(Approved by Govt. of M.P.

& AICTE Delhi & Affiliated to DAVV, Indore & RGPV, Bhopal)

Synopsis On
TO STUDY THE DIFFERENT FACTORS INFLUENCING IN PURCHASING THE PREMIUM CAR

Submitted to:
Prof. Ashish Paliwal

Submitted by:
Kapil Goyal MBA (FT) IV SEM

INDEX
S. No 1 2 3 4 5 6 Introduction Literature Review Rationale Of The Study Objective Research Methodology Bibliography Content Page. No 03-05 05-08 08 08 09 10

INTRODUCTION

In the market cars are on a path of becoming commodities just like the fate awaits for any other consumer goods .The automobile industry today is the most lucrative industry. Due to the increase in disposable income in both rural and urban sector and easy Finance being provided by all the financial institutes, the passenger car sales have increased. The passenger car industry in India has undergone a drastic change in terms of consumer perception as well as technology. From an extream perception of cars being an ultimate luxury, today it has probably acquired the status of necessity to many city dwellers. In 1960s cars were very expensive and only the very rich could afford them. The styles available were limited. India has emerged as one of the huge potential markets for cars of varied segments. Although the small cars dominate the market but the market for premium cars in India has been growing slowly and steadily. Due to the liberalization policies implemented by the Indian government during the 1990s, a number of automobile manufacturers started selling their newer model of cars in the country. Possessing a premium auto vehicle was a very costly affair in the yesteryears. But due to various manufacturing and assembly plants set by the auto majors, their prices have come down significantly. It is believed that the emergence of the several financiers in the country also helped in the popularity of the premium cars in India.

In India, premium cars are usually priced between INR 700,000 to INR 1,500,000. Due to the extensive dealership networks set up by the automobile companies, getting a brand new premium car is quite easy. Throughout the country you will even find several service centers of the auto Manufacturer, that offer service even to the premium cars. Premium cars come with some incredible features that make them immensely attractive. Most of the premium cars are designed with elusive looks. The state-of-the-art manufacture of the cars ensures spacious interiors and better maneuvering facilities.
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In the premium car segment, the leading manufacturers in India include the likes of Audi, Toyota, Nissan, Skoda, Hyundai, Honda who have come up with cars having some exciting features. Most of the premium car models are equipped with power steering, power window, central locking system, seat belts, air bags, fog lights, 5 speed manual transmission system, tubeless tires, rear spoiler, chrome kit and many more. The engine of the premium cars are known to deliver huge amount of power. Premium cars are available in India in different colors and shades. A car is one of the most significant purchases that an Indian household makes and this project addresses the most important question that perplexes car manufacturers:What makes the perfect car that influence will willfully purchase? The project highlights the factors that influence the buying decision of a consumer. The factor under consideration would be:

     

Price Income of the consumer Features in the car Safety standard Warranty scheme Finance facility

Buying behavior of premium car customers are highly influenced by unique set of cultural, social, economic and psychological factors. The study of buying behavior has proved that many factors like price, income, distribution of income, competition with substitutes, utility, consumer preference (economic factors) & factors like culture, attitude, social values, life styles, personality, size of family, education, health standards etc. (social factors) play a major role in buying behavior of customer. Economists among the social scientists assume that persons exhibit rational behavior, they have perfect information about the market, and attempts to obtain maximum value for every unit of money and effort spent. Economists thinks that consumers consider price as the

most effective vehicle of motivating purchases. The important economic factors and theories which are basic and relevant for understanding consumer behavior includes personal income, disposable income, discretionary income, family income, future income, consumers liquid assets like bank balances, short term bank deposits, shares, units, government bonds etc. , as well as living standards enjoyed in the past. Apart from all the factors mentioned earlier, availability of car finance or auto finance appears to be a vital factor that influences buying behavior of passenger car customers in our country. As per the most recent market information accessible on the Indian auto market, it is estimated that roughly 20% -25% of all cars purchased are bought on a cash transaction basis & the remaining 75% to 80% are funded by an assortment of means of financing such as automobile loans, car hire, operating leases and so forth. Obviously the means of funding preferred by the majority indian auto owners is a plain vanilla car loan, although car leasing is also becoming the funding means of choice for the corporate sector, mainly in big metropolitan areas.

REVIEW OF LITERATURE

Asian Journal of Business Management 2(3): 48-56, 2010 ISSN: 2041-8752:

A study by Lang motors (2007) found a list of 20 factors to be the most important factors that influence purchase of car. They are as follows 1- Reliability / Dependability, 2 Exterior Styling, 3 - Price / Cost to Buy, 4 - Interior Comfort, 5 -Value for the Money, 6 Fun to Drive, 7 - Reputation of the Manufacturer, 8 - Quality of Workmanship, 9 Engine Performance, 10 - Road-holding / Handling, 11 Fuel Economy, 12 - Storage and Cargo Capacity, 13 Ride Quality on Highway, 14 - Durability / Long Lasting, 15 Safety Features, 16 - Future Trade-In / Resale, 17 -Length of Warranty, 18 - Rebate / Incentive, 19 -Discount / Value Package, 20 - Environmentally Friendly Vehicle. Similarly a study by Power and associates (2005) listed the following nine to be the
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most important reasons for car purchase - 1 Styling, 2 Reliability, 3 Costs too much, 4 Poor quality, 5 Resale value, 6 Too small, 7 Lacked performance, 8 Didn't offer incentives, 9 Poor gas mileage. A study published in Anonymous (2008a) UK found for as many as 71% of customer price was the most important factor, followed by fuel economy, running costs, fuel type and Vehicle Excise Duty (VED ) costs.

Similarly an article published in Anonymous (2008b) quoted After Price; Reliability is the number one factor for buyers. Car buyers rate reliability over fuel efficiency as their primary decision makes. Fuel efficiency and safety rank second and third in importance Performance not a top priority for most car buyers. This study intends to prioritize the important factors with reference to premium cars from Indian consumers point of view.

Internationally Indexed Journal VolII , Issue -1 January 2011 (Indian Journal of Commerce & Management Studies ISSN 2229-567)

Gerald D. Bell (1967) studies how a new car buyer feels about his purchase and what factors determine his reactions when he begins living with his new car. The finding of this investigation suggests the effect of a customers self confidence, his personality, and the quality of service he receives upon his cognitive dissonance. Edward L. Grubb & Gregg Hupp (1968) tests a methodology for measurement of self-concept and consumer behavior in comparable terms and, therefore, to further substantiate the relationship of self theory to consumer behavior. The authors suggests that the owners of a specific make of automobiles perceive themselves as having self-concepts similar to those of others who own that make of automobile, and significantly.

Darlin Doman (1983) in the article has mentioned that satisfied new car buyers discuss their experiences with eight people dissatisfied buyers complain to an average of 22 people. William B Dodds (1991) investigated the effects of the extrinsic cues of price, brand and store information on consumer perception of product quality. They found that price had a positive effect on perceived quality but a negative effect on perceived value and respondents willingness to buy. Samson Itamer (1992) has observed that purchase
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decisions are determined on the basis of both absolute attributes of the alternatives and their relative positions within the particular choice set under consideration. He has further suggested that consumers are less likely to choose alternatives that were selected by other consumers for reasons that do not apply to them and that consumers are less likely to choose alternatives that are offered with unneeded features or premium even when these features do not reduce the value of the product in any way.

Aradhana Krishna (1994) viewed that buyers purchase behavior can be influenced not only by current price of a product but also by what price they expect in future. C W Park et al.(1994) assessing the consumer knowledge have observed that consumer knowledge is an important construct in understanding consumer behavior such as information search and information processing. Increase in self assessed knowledge was associated with decrease in the utilization of sales persons recommendations. Andrew etal. (1996) assesses no. of different measures of consumer expertise by examining their ability to predict correct choices in three stimulus based choice tasks.

Pavleen et al (2003) in their article have perceived that the family as a reference group has one of the strongest, most immediate and pervasive effects on a consumers personality motivation and attitudes. The author have affirmed that from the marketing point of view investigating the family as a consumption unit becomes crucial since attitudes towards saving and spending, and even towards brands and products, are often moulded by the family.

Richard et al. (2003) in their large scale, national study investigates the influences of monthly payment incentives (rebates and low interest rates) on the decision process of both car and truck owners and lessees. Results suggests that incentives were found rated significantly more important among lessees than among buyers. While evidence suggests that incentives obviously should not be used on a wholesale basis, there appears to be a niche among which incentives may be successful. Authors suggest that lessees would be more open to choosing a vehicle that has an attractive monthly payment via rebates and other incentives. Kristin Diehl (2005) suggests that consumers
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often search for and choose from ordered sets, commonly from options listed from best to worst. Greater search can lead to more positive evaluations for improving versus declining orderings because consumers experience more positive moments on which to base their evaluation. Overall evaluations are influenced by differences in these key moments over and above quality changes of the set. Davy Lerouge & Luk Warlop (2006) in their article proposes that many buying decisions require predictions of another person's product attitudes. Yet, consumers are decisions require predictions of another person's product attitudes. Yet, consumers are often inaccurate predictors, even for familiar others. Joanne Helperin (2010) suggests about the numerical benchmark - the almighty credit score. She insists to maintain a high credit score ensures qualifying for larger loans and lower interest rates. With a low credit score, you'll pay more interest, make higher down payments or not qualify to borrow at all.

RATIONALE OF THE STUDY

The passenger car industry in India has undergone a drastic change in terms of consumer perception as well as technology. premium car market is rapidly increasing. The project is analyzed the demographic, psychographic and buying characteristics of the customers in buying the premium car.. This paper tries to explore different factors influencing in purchasing premium car.

OBJECTIVE OF THE STUDY

The research objectives for the project undertaken can be defined as follows:   To identify the different factors for purchasing the premium car. To study the impact of demographic variables on factors of purchasing the premium car.

RESEARCH METHODOLOGY
In order to carry out this research the following methodology will be used:Research design: Research design is a plan to answer whom, when, where, and how the subject under investigation conceived so as to obtain answers to research questions. The type of research design involved in this study is descriptive research studies.

The Study Area: The Study will be carried out in Indore city. Data Collection: Primary Data: In order to collect primary data self administered questionnaire is used. Secondary Data: It will be collected from various published literature in research journals, research papers, articles, books, magazines and newspapers.

The Sample:

Sample Type: We will be using convenient judgmental sample.

Sample Size: 200 respondents

The Tools: Data Analysis: Factor analysis and other appropriate tools shall be applied to meet the objectives of the study.

REFERENCE

BIBLIOGRAPHY:

Asian Journal of Business Management 2(3): 48-56, 2010 ISSN: 2041-8752 , Published Date: September 30, 2010 Andrew D. Gershoff & Gita Venkataramani Johar ( 2006), Do You Know Me ? Consumer Calibration of Friends' Knowledge, Journal of Consumer Research, Vol. 32, , pp. 496 503. Aradhana Krishna,(1994), The effects of Deal Knowledge on Consumer Purchase Behavior, Journal of Marketing Research,Vol.31, pp.102-108. Association of Indian Automobile Manufactures, (2008), The Automobile Industry Statistical profile, Bombay. C.Whan Park, David L Motherbaugh & Lawrence Feick, (1994),Consumer Knowledge Assessment, Journal of Consumer Research, Vol.21, pp.210 218. Davy Lerouge & Luk Warlop,(2006), Why it is so Hard to Predict Our Partner's Product Preferences The Effect of Target Familiarity on Prediction Accuracy, Journal Of Consumer Research, Vol. 33, pp. 393-402. Domon Darlin, (1983) Although US Cars Are Improving, Imports Still Win Quality Survey Wall Street Journal, p.31. Search. Journal Of Consumer Research, Vol. 31, pp. 40-48. Internationally Indexed Journal VolII , Issue -1 January 2011 (Indian Journal of

Commerce & Management Studies ISSN 2229-5674) Mohnot S.R, (2001), Automobile Industry - 2001 and Beyond, Intecos-cier Multi Client Study,Industrial Techno- Economic Services Pvt. Ltd., New Delhi.

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