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CHAPTER IX

SUMMARY, RECOMMENDATIONS AND CONCLUSION

A country can make a shining mark on the map of world only if it is characterized

by continuous and increasing flow of growth rate. The study of consumer behavior deals

with the decision process and physical activity, individuals engage in when evaluating,

acquiring, using, or disposing of goods and services (Loudon and Bitta, 2002). It is

concerned with an understanding of individual’s purchase and consumption activities. It

involves the study of how people organize the acquired information and how it is used to

make purchase decisions and talking about rural consumers, it’s difficult to understand

their view point of making choices among different products. (Sternthal and Craig, 1982).

Consumer behavior is the field of study that focuses on consumer activities. Consumer

behavior should be primary focus of every aspect of the firm’s marketing program.

(Blackwell, Miniard and Engel, 2007).

The rural market is emerging stronger with a gradual increase in disposable

income of rural folk. The structure of the Indian economy indicates that a significant

portion of the total income is derived from agriculture income. In addition, better

procurement prices fixed for various crops and better yields due to many research

programs have also contributed to the strengthening of the rural markets.

Undoubtedly, Indian rural market offers immense opportunities and great

attraction to the marketers and it is not easy to enter this market in a smooth way. This

market bristles with a variety of challenges and every marketer has to work hard to face

these challenges successfully (Anand, 2006). In the past years, due to the lack of

facilities available in rural areas, the rural consumers went to near by city to buy branded

products and services. Today the marketers have realized the potential in the rural

market, which have become critical for them, be it for a branded shampoo or an

automobile.

Lifestyle changes are witnessed in rural areas. Contrary to popular perception, the

potential rural market is not confined to a few million farmer households. The boom in

the rural market is not due to sporadic indulgence by a privileged rural minority but

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reflects instead the changing priorities sweeping the entire hinterland. In the rural

households, there is an upgradation in terms of the form of product used. Eg. Households

are upgrading from traditional mosquito repellants (cow dung cakes) to coils and mats.

There is also an upgradation from local or unbranded products to national brands and

from low price brands to premium brands. This is primarily due to the influence of the

youth in the households. The rural youths are more open to fresh concepts as against their

elderly family members. They are better educated and have aspirations similar to those of

youth in urban areas. Radio and television have revolutionized the entire marketing

scenario. Practically, television is more effective in conveying and injecting an idea.

(Anand, 2006). The net effect of increasing coverage of audio visual media is greater and

it provides exposure to modern lifestyles and brands. (Dey and Adhikari, 1998). The rural

youth wish to migrate to cities, where as the urban youth, particularly those from the

middle classes and upper castes wish either to seek employment in lucrative private

sector jobs or migrate outside the country. The globalization of economy and the

decentralization of production of goods and services by the multinational corporations

have totally altered perception for these youth. The success theme has become universal

and successful performers are the youth who are perceived to have imbibed the western

lifestyles to the maximum extent.

Automobile market is of significant interest because of the substantial impacts of

automobile production and use on a variety of public policy concerns including trade

flows, business cycles etc. Automobiles are highly differentiated durable goods with

variable lifetimes (Berkovee 1985). The story of the car is one of the most important

chapters in the history of transport. Millions of people use their cars to help them earn a

living or to travel for pleasure. The origin of the car can be traced to Europe (Rani 2008).

India’s first motor car on the streets was seen in 1898. Then for the next fifty two years,

cars were imported to satisfy domestic demand. Between 1910 and 1920, the automobile

industry made a humble beginning by setting up assembly plants in Mumbai, Calcutta

and Chennai. In 1946, premier automobiles Ltd. (PAL) manufactured the first car in the

country by assembling “Dodge Desto” and “Plymouth” cars at its Kurla plant. Hindustan

Motors started as a manufacturer of auto components and then graduated to manufacture

of cars in 1949. (Goyal and Aggarwal 2008).

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The delicensing of automobile industry in 1993, opened the gates to a virtual

flood of international automakers. The automobile sector experienced a sea change in the

car segment with the number of entrants like Toyota, Honda, Ford, and GM etc. Indian

companies like Tata, Mahindra and Mahindra, HM and Maruti are given a tough run for

their money by the foreign players.

The government of India introduced radical changes in its economic policies in

1991. In May 1993, the passenger car industry was delicenced and majority foreign

equity participation was allowed. After liberalization, the passenger car industry in the

nineties was characterized by an increase in the number of brands available in the market,

which caused brands to compete on the basis of product features.

Automobile sales in India have been growing at a fast rate due to easier

availability of loans and launch of several new models instead of the fact that most auto

makers raised prices thrice in 2010 to offset rise in taxes and input costs. In today’s

scenario, people in rural and semi urban areas are trying to elevate their life style and

people in metropolitan cities are completely disappointed with the public transport

system. This has lead to the exponential sales of passenger car segment in the domestic

market (Kaushik and Kaushik, 2008). The consumer demand function is based on

discrete choices and during each market period, every consumer is assumed to choose the

optimal vehicle package from among those available (Berkovee 1985).

A number of studies have been conducted on consumer behaviour towards cars

covering urban segment (like Newman & Staelin (1972), Padmanabhan & Rao (1993),

Goyal & Aggarwal (2008) etc.) but they have ignored the rural one. Rural market is

expanding both in size and volume and any marketing manager will be missing a great

opportunity if he does not tap this segment. Further, urban markets have become

congested with too many competitors and have reached near a saturation point. Rural

markets have become the main avenue with potential for consumption of variety of

products and services.

India, being largely an agricultural and rural oriented economy, need for assessing

the potential for rural business and studying buying behavior in rural market is

imperative. The rural market has become an important aspect of marketing in the Indian

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marketing environment today (Adesara, 2004). The present need is to focus on rural

markets. This is of paramount importance in the Indian marketing environment as rural

and urban market in our country is so diverse by nature that urban marketing strategies

just cannot be successfully extended to rural markets.

People in rural and semi urban areas are trying to upgrade their lifestyle by

purchasing new small, mid size and luxury cars (Kaushik and Kaushik, 2008). If rural

Punjab is taken into consideration then sports utility vehicles are most common in these

areas. The present study focuses on consumer behavior towards cars. The rural consumer

is in a buoyant mood and has an optimistic outlook. This is a positive sign and an

indicator for the car industry, but nothing is available in a platter and tapping the rural

market is real hard work but nevertheless, the future no doubt, lies in the rural markets,

since the size of rural market in quantitative and qualitative terms, is growing at a great

pace (Dogra and Ghuman 2008).

Hence the thrust of this proposed study will be on a comparison between rural and

urban consumers especially to understand the rural behavior in a more comprehensive

way. No single study has attempted to understand consumer behavior with respect to

different segments of cars (like small, mid or SUV segment) but this study not only

focuses on comparison of perception towards different segments of them but also their

preference in both urban and rural market. It will be helpful for various car

manufacturers to know about purchase behavior of rural segment and accordingly they

can form comprehensive strategies for them.

9.1 OBJECTIVES OF THE STUDY:

1. To analyze and compare the individual search strategies before purchasing new

cars in urban and rural market.

2. To study the perception of urban and rural consumers towards different brands of

cars.

3. To examine the factors considered by both the rural and their urban counterparts

to buy new cars.

4. To study the role of reference groups in influencing their purchase decisions.

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5. To study the role of promotional strategies influencing the purchase decisions of

rural and urban consumers.

9.2 DATABASE AND RESEARCH METHODOLOGY

The present work is primarily based on primary data collected from 477

respondents from Punjab region (238 rural respondents and 239 urban respondents). The

respondents were interviewed through a non-disguised structured schedule in both

English and Punjabi language. However, secondary data have also been used to

emphasize the distinct features of automobile industry and rural market. These sources

were used as supporting evidence to justify the significance of the study.

9.3 UNIVERSE OF THE STUDY, SAMPLE SIZE AND SAMPLING DESIGN

The present study is focused on the consumers residing in both urban and rural

areas of three economically significant districts (viz. Amritsar, Jalandhar and Ludhiana)

of Punjab state.

The present study used a survey method for the collection of data. Sample of 477

respondents were taken, out of which 239 respondents were taken from urban area and to

238 from rural area. The data was collected from three economically significant districts

of Punjab Viz. Amritsar, Jalandhar and Ludhiana.

Out of each district, three community blocks were considered on random

sampling. Chit method was used to select the blocks of each district. From each block

five villages were selected by convenience cum judgmental sampling technique as the

product taken in the study is a expensive so remote village and less developed villages

were ignored.

The present study is primarily based on primary data and to collect the data,

survey method had been through a non-disguised structured schedule comprising

questions of dichotomous type, multiple choice, ratio scale and Likert scale. With the

help of conceptual framework, the dimensions already identified were categorized

according to the existing established constructs. Some of the dimensions had been

adapted with modification as per the requirement of the rural.

Dimensions in the questionnaire were taken from the previous studies like Anand

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(2006), Berkovee (1985), Dey & Adhikari (1998), Kaushik & Kaushik (2008), Furse et

al. (1984), Hundal (2001), Punj & Staelin (1983), Jain (2011), Thakar et al. (2009) etc.

The questionnaire was pre-tested on 25 urban and 25 rural respondents and necessary

corrections were done by having meeting with the car experts like managers of Swani

Motors, Lalli Motors, Novelty Hyundai, Rishabh Four wheels, Amritsar. The reliability

of the dimensions were assessed using Cronbach Alpha. This method of pretesting is to

ensure that understanding of the respondents about the statement used in the

questionnaire, whether addition or deletion of the items are required, whether changing of

words would make the clarity of dimensions or changing order of the statements would

ensure greater coherence. The schedule consisted of following questions:

Part 1- This part of the schedule consisted of personal information about the

respondents regarding their Name, Address, Age, Occupation, Educational Qualification,

Family Income.

Part 2- First four questions of this part are general questions regarding cars. Fifth

question dealt with the Pre-Purchase Search Strategies adopted by consumers. Sixth

question was regarding variables that motivate consumers to buy new car. Seventh

question dealt with the features that consumers look upon while purchasing new car.

Eighth question dealt with the variables that affect consumers in selecting particular

brand of car. Ninth question was about attributes of cars. Tenth question dealt with the

role of reference groups in purchase decisions and then last question was regarding

consumer’s perception towards promotional strategies followed by car manufacturers.

9.4 METHODOLOGY

Commensurate with the objectives of the study to study the consumer behavior of

urban and rural consumers of Punjab towards cars, the survey was analyzed and

categorized by using descriptive statistical tools. Descriptive statistics was used to

organize and summarize the data at hand to make them more intelligible (Singleton &

Straits, 2005). Combination of figures and numerical methods were put in to explore

possible patterns and the data characteristics. Tables and figures are presented in proper

titles, caption to show clear, self-descriptive, and informative displays of the results. The

various tools used in the study are described as:

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Factor Analysis

Discriminant Analysis

Cluster Analysis

Conjoint Analysis

Weighted Averages

Independent sample T-test

The study presents a chapter wise comparative analysis of rural and urban

consumers’ behavior towards cars. Findings and recommendations are given below-

9.5 FINDINGS AND RECOMMENDATIONS

9.51 Findings of Analysis of Pre-Purchase Search Strategies-

“Out of Store Search Factor” is the most significant factor which explained

22.174% of the variance. The most important dimension in this factor is “I spent a

lot of time in reading books and magazines” with maximum factor loading of

0.759. Three other statements that fall in factor 1 are “I spent lot of time in

Reading about different Car Ratings” (0.758), “I spent lot of time in Looking at

Automobile Shows on Different Channels” (0.651) and “I spent lot of time in

Visiting Different Websites for Information” (0.516). All these statements clearly

showed that customers believe in “Out of Store Search” the most as they may be

thinking that people from Inside Company may tend to fool the customer.

Customer from both rural and urban area tries to collect information from other

mediums rather than company’s offices or employees.

“Others’ Involvement” is the second most important factor that explained

16.404% of the variance. The important dimensions in this factor are “I spent a lot

of time in looking at advertisements of cars” (0.740), “I spent a lot of time in

consulting opinion leaders” (0.648) and “I spent a lot of time in inquiring about

cars from different experts” (0.415). All these statements clearly showed that

customers take the opinion of others in taking the decision regarding purchase of

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car. Advertisement is the most important medium in deciding for purchase of car

in both urban and rural area.

“Dealers’ Visit” accounts for 15.784% of the variance. The important variables

in this factor are “I spent a lot of time in talking to sales persons” (0.718), “I spent

a lot of time in test driving cars” (0.746) and “I spent a lot of time in walking

around dealer’s showroom” (0.572). Both urban and their rural counterparts

frequently visit different dealers to get more and more information about cars.

Dealers try to satisfy them by providing them with test drives of different cars.

Results of weighted average method shows that “Out of store search” is more

important in urban area with weighted average score of 3.7751 as compared to

rural one with score of 3.5021. The second factor “others involvement” is again

more important in urban area with weighted average score of 3.8438 and

weighted average score of rural area is 3.4509. The third factor “dealers’ visits are

again important in urban area with weighted average score of 3.7846 as compared

to 3.6414 in rural area. In short, it can be said that all these factors are more

important in urban area.

Results of T- Test clearly shows the following results

i. There is a significant difference in rural and urban customers in relation with “Out

of Store Search Factor”.

ii. There is a significant difference in urban and rural customers in relation with

“Others’ Involvement Factor”.

iii. There is no significant difference in urban and rural customers in relation with

“Dealers’ Visits”.

9.52 Findings of Analysis of Factors Motivating New Car Purchase-

The factors that motivate buyer to purchase a new car have been studied in the

first part. The reliability of the construct have been calculated with the help of Cronbach

alpha. Value of cronbach alpha comes out to be .7726 which is an acceptable figure.

“Standard of Living” is the most important factor that explained 27.094% of the

variance. The variables included in this factor are “Marketing Influence (.687)”,

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“Symbol of Social Status” (.682), “Luxurious Item” (.678) and “Source of

Entertainment” (.649). All these variables when combined can be written as

standard of living. So the most important factor that motivates a buyer to buy a

new car is the standard of living. People purchase new cars to raise their standard

of living.

Fair Deal is the second most important factor due to which people purchase new

car is when they get fair deal from the company. This factor accounted for the

variance of 13.127% of the variance. Variables that make up this factor are

“Guarantee/Warranty (.831)” , “Competitive Price (.676)” and “Helps in

Transportation in Times of Emergency (.595)”. So people are attracted towards

deals that companies offer.

Need of the Hour is the third important factor accounted for 10.319% of the

variance. People tend to buy a new car when they really in need of it. So

sometimes car becomes the necessity for the people. Variables included in this

factor are “Required by my Family Members (.704)”, “Business Use or Purpose

(.695)”, “Credit Payment (.575)” and “Item of Necessity (.530)”. Factors reflect

that people buy car when they actually need it.

To find out the relative importance of these factors, weighted average method

have been applied whereby we find mean scores of the variables in particular

factor individually of urban and rural customers. It have been observed that all the

three factors are more important in urban areas as compared to rural one.

Independent samples T test have been applied to test the significant differences, if

any, between two groups on the basis of these variables. Before applying

independent samples T test, Levene’s Test is used to test whether the variances

are equal or not. The results revealed that there is no significant difference

between both urban and their rural counterparts as far as following variables are

concerned

Item of Necessity

Time Saving Device

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Competitive Price

Guarantee / Warranty

Helps in Transportation at the Time of Emergency

Required by my Family Members

The second part dealt with features that customers look upon before purchasing

new car. Twenty seven features have been identified and presented to customers and

asked them to rate those on five point scale. The reliability of the construct have been

checked with the help of cronbach alpha which comes out to be 0.9143 which is an

acceptable figure. Findings of this part can be summarized as-

Convenience is the most significant factor which explained 10.370% of the

variance. The most important variable in this factor is “Front Cup Holder” with

.688 factor loading. The other variables fall in this factor are foot rest (.625),

headlight alarm (.650), headlight height adjuster (.571) and rear window defogger

(.477). all these variable accounts for customers convenience while sitting in a

car.

Easy to operate explains 9.888% of the variance. All the variables falling in this

factor are related with operational ease. The most important variable in this factor

is power door mirror with factor loading of .761 and other variables are power

windows fron and rear (.719), power steering with tilt (.713) and power door lock

(.710). customers give priority to operational ease while selecting different cars.

Security factor accounts for 9.582% of the variance. The variables falling under

this factor are SRS airbags with factor loading of .739. other variables included in

this factor are fuel consumption with display (.698), seat belts front/rear (.575),

child proof rear door locks (.541), height adjustable driving seat (.503) and day/

night mirror (.467). people now a days are more inclined towards security features

due to high accidental rate.

Appearance is also one of the important factor now a days as every company is

trying to improve on this dimension. This factor accounts for 9.481 % of the

variance. The variables included in this factor are alloy wheels (.690), fog lamps

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(.571) and body coloured bumpers (.553). people react very effectively to new

and latest versions of cars with different appearances.

Added Attractions accounts for 8.262% of the variance. The variables included in

this factor are tinted glass (.767), dual horn (.730) and halogen headlights (.627).

these attractions are very important for car manufacturers to remain competitive

and helps in increasing sales of the company.

Spacious factor accounts for 6.475% of the variance. The variables included in

this factor are spacious interiors (.808), multiple storage (.637) and LCD

Information display (.413). it is important for joint families to look for spacious

cars so as to adjust family in it.

Accessories is the last important factor that accounts for 5.449 % of the variance.

The variables included in this factor are AC/ Heater (.517) and Advanced

integrated audio player with remote control (.506). these accessories now a days

are inbuilt by the company itself and in some cases customers have to install them

from outside the company outlet.

9.53 Findings of analyzing Measurement of Consumer Buying

Preferences of Brands and Attribute Selection

This chapter presents and validates comprehensive way to explain factors

affecting selection of a particular brand and attributes of a car. This chapter clearly states

the comparison between urban and rural consumers regarding factors affecting selection

of a particular brand of a car. There have been a growing interest in the area of branding,

more so because brand represents the goodwill of the firm. Brand is a powerful

differentiator in a highly competitive market place. Buyer behavior is very much

influenced by the brand name and when we talk about brands of cars, there are too many

brands which tend to give more choices to the customers to choose from. The technique

used to analyze this particular problem is Weighted Average Scores of different factors

and ranking is done accordingly. Major factors that determine the selection brand of a car

are presented to respondent and asked to rate them on five point scale and further

weighted averages are calculated in order to analyze the importance of those particular

factors in both rural and urban areas.

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The most important factor that make up the selection of particular brand in urban

area is acquaintance with retailer and least important factor is guarantee/warranty. It may

be due to the fact that guarantee / warranty are almost same for all brands but

acquaintance with retailer really make up the mind of customer as these acquaintances

help in satisfying the customer in pre-purchase phase.

The most important factor that make up the selection of particular brand in rural

area is acquaintance with retailer and least important factor is guarantee/warranty. It can

be seen that results are almost similar for urban and rural areas of Punjab so marketer

need not to make different strategies for them. Same policies may work for both areas.

Inferring consumer preference towards a product and forecasting associate market

potential involve dealing with much uncertainty and conjoint analysis is a contingent

rating method that allow one to capture consumer preferences rather accurately by

providing consumers’ with similar choice situations (Lee and Cho 2009). Conjoint

Analysis is a multivariate technique developed specifically to understand how

respondents develop preferences for any type of object (products, services or ideas). (Hair

et al. 2011).

The results of conjoint analysis states that most important brand in rural area is

Hyundai and least important is Maruti where as LPG is most desirable variant and price

range is above 8 Lakh. The most important combination is Hyundai brand, LPG variant

and price range above 8 Lakh. Highest range is for brand and lowest is for fuel variant so

it can be said that people take brand as most important attribute in rural areas and they

give least importance to fuel variant. LPG variants of cars are less commonly available in

the market but people demand for these cars as running cost is low.

It is revealed that most important brand in urban area is Hyundai and least

important is Maruti where as LPG is most desirable variant and price range is above 8

Lacs. The most important combination is Hyundai brand, LPG variant and price range

above 8 Lacs. Highest range is for brand and lowest is for price so we can say that people

take brand as most important attribute in urban areas and they give least importance to

price range.

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9.54 Analysis of Role of Reference Groups in Making Purchase

Decisions

The marketers have to go beyond the various influences on buyer and develop an

understanding of how consumers actually make their buying decisions. Specifically,

marketers must identify who makes the buying decisions and the steps in the buying

process and in this context, the respondents were asked about the various roles played by

their different reference groups in purchase decision of cars.

For the present study, The variables selected are Product Selection, Brand

Selection, Dealer Selection, Initiating the Purchase, Influencing the Purchase Decision,

Final Decision to Buy Product, Decision about Diesel or Petrol Variant, Colour Selection,

Price Range Decision, Decision about Purchasing New or Used Car and Timing of

Purchase of New Car.

Results of Urban Group of Respondents are summarized as follows-

Product / Car selection is the most important task and this decision is influenced

by family members and other reference groups. In the present survey, it has been

found that 24,89% of the customer themselves takes decision about selecting cars

followed by spouse (16.17%). Children play least role in selecting cars as they

account for only 5.63%.

Product / Car selection is the most important task and this decision is influenced

by family members and other reference groups. In the present survey, it has been

found that 24,89% of the customer themselves takes decision about selecting cars

followed by spouse (16.17%). Children play least role in selecting cars as they

account for only 5.63%.

Selection of a brand of car is a critical task and it has been examined that 23.3%

of the customers takes decision themselves about car followed by spouse and

opinion leaders Children play least role in selection of brand

It has been revealed that friends play a major role in selecting dealer for car

purchase followed by customers himself and opinion leaders. Children and spouse

play negligible role in selection of car dealer.

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Spouse is the main initiator in urban area for purchasing a new car. Spouse

accounted for 26.94% of the total followed by customer himself and children.

This variable is very important for the marketer to study as marketer could

directly approach the initiator for selling the product.

21.86% of the respondents feels that friends influence the purchase decision the

most. 18.46% of the respondents feel that spouse is the most influencer in

purchase decision and parents are the least influencer.

20.53% of the respondents feel that spouse takes the ultimate and final decision

to buy a product followed by parents and respondent himself. Friends and social

group play a least role in final decision of a product / car.

25.76% of the respondents think that they decide whether to buy petrol or diesel

variant followed by friends and spouse. Children and parents play negligible role

in this decision.

Colour of a car is selected with the consensus of all family members including

spouse, children, parents, respondent himself and opinion leader, friends and

social group do not have much to say about colour of a car.

Price range is the most important decision which is taken by customer himself. In

our study, it has been revealed that customer takes the price range decision 22.3%

of the cases followed by children and spouse.

Whether to purchase new or used car is very important decision which is 29.38%

of the time is taken by customer himself. Spouse and parents also influence this

decision to a large extent.

Timing of purchase of a new car is decided by customer himself in 21.86% of the

cases followed by children, parents, spouse and brothers/ sisters.

Results for Rural Group of Respondents are summarized as follows

Opinion leaders have the maximum say about the selection of product in rural

market. In rural areas, 15.33% of the customers feel that they take decision about

product selection in rural area. Children and spouse don’t have much influence on

product selection.

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In rural area, opinion leaders and customers themselves have the maximum

influence on brand selection. Children and parents have least concern about brand

selection.

In 27.47% of the cases, customer himself takes decision about dealer selection

followed by opinion leaders with 20.25%. Children and spouse are not considered

much while selecting dealers.

Customer himself , brothers / sisters, parents and children play a vital role in

initiating the purchase. This variable is mostly influenced by family members.

Opinion leaders play negligible role in initiating the purchase of a car.

20.48% of the customer themselves act as influencer in taking purchase decision.

Brothers / Sisters, opinion leaders and social group are influencer in case of

decision about purchasing a car. Children play a negligible role in this decision.

Opinion leaders have the maximum say about the selection of product in rural

market. In rural areas, 15.33% of the customers feel that they take decision about

product selection in rural area. Children and spouse have don’t have much

influence on product selection.

In rural area, opinion leaders and customers themselves have the maximum

influence on brand selection. Children and parents have least concern about brand

selection.

In 27.47% of the cases, customer himself takes decision about dealer selection

followed by opinion leaders with 20.25%. Children and spouse are not considered

much while selecting dealers.

Customer himself , brothers / sisters, parents and children play a vital role in

initiating the purchase. This variable is mostly influenced by family members.

Opinion leaders play negligible role in initiating the purchase of a car.

20.48% of the customer themselves act as influencer in taking purchase decision.

Brothers / Sisters, opinion leaders and social group are influencer in case of

decision about purchasing a car. Children play a negligible role in this decision.

9.55 Analysis of Perception towards Promotional Strategies

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This chapter presents and validates comprehensive model to explain perception

regarding promotional strategies adopted by urban consumers and their rural

counterparts. This chapter clearly states the comparison between urban and rural

consumers regarding promotional strategies adopted by car companies.

Pricing Influence factor accounted for 9.219% of the variance. The most

important dimension in this factor is “Installment Purchase Facility is the most

important consideration” with maximum factor loading of .779. The second

important dimension “0% interest facility” have the factor loading of .761. “Off

Season Discounts and festival offers” also come under same construct which have

the factor loading of .694 and .623 respectively. These all promotional strategies

are related with monetary benefits. This may be due to the fact that monetary

benefits are the most influential for both urban and rural customer. Motivation in

the form of money is considered the best. Therefore, it is the most important

factor in determining behavior towards promotional strategies of companies.

local Advertisement is the second most important factor. Most important

dimension in this construct is “wall writings serve as an input to my decision

making process with factor loading of .635. The other dimensions related with

this construct are local brand ambassador (.615), telemarketing is very effective

(.539) and presentation by company associate (.490). These all variables are

related with local advertisements that are mostly prevailing in rural areas. Rural

people are more influenced by local brand ambassadors than celebrity one and

concept of wall writing is very famous in these regions.

Preliminary Informational Tool accounts for 7.287% of the variance. The most

important dimension in this construct is “Free and Better after Sales Service”

(.680). The other important variables are “Free Test Drives” (.672), “Brochures”

(.614) and “Catalogues” (.452). These variables account for preliminary

information which is provided to customers when they search for cars. These all

variables act as effective promotional tools for the company.

Visual Display accounts for 6.980% of the variance. The dimensions fall under

this factor are “Exchange Offers” (.627), “Fairs & Melas” (.621) Exhibitions and

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Road Shows” (.58) & “Modern Promotional Tools” (.401). All car companies are

trying to visually display their products (cars) in order to attract more and more

customers. They are organizing Road Shows, Melas and Exhibition just to show

their product in a better way.

Advertisement Effectiveness accounts for 6.346% of the variance. Dimensions in

this construct are “TV Advertisements have a great Visual Appeal” (.687) and

“Newspaper Advertisements provide Current Information about the Cars” (.631).

Car companies are focusing more on advertisements than any other promotional

medium as it is very effective in the competitive environment.

Web Marketing and Incentives accounts for 6.323% of the variance. The

dimensions in this construct are “Web Pages / Websites provide required

Information to Customers” (.746), “Free Gift Schemes does not act as Strong

Motivators to Me” (.598), “Online Discussions” (.546) and “Celebrity

Endorsement” (.401). People tend to be influenced by incentives and also they

prefer web marketing as they are more influenced by technology.

Traditional Promotional Tools factor accounts for 6.078% of the variance.

Important dimensions in this factor are “Radio Announcements are not strong

Advertisement Tool now days” (.653), “Posters/ Printed Displays are Older

Promotional Tools” (.621) and “Direct Mails are not Effective Now Days” (.579).

Now a day’s, people are not influenced by older promotional tools they really

admire new and latest techniques.

Print Media factor accounts for 4.876% of the variance. Variables under this

construct are “Magazine Ads” (.682) and “Regular E-mails” (.564). People ranked

this factor as least important as magazines have become older media to advertise

the product and rural people are not friendly with technology so they don’t prefer

E- mails also.

Results of Discriminant Analysis clearly showed that the independent variable

Web Marketing and incentives is able to discriminate two groups to a large extent.

The two groups have different perception towards Web Marketing and Incentives.

It may be due to the fact that rural people have less access to technology as

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compared to urban one so they don’t consider it as a better promotional tool

where as urban people are largely attracted by this tool. Advertising Media which

includes Wall Writings, Local Brand Ambassador is able to attract rural people to

a large extent but urban people consider these local ads as less attractive. Price is

the main consideration especially for rural people as their per capita income is

low as compared to urban one. So they consider Pricing Incentives as the best

promotional tool. This variable also differentiates the perceptions of two groups.

Print Media which include magazine ads, Emails etc. are able to attract urban

people to a great extent as compared to the rural one. Other four variables like

Preliminary Informational Tool, Visual Display, Advertisement Effectiveness and

Traditional Promotional Tools are not able to discriminate two groups and their

loadings are also less.

Results of Cluster Analysis for Urban Group

1. Cluster 1 (Monetary Incentives) - Cluster 1 consists of fourty seven respondents

out of the total of 239. This cluster is very positive about promotional strategies

that are expressed in monetary terms like 0% interest schemes, installment

purchase facility, off-season discount, festival offers etc. They are neutral about

all other promotional schemes i.e. they are not much attracted by any other

promotional scheme. In order to attract such customers, marketer have to come up

with the promotional schemes that can be directly expressed in monetary terms.

2. Cluster 2 (Influenced) - There are 89 respondents in second cluster and this is

the biggest cluster in terms of respondents. These respondents are very outgoing

as they consider all the promotional strategies as important one. Marketers have to

use new and unique strategies in order to attract this group. It can be said that

promotional strategies work best with such a type of group. So companies should

introduce new and modern tools in order to attract this segment.

3. Cluster 3 (Indifferent) - This group is some what negative about the promotional

schemes. They don’t consider any of promotional strategy as effective one. There

are 24 respondents in this cluster. Marketers cannot attract this group just by

introducing new or improved promotional schemes rather they have to focus on

other parameters to attract them like product quality, branding, pricing, packaging

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etc. Companies need not focus on this group as far as promotional schemes are

concerned.

4. Cluster 4 (Conventional) - There are 79 respondents in this cluster. This cluster

have positive attitude towards older promotional schemes like TV

Advertisements, Newspaper Advertisements. They have positive impression

towards better after sales services. It can be said that these people are more

conservative and rely more on older tools of promotion.

Results of Cluster Analysis for Rural Group

1. Cluster 1 (Contemporary)- 130 respondents belong to this cluster. People of this

cluster are very positive about 0% interest facility, installment purchase facility,

festival offers and off season discounts. Free test drives TV advertisements and

catalogues act as motivation for them to purchase a particular car. Modern

technologies like tele marketing, web pages, presentation by company associates

and visual display through exhibitions also affect them. So this cluster seems to be

trendy and is more influenced by modern techniques. ANOVA table clearly

shows that there is no significant difference in perceiving three variables by two

groups and those three variables are free and better after sales service, magazine

adds and fairs/ melas. Overall, we can say that this cluster is more attracted by

promotional strategies than second one.

2. Cluster 2 (Indifferent) - Number of respondents belonging to this cluster is 108.

These respondents seem to be neutral about all the promotional schemes. Value of

every variable in final cluster center of this group is less than 4 which means this

group is not affected much by the promotional strategies. They consider television

adds the most effective one. E-mails and online discussions seem to be ineffective

for them. It can be said that this cluster believes in return for money and does not

believe in strategies adopted by companies to attract customers.

9.6 IMPLICATIONS AND RECOMMENDATIONS

Behavior displayed by both the groups clearly showed that major factors that

accounted for Pre-Purchase Search Strategies are “Out of Store Search”, Others’

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Involvement” and “Dealer’s Visit”. Marketer should try to improve on these aspects.

Customers rely more on “Out of Store Search” for collecting information about specific

cars. So, Marketers must focus on publishing books, Auto Magazines, organizing

automobile shows and fairs and designing informative websites to both urban and rural

segment. Displaying car in the village or city for few days may also attract customers on

large scale.

In order to approach rural area, marketer must try to address opinion leaders like

Sarpanchs of villages and experts as rural people rely more on these personalities for

collecting information. Rural people are also impressed by NRI’S and try to imitate them

so companies should try to target NRI’S.

It had been revealed that there is significant difference in urban and rural

customers with regard to “Out of Store Search” and “Others Involvement”. As urban

people focus more on auto shows, exhibitions, magazines where as rural people don’t

have much access to them. Marketer in order to tap rural segment, must approach

renowned personalities in villages and try to attract them and satisfy their needs. At last it

can be said that Pre-Purchase Strategies adopted by both urban and their rural

counterparts are different and marketer have to frame different policies for them.

The results clearly showed that customers prefer to purchase car according to

convenience. They want features like headlight alarm, front cup holders etc. Marketers

have to come out with new and latest features that accounts for convenience of customers

and more over these features should be easy to operate. Security is also one of the main

issue so, marketer can target customers on the basis of security features. Appearance of

cars and inner space should also be kept in mind. Companies should try to come out with

such features and try to reflect these features in their promotional strategies in order to

aware the customers about them.

The results revealed that in both urban and rural areas, the most important factor

that make up the brand selection is acquaintance with retailer and least important is

warranty / guarantee. It can be clearly seen that the most important brand in both rural as

well as urban area is Hyundai as this particular brand came out with the various

innovative versions like i10, i20, Tucson, Verna etc. People in Punjab region prefer cars

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with low running cost so they mostly prefer LPG variant and they assign less importance

to petrol which is quiet expensive. Disposable income in Punjab region is somewhat high

so people prefer price range of above 8 Lacs. If marketer wants to approach rural and

urban Punjab, they have to come out with the new and latest segments of cars with LPG

variant. Hyundai is very famous in Punjab but it should try to come out with LPG so that

desires of individuals can be satisfied. If we look at overall statistical range, it can be seen

that in both urban and rural area, branding is the most important attribute but the least

important attribute in rural area is fuel variant where as price range in urban area. It may

be due to the fact that disposable income in rural area is somewhat less than urban area so

rural people give more weightage to pricing where as urban people are more concerned

about fuel variant than price range. Hence in order to increase customer base, companies

have to come out with more innovative versions of cars and try to give LPG version in

those cars.

The results revealed that the purchase decisions in urban areas are mostly

influenced by the consumer himself/herself, friends but parents and children and social

group have least influence on these decisions. The purchase decisions in rural areas are

affected mostly by consumer himself/herself and opinion leaders like Sarpanchs where as

all other members of reference group have least impact. It is recommended that marketer

should target opinion leaders in order to increase sales in rural areas and in case of urban

areas, marketer have to focus on other members also like parents, friends etc. Marketer

have to frame better policies for urban consumers as they tend to ask others before

purchasing cars where as rural customers rely on opinion leaders so companies should try

to target them in order to attract rural customers.

Results of perception towards promotional strategies revealed that the first and the

foremost factor is “Pricing Influence” So it can be interpreted that monetary benefits

promote the cars in both urban and rural areas to a great extent. Second important factor

is “local Advertisements” which are very prominent in Punjab region. “Preliminary

Information”, “Visual Display”, “Advertisement Effectiveness”, “Web Marketing and

Incentives”, “Traditional Promotional Tools” and “Print Media” are the important factors

that determine the perception of urban and rural Punjab towards promotional strategies

adopted by car manufacturers. Discriminant analysis is also used to differentiate both

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respondent groups by taking factor scores as independent variable and background as

grouping variable. It has been found that web marketing and incentives is able to

discriminate two groups to a large extent. It may be due to the fact that rural people don’t

have that much access to internet as urban people have. Second discriminating factor

comes to be advertisement media where we can well imagine that rural people are more

attractive to local brand ambassadors, wall writings but urban people don’t consider them

as a reliable source. Price is the main consideration for rural people due to low per capita

income. Print media is able to attract urban people easily as compared to rural one.

Results of cluster analysis clearly shows that rural respondents can be classified under

two groups named as “Contemporary” and “Indifferent”. The first group is very positive

about latest schemes & tools where as second group seem to be neutral about promotional

schemes i.e. They are not affected by these schemes. Cluster analysis divided urban

respondent in four different groups. The first group named as “monetary incentive”. This

group is very positive towards monetary benefits. Second group named as “Influenced”.

These respondents are very outgoing as they consider promotional strategies as important

part of decision making. The third group “Indifferent” don’t consider these tools as

effective and fourth group “Conventional” focus more on older promotional tools like TV

adds, newspapers etc.

Marketer have to focus more on monetary benefits as people are more influenced

by it. Local advertisements are also effective in Punjab region. Marketer can easily

understand that urban and rural people are different on the aspects like web marketing,

advertisement media, pricing influence and print media. Marketer can easily tap the urban

market with the help of web marketing but rural market is not much influenced by it.

They are more attracted by local advertisements, local brand ambassadors etc. Marketer

have to provide monetary incentives to rural people in order to attract them but these

techniques play negligible role in urban areas. Cluster analysis clearly shows two groups

in rural areas. Contemporary group consists of majority of respondents and they are

positive about new and latest techniques but indifferent group is not at all influenced by

these strategies. It is recommended that marketer should try to focus on contemporary

group as they want innovativeness and should focus less on indifferent group as they

don’t react to promotional strategies. Urban respondents are divided into four groups

namely “Monetary Incentive” ,“Influenced”, Indifferent and Conventional Group.

Majority of respondents fall in influenced group and conventional group. It is

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recommended that an attempt should be made to introduce new and innovative

promotional strategies which lead to increase in sales of these two groups.

9.7 CONCLUSION

After the detailed analysis of the study, it is the time to bring this exhaustive study to

a meaningful conclusion. India carmakers have shown remarkable agility to cope with global

players. The expected rise in income levels of rural people, wide choice of models, and easy

availability of finance at low interest rates will drive growth in passenger car segment and

future looks even brighter. The study brings out the fact that there is a great attitudinal and

structural change in the rural market; and marketers need to concentrate the greener pasture

called rural market. Every effort have been made to make the implications fruitful for the

marketers whenever they have to make strategies to tap the rural market and to organize the

urban market. The data collected, compiled and analyzed to bring profitable insights for the

marketers. Various factors and motivators that propel the purchase behaviour of urban and

rural masses have been compiled through primary data and the changes in the outlook of the

rural and urban mindset has to be considered carefully by the marketers. The rising income

levels, the advancing technological changes, the broadening of horizons have compelling

effects on the marketers to now concentrate on a wide variety of factors demonstrated by

target consumers in rural as well as urban markets. Traditional consumers are replaced by

modern one. The equality of gender, paternal dominance is substituted by maternal

dominance and increase of consumer awareness through exhibitions, Melas etc. at both urban

and rural locations. Marketers have to come out with new and innovative promotional

techniques to attract this modern segment of consumers. Pre- Purchase search strategies

adopted by consumers have to be carefully tackled by marketers in order to marked the

product and hence increasing profitability. Cars now a days shifting from luxury item to

necessity, marketer have to target every segment of prospective buyers in a careful manner.

Promotional strategies have to be made different for both urban and rural buyers. It is hoped

that the marketer will find the present study useful and logical for tapping both urban and

rural segment of society. The goal is to highlight the ground reality of the rural market

towards purchase of cars so that the marketers can concentrate on the right track to tap the

rural market by keeping in mind the findings of the study. By understanding these underlying

factors associated with purchase behavior, policies can be designed on the desired lines and

also implement them smoothly so that rural area begin to reap their full potential.

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9.8 LIMITATIONS OF THE STUDY

1. The present study is confined to one state only that is Punjab and its results cannot be

generalized in other states due to socio- cultural and economic differences.

2. Only three districts: Jalandhar, Amritsar and Ludhiana have been considered for the

survey. They may not represent whole of Punjab.

3. The sample taken on judgment basis as respondents so selected belongs to middle or

higher income group and lower segment is ignored. Therefore, results may not be

valid for lower income groups.

4. Dynamic nature of consumer may make the study useless over time and place.

Findings of today may become invalid at other point of time.

9.9 SCOPE FOR FURTHER RESEARCH

1. Since the study is confined to Punjab only. The researchers may focus on other parts

of country to generalize the findings of the study.

2. Interested researchers may concentrate on marketing mix to have in depth knowledge

of the rural areas.

3. Inter Regional Comparison can be made to study the topic in a comprehensive way.