CUSTOMER SATISFACTION AMONG OWNERS OF LOCALLY

ASSEMBLED CARS

DEVELOPED BY:

MOHSIN KAZMI
(121032-017)

SUPERVISED BY:

ZAFARULLAH SIDDIQUI

A thesis submitted in partial fulfillment of the

requirements for the degree of MBA

DEPARTMENT OF MANAGEMENT SCIENCES

BAHRIA INSTITUTE OF MANAGEMENT & COMPUTER SCIENCES

BAHRIA UNIVERSITY ISLAMABAD

2004
Dedicated to my loving family and friends
 ACKNOWLEDGEMENTS

Many people have helped me in the course of this research.

I would first of all like to thank Allah for giving me
energy and strength and my parents for not only providing
me with the all important funding for this research, but
also bearing with me as I went along doing the research. I
would also like to thank Mr. Safdar Awan (Managing
Director, Toyota Islamabad Motors, Islamabad), Miss Marium
Bokhari (Team Leader Auto Loans, Standard Chartered,
Islamabad), Mr. Sohail Butt (Sunrise Autos, 6th Road,
Rawalpindi) and Mr. Faisal Rafique (Honda Pit Stop,
Islamabad). Furthermore I am most grateful to Mr.
Zafarullah Siddiqui, for his continued guidance and support
during the course of this research project. In addition, I
am most thankful to Dr. Kashif-ur-Rehman for his help and
guidance. I would also like to thank anyone whose name I
might have missed, but be assured your help and assistance
is highly appreciated. I express my gratitude to everyone.

Mohsin Kazmi
 ABSTRACT

The automobile industry is one of the fastest growing

industries in Pakistan, with many more automobile
manufacturers ready to enter the field in the near future.
The industry is providing jobs to over 100,000 skilled and
unskilled people in the country. The country is saving
almost $1 billion in foreign exchange due to the
development of the auto industry in Pakistan. However the
development benefits have not been passed down to the final
consumers.

With the implementation of the WTO agreement in 2005, where

does Pakistani car industry stand with respect to customer
satisfaction, what are its weak areas and where they need
to improve?

The main objective was to study the current scenario of

Pakistani car industry with respect to customer
satisfaction levels that they provide and try to judge
which brand is providing the highest level of customer
satisfaction.

The type of study conducted was descriptive in nature.

Sample for the study was taken from the areas of Islamabad
and Rawalpindi comprising of people owning locally
assembled cars. For this study, the only research
instrument which was used was a questionnaire designed in
such a way that it provides personal opinions about the
level of satisfaction different people have regarding
locally assembled cars. The chosen brands were Suzuki
(Baleno), Toyota (Corolla), Honda (Civic), Hyundai
(Santro), Daihatsu (Cuore) and Kia (Spectra).

According to this survey, the following classification of

cars can be made according to the customer satisfaction
levels that they offer (from highest to lowest):

2. HONDA: Average Rating 3.75

3. TOYOTA: Average Rating 3.51
4. SUZUKI: Average Rating 3.49
5. HYUNDAI: Average Rating 3.38
6. DAIHATSU: Average Rating 3.35
7. KIA: Average Rating 3.25

At the present, the auto industry seems to have a very

local and narrow thinking with only short term objectives,
placing emphasis only on making money. For the time being,
the Pakistani auto industry is in no position to either
face competition nor is willing to provide any benefits to
its customers. They are unable to meet local demand which
has resulted in selling of these cars at a premium in the
open market, which is not seen anywhere else in the world.
The companies themselves have taken a blind eye towards all
the issues, and the government seems to be helpless in
providing much needed relief to the customers.
 TABLE OF CONTENTS

TITLE PAGE NO

CHAPTER 1
INTRODUCTION...................................................................……... 1
RATIONALE OF THE PROBLEM...................................... ……... 1
PROBLEM STATEMENT…………………………………...……....2
OBJECTIVES OF THE STUDY………………………… ……... 2

CHAPTER 2
LITERATURE REVIEW…………………………………................3

CHAPTER 3
METHOD……………………………………………………………. 12
SAMPLE……………………………………………………………. 12
INSTRUMENTS AND MEASURES……………………….. ………12
PROCEDURE……………………………………………….. ………13

CHAPTER 4
RESULTS AND DISCUSSION………………………………….. 14
COMPARATIVE ANALYSIS OF QUESTIONS………… ………21

CHAPTER 5
CONCLUSIONS……………………………………………………. 27
RECOMMENDATIONS……………………………………………... 29

REFERENCES

APPENDIX
 LIST OF FIGURES

FIGURE PAGE NO

FIG 4.1: TOTAL SAMPLE: BRAND BREAK UP………………….. 14

LIST OF TABLES

TABLE PAGE NO

TABLE 4.1: RESULTS FOR TOYOTA.................................................. 15

TABLE 4.2: RESULTS FOR HONDA………………………………… 16
TABLE 4.3: RESULTS FOR SUZUKI………………………………. 17
TABLE 4.4: RESULTS FOR DAIHATSU……………………………. 18
TABLE 4.5: RESULTS FOR KIA......................................................... 19
TABLE 4.6: RESULTS FOR HYUNDAI……………………………... 20
 CHAPTER 1

INTRODUCTION
The automobile industry is one of the fastest growing
industries in Pakistan, with many more automobile
manufacturers ready to enter the field in the near future.
In Pakistan this industry lacks stability due to major
transitions from the public sector to the private sector.
In 1980 there were approximately 148,300 vehicles on the
road. The figure almost tripled to 415,500 in 1990. This
figure was further expected to double by the year 2000.
The auto industry has an estimated investment of well over
Rs.2 billion. The industry has a market capitalization of
Rs. 6.18 billion. It has declined by almost 50% over the
past three years as the total market declined by 18%. The
auto industry comprises of 1.5% of the total market
capitalization.

The industry is providing jobs to over 100,000 skilled and

unskilled people in the country. The country is saving
almost $1 billion in foreign exchange due to the
development of the auto industry in Pakistan. However the
development benefits have not been passed down to the final
consumers.

RATIONALE OF THE PROBLEM

The study is being conducted after the announcement by the
Government of Pakistan that it might allow import of cars
less then two years old to Pakistan. With the
implementation of the WTO agreement in 2005, where does
Pakistani car industry stand with respect to customer
satisfaction, what are its weak areas and where they need
to improve? Which companies are prepared to face the
challenges of the future? All this can be assessed by
having some idea about the customer satisfaction levels
provided by these car manufacturers.

This study is vital for not only understanding where each

of the selected companies stands with relation to each
other, but also important to highlight the areas which need
improvement. For the reader, this study will allow
understanding what are each company’s weaknesses and
strengths, and perhaps make a better choice for selecting a
car.

PROBLEM STATEMENT
To study the current scenario of Pakistani car industry
with respect to customer satisfaction levels that they
provide and try to judge which brand is providing the
highest level of customer satisfaction.

OBJECTIVES OF THE STUDY

The study aims to fulfill the following objectives:

• How do different consumers perceive different car

manufacturers with regards to customer satisfaction?
• Which companies offer better satisfaction to the
customers?
• Which are the areas which need improvement and can

lead to much higher customer satisfaction?

 CHAPTER 2
LITERATURE REVIEW

Pakistan auto industry started to come out of shadow with

the introduction of new producers. Since its inception,
Suzuki has been enjoying the position as market leader in
small car segment, while Honda and Toyota compete for the
high price segment of the market. Suzuki commenced
production in 1983 eyeing the small and LCV car segment,
800cc- 1000cc. The industry continued to be regulated until
early 1990's and after deregularization, major Japanese
manufacturers entered the Pakistani market to produce
locally. (Faraz Siddiqui; 2000).

Increased deletion level and entrance of local

manufacturers in auto industry is a healthy sign for the
future progress of auto industry in Pakistan. It has been
attracting investments and has the potential to attract
further investment. It is imperative to completely utilize
the production capacity in order to get the lucrative
benefits for the country as well as organization. (Salman
Khalid; 2002).

Inconsistent government policies and uncertain decisions

not only discourage foreign investment, but also create
insecurity among local manufacturers. The uncertain
policies also affect the development of local industry in
many ways. In last 10 years the auto industry has
experienced 26 policy changes and duty tariff changes. The
industry got due support due to the establishment of
Engineering Development Board but the volume of production
is still very low due to the political and economic
reasons(Waheed Altaf; 2003).

Even after extensive research in the years since Cardozo’s

(1965) classic article; researchers have yet to develop a
consensual definition of consumer satisfaction. Oliver
(1997) addresses this definitional issue by paraphrasing
the emotion literature; noting that "everyone knows what
satisfaction is until asked to give a definition. Then it
seems; nobody knows". Based on the perception that
satisfaction has been defined; most research focuses on
testing models of consumer satisfaction (Mano and Oliver;
1993; Oliver; 1993; Oliver and DeSarbo; 1988; Spreng;
MacKenzie; and Olshavsky; 1996; Tse and Wilton; 1988) while
definitional considerations have received little attention.
As Peterson and Wilson (1992) suggest; "Studies of customer
satisfaction are perhaps best characterized by their lack
of definitional and methodological standardization"

A basic definitional inconsistency is evident by the debate

of whether satisfaction is a process or an outcome (Yi;
1990). More precisely; consumer satisfaction definitions
have either emphasized an evaluation process (Fornell;
1992; Hunt; 1977; Oliver; 1981) or a response to an
evaluation process (Halstead; Hartman; and Schmidt; 1994;
Howard and Sheth; 1969; Oliver; 1997; Tse and Wilton; 1988;
Westbrook and Reilly; 1983). From a general definition
perspective; process definitions are problematic in that
there is little consistency in the satisfaction process.
From an operational perspective; process definitions are
plagued by antecedent constructs included in the conceptual
definition; thus; there is an overlap between the domains
of the determinative process constructs and the consumer
satisfaction construct.

Most definitions have favored the notion of consumer

satisfaction as a response to an evaluation process.
Specifically; there is an overriding theme of consumer
satisfaction as a summary concept (i.e.; a fulfillment
response (Oliver; 1997); affective response (Halstead;
Hartman; and Schmidt; 1994); overall evaluation (Fornell;
1992); psychological state (Howard and Sheth; 1969); global
evaluative judgment (Westbrook; 1987); summary attribute
phenomenon (Oliver; 1992); or evaluative response (Day;
1984)). However; there is disagreement concerning the
nature of this summary concept. Researchers portray
consumer satisfaction as either a cognitive response (e.g.;
Bolton and Drew; 1991; Howard and Sheth; 1969; Tse and
Wilton; 1988) or an affective response (e.g.; Cadotte;
Woodruff; and Jenkins; 1987; Halstead; Hartman; and
Schmidt; 1994; Westbrook and Reilly; 1983). Furthermore;
operational definitions may include a behavioral dimension
of satisfaction (e.g.; "I would recommend the school to
students interested in a business career." (Halstead;
Hartman; and Schmidt; 1994)); although conceptual
definitions are void of a behavioral orientation.

A final discrepancy occurs in the terms used as a

designation for this concept. Researchers have used
discrepant terms to mean satisfaction as determined by the
final user: consumer satisfaction (e.g.; Cronin and Taylor;
1992; Oliver; 1993; Spreng; MacKenzie; and Olshavsky; 1996;
Tse and Wilton; 1988; Westbrook; 1980); customer
satisfaction (e.g.; Churchill and Surprenant; 1982;
Fornell; 1992; Halstead; Hartman; and Schmidt; 1994; Smith;
Bolton; and Wagner; 1999); or simply; satisfaction (e.g.;
Kourilsky and Murray; 1981; Mittal; Kumar; and Tsiros;
1999; Oliver; 1992; Oliver and Swan; 1989). These terms are
used somewhat interchangeably; with limited; if any;
justification for the use of any particular term.

The lack of a consensus definition for satisfaction creates

three serious problems for consumer satisfaction research:
selecting an appropriate definition for a given study;
operationalizing the definition; and interpreting and
comparing empirical results. These three problems affect
the basic structure and outcomes of marketing research and
theory testing.

When discussing and testing theory it is critical to

explicate the conceptual domain. Part of this process is
defining the constructs of interest and explaining why this
conceptualization is appropriate. For constructs having a
consensus definition; this issue does not need to be
addressed in each and every study. However; if multiple
definitions for a construct exist; then researchers must
explicitly define and justify the definition selected.
Unfortunately; most satisfaction researchers do not justify
their choice of definition. In some cases; satisfaction is
not defined at all. Even if a researcher attempts to define
satisfaction; there are no clear guidelines for selecting
an appropriate definition for a given context. As a result;
the selection of a definition for satisfaction becomes
idiosyncratic.
A second problem is the development of valid measures of
satisfaction. Defining a construct’s theoretical meaning
and conceptual domain are necessary steps to developing
appropriate measures and obtaining valid results (Bollen;
1989; Churchill; 1979; Gerbing and Anderson; 1988). If the
choice of a consumer satisfaction definition; or lack
thereof; is not justified; it is unclear whether the
measures used are appropriate or valid. As Marsh and Yeung
(1999) point out; "the meaning attributed to the items and
the underlying nature of the measured . . . construct are
changed by the context within which they appear". This
problem becomes more serious as the measure becomes more
global in nature. Thus; the "chameleon effect" described by
Marsh and Yeung (1999) is rampant in satisfaction research.
Generally worded; global measures provide no guidance to
respondents or other researchers for interpreting the exact
meaning of satisfaction. In this situation; respondents
will interpret the meaning of "satisfaction" based on the
other cues including instructions; other measured
constructs; and products being assessed.

Given the lack of a clear definition or definitional

framework; developing context-specific items becomes
difficult and idiosyncratic. For example; Westbrook (1987)
defines satisfaction as a "global evaluative judgment about
product usage/consumption". This definition provides little
guidance for developing context-specific measures. Based on
this definition; satisfaction was assessed using an item
like the following: How do you feel about the product or
product usage? (I feel delighted/terrible). While this item
is consistent with the definition; Marsh and Yeung (1999)
would argue it is subject to chameleon effects. As they
note:
“We evaluate support for the chameleon effect that
hypothesizes that an open-ended (content-free) item such as
those appearing on most esteem scales (e.g.; "I feel good
about myself;" "Overall; I have a lot to be proud of;"
"Overall; I am no good") takes on the meaning of items with
which it appears. For example; if the item "I feel good
about myself" appears on a survey in which all of the other
items refer to academic situations; then respondents are
more likely to respond in terms of how they feel about
themselves academically. On the other hand; if all of the
other items on the survey refer to their physical
conditions; then respondents are more likely to respond to
the same item in terms of how they feel about themselves
physically.

Similarly; the meaning of the "delighted-terrible" question

posed above would change depending on other items and
contextual information in the study. Without a consensus
definition of satisfaction that can be used to develop
context-specific measures; the combination of explicit and
implicit (chameleon effect) inconsistencies prevents
meaningful conclusions about consumer satisfaction.

Perhaps the most serious problem caused by the lack of a

consensus definition is the inability to interpret and
compare empirical results. Peterson and Wilson (1992) note
that differences in results depend on how satisfaction was
operationalized. For example; how do expectations influence
satisfaction? It is impossible to compare results across
studies since differences in the definition and
operationalization of satisfaction will influence the role
of expectations in the model. Furthermore; expectations may
be irrelevant for the particular context in which
satisfaction is being determined. A specific concern to
managers is that uninterpretable results are essentially
results that can not provide information to make decisions.
Thus; a lack of definitional and measurement
standardization limits the degree to which generalizations
can be developed; a lack of definitional standardization
limits the degree to which results can be explained;
justified; and compared.

Without definitional explication; true satisfaction can be

elusive. A brief example may illustrate the relevance of a
standardized definition of consumer satisfaction. Two
automobile purchasers respond to the same seven-point
satisfied/dissatisfied scale. Consumer A marks a '5' and
Consumer B marks a '7.' Most likely; the interpretation is
that Consumer B is more satisfied than Consumer A. Given
only this much information; however; it is virtually
impossible to interpret what these consumers mean from the
number that they have marked. How they define satisfaction
is integral to interpreting their response.

In sum; it becomes impossible to create a unified;

comparable body of research on consumer satisfaction if
researchers do not agree on what satisfaction is and cannot
base measurement decisions on a consensual definition.
Furthermore; it is imperative to define and measure
satisfaction according to consumers’ views of the relevant
satisfaction situation. For these and other reasons; Yi
(1990) concludes; "For the field of consumer satisfaction
to develop further; a clear definition of consumer
satisfaction is needed"

The literature has been lax in distinguishing between

consumer satisfaction; customer satisfaction; and
satisfaction (see Cadotte; Woodruff; and Jenkins ;1987
versus Churchill and Surprenant ;1982 or Spreng; MacKenzie;
and Olshavsky ;1996 versus Smith; Bolton; and Wagner ;1999
for examples). In other cases; neither consumer nor
customer is used to qualify the term; satisfaction (e.g.;
Gardial et al. 1994; Mittal; Kumar; and Tsiros; 1999). All
of these studies; however; tend to be focused on the final
user.

Consistent with the literature; I will define the consumer

as the ultimate user of the product. Although our focus is
on the end user of the product; we recognize that; in some
situations; the end user is also the purchaser. It is
evident that the concept of consumer satisfaction applies
in many marketing contexts: purchase (e.g.; Swan and
Oliver; 1985); consumption (e.g.; Cadotte; Woodruff; and
Jenkins; 1987); information considered (e.g.; Spreng;
MacKenzie; and Olshavsky; 1996); and; even business
consumption (Mowen and Minor; 1998; Schiffman and Kanuk;
2000; Solomon; 1999). Thus; consumer satisfaction must be
explicitly defined to delineate the context. In this study;
consumer satisfaction pertains to the response of the end
user who may or may not be the purchaser.

There is voluminous literature on customers' satisfaction;

purchase intention and loyalty towards their vehicle brands
(Lewis; 1993, Carr; 1999, Naser; 1999, Janc; 1999). The
customers' satisfaction should be the central element of
the company mission and one of the priority objectives of
long-term customer-oriented strategy. Especially important
is to study customers' satisfaction and the firm’s services
quality in emerging market economies where such firm’s are
behaving as growth-oriented firms in the tight struggle for
obtaining a bigger market share. Understanding of client's
desire, needs and demands is an important input to the
elaboration of an efficient marketing strategy (Kotler and
Armstrong; 1991, Bovee and Thill; 1992, Brokes; 1995,
Kotler; 1997, Mudie and Cottam; 1999).

Development of relationships between the firm and the

customer is another important issue to study. Relationships
marketing and management are the core of the so-called
Nordic School of Management which is oriented to
attracting, maintaining and enhancing customer
relationships (Berry and Parasuraman; 1993, Gronroos and
Gummesson; 1985, Gronroos; 2000). The basic idea behind the
relationships marketing and management is the belief that
business relationships between participating parties create
additional value and the development of these relationships
is one of the key factors in using the market potential.

The value chain and value network concepts have been

recently introduced in the strategic management literature
to describe the value creation process of firms by
performing sets of various activities to transform certain
inputs into outputs (Stabell and Fjelstad; 1998, Coyne and
Dye; 1998, Fjelstad; 1999). These approaches base on
Porter's fundamental concept of the value chain according
to which the value chain model applies to all industries
(Porter; 1985).
 CHAPTER 3

METHOD

The type of study conducted was descriptive in nature. A

descriptive study is one which is undertaken in order to
ascertain and be able to describe the characteristics of
the variables of interest in a situation. The goal of this
study is to offer a profile or to describe relevant aspects
of the phenomena of interest to the researcher from an
individual, organizational, industry-oriented or other
perspective.

Descriptive study is one that presents the data in a

meaningful form and helps to understand the characteristics
of the group in a given situation, to think systematically
about aspects in a given situation, offers ideas for
further probe and research and helps make certain simple
decisions.

SAMPLE
Sample for the study was taken from the areas of Islamabad
and Rawalpindi comprising of people owning locally
assembled cars. Convenience sampling was used to collect
data from the chosen sample. The total sample size was 241.

INSTRUMENTS AND MEASURES

For this study, the only research instrument which was used
was a questionnaire designed in such a way that it provides
personal opinions about the level of satisfaction different
people have regarding locally assembled cars. This provided
the researcher with primary data regarding the project
report. It must be kept in mind that all the questions
carry equal weights and are assigned equal importance.

As this is a descriptive study only simple tools were

required for this research like percentages and weighted
mean.

PROCEDURE
The specially designed questionnaire was distributed among
different people who are owners of locally assembled cars
to get their opinions and asses their satisfaction with the
locally assembled cars. The chosen brands were Suzuki
(Baleno), Toyota (Corolla), Honda (Civic), Hyundai
(Santro), Daihatsu (Cuore) and Kia (Spectra).
 CHAPTER 4

RESULTS AND DISCUSSION

Total Sample: Brand Break-Up

Hyundai, 43 Toyota, 40

Kia, 36 Honda, 46

Daihatsu, 41 Suzuki, 38

(fig 4.1)

The total sample taken was 241, with the brand break-up
given in the above figure (fig 4.1). The sample was large
enough in totality and brand wise for generalizations to be
made.

The results for individual brands are given from the next
page and will be discussed afterwards.
 RESULTS FOR TOYOTA

5 4 3 2 1 Mean
QUESTIONS/RATING

Credibility of the brand 11 14 8 7 0 3.72

Suitable location of showrooms 22 13 5 0 0 4.42

Booking procedure 10 15 9 6 0 3.72

Delivery time 0 0 8 32 0 2.20

Punctuality of delivery date 2 3 9 11 15 2.15

Sales staff attitude/ competence 0 0 24 8 8 2.40

Price of the car 0 0 0 35 5 1.87

Availability of spares 16 19 5 0 0 4.27

Price of spares 17 12 11 0 0 4.15

After sales service 21 13 6 0 0 4.37

Performance of the car 12 17 11 0 0 4.02

Build Quality of the car 8 15 10 7 0 3.60

Prices of after sales services 4 10 16 10 0 3.20

Availability of colours 2 14 10 10 4 3.00

Interior Design 29 10 1 0 0 4.70

Exterior Design 13 15 12 0 0 4.02

Overall satisfaction with the car 12 19 5 4 0 3.97

TOTAL 179 189 150 130 32 3.51

(TABLE 4.1)
 RESULTS FOR HONDA

QUESTIONS/RATING 5 4 3 2 1 Mean

Credibility of the brand 25 16 5 0 0 4.43

Suitable location of showrooms 22 20 4 0 0 4.39

Booking procedure 14 18 10 4 0 3.91

Delivery time 0 12 17 10 7 2.73

Punctuality of delivery date 1 7 24 14 0 2.89

Sales staff attitude/ competence 14 32 0 0 0 4.30

Price of the car 0 6 10 14 16 2.13

Availability of spares 5 14 25 2 0 3.47

Price of spares 1 12 18 15 0 2.97

After sales service 29 14 3 0 0 4.56

Performance of the car 31 9 6 0 0 4.54

Build Quality of the car 16 18 12 0 0 4.08

Prices of after sales services 5 11 14 16 0 3.10

Availability of colours 2 17 14 10 3 3.10

Interior Design 24 18 4 0 0 4.43

Exterior Design 31 10 5 0 0 4.56

Overall satisfaction with the car 21 18 4 3 0 4.23

TOTAL 241 252 175 88 26 3.75

(TABLE 4.2)
 RESULTS FOR SUZUKI:

QUESTIONS/RATING 5 4 3 2 1 Mean

Credibility of the brand 14 16 8 0 0 4.15

Suitable location of showrooms 15 8 10 5 0 3.86

Booking procedure 19 18 1 0 0 4.47

Delivery time 12 15 7 4 0 3.92

Punctuality of delivery date 0 23 7 8 0 3.39

Sales staff attitude/ competence 1 9 18 10 0 3.02

Price of the car 0 0 15 18 5 2.26

Availability of spares 18 13 7 0 0 4.28

Price of spares 15 17 2 4 0 4.13

After sales service 7 13 8 10 0 3.44

Performance of the car 4 18 8 1 7 3.28

Build Quality of the car 2 4 5 15 12 2.18

Prices of after sales services 10 21 7 0 0 4.07

Availability of colours 0 5 10 18 5 2.39

Interior Design 6 8 11 13 0 3.18

Exterior Design 5 6 13 14 0 3.05

Overall satisfaction with the car 7 9 10 8 4 3.18

TOTAL 141 203 161 117 24 3.49

(TABLE 4.3)
 RESULTS FOR DAIHATSU

QUESTIONS/RATING 5 4 3 2 1 Mean

Credibility of the brand 5 8 11 16 1 3.00

Suitable location of showrooms 19 7 9 3 3 3.87

Booking procedure 10 14 17 0 0 3.82

Delivery time 7 15 13 4 2 3.51

Punctuality of delivery date 0 6 9 22 4 2.41

Sales staff attitude/ competence 2 12 18 9 0 3.17

Price of the car 9 17 9 6 0 3.70

Availability of spares 1 8 12 19 1 2.73

Price of spares 6 10 11 14 0 3.19

After sales service 14 17 10 0 0 4.09

Performance of the car 4 9 16 12 0 3.12

Build Quality of the car 17 22 2 0 0 4.36

Prices of after sales services 1 18 14 8 0 3.29

Availability of colours 9 4 7 19 2 2.97

Interior Design 4 14 12 11 0 3.26

Exterior Design 7 18 15 1 0 3.75

Overall satisfaction with the car 16 8 10 7 0 3.80

TOTAL 131 207 195 151 13 3.41

(TABLE 4.4)
 RESULTS FOR KIA

QUESTIONS/RATING 5 4 3 2 1 Mean

Credibility of the brand 0 4 15 17 0 2.63

Suitable location of showrooms 9 12 8 7 0 3.63

Booking procedure 17 14 4 1 0 4.30

Delivery time 12 15 9 0 0 4.08

Punctuality of delivery date 7 10 13 6 0 3.50

Sales staff attitude/ competence 0 12 10 8 6 2.77

Price of the car 0 0 9 15 12 1.91

Availability of spares 2 5 17 8 4 2.80

Price of spares 1 4 9 18 4 2.44

After sales service 5 9 16 6 0 3.36

Performance of the car 0 8 21 7 0 3.02

Build Quality of the car 7 11 12 6 0 3.52

Prices of after sales services 9 10 17 0 0 3.77

Availability of colours 5 14 7 10 0 3.38

Interior Design 10 9 15 2 0 3.75

Exterior Design 6 13 17 0 0 3.69

Overall satisfaction with the car 2 6 13 10 5 2.72

TOTAL 92 156 212 121 31 3.25

(TABLE 4.5)
 RESULTS FOR HYUNDAI

QUESTIONS/RATING 5 4 3 2 1 Mean

Credibility of the brand 2 14 18 9 0 3.20

Suitable location of showrooms 5 7 13 18 0 2.97

Booking procedure 12 21 10 0 0 4.04

Delivery time 13 17 12 1 0 3.97

Punctuality of delivery date 4 8 17 14 0 3.04

Sales staff attitude/ competence 9 2 11 16 5 2.86

Price of the car 2 9 22 7 3 3.00

Availability of spares 6 4 17 15 1 2.97

Price of spares 12 4 9 15 3 3.16

After sales service 21 14 8 0 0 4.30

Performance of the car 10 17 10 6 0 3.72

Build Quality of the car 4 14 20 5 0 3.39

Prices of after sales services 8 9 16 10 0 3.34

Availability of colours 10 18 12 3 0 3.81

Interior Design 8 10 11 9 5 3.16

Exterior Design 6 3 24 7 3 3.04

Overall satisfaction with the car 7 12 14 10 0 3.37

TOTAL 139 183 244 145 20 3.38

(TABLE 4.6)

COMPARATIVE ANALYSIS OF QUESTIONS

1. Credibility of the brand

Credibility is defined as “The quality of being

plausible, believable, dependable, or worthy of
confidence”. As far as the credibility of the brand was
concerned, the customers of HONDA seemed to believe it
had the highest and gave it a high rating of 4.43. Second
highest was given to SUZUKI which also got a high 4.15
while TOYOTA came surprisingly third with 3.72. The
lowest credibility was attributed to KIA which got a low
rating of just 2.63 out of a possible 5.

2. Suitable location of showrooms

Suitable distribution points, in this case showrooms, are

essential for effective sales plan of any organization.
For this purpose, the most effective or desired location
was awarded to TOYOTA with a high rating of 4.42 with
HONDA not so far behind with 4.39. The lowest rating was
given to HYUNDAI with a low 2.97.

3. Booking Procedure

The ease with which one can book their orders is of much
importance. Minimum hassle, minimum paperwork, minimum
effort and least bother for a customer are just some of
the elements which can please a genuine buyer. The
highest rating in this question was given to SUZUKI with
a high rating of 4.47 with KIA not so far behind with a
4.30. The minimum rating was given to TOYOTA with a
rating of 3.72.

4. Delivery Time

The time between the actual order and delivery of a

product should be minimal, as longer waiting times can
turn away customers and even result in losing business to
opposition. The “winner” in this all important question
is KIA with a rating of 4.08 while the “giants” TOYOTA
and HONDA got the least ratings of 2.20 and 2.73
respectively.

5. Punctuality of delivery date

Punctuality can simply be defined as “being on time”. The

usual saying of “promises are meant to be broken” cannot
to applied to first-class businesses. Unfortunately,
almost all the chosen brands got a low rating in this
regard. Here the highest rating was given to KIA with a
3.50, while TOYOTA and DAIHATSU got an embarrassing
rating of 2.15 and 2.41 respectively.

6. Sales staff attitude and competence

The importance of sales staff and their competence can

never be understated. They are the people who are in
direct interaction with the customers, and they are the
people who can make or break a sale. Here the highest
rating of 4.30 was given to HONDA while the lowest was
given to TOYOTA with another lower rating of 2.40.
7. Price of the car

Price is an important element in a marketing plan. In a

price-sensitive country such as ours, price can be the
deciding factor in choosing a brand. Customers were of
the opinion that DAIHATSU was a good deal in its price,
with a rating of 3.70. The rest of the brands did not get
a rating of higher than 3, with the lowest rating given
to none other than TOYOTA with a 1.87 and HONDA did not
do any better with a rating of 2.13.

8. Availability of spares

A good distribution network of spares is an essential

element of after sales services, especially when cars are
in discussion. It was a close race between TOYOTA and
SUZUKI which got a rating of 4.27 and 4.28 respectively.
Goes on to prove that spares for these cars are easily
available and their customers are pleased with them in
this regard.

9. Price of spares

Cars require spares on a regular basis, even if they just

for the purpose of maintenance. Affordability of these
spares is an important factor. This category was awarded
to TOYOTA with a rating of 4.15 with a neck to neck
rating of 4.13 for SUZUKI. The lowest rating was given to
KIA with a 2.44 while HONDA got a low 2.97 as well.
10. After sales service

While well-built cars, trucks and construction equipment

are important to retaining customers’ brand loyalty,
readily available after-sales parts and service are even
more crucial. The quality of after sales services
determines the intent of any organization to satisfy
their customers. In many cases, the after sales services
can result in loyalty towards a specific brand. The
highest rating in this question was given to HONDA with a
rating of 4.56 while TOYOTA and HYUNDAI also got a high
rating of 4.37 AND 4.30 respectively. SUZUKI and KIA got
somewhat low ratings of 3.44 and 3.36 respectively.

11. Performance of the car

Performance of the car encircles many aspects like fuel

consumption, speed, braking quality, gear changing,
driving pleasure, etc. This was one of the most important
questions in the survey. The highest rating was given to
HONDA with a very high rating of 4.54 while TOYOTA was
second best with a rating of 4.02. KIA got the least
rating of 3.02.

12. Build quality of the car

Build quality refers to the actual physical quality of

the car. Sometimes physical quality is more important
than the actual performance, while some people say that
“what looks good, feels good”. The frontrunner in this
question was DAIHATSU with a high rating of 4.36. HONDA
and TOYOTA got a rating of 4.08 and 3.60 respectively.
13. Prices of after sales services

One cannot go on to charge very high prices to provide

after sales services. Customers look for the highest
level of services at a price at which they are happy and
can easily afford. Highest satisfaction levels in this
regard were seen in the customers of SUZUKI which got a
rating of 4.07.

14. Availability of colors

Color availability is an important factor in making a

decision about a car. One might want a red car because it
is his favorite color or blue because it is his son’s or
wife’s favorite. He might want a silver color because his
other car is also silver or he might want a white colored
car simply because it is easy to keep clean. Whatever the
reason, the color plays an important role in pleasing or
displeasing a customer. Consider the following two
examples: “I wanted a black car but it was not available
so I had to settle for silver because it was the only one
available”. “I got a car of my favorite color!!”. which
customer would be happier? Although none of the brands
provided high levels of satisfaction in this regard, the
most reliable was HYUNDAI which got a rating of 3.81.

15. Interior Design

The interior of the car should not only be designed in

such a way that it looks good, but it should also be
“smartly” designed. Convenience with looks are what
people want. The “champion” in this regard was TOYOTA
with a very high rating of 4.70 with runner up HONDA with
a 4.43. The least rating in this question was given to
HYUNDAI which got a rating of 3.16. SUZUKI also fails to
impress its customers and got a rating of 3.18.

16. Exterior design

A car which looks pleasing to the eye is one that people

mostly go for. The usual saying of “never judge a book by
its cover” does not seem to apply here. HONDA seems to be
doing a good job in this regard with a high rating of
4.56 while TOYOTA got a 4.02. HYUNDAI got the least
rating of 3.04 while SUZUKI also got a low rating of
3.05.

17. Overall satisfaction with the car

On an overall basis, how does one rank his or her car?

This question was asked to assess how one looked at his
vehicle, including the elements which might have been
missed in the individual questions. The highest rating in
this question was given to HONDA with a rating of 4.23,
implying that despite all its down points, it provides a
good level of satisfaction to its customers. The least
rating was given to KIA which only managed to bag a low
rating of 2.72.
 CHAPTER 5
CONCLUSIONS AND RECOMMENDATIONS

CONCLUSIONS

Auto industry in Pakistan has great potential to generate

investment and opportunities, and can expand its operation
to contribute to the development of the economy of the
country. In future there will be intense competition in the
market due to the likely entrance of new companies in the
market with many new products. But the imperative is the
development and progress of auto industry in order to
provide the consumers with high quality, low priced cars,
aimed at providing the customers with highest levels of
satisfaction. The following conclusions can be drawn from
this research:

1. If the average of all the questions is taken for all

the chosen brands, we will notice that they fall
between mid 3’s. The customers are not entirely happy
with what they are being offered at this time.
2. None of the companies seem to be handling all aspects
to please their customers. If they are good at one
aspect, they fail miserably at the other.
3. According to this survey, the following classification
of cars can be made according to the customer
satisfaction levels that they offer (from highest to
lowest):
i. HONDA: Average Rating 3.75
ii. TOYOTA: Average Rating 3.51
iii. SUZUKI: Average Rating 3.49
 iv. HYUNDAI: Average Rating 3.38
v. DAIHATSU: Average Rating 3.35
vi. KIA: Average Rating 3.25
We can say that, on the average, the “king” of
customer satisfaction according to this survey is
HONDA.

4. No one on the average was satisfied with the prices of

the cars, as it got low ratings from almost all the
customers of all the chosen brands.
5. The “giants” TOYOTA, HONDA and SUZUKI are not being
able to cope up with the demand, as they have long
waiting times for their cars. This was seen as a major
“dissatisfying” factor for their customers.
6. Punctuality was also a major area for concern for
almost all the companies- making promises they cant
keep.
7. The results show that the local auto industry is
lacking in some key areas, and it needs to improve on
them. This is necessary for them to compete in the
market, which is going to be much more competitive and
dynamic in the near future.
8. Even though the research concluded that HONDA is the
“winner” in this case, they still had a large number
of dissatisfied customers, which if they can satisfy,
can bring them a larger share of the total market.
9. The survey was conducted in isolation of the fact that
the Pakistani market has no real choice but to buy
from the local auto industry. If the government
decides to allow import of cars at lesser duties, the
local industry is in no position to compete against
them. It needs to improve its position, and aim
towards satisfying the local customer, so when this
customer has a real choice, he decides to buy these
cars on merit, not because he has no other choice.
 RECOMMENDATIONS
For Toyota:
1. Toyota needs to improve its delivery time, as it got a
really low rating in this question. It must find new
ways of increasing production to meet local demand and
deliver cars to the customers in lesser time.
2. Punctuality was also an issue with TOYOTA. They must
use modern and up to date methods to predict delivery
dates, and refrain from making commitments they cannot
honor.
3. The exuberant prices being charged from the local
market really need a look into. People do not believe
that the car is worth its price. TOYOTA must utilize
all the controllable factors to its advantage to bring
the prices down and provide the customers with good
quality at a reasonable price.
4. The availability of colors is an issue that must also
be addressed. If TOYOTA can provide its customers with
a wide range to colors to choose from, it can boost
its chances in the local market even further.
5. The sales staff at TOYOTA dealerships was not
considered to be of acceptable levels. TOYOTA must
ensure that all its dealerships have sales personnel
that are not only competent, but are also able to
satisfy their future customers. A training program for
the sales personnel will definitely help.

For Honda:
1. As was the case with TOYOTA, HONDA also does not seem
to be doing any good to itself as far as the delivery
time was concerned. It was rated as being too much,
 and HONDA certainly need to look into this aspect.
Find ways to increase production and meet the local
demand.
2. Punctuality again was a cause of concern. HONDA must
find methods to give the delivery dates accurately, as
unfulfilled promises lead to a bad name and
undoubtedly, lost business.
3. Price!! Price!! Price!! Here again it was rated as
being too high. Bringing down the prices will help in
increasing the satisfaction levels among the
customers.
4. Color availability should be increased to provide more
choices to the customers.

For Suzuki:
1. Major area of concern for SUZUKI was the high prices
they are charging from their customers. As the oldest
car producer in the country, it must try everything in
its hands to bring down the prices so that the car
becomes more affordable and SUZUKI remains a market
leader.
2. Another area where SUZUKI lacks is the build quality
of the car. It must realize that it is no longer the
only player in the market. The competition will get
only tougher in the future. It must consult its parent
company to find ways of improving the build quality.
3. As with HONDA and TOYOTA, SUZUKI must also try to
provide a wider selection of colors to its customers.
4. The performance of the SUZUKI cars was also not
rated very highly. SUZUKI must make sure that they
provide their customers with cars of international
 standard, not only to capture a larger local market,
but also to compete in the global market.
5. The question regarding the interior design and
exterior design also did not get SUZUKI any medals.
They should try to upgrade their technology, models
and designs to make sure their customers get what they
want in a car.
6. Overall satisfaction level was a mere 3.18, which
can only be improved with effort and dedication on the
part of SUZUKI.

For Daihatsu:
1. As with others in the industry, punctuality was not
rated as being very high. DAIHATSU needs to improve on
this.
2. Availability of spares was a dark area in the survey
for DAIHATSU. It must make sure that it utilizes the
network of TOYOTA (as it is its sister concern) to
make the availability of spares more effective.
3. Performance of the car got some complaints, especially
in the area of fuel consumption. DAIHATSU must go back
to the drawing board and induct new technology to make
its fuel consumption more efficient.
4. DAIHATSU should make efforts to present a wider range
of colors to its customers.

For Kia:
1. KIA needs to put some serious effort to enhance its
credibility in the market, as it got very low ratings.
An enhanced marketing plan with improved efficiency
and effectiveness would do the trick for KIA.
 2. Price of the car was rated as being too high, and
mostly people were dissatisfied with the prices. They
felt that the prices should be a lot less than at
present.
3. Spare parts availability was also a major cause of
concern for KIA. It must make sure that spares are
readily available for its cars. New distribution
networks and partnerships with its dealers should be
developed.
4. The available spares are very expensive, according to
the customers of KIA. The company must make sure that
spares are available at reasonable rates to the
customers. KIA must look into the costs associated
with bringing the spares into the market, and try to
bring them down.
5. Performance of the car was also not rated as being
very high. Induction of new technology and models is
imperative for survival of KIA.
6. Overall satisfaction with KIA was an embarrassing
2.72. It needs to put a lot of effort to make a good
name for itself in the market and be competitive once
more.

For Hyundai:
1. HYUNDAI lacks a suitable network of showrooms.
Showrooms are essential in the auto industry, for
they provide an opportunity for customers to actually
have a “feel” of the car before going for the buy.
HYUNDAI must improve in this regard.
2. Punctuality of delivery date, as with others, is a
problem. HYUNDAI must improve in this area, to have
better satisfied customers.
 3. Availability of spares also needs some looking into.
A distribution network based on partnerships will be
helpful. If current network is ineffective, they must
build a new network and make sure that this gap can
be filled.
4. The designs of both interior and exterior of the car
were not rated as being very high. HYUNDAI must make
sure that they design cars after thorough research
about what the customers actually want in their cars.

The future of auto industry depends on customers'

satisfaction with products and services offered by the
companies. Satisfaction with offered products and joint
value creation depends on the development of relationships
between the auto manufacturers and the customers.
Attracting new customers, maintaining existing customers,
and overall enhancing of company-customer relationships are
the key factors for using the market potential. It is
important that both the industry and the customer can
benefit from the development of these relationships. Auto
industry is likely to face fierce competition in the near
future, and it must be ready to meet this challenge.

At the present, the auto industry seems to have a very

local and narrow thinking with only short term objectives,
placing emphasis only on making money. They must realize
that this is not the way to prepare themselves for the
coming future, with the implementation of WTO on the cards
during the next few years. To face the competition they
will have to mend their ways, placing emphasis on long term
objectives, with global thinking. Customer satisfaction
should be the center point of their strategies as it is the
customer who determines the success or failure of any
business.
For the time being, the Pakistani auto industry is in no
position to either face competition nor is willing to
provide any benefits to its customers. They are unable to
meet local demand which has resulted in selling of these
cars at a premium in the open market, which is not seen
anywhere else in the world. The companies themselves have
taken a blind eye towards all the issues, and the
government seems to be helpless in providing much needed
relief to the customers.
 REFERENCES

 Bollen, Kenneth A. 1989. Structural Equations with

Latent Variables. New York: John Wiley and Sons.
 Cardozo (1965), "An Experimental Study of Consumer
Effort, Expectation and Satisfaction," Journal of
Marketing Research, 2, 244-9.
 Cardozo, Richard N. 1965. "An Experimental Study of
Consumer Effort, Expectation and Satisfaction." Journal
of Marketing Research 2 (August): 244-249.
 Churchill and Suprenant (1982), "An Investigation
into the Determinants of Customer Satisfaction," Journal
of Marketing Research, 19 (November), 491-504.
 Churchill, Gilbert A., Jr. 1979. "A Paradigm for
Developing Better Measures of Marketing Constructs."
Journal of Marketing Research 16 (February): 64-73.
 Day and Landon (1976) "Collecting Comprehensive
Consumer Complaint Data by Survey Research," in Advances
in Consumer Research Vol.3, ed. Beverlee B. Anderson,
Atlanta: Association for Consumer Research
 Faraz Sidiqui; Investing for a strong, self-sufficient
Pakistan; 2000.
 Fornell (1992), "A National Customer Satisfaction
Barometer: The Swedish Experience," Journal of Marketing,
55 (January), 1-21.
 Fornell, Claes. 1992. "A National Customer
Satisfaction Barometer: The Swedish Experience." Journal
of Marketing 56 (January): 6-21.
 Howard and Sheth (1969), The Theory of Buyer
Behavior, New York: John Wiley and Sons, Inc.
 Howard, John A. and J.N. Sheth. 1969. The Theory of
Buyer Behavior. New York: John Wiley and Sons.
 Hunt, H. Keith (1977), "Consumer
Satisfaction/Dissatisfaction: Overview & Research
Directions" in Conceptualization and Measurement of
Consumer Satisfaction and Dissatisfaction, ed. H. Hunt,
Cambridge, MA: Marketing Science Institute.
 Hunt, H. Keith. 1977. "CS/D--Overview and Future
Research Direction." in Conceptualization and Measurement
of Consumer Satisfaction and Dissatisfaction. H. Keith
Hunt, ed. Cambridge, MA: Marketing Science Institute
 Mano, Haim and Richard L. Oliver. 1993. "Assessing
the Dimensionality and Structure of the Consumption
Experience: Evaluation, Feeling, and Satisfaction."
Journal of Consumer Research 20 (December): 451-466.
 Marsh, Herbert W and Alexander Seeshing Yeung. 1999.
"The Lability of Psychological Ratings: The Chameleon
Effect in Global Self-Esteem." Personality and Social
Psychology Bulletin 25 (1): 49-64
 Oliver (1981), "Measurement and Evaluation of
Satisfaction Process in Retail Settings," Journal of
Retailing, 57 (Fall), 25-48, 138-139.
 Oliver (1989), "Processing of the Satisfaction
Response in Consumption: A Suggested Framework and
Research Propositions," Journal of Consumer Satisfaction,
Dissatisfaction and Complaining Behavior, 2, 1-16.
 Oliver (1993), "Cognitive, Affective, and Attribute
Bases of the Satisfaction Response", Journal of Consumer
Research, 20 (December), 418-432.
  Oliver and Bearden (1985), "Disconfirmation
Processes and Consumer Evaluations in Product Usage,"
Journal of Business Research, 13 (June), 253-246.
 Oliver and Swan (1989), "Equity and Disconfirmation
Perceptions as Influences on Merchant and Product
Satisfaction," Journal of Consumer Research, 16
(December), 372-383.
 Oliver, Richard L. 1980. "A Cognitive Model of the
Antecedents and Consequences of Satisfaction Decisions."
Journal of Marketing Research 17 (September): 460-469.
 Olshavsky and Spreng (1989), "A Desires as Standard’
Model of Consumer Satisfaction," Journal of Consumer
Satisfaction, Dissatisfaction and Complaining Behavior,2,
49-54.
 Peterson, Robert A. and William R. Wilson. 1992.
"Measuring Customer Satisfaction: Fact and Artifact."
Journal of the Academy of Marketing Science 20 (Winter):
61-71.
 Salman Khalid; Auto Industry Review; 2002.
 Spreng, MacKenzie and Olshavsky (1996), "A
Reexamination of the Determinants of Consumer
Satisfaction", Journal of Marketing, 60 (July 1996), 15-
32.
 Spreng, Richard A., Scott B. MacKenzie, and Richard
W. Olshavsky. 1996. "A Reexamination of the Determinants
of Consumer Satisfaction." Journal of Marketing 60
(July): 15-32.
 Tse, David K. and Peter C. Wilton. 1988. "Models of
Consumer Satisfaction: An Extension," Journal of
Marketing Research, 25 (May): 204-212.
 Waheed Altaf; Business Review; 2003.
 Westbrook and Reilly (1983), "Value-Percept
Disparity: of Consumer Satisfaction," in Advances in
Consumer Research, Vol.10, Richard P. Bagozzi and Alice
M. Tybout, eds. Ann Arbor, MI: Association for Consumer
Research,256-61.
 Woodruff, Cadotte and Jenkins (1983), "Modeling
Consumer Satisfaction Processes Using Experience-based
Norms," Journal of Marketing Research, 20 (August), 296-
304.
 Woodruff, Robert B., Ernest R. Cadotte, and Roger L.
Jenkins. 1983. "Modeling Consumer Satisfaction Processes
Using Experience-Based Norms." Journal of Marketing
Research 20 (August): 296-304.
 Yi (1991), "A Critical Review of Customer
Satisfaction," in Review of Marketing 1990, ed. Valerie
A. Zeithaml, Chicago: American Marketing Association, 68-
123.
 Yi, Youjae. 1990. "A Critical Review of Consumer
Satisfaction." in Review of Marketing. Ed. Valarie A.
Zeithaml. Chicago: American Marketing Association, 68-
123.
APPENDIX
 QUESTIONNAIRE

Customer satisfaction survey being carried out for my MBA

final project in Bahria Institute of Management and
Computer Sciences

1. Your car: (please tick one)

Toyota Honda Suzuki Daihatsu Hyundai Kia

Answer the following questions with reference to the above

stated vehicle, according to the following scale:

5=Most Satisfied
4=Satisfied
3=Could be better
2=Dissatisfied
1=Most Dissatisfied

2. Credibility of the brand 5 4 3 2 1

3. Suitable location of showrooms 5 4 3 2 1
4. Booking procedure 5 4 3 2 1
5. Delivery time 5 4 3 2 1
6. Punctuality of delivery date 5 4 3 2 1
7. Sales staff attitude/ competence 5 4 3 2 1
8. Price of the car 5 4 3 2 1
9. Availability of spares 5 4 3 2 1
10. Price of spares 5 4 3 2 1
11. After sales service 5 4 3 2 1
12. Performance of the car 5 4 3 2 1
13. Build Quality of the car 5 4 3 2 1
14. Prices of after sales services 5 4 3 2 1
15. Availability of colours 5 4 3 2 1
16. Interior design 5 4 3 2 1
17. Exterior design 5 4 3 2 1
18. Overall satisfaction 5 4 3 2 1

Thanking you for your time and cooperation,

Mohsin Kazmi