CB_FN_Group1(Study of Consumer Buying Behaviour and Perception in Gearless 2 Wheeler Segment) (1)

8/2/2019 CB_FN_Group1(Study of Consumer Buying Behaviour and Perception in Gearless 2 Wheeler Segment) (1)

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Study of Consumer Buying Behaviors and Perceptions in

Gearless 2-Wheeler Segment

Section: Finance

GROUP 1

Team Members

Ankit Rungta (10FN-016)

Akanksha Singh (10FN-008)

Chandan Rathor (10FN-033)

Aditya Singh (10FN-005)


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Executive Summary

Objective:

To study the buying behaviour of the Indian consumer for gearless 2-wheelersegment and analyze the same to get insights into consumer psychographics and

demographics.

Type of research:

Primary research

Methodology:

A questionnaire was prepared and a survey was conducted to study attribute

importance and profile of consumers interested in the gearless 2-wheeler segment.Factor analysis was also done.

Demographics:

57% of the respondents were female and 43% male Roughly 45% of the respondents covered were students The average respondent was single, female, a student of less than 25 years

of age and belonging to the upper middle-class

The data collected was mined/analyzed for deeper insights into consumers

psychographic profiles, buying behaviour, important decision-making criteria andpreferences. Some conclusions follow-

Respondents belonging to the lower-middle-class showed a majority of75% who would consider buying a scooty and 21% not interested

50% of male respondents were interested in scooties while 71% of femalerespondents showed their support for the segment

Only a minority of 22% relate scooties to the value propositions offered byHero Honda Pleasure viz. girls, style and fun

The ego-defensive function is satisfied for another 16% of respondents byscooty as a product


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CONTENTS

References ..26


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Acknowledgements

We would like to express our sincere thanks to Assistant professor Dr. Bikram Jit

Rishi for his constant encouragement and guidance during this project. He hasbeen a constant source of inspiration and has helped us at each step of the project.

He has been very kind and patient while suggesting us the outlines of this project

and correcting our doubts. We are highly grateful for all the time and effort he put

in for discussions and reviews. His constructive criticism of approach to the

problem and the result obtained during the course of this work has helped us to a

great extent in bringing our work to its present shape.

We would also like to show our gratitude to all the people who participated in the

survey conducted and, despite their busy schedules took pain to fill the

questionnaire. Without them we wouldnt have been able to do any analysis and

are highly indebted to them.


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Introduction

The Macro View:

The automotive industry in India is one of the largest in the world and one of the

fastest growing globally. India manufactures over 17.5 million vehicles (including

2 wheeled and 4 wheeled) and exports about 2.33 million every year. It is the

world's second largest manufacturer of motorcycles, with annual sales exceeding

8.5 million. As of 2010, India is home to 40 million passenger vehicles and more

than 3.7 million automotive vehicles were produced in India in 2010 (an increase

of 33.9%), making the country the second fastest growing automobile market in

the world.

A total of 9.4 m two-wheelers were sold in India in FY10, a growth of a strong

27% over the previous year. Motorcycles accounted for 78% of the total twowheelers sold. Although economic growth came in much below than 9%, low

interest rate, availability of credit and a low based effect helped two wheeler sales

to grow strongly. The scooters (geared & ungeared) improved their sales

considerably, largely due to improved performance of the ungeared scooter

segment.

Key Players:

The largest player in the two wheeler industry for eight consecutive years, Hero

Hondacommands a lion's share in the category. It has a market share of 41.35%

and volume size of 37.2 lakh units in '09-'10.

The second largest player in the industry is Bajaj Autowhich registered a growth

of 25% in volumes by selling 24.02 lakh units in '09-'10. The company saw its two

wheeler market share touch 26.70% in 09-10.

TVS Motors cornered a market share of 18.94% backed by sales of 17.04 lakh

units.

In addition to the 'big three' there are a number of small players fighting for

salience viz. Kinetic, Yamaha, Suzuki, LML etc.

In a nutshell the followings factors can be distinguished for the growth of 2-

wheeler industry in India:

1) Easy accessibility to cheap consumer loans2) The increase in the average income of the family.3) The reduction in duties and taxes.


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4) Convenience with regards to commuting as compared to the publictransport system.

5) Continuous innovations in technology making the bikes economic and fuel-efficient.

6) The first choice among youths and teenagers.Market Share:

Source: Indian Auto Industry Two-wheeler Segment in India by india-

reports.in on February 20, 2010


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Research Methodology

Type of Research:

1) PrimarySurvey to gain insight into the buying behavior and perception in the

gearless two-wheeler segment

2) SecondaryA study of current marketing practices with focus on Hero Honda

Pleasure to relate to insights gained from survey

Questionnaire Design:

No of distinct questions = 14 Reverse flowerpot approach used for structure(Closed-ended to Open-

ended questions)

Demographic profiling done (5 questions) Attitude towards the segment (4 questions) Attitude towards and perception of the brands (2 questions) Cognitive needs and perceptions of respondents (2 questions with series of

attributes on the Likert scale)

Sampling:

Type of Sampling: Convenience sampling (online)

No of respondents: 37

Statistical Tools Used: SPSS for Factor Analysis


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Observations

Demographic Profile


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Summary:

21 female and 16 male respondents A decent mix of professions dominated by students at around 46% Sample is skewed towards youngsters with 26 respondents at 25 years or

below. However, this is relevant for this particular study as Hero Honda

Pleasure focuses on the youth segment, in particular, the young girls.

Effectiveness/ineffectiveness of current communications of the brand may

be roughly estimated

78% unmarried respondents. However, this study does not attempt to studythe marital status demographic as it seems less relevant for the category.

65% belonged to the lower-middle class while 35% belonged to the upper-middle class. It is assumed that the people interested in buying scooties

would belong to the middle class in almost all cases. The segregation into

the two sub-classes was achieved based on the ownership of products and

assets like car, AC, house, etc.


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Attitude towards the scooty segment


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Summary:

Overall, 62% of the respondents said they would consider buying ascooty, while 30% would not consider buying a scooty and 8%

undecided

Respondents belonging to the lower-middle-class showed a majority of75% who would consider buying a scooty and 21% not interested

On the other hand, the upper-middle-class shows milder interest at 38%while 46% would not consider buying scooties at all

The disparity of opinion between the two sub-classes may be attributed toprior ownership of substitutes like car and motor-cycles in the upper-

middle-class segment


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50% of male respondents were interested in scooties while 71% of femalerespondents showed their support for the segment

The figures for female interest may have been lower due to lower interest inthe upper-middle-class or dissatisfaction with past performance. There were

also a few respondents worried about road safety.

Frequency of Use

The frequency of use is based on the experiences of users of scooties andexpectations/requirements of potential buyers. As much as 70% of the

respondents showed some requirements and could indicate greater market

potential.

It must also be considered that some of these requirements are currentlyfulfilled through competitor products or substitutes like cars, motorcycles,

scooters and other scooties


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Factors influencing Motivation

Only a minority of 22% relate scooties to the value propositions offered byHero Honda Pleasure viz. girls, style and fun

78% of respondents were interested in scooties because of its utilities orjust because they need it

This may indicate a flaw in the current marketing strategy of Hero HondaPleasure, not to mention other brands in the segment, most of which use the

indirect approach of communication.

We must not consider the only-for-girls strategy a failure outright. It mustbe noted that Hero Honda Pleasure gauged consumer perception and

realized that while motorcycles where targeted at men, no vehicle appealed

to women directly. The innovative strategy of Pleasure, launched in 2006

was closely imitated by several competitors. Pleasure gained a respectable

market share, offering stiff competition to established brands like TVSScooty Pep and Honda Activa.

Hero Hondas biggest innovation was to set up showrooms exclusively forwomen. Just 4 Her is staffed entirely by young saleswomen and intended tomake customers feel comfortablethey can even take a test drive awayfrom a male sales clerks condescending eyes.


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Pleasure scooterswhich cost about Rs43,000 ($970)account for over26,000 of the more than 400,000 two-wheelers that Hero Honda sells eachmonth. About 10 per cent of sales are made through the Just 4 Hershowrooms.

However, it is perhaps time to look beyond the young girls for a largercustomer base

Word-Association Tests

Two open-ended word association questions were put to the respondents togain a preliminary insight into the attitude of customers towards scooties

and their perception of the Pleasure brand.

The stereotype of scooty for women seems to become less popular, withonly 16% relating scooties to women

The ego-defensive function is satisfied for another 16% of respondents byscooty as a product

46% however view the scooty simply for its utility and requirement in dailylife


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A respectable 68% hold a positive to very favorable perception towardsPleasure as a brand

19% of respondents have an indifferent or negative stance, possibly due tonon-requirement of the product or past dissatisfaction

14% of the respondents could not be categorized into positive and negativeopinionated groups due to vague responses


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Brand Recall

It is found that respondents were more familiar with brands like HondaActiva and TVS Scooty than Hero Honda Pleasure. Nevertheless, around 65% of respondents recalled Hero Honda Pleasure as

a brand compared to over 90% respondents recalling TVS Scooty and

Honda Activa


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The hiring of Priyanka Chopra as brand ambassador has been relativelymore effective than other competitors using celebrities. Around 66% of

respondents remembered the Hero Honda Pleasure advertisement.

Factor Analysis

The data obtained through the questionnaire administration was subject to various

analyses to understand its validity and infer some meaning out of them.

Data Analysis using SPSS:

KMOs adequacy test and Bartletts Test of Sphericity:

The Kaiser-Meyer-Olkin measure of sampling adequacy tests whether thepartial correlations among variables are small. Bartlett's test of sphericity

tests whether the correlation matrix is an identity matrix, which would

indicate that the factor model is inappropriate.

The KMO measures the sampling adequacy which should be greater than0.5 for a satisfactory factor analysis to proceed.

Another indicator of the strength of the relationship among variables isBartlett's test of sphericity. Bartlett's test of sphericity is used to test the null

hypothesis that the variables in the population correlation matrix are

uncorrelated.

Case Processing Summary

N %

Cases Valid 37 100.0

Excludeda

0 .0

Total 37 100.0

a. Listwise deletion based on all variables in the procedure.

Reliability Statistics


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Cronbach's

Alpha N of Items

.848 10

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of

Sampling Adequacy.

.617

Bartlett's Test of

Sphericity

Approx. Chi-

Square

164.9

67

df 45

Sig. .000

Interpretation: KMOs test: Value of KMO is above 0.5 hence we can accept the

sample taken as adequate ( as per Kaiser (1974))

Bartletts test: The observed significance level is .0000. It is small enough to reject

the hypothesis. It is concluded that the strength of the relationship among variables

is strong. It is a good idea to proceed a factor analysis for the data.

Total Variance Explained

Compon

ent

Initial Eigen values

Extraction Sums of

Squared Loadings

Rotation Sums of

Squared Loadings

Tot

al

% of

Varian

ce

Cumulativ

e %

Tot

al

% of

Varian

ce

Cumulativ

e %

Tot

al

% of

Varian

ce

Cumulativ

e %

1 4.32

1

43.208 43.208 4.32

1

43.208 43.208 2.72

6

27.256 27.256

2 1.35

6

13.556 56.764 1.35

6

13.556 56.764 2.34

6

23.464 50.720

3 1.25

2

12.519 69.283 1.25

2

12.519 69.283 1.85

6

18.563 69.283


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4 .833 8.333 77.616

5 .643 6.428 84.044

6 .515 5.154 89.198

7 .437 4.374 93.573

8 .385 3.848 97.421

9 .141 1.413 98.834

10 .117 1.166 100.000

Extraction Method: Principal Component Analysis.

Interpretations: This shows that there are 3 factors which have now been formed

(1.00 being the threshold value to include a factor).


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Rotated Component Matrixa

Component

1 2 3


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Which of these following features

should your Scooty have? [Should

be a reputable brand]

.817 .136 .291


should your Scooty have? [Shouldbe comfortable]

.730 .397



be affordable]

.686 .560



have good mileage]

.677 .449



be stylish]

.605 .200


should your Scooty have? [Vehicle

financing options should be

available]

.252 .827


should your Scooty have? [Specialpromotional offers should be

available]

.249 .774 .235


should your Scooty have? [More

storage space]

.632 .606


should your Scooty have? [Higher

top speed]

.164 .825


should your Scooty have? [Range of

colors]

.260 .289 .707


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Rotation Method: Varimax with Kaiser Normalization.

a. Rotation converged in 10 iterations.

Interpretations: Shows which question of the questionnaire are part of which

variable. For eg first five question forms one factor which is later named value for

money.

Total Variance Explained

Comp

onent

Extraction Sums of Squared

Loadings

Rotation Sums of Squared

Loadings

Cumulative % Total

1 43.208 2.726

2 56.764 2.346

3 69.283 1.856


Component Transformation

Matrix

Comp

onent 1 2 3

1 .691 .594 .411

2 -.272 -.313 .910

3 -.670 .741 .055


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Component Transformation

Matrix

Comp

onent 1 2 3

1 .691 .594 .411

2 -.272 -.313 .910

3 -.670 .741 .055

Extraction Method: Principal

Component Analysis.

Rotation Method: Varimax with

Kaiser Normalization.

From the above factor analysis, it can be found that 3 relevant factors could be

extracted from the research data. These factors are formed by a unique

combination of variables. The list of factors and the variables that are a part of the

factors are as follows:

Sno Relevant factors Original questions

1 Value for money

1. Which of these following featuresshould your Scooty have? [Should

be a reputable brand]


be comfortable]


be affordable]


have good mileage]



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be stylish]

2 Value Added Features 1. Which of these following featuresshould your Scooty have? [Vehicle

financing options should beavailable]

2. Which of these following featuresshould your Scooty have? [Special

promotional offers should be

available]

3. Which of these following featuresshould your Scooty have? [More

storage space]

3 Ego-Defensive Features 1. Which of these following featuresshould your Scooty have? [Higher

top speed]

2. Which of these following featuresshould your Scooty have? [Range

of colors]


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Recommendations

We may make some reasonable assumptions about Hero Honda Pleasuresreach to customers at different stages in the technology adoption lifecycle

Pleasures customer base consists of at least the innovators and the earlyadopters

It is also reasonable to presume that some measure of the early majority hasalso been captured for the segment based on Pleasures performance till

dateHowever, the early majority for the category most probably encompasses

all women fit to ride a vehicleIt would make sense to open up the target segment to involve more than

the young womanAttitude towards the category suggests that the most overwhelming

motivation for buying a product like Hero Honda Pleasure is its utility.Some direct communication, even if interspersed with the indirect

communication used by Pleasure presently, may be effectiveHero Honda Pleasure may also look at reestablishing itself as a unisex

brand, or launch a for-males counterpart to Pleasure, targeting men with a

view to increasing customer base.For this particular strategy, launching a male-counterpart model would be

better so as to not eat into Pleasures current market share. However, this

might be difficult in the absence of availability of capital.Although the brand may look at either of the two strategies discussed above

and choose one course of actionHowever, the preliminary evidence suggests a bias towards motivation by

cognitive features and it may be a good idea to follow the technology

adoption lifecycle and first enlist the support of older women.


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References

https://www.indiastat.org/ http://www.wikipedia.com Comstat 2007 from (www.fcbulkconstrat.com) Hero Honda Official Website www.consumerpsychologist.com/ marketingteacher.com//lesson-defining-consumer-

behavior.html
https://www.indiastat.org/https://www.indiastat.org/http://www.wikipedia.com/http://www.wikipedia.com/http://www.fcbulkconstrat.com/http://www.consumerpsychologist.com/http://www.consumerpsychologist.com/http://www.consumerpsychologist.com/http://www.fcbulkconstrat.com/http://www.wikipedia.com/https://www.indiastat.org/

Documents

CB_FN_Group1(Study of Consumer Buying Behaviour and Perception in Gearless 2 Wheeler Segment) (1)