than two years and less than six years are
considered for the study as they are the potential customers who will plan to either go in for a
new car in the same segment (small cars) or will plan to upgrade from a small car to a
medium size/luxury car. Samples will be restricted to Bangalore.

3.3.2 The Significance of the Research

This research aims to understand the relationship between customer satisfaction and
loyalty with specific reference to passenger cars in Bangalore city. In the present scenario of
automobile Industry, one can witness competitiveness in terms of quality, pricing and
technology. The tangible and intangible value created by the manufacturer plays a dominant
role. It is evident from the literature review/survey that most of the research focuses on
intangible variables like attitudes, perceptions, satisfaction, loyalty, and creating customer’s
value. Tangible benefits like product benefits, vehicle performance, after sales service,
purchase process dimensions provide a lot of scope for further research in the highly
 98

competitive Indian passenger car segments. This research is expected to provide significant
insights into customer behaviour in terms of satisfaction, and its effect on the loyalty in
general frame work of Relationship Management strategies.
3.3.3 Key variables considered
To understand the customer satisfaction and loyalty and also the relationship between
them, we have considered nine variables, including demographic profile variables, of which
five variables were considered for the pilot and the main study. The theoretical framework
with respect to these variables is discussed in detail in chapter 1.
The review of literature and exploratory research with the users suggested the main
aspect of customer satisfaction, which can help in understanding the customers and their
behaviour. Customer’s satisfaction also leads to enhancement of loyalty, which enables them
to retain the product/service with them for a long period of time and also enables them make
repetitive purchases. This is ultimately considered as the end point of most of the customer
oriented research.
In the first situation, perceived value before purchase plays an important role in
ensuring that the customers have a pre-conceived notion before the actual purchase of the
product. In the second situation called purchase process, the customer before making the
purchase of the product goes through this process of purchase or pre purchase evaluation. In
the third situation, called the after sales service, the customer gives importance to the service
after the purchase of the product. The after sales service is one of the important factors, which
is given due prominence by a majority of customers. In the fourth situation, the vehicle
performance and perceived value plays an important role in ensuring that the customer’s
perceived value regarding the product performance after the purchase of the product, plays a
important role in enhancing his positive perceptions and attitudes about the product, as the
product matches his performance expectations. After this stage, if the product meets or
exceeds his expectations, satisfaction occurs and vice versa. In the fifth situation, loyalty
plays an important role in ensuring that customers are loyal to a particular brand/product
either because of services offered by the manufacturer/dealer, brand name/image, or any
other factor.
The other variables considered are mainly the demographic variables such as age,
income, gender, family size, which play an important role. The demographic variables
mentioned above are considered mainly for the main analysis.
 99

Fig 3.1 represents the linkages between dependent and independent variable for
customer satisfaction in consumer markets. Fig 3.2 represents the dependent and independent
variables for customer satisfaction and loyalty and the relationship between the two. The
theory supporting the models and the hypothesis formulation is further explained in this
chapter. The models are empirically tested using multiple regression equation and structural
equation model using AMOS. Multiple regression analysis is performed on customer’s data
to find out the independent variable, which explains the dependent variables.

3.4 Hypothesis
The hypothesis is logically deduced statements from the theoretical framework alone.
This refers to the anticipated outcome or possible answers to the research questions. The
formulation of hypothesis is detailed further in this chapter.
 100

Figure 3.1 Linkage between Loyalty Sub dimensions and Gender for
Hypothesis (1)

To understand the relationship between Loyalty and Gender

LOYALTY &
LOYALTY Gender
SUB DIMENSIONS H1(a)
H1(a)

(Dependent variable)-Loyalty (Independent Variable) - Gender

Figure 3.2 Linkage between dimensions of customer

satisfaction for Hypothesis II (a & b)
Subdimensions of Hypothesis (1)

VEHICLE Perceived Value

PERFORMANCE before purchase
H2(a) H2(a)
To analyze the
Relationship between
dimensions of PURCHASE After Sales
customer satisfaction PROCESS Service
H2(b) H2(b)
 101

Fig-3.3- Relationship between Dimensions of customer satisfaction for Hypothesis II ( C )

Purchase Process
To analyze the Relationship H2(C)
between dimensions of
customer satisfaction
After Sales Service
Loyalty H2(C)
H2(C)

Vehicle Performance
H2(C)

Perceived value before purchase

H2(C)

(Dependent variable)-Loyalty (Independent variable)-Dimensions of Customer

Satisfaction i.e. purchase process, after sales service,
Vehicle performance, perceived value before
purchase.
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HYPOTHESIS

Table 3.1 Hypothesis to be tested

Objectives Hypothesis to be Tested

Objective 1
Hypothesis 1
To Understand the Relationship
between Loyalty and Gender
(a) To understand the Relationship Hypothesis Ha: There is a significant positive
between overall loyalty and gender relationship between loyalty and gender with
respect to the brand of cars.
for each brand of car.
(b) To understand the relationship
Hypothesis Hb: There is significant positive
between each sub dimension of relationship between each sub dimension
loyalty and gender for brand of car. loyalty and gender for brand of car.
Objective 2 Hypothesis 2:
There is a significant positive:
To analyze the relationship among
(a) Relationship between Vehicle Performance
various Dimensions of Customer
and Perceived value before Purchase.
Satisfaction. (b) Relationship between Purchase Process
and After Sales Service.
c) Correlation among dimensions of Customer
Satisfaction.
Objective 3 Hypothesis 3
To Derive a Model for loyalty and There is positive association between
Dimensions of Customer loyalty and dimensions of customer
Satisfaction using Regression satisfaction such as a) Purchase
Model and Structural Equation Process b)After Sales Service c)
Modeling. Vehicle Performance and Perceived
Value d) Perceived Value before
Purchase.
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Table 3.2 Objectives and Hypothesis and Relevant statistical Test used

Number of
Sl.
Objectives Hypothesis Test Used
No
Formulated

To Understand the
1
Relationship between 1 Independent sample T
Test
Loyalty and Gender

To analyze the
2 Paired Sample T Test.
relationship among 1 Correlation.
various dimensions of
customer satisfaction

3 To Derive a Model for

Loyalty and Dimensions
1 Multiple Regression
of Customer
Structural Equation
Satisfaction using Modeling
Regression Model and
Structural Equation
Modeling

Totally 3 Objectives Totally 3 Totally 5

Hypotheses Test Used
 104

3.4.1 Operational Definition of Small Cars

The term "small car" is both relative and subjective. A small car in the US or the
Middle East is regarded as big in countries such as India and Indonesia. Within a particular
country, too, the small car market has fairly heterogeneous products. While a car equipped
with the latest technology such as the Suzuki Swift is a small car, the basic Nano, which is
available at one-third the price of the Swift, also belongs to the same segment.
A car that has limited or no luxury features and is more functional, offering customers basic
mobility and value for money, can be considered a small car. Excise duty rules in India define
a small car as one that is shorter than 4,000 mm with an engine size smaller than 1,200 cc, if
gasoline, and 1,500 cc, if diesel. From a price perspective, it is difficult to objectively define
a small car. According to the standard Indian income classification, any car costing up to INR
500,000 can be considered a small car. For the purpose of discussion and research, we have
considered the Society of Indian Automobile Manufacturers' (SIAM's) segmentation,
according to which the mini segment and the compact segment constitute the Indian small car
market. India is primarily a small car market, mainly due to the country's demand for a cost-
effective mode of transportation. Of every four cars sold in India, three are small. Domestic
sales in the small car segment more than doubled from 0.54 million units in FY04 to 1.2
million units in FY10. The small car segment is also driving India's car exports, contributing
95% to the country's total exports.

In 2009, India surpassed Japan and became the largest small car market in the world,
accounting for the sale of around 900,000 small cars, as compared to 700,000 sold in Japan.
India is now the second-largest exporter of small cars, behind only Japan. Led by small car
exports, the country surpassed China in 2009 by exporting 412,256 passenger vehicles as
compared to China's exports of 369,600 units (including commercial vehicles [CVs]) during
the same period.
The customer satisfaction and loyalty and Relationship dimensions are explained in
detail in previous chapters of the thesis.
3.4.2 Geographical Area to be Covered
The geographical area of study was limited to Bangalore city.
3.4.3 Reference Period
The Data collection was done for 6 months from Aug 2011 till Jan 2012.
 105

3.4.4 Methodology
For the present research conducted, a two stage approach was adopted. An exploratory
research was initially conducted, followed by descriptive study. Both these studies are
considered to be ex-post facto research; exploration was done at the initial first stage with
limited objectives as follows:
1. Listing of items to be used in item analysis
2. Developing the final questionnaire.

3.5 Exploratory Study

This sort of study requires people who are competent and can contribute to new ideas.
They may be carefully selected as respondents to ensure that there is a representation of
different types of experience. The researcher after discussing with the guide prepared a list of
respondents both from academic and industry based on the judgments of those who are
supposed to be knowledgeable in the area of our research. For this purpose, academic experts
and intermediaries, i.e. dealers of the major brands surveyed were consulted before framing
the final questionnaire. This was very useful in listing the items, which were to be considered
for item analysis for developing the final questionnaire. These items are indicated in
(Appendix A)
3.5.1 Descriptive Study
In contrast to exploratory studies the descriptive studies are more typically well
structured with clearly stated hypothesis and statistical techniques used for testing hypothesis.
3.5.2 Type of Survey Used
When only a sample of the universe is studied, the study is called a sample survey.
For this study, sampling was adopted, since the population to be studied was relatively large.
Sampling can also be used for consumer oriented studies, in which either the marketers or the
researchers may be interested in studying the relatively large, but similar population.
Sampling was adopted for this study, since it provides quicker results, reduces the time,
improves the quality of study, for instance, the possibility of better interviewing, more
thorough investigation of missing, wrong or suspicious information, better supervision, better
processing is greater in sampling than in census i.e. complete coverage. For instance, the
accuracy of decennial population censuses in USA, India and other countries is checked by
making sample surveys.
 106

3.5.3 Population
The population is defined in terms of 1) element 2) units 3) extent, and 4) time
1) Elements:The sampling element used in this research was the human respondent, i.e.
the consumer/customers who were using the cars .They were of the following
categories:

Customers who were using the passenger car of the brands Maruti, Hyundai and
Chevrolet and Tata Nano, customers who would change their car after a period of
time, and would either buy from the same manufacturer or a different manufacturer of
small cars. Customers of the major dealers of the above mentioned brands, were also
included in the element.
2) Units of Study: For the study that was conducted, the researcher had directly selected
some individual customers in a single step; the sampling unit is also the element, i.e.
the customers using specific brands of passenger cars, mentioned above. Hence the
unit of study includes:
Passenger car customers who use various brands like Maruti, Hyundai and Chevrolet
and Tata Nano.
3) Extent The passenger car owners/users based in southern India, Bangalore city only.
4) Time:The data collection was done for six months in Bangalore city during Aug 2011
till Jan 2012.

3.5.4 Frame of Reference The RTO of Bangalore city provided a list of customers who
were using brands such as Maruti, Hyundai and Chevrolet and Tata Nano. Further, the
customers were selected by the researcher through his own convenience, based on the
frame of reference provided.

3.5.5 Population size The population chosen for the research study is not the entire
population since it is very large. The quota sampling method was used for
determining population size. The number of units of population was estimated from
the statistics collected from the RTO s in Bangalore, for the brands such as Maruti,
Hyundai and Chevrolet, which are as follows:
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Table 3.3 Classification of samples through Quota Sampling

Quota (in units) user

Brands of Cars
of car
Maruti 8,00000
Hyundai 1,40000
Chevrolet 50,000
Tata Nano 10,000
TOTAL 10,00000

Total users of passenger car taken into consideration for the study: 500 (0.0005 % of
total population) - (Period: 2006-2011 for brands such as Maruti, Hyundai, Chevrolet and for
Tata Nano-2009-2011)
Source: (Five Regional Transport offices in Bangalore during Dec 2011)

The population was estimated during the period of 5years for Maruti, 5 years for
Hyundai, consisting of 2 dealers, and 4 years for 1 dealer. 5 years for Chevrolet for 2 dealers
and 4 years for 1 dealer of Chevrolet, and 2 years for Tata Nano. The above figure also
includes the models that were not considered in the above three brands such as Eeco, Swift
desire, Baleno, Hyundai Ascent, Verna, Tavera

3.6 Estimation of sample size:

The formula for computing ‘n’ the sample size required to carry out the study is:
n= (Zs/e)2
In the above formula, Z, s and e represent the following:

Z: The Z value represents the Z score from the standard normal distribution for the
confidence level desired by the researcher. For example a 95% confidence level would
indicate (from a standard normal distribution for a two sided probability value of 0.95) a Z
score of 1.96. Similarly, if the researcher desires a 90 percent confidence level, the
corresponding Z score would be 1.645 (again, from a standard normal distribution, for a
probability of 0.90). Generally 90 or 95 percent is adequate for most of market research
studies. Here we will be using Z=1.96, equivalent to 95 percent confidence level in our
calculations.
 108

s: The s represents the population standard deviation for the variable which we are
trying to measure from the study. By definition this is an unknown quantity, since we have
not taken a sample yet. So the question of knowing the value of‘s’ the population standard
deviation, does not arise.
However, we can use a rough estimate of the population standard deviation for the
variable being measured. This can be obtained in the following ways:
1. If past studies have measured this variable, we can use this standard deviation of the
variable from one of the studies of recent past. It serves as good approximation.

2. If the minimum and maximum values of the variable can be estimated, then the range
of the variable’s values is known. Range = maximum- minimum value. Assuming
that in practically, all variables, 99.7 percent of the values of the variables would lie
within ±2.925 standard deviations of the mean. We could get an approximate value of
standard deviation by dividing the range by 5.85

The logic of this is that range is equal to 6 standard deviations for most of variables.
e: The third value required for calculating the sample size for the study is ‘e’, called
tolerable error in estimating the variable in question. This can be decided only by the
researcher for the study. The lower the tolerance, the higher will be the sample size. The
higher the tolerable error, the smaller will be sample size required.
Now let us apply the above mentioned formula for our research and foresee the results.
In the research study that we had undertaken for studying the relationship between
customer satisfaction and loyalty with reference to passenger car users. We are measuring the
satisfaction on a scale of 1 to 5
The questionnaire that the researcher had used for the research consisted of 15
questions and questions with scale ranging from 1- 5. 1 represents strongly disagree and 5
represents strongly agree. The questionnaire consisted of 15 questions. Questions 1-10 were
pertaining to demographic variables like age, gender, income, employment and brand related
aspects, which were continuous variables. Questions 11-15 were pertaining to customer
satisfaction and loyalty, which was measured on a 5 point rating scale, explained as above.

We apply the formula discussed above to arrive at the sample size that we have used
for research.
n= (Zs/e) 2 is the formula for variables which are continuous or interval scaled.
 109

Z let us assume that we want a 95 percent confidence level in our estimate of

customer satisfaction level for the study. Thus from the standard normal distribution tables,
(for 2 sided probability value of 0.95), the Z value is 1.96
s: Let us assume that such a customer satisfaction study was not conducted in the past
by us. We have no idea of the standard deviation of the variable ‘customer satisfaction’. We
can thus use the rough approximation of range divided by 5.85 to estimate the sample
standard deviation.
In this case, the lowest value of customer satisfaction is 1 and the highest value is 5.
Thus the range of values for the variable is 5-1= 4. Therefore, the estimated standard
deviation is 4/5.85= 0.684. We will use this value for the calculation of sample size.
e :the tolerable error is expressed in the same units as the variable being measured or
estimated by the study. Thus we have to decide how much error (on a scale of 1 to 10) we can
tolerate in the estimate of customer satisfaction. Let us say that we put a value of ±0.06. This
means we are having the value of e as 0.06. This means, we would like our estimate of
customer satisfaction to be within 0.06 of the actual value with a confidence level of 95
percent (decided earlier by the Z value). So at 6 percent tolerable error would translate into
e=0.06.
Therefore we have all the 3 values required for calculating ‘n’, the sample size. Hence
we have:
n = (Zs/e) 2 (1.96 x 0.684/0.06)2
= (1.2936/0.06)2
= (21.35)2 = 499.52 (approximately) = 500
n = 500
(Note: In general, sample size would increase if)
1) Standard deviation‘s’ is higher
2) Confidence level required is higher
3) Error tolerance ‘e’ is lower
Taking the above three aspects into consideration, a sample size of 500 was chosen.
Therefore, a sample size of 500 would give us an estimate of customer satisfaction measured
on 1 to 5 scales with 95 percent confidence level, and error level maintained within ±0.06 of
the actual value.
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(Note: Generally we take Z value at 95%. Since the sample size is 500 we have chosen 95%
confidence level. In order to choose 99%, we need a larger sample. If we choose 90% the
margin of error is greater)

Table 3.4 Region wise classification of customers surveyed for Small Passenger cars in
Bangalore City

Region No of Units Percentage

Southern 150 30
Northern 100 20
East 90 18
West 85 17
Central 75 15
Total 500 100

3.6.1 Sampling Procedure: The sampling method used for this study was non-probability
sampling, under which convenience sampling was chosen. The area wise selection of
respondents is indicated above.

3.6.2 Tools for Collection of Data

Structured questionnaire was used for primary data collection. One questionnaire was
developed for collecting data from customers (respondents) in the study.
This research attempts to measure the customers/buyers perception of the key
variables that are considered in the study. “Linkages between customer satisfaction and
loyalty are measured through certain dimensions”.
Linkages were also established between Purchase Process and other variables such as
after sales service, vehicle performance and perceived value, perceived value before
purchase, which were dimensions of customer satisfaction and loyalty.
A five point Likert scale is used in the questionnaire. Discussions with the Research
guide, academicians in the concerned field, industry experts (intermediaries) and extensive
literature review helped to generate the set of potential scale items. The researcher’s own
experience in the industry and academics also helped in useful contributions. This is indicated
in (Appendix A).
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3.6.3 Measurement Scale Used

A 1-5 Likert rating scale was used, where the digits 1 to 5 have the following
meaning:

5= Strongly Agree
4= Agree
3= Neutral
2= Disagree
1= Strongly Disagree

3.6.4 Questionnaire Development

After the development of items that have been generated, the same was administered to a
small group of people, (Customers), and also after the pilot study, certain parameters were
modified. The profile of the people (customers) to whom the questionnaire is given is
indicated below.

The automobile customers of the major brands, which were considered for the study
were chosen at random

Sample respondents of the major brands considered for the study.

The respondents were chosen from the list provided by the RTO, on a convenience basis.

1) These respondents were asked to indicate their responses to each statement and were
asked to check one category using a five-point scale, which was discussed earlier.

2) The responses to various statements are scored in such a way that a response
indicative of the most favorable attitude/perception is given the highest score/value of
5 and the most unfavorable attitude/perception is given a score of 1. The total score of
each respondent is obtained by adding his scores that he has received for separate
statements.
 112

3) For some items, reverse scoring was done. The transformation was done, where if the
original value is 1, it was changed to 5, 2 was changed to 4, 3 remains same, 4 was
changed to 2, and 5 was changed to 1. It is based on the formula:

New value= (High Value) – original value

In our scaling the highest value is 5; so as to get the new transformed scale value, we
simply subtract the original value on each reversal item from 6 i.e. (5+1).
Selecting the items (Item Analysis)

The method of the “item total correlation is used”. Inter-item correlations between all
pairs of items are computed using PASW (Predictive Analysis Software) 18.0 for windows,
previously called SPSS (Statistical Package for Social Sciences) for windows package. Such
items are discarded which have a low correlation with total score. For this, firstly a new
variable is created which is the average of all individual items for each respondent using the
above mentioned software package. The variable was included as last variable in the
correlation matrix. Those items, that have a correlation score of less than 0.6 with respect to
the new variable was discarded. In this way, we found that we had retained 41 items. Hence
in the final instrument (questionnaire), we retained 41 items, with respect to 5 main
dimensions of customer satisfaction. These selected 5 items formed the main
items/dimensions of customer satisfaction, which also included the parameter i.e. loyalty.
Thus the item analysis played a very important role in order to identify the items/variables
that can be utilized for the research.
The theoretical support for these variables is detailed in Chapter 1.

Table 3.5 Variables and codes

Variables Code No of items

Purchase Process PP 7
After Sales Service Af SASER 6
Vehicle Performance and VPPV 10
Perceived value
Perceived value before PVBP 10
Purchase
Loyalty Loy 8
Total of items 41
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The variables consisted of five items, as mentioned in the above Table. The first
variable purchase process had 7 items. The second variable after sales service had six items,
the third variable vehicle performance and perceived value had 10 items, the fourth variable,
perceived value before purchase also had 10 items, and the last variable loyalty had 8 items.
These variables were coded so as to make the identification easier and also ensure that
the errors are minimized because of coding. These variables were selected based on the
discussions with the experts in academics and also experts in industry and a brief discussions
with the research guide, enabled the entire process smooth, without much of errors. Before
the final questionnaire was evolved, based on the pilot study results, certain variables items
were re-modified so as make the final questionnaire more precise and accurate.
3.6.5 Pilot Study

Prior to the administration of the questionnaire and also before the final study, the
instrument i.e. the questionnaire was pilot tested. The main aim of the pilot test was to
develop the final questionnaire so that, the respondent will have no problem in recording the
data, and if any changes had to be made to the final questionnaire, it is based on the pilot
study results, which can be taken into consideration. In addition it will also enable us to
obtain some assessment of questions validity like reliability of data was taken into
consideration.
The Pilot study was conducted amongst 50 customers in total for four different brands
of small passenger cars such as Maruti, Hyundai, Chevrolet and Tata Nano, based in
Bangalore city. The sample size for the pilot study was based on 10 percent of the actual
sample size, i.e. 10 percent of 500 i.e. 50 respondents. The samples of respondents were
drawn on the basis of convenience sampling.

3.6.6 Validity Measures from Pilot Study

Content validity: It is the representative sampling adequacy of the content, substance,

the matter of topics of measuring instrument. Content validation is guided by question and is
the substance or content of the measure representative of the universe of content of the
proportion being measured. In content validity, essentially the operations were checked
against the relevant content domain or constructs. As a part of pilot study, each completed
questionnaire was checked to ensure that the respondents had no problems in understanding
 114

or answering questions and have followed instructions correctly. Their responses will provide
an idea about the reliability and suitability of questions.
3.7 Reliability Measures
In research, reliability means repeatability or consistency. A measure is considered
reliable, if it would give us the same results, again and again. There are generally three
classes of reliability estimates used in this research, each of which measures reliability in
different manner.
Test Retest Reliability: It is used to assess the measure of consistency from one time
to another. This is analyzed after the final data collection to find out, whether there is
consistency in responses from one time to another from the same respondent. The final
questionnaire evolved was administered to the respondents. The test retest reliability to find
out the consistency of responses and the Cronbach alpha test to find the out the inter
consistency of the questionnaire are done after the final data collection. The Cronbach alpha
test was done for the main variables during the Pilot study and also during the final data
collection. The results indicated that the consistency of the instrument/questionnaire with
respect to the five measured variables were between 0.6 and 0.9, which was indicative that
the instrument was highly reliable. As a thumb rule, Cronbach alpha will generally increase
as the inter-correlations among the test items increase and is thus known as consistency
estimate of reliability of test scores. In general, a value of 0.6 is acceptable.

3.7.1 Primary Data Collection Plan

The combination of primary data collection methods are used to increase the response
rate. The primary data collection methods play an important role in ensuring that the
researcher is able to meet the respondents directly and get the responses for the questions. It
is the data directly collected by the researcher with respect to the problem under study. In
case of the research that we conducted, primary data was the first hand data collected by
researcher for immediate purpose of the study. The users/ customers of small passenger cars
with respect to the three brands namely Maruti, Hyundai and Chevrolet were surveyed
directly. The respondents were mostly met directly or the questionnaire was given to the
automobile dealers, through whom the respondents were contacted and the questionnaire was
filled as per their convenience.
The units situated were contacted personally to enable more authenticity in the survey of the
respondents.
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3.7.2 Secondary Data collection Plan

The secondary data are statistics that already exists. They may be described as those
data that have been compiled by some agency other than the user. The secondary data are
collected through the SIAM (Society of Indian Automobile Association), CRISIL Report,
Automobile magazines, Academic Journals, Surf Internet report from Maruti, Hyundai,
literature review and relevant data from previous/similar studies being carried out were some
of the sources through which the secondary data was obtained.
Hence for the research that was conducted on the relationship between customer
satisfaction and loyalty, a combination of both primary data collection method and secondary
data collection methods was adopted by the researcher for data collection purpose.
3.7.3 Plan of Analysis
The statistical design involves converting a series of recorded data into a series of
recorded data into descriptive statements or inference about relationship. This types of
analysis can be conducted depending on the nature of sampling process, the measurement
instrument and data collection method.
3.7.4 Descriptive Statistics
The Descriptive statistics are computed for the items on the questionnaire variables
for customer satisfaction. The hypothesis was tested on the data obtained from the
customers/users of small passenger cars. The data was also compared for differences in
perceptions.

Table 3.6 Multiple Regression Analysis Variables for Hypothesis

Dependent Variable Code Independent Variable Code

Loyalty Loy Purchase Process PP

After Sales Service AfSA

SER
Vehicle Performance and
perceived value
VPPV
Perceived value before PVBP
purchase
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Multiple regression equation for the Hypothesis is of the form:

Y = 20.622 + 0.025X1(PP)+0.092X2(AfSASE)+ 0.092X3(VPPV)+0.125X4 (PVBP)

The Construct Purchase Process had 7 items, while the after sales service had six
items, while the construct vehicle performance and perceived value had ten items, Perceived
value before purchase had 10 items, while the construct loyalty had eight items.

3.7.5 LIMITATIONS

The limitations of the study were as follows:

(1) Since the study is conducted only in Bangalore the results might not be
representative of all small car owners throughout India.
(2) The inability to manipulate independent variables in the study is not possible in
case of ex-post facto research.
(3) The risk of improper interpretation is another drawback of ex-post facto
research.
(4) The penetration of survey is not very deep below the surface.
(5) The time and money were other constraints of the research.
(6) One of the important aspects to be taken into consideration in survey research is
the non-response error, which is obvious.
(7) Knowledge and high degree of sophistication are important requirements of
effective survey research.
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CHAPTER 4

RELATIONSHIP BETWEEN LOYALTY AND GENDER

Contents Page No
----------------------------------------------------------------------------------------------
4.1 Analysis 98
4.2 Method 98
4.3 Part-I Descriptive analysis on Sample 99
4.4 Analysis of Descriptive statistics for the variable loyalty 104
4.5 Analysis of First Objective 107
4.6 Inference 124
----------------------------------------------------------------------------------------------------------

The analysis projects a detailed picture of the way the data analysis is done using
certain statistical software i.e. PASW, and techniques of analysis. Method takes into
consideration the tool i.e. questionnaire used for the Research. Descriptive analysis is used to
describe the characteristics of certain demographic variables viz. income, size of family.
Besides loyalty is one of important dimensions taken into account for the research. Hence,
descriptive statistics is done on the variable loyalty. Further, this chapter also dwells upon in
detail the first objective, hypothesis and the test used to analyze the particular objective,
results and discussions. Finally, the chapter concludes with inference related to the first
objective
 118

CHAPTER 4

TO UNDERSTAND THE RELATIONSHIP BETWEEN LOYALTY AND GENDER

4.1 Analysis
The Plan of Analysis gives a detailed picture of the way in which the data analysis
was done using the SPSS (PASW) Package.

4.2 Method
The questionnaire for customers/owners of cars was given to 500 respondents, who
were either met in person or surveyed through major dealers of the Brands of the cars
surveyed. This was earlier explained in detail in Research Design (Chapter 3). The entire
process of Data collection took six months time period during Aug 2011 to Jan 2012.

4.2.1 Coding
PASW/SPSS Package has a facility called definition of value labels for each variable,
which was used to define the codes for every value of the variables. The codes assigned for
the variables are defined in Research Design (Chapter 3)

4.2.2 Missing Data

In some questionnaires the respondent might not have answered all the questions
asked. This leads to some blanks on the questionnaire. We have used list-wise deletion
method for handling this problem. The computer can be asked to use the list-wise deletion,
which results in the entire row of the data being deleted, even if there is one missing (blank)
piece of data in the questionnaire.

4.2.3 Hypothesis Testing

The t Test, followed by Correlation Analysis, Multiple Regression, and Structural
Equation Model is used for testing the hypothesis as detailed in Research Design (Chapter 3).
The Hypothesis was tested for the survey conducted on Customers (Car owners)
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4.2.4 Introduction
Analysis and interpretation are central steps in the research process. The aim of the
analysis is to organize, classify, and summarize the collected data so that they can be better
comprehended and interpreted to give answers to the questions that triggered the research.
Interpretation is the search for the broader meaning of findings. Analysis is not fulfilled
without interpretation and interpretation cannot proceed without analysis, so both are
interdependent.
In this chapter a detailed analysis of the collected data has been attempted as per the
objectives that have been discussed earlier. Hypotheses were also tested. In this chapter the
following statistical techniques were adopted for the analysis of data gathered for the present
study viz., descriptive analysis and inferential statistics etc.

4.3 Part I- Descriptive analysis on Sample

Percentage analysis is one of the statistical measures used to describe the

characteristics of the sample or population in total. Percentage analysis involves computing
measures of variables selected for the study and its findings will make interpretation easy for
the reader. Further sections of this chapter discuss in brief frequency and descriptive
analysis, which were done on the collected data from users of passenger cars in Bangalore
city. In the questionnaire for customer satisfaction, all the items under the main variables and
also the demographic variables in the Initial part of questionnaire are analyzed for descriptive
statistics. Frequency tables and charts are used for showing the respondents profiles and other
items in each main variables.
The Descriptive Statistics such as Mean and Standard Deviation was computed for the
Demographic Variables such as Age, Employment, Income and Size of Family. The
Descriptive Statistics was also computed for variables such as number of years of ownership
of the present car and number of years once the present car is changed.
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4.3.1 To Study effect of demographic variables

Demographic variables are the most popular bases for distinguishing consumer
groups. The marketers can easily get access to demographic variables and it is also easily
verifiable and measurable. This variable comprises gender, age, marital status, income,
occupation, education, religion and caste. Consumer needs wants and preferences and usage
rate are also closely related to demographic variables. If information of psychographics or
sociocultural variables are available, then they have to linked back to demographic variables
in order to get a better interpretation of the findings.
The further sections of this chapter focus on the Descriptive Statistics related to
demographic variable.

4.3.2 Frequency Distribution

Frequency Distribution for Customer Satisfaction and Loyalty items and

Demographic variables like Number of years of ownership of the present car and Number of
years once the present car is changed, Brand of Car etc were computed for the customer’s
data.
In the frequency distribution one variable is considered at one time. The objective is
to obtain the count of the number of responses associated with different values of the
variables. The relative occurrence or the frequency of the different values of the variable is
expressed as percentages. A frequency distribution for a variable produces a table of
frequency counts and percentages for all measures associated with that variable. The
following Descriptive statistics tables and charts are analyzed using the Mean values and S.D
Obtained from Descriptive statistics which are indicated in Tables 4.3-4.8 are indicated in the
next sections. Part I of this Chapter consists of Analysis of demographic variables and
Descriptive statistics for the main variables. Further the objective and hypothesis are
discussed in Part II of this chapter.
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Part I of Analysis Contd. - Demographic Variables

Table 4.1 Brand wise Demographic Profiles of Customers

Tata
Sl. Maruti Hyundai Chevrolet
Characteristics Variations Nano
No. (%) (%) (%)
(%)
1 Age 20-30 21 20 9 18
31-40 40 38 41 46
41-50 23 21 39 32
51-60 9 14 9 4
60 and above 7 7 2 0
2 Nature of Government 2 10 1 0
employment Business 16 18 23 24
Self Employed 15 23 10 8
Employed 68 49 66 68
3 Family monthly 25,000-45,000 21 12 7 8
Income 45,001-65000 32 19 22 40
65,001-85,000 17 19 57 44
85,001-1,05,000 10 19 9 4
1,05,000 & 20 31 5 4
above
4 Size of the family 2 6 7 3 2
3 33 31 12 14
4 40 33 62 76
>4 21 29 23 8

4.3.3 Discussions: It is Indicative from the Table 4.1 that with respect to Demographic
variable namely age with reference to brands such as Maruti, Hyundai, Chevrolet and Tata
Nano, majority of respondents (Customers/users) fall into age category of 31-40 and 41-50.
The age profiles of respondents comprise youngsters and the middle aged. Further it is noted
that the age category of 60 and above i.e. senior citizens do not use Tata Nano, which was
launched during 2009.
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The Nature of employment with reference to the major brands surveyed indicates that
majority of respondents fall into the employed category, followed by business category with
reference to all the 4 brands. Further it is also observed that government employees do not
prefer Tata Nano.
The Family Income is an important demographic variable. The analysis indicates that
with respect to brand Maruti, majority of user’s family monthly income fall into the category
of Rs.45,001-65,000, followed by the Income category Rs.25,000-45,000. Similarly with
respect to brand Hyundai majority of respondents fall into the higher income category of
Rs.1, 05,000 and above followed by equal percentage of respondents in the income category
of Rs.45, 001-65,000, 65,000-85,001 and 85,001-1, 05,000. Further with respect to the brand
Chevrolet and Tata Nano, majority of the customer’s income category fall in the range of
Rs.65,001-85,000.
The size of the family is an important demographic variable. The analysis of this
variable indicates that majority of the customer’s size of the family comprises of four
members, with reference to all the four brands.

Table 4.2 Demographic Profiles of the Number of years of ownership of the present car
and Number of years once the customer changes his car

Sl. Maruti Hyundai Chevrolet Tata Nano

Characteristics Variations
No. (%) (%) (%) (%)
1 Number of years of Below 1 10 16 4 6
ownership of 1-3 36 31 55 68
present car 3-6 43 32 27 10
Above 6 11 21 14 16
2 Number of years 2 5 6 1 2
once the customer 3 13 16 4 50
changes his car 4 15 19 47 40
5 29 23 37 2
Above 5 38 36 11 6

4.3.4 Discussions: From the above table it is indicative that a majority (43%) and (32%) of
customers are for Maruti and Hyundai, respectively own their present car for a period
between 3-6 years. Similarly majority of customers (55%) and (68%) of Chevrolet and Tata
Nano own their present car for a period between 1-3 years.
 123

It is also further inferred that a majority of customers (38%) and (36%) of Maruti and
Hyundai change their car after a period exceeding 5 years. Similarly a majority of customers
(47%) of customers of Chevrolet change their car once in four years. Similarly, a majority of
customers (50%) of Tata Nano change their car once in three years.

Table 4.3 Mean and S.D for the Dimension of

Customer satisfaction- Loyalty

Loyalty Mean SD

3.91 1.03
I prefer to buy a small car of the same manufacturer again

I prefer to upgrade from a small car to a medium sized luxury 3.72 0.78
car of the same manufacturer.

I prefer to upgrade from a small car to a medium sized luxury 4.00 0.76
car of the different manufacturer.

Dealer service during Pre-sale is an important factor for me in 4.23 0.80

purchasing the next car.

Dealer after sales service is an important factor for me in making 4.36 0.79
the purchase decision with respect to next car.

The performance and perceived value of my present car is a 4.29 0.80

significant factor in deciding the next car purchase.

Brand value of the car is an important factor that helps me to 4.29 0.78
decide the next purchase.

My purchase decision for the next car depends on factors other 4.23 0.91
than mentioned here.
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4.4 Analysis of Descriptive Statistics for the variable Loyalty

The fifth of the dimensions of customer satisfaction namely the perceived loyalty had
eight items. It was observed from the descriptive statistics that I prefer to buy a small car of
the same manufacturer again had a (Mean 3.91), which indicates that it is a critical factor.
Similarly, I prefer to upgrade from a small to a medium sized luxury car of different
manufacturer (Mean 3.72). The two items namely the dealer service during pre-sale is an
important factor for me in purchasing the next car, my purchase decision for the next car
depends on factors other than mentioned here had a (Mean 4.23), which implies that both
these factors are rated equally by the customers. Similarly the items namely the performance
and perceived value of my present car is a significant factor in deciding the next car purchase,
brand value of the car is an important factor that helps me to decide the next purchase with a
(Mean 4.29) respectively, which indicates that customers give equal importance to both these
factors. The other factors namely, I prefer to upgrade from a small car to a medium sized
luxury car of the different manufacturer and dealer after sales service is an important factor
for me in making the purchase decision with respect to the next car with (Mean 4.00) and
(4.36) respectively, which indicates that the respondent give importance to both these factors,
which is indicative in Table 4.3

Hence it is concluded that all the eight items under the variable loyalty of the
dimension of customer satisfaction are given high importance by the customers or
respondents of passenger cars.
 125

4.4.1 Reliability Analysis - Scale (Alpha) for the Variables of Customer Satisfaction-
Loyalty
No of
Statistics for Mean Variance STD Dev Variables
SCALE 33.0240 17.6748 4.2041 8

Item-total Statistics

Table 4.4 Reliability Analysis for Loyalty

Scale Scale
Corrected Alpha
Q.NO Sub Item 15 mean if Variance
item total if item
Loyalty item if item
correlation deleted
deleted deleted
I prefer to buy a small car of the same 29.1160 15.0366 0.1982 0.7342
manufacturer again
I prefer to upgrade from a small car to a 29.3020 14.2232 0.2813 0.7181
medium sized luxury car of the same
manufacturer.
I prefer to upgrade from a small car to a 29.0280 13.0573 0.4552 0.6747
medium sized luxury car of the different
manufacturer.
Dealer service during Pre-sale is an important 28.7980 14.5423 0.4265 0.6831
factor for me in purchasing the next car.
Dealer after sales service is an important 28.6600 14.1487 0.5113 0.6680
factor for me in making the purchase decision
with respect to next car.
The performance and perceived value of my 28.7360 13.1005 0.6749 0.6336
present car is a significant factor in deciding
the next car purchase.
Brand value of the car is an important factor 28.7340 14.4842 0.4293 0.6823
that helps me to decide the next purchase.
My purchase decision for the next car 28.7940 14.0877 0.4028 0.6862
depends on factors other than mentioned here.
 126

4.4.2. Analysis of the Cronbach alpha Values for the dimension of Customer
Satisfaction- Loyalty

Reliability Coefficients

No of Cases = 500.0
No of Items = 8
Alpha = 0.7140

Results: It is Indicative from the Table 4.5 that the Cronbach alpha values are well
within the acceptable range of more than 0.6. It is seen that for all the eight sub variables
(items) of vehicle performance and perceived value the alpha values are within 0.6366 to
0.7342, which is more than the acceptable range.

4.4.3 T Test: A T Test is a procedure for comparing sample means to see if there is
sufficient evidence to infer that means of the corresponding population distributions also
differ.
Key Terms: According to Dareen George, Paul Mallery, the following key terms
have been defined.

1) F value: This value is used to determine if the variances of two distributions differ
significantly from each other.
2) P value (for levene’s test): If variances do not differ significantly, then the equal-
variance estimate may be used instead of unequal-variance estimate. The p value
indicates that the two variances do not differ significantly; so the statistically stronger
equal-variance estimate may be used.
3) t-values: The actual t value is the difference between means divided by the standard
error.
4) 2-Tail Significance: (associated with t-values) The probability that the difference in
means could happen by chance.
5) Mean Difference: The difference between the two means.
6) 95% C.I (Confidence Interval): With t tests, the confidence interval deals with the
difference-between-means value. If a large number of samples were drawn from a
population, 95% of the mean differences will fall between the lower and upper values
indicated.
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Part II- Analysis of objective and hypothesis

4.5 Analysis for the First Objective

To Understand the Relationship between loyalty and Gender

Customer satisfaction is the key aspect of all the marketing studies conducted by
companies. When the customers are satisfied with the purchase of the product or the service,
it leads to repeat purchase from the same manufacturer or the company, thereby referred to as
intention to buy from the same manufacturer. This is also called loyalty, which arises because
of enhanced customer satisfaction.
The variable loyalty is considered to be a very important dimension of our research
study. The term loyalty arises due to a number of dimensions such as the purchase process,
after sales service, vehicle performance and perceived value, perceived value before
purchase. Loyalty is also known as repetitive or repeat purchase of the same product or
service from the same manufacturer or company. These factors or the dimensions were taken
into consideration for the study. The dimension purchase process is a result of pre and during
purchase the after sales service occurs as a result of after purchase, the vehicle performance
and perceived value occurs as a result of after the purchase and during the usage of the
product. The other dimension, i.e. perceived value before purchase occurs as a result of pre-
purchase evaluation of the product. These dimensions play a very important role in increasing
the customer’s intention to buy from the same manufacturer or the company.
The gender, which was one of the important demographic variable in our research,
was compared with loyalty, in order to know whether males are more loyal or females are
loyal to a particular brand
For the analysis of objective we had formulated one hypothesis, was formulated the
results of which are indicated in another section- Part II of this chapter.
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Analysis of first Objective: To Understand the Relationship

between loyalty and Gender

For the analysis of the first objective, the researcher had formulated 2 Sub hypotheses
(a) and (b), which are discussed along with the results in the following sections
4.5.1 Testing of Hypothesis I (a)
There is a significant positive relationship between loyalty and gender with
respect to the brand of cars owned.
For the hypothesis I, Independent sample T Test*, was used to test the above
hypothesis, which was related to objective 1, the results of which are discussed in the
following sections. The Independent Sample T Test output table is indicated in Appendix
Table AB 1-AB 4

Table 4.5 Independent Sample T Test for Hypothesis I (a) of the Brand Maruti

Dimensions Gender Std. T value P Value

of CS N Mean Deviation
Loyalty Male 127 33.97 3.899 1.830 0.069
Female 23 35.52 2.695

Hypothesis: There is a significant positive relationship between loyalty and gender

with respect to the brand Maruti.
Results: Since the P value is marginally greater than 0.05 in case of brand Maruti, the
hypothesis is accepted at 5 percent level of significance. Hence it is concluded that there is
marginal significant positive relationship between loyalty with respect to gender, with
reference to the Brand Maruti.
Discussions: Since the P value is marginally greater than 0.05 and is also positive, we
can observe that gender and loyalty are positively related. Further it is inferred that male and
female customers exhibit loyalty with respect to the brand Maruti. Further loyalty is an
important dimension of customer satisfaction.
 129

Table 4.6 Independent Sample T Test for Hypothesis I (a) of the Brand Hyundai

Dimensions Std. P Value P Value

Gender N Mean T Value
of CS Deviation (1-tailed)
Male 104 32.26 3.491
Loyalty 1.008 0.315 0.157
Female 46 31.57 3.769

Hypothesis: There is a significant positive relationship between loyalty and gender

with respect to the brand Hyundai.
Results: The P value is significantly greater than 0.05 in case of the brand Hyundai.
Hence the hypothesis is rejected at 5% significance level. Hence it is concluded that there is
no significant positive relationship between loyalty and gender for the brand Hyundai.
Discussions: The P value obtained for the brand Hyundai is significantly greater than
0.05. Hence it is observed male and female customers exhibit greater loyalty towards the
brand Hyundai.

Table 4.7 Independent Sample T Test for Hypothesis I (a) of the Brand Chevrolet

Dimensions of Std. P Value P Value

Gender N Mean T Value
CS Deviation (1-tailed)
Male 134 33.08 4.913
Loyalty Female 16 34.44 4.211 1.057 0.292 0.146

Hypothesis: There is a significant positive relationship between loyalty and gender

with respect to the brand Chevrolet.
Results: The P value is significantly greater than 0.05 in case of the brand Chevrolet;
hence the hypothesis is rejected at 5% significance level. Hence it is concluded that there is
no significant positive relationship between loyalty and gender for the brand Chevrolet.
Discussions: In case of the brand Chevrolet, the P value is significantly greater.
Hence it is observed female customers exhibit marginally loyal as compared to male
customers towards the brand Chevrolet. The preference towards loyalty is exhibited by both
male and female customers with reference to the brand Chevrolet.
 130

Table 4.8 Independent Sample T Test for Hypothesis I (a) of the Brand Tata Nano

Dimensions Gender Std. T Value P Value P Value

of CS N Mean Deviation (1-tailed)
Loyalty Male 44 31.93 2.999 0.782 0.438 0.219
Female 6 30.83 4.750 .

Hypothesis: There is a significant positive relationship between loyalty and gender

with respect to the brand Tata Nano
Results: The P value is significantly greater than 0.05 in case of the brand Tata
Nano. Hence the hypothesis is rejected at 5% significance level. Hence it is concluded that
there is no significant positive relationship between loyalty with respect gender in case of the
Brand Tata Nano.
Discussions: In case of Tata Nano, the P value is significantly greater. Hence it
signified that male customers exhibit marginally greater loyalty as compared to female
customers towards the brand Tata Nano.

4.5.2 Testing of Sub Hypothesis I (b)

Hypothesis: There is a significant positive relationship between each sub dimension

of loyalty and gender for each brand of car owned.

For testing the Sub Hypothesis I (b) independent sample T test was used. The results
are tabulated below. The T Test Table AB 5 -AB 8 is furnished in Appendix.
 131

Table 4.9 Independent Sample T Test for Sub Dimensions of Loyalty and Gender for
Brand Maruti with regard to sub Hypothesis I (b)

Sub-dimensions of Loyalty Gender T Value P Value P Value

Mean Std. Deviation (2-Tailed) (1-tailed)
I prefer to buy a small car of the Male 4.02 0.868 0.554 0.580 0.290
same manufacturer again Female 3.91 0.949
I prefer to upgrade from a small Male 3.88 1.013 0.884 0.378 0189
car to a medium sized luxury car of Female 4.09 1.083
the same manufacturer
I prefer to upgrade from a small Male 4.32 0.806 1.874 0.063 0.0315
car to a medium sized luxury car Female 4.65 0.573
of the different manufacturer.
Dealer service during Pre-sale is an Male 4.24 0.781 1.146 0.254 0.127
important factor for me in Female 4.43 0.662
purchasing the next car.
Dealer after sales service is an Male 4.50 0.665 1.056 0.293 0.146
important factor for me in making Female 4.65 0.573
the purchase decision with respect
to next car.
The performance and perceived Male 4.32 0.806 1.874 0.063 0.315
value of my present car is a Female 4.65 0.573
significant factor in deciding the
next car purchase.
Brand value of the car is an Male 4.37 0.733 0.400 0.689 0.344
important factor that helps me to Female 4.43 0.590
decide the next purchase.
My purchase decision for the next Male 4.31 0.731 2.371 0.019 0.009
car depends on factors other than Female 4.70 0.559
mentioned here.

Results: Since the P values (0.580, 0.378, 0.254, 0.293, 0.689) are significantly
greater than 0.05, for the sub dimensions, I, II, IV, V and VII of loyalty, the hypothesis is
rejected at 5 percent significance level. Hence it is concluded that there is no significant
positive relationship between sub dimensions of loyalty and gender for the brand Maruti.
Further for the sub dimensions of Loyalty namely III and VI, the P Values (0.063) are
marginally greater than 0.05, the Hypothesis is accepted at 5% significance level. Hence it is
 132

concluded that there is significant positive relationship between loyalty sub dimensions and
gender. Similarly for the last sub dimension VIII, the P value (0.019) is less than 0.05, hence
the hypothesis is accepted at 5 percent significance level. Hence it is concluded that there is
significant positive relationship between loyalty and gender for the brand Maruti with
reference to the sub dimension VIII.

Discussions: It is seen from the Table 4.9 that for the sub dimension I of Loyalty
namely “I prefer to buy a small car of the same manufacturer again”, the P value is
significantly greater than 0.05. Hence it is inferred that gender and the preference to buy a
small car from the same manufacturer are independent variables. It differs from male to
female customers. Further it is seen that male customers prefer repetitive purchase of a small
passenger car from the same manufacturer as compared to female customers.

For the second sub dimension, namely, “I prefer to upgrade from a small car to a
medium sized luxury car of the same manufacturer”, the P value is significantly greater
than 0.05, hence it is signified that gender and preference to shift from small to a medium
sized luxury car of same manufacturer have no positive relationship. It is also further inferred
that female customers prefer to upgrade from the same manufacturer as compared to male
customers.

For the third sub dimension namely, “I prefer to upgrade from a small car to a
medium sized luxury car of the different manufacturer”, the P value is marginally greater
than 0.05, Hence it is inferred gender and preference to upgrade from small to a medium
sized luxury car of different manufacturer have positive relationship. Further it is inferred that
there is shift in loyalty in case of female customers to different manufacturers as compared to
male customers, who are comparatively loyal to same brand i.e. Maruti .

For the fourth sub dimension namely “Dealer service during pre-sale is an
important factor for me in purchasing the next car”, the P value is significantly greater
than 0.05, hence it inferred that gender and dealer service during pre-sale has no significant
positive relationship, further it is inferred that female customers give comparatively greater
importance to the pre-sale service in case of the brand Maruti, as compared to male
customers.

For the fifth sub dimension namely “Dealer after sales service is an important
factor for me in making the purchase decision with respect to next car”, the P value is
 133

significantly greater than 0.05. Hence it inferred that dealer after sales service and gender
have no positive relationship and they are independent dimensions. Further it is inferred that
female customers give more significance to after sales service as compared to male customers
in case of brand Maruti

For the sixth sub dimension namely, “The performance and perceived value of my
present car is a significant factor in deciding the next car purchase”, the P value is
marginally greater than 0.05. Hence it inferred that gender and performance and perceived
value of the car currently being used have significant positive relationship with respect to the
next purchase. Further, it is signified that both male and female customers consider
performance and perceived value as a significant factor in deciding their next purchase.

For the seventh sub dimension namely, “Brand value of the car is an important
factor that helps me to decide the next purchase”, the P value is significantly greater than
0.05. Hence it is inferred that significance of brand value of car in deciding further purchase
has no significant positive relationship with respect to gender. It is also inferred that female
customers attach more importance to brand value as compared to male customers with
respect to the brand Maruti.

For the eighth sub dimension namely, “my purchase decision for the next car
depends on factors other than mentioned here”, the P value is significantly less, hence it is
inferred purchase decision and gender have positive relationship.. It is also further noted that
for the sub-dimensions III and VI of loyalty, the P values are same. Hence it is concluded that
both male and females give equal importance to these sub dimensions.

Overall relationship between sub dimensions of loyalty and gender for the brand
Maruti: The test results indicates that while upgrading small to medium sized luxury car
some customers prefer to buy from a different manufacturer i.e. there is a shift in loyalty from
Maruti to other brands. This shows that the purchase decision of the next car depends on the
performance and perceived value of the present car in some cases. But the purchase decision
for the next car depends on factors other than mentioned here, which may also be due to
better facilities provided by other manufacturers. Further the two sub dimensions of loyalty
namely III and VI have an equal importance on loyalty. Finally, overall loyalty with reference
to brand Maruti depends mainly on three sub dimensions such as upgrading from small to
medium car of different manufacturer, performance and perceived value and also any other
factor which has an impact on customer loyalty.
 134

Table 4.10 Independent Sample T Test for sub dimensions of Loyalty

and Gender for Brand Hyundai with regard to sub hypothesis I ( b )

Std. P Value P Value

Sub-dimensions of Loyalty Gender Mean T Value
Deviation (2-tailed) (1-tailed)
I prefer to buy a small car of the Male 3.94 1.050 0.886 0.377 0.188
same manufacturer again Female 3.78 .941
I prefer to upgrade from a small car Male 3.42 1.112 0.407 0.685 0.342
to a medium sized luxury car of the Female 3.50 0.960
same manufacturer
I prefer to upgrade from a small car Male 3.59 1.137 1.681 0.095 0.0475
to a medium sized luxury car of the Female 3.24 1.233
different manufacturer.
Dealer service during Pre-sale is an Male 4.26 0.683 0.544 0.587 0.293
important factor for me in Female 4.20 0.619
purchasing the next car.
Dealer after sales service is an Male 4.40 0.631 2.214 0.028 0.014
important factor for me in making Female 4.15 0.666
the purchase decision with respect to
next car.
The performance and perceived Male 4.21 0.797 0.210 0.834 0.417
value of my present car is a Female 4.24 0.603
significant factor in deciding the
next car purchase.
Brand value of the car is an Male 4.22 0.737 0.030 0.976 0488
important factor that helps me to Female 4.22 0.629
decide the next purchase.
My purchase decision for the next Male 4.21 0.797 0.210 0.834 0.417
car depends on factors other than Female 4.24 0.603

mentioned here.
 135

Results: Since the P values (0.377, 0.685, 0.587, 0.834, 0.976, 0.834) is significantly
greater than 0.05, for the sub dimensions, I-II, IV and VI-VIII of Loyalty, hence the
hypothesis is rejected 5 percent significance level, hence it is concluded that there is no
significant positive relationship between loyalty and gender for the brand Hyundai, with
reference to sub dimensions I- II, IV and VI-VIII.

For the sub Dimension III, the P value (0.095) is marginally greater than 0.05, hence
the hypothesis is accepted at 5% significance level. Hence it is concluded that there is
significant positive relationship between sub dimension III of loyalty and gender with respect
to brand Hyundai.

For the sub dimension V, the P value (0.028) is significantly less than 0.05, hence the
hypothesis is accepted at 5 percent significance level. Hence it is concluded that there is
significant positive relationship between loyalty and gender for the brand Hyundai with
reference to the sub dimension V.

Discussions: It is seen from the Table 4.10 that for the sub dimension I of Loyalty
namely “I prefer to buy a small car of the same manufacturer again”, the P value is
significantly greater than 0.05, hence it is inferred that gender and preference to buy from the
same manufacturer have no positive relationship with reference to Hyundai. It differs from
male to female customers.

For the second Sub dimension, namely, “I prefer to upgrade from a small car to a
medium sized luxury car of the same manufacturer”, the P value is significantly greater
than 0.05, hence it is inferred that gender and preference to upgrade from small to a luxury
car of the same manufacturer have no significant positive relationship. Further it is noted that
female customers prefer to upgrade from a small car to medium sized luxury car of the same
manufacturer as compared to male customers.

For the third sub dimension namely, “I prefer to upgrade from a small car to a
medium sized luxury car of the different manufacturer”, the P value is marginally greater
than 0.05, hence it is inferred that gender and preference to upgrade from a small to a
medium sized luxury car of different manufacturer have positive relationship. It is also
further signified that there is shift in loyalty of male customers from their present model of
Hyundai car to a car of different manufacturer as compared to female customers.
 136

For the fourth sub dimension namely “dealer service during pre-sale is an
important factor for me in purchasing the next car”, the P value is significantly greater
than 0.05. Hence it inferred that gender and dealer pre-sale service during the next purchase
have no positive relationship. It significantly differs from male to female customers. Further
it is seen that male customers give more importance to the pre-sale service in case of the
brand Hyundai as compared to female customers.

For the fifth sub dimension namely “dealer after sales service is an important
factor for me in making the purchase decision with respect to next car”, the P value is
significantly lesser than 0.05, hence it is signified that gender and dealer after sales service
during next car purchase have significant positive relationship and are dependent on each
other with respect to brand Hyundai. Further it inferred that male customers give more
importance to the post sale service i.e. after sales service in case of the brand Hyundai as
compared to female customers.

For the sixth sub dimension namely,” the performance and perceived value of my
present car is a significant factor in deciding the next car purchase”, the P value is
significantly greater than 0.05, hence it inferred that gender and performance, perceived value
of the present car has no positive relationship with respect to the customer’s next car
purchase. Further it differs from male to female customers with reference to brand Hyundai.
For the seventh sub dimension namely, “brand value of the car is an important
factor that helps me to decide the next purchase”, the P value is significantly greater than
0.05. Hence it inferred that gender and brand value of car with reference to next purchase
have no significant positive relationship. Further it signified that brand value of the car
significantly differs from male to female customers with reference to brand Hyundai.

For the eighth sub dimension namely, “my purchase decision for the next car
depends on factors other than mentioned here”, the P value is significantly greater than
0.05, hence it inferred that gender and factors influencing purchase decision have no
significant positive relationship. Further it is inferred that female customers attach more
importance to other factors in case of purchase of brand namely Hyundai as compared to
female customers.
 137

Overall relationship between sub dimensions of loyalty and gender for the brand
Hyundai: The test results indicates that customers while upgrading small to medium sized
luxury car prefer to buy from different manufacturer i.e. there is a shift in loyalty from
Hyundai to other brands. This shows that the purchase decision of the next car depends on the
after sales services offered by the dealer which becomes an important criterion.. Finally
overall loyalty with reference to brand Hyundai depends mainly on two sub dimensions such
as upgrading from small to medium car of different manufacturer, and dealer after sales
service which is an important factor in determining the overall loyalty.
 138

Table 4.11 Independent Sample T Test for Sub Dimensions of Loyalty and Gender for
Brand Chevrolet with regard to sub Hypothesis I (b).

Std. P Value
Sub-dimensions of Loyalty Gender Mean T Value P Value
Deviation (1-tailed)
I prefer to buy a small car of the Male 3.83 1.167 0.050 0.960 0.480
same manufacturer again Female 3.81 1.515
I prefer to upgrade from a small Male 3.66 1.176 1.319 0.189 0.094
car to a medium sized luxury car Female 4.06 0.772
of the same manufacturer
I prefer to upgrade from a small Male 4.24 0.935 0.289 0.773 0.386
car to a medium sized luxury Female 4.31 1.195
car of the different
manufacturer.
Dealer service during Pre-sale is Male 4.19 0.913 0.237 0.813 0.406
an important factor for me in Female 4.25 0.683
purchasing the next car.
Dealer after sales service is an Male 4.21 0.926 0.944 0.347 0.173
important factor for me in Female 4.44 0.814
making the purchase decision
with respect to next car.
The performance and perceived Male 4.25 0.915 0.235 0.815 0.407
value of my present car is a Female 4.31 1.195
significant factor in deciding the
next car purchase.
Brand value of the car is an Male 4.37 0.872 0.883 0.378 0.189
important factor that helps me to Female 4.56 0.512
decide the next purchase.
My purchase decision for the Male 4.33 0.916 1.540 0.126 0.063
next car depends on factors Female 4.69 0.479
other than mentioned here.
 139

Results: Since the P values (0.960, 0.773, 0.813, 0.347, 0.815, 0.378) is significantly
greater than 0.05, for the sub dimensions, I, III-VII of Loyalty, the hypothesis is rejected at 5
percent significance level. Hence it is concluded that there is no significant positive
relationship between loyalty and gender for the brand Chevrolet with reference to these sub
dimensions.
Since the P values for sub dimensions II, VIII is marginally greater than 0.05, the
hypothesis is accepted at 5 percent significance level. Hence it is concluded that there is a
significant positive relationship between loyalty and gender for the brand Chevrolet with
reference to these sub dimensions.
Discussions: It is seen from the Table 4.12 that for the sub dimension I of Loyalty
namely “I prefer to buy a small car of the same manufacturer again”, the P value is
significantly greater than 0.05, hence it is inferred that gender and preference to buy a small
car from same manufacturer have no significant positive relationship. Further it differs from
male and female customers. It is also signified that male customers prefer to buy a small car
from the same manufacturer as compared to female customers with respect to brand
Chevrolet.
For the second sub dimension, namely, “I prefer to upgrade from a small car to a
medium sized luxury car of the same manufacturer”, the P value is marginally greater,
hence it is inferred that female customers prefer to upgrade from a small car to medium sized
luxury car of the same manufacturer as compared to male customers with reference to the
brand Chevrolet. It is also further inferred that both male and female customers would retain
their existing brand and the model of car.
For the third sub dimension namely,” I prefer to upgrade from a small car to a
medium sized luxury car of the different manufacturer”, the P value is significantly
greater than 0.05. Hence it is inferred that female customer prefer to upgrade from a small car
to a medium sized luxury car of different manufacturer as compared to male customers. It is
also further signified that there is a shift in loyalty of female customers from their present
model of Chevrolet car to a car of different manufacturer. It inferred that gender and
preference to upgrade from small to a medium sized luxury car from a different manufacturer
has no positive relationship. It differs from male to female customers.
For the fourth sub dimension namely “dealer service during pre-sale is an
important factor for me in purchasing the next car”, the P value is significantly greater
 140

than 0.05. Hence it inferred that gender and dealer pre-sale service for the next car purchase
has no significant positive relationship. Further it is signified that female customers give
more importance to the pre-sale service in case of the brand Chevrolet as compared to male
customers.
For the fifth sub dimension namely “dealer after sales service is an important
factor for me in making the purchase decision with respect to next car”, the P value is
significantly greater than 0.05. Hence it inferred gender and dealer after sales service for the
next car purchase has no positive relationship. Further it is seen that female customers give
more importance to the post sale service i.e. after sales service in case of the brand Chevrolet
as compared to male customers.
For the sixth sub dimension namely,” the performance and perceived value of my
present car is a significant factor in deciding the next car purchase”, the P value is
significantly greater, hence it inferred that female customers give more importance to the
performance and perceived value in case of the brand Chevrolet as compared to male
customers. Further it is seen that gender and performance, perceived value is a significant
factor in the next car purchase has no significant positive relationship.
For the seventh sub dimension namely, “brand value of the car is an important
factor that helps me to decide the next purchase”, the P value is significantly greater than
0.05. Hence it inferred that female customers give more importance to the brand value in case
of Chevrolet as compared to male customers.
For the eighth sub dimension namely, “my purchase decision for the next car
depends on factors other than mentioned here”, the P value is marginally greater than
0.05. Hence it inferred that gender and importance of other factors apart from these factors in
the next car purchase has marginal positive relationship in case of Chevrolet. It is also
inferred that female customers attach more importance to other factors when they purchase
their next car.
Overall relationship between sub dimensions of loyalty and gender for the brand
Chevrolet: The overall loyalty value is indicative that customer preference does not depend
upon any of the sub dimensions. Further when the customer prefers to upgrade from small to
a medium sized luxury car, they do give preference to Chevrolet and also they give
importance to other factors apart from the eight loyalty sub dimensions.
 141

Table 4.12 Independent Sample T Test for Sub Dimensions of Loyalty and Gender for
Brand Tata Nano with regard to sub Hypothesis I (b).

Std. P Value
Sub-dimensions of Loyalty Gender Mean T Value P Value
Deviation (1-tailed)
I prefer to buy a small car of the Male 3.95 .888 1.153 0.255 0.127
same manufacturer again Female 3.50 1.049
I prefer to upgrade from a small Male 4.07 0.873 1.035 0.306 0.153
car to a medium sized luxury car Female 3.67 1.033
of the same manufacturer
I prefer to upgrade from a small Male 3.64 1.036 0.439 0.663 0.331
car to a medium sized luxury Female 3.83 0.983
car of the different manufacturer.
Dealer service during Pre-sale is Male 4.23 0.677 2.219 0.031 0.0155
an important factor for me in Female 3.50 1.225
purchasing the next car.
Dealer after sales service is an Male 4.43 0.759 0.728 0.470 0.235
important factor for me in Female 4.17 1.329
making the purchase decision
with respect to next car.
The performance and perceived Male 4.36 0.532 1.537 0.131 0.065
value of my present car is a Female 4.00 0.632
significant factor in deciding the
next car purchase.
Brand value of the car is an Male 3.89 0.993 1.076 0.287 0.143
important factor that helps me to Female 4.33 0.516
decide the next purchase.
My purchase decision for the next Male 3.36 1.496 0.751 0.456 0.228
car depends on factors other than Female 3.83 0.753
mentioned here.

Results: Since the P values (0.255, 0.306, 0.663, 0.470, 0.287, 0.456) are
significantly greater than 0.05, for the sub dimensions, I-III and V, VII, VIII of loyalty, the
hypothesis is rejected at 5 percent level of significance. Hence it is concluded that there is no
significant positive relationship between loyalty and gender for the brand Tata Nano with
reference to sub dimensions I-III and V, VII, VIII.
For the sub dimension IV the P value (0.031) is significantly less than 0.05, hence
the hypothesis is accepted at 5 percent significance level. Hence it is concluded that there is
 142

significant positive relationship between loyalty and gender for the brand Chevrolet with
reference to the sub dimension IV.
For the sub dimension VI the P value (0.065) is marginally greater than 0.05, hence
the hypothesis is accepted at 5 percent level of significance. Hence it is concluded that there
is a marginal positive relationship between loyalty and gender with reference to sub
dimension VI.
Discussions: It is seen from the Table 4.12 that for the sub dimension I of Loyalty
namely, “I prefer to buy a small car of the same manufacturer again”, the P value of is
significantly greater than 0.05. Hence it is inferred that gender and preference to buy a small
car from the same manufacturer has no positive relationship. Further it is seen that male
customers prefer to buy a small car from the same manufacturer as compared to female
customers.
For the second Sub dimension, namely, “I prefer to upgrade from a small car to a
medium sized luxury car of the same manufacturer”, the P value is significantly greater
than 0.05. Hence it is inferred that gender and preference to upgrade from small to a medium
sized luxury car from the same manufacturer has no positive relationship. It differs from male
customers to female customers. It is also further inferred that female customers would retain
their existing brand and the model of Tata Nano car as compared to male customers.
For the third sub dimension namely, “I prefer to upgrade from a small car to a
medium sized luxury car of the different manufacturer”, the P value is significantly
greater than 0.05, hence it is inferred that gender to preference to shift from small car to
medium sized luxury car of different manufacturer has no significant positive relationship. It
differs from male to female customers.
For the fourth sub dimension namely, “dealer service during pre-sale is an
important factor for me in purchasing the next car”, the P value is significantly less than
0.05, hence it inferred that gender and dealer pre-sale service for the next car purchase has
significant positive relationship. Further it is considered as an important factor. It is further
inferred that female customers who give more importance to the pre-sale service in case of
the brand Tata Nano as compared to male customers.
For the fifth sub dimension namely, “dealer after sales service is an important
factor for me in making the purchase decision with respect to next car”, the P value is
significantly greater, hence it is inferred that gender and dealer after sales service in purchase
decision with respect to next car has no significant positive relationship i.e. it differs from
 143

male to female customers. Further it is inferred that male customers give more importance to
the post sale service i.e. after sales service in case of the brand Tata Nano as compared to
female customers.
For the sixth sub dimension namely, “the performance and perceived value of my
present car is a significant factor in deciding the next car purchase, the P value is
marginally greater than 0.05, hence it inferred that male customers give more importance to
the performance and perceived value in case of the brand Tata Nano as compared to female
customers. Further it is seen that gender and factors such as perceived value, performance, in
deciding the next car purchase have marginal positive relationship.
For the seventh sub dimension namely, “brand value of the car is an important
factor that helps me to decide the next purchase”, the P value is significantly greater than
0.05. Hence it inferred that gender and importance of brand value in the next car purchase has
no positive relationship. It differs from male to female customers. It is also further inferred
that female customers attach more importance to brand value as compared to male customers
with respect to the brand Tata Nano.
For the eighth sub dimension namely, “my purchase decision for the next car
depends on factors other than mentioned here”, the P value is significantly greater than
0.05. Hence it inferred that female customers give more importance to the other factors apart
from these factors in case of next car purchase as compared to male customers, who are
currently using Tata Nano.

Overall relationship between sub dimensions of loyalty and gender for the brand
Tata Nano: The overall loyalty with respect to the brand Tata Nano mainly depends upon the
sub dimensions such as dealer service during pre-sale and the other dimension namely
performance and perceived value of the present car which has a significant importance in
deciding the purchase of the next car. Further both these dimensions have positive
relationship with gender.
 144

4.6 Inference
The testing of the hypothesis related to the first objective indicated that the
respondents had intentions of buying from the same company, when they considered
changing their existing brand of car. They were planning to consider the leading brands like
Maruti, Hyundai and Chevrolet for their repurchase decision.
The results also indicated that there is a significant difference between gender (male
and female) with respect to dimension of customer satisfaction i.e. loyalty. Generally it was
seen male customers were more loyal towards the brand such as Hyundai, Chevrolet and Tata
Nano. Female customers exhibit marginally greater loyalty in case of the brand Maruti.
The respondents also considered purchasing from a different manufacturer, when they
were not satisfied either with the services offered by the dealers, or perceived value and
expectations were not significant.
The loyalty towards the surveyed brands was for a period of 3-6 years, i.e. the
respondents would own the present car for the above period.
Lastly it was found that majority of respondents would change their existing car every five
years.
 145

CHAPTER 5

RELATIONSHIP AMONG VARIOUS DIMENSIONS OF CUSTOMER

SATISFACTION

Contents Page No
----------------------------------------------------------------------------------------------
5.1 Analysis of descriptive statistics for variables 127
of purchase process and after sales service.
5.2 Reliability analysis for the variable Purchase Process. 133
5.3 Reliability Analysis. 137
5.4 Part - II Analysis of Second Objective. 139
5.5 Correlation. 149
5.6 Inference 152
-------------------------------------------------------------------------------------------------------------

The analysis of descriptive statistics is undertaken with respect to the dimensions of

customer satisfaction namely purchase process and after sales service. The other subsections
also include the analysis of other dimensions such as vehicle performance and perceived
value before purchase. Reliability analysis is carried out for the individual dimensions of
customer satisfaction mentioned above. Further, an analysis of the second objective is
undertaken using certain statistical techniques including paired sample t test. Correlation
analysis is used to test the relationship between the various dimensions of customer
satisfaction. Finally, an overall inference with respect to second objective is briefly presented.
 146

CHAPTER 5

TO UNDERSTAND THE RELATIONSHIP AMONG VARIOUS

DIMENSIONS OF CUSTOMER SATISFACTION

In this chapter the analysis of descriptive statistics and reliability analysis is given in
Part-I and Part-II deals with analysis of objective II and related hypothesis. The further
section deals with Part-I.
Table 5.1 Mean and S.D of Variables for the Dimensions of Customer Satisfaction-
Purchase Process

Feedback on Dealer-Purchase Process Mean SD

The dealer gave a good assistance during purchase 4.44 0.61

of my car

4.38 0.63
The sales assistance could answer to all my queries

The financial tie-up for loans were available at the 4.29 0.69
dealer's showroom

4.39 0.64
The booking process was very Smooth.

4.39 0.70
The booking process was quick and efficient.

The delivery of car took place as per the 4.39 0.72

commitment given to me

The overall service I received during the purchase 4.44 0.61

of car was satisfactory
 147

Table 5.2 Mean and S.D of Variables for the Dimensions of Customer Satisfaction-After
Sales Service

Feed back on dealer: after sales service Mean SD

The dealer gives me a reminder when service is due 4.34 0.76
The servicing of the car is done well. 4.34 0.69
The particular problem that I highlight is rectified during
4.31 0.76
service.
The service charges are reasonable. 4.19 0.86
The service center offers valuable suggestions for the smooth
4.37 0.76
maintenance of my car.
I am satisfied with the overall after sales service rendered by
4.38 0.72
the center

Part I- Analysis of Descriptive Statistics

5.1 Analysis of Descriptive Statistics for Variables of Purchase Process
and After Sales Service
The Table 5.1 and Table 5.2 indicate the Descriptive statistics for Variables purchase
process and after sales service. We observe from the descriptive statistics for purchase
process that the “dealer gave a good assistance during the purchase of my car” and “the
overall service I received during the purchase of car was satisfactory”, was rated as a
critical factor by the customers with the (Mean 4.44) for both these factors. The three items
namely “the booking process was very smooth”, “the booking process was quick and
efficient”, and “the delivery of car took place as per the commitment given to me” were
obviously given importance as a critical factors by customers with a (Mean 4.39) for all these
three factors, which is indicative that all the three mentioned factors are given equal
importance by the users of passenger cars. The items namely, “the sales assistance could
answer to all my queries” and “the financial tie-up for loans were available at the
dealer's showroom were rated by customers (Mean 4.38) and (4.29) respectively.
It was seen that customers give due importance to all the seven variables (Items) of
the purchase process.
 148

The second variable of the dimensions of customer satisfaction namely the after sales
service had six items. We observe from the above descriptive statistics that “the dealer gives
me a reminder when service is due” and “the servicing of the car is done well” was a
critical with (Mean 4.34) which was same for both these factors. The other items namely
“the particular problem that I highlight is rectified during service, “the service charges
are reasonable”, “the service center offers valuable suggestions for the smooth
maintenance of my car”, and “I am satisfied with the overall after sales service rendered
by the centre” was rated as important factors by the customers with (Mean 4.31), (Mean
4.19), (Mean 4.37) and (4.38) respectively. It was also noted that all the six items of after
sales service were given more importance by the customers of passenger cars.

Table 5.3 Mean and S.D for the variable vehicle Performance

Mean and S.D- Feedback: Vehicle Performance and

Mean SD
Perceived Value
The services I received at the booking stage was as
4.23 0.69
expected by me before purchase
The mileage of the car is the same as I expected before
4.15 0.77
the purchase.
The performance of the car is as good as I expected. 4.32 0.66
The car is really very comfortable to drive. 4.35 0.65
The lumbar space is spacious to accommodate moderate
4.20 0.83
luggage.
I am very much satisfied with the purchase of my present
4.33 0.63
car.
My present perception about the car is the same as I had
4.23 0.72
expected before purchase.
My perception about the car are still influenced by
4.15 0.92
advertisements and media
The car is really a good value for money 4.37 0.70
The resale value of the car is the same as I had expected
4.18 0.89
before purchase.
 149

Table 5.4 Mean and S.D of Variables for the variable - Perceived value before Purchase

Perceived Value before Purchase Mean SD

I had very high expectations regarding the services at the
4.29 0.81
booking stage of my present car.
I had very high expectations regarding the mileage of the
4.23 0.81
car that I am currently using.
I had very high expectation regarding the performance of
4.23 0.82
the car.
I expected that the car I am using is very comfortable to
4.34 0.70
drive.
I expected the lumbar space is spacious to accommodate
4.32 0.75
moderate luggage.
I expected I will be very much satisfied with the purchase
4.34 0.78
of my present car.
My perceived value before purchase was created through
4.26 0.83
word of mouth from peers.
My expectation on the vehicle was created from
4.10 1.01
advertisements and media.
I expected the purchase of this car is a good value for
4.35 0.74
money.
Buy-back schemes for a new car or higher version is an
4.27 0.88
important decision making factor for next purchase.

5.1.1 Analysis of Descriptive Statistics for the variables Vehicle Performance and
Perceived Value before Purchase
The Table 5.3 and Table 5.4 indicate the descriptive statistics for the third variable,
vehicle performance and perceived value, and fourth variable perceived value before
purchase. We observe from the above descriptive statistics for vehicle performance and
perceived value that “the services I received at the booking stage was as expected by me
before purchase”, “my present perception about the car is the same as I had expected
before purchase” was rated as a critical factor by the customers with the (Mean 4.23) for
 150

both these factors. The two items namely, “the mileage of the car is the same as I expected
before purchase”, “my perception about the car are still influenced by advertisements
and media” was obviously given importance as a critical factors by customers with a (Mean
4.15) for all these two factors, which is indicative that all the two mentioned factors are given
equal importance by the users of passenger cars. The other items namely, “the performance
of the car is as good as I expected” (Mean 4.32), “the car is really comfortable to drive”
(Mean 4.35), “the lumbar space is spacious to accommodate moderate luggage” (Mean
4.20), “I am very much satisfied with the purchase of my present car” (Mean 4.33), “the
car is really a good value for money” (Mean 4.37), “the resale value of the car is the
same as I had expected before purchase”(Mean 4.18) are rated as critical factors by the
customers. It was seen that customers give due importance to all the ten variables (Items) of
the vehicle performance and perceived value.
The fourth variable of the dimensions of customer satisfaction namely the perceived
value before purchase had ten items. We can observe from the above descriptive statistics
that “I expected that the car I am using is very comfortable to drive” and “I expected I
will be very much satisfied with the purchase of my present car” were important factor
with (Mean 4.34) which was same for both these factors.
The two items namely, “I had very high expectations regarding the mileage of the
car that I am currently using”, and “I had very high expectations regarding the
performance of the car”, were rated as important factors by the customers with (Mean
4.23), for both these factors, which were given equal importance by the customers. The other
items namely “I had very high expectations regarding the services at the booking stage of
my present car” had a (Mean 4.29), “I expected the lumbar space is spacious to
accommodate moderate luggage” with (Mean 4.32), “my perceived value before
purchase was created through word of mouth from peers” had (Mean 4.26), “my
expectations on the vehicle was created from advertisements and media” with (Mean
4.10), “I expected the purchase of this car is a good value for money” (Mean 4.35) and
“Buy back schemes for a new car or higher version is an important decision making
factor for next purchase” with a (Mean 4.27). It was found that all the above mentioned
factors were given due importance by the customers of small passenger cars. It was finally
noted that all the ten factors (items) of perceived value before purchase were given due
importance by the respondents or the users of small passenger cars.
 151

Table 5.5 Overall descriptive statistics for the main variables

Std.
Dimensions of N Range Minimum Maximum Mean Variance Skewness Kurtosis
Deviation
Customer Std. Std.
Satisfaction Statistic Statistic Statistic Statistic Statistic Statistic Statistic Statistic Statistic
Error Error
Purchase process 500 19 16 35 30.72 3.212 10.316 -.639 .109 .559 .218
After sales service 500 21 9 30 25.94 3.379 11.421 -1.377 .109 3.170 .218
Vehicle
performance and 500 31 19 50 42.52 4.986 24.863 -.737 .109 .892 .218
perceived value
Perceived Value
500 27 23 50 42.72 4.989 24.893 -.758 .109 .759 .218
before Purchase
Loyalty 500 27 13 40 33.02 4.204 17.675 -.763 .109 1.179 .218

5.1.2 Analysis and Discussions of Combined Mean, SD, Kurtosis, Skewness, Variance

The Table 5.5 indicates the descriptive statistics for the variables of customer
satisfaction dimensions i.e. purchase process (Variable 11 includes 7 sub variables), after
sales service (Variable 12, which includes 6 sub variables), vehicle performance and
perceived value (Variable 13, includes 10 sub variables), perceived value before purchase
(Variable 14, includes 10 sub variables), loyalty (Variable 15, includes 8 sub variables)

From the above table it is evident that the combined mean of the variables, vehicle
performance and perceived value, perceived value before purchase and loyalty is (42.52),
(42.72) and (33.02) respectively. This indicates that majority of customers are quite happy
with the factors mentioned above. The other variables such as purchase process and after
sales service have a mean of (30.72) and (25.94) respectively. It indicates that the
respondents are moderately satisfied with the above factors.
Skewness measures to what extent a distribution of value deviates from symmetry
around the mean. A value of zero represents a symmetric or evenly balanced distribution. A
positive value of skewness indicates a greater number of smaller values.
 152

Negative value of skewness indicates a greater number of larger values and a value of
±1.0 is considered as excellent for most of psychometric studies purposes. From the above
table it is seen that all the dimensions of customer satisfaction variables have a negative
skewness values between -.639 and -1.377. It indicates that the all the variables, have greater
number of larger values.

Kurtosis is measure of peakedness or flatness of a distribution. A kurtosis value near

zero indicates shape close to normal. A positive value of kurtosis indicates a distribution
more peaked than normal. A negative value of kurtosis indicates a shape flatter than normal.
A value of ±1 is considered for most psychometric purposes.

It is observed from the Table 5.5 that all the variables have a value of kurtosis which
is positive and are also close to one. It indicates that the distribution is more peaked than
normal.
 153

5.2 Reliability Analysis for the Variable Purchase Process

Statistics for Mean Variance Std Dev No of Variables
SCALE 30.7160 10.3160 3.2118 7

Item-total Statistics

Table 5.6 Reliability Analysis for Purchase Process

Sub Item for Variable 11 Scale Scale Corrected Alpha

Purchase Process mean if Variance item total if item
item if item correlation deleted
deleted deleted
The dealer gave a good assistance during 26.2720 8.1904 0.5027 0.8096
purchase of my car
The sales assistance could answer to all my 26.3320 7.9296 0.5603 0.8006
queries
The booking process was very smooth. 26.4300 8.1494 0.4256 0.8237
The booking process was quick and 26.3260 7.5989 0.6527 0.7854
efficient.
The delivery of car took place as per the 26.3300 7.3358 0.6605 0.7828
commitment given to me
The overall service I received during the 26.3260 7.5107 0.5758 0.7984
purchase of car was satisfactory
The overall service I received during the 26.2800 7.9014 0.6016 0.7945
purchase of car was satisfactory.

Reliability Coefficient No of Items = 7,

Alpha = 0.8233 N No of cases = 50

Results: It is to be noted that, for all the seven sub variables (items) of Purchase
Process, the alpha values are within 0.7854 to 0.8237, which is more than the acceptable
range.
 154

5.2.1 Reliability Analysis for the Variable After Sales Service

No of
Statistics for Mean Variance STD Dev Variables
SCALE 25.9380 11.4210 3.3795 6

Item-total Statistics

Table 5.7 Reliability analysis for after sales service

Scale Scale Corrected item Alpha if
Q.NO Sub Item 12 mean if Variance total correlation item
After Sales Service item if item deleted
deleted deleted
The dealer gives me a reminder when 21.5960 8.2854 0.5872 0.8160
service is due
The servicing of the car is done well. 21.5940 8.3378 0.6592 0.8032
The particular problem that I highlight 21.6280 8.1299 0.6250 0.8085
is rectified during service.
The service charges are reasonable. 21.7480 8.2370 0.4975 0.8379
The service center offers valuable 21.5640 8.0300 0.6583 0.8018
suggestions for the smooth
maintenance of my car.
I am satisfied with the overall after 21.5600 8.1146 0.6781 0.7986
sales service rendered by the center

Reliability Coefficients No of Cases = 50

No of Items = 6 Alpha = 0.8374

Results: It is to be noted that the Cronbach alpha values are well within the
acceptable range of more than 0.6. It is seen that, for all the six sub variables (items) of after
sales service the alpha values are within 0.7986 to 0.8379, which is more than the acceptable
range.
 155

5.2.2 Reliability Analysis for the Variable Vehicle Performance

No of
Statistics for Mean Variance Std Dev Variables
SCALE 42.5180 24.8634 4.9863 10

Item-total Statistics

Table 5.8 Reliability Analysis for Vehicle performance

Scale Scale
Corrected Alpha
Q.NO Sub Item 13 mean if Variance if
item total if item
Vehicle Performance and Perceived Value item item
correlation deleted
deleted deleted
The services I received at the booking stage 38.2860 20.9381 0.5440 0.8479
was as expected by me before purchase
The mileage of the car is the same as I 38.3640 19.9153 0.6374 0.8398
expected before the purchase.
The performance of the car is as good as I 38.2020 21.0954 0.5485 0.8477
expected.
The car is really very comfortable to drive. 38.1640 21.4079 0.5081 0.8508
The lumbar space is spacious to accommodate 38.3220 19.4252 0.6479 0.8386
moderate luggage.
I am very much satisfied with the purchase of 38.1840 21.1524 0.5734 0.8463
my present car.
My present perception about the car is the 38.2900 20.3065 0.6264 0.8412
same as I had expected before purchase.
My perception about the car are still influenced 38.3660 19.9359 0.5000 0.8543
by advertisements and media.
The car is really a good value for money. 38.1500 20.5205 0.6079 0.8428
The resale value of the car is the same as I had 38.3340 19.8461 0.5349 0.8502
expected before purchase.
 156

5.2.3 Reliability Analysis for the Variable Perceived Value before Purchase

No of
Statistics for Mean Variance STD Dev Variables
SCALE 42.7160 24.8931 4.9893 10
Item-total Statistics

Table 5.9 Reliability Analysis for Perceived value before Purchase

Q.NO Sub Item 13 Scale Scale Corrected Alpha if

Perceived Value Before Purchase mean if Variance item total item
item if item correlation deleted
deleted deleted
I had very high expectations regarding the services 38.4240 20.1124 0.5724 0.7877
at the booking stage of my present car.
I had very high expectations regarding the mileage 38.4900 19.9859 0.5893 0.7858
of the car that I am currently using.
I had very high expectation regarding the 38.4860 20.0259 0.5704 0.7877
performance of the car.
I expected that the car I am using is very 38.3800 21.2421 0.4885 0.7974
comfortable to drive.
I expected the lumbar space is spacious to 38.3980 20.8052 0.5132 0.7945
accommodate moderate luggage.
I expected I will be very much satisfied with the 38.3780 21.0131 0.4593 0.7998
purchase of my present car.
My perceived value before purchase was created 38.4600 20.4653 0.4945 0.7961
through word of mouth from peers.
My expectation on the vehicle was created from 38.6120 19.7850 0.4526 0.8037
advertisements and media.
I expected the purchase of this car is a good value 38.3660 20.9780 0.5010 0.7959
for money
Buy-back schemes for a new car or higher version 38.4500 21.4103 0.3318 0.8149
is an important decision making factor for next
purchase.
 157

5.2.4 Analysis of the Cronbach alpha Values of the dimension of Customer Satisfaction-
Vehicle Performance and Perceived Value

Reliability Coefficients
No of Cases = 500.0 No of Items = 10
Alpha = .8592

Results: It is to be noted from the Table 5.8 that the Cronbach alpha values are well
within the acceptable range of more than 0.6. It is seen that, for all the ten sub variables
(items) of vehicle performance and perceived value the alpha values are within 0.8386 to
0.8508, which is more than the acceptable range

5.2.5 Analysis of the Cronbach alpha Values of the dimension of Customer

Satisfaction- Perceived Value before Purchase

Reliability Coefficients
No of Cases = 500.0 No of Items = 10
Alpha = .8130

Results: It is to be noted from the Table 5.9 that the Cronbach alpha values are well
within the acceptable range of more than 0.6. It is seen that, for all the ten sub variables
(items) of vehicle performance and perceived value the alpha values are within 0.7858 to
0.8149, which is more than the acceptable range.

5.3 Reliability Analysis

The question of reliability addresses the issue of whether the instrument will produce
the same results each time it is administered to the same person in the same setting.
Instruments used in social sciences are generally considered reliable if they produce similar
results regardless of who administers them and regardless of which forms are used. The two
types of reliability used generally are Cronbach alpha (also referred to as coefficient alpha or
α) and split-half reliability. For the study that we had conducted, we used Cronbach alpha.
The Results of reliability test are as shown in Table 5.9 Cronbach alpha is the
coefficient of reliability of test score for a sample of respondents. Cronbach alpha will
generally increase as the inter-correlations among the test items increase and is thus known as
consistency estimate of reliability of test scores. In general a value of 0.6 is acceptable.

According to above Table Cronbach value of 0.6 is acceptable. The scores, which are within
the limits of the acceptable range, are used for further statistical applications.
 158

Table 5.10 Cronbach alpha values for all the Dimensions of customer Satisfaction

Sl. Variables No of Cronbach alpha value

No items
1 Feedback on Dealer: Purchase 7 0.8233
Process
2 After sales service 6 0.8374
3 Vehicle performance and 10 0.8592
perceived value
4 Perceived Value before Purchase 10 0.8130
5 Loyalty 8 0.7140

5.3.1 Cronbach alpha Values for all the Dimensions of Customer Satisfaction

The above Table 5.10 indicates the overall Cronbach alpha value for variable items of
the dimensions of customer satisfaction. From Table it can be seen that there were 7 items
for the variable Purchase Process, 6 items for the variable after sales service, 10 items for the
variable, vehicle performance and perceived value, 10 items for the variable, perceived value
before purchase, and 8 items for the variable, loyalty. These items were the sub-dimensions
(Items) of the customer satisfaction. It is further observed that, the first item i.e. the feedback
on Dealer: Purchase Process, Cronbach alpha value was 0.8233. The second item, the after
sales service, Cronbach alpha value was 0.8374; the third item i.e. the vehicle performance
and perceived value Cronbach alpha value was 0.8592. The fourth item namely perceived
value before purchase had a Cronbach alpha value of 0.8130. The fifth item, Loyalty had a
Cronbach alpha value of 0.7140. Inference: The range of alpha values for all the variables is
between 0.7 and 0.9. Thus the instrument was highly reliable.
 159

5.3.2 Paired sample T Test

Paired sample t test examines the difference in means of the dependent samples.
Paired sample t Test is also called dependent sample t Test. Two samples are said to be
dependent if each member of one sample relates to the member of the other sample.
Key Terms: According to Dareen George, Paul Mallery, the following key terms
have been defined.
1) Paired Sample Statistics: The Paired Sample statistics table displays the summary
measures (Mean, N, Std.Deviation, and Std.Error, of Mean) of selected variables for
the paired T-Test.
2) T-values: The actual t value is the difference between means divided by the standard
error.
3) 2-Tail Significance: (associated with t-values) The probability that the difference in
means could happen by chance.
4) Mean Difference: The difference between the two means.
5) 95% C.I (Confidence Interval): With t tests, the confidence interval deals with the
difference-between-means value. If a large number of samples were drawn from a
population, 95% of the mean differences will fall between the lower and upper values
indicated.

5.4 Part-II Analysis of Second Objective

To understand the relationship among dimensions of customer satisfaction.

To study the above objective one hypothesis was formulated to test the relationship
between the dimensions of customer satisfaction
There were mainly five dimensions that were formulated by us for conducting the
study. They were mainly the dimensions such as purchase process, after sales service, vehicle
performance and perceived value, perceived value before purchase and loyalty. These five
were altogether termed as dimensions of customer satisfaction, which also included loyalty.
Customer satisfaction is a very important aspect for judging whether a customer will
be loyal towards the brand/product/service or not. It can be judged during the pre-purchase,
during purchase and post purchase.
 160

Customer satisfaction aims at identifying and fulfilling needs of the customers. The
marketing concept emphasizes that it is not enough if the firm has customer orientation; it is
essential that such orientation leads to customer satisfaction. Hence customer satisfaction is
the central theme of the marketing concept and it is achieved only by delivery of customer
value.
Customer loyalty is one of the important aspects of marketing, which indicates,
whether customers are committed to same brand/product/service or not. Loyalty arises, when
customers’ expectations are fulfilled in excess towards the product/brand.
The following section of this chapter focuses on Reliability analysis for the dimensions of
customer satisfaction and testing the above formulated objectives and dwells on the
hypothesis in detail.

5.4.1 ANALYSIS FOR SECOND OBJECTIVE: Relationship between Dimensions of

Customer satisfaction
For the analysis of the second objective, as indicated in the earlier section of this
chapter, we had formulated one hypothesis. The test used was Paired sample T Test,
Correlation analysis, which is indicated further in this chapter.

5.4.2 Testing of Hypothesis II (a):

There is a significant positive relationship between
a) Vehicle performance and perceived value and perceived value before purchase
b) Purchase process and after sales service for the brands such as Maruti, Hyundai,
Chevrolet and Tata Nano.
c) Dimensions of customer satisfaction.

For testing the above Hypothesis Paired Sample T Test and Correlation was used. The
results of which are indicated below. The output Tables AB 9-12 is indicated in the
Appendix.
 161

Table 5.11 Paired Sample T Test between Perceived value before purchase and
Vehicle performance for Brand Maruti Hypothesis II (a)

Std. P Value
Dimensions of CS Mean N T Value P Value
Deviation (1-tailed)

Perceived Value 41.89 150 5.312

before Purchase

0.941 0.348 0.174

Vehicle Performance 41.51 150 5.185

and Perceived Value

Hypothesis: There is a significant positive relationship between vehicle performance

and perceived value and perceived value before purchase for the brand Maruti.

Results: Since the P value is significantly greater than 0.05, the hypothesis is rejected
at 5% significance level. Hence it is concluded that there is no significant positive
relationship between vehicle performance and perceived value and perceived value before
purchase with respect to the Brand Maruti.

Discussions: It is seen from the Table 5.11 that P Value is significantly greater for the
brand Maruti. It is observed that both these factors are given different preferences and are
perceived as independent variables by customers. Further it is seen that customers give more
prominence to perceived value before purchase as compared to vehicle performance in case
of the brand Maruti.
 162

Table 5.12 Paired Sample T Test between Perceived value before purchase and
Vehicle performance for Brand Hyundai for Hypothesis II (a)

Std. P Value
Dimensions of CS Mean N T Value P Value
Deviation (1-Tailed)
Perceived Value before
Purchase 43.17 150 3.991
2.722 0.007 0.0035
Vehicle performance
and perceived value 42.02 150 4.964

Hypothesis: There is a significant positive relationship between vehicle performance

and perceived value and perceived value before purchase for the brand Hyundai.

Results: Since the P value is significantly less than 0.01, the hypothesis is accepted at
1% significance level. Hence it is concluded that there is a significant positive relationship
between vehicle performance and perceived value and perceived value before purchase with
respect to the Brand Hyundai.

Discussions: It is seen from the Table 5.12 that P Value is significantly less, hence it
is further inferred that customers consider these factors important, which are important
dimensions of customer satisfaction. Further it is observed that perceived value before
purchase and vehicle performance is related dimensions of customer satisfaction.
 163

Table 5.13 Paired Sample T Test between Perceived value before purchase and
Vehicle performance for Brand Chevrolet for
Hypothesis II (a)

Std. P Value
Dimensions of CS Mean N T Value P Value
Deviation (1-Tailed)

Perceived Value before 42.87 150 5.385

Purchase

1.382 0.169 0.0845

Vehicle performance 43.46 150 4.549

and perceived value

Hypothesis: There is a significant positive relationship between vehicle performance

and perceived value and perceived value before purchase for the brand Chevrolet.

Results: Since the P value is marginally greater than 0.05, the hypothesis is accepted
at 5% significance level. Hence it is concluded that there is a marginal positive relationship
between vehicle performance and perceived value and perceived value before purchase with
respect to the Brand Chevrolet

Discussions: It is seen from the Table 5.13 that the P Value is marginally greater.
Hence the customers give more importance to these to these dimensions independently.
Further it is inferred that customers give moderately more prominence to vehicle performance
as compared to perceived value before purchase with respect to the brand Chevrolet.
 164

Table 5.14 Paired Sample T Test between Perceived value before purchase and
Vehicle performance for Brand Tata Nano for
Hypothesis II (a)

Std. P Value
Dimensions of CS Mean N T Value P Value
Deviation (1-tailed)

Perceived Value 43.38 50 5.272

before Purchase

2.103 0.041 0.0205

Vehicle performance 44.22 50 4.904

and perceived value

Hypothesis: There is a significant positive relationship between vehicle performance

and perceived value and perceived value before purchase for the brand Tata Nano.

Results: Since the P value is less than 0.05; the hypothesis is accepted at 5 percent
level of significance. Hence it concluded that there is a significant positive relationship
between vehicle performance and perceived value and perceived value before purchase with
respect to the brand Tata Nano.

Discussions: The P value is marginally less than 0.05, which is indicative in table
5.14 the customers give more importance to both these dimensions perceived value before
purchase and vehicle performance. Further it is inferred that the customers give prominence
to both these dimensions, which are important factors/dimensions of customer satisfaction
with reference to the brand Tata Nano.
 165

5.4.3 Testing of sub Hypothesis II (b)

Hypothesis: There is significant positive relationship between the dimensions of

customer satisfaction such as Purchase process and after sales service for the brands such as
Maruti, Hyundai, Chevrolet and Tata Nano.
For Testing the above Hypothesis Paired Sample T Test was used. The results of
which are indicated below. The output Tables AB 13-AB 16 is indicated in the Appendix.

Table 5.15 Paired Sample T Test between Purchase Process and

After sales service for the Brand Maruti for Hypothesis II (b)

Dimensions of
Mean N Std. Deviation T Value P Value P Value
C.S
Purchase
4.3638 150 0.47986
process 2.566 0.0055
0.011
After sales
4.2667 150 0.57379
service

Hypothesis: There is a significant positive relationship between Purchase process and

after sales service for the brand Maruti

Results: Since the P value is significantly less than 0.05 the hypothesis is accepted at
5 percent level of significance. Hence it is concluded that there is a significant positive
relationship between purchase process and after sales service with respect to the brands such
as Maruti.

Discussions: It is noticed from the table 5.15 that the P value is significantly lesser
than 0.05, hence it is indicative that there is a positive relationship between these variables
i.e. Purchase process and after sales service. Further it is signified that Purchase process and
after sales service are dependent on dimensions of customer satisfaction with reference to the
brand Maruti. It is also observed that customers give greater prominence to purchase process
and after sales service with respect to Maruti.
 166

Table 5.16 Paired Sample T Test between Purchase Process and

After sales service for the Brand Hyundai for Hypothesis II (b)

Std. P Value P Value

Dimensions of Mean N T Value
Deviation (1-tailed)

Purchase
4.3200 150 0.45648
process

0.651 0.516 0.258

After sales
4.2933 150 0.54911
service

Hypothesis: There is a significant positive relationship between Purchase process and

after sales service for the brand Hyundai.

Results: Since the P value is significantly greater than 0.05 the hypothesis is rejected
at 5 percent level of significance. Hence it is concluded that there is no significant positive
relationship between Purchase process and after sales service with respect to the brand such
as Hyundai.

Discussions: It is noticed from the table 5.16, that the P value is significantly greater,
hence it is signified that customers give importance to both these dimensions as independent
factors of customer satisfaction. Both these factors are perceived differently by customers. It
is also further observed that customers give comparatively greater prominence to purchase
process as compared to after sales service with respect to the brand Hyundai.
 167

Table 5.17 Paired Sample T Test between Purchase Process and

After sales service for the Brand Chevrolet for Hypothesis II (b)

Std. T Value P Value

Dimensions of C.S
Mean N Deviation

Purchase process 4.4343 150 0.42805

1.745 0.083
After sales service 4.3656 150 0.56814

Hypothesis: There is a significant positive relationship between Purchase process and

after sales service for the brand Chevrolet.

Results: Since the P value is marginally greater than 0.05, the hypothesis is accepted
at 5 percent level of significance. Hence it is concluded that there is a marginal significant
positive relationship between Purchase process and after sales service with respect to the
brand such as Chevrolet.

Discussions: It is noticed from the table 5.17, that the P value is marginally greater,
hence it is indicative that there is a positive relationship between these variables with respect
to brand Chevrolet. It is signified that these factors are related dimensions of customer
satisfaction. Further it is signified that customers give prominence to purchase process and
after sales service with respect to the brand Chevrolet.
 168

Table 5.18 Paired Sample T Test between Purchase Process and

After sales service for the Brand Tata Nano for Hypothesis II (b)

Std. P Value
Dimensions of C.S Mean N T Value P Value
Deviation (1-tailed)

Purchase process 4.5257 50 0.45947

1.032 0.307 0.153

After sales service 4.4533 50 0.54403

Hypothesis: There is a significant positive relationship between Purchase process and

after sales service for the brand Tata Nano.

Results: Since the P value is significantly greater than 0.05, the hypothesis is rejected
at 5 percent level of significance. Hence it is concluded that there is no significant positive
relationship between Purchase process and after sales service with respect to the brand such
as Tata Nano.

Discussions: It is noticed from the table 5.18 that the P value is significantly greater
than 0.05. It is signified that purchase process and after sales service are independent
dimensions with reference to Tata Nano. Further it is signified that customers give
comparatively greater prominence to purchase process as compared to after sales service with
respect to the brand Tata Nano.
 169

5.5 Correlation:
Correlations are designated by the lower case letter r and range in value from -1 to
+1. A correlation is often called a bivariate correlation to designate a simple correlation
between two variables, as opposed to relationships among more than two variables, as
frequently observed in multiple regressions or structural equation modeling. A correlation is
also frequently called the Pearson Product moment correlation or Karl S Pearson Correlation.

Key Terms: According to Dareen George, Paul Mallery, the following key terms have
been defined.

1) Perfect Positive Correlation (r=1): A correlation of +1 designates a perfect positive

correlation. Perfect indicates that one variable is precisely predictable from the other
variable. Positive means as one variable increases other variable also increases.
2) Positive Correlation (0<r<1): A positive (but not perfect) correlation indicates that
as the value of one variable increases, the value of other variable also tends to
increase. The closer the correlation value is to 1, the stronger is the tendency; the
closer the correlation value is to 0, the weaker is that tendency.
3) No Correlation (r=0): A correlation of 0 indicates no relation between the two
variables.
4) Negative Correlation (-1<r<0): A negative correlation indicates a relation in which
as one variable increases, the other variable has a tendency to decrease. The closer the
correlation value is to -1, the stronger is that tendency. The closer the correlation
value is to 0, the weaker is that tendency.
5) Perfect negative (r=-1) correlation: Perfect correlations (positive or negative) exist
only in mathematical formula and direct physical or numerical relations.
6) Significance: The significance (or p value) represents the degree of rarity in certain
results. A significance less than .05 (p<.05) means that there is less than 5% chance
that this relationship occurred by chance.
 170

5.5.1 Testing of Hypothesis II (c)

Null Hypothesis: There is significant positive correlation between:

a) Dimensions of customer satisfaction

For Testing the above Hypothesis, Correlation Analysis and Multiple Regression were
used, the results of Correlation are given below. The Detailed Output Table AB 17 is
given in Appendix

Table 5.19 Correlation coefficient between Dimensions of Customer Satisfaction

Vehicle Perceived
Dimensions of
Purchase After sales performance Value
customer Loyalty
process service and perceived before
satisfaction
value Purchase
Purchase process 1 0.569(**) 0.498(**) 0.443(**) 0.181(**)
After sales service - 1 0.572(**) 0.489(**) 0.220(**)
Vehicle
performance and - - 1 0.498(**) 0.235(**)
perceived value
Perceived Value
- - -- 1 0.248(**)
before Purchase
Loyalty - - - - 1
* Correlation is significant at the 0.05 level (2-tailed)
** Correlation is significant at the 0.01 level (2-tailed)

Results: The correlation coefficient between purchase process and after sales service
is 0.569 which indicates nearly 57% positive relationship between purchase process and after
sales service and is significant at 1% level. The correlation coefficient between purchase
process and vehicle performance is 0.498, which indicates nearly 50% of positive relationship
between purchase process and vehicle performance and perceived value and is significant at
1% level.
The correlation coefficient between purchase process and perceived value before
purchase is 0.443, which indicates nearly 43% positive relationship between purchase process
and perceived value before purchase and is significant at 1% level. The correlation coefficient
between purchase process and loyalty is 0.181, which indicates nearly 18% of positive
relationship between purchase process and loyalty and is significant at 1% level.
 171

Similarly, the correlation coefficient between after sales service and vehicle performance is
0.572, which indicates nearly 57% positive relationship between the 2 dimensions and is
significant at 1% level. The correlation coefficient between after sales service and perceived
value before purchase is 0.489, which indicates nearly 49% positive relationship between the
two dimensions and is significant at 1% level.
The correlation coefficient between after sales service and loyalty is 0.220 which
indicates nearly 22% positive relationship between after sales service and loyalty and is
significant at 1% level.
Similarly the correlation coefficient vehicle performance and perceived value before
purchase is 0.498 which indicates nearly 50% of positive relationship between vehicle
performance and perceived value and is significant at 1% level. The correlation coefficient
between vehicle performance and loyalty is 0.235 which indicates 24% positive relationship
between vehicle performance and loyalty and is significant at 1% level.

Lastly the correlation coefficient between perceived value before purchase and loyalty
is 0.248 which indicates nearly 25% of positive relationship between perceived value before
purchase and loyalty and is significant at 1% level.

Since the P value is less than 0.01.Hence the hypothesis is accepted at 1 percent
significance level. Hence it is concluded that there is relationship between the dimensions of
customer satisfaction.

Discussions: The upper portion of Table AB-17 in Appendix indicates that each cell
identifies the corresponding correlations between the dimensions of customer satisfaction
accurate to three decimals. The middle portion indicates the significance of each
corresponding correlations. The lower portion records the number of subjects involved in
each correlation. The notes below the table identify the meaning of the asterisks and indicate
whether the significance levels are one tailed or two tailed. The diagonal of 1.000s shows that
a variable is perfectly correlated with itself. It is seen from the table that all the dimensions of
customer satisfaction are perfectly correlated with itself. It is also noticed that there is a
strong positive relationship between loyalty and perceived value before purchase which has
(r = .248, p <.001). Similarly it is also noticed that all the dimensions of customer
satisfaction have strong positive correlation p values. The correlation table is indicated in
table 5.19
 172

5.6 Inference:

The following were some of the crucial inference made from the analysis of the
second hypothesis:

The dimensions of customer satisfaction such as purchase process, after sales service,
vehicle performance and perceived value, perceived value before play an important role in
enhancing the customer satisfaction towards a particular brand.

It was seen the there is a significant positive relationship between the variables
vehicle performance and perceived value and perceived value before purchase for the brands
such as Maruti and Chevrolet. But for brand such Hyundai and Tata Nano, there is no
significant positive relationship between vehicle performance and perceived value and
perceived value before purchase.

It was further seen that there is no significant positive relationship between purchase
process and after sales service with reference to the brand Maruti. But for the other brands
such as Hyundai, Chevrolet and Tata Nano, there is a significant positive relationship
between purchase process and after sales service.
 173

CHAPTER 6

MODEL FOR LOYALTY AND DIMENSIONS OF CUSTOMER

SATISFACTION

Contents Page No
----------------------------------------------------------------------------------------------
6.1 To Drive a model for loyalty and dimensions of customer satisfaction 154
using regression model and structural equation model
6.2 Multiple Regression 155
6.3 Forward analysis of Regression 159
6.4 Inference- Regression model 163
6.5 Structural Equation Model on Dimensions of 165
customer Satisfaction.
6.6 Inference- Overall inference Objective III 169
--------------------------------------------------------------------------------------------------------------

The analysis of the third objective involves derivation of a model. The model
derivation involves the loyalty and other dimensions of customer satisfaction such as
purchase process, after sales service, vehicle performance and perceived value before
purchase. Regression analysis involves the forward analysis and other sub sections also
involved backward analysis. Comparisons are made in the inference between the two
methods of regression analysis. The other technique used for derivation of model is the
structural equation model, where all the five dimensions of customer satisfaction are
considered. Finally, the chapter concludes with an overall inference of the third objective.
 174

CHAPTER 6

TO DERIVE A MODEL FOR LOYALTY AND DIMENSIONS OF

CUSTOMER SATISFACTION

6.1 To Derive a model for loyalty and Dimensions of customer

satisfaction using Regression model and Structural Equation
Modeling (SEM)

To study the above mentioned objective the researcher has formulated one hypothesis.
The customer satisfaction study also takes in to consideration certain important variables such
as purchase process, after sales service, vehicle performance and perceived value, perceived
value before purchase and loyalty.

The main purpose of a model is to depict the graphical depiction between various
concepts variable fit together. There are various models in research such as hierarchy of
effects model, graphical model that depict causal connections among certain theoretical
propositions, structural model that depicts the causal relationships (connections among latent
variables) by mapping them, measurement model, and regression model.

In the model formulation certain variables are generally dependent variables and
certain variables are dependent variables. We had formulated a set of dependent and
independent variables for the purpose of deriving the model. One of the main higher order
statistical technique used for model formulation in our research was multiple regression
model. The other technique, which was used, was SEM i.e. Structural Equation Modeling
using AMOS (Analysis of Moment Structures)

The following sections of these chapters mainly dwell upon the derivation of a
suitable model for loyalty using these two techniques
 175

6.2 Multiple Regression

Multiple Regression indicates the influence of two more variables on a designated
dependent Variable.
Key Terms Defined: According to Dareen George, Paul Mallery, the following
key terms has been defined.
1) Forward Regression: This method will enter variables one at a time, based on
the designated significance value to enter. The process ceases when there are no
additional variables that explain a significant portion of additional variance

2) Backward Regression: This method enters all independent variables at one time
and then removes variables one at a time based on preset significance value to
remove. The default value to remove a variable is p>.10. When there are no more
variables that meet the requirement for removal, the process ceases.

3) Enter Method: This method is a forced entry option. PASW will enter at one
time all specified variables regardless of the significance levels.

4) Stepwise: This method combines both forward and backward procedures. Due to
complexity of intercorrelations, the variance explained by certain variables will
change when the new variables enter the equation. Stepwise is the most
frequently used of the regression methods.

5) Adjusted coefficient of determinant (Adjusted R Square): The adjusted R2 is

considered a better population estimate and is useful when comparing the R2
values between models with different numbers of independent variables.

6) Coefficient of Determinant (R Square): The R2 value identifies the portion of

variance accounted for by the independent variables.

7) Beta Coefficient: Standardized Regression coefficients that allows for a direct

comparison between coefficients of deviation to their relative explanatory power
of the dependent variable.
 176

8) Dependent Variable: Variables being predicted or explained by set of

Independent variables.

9) Standard error of estimate: Precision is measured by standard error of estimate,

a type of standard deviation measurement; the smaller the standard error of
estimate, the higher is the precision of sample. The Ideal sample design is
produces a small standard error of estimate.

10) Regression: statistics relating to the explained portion of variance.

11) Residual: Statistics relating to unexplained portion of variance.

12) DF: For regression the number of independent variables in the equation N minus
the number of independent variables entered minus 1.

13) Sum of Squares: The regression sum of squares corresponds to the between-
group sum of squares in ANOVA, and the residual sum of squares corresponds to
the within-group sum of squares in ANOVA.

14) Mean Square: Sum of squares divided by Degree of Freedom.

15) F: Mean square regression divided by mean square residual.

16) Significance F: Probability that this F value could occur by Chance.

6.2.1 Testing of Hypothesis using Regression

For Testing the hypothesis related to regression the researcher hypothesis
Regression Analysis of Dimensions of Customer satisfaction
Regression is the determination of statistical relationship between two or more
variables. In simple regression two variables are used. One variable (Independent) is the
cause of behaviour of another one (dependent) variable.
When there are more than two independent variables the analysis concerning
 177

relationship is known as multiple regression and the equation describing such relationship is
called the multiple regression equation. Regression analysis is concerned with the derivation
of an appropriate mathematical expression and is derived for finding values of a dependent
variable on the basis of independent variable.
It is thus designed to examine the relationship of a variable Y to a set of other
variables X1, X2, X3,...........................Xn. the most commonly used linear equation is Y= b1 X1
+ b2 X2 + ……+bn Xn+ b0
Here Y is the dependent variable, which is found X1 X2......and Xn are the known
variables with which predictions are made and b1, b2,……bn are the coefficient of variables.
In this study, the dependent variable is loyalty, Independent variables are purchase process,
after sales service, vehicle performance and perceived value, perceived value before purchase
and analysis are discussed as follows.
Dependent variable : Loyalty (Y)
Independent variables :
1. Purchase Process (X1)
2. After sales service (X2)
3. Vehicle Performance and perceived value (X3)
4. Perceived value before purchase (X4)
Multiple R Value : 0.286
R Square value : 0.082
F value : 11.061
:
P value 0.000

6.2.2 Testing of Hypothesis III(a)

There is positive association between loyalty and dimensions of customer Satisfaction
such as a) Purchase Process b) after sales service
c) Vehicle Performance and perceived value d) perceived value before purchase
For testing the hypothesis multiple regression was used. The detailed output table AB
18- AB 27 is indicated in Appendix. The hypothesis was tested through Enter, Forward and
Backward method of Regression. The detailed outputs are given below and in the subsequent
sections, the results and discussions regarding the entire two mentioned models are indicated.
 178

Table 6.1 Summary of Forward and Backward Method of Multiple Regression Model for the Hypothesis
III (Objective 3)

Independent Model 1 Model 2 Results

Variable Forward Backward
Method Method
(Sig) (Sig)
Purchase Process - 0.732 Not Supported
X1
After sales service - 0.206 Not Supported
X2
Vehicle Performance **
and Perceived value 0.003 0.054 Supported
X3
Perceived value ** **
before Purchase 0.001 0.005 Supported
X4
B Values 0.025
(Constant) 0.125 0.092
0.147 0.092
0.125
ANOVA
F Test 20.951 11.061
(Sig)
R square 0.078 0.082
Multiple R Value 0.279 0.286
P Value 0.000 0.000
Dependent variable: Loyalty
Predictors:
a. (Constant), Perceived Value before Purchase, Purchase process in enter model Vehicle performance
and perceived value, After sales service
Predictors in Forward Model
b. Predictors in the Model: (Constant), Perceived Value before Purchase
c. Predictors in the Model: (Constant), Perceived Value before Purchase, Vehicle performance and
perceived value c Dependent Variable: Loyalty
Predictors in Backward Model
d. Predictors: (Constant), Perceived Value before Purchase, Purchase process,Vehicle performance and
perceived value, after sales service
e. Predictors: (Constant), Perceived Value before Purchase, Vehicle performance and Perceived value,
after sales service
f. Predictors: (Constant), Perceived Value before Purchase, Vehicle performance and perceived value
g. Dependent Variable: Loyalty
 179

Table 6.2 Variables in the multiple forward Regression Analysis

Variables Unstandardized Std, Standardized Sig, value

Model t value
coefficients error coefficients P value

**
2 (Constant)
21.462 1.797 11.943 0.000

Perceived **
Value before 0.147 0.042 0.174 3.500 0.001
Purchase
(X1)

Vehicle
**
performance
0.125 0.042 0.148 2.978 0.003
and
perceived
value (X2)
a Dependent Variable: Loyalty

6.3 Forward Analysis of Regression

In this study, the dependent variable is loyalty, independent variables are vehicle
performance and perceived value, perceived value before purchase and analysis are discussed
as follows. The forward Regression Model is indicated in table 6.2

Results: The P values (0.001 and 0.003) in case of the dimension perceived value
before purchase and vehicle performance and perceived value are significantly less than 0.01.
Hence the hypothesis is accepted at 1 percent significance level. Hence it is concluded that
there is positive association between loyalty in dimensions of customer satisfaction and
vehicle performance and perceived value, and perceived value before purchase.
 180

Discussions: The multiple correlation coefficients is 0.279, which measures the

degree of relationship between the actual values and the predicted values of loyalty. Because
the predicted values are obtained as a linear combination of Perceived value before purchase
in Model 1 (X1), Vehicle performance and perceived value (X2), and the coefficient value
.279 indicates that the relationship between loyalty and the independent variables is quite
strong and positive.

The coefficient of Determination R-square measures the goodness of fit of the

estimated Sample Regression Plane (SRP) in terms of the proportion of the variation in the
dependent variables explained by fitted sample regression equation. Thus the value of R
square is 0.078 simply means that about 78% of the variation in adjustment is explained by
the estimated SRP that uses vehicle performance and perceived value and perceived value
before purchase as the independent variables and R value is significant at 1% level.
The multiple forward regression equation for model 1 is as given below

Model 1 :
Y= 21.462 + 0.147 X1 (PVBP) + 0.125X2 (VPPV)

In Model 1 the coefficient of X1 is 0.147, which represents the partial effect of

perceived value before purchase on loyalty holding vehicle performance and perceived value
as constant. The estimated positive sign implies that such effect is positive and that loyalty
would increase by 0.147 for every unit increase in vehicle performance and perceived value
and this coefficient value is significant at 1 % level.

The coefficient of X2 is 0.125 which represents the partial effect of vehicle

performance and perceived value on loyalty holding perceived value before purchase as
constant. The estimated positive sign implies that such an effect is positive that loyalty would
increase by 0.125 for every unit increase in vehicle performance and perceived value and this
coefficient value is significant at 1 % level.
 181

6.3.1 Backward Regression Analysis for Dimensions of Customer satisfaction

In this study, the dependent variable is loyalty, independent variables are vehicle
performance and perceived value, perceived value before purchase and analysis are discussed
as follows.

Table 6.3 Variables in the Multiple Backward Regression Analysis

Unstandardized Std Standardized

t value Sig value
Model 2 Variables coefficients error coefficients

2 (Constant) 20.622 2.014 10.241 0.000

Purchase process 0.025 0.072 0.019 0.343 0.732
After sales
0.092 0.073 0.074 1.267 0.206
service
Vehicle
performance and 0.092 0.047 0.109 1.930 0.054
perceived value
Perceived Value **
before Purchase 0.125 0.044 0.149 2.831 0.005

a Dependent Variable: Loyalty

Results: Since the P value (0.732, 0.206) is greater than 0.05 in case of the
dimensions of customer satisfaction such as purchase process, after sales service, the
hypothesis is rejected at 5 percent level of significance. Hence it is concluded that there is no
positive association between loyalty in dimensions of customer satisfaction and dimensions
such as purchase process, after sales service.
In case of the dimension Vehicle Performance and Perceived Value, the P value
(0.054) is marginally greater than 0.05, hence the hypothesis is accepted at 5 % level of
significance. Consequently it is concluded that there is significant association between
Loyalty and vehicle performance and perceived value.
In case of the last dimension, i.e. perceived value before purchase, the P value (0.005)
is significantly less than 0.01; the hypothesis is accepted at 1 percent significance level.
Hence it is concluded that there is positive association between loyalty and dimension of
customer satisfaction i.e. perceived value before purchase
 182

Discussions: The multiple correlation coefficients is 0.286, which measures the

degree of relationship between the actual values and the predicted values of loyalty. Because
the predicted values are obtained as a linear combination of all the 4 dimensions of customer
satisfaction in Model 2. Coefficient value .286 indicates that the relationship between loyalty
and the 3 independent variables is quite strong and positive.
The coefficient of Determination R-square measures the goodness of fit of the
estimated Sample Regression Plane (SRP) in terms of the proportion of the variation in the
dependent variables explained by fitted sample regression equation. Thus the value of R
square is 0.082, which simply means that about 82% of the variation in adjustment is
explained by the estimated SRP that uses after sales service vehicle performance and
perceived value and Perceived value before purchase as the independent variables and R
value is significant at 1% level. The results of Model are indicated in Table 6.3
The multiple backward regression equation for Model 3 is as given below:
Model 2 :
Y (Loyalty) = 20.622 + .025 X1 (PP) + .092 X2 (After sales Se)
+ .092 X3 (VPPV) + .125 X4 (PVBP)

In Model 2 the coefficient of X1 0.025 represents the partial effect of purchase

process on loyalty holding after sales service as constant. The estimated positive sign implies
that such effect is positive and that loyalty would increase by 0.025 for every unit increase in
purchase process and this coefficient value is significant at 1% level.
The coefficient of X2 0.092 represents the partial effect of after sales service on
loyalty holding Purchase process as constant. The estimated positive sign implies that such an
effect is positive and that loyalty would increase by 0.092 for every unit increase in after
sales service and this coefficient value is not significant at 5 % level.
The coefficient of X3 0.092 represents the partial effect of vehicle performance and
perceived value on loyalty holding after sales service as constant. The estimated positive sign
implies that such effect is positive that loyalty would increase by 0.092 for every unit
increase in vehicle performance and perceived value and this coefficient value is not
significant at 5 % level.
 183

The coefficient of X4 0.125 represents the partial effect of perceived value before
purchase on loyalty holding vehicle performance and perceived value as constant. The
estimated positive sign implies that such effect is positive that loyalty would increase by
0.125 for every unit increase in perceived value before purchase and this coefficient value is
not significant at 5 % level.

6.4 Inference - Regression Model

From all the 2 Models, it is seen that supported model of for the Multiple Regression
Equation for Dimensions of Customers Satisfaction i.e. Loyalty is given by:
Model 2 :
Y= 21.462 + 0.147 X1 (PVBP) + 0.125X2 (VPPV)

Where X1= Perceived value before purchase

X2= vehicle performance and perceived value
Hence with respect to the second objective it is found that dimensions of customer’s
satisfaction are purchase process, after sales service, vehicle performance and perceived
value, perceived value before purchase and loyalty. The relationship between customers
satisfaction is given by certain statistical measures such as, Multiple Regression Analysis.
In further sections of this Chapter, it is attempted to develop a model using Structural
Equation Model using SPSS.

6.4.1 Key Terms in Structural Equation Model: According to Niels.J. Blunch, the
following key terms have been defined.

Structural equation model comprises of path analysis and factor analysis that are of
paramount importance. It also depicts the causal connections among the latent variables,
which must have assigned scales. It also facilitates graphical model, which represents the
connections in the form of Mapping between variables.
Exogenous variable and endogenous variables: It is a variable that does not appear
as dependent variable anywhere in the model. All the other variables are called endogenous
variables i.e. independent variable. Exogenous variable are listed and classified
(predetermined) i.e. dependent variable and endogenous (post determined).
The parameters are classified as fixed (the regression weight of the error term) or labeled, i.e.
provided with a name, which can be used, when referred to.
 184

AMOS: Analysis of Moment Structures is a computer program to facilitate Analysis.

AMOS is one of the user-friendliest software or interfaces.

Error Terms: The e-variables indicate that the factors other than the latent variable
affect the result of a measurement- e (error) which is the combined effect of all such effects.
In other word; e is the measurement error of the indicator in question. This also includes the
combined effect of all factors having an effect on the dependent variable.

Standardized Coefficients: Standardized coefficients are independent of the

measurement units. This is very important in the case of SEM, where the measurement scales
of the variables and especially those of the latent variables are often more or less arbitrary.
Standardized coefficients depend on the variances in the population. They are also called
regression weights in AMOS.
Estimate: sometimes referred to as t rule, it states that the number of pieces of
information shall be at least as large as the number of parameters to be estimated for the
estimation.
Standard Error: The standard deviation of a sampling distribution is called the
standard error.
Steps for SEM Analysis:
1. Statement of research questions.
2. Formulation of SEM Model.
3. Examination of whether the model can be estimated – the so called identification
problem.
4. If necessary, a reformulation of the model in order to make it estimatable.
5. Data collection and estimation of the model.
6. Examination of computer output.
7. If necessary, modification of the model based on interpretation of computer output.
8. Provisional acceptance of the model.
 185

6.5 Structural Equation Model on Dimensions of Customer satisfaction

6.5.1 The structural equation model contains the following variables

I. Observed endogenous variables

q 13_ total Vehicle performance and perceived value
q 12 _ total after sales service Dependent variables
q 15_ total loyalty
II. Observed exogenous variables observed variable
q 14_ total Perceived value before purchase does not appear as
q 11_ total Purchase Process dependent variable
anywhere in the model
III. Unobserved exogenous variables unobserved variable
• e1 does not appear as dependent
• e2 variable anywhere in the model
• e3

Variable counts (Group number 1)

8
Number of variables in your model:

5
Number of observed variables:

3
Number of unobserved variables:

5
Number of exogenous variables:

3
Number of endogenous variables:
 186

6.2 SEM Model as Indicated in Figure:

-6.19 -3.58

24.84 17.19
6.93 20.11
Perceived Value e1 e3
e2
before Purchase
1 1 1
.23

After 1.38
Performance and .34
7.08 Sales Loyalty
Perceived value
Service
.42
10.30

Purchase process

Table 6.4 Variables in the Structural Equation Model Analysis

Variables Unstandardized S.E Estimate t value P value

coefficients
After sales ← Perceived **
service_ total value before 9.698 0.001
0.226 0.023 0.333
purchase_
total
After sales ← Purchase **
service_ total Process _ 0.424 0.037 0.403 11.494 0.001
total
Vehicle ← After sales
Performance service_ **
and total 1.383 0.095 0.938 14.613 0.001
Perceived
value_ total
Loyalty_ ← Vehicle **
total performance 5.894 0.001
and 0.342 0.058 0.406
perceived
value_ total
 187

6.5.2. Results and Discussions

The detailed output of SEM is given in Appendix Table 28-49.

From the Table 6.4 it is found that the coefficient of Perceived value before
purchase is 0.226 which represents the partial effect of perceived value before purchase
towards dimensions of customer satisfaction on after sales service holding purchase process,
after sales service and vehicle performance and perceived value as constant. The estimated
positive sign implies that such effect is positive, that after sales would increase by every unit
increase in perceived value before purchase and this coefficient value is significant at 1%
level.

The coefficient of Purchase process is 0.424, which represents the partial effect of
purchase process towards dimensions of customer satisfaction on after sales service holding
perceived value before purchase, after sales service and vehicle performance and perceived
value as constant. The estimated positive sign implies that such effect is positive that after
sales service would increase by every unit increase in purchase process and this coefficient
value is significant at 1% level.

The coefficient of After sales service is 1.383 represents the partial effect of after
sales service towards dimensions of customer satisfaction on vehicle performance and
perceived value holding perceived value before purchase, purchase process and vehicle
performance and perceived value as constant. The estimated positive sign implies that such
effect is positive that vehicle performance and perceived value would increase by every unit
increase after sales service and this coefficient value is significant at 1% level.

The coefficient of Vehicle performance and perceived value is 0.342 represents the
partial effect of vehicle performance and perceived value towards dimensions of customer
satisfaction on loyalty holding perceived value before purchase, purchase process and after
sales service as constant. The estimated positive sign implies that such effect is positive that
loyalty would increase by every unit increase in vehicle performance and perceived value and
this coefficient value is significant at 1% level.
 188

6.5.3 Model Fit

Table 6.5 Model Fit Summary

Variable Value

Chi-Square Value 6.711

P value 0.082

GFI 0.995

AGFI 0.973

CFI 0.994

RMR 0.354

RMSEA 0.050

Discussions:

From the above table 6.5 it is found that the calculated P value is 0.082 which is
greater than 0.05 which indicating perfectly fit. Here GFI (Goodness of fit index) value,
AGFI (Adjusted Goodness of fit index) and CFI (Comparative fit index) value is greater than
0.9, which represents it is a good fit. It is also found that the RMR (Root mean Residual) and
RMSEA (Root mean score error of approximation) value is 0.354 and 0.050 respectively,
which is less than 0.10, which is indicative that it is good fit.
 189

6.6 Overall inference Objective III

With reference to the third objective, i.e. to derive a model for loyalty and dimensions
of customer satisfaction, the following were some of the key inferences:
There is a significant positive association between loyalty and dimensions of
customer satisfaction namely purchase process, after sales service, vehicle performance and
perceived value and perceived value before purchase. This was proved mainly through
Multiple Regression and also Structural equation model.
The most significant model using Multiple Regression is obtained through the
variables in dimensions of customer satisfaction such as vehicle performance and perceived
value before purchase. Hence loyalty depends on the variables such as vehicle performance
and perceived value and perceived value before purchase. The other two variables namely
purchase process and after sales service have comparatively less significant effect on loyalty.
The R2 of multiple regression is 0.078 and R2 of SEM (P Value) is 0.082 and root
mean is 0.050. Hence both the models are equally significant. But SEM has a slightly better
fit as compared to multiple regression.
The SEM Model signifies that loyalty depends on the dimensions such as purchase
process, after sales service, vehicle performance and perceived value and perceived value
before purchase. All the four dimensions have a positive effect on loyalty.
 190

CHAPTER 7

SUMMARY OF FINDINGS, CONCLUSIONS AND SUGGESTIONS AND

SCOPE FOR FURTHER STUDIES

Contents Page No
----------------------------------------------------------------------------------------------
7.1 Relationship between Loyalty and Gender with 171
reference to Brand Maruti.
7.2 Relationship between sub dimensions of Loyalty and 173
Gender with reference to Brand Maruti.
7.3 Relationship between vehicle performance and perceived value 176
and perceived value before purchase for the Brand Maruti.
7.4 Relationship between purchase process and after sales service. 178
with respect to Brand Maruti.
7.5 Model for dimensions of customer satisfaction. 180
7.6 Conclusions 182
7.7 Suggestions 183
-------------------------------------------------------------------------------------------------------------
The summary of findings gives a brief about the key findings involved in the analysis
of data. The first objective namely the relationship between loyalty and gender with respect
to the brand Maruti was highlighted in detail. The further subsection also involves the other
brands such as Hyundai, Chevrolet and Tata Nano. The findings involving the relationship
among the various dimensions of customer satisfaction such as vehicle performance and
perceived value before purchase, purchase process and after sales service is projected in
detail. Further, the findings related to the two models namely regression model and structural
equation model are provided. Finally the chapter ends with the conclusions and suggestions,
the subsections focus on the scope for further studies.
 191

CHAPTER 7

SUMMARY OF FINDINGS, CONCLUSIONS, SUGGESTIONS AND SCOPE FOR

FURTHER STUDIES

7.1 Relationship between Loyalty and Gender with Reference to Brand Maruti

The independent sample t-Test was applied to customers data obtained for the various
brands of cars such as Maruti, Hyundai, Chevrolet and Tata Nano. It is indicative that there is
a positive relationship between loyalty and genders i.e. (Male, Female) customers with
reference to the Brand Maruti. It was observed that loyalty is significant at 95 percent
confidence level (P value of 0.069). The hypothesis H1(a) is supported for the above
demographic variable namely gender and the independent variable loyalty the results of
which is indicated in Table (4.22)
It is also further indicative through the comparisons of Mean value of male and
female customers (33.97) and (35.52) that female customers depict greater loyalty as
compared to male customers with respect to Brand Maruti.
It is found that the brand Maruti has created greater impact on the minds of the
customers because of its existence in the Indian market for over 3 decades. The models such
as Alto, Wagon R, Swift, Zen Estillo and Ritz have greater demand amongst the customers.

7.1.1 Relationship between Loyalty and Gender with Reference to Brand Hyundai

It is indicative that there is no significant positive relationship between loyalty and

genders i.e. (Male, Female) customers with reference to the Brand Hyundai. It was observed
that loyalty is not significant at 95 percent confidence level (P value of 0.315). The
hypothesis H1(a) is not supported for the above demographic variable namely Gender and the
independent variable loyalty the results of which is indicated in Table (4.23).
It is also further indicative through the comparisons of mean value of male and female
customers (32.06) and (31.57) that male customers depict marginally greater loyalty as
compared to female customers with respect to the brand Hyundai.
 192

In case of the brand Hyundai it is found that loyalty is comparatively less as compared
to brand Maruti. But it is also found to be one of the leading brands of car in passenger car
market segment.
7.1.2 Relationship between Loyalty and Gender with Reference to Brand Chevrolet

It is indicative that there is no significant positive relationship between loyalty and

genders i.e. (Male, Female) customers with reference to the brand Chevrolet. It was observed
that loyalty is not significant at 95 percent confidence level (P value of 0.292). The
hypothesis H1 (a) is not supported for the above demographic variable namely gender and the
independent variable loyalty the results of which is indicated in Table (4.24).
It is also further indicative through the comparisons of mean value of male and female
customers (33.08) and (34.44) that male customers depict significantly less loyalty as
compared to female customers with respect to the Chevrolet. Hence it is indicative there is
comparatively greater difference in the Mean values. Hence the loyalty and gender do not
have significant relationship with respect to the above brand.
In the case of Brand Chevrolet, it is found that loyalty is comparatively less as
compared to brand Maruti and Hyundai, which were the leading Brands. But it is also found
to be one of the leading brands of car, which is gaining a lot of acceptance in the passenger
car market.
7.1.3 Relationship between Loyalty and Gender with Reference to Brand Tata Nano

It is indicative that there is no significant positive relationship between loyalty and

genders i.e. (Male, Female) customers with reference to brand Tata Nano. It was observed
that loyalty is not significant at 95 percent confidence level (P value of 0.438). The
hypothesis H1 (a) is not supported for the above demographic variable namely gender and the
independent variable loyalty the results of which is indicated in Table (4.25).
It is also further indicative through the comparisons of mean value of male and female
customers (31.93) and (30.83) that male customers depict significantly greater loyalty as
compared to female customers with respect to the brand Tata Nano.
In case of Tata Nano it is found that loyalty is comparatively less as compared to
other three brands such as Maruti, Hyundai and Chevrolet, since it is in the growth phase
after its launch in the year 2009. But it is also found to be one of the leading brands of car in
passenger car market segment and is also found to be gaining acceptance in the market.
 193

7.2 Relationship between sub dimensions of Loyalty and Gender with Reference
Brand Maruti

The independent sample t-Test was used with respect to Hypothesis H1 (b) with the
customers data obtained for the various brands of car such as Maruti, Hyundai, Chevrolet and
Tata Nano. It is indicative that there is marginal positive relationship between loyalty sub
dimensions such as, I prefer to upgrade from a small car to medium sized luxury car of
different manufacturer and genders with reference to the Brand Maruti. Further the Mean
value of male customer (4.32) is significantly greater than mean value of female customers
(4.65). Hence it is inferred that female customers give comparatively greater preference to
change their present car to car of different manufacturer.
It is further indicative that there is a marginal positive relationship between loyalty
sub dimension namely performance and perceived value of my present car is a
significant factor in deciding the next car purchase, and genders. It is further indicative
that mean values are (4.32) and (4.65) as in the previous dimensions. Hence it is inferred that
female customers give greater preference as compared to male customers with respect to the
brand Maruti.
There is greater significant positive relationship between the sub dimensions of
loyalty namely; my purchase decision for the next car depends on factors other than
mentioned here, and genders. Further the Mean values (4.31) and (4.70) respectively for
male and female customers were indicative that female customers who currently own Maruti
car will give greater preference to other factors when they consider buying their next car.
Further it is indicative that there is no significant positive relationship between
genders (male, female) and sub dimensions of loyalty namely, I prefer to buy a small car of
the same manufacturer again, I prefer to upgrade from a small to medium sized luxury
car of the same manufacturer again, dealer presale service is an important factor for me
in purchasing the next car, dealer after sales service is an important factor for me in
making the purchase decision with respect to the next car, brand value is an important
factor that helps me to decide the next purchase where the difference in mean values were
comparatively less and P values (0.580, 0.378, 0.254, 0.293, 0.689) were not significant at
95% confidence level. The results are indicated in Table 4.26.
 194

7.2.1 Relationship between sub dimensions of Loyalty and Gender with Reference to
Brand Hyundai

The Independent sample t-Test was used with respect to Hypothesis H1 (b) on
customers data obtained for the various brands of car such as Maruti, Hyundai, Chevrolet and
Tata Nano. It is inferred that there is marginal positive relationship between loyalty sub
dimensions such as I prefer to upgrade from a small car to medium sized luxury car of
the different manufacturer, and genders with reference to the brand Hyundai. The mean
value (3.59) was significantly greater than that of female customers (3.24). Hence it signifies
that male customers are more keen on changing from their existing small Hyundai car to
medium sized luxury car of different manufacturer.

It was further seen that there is a significant positive relationship between sub
dimension namely “dealer after sales service is an important factor for me in making the
purchase decision with respect to the next car” and genders with reference to brand
Hyundai. Further it is indicative that Mean value (4.40) was significantly greater than that of
female customers (4.15). Hence it is signified that male customers would give more emphasis
to the after sales service while considering the next car purchase.

Further it is inferred that there is no significant positive relationship between sub

dimensions of loyalty namely, I prefer to buy a small car of the same manufacturer
again, I prefer to upgrade from a small car to a medium sized luxury car of the same
manufacturer, Dealer service during Pre-sale is an important factor for me in
purchasing the next car, the performance and perceived value of my present car is a
significant factor in deciding the next purchase, brand value of the car is an important
factor that helps me to decide the next car purchase, and genders (Male, Female), wherein
the mean value differences were significantly less between male and female customers. It was
also inferred that the P values were significantly greater than 0.05 for these variables.
 195

7.2.2 Relationship between Gender and sub dimensions of Loyalty with Reference
Brand Chevrolet

The Independent sample t-Test was used with respect to Hypothesis H1 (b) on
customers data obtained for the various brands of car such as Maruti, Hyundai, Chevrolet and
Tata Nano. It is inferred that there is no significant positive relationship between the entire
eight sub dimensions of loyalty and genders (male, female), with respect to the brand
Chevrolet. It was also noted that P values (0.960, 0.189. 0.773, 0.813, 0.347, 0.815, 0.378,
0.128) for all the eight sub dimensions were significantly greater than 0.05. Further it was
also seen that the mean value differences for all the sub dimensions were comparatively less.

7.2.3 Relationship between Gender and sub dimensions of Loyalty with Reference
Brand Tata Nano
The Independent sample t-Test was used with respect to Hypothesis H1 (b) on
customers data obtained for the various brands of car such as Maruti, Hyundai, Chevrolet and
Tata Nano. It is inferred that there is a positive relationship between with reference to sub
dimension of loyalty namely; dealer service during pre-sale is an important factor for me
in purchasing the next car and genders (male, female), where in the Mean value of Male
Customers (4.23) was significantly greater than that of Mean value of female customers
(3.50). It is also inferred male customers give more prominence to the Pre-sale factor in case
of Tata Nano. The P value was significantly less than 0.05. It is also further signified that
there is no positive relationship between loyalty sub dimensions namely I prefer to buy a
small car of the same manufacturer, “I prefer to upgrade from a small car to medium
sized luxury car of the same manufacturer”, “I prefer to upgrade from a small to
medium sized luxury car of different manufacturer”, “dealer after sales service is an
important factor for me in making the purchase decision with respect to next car”, “the
performance and perceived value of my present car is a significant factor in deciding
the next car purchase”, “brand value of the car is an important factor that helps me to
decide the next purchase”, “my purchase decision for the next car depends on factors
other than mentioned here”, and genders (male, female). where in the P value was
significantly greater than 0.05, and also the differences in Mean values between Male and
Female customers was comparatively lesser.
 196

7.2.4 Relationship between Dimensions of Customer Satisfaction

7.3 Relationship between Vehicle Performance and Perceived value and

Perceived value before purchase for the Brand Maruti

The paired sample t-Test was done on customers data obtained for the various brands
of cars such as Maruti, Hyundai, Chevrolet and Tata Nano. It is indicative that there is no
significant positive relationship between vehicle performance and perceived value and
perceived value before purchase. It was observed that vehicle performance and perceived
value and perceived value before purchase is not significant at 95 percent confidence level (P
value of 0348). The hypothesis H2 (a) is not supported for the above two dimensions of
Customer satisfaction with respect to brand Maruti. The results are indicated in table 5.6.
It is further observed that the mean value (41.89) of perceived value before purchase
is greater than that of vehicle performance and perceived value (41.51) with reference to
brand Maruti. Hence the customers give more priority to perceived value as compared to
vehicle performance and perceived value.

7.3.1 Relationship between Vehicle Performance and Perceived value and Perceived
value before purchase for the Brand Hyundai

It is indicative that there is significant positive relationship between vehicle

performance and perceived value and perceived value before purchase. It was observed that
vehicle performance and perceived value and perceived value before purchase is significant
at 99 percent confidence level (P value of 0.007). The hypothesis H2 (a) is supported for the
above two dimensions of customer satisfaction with respect to the brand Hyundai. The results
are indicated in table 5.7
It is further observed that the Mean Value (41.89) of perceived value before purchase
is greater than that of vehicle performance and perceived value (41.51) with reference to
Brand Maruti. Hence the customers give more priority to perceived value as compared to
vehicle performance and perceived value.
 197

7.3.2 Relationship between Vehicle Performance and Perceived value and Perceived
value before purchase for the Brand Chevrolet

It is inferred that there is no significant positive relationship between vehicle

performance and perceived value and perceived value before purchase. It was observed that
vehicle performance and perceived value and perceived value before purchase is not
significant at 95 percent confidence level (P value of 0.169). The hypothesis H2 (a) is not
supported for the above two dimensions of Customer satisfaction with respect to Brand
Chevrolet. The results are indicated in Table 5.8.
It is further observed that the Mean Value (42.87) of perceived value before purchase
is lesser than that of vehicle performance and perceived value (43.46) with reference to Brand
Chevrolet. Hence the customers give more priority to vehicle performance and perceived
value as compared to perceived value before purchase.

7.3.3 Relationship between Vehicle Performance and Perceived value and Perceived
value before purchase for the Brand Tata Nano.

It is indicative that there is significant positive relationship between vehicle

performance and perceived value and perceived value before purchase. It was observed that
vehicle performance and perceived value and perceived value before purchase is significant
at 95 percent confidence level (P value of 0.041). The hypothesis H2 (a) is supported for the
above two dimensions of customer satisfaction with respect to the brand Tata Nano. The
results are indicated in table 5.9.
It is further observed that the mean value (43.38) of perceived value before purchase
is lesser than that of vehicle performance and perceived value (44.22) with reference to brand
Tata Nano. Hence the customers give more priority to vehicle performance and perceived
value as compared to perceived value before purchase.
 198

7.4 Relationship between Purchase Process and after sales service with
respect to Brand Maruti

The Paired sample t-Test was used on customers Data obtained for the various brands
of cars such as Maruti, Hyundai, Chevrolet and Tata Nano .It is indicative that there is
significant positive relationship between purchase process and after sales service. It was
observed that purchase process and after sales service is significant at 95 percent confidence
level (P value of 0.011). The hypothesis H2 (b) is supported for the above two dimensions of
customer satisfaction with respect to the brand Maruti. The results are indicated in table 5.10
It is further observed that the mean value (4.3638) of purchase process is greater than
that of after sales service (4.2667) with reference to brand Maruti. Hence the customers give
priority to purchase process as compared to after sales service with respect to Maruti.

7.4.1 Relationship between Purchase Process and after sales service with respect to
Brand Hyundai

It is indicative that there is no significant positive relationship between purchase

process and after sales service. It was observed that purchase process and after sales service is
not significant at 95 percent confidence level (P value of 0.516). The hypothesis H2 (b) is not
supported for the above two dimensions of customer satisfaction with respect to the brand
Hyundai. The results are indicated in table 5.11
It is further observed that the Mean Value (4.3200) of purchase process is greater than
that of after sales service (4.2933) with reference to brand Hyundai. Hence the customers
give priority to purchase process as compared to after sales service with respect to Hyundai
 199

7.4.2 Relationship between Purchase Process and after sales service with respect to
Brand Chevrolet
It is indicative that there is significant positive relationship between purchase process
and after sales service. It was observed that purchase process and after sales service is
significant at 95 percent confidence level (P value of 0.083). The hypothesis H2 (b) is
supported for the above two dimensions of customer satisfaction with respect to the brand
Chevrolet. The results are indicated in table 5.12
It is further observed that the mean value (4.4343) of purchase process is greater than
that of after sales service (4.3656) with reference to Brand Chevrolet. Hence the customers
give priority to purchase process as compared to after sales service with respect to Chevrolet.

7.4.3 Relationship between Purchase Process and after sales service with respect to
Brand Tata Nano
It is indicative that there is no significant positive relationship between purchase
process and after sales service. It was observed that purchase process and after sales service is
not significant at 95 percent confidence level (P value of 0.307). The hypothesis H2 (b) is not
supported for the above two dimensions of customer satisfaction with respect to the brand
Tata Nano. The results are indicated in table 5.13
It is further observed that the Mean Value (4.5257) of purchase process is greater than
that of after sales service (4.4533) with reference to Brand Tata Nano. Hence the customers
give priority to purchase process as compared to after sales service with respect to Tata Nano.

7.4.4 Relationship between Dimensions of Customer satisfaction

The relationship between dimensions of customer satisfaction was tested through

Correlation Analysis. It was indicative that the Correlation coefficient between the
dimensions of customer satisfaction such as purchase process, after sales service, vehicle
performance and perceived value, perceived value before purchase and loyalty had more 50%
positive relationship expect loyalty which had 30% positive relationship with other
dimensions. It was significant at 1% level of significance. The hypothesis H2 (c) is supported
for all the above dimensions of Customer satisfaction with respect to all the brands taken into
consideration. The results are indicated in table 5.14
 200

7.5 Model for Dimensions of Customer Satisfaction

7.5.1 Relationship between Loyalty and other dimensions of customer satisfaction

The Enter method of regression was done on customers data indicates that the
independent variables such as purchase process, after sales service, vehicle performance and
perceived value and perceived value before purchase is dependent on the variable loyalty. It
is observed that the dimension perceived value before purchase is significant at 99%
confidence level (P level of 0.005) and vehicle performance and perceived value is significant
at 95% confidence level (P value of 0.054). The Hypothesis H3 is supported for the above two
variables and not supportive for the other dimensions such as purchase process and after sales
service, where the P value is (0.732, 0.206) respectively. The results are indicated in (table
6.1)
The forward method of regression was applied to customers data indicates that the
independent variables such as, vehicle performance and perceived value and perceived value
before purchase is dependent on the variable loyalty. It is observed that the dimension
perceived value before purchase is significant at 99% confidence level (P level of 0.001) and
vehicle performance and perceived value is significant at 99% confidence level (P value of
0.003). The Hypothesis H3 is supported for the above 2 variables. The results are indicated in
(table 6.3). The Step wise backward method of regression was done on customers data
indicates that the independent variables such as purchase process, after sales service, vehicle
performance and perceived value and perceived value before purchase is dependent on the
variable loyalty. It is observed that the dimension perceived value before purchase is
significant at 99% confidence level (P level of 0.005) and vehicle performance and perceived
value is significant at 95% confidence level (P value of 0.054). The Hypothesis H3 is
supported for the above 2 variables and not supportive for the other Dimensions such as
purchase process and after sales service, where the P value is (0.732, 0.206) respectively. The
results are indicated in (table 6.4). Hence the most supportive model was the forward
method.
 201

7.5.2 Relationship between Loyalty and other dimensions of customer satisfaction

The structural equation modeling was used to develop the model for customer
satisfaction. The independent variables were vehicle performance and perceived value, after
sales service and loyalty is dependent on perceived value before purchase and purchase
process. It is observed that the dimension after sales service and, perceived value before
purchase, after sales service and purchase process, vehicle performance and perceived value
and after sales service, loyalty and vehicle performance and perceived value were significant
at 99% confidence (P value of 0.001) for all the above combinations of variable dimension.
Further it was noted that the model was fit as it had a Chi square value of 6.711, P value of
0.082, Goodness of fit Index of 0.995, Adjusted Goodness of fit Index of 0.973, Comparative
Fit Index of 0.994, RMR and RMSEA (Root Mean Residual) and (Root mean score error
approximation of 0.050. Hence it is Indicative that the model was highly a fit model.

7.5.3 Descriptive statistics on variable loyalty

Descriptive statistics on loyalty Indicate that the sub dimension namely I prefer to buy
a small car of the same manufacturer again had Mean (3.91) followed by I prefer to upgrade
from small to medium sized luxury car of different manufacturer had Mean (3.72). Some of
the sub dimensions also had equal mean ratings. Similarly in the dimensions such as purchase
process and after sales service, some of the sub dimensions had equal mean ratings, which
implies that they are equally preferred or equally rated by customers.
 202

7.6 Conclusions
The results of hypothesis testing, t-Test, Paired Sample t-Test, Correlation,
Regression and Structural Equation Modeling provide insights for an automobile
manufacturer or dealer to effectively formulate his strategies to enhance the customer
satisfaction, thereby focusing on building the long term loyalty towards the brand of
passenger cars, so as to enable them to make repetitive purchase of the same brand. Present
findings might lead to fresh insights and may lead others to provide a more comprehensive
understanding and eventually lead to integrated theory and a comprehensive model
comprising of customer satisfaction in passenger car market, with specific emphasis on
consumers or the ultimate users.
For the sub dimensions I-III and V-VIII, there is no significant positive relationship
gender and loyalty for the brand Tata Nano. Similarly for the sub dimension IV, there is a
significant positive relationship between gender and loyalty with respect to brand Tata Nano.
With reference to the dimensions such perceived value before purchase and vehicle
performance and perceived value, there is no significant positive relationship with reference
to the brands such as Maruti and Chevrolet.
Similarly with reference to the brands such as Hyundai and Tata Nano, there is
marginal and significant positive relationship between these 2 dimensions.
With reference to dimensions such as Purchase process and after sales service, there is
a significant positive relationship with respect to brands like Maruti, and Chevrolet.
Similarly with reference to brands like Hyundai and Tata Nano, there is a significant
positive relationship between purchase process and after sales service.
There is a significant positive relationship between the dimensions of customer
satisfaction such as purchase process, after sales service, vehicle performance and perceived
value and perceived value before purchase and loyalty.
Loyalty is dependent on significant dimensions such as vehicle performance and
perceived value and perceived value before purchase. The other dimension such as purchase
process and after sales service does not have significant relationship with loyalty.
Finally, the model for customer satisfaction is given by dimensions such as purchase process,
after sales service, vehicle performance and perceived value and perceived value before
purchase.
 203

7.7 Suggestions

It is observed that loyalty is the dependent variable, which is critical in the opinion of
the customers with reference to the brands of car surveyed. The customer satisfaction
dimension includes the other variables such as purchase process, after sales service, vehicle
performance and perceived value and perceived value before purchase.
7.7.1 The sub dimension in the purchase process namely the “sales assistance could
answer all my queries” was given comparatively less preference, which indicates that it
could be made more effective with respect to the new brands such as Chevrolet and Tata
Nano.
7.7.2 Financial tie ups with respect to the brand of car is one of the critical factor which has
to be due importance by new manufacturer in order to ensure greater customer satisfaction.
7.7.3 The brands such as Hyundai, Chevrolet and Tata Nano must ensure that they create a
greater loyalty in case of all models car offered towards both male and female equally. But in
case of the leading brand i.e. Maruti they have secured a strong loyalty, due to the number of
years of existence, which they can build on.
7.7.4 The brands such as Chevrolet and Tata Nano must focus on enhancing their perceived
value before purchase of their existing customers and also prospective new customers which
is critical factor in the purchase of the passenger car.
7.7.5 The brands such as Maruti and Hyundai have created enhanced perceived value
before purchase, both for their existing and new customers, but they enhance their vehicle
performance and perceived value, i.e. post sales process more effectively in order to retain
customer loyalty.
7.7.6 The brands such Chevrolet and Tata Nano must focus on enhancing the after sales
service, which will create a greater impact in the minds of the existing customers, as well as
prospective new customers, who will be willing to purchase these brands. These brands have
also focused on making the purchase process highly effective.
7.7.7 The reputed brands such as Maruti and Hyundai must also make their Post sales
service more effective in order to retain the customer satisfaction and secure enhanced loyalty
from new and also existing customers. But with respect to the during sale i.e. Purchase
process, these companies can maintain the existing level of purchase process.
 204

7.7.8 Finally there is positive relationship between the dimensions of customer satisfaction.
Hence these dimensions such as purchase process, after sales service, vehicle performance
and perceived value before purchase should be given greater prominence by the leading
brands such as Maruti, and Hyundai, and also the comparatively less leading brands such as
Chevrolet and Tata Nano, in order to secure enhanced customer loyalty towards their brands
and models.

7.7.9 We propose a schematic diagram (7.1) for implementing customer satisfaction based
on the significant variables observed in the research:

Overall customer
Pre-sale During Purchase Post Purchase
satisfaction

Perceived value Purchase Process After sales service Loyalty

Before purchase Vehicle Performance
And Perceived value

Fig 7.1 Relationship between Customer satisfaction and loyalty

It is seen that in the above diagram has 4 aspects; the first aspect is the Pre-sale
process, which consists of perceived value before purchase, i.e. expectations the customer has
in his mind before purchase of the product/ process. The second aspect focusing on during
Purchase i.e. Purchase process, plays a vital role. The third aspect, mainly the post purchase,
which is also termed as after sales service and the other factor namely vehicle performance
and perceived value, plays a crucial role in ensuring that the customers make repetitive
purchase of the same brand. Finally, all these factors significantly contribute to enhancing
loyalty towards a particular brand.
 205

7.8 Scope for further Studies

This research involved examining a set of limited set of variables such as purchase
process, after sales service, perceived value before purchase and vehicle performance and
perceived value, and loyalty. There may be other dimensions or attributes such as the color of
the vehicle, reason for preference of a particular vehicle, model of a vehicle, which have not
been taken into consideration. There is further scope for examining these dimensions in
detail.

The study has taken into consideration only the customers or the end users who are
involved in the direct usage of the major brands of cars considered for the study. Hence the
study can be further conducted on the dealer to find out whether the customers of various
brand dealers are satisfied and if so to what extent.

Due to the constraints of time and funds the study was conducted only in Bangalore
city. Hence the study can further include at least 3 districts of Karnataka, or comparison
between 2 states. There is vast scope to conduct such a study in other industries such as
manufacturing, service, banking, insurance.
 206

APPENDIXES

APPENDIX-A

Items for Item Analysis

Item correlation
Item
Items with New
No.
variable
1 The dealer gave a good assistance 0.847
during purchase of my car
2 The sales assistance could 0.836
answer to all my queries
3 The financial tie-up for loans were 0.877
available at the dealer's showroom
4 The booking process was very smooth 0.835
5 The booking process was quick and 0.824
efficient
6 The delivery of car took place 0.860
as per the commitment given to me
7 The overall service I received during 0.828
the purchase of car was satisfactory
8 The dealer gives me a reminder 0.820
when service is due
9 The servicing of car is done well 0.777
10 The particular problem that I highlight 0.785
is rectified during the service
11 The service charges are reasonable 0.771
12 The service center offers valuable 0.776
suggestions for the smooth maintenance
of my car
13 I am satisfied with the overall after 0.765
sales service rendered by the center
 207

Item Items Item

No correlation
with New
variable
14 The car offers the same mileage as 0.862
indicated during purchase
15 The car is user friendly and I am 0.844
satisfied with its performance
16 The car is comfortable to drive 0.853
17 The interiors are designed well to offer 0.538
maximum space
18 The height of the car is comfortable and 0.578
there is enough leg space
19 The doors of the car are aligned well 0.598
for comfortable entry and exit
20 The lumbar space is spacious to 0.851
accommodate moderate luggage
21 The style and exteriors of the car 0.564
are designed with aesthetics
22 I have overall satisfaction on the 0.508
performance of the car
23 The purchase of this car is good value for 0.516
money
24 I prefer to buy a small car as it meets 0.498
my requirements
25 I prefer to upgrade from a small car to a 0.478
medium sized/luxury car
26 When I plan my next car I will only consider 0.775
models/brands from the same manufacturer
 208

Item Items Item

No correlation
with New
variable
27 I will consider all the brands in the 0.495
segment of my choice to choose a car
28 Service and assistance while purchasing a new car 0.486
is an important factor that helps me to decide the
next purchase
29 Integrity during after sales service is an important 0.488
factor that helps me to decide the next purchase
30 The performance of the car is an important 0.477
factor that helps me to decide the next purchase
31 Brand value of the car is an important 0.692
factor that helps me to decide the next purchase
32 My purchase decision for the next car 0.741
depends on factors other than mentioned here
33 Buy-back schemes for a new car or higher version 0.720
is an important decision making factor for the next
purchase
34 Services at the booking stage can be improved a 0.885
lot.
35 I have very high expectations from the car I am 0.887
going to purchase.
36 I feel the car I am going to purchase is going to 0.530
give me full value for money.
37 The service I got from the dealer was far below my 0.548
expectation
38 Expected benefits from my car are more than my 0.556
experiential benefits after using it.
39 My perceived value before purchase was created 0.892
through word of mouth from peers.
40 My expectation on the vehicle was created from 0.891
advertisements and media.
41 Company's reputation and brand name were the 0.597
main aspects which created high expectations on
the car's performance.

Note: Refer to Chapter 3, Research Design Sec 3.

(Questionnaire Development), Point 4 (Item Analysis) for the Procedure used)
The items which are indicated in bold values are retained in the final questionnaire.
__________________________
 209

APPENDIX B

PASW/SPSS OUTPUT OF PRIMARY TABLES

Independent Sample T Test Outputs for Hypothesis I

Table-AB-1 Independent Sample T Test for Loyalty and Gender of Brand Maruti for
Testing Hypothesis I

Independent Samples Test

Levene's Test
for Equality t-test for Equality of Means
of Variances
Dimensions of 95%
CS Std.
Confidence
Sig. Mean Error
F Sig. t df Interval of the
(2-tailed) Difference Differ
Difference
ence
Lower Upper
Equal 3.160 0.078 -1.830 148 0.069 -1.553 0.849 -3.230 0.124
variances
Loyalty assumed
Equal -2.354 40.826 0.023 -1.553 0.660 -2.886 -0.220
variances
not
assumed
 210

Table AB-2 Independent Sample T Test for Loyalty and Gender of Brand Hyundai for
Testing Hypothesis I

Levene's Test
for Equality
of Variances t-test for Equality of Means
Dimensions of CS 95% Confidence
Interval of the
Sig.(2- Mean Std. Error Difference
F Sig. t df tailed) Difference Difference Lower Upper
Loyalty Equal 0.416 0.520 1.008 148 0.315 0.694 0.689 -0.667 2.055
variances
assumed
Equal 1.026 89.868 0.308 0.694 0.677 -0.650 2.039
variances
not
assumed

Table AB-3 Independent T Test for Loyalty and Gender of Brand Chevrolet for Testing
Hypothesis I

Independent Samples Test

Levene's
Test for
Equality of
Dimensions of Variances t-test for Equality of Means
CS Std. 95% Confidence
Error Interval of the
Sig. (2- Mean Differ Difference
F Sig. t df tailed) Difference ence Lower Upper
Loyalty Equal 0.337 0.562 -1.057 148 0.292 -1.355 1.282 -3.889 1.178
variances
assumed
Equal -1.194 20.213 0.246 -1.355 1.135 -3.721 1.011
variances
not
assumed
 211

Table AB-4 Independent T Test for Loyalty and Gender of Brand Tata Nano for
Testing Hypothesis I

Independent Samples Test

Levene's
Test for
Equality of
Variances t-test for Equality of Means
Dimensions of CS
Std. 95% Confidence
Error Interval of the
Sig. (2- Mean Differe Difference
F Sig. t df tailed) Difference nce Lower Upper
Loyalty Equal 3.614 0.063 0.782 48 0.438 1.098 1.404 -1.725 3.922
variances
assumed
Equal 0.552 5.556 0.603 1.098 1.991 -3.870 6.067
variances
not
assumed
 212

Table AB-5 Independent Sample T Test for Sub Dimensions of Loyalty and Gender
Brand Maruti

Levene's
Test for
Equality of
Variances t-test for Equality of Means
95%
Confidence
Mean Std. Error Interval of the
Sig. Differ- Differ- Difference
F Sig. t df 2-tailed) ence ence Lower Upper
I prefer to buy a Equal variances .857 .356 .554 148 .580 .111 .200 -.284 .505
small car of the same assumed
manufacturer again Equal variances .521 29.050 .607 .111 .212 -.324 .545
not assumed
I prefer to upgrade Equal variances .160 .690 -.884 148 .378 -.205 .232 -.663 .253
from a small car to a assumed
medium sized luxury Equal variances -.843 29.384 .406 -.205 .243 -.702 .292
car of the same not assumed
manufacturer
I prefer to upgrade Equal variances 3.224 .075 -1.874 148 .063 -.329 .176 -.677 .018
from a small car to a assumed
medium sized Equal variances -2.366 39.696 .023 -.329 .139 -.611 -.048
luxury car of the not assumed
different
manufacturer.
Dealer service during Equal variances .052 .819 -1.146 148 .254 -.199 .173 -.541 .144
Pre-sale is an assumed
important factor for Equal variances -1.285 34.105 .207 -.199 .155 -.513 .115
me in purchasing the not assumed
next car.
Dealer after sales Equal variances 1.754 .187 -1.056 148 .293 -.156 .148 -.448 .136
service is an assumed
important factor for Equal variances -1.172 33.708 .249 -.156 .133 -.427 .115
me in making the not assumed
purchase decision
with respect to next
car.
The performance and Equal variances 3.224 .075 -1.874 148 .063 -.329 .176 -.677 .018
perceived value of my assumed
present car is a Equal variances -2.366 39.696 .023 -.329 .139 -.611 -.048
significant factor in not assumed
deciding the next car
purchase.
Brand value of the Equal variances 1.082 .300 -.400 148 .689 -.065 .162 -.384 .255
car is an important assumed
factor that helps me Equal variances -.465 35.525 .645 -.065 .139 -.347 .218
to decide the next not assumed
purchase.
My purchase decision Equal variances 3.634 .059 -2.371 148 .019 -.381 .161 -.698 -.063
for the next car assumed
depends on factors
other than mentioned
here.
 213

Table AB-6 Indicating Independent Sample T Test for Sub Dimensions of Loyalty and
Gender Brand Hyundai

Independent Samples Test

Levene's Test
for Equality
of Variances t-test for Equality of Means
95%
Std. Confidence
Mean Error Interval of the
Sig. Differ- Differ- Difference
F Sig. t df (2-tailed) ence ence Lower Upper
I prefer to buy a small car Equal variances .010 .919 .886 148 .377 .160 .180 -.197 .516
of the same manufacturer assumed
again Equal variances .924 95.613 .358 .160 .173 -.183 .503
not assumed
I prefer to upgrade from Equal variances 2.578 .111 -.407 148 .685 -.077 .189 -.451 .297
a small car to a medium assumed
sized luxury car of the Equal variances -.430 98.999 .668 -.077 .179 -.432 .278
same manufacturer not assumed
I prefer to upgrade from Equal variances .421 .518 1.681 148 .095 .347 .207 -.061 .756
a small car to a medium assumed
sized luxury car of the Equal variances 1.629 80.295 .107 .347 .213 -.077 .772
different manufacturer. not assumed
Dealer service during Equal variances 1.395 .240 .544 148 .587 .064 .118 -.168 .296
Pre-sale is an important assumed
factor for me in Equal variances .565 94.491 .573 .064 .113 -.161 .289
purchasing the next car. not assumed
Dealer after sales service Equal variances 3.514 .063 2.214 148 .028 .252 .114 .027 .476
is an important factor for assumed
me in making the Equal variances 2.169 82.239 .033 .252 .116 .021 .482
purchase decision with not assumed
respect to next car.
The performance and Equal variances 2.187 .141 -.210 148 .834 -.028 .132 -.288 .232
perceived value of my assumed
present car is a significant Equal variances -.233 112.069 .816 -.028 .118 -.262 .207
factor in deciding the next not assumed
car purchase.
Brand value of the car is Equal variances .911 .341 .030 148 .976 .004 .125 -.243 .251
an important factor that assumed
helps me to decide the Equal variances .032 100.028 .975 .004 .118 -.230 .237
next purchase. not assumed
My purchase decision for Equal variances 2.187 .141 -.210 148 .834 -.028 .132 -.288 .232
the next car depends on assumed
factors other than Equal variances -.233 112.069 .816 -.028 .118 -.262 .207
mentioned here. not assumed
 214

Table AB-7 Independent Sample T Test for Sub Dimensions of Loyalty and Gender
Brand Chevrolet

Independent Samples Test

Levene's
Test for
Equality of
Variances t-test for Equality of Means
95%
Std. Confidence
Mean Error Interval of the
Sig. Differ- Differ- Difference
F Sig. t df (2-tailed) ence ence Lower Upper
I prefer to buy a small car Equal variances 3.000 .085 .050 148 .960 .016 .319 -.615 .647
of the same manufacturer assumed
again Equal variances .040 17.189 .968 .016 .392 -.810 .842
not assumed
I prefer to upgrade from Equal variances 7.013 .009 -1.319 148 .189 -.398 .302 -.995 .198
a small car to a medium assumed
sized luxury car of the Equal variances -1.827 24.254 .080 -.398 .218 -.848 .052
same manufacturer not assumed
I prefer to upgrade from Equal variances .854 .357 -.289 148 .773 -.074 .255 -.578 .431
a small car to a medium assumed
sized luxury car of the Equal variances -.238 17.263 .815 -.074 .310 -.726 .579
different manufacturer. not assumed
Dealer service during Equal variances .643 .424 -.237 148 .813 -.056 .236 -.523 .411
Pre-sale is an important assumed
factor for me in Equal variances -.298 21.974 .769 -.056 .188 -.446 .334
purchasing the next car. not assumed
Dealer after sales service Equal variances .240 .625 -.944 148 .347 -.229 .242 -.707 .250
is an important factor for assumed
me in making the Equal variances -1.045 19.946 .308 -.229 .219 -.685 .228
purchase decision with not assumed
respect to next car.
The performance and Equal variances 1.056 .306 -.235 148 .815 -.059 .251 -.554 .436
perceived value of my assumed
present car is a significant Equal variances -.190 17.163 .851 -.059 .309 -.711 .593
factor in deciding the next not assumed
car purchase.
Brand value of the car is Equal variances 2.255 .135 -.883 148 .378 -.197 .223 -.637 .243
an important factor that assumed
helps me to decide the Equal variances -1.325 26.803 .196 -.197 .149 -.502 .108
next purchase. not assumed
My purchase decision for Equal variances 3.811 .053 -1.540 148 .126 -.359 .233 -.820 .102
the next car depends on assumed
factors other than Equal variances -2.503 30.322 .018 -.359 .143 -.652 -.066
mentioned here. not assumed
 215

Table AB-8 Independent Sample T Test for Sub Dimensions of Loyalty and Gender
Brand Tata Nano for Hypothesis I

Independent Samples Test

Levene's
Test for
Equality of
Variances t-test for Equality of Means
95%
Std. Confidence
Sig. Mean Error Interval of the
(2- Differ- Differ- Difference
F Sig. t df tailed) ence ence Lower Upper
I prefer to buy a small car Equal variances .199 .657 1.153 48 .255 .455 .394 -.338 1.247
of the same manufacturer assumed
again Equal variances 1.013 6.019 .350 .455 .449 -.642 1.551
not assumed
I prefer to upgrade from Equal variances .307 .582 1.035 48 .306 .402 .388 -.378 1.181
a small car to a medium assumed
sized luxury car of the Equal variances .909 6.016 .398 .402 .442 -.679 1.482
same manufacturer not assumed
I prefer to upgrade from Equal variances .208 .651 -.439 48 .663 -.197 .449 -1.099 .705
a small car to a medium assumed
sized luxury car of the Equal variances -.457 6.612 .662 -.197 .431 -1.228 .834
different manufacturer. not assumed
Dealer service during Equal variances 6.633 .013 2.219 48 .031 .727 .328 .068 1.386
Pre-sale is an important assumed
factor for me in Equal variances 1.425 5.425 .209 .727 .510 -.554 2.009
purchasing the next car. not assumed
Dealer after sales service Equal variances 6.336 .015 .728 48 .470 .265 .364 -.467 .998
is an important factor for assumed
me in making the Equal variances .478 5.454 .651 .265 .555 -1.125 1.656
purchase decision with not assumed
respect to next car.
The performance and Equal variances 2.211 .144 1.537 48 .131 .364 .237 -.112 .839
perceived value of my assumed
present car is a significant Equal variances 1.345 6.006 .227 .364 .270 -.298 1.025
factor in deciding the next not assumed
car purchase.
Brand value of the car is Equal variances 1.923 .172 -1.076 48 .287 -.447 .416 -1.282 .389
an important factor that assumed
helps me to decide the Equal variances -1.728 10.994 .112 -.447 .259 -1.016 .122
next purchase. not assumed
My purchase decision for Equal variances 8.825 .005 -.751 48 .456 -.470 .625 -1.726 .787
the next car depends on assumed
factors other than Equal variances -1.232 11.446 .243 -.470 .381 -1.305 .365
mentioned here. not assumed
 216

Table AB-9 Paired Sample T Test between Perceived value before purchase and
Vehicle performance and perceived value for the brand Maruti for Testing Hypothesis
II

Paired Samples Test

Paired Differences
95% Confidence
Dimensions of CS Std. Interval of the
Std. Error Difference Sig. (2-
Mean Deviation Mean Lower Upper t df tailed)
Pair 1 Perceived 0.380 4.945 0.404 -.418 1.178 0.941 149 0.348
value before
purchase tot –
Vehicle
performance
and perceived
value _tot
 217

Table AB-10 Paired Sample T Test between Perceived value before purchase and
Vehicle performance and perceived value for the brand Hyundai for Testing Hypothesis
II

Paired Samples Test

Paired Differences
95% Confidence
Std. Interval of the
Std. Error Difference Sig. (2-
Mean Deviation Mean Lower Upper t df tailed)
Pair 1 Perceived 1.153 5.190 0.424 0.316 1.991 2.722 149 0.007
Value
before
Purchase -
Vehicle
performan
ce and
perceived
value
 218

Table AB-11 Paired Sample T Test between Perceived value before purchase and
Vehicle performance and perceived value for the brand Chevrolet for Testing
Hypothesis II

Paired Samples Test

Paired Differences
95% Confidence
Dimensions of CS Std. Interval of the
Std. Error Difference t Sig. (2-
Mean Deviation Mean Lower Upper df tailed)
Pair 1 Perceived Value -0.593 5.260 0.429 -1.442 0.255 -1.382 149 0.169
before Purchase
- Vehicle
performance and
perceived value
 219

Table AB-12 Paired Sample T Test between Perceived value before purchase and
Vehicle performance and perceived value for the brand Tata Nano for Testing
Hypothesis II

Paired Samples Test

Paired Differences
95% Confidence
Dimensions of CS
Std. Interval of the Sig.
Std. Error Difference
Mean Deviation Mean Lower Upper t df (2-tailed)
Pair 1 Perceived -0.840 2.824 0.399 -1.643 -0.037 -2.103 49 0.041
Value before
Purchase -
Vehicle
performance
and
perceived
value

Table AB-13 Indicating Paired Sample T Test between Purchase Process and
After sales service for the brand Maruti for Testing Hypothesis II

Paired Differences
95%
Std. Confidence Sig. (2-
Std. Error Interval of the t df tailed)
Mean Deviation Mean Difference
Lower Upper
Pair Purchase
1 process -
After 0.0971 0.46373 0.03786 0.0223 0.1720 2.566 149 0.011
sales
service
 220

Table AB-14 Paired Sample T Test between Purchase Process and

After sales service for the brand Hyundai for Testing Hypothesis II

Paired Differences
95%
Dimensions of Std. Confidence Sig. (2-
Customer Std. Error Interval of the t df tailed)
Satisfaction Mean Deviation Mean Difference
Lower Upper
Pair 1 Purchase
process -
0.0267 0.50178 0.04097 -0.0543 0.1076 0.651 149 0.516
After sales
service

Table AB-15 Paired Sample T Test between Purchase Process and

After sales service for the brand Chevrolet for Testing Hypothesis II

Paired Differences
Std. 95% Confidence Sig. (2-
Std. Error Interval of the t df tailed)
Mean Deviation Mean Difference
Lower Upper
Pair 1 Purchase
process -
0.0687 0.48250 0.03940 -0.0091 0.1466 1.745 149 0.083
After sales
service
 221

Table AB-16 Paired Sample T Test between Purchase Process and

After sales service for the brand Tata Nano for Testing Hypothesis II

Paired Differences
95%
Confidence
Std. Sig. (2-
Interval of the
Std. Error t df tailed)
Difference
Mean Deviation Mean
Lower Upper
Pair 1 Purchase
process -
0.0724 0.49611 0.07016 -0.0686 0.2134 1.032 49 0.307
After sales
service

Table AB-17 Correlation Analysis Outputs (significance, N value)

For Hypothesis II (Customers/passenger car user data) (Objective 2)

Vehicle
After performance Perceived
Purchase sales and perceived Value before
Dimensions of C.S process service value Purchase Loyalty
Purchase process Pearson Correlation 1 0.569(**) 0.498(**) 0.443(**) 0.181(**)
Sig. (2-tailed) . 0.000 0.000 0.000 0.000
After sales Pearson Correlation
0.569(**) 1 0.572(**) 0.489(**) 0.220(**)
service
Sig. (2-tailed) 0.000 . 0.000 0.000 0.000
Vehicle Pearson Correlation
performance and .498(**) .572(**) 1 .498(**) .235(**)
perceived value
Sig. (2-tailed) 0.000 0.000 . 0.000 0.000
Perceived Value Pearson Correlation
0.443(**) 0.489(**) 0.498(**) 1 .248(**)
before Purchase
Sig. (2-tailed) 0.000 0.000 0.000 . 0.000
Loyalty Pearson Correlation 0.181(**) 0.220(**) 0.235(**) 0.248(**) 1
Sig. (2-tailed) 0.000 0.000 0.000 0.000 .
N 500 500 500 500 500
 222

Table Multiple Regression Analysis Outputs for Hypothesis III

(Customers/passenger car user data) (Objective 3)

Table AB-18 Regression-Variables

Forward Regression Method

Mode Variables Variables

l Entered Removed Method
1 Forward
Perceived (Criterion:
Value Probability
.
before -of-F-to-
Purchase enter <=
.050)
2 Forward
Vehicle
(Criterion:
performan
Probability
ce and .
-of-F-to-
perceived
enter <=
value
.050)
a Dependent Variable: Loyalty

Table AB-19 Model Summary for forward Multiple Regression

Std. Error
R of the
Model R Square Adjusted R Square Estimate
1 0.248(a) 0.061 0.059 4.077
2 0.279(b) 0.078 0.074 4.046

a Predictors: (Constant), Perceived Value before Purchase

b Predictors: (Constant), Perceived Value before Purchase,
Vehicle performance and perceived value
 223

Table AB-20 ANOVA for forward Multiple Regression for Hypothesis-III

Sum of Mean
Model Squares df Square F Sig.
1 Regression 540.619 1 540.619 32.519 0.000
Residual 8279.093 498 16.625
Total 8819.712 499
2 Regression 685.766 2 342.883 20.951 0.000
Residual 8133.946 497 16.366
Total 8819.712 499

a Predictors: (Constant), Perceived Value before Purchase

b Predictors: (Constant), Perceived Value before Purchase, Vehicle performance and perceived value
c Dependent Variable: Loyalty

Table AB-21 Coefficients of Variables for forward Multiple Regression for Hypothesis-
III

Unstandardized Standardized
Model Coefficients Coefficients t Sig.
Std.
B Error Beta
1 (Constant) 24.113 1.573 15.326 0.000
Perceived
Value before 0.209 0.037 0.248 5.703 0.000
Purchase
2 (Constant) 21.462 1.797 11.943 0.000
Perceived
Value before 0.147 0.042 0.174 3.500 0.001
Purchase
Vehicle
performance
0.125 0.042 0.148 2.978 0.003
and perceived
value
a Dependent Variable: Loyalty
 224

Table AB-22 Excluded Variables for forward Multiple Regression for Hypothesis-III

Partial Collinearity
Model Beta In t Sig. Correlation Statistics
Tolerance
1 Purchase process 0.089(a) 1.837 0.067 0.082 0.804
After sales
0.130(a) 2.622 0.009 0.117 0.761
service
Vehicle
performance and 0.148(a) 2.978 0.003 0.132 0.752
perceived value
2 Purchase process 0.043(b) 0.841 0.401 0.038 0.702
After sales
0.081(b) 1.483 0.139 0.066 0.617
service
a Predictors in the Model: (Constant), Perceived Value before Purchase
b Predictors in the Model: (Constant), Perceived Value before Purchase, Vehicle performance and perceived
value c Dependent Variable: Loyalty
 225

Table Multiple Regression Analysis Outputs for Hypothesis III

(Customers/passenger car user data) (Objective 3)

TableAB-23 Regression-Variables
Backward Regression Method (b)
Variables Variables
Model Entered Removed Method
1 Perceived
Value
before
Purchase,
Purchase
process,
Vehicle . Enter
performanc
e and
perceived
value, After
sales
service(a)
2
Backward
(criterion:
Purchase Probability
.
process of F-to-
remove >=
.100).
3
Backward
(criterion:
After sales Probability
.
service of F-to-
remove >=
.100).
a All requested variables entered.
b Dependent Variable: Loyalty

Table AB-24 Model Summary for Backward Multiple Regression

Adjusted Std. Error of
Model R R Square R Square the Estimate
1 0.286(a) 0.082 0.075 4.044
2 0.286(b) 0.082 0.076 4.041
3 0.279(c) 0.078 0.074 4.046

a Predictors: (Constant), Perceived Value before Purchase, Purchase process,

Vehicle performance and perceived value, after sales service
b Predictors: (Constant), Perceived Value before Purchase, Vehicle performance
 226

and perceived value, after sales service

c Predictors: (Constant), Perceived Value before Purchase, Vehicle performance
and perceived value

Table AB-25 ANOVA for Backward Multiple Regression for Hypothesis-III

Sum of Mean
Model Squares df Square F Sig.
1 Regression 723.616 4 180.904 11.061 0.000(a)
Residual 8096.096 495 16.356
Total 8819.712 499
2 Regression 721.694 3 240.565 14.734 0.000(b)
Residual 8098.018 496 16.327
Total 8819.712 499
3 Regression 685.766 2 342.883 20.951 0.000(c)
Residual 8133.946 497 16.366
Total 8819.712 499

a) Predictors: (Constant), Perceived Value before Purchase, Purchase process,

Vehicle performance and perceived value, after sales service
b) Predictors: (Constant), Perceived Value before Purchase, Vehicle performance and
perceived value, after sales service
c) Predictors: (Constant), Perceived Value before Purchase, Vehicle performance and
perceived value
d) Dependent Variable: Loyalty
 227

Table AB-26 Coefficients of Variables for Backward Multiple Regression for Hypothesis-1II

Unstandardized Standardized
Coefficients Coefficients

Model B Std. Error Beta t Sig.

1 (Constant) 20.622 2.014 10.241 .000
Purchase
0.025 0.072 0.019 0.343 0.732
process
After sales
0.092 0.073 0.074 1.267 0.206
service
Vehicle
performance
0.092 0.047 0.109 1.930 0.054
and perceived
value
Perceived
Value before 0.125 0.044 0.149 2.831 0.005
Purchase
2 (Constant) 20.907 1.833 11.403 0.000
After sales
0.101 0.068 0.081 1.483 0.139
service
Vehicle
performance
0.095 0.046 0.112 2.042 0.042
and perceived
value
Perceived
Value before 0.128 0.044 0.152 2.930 0.004
Purchase
3 (Constant)
21.462 1.797 11.943 0.000

Vehicle
performance
0.125 0.042 0.148 2.978 0.003
and perceived
value
Perceived
Value before 0.147 0.042 0.174 3.500 0.001
Purchase

a Dependent Variable: Loyalty

 228

Table AB-27 Excluded Variables for Backward Multiple Regression for Hypothesis-III

Partial Collinearity
Model Beta In t Sig. Correlation Statistics
Tolerance
2 Purchase
0.019(a) 0.343 0.732 0.015 0.615
process
3 Purchase
0.043(b) 0.841 0.401 0.038 0.702
process
After sales
0.081(b) 1.483 0.139 0.066 0.617
service
 229

Structural equation Model-Outputs – Table 28-49

Estimates (Group number 1 - Default model)

Scalar Estimates (Group number 1 - Default model)

Maximum Likelihood Estimates

Table AB-28 Regression Weights: (Group number 1 - Default model)

Estimate S.E. C.R. P Label

q12_tot <--- q14_tot 0.226 0.023 9.698 ***
q12_tot <--- q11_tot 0.424 0.037 11.494 ***
q13_tot <--- q12_tot 1.383 0.095 14.613 ***
q15_tot <--- q13_tot 0.342 0.058 5.894 ***

Table AB-29 Standardized Regression Weights: (Group number 1 - Default model)

Estimate
q12_tot <--- q14_tot 0.333
q12_tot <--- q11_tot 0.403
q13_tot <--- q12_tot 0.938
q15_tot <--- q13_tot 0.406

Table AB-30 Covariances: (Group number 1 - Default model)

Estimate S.E. C.R. P Label

q14_tot <--> q11_tot 7.081 0.783 9.044 ***
e2 <--> e1 -6.185 0.876 -7.057 ***
e3 <--> e2 -3.580 1.116 -3.208 0.001

Table AB-31 Correlations: (Group number 1 - Default model)

Estimate
q14_tot <--> q11_tot 0.443
e2 <--> e1 -0.524
e3 <--> e2 -0.193
 230

Table AB-32 Variances: (Group number 1 - Default model)

Estimate S.E. C.R. P Label

q14_tot 24.843 1.573 15.796 ***
q11_tot 10.295 .652 15.796 ***
e1 6.929 .439 15.796 ***
e2 20.111 1.713 11.740 ***
e3 17.185 1.165 14.756 ***

Table AB-33 Squared Multiple Correlations: (Group number 1 - Default model)

Estimate
q12_tot 0.392
q13_tot 0.190
q15_tot 0.026

Matrices (Group number 1 - Default model)

Table AB-34 Total Effects (Group number 1 - Default model)

q11_tot q14_tot q12_tot q13_tot

q12_tot 0.424 0.226 0.000 0.000
q13_tot 0.586 0.312 1.383 0.000
q15_tot 0.200 0.107 0.473 0.342

Table AB-35 Standardized Total Effects (Group number 1 - Default model)

q11_tot q14_tot q12_tot q13_tot

q12_tot 0.403 0.333 0.000 0.000
q13_tot 0.377 0.313 0.938 0.000
q15_tot 0.153 0.127 0.380 0.406

Table AB-36 Direct Effects (Group number 1 - Default model)

q11_tot q14_tot q12_tot q13_tot

q12_tot 0.424 0.226 0.000 0.000
q13_tot 0.000 0.000 1.383 0.000
q15_tot 0.000 0.000 0.000 0.342
 231

Table AB-37 Standardized Direct Effects (Group number 1 - Default model)

q11_tot q14_tot q12_tot q13_tot

q12_tot 0.403 0.333 0.000 0.000
q13_tot 0.000 0.000 0.938 0.000
q15_tot 0.000 0.000 0.000 0.406

Table AB-38 Indirect Effects (Group number 1 - Default model)

q11_tot q14_tot q12_tot q13_tot

q12_tot 0.000 0.000 0.000 0.000
q13_tot 0.586 0.312 0.000 0.000
q15_tot 0.200 0.107 0.473 0.000

Table AB-39 Standardized Indirect Effects (Group number 1 - Default model)

q11_tot q14_tot q12_tot q13_tot

q12_tot 0.000 0.000 0.000 0.000
q13_tot 0.377 0.313 0.000 0.000
q15_tot 0.153 0.127 0.380 0.000

Model Fit Summary

Table AB-40 CMIN

Model NPAR CMIN DF P CMIN/DF

Default model 12 6.711 3 0.082 2.237
Saturated model 15 0.000 0
Independence model 5 668.154 10 0.000 66.815

Table AB-41 RMR, GFI

Model RMR GFI AGFI PGFI

Default model 0.354 0.995 0.973 0.199
Saturated model 0.000 1.000
Independence model 5.952 0.584 0.376 0.389
 232

Table AB-42 Baseline Comparisons

NFI RFI IFI TLI

Model CFI
Delta1 rho1 Delta2 rho2
Default model 0.990 0.967 0.994 0.981 0.994
Saturated model 1.000 1.000 1.000
Independence model 0.000 0.000 0.000 0.000 0.000

Table AB-43 Parsimony-Adjusted Measures

Model PRATIO PNFI PCFI

Default model 0.300 0.297 0.298
Saturated model 0.000 0.000 0.000
Independence model 1.000 0.000 0.000

Table AB-44 NCP

Model NCP LO 90 HI 90
Default model 3.711 0.000 15.350
Saturated model 0.000 0.000 0.000
Independence model 658.154 577.099 746.609

Table AB-45 FMIN

Model FMIN F0 LO 90 HI 90
Default model 0.013 0.007 0.000 0.031
Saturated model 0.000 0.000 0.000 0.000
Independence model 1.339 1.319 1.157 1.496

Table AB- 46 RMSEA

Model RMSEA LO 90 HI 90 PCLOSE

Default model 0.050 0.000 0.101 0.422
Independence model 0.363 0.340 0.387 0.000
 233

Table AB -47 AIC

Model AIC BCC BIC CAIC

Default model 30.711 31.003 81.286 93.286
Saturated model 30.000 30.365 93.219 108.219
Independence model 678.154 678.276 699.227 704.227

Table AB-48 ECVI

Model ECVI LO 90 HI 90 MECVI

Default model 0.062 0.054 0.085 0.062
Saturated model 0.060 0.060 0.060 0.061
Independence model 1.359 1.197 1.536 1.359

Table AB-49 HOELTER

HOELTER HOELTER
Model
0.05 0.01
Default model 582 844
Independence model 14 18
234
235
 236

Strongly Agree Neither Disagree Strongly

Agree agree Disagree
nor
Answer the following Disagree
11 Feed back on dealer: Purchase process
11.1 The dealer gave a good assistance
during purchase of my car
11.2 The sales assistance could
answer to all my queries
11.3 The financial tie-up for loans were
available at the dealer's showroom
11.4 The booking process was very smooth

11.5 The booking process was quick and

efficient
11.6 The delivery of car took place
as per the commitment given to me
11.7 The overall service I received during
the purchase of car was satisfactory

12 Feed back on dealer: after sales service

12.1 The dealer gives me a reminder
when service is due
12.2 The servicing of car is done well
12.3 The particular problem that I highlight
is rectified during the service
12.4 The service charges are reasonable
12.5 The service center offers valuable
suggestions for the smooth maintenance of
my car
12.6 I am satisfied with the overall after
sales service rendered by the center
 237

Neither
Strongly agree Strongly
Agree Disagree
Agree nor Disagree
Answer the Following Question
Disagree

13 feedback: vehicle perfromance and

perceived value
13.1 The services I received at the booking stage
was as expected by me before purchase.
13.2 The milage of the car is the same as I
expected before purchase
13.3 The performance of the car is as good as I
expected.
13.4
The car is really very comfortable to drive.
13.5 The lumbar space is spacious to
accommodate moderate luggage.
13.6 I am very much satisfied with the purchase of
my present car.
13.7
My present perception about the car is the
same as I had expected before purchase.
13.8 My perception about the car are still
influenced by advertisements and media.
13.9 The car is really a good value for money
13.1 The resale value of the car is the same as I
had expected before purchase.
 238

14 Perceived Value before Purchase

14.1 I had very high expectations regarding the services
at the booking stage of my present car.
14.2 I had very high expectations regarding the milage of
the car that I am currently using
14.3 I had very high expectation regarding the
performance of the car.
14.4 I expected that the car I am using is very
comfortable to drive.
14.5 I expected the lumbar space is spacious to
accommodate moderate luggage.
14.6 I expected I will be very much satisfied with the
purchase of my present car.
14.7 My perceived value before purchase was created
through word of mouth from peers.
14.8 My expectations on the vehicle was created from
advertisements and media.
14.9 I expected the purchase of this car is a good value
for money
14.1 Buy-back schemes for a new car or higher
version is an important decision making
factor for the next purchase
 239

Answer the Following Strongly Agree Neither Disagree Strongly

agree agree Disagree
nor
disagree
15 Loyalty
15.1 I perfer to buy a small car of the same
manufacturer again
15.2 I prefer to upgrade from a small car to
a medium sized luxury car of the same
manufacturer.
15.3 I prefer to upgrade from a small car to
a medium sized luxury car of the
different manufacturer.
15.4 Dealer service during Pre-sale is an
important factor for me in purchasing
the next car.
15.5 Dealer after sales service is an
important factor for me in making the
purchase decision with respect to next
car.
15.6 The performance and perceived value
of my present car is a significant factor
in deciding the next car purchase.
15.7 Brand value of the car is an important
factor that helps me to decide the next
purchase.
15.8 My purchase decision for the next car
depends on factors other than
mentioned here.
 240

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LIST OF PAPERS PUBLISHED BASED ON THIS THESIS

National Journal

Srivats R. & Gopal R.K. 2011, ‘Relationship between customer satisfaction and loyalty
among passenger car users (An empirical study conducted in Bangalore City among
passenger car users)’, RVIM Journal of Management, vol. 3, Issue 2, pp. 76-82.

International Journal
Srivats R. & Gopal R.K. 2012, ‘Relationship between customer satisfaction and loyalty
among passenger car users (An empirical study conducted in Bangalore city among small
passenger car users)’, International Journal of Research in Commerce and Management,
vol.10. pp.45-54.

International Conference
Srivats R. & Gopal R.K. 2011, ‘Marketing Analytics: Contemplation between Satisfaction
and loyalty of small passenger car users (Study conducted in Bangalore city)’, Trends in
marketing towards Business Excellence, Macmillan advanced research series, pp 332-342.