Consumer Behavior

IJRFM Volume 1, Issue 2 (June, 2011) (ISSN 2231-5985)

International Journal of Research in Finance & Marketing

http://www.mairec org 86

STUDY OF CONSUMER BUYING BEHAVIOR TOWARDS BIKES

Omesh Chadha*

Abstract

In this era of cut throat competition, no company can even survive in the market place

without knowing its products strengths and weaknesses, opportunities and threats. It has

to fortify itself against threats from the environment and exploit its strengths or increase

profits. And in order to do so, the company has to conduct regular surveys to know the

customer’s opinions, needs, and preferences. This helps the company to manufacture the

product like wise for each customer’s expectations.

It has now become more important for the customer confidence and higher positioning of

buyer perception. Thus, Surveys becomes genuine key to success.

The motorcycle segment is dominated by 4 major players viz. HERO HONDA, BAJAJ,

TVS, ROYAL ENFIELD. The expanding Indian market, the growing size of the middle

class and the rise in aspirations of the youth along with opening up of the Indian

economy have collectively influenced the steady growth of the two wheeler market in

India. With leading foreign brands in collaborations with Indian manufacturers entering

the Indian market, the customer could not have asked for more. In fact, the Indian bike

market has grown immensely and the preference for variety, looks, design has brought in

a number of models in the market. In the last 2 to 3 years, the craze for motorcycle over

the scooters has picked up and one can find today even girls craving for a motorbike. Not

only in the Metros but in small towns and cities also .We are witnessing a tremendous

segmentation in the Bike market. The entry level model will continue to be a high-interest

segment for the aspirants.

*Research Scholar, (Ph.D. Programme), Singhania University, Rajasthan. (Established by

the Govt. of Rajasthan & recognized as per section 2f of UGC act, 1956) Pacheri Bari,

Distt. Jhunjhanu, Rajasthan-333515.




Against this backdrop, the present project work has been undertaken. With the focus of

the consumer shifting to brand and product features, the project is a study aiming at

understanding what does a customer wants from Power segment bikes(150cc & plus).

Keywords

Customer Satisfaction, Segmentation, Market Share, Purchase.

INTRODUCTION

MOTORCYCLE

The motorcycle segment is dominated by 4 major players viz. HERO HONDA, BAJAJ,

TVS, ROYAL ENFIELD. Besides there are players like:- HONDA(itself alone),

LML,KINECTIC. The market share of each of the player is as given below.

Near 70% of the motorcycle sales is from Indo-Japanese motorcycles and rest coming

from Indian motorcycle manufacturers. The Indo-Japanese segment is catered by 4 to 6

models from each of the players viz. . HERO HONDA, BAJAJ, TVS, ROYAL

ENFIELD etc. But majority of sales is of 100cc to 125cc motorcycles. The Indo-Japanese

motorcycles are costlier due to import content and royalty payments to their Japanese

collaborations. But, These motorcycles are far ahead of Indian Manufacturers viz.

Rajdoot from EYML, Yexzdi from IDEAL JAWA; in terms of technology and fuel-

efficiency.

MARKET SHARE IN THE MOTORCYCLE SEGMENT

HERO HONDA 46.8%

HONDA 3.2%

TVS 9.4%

BAJAJ 24.6%

ROYAL ENFIELD 2.8%

LML 9.2%

KINETIC 4%




Sources:-- SIAMINDIA Table 1

The expanding Indian market, the growing size of the middle class and the rise in

aspirations of the youth along with opening up of the Indian economy have collectively

influenced the steady growth of the two wheeler market in India. With leading foreign

brands in collaborations with Indian manufacturers entering the Indian market, the

customer could not have asked for more. In fact, the Indian bike market has grown

immensely and the preference for variety, looks, design has brought in a number of

models in the market. In the last 2 to 3 years, the craze for motorcycle over the scooters

has picked up and one can find today even girls craving for a motorbike. Not only in the

Metros but in small towns and cities also.

Trying to catch up with these, manufacturers are busy working out customer profiles.

With the competition hotting up one can find a host of discounts including: cash rebates

and free accessories to push sales of the commuter bikes. Certain changes are also visible

as far as customer preferences are concerned. The basic 100cc bike market is suddenly

experiencing a slow down in the growth. This Commuter bike was a favorite till the other

day commanding up to 90% of the total bike sales. The shift towards 100cc plus bikes is

suddenly discernable and the segment is expected to double in the next year itself.

GROWTH OF TWO WHEELER INDUSTRY

India is the second largest manufacturer of two wheelers in the world. It stands next

only to Japan and Chine in terms of the number of two wheelers produced and sold

respectively. India is one of the very few countries manufacturing three wheelers in the

worlds. It is the world’s largest manufacturer and seller of three wheeler.

The two wheelers market has had a perceptible shift from a buyers market to a seller

market with a variety of choices. Players will have to complete on various fronts viz

pricing, technology product design, productivity, after sale service, marketing and

distribution. In the short term, market shares of individual manufacturers are going to be

sensitive to capacity, product acceptance, pricing and competitive pressures from other

manufacturers.




All the three segments, motor cycles, scooters and mopeds have witnessed capacity

additions in the last one year and it will continue in the upcoming period as an when

Honda opens a local subsidiary. Over this period, only the motorcycle segment is

expected witness higher demand vis-à-vis supply, while the scooter and mopeds supply

will outstrip demand.

The Indian two-wheelers industry can be broadly classified into three major segments

scooters, motorcycles and mopeds. The domestic two wheeler sales of 3.778mm in

FY2010 constitutes scooter sales of 33.4%(39% inFY10), motorcycle 47.7%(41%

inFY10) and moped 17.6% (20% in FY10). The motorcycle segment has gradually

increased its presence from 27% in FY08 to 47.7% in FY2009 mainly at the expenses of

the scooter and, to some extent, the moped segment Now 78.5% in FY10).

The demand for scooter is on the wane and witnessed a 10% yoy fall in FY 2007. Than

40% YOY fall in 09, With the gradual shift in demand, sales in the scooter segment is

expected to fall further, while on the other side motorcycle and scooterette segments will

record continued growth in the future. This will translate into a demand fall of around

20% in scooter while sales of scooterettes will rise by around 30% inFY11. With the

ongoing expansion from Bajaj Auto Ltd., LML and TVS Suzuki, the capacity in the

sector will increase from 2mm in FY 2009 to 3.15mm by FY11, leading to a surplus

situation.

We expect the motorcycle segment to continue to grow at an average of 30% in FY11.

This will increase demand for motorcycles from 1.796mmin FY2009 to 3.15mm inFY11.

The supply of motorcycles as per the present trend will increase from 2.08mm inFY2009

to 3.38mm in FY11. The segment will be witnessing several new entrants in FY11,

mainly in the four stroke sub-segment like Suzuki, Dokuti etc. This will lead to an over

supply situation and increase the competition in the Japanese segment.

One expects the demand for mopeds to grow at a modest rate of 5% in FY11. The

demand for mopeds will increase from 0.726mm in FY2009 to 0.7623mn in FY11. The

moped production capacity is expected in increase from 1.17mn in FY2009 to 2.2mn in

FY11.




As incomes grow and people feel the need to own a private means of transport, sales of

two wheelers will rise. Penetration is expected to increase to approximately to more than

25% by 2011 end.

REVIEW OF EXISTING LITERATURE

Various surveys and researches have been carried out regarding what a consumer wants

from a bike. Some of them, which I will be taking into account are

Parmod Pathak, Saumya Singh, does some of the work that had been already done in this

regard and their work was published in Pradigm, Vol.VIII No. 1 January-June 2004.

Another major contribution had been done by Dubey J and Patel R and their work was

published Management Vol. 42 in Indian No.11 (November ) pp. 66,70 Laudon D and

Della Bitta Albert do another major contribution.

Parmod Pathak, Saumya Singh reviewed about " What Does A consumer want from a

Bike " dubey J and Patel R reviewed about "Role of Advertisement : in buying decision

of bikes " Auto India and Overdrive India web sites provides us a lot of information

about the various features provided by various power bikes.

- www.thehindubusinessline.com

(how the 150cc mode 1 stake up)

- www.flonnet.com (Bike with mileage and power)

(150cc plus category)

- Motor Cycle Trader Feb. 08

(Power bike changing scenario)

Objectives of the study

Objectives are the pillars of any research and survey. The main Objectives of the present

study are as follows:

• To study the rapid changing perception of consumers towards power segment

bikes.

• To study the satisfaction level of consumers, who uses bikes.




• To study effect of advertisement on the purchases decision of the consumers.

• To study the main factor that most influence the consumer to buy a bike.

• To study the brand preferences of buyers.

• To study the factors influencing consumers to buy power bikes.

RESEARCH METHODOLOGY

For finding something new in any field research has to be done. Research not only

helps the present study rather it provides a base for the future study. Research on this

topic is being done taking into consideration the present problem and with a hope that

it would provide a base in future while capital budget is being set.

Research basically means moving from certain known facts to the unknown. And that’s

what is being done in this project. All possible resources are being considered i.e.;

primary as well as the secondary so that the result can be most appropriate. All efforts are

being done for successful completion of the project. The main aim of the research is to

reveal the truths of the facts which are hidden and which have not been discovered as yet.

Manini (a well known researcher) has rightly said, “All progress is born of inquiry. Doubt

is often better than over confidence, for it leads to inquiry and inquiry leads to

inventions.”

Before conducting any research the researcher must have a framework of what has to be

done throughout the project along with the procedure to be followed. And this framework

is well known by the term research design. Every research design consists of a proper

sequence and same has been done here. It consists of the following stages:

• Formulation of the problem.

• Reviewing of available literature and facts.

• Deciding about requirement of the data.

• Finding all possible sources of data.

• Selection of the best possible sources.

• Anticipation and interpretation of the results




RESEARCH DESIGN

A research design is the arrangement of conditions for collection and analysis of data in a

manner of that aims to combine relevance to the search the research purpose with

economic in procedure. The descriptive research study is used to complete this project

report.

DATA COLLECTION

There are mainly two sources of data collection primary sources and the secondary

sources.

Primary Data

During the course of experimental research we collect the primary data with the help of

Questionnaire. There is greater flexibility under this method as the opportunity to

restructure, question is always present and there are less chances of non-response.

Secondary Data

For Secondary data the book which has been referred here is Newspaper and Websites.

The Author provides an overview of the whole retail marketing, with a particular focus

on how it has changed the way businesses of every size across to customers.

UNIVERSE

♦ All respondent

Area : Sonipat, Panipat, Karnal, Kurukshetra.

SAMPLING TECHNIQUE

Non-Probability sampling technique

Random sampling

SAMPLING SIZE

Information was collected from a sample size of 50 respondents from each District which

included both males and females. All of the above were completed in all respects.

Therefore, data has been tabulated from the 200 completed forms.




Sampling Unit : One. As one Questionnaire is being filled by one respondent.

LIMITATIONS OF THE STUDY

A study of such magnitude is bound to suffer from certain constraints and limitations,

some of these are summarized below:

� Sample size chosen was not sufficient to conclude

� Few of the people approached were not aware of the concept

� Lack of interest was shown by the respondents

� Area constraint was there

� Cost incurred in doing this project was high

� Few of respondents were not able to answer the questions properly

� Some respondents didn’t give answers to full questionnaire

As I used the questionnaire method for doing my market studies, so it is not necessary

that every respondent will give true information.

One of the limitation was the inexperience of the researcher which unfortunately can’t be

blamed on other persons.

RESULTS

The findings of the study are presented under the following four headings:

1.) Pre-Purchase Analysis

2.) Factors influencing brand preferences

3.) Brand wise ownership of the sample respondents

4.) Post-Purchase analysis

1)Pre-Purchase Analysis:

Purchasing is a dynamic science and also the most important function of every family. A

home maker must devote time, attention and energy to it. It is influenced by certain

considerations which lead the consumers to select a particular brand of products.

Besides, the availability of wide varieties of brands aggravates and complicates the act of

purchasing. As purchasing is complicated involving many decisions at every step and as

each family differs widely in this, it is felt necessary to study the purchasing habits of




consumers in selecting the brands of Bikes in the study area. It is studied under the

headings :

Sources of information

Purpose of purchasing and

Persons influencing purchase decision.

a)Sources of Information:

In this survey an attempt is made to find the sources of information on which most of the

people rely for their purchase decision.

Table 2 Sources of Information for Selecting a Bike

Sources Number of Respondents Percentage

Advertisement 26 13

Sales People 10 5

Relatives 46 23

Friends 118 59

Total 200 100

Source: Primary data

From the above table it could be inferred that out of the 100 respondents, 118 (59%)

obtained the information from their friends. Forty six respondents (23%) got the

information from relatives whereas twenty six respondents (13%) got the information

from advertisements. It is interesting to note that only ten respondents (5%) got the

information from sales people.

b) Reasons for buying:

Now-a-days Bikes are considered to be a matter of necessity. However, some people

consider it as a matter of prestige. There are people who may buy a Bike for the purpose

of availing themselves of petrol allowance or cheap credit facilities. Here an attempt is

made to analyze the reasons for buying a Bike.




Table 3: Reasons for Buying a Bike

Category Number of

Respondents

Percentage

Comfort and convenience 146 73

Status symbol 30 15

Loan Facilities 14 7

For Availing Petrol Allowances 10 5

Total 200 100

Source: Primary Data

Table 3 shows that out of the 100 respondents, 146 respondents (73%) have purchased a

Bike for the purpose of comfort and convenience, while 30 respondents (15%) have

purchased a Bike to use it as a status symbol. Fourteen respondents (7%) have purchased

Bikes for the purpose of availing themselves to loan facilities. Only 10 respondents (5%)

have purchased a Bike for the purpose of availing themselves to petrol allowance.

c)Person influencing purchase decision:

Decision making is an act of projecting one’s own mind upon an opinion or course of

action. Decision making is a conscious and human process, involving both individual

and social phenomena based upon factual and value premises, which concludes, with a

choice of one behavioral activity from among one or more alternatives with the intention

of moving towards some desired state of affairs. Hence an attempt is made to find out the

people who influence the purchase decision of a Bike.

Table 4: Decision Makers Regarding Purchase of a Bike

Category Number of Respondents Percentage

Yourself 20 10

Spouse 16 8

Children 20 10




Collectively 144 72

Total 200 100


Table 4 shows that out of the 100 respondents, a vast majority of them (72%) took the

decision collectively while buying a Bike, whereas 20 respondents (10%) took the

purchase decision by themselves. Another 20 respondents (10%) were influenced by his/

her children while taking the purchase decision. Sixteen respondents (8%) were

influenced by their spouse while buying a Bike.

2.) FACTORS INFLUENCING BRAND PREFERENCE:

The various factors influencing purchase of a Bike is analyzed by adopting Garret’s

ranking technique. The respondents were asked to assign the rank for the various factors

namely, price, safety, brand name, fuel efficiency, technical collaboration, capacity of the

vehicle and warranty terms.

Table 5: Factors Influencing the Purchase of A Bike

Factor/Rank Number of Respondents Total

Respondents

I II III IV V VI VII

Price 28 22 14 14 64 32 26 200

Safety 24 16 22 68 38 28 4 200

Brand Name 33 61 36 19 20 16 15 200

Fuel

Efficiency

78 30 32 26 20 6 8 200

Technical

Collaboration

12 34 48 26 22 20 38 200

Capacity of

the vehicle

8 24 36 22 16 52 42 200

Warranty

terms

18 14 12 20 20 46 70 200





Garret’s Formula:

100(Rii – 0.5)

Percent Position = ——————

Nj

Where Rij = Rank given for the ith

variable by the jth

respondents.

Nj = Number of variable ranked by the jth

respondent.

By using this formula, the result obtained was compared with Garrett’s ranking

table and the scores were given. The total scores of each item were added and ranks were

given according to its total value.

Table 6 : Garrett’s Ranking Table

S.N. Factors Score Average

Score

Rank

1. Price 9539 47.70 V

2. Safety 10470 52.35 III

3. Brand Name 11336 56.68 II

4. Fuel Efficiency 12393 61.97 I

5. Technical Collaboration 9750 48.75 IV

6. Capacity of the vehicle 8706 43.53 VI

7. Warranty Terms 8013 40.07 VII


It could be inferred from the table 4.17 that fuel efficiency is the most important factor

influencing the purchase of a Bike followed by brand name, safety, price and the like.

3.)BRAND WISE OWNERSHIP:




Table 7: Brand Wise Classification of Sample Respondents

Brand Name Number of Respondents

Hero Honda 54

TVS Suzuki 20

Honda 40

Enfield 36

Bajaj 50

Total 200


Table 7 clearly shows that Hero Honda is the most popular brand of Bike (52%) followed

by Bajaj brand (14%) and TVS brand (10%) and the like.

4.)POST – PURCHASE ANALYSIS:

Consumer decisions do not end with the act of purchase but continue as the consumer

uses the product and evaluates his or her purchase decision. Consumers tend to judge

their experience against their expectations when performing a post-purchase evaluation.

A long as positive reinforcement takes place, the consumers will tend to continue to

purchase the same brand and recommend the same brand to others as a natural corollary.

Such behavior at the post-purchase level is often termed brand allegiance. This brand

allegiance is analyzed through “Consumer satisfaction” and “recommendation to others”.

a) CUSTOMER SATISFACTION:

Table 8: Satisfaction with their Bikes

Factor No. of Respondents Percentage

Highly satisfied 106 53

Satisfied 94 47

Dissatisfied 0 0

Total 200 100





Table 8 shows that out of the 100 respondents, 106 respondents (53%) are highly

satisfied with their Bikes. Ninety Four respondents (47%) are satisfied with their Bikes.

b) RECOMMENDING TO OTHERS:

It has been already established in this survey that the respondents seek opinion

from the existing users while purchasing Bikes. It is clear (from the Table 9) that friends

and relatives occupy an important place among the various sources of information

available to the respondents. Only a customer who is fully satisfied with the product, will

recommend it to other prospective buyers. So, an attempt is made in this survey to find

the percentage of respondents who recommend their brand to other prospective buyers.

Table 9: Recommending the Brand to Others

Factors No. of Respondents Percentage

Yes 164 82

No 36 18

Total 200 100


Table 9 shows that 164 respondents (82%) recommend the brand, which they own to

others who are willing to purchase.

CONCLUSION

Most of the respondents were aware of many popular brands of Bikes. The customers

give more importance to fuel efficiency than to other factors. They believe that the brand

name tells them something about product quality, utility, technology and the like. The

consumers prefer to purchase the Bikes which offer high fuel efficiency, good quality,

technology, durability and reasonable price.

SUGGESTIONS




On the basis of the findings, the following suggestions are made:

� With a view to improve the fuel efficiency of the Bike, the manufacturers should

spend a considerable amount on research and development.

� It is suggested that the manufacturers should make all efforts to control cost

reduction.

� It is suggested that the brand image and brand loyalty could be boosted by selling

quality Bikes at a reasonable price to suit the needs of middle income group.

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Consumer Behavior

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