Vol.1,Issue.VI/March; 12pp.

1-4
Review Of Research
ROR (1),
There is very high sales scope Automobile
industry in next few years. Customers buying
behavior is most important thing to understand the
latest trends in the market. Automobile section, a
surge in economic growth rate and purchasing
power led to growth in the Indian automobile
industry. The Paper provides the knowledge about
the emerging Indian small car market and the
current trend in market. The study also provides
latest developments in this segment. The main
objectives of this study are to study small car
segments of Indian automobile industry and make
the strategies for different automobiles to attract
more customers. To understand the major driving
forces the consumer looks in when buying the car.
Keywords: Car Market, competitive price,
automobile sector, Supply Chain, Market trend.
Introduction:
Starting its journey from the day when the
first car rolled on the streets of Mumbai in 1898,
the Indian automobile industry has demonstrated a
phenomenal growth to this day. Today, the Indian
automobile industry presents a galaxy of varieties
and models meeting all possible expectations and
globally established industry standards. Some of
the leading names echoing in the Indian
automobile industry include Maruti Suzuki, Tata
Motors, Mahindra and Mahindra, Hyundai
Motors, Hero Honda and Hindustan Motors in
addition to a number of others.
During the early stages of its development,
Indian automobile industry heavily depended on
foreign technologies. However, over the years, the
manufacturers in India have started using their
own technology evolved in the native soil. The
thriving market place in the country has attracted a
number of automobile manufacturers including
some of the reputed global leaders to set their foot
in the soil looking forward to enhance their profile
and prospects to new heights. Following a
temporary setback on account of the global
economic recession, the Indian automobile market
Research Papers
Abstract
The small car market in India is increasing by leaps and bounds. Today's fierce competition in
small car market and the similarity of products of different small manufacturers providing similar features
available at highly competitive prices.
Rising incomes, better financing for vehicles and improved roads are the combined drivers for strong
growth of the automotive sector in India. The major players in this sector are TATA Motors, Maruti-Suzuki India
Ltd, Hyundai Motors India Ltd etc and new entrants like volkswagen and Nissan. The project is undertaken to view
the strategies undertaken by different automobile companies to attract customers and to understand the current
scenario of small cars in India and future trends in this sector. Also to conduct research analysis to understand the
major driving forces the consumer looks in when buying the car.
Dr. Govind P. Shinde
ISSN:-2249-894X
MARKETING STRATEGIES FOR SMALL CAR SEGMENT
IN INDIA
R
R
Dr. Kumardatt A. Ganjre
Director
Akole Taluka Education Society's,
Technical Campus,
Akole (Affiliated to Pune University,
Pune)
Dr. Govind P. Shinde
AssociateProfessor
Bharati Vidyapeeth School of Distance Education
Center Navi Mumbai
Vol.1,Issue.VI/March 2012;
ROR (2),
has once again picked up a remarkable momentum
witnessing a buoyant sale for the first time in its
history in the month of September 2009.
The automobile sector of India is the seventh
largest in the world. In a year, the country
manufactures about 2.6 million cars making up an
identifiable chunk in the world's annual production
of about 73 million cars in a year. The country is
the largest manufacturer of motorcycles and the
fifth largest producer of commercial vehicles.
Industry experts have visualized an unbelievably
huge increase in these figures over the immediate
future. The figures published by the Asia
Economic Institute indicate that the Indian
automobile sector is set to emerge as the global
leader by 2012. In the year 2009, India rose to be
the fourth largest exporter of automobiles
following Japan, South Korea and Thailand.
Experts state that in the year 2050, India will top
the car volumes of all the nations of the world with
about 611 million cars running on its roads.At
present, about 75 percent of India's automobile
industry is made up by small cars, with the figure
ranking the nation on top of any other country on
the globe. Over the next two or three years, the
country is expecting the arrival of more than a
dozen new brands making compact car models.
Volkswagen, Honda, and Hyundai, have
declared significant expansion plans. On account
of its huge market potential, a very low base of car
ownership in the country estimated at about 25 per
1,000 people, and a rapidly surging economy, the
nation is firmly set on its way to become an
outsourcing platform for a number of global auto
companies. Some of the upcoming cars in the India
soil comprise Maruti A-Star (Suzuki), Maruti
Splash (Suzuki), VW Up and VW Polo
(Volkswagen), Bajaj small car (Bajaj Auto), Jazz
(Honda) and Cobalt, Aveo (GM) in addition to
several others.
Multi-national companies in India: ,
, , , , ,
, , , ,
, - .
The beginnings of automotive industry in
India can be traced during 1940s. After the nation
became independent in the year 1947, the Indian
Government and the private sector launched their
efforts to establish an automotive component
manufacturing industry to meet the needs of the
automobile industry. The growth of this segment
was however not so encouraging in the initial stage
and through the 1950s and 1960s on account of
nationalization combined with the license raj that
Audi
BMW Fiat Ford Motors General Motors Honda
Hyundai Toyota Skoda Mitsubishi Motors
Mercedes-Benz Renault Nissan
MARKETING STRATEGIES FOR SMALL CAR SEGMENT IN INDIA
was hampering the private sector in the country.
However, the period that followed 1970s,
witnessed a sizeable growth contributed by
tractors, scooters and commercial vehicles. Even
till those days, cars were something of a sort of a
major luxury. Eventually, the country saw the entry
of Japanese manufacturers establishing Maruti
Udyog. During the period that followed, several
foreign-based companies started joint ventures
with Indian companies.
In 1953, the and the
Indian initiated manufacturing
processes to help develop the automobile industry,
which had emerged by the 1940s in a nascent form.
Between 1970 to the economic liberalization of
1991, the automobile industry continued to grow at
a slow pace due to the many government
restrictions. A number of Indian manufactures
appear ed bet ween1970- 1980.
manufacturers entered the Indian market
ultimately leading to the establishment of
. A number of foreign firms initiated joint
ventures with Indian companies.
Overview Performance of Indian
Automobile Industry: The automobile sector of
India is the seventh largest in the world. In a year,
the country manufactures about 2.6 million cars
making up an identifiable chunk in the world's
annual production of about 73 million cars in a
year. The country is the largest manufacturer of
motorcycles and the fifth largest producer of
commercial vehicles. Industry experts have
visualized an unbelievably huge increase in these
figures over the immediate future. The figures
published by the Asia Economic Institute indicate
that the Indian automobile sector is set to emerge
as the global leader by 2012. In the year 2009,
India rose to be the fourth largest exporter of
automobiles following Japan, South Korea and
Thailand. Experts state that in the At present, about
75 percent of India's automobile industry is made
up by small cars, with the figure ranking the nation
on top of any other country on the globe. Over the
next two or three years, the country is expecting
the arrival of more than a dozen new brands
making compact car models. Recently, the
automotive giants of India including General
Motors (GM), Volkswagen, Honda, and Hyundai,
have declared significant expansion plans.
On account of its huge market potential, a
very low base of car ownership in the country
estimated at about 25 per 1,000 people, and a
rapidly surging economy, the nation is firmly set
on its way to become an outsourcing platform for a
government of India
private sector
Japanese
Maruti
Udyog
Review Of Research
Vol.1,Issue.VI/March 2012;
ROR (3),
number of global auto companies. Some of the
upcoming cars in the India soil comprise Maruti A-
Star (Suzuki), Maruti Splash (Suzuki), VW Up and
VW Polo (Volkswagen), Bajaj small car (Bajai
Auto), Jazz (Honda) and Cobalt, Aveo (GM) in
addition to several others.
Automobile industry in India is one of the
fastest growing automobile industries and has
made its position in the world market.The Indian
automobile Industry is currently growing at a
remarkable pace of around 18 % per annum. The
technological changes and progress successfully
led to the progress of automobile sector in India.
The main reason behind this tremendous progress
is the economic liberalization by Indian
government.
The Indian Automobile industry is
growing in all respects and it is also serving as an
important source of employment. Innovation and
new product launches are a major factor driving
growth in sales of cars. A wide distribution &
service station network is a key to growth in India.
The automobile sector is expected to witness
strong growth and improve its share in global
markets too.
Aim and objective of the study :
The study provides the knowledge about
the emerging Indian small car market and the
current scenario of this segment. The study also
provides latest developments in this segment. The
main objectives of this study is as follows
To study small car segments of Indian
automobile industry.
To study the strategies taken by different
automobiles to attract more customers.
To understand the major driving forces the
consumer looks in when buying the car.
Research Methodology:
Research methodology is considered as the
nerve of the project. Without a proper well-
organized research plan, it is impossible to
complete the project and reach to any conclusion.
The project was based on the survey plan. The
main objective of survey was to collect appropriate
data, which work as a base for drawing conclusion
and getting result.
Therefore, research methodology is the
way to systematically solve the research problem.
Research methodology not only talks of the
methods but also logic behind the methods used in
the context of a research study and it explains why
a particular method has been used in the preference
of the other methods
MARKETING STRATEGIES FOR SMALL CAR SEGMENT IN INDIA
Research design:
Research design is important primarily
because of the increased complexity in the market
as well as marketing approaches available to the
researchers. In fact, it is the key to the evolution of
successful marketing strategies and programmers.
It is an important tool to study buyer's behaviour,
consumption pattern, brand loyalty, and focus
market changes. A research design specifies the
methods and procedures for conducting a
particular study. According to Kerlinger,
Research Design is a plan, conceptual structure,
and strategy of investigation conceived as to
obtain answers to research questions and to control
variance.
Type of Research is:
Descriptive Research
The type of research adopted for study is
descriptive. Descriptive studies are undertaken in
many circumstances when the researches is
interested to know the characteristic of certain
group such as age, sex, education level, occupation
or income. A descriptive study may be necessary in
cases when a researcher is interested in knowing
the proportion of people in a given population who
have in particular manner, making projections of a
certain thing, or determining the relationship
between two or more variables. The objective of
such study is to answer the who, what, when,
where and how of the subject under investigation.
There is a general feeling that descriptive studies
are factual and very simple. This is not necessarily
true.
Descriptive studies are well structured:
An exploratory study needs to be flexible
in its approach, but a descriptive study in contrast
tends to be rigid and its approach cannot be
changed every now and then. It is therefore
necessary, the researcher give sufficient thought to
framing research.Questions and deciding the types
of data to be collected and the procedure to be used
in this purpose. Descriptive studies can be divided
into two broad categories: Cross Sectional and
Longitudinal Sectional. A cross sectional study is
concerned with a sample of elements from a given
population. Thus, it may deal with household,
dealers, retail stores, or other entities. Data on a
number of characteristics from sample elements
are collected and analyzed. Cross sectional studies
are of two types: Field study and Survey. Although
the distinction between them is not clear- cut, there
are some practical differences, which need
different techniques and skills. Field studies are
ex-post-factor scientific inquiries that aim at
Review Of Research
Vol.1,Issue.VI/March 2012;
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finding the relations and interrelations among
variables in a real setting. Such studies are done in
live situations like communities, schools,
factories, and organizations.
Another type of cross sectional study is survey
result, which has been taken by me. A major
strength of survey research is its wide scope. Detail
information can be obtained from a sample of large
population. Besides; it is economical as more
information can be collected per unit of cost. In
addition, it is obvious that a sample survey needs
less time than a census inquiry. Descriptive
research includes survey and fact finding enquiries
of different kinds of the major purpose.
Descriptive research is description of the state of
affairs, as it exists at present. The main
characteristic of this method is that the researcher
has no control over the variables; he can only
report what has happened or what is happening.
The methods of research utilized in descriptive
research are survey methods of all kinds including
comparative and co relational methods. The reason
for using such needs to be flexile in its approach,
but a descriptive study in contrast tends to be rigid
and its approach cannot be changed ever now and
then.
Limitations:
Every study has certain limitations. In my
study, also there were certain limitations, which I
could not able to solve.
The research was conducted in a very small
area.
Time factor was also important for me.
The sample size is also very small which
represent my research on consumer behavior.
Data collection tools:
After the research problem, we have to
identify and select which type of data is to
research. At this stage; we have to organize a field
survey to collect the data. One of the important
tools for conducting market research is the
availability of necessary and useful data.
Primary data: For primary data collection,
we have to plan the following four important
aspects.
Sampling
Research Instrument
Secondary Data - The Company's profile,
journals and various literature studies are
important sources of secondary data.
Data analysis and interpretation
1. Questionnaires
2. Column chart
Questionnaires: This is the most popular tool for
MARKETING STRATEGIES FOR SMALL CAR SEGMENT IN INDIA
the data collection. A questionnaire contains
question that the researcher wishes to ask
his4.)respondents which is always guided by the
objective of the survey.
Column chart:
This is another way of representing data
graphically.
Analysis & Interpretation of data:
1.)
Interpretation:
Out of 50 people only 18 people had people had car
and others didn't.
2.)
Interpretation:
From the above table it is clear that Maruti is the
most preferred brand in India followed by Hyundai
and Tata. New brands like Volkswagen and Nissan
are also gaining importance.
3.)
Interpretation:
From the above table it is clear that people don't
want to spend more than 5 Lakhs when buying a
small car but there are people who don't mind
spending more than 5 Lakhs.
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Vol.1,Issue.VI/March 2012;
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4.)
Interpretation:
Most of the people got information from
newspapers followed by TV advertisements. Sales
representatives also provide valuable information
to people. Magazines and Online also provide
information to people.
5.)
Interpretation:
When comes to payment, most of the people prefer
taking loan from the bank. These days' loans are
easily available and that's why people prefer it.
6.)
Interpretation:
People prefer Petrol and Diesel instead of LPG.
People don't prefer LPG because of safety
concerns.
MARKETING STRATEGIES FOR SMALL CAR SEGMENT IN INDIA
7.)
Interpretation:
People buy car for their official work i.e. to
travel. People also buy for family purpose so that
they can travel with them on weekends. Some
people think that it is a status symbol for them.
Understanding customer behavior and
marketing strategy
Small Buyers Guide: Gone are the days
when buying a small car meant choosing between
a Maruti 800 and a Zen. In the Indian market
brimming with choices, buying a small car can be
quite a trial. Forget first-time buyers, even those
hunting for a change of car are left confused in a
market full of small cars, where each manufacturer
is competing for your money. The prospective car-
buyer is bound to collapse facing rapid-fire jargon
like MUV, NV, Xing thing, German engineering,
and More Car Per Car etc.
What do I want from my car?
So what are you looking for? You need a
car that is stylish, has enough space for your family
of four, is fuel-efficient, has low running costs, is
backed by a network of easily accessible service
stations, and one that would fetch good resale
value five years down the line. So how do you
decide which car is worth your money?
How much can I afford?
At your first peek into the Indian small car
market, you will find cars costing as low as Rs 2.6
lakhs to as high as Rs 5.5 lakhs. The first thing to do
is decide how much you want to invest in your
dream car. Shortlist the choices. Setting your
budget not only helps you think clearly, but also
picks out the cars that fit in your budget. Don't let
those loan companies stretch you beyond your
budget.
Fuel ?
Decide which fuel your car will use: petrol
or Diesel. Choose Diesel, and your choices are
fairly limited. Also, your decision for a diesel car
should be so only if you have a lot of driving to do.
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Diesel?
Diesels in the Indian small car segment can
literally be counted on fingers - namely Zen D,
Indica Diesel, and Palio D. Although the bestseller
in the diesel segment is undoubtedly the Indica
Diesel, buyers have their own reasons for going for
each one of the other cars.
Petrol?
Choose petrol, and you have a bigger list before
you -- Maruti 800, Indica Petrol, Santro, Zen, Alto,
WagonR, Palio, Getz and Corsa Sail. Entering this
list soon will be Ford Fusion and Honda Fit.
Entry Level Cars:
If you are migrating from a two-wheeler or
a Premier Padmini to a new car with lower
budgets, the Maruti 800 and the Alto LXi are great
options. These cars are absolute value for money,
have incredible fuel efficiency, perform
commendably, and most of all, are very easy to
drive, even on bad Indian roads.
Big Small Cars:
The top-of-the-line segment in the small
car market is cornered by Hyundai Getz, Opel
Corsa Sail and high-end Palios. These cars,
although smaller than mid-sized cars, are meatier
than small cars and provide the power that motor
enthusiasts crave for.
Being small, these can be driven around
with ease and being powerful, offers both breath-
taking acceleration and high top speeds. These cars
are most suited for the buyer who wants good
power and performance in a small package. Fuel
efficiency? Well, let's leave that out for another
story.
So what's my decision?
Summing it up, choosing a small car can be
quite a tough task, especially if you make an
uninformed decision and realize that another car is
better than yours. So take your time, and do the
market research. Get feedback from existing
owners. Read up reviews on popular motoring
mags. With the correct information and your finest
choice, nothing stands between you and your
dream small car. Happy small car shopping!
SWOT Analysis:
Strengths:
Strong domestic market
Cheap Labour
Good production facilities
Rising income of people
Weakness:
Lack of proper infrastructure
No luxury cars in this small car segment
Commodity price risk
MARKETING STRATEGIES FOR SMALL CAR SEGMENT IN INDIA
Less importance to safety mainly in small
car segment
Opportunities:
Government spending on Infrastructure
Diversification and Exports to European
and African markets
Easy finance available to consumers
Threats:
Business risk
Entry of International brands
Increasing Inflation
Petrol prices
Findings:
People buy car for long period
They like to take car loan for payment
They give more importance to price,
mileage while buying a car. Young people give
more importance to style and colour.
People prefer petrol and diesel version car
instead of LPG.
Some people will switch to another car if
its not available.
People got most of the information about
cars from newspapers and magazines and sales
representatives.
Celebrity advertisement influence lot of
people.
Suggestions:
Companies while designing a car should
give importance to style as well as price.
They should provide safety like airbags in
small cars also.
Proper demand forecast is importance
because customers don't want to wait for long time.
Companies should launch both petrol and
diesel version at same time.
After sale service is very important to
satisfy customers.
Conclusion:
There is high sales scope in Automobile
industry in future.
Consumer buying behavior was helpful to
understand the latest trends in this industry.
Consumers perception while buying a new car to
target on Middle class segment, who wishes to buy
car in small segment market.
Overall improvement in the system.
Automobile section, a surge in economic growth
rate and purchasing power led to growth in the
Indian automobile industry.
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Innovation in Marketing Management Excel
Book,2006.
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Vol.1,Issue.VI/March 2012;
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Mc graw- hill publishing company ltd.,2007.
Edward W Cundiff et-al, Fundamentals of
Modern Marketing, 4th Ed.
Gibson G., Retail Management, Jaico
Publishing House,2007.
Gandhi J C, Marketing: A Managerial
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Jha S., Service Marketing, Himalaya
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MARKETING STRATEGIES FOR SMALL CAR SEGMENT IN INDIA
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