project on consumer buying decision process in purchasing economy class cars

A STUDY ON CONSUMER BUYING DECISION PROCESS
OF ECONOMY CLASS CARS IN BENGALURU
Dissertation submitted in partial fulfilment of the requirements for the award of the
Degree of
MASTER OF BUSINESS ADMINISTRATION OF
BANGALORE UNIVERSITY
By
Guruprasad Upadhya
131GCMA044
Under the guidance of
Mr. A. Chandran
Assistant professor
R.V.INSTITUTE OF MANAGEMENT
Rashtreeya Sikshana Samithi Trust
R V INSTITUTE OF MANAGEMENT
CA-17, 36th
Cross, 26th
Main, 4th
„T‟ Block,
Jayanagar, Bangalore – 560 041
2014–2015

A Study of Consumer Buying Decision Process of Economy Class Cars in Bengaluru
R. V. Institute of Management, Bengaluru Page 2
DECLARATION BY THE STUDENT
I hereby declare that “A Study on Consumer Buying Decision Process of
Economy Class Cars in Bengaluru” is the result of the project work carried
out by me under the guidance of Assistant Professor A. Chandran in partial
fulfilment for the award of Master‟s Degree in Business Administration by
Bangalore University.
I also declare that this project is the outcome of my own efforts and that it has not
been submitted to any other university or Institute for the award of any other degree
or Diploma or Certificate.
Place: Bengaluru Name: Guruprasad Upadhya
Date: Register Number: 131GCMA044

TABLE OF CONTENTS
Chapter No Chapter Headings Page
No
List of tables
List of figures
Executive summary
1
1.1 Automobile Industry
1.2History
1.3 Automobile Industry in India
1.4Growth
1.5Feature Trends in Automobile Industry
1.6Government Initiatives
01
01
04
06
06
07
2 2.1Introduction
2.2Defination
2.3Application of Consumer Behaviour
2.4Factors Influencing Consumer Behaviour
2.5Factors affecting consumer behaviour
2.6 Market Structure and Decision Process
2.7Development of Marketing Concept
2.8Implementing the Marketing Concept
2.9Role of Consumer Research
2.10STP
2.11Model and Process of Decision Making
2.12Economy Class Car
2.13Market Share in Passenger Cars in India
08
09
10
11
13
21
22
22
23
24
24
25
26
3 3.1Review of Literature
3.2Statement of the Problem
3.3Objective of the Study
3.4Scope of the Study
3.5Operational Definition
3.6Methodology
3.7Data collection
3.8Sampling
3.9Plan of Studies
3.10Limitation of the Study
28
33
34
34
34
35
35
35
36
36
4 Analysis and Interpretation 37-65
5
5.1 Findings
5.2Conclusion
5.3Suggestions
66
67
68
Bibliography
Annexure

List of Tables
Table no Description Pg no
2.1 Buying decision process 25
2.2 Passenger car differentiation 27
4.1 Depicting the Various cars owned by the respondents 37
4.2 Depicting the Number of Respondents owning the car 39
4.3 Depicting the Value or (price) of the various
respondents cars
40
4.4 Depicting the Various fuel types respondents
cars using
42
4.5 Depicting the Various Factors influenced the
Respondents at the time of buying a car
44
4.6 Depicting the Various factors that influenced the
respondents to buy the car over the other brands
46
4.7 Depicting the Car type the Target group prefer 48
4.8 Depicting the Various Respondents who are Brand
conscious
50
4.9 Depicting the Various perceptions of the Respondents
preference towards brands
52
4.10 Depicting the Various reasons that made the
Respondents to purchase their car
54
4.11 Depicting the Impact of colour on Target Groups
buying decisions
56
4.12 Depicting the Perceptions of Respondents about
economy class car prices
58
4.13 Depicting the Respondents various monthly Family
Income
60
4.14 Depicting the Various colours of the cars that the
respondents are more inclined to purchase
62
4.15 Depicting Respondents priorities while buying a car 64

List of Graphs
Figure no description Pg no
2.13 Market share of passenger cars in India 27
4.1 pie chart showing the various cars owned 38
4.2 Pie Chart depicting the number of respondents
owning the car
39
4.3 pie diagram showing the price of the various
respondents car
41
4.4 Diagram showing the fuel types respondents cars
using
43
4.5 pie chart showing the influencing factors at the
time of purchase of car
45
4.6 pie chart showing the various influencing group 47
4.7 diagram showing the car type the respondents
prefer
49
4.8 pie chart showing the respondents who are brand
conscious
51
4.9 pie chart depicting the perceptions of
respondent‘s preference towards brands
53
4.10 diagram showing the reasons that make
respondents to purchase the car
55
4.11 pie chart showing the importance of colour on
buying decision
57
4.12 pie chart showing the perceptions about
economy class car
59
4.13 diagram showing the respondents monthly
income
61
4.14 Pie chart showing the colours the respondents is
more inclined
63
4.15 diagram showing the various priorities while
buying the car
65

Executive Summery
In this Information Technology era importance of consumer behaviour cannot
be ignored. The manufacturer has understood that he is not the decider of
which products to be produced it is the consumer itself as there is a say
customer is the king.
This study is intending to identify the importance and factors that influence the
consumer in automobile industry to buy an economy class car. What are
consumer‘s preferences towards a particular brand and what are his view
points towards it. Also what is the information he uses before the purchase of
a car.
In this project brief study on automobile industry and its growth and evolution
has been analysed. Also the various factor affecting consumer decision
making and process is being analysed.
Various researchers‘ viewpoints and their views of consumer behaviour have
been analysed. Also study objectives and the type of survey method through
questionnaire are used and all the data are collected around urban areas.
Number of respondent considered is one hundred and their opinions has been
taken as a form of data collection and used for interpretation and suggestions
and outcome of the study is analysed.
Data collection is done from various sources such as magazines, reference
books from various authors, also various web sites regarding consumer
behaviour has been analysed. Also interpretation and analysis of data is done
and suggestions and conclusions are given for on how the consumers are
influenced by various factors knowingly and un-knowingly in their buying
decision process. Finally it is the consumer has to buy the products

CHAPTER 1
INTRODUCTION
1.1Automobile Industry
The automotive industry is a wide range of companies and organizations involved in
the design, development, manufacture, marketing, and selling of motor vehicles. It is
one of the world's most important economic sectors by revenue. The automotive
industry does not include industries dedicated to the maintenance of automobiles
following delivery to the end-user, such as automobile repair shops and motor fuel
filling stations.
Automotive industry is the key driver of any growing economy. It plays a pivotal role
in country's rapid economic and industrial development. It caters to the requirement of
equipment for basic industries like steel, non-ferrous metals, fertilisers, refineries,
petrochemicals, shipping, textiles, plastics, glass, rubber, capital equipments, logistics,
paper, cement, sugar, etc. It facilitates the improvement in various infrastructure
facilities like power, rail and road transport. Due to its deep forward and backward
linkages with almost every segment of the economy, the industry has a strong and
positive multiplier effect and thus propels progress of a nation. The automotive
industry comprises of the automobile and the auto component sectors. It includes
passenger cars; light, medium and heavy commercial vehicles; multi-utility vehicles
such as jeeps, scooters, motor-cycles, three wheelers, tractors, etc; and auto
components like engine parts, drive and transmission parts, suspension and braking
parts , electrical, body and chassis parts; etc
1.2History
The early history of the automobile can be divided into a number of eras, based on the
prevalent means of propulsion. Later periods were defined by trends in exterior
styling, size, and utility preferences. In 1768 the first steam powered auto-mobile
capable of human transportation was built by Nicolas-Joseph Cugnot. In 1807,
François Isaac de Rivaz designed the first car powered by an internal combustion
engine fuelled by hydrogen. In 1886 the first petrol or gasoline powered auto-mobile

the Benz Patent-Motorwagen was invented by Karl Benz.[2]
This is also considered to
be the first "production" vehicle as Benz made several identical copies.
17th and 18th centuries
Ferdinand Verbiest, a member of a Jesuit mission in China, built the first steam-
powered vehicle around 1672 as a toy for the Chinese Emperor. It was of small
enough scale that it could not carry a driver but it was, quite possibly the first working
steam-powered vehicle.
Steam-powered self-propelled vehicles large enough to transport people and cargo
were first devised in the late 18th century. Nicolas-Joseph Cugnot demonstrated his
fardier à vapeur ("steam dray"), an experimental steam-driven artillery tractor, in
1770 and 1771. As Cugnot's design proved to be impractical, his invention was not
developed in his native France. The center of innovation shifted to Great Britain. By
1784, William Murdoch had built a working model of a steam carriage in Redruth.
The first automobile patent in the United States was granted to Oliver Evans in 1789,
and in 1801 Richard Trevithick was running a full-sized vehicle on the roads in
Camborne.
19th century
Many vehicles were in vogue for a time, and over the next decades such innovations
as hand brakes, multi-speed transmissions, and better steering developed. Some were
commercially successful in providing mass transit, until a backlash against these large
speedy vehicles resulted in the passage of the Locomotive Act (1865), which required
many self-propelled vehicles on public roads in the United Kingdom to be preceded
by a man on foot waving a red flag and blowing a horn. This effectively killed road
auto development in the UK for most of the rest of the 19th century; inventors and
engineers shifted their efforts to improvements in railway locomotives. Among other
efforts, in 1815, a professor at Prague Polytechnic, Josef Bozek, built an oil-fired
steam car. Walter Hancock, builder and operator of London steam buses, in 1838 built
a four-seat steam phaeton.

In 1867, Canadian jeweller Henry Seth Taylor demonstrated his 4-wheeled "steam
buggy" at the Stanstead Fair in Stanstead, Quebec, and again the following year. The
basis of the buggy, which he began, building in 1865, was a high-wheeled carriage
with bracing to support a two-cylinder steam engine mounted on the floor. What some
people define as the first "real" automobile was produced by French Amédée Bollée
in 1873, who built self-propelled steam road vehicles to transport groups of
passengers. The American George B. Selden filed for a patent on May 8, 1879. His
application included not only the engine but its use in a 4-wheeled car. Selden filed a
series of amendments to his application which stretched out the legal process,
resulting in a delay of 16 years before the US 549160 was granted on November 5,
1895. Karl Benz, the inventor of numerous car-related technologies, received a
German patent in 1886. The four-stroke petrol (gasoline) internal combustion engine
that constitutes the most prevalent form of modern automotive propulsion is a creation
of Nikolaus Otto. The similar four-stroke diesel engine was invented by Rudolf
Diesel. The hydrogen fuel cell, one of the technologies hailed as a replacement for
gasoline as an energy source for cars, was discovered in principle by Christian
Friedrich Schönbein in 1838. The battery electric car owes its beginnings to Ányos
Jedlik, one of the inventors of the electric motor, and Gaston Planté, who invented the
lead-acid battery in 1859.
The first carriage-sized automobile suitable for use on existing wagon roads in the
United States was a steam powered vehicle invented in 1871, by Dr. J.W. Carhart, a
minister of the Methodist Episcopal Church, in Racine, Wisconsin.It induced the State
of Wisconsin in 1875, to offer a $10,000 award to the first to produce a practical
substitute for the use of horses and other animals. They stipulated that the vehicle
would have to maintain an average speed of more than five miles per hour over a 200-
mile course. The offer led to the first city to city automobile race in the United States,
starting on July 16, 1878, in Green Bay, Wisconsin, and ending in Madison, via
Appleton, Oshkosh, Waupun, Watertown, Fort Atkinson, and Janesville. While seven
vehicles were registered, only two started to compete: the entries from Green Bay and
Oshkosh. The vehicle from Green Bay was faster, but broke down before completing
the race. The Oshkosh finished the 201 mile course in 33 hours and 27 minutes, and

posted an average speed of six miles per hour. In 1879, the legislature awarded half
the prize.
20th and 21st centuries
Steam-powered automobiles continued development all the way into the early 20th
century, but the dissemination of petrol engines as the motive power of choice in the
late 19th century marked the end of steam automobiles except as curiosities. Whether
they will ever be reborn in later technological eras remains to be seen. The 1950s saw
interest in steam-turbine cars powered by small nuclear reactors (this was also true of
aircraft), but the dangers inherent in nuclear fission technology soon killed these
ideas. The need for global changes in energy sources and consumption to bring about
sustainability and energy independence has led 21st century engineers to think once
more about possibilities for steam use, if powered by modern energy sources
controlled with computerized controls, such as advanced electric batteries, fuel cells,
photovoltaics, biofuels, or others.
1.3Automobile industry in India
The Automotive Industry in India is one of the largest automotive markets in the
world. It was previously one of the fastest growing markets globally, but it is
currently experiencing flat or negative growth rates. In 2009, India emerged as Asia's
fourth largest exporter of passenger cars, behind Japan, South Korea, and Thailand,
overtaking Thailand to become third in 2010. As of 2010, India was home to 40
million passenger vehicles. More than 3.7 million automotive vehicles were produced
in India in 2010 (an increase of 33.9%), making India the second fastest growing
automobile market in the world (after China). India's passenger car and commercial
vehicle manufacturing industry recently overtook Brazil to become the sixth largest in
the world, with an annual production of more than 3.9 million units in 2011. From
2011 to 2012, the industry grew 16-18%, selling around three million units.
According to the Society of Indian Automobile Manufacturers, annual vehicle sales
are projected to increase to 4 million by 2015, not 5 million as previously projected.
In India, automotive is one of the largest industries showing impressive growth over
the years and has been significantly making increasing contribution to overall

industrial development in the country. Presently, India is the world's second largest
manufacturer of two wheelers, fifth largest manufacturer of commercial vehicles as
well as largest manufacturer of tractors. It is the fourth largest passenger car market in
Asia as well as a home to the largest motor cycle manufacturer. The installed capacity
of the automobile sector has been 9,540,000 vehicles, comprising 1,590,000 four
wheelers (including passenger cars) and 7,950,000 two and three wheelers. The sector
has shown great advances in terms of development, spread, absorption of newer
technologies and flexibility in the wake of changing business scenario.
The Indian automotive industry has made rapid strides since de-licensing and opening
up of the sector in 1991. It has witnessed the entry of several new manufacturers with
the state-of-art technology, thus replacing the monopoly of few manufacturers. At
present, there are 15 manufacturers of passenger cars and multi-utility vehicles, 9
manufacturers of commercial vehicles, 16 of two/ three wheelers and 14 of tractor,
besides 5 manufacturers of engines. The norms for foreign investment and import of
technology have also been liberalised over the years for manufacture of vehicles. At
present, 100% foreign direct investment (FDI) is permissible under the automatic
route in this sector, including passenger car segment. The import of technology for
technology up-gradation on royalty payment of 5% without any duration limit and
lump sum payment of USD 2 million is also allowed under automatic route in this
sector. The Indian automotive industry has already attained a turnover of Rs. 1,
65,000 crore (34 billion USD) and has provided direct and indirect employment to
1.31 crore people in the country.
The growths of Indian middle class, with increasing purchasing power, along with
strong macro-economic fundamentals have attracted the major auto manufacturers to
Indian market. The market linked exchange rate, well established financial market,
stable policy governance work and availability of trained manpower have also shifted
new capacities and flow of capital to the auto industry of India. All these have not
only enhanced competition in auto companies and resulted in multiple choices for
Indian consumers at competitive costs, but have also ensured a remarkable
improvement in the industry's productivity, which is one of the highest in Indian
manufacturing sector.

1.4Growth
The growth story for the Indian automobile industry in 2014 rode on the two-wheeler
segment. The segment has clocked positive growth at 12.9 percent year-on-year to
reach sales of nearly 13.5 million units by October 2014.
India's automobile sector has also picked up pace, with eight of the country's leading
manufacturers' reporting combined passenger vehicle sales of 198,427 in November
2014, a 10 per cent annual rise. The rise in sales in November 2014 was led by Maruti
Suzuki, whose sales increased 17 per cent to 100,024 units in the domestic market.
The commercial vehicles (CV) industry in India has registered an increase of 8.59 per
cent in September 2014, as fleet owners have started to buy trucks in the anticipation
of an improved economic activity.
The automobile sector in Andhra Pradesh has a potential for US$ 1 billion investment
and US$ 1.50 billion output, according to a recent analysis by Automotive
Components Manufacturers‘ Association of India (ACMA) and city-based Andhra
Chamber of Commerce and Industry Federation (ACCIF).
1.5Future Trends in the Automobile Industry
As the auto-shows began in January 2014, the industry promised a blend of
technology and automotives. With the recession trend breaking its leashes form the
past two years, 2014 is expected to get back on track with the sales of automobiles in
the country. Almost Self-governing cars are predicted to be on the streets by 2020.
More than half the cars on the streets are going to be powered by diesel by 2020.
Industry watcher Gartner indicates that 30 percent of motorists want parking info. The
facility is likely to come up after glitches in the infrastructure catch up. High
Performance Hybrid cars are likely to gain greater popularity among consumers. The
Indian automobile industry has a prominent future in India. Apart from meeting the
advancing domestic demands, it is penetrating the international market too. Favoured
with various benefits such as globally competitive auto-ancillary industry; production
of steel at lowest cost; inexpensive and high skill manpower; entrenched testing and R

& D centres etc., the industry provide immense investment and employment
opportunities.
1.6Government Initiatives
The Government of India encourages foreign investment in the automobile sector and
allows 100 per cent FDI under the automatic route. To boost manufacturing, the
government had lowered excise duty on small cars, motorcycles, scooters and
commercial vehicles to eight per cent from 12 per cent, on sports utility vehicles to 24
per cent from 30 per cent, on mid-segment cars to 20 per cent from 24 per cent and on
large-segment cars to 24 per cent from 27 per cent.
India is probably the most competitive country in the world for the automotive
industry. It does not cover 100 per cent of technology or components required to
make a car but it is giving a good 97 per cent, highlighted Mr Vicent Cobee,
Corporate Vice-President, Nissan Motor‘s Datsun.
The vision of AMP 2006-2016 sees India, ―to emerge as the destination of choice in
the world for design and manufacture of automobiles and auto components with
output reaching a level of US$ 145 billion; accounting for more than 10 per cent of
the GDP and providing additional employment to 25 million people by 2016.‖

CHAPTER 2
THEORETICAL BACKGROUND
2.1Introduction
Consumer Behaviour is the study of individuals, groups, or organizations and the
processes they use to select, secure, use, and dispose of products, services,
experiences, or ideas to satisfy needs and the impacts that these processes have on the
consumer and society. Consumer behaviour is how individual customers, groups or
organizations select, buy, use, and dispose ideas, goods, and services to satisfy their
needs and wants. It refers to the actions of the consumers in the marketplace and the
underlying motives for those actions.
Marketers expect that by understanding what causes the consumers to buy particular
goods and services, they will be able to determine—which products are needed in the
marketplace, which are obsolete, and how best to present the goods to the consumers.
The study of consumer behaviour assumes that the consumers are actors in the
marketplace. The perspective of role theory assumes that consumers play various
roles in the marketplace. Starting from the information provider, from the user to the
payer and to the disposer, consumers play these roles in the decision process.
The roles also vary in different consumption situations; for example, a mother plays
the role of an influencer in a child‘s purchase process, whereas she plays the role of a
disposer for the products consumed by the family.
The study of consumers helps firms and organizations improve their marketing
strategies by understanding issues such as how
 The psychology of how consumers think, feel, reason, and select between
different alternatives (e.g., brands, products, and retailers);
 The psychology of how the consumer is influenced by his or her environment
(e.g., culture, family, signs, media);

 The behaviour of consumers while shopping or making other marketing
decisions;
 Limitations in consumer knowledge or information processing abilities
influence decisions and marketing outcome;
 How consumer motivation and decision strategies differ between products that
differ in their level of importance or interest that they entail for the consumer;
and
 How marketers can adapt and improve their marketing campaigns and
marketing strategies to more effectively reach the consumer.
2.2Definition
Consumer behaviour is "The study of individuals, groups, or organizations and the
processes they use to select, secure, use, and dispose of products, services,
experiences, or ideas to satisfy needs and the impacts that these processes have on the
consumer and society."
According to Engel, Blackwell, and Mansard, ‗consumer behaviour is the actions
and decision processes of people who purchase goods and services for personal
consumption‘.
According to Louden and Bitta, ‗consumer behaviour is the decision process and
physical activity, which individuals engage in when evaluating, acquiring, using or
disposing of goods and services‘.
Two different kinds of consuming entities: the personal consumer and the
organizational consumer.
 Personal Consumer:- Buys goods and services for his or her own use, for the
use of the household or as a gift for a friend. The products are bought for final
use by individuals, who are referred to as end users or ultimate consumers.
 Organizational Consumer: - Includes profit and non-profit businesses,
government agencies (local, state, national) and institutional (e.g. schools,
hospitals, and prisons), all of which buy products, equipment, and services in
order to run their organizations.

Behaviour occurs either for the individual, or in the context of a group (e.g.,
friend‘s influence what kinds of clothes a person wears) or an organization
(people on the job make decisions as to which products the firm should use).
Consumer behaviour involves the use and disposal of products as well as the
study of how they are purchased. Product use is often of great interest to the
marketer, because this may influence how a product is best positioned or how
we can encourage increased consumption. Since many environmental
problems result from product disposal (e.g., motor oil being sent into sewage
systems to save the recycling fee, or garbage piling up at landfills) this is also
an area of interest. Consumer behaviour involves services and ideas as well as
tangible products. The impact of consumer behaviour on society is also of
relevance. For example, aggressive marketing of high fat foods, or aggressive
marketing of easy credit, may have serious repercussions for the national
health and economy.
2.3Applications of consumer behaviour:
 The most obvious is for marketing strategy—i.e., for making better marketing
campaigns. For example, by understanding that consumers are more receptive
to food advertising when they are hungry, we learn to schedule snack
advertisements late in the afternoon. By understanding that new products are
usually initially adopted by a few consumers and only spread later, and then
only gradually, to the rest of the population, we learn that (1) companies that
introduce new products must be well financed so that they can stay afloat until
their products become a commercial success and (2) it is important to please
initial customers, since they will in turn influence many subsequent
customers‘ brand choices.
 Social marketing involves getting ideas across to consumers rather than selling
something. As a final benefit, studying consumer behaviour should make us
better consumers. Common sense suggests, for example, that if you buy a 64
liquid ounce bottle of laundry detergent, you should pay less per ounce than if
you bought two 32 ounce bottles. In practice, however, you often pay a size
premium by buying the larger quantity. In other words, in this case, knowing

this fact will sensitize you to the need to check the unit cost labels to
determine if you are really getting a bargain.
2.4Factors that influence the consumer behaviour are as
follows:
a. Marketing factors such as product design, price, promotion, packaging,
positioning and distribution.
b. Personal factors such as age, gender, education and income level.
c. Psychological factors such as buying motives, perception of the product and
attitudes towards the product.
d. Situational factors such as physical surroundings at the time of purchase,
social surroundings and time factor.
e. Social factors such as social status, reference groups and family.
f. Cultural factors, such as religion, social class—caste and sub-castes.
1. Undergoes a constant change:
Consumer behaviour is not static. It undergoes a change over a period of time
depending on the nature of products. For example, kids prefer colourful and
fancy footwear, but as they grow up as teenagers and young adults, they prefer
trendy footwear, and as middle-aged and senior citizens they prefer more
sober footwear. The change in buying behaviour may take place due to several
other factors such as increase in income level, education level and marketing
factors.
2. Varies from consumer to consumer:
All consumers do not behave in the same manner. Different consumers behave
differently. The differences in consumer behaviour are due to individual
factors such as the nature of the consumers, lifestyle and culture. For example,
some consumers are technoholics. They go on a shopping and spend beyond
their means.
They borrow money from friends, relatives, banks, and at times even adopt
unethical means to spend on shopping of advance technologies. But there are

other consumers who, despite having surplus money, do not go even for the
regular purchases and avoid use and purchase of advance technologies.
3. Varies from region to region and country to county:
The consumer behaviour varies across states, regions and countries. For
example, the behaviour of the urban consumers is different from that of the
rural consumers. A good number of rural consumers are conservative in their
buying behaviours. The rich rural consumers may think twice to spend on
luxuries despite having sufficient funds, whereas the urban consumers may
even take bank loans to buy luxury items such as cars and household
appliances. The consumer behaviour may also vary across the states, regions
and countries. It may differ depending on the upbringing, lifestyles and level
of development.
4. Information on consumer behaviour is important to the marketers:
Marketers need to have a good knowledge of the consumer behaviour. They
need to study the various factors that influence the consumer behaviour of
their target customers.
The knowledge of consumer behaviour enables them to take appropriate
marketing decisions in respect of the following factors:
 a. Product design/model
 b. Pricing of the product
 c. Promotion of the product
 d. Packaging
 e. Positioning
 f. Place of distribution
5. Leads to purchase decision:
Positive consumer behaviour leads to a purchase decision. A consumer may
take the decision of buying a product on the basis of different buying motives.
The purchase decision leads to higher demand, and the sales of the marketers

increase. Therefore, marketers need to influence consumer behaviour to
increase their purchases.
6. Varies from product to product:
Consumer behaviour is different for different products. There are some
consumers who may buy more quantity of certain items and very low or no
quantity of other items. For example, teenagers may spend heavily on products
such as cell phones and branded wears for snob appeal, but may not spend on
general and academic reading. A middle- aged person may spend less on
clothing, but may invest money in savings, insurance schemes, pension
schemes, and so on.
7. Improves standard of living:
The buying behaviour of the consumers may lead to higher standard of living.
The more a person buys the goods and services, the higher is the standard of
living. But if a person spends less on goods and services, despite having a
good income, they deprive themselves of higher standard of living.
8. Reflects status:
The consumer behaviour is not only influenced by the status of a consumer,
but it also reflects it. The consumers who own luxury cars, watches and other
items are considered belonging to a higher status. The luxury items also give a
sense of pride to the owners.
2.5The factors that affect consumer behaviour
A. Marketing Mix Factors:
Each component of the market mix—product, pricing, promotion and place of
distribution—has a direct or indirect impact on the buying process of the consumers.
1. Product:
The special characteristics of the product, the physical appearance and the
packaging can influence the buying decision of a consumer.

2. Pricing:
The price charged on the product or services consumed by the consumer affect
the buying behaviour of the consumers. Marketers must consider the price
sensitivity of the target customers while fixing prices.
3. Promotion:
The variables of promotion mix such as advertising, publicity, public relations,
personal selling and sales promotion affect the buying behaviour of the
consumers. Marketers select the promotion mix after considering the nature of
the target audience.
4. Place:
The channels of distribution and the place of distribution affect the buying
behaviour of the consumers. The marketers make an attempt to select the right
channel and distribute the products at the right place.
B. Personal Factors:
The personal factors such as age, occupation, lifestyle, social and economic
status and the gender of a consumer may affect the buying decisions of the
consumers individually or collectively.
1. Age factor:
The age factor greatly influences the buying behaviour. For example,
teenagers prefer trendy clothes, whereas office executives prefer sober and
formal clothing.
2. Gender:
The consumer behaviour varies across gender. For example, girls prefer
certain feminine colours such as pink, purple and peach, whereas boys go for
blue, black and brown.

3. Education:
Highly educated persons may spend on books, personal care products, and so
on. But a person with low or no education may spend less on books and more
on personal grooming products.
4. Income level:
Normally, the higher the income level, the higher is the level of spending and
vice versa. But this may not be the case in developing countries, especially in
the rural areas.
5. Status in the society:
Persons enjoying higher status in the society spend a good amount of money
on luxury items such as luxury cars, luxury watches, and premium brands of
clothing, jewellery and perfumes.
C. Psychological Factors:
1. Learning:
It refers to changes in individual behaviour that are caused by information and
experience. For example, when a customer buys a new brand of apparels, and
is satisfied by its use, then they are more likely to buy the same brand the next
time. Through learning, people acquire beliefs and attitudes, which in turn
influence the buying behaviour.
2. Attitude:
It is human tendency to respond in a given manner to a particular situation or
object or idea. Consumers may develop a positive, or a negative, or a neutral
attitude towards certain products or brands, which in turn affects their buying
behaviour.

3. Motives:
A motive is the inner drive that motivates a person to act or behave in a certain
manner. A marketer must identify the buying motives of the target customers
and influence them to act positively towards the marketed products.
Some of the buying motives include the following factors:
a. Pride and possession
b. Love and affection
c. Comfort and convenience
4. Beliefs:
A belief is a descriptive thought that a person holds about certain things. It
may be based on knowledge, opinion, faith, trust and confidence. People may
hold certain beliefs of certain brands/products. Beliefs develop brand images,
which in turn can affect the buying behaviour.
D. Social Factors:
The social factors such as reference group‘s family and social status affect the
buying behaviour. Social factors in turn reflect a constant and dynamic influx
through which individuals learn different meanings of consumption.
1. Reference groups:
A reference group is a small group of people such as colleagues at workplace,
club members, friends circle, neighbours, family members, and so on.
The reference groups influence the members in following manner:
a. They influence members‘ values and attitudes.
b. They expose members to new behaviours and lifestyles.

c. They create pressure to choose certain products or brands.
2. Family:
The family is the main reference group that may influence the consumer
behaviour. Nowadays, children are well informed about goods and services
through media or friends circle, and other sources. Therefore, they influence
considerably in the decisions of buying both fast moving consumer goods and
durable items.
3. Roles and status:
A person performs certain roles in a particular group such as family, club,
organization, and so on. For example, a person may perform the role of a vice
president in a firm and another person may perform the role of a marketing
manager.
The vice president may enjoy higher status in the organization as compared to
the marketing manager. People may purchase the products that conform to
their roles and status, especially in the case of branded clothes, luxury
watches, luxury cars, and so on.
E. Cultural Factors:
There is a subtle influence of cultural factors on a consumer‘s decision
process. Consumers live in a complex social and cultural environment. The
types of products and services they buy can be influenced by the overall
cultural context in which they grow up to become individuals. Cultural factors
include race and religion, tradition, caste and moral values. Culture also
includes subcultures, sub-castes, religious sects and languages.
1. Culture:
It influences consumer behaviour to a great extent. Cultural values and
elements are passed from one generation to another through family,
educational institutions, religious bodies and social environment. The cultural

diversity influences food habits, clothing, customs and traditions. For
example, consuming alcohol and meat in certain religious communities is not
restricted, but in certain communities, consumption of alcohol and meat is
prohibited.
2. Subculture:
Each culture consists of smaller subcultures that provide specific identity to its
members. Subcultures include sub-castes, religious sects (Roman Catholics,
Syrian Catholics, Protestant Christians, etc.), geographic regions (South
Indians, North Indians) and language (Marathi, Malayalam, and Gujarati).
The behaviour of people belonging to various subcultures is different.
Therefore, marketers may adopt multicultural marketing approaches, that is,
designing and marketing goods and services that cater to the tastes and
preferences of the consumers belonging to different subcultures.
2.6The major variations are in market structure and demand, buyer
characteristics, and decisions processes and buying patterns:
(I) Market Structure and Demand:
The organizational marketer should recognise that several factors related to
market structure and demand distinguishes these buyers.
i. Geographical Concentration:
Buyers are more concentrated than in the consumer market. For example,
textiles are clustered pre-dominantly in the Western India.
ii. Fewer and Larger Buyer:
Buyers are also concentrated by size in the organizational market.
iii. Vertical or Horizontal Markets:

In a vertical market the product or service would be sold to virtually all
organizations in perhaps in one or two. Cotton knitting materials are used in
hosiery industries only. Horizontal markets are those which are broad, in
which the product or service is sold to a wide spectrum of industries.
i. Derived Demand:
Organizational demand is derived from consumer demand.
ii. Inelastic Demand:
Total industry demand for industrial goods is relatively unaffected by changes
in price in the consumer markets.
iii. Fluctuating Demand:
Organisational demand is characterised by much greater fluctuation than that
of consumer markets. Generally, organizational buying is closely related to the
economic cycle.
(ii) Buyer Characteristics:
There are several important organizational buyers characteristics typically
cited that differentiate them from final consumers.
i. Group Involvement:
As products purchased by organizational buyers are often costly and complex,
a group of individuals may be involved in the decision.
ii. Technical Knowledge:
Professional buyers, generally quite knowledgeable about the products or
services being bought, make the purchase decision.
iii. Rational Motivation:

Organizational buyers are often slowly directed by rational motivations. Such
factors are generally, economically based and can be translated into money, so
that costs and benefits may be carefully weighed.
(iii) Decision Process and Buying Pattern:
Organizational buying patterns are characterised by a number of differences
from final consumers in their decision process and purchase patterns.
1. Formality:
Often proposals, quotation requests and purchase contracts are involved which
lead to the formalities.
2. Complexity:
This is a prime cause if the formality necessary in purchasing. Products and
services are more technically complex for organizational buyers.
3. Lengthy Negotiations:
Organizations buying requires longer period than an individual consumer.
4. Large Orders:
Organizational purchases are large in size.
5. Direct Buying:
Marketing takes place from direct manufacturer to organizational buyers.
6. Importance of Service:
More than the final consumers, organizational buyers requires service because
it has a direct bearing on their costs, sales and profits.

2.7DEVELOPMENT OF THE MARKETING CONCEPT AND THE
DISCIPLINE OF CONSUMER BEHAVIOUR:
The field of consumer behaviour is rooted in the marketing concept, a
business orientation that evolved in the 1950s through several alternative
approaches toward doing business referred to respectively: -
1) The Production Concept.
2) The Product Concept.
3) The Selling Concept.
4) The Marketing Concept.
5) The Societal Marketing Concept.
1) THE PRODUCTION CONCEPT:
The production concept assumes that consumers are mostly interested in
product availability at low prices; its implicit marketing objectives are cheap,
efficient product and intensive distribution.
It makes sense when consumer are more interested in buying what‘s available
rather than wait for what they really want.
The main objective is to expand the market.
2) THE PRODUCT CONCEPT:
The product concept assumes that consumers will buy the product that offers
them the highest quality, the best performance, and the most features.
It ensures the company to improve the quality of its product and add new
features.
The product concept often leads to ―marketing myopia‖ that is focusing on
the product rather than the customer needs.
3) THE SELLING CONCEPT:
The assumption of the selling concept is that consumers are unlikely to buy
the product unless they are aggressively persuaded to do so – mostly through
―hard sell‖ approach.
The problem in this concept is that it fails to satisfy a customer.

Promotion can be done through advertisement, sales promotion and public
relation.
Today the selling concept is utilize be marketers of unsought products – that
is which people are not willing to buy it (such as life insurance).
4) THE MARKETING CONCEPT:
It started in 1950‘s when some marketers realized we can sell more products
by determining what consumer would buy.
Consumer need and wants became the firm‘s primary focus.
The marketers should made product what t can sell, instead of what it has
made.
5) THE SOCIETAL MARKETING CONCEPT:
Developing that product which benefits the society. Doing marketing in such
a way that it helps you in increasing your production & also giving benefits to
society.
The organization should determine the needs, wants and interest of target
markets and deliver the desired satisfaction more effectively and efficiently
then do competitors in a way that maintains or improves the customers and
society‘s well being.
2.8IMPLEMENTING THE MARKETING CONCEPT:
To identify unsatisfied consumer need, companies had to engage in extensive
marketing research. The marketing concept underscored the importance of
consumer research.
The strategic tools that are used to implement the marketing concept include
segmentation, targeting, positioning and the marketing mix.
2.9THE ROLE OF CONSUMER RESEARCH:
Consumer research describes the process and tools used to study consumer
behaviour.
Two theoretical perspectives that guide the development of consumer
research: -
Positive Approach:- It tend to be objective and empirical, to seek caused for
behaviour, and to conduct research studies that can be generalized to larger
population.

2.10SEGMENTATION, TARGETING, AND POSITIONING:
MARKET SEGMENTATION:
Dividing a market into distinct groups of buyers with different needs,
characteristics or behaviour who might require separate products or marketing
mixes. Market consists of buyers and, buyers differ in one or more ways.
They may differ in their wants, resources, locations, buying attitudes, and
buying practices.
MARKET POSITIONING:
Formulating competitive positioning for a product and a detailed marketing
mix. Developing a distinct image for the product or service in the mind of the
consumer, that will differentiate with the competitors.
MARKET TARGETING:
The process of evaluating each market segments attractiveness and selecting
one or more segments to enter.
MARKETING MIX:
The marketing mix consists of a company‘s service and/or product offerings
to consumers and the methods and tools it selects to accomplish the exchange.
The marketing mix consists of four elements:
1) The product or service that is the features, designs, brands, and packaging
offered, along with post purchase benefits such as warranties and return
policies.
2) The price – the list price, including discounts, allowances, and payment
methods.
3) The place – the distribution of the product or service through specific store
and non store outlets.
4) Promotion – The advertising, sales promotion, public relations, ad sales
efforts designed to build awareness of and demand for the product or service.

2.11CONSUMER BEHAVIOUR & DECISION MAKING ARE
INTERDISCIPLINARY:
Consumer Behaviour was a new field in the mid of late 1960, because the
marketing theorists borrowed the concepts from other scientific disciplinary
that is :-
Psychology The study of the individual, Sociology The study of groups,
Social Psychology The study of how an individual operates in groups,
Anthropology the influence of society on the individual, and Economics to
form the basis of the new marketing discipline.
A SIMPLIFIED MODEL OF CONSUMER DECISION MAKING:
The process of consumer decision making can be viewed as three distinct but
interlocking stages: the input stage, the process stage, and the output stage.
 The Input Stage Influences the consumer‘s recognition of a product
need and consists of two major sources of information, the firm‘s
marketing efforts (the product itself, its price, its promotion and where
it is sold) and the external sociological influences on the consumers.
 The Process Stage It is the model focuses on how consumers make
decisions. The psychological factors inherent in each individual.
 The Output Stage It is the consumer decision making model consists
of two closely related post decision activities.

Table 2.1Buying decision process steps involves:-
.
2.12Economy Class car:
An economy car is an automobile that is designed for low cost purchase and
operation. Typical economy cars are small, lightweight, and inexpensive to buy.
Economy car designers are forced by stringent design constraints to be inventive.
Many innovations in automobile design were originally developed for economy cars.
an economy car has varied with time and place, based on the conditions prevailing at
the time, such as fuel prices, disposable income of buyers, and cultural mores. In any
given decade, there has generally been some rough global consensus on what
constituted the minimum necessary requirements for a highway-worthy car,
constituting the most economical car possible. today economy cars have specialised
into market niches. The small city car, the inexpensive-to-run but not necessarily very
small general economy car, and the performance derivatives that capitalise on light
weight of the cars on which they are based. Some models that started as economy cars
such as maruti, tata, M&M etc.
Problem recognition
Information search
Evaluation
Decision
Buy
Dissatisfaction= brand
Rejection
Satisfaction= brand Acceptance

Various passenger car companies in India are:-
 Maruti Suzuki
 Mahindra & Mahindra
 TATA Motors
 Honda cars India
 Ashok Leyland ltd
 Toyota
 Volva
 Ford
 Hyundai motor India ltd
 Nissan
 Datsun
 Fiat India
 Skoda India ltd
 Volkswagen
 Renault
Table 2.2Passenger car are differentiated based upon:
Fuel type
 Patrol
 Diesel
 Electric
 CNG
Body type
 Hatchback
 Sedan
 SUV/MUV
 Mini van
Seating capacity
 Up to 5
 6-8
 9 and above
Transmission
Automatic or manual
Engine type
 Up to 75bhp
 76-100bhp
 101-150bhp
 151-200bhp
 201bhp and more

2.13Market share of various passenger cars in India as on 2014
Fig 2.1

CHAPTER THREE
DESIGN OF THE DISSERTATION
3.1Review of Literature
According to Mitchell and Walsh (2004):
Mitchell and Walsh pointed out that males and females want different products and
they are likely to have different ways of liking and obtaining these. Gender has an
important role in consumer behaviours. Because, the differences between men and
women about expectation, want, need, life-style etc. reflect to their consumption
behaviours.
According to ―Girrrl power and boyyy (2000):
Girrrl power and boyyy suggested that past, present, and future of consumer gender
identity‖ by (Kacen, 2000), consumption has always been gendered. Most of the
products made these days have a specific gender type, some have masculine features
and some have feminine features to them. Products‘ gender are created and sustained
by marketers for example; princess phones, Barbie dolls. Research suggests that
shopping is a more exciting activity for women with respect to men. Female
consumers feel more independent when they do shopping in accordance with men.
Another point that men and women present differentiation is women consider
shopping is a social need whereas male consumers pay importance to main function
of a product instead of secondary function.
Gender has an important role in consumer behaviour. Because, the differences
between men and women about expectation, want, need, life-style etc. reflect to their
consumption behaviour.
According to Cutler, Armstrong (2000):
Cutler suggested that Outward-oriented companies, are companies that seeking to
ensure customer satisfaction. The real mission of their marketing departments is
understand the needs and demands of clients and provides proper solutions to the
needs and desires of products. Outward-oriented companies are not companies that

are just looking to sell, but looking for long-term customer satisfaction by providing
top quality products with long-term goals and their own continued survival.
According to Christopher (1989):
Consumer Behaviour s studied by Christopher the shopping habits of consumers to
form an idea of whether or not the store concepts, product ranges and strategies of the
companies are appropriate towards consumer requirements. He believed that
consumer behaviours are unpredictable and changing continuously changing; while
trying to under try to understand how individual or group make their decision to spend
their available resources on consumption-related items. These are factors that
influence the consumer before, during, and after a purchase (Schiffiman and Kanuk,
1997), for example, feedback, from other customers, packing, advertising, product
appearance, and price (Peter &Olsonetc, 2005).
According to Foxall (2007):
Consumer purchasing behaviour tends to determine what it exactly is that drives
consumers when making buying decisions. Many studies have been performed
including the above mentioned with regard to consumer behaviourisms. Three
theories those understand the consumers‘ buying decision are; radical, teleological,
and Pico economics behaviourisms (Foxall, 2007). Even though, all three theories
take their own the consumers‘ choice, ―they still plays complementary role with
consumer behaviour‖
According to Rachlin (1994):
Rachlin (1994) points out that in order to understand the full complexity of
behaviour‘s consequences, a significant elapse of time may be required, as the events
that explain behavior are temporarily extended, it will take time for the whole
sequence to be completed and with that understand behavior. When it comes to
consumer buying behavior, teleological behaviourisms helps understanding
consumer‘s brand choice (Foxall, 2007). Teleological behaviourisms helps to
understand why consumers only consider only a few brands out of all the brands they
can choose from when making a buying decision (Foxall, 2007).
According to Solomon (1991):

Solomon (1991) stated that a consumer decision is a response to a problem. Schiffman
and Kanuk (1978) depicted that decision is the selection of an action from two or
more alternative choices. It means that there must be more that one alternative choice
whenever a customer is making a decision. Kotler (1996) pointed out that the
consumer buying process is the sum total of alternative, purchase decision, and
purchase evaluation.
According to Bennett (1997):
Bennet pointed out that on a certain order, food, clothing, housing, education,
services, and ideas, use or consumption. Decisions that make for consumption
demand for raw materials, transportation, technical services and the allocation of
resources causes‘ success and failure of other industries. Thus, consumer behaviour is
an important factor in recession or boom of commercial activity. Important factor in
successful marketing and promotional strategies, understands of consumer behaviour.
It is important for non-profit and for-profit organizations
According to Gold Smith (1999):
Gold Smith suggested that many marketing managers, put base of relationships with
customers based on a procedure that is called "individualism", "customer-oriented
mass" or "customize‖. Core of this style, adapted to the needs and demands of
individual goods and services for customers, not just one type of goods and services
provided to all customers. Thus, we can also assume customize the marketing mix as
a factor price, promotion, place, personnel, physical assets, and procedures
(processes). In this way, a new marketing mix formed
According to Wilkie (1999):
Wilkie suggested that peripheral vision is assumed that strong forces are directed
toward consumers who no strong feelings or beliefs of the pre-made plans to buy a
product. At this point, the consumer through the process of rational decision-making
or based on emotion, do not buy the product Instead, his buy directly cause by affect
of behaviour caused by environmental forces such as sales promotion tools, cultural

norms, physical environment and economic pressures. At the end, it is necessary to
note that most purchases are made with elements from each of the three perspectives
According to Bennett (1997):
Bennett suggested that a buyer in the purchase of goods and services doesn‘t have
detailed information of the other marketing mix elements. Buyer Orientation refers to
the process in which potential customers think, evaluate, discuss and finally decide on
a suitable source of supply for purchase product. The process of finding the source of
the customer calls "customer orientation". Buyer Orientation generally contains fifth
dimension that are the value, performance, value and benefits of diversity. At
following sections details of each of these dimensions is discussed. Apart from the
obvious attributes such as quality, fitness for purpose, reliability, etc., price,
Performance and reputation of the supplier to the buyer are important. In addition, the
buyers looking for capacity of technical and symbolic features like being unique, and
non- replacement and state of brand .but, there are other considerations. Value, Does
not depend on money and other issues are important to buyers. Such as physical
effort, distance and time needed to find a good source of product supply. Also,
problems such as through a sole source of supply of the product and are also effective.
According Kotler and Keller (2011):
Kotler and Keller highlighted the importance of understanding consumer buying
behaviour and the ways how the customers choose their products and services can be
extremely important for manufacturers as well as service providers as this provides
them with competitive advantage over its competitors in several aspects. For example,
they may use the knowledge obtained through studying the consumer buying
behaviour to set their strategies towards offering the right products and services to the
right audience of customers reflecting their needs and wants effectively.
According to Egen (2007):
Egen suggested that on the importance of understanding the consumer behaviour.
According to the author, better awareness of consumer buying behaviour is a positive
contribution to the country‘s economic state. The author further argues that the quality
of goods and products are exceptionally good in countries where buying behaviour of

consumers is well understood. This in turn increased the competitiveness of the
products and services in international market increasing the export potential of the
country. In addition to efforts of better understanding the consumers‘ buying
behaviour, companies also engage in advertising and promotion activities to influence
the consumers‘ purchasing decision. However, when they are engaging in such types
of activities, they need to consider other external factors such as the overall economic
conditions of the country, politics, technology and ethnic culture all of which are
beyond the control of both the company and consumer.
According to Hansen and Christensen (2003):
Hansen highlighted that Brand names present many things about a product and give
number of information about it to the customers and also tell the customer or potential
buyer what the product means to them. Further more it represents the customers‘
convenient summary like their feelings, knowledge and experiences with the brand.
More over customer do not spend much time to do find out about the product. When
customer considers about the purchase they evaluate the product immediately by
reconstructed product from memory and cued by the brand name.
According to Aaker( 1996):
Aaker highlighted A brand has a value; this depends on the quality of its products in
the market and the satisfaction or content of the customer in its products and services.
This provides the trust of the customers in the brand. If customers trust a brand quality
it makes a positive connection to the brand and customers will have a reason to
become a loyal to the brand. Loyalty and trust of the customers is very important for a
company because it reduces the chance of attack from competitors.
According to Keller(2008):
Keller suggested that Brands play a very important role in the consumer decision
making processes. It is really important for companies to find out customer‘s decision
making process and identify the conditions, which customers apply while making
decision (Cravens and piercy, 2003). Marketers are highly concerned to know how
brand names influence the customer purchase decision. Why customers purchase a
particular brand also implies how customers decide what to buy. Customers follow

the sequence of steps in decision process to purchase a specific product. They start
realizing a requirement of product, get information, identify & evaluate alternative
products and finally decide to purchase a product from a specific brand. When
customers purchase particular brand frequently, he or she uses his or her past
experience about that brand product regarding performance, quality and aesthetic
appeal.
According to Solomon (2006):
Solomon pointed out that The consumer decision making process defines different
steps when a consumer goes through to purchase a product. If customer wants to
make a purchase he or she takes a sequence of steps in order to do complete this
purchase. Problem recognition includes when consumer feel a significant difference
between the current state and ideal so consumer thinks there is some problem to be
solved. The problem may be small or big. In the second step, the consumer seeks
information about the product. The extent of information search relies on the level of
consumer involvement. In case of expensive products, the level of involvement is
high. Conversely, in case of relatively cheap products the level of involvement is
usually low. In the third step, the consumer evaluates the different attributes of the
brands. Consumer may consider the product attributes and compare brand products. In
the final step consumer makes his choice about a product. It‘s true that a consumer
may not necessarily go through all the decision making steps for every purchase he or
she makes. At times, consumer makes his or her decision automatically and the
decision may be based on heuristics or mental shortcuts. Other times, in case of high
involvement products consumer may take a long time before reaching a final purchase
decision. It depends on consumers‘ importance of the products like purchase of a car
or home. More over consumers try to make an estimated brand universe on the basis
of available information about the brands, and to make an estimated the utility
function on the basis of past consumption experience.
3.2Statement of the Problem:
Consumer decision making is an important aspect in marketing it makes the company
to understand the exact needs, wants, behaviours towards a particular products or
services. Consumers not only educate the vendors, manufacturers what kind of

products they are interested in what to produce, when to produce also guide them to
manufacture improved and quality products hence the need for the study is felt.
3.3Objectives of the Study:
 To Study various factors influencing customer purchase decision
 To Study various aspects of customers purchase decision
 To analyse impact of brand name on customer purchase decision
 To identify various sources of information used by consumer
3.4 Scope of the study
In today‘s world there is scarce city of resources. Customer‘s preferences changes day
by day their decision making is affected by various factors also income level has
increased and their need for quality products increased. As economy‘s literacy rate
has increased and today‘s technology era people are more information search
perspectives has made the automobile industries and other industries to design,
manufacture and innovate new features in their products. The study concentrates on
consumer decision in buying an economy class car in bengaluru and the respondent
studied will be around the urban bengaluru
3.5Operational Definition of the Concept
According to Walter and Paul, ―consumer behaviour is the process whereby
individuals decide whether, what, when, where, how and from whom to purchase
goods and services‖.
Consumer behaviour is influenced by various factors but in the final it is with the
person to decide what, when, where, how to purchase goods and services. It is the
psychological factors that tell on consumer while making purchase decision. Based
upon his situation, income available and other factors that make him to do the
purchase.

3.6Methodology
The research method of the study explains the systematic way of finding to the
predetermined objectives. Moreover it will provide a clean path to accomplish and
achieve clear solution for the problem stated. The following are the stages through
which the research will be passed to obtain the conclusions.
 Define the research problem
 Review the literature
 Design research
 Collection of data
 Analysis of data
 Report
A study is conducted to know the customers purchase decision about low budget car.
To know the behavior and attitude data is collected through structured questionnaire.
Where questions are in pre-arranged order. The questionnaire is designed for
customers who approach for buying a new car in various automobile dealers also
other customers who want to buy a new car.
3.7Data Collection
 Primary data: The first hand data was collected from the respondents by
administrating a structured questionnaire.
 Secondary data : The data is collected through
o Books
o Journals
o Academic reports
o Internet
3.8Sampling:
 Sampling technique: The sampling technique used in the research is the
random sampling.
 Sample size: 100 respondents.
 Sample frame: Structured questionnaire

 Method of Data Collection: Survey Method
3.9Plan of Analysis
The data collected is analysed and shown in the form of
 Tables
 Charts
 Graphs
On the basis of information collected by questionnaire the charts and the tables will be
prepared. The tabulated data will be analysed with the help of percentages. The result
thus obtained will be depicted through charts and graphs. Inferences will be drawn
and suitable suggestions will be provided.
3.10Limitations of the Study
The limitations of the study are discussed as follows:
 The respondents for the study are limited to 100 which are not enough to
determine the consumer behavior and their purchase decisions.
 There is a possibility of biasness with regard to the opinion given by the
respondents of the study.
 The results of the study are limited only in Bengaluru
 A strong unwillingness on the part of the owners of various cars, to participate
and aid the research.

Chapter 4
Analysis and interpretations
Table 4.1: Depicting the Various cars owned by the
respondents
Parameters Number of
Respondents
Percentage
Maruti 53 53%
Toyota 10 10%
Honda 4 4%
Others 33 33%
Total 100 100%
Analysis:
 Table shows that 53%of the Respondents own Maruti cars
 33% of the Respondents have other cars like TATA, Mahindra, and Hyundai
etc
 10% of the respondents own Toyota
 4%of the respondents own Honda

Fig 4.1: pie chart showing the various cars owned
Interpretation:
As per analysis maruti cars are maximum owned by the respondents as it got huge
brand image as they are providing the various range of cars below 5lakhs and
followed by other car. As maruti cars have constantly upgraded their products in
design and quality under low budget car hence many prefer maruti.
53%
10%
4%
33%
Maruti Toyota Honda Others

Table 4.2: Depicting the Number of Respondents owning the car
Parameters Numbers of
Respondents
Percentage
Yes 96 96%
No 4 4%
Total 100 100%
Analysis:
The table shows that 94% of the respondents own the car and 4% of the respondents
do not own the car
Fig 4.2: Pie Chart depicting the number of respondents owning the
car
96%
4%
Yes
No

Interpretation:
The above pie chart clearly shows that majority of the respondents own the car and
limited number of respondents who doesn‘t own the car
Table 4.3: Depicting the Value or (price) of the various respondents
cars
Parameters (Rs.) Number of
Respondents
Percentage
2L- 3L 20 20%
3L-4L 40 40%
4L-5L 32 32%
5L or more 8 8%
Total 100 100%
Analysis:
 Table shows that 40% of the respondent‘s cars Price lie between 3L-4L
 32% of the Respondents cars price lies between 4L-5L
 20%of the Respondents cars price lies between 2L-3L
 8% of the respondents cars price lies between 5L or more

Fig 4.3: pie diagram showing the price of the various respondents car
Interpretation:
As per analysis most of the respondents cars are in range 3lakhs to 4lakhs this shows
that people are not only considering low price as main priorities but also comfort and
luxury, other features like A/c, GPS, music system etc as well.
20%
40%
32%
8%
2L- 3L
3L-4L
4L-5L
5L or more

Table 4.4: Depicting the Various fuel types respondents cars
using
Respondents
Percentage
Patrol 82 82%
Diesel 18 18%
CNG 0 0%
Others 0 0%
Total 100 100%
Analysis:
 Table shows that 82% of the respondent‘s cars using patrol as fuel type
 18% of the respondent‘s cars using diesel
 0% of the respondents using CNG or other fuel types

Fig 4.4: Diagram showing the fuel types respondents cars using
Interpretation:
As most brand cars are let out into market either patrol or diesel most of the
respondents are using patrol because of their efficiency also coat of the diesel
car is somewhat high compared to patrol cars. Other type of cars like CNG,
battery cars etc have not got much of attentions of people to use because of its
lack of popularity or efficiency.
82%
18%
0%0%
Patrol
Diesel
CNG
Others

Table 4.5: Depicting the Various Factors influenced the Respondents
at the time of buying a car
Respondents
Percentage
Price 55 55%
Brand Name 16 16%
Mileage 12 12%
Safety 12 12%
Others 5 5%
Total 100 100%
Analysis:
 The table shows that 55% of the respondents are influenced by price in
buying a car
 12% of the respondents influenced by the brand name
 16% of the respondents are influenced by mileage
 12%of the respondents are influenced by the brand name
 5% of the respondents are influenced by other factors

Fig 4.5: pie chart showing the influencing factors at the time of
purchase of car
Interpretation:
The most important features of economy cars are its price. This price strategy is more
attracted by people who have limited income i.e. middle class families. For middle
income group first priority is price next is the bran image of the car later comes the
mileage and safety. Hence the car manufacture must keep in mind about the price
while targeting the middle income group as the final consumer for economy class cars
are the middle income group.
58%
17%
12%
13%
Price Brand Name Mileage Safety

Table 4.6: Depicting the Various factors that influenced the
respondents to buy the car over the other brands
Parameters Numbers of
Respondents
Percentage
Advertisement 12 12%
Social Media 15 15%
Friends and Family
Members
60 60%
Relatives 5 5%
Others 8 8%
Total 100 100%
Analysis:
 Table shows that 60% of the respondents were influenced by their family
members in buying their car over other brands
 15% of the respondents were influenced by social media
 12% of the respondents were influenced by Advertisement
 8% of respondents were influenced by other factors and 5% of respondents by
relatives

Fig 4.6: pie chart showing the various influencing group
Interpretation:
A car represents luxury, needs etc but any person before buying the car consults from
others like family, friends, etc it is these influencing group that stimulates a person to
buying the car or not. As per analysis friend, family members influence most in
buying of cars over other brands. The information may be from the past experiences
with the brand, after sales services etc these factors influence the influencing group to
share their experiences regarding various brands.
17%
68%
6%
9%
Social Media Friends and Family Members Relatives Others

Table 4.7: Depicting the Car type the Target group prefer
Respondents
Percentage
Hatch back 68 68%
Sedan 10 10%
SUV 12 12%
Others 10 10%
Total 100 100%
Analysis:
 Table shows that 68% of the target groups prefer hatch back as their car type
 12% of the group prefer SUV
 10%of the group prefer sedan and 10% of the groups prefer others

Fig 4.7: diagram showing the car type the respondents prefer
Interpretation:
As per analysis most of the consumers prefer hatch back followed by sedan and SUV
and others. This shows that people like more compact easy to drive, 4-5 person seater
and a cargo holder at the back. These types can be used for city type as there is traffic
all over city tease hatchback can over come it.
68%
10%
12%
10%
Hatch back Sedan SUV Others

Table 4.8: Depicting the Various Respondents who are Brand
conscious
Respondents
Total
Yes 83 83%
No 17 17%
Total 100 100%
Analysis:
 Table shows that 83% of the respondents are brand conscious
 17% of the respondents are not brand conscious

Fig 4.8: pie chart showing the respondents who are brand conscious
Interpretations:
Very person has taste and preferences based upon their life style and income level and
other factors. As per analysis it shows that most of the respondents owning the car are
brand conscious as well. They do choose. They consider not only low budget car but
also particular brands as per their experience.
83%
17%
Yes
No

Table 4.9: Depicting the Various perceptions of the Respondents
Respondents
Percentage
5 very high 45 45%
4 30 30%
3 12 12%
2 10 10%
1 very low 3 3%
Total 100 100%
Analysis:
Table shows that 45% the rating given by respondents about the brand of the car they
own is very high. 30% of the respondents rated 4. 12% of the respondents rated 3.
10% of the respondents have rated 2. 3% of the respondent rated 3 i.e. very low

Fig 4.9: pie chart depicting the perceptions of respondent’s
Interpretation:
As per analysis people are brand conscious as well they want to experience luxury and
comfort form their car. It is efficiency and convince that their brought to them. As
most of the respondents have rated their brands very high this shows that their
experiences with the car are good and satisfied.
45%
30%
12%
10%
3%
5 very high
4
3
2
1 very low

Table 4.10: Depicting the Various reasons that made the
Respondents to purchase their car
Respondents
Percentages
Increase in
disposable income
39 39%
Better safety at road 12 12%
Family needs 17 17%
Increase in family
size
23 23%
Suits your life style
and personality
09 09%
Total 100 100%
Analysis:
 Table shows that 39% of the respondents purchase their car because of
increase in disposable income
 23% of the respondents show that due to increase in family size they
purchase car
 17% of the respondents show that family needs make them to purchase
car
 12% of the respondents show that better safety at road is important
 09% of the respondents show that purchase of car suits their
personality

Fig 4.10: diagram showing the reasons that make respondents to
purchase the car
Interpretation:
As per analysis it is the income level that make consumer to purchase a car
followed by family needs and increase in family size. As more and more
income is generated to consumer he/she purchase higher level car. As
economic conditions in the country improves and enhances the disposable
income consumer make will be used to buy comforts and luxury. . This trend
is reflected in growth of the per capita Disposable income and consequently
the growth of the Indian automobile industry. Similarly, the growing family
needs like working partners, increasing family size, status etc add to the
motives of buying a car.
43%
13%
19%
25%
Increase in disposable income
Better safety at road
Family needs
Increase in family size

Table 4.11: Depicting the Impact of colour on Target Groups buying
decisions
Respondents
Percentage
Very Important 60 60%
Important 15 15%
Average 20 20%
Doesn‘t Impact 5 5%
Total 100 100%
Analysis:
 Table shows that 60% of the respondents colour is the very important factor
that influenced them in buying the car
 15% of the target groups showed that colour is important
 20% of respondents have given average rating on colour factors
 5% of the target group have given doesn‘t impact rating on colour factors

Fig 4.11: pie chart showing the importance of colour on buying
decision
Interpretation:
As per analysis shown Colour is the important factor and is consumer psychology that
persuades them to buy the products. Hence colour aspects are important factors for
economy class car to sell. In general customers make an initial judgement on a
product within 90 seconds of laying eyes upon it, and staggeringly about 62%-90% of
that judgement will be based on colour.
60%15%
20%
5%
Very Important
Important
Average
Doesn’t Impact

Table 4.12: Depicting the Perceptions of Respondents about economy
class car prices
Respondents
Percentages
1L-2L 0 0%
2.01L-3.99L 43 43%
4.0L-5.0L 55 55%
5.01L- 8.0Lor more 2 2%
Total 100 100%
Analysis:
 Table shows that 55% of the respondents have the perception that 4L-5L is the
economy class car
 43% of the respondents have a belief that 2.01L-3.99L is the economy class
car
 2% of the respondents have perception that 5.01L-8.0L is the economy class
car

Fig 4.12: pie chart showing the perceptions about economy class car
Interpretations:
Economy class car differ based upon perception of various people. Some may think
lowest price cars are economy class car but it is not. Analysis shows that all b/w Rs.
4L-5L are economy class cars according to the respondents. Hence this shows that
cars must have the luxury also safety and comfort. As some of the auto segment
launched 100000 lakh cars but it was not mentioned as economy class car. People
need luxury with safety and comforts at affordable price
0%
43%
55%
2%
1L-2L
2.01L-3.99L
4.0L-5.0L
5.01L- 8.0Lor more

Table 4.13: Depicting the Respondents various monthly Family
Income
Respondents
Percentage
Less then 25000 30 30%
25000-50000 50 50%
50000-1L 18 18%
1L-2L or more 2 2%
Total 100 100%
Analysis:
 Table shows that 50% of the respondents have the family income of 25000-
50000
 30% of the respondents have less than 25000 of family income
 18% of the respondents have 50000-1L family income
 2% of the family have 1L to 2L or more as their monthly family income

Fig 4.13: diagram showing the respondents monthly income
Interpretation:
Analysis shows the income factors and their affect on buying decision. As in India
rich people are in minimum and income level unevenly spread most are with rich
people. The automobile segment manufacturing economy class car target middle level
groups who are neither rich nor poor. Hence the study is important to know about
various income groups. As per Analysis there are more medium income group i.e.
25000-50000 hence the automobile industry should understand the needs of the buyer
and design the car.
30%
50%
18%
2%
Less then 25000
25000-50000
50000-1L
1L-2L or more

Table 4.14: Depicting the Various colours of the cars that the
respondents are more inclined to purchase
Respondents
Percentage
Red 15 15%
White 18 18%
Black 5 5%
Others 62 62%
total 100 100%
Analysis:
 62% of the respondents preferred other colours which they are more inclined
to purchase
 18% of the respondents prefer white
 15% of the respondents prefer red
 5% of the respondents prefer black

Fig 4.14: Pie chart showing the colours the respondents is more
inclined
Interpretation:
The analysis show that colour factors influences their buying behaviour. It is the
psychological thought that a colour has appealed to a person or not. Most of the
colours they choose are silver, grey, green etc. also the least response as some believe
that it resembles bad luck also red and white people prefer because the colour has
appealed to them.
15%
18%
5%
62%
Red
White
Black
Others

Table 4.15: Depicting the Respondents priorities while buying a car
Respondents
Percentage
Fuel Consumption 15 15%
Mileage(KM/litre) 60 60%
Pickup 10 10%
Stability at higher
Speed
8 8%
Top Speed 7 7%
Total 100 100%
Analysis:
 Table shows that 60% of the respondents show mileage as top priorities while
buying a car
 15% of the respondents responded fuel consumption is the top priorities
 10% of the respondents go for pickup and 8%of the respondents opt for
stability at higher speed and 7% of the respondents choose top speed as their
buying priorities in purchase of a car.

Fig 4.15: diagram showing the various priorities while buying the car
Interpretation:
The customer choice of the car highly depends upon the performance and
maintenance costs of the car. This is the reason why this class of parameters was
chosen for this study. As per the analysis customers top priorities is towards mileage
as they are purchasing economy class car. Pickup, speed stability is other priorities
that after first priorities are met. Here respondents are more concerned about their
budget and maintenance cost.
15%
60%
10%
8%
7%
Fuel Consumption
Mileage(KM/litre)
Pickup
Stability at higher Speed
Top Speed

Chapter 5
Findings, conclusions and suggestions
5.1Findings:
 Consumer behaviour changes based upon their income level, size of the family
and other needs. People buy the car based upon the income level and also their
personality life style also effects buying behaviour.
 Usage of fuel in the cars also vary most of them use patrol compared to diesel
and other fuel types CNG or battery driven cars are not much used because of
their less efficiency and more maintenance cost.
 Consumer behaviour while decision making is influenced by various factors
such as price, brand name, safety, mileage etc the main factors is price as most
of the economy class cars are bought by middle income groups.
 Consumer is not only the sole decider but also there are external groups that
influence him regarding his purchase such as family members, advertisement,
social media etc. these groups will give him the idea about the car that he
wants to buy what features that has to be bought. Also influence him whether
to buy the car are not
 Consumers in bengaluru most of them prefer in economy class cars is hatch
back type models because it is easy to use and maintain also not only 4 seaters
but also cargo holding at the back makes them its comfortable
 Consumers are brand conscious whatever the income group may be they
prefer the brand which has features and best services provided by the dealers.
 Most of the respondents are satisfied with their brand and the luxury, comfort,
efficiency it is providing.
 Colour factors are important for the consumer and it also influence him in
selecting the particular car. Colour has psychological ability that appeals to the
consumer while buying the car.

 According to consumers Economy class cars lies between 4lakhs to 5lakhs this
shows that it is not the price that matters to buy a car but a economy class car
must have safety, mileage, luxury, efficiency and stability.
 Considering the features of the cars consumer‘s top priorities while purchase
of the car is mileage and safety. Every consumer considers these and compares
it with different brands.
5.2Conclusion:
The companies are operating in a highly aggressive and competitive global
market place and his climate has led to the emphasis on quality in all aspects.
However when studied from the customer point of view of a customer there seems
to be no major difference among the car brands in a segment as far as performance
is concerned . The brand perception is dependent mostly on the peripheral cues
depending upon the nature and quality of the service provided along with the
pricing, maintenance, availability of spare parts and related issues. It seems as an
under current sentiment is flowing and the perception of the customers is changing
according to it.
The study shows that brand perception is something which starts building up
before a car is purchased and goes on with its use and is reflected in the
recommendations the customer makes to his acquaintances for the same car.
Also, it‘s seen that customer might not be using the car still he holds the
perceptions about it. Brand personality of a car is enforced by the sellers in the
mindsets of the customers and the customers react to it by forming their
perceptions about the car and tis refect s in the overall brand image of the car. So
brand image and brand personality complement each other and the brand
perception aids the building brand image.
Finally there is no doubt that Indian car market may be growing with a double
digit figure still the car companies have a long way to travel to convince the
customers about the brand of their cars and how it suits prospective buyers.
Simply because it simply is not a guarantee that how so ever good the customer

might be holding the brand perception and how so ever good the brand image may
be it is not a guarantee that it will convert into sale. Cars just like clothes and
accessories suit the style and persona of a person and since all cars will become
commodity someday the key to sell and excel in the market will lie with a person
who knows how to use the perceptions of the customers to its use and sell the cars
‗coz ultimately only that car survives which sells
5.3 Suggestions:
 Reference groups are the main influencing factors for consumer in his
buying decisions hence on should target those groups to identify consumer
behaviour
 Price factor is the main priority for a middle level income groups hence the
price of the car must not be too high
 Consumer behaviour is altered by the friends and family members in
buying decisions that thought must be changed because sometime those
external factors may give wrong information even if the particular car is
good quality.
 Colour factors also affects the consumer decision process hence more
research should be conducted to know about which colour that appeals to
the consumer in buying a car
 In economy class car consumer perceptions is not only price but also the
luxury, car features, also quality. Hence the dealers must concentrate not
only on lowering price but also improving quality.
 Most of the consumers are brand conscious hence company must try to
retain its brand image by providing quality products.
 Most of the consumers do not own the car but they have the perceptions
regarding the car so these customers can be persuaded through reference
groups in buying a car.

Bibliography
Books
 Kotler & Koshy, Marketing Management – A South Asian Perspective,
Pearson, 2007.
 Rajen Saxena, Marketing Management, 3rd Edition, TMH
 C. Bhattacharjee, Services Marketing, Excel Books
 Dwayne D Gremler and Ajay Pandit, “Services Marketing‖ Special Indian
Edition, Tata Mc Graw Hill, 2008
 S.L. Gupta, Sales & Distribution Management, Excel Books
Websites
 Business ―report on automobile industry‖ viewed on 09-03-15 in
business.gov. in
http://business.gov.in/Industry_services/automobile_industry.php
 Shine ―report on automobiles-auto-ancillaries‖ viewed on 15-03-15 in
shine.com
http://info.shine.com/industry/automobiles-auto-ancillaries/3.html
 India business ―report on industries service‖ viewed on 18-03-15 in
Indiabusiness.nic.in
http://indiainbusiness.nic.in/newdesign/industryservices_landing.html
 Consumer psychology ―report on consumer behaviour‖ viewed on 25-
03-15in consumerpsychologist.com/
http://www.consumerpsychologist.com/
 Consumer STP ―report on consumer behaviour &nature‖ viewed on
28-03-15 in yourarticlelibrary.com
http://www.yourarticlelibrary.com/marketing/market-
segmentation/consumer-behaviour-meaningdefinition-and-nature-of-
consumer-behaviour

 Consumer behaviour‖report on consumer behaviour‖ viewed on 02-04-
15 in consumer behaviour.blogspot.in
http://consumers-behaviour.blogspot.in/2011/08/introduction-to-
consumer- behaviour.html
 Wikipedia ―report on vehicle plants in India‖ viewed on 07-04-15 in
wikipedia.org
http://en.wikipedia.org/wiki/List_of_vehicle_plants_in_India
 icjcrar‖report on consumer decision making‖ viewed on 15-04-15 in
icjrar.com
http://www.google.co.in/www.ijcrar.comRani.pdf
 Research paper‖ report on consumer selections and brand
consciousness‖ viewed on
www.ijsrp.org/research-paper-0214/ijsrp-p2670.pdf
 Marketing‖ report on management and marketing viewed on 20-05-15
in ukessays.co.uk
www.ukessays.co.uk › Essays › Marketing
 Management ―report on consumer management‖ viewed on 25-05-15
in kkhsou.in
http://www.kkhsou.in/main/EVidya2/management/consumer.html,

Annexure
Questionnaire
I am Guruprasad studying in final year MBA at R.V. Institute of Management,
Bengaluru. Pursuing dissertation on the topic‖ A Study on Consumer Buying
Decision Process of Economy Class Cars in Bengaluru‖. Request you to kindly
respond to the questions given below.
Name:Age:
Gender: Male Female
Business/ Profession:
1) Do you own a car?
a) Yes
b) No
2) If yes mention car name?
a) Maruti b). Toyota c). Honda d). others (specify)_________
3) What is the price of your car?
___________________________________
4) What is the fuel type of your car?
a) Petrol b) diesel c) CNG d) others (specify)……..
5) What factors influenced you at the time of selecting the car?
a) Price
b) Brand name
c) Mileage
d) Safety
e) Others (specify)______________

6) Who influenced you to prefer this car particularly over the other brands?
a) Advertisement
b) Social media
c) Dealers
d) friends, family members
e) Relatives
f) Others(specify)_______________
7) Which type of car do you prefer?
a) Hatch back b) Sedan c) SUV d) others (specify)__________
8) In case you already own a car, then answer the given question? Are you Brand
Conscious?
a) Yes
b) No
9) How do you rate the brand of the car you own? Tick
1 2 3 4 5
Very low very high
10) Why you bought your present car? Please rank from the highest order of
preference
a) Increase in disposable income
b) Better safety at road
c) Family needs
d) Increase in family size

e) Suits your life style and personality
11) To what extent does the color of the vehicle impact your buying decisions
a) Very imp b) important c) average d) doesn‘t impact
12) According to your perception economy class cars fall under the price ranges?
a) 1.00L-2 .00L
b) 2.01L- 3.99L
c) 4.00L- 5.00L
d) 5.01L-8lac or more
13) Monthly family income?
a) Less than 25000
b) 25000- 50000
c) 50000- 1 lac
d) 1 lac- 2 lac or more
14) Which colors of vehicle are you more inclined to purchase?
a) Red b) white c) black d) others( specify)__________
15) Mark the attributes which you consider to be most important while buying
acar?
Fuel consumption
Mileage (KM/ltr)
Pick up
Stability at higher speed
Top speed

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