Factors Influencing the Purchasing Decisions of Motor Bike Consumers: A Comparative Study of Popular Brands

B S V Ramarao* In the present marketing scenario, competition plays a vital role. There is a need for improvements of new products to face various challenges in the world market. Because of this, companies are working on innovative ideas to bring improvements in their product design, efficiency, look and better workability and so on. Now-a-days, motor vehicles have become the middle class peoples comfortable mode of transport. Out of all the available brands/companies, a few like Hero Honda, Yamaha, Bajaj, TVS are highly popular. Of these, Hero Honda is well-established in the market. Many surveys have shown considerable difference between Hero Honda and the others. Observation of consumer behavior is very important for any kind of manufacturer for making further improvements in their products. In this study, consumer behavior is observed in two time frames, i.e., 2004 and 2008, and then comparison is made to highlight and discuss the changes.

Introduction
Concept of Buying Behavior and Brand Loyalty
Economic and market analyses attempt to identify and describe the factors which influence market activities so that more useful predictions can be made about future trends. Since firms prosper by serving their customers needs while earning profits for themselves, some understanding of the behavior of customers during various stages of buying appears to be a prerequisite for successful trading operations. In supplying goods and services to their customers, companies and other organizations seek to satisfy, not only economic needs, but also those arising from social and other motivations. To achieve this task satisfactorily, a deeper knowledge and appreciation of customer behavior is needed. Firm should, therefore, construct profiles of their customers, which include a comprehensive analysis of the buying situation. This systematic approach should be based on the data from marketing research, together with first-hand knowledge of customer behavior gained over several years. Once brand loyalty has been achieved, consumers tend to pass almost automatically through the early stages of the decision process without making conscious evaluation every time they wish to buy these types of products.
* Associate Professor, Auroras Technological and Research Institute, Hyderabad, India. E-mail: ramarao_bsv@yahoo.co.in

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Decision rules, explicit or implicit, tend to be ready-made guides to buying behavior and act as convenient ways of simplifying the routine buying brand of items, such as toilet soap, or Y brand of detergent, or with increasing sophistication of buyers to avoid food products, which contain certain additives regarded as harmful or undesirable. These are examples of simple decision rules that may have quite a widespread influence in some product markets. Through the continue purchase of a favorite brand of chocolate, beer, washing up liquid or tights, consumers seek to meet their economic social and psychological needs with an acceptable degree of risk. With other products, involving relatively large financial costs and which tend to be bought infrequently, progress through the stages in buying is likely to be deliberate and careful. Information may be gathered over a long period of time, competitive product would be studied at some length, and the whole process of decision making would be very different from low-priced products, which are regularly purchased. For example, in the case of domestic heating installations, washing machines, color television sets, etc., there will be opportunities for marketers to reassure customers, and to make the decision making as free from worry as possible. The decision making process of families and of organizations are analyzed in specialized studies. What can be generally observed is that this type of buying behavior model, although useful in outline, requires considerable elaboration before it becomes a real value in actual marketing situations. Over the past 30 years or so, many theories have been advanced to explain of consumer behavior. According to Sheth, the existing variety of formulations resembles the variety of responses of seven blind men touching different parts of an elephant and making inferences about the animal which necessarily differ from, and occasionally contradict one another. He recommends concentration on the individual buyers problem solving processes, which include psychological and environmental factors. This view is also taken by Rober B Buzzel. Since predicting of market behavior is a fundamental technical problem in model building, it seems likely that application of behavioral science concepts and findings are the most fruitful avenue for improvements in the future. The marketer must see what the consumer actually needs and then observe him in his actual usage situation. Next, he must develop a product communication strategy, keeping in mind how the consumer actually uses the product. If the features were driven by genuine need and consumer research, the products would have been better and easier to use features and the result would be happy and loyal consumer. One must observe consumer behavior at home under normal circumstances and also identify specific what if events and seen how the consumer responds in such situations. Some companies regularly visit consumers at home and observe what they do. They gain valuable consumer insights into behavior, habits and idiosyncrasies. Unfortunately, such companies are very few. A large information gap exists between the consumer and the company on how to use a product and exploit its features fully. Traditional market research does
Factors Influencing the Purchasing Decisions of Motor Bike Consumers: A Comparative Study of Popular Brands 55

not easily capture consumer usage habits. This task becomes tougher because different consumer classes and regions have different practices. While creativity continue to bring in the bread and butter, the jam comes from elsewhere. Ram Sehgal, President Rediffusion DY & R Brand Communications (2000-01 capitalized billings; Rs. 75 cr) says, There is immense pressure on ad agencies to add value to their clients brands, and therefore, add value to their thinking process. Clearly, clients want us to partner them in brand structuring and integrated communication. Put in another way, companies want agencies to almost become extensions of their marketing arms, giving them end-to-end service. Tarun Raj, Senior Vice President and General Manager of Hindustan Thompson Associate (HTA) (billings; Rs. 207 cr), sees his agency as a brand custodian for clients of HTA, since life begins much before the creative brief. Euro RSCG (billings; Rs. 30 cr) has also decided to go national with its sales machine division, which specializes in direct marketing and promotional activities apart from providing marketing strategies. The agency has adopted the concept of a central business idea to create brand communications. We are aware of market and consumer categories and so, instead of giving the client just a creative idea, we work out a business idea that can generate sales, says an agency official. Arvind Sharma, CEO and Managing Director, Leo Burnett India (2000-01 billings; Rs. 37 cr) goes the farthest, If you look at the way communication groups are evolving themselves, many of them are not even calling themselves communication groups now. They are calling themselves marketing services groups, of which advertising is a part. While it may take time to reach the stage where we can almost tell clients how to launch their products. It can be said that we are somewhere in that territory. With ad agencies getting into advisory areas, should the McKinsey and Accentures of the world be worried? Sehgan believes that there is a difference between brand consulting and business consulting. He says that clients are asking agencies for consulting help to the extents that there is a communication relating to a brand, and therefore, relating to brand strategy. What lies beyond that point is the forte of a McKinsey or an Accenture. The real action though is happening with brand tools. Challenging some long held beliefs in this area is Leo Burnetts Brand Belief Systems (BBS). The agency believes that the key elements of marketing success are brand believers and brand bonds. The stronger is the belief, the stronger is the brand. BBS declines to accept rigid ideas about brand positioning propounded by marketing messiahs (Al Ries and Jask Trout, 2000). Rajeev Sharma, National Director, Brand Planning, Leo Burnett India, says, in the traditional approach to marketing, everything is defined as if it were cast
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in stone. Positioning is a very left brained phenomenon, where brands are narrowly defined by either personality or benefits. Now when you define brands so rigidly, your advertising gets predictable, and theres no leeway for creativity. Arvind Sharma adds, in an environment where change is rapid, you cannot maintain only one stand. Fluid nature and flexibility is the only way for brands to survive. Examples: Liril, Vicco Turmeric and Promise have not been able to sustain interest due to their rigid positioning. But others like Colgate and Close Up have begun offering a variety of propositions and succeeding. Brand belief works by tracking a particular brand also try to see it in the context of other brands in the same category. A business needs to manage its customers well to secure its future. Customers can be managed in the sense that they can be motivated to come back to the business again and again for their requirements. The primary vehicle for this is customer focus. All businesses need customers focus if they have to survive the present and grow in the future. The problem with customer focus in India is that most companies do not realize that it is neither a one-time exercise nor does it happen automatically once the planning is completed and the infrastructure put in place. It is a continuous process and the relevant systems have to be flexible and interactive. Another major strategy to retain customers is by developing a relationship with customers. Today, customer buying behavior is a key factor for all companies in the universe. companies are producing goods which try to meet the requirements of the customer. In age-old days, market depended on sellers. Now, the total scenario has changed into a buyers market. Obviously, customers buying behavior on two wheelers in general and bikes in particular had changed, when compared to the situation 20 years ago. In olden days, two wheelers had a monopoly market. Now, it is an oligopoly market. With the proliferation of similar type of goods and services, the customer has a number of choices. The global market for two wheelers has grown tremendously over the past decade. The sales of these two wheelers are increasing rapidly year by year. Looked at more closely, however, the geographic spread of this growth has been very uneven. Asia has accounted for most of the growth; with sales in the entire region growing more than threefold over the past decade. China and India alone account for over half of the worlds two wheeler sales. Other large markets in the region are: Japan, Indonesia, Vietnam and Taiwan. Latin America is another important region and sales have more than double over the past ten years, with Brazil accounting for the lions share with a market of around 4,00,000 units. In Europe, bike sales have grown steadily, from one million to 1.6 million units a year since 1987, but have leapt sharply recently with the change in rider licensing laws, which permits car driving license holders to ride bikes up to 150cc. Another factor has been the increasing urban congestion, especially in Southern Europe.
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Also, scooter design has become more fashionable, and hence, more attractive to the younger generation. The players in the world two wheeler markets could be at one time be categorized into two groups: the three global Japanese giants: Honda, Suzuki and Yamaha and the local niche players. The Indian two wheeler industry made a small beginning in the early 1950s, when Automobile Products of India (API) started manufacturing scooters in the country until 1958. In this paper, the customer buying behavior in 2004 and then the present buying behavior, have been discussed. Thereafter, a comparison is made between two time frames, i.e., 2004 and 2008.

Objectives
The main objectives of the paper are: To study the present scenario of consumer behavior; To compare the present consumer behavior with the consumer behavior observed in 2004; To examine the changes in various factors of the consumer behavior; and To analyze the differences in the consumer behavior.

Research Methodology
Data collected for this study includes primary data and secondary data. For the primary data collection, a pre-structured questionnaire was prepared and distributed to 100 reliable customers of Hero Honda to take their opinion and test their attitude while purchasing Hero Honda two wheelers. Time taken to collect this data was limited as one month. The secondary data was collected from the articles in newspapers, magazines, journals, visual media and various project reports.

Limitations
There are a few limitations of the study. They are: The views and opinions of customers are subject to change with changing time. The time taken to survey has been very limited which was a constraint. This study is based on sample the survey, which may not actually represent the total population.

Analysis and Interpretation of the Data

Data collected through a predefined questionnaire are analyzed below. Considering the usage time, any product is the primary aspect from the manufacturers point of view. The sample was tested for usage of the Hero Honda bikes and the results
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obtained were high for the duration 1-3 years in comparison with the response obtained in 2004 and 2008 (Table 1). Table 1: Usage of Hero Honda Bikes
Sl. No. 1. 2. 3. 4. Duration Less than one year 1-3 years 3-5 years More than 5 years Response Rate (Percent) 2004 25 30 24 21 Response Rate (Percent) 2008 18 35 24 23

Reasons for purchasing reasons are quite useful to concentrate on future sales. By keeping the present quality as it is, one can think about the chances for betterment. The respondents were asked the reasons for purchasing Hero Honda vehicles. As per customers opinion, the design of the motor vehicles has been improved and goodwill of the company for the purpose of resale of the vehicle has also increased (Figure 1). Figure 1: Reasons for Purchasing Hero Honda Bikes
45 40 35 30 25 20 15 10 5 0 Better design Fuel economy Resale value Low maintenance

Response rate (Percent) in 2004

Response rate (Percent) in 2008

Customer rating is a very important aspect for future breathing. It needs to be increased from one time frame to another for any companys survival. The respondents have been asked to rate their vehicles in two different time frames, i.e., 2004 and 2008. The ratings obtained is quite improved in terms of statistics (Table 2).

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Table 2: Customer Rating of Hero Honda Bikes

Sl. No. 1. 2. 3. 4. 5. Rating Excellent Very good Good Satisfied Poor Response Rate (Percent) 2004 15 54 12 14 05 Response Rate (Percent) 2008 17 59 18 04 02

After sales, services provided by the company are also very crucial from the customers point of view. Since, they play a major role in customer satisfaction. Purchasing behavior may get affected due to the variation in after sales services. Customers were asked to rate the services provided by the Hero Honda showroom/ company. It can be seen from Figure 2 that customers find an overall improvement in the service facilities of the Hero Honda Company. Figure 2: Customer Rating of Services Provided by Hero Honda
60 50 40 30 20 10 0 Excellent Very good Good Satisfied Poor

Response rate (Percent) in 2004

Response rate (Percent) in 2008

In the present competitive world, manufacturers should consider customer satisfaction to be of prime importance. Every customer may not feel happy/ comfortable with all the existing parameters of the product. They may still like to have other parameters of their interest along with the existing ones. In the same context, the samples are tested for the new features that they would like to have in their motor bikes. In general, Hero Honda is found very good in most aspects. In this study, it is observed that fuel economy emerged as the most preferred quality (Table 3).
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Table 3: Features that Willing to Have in Addition

Sl. No. 1. 2. 3. 4. 5. Features Low price Long life Fuel economy Resale value technical Response Rate (Percent) 2004 27 14 25 15 19 Response Rate (Percent) 2008 21 12 29 17 21

Additional features

Banking service also play a considerable role during pre-purchasing behavior of the customer. In olden days, loans provided by various banks for purchasing vehicles, used to be linked with many complications. But now-a-days, several banks are coming out with easy processes. Because of this, people are choosing to go for finance instead of making down payments out of their own savings. It can be seen from Figure 3 that there has been a 10 percent increase in customers choosing the financing option. Figure 3: Mode of Purchase

60 50 40 30 20 10 0 Response rate (Percent) in 2004 Cash Response rate (Percent) in 2008 Finance

Every manufacturer considers customer satisfaction as a major aspect for its production. It is difficult to have 100% satisfaction for any kind of product. All the reliable customers of Hero Honda are asked whether they are satisfied with their bikes or not and a good improvement of 13 percent has been observed from 2004 to 2008 (Table 4).

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Table 4: Satisfaction at Bikes Performance

Sl. No. 1. 2. Satisfaction Yes No Response Rate (Percent) 2004 74 26 Response Rate (Percent) 2008 87 13

In general, every unsatisfied customer will definitely shift to other product. Along with unsatisfied customers, even a few satisfied customers will also shift to other product. There are numerous reasons for shifting from one product to another. Even a satisfied customer may not stick to the same product for a long time. The sample were asked whether they were planning to shift from Hero Honda company to other and it was found that most of the customers (90 percent) were not willing to shift to other company vehicles (Figure 4). Figure 4: Willingness to Shift to Other Vehicles
90 80 70 60 50 40 30 20 10 0 Very high High Average Low Nil Response rate (Percent) in 2008

Response rate (Percent) in 2004

Every customer of Hero Honda may feel like riding another companys bikes at least once in their life. They may prefer any other companys bikes after Hero Honda. And even if any customer was not happy with the performance of the vehicle, he was asked to give his preference for other companies. It is found that customers prefer Yamaha company next to Hero Honda (Table 5). Table 5: Preferable Brand Next to Hero Honda
Sl. No. 1. 2. 3. 4. 5.
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Company Bajaj Yamaha TVS Others NA

Response Rate (Percent) 2004 07 09 03 34 47

Response Rate (Percent) 2008 03 08 03 22 65

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One cannot always be totally satisfied with the existing features in their product. One may feel that the product has some negative aspects. The customers were asked the features in their motor bikes with which they were dissatisfied. It is observed that the fuel consumption is fallen by 14 percent and most of the customers (67 percent) have no complaint about any feature (Figure 5). Figure 5: Negative Aspects of Hero Honda from the Customers Point of View
70 60 50 40 30 20 10 0 High cost High maintenance Fuel consumption None

Response rate (Percent) in 2004

Response rate (Percent) in 2008

Two statements from the previous surveys have been obtained and the sample has been asked to express their opinion on those. The first one is, Many surveys proved that Hero Honda two wheelers are the best in the world. And the responses obtained are given below (Table 6).

Table 6: Customer Opinion on the Statement about Hero Honda Two Wheelers
Sl. No. 1. 2. 3. 4. 5. Response Strongly Agree Undecided Disagree Strongly disagree agree Response Rate (Percent) 2004 42 38 11 07 02 Response Rate (Percent) 2008 52 48 05 03 02

The second one is Services provided by the Hero Honda showrooms are very good and the responses obtained were found to be considerably high for strongly agree (Figure 6).
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Figure 6: Customers Opinion on the Statement about Services of Hero Honda

50 45 40 35 30 25 20 15 10 5 0 Strongly agree Agree Undecided Disagree Strongly disagree

Response rate (Percent) in 2004

Response rate (Percent) in 2008

Conclusion
The following conclusions can be drawn by comparing the data available pertaining to the year 2004 with that of 2006: The respodents have been using those bikes for past 1-3 years. The main reason for purchasing the vehicle is better design, followed by resale value. 76 percent of the customers believe that their vehicle is very good in all aspects. And 67 percent of the customers believe that the service facilities of the Hero Honda showroom/company are very good. Respondents satisfaction level is high and they are not much willing to shift to other companies. Customers prefer to have fuel economy and additional technical features in their vehicles in addition to the existing features. Major part of the sample trusted the brand name, efficiency and service facilities of Hero Honda. From the customers point of view, one disadvantage of Hero Honda motor bike has been found the high fuel consumption. Customers gave next immediate place to the Yamaha, followed by the Bajaj. Most of them were willing to replace their vehicles with those of other companies. Finally, consumers have placed a very high amount of trust on Hero Honda since they feel that these vehicles are most comfortable and geared to meet the improvements in their lifestyle.
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As the past surveys have shown, Hero Honda is the best motor vehicle among the available brands. Moreover improvements in areas like fuel consumption, design and additional technical features are still required.

Bibliography
1. 2. Al Ries and Jack Trout (2000), Positioning: The Battle for Your Mind, McGrawHill, 1st Edition, December 13. Jha B K, Gupta S L, Puneet Yadav (2008), Use and Effectiveness of New Technologies in Indian Banking: A Study, The Icfai Journal of Services Marketing, Vol. VI, No. 1, pp. 6-22. Nair K N C (2006), Technology in Banking: A Strategic Differentiator, Chartered Financial Analyst, October, Hyderabad. Philip Kotler and Kevin Lane Keller (2006), Marketing Management, PrenticeHall of India. Richard R Still, Edward W Cundiff, Norman A P, Govoni (1981), Sales Management: Decisions, Strategies, and Cases, Prentice-Hall of India.

3. 4. 5.

Appendix
Questionnaire
Research Topic: To study the awareness, expectation and acceptance level of the customers with respect to the purchase of the Hero Honda Bikes in Andhra Pradesh. 1. Since how long you are using your bike Hero Honda? Less than 1 Year ( ) More than 5 Years ( ) 2. 1-3 Years ( ) 3-5 Years ( )

Reasons for purchasing Hero Honda only? Better Design ( ) Fuel Economy ( ) Low Maintenance ( ) Long Life ( ) Resale Value ( ) Price Economy ( ) Additional Technical Features ( )

3.

Rate your vehicle Excellent ( ) Very Good ( ) Good ( ) Satisfied ( ) Poor ( )

4.

Rate the service of the Hero Honda Showroom/company Excellent ( ) Very Good ( ) Good ( ) Satisfied ( ) Poor ( )

5.

Features that you feel to have in addition, to your vehicle? Better Design ( ) Fuel Economy ( ) Low Maintenance ( ) Long Life ( ) Resale Value ( ) Price Economy ( ) Additional Technical Features ( ) (Contd...)

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Appendix
Questionnaire
6. 7. 8. 9. Your mode of purchase Cash ( ) Finance ( ) Yes ( ) No ( ) 50% ( ) 25% ( ) NA ( ) NA ( ) Others ( ) Are you satisfied with your Bikes performance?

(...contd)

How far you are planning to shift from Hero Honda company to other 100% ( ) 75% ( ) Bajaj ( ) Yamaha ( ) If you are planning to shift to other company, which one you prefer TVS ( ) Others ( )

10. Any other parameters that you feel as negative for Hero Honda company Bikes High Cost ( ) High Maintenance ( ) Fuel Consumption ( ) Others ( ) None of the Above ( ) 11. Many surveys proved that Hero Honda two wheelers are the world best Strongly Agree ( ) Strongly Disagree ( ) Agree ( ) Undecided ( ) Disagree ( )

12. Many surveys proved that Services provided by the Hero Honda are very good Strongly Agree ( )Agree ( ) Disagree ( ) Respondents Information: Name of the Respondent: Age Gender : : Male ( ) Female ( ) Profession : Business ( ) Service ( ) Student ( ) Others ( ) Income (per annum): Below 1 Lakh ( ) Address: E-mail: Cell Number: 1-3 Lakh ( ) 3-5 Lakh ( ) Above 5 Lakh ( ) Educational Qualification: Undecided ( ) Disagree ( ) Strongly

Reference # 02J-2009-04-04-01
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