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India CAR Study 2002

About India CAR (Customer Automobile Recommendation) Study

An innovative syndicating study carried out in Indian market by idea7 Sewells in 2002 Word of Mouth and customer recommendations play a very important role in determining market perception about an automobile. It is the market perception that determines the success of a product & success of a company and so it is very important for the car manufacturers to measure the willingness of existing users of a product to recommend it to others. The same is of a lot of interest to customers as well for it helps them make the purchase decision. India CAR Study aims to measure this willing ness of existing users of various car brands to recommend them to others. This study tracks this willingness through a scientific index known as Referral Value Index. This is the first attempt in India to measure Referral Value Index of an automobile. Research Methodology The study involved exhaustive consumer interviews conducted in eight cities across the country covering all major car markets. The total sample size for the research was 1641. The study tracks eighteen car brands to cover the entire spectrum of offerings in the Indian market but for a few low volume brands such as Fiat Uno in B segment & all the brands in D segment. (The exclusions have been made owing to low population and resultant unavailability of samples to avoid skewed responses also to avoid immature responses in newly created D Segment). This research recorded customers response on 21 Objective Response Parameters (ORPs) which determine the perception of a customer about a car. The respondents were exposed to 46 questions in order to ensure a very sharp, micro level analysis of their opinion. The research design scientifically strikes a balance between the objective and subjective

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determinants of consumer perceptions. The same gives it an edge over other feedbacks from the market place. The research entails a complex analysis of simple consumer responses to transform them in to the wonderful decision tool called Referral value Index. The research tracks responses at following three layers. Product Related Parameters (6 ORPs) Manufacturer related Parameters (7 ORPs) Dealers Related Parameters. (8 ORPs) General Findings & Analysis India CAR Study 2002 findings have been a mixed bag of expected results & surprises. Report well represents the volatility & cutthroat competition that exists in Indian car market today. The study categorises all the feedback in three components Product Recommendation Score (PRS), Manufacturer Recommendation Score (MRS) & Dealer Recommendation Score (DRS). The comprehensive Index which is a function of these three scores is called Customer Automobile Recommendation Index (CAR Index). Based on the research methodology PRS, MRS, and DRS & CAR Index lie in the range of -200 to +200. This range has been further divided into five Value Zones namely Delight Value Zone (+120 to +200) where the existing customers become the brand ambassadors of a product or manufacturer, Satisfaction value Zone (+40 to +120) where these customers tend to give positive inputs to prospects though they do not do it quite aggressively, Zero Value Zone (-40 to +40) where they maintain a neutral stand, Trouble Value Zone (-120 to 40)& Shock Value Zone (-200 to 120) which are characterized by the negative word of mouth about the car brand. Industry as a whole performed better on the product value front with average PRS of 105 than on the manufacturer value (Average MRS 90) & dealer value front (Average DRS 77). This reflects on the evolution stage of Indian Market where everybody has got international products but need to work on processes, after sales service & CRM etc. While the industry PRS & MRS lie at the upper segment of Satisfaction Value Zone. The DRS lies at the lower end of the same zone. This clearly points out a need for improvements at dealership levels. Among The 18 brands surveyed Honda City tops the over all & C segment chart with a score of 120. It has along with it Maruti Alto topping B Segment with a score of 108, & Toyota Qualis topping the UV segment with a score of 117. Only Honda City CAR Index touches Delight Value Zone. Industry CAR Index stands at 97, a point in Satisfaction Value Zone.This reflects on the scope available for the players in car market who can have a clear-cut differentiation strategy of moving into Delight Value Zone.

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C Segment Chart has Mitsubishi Lancer behind Honda City followed by Hyundai Accent, Opel Corsa, Maruti Esteem, and Ford Ikon & Fiat Sienna. There is reasonable difference in recommendation scores of few of them & the same certainly gives these brands recommendation value advantage. Here Opel Corsa with consistent performance on the all the three fronts maintains a better position than Ford Ikon & Maruti esteem. The scores of B Segment brands very well depict fierce fight at the market place. Here Maruti Alto tops the chart but others- Fiat Palio, Tata Indica including Altos own siblings Maruti Zen & Maruti Wagon R are also very close & the gap in the scores of these brands is practically insignificant to be able to give any of them a recommendation value advantage. The decision factors for new customers in such a scenario become individual brand associations & value for money etc. This gives us the reason why Tata Indica despite being at the bottom of the chart sells more. The low CAR Index of Maruti 800 at 85 which included responses from Omni customers as well tells us the story of it losing market share to its own siblings and other B segment cars. Utility Vehicle segment chart tells the success story of Toyota Qualis in India which is consistently on the growth path. Qualis tops the chart with a score of 117 being very close to Honda City & Delight Value Zone the other three brands surveyed namely Tata Safari,Mahindra Bolero & Tata Sumo are distant second with almost equal CAR Index. If we look at the PRS table separately there are three brands that find a place in the Delight Value Zone namely Honda City, Hyundai Accent & Toyota Qualis with Mitushibishi Lancer not being far off at 117 PRS. This depicts a good performance of manufacturers on the product front. There is no brand from B Segment that finds a place in this zone. It is a fact worth noting considering that B segment still is the hottest segment and is the segment where maximum volume comes from. MRS & DRS charts have none of the brands having place in Delight Value Zone. Maruti emerges as a clear leader in terms of nonproduct parameters most of its brands doing relatively better on MRS & DRS front. Honda & Toyota also do better than others on these fronts.

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Surprises There have been a few surprises in the study with the top selling Tata Indica being at the bottom of B Segment, Fiat Palio still maintaining the recommendation values though its numbers are falling down & Opel Corsa making it ahead of Ford Ikon & Maruti Esteem in C Segment. As far as Indica is concerned the sample used for study had equal number of pre V2, Indica customers among respondents that affected the scores. Also the lead which other B segment brands have over Indica is not very high compared to terrific value for money that the brand offers. In fact none of the brands in B Segment has recommendation value advantage over competition. In case of C segment Opel Corsa registered a consistent performance all three parameters which helped it to do it better. Some Very Interesting Findings 70% of the people think that it is very important or are atleast concerned about their car manufacturer keeping in touch with them while only 17% completely agree that their manufacturer is keeping in touch with them. Only 35% people feel that they will strongly recommend their car brand to a friend while 29% say that they would strongly recommend a car from the same manufacturer & only 17% would strongly recommend buying a car from the same dealer. Only 22% of the respondents completely agree that the service charges at their car dealership are reasonable. 97% of the people are concerned about the looks of their cars however only 50% feel that their cars have excellent looks & styling.

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72% of the people are concerned about the sales person knowledge to be able to guide them through the purchase process however only 34% completely agree that at the time of their purchase the sales team had it. 32% of the respondents completely agree that the service team at the dealership is competent enough to handle their repair problems. About idea7 Sewells idea7 Sewells is Indias first automotive services vertical. It is a start up venture promoted by auto industry professionals. idea7 Sewells operates various business domains such as Market Research, CRM, Training, Process Consulting etc.idea7 Sewells has got very good response from Industry since its inception in April 2002 and is already working on assignments like conventional & e learning, IT based research services, process consulting market research etc. idea7 Sewells has proprietary packages on process reengineering & upgrades for auto companies. It also offers proprietary customer satisfaction indices & tailor made for Indian market conditions along with customized research solutions. idea7 Sewells boasts a team of talented young professionals with background in auto and related businesses and leverages on this functional background to offer cutting edge business solutions to auto industry in India. Disclaimer India CAR Study is based on the interviews conducted with 1641 car customers across the country. It uses standard techniques of statistics to determine the scores & is subject to all the limitations of statistics & field market research. Any rankings and scores should not assumed to be conclusive statement on the performance of any manufacturer their dealers or products. Detailed Brand Reports The Brand Reports for individual brands with the performance on various parameters vis a vis segment average, industry average & benchmark brand performance are available with idea7 Sewells. < Back

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