buyer behaviour towards passenger car dealers

JOURNAL OF COMMERCE AND MANAGEMENT RESEARCH -ISSN-2249-0442 Volume-4 Issue-2 December-2014

JCMR Page 64

BUYER BEHAVIOUR TOWARDS THE DEALER SELECTION FOR PASSENGER CAR PURCHASE IN MALAPPURAM DISTRICT

K.P NAJEEMUDEENResearch Scholar - Ph.D, Karpagam University

Dr. N. PANCHANATHAMResearch Supervisor, Karpagam University

Professor, Department of Business Administration, Annamalai University

Abstract

Every consumer is highly unique and a complex human, yet there are many things consumers have in common when it comes to buying. Many factors are involved in their buying decisions, any one or more can become their deciding factor. The post globalization era has witnessed the footprints of global automobile giants marching towards India to tap India’s highly potential passenger car market. As a result customers are flooded with a wide variety of options to choose from. Dealers are the middle men between a car manufacturer and its customers. Dealer thus becomes the most important link in joining the company to its customers as he is the person who will sell the product, will deliver it and will keep on providing the after sales services to the customers as and when required. So, it becomes necessary to study dealer as a part of customers’ satisfaction journey with the product called car. The objective of this paper is to investigate those differentiating parameters that determine the customers’ selection of a dealer for the purchase of passenger cars and the other factors that influence the screening and selection of the dealer. The primary data was collected from 97 respondents, located in Tirur taluk using convenience sampling. The results revealed the strong influence of attributes like previous relationship or rapport with the dealer, ready availability of vehicle and the influence of reference group.

KEYWORDS

Consumer Behaviour, Buyer, Automobile, Passenger Cars, Dealer, India, Kerala, Tirur.

INTRODUCTION

The twentieth century has borne witness to remarkable changes in the marketplace caused by sharp changes in the lifestyle patterns of the past and present day consumers due to globalization. Time tested marketing concepts are being turned down as they fail to measure the behaviour of new generation customers. Their behaviour is characterized by the distinctiveness of individual expectations, preference for multiple options, tendency to abandon Brand loyalty and switch to competitor brands that provide higher perceived value. The new generation consumers are difficult to classify by conventional demographic factors and unless their thought process and buying behaviour preferences are fully understood, decisions on product designs, product variants, branding and distribution channels are likely to be mislaid.


JCMR Page 65

There cannot be a second opinion on the fact that the automobile vehicles have become the unavoidable part of our life. Life without vehicle is just beyond imagination these days. It is not only an indicator of national economy; but an individual’s progress graph can be measured on the grounds of the automobile vehicles used by him for day to day work and also for pleasures and treasures of happiness, prestige and style as well.

Investment in a Car is the costliest investment made in a life time only next to construction of a house, for any human being. Unlike other consumable durables, the decision to buy specific brand of Car is shaped over a long period of time. It is a common knowledge that all of us are attracted towards cars right from childhood and we have developed our own perceptions for cars. When we acquire the capacity to buy cars, our experience of buying, involves both emotional and rational aspects which lead to a purchase decision. The period between recognition of need to buy a car and the actual purchase may run into many weeks or even months.

Dealers are the middle men between a car manufacturer and its customers. Dealer thus becomes the most important link in joining the company to its customers as he is the person who will sell the product, will deliver it and will keep on providing the after sales services to the customers as and when required. So, it becomes necessary to study dealer as a part of customers’ satisfaction journey with the product called car (Nikhil Monga, Dr. Bhuvnender Chaudhary & Saurabh Tripathi - 2012)

There is obviously a strong link between customer satisfaction and customer retention. Satisfaction of the consumer, after the sales, is important for repeat purchase. It is more profitable to retain existing customers, rather than looking for new ones. Satisfied customers will someday become loyal customers, in other words there is a positive correlation between customer satisfaction scores and customer buying behaviour. If a customer rates the car very high in satisfying his or her needs, the car manufacturer should expect more referrals. This study is intended to analyse the factors which are considered by the customers to be important while selecting a car dealer for their purchase and the factors influencing the selection on the basis of a descriptive study conducted in Tirur taluk of Malappuram district in Kerala.

STATEMENT OF THE PROBLEM

The post globalization boom in the automobile sector of India has paved way for stiff competition among the variety of car manufacturer who are in a race to capture a major chunk of the Indian passenger car market. This competition not only exists between manufacturers, but among the car dealers too. We can even witness the existence of different dealers of the same brand of cars in a single market, fighting among themselves to gain more sales. This facilitated the customer with a wide variety of options from which he can choose his dream vehicle. The OEMs are even encouraging this fights to derive maximum sales and gain the market share by creating a ‘Survival of the fittest’ scenario. Now it has become imperative for the car dealers to do what all is necessary to attract customers to their


JCMR Page 66

showroom with better public relations, customer care and after-sales service for winning their pie in the market. This study intends to analyse the factors that influence the customer choice for passenger car dealers with special reference to Tirur, which is a main growing market for passenger cars.

REVIEW OF LITERATURE

According to Nikhil Monga, Dr. Bhuvnender Chaudhary & Saurabh Tripathi (2012) Dealers are the middle men between a car manufacturer and its customers. Dealer thus becomes the most important link in joining the company to its customers as he is the person who will sell the product, will deliver it and will keep on providing the after sales services to the customers as and when required. So, it becomes necessary to study dealer as a part of customers’ satisfaction journey with the product called car. They also states that the dealer related parameters of customer satisfaction are Distance (Proximity), Advertisements (Promotions), Technical Facilities, Cost of Service, Availability of Spares, Information Provided, Service Time, Charges, Staff, Car Handling (Delivery & service), Assured Customer Transactions, Ambience of Service Center and Finance (Credit) Schemes.

Dr. S. Subadra, Dr. K.M Murugesan and Dr. R. Ganapathi (2010) identified that availability of spare parts and service facilities are serious matters of concern in the purchase decision of passenger cars.

Ajay Tekchandani (2013) pointed out that there is a positive correlation between customer satisfaction and market share. Also, after sale service is the prime factor for boosting the level of customer satisfaction, particularly in passenger car industry.

Clement Sudhakar and Venkatapathy (2009) examined the power of peer group in buying Automobile with reference to Coimbatore District. It was also found that the influence of friends is higher for the purchase of small sized and midsized cars.

White (2004), discussed the factors those plays a vital role in choice of car buyers and observed that consumer negotiate with dealers over price and pursue them to every extent to avail incentives as well as low-interest payment plans. He concluded that with an increasing trend of multi-car households, car dealers and advertisers should target the right audience, taking into consideration the power of children and the impact of life stage. Even after the fact that women are the primary buyers of most new cars, study concluded, the motor trade has traditionally been contemptuous of women's role in the car-buying process.

Vikram Shende (2014) Car dealers and manufacturers show very good hospitality to customers during their visits to the place of showroom before and immediately after their purchase. But after some time they face a problem with their dealers regarding after sales service. Therefore, it is suggested that the services rendered r to be rendered should be properly explained, friendly approach and reliability in service to be further improved. Cost of spare parts to be charged reasonably.


JCMR Page 67

Cars had a greater probability of selling if the seller had a better reputation, according to Thomas Andrews (2007).

OBJECTIVES OF THE STUDY

The purpose of this research is to study the behaviour of consumers, perception of product attributes and level of satisfaction with respect to passenger cars. The following are the objectives:

To analyze the socio-economic profile of the sample respondents. To identify and analyze the factors influencing customers’ decision to buy the car

from a particular dealer. To evaluate the parameters on which the customers rate the dealers before finalizing

the one from whom they purchase. To make suggestions in the light of the findings of the study.

SCOPE OF THE STUDY

Tirur is a municipal town in Malappuram district in the Indian state of Kerala, spread over an area of 16.55 square kilometers (6.39 sq mi). It is one of the business centers of Malappuram district and is situated 26 kilometers west of Malappuram and 41 kilometers south of Kozhikode. Tirur is also a major regional trading centre for fish and betel leaf and has an average elevation of 2 meters (6 ft 7 in). As of 2011 India census, Tirur had a population of 58,490 of which 48% are male and 52% female. Tirur has an average literacy rate of 80%, higher than the national average of 59.5%. The male literacy is 81% and female literacy is 78%. In Tirur, 14% of the population is under six years of age.

Being the biggest business centre and NRI belt in Malappuram district, Tirur is one among the economically richest town in Malabar region. Due to their increasing purchasing power, the people of this district have started to buy cars for various purposes like personal use, professional use and even as a symbol of social status. Tirur is a potential market for all the products and services, because people of various religions, languages, cultural backgrounds and demographic cum socio economic characteristics live in this area.

LIMITATIONS OF THE STUDY

The time available at disposal of the research was limited for an independent study. Respondents lack of time to give information and casual attitudes. The study was limited to Tirur town only. This study didn't study the psychographics of the consumers.

RESEARCH METHODOLOGY

A sample of 250 consumers was selected for the present study around Tirur town which is in Malappuram district of Kerala. As the universe of the study is large, the researchers have


JCMR Page 68

decided to select sample respondents by adopting the Simple Random Sampling Technique. A structured questionnaire was designed and administered among the respondents to give a fair representation to various attributes of the consumers. A total of 250 Interview schedules were prepared and out of this, only 220 interview schedules were filled up and collected. A scrutiny of these schedules led to the rejection of 19 interview schedules on account of incomplete responses. Thus 201 completed interview schedules were used for the present study. The secondary data has been collected from various published articles, journals, magazines and also through the internet. For the purpose of evaluation, the percentages and weighted score test have been used for meaningful analysis and clear presentation.

DEMOGRAPHIC CHARACTERISTICS OF THE RESPONDENTS

Features Parameters No. of Respondents Percentage

Age

16-25 36 17.91 26-35 84 41.79 36-45 51 25.37 Above 45 30 14.93

Sex Male 197 98.01 Female 4 1.99

Occupation

Government Staff 11 5.47Businessmen 68 33.83 Professional 30 14.93 Private Job 16 7.96NRI 32 15.92 Student 11 5.47Agriculture 5 2.49Daily Wage 20 9.95Retired/Unemployed 8 3.98

Monthly Income

upto 10,000 54 26.87 10001-20000 74 36.82 20001-30000 38 18.91 30001-40000 9 4.48Above 40000 11 5.47No Income 15 7.46

Education Qualification

upto Matric level 94 46.77 Intermediate 39 19.4Graduate 40 19.9Post Graduate 9 4.48Professional Courses 19 9.45

Marital Status Married 152 75.62 Single 49 24.38


JCMR 9

DATA ANALYSIS & INTERPRETATION

Table 1: Factors considered for the selection of the dealer.

Reasons No. of Responses Percentage Rank

Better After sale Service Facilities 24 11.94 2

Relationship with Dealer/Salesman 65 32.34 1

Emergency Road Service Assistance 15 7.46 7

Offers & Discounts 6 2.99 10

Ready Availability of the Car 22 10.95 3

Attraction of the Showroom 8 3.98 9

Proximity of the Showroom 10 4.98 8

Availability of Spare Parts 17 8.46 5

Low Maintenance cost 16 7.96 6

High Exchange Value for Old Vehicle 18 8.96 4

Total 201 100

As per the above table, about 32 percent of the respondents have stated that they have purchased their car from the dealer whom they know before and have a good relationship. About 12 percent of the respondents have chosen to purchase their car from the dealer having better after-sale service facilities while 11 percent of respondents have bought their car from the dealer with whom their preferred model/colour was available at that particular point of time. 9 percent of the respondents replied that their dealer selection was influenced by the exchange value offered by the dealer for their old car whereas, 8 percent of the respondents made their dealer selection based on the availability of spare parts with the dealer and 7.5 percent preferred the dealer with the lowest maintenance cost. This implies that dealers’ relationship/rapport with the customers is the prime factor which influences the customers’ decision about from whom to buy. Other major influencing factors are the after-sale service facilities, ready availability of car models/colours liked by the customers on demand, high value for exchange vehicle, availability of spare parts and low maintenance cost.

This can be better illustrated in a graphical representation as below.


JCMR 0

Table 2: Factors influenced the selection of the dealer from whom the existing car has been bought.

Factors No. of Responses Percentage Rank

Advertisements 30 14.93 3

Media / Online Reviews 18 8.96 5

Reference from Friends, Relatives &

Colleagues 40 19.9 2

Own Experience 24 11.94 4

Public Opinion (Word of Mouth) 64 31.84 1

Salesmanship 10 4.98 6

Road show, Demo, Display etc. 9 4.48 7

Customer Meet 6 2.99 8

Total 201 100

About 32 percent of the respondents have stated that they had purchased their existing car from the dealer who had the maximum public opinion in his favour. 20 percent of the respondents purchased from the dealer referred by their friends, colleagues and relatives. About 15 percent of the respondents had stated to be chosen their dealer based on the advertisements whereas 12 percent of the respondents came to a decision on the basis of their own precious experience. From this we can infer that favourable public opinion (Word of

Mouth), referrals from friends/relatives/colleagues, advertisements and customers’ own experience in the past with the dealer are the major factors that influence the decision of the customer to purchase from a particular dealer.

9%

32%

8%3%

11%

4%8%

8%

8%9%

Better After sale Service Facilties Relationship with Dealer/Salesman

Emergency Road Service Assisitance Offers & Discounts

Ready Availability of the Car Attraction of the Showroom

Proximity of the Showroom Availability of Spare Parts

Low Maintenenance cost High Exchange Value for Old Vehicle


JCMR Page 71

This can be graphically represented as below.

FINDINGS & SUGGESTIONS

The major findings from this study are:

1. Customers have a penchant for buying from the dealers with whom they have a good relationship in the past. Hence the dealers should build a healthy relationship and rapport with their existing customers as well as prospective customers to ensure sales from new customers and encourage the repurchase and referrals from the existing customers.

2. The other things that customers give weightage while selecting a dealer are the after-sales service facilities available with the dealer, ready availability of the desired colours and models of cars on demand, high exchange value for their old cars and availability of spare parts. Hence the dealer should improve their after-sale service facilities, maintain enough stock of different models and colours of cars, enhance their exchange facilities and keep adequate stock of spare parts to attract more customers and boost up the sales.

3. Only a very few customers have opined that they will opt to buy from a dealer who gives maximum offers and discounts to them. This breaks the misconception that the customers are more inclined towards the dealer providing huge discounts and offers. If they have a good relationship with the dealer and the dealer also is well equipped with proper service facilities, vehicle plus spare parts stock and exchange facilities, the customers will surely buy from him even though he doesn’t gives them any discounts or offers.

15%

9%

20%

12%

32%

5%4% 3%

Advertisements

Media / Online Reviews

Reference from Friends, Relatives & Colleagues

Own Experience


JCMR Page 72

4. Word of mouth is an important factor that determines the customers’ selection of the dealership for buying their dream vehicle. Also the reference given by the friends, relatives and colleagues to the customer have an impact on his purchase decision. Hence dealers should ensure they have a favourable public opinion in the market and the existing customers’ are ready to refer them to their friends, colleagues and relatives for their car purchase. This can be ensured by providing proper service and satisfaction to the existing customers.

5. Customers’ own experiences with the dealer in the past also have an impact on the selection of the dealer. If the customer is pleased with the service and hospitality offered by the dealer during his previous encounters he will surely make his next purchase also from the same dealer. He will also give some favourable word of mouth about the dealer to his friends, colleagues and relatives and will be ready to refer the dealer to them when they are about to purchase a car. On the other hand, if he had any bitter experience from the dealer, he will surely stay away from the dealer in future and will also give some negative word of mouth and try to prevent others from going to that particular dealer, citing his own experience. Hence the dealers should provide maximum satisfaction to their customers to create goodwill in the market and avoid any negative publicity.

CONCLUSIONS

Dealers are the connecting link between the parent company and the buyer. He speaks, acts and sells on behalf of the manufacturer. His operations and dealings have a great impact on the image and goodwill of the parent company. If he satisfies the customer he will gain from more sales and will boost the image of the company. If he loses customer confidence it will affect his sale along with tarnishing the company image. Hence it is his duty to protect the public image of the company by ensuring maximum satisfaction and better service to the customers. In this age of social media and satellite communication there are higher chances for customer feedback, both positive and negative, to be transmitted quickly and extensively thereby impacting the sales. Negative feedbacks spread more quickly than positive acclaims. Hence the car dealers should work devotedly to ensure customer satisfaction with a motive of gaining goodwill in the market and also to provide an impetus to their sale.


JCMR Page 73

References

Ajay Tekchandani, “A Study on Customer Perception with Reference to the Satisfaction and Delight – Its Impact on Sale of Passenger Cars”, ASM’s International E-Journal of Ongoing Research in Management and IT, 2013.

Beena John & S. Pragadeeswaran, “A Study of Small Car Consumer Preference in Pune City”, TRANS Asian Journal of Marketing & Management Research, Vol.2 Issue 3-4, March-April 2013, ISSN 2279-0667.

Clement Sudhakar J., and Venkatapathy R., “A Study on Automobile Purchase – Peer Influence in Decision Making”, Indian Journal of Marketing, Vol.35, No.6, June 2009, p.16.

Nikhil Monga, Bhuvnender Chaudhary & Saurabh Tripathi, “Car Market and Buying Behaviour – A Study of Consumer Perception, International Journal of Research in Management, Economics and Commerce (IJRMEC) Volume2, Issue 2 (February 2012) ISSN: 2250-057X.

Philip Kotler, Gary Amstrong, Prafulla Y. Agnihotri & Ehsan ul Haque, “Principles of Marketing: A South Asian Perspective”, 13th Edition, 2010, ISBN: 978-81-317-3107-7.

Shriram Shimpi, “A Study on Consumer Buying Behaviour for Used Cars in Pune City”, ABHINAV, National Monthly Refereed Journal of Research in Commerce and Management, Vol.1, Issue.9, ISSN 2277-1166.

Subadra .S, K.M Murugesan and R.Ganapathi, “Consumer Perceptions & Behaviour: A Study with Special Reference to Car Owners in Namakkal District”, APJRBM, Vol.1, Issue.3, December 2010, p.37.

Suja R. Nair, “Consumer Behviour and Marketing Research”, Himalaya Publishing House, 2004, ISBN: 81-7866-781-9.

Vikram Shinde, “Analysis of Research in Consumer Behaviour of Automobile Passenger Car Customer”, International Journal of Scientific and Research Publications, Vol 4, Issue 2, February 2014, p.1.

White, R., How people buy cars, Admap Journal, 39(3), pp 41-43. (2004).

��

buyer behaviour towards passenger car dealers

Documents

dealer selection

customers selection

result customers

buyer behaviour

passenger car purchase

behaviour preferences

automobile vehicles

customers satisfaction