LITERATUREVIEW ON Consumer loyalty towards automobile PREPARED BY ROLL NO.

61-70 ACADEMIC YEAR: 2010-2011

GUIDED BY PROF. HARESH VAISHNANI

FOR PARTIAL FULFILLMENT OF MBA (SEM-II) SUBMITTED TO SAURASHTRA UNIVERSITY RAJKOT

SMT. R. D. GARDI DEPARTMENT OF BUSINESS MANAGEMENT RAJKOT

Introduction
The Indian economy has grown at an annual rate of more than 8% over the last five years and the industrial production has made an outstanding contribution to this growth. Auto industry was licensed, controlled and restricted in the early years of independent India and had a limited contribution to the economy. The industry currently contributes about 5% of the GDP and it is targeted to grow five fold by 2016 and account for over 10% of Indias GDP. Over a period of more than two decades the Indian Automobile industry has been driving its own growth through phases. The entry of Suzuki Corporation in Indian passenger car manufacturing is often pointed as the first sign of India turning to a market economy. Since then the automobile sector witnessed rapid growth year after year. By late-90's the industry reached self reliance in engine and component manufacturing from the status of large scale importer. With the Indian middle class earning higher per capita income, more people are ready to own private vehicles including cars and two-wheelers. Product movements and manned services have boosted in the sales of medium and sized commercial vehicles for passenger and goods transport. Side by side with fresh vehicle sales growth, the automotive components sector has witnessed big growth. The domestic auto components consumption has crossed rupees 9000 crores and an export of one half size of this figure. The key players in the automobile industry are- Hyundai motors, maruti Suzuki, honda motors, Toyota motors, ford motors, etc. The Indian automobile industry is going through a phase of rapid change and high growth. With new projects coming up on a regular basis, the industry is undergoing technological change. The major players are expanding their plants and focusing on mass customization, mass production, etc. The Government of India has liberalized the foreign exchange and equity regulations and has also reduced the tariff on imports, contributing significantly to the growth of the sector. Having firmly established its presence in the domestic markets, the Indian automobile sector is now penetrating the international arena. Vehicle exports from India are at their highest levels.

Various perspectives of brand loyalty have been studied by many marketers and researchers. Contributions of academicians towards brand loyalty are discussed below : 1. Tucker (1964) reported that there was growth of brand loyalty even in a setting where there was no prior consumer's knowledge about any of the available brands. 2. Frank (1967) reviewed brand loyalty and concluded that the results of brand loyalty is not encouraging and the responses of loyal buyers were found to be significantly different from those of non-loyal buyers to new brands being tried. 3. Livesey (1973) examined the concept of brand loyalty with regard to the television rental market. He investigated the underlying determinants of consumer behaviour in order to ascertain the market better. Finally, he concluded that the determinants of brand loyalty could be an important factor in relation to facing competition for marketers in service industry. 4. Jacoby and Kyner (1973) viewed brand loyalty as a multidimensional construct involving attitudinal components and as a subset of repeat purchase behaviour. 5. Jacoby and Chestnut (1978) used the terms 'stochastic' and 'deterministic' to label the alternative views of cognitive and behavioural brand loyalties.

6. Brand loyalty is the strength of the relationship between the relative attitude towards a brand and patronage behavior (Dick and Basu, 1994).

7. A consumer's attitude towards a brand is a multidimensional construct that relies upon an affective, cognitive and co native component (Oliver, 1999). The cognitive component refers to particular knowledge about that brand. The affective component is concerned with (positive/negative) emotions that consumers have toward the brand. The conative component embeds consumers' behavioral disposition or an intention to buy the brand. Every marketer makes efforts to create customer delight by satisfying its customer in the best possible way. This is the only strategy to maintain brand loyalty among the customers. The automobile industry competes within the industry itself through the distinctive factors it owns that attracts customers. The above analysis bought us in contact with the insights of the factors which might prove to be fruitful for an automobile industry and improve the brands loyalty. The few factors that were revealed as responsible for brand preference are : Accessibility of the brand Efficiency of the automobile Advertisement and promotional efforts made Designing and structure (both internal and external) Economic condition of a country Purchasing power of customers Distinctiveness of the brand

Each brand of car needs to improve on these factors so as to improve their image in the eyes of the customers. There must be steps undertaken to make the brand easily available to the customer so that the customer doesnt have to make special efforts to locate the brand. Difficulty in accessing the brand may lead to reduced sales. There must be special attention taken to make the car fuel efficient to ensure the customer smooth and comfortable drive. Needs of those customers who love speed should also be taken care of. A brand will be made legitimate to the customers through various advertisement campaigns. So that the features, availability and quality of the brand may be made known to the buyers, before they decide on to make a purchase. The more a product is promoted the more a customer remembers about the brand and in this way the brand gains popularity. The car should have distinctive features to make it a unique brand to be purchased. Also this gives the automobile maker the monopoly power to some extent (in terms of charging prices). Only a distinct feature can make a brand stand out in such a competitive market. The interior designing and exterior designing could be the places through which such distinct identity could be given to a car. People should love the car when they are inside it. After sale services along with the positive behavior of employees may prove to be adding on to the distinctive feature to the brand. Also when the economy is in recession the brand preference of individuals may change because they couldnt afford the brand in such situations, the sales may decrease and customers may no longer be brand loyal. In such situations the marketer should decide on price change to suit the purchasing power of its customers. There should be availability of cars for all types of family sizes and for all income levels in a brand. Thus, an auto car manufacturing company may consider the above analyses and the various suggestions while deciding on the various marketing and distribution strategies. Creating customer loyalty towards a brand is a tedious task but if undertaken with a deep insight may prove to be a delight for the company.

RESEARCH PAPER 1 By Muhammad Shafiq Gul1*, Dr Farzand Ali Jan** Muhammad Shafique Gul, Lecturer COMSAT
**

. Dr Farzand Ali Jan, Director IBMS, Agriculture University, Peshawar

Dr Qadar Bakhsh Baloch, Islamia College University, Peshawar. qbuzdar@yahoo.com

Introduction
Automotive industry in Pakistan has shown a glooming era in recent years. These trends have necessitated the industry to customize their process for developing brand image and loyalty. Purchasing a car is a complex buying behavior phenomena in consumer purchasing decision making process. In the automotive industry, global consolidation, flat-to-depressed vehicle demand, declining loyalty, and overcapacity issues are leading to fierce competition that is resulting in lower prices and eroding profit margins. Automotive manufacturers are scrambling to offer more features at lower costs and coupling them with the most attractive financing options offered to consumers in years. Likewise, consumers are better informed than ever before and in a much more powerful negotiating position. Furthermore, theyve become accustomed to quick results and individualized attention, thanks in part to the immediacy the internet has provoked in other industries. Abstract This study was conducted to determine the level of brand loyalty and image, to examine interactive role of those factors that determines brand image and loyalty, to determine level of brand loyalty and image of Toyota car users and to suggest measures for developing brand loyalty in district Peshawar. The data was collected through questionnaire from a sample of 100 Toyota car users that were selected through convenience sampling method. The results were analyzed on the basis of Chi-Square (x2) test to determine the differences among the group factors. The study on the basis of the results of the test statistics showed that Brand Image and Loyalty was highly insignificant with age group, level of education, point of
1

purchase and repeat purchase duration. While it was observed by the results of the test statistics that brand image and loyalty was highly significant with brand choice of Toyota, level of satisfaction of the use of product, different feature of the product, coloring scheme of Toyota brand, the repeat purchase frequency of the product in contact and different societal factors associated with the product. The study recommended that the Toyota if want to remain on the top is required to adopt a lean and green marketing strategy against its main competitors, Toyota management should focus on consumer satisfaction, Toyota must beware of arrogance. The study also recommends that for Toyota, it is important to be able to establish supply chain management systems. Objectives of the Study: To explore factors for brand loyalty and image. To determine level of brand loyalty and image of Toyota Car users. To examine interactive role of those factors that determines brand image and loyalty. To suggest measures for developing brand loyalty.

Scope of the Study:

This research focused on respondents who were passenger car users. The research provided fruitful information about Toyota car usage, acquisition and brand preference to Toyota customers.

Research Methodology
This survey research has utilized both primary and secondary data and information from different sources including Toyota Corporation, Text books, magazines, journals and websites about different variables of the study. This research uses questionnaires for finding the information obtained from the respondents in the sampling unit.

Age Group: The respondents were grouped into different age categories who participated in the survey the relationship of age with brand loyalty is presented in Table no. 1. Table-1: Brand image, Loyalty and Age Group Preference Range Perfect Excellent Very Good Age Group 20-29 13 23 10 30-39 6 7 6 3 22 P-Value = 0.563 40-49 5 5 8 1 19 50 Plus 1 6 2 1 10 Total 25 41 26 8 100

Good 3 Total 49 (Source: Field Survey) X2 = 7.713 d.f = 9

Educational Level: Educational level was included as a factor that might play a role in determining a brand image and loyalty. However, the results as given in Table 2; reveal that there is no significant relationship between these attributes. Table-2: Brand Image, Loyalty and Educational Level

reference Range

Education Level (Years)

To

Perfect Excellent Very Good Good Total

10 2 5 3 0 10

12 0 1 1 1 3

14 16 4 1 12 6 6 2 3 1 25 19
d.f = 12

above 16 1 6 2 1 10 1

25 41 26 8 00

(Source: Field Survey) X2 = 11.766

P-Value = 0.465

Likeness of the Brand:

The respondents were exposed to the question regarding the

specific brand that they like and they like to purchase. The results showed that users significantly prefer to purchase Toyota as compared to Honda, Suzuki, Nissan & others. The chi-Square value was 22.995 while P-Value was 0.028. The results are presented in the following table. Table-5: Brand Image & Brand Loyalty Preferenc e Range Perfect Excellent Very Good Automobile currently in use Toyota Honda Suzuki Nissan 18 35 19 6 4 3 1 3 1 2 7 0 0 0 0 0 Others 0 0 1 0 1 Total 25 42 24 9 100

3 4 Good Total 75 17 (Source: Field Survey) X2 = 22.995 d.f = 12

P-Value =.028

Research paper - 2

Comparative study on customer satisfaction for Maruti Suzuki car Prepared by: Jaya Prakash
Introduction: She analyzed the services provided by Maruti Suzuki India Ltd. in comparison with TATA motors in Hassan City based on customer perception both outlets have got their own brand image and customers. Through the service which they are providing to their customers we can know how both are competing. Need for Research: As we all know automotive sector is challenging industry, by providing the different services to their regular customers they can build the customer relationship and increase their business. Also need to study the period from when they are using their products in Hassan city and features offered by them like comfort, safety, space, maintenance, offers and discounts and brand loyalty. Shewant to know what the current services are provided by Maruti Suzuki India Ltd. and TATA motors in Hassan City. OBJECTIVES To know what are the different services provided to the customers of Hassan. To know the perception of customers towards Maruti and TATA motors in Hassan To know whether the customer is satisfied with the services provided. To know whether people preference varies with the services provided. To know about the marketing strategies adopted by them. To know whether they are successful in attracting the customers by marketing services adopted by them.

RESEARCH METHODOLOGY
The objective of the present study can be accomplished by conducting a systematic market research. As marketing research is a systematic and formalized process, it follows a certain sequence of research actions. Formulating the problem and developing objectives of research Problem formulation based on hypothesis. The objective of research is to collect relevant information from the targeted sample and use that for further study. Hypothesis Null

Hypothesis: Hassan customers are not satisfied with the services provided by maruti rather than TATA motors Alternate Hypothesis: Hassan customers are more satisfied with the services provided by Maruti rather than TATA motors Designing the research plan the design of the research plan determines the tools and techniques that are employed for conducting marketing research. The present study involves descriptive research as the problem is clearly defined Sources of data for a research can be collected from two sources Primary data Secondary data Primary data is first hand data collected from respondents. collect information regarding different services provided by outlet from individual customer using questionnaire.Secondary data is collected from already available sources like published papers, journals, magazines etc... Collect secondary data regarding what are the other services they can provide to customers. Data collection techniques Primary data is collected by surveying the sampling units or the elements of the sampling units. Survey will be conducted with the use of structured questionnaire. The questionnaires will contain both open-ended and close-ended questions.

SAMPLING PLAN

Sampling plan Interview 120 customers (60 of each outlet) through the questionnaire to know what kinds of services outlets currently providing. Sample will be selected from the population of Hassan using the Simple Random Method Questionnaire will be prepared and used, which meets the requirements of project title for conducting survey .Survey will be conducted through Personal Interview. Analyze the collected information, this involves converting raw data into useful information. It involves tabulation of data and using statistical measures on them for developing frequency distributions and calculating the averages and dispersions Report research findings This phase will mark the culmination of the marketing research effort. The report with the research findings is a formal written document. The research findings and personal experience will be used to propose recommendations. RESEARCH REVIEW Maruti :Out of 100 respondents surveyed ,54% are having petrol version,26% using diesel version and 20% using petrol with LPG kit. Out of 100 respondents surveyed ,39% of respondents are highly satisfied with the interaction of sales person,49% are moderately satisfied ,12% are satisfied and no one with dissatisfied with the sales person interaction. Out of 100 respondents surveyed, 89% of respondents are highly satisfied with the vehicle and 11% seems to be dissatisfied. Out of 100 respondents surveyed, 53% of respondents are of the opinion that fuel efficiency of Maruti vehicle is excellent, 37% as good and only about 10% showing it as fair. Out of 100 respondents surveyed, 51% of respondents are of the opinion that durability of Maruti vehicle is excellent, 48% as good and only about 11% showing it as fair. Out of 100 respondents surveyed, 44% of respondents are of the opinion that style of Maruti vehicle is excellent, 53% as good and only about 3% showing it as fair.

Out of 100 respondents surveyed, 63% of respondents are satisfied with the offers provided by Maruti. Out of 100 respondents surveyed, 61% of respondents are satisfied with the service stations of Maruti. Out of 100 respondents surveyed, 52% of respondents got to know about Maruti by television, 32% by means of newspaper and remaining 16% by means of word of mouth. Out of 100 respondents surveyed ,89% of respondents are of the opinion that services assured to the vehicle during purchase time are fulfilled after purchase. Out of 100 respondents surveyed, 77% of respondents are satisfied with the EMI options of Maruti. Maruti :Out of 100 respondents surveyed ,36% are comfortable with the interest percentage for loan Option . Out of 100 respondents surveyed ,13% of respondents purchase the vehicle because of personal motive and 44% by friends 33% by advertisements and 10% by the influence of the person who is already using the car. CONCLUSION: According to the research it can be concluded that Maruti showroom has gained positive opinion of majority of the customers It is mainly because of convenient options extended by the dealer of Maruti showroom and efficient models offered by the company apart from efficient sales personnel interaction. Maruti has been in the first position in automotive sector since its inception and if it includes minor improvements, it will sustain its upper hand in forthcoming future.

Research paper 3

Preliminary research on customer satisfaction models in Taiwan: A case study from the automobile industry
a

The Center for General Education, Taipei College of Maritime Technology, No. 212, Department of Food & Beverage Management, Taipei College of Maritime Department of Technology Management, Chung-Hua University, No. 707, Sec. 2, Department of Food Technology and Marketing Management, Taipei College of

Yen Ping N. Rd., Sec. 9, Taipei, Taiwan, ROC

b

Technology, No. 212, Sec. 9, Yen Ping N, Taipei 111, Taiwan, ROC
c

WuFu Rd., HsinChu 300, Taiwan, ROC

d

Maritime Technology, No. 212, Yen Ping N. Rd., Sec. 9, Taipei, Taiwan, ROC

Abstract For our research we applied the TCSI model to the automobile industry in Taiwan. The subjects of our research were consumers of new cars in Taiwan during the years 2006 2008. According to statistics provided by the Taiwan Transportation Vehicle Manufacturers Association (TTVMA) Toyota, Ford, Nissan, and Mitsubishi Motors made up for 79% of all cars sold in Taiwan from January through June, 2008. Questionnaires were issued randomly to four companies. We used structural equation modeling (SEM) to manifest the models suitability and develop a standard questionnaire to obtain the customers opinions. The conclusions reached provide valuable insight into the companies and industry and can help them to develop strategies to increase their competitiveness.

Research paper 4 Consumer Behavior of Luxury Automobiles: A Comparative Study between Thai and UK Customers Perceptions
JAKRAPAN ANURIT KARIN NEWMAN BAL CHANSARKAR Total worldwide sales of premium luxury and entry luxury saloons and sports cars are of the order of 1.5 million units a year (Scheele, 1995: 190). The major luxury markets today are the USA, Germany, UK and Japan. The 21.1 billion UK new car market competes with France and Italy, to be the second biggest in Europe behind Germany (Harbor, 1997: 7,22). The new registration of luxury marques cars in 1997 in UK alone was 154,506 units (MAVEL, 1997: 59). In other markets, especially in South East Asia there are, of course, significant sales of luxury cars. However, these are limited to total volume either by the overall industry size or by local market conditions and preferences. Accordingly, the luxury car market overall is currently undertaking a social change with luxury brands seeming less remote, less different, and less exclusive with the quality of life improving. As a result, increasing competition between makes has intensified the importance of brand identity. CONSUMER BEHAVIOUR OF LUXURY AUTOMOBILES CUSTOMERS: Most current owners of luxury cars tend to have purchased a car previously, the customer has potentially developed an attitude toward it. Here, an attitude becomes an evaluating judgment (desire or not desire) based on prior or present experience such as previous satisfaction from dealers or products and services (after sales and warranty), driving experience, and socio-economic status of customers. It is also possible that an attitude can be developed based on prior information without experience, as when consumers develop preferences or biases for or against brands based on the brands images in the marketplace. This also depends largely on purchasing power of individual customers. Customers may have a favorable attitude towards some manufacturers luxury cars, but may lack the ability due to insufficient purchasing power or willingness to take buying action. On the other hand,

luxury or lower luxury (lower-priced) manufacturers cars may be neglected by customers who have high purchasing power (or over-purchasing power in this sense). For example, most buyers (with high, medium, or low income) tend to have a preferable attitude towards some manufacturers luxury cars such as Aston Martin, Bentley, Ferrari, Porsche, and RollsRoyce, though the majority of them might not even have had a test drive before. The difference is that customers with low to medium income may still also anticipate the quality of smaller sized cars of manufacturers from the lower segments such as Fiat, Ford, Peugeot, and Vauxhall, as these cars are affordable to them. In other words, cars from lower segments have the meaning of reality to them. In contrast, the better-off buyers will only appreciate expensive cars from luxury marques and may A3 or BMW 3 Series Compact) as their choices. Accordingly, if one is interested in predicting buyer behaviour of luxury automobiles, an assessment of potential buyer attitude towards the car is needed. To further specify the definition of customer attitude towards luxury cars, a set of attitude variables which potential buyers of luxury cars might hold was developed in discussion with luxury car dealers (Audi, Jaguar, Mercedes, Lexus, and Volvo) at the London Motor Show 97 at Earls Court Exhibition. The following variables were identified: (1) reliability (2) quality (3) durability (4) safety (5) security (6) performance (7) efficiency (8) technology (9) handling (10) value (11) style (12) comfort (13) prestige (14) status, and (15) visual impact. The first nine variables are in the objective category. are in the subjective category. Abstract The logical extension of this hypothesis is that Mercedes will outsell BMW in countries with the same socio-economic and cultural profile. These countries may be grouped by the markets where BMW and Mercedes are best selling their products. The implication for marketing managers is that over time as these countries economy are developed, their market positions.