cb_fn_group1(study of consumer buying behaviour and perception in gearless 2 wheeler segment) (1)
TRANSCRIPT
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Study of Consumer Buying Behaviors and Perceptions in
Gearless 2-Wheeler Segment
Section: Finance
GROUP 1
Team Members
Ankit Rungta (10FN-016)
Akanksha Singh (10FN-008)
Chandan Rathor (10FN-033)
Aditya Singh (10FN-005)
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Executive Summary
Objective:
To study the buying behaviour of the Indian consumer for gearless 2-wheelersegment and analyze the same to get insights into consumer psychographics and
demographics.
Type of research:
Primary research
Methodology:
A questionnaire was prepared and a survey was conducted to study attribute
importance and profile of consumers interested in the gearless 2-wheeler segment.Factor analysis was also done.
Demographics:
57% of the respondents were female and 43% male Roughly 45% of the respondents covered were students The average respondent was single, female, a student of less than 25 years
of age and belonging to the upper middle-class
The data collected was mined/analyzed for deeper insights into consumers
psychographic profiles, buying behaviour, important decision-making criteria andpreferences. Some conclusions follow-
Respondents belonging to the lower-middle-class showed a majority of75% who would consider buying a scooty and 21% not interested
50% of male respondents were interested in scooties while 71% of femalerespondents showed their support for the segment
Only a minority of 22% relate scooties to the value propositions offered byHero Honda Pleasure viz. girls, style and fun
The ego-defensive function is satisfied for another 16% of respondents byscooty as a product
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CONTENTS
References ..26
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Acknowledgements
We would like to express our sincere thanks to Assistant professor Dr. Bikram Jit
Rishi for his constant encouragement and guidance during this project. He hasbeen a constant source of inspiration and has helped us at each step of the project.
He has been very kind and patient while suggesting us the outlines of this project
and correcting our doubts. We are highly grateful for all the time and effort he put
in for discussions and reviews. His constructive criticism of approach to the
problem and the result obtained during the course of this work has helped us to a
great extent in bringing our work to its present shape.
We would also like to show our gratitude to all the people who participated in the
survey conducted and, despite their busy schedules took pain to fill the
questionnaire. Without them we wouldnt have been able to do any analysis and
are highly indebted to them.
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Introduction
The Macro View:
The automotive industry in India is one of the largest in the world and one of the
fastest growing globally. India manufactures over 17.5 million vehicles (including
2 wheeled and 4 wheeled) and exports about 2.33 million every year. It is the
world's second largest manufacturer of motorcycles, with annual sales exceeding
8.5 million. As of 2010, India is home to 40 million passenger vehicles and more
than 3.7 million automotive vehicles were produced in India in 2010 (an increase
of 33.9%), making the country the second fastest growing automobile market in
the world.
A total of 9.4 m two-wheelers were sold in India in FY10, a growth of a strong
27% over the previous year. Motorcycles accounted for 78% of the total twowheelers sold. Although economic growth came in much below than 9%, low
interest rate, availability of credit and a low based effect helped two wheeler sales
to grow strongly. The scooters (geared & ungeared) improved their sales
considerably, largely due to improved performance of the ungeared scooter
segment.
Key Players:
The largest player in the two wheeler industry for eight consecutive years, Hero
Hondacommands a lion's share in the category. It has a market share of 41.35%
and volume size of 37.2 lakh units in '09-'10.
The second largest player in the industry is Bajaj Autowhich registered a growth
of 25% in volumes by selling 24.02 lakh units in '09-'10. The company saw its two
wheeler market share touch 26.70% in 09-10.
TVS Motors cornered a market share of 18.94% backed by sales of 17.04 lakh
units.
In addition to the 'big three' there are a number of small players fighting for
salience viz. Kinetic, Yamaha, Suzuki, LML etc.
In a nutshell the followings factors can be distinguished for the growth of 2-
wheeler industry in India:
1) Easy accessibility to cheap consumer loans2) The increase in the average income of the family.3) The reduction in duties and taxes.
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4) Convenience with regards to commuting as compared to the publictransport system.
5) Continuous innovations in technology making the bikes economic and fuel-efficient.
6) The first choice among youths and teenagers.Market Share:
Source: Indian Auto Industry Two-wheeler Segment in India by india-
reports.in on February 20, 2010
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Research Methodology
Type of Research:
1) PrimarySurvey to gain insight into the buying behavior and perception in the
gearless two-wheeler segment
2) SecondaryA study of current marketing practices with focus on Hero Honda
Pleasure to relate to insights gained from survey
Questionnaire Design:
No of distinct questions = 14 Reverse flowerpot approach used for structure(Closed-ended to Open-
ended questions)
Demographic profiling done (5 questions) Attitude towards the segment (4 questions) Attitude towards and perception of the brands (2 questions) Cognitive needs and perceptions of respondents (2 questions with series of
attributes on the Likert scale)
Sampling:
Type of Sampling: Convenience sampling (online)
No of respondents: 37
Statistical Tools Used: SPSS for Factor Analysis
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Observations
Demographic Profile
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Summary:
21 female and 16 male respondents A decent mix of professions dominated by students at around 46% Sample is skewed towards youngsters with 26 respondents at 25 years or
below. However, this is relevant for this particular study as Hero Honda
Pleasure focuses on the youth segment, in particular, the young girls.
Effectiveness/ineffectiveness of current communications of the brand may
be roughly estimated
78% unmarried respondents. However, this study does not attempt to studythe marital status demographic as it seems less relevant for the category.
65% belonged to the lower-middle class while 35% belonged to the upper-middle class. It is assumed that the people interested in buying scooties
would belong to the middle class in almost all cases. The segregation into
the two sub-classes was achieved based on the ownership of products and
assets like car, AC, house, etc.
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Attitude towards the scooty segment
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Summary:
Overall, 62% of the respondents said they would consider buying ascooty, while 30% would not consider buying a scooty and 8%
undecided
Respondents belonging to the lower-middle-class showed a majority of75% who would consider buying a scooty and 21% not interested
On the other hand, the upper-middle-class shows milder interest at 38%while 46% would not consider buying scooties at all
The disparity of opinion between the two sub-classes may be attributed toprior ownership of substitutes like car and motor-cycles in the upper-
middle-class segment
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50% of male respondents were interested in scooties while 71% of femalerespondents showed their support for the segment
The figures for female interest may have been lower due to lower interest inthe upper-middle-class or dissatisfaction with past performance. There were
also a few respondents worried about road safety.
Frequency of Use
The frequency of use is based on the experiences of users of scooties andexpectations/requirements of potential buyers. As much as 70% of the
respondents showed some requirements and could indicate greater market
potential.
It must also be considered that some of these requirements are currentlyfulfilled through competitor products or substitutes like cars, motorcycles,
scooters and other scooties
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Factors influencing Motivation
Only a minority of 22% relate scooties to the value propositions offered byHero Honda Pleasure viz. girls, style and fun
78% of respondents were interested in scooties because of its utilities orjust because they need it
This may indicate a flaw in the current marketing strategy of Hero HondaPleasure, not to mention other brands in the segment, most of which use the
indirect approach of communication.
We must not consider the only-for-girls strategy a failure outright. It mustbe noted that Hero Honda Pleasure gauged consumer perception and
realized that while motorcycles where targeted at men, no vehicle appealed
to women directly. The innovative strategy of Pleasure, launched in 2006
was closely imitated by several competitors. Pleasure gained a respectable
market share, offering stiff competition to established brands like TVSScooty Pep and Honda Activa.
Hero Hondas biggest innovation was to set up showrooms exclusively forwomen. Just 4 Her is staffed entirely by young saleswomen and intended tomake customers feel comfortablethey can even take a test drive awayfrom a male sales clerks condescending eyes.
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Pleasure scooterswhich cost about Rs43,000 ($970)account for over26,000 of the more than 400,000 two-wheelers that Hero Honda sells eachmonth. About 10 per cent of sales are made through the Just 4 Hershowrooms.
However, it is perhaps time to look beyond the young girls for a largercustomer base
Word-Association Tests
Two open-ended word association questions were put to the respondents togain a preliminary insight into the attitude of customers towards scooties
and their perception of the Pleasure brand.
The stereotype of scooty for women seems to become less popular, withonly 16% relating scooties to women
The ego-defensive function is satisfied for another 16% of respondents byscooty as a product
46% however view the scooty simply for its utility and requirement in dailylife
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A respectable 68% hold a positive to very favorable perception towardsPleasure as a brand
19% of respondents have an indifferent or negative stance, possibly due tonon-requirement of the product or past dissatisfaction
14% of the respondents could not be categorized into positive and negativeopinionated groups due to vague responses
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Brand Recall
It is found that respondents were more familiar with brands like HondaActiva and TVS Scooty than Hero Honda Pleasure. Nevertheless, around 65% of respondents recalled Hero Honda Pleasure as
a brand compared to over 90% respondents recalling TVS Scooty and
Honda Activa
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The hiring of Priyanka Chopra as brand ambassador has been relativelymore effective than other competitors using celebrities. Around 66% of
respondents remembered the Hero Honda Pleasure advertisement.
Factor Analysis
The data obtained through the questionnaire administration was subject to various
analyses to understand its validity and infer some meaning out of them.
Data Analysis using SPSS:
KMOs adequacy test and Bartletts Test of Sphericity:
The Kaiser-Meyer-Olkin measure of sampling adequacy tests whether thepartial correlations among variables are small. Bartlett's test of sphericity
tests whether the correlation matrix is an identity matrix, which would
indicate that the factor model is inappropriate.
The KMO measures the sampling adequacy which should be greater than0.5 for a satisfactory factor analysis to proceed.
Another indicator of the strength of the relationship among variables isBartlett's test of sphericity. Bartlett's test of sphericity is used to test the null
hypothesis that the variables in the population correlation matrix are
uncorrelated.
Case Processing Summary
N %
Cases Valid 37 100.0
Excludeda
0 .0
Total 37 100.0
a. Listwise deletion based on all variables in the procedure.
Reliability Statistics
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Cronbach's
Alpha N of Items
.848 10
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of
Sampling Adequacy.
.617
Bartlett's Test of
Sphericity
Approx. Chi-
Square
164.9
67
df 45
Sig. .000
Interpretation: KMOs test: Value of KMO is above 0.5 hence we can accept the
sample taken as adequate ( as per Kaiser (1974))
Bartletts test: The observed significance level is .0000. It is small enough to reject
the hypothesis. It is concluded that the strength of the relationship among variables
is strong. It is a good idea to proceed a factor analysis for the data.
Total Variance Explained
Compon
ent
Initial Eigen values
Extraction Sums of
Squared Loadings
Rotation Sums of
Squared Loadings
Tot
al
% of
Varian
ce
Cumulativ
e %
Tot
al
% of
Varian
ce
Cumulativ
e %
Tot
al
% of
Varian
ce
Cumulativ
e %
1 4.32
1
43.208 43.208 4.32
1
43.208 43.208 2.72
6
27.256 27.256
2 1.35
6
13.556 56.764 1.35
6
13.556 56.764 2.34
6
23.464 50.720
3 1.25
2
12.519 69.283 1.25
2
12.519 69.283 1.85
6
18.563 69.283
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4 .833 8.333 77.616
5 .643 6.428 84.044
6 .515 5.154 89.198
7 .437 4.374 93.573
8 .385 3.848 97.421
9 .141 1.413 98.834
10 .117 1.166 100.000
Extraction Method: Principal Component Analysis.
Interpretations: This shows that there are 3 factors which have now been formed
(1.00 being the threshold value to include a factor).
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Rotated Component Matrixa
Component
1 2 3
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Which of these following features
should your Scooty have? [Should
be a reputable brand]
.817 .136 .291
Which of these following features
should your Scooty have? [Shouldbe comfortable]
.730 .397
Which of these following features
should your Scooty have? [Should
be affordable]
.686 .560
Which of these following features
should your Scooty have? [Should
have good mileage]
.677 .449
Which of these following features
should your Scooty have? [Should
be stylish]
.605 .200
Which of these following features
should your Scooty have? [Vehicle
financing options should be
available]
.252 .827
Which of these following features
should your Scooty have? [Specialpromotional offers should be
available]
.249 .774 .235
Which of these following features
should your Scooty have? [More
storage space]
.632 .606
Which of these following features
should your Scooty have? [Higher
top speed]
.164 .825
Which of these following features
should your Scooty have? [Range of
colors]
.260 .289 .707
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Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.
a. Rotation converged in 10 iterations.
Interpretations: Shows which question of the questionnaire are part of which
variable. For eg first five question forms one factor which is later named value for
money.
Total Variance Explained
Comp
onent
Extraction Sums of Squared
Loadings
Rotation Sums of Squared
Loadings
Cumulative % Total
1 43.208 2.726
2 56.764 2.346
3 69.283 1.856
Extraction Method: Principal Component Analysis.
Component Transformation
Matrix
Comp
onent 1 2 3
1 .691 .594 .411
2 -.272 -.313 .910
3 -.670 .741 .055
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Component Transformation
Matrix
Comp
onent 1 2 3
1 .691 .594 .411
2 -.272 -.313 .910
3 -.670 .741 .055
Extraction Method: Principal
Component Analysis.
Rotation Method: Varimax with
Kaiser Normalization.
From the above factor analysis, it can be found that 3 relevant factors could be
extracted from the research data. These factors are formed by a unique
combination of variables. The list of factors and the variables that are a part of the
factors are as follows:
Sno Relevant factors Original questions
1 Value for money
1. Which of these following featuresshould your Scooty have? [Should
be a reputable brand]
2. Which of these following featuresshould your Scooty have? [Should
be comfortable]
3. Which of these following featuresshould your Scooty have? [Should
be affordable]
4. Which of these following featuresshould your Scooty have? [Should
have good mileage]
5. Which of these following featuresshould your Scooty have? [Should
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be stylish]
2 Value Added Features 1. Which of these following featuresshould your Scooty have? [Vehicle
financing options should beavailable]
2. Which of these following featuresshould your Scooty have? [Special
promotional offers should be
available]
3. Which of these following featuresshould your Scooty have? [More
storage space]
3 Ego-Defensive Features 1. Which of these following featuresshould your Scooty have? [Higher
top speed]
2. Which of these following featuresshould your Scooty have? [Range
of colors]
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Recommendations
We may make some reasonable assumptions about Hero Honda Pleasuresreach to customers at different stages in the technology adoption lifecycle
Pleasures customer base consists of at least the innovators and the earlyadopters
It is also reasonable to presume that some measure of the early majority hasalso been captured for the segment based on Pleasures performance till
dateHowever, the early majority for the category most probably encompasses
all women fit to ride a vehicleIt would make sense to open up the target segment to involve more than
the young womanAttitude towards the category suggests that the most overwhelming
motivation for buying a product like Hero Honda Pleasure is its utility.Some direct communication, even if interspersed with the indirect
communication used by Pleasure presently, may be effectiveHero Honda Pleasure may also look at reestablishing itself as a unisex
brand, or launch a for-males counterpart to Pleasure, targeting men with a
view to increasing customer base.For this particular strategy, launching a male-counterpart model would be
better so as to not eat into Pleasures current market share. However, this
might be difficult in the absence of availability of capital.Although the brand may look at either of the two strategies discussed above
and choose one course of actionHowever, the preliminary evidence suggests a bias towards motivation by
cognitive features and it may be a good idea to follow the technology
adoption lifecycle and first enlist the support of older women.
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References
https://www.indiastat.org/ http://www.wikipedia.com Comstat 2007 from (www.fcbulkconstrat.com) Hero Honda Official Website www.consumerpsychologist.com/ marketingteacher.com//lesson-defining-consumer-
behavior.html
https://www.indiastat.org/https://www.indiastat.org/http://www.wikipedia.com/http://www.wikipedia.com/http://www.fcbulkconstrat.com/http://www.consumerpsychologist.com/http://www.consumerpsychologist.com/http://www.consumerpsychologist.com/http://www.fcbulkconstrat.com/http://www.wikipedia.com/https://www.indiastat.org/