INSTITUTE OF MANAGEMENT STUDIES GHAZIABAD

A PROJECT REPORT ON PERCEPTION OF RURAL PEOPLE TOWARDS, SUV CARS

Submitted to:

Submitted by:
Seema mahato (BM-011191) Shikha choudhary(BM-011200) Shriraj (BM-011209)

Dr. Urvashi Makkar Dean academics Faculty, IMS Ghaziabad

Vibhor Garg Sunil Kumar Syed Khurram

(BM-011239) (BM011224) (BM011231)

Vishal jaiswal (BM011249)

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TABLE OF CONTENT
INTRODUCTION

SL NO. PARTICULARS 1. Introduction

PAGE NO. 3

2.

Objective

3. 4.

Research Methodology Finding Analysis

7 11

5.

Conclusion

23

6. 7. 8.

Bibliography Case study Annexure

24 25 27

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INTRODUCTION
Historically the Sport Utility Vehicle has been considered a mid-sized passenger vehicle. It was designed to have the carrying capacity of a pick-up truck, but differ in size and performance. Sport utility vehicles are descendents of the other sport vehicles such as commercial vehicles and military vehicles including Jeep and the Land Rover. These vehicles were followed by other sport utility vehicles. Throughout history the design of the SUV has been changed. There are several models of the SUV that are considered compact sport utility vehicles. This simply means that they are smaller in size in some way. It could be that seats have been removed or the carrying capacity or cargo space could be slightly smaller than the standard vehicle. Indian car industry is crowded with a number of SUVs, the demand of which is gradually increasing among car consumers. SUVs have come a long way from the traditional Jeep to the stylish and high-tech Honda CR-V, Tata safari, Mahindra Scorpio and ford endeavor. Sports Utility vehicles are rapidly capturing the market due to its multifarious use. Utility vehicles are found in two kinds: - SUV or Sports Utility Vehicles and MUV or Multi Utility Vehicles. Its spacious interior and sturdy exterior have made this vehicle one of the fastest selling vehicles of India. This is multi use vehicle to accommodate many passengers in one vehicle, especially while going for a long trip with a big family or with a folk of friends. Sporty attributes of this vehicle is not negligible when mentioning about its use. To name few SUV manufacturers of India- Fiat India, Ford Motors, Force Motors, General Motors, Hyundai Motors, Hindustan Motors, Mahindra & Mahindra, Nissan, Porsche, Tata Motors, Toyota motors etc. In the north, sales of high-end cars are picking up in places such as Karnal, Hoshiarpur, Bhatinda and Patiala, and in the south, the backwaters of Kerala and rural areas of Karnataka is turning out to be an attractive destination for manufacturers.

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Companies such as Honda, Hindustan Motors, GM and Ford are a bullish about these rural hotspots and are expanding their presence in these areas by increasing the number of dealerships and marketing activities. This apart, the trend also reveals that among the number of vehicles sold, SUVs garner a considerable chunk of the market. According to Taipan Traders, authorised dealer of Mercedes Benz from Karnal up to northern territory, MD Manjit Singh Bala, there has been a jump of 35 to 50% in sales of high-end cars and SUVs in the last two years. "While driving on our type of roads, the brand name and safety put the Merc above the rest. We are getting around 60 queries daily. Even the Honda CR-V is basking in all the rural attention it is getting. "Apart from our main markets in metros, we believe that there is strong growth potential in the tier II cities and towns. We are increasingly focusing on these cities and setting up new dealerships there," a Honda Siel spokesperson told Sunday ET. The demand for vehicles like Scorpio rising at a faster pace in (areas such as) Lakhimpur Kheri (Uttar Pradesh) and Muzaffarpur (Bihar), said Arun Malhotra, senior vice-president, sales and customer care. Mahindra sells at least 150 Scorpios every month in Bihar, he said. The enquiries for the XUV 500, its new sports utility vehicle, are just not stopping. This is despite us telling the buyers that Bihar would only get deliveries of this vehicle once Mahindra reopens bookings, he said. The officials of the company said that they did not anticipate this kind of demand for XUV from states like Bihar and Jharkhand. We are not happy with this fact. We are trying to meet demand by increasing capacity at our plant. They said. Aspirations are rising in the villages and smaller towns, said Pradeep Lokhande of Rural Relations, a consumer rural relations organization. After a colour television, a vehicle is the next big-ticket item on their shopping list, he said. This has been further helped by the easy availability of finance. According to Taipan Traders, authorised dealer of Mercedes Benz from Karnal up to northern territory, MD Manjit Singh Bala, there has been a jump of 35 to 50% in sales of high-end cars and SUVs in the last two years. "While driving on our type of roads, the brand name and safety put the Merc above the rest. We are getting around 60 queries daily. Suv report. Page 4

Reasons for the rising demand of SUVs cars in rural India:-

First, disposable incomes in rural areas are rising, backed by a better-than-expected monsoon and a healthy harvest. Moreover, Pals points to massive irrigation projects that have resulted in rural areas being much less dependent on the monsoon than in the past. Meanwhile, schemes such as the National Rural Employment Guarantee Act (NREGA) and increased minimum support price (MSPs) have also boosted rural incomes. All this is feeding through into increased demand for consumer durables. Another reason for this is that with the real estate boom in the country which is fetching handsome prices for land, farmers in many areas have shown interest in buying big cars or SUVs," adds Mr Bala.

Government rural infrastructure programmes such as the Pradhan Mantri Gram Sadak Yojana have spawned several small contractors who are among the major buyers of utility vehicles, Lokhande said.

The real growth is happening (in utility vehicles) because of the governments road development programmes. Such programmes have a huge multiplier effect, said Mahantesh Sabarad, senior vice-president (equity) at Fortune Equity Brokers (India) Ltd.

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OBJECTIVES OF THE STUDY

The research objectives for the report undertaken can be defined as follows:

To find various factors which determine the consumer perception toward SUV cars. To study perception of consumers towards the SUV cars. To judge the satisfaction level of suv car owners. Finally recommend how we can improve the perception of people towards suv cars.

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CHAPTER 2 : RESEARCH METHODOLOGY

Research methodology is a systematic way, which consists of series of action steps, necessary to effectively carry out research and the desired sequencing to these steps. The marketing research is a process of involvesa no. of interrelated activities, which overlap and do rigidly follow a particular sequence. It consists of the following steps:-

RESEARCH DESIGN:Research design specifies the methods and procedures for conducting

a particular study. A research design is the arrangement of conditions for collection andanalys is of the data in a manner that aims to combine relevance to their search purpose with economy in procedure. Research design is broadly classified into three types as:

Exploratory Research Design

Descriptive Research Design

Causal Research Design

We have chosen the descriptive research design.

DESCRIPTIVE RESEARCH DESIGN:Descriptive research studies are those studies which are concerned with described the characteristics of particular individual. In descriptive as well as in diagnostic studies, the researcher must be for population in the said

ableto define clearly, what he wants to measure and must find adequatemethods measuring it along with a clear cut definition of

hewant to study. Since the aim is to obtain complete and accurateinformation Suv report.

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studies, the procedure to be used must be carefully planned. The research design must make enough provision

for protectionagainst bias and must maximize reliability, with due concern for theeconomical completion of the research study.

SAMPLE DESIGN
A Sample Design is a definite plan for obtaining a sample from a given population. It refers to the technique to the procedure adopted in selecting items for the sampling designs are as below:

(a) Sample Size-: 50 customers

SAMPLING TECHNIQUE
RANDOM SAMPLING:

random

sample

gives

every unit

of

the

population

a known

and

non-

zero probability of being selected. Since random sampling implies equal probability to every unit in the population, it is necessary that theselection of the sample must be free from human judgment. There is some confusion between the two terms random sampling andunrestricted random sampling. In the latter case, each unit in the population has an equal chance of being selected in the sample. Such as ample is drawn with replacement, which means that the unit selected at each draw is replaced into the population before another draw is made from it, As such, a unit can be included more than once in the sample Most statically theory relates to unrestricted random sampling. In order to distinguish between these two samples. I.e. sample, without replacement and sample with replacement, the terms sample random sample and unrestricted random sample are used. If the latter is devised in such a manner that no unit can be included more than once, it will then be known as the simple random sampling. It may be noted that while both sample random sampling and unrestricted random sampling give an equal probability to each unit of the population for being included in the sample, there are other sample design too which provide equal probability to the units. The process of randomness is the very core of simple and unrestricted Suv report. Page 8

random sampling. The selection of a sample must be free from bias, which can be ensured only when the process of selection is free from the human judgment.

DATA COLLECTION

(a) SOURCES

The study was conducted by the means of personal interview with respondents and the information given by they were directly recorded on questionnaire. For the purpose of analyzing the data it is necessary to collect the vital information. There are two types of data, this arePrimary Data Secondary data

PRIMARY DATA:-

Primary data can be collected through questionnaire. The questionnaire can be classified into four main types. Structured non disguised questionnaire Structured disguised questionnaire. Non structured non disguised questionnaire Non structured disguised questionnaire.

For my market study, I have sleeted structured no disguised questionnaire Because My questionnaire is well structured, listing of questions are in a prearranged order and where the object of enquiry is revealed to the respondents. To making a well-structured questionnaire, we have adopted three type of questionsOpen ended question Suv report. Page 9

Dichotomous questions Multiple choice questions

These types of questions are easy to understand and easy to give required answers.

SECONDARY DATA

Secondary data means data that are already available i.e. they refer the data which have already been collected and analyzed by someone else. When the researcher utilizes secondary data, than he has to look into various sources from where h e can obtain them, in this case he is certainly not confronted with the problems that are usually associated with the Collection of original data. Secondary data may either be published data or unpublished data. Usually published data are available in: Various publications of the central, state and local government; Various publications of foreign government or of international bodies and their subsidiary organizational; Technical and trade journals; Books, magazines and newspapers; Reports and publications of various associationsconnected withbusiness san industry, stock exchanges etc.; Reports prepared by research scholars, universities, economists etc.; Public records and statistics, historical document and other source of published information The source of unpublished data are many; they may be found in diaries, letters, Unpublished Biographies and autobiographies and also may Beavailable with scholars and research worke rs, trade associations, labor because and other public private individuals and organization. Suv report. Page 10

CHAPTER-3 : FINDINGS AND ANALYSIS

= No Correlation Exist between Income and SUV = Correlation Exists between Income and SUV

Correlations
Descriptive Statistics Mean Income SUV 2.64 2.30 Std. Deviation .964 1.182 N 50 50

Correlations Income Income Pearson Correlation Sig. (2-tailed) Sum of Squares and Cross-products Covariance N SUV Pearson Correlation Sig. (2-tailed) Sum of Squares and Cross-products Covariance N *. Correlation is significant at the 0.05 level (2-tailed). 45.520 .929 50 -.279* .049 -15.600 -.318 50 68.500 1.398 50 1 SUV -.279* .049 -15.600 -.318 50 1

Value of at 5% significance level is .049.I.e less then.05 so we reject the so, there is Correlation Exist between Income and SUV.

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Correlations
= No Correlation Exist between Income and Brand. = Correlation Exists between Income and Brand.

Descriptive Statistics Mean Income BRAND 2.64 3.00 Std. Deviation .964 1.069 N 50 50

Correlations Income Income Pearson Correlation Sig. (2-tailed) Sum of Squares and Cross-products Covariance N BRAND Pearson Correlation Sig. (2-tailed) Sum of Squares and Cross-products Covariance N 45.520 .929 50 .059 .682 3.000 .061 50 56.000 1.143 50 1 BRAND .059 .682 3.000 .061 50 1

Value of at 5% significance level is .682.I.e more then.05 so we Accept the so, there is no Correlation Exist between Income and Brand.

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Correlations
= No Correlation Exist between Brand and Age. = Correlation Exists between Brand and age.

Descriptive Statistics Mean BRAND Age 3.00 2.56 Std. Deviation 1.069 .907 N 50 50

Correlations BRAND BRAND Pearson Correlation Sig. (2-tailed) Sum of Squares and Cross-products Covariance N Age Pearson Correlation Sig. (2-tailed) Sum of Squares and Cross-products Covariance N 56.000 1.143 50 .189 .188 9.000 .184 50 40.320 .823 50 1 Age .189 .188 9.000 .184 50 1

Value of at 5% significance level is .189.I.e more then.05 so we Accept the so, there is no Correlation Exist between Brand and Age.

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Correlations
= No Correlation Exist between Brand and SUV. = Correlation Exists between Brand and SUV.

Descriptive Statistics Mean BRAND SUV 3.00 2.30 Std. Deviation 1.069 1.182 N 50 50

Correlations BRAND BRAND Pearson Correlation Sig. (2-tailed) Sum of Squares and Cross-products Covariance N SUV Pearson Correlation Sig. (2-tailed) Sum of Squares and Cross-products Covariance N 56.000 1.143 50 .145 .314 9.000 .184 50 68.500 1.398 50 1 SUV .145 .314 9.000 .184 50 1

Value of at 5% significance level is ..314 i.e more then.05 so we Accept the so, there is no Correlation Exist between Brand and SUV.

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Correlations
= No Correlation Exist between Income and Fuel. = Correlation Exists between Income and Fuel.

Descriptive Statistics Mean Income FUEL 2.64 3.90 Std. Deviation .964 .647 N 50 50

Correlations Income Income Pearson Correlation Sig. (2-tailed) Sum of Squares and Cross-products Covariance N FUEL Pearson Correlation Sig. (2-tailed) Sum of Squares and Cross-products Covariance N 45.520 .929 50 -.092 .527 -2.800 -.057 50 20.500 .418 50 1 FUEL -.092 .527 -2.800 -.057 50 1

Value of at 5% significance level is .527 I.e more then.05 so we Accept the so, there is no Correlation Exist between Income and Fuel.

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Nonparametric Correlations
Correlations Income Spearman's rho Income Correlation Coefficient Sig. (2-tailed) N FUEL Correlation Coefficient Sig. (2-tailed) N 1.000 . 50 -.095 .512 50 FUEL -.095 .512 50 1.000 . 50

Factor Analysis
KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy. Bartlett's Test of Sphericity Approx. Chi-Square df Sig. .447 24.925 21 .250

Communalities Initial Age Income Occupation Gender SUV BRAND FUEL 1.000 1.000 1.000 1.000 1.000 1.000 1.000 Extraction .591 .618 .401 .757 .477 .865 .337

Extraction Method: Principal Component Analysis.

Total Variance Explained Initial Eigenvalues Component Total % of Variance Cumulative % Total Extraction Sums of Squared Loadings % of Variance Cumulative % Total

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1 2 3 4 5 6 7

1.684 1.248 1.113 .974 .914 .610 .457

24.052 17.834 15.903 13.908 13.062 8.712 6.529

24.052 41.885 57.789 71.697 84.759 93.471 100.000

1.684 1.248 1.113

24.052 17.834 15.903

24.052 41.885 57.789

1.6

1.2

1.1

Extraction Method: Principal Component Analysis.

Component Matrixa Component 1 Age Income Occupation Gender SUV BRAND FUEL .679 .672 .545 -.183 -.638 .054 -.177 2 .240 -.324 .102 -.724 .098 .492 .548 3 .269 .249 -.305 .447 .247 .787 -.075

Extraction Method: Principal Component Analysis. a. 3 components extracted.

Rotated Component Matrixa Component 1 Age Income Occupation Gender SUV BRAND FUEL .588 .572 .609 -.314 -.678 -.145 -.137 2 -.004 .490 -.144 .811 -.073 -.098 -.547 3 .495 .223 -.094 .022 .112 .913 .140

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Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization. a. Rotation converged in 6 iterations.

Component Transformation Matrix Component 1 2 3 1 .963 .026 -.267 2 .142 -.894 .424 3 .228 .446 .865

Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization.

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BAR CHARTS

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CHAPTER-4: CONCLUSION
To conclude, the results show that the companies are playing on the peripheral cues to maintain their Total Relationship Management and connect to the customers both present and potential. The companies are operating in a highly aggressive and competitive global market place and this climate has led to the emphasis on quality in all aspects. TQM focuses on integration and coordination as well as the continuous improvement of all activities and processes. Total Relationship Management (TRM) is a very recent marketing strategy and philosophy. It focuses on and is concerned with all integrated internal and external activities within and between the organizations. These two terms are integrated by the manufacturers by building good quality products and building good relationship with dealers and enhancing service levels. However, when studied from the point of view of a customer there seems to be no major difference among the car brands in a segment as far as performance is concerned. The brand perception is dependant mostly on the peripheral cues depending upon the nature and quality of the service provided along with the pricing, maintenance, availability of spare parts and related issues. So, a question arises here that is this the end of road for the branding of cars? Has the commoditization of cars has started and its time that manufacturers must read the writing on the wall? It seems so! It seems as an undercurrent sentiment is flowing and the perception of the customers is changing according to it. So this might be the reason that despite Verna faring so high on the performance parameters still lags on the account of converted sales. The study shows that brand perception is something which starts building up before a car is purchased and goes on with its use and is reflected in the recommendations the customer Suv report. Page 22

makes to his acquaintances for the same car. Also, its seen that the customer might not be using the car still he holds the perceptions about it. Brand personality of a car is enforced by the sellers in the mindsets of the customers and the customers react to it by forming their perceptions about the car and this reflects in the overall brand image of the car. So brand image and brand personality complement each other and the brand perception aids the building of brand image. Dealers, as per the study findings, play a very important role in building up the brand perception of the cars. Since dealers are the connecting link between the customers and the manufacturers thus becoming the most important link in joining the company to its customers as he is the person who will sell the product, will deliver it and will keep on providing the after sales services to the customers as and when required. So, it becomes necessary automatically to study dealer as a part of customers satisfaction journey with the product called car! Their proximity to the customers, the service provided by them and the relationship maintained by them with the customers helps the car companies to establish and reinstate the brand personality communicated by them to the customers. Finally the major point that emerges out of this detailed study is a caution for the car companies ,what are the dos and what are the donts ?ultimately, how to increase passenger car sales?, the answer lies within this result of this research.

It says that there is no doubt that Indian car market may be growing with a double digit figure still the car companies have a long way to travel to convince their customers about the brand personality of their cars and how it suits the prospective buyers. Simply because it simply is not a guarantee that how so ever good the customer might be holding the brand perception and how so ever good the brand image may be it is not a guarantee that it will convert into sale. Cars just like clothes and accessories suit the style and persona of a person and since all cars will become commodity someday the key to sell and excel in the market will lie with a person who knows how to use the perceptions of the customers to its use and sell the cars coz ultimately only that car survives which sell.

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Case study

Scorpio the Making of India's First Indigenous Sports Utility Vehicle

M&M was set up in 1945 to manufacture general-purpose utility vehicles for the Indian market. The company soon diversified into the manufacture of tractors for agriculture and light commercial vehicles (LCVs). Over the decades, M&M diversified into other businesses through alliances and joint ventures with Indian as well as foreign companies, and secured a significant presence in many major business sectors in India and abroad. By the early 1990s, M&M was a global conglomerate with a presence in many sectors including automobiles, farm equipment, trade and finance related services, information technology, and infrastructure development. In 1994, the M&M Group embarked on an organizational restructuring exercise arising from a Business Process Reengineering program. The result of this was that all the divisions of the Group were spun off as separate entities, with the exception of the Farm Equipment and Automotive Divisions, which remained with M&M. M&M's Farm Equipment Division made tractors and other farm implements. The Division also diversified into manufacturing industrial engines in 2003. In the same year, it became the first tractor company in the world to receive the prestigious Deming Application Prize. (Awarded by the Union of Japanese Scientists and Engineers (JUSE), this prize was considered the equivalent of the Nobel Prize in the area of Quality Management). The Automobile Division traced its roots back to the 1950s, when the company began offering a multi utility vehicle (MUV) under the 'Jeep' brand in India, in collaboration with Willys Overland Corporation, American Motors Corporation, and Kaiser Jeep Corporation, all based in the US. In 1965, the company began manufacturing LCVs in collaboration with Rubery Owen, UK. Although M&M received an initial impetus from its foreign collaborations, it was strongly focused on developing its own manufacturing facilities and capabilities and it began Suv report. Page 24

manufacturing vehicles indigenously by the end of the 1960s. (By the late 1990s, M&M had ISO-9002 certified manufacturing plants at Mumbai, Nashik and Igatpuri (all in Maharashtra) and Zaheerabad (in Andhra Pradesh).) M&M's Jeeps were immensely successful and the company's vehicles came to be identified with high quality, reliability, durability, ruggedness, easy maintenance, and operational economy in the Utility Vehicle (UV) market... In November 2003, Mahindra and Mahindra (M&M), a major automobile and farm equipment manufacturer, became the second auto company in India to receive the prestigious National Award for Research and Development. The award was given in recognition of its achievement in manufacturing India's first indigenously developed Sports Utility Vehicle (SUV), 'Scorpio'. The award was presented by the Department of Scientific and Industrial Research, under the Government of India's Ministry of Science and Technology. Several parameters, like financial inputs, scientific and technological advancement of the project, status of in-house Research & Development, environmental consciousness, and use of imported technology, were applied in judging the winner. The National Award was just one of the major awards that came Scorpio's way since it was launched in mid-2002. Within a year of its launch, the vehicle also won the 'Car of the Year' award from Business Standard Motoring, the 'Best SUV of the Year' by BBC Wheels and the 'Best Car of the Year', also from BBC Wheels. In addition, it was also the winner of CNBC and Auto Car's 'Car of the Year 2003' award (generally considered to be the Oscars of the Indian automobile industry), and the 'Product Launch of the Year' award given by the Business Standard Brand Derby. "Scorpio is the result of extensive R&D, right from concept to commercial production," said Anand Mahindra (Mahindra), vice chairman and MD of M&M. Analysts said the main reason for Scorpio's remarkable success in the Indian automobile market was that it catered to a previously neglected niche. Scorpio fell between a passenger car and an SUV. While it was designed as and looked like an SUV (with its sporty looks and sturdy design), it also offered all the comfort and elegance of a passenger car. Therefore, Scorpio's target market straddled both passenger car buyers as well as SUV fans.

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CHAPTER-5 BIBLIOGRAPHY

Sites Visited www.siamindia.com www.autocarindia.com www.overdrive.com www.mahindraandmahindra.com www.ibef.org a. Book referred to Philip & Kotler: Marketing management b. Journals HBS (Harvard business review) c. Magazines Companies research paper Business Today d. Internet i. Sites (1) www.marketingtimes.com (2) www.maruti.com (3) www. Hyundai.com ii. Search Engines www.google.co.in

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CHAPTER-6

ANNEXURE

QUESTIONNAIRE ON CONSUMER PERCEPTION FOR SUV SEGMENT (Scaled Questionnaire)

1. Name:-

2. Age: - 18-25

25-40

40-55

55 above

3. Gender: -

Male

Female

4. Occupation:Business Others Professional Employee Student

5. Annual Income: Less than 3 lakh 10 lakh &above 3-5 lakhs 5-7 lakh 7-10 lakhs

7. In sports utility vehicles which brand do you prefer ? Mahindra Force 8. Why you bought suv cars?. Increase in disposable income Comfort personality Better safety at rough roads Suits your lifestyle and Ford Honda TaTa

Increase in family size

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9. Please rate your existing car in terms of understated Interior Design features on a scale of 1 to 5(Where 1 = Highly Dissatisfied, Neutral, 4 = Satisfied, 5 = Highly Satisfied 1 2 3 4 5 2 = Dissatisfied, 3 =

10. Please rate your existing car in terms of understated Safety features on a scale of 1 to 5

Safety Parameters Crossbar under Dashboard Air Bags Anti-Lock Breaking System Aerodynamic Shape Intensity of front lights

11 .Please rate your existing car in terms of following parameters Parameter Fuel Consumption Pick Up Stability at higher speed Top speed Mileage ( Km/ltr) 1 2 3 4 5

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12. What is your opinion on the performance Of SUV Cars?

Excellent

Good

Satisfactory

Poor

13. do you think Suv cars are perfect for the rural area ? YES NO

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