A

RESEARCH REPORT
ON
THE STUDY OF CONSUMER PREFERENCE
TOWARDS HYUNDAI AND MARUTI CARS”

Submitted To: Submitted By:

William sir Mansi Dhir
MBA (IB)
 CONTENTS

CHAPTER 1: Introduction
CHAPTER 2: Review of Literature
CHAPTER 3: Research Methodologies
CHAPTER 4: Presentation and Interpretation of
Data
CHAPTER 5: Summary of Findings and
Suggestions for further study
AUTOMOBILE INDUSTRY

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

INDUSTRY OVERVIEW

Since the first car rolled out on the streets of Mum
b a i   ( t h e n   B o m b a y )   i n   1 8 9 8 ,   t h e Automobile Industry of
India has come a long way. During its early stages the auto
industry w a s o v e r l o o ke d b y t h e t h e n G o ve r nm e n t a nd t h e
p o l i c i e s w e r e a l s o n o t f a v o r a b l e . T h e liberalization policy and
various tax reliefs by the Govt. of India in recent years have made
remarkable impacts on Indian Automobile Industry. Indian auto
industry, which is currently growing at the pace of around 18 %
per annum, has become a hot destination for global auto players like
Volvo, General Motors and Ford. A well developed transportation
system plays a key role in the development of an economy, an d
I n d i a i s n o e x c e p t i o n t o i t . W i t h t he g r o w t h o f t r a n s p or t a t i o n
s y s t e m t h e A u t o m o t i v e Industry of India is also growing at rapid
speed, occupying an important place on the 'canvas' of Indian economy.
Today Indian automotive industry is fully capable of producing various
kinds of vehicles and can be divided into 03 broad categories: Cars, two-
wheelers and heavy vehicles.
•The first automobile in India rolled in 1897 in Bombay.

•India is being recognized as potential emerging auto market.

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

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

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

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

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

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

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

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

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

•The number one global motorcycle manufacturer is in India.

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

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

we will only discuss about the phases of automobile in the development
and modernization process since the first car was shipped to India. We will
start automotive history from this point of time. The automobile industry has
changed the way people live and work. The earliest of modern cars was
manufactured in the year 1895. Shortly the first appearance of the car
followed in India. As the century turned, three cars were imported in
Mumbai (India). Within decade there were total of 1025 cars in the city.

The dawn of automobile actually goes back to 4000 years when the first
wheel was used for transportation in India. In the beginning of 15th century
Portuguese arrived in China and the interaction of the two cultures led to a
variety of new technologies, including the creation of a wheel that turned
under its own power. By 1600s small steam-powered engine models was
developed, but it took another century before a full-sized engine-powered
vehicle was created. The actual horseless carriage was introduced in the
year 1893 by brothers Charles and Frank Duryea. It was the first internal-
combustion motor car of America, and it was followed by Henry Ford's first
experimental car that same year.

One of the highest-rated early luxury automobiles was the 1909 Rolls-
Royce Silver Ghost that featured a quiet 6-cylinder engine, leather interior,
folding windscreens and hood, and an aluminum body. It was usually
driven by chauffeurs and emphasis was on comfort and style rather than
speed.
During the 1920s, the cars exhibited design refinements such as balloon
tires, pressed-steel wheels, and four-wheel brakes. Graham Paige DC
Phaeton of 1929 featured an 8-cylinder engine and an aluminum body.

The 1937 Pontiac De Luxe sedan had roomy interior and rear-hinged back
door that suited more to the needs of families. In 1930s, vehicles were less
boxy and more streamlined than their predecessors. The 1940s saw
features like automatic transmission, sealed-beam headlights, and tubeless
tires.
 “Hyundai motor company”

Founded 1967
Founder Chung Ju-yung
Chairman & CEO Chung Mong-Koo

Parent Hyundai KIA Automotive group

Location Seoul, South Korea

Industry Automobile market

Revenue 38.6 Trillion
Net income 2.96 Trillion
Employees 75000 worldwide
Website www.Hyundai-motor.com
Slogan Drive your way
 COMPANY PROFILE

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

Automotive Group. It is South Korea's largest car maker. It is
headquartered in Yangjae-Dong Seocho-Gu Seoul. HMC is also
the world's sixth largest car maker and operates the world's
largest integrated automobile manufacturing facility in Ulsan,
South Korea.

In India the company is known by Hyundai Motor India Limited

(HMIL). It is a wholly owned subsidiary of Hyundai Motor
Company and is the second largest and the fastest growing car
manufacturer in India. Currently the company markets 32 variants
of passenger cars in six segments. Santro in the B segment, Getz
in the B+, the Accent in the C segment, Elantra in the D segment,
Sonata Embera in the E segment and the Tucson in the SUV
segment.

HMIL recorded combined sales of 252,851 during calendar year

2005 with a growth of 17.26% over previous year. It is the
country's fastest growing car company having rolled-out 10,
1,00,000 cars in just 90 months since its inception and is the
largest exporter of passenger cars with exports of over Rs. 1,800
crores. The company has recorded a growth of 27.2% in exports
over the year 2004.

The company has been awarded the benchmark ISO 14001

certification for its sustainable environment management

Hyundai brands

 Accent
 Verna
 Santro Xing
 I10
 I20
 Getz

Competitors to Hyundai
 Maruti Suzuki

 Tata motors

 M&M

 General motors

 Honda

 Toyota

 Ford

“MARUTI SUZUKI”
Founded 1981
Headquarter GURGAON, HARYANA, INDIA
Industry Automotive
Type Public (BSE, NSE)
Products Automobiles, Motor cycle
Revenue 4.8 Billion
Employees 6903
Parent Suzuki
Website www.Marutisuzuki.com
Slogan Count on us

Company Profile
Maruti Udyog Limited (MUL), established in 1981, had a prime objective to
meet the growing demand of a personal mode of transport, which is caused
due to lack of efficient public transport system. The incorporation of the
company was through an Act of Parliament.

Suzuki Motor Company of Japan was chosen from seven other prospective
partners worldwide. Suzuki was due not only to its undisputed leadership in
small cars but also to commitments to actively bring to MUL contemporary
technology and Japanese management practices (that had catapulted
Japan over USA to the status of the top auto manufacturing country in the
world).

A license and a Joint Venture agreement were signed between

Government of India and Suzuki Motor Company (now Suzuki Motor
Corporation of Japan) in Oct 1982.
The objectives of MUL, then are as cited below:

 Modernization of the Indian Automobile Industry.

 Production of fuel-efficient vehicles to conserve scarce resources.
 Production of large number of motor vehicles which was necessary
for economic growth.

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

be honored with an ISO 9000:2000 certificate. The production/ R&D is
spread across 297 acres with 3 fully-integrated production facilities. The
MUL plant has already rolled out 4.3 million vehicles. The fact says that, on
an average two vehicles roll out of the factory in every single minute. The
company takes approximately 14 hours to make a car. Not only this, with
range of 11 models in 50 variants, Maruti Suzuki fits every car-buyer's
budget and any dream. India's largest automaker, Maruti Suzuki has filed
an 11% rise in the March 2010 sales on a YoY basis. With the total sales
standing at 95,123 vehicles in March 2

Maruti Brands

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

Competitors to Maruti Suzuki

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

1.0 (Background to the study)

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

1.1(Statement of the Problem)

With better understanding of consumer’s perceptions,

companies can determine the actions required to meet the
customer’s need. They can identify their own strengths and
weaknesses, where they stand in comparison to their
competitors, chart out the path future progress and
improvement. It helps to promote an increased focus on
customer outcomes & improvement in work practices within
the company. The following problem arises which are as
follows:
  Product Quality
 Product Packaging
 Keeping delivery commitments
 Price
 Responsiveness & ability to response complaints & reject
projects
 Overall communication, accessibility & attitudes

1.2 (Objective of the study)

The objective of this trust is to address the expectations of

society and to initiate the concentrate steps to extend support in
the field of Health care, Educational and Vocational Training,
Environment, Road Safety, Art, Science and Technology and
much more. The company aims to achieve sustainable, profitable
growth through the development of superior products and
customer- relevant technologies.

  Other objectives are as follows:

  To know the image of product in the mind of consumer.
 To compare the level of satisfaction before purchasing and
after purchasing the car.
 To know the most popular media for advertisement.
 To check the loyalty of the consumer towards the brands.
 To know the most motivating factor for purchasing the four –
wheeler.
 To know the preferable price from the customer.
 To study their attitude toward various Cars brand
 To find out the perceived positioning of different Car Brands.
 To know out the choice criteria which the customer while
purchasing a Car.

1.3(Need of the Study)

A brand is a set of expectations and associations evoked from

company or product. A brand is how key constituents- customers,
employees etc. experiences what you do. Some brands are of
such great importance to people, that we speak of them as a part
of one’s life and identity, being used to express one. Some would
say that these brands have their own personality, the brand
perception, which can be defined as the set of human
characteristics associated with a given brand. Because many
people interact with brand as though they were other people, it is
important to understand what a brand perception consists of, and
how its characteristics can be used to affect the relationship
between the brands and its users. Knowing and understanding
the brand perception gives a good insight into this relationship,
and into peoples’ attitudes towards the brand, and is also an
important guide to communicating the brand. Like apparel and
lifestyles brands, a car is extension of one’s perception. People
buy cars which either matches their personalities or those which
provide them opportunities of being perceived as somebody they
aspire to be. This becomes significant as consumers move up the
value chain from small compact cars to midsize and upwards.

1.4 (Purpose of the study)

 The committee reviews the contents and content selection

process of the company’s 2009 Sustainability Report and
provides ideas for improvement.

1.5 (Scope of the study)

 Review of contents in and content selection process of the
report
 Review of key performances and strengthen internal system
and process for improvement
 Review of quality of the overall report: reliability, balance,
etc.
 On-site verification of the performance and processes
described in the report
1.6 (HYPOTHESIS)
We can suppose that the study will lead to the knowledge about
various brands of cars and will provide a healthy comparative
study between two cars which are Hyundai and Maruti Suzuki. A
hypothesis is a possible answer to questions. Hypothesis implies
generating basically alternative answers to research questions.
The researches determine which of these alternative answers is
correct.
REVIEW OF LITERATURE
 Relevant literatures pertaining to the present study on four wheeler
automobile industry are included in this chapter. The literatures are helpful
for proper understanding the four wheeler automobile industry and its
various related aspects. Review of literature is also helpful in effectively
fulfilling the objectives for which the research project has been
undertaken.

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

manufacturing technologies: evidences from Indian automobile companies’
in International Journal of Manufacturing Technology and Management,
reports the findings of an exploratory survey on ‘Advanced manufacturing
technologies (AMT)’ administered in Indian automobile companies. The
objective of the survey is to assess the status of advanced manufacturing
technologies, identify advanced manufacturing technologies relevant to
Indian automobile sector companies, identify competitive priorities, and
assess the degree of investment in advanced manufacturing technologies.
Responses from 68 companies are analysed and presented.

 RNCOS industry in their study of Indian Automobile Sector provides a

forecast and analysis based on various macro- and microeconomic factors,
sector and industry specific databases, and an in-house statistical and
analytical model. This model takes into account the past and current trends
in an economy, and more specifically in an industry, to bring out an
objective market analysis. In this research main topics covered are: Study
 of the Indian automobile industry structure, Analysis of performance of
industry sub-segments and their future outlook, Understanding the Indian
auto component market and its growth aspects, Identification of future
prospects for the Indian automobile industry.

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

Service with Reference to Four-Wheeler Automobile Industry’ which
reveals that the key to success of automobile industry lies not only in
having good products but also in being able to provide the customer with
the level of service they desire. Because of increasing competitiveness in
the Indian automobile industry, almost all automobile manufacturers have
invested valuable resources on customer satisfaction as a tool to
understand the needs and expectations of their customers. Increased
presence of four-wheeler vehicles throughout the country has created a
growing need for providing service infrastructures closer to the customers'
homes or offices.

 Dr V Sumantran (Executive Director-Passenger Car Business Unit

and Engineering Research Centre at Tata Motors Limited during
November 2001 to August 2005, conducted a study on ‘The Indian
Auto Industry & The Role of Dealers’ which reveals that the global auto
industry has been the subject of much analysis in recent years. While
global capacity creation proceeds at a good clip on one hand, continued
capacity creation in the face of sluggish sales have led to depressed levels
of capacity utilization. Today, the Indian auto industry is one of the largest
industrial sectors with a turnover that contributes to roughly 5 per cent of
 India's GDP. More importantly, it contributes to employment of over 2
million people directly and indirectly to another 10 million. The industry is
important for national policy in that it contributes 19 per cent of indirect
taxes.

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

Regional Sciences published a paper on ‘The impact of policies to control
motor vehicle emissions in Mumbai, India’ which examines the impacts of
measures to reduce emissions from buses, cars, and four-wheelers in
Mumbai, India. They have considered three possible policies: conversion of
diesel buses to CNG, an increase in the price of gasoline and a tax on
vehicle ownership.

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

report on Automobile- Indian four Wheelers Industry which reveals that
India is the second largest manufacturer and producer of four-wheelers in
the world. It stands next only to Japan and China in terms of the number of
four-wheelers produced and domestic sales respectively. This distinction
was achieved due to variety of reasons like restrictive policy followed by the
Government of India towards the passenger car industry, rising demand for
personal transport, inefficiency in the public transportation system etc

 Dr. Amit Kumar Dwivedi and Mr. Punit Kumar Dwivedi, in their article on
Automobile Sector: Industry Vs Indian Middle Class in Indian MBA
concluded that that there are great opportunities and possibilities in the
automobile sector.  But hike in the fuel price is influencing the market of this
industry.
 There is a need of a very liberal policy for the fuel prices and requires a
great good deal with fuel supplying countries.  Though, the performance of
the industry is better instead of high and unfavourable fuel policy.

The new launching of Tata's Nano 'One Lakh Car' which is also known as
People's Car is also a very good strategy to capture the middle class
customers.  Introduction of Nano and Bajaj Lite will definitely affect the
growth and sales volumes of cars which will also affect the industry by
reaching, catching the Indian middle class and fulfilment of their own car
need.

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

paper on ‘The Evolution and Structure of the four-wheeler Industry in India’
studied the evolution of the competitive structure of the two-wheeler
industry in India. The evolution of the industry's competitive structure is
traced using Kendall’s Index of Rank Concordance and the Evans-Karras
test of convergence. The industry seems to be characterized by oligopoly
with the onset of economic reforms not making much difference to
industrial structure. Convergence of sales and capacity at the level of the
industry is conditional while it is absolute at the level of the segment.

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

Research Department of Commerce) in their market survey report on
Automobiles: the Engines of Economic Growth concluded that A sound
transportation system plays a pivotal role in a country’s rapid economic and
industrial development. The well-developed Indian automotive industry ably
fulfils this catalytic role by producing a wide variety of vehicles. They also
studied Size and structure of the Indian automotive industry, production
trends and exports trends. They also concluded that the manufacturers
must take necessary steps to increase the production of automobiles in
India. They should adopt latest technology and introduce new models to
face stiff competition from foreign manufacturers.

CONSUMER PREFERENCE

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

of measuring how satisfied an enterprise’s customers are with the
organization Efforts in a market place.

Every organization has customers of some kind. The organization provides

products (goods and services) of some kind to its customers through the
mechanism of a marketplace. The products the organization provides are
subject to competition whether by similar products or by substitution
products. The reasons on organization is interested in the satisfaction of its
customers is because customers purchase the organization’s products.
The organization is interested in retaining its existing customers and
increasing the number of its customers.
By Fareena sultan:-Examines consumer preferences for forthcoming
technological innovations. Studies consumer response to different levels of
technology over time. Looks at preferences for existing and intermediate
technologies when future ones are expected. Focuses on technological
consumer durables that are expected to evolve over time. The primary
contributions of this research are: an understanding of how consumer
preferences for a technology are affected by the time of adoption; an
understanding of the value to consumers of obtaining different levels of a
technology, at different points in time; and the utilization of parsimonious
indices to assess consumer response to different levels of technology over
time. An empirical examination is conducted for high definition television
(HDTV). Using survey data, the study explores consumer preferences for
HDTV, and for interim television technologies. Managerial implications to
aid product design, and the timing of introduction of evolving technological
innovations, are also discussed.

 How Companies Find Consumer Preferences

Companies routinely test the market to find out what customers like and
dislike about their products and competitors' products. This is usually
done by an internal marketing department or outsourced to a market
research firm. Phone interviews, paper surveys, electronic surveys,
focus groups and consumer samplings are common methods for
gathering information.

 Market Research Example

 Here is a popular example of market research: A customer has finished
shopping and paying for merchandise at a local grocery store. Before
handing the receipt to her, the cashier points to and explains that she
has been invited to participate in a short survey about her visit. If she
chooses to participate, she will receive $5 off her next visit and a chance
to win a large monetary grand prize.

 How Companies Use This Information

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

determine what it means. Analysis of the information may lead the
company to change the formula, packaging, color, size or some other
feature of the product. In the case of the suds in the shampoo, the
manufacturers may find that customers are continuing to prefer and
associate the foamy lather with high quality cleanliness, leading them to
keep the same formula or decide to add even more of the sudsing
agent.

CONSUMER BEHAVIOUR

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

consumer tastes are also characterized by fast changes. So to survive in
the market the firms have to be in touch with the changing consumer
preferences. Marketers have to understand the consumer behaviour and
factors influencing the buying behaviour of the customers in order to be
successful in this dynamic and competitive environment.

Meaning of Consumer Behaviour:

Consumer Behaviour is the behaviour that the consumer display while

searching for, evaluating, purchasing and disposing off products and
services that they expect will satisfy their needs. Consumer behaviour is
the study of how consumer makes their decisions to spend their resources
on consumption related items i.e. time, efforts and money.

Study of consumer behaviour proves the marketers an insight regarding the

consume preferences and helps them in effective market segmentation and
targeting. The importance of consumer behaviour lies in the fact that
behaviour can be understood and influenced to ensure a positive purchase
decision. So a round understanding of consumer behavior is necessary for
long run success of any marketing program. That’s why the marketing
managers interest lies exactly in understanding consumer behavior to
ensure that his marketing strategy results in purchase of the product.

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

future and aspire to achieve desired states The marketplace provides rich
sources of hope and invites us to the endless pursuit of happiness. while
some researchers recognize its importance, definitions in the psychology,
sociology, philosophy, medical, and religion literatures often conceptualize
hope in different ways. Understanding Hope and its Implications for
Consumer Behavior sheds light on the relevance and importance of hope
to consumer behavior. The authors explore the conceptual meaning of
hope and a definition of hope and the constituent elements that underlie it
is articulated.

DETERMINANTS OF CONSUMER BEHAVIOUR

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

variables involved and their tendency to interact with and influence each
other. The main determinants of consumer behaviour are:

1. External Variables
2. Individual determinants of Consumer Behaviour

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

influences such as:
 Culture
 Sub Culture
 Social Class
 Family
 Reference Groups
 Personal Factors such as age and life cycle, education,
occupation, life style, personality, etc..

2. Individual Determinants of Consumer Behaviour : The individual

determinants of consumer behaviour are:
  Personality and Self Concept
 Motivation and Involvement
 Learning
 Memory
 Attitude

PERCEPTUAL MAPPING

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

are not easily determined by marketers. However, a technique known as
perceptual mapping may be used in exploring consumer’s product
perceptions. Since product can be perceived on many dimensions (such as
quality, price and strength) the technique is multidimensional in nature.
That is, it allows for the influence for more than one stimulus characteristic
on product perceptions, typically consumer feel out measuring scales to
indicate their perceptions of many characteristics and similarity of
competing brands. Computer programs analyze the resulting data to
determine those products characteristics or combination of characteristics
that are most important to consumers in distinguishing between competing
brands. Results of this analysis can be plotted in terms of perceptual
“maps” which display how consumes perceive the brands, and their
differences, on a coordinate system.