Changing Scenario of Buyer Behavior of Automobile in India: Prepared by Alok Kumar
Changing Scenario of Buyer Behavior of Automobile in India: Prepared by Alok Kumar
Changing Scenario of Buyer Behavior of Automobile in India: Prepared by Alok Kumar
by
Contents
1. Introduction 2. Why Indian market? 3. Major players 4. India as a manufacturing base for global players 5. Brand personality of cars 6. Factors affecting buyer behavior 7. Major attributes of customer satisfaction 8. Reasons behind increased purchase of cars
9. Reasons behind more deliberation towards a brand 10. Factors influencing satisfaction after the purchase 11. What customers generally look for? 12. Habits, needs and attitudes of Indians 13. Factors affecting dealers choice 14. The game played by perception 15. Why automobile industry reached a peak level in sales this season 16. References
Introduction
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:
Increase in disposable incomes and standards of living of middle class Indian families estimated to be as many as four million in number; and 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.
Gross turnover of the automobile industry in India Year 2004-05 2005-06 2006-07 2007-08 2008-09 (In USD Million) 20,896 27,011 34,285 36,612 38,238
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. Prosperity in the country is on the rise and people are ready to look beyond the price tag. Change in the lifestyle and perception of people encouraging ownership of two cars in the household: small car for daily use and larger family car for the weekend. Better infrastructure around cities leading to increased traveling.
Major players
According to data provided by the Society of Indian Automobile Manufacturers, the share of Mahindra & Mahindra (the Scorpio, Bolero and Xylo) has gone up from 43 per cent in 2007 to 55 per cent in 2009; during the same period, Tata Motors has fallen from 22 per cent to 13 per cent. Others in the fray are Toyota (the Innova and Fortuner), General Motors (the Tavera and Captiva), Honda (the CRV), Maruti Suzuki (the Grand Vitara), Hyundai (the Terracan and Santa Fe) and Ford (the Endeavour).
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 Skodas 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 consumers scheme of priorities when buying a new car than ever before. According to Bhatia, as long as advertising for cars is strongly differentiated and sharply positions the model and at the same time satisfies a defined 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. 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.
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. 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. 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.
Under this, the company took a conscious decision to reposition and re-launch Bolero as an entry level SUV as against a plain utility vehicle. A detailed consumer research was undertaken on different usage segments of the category. Research studies suggested that competing brands such as Tata Sumo had a powerful equity in commercial segment but negligible presence as a personal vehicle. There was an opportunity to capitalize on emotive drivers such as Pride of Ownership through attributes such as product styling and an aspirational imagery. This led to the launch of new Bolero variants. It was also important to evolve distinct spaces for both Bolero and Scorpio to prevent cannibalization. Towards this end, the Bolero was repositioned as an entry level SUV with an attitude of Taking on Anything, offering an affordable option for young, upwardly mobile consumers while the Scorpio was targeted at those who had arrived in life and for whom the brand was an extension of their lifestyle.
Sedan owners wanted a higher sitting position and ground clearance, and the ability to drive comfortably on unpaved or potholed roads. MUV owners, on their part, wanted better styling, whereas SUV owners were looking for better ride quality and handling. Ingress and egress were also a concern for SUV owners.
Source: Tatas crossover experiment, Nov. 08, 2010.
References
Sites visited www.siamindia.com www.autocarindia.com www.overdrive.com www.hyundai.co.in www.ibef.org Books consulted Building Strong Brands- David A Aaker