Summer Internship Project

At

On
A study of Consumer Buying Behavior, Consumer
Perception and Sales Process of Ashok Leyland
Dealership to improve DOST Market Share in
Delhi/NCR region.
Submitted in partial fulfillment for the award of the degree of Master of Business
Administration (M.B.A-IB) 2014 -2016

Under the Guidance of

Faculty Mentor

Company Mentor

Dr. Raj Kiran Prabhakar

Mr. Ankit Garg

Assistant Professor

Manager Sales-NCR/W. UP

FMS-BHU

Ashok Leyland LCV Division

Submitted by,
Manish Manjhi
MBA-IB

Roll No: 14382MA021

Enrolment No: 364045

Batch: 2014-16

Certificate
Dated: 03/07/2015

TO WHOM IT MAY CONCERN

This is to certify that Ms. Kunjan Mishra a student of Faculty Of Management

Studies, BHU, Varanasi batch 2014-2016 underwent in his/her summer training from
4/05/2015 to 04/07/2015 for a total duration of 9 Weeks training in the Safexpress Pvt.
Ltd, New Delhi (Corporate office) (division If any) of our organization and worked
on Promotion of Campus2Home Service Among Female Occupants at
PG/Hostel in Delhi Region (topic of the project).

Training Guide/ Officer

(Signature with seal)

ii

CERTIFICATE BY MENTOR
This is to certify that Manish Manjhi (Roll No: 14382MA021) has carried out the
project entitled A study of Consumer Buying Behavior, Consumer Perception
and Sales Process of Ashok Leyland Dealership to improve DOST Market Share
in Delhi/NCR region. The project was carried out under my supervision as a part of
the award of Degree in Master of Business Administration III Semester, of Faculty
of Management Studies, Banaras Hindu University, Varanasi. To the best of my
knowledge the report is the outcome of the candidates individual efforts. I wish all
the success to the candidate.

(Signature of the mentor)

iii

DECLARATION
I declare that this project report titled A study of Consumer Buying Behavior,
Consumer Perception and Sales Process of Ashok Leyland Dealership to improve
DOST Market Share in Delhi/NCR region. submitted in partial fulfillment of the
degree of M.B.A is a record of original work carried out by me under the supervision
of Mr. Ankit Garg and Dr. Raj Kiran Prabhakar, and has not formed the basis for the
award of any other degree or diploma, in this or any other Institution or University. In
keeping with the ethical practice in reporting systematic information, due
acknowledgments have been made wherever the findings of others have been cited.

Manish Manjhi
Exam Roll No. 14382MA021
Enrollment No. 364045
M.B.A. - IB(2014-16)

iv

ACKNOWLEDGEMENT
The satisfaction, which accompanies the successful completion of the project, is
incomplete without the mention of a few names. I take this opportunity to
acknowledge the efforts of many individuals who helped me make this project
possible.

I would like to express my heartfelt appreciation and gratitude to my project head

Mr. Ankit Garg, Manager Sales-NCR/W. UP, Ashok Leyland-LCV .This project
is a result of his teaching, encouragement and inputs in the numerous meetings he had
with me, despite his busy schedule. He made sure that my stay in the office was a
learning experience.

I would also like to thank Dr. Raj Kiran Prabhakar, for his constant support,
continued encouragement and guidance throughout my training period.

Finally, I would like to thank my Institute, FMS BHU, for making this experience of
summer training in an esteemed organization like Ashok Leyland possible. The
learning from this experience has been immense and would be cherished throughout
my life.

Manish Manjhi
MBAIB (2014 16)
FMS-BHU

PREFACE
A project is a scientific and systematic study of real issues on a problem with the
application of management concept and skills. The study can deal with small or big
issues in any division of an organization. It can be case study where a problem has
been dealt with, through the process of management. The essential equipment of a
project is that, it should contain scientific collection of data, analysis and interpretation
of data leading to a valid conclusion.

Summer Training is an essential part in MBA curriculum. It enables the student

to share the real experience in the corporate world. My summer training has placed
in Ashok Leyland, New Delhi (Dealership).
The topic of my project is A study of Consumer Buying Behavior, Consumer
Perception and Sales Process of Ashok Leyland Dealership to improve DOST
Market Share in Delhi/NCR region.

I hope this study will contribute to the organization.

vi

EXECUTIVE SUMMARY
The project was an attempt to understand the market of AL DOST in Delhi/NCR regions. Being a
renowned brand, ALs DOST sales picture is very decent in future despite having stiff competitors
like TATA and M&M.
To understand more about the market, firstly a study on customers decision making factors and
customers perception of AL DOST is done. For this purpose a research is done to find out the
market scenario. With the help of the response given by the consumers and data analysis, the
company will be able to understand its strengths, weakness, opportunities and threats.
Secondly to understand the problem of poor lead to sales conversion, another study is done on the
sales process employed by the Ashok Leyland at their dealerships. From this a deep insight on sales
funnel, loss analysis, sales consultant and sales personnel involved at various stages will be
understood at each stages of the sales process.
Maintenance, Loading Capacity, Resale Value and ROI are the primary factor impacting customer
purchase decision. Brand perception has to be improved by organizing various Below the Line
activities. Collaborating with local mechanics will be viable solution for overcoming servicing
problem.
More emphasis should be given on the sales consultants training, in order to improve their sales
technique and also to improve their whole sales process.

vii

TABLE OF CONTENTS

DESCRIPTION

PAGE NUMBER

Certificate (Company Mentor)

ii

Certificate (Faculty Mentor)

iii

Declaration

iv

Acknowledgment

Preface

vi

Executive Summary

vii

1. INTRODUCTION

o Need of Study
o Objective of Study
2. INDUSTRY ANALYSIS

o Small Commercial Vehicle Market Evolution

o SCV Manufacturers
o SCV Industry and The Market Scenario
o Future Challenges and Opportunities
o OEMs benefit from the new challenges and opportunities
3. COMPANY PROFILE

12

4. LITERATURE REVIEW

16

5. RESEARCH METHODOLOGY

35

6. FINDINGS and ANALYSIS

37

o Factors Affecting Consumer Buying Behaviour

o Brand Awareness of AL DOST
o Consumer Perception of AL DOST
o Lead Drop Analysis
7. Suggestions

47

8. Conclusion

48

9. Bibliography

49

10. Annexure-I

50

Introduction
Need of Study:
The project was an attempt to understand the market of AL DOST in Delhi/NCR regions. Being a
renowned brand, ALs DOST sales picture is very decent in future despite having stiff competitors
like TATA and M&M.
To understand more about the market, firstly a study on customers decision making factors and
customers perception of AL DOST is done. For this purpose a research is done to find out the
market scenario. With the help of the response given by the consumers and data analysis, the
company will be able to understand its strengths, weakness, opportunities and threats.
Secondly to understand the problem of poor lead to sales conversion, another study is done on the
sales process employed by the Ashok Leyland at their dealerships. From this a deep insight on
sales funnel, loss analysis, sales consultant and sales personnel involved at various stages will be
understood at each stages of the sales process.
Objective of the study:
1. To study the most influencing factors in buying decision of customer, their comparison attitude
and their awareness channel
2. To study the awareness of DOST vehicle, its merits, demerits and ranking vis--vis competitors
in minds of customers
3. To study the sales process adopted at the assigned dealership
4. To analyze the lead dropout at the dealership
5. To analyze the work style of salesman and evaluate their effectiveness

Industry Analysis
After a few years of strong growth, Indias commercial vehicle (CV) industry hit a rough patch
last year, impacted by the overall economic slowdown, delay in infrastructure projects and weak
investment sentiment. However, the industry has long-term growth potential, subject to the
economy accelerating back to 7%8% GDP growth per annum and the Government expediting
policies that support growth of manufacturing and infrastructure development. While deregulation
of diesel prices will make the industry less dependent on subsidies, it is likely to create demand
uncertainty in the short-term as truck owners and manufacturers adjust to the new normal.
While the fundamental drivers of the industry have not changed, key stakeholders will need to
recalibrate their strategies to be in tune with a market that has shifted into a lower gear. A careful
assessment of the industry ecosystem an uncertain operating environment, changing preference
of fleet operators, rising competitive intensity, new supply chain dynamics and novel concepts in
distribution channels is imperative to respond to industry forces and weather the intermittent
rough patch.
The small commercial vehicles (SCV) in India, seeing a turnaround with sales picking up in the
second half of fiscal 2016, as a result of the upswing in sales of medium and heavy commercial
vehicles seen over the last three months, and which is likely to continue in light of the thrust on
manufacturing and infrastructure in the recent Budget.
Increased manufacturing and infrastructure-building activity over the last few months have spurred
the sales of medium and heavy commercial vehicles (M&HCV) such as trucks, dumpers and buses.
This is expected to lead to higher demand for SCVs, albeit with a lag effect.
New analysis from Frost & Sullivan, Forecast of the Indian Small Commercial Vehicles (SCV)
Market, projects the sales volumes of SCV to go up from 0.6 million in FY 2014 to touch 1 million
in FY 2020.

Small Commercial Vehicle Market Evolution

SCV segment was established in 2005 with the launch of ACE Truck in the sub 2 ton category.
Since then it has grown considerably. SCV segment grew by ~30% CAGR between 2010-2012
whereas it only declined by ~1% CAGR over the last 2 years. During the same time overall industry
declined by ~11% CAGR. The SCV segment has outperformed all the other CV segments and now
accounts for more than 60% of the CV industry.
If one goes by the projected numbers in SCVs, there is a lot to play for. According to an Ernst &
Young study on the Indian auto component industry, in 2009, the SCV four wheeler market
comprised of 150,000 units sold,
which is estimated to touch

SCV Industry Market Evolution[Sales Volume,

'000 units]

around 670,000 units per annum

by 2015. And by the year 2020,

116

the study estimates that the total

84

number of unit s sold will touch

one million. India is expected to
witness strong growth in vehicle

73

52
50
211

273

360

436

359

production till 2020 across all

FY 2010

segments. But the SCVs segment

FY 2011

FY 2012
SCV Cargo

FY 2013

FY 2014

SCV Passenger

is shaping up well, clocking a fast

growth rate of 35%-40 %.
With infrastructure getting a push and last mile connectivity a challenge, players are looking to
ride on the hub and spoke model that's emerging. Large pick-ups bring the goods till the outskirts
of the city and the smaller pick-ups travel the length and breadth of the city transporting the wares.
One of the many reasons of boom in this sector.
One big arena that players are looking to tap in the future is rural markets. In the years ahead, many
rural areas will emerge as semi urban pockets and SCVs will continue to be the key means of
transportation for the last mile,

SCV Manufacturers
Key players augment their volumes by having presence across all sub-segments in the SCV space.
Tata and Mahindra are the leaders currently. OEMs like Maruti and ISUZU are also coming with
their own models to tap this booming segment.

Rapid growth of Dost indicates significant opportunities exist for new players. Right product and
good network critical for success.
M&M has also managed to attract customers from less than 2T category by keeping the price gap
between

Bolero

Maxi
Truck and lesser tonnage
ACE to less than INR
39,000 as a result of which
it has gained 12% market
share over the last 2 years.

SCV Industry and The Market Scenario

The fortunes of the commercial vehicle (CV) industry are pegged directly to the extent of economic
activity and with better news on the economic front, the Indian CV industry too is recovering. The
Small Commercial vehicle (SCV) segment a relatively new category with CV industry, however,
poised to see significant growth in coming years.
The need for intercity goods and passenger transportation drives the demand for SCVs and the
segment was created by the launch of Tata Ace in May 2005. According to a study by Roland
Berger Strategy Consultants, this segment contributed 60 per cent of CV industry sales in 201314.

1.1 Current scenario

The SCV segment is the largest segment within the CV industry with sales of ~432k units in
FY2014 contributing 60% to the overall
industry. It has outperformed all other
segments declining by ~1% CAGR only
over the last 2 years against the industry
average of
~11% CAGR

The SCV Cargo continues to be the biggest

segment and will account for ~80+% of the
total market by FY2020

Within the SCV Cargo segment large pick-ups (2-3.5T) have been growing & account for ~54%
of the segment

 SCV Passenger is a highly regulated segment and faces tough competition from 3 wheelers. Over
the last year, the segment has suffered extremely high delinquency rates
Number of SCV buyers tend to be First-Time Buyers (FTBs). The represent an easy to tap buyer
pool compared to large fleet operators who exhibit higher brand loyalty towards brands.
Tata Motors and Mahindra & Mahindra continue to be the top 2 players in the industry

Tata Motors leads the market in the sub 2T truck category and the SCV Passenger segment
Mahindra & Mahindra is expected to do well in the 2-3.5 Ton category in the SCV Cargo
segment due to its strong hold in the Pick-up segment. It has also managed to attract ACE
customers to higher tonnage Bolero Maxi Truck
Ashok Leyland is one of the late entrants but has been successful with Dost cornering 14%
market share in the 2-3.5 Ton category. Rapid growth of Dost indicates significant opportunities
exist for new players.

1.2 Future

The SCV industry is expected to reach ~919,000 units by FY2020 growing at a CAGR of

~13% over the next 5 years.

According to fleet operators the market has stabilized in the past 6-9 months owing to drop

in diesel price, and relatively sound freight rates pointing to improvement in cash flow.

Future of the segment depends significantly on its increasing use in unique applications for

the vehicles. Including some older applications include poultry, milk and water distribution.

Rise in demand of SCVs in the rural sector driven by better connectivity, rising income

levels and further urbanization of tier 3/4 towns and cities

Steady government for the next 5 years that is focused on infrastructure development like

metro rail network and other growth related policies.

Customer preferences will continue to evolve ensuring OEMs continue to innovate to

develop & market products as demanded.

Growth of SCV segment will be driven by volume shift from 3W vehicle segments and

increasing need for last mile connectivity.

7

Future Challenges and Opportunities

Indias commercial vehicle market is in transition from being a supply-driven segment to one that
is pushed by demand. Future small commercial vehicles on Indian roads are expected to feature
advanced electronics, efficient fuel systems and have an increased lifetime.
SCV Passenger carriers rely heavily on permits issued by Government agencies. Therefore, there
is a need to work closely with the government which faces heavy lobbying from the strong
3Wheeler unions.
Major challenge in SCV sector is being a relatively new segment and not many customers are
aware about its applications. As a result it is the responsibility of the OEM to develop and educate
customers on the various applications. Also most drivers are first time users of any automobile. As
a result considerable effort is needed to train/educate them about the vehicle/applications, etc.

2.1 Challenges
For New Entrants:
Building distribution and service network and maintaining dealer viability.
Introducing SCV with improved fuel-efficient technologies.
Developing a broad product portfolio, spanning all segments to meet customer needs and
mitigate cyclical risks.
Competitive pricing, low operating cost reduce turnaround time.
Developing supply chain partnerships.
Providing financing at competitive rates.
Creating and maintaining brand image.
Localized production to remain cost competitive.

For Incumbents:
Delivering lowest total cost of ownership rather than just low initial cost of purchase.
Developing R&D competency.
Improving skill sets of service network and local mechanics as technology content per vehicle
increases.
Improving service infrastructure at dealers end.
Developing products to address gaps in product portfolio.
Adhering to tightening emission norms.

2.2 Opportunities
Demand would be fueled by demand growth in Hub-n-Spoke models. Need for last mile
connectivity for both goods and people transportation.

Opportunities in semi-urban and rural areas and improved urbanization levels foster growth.

 Small commercial vehicles (SCVs) offer attractive employment opportunities for FTBs.
Better operating economics clubbed with better financing options making SCVs more lucrative
for end customers
Implementation of GST will have a positive effect.
New applications are being developed to expand the market prompting newer customers to buy
SCVs. Poultry, milk and water distribution industries are some of the new segments established
over the last year.

10

OEMs benefit from the new challenges and opportunities

Understand the customer requirements as they keep on evolving. For example: Over the
last 2 years customers have moved to higher tonnage pickups. Important to pre-empt these
trends and adapt
-

1.5-2T truck customers are shifting to Bolero Maxi Truck (BMT) due to the
following reasons:

Price differential: Tata Ace which is a market leader in sub 2T category is only

cheaper by less than INR 40K from Bolero Maxi Truck

Product differential: Incremental product improvements makes Bolero Maxi Truck

even more attractive

Liaise with the local government authorities in order to further promote SCV Passengers

Continue to spread awareness around the benefits, applications etc. among its potential
customers to further grow the market

Develop new applications in order to expand the market. Paint distribution, gas cylinders,
water, waste disposal examples of some of the new applications

Develop drivers for this segment as majority of the end users belong to lower economic
section of the society and most likely will be the first time users of any kind of automobile

Government started investing and promoting infrastructure projects like Metro rail
networks across the various congested cities. This will help create opportunities for last
mile connectivity

Come up with schemes like cheaper financing options to promote the usage of SCVs,
especially in the rural segment in order to further promote connectivity of rural areas with
urban centers

11

Company Profile
The origin of Ashok Leyland, a Hinduja group company can be traced to the urge for selfreliance,
felt by independent India. Pandit Jawaharlal Nehru, India's first Prime Minister persuaded
Raghunandan Saran, an industrialist, to enter automotive manufacture. In 1948, Ashok Motors was
set up in what was then Madras, for the assembly of Austin Cars. The Company's destiny and name
changed soon with equity participation by British Leyland and Ashok Leyland commenced
manufacture of commercial vehicles in 1955.
Since then Ashok Leyland has been a major presence in India's commercial vehicle industry with
a tradition of technological leadership, achieved through tieups with international technology
leaders and through vigorous inhouse R&D. Access to international technology enabled the
Company to set a tradition to be first with technology. Be it full air brakes, power steering or rear
engine busses, Ashok Leyland pioneered all these concepts. Responding to the operating
conditions and practices in the country, the Company made its vehicles strong, overengineering
them with extra metallic muscles. 'Designing durable products that make economic sense to the
consumer, using appropriate technology', became the design philosophy of the Company, which
in turn has moulded consumer attitudes and the brand personality.
The Hinduja Group is a transnational conglomerate that provides a wide range of products in over
fifty countries worldwide. Today, the Hinduja Group has become one of the largest transnational
business conglomerates in the world with diversified operations, spanning all the continents. The
Group employs over 25,000 people and has offices in many key cities of the world and all the
major cities in India. Ashok Leyland vehicles have built a reputation for reliability and ruggedness.
In the populous Indian metros, four out of the five State Transport Undertaking (STU) buses come
from Ashok Leyland. Some of them like the doubledecker and vestibule buses are unique models
from Ashok Leyland, tailormade for highdensity routes.
In 1987, the overseas holding by Land Rover Leyland International Holdings Limited (LRLIH)
was taken over by a joint venture between the Hinduja Group, the NonResident Indian
transnational group and IVECO. (Since July 2006, the Hinduja Group is 100% holder of LRLIH).
The blueprint prepared for the future reflected the global ambitions of the company, captured in
four words: Global Standards, Global Markets. This was at a time when liberalization and
12

globalization were not yet in the air. Ashok Leyland embarked on a major product and process
upgradation to match worldclass standards of technology.
For over five decades, Ashok Leyland has been the technology leader in India's commercial vehicle
industry, moulding the country's commercial vehicle profile by introducing technologies and
product ideas that have gone on to become industry norms. From 18 seater to 82 seater double
decker buses, from 7.5 tons to 49 tons in haulage vehicles, from numerous special application
vehicles to diesel engines for industrial, marine and genset applications, Ashok Leyland offers a
wide range of products. Eight out of ten metro state transport buses in India are from Ashok
Leyland. With over 60 million passengers a day, Ashok Leyland buses carry more people than the
entire Indian rail network.
Product range of the company includes:

Buses

Trucks

Engines

Defence & Special Vehicles

Associates Companies:

Automotive Coaches & Components Ltd (ACCL)

Lanka Ashok Leyland

Hinduja Foundries

IRIZARTVS

Ashok Leyland Project Services Limited

Milestones:
1966 Introduced full air brakes
1967 Launched doubledecker bus
1968 Offered power steering in commercial vehicles
1979 Introduced multiaxle trucks
13

1980 Introduced the international concept of integral bus with air suspension
1982 Introduced vestibule bus
1992 Won selfcertification status for defence supplies
1993 Received ISO 9002
1997 India's first CNG powered bus joined the BEST fleet
2001 Received ISO 14001 certification for all manufacturing units
2002 Launched hybrid electric vehicle
2003 Dheeraj Hinduja Elected Vice Chairman of Ashok Leyland Board
2004 The Government of National Capital Territory of Delhi and Ashok Leyland signed an
agreement for setting up a 'stateoftheart' Driver Training Institute at Burari
2005 Stateoftheart Driver Training Institute opens in Delhi
2006 Ashok Leyland and Bosch have joined hands with the Indian Institute of Technology
Madras (IITM) to set up the Ashok Leyland and Bosch Centre of Excellence in Engineering
Design at the IITM campus
2007 The company unveiled 4921 TT, a 6x4 tractor with a gross vehicle weight of 49 tones
2008 The company signed an agreement for a joint venture with John Deere, for manufacturing
and marketing of construction equipment.
2009 Ashok Leyland and Bank of Baroda signed a MoU wherein Bank of Baroda will fund
Ashok Leylands endcustomers as well as finance its dealers inventory
2010 Ashok Leyland has bagged an order for 600 vehicles from VRL Logistics that comprise
500 numbers of 3123 MultiAxle Vehicle (MAV) in the 8x2 configuration, a newly
developed, first of its kind for the Indian commercial vehicle industry, along with 100 nos.
of the Companys 12meter buses
2011Ashok Leyland forays in small commercial vehicle segment; launches DOST in JV with
Nissan Motor.
14

2013 Launched the STILE, a stylish MultiPurpose Vehicle (MPV) based on a contemporary,
awardwinning vehicle platform.
2013 Launched the BOSS, an intermediate commercial vehicle (ICV), that seamlessly
combines the strength and ruggedness of a truck with the comfort of a car.
2014 Launched two new Light Commercial Vehicles (LCV) PARTNER truck, Indias first
airconditioned LCV goods vehicle and MiTR bus, a LCV bus with bestinclass comfort. After
the commercially successful Dost and the recently launched STiLE, now PARTNER and MiTR
are the latest offerings from the Ashok Leyland - Nissan Joint Venture.

Awards/Achievements
In the journey towards global standards of quality, Ashok Leyland reached a major milestone in
1993 when it became the first in India's automobile history to win the ISO 9002 certification. The
more comprehensive ISO 9001 certification came in 1994, QS 9000 in 1998 and ISO 14001
certification for all vehicle manufacturing units in 2002. It has also become the first Indian auto
company to receive the latest ISO/TS 16949 Corporate Certification (in July 2006) which is
specific to the auto industry.

15

Literature Review
This chapter presented the literature review as presented by other authors and researchers in the
same field of consumer. The various sections presented here were; concept on consumer buying
behaviour, hierarchical theory of needs, factors influencing consumer buying behaviour of
automobile and the conceptual framework to the study.
Consumer behaviour refers to the activities in which people acquire, consume and dispose products
and services (Blackwell et al., 2001). Consumer behaviour is the action a person takes in
purchasing and using products and services, including the mental and social processes that precede
and follow these actions. Predicting and understanding consumer behaviour is one of the largest
challenges a business can face. At present, the competitive market forced producers to produce
goods based on customer needs (Tafler, 2004).
The study of consumer purchase behavior, which is briefly called consumer behavior, provides
information about consumer and his/her consumption patterns. An organization can continue to survive
if it can supply consumer needs and demands with a comprehensive understanding of them. This shows
the importance of studying consumer behavior. This requires understanding consumer behavior which
is not so simple. Customers may not know their own deeper inner motivation or they may react to
affecting factors in the last moment and simply change their mind. However, marketers should consider
their customers requests, intakes and buying behaviors (Kotler, 2009).

Factors Influencing Consumer Buying Behavior Buying behavior of individuals is often unconsciously affected by some factors. Social factors
play an important role in the decision of buying certain products, including the most sensitive products
such as cars. The important social factors are: reference groups, family, role and status. There are four
important psychological factors affecting the consumer buying behavior are: perception, motivation,
learning, beliefs and attitudes. The economic factors that most commonly affect consumer behavior
include 2 occupation, economic situation and personality (Blackwell, Miniard, & Engel, 2006; Blythe,
2008).
Successful businesses understand how to leverage the different factors that influence consumer
buying behavior to effectively market their products and maximize sales. Studies show that there are
generally four main factors that play a role in the consumer's buying behavior. The factors include
cultural factors, social factors, personal factors and psychological factors (Blackwell et al., 2001). This
study will therefore explore of the four main factors that influence consumer buying behavior of the
automotive.
A study by Havkinze, Roger & Kenth (2006) found out that the consumers disposable income
play a major role in determining what to buy and in what quantities, however this depends on the income
elasticity of a certain product, if the consumers disposable income increases and that the income
16

elasticity of demand for that good is greater than one then the proportional rise in the demand for that
product is greater than the rise in income levels. Their study also reported that the influence of culture
on buying behavior varies from country to country therefore marketers have to be very careful in
analysing the culture of different groups, regions or even countries.
According to Peter and Olson (2005) customer possesses specific belief and attitude towards
various products. Since such beliefs and attitudes make up brand image and affect consumer buying
behavior therefore marketers are interested in them. Marketers can change the beliefs and attitudes of
customers by launching special campaigns in this regard.

Detailed Review
Consumer behavior is the study of how individuals, groups and organizations select, buy, use,
and dispose of goods, service, ideas, or experiences to satisfy their needs and wants.

Concept on Consumer Buying Behaviour

Consumer Behavior is defined as the behavior that consumer displays in the searching for,
purchasing, using, evaluating, and disposing of the products and services that they expect will satisfy
their needs. Consumer Behavior focuses on how consumer make the decisions to spend their available
resources (Time, Money, Efforts) on consumption related items. That includes what they buy, why they
buy it , when they buy it, where the buy it , how often they buy it ,how often they use it, how often they
evaluate it after the purchase and the impact of such evaluations on future purchases.
Consumer behavior is the study of when, why, how, and where people do or do not buy a
product (Khosla, 2010). It blends elements from psychology, sociology, social anthropology and
economics (Kotler, 2000). It attempts to understand the buyer decision making process, both
individually and in groups. It studies characteristics of individual consumers such as demographics and
behavioral variables in an attempt to understand people's wants (Armstrong, 1991).
While Bennett (1995) defines consumer behavior as the dynamic interaction of affect and
cognition, behavior, and environmental events by which human beings conduct the exchange aspects of
their lives, Blackwell et al. (2001) emphasize product disposal in their definition of consumer behavior
as those activities people undertake when obtaining, consuming and disposing of products and services.
However, Peter and Olson (2005) assert that consumer buying behavior can be defined in the light of
interactions and exchanges of experiences. They defined that consumer behavior involves the thoughts
and feelings people experience and the actions they perform in consumption processes. It also includes
comments from other consumers, advertisements, price information, packaging, product appearance; is
dynamic, involves interactions and exchanges. Solomon (2009) however takes a more holistic view of
the concept encapsulating the marketing of a product offering (broadly defined) from inception to 8

17

obsolescence consumer behavior is the study of the processes involved when individuals or groups
select, purchase, use, or dispose of products, services, ideas, or experiences to satisfy needs and desires.
Major Influence Factors: Culture Factors Social Factors Personal Factors

Cultural Factors

Culture > determinant of a persons wants and behaviors.

Subcultures > specific identification and socialization for their members include
nationalities, religions, racial groups and geographic regions.
Social class > shared similar values, interests and behaviors.

Social Factors

Reference groups: have a direct or indirect influence in their attitudes or behavior

in three ways. (Expose an individual to new behaviors and lifestyle / attitudes and
self-concept / create pressures for conformity that may affect product and brand
choices.) Types of Reference Groups Memberships are groups that have direct influence

Primary groups with whom the person interacts continuously and informally such
as family, friends.

Secondary groups which tend to be more formal and require less continuous
interaction such as professional and religious.

Aspirational groups are those person hopes to join.

Dissociative groups are those whose values or behaviors an individual rejects.

Family (most important consumer buying organization). There are two families in buyers
life: Family of orientation & Family of Procreation.

Family of orientation: It is the nuclear family one was born to. It includes
parents and siblings. Even if the buyer no longer interacts very much with their parent,
their influence can be significant. As they provide the environment of growth before a
person reaches adulthood and have significant contribution towards his behavioral
formation and his mind-set.

Family of procreation: It is the family one creates after adulthood through,

and following, ones marriage ones spouse and children. Before the wife have usually
acted as the familys main purchasing agent but now the marketers should see both men
and women as target.
18

Social roles & statuses: Role refers to a set of activities a person is expected to
perform. Each role carries a certain social status. People choose products that reflect and
communicate their role and actual or desired status in society.

Personal Factors

Age and stage in the life cycle: Consumption is shaped by the family cycle, the
number, age and gender of people in the household. Also psychological life-cycle stage and critical
life events or transitions can cause new needs.

Occupation and economic circumstances What a person does for living (his
vocation), and his prevalent economic conditions and circumstances also govern his buying
behavior

Personality and self-concept: (Set

of
distinguishing
human
psychological traits that lead to consistent and enduring responses to environmental stimuli)
Consumers choose brands matching their own Personality.

Lifestyle and values: Lifestyle - a persons pattern of living in the world as

expressed in activities, interests and opinion, is determined by core values - the belief systems that
underlie attitudes and behaviors. It is a major determinant of his buying behavior.
Of psychological factors that determine a persons buying behavior, motivation
is of importance.

Motivation Theories
Freuds Motivation Theory:

Psychological forces shaping peoples behavior are largely

unconscious

A person cannot fully understand his or her own motivations.

Maslows Motivation Theory:

People are driven by particular needs at particular times.

Human needs are arranged in hierarchy from most to least pressing.
People will try to satisfy their most important needs first.
19

Herzbergs Motivation Theory:

Herzberg added a new dimension to this theory by proposing a two-factor model
of motivation, based on the notion that the presence of one set of job characteristics or
incentives leads to worker satisfaction at work, while another and separate set of job
characteristics leads to dissatisfaction at work.

Two-factor theory that distinguishes dissatisfiers from satisfiers.

The absence of dissatisfiers is not enough to motivate a purchase >>>

satisfiers must be present.

Implications: avoid dissatisfiers, identify and supply the major satisfiers

Hierarchical Theory of Needs and Consumer Buying Behavior

The first step in consumer purchasing process is the need recognition or motivation, where
consumers realize that s/he has need for something. It reflects an inner state of arousal that directs the
consumer to engage in goal relevant behaviors, effortful information processing and detailed decision
making. Motivation is enhanced, when consumers regard something as personally relevant, consistent
with their values, goals and needs, risky and moderately inconsistent with their prior attitude (Hoyer,
2004).
When motivation is high, consumers are willing to do things which are closely related to their
goals, e.g. if one has aim to be buy clothes which can be fashionable as well as give confidence to wear
at work place and when such a style comes in front of her then they immediately go for it. Highly
motivated people pay more attention and think about their goals, they evaluate the information critically
relevant to it and try to remember the information for later use. Consumers are motivated when they feel
processed information or things are personally relevant. Maslow grouped these different consumers need
in five major categories; (Hoyer, 2004) Physiological (Need for food, water and sleep), Safety (Need
for shelter, protection and security Social (need for affection, friendship and acceptance), Egoistic (need
for prestige, success, accomplishment and self-esteem) and Self-actualization (need for self-fulfillment
and enriching experiences).
In further detail needs can be categorized as social, non-social, Functional, symbolic and
Hedonic needs. Social needs are extremely directed and related to other individuals. Social needs are
fulfilled by the presence or action of other people. Nonsocial needs are those in which achievement is
not based on other people. Only one self is related to usage of certain product and services. Functional
needs motivate the search for products that solve consumption related problems. Symbolic needs affect
how we perceive ourselves and how we are perceived by others. Achievement, independence and selfcontrol are symbolic needs because they are connected with consumer's sense of self.
Consumers need for uniqueness is symbolic because it drives consumption decision about how
s/he expresses his/her own identity. Achievement, status, affiliation and belonging are symbolic because
20

they reflect consumers social position or role. Hedonic needs reflect consumers inherent desires for
sensory pleasure. Sensory simulation, cognitive simulation and novelty are non-social hedonic needs,
while needs for reinforcement, sex and play are social hedonic needs (Hoyer, 2004).

Buying decision process

A buying decision process (or costbenefit analysis) describes the process a customer goes
through when buying a product. This buying decision model has gone through lots of interpretation by
scholars. Although the models vary, there is a common theme of five stages in the decision process.
These stages were first introduced by John Dewey (1910). The stages are:

1.
2.

Problem/Need recognition

3.
4.
5.

Evaluation of alternatives

Information search

Purchase decision
Post-purchase behavior

These five stages are a good framework to evaluate customers' buying decision process.
(However, it is not necessary that customers get through every stage, nor is it necessary that they
proceed in any particular order. For example, if a customer feels the urge to buy chocolate, he or she
might go straight to the purchase decision stage, skipping information search and evaluation.)

1.

Problem/need-recognition

Problem/Need-recognition is the first and most important step in the buying decision. Without
the recognition of the need, a purchase cannot take place. The need can be triggered by internal stimuli
(e.g. hunger, thirst) or external stimuli (e.g. advertising). Maslow held that needs are arranged in a
hierarchy. According to Maslow's hierarchy, only when a person has fulfilled the needs at a certain stage,
can he or she move to the next stage. The problem must be addressed through the products or services
available. It's how the problem must be recognized.

2.

Information search

The information search stage is the next step that the customers may take after they have
recognized the problem or need in order to find out what they feel is the best solution. This is the buyers'
effort at searching the internal and external business environments to identify and observe sources of
21

information related to the focal buying decision. Consumers can rely on print, visual, and/or voice media
for getting information.

Most consumer search for limited amounts of information.

Different Information sources influence in the buying decision: Personal /
Commercial / Public / Experiential
Search dynamics: the consumers learn about brands and their features:

3.

Evaluation of alternatives

At this stage, consumers evaluate different products/brands on the basis of varying product
attributes, and whether these can deliver the benefits that the customers are seeking. This stage is heavily
influenced by one's attitude, as "attitude puts one in a frame of mind: liking or disliking an object, moving
towards or away from it". Another factor that influences the evaluation process is the degree of
involvement. For example, if the customer involvement is high, then he/she will evaluate a number of
brands; whereas if it is low, only one brand will be evaluated.

Customer involvement

Characteristics

Number of brands examined

High

Medium

Low

High

Medium

Low

Many

Several

One

22

Number of sellers considered

Many

Several

Few

Number of product
evaluated

Many

Moderate

One

Few

None

attributes

Number of external information sources used

Time spent searching

Many

Considerable

Little

Minimal

Consumer compares competitive brand information and make a value judgment.

Most current models see the consumer forming judgments largely on a conscious and
rational basis.

First, the consumer is trying to satisfy a need.

Second, the consumer is looking for certain benefits from the product solution.

Third, the consumer sees each product as bundle of attributes with varying abilities for
delivering the benefits sough to satisfy this need.

Consumer will pay the most attention to attributes that deliver the sough after benefits

4.

Purchase decision

This is the fourth stage, where the purchase takes place. According to Kotler,
Keller, Koshy and Jha (2009), the final purchase decision can be disrupted by two factors:
negative feedback from other customers and the level of motivation to comply or accept
the feedback. For example, after going through the above three stages, a customer chooses
23

to buy a Nikon D80 DSLR camera. However, because his good friend, who is also a
photographer, gives him negative feedback, he will then be bound to change his
preference. Secondly, the decision may be disrupted due to unanticipated situations such
as a sudden job loss or the closing of a retail store.

5.

Post-purchase behavior

These stages are critical to retain customers. In short, customers compare

products with their expectations and are either satisfied or dissatisfied. This can then
greatly affect the decision process for a similar purchase from the same company in the
future, mainly at the information search stage and evaluation of alternatives stage. If
customers are satisfied, this results in brand loyalty, and the information search and
evaluation of alternative stages are often fast-tracked or skipped completely. As a result,
brand loyalty is the ultimate aim of many companies. On the basis of either being satisfied
or dissatisfied, a customer will spread either positive or negative feedback about the
product. At this stage, companies should carefully create positive postpurchase
communication to engage the customers.
Also, cognitive dissonance (consumer confusion in marketing terms) is common
at this stage; customers often go through the feelings of post-purchase psychological
tension or anxiety. Questions include: "Have I made the right decision?", "Is it a good
choice? etc.
[Reference: Engel, James F., Kollat, David T. and Blackwell, Rodger D.
(1968) Consumer Behaviour]

Factors influencing Consumer Buying Behavior of Automotive

The following section presents the literature review of the main factors that
influence consumer buying behavior of automotive brands and other products on studies
conducted by various authors and academicians.

Perceived Price
Customers have increasingly become price conscious and dealers with competitive prices tend
to attract more customers. The price you set for a product or service has a very significant effect on how
the consumer behaves. If consumers believe that the price you're charging is lower than competitors it
could cause a major spike in sales. But if the price you set is significantly higher than expected, the
response can be disappointing. In either case a change in price could produce unexpected results when
it comes to consumer buying behavior.
24

In traditional economics prices have been treated simply as cost, the recognition that a price
serves to inform the consumer about the good is more if recent origin (East, 1997). Price, one of the
non-product attribute of brand associations where it can be an important associations in the formation
of brand perceptions, particularly with regard to value and desirability and is a criterion by which
consumer often segment their knowledge of a market or category.
Price is undoubtedly one of the most important market variables (Bauer, Klieger & Koper, 2004). It
becomes apparent from the literature that there are numerous ways of price framing. Specifically, price
framing is defined as how the offered price is communicated to the consumer (Briesch, Krishna, Lehman
& Yuan, 2002). Framing the same information in different ways can have a great impact on consumer
decision making and choice behavior. Blair and Landon (1981) found that consumer estimates of the
advertiser's regular price are higher for ads with a reference price than for ads without one. Reference
price can be defined as a concept of an internal standard against which observed prices are compared
(Kalyanaram & Winer, 1995).
This effect can subsequently cause a heightened interest in the advertised offer by increasing
consumer estimates of the product savings offered by the advertiser. In a study on the effects of
promotion framing on price expectations and choice DelVecchio, Krishnan, and Smith (2007) found
that frame affects consumers perceptions of the promoted price and the weight they place on the
promoted price. High quality products, fancy packaging, exclusive store locations, high retail margins,
expensive promotions, advertising campaigns, and brand names are all the contribution to the higher
prices of luxury goods. Companies make large investments into these components in order to make their
products instantly recognizable and familiar. The luxury products will lose their rarity and exclusivity
characteristics if they are not priced high. Luxury goods are expensive in relative and absolute terms
(Kalyanaram & Winer, 1995).

Perceived Quality
A commercial vehicle is no longer just a means of transport but has to emphasis on safety, 12
durability, among other features like space, seating capacity, 4WD or engine power and reliability
among other features. The extensive literature and emphasis on actual quality seems to have conspired
against what we describe as the neglected frontier of quality: an outside-in perspective driven through
the customer centric perception of quality by intrinsically dealing with the voice of the customer.
The customers' perception element of quality has its own distinct definition and form of
measurement. It carries subjectivity, and is the level of perceived value reported by the customer who
benefits from a process or its outcome. Perceived quality is in the mind of the believer, and is a poor
offspring because our methods of today are all focusing attention on the business and not to the customer
outside of the business. Perceived product quality is perhaps one of the most important constructs in
marketing.
In recent years, perceived quality has been the subject of considerable interest by both
practitioners and researchers, mainly in services marketing (Cronin & Taylor, 1992). However, work
that integrates the role of perceived product quality within the context of other marketing variables like
product involvement, consumer satisfaction and purchase intentions has received less attention. Indeed,
the belief that high perceived quality leads to repeated purchases is the bedrock of any business.
25

Achieving perceptions of quality is usually impossible in Kenya unless the quality claim has substance.
Generating high quality requires an understanding of what quality means to customer segments, as well
as a supportive culture and a quality improvement process that will enable the organization to deliver
quality products and services.
Creating a quality product or service, however, is only a partial victory; perceptions must be
created as well. Perceived quality may differ from actual quality for a variety of reasons. First,
consumers may be overly influenced by a previous image of poor quality. Because of this, they may not
believe new claims, or they may not be willing to take the time to verify them. Thus it is critical to
protect a brand from gaining a reputation for shoddy quality from which recovery is difficult and
sometimes impossible (Parasuraman, Zeithaml & Berry 1996).
Second, a company may be achieving quality on a dimension that consumers do not consider
important. When Citibank dramatically increased back-office efficiency by automating its processing
activities, the expected impact on customer evaluations was disappointing. Customers, it turned out,
either did not notice the changes or did not recognize any benefit from them. There is a need to make
sure that investments in quality occur in areas that will resonate with customers. Third, consumers rarely
have all the 13 information necessary to make a rational and objective judgment on quality -- and even
if they do have the information, they may lack the time and motivation to process it. As a result, they
rely on one or two cues that they associate with quality; the key to influencing perceived quality is
understanding and managing these cues properly. Thus, it is important to understand the little things that
consumers use as the basis for making a judgment of quality (Parasuraman, Zeithaml & Berry, 1996).
Similar to brand awareness, perceived quality is determined by a number of factors. To be more
specific, perceived quality can further be classified into product quality and service quality. Regarding
product quality, there are seven dimensions which affect the consumers perception, namely
performance, features, conformance with specifications, reliability, durability, and serviceability as well
as fit and finish. Service quality, on the other hand, is judged by its corresponding tangibles, reliability,
competence, responsiveness and empathy (Aaker, 1991). As mentioned by Srikatanyoo and Gnoth
(2002), consumers are inclined to develop stereotypical beliefs about the products from particular
countries. Hence, consumers could have their preferences for products made from one country over
another (Papadopoulos et al., 1991).

Socio-Cultural Factors
Culture is part of the external influences that impact the consumer. That is, culture represents
influences that are imposed on the consumer by other individuals. The definition of culture offered in
one textbook is That complex whole which includes knowledge, belief, art, morals, custom, and any
other capabilities and habits acquired by man person as a member of society (Kileba, 2001).
Culture is the complex of values, ideas, attitudes and other meaningful symbols that allows
human to communicate, interpret and evaluate as members of society (Blackwell et al, 2001). It is the
primary reason behind a persons wants and behavior. Although, different societal groups have their
26

own culture that affects consumers buying behavior, the extent to which it influences the behavior might
vary from country to country.
Each cultural group can be divided into groups consisting of people with common life
experiences and situations, also known as subcultures (Kotler et al., 2005) such as nationality, racial
groups, religion, and geographical areas. The third cultural factor is social class, which is constituted of
other variables: occupation, income, education, and wealth (Blackwell et al., 2001). The knowledge and
belief are important parts of culture, in Kenya it is a common believe that person with quick learning
ability and sharp brain will do better in study, similarly hardworking and a skilled guy will be successful
while, in most of the developing countries Kenya included luck is believed as important as hard work.
The culture varies with region and religion. Every culture has smaller groups with shared values and
beliefs due to common life experience and situations. These groups are very important to marketers
since many of these subcultures make up important market segment (Kotler et al, 2001). Every society
in India has some form of social class structure; this class system is different for every country in point
of distribution and ratio.

Perceived Brand Image

Brand is a name in every consumers mind (Mooij, 1998) and it is characterized by a noticeable
name or symbol which can differentiate the goods and services from the rivals (Aaker, 1991; Keller,
1998). In addition to a specific brand name, a brand is also composed of products, packaging, promotion,
advertising, as well as its overall presentation (Murphy, 1998). From the consumers perspective, brand
is a guarantor of reliability and qualifying consumer products (Roman et al., 2005). Added to this,
consumers would like to buy and use brand-name products with a view to highlight their personality in
different situational contexts (Aaker, 1999; Fennis and Pruyn, 2006).
Nowadays, consumers have a wide range of choice to choose from when they enter a shopping
mall. It is found that consumers emotions are one of the major determinants which affect their buying
behavior (Berry, 2000). According to a research conducted by Freeride Media (1998) on shopping
habits, nearly onefourth of the respondents are likely to impulse-buy clothes and accessories. When
deciding which products to purchase, consumers would have their preferences, which are developed in
accordance with their perceptions towards the brand. Successful branding could make consumers aware
of the presence of the brand and hence could increase the chance of buying the companys products and
services (Doyle, 1999). A brand can be an everlasting and lucrative asset as long as it is maintained in a
good manner that can continue satisfying consumers needs (Batchelor, 1998; Murphy, 1998).
Although successful brands can be totally different in nature, they share something in common,
for instances well-priced products and consistent quality (Murphy, 1998). As mentioned by Levitt
(1983), there are four elements for building a successful brand, namely tangible product, basic brand,
augmented brand and potential brand. Tangible product refers to the commodity which meets the basic
needs of the customers.
Basic brand, on the other hand, considers the packaging of the tangible product so as to attract
the attention from the potential customers. The brand can be further augmented with the provision of
credibility, effective after-sales services and the like. Finally and most importantly, a potential brand is
27

established through engendering customer preference and loyalty. By doing so, the image of the brand
could be well instilled in the customers mind.

Level of Income
Another factor that influences consumer buyer behavior is income. The types and quantity of
goods bought differ depending on the wage earned by the consumer. When buyers have greater income,
they purchase more luxury goods like high-end cars. John B. Taylor (2001) explains that a decrease in
income shifts purchasing behavior from buying normal goods to inferior goods. It is simply put as
consumers buy fewer specialty items, such as shoes and clothing, and buy more store-brand items.

The figure below presents the conceptual framework on the selected factors influencing consumer buying
behavior of the automotive brands.

PERCEIVED PRICE
PERCEIVED QUALITY
CULTURAL FACTORS
PERCEIVED BRAND
IMAGE

INFLUENCE

CONSUMER
BUYING
BEHAVIOUR

INCOME LEVEL

INDEPENDENT VARIABLES

DEPENDENT VARIABLES

The figure above presents the conceptual framework on the factors influencing consumer
buying behavior which are perceived price, perceived quality, cultural factors, perceived brand image
and level of income. The conceptual framework therefore shows the relationship between the variables.

Sales Process

28

Selling commercial vehicle is different than selling cars to customers for personal use. A
commercial vehicle customer is buying a new truck to use it to earn money for his business. The
trick to successful commercial vehicle sales is to understand buying a vehicle for the commercial
vehicle buyer is a process and not an on-the-spot decision. For you to close more and make more
sales, your approach must be methodical and organized. Theres no room for random and confused
sales tactics that can work sometimes, but not every time.

A sales process is a map consisting of a series of customer

focused steps that will lead your sales force from generating
inquiry through closing the sale, retaining customers and
garnering referrals. In other words it is a systematic, repeatable
series of steps that map out and track interaction with prospects
from their first point of engagement with your business through
to a close.
Sales processes can vary greatly among organizations, products
and services. Ultimately, every sales manager must ensure that
their sales process and its corresponding phases are as short as
possible.

Advantages of Using a Sales Process

Higher conversion
Increase the conversion rate and you
increase sales. By understanding the
process in detail you can start to make it
more efficient and add tools that will
helps your sales team to better close
deals.

Bigger deals
By truly understanding how your
sales process works and then
managing it, you can make sure
that sales people do the steps
necessary to close big deals.

Less time
A lot of sales people time are
wasted on deals that will never
happen. A great sales process will
help sales people and management
to recognize a lost deal early.

Generally a sales process is consist of 7 distinct steps:

29

1. Prospecting involves finding and qualifying potential customers. Qualifying is the process
of determining whether a potential customer has a need or want that the company can fulfill
and whether the potential client can afford the product.
2. Preparation involves preparing for the initial contact with a potential customer. You will
need to collect and study relevant information such as product descriptions, prices, and
competitor information. You will also need to develop your initial sales presentation.
3. Approach is the first face-to-face interaction you will have with the potential customer. In
the premium approach, you give your prospect a gift at the beginning of the interaction. It
may be a pen, a novelty item or company calendar, for example. Another method is the
question approach, in which you ask a question to get the prospect interested. For example,
'would you have a problem making a 15% annual return on an investment?' You may also
use the product approach, in which you give the prospect a sample to review. The idea
behind all of these approaches is to get the prospect involved in the interaction quickly.
4. Presentation involves actively listening to the needs and wants of the potential customer
and demonstrating how your product can meet those needs and wants.
5. Handling objections is an important part of the process. Objections can be useful because
they tell the salesperson what to focus upon in addressing a prospect's concerns. Successful
salespeople learn how to overcome objections through preparation and having the right
information at hand to address them.
6. Closing involves being able to identify closing signals from the prospect that indicate it's
decision time. There are different approaches to closing. In the alternative choice close, you
assume the sale and offer the prospect a choice such as, 'Will this be a cash or credit
transaction?' An extra inducement close involves you offering something extra to get the
buyer to agree, such as a discount or a free product. A standing room only close involves
you informing the prospect that time is of the essence because some impending event, such
as a price increase, will change the terms of the offer.
7. Follow-up involves you trying to build a long-term relationship with your customer for
purposes of repeat sales. For example, you make contact with the customer sometime after
the sale and make sure the product was received and is in good condition. Again, the idea
is not to sell at this stage, but to create a solid relationship for future sales.
To monitor the sales process we use the concept of Sales Funnel. A sales funnel is a visual
representation of the steps required to sell your products or services. A sales funnel should reveal how
many prospects you have in each stage of your sales cycle, and also detail your conversion rates for
each stage.
In order to understand more about the sales funnel, first a little terminology. There are basically
three types of people youll interact with during the sales process:
30

1. Enquiry
2. Lead
3. Customer
An enquiry is someone who becomes aware of your company or someone who you decide to pursue
for a sale, even if they dont know about your company yet. Typically, this includes everyone in
one big group, but you could also break this down further to only look at qualified prospects, which
are enquiries that meet certain qualifications to becoming customers. For example, if youre selling
pet products, a qualified prospect is someone who has a pet, versus someone who simply likes the
cute animal pictures on your blog, but will never buy anything from you.
Lead is a term thats used differently based on the company. In many cases, it is used
interchangeably with qualified prospect, but usually, a lead is someone who has had some kind of
contact with your company and they are still interested. All leads are enquiries, but not all enquiries
are leads.
And customers are those people who have made a purchase. You can further separate out people who
have made just one purchase and people who have made several purchases, or repeat customers.
To image a sales funnel, think of an inverted pyramid, or the shape of a kitchen funnel (hence the
name). Heres a simple example of a sales funnel:

31

As you can see, at the very top of the funnel, you have
enquiries. This is where you cast a wide net, trying to find as
many enquiries as possible to bring into the sales funnel.
A small percentage of those enquiries will be leads, people
who are actually interested in your product or service and who
are qualified to buy. Its a numbers game; the more good
enquiries you bring into the sales funnel, the more leads youll
have. And this is important because the more prospects you
have, the more customers you have.
The last piece of our simple sales funnel: the customer. A small
percentage of people who are interested will actually make a
purchase and become a customer. You can (and should) know
what percentage of people move down the sales funnel.
So, when working on your sales funnel, you want to have two
goals:
1. Find more good enquiries, to funnel a larger number of people into the process
2. Increase the percentage of people who move one level to the next down the pipeline

Now lets take a look at how the general sales process fits into the sales funnel:

Prospecting, Preparation
and Approach
Presentation and Handling
Objections
Closing and Follow up

Sales Funnel

Sales Process

Each sales process is a part of sales funnel. By finding out the conversion rate from one level of
funnel to other level, one can get a clear picture of their sales process effectiveness.
While your sales funnel ends when someone makes a purchase, theres another level outside of
the sales funnel. Actually, there are two levels, working simultaneously: loyal fan and repeat
customer. First, someone can become a loyal fan. They may or may not make a purchase again
32

(for example, someone who purchases a home from you but may not make a purchase again for a
long time), but they tell others about your company and encourage them to make a purchase. This
is extremely important to finding more leads for the awareness part of your sales funnel. Word
of mouth or Reference is powerful. The repeat customer is even better, since they are actually
making another purchase.

The BANT Formula (Developed by IBM)

No matter what you sell, you need to build a relationship with a prospect during the sales cycle.
And just as important as that is, you first need to determine which prospects have a greater
probability of closing (immediate buyers versus tire kickers). If not, you can waste countless hours
talking with prospects that have a low probability of closing.
Originally developed by IBM, the BANT formula is a great tool for sales leaders and salespeople alike.
Why? Because it can help them quickly determine if a prospective buyer has the budget, authority, need
and time when buying what you sell.

What Is The BANT Acronym?

B = Budget: Determines if there is a budget for what you are selling.
A = Authority: Determines if the person you are talking to has the authority to make a purchasing
decision.
N = Need(s): Determines if there is a business need for what you are selling.
T = Time: Determines the timeframe for implementation.

The BANT formula is an excellent tool for salespeople and sales leaders to use as it helps them
quantify the subjective sales process (salespeople are notorious for chasing prospects that have little
to no chance of being closed). More importantly, sales leaders now have a simple tool to help a
salesperson manage a new sales opportunity.
Determining if a prospect has the budget for what you are selling is a critical step in the closing process.
Without it, a prospect will always be thinking, "That would be a nice thing to have - if I only could
afford it." Specifically, the budgeting process typically falls into three categories:
1. Does a prospect have the funds in the company's budget?
2. If a decision maker(s) does not have the budget; can they find the money?
3. If they don't have the funds, will it be available in the future (annual budgets are typical in larger
companies)?
Although the "budget issue" is typically one of the most difficult parts to discover, it is one of the
most vital parts of the BANT formula. Why? Because
33

1.) It helps a salesperson to determine if a prospect has the money to fund the sale and
2.) It helps a salesperson to properly complete their sales pipeline report(s), AKA, a sales forecast.

The Key To The BANT Formula Is Asking The Right Questions.

There are many elements to a successful sales call, but the two most important ones are
1.) Being in control of the sales call and
2.) Asking targeted and specific questions.
Seasoned salespeople and sales leaders alike know that it is best to avoid a sales pitch early in the sales
cycle; instead, they know the best approach is to take a step back and ask some open-ended probing
questions to ensure that there is a good fit and need for what they are selling. Oh, by the way, if you
ONLY talk about the features and benefits of what you are selling, a prospect will quickly tune you
out.
To help you determine if a prospect is actively looking to buy what you sell, we recommend taking
this multi-step process.

Step 1: Determine why the prospect is taking the time from their day to talk with you.
Step 2: Determine what it would mean to them financially if they solved their problem (most people
make buying decisions (in a B2B sale) if your product/services can make or save them money).
Step 3: Determine what the prospect's decision-making requirements are when buying what you
are selling.
Step 4: Ask the prospect how their company makes buying decisions as well as this person's role
in the decision making process.
Step 5: Determine if the person you are talking to can make the final decision when buying what
you are selling.

34

Research Methodology:
1. Research Design Selection
2. Sampling design Selection
3. Data Collection and Analysis
4. Conclusions and suggestions

RESEARCH DESIGN:
EXPLORATORY: The primary objective of exploratory research is to provide insights into, and
an understanding of, the problem confronting the researcher. Exploratory research is used in cases
when one must define the problem more precisely, identify relevant courses of action, or gain
additional insights before an approach can be developed.
The information needed is only loosely defined at this stage, and the research process that is adopted
is flexible and unstructured. The primary data are qualitative in nature and are analyzed accordingly.
Given these characteristics of the research process, the findings of exploratory research should be
regarded as tentative or as input to further research. Exploratory research was done so as to
understand the customers mind and their preferences.

DESCRIPTIVE: In the study Descriptive or statistical analysis is used to describe the data and
characteristics of the population. After the exploratory research descriptive research was done to get
a better understanding of the outcomes of the exploratory research.

SAMPLING DESIGN:
NON-PROBABILITY convenience sampling
PROBABILITY Simple random sampling (For objective 4)
A probability sampling is one in which every unit in the population has a chance (greater than zero)
of being selected in the sample, and this probability can be accurately determined. Nonprobability
sampling is any sampling method where some elements of the population have no chance of
selection.

35

DATA COLLECTION AND ANALYSIS:

OBJECTIVES: To study the most influencing factors affecting the buying decision of SCV
customers and the perception of DOST vehicle in market.
Population: Customers of SCV vehicles in DELHI//NCR region.
Sample: 68
Sampling Design: Convenience Sampling
Data Source: Primary
Data Collection Method- Survey through direct interview and tele calling
Areas Covered- New Kondli (New Delhi), Meerut Road, UP border, Chandni Chowk

OBJECTIVES: To study the sales process employed by the Ashok Leyland at their dealerships and
analysis of lead drop at each stages of the sales process.
Population: Customers of AL DOST in Delhi/NCR region & Sales Consultants of Shri Nageen
Dealership.
Sample: 101(leads) + 11(Sales Consultants)
Sampling Design: Convenience Sampling
Data Source: Primary & Secondary
Data Collection Method- Survey through direct interview and tele calling

36

Findings and Analysis

Customer buying preference related to various companies is depicted in the following bar
chart diagram- According to customer preference maximum numbers of the customers are in
favor of buying M&M BMT. Survey results shows that around 46.9% of the customers have given
M&M BMT full rating.

37

Factors Influencing Customer Buying Decision- Initially during client visits, main motive was
to find out which all the factors that influencing customer buying decision. We came to know after
lot of customer visit that price is not a primary factor in decision making. We jotted down all the
factors that affect customer decision in choosing a particular brand over other. In survey we took
8 factors which following result table depict. On a Likert scale, we asked customers to rate the
factors on a scale from one to five. One means most affecting their decision and five means least
affecting their decision.

38

Maintenance (55.9%) and Loading Capacity (47.1%) are the primary factors that influence
customer buying decision. Maintenance here includes availability of spare parts and service centers
(Mechanic and Dealership). Only 23.5% of customers are majorly concerned with the price or
return on investment as primary parameter.
Resale Value (30.9%) and Engine (27.9%) is another important factor customer consider before
buying a vehicle. Factor that least affect the buying behavior of customer are safety, style and
comfort of the vehicle.
It is because most customer who buys the machine mostly uneducated and they are least concerned
with the safety, style and comfort, mostly they buy the machine to give it on rent. They are mostly
concerned about the machine running cost and its operations in various working conditions.

Before buying, around 71% of customer made comparison with other brand product available in
the market as shown by following figure.
Most of the customer didnt make comparison
around 66.7% with

other brands available

in the market because they prefer to go of the

same brand backhoe loader again.

39

Brand Awareness of Ashok Leyland DOST

Being a well-established brand, 88% said to know about AL DOST. This much awareness is pretty
fine for a 2 year old product. Still some emphasis should be given on activities to increase the
awareness.

Brand Awareness of AL DOST

12%

88%

Yes

No

To understand more about the brand awareness a relative analysis is done between the customers
who does the comparison before purchasing and those who know about the AL DOST.

Have you heard of AL DOST * Comparison before buying

Crosstabulation
Count
Comparison Before buying

Have you heard of AL DOST

Total

Total

No

Yes

No

Yes

14

46

60

20

48

68

95% customer know about the AL DOST among those who compare before purchasing vehicle.
And 70% know about the AL DOST among those who dont compare before purchasing. Hence
significant amount of customer know about AL DOST whether the customer compare or not.
40

To find the most effective promotion channel through which they heard about the AL DOST, a
significant result came out. 46% said they got to know from their references and 32% found out
from the vehicle they saw on the road.
In a way we can say that most effective promotion channel is external to the company and by
providing excellent service to their customers will fetch better result than internal activities like
Paper Ad (6%) and through Sales Consultants (16%)

Awareness Channel

16%
32%
6%

46%

On Road

Reference

Paper Ad

DSE

41

Perception of AL DOST
To understand the perception of AL DOST, several questions has been asked from the AL DOSTs
owners to find out what they think of the product, its selling points, demerits and their satisfaction
level. Apart from Maintenance (service center and spare parts problem) and Resale value the
customer are highly satisfied with the product. On a Likert scale, we asked customers to rate the
factors on a scale from one to five. One means most affecting their decision and five means least
affecting their decision.

42

Those who own the AL DOST, their brand perception significantly change 88% DOST owners
have given highest rating to AL DOST.

Dost Owner * Brand Rating

Crosstabulation

Total
1

Dost Owner
Total

No

37

43

Yes

22

25

23

38

68

43

Lead Drop Analysis:

In order to understand the main reasons of poor conversion ratio of lead to sales, around 101 leads
out of 340 leads from of April & May month has been surveyed. During the study around 38 leads
(37.62%) are classified as Not Reachable, after trying for 3-4 times. And 28 leads (27.72%) said
they dont have any plan to buy now. Which sums up around 65.35% of lead of no use, making it
a very significant problem in classifying leads by sales consultants.
Problem

No. of Problem

Competitor

5 (4.95%)

Lead Drop Reasons

40

Dissatisfaction

1 (0.99%)

35
30

Finance

3 (2.97%)

25
20

Later

26 (25.74%)

15
10

Not Reachable

38 (37.62%)

5
0
Dissatisfied

No Plan

Finance

Later

Not Reachable

No Plan

28 (27.72%)

Enquiry to lead conversion is an important job of sales consultants and if not done in an efficient
way leads to wastage of resources in pursuing a wrong lead and also it gives a wrong picture of
sales funnel and also future planning will be not effective as we want.
From the analysis 34.65% reasons are external i.e. due to competitor, finance problem, dissatisfied
with previous products and planning to buy later.

In order to understand the working style of the salesmen, we performed structured interviews with
11 salesmen out of 15.Below were the areas in which there knowledge/working was tested:

How they select any location/area for pitching at initial level? Is it structured or random
Do they keep themselves updated about latest market trends and news by searching
information
How effective they are in relative untouched areas of selling? For example-Background
Study, Need Assessment and follow-up?
44

How good is their technical knowledge of the product

Which is the most effective mode of promotion in their opinion?

Which is the most frequent reason in their opinion for lead-drop?
Do they do any innovative promotion from their end?

For assessing their selling preparedness, we allotted scores in three areas-Background knowledge,
need assessment and follow up with customers and calculated the mean score. Attached below is
the score sheet.

All the 11 salesmen do random targeting i.e. they start their enquiry generation in random
order in assigned territory. Five of them mentioned that they locate the captive customers
based on profession but that was also in random manner
Only two out of 11(i.e. 18.18%) salesmen keep themselves updated with latest market trend
or news on their own. Most get the information from others while working in the field
8 out of 11 salesmen(i.e. 72.72%) believe that DEMO is the most helpful activity that is
used for promotion
8 out of 11 mentioned that lack of finance is the most frequent reason for a lead not being
converted.

Now, below listed is the score of 11 salesmen in selling preparedness.

Sales Process
Total Score
Background Study

Need Assessment

Follow-Up

Yes(1)

Yes(1)

Every Month via call

Yes(1)

Yes(1)

some Times(0.5)

2.5

No(0)

Yes(1)

Yes(1)

No

No

No

Yes(1)

Yes(1)

Yes(0.5)

2.5

No(0)

No(0)

some Times(0.5)

0.5

No(0)

Yes(1)

some Times(0.5)

1.5

No(0)

Yes(1)

Yes(1)

45

Yes(1)

No(0)

Yes(1)

No(0)

Yes(1)

No(0)

No(0)

Yes(1)

some Times(0.5)

1.5

Now the mean score is 1.68.Also we can see that the least total score obtained by all the salesmen
is in Background Study (4), then in follow-Up(4.5) and the highest is in Need Assessment(8).This
shows that most of them do not do background study and need assessment thoroughly.
Below five questions were asked for testing the technical knowledge.
-What is the unique selling point of the vehicle you sell?
-What are the engine specifications of the vehicles?
-Who are your different competitors?
-What is the loading capacity of the vehicle and the competitors?
-Price and mileage details

Below are the scores obtained:

Technical Knowledge

The mean score is 4.18.This reflects that all the

salesmen have sound knowledge of the product
specifications but still they should be updated
about the recent or forthcoming changes in the
market on their own.

4
4
4
4
5
4
4
4
4
4
5

46

Suggestions:

Perception of Ashok Leyland DOST is not at par with other competitors. Majority still thinks Ashok
Leyland as a South Indian Brand. In order to improve the perception more Below The Line activities
should be conducted, like
Pre-Sale Activity
1.
2.
3.
4.
5.
6.

Demonstration
Test Drive
Loan/Exchange Mela
Financers Meet
Brokers Meet
Customer Meet

Post Sale Activity

1.
2.
3.
4.

Service Camps
Remote Service Camps
Spare Parts Dealer Meet
Local Mechanics Meet

We should tie up with local mechanics from different locality and certified them with Ashok Leyland
Authentic Servicing center. Its a well-known fact in automobile industry that customer dont come to
service center after their warranty period ends and always prefer local mechanics. Hence by joining hands
with local mechanics will help us to serve our customer in future. This would help Ashok Leyland in
coping up with the problem of service center and also will help in their expansion plan.

Perception of Ashok Leyland DOST is not at par with other competitors. Majority still thinks Ashok
Leyland as a South Indian Brand. In order to improve the perception demo of vehicles should be provided
to the potential customers at their locality. Since normally our customer are present in close proximity,
hence one vehicle in a day can cover good amount of population.

Follow up is an important job of sales consultants, and also an effective tool to sustain healthy
relationship with the existing customer. Sales consultant think follow-up is a job of customer relation,
but during the whole sales process sales consultant build a close relationship with the customer, hence
apart from customer relationship personnel, a sales consultant must contact his customer at least once in
a week or two, either personally or by phone. This will help us in getting leads through referrals.

Sales consultant should have training session monthly to make them aware of various process or
techniques use by the Ashok Leyland and also to impart knowledge about the market knowledge and
position. Training must include: o Categorizing different types of customer o Mock test for sales pitch
o Write up a separate quote letter with the specification highlights that will allow the truck to
perform the tasks the buyer needs
o Report from SC after not being able to convert a lead

47

Conclusion:
Indias commercial vehicle industry has long-term growth potential. Due to government expediting policies and
economy accelerating back to 7%-8% GDP growth per annum, CV industry is poised to grow.
With infrastructure getting a push, increase in urbanization and last mile connectivity a challenge, players are
looking to ride on the hub and spoke model that's emerging. Large pick-ups bring the goods till the outskirts of
the city and the smaller pick-ups travel the length and breadth of the city transporting the wares. One of the many
reasons of boom in this sector.
From the forecast of the Indian Small Commercial Vehicles (SCV) Market by Frost & Sullivan, projected sales
volumes of SCV will go up from 0.6 million in FY 2014 to touch 1 million in FY 2020.
This project was about the 2.5T SCV DOST manufactured by Ashok Leyland which due to intense competition
from its competitors has relatively small market share in Delhi/NCR region. So in this project different parameters
on which the sale of DOST depends are studied and analyzed.
Finally it was found that Maintenance, Loading Capacity, Resale Value and Engine are the primary factor
impacting customer purchase decision. Brand perception has to be improved by organizing various Below the
Line activities. Collaborating with local mechanics will be viable solution for overcoming servicing problem.
More emphasis should be given on the sales consultants training, in order to improve their sales technique and
also to improve their whole sales process.
More and more competitors are entering the market with different schemes and specifications. Also in two years
Ashok Leyland is able to capture major chunk of market share and which is keep on increasing. Also since they
are now moving in north India, ball is now in their court to either build the brand or destroy it.

48

Bibliography

www.managementparadise.com ... Marketing Management

www.ijsrp.org/research-paper- 214/ijsrp-p26.pdf

www.newagepublishers.com/samplechapter/16.pdf

https://www.boundless.com/marketing/definition/consumer-behavior/

www.marketingweek.co.uk/trends/trending-topics/consumer-behaviour

Marketing Management, 14E, Philip Kotler & Kevin Lane Keller

Report on sale strategy and Market development plan to improve Leyland Deere Market
share in Delhi/NCR region, Nishchal Sarin, 2013

http://www.marketingmo.com/strategic-planning/sales-process-management/

http://vpofstrategy.com/sales-strategy/

http://smallbusiness.chron.com/top-sales-tricks-heavy-truck-sales-reps

IMPORTANT FACTORS FOR SALESPERSON EVALUATION, VESNA DAMNJANOVIC

& DARKO KRULJ, 2005, The 7th Balkan Conference on Operational Research BACOR 05
Constanta, May 2005, Romania

49

Annexure I
Questionnaire:
1. Name:

Address:
City:
Contact Nos:
2. In which operation category you belong
Transporter
Individual
3. Number of vehicle you have?

4. Kindly Rate the following brands according to your buying preference? (5 Being the most
preferred, 1- Being the least preferred)
Rating/company
Tata
M&M
Ashok Leyland
Force
HM
Piaggio

5. Tick the following according, to you buying preference?

Rent

Buy

6. On a scale of five, rate the following factors according to their impact on your buying decision?
(5- Being the highest impact, 1- Being the lowest impact)
7.
Rating/Factors
1
2
3
4
5
Price
Availability of
Spare Parts
Technology
Maintenance
Cost
Reputation
of
Company
Quality
50

Engine
Specification
Loading
Capacity
Body Material
Service Life
After
Sales
Service
Order Delivery
Time
Recommendation
from Known

8. Before buying the vehicle, did you make any comparison with other brand available in the
market?
Yes

No

9. Are you using AL Dost?

Yes

No

10. As compared to your other/previous product, how satisfied are you with AL Dost?
Extremely Satisfied
Very Satisfied
Neutral
Not Satisfied
Extremely Dissatisfied
11. How was your purchase experience with AL?
o Very Good
o Good
o Average
o Below Average
o Very Bad
12. If you want to purchase another vehicle, would you like to go for the same company again?
o Yes
o No
13. If a known associate of yours wants to purchase a Dost you would:
Convince him to buy same brand as yours
recommend him to buy other brand
Wont Recommend
14. Any suggestions:
51