CHAPTER – 1

INTRODUCTION
1.1 BACKGROUND OF THE STUDY
In today’s highly competitive, dynamic and technology driven business circumstances,
marketers are under steady pressure to deliver the best. Organizations are continuously
improving and upgrading themselves to meet customer expectations and demands.
Technology has not only changed the way in which business is done in modern times but
has also transformed the way to reach out to target audience. Marketers have identified
most recent media options to communicate and convince potential customers. Numerous
scholars have studied the research domain of advertising and have tried to recognize
different measures of advertisement effectiveness in context of various media.

In such an aggressive business situation, advertising plays an important role in

communicating with customers, both current and potential. With the advent of new
technology and development of various modern media, advertisers have discovered several
innovative promotional options to lure target audience. The rapid proliferation of internet,
cell phones, movies and video games has convinced marketing personnel to consider these
as emerging media alternatives. This paper is an attempt to find the effectiveness of
advertising and the role of various variables in affecting advertisement effectiveness.

1.2 STATEMENT OF THE PROBLEM

The automobile industry in the country has seen rapid growth in the recent years. The level
of competition has increased in a drastic manner. Hence, the market leaders have to
constantly improve, should update themselves with the current market scenario. And also
it is very important to know and revise their advertisement strategies to continue their
growth and also to ensure their presence in the competitive segment. This study analyses
the effectiveness of advertisement campaigns at “NEXA” ( Maruti Suzuki India Ltd) which
was launched in 2015 as a Premium Brand by Maruti Suzuki for its high Prospective
Customers. Furthermore, the study tests the role of different factors in influencing the
advertising effectiveness.

1.3 SIGNIFICANCE OF THE STUDY

The study helps the firm to identify the effectiveness level of its advertisement campaigns.
The study also helps the firm to identify various factors influencing advertising
effectiveness. The study also aims at finding various factors influencing the buying
decisions of consumers. It also helps the company to find out how the customers perceive
their advertisements and to find out if the communicated advertisement messages are
effective. Also with the development of the recent advertising medias such as online and
social media advertisements it has helped the company to meet its requirements. The
persuasiveness of advertisements is measured and its relationship with Advertisement
Effectiveness is also found out. The level of information availability is also examined in
this study.
1.4 SCOPE OF THE STUDY
The major scope of the study is that it helps the firm to identify the current state of its
advertising campaigns. As advertising is considered to be as the major factor influencing
the final sales turnover, by checking the advertising efficacy it helps in identifying the
reasons for increase/decrease in sales revenue. The study also help in identifying the most
effective media of advertisements currently used by the firm. The study tests the various
influencing factors like Brand perception and the impact of advertising messages in
advertising efficacy. It also looks into what are the factors that customers use when making
a purchase decision. Hence, it helps the firm to identify these factors and make appropriate
changes in the advertisement campaigns.

1.5 OBJECTIVES OF THE STUDY

 To identify the major factors influencing the effectiveness of advertisement of Nexa
premium products of Maruti.
 To study the impact of effectiveness of advertisement on consumer behaviour.
 To study whether their exist a relationship between the effectiveness of
advertisement and consumer behavior.
 To know whether the demographic factor has an impact on the effectiveness of
advertisement of Nexa.

1.6 Hypotheses to be tested

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1.7 ORGANISATION OF CONTENTS OF THE REPORT

The project report comprises of six chapters accomplishing the mission of the study.

Chapter 1: Introduction

The first chapter ‘Introduction’ presents an insight into importance of Advertising

Effectiveness. The statement of the problem is discussed. The objectives are highlighted
and the hypotheses are framed to test the objectives. The chapter also discusses the
background of the study, its scope, limitations and the operational definitions associated
with the study.

Chapter 2: Review of Literature

The second chapter ‘Literature Review’ mainly deals with past research and theories
related to the topic. It includes the theories related to Advertising Effectiveness and various
factors influencing Advertising Effectiveness and the consumer buying behaviour . It
further deals with a review of past researches and studies conducted in this area.

Chapter 3: Industry and Organizational Profile

The third chapter ‘Organization and Industry Profile’ is a summary of the automobile
industry and also the description of the Nexa – AVG motors in Kottayam region.

Chapter 4: Research Methodology

The fourth chapter ‘Research Methodology’ deals with the sample design and research
methodology used for the study. It consists of the overall typology, methods adopted for
data collection, sources of data, sampling plan etc. It further deals with the various tools
and techniques used for the study.

Chapter 5: Data Analysis and Interpretation

The fifth chapter ‘Data Presentation and Interpretation’ deals with the analysis of data using
descriptive and inferential statistics using different analysis techniques and their
interpretations. Each of the hypotheses are tested and either accepted/ rejected.

Chapter 6: Findings, Suggestions and Conclusion

The sixth chapter ‘Findings, Recommendations & Conclusion’ consists of the various
findings from the study, suggestions based on the findings and the conclusion of the study.

1.8 Limitation of the study

 The sample size is limited to 100 customers; hence the findings of the study are
limited to the assumptions of these customers.
 The area of study is limited to Trivandrum city only.
 The answers depend on the attitude opinion and sharing mentality of the
respondents.
 CHAPTER- 2
REVIEW OF LITERATURE
2.1 INTRODUCTION
Initially, a literature survey is conducted in the area of the research interest for obtaining a
comprehensive view of earlier studies in the particular subject. Review of literature help
for determining important variables related to the study. The literature survey helped to
develop a framework of objectives and research hypotheses for the study.

2.2 ADVERTISING
According to Roshni.P. Sawant (2012) advertisements have a great role in creating brand
awareness. Further advertising also helps in improving brand recognition. The advertising
message is also said to be influential in building brand awareness. `

“Advertising presents the most persuasive selling message to the right prospects for a
product or service at the least possible cost.”- The UK Institute of Practitioners in
Advertising (adapted from Dogudje 2009).

“Advertise or die” were the words of Kankarofi, the APCON Registrar in a paper he
recently presented on Options for Corporate Survival: a seminar organized in Lagos by the
Nigeria South Africa Chamber of Commerce. He emphasized on the need for
corporate/business organizations to sufficiently appreciate the place of advertisement in
the survival of their business.

In the words of Kaufman (1980:3), “advertising is not chemistry, with rules and laws that,
if followed with reasonable precision, will lead to predictable results every time.
Advertising is not a panacea that can restore a poor product or rejuvenate a declining
market; it is not a substitute for sound business judgment nor is advertising merely the
words and pictures that appear in newspapers and magazines, on billboards and on
television screens. These are the means or the media that advertising uses to communicate
its information about products, services, and ideas to people: information designed to
persuade them make buying or action decisions. Advertising is the art and business of
persuasive communication”.
Nwaizugbo (2004:181) defines advertising as a process of presenting a product or idea to
a person or group of persons, some openly sponsored message (oral or visual) about a
product or seller. This message which is being presented is known as advertising.

Jefkins (1985:3) submitted that advertising is the means by which we make known what
we have to sell or what we want to buy.
Whereas, Kotler & Armstrong (2007:426) see advertising as any paid form of non-personal
presentation and promotion of ideas, goods, or services by an identified sponsor.

To Anyacho (2007:6), advertising is a form of communication through the media about

products, services, ideas paid for by an identified sponsor.
Wright, Winter & Zeigler (1983:8) see advertising as a powerful communication force and
a vital marketing tool, helping to sell goods, services, images and ideas (or ideals) through
channels of information and persuasion. By this definition, it’s noteworthy that advertising
never sells products but helps to sell products.

Above all, the American Marketing Association (AMA) recommends this definition:-
Advertising is any paid form of non-personal presentation and promotion of ideas, goods,
and services by an identified sponsor. In this definition, the following phrases were further
explained.

Paid Form: When products or services are mentioned favorably in the media, the item
appears because it is presumed to provide information or entertainment for the audience.
This is called publicity, and no payment is made by the benefited organization. Advertising
on the other hand is published or broadcast because the advertiser has purchased time or
space to tell the story of a certain product or service.

Non-personal: Personal selling takes place when a personal face-to-face presentation is

made.

Although advertising complements or substitutes for personal selling, it is done in a non-

personal manner through intermediaries or the media.

Ideas, Goods and Services: From this phrase, it’s obvious that advertising is not all about
promotion of tangible goods as other service providing organizations such as banks,
Insurance companies, Airlines etc also advertise as aggressively as do other manufacturers
of tangible goods.

An Identified Sponsor: This phrase states that advertising must disclose or identify the
source of opinions and ideas it presents.

2.2.1 ADVERTISING FUNCTIONS

1. Information: the role of advertising here is to communicate to consumers, the existence
of goods and services. It tells consumers about what goods and services are available and
in what locations they can be purchased and sometimes at what price. In playing the
informational role, advertisement highlights the special physical and quality attributes of
available goods to satisfy consumer needs.

2. Reminding: Advertising is intended to keep a brand’s name in the memory of consumers.

When a need arises that is related to the advertised product, past advertising impact makes
it possible for the advertiser’s brand to come to the consumer’s mind as a purchase
candidate. An advertisement created to do this is referred to as Reminder Advertisement.
3. Persuading: Effective advertising persuades customers to try advertised products or
services. Often times, the persuasion may take the form of influencing primary demand i.e.
Creating demand for an entire product category.

4. Adding value: Given that there are three major ways a company can add value to its
offerings, viz: Innovation, quality improvement and alteration of consumer perceptions;
advertising adds value to brands by influencing consumers’ perceptions. Effective
advertising causes brand to be viewed as more elegant, more stylish, more prestigious and
probably superior to competitors’ offerings.

5. Assisting other company efforts: Advertising can be viewed as one member of the
marketing communications tools. Terence (2000:264) puts it this way, “Advertising is at
times a scorer that accomplishes goals itself. At other times, advertising’s primary role is
as an assister that facilitates other company efforts in the marketing communications
process
Increase profit thereby ensuring the continued life of the business
Increase turnover
Induce higher production volume resulting from increase in demand
Get more efficient in the utilization of resources as a result of increase in profitability
Invest in research and development
Expansion of market share.

2.2.2 TYPES OF ADVERTISING

Advertising can be grouped into two large divisions according to Anyacho (2007:9) which
include:

 Print Advertising:- All forms of copy work including non-audio visuals such as
newspapers, magazines, posters, calendars etc. This form of advertising can further be
grouped into:

 Display Advertisement: This is the larger and dominant type of advertising

having
illustrations blended with copy to create attract

 Classified Advertisement: These are small advertisements usually grouped

according to their contents. They are mainly personal announcements paid for by
individuals.
  Audio-Visual (Broadcast) Advertising: this refers to the advertising broadcast in
radio and television, as well as emerging media like the internet. This form of
advertising appeals to the sense of hearing and sight. Examples are; radio jingles
and spot announcements.

2.2.3 CLASSIFICATION OF ADVERTISING

The following criteria were adopted by Anyacho (2007:10) in classifying advertising.

1. Classification by Target Audience: the originator of this class of advertising is mainly

the producer who produces a product or service for profit. This class of advertising can
take the following forms:

 Consumer advertising: this occurs when the producer tries to reach and influence
through the advertising mediums.
 Trade advertising: Producers can direct consumer goods towards retailers and
wholesalers. In this form, the producer seeks the attention and patronage of
supermarkets, hardware stores, specialty stores and small business people. The
intent of this form of advertising is for those outlets to stock and promote the sale
of a particular brand. Users are expected to make purchase from these outlets. The
product could be promoted under the stores brand name.
 Public Relations Advertising (Institutional advertising): Producers sometimes use
advertising to promote their public relations objectives.

2. Classification by media type: Classification of advertising according to exposure

channels may take any of the following forms.

 Print Advertising: these comprise newspapers, magazines, books, pamphlets,

leaflets, posters etc.
 Broadcast: include radio, television/satellite/cable and home video
 Out-of-home Advertising: uses signs, billboards, transit (train, buses, sales van),
point of sale materials, mobile megaphone messages etc.
3. Classification by Geographical Area: this encompasses the following:

 International Advertising: this refers to advertising designed to reach several

countries and societies. As the concept of world market is becoming interesting to
producers, products made in one country find themselves in other countries and
advertising is seen to be serving this purpose. Media used here are cable networks,
satellite television, international newspapers and magazines, the internet etc.
 National Advertising: this has the aim of reaching out to the audience all over a
country. When a product is designed to be marketed throughout the nation,
advertising follows. Media used are national television and radio networks,
newspapers, magazines, direct mail, billboards etc.
  Regional Advertising: this is advertising intended for specific zones within a
country.It is suitable for marketing products confined to specific parts of the
country. A typical example of such product is the Dudu Osun Soap which is sold
in the Southwestern part of the country.
 Local Advertising: this form of advertising is intended for the marketing of
products or services within a local environment. It is best suitable for
supermarkets, retail shops, food stores etc. Local advertising informs the target
audience about where to purchase the goods advertised. This is also called retail
advertising. Most common media used are directional signs, signboards,
billboards, local newspapers, and local radio stations.
 Travel Advertising: this is tourism-related advertising. It enables organizations to
reach out to international audience to sell holiday services available. The essence
is to make international travelers patronize the resorts centre anytime they visit the
country where they are located.

Advertising promotes the following functions:

 Promotion of sales
 Creating brand awareness
 Mass production facilitation
 Introduction of new products awareness
 Education of people
According to Philip Kotler, “Advertising is a non-personal form of communication
conducted through paid media under clear sponsorship”. Ducoffe (2001) defined
advertising effectiveness as advertisers go through Ad messages to convey and a cognitive
assessment of the extent to which advertising gives consumers what they want.

2.3 Effectiveness of Advertising

Ana Beriain (2013) says that effective advertising is a multivariable concept (linked to
sales, persuasiveness, brand awareness, message comprehension, recall, and recognition,
type of argument (emotional/rational), likeability, attention, involvement, credibility, and
coherence. These factors together contribute to the effectiveness of an advertising message.
Also as new types of media are emerging, different dimensions will be included with
traditional models to improve the Measurement capability.
Advertising is effective in certain other spheres too such as:

 When consumer awareness of its products or services at minimum

 When sales are increasing in all terms of an industry
 When primary buying motive exists
 When a product is new and effective technological utilization
2.3.1 Studies on Effectiveness of Advertising
According to Adrian Scutaru (2010) An important variable which can be helpful in
recording advertising effectiveness can be the sales volume. The sales volume before and
after the advertisement can be easily measured and can be brought together for finding the
advertising effectiveness. Advertisement Reach, Advertisement Resonance, advertisement
reaction and message credibility were taken as meaningful indices to find out the return of
investment on advertisements (video advertisement’s in general). These factors also help
in the better calculation of advertisement effectiveness Nielsen (2014).

Lavidge and Steiner (1961) proposed that the way to evaluate advertising effectiveness is
sale effect and communication effect. The sale effect of advertising is to sell product sales
as a measurement, but advertising is just one of the reasons to affect safe effect. Moreover,
the communication effect is to see how an advertising message to be noticed, understood,
accepted, and the level of an attitude generated by a product or changed by a behavior.

Lavidge and Steiner (1961) also mentioned the hierarchy of effect models in responding to
the advertising effectiveness work. Therefore, if advertising can make advertisers
effectively catch the message in order to reach the purpose of communication. In this study,
the advertising result is the communication effect of advertising.

 Impact of Advertising
Uchenna Cyril Eze and Chai Har Lee (2012) advocates that there is a positive impact of
product information on advertisement and also the attitude levels shown by the customers.
Other factors such as economic situations, materialism we influential in positive attitude
toward advertisement’s. The economic condition had a direct relation toward customer
attitudes toward advertising. This is also said to differ among societies. This economic
impact of advertising on the societies is also a factor in measuring advertising
effectiveness.
From an advertisement media perspective, Television advertisements were said to one of
the most effective tools for advertisements. Celebrity Endorsement was found out to be
another major factor influencing the effectiveness of advertising R. Indumathy (2012).
Ying-Fang Lai, Chien-Yuan Lai and Hsiu-Sen Chiang (2014) have presented that when the
advertisements have a better relation to the product the customers are said to be more
involved to the advertisement. Therefore, level of influence can be termed as a major factor
in advertising effectiveness. Also higher involvement advertisements lead to higher
involvement in the purchase intention.

Ehrenberg (2000), tried to postulate an Awareness - Trial - Reinforcement model of

consumer response to advertising, the main purpose of advertising for established brands
is its defensive role in maintaining repeat buyers. Advertising offers a stimulus to a
potential user, which it is hoped will produce the response of an increased predisposition
to buy the advertised brand.

2.3.2 Studies on Advertising Recall

Prateek Maheshwari and Anoop Kumar Gupta (2014) says that Advertisement Recall,
Customer Preference, Consumer attitude, Recognition were all the major dimensions
suggested for studying advertising effectiveness. Majority of the researchers have explored
the area of advertisement effectiveness with two different perspectives.
1, Dimensions on which Advertisement Effectiveness depends.
2, Dimensions which are used to measure Advertisement Effectiveness.
Richard Shannon (2000) sates that advertising recall and recognition are used both to
measure the effectiveness of an advertisement and as a test of whether the information from
the ad has been processed into long-term memory. Advertising recall is capable only
through repeated showing of the ads in question, therefore, repeated exposure towards and
advertisement greatly helps in ad recall and is said to increase their purchase intentions.
This in turn results in product recall in which the respondent associates a particular type of
product with the one that is shown in the advertisement. Content understandability was
used as a sub factor to recall.

Macarena Estévez (2011) state that recall, brand recognition and buying intention were
seen as the major factors for studying about advertisement effectiveness, in the study these
factors were analyzed as a 3D effectiveness scale. Improving the above three factors were
said to be influential in improving the effectiveness of advertisement’s.

2.3.3 Studies on Media Selection

Media selection is an important factor for advertising effectiveness. It is greatly dependent
upon the company, its product range and other variables. Selecting the right media helps
in the marketers to target their audience more effectively. The distinctive characteristics of
different media are also important. Therefore, management should focus its attention on
media compatibility with advertising objectives.
Media Selection is very important in determining the effectiveness of an advertisement
campaign. According to Arch G Woodside (1990). Advertising conversion studies are
helpful in comparing the different types of advertisement media used and the advertisement
message. The cost element of advertising only comes in when there is a finding indicating
that different advertising medias are equally effective, in such a case the media which costs
less is to be selected.

In a working paper series by Mohammad Esmaeil Ansari (2011). There is a profound

impact of advertisements (television) on attention to advertisement, interest for purchasing,
desire for purchasing, action of purchasing and customers' satisfactions. Further purchase
intention for repurchase depended on satisfaction on the old product

According to Moriarty, Mitchell and Wells (2009) media planning involves the challenge
of advertising practitioners in determining the best way to deliver a message to the target.
They explain that four advertising professionals are involved in the media planning
process. These are media researchers, media planners, media buyers and media buying
companies.

As identified by Francis A (2011) the criteria for selecting media for any advertising
campaign include the nature of the product, market, advertising objectives, media
circulation, financial consideration, type of audience, life of advertisement and media used
by competitors. Others include target audience media habits, nature of the product, type of
advertising message, cost factor, media reach, available budget, prestige and image of the
media as well as media rating and share.

2.3.4 Studies on Message credibility

MacKenzie and Lutz (1989), defined advertising credibility as “consumer’s perceptions of
the truthfulness and believability of advertising in general”. Their conceptualization and
measurement of advertising credibility suggest that the construct refers to consumer’s
generalized beliefs in the integrity of advertising claims MacKenzie and Lutz, (1989).

Herbigand Milewicz (1995) suggested that credibility is related to the extent to which, what
is said matches with what is done. In other words, if the product claims confirm with the
performance, the credibility increases.

According to Abilsasha Metha (1997) individual attitudinal factors related to advertising

in general influences how a respondent reacts to an advertisement. Informational value and
the truthfulness of an advertisement also helps in persuasion and generating buying interest.

2.3.5 Studies on Celebrity endorsement

The term Celebrity refers to an individual who is known to the public (actor, sports
figure,entertainer, etc.) for his or her achievements in areas other than that of the product
class endorsed (Friedman and Friedman, 1979). Celebrity endorser is any individual who
enjoys public recognition and who uses this recognition on behalf of a consumer good by
appearing with it in an advertisement (marcoms), is useful, because when celebrities are
depicted in marcoms, they bring their own culturally related meanings, thereto, irrespective
of the required promotional role (McCracken, 1989).

Kotler (2006) explains that celebrity endorsement is a particular strategy used by marketers
to advertise a product from such a platform through which consumers can associate
themselves with the brand value from the perspective of the celebrity personnel. In India a
celebrity idolizes in the mind of the consumer so large that any activity can be capitalized
on their huge fan followers (Erdogan,1999).

Celebrity endorsement increases the attention paid to an ad (Buttle, Raymond, and

Danziger2000). Celebrities are generally attractive, which helps persuasion when
consumers are worried about social acceptance and others opinions (DeBono and Harnish
1988) or when the product is attractiveness-related (Kahle and Homer 1985, Kamins 1990).
Celebrities may be credible sources if they have expertise in a particular area, such as an
athlete endorsing shoes (Ratneshwar and Chiaken 1991) or a beautiful model endorsing
make-up (Baker and Churchill 1983).
Celebrities are often well-liked, possibly leading to identification and consumer persuasion
in an attempt to seek some type of relationship with the celebrity (Belch and Belch2007).
However, advertisers used famous people for product endorsements since 1920. Actresses
Joan Crawford, Clara Bow and Janet Gaynor were among the first celebrities to promote
products (Fox, 1984).At that time, the rationale given by advertising agencies for using
celebrities was "the spirit of emulation". About a decade ago, one in three television
commercials used celebrities' endorsements (Business Week, 1978), and today this
advertising approach appeared to be on the increase across all media types (Sherman, 1985
and Levin, 1988).

Celebrity advertising for companies has become a trend and a perceived winning formula
of corporate image building and product marketing. Brands have become embedded in the
consumer psyche and offer consumers the opportunity for self-expression, self-realization
and self-identity. Celebrity endorsement is recognized as a potentially potent tool in
communications, with celebrities viewed as more powerful than anonymous models and
campaigns tending to verbalize the meaning of the celebrity in relation to the brand (Brian
Moeran, 2003).

To the manufacturer ,brands offer a means of identification, legal protection and the ability
to be distinctive. In addition, branding is a sign of quality and can be used to secure
competitive advantage and increased financial returns and high customer loyalty. For the
consumer, the brand functions as a means of identification, reduces search costs, effort and
perceived risk, thereby facilitating in decision making, and represents a guarantee of
quality and reliability. Customer perceptions about celebrity endorsement have been of big
interest by researchers in past several years. The results of previous studies showed that
the highest benefit of involving celebrities in advertising is to create exposure and attention
from consumers.
Particularly differences and similarities are present in the impact of celebrity endorsements
and how consumers perceive them. While there is a positive impact of celebrity
endorsements on attention and exposure of consumers, its connection to positive attitudes
towards brands and purchase decision is less understandable (Biswas, Hussain, &
O‘Donnell, 2009).

Consumers perceive that information coming from celebrity, especially famous

spokesperson has more similarities with their lifestyle and interest in comparison to the
unknown persons.(Erdogan et al., 2001). Both, theory and practice have proven that the
use of celebrities in advertising is a good way for attracting attention of a public
(Ohanian,1991).Schlecht (2003) analyzes the connection between consumer perceptions
about celebrity endorsements and brands, by applying a theory of widely accepted
principles of how consumers‘ brand attitudes and thoughts can be positively influenced.
She found in her study that celebrity endorsement strategies can under the right
circumstances indeed justify the high costs associated with advertising.

2.3.5 Studies on advertising appeal:

Advertising appeal refers to packaging products, services, organizations, or individuals in
a variety of ways that clearly deliver a certain benefit, stimulation, identification, or reason
to explain what consumers are thinking about and why they buy products (Kotler, 1991).

Berkman and Gilson (1987) defined advertising appeal as an attempt at creativity that
inspires consumers’ motives for purchase and affects consumers’ attitude towards a
specific product or service. Schiffman and Kanuk (2007) defined advertising appeal as
suppliers’ application of a psychologically motivating power to arouse consumers’.

Hence, advertising appeal is applied to attract the consumers’ attention, to change the
consumers’ concept of the product, and to affect them emotionally about a specific product
or service (Belch and Belch, 1998; Schiffman and Kanuk, 2007). =

To meet the varying demands of their target consumers, advertisers commonly use rational
appeal and emotional appeal in their advertising in an attempt to influence consumer
behavior (Chu, 1996). By rational advertising appeal, the product can be emphasized by its
benefits, in which the consumers’ self-benefit is the key proposition, and the function or
benefit requested by consumers of the product or service is a rticulately presented in
advertising.

On the other hand, emotional advertising appeal places stress on meeting consumers’
psychological, social, or symbolic requirements, where many purchase motives come from.
Kotler (1991) defined rational appeal as rationally oriented purchase stimulated by directly
giving explanations of a product’s advantages. Rational appeal focuses on the benefits
consumers may enjoy. In an advertisement, it emphasize that a product or service could
achieve the function and benefits consumers desire. He defined emotional appeal as the
stimulation of consumers’ purchase intentions by arousing their positive or negative
emotions. Positive emotional appeal covers humor, love, happiness, etc, while negative
emotional appeal involves fear, a sense of guilt, and so on.
Attitude is an essential concept in psychology, but it is also widely applied in the social
sciences and marketing. Fishbein and Ajzen (1975) defined attitude as a learning
orientation based on which a state of constant like or dislike is generated towards a certain
object.

Kotler (1991) suggested that attitude refers to an individual’s long-lasting perceived

evaluation of like, dislike, emotional feelings, and action intention towards an objector
idea. Schiffman and Kanuk (2007) stated that attitudes are a psychological tendency
accrued from learning and a continual evaluation towards a subject.

Lin (2008) defined advertising attitude as a continuously reactive orientation learned from
a certain object. Such an orientation represents an individual’s personal standards such as
like and dislike, and right and wrong. The attitude held by consumers caused by advertising
can be classified into two components: cognition and affection. Cognition and affection
stand for thinking and feeling, respectively (Vakratsas and Ambler, 1999).

Allport (1935) pointed out that the difference between the two components lies in that
cognition stands for an individual evaluation towards external stimulation, while affection
reflects an individual’s internal feelings.

2.4 CONSUMER MARKET AND CONSUMER BEHAVIOUR: AN OVERVIEW

A consumer is the final user of a product. It consists of all individuals, groups or households
buying products for personal consumption: Nwaizugbo (2004:63). Kotler & Armstrong
(2008:130) defines consumer market as a combination of all individuals and households
who buy or acquire goods and services for personal consumption.

2.4.1 THE IMPORTANCE OF KNOWING THE CONSUMER

Engel, Kollat and Blackwell (1982:3) define consumer behavior as those activities directly
involved in obtaining, consuming and disposing of products and services, including the
decision processes that precede and determine those acts. In the entire business world, the
consumer is the king, as every marketing effort is geared towards consumer satisfaction.
As competition is taking a lead in the business environment, the issue of how best a
business organization can satisfactorily meet the needs of the consumers of its product is a
very serious matter. This issue is at the heart of business survival. This is not just because
consumers represent part of the society but more, because the extent to which a consumer
is satisfied with a particular product or service, largely determines the competitive
advantage that company has over others. On the other hand, the perception of a consumer
towards a particular product is of great concern to the marketer of the product. As
mentioned in chapter one of this study, purchasing of the marketer’s brand is dependent
upon whether the marketing and promotional variables of the marketer facilitate the
purchase of such brand.

2.4.2 Consumer Buying Behaviour

To be able to comprehend the impact the different factors have on the decision making of
a consumer, it is essential to understand what, why, how, where and how much a consumer
buys. It is very important to understand that the buying behaviour of a consumer is intergral
to his social environment, the competing products in the marketplace and the brand
marketing strategy imposed by the manufacturer. Belch and Belch (2004) share this view;
they defined consumer behavior as “the process and activities people engage in when
searching, selecting, purchasing, using, evaluating and disposing of product and service so
as to satisfy their needs and desires”.Consumer behaviour can also be define as the
understanding of what a consumer needs and what exactly influences his buying behavior.4
A buyer goes through some series of stages in arriving at a decision to buy a product or
service. Consumer behaviour can also be described as how a consumer distinguish products
and services, their reasons for purchasing and consuming a product.

Dahlqvist and Linde (2002), presents an in-depth analysis of the role consumer behaviour
plays in the buying decision of consumers by discussing four factors. These factors are
presented in the table below:

Consumers with rational behaviour first get some knowledge

about the product and what it may offer. By assessing this
information, they get an attitude toward the product and finally
act; whether or not to buy the product. This type of behavior is
Rational Behaviour mostly common when consumers are purchasing expensive
products for example cars.
(KNOWLEDGE→ATTITUDE→ACTION)

Consumers with unconscious behaviour begin with an attitude

towards the product, this attitude may either come from
emotions or feelings. This attitude will lead the consumers to
Unconscious Behaviour find out more information about the product and get
knowledge about it and finally act their choice.
(ATTITUDE→KNOWLEDGE→ACTION)
 This type of behaviour stems from habits. These Consumers do
Learned Behaviour not plan their choice of product, they do it by habit. Example
of this behaviour is when buying a newspaper.
(ACTION→KNOWLEDGE→ATTITUDE)

Consumers with social behaviour choose their products as a

Social Behaviour result of the social environment which they live in. Their
status, lifestyle and influence from others determine the
product they
will buy. (ACTION→ATTITUDE→KNOWLEDGE)

2.4.3 Consumer Buying Process

Before a consumer purchases a specific product or service, there are five stages of
decicion making process he goes through.7 A need is recognized in the mind of the
consumer, followed by information research, then analysing alternatives between
products. Afterwards the consumer makes a decision either to purchase and use the
product and then comes the post purchase behaviour, this will decide whether the
product was able to satisfy the consumer’s need.

Problem Recognition Information Search Evaluation of Alternatives

Purchase Decision Post – Purchase behavior

Consumer Buying Process (Adapted from Marketing Management and Consumer

Behavior by Philip Kotler, 2000)

STEPS IN THE CONSUMER DECISION MAKING

1. Problem Recognition: The buying process consists of five steps which the
consumer undergoes as shown in figure. The decision is made to solve a problem of any
kind or satisfy a need. The problem recognition occurs when a consumer identifies a need
or a problem and the need is prompted either by an external (example: advertisement,
friend’s purchases) or internal (example: hunger, fear, stress) stimulus. For example a
smoker feels stressed out from work of studies and realizes the need to smoke to calm his
or her nerves. The problem recognition stage is where the consumer experiences a state of
felt deprivation (need) or wants. According to Nwaizugbo (2004:84), a problem stage is
when the consumer feels an imbalance between his actual state and desired state. In this
case, a need had arisen to be satisfied, which must be properly identified to avoid wrong
decision making.

2. Information Search: Once the Consumer has recognized a problem, the next stage
is to search for information in order to solve the problem. Here, the consumer seeks
information on which brand that can solve the recognized problem. At this stage, he may
be faced with various brands which he evaluates for the purpose of selecting the best. In
the evaluation process, he considers factors like, prices, qualities etc, as well as the extent
to which the product can solve the need. The information can be gathered from different
sources such as commercial source (example: advertisement, salespersons), personal
source (friends and family), experiential source (such as using the product) and public
source.

3. Evaluation of alternatives: When the necessary and essential information has

been acquired the consumers goes to the next step, which is the evaluation of alternatives.
The information search improves the consumer’s knowledge about the different and
available brands. This helps the consumer to evaluate and rank the alternative brands. The
consumer compares the options with criterion that depends on the situation and his own
buying behavior. The preferred brand with certain benefits that suits and help solve the
need of the consumer will be chosen. This leads to the Purchase decision.

4. Purchase decision: After evaluating the alternative brands and selecting the best,
the Consumer is now ready to make a purchase. It’s however, noteworthy that sometimes,
purchase intention does not result in an actual purchase. This is where the role of the
organization in facilitating the consumer to act his purchase intention becomes very
necessary. The consumer would select the most important information, weigh the benefits
of each product and decides either to purchase a particular product or not, postpone the
purchase or even not purchase at all. Income, attitude of others or perceived risk can
influence the purchasing decision.

5. Post-purchase evaluation: It is very common for a consumer to experience

concerns after making a purchase decision. As submitted by Kotler and Armstrong
(2007:149), a purchase behavior is the stage of the buyer decision process in which the
consumer takes further action after purchase, based on his satisfaction or dissatisfaction.
The consumer, having bought a product may feel that an alternative would have been
preferable. Given this situation, the consumer may not re-purchase immediately, but is
likely to switch brands in future time. After purchasing and using the product, the
consumer compares his expectation and the experience he had with the product to see if
his need has been satisfied or not. This information influences any future purchase
decision. A satisfactory experience may lead to a repeat purchase while a disappointment
may cause a consumer not to purchase the product again.

2.4.4 FACTORS INFLUENCING CONSUMER BEHAVIOUR

As adapted from Nwaizugbo (2004:71), the factors influencing consumer behavior are
summarized as follows:

 Individual Factors: which include Demography, Perception, Motivation,

Learning, Belief 2and attitudes, Psychographics and values, personality and Self
concept.

 Social Factors: these comprise cultural influences, social class influences,

Reference group influences and family influences.

 Situational factors: which could be viewed in the following ways:

I. Intensity of the response behavior: Certain objectives or motives may propel a
consumer to buy products. Whereas some consumers buy for immediate use or future
consumption, others buy to give out. In any case, these buying decision behaviors may
be termed: Routine response behavior, Limited problem solving or Extensive problem
solving. In the first case, the consumer is very familiar with all it takes to make a
decision and quickly does that without wasting time. In the case of limited problem
solving, the consumer may require further information before deciding to buy
especially a new product. Products that are occasionally purchased such as specialty
goods follow this process. Finally, in extensive problem solving, the consumer must
follow the entire buying decision process.

II. Some purchases may also be planned, routine, impulse or emergency.

III. Previous experience, interest, perceived risk of negative consequences, situation

and social visibility may also influence consumer purchase behavior.
2.4.5 TYPES OF BUYING BEHAVIOUR

Differences in consumers buying behaviour depends on the type of product the consumer
is purchasing. A behaviour model consisting of four different buying behaviours was
designed by Kotler et al (1999)

Table No: 2.7.5

Types of Buying Behaviour

High Involvement Low Involvement

Significant differences Complex buying behaviour Variety-seeking behaviour

between brands

Few differences between Dissonance-reducing Habitual buying behaviour

brands behaviour

Source: Kotler et al (1999) p. 251

Complex buying occurs when there is high involvement from the consumer to a product
and significant differences between the brands. This means that before a consumer
purchase a high quality brand, he searches for a lot of information about that brand.

Dissonance-reducing behavior happens when a consumer is highly involved in

purchasing a product because of the purchase is expensive or infrequent. There is little
difference between existing brands.

Variety-seeking behavior is the case where the individual likes to shop around and
experiment with different products. In other words, an individual may shop around for
different breakfast cereals because he wants variety in the mornings.

Habitual buying behavior is where the individual buys a product out of habit e.g. a daily
newspaper, sugar or salt. Cigarette smokers can be classified as having a habitual buying
behavior because there is perceived little difference between existing cigarette brand
manufacturers.

2.4.6 Studies on Price

According to Agwu and Carter (2014), ‘among the four Ps, price is the only income
generator and it is the value attached to a product. Furthermore, price is the amount of
money charged for a product or service. It is the sum of all the values that customers give
up in order to gain the benefits of having or using a product (Kotler et al 2010).

Baker (1996) noted that price is the mechanism which ensures that the two forces (demand
and supply) are in equilibrium. According to Santon (1981) price is simply an offer or an
experiment to task the pulse of the market. It is the monetary value for which the seller is
willing to exchange for an item (Agbonifoh et al, 1998).

Ezeudu (2004) argues that price is the exchange value of goods and services. Schewe
(1987) defines price as what one gives up in exchange for a product or service. It is one of
the most important elements of the marketing mix as it is the only one that generates
revenue for the firm unlike the others that consume funds (Agwu and Carter 2014).

Lovelock (1996) suggested that pricing is the only element of the marketing mix that
produces revenues for the firm, while all the others are related to expenses.
Diamantopoulos (1991) also argued that, ―price is the most flexible element of marketing
strategy in that pricing decisions can be implemented relatively quickly in comparison with
the other elements of marketing strategy. It is capable of determining a firm‘s market share
and profitability.

Kellogg et al., (1997 p.210) point out: ―If effective product development, promotion and
distribution sow the seeds of business success, effective pricing is the harvest. Although
effective pricing can never compensate for poor execution of the first three elements,
ineffective pricing can surely prevent those efforts from resulting in financial success‘‘.
Typically, pricing strategies that are investigated in the marketing literature consist of
analyzing aggregated prices (Tellis 1986).

Bertini and Gourville (2012) stressed that businesses should look beyond the mechanics of
just fixing prices they feel is suitable for a product having estimated cost and profit still
relevant but no longer sufficient and recognize that harmonization of the way they generate
revenue can open up opportunities to create additional value. This study therefore has dual
purposes which are to assess the effect of pricing strategies on the purchase of consumer
goods and how the advent of online pricing interferes in the above.
2.4.7 Studies on information search
“The information may be reasonably considered a primitive concept, as are energy,
electricity, distance, power, and work. One understands each of them intuitively, but there
are no adequate definitions for them. Their lack of precise definition has not prevented men
and women from studying their properties, behaviours, and interrelationships within
systems and organizations” (Pao, 1989).

Belkin is “not concerned with definitions of information, but rather with concepts
ofinformation. The distinction is that a definition presumably says what a phenomenon
defined is, whereas a concept is always of looking at, or interpreting the phenomenon. By
accepting the idea of a concept, one becomes free to look for a useful concept rather than
a universally true definition of information” (Belkin, 1978).

“While information needs may be influenced by factors relating to the individual as above,
there are also other more general characteristics of 125 information needs that enter into
the equation. Two examples of these general factors are frequency and complexity”
(Bresnick, 1988).

Information Need The “information need” is another term that has been discussed and
approached from many different perspectives. Much of the discussion has been orientated
towards the clarification of other related concepts such as “wants”, “requests”, “demands”,
and so on. “Information need is a term closely related to the concept of information seeking
behavior. A user recognizing an information need, articulates it into a question, or, request
which is conveyed through formal or/and informal channels of communication and
information systems, in order to receive a response (verbal written, visual) which will
satisfy that need. The decisions concerning which communication channels and
information systems will be used, as well as in which way and how they constitute the
information seeking behavior of a user. Due to the existence of many internal factors that
are concerned with the individual user, the examination of the information seeking
behavior becomes very difficult and complicated” (Siatri, 1999).

Leuplot pointed out that the information requirements are more or less adequate reflection
ofthe information need and the need to satisfy it. “Information needs and information
requirements are mutually interdependent and the requirement is the reflection ofthe
objectively existing information need. Further the relation between information need and
information requirement is to be seen 126 in the light ofthe fact for satisfying the
information needs. It is necessary to meet the information requirements corresponding to
that information need” (Leuplot, 1983).

For McGarry need is the basic concept of information studies but it is difficult to define it
precisely and accurately. However, it implies lack of something which, if given would
enhance our welfare or make easier the attainment of whatever objectives we may have in
mind. “The concept needs can be known through the various terms such as want (a state or
fact of being without or having an insufficient, absence or deficiency of necessities), desire
(an unsatisfied longing or craving), demand (to require, asking for what is due or asking
for something), and requirement (a need, a thing needed, necessary condition)”.

Atkin has beautifully defined the term “information need” that “a function of extrinsic
uncertainty produced by a perceived discrepancy between the individual’s current level of
certainty about important environmental objects and a criterion state that he seeks to
achieve”. Information Seeking Behaviour “Information seeking is a human process that
requires adaptive and reflective control over the afferent and efferent actions of the
information seeker.

Information seeking behavior (ISB) resulted from the recognition of some needs, perceived
by the user, who as a consequence makes demand upon on formal system such as libraries
and information centres, or some other person in order to satisfy the perceived information
need. The information seeking behavior 127 essentially refers to locate discrete knowledge
elements. It is concerned with the interactive utilization ofthe three basic resources namely,
people, information and system. Further in order, to satisfy the information needs, the user
actively undergoes the information seeking process. The attempt ofthe user in obtaining
the needed information results from the recognition of some needs, perceived by the user”
(Singh & Satija, 2006).

2.4.8 Studies on advertisement

According to Roshni.P. Sawant (2012) advertisements have a great role in creating brand
awareness. Further advertising also helps in improving brand recognition. The advertising
message is also said to be influential in building brand awareness. `

“Advertising presents the most persuasive selling message to the right prospects for a
product or service at the least possible cost.”- The UK Institute of Practitioners in
Advertising (adapted from Dogudje 2009).

“Advertise or die” were the words of Kankarofi, the APCON Registrar in a paper he
recently presented on Options for Corporate Survival: a seminar organized in Lagos by the
Nigeria South Africa Chamber of Commerce. He emphasized on the need for
corporate/business organizations to sufficiently appreciate the place of advertisement in
the survival of their business.

In the words of Kaufman (1980:3), “advertising is not chemistry, with rules and laws that,
if followed with reasonable precision, will lead to predictable results every time.
Advertising is not a panacea that can restore a poor product or rejuvenate a declining
market; it is not a substitute for sound business judgment nor is advertising merely the
words and pictures that appear in newspapers and magazines, on billboards and on
television screens. These are the means or the media that advertising uses to communicate
its information about products, services, and ideas to people: information designed to
persuade them make buying or action decisions. Advertising is the art and business of
persuasive communication”.

Nwaizugbo (2004:181) defines advertising as a process of presenting a product or idea to

a person or group of persons, some openly sponsored message (oral or visual) about a
product or seller. This message which is being presented is known as advertising.

Jefkins (1985:3) submitted that advertising is the means by which we make known what
we have to sell or what we want to buy.

Whereas, Kotler & Armstrong (2007:426) see advertising as any paid form of non-personal
presentation and promotion of ideas, goods, or services by an identified sponsor.

To Anyacho (2007:6), advertising is a form of communication through the media about

products, services, ideas paid for by an identified sponsor.

Wright, Winter & Zeigler (1983:8) see advertising as a powerful communication force and
a vital marketing tool, helping to sell goods, services, images and ideas (or ideals) through
channels of information and persuasion. By this definition, it’s noteworthy that advertising
never sells products but helps to sell products.

2.4.9 Studies on Product Appearance

Since the technology gaps between companies become smaller and companies are able to
produce products that are similar with respect to features, quality, and costs (i.e., price),
the companies are searching for ways to gain a sustainable competitive advantage in the
hope of protecting or improving their market positions (Kotler and Rath 1984; Veryzer
1995).
Thus, as an important determinant of consumer behavior, the form or design of a product
may contribute to its success in several ways. In complicated markets such as electronic
consumer goods, household appliances etc., product form is one way to gain consumer
notice (Bloch 1995). Berkowitz (1987) gives Braun (German consumer electronics
manufacturer) and Zenith (Swiss watch producer) as examples to emphasize how a
company can capture large amounts of market share by attracting customers with
innovative designs and distinguishing appearances, most of which are permanently
displayed at Museum of Modern Art, New York (Berkowitz, 1987).

Swatch also used a range of unusual product forms to successfully stand out in the market
for wristwatches (Bloch 1995). With new product offerings, a distinctive design may force
competing designs to become obsolete and may help a company gain advantage in
competing with the new competitors, since the newly designed products will catch the
consumers’ attention easier (Midgley 1977 in Bloch 1995).

According to Car Magazine Online, Ford revealed its new design philosophy: “Kinetic
Design”, the successor of “Edge Design”, in 2008. New philosophy drew immediate
attention of consumers with its distinctive product appearance, and changed the aesthetic
values in automotive industry, which forced existing brands to develop new design
philosophies to compete.

According to Berkowitz (1987), especially in aggressive price markets, design variants of

size, color, shape, packaging, features and accessories (i.e., product appearance) are a basic
means for creation of the differential advantage which sells new products and enables firms
to cope with demographic, social, cultural and economic changes (Berkowitz 1987).

The form or exterior appearance of a product is important as a way of communicating

information to consumers (Nussbaum 1993). According to Kotler and Rath (1984), a
product’s appearance also helps companies develop corporate and brand identities.
Companies, such as IBM, Herman Miller, Olivetti, Bang&Olufsen and Mazda have
distinctive design philosophies which help them develop and reinforce a recognizable
character and thus “stand out from the crowd” (Kotler and Rath 1984).

2.4.10 Studies on Product Quality

Parasurman 1990 Quality is defined as the interaction between the customer and the service
provider, since the customer sees the service quality through comparing his expectations
of this service with the actual performance.

(Dade) 1994 P.3 Or it’s the characteristics and specifications of a product or a service that
generates the ability to fill explicit and implied needs Quality is reaching the gap between
the consumers’ expectations for the product’s quality and their realization of the actual
performance of that product.

(Parasurman, et.al ) (Tenner) 1995 defines it as an essential working strategy largely

understood in the consumers’ expectations in and outside whether these expectations are
explicit or implied.

(Evans) 1997 sees quality as the mark for using any product or service that has to meet the
consumers’ expectations.

(Heazer & render ) 2001 Many researchers addressed the concept of quality defined quality
as the overall characteristics of a product (service or a ware) that shows and reflect the
product’s capacity to fulfill explicit and ismplied needs.
Muhammed Ashioni) 2005 Quality is the constant development of the product the meet up
with the consumer needs with the least costs (Basics on total quality control & total quality
management.

(Hoffman, Bateson) 2011, p:4 Quality is a standard of correspondence between the actual
performance of the service with the customers’ expectations or the difference between the
customers’ expectations and their realization of the service’s actual performance.
 Chapter -3
Industry and Organization profile
3.1 Automobile Industry
In the automobile sector, customer centricity is the hallmark of good business. Constantly
learning from contemporary trends and evolving consumer expectations is obliging. After-
sales services provided by an automaker has now become a key factor in the consumer’s
buying decision, thereby playing a critical role in creating new benchmarks, and bringing
the brand closer to its customers.

The automotive industry is a wide range of companies and organizations involved in

the design, development, manufacturing, marketing, and selling of motor vehicles, some
of them are called automakers. It is one of the world's most important economic
sectors by revenue. The automotive industry does not include industries dedicated to the
maintenance of automobiles following delivery to the end-user, such as automobile repair
shops and motor fuel filling stations.
The automotive industry began in the 1860s with hundreds of manufacturers that pioneered
the horseless carriage. For many decades, the United States led the world in total
automobile production. In 1929, before the Great Depression, the world had 32,028,500
automobiles in use, and the U.S. automobile industry produced over 90% of them. At that
time the U.S. had one car per 4.87 persons. After World War II, the U.S. produced about
75 percent of world's auto production. In 1980, the U.S. was overtaken by Japan and then
became world's leader again in 1994. In 2006, Japan narrowly passed the U.S. in production
and held this rank until 2009, when China took the top spot with 13.8 million units. With
19.3 million units manufactured in 2012, China almost doubled the U.S. production, with
10.3 million units, while Japan was in third place with 9.9 million units. From 1970 (140
models) over 1998 (260 models) to 2012 (684 models), the number of automobile models
in the U.S. has grown exponentially.
Safety is a state that implies to be protected from any risk, danger, damage or cause of
injury. In the automotive industry, safety means that users, operators or manufacturers do
not face any risk or danger coming from the motor vehicle or its spare parts. Safety for the
automobiles themselves, implies that there is no risk of damage. Safety in the automotive
industry is particularly important and therefore highly regulated. Automobiles and
other motor vehicles have to comply with a certain number of norms and regulations,
whether local or international, in order to be accepted on the market. In case of safety
issues, danger, product defect or faulty procedure during the manufacturing of the motor
vehicle, the maker can request to return either a batch or the entire production run. This
procedure is called product recall. Product recalls happen in every industry and can be
production-related or stem from the raw material.

Around the world, there were about 806 million cars and light trucks on the road in 2007,
consuming over 980 billion litres (980,000,000 m3) of gasoline and diesel fuel yearly. The
automobile is a primary mode of transportation for many developed economies. The
Detroit branch of Boston Consulting Group predicts that, by 2014, one-third of world
demand will be in the four BRIC markets (Brazil, Russia, India and China). Meanwhile, in
the developed countries, the automotive industry has slowed down.

It is also expected that this trend will continue, especially as the younger generations of
people (in highly urbanized countries) no longer want to own a car anymore, and prefer
other modes of transport. Other potentially powerful automotive markets
are Iran and Indonesia. Emerging auto markets already buy more cars than established
markets. According to a J.D. Power study, emerging markets accounted for 51 percent of
the global light-vehicle sales in 2010. The study, performed in 2010 expected this trend to
accelerate. However, more recent reports (2012) confirmed the opposite; namely that the
automotive industry was slowing down even in BRIC countries. In the United States,
vehicle sales peaked in 2000, at 17.8 million units.

One bad after-sales service experience can drive them away to competitive brands.
Therefore, it clearly is an instrumental component to retain existing customers and explore
potential ones. Like a glue that keeps customer relationships intact. Customers also aims
to have a long association with brands they use, thus shifting the limelight on after-sales
service. Owing to busy schedules and changed lifestyles, consumers are reluctant to follow
the same format. They expect manufacturers to offer services including a pick and drop,
with a turnaround time of less than 24 hours. To gain a competitive edge and yield positive
sales in the industry, automakers could look at moving up the ladder from customer delight
to customer engagement.

Force Motors manufactures a range of vehicles including Small Commercial Vehicles

(SCV), Light Commercial Vehicles (LCV), Multi Utility Vehicles (MUV), Special Cross-
Country Vehicles and Agricultural Tractors, Tour Operators, Taxi drivers, School, Staff
Transport, Shop & Establishment, Hospitals, Caravan target market for this segment. Since
the vehicle Tata Motors, Eicher Motors, other popular LCVs that have been launched in
India are Ashok Leyland, Tata Motors.

In the Traveller range of vehicles, passenger travellers have been a solid performer in the
segment. Tourist and Travels swear by the comfort it offers and School Bus operators value
it for its economical running cost and therefore it has become the LCV to beat. All others
LCVs pose a threat to the Force Motors.

Automobile Industry In India

The Indian auto industry became the 4th largest in the world with sales increasing 9.5 per
cent year-on-year to 4.02 million units (excluding two wheelers) in 2017. It was the 7th
largest manufacturer of commercial vehicles in 2017. The Two Wheelers segment
dominates the market in terms of volume owing to a growing middle class and a young
population. Moreover, the growing interest of the companies in exploring the rural markets
further aided the growth of the sector. India is also a prominent auto exporter and has strong
export growth expectations for the near future. Overall automobile exports from India grew
at 6.86 per cent CAGR between FY13-18. In addition, several initiatives by the
Government of India and the major automobile players in the Indian market are expected
to make India a leader in the two wheeler and four wheeler market in the world by 2020.

Contribution To The Country

The $ 93 billion automotive industry contributes 7.1% to India‘s GDP and almost 49% to
the nation‘s total manufacturing GDP (FY 2016-17).As a major employment generator,
GDP contributor and FDI earner, the automotive industry is instrumental in shaping the
country‘s economy and hence regarded as a 'Sunrise sector' under Make in India. In order
to further promote the sector, initiatives are being undertaken by the Government of India
to promote innovation and R&D and create a favourable policy regime to make India a
prominent manufacturer of Automobile in world wide. The Automobile Mission Plan2016
– 2026 envisages creating India as one of the top.Three automobile manufacturing centres
in the world with gross revenue of US $ 300 Billion by 2026. Policy Initiatives &
Investments Major Investments and FDI InflowsFDI Inflow the Automobile industry
witnessed a US $ 5.5 billion of FDI inflow into The country during April 2014 to March
2016.By 2020 $100 million FDI will be invested in the Indian Automobile industry.

Employment

The automotive industry in India has been on a growth trajectory with impressive spikes in
sales, production, and exports over the last two years. With an average production of
around 24 million vehicles, annually and employer of over 29 million people (direct and
indirect employment), the automotive sector in India is one of the largest in the world. India
is the largest tractor manufacturer, 2nd largest two- wheeler manufacturer, 2nd largest bus
manufacturer, 5th largest heavy truck manufacturer, 6th largest car manufacturer and 8th
largest commercial vehicle manufacturer. For every vehicle produced, direct and indirect
employment opportunities are created with employment of 13 persons for each truck, 6
persons for each car and 4 for each three- wheeler and one person for two-wheelers. The
$ 93 billion automotive industry contributes 7.1% to India‘s GDP and almost 49% to the
nation‘s total manufacturing GDP (FY 2017-18). As the automotive sector as a major
employment generator, GDP contributor and FDI earner, the automotive, industry is
instrumental in shaping the country‘s economy and hence regarded as a 'Sunrise sector'
under, Make in India. In order to further promote the sector, initiatives are being
undertaken by the Government of India to promote innovation and R&D and create a
favourable policy regime to make India a prominent manufacturing destination.
Growth
According to the data released by Society Of Indian Automobile Manufacturers (SIAM),
the Indian automotive industry produced a total of 26,402, 671 vehicles including the
passenger vehicles, commercial vehicles, three-wheeler, two-wheeler in April-February
2018 as against 23,078,120 in April-February 2017, registering a growth of 14.41 per cent
over the same period last year. The overall industry registered positive sales figures in the
period while the commercial vehicles, three-wheeler, two-wheeler industry saw double
digit growth in the domestic market compared to sales in April-February 2017.The sale of
passenger vehicles grew by 8.04 per cent in April-February 2018 over the same period last
year. Within the passenger vehicles, passenger cars, utility vehicles and vans grew by 3.62
per cent, 21.34 per cent and 4.25 per cent respectively in April-February 2018 over the
same period last year. The over commercial vehicle segment grew by 19.30 per cent April-
February 2018 as compared to the same period last year. The Medium and Heavy
Commercial Vehicles (M&HCV) grew by 11.91 per cent and light commercial vehicles
grew by 24.64 per cent in April-February 2018 over the same period last year. The three-
wheeler segment saw a growth of 19.11 per cent April-February 2018 over April-February
2017. Within the three-wheeler segment, Passenger Carriers and Goods Carrier sales
registered a growth of 22.36 per cent and 6.80 per cent in April-February 2018 over the
same period last year.

Note: FY18* - up to February 2018

Source: Society of Indian Automobile Manufacturers (SIAM)

 The automotive manufacturing industry comprises the production of commercial

vehicles, passenger cars, three & two-wheelers.
 Two-wheelers are by far the most popular form of vehicle in India, taking an 80 per
cent share in 2015-16. India became the largest two-wheeler market in the world
after selling 17.7 million two-wheelers in 2016.
 25.3 million Automobiles produced in FY17.
 Total production volume grew at a CAGR of 4.43 per cent during FY12-17.

 Automobile exports from India increased 15.81 per cent year-on-year in April-
February 2017-18. During the same period, two and three-wheelers exports increased
20.30 per cent and 37.02 per cent, respectively.

Prospect To Export

India is also a prominent auto exporter and has strong export growth expectations for the
near future. In April-March 2017, overall automobile exports grew by 1.91 per cent. PV,
Commercial Vehicles (CV), and Two Wheelers (2W) registered a growth of 5.24 per cent,
16.97 per cent, and 0.97 per cent respectively in April-March 2016 over April-March
2017.* In addition, several initiatives by the Government of India and the major automobile
players in the Indian market are expected to make India a leader in the 2W and Four
Wheeler (4W) market in the world by 2020 (ACMA, 2015).

Market Size
Overall domestic automobiles sales increased at 7.01 per cent CAGR between FY13-18
with 24.97 million vehicles getting sold in FY18.The auto industry is set to witness major
changes in the form of electric vehicles (EVs), shared mobility, Bharat Stage-VI emission
and safety norms. Electric cars in India are expected to get new green number plates and
may also get free parking for three years along with toll waivers. Sales of electric two-
wheelers are estimated to have crossed 55,000 vehicles in 2017-18. Premium motorbike
sales in India crossed one million units in FY18.

Investments

In order to keep up with the growing demand, several auto makers have started investing
heavily in various segments of the industry during the last few months. The industry has
attracted Foreign Direct Investment (FDI) worth US$ 18.413 billion during the period April
2000 to December 2017, according to data released by Department of Industrial Policy and
Promotion (DIPP).Some of the recent/planned investments and developments in the
automobile sector in India are as follows:
 Ashok Leyland has planned a capital expenditure of Rs 1,000 crore (US$ 155.20
million) to launch 20-25 new models across various commercial vehicle categories in
2018-19.

 Mahindra & Mahindra (M & M) is planning to make an additional investment of Rs

500 crore (US$ 77.23 million) for expanding the capacity for electric vehicles in its
plant in Chakan.

Government Initiatives
The Government of India encourages foreign investment in the automobile sector and
allows 100 per cent FDI under the automatic route. Some of the recent initiatives taken by
the Government of India are -

 The Government of Karnataka is going to obtain electric vehicles under FAME

Scheme and set up charging infrastructure across Bengaluru, according to Mr. R V
Deshpande, Minister for Large and Medium Industries of Karnataka.
 The Ministry of Heavy Industries, Government of India has shortlisted 11 cities in the
country for introduction of electric vehicles (EVs) in their public transport systems
under the FAME (Faster Adoption and Manufacturing of (Hybrid) and Electric
Vehicles in India) scheme. The government will also set up incubation center for
startups working in electric vehicles space.

 Energy Efficiency Services Limited (EESL), under Ministry for Power and New and
Renewable Energy, Government of India, is planning to procure 10,000 e-vehicles via
demand aggregation, and has already awarded contracts to Tata Motors Ltd for 250 e-
cars and to Mahindra and Mahindra for 150 e-cars.

 The government is planning to set up a committee to develop an institutional

framework on large-scale adoption of electric vehicles in India as a viable clean energy
mode, especially for shared mass transport, to help bring down pollution level in major
cities.
 Organization Profile
3.2 Maruti Suzuki India Limited

Maruti Suzuki India Limited, formerly known as Maruti Udyog Limited, is an

automobile manufacturer in India. It is a 56.21% owned subsidiary of the Japanese car and
motorcycle manufacturer Suzuki Motor Corporation. As of July 2018, it had a market
share of 53% of the Indian passenger car market. Maruti Suzuki manufactures and sells
popular cars such as the Ciaz, Ertiga, Wagon R, Alto K10, Swift, Celerio, Swift
Dzire, Baleno and Baleno RS, Omni, Alto 800, Eeco, Ignis, S-Cross. The company is
headquartered at New Delhi. In May 2015, the company produced its fifteen millionth
vehicle in India, a Swift Dzire.

History

Logo of Maruti Udyog

Maruti was established in February 1981 with production starting in 1983 with the Maruti
800, based on the Suzuki Alto car. As of May 2007, the Government of India, through
Ministry of Disinvestment, sold its complete share to Indian financial institutions and no
longer has any stake in Maruti Udyog.
Maruti Suzuki

Type Public

Traded as : BSE: 532500

NSE: MARUTI

Industry Automotive

Parent Parent : Suzuki Motor Corporation

Founded 1981; 38 years ago

Headquarters New Delhi, India

Key People R. C. Bhargava (Chairman) ,Kenichi

Ayukawa (Managing Director & CEO)

Products Products : Automobiles.

Revenue 79,606 crores INR (2019)

Affiliation with Suzuki

In 1982, a license and joint venture agreement (JVA) was signed between Maruti Udyog
Ltd, and Suzuki of Japan. At first, Maruti Suzuki was mainly an importer of cars. In India's
closed market, Maruti received the right to import 40,000 fully built-up Suzuki in the first
two years, and even after that the early goal was to use only 33% indigenous parts. This
upset the local manufacturers considerably. There were also some concerns that the Indian
market was too small to absorb the comparatively large production planned by Maruti
Suzuki, with the government even considering adjusting the petrol tax and lowering the
excise duty in order to boost sales. Finally, in 1983, the Maruti 800 was released. This
796 cc hatchback was based on the SS80 Suzuki Alto and was India's first affordable car.
Initial product plan was 40% saloons, and 60% Maruti Van Local production commenced
in December 1983. In 1984, the Maruti Van with the same three-cylinder engine as the 800
was released and the installed capacity of the plant in Gurgaon reached 40,000 units.
In 1985, the Suzuki SJ410-based Gypsy, a 970 cc 4WD off-road vehicle, was launched. In
1986, the original 800 was replaced by an all-new model of the 796 cc hatchback Suzuki
Alto and the 100,000th vehicle was produced by the company. In 1987, the company
started exporting to the West, when a lot of 500 cars were sent to Hungary. By 1988, the
capacity of the Gurgaon plant was increased to 100,000 units per annum.

Market liberalization

In 1989, the Maruti 1000 was introduced and the 970 cc, three-box was India's first
contemporary sedan. By 1991, 65 per cent of the components, for all vehicles produced,
were indigenized. After liberalization of the Indian economy in 1991, Suzuki increased its
stake in Maruti to 50 per cent, making the company a 50-50 JV with the Government of
India the other stake holder.
In 1993, the Zen, a 993 cc, hatchback was launched and in 1994 the 1298 cc Esteem was
introduced. Maruti produced its 1 millionth vehicle since the commencement of production
in 1994. Maruti's second plant was opened with annual capacity reaching 200,000 units.
Maruti launched a 24-hour emergency on-road vehicle service. In 1998, the new Maruti
800 was released, the first change in design since 1986. Zen D, a 1527 cc diesel hatchback
and Maruti's first diesel vehicle and a redesigned Omni were introduced. In 1999, the
1.6 litre Maruti Baleno three-box saloon and Wagon R were also launched.
In 2000, Maruti became the first car company in India to launch a Call Center for internal
and customer services. The new Alto model was released. In 2001, Maruti True Value,
selling and buying used cars was launched. In October of the same year the Maruti
Versa was launched. In 2002, Esteem Diesel was introduced. Two new subsidiaries were
also started: Maruti Insurance Distributor Services and Maruti Insurance Brokers Limited.
Suzuki Motor Corporation increased its stake in Maruti to 54.2 per cent.
In 2003, the new Suzuki Grand Vitara XL-7 was introduced while the Zen and the Wagon
R were upgraded and redesigned. The four millionth Maruti vehicle was built and they
entered into a partnership with the State Bank of India. Maruti Udyog Ltd was Listed on
BSE and NSE after a public issue, which was oversubscribed tenfold. In 2004,
the Altobecame India's best selling car overtaking the Maruti 800 after nearly two decades.
The five-seater Versa 5-seater, a new variant, was created while the Esteem was re-
launched. Maruti Udyog closed the financial year 2003-04 with an annual sale of 472,122
units, the highest ever since the company began operations and the fiftieth lakh (5
millionth) car rolled out in April 2005. The 1.3 litre Suzuki Swift five-door hatchback was
introduced in 2005.
In 2006 Suzuki and Maruti set up another joint venture, "Maruti Suzuki Automobiles
India", to build two new manufacturing plants, one for vehicles and one for
engines. Cleaner cars were also introduced, with several new models meeting the new
"Bharat Stage III" standards. In February 2012, Maruti Suzuki sold its ten millionth vehicle
in India. In July 2014 it had a market share of more 45%.
Maruti Suzuki is now looking to shift its current manufacturing facility located in the
downtown Gurgaon as apparently it is short of space and logistics. It is hunting for a huge
700 acres of plot of land.
Sales and service network
Maruti Suzuki has 1,820 sales outlets across 1,471 cities in India. The company aims to
double its sales network to 4,000 outlets by 2020. It has 3,145 service stations across 1,506
cities throughout India. Maruti's dealership network is larger than that of Hyundai,
Mahindra, Honda, Tata, Toyota and Ford combined. Service is a major revenue generator
of the company. Most of the service stations are managed on franchise basis, where Maruti
Suzuki trains the local staff. Other automobile companies have not been able to match this
benchmark set by Maruti Suzuki. The Express Service stations help many stranded vehicles
on the highways by sending across their repair man to the vehicle.
Maruti Insurance
Launched in 2002 Maruti Suzuki provides vehicle insurance to its customers with the help
of the National Insurance Company, Bajaj Allianz, New India Assurance and Royal
Sundaram. The service was set up the company with the inception of two subsidiaries
Maruti Insurance Distributors Services Pvt. Ltd and Insurance Brokers Pvt. Limited
This service started as a benefit or value addition to customers and was able to ramp up
easily. By December 2005 they were able to sell more than two million insurance policies
since its inception.
Maruti Finance
To promote its bottom line growth, Maruti Suzuki launched Maruti Finance in January
2002. Prior to the start of this service Maruti Suzuki had started two joint ventures Citicorp
Maruti and Maruti Countrywide with Citi Group and GE Countrywide respectively to assist
its client in securing loan. Maruti Suzuki tied up with ABN Amro Bank, HDFC Bank,
ICICI Limited, Kotak Mahindra, Standard Chartered Bank, and Sundaram to start this
venture including its strategic partners in car finance. Again the company entered into a
strategic partnership with SBI in March 2003 Since March 2003, Maruti has sold over
12,000 vehicles through SBI-Maruti Finance. SBI-Maruti Finance is currently available in
166 cities across India.
Citicorp Maruti Finance Limited is a joint venture between Citicorp Finance India and
Maruti Udyog Limited its primary business stated by the company is "hire-purchase
financing of Maruti Suzuki vehicles". Citi Finance India Limited is a wholly owned
subsidiary of Citibank Overseas Investment Corporation, Delaware, which in turn is a
100% wholly owned subsidiary of Citibank N.A. Citi Finance India Limited holds 74% of
the stake and Maruti Suzuki holds the remaining 26%. GE Capital, HDFC and Maruti
Suzuki came together in 1995 to form Maruti Countrywide. Maruti claims that its finance
program offers most competitive interest rates to its customers, which are lower by 0.25%
to 0.5% from the market rates.
Maruti TrueValue
Maruti True service offered by Maruti Suzuki to its customers. It is a market place for used
Maruti Suzuki Vehicles. One can buy, sell or exchange used Maruti or Non Maruti vehicles
with the help of this service in India. As of 10 August 2017 there are 1,190 outlets across
936 cities.

Awards and recognition

The Brand Trust Report published by Trust Research Advisory, a brand analytics company,
has ranked Maruti Suzuki in the thirty seventh position in 2013 and eleventh position in
2014 among the most trusted brands of India.
Viewers' Choice Car of the Year published by CNBC-TV18 OVERDRIVE, Overdrive is
Indias No.1 Auto Publication for Cars and Bikes in India, has awarded Maruti Suzuki
Baleno the Viewers' Choice Car of the Year 2016

Maruti Suzuki launches NEXA: A New Premium Automotive Experience

Maruti Suzuki India Limited (MSIL), leader in the Indian automobile industry, has
launched NEXA, its new premium sales channel. NEXA marks the first initiative by an
automobile company to go beyond selling cars and create a new format of retail experience
for the customer. Nearly 100 NEXA showrooms will come up across India over the next
few years. Maruti Suzuki has consistently led the industry in terms of reach, depth and
quality of sales and service network. The high level of customer satisfaction at the network
has contributed to the Company achieving a market share in the range of 45%. To attain its
medium term goal of two million annual sales by 2020, the Company is taking new
initiatives in all areas of business. NEXA is one of the major initiatives. The Company is
reaching out to new segments of customers emerging in a changing India. Over the years,
Maruti Suzuki has relied on customer feedback to introduce new products and create new
categories. It was also the first to offer a bouquet of “solutions” to customers (insurance,
finance, trade-in of pre-owned cars) at its dealerships.
The next step is taking the lead in offering customers “experience”, through NEXA.
Customer feedback and surveys have shown there is a growing segment of car buying
Indians who desire and value personal care, warmth and attention in their car buying and
ownership experience. They want people, technology, showroom ambience and processes
to come together and offer them a “premium experience”. These customers want to be
pampered! NEXA is designed for this segment of customers. Maruti Suzuki India
Limited’s Managing Director & CEO, Kenichi Ayukawa said: “NEXA provides a new
experience of hospitality from Maruti Suzuki. Indian market and Indian society are rapidly
changing and new segments of customers are emerging. We have to take new initiatives to
meet diversifying expectations from our customers”. He added: “The mission of NEXA is
to offer innovative value and direction so that we can adequately respond to the new
segments of Indian customers and offer them the experience which they value. While we
will of course continue to enhance customer satisfaction in our current network, with
NEXA, I am confident Maruti Suzuki will be able to cater to a broader range of customers
who value pampering, innovation and a personal touch in their car owning experience”.
S-Cross, India’s first premium crossover that debuts in August 2015 will be the first car to
be sold under NEXA. Several new models will be added to both channels as part of the
Company’s medium term goal of 2 million annual sales by 2020. The NEXA Experience
– Many firsts NEXA is Maruti Suzuki’s pioneering initiative to create a new format of
premium automotive retail. While NEXA is best experienced by a personal visit, some
highlights are shared below.
NEXA is New Hospitality Experience: One of the core values of NEXA is pampering and
hospitality. Pampering is about listening to the customer; it is about understanding his
needs. The relationship managers have been trained to give the customer full attention
when in conversation and being there when the customer requires. Besides, they will also
exhibit qualities such as warmth, respect, courtesy and punctuality. Special attention has
been accorded to maintaining customer privacy while the conversations are on. Specially
designed cubicles and separate seating area fulfils this objective. NEXA is New “Lifetime”
Experience: The Relationship Manager will ensure that the entire buying, after sales and
ownership experience is smooth and hassle free. To ensure this the NEXA team has been
trained using in-depth and holistic modules developed by ace trainer Dale Carnegie.
Another interesting feature is MyNEXA, a loyalty program that has been designed to offer
rewards and recognition beyond the automotive industry. Through co-branded credit cards
and tie-ups with lifestyle brands, MyNEXA makes the NEXA relationship more rewarding.
NEXA is New Digital Experience: NEXA will be one of the most digitally and
technologically advanced buying experiences for automobile customers. Equipped with
state-of-the-art ipads, every Relationship Manager will deliver outstanding in-store
experience. Going paper less, the car configurator provides a virtual experience to the
customer. From Apple TVs that easily mirror ipads to a digital welcome when he comes in
for delivery, the customer lives through a delightful virtual experience during his stay at
NEXA.
NEXA Owner’s App, a Smart Phone Application is another technology enabler which
helps the customer to recall service history, emergency support, accessory purchase, event
updates, booking and manage service requests and even a choice of favourite music. NEXA
is New Design Experience: NEXA showrooms have been designed in a black and white
prestige monochromatic theme that showcases the displayed vehicles in their full glory.
Special attention has been given to in store lighting. The entire spotlight is on the car. A
dedicated in-showroom delivery area, with LEDs and music, brightens up the customer’s
biggest moment of joy – car delivery - manifold. Interestingly, at the NEXA showroom the
customer’s first journey in his new vehicle starts when he drives out from a premium air-
conditioned showroom.
3.2.9 Product Line

Ciaz

Ertiga
Wagon R,

Alto K10,
Swift,

Celerio
Swift Dzire,

Baleno ,

Omni,
Ignis,

S-Cross.

Strengths in the SWOT analysis of Maruti Suzuki

 Maruti Udyog limited (MUL) is in a leadership position in the market with a market
share of 48.74
 Major strength of MUL is having largest network of dealers and after sales service
centers in the country.
 Good promotional strategy is adopted by MUL to transfer its thoughts to
the people about its products.
 Maruti Suzuki recorded highest number of domestic sales with 9,66,447 units from
7,65,533 units in the previous fiscal. It recently attained the 10million domestic
sales mark.
 Strong Brand Value and Loyal Customer Base are big strengths for MUL
 There are around 15 vehicles in Maruti Product portfolio. Has good product lines
with good fuel efficiency like Maruti Swift, Diesel, Alto etc
  Alto still beats the small car segment with highest number of sales
 MUL is the first automobile company to start second hand vehicle sales through its
True-value entity.
 MUL has good market share and hence it’s after sales service is a major revenue
contributor.

Weaknesses in the SWOT analysis of Maruti Suzuki

 Low interior quality inside the cars when compared to quality players
like Hyundai and other new foreign players like Volkswagen,Nissan etc.
 Government intervention due to having share in MUL.
 Younger generations started getting a great affinity towards new foreign brands
 The management and the company’s labor unions are not in good terms. The recent
strikes of the employees have slowed down production and in turn affecting sales.
 Maruti hasn’t proved itself in SUV segment like other players.

Opportunities in the SWOT analysis of Maruti Suzuki

 MUL has launched its LPG version of Wagon R and it was a good move
simultaneously
 MUL can start R&D on electric cars for a much better substitute of the fuel.
 Maruti’s cervo 600 has a huge potential in tapping the middle class segment and
act as a strong threat to Nano
 New DZire from Maruti will capture the market share and expected to create the
same magic as Maruti Esteem(currently not available)
 Export capacity of the company is giving new hopes in American and UK markets
 Economic growth of the country is constantly increasing and the government is
working hard to increase the gdp to double digit.

Threats in the SWOT analysis of Maruti Suzuki

 MUL recently faced a decline in market share from its 50.09% to 48.09 % in the
previous year(2018)
 Major players like Maruti Suzuki, Hyundai, Tata has lost its market share due to
many small players like Volkswagen- polo. Ford has shown a considerable
increase in market share due to its Figo.
 China may give a good competition as they are also planning to enter into Indian
car segment
 Launch of Hyundai’s H800 may result in the decline of Alto sales

Nexa Kottayam -- Company Profile
**********************************

Organization chart *************************

 Chapter 4
Research Methodology
4.1 RESEARCH

Research is defined as “a scientific and systematic search for pertinent information on

specific topic”. Research is an art of scientific investigation. Research is a systemized effort
to gain new knowledge. It is a careful inquiry especially through search for new facts in
any branch of knowledge. The search for knowledge through objective and systematic
method of finding solutions through a problem is research.

Research methodology offers to the method of gathering data through intensive

interviewing and other methods. Knowledge from expert persons was also sought from
the organization. The data collected were analysed with the parameters of evolution
model to prepare the final report. Research in common parlance refers to a search for
knowledge. Once can also define research as a scientific and systematic search for
pertinent information on a specific topic. In fact, Research is an art of scientific
investigation. The Advanced Learner’s Dictionary of Current English lays down the
meaning of research as “a careful investigation or inquiry especially through search for
new facts in any branch of knowledge.”
Research methodology is a way to systematically solve the research problem. It may be
understood as a science of studying how research is done scientifically. “Research
methodology is a method of studying problems whose solutions are to be desired partly
or wholly from facts. These facts may be statements of opinions, historical facts, those
contained in records and reports, the results of tests, answers to questionnaire,
experimental data of any sort, and so forth”(W.S Monroe)

4.2 RESEARCH DESIGN

4.2.1 Overall Typology

The study is a descriptive one. The main aim behind the study was to measure the
Effectiveness of advertisement on consumer buying behavior with special reference to
Maruti Suzuki Premium Products – Nexa in Kottayam city. .Throughout the study
various factors influencing the same are analyzed and their relationship with the topic is
studied. The study collects opinion from the general public to identify their response.
The respondent is personally connected and the data is collected through a structured
questionnaire

Descriptive study is a fact – finding investigation with adequate interpretation. It is the

simplest type of research. It is more specific than an exploratory study, as it has focus on
particular aspects or dimensions of the problem studied. Data are collected by using one
or more appropriate methods: observation, interviewing and mail questionnaire. The main
characteristic of this method is that researcher has no control over the variables; he can
only report what has happened or what is happening.

4.3 SOURCES OF DATA

Primary Data- Structured Questionnaire

The structured questionnaire was used to obtain primary data from the general public. It
was distributed among the natives of Kottayam city .

Secondary data:

The secondary data was collected from company websites, organizational manuals,
previous reports and journals.

4.3.1 Methods of Data Collection

Primary Data
The instrument used for primary data collection was a structured questionnaire. The
questionnaire contained 37 questions. The information was received directly from the
respondents. In this study primary data was collected from the natives of Kottayam City
with the help of the questionnaire.

Secondary Data
Secondary data was collected from the company website, product catalogue, business
journals, research reports etc.

4.4 RESEARCH INSTRUMENTS

The research instruments of this study are,

Interview method:
The interview method of collecting data involves presentation of oral-verbal stimuli and
reply in terms of oral-verbal responses. The method can be used through personal
interviews and telephone interview. The interview method of research, typically,
involves a face-to-face meeting in which a researcher (interviewer) asks an individual a
series of questions.
Questionnaires:
Questionnaire is designed to collect data concerning personal preferences, social
attitudes, belief, opinions, behaviour patterns, group practices and habits, and such other
information’s, from large diverse and widely scattered group of people. The researcher
used self- prepared questionnaire as the tool of data collection. A questionnaire is a list
of questions, usually printed, submitted for replies that can be analysed for usable
information

4.5 SAMPLING PLAN

4.5.1 Sample Unit

The sample unit selected was 120 natives from the Kottayam City.
4.5.2 Sample Size
The sample size taken for this study is 120 respondents from Kottayam city.
4.5.3 Sampling Procedure
The sampling procedure used in this study was convenience sampling. It is a non-
probability sampling technique and it involves deliberate selection of particular units
from the universe for constituting a sample.

4.6 TOOL FOR DATA COLLECTION

Questionnaire is a quite popular method of data collection particularly in case of big

enquires. Questionnaire is a formal list of questions for research. The structured
questionnaire is used in this study. This approach employs a standardized questionnaire
to collect data on benefits, feelings and attitudes from the respondents. The purpose of
study is explained clearly to the respondents.
Advantages of Questionnaire Method

 It is free from the bias of the interviewer answers are in respondents own words.
 Respondents have adequate time to give well thought out answers.
 Respondents who are not easily approachable can also be reached conveniently.
 There is low cost even when the universe is large and widely spread geographically.
 Large samples can be made use of and thus the results can be made more dependable
and reliable.
4.7 DATA ANALYSIS TOOLS

******************************************************************

4.8 PERIOD OF STUDY

The present study had been undertaken for period of 45 days from December to January.
On the first phase of the study is identifying the problem. The second phase collecting
the questionnaire and interpreting it by using different statistical tools and giving the
findings and recommendations.