A

RESEARCH REPORT

On

STUDY OF CONSUMER BEHAVIOUR

TOWARDS
Hero Honda splendor + bike

Submitted to
KURUKSHETRA UNIVERSITY, KURUKSHETRA
In the partial fulfillment of the requirement
for the award of the degree of
MASTERS IN BUSINESS ADMINISTRATION

Submitted to: Submitted by:

Ms. DOLLY AJAY PAL
Faculty, MBA
MBA dept Roll no 2008002.
Uni.rollno

SETH JAI PARKASH MUKAND LAL

INSTITUTE OF ENGINEERING AND TECHNOLOGY
(Approved By AICTE, Affiliated by Kurukshetra University, Kurukshetra)

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 ACKNOWLEDGEMENT

In this present world of competition there is a race of existence in which those who are having will to come
forward will succeed. The research project is a bridge between practical and theoretical working, with this
will we have started on the same. We really wish to express my gratitude towards all those people who
have helped me.
We are really indebted to Dr. Randhir Singh, worthy Principal, JMIT, RADAUR, for his kind hearted
approach.
We are also very thankful to Dr. Vandana, faculty, MBA for her timely guidance & encouragement that
have helped us to get this golden opportunity and who provided us her expert advice, inspiration & moral
support in spite of her busy schedule & assignments, has mainly provided us understanding of this research
project.

DINESHBAJAJ
SANDEEP NEGI

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 Review literature

V S.Ramswamy, S. Namakumari Observed in their book given much

importance to consumers and observed that “concern for the
consumer is the essence of the marketing concept. As such when a
firm practices the Marketing concept, it automatically takes full care of
the interest of the consumer and there is no need or scope for the
consumers to get organized in their defense. In fact when a firm
practices the marketing concept, the attempts if any, by interest
groups to fight the firm and its products will fizzle out quickly, since
consumers at large would reject any accusation against the firm and
its products. Only because several firms functioned
against the tenets of the marketing concept, consumerism gained
ground. That is why Drucker said that ‘Consumerism is the shame of
marketing ’if marketing is practiced as per the marketing concept, the
very
motive for consumerism will disappear. A firm practicing the marketing
concept would not only be sensitive to consumer attitudes, but would
also anticipate these attitudes and adjust its marketing accordingly;
and it would proceed on the assumption that what is good for the
consumer is good for the firm. Such an approach would evidently
remove the very raison d ’être of
consumerism. Jha sing; in his book Marketing Management in Indian
Perspective pointed out the imbalance in the marketing practices and
thought .
Today , Fallacy is found true that in the Indian
conditions or generally in the developing nations, the marketing
practices are meant only for a few consumer goods. This narrowness

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in the concept deprives the consumers of that exercise of choice,
which compels the producer to attempt to strive for efficiency and
quality. Not only this, it also deprives the producers and marketers to
develop their faculties. The retarded developments of the marketing
strategies invite imbalance in the production function and
consequently, they face the stages of under-Production or over-
production.
Further, we also find contraction in the field of
competition, which closes doors for the qualitative transformation. No
doubt, the Indian producers face the problem of scarcity of resources.
And further fail to develop the suitable marketing practices, which in
turn deprive the producers of the profitable prices and the consumers,
the quality and economy. In a good number of cases, the developing
economies are agriculture oriented. The poor developments in the field
of marketing also affect their farm sector. Generally, the
commercialization of the farm products is delayed which restricts
the flow of capital in this sector Vis a-Vis limits avenues for the
scientific
and mechanized cultivation.

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 CONTENTS page no

• Consumer behavior

12

• Consumer satisfaction

34

• Company’s Profile

37

• Topic Introduction

44

• Objective of the Study

47

• Research Methodology

49

A. Research Design

B. Sampling Design

C. Data Collection

• Data Analysis & Interpretation

56

• Findings

66

• Limitations

69

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• Suggestions

71

• Conclusion

73

• Appendix---- Questionnaires

75

• Bibliography

78

CONSUMER BEHAVIOR

Before getting into details of Consumer Behaviour, one

must go through certain basic terminologies. In general terms
both ‘Consumer’ and ‘Customer’ are considered the same but
they are quite different.
The term ‘Customer’ is some what different from the
term ‘consumer’. The term customer is used to refer to
someone who purchases goods and services from a particular
store or company. Thus a customer is defined in terms of a
specific term while a consumer is not
‘Consumer’ may be referred to any one engaged in
evaluating, acquiring, using or disposing of goods and services
which he expects will satisfy his needs.

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 So ultimately Consumers are that individual who consumes
or uses a product, which may or may not be purchased by him.
So after getting into these terms we need to get into the details
of “Consumer Behaviour”.
Consumer Behaviour – Consumer behaviour refers to how a
consumer behaves or acts or reacts in making a purchase of goods
and services of his choice in different situations

The term consumer Behaviour can be defined as, “The

behavior that consumers display in searching for purchasing,
using, evaluating and disposing of products, services and ideas
which they expect will satisfy their needs.”
- Leon G. Schiff man and Leslie
Lazar Kanuk.
The study of consumer behavior not only focuses on how
and why consumers make buying decisions, but also focuses on
the uses which consumers make of the goods they buy and their
evaluation of these goods after use. If the goods after use don’t
satisfy the consumers, they my feel dissatisfied perhaps
because post- purchase services are not up to their
satisfaction, and thus, this may influence their purchase of the
goods and it may also influence the buying decision of many
others who might come in contact with them. Buying Behavior is
the decision processes and acts of people involved in buying and
using products.Consumer Buying Behavior refers to the buying
behavior of the ultimate consumer. A firm needs to analyze
buying behavior for:

Buyer’s reactions to a firms marketing strategy has a great

impact on the firm’s success. The marketing concept stresses

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 that a firm should create a Marketing Mix (MM) that satisfies
(gives utility to) customers, therefore need to analyze the what,
where, when and how consumers buy. Marketers can better
predict how consumers will respond to marketing strategies.

1.1.2- Consumer Buying Process

Six Stages to the Consumer Buying Decision Process (For

complex decisions). Actual purchasing is only one stage of the
process. Not all decision processes lead to a purchase. All
consumer decisions do not always include all 6 stages,
determined by the degree of complexity...discussed next.

1. Problem Recognition (awareness of need) -- Difference

between the desired state and the actual condition. Deficit in
assortment of products. Hunger--Food. Hunger stimulates your
need to eat.
2. Information search--
o Internal search, memory.
o External search if you need more information. Friends and
relatives (word of mouth). Marketer dominated sources;
comparison shopping; public sources etc. A successful
information search leaves a buyer with possible
alternatives, the evoked set. Hungry, want to go out and
eat, evoked set is

 Chinese food
 Indian food

3. Evaluation of Alternatives -- Need to establish criteria for

evaluation, features the buyer wants or does not want.

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 Rank/weight alternatives or resume search. May decide that you
want to eat something spicy, Indian gets highest rank etc.
4. Purchase decision--Choose buying alternative, includes
product, package, store, method of purchase etc.
5. Purchase--May differ from decision, time lapse between 4 & 5,
product availability.
6. Post-Purchase Evaluation--outcome: Satisfaction or
Dissatisfaction. Cognitive Dissonance, have you made the right
decision. This can be reduced by warranties, after sales
communication etc. After eating an Indian meal, may think that
really you wanted a Chinese meal instead.

1.1.3- Types of Consumer Buying Behavior

Types of consumer buying behavior are determined by:

1. Level of Involvement in purchase decision. Importance and

intensity of interest in a product in a particular situation.
2. Buyers level of involvement determines why he/she is motivated
to seek information about a certain products and brands but
virtually ignores others.

The four type of consumer buying behavior are:

i. Routine Response/Programmed Behavior—It is described as

buying low involvement frequently purchased low cost items;
need very little search and decision effort; purchased almost

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 automatically. Examples include soft drinks, snack foods, milk
etc.
ii. Limited Decision Making—It means buying product
occasionally. When you need to obtain information about
unfamiliar brand in a familiar product category, perhaps.
Requires a moderate amount of time for information gathering.
Examples include Clothes--know product class but not the brand.
iii. Extensive Decision Making-- Complex high involvement,
unfamiliar, expensive and/or infrequently bought products. High
degree of economic/performance/psychological risk. Examples
include cars, homes, computers, education. Spend alot of time
seeking information and deciding.
Information from the companies MM; friends and relatives, store
personnel etc. Go through all six stages of the buying process.
iv. Impulse buying- means no conscious planning. Customer
suddenly feel the desire of the product. The purchase of the
same product does not always elicit the same Buying Behavior.
Product can shift from one category to the next

For example: Going out for dinner for one person may
be extensive decision making (for someone that does not go out
often at all), but limited decision making for someone else. The
reason for the dinner, whether it is an anniversary celebration,
or a meal with a couple of friends will also determine the extent
of the decision making.

1.1.4- Types of risk:

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 High involvement purchases--Honda Motorbike, high priced
goods, products visible to others, and the higher the risk the higher
the involvement.

1.1.5- Factors that Effect the Consumer Buying Decision

Process:

A consumer, making a purchase decision will be affected by the

following three factors:

1. Personal
2. Psychological
3. Social

The marketer must be aware of these factors in order to

develop an appropriate Marketing Management for its target market.

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 Personal Factors:
Factors that are unique to a particular person are personal
factors i.e. Demographic Factors- Sex, race, age, employment level
women initiation etc.

Psychological Factors: Factors related to the

attitude,perception of person are psychological factors. Psychological
factors include:

• Motives-

A motive is an internal energizing force that orients a person's

activities toward satisfying a need or achieving a goal.

Actions are effected by a set of motives, not just one. If

marketers can identify motives then they can better develop a
marketing mix.

MASLOW Hierarchy of needs!!

o Physiological
o Safety
o Social needs
o Self - Esteem
o Self - Actualization

Need to determine what level of the hierarchy the

consumers are at to determine what motivates their
purchase.

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• Perception-
Perception is the process of selecting, organizing and
interpreting information inputs to produce meaning. If we chose
what info we pay attention to, organize it and interpret it.
Information inputs are the sensations received through sight, taste,
hearing, smell and touch.

Selective Exposure- select inputs to be exposed to our

awareness. More likely if it is linked to an event, satisfies
current needs, intensity of input changes (sharp price
drop).

Selective Distortion- Changing/twisting current received

information, inconsistent with beliefs. Advertisers that use
comparative advertisements (pitching one product against
another), have to be very careful that consumers do not
distort the facts and perceive that the advertisement was
for the competitor.

Selective Retention-Remember inputs that support

beliefs, forgets those that don't. Average supermarket
shopper is exposed to 17,000 products in a shopping visit
lasting 30 minutes-60% of purchases are unplanned.
People are exposed to 1,500 advertisements per day. Can't
be expected to be aware of all these inputs, and certainly
will not retain many.

• Ability and Knowledge-

Need to understand individuals’ capacity to learn.

Learning, changes in a person's behavior caused by information

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 and experience. Therefore to change consumers' behavior about
your product, need to give them new information regarding your
product...free sample etc.

When making buying decisions, buyers must process

information.
Knowledge is the familiarity with the product and expertise.

Inexperience buyers often use prices as an indicator of

quality more than those who have knowledge of a product. Non-
alcoholic Beer example: consumers chose the most expensive
six-pack, because they assume that the greater price indicates
greater quality.Learning is the process through which a relatively
permanent change in behavior results from the consequences of
past behavior.

• Attitudes –
Person’s positive and negative feelings about an
object or activity-maybe tangible or intangible, living or non-
living is the attitude. Consistence behavior of person towards a
particular activity or event.

Individual learns attitudes through experience and interaction

with other people. Consumer attitudes toward a firm and its
products greatly influence the success or failure of the firm's
marketing strategy.

Attitudes and attitude change are influenced by consumers

personality and lifestyle. Consumers screen information that
conflicts with their attitudes. Distort information to make it
consistent and selectively retain information that reinforces our

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 attitudes. In case of brand loyalty, there is a difference between
attitude and intention to buy (ability to buy).

• Personality--
All the internal traits and behaviors that make a person
unique, uniqueness arrives from a person's heredity and
personal experience. Examples include: Compulsiveness, Self
confidence, Friendliness, Work holism, Adaptability,
Ambitiousness, Dogmatism, Authoritarianism, Introversion,
Extroversion, Aggressiveness, Competitiveness.

Traits affect the way people behave. Marketers try to

match the store image to the perceived image of their
customers.There is a weak association between personality and
Buying Behavior; this may be due to unreliable measures. Nike’s
ad. Consumers buy products that are consistent with their self
concept.

• Lifestyles—

Standard of living of people of the country influences the

buying behavior of consumers. Recent US trends in lifestyles are
a shift towards personal independence and individualism and a
preference for a healthy, natural lifestyle.

Lifestyles are the consistent patterns people follow in their lives.

Social Factors

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 Consumer wants, learning, motives etc. are influenced by
opinion leaders, person's family, reference groups, social class
and culture.

• Opinion leaders--

Spokes persons of a group of people or a party are the

opinion leaders. Marketers try to attract opinion leaders...they
actually use (pay) spokespeople to market their products.
Michael Jordon (Nike, McDonalds, Gatorade etc.)

• Roles and Family Influences--

Role takes you should do based on the expectations of you

from your position within a group. People have many
roles such as- Husband, father, employer/ee. Individuals
role are continuing to change therefore marketers must continue
to update information.

Family is the most basic group a person belongs to.

Marketers must understand:

• Many family decisions are made by the family unit

• Consumer behavior starts in the family unit
• Family roles and preferences are the model for children's
future family (can reject/alter/etc)
• Family buying decisions are a mixture of family
interactions and individual decision making
• Family acts an interpreter of social and cultural values for
the individual.

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 The Family life cycle: families go through stages; each
stage creates different consumer demands such as: bachelor
stage,newly married, young, no children...me, Modernized life
cycle includes divorced and no children.

Two Income Marriages Are Now the Norm

Because 2 income families are becoming more common,

the decision maker within the family unit is changing...also,
family has less time for children, and therefore tends to let
them influence purchase decisions in order to alleviate some
of the guilt. (Children influence about $130 billion of goods in
a year) Children also have more money to spend themselves.

• Reference Groups--

Individual identifies with the group to the extent that he

takes on many of the values, attitudes or behaviors of the group
members.Families, friends, civic and professional organizations.
Any group that has a positive or negative influence on a persons
attitude and behavior.

 Membership groups (belong to) Affinity marketing is

focused on the desires of consumers that belong to large
reference groups. Marketers get the groups to approve the
product and communicate that approval to its members.
Credit Cards etc.

 Aspiration groups (want to belong to) Disassociate

groups (do not want to belong to) Honda, tries to
disassociate from the "biker" group.

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 The degree to which a reference group will affect a
purchase decision depends on an individual’s susceptibility
to reference group influence and the strength of his/her
involvement with the group.

• Social Class--

Social class is an open group of individuals who have

similar social rank. US is not a classless society. Under US
criteria class can said to be - occupation, education, income,
wealth, race, ethnic groups and possessions.

Social class influences many aspects of our lives. Such as: upper
middle class Americans prefer luxury cars Mercedes.

• Upper Americans-upper-upper class, .3%, inherited

wealth, aristocratic names.
• Lower-upper class, 1.2%, newer social elite, from current
professionals and corporate elite
• Upper-middle class, 12.5%, college graduates, managers
and professionals
• Middle Americans-middle class, 32%, average pay white
collar workers and blue collar friends
• Lower Americans-lower class, 9%, working, not on welfare

Social class determines to some extent, the types, quality,

quantity of products that a person buys or uses.Lower class
people tend to stay close to home when shopping; do not
engage in much pre-purchase information gathering. Stores
project definite class images. Family, reference groups and social

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 classes are all social influences on consumer behavior. All
operate within a larger culture.

• Culture and Sub-culture--

Culture refers to the set of values, ideas, and attitudes

that are accepted by a homogenous group of people and
transmitted to the next generation.

Culture also determines what is acceptable with product

advertising. Culture determines what people wear, eat, reside
and travel. Cultural values in the US are good health, education,
individualism and freedom. In american culture time scarcity is a
growing problem. It change in meals. It gives big impact on
international marketing. Different society have different levels of
needs, different cultural values.Culture can be divided into
subcultures:

• geographic regions
• human characteristics such as age and ethnic background.

Culture effects what people buy, how they buy and when they
buy.

1.1.6- CONSUMER BEHAVIOR IN INDIA

India is a big country with 28 states, over one billion

people and 120 dialects/languages. From the market
perspective, people of India comprise different segments of
consumers, based on class, status, and income.

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 An important and recent development in India’s
consumerism is the emergence of the rural market for several
basic consumer goods. Three-fourths of India’s population lives
in rural areas, and contribute one-third of the national income.
This rural population is spread all over India, in close to 0.6
million villages.
India is a lucrative market even though the per capita
income in India is low and there is a huge market, even for
costly products. Among the total 164.8 million households in
India, 80.7 million households comes under low income group,
followed by 50.4 million lower middle income households, 19.7
million middle income group (, 8.2 million upper middle income
group and 5.8 million high income group.

1.1.6(b)- CHARACHTRISTICS OF THE INDIAN CONSUMERS

BEHAVIOR
The Indian consumers are noted for the high degree of value
orientation. Such orientation to value has labeled Indians as one of the
most discerning consumers in the world. Even, luxury brands have to
design a unique pricing strategy in order to get a foothold in the Indian
market.
Indian consumers have a high degree of family orientation. This
orientation in fact, extends to the extended family and friends as well.
Brands with identities that support family values tend to be popular
and accepted easily in the Indian market.
Indian consumers are also associated with values of nurturing,
care and affection. These values are far more dominant that values of
ambition and achievement. Product which communicate feelings and
emotions gel with the Indian consumers.

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 Apart from psychology and economics, the role of history and
tradition in shaping the Indian consumer behavior is quite unique.
Perhaps, only in India, one sees traditional products along side modern
products. For example, hair oils and tooth powder existing with
shampoos and toothpaste.

1.1.6(c)-DIFFERENT SEGMENTS OF INDIAN CONSUMERS:

India is a dynamic and large country. The diversity of India is
defined in different segments such as:
1) The Socialites:

Socialites belong to the upper class. They prefer to shop in

specialty stores, go to clubs on weekends, and spend a good
amount on luxury goods. They are always looking for something
different. They are the darlings of exclusive establishments. They
go for high value, exclusive products. Socialites are also very
brand conscious and would go only for the best known in the
market.
2) The Conservatives:

The Conservatives belong to the middle class. The

conservative segment is the reflection of the true Indian culture.
They are traditional in their outlook, cautious in their approach
towards purchases, spend more time with family than in partying
and focus more on savings than spending. Slow in decision
making, they seek a lot of information before making any
purchase. They look for durability and functionality but at the
same time are also image conscious.
They prefer high value consumer products, but often have
to settle for the more affordable one. These habits in turn affect
their purchasing habits where they are trying to go for the
middle and upper middle level priced products.

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3) The Working Women

The working woman segment is the one, which has seen a

tremendous growth in the late nineties. This segment has
opened the floodgates for the Indian retailers. The working
woman today has grown out of her long-standing image of being
the homemaker. Today, she is rubbing shoulders with men,
proving herself to be equally good, if not better. Working women
have their own mind in decision to purchase the products that
appeal to them.
4) Rural Consumers:

About three quarters of the Indian population are in the

rural areas and with the growing middle class, specially in the
Indian cities, the spill over effect of the growing urban middle
class is also felt in the rural areas.
The Indian rural market has been growing at 3-4% per
annum, adding more than 1 million new consumers every year
and now accounts for close to 50% of the volume consumption
of fast-moving consumer goods (FMCG) in India. The market size
of the fast moving consumer goods sector is projected to more
than double to US$ 23.25 billion by 2010 from the present US$
11.16 billion. As a result, it is becoming an important market
place for fast moving consumer goods as well as consumer
durables.
5) Increasing Awareness Of Indian Consumers:

About three quarters of the Indian population are in the

rural areas and with the growing middle class, specially in the
Indian cities, the spill over effect of the growing urban middle
class is also felt in the rural areas.

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 The Indian rural market has been growing at 3-4% per
annum, adding more than 1 million new consumers every year
and now accounts for close to 50% of the volume consumption
of fast-moving consumer goods (FMCG) in India. The market size
of the fast moving consumer goods sector is projected to more
than double to US$ 23.25 billion by 2010 from the present US$
11.16 billion. As a result, it is becoming an important market
place for fast moving consumer goods as well as consumer
durables.
1.1.6(d)- MARKETING STRATEGIES

i. On-Line Marketing:

A study by the Confederation of Indian Industry (CII) and

the International Trade Centre predicts that e-commerce activity
in India will rise from US$ 0.10 million in 2000-01 to US$ 5.8
billion in 2005-06, of which the business to business segment
will account for US$ 5.41 billion.

Currently, the products Indian consumers are buying

through online are greeting cards, clothes, CDs/VCDs/DVDs,
cassettes, books, magazines, medicine and educational material.

The popular online shops in India include:

• www.ebay.in
• www.shopping.rediff.com
• www.reliablegreetings.com
• www.shopping.expomarkets.com

ii. Celebrity Influence:

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 This is an important tool which is able to influence Indian
consumer buying behaviour. In India, celebrities are being
increasingly used in marketing communication by marketers to
lend personality to their products. With the visual media
becoming more popular the use of celebrities in the TV media
has increased. Celebrities create headlines. Their activities and
movements are being closely watched and imitated. What they
endorse sell like hot cakes. It is not surprising therefore that
using celebrities in advertisements has become common
practice.

In India especially, it is not difficult to look for the reasons

as to why companies are increasingly using celebrities. Indians
always love their heroes and heroines.

Consumers like advertisements more if they are admirers

of the celebrities in the advertisements. When a consumer likes
the celebrity in the advertisement, he or she is more likely to
accept what the celebrity says about the advertised product and
therefore will develop more positive feelings toward the
advertisement and the brand itself. Famous celebrities are able
to attract attention and retain attention by their mere presence
in the advertisements.

In the midst of the advertisement clutter, the

advertisements that celebrities endorse also achieve high recall
rates. When people see their favoured reference group members
or celebrities in the advertisements, they pay more attention to
them.

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 Celebrities may also help reposition products. Products
with sagging sales needs some boosting and in this Indian
celebrities can help by way of they endorsing the product
concerned.

The Malaysian businessmen can contact celebrities for

endorsing their products through advertising agencies. The
contact addresses are given in the appendix-1.
iii. Quality Oriented Outlets:

Indian consumers looking for quality choose expensive

brands as they feel that price is an indicator of quality.

However, in the absence of well known brands in selected

product range, consumers are likely to take cues from well
established retail outlets hoping that these outlets carry quality
products.

Malaysian businessmen who prefer not to go for high-

visibility, costly campaigns may embark on the strategy to
engage well known retail outlets to capture the segment of
Indian consumers looking for quality products. Some of the
established retail outlets in India for selected products are found
in Appendix II.

iv. Freebies:

Indian consumer buying behaviour is influenced by

freebies. Freebies are consumer products given free of charge as
gifts to purchases of selected products above a certain value.
TVs, washing machines, refrigerators, and ready made clothes

25
 are some of the product categories in which freebies are given to
Indian consumers. Freebies generally comprise tooth paste,
soaps, detergent, cooking oil etc.

Malaysian companies wanting to penetrate the Indian

market, perhaps should consider giving freebies for the
purchases made by the Indian consumers. Malaysians can work
with the local business partners to attract the consumers by way
of such promotion campaigns.

v. Eco Friendly Products:

The environmental awareness in India has started affecting

marketing of products based upon their eco-friendliness. In
general, Indian consumers are likely to buy environmentally
responsible products and packs. The future key for marketing
could be to select more ethical and ecological responsible
products and packaging, which is also convenient for consumers,
thus, balancing environmental concerns with commercial
considerations. Consumers in India are taking lead in prompting
manufacturers to adopt technologies to produce eco-friendly
products.

1.1.6(e)- CHANGING TREND IN CONSUMER BEHAVIOR

I. Bulk Purchasing:

Urbanisation is taking place in India at a dramatic pace

and is influencing the life style and buying behaviour of the
consumers.

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 The working urbanites are depending more on fast and
ready-to-serve food, they take less pain in traditional method of
cooking and cleaning.
Bulk purchases from hyper stores seems to be the trend
these days with purchasing becoming more of a once-a-week
affair, rather than frequent visits to the neighbourhood
market/store/vendor.
The popular growing shopping trend among urbanities is
purchasing from super markets to hyper stores.

II. Trendy Lifestyle:

The current urban middle and upper class Indian consumer

buying behaviour to a large extent has western influence. There
is an increase in positive attitude towards western trends. The
Indian consumer has become much more open-minded and
experimental in his/her perspective. There is now an exponential
growth of western trend reaching the Indian consumer by way of
the media and Indians working abroad.
Foreign brands have gained wide consumer acceptance in
India, they include items such as;
• Beverages, Packed food, Ready to eat food , Pre-
cooked food, Canned food, Personal care products ,
Audio/video products , Garment and apparel,
Footwear, Sportswear, Toys, Gift items.

Foreign brands vie increasingly with domestic brands for

the growing market in India. Foreign made furniture is well
accepted by the Indian consumers. Malaysian, Chinese, Italian
furniture are growing in popularity in India.

27
 Indian consumers have also developed lifestyles which
have emerged from changing attitudes and mind sets; exposure
to western influences and a need for self-gratification. Beauty
parlours in cities, eateries, designer wear, watches, hi-tech
products are a few instances which reflect these changes.
III. Buyers Market Making

The sellers’ market is slowly moving towards becoming the

buyers’ market.
Since, India’s economic liberalization policies were initiated
in 1991, many new product offerings have entered the Indian
market and product variety has also increased manifold.

Import licensing restrictions are being eliminated and

tariffs significantly reduced and this has led to large range of
consumer goods made available in India.

Indian consumers have always preferred foreign goods and

with the liberalization, they now have a choice of foreign
products vis-à-vis the local products.

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CUSTOMER
SATISFACTI
ON

Customer satisfaction, a business term, is a measure of how

products and services supplied by a company meet or surpass

29
customer expectation. It is seen as a key performance indicator within
business and is part of the four of a Balanced Scorecard.

In a competitive marketplace where businesses compete for

customers, customer satisfaction is seen as a key differentiator and
increasingly has become a key element of business strategy.

There is a substantial body of empirical literature that establishes the

benefits of customer satisfaction for firms.

Measuring customer satisfaction

Organizations need to retain existing customers while targeting non-

customers;. Measuring customer satisfaction provides an indication of
how successful the organization is at providing products and/or
services to the marketplace.

Customer satisfaction is an abstract concept and the actual

manifestation of the state of satisfaction will vary from person to
person and product/service to product/service. The state of
satisfaction depends on a number of both psychological and physical
variables which correlate with satisfaction behaviors such as return
and recommend rate. The level of satisfaction can also vary depending
on other factors the customer, such as other products against which
the customer can compare the organization's products.

Work done by Parasuraman, Zeithaml and Berry (Leonard L) between

1985 and 1988 delivered SERVQUAL which provides the basis for the
measurement of customer satisfaction with a service by using the gap
between the customer's expectation of performance and their

30
perceived experience of performance. This provides the researcher
with a satisfaction "gap" which is semi-quantitative in nature. Cronin
and Taylor extended the disconfirmation theory by combining the
"gap" described by Parasuraman, Zeithaml and Berry as two different
measures (perception and expectation) into a single measurement of
performance relative to expectation.

The usual measures of customer satisfaction involve a survey with a

set of statements using a Likert Technique or scale. The customer is
asked to evaluate each statement in terms of their perception and
expectation of performance of the service being measured.

31
 COMPANY PROFILE

Hero Honda

Hero Honda Motors Limited, based in Delhi, India is a joint venture

between the Hero Group of India and Honda of Japan. It has been

32
referred to as the world's biggest manufacturer of 2-wheeled
motorized vehicles since 2001, when it produced 1.3 million
motorbikes in a single year. During the fiscal year 2009-10, the
company has sold 4.6 million bikes and the net profit of the company
stood at Rs.22.318 Billion, up 74% from the previous fiscal year.

The company's most popular model is the Hero Honda's Splendor,

which is the world's largest-selling motorcycle, selling more than one
million units per year.

“Hero” is the brand name used by the Munjal brothers for their
flagship company Hero Cycles Ltd. A joint venture between the Hero
Group and Honda Motor Company was established in 1984 as the Hero
Honda company,India.

During the 1980s, the company introduced motorcycles that were

popular in India for their fuel economy and low cost. A popular
advertising campaign based on the slogan 'Fill it - Shut it - Forget it'
that emphasised the motorcycle's fuel efficiency helped the company
grow at a double-digit pace since inception.

Hero Honda has three manufacturing facilities based at Dharuhera and

Gurgaon in Haryana and at Haridwar in Uttarakhand. These plants
together are capable of churning out 3.9 million bikes per year. Hero
Honda's has a large sales and service network with over 3,000
dealerships and service points across India. Hero Honda's customer
loyalty program the Hero Honda Passport Program, claims to be one of
the largest programs of its kind in the world with over 3 million
members.

33
The 2006 Forbes 200 Most Respected companies list has Hero Honda
Motors ranked at 108.

History

India became the second largest two wheeler manufacturer in the

world and starting in the 1950s with the Automobile Products of India
(API) that manufactured the Lambrettas and Bajaj Auto Ltd. with its
association with Piaggio of Italy (manufacturer of Vespa scooters) as
the largest manufacturers within the country.

The license raj that existed between the 1940s to 1980s in India did
not allow foreign companies to enter the market and imports were
tightly controlled. This regulatory maze, before the economic
liberalization, made business easier for local players to have a seller’s
market .Customers in India were forced to wait up to 12 years to buy
a scooter from Bajaj. The CEO of Bajaj commented that he did not
need a marketing department, only a dispatch department. By the
year 1990, Bajaj had a waiting list that was twenty-six times its annual
output for scooters.

The motorcycle segment had the same long wait times with three
manufacturers: Royal Enfield, Ideal Jawa, and Escorts. Royal Enfield
made a 350cc Bullet with the only four-stroke engine at that time and
took the higher end of the market but there was little competition for
their customers. Ideal Jawa and Escorts took the middle and lower end
of the market respectively.

In the mid-1980s, the Indian government regulations changed and

permitted foreign companies to enter the Indian market through
minority joint ventures. The two-wheeler market changed with four

34
Indo-Japanese joint ventures: Hero Honda, TVS Suzuki, Bajaj
Kawasaki and Kinetic Motor Company (Kinetic Honda). The entry of
these foreign companies changed the Indian market dynamics from
the supply side to the demand side. With a larger selection of two-
wheelers on the Indian market, consumers started to gain influence
over the products they bought and raised higher customer
expectations. The industry produced more models, styling options,
prices, and different fuel efficiencies. The foreign companies new
technologies helped make the products more reliable and with better
quality. Indian companies had to change to keep up with their global
counterparts.

Diversification

The Group Chairman, Mr. Brij Mohan Lall Munjal has actively looked at
diversification. A considerable level of vertical integration in its
manufacturing activities has been present in the Group's growth and
led to the establishment of the Hero Cycles Cold Rolling Division,
Munjal and Sunbeam Castings, Munjal Auto Components and Munjal
Showa Limited amongst other component-manufacturing units.

Expansion into the automotive segment started with the setting up of

Majestic Auto Limited, where the first moped designed entirely in
India, Hero Majestic, went into commercial production in 1978. Hero
Motors, in collaboration with Steyr Daimler Puch of Austria introduced
the which introduced another moped, the Hero Puch, in 1980. Hero
Honda Motors was established in 1984 to manufacture 100 cc
motorcycles.

35
The Hero Group also plans to expand into other segments like exports,
financial services, information technology, insurance and
telecommunication.

The Hero Honda story began with a simple vision – the vision of a
mobile and an empowered India, powered by Hero Honda. This vision
was driven by Hero Honda's commitment to customer, quality and
excellence, and while doing so, maintain the highest standards of
ethics and societal responsibilities. Twenty five years and 25 million
two wheelers later, Hero Honda is closer to fulfilling this dream. This
vision is the driving force behind everything that we do at Hero Honda.
We understood that the fastest way to turn that dream into a reality is
by remaining focused on that vision.

There were many unknowns but we kept faith, and today, Hero Honda
has been the largest two wheeler company in the world for eight
consecutive years. Our growth has kept compounding. The company
crossed the ten million unit milestone over a 19-year span. In the new
millennium, Hero Honda has scaled this to 15 million units in just five
years! In fact, during the year in review, Hero Honda sold more two
wheelers than the second, third and fourth placed two-wheeler
company put together. With Hero Honda, the domestic two wheeler
market was able to show positive growth during the year in review.
Without Hero Honda, the domestic market would have actually shrunk.

Over the course of two and a half decades, and three successive joint
venture agreements later, both partners have fine-tuned and perfected

36
their roles as joint venture partners. What the two partners did was
something quite basic. They simply stuck to their respective strengths.
As one of the world's technology leaders in the automotive sector,
Honda has been able to consistently provide technical know-how,
design specifications and R&D innovations. This has led to the
development of world class, value - for- money motorcycles and
scooters for the Indian market. On its part, the Hero Group has taken
on the singular and onerous responsibility of creating world-class
manufacturing facilities with robust processes, building the supply
chain, setting up an extensive distribution networks and providing
insights into the mind of the Indian customer. Since both partners
continue to focus on their respective strengths, they have been able to
complement each other. In the process, Hero Honda is recognized
today as one of the most successful joint ventures in the world. It is
therefore no surprise that there are more Hero Honda bikes on this
country's roads than the total population of some European countries
put together!

The company's meteoric growth in the two-wheeler market in India

stems from an intrinsic ability to reach out and come closer to its
customers, with every passing year. Hero Honda's bikes are sold and
serviced through a network of over 3500 customer touch points,
comprising a mix of dealers, service centres and stockists located
across rural and urban India. Hero Honda has built two world-class
manufacturing facilities at Dharuhera and Gurgaon in Haryana, and its
third and most sophisticated plant at Haridwar has just completed a
full year of operations. It is difficult to imagine that all this has
happened in the span of just two and a half decades!

37
The best is yet to come. During the year in review, Hero Honda
powered its way in a market that, for all practical purposes, was
feeling the full effects of the economic slowdown in India. With an
economic recovery now clearly on the cards, Hero Honda is all set to
ride into another summit. As Brijmohan Lall Munjal, the Chairman,
Hero Honda Motors succinctly puts it, "We pioneered India's two
wheeler industry, we've steered it through difficult times; now it is our
responsibility to set the pace again.''

38
 Topic introduction

INTRODUCTION

Satisfaction is a person ’s feelings of pleasure (or)disappointment

39
resulting from comparing a products perceived performance
(outcome)in relation to his /her expectations.
If the performance falls short of expectations,the customer is
dissatisfied.If the performance matches the expectations,the
customer is satisfied.If the performance exceeds expectations
the customer is highly satisfied (or) delighted.Many companies are
aiming for high satisfaction because they are much less ready to
switch. Buyer ’s expectations formed on the basis of past buying
experience, friend ’s &associates advice and marketers and
competitor ’s information and promises.If marketers raise
expectations too high, the buyer is likely to be disappointed.
Even if the company sets expectations too low,it won ’t attract
enough buyers.So the expectations should match the performance.

_ A customer is the most important

Person even in any company.

_ A customer never dependent on

company, but the company
dependent on him.

_ A customer is a person who brings

40
company his wants.

_ It is company job to handle them

profitably to him and to company.

_ A customer is not an interruption

of marketers work he is the
purpose of it.

CUSTOMER VALUE

Our premise is the customers will buy from the firm that the
perceive offers the highest customers delivered value. Customers
delivered value is the difference between total customer value
&total customer cost. Total customer value is the bundle of
benefits customers expect from a given product (or)service. Total
customer cost is the bundle of costs customers expect to incur in
evaluating, obtaining, using and disposing of the product /service.

41
OBJECTIVES OF STUDY

42
OBJECTIVES OF THE STUDY.

1.

To know customer behavior towards hero Honda splendor plus

motor bike.

2.

To know about customer satisfaction level towards the bike.

3.

To know the customer’s expectations towards Hero Honda

Splendor + Motor bike.

4.

To find out the customer’s opinion, regarding various aspects

of the bike.

5.

To give appropriate suggestion to the company regarding the

Performance of the bike.

43
RESEARCH

METHODOLOGY

44
RESEARCH METHODOLOGY

Research can be defined as the search for knowledge or any

systematic investigation to establish facts. The primary purpose for
applied research (as opposed to basic research) is discovering,
interpreting, and the development of methods and systems for the
advancement of human knowledge on a wide variety of scientific
matters of our world and the universe. Research can use the scientific
method, but need not do so.

Scientific research relies on the application of the scientific method,

a harnessing of curiosity. This research provides scientific information
and theories for the explanation of the nature and the properties of the
world around us. It makes practical applications possible. Scientific
research is funded by public authorities, by charitable organizations
and by private groups, including many companies. Scientific research
can be subdivided into different classifications according to their
academic and application disciplines.

Historical research is embodied in the scientific method.

The term research is also used to describe an entire collection of

information about a particular subject.

45
Methodology can be:

1. "the analysis of the principles of methods, rules, and postulates

employed by a discipline";[1]
2. "the systematic study of methods that are, can be, or have been
applied within a discipline".[1]

Methodology may be a description of process, or may be expanded to

include a philosophically coherent collection of theories, concepts or
ideas as they relate to a particular discipline or field of inquiry

Methodology may refer to nothing more than a simple set of methods

or procedures, or it may refer to the rationale and the philosophical
assumptions that underlie a particular study relative to the scientific
method. For example, scholarly literature often includes a section on
the methodology of the researchers.

OBJECTIVES OF RESEARCH

 The purpose of research is to discover answers through

the application of scientific procedures.
 The objectives are:
 To gain familiarity with a phenomenon or to achieve new
insights into it – Exploratory or Formulative Research.

46
  To portray accurately the characteristics of a particular
individual, situation or a group – Descriptive Research.
 To determine the frequency with which something occurs
or with which it is associated with something else –
Diagnostic Research.
 To test a hypothesis of a causal relationship between

variables – Hypothesis-Testing Research .

TYPES OF RESEARCH

Descriptive vs Analytical Research

Descriptive Research is a fact finding

investigation which is aimed at describing the characteristics
of individual, situation or a group (or) describing the state of
affairs as it exists at present.

Analytical Research is primarily concerned with

testing hypothesis and specifying and interpreting
relationships, by analyzing the facts or information already
available.

47
 Applied vs Fundamental Research

Applied Research or Action Research is carried out to find

solution to a real life problem requiring an action or policy
decision.

Fundamental Research which is also known as

basic or pure research is undertaken for the sake of
knowledge without any intention to apply it in practice.
It is undertaken out of intellectual curiosity and
is not necessarily problem-oriented.

Quantitative vs Qualitative Research

Quantitative Research is employed for measuring the quantity

or amount of a particular phenomena by the use of statistical
analysis.

Qualitative Research is a non-quantitative type

of analysis which is aimed at finding out the quality of a
particular phenomenon.

48
Conceptual vs Empirical Research

Conceptual Research is generally used by philosophers

and thinkers to develop new concepts or to reinterpret existing
ones.
Empirical Research is a data based research
which depends on experience or observation alone. It is aimed
at coming up with conclusions without due regard for system
and theory.

49
SOURCES OF DATA

The study is based on both primary and secondary data.

Primary data:

The questionnaires were administered to respondents . The study

is mainly based on the primary data generated,

The secondary data :

Secondary data was obtained through company, profile

&information ’s available in textbooks &magazines related to the
topic.

50
 DATA ANALYSIS
AND
INTERPRETATION

51
Sample Size: 250
Number of People Responded: 241
No. of People Not Responded: 9

TABLE 1

DO RESPONDENT HAVE BIKE ‘SPLENDOR PLUS’

Options No. of Respondents

Yes 200
No 41
Total 241

Analysis: Out of 241 people who responded, 83 % of respondents were

having bike ‘Splendor Plus’ while 17% respondents didn’t.

52
 TABLE – 2

OPINION REGARDING APPEARANCE AND STYLE

Opinion Number of Respondents

Satisfied 105
Changes Need to be Made 90
No Idea 5
Total 200

The above table shows that 52.5% of the customers are satisfied with
the present appearance and style of the vehicle while 45% of the
customers want changes in appearance & style of the vehicle and
2.50% of the Respondents expressed no idea.

53
 TABLE – 3

OPINION REGARDING THE ACTUAL PERFORMANCE OF THE

VEHICLE ON ROAD

Options No. of Respondents

Good 115
Average 75
Bad 10
Total 200

Analysis: The above table shows that 57.50% of the customers

opined good with regard to the performance of the Vehicle and
37.50% of the customers opined the performance is moderate &5% of
the customers are having poor opinion on the performance of the
vehicle.

54
 TABLE – 4

COST OF MAINTENANCE

Options No. of Respondents

Low 110
Moderate 80
High 10
Total 200

Analysis: The above table depicts that 55% of the customers opined
that maintenance cost is low while 40% of the customers felt
reasonable and 5% of the customers said that the maintenance cost of
the bike is very high.

55
 TABLE – 5

Opinion Regarding Price

Options No. of Respondents

High 142
Moderate 56
Low 2
Total 200

Analysis: The above table shows that 71% of the customers feel that
price is high while 28% of the customers feel that present price is
moderate and 1% of the customers expressed low regarding price of
the bike.

56
 TABLE – 6

CHANGES IN FEATURES

Options No. of Respondents

Yes 138
No 52
No Idea 10
Total 200

Analysis: The above table shows that 69% of the customers feel that
changes in features and 26 % of the customers feel that there was no
need of changes in features and 5 % of the customers feel that they
don’t have any Idea about features.

57
 TABLE – 7

CUSTOMERS EXPECTATION REGARDING SERVICE AFTER

PURCHASING

Options No. of Respondents

Good 185
Bad 15
Total 200

Analysis: The above table shows that 92.50% of the customers get
better service after purchase and 7.5% of the customers said they
don’t get better service.

58
 Table – 8

MORE SERVICE CENTERS

Options No. of Respondents

Yes 162
No 38
Total 200

Analysis: In the above table 81% of the customers expecting more

service centers and 19% of the customers are not expecting more
service centers.

59
 TABLE – 9

TECHNOLOGICAL CHANGES

Options No. of Respondents

Yes 194
No 6
Total 200

Analysis: The above table shows that 97% of the customers want
technological changes

60
& 3% does not want the changes in bike.

FINDINGS

61
 findings

1.

52.5% of the customers are satisfied with the present appearance and
style of the vehicle while 45% of the customers want changes in
appearance & style of the vehicle and 2.50% of the Respondents
expressed no idea.

2.

57.50% of the customers opined good with regard to the performance

of the Vehicle and 37.50% of the customers opined the performance is
moderate &5% of the customers are having poor opinion on the
performance of the vehicle.

3.

55% of the customers opined that maintenance cost is low while 40%
of the customers felt reasonable and 5% of the customers said that
the maintenance cost of the bike is very high.

4.

71% of the customers feel that price is high while 28% of the
customers feel that present price is moderate and 1% of the
customers expressed low regarding price of the bike.

62
5.

69% of the customers feel that changes in features and 26 % of the

customers feel that there was no need of changes in features and 5 %
of the customers feel that they don’t have any Idea about features.

6.

92.50% of the customers get better service after purchase and 7.5%
of the customers said they don’t get better service.

7.

81% of the customers expecting more service centers and 19% of the
customers are not expecting more service centers.

63
LIMITATIONS

64
LIMITATIONS OF THE STUDY

The sample of 200 respondents may constitute

limitations due to small no. Of samples. The study is
restricted to only one product i.e.
Hero Honda Splendor Only.

 Time period for data collection is short

 Difficult to get response from customer.

 Shortage of time and money.

 Study of consumer behavior is a difficult task

 because consumer behavior is dynamic.

65
SUGGESTIONS

66
 SUGGESTIONS

Nearly half of the respondents are satisfied with the appearance and
style of the bike and its performance. It shows that the remaining
percent of respondents, expect something more in this regard.

More than a purchase, it is the maintenance factor, which is given

considerable importance. Most of the respondents are worried about
high maintenance cost. So, the company should take a serious note of
this issue.

Now-a-day customers have become highly price conscious. It is the

general tendency of the customer to think about the price of the
product to be high. Majority of the customers
opined the price of the bike to be high.

67
CONCLUSION

68
CONCLUSION

The study taken up various aspect of the bike for the study and
presented many suggestions to the company in this regard.
Though all the suggestions may not be of utmost importance, there
may be a suggestion, which may ignite the
think –tank of the company. The researcher has revealed the
expectation at the customers to the company. The researcher
concludes
the project with the hope of it, benefiting both the company and the
customer.

69
QUESTIONAIRE

70
Que1. Do you have the bike ‘Splendor Plus’?
Yes
No

Que2. What is your opinion regarding the appearance and the style?
Satisfied
Changes need to be made
No Idea

Que3. What is your satisfactory level on the operational performance

of the bike on the road?
Good
Average
Bad

Que4. What do you feel regarding the cost of maintenance of the bike?
Low
Moderate
High

Que5. How do you feel regarding the price of the bike with overall
performance?

71
 High
Moderate
Low

Que6. Would you prefer the changes in features of the current model
of the bike?
Yes
No
No Idea

Que7. How do you rate the post purchase servicing of the bike?
Good
Bad

Que8. Do you feel the need to open more service centers for the bike?
Yes
No

Que9. Would you prefer any technological changes in the bike like
125cc engine instead of 100cc engine?
Yes
No

72
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1.Philip Kotler “Marketing

Management ”11
th
edition,
Pearson education (Singapore),
Pte.Ltd.,2003.P,40-42.

2.Lee,Louise “Indian Chain Bucks

Tradition ”,Asian wall street
journal V2,No.2 Jan11/17,1999,
P1.

3.Warmick lit “Marketing Mega

Fun ”Marketing Magazine,V.106,
No.23,June 11,2001,P 14-15.

4.Philip Kotler,Smee Hoon Ang,

Siem Meng Leong,Chain Tiong
Tan,“Marketing Management.

73
An Asian Perspective ”,Prentice
Hall,Pte.Ltd.Singapore.
1996,P.27.

5.William J.Stanton,Michael
J.Etazel,Bruce J.Walker “
Fundamentals of Marketing ”,10
th edition,McGraw Hill,Inc.New
Delhi 1994,P.23.

6.V.S.Ramaswamy;S.
Namakumari “Marketing
Management ”(Planning,
Implementations &Control)The
Indian context,2
nd
edition,
Mammalian India Ltd.New
Delhi,2001,P.12.

7.Jha-sing “Marketing management

in Indian perspective ”,Himalaya
Publishing House,New Delhi,
1998.P.17-22.

8.Joseph,Gultiltinan,Gordon
W.Paul “Marketing Management,
Strategies and programs ”

74
McGraw Hill International
edition,1983.P.16.

Websites:

1. www.herogroup.com

2. www.google.com.

75