Business Research Methodology

IMPACT OF 'INFLUENCERS' ON PURCHASE OF 'SEDAN CARS' RANGING FROM 'Rs.5 LAKHS TO Rs.10 LAKHS'

SUBMITTE D TO: PROF. JINAL PARIKH

SUBMITTED BY:MILAN DAVE ANKITA JAIN SAPAN SHAH NIRAV SOLANKI EKTA TANEJA HARDIK VAGHELA VISHAL VALA (A 14) (A 21) (A 49) (A 51) (A 53) (A 58) (A 59)

INTRODUCTION

While purchasing a new car, a dad took reference of is 21 year old son and 23 year old daughter. Why a person with a sufficient income asks for preference of a young guy/ girl for purchasing his new car? This is because these people have more knowledge about the cars, and their opinion was the best one in eyes of the father. These people influence the most, the purchase decision of car. Thus rightly termed, these are the INFLUENCERS.

RESEARCH OBJECTIVE
Our research is clearly focusing on the people of age group of 21 years to 25 years who are probably the most influencing people when any car is purchased in the family. Thus the preference of these influencers in purchasing Sedan cars ranging from Rs.5 lakhs to Rs.10 lakhs is our basic objective of the research.

RESEARCH INSTRUMENTS
Questionnaires will be used as a basic instrument for collecting the information about the preferences of these individuals. We will be having two questionnaires:
1. MAIL QUESTIONNAIRE:

This will be our initial questionnaire focusing on Exploratory Research. This will help in short listing the 5 most preferred Sedan cars.
2. PRINTED QUESTIONNAIRE:

This will be our final questionnaire which will be helpful to us in getting the narrowly defined data of why people under the survey preferred a particular car.

SOURCES OF DATA
Here two types of data will be used by us:

1. PRIMARY DATA:

This is the data which will be gathered by us by directly making people fill the questionnaire.
2. SECONDARY DATA:

This is the data which will be gathered by us in getting the information about cars, its basic features and its other relevant information. The basic data source for us will be websites.

SAMPLE
1. SAMPLE SIZE:

A sample size is the number of people we survey. In our project we will be surveying around 50 people from college for exploratory questionnaire, thus our sample size n1= 50 In our final questionnaire we will be surveying around 200 people, thus our sample size n2=200
2. SAMPLING TECHNIQUE:

Non probability sampling Convenience sampling

3. SAMPLING UNIT:

Sampling unit of the questionnaires will be the young people of age group of 21-25 years in Ahmedabad.

DATA PROCESSING METHODS:

Appropriate statistical techniques like Chi-Square analysis, Two-way Anova will be used in analysis of the collected data.

OUTCOME
Q) Which sedan car, ranging from Rs.5 lakhs - Rs.10 lakhs is most preferred by influencers of age group 21 years -25 years? A) After analyzing the collected data, we have come up with a conclusion that youngsters of Ahmedabad prefer 'HONDA CITY' because of its ride quality and superior brand value.

INTRODUCTION TO AUTO INDUSTRY

The automotive industry in India is one of the largest in the world and one of the fastest growing globally. India's passenger car and commercial vehicle manufacturing industry is the sixth largest in the world, with an annual production of more than 3.7 million units in 2010. According to recent reports, India is set to overtake Brazil to become the sixth largest passenger vehicle producer in the world, growing 16-18 per cent to sell around three million units in the course of 2011-12. In 2009, India emerged as Asia's fourth largest exporter of passenger cars, behind Japan, South Korea, and Thailand. In 2010, India reached as Asia's third largest exporter of passenger cars, behind Japan and South Korea beating Thailand. As of 2010, India is home to 40 million passenger vehicles. More than 3.7 million automotive vehicles were produced in India in 2010 (an increase of 33.9%), making the country the second fastest growing automobile market in the world. According to the Society of Indian Automobile Manufacturers, annual vehicle sales are projected to increase to 5 million by 2015 and more than 9 million by 2020. By 2050, the country is expected to top the world in car volumes with approximately 611 million vehicles on the nation's roads. The majority of India's car manufacturing industry is based around three clusters in the south, west and north. The southern cluster near Chennai is the biggest with 35% of the revenue share. Chennai, is also referred to as the "Do of India" with the India operations of Ford, Hyundai, Renault and Nissan headquartered in the city and BMW having an assembly plant on the outskirts. Chennai accounts for 60% of the country's automotive exports. Gurgaon and Manesar in Haryana form the northern cluster where the country's largest car manufacturer, Maruti Suzuki, is based. The Chakan corridor near Pune, Maharashtra is the western cluster with companies like General Motors, Volkswagen, Skoda, Mahindra and Mahindra, Tata Motors, Mercedes Benz, Land Rover, Fiat and Force Motor having assembly plants in the area. Aurangabad with Audi, Skoda and Volkswagen also forms part of the western cluster. Another emerging cluster is in the state of Gujarat with manufacturing facility of General Motors in Halol and further planned for Tata Nano at Sanand. Ford, Maruti Suzuki and Peugeot-Citroen plants are also set to come up in Gujarat.Kolkatta with Hindustan Motors, Noida with Honda and Bangalore with Toyota are some of the other automotive manufacturing regions around the country.

SEDAN CARS IN INDIA

The main features of a Sedan cars include bigger chassis dimensions, seating space and luggage space included in single body shell. Sedan are the mid size cars having more row seats with passenger capacity of four or more. A sedan model has more than four doors with separate boot or luggage space at the rear. Basically sedan car means the cars with more boot space and entirely different section from the passenger's cabin. In cars sedan is synonymous to luxury. Sedan cars are the blend of comfort, luxury, elegance and stunning interior with high end safety features. There are endless high end luxury cars in the same segment. The demand of sedan cars are increasing rapidly in India which is the main reason many foreign car manufactures target India as a launching pad for these luxury cars. The major players in this particular segment are Honda, Skoda, Volkswagen, Ford and Hyundai.

'Youth Can Influence Parents Luxury Car Purchases'

AN ARTICLE PUBLISHED IN AN INTERNATIONAL AUTOMOBILE MAGAZINE: But to some extent, Toyota had such young people in mind, at least as potential purchase influencers, when it developed the fourth-generation premium sedan. Why? Because, although youths typically dont plop down allowance money on pricey cars, they surprisingly can sway parents of means on what luxury vehicle to buy, or not buy. That was an eye-opener, says Mark Templin, group vice president and general manager of Toyotas premium Lexus division, citing innovative consumer research gleaned from breaking bread with car buyers. We discovered some adults let their kids pick out the luxury cars they buy, he tells Wards Auto. In some cases, you are talking about an Rs.700000/- and above vehicle. I was floored by that. Its phenomenal. It means that a luxury car in some ways must appeal to young non-buyers or run the risk of getting branded as uncool by both them and their parents. Young people look at styling and driving dynamics in upmarket cars, Templin says.

Over the years, some critics have rapped Lexus for staid styling. The GS aims to change that perception and lead a design movement across the entire lineup. The GS signifies the new, bolder and more confident direction the brand is taking, he says at a media preview at the Las Vegas Motor Speedway. Theres no going back. This is the new Lexus. The vehicle features sleek styling, nimble handling and the latest in connectivity gadgetry. It arrives at dealerships in February, intending to vie with the MercedesBenz E-Class, BMW 5-Series and Audi A6 in the luxury midsize sedan segment. The GS 350 is powered by a 3.5L V-6 engine. At 306 hp, it is touted as one of the most powerful base engines in the segment, as well as the only one with both port and direct injection. Enhanced in the 13 GS, the engine is a 4-time winner in the Wards 10 Best Engines competition. The new GS comes with an all-wheel drive option and a sport package that includes a stiffer suspension, rear lip spoiler and mesh grille inserts. Also available is the GS 450h hybrid. Lexus expects to sell about 25,000 GS models a year. The new car is changing the way people think about driving a Lexus, Templin says. That includes those affluent car buyers who listen to their kids. Templin and his colleagues learned about that phenomenon during novel and personal market research in the form of dinner parties at the homes of willing Lexus owners. The first gathering was in Beverly Hills, CA. Essentially, we were hosting a party at their houses, he says. We hired a celebrity chef and picked residences based on whether they had a big enough kitchen and seating area for 20 people. For the guest list, Lexus provided some guidelines to get a cross-section of guests but otherwise, we told the hosts, Invite who you want, even non-Lexus owners, especially non-Lexus owners, Templin says. Customer insight garnered in such informal settings was helpful to me, he says. We are in a very data-intensive industry. We always look at demographics, but something like this the influence of young people on luxury-car buying doesnt come to life until you talk to consumers like we did.

ANALYSIS AND INTERPRETATION

A brief section on the methods used for analyzing the data is appropriate for large scale contracts research proposal and theses. After the project research being done it requires proper conclusion, limitation and the foremost thing is interpretation. The analysis is important to evaluate and review the latest techniques available for use in the particular research study and compare these to the proposed techniques.

STEPS OF ANALYSIS:

Exploratory search was done initially to select the five most preferred sedan cars for further analysis of our search.

Questionnaires were given to the respondent to know their preference in best possible ways which could help us in our project analysis.

Analysis has been done in three main phases. In first phase descriptive analysis has been done of each question using frequency distribution.

In second phase bi-variate analysis is done with the help of two questions taken as variables.

In third phase testing of hypothesis has been done to get relevant information for interpretation.

Graphical presentation and interpretation of each question by the way of bar charts and graphs.

PHASE 1

ANALYSIS BY THE MEANS OF CHARTS AND GRAPHS

1) DO YOU OWN A CAR? Response Yes No Total Frequency 113 87 200 Percentage % 56 44 100

4% 4 5% 6

Ys e N o

ANALYSIS: Out of the total 200 respondents, 56% of respondents own a car and 44% of respondents do not own a car.

2) HOW MANY KMS DO YOU TRAVEL EVERYDAY? Response 0 to 10 Frequency 88 Percentage % 44

10 to 15 15 to 20 20+ Total

43 57 12 200

22 28 6 100

Distance Travelled
100 Frequency 80 60 40 20 0 0 to 10 10 to 15 15 to 20 20+ N of K s o. m. 12 57 43 88

ANALYSIS: Out of the total respondents, 88% traveled 0 to 10 kms per day, 43% traveled 10 to 15 kms per day, 57% traveled 15 to 20 kms per day and 12% traveled 20 kms above per day.

3) WHICH TYPE OF CAR WOULD YOU PREFER? Response Petrol Diesel Frequency 121 79 Percentage % 60.5 39.5

Total

200
Type of Car

100

40% Petrol Diesel 60%

ANALYSIS: Out of the total respondents, 60.5% preferred petrol car and 39.5% preferred diesel car.

4) WHICH CAR WOULD YOU PREFER OUT OF THE FOLLOWING? Cars Frequency Percentage %

Honda City Volkswagen Vento Hyundai Verna Nissan Sunny Maruti Swift Dzire Total

79 26 58 19 18 200

39.5 13 29 9.5 9 100

First Preference for cars

100 Frequency 80 60 40 20 0 Honda City Volkswagen Vento Hyundai Verna Cars Nissan Sunny Maruti Swift Dzire 26

79 58

19

18

ANALYSIS: Out of the total respondents, 39.5% preferred Honda City, 13% preferred Volkswagen Vento, 29% preferred Hyundai Verna, 9.5% preferred Nissan Sunny and 18% preferred Maruti Suzuki Swift Dzire. Hence Honda City comes out to be the most preferred car.

5)

WHY DO YOU PREFER THIS CAR?(1st preference) Frequency 56 51 Percentage % 28 25.5

Characteristic Brand Value Exteriors

Interiors Mileage Quality Total

31 25 37 200

15.5 12.5 18.5 100

Charcteristics for preference of cars

60 Frequency 56 51 37 31 25 20

40

0 Brand Value Exteriors Interiors Characteristics Mileage Quality

ANALYSIS: Out of the total respondents, 28% prefer the car due to its brand value, 25.5% due to its exterior, 15.5% due to its interior, 12.5% due to its mileage and 18.5% due to its quality.

6) WHICH IS YOUR SECOND PRFERENCE OUT OF THE FOLLOWING?

Cars Honda City

Frequency 36

Percentage % 18

Volkswagen Vento Hyundai Verna Nissan Sunny Maruti Swift Dzire Total

56 37 27 44 200

28 18.5 13.5 22 100

Second Preference for cars

60 Frequency 40 20 0 Honda City Volkswagen Vento Hyundai Verna Cars Nissan Sunny M aruti Swift Dzire 36 56 44 37 27

ANALYSIS: Out of the total respondents for second preference, 18% preferred Honda City, 28% preferred Volkswagen Vento, 18.5% preferred Hyundai Verna, 13.5% preferred Nissan Sunny and 22% preferred Maruti S uzuki Swift Dzire. Hence the second most preferred car comes out to be Volkswagen Vento.

7) WHY DO YOU PREFER THIS CAR?(second preference) Characteristic Brand Value Exteriors Frequency 55 38 Percentage % 27.5 19

Interiors Mileage Quality Total

29 39 39 200

14.5 19.5 19.5 100

Characteristics of Car
60 55 38 29 20 39 39

Frequency

40

0 Brand Value Exteriors Interiors Characteristic Mileage Quality

ANALYSIS: Out of the total respondents for second preference, 27.5% preferred the car due to its brand value, 19% due to its exterior, 14.5% due to interior, 19.5% due to its mileage and 19.5% due to quality.

8) WHICH CAR YOU DISLIKE OUT OF THE FOLLOWING?

Cars Honda City

Frequency 16

Percentage % 8

Volkswagen Vento Hyundai Verna Nissan Sunny Maruti Swift Dzire Total

26 31 76 51 200
Cars Disliked

13 15.5 38 25.5 100

80 Frequency 60 40 20 0 Honda City 16 26 31

76 51

Volkswagen Hyundai VernaNissan Sunny Maruti Swift Vento Dzire Cars

ANALYSIS: Out of the total respondents, 8% did not preferred Honda City, 13% did not preferred Volkswagen Vento, 15.5% did not preferred Hyundai Verna, 38% did not preferred Nissan Sunny and 25.5% did not preferred Maruti Suzuki Swift Dzire Hence Nissan Sunny comes out to be the least preferred car.

9) WHY DO YOU DISLIKE THIS CAR? Characteristic Quality Frequency 33 Percentage % 16.5

Resale Value Mileage After-sale services Total

65 58 44 200

32.5 29 22 100

Charcteristics for dislike of cars

80 65 Frequency 60 40 20 0 Quality Resale Value Mileage Characteristics After-sale services 33 58 44

ANALYSIS: Out of the total respondents, 16.5% did not preferred the car due to its quality, 32.5% due to its resale value, 29% due to its mileage and 22% due to the after sales services

10)

HOW MANY MEMBERS ARE THERE IN YOUR FAMILY? Frequency 22 Percentage % 11

Number of Members 2

3 4 4+ Total

57 93 28 200
Number of Members

28.5 46.5 14 100

14%

11% 2 3 29% 4 4+

46%

ANALYSIS: Out of the total respondents, 11% have the family size of 2 persons, 28.5% have the family size of 3 persons, 46.5% have the family size of 4 persons and 14% have the family size of more than 4 persons.

11) Characteristic

WHAT IS THE PURPOSE TO BUY THE CAR? Frequency Percentage %

Regular Commutation Highway Run Trivial Purposes Total

89 66 45 200

45 33 23 100

Purpose of Car Purchase

45 89 Regular Commutation Highway Run Trivial Purposes 66

ANALYSIS: Out of 200 respondents, 45% choose Regular commutation as purpose to buy car, 33% choose Highway run and 23% choose trivial purposes. Thus the main reason for purchase of car is Regular commutation.

12) THROUGH WHICH SOURCE DID YOU GET INFORMATION ABOUT THIS CAR? Characteristic Frequency Percentage %

Newspaper Television Advertisement Word of Mouth Other Total

39 54 87 20 200

19.5 27 43.5 10 100

100 80 Frequency 60 40 20 0 Newspaper 39 54

87

20

Television W ord of Mouth Advertisement

Other

Source of Informa tion

ANALYSIS: Out of total respondents, 19.5% relied on newspaper, 27 % o television, 43.5% on word of mouth and 10% relied on other sources (like trade promotion, trial drive, etc. ) as sources of information for cars.

PHASE II & III

TESTING HYPOTHESIS

Ho: Age is independent of monthly expenditure (spending). H1: Age is dependent on monthly expenditure.
Steps of analysis: Sample selected by the way of questionnaire method, and interpretation of the same

Analysis of the data by the way of descriptive and bi variate analysis.

ANOVA- TWO FACTOR ANALYSIS

Column1

Honda City
15 18 14 11 21

Volkswagen Vento
7 6 5 5 3

Hyundai Verna
16 20 8 7 7

Nissan Sunny
8 5 4 0 2

Maruti Swift Dzire

10 2 0 2 4

Brand Value Exteriors Interiors Mileage Quality

Result :
F 3.248826291 13.92488263 P-value 0.039420702 4.43662E-05 F crit 3.006917 3.006917

2) ANOVA : TWO FACTOR WITHOUT REPLICATION (On the 'CARS DISLIKED' parameter)

Column1 Quality Resale Value Mileage After-sales services

Honda City 2 1 9 4

Volkswagen Vento 5 7 3 11

Hyundai Verna 3 12 9 7

Nissan Sunny 12 35 20 9

Maruti Swift Dzire 11 10 17 13

Result :
F 1.148468553 3.980593874 P-value 0.369333 0.0278571 F crit 3.490295 3.259167

3) CHI-SQUARE ANALYSIS

Column1 2 3 4 4+

Honda City 10 15 42 12 79 Honda City 8.69 22.515 36.735 11.06

Volkswagen Vento 3 10 12 1 26 Volkswagen Vento 7.41 12.09 3.64 26

Hyundai Verna 7 17 23 11 58 Hyundai Verna 16.53 26.97 8.12 58

Nissan Sunny 1 6 9 3 19 Nissan Sunny 5.415 8.835 2.66 19

Maruti Swift Dzire 1 9 7 1 18 Maruti Swift Dzire 5.13 8.37 2.52 18

Column2 22 57 93 28 200

2 3 4 4+ 4.43839E33

4) CHI-SQUARE ANALYSIS

Column1

Honda City 10 22 42 5 79

Volkswagen Vento 6 9 8 3 26

Hyundai Verna 9 14 26 9 58

Nissan Sunny 8 5 5 1 19

Maruti Swift Dzire 6 4 6 2 18

Column2 39 54 87 20 200

Newspaper Television Advertisement Word of Mouth Other

Honda City

Newspaper Television Advertisement Word of Mouth Other

15.405 21.33 34.365 7.9

Volkswagen Vento 5.07 7.02 11.31 2.6

Hyundai Verna 11.31 15.66 25.23 5.8

Nissan Sunny 3.705 5.13 8.265 1.9

Maruti Swift Dzire 3.51 4.86 7.83 1.8

0.117485564 p is greater than alpha, thus Accept ho Hence, preference depends on ho

CONCLUSION

We conclude that, youngsters are preferring cars on the basis of brand value. More preference is given to HONDA CITY because of its brand image. The age and particular car selection is not related. Also we found out that the family size and selection of car is also less correlated. The two way Anova shows the preference of car HONDA CITY is more because of the brand preference and ride quality. But it is not selected on the basis of mileage it gives or the cars looks. Age group of 21-25 years are the public, who are the most out going, making more fun, and so they are preferring a car which is adding their own value. People are indifferent to the selection of car on the basis of fuel type. But a little positive correlation is there in distance travelled and fuel type. People travelling more than 20 km per day are more likely preferring VW VENTO as their best alternative.

Our focus is more on the impact of the individuals in selecting a car. And the clear winner without any dispute is HONDA CITY. People are preferring it over any other car on the basis of only quality and brand value.

QUESTIONNAIRE

NAME: __________________________________________________ AGE: ____ SEX: MALE / FEMALE

OCCUPATION: __________________ CONTACT NO: ____________________ EMAIL ID: ___________________________________________________ ADDRESS (Specify area only): ________________________ QUESTIONS: 1) DO YOU OWN A CAR? A) YES B) NO If YES, which car? _________ If NO, which mode of transport do you use? ________

2) HOW MANY KMS DO YOU TRAVEL EVERYDAY? A) 0-10 B) 10-15 C) 15-20 D) 20 + 3) WHICH CAR WOULD YOU PREFER OUT OF THE FOLLOWING? A) HONDA CITY B) VW VENTO C) HYUNDAI VERNA D) NISSAN SUNNY E) SWIFT DZIRE 4) WHY DO YOU PREFER THIS CAR? A) BRAND VALUE B) EXTERIORS C) INTERIORS D) MILEAGE E) QUALITY 5) WHICH IS YOUR SECOND PRFERENCE OUT OF THE FOLLOWING?

A) HONDA CITY B) VW VENTO C) HYUNDAI VERNA D) NISSAN SUNNY E) SWIFT DZIRE

6) WHY DO YOU PREFER THIS CAR? A) BRAND VALUE B) EXTERIORS C) INTERIORS D) MILEAGE E) QUALITY 7) WHICH CAR YOU DISLIKE OUT OF THE FOLLOWING? A) HONDA CITY B) VW VENTO C) HYUNDAI VERNA D) NISSAN SUNNY E) SWIFT DZIRE 8) WHY DO YOU DISLIKE THIS CAR? A) QUALITY B) RESALE VALUE C) MILEAGE D) AFTER SALES SERVICE 9) HOW MANY MEMBERS ARE THERE IN YOUR FAMILY? A) 2 B) 3 C) 4 D) MORE THAN 4 (If more than 4 members are there in your family then answer the next question, else go to the 11th question) 10) WHAT IS THE PURPOSE TO BUY THE CAR?

A) REGULAR COMMUTATION B) HIGHWAY RUN C) TRIVIAL PURPOSES 11) THROUGH WHICH SOURCE DID YOU GET INFORMATION ABOUT THIS CAR? A) NEWSPAPER B) TELEVISION ADVERTISEMENT C) WORD OF MOUTH D) OTHER MENTION OTHER SOURCE: _________