AN EXPLAINATORY STUDY OF CUSTOMER

SATISFACTION @ VOLKSWAGEN AGRA

A PROJECT REPORT

Submitted in Partial fulfillment of the degree of requirement for the award of

BACHELOR OF BUSINESS ADMISTRATIONAND MASTERS OF BUSINESS ADMINISTRAION

Submitted by

SANANT GOYAL ENROLLMENT No: A3923009013

Under the guidance of

Dr. Ruchi JainAsst. Prof. in Management Studies

AMITY UNIVERSITYAMITY SCHOOL OF BUSINESS

CERTIFICATE

This is to Certify that the Project report on “CUSTOMER

SATISFACTION @ VOLKSWAGEN AGRA” is a bonafide work and submitted

by Mr. Sanant Goyal in partial fulfillment of the degree of Bachelor and

Master’s of Business Administration, Amity School of Business, Amity

University.

This certificate is issued based on the declaration by the candidate.

Dr. Ruchi Jain Dr. Alka Munjal

(Project Guide) (HOD)

Project Report evaluated & Viva Voice held on …………….

INTERNAL EXAMINER EXTERNAL EXAMINER

DECLARATION BY CANDIDATE

I declare that this project work on “AN EXPLAINATORY STUDY

OF CUSTOMER SATISFACTION @ VOLKSWAGEN AGRA” is a bonafide work done and submitted by me and the research work was carried out

under the guidance of Mr. Anil Mall, General Manager, Volkswagen Agra

and under overall supervision of Dr. Ruchi Jain

Asst. Prof. in Management Studies .

I further declare that this Project Report does not form of any other

project reports or dissertations on the basis of which a degree was awarded or

conferred on an earlier occasion on me or any other candidate.

Place: Noida

Date: SANANT GOYAL

ACKNOWLEDGEMENT

I express my deep sense of gratitude to our respected director Dr. Alka

Munjal for giving me a wonderful opportunity for doing Bachelor and Master’s

of Business Administration in this esteemed institution

I wish to place my deep sense of gratitude to Mr. Anil Mall, General

Manager, Volkswagen Agra. For his valuable guidance throughout the project.

I consider it a great privilege to be under the guidance of Dr. Ruchi Jain,

Asst. Prof. in Management studies, Amity University. The contribution and

significant role played by her help me in preparation and submission of project

report in time.

Last but not the least I would like to thank my parents and friends for

their valuable support and encouragement through out the course of the project.

SANANT GOYAL

CONTENTS

Chapters Page No.

1. Introduction 1

2. Company Profile 15

3. Review of Literature 19

4. Research Methodology 29

5. Data Analysis and Interpretation 35

6. Findings 55

7. Suggestions 57

8. Conclusions 59

9. Annexure I

10. Bibliography II

INTRODUCTION

Research Motivation

A multitude of companies today has already identified the need to create a

loyal customer base and acknowledges that maintaining existing customers and

extending business with them is significantly less expensive than acquiring new

customers. Empirical proof of the proliferation of such customer loyalty efforts in the

business world is e.g. provided in the form of loyalty programs, which many

companies have installed during the past years. By engaging in efforts aimed at

creating customer loyalty, which in turn fosters financial success in monetary terms

firms react to increasing competitive challenges.

Within research, the investigation of customer loyalty gained importance when

the classic marketing paradigm with its instrumental and transactional orientation

proved unsuitable in the context of longer-term business relationships. Instead, the

relationship marketing approach, which is specifically concerned with the study of

relational ex-changes, gained importance within research, serving as a conceptual

foundation for the majority of customer loyalty researchers.

The question of how loyalty develops has been subject to an abundance of

research, leading to an expansive body of literature on loyalty determinants. The

extant literature exploring different factors and their constituent effects on loyalty,

however, reveals a strong focus on consumer goods and industrial equipment settings,

while industrial services have received relatively little attention so far. In addition, the

majority of articles incorporates merely a few potential determinants and thus fails to

draw a comprehensive picture of the mechanisms of customer loyalty formation.

Research Goals

As outlined in the preceding section, Customer feedback is confronted with

diverse management challenges that result from continuous growth, globalization, and

customer diversity. The aim of the present study therefore is to identify determinants

of customer loyalty in relationships between Company’s and their customers by

explicitly considering different characteristics and cultural contexts of such

relationships. In this sense, the present research is positioned at the interface of

marketing and feedback and is intended to contribute not only to satisfaction research,

but also to research in marketing, customer loyalty, and cultural studies.

In order to address the concept of customer satisfaction, it is important to

understand the mechanisms underlying loyalty in the company’s outsourcing context.

As stated previously, a globalizing marketplace and the need of Company’s to

render satisfaction services on an international scale requires intercultural

management competencies. Before being able to apply such management techniques,

though, a thorough understanding of cultural differences between different countries

is necessary. The present study will therefore provide a starting point for such

analyses by investigating cultural differences between two important markets for

customer satisfaction, the USA and Germany. Particular differences between

Germany and the USA will be identified and applied to the previously devised

customer loyalty model. As a result, differences between the two countries with

respect to the formation of customer loyalty can be inferred.

Finally, this study will investigate in how far different relationship conditions

influence the development of customer loyalty. For this purpose, important

relationship characteristics will be identified and their moderating influences on the

customer loyalty model will be examined. This will provide information on the

robustness of the customer loyalty model versus relational contingencies and will

suggest if it is necessary to differentiate customer loyalty efforts accordingly.

Customer Satisfaction

The term satisfaction is often misinterpreted to mean need. In fact, the scope

of satisfaction goes well beyond need. Customer satisfaction, a term frequently used

in marketing, is a measure of how products and services supplied by a company meet

or surpass customer expectation. Customer satisfaction is defined as "the number of

customers, or percentage of total customers, whose reported experience with a firm,

its products, or its services (ratings) exceeds specified satisfaction goals”.

It is seen as a key performance indicator within business and is often part of

a Balanced Scorecard. In a competitive marketplace where businesses compete for

customers, customer satisfaction is seen as a key differentiator and increasingly has

become a key element of business strategy.

Within organizations, customer satisfaction ratings can have powerful effects. They

focus employees on the importance of fulfilling customers’ expectations.

Furthermore, when these ratings dip, they warn of problems that can affect sales and

profitability. These metrics quantify an important dynamic. When a brand has loyal

customers, it gains positive word-of-mouth marketing, which is both free and highly

effective.[

Therefore, it is essential for businesses to effectively manage customer satisfaction.

To be able do this, firms need reliable and representative measures of satisfaction.

In researching satisfaction, firms generally ask customers whether their product or service has met or exceeded expectations. Thus, expectations

are a key factor behind satisfaction. When customers have high expectations and the

reality falls short, they will be disappointed and will likely rate their experience as less

than satisfying. For this reason, a luxury resort, for example, might receive a lower

satisfaction rating than a budget motel—even though its facilities and service would

be deemed superior in “absolute” terms.

The importance of customer satisfaction diminishes when a firm has

increased bargaining power. For example, cell phone plan providers, such

as AT&T and Verizon, participate in an industry that is an oligopoly, where only a

few suppliers of a certain product or service exist. As such, many cell phone plan

contracts have a lot of fine print with provisions that they would never get away if

there were, say, a hundred cell phone plan providers, because customer satisfaction

would be way too low, and customers would easily have the option of leaving for a

better contract offer.

There is a substantial body of empirical literature that establishes the benefits of

customer satisfaction for firms.

Customer Satisfaction in 7 Steps

1. Encourage Face-to-Face Dealings

This is the most daunting and downright scary part of interacting with a

customer. If you're not used to this sort of thing it can be a pretty nerve-wracking

experience. Rest assured, though, it does get easier over time. It's important to meet

your customers face to face at least once or even twice during the course of a project.

2. Respond to Messages Promptly & Keep Your Clients Informed

This goes without saying really. We all know how annoying it is to wait days

for a response to an email or phone call. It might not always be practical to deal with

all customers' queries within the space of a few hours, but at least email or call them

back and let them know you've received their message and you'll contact them about it

as soon as possible. Even if you're not able to solve a problem right away, let the

customer know you're working on it.

3. Be Friendly and Approachable

A fellow Site Pointer once told me that you can hear a smile through the

phone. This is very true. It's very important to be friendly, courteous and to make your

clients feel like you're their friend and you're there to help them out. There will be

times when you want to beat your clients over the head repeatedly with a blunt object

- it happens to all of us. It's vital that you keep a clear head, respond to your clients'

wishes as best you can, and at all times remain polite and courteous.

4. Have a Clearly-Defined Customer Service Policy

This may not be too important when you're just starting out, but a clearly

defined customer service policy is going to save you a lot of time and effort in the

long run. If a customer has a problem, what should they do? If the first option doesn't

work, then what? Should they contact different people for billing and technical

enquiries? If they're not satisfied with any aspect of your customer service, who

should they tell? There's nothing more annoying for a client than being passed from

person to person, or not knowing who to turn to. Making sure they know exactly what

to do at each stage of their enquiry should be of utmost importance. So make sure

your customer service policy is present on your site -- and anywhere else it may be

useful.

5. Attention to Detail (also known as 'The Little Niceties')

Have you ever received a Happy Birthday email or card from a company you

were a client of? Have you ever had a personalized sign-up confirmation email for a

service that you could tell was typed from scratch? These little niceties can be time

consuming and aren't always cost effective, but remember to do them.

Even if it's as small as sending a Happy Holidays email to all your customers,

it's something. It shows you care; it shows there are real people on the other end of

that screen or telephone; and most importantly, it makes the customer feel welcomed,

wanted and valued.

6. Anticipate Your Client's Needs & Go Out Of Your Way to Help Them Out

Sometimes this is easier said than done! However, achieving this supreme

level of understanding with your clients will do wonders for your working

relationship.

7. Honour Your Promises

It's possible this is the most important point in this article. The simple

message: when you promise something, deliver. Clients don't like to be disappointed.

Sometimes, something may not get done, or you might miss a deadline through no

fault of your own. Projects can be late, technology can fail and sub-contractors don't

always deliver on time. In this case a quick apology and assurance it'll be ready ASAP

wouldn't go a miss.

Customer Loyalty

Obtaining a thorough understanding of customer loyalty is a prerequisite for

the execution of the research at hand. For that, the development of customer loyalty

research within the framework of relationship marketing will be presented first, before

different customer loyalty concepts will be introduced. From these concepts, a

definition of customer loyalty for use in this study will be derived, before both

consequences and antecedents of customer loyalty will be portrayed.

Since the beginning of the 1990s, customer loyalty has gained importance both

in relationship marketing research and in business. In business, this can be attributed

to changing market- and competition-environments. Due to a shift from a sellers’ to a

buyers’ market and because of an increasing degree of globalization, most industries

find themselves confronted with new challenges. In a first phase, firms tried to face

these challenges by focusing on their internal processes and organizational structures,

trying to achieve cost reductions by concentrating on internal improvements. A

second phase of external focus followed, where firms directed attention to their

customers, trying to retain existing ones and to win over new ones (churning). Since

“acquiring new customers is much more expensive than keeping them”. And “loyal

customers are the bedrock of any business”. A loyal customer base represents a

barrier to entry, a basis for a price premium, time to respond to competitor

innovations, and a bulwark against deleterious price competition. Loyalty is critical to

brand volume, is highly correlated to market share, and can be used as the basis of

predicting future market share; consequently, understanding loyalty appears critical to

any meaningful analysis of marketing strategy.

In marketing research, two trends mark the development of customer loyalty.

While individual transactions initially were in the center of marketing research, the

focus shifted towards analyzing relationships states that the ‘traditional’ marketing

concept of the marketing mix with its ‘4 Ps’, developed in the middle of the last

century, had been the established approach until the 1990s. This approach, how-ever,

focuses solely on transactions, a deficit tackled by the relationship marketing

approach. At the core of it is the study of relationships between buyers and sellers of

goods or services, in contrast to merely examining transactions. An often cited and

comprehensive definition of relationship marketing is provided “Relationship

marketing refers to all marketing activities directed toward establishing, developing,

and maintaining successful relational exchanges.” Therefore, the relationship

marketing approach pro-vides a suitable environment in which customer loyalty

research can be nested.

While the development of relationship marketing began in the early 1970s, it

was not until the late 1980s that works from the ‘Nordic School of Services’. Initiated

a paradigm shift that geared marketing towards the creation, conservation, and

extension of buyer-seller relationships. Although relationship marketing today is

widely accepted among marketing researchers, its promoters do not postulate the

replacement of the transactional approach, but rather juxtapose the two approaches.

For example, delineates a strategy continuum, in which different goods require

different degrees of transaction- and relationship-based marketing strategies. As a

result of the focus on relationships in marketing research, customer loyalty gained

importance within research.

Before determining which stream the present study can be associated with,

however, it is important to create a clear understanding of different customer loyalty

concepts prevalent in research. This will be accomplished in the following section.

Customer Loyalty Concepts

Reviewing research, it becomes obvious that the notion of customer loyalty is

blurred. At its core, customer loyalty deals with relationships between suppliers and

their customers and can be distinguished from other loyalty aspects, such as brand

loyalty, which refer to a more abstract attachment, such as that towards a brand.

Within German customer loyalty literature, the notion of customer loyalty is even

more faceted, encompasses both ‘customer loyalty’ and ‘customer retention’

distinguishes an active, supplier-focused component and a passive, customer focused

component of customer loyalty.

In the supplier-focused perspective, customer loyalty is seen as a bundle of

measures that aim at improving relationships with customers. The supplier is in the

center of attention and the customer is only regarded as the factor at which success of

customer loyalty becomes manifest. Here it becomes clear that this approach contains

a conceptual deficit. It is the customer who eventually decides on whether customer

loyalty management is successful or not, because all activities undertaken by a

supplier can only be geared at influencing customers to be loyal. A customer-focused

perspective therefore has to be added to evaluate the success of customer loyalty

management.

Within the customer-focused perspective, customer loyalty is conceptualized

taking into account customers’ complex characteristics. These can either be

approached as customers’ directly observable actions and/or take into account their

attitudes and intentions. Since customers’ actions are directly influenced by their

attitudes and intentions, it is obvious that these have to be scrutinized to understand

and manage loyalty. A third perspective is a synthesis of the former two approaches.

The relationship-focused perspective directly examines the relationship between

suppliers and customers. Accordingly, the objects of study in this perspective usually

are buying behavior in retail contexts and long-term relationships marked by frequent

interaction between suppliers and buyers in industrial contexts.

It is clear that the supplier-focused perspective with its instrumental approach

is significantly different from the other two approaches. Distinguishing the customer-

and the relationship-focused perspective, however, is difficult, because both focus on

the customer.

Behaviorist customer loyalty concepts

Behaviorist concepts of customer loyalty have been at the core of early

marketing research and focus on customers’ observable behavior, as e.g. in

purchasing behavior. Accordingly, customer loyalty is established, when customers

demonstrate consistency in their choice of supplier or brand. “Hard-core” loyalty,

when one product alternative is exclusively repurchased and of “reinforcing” loyalty,

when customers switch among brands but repeat-purchase one or more alternatives to

a significant extent. Similarly, customer loyalty as “the proportion of times a

purchaser chooses the same product or service in a specific category compared to the

total number of purchases made by the purchaser in that category“. Pegging customer

loyalty to purchasing behavior, however, is very critical, there can be a multitude of

factors affecting purchasing behavior, such as product availability or special deals,

which are not grasped by looking at purchases alone. A main deficit of the

behavioristic approach thus is that it does not look at the drivers’ behind purchasing

behavior.

Another disadvantage of behavioristic customer loyalty concepts is their ex-

post approach. When loyalty is only expressed through purchases, information on

customers’ actual loyalty status in between purchases is not available. Consequently,

decreasing loyalty is only recognized after it manifests itself through changed

purchasing behavior. Only in relationships with frequent interaction can a supplier

integrate further aspects, such as complaints, into customer loyalty management. The

reason, why behavioristic concepts may still be valuable, is because the measurement

of customer loyalty in this approach does not necessitate involvement by the

customer. The assessment of attitudes and intentions would always imply customers’

cooperation through participation in surveys. By simply recording purchases, e.g.

through delivery records in the industrial context or customer cards in a consumer

context; the assessment of customer loyalty poses little difficulty. Particularly in

areas, where most purchases can be easily ascribed to individual customers, as is the

case with mail-ordering or book-stores on the internet, the behavioristic approach is

useful for identifying different customer groups and their characteristics. Such firms,

however, can only assess purchases of their own products, while purchases of

competing products go unnoticed. Firms can therefore neither draw conclusions about

relative changes of purchasing behaviors, nor evaluate their comparative market

position.

Neo-behaviorist customer loyalty concepts

These narrow technical definitions do not adequately capture the richness and

depth of the loyalty construct implicit in a relational framework.” Consequently, neo-

behavioristic customer loyalty concepts start at the shortcomings of the behavioristic

approach by examining the causes of loyalty. As early as 1969, Day concluded that

“loyalty should be evaluated with both attitudinal and behavioral criteria” otherwise

accidental repeat-purchases, merely resulting from situational exigencies, would be

regarded as indicators of loyalty. There is no agreement, however, on the question,

whether attitudes are part of customer loyalty or merely an antecedent of it. Some

authors propose that only positive attitude can lead to ‘true’ customer loyalty. If

attitude then is a necessary prerequisite of customer loyalty, some drivers of loyalty

cannot be explained. Transaction cost theory, for instance, provides the concept of

asset specificity. Relationship-specific investments create economic switching barriers

and therefore increase customer loyalty. However, the mere repeat purchase of goods

or services for reasons of economic constraints would not qualify as loyalty, as

positive attitudes are not involved. In order to avoid the outlined problem, it is useful

to abstain from defining positive attitude to be a necessary antecedent of loyalty.

Instead, researchers usually consider intentions and observable behavior to be the

constituting elements of customer loyalty.

Determinants of Customer Loyalty

In order to be able to gear marketing activities towards the creation of

customer loyalty, its determinants and their precise effects have to be known.

Accordingly, many researchers have investigated this topic. In order to gain an

overview of the determinants identified in these works, they can be structured in three

dimensions:

(1) Company-related determinants refer to the supplier itself or to the goods or

services offered. It is a prerequisite for the existence of customer loyalty that

the offered goods or services create utility for the customer and that they are

available. In this respect, an assessment is usually performed by examining

quality. In order to evaluate the price-performance ratio, customers will pay

attention to prices. Customer loyalty will also be influenced by the reputation

a company has and ultimately by customer loyalty programs offered.

(2) Relationship-related determinants play a significant role in long-term

relationships. Factors regarding the interaction between supplier and

customer, such as relationship quality, previous experiences, and trust are

important. Commitment, which provides evidence of emotional closeness and

moral or normative feelings of obligation, takes a central role in relationships.

Specificity and dependence can lead to economic, psychological and social

switching barriers.

(3) Customer-related determinants are mainly influenced by customers’

characteristics. In this respect, affect and involvement, and consequently also

the importance of the good or service to the customer, are important. In

addition to the above delineated areas, the effects of the market environment

and competition are researched, as is the link between satisfaction and loyalty,

which plays an important role in the research of customer loyalty and is often

placed in one of the three dimensions. However, as most other determinants

influence satisfaction, it cannot be clearly separated and should therefore be

listed as a distinct category.

COMPANY PROFILE

Overview

Volkswagen AG is a Germany-based automobile manufacturer. The Company

develops vehicles and components, and also produces and sells vehicles, in particular

Volkswagen brand passenger cars and commercial vehicles. The Company consists of

two divisions: Automotive and Financial Services division. The Automotive division

is responsible for the development of vehicles and engines, the production and sale of

passenger cars, commercial vehicles, trucks and buses, and the genuine parts business.

The Financial services division’s portfolio of services includes dealer and custom

financing, leasing, banking and insurance activities, and fleet management. The

Company brands include Audi, Skoda, Bentley, SEAT, Scania. During the year ended

December 31, 2009, a total of four million vehicles were delivered to customers

worldwide. On February 20, 2009, the Company acquired Scania AB. In December

2009, the Company acquired 49% of Porsche Zwischenholding GmbH.

Volkswagen

ABOUT

Volkswagen AG is a Germany-based automobile manufacturer. The Company develops vehicles and components, and also produces and sells vehicles, in particular Volkswagen brand passenger cars and commercial vehicles. The Company consists of two divisions: Automotive and Financial Services division. The Automotive division is...

BUY/SELL

» Analyst ConsensusOVERALL

Beta: -0.24

Market Cap (Mil.): €63,139.64

Shares Outstanding (Mil.): 465.19

Annual Dividend: 2.20

Yield (%): 1.69

FINANCIALS

  VOWG.DE Industry Sector

P/E (TTM): 7.55 6.11 19.93

EPS (TTM): 519.28 -- --

ROI: 7.11 1.28 2.26

ROE: 18.00 3.01 3.55

REVIEW OF LITERATURE

SURVEY

After having presented the necessary fundamentals of customer loyalty in the

preceding section, this section will elaborate on the reference point of the research

project, i.e. questionnaire

Nature of Survey

Answers to clear research questions.

Specific statistics.

Information about the policies of current environment.

Assessing data quality.

THEORETICAL FRAMEWORK

Attitude Measurement

Attitude is defined as a predisposition of a person to respond to an idea or

object. Attitudes are composed of beliefs about the object of concern, such as feelings

about the object, likes / dislikes of an individual for an object.

An attitude is learned, it is naturally stable.

Measurement means assigning numbers or other symbols to characteristics of objects

according to certain pre-specified rules.

By attitude measurement, we mean to measure the attitude of a person (e.g. a

consumer, an employee, a student, a manager etc.) towards objects / situations.

.

Scaling

– Scaling is the term commonly used to refer the process of

measuring attitudes. It describes the procedures of assigning

numbers to various degrees of opinion, attitude and other

concepts.

– A procedure for the assignment of numbers (or other symbols) to a

property of objects in order to impart some of the characteristics

of numbers to the properties in question.

– Attitude Scaling is the process of assessing an attitudinal

disposition using a number that represents a person’s score on an

attitudinal continuum ranging from an extremely favorable

disposition to an extremely unfavorable one

Measurement scales

• Nominal Scale:à A scale whose numbers serve only as labels or tags for

identifying and classifying objects with a strict one-to-one correspondence

between the numbers and the objects. Although any information that vary

degree of attitude, skills understandings etc. will not be measured successfully

on nominal scale. The only permissible act is counting. E.g. No. Of players,

roll numbers in the class. The statistics that can be applied on nominal scale

are percentages, mode chi-square and binomial test.

• Ordinal Scale:à It is a ranking scale in which numbers are assigned to

objects to indicate the relative extent to which some characteristic is

possessed. Thus it is possible to determine whether an object has more or less

of characteristic than some other object, but not how much more or less. It is

meaningful to calculate percentile quartile median, rank order co-relation from

data

• Interval Scale:à In this scale, numerically equal distances on the scale

represents equal value in the characteristics being measured. Statistical

techniques that may be used on interval scale data include all of those for

nominal or ordinal in addition to it arithmetic mean, standard deviation,

product moment co-relation can also be used.

• Ratio Scale:à Ratio scales have an absolute or true zero of measurement.

Ratio scale represents the actual amount of variables. It provides the facility of

a kind of comparison which is not provided by any other scale.

SCALING TECHNIQUES

• Arbitrary Approach: à These scales are developed on adhoc basis

and depends on subjective selection. Few statements or items are

collected which are appropriate to a given topic. Merits of this scales

are that they can be developed very easily, quickly and with

relatively less expense. But there is no objective evidence that such

scales measure the concept for which they have been developed.

• Consensus Approach : à Here a panel of judges evaluate the items

chosen for inclusion in the instrument in terms of whether they are

relevant to the topic area and unique in implication.

•

• Item Analysis Approach: à Under it a number of individual items

are developed into a test which is given to a group of respondents.

After administering the test, the total scores are calculated for every

one. After administering the test, the total scores are calculated for

every one. Individual items are then analysed to determine which

items discriminate between persons or objects with high total scores

and those with low scores.

• Cumulative Scales Approach: à These are chosen on the basis of

their conforming to some ranking of items with ascending and

descending power.

• Factor Analysis: à It may be constructed on the basis of

intercorrelations of items which indicate that a common factor

accounts for the relationship between items. This relationship is

typically measured through factor analysis method.

SCALE CONSTRUCTION TECHNIQUE

• Semantic Differential Scales (Thurstone type Scales): à This scale is

developed by using consensus approach. It is a seven-point rating

scale with end points associated with bipolar labels. It has been

widely used in comparing brand, product and company images,

developing advertising and promotion strategies and in new product

development studies.

Procedure for Thurstone Scale:à

1) The researcher gathers a large no. of statements, twenty or more

that express the viewpoint.

2) These statements are then submitted to a panel of judges, each of whom

arranges them in 11 groups ranging from one extreme to another.

Generally in the first pile most unfavorable issue is placed.

3) The sorting by each judge yields a composite position for each of the

items. In case of disagreement between the judges about an item, that item

is discarded.

4) For items that are retained each is given a scale value between one and

eleven.

5) A final selection of statements is then made. For this purpose a sample

of statements, whose scores are spread evenly from one extreme to the

other is taken.

Likert / Summated Scale:à This scale is developed by utilizing the item

analysis approach wherein a particular item is evaluated. Each response is

given a numerical score, indicating his agreement or disagreement, and the

scores are totaled to measure the respondent’s attitude. Advantages are

easy to construct and administer, suitable for mail, telephone or personal

interviews. The major disadvantage its take much time to complete

because respondents have to read each item.

Procedure for Likert type Scale

1)Researcher collects a large number of statements which are relevant to

attitude.

2) A trial test is administer to a number of subjects.

3) Numbers are allotted for each score.

4) Then the total score of each respondent is obtained by adding his scores

that he received for separate statements.

5)Those statements having highest and lowest total scores will be

identified.

6) Only those statements that correlate with the total test should be

retained in the final instrument and all others must be discarded from it.

• Semantic Differential Scale :à This scale is developed by Chrles E. Osgood,

G J Suci and P.H Tannenbaum. This scale is based on the presumption that an

object can have different dimensions which can be located in

multidimensional property space called a semantic space. For e.g. for

analyzing candidates for leadership .

• Procedure:

1) The Concept to be studied is selected on the basis of personal judgement,

keeping in view the nature of problem

2) Scales are selected bearing in mind the criteria of evaluation.

3) Then a panel of judges are used to rate the various stimuli on the various

selected scales.

OBSERVATION METHOD

• It is one of the methods for data collection. It can be used to get both past and

current information. In marketing research we can check the display positions

of various products in stores, to find out how frequently the product is out of

stock etc.

Advantages of this method are-

It enables to record the behaviour as it occurs.

It can be used regardless of respondents willingness to report or not.

It can be used for those who are unable to respond like infants, animals etc.

Limitations are-

Unable to observe the past or future

behaviour of any person.

It does not help in finding a person’s opinion or knowledge on any subject

matter

It is very slow and unable to cover large

sample of population and

Inadequacies of our sense organs also

distorts the observation.

Distorted by observer’s interest, freshness and

freedom from interruption.

Methods of observation

• Structured- unstructured observation:à Structured Observation is used when

the research problem has been formulated precisely and the observers have

been told specifically what is to be observed. Unstructured observation implies

that observers are free to observe whatever they think is relevant and

important.

• Disguised- undisguised observation :à In Disguised observation, the subjects

do not know that they are being observed. In Undisguised observation

subjects know about the observation.

• Direct- indirect observation: In direct observation, the event or the behavior of

a person is observed as it occurs. In Indirect observation some record of past

behavior is observed.

• Human- mechanical observation:à In human observation trained observers

are required to observe and faithfully record their observations. In Mechanical

observation mechanical devices such as eye camera and audiometers are used.

• Observation under natural setting- laboratory setting:à Observations in field

studies are in their natural settings and are therefore in realistic conditions

Whereas in laboratory settings, enables the observer to control variables which

influence the behavior of people.

QUESTIONNAIRE METHOD (of collecting data)

A formal list of questions used for obtaining information from respondents is

called a questionnaire. A questionnaire is a structured technique for data

collection. It consists of a series of questions, ordered in a logical sequence, to

which the respondents reply.

Functions (objectives) of a questionnaire: -

1) It translates the research objectives into specific questions that are to be asked

to the respondents.

2) It standardizes questions and response categories so that every participant

responds to identical stimuli.

3) By its wording, question flow and appearance, it fosters cooperation and keeps

respondents motivated throughout the interview.

4) It serves as a permanent record of the research.

5) It speeds up the research process.

Types of Questionnaires

Questionnaires can be classified on following three basis:

1. The degree to which a questionnaire is structured (i.e. structured or non-

structured questionnaire);

2. The disguise or lack of disguise of the objectives or the sponsorer of the

questionnaire (i.e. a disguised or an undisguised questionnaire);

3. The communication method used (i.e. by personal interview, telephone, or

mail)

1) Structured questionnaires are those where the questions to be

asked are standardized, and no variation is permitted in terms of the

wording of the questions between different respondents. In a structured

questionnaire, we can standardize either (1) questions only, or (2) both

questions and answers.

2) Non-structured questionnaire is one in which no specific set of

questions are to be asked from each respondent. The researcher asks the

questions in the manner in which he/she deems fit in a particular

situation. In fact, the researcher may only have certain main points on

which he may develop the questions at the time of actual interview. Thus

a non-structured questionnaire is devoid of rigidity and allows

considerable freedom to the researcher in choosing the order as well as

specific content of questions.

Advantages of QuestionnairesAdvantages of Questionnaires

1. Versatility: all most every problem of business research could be approached using a questionnaire.

2. Cost: Questionnaires are cost effective 3. Are easy to analyze.4. Questionnaires reduce researcher’s bias, as answers are in

respondents own words.5. Large samples can be made use of and thus the results can be

more reliable.

Disadvantages / Limitations of Questionnaire method of data collection

1. Questionnaires are useful only when respondents possess, and are willing to provide the needed information. In case any of these

things is lacking, the entire purpose (of questionnaire) is defeated.2. Often questionnaires suffer with a low rate of response.3. Often respondents may not provide a true answer to the

researcher (especially when they encounter an embarrassing / ego hurting question).

RESEARCH METHODOLOGY

Objective of the study

A study on customer level of satisfaction in towards VOLKSWAGEN

AGRA.

To identify the loyalty of customer towards VOLKSWAGEN AGRA.

To measure the specific reasons for satisfaction and dissatisfaction in

with VOLKSWAGEN AGRA.

To identify the recommendations of VOLKSWAGEN AGRA to others

by existing loyal customers.

Scope of the study

Scope of the study mainly to know the current level of customer

satisfaction.

Scope of the study mainly to know the loyalty of the customer

towards the company.

To give suggestion regarding improvement of performance standard

of the Company

To inform the management about current level.

Limitations of the study

Time limit restricts detailed survey work for this particular topic of

research

Some customers have lack of time, so they may not communicate

properly.

Research design

The objective of the study has been achieved by using both Primary and

Secondary Data’s. The data’s obtained for the study was primarily from field

investigation carried out among the customers of Volkswagen Agra.

Sampling

Sample design is a definite plan for obtaining a sample from a given

population. It refers to the technique or the procedure the researcher would adopt in

selecting items for samples.

Samples are studied for the population who are the customers of Volkswagen

Agra. Research design is needed because it facilitates the smooth railing of the

various research operations thereby making research as effective as possible yielding

maximal information with minimal expenditure of effort, time and money.

Sample Size

The Customers, to whom Volkswagen Agra provides service is taken into

consideration. The sample size is 85.

Primary Data

Primary data was collected through Online Survey

Survey Research:

Survey research as name suggests, is distinguished by the facts that the data

are collected from the people who are thought to have the desired information,

through questionnaire.

Questionnaire was posted over the internet and sent to the respective

customers in order to collect information related to the topic. The questionnaires so

designed for this purpose were structured.

Secondary Data

Secondary data was collected through company websites and records. And

analysis on various aspects has been done using different statistical techniques.

The methods followed for the analysis and interpretation of data are:

Uni variate Percentage Analysis

Weighted average method

Univariate Percentage Analysis:

Percentage refers to a special kind of ratio. It is used to make comparison

between two or more series of data. They can be used to compare the relative items,

the distribution of two or more series of data, since the percentages reduces every

thing to a common base and there by allow meaningful comparisons to be made. Here

only one factor is considered.

NO OF RESPONDENTS

PERCENTAGE = x 100

TOTAL RESPONDENTS

Weighted Average Method:

This method is a used when the relative importance of the different items is

not the same. The term weighted stands for the relative importance of the different

items. It is assumed that inventory costs should be assigned on the basis of average

costs of identical units. An average cost unit is determined by dividing the total costs

of the units by the number of units.

The weighted average method is logical when assigning costs to units that become

mixed together, there by making separate identification difficult or impossible.

The formula is:

__ ∑ WX

X =

∑ W

Where;

X = Weighted Arithmetic mean

X = Frequency or no of response dents

W = Weighted allotted to each factor

DATA ANALYSIS & INTERPRETATION

Customers overall experience to accessibility and responses of Volkswagen Agra

Representative through Telephone.

Options Respondents Percentage

Excellent 16 20 %

Very Good 16 20 %

Good 32 40 %

Fair 16 20 %

Poor 0 0 %

Total 80 100 %

Table - 1

Interpretation:

20 % of the customers responded that their overall experience to

accessibility and responses through Telephone is Excellent. Next 20 % says it is very

good. Good being awarded by 40 % of the customer. Final 20 % is not so satisfied so

they said that the service is fair

Excellent20%

Very Good20%

Good40%

Fair20%

Poor0%

Excellent

Very Good

Good

Fair

Poor

Figure - 2

(Chart showing Customers overall experience to accessibility and responses of

Volkswagen Agra representative through Telephone)

Customers overall experience to accessibility and responses of Volkswagen Agra

representative through E-mail.

Options Respondents Percentage

Excellent 16 20 %

Very Good 16 20 %

Good 32 40 %

Fair 16 20 %

Poor 0 0 %

Total 80 100 %

Table - 2

Interpretation:

20 % of the customers responded that their overall experience to

accessibility and responses through E-mail is Excellent. Next 20 % says it is very

good. Good being awarded by 40 % of the customer. Final 20 % is not so satisfied so

they said that the service is fair

Excellent20%

Very Good20%

Good40%

Fair20%

Poor0%

Excellent

Very Good

Good

Fair

Poor

Figure - 3

(Chart showing Customers overall experience to accessibility and responses of

Volkswagen Agra representative through E-mail)

Clearance representative ability to help customer issue/need

Options Respondents Percentage

Excellent 15 19 %

Very Good 17 21 %

Good 22 28 %

Fair 19 24 %

Poor 7 9 %

Total 80 100 %

Table - 3

Interpretation:

` 19 % of the customers responded that their overall experience to ability

to help resolve issue or need is Excellent. Next 21 % says it is very good. Good being

awarded by 28 % of the customer. 24 % is somewhat satisfied so they said that the

service is fair. 9 % is not satisfied with the service.

Excellent19%

Very Good21%

Good27%

Fair24%

Poor9%

Excellent

Very Good

Good

Fair

Poor

Figure - 4

(Chart showing Clearance representative ability to help customer issue/need)

Customers Overall experience with Volkswagen Agra

Clearance Department

Options Respondents Percentage

Excellent 17 21%

Very Good 15 19%

Good 14 18%

Fair 30 38%

Poor 4 5%

Total 80 100 %

Table - 4

Interpretation:

21 % of the customers responded that their overall experience with

clearance department is Excellent. Next 19 % says it is very good. Good being

awarded by 18 % of the customer. 38% is somewhat satisfied so they said that the

service is fair. 5 % is not satisfied with the service.

Excellent21%

Very Good19%

Good18%

Fair37%

Poor5%

Excellent

Very Good

Good

Fair

Poor

Figure - 5

(Chart showing Customers Overall experience with Clearance Department)

Customer Satisfaction level with Volkswagen Agra

Options Respondents Percentage

Extremely Satisfied 15 19%

Satisfied 20 25%

Neutral 22 28%

Dissatisfied 18 23%

Extremely Dissatisfied 5 6%

Total 80 100 %

Table - 6

Interpretation:

19 % of the customers responded they are Extremely Satisfied with the

service. Next 25 % they are satisfied. Neutral is 22 % of the customer. 23 % is

somewhat satisfied so they said that the service is fair. 3 % is not satisfied with the

service.

Extremely Satisfied19%

Satisfied25%

Neutral27%

Dissatisfied23%

Extremely Dissatisfied

6%

Extremely Satisfied

Satisfied

Neutral

Dissatisfied

Extremely Dissatisfied

Figure - 7

(Chart showing Customer Satisfaction level)

Customer Responses or Reasons for satisfaction

Less transit time

Advance furnishing of documents

Keeping customer fully informed

Timely clearance

Good after Sales service.

Interpretation:

Various reasons are given by customers for satisfaction like less transit time,

Clear tracking, Advance furnishing of documents, keeping customer fully informed,

Timely clearance, Good after sales service etc.

Customer Responses or Reasons for Dissatisfaction

Delay in delivery period

High cost of spares.

Interpretation:

Various reasons are given by customers for dissatisfaction. The company need

more focused approach for satisfying the customers

Over the past years loyalty towards Volkswagen Agra has grown stronger

Options Respondents Percentage

Yes 55 69%

No 25 31%

Total 80 100 %

Table - 8

Interpretation:

69 % of the customer responded in favour that loyalty towards Volkswagen

Agra has grown stronger. On the other hand 31 % of the people say No that loyalty

towards Volkswagen Agra has not grown stronger.

Yes69%

No31%

Yes

No

Figure - 9

(Chart showing status of loyalty towards Volkswagen Agra has grown stronger)

FINDINGS

20 % of the customers responded that their overall experience to accessibility

and responses through Telephone is Excellent. Next 20 % says it is very good.

Good being awarded by 40 % of the customer. Final 20 % is not so satisfied so

they said that the service is fair

20 % of the customers responded that their overall experience to accessibility

and responses through E-mail is Excellent. Next 20 % says it is very good.

Good being awarded by 40 % of the customer. Final 20 % is not so satisfied so

they said that the service is fair

19 % of the customers responded that their overall experience to ability to help

resolve issue or need is Excellent. Next 21 % says it is very good. Good being

awarded by 28 % of the customer. 24 % is somewhat satisfied so they said that

the service is fair. 9 % is not satisfied with the service.

21 % of the customers responded that their overall experience with

Volkswagen Agra clearance department is Excellent. Next 19 % says it is

very good. Good being awarded by 18 % of the customer. 38% is somewhat

satisfied so they said that the service is fair. 5 % is not satisfied with the

service.

11 % of the customers responded that their overall experience with

Volkswagen Agra clearance department is Excellent. Next 31 % says it is

very good. Good being awarded by 50 % of the customer. 5 % is somewhat

satisfied so they said that the service is fair. 3 % is not satisfied with the

service.

19 % of the customers responded they are Extremely Satisfied with the

service. Next 25 % they are satisfied. Neutral is 22 % of the customer. 23 % is

somewhat satisfied so they said that the service is fair. 3 % is not satisfied with

the service.

69 % of the customer responded in favour that loyalty towards Volkswagen

Agra has grown stronger. On the other hand 31 % of the people say No that

loyalty towards Volkswagen Agra has not grown stronger.

SUGGESTIONS

Communicate. Whether it is an email newsletter, monthly flier, a reminder

card for a tune up, or a holiday greeting card, reach out to your steady

customers.

Customer Service. Go the extra distance and meet customer needs. Train the

staff to do the same. Customers remember being treated well.

Employee Loyalty. Loyalty works from the top down. If you are loyal to your

employees, they will feel positively about their jobs and pass that loyalty along

to your customers.

Employee Training. Train employees in the manner that you want them to

interact with customers. Empower employees to make decisions that benefit

the customer.

Customer Incentives. Give customers a reason to return to your business. For

instance, because children outgrow shoes quickly, the owner of a children’s

shoe store might offer a card that makes the tenth pair of shoes half price.

Likewise, a dentist may give a free cleaning to anyone who has seen him

regularly for five years.

Product Awareness. Know what your steady patrons purchase and keep these

items in stock. Add other products and/or services that accompany or

compliment the products that your regular customers buy regularly. And make

sure that your staff understands everything they can about your products.

Reliability. If you say a purchase will arrive on Wednesday, deliver it on

Wednesday. Be reliable. If something goes wrong, let customers know

immediately and compensate them for their inconvenience.

Be Flexible. Try to solve customer problems or complaints to the best of your

ability. Excuses — such as "That's our policy" — will lose more customers

then setting the store on fire..

People over Technology. The harder it is for a customer to speak to a human

being when he or she has a problem, the less likely it is that you will see that

customer again.

Know Their Names. Remember the theme song to the television show Cheers?

Get to know the names of regular customers or at least recognize their faces.

CONCLUSIONS

In addition to suggestions and findings, this study also provides several scopes

for further research, which will be addressed in the following paragraphs:

(1) While the customer loyalty model validated in this study possesses good

power for explaining repurchase intentions and referral behavior, only partial

explanation of the construct of additional purchase intentions is achieved For

this reason, future studies should explore additional determinants of this loyalty

dimension.

(2) Measurement model assessment revealed that the operationalization of

fairness in this study does not achieve sufficient discriminance from other

constructs, especially from trust and relational satisfaction. As there is a strong

theoretical indication that fairness is important in customer loyalty

considerations, further studies should modify fair-ness’ measurement model,

e.g. by more strongly recurring to the concept of inequity.

Volkswagen Customer Satisfaction & Loyalty Survey

 

EXCELLENT VERY GOOD GOOD FAIR POOR

Making you confident that this

was the right vehicle

Handling your purchase in a

professional and timely manner

 

YES NO

Were all your questions answered

at the time of delivery?

Was enough time spent with you

at the delivery time?

Was the delivery of your vehicle a

pleasant experience?

Was the exterior clean and

undamaged?

Was it delivered with all the

features promised?

Did they have you throughly

inspect the vehicle?

Was the vehicle's maintenance

schedule explained to you?

Were all operating controls

explained to you?

Were all the terms of the warranty

explained to you?

Was the Owner's Manual

explained to you?

YES NO

Were you introduced to someone

in the service department?

Did the car come with a full tank

of gas?

Has the dealer contacted you

regarding your satisfaction?

When you received your new

vehicle was it problem free?

TOTALLY

SATISFIED

VERY

SATISFIED

SOMEWHAT

SATISFIED

SOMEWHAT

DISSATISFIED

VERY

DISSATISFIED

Your salesperson

Your finance person

The way your new vehicle was

delivered to you

Your overall purchase experience

Your new vehicle

 Were you offered a test drive?

  

Yes, offered and taken

  

Yes, offered but not taken

  

No, not offered

 Overall, how would you rate the thoroughness of your test drive.

  

Excellent

  

Very Good

  

Good

  

Fair

  

Poor

How satisfied are you with the actions taken by the dealership to resolve your problem?

  

Totally Satisfied

  

Very Satisfied

  

Somewhat Satisfied

  

Somewhat Dissatisfied

  

Very Dissatisfied

 We would appreciate your completing the following information to help us classify your responses:

Sex:

  

Male

  

Female

 Age

  

Under 25

  

25-34

  

35-44

  

45-54

  

55-64

  

65 or over

 

If you would like to tell us something about your purchase or ownership experience

that has not been covered in this survey, please type your comments in the box

provided. Thank you for your patronage and for helping us to better serve you.

   

 

Thank you for your feedback. We sincerely appreciate your honest opinion and will take your input into

consideration while providing products and services in the future.

If you have any comments or concerns about this survey please Contact: - 

Company Name

Address 1

Address 2

City, State, ZipCode

BIBLIOGRAPHY

Books:

The Loyalty Guide report series - Peter Clark

Marketing Management 12 e – Philip Kotler

Websites:

www.google.com

www.wikipedia.com

www.Volkswagen.com