Market Research for new entrant in Indian Small Car Segment

By:Group 2

Amit KumarBishnu PandaNishant Jain

Subhasish Das13/04/2023 Small Car Industry 1

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Agenda• Indian Small Car Segment• Management Decision Problem• Marketing Research Problem• Research Design• Data Analysis• Conclusion• The way forward

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Indian Small Car Segment

• Largest small-car market in the world• Second largest exporter behind Japan• Forms 60% of Indian Car Market• Decline in growth by 50% in FY12

(Apr’11-Oct’11)o Successive interest rate hikeso Increase in fuel priceo Pressure on disposable income due to

inflation• Diesel Penetration• Negatively impacted by production

disruptions at Maruti Suzuki, the market leader in the segment

• Competitive pressures intensifying on the back of new launches

• Small Car Segment grew by 2% by Dec-11 (FY12) w.r.t. 6.5% growth rate in 2011

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Management Decision Problem

A new entrant wants to come up with a winning car in the booming small car segment in India.

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Marketing Research Problem

To figure out the key parameters which contributes in the growing sales in the small car segment

Psychographic

Micro - Environmental

Macro - Environmental

Brand AmbassadorSocial Status

Changing LifestyleReferenceOccasions

Family Need

PriceFinance OptionsDistributionPost Sales ServiceImpact of communication channelsProduct SpecificationsBrand LoyaltyExchange of Cars (resale value)Safety Standards and Warranty Schemes

InflationPer Capita Disposable IncomeGlobal Crude Oil PricesInterest RatesGovernment InterventionsInvestments

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Model

Behavioural Intention = ∑ bi ei + ∑ NBj MCj

where,

i = salient outcomesbi = how strongly do you believe that these outcomes will creep inei = evaluation of the outcomes

j = relevant othersNBj = opinion of relevant othersMCj = motivation to comply other’s opinions

Beliefs Attitude

AffectPurchase Experience/Evaluation Repeat Purchase Loyalty

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Proposed Hypothesis

• Hyp1: Price sensitiveness is high in consumer buying behavior in this segment.

• Hyp2: Financing options play an important part in buying behavior.

• Hyp3: Distribution has a substantial contribution in generating sales.

• Hyp4: Post Sales Service has a substantial contribution in generating sales.

• Hyp4: Communication channels play a vital role in generating awareness of a new car in the segment.

• Hyp5: It is the brand which influences the sale.

• Hyp6: Inflation has significant impact on buying behavior.

• Hyp7: Interest rates has significant impact on buying behaviour.

• Hyp8: PCDI has significant impact on buying behaviour.

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Research Design

• Exploratory Research Designo Secondary Data: qualitative analysiso Experience Surveys

• Descriptive Research Designo Surveys via questionnaireo Multiple Cross Sectional Design

• Causal Research

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Scaling Techniques and Measurement Scales

• Scaling Techniques to be used in the questionnaire:o Likert Scale (Non-comparative Scales)o Multi-item Scales (Non-comparative Scales)

• Data obtained in the following scales viz.o Nominalo Intervalo Ratio

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Sampling Techniques and Sample Size

• Sampling Method:o Stratified Random Sampling

o Criterion: i) Age Group ii) Income Group

• Sample Size:o 158 for Primary Research

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Data Analysis

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Demographics of sampleAge Group Occupation

Annual Income

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Do you have a car?

Sample Survey Status:

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The reason(s) for purchasing a car

Hypothesis: Every factor has equal impact on the purchase of a car

H0: µ = 0 vs. H1: µ ≠ 0

t Calculated = 12.17t Critical = 2.26Level of significance = .05

H0 is rejected.

Inférence: Each factor has diffèrentimpact on purchasing a car.

Link to Excel Sheet

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Express your opinion regarding importance of the following factors in purchasing a car

Hypothesis: Each factor has equal effect on buying a carH0: µ = 0 vs. H1: µ ≠ 0

t Calculated = 5.24t Critical = 2.263 Level of significance = .05H0 is rejected.

Inférence: Each factor has diffèrent impact on purchasing a car.

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How strongly do you believe that the following attributes should be present in your chosen/present car?

Hypothesis: Choosing a car will be independent of the attributes (Product specific)

H0: µ = 0 vs. H1: µ ≠ 0

t Calculated = -9.85t Critical = -2.263Level of significance = .05

H0 is rejected.

Inférence: Choosing a car will be very much dependent on the attributes

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How strongly do you believe that the following factors have contributed/shall contribute to your purchasing of car?

Hypothesis: Choosing a car will be independent of the attributes (External Parameters)

H0: µ = 0 vs. H1: µ ≠ 0

t Calculated = -16.89t Critical = -2.263Level of significance = .05

H0 is rejected.

Inférence: Choosing a car will be very much dependent on the external parameters.

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Tick the factors which you think shall influence your buying decision of a car

Hypothesis: Every factor has equal influence on the purchase of a car

H0: µ = 0 vs. H1: µ ≠ 0

t Calculated = 12.654t Critical = 2.247Level of significance = .05

H0 is rejected.

Inférence: Each factor has diffèrent influence on purchasing a car.

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Cross Tabulation

Hypothesis: There is no significant difference in the impact of individual factors on different age groups, while purchasing a car

Source of Variation SS df MS F F critAge Group 293961.8958 3 97987.29861 28.43587039 2.891563517Parameters 47701.22917 11 4336.475379 1.258443222 2.093254411

Error 113714.8542 33 3445.904672

Total 455377.9792 47

ANOVA TABLE

F calculated (rows): 28.43 > F critical: 2.89F calculated (columns): 1.26 < F critical: 2.09Level of significance: .05

Inference: The deciding factors stated doesn’t have significant difference on the different age group of customers, where as small cars are more preferred by individuals within age group of 21 yrs. to 30 yrs., compared to others.

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Cross Tabulation

Hypothesis: There is no significant difference in the impact of individual factors on different income groups, while purchasing a car

F calculated (rows): 8.309 > F critical: 2.89F calculated (columns): 12.14 > F critical: 2.09Level of significance: .05

Inference: The deciding factors stated have significant difference on the customers of different income groups and there is also a significant difference between the different income groups so far as purchasing cars are concerned.

Source of Variation SS df MS F F critRows 8900.729167 3 2966.909722 8.309951427 2.891563517Columns 47701.22917 11 4336.475379 12.1459374 2.093254411Error 11782.02083 33 357.0309343

Total 68383.97917 47

ANOVA TABLE

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Theory of Reasoned Action

∑ bi*ei = 140.3506

∑ NBj MC j = 5.55

Therefore, BI = 145.9

Behavioural Intention = ∑ bi ei + ∑ NBj MCj

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Recommendations..(1/2)

• Advertisements• Print Media• Internet Marketing• Branding

• Distributors and Dealers

• Service Centre Availability

• Penetration Pricing• Value for Money

• Comfortable• Safety Quotient• Fuel Efficiency• Style• Spacious

Product Price

PromotionPlace

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Recommendations..(2/2)

• Post Sales Service• Financing tie ups• Warranty Schemes• Sales promotion to be given during festive seasons

Ad-hoc benefits to be offered:

Potential Markets: Urban & Semi UrbanHot Cake: Working Professionals within age group 21-30 yrs.

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Thank You