THE EFFECT OF PRODUCT QUALITY ON CONSUMER BRAND

LOYALITY

1
INDEX

Serial No Content Page No

1 Chapter 1: INTRODUCTION
1.1 Introduction
1.2 Research Background
1 1.3 Statement of Problem
1.4 Significance of the study
1.5 Objective
1.6 Scope of Study
1.7 Research Methodology
1.8 Limitations

2 Chapter 2: REVIEW OF LITERATURE

3 Chapter 3: INDUSTRY PROFILE & COMPANY

PROFILE

4 Chapter 4: DATA ANALYSIS AND INTERPRETATIONS

5 Chapter 5: FINDINGS, SUGGESTIONS AND

CONCLUSION

7 BIBILOGRAPHY

8 QUESTIONNAIRE

2
LIST OF TABLES

S.NO DESCRIPTION PAGE

NO:
1 Table Showing Age of the customers
2 Table showing consumer's profession
3 Table showing Customer’s expectations on TV Ad for buying
motor cars
4 Table showing factors influenced to purchase the Maruti Suzuki
Motor Car
5 Table showing customer's awareness on Maruti Suzuki motor
cars
6 Table showing Customer’s opinion whether the prices of Maruti
Suzuki Cars is reasonable.
7 Table showing Celebrity endorsement in the Brand awareness

8 Table showing Awareness of the Product to the Customers

9 Table showing Sources of Awareness About Motor Cars

10 Table Showing Benefits Provided by Maruti Suzuki fir Creating
Awareness
11 Table Showing Quality and Performance of Maruti Suzuki
Motor Car
12 Table Showing Availability of Spare Parts
13 Table Showing Feedback on Mileage of the Maruti Suzuki bike

14 Table Showing Suggesting Maruti Suzuki to Friends and Family

15 Table Showing Buying Maruti Suzuki Branded Car

3
LIST OF CHARTS

S.NO DESCRIPTION PAGE

NO:
1 Chart Showing Age of the customers
2 Chart showing consumer's profession
3 Chart showing Customer’s expectations on TV Ad for buying
motor cars
4 Chart showing factors influenced to purchase the Maruti Suzuki
Motor Car
5 Chart showing customer's awareness on Maruti Suzuki motor
cars
6 Chart showing Customer’s opinion whether the prices of Maruti
Suzuki Cars is reasonable.
7 Chart showing Celebrity endorsement in the Brand awareness

8 Chart showing Awareness of the Product to the Customers

9 Chart showing Sources of Awareness About Motor Cars

10 Chart Showing Benefits Provided by Maruti Suzuki fir Creating
Awareness
11 Chart Showing Quality and Performance of Maruti Suzuki
Motor Car
12 Chart Showing Availability of Spare Parts
13 Chart Showing Feedback on Mileage of the Maruti Suzuki bike

14 Chart Showing Suggesting Maruti Suzuki to Friends and Family

15 Chart Showing Buying Maruti Suzuki Branded Car

4
ABSTRACT

Brand Loyalty, as one of the fundamental dimensions of brand equity, is often

considered to be a prerequisite of consumers’ buying decision, as it represents the main factor
for including a brand in the consideration set. Brand awareness can also influence consumers’
perceived risk assessment and their confidence in the purchase decision, due to familiarity with
the brand and its characteristics. On the other hand, brand awareness can be depicted into at
least two facets – unaided (brand recall) and aided (brand recognition) – each of the two facets
having its more or less effective influence on buying decision and perceived risk assessment.

Creating brand loyalty with the use of advertising, promotion event management etc is
very important for any business. A different brand has different kind of awareness which
retains recognition. Brand awareness satisfies a need of the consumer. A consumer as aims,
ambitions, motivation drives and desire. Consumer feels more powerful when he uses the
brand. Satisfactions or preference for a brand shows how loyal the consumer is likely to be
brand. In today’s competitive business scenario where every companies product is competing
with each other retaining loyal customer is an essence for which increasing the level of brand
awareness is very vital.

The main objective of any business is to acquire larger market share, or higher
percentage of sales in the industry. This could be only achieved by building a higher percentage
of brand loyal customers through awareness. Strong brands help build the corporate image and
also by making it eager for the trading firms to launch new brands/services. Today
brands/services are treated as major enduring assets of a company. More over brand equity is
also a major contributor to customer equity. This all can happen only when there is proper
brand awareness about the product/service.

I took my project titled Brand Loyalty of Maruti Suzuki cars among customers in
Hyderabad. I had tried to compile the clear picture regarding the level of brand awareness,
measure to increase and retain the brand awareness, and the advertising and the promotional
tools effective for enhancing the awareness level of the potential customers. The project has
played a significant role in my life in gaining knowledge in the marketing field.

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 CHAPTER I
INTRODUCTION

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 INTRODUCTION

Brand awareness is the consumers’ ability to recognize or recall (identify) the brand
within a given product category in sufficient detail to make a purchase decision. This also
means that the consumers can propose, recommend, choose, or use the brand. The objectives
of most advertising campaign are to create and maintain brand preference. The first step is to
make potential consumers aware of a brands’ existence. One of the prominent goals of any
business should be to build brand image and awareness of its product, albeit in as cost –
effective manner as possible. Consumer tends to make purchasing decision based on peer
recommendation and direct experience, as well traditional advertising methods.

Brand awareness is an important way of promoting commodity-related products. This

is because for these products, there are very few factors that differentiate one product from its
competitors. Therefore the product that maintains the highest brand awareness compared to
its competitors will usually get the most sales. Having knowledge of the existence of a brand
because brand awareness is considered the first step in the sale, the primary goal of some
advertising campaigns is simply to make the target market aware that a particular brand
exists. Often, this effort alone will sell the product (or service).

The project aims towards increasing the brand loyalty since its one of the effective
tool to effect the final purchase decision and the volume of sales. I had used the topic to find
out or measure the brand loyalty level among the customers and the ways to increase its
awareness. Research was carried out to find out the brand awareness of Maruti Suzuki cars,
as well as to find out the preferred vehicles by people. Research was also carried to figure out
what people prefer while purchasing a four wheeler.

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STATEMENT OF THE PROBLEM

Brand loyalty, as one of the fundamental dimensions of brand equity, is often

considered to be a prerequisite of consumers’ buying decision, as it represents the
main factor for including a brand in the consideration set. Brand awareness can also
influence consumers’ perceived risk assessment and their confidence in the purchase
decision, due to familiarity with the brand and its characteristics. On the other hand,
brand awareness can be depicted into at least two facets – unaided (brand recall) and
aided (brand recognition) – each of the two facets having its more or less effective
influence on buying decision and perceived risk assessment.

Today individuals are facing a growing range of choice for buying four
wheelers. They are making their choice on the basis of their perceptions of brand,
quality service and value. Every company has to adopt strategies to keep its brand in
consumer’s memory. Strong brand awareness means easy acceptance of new
products. An organization has to measure the level of awareness of the potential
customers and has to adopt different strategies to enhance the awareness level and to
identify the appropriate promotional tool. Brand awareness is asset which brand
managers create and enhance to build brand equity. It is related to the nature and
features of product. It leads to brand strength which is constituted by measuring the
variable like leadership, stability, Market, geographic, trend, support and protection
etc…

Creating brand awareness with the use of advertising, promotion event

management etc. A different brand has different kind of awareness which retains
recognition. Brand awareness satisfies a need of the consumer. A consumer as aims,
ambitions, motivation drives and desire. Consumer feels more powerful when he uses
the brand. Satisfactions or preference for a brand shows how loyal the consumer is
likely to be brand.

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SIGNIFICANCE OF THE STUDY

In today’s competitive business scenario where every companies product is

competing with each other retaining loyal customer is an essence for which increasing
the level of brand loyalty is very vital.

 The primary objective of the project is to study the customer’s brand loyalty
towards Maruti Suzuki products.

 This project is aimed to study the framework of four wheelers in India, the
major manufacturing companies that are in the market.

 The project is aimed to give feedback and suggestions to Maruti Suzuki

dealers relating to its brand awareness about its products in the market.

This study is not concerned only with brand awareness, but deals also with other
facts. These include:

 Which media is effective in communicating the message to the potential

buyers?

 Did the potential customers feel that the brand is important to purchase a
product?

 Which attribute of the product drove the potential customer to prefer a

particular product?

 How the brands influence the market

 What is the effect of the competitor’s product?

 Are the potential customers satisfied with the brand, price, quality etc..?

KEY QUESTIONS

 From where did the potential customers come to know of Maruti Suzuki cars and
which media is effective in communicating the message to the potential buyers?

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 Do the potential customers feel that the brand is important to purchase and the
attributes of the product that drove the potential customer to prefer a particular
product?

OBJECTIVES OF THE STUDY

An attempt has been made to analyze the brand awareness of Maruti Suzuki

cars in Hyderabad

 To determine consumers attitude and expectations towards Maruti Suzuki

Motor Cars

 To judge the awareness level of the prospect customer/individual and the way
they have developed the awareness

 To judge which promotional tool is effective to increase the awareness level

among the people

 To see whether brand awareness influences the buying behavior or not

 To understand the customer feedback of four wheeler products

 To suggest areas of improvement to Maruti Suzuki for improving its brand

awareness.

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SCOPE OF THE STUDY

The study is an analysis of brand awareness of Maruti Suzuki four wheelers.

The scope of the study is to check that does brand awareness create a specific image
about the brand which helps the company in gaining an advantage over competitors.

The study is carried out by interviewing 50 customers (government and

privately employed and businessmen) who were in the age group above 21 years. It
has been deliberately decoded to conduct the survey among this age group because
they are the people who generally purchase cars.

 The study has only made a humble attempt of evaluation of customer

feedback and brand awareness based on different criteria.

 The brand awareness towards the Maruti Suzuki cars is carried out in
Hyderabad

 The survey conducted will provide the details about the brand awareness
levels responding to the products provided.

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 RESEARCH METHODOLOGY

For the purpose of study, both primary and secondary data has been collected.
The observational method and survey research method is used to collect the primary
data. The survey research method is used to gain insight into the brand awareness of
the customers towards motor cars. The main research instruments used the required
data is a well-structured questionnaire. A detailed questionnaire has been prepared to
reflect the opinions of the customers towards the products and administered to the
same.

The necessary data has also been collected from official records and other
published sources. The collected data is classified, tabulated, analyzed and
interpreted. Finally conclusion is draw based on the study and suggestions are offered
for improving the brand awareness of motor cars.

SAMPLE DESIGN:

For ascertaining the brand loyalty towards the motor cars, 50 customers have
been randomly selected from the Hyderabad city only.

DATA COLLECTION:

There are two types of data collection

1. Primary data

2. Secondary data

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Primary data

 Primary data is personally developed data and it gives latest information and
offers much greater accuracy and reliability.

 There are various sources for obtaining primary data i.e., Mail survey,
personal interview,

 Field survey, panel research and observation approach etc.

 The study is dependent on primary data to a maximum extent, which is

collected by way of structures personal interview with customers.

Secondary data

Secondary data is the published data. It is already available for using and its
saves time. The mail source of secondary data are published market surveys,
government publications advertising research report and internal source such as sales,
sales records orders, customers complaints and other business record etc. the study
has also depended on secondary data to little extent, which is collected through
internal source.

For this survey personal interview method was used for collecting primary data. This
survey was conducted by face to face interview customers and found to be best suited
to collect the primary data for this project.

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LIMITATIONS

 The objective of the study is to understand the awareness levels prevailing

among people regarding the Maruti Suzuki cars

 The study covers the Hyderabad only and due to the limited sample size, the
facts relabeled in the study may not generalize.

 While calculating the percentages, approximations are made to the nearest

figures, for convenience in understanding.

 The analysis is based on customer’s opinion at the time of survey. Suggestions

and conclusions are based on the limited data.

 Due to time constraint the detailed information cannot be collected, but many
efforts are taken to collect the actual information.

 There was a constraint with regard to time allocation for the research study i.e.
for a period of 45 days.

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 CHAPTER II
REVIEW OF LITERATURE

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2.1 Introduction
This dissertation examines the effect of product quality on brand loyalty. Given, this
focus, the aim of this chapter is to problematize this study by making a review of a
variety of theories or model that explicates the concept of product quality
comprehensively; whilst also making a case for the absence of a theoretical
framework that explains the extent to which product quality influences brand loyalty.
In order to accomplish this task therefore, this chapter has been delineated into four
important paragraphs and this constitutes the first. The second paragraph examines a
variety of models or theories underscoring the product quality phenomenon. This is
followed by an analysis of the strengths and weaknesses of these theories/models.
Following this analysis, a case is made for the absence of a framework highlighting
how product quality influences brand loyalty. Importantly, this argument leads
towards the formulation of an overarching research question leading to the
problematization of the issue being investigated in this study.

2.1.2 Product quality

As discussed under the introductory section of this chapter, this paragraph aims to
examine the concept of product quality. This would be achieved by looking
principally at the meaning of product quality and theories/models of product quality.

2.1.2.1 Meaning of product quality

The concept of product quality can be critically defined from two different
perspectives, namely objective quality and the perceived quality (Brunsø et al., 2005).
Objective quality refers to the technical, measurable, and verifiable nature of
products/services, processes, and quality controls. This includes product features,
product performance, durability amongst others. While subjective or perceived
quality refers to the consumers' value judgments or perceptions of quality. Product

16
Quality encompasses the features and characteristics of a product or service that bears
on its ability to satisfy stated or implied needs. In other words, product quality is
defined as “fitness for use” or ‘conformance to requirement” (Russell and Taylor,
2006).

Perceived quality is a result of consumers’ subjective judgment on a product

(Zeithaml, 1988; Dodds et al., 1991; Aaker, 1991). Bhuian (1997) defined perceived
quality as a judgment on the consistency of product specification or an evaluation on
added value of a product. Garvin (1983) proposes that perceived quality is defined on
the basis of users’ recognition while objective quality is defined on the basis of
product or manufacturing orientation. The differences between objective quality and
perceived quality lie in that objective quality has a pre-design standard to a product,
and perceived quality is influenced by internal and external product attributes which
is an evaluation basis for consumers (Olshavsky, 1985; Zeithaml, 1988). Kan (2002)
points out that objective quality is that consumers will use their experience and
knowledge to evaluate overall product benefit, function, durability, technology and
reliability when consumers purchase a product. Perceived quality is a consumer
judgment on the accumulative product benefits and a subjective feeling on product
quality (Zeithaml, 1988; Dodds et al., 1991). Aaker (1991) argues that perceived
quality can show the salient differentiation of a product or a service and becomes a
selective brand in consumers’ mind.

One of the reasons why perceived quality is different to real quality is because a
previous bad image of a product may influence consumers’ judgment on product
quality in the future; even if the product quality has been changed, consumers may
not trust that product because of their unpleasant experience in previous (Aaker,
1996). However, manufacturers and consumers have different views on the judgment
of the quality dimensions (Morgan, 1985; Aaker, 1996), customers rarely hold
enough information to assess a product objectively and even though customers have
enough information, there may be insufficient time and motivation to do a further

17
judgment, and at the end they may only be able to select little important information
to make an evaluation on quality (Aaker, 1996; Wan, 2006). In essence, perceived
product quality is very significant in maintaining existing customers. Adding to this,
perceived quality is a comparative concept which possesses situational, comparative,
and individual attributes. Perceived quality will be affected by factors such as
previous experience, education level, and perceived risk and situational variables such
as purchase purpose, purchase situation, time pressure, and social background from
consumers (Holbrook & Corfman, 1985). In summary, perceived quality is a
consumer subjective judgment on product quality, and he or she will evaluate product
quality from their previous experiences and feelings and according to how it meets
their expectations.
2.2.2 Models on Product Quality
There are a variety of models, which attempt to explain the relationship between
product quality and brand loyalty and also the concept of product quality solely.
These models, which appear to have dominated the literature of product quality
include: The Kano two-dimensional quality model, the Swedish Customer
Satisfaction Barometer (SCSB), The American Customer Satisfaction Index model
(ACSI), The European Customer Satisfaction Index (ESCI) model, the Integrated
Model for the Effects of Perceived Product Quality, Perceived Service Quality and
Perceived Price Fairness on Consumer satisfaction and loyalty (Lien-Ti Bei and Yu-
Ching Chiao 2001). These are discussed in the sections below.

2.2.2.1 Kano Two-Dimensional Quality Model

The Kano model is a theory of product development and customer
satisfaction developed in the 1980s by Professor Noriaki Kano. Initially, the two-
dimensional quality model was used in the development of manufactured product
quality in a survey conducted on television with decorative clocks (Kano et al., 1984).
The results from the survey showed that customers/users conceptions of quality were

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two-dimensional instead of one-dimensional. Kano (1984) integrated the concept of
quality along two dimensions. These dimensions were: first, the degree to which a
product or service performs and secondly, the degree to which the user is satisfied.

Figure 2: Kano Two-Dimensional Quality Model

The Kano model illustrates the relationship between customer satisfaction and quality
performance from the customer’s perception. It divides quality features into five
attributes: must-be attribute, one-dimensional attribute, attractive attribute, indifferent
attribute and reverse attribute. The positioning of the quality parameters of
performance and user satisfaction side-by-side in a two axis plot creates the ability to
define quality in a more holistic manner. The horizontal axis of the model illustrates
how fully functional some aspects of a product are while the vertical axis illustrates
how satisfied customers are. The line going in at 45 degrees clearly shows the
situation in which customer satisfaction is simply proportional to how fully functional
a product or service is.

The must-be curve illustrates the aspects where the customer is more dissatisfied
which is when the product is less fully functional. The Attractive quality curve on the
other hand, illustrates the areas in which the customer is more satisfied when the
product is fully functional and depicts that customer remain satisfied even when the
product is less functional. The one-dimensional line illustrates that customer
satisfaction is proportional to the level of fulfillment: the higher the level of
fulfillment, the higher the customer’s satisfaction. The indifferent axis depicts that a
customer will be neither satisfied nor dissatisfied whether the product is fully
dysfunctional or functional.

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 2.2.2.2 THE SWEDISH CUSTOMER SATISFACTION BAROMETER (SCSB)
The Swedish Customer Satisfaction Barometer (SCSB) was the first national
satisfaction index model, established in 1989 (Grigoroudis & Siskos 2009). The
original SCSB model shown in Fig. 1 contains two primary antecedents of
satisfaction: perceptions of a customer’s recent performance experience with a
product or service, and customer expectations regarding that performance. More
specifically, perceived performance is equated with perceived value, or the perceived
level of quality received relative to the price or prices paid (Fornell, 1992). The basic
prediction of the SCSB is that as perceived value increases, satisfaction increases.
The other antecedent of satisfaction is how well the customer expected the product or
service to perform. Customer expectations are defined as that which a customer
predicts (“will” expectations) rather than a normative standard or benchmark
(“should” expectations; Boulding et al., 1993). These expectations are argued to
positively affect customer satisfaction because they serve as cognitive anchors in the
evaluation process (Oliver, 1980).
The consequences of satisfaction in the original SCSB model are derived from
Hirschman’s (1970) exit-voice theory. The theory describes situations in which a
client or customer becomes dissatisfied with the products or services that an
organization provides. The organization discovers its failure to provide satisfaction
via two feedback mechanisms, exit and voice. The customer either exits, or stops
buying from the firm, or voices its complaint of dissatisfaction to the firm in an effort
to receive restitution. Accordingly, the immediate consequences of increased
satisfaction are decreased customer complaints and increased customer loyalty
(Johnson et al 2000).
Perceived
Customer
Performance
Complaint
/Quality
s

Customer
Satisfactio
n Index

Customer Customer
Expectation Loyalty
s

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Figure 3: SCSB Model

The SCSB model predicts that customer expectations lead to perceived performance;
the expectations a customer has towards a product he buys affects the way he
perceives the performance of that product. If a product totally meets with customer’s
expectations then it is said to have performed effectively or properly. Here, customer
expectations will lead to customer satisfaction and may lead to customer complaints
or customer loyalty. That is, the way a customer perceives the performance or quality
would affect the way the customer is satisfied. If customer’s expectations are not met,
he would perceive the product as being of poor performance therefore leading to the
customer being less satisfied which at the end leads to customer complaints. While on
the other hand, high perceived performance would lead to customer satisfaction
which therefore leads to customer loyalty.

2.2.2.3 The American Customer Satisfaction Index (ACSI) Model

The ACSI model, developed in 1994 and illustrated in Fig. 1, builds upon the original
SCSB model specification. The ACSI model, customer satisfaction has three
antecedents: perceived quality, perceived value and customer expectations. The ACSI
traces trends and developments in customer satisfaction and provides benchmarking
aspects for businesses.
Customer Expectations, Perceived Quality and Perceived Value together determine a
customer’s satisfaction, which is measured as the American Customer Satisfaction
Index. Customer satisfaction (ACSI) is the primary predictor of Customer Loyalty to
the product, the terminal variable in the ACSI model. The ACSI has well-developed
conceptualizations of the effects of users’ expectations and the perceived value of the
product (Okoli Reilly 2003).

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The ACSI model predicts that as both perceived value and perceived quality increase,
customer satisfaction should increase which in turn leads to brand loyalty. Quality
experts (Deming, 1981, Juran and Gryna, 1988) delineate two primary components of
the quality experience; the degree to which a product or service provides key
customer requirements (customization) and how reliably these requirements are
delivered (reliability). Asking customers to rate customization quality, reliability
quality, and overall quality allows the ACSI model to delineate a distinct quality
construct that is separate from perceived value.

Customer
Perceived Quality Complaints

Perceived Value Customer

Satisfaction (ACSI)

Customer Loyalty
Customer
Expectations

Figure 4: The ACSI Model

The ASCI model clearly shows that customers before purchasing a product have
certain expectations of the value they will get from the product or brand. Customer
expectations are preceded by perceived quality, perceived value and customer
satisfaction or customer complaints. Customers perceive the quality of a product
whether high or low on the basis of how their expectations are met. In essence, if a
product completely meets the expectations of a customer, then that product would be
considered of very high quality by the customer while on the other hand, if the a
product fails to meet a customer’s expectations then it will be seen as having very low
quality by the customer. From figure 4, perceived quality and perceived value leads to
customer satisfaction or to customer complaints. When product meets customer’s

22
expectations, he then becomes satisfied with that product. However, if product is
perceived as having low quality or value by the customers it leads to the customer
complaining about that product.

The ASCI model illustrates that customer satisfaction leads to brand loyalty. When
customer expectations are completely met by a product they buy, they become
satisfied with that product and is seen as being of very high quality. This clearly
shows that the antecedent of brand loyalty is simply customer satisfaction.

2.2.2.4 The European Customer Satisfaction Index (ESCI) Model

The ECSI represents another variation on the ACSI model (Eklöf, 2000). The ESCI
model is a framework that aims to harmonize the national customer satisfaction
indices in Europe. It was an adaptation the Swedish Customer Satisfaction Index
(Fornell et al. 1998). The ESCI model incorporates company image, customer
expectations, the quality of product offering and the benefit perceived by the
customers. These interdependent factors influence customer satisfaction and customer
loyalty. The customer expectations, perceived quality, perceived value, customer
satisfaction, and customer loyalty constructs are modeled the same as in the ACSI.
The distinction between service quality and product quality in a subset of ACSI
industries is standard in the ECSI. The measures of customer loyalty are also
somewhat different. For the ECSI the loyalty measures include likelihood of
retention, likelihood of recommending the company or brand, and whether the
amount customers are likely to purchase will increase (Michael D. Johnson et al
2000).

There are two more fundamental differences between the ACSI and ECSI models.
First, the ECSI model does not include the incidence of complaint behavior as a
consequence of satisfaction. As described subsequently, there is good reason for this
change. Second, in keeping with the original NCSB, the ECSI model incorporates
corporate image as a latent variable in the model. Corporate image is specified to

23
have direct effects on customer expectations, satisfaction and loyalty. Kristensen,
Martensen and Grønholdt (2000, p.S1008) described the ECSI model as, “a structural
equation model with unobservable latent variables...that link customer satisfaction to
its determinants and, in turn, to its consequence, namely customer loyalty.”

Perceive
d Product
Quality

Customer Custome
Perceive r Loyalty
Corporat Satisfactio
Customer d Value n Index
e Image Expectation
s

Perceive
d Service
quality

Figure 5: The ESCI Model

The customer expectations, perceived quality, perceived value, customer satisfaction,

and customer loyalty constructs are modeled the same as in the ACSI. The distinction
between both is the inclusion of corporate image and perceived service quality with
the exclusion of customer complaints. Customer satisfaction is the central variable of
this model while the drivers are corporate image, customer expectations, perceived
quality and perceived value.

The ESCI model added corporate image as a factor that influences customer
expectations. In other words, it is the way a company is perceived by a customer that
will determine what customers will expect from the company’s products or services.
Just like the ACSI model, the ESCI model still states that customers rate the quality
of a product or service according to the way it meets the expectations they had before
purchasing the product or service. The model also shows that the way customers

24
perceive the quality of a product also leads to the way the customers perceive the
value they get or will get from that product. It also places customer satisfaction as an
antecedent to brand loyalty. The ACSI and ESCI models both see perceived product
quality, perceived value and customer satisfaction as factors that lead to brand
loyalty.

Apart from the customer satisfaction indexes, some scholars have also come up with
conceptual models that also try to explain the product quality construct. The
Integrated Model for the Effects of Perceived Product Quality, Perceived Service
Quality and Perceived Price Fairness on Consumer satisfaction and loyalty (Lien-Ti
Bei and Yu- Ching Chiao 2001) is one of them. This model tries to explain the effect
product quality, service quality and price fairness has on customer satisfaction and
loyalty.

2.2.2.5 The Integrated Model

The integrated model on the effects of perceived quality, perceived service quality
and perceived price fairness on consumer satisfaction and loyalty was conceptualized
by Lien-Ti Bei and Yu-Ching Chiao in 2001. They tried to come up with a model that
was different from other brand loyalty models which linked product quality and
service quality as direct antecedents of brand loyalty while influencing customer
loyalty. The model was developed also to suit the Taiwan marketing environment in
which the researchers belonged to.

Product Perceived Product

Quality Consumer
Quality Satisfaction

Service Perceived service

Quality Quality

Price Consumer
Perceived Price Loyalty
Fairness
25
Figure 6: The Integrated Model

In Figure 6, perceived product and service quality and perceived price fairness are all
antecedents of Product quality, service quality and price respectively while perceived
product quality, perceived service quality and perceived price fairness are all
antecedents of consumer satisfaction and consumer loyalty.
Unlike other models, the integrated model proposes that perceived product quality,
perceived service quality and perceived price fairness may lead to consumer loyalty
without necessarily leading first to satisfaction and then to loyalty. This model brings
about a variation to other product quality and brand loyalty models. It illustrates that
perceived product and service quality may influence brand loyalty without necessarily
having to lead to satisfaction before finally moving on to consumer loyalty.
2.3 Strenghts and Weaknesses
The successes achieved by the SCSB (Fornell 1992) and ASCI (Fornell et al 1996)
models have led to the development of similar customer index models in other
countries like, the European Customer Satisfaction Index (ECSI) model, the
Norwegian Customer Satisfaction Barometer amongst others.
Strengths
These customer satisfaction models clearly depict the transition from customer
expectations, perceived quality to brand loyalty. The SCSB, ASCI and ESCI models
all show without doubt the relationship between product quality, customer
satisfaction and brand loyalty. These models clearly show the phases that lead to
customer loyalty or customer complaints; that is they show clearly factors that
influence customer loyalty.
Weaknesses
These customer satisfaction models fail to show the extent to which product quality
influences brand loyalty, it also fails to add other factors like Market Inertia which
may be a strong reason why people are loyal to a brand. Hence, it is important to
come up with a model that clearly illustrates the degree to which product quality

26
influence brand loyalty. However, the marketing environment has become highly
competitive and customers have become harder to please thus, making the models
somewhat inappropriate for the today’s marketing environment. This means that for
these customer satisfaction index models to be appropriate they have to keep evolving
with the marketing environment to suit the current Nigerian environment.

The Nigerian telecommunications sector over the years, have continued to grow while
its environment has become highly saturated with existing and new operators looking
for ways to sustain and win customers. So far, there is still scanty literature on brand
loyalty as a whole and the factors that affect brand loyal in the Nigerian environment.
Most of already existing literature on brand loyalty and factors that drive brand
loyalty are those written by foreign scholars for the foreign marketing environment.
The Customer index models discussed above may not cover the Nigerian
environment totally so there is need to come up with a model that suitably fits the
Nigerian environment. The degree to which product quality influences brand loyalty
is an important context that cannot be left out from the brand loyalty construct
especially in the Nigerian telecommunications sector which is a highly competitive
environment. This is one of the areas in which these models fall short because the
extent to which perceived quality or value influences brand loyalty is not represented.
Hence, it is important to come up with a model that clearly explains or represents the
brand loyalty construct in the Nigerian telecommunications sector.

2.4 Problem of Study and Emerging Overall Research Question

In this chapter, product quality model were reviewed to explain the relationship
between the product quality and brand loyalty construct. These models clearly
illustrated the relationship between product quality, customer satisfaction and brand
loyalty. However, a problem emerged after the review of these models which led to
the generation of an overall research question and problem. The review of these
models pointed out the lack of a product quality model that illustrates the extent to

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which product quality influences brand loyalty. To this effect, this research question
arose: To what degree does product quality influence brand loyalty?

2.5 Summary
Customers have certain expectations before they decide to purchase a product or
brand. These expectations are expected to be met. It is the extent to which these
expectations are met that determines the way the customer will judge the quality of
that product or brand.
In this chapter, three models where reviewed; The Swedish Customer Satisfaction
Barometer (SCSB), American Customer Satisfaction Index (ACSI) Model and the
European Customer Satisfaction Index (ECSI) Model. These models clearly
illustrated the relationship between perceived quality and the brand loyalty construct.
These models also illustrated clearly the phases that lead to brand loyalty. The
Models were reviewed and its strengths and weaknesses were highlighted.

The weaknesses in the models highlighted the need for the creation of another model
which clearly states the extent to which product quality influences brand loyalty was
for the Nigerian telecommunications sector.

Brand Loyalty is the first and prerequisite dimension of the entire brand
knowledge system in consumers’ minds, reflecting their ability to identify the brand
under different conditions: the likelihood that a brand name will come to mind and
the ease with which it does so.

Brand Loyalty can be depicted into brand recognition (consumers’ ability to

confirm prior exposure to the brand when given the brand as cue) and brand recall
(consumers’ ability to retrieve the brand when given the product category, the needs
fulfilled by the category, or some other cues).

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 Brand Loyalty is essential in buying decision-making as it is important that
consumers recall the brand in the context of a given specific product category,
awareness increasing the probability that the brand will be a member of the
consideration set. Awareness also affects decisions about brands in the consideration
set, even in the absence of any brand associations in consumers’ minds. In low
involvement decision settings, a minimum level of brand awareness may be sufficient
for the choice to be final. Awareness can also influence consumer decision making by
affecting brand associations that form the brand image.

The outcome of any brand choice can only be known in the future, the
consumer being thus forced to deal with uncertainty. Brand choice could be
considered the central problem of consumer behavior, while the perceived risk
associated to buying decisions is a pivotal aspect of brand choice. Risk is often
perceived to be painful in that it may produce anxiety, in which case it must be dealt
in some manner by the consumer.

All About Branding:

The term brand means different things to the different roles of buyer and
seller, with buyers generally associating brand with a product or service, and
merchants associating brand with identity. Brand can also identify the company
behind the specific product -- that's not just a biscuit, that's Britannia biscuit. This use
of brand puts a "face" behind the name, so to speak, even if the "face" is the result of
advertising copy and television commercials.

This use of brand also says nothing of quality, just the buyer's exposure to the
brand's PR and media hype. For the typical merchant, branding is a way of taking
everything that is good about the company -- positive shopping experience,
professionalism, superior service, product knowledge, whatever the company decides
is important for a customer to believe about the company -- and wrapping these
characteristics into a package that can be evoked by the brand as signifier.

Introduction to Branding:

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 The American Marketing Association defines a brand as “A name, term, sign,
symbol or design or a combination of them, intended to identify the goods and
services of one seller or group and to differentiate them to those for competitors”. A
brand is thus a product or service that’s adds a Dimension that differentiates it in
some way from other products or services designed to satisfy the same need. These
differences may be functional, rational, or tangible- relate to product performance of
the brand.

Branding has been around for centuries as a means to distinguish the goods of
one producer to those of another. The earliest signs of branding can be traced to
Europe where the medieval guilds required that craftsmen put trademarks on their
product to protect themselves and producer against inferior quality substitutes. Also
in fine arts branding began with artists signing their works. Brands today play a
number of important roles that improve the consumer’s lives and enhance the
financial value of firms.

Brands identify the source or maker of the product and allow consumers-
either individual or organizations- to assign responsibility to a particular manufacturer
or distributor. Consumers may evaluate the identical product differently depending
how it is branded. Consumers lean about the brand with its past experience and the
marketing program. As consumers lives becomes more complicated, time starved the
ability of brand to simplify decision making is invaluable. Brands also perform
valuable functions for the firm. First they simplify the product handling and tracing.
Brands help to organize inventory and accounting records. The brand name can be
protected registered trademarks. The intellectual property rights ensure that the firm
can safely invest in the brand and can reap the benefits over a long period of time.

Brands can signal a certain level of quality so that satisfied buyers can easily
choose the product again. Brand loyalty provides predictability and security of
demand for the firm and creates barriers to entry that makes it difficult for other firms
to enter the market. This brand loyalty can translate into willingness to pay higher
price. In this sense branding can be seen as powerful means to secure a competitive

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advantage. Brands represent enormously valuable pieces of legal property that can
influence consumer’s behavior. Strong brand results in better earnings and profit
performance for firms, which in turn, creates greater value for shareholders.

How do you “BRAND” a product? Although firms provide the impetus to

brand creation through marketing programs and other activities, ultimately a brand is
something that resides in the mind of the consumers. A brand is a perpetual identity
that is rooted in reality but reflects the perceptions and perhaps even the ultimate
choice of the consumers. Branding is endowing products and services with the power
of brands. To brand a product, it is necessary to teach the consumers “who” the
product-by giving a name. Branding involves creating mental structures and helping
consumers organize their knowledge about products and services in a way that
clarifies their decision making and in process provides value to the firm.

Branding can be applied virtually anywhere a consumer has a choice. It is possible to

brand:

 A physical good (Nestle soup, Pantene shampoo or Maruti Swift),

 A service (Kingfisher Airlines, TATA AIG medical insurance),

 A store (Big Bazaar, BATA stores,etc),

 A place (The state of Kerala, Pushkar Mela),

 A person (Shahrukh Khan, Sachin Tendulkar),

 An organization (UNICEF or BCCI),

Brand is the proprietary visual, emotional, rational, and cultural image that you
associate with the company or a product. When you think of Volvo, you think of
safety. When you think of Nike, you think of Michael Jordon or ‘Just Do It’. When
you think of IBM, you think of ‘Big Blue’. The fact that you remember the brand
name and have positive associations with that brand makes your product selection
easier and enhances the value and satisfaction you get from product.

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 While Brand X cola or even Pepsi-Cola may win blind taste tests over Coca-Cola,
the fact is that more people buy Coke than any other Cola. The fond memories of
childhood and refreshment that people have when they drink Coke is often more
important than a little bit better cola taste. It I this emotional relationship with brands
that make them so powerful.

Purpose of Branding:

The purpose of branding is to create a powerful and lasting emotional

connection with customers and other audiences. A brand is a set of elements or
“brand assets” that in combination create a unique, memorable, unmistakable, and
valuable relationship between an organization and its customers. The brand is carried
by a set of compelling visual, written and vocal tools to represent the business plan
and intentions of an organization.

Branding is the voice and image that represents your business plan to the
outside world. What your company, products and services stand for should all be
captured in your branding strategy, and represented consistently throughout all your
brand assets and in your daily marketing activities

The brand image that carries this emotional connection consists of the many
manageable elements of branding system, including both visual image assets and
language assets. The process of managing the brand to the business plan is important
not only in “big change situation” where the brand redefinition is required, but also in
the management of routine marketing variables and tactics. This does not have to be a
“ground-up” situation where there are wholesale changes to the business. Rather it is
more common that specific changes to the changes to the business plan are
incremental and the work of the brand strategist and designer is to interpret these
changes and revise the branding strategy and resulting brand assets and define their
use in the full range of marketing variables.

Brand Identity:

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 Brand Identity includes brand names, logos, positioning, brand associations,
and brand personality, brand toons etc. A good brand name gives a good first
impression and evokes positive associations with the brand. A positioning statement
tells what business the company is in, what benefits it provides and why it is better
than the completion? Brand personality adds emotion, culture and myth to brand
identity by the use of a famous spokesperson (Bill Cosby-Jello), a character (Pink
Panther), an animal (the Merrill lynch bull) etc.

Brand associations are the attributes that costumer thinks of when they hear or
see the brand name. McDonalds television are a series of one brand association after
another, starting in yellow arches in the low right corner of the screen and following
with associations of Big Mac, Ronald MacDonald, kids, happy meal, food quality etc.
The first step in creating a brand for your company is branding workshop.

How Do We Determine Our Brand Identity?

Brand has been called the most powerful idea in commercial world, yet few
companies create a brand identity. Do you want your company’s brand identity
created for you by competitors and unhappy customers? Of course not. Our advice to
executives is to research their customers and find the top ranked reasons that the
customers buy their product rather than their competitors. Then, pound that message
in every ad, in every news release, in communications with employees and in every
sales call or media interview. By continuous repetition of messages customer will
think of your product and then buy it.

Tools for Building Brand Identity:

Brand builders use a set of tools to strengthen and project the brand image;
Strong brands typically exhibit an owned word, a slogan, a color, a symbol, and set of
stories.

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Owned Word:

A strong brand name should trigger another word, a favorable one. Here is the
list of brands that own a word:

Slogan:

Many companies successfully added a slogan or tagline to their brand name

which is repeated in every ad they use. Here are some well-known brands slogans,
which people on the street may easily recall or recognize:

COMPANY SLOGAN

British Airways “The world’s favorite airline”

Ford “Quality is our number one job”

LIC “Jeevan ke saath bhi jeevan ke baad bhi”

Colors:

It helps for a company or a brand to use a consistent set of color to and in the
brand recognition. Caterpillar paints all its construction equipments yellow. Yellow is
the color of Kodak film. IBM uses blue in its publications, and IBM is called “Big
Blues”.

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Symbols and Logos:

Companies would be wise to adapt a symbol or logo to use in their

communications. Many companies hire a well-known spokesperson, hoping that his
or her quality transfer to the brand. Nike uses Michael Jordon who has worldwide
recognition and likableness, to advertise its shoes. Sporting goods manufacturers sign
contracts with top athletes to serve as their symbols, even naming the product after
them.

Cartoons and Animations:

A less expensive approach is to develop a character, animated, to etch the brand’s image into
customer’s mind. The advertising agency Leo Burnett has successfully created a number of memorable
animated characters. Here are some well known brand cartoons which people may recognize:

Company Cartoon or Animation

ICICI Prudential Chintamani
Amul Butter Utterly Butterly Girl
McDonalds Ronald
All Out mosquito Repellent Louis
Pillsbury Doughboy
7 Up Fido Dido

Objects:

Still another approach is to choose an object to represent a company or brand.

The travelers’ insurance company uses an umbrella, suggesting that buying insurance
is equivalent to having an umbrella available when it rains. The prudential insurance
company features the rock of Gibraltar, suggesting that buying an insurance is
equivalent to “owing a peace of rock “which is of course, solid ad dependable.
Companies have developed many logos or abstracts, which are easily remembered by
people. Even the way the brand name is written makes a brand recognizable and
memorable.

Brand Effectiveness:

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 With an increase in global competition, branding has become a source of
competitive advantage. In rapidly evolving market for consumer, and industrial
products and services, the source of next generation competency will be branding. In
this briefing we demonstrate how to calculate the brand strength, the price premium
associated with the products categories, and type of customers attracted to the
“Premium Products”. Marketers who match their brand with customers needs will
have a sustainable competitive advantage.

Measuring Brand Effectiveness:

There are many metrics to measure the potential of and actual effectiveness of
brands. The simplest way is to apply the concept of what we call the 4 D’s of
Branding; differentiation, distinctiveness, defendable, digit-able.

 Distinctiveness: your brand should be distinct when compared to your competitors

and to all spoken and visual communications to which your target audiences will be
exposed. The more unique and distinct your communications, the wider the filed of
effective competitive strength it will have. There are simple means to apply to test
the distinctiveness of your brand.

 Differentiation: the brand strategy and brand assets must set you’re offering apart
and clearly articulate the specific positioning intent of your offering.

 Defendable: you will be investing in creating your brand assets and in all cases your
brand must have proprietary strength to keep others from using close
approximations. This applies to your trade names and other proprietary words as
well as to your logos, symbols and other visual assets.

 Digit-able: in most businesses there is strong and growing element of electronic

communications and commerce that dictate all brand assets be leveraged
effectively in tactile and electronics form. This goes for all brand assets.

Much of the brand manager’s work is to build a brand image. But its job doesn’t
stop there. The rand manager needs to make sure that brand experience matches the
brand image. Much can go wrong. A fine brand of canned soup described in a full

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page color ad may be found in dented and dusty condition in the bottom shelf of a
supermarket. The ad describing a gracious hotel chain is belied by the behavior of a
surly concierge.

Building brand therefore calls for more than brand image building. It calls for
managing every brand contact that customer might have with brand. Since all the
employees, distributors and dealers can affect brand experience.

Brand and Reputation:

A brand exists in the mind, or not at all. The mind it exists in may be that of a
customer, a potential customer, an interested observer, a disinterested observer... or
almost anybody.

Awareness of a brand may be irrelevant to any purchasing decision that an

individual may make. People are aware of the Mercedes car brand, but cannot
envisage any circumstance under which they would (could!) buy a Mercedes. They
are aware of Marlboro (and scores of other cigarette brands) but as a non-smoker they
will never convert their awareness into purchase. Male with no children are not
targeted by Pampers or Huggies but still are aware of the brands.

People wear many hats. But are or not a potential customer. People may be an
employee, an investor, a citizen, a husband and so on. They hate McDonald’s
hamburgers but might love their stock market record and therefore be a potential
customer for their stock. They will never buy a Boeing 777 but might be impressed
by the aircraft and favor an airline that flies them. They have no idea what an Intel
chip is, but might be persuaded that it is a good thing to have in my PC and therefore
buy a computer from a company that uses them.

Brand Aware argues that there is no difference between "Brand" and

"Reputation". Some conventional wisdoms state that customers buy brands, but that
investors buy reputations. Those potential employees join companies because of their
reputation, that the media and other "stakeholders" judge a company on its reputation
in some way as a distinct concept from its brand. This part argues that such
distinctions are fallacious for all companies, but especially for single brand

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companies such as a McDonalds, a Coca-Cola, a Compaq or a Shell. These
companies’ reputations are part and parcel of their brand. Their brands are their
reputation.

The Brand:

To any individual a brand (in his mind) is a complex combination of

experiences, beliefs, perceptions and associations that have grown up over time. For
example Coca-Cola is a company brand, a product brand, a service brand and a brand
with a long history. It is a brand which may represent (to any one individual)
diversity, internationality, technical excellence, financial strength etc. etc. It may also
mean insensitivity, environmental pollution, abuse of power and other negative
perceptions.

Perceiving the Brand:

An individual builds up his perceptions of a brand via a wide range of

communications channels. They are as follows:

 Experience: The most powerful influence is experiential. This is when the

individual actually has a "Brand experience". The most obvious are:

 He visits a McDonald’s restaurant or a Shell petrol station.

 He buys a Coca-Cola branded product or service.

 He views a Coca-Cola bottler's facility.

 He visits a corporate website.

 He attends an interview at the company.

 He contacts the company office for information.

 He meets an employee of the company.

 He buys a share in the company, etc.

 Advertising: Over time an individual who lives in a country in which the

company/brand is active, or travels to one on business or vacation, will be

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 exposed to their advertising. This advertising may be in a wide range of
media:

 TV commercials for products and services

 Recruitment ads inviting employment applications

 "Corporate" TV commercials promoting the company's "reputation"

 Web based advertising

 An ad for the company’s branded products or services in a wide

variety of print media.

 Billboards on highways

 Radio

 Point of sale etc.

 Media Reports and Stories: Individuals will be exposed to a wide variety of

reports about companies in the media (print and broadcast) where the editorial
content is only partly influence able by the company (in some cases) or not at
all (in most cases). These stories will come from a variety of primary and
secondary sources: -

 Press releases

 Press conferences

 Reporting of "events"

 Investigative journalism

 Stories passed to the media by third parties (Non governmental

organizations etc.)

 Professional/Business Interest: For some individuals to interface

professionally, or from a specific business need, with famous companies (or to
observe them) is part of their job. They will usually procure their information

39
 from a variety of sources and via a variety of channels of communication.
These individuals have a special interest in the companies and they include: -

 Financial analysts and journalists with an interest in share performance

 Existing or potential suppliers of products and services

 Existing or potential industrial/commercial customers

Building the Brand

The art of marketing is largely art of brand building. When something is not a
brand, it will probably be viewed as a commodity. Then price is the thing that counts.
When price is the only thing that counts then the low cost producer wins. But just
having a brand is not enough. What does the brand name mean? What associations,
performances and expectations does it evoke? What degree of preferences does it
create?

Choosing a Brand Name:

A brand name first must be chosen then its various meanings and promises
must be built up through brand identity work. In choosing a brand name, it must be
consistent with the value positioning of the brand. In naming a product or service the
company may face many possibilities: it could choose name of the person (Honda,
Calvin Klein), location (American airlines), quality (Safety stores, Healthy choice), or
an artificial name (Exxon, Kodak).

Some of the Desirable qualities of a Brand Name:

 It should suggest something about the product benefits.

 It should suggest product qualities such action or color

 It should be easy to pronounce, recognize and remember; short names help a

lot to recognize the product to the customers.

 It should be distinctive.

 It should not carry poor meanings in other countries and languages etc.

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Building Positive Associations:

The best known brand names carry associations. For example, here is a list of
words that people say they associate with McDonalds:

 Kids

 Fun

 Happy Meal

 Ronald Mc. Donald

 Quality

 Toys

In trying to build a rich set of positive associations for a brand, the brand builder
should consider five dimensions that can communicate meaning:

 Attributes: A strong brand should trigger in buyers mind certain attributes.

Thus a Mercedes automobile attributes a picture of well-engineered car that is
durable, rugged and expensive. If a car brand does not trigger any attribute,
then it would be a weak brand.

 Benefits: A strong brand should suggest benefits, not just features. Thus
Mercedes triggers the idea of well performing car that is enjoyable to drive
and prestigious to own.

 Company Values: A strong brand should connote values that the company
holds. Thus Mercedes is proud of its engineers and engineering innovations
and is very organized and efficient in its operations. The fact that it is a
German company adds more pictures in the mind of the buyers about the
character and the culture of the brand.

 Personality: A strong brand should exhibit some personality traits. Thus if

Mercedes were a person we would think of someone who is middle age,

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 serious, well-organized and somewhat authoritarian. If Mercedes were an
animal we might think of lion or its implied personality.

 Users: A strong brand should suggest the type of people who buy the brand.
Thus we would expect Mercedes to draw buyers who are older, affluent and
professional.

In summary, brands when their very name connotes positive attributes, benefits,
company values, personality and users in the buyer’s mind. The brand builder’s job is
to create a brand identity that builds on those dimensions.

Choosing Brand Elements:

Brand elements are those trademarks devices that serve to identify and
differentiate the brand. Most strong brands employ multiple brand elements. Nike has
distinctive “swoosh” logo, the empowering “Just Do It” slogan and the mythological
“Nike” name based on the winged goddess of victory.

Brand element can be chosen to build as much as brand equity as possible.

The test of the brand building ability of these elements is what consumers think or
feel about the product if they only knew about the brand element. A brand element
provides positive contribution to brand equity.

Brand Element Choice Criteria

There are six criteria in choosing brand element. The first three can be
characterized by brand building in terms of how brand equity can be build through
judicious choice of brand element. The latter three are more defensive and are
concerned with how the brand equity contained in the brand element can be leveraged
and preserved in the face of various opportunities and constraints.

 Memorable: How easily is the brand element recalled? How easily

recognized? Is this true at both purchase and consumption? Short brand name
like tide, Nike can help.

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  Meaningful: To what extent is brand element credible and suggestive of the
corresponding category? Does it suggest something about a product ingredient
or a type of person who might use the brand?

 Likeability: How aesthetically appealing does consumers find the brand

element? Is it inherently likeable visually, verbally, and in other ways?
Concrete brand names such as Wheel, Sunsilk etc evoke much imagery.

 Transferable: Can a brand element be used to introduce new products in the

same or different categories? To what extent does the brand element add to
brand equity across geographic boundaries and market segments?

 Adaptable: How adaptable and updatable is the brand element? Betty corker
received 8 makeovers through the years-although she is 75 yrs old, she
doesn’t look a day over 35.

 Protectable: How legally protectable is the brand element? How

competitively protectable? Can it be easily copied? It is important that names
that become synonymous with product categories such as Kleenex, Xerox,
Jell-O, etc retain their trademarks rights and not become generic.

Brand elements can play a number of roles. If consumers do not examine much
information in making their product decisions, brand elements should be easily
recognized and recalled and inherently descriptive and persuasive. Memorable or
meaningful brand elements can reduce the burden on marketing communications to
build awareness and link brand associations. The different associations that arise from
likeability and appeal of the brand elements may also play a critical role in the equity
of brand.

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What is Brand Equity?

There is no universally accepted definition of brand equity. The term means

different things for different companies and products. However, there are several
common characteristics of the many definitions that are used today. From the
following examples it is clear that brand equity is multi-dimensional. There are
several stakeholders concerned with brand equity, including the firm, the consumer,
the channel, and some would even argue the financial markets. But ultimately, it is
the consumer that is the most critical component in defining brand equity. Some
researchers in the field of marketing have defined brand equity as follows:

 Lance Leuthesser, et al (1995) writes that " brand equity represents the value
(to a consumer) of a product, above that which would result for an otherwise
identical product without the brand's name. In other words, brand equity
represents the degree to which a brand's name alone contributes value to the
offering (again, from the perspective of the consumer)."

 The Marketing Science Institute (1988) defines brand equity as, "The set of
associations and behaviors on the part of the brand's customers, channel
members, and parent corporations that permit the brand to earn greater volume
or greater margins than it could without the brand name and that gives the
brand a strong, sustainable, and differentiated advantage over competitors."

Brand Equity can be Defined as Three Distinct Elements:

1) The total value of a brand as a separable asset -- when it is sold or included on

a balance sheet.

2) A measure of the strength of consumers' attachment to a brand.

3) A description of the associations and beliefs the consumer has about the
brand.

Of those three concepts, the first can be classified as "brand valuation," the second
"brand loyalty," and the third "brand description." Brand loyalty will be a factor that
affects the overall brand value, and brand description will usually affect or explain

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some of the brand loyalty. Because of the importance of each of these elements of
brand equity, they will each be briefly explained.

Brand Equity as Brand Value:

Brand value involves actually placing a dollar or rupee value on a brand name.
The reasons for doing this are usually to set a price when the brand is sold and also to
include the brand as an intangible asset on a balance sheet (a practice which is not
used in some countries). While there are many methods for making this measurement,
some of which will be described shortly, it is important to note that there is a
significant difference between an "objective" valuation created for balance sheet
purposes, and the actual price that a brand may get when sold?

A brand is likely to have a much greater value to one purchaser than another
depending on the synergy that exists. For acquisitions, the value of a brand to a
certain purchaser is often estimated through scenario planning. This involves
determining what future cash flows the company could achieve if it owned and took
advantage of the brand.

What this means is that there is no such thing as an absolute value for a brand,
and brand value needs to be considered as only one component of the overall equity
of a brand.

Brand Equity as Brand Loyalty:

Loyalty is a core dimension of brand equity and is a way to gauge the strength of
a brand. It represents a barrier to entry, a basis for a price premium, and time to
respond to competitive innovations. The variety of measures used for brand loyalty
usually is a combination of one or more of the following:

 Price/demand measures-focus on a brand's ability to command a higher price

or make consumers less sensitive to price increases than price increases for
competing brands.

 Behavioral measures-focus on consumers' behavior.

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  Attitudinal measures-focus on general evaluative measures such as 'liking' or
'disliking.'

 Awareness measures-focus on identifying a brand as being associated with a

product category.

 Brand Loyalty and Equity refer to the notion that some brands are "stronger"
or better than others.

An example of this sort of belief is:

“If the businesses were split up, I would take the brands, trademarks and goodwill,
and you could have all the bricks and mortar - and I would fare better than you.”

The optimism for the concept can be stated on the fact that when one would
say as a predictor of future financial performance, brand equity, if reported, would be
valuable for capital marketers and shareholders. Brand equity has the potential to
become the set of measures of business performance that matter most.

The motivation for brand equity comes from the observation that many
marketing efforts "realize" benefits; such as sales or profit and these are accounted for
in the firm’s profit and loss figures. However, there is the possibility that
management might choose between taking realized benefits and "storing" them
future. One of the most common times this argument is used is when discussing the
role of advertising versus sales promotion. You could spend lots of money on
advertising, see no immediate effects, but you could save your job by saying that you
had "built the brand". At least one advertising agency offers to partner companies in
this sort of activity.

So marketing strategies could be putting money into (or out of) the brand
equity bank account. But the question is as always how do we know? That is are we
actually building the brand with all our advertising (or other brand building 4 p’s
decisions e.g., limited / premium distribution rights, high price, fancy packing, after
sales service, extended warranties).So, hopefully you have got the idea - theories
about brand loyalty and equity are used to represent aspects of brand strength.

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 This "strength" can take a number of forms, e.g., consumers predominantly
buying your brand, which might be represented by a high share of category
requirements, or high proportion of sole-buyers.

Consumers saying good things about your brand, e.g., having a positive brand
Attitude, it might be the ability to charge a price premium. It might be the ability to
not be substituted when out of stock. Future strength might be in terms of some sort
of long-term competitive advantage or the ability to sustain brand extensions.

One of the things is that as with many concepts in marketing, is that there are
many different definitions and viewpoints on what exactly brand equity is and how to
measure it. So that is a problem. We need to be clear just what people mean when
they talk about brand equity or brand loyalty, or building brands.

Brand Loyalty / Equity Advocates:

One of the ruses used by proponents of brand equity or loyalty is to claim that
these measures do not capture all the important aspects of brands strength. But this is
an evasion. We want to be able to detect that our efforts are doing something to the
brand, and so we need to know ways that this might show up in.

Brand Equity as Brand Description

Brand description, the final component of brand equity, concerns the actual
attributes of the brand. These attributes or associations are major creators of brand
loyalty. A wide variety of techniques exist for matching consumer associations with
perceptions of a brand. These techniques can be both qualitative and quantitative.
They work by getting the respondent to link each brand with pictures or words. These
attributes then can be measured with multi-dimensional scaling to position the
attributes relative to one another.

Qualitative Measures of Brand Equity:

The Brand Equity Ten are ten sets of measures grouped into five categories,
which attempt to gauge the strength of a brand. The first four categories represent
customer perceptions of the brand along the four dimensions of brand equity- loyalty,

47
perceived quality, associations and awareness. The fifth includes two sets of market
behavior measures.

 Loyalty

Price Premium: A basic indicator of loyalty is the amount a customer will pay
for a product in comparison to other comparable products. A price premium
can be determined by simply asking consumers how much more they would
be willing to pay for the brand.

Customer Satisfaction: A direct measure of customer satisfaction can be

applied to existing customers. The focus can be the last use experience or
simply the use experience from the customer's view.

 Perceived Quality and Leadership Measures

Perceived Quality: is one of the key dimensions of brand equity and has been
shown to be associated with price premiums, price elasticities, brand usage
and stock return. It can be calculated by asking consumers to directly compare
similar brands.

Leadership/Popularity: has three dimensions. First, if enough consumers are

buying into the brand concept it must have merit. Second, leadership often
taps innovation within a product class. Third, leadership taps the dynamics of
consumer acceptance. Namely, people are uneasy swimming against the tide
are a likely to buy a popular product. This can be measured by asking
consumers about the product's leadership position, its popularity and its
innovative qualities.

 Associations/ Differentiation Measures

Perceived Value: This dimension simply involves determining whether the

product provides good value for the money and whether there are reasons to
buy this brand over competitive brands.

48
 Brand Personality: This element is based on the brand-as-person perspective.
For some brands, the brand personality can provide links to the brands
emotional and self-expressive benefits.

Organizational Associations: This dimension considers the type of

organization that lies behind the brand.

 Awareness Measures

Brand awareness: reflects the salience of the product in the consumer's mind
and involves various levels including recognition, recall, brand dominance,
and brand knowledge and brand opinion.

 Market Behavior Measures

Market Share: The performance of a brand as measured by market share often

provides a valid and dynamic reflection of the brand's standing with
customers.

Price and Distribution Indices: Market share can prove deceptive when it
increases as a result of reduced prices or promotions. Calculating market price
and distribution coverage can provide or more accurate picture of the
product's true strength. Relative market price can be calculated by dividing the
average price at which the product was sold during the month by the average
price at which all the brands were sold.

Managing Brand Equity:

Consistency is the key to successfully building and managing brand equity.

Having a long-term outlook and projecting a consistent image of your brand to the
customer will maximize the results of building brand equity. It is critical for managers
to realize that brand equity can have positive as well as negative effects on a product
or company. In the end, it is the customer that truly defines what brand equity means.

If management feels it is necessary to change the direction of a brand or

change a product it must be careful not to change too quickly. There are many
examples of companies that have changed a product or brand too much or too

49
quickly. On these occasions, consumers met changes with adverse reactions. The
most famous example is Coca-Cola. They changed the formula of their flagship
product Coke, and consumers reacted so poorly to the new product that the old
formula was reintroduced and the new formula eventually was discontinued. The
consumer through the product experiences brand equity. The product has certain
attributes or characteristics that deliver the equity to the consumer. If any of these
attributes are changed or eliminated, the equity delivered to the consumer is also
changed.

Managing brand equity is a continual process with long-term implications.

Unfortunately, many brand managers are forced to focus on short-term goals such as
market share and profits. Many programs that are implemented to boost short-term
sales or market share may be detrimental to the long-term viability of the brand. For
example, Proctor & Gamble has started to test market a program to move away from
using coupons to a system of every day low prices. This is, in part, because
consumers may become loyal to the coupon or promotion and not to the product
itself. Constant promotional programs erode margins and eventually brand loyalty.
Ultimately, brand equity is damaged.

In 1988, Graham Phillips, Chairman of Ogilvy and Mather Worldwide, said,

"I doubt that many would welcome a commodity marketplace in which one competed
solely on price, promotion and trade deals, all of which can be easily duplicated by
competition. This would lead to ever decreasing profits, decay, and eventual
bankruptcy. About the only aspect of the marketing mix that cannot be duplicated is a
strong brand image." This quote clearly demonstrates the importance of managing
brand equity. In many categories, brand equity is the only point of differentiation
between products.

Many people may think that building and maintaining brand equity is solely
the responsibility of brand managers, but it is actually a cross-functional team effort.
Financial managers are important because they can fully analyze the costs of
maintaining and building brand equity. For example, launching a new brand is

50
extremely consuming in terms of money and time. It may be more cost effective to
extend a current brand than introduce a new brand. Marketing research is critical for
many obvious reasons. It develops most, if not all, of the research and data that
companies will use for deciding strategic issues. Marketing research can also help
determine how brand equity is actually measured. Once a definition of brand equity is
established, the responsibility of tracking.

The World Strongest Brand Share 10 Attributes:

1. The brand excels at delivering the benefits consumers truly desire.

2. The brand stays relevant.

3. The pricing strategy is based on consumer perceptions of value.

4. The brand is properly positioned.

5. The brand is consistent.

6. The brand portfolio and hierarchy makes sense.

7. The brand makes use of and co-ordinates a full repertoire of marketing

activities to build equity.

8. The brand is given proper, sustained support.

9. The brand’s manager understands what the brand means to customers.

10. The company monitors source of brand equity.

Branding benefits buyers as well as sellers in the following manner:

To Buyer:

 Help buyers identify the product that they like/dislike.

 Identify marketer

 Helps reduce the time needed for purchase.

 Helps buyers evaluate quality of products especially if unable to judge

products characteristics.

51
  Helps reduce buyers’ perceived risk of purchase.

 Buyer may derive a psychological reward from owning the brand, i.e., Rolex
or Mercedes.

To Seller:

 Differentiate product offering from competitors

 Helps segment market by creating tailored images, i.e., Contact lenses

 Brand identifies the companies’ products making repeat purchases easier for
customers.

 Reduce price comparisons

 Brand helps firm introduce a new product that carries the name of one or more
of its existing products...half as much as using a new brand, lower co. designs,
advertising and promotional costs. Example, BPL telephones.

 Easier cooperation with intermediaries with well known brands

 Facilitates promotional efforts.

 Helps foster brand loyalty helping to stabilize market share.

 Firms may be able to charge a premium for the brand.

52
 CHAPTER III

INDUSTRY PROFILE

&

COMPANY PROFILE

53
INDUSTRY PROFILE

The Automobile Industry is one of the fastest growing sectors in India. The
increase in the demand for cars, and other vehicles, powered by the increase in the
income is the primary growth driver of the automobile industry in India. The Indian
automobile sector is far from being saturated, leaving ample opportunity for volume
growth. Post liberalization in 1991, Indian automobile sector has been aptly described
as the sunrise sector. Owing to its vertical and horizontal integration with other key
segments of the economy, the industry is said to be a major growth driver. A steady
growth in the sector has attracted heavy investments from various foreign majors
through direct investments or private equity.

The Indian auto industry became the 4th largest in the world with sales increasing 9.5
per cent year-on-year to 4.02 million units (excluding two wheelers) in 2017. It was
the 7th largest manufacturer of commercial vehicles in 2017. The automobile industry
is supported by various factors such as availability of skilled labour at low cost,
robust R&D centres and low cost steel production. The industry also provides great
opportunities for investment and direct and indirect employment to skilled and
unskilled labour.

Indian automotive industry (including component manufacturing) is expected to reach

Rs 16.16-18.18 trillion (US$ 251.4-282.8 billion) by 2026. Two-wheelers are
expected to grow 9 per cent in 2018.

Segmentation of Automobile Industry

The automobile industry comprises of Heavy vehicles (trucks, buses, tempos,

tractors); passenger cars; Two-wheelers; Commercial Vehicles; and Three-wheelers.
Following is the segmentation that how much each sector comprises of whole Indian
Automobile Industry.

54
Industry life cycle

The industrial life cycle is a term used for classifying industry life over time. Industry
life cycle classification generally groups industries into one of four stages: pioneer,
growth, maturity and decline. In the pioneer phase, the product has not been widely
accepted or adopted. Business strategies are developing, and there is high risk of
failure. However, successful companies can grow at extraordinary rates. The Indian
automobile sector has passed this stage quite successfully.

The industry is growing rapidly, often at an accelerating rate of sales and earnings
growth. Indian Automotive Industry is booming with a growth rate of around 15 %
annually. The growth rate of the automobile industry in India is greater than the GDP
growth rate of the economy, so the automobile sector can be very well be said to be in
the growth phase.

SWOT analysis:

A scan of the internal and external environment is an important part of the strategic
planning process. Environmental factors internal to the firm usually can be classified
as strengths (S) or weaknesses (W), and those external to the firm can be classified as
opportunities (O) or threats (T). Such an analysis of the strategic environment is
referred to as a SWOT analysis.

SWOT analysis of the Indian automobile sector gives the following points:

1. Strengths

 Large domestic market

 Sustainable labor cost advantage

 Competitive auto component vendor base

 Government incentives for manufacturing plants

55
  Strong engineering skills in design etc

2. Weaknesses

 Low labor productivity

 High interest costs and high overheads make the production uncompetitive

 Various forms of taxes push up the cost of production

 Low investment in Research and Development

 Infrastructure bottleneck

3. Opportunities

 Increasing challenges in consumer demands, technology development, and

globalization.

 Heavy thrust on mining and construction activity

 Increase in the income level

 Cut in excise duties

4. Threats

 Ignorance of Research & development

 Rising interest rates

 Cut throat competition

56
COMPANY PROFILE
Varun Motors Private Limited is an unlisted private company incorporated on 22
November, 1993. It is classified as a private limited company and is located in
Visakhapatnam, Andhra Pradesh. It's authorized share capital is INR 3.50 cr and the
total paid-up capital is INR 1.33 cr.

Varun Motors Private Limited's operating revenues range is Over INR 500 cr for
the financial year ending on 31 March, 2022. It's EBITDA has increased by 40.60
% over the previous year. At the same time, it's book networth has increased by
45.18 %. Other performance and liquidity ratios are available here.

Description: The company operates as a car retailer. It offers buying and selling of
old,new, and used cars.

Products & Services: Used car, New car

Category: Distributer

The current status of Varun Motors Private Limited is - Active.

The last reported AGM (Annual General Meeting) of Varun Motors Private Limited,
per our records, was held on 30 September, 2022.

Varun Motors Private Limited has seven directors - Varun Dev Vallurupalli, Prabhu
Kishore Vallurupalli, and others.

The Corporate Identification Number (CIN) of Varun Motors Private Limited is

U50100AP1993PTC016615. The registered office of Varun Motors Private Limited
is at # 7-8-1/1, Varun Towers, Kasturba Marg, Siripuram, Visakhapatnam, Andhra
Pradesh.

REGISTERED DETAILS - VARUN MOTORS PRIVATE LIMITED

CIN

57
U50100AP1993PTC016615
INCORPORATION DATE / AGE
22 November, 1993 / 31 yrs
LAST REPORTED AGM DATE
30 September, 2022

AUTHORIZED CAPITAL
INR 350.0 Lacs
PAIDUP CAPITAL
INR 132.9 Lacs
INDUSTRY*
Trading

TYPE
Unlisted Private Company
CATEGORY
Company limited by Shares
SUBCATEGORY
Non-govt company

EMAIL ADDRESS
Login for email address. This is to prevent spam.
WEBSITE
Website not known. Click here to let us know.
REGISTERED ADDRESS
# 7-8-1/1, Varun Towers
Kasturba Marg, Siripuram
Visakhapatnam - 530003
Andhra Pradesh – India

58
 FINANCIAL REPORT - VARUN MOTORS PRIVATE LIMITED

Here is a summary of financial information of VARUN MOTORS PRIVATE

LIMITED for the financial year ending on 31 March, 2022.
 Revenue / turnover of VARUN MOTORS PRIVATE LIMITED is Over INR
500 cr
 Net worth of the company has increased by 45.18 %
 EBITDA of the company has increased by 40.60 %
 Total assets of the company has increased by 57.01 %
 Liabilities of the company has increased by 70.91 %

59
In 1982, Suzuki of Japan and Maruti Udyog Ltd. signed a license and joint venture
agreement (JVA). Initially, Maruti Suzuki was primarily an automobile importer.
Maruti was granted permission to import two Suzuki vehicles that were completely
assembled in the first two years of India's closed market, with an initial target of
using just 33% domestic components. This greatly displeased the nearby
manufacturers. There were some worries that the Indian market wouldn't support
Maruti Suzuki's relatively high production levels, and the government even
considered changing the petrol tariff and decreasing the excise fee to increase sales.
[13]
Local production commenced in December 1983 with the introduction of
the SS30/SS40 Suzuki Fronte/Alto-based Maruti 800.[14] In 1984, the Maruti Van with
the same three-cylinder engine as the 800 was released and the installed capacity of
the plant in Gurgaon reached 40,000 units.

The Suzuki SJ410-based Gypsy, a 970 cc 4-wheel drive off-road vehicle, was
introduced in 1985. The 100,000th car manufactured by the firm was the 796 cc
hatchback Suzuki Alto (SS80), which succeeded the original 800 in 1986. [15] In 1987,
the company started exporting to western markets, when a lot of 500 cars were sent to
Hungary. By 1988, the capacity of the Gurgaon plant was increased to 100,000 units
per annum.

Market liberalisation

In 1989, the Maruti 1000 was introduced and the 970 cc, three-box was India's first
contemporary sedan. By 1991, 65 percent of the components, for all vehicles
produced, were indigenized. After the liberalization of the Indian economy in 1991,
Suzuki increased its stake in Maruti to 50 percent, making the company a 50-50 joint
venture with the government of India as the other stakeholder.

In 1993, the Zen, a 993 cc engine hatchback was launched, and in 1994 the 1,298
cc Esteem sedan was introduced. Maruti produced its 1 millionth vehicle since the
commencement of production in 1994. Maruti's second plant was opened with an
annual capacity reaching 200,000 units. Maruti launched a 24-hour emergency on-
road vehicle service. In 1998, the new Maruti 800 was released, being the first change

60
in design since 1986. Zen D, a 1,527 cc diesel hatchback, Maruti's first diesel vehicle,
and a redesigned Omni were introduced. In 1999, the 1.6-litre Maruti Baleno three-
box sedan and Wagon R were also launched.

In 2000, Maruti became the first car company in India to launch a call center for
internal and customer services. The new Alto model was released. In 2001, Maruti
True Value, selling and buying used cars was launched. In October of the same year,
the Maruti Versa was launched. In 2002, Esteem Diesel was introduced. Two new
subsidiaries were also started: Maruti Insurance Distributor Services and Maruti
Insurance Brokers Limited. Suzuki Motor Corporation increased its stake in Maruti to
54.2 percent.

In 2003, the new Suzuki Grand Vitara XL-7 was introduced while the Zen and the
Wagon R were upgraded and redesigned. The four millionth Maruti vehicle was built
and they entered into a partnership with the State Bank of India. Maruti Udyog Ltd.
was listed on BSE and NSE after a public issue, which was oversubscribed tenfold. In
2004, the Alto became India's best-selling car overtaking the Maruti 800 after nearly
two decades. The five-seater Versa 5-seater, a new variant, was created while the
Esteem was re-launched. Maruti Udyog closed the financial year 2003–04 with an
annual sale of 472,122 units, the highest ever since the company began operations,
and the fiftieth lakh (5 millionth) car rolled out in April 2005. The 1.3-litre Suzuki
Swift five-door hatchback was introduced in 2005.[16]

In 2006 Suzuki and Maruti set up another joint venture, "Maruti Suzuki Automobiles
India", to build two new manufacturing plants, one for vehicles and one for engines.
[16]
Cleaner cars were also introduced, with several new models meeting the
new Bharat Stage III emission standards.[16] In February 2012, Maruti Suzuki sold its
ten millionth vehicle in India.[14] In July 2014 it had a market share of more than 45%.
[17]
In May 2015, the company produced its fifteen millionth vehicle in India, a Swift
Dzire.[18]

61
On 25 April 2019, Maruti Suzuki announced that it would phase out production
of diesel cars by 1 April 2020, when the Bharat Stage VI emission standards come
into effect. The new standards would require a significant investment from the
company to upgrade its existing diesel engines to comply with the more stringent
emission standards. Chairman R.C. Bhargava stated, "We have taken this decision so
that in 2022 we are able to meet the corporate average fuel efficiency (CAFE) norms
and a higher share of CNG vehicles will help us comply with the norms. I hope the
union government's policies will help grow the market for CNG vehicles." Diesel cars
accounted for about 23 percent of Maruti Suzuki's annual sales.[19]

The company plans to launch its first electric car in the second half of 2021, the
Maruti Suzuki WagonR Electric,[20] and a test mule of the same has been spotted
several times recently.

Joint venture-related issues[edit]

Relationship between the Government of India, under the United Front

(India) coalition and Suzuki Motor Corporation over the joint venture was a point of
heated debate in the Indian media until Suzuki Motor Corporation gained the
controlling stake. This highly profitable joint venture that had a near monopolistic
trade in the Indian automobile market and the nature of the partnership built up till
then was the underlying reason for most issues. The success of the joint venture led
Suzuki to increase its equity from 26% to 40% in 1987, and to 50% in 1992, and
further to 56.21% as of 2013.[21] In 1982, both the venture partners entered into an
agreement to nominate their candidate for the post of managing director and every
managing director would have a tenure of five years.[22][23]

62
Manufacturing facilities[edit]

Maruti Suzuki has two manufacturing facilities in Haryana (Gurugram and Manesar),
and one manufacturing complex in Gujarat wholly owned by parent
company Suzuki which supplies its entire production to Maruti Suzuki. All
manufacturing facilities have a combined production capacity of 2,250,000 vehicles
annually (1.5 million from Maruti Suzuki's two plants and 750,000 from Suzuki
Motor Gujarat).

The Gurugram manufacturing facility has three fully integrated manufacturing plants
and is spread over 300 acres (1.2 km2).[24] The Gurgaon facilities also manufacture
240,000 K-Series engines annually. The Gurugram facility manufactures the Alto
800, WagonR, Ertiga, XL6, S-Cross, Vitara Brezza, Ignis, and Eeco. The Gurugram
facility also assembles the Jimny starting from January 2021 solely for export
markets. It was reported the Indian-assembled Jimny will be exported to African
markets and countries in the Middle East.[25]

The Manesar manufacturing plant was inaugurated in February 2007 and is spread
over 600 acres (2.4 km2).[24] Initially, it had a production capacity of 100,000 vehicles
annually but this was increased to 300,000 vehicles annually in October 2008. The
production capacity was further increased by 250,000 vehicles taking the total
production capacity to 800,000 vehicles annually. [26] The Manesar plant produces
the Alto, Swift, Ciaz, Baleno and Celerio. On 25 June 2012, Haryana State Industries
and Infrastructure Development Corporation demanded Maruti Suzuki pay an
additional ₹235 crore for enhanced land acquisition for its Haryana plant expansion.
The agency reminded Maruti that failure to pay the amount would lead to further
proceedings and vacating the enhanced land acquisition.[27]

In 2012, the company decided to merge Suzuki Powertrain India Limited (SPIL) with
itself.[28] SPIL was started as a JV by Suzuki Motor Corp. along with Maruti Suzuki.
It has the facilities available for manufacturing diesel engines and transmissions. The

63
demand for transmissions for all Maruti Suzuki cars is met by the production from
SPIL.

In 2017, the new Suzuki Motor Gujarat facility was opened. This third facility is not
owned by Maruti Suzuki, but instead wholly owned by Suzuki Motor Corporation.
Despite that, the plant supplied vehicles to Maruti without any additional cost.
Located in Hansalpur, Ahmedabad, the plant has a total annual capacity of 750,000
units.

In November 2021 Maruti Suzuki announce to set up of a big plant in IMT

Kharkhoda in Sonipat district across 900 acres with an investment of ₹18,000 crores.
[29]

Haryana State Industrial and Infrastructure Development Corporation gives 900 acres
of land to Maruti Suzuki for setting up a new plant in Industrial Model Township
at Kharkhoda, Haryana.[30]

In August 2022 Prime Minister of India Narendra Modi virtually laid the foundation
stone of Maruti Suzuki's new manufacturing plant in Kharkhoda. It will be one of the
largest automobile manufacturing plant in the world with the capacity of making a
million cars per year.[31][32]

The Maruti Suzuki's Gurugram manufacturing facility will shift to new

manufacturing facility in Kharkhoda, Haryana will have four manufacturing plants in
which a million cars will be produced annually and the Kharkhoda, Haryana plant
will be third largest car producing facility in world.[33]

Controversies[edit]

Industrial relations[edit]

Since its founding in 1983, Maruti Udyog Limited has experienced problems with its
labour force. The Indian labour it hired readily accepted Japanese work culture and
the modern manufacturing process. In 1997, there was a change in ownership, and

64
Maruti became predominantly government controlled. Shortly thereafter, conflict
between the United Front Government and Suzuki started. In 2000, a major industrial
relations issue began and employees of Maruti went on an indefinite strike,
demanding among other things, major revisions to their wages, incentives and
pensions.[34][35]

Employees used slowdown in October 2000, to press a revision to their incentive-

linked pay. In parallel, after elections and a new central government led by NDA
alliance, India pursued a disinvestment policy. Along with many other government
owned companies, the new administration proposed to sell part of its stake in Maruti
Suzuki in a public offering. The worker's union opposed this sell-off plan on the
grounds that the company will lose a major business advantage of being subsidised by
the Government, and the union has better protection while the company remains in
control of the government.[34][36]

The standoff between the union and the management continued through 2001. The
management refused union demands citing increased competition and lower margins.
The central government privatized Maruti in 2002 and Suzuki became the majority
owner of Maruti Udyog Limited.[37][38]

Manesar violence[edit]

On 18 July 2012, Maruti's Manesar plant was hit by violence. According to Maruti
management, the production workers attacked supervisors and started a fire that killed
company's General Manager of Human Resources Avineesh Dev and injured 100
other managers, including two Japanese expatriates. The workers also allegedly
injured nine policemen.[39][40] However Maruti Suzuki Workers Union (MSWU)
President Sam Meher alleged that management ordered 300 hired security guards to
attack the workforce during the violence.[41] The incident is the worst-ever for Suzuki
since the company began operations in India in 1983.[42]

Since April 2012, the Manesar union had demanded a three-fold increase in basic
salary, a monthly conveyance allowance of ₹10,000, a laundry allowance of ₹3,000,

65
a gift with every new car launch, and a house for every worker who wants one, or
cheaper home loans for those who want to build their own houses. [43][44] According to
the Maruti Suzuki Workers Union a supervisor had abused and made discriminatory
comments to a low-caste worker, Jiya Lal. [45] These claims were denied by the
company and the police.[40] Maruti said the unrest began, not over wage discussions,
but after the workers' union demanded the reinstatement of Jiya Lal who had been
suspended for allegedly beating a supervisor.[42] The workers claim harsh working
conditions and extensive hiring of low-paid contract workers which are paid about
$126 a month, about half the minimum wage of permanent employees. [45] On 27 June
2013, an international delegation from the International Commission for Labor Rights
(ICLR) released a report alleging serious violations of the industrial right of workers
by the Maruti Suzuki management.[46] Company executives denied harsh conditions
and claim they hired entry-level workers on contracts and made them permanent as
they gained experience.[43] Maruti employees currently earn allowances in addition to
their base wage.[47]

The police, in its First Information Report (FIR), claimed on 21 July that Manesar
violence is the result of a planned violence by a section of workers and union leaders
and arrested 91 people.[48][49] Maruti Suzuki in its statement on the unrest,
[50]
announced that all work at the Manesar plant has been suspended indefinitely.
[42]
The shut down of Manesar plant is leading to a loss of about ₹75 crore [51] per day.
[52]
On 21 July 2012, citing safety concerns, the company announced
a lockout under The Industrial Disputes Act, 1947 pending results of an inquiry the
company has requested of the Haryana government into the causes of the disorder.
Under the provisions of The Industrial Disputes Act for wages, the report claimed,
employees are expected to be paid for the duration of the lockout. [51] On 26 July 2012,
Maruti announced employees would not be paid for the period of lock-out in
accordance with Indian labour laws. The company further announced that it will stop
using contract workers by March 2013. The report claimed the salary difference
between contract workers and permanent workers has been much smaller than initial
media reports – the contract worker at Maruti received about ₹11,500 per month,

66
while a permanent worker received about ₹12,500 a month at start, which increased
in three years to ₹21,000-₹22,000 per month.[53] In a separate report, a contractor who
was providing contract employees to Maruti claimed the company gave its contract
employees[54] the best wage, allowances and benefits package in the region.[55]

Shinzo Nakanishi, managing director and chief executive of Maruti Suzuki India, said
this type of violence has never happened in Suzuki Motor Corp's global operations in
Hungary, Indonesia, Spain, Pakistan, Thailand, Malaysia, China and the Philippines.
Nakanishi apologised to affected workers on behalf of the company, and in press
interview requested the central and Haryana state governments to help stop further
violence by legislating decisive rules to restore corporate confidence amid emergence
of this new 'militant workforce' in Indian factories. He announced, "we are going to
de-recognise Maruti Suzuki Workers' Union and dismiss all workers named in
connection with the incident. We will not compromise at all in such instances of
barbaric, unprovoked violence." He also announced Maruti plans to continue
manufacturing in Manesar, that Gujarat was an expansion opportunity and not an
alternative to Manesar.[56][57]

The company dismissed 500 workers accused of causing the violence and re-opened
the plant on 21 August, saying it would produce 150 vehicles on the first day, less
than 10% of its capacity. Analysts said that the shutdown was costing the company 1
billion rupees ($18 million) a day and costing the company market share. [58] In July
2013, the workers went on hunger strike to protest the continuing jailing of their
colleagues and launched an online campaign to support their demands.[59]

A total of 148 workers were charged with the murder of Human Resources Manager
Avineesh Dev. The court dismissed charges against 117 of the workers. On 17 March
2017, 31 workers were found guilty of variety of offences. 18 were convicted on
charges of rioting, trespassing, causing hurt and other related offences under Indian
Penal Code sections. The remaining 13 workers were sentenced to life in
imprisonment after being found guilty of the murder of General Manager of Human
Resources Avineesh Dev. Twelve of the thirteen sentenced were office-bearers of the

67
Maruti Suzuki Workers Union at the time of the alleged offences. The prosecution
had sought the death penalty for the thirteen.[60]

Both prosecution and defence have announced they will appeal against the sentences.
Defence counsel Vrinda Grover stated, "We will file appeals against all convictions in
the HC. The evidence, as it stands, cannot withstand legal scrutiny. There is no
evidence to link these workers to the murder. The 13 who have been convicted, it’s
important to remember that they were the leaders of the union. Therefore, it is clear
that this is targeted framing of these persons. We hope for justice in the superior
court".[61]

The Maruti Suzuki Workers Union is continuing to organise industrial action and
protests calling for the workers to be released and criticising the judgement and
sentences an unjust.[62] An international appeal for the release of the workers has been
made by the International Committee for the Fourth International (ICFI) and other
organisations such as the People's Alliance for Democracy and Secularism.[63][64]

Automotive safety[edit]

Maruti Suzuki's has been criticized for compromising safety in their products by
automotive enthusiasts, journalists, and the Global NCAP, as they are made lighter in
terms of kerb weight to achieving higher fuel economy. Starting 2014, several of their
made for India cars were crash tested at Global NCAP, most of which have given
disappointing results. Cars like Alto, Swift, Celerio, S-Presso (with driver's airbag),
and Eeco which had no safety features like airbags were awarded 0 stars, while
Wagon-R and Swift (2018 model year) which had dual front airbags were awarded 2
stars out of 5. Only the Vitara, Brezza (4 stars) and Ertiga (3 stars) have been awarded
decent safety ratings.[65] Though Maruti Suzuki claimed that they were following the
safety standards mandated by the Government of India, it however only implied with
the safety features included in their cars and not the strong body shell or build quality
which suffers the impact of the crash. [66] Maruti Suzuki has also come under fire for

68
discrimination with customers in India, by making cars safe meant for exports to
European and African markets.[67]

The chairman, RC Bhargava stated that "If carmakers incorporate such features in
even entry-level cars, obviously the price would go up, which would lead consumers
to opt for two-wheelers, which would be more unsafe", which attracted criticism.
[68]
The company, in February 2020, decided not to send their cars to Global NCAP
for testing, as they only believe in the Safety Standards set by the Government of
India.[69] Following the crash test results of S-Presso, Alejandro Furas, Secretary
General of Global NCAP said, “It is very disappointing that Maruti Suzuki, the
manufacturer with the largest share of the Indian market, offers such low safety
performance for Indian consumers. Domestic manufacturers
like Mahindra and Tata have demonstrated high levels of safety and protection for
their customers, both achieving five star performance. Surely it’s time for Maruti
Suzuki to demonstrate this commitment to safety for its customers?” Alongside,
David Ward, President of the Towards Zero Foundation said, "We have seen
important progress on car safety in India, with new legislation introduced by the
government and manufacturers like Mahindra and Tata accepting the Global NCAP
five star challenge and producing models which go well beyond minimum regulatory
requirements. There is no place for zero rated cars in the Indian market. It remains a
great disappointment that an important manufacturer like Maruti Suzuki does not
recognize this."[70]

For FY 2022 and 2023, Global NCAP crash tested the Swift, S-Presso, Ignis, and
Wagon-R received 1-star rating, while the Alto K10 received 2-star rating. [71] While
these cars came with basic safety features such as ABS and Dual Front Airbags, as
mandated by the Government of India, the body structure was rated unstable with
inability to withstand further loads.[72] Maruti Suzuki has faced ire by auto enthusiasts
and media for prioritizing sales over safety by pricing the unsafe cars much lower
than competitors.[73]

69
Anti-competitive dealer policies[edit]

In Aug 2021, Maruti Suzuki was fined ₹200 Crore (US$28.57 million) by
the Competition Commission of India (CCI) for implementing its Discount Control
Policy that restrains dealers from offering customer discounts beyond those
prescribed by the carmaker.[74][75][76]

Models[edit]
Current models[edit]
Model Current model
India Deal
Body n er Note
style introd outle s
Na uction Introd Update t
Image
me uction /facelift

Hatchba Alto 2000 (as

2022 — Arena
ck K10 Alto)

S-
Press 2019 2019 — Arena
o

Cele 2014 2021 — Arena

rio

70
 Model Current model
India Deal
Body n er Note
style introd outle s
Na uction Introd Update t
Image
me uction /facelift

Wag
1999 2019 2022 Arena
on R

Ignis 2017 2017 2019 Nexa

Swift 2005 2017 2021 Arena

Bale
2015 2022 — Nexa
no

71
 Model Current model
India Deal
Body n er Note
style introd outle s
Na uction Introd Update t
Image
me uction /facelift

2008 (as
Dzir
Swift 2018 2020 Arena
e
Dzire)

Sedan

Ciaz 2014 2014 2018 Nexa

SUV/
crossove
r
Fron
2023 2023 — Nexa
x

Brez 2016 (as 2022 — Arena

za Vitara
Brezza)

72
 Model Current model
India Deal
Body n er Note
style introd outle s
Na uction Introd Update t
Image
me uction /facelift

Develo
ped by
Suzuki
and
produc
ed
by Toy
Gran ota
d India;
2022 2022 — Nexa
Vitar Also
a rebadg
ed sold
as the
Toyota
Urban
Cruiser
Hyryde
r

Off-
Jimn
Road 2023 2023 — Nexa
y
SUV

MUV/ Eeco 2010 2010 — Arena

van

73
 Model Current model
India Deal
Body n er Note
style introd outle s
Na uction Introd Update t
Image
me uction /facelift

Ertig
2012 2018 2022 Arena
a

XL6 2019 2019 2022 Nexa

Rebadg
ed
from T
Invic
2023 2023 Nexa oyota
to
Innova
Hycros
s

Sup Maruti
Pickup er Suzuki
2016 2016 —
truck Carr Comm
y ercial

74
LEADERSHIP
MR. R. C. BHARGAVA
Chairman

MR. HISASHI TAKEUCHI

Managing Director & CEO

MR. KENICHI AYUKAWA

Director

MR. KAZUNARI YAMAGUCHI

Director (Production)

MR. TOSHIHIRO SUZUKI

Director

MR. KENICHIRO TOYOFUKU

Director (Corporate Planning)

MR. OSAMU SUZUKI

Director

MR. KINJI SAITO

Director

MR. D. S. BRAR
Independent Director

75
MR. R.P. SINGH
Independent Director

MR. MAHESWAR SAHU

Independent Director

MS. LIRA GOSWAMI

Independent Director

76
 CHAPTER IV

DATA ANALYSIS & INTERPRETATIONS

77
1. What is your age?

Table 1: Age Of The Customers

S. No. Age No. of Respondents Percentage (%)

1 Less than 25 7 14%
2 25-35 29 58%
3 35-45 12 24%
4 45-55 1 2%
5 Greater than 55 1 2%
Total 50 100%
Source: Primary Data

Figure 1: Age Of The Customers

32 29
No. of Respondents

24

16
12

8 7

1 1
0
Less than 25 25-35 35-45 45-55 Greater than 55

Source: Primary Data

Interpretation

The above graph illustrates the 58% of the respondents were in the age group of 25-35
years, while 24% of the respondents were aged between 35-45 years in the survey.

78
2. What is your profession?

Table 2: Consumers’ Profession

S.No. Profession No. of Respondents Percentage (%)

1 Student 10 20%
2 Government Employed 12 24%
3 Private Employed 20 40%
4 Business 8 16%
Total 50 100%
Source: Primary Data

Figure 2: Consumers’ Profession

Business Student
16% 20%

Government
Private Employed Employed
40% 24%

Source: Primary Data

Interpretation

Of the total sample of 50 which is taken into consideration for sampling, majority of the
consumers’ profession was privately employed(40%) and Govt Empployees (24%). In the
sample, 20% of the respondents are students and the remaining 16% are self employed

79
3. What factor do you expect from any TV advertisement to buy the products
of Motor Cars?

Table 3: Customers Expectations On TV Advertisement For Buying Motor Cars

S. No. Mode No. of Respondents Percentage (%)

1 Price 22 44%
2 Services 3 6%
3 Discounts 15 30%
4 All Of The Above 10 20%
Total 50 100%
Source: Primary Data

Figure 3: Customers Expectations On TV Advertisement For Buying Motor Cars

24 22
No. of Respondents

18
15

12 10

6
3

0
Price Services Discounts All Of The Above

Source: Primary Data

Interpretation

Out of the total 50 sample chosen, the respondents were asked about which factors the
customers expect from any TV advertisement to buy the Motor Cars. 22 out of 50 people
responded that price is the utmost factor they consider in TV advertisements for buying
motor cars. 15 people said discounts is the major factor.

80
 4. Which Factors influenced to purchase the Maruti Suzuki Motor Car you
use?

Table 4: Influencing Factors To Purchase Maruti Suzuki Motor Car

S.No. Option No. of Respondents Percentage (%)

1 Style 8 16%
2 Brand Image 6 12%
3 Performance 14 28%
4 Mileage 10 20%
5 Price 12 24%
Total 50 100%
Source: Primary Data

Figure 4 Influencing Factors To Purchase Maruti Suzuki Motor Car

16
14
No. of Respondents

12
12
10

8
8
6

0
Style Brand Image Performance Mileage Price

Source: Primary Data

Interpretation

The above graph depicts that performance and price are the major influencing factors for
the cutomers to purchase Maruti Suzuki Motor Cars, with 28% and 24% respectively. 10

81
people said mileage is the factor to purchase Motor Cars, while 8 said style and 6 said brand
image is the factor for buying Motor Cars.
5. Customer’s awareness on Maruti Suzuki Motor Cars

Table 5: Customer’s Awareness On Maruti Suzuki Motor Cars

S.No. Option No. of Respondents Percentage (%)

1 Very High 15 30%
2 High 22 44%
3 Medium 12 24%
4 Low 1 0%
5 Very Low 0 0%
Total 50 100%
Source: Primary Data

Figure 5: Customer’s Awareness On Maruti Suzuki Motor Cars

25
22

20
No. of Respondents

15
15
12

10

5
1
0
0
Very High High Medium Low Very Low

Source: Primary Data

Interpretation

82
The above graph indicates that 44% of the respondents said that the awareness of cars is
high in the market, while 30% said it is very high. 12 people, representing 24% said the
awareness is some what medium in the market.

6. Do you agree the price of your Maruti Suzuki Motor Car is reasonable than
the other companies?

Table 6: Customers Opinion Whether The Prices Of Maruti Cars Is Reasonable

S.No. Option No. of Respondents Percentage (%)

1 Strongly Agree 10 20%
2 Agree 22 44%
3 Either Agree Or Disagree 12 24%
4 Disagree 6 12%
5 Strongly Disagree 0 0%
Total 50 100%
Source: Primary Data

Figure 6: Customers Opinion Whether The Prices Of Maruti Suzuki Cars Is Reasonable

25
22
No. of Respondents

20

15
12
10
10
6
5

0
0
Strongly Agree Agree Either Agree Or Disagree Strongly
Disagree Disagree

Source: Primary Data

Interpretation

83
The above graph shows that 22 of the respondents agreed that the prices of the bike they
own is reasonable when comapred to other companies. 10 people strongly agreed with
this, while 12 said they can’t adjudge regarding the price comparision.

84
7. Do you believe that celebrity endorsement plays a key role in the brand awareness
of Motor Car companies?

Table 7: Celebrity endorsement plays a key role in the brand awareness

S.No. Option No. of Respondents Percentage (%)

1 Strongly Agree 16 32%
2 Agree 16 32%
3 Either Agree Or Disagree 6 12%
4 Disagree 8 16%
5 Strongly Disagree 4 8%
Total 50 100%
Source: Primary Data

Figure 7: Celebrity endorsement plays a key role in the brand awareness

18 16 16
No. of Respondents

12
8
6
6 4

0
Strongly Agree Agree Either Agree Or Disagree Strongly
Disagree Disagree

Source: Primary Data

Interpretation

The above graph shows that majority of the respondents agree that celebrity endorsement
play a key role in the brand awareness of cars.

85
8. How can the companies increase the awareness of product to the customers?

Table 8: Awareness Of Product To The Customers

S.No. Option No. of Respondents Percentage (%)

1 Explaining The Features 18 36%
2 Listing Products 10 20%
3 Showing Products 12 24%
4 Others 10 20%
Total 50 100%
Source: Primary Data

Figure 9: Awareness Of Product To The Customers

20
18
No. of Respondents

15
12
10 10
10

0
Explaining The Listing Products Showing Products Others
Features

Source: Primary Data

Interpretation

The above graph illustrates that majority of the people (36%) said that they are aware
about the product through the explaination of the features by the company, while 12
people said the awareness was through showing products. 10 people said there are some
other factors that made them aware about the Motor Cars.

86
9. Sources of awareness about Motor Cars

Table 9: Sources Of Awareness About Motor Cars

S.No. Option No. of Respondents Percentage (%)

1 Advertising 24 48%
2 Service Centers 1 2%
3 Friends 14 28%
4 Others 11 22%
Total 50 100%
Source: Primary Data

Figure 9: Sources Of Awareness About Motor Cars

25 24

20
No. of Respondents

15 14
11
10

5
1
0
Advertising Service Centers Friends Others

Source: Primary Data

Interpretation

The above graph indicates that 48% of the respondents are aware about Motor Cars
through advertisements, while 14 people said they are aware through their friends. 11
people, representing 22%, said that there are some other sources of media wherein they are
aware about the Motor Cars.

87
10. What are benefits Maruti Suzuki provides for awareness to customers?

Table 10: Benefits Provided By the Maruti Suzuki For Creating Awareness

S.No. Option No. of Respondents Percentage (%)

1 High Margin 24 48%
2 More Benefits 1 2%
3 Longer Credit Period 14 28%
4 Others 11 22%
Total 50 100%
Source: Primary Data

Figure 3: Benefits Provided By the Maruti Suzuki For Creating Awareness

25 24
No. of Respondents

20

15 14
11
10

5
1
0
High Margin More Benefits Longer Credit Others
Period

Source: Primary Data

Interpretation

The above graph indicates that 24 people i.e. 48% of the total respondents said that they
get higher margins when they create awareness about the products. 14 people said that the
company provides longer credit period, while 11 said it is others.

88
 11. How do you rate the quality& performance of your Maruti Suzuki bike?

Table 11: Quality& Performance Of Maruti Suzuki Motor Car

S.No. Option No. of Respondents Percentage (%)

1 Excellent 14 28%
2 Good 26 52%
3 Average 6 12%
4 Below Average 4 8%
5 Poor 0 0%
Total 50 100%
Source: Primary Data

Figure 4: Quality& Performance Of Maruti Suzuki Motors Bike

28 26
No. of Respondents

21

14
14

7 6
4

0
0
Excellent Good Average Below Average Poor

Source: Primary Data

Interpretation

The above graph shows that 26 of the respondents said that the quality and performance of
their cars is good, while 14 people said it as excellent. Only 4 of the 50 respondents said
the quality and performance of cars is below average.

89
 12. How do you feel about the availability of spare parts?

Table 12: Availability Of Spare Parts

S.No. Option No. of Respondents Percentage (%)

1 Low 4 8%
2 Reasonable 6 12%
3 High 18 36%
4 Very High 22 44%
Total 50 100%
Source: Primary Data

Figure 5: Availability Of Spare Parts

25
22

20
No. of Respondents

18

15

10
6
5 4

0
Low Reasonable High Very High

Source: Primary Data

Interpretation

The above graph shows that availability of spart parts in service centers is vey high with
22 people voting in favor of this. 18 people felt that is high, and only four people said it is
low in the service centers.

90
 13. How do you feel about the mileage of your Maruti Suzuki bike?

Table 13: Feedback on Mileage of the Maruti Suzuki bike

S.No. Option No. of Respondents Percentage (%)

1 Low 7 14%
2 Reasonable 8 16%
3 High 15 30%
4 Very High 20 40%
Total 50 100%
Source: Primary Data

Figure 6: Feedback on Mileage of the Maruti Suzuki bike

24
20
No. of Respondents

18
15

12
8
7
6

0
Low Reasonable High Very High

Source: Primary Data

Interpretation

The above graph shows that the feedback of mileage of the cars they own among the
customers is very good.

91
 14. I would suggest from Family and Friends to buy Maruti Suzuki Cars

Table 14: I would suggest from Family and Friends to buy Maruti Suzuki Cars

S.No. Option No. of Respondents Percentage (%)

1 Strongly Agree 10 20%
2 Agree 22 44%
3 Either Agree Or Disagree 12 24%
4 Disagree 6 12%
5 Strongly Disagree 0 0%
Total 50 100%
Source: Primary Data

Figure 7: I would suggest from Family and Friends to buy Maruti Suzuki Cars

25
22
No. of Respondents

20

15
12
10
10
6
5

0
0
Strongly Agree Agree Either Agree Or Disagree Strongly
Disagree Disagree

Source: Primary Data

Interpretation

The above graph shows that 32 of the respondents said that they would suggest their
family members and friends to buy Maruti cars. Only 6 of the 50 respondents said
they would not suggest while the remaining 12 respondents were neutral about the
statement.

92
15. The next car I will buy will again be a Maruti Suzuki Branded car

Table 15: The next car I will buy will again be a Maruti Suzuki Branded car

S.No. Option No. of Respondents Percentage (%)

1 Strongly Agree 16 32%
2 Agree 16 32%
3 Either Agree Or Disagree 6 12%
4 Disagree 8 16%
5 Strongly Disagree 4 8%
Total 50 100%
Source: Primary Data

Figure 15: The next car I will buy will again be a Maruti Suzuki Branded car

18 16 16
No. of Respondents

12
8
6
6 4

0
Strongly Agree Agree Either Agree Or Disagree Strongly
Disagree Disagree

Source: Primary Data

Interpretation

The above graph shows that 64% of the respondents agree that will again buy a Maruti
Suzuki branded car in the future. 24% of the customers prefer another car while 12
remained neutral.

93
CHAPTER V

FINDINGS, SUGGESTIONS & CONCLUSION

94
FINDINGS

The following details can be inferred after analysis with a simple size of 50 which
included customers, by questionnaire method to find out the brand awareness towards
the cars.

 22 out of 50 people responded that price is the utmost factor they consider in
TV advertisements for buying motor cars. 15 people said discounts is the
major factor.

 performance and price are the major influencing factors for the cutomers to
purchase Motor Cars, with 28% and 24% respectively. 10 people said mileage
is the factor to purchase Motor Cars, while 8 said style and 6 said brand image
is the factor for buying Motor Cars.

 44% of the respondents said that the awareness of cars is high in the market,
while 30% said it is very high. 12 people, representing 24% said the
awareness is some what medium in the market.

 22 of the respondents agreed that the prices of the car they own is reasonable
when comapred to other companies. 10 people strongly agreed with this,
while 12 said they can’t adjudge regarding the price comparision.

 majority of the respondents agree that celebrity endorsement play a key role in
the brand awareness of cars.

 majority of the people (36%) said that they are aware about the product
through the explaination of the features by the company, while 12 people said
the awareness was through showing products. 10 people said there are some
other factors that made them aware about the Motor Cars.

 48% of the respondents are aware about Motor Cars through advertisements,
while 14 people said they are aware through their friends. 11 people,
representing 22%, said that there are some other sources of media wherein
they are aware about the Motor Cars.

95
  24 people i.e. 48% of the total respondents said that they get higher margins
when they create awareness about the products. 14 people said that the
company provides longer credit period, while 11 said it is others.

 Majority of the respondents are happy with quality and performance of their
cars, mileage and availability of the spare parts.

 32 of the respondents said that they would suggest their family members and
friends to buy maruti cars. Only 6 of the 50 respondents said they would not
suggest while the remaining 12 respondents were neutral about the statement.

 64% of the respondents agree that will again buy a Maruti Suzuki branded car
in the future. 24% of the customers prefer another car while 12 remained
neutral.

SUGGESTIONS

Suggestions are done on the basis of finding and analysis of data collected through
questionnaire

96
 In order to promote sale in highly competitive auto market, attractive schemes
such as cash discounts, complementary gifts, lucky draws, etc. can be given to
the customers

 Customers should be contacted at a regular interval through phone calls and

free servicing of the cars to ask them if they are facing any problems with the
bike they purchased, because after sale service with the customers may be
very important to maintain customers satisfaction

 Advertising plays a very important role in increasing the awareness and in

reminding the customer about the products offered by Motor Car companies.
Hence, advertisement about the company and its products must be aired on
local T.V channels as well as in newspapers and magazines

 Since the people tend to forget the advertising of a particular product/service,

a reminder message has to be enforced in regular intervals and in a proper
media which would reach a large number of potential customers

 The most important factors for selecting a bike is its performance, which
includes price, mileage, speed, braking efficiency, maintenance, etc. There
would be a definite increase in the sale of the cars if this point would be
looked into and improved

 The company should come up with some innovative change in the design and
style of products without changing the price

97
CONCLUSION

Accomplishing this project on brand awareness was an excellent and

knowledge gaining experience for me. Despite taking a small sample size, this project
helped me to know the customers view towards the brand awareness of Maruti Suzuki
Motor Cars.

Brands are now a central feature of consumer marketing, they are important in
building long-term relationships with the consumer, irrespective of the type of
market. Their importance is now also being recognized in other markets, including
service and industrial. Investing in a brand builds consumer confidence and loyalty
and allows for brand stretching. It requires a consistent and long-term strategy.

A survey of the customers has been conducted to know the brand loyalty of
the Maruti Suzuki Motor Cars. The customers are aware of the products of Motor
Cars with the help of digital and tele media. The companies now needs to focus on
finding ways to increase its advertising channels to reach the relatively large number
of people. The middle class people are the customers of Motor Cars as the prices are
relatively cheaper when compared to other brands in the market. From this study it is
clear that more or less all the Motor Car companies have a good brand image among
the public and the customers had been satisfied with the product performance. The
customers are well aware about the performance and features of the cars offered by
different companies.

98
BIBLIOGRAPHY

99
BIBLIOGRAPHY

Text Books:

Marketing Research G. C. Beri

Marketing Management Philip Kotler
Marketing Management V.S Ramaswamy & S.
Namakumari

Internet:

www.google.com

www.wikipedia.com

www.economictimes.com

http://www.tvsmotor.in/

http://www.herohonda.com/

http://www.bajajauto.com/

http://www.yamaha-motor-india.com/

Magazines:

Companies Brochures & Manuals

Business Today

100
QUESTIONNAIRE

This study is a part of our course curriculum of MBA. The purpose of this study is to
analyze the brand loyalty towards Maruti Cars. Your responses will be kept
confidential and the information obtained will be used in aggregate and not in person.
We are grateful to you for your time and effort.

Customer Name:

Age:

Gender:

Occupation:

Income:

1. What factor do you expect from any advertisement to buy the products of Motor
Cars? [ ]

A) Price B) Services

C) Discounts D) All the above

2. Which Factors influenced to purchase the motor car you use? [ ]

A) Style B) Brand Image

C) Performance D) Mileage

E) Price

3. What is your opinion on Customer’s awareness on Motor Car? [ ]

A) Very high B) High

C) Medium D) Low

E) Very low

101
4. Do you agree that the price of your Motor Car is reasonable than the other
companies? [ ]

A) Strongly agree B) Agree

C) Either agree or disagree D) Disagree

E) Strongly disagree

5. Do you believe that celebrity endorsement plays a key role in the brand awareness
of motor car companies? [ ]

A) Strongly agree B) Agree

C) Either agree or disagree D) Disagree

E) Strongly disagree

6. How can the companies increase the awareness of product to the customers? [ ]

A) Explaining the features B) Listing product

C) Showing products D) Others

7. Main sources of awareness about motor cars? [ ]

A) Advertising B) service centres

C) Friends D) Others

8. What are benefits company provides for increasing loyalty of customers? [ ]

A) High margin B) More benefits

C) Longer credit period D) Others

9. How do you rate the quality& performance of your car? [ ]

A) Excellent B) Good

C) Average D) Below average

E) Poor

10. How do you feel about the availability of spare parts of your car? [ ]

102
A) Low B) Reasonable

C) High D) Very high

11. How do you feel about the mileage of your car? [ ]

A) Low B) Reasonable

C) High D) Very high

12. I would suggest my family members and friends to buy Maruti Cars [ ]

A) Strongly agree B) Agree

C) Either agree or disagree D) Disagree

E) Strongly disagree

13. The next car I will buy will again be a Maruti Suzuki Branded one [ ]

A) Strongly agree B) Agree

C) Either agree or disagree D) Disagree

E) Strongly disagree

Any suggestions for improving quality and performance of the Motor Cars

_____________________________________________________________________
_____________

103