Analysis of New Honda City Customer Profile & Satisfaction Level

A PROJECT REPORT

Submitted by:

JITESH NAGAR Roll No. 0917270039

In Partial Fulfilment for the award of the degree Of

MASTER OF BUSINESS ADMINISTRATION IN MARKETING

LLOYD INSTITUTE OF MANAGEMENT & TECHNOLOGY PLOT NO.11, KNOWLEDGE PARK- II, Greater Noida- U.P.201306

ACKNOWLEDGEMENT

I express my sincere gratitude to my industry guide Mr. Rajive Saharia, HeadSales and Marketing, Honda Siel Cars India Ltd. (HSCI), for his able guidance, continuous support and cooperation throughout my project, without which the present work would not have been possible. I would also like to thank the entire team Marketing of Honda Siel Cars India Ltd (HSCI), for the constant support and help in the successful completion of my project. Also, I am thankful to my faculty guide Mr. A.K. Tyagi of LIMT, Greater Noida for her continued guidance and invaluable encouragement.

JITESH NAGAR Roll No. 0917270039

TABLE OF CONTENTS
Chapter No. 1. Introduction Topic Page No.

1.1 Customer 1.1.1 Definition of customer 1.2 Customer Profiling 1.3 Customer satisfaction
1.3.1 1.3.2 1.3.3 1.3.4 1.3.5 The purpose of business Definition of customer satisfaction Measuring customer satisfaction Importance of customer satisfaction Customer satisfaction model by N. Kano

2. 3.

Review Of Literature Problem Statement

3.1 Justification of the problem 3.2 Scope of the project 3.3 Objective of the project 3.4 An Industry overview 3.4.1 The four wheeler industry in India
3.4.1a Background 3.4.1b Current scenario 3.4.1c Market share scenario

3.5 Company profile 3.5.1 An overview

3.5.1.a Honda world wide 3.5.1.b Principles of Honda 3.5.1.c Honda in India

3.6 About the car

3.6.1 The all new Honda City 3.6.2 Importance of the all new Honda city for the company

4.

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

5.

Results & Discussions

5.1 Building of customer profile 5.1.1 Gender 5.1.2 Age 5.1.3 Family status
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5.1.4 Educational qualification 5.1.5 Occupation 5.1.6 Monthly household income 5.1.7 Budget decision 5.1.8 Driving scenario 5.2 Analysis of customer profile 5.3 Other important information regarding the City customers 5.3.1 Purchase criteria 5.3.2 Source of information 5.4 Competitive analysis 5.5 Analysis of customer satisfaction 5.5.1 Audio system 5.5.2 Overall styling of the car 5.5.3 Additional features 5.5.4 Exterior styling of the car 5.5.5 Interior styling of the car 5.5.6 Luggage space 5.5.7 Performance of the car 5.5.8 Overall performance of the car 5.5.9 Safety features 5.5.10 Pricing of the car 5.5.11 Accessory package 5.5.12 Strengths & shortcomings of the car 5.6 Findings 5.7 Limitations

6. 7.

Recommendations & conclusions

6.1 Recommendations 6.2 Conclusions

Appendix
Annexure I Questionnaire Annexure II Reference

CHAPTER I:
Introduction

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

1.1.1 DEFINITION OF CUSTOMER:

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

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

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

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

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

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

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

1.2 Customer Profiling:

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

1.3 CUSTOMER SATISFACTION:

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

1.3.1 The Purpose of Business:

Peter F. Drucker, considered to be one of the leading management gurus in the world, believes that the purpose of business to create and then retain a satisfied customer. Although firms have to make money, Drucker argues that making money is a necessity and not a purpose. It is, in fact, the end result, a desirable outcome of creating a satisfied customer. Theodore Levitt, a Harvard Business School Professor, who explains this by an analogy with human beings, expresses similar sentiment - all humans have to eat to survive, but eating is not their purpose. Furthermore, making money does not provide a legitimate reason for society to support the moneymaking enterprise. A society supports businesses because they serve its member by catering to their needs to leave them satisfied. If a firm dissatisfies customers, then not only will these specific customers stop
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buying from the firm, but the society at large will condemn the firm and may even penalize it - to the point of its extinction. In response to such messages, co part of the corporate mission, and utilizes an understanding of customer behavior as input to all its marketing plans & decisions.

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

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

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

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

1.3.3 Measuring customer satisfaction:

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

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

II.Focus Groups

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Focus groups are good ways to get informal input from a group of customers or prospects. You bring in 5-10 customers or prospects and ask them questions or have them react to material. You can pay a professional facilitator and videotape the whole session, or just lead an informal discussion yourself. In either case, you have a chance to gather ideas about customer needs, reactions to your company, suggestions for new services, and so forth. In addition to individual responses, you get ideas that develop as the group reacts to each other's responses. III.Client Advisory Groups One way to get regular input from customers is to put together an advisory group. This can act like a focus group, but is set up to provide input over time. You may pay members, or simply buy them dinner every quarter.
There are many benefits to such groups. They give you a source of input from the customer viewpoint. They provide a sounding board for specific questions. They enhance your relationship with good customers who become more committed to your success. And they can move relationships with prospects ahead.

1.3.4 Importance of customer satisfaction:

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

1.3.5 CUSTOMER SATISFACTION MODEL by N.Kano:

The customer satisfaction model from N.Kano is a quality management and marketing technique that can be used for measuring client happiness. Kanos model of customer satisfaction distinguishes six categories of quality attributes, from which the first three actually influence customer satisfaction: 1. Basic factors (Dissatisfiers, Must have): the minimum requirements that will cause dissatisfaction if not fulfilled, but do not cause any satisfaction if they are fulfilled (or exceeded). The customers take these as prerequisites and take these for granted. 2. Excitement factors (Satisfiers, Attractive): the factors that increase customer satisfaction if delivered but do not cause dissatisfaction if they are not delivered. Such factors surprise the customers and generate delight. 3. Performance Factors: The factors that cause satisfaction if the performance is high, and cause dissatisfaction if the performance is low. Here the attribute performanceoverall satisfaction is linear and symmetric. Typically these factors are directly connected to customer explicit needs and desires and a company should try to be competitive here. The additional three attributes which Kano mentions are: 4. Indifferent attributes: the customer does not care about these features. 5. Questionable attributes: it is unclear whether these attributes are expected by the customer. 6. Reverse attributes: the reverse of this product feature was expected by the customer.

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CHAPTER II:

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Review Of Literature

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

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

Customer Survey II:

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

Customer Survey III:

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

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

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

Customer Survey VI:

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

Customer Survey VII:

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

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Customer Survey VIII:

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

Customer Survey IX:

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

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

Customer Survey XI:

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

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CHAPTER III:
Problem Statement

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

3.1 Justification of the Problem:

After de-licensing in 1991, the auto industry in India has grown at an average rate of 17%. Currently the industry contributes nearly 5% of the GDP, and is expected to grow nearly five folds and account over 10% of Indias GDP. Over the last 5 years, the production of the four wheeler industry has increased from 9.3 lakh units in 2003-04 to 23 lakh units in 2008-09, reporting a CAGR of 20%. Even the exports have increased immensely from 84,000 units in 2003-04 to 2, 80,000 units in 2008-09. However, despite the commendable growth of the auto sector, HSCI has not really been able to make a mark in the Indian market. It had been able to capture only 5.52% of the total market in FY08, which has fallen further to 4.93% in the FY09 and with the launch of new cars such Nano, Jaguar, Land Rover etc. The situation is expected to get worse. The main rational behind this survey report is that HSCI needs to retain the existing customers and attract new ones. This can be done only by satisfying the customers to the maximum possible extend. As this would not only prevent the existing Honda customers from shifting to the other competitive brands but would also help in capturing new ones. This is because, when a customer perceives good service he typically tell nine to ten people. According to Griffin (1995), improvement in customer retention by even a few percent can increase the profits by 25% or more. The University of Michigan found that for every percentage increase in customer satisfaction there is an increase of 2.37% in return on investment (Keiningham & Varvra, 2001).

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

3.2 Scope Of The Project:

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

3.3 Objectives Of The Project:

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

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

3.4.1 The four wheeler industry in India:

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

The four wheeler industry in India has not quite matched up to the performance of its counterparts in other parts of the world. The primary reason for this has been the allpervasive regulatory atmosphere prevailing till the opening up of the industry in the mid-1990s. The various layers of legislative Acts sheltered the industry from external competition for a long time. Moreover, the industry was considered low-priority as cars were thought of as "unaffordable luxury". Until the early 1990s, the automotive sector in India was highly protected. This was in the form of steep import tariffs and measures that restricted the participation of foreign companies. Hindustan Motors (HM) and Premier Automobile (PAL) that were set up in 1940's dominated the vehicle market and industry. In the 1950s, the arrival of Tata Motors, Bajaj Auto, and Mahindra & Mahindra led to steadily increasing vehicle production in India, while the 1960s witnessed the establishment of the two- and three-wheeler industry in India. However, the automotive industry witnessed tremendous growth after the entry of Maruti Udyog in the 1980s. In 1983, the government permitted Suzuki - for some time, the only FDI player - to enter the market in a joint venture with Maruti - a state operated enterprise at the time. Ten years later, as part of a broader move to liberalise its economy, India de-licensed passenger car manufacturing and opened it up further to foreign participation. That brought a wave of FDI to India's vehicle industry. Import barriers have been progressively relaxed. Today, almost all of the major global players are present in India. The automotive industry is today a key sector of the Indian economy and a major foreign exchange earner for the country. 3.4.1(b) Current scenario of the four wheeler industry in India: Source: FADA & ICRA Sectoral Review The Indian economy has grown at an annual rate of more than 8% over the last five years and the industrial production has made an outstanding contribution to this growth. Auto industry was licensed, controlled and restricted in the early years of independent India and had a limited contribution to the economy. But post delicensing in 1991 the industry has grown at an average rate of 17%. The industry currently contributes about 5% of the GDP and it is targeted to grow fivefold by 2016 and account for over 10% of Indias GDP. Automotive mission plan (AMP) expects the
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industry to reach a turnover of $150-200 billion in the next ten years from the current $45 billion levels. Over the last five years the production of four wheelers in India has increased from 9.3 lakh units in 2003-04 to 23 lakh units in 2008-09 reporting a CAGR of 20%. Vehicle manufacturers are increasingly adopting an outward looking approach and exploring new markets & territories, ranging from Middle East, Europe, South Africa, Algeria, Latin America, Russia, etc. Exports have increased immensely from 84,000 units in 2003-04 to 280,000 units in 2008-09. CRISIL (Credit Rating Information Services Of India Ltd.) estimates the passenger vehicle exports to cross 8 lakh units by 2012-13.

3.4.1(c) Market Share scenario in the car industry:

(i) Passenger Cars segment:
Domestic S ales (Nos.) FY08 FY09 YOY(%) 549,317 618,168 13 194,870 216,307 11 179,007 167,058 -7 59,452 59,373 -3 39,820 30,962 -5 16,986 45,265 166 26,720 29,567 11 37,130 66,398 79 1,103,302 1,233,098 12 Market S hare (%) FY08 FY09 49.79 50.13 17.66 17.54 16.22 13.55 5.39 4.81 3.61 2.51 1.54 3.67 2.42 2.40 3.37 5.38 100 100

Manufacturers Maruti S uzuki India Ltd. Hyundai Motors India Ltd. Tata Motors Ltd. Honda S iel Cars India Ltd. Ford India Pvt. Ltd. General Motors India Ltd. Mahindra Renault Pvt. Ltd. Others Total Source- SIAM

(ii) Utility Vehicles:

Manufacturers Mahindra Renault Pvt. Ltd. Tata Motors Ltd. Toyota Kirloskar Motor General Motors India Ltd. Force Motors Ltd. Maruti S uzuki India Ltd. Honda S iel Cars India Ltd. Ford India Pvt. Ltd. Others Total Source- SIAM Domestic S ales (Nos.) FY08 FY09 YOY(%) 89,784 104,020 16 47,917 49,725 4 43,563 48,202 11 21,871 21,278 -3 8,499 8,113 -5 3,221 3,927 22 1,873 3,428 83 1,975 2,918 48 1,603 1,978 23 220,306 243,589 12 Market S hare (%) FY08 FY09 40.75 42.70 21.75 20.41 19.77 19.79 9.93 8.74 3.86 3.33 1.46 1.60 0.85 1.41 0.90 1.20 0.73 0.82 100 100

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

3.5.1(c) Honda in India: Honda Siel Cars India Ltd., (HSCI) was incorporated in December 1995 as a joint venture between Honda Motor Co. Ltd., Japan and Siel Limited, a Siddharth Shriram Group company, with a commitment to providing Hondas latest passenger car models and technologies, to the Indian customers. The Honda City, its first offering introduced in 1997, revolutionized the Indian passenger car market and has ever since been recognized as an engineering marvel in the Indian automobile industry. The success of City as well as all its other models has led HSCI to become the leading premium car manufacturer in India. The total investment made by the company in India till date is Rs. 1620 crores, further investment of RS. 1000 crore is planned and being currently invested for the coming second plant in Rajasthan. The company has a capacity of manufacturing 100,000 cars. 7HSCIs state-of-the-art manufacturing unit was set up in 1997 at Greater Noida, U.P with an investment of Rs. 450 crore. The green-field project is spread across 150 acres of land (over 6,00,000 sq. m.). The initial installed capacity of the plant was 30,000 cars per annum, which was thereafter increased to 50,000 cars on a two-shift basis. The capacity has further been enhanced to 1,00,000 units annually in February 2008 . The capacity expansion was necessitated by the excellent performance of all the Honda models, particularly the growing demand for City in India. Several modifications were done by the company with the objective of offering higher quality products to its customers, faster and quicker. The expansion process also included expansion of the covered area in the plant, from 1,07,000 sq. m. to 1,31,794 sq. m. HSCI currently produces the newly launched Honda Jazz, All New City, Civic and Accord models in India and the premium SUV, CR-V is sold as a fully imported unit from Japan. The company operates under the stringent standards of ISO 9001 for quality management and ISO 14001 for environment management.

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3.6 About the Car:

3.6.1 The all new Honda City: The third generation of the concept design arrow-shot or arrows, make All New Honda City looks very different from the generation predecessor. Overall view All New Honda City more impressive. With exterior design changes so that the overall look sporty luxury at a time. All New Honda City is a perfect evolution of a mini-class sedan. The latest generation of Honda City will continue success in the automotive market. Honda City has this revolutionary view, and the more luxurious for a mini-class sedan. Design front bumper and spoiler made refers to the cars racing to the level of Aerodynamics can be maximum. In addition, also made a whole big enough air on the spoiler to reduce barriers when its winds, also as Feed of fresh air to the engine room. The larger size of the headlight to make Honda call it The Eagle Eye. Behind, All New City is designed according to tail arrows. An effect of arrows is established by design decks high and the trunk cut off, which also contribute to the smooth flow of air to the rear body. In addition, the form of bumper diffuser also added to create the effect HANDICAP style press and the road surface in order to maintain stability when the car was on high speed. The shape of the rear lights also changed, now mica lamp made in two colors, red and white three-dimensional. Interior also participate improvement, Honda wants to apply the concept of cozy Lounge in the car cabin. This is possible with the dimensions of space that is longer and more widely each 5mm from the previous generation (4.395mm and 16.95mm) and less than 15mm (1.470mm). There are also features reclining seat, which allows rear seat passengers could be laid down sitting position to get more comfortable. This technology may be applied first in a sedan, usually because the rear seat passengers with what is required baggage.

3.6.2 Importance of the all new Honda City for the Company: According to the management of HSCI, Honda City has been the most important car in the Honda line up. HSCI claims to sell around 60,000 cars every year. Out of these 2/3rd of the cars sold are City i.e. Honda sells 40,000 City every year.

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The City has been the star performer for HSCI since the time it was launched. However now it is taking the position of a cash cow for the company. i.e. it is generating the maximum sales for the company despite its small & stagnant market share.

CHAPTER IV:
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Research Methodology

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

4.1 Research Method:

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

4.2 Data Source:

The research makes use of both Primary & Secondary Data. a. Primary Data: The customer survey was based on the primary data which was collected by the researcher through one to one interaction with the customers, using the questionnaire.

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

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4.3 Target population & Sampling plan:

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

4.4 Target Areas:

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

4.5 Data processing:

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

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CHAPTER V:
Results & Discussions

29

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

5.1BUILDING OF CUSTOMER PROFILE:

5.1.1

GENDER:
Table 1.1

Frequency Male Female Total 175 25 200

Percentage 87.50% 12.50% 100%

Fig. 1.1

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

5.1.2

AGE:

Table 1.2 Cumulative Frequency 21 to 30 31 to 40 41 to 50 51 to 60 More than 60 Total 21 59 73 39 8 200 Percent 10.5 29.5 36.5 19.5 4.0 100.0 Valid Percent 10.5 29.5 36.5 19.5 4.0 100.0 Percent 10.5 40.0 76.5 96.0 100.0

31

Fig. 1.2

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

5.1.3

FAMILY STATUS:

Table 1.3

Frequency Married (With Kids) Married (Without Kids) 161 27

32

Percentage 80.50% 13.50%

Unmarried Total

12 100

6% 100%

Fig. 1.3

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

5.1.4

EDUCATIONAL QUALIFICATION:

Table 1.4

Frequency Under graduate Graduate Post Graduate Total 6 148

33 46

Percentage 3% 74% 23% 100%

200

Fig. 1.4

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

5.1.5

OCCUPATION:

Table 1.5

Frequency Business 139

34

Percentage 69.50%

Service Self-Employed Students Total

38 19 4 200

19% 9.50% 2% 100

Fig. 1.5

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

5.1.6

Monthly Household Income:

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Table 1.6

Level of income 50,000-75,000 75,001-1,00,000 1,00,001-1,25,000 1,25,001-1,50,000 1,50,001-1,75,000 More than 1,75,000 Total

Frequency 37 96 55 11 0 1 100
Fig. 1.6

Percentage 18.5% 48% 27.5% 5.5% ---0.50% 100%

As shown in the above graph, nearly half of the customers lie in the income segment of Rs.75,001 to 1,00,000 and more than 27% of the customers belong to the income of Rs.100,001 to 1,25,000. In India where more than 25% of the people live below the poverty line (Source: CIA Factbook 2008) and the average income is only around Rs.29500 (Source: Financial
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Express) this car (costing more than Rs.7.5 lakhs) seems to cater an extremely small segment of customers.

5.1.7 BUDGET DECISION:

Table 1.7(a) Frequency Percent Valid Percent Pre decided Not decided Total 154 46 200 77.0 23.0 100.0 77.0 23.0 100.0 Cumulative Percent 77.0 100.0

Table 1.7(b) Amount 6,00,00 to 8,00,000 8,00,001 to 10,00,000 10,00,001 to 12,00,000 Total Frequency 12 76 66 154 Percentage 7.8% 49.3% 42.9% 100%

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Fig. 1.7(b)

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

5.1.8 DRIVING SCENARIO:

Table 1.8

Driver Myself Chauffer Family members Total

Frequency 139 45 16 200

Percent 69.5 22.5 8.0 100.0

Valid Percent 69.5 22.5 8.0 100.0

Cumulative Percent 69.5 92.0 100.0

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Fig. 1.8

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

5.2ANALYSIS OF CUSTOMER PROFILE:

By analyzing the data collected above, it can be said that usually the profile of an all new Honda City customer would look as follows: The Customer would usually be a Male, who belongs to the age group of 41 to 50 years, is married and has kids.

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He would usually be a Graduate who runs his own business and earns a monthly income of around Rs. 75,000 to 1,00,000(or higher). The analyses also show that while buying the car the customers have a pre-decided budget of around Rs.8 lakhs to 10 lakhs. The city customers usually drive their car on their own.

5.3 Other important information regarding the City customers:

5.3.1 PURCHASE CRITERIA: Key Factors Considered Before Buying A Car: 1. Brand Name:
Table 3.1(a)
Cumulative Frequency Yes No Total 126 74 200 Percent 63.0 37.0 100.0 Valid Percent 63.0 37.0 100.0 Percent 63.0 100.0

Section I.1
2. Price Of The Car:

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Table 3.1(b)
Cumulative Frequency Yes No Total 60 140 200 Percent 30.0 70.0 100.0 Valid Percent 30.0 70.0 100.0 Percent 30.0 100.0

3. Exterior Styling:
Table 3.1(c)
Cumulative Frequency Yes No Total 52 148 200 Percent 26.0 74.0 100.0 Valid Percent 26.0 74.0 100.0 Percent 26.0 100.0

4. Interior Styling:
Table 3.1(d)

Cumulative Frequency Yes No Total 39 161 200 Percent 19.5 80.5 100.0 Valid Percent 19.5 80.5 100.0 Percent 19.5 100.0

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5. Performance:
Table 3.1(e)
Cumulative Frequency Yes No Total 27 173 200 Percent 13.5 86.5 100.0 Valid Percent 13.5 86.5 100.0 Percent 13.5 100.0

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When the customers were asked that, what were the key factors that they considered while buying the car? i. ii. iii. iv. v. 126 out of 200 respondents agreed that Brand Name was a key factor that was considered while buying the car. 60 out of 200 respondents said that price of the car was an important while buying the car. 52 out of all the respondents agreed that Exterior styling was an important criteria while buying the car. 39 out of 200 respondents considered interior styling to be a key factor. 27 respondents believed that the performance of the car was an important consideration for buying the car.

The possible reason behind the importance of Brand name while purchasing a car is the fact that Brand name is considered an indicator of the performance and quality of the product. It can also be seen that price of the car is also among the top priorities for the price sensitive Indian customer. However the fact that the Brand name comes before the price, shows that the Indian customers are willing to pay lavish amounts if such prices are justified by the quality provided. Similar results were depicted by a research conducted by The National Council of Applied Economic Research in automobile industry, which broke the myth that Maruti 800 (A.C. variant) & Hyundai Santro (A.C. variant with power steering) would not sell due to their high prices. However both the cars were welcomed by the Indian customers with open arms. 5.3.2 Source of Information:

Internet
Cumulative Frequency Yes No Total 200 100.0 100.0 103 97 Percent 51.5 48.5 Valid Percent 51.5 48.5 Percent 51.5 100.0

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T.V. Cumulative Frequency Yes No Total Yes No Total Percent Valid Percent 14.5 85.5 Percent 14.5 100.0 Cumulative Percent 55.5 100.0 29Word of 14.5 mouth 171 85.5

Frequency 200 Percent 100.0 Valid Percent 100.0 111 89 200 55.5 44.5 100.0 55.5 44.5 100.0

44

As shown above, according to more than 55% of the respondents who were interviewed, while buying a car they consult their friends and family for the information about the car. This shows that Word Of Mouth is the most important source of information for a buyer while buying the car. Word of mouth is considered to be one of the most economical yet immensely important sources of advertisement for any company but in order to spread a positive word of mouth the company needs to provide maximum possible satisfaction & value to the customers. The survey also shows that internet & T.V. were among the other important sources for information. However these forms of media still remain under used in India, by Honda.

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5.4 Competitive Analysis:

Other cars considered
Name of the car
Hyundai Verna Sx4 Fiat Linea Chevrolet Optra Accent Frequency 136 95 63 58 31 Percentage 68% 47.5% 31.5% 29% 15.5%

The survey reveals that 68% of the customers considered Hyundai Verna as one of the options while purchasing their cars. According to most of them the main reasons for considering Verna were the Brand Name Hyundai & the after sales services provided by the company. The Sx4 was the other most mentioned car and nearly 48% of the people considered it as a purchase option. They found the sporty & masculine look of the car very attractive.
46

The new Fiat Linea & Chevrolet Optra were also among the other options considered by the customers. Another reason which was given unanimously, in the favour of these cars, was that all of these cars came with a diesel variant. However, Honda still does not have a diesel car in their line up.

5.5 Analysis Customer Satisfaction:

5.5.1 Audio System:

Level of satisfaction from the audio system

Cumulative Frequency N/A Highly satisfied Satisfied Neither satisfied nor dissatisfied Dissatisfied Highly dissatisfied Total 15 28 113 22 16 6 200 Percent 7.5 14.0 56.5 11.0 8.0 3.0 100.0 Valid Percent 7.5 14.0 56.5 11.0 8.0 3.0 100.0 Percent 7.5 21.5 78.0 89.0 97.0 100.0

47

Fig. 5.1

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

5.5.2 Overall Styling & Features:

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Frequency of Scores allotted (in percentage) Features

Exterior Styling Interior Styling Spaciousness Riding Comfort Safety Image Handling Fuel Efficiency 1 ----------------2 ----------1.50% ----3 46% 51% 43% 43.50% 46% 43.50% 39.50% 57% 4 53.50% 49% 57% 56% 54% 54.50% 60.50% 43% 5 0.50% ----0.50% --0.50% -----

Fig 5.3

49

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

50

5.5.3 Additional features:

Table S. NO. Requested Feature CD/Cassette player Alloy Wheels Side Air Bags Rear Parking Sensors Navigation Frequency Percentage Price willing to pay(in Rs.) Nil (Free of cost) 12,000 to 15,000 5,000 to 7,000 1,800 to 3,000 10,000 to 15,000

1. 2. 3. 4. 5.

197 191 132 96 82

98.5% 95.5% 66% 48% 41%

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

51

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

Front styling
Cumulative Score 3 4 5 Total Frequency 84 115 1 200 Percent 42.0 57.5 .5 Valid Percent 42.0 57.5 .5 100.0 Cumulative Score 3 4 5 Total Frequency 103 95 2 200 Percent 51.5 47.5 1.0 100.0 Valid Percent 51.5 47.5 1.0 100.0 Percent 51.5 99.0 100.0 Percent 42.0 99.5 100.0

Side styling

100.0

52

Rear styling
Cumulative Score 3 3.5 4 Total Frequency 83 1 116 200 Percent 41.5 .5 58.0 100.0 Valid Percent 41.5 .5 58.0 100.0 Percent 41.5 42.0 100.0

53

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

5.5.5 Interior Styling: (a) Accessing from the Drivers seat:

Interior colour scheme

Cumulative score 3 4 Total Frequency 126 74 200 Percent 63.0 37.0 100.0 Valid Percent 63.0 37.0 100.0 Percent 63.0 100.0

54

Instrumental Panel (Design & Visibility)

Score 3 4 5 Total Frequency 100 99 1 200 Percentage 50% 49.50% 0.50% 100% Cumulative Percentage 50% 99.50% 100%

Seating posture
Cumulative Score 3 4 Total Frequency 100 100 200 Percent 50.0 50.0 100.0 Valid Percent 50.0 50.0 100.0 Percent 50.0 100.0

Leg & Head Room

Score 3 4 5 Total Frequency 100 99 1 200 Percentage 50% 49.50% 0.50% 100% Cumulative Percentage 50% 99.50% 100%

Audio (Performance & Control)

Score 3 Frequency 125 Percentage 62.50% 55 Cumulative Percentage 62.50%

4 5 Total

74 1 200

37% 0.50% 100%

99.50% 100%

Air conditioner
Score 2 3 4 5 Total Frequency 5 74 118 3 200 Percentage 2.5% 37% 59% 1.5% 100% Cumulative percentage 2.5% 39.5% 98.5% 100%

Road Visibility
Cumulative Score 3 4 5 Total Frequency 85 113 2 200 Percent 42.5 56.5 1.0 100.0 Valid Percent 42.5 56.5 1.0 100.0 Percent 42.5 99.0 100.0

56

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

(b) Accessing from the rear seat:

Rear seat comfort

Score 3 4 5 Total Cumulative Frequency 108 91 1 200 Percent 54.0 45.5 .5 100.0 Valid Percent 54.0 45.5 .5 100.0 Percent 54.0 99.5 100.0

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Shoulder & Leg Room

Score 3 4

Frequency 104 96 200

Percentage 52% 48% 100%

Cumulative Percentage 52% 100%

Cabin space
Cumulative Score 3 4 5 Total Frequency 115 84 1 200 Percent 57.5 42.0 .5 100.0 Valid Percent 57.5 42.0 .5 100.0 Percent 57.5 99.5 100.0

A.C.
Cumulative Score 2 3 4 5 Total Frequency 1 70 126 3 200 Percent .5 35.0 63.0 1.5 100.0 Valid Percent .5 35.0 63.0 1.5 100.0 Percent .5 35.5 98.5 100.0

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Audio System
Cumulative Score 3 4 5 Total Frequency 89 110 1 200 Percent 44.5 55.0 .5 100.0 Valid Percent 44.5 55.0 .5 100.0 Percent 44.5 99.5 100.0

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

5.5.6 Luggage Space:

Frequency of using luggage space
Cumulative Frequency Very often Often Sometimes Rarely Very rarely Total 11 54 52 49 34 200 Percent 5.5 27.0 26.0 24.5 17.0 100.0 Valid Percent 5.5 27.0 26.0 24.5 17.0 100.0 Percent 5.5 32.5 58.5 83.0 100.0

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Frequency of using luggage space & Spaciousness Spaciousness Frequency of using luggage space
Very often Often Sometimes Rarely Very rarely Total 3 2 11 9 16 16 54 4 8 40 40 30 17 135 5 1 3 3 3 1 11 Total 11 54 52 49 34 200

Frequency of using luggage space & Ease of Loading& Unloading

Frequency of using luggage space Ease of Loading& Unloading 3 Very often Often Sometimes Rarely Very rarely Total 2 14 19 23 16 74 4 5 37 28 20 18 108 5 4 3 5 6 0 18 Total 11 54 52 49 34 200

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

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

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5.5.7 Performance Of The Car:

Performance of the car

Cumulative Frequency Powerful Adequately powerful Under power Total 66 118 16 200 Percent 33.0 59.0 8.0 100.0 Valid Percent 33.0 59.0 8.0 100.0 Percent 33.0 92.0 100.0

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

5.5.8 Overall Performance:

Engine performance
Cumulative Score 3 4 Total Frequency 79 121 200 Percent 39.5 60.5 100.0 Valid Percent 39.5 60.5 100.0 Percent 39.5 100.0

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Transmission(Gear)
Cumulative Score 3 4 5 Total Frequency 97 101 2 200 Percent 48.5 50.5 1.0 100.0 Valid Percent 48.5 50.5 1.0 100.0 Percent 48.5 99.0 100.0

Suspension
Cumulative Score 2 3 4 Total Frequency 1 117 82 200 Percent .5 58.5 41.0 100.0 Valid Percent .5 58.5 41.0 100.0 Percent .5 59.0 100.0

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Mileage Brake
Score Score 2 3 3 4 4 5 5 Total Total Frequency Frequency 1 123 92 72 105 4 3 200 200 Percent Percent .5 61.5 46.0 36.0 52.5 2.0 1.5 100.0 100.0 Valid Valid Percent Percent .5 61.5 46.0 36.0 52.5 2.0 1.5 100.0 100.0 Cumulative Percent Cumulative Percent .5 62.0 46.0 98.0 98.5 100.0 100.0

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Noise & Vibration

Cumulative Score 1 3 4 5 Total Frequency 1 91 106 2 200 Percent .5 45.5 53.0 1.0 100.0 Valid Percent .5 45.5 53.0 1.0 100.0 Percent .5 46.0 99.0 100.0

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

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

Significance of safety
Cumulative Score Very important Important Not important Total Frequency 70 121 9 200 Percent 35.0 60.5 4.5 100.0 Valid Percent 35.0 60.5 4.5 100.0 Percent 35.0 95.5 100.0

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

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

Awareness of safety features

Cumulative Frequency Yes No Total 89 111 200 Percent 44.5 55.5 100.0 Valid Percent 44.5 55.5 100.0 Percent 44.5 100.0

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

5.5.10 Pricing Of The Car:

Is Honda City "value for money"

Cumulative Frequency Strongly agree Agree Neither agree nor disagree Disagree Total 43 88 37 32 200 72 Percent 21.5 44.0 18.5 16.0 100.0 Valid Percent 21.5 44.0 18.5 16.0 100.0 Percent 21.5 65.5 84.0 100.0

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

5.5.11 Accessory Package: (a) Awareness & Response:

Did you purchase it
Awareness Yes No Total No 31 149 180 Yes 20 0 20
Total

51 149 200

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

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

i)

Although they thought that the Elegance pack consisted of utility accessories, but they believed that the same should be provided by the company as standard features. They also felt that the same accessories could be bought from the market at much reasonable price. According to them, the accessories provided in the Illumination pack have mere decorative value and provided no utility.

ii)

(b) Is the accessory package Value for money:

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"Value for money"

Awareness about accessory package Yes No Total N/A 31 149 180 Strongly agree 4 0 4 Agree 7 0 7 Disagree 9 0 9 Total 51 149 200

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

5.5.12 Strengths & Shortcomings of the car:

Strengths
Strengths Styling & Design Brand Name Comfort Frequency 124 112 74 Percentage 62% 56% 37%

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

Weakness
Weakness Low Ground Clearance Light Weight Frequency 73 54 Percentage 36.5% 27%

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

5.6 Findings:
The major findings of the project are as follows: Customer Profiling: 1. 2. 3. 4. 5. 87.5% of the respondents were male. 36.5% of the respondents belonged to the age group of 41 to 50 years. 80.5% of the respondents were married and had kids. 74% of the respondents were graduates. 69.5% of the customers were businessmen.
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6. 48% of the City customers earned a monthly income of around Rs.75,001 to 1,00,000. 7. 77% of the customers had a pre-decided budget in their mind before purchasing the car, and out of these nearly 50% of the people had decided a budget of around 8,00,000 to 10,00,000. 8. 69.5% of the respondents drive their car on their own. Other important information regarding the City customers: 9. 63% of the respondents considered the Brand Name of the car, to be the key consideration while buying a car. 10. According to 55.5% of the respondents word of mouth was the main source of information about the cars. Competitive Analysis: 11. 68% of the respondents considered Hyundai Verna as an option while buying their car. Satisfaction from the cars, its features & performance: 12. 56.5% of the customers were happy with the performance of the audio system of the car, whereas 8% of the customers were found to be dissatisfied. 13. 60.5% & 54.5% of the customers scored the all new Honda City a 4 out 5 for its handling & Image, respectively. 14. 98.5% of the customers requested for a CD/cassette player to be provided in the car as a basic feature and 95.5% of the customers wanted alloy wheels to be added to the car. 15. 57.5% & 58% of the respondents rated the all new Honda City as 4 out of 5 for the front & rear styling, respectively. Whereas 51.5% of them gave the side styling a 3 out of 5. 16. Almost all the respondents were happy with the interior styling and design of the car. However, only some people showed signs of discontentment with the performance of the A/c of the car. 17. No respondent gave the car less that 3 out of 5 for the luggage space or for the ease of using it. 18. 59% of the customers thought that the car had adequate power. 19. As far as the overall performance of the car is concerned, only 1 respondent out of 200 gave the car a 2 out of 5 for its millage & suspension and only 1 customer gave the car 1 out of 5 for the unwanted noise & vibration. Rest all the customers seemed to be very pleased with the overall performance of the car. Safety features & the car: 20. 60.5% of the respondents considered the safety aspect of the car to be very important.
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21. 55.5% of the customers were unaware about the advanced safety features of the all new Honda City. Pricing of the car: 22. Although 44% of the respondents agreed that the all new Honda City provides value for money, nearly 16% of them also thought that it was overpriced. Accessory Package- Awareness & Purchase: 23. Only 25.5% of the respondents were aware about the availability of the accessory packages. 24. Only 10% of the total number of respondents actually bought the accessory package. 25. Out of those respondents who bought the accessory package 35% think that the package is not value for money. Strengths & Weaknesses of the car: 26. 62% of the respondents believe that the styling & design of the car are its biggest strengths. Whereas 56% of them think that the Brand Name Honda is the cars main strength and 37% of them thought that the comfort provided by the car was its main strength. 27. According to 36.5% of the respondents low ground clearance of the car was its main drawback, whereas 27% of them thought that the light weight of the car was it main flaw.

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

1. The sample size of the survey was very small, Due to limited access to RTO Authorities and Honda Showrooms. 2. 3. The scope of survey was limited to Delhi and NCR. As the questionnaire was lengthy and time consuming, the respondents often lost interest and became impatient. Hence the answers given by them may suffer from biasness. Some of the open-ended questions were subject to the knowledge of and interpretation by the researcher.

4.

5. Most of the respondents had used the car for a period of less than six-months, therefore their level of satisfaction from the car is expected to fall with the passage of time. 6. The limited knowledge of the research in the field of research was another limitation related to this survey.

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CHAPTER VI:
Recommendations & Conclusions

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

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

6.2 CONCLUSION

Although, post decentralisation in 1991, the auto industry in India has grown at a commendable average rate of 17%, the increase in international as well as domestic completion has made it a buyers market rather than a sellers one. Today the customers have wide brand & model choice, and with the rising income levels, especially among young adults, coupled with the low equal monthly instalments (EMIs) almost all these international and domestic brands & models have come within the reach of the customers. In order to survive in this highly competitive market the companies not only need to increase the number of head count of the customers but also needs to retain the present set of customers. For this, an in-depth study of the consumer behaviour and their likes & dislikes is required. The project titled Analysis Of New Honda City Customer Profile & Satisfaction Level was a step towards providing the Honda Siel Cars India Ltd. with the detailed profiles of the Honda City customers and an insight about the level of satisfaction among the customers. This study reveals that the Brand name Honda was the basic reason for the customers to choose the all new Honda City. A large majority of customers are happy with the interior & exterior features & luggage cabin of the car. However, some customers exhibited
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dissatisfaction towards the performance of the air-conditioner of the car. The customers also appreciated the handling, mileage and suspension of the car. It was also found that almost all the customers strongly feel that the alloy wheels and the CD/Cassette player should be provided as a basic feature of the car and majority of them also showed concern regarding the lower ground clearance and lighter weight of the car. The company should therefore consider the above stated points in order to serve the customers more effectively and efficiently, as it would not only help the company in retaining its existing customers but would also help in increasing its market share.

CHAPTER VII:
Annexure
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Annexure I
Questionnaire
Q1. Name____________ Q2. Gender i. ii. Male Female

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

Business Service Self employed

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

Q9. What does your car mean to you? (Multiple choice) i. ii. iii. iv. v. vi. vii. viii. Companion 1St love 2nd home Best friend Most prized Possession Someone you can rely on Basic need Other

Q10. What prompted you to buy a car? i. ii. iii. iv. v. Tired of previous car Previous car had trouble Better off now economically Family structure changed Received as a gift
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vi. vii. viii. ix. x. xi. xii. xiii. xiv. xv.

Became necessary for work I/ family member got a drivers license Company gave me a car Became necessary for commuting Wanted my own car Disappointed with the previous car dealer Purchase conditions improved Maintenance cost of previous car was high Had given the previous car to my family member Other

Q11. Key factors before buying a car i. ii. iii. iv. v. vi. vii. viii. ix. x. xi. xii. xiii. xiv. Brand name Price of the car Exterior styling Interiors Driving comfort Riding comfort Spaciousness of the cabin Luggage capacity Performance Ease of handling Safety Fuel efficiency After sales services Cost of spare parts
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xv.

Other

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

Q13. Where did you get the information about the new Honda city? i. ii. iii. iv. v. vi. Newspaper Television Internet Banners/ hoardings Friends/ family Road shows

Q14. Key reasons for buying the new Honda City i. ii. iii. iv. v. vi. vii. viii. Brand name Affordable price Exterior styling Variety of colours available Interior spaciousness Driving riding comfort Safety features Fuel efficiency
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ix. x. xi. xii. xiii. xiv. xv. xvi.

Power Technology used I VTEC engine Dealers network Good salesmanship After sales services Positive feedback from family/friends Other

Q15. Which variant? i. ii. iii. 1.5 (MT) 1.5S (MT) 1.5S (AT)

Q16. Why did you choose this question? i. ii. iii. iv. v. Economic constraint Better social image Convenience Suited my budget Other

Q17. Did you decide your EMI before buying your car? i. ii. Yes No

Q18. Who drives your Honda city? i. Myself

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ii. iii. iv.

Chauffer Family & friends All of the above

Q19. During weekdays your car is used for i. ii. iii. iv. Business purpose By family Travel and work Other

Q20. During weekends your car is used for i. ii. iii. iv. Social visits Shopping Long drives Other

Q21. How often do you use your audio system? i. ii. iii. iv. v. Very often Often Sometimes Rarely Very rarely

Q22. How satisfied are you with the audio system? i. Highly satisfied
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ii. iii. iv. v.

Satisfied Neither satisfied nor dissatisfied Dissatisfied Dissatisfied

Q23. Rank the following features on scale of 1 5 i. ii. iii. iv. v. vi. vii. viii. Exterior styling Interior styling Spaciousness Riding comfort Safety Image Handling Fuel efficiency

Q24. Are there any features that you think should be added to the all new Honda City? If yes, then at what cost? S. No. 1 2 3 4 5 6 7 8 Additional Features Alloy wheels Fog lamps Side protectors Bumper protectors Leather seats Side airbags Rear centre arm rest CD/Cassette player
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Price Charged

9 10 11 12

Navigation Blue tooth Rear parking sensors Any others: -------------------------------------------------------------------------------------------------

Q25. What do you think about the exterior design of the new Honda city? i. ii. iii. iv. v. vi. vii. Arrow short form Stylish Classy Trendy Advanced Scientific Other

Q26. Rate the following on a scale of 1- 5 i. ii. iii. Front styling Side styling Rear styling

Q27. When seated on the drivers seat rank the following on a scale of 1 5 i. ii. Interior colour scheme Visibility of instrument panel
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iii. iv. v. vi. vii. viii. ix. x.

Dashboard design Seating posture Leg room Head room Access to audio control Audio system Air conditioning Road visibility

Q28. When seated on the rear seat rank the following on a scale of 1 5 i. ii. iii. iv. v. vi. Rear seat comfort Shoulder room comfort Leg room Cabin space Air conditioning Audio system

Q29. How often do you use your luggage space? i. ii. iii. iv. v. Very often Often Sometimes Rarely Very rarely

Q30. Rate the luggage space on a scale of 1 5 i. ii. Spaciousness of the luggage cabin Ease of loading and unloading

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

Powerful Adequately powerful Under power

Q32. Rate the following on a scale of 1 -5 i. ii. iii. iv. v. vi. Engine performance Transmission Mileage Suspension Brake Noise/ vibration

Q33. In your opinion how important is the safety aspect of the car i. ii. iii. Very important Important Not important

Q34. Are you aware about the safety features of the new Honda city? i. ii. Yes No

Q35. If yes, could you name any 3 safety features of the car? i. ____________________ ii. ____________________ iii. ____________________ Q36. All new Honda city is value for money? i. ii. iii. Strongly agree Agree Neither agree nor disagree
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iv. v.

Disagree Strongly disagree

Q37. Are you aware about the new accessory package of the new Honda city? i. ii. Yes No

Q38. If yes then did you buy the accessory package? i. ii. Yes No

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

Q40. How satisfied are you with the accessory package bought by you? i. ii. iii. iv. v. Highly satisfied Satisfied Neither satisfied nor dissatisfied Dissatisfied Highly dissatisfied

Q41. Do you think the accessory package is value for money? i. ii. iii. iv. v. Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree

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Q42. How has your overall experience with the new Honda city been? i. ii. iii. iv. v. Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree

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

Q44. Is there any dissatisfaction point with your Honda city? i. ii. Yes No

Q45. If yes, could you please tell us the main reason for your dissatisfaction: _________________________________________________________ _________________________________________________________ Q46. Would you like to continue your relationship with Honda in future? i. ii. iii. Yes No Cant say

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Q47 whats your monthly income? i. ii. iii. iv. v. vi. vii. 50,000 75,000 75,001 1, 00,000 1, 00,001 1, 25,000 1, 25, 001 1, 50,000 1, 50,001 1, 75,000 More than 1, 75,000 Other

Annexure II
References

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

Journals & Magazines

i. Overdrive Magazines, March 2009 Edition

ii. Autocar India, March 2009 Edition iii. CRISIL journals iv. Broachers by SIMA

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 Books
v. Peter Druker: A critical commentary on his philosophy of management,by C. Northcotr Parkison, Pg.287 vi. Realities of management by John Marsh, glossary, Pg-389 vii. Consumer Behaviour by LeonG. Schiffman,9th Edition, Glossary, G-3 viii.Marketing Management by Philip Kotler, 11th Edition, Chapter3, Pg.70 ix. Customer satisfaction by P. Parker, Chapter1, Pg-5

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