Factor Analysis of Rural Consumers Preference Attributes in the Purchase of Two-Wheelers: An Empirical Analysis

S G Sureshrajan* and M Selvachandra**

Two-wheeler industry is growing at the rate of 10-15% year-on-year. A key factor contributing to this growth is the rural consumers potential. The socioeconomic changes (lifestyle, habits and tastes, and economic status), literacy level, infrastructure facilities, and increase in the income and expectations of the rural consumers are pushing the rural market ahead at around 25% annually. This study specially focuses on rural consumers preference attributes while purchasing a two-wheeler. The study is useful to the corporate world to tap this segment and improve the living standards of the rural folk.

Introduction
Earlier, rural consumers lacked general awareness and technology because of their remote dwellings and low level of education. But of late, there has been a drastic improvement in their attitude following the development in communication technology, awareness towards education and job oppurtunities here and abroad. The study aims to identify the rural consumers purchase attitudes and thus help the marketers in tapping this segment.

Literature Review
Schiffman and Kanuk (1991) define consumer behavior as a display of searching, purchasing, using, evaluating and disposing of products and services that they expect will satisfy their needs. Kotler (1981) identifies four interdependent factors that influence consumer behavior: product, seller, situation and buyer. Apart from other characteristics, a buyer is influenced by psychological characteristics such as motivation and learning.
* Senior Lecturer, Department of Management Studies, Bharathiyar College of Engineering and Technology, Karikal 609609, Pondicherry, India. E-mail: sureshrajan1971@gmail.com

** Reader, Department of Commerce, ADM College for Women (Autonomous), Nagapattinam, Tamil Nadu, India. E-mail: drmselvachandra@gmail.com Factor Analysis of RuralReserved. 2011 IUP. All Rights Consumers Preference Attributes in the Purchase of Two-Wheelers: An Empirical Analysis 7

McAlister (1982) demonstrates how an inventory of attributes of products may be used to understand the choice of products by customers. In the same token, an inventory of attributes for motorized two-wheelers should be established to understand how customers choose between the products. In other words, a scale of preferences should be established to understand the preferences of customers. Inman (2001) demonstrates that a variety seeking behavior is caused by product attributes than the brand. This strengthens the need for creating an inventory of attributes. A scale of preference would be very useful to compare the first-time buyers with repeat buyers. Kumar and Trivedi (2006) find that consumers can be segmented on the basis of variety seeking behavior and each segment may be approached with a tailored marketing strategy.

Objectives of the Study

The objectives of the study are:

To examine the rural consumers preference attributes in the purchase of two-wheelers; and To identify consumers experience which would help the marketers in improving their sales volume in the rural market.

Research Methodology and Data Collection

The study included 375 consumers residing in rural communities of Nagapattinam district, Tamilnadu, South India. Rural communities are defined as rural and surrounding rural areas. Therefore, a multistage sampling method was employed and the respondents were stratified occupation-wise and segmented into 75 categories. The respondents age ranged from 20 to above 60. The level of education was segmented from under secondary to professional in six categories, and family monthly income level was segmented from below 5,000 to above 20,000 in five categories. The study included 284 male and 91 female respondents. A questionnaire was administered on different items related to attitudes of the consumers (see Appendix). Respondents were rated on a 10-point Thurstone scale, with the maximum importance for an attribute being 10, and least importance for an attribute 1. The questionnaires were pretested on a set of 50 respondents to assess their validity and reliability.

Factor Analysis of Respondents Preference Attributes While Purchasing

A list of consumer preferences was prepared from primary and secondary sources like automotive magazines, newspapers, sales brochures and annual reports. Factor analysis was done by principle component analysis method for
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15 components, namely: (1) Brand and company name; (2) Model; (3) Product durability/Reliability/Quality; (4) Reliable price; (5) After sales and services; (6) Guarantee/Warrantee; (7) Goodwill; (8) Advance technical features; (9) Credit facility; (10) Performance; (11) Easy availability of spares; (12) Color/Looks; (13) Size; (14) Resale value; and (15) Showroom display. In all, 271 (out of 375) respondents ranked the above said attributes in the order of preference while purchasing a two-wheeler. Tables 1 and 2 interpret the factor loading for after sales service, which is comparatively low (69.5%) compared to the total variance. However, the remaining 14 attributes have high factor loadings (above 82%) (bold values from communalities extraction column of Table 2 have been converted as percentage factor variance score). The high factor loading variance of attributes like credit Table 1: Total Variance of the Factors Influencing Two-Wheeler Purchase
Initial Eigen Value Component Cumulative % Extraction Sums of Squared Loadings Cumulative % % of Variance Rotation Sums of Squared Loadings Cumulative % 33.325 61.767 86.778
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% of Variance

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15.

7.286 4.361 1.369 0.774 0.364 0.255 0.204 0.187 0.089 0.057 0.027 0.021 0.005 0.001 2.91E016

48.574 29.075 9.129 5.158 2.424 1.698 1.359 1.244 0.591 0.383 0.183 0.143 0.031 0.007 1.94E015

48.574 77.649 86.778 91.936 94.360 96.058 97.417 98.661 99.252 99.635 99.818 99.961 99.993 100.000 100.000

7.286 4.361 1.369

48.574 29.075 9.129

48.574 77.649 86.778

4.999 4.266 3.752

33.325 28.442 25.011

Note: Extraction Method Principal Component Analysis.

Factor Analysis of Rural Consumers Preference Attributes in the Purchase of Two-Wheelers: An Empirical Analysis

% of Variance

Total

Total

Total

Table 2: Communalities and Rotated Component Matrix for the Factors Influencing Two-Wheeler Purchase
Communalities Attributes Initial 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 Extraction 0.769 0.832 0.861 0.932 0.695 0.830 0.857 0.900 0.953 0.932 0.837 0.922 0.947 0.926 0.823 Rotated Component Matrix Component Component Component 1 3 2 0.609 0.624 0.698 0.751 0.689 0.473 0.026 0.057 0.077 0.225 0.099 0.349 0.910 0.875 0.838 0.542 0.568 0.534 0.570 0.469 0.010 0.228 0.316 0.461 0.926 0.901 0.864 0.162 0.111 0.015 0.323 0.347 0.298 0.207 0.008 0.778 0.897 0.893 0.857 0.156 0.124 0.231 0.302 0.385 0.347

Brand/Company Model Durability/Reliability/ Quality Reliable Price After Sales Service Guarantee/Warrantee Goodwill Advance Technical Features Credit Facility Performance Easy Availability of Spares Color/Good Looks CC Size Resale Value Showroom Display

Note: Extraction Method Principal Component Analysis; Rotation Method Varimax with Kaiser Normalization. Rotation converged in 8 iterations.

facility, size, reliable price and performance scored 95.3%, 94.7%, 93.2%, and 93.2% respectively (bold values from communalities extraction column of Table 2 have been converted as percentage factor variance score). Factor 1 has five significant loadings, Factor 2 has three significant loadings and Factor 3 has four significant loadings (Table 2). The first extracted factor gives reliable price product, durability/reliability/quality, after sales and services, model, and brand and company name, which account for 48.574% of the variance. The second factor gives performance, easy availability of spares, and color/looks which account for 29.075% of the variance. The third factor gives goodwill, advance technical features, credit facility, and guarantee/warrantee of product which account for 9.129% of the variance. (The respective factor value percentages 48.574%, 29.075% and 9.129% have been taken from Extraction Sums of Squared Loadings column of Table 1).
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Findings
The findings of the study show that the first extracted factor gives reliable price, product durability/reliability/quality, after sales and services, model, and brand and company name which account for 48.574% of the variance. The second factor gives performance, easy availability of spares, and color/ looks which account for 29.075% of the variance. The third factor gives goodwill, advance technical features, credit facility, and guarantee/warrantee of product which account for 9.129% of the variance (Table 1).

Conclusion
The status of the rural consumers purchase attitude towards the two-wheeler was identified. Based on the socioeconomic changes, the rural consumers were found to be well-informed regarding the purchase. They had the capacity to analyze various factors before purchasing the product. The study shows that the analytical factors influencing the two-wheeler purchase decision of the people living in rural areas may help the marketers in tapping this segment. @

Bibliography
1. Inman J (2001), The Role of Sensory Specific Satiety in Attribute-Level Variety Seeking, Journal of Consumer Research, Vol. 28, No. 1, pp. 105-120. 2. Kotler P (1981), Marketing Management: Planning, Analysis and Control, 9th Edition, Prentice Hall of India Private Limited, New Delhi. 3. Kumar and Trivedi (2006), Estimation of Variety Seeking for Segmentation and Targeting: An Empirical Analysis, Journal of Targeting, Measurement and Analysis of Marketing, Vol. 15, No. 1, pp. 21-29. 4. McAlister L (1982), A Dynamic Attribute Satiation Model of Variety-Seeking Behaviour, Journal of Consumer Research, Vol. 9, No. 2, pp. 141-150. 5. Schiffman L G and Kanuk L L (1991), Consumer Behavior, Prentice Hall of India Private Limited, New Delhi.

Factor Analysis of Rural Consumers Preference Attributes in the Purchase of Two-Wheelers: An Empirical Analysis

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Appendix
Questionnaire Section I: Demography Details 1. 2. 3. 4. 5. 6. Name of the Respondent Village Name Age Sex Marital Status Education Male Yes Primary School Level High School Level Higher Secondary Level Undergraduate Postgraduate Professional 7. Occupation Agriculturist Government Employee Private Employee Business Housewife Student 8. Total Income (Per Month) Agriculture Employment Business Other sources Total
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Female No

Appendix (Cont.)
Section II: Pre-Purchase Evaluation 9. Specify the importance of the following factors while you took the purchase decision (Give rank order of preference 1 to 15, 1 is most preferred and 15 is less preferred) Attributes Brand/Company Model Durability/Reliability/Quality Reliable Price After Sales Services Guarantee/Warrantee Goodwill Advance Technical Features Credit Facility Performance Easy Availability of Spares Color/Good Looking Size CC Size Resale Value Showroom Display TV Audio Cellphone TwoWheeler

Reference # 02J-2011-10-01-01

Factor Analysis of Rural Consumers Preference Attributes in the Purchase of Two-Wheelers: An Empirical Analysis

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