Chapter-4

Research
Methodology
 Chapter - 4

Research methodology

The idea of this chapter is to draw the broader understanding on the research
methodology that has been used to conduct this research work. This chapter
explains research approach, and the research strategy used in this thesis.
Furthermore, the data collection, sample selection, questionnaire design, the ways to
evaluate the validity and reliability of the obtained results will be discussed. For this
study reliability test, descriptive statistics, T- test, ANOVA, Chi-Square and Factor
analysis were used to analyze data. Beside Excel 2010, SPSS 17.0.0 package was
used to perform required calculations. Construct validity of measures was
determined for the validation of an instrument. For accurate relationship, among
variable construct validity of measures is exceptionally important and it depends on
the aptitude of the researcher to appropriately measure the variables. Cronbaeh’s
alpha was calculated to detennine the internal reliability of the tool.

4.1 Research Approach

4.1.1 Qualitative versus Quantitative Approach

Empirical research relies on experience or observation alone, often without due

regard for system and theory. It is data-based research, coming up with conclusions
which are capable of being verified by observation or experiment. Empirical
research also called as experimental research. Empirical research is appropriate
when proof is sought that certain variables affect other variables in some wa}7.
Evidence gathered through experiments or empirical studies are considered to be
the most powerful support possible for testing a given hypothesis (Kothari, 2009).

Qualitative research is an unstructured, exploratory in nature, , based on small

samples, and may utilize their popular qualitative techniques such as focus groups
(group interviews), word association, and depth interviews( one-on-one interviews
that probe the respondents’ thoughts in detail) (Malhotra & Dash, 2011).

Qualitative Research is especially important in the behavioral sciences where the

aim is to discover the underlying motives of human behavior ((Kothari, 2009)).

148
The quantitative research seeks to quantify the data and, typically, applies some
form of statistical analysis. Whenever a new marketing research problem is being
addressed, quantitative research taken must be preceded by appropriate qualitative
research (Malhotra & Dash, 2011).The data in quantitative approach are numbers
and lends itself to statistical analysis in order to imply the characteristics of
something. This approach provides objectivity because the respondents are the ones
who provide the numbers; therefore researcher's opinion does not have any impact
on testing the hypothesis.

The idea of study started with knowing about branding practices in petro-retailing in
highly developed country and emerging economies. In the process of going through
various study researcher find that India as an emerging economy may replicate the
same idea as market deregulated and customer expectations are changing. For this
study, the deductive approach of study used. In the deductive approach, the
researcher develops a theory or hypothesis and then designs a strategy to test it.
Deduction is a very much planned approach in which there is the hunt to clarify
fundamental relationships and data are quantitative. The data are collected through
samples of adequately large size to simplify the results. As a part of this study some
hypotheses are formulated based on the existing literature and designed a strategy to
test them.

From the above discussion, it can be concluded that qualitative as well as

quantitative approach proves to be suitable for this research as this research aims at
studying the brand building in petro-retailing. Of course the major part of the study
is quantitative in nature. The data in this study was collected through quantitatively
so as to measure correlation among variables and its effects on the dependent
variables. The results are analyzed by descriptive statistics, statistical methods, T-
test, ANOVA, Chi-Square and Factor analysis

4.2 Research Design Classification

Research design is a framework or blueprint for conducting the marketing research

project. It specifies the details of the procedures necessary for obtaining the
information needed to structure and/or solve marketing research problem (Malhotra
& Dash, 2011).

149
4.2.1. Exploratory Research

The exploratory research is one type of research design, which has its primary
objective the provision of insights into and comprehension of the problem situation
confronting the researcher. Exploratory research is used in case where the issue of
the study cannot be measured in a quantitative manner or where the process of
measurement cannot sensibly stand for particular qualities. Exploratory research
may also be used in cases where you must define the problem more precisely,
identify relevant courses of action, or gain additional insights before going on to
confirm findings using a conclusive design (Malhotra & Dash, 2011).

The characteristic of exploratory research is being flexibility with respect to the

methods. Generally, it earned through unstructured questionnaires, small samples
and probability sampling plans. The aim of the researcher is to get new ideas and
for further investigation.

(Parasuraman, ZelthamI, & Berry, 1985)Because the literature on service quality is

not yet rich enough to provide a sound conceptual foundation for investigating
service quality, an exploratory qualitative study was undertaken to investigate the
concept of service quality. Specifically, focus group interviews with consumers and
in-depth interviews with executives were conducted to develop a conceptual model
of service quality.

During the initial phase the research was exploratory design as researcher made an
attempt to understand the research problem while discussing the issues with few
industry experts, plociy makers and dealers/franchisee of the Oil Marketing
companies also consulted dealers to take their inputs. Thus, questionnaire was made
comprehensive covering all. aspects of brand building in petroleum retailing.

4.2.2. Conclusive Research

Conclusive research is typically more formal and structured than exploratory

research. It is based on large, representative samples, and the data obtained are
subjected to quantitative analysis. The findings from this research are considered to
be conclusive in nature in that they are used as input into managerial decision

150
making. Conclusive research designs may be either descriptive or causal (Malhotra
& Dash, 2011).

The descriptive research assumes that researcher has much prior knowledge about
the problem situation. In fact, a major difference between exploratory and
descriptive research is that descriptive research is characterized by the prior /
formulation of specific hypotheses. The Descriptive research is preplanned and
structured and it is typically based on large representative samples. A descriptive
research design specifies the methods for selecting the sources of information data
(Malhotra & Dash, 2011).

Causal research is used to obtain evidence of cause-and-effect (causal)

relationships. Like descripdve research, causal research requires a planned and
structured design. Although descriptive research can determine the degree of
association between variables, it is not appropriate for examining causal
relationships (Malhotra & Dash, 2011).

4.3 Method of Data Collection

(Kothari, 2009) (Malhotra & Dash, 2011)There are two classifications for collected
data which are: primary and secondary data. Primary data can be collected for
example through interview, observation, and questionnaire. On the other hand,
secondary data is the information collected from the studies done before and can be
collected from the various resources.

Questionnaire is considered as one of the most widely used techniques to collect

data within the survey method and since each respondent responds the same set of
questions, it is an competent method of gathering responses from a large sample.
The primary data has been collected from two and four wheeler vehicle owners
through field survey. The primary data has been collected through structured
questionnaire. The design cf questionnaire was done at multi phases. It started with
the identification of variables and factors based on secondary data sources. Later on,
a pilot survey has been done for around 120 customers and based on their feedback,
comments and suggestions a revised questionnaire was designed. During the
designing of questionnaire, researcher also consulted dealers of Oil Marketing
Companies to take their inputs and a few industry experts were also consulted.

151
Thus, questionnaire was made comprehensive covering all aspects of brand building
in petroleum retailing.

(Webb, 2000)Pre-testing, revision and further testing a questionnaire may very well
refine the research tool and increase the reliability of its ability to measure
consistently, but that does not necessarily mean that the validity will also be
increased.
The secondary data was collected from trade journals like Journal of Petroleum
Technology, International Petroleum Refining, DEW-Drilling & Exploration
World, Journal of Marketing etc. Data from Oil Marketing Companies (PSUs &
Private both), Research Organizations and Consulting Firms as also Government
Annual Reports like “Basic Statistics on Indian Petroleum & Natural Gas” Ministry
of Petroleum & Natural Gas etc has been utilized selectively and cautiously.

After selecting the outlets where respondents are to be met, the researcher
personally presented himself to the respondents. The selection of sample was done
at the judgmental and convenience of the researcher and respondents where select
inbound customers were approached and requested for their cooperation in filling
the questionnaire. A few of them were hesitant, another group was busy and not
able to spare time and the others responded well. Questionnaires were handed over
to the respondents and very limited intervention was there on the part of the
researcher in getting it filled. All the respondents were acknowledged then and there
itself.
4.4 Research Instruments (Questionnaire & Interview)
(Miller & Read, 1998) Good questionnaire should meet research objectives, obtain
valid and reliable data from the respondents, facilitate the interviewer’s task and
subsequent data processing and achieve and maintain the involvement of
respondents.

About 30 questions were drawn to make the questionnaire by keeping the objectives
of the study in consideration. Questions were grouped to draw quick data on the
basis of elements like Demographic Variables (questions 1-6), Consumption
Patterns, Brand Awareness and Brand Loyalty (questions 7-14), Factors Influencing

152
the Selection of Petroleum Retail Outlets (questions 15) Preferences on Non Fuel
Products (questions 16) Brand Recall(questions 17-21), Brand Communication
Variables(questions 22-24), Brand Loyalty(questions 25-27), Brand Association,
Customer Experience and Perceived Value(questions 28-30). There were questions
to which the answers were mutually exclusive and for others the answers were
equally likely (more than one option can be marked).

(Webb, 2000)Multiple choice questions present the respondent with a ‘menu’ of

answers from which they can select the one those closest fits their
feelings/positions. In cases where a respondent is likely to have views which do not
fall conveniently into a dichotomous split, multiple choice questions are to be
preferred.
(Webb, 2000)Reliability refers to the consistency in reaching the same result when
the measurement is made over and over again. Validity refers to the degree to which
the question measures what it is supposed to be measuring. A valid measure will
always be reliable, a reliable measure does not guarantee validity, but it is
precondition validity.
(Parikh D. , 2006)In order to test the reliability of the overall instrument,
Cronbach’s coefficient alpha was computed using data on the perceptions, the
expectations, and the differences between the perceptions and expectations.
Researcher has taken due care to make the research process reliable and valid.

4.5 Sample Design

4.5.1 Sampling Techniques
The sample design is basically of two types viz., non-probability sampling and
probability sampling. Non probability sampling is that sampling procedure which
does not afford any basis for estimating the probability that each item in the
population has of being included in the sample. Non-probability sampling is also
known by different names such as deliberate sampling, purposive sampling and
judgment sampling. In other hand, probability sampling is also known as ‘Random
sampling’ or ‘chance sampling’. Under this sampling design, every item of the
universe has an equal chance of inclusion in the sample.

153
Non-probability sampling relies on the personal judgment of the researcher rather
than chance for the sample elements to get selected. Non probability samples may
yield good estimates of the population characteristics (Malhotra & Dash, 2011).
Judgmental and convenience sampling process is used as non-probability sampling
method. The initial research was to understand the management decision problem
and a qualitative exploratory research was conducted through industry expert
interviews and by interviewing dealers of oil marketing companies. Considering the
initial stage of the research and to gain in-depth understanding of the problem, non­
probability sampling method has been found appropriate for the study. Judgmental
and convenience sampling has been done meticulously, considering the layout
design, ambience, location and availability of other factors at the petroleum outlets.

4.5.2 Population and Area

The Indian automotive industry has witnessed significant growth during the first
half of Automotive Mission Plan 2006-2016 (AMP 2016) i.e. FY06 to FY11.
During this period all vehicle segments registered a Compound Annual Growth
Rate (CAGR) in excess of 10%. However, from FY11 the slowdown in global
economy coupled with weakness in the fundamental growth drivers has resulted in
decline in growth across vehicle segments except for two wheelers, which posted a
CAGR of 4.6%. This has resulted in gaps between actual performance of the
industry vis-a-vis targets envisaged under AMP 2Q16.

The turnover of automotive industry was more than 45% of the manufacturing GDP
of India during FY14. The importance of this industry to the national economy can
be seen by way of the size of its turnover compared to India’s GDP and contribution
across several other parameters:

The Indian Petroelum retailing has presence for roughly 50,000 outlets in which
IOCL leads with roughly 45.5 percent of market share followed by 20.6 percent by
BPCL and 18.4 percent by HPCL amng the PSUs outlets (Industry Performance
Review, 2015).

At present in Gujarat out of total 3042 outlets, IOCL leads with 1205 outlets
followed by BPCL WITH 695, HPCL with 676, Essar Oil Limited with 224,

154
Reliance with 223 and Shell with 19 outlets as per the IPR Feb.2015 (Industry
Perfomrance Review, 2015).

Currently in Gujarat in sales of Petrol (MS) and market share is concern, IOCL
leads with 42 percent followed by BPCL and HPCL with 23 percent each, while
Essar Oil Limited with 3.9 percent, Reliance with 2.5 percent and Shell 3.9 percent
only (Industry Perfomrance Review, 2015).

However, in Gujarat in sales of Diesel (HSD) and market share is concern, IOCL
leads with 45 percent followed by BPCL and HPCL with 22 percent each, while
Essar Oil Limited with 3.6 percent, Reliance with 2 percent only. Shell do not sell
diesel at present so no market share. However, the recent deregulation of Diesel as
well will help private OMCs to improve market share substantially (Industry
Perfomrance Review, 2015).

Gujarat is one of the developed states of India where role of branding has its own
importance due to a rich profile of the customers and presence of all Oil marketing
companies (PSU’s and Private both). PSUs have approx 3042 outlets in the state of
Gujarat. Currently Shell has its presence only in six states of India. These are
Karnataka, Tamil Nadu, Andhra Pradesh, Maharashtra, Assam & Gujarat.
Considering the presence of Shell along with other Major Players, in four major
cities of Gujarat viz Ahmedabad, Rajkot, Surat and Vadodara and as Essar and
Reliance are making efforts to settle down in these cities of Gujarat these four cities
has been primarily under the purview of the study. However, Reliance with
Jamnagar refinery which is one of the finest refineries in the Asia has also been
trying to anchor their role in the State in Petroleum retailing, Jamnagar has been
taken into the purview' of the study. Consequently, these five major cities
(Ahmedabad, Rajkot, Surat, Vadodara and Jamnagar) of Gujarat have been
identified for the field survey to accomplish the research objectives.

(Ministry of Heavy Industries and Public Enterprises, 2014) Gujarat as a leading

stae of India contribute 7.1% of India's GDP, 27% of India’s industrial GDP, 4.3%
of overall exports (second only to textiles & handicrafts), 13% of excise revenues.
The states has observed incremental employment generation in excess of 19 million
since FY06 with a total investment in excess of US$ 35 bn of which US$ 24 bn is

155
contributed by automobile companies while US$ 11 bn is contributed by
automotive component companies. Around 8% of the country’s R&D expenditure
also observed in the state and it shows improvement in fuel efficiency of passenger
vehicles resulting in fuel savings of 8.6 bn litres between FY06 and FY14
(CMIE, 2015)As per data released by the Society of Indian Automobile
Manufacturers, automobile sales grew by 8.3 per cent during 2014-15. A total of
23.3 million vehicles were sold during the year as against 21.5 million vehicles sold
during the previous year. Barring commercial vehicles, sales of all the segments
were higher during the year. Sales of passenger vehicles grew by four per cent to
3.2 million units during the year. While sales of passenger cars grew by 3.4 per
cent, that of utility vehicles grew by a faster 10.8 per cent. Two wheeler sales rose
by 9.3 per cent to 18.5 million units during the year. Sales of scooters and
motorcycles were up by 27.2 per cent and 4.3 per cent, respectively. Three wheeler
sales also grew by 12.8 per cent during the year. The commercial vehicles segment
was the only segment to post a fall. In overall data, commercial vehicle sales
declined by 1.3 per cent to 700,743 units. Although sales of medium & heavy'
commercial vehicles (M&HCVs) surged by 17.4 per cent, a 9.9 per cent fall in light
commercial vehicle (LCV) sales dragged the overall commercial vehicles segment
down.

4.5.3 Sampling Unit

The research was pertaining to customers who purchase and consume the product,
dealers who act as a connecting link between Oil Marketing Companies and
customers and Industry experts who help the OMCs in managing the business and
reducing the risk. These three elements have due contributions for growth and
development of OMCs. Since all these elements were consulted to conduct the
preliminary research and then the questionnaire was prepared, the researcher has
identified that the sampling shall be restricted to the customers alone.
Customers profile includes the drivers/owners of two, three and four wheelers
which shall be further identified as auto and taxi, truck, fleet operators corporate '

customers and individuals.

156
4.5.4 Sample Size
Large samples give more reliable results, but it is not necessary to sample the entire
target population to achieve reliable results. To ensure proper coverage of required
information a total of 1051 customers has been surveyed. The researcher collected
data through survey from 1351 customers (220 from Ahmedabad, 188 Rajkot, 242
from Surat, 191 from Vadodara and 210 from Jamnagar).

(A.N.Sarkar, 2009) To understand the buying behavioural patterns and drivers for
petroleum and non-fuel products and services, A.T.Keamey conducted a
quantitative research with 500 consumers in Delhi (population size-1, 64, 37, 000 )
in 2009. In the same proportion, 1051 consumers were surveyed by the researcher
to study the consumer behaviour of Gujarat on branding in petro-retailing.

4.5.5 Period of Data Collection- Primary

After conducting the preliminary survey the questionnaire was modified to include
additional parameters into the study. The questionnaire was administered to the
respondents during the period of September 2013 to June 2014.

Procedure of data collection:

In a study done by (Dabbolkar, Thorpe, & Rentz, 1996) for measuring service
quality for retail stores, researchers followed unique procedures for data collections.
To collect data from the outlets authors personally administered the process and
concluded that natural environment is important to get right data.

157
4.5.6 Data sorting, tabulation and analysis
Utmost care has been taken to avoid any data misrepresentation while compiling the
data. Responses for each question have been plotted on to prefixed tables and
tallying of the responses has been done. Data deduction has been used to arrive at
various levels of analysis. Percentage method of analysis has been used
predominantly as a tool. SPSS 17 has been used to conduct analysis of few areas
including testing of hypotheses.
Table No. 4.1: (Transport, 2015) Showing Vehicle Population (in Gujarat) as
on for the years 1999-00 to 2011-12

Sr. Transport Non Transport

Year Total
No Vehicles Vehicles

1 2000-2001 826046 4749994 5576040

2 2001-2002 858113 5149856 6007969

3 2002-2003 899284 5609086 6508370

4 2003-2004 951943 6135597 7087540

5 2004-2005 1016149 6801123 7817272

6 2005-2006 1112590 7509700 8622290

7 2006-2007 1220632 8276705 9497337

8 2007-2008 1313997 8975059 10289056

9 20 (Transport, 1398189 9600462 10998651

2015)08-2009

158
 10 2009-2010 1497890 10374683 11872573

11 2010-2011 1621857 11371278 12993135

12 2011-2012 1777974 12635743 14413717

Table No. 4.2: (Transport, 2015) Showing details of Vehicle Population (in
Gujarat)types of vehicle wises as on for the years 1999-00 to 2011-12

Types of Vehicle No. of Vehicles Registered

Non-Transport Vehicle 1,26,35,743

Two Wheeler Motor Cycle/ Scooters 8633560
Mopeds 1878744
Motor Cars & Station Wagon 1411898
Jeep 167991
Police Van 2350
Tractor 495136
Others 46064
Transport Vehicle 17,77,974
GOODS VEHICLES Truck/ Lorries 272375
Tanker 29158
Three Wheeler LGVs 263632
Tanker 185326
PASSENGER VEHICLES School Buses 3581
Private Sendee Vehicles 5495
Taxi 52826
Auto Rickshaw 561740
Ambulance 5705
Trailor 317509
Total 1,44,13,717

159
 Figure - 4.1: Trends in Sex Ratio in Gujarat (1901-2011)
TRENDS IN SEX RATIO 1901-2011

Source : (Census, 2011)

Figure - 4.2 : Trends in Sex Ratio in Ahmedabad (1901-2011)

Source : (Census, 2011)

Figure - 4.3 : Trends in Sex Ratio in Rajkot (1901-2011)

Source : (Census, 2011)

Figure - 4.4 : Trends in Sex Ratio in Jamnmagar (1901-2011)

160
Source : (Census, 2011)

Figure - 4.5 : Trends in Sex Ratio in Vadodara (1901-2011)

Source : (Census, 2011)

Figure - 4.6 : Trends in Sex Ratio in Surat (1901-2011)

1S01 1911 1921 1931 1941 1951 1961 1971 1981 1991 2001 2011

Source: (Census, 2011)

Figure - 4.7 : Trends in Sex Ratio in India (1901-2011)

161
 1901 1911 1921 1931 1941 1951 1961 1971 1981 1991 2001 2011

http://censusgujarat.gov.in/Downloads/PPT/Paper-l/Paper-
1 %20of%202011 %20GUJARAT.pdf

Table No.4.3: Literacy Rate 1951-2011

Literacy Rate 1951-2011

1951 21.82 30.32 12.87

1961 31.47 42.49 19.74

1971 36.95 47.60 25.56

1981 44.92 55.95 33.20

1991 61.29 73.13 48.64

2001 69.14 79.66 57.80

2011 79.31 87.23 70.73

Note : Literacy rates for 1951, 1961 and 1971 related to population aged five
years and above. The rates for the years 1981 to 2011 related to the
population aged seven years and above.

162
 Figure: 4.8 Position of Gujarat in India

Source: (Census, 2011)

163
 aNSUSOrtNXOOM

Source: (Census, 2011)

164
Figure: 4.9 Map of Gujarat

A7» 68* 6S* *

7 1' OaHCnxrma 75*
Barns upon&j w j OSro a tfa? »*» p s r m o t cfe * U m sjv Gerant Jn3« t* C JW W * * ft K W f* . SM
T > * « ?(n u lM « n d & >uo»x3»pqff»tM O «o»uw ae< »■>*»■ taw P»»p<ncnaabiM >r*
Cw
Tn* ortarial booU^tai «rtj caM ra* tf Ir&a n n ■m <*
nocn (m olar op* tacta) tj S>MT m a
Figure: 4.10 Production of Passenger Vehicles Trend (2005-2014)

PASSENGER VEHICLES

In Million Units

2009-10

2011-12
2007-08

2012-13

2013-14

2014-15

2015-16
200506

200809
200607

2010-11

■■H Actual production AMP 2016 Target

Source: (Ministry of Heavy Industries and Public Enterprises, 2014)

Figure: 4.11 Production of Commercial Vehicles Trend (2005-2014)

COMMERCIAL VEHICLES HBA

I
!
2000-10

2011-12

2014-10
/-OHOOZ

2015-16
2013-14
2012-13
200506

200708

200809

2010-11

Actual production AMP 2016 Target

Source: (Ministry of Heavy Industries and Public Enterprises, 2014)

165
 Figure: 4.12 Production of Three Wheelers Trend (2005-2014)

THREE WHEELERS Sdk

In Million Units

............ -.........
................................................................................................................ ................-..................

0.88- uB3
0.80

0 56 0 50 Dib ......

2012-13
2008-07

2008-09

2009-10

2013-14

2014-15

2015-16
2005-08

2007-08

2011-12
2010-11

■■■ Actual production AMP 2016 Target

Source: (Ministry of Heavy Industries and Public Enterprises, 2014)

Figure: 4.13 Production of Two Wheelers Trend (2005-2014)

TWO WHEELERS

In Million Units
2012-13
90-9003

2006-07

2007-08

2009-10

2013-14

2014-15

2015-16
60-9003

2011-12
2010-11

Hi Actual production AMP 2016 Target

Source: (Ministry of Heavy Industries and Public Enterprises, 2014)

166
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