Symbiosis Institute of Management Studies, Khadki, Pune

EVALUATION SHEET
(COVER PAGE)

GROUP ASSIGNMENT No: 2 (Internal)

Subject Code : Subject: Market Research

Prof. Name: Dr. Roshan Kazi

Course/ Program and Batch: MBA Executive 2019-21

PRN: 19020448076 _ Student Name: Ishan Kulkarni

Date of submission: 08/03/2020

Submitted to: Hard copy Signature of Student___________________

Evaluation:

TOTAL
Question 1 2 3 4 5
(Out of 30)
Marks
Allotted

Evaluated by: ______________________________Signature of Faculty __________________

Date: _______________2020

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 Table of contents

Contents Page no.

Introduction

Review of Literature

Research Methodology

Data Analysis

Conclusion

References cited

Appendix (Questionnaire)

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 Study on consumer decision for buying SUV

INTRODUCTION

Research Problem

Utility Vehicles (UV) sales in India are predicted to cross the 1 million units mark annually by 2020.
The UVs may overtake hatchbacks in 2020. While Indians in small cities and towns still buy more
hatchbacks and compact sedans, the matured buyer in big cities is upgrading from cars to SUVs of all
sizes. Despite of economic slowdown and bleeding automobile sector in last two years, this segment
has seen a lot of transformation in customer’s vehicle preferences. Autocar Professional’s analysis
reveals that over the past seven fiscal years, even as the overall PV market size has grown, the overall
share of the passenger car market has fallen by 10 percent while that of UVs has risen by 12.5 percent,
clearly indicating that SUVs have eaten into the car market and it’s a trend that’s set to continue. The
UV segment is expected to grow exponentially to 1.5 million units a year by 2023 and therefore there
is a big opportunity for new and well-known automobile companies to innovate, brand and market the
product to gain the most of it.

Need to do research on the problem?

Sports Utility Vehicles (SUVs) assume a new meaning in India. In a country, where vehicles and their
cost is deeply steeped into the notions of power and affluence, more Indians are shunning humble
hatchbacks and gentlemanly sedans to opt for the ferocious, on-your-face SUVs. This new-found love
for power and prestige has the Society of Indian Automobile Manufacturers smiling. It will be a
mistake to tag the growing preference for UVs as a passing fad. Going by the frantic demand and
anticipated product launches, more Indians will be driving an SUV or MUV by 2023. It is expected
that SUV sales will continue to grow at a strong rate in the next decade, as India moves ahead to
become part of the global automotive triumvirate or the Big 3.

Another major factor leading to SUV trend are the economic development achieved by India resulting
which indeed increased the disposable income which is generally spent by Indians on buying property
or buying luxury cars for adventure, family, social status, lifestyle etc.

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The rising disposable income of Indian consumers has also led shifting of preference from hatchback
or sedan to SUVs or MUVs. People, especially young corporate people with an age group of 30 to 40
are preferring to buy 5-seater or 7-seater SUVs over buying typical sedan car. Basis on various studies
conducted by different research organizations, the SUV market has tremendous potential to soar
exponentially.

Buying a car is more of emotional decision of any family in India. When a person convinced to buy a
new car, first he thinks about family and overall utility of the vehicle. Bigger the family, preference
is given to big-sized car. For millions of such households, a 7-seater SUV is a pragmatic option. There
is no major differentiation in premium sedan cars and 5-seater SUVs. Another factor is SUVs are best
suited for adventure trips or long vacation which are planned with road travel. In such cases, SUV
always have upper hand as it has more space, more safety features and aggressive structure of car
which gives more confidence while driving the car on road.

Also, SUVs perform best on highways and hilly areas. SUVs or MUVs such as Mahindra Xylo, Innova
are being used most in hill stations such as Ladakh region, Himachal region etc.

Company, consumer, industry (who will benefit from the research)

Industry: -
All automobile manufacturers, dealers will be the benefiters from this research namely, MG Motors,
Kia Motors, TATA Motors, Hyundai Motors, Suzuki etc.

Consumer: -
A new experience will attract and be preferred by all aspirant consumers.

Scope of research – target respondents, geographical region

The target respondents are young people who are in full-time employment in India mainly family-
oriented people and are working professionals in Delhi, Mumbai, Pune, Bengaluru, Hyderabad etc.

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Research Objectives

Main research objectives are outlined as below:

1. To analyze the buying behavior of customers while purchasing SUVs.

REVIEW OF LITERATURE

Market overview: -

Despite the downtrend in overall car sales for the past few months, SUV segment is booming and
growing at a steady rate. In India, SUV market is around 28% of the total car market. This number
goes up to 40% market share when both SUVs and MUVs (multi utility vehicles) are clubbed together.
This segment, with its price ranging from Rs. 9 lakh- Rs. 1.5 crore and is growing at approximately
16% annually with sales of around 7,00,000 units in 2019.

Study on Consumer Perception: -

The main factors which influence customers’ buying behavior of SUVs are discussed in detail below.
Basically, they are divided into buyer and vehicle factors.

Internal (Buyer) factors are those traits of the buyer, like lifestyle and attitude, which persuades him
to buy an SUV. External (Vehicle) factors are those properties and features of an SUV which drive
customer’s purchase decision. Price of an SUV, design, space and off-road capability are few of the
external factors.

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Buyer factors:

Attitude:

Attitude of the person plays a major role in influencing his/her decision in buying SUVs. For e.g.
those who enjoy travelling are more likely to buy SUVs or sedans. Those who want to commute to
office on a daily basis would love a small car or sedan. People who have freedom to travel anywhere
with unlimited budget choose to buy SUVs or sports cars or luxury cars. Some people show concern
over environmental pollution. They do not prefer SUVs as they occupy space causing traffic jams,
burn more fuel and they obscure view of small car drivers on the road. They are most likely to buy
small cars (hatchbacks).

Personality:

The personality factors influence the car buying behavior. A study conducted over four types of
personalities supports the claim. Adventure seekers and aggressive persons would love to drive SUVs.
Calm persons and loners prefer minivans and small cars. Some believe that the SUVs project them as
more confident than peers. In such cases there is a chance that they opt for SUVs.

Lifestyle:

A study on lifestyle factors categorizes people into four types- status seekers, workaholic,
family/community oriented and frustrated. Status seekers intend to show-off to the peers or the
society. They show themselves to be different and unique. They believe SUVs and luxury cars are
status symbols and they are more likely to drive SUVs. Some status seekers, who already have a car,
buy SUVs as their second car to project a better image among peers. On the other hand, frustrated
people are less likely to drive SUVs and prefer small cars. Family oriented people rarely consider
SUVs, though their main requirement is a spacious car due to budget constraints and they might end
up buying a minivan.

Demographics:

The most important factors that define car buying behavior are based on demographics.

Age: The age factor plays pivotal role in this. The studies show that the SUVs are preferred by younger
people. Normally, people in the age group of 25- 40 form the major part of SUV customers, while this
goes up to 50 years for MUVs. Older people above 50 years prefer small cars or luxury cars, depending
on their income level.

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Sex: It is a clear differentiating factor of SUV buyers. Most of the customers are males in this segment.
Men are more aggressive and prefer flashy things compared to women. Though the trend is slowly
changing, males still form the major chunk of SUV buyers and users. Females do not like to buy SUVs
because they feel SUVs are for males as depicted by promotions as well and they prefer small cars or
sedans

Education: SUV owners overrepresented among highly educated people. Education has positive
association with types of vehicles. Hence, it plays a minor role in influencing the buyer’s decision

Income levels: Buying an SUV or a luxury car is a characteristic indication of high income and
lifestyles. The individuals with higher household incomes are more likely to choose SUVs and luxury
cars. As already mentioned, few people with high incomes buy an SUV as their second car to use it
for particular occasions such as weekend drives. Income is positively associated with the purchasing
behavior of luxury cars and SUVs.

Occupation and Marital Status: Occupation and marital status play a negligent role in decision
making of an SUV buyer. It’s the need or lifestyle more than the occupation and marital status that
drives the behavior of customers. Some cases of occupation, for e.g. politicians prefer an SUV over
any type of car.

Size of the family: Size of the family is a very great influencer. Since SUVs come with more seating
and luggage space, families with more people would prefer SUVs. It is found that the SUV driver
group has higher proportion in larger households with children. Children sometimes influence parent’s
choice in buying SUV as they are more spacious and have more glass area that makes them enjoy the
surroundings while travelling

Decision problem: -

Our decision problem is to study the consumer buying behavior while purchasing SUVs (in general)
by identifying the importance assigned to various attributes (features) while selecting a SUV.

The problem also includes carrying out factor analysis to identify the salient features and cluster
analysis to identify the right customer profiles for SUV manufactures to target in future, to boost their
sales

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Addressing Survey Issues and Selecting Survey Method: -

William M.K. Trochim’s study examines multiple issues that must be considered when deciding a
proper survey method. The first issue discussed is population issues. Some of the various factors
include whether or not the population can be counted, literacy issues, language barriers, and most
importantly whether or not the respondents will cooperate (Trochim, 2006). Many people have very
busy schedules or simply do not want to partake in a survey. Furthermore, some surveys try to examine
controversial subjects and respondents don’t feel comfortable helping out with the research. The final
aspect of population issues is geography. Some survey requires the study to examine a wide
geographic range, which makes proper findings less feasible (Trochim, 2006).

The next important survey aspect to consider are issues with the questions that will be asked. It is
important to decide what types of questions are to be asked, how complex they will be, and whether
or not screening questions will be needed (Trochim, 2006).

The next issue is one that every survey administers attempts to avoid, bias issues. A main concern for
many people is standing out socially. No respondent wants to be embarrassed, feel unintelligent, etc.
so they are often tempted to lie (Trochim, 2006). This is often more of an issue when delivering
surveys face-to-face. Trochim explains some tactics to approaching a face-face survey. For instance,
an interviewer may pretend to listen less attentively for questions that could potentially put the
respondent in an awkward position. Furthermore, they could avoid asking the question all together
(Trochim, 2006).

This leads into the discussion of deciding what form of survey to conduct. Surveys can be broadly
divided into two main categories, questionnaires and interviews (Sincero 2012). Questionnaires
generally contain close-ended questions and can be both self and group administered. Self-
administered tests are often referred to as mail survey. However, mail surveys generally don’t result
in the best response rate so many surveyors now utilize web survey resources (Sincero 2012).
Questionnaires are often regarded as best for conducting consumer research but presents more limited
responses compared to interviews (Sincero 2012).

Clearly, interviews are a much more personal form of interviewing. Different forms of interviewing
include phone interviews, face-to-face interviews, and online interviews (Sincero 2012). One main
advantage is that interviewing offers time to conduct follow up questions based on the responses
given. However, personal interviews are extremely time consuming, a common problem faced by
many surveyors (Sincero 2012).

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Survey Research on Social Networks: -

Survey research is a measurement tool that helps assess particular opinions, feelings, concerns, etc. in
various fields of study. This study utilizes survey research to examine consumer perception of
preferring to buy SUV than sedan car. Due to the fact this is a rather unexplored area of study, it is
important to take every measure possible to gain a fair population representation.

The most important part of creating a fair survey study is targeting a sample population that accurately
represents a larger population. Sampling is a very fickle form of market analysis as it is open to
selection bias through unique population demographics.

RESEARCH METHODOLOGY

Type of Research: -

Quantitative Research

As we want to understand the consumer preferences to buy SUV over to Sedan car can be understood
with figurative data analysis, hence as Quantitative method emphasize on objective measurements
and the statistical, mathematical, or numerical analysis of data collected through questionnaires and
surveys, Quantitative Method seems to be the best method.

Method of Data Collection: -

Primary Data: - Questionnaire, Observations

Research Hypothesis: -

Null Hypothesis (Ho): There is no significant impact of factors (under study) on consumer buying
behavior (towards brand).

Alternate Hypothesis (Ha): There is significant impact of factors (under study) on consumer buying
behavior (towards brand).

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Data collection: -

Through a quantitative survey (by floating a structured questionnaire - consisting of mostly close
ended questions), we tried to obtain the primary data from both the existing and potential SUV buyers
which is analyzed to answer our decision problem. We aimed to get at least 33 responses after
discarding errors that arise due to incomplete responses, etc. This data will be analyzed to develop a
profile a typical customers’ requirements and expectations.

DATA ANALYSIS

The survey was conducted to assess different attributes of customers that influence the SUV purchase
decision. The list of attributes is mentioned below:

1. Profession
2. Marital status
3. Age
4. Salary range
5. Education
6. Personality
7. Purpose
8. Utilization of vehicle
9. Type of vacations
10. Hobbies

Gap Analysis

Analysis of importance:

The importance analysis revealed all the 17 attributes were considered important by the respondents
while making a decision to purchase a SUV.

Factor analysis:

Factor Analysis is performed on the independent variables to club the highly correlated variables into
a single factor. Factors are linear combination of one or more independent variables in the group
sharing same theme. For this project, factor analysis is done using SPSS software. Number of variables
influencing the purchasing decision of the buyer in buying SUV is 10.

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Test 1: Profession vs. car choice:

Inference: -

We can infer that that people who are in full time employment having steady income prefer buying
SUV more as they have more disposable income to spend on buying SUV car and hence will be our
target customer segment. From this we can also conclude that, cost of SUVs is not a significant
because various options available to customers starting from Rs. 9 lakhs.

Test 2: Already a SUV owner or aspirant to buy SUV or to upgrade to SUV?

Inference: -

Based on our survey, we can conclude that majority people do not own SUV currently, but they are
aspirant to upgrade their car and go to SUV segment. There could be many people who do not own
car but when it comes to buying decision, they prefer to go with SUV purchase.

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Test 3: Spending time with family

Inference: -

Most of the time, people prefer to go on a long vacation with family. If road travel is preferred,
customers would like to have big-sized car especially 7-seater to that many family members can
accommodate and for this purpose, SUVs are the most suitable vehicles.

Test 4: Income levels

Inference: -

Income levels of customer plays an extremely important role while deciding which type of car to buy.
As per our survey responses, people who is having annual salary up to Rs. 20 lakhs would certainly
go for buying SUV.

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 CONCLUSION

Following conclusions can be drawn from the project study.

1. From the gap analysis, it is evident that customers consider all 10 features as significantly
important while making a SUV buying decision.

2. From the factor analysis, all the 10 attributes are grouped into 4 salient factors.

3. Part-time employees, people running own business and people with household income
greater than Rs. 20 Lakhs are less significant in purchasing SUVs.

4. Rest factors found extremely significant in influencing the SUV purchase decision.

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 REFERENCES CITED

 Autocar Pro New Desk, 13 April 2017

 Darla Sravan, Sampathrushi K, Vijay Kumar Sarakamu and Purba H. Rao (2019)

 Ketan Thakkar and Ashutosh Shyam, ET Bureau (2019), ‘Consumer Purchase Decision’

 Nishant Parekh, 5 May 2018, Autocar Sales Analysis

 T E Narasimhan, 2 June 2019, ‘Utility vehicles array in auto market as India’s aspirations
rise’,

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 APPENDIX

Questionnaire: -

Survey on Increase in preference of

1. Email address *

2. Name

3. Name

4. What describes best about your profession

Mark only one oval.

Full time employee

Part time employee

Own business

Home maker

On contract

Student

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5. Marital status?

Mark only one oval.

Single

Married

Married with children

6. Age

7. Salary range

Check all that apply.

5-10 lacs
10-20 lacs
20-30 lacs
40-50 lacs
above 50 lacs

8. What is your highest level of education

Mark only one

Less than 12th

Graduate

Post graduate

Post Doc
9. Do you own a SUV?

Mark only one oval.

Yes

No

10. What type of personality you have?

Mark only one oval.

Calm

Aggressive

11. What would you do given a long vacation?

Mark only one oval.

Adventure trip

Family Trip

Spend time at home

12. Hobbies

Mark only one oval.

long drive

Shopping

Reading

Gardening

Sports
13. Which type of car you prefer for long drive?

Mark only one oval.

hatch back

sedan

SUV

MUV

14. Which type of car you love to buy in future as Aspirational target?

Mark only one oval.

Hatch back

Sedan

SUV

MUV

15. Which type of car you prefer for family trip

Mark only one oval.

Hatch back

Sedan

SUV

MUV