PATTERNS AND EFFECTS OF CLASSFIED

ADVERTISEMENTS ON THE SALE OF

SECOND HAND CARS IN THE DISTRICT
OF PATHANAMTHITTA, KERALA

PREPARED BY : STEPHIN
ROLL NO : 17MIB103
 INTRODUCTION

Cars are the most common mode of transportation, made

available to reach from one destination to another with ease. Cost
factor of different cars vary accordingly with each other passing
year, make and model of the car. Different categories of cars are
made each year, which suits the different personalities of the
people. Luxury Cars are more suited to make a statement, rather
than traveling from one place to another. Luxury cars are
considered as a status symbol, by many wealthy people in the
society.
 STATEMENT OF THE PROBLEM
Empirical studies have indicated that many second hand cars are
being sold in many ways and in different forms. Second hand
cars are being advertised in almost every media like television,
newspaper, online etc. most common method of selling used cars
in through newspapers in the classified section. The studies
available on this topic are very few. There are no specific studies
on this topic in Kerala. The study has made an attempt to explore
pattern of advertisement copy of second hand cars through
newspaper classifieds and what is the effect of classified
advertisement on the sale of second hand cars. The research
problem is stated as “patterns and effects of classified
advertisement on the sale of second hand cars in Pathanamthitta
district”.
 NEED OF THE STUDY

Since many used cars are being sold every day through
newspaper, it is important to know whether people are responding
to the advertisements placed in the classifieds. It is not clear
whether people are frequently resorting to the ads placed in
newspaper. Thus, thus study helps in providing a better
understanding of classifieds advertisements of used cars in
newspapers. The findings give an insight regarding the design of
advertisements copy to be adopted for classified advertisements.
 REVIEW OF LITERATURE

• Genesove, D (1993), paper presents an empirical investigation

of adverse selection in the wholesale used car market. New car
dealers (who sell both new and used cars) differ from used cars
dealers (who sell only used cars) in the propensity to sell
trade-ins on the wholesale market. Models of adverse selection
suggest that the dealer type that sells a higher proportion of its
trade-ins on the wholesale market will sell, on average, cars of
higher quality and receive in return a higher price. A survey of
dealer’s wholesale behaviour and prices collected at a
wholesale auction are used to test this prediction. Results
found weak evidence for adverse selection.
 CONT,

• Jiawei Chen et al (2010), we build a dynamic equilibrium

model of durable goods oligopoly, with customers who incur
lumpy costs when transacting in the secondary market, and
calibrate it to U.S. automobile industry data. By varying
transaction costs, we obtain a direct measure of the
competitive pressure that secondary markets create on durable
goods manufacturers. For our calibrated parameter values,
closing down the secondary market increases (net) profits of
new car manufacturers by 39%. This suggests that regulatory
changes that lower liquidity in secondary markets may aid
manufacturers.
 CONT,

• SP Anderson et al (1994), consumers have heterogeneous

tastes for new and used goods, and second hand markets
involve transactions costs. A monopoly seller may gain or lose
from the existence of a second hand market: locally it may
prefer lower transactions costs, but globally, it may prefer high
transactions costs so it can strangle the used market. The
monopolist uses the second hand markets as an indirect device
to achieve a form of second degree price discrimination. If the
monopolist can control the quality of its product when used it
may wish to deteriorate.
 OBJECTIVES OF THE STUDY

The study has been undertaken with the following specific

objectives. They are as follows:

1) To study the Advertisement Copy of second hand cars

through newspaper classifieds.

2) To assess the effect of Classified Advertisements on the sale

of second hand cars.
 DATA COLLECTION APPROACH
To carry out this research, information was collected with the
help of secondary data.
SECONDARY DATA
• The first step in data collection approach is to look for
secondary data. Usually it is the data developed for some
purpose other than for helping to solve the problem at hand.
Secondary data are collected through various magazines,
internal experts, website, directories, and external experts.
• Secondary data can be obtained from different sources:
• information collected through censuses or government
departments like housing, social security, electoral statistics,
tax records.
• internet searches or libraries.
• progress reports.
 TOOLS USED FOR ANALYSIS

Various tools were used for the data analysis such as

Averages, Frequency and Graphs. To conduct the
analysis MS Excel was used as it provided all that was
needed from the creation of tables, graphs, and simple
calculations. MS Excel proved to be software that was
simple and effective to conduct an analysis.
 PERIOD AND AREA OF THE STUDY

The period of study covers a time span of one year from

October 2017 to September 2018, and from this period
four months were selected on a random basis
comprising of December 2017, March 2018, May 2018,
and July 2018. Out of these four months classified
advertisements appearing on Tuesday’s and Thursday’s
were selected for the detailed analysis.
 LIMITATIONS OF THE STUDY

The study is conducted based on the information of

second hand cars in the Pathanamthitta region.
1) Since there are a lot of second hand cars being sold
every month a year, we only took the data of the
second hand cars being sold for 4 months, due to
time and other constraints.
2) Some advertisers could not be called due to technical
difficulties and some lack clarity in providing the
information about the study.
3) The study is generalized to second hand cars and its
sale through advertisements in newspapers only.
 CHAPTER SCHEME

The study is divided into 3 chapters:

Chapter 1: Introduction and design of the study

Chapter 2: Theoretical Background of the study
Chapter 3: Results and Discussions
THANK YOU!