Consumer Behavior towards

Small Cars in India

Consumer behaviour is a study of

the process concerned when
people choose, purchase, use, or
eliminate products, services,
ideas, or experiences to satisfy
wants and needs. It can be
viewed from different
perspectivesThe micro perspective seeks
application of this knowledge to
problems faced by the individual
firm or organisation.
The societal perspective applies
knowledge of consumers to
Shobhitfaced
Kapta
aggregate-level problems
by large groups or by society as a
whole

Introduction

The automobile industry today is a lucrative industry.

Due to increase in disposable income in both rural and

urban sector and availability of easy finance are the

main drivers of high volume car segments.
Further competition is heating up with host of new
players coming in and global brands like Porsche,
Bentley, and Ferrari all set to venture in Indian market.
This research will be helpful for the existing and new
entrant car manufacturing companies in India to find
out the customer expectations and correspondingly
adjust their market offerings.
Proper understanding of consumer buying behavior
will help the marketer to succeed in the market.

There are various reasons for the growth of the Indian automobile

market such as
1. The people have more disposable income as economy is growing.
2. Increase in the need of mobility due to urbanization and leisure
travel.
3. Car Finance options available from Financial Institutes at
reasonable rate of interest.
4. Availability of service centers and spare parts in near vicinity.
5. Improvement in highway infrastructure.

Acc to Maruti Suzuki Chairman R.C BhargavaSmall cars will continue to dominate the
Indiancarmarket and share ofdieselcars will
go down as they will become expensive on
stricter emission norms.
The infrastructure in the country will not be
able to support long, broad cars.
Also, rules and regulations of the future will
be against big cars.
Once the stricter BS5 norms kick in, diesel
cars will become much more expensive. So,
the share of diesel cars will come down.

Objectives of Study
1. To identify different sources of information

used by the buyers while making a purchase

decision-Magazines ,Online portals, word of
mouth etc
2. To identify the factors influencing the
selection and purchase of small car.
3. To identify the Product attributes that
influence the consumer buying decision for a
small car.

Methodology
Primary research- Questionnaire to be filled by Respondents.
Discriminant Analysis/ Logistic regression-

Factors to be consideredSize of the car

Fuel prices
Automatic Transmission
European / U.S / Asian carmakers
Service
Modes of promotion that are most effective
Safety Safety bags etc

Factor Analysis

Literature Review
The studies by Mrs Beena John, Dr. S. Pragadeeswaran titled A study

of small car consumer preference in Pune , investigated impact of

profile of respondents and influencing factors in purchasing decision.
They concluded that the income fluctuation and enhanced petrol
prices are the factors driving demand of small cars in India. Small car
sector offers immense potential as penetration and consumption of
small cars is very less in Pune compared to its population.
The study of consumer behaviour elaborates as how people construct
their buying preferences to utilize their resources like time, money,
effort on consumption-related things (Schiffman and Kanuk, 1997 .
(Loudon & Della Bitta 2002; 8-9).
Clement Sudhakar and Venkatapathy (2009) studied the influence of
peer group in the purchase of car with reference to Coimbatore
District. It was also found that the influence of friends is higher for the
purchase of small sized and mid sized cars.

Manish Kumar Srivastava and A.K. Tiwari ,

studied the consumer behavior for A3 segment

vehicles such as Honda City and SX4 in a
particular region Jaipur. It was concluded that
while purchasing A3 segment car Customer
give much importance to Safety, Brand Name
and seating and driving comfort. Also word of
mouth publicity and advertisements in car
magazines are more effective communication
medium for promotion of Cars.