Small Car Segment

OBJECTIVES OF THE PROJECT

1. Examine the psychographics of potential small size car customers. 2. 3. Probe the buying behaviour of car owners. Find people expectations or satisfaction regarding the small cars. . #. !o "udge the awareness level of small cars. !o study the attributes of different brands of small cars. $. '. !o probe into consumer%s &nowledge about cars. !o &now the mar&eting mix of this product category.

Small Car Segment

SCOPE AND LIMITATIONS

!he sample size being very small( that is only sixty respondents( limited the scope and study of the pro"ect. !a&ing the convenience sampling might have led to some bias as people with different age groups have different perceptions. For example people with age above 3# years have more awareness then people between the age group of 2) and 3) years. !ime constraints put boundaries to the sample area and hence limited the extent of the study.

Small Car Segment

EXECUTIVE SUMMARY
!he ob"ective of this pro"ect is to study the small cars with extensive research on their perceptions (mar&eting mix and attitudes towards a variety of attributes and factors. Firstly( * too& three brands of small cars + ,en( -atiz and .antro for a comparative study of small car segment. * got the companies% broad bac&ground( their entry into the segment( their positioning strategies of cars and other factors affecting the consumer%s buying behaviour. /ater * went through the process of filling the

0uestionnaires( to &now exactly what the customer%s of small cars perceived about their cars. 1 sample size of sixty respondents was ta&en. .ample unit was a customer who owned a small car. .econdary data from various sources li&e magazines( "ournals etc was also collected. !he findings showed that the consumer%s who owned small cars basically wanted good performance (after sales service and a car at their budget( a less expensive one. 1ll the cars ta&en for the as sample almost showed same that the

consumers

perceived

them

in all the

Small Car Segment

attributes li&e safety( comfort and luxury. 2espondents li&ed -atiz more for its loo&s( whereas -aruti%s after sales service was perceived to be good. 3ut( at the end the research was limited due to small sample size( small sample area and time constraints.

Small Car Segment

INDUSTRY BACKGROUND
1s *ndia celebrates its #) years of independence( the passenger car industry will celebrated a centenary of its existence in *ndia in 1445. 6espite this head start( the industry has never 0uite matched up to the performance of its counterparts in other parts of the world. !he all7 pervasive atmosphere created by the government8s license ra" was primarily responsible for this situation. !he various layers of 1cts sheltered the industry from external

competition and smothered the development of the *ndian automobile industry. -oreover( the industry was considered low priority as cars were considered to be an 9unaffordable luxury.9 :ith the liberalization of the *ndian economy( the

passenger car industry was finally deregulated in 1443 and many companies( both *ndian and foreign( announced their plans to enter the mar&et. !he last four years have seen companies li&e 6aewoo( Ford( ;-( and -ercedes73enz

launch their cars in *ndia. !he passenger car industry notched impressive growth rates between 2$73)< during the period F= 4 74$ even though the economic slowdown

Small Car Segment

has adversely affected the industry in F= 45 with the growth rate tric&ing down to 1<. >onetheless( times have changed significantly 7 the days of the customer chasing the dealer to purchase poor 0uality cars bac&ed by inefficient service are history. !oday( the customer dictates the terms. Current Market S enar!" !he *ndian passenger car industry has grown more than ten times in the last ten years with sales increasing to more than four7la&h vehicle. !he mar&et is dominated by -aruti that has 53< share accounted by its 5))7cc car( ,en( ?mni( and Esteem. -aruti is the leader in the economy( mid7size( and premium segment with its -aruti 5))( ,en( and Esteem respectively. 1fter the liberalization in 1443( the car industry posted impressive growth rate of 3)< in F= 4$ and 15< in F= 4'. @owever( the current year has witnessed a decline in car sales and the growth rate has dropped to a mere 1< for the period 1pril 144'7-arch 1445. !his miniscule growth was possible primarily due to the introduction of new models and massive price discounts and lucrative schemes announced by certain players. Pa##en$er Car# Se$%entat!"n

Small Car Segment

!he segmentation of the passenger car mar&et in *ndia is vastly different from that in the developed nations. *n *ndia( the economy segment accounts for the largest share of the cars sold( as compared to mid7range segment in the mature mar&ets. !he economy and the premium segment face the lowest competitive threats( while the premium segment will witness intense competition due to lower volumes. Se$%ent&'!#e C(a##!)! at!"n ") t*e In+!an Car Market Se$%ent 2ange Price A8))) 2s.B -odels Economy -aruti 5))( -aruti ?mni( Premier( 1mbassdor. -id7range Premium 3#)7 #) #) 7 1())) Cno( ,en( 115 >E( Ford Fiesta( Fiat Palio Esteem( Dontessa( ?pel 1stra( Ford Escort( Dielo( -itsubishi /ancer( @yundai 1ccent ?pel Fectra( 2over -ercedes benz -ontego(

/uxury

E 1()))

Small Car Segment

Ke, De%an+ Dr!-er# !raditionally( disposable income was perceived as the one critical factor that drove passenger car demand. @owever( household income is no longer the single most important factor in determining the demand for vehicles. ?ther critical factors are the mobility needs of people and the availability of cheap finance. !he top three income groups 7 middle( upper middle( and high 7 have grown from 1)< in 145$ to 1'< of the population and covers over #2 million families. !he number of high7income households is growing very rapidly( more so in the rural areas. !hese findings have revolutionary implications for the passenger car mar&et. !he development of the used car mar&et will also play a ma"or role( as the customers will be encouraged to trade in their old cars. !he &ey to the growth of future mar&ets is to ma&e maintenance7free vehicles( to improve the road

infrastructure( and to reformulate fuels and lubricants so as to reduce vehicle7operating costs.

Small Car Segment

COMPANY
DAE'OO .

AND PRODUCT PROFILE

6aewoo -otors *ndia /imited started manufacturing world class cars in its state of the art plant at .ura"pur( Cttar Pradesh( near 6elhi. 6aewoo commenced its operations in *ndia with the its production product of Dielo to in Guly in 144# small and car

expanded

range

-atiz

segment(and Dielo and >exia in mid7size segment. 6aewoo -otors% endeavour is to introduce a product in every

segment of the *ndian passenger car mar&et !he company has invested 2s state7of7the7art manufacturing ))) crores in setting up a plant and research H

development facilities. 6aewoo -otors is part of the C. I '2 billion 6aewoo group of Jorea. Durrently( the 6aewoo group is present in 123 mar&ets and has made investments in Poland( Dhina( Dzech 2epublic( 2omania( Czbe&istan and *ndia to name a few countries. 6aewoo -otors *ndia /td A6-*/B has made an investment of 2s ())) crores in its automobile venture in *ndia and set

up facilities such as Press .hop( 1luminium 6ie7casting

Small Car Segment

.hop( Plastic -oulding .hop( Paint .hop( 5 -: Daptive

Power Plant( Fully e0uipped state7of7the7art 2H6 facility( !est !rac& and fully automated -achine .hops for

manufacturing Engines and !ransaxles A;ear 3oxesB. *n addition to this( the Dommercial Fehicle 6ivision at .ura"pur plant has got a separate facility to manufacture 1#())) Dommercial Fehicles Aboth buses H /DFsB per

annum. *t has got its own 3ody .hop( Paint .hop and a dedicated 1ssembly line apart from other critical in7house testing facilities. !he huge investment made by 6aewoo -otors is intended to fulfill demand for 6aewoo cars in the world mar&et thus putting *ndia on the global map of automa&ers with large exports of critical components and completely built cars. .ince the launch of D*E/?( the interest of consumers has been the company%s priority. 6aewoo has underta&en a ma"or expansion drive by increasing its present strength of over 11) dealers and over 1)) 1uthorised .ervice Dentres to cover the entire country. !he company also has more than 2)) vendors Acomponents suppliersB across the

country.

10

Small Car Segment

!heir dealer strength was 121 vis7K7vis 1)4 on 31st -arch 2))). *n addition to this( the Dompany has appointed 1 exclusive

/DF dealers across the country to ta&e care of sales and service re0uirements of 6aewoo Dommercial vehicles. 6aewoo -otors has also introduced the concept of @elpline for the first time in *ndia. 1 6aewoo car owner can dial the 2 hour @elpline number for assistance in case of

brea&downs. !he L@elpline% car is with him within approx 3) minutes Adepending on the location of brea&downsB and specially trained engineers and service personnel are

available to rectify the problem. !hrough additional services such as !he @appy Dall Dentre and Express Part .ervice Aspeedy delivery of any part all over the countryB the company is dedicated to providing the D*E/? customers with the best possible service networ&. V!#!"n 6aewoo must change to attain productivity and efficiency of internationally competitive levels to become the mar&et leader in *ndia and to earn worldwide fame and recognition through their vehicles.

11

Small Car Segment

!he dream is not only to be an integral part of the *ndian automobile industry but also to contribute to the prosperity of *ndia and its people at large. !heir 0uality policy is to achieve excellence in product H services. *t is to delight customer by constantly exceeding their expectations H meeting relevant regulations for safety( health H environment. !his shall be achieved through continuous improvement of processes H business activities under team spirit. >o matter where you go( 6aewoo8s nation wide sales and service networ& of over 1)) dealers and authorized service centers &eeps you on the move. 6aewoo has pioneered the concept of a 2 helpline for emergency brea&down assistance . 6aewoo pioneered the concept of an Express Part .ervice for speedy delivery of spares to customers all over the country. 6aewoo8s Ha//, Ca(( Center answers any 0ueries that you may have and provides assistance round the cloc&. hrs.7 mobile

12

Small Car Segment

!he year 2))) ended on a positive noteM

6-*/ registered a 2 5< rise in turnover at 2s.1(3)5 crore during 144472))) against 2s.3'$ crore in the year.

Dash profit also went up to 2s.

' crore during 1pril7

.eptember 2)))7)1 from 2s.1' crore in the year ago period. -ar&et share of the Dompany increased by more than 2)) per cent during 144472))) compared to the previous year. 6-*/ had registered a #5.2< rise in sales during 1pril7>ovember 2))). !he Dompany8s good performance can be attributed to increased sales of its brand -atiz and increase in exports.

13

Small Car Segment

MARUTI -aruti is *ndia8s largest automobile company. !he company( a "oint venture with .uzu&i of Gapan( has been a success story li&e no other in the annals of the *ndian automobile industry :hen -aruti entered the *ndian car mar&et( it sought to fill what it perceived as two very glaring needs. ?ne( to provide fuel efficient( low7cost vehicles( which were reliable and of high 0uality. !wo( to offer customers a friendly sales and after sales service. !otal automobile value and customer satisfactionM these ob"ectives

shaped their policies and their approach to 0uality. 1dditionally( the absence of an efficient public

transportation system was leading to a growing demand for passenger cars. 1 burgeoning wor& force and

growing middle class population meant that personal transport had become a necessity. !he first cars rolled out for sale on 1 th 6ecember 1453( Athe Dompany went into production in a record 13 monthsB( mar&ing the beginning of a revolution in the *ndian

automobile

industry. For the year ended 144'745( -aruti has

14

Small Car Segment

posted a turnover of C.I 2.1 billion and a Profit 3efore !ax of C.I 2 million. 6uring the year( -aruti produced over

3(#)())) vehicles( out of which 2$())) were exported. !hrough the years -aruti has provided world7class

contemporary Gapanese technology( suitably adapted to *ndian conditions and *ndian car users. :e have also provided users with a range of cars to suit different needs. -aruti8s mar&et share figures show the response of

customersM *n 144'745( their mar&et share of vehicles was over ')<. *n addition to leading in the economy car segment( -aruti is also the leader in the luxury car

segment with a mar&et share of 35<. -aruti has transformed the concept of after sales service in the *ndian automobile industry. They are committed to making sure that their relationship with the customer does not end with the purchase of a vehicle . -aruti has built up an extensive networ& of showrooms( dealer wor&shops( and authorised service stations( to ensure that no matter where you go( you are never far away from a -aruti 1uthorised .ervice .tation. T*e C"%/an, M!##!"n.

15

Small Car Segment

!o provide a wide range of modern( high 0uality fuel efficient vehicles in order to meet the need of different customers( both in domestic and export mar&ets.

T*e C"%/an, V!#!"n. 1. !hey must be an internationally competitive company in terms of our products and services. 2. !hey must retain our leadership in *ndia and should also aspire to be among the global players. 3. !heir focus should be onM 3uilding a continuously improving organisation

adaptable to 0uic& changes Providing value and satisfaction to the customer 1ligning and fully involving all our employees(

suppliers and dealers to face competition -aximising .hareholder8s value 3eing a responsible corporate citizen

*n a nutshell( their 0uality policy states that consumer satisfaction through 0uality of their products and services is

16

Small Car Segment

achieved systems. !hey define customer satisfaction in terms of sales and 0uality of service of our dealership networ&. !heir by consistent adherence to procedures and

sensitivity to customer satisfaction will guarantee that we retain loyalty among our large customer base and continue to hold the position of leader in the mar&et -aruti made purchasing a -aruti car easier and more affordable than ever before. -aruti now offers attractive vehicle finance options through its partnerships with leaders in the financial services industry.

-aruti Dountrywide Finance Diticorp -aruti Finance /td. People can also finance a -aruti through several other ban&s and financial institutions. 1nd if that8s not enough choice for you( their dealers offer a host of finance plans tailored to suit everyone%slifestyle and budget. -aruti believes that its relationship with the customer does not end with the purchase of a car. From its inception( -aruti was committed to providing an excellent networ&( that would facilitate customers in purchasing vehicles(

accessing spare parts(and getting their vehicles serviced.

17

Small Car Segment

-aruti8s dealer networ& is the largest for any car and

manufacturer

in *ndia.

!oday( their

strong dealer

service networ& consists of 2$) showrooms and 2'' dealer wor&shops( besides 1324 -aruti 1uthorised .ervice .tations covering $#$ cities.

18

Small Car Segment

DAE'OO MATI0 6esigned by ;iorgetto ;iugiaro. !he designer of dream cars li&e 3-:( /exus and more. !he Doncept 6evelopment of the -atiz began in the spring of 144#. !he basic ob"ective of the design was M -odern( European mono7volume styling. *nnovate a >ew trend in compact multi7utility vehicles. 1erodynamic .tyling with a wide purposeful stance. -ulti7functional capability that responds to customer needs. !he -atiz is more than "ust a car. *t8s a 1Mu(t!&Pur/"#e Ve*! (e12 -odular .eating Foldable 2ear .eat for extra space Fersatility and .pace. *ndia8s first compact car to meet EC2? ** standards. *ndia8s first compact car with factory fitted anty theft system A1!.B as standard feature.

19

Small Car Segment

*ndia8s first -PFi engine techonology in cars introduced by 6aewoo in 144#. .lee& metal grain finish instrument panel moulding(

?therwise found exclusively in much higher segment cars( introduced in compact cars for the first time in -atiz. Te *n! a( S/e !)! at!"n Engine Dontrol Emission Dontrol Electronic Dontrol Cnit :ith -P2 37way Datalytic Donverter with

ceramic @oneycomb substrate Power T"r3ue #2 bhp N $))) rpm 425 k$2% 6 5788 r/%

D!%en#!"n# 9 Ca/a !t!e#. :heelbase !rac& FrontO2ear /ength :idth @eight ;round Dlearance Jerb :eight Fuel !an& Dapacity @ead 2oom FrontO2ear 23 ) mm 131#O125) mm 3 4# mm 1 4# mm 1#)# mm 1') mm 5)) &g 3# litres 44#O43# mm

20

Small Car Segment

/eg 2oom FrontO2ear .houlder 2oom Su#/en#!"n. Front 2ear .teering !ype !urning 2adius Brake#. 6ual 6iagonal Dircuit Front 2ear !yre .ize -aximum .peed SANTRO 6isc 6rum

1)34O54# mm 12'# mm

-cPherson .truts *solated !railing /in&s 2ac& H Pinion .# m

1 #O') 213 Performance 1 &mph

!he .antro has been designed in Jorea by @yundai8s chief designer Par& Gong7.uh. !he distinguishing feature of the car is its uni0ue :ta(( ;",: design( which allows easy entry and exit. !he high driving position( large windshield and the 17pillar slope allows greater all7round visibility.

1part from the above( the .antro has several features for comfortable commuting 7

21

Small Car Segment

Front buc&et seats( rear moulded seats and ad"ustable headrests( which have been designed for upright and physiologically correct sitting position. Extra7large boot for extra luggage .eat variations to create extra7space

T*e Santr" *a# #e-era( a+-an e+ #a)et, )eature# (!ke. 6ual7member side impact protection Dhild safety rear door loc&s Drumple zone to absorb frontal impact 1 pair of ultra7high strength steel members built into the doors for additional protection against side7impact. Dollapsible steering column

!he car is powered by a 12F .?@D 1))) cc Epsilon engine. !he multi7point Fuel *n"ection .ystem with dual7inta&e valves feeds the right amount of fuel that the engine needs.!he .antro offers -cPherson .trut .uspension in the front with stabiliser bar( offset coil springs and hydraulic dampers. *n the rear you have torsion beam axle( 37lin& coil

22

Small Car Segment

springs and hydraulic dampers. !he car delivers exeptional value for money and is one of the best cars on the *ndian roads. D!%en#!"n# /ength :idth @eight Cnladen :eight ;round Dlearance :heel 3ase Power !ype 3 4# mm 1 4# mm 1#4) mm ''$ Jg 1'2 mm 235) mm @yundai Elipson Engine( *n7line cylinder 127Falve .?@D 7

Piston

6isplacement 444 cc -ax. Power -ax. !or0ue ## bhp N ##)) rpm 5. &gm N 2#)) rpm

Fue( S,#te% Mu(t!/"!nt Fue( In<e t!"n Fuel !an& !ype 3# litres !ransmission H ;ear 3ox -anual 7 # forward Aall

syncromeshB( 1 reverse

23

Small Car Segment

Su#/en#!"n Front 2ear -acPherson .trut with .tabilizer 3ar !orsion beam 1xle( 3 7 lin& ?ffset coil springs( @ydraulic dampers

Steer!n$ !ype !urning 2adius 3ra&es !ype Front 2ear T,re# !yre Per)"r%an e -ax..peed MARUTI 0EN !he uni0ue aerodynamic 9"ellybean9 design of the ,en offers greater 9driving pleasure9 as its distinctive feature. Powered by a 443 cc( lightweight all7aluminum water7cooled .?@D engine( the ,en can 7cylinder( a 13$ &mph .ize 1##O') 2 13 2adial 2ac& and pinion . metres

3ooster assisted dual circuit 6iscs .el71d"usting 6rums

generate

24

Small Car Segment

maximum power of #) bhp N $#)) rpm and combines a 0uiet drive with fuel efficiency and consistency. .uspensions are front 7 independent with coil springs( and rear 7 37lin& rigid axle with isolated trailing arms( coil springs and gas7filled shoc& absorbers. !he bra&es are booster assisted dual7circuit disc AfrontB and drum ArearB. Sa)et, e3u!/%ent !n (u+e#. /aminated windshield Front seat belts A3 point E/2 typeB .ide impact beams 3ody reinforcements

Other features include: -aintenance free electronic ignition 2emote operation of fuel7lid and rear7hatch Front buc&et7seats with long7sliding travel and reclining mechanism 2ear seat with fully foldable bac&rest

25

Small Car Segment

6etachable rear parcel tray for added convenience and security -oulded roof lining for improved 1D effectiveness and reduced noise levels. !he new $) 3@P ,en 7 a whole new driving experience. !he ,en( always a pleasure to drive( has "ust entered a completely new dimension of performance. *t has been in"ected with the best technology that .uzu&i( the world leader in compact car technology( has to offer.

1ll ,en models will now have the most advanced multi7point fuel in"ection A-PF*B engines in the mar&et. !he -PF* engines will give the ,en the following

performance advantages M M"re /"=er 7 !he -PF* ,en has a maximum power of $) 3@P( higher than any other car in the segment barring the :agon2. A *!$*er /"=er t" =e!$*t rat!" 7 !he ,en has a power to weight ratio that is significantly higher than competition( which ma&es more power available to the driver. !his means better pic&7up( easier uphill driving and superb air7 conditioning.

26

Small Car Segment

>? -a(-e# @A -a(-e# /er ,(!n+erB 7 !he new ,en has

valves per cylinder technology( greatly enhancing its fuel efficiency and ma&ing the engine more responsive with a smoother delivery of power. E(e tr"n! C"ntr"( M"+u(e =!t* >? ;!t "%/uter 7 !he

new ,en also comes with a 1$7bit computer( which gives you smarter engine management( better fuel efficiency and superior driving experience. @igher power to weight ratio delivers much more available power7for superb phenomenal pic&7up(easier Engine uphill driving and

air7conditioning

breathes

easier7delivers

more power(enhanced fuel efficiency and lower emmission levels. .marter engine management7provides total control(better fuel efficiency and superior drivimg experience. D!%en#!"n# /ength :idth @eight Jerb :eight ;round Dlearance 3 4# mm 1 4# mm 1 )# mm '3) Jg 1$# mm

27

Small Car Segment

:heel 3ase

233# mm

P"=er !ype Four stro&e cycle( 1luminium(

water cooled A.?@DB Piston 6isplacement -ax. Power -ax. !or0ue Fuel .ystem Fuel !an& 443 cc #) bhp N $#)) rpm '.2 &gm N #)) rpm

Darburettor type 3# litres

Tran#%!##!"n 9 Gear B"C !ype -anual( # forward AsyncromeshB 1 reverse .uspension Front 2ear *ndependent with coil springs 3 7 lin& rigid axle with isolated trailing arm( coil springs and gas7filled shoc&

absorbers

Steer!n$ !ype !urning 2adius 2ac& and pinion .4 metres

28

Small Car Segment

3ra&es !ype Front 2ear T,re# !yre .ize HYUNDAI

3ooster assisted dual circuit 6isc 6rum

1 #O')213

@yundai are aiming to be among the world8s best in technology and 0uality. !hrough steady progress in

technology( 0uality and expectations are rising all the time. Gust 3) years old( @yundai has already become a ma"or global player( with plants and dealerships that span six continents. !he @yundai ;roup is among the world8s largest and most diversified business organizations with #

affiliated domestic companies and 2#

overseas companies

in nearly 2)) countries. *n addition to automotive( @yundai is active in such varied industries as shipbuilding( steel( petrochemicals( heavy machinery( aerospace( electronics( and financial services. @yundai now operates eight research centers in Jorea along with four international centers( including @yundai 1merica

29

Small Car Segment

!echnical Denter( *nc. in 1nn 1rbor( -*.( and @yundai Dalifornia 6esign Denter in Fountain Falley( D1. !he

influence of the Dalifornia 6esign Denter can be clearly seen in the slee& lines of the first generation @yundai !iburon Doupe. !he company is currently pursuing the development of electric( solar( and cars hybrid as fueled as cars( compressed vehicle

natural

gas7fueled

well

intelligent

systems. @yundai8s creative talents have matured fast( and through bold( adventurous concept cars li&e the @D67*( **( and ***( you can expect only leading edge thin&ing from @yundai. *ndia is most important mar&et in @yundai and global expansion and will be the companies largest. *f share production based attracting an investment of '))I million and capacity of 12)))) cars. From day one( operations li&e sheet metal stamping and ensure and transmission

assembly are being done locally. 1nd it is estimated that rapid localization would give it an early cost advantage. @yundai also plans to use *ndia as a design based for future models and has set up and research and development center and test trac& at its factory.

30

Small Car Segment

1n intensive mar&et research in end of 144$( by @-* showed that demand for small( low cost cars would continue to be strong. 1t the dawn of 2)))( the two7and7half year old toddler( @-* has already assumed the position of second largest manufacturers in the country in terms of annual sales of cars. @-*( a wholly owned subsidiary of @- Dompany. Jorea began its *ndian venture with ob"ective of launching global products with future technology for customer delight.

!owards this( @-* has invested '))I million to set up a state of art integrated world class automobile

manufacturing plant in !rrunga @u&ohani near Dhennai and country wide dealer cum service networ& even before

launch of product A!he *renn plant has an installed capacity to manufacture 12)))) cars( with additional capacity to produce 13)))) units of engine and transmission sets. *t has an in7house aluminum foundry to manufacture

aluminum cylinder heads for engines+ a press shop to mould high tensile steel into re0uired body panel for cars. !he body shop has seven robots to handle precision "obs+ a paint shop that uses environment friendly water based paint

31

Small Car Segment

on three coat and three ba&e technology that offers high film thic&ness and paint durability.B !he dealer wor&shop including three co7owned outlets

called P@yn -otor PlazaQ provide a @y customer a one stop for meeting all his needs. @yn has decided to add to this networ& to increase the reach of dealer networ& is establish to provide7 ;iving you the best R 2 hours hot line system.

2ound the cloc& wor&shop service 2oadside service with town away facilities 2ound the cloc& help line facility. 1ny town service 1ll credit cards acceptance.

@yundai%s five7yearO13)))) &m warranty gives great piece of mind. @yundai is committed to establishing and

maintaining a positive relationship with all its customers( not only at the time of purchase( but in regular

maintenance of vehicles.

32

Small Car Segment

PRICING
*n any business( nothing is more dangerous than using money as the magnet for attracting customsers. *t &ills loyalty( mangles margins( and encourages defections. 3ut it is the Cni0ue .elling Price the only road to success in the intensely7competitive automobiles businessS !hose in the race for winning over the 2s. '(#))7crore small cars mar&et seem to be believe so. :e have seen -aruti Cdyog /td A-C/B announcing first ever price cuts R from 2s $(445 to 2s 3$(5)5 on its different models R to deflect attention from the launch of the !elco%s *ndica. *t was( of course( @yundai -otors that had set the pace by putting a tic&et of 2s 2.44 la&h on the basic model of its .antro. !hen( even as customers rubbed their eyes in disbelief at the *ndica%s 2s 2.#4 la&h entry price. *n the small car segment( the only LP% that( suddenly( seemed to matter was the second in the Product7Price7Promotion7Place mar&eting7mix. Evidently( features( technology( and service are secondary. 1nd the only warhead is price. 1ccording to the 2esearch 1nalyst( -organ .tanley( PPrice is the most important LP% in this mar&et

33

Small Car Segment

because it is pyramidal in structure( with a huge base and a narrow apexQ. Everything else remaining constant( the purchase decision of the first7time buyer is influenced by the factorsM Price( Price( Price

and Price. !he first is the price of ac0uisition. !he second is the price of finance( or the rate of interest on a loan to buy a car. !hird is the price of maintenance( which includes the cost of fuel( service( and spare parts. 1nd the fourth is the price of disposal( or the re7sale value of the car. !he typical *ndian car7buyer is obsessed with post7purchase pricing. :hich is( in effect( the cost of maintenance and the possible re7sale value. 1nd obviously( the lower the selling price of a second hand model( the less is the purchaser%s incentive to opt for it. @owever( not every company plays the price7card. *nstead of cutting the price of .antro( @yundai -otors has launched an enhanced version with product fearures li&e power steering( and product7plus features li&e better service and customer7care. @yundai arrived at the pricing strategy after a careful analysis. *t does not believe in &nee7"er& reactions to rival moves. *t also believes that when features are the C.P( second P -ar&eting cannot help reinforce that position. .trategic price mar&eting is a corporate weapon that must be applied in the context of an entire

34

Small Car Segment

portfolio of cars. 1ttempting to sell the lowest priced car in every segment will not enable a company to survive. @yundai realsied the difficulty to compete in the car mar&ets and decided to go for sharp differentiation strategy. *n order to avoid the price game( it decided to reinforce the individualistic positioning of the brand and tried to match the customer%s perception that the car is commodity using other differentiators. @yundai opted against the drop in prices( one reason being the fact that( buyers are shopping for brand associations and customers are unli&ely to let their decisions be swayed by savings of a few thousands. .ure( the lower price will be an attraction to the first7time buyer who is( essentially( stretching his budget to buy personal transportation. !he less the stretch( the more is the li&elihood of actually buying a car instead of( say( a two7wheeler. .o( even a drop of 2s.1))) in the small cars segment could expand its size. ;o beyond the entry level R and the price7value e0uation will &ic& in immediately. ?nly if all other things are perceived to be e0ual between competing brands will price be a decider. ?nce incomes start rising again( there will emerge increasing numbers of upgrades as well as first7time buyers who will not necessarily

35

Small Car Segment

start at the lowest price7level. !hus( price will become less important. 1pplied as a brand7level strategy( price may help the auto7mar&eters win over only the entry7level customer. @owever( only the lowest priced player will mil& this segment. !he rest of the low7price aspirants will have to offer additional features as value to convince the budget7buyer to spend more. 1s a corporate strategy( leading the charge through price may have a better pay7off. 1 low Rpriced product will enable new entrants to gain entry into the consumer%s garage. !he threat( however( is that of a dangerous dilution of image. !hus price can be a selling proposition for only one segment of customers. 3ut a company that see&s life7long customers( who progressively move up its product ladder( cannot rely on price alone for success. !he response of the customers to the .antro seems to indicate a mar&et in the small car segment( which is prepared to pay premium for a superior features and performance. .antro and launch of 1ccent appear to be a conscious effort on @yundai%s part to meet the needs of different customers in the small car mar&et. -aruti%s response of cutting down on price seems to be a defensive measure aimed at retaining mar&et share by

36

Small Car Segment

concentrating on the price sensitive mar&et segment. !he @yundai has stretched both price and feature thresholds and created mar&et for itself. Entry of @yundai has changed the very nature of the competition as it has introduced contemporary product into the mar&et.

37

Small Car Segment

RESEARCH METHODOLOGY
1 research design is the arrangement of condition for collection and analysis of data in a manner that to( combine relevance to research purpose with economy in procedure. 2esearch6esign is conceptual structure within which

research is conducted. *t constitutes the blue print of collection( measurement and analysis of date.

2esearch6esign is needed because it facilitates the smooth sailing of various research operations( thereby ma&ing research as efficient as possible yielding

maximum information with minimum time( effort and money. 2easearch6esign stands for advance planning of methods to be used for collecting relevant data and techni0ues to be used in the analysis .!he design helps researcher to organize his ideas whereby it will be possible for him to loo& for flaws and inade0uacies. Following 0uestions have to be as&ed in 2esearch6esign 1. :hat is the study aboutS 2. :hy is the study being madeS

38

Small Car Segment

3. :here will the study be carried onS . :hat type of data is re0uiredS #. :here can data be foundS $. :hat periods of time will the study includesS '. :hat will be the sample designS 5. :hat techni0ues o data collection ill be usedS 4. @ow will data be analyzedS MAJOR OBECTIVES OF THE PROJECT '. Examine the psychographics of potential small size car customers. 5. 4. Probe the buying behavior of car owners. Find people expectations or satisfaction regarding the small cars. 1). !o "udge the awareness level of small cars.

39

Small Car Segment

.ources of primary and secondary dataM !he ma"or aim of the pro"ect was to analyze the

competition of different car brands in the mar&et. !herefore we had to get considerable information about the competing small cars. For this we had to go through a lot of secondary data. 1 lot of issues of auto *ndia( -otoring and -otor *ndia were consulted Aone ma"or source of information was the 1uto Expo 2))1B 1 comparison of small size cars is given in the table. .ince the research aims at finding the attitude of people towards the different brands of cars( a conclusive research was conducted. !he data collection form was designed in the form of a standard 0uestionnaire because a it is more reliable than unstructured format. 3y reducing the chance or the sample to influence results through different 0uestions and through different "udgment of answers and what to record( the structured 0uestionnaire produces more reliable results i.e. if the research pro"ect is repeated obtained. in the same manner( similar results will be

40

Small Car Segment

-ost of the 0uestions as&ed in he 0uestionnaire were closed ended with a few open7ended 0uestions also( to &now consumers general views. .ome 0uestions are designed for the purpose of cross chec&ing the samples genuineness in filling the 0uestionnaire. For the purpose of analysis( ran&ing scale is used to ran& the preferences of attributes of the customers. A.emantic differential scale is used to understand the images of brands of cars as perceived by the consumers. !his scale is used because it permits the development of descriptive profiles items.B Un!-er#e. !he universe is entire group of items the that facilitates the comparison of competitive

researchers wish to study and about which they plan to generalize. For this( the universe consists of people of 6elhi who own small car. .electing the sampleM for this pro"ect( a probability sampling method is used. Probability sampling method is those in which every item in the universe has a &nown chance of being chosen in the sample. @ere the sample size consists of $) residents of 6elhi. !he

probability sampling is preferred becauseM

41

Small Car Segment

*t is the only sampling method that provides essentially unbiased estimates having measurable precision. *f the investigator re0uires this level of ob"ectivity( then some variant of probability sampling is essential. !he probability sampling permits the researchers to

evaluate in 0uantitative terms( the relative efficiency of alternate sampling techni0ues in a given situation.

Csually this is not possible in non7probability sampling.

42

Small Car Segment

ANALYSIS
.ample size 2espondents M ?wners of .antro ?wners of ,en ?wners of -atiz O=ner# ") D88 ?wners of other cars R 1 77 1 R 1 E F R 4 R $)

43

Small Car Segment

-ost of the respondents are in an income brac&et of

NO.FRESPDT
2s.2)))1 to 2s.2#))) and above 2s.2#))).

05123

SANTROWE RESPONDT

MATIZOWNERS

ZENOWRS

80OWNERS

OTHERCAWNS

!his indicates

that most of the car owners belong to either upper of upper middle class segment. Performance of a car clearly outweighs its style and cost on the consumer%s list of priorities to buy a car. Performance

44

Small Car Segment

be it engine ma&e up( fuel efficiency in city conditions( smoothness( pic& up( driveability( is consumer%s first

preference in their loo& out on attributes in ma&ing a decisions fro buying a car. Fery few consumers surveyed 1 mere

gave style and cost as their priorities to buy a car.

2#< of respondents gave style and 3)< gave cost as their reasons to buy a car. 5#< of respondents i.e. #1 out of $) respondents gave performance of a car as a factor for ma&ing a purchase decision. ?ut of a total of $) respondents surveyed( 3) respondents gave performance( ' performance and style( 11

performance and cost( 2 style( cost and performance( gave style and their car. :hen the consumers were as&ed to ran& the factors( they consider to be important in buying a car( ran&ing the factors from 1 to ' where L1% is the highest preference ran& L'%( the lowest preference ran&( performance of the car was ran&ed the highest on the preference scale. Performance( gave cost as the reasons for purchasing

on an average of $) respondents was ran&ed L1. 5% showing that the consumers sought performance in a car as the first important factor in ma&ing a purchase.

45

Small Car Segment

!he cost and low maintenance of a car were considered by the car owners as the second most important factors ran&ing them 2.4 and 2.' respectively. 1fter sales service and brand name were the third and fourth preferences of the respondents with 3. their respective ran&ings. .afety was ran&ed and 3.5$ as .3# on the

preference scale and credit facility stood at the car owners% lowest preference with a ran& of $. 3. ;iven the city conditions( the consumers needed a very good overall performance of cars( small cars ta&ing less space has no par&ing problems( easy driveability in heavy traffic conditions( easy gear shifts and good fuel efficiency. !he small car owners being mostly the professional class or the upper middle class were very cost conscious and due to their busy life styles preferred low maintenance in their cars. !he small car consumers are high search information

see&ers( most of them using at least 3 sources of see&ing the information. !hey believe that extensive search is

necessary to ma&e a good buy. @aving owned fewest carts previously( they had very less information about the cars.

46

Small Car Segment

!he survey showed that a highest number of consumers sought friends as a source of information. Even as a

ma"ority of them went for magazines and other car owners as a source of see&ing information( a good number of consumers went to dealers for getting the information. !elevision as a source of information was used by less number of consumers and a very few of them went to mechanics in search of information. -ost of these small car buyers being first time purchasers usually go for friends( automobile magazines or other car owners to get information about the various products and brands in the mar&et to &now the most favourable brand or products and later they see& further information from dealers and other sources once they are through their choice process and have decided upon a particular brand or brands to buy. -ost of the small car consumers are happy with their purchases. 1 probe into respondents% satisfaction level(

ran&ing from 1 to # where L1% was full satisfaction and L#% full dissatisfaction with theirs cars( gave L1.'4% as an average figure of satisfaction level.

47

Small Car Segment

?ut of a total of $) respondents( 2$ ran&ed their

satisfaction level as L1%( 2) ran&ed L2%( 4 ran&ed L3%( 2 ran&ed L % and only one respondent showed null

satisfaction. !he main reasons which were 0uoted for their satisfaction were driving comfort( good fuel efficiency( small is cute( easy par&ing( less maintenance( good pic&7up and a perfect car for a small family. 1gain when the consumers other car( were the as&ed highest about their of

preference

for

any

number

respondents chose small cars( that is a 2) out of #$ respondents preferred small cars( midsize cars( 1$ large size cars( # went for "eep models and 5 consumers luxury cars li&e 3-:( -ercedes( Ferrari( etc. !he main reason

again given for their preference was comfort of driving( performance( good loo&s and fuel efficiency. 1n advertisement recall exercise conducted in the survey on the advertisement of the 3 companies( @yundai( 6aewoo and -aruti showed recall that @yundai had the highest with #5

advertisements

through

televisions

respondents and 6aewoo with #

respondents.

48

Small Car Segment

-agazines were the second advertisement reminder for all the three companies( followed by newspaper. trend could be that noticed( is 3' where a high said 1 change in number that of they

respondents(

respondents

remembered seeing a -aruti%s advertisement as @oardings( whereas this number was very less for @yundai and 6aewoo at 14 and 1# respondents only remembering having seen hoardings of these two . !he brand recall exercise using the punch lines of different brands vis Fiat Cno( -aruti ,en( @yundai .antro and 6aewoo -atiz showed that ')< of respondents were successful in recalling -atiz punch line( whereas $#<

respondents got .antro%s punch line and a mere 2#< and 25< respondents could lines. -atiz and .antro with their intensive advertisement recall -aruti%s and Cno%s punch

campaigns and highlighting punch lines in advertisements( posters( @oardings( sponsorships( etc. have been able to create brands. an immediate response in consumers for their

49

Small Car Segment

!he most interesting part of the research being the brand appeal part of it( where four celebrities( .hahru&h Jhan( @rithi& 2oshan( 1ishwarya 2ai and 2ani -u&her"ee were given and respondents and respondents were as&ed to suggest any car which came to their mind. 1lmost all the

respondents named .antro for .hahru&h &han. @yundai has almost positioned .antro as .hahru&h Jhan%s car and his personal choice through the advertisement where .hahru&h himself narrates the supervisor performance of car. 1ny

other brand of car could not catch up with such a familiarity of a car with a celebrity. For @rithi& 2oshan most of the people preferred tough loo&ing cars li&e 3-:( 3olero( .afari( Pa"ero( .umo( @onda sports car etc. 2espondents preferred cars appealing to 1ishwarya gave people an

@rithi&%s macho personality.

appeal of slee& beauty through cars li&e /ancer( Ferrari( ,en( -atiz( -ercedes( etc. 2ani -u&her"ee stole away

respondents minds with small car li&e ,en( -atiz( .antro( Cno and cute( sometimes a bit bul&y li&e ambassador and van. 1 perceptual ran&ing of various attributes of ,en( -atiz( and .antro was also ta&en. 1 total analysis of people%s

50

Small Car Segment

average ran&ings showed people%s perceptions about

various attributed li&e safety( performance( comfort( luxury of the 3 cars. 1ll these small cars being of same made and model showed very less variances in perceptions of people regarding their safety( comfort( luxury and overall

performance with ran&s ranging between L2% and L3% showing moderate satisfaction. 1 change in consumer%s perceptions could be noticed when .antro was ran&ed L3.2% showing a slight disagreement with its good loo&s. -atiz was ran&ed L1.'% satisfactory agreed to be easily manoeuvrable. ,en was ran&ed L1.$% for L1fter sales service% showing that it has a very good aftersales service.

51

Small Car Segment

CONCLUSIONS AND RECOMMENDATIONS

Donsumers of small cars are see&ing a very good overall performance in a car than any other attributes. -ost of the consumers prefer .mall cars and mid sized cars for their good mileage( good acceleration( easy driveability( re0uiring small rooms for par&ing. ;ood loo&s hardly count for the buyers of small cars. 1gain a good aftersales service and low maintenance in a vehicle is a garnish on customer%s delight. .afety and credit facility are almost ignored factors in purchasing a small car. Family wields the highest influencing power in ma&ing a purchase decision for an *ndian consumer. Friends and media also have a good impact on decision7ma&ing. 1 very few consumers ta&e a self7purchase decision. Csually consumers get detailed information through friends( magazines( other car owners and dealers whereas( they get the product information from the other sources li&e

television( hoardings etc. Doming to the various brands ta&ing for research( -aruti has got the highest advertisement coverage followed by

52

Small Car Segment

@yundai and 6aewoo. -aruti( being a relatively old

company in *ndia and having ruled the car mar&et for almost a decade have created such a brand of awareness that( it will be difficult for other cars to fray it out easily. -aruti already has lost its mar&et share from 5)< to #)< this year and @yundai has reached a successful sales figure reaching $#))) customers and got the best Psmall

carQ award by G.6 power 1sia Pacific 2))) for 0uality.!his gives -aruti a fight to retain its leadership position.

6aewoo is still in a dormant stage re0uiring boosts in its sales. -atiz and .antro has outscored ,en and Cno in brand recall with their scintillating mar&eting and advertising strategies and made their punch lines( P1dd spice to lifeQ and a PDomplete family carQ more conspicuous. .antro has

created a niche position for itself as a celebrity%s car( .hahru&h .hahru&h Jhan%s Jhan car. !heir advertisement the car( showing its

sponsoring

showing

unmatchable features have made .antro synonymous to .hahru&h Jhan. ,en as compared to -aruti 5)) was not able to create such a brand name in the minds of consumers. ,en needs to

53

Small Car Segment

reposition itself and ma&e a fresh entry into the car mar&et with a couple of new media clippings to stand the

competition. ,en and santro are perceived as cars with a more feminine appeal. @ence they need to be positioned as the cars for today%s women. !he dream cars of the consumers are high luxury cars li&e -ercedes .7class( 3-:( Ferrari( Pa"ero( 2olls 2oyce(

Gaguar( Porsche( the cars with a class apart when it comes to their brands images( cars which flaunt status( style( wealth and attitude of the people owning them( cars which are considered to the best on the globe.

54

Small Car Segment

ANNEXURES

FACTORS IMPORTANT IN A CAR PURCHASE

COST 3% 3% 7% 18% 7% STYLE PERFORMANCE PERFORMANCE AND STYLE PERFORMANCE AND COST STYLE AND COST STYLE COST AND PERFOMANCE

12% 50%

55

Small Car Segment

FACTORS IMPORTANT IN A CAR PURCHASE 90 80 70 60 50 40 30 20 10 0 1 ATTRIBUTES

PERCENTAGE OF RESPONDENTS

PERFORMANCE STYLE COST

56

Small Car Segment

RESPONDENTSG RANKING OF ATTRIBUTES

PREFERENCE RANK 1 2 3 PREFERENCE POINTS 1 ) 12) 1)) 5) # $ ' $) ) 2)

Attr!;ute# Performance Dost /ow -aintenance 1fter .ales .ervice 3rand >ame .afety Dredit Facility

Pre)eren e Rank 1.# 2.4 2.' 3. 3.5 . $.

Pre)eren e P"!nt# 13) 1)2 1)$ 42 5 '2 32

57

Small Car Segment

CREDIT FACILITY PREFERENCE POINTS SAFETY RAND NAME AFTER SALES SERVICE LOW MAINTENANCE COST PERFORMANCE 0 20 40 60 80 100 120 140

ATTRIBUTES

58

Small Car Segment

SOURCES OF INFORMATION
40

35

30 NUMBER OF RESPONDENTS

25

20

15

TELEVISION MA!AZINE FRIENDS DEALERS MECHANIC OTHER CAR OWNERS

10

0 1 SOURCE OF INFORMATION

59

Small Car Segment

INFLUENCING FACTORS IN DECISION MAKING

80 70 60 50
PERCENTAGE OF RESPONDENTS

40 30 20 10 0 1 INFLUENCERS

FRIENDS FAMILY MEDIA OTHERS

60

Small Car Segment

A D R T E V M E E IS T R N C A E O F L Y U H A I D N N U E R B M F E O O N P S E TS D 7 0 6 0 5 0 4 0 3 0 2 0 1 0 0 A A M ! ZIN

E A L V TE D O N TIS R E M TV E S HH E A R O !IC IN D LE

S P W E N R E A

ADVERTISEMENT RECALL OF HYUNDAI

70

60

NUMBER OF RESPONDENTS

50

40

30

20

10

0 MA!AZINE

TELEVISION

HOARDIN!

NEWSPAPER

ADVERTISEMENT VEHICLE

61

Small Car Segment

62

Small Car Segment

BRAND RECALL
80 70 60 50 40 30 20 10 0 MATIZ SANTRO CAR ZEN "NO

% OF RESPONDENTS

63

Small Car Segment

ADVERTISEMENT RECALL OF MARUTI

M A! AZ IN

ADVERTISEMENT VEHICLE N TE EW H LE O SP AR VI AP SI D IN O ER N ! 0

20

40

60

NO. OF RESPONDENTS

64

Small Car Segment

BIBLIOGRAPHY
Re)eren e ;""k#. Donsumer behaviour. 3y Gohn D. -owen -acmillan

publications. -ar&et research 3y !ull and @aw&ins Internet. www.marutiudyog.com www.daewoomtrs. com www.hyudaimotorindia.com www.autoweb.com Ma$aH!ne#. 1uto Dar 2))3 1uto *ndia Ganuary 2))2 1uto *ndia 6ecember 1444 *ndia !oday 14 th ?ctober 1445

65

Small Car Segment

IUESTIONNAIRE
1 survey of consumer perception about small cars Personal details >ame >o. of members in family -onthly household income 1. 6o you own APlease tic&B 2. *f you do own a car >ame -odel Dolour 3. 1re you satisfied with itS . @ow much do you spend on maintenance on a monthly basisS #. >ame some cars in the small car segment in *ndia $. Dan you relate the following cars to their ads -atiz ,en *ndica .antro Dar 2 wheeler

'. 2ate the following A* to **B attributes according to you preferences while buying a new car Price /oo&s .afety features *nteriors Falue added accessories Dolor .tability while driving /ow maintenance costs Fuel efficiency 3oot space

66

Small Car Segment

;ear box

5. Domment on the following statements according top the tables given below 1 strongly agree 27 agree 37neither agree nor disagree 7disagree #7 strongly disagree *ndia( being the only indigenously made car is preferred by me * will go for a -atiz for * li&e it on its loo&s

.antro has the most effective 1D Cno discal is till date the best acr

on *ndian roads in its

category .en has the most "azzy and outgoing colours

4. 2ate the following cars as per your perception on the basis of the attributes specified A# excellent to 1 poorB *ndia -atiz .antro ,en 1. .ales and services 2. Price 3. Fuel efficiency . .mooth and stable ride #. Cpmar&et status $. /uxury '. Falue for money 5. /oo&s 4. Financing facility 1). Domfort 11. .afety 1). 1re you planning to buy a car within next O#$ %&#'( !wo months $ months 1 year

67

Small Car Segment

11. :hich oneS 12. :hyS 13. Domment on the following cars as to how can there be any improvements *ndica -atiz .antro ,en

68

Small Car Segment

Project Report On

STUDY ON THE SMALL CAR SEGMENT IN INDIA

Project Guide :
MR. SUMITRO SEN GUPTO Ms. MADHUMITA

Submitted by:
YAMEEN KINAH NIS ACADEMY

69

Small Car Segment

ACKNO'LEDGEMENTS
* want to ac&nowledge my than&s to my trainer -r..umitro for giving me this opportunity to select this pro"ect. * also want to than& -rs.-adumita for helping me to ma&e this pro"ect a successful research. * am than&ful to my classmates for helping me with

reference boo&s and material as and when re0uired. * am very grateful to -r.2a" Jochar( Dhief -anaging

6irector( Dompetent -otors /td+ -aruti udyog ltd+ for providing me all the information we needed from the company to accomplish the pro"ect.

70

Small Car Segment

71

Small Car Segment

INDEX
TOPICS 1DJ>?:/E6;E-E>!. ?3GED!*FE. ?F P2?GED! .D?PE 1>6 /*-*!1!*?>. ETEDC!*FE .C--12= *>6C.!2= 31DJ;2?C>6 D?-P1>= 1>6 P2?6CD! P2?F*/E P2*D*>; 2E.E12D@ -E!@?6?/?;= 1>1/=.*. D?>D/C.*?>. H 2ED?--E>61!*?>. 1>>ETC2E 3*3/*?;21P@= UCE.!*?>>1*2E 1 2 37 #75 4732 3373' 357 2 37#) #17#3 # 7$3 $ $#7$' PAGE NO2

72