PROFILE

Blue Star is India's largest central air conditioning company with an annual turnover of Rs 2700 crores, a network of 29 offices, 7 modern manufacturing facilities, over 1600 dealers and around 2800 employees. The Company has manufacturing facilities at Thane, Dadra, Bharuch, Himachal, Wada and Ahmadabad which use state-of-the-art manufacturing equipment to ensure that the products have consistent quality and reliability. Blue Star fulfills the air conditioning needs of a large number of corporate, commercial and residential customers and has also established leadership in the field of commercial refrigeration equipment ranging from water coolers to cold storages. Blue Star primarily focuses on the corporate and commercial markets. These include institutional, industrial and government organizations as well as commercial establishments such as showrooms, restaurants, banks, hospitals, theatres, shopping malls and boutiques. The Company has started pursuing the residential segment with its wide range of sleek and contemporary Room ACs. Indian air conditioner market is extremely consolidated where more than 50% market revenue share is captured by top 3 players LG, Samsung and Voltas. The current market share of Blue Star air conditioners in room air conditioner market is currently hovering around 7.5% and is eyeing a 9% market share by selling 270,000 units of airconditioners by end of this FY12. Further the company commands around 25% of market share in packaged air conditioners market. Blue Star has a portfolio of 35 models of air-conditioners and is planning to launch another 15 models next fiscal. Blue Star is planning to invest INR 20 crores in advertisement and other promotional activities for this season and is mulling to hike product prices by 10 to 15 % for the ensuing summer season. The Indian air conditioner market is poised for greater growth over next five years with CAGR of 13.6% and set to attain whooping INR 20000 crores revenue. Increasing disposable income, rising weather temperature, falling prices of air conditioners coupled with the latest technological innovations increasing the cooling efficiency and the increasing commercialization of the economy are the factors which are driving air conditioners market in India.

NEED FOR STUDY

Blue Star an Indian company despite being founded in 1943 with strong distribution system and commanding a market share of 25% in commercial market segment (packaged air conditioners) is unable to gain a decent market share in consumers market (room air conditioners) with market share hovering around 6%. The motivational statement for this study is why Blue Star being a reckoning force in commercial market segment is struggling to gain a double digit market share in consumers market segment.

OBJECTIVES OF STUDY
1. Measurement of customer satisfaction of Blue Star air conditioners in consumers segment. 2. To identify the critical factors that influences dissatisfaction among Blue Star air conditioners.

RESEARCH METHODOLOGY
Selection of Study Area: Chennai is the sixth most populous city in India and is one of the fastest growing cities in the world. Chennai has a tropical wet and dry climate and the weather is hot and humid for most of the year. A study has been taken in Chennai region to analyze and measure the customer satisfaction of Blue Star Air conditioners. Research Design: The research design is cross sectional design based on descriptive methodology leading to conclusions. Quantitative research is adopted and instrument is designed to elicit responses. Sampling Procedure: Random sampling is used to select sample units. Sample unit consists of Chennai residents who have experienced Blue Star air conditioners.

Sample Size: The sample size for the study consists of 40 respondents. Sources of Data: 1. The primary data sources consist of eliciting responses from Chennai residents who have experienced Blue Star air conditioners 2. The secondary sources of data consist electronic papers and websites. Instrument Development: The instrument for research is a questionnaire and is divided into two parts 1. Demographic profile of the respondents. 2. Satisfaction level of the respondents with respect to 7Ps Product; Price; Place; Promotion; People; Process and Physical evidence. Statistical Tools used: Frequency distributions and Chi-square test are the statistical tools used in the analysis of data. The Chi-Square test is used to determine whether there is a significant difference between the expected frequencies and observed frequencies in one or more categories. This research aims to analyze the significant difference between the demographic profile and the satisfaction index level of the respondents with respect to 7Ps. Further the present research satisfies the minimum sample size requirement of 10. Therefore Chi-square test was predominantly used in this present research. Statistical Package used: The statistical package used for analysis of data is SPSS version 18.

ANALYSIS AND INTERPRETATION

DEMOGRAPHIC PROFILE: Frequency Distribution of Gender of the Respondents:
Gender Male Female Frequency 24 16 Percent 60 40

Inference: Majority of the respondents are male with 60% followed by female with 40%. Frequency Distribution of Age group of the Respondents:
Age Group 18 - 25 years 26 - 35 years 36 - 45 years Above 45 years Frequency 18 12 7 3 Percent 45 30 17.5 7.5

Inference: Majority of the respondents are in the age group of 18 25 years (45%) followed by 26 35 years (30%); 36 45 years (17.5%) and Above 45 years (7.5%). Frequency Distribution of Annual income of the Respondents:
Annual Income Less than INR 2 lakhs INR 2 - 3 lakhs INR 3 - 5 lakhs INR above 5 lakhs Frequency 7 10 17 6 Percent 17.5 25 42.5 15

Inference: Majority of the respondents are in the income level of INR 3 5 lakhs (42.5%) followed by INR 2 3 lakhs (25%); Less than INR 2 lakhs (17.5%) and INR above 5 lakhs (15%). Frequency Distribution of Educational Qualification of the Respondents:
Educational Qualification Below HSC HSC UG PG Frequency 1 1 13 25 Percent 2.5 2.5 32.5 62.5

Inference: Majority of the respondents are PG (62.5%) followed by UG (32.5%) and Below HSC and HSC at 2.5% Overall Customer Satisfaction Index Level with respect to 7Ps:
Physical Evidence 15 12 12 10 10 12 12 13 12 13 15 12 14 14 13 9 10 13 12 9 15 14 13 12 10 14 15 13 9 15 11 15 13 12 15 12 12 12 12 14 500 600 83.33 Max. Score 270 270 270 270 270 270 270 270 270 270 270 270 270 270 270 270 270 270 270 270 270 270 270 270 270 270 270 270 270 270 270 270 270 270 270 270 270 270 270 270 Satisfaction Index (in %) 92.96 87.78 82.59 78.15 85.93 73.7 82.96 77.04 84.81 89.63 95.56 80.37 85.93 78.52 80.37 69.63 65.56 85.56 65.19 61.85 96.3 87.41 94.07 77.78 67.04 93.33 92.96 90.37 64.44 82.59 83.33 89.26 85.93 86.3 92.22 62.22 72.96 81.85 72.22 92.59

S.No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Total Max. Score Satisfaction Index (in %)

Product 55 54 50 52 55 44 49 48 52 55 60 52 52 47 54 43 42 50 42 40 58 50 55 47 45 55 55 57 39 47 52 53 54 49 58 36 46 49 43 53 1997 2400 83.21

Price 14 17 18 14 19 12 18 14 19 18 20 14 17 16 15 12 12 15 16 11 20 16 19 14 11 19 19 16 11 16 16 12 18 18 19 13 12 17 14 18 629 800 79

Place 48 45 42 42 44 31 41 37 40 45 48 39 42 38 43 34 35 48 33 34 48 42 49 48 35 46 46 44 37 35 39 44 39 45 47 29 34 44 34 47 1641 2000 82.1

Promotion 47 45 43 29 38 36 42 38 47 42 40 40 42 34 31 30 30 45 30 21 47 44 47 39 27 47 43 46 25 45 42 46 43 45 41 31 37 44 37 47 1573 2000 78.65

People 33 28 31 29 31 29 29 26 24 34 35 31 30 29 33 28 24 28 19 23 35 32 34 25 25 33 34 32 25 31 29 33 31 31 32 23 26 24 26 31 1166 1400 83.3

Process 39 36 27 35 35 35 33 32 35 35 40 29 35 34 28 32 24 32 24 29 37 38 37 25 28 38 39 36 28 34 36 38 34 33 37 24 30 31 29 40 1321 1600 82.56

Total 251 237 223 211 232 199 224 208 229 242 258 217 232 212 217 188 177 231 176 167 260 236 254 210 181 252 251 244 174 223 225 241 232 233 249 168 197 221 195 250 8827 11200 78.8

Inference: The overall customer satisfaction index level of Blue star air conditioners is 78.8%. Customer satisfaction index level of Physical evidence is 83.3% followed by People (83.3%);

Product (83.21%); Process (82.56%); Place (82.1%); Price (79%) and Promotional activities (78.65%). Blue Star should focus on all 7Ps with the ultimate objective of improving the satisfaction index level of air conditioners. Customer Satisfaction Index level for product characteristics: Description Features Aesthetics of product Aesthetics of packaging Perceived Quality of product Performance BEE star rating Durability Reliability Technology Innovation Variety User Friendly Inference: Among the product characteristics satisfaction index is high for features (90.5%) followed by Technology (86.5%) and others. It is very evident that Blue Star should focus on BEE star ratings (76.5%), Innovativeness (80%), Variety of products (81%), Reliability of products (82%), Durability of products (83%) and user friendliness of the products (83%) to boost their satisfaction index. Customer Satisfaction Index level for pricing characteristics: Description Price of the product Payment flexibility Mode of payment Value for money Obtained Score 157 158 155 159 Maximum Score 200 200 200 200 Satisfaction Index (in %) 78.5 79 77.5 79.5 Obtained Score 181 167 169 169 171 153 166 164 173 160 162 166 Maximum Score 200 200 200 200 200 200 200 200 200 200 200 200
Satisfaction Index (in %)

90.5 83.5 84.5 84.5 85.5 76.5 83 82 86.5 80 81 83

Inference: Among the pricing characteristics satisfaction index is high for value for money (79.5%) followed by payment flexibility (79%), Price of the product (78.5%) and mode of payment (77.5%). Blue Star should focus adopt competitive pricing strategy and put a hold on its recent

proposal to increase the price of air conditioners by 10-15% in order to increase their sales revenue and customer satisfaction. Customer Satisfaction Index level for purchasing place characteristics: Description Point of purchase (POP) Easy accessibility Availability of product Availability of spare parts Display Parking space Ambience Lift Infrastructure of POP Place of servicing the product Inference: Among the purchasing place characteristics satisfaction index is high for point of purchase (86%) followed by displaying the product (85%) and lift facilities (85%). It is very evident that Blue Star should focus on infrastructure of the purchasing place (77%), Ambience of purchasing place (78%), Place of servicing the product (81%), Availability of spare parts (81.5%), Easy accessibility of purchasing place (82%), Parking Space (82.5%) and availability of product (84%) to increase the customer satisfaction index level. Customer Satisfaction Index level for promotional activities: Description Discounts offered Effectiveness of advertisements Special discounts for festivals Demo display of product in public places Free home delivery Free installation of product Guarantee & Warranty After sales service Attractive EMI schemes No card transaction charges Obtained Score 160 159 162 159 147 160 162 156 157 152 Maximum Score 200 200 200 200 200 200 200 200 200 200 Satisfaction Index (in %) 80 79.5 81 79.5 73.5 80 81 78 78.5 76 Obtained Score 172 164 168 163 170 165 156 170 154 162 Maximum Score 200 200 200 200 200 200 200 200 200 200 Satisfaction Index (in %) 86 82 84 81.5 85 82.5 78 85 77 81

Inference: Among the promotional activities satisfaction index of guarantee & warranty and special discounts during festival season is high with 81% followed by free installation of products and effective advertisements with 80% and others. Among 7Ps, satisfaction index for promotional activities is much lower and Blue Star should accelerate its promotional activities to boost the customer satisfaction index level. Customer Satisfaction Index level for people characteristics: Description Professionalism Behavior Attitude Knowledge about the product Quality of given information Responsiveness to queries Communication level Inference: Among the people characteristics satisfaction index is high for professionalism (86%) followed by good behavior of employees (85.5%) and knowledge about the product (85%). Blue Star should focus on rest of the parameters to boost the satisfaction index level. Customer Satisfaction Index level for process characteristics: Description Delivery System for product Delivery time for product Mode of contact for service Time taken to respond for service Problem Resolution time Service timings Responsiveness to queries Requesting feedback for the service provided Inference: Obtained Score 176 168 164 163 163 165 164 158 Maximum Score 200 200 200 200 200 200 200 200 Satisfaction Index (in %) 88 84 82 81.5 81.5 82.5 82 79 Obtained Score 172 171 164 170 161 166 157 Maximum Score 200 200 200 200 200 200 200 Satisfaction Index (in %) 86 85.5 82 85 80.5 83 78.5

Among the process characteristics satisfaction index level for delivery system of the product is high with 88%. Blue Star should focus on rest of the parameters to boost the satisfaction index level. Customer Satisfaction Index level for physical evidence: Description Installation Quality After Sales Service Service Quality Inference: Among the physical evidence satisfaction index level is high for installation quality with 85% followed by service quality (83.5%) and after sales service (81%). Blue Star should focus on all the parameters to improve its customer satisfaction index level. Relationship between Gender and Durability of the product: H0: There is no significant difference between the gender and durability of the product. H1: There is significant difference between the gender and durability of the product. Value 14.510 19.349 .357 40 df 3 3 1 Asymp. Sig. (2-sided) .002 .000 .550 Obtained Score 170 162 167 Maximum Score 200 200 200 Satisfaction Index (in %) 85 81 83.5

Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases

Inference: The Chi-Square value of 14.510 is statistically significant at 5% level of significance. H0 is rejected and alternate hypothesis is accepted. There is significant difference between the gender and durability of the product. Relationship between Educational qualification and discounts offered to the product: H0: There is no significant difference between the educational qualification and discounts offered to the product.

H1: There is significant difference between the educational qualification and discounts offered to the product. Value 48.654 18.648 3.837 40 df 12 12 1 Asymp. Sig. (2-sided) .000 .097 .050

Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases Inference

The Chi-Square value of 48.654 is statistically significant at 5% level of significance. H0 is rejected and alternate hypothesis is accepted. There is significant difference between the educational qualification and discounts offered to the product. Relationship between Annual income and features of the product: H0: There is no significant difference between the annual income and features of the product. H1: There is significant difference between the annual income and features of the product. Value 16.089 19.340 14.529 40 df 3 3 1 Asymp. Sig. (2-sided) .001 .000 .000

Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases

Inference: The Chi-Square value of 16.089 is statistically significant at 5% level of significance. H0 is rejected and alternate hypothesis is accepted. There is significant difference between the annual income and features of the product. Relationship between Air conditioner capacity and overall satisfaction level: H0: There is no significant difference between the air conditioner capacity and overall satisfaction level.

H1: There is significant difference between the air conditioner capacity and overall satisfaction level. Value 28.460 22.478 .627 40 df 9 9 1 Asymp. Sig. (2-sided) .001 .007 .429

Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases Inference:

The Chi-Square value of 28.640 is statistically significant at 5% level of significance. H0 is rejected and alternate hypothesis is accepted. There is significant difference between the air conditioner capacity and overall satisfaction level. Relationship between Air conditioner capacity and Brand name and reputation: H0: There is no significant difference between the air conditioner capacity and brand name and reputation. H1: There is significant difference between the air conditioner capacity and brand name and reputation. Value 22.353 19.880 1.560 40 df 9 9 1 Asymp. Sig. (2-sided) .008 .019 .212

Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases Inference:

The Chi-Square value of 22.523 is statistically significant at 5% level of significance. H0 is rejected and alternate hypothesis is accepted. There is significant difference between the air conditioner capacity and brand name and reputation. Relationship between overall satisfaction level and brand name and reputation: H0: There is no significant difference between the overall satisfaction level and brand name and reputation.

H1: There is significant difference between the overall satisfaction level and brand name and reputation. Value 24.867 22.169 11.897 40 df 9 9 1 Asymp. Sig. (2-sided) .003 .008 .001

Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases Inference:

The Chi-Square value of 24.687 is statistically significant at 5% level of significance. H0 is rejected and alternate hypothesis is accepted. There is significant difference between the overall satisfaction level and brand name and reputation. Repurchasing the product: Description Yes No Inference: Majority of the respondents are willing (90%) to repurchase the product while 10% of the respondents say they are not willing to repurchase the product. Recommendation to others: Description Yes No Inference: Majority of the respondents say that they will recommend the product to others (77.5%) while rest of 22.5% respondents says that they will not recommend the product to others. Overall Customer Satisfaction index level: Description Overall Satisfaction level Inference: Obtained Score 165 Maximum Score 200 Satisfaction Index (in %) 82.5 Frequency 31 9 Percent 77.5 22.5 Frequency 36 4 Percent 90.0 10.0

Overall Customer Satisfaction index level is 82.5%. Blue Star should further focus on its 7Ps to accelerate its customer satisfaction level. Brand name and reputation index level: Description Brand name and reputation Inference: Overall Brand name and reputation index level among the respondents is 82.5%. Obtained Score 161 Maximum Score 200 Satisfaction Index (in %) 80.5

SUGGESTIONS 1. The overall customer satisfaction index level of Blue Star air conditioners with respect to 7Ps can be improved by accelerating the promotional activities and adopting the competitive pricing strategy. 2. Blue Star should put on hold its current proposal of hiking the price of its product by 10 15% as it will further reduce the customer satisfaction index level and sales revenue.

3. In order to improve the customer satisfaction index level Blue star should predominantly focus on BEE star rating, innovativeness of the product, pricing of the product, payment flexibility, mode of payment, infrastructure and ambience of the purchasing place, free home delivery and attractive EMI schemes, improve the communication level of its staff and put in place an effective feedback mechanism.