Research Methodolo gy Project

TATA NANO
Prashanna Jhawar 2009A19

Saurabh Singh Parihar 2009A20

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Table of Contents
Table of Contents....................................................................................................... 3 RESEARCH OBJECTIVES.............................................................................................. 4 EXPLORATORY RESEARCH.......................................................................................... 5 SECONDARY DATA...................................................................................................... 6 QUESTIONNAIRE DESIGN............................................................................................ 8 QUESTIONNAIRE.................................................................................................... 10 SAMPLING................................................................................................................. 13 METHOD OF ANALYSIS.............................................................................................. 14 ASSIGNING WEIGHTAGE TO EACH SRO.................................................................16 ................................................................................................................................. 17 FINAL CONCLUSION.................................................................................................. 18

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RESEARCH OBJECTIVES

PRO

To determine the feasibility of Tata Nano as a replacement of two wheelers being used by young male population (20-35 age group) in Pune.

SRO 1: SRO

To determine whether the people will prefer to drive a two wheeler or four wheeler in Pune considering the Infrastructure of Pune. To determine whether the difference in mileage of Tata Nano over 2-wheelers is affordable

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2: SRO 3: SRO 4: SRO 5:

to males in the age group of 20-35 in Pune. To determine whether there is a significant increase in safety provided by Tata Nano over two wheelers. To determine whether people, while purchasing a vehicle, are Willing to pay more for a car than a two wheeler. To determine the Social Factors associated with the purchase of Tata Nano.

EXPLORATORY RESEARCH
OBJECTIVE: To discover the general nature of the problem and the variables that relate to it on the basis of secondary data, convenience or judgement samples, small scale surveys or simple experiments, case analyses etc. Basically it is done to have more precise and accurate understanding of the secondary research objectives and also helps in identifying some important factors that have been missed while identifying secondary research objectives. In this case, exploratory research have been done by making a small questionnaire and then personally asking those questions to a sample of youngsters in Pune and getting the precise answers. From the exploratory research we got the following information from the respondents:-

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 The parameters looked out in respondents that influence the shift from a two wheeler to a Tata Nano are Mileage, Driving Expertise, Climatic Expertise, Annual Salary, Infrastructure in pune, Safety Standards and ease of usage. Most of the respondents (70 %) who are already 2-wheeler users welcomed the introduction of TATA Nano as peoples car. Students (age 19-25) studying in various colleges in Pune formed a large sample of our respondents coupled with young IT professionals. Students weighed a lot of importance to travelling places along with their group in a car which is not very costly and which satisfy their basic needs. The second set of People comprised of young recently married couples (age 25-35). Even for the newlywed couples (income range Rs.100000-300000 per year) who had a bike, it was more of a matter of self esteem to move around in Nano rather than a bike. Good Promised mileage and safety standards by the company are added incentives for influencing the shift of the People.

SECONDARY DATA
Pune is one of the most rapidly motorizing cities in the country. Over 1.5 million vehicles are currently registered with the Regional Transport Office (RTO) at Pune, with another 600 getting registered every day. Two-wheelers form the bulk of these there were over 1.1million two-wheelers in Pune in 2007.

Due to the appalling state of public transport in the city, 13, 12,213 Puneites prefer travelling on bikes, scooters
with the growth in the city's population, the number of two-wheelers in Pune is also increasing at an astounding rate. This is evident from the data available at the Regional Transport Office. According to RTO records, 97,542 new two-wheelers have been introduced on the roads of Pune. Lakshman Darade, deputy regional transport officer, said, "This year 1,23,943 vehicles have been introduced on city roads, thus taking the total number of motor vehicles plying on city roads to 17,62,730." While Prashant Inamdar, president of Pedestrians Association, said, "Out of 1,23,943 newly Page 6

added vehicles, 97,542 are two-wheelers." Jugal Rathi, president of PMP Pravasi Sangh, said, "It is not that people are going for two-wheelers by choice. Actually, they don't have any other option as the frequency of Pune Mahanagar Parivahan Mahamandal Ltd (PMPML) buses is low." He added that on some routes, commuters have to wait for as long as an hour to board a bus. " However, denying any lacunae in the services rendered by the public transport system, D A Pardeshi, PRO PMPL, said, "The increase in the number of two-wheelers is due to the attraction bikes hold for youngsters." (Source: http://www.mid-day.com/news/2009/jun/110609-Scooters-Bikes-Motor-CyclesPune-news-Bus-transport.htm)

Buyers excited
Meanwhile, Puneites can't wait for the car to go on sale. "I will surely go for the Nano because Pune's roads are becoming unsafe for two-wheelers day by day. Also, with Nano's price is a huge attraction," said Medha Kulkarni, who works with a nationalised bank. Added Sandip Warke, a pharmaceutical trader, "I am considering buying the Nano, as it's only a little more expensive than a bike and I will be able to travel with my family very safely." Apart from the dealers, Nano's booking forms, which cost approximately Rs 300, will be available at all State Bank of India branches, Croma and Westside stores. (Source: http://www.midday.com/news/2009/mar/230309-Tata-Nano-Pune-customers-Tata-Motors-Pratham-Automobiles-PanditAutomotive.htm)

Will Tata Nano revolutionise personal transport?

Nano is expected to change the automobile market in India, which should ideally mean new strategies for competitors. This car is actually a bridge between the automobile market and the two-wheeler market, says Ranjit Shastri, MD, Psi, a consulting firm. This new market that Nano will create will not eat into the market of other car segments, but will affect the two-wheeler market drastically. The family two-wheeler, which is in the range of 75-125cc, costs Rs 35,000-50,000. This segment accounts for 92% of the two-wheeler market in terms of sales. With the launch of Nano, the spill over will happen from this two-wheeler market to Nano. Two-wheeler manufacturers have realised it and Bajaj Auto and Hero Honda are making plans to enter into this new segment. Earlier, Maruti 800 has been the essential small car with a price tag of Rs 2 lakh and all aspiring car buyers have preferred it as their first car. Today, that may change to a certain extent. But this will in no way harm Maruti Suzuki or Hyundai Santro as owning a car is still aspirational and anyone who wanted to buy a car above the 3,400 mm series will continue to do so.

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Maruti 800 held a 30% market share in terms of sales in 2001 among all passenger cars. Today, it has fallen to a mere 5%. Maruti has laid stress on Alto while relegating 800 to the background, and it was a calculated move. Thus, they never wanted to be a part of the lower end segment of the car market. Same goes for Hyundai Santro. The launch of Nano creates a market for the small car which may allow competitors to enter this market with new models but should not harm their existing strategies. At most, Maruti may want to launch an exchange offer for 800 and give an attractive price for 800 buyers to migrate to Alto. They should then refurbish and put these used 800s in the market for Rs 70,000. This should act as a drag on some of the velocity that Nano is going to pick up, says Shastri. For other players, there are two strategies: First, get into this segment yourself. Second, cut down on operational expenses and make existing products available at a cheaper price. However, sudden price cuts will not be viable as a strategy. The competition will have to wait and watch how Nano is received, what all has gone into it to make it so affordable and then try and work a strategy around it. Even if Nano manages to convert 10% of existing the two-wheeler marketwhich is close to 900 millionNano will have almost 50% market share of the car market. But that is provided that Nano remains the only car in that segment. Chances are this will become the hotbed for competition.(source: http://economictimes.indiatimes.com/articleshow/2691432.cms)

QUESTIONNAIRE DESIGN
SRO - 1: To determine whether the people will prefer to drive a two wheeler or four wheeler in Pune considering the Infrastructure of Pune.

Information Needed: Width of Roads Parking Space Available S.No 1. 2. Information Needed Width Of Roads Parking Space Available Respondents Users Users Method Structured / Indirect / Personal Structured / Indirect / Personal

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SRO - 2:

To determine whether the difference in mileage of Tata Nano over 2-wheelers is affordable to males in the age group of 20-35 in Pune .

Information Needed: Mileage of car Mileage of two wheeler S.No Information Needed 1. Mileage of car 2. Mileage of two wheeler Respondents Dealers Users Users Method Structured / Direct/ Mail Structured / Indirect/ Personal Structured / Direct/ Personal

SRO - 3:

To determine whether there is a significant increase in safety provided by Tata Nano over two wheelers.

Information Needed: Safety by two wheeler Safety by Tata Nano S.No Information Needed 1. Safety by two wheeler 2. Safety by four wheeler Respondents Users Users Method Structured / Direct / Personal Structured / Direct / Personal

SRO - 4:

To determine whether people, while purchasing a vehicle, are willing to pay more for a car than a two wheeler.

Information Needed: Price of two wheeler Budget for a two wheeler Page 9

 Budget for a car. S.No 1. 2. 3. Information Needed Price of a two wheeler Budget for a two wheeler Budget for a car. Respondents Users Users Users Method Structured / Direct / Personal Structured / Direct / Personal Structured / Direct / Personal

SRO - 5:

To determine the Social Factors associated with the purchase of Tata Nano.

Information Needed: Status Symbol Usage of Tata Nano as a Taxi S.No Information Needed 1. Status Symbol 2. Usage of Tata Nano as a Taxi Respondents Users Users Method Structured / Indirect / Personal Structured / Direct / Personal

QUESTIONNAIRE
1) Please mention your sex? a) Male b) Female 2) What is your age? a) Less than 20 years c) More than 35 years

b) between 20-35 years

-------------------------------------------------------------------------------------------------------------------------------------------3) Which of the following vehicles do you have? a) Two Wheeler b) Car c) Both d) None What is the mileage you expect from a two wheeler? a) 15-30 km/l b) 30-40 km/l c) 40-50 km/l d) more than 50 km/l e) Not Applicable What is the mileage you expect from a Car? a) less than 15 km/l b) 15-20 km/l

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c) 20-25 km/l e) Not Applicable

d) more than 25 km/l

4. Approximately, how much distance do you travel daily, where you may need a vehicle? a) 0-5 km b) 5-10 km c) 10-20 km d) more than 20 km

5. Approximately, how much do you spend monthly (in Rs.)? a) Less than 5000 b) between 5000-10000 c) Between 10000-20000 d) more than 20000

6. What is the amount of money that you would like to spend on a purchase of a car? a) Less than 60000 b) between 60000 100000 c) Between 100000 150000 d) more than 150000

7. What is the amount of money that you would like to spend on a purchase of a two wheeler? a) Less than 35000 b) between 35000 60000 c) Between 60000 1 Lakhs d) more than 1 Lakhs

8. Do you enjoy driving a car in Pune? (Considering the traffic and parking problems here). Please tick one. a) Very Easy [ ] b) Easy [ ] c) Average [ ] d) Difficult [ ] e) Very Difficult [ ] f) Never driven a car in Pune [ ]

9. Do you enjoy driving a two wheeler in Pune? (Considering the traffic and parking problems here). Please tick one. a) Very Easy [ ] b) Easy [ ] c) Average [ ] d) Difficult [ ] e) Very Difficult [ ] f) Never driven a car in Pune [ ]

10. Is driving a car safe in Pune, from accidents point of view? Please tick one. a) Very Safe [ ] b) Safe [ ] c) Average [ ]

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d) Dangerous e) Very Dangerous f) Never driven a car in Pune

[ ] [ ] [ ]

11. Is driving a two-wheeler safe in Pune, from accidents point of view? Please tick one. a) Very Safe [ ] b) Safe [ ] c) Average [ ] d) Dangerous [ ] e) Very Dangerous [ ] f) Never driven a car in Pune [ ]

12. Rate the following in order of importance from 1 to 7 with 1 being most preferred and least preferred, while purchasing a vehicle ? a) Price of car [ ] b) Safety provided by car [ ] c) Power of car [ ] d) Traffic in the city [ ] e) Style of the car [ ] f) Mileage by the car [ ] g) Service Costs associated with [ ]

13. Please rate the following style attributes in a Car in order of your preference? a) Colour 1 __ 2 __ 3 __ 4 __ b) Outward Appearance 1 __ 2 __ 3 __ 4 __ c) Size 1 __ 2 __ 3 __ 4 __ d) Interiors 1 __ 2 __ 3 __ 4 __

14. Please rate the following items, in order of your preference, considering the social status they carry? a) Plasma TV 1 __ 2 __ 3 __ 4 __ 5 __ 6__ b) Laptop 1 __ 2 __ 3 __ 4 __ 5 __ 6__ c) Mobile phone 1 __ 2 __ 3 __ 4 __ 5 __ 6__ d) Tata Nano 1 __ 2 __ 3 __ 4 __ 5 __ 6__ e) Area of residence 1 __ 2 __ 3 __ 4 __ 5 __ 6__ f) Two-Wheeler 1 __ 2 __ 3 __ 4 __ 5 __ 6__

15. Will there be traffic problem with the introduction of Nano in Pune? a) Yes b) No c) Cant say

16. Do you think TATA Nano as a peoples car? a) Yes b) No

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c) Cant say

17. How will the owner of TATA Nano feel, if Nano is used as a taxi? a) Embarrassed b) Dont care c) Cant say

SAMPLING
The steps involved in sampling are Population: The population for this research is the population of males in Pune in the age group of 20-35. Name list of all males in the age group of 20-35 and living in Pune. The population of Pune mainly includes students and software professionals and small businessman. Probability sampling, members will be selected by chance. Sample Size that we have taken for our research is 100.

Sample frame: Sample unit:

Sampling Method: Sample size:

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METHOD OF ANALYSIS
Our data analysis involved converting a series of recorded observations across all SROs and inferences were drawn about the preference of people for purchase of a Tata Nano over a two wheeler. We have used SPSS statistical software and the CHI Square cross tabulation tool to analyse the data. Below is the analysis of each SRO using the software tool. The analysis includes the NULL and ALTERNATE hypothesis.

SRO 1: Null Hypothesis (H0): Alternate Hypothesis (H1): Result: Conclusion:

To determine whether the people will prefer to drive a two wheeler or four wheeler in Pune considering the Infrastructure of Pune. People will prefer two wheeler over four wheeler to drive at 75% confidence interval. People will not prefer two wheeler over four wheeler to drive at 75% confidence interval. H0 not rejected. P-Value = 0.391

We can consider that only 39.1% people will prefer to drive a four wheeler over two wheeler, considering the parking issues and width of roads. Introduction of Tata Nano in Pune will not cause a significant increase in traffic, at 75% Confidence level. Introduction of Tata Nano in Pune will cause a significant increase in traffic, at 75% Confidence level. H0 rejected. P-Value = 0.072

Null hypothesis (H0): Alternate Hypothesis (H1): Result:

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Conclusion:

We can consider that only 7.2% of people will prefer to drive a four wheeler over a four wheeler, considering the traffic in mind. Only 7.2% will prefer Tata Nano

SRO 2: Null Hypothesis (H0): Alternate Hypothesis (H1): Result: Conclusion: SRO 3: Null Hypothesis (H0): Alternate Hypothesis (H1): Result: Conclusion:

To determine whether the difference in mileage of Tata Nano over 2-wheelers is affordable to males in the age group of 20-35 in Pune. Mileage has no significant impact on the purchase decision of a person, when he has to decide between a car and a two wheeler, at 75% Confidence level. Mileage has significant impact on the purchase decision of a person, when he has to decide between a car and a two wheeler, at 75% Confidence level. H0 rejected. P-Value = 0.219

We can say with only 21.9% confidence level that people will not consider mileage while buying a vehicle. Only 21.9% will prefer Tata Nano. To determine whether there is a significant increase in safety provided by Tata Nano over two wheelers. There is no significant increase in safety provided by a car over a two wheeler, at 75% Confidence level. There is a significant increase in safety provided by a car over a two wheeler, at 75% Confidence level. H0 rejected. P-Value = 0.13

We can consider that 87% of people will consider car as a safer option over two wheeler. 87% will prefer Tata Nano.

SRO 4: Null Hypothesis (H0): Alternate Hypothesis (H1): Result: Conclusion:

To determine whether people, while purchasing a vehicle, are willing to pay more for a car than a two wheeler. Price does not have a significant impact on the purchase decision of a person, when he has to decide between a car and a two wheeler, at 75% Confidence level. Price has a impact on the purchase decision of a person, when he has to decide between a car and a two wheeler, at 75% Confidence level. H0 not rejected. P-Value = 0.822

We can consider that 82.2% people will be willing to pay more for a car over a two wheeler. 82.2% will prefer Tata Nano.

SRO 5:

To determine the Social Factors associated with the purchase of Tata Nano.

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Null Hypothesis (H0): Alternate Hypothesis (H1): Result: Conclusion:

Status symbol associated with Tata Nano will not cause a significant impact on its purchase, at 75% Confidence level. Status symbol associated with Tata Nano will cause a significant impact on its purchase, at 75% Confidence level. H0 rejected. P-Value = 0.11

We can consider that only 11% of people feel that social status does not have an impact on the purchase of a vehicle. Only 11% will prefer Tata Nano Tata Nano, if used as a taxi will not have any effect on the owner of Nano, at 75% Confidence level. Tata Nano, if used as a taxi will have any effect on the owner of Nano, at 75% Confidence level. H0 rejected. P-value = 0.23 We can consider that 23% of people will prefer Tata Nano irrespective of it being used as a Taxi. Only 23% will prefer Tata Nano.

Null Hypothesis (H0): Alternate Hypothesis (H1): Result: Conclusion:

ASSIGNING WEIGHTAGE TO EACH SRO

Through our survey we asked our respondents to rate the importance of the following characteristics, when they decide to buy a car. Price Safety Mileage Infrastructure and Traffic issues Social Factor associated with a Tata Nano We have used the response to assign weight age to the factors mentioned above, the method we used to analyse the data is specified below. Factor V. Importan t (5 points) 13 Safety 10 Mileage 2 3 8 9 10 69 2 6 8 6 98 Importan t (4 points) Average (3points) Not Important (2 points) Least Important (1 point) Sum product Final Weight age 0.26806 5 0.22843 8 0.16083 9

Price 4 7 5 3 115

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Infrastructur e and Traffic issues Social Factor associated with a Tata Nano

1 3 10 7 12 74

0.17249 4

13 Total

73 429

0.17016 3

Now we will multiply the P-Values obtained from the CHI Square analysis with the calculated weightages as shown in the above table. Weight ages SRO 1: Infrastructure Traffic SRO 2: Mileage 0.085082 0.085082 0.172494 P-Values 0.391 0.072 0.219 Sum-Product 0.0332669 0.006125874 0.037776224

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SRO 3: SRO 4: SRO 5:

Safety Price

0.228438 0.268065 0.08042 0.08042

0.870 0.822 0.110 0.230

0.198741259 0.22034965 0.008846154 0.01983683

Social Factor Taxi

Total

1.00

0.52494289

FINAL CONCLUSION
Considering all the factors we have analysed in our research. We have arrived at a conclusion that 52.5% of the males in the age group of 20-35 and living in Pune will prefer to buy a Tata Nano over a two wheeler.

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