market consumer perception mahindra thesis
TRANSCRIPT
Chapter-1
INTRODUCTION
It is true fact that if you are satisfied you recommend to others. Word of mouth and
customer satisfaction play a very important role in determining market perception
about an automobile. It is the market perception that determines the success of a
company and so it is very important for the car manufacturers to measure the
“willingness of existing users of a product to recommend it to others”. The same is a
lot of interest to customers as well for it helps them make the purchase decision. A
car is one of the most significant purchases that an Indian household makes and this
thesis addresses the most important question that perplexes car manufacturers:
“What makes the perfect car and how to increase the sales of the Mahindra and
Mahindra’s passenger car ?”
The thesis highlights the factors that influence the buying decision of a consumer.
The factor under consideration would be:
Price
Income of the consumer
Features in the car
Safety standard
Warranty scheme
Finance facility
Re-sale value
Sturdiness and Looks
Is an Indian consumer ready for more? Which is the driving motive behind the
effective demand of the car? How the coming of new models like Honda’s Jazz is
going to effect the buying decision of consumer and especially the Tata 1 lakh car. In
other words, from the spread of choices offered by various manufacturers under
various segments, of which one the customer will finally turn the ignition on and drive.
Customer satisfaction index: some of the most advance thinking in the business
world recognizes that customer relationships are best treated as assets, and that
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methodical analysis of these relationships can provide a road map for improving
them, as somebody has said if you cannot measure it, you cannot improve it.
As one of the measurements of the performance of the quality management system,
the organizations shall monitor information relating to customer perception as to
whether the organization has met customer requirements. The method for obtaining
and using this information shall be determined. The requirement has been there in
the QS9000 standard clause 4.1.6 which says:
“Trends in customer satisfaction and key indicators of customer dissatisfaction shall
be documented and supported by objective information. These trends shall be
compared to those of competitors, or appropriate benchmarks, and reviewed by
senior management.”
There is obviously a strong link between customer satisfaction and customer
retention. Customer’s perception of service and quality of product will determine the
success of the product or service in the market. With better understanding of
customer’s perceptions, companies can determine the actions required to meet the
customer’s needs. They can identify their own strengths and weaknesses, where
they stand in comparison to their competitors, chart out the path future progress and
improvement. Customer satisfaction measurement helps to promote an increased
focus on customer outcomes and stimulate improvements in the work practices and
processes used within the company. Customer expectations are the customer-
defined attributes of your product or service. We cannot create satisfaction just by
meeting customer’s requirements fully because these have to be met in any case.
However falling short is certain to create dissatisfaction. Major attributes of customer
satisfaction can be summarized as:
Product quality
Product packaging
Keeping delivery commitments
Price
Responsiveness and ability to resolve complaints and reject reports
Overall communication, accessibility and attitudes
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Figure-1: Major attributes of customer satisfaction
We cannot begin to address the customer satisfaction issue we define the
parameters and measures clearly. The customer satisfaction index represents the
overall satisfaction level of that customer as one number, usually as a percentage
The buying process involves the following steps:
Values
Benefits
Features - Attributes
+ -
3
Problem Recognition
Information search
Evaluation
Post Purchase Dissonance
BuyDecision
Satisfaction = Brand Acceptance
Dissatisfaction = Brand Rejection
Figure-2
“The fact that word of mouth sales are a big deal in this industry has also helped.
Industry players and market surveys reveal that 20-30 percent of sales are through
word of mouth”.
For knowing : How to increase passenger car sales ,it has undergone through
following:
Surveying the relevant consumer base through exhaustive questionnaire.
Understand the elements underplaying in each segment
Deducing an analytical overview through different statistical methods
Recommendation comes from satisfaction and satisfaction comes from
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Figure-3: Showing three core elements of satisfaction
OVERVIEW OF THE AUTO SEGMENT
Indians have emerged as an avid car enthusiasts sporting their prized possessions
as status symbols and speed machines. Foreign car companies have discovered the
Indian consumer as well as the R & D potential in the Indian technical fraternity and
are setting up manufacturing plants right and left across the country at lower costs.
The Indian automobile industry is currently experiencing an unprecedented boom in
demand for all types of vehicles. This boom has been triggered primarily by two
factors:
1. Increase in disposable incomes and standards of living of middle class Indian
families.
2. The Indian government's liberalization measures such as relaxation of the
foreign exchange and equity regulations, reduction of tariffs on imports, and
banking liberalization that has fueled financing-driven purchases.
Industry observers predict that passenger vehicle sales will triple in five years to
about one million, and as the market grows and customer's purchasing abilities rise,
there will be greater demand for higher-end models which currently constitute only a
tiny fraction of the market. These trends have encouraged many multinational
automakers from Japan, U.S.A., and Europe to enter the Indian market mainly
through joint ventures with Indian firms.
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India is increasingly becoming a global automotive hub both for the vehicles and
component industry. India is fast integrating itself into the world economy and open to
international automotive companies, who are increasingly investing in India. The
Indian automotive and component industry is looking to increase the quality of
production from existing levels, to develop new products and to increase exports. In
the long run India is well set to become a key market for automotive and component
manufacturers in terms of local demand and as a base for export. Additionally,
companies such as GM, Daimler Chrysler, Toyota, Delphi and MICO/Bosch are
utilizing India’s well developed IT / software capabilities and have set up R&D hubs
here for their global operations.
INDUSTRY SIZE
The domestic Indian passenger car market (including utility vehicles)
totaled900,000 units (with a CAGR of 10 per cent over the past 4 years) while the
exports were 130,000 million units (with a registered CAGR of 68 per cent over
the past 4 years) during financial year 2004
The Indian two-wheeler Industry is one of the largest in the world, and is
expected to maintain robust growth in the future
At the back of this phenomenal automotive growth is the success of the Indian
auto component industry. Presently a US$ 6.7 billion industry, it is expected to
almost treble in less than eight years time to US$ 17 billion by 2012
India offers a distinct technological and cost-competitive advantage, which global
Original Equipment Manufacturers (OEMs) and automotive suppliers are
leveraging for both manufacturing and research facilities.The passenger car
market is projected to grow at a CAGR of 12.3 per cent over the next few years.
Growth in the mid-size and premium car segments is expected to outpace the
overall market growth.
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Figure-4: Indian Automobile Industry size
Figure-5: Indian Automobile Industry Products
Automobile Industry in India is still in its infancy but growing rapidly. The
opportunities in the automobile industry in India are attracting big names with the big
purse and they are investing vigorously in infrastructure, design and development,
and marketing. Automobile industry in India is today poised for the big leap.
India is the 2nd largest two wheeler manufacturer in the world
Second largest tractor manufacturer in the world
5th largest commercial manufacturer in the world
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3rd largest car market in Asia, surpassing China in the process
Automobile industry Contributes 17% of the total indirect taxes collected by the
exchequer & is a driver of product and process technologies, and has become a
excellent manufacturing base for global players, because of its
high machine tool capabilities
Extremely capable component industry
Most of the raw material locally produced
Low cost manufacturing base
Highly skilled manpower
Special capability in supplying large volumes
Domestic and Foreign Vehicle Manufacturers:
Figure-6: Indian Automobile Manufacturers in India and Plant Locations
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Passenger Vehicles
The main domestic manufacturers of passenger vehicles are as follows:
Maruti Udyog
Tata / Telco
Mahindra / Mahindra
Hindustan Motors
Foreign competitors manufacturing locally including Hyundai, Ford, General
Motors, Honda, and Toyota.
Car demand has seen a turnaround since mid 2001 thanks to heavy discounts and
cheaper finance. A large number of new models, both locally assembled and
imported, have also revitalized the market.
In terms of volumes:
The A/B segments are where India’s strength and future lies. The A/B
segment accounts for over 65% of the total passenger vehicles produced.
Competition in this segment is stiff with Maruti the market leader with around
55% market share. New models from Telco (Indica), Hyundai (Santro) and
Fiat (Palio) however are eroding Maruti’s long standing dominance in this
segment.
The mid / luxury range is developing with the introduction of Ford (Ikon),
Hyundai (Accent/Sonata) and Skoda (Octavia), although the volumes are not
significant.
The UV segment remains sluggish with growth at just over 1%. The clear
market leader, Mahindra (51.5% market share) posted increased sales of
16% in the first 3 quarters of 2007/08. Toyota and Telco domestic UV
business remains flat.
Commercial Vehicles
The main Indian companies in the Commercial Vehicle segment are:
TATA Engineering and Locomotive Company (TELCO)
Ashok Leyland
Bajaj Tempo Ltd
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Eicher Motors Ltd
Swaraj Mazda
An international company currently manufacturing CVs in India, such as Volvo but
again volumes are not large. Other global players are active, although in partnership
with one of the domestic manufacturers E.g.:- IVECO (manufacturing their range of
trucks in association with Ashok Leyland. There has been a significant turn around in
this segment over the last 18 months with over 30% growth being seen in terms of
both production and sales.
This sector has received a huge boost with India’s massive demand from the
infrastructure sector (particularly roads), cyclical fleet replacement by fleet owners
and an upturn in the cement and steel sectors.
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Passenger Cars LCV
0.604 Mn0.083 Mn
Figure-7: Automobile Manufacturers Market Share
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Maruti (JV of Suzuki), leading the market,
Tata and M&M are the key players
a) Followed by Hyundai and Tata, together hold close to 75% of market
b) Daewoo stopped production, mainly due to financial issues
The following Table-1, explains the growth of India Car Sale during the
aforementioned period.
Passengers Vehicles (PVS)
From April-November
04-05
From April-November 05-
06
Total Market
Share (in %)
The Net Change between the period (in %)
Total number of exports in April 05-06
Maruti Udyog 2,69360 2,91,182 52.2 8.1 23,043
Hyundai Motors India Ltd.
89,075 1,07, 066 19.2 20.2 68,374
Tata Motors 95,402 24,348 16.6 -2.7 12,105
HondaSiel cars India Ltd.
23,186 24,348 4.4 5.1 31
Ford India Pvt. Ltd 15,026 10,512 1.9 -30% 9,928
Utility Vehicles
Mahindra and Mahindra Ltd.
49,897 51,540 42.7 3.3 1,878
Toyota KirloskarMotorPvt Ltd.
24,404 24,983 20.7 2.4 0
Tata Motors Ltd 19,967 21,610 17.9 8.2 905
General Motors India Pvt Ltd.
7,008 12,027 10 71.6 0
Maruti Udyog Ltd . 2682 2472 2 -7.8 54
Hyundai Motor India Ltd.
255 1,042 0.9 308.2 0
Multi-Purpose Vehicles
Maruti Udyog Ltd. 42,388 43,858 100 3.5 731
Mahindra & Mahindra Ltd
13 0 0 0 0
Medium and Heavy Commercial Vehicles
Tata Motors 79,614 73,538 61.1 -7.6 4,807
Ashok Leyland 27,577 33,406 27.7 21.1 2825
Eicher Motors 8,043 8,700 7.2 8.2 318
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Swaraj Mazda 3,573 4,080 3.4 14.2 115
Light Commercial Vehicles
Passenger Carriers
Tata Motors 5,835 6,811 46.8 16.7 1,096
Mahindra and Mahindra
2,305 1,960 13.5 -15 115
Swaraj Mazda 1,178 1,315 9 11.6 12
Force motors Ltd. 2,059 2,877 19.8 39.7 59
Goods Carriers
Tata Motors 30,955 44,380 58.9 43.4 12,461
Mahindra and Mahindra
23,563 23,731 31.5 0.7 1,600
Swaraj Mazda 2,671 2,299 3 -13.9 204
Eicher Motors 3,019 2,954 3.9 -2.1 451
Figure-8: Domestic Sale of Cars
Chapter-2
COMPANY PROFILE
M&M AUTOMOBILELTD
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Mahindra & Mahindra Limited (M&M) is a major automaker in India. It is the
flagship company of the Mahindra Group. The company was set up in 1945 as
Mahindra & Mohammed .It traded steel with suppliers in England and the United
States. M&M began by assembling complete knock down (CKD) Jeeps in 1949.It
expanded to indigenous manufacture of Jeep vehicles with a high level of local
content under license from Kaiser Jeep and later American Motors (AMC).
M&M soon branched out into manufacturing agricultural tractors and light commercial
vehicles (LCVs). It later expanded its operations to secure a significant presence in
many more important sectors. The company has now transformed itself into a group
that caters to the Indian and overseas markets with a presence in vehicles, farm
equipment, information technology, trade and finance related services, as well as
infrastructure development.
By 2005, M&M had become the largest producer of SUVs in India. The company has
recently started a separate sector, the Mahindra Systems and Automotive
Technologies (MSAT), to focus on developing components and offering engineering
services
In this thesis I have tried to describe how M&M has modified the structure of the
organization in order to implement a successful supply chain. The different processes
and initiatives taken across the supply chain of M&M have been described below.
M&M has obtained operational efficiency by keeping a constant watchful eye on the
developments on the supply chain. The endeavor of the company to reduce its costs
in order to increase the profit margins has been described.
M&M is the leader for Utility Vehicles in India today. The company has been in
existence since 1994. The company also has presence in the Light Commercial
Vehicle market. The company’s commercial three wheeler “Champion” does brisk
sales in the country. The company has six plants across the country. These plants
are in the following cities
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Mumbai
Nasik
Igatpuri
Haridwar
Zahirabad
Chennai
The plant at Mumbai specializes in the manufacturing of pick-up trucks. Kandivali,
a suburb of Mumbai has a Mahindra plant devoted to the production of MAXX
pick-ups and soft tops .This plant enjoys the great infrastructure that the city of
Mumbai offers. It has also been recommended for the TPM Excellence Award
apart from ISO/TS 16949 certification. Here forth I will put light into the various
aspects of material management with regards to M&M plant kandivli.
SCOPE OF MATERIAL MANAGEMENT IN M&M
The flow that has been shown below is the “flow of information”. The “flow of
materials” will be in a direction that is opposite to that of the flow of information.
Hence the flow of materials will start with the suppliers and the final product, after
assembling, will reach the dealers.
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Figure-9: Information of Flow of supply chain
M&M uses SAP to keep track of the events that happen across the supply chain.
According to the design it is imperative for every dealer to record the sales that have
been achieved on a particular day on to the system. M&M hence is taking a major
initiative to make all of its dealers SAP enabled. For the dealers who do not have the
access to SAP it is mandatory to report the sales of the previous day to the marketing
office every morning. In such a manner all the regional offices get the figures from
the dealers everyday. All the regional offices will then send these figures to the
Marketing Head Office at Worli. Here firstly, the dealers stocks are replenished.
Proper delivery of the products to every corner of the country where demand exists
has to be seen by the marketing department. Marketing also has to indulge in
“demand forecasting” so that the production planning can be carried out effectively.
This data is available for a number of years. The marketing department has to track
all the data over the years, considering sales achieved in the past for the particular
month for which forecasting is being done. Then by tracking the data and then
incrementing the sales which are expected considering the growth rate the marketing
department comes to a figure. This is the figure that is forecasted and passed along.
Then based on the demand and the expected growth the expected sales are
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calculated. Also based on the figure obtained from the marketing department the
production planning and the further processes are carried out. This is one of the most
important functions of the marketing department. From the supply chain point of view
this is a very essential and an indispensable function. It is the marketing department
that will give the figures for production to the production department. Why is
Demand Forecasting an Important Element in the Supply Chain ?
Figure-10: Showing the demand forecasting
Every organization wants to maximize its revenue and minimize cost to achieve
optimum profitability. Revenue can be increased by increasing the per unit price of
the vehicle and selling at the existing quantity or by selling more vehicles at the same
price.
However if the production of the vehicles happens at a rate that is faster than the rate
of sales then the finished good inventory will keep on increasing and the money
invested in the production of the vehicles will not get its returns in the form of sales. If
the rate of production of the vehicles happens at a rate that is lower than the demand
in the market then it might result in the loss of a sale as the customer might buy a
competitors product as the product that he wants is not available. Also apart from the
customer himself the distribution network of the company would start losing faith in
the company and this would lead to dilution of the companies brand image internally
and externally too (due to bad publicity by the customers lost).
Also an important fact to be seen here is that the manufacturing costs of a vehicle
are very high. So in turn the inventory holding costs will also go up considerably
However automobiles are not a low involvement product. A person will not buy an
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automobile everyday For companies who have products which have low cost of
production it makes sense for them to stock their products in to the market as the
inventory holding cost per unit would be low.
PRODUCTION PLANNING AND CONTROL
The marketing department at M&M passes the expected sales figure to the Central
Production and Planning Control (CPPC). The function of the CPPC is to take the
projected figure from marketing and then break it up in to aggregates.
Figure-11: Central Production and Planning Control
CPPC: The CPPC will take the individual figures for each of the vehicles and break
them up in to numbers for various parts required for production. These break ups are
released by the CPPC on a monthly basis. The monthly plans are released to the
departmental PPC’s.
PPC: The departmental PPC’s play a very vital role as they are the one’s who will
carry out the further break up and pass it along to the procurement team. Thus the
figure received from the CPPC is then further broken up by the PPC according to the
requirement of the individual departments. The CPPC will always release the plans
according to the monthly requirement while the PPC has to break them down and
proceed with the weekly or the fortnightly requirements for the parts. The PPC’s will
then inform the procurement team as well as the logistics team about the scheduled
quantities.
The role of the departmental PPC is very important as he has to interact with
CPPC
Procurement team
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Production (Shop floor)
The role of the PPC is to inform the CPPC about the product availability and the
available of production capacity. It will also communicate those particular
components which require further production. Based on this the numbers given by
the CPPC and hence the exact numbers required for production will alter. The PPC
will then take inputs from the CPPC and release weekly or fortnightly plans. The PPC
releases the plans based on the responsiveness or efficiency required from the
particular vehicles.
PROCUREMENT TEAM: Once the figures and the production plans have been
made the details then have to be passed on to the procurement team. They then
have to ensure the smooth procuring of materials and also the efficient delivery so
that the inventory levels are maintained.
PRODUCTION SHOP FLOOR: The production department plans production based
on the figure given by the marketing team.
Actual production of the vehicles is handled by production. The production
department has to consider a lot of factors when the production planning is done. At
every stage the costs are minimized by introducing various methods. The production
department has to regularly track the inventory levels, reduce the defects, increase
productivity and also ensure proper output of vehicles according to the demand in the
market.
SCM of M&M Kandivli
The four drivers of SCM in Kandivali are:
1. Procurement cell
2. logistics cell
3. Material disposal cell
4. PPC
Thus SCM is divided on basis of functions i.e:
1. Procurement cell
The departmental PPCs break up the quantity depending upon whether it is required
for a week or a fortnight and communicate it to the procurement team. The PPC will
give in a firm schedule and a tentative one. The firm schedule will not be altered in
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any case and the tentative schedule might change a little. This is done in order to
give the suppliers the information about what stock might be needed at which
particular point in time.
At this point the vendor response cycles will start. The procurement team will
continuously communicate with the suppliers and keep the flow of materials smooth.
Any breakdowns or irregularities in the material flow will be managed by the
procurement team.
It is also the responsibility of the procurement team to set inventory targets for each
type of part. Daily the reports are tracked and the inventory levels monitored so that
production time is not lost due to the non availability of materials.
The procurement team will also communicate with the suppliers on behalf of the
individual departments so that only they interact with the suppliers. The
communication channel of the procurement team is shown in the diagram. The
procurement team is always on the lookout for new suppliers and also the optimum
size to be given to each supplier to maintain a proper balance of inventory supplier
scheduling and supplier capacity.
A few years ago each of the production units at M&M was a business unit and hence
the procurement of materials would be handled by each department individually. This
meant that if a supplier was common to two or more units then there would be
multiple people interacting with him for the material. Also it meant that the costs
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would rise up as each unit would have their own logistics and ordering costs. The
inventory management was also done by the individual units.
The structure has changed and today the SCM team has a representative from each
of the production unit. One person will keep track of parts of similar type. He will
communicate with all the suppliers who provide that part. There is one person who
coordinates between all the buyers (employees) and he is the one responsible of
keeping track of the inventory and generating reports. Inventories are being greatly
reduced in M&M and this has ensured profitability by reducing the inventory carrying
costs.
2. Logistics
The logistics for M&M is handled by a dedicated company called “Mahindra
Logistics”. The function of the logistics department is to negotiate terms with the
contractors and co-ordinate with the transporters as to where the materials are and
when will they arrive at the factory premises.
Allocating the vehicles to particular parts and products has to be done by the logistics
department.
Free delivery
In a free delivery format the supplier will bear the transportation and the logistics
costs. The company does not have to pay for the delivery from its own pockets and
hence the onus will be on the supplier to reduce his costs.
Ex-works
Here the costs of transportation of the goods are taken up by the company. The
company will arrange for the transporter and keep track of the materials in transit.
The logistics was earlier looked upon by the Transport and Solutions Group (TSG).
This group has been made in to a separate company called Mahindra Logistics.
Milk Runs
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Milk run deliveries are deliveries that bring products from multiple originating
locations to a single receiving location. Scheduling milk run deliveries is a much more
complex task than scheduling direct deliveries. Decisions must be made about
delivery quantities of different products, about the frequency of deliveries, and most
importantly about the routing and sequencing of pickups and deliveries.
Outbound logistics
Outbound logistics deal with the finished vehicles reaching the dealers. There are
three ways by which a vehicle can reach the dealer
By road (Convoy)
By car carriers
By rail
3. Material disposal cell
Currently responsible for scrap contract finalization for 3 plants (Kandivli,Nashik and
Igatpuri).
Compared to last year there was 42% increase in revenue generation of scrap (773
lacs for the period of Apr-06 to Dec-06 against 543 lacs in the same period last year)
4. PPC – it has been explained above in the planning stage.
Vendor development
Vendors are considered the best intangible assets of any manufacturing
organization. Hence both new and established vendors are subjected to a crucial
evaluation to review their plant capacity, financial conditions, performance, etc
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Mahindra and Mahindra is an automobile industry manufacturing utility vehicles
requiring 4500 parts to be assembled. These parts are procured from a large pool of
suppliers scattered all over the country. So it is needless to say about the importance
of vendor in this organization.
Vendor selection
Just as in any manufacturing organization vendor development starts from vendor
selection. As Mahindra and Mahindra being a 62 year old company, it has a large
supplier base. This supplier base has been gathered over these years by the
purchase personnel identifying the potential supply sources.
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Key supplier
In M & M every raw material/part/component that they purchase has two key
suppliers. The supplier offering the best quality at lowest price and adhering to the
delivery schedules is selected as the key suppliers. The first key supplier supplies
approximately 60% of the material requirements and the other key supplier provides
for the remaining 40% of the materials. They have two key suppliers because 1
supplier does not have the production capacity to meet the requirements of the
company. As also in case of shortfalls, emergency it is essential to have two key
suppliers instead of one.
Vendor evaluation
It is essential to evaluate the vendors on various grounds as the qualityof the finished
product-(in this case vehicles) will finally depend on the quality of raw material.
Vendors are evaluated on the following basis:
Delivery schedules- in case of Mahindra and Mahindra they maintain inventory
according to the rolling plans i.e weekly plans. So vendors need to supply materials
at fixedand predetermined schedules. So vendors are evaluated on the basis of how
efficient they are in adhering to the delivery schedules.
Quality – in an automobile industry if the quality of the raw materials like the grade of
sheet-metals, fabric,plastic, etc is not as prescribedthe final producti.e. the quality of
the vehicle produced will be hampered. So assuring that the quality of raw materials
is as per the requirement it is absolutely essential to evaluate vendors on this ground.
One way what M&M follows is a six sigma quality check analysis on the bought out
parts and evaluate the vendor based on defects inparts per million.
Lead time- According to the classification of raw materials different categories
require different lead times. For example a product classified under ‘AX’ category
should have the least lead time and a product under ‘BX’ category would have a
relatively higher lead time. The vendors have to comply with the specified lead times
given to them by M&M. So a vendor is evaluated on the basis of the lowest lead time
offered and how efficiently does he adhere to the lead time agreed upon by both the
parties.
Flexibility- The vendor is evaluated on the basis of his flexibility to adjust with any
changes in the quantity, delivery schedule and or product/service design.
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Vendor rating
In M&M they do not have a vendor rating method as such provided that they have
such a large supplier base it is difficult to rate them and they believe it to be an added
cost to their balance sheet.
Vendor motivation
M& M tire to motivates it’s vendors by arranging for vendor meets wherein an official
from M&M visits the vendors factory and appreciates them if satisfactory and tries to
resolve issues with vendors if any. It also arranges for rewards and recognition
wherein the top 10 suppliers are awarded. As also shares are given to the suppliers
as a token of appreciation. This helps a lot in developing good supplier-buyer
relationship.
INVENTORY MANAGEMENT
Managing inventories is absolutely essential for any company. Improper ordering can
eat in to the profits by increasing the inventory carrying costs. But if there are not
sufficient inventories it might result in to the loss of production for a firm. Hence
inventory management is given so much importance.
Figure-12: Inventory management
Each upstream element in the supply chain not only aggregates the inflated demand
changes of all the elements fed by it but also overreacts to these demand changes
and adds its own safety margins to take care of perceived fluctuations in future
demand from downstream elements.
This helps the company in maintaining the right levels of inventory and hence
prevents excessive investment of money in the raw materials. Apart from reducing
the carrying costs this also means that the company has more money to invest and
more liquid cash at their disposal.
Total Productive Management:
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A few years ago M&M was experiencing a lot of production loss due to non-
availability of materials. While some of the material was not available other materials
were being excessively stocked. This resulted in very high inventories of materials. It
was also observed that the costs of buying the materials were very high and that in
most of the modules the company was overstaffed.
Hence it was decided by the company to implement TPM. TPM was introduced all
around the organization and all the employees were given guidelines which they had
to follow in order for the implementation of TPM to be successful.
In the initial phases the TPM activities were meant to focus on the following activities
Inventory reduction: Inventories were reduced by continuously measuring,
monitoring and reducing inventory levels. Techniques like Just In Time (JIT) were
introduced to maintain optimum levels of inventory and also to reduce the inventory
costs dramatically.
The following two methods were used in order to manage inventory levels better
Two Bin system
Kanban system
1) Material Cost Reduction:
Figure-13: Showing the cost management
There are two types of costs associated with materials these are
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Cost of materials (cost of ordering): Costs of materials include basic price,
packing costs, taxes and freight.
Cost on materials (cost of carrying): Costs on materials include Procurement
costs, inventory costs and material handling costs
1. Manpower reduction
Manpower reduction was achieved through job clubbing, job elimination and layout
changes
This is a way to ease out excess people from the organization. Jobs can be modified
so that one person can take more responsibilities. Unnecessary processes can be
eliminated so that no employees are employed for carrying those out.
M&M has done precisely that when they stopped inspecting the quality of the
material coming in by putting more importance on the suppliers by making him
accountable for his products.
Economic Order Quantity:
EOQ for them is on full truck load basis. They see to it that no transportation vehicle
comes half empty and it is utilized to its full capacity. But while determining the EOQ
the inventory levels in the stores are also considered.
Material Requirement/Resource Planning (MRP-1):
It is a computer based information system designed in M&M to handle ordering and
scheduling of dependent demand inventories. Raw materials, components, parts,
tools required for the production of one particular part of the vehicle say engine or
axle is termed as dependent demand inventories. A production plan for a month of
finished products in the form of master production schedule is translated into
requirements of components parts and raw materials working backward from the due
date using lead times and other information hence, requirements of end items
generate the requirements for lower level components which are broken down by
weeks so that ordering production and assembly can be scheduled accordingly.
Basis and input on which MRP runs:
Schedules: M&M's area offices update the demand plan on a weekly basis. SAP-
SCM can take into account regional demand variation, using its optimizer capabilities
to decide which plants will make what and synchronizing the procurement schedules.
M&M runs supply planning capability based on the changing demand pattern, with
27
results transmitted to MRP and posted to the private vendor Web sites. This way the
suppliers can keep up-to-date on likely plant consumption. Vendors don't supply
based on this information – the rolling plan only alerts them to what they should be
prepared for. All material flow from the suppliers is pull based, triggered by actual
consumption at the plant end.
Physical stock- it is the stock that is being seen on the system and which should
tally with the physical stock in the stores of all the unused components, parts, tools,
etc.
Bill of materials- for the production of any one part of the vehicle (engine, wheel,
axle) the number of raw materials used for its production will be reduced
automatically from the systems according to the number of units produced. The bill of
materials is the number of raw materials required for the production of 1 part of the
vehicle. If for example manufacturing an engine requires 450 parts but bill of
materials accounts for only 440 parts then the system stock and the actual stock
would not tally leading to shortfall in inventory.
Safety stock- it shows the number of raw materials which are more than the
requirement and available in case of emergency.
STORES MANAGEMENT
The store in M&M is decentralized with each production unit having their own stores.
All the stores in each of the units are next to the road so that loading and unloading
becomes easier. Also the materials can be protected from damage in this case.All
the bought out parts and work in progress inventories are kept in the stores.
The stores are divided into 3 sections depending upon its functions-
1. Receiving stores: the receiving stores is where the goods are received from
the vendors by trucks. The truck unload the contents at this area which is also
called as ‘dock’. The trucks directly unload the contents into palates.
2. Main stores: main stores is where the raw materials are stored. The COMB
type layout is followed in the main stores.
3. Finished goods stores: finishedgoods stored in this case are the processed
parts which are manufactured in the respective production units. They are
then taken to the main assembly line for assembly.
Features of stores:
28
Stores are properly ventilated with tube lights and fans.
They use an instrument that measures luminosity in the evening. Accordingly
more lights are provided.
The materials are kept in racks.
Stock verification
Stock verification is done once a year on 31st January. On this day the production is
stalled, the entire SAP system is closed, material procurement and dispatch is halted.
All the employees from all the departments then engage themselves in stock
verification. Thus they follow fixed or periodic inventory method.
Stock valuation
They follow actual price method of stock valuation for raw materials wherein oldest
stock is issued first. In this method materials are issued at actual cost and are valued
also at the same cost by keeping an account of the receipt of all the raw materials.
Material handling
Material Handling Equipment in M&M traditionally consisted of trolleys, conveyors,
forklifts, overhead travelling cranes etc. These were primarily devices of
Mechanisation; a lot of manual intervention was involved. These had limitations like
low speed, handling problems like scratches, chipping, breaking, difficulty to monitor
material flow etc.
However, they were adequate in mass production with limited variety or low volume
production. Customers were tolerant of defects like scratches, dents etc. With
transformation of manufacturing systems to be lean, agile and highly automated,
things are changing. Increased competition increases variety of components (for
product customisation ), reduces lot size, varies product mix continuously ( pull type
manufacturing ).
Since the logistics now become complex, there is a tendency to INTEGRATE
material handling systems so that they can communicate with each other - as well as
with processing machines, inspection devices, assembly stations.
In M& M they have these aisles i.e roads constructed inside the plant for identification
of safe and danger zones
Red aisle: it is put for personnel/goods movement
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Green aisle:it is put where machines/production/assembly takes place
Yellow: it is usually used as borders to distinguish clearly between red and green
aisles
Features of material handling
In M&M plant a mezzanine floor has been put up all over the stores and it is
fire resistant. It also helps in optimum usage of the floor space.
The concept of unit load is being depicted by keeping boxes of same
materials under palates and them systematically arranging them one above
the other. Thus the number of items or bulk material is so arranged that mass
can be picked up and moved as a single object. It helps in quick and easy
movement of a lot of items than individual items.
For glass equipments they a separate storage space.
According to them material handling equipment should be such that it helps in
reducing the manufacturing cycle time and minimum fatigue is required.
Moreover they have a stores department in each production unit which helps
to reduce the material handling costs.
Lastly for all the material handling equipments they give proper training to
their personnel to avoid any mishaps and to carry out safe operations.
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MAHINDRA XYLO
Making the Mahindra Xylo meant challenging the limitations of every car before it. It
meant determining the needs of our consumers. And pioneering technologies to meet
those needs. The Mahindra Xylo was meant to be built around you, out of your
needs.
And it took 160 engineers to do just that. Engineers that were handpicked from
across the country. Each of them regarded as an expert in their own field of
automobile development. These engineers spent time with customers across the
country, observing their interaction with vehicles. They identified need gaps and
invented solutions to fill in these gaps. And the result was India's first car to be built
inside out. Every need was catered to, every requirement met. And once the interiors
were done, the exteriors began.
A lot of research and development has gone into bringing the Mahindra Xylo from the
drawing board to 'on road'. And every manufacturing process has been optimised to
handle this special car's special requirements. Like the body assembly procedures
that are fully automated to ensure incredible levels of accuracy. So you can be sure
that extra thought and effort have gone into making the Mahindra Xylo perfect in
every way
E2
Exterior
Ski rack – (N/A)
Body coloured electric Outside rear view mirrors –BLACK (stalk)
Fog lamps – (N/A)
Rear fog lamps – (N/A)
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Wheel Cover – (silver painted)
Side body cladding – (N/A)
Coloured Bumpers– (N/A)
Coloured Grill – (N/A)
Coloured Handles & outside rear view mirrors & footstep end caps –
(N/A)
Rear wash & wipe (rear wiper) – (N/A)
Interior
Digital Clock
Digital Drive Assist System – (N/A)
Roof console for spectacle holder – (N/A)
Mobile charging points (front on IP)
Courtesy lamps (1+1)
Rear glass embedded antenna – (N/A)
Seat & Interior Trims
Theatre Style Seating (8)
Flat bed front seats
Armrest for driver and co-driver – (N/A)
3 position lumbar support for front & middle captain seats – (N/A)
Height adjustable driver seat
Foldable flight trays – (N/A)
Foldable arm rest in the middle and last seat with utility space – (N/A)
Seat material made of PVC
8 front facing seats
Safety
Tubeless tyres
intellipark reverse assist – (N/A)
32
Engine immobilizer (Transponder based)
Comfort & Convenience
HVAC
Surround cool dual AC’s – (N/A)
Floor console (half)
Power steering
Puddle lamp on front & rear doors – (N/A)
Tilt steering
Keyless entry – (N/A)
Central locking
Illumination ring
Power window
Power window express up/down (driver side) with anti-pinch – (N/A)
Two DIN audio system – (N/A)
Rear defogger – (N/A)
Electric remote fuel lid opener
E4
Exterior
Ski rack – (N/A)
Body coloured electric Outside rear view mirrors –BLACK (stalk)
Fog lamps – (N/A)
Rear fog lamps – (N/A)
Wheel Cover - Cap
Side body cladding
Coloured Bumpers– (N/A)
Coloured Grill – (N/A)
Coloured Handles & outside rear view mirrors & footstep end caps – (N/A)
33
Rear wash & wipe (rear wiper)
Interior
Digital Clock
Digital Drive Assist System – (N/A)
Roof console for spectacle holder
Mobile charging points (front on IP)
Courtesy lamps (1+1)
Rear glass embedded antenna – (N/A)
Seat & Interior Trims
Theatre Style Seating (7,8)
Flat bed front seats
Armrest for driver and co-driver – (N/A)
3 position lumbar support for front & middle captain seats – (N/A)
Height adjustable driver seat
Foldable flight trays – (N/A)
Foldable arm rest in the middle and last seat with utility space – (N/A)
Seat material made of fabric with PVC insert
8 front facing, 7seater (captain seats)
Safety
Tubeless tyres
intellipark reverse assist – (N/A)
Engine immobilizer (Transponder based)
Comfort & Convenience
HVAC
Surround cool dual AC’s
Floor console (half)
Power steering
34
Puddle lamp on front & rear doors – (N/A)
Tilt steering
Keyless entry
Central locking
Illumination ring
Power window
Power window express up/down (driver side) with anti-pinch – (N/A)
Two DIN audio system – (N/A)
Rear defogger – (N/A)
Electric remote fuel lid opener
E6
Exterior
Ski rack
Body coloured electric Outside rear view mirrors – Electric (Body Coloured)
Fog lamps
Rear fog lamps
Wheel Cover - Cap
Side body cladding – Body Coloured (Steel insert)
Coloured Bumpers
Coloured Grill
Coloured Handles & outside rear view mirrors & footstep end caps
Rear wash & wipe (rear wiper)
Interior
Digital Clock – (N/A)
Digital Drive Assist System (limited info)
Roof console for spectacle holder
Mobile charging points (front on IP and middle on centre console)
35
Courtesy lamps (1+1+2)
Rear glass embedded antenna
Seat & Interior Trims
Theatre Style Seating (7)
Flat bed front seats
Armrest for driver and co-driver
3 position lumbar support for front & middle captain seats
Height adjustable driver seat
Foldable flight trays – (N/A)
Foldable arm rest in the middle and last seat with utility space
Seat material made of fabric with PVC insert
7seater (captain seats)
Safety
Tubeless tyres
intellipark reverse assist
Engine immobilizer (Transponder based)
Comfort & Convenience
HVAC
Surround cool dual AC’s
Floor console
Power steering
Puddle lamp on front & rear doors
Tilt steering
Keyless entry
Central locking
Illumination ring
Power window
36
Power window express up/down (driver side) with anti-pinch – (N/A)
Two DIN audio system
Rear defogger
Electric remote fuel lid opener
E8
Exterior
Ski rack – (N/A)
Body coloured electric Outside rear view mirrors – Electric (Body Coloured)
Fog lamps
Rear fog lamps
Alloy wheels
Side body cladding – Body Coloured (Steel insert)
Coloured Bumpers
Coloured Grill
Coloured Handles & outside rear view mirrors & footstep end caps
Rear wash & wipe (rear wiper)
Interior
Digital Clock – (N/A)
Digital Drive Assist System
Roof console for spectacle holder
Mobile charging points (front on IP and middle on centre console)
Courtesy lamps (1+1+2)
Rear glass embedded antenna
Seat & Interior Trims
Theatre Style Seating (7,8)
Flat bed front seats
Armrest for driver and co-driver
37
3 position lumbar support for front & middle captain seats
Height adjustable driver seat
Foldable flight trays
Foldable arm rest in the middle and last seat with utility space
Seat material made of fabric
8 front facing, 7seater (captain seats)
Safety
Tubeless tyres
intellipark reverse assist
Engine immobilizer (Transponder based)
ABS (Anti-lock Braking System)
Comfort & Convenience
HVAC
Surround cool dual AC’s
Floor console
Power steering
Puddle lamp on front & rear doors
Tilt steering
Keyless entry
Central locking
Illumination ring
Power window
Power window express up/down (driver side) with anti-pinch
Two DIN audio system
Rear defogger
Electric remote fuel lid opener
What is that '1 big' design philosophy which was adopted for Xylo?
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Driven by our Mantra of Customer Centricity; Xylo has been Co-created with
Customers. Understanding & fulfilling the latent needs of our target customers has
been the development plank of Xylo. The Project team members have at every stage
of the Project interacted with Customers understanding the Value benefit for
everything which has gone in the making of the Xylo. The whole approach of
designing the vehicle basis an "Inside - Out" philosophy signifies that the Xylo has
been crafted around the need of our Customers for a Luxurious, comfortable Car
which makes a Style statement which the new age Customer seeks to make. We
have followed Global Product development practices like - "QFD" in which Project
team members closely interact with Customers backed by a lot of research to
understand the un-stated needs of the customers and have subjected all elements
thru a "ReFinE" process which helps deliver an emotional connect with the
Customer.
Why is the Product not being called Ingenio?
Ingenio was never to be the Brand name; it was coined as a Project name and was
inspired by one of our Customer Centric initiative called "Ingenious Drive" which was
at full stream when this Project was announced. Though in case of Scorpio we did
continue with the Project name as the Brand name as it made terrific sense in
continuing with the Project name given the Product values & positioning. In this case
we believe that Xylo has perfect fit with what values the Product would offer to its
Customers.
What does the new Brand name mean & its significance?
Xylo is trendy & contemporary. It has multiple connotations of a Planet, of Space
travel, of High Fashion, of Technology & of Melodious sound.
What all engines are expected to be offered on Xylo?
Mahindra Xylo would be powered by m-Eagle CRDe engine, an engine from NEF
CRDe family. This engine has been fine tuned for better drivability and updated with
other technological advancements like Hydraulic Lash adjuster and Auto tensioner.
What level of testing & validation has been carried on the Xylo?
For Xylo we did a lot of upfront "Virtual Validation" with over 1500+ CAE simulations
for "First Time Right Design & Development". All the lessons learnt from our earlier
Projects were also incorporated in the making of the Xylo. This coupled with having
World - Class Vendor partners on board early in the Project has helped us develop
39
the Product in a true Global sense. Apart from Virtual Validation we also have tested
the vehicles for "Real World Usage Profile" across the world from extensive trials
throughout India to South Africa, Germany and many other countries to expose the
vehicle to extreme conditions. Over 100 prototype vehicles have covered nearly a
million kms of stringent testing & validation.
Has Xylo been designed for the Global markets and would it be launched
across the World?
Xylo has been Co-created with Customers from all the Target countries. Project team
members have traveled and conducted over 1100+ customer interactions. Spending
a "Day in the Life" of the Customers to understand and deliver the latent needs of the
customers. This coupled with Global development practices like QFD supplemented
by a ReFinE process have helped us create a true Global vehicle. We are currently
evaluating which all markets would we be launching the Xylo in. In overseas markets
where we already have a presence, Xylo would definitely help us consolidate our
position.
How many variants are expected?
Xylo is being launched in 4 variants. E2, E4, E6 and E8. The prefix E is drawn from
the Engine name m-Eagle.
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BRAND PERSONALITY
A brand is “a set of expectation and association evoked from a company or product.
A brand is how your key constituents- customers, employees, shareholders etc.
experience what you do.” Some brands are of such great importance to people, that
we speak of them as a part of one’s life and identity, being used to express one.
Some would say that these brands have their own personality, the brand personality,
which can be defined as “the set of human characteristics associated with a given
brand”. Thus, it includes such characteristics as gender, age and socioeconomic
class, as well as such classic human personality is both distinctive and enduring.
Based on the premise that brand can have the personalities in much the same way
as humans, brand personality describe brands in terms of human characteristics.
Brand personality is seen as valuable factor in increasing brand engagement and
brand attachment, in much the same way as people relate and bid to other people.
Much of the work in the area of brand personality is based on translated theories of
human personality and using similar measures of personality attributes and factors.
Brand personality refers to the set of human characteristics we associated with the
brand. A common way of determining this is to reply on the metaphor: “If the brand
was a person, what would he/she be like?” we then list and group the traits to
describe the brand as, for example: caring, approachable and trustworthy. However,
there is a lot more we can do.
Because many people interact with brands as though they were other people, it is
important to understand what a brand personality consists of, and how its
characteristics can be used to affect the relationship between the brand and its user.
Knowing and understanding the brand personality gives a good insight into this
relationship, and into peoples’ attitudes towards the brand, and is also as important
guide to communicating the brand.
VALUES AND CHARACTERISTICSS OF BRAND PERSONALITY
People’s personalities are determined largely through the value and beliefs they
have, and other personality characteristics they develop. An example of value or
belief is honesty. Many people believe in being honest in everything they do and say.
An example of characteristic is confidence. This is not a belief, but more of a
behavior. There are, of course, many value/beliefs and characteristic that a person
may have, but there are some that are particularly likeable. It is these likeable values
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and characteristics that people are inevitably attracted. Examples of these include
dependability, trustworthiness, honesty, reliability, friendliness, caring, and fun-loving.
There are about two hundred words that describe personality characteristics, and these
can be used for putting personality into brands. To illustrate how people think in
personality terms when making judgments about brands, here are the results of
consumer research into how people feel about tow companies. When asked question:
“if these companies are people, how would you describe them?” their replies were:
Table-2: Replies of the company as people
Company A Company B
Sophisticated Easy going
Arrogant Modest
Efficient Helpful
Self- centered Caring
Distant Approachable
Disinterested Interested
These two companies are actually competitors in a service industry. If you were
asked of these two companies you would like to be your fiends, you would probably
choose company B, as did 95% of other respondents. It is not surprising that the
service level of company B can be better experience for customers than that of
company A. it is also easy to conclude that if customers consistently experience
these differences between the two companies, then the brand image of company B
will be much better than company A.
A further point of interest arising out of this research is that people tend to prefer
brands that fit their self-concept. Everyone has views about themselves and how they
would like to be seen by others. And they tend to like personalities that are similar to
theirs, or to those whom they admire. Thus, creating brands with personalities similar
to those of a certain group of consumers will be an effective strategy. The closer the
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brand personality is to the consumer personality (or one which they admire or aspire
to), the greater will be the willingness to buy the brand and deeper the brand loyalty.
The Creation of Brand Personality
Brand personality traits are formed and influenced by any direct or indirect contact
that the consumer has with a brand. A brand, unlike a person, cannot think, feel or
act. A brand has no objective existence at all; it is simply a collection of perception on
the mind of the consumer. Consumers accept the marketing actions to humanize
brands. One explanation fort this can be found in the theories of animism, which
suggest that there exists need by people to anthropomorphize objects in order to
facilitate interaction with the nonmaterial world. Anthropomorphize occurs when
human qualities are attributed to non human objects, e.g. brands. Consumers easily
assign personality quality to inanimate objects like brands in thinking about the
brands as if they are human characters.
In a direct way, personality traits are associated with a brand by the people
associated to that brand. One direct way to form and influence brand personality is
user imaginary. User imaginary is defined as the set of human characteristics
associated with the typical or stereotype user of the brand. Associations with the
company employees or CEO and the brand’s product endorsers are also direct ways
by which brand personality traits are formed and influenced. The personality traits
that of the people associated with a brand are transferred directly to the brand. The
theories of animism describe another process mechanism that directly explains the
specific ways in which the vitality of the brand can be realized (Fournier, 2004).
Spokespersons that are used in advertising can have personalities that fit those of
the brand they advertise. Over time, the personalities of the spokesperson are
transmitted to the brand. The brand-person associations can also have a more
personal nature. Brands can be associated with person who use or used that
particular brand, for example a close friend or a family member. Also, brands
received as gifts can also be associated with the person from whom the gift was
received. These person associations serve to animate the brand as a vital in the
minds of the consumers. Obviously, this aspect is much less under the control of the
marketers.
Indirectly, the brand personality is created by all the elements of the marketing mix.
Betra, Lehman and Singh suggest that the personality of a brand is created over
time, by the entire marketing mix of the brand - “its price (high or low, odd or even),
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retail store location (imaginary associations), product formulation (ingredients,
benefits), and product form (solid/liquid. Etc.), packaging details (color, size, material,
shape), symbol; used an all phases of the brand communication, sales promotion,
and media advertising”.Another form of animism explains how brand personality is
created in a more indirect way. This form of animism involves complete
anthropomorphization of the brand object itself. Human qualities of emotionality and
thought are transferred to the brand. This is achieved with the help of the marketing
actions, especially advertising. For example, the brand character of M&M in the M&M
commercials has the capacity to laugh and joke.
One of the advantage of the brand personality is that based on their distinctive
personalities, consumers are able to differentiate between brands. Another
advantage is that the consumer can interpret the brand’s image in such a way that it
is personally more meaningful. Brand personality encourages more active processing
on the part of the consumer. Thus, the consumer put more efforts in creating and
using the brand personality. A further advantage of brand personality is that life is
given to a brand. By vitalizing a brand, another perspective of brand personality can
be examined, namely the role of a brand as relationship partner in a consumer-brand
relationship. Next we will concentrate on these consumer-brand relationships.
Whether the brand is a product or a company, the company has to decide what
personality traits the brand is to have. There are various ways of creating brand
personality. One way is to match the brand personality as closely as possible to that
of consumers or to the personality that they like. The process will be
Define the target audience
Find out what they need, want and like
Build a consumer personality profile
Create the product personality to match that profile
This type of approach is favored by companies such as Levi Strauss, who research
their target audience fastidiously. For Levis the results is a master brand personality
that is:
Original
Masculine
Sexy
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Youthful
Rebellious
Individual
Free
American
A related byproduct brand personality (for a specific customer group) such as Levi’s
501 jeans is:
Romantic
Sexually attractive
Rebellious physically prowess
Resourceful
Independent
Likes being admired
Both profile appeal mostly to the emotional side of the people’s minds- to their
feelings and sensory function. This profiling approach aims to reinforce the self-
concept of the consumers and their aspirations. The approach is ideal for brands that
adopt a market-niche strategy, and can be extremely successful if a market segment
has a degree of global homogeneity, as is the case with Levis.
Non product related brand personalities drivers
User imaginary – user imaginary can be based on either typical users
(people you see using the brand) or idealized users (as portrayed in
advertising and else were). User imaginary can be powerful driver of brand
personality, in part because the user is already a person and thus the
difficulty of conceptualizing the brand personality is reduced. For example
Charlie has a feminine, strongly independent brand personality driven by it
user imaginary. The upscale personality of Mercedes and the sexy,
sophisticated personality of Calvin Klein are similarly influenced by user
imaginary.
Sponsorship – activities such as events sponsored by the brand will
influence its personality. Swatch, for example, reinforces its offbeat, youthful
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personality will targeted sponsorships that have included the Freestyle Ski
World Cup in Breckenridge, the first International
Age – how long a brand has been on the market can affect its personality.
Thus new entrants such as Apple, MCI, and Saturn tend to have younger
brand personalities than brand such as IBM, AT&T, and Chevrolets, and it as
all too common far a major dominate brand to see as strongly and old
fashioned, a brand for older people.
Symbol – a symbol can be powerful influence on brand personality because
it can be controlled and can have extremely strong associations. Apples bitten
apple, the Marlboro cowboy, the Michelin mans all helps to create and
reinforce a personality for their brands.
Why use brand personality?
The brand personality construct can help brand strategies by enhancing their
understandings of people’s perceptions of and attitude towards the brand,
contributing to a differentiating brand identity guiding the communication effort and
creating brand equality.
Enriching understanding: The brand personality metaphor can help a
manager gain an in-depth understanding of consumer perceptions and
attitudes towards the brand. By asking people to describe a brand personality,
feelings and relationship can be identified that often provide more insight than
is gained by asking about attribute perceptions.
Contributing to a differentiating identity: Strategically, a brand personality,
as a part of a core or extended identity, can serve as the foundation for
meaningful differentiations. Advertising agencies such as Young & Rubicam
and Ogilvy & Mather routinely include a brand personality statement as a part
of their brand positioning strategy.
Guiding the communication effort: Tactically the brand personality concept
and vocabulary communication the brand identity which richness and texture
to those who must implement the identity building effort. Practical decisions
need to be made about not only advertising but packaging, promotions, which
events to associate with, and the style of person interactions between the
customer and the brand.
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Crating brand equity: The brand personality creates brand equity. The self-
expression model explains this. The model says that for certain groups of
customers; some brands become vehicles to express a part of their self-
identity. People express their own or idealized identity in a variety of ways,
such as a job choices, attitudes, options, activities and lifestyles. Brand that
people like, admire, discuss, buy and use also provide a vehicle for self-
expression.
Brand personality of cars
Are you what you drive? That is what are companies seem to be asking and in the
same breath trying to convince you about. In other words, are you the Hyundai
accent owner who commands immediate respect wherever she goes (including fro
the potential father-in-law) or are you the suave executive from the Chevrolet ad who
is ever ready to share a moment with loved one? With a plethora of new models in
the market, and generic benefits (such as space or fuel efficiency) of a particular car
segment hardly a distinguishing factor between car models, marketer are
increasingly differentiating on the emotional pay-off a particular car model/brand
provides to the customer. This, of course, varies from the segment to segment and
also on how long a particular model has been in the market.
For instance, while advertising for entry level or smaller cars tends to focus more on
the rational or functional benefits of the vehicles, the differentiations is increasingly
on the emotional benefits when it comes to high end cars. Generally, it has been
seen as one move up the value chain, the differentiation is more on the emotional
pay-off. People buy car as an extension of their personality rather than just features.
A car, in India, helps build up show off, social esteem value. The advertising would
also vary according to the segment which one is targeting,” he says. For instance,
the Chevrolet Optra ad (which depicts a young husband driving his wife to see the
moon on the occasion of Karvachauth) shows an Optra consumer as someone who
believes in family values and indulging loves ones.
“I find that typically profile of an Optra consumer is someone who is in the age group
of 35-45years and has a chauffer. He buys a car not only for himself but also for the
family and tries to make up, for not being able to spend enough time, by indulging
love ones”. The positioning goes well with the companies catch lines of “for a special
journey called life”.
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High end car maker Skoda auto too, through its advertising, attempts to connect with
its consumer on emotional level. “Car is the extension of the personality and our
advertising shows the consumer to be youthful, image-conscious and even bit a
macho. The campaign jointly made by Skoda’s marketing department and ad agency
IB&W not only communicates the quality of the brand but an appreciation for the finer
things in life. The target Skoda consumer is a SEC A1, primarily male, businessman
or someone in the senior management,” says Shashank vaid, manger (marketing),
Skoda Auto India. Surely, image building does come higher in the consumer’s
scheme of priorities when buying a new car than ever before.
The importance of brand image has risen sharply in the last few years. At the
segment level, the increase in importance is greater for the mid-size cars, indicating
the relevance of brand among the more expensive market segments. The
manufacturer need to focus more o how consumers perceive them as offering
exciting cars and being committed towards them. Contemporariness of model has a
big impact on purchase decision. The perception of the car in terms of its
performance and design, quality, sales, after sales, cost of ownership, apart from
brand image, all impact upon the purchase decision.”
As long as advertising for cars is strongly differentiated and sharply positions the
model and at the same time satisfies a define need segment, it shall have the
capability to break the clutter and creates a unique and compelling reason for
consumers to purchase. “One good example of this is Ford Ikon- the josh machine
made a tremendous impact on consumers in offering to satisfy a clear need. One can
see some more of this with a recently launched premium hatch back as well”.
Interestingly, the strategy marketer follow changes a bit when it comes to addressing
the smaller car category with the rational benefits of a brand tending to be the focal
point of the campaign. “We have found that typically a buyer for a smaller car (sub Rs
4 lac) looks for aspects such as reliability and fuel efficiency. This changes as we
move up since in case the consumer has been with the category for a longer time
and hence it is important t to talk of an emotional pay off.
A case in point is the Maruti 800 campaign in which the kids who is playing with a toy
Maruti 800 exclaims to his dad (when asked how long will he keep on running the
car), “papa ki Kara, petrol khatam hi nahin Honda.” The ad cleverly conveys that the
car just keeps going on and on. It ends with the voiceover telling us that Maruti
Suzuki is most fuel-efficient car. However in the small car segment, the rational
48
benefits magic is not always applicable. Take the case of Hyundai Santro, the
advertising of which has evolved over the years from initially conveying mainly the
functional benefits of the model to connecting with the consumer on an emotional
level now. “When we launched the Santro, we started with the positioning if the car
being a complete family car which was completely rational positioning. But then two
things happened- the product found acceptance in the market and the competition
came up with similar product in the market.
Brand image is not driven by good advertising alone but is significantly impacted
upon by the cars performance and design, quality, and the cost of ownership. Among
the three, product quality has the highest correlation with brand image. Small car
buyer seeks capability in advertising, and fuel efficiency is relatively more important
to them. Technology, innovation, and good influence premium mid-size buyers. One
reality for us in India is that the market is extremely price/value conscious. While
making purchases based on above, there is rational side, which does have an impact
on the decision on a particular make and model of car. Be it rational or an emotional
decision, consumers would have to think as a bevy of new models flood the Indian
market.
49
Chapter-
OBJECTIVES AND RESEARCH METHODOLOGY
OBJECTIVES OF THE STUDY
The research objective is a statement, which should be in precise terminology as
possible, of what information is needed. The research objective should be framed so
that obtaining the information will ensure that the research purpose is satisfied.
Research objective have three components.
Research question
The research question specifies the information the decision making needs. The
responsibility of the researcher is to make the researcher question as specific and
precise as possible. The researcher question asks what specific information is
required to achieve the research purpose, or answer the research problem. If the
research questions are answered by the research, then the information should aid
the decision maker.
Development of hypothesis
A hypothesis is a possible answer to a question. Development of hypotheses implies
generating basically alternative answers to research questions. The research
determines which of these alternative answers is correct. It is not always possible to
develop hypotheses, but efforts should be made.
Scope or boundaries of the research
Defining the scope of the research or the research boundaries ensures the desired
precision or accuracy of the result.
The researcher’s responsibility is to restate the initial variables associated with the
decision problem, that is convert the research problem, in the form of one or more
key question formats-
How
What
Where
When
50
Why
OBJECTIVES OF THE RESEARCH
The research objectives for the thesis undertaken can be defined as follows:
To determine the demographic variables of the customers of different brands
of cars.
Examine the customer perception about the cars.
To judge the satisfaction level of car owners of different brands.
The research tracks responses at following two layers
1. Product related parameters
2. Dealer related parameters
To analyze the psychographic variables of the customers of different brand of
the cars.
Ultimately have to carve out the result that “how to increase sales of Mahindra
and Mahindra automobile”.
SCOPE OF THE STUDY
It is aimed to study the car market and buying behavior of the customer. The project
is analyzed the demographic, psychographic and buying characteristics of the
customers in buying the car. It includes the detailed study of customers focusing on
the various parameters that lead to identifying and understanding the perception of
the customer in buying the car brands.
SIGNIFICANCE OF THE STUDY
A brand is a set of expectations and associations evoked from company or product.
A brand is how key constituents- customers, employees etc. experiences what you
do. Some brands are of such great importance to people, that we speak of them as a
part of one’s life and identity, being used to express one. Some would say that these
brands have their own personality, like: Mercedes, which can easily be associated
with high status and affluent owner. The brand perception, which can be defined as
the set of human characteristics associated with a given brand.
Because many people interact with brand as though they were other people, it is
important to understand what a brand perception consists of, and how its
51
characteristics can be used to affect the relationship between the brands and its
users. Knowing and understanding the brand perception gives a good insight into this
relationship, and into peoples’ attitudes towards the brand, and is also an important
guide to communicating the brand. Like apparel and lifestyles brands, a car is
extension of one’s perception. People buy cars which either matches their
personalities or those which provide them opportunities of being perceived as
somebody they aspire to be. This becomes significant as consumers move up the
value chain from small compact cars to midsize and upwards.
RESEARCH METHODOLOGY
A research process consists of stages or steps that guide the project from its
conception through the final analysis, recommendations and ultimate actions. The
research process provides a systematic, planned approach to the research project
and ensures that all aspects of the research project are consistent with each other.
Research studies evolve through a series of steps, each representing the answer to
a key question.
PRIMARY DATA
New data gathered to help solve the problem at hand. As compared to secondary
data which is previously gathered data. An example is information gathered by a
questionnaire. Qualitative or quantitative data that are newly collected in the course
of research, Consists of original information that comes from people and includes
information gathered from surveys, focus groups, independent observations and test
results. Data gathered by the researcher in the act of conducting research. This is
contrasted to secondary data which entails the use of data gathered by someone
other than the researcher information that is obtained directly from first-hand sources
by means of surveys, observation or experimentation.
Primary data is basically collected by getting questionnaire filled by the
respondents.
SECONDARY DATA
Information that already exists somewhere, having been collected for another
purpose. Sources include census reports, trade publications, and subscription
services. Data that have already been collected and published for another research
project (other than the one at hand). There are two types of secondary data: internal
52
and external secondary data. Information compiled inside or outside the organization
for some purpose other than the current investigation. Data that have already been
collected for some purpose other than the current study. Researching information
which has already been published. Market information compiled for purposes other
than the current research effort; it can be internal data, such as existing sales-
tracking information, or it can be research conducted by someone else, such as a
market research company or the U.S. government. Published, already available data
that comes from pre-existing sets of information, like medical records, vital statistics,
prior research studies and archival data.
53
Research Project Steps
Figure-14
54
Chapter-
FINDINGS AND ANALYSIS
Q1. Why you bought your present car? Please rank from the highest order of
preference
39
12
17
23
9
0
5
10
15
20
25
30
35
40
Increase indisposable
income
Better safetyat roads
Family needs Increase infamily size
Suits yourlifestyle andpersonality
Motives
Motives For buying a car
Series1
Figure-15: Motives of buying a car
Interpretation: As per the analysis shows, increase in disposable income seems to
be the most important reason for buying a car. This trend is reflected in the growth of
the Per capita Disposable income and consequently the growth of the Indian
automobile industry especially in the B and C segment cars. Similarly, the growing
family needs like working partners, increasing family size, status, etc. add to the
motives of buying a car.
55
Q2. You decided to buy a car brand because of (rate best 3 factors from 1 to 3 in
order of your preference)
Figure-16
Interpretation: Indian market is still the hard nut to crack for most of the automobile
manufacturers. Though the Indian car industry is among the fastest growing car
markets of the world still the Indian psyche is too complex for the manufacturers to
understand. The most important reason for buying a car when it comes to B and C
segment cars seems to be ‘value for money’. 32% of the respondents suggested that
affordable prices are the most important factor while purchasing a car. This is the
reason for sticking to a particular segment till the next substantial rise in the personal
disposable income. This reason is followed by ‘Value for money’ where the
customers look for the best product, best services and best repute all bundled in one
with the best deal they can strike. This explains the reason for the stagnant or
sudden growth in sale of B and C segment cars just before budget and near
occasions like Diwali.
56
PRODUCT SATISFACTION LEVEL
Q3.Please rate your existing car in terms of understated Interior Design features on a
scale of 1 to 5 where 1 = Highly Dissatisfied, 2 = Dissatisfied, 3 = Neutral, 4
= Satisfied, 5 = Highly Satisfied
Interiors for Segment B cars
3 4 43 4 4 4
3
4 44 4 3 4
3
3 33
44
3
44 4 4
4
4
4
11 1 1 3
14
3 3 3 3 3 3 3
0%
20%
40%
60%
80%
100%
MarutiEstilo
MarutiWagon
R
MarutiSwift
IndicaV2
Aveo Santro GetzCars
Lev
el o
f sa
tisf
acti
on
Adjustable Front Seat Headrest
Music System
Interior Colour
Dash Board
Leg Room
Seat Design
Figure-17
Interpretation: Interiors play a very important role in deciding the sale of a car.
Moreover, comfortable and exotic the interiors are more are the chances of its being
popular among the customers. For this reason manufacturers spend billions of
dollars every year on R&D to continuously improve the interiors of their cars. Seats,
leg room, dash board, armrests etc are few of the options which count for the
interiors. As the analysis show Getz scores substantially high w.r.t. its counterparts
on the account of music system installed. Similarly, Indica V2 races far ahead as far
as leg room is concerned. However, M&M Pessenger Car fares badly on this front.
Overall, almost all cars get a mixed response in this segment as far as the interiors
are concerned.
57
Customer Satisfacton based on Interiors of Cars
4 4 4 4 4 4 4
4 4 4 5 5 5 5
3 4 4 5 5 53
4 4 4 44
4
4
3 3 3 4 5 45
3 3 3 3 3 3 3
0%
20%
40%
60%
80%
100%
Esteem
Balen
o
Indi
go
Indi
go M
arin
a
Optra
Accen
t
Verna
Cars' Interior Parameters
Sat
isfa
ctio
n le
vel (
in %
age)
Adjustable Front Seat Headrest
Music System
Interior Colour
Dash Board
Leg Room
Seat Design
Figure-18
Interpretation: As one can see most of the respondents are quite happy with the
interiors of their respective cars. However, one striking point observed here are that
almost every car fares neutral on the adjustable front seat headset. These cars have
more leg room, come with attached music systems (Verna fares the best among all
cars on this front) combined with luxury features like TV screens, armrests at the
back seat etc. Talking about Mahindra and Mahindra’s Xylo it has a perfect blend of
interior,it seems that it has taken it from ‘D’ segment cars.A lavish interiors are
always a akin for good selling.
58
Q4. Please rate your existing car in terms of understated Safety features on a scale
of 1 to 5
Customer Satisfaction on the Safety Parameter
3 3 33 3 3 3
11
11
3
11
3
3 43
4
3 4
3
4 43
3
4 5
3 4 5 4
34 4
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
MarutiEstilo
(9)
MarutiWagonR(23)
MarutiSwift
IndicaV2
Aveo Santro Getz
Safety Parameters of Different cars
Cust
om
er S
ati
sfact
ion L
evel
( %
age
)
Intensity of front light
Aerodynamic Shape
ABS
Air Bags
Crossbar under Dashboard
Figure-19
Interpretation: It can be noted Passenger Cars Getz ,Swift and Indica V2 fight neck
to neck on almost every front, with Indica marginally better in features like crossbars
under the dashboard and Anti Brake systems. Most of the cars in this segment fare
relatively similar and very close to each other on most of the fronts.
59
Customer Satisfaction Level on Safety Parameters
4 44 4 4 4 4
1 1 3 3 4 4 4
4 44
44 4
5
3 3 33
4 43
3 3 45
4 4 4
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Esteem Baleno Indigo IndigoMarina
Optra Accent Verna
Cars' Safety Parameters
Cu
sto
mer
sat
isfa
ctio
n le
vel
Intensity of front light
Aerodynamic Shape
ABS
Air Bags
Crossbar under Dashboard
Figure-20
Interpretation: As one can see most of the respondents are quite happy with the
safety parameters of their respective cars. However, one striking point observed here
are that almost every car fares neutral on the safety parameters.
60
Q5. Please rate your existing car in terms of following parameters
Customer Satisfaction Level on the Fuel Efficiency
3 43 3 3 3 3
3
4
44 3
3 4
3
34
44 5
5
3 3 34 4 4 4
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
MarutiEstilo
(9)
MarutiWagonR(23)
MarutiSwift
IndicaV2
Aveo Santro Getz
Cars' Fuel Efficiency Parameters
Cust
om
er S
ati
sfact
ion L
evel
( %
age
)
Stability at higher speed
Pick up
Mileage
Fuel Consumption
Figure-21
Interpretation: The customer choice of the car highly depends upon the
performance and maintenance costs of the car. This is the reason why this class of
parameter was chosen for this study. And the results show that Hyundai Passenger
Car’s could give hints as how to increase pickups, stability at high speeds and
optimum fuel efficiency. M&M Passenger Car can fare out as the best car in its
segment as most fuel efficient car of all. Similarly, M&M Passenger Car fares the
best on the terms like mileage but it lags behind with few. So this segment shows a
mixed bag of response for the Fuel efficiency and mileage parameter. Indica V2
performs consistently on all the parameters and Getz fares really well on pick up
whereas it fares badly on fuel consumption. Considered this condition for Getz it
should be seen as a red signal for the manufacturers so that Getz does not end up
being like Fiat’s Palio famous as a car for ‘drinking petrol.
61
Customer Satisfaction Level on the basis of Fuel Efficiency
3 34
3 3 3 3
33
3
3 3 3 3
3 4 45 5 5 5
4 4 5 5 5 5 5
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Esteem Baleno Indigo IndigoMarina
Optra Accent Verna
Car's Fuel Efficiency Parameters
Cust
om
er S
ati
sfact
ion L
evel
( in %
age
te
rms) Stability at higher speed
Pick up
Mileage
Fuel Consumption
Fig-22
Interpretation: Segment C cars are known as hybrid car segment between the B
segments fuel efficiency with the luxury of the D class. Checking the same it seems
that most of the cars in this segment are placed much closed to each other with very
little difference here and there. Most of the cars are fuel efficient with respect to their
weights and pick ups. Indigo fares as the best car in terms of fuel efficiency. Baleno
fares a little bit behind than its counterparts as far as the stability at high speeds and
mileage is concerned.
62
6) What should be the top speed of your family car?
Figure-23
Interpretation: It suggests that the car having maximum speed more than 150kmph
is no problem as it is only plus as one could easily increase its speed when ever it is
required. Customers want their cars to be fully equipped with high speed systems.It
also signals toward the thrill part as by adding more thrill gears into their cars they
can really move ahead.
63
7) What is your preference when it comes to considering the availability of the
parts and accessories of your family car?
a. Parts and accessories available all over the country
b. Parts and accessories available only in big cities
c. Unique parts and accessories should be available on demand otherwise parts
should be available all over the country
d. If any other
Figure-24
Interpretation: Parts and accessories should be available all over the country in this
case the indigenous Mahindra and Mahindra automobile is far ahead of other
counterparts as it is evident that its showrooms and work shops are at all places
inIndia. As the respondents showed by their responses that the unique parts should
be made available on demand but the daily chores of the parts should be available
every where.It can further move ahead by opening more dealerships and showroom
so that all the parts could be made available easily throughout India.
64
Satisfaction level of customers with dealers of various car manufacturers on
various parameters
Q1. Please rate your Dealer on the understated parameters on the scale of 1 to
5 where, 1 = Highly Satisfied, 2 = Satisfied, 3 = Neutral, 4 = Dissatisfied, 5 =
Highly Dissatisfied
Distance ( Proximity)
Advertisements (Promotions)
Technical Facilities
Cost of Service
Availability of Spares
Information Provided
Service Time
Charges
Staff
Car Handling ( Delivery & service)
Assured Customer Transactions
Ambience of Service Center
Finance ( Credit) Schemes
Dealers are the middle men between a car manufacturer and its customers. Dealer
thus becomes the most important link in joining the company to its customers as he
is the person who will sell the product, will deliver it and will keep on providing the
after sales services to the customers as and when required. So, it becomes
necessary automatically to study dealer as a part of customers’ satisfaction journey
with the product called car!
Why M&M Passenger Car fares so well ahead of its competitors till date and its the
largest car company in India with the largest market share in A and B segment is
because during the protected regime it build a dealers network so strong that its yet
very difficult for most of the competitors to set up a network as large as M&M
Passenger Car. So wherever you go its not difficult to find a M&M Passenger Car
service station and a M&M Passenger Car dealer. This is how M&M Passenger Car
has maintained relationships with its customers and has been able to convert most of
them into a repeat customer. So, dealer network is something of such importance
that while studying the customer’s satisfaction profile its almost impossible to ignore
it.
65
Customer Satisfaction Level on the Basis of Dealers
5 54
45
45 4
4 4 4 45
34
4
3
4
4
4 4
44 4 4
4
2 34
1
2
4
4 2
54 4 5
4
4 4 42
4 53 3 5 4 4 4 4
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Dealers releated parameters for diff Manufacturers
Cus
tom
er S
atis
fact
ion
Leve
l ( in
%ag
e te
rms)
Hyundai
General Motors
Tata Motors
Maruti Suzuki
Figure-2
Interpretation: While buying a car, dealers ‘choice play a very important role in
deciding the company and model’s choice. So dealers act as influencers on the
complete buying behavior of the prospective customers. Among all the listed factors
M&M Passenger Car fares the best among all its counter parts in terms of dealer
density which is quite obvious. Also, the cost of service provided by M&M Passenger
Car dealers is the lowest followed by Tata Motors. Similarly, for B and C segment
cars M&M Passenger Car emerges out as the clear winner among the four car
companies studied all thanks to the vast, extensive and well managed dealer system.
66
Q2.How do you rate the brand image of your car?
1 = Very Low and 5 = Very High
Brand Image
3
4 4 4
3
5
3
0
1
2
3
4
5
6
MarutiEstilo
MarutiWagon R
MarutiSwift
Indica V2 Aveo Santro Getz
Car Brands
Cust
om
er P
erce
pti
on (
Avg
)
Series1
Figure-26
Interpretation: As per the analysis, Hyundai Passenger Car is the car whose brand
image is most preferred in the market. This is because of the reason, that it’s from
the house of Hyundai a South Korean company known for its overall image. On the
contrary Passenger Car Estilo and Aveo share the same platform on the brand
image. This can be attributed to the fact that both these cars are relatively new on the
block and market takes time to imbibe and give the brand an image. This is
established by the fact that TataIndica Car and Swift are exactly the same as far as
the image is concerned.
67
Customer Perception of Different Cars
4
3
4
3
5
4 4
0
1
2
3
4
5
6
Esteem Baleno Indigo IndigoMarina
Optra Accent Verna
Car Brands
Cust
om
er P
erce
pti
on (
Avg
)
Series1
Figure-27
Interpretation: As the analysis reveals GM’s Optra fares as the Best Car as far as
customers’ perception is concerned about the brand image of the car in the C
segment. This is because of the fact that GM itself commands an amazing brand
image among its customers. Accent and Verna both Hyundai cars share the same
position.
68
Q3.Will you recommend your car to your friends?
Customer's Ultimate Perception
73
27
0
10
20
30
40
50
60
70
80
Yes No
Customer Action ( Will you recommend your car to your friends?)
Fre
qu
ency
Figure-28
Interpretation: It seems logical that satisfied customers will someday become loyal
customers, in other words there is a positive correlation between customer
satisfaction scores and customer buying behavior. If a customer rates the car very
high in satisfying his or her needs, the car manufacturer should expect more referrals
and this is reflected in the analysis that 73% customers say that they will refer their
car to their friends even if they move to other segment or other brand.
69
Q4.Will you buy your new car in the
Customer Perception
11
17 17
23
7
6 7
12
0
5
10
15
20
25
30
35
40
Same Segment,same
manufacturer
Same Segment,different
manufacturers
UpperSegment, SameManufacturer
UpperSegment,Different
Manufacturer
Customer Actions
Val
ues C
B
Figure-29
Interpretation: The analysis shows that most people when moving to upper segment
will prefer a different manufacturer. And the next striking finding is that the customers
will prefer both same and different manufacturers in the B segment cars and there is
not much difference in the C segment also. This behavior is complex to understand
as this are the customers who have given whopping response for recommending
their car to their friends. It’s the reason why brand perception is so difficult to
understand.
70
DEMOGRAPHICS
20
41
21
17
age group
<21
21-35
36-55
>55
Figure-30
I surveyed around 50 people who belonged to various age groups. The survey of 4
age groups was done. The four age groups were:
Less than 21 years
21 -35 years
36-54 years
More than 55 years
71
MONTHLY FAMILY INCOME
33
28
19
19
monthly family
income
<50,000
50,001-1,00,000
1,00,001-2,00,000
>2,00,001
Figure-31
I surveyed around 50 people who belonged to various monthly family income groups.
The survey of 4 income groups was done. The four income groups were:
Less than 50000
50000 - 1,00,000
1,00,001 – 2,00,000
More than 2,00,001
Interpretation: Above graphs exhibits the income bracket of the sample size, as
evident the majority of the sample is in the income bracket of < 50,000 a month
income. Though none of the bracket is highly skewed, this enables the study to be
wide and not dependent on a set income class, which was a fortunately desirable
result of simple random sampling.
72
CROSS TABULATION
1) Motive to buy the car*segment car B and C
Affordable pricesTechnical Superiority over com
petition
Com
fort
manufacturer's im
age
value for money
Safety
After sales service
respondant's objective buying a car brand
0
5
10
15
20
Co
un
t
segment Car B
Estilo
Wagon R
Swift
Santro
Getz
Indica V2
Aveo
Esteem
Baleno
Accent
Verna
Indigo Marine
Indigo
Optra
Bar Chart
Figure-32
Interpretation: According to the result, I found that choice of car depends upon
these following factors: the choice of car is not driven only by intensive factors such
as brand perception but is hugely influenced by extensive factors such as price,
services, and models available, financing options etc. also the choice of the car is
largely influenced by the manufacture image. This is why Getz emerges out as a
winner in the B segment for this criteria as they provided value for money. As Getz is
from the house of Hyundai known for its technology and great design is far better
perceived as a preferred car than other cars. But a word of caution here, this
perception may or may not result in a converted sale. If Mahindra and Mahindra
starts providing the value for money as Getz is doing. Which means provide
something extra which could bring delight on customer’s face for an example: Lavish
interiors and excellent fuel efficiency; then certainly Mahindra and Mahindra can
surge-up its sales by leaps and bounds.Recommend the car to your friend*ranking of
73
Brand and company .
yes no
Would you recommend your car to your friends
0
10
20
30
40
Co
un
t
respondants' ranking of
brand and company
image
Very Low
Low
Neutral
High
Very High
Bar Chart
Figure-33
Interpretation: The graph shows that people who rank their car high or very high on
the brand image are the people who recommend their car to their friend. This is
something the car companies should look for as these people may not be the brand
loyal but are definitely the people who help a company to reinforce the brand image
propagated by the company. Ranking of Brand and Image*Segment B and C car
74
Very Low Low Neutral High Very High
respondants' ranking of brand and company image
0
2
4
6
8
10
Co
un
t
segment Car B and
C
Estilo
Wagon R
Swift
Santro
Getz
Indica V2
Aveo
Esteem
Baleno
Accent
Verna
Indigo Marine
Indigo
Optra
Bar Chart
Figure-34
Interpretation: This graph shows that how brand image is useful in making the
choice of a car especially in the B and C segment. So, M&M Passenger Car is the
car whose brand image can be on the top and it could be the most preferred car ,if
technological advances of swift, WagonR and Indica will be taken, to improve on all
related aspects.
75
Chapter-
RECOMMENDATIONS
According to the research and analysis done in this thesis brand personality alone is
not enough in many cases. Such as take case of Tata’s Grande it has the brand
personality made for the semi affluent group or say it was launched as segment C
car, but it could not live upto the expectation as people were asking for more that
were :better fuel efficiency, affordable price and looks to die for. people who rank
their car high or very high on the brand image are the people who recommend their
car to their friend. This is something the car companies should look for as these
people may not be the brand loyal but are definitely the people who help a company
to reinforce the brand image propagated by the company. For an example :Zen was
a segment –B car of the Maruti udyog Ltd company and it was a hit car and why
because the customer liked its fuel efficiency qualities, its looks, affordability, and say
it was complete value to the money. Definately people helped the company to
reinforce the brand image by recommending it to others which they had aimed at its
inception. As per the analysis ,its evident that customer satisfaction means retention
of customers, and hence customers bring word of mouth into play. Supposedly
according to analysis the best way to achieve optimum sales when your satisfied
customers bring word of mouth into play. Customers satisfaction is taken as an asset
by many customer centric corporations. Product satisfaction, After sales services
satisfaction and relationships satisfaction are the three core elements which
customers are looking for. Those who implied these elements, their cars are selling
like hotcakes. According to the analysis done, choice of car depends upon the factors
such as brand perception but is hugely influenced by extensive factors such as price,
service, and models available, financing options, its resale value, sturdiness and
looks, etc. Also the choice of the car is largely influenced by the manufacturer’s
image. Increase of sales could also be achieved by showing technology advances.
Car manufacturing companies research and development department should also
look at the disposable income of the citizens as analysis showing that most of them
belonged to income group that is below Rs.50000 per month and hence they want to
buy a car, which can suit their pockets. In this case ‘Xylo’ is the perfect example, the
indigenous company of Mahindra and Mahindra has shown greater research
acumen. As we all know that its (xylo) basic variant starts at Rs.6,75000 well within
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the reaches of the income groups. Such types of research acumen will definitely see
increase in selling. The analysis also shows that most people when moving to upper
segment of the car will prefer a different manufacturer.As for an example: Mahindra
and Mahindra don’t have upper segment car for affluent groups. In competition with
its foreign counterparts such as Toyota, GM, etc. It should also look to launch a
upper segment car such as land cruiser of Toyota company. So that the customer will
remain loyal to the company and increase in sales in its upper segment cars will also
be seen. On the other hand when talking about B or C segments cars customers,
they recommended for it and remained loyal, this also showed that how complex is it
to understand brand perception of the customers. Here one thing is for sure that
those who recommend their cars are satisfied customers. As per survey another very
important thing has come to the fore, and that is the availability of the parts and
accessories of the car. For an example :In India all the regions are not well
developed so many car manufacturing companies could not able to open their
showrooms and dealerships at remotest of the places. On this front company like
Mahindra and Mahindra can keep its nose ahead by opening its dealership in
remotest of areas and this will surge up the selling.
Safety gears, Interior design, over all looks, Fuel efficiency, Maintenance cost
incurred, etc. All these factors are very important factors with Segment-B and C as
such type of cars usually in the Indian car market are bought by income groups
whose newly increased disposable salary can afford but they put every step with
great caution while buying the car. In this case a car which has a perfect blend of all
the above mentioned factors, could easily surge-up the pace of the sales of the cars.
A very important role is played by dealers, which can always prove to be the main
reason behind selling or none selling. It is evident by the analysis that many
important cases are being handled by the dealers and hence lead to the customers
satisfaction and retention. Such as advertisements (promotions), providing technical
facilities, cost of service, availability of spares, information providing, services time,
finance credit schemes, car handling during servicing, etc .Customers are very clever
they look for the distance proximity of the dealership from their residing places as
well. This thing also lead to increase in sales or decrease in sales. So the dealership
should be made available if a company wants to increase its sales.
Mahindra and Mahindra is the leader in light commercial vehicles, including three-
wheelers. It is the market leader in utility vehicles in India since inception, and
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currently accounts for about half of India’s market for utility vehicles. The further more
market share could be captured, if it starts following aforementioned
recommendations.
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Chapter-
CONCLUSION
To conclude, the results show that the companies are playing on the peripheral cues
to maintain their Total Relationship Management and connect to the customers both
present and potential. The companies are operating in a highly aggressive and
competitive global market place and this climate has led to the emphasis on quality in
all aspects. TQM focuses on integration and coordination as well as the continuous
improvement of all activities and processes. Total Relationship Management (TRM)
is a very recent marketing strategy and philosophy. It focuses on and is concerned
with all integrated internal and external activities within and between the
organizations. These two terms are integrated by the manufacturers by building good
quality products and building good relationship with dealers and enhancing service
levels.
However, when studied from the point of view of a customer there seems to be no
major difference among the car brands in a segment as far as performance is
concerned. The brand perception is dependant mostly on the peripheral cues
depending upon the nature and quality of the service provided along with the pricing,
maintenance, availability of spare parts and related issues. So, a question arises
here that is this the end of road for the branding of cars? Has the commoditization of
cars has started and its time that manufacturers must read the writing on the wall? It
seems so! It seems as an undercurrent sentiment is flowing and the perception of the
customers is changing according to it. So this might be the reason that despite Verna
faring so high on the performance parameters still lags on the account of converted
sales. The study shows that brand perception is something which starts building up
before a car is purchased and goes on with its use and is reflected in the
recommendations the customer makes to his acquaintances for the same car. Also,
its seen that the customer might not be using the car still he holds the perceptions
about it. Brand personality of a car is enforced by the sellers in the mindsets of the
customers and the customers react to it by forming their perceptions about the car
and this reflects in the overall brand image of the car. So brand image and brand
personality complement each other and the brand perception aids the building of
brand image.
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Dealers, as per the study findings, play a very important role in building up the brand
perception of the cars. Since dealers are the connecting link between the customers
and the manufacturers thus becoming the most important link in joining the company
to its customers as he is the person who will sell the product, will deliver it and will
keep on providing the after sales services to the customers as and when required.
So, it becomes necessary automatically to study dealer as a part of customers’
satisfaction journey with the product called car! Their proximity to the customers, the
service provided by them and the relationship maintained by them with the customers
helps the car companies to establish and reinstate the brand personality
communicated by them to the customers.
Finally the major point that emerges out of this detailed study is a caution for the car
companies ,what are the do’s and what are the don’ts ?ultimately, “ how to increase
passenger car sales?”, the answer lies within this result of this research. It says that
there is no doubt that Indian car market may be growing with a double digit figure still
the car companies have a long way to travel to convince their customers about the
brand personality of their cars and how it suits the prospective buyers. Simply
because it simply is not a guarantee that how so ever good the customer might be
holding the brand perception and how so ever good the brand image may be it is not
a guarantee that it will convert into sale. Cars just like clothes and accessories suit
the style and persona of a person and since all cars will become commodity
someday the key to sell and excel in the market will lie with a person who knows how
to use the perceptions of the customers to its use and sell the cars ‘coz ultimately
only that car survives which sell.
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BIBLIOGRAPHY
Sites Visited -
www.siamindia.com
www.autocarindia.com
www.overdrive.com
www.mahindraandmahindra.com
www.ibef.org
a. Book referred to
Philip & Kotler: Marketing management
b. Journals
HBS (Harvard business review)
c. Magazines
Companies research paper
Business Today
d. Internet
i. Sites
(1) www.marketingtimes.com
(2) www.maruti.com
(3) www. Hyundai.com
ii. Search Engines
www.google.co.in
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APPENDICES
QUESTIONNAIRE
For Customers:
Q1. Why you bought your present car? Please rank from the highest order of preference
1. Increase in disposable income
2. Better safety at roads
3. Family needs
4. Increase in family size
5. Suits your lifestyle and personality
Q2. You decided to buy a car brand because of (rate best 3 factors from 1 to 3 in order of your preference)
1. Affordable price
2. Technical superiority over competition
3. Comfort
4. Manufacturer’s image
5. Value for money
6. Safety
7. After sale services
Product Satisfaction Level
Q3.Please rate your existing car in terms of understated Interior Design features on a scale of 1 to 5 where
1. Highly Dissatisfied
2. Dissatisfied
3. Neutral
4. Satisfied
5. Highly Satisfied
Interior Type 1 2 3 4 5Seats designLeg Room Dash BoardInterior ColourMusic SystemAdjustable Front seat Headrest
Q4. Please rate your existing car in terms of understated Safety features on a scale of 1 to 5
Safety Parameters 1 2 3 4 5
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Crossbar under Dashboard
Air Bags
Anti Lock Breaking System
Aerodynamic Shape
Intensity of front lights
Q5.Please rate your existing car in terms of following parameters
Parameter 1 2 3 4 5
Fuel Consumption
Mileage ( Km/ltr)
Pick Up
Stability at higher speed
Top speed
6)What should be the top speed of your family car?
(a) 160kmph
(b) 150kmph
(c) 140 kmph
(d) 130 kmph
(e) between 110 to 125kmph
7) What is your preference when it comes to considering the availability of the parts and accessories of your family car?
a. Parts and accessories available all over the country
b. Parts and accessories available only in big cities
c. Unique parts and accessories should be available on demand otherwise parts shouldbe available all over the country
d. If any other
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Customers satisfaction levels with dealers of car manufacturers on various parameters
Q8. Please rate your Dealer on the understated parameters on the scale of 1 to 5 where
1. Highly Satisfied
2. Satisfied
3. Neutral
4. Dissatisfied
5. Highly Dissatisfied
1 2 3 4 5
Distance ( Proximity)
Advertisements (Promotions)
Technical Facilities
Cost of Service
Availability of Spares
Information Provided
Service Time
Charges
Staff
Car Handling ( Delivery & service)
Assured Customer Transactions
Ambience of Service Center
Finance ( Credit) Schemes
Q9.How do you rate the brand image of your car?
1 2 3 4 5
Very Low Very High
Q10.Will you recommend your car to your friends?
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Yes
No
Q11.If yes, will you buy your new car in the
Same segment , same manufacturer
Same segment, different manufacturer
Upper segment, same manufacturer
Upper segment, different manufacturer
Age group:
<21 21-35
36-55 >55
Q12What is your monthly Family income?
Less than 50000
Rs 50,000 –Rs 1, 00,000
Rs 1, 00,001– Rs 2, 00,000
More than Rs 2, 00,001
Number of car’s owned:
Present Car (s) owned:
NAME: GENDER:
Phone No:
85
GGSIPU
PROJECT REPORT ON
CONSUMER PERCEPTION STUDY WITH RESPECT
TO MAHINDRA & MAHINDRA
SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF THE DEGREE OF BACHELORS OF
BUSINESS ADMINISTRATION (BBA)
TO
GURU GOBIND SINGH INDRAPRASTHA UNIVERSITY
DELHI
JAGANNATH INTERNATIONAL MANAGEMENT SCHOOL OCF
POCKET 9, SECTOR-B,VASANT KUNJ
NEW DELHI-110070
PROJECT REPORT
86
ON
CONSUMER PERCEPTION STUDY WITH RESPECT TO
MAHINDRA & MAHINDRA
MENTOR SUBMITTED BY:Mrs. ANJALI SHARMA PRIYAVART SHARMA ENROLLMENT NO. 0931421708 BBA-3
87
CERTIFICATE
The project entitled “CONSUMER PERCEPTION STUDY WITH RESPECT TO
“MAHINDRA & MAHINDRA” is Hereby approved as a bona fide work carried out and
presented by PRIYAVART SHARMA in a manner satisfactory a warrant it
acceptance to the degree after which it has been submitted. It is understood that by
this the undersigned do endorse or approve any statement made, opinion expressed
or conclusion drawn therein, but approve the project work only for which it has been
submitted.
SIGNATURE OF THE TEACHER
ACKNOWLEDGEMENT
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I wish to extend my deep sense of gratitude to my guide Mrs. ANJALI
SHARMA for providing me with valuable guidance and motivation to
make the project work as a highly useful and knowledge based
experience.
Last but not least I would like to thank all the faculty members of JIMS,
VASANT KUNJ and friends who in one way or other helped me in
bringing out this project work as a successful one.
PRIYAVART SHARMA
ENROLLMENT NO.0931421708
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ABSTRACT
The automobile industry today is one of the most lucrative industry. Due to the
increase in disposable income in both rural and urban sector and easy finance being
provided by all the financial institutes, the passenger car sales have increased at the
rate of 25% per annum in June 2005-06 and at the rate of 37% per annum in june
2006-07 . Further competition is heating up in the sector with a host of new players
coming in and other like Porsche, Bentley, Audi, and BMW all set to venture in the
Indian markets. One factor that could help the companies in the marketing of their
product is by knowing and creating a personality for their brands. An attempt could
be taken to answer some of the questions regarding brand personality of selected
cars in India by conducting the market research. This comprehensive study is
categorized into parts, deals with introduction to brand personality, companies
selected, product and the industry.
One factor that could help the companies in the marketing of their products is buying
behavior of the consumers. The Buying Behavior of the customers can be studied by
knowing their perceptions about the cars in the market and about the possible
entrants in the market. One such technique is by knowing and creating a personality
for the brands. This personality sketching will help in knowing what a customer (or a
potential customer) thinks about a given brand of car and what are the possible
factors guiding a possible purchase. Similarly, the idea of measuring the customer
satisfaction will serve the same purpose of determining the customer perception.
Thus, by measuring the” willingness of existing users of a car to recommend it to
others” will help the car manufacturers to chalk out the entire Customer Buying
Behavior.
The thesis shall attempt to answer some of the questions regarding “how to increase
passenger car sales”, specially talking about our own Indian automobile company
Mahindra and Mahindra. By conducting a survey we could know the brand
personality of selected cars in India and many more factors which could increase the
passenger car sales. The market research will be helpful for the new car entrant
companies in India as well to find out the possible gaps between the customer
expectations and the present market offerings. This way Mahindra and Mahindra
automobile Ltd will be able to increase their share in the ever-expanding Indian
market pie.
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The research will track the customer satisfaction in the following two layers:
Product related Parameters &Dealers related parameters
The customer satisfaction index will be calculated for the car brands taken into
consideration.It will be mainly a primary research and the information will be gathered
from both primary and secondary research. The study will analyze the applicability of
existing research concepts, theories, and tools for evaluating consumer satisfaction.
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TABLE OF CONTENTS
1 Abstract 2-3
2 Signatory Page 4-7
2 Acknowledgements 8
3 Table Of Contents 9
4 List Of Figures 10-11
5 List Of tables 11
5 Thesis Synopsis 12-13
6 Introduction 14-18
7 Overview of Auto Segment 19
8 Size And Share Of The Automobile Market 20-28
9 Company Profile & Logistics 29-48
10 Brand Personality 49-58
11 Objectives of Study & Objectives of Research 59-62
12 Research Methodology 62-63
13 Findings & Analysis 64-89
14 Recommendations 90-92
15 Conclusion 93-94
16 References 95-102
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LIST OF FIGURES
Serial No. Figures Page No.1 Major attributes of customer satisfaction 162 The buying Process 173 Three core elements of satisfaction 18
4-5 Indian Automobile Industry size& Indian Automobile Industry product
21
6 Indian Automobile Manufacturers in India and Plant Locations
23
7 Automobile Manufacturers Market Share 258 Domestic Sales of Cars 289 Information of Flow of supply chain 31
10 Showing the demand forecasting 3211 Central Production and Planning Control 3412 Inventory management 4213 Showing the cost management 4314 Research Project Steps 6215 Motives of buying a car 6416 Product specific reasons for buying a car 6617 Liking for the interiors of the segment B cars 6818 Cars interior’s parameters 69
19-20 Safety parameters of different cars 71-7221-22 Car fuel efficiency parameters 73-74
23 Top speed of family car 7524 Availability of parts of family car 7725 Dealer related parameters for different
manufacturers80
26-27 Brand image of the cars & perception of different cars
81-82
28 Customer action :recommending car to friends 8329 Segment wise customer perception 8430 Demographic: Age wise perception 8531 Monthly family income 8632 Respondents objective buying a car brand 8733 Recommending a car to your friends 8834 Respondents ranking of brand and company image 89
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LIST OF TABLES
Serial No. Tables Page No.
1. Explains the growth of India Car Sale. 26-27
2. Replies of the company as people 50
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