ANALYSIS OF NEW HONDA CITY CUSTOMER PROFILE & SATISFACTION LEVEL

A SUMMER TRAINING REPORT ON

Analysis of New Honda City Customer Profile & Satisfaction Level Submitted in Partial Fulfillment of the Requirement for The Degree of BACHELOR OF BUSINESS ADMINISTRATION

Submitted by: MS. NIDHI GUPTA BBA (Gen) – Vth Sem Roll No. 0511341708

Under Guidance: MR. SAROJ KUMAR DASH Faculty

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IDEAL INSTITUTE OF MANAGEMENT & TECHNOLOGY NEW DELHI

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ACKNOWLEDGEMENT

“Acknowledgement is an art, one can write glib stanzas without meaning a word, on the other hand one can make a simple expression of gratitude.”

Though the language is a poor substitute for the sentiments, yet there is no way out to recover to it for expressing my profound gratitude, indebtedness and sincere regards to Ideal Institute of Management & Technology for giving me this platform from where I could pursue this internship.

I am immensely grateful to Mr. Saroj Kumar Dash, Faculty member, IIMT, New Delhi for his constant support and suggestion during the period of my training.

Nidhi Gupta

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TABLE OF CONTENTS Chapter Topic No. 1. Introduction 1.1 Customer 1.1.1 Definition of customer 1.2 Customer Profiling 1.3 Customer satisfaction 1.3.1 The purpose of business 1.3.2 Definition of customer satisfaction 1.3.3 Measuring customer satisfaction 1.3.4 Importance of customer satisfaction 1.3.5 Customer satisfaction model by N. Kano

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Review Of Literature

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Problem Statement 3.1 Justification of the problem 3.2 Scope of the project 3.3 Objective of the project 3.4 An Industry overview 3.4.1 The four wheeler industry in India 3.4.1a 3.4.1b 3.4.1c

Background Current scenario Market share scenario

3.5 Company profile 3.5.1 An overview 3.5.1.a 3.5.1.b 3.5.1.c

Honda world wide Principles of Honda Honda in India

3.6 About the car 3.6.1 3.6.2

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The all new Honda City Importance of the all new Honda city for the company

Research Methodology 4.1 Research method 4.2 Data source 4.3 Target population & Sampling plan 4.4 Target areas 4.5 Data processing

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Results & Discussions 5.1 Building of customer profile 5.1.1 Gender 5.1.2 Age 5.1.3 Family status 5.1.4 Educational qualification 5.1.5 Occupation 4

5.1.6 Monthly household income 5.1.7 Budget decision 5.1.8 Driving scenario 5.2 Analysis of customer profile 5.3 Other important information regarding the City customers 5.3.1 Purchase criteria 5.3.2 Source of information 5.4 Competitive analysis 5.5 Analysis of customer satisfaction 5.5.1 Audio system 5.5.2 Overall styling of the car 5.5.3 Additional features 5.5.4 Exterior styling of the car 5.5.5 Interior styling of the car 5.5.6 Luggage space 5.5.7 Performance of the car 5.5.8 Overall performance of the car 5.5.9 Safety features 5.5.10 Pricing of the car 5.5.11 Accessory package 5.5.12 Strengths & shortcomings of the car 5.6 Findings 5.7 Limitations

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Recommendations & conclusions 6.1 Recommendations 6.2 Conclusions

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Appendix Annexure I – Questionnaire Annexure II – Reference

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CHAPTER I: Introduction

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1.1 CUSTOMER: Customers are the most important people for any organization. They are the resource on which not only the success, but the entire existence of any business depends. A customer, also client, buyer or purchaser is usually used to refer to a current or potential buyer or user of the products of an individual or organization, mostly called the supplier or seller. However the term customer also includes by extension anyone who uses or experiences the services of another. The word derives from "custom," meaning "habit"; a customer was someone who frequented a particular shop, who made it a habit to purchase goods of the sort the shop sold there rather than elsewhere, and with whom the shopkeeper had to maintain a relationship to keep his or her "custom," meaning expected purchases in the future. The clichés "customer is king" or "customer is god" or "the customer is always right" are most frequently used in the marketing world and also indicate the importance of customers to businesses. The importance of the customers for any business can be understood by looking at the huge expenditures that are being incurred by various companies for satisfying and retaining their customers. Before discussing further about customer and customer satisfaction we should first try and understand the meaning of the word “Customer”.

1.1.1 DEFINITION OF CUSTOMER: DEFINITION 1: According to Shri. Mohandas Karamchand Gandhi, the father of nation, “A customer is not an outsider to our business. He is a definite part of it. A customer is not an interruption of our work. He is the purpose of it. A customer is doing us a favour by letting us serve him. We are not doing him any favour. A customer is not a cold statistic; he is a flesh and blood human being with feelings and emotions like our own. A customer is not someone to argue or match wits with. He deserves courteous and attentive treatment. A customer is not dependent on us. We are dependent on him. A customer brings us his wants. It is our job to handle them properly and profitably – both to him and us. A customer makes it possible to pay our salary, whether we are a driver, plant or an office employee”.

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DEFINITION 2: Peter Drucker, a well known management expert, defined customers as: A person who purchases the product from the marketer or from the retailer or from the wholesaler.

DEFINITION 3: John marsh, Director General, British Institute of management, defines customer as: A person or organization that a marketer believes will benefit from the goods and services offered by the marketer’s organization.

As these above definitions suggest, a customer is not necessarily someone who is currently purchasing from the marketer. In fact, customers may fall into one of three customer groups: •

Existing Customers – Consists of customers who have purchased or otherwise used an organization’s goods or services, typically within a designated period of time. Existing Customers are by far the most important of the three customer groups since they have a current relationship with a company and, consequently, they give a company a reason to remain in contact with them. Getting these Existing Customers to purchase more is significantly less expensive and time consuming than finding new customers mainly because they know and hopefully trust the marketer and, if managed correctly, are easy to reach with promotional appeals. •

Former Customers – This group consists of those who have formerly had relations with the marketing organization typically through a previous purchase. However, the marketer no longer feels the customer is an Existing Customer either because they have not purchased from the marketer within a certain timeframe or through other indications. The value of this group to a marketer will depend on whether the customer’s previous relationship was considered satisfactory to the customer or the marketer. •

Potential Customers – The third category of customers includes those who have yet to purchase but possess what the marketer believes are the requirements to eventually become Existing Customers. These requirements to become a customer include such issues as having a need for a product, possessing the financial means to buy, and having the authority to make a buying decision. Locating Potential Customers is an ongoing process for two reasons. First, Existing Customers may become Former Customers and, thus, must be replaced by new customers. Second, while we noted above that Existing Customers are the best source for future sales, it is new customers that are needed in order for a business to significantly expand. 8

Once we have understood who a customer is, it is necessary to understand what customer satisfaction is and why it is important.

1.2 Customer Profiling: Customer profile may be defined as customer description that includes demographic, geographic and psychographic characteristics, buying pattern, creditworthiness, purchase history etc. This description may include information pertaining to the income level, Occupation, level of education, age, gender, hobbies, and/or area of residence. For example, magazine advertising salespeople provide advertisers with customer profiles describing the type of person who will be exposed to the advertisements in that magazine. The description may include income, occupation, level of income, occupation, level of education, age, gender, hobbies, area of residence etc. These customer profiles which are built by the companies help them to understand their customers better. Using this customer profile the companies are able to identify and segment their potential customers.

1.3 CUSTOMER SATISFACTION: The word "satisfaction" comes from the Latin words ‘satis’ (enough) and ‘facere’ (to do or make). These words suggest the true meaning of satisfaction, which is fulfillment. Managerially, fulfillment usually translates to solving problem & satisfying the customer is not enough. To produce high level of customer loyalty, businesses need to move beyond more satisfaction, to customer delight.

1.3.1 The Purpose of Business: Peter F. Drucker , considered to be one of the leading management gurus in the world, believes that the purpose of business to create and then retain a satisfied customer. Although firms have to make money, Drucker argues that making money is a necessity and not a purpose. It is, in fact, the end result, a desirable outcome of creating a satisfied customer. Theodore Levitt, a Harvard Business School Professor, who explains this by an analogy with human beings, expresses similar sentiment - all humans have to eat to survive, but eating is not their purpose. Furthermore, making money does not provide a legitimate reason for society to support the moneymaking enterprise. A society supports businesses because they serve its member by catering to their needs to leave them satisfied. If a firm dissatisfies customers, then not only will these specific customers stop 9

buying from the firm, but the society at large will condemn the firm and may even penalize it - to the point of its extinction. In response to such messages, co part of the corporate mission, and utilizes an understanding of customer behavior as input to all its marketing plans & decisions.

1.3.2 Definition of Customer satisfaction: Rather than a single definition, it would be appropriate to have a look at various definitions given by some of the leading management gurus of the world. As it would help us to understand the concept of Customer satisfaction in a better manner. DEFINITION 1: A famous economist, Karl E. Case defines Customer satisfaction as: Equivalent to making sure that product and service performance meets customer expectations.

DEFINITION 2: According to K. Keller : Customer satisfaction is the perception of the customer that the outcome of a business transaction is equal to or greater than his/her expectation. DEFINITION 3: According to Sir Peter Parker: Customer satisfaction occurs when the acquisition of products and or services provides a minimum negative departure from expectations when compared with other acquisitions.

DEFINITION 4: As Leon G. Schiffman says: Customer satisfaction is an individual’s perception of the performance of the product or service in relation to his or her expectations.

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DEFINITION 5: Whereas according to Dr. Philip Kotler: Customer satisfaction occurs when the perception of the reward from the purchase of goods or services by the customer meets or exceeds his/her perceived sacrifice. The perception is a consequence of matching past purchase and consumption experience with the current purchase.

1.3.3 Measuring customer satisfaction: There are several ways to gather input from customers. The simplest way to find out how customers feel and what they want, is to ask them. If you have only 20 customers, you can talk to each one personally. The advantage of this approach is that you'll get a personal "feel" for each customer. The disadvantage is that you'll gather different information from each customer depending on how the conversation goes. Some of the ways in which you can approach the customer are listed below: I.Customer Survey Customer surveys with standardized survey questions insure that you will collect the same information from everyone. Remember that few of your customers will be interested in "filling out a questionnaire". It's work for them without much reward. By launching a customer survey as an attempt to find out "how we can serve you better" -- your customers will feel less put upon. Here are a few of the possible dimensions you could measure: • • • • • • • •

quality of service speed of service pricing complaints or problems trust in your employees the closeness of the relationship with contacts in your firm types of other services needed your positioning in clients' minds

II.Focus Groups Focus groups are good ways to get informal input from a group of customers or prospects. You bring in 5-10 customers or prospects and ask them questions or have them react to material. You can pay a professional facilitator and videotape the whole session, or just lead an informal discussion yourself. In either case, you have a chance to gather ideas about customer needs, reactions to your company, suggestions for new services, and so forth. In 11

addition to individual responses, you get ideas that develop as the group reacts to each other's responses. III.Client Advisory Groups One way to get regular input from customers is to put together an advisory group. This can act like a focus group, but is set up to provide input over time. You may pay members, or simply buy them dinner every quarter. There are many benefits to such groups. They give you a source of input from the customer viewpoint. They provide a sounding board for specific questions. They enhance your relationship with good customers who become more committed to your success. And they can move relationships with prospects ahead.

1.3.4 Importance of customer satisfaction: Why Customer Satisfaction: A customer is satisfied only when he is getting quality product and quality service which he perceives. If a company is able to provide both, this will lead to customer satisfaction. A satisfied customer will develop loyalty towards the company and will buy product of same company again and again. At the same time he will recommend company's product to others. This will help company in getting new customers. As a result company's sale will increase and profits will rise. Dissatisfied customer on an average will tell 12 others not to buy a product of the company. With internet and other information technology tools this number could go up to 10,000. This will affect the image of the company and will result in loss of sale and profit. The cost of acquiring new customer is 5 times more than keeping the old one. The old customer will remain with a company only if they are satisfied with the services provided by the company. If a customer has a major complaint, 91 % of such customers will not buy from the company again. If the problem is resolved quickly, 82% of them will return. So a company should see that it is able to meet expectations of each and every customer and should not delay in solving customer's complaint.

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1.3.5 CUSTOMER SATISFACTION MODEL by N.Kano: The customer satisfaction model from N.Kano is a quality management and marketing technique that can be used for measuring client happiness. Kano’s model of customer satisfaction distinguishes six categories of quality attributes, from which the first three actually influence customer satisfaction: 1. Basic factors (Dissatisfiers, Must have): the minimum requirements that will cause

dissatisfaction if not fulfilled, but do not cause any satisfaction if they are fulfilled (or exceeded). The customers take these as prerequisites and take these for granted.

2. Excitement factors (Satisfiers, Attractive): the factors that increase customer

satisfaction if delivered but do not cause dissatisfaction if they are not delivered. Such factors surprise the customers and generate ‘delight’.

3. Performance Factors: The factors that cause satisfaction if the performance is high,

and cause dissatisfaction if the performance is low. Here the attribute performanceoverall satisfaction is linear and symmetric. Typically these factors are directly connected to customer explicit needs and desires and a company should try to be competitive here.

The additional three attributes which Kano mentions are: 4. Indifferent attributes: the customer does not care about these features.

5. Questionable attributes: it is unclear whether these attributes are expected by the

customer.

6. Reverse attributes: the reverse of this product feature was expected by the customer.

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CHAPTER II: Review Of Literature 15

In today’s competitive world where every company is striving to retain and capture market the importance of satisfying the existing customers has increased. And almost every company realizes this, it is only because of this reason that the companies are spending huge amounts for finding out the level of customer satisfaction and trying to improve this level by providing better products and services. Some of the researches that have been done by various companies in different sectors, in the field of customer satisfaction have been discussed below.

Customer Survey I : A survey was conducted by The University of Michigan to find out the level of customer satisfaction for Lexus car owners and users. According to the report the customers rated Lexus as 87 on a scale of 100. It was also found that the major criteria for satisfying the customer were not the incentives but the quality of the cars. The report suggested the company to reduce the production runs and concentrate on improving the quality.

Customer Survey II: A customer satisfaction survey was conducted by the SKY(Satellite TV), which found out that approximately 62% of the respondents were very dissatisfied (along with another 25% who were dissatisfied) with the cost of cable television service. A majority of the respondents were satisfied with the friendliness and courtesy of customer service personnel, however, approximately 30% of the respondents rated the cable company's performance as poor. With regard to open-ended comments, respondents felt that the cost of the cable service was too high, a need for cable competition existed and the desire for a basic cable package offering was desired.

Customer Survey III: According to a survey conducted by J.D. Power Asia Pacific, to find the level of customer satisfaction among the MarutiSuzuki car owners, the company scored 838 points on a scale of 1000.The study assesses the overall contentment of the owners of the vehicle who visited their official dealer or service centre for maintenance or repair work in the initial 12 to 18 months of ownership. The report suggested that the overall satisfaction level of the customers is determined by utilizing seven measures including service quality; user-friendly service; service advisor; service initiation; service delivery; and in-service experience. 16

Customer Survey IV: A customer satisfaction survey was conducted by the Institute of Air Navigation Services to find out the level of satisfaction among the students. The survey accounted 2774 students, it was found that around 90% of the students were satisfied with the modules and more than 88% students indicated that the modules met the objectives. However about 23% of the students recommended a change in the structure of the modules. The analysis of the open ended questions showed that around 56% of the students wanted changes in the e-learning & training programmes.

Customer Survey V: Another customer satisfaction survey was conducted by LaCHIP (Louisiana Children’s Health Insurance Program), which showed that although more than 76% of the customers were satisfied with the services provided but nearly 38% of the customer thought that the process of applying for the program was very cumbersome and time consuming.

Customer Survey VI: National Centre For Education Statistics (NCES) conducted a customer satisfaction survey to find out the level of customer satisfaction related to the NCES publications, NCES databases & user tools and other services provided by the NCES. The survey concluded that about 90% of the customers were either satisfied or very satisfied with the publications & the services provided by the NCES. And not more than 5% of the customers reported dissatisfaction with such publication aspects as overall quality of report, comprehensiveness, ease of understanding, relevance of information, and accuracy. However, 15% of users reported dissatisfaction with timeliness.

Customer Survey VII: A customer satisfaction research conducted by Don Dewees and David Duff in the field of automobile insurance sector in the U.S.A. According to this report although it was thought that Monetary compensation for the vehicular accidental claims was the path to customer satisfaction, however the customers thought that a bundle of small things such as promptly answered telephone calls or mails, recognition that the person applying for the claim is going through a stressful and emotional period, contribute a great deal in customer satisfaction.

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Customer Survey VIII: Another customer satisfaction survey was conducted at the Marina Mall. This survey was conducted using a questionnaire as the research instrument, with a sample size of 300 people visiting the mall, which included 150 males & 150 female respondents. Questions relating to different aspects of the mall in the areas of design, service, atmosphere, quality, selection, variety, products, and sales people, as well as parking and time preferences for visiting the mall. Findings in this study include gender differences in the types of shops, food establishments, entertainment, etc. however, the Marina Shopping Mall is rated by the respondent/consumers participating in this study as having satisfied their expectations in most areas and totalling a majority percentage as well.

Customer Survey IX: NBRI(National Business Research Institute) conducted a research for the HYATT HOTELS, U.S.A. After the terrorist attack of 9/11, as the sales for the hotel were falling drastically, the leading hotel chain engaged NBRI to a customer satisfaction survey to find the level of customer satisfaction and ways to improve the same. The survey revealed that price was no longer the factor effecting the perception or the level of satisfaction of the customers. However, according to more than 86% of the customers security arrangements and the friendliness of the staff were the main reasons for customer satisfaction or dissatisfaction.

Customer Survey X: Another research in the field of evaluation of customer satisfaction was conducted by Starbucks’ indicated that customer satisfaction, not just customer service, had to be improved quickly and that Starbucks' head office had failed to see a changed customer base. The report points out that, inspiring customer loyalty requires local store level efforts to remove the public's perception of a corporation only interested in generating more stores.

Customer Survey XI: A customer satisfaction survey conducted by Yamaha Motor India Pvt. Ltd. revealed that more than 78% of the customers were either highly satisfied or satisfied. Out of these 56% of the highly satisfied or satisfied customers turned out to be the repeat purchasers of the Yamaha bikes.The main reasons of satisfaction among the customers were the fuel economy & power of the bikes.

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CHAPTER III: Problem Statement

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After the review of literature in the previous chapter the importance of customer satisfaction was quite evident. However the researcher felt that with the dynamic nature of the Indian market and the shortening life cycle of various products, there was a need for an elaborated study of the likes and dislikes of the Indian consumer. With launch of various brands and models waiting at the horizon, the Indian auto industry is expected to become highly competitive in the coming years. So in order to retain and increase their market shares the companies need to satisfy their customers in the best possible manner. After carefully studying the current scenario of the auto industry in India, the researcher decided to conduct a detailed study for evaluating the level of customer satisfaction and identifying the reasons for the same. This study was conducted using a customer survey, targeting the current users of the all new Honda City i-VTEC car launched by HSCI on the 25th Sep. 2008.

3.1 Justification of the Problem: After de-licensing in 1991, the auto industry in India has grown at an average rate of 17%. Currently the industry contributes nearly 5% of the GDP, and is expected to grow nearly five folds and account over 10% of India’s GDP. Over the last 5 years, the production of the four wheeler industry has increased from 9.3 lakh units in 2002-03 to 23 lakh units in 2007-08, reporting a CAGR of 20%. Even the exports have increased immensely from 84,000 units in 2002-03 to 2, 80,000 units in 2007-08. However, despite the commendable growth of the auto sector, HSCI has not really been able to make a mark in the Indian market. It had been able to capture only 5.52% of the total market in FY07, which has fallen further to 4.93% in the FY08 and with the launch of new cars such Nano, Jaguar, Land Rover etc. The situation is expected to get worse. The main rational behind this survey report is that HSCI needs to retain the existing customers and attract new ones. This can be done only by satisfying the customers to the maximum possible extend. As this would not only prevent the existing Honda customers from shifting to the other competitive brands but would also help in capturing new ones. This is because, when a customer perceives good service he typically tell nine to ten people. According to Griffin (1995), improvement in customer retention by even a few percent can increase the profits by 25% or more. The University of Michigan found that for every percentage increase in customer satisfaction there is an increase of 2.37% in return on investment (Keiningham & Varvra, 2001).

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By this report the researcher aims at developing a customer profile for the all new Honda City users. The report also aims at evaluating the levels of customer satisfaction, identifying the reasons for such satisfaction or dissatisfaction and recommending changes that would help the company in improving this level of satisfaction. After deciding the industry, company and product for which the survey was to be conducted, the researcher took the following decisions regarding i. The scope of the project & ii. The objective to be attained from the project

3.2 Scope Of The Project: i. A detailed study of the four wheeler industry in India, ii. A brief study about functioning of Honda in India(i.e.HSCI), iii. Understanding the customer profile for the new Honda City, iv. Understanding and analyzing the level of satisfaction or dissatisfaction among the customers of the new Honda city & the reasons for the same.

3.3 Objectives Of The Project: i. To understand the detailed profile of the customers of the All New Honda City ii. To evaluate the level of satisfaction or dissatisfaction among the customers of the new Honda city & the reasons for the same.

In order to achieve the above stated objectives the researcher found it necessary to gather information pertaining to the following: i. Indian four-wheeler Industry, ii. Honda and iii. All new Honda City I-VTEC. 21

3.4 AN INDUSTRY OVERVIEW:

3.4.1 The four wheeler industry in India: 3.4.1(a) Background Source: FADA (Federation Of Automobile Dealers Association) & ICRA (Investment Information And Credit Rating Agency Of India Limited) Sectoral Review

The four wheeler industry in India has not quite matched up to the performance of its counterparts in other parts of the world. The primary reason for this has been the allpervasive regulatory atmosphere prevailing till the opening up of the industry in the mid-1990s. The various layers of legislative Acts sheltered the industry from external competition for a long time. Moreover, the industry was considered low-priority as cars were thought of as "unaffordable luxury". Until the early 1990s, the automotive sector in India was highly protected. This was in the form of steep import tariffs and measures that restricted the participation of foreign companies. Hindustan Motors (HM) and Premier Automobile (PAL) that were set up in 1940's dominated the vehicle market and industry. In the 1950s, the arrival of Tata Motors, Bajaj Auto, and Mahindra & Mahindra led to steadily increasing vehicle production in India, while the 1960s witnessed the establishment of the two- and three-wheeler industry in India. However, the automotive industry witnessed tremendous growth after the entry of Maruti Udyog in the 1980s. In 1983, the government permitted Suzuki - for some time, the only FDI player - to enter the market in a joint venture with Maruti - a state operated enterprise at the time. Ten years later, as part of a broader move to liberalise its economy, India de-licensed passenger car manufacturing and opened it up further to foreign participation. That brought a wave of FDI to India's vehicle industry. Import barriers have been progressively relaxed. Today, almost all of the major global players are present in India. The automotive industry is today a key sector of the Indian economy and a major foreign exchange earner for the country. 3.4.1(b) Current scenario of the four wheeler industry in India: Source: FADA & ICRA Sectoral Review The Indian economy has grown at an annual rate of more than 8% over the last five years and the industrial production has made an outstanding contribution to this growth. Auto industry was licensed, controlled and restricted in the early years of independent India and had a limited contribution to the economy. But post delicensing in 1991 the industry has grown at an average rate of 17%. The industry currently contributes about 5% of the GDP and it is targeted to grow fivefold by 2016 and account for over 10% of India’s GDP. Automotive mission plan (AMP) expects the 22

industry to reach a turnover of $150-200 billion in the next ten years from the current $45 billion levels. Over the last five years the production of four wheelers in India has increased from 9.3 lakh units in 2002-03 to 23 lakh units in 2007-08 reporting a CAGR of 20%. Vehicle manufacturers are increasingly adopting an outward looking approach and exploring new markets & territories, ranging from Middle East, Europe, South Africa, Algeria, Latin America, Russia, etc. Exports have increased immensely from 84,000 units in 2002-03 to 280,000 units in 2007-08. CRISIL (Credit Rating Information Services Of India Ltd.) estimates the passenger vehicle exports to cross 7 lakh units by 2011-12.

3.4.1(c) Market Share scenario in the car industry: (i) Passenger Cars segment:

(ii) Utility Vehicles:

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3.5 COMPANY PROFILE:

3.5.1 An Overview: 3.5.1(a)HONDA WORLDWIDE:

The history of the Honda Motor Company began with the vision of one man - Soichiro Honda. His dream was personal mobility for everyone. Soichiro Honda founded the Honda Motor Company in 1948. In the same year, he designed and engineered the first product of this company - a 50 cc motorised bike on a bicycle frame in his small shed at Hamamatsu. Soichiro's vision was international in character. His desire was to lead the world in technology, and make a significant contribution to the creation of a better society. As a result, most of the products that Honda developed started out by making a difference. Whether it was the CVCC engine in the sixties or the solar powered car of the nineties, they all sought to challenge and overcome conventional wisdom.

3.5.1(b) PRINCIPLES OF HONDA: Honda Motor Co., Ltd. operates under the basic principles of "Respect for the Individual" and "The Three Joys" — commonly expressed as The Joy of Buying, The Joy of Selling and The Joy of Creating. "Respect for the Individual" reflects our desire to respect the unique character and ability of each individual person, trusting each other as equal partners in order to do our best in every situation.

3.5.1(c) Honda in India: Honda Siel Cars India Ltd., (HSCI) was incorporated in December 1995 as a joint venture between Honda Motor Co. Ltd., Japan and Siel Limited, a Siddharth Shriram Group company, with a commitment to providing Honda’s latest passenger car models and technologies, to the Indian customers. The Honda City, its first offering introduced in 1997, revolutionized the Indian passenger car market and has ever since been recognized as an engineering marvel in the Indian automobile industry. The success of City as well as all its other models has led HSCI to become the leading premium car manufacturer in India. The total investment made by the company in India till date is Rs. 1620 crores, further investment of RS. 1000 crore is planned and being currently invested for the coming second plant in Rajasthan. The company has a capacity of manufacturing 100,000 cars. 24

7HSCI’s state-of-the-art manufacturing unit was set up in 1997 at Greater Noida, U.P with an investment of Rs. 450 crore. The green-field project is spread across 150 acres of land (over 6,00,000 sq. m.). The initial installed capacity of the plant was 30,000 cars per annum, which was thereafter increased to 50,000 cars on a two-shift basis. The capacity has further been enhanced to 1,00,000 units annually in February 2008 . The capacity expansion was necessitated by the excellent performance of all the Honda models, particularly the growing demand for City in India. Several modifications were done by the company with the objective of offering higher quality products to its customers, faster and quicker. The expansion process also included expansion of the covered area in the plant, from 1,07,000 sq. m. to 1,31,794 sq. m. HSCI currently produces the newly launched Honda Jazz, All New City, Civic and Accord models in India and the premium SUV, CR-V is sold as a fully imported unit from Japan. The company operates under the stringent standards of ISO 9001 for quality management and ISO 14001 for environment management.

3.6 About the Car: 3.6.1 The all new Honda City: The third generation of the concept design “arrow-shot” or arrows, make All New Honda City looks very different from the generation predecessor. Overall view All New Honda City more impressive. With exterior design changes so that the overall look sporty luxury at a time. All New Honda City is a perfect evolution of a mini-class sedan. The latest generation of Honda City will continue success in the automotive market. Honda City has this revolutionary view, and the more luxurious for a mini-class sedan. Design front bumper and spoiler made refers to the cars racing to the level of Aerodynamics can be maximum. In addition, also made a whole big enough air on the spoiler to reduce barriers when its winds, also as Feed of fresh air to the engine room. The larger size of the headlight to make Honda call it “The Eagle Eye”. Behind, All New City is designed according to “tail” arrows. An effect of arrows is established by design decks high and the trunk cut off, which also contribute to the smooth flow of air to the rear body. In addition, the form of bumper diffuser also added to create the

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effect HANDICAP style press and the road surface in order to maintain stability when the car was on high speed. The shape of the rear lights also changed, now mica lamp made in two colors, red and white three-dimensional. Interior also participate improvement, Honda wants to apply the concept of “cozy Lounge” in the car cabin. This is possible with the dimensions of space that is longer and more widely each 5mm from the previous generation (4.395mm and 16.95mm) and less than 15mm (1.470mm). There are also features reclining seat, which allows rear seat passengers could be laid down sitting position to get more comfortable. This technology may be applied first in a sedan, usually because the rear seat passengers with what is required baggage.

3.6.2 Importance of the all new Honda City for the Company: According to the management of HSCI, Honda City has been the most important car in the Honda line up. HSCI claims to sell around 60,000 cars every year. Out of these 2/3rd of the cars sold are City i.e. Honda sells 40,000 City every year. The City has been the star performer for HSCI since the time it was launched. However now it is taking the position of a cash cow for the company. i.e. it is generating the maximum sales for the company despite its small & stagnant market share.

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CHAPTER IV: Research Methodology

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RESEARCH METHODOLOGY: There were several methodologies of research that the researcher could have utilized to collect information regarding customer satisfaction. Some of the more commonly used strategies are: i) written survey, ii) telephone surveys, iii) focus groups, iv) in-depth interviews etc. However factors such as information need, resources, accessibility to customers, sample to be used, time etc. had to be considered prior to selection of a methodology.

4.1 Research Method: For this particular study, the method of acquiring information from the customer needed to be both easy to use and understand. Therefore the researcher decided to use the written survey method. Under this method, the information was collected from the customers using a research instrument called a Questionnaire(which was prepared by the researcher himself). This questionnaire was a structured questionnaire, which had definite, concrete and predetermined questions. These questions were presented with exactly the same wording and in the same order to all the respondents. The questionnaire consisted of both closed ended & open ended questions.

4.2 Data Source: The research makes use of both Primary & Secondary Data. a. Primary Data: The customer survey was based on the primary data which was

collected by the researcher through one to one interaction with the customers, using the questionnaire.

b. Secondary Data: use of secondary data was also made in the research. The purpose was to gather information as to who is a customer, what is customer satisfaction, information pertaining to four-wheelers market, company profile & research papers on customer satisfaction. This secondary data was collected from various websites, Magazines & broachers, management books and articles.

28

4.3 Target population & Sampling plan: The target population consisted of all the existing customers of the all new Honda City IVTEC and the research area was Delhi & NCR. Out of the entire target population the researcher decided to draw a sample of 200 customers, for the purpose of this report. These samples were chosen on the basis of simple random sampling.

4.4 Target Areas: In order to conduct the survey and meet the targeted audience the researcher visited various places. These places included: i) Company Dealerships & Service Centres (Ace Honda & Prime Honda), ii) Petrol pumps (Kargil Fill up station Vasundhra encl. & Indian Oil Mayur vihar PH-I), iii) Shopping malls, (which included the Great Indian Mall & Centre Stage Mall).

4.5 Data processing: The data collected from the respondents, through the questionnaire, was recorded in an excel sheet which was then converted into SPSS database for analysis procedure. This data has been displayed in the report using graphical presentations (pie-charts, bar diagrams, histograms etc.) and tabulations.

29

CHAPTER V: Results & Discussions

30

RESULTS: On the basis of the survey conducted under the project, using the questionnaire (Refer to Annexure), the following data was collected. This data has been analysed using various software such as Microsoft Excel, Microsoft Word & SPSS and has been depicted using various Graphs, tables etc.

5.1BUILDING OF CUSTOMER PROFILE:

5.1.1

GENDER: Table 1.1

Frequency

Percentage

Male

175

87.50%

Female

25

12.50%

Total

200

100% Fig. 1.1

31

As shown above out of 200 respondents 175 were Males, where as only 25 respondents were Females. i.e. 87.50% of the respondents were male. The main reason for this may be the fact that only 25.6% of the women in India are working.

5.1.2

AGE:

Table 1.2 Cumulative Frequency

Percent

Valid Percent

Percent

21 to 30

21

10.5

10.5

10.5

31 to 40

59

29.5

29.5

40.0

41 to 50

73

36.5

36.5

76.5

51 to 60

39

19.5

19.5

96.0

More than 60

8

4.0

4.0

100.0

200

100.0

100.0

Total

32

Fig. 1.2

On the basis of the responses from the respondents, it was found that more than 36% of the customers belong to the age group ranging from 41 to 50 years, nearly 30% of the customers lie in the age group of 31 to 40 years & nearly 20% of the customers belong to the age group of 51 to 60 years. HSCI Ltd. had launched this car with an aim of capturing the customers of a younger age group i.e. 25 to 45 years. However, as the survey revealed that the majority of the customers belong to the age group of 40 to 50 years. This is mainly due to the fact that the all new Honda City has ended up costing much more than what was planned at the time of its launch in India.

5.1.3

FAMILY STATUS:

Table 1.3

Frequency

Percentage

Married (With Kids)

161

80.50%

Married (Without Kids)

27

13.50%

33

Unmarried

12

6%

Total

100

100%

Fig. 1.3

The figure above shows that out of the 200 respondents 161 were married and had kids. Whereas 27 respondents were married but did not have kids. And the rest of the respondents (i.e. 12) were yet unmarried.

5.1.4

EDUCATIONAL QUALIFICATION:

Table 1.4

Frequency

Percentage

Under graduate

6

3%

Graduate

148

74%

Post Graduate

34 46

23%

Total

200

100%

Fig. 1.4

The data above shows that 148 out of 200 all new Honda City customers were Graduates, whereas 46 customers were Post Graduates & only 6 customers were Under Graduates.

5.1.5

OCCUPATION:

Table 1.5

Frequency

35

Percentage

Business

139

69.50%

Service

38

19%

Self-Employed

19

9.50%

Students

4

2%

Total

200

100

Fig. 1.5

As shown above out of 200 respondents, 139 respondents were businessmen, 38 respondents belonged to the service class, 19 respondents were self employed (i.e. were professionals such as Charted Accountants, Doctors, Lawyers etc.). One of the main reasons behind businessmen being the major buyers of the All New Honda City could be the higher average income of the businessmen in India i.e. around Rs.1,00,000 per annum(Source: Invest India Incomes & Savings Survey 2007)

5.1.6

Monthly Household Income: 36

Table 1.6

Level of income

Frequency

Percentage

50,000-75,000

37

18.5%

75,001-1,00,000

96

48%

1,00,001-1,25,000

55

27.5%

1,25,001-1,50,000

11

5.5%

1,50,001-1,75,000

0

----

More than 1,75,000

1

0.50%

Total

100

100%

Fig. 1.6

As shown in the above graph, nearly half of the customers lie in the income segment of Rs.75,001 to 1,00,000 and more than 27% of the customers belong to the income of Rs.100,001 to 1,25,000.

37

In India where more than 25% of the people live below the poverty line (Source: CIA Factbook 2008) and the average income is only around Rs.29500 (Source: Financial Express) this car (costing more than Rs.7.5 lakhs) seems to cater an extremely small segment of customers.

5.1.7 BUDGET DECISION: Table 1.7(a) Frequency Percent Valid Percent

Cumulative Percent

Pre decided

154

77.0

77.0

77.0

Not decided

46

23.0

23.0

100.0

200

100.0

100.0

Total

Table 1.7(b) Amount 6,00,00 to 8,00,000 8,00,001 to 10,00,000 10,00,001 to 12,00,000 Total

Frequency 12 76 66 154

Percentage 7.8% 49.3% 42.9% 100%

38

Fig. 1.7(b)

Table 1.7(a&b) and Fig. 1.7 (a&b) show that 77% of the respondents decided their budget before going to purchase the car and out of these nearly 50% of the people had set their budgets between Rs.8,00,000 to Rs.10,00,000.

5.1.8 DRIVING SCENARIO:

Table 1.8

Percent

Valid Percent

Cumulative Percent

139

69.5

69.5

69.5

Chauffer

45

22.5

22.5

92.0

Family members

16

8.0

8.0

100.0

Total

200

100.0

100.0

Driver

Frequency

Myself

39

Fig. 1.8

As shown above nearly 70% of the respondents interviewed drive their car on their own, whereas for around 22% of the respondents their car was driven by the chauffers (drivers).

5.2ANALYSIS OF CUSTOMER PROFILE: By analyzing the data collected above, it can be said that usually the profile of an all new Honda City customer would look as follows: The Customer would usually be a Male, who belongs to the age group of 41 to 50 years, is married and has kids. He would usually be a Graduate who runs his own business and earns a monthly income of around Rs. 75,000 to 1,00,000(or higher). The analyses also show that while buying the car the customers have a pre-decided budget of around Rs.8 lakhs to 10 lakhs. The city customers usually drive their car on their own.

40

5.3

Other important information regarding the City customers:

5.3.1 PURCHASE CRITERIA: Key Factors Considered Before Buying A Car: 1. Brand Name: Table 3.1(a) Cumulative Frequency

Percent

Valid Percent

Percent

Yes

126

63.0

63.0

63.0

No

74

37.0

37.0

100.0

200

100.0

100.0

Total

Section I.1 2. Price Of The Car: Table 3.1(b) Cumulative Frequency

Percent

Valid Percent

Percent

Yes

60

30.0

30.0

30.0

No

140

70.0

70.0

100.0

Total

200

100.0

100.0

3. Exterior Styling:

41

Table 3.1(c) Cumulative Frequency

Percent

Valid Percent

Percent

Yes

52

26.0

26.0

26.0

No

148

74.0

74.0

100.0

Total

200

100.0

100.0

4. Interior Styling: Table 3.1(d)

Cumulative Frequency

Percent

Valid Percent

Percent

Yes

39

19.5

19.5

19.5

No

161

80.5

80.5

100.0

Total

200

100.0

100.0

5. Performance: Table 3.1(e) Cumulative Frequency

Percent

Valid Percent

Percent

Yes

27

13.5

13.5

13.5

No

173

86.5

86.5

100.0

Total

200

100.0 42

100.0

6.

When the customers were asked that, what were the key factors that they considered while buying the car? i.

126 out of 200 respondents agreed that Brand Name was a key factor that was considered while buying the car.

43

ii.

60 out of 200 respondents said that price of the car was an important while buying the car.

iii.

52 out of all the respondents agreed that Exterior styling was an important criteria while buying the car.

iv.

39 out of 200 respondents considered interior styling to be a key factor.

v.

27 respondents believed that the performance of the car was an important consideration for buying the car.

The possible reason behind the importance of Brand name while purchasing a car is the fact that Brand name is considered an indicator of the performance and quality of the product. It can also be seen that price of the car is also among the top priorities for the price sensitive Indian customer. However the fact that the Brand name comes before the price, shows that the Indian customers are willing to pay lavish amounts if such prices are justified by the quality provided. Similar results were depicted by a research conducted by The National Council of Applied Economic Research in automobile industry, which broke the myth that Maruti 800 (A.C. variant) & Hyundai Santro (A.C. variant with power steering) would not sell due to their high prices. However both the cars were welcomed by the Indian customers with open arms.

5.3.2 Source of Information:

44

Internet Cumulative Frequency

Percent

Valid Percent

Percent

Yes

103

51.5

51.5

51.5

No

97

48.5

48.5

100.0

200

100.0

100.0

Total

Word of mouth Cumulative Frequency

Percent

Valid Percent

Percent

Yes

111

55.5

55.5

55.5

No

89

44.5

44.5

100.0

200

100.0

100.0

Total

45

T.V. Cumulative Frequency

Percent

Valid Percent

Percent

Yes

29

14.5

14.5

14.5

No

171

85.5

85.5

100.0

Total

200

100.0

100.0

As shown above, according to more than 55% of the respondents who were interviewed, while buying a car they consult their friends and family for the information about the car. This shows that Word Of Mouth is the most important source of information for a buyer while buying the car. Word of mouth is considered to be one of the most economical yet immensely important sources of advertisement for any company but in order to spread a positive word of mouth the company needs to provide maximum possible satisfaction & value to the customers.

46

The survey also shows that internet & T.V. were among the other important sources for information. However these forms of media still remain under used in India, by Honda.

5.4 Competitive Analysis: Other cars considered Name of the car Hyundai Verna Sx4 Fiat Linea Chevrolet Optra Accent

Frequency 136 95 63 58 31

47

Percentage 68% 47.5% 31.5% 29% 15.5%

The survey reveals that 68% of the customers considered Hyundai Verna as one of the options while purchasing their cars. According to most of them the main reasons for considering Verna were the Brand Name “Hyundai” & the after sales services provided by the company. The Sx4 was the other most mentioned car and nearly 48% of the people considered it as a purchase option. They found the sporty & masculine look of the car very attractive. The new Fiat Linea & Chevrolet Optra were also among the other options considered by the customers. Another reason which was given unanimously, in the favour of these cars, was that all of these cars came with a diesel variant. However, Honda still does not have a diesel car in their line up.

5.5 Analysis Customer Satisfaction: 5.5.1 Audio System:

48

Level of satisfaction from the audio system Cumulative Frequency

Percent

Valid Percent

Percent

N/A

15

7.5

7.5

7.5

Highly satisfied

28

14.0

14.0

21.5

113

56.5

56.5

78.0

22

11.0

11.0

89.0

16

8.0

8.0

97.0

6

3.0

3.0

100.0

200

100.0

100.0

Satisfied Neither satisfied nor dissatisfied Dissatisfied Highly dissatisfied Total

Fig. 5.1

49

The customer survey revealed that out of all the respondents, more than 56% of the respondents were satisfied with the performance of their cars audio system and 14% of them were highly satisfied. Whereas around 11% of the respondents were indifferent towards the same. Another 8% of the respondents were dissatisfied with the performance and 3% of them seemed to be highly dissatisfied. The leftover 7.5% of the respondents did not comment as they owned the 1.5E variant of the all new Honda City which does not have an audio system. Despite the high rate of satisfaction among the respondents, regarding the performance & sound quality of the audio system, more than 78% of the respondents complained about the absence of a CD/Cassette player in 1.5 S(MT & AT). And almost all the 1.5E variant owners suggested that an audio system should be added to the car as a basic feature.

5.5.2 Overall Styling & Features:

50

Frequency of Scores allotted (in percentage) Features

1

2

3

4

5

Exterior Styling

---

---

46%

53.50%

0.50%

Interior Styling

---

---

51%

49%

---

Spaciousness

---

---

43%

57%

---

Riding Comfort

---

---

43.50%

56%

0.50%

Safety

---

---

46%

54%

---

Image

---

1.50%

43.50%

54.50%

0.50%

Handling

---

---

39.50%

60.50%

---

Fuel Efficiency

---

---

57%

43%

---

Fig 5.3

51

When the customers were asked to score the main features of their all new Honda City on a scale of 1 to 5. The above responses were observed by the researcher. On the basis of the data collected above it can be seen that almost everybody is happy with the main features of the car.

52

5.5.3 Additional features: Table S. NO.

Requested Feature

Frequency

Percentage

Price willing to pay(in Rs.) Nil (Free of cost) 12,000 to 15,000

1.

CD/Cassette player

197

98.5%

2.

Alloy Wheels

191

95.5%

3.

Side Air Bags Rear Parking Sensors

132

66%

5,000 to 7,000

96

48%

Navigation

82

41%

1,800 to 3,000 10,000 to 15,000

4. 5.

When the respondents were asked whether they would like some new features to be introduced as standard to their all new Honda City & the price they were willing to pay for the same, the researcher found the above stated results.

53

Although both the CD/Cassette player & the Alloy wheels are available in the accessory packages provided by Honda, the customers feel that both the things are being sold at a very high price. The cost of alloy wheels in the accessory package is Rs.42,000 while they are available in the aftermarket for Rs.15,000 to 20,000. 5.5.4 Exterior Styling of the Car:

Front styling Cumulative Score

Frequency

Percent

Valid Percent

Percent

3

84

42.0

42.0

42.0

4

115

57.5

57.5

99.5

5

1

.5

.5

100.0

Total

200

100.0

100.0

Side styling Cumulative Score

Frequency

Percent

Valid Percent

Percent

3

103

51.5

51.5

51.5

4

95

47.5

47.5

99.0

5

2

1.0

1.0

100.0

200

100.0

100.0

Total

54

Rear styling Cumulative Score

Frequency

Percent

Valid Percent

Percent

3

83

41.5

41.5

41.5

3.5

1

.5

.5

42.0

4

116

58.0

58.0

100.0

Total

200

100.0

100.0

55

The results show that almost all the respondents were happy with the styling and exterior looks of the car. As none of the respondents rated the car below 3 on a scale of 5. Due this fact the All New Honda City has also won the UTV Autocar award 2009 for the best design.

5.5.5 Interior Styling: (a) Accessing from the Driver’s seat:

Interior colour scheme Cumulative score

Frequency

Percent

Valid Percent

Percent

3

126

63.0

63.0

63.0

4

74

37.0

37.0

100.0

Total

200

100.0

100.0

56

Instrumental Panel (Design & Visibility) Score 3 4 5 Total

Frequency 100 99 1 200

Cumulative Percentage 50% 99.50% 100%

Percentage 50% 49.50% 0.50% 100%

Seating posture Cumulative Score

Frequency

Percent

Valid Percent

Percent

3

100

50.0

50.0

50.0

4

100

50.0

50.0

100.0

Total

200

100.0

100.0

Leg & Head Room Score 3 4 5 Total

Frequency 100 99 1 200

Percentage 50% 49.50% 0.50% 100%

Cumulative Percentage 50% 99.50% 100%

Audio (Performance & Control) Score 3 4

Frequency 125 74

Percentage 62.50% 37% 57

Cumulative Percentage 62.50% 99.50%

5 Total

1 200

0.50% 100%

100%

Air conditioner Score 2 3 4 5 Total

Frequency 5 74 118 3 200

Cumulative percentage 2.5% 39.5% 98.5% 100%

Percentage 2.5% 37% 59% 1.5% 100%

Road Visibility Cumulative Score

Frequency

Percent

Valid Percent

Percent

3

85

42.5

42.5

42.5

4

113

56.5

56.5

99.0

5

2

1.0

1.0

100.0

200

100.0

100.0

Total

58

When the customers were asked to mark certain interior features of their all new Honda city on a scale of 1 to 5, they gave the above stated responses. The results show that although the customers are happy with these features, some customers have complained about the inefficient performance of the air conditioner. According to such people the cooling of the air conditioner does not match their expectations.

(b) Accessing from the rear seat:

Rear seat comfort Score

Cumulative Frequency

Percent

Valid Percent

Percent

3

108

54.0

54.0

54.0

4

91

45.5

45.5

99.5

5

1

.5

.5

100.0

200

100.0

100.0

Total

59

Shoulder & Leg Room

Score

Frequency

Percentage

3 4

104 96 200

52% 48% 100%

Cumulative Percentage 52% 100%

Cabin space Cumulative Score

Frequency

Percent

Valid Percent

Percent

3

115

57.5

57.5

57.5

4

84

42.0

42.0

99.5

5

1

.5

.5

100.0

200

100.0

100.0

Total

A.C. Cumulative Score

Frequency

Percent

Valid Percent

Percent

2

1

.5

.5

.5

3

70

35.0

35.0

35.5

4

126

63.0

63.0

98.5

5

3

1.5

1.5

100.0

200

100.0

100.0

Total

60

Audio System Cumulative Score

Frequency

Percent

Valid Percent

Percent

3

89

44.5

44.5

44.5

4

110

55.0

55.0

99.5

5

1

.5

.5

100.0

200

100.0

100.0

Total

61

While scoring the interior features in context to the rear seat although most of the customers seemed to be satisfied, some very unhappy with the performance of the air conditioner. A similar response from respondents was seen while accessing the performance from the rear seat.

5.5.6 Luggage Space: Frequency of using luggage space Cumulative Frequency

Percent

Valid Percent

Percent

Very often

11

5.5

5.5

5.5

Often

54

27.0

27.0

32.5

Sometimes

52

26.0

26.0

58.5

Rarely

49

24.5

24.5

83.0

Very rarely

34

17.0

17.0

100.0

200

100.0

100.0

Total

62

Frequency of using luggage space & Spaciousness Spaciousness Frequency of using luggage space

3 Very often

4

5

Total

2

8

1

11

11

40

3

54

9

40

3

52

Rarely

16

30

3

49

Very rarely

16

17

1

34

54

135

11

200

Often Sometimes

Total

Frequency of using luggage space & Ease of Loading& Unloading Frequency of using luggage space

Ease of Loading& Unloading 3

4

5

Total

Very often

2

5

4

11

Often

14

37

3

54

Sometimes

19

28

5

52

Rarely

23

20

6

49

Very rarely

16

18

0

34

Total

74

108

18

200

63

As shown above, 9% to 10% of the respondents who use the luggage space very often, marked the spaciousness of the luggage cabin as 5 out of 5, whereas 6% of the respondents who either use the space often, sometimes or rarely also marked the luggage cabin a 5 on 5. This shows that out of all the respondents the maximum customers who were highly satisfied with the space provided were the people who used it very often, which means that the space is large enough to satisfy the very frequent users.

64

According to data collected above, nearly 36% of the very frequent users (of the luggage cabin) have marked the luggage space a 5 on 5 for the ease of loading & unloading the luggage in the space provided. As the people who make use of this space very frequently can be the best source of knowing about the ease or difficulty involved in loading or unloading the good, we can assume that the luggage cabin has been designed in such a way that it is very convenient to load or unload luggage in the cabin.

5.5.7 Performance Of The Car:

65

Performance of the car Cumulative Frequency Powerful Adequately powerful Under power Total

Percent

Valid Percent

Percent

66

33.0

33.0

33.0

118

59.0

59.0

92.0

16

8.0

8.0

100.0

200

100.0

100.0

66

Nearly 60% of the respondents considered the all new Honda City to be an adequately powerful car, and another 33% of the respondents consider the car to be really powerful. The main reason behind could be the use of the Japanese technology & the 1.5L i VTEC engine which delivers 118 PS.

5.5.8 Overall Performance:

Engine performance Cumulative Score

Frequency

Percent

Valid Percent

Percent

3

79

39.5

39.5

39.5

4

121

60.5

60.5

100.0

Total

200

100.0

100.0

Transmission(Gear) Cumulative Score

Frequency

Percent

Valid Percent

Percent

3

97

48.5

48.5

48.5

4

101

50.5

50.5

99.0

5

2

1.0

1.0

100.0

200

100.0

100.0

Total

67

Suspension Cumulative Score

Frequency

Percent

Valid Percent

Percent

2

1

.5

.5

.5

3

117

58.5

58.5

59.0

4

82

41.0

41.0

100.0

Total

200

100.0

100.0

68

Mileage Cumulative Score

Frequency

Percent

Valid Percent

Percent

2

1

.5

.5

.5

3

123

61.5

61.5

62.0

4

72

36.0

36.0

98.0

5

4

2.0

2.0

100.0

Total

200

100.0

100.0

Brake Cumulative Score

Frequency

Percent

Valid Percent

Percent

3

92

46.0

46.0

46.0

4

105

52.5

52.5

98.5

5

3

1.5

1.5

100.0

Total

200

100.0

100.0

69

Noise & Vibration Cumulative Score

Frequency

Percent

Valid Percent

Percent

1

1

.5

.5

.5

3

91

45.5

45.5

46.0

4

106

53.0

53.0

99.0

5

2

1.0

1.0

100.0

Total

200

100.0

100.0

70

According to the survey nearly every respondent has ranked the all new Honda City, atleast a 3 out of 5. This shows that almost all the customers are happy with the performance of their car.

71

5.5.9 Safety Features: (a) Importance of Safety Aspect Of a car :

Significance of safety Cumulative Score

Frequency

Percent

Valid Percent

Percent

70

35.0

35.0

35.0

Important

121

60.5

60.5

95.5

Not important

9

4.5

4.5

100.0

Total

200

100.0

100.0

Very important

72

When the customers were asked about the significance of the safety aspect of the car, more than 95% of the customers’ rated safety as very important or important.

(b) Awareness about the safety features of the City:

Awareness of safety features Cumulative Frequency

Percent

Valid Percent

Percent

Yes

89

44.5

44.5

44.5

No

111

55.5

55.5

100.0

Total

200

100.0

100.0

73

The survey revealed that although 60.5% & 35% of the customers considered the safety aspect of a car to be important & very important respectively, more than 55% of the respondents were not even aware about the safety features of the car, and out of the rest, the most recalled feature were the Air Bags. This is not good from the company’s prospective as the company makes huge investments to make the cars as safe as possible by using the latest technology. But has not been able to generate the awareness among the customers for the same.

5.5.10 Pricing Of The Car:

Is Honda City "value for money" Cumulative Frequency

Percent

Valid Percent

Percent

Strongly agree

43

21.5

21.5

21.5

Agree

88

44.0

44.0

65.5

37

18.5

18.5

84.0

32

16.0

16.0

100.0

200

100.0

100.0

Neither agree nor disagree Disagree Total

74

When the respondents were asked if they thought that all new Honda City was value for money, nearly 21% of the respondents said that they strongly agreed whereas another 44% of them said that they agreed. However around 19% of the customers were not sure and the rest 16% disagreed with the statement. This means that nearly 35% of the customers are either not sure or think that the car is overpriced.

5.5.11 Accessory Package: (a) Awareness & Response: Did you purchase it Awareness

No

Yes

Total

Yes

31

20

51

No

149

0

149

180

20

200

Total

75

This survey shows that out of all the respondents only 51(i.e.25.5%) respondents were aware about or had knowledge about the accessory package being offered by the company. And out of those who were aware only 20 (i.e. 10% of the total no. of respondents) actually bought the accessory package.

Another 15.5% of the respondents who were aware about the accessory packages but did not buy it. The major reasons given by these people for not buying the packages were:

i) Although they thought that the Elegance pack consisted of utility accessories, but

they believed that the same should be provided by the company as standard features. They also felt that the same accessories could be bought from the market at much reasonable price. ii) According to them, the accessories provided in the Illumination pack have mere

decorative value and provided no utility.

(b) Is the accessory package “Value for money”:

76

"Value for money" Awareness about accessory package

N/A

Strongly agree

Agree

Disagree

Total

Yes

31

4

7

9

51

No

149

0

0

0

149

Total

180

4

7

9

200

The graph above shows that, out of 31 customers who were aware about the accessory pack, 20% strongly believed that the pack was “value for money” and 30% of them also agreed to the same. However, the rest 45% of the respondents believed that the pack was not “value for money”.

5.5.12 Strengths & Shortcomings of the car: Strengths Strengths Styling & Design Brand Name Comfort

Frequency 124 112 74

77

Percentage 62% 56% 37%

When the respondents were asked to name any three strengths of the all new Honda City, 62% of the customers stated that the styling & design of the car were its biggest strengths. This shows that the new Arrow Shot Design that was introduced by the company has been successful to attract the customers. However, nearly 56% of the customers thought that the Brand Name “Honda” was the biggest strength of the car and the main reason for its success. Whereas 37% of the respondents mentioned overall comfort as one of the strengths of the all new Honda City.

Weakness Weakness Low Ground Clearance

Frequency

Percentage

73

36.5%

Light Weight

54

27%

78

According to the survey, although most of the people seemed to be happy with the performance of the car, but when asked to mention a weakness about the car nearly 37% of the customers showed concern about the low ground clearance of the car.This concern of the customers is justified if we look at the ground clearance provided by the other competitive cars: Name of the Competitive Car Ground Clearance Hyundai Verna 170(mm) Sx4 180(mm) Fiat Linea 165(mm) Whereas, the ground clearance of Honda City is just 160(mm) which is less than all its competitors. However here it is worth mentioning that, HSCI has taken a step and requested RTOs to release a regulation specifying the dimensions and designs of the speed breakers for each state, across the country. Another 27% of the respondents pointed that the light weight of the car made it look unsafe. But according to the company the light weight helps in providing more fuel efficiency & the GCON Design of the car helps in providing maximum possible safety to the passengers, despite the light weight of the car.

5.6 Findings: The major findings of the project are as follows: Customer Profiling: 1. 2. 3. 4. 5.

87.5% of the respondents were male. 36.5% of the respondents belonged to the age group of 41 to 50 years. 80.5% of the respondents were married and had kids. 74% of the respondents were graduates. 69.5% of the customers were businessmen. 79

6. 48% of the City customers earned a monthly income of around Rs.75,001 to 1,00,000. 7. 77% of the customers had a pre-decided budget in their mind before purchasing the car, and out of these nearly 50% of the people had decided a budget of around 8,00,000 to 10,00,000. 8. 69.5% of the respondents drive their car on their own. Other important information regarding the City customers: 9. 63% of the respondents considered the Brand Name of the car, to be the key consideration while buying a car. 10. According to 55.5% of the respondents word of mouth was the main source of information about the cars. Competitive Analysis: 11. 68% of the respondents considered Hyundai Verna as an option while buying their car. Satisfaction from the cars, its features & performance: 56.5% of the customers were happy with the performance of the audio system of the car, whereas 8% of the customers were found to be dissatisfied. 13. 60.5% & 54.5% of the customers scored the all new Honda City a 4 out 5 for its handling & Image, respectively. 14. 98.5% of the customers requested for a CD/cassette player to be provided in the car as a basic feature and 95.5% of the customers wanted alloy wheels to be added to the car. 15. 57.5% & 58% of the respondents rated the all new Honda City as 4 out of 5 for the front & rear styling, respectively. Whereas 51.5% of them gave the side styling a 3 out of 5. 16. Almost all the respondents were happy with the interior styling and design of the car. However, only some people showed signs of discontentment with the performance of the A/c of the car. 17. No respondent gave the car less that 3 out of 5 for the luggage space or for the ease of using it. 18. 59% of the customers thought that the car had adequate power. 19. As far as the overall performance of the car is concerned, only 1 respondent out of 200 gave the car a 2 out of 5 for its millage & suspension and only 1 customer gave the car 1 out of 5 for the unwanted noise & vibration. Rest all the customers seemed to be very pleased with the overall performance of the car. 12.

Safety features & the car:

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20. 60.5% of the respondents considered the safety aspect of the car to be very important. 21. 55.5% of the customers were unaware about the advanced safety features of the all new Honda City. Pricing of the car: 22. Although 44% of the respondents agreed that the all new Honda City provides value for money, nearly 16% of them also thought that it was overpriced. Accessory Package- Awareness & Purchase: 23. Only 25.5% of the respondents were aware about the availability of the accessory packages. 24. Only 10% of the total number of respondents actually bought the accessory package. 25. Out of those respondents who bought the accessory package 35% think that the package is not value for money. Strengths & Weaknesses of the car: 26. 62% of the respondents believe that the styling & design of the car are its biggest strengths. Whereas 56% of them think that the Brand Name “Honda” is the cars main strength and 37% of them thought that the comfort provided by the car was its main strength. 27. According to 36.5% of the respondents low ground clearance of the car was its main drawback, whereas 27% of them thought that the light weight of the car was it main flaw.

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5.6 Limitations:

The limitations of the survey as perceived by the researcher are as follows:

1. The sample size of the survey was very small and accounted to even less than 2% of the total target population (total all new Honda City customers). 2. The scope of survey was limited to Delhi and NCR. 3. As the questionnaire was lengthy and time consuming, the respondents often lost interest and became impatient. Hence the answers given by them may suffer from biasness. 4. Some of the open-ended questions were subject to the knowledge of and interpretation by the researcher. 5. Most of the respondents had used the car for a period of less than six-months, therefore their level of satisfaction from the car is expected to fall with the passage of time. 6. The limited knowledge of the research in the field of research was another limitation related to this survey.

82

CHAPTER VI: Recommendations & Conclusions

83

6.1 Recommendations: On the bases of the findings of the survey conducted, the researcher made the following suggestions and recommendations to the Honda Siel Cars India Ltd. : 1. The all new Honda City has not been able to attract younger audience, as planned by the company at the time of the launch of the car. This is mainly due to the high price of the car. Therefore the company must reduce the price of the car, if it wishes to attract the younger segment of the market. 2. In order to penetrate deeper into the market of a developing country like India, where the consumers have limited resources, the company should try and study the possibility of introducing a Low Priced Variant of the car. 3. Company should adopt new marketing strategies and programmes in order to strengthen the brand “Honda”, as the Brand name seems to be the major criteria for purchasing a car. 4. While all the major competitors of the all new City offer a diesel variant, HSCI still does not have anything to offer in the same respect. Thus the company should study the possibility of introducing a diesel variant in the line up, keeping in mind the high initial cost of the diesel engine and it should also try and take steps to reduce the gap between the usage of petrol & diesel. 5. An audio system should be provided as a basic feature in the 1.5E variant of the car and a CD/Cassette player should be added to the audio system of the 1.5S variant, as these were the strongly requested in the Most Wanted Features. 6. Although alloy wheels are available as a part of the accessory package customers have strongly requested that they should be provided with the car as a standard accessory. Moreover the alloy wheels in the accessory package cost Rs.42,000, whereas they are available in the aftermarket for just Rs. 15,000 to 20,000. Thus HSCI not only needs to reduce the price of the alloy wheels present in the accessory package but also needs to study the possibility of

84

providing them as a standard accessory without charging extra from the customers. 7. Measures should be taken to improve the performance of the air conditioner provided in the car, as some of the respondents seemed to be dissatisfied with it. 8. The company needs to undertake strong steps to educate the customers about the advanced safety features present in the car, because although a large number of customers consider the safety aspect of a car to be important or very important more than 55.5% of them are unaware about the safety features present in the car. 9. As a large number of customers were either not sure or did not consider the all new Honda City to be “value for money”, the company needs to change this perception of the customers by either (i) reducing the price of the car or (ii) adding more features to the car. 10. Serious measures need to be taken for informing customers about the availability & utility of the accessory packages, as nearly 75% of the present customers are unaware about the same. Thus the company should try and encourage the dealers to promote and sell the accessory packages to the customers. 11. Although the customers appreciate the Elegance Pack they feel that it is overpriced (the elegance package costs: Rs. 23,000). Moreover they feel that the accessories which are being provided in the package should be provided as standard features. Therefore the company not only needs to reduce the price of the accessories but should also try and provide some of the accessories as a basic feature without charging extra. 12. The customers feel that the illumination package has only decorative value and no utility. Moreover the lighting effect of the accessories provided in the package can only be seen in the dark. In order to solve this problem, the company should ask the dealers to make arrangements such as a dark room, where the customers can actually experience the special effects of the accessories. The company should also try and explain the actual utility of the package. 13. The main product concern faced by HSCI is the low ground clearance of the car. Therefore company must take required steps in order to overcome this problem. 85

14. Customers have also complained about the light weight of the car, due to which the structure of the car seems to be unsafe. In order to change this mind set of the people the company must take steps to educate and inform its customers about the G-CON technology which has been used in the making of the structure of the car and how it helps in making the car safe, despite its light body weight. The company should also inform the customers how comparatively lighter weight of the car makes it fuel efficient.

6.2 CONCLUSION

Although, post decentralisation in 1991, the auto industry in India has grown at a commendable average rate of 17%, the increase in international as well as domestic completion has made it a buyer’s market rather than a seller’s one. Today the customers have wide brand & model choice, and with the rising income levels, especially among young adults, coupled with the low equal monthly instalments (EMIs) almost all these international and domestic brands & models have come within the reach of the customers. In order to survive in this highly competitive market the companies not only need to increase the number of head count of the customers but also needs to retain the present set of customers. For this, an in-depth study of the consumer behaviour and their likes & dislikes is required. The project titled “Analysis Of New Honda City Customer Profile & Satisfaction Level” was a step towards providing the Honda Siel Cars India Ltd. with the detailed profiles of the Honda City customers and an insight about the level of satisfaction among the customers. This study reveals that the Brand name “Honda” was the basic reason for the customers to choose the all new Honda City. A large majority of customers are happy with the interior & exterior features & luggage cabin of the car. However, some customers exhibited 86

dissatisfaction towards the performance of the air-conditioner of the car. The customers also appreciated the handling, mileage and suspension of the car. It was also found that almost all the customers strongly feel that the alloy wheels and the CD/Cassette player should be provided as a basic feature of the car and majority of them also showed concern regarding the lower ground clearance and lighter weight of the car. The company should therefore consider the above stated points in order to serve the customers more effectively and efficiently, as it would not only help the company in retaining its existing customers but would also help in increasing its market share.

CHAPTER VII: Annexure 87

Annexure I Questionnaire Q1. Name____________ Q2. Gender i. ii.

Male Female

Q3. Age: Q4. Family status: i. Married (with kids) ii. Married (without kids) iii. Unmarried Q5.Educational qualification: i. Undergraduate ii. Graduate iii. Post graduate iv. None of the above Q6. Occupation 88

i. ii. iii.

Business Service Self employed

Q7. Mode of payment: i. Cash ii. Credit iii. Both Q8.Re payment period i. 6 – 12 months ii. 13 – 18 months iii. 19 – 24 months iv. 25 – 30 months v. 31 – 36 months vi. More than 36 months

Q9. What does your car mean to you? (Multiple choice) i.

Companion

ii.

1St love

iii.

2nd home

iv.

Best friend

v.

Most prized Possession

vi.

Someone you can rely on

vii.

Basic need

viii.

Other

Q10. What prompted you to buy a car? i.

Tired of previous car

ii.

Previous car had trouble

iii.

Better off now economically

iv.

Family structure changed 89

v.

Received as a gift

vi.

Became necessary for work

vii.

I/ family member got a drivers license

viii.

Company gave me a car

ix.

Became necessary for commuting

x.

Wanted my own car

xi.

Disappointed with the previous car dealer

xii.

Purchase conditions improved

xiii.

Maintenance cost of previous car was high

xiv.

Had given the previous car to my family member

xv.

Other

Q11. Key factors before buying a car i.

Brand name

ii.

Price of the car

iii.

Exterior styling

iv.

Interiors

v.

Driving comfort

vi.

Riding comfort

vii.

Spaciousness of the cabin

viii.

Luggage capacity

ix.

Performance

x.

Ease of handling

xi.

Safety

xii.

Fuel efficiency

xiii.

After sales services 90

xiv.

Cost of spare parts

xv.

Other

Q12. Which were the other cars that you considered before buying the all new Honda City? What were the reasons for considering them & rejecting them? S. No.

Name

Price

Reason for consideration

Q13. Where did you get the information about the new Honda city? i.

Newspaper

ii.

Television

iii.

Internet

iv.

Banners/ hoardings

v.

Friends/ family

vi.

Road shows

Q14. Key reasons for buying the new Honda City i.

Brand name

ii.

Affordable price

iii.

Exterior styling

iv.

Variety of colours available

v.

Interior spaciousness

vi.

Driving riding comfort

vii.

Safety features

viii.

Fuel efficiency 91

Reason for rejection

ix.

Power

x.

Technology used

xi.

I VTEC engine

xii.

Dealers’ network

xiii.

Good salesmanship

xiv.

After sales services

xv.

Positive feedback from family/friends

xvi.

Other

Q15. Which variant? i.

1.5 (MT)

ii.

1.5S (MT)

iii.

1.5S (AT)

Q16. Why did you choose this question? i.

Economic constraint

ii.

Better social image

iii.

Convenience

iv.

Suited my budget

v.

Other

Q17. Did you decide your EMI before buying your car? i.

Yes

ii.

No

Q18. Who drives your Honda city? i.

Myself

ii.

Chauffer 92

iii.

Family & friends

iv.

All of the above

Q19. During weekdays your car is used for i.

Business purpose

ii.

By family

iii.

Travel and work

iv.

Other

Q20. During weekends your car is used for i.

Social visits

ii.

Shopping

iii.

Long drives

iv.

Other

Q21. How often do you use your audio system? i.

Very often

ii.

Often

iii.

Sometimes

iv.

Rarely

v.

Very rarely

Q22. How satisfied are you with the audio system? i.

Highly satisfied 93

ii.

Satisfied

iii.

Neither satisfied nor dissatisfied

iv.

Dissatisfied

v.

Dissatisfied

Q23. Rank the following features on scale of 1 – 5 i.

Exterior styling

ii.

Interior styling

iii.

Spaciousness

iv.

Riding comfort

v.

Safety

vi.

Image

vii.

Handling

viii.

Fuel efficiency

Q24. Are there any features that you think should be added to the all new Honda City? If yes, then at what cost? S. No.

Additional Features

1

Alloy wheels

2

Fog lamps

3

Side protectors

4

Bumper protectors

5

Leather seats

6

Side airbags

7

Rear centre arm rest

8

CD/Cassette player 94

Price Charged

9

Navigation

10

Blue tooth

11

Rear parking sensors

12

Any others: -------------------------------------------------------------------------------------------------

Q25. What do you think about the exterior design of the new Honda city? i.

Arrow short form

ii.

Stylish

iii.

Classy

iv.

Trendy

v.

Advanced

vi.

Scientific

vii.

Other

Q26. Rate the following on a scale of 1- 5 i.

Front styling

ii.

Side styling

iii.

Rear styling

Q27. When seated on the driver’s seat rank the following on a scale of 1 – 5 i.

Interior colour scheme

ii.

Visibility of instrument panel

iii.

Dashboard design

iv.

Seating posture 95

v.

Leg room

vi.

Head room

vii.

Access to audio control

viii.

Audio system

ix.

Air conditioning

x.

Road visibility

Q28. When seated on the rear seat rank the following on a scale of 1 – 5 i.

Rear seat comfort

ii.

Shoulder room comfort

iii.

Leg room

iv.

Cabin space

v.

Air conditioning

vi.

Audio system

Q29. How often do you use your luggage space? i.

Very often

ii.

Often

iii.

Sometimes

iv.

Rarely

v.

Very rarely

Q30. Rate the luggage space on a scale of 1 – 5 i.

Spaciousness of the luggage cabin

ii.

Ease of loading and unloading

Q31. What has been your overall impression about the performance of the new Honda city? i.

Powerful

ii.

Adequately powerful 96

iii.

Under power

Q32. Rate the following on a scale of 1 -5 i.

Engine performance

ii.

Transmission

iii.

Mileage

iv.

Suspension

v.

Brake

vi.

Noise/ vibration

Q33. In your opinion how important is the safety aspect of the car i.

Very important

ii.

Important

iii.

Not important

Q34. Are you aware about the safety features of the new Honda city? i.

Yes

ii.

No

Q35. If yes, could you name any 3 safety features of the car? i. ____________________ ii. ____________________ iii. ____________________ Q36. All new Honda city is value for money? i.

Strongly agree

ii.

Agree

iii.

Neither agree nor disagree 97

iv.

Disagree

v.

Strongly disagree

Q37. Are you aware about the new accessory package of the new Honda city? i.

Yes

ii.

No

Q38. If yes then did you buy the accessory package? i.

Yes

ii.

No

Q39. If yes then then which one did you buy? i.

Elegance

ii.

Illumination

Q40. How satisfied are you with the accessory package bought by you? i.

Highly satisfied

ii.

Satisfied

iii.

Neither satisfied nor dissatisfied

iv.

Dissatisfied

v.

Highly dissatisfied

Q41. Do you think the accessory package is “value for money”? i.

Strongly agree

ii.

Agree

iii.

Neither agree nor disagree

iv.

Disagree

v.

Strongly disagree

98

Q42. How has your overall experience with the new Honda city been? i.

Strongly agree

ii.

Agree

iii.

Neither agree nor disagree

iv.

Disagree

v.

Strongly disagree

Q43. The 3 major reasons for your satisfaction with your car are: i. __________________________________ ii. __________________________________ iii. __________________________________

Q44. Is there any dissatisfaction point with your Honda city? i.

Yes

ii.

No

Q45. If yes, could you please tell us the main reason for your dissatisfaction: _________________________________________________________ _________________________________________________________ Q46. Would you like to continue your relationship with Honda in future? i.

Yes

ii.

No

iii.

Can’t say 99

Q47 what’s your monthly income? i.

50,000 – 75,000

ii.

75,001 – 1, 00,000

iii.

1, 00,001 – 1, 25,000

iv.

1, 25, 001 – 1, 50,000

v.

1, 50,001 – 1, 75,000

vi.

More than 1, 75,000

vii.

Other

Annexure II References

 Websites iv. www.hondacarindia.com v. www.academon.com/lib.html vi. www.hclibrary.org/ vii. www.fadaweb.com viii. www.icra.in/ ix. www.google.com

 Journals & Magazines i.

Overdrive Magazines, March 2009 Edition

ii.

Autocar India, March 2009 Edition

iii.

CRISIL journals

iv.

Broachers by SIMA

100

 Books i.

Peter Druker: A critical commentary on his philosophy of management,by C. Northcotr Parkison, Pg.287

ii.

Realities of management by John Marsh, glossary, Pg-389

iii.

Consumer Behaviour by LeonG. Schiffman,9th Edition, Glossary, G-3

iv.

Marketing Management by Philip Kotler, 11th Edition, Chapter3, Pg.70

v.

Customer satisfaction by P. Parker, Chapter1, Pg-5

101