Consumer Satisfaction in Automobile Industry PDF

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Consumer Satisfaction in Automobile Industry Research Methodology Report 2016 Efforts By: SYBBA-F Group No. 2 Akshat Mehrish- 06 Aliasger Fanaswalla- 07 Anaka Gore- 08 Ananya Singh- 09 Anish Jain- 10 Consumer Satisfaction in Automobile Industry: Introduction The automobile industry in India is one o...

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Consumer Satisfaction in Automobile Industry Research Methodology Report 2016

Efforts By: SYBBA-F Group No. 2 Akshat Mehrish- 06 Aliasger Fanaswalla- 07 Anaka Gore- 08 Ananya Singh- 09 Anish Jain- 10

Consumer Satisfaction in Automobile Industry: Introduction The automobile industry in India is one of the largest in the world with an annual production of 23.37 million vehicles in FY 2014-15, following a growth of 8.68 per cent over the last year. The automobile industry accounts for 7.1 per cent of the country's gross domestic product (GDP). The Two Wheelers segment, with 81 per cent market share, is the leader of the Indian Automobile market, owing to a growing middle class and a young population. Moreover, the growing interest of companies in exploring the rural markets further aided the growth of the sector. The overall Passenger Vehicle (PV) segment has 13 per cent market share. Customer satisfaction is a term frequently used in marketing. It is a measure of how products and services supplied by a company meet or surpass customer expectation which are the needs and wants of individuals in the economic market place. Such expectations are usuall d i e people s p e o ei ed ideas ega di g goods a d se i es. Custo e satisfaction is defined as "the number of customers, or percentage of total customers, whose reported experience with a firm, its products, or its services (ratings) exceeds specified satisfaction goals. Customer satisfaction is an ambiguous and abstract concept and the actual manifestation of the state of satisfaction will vary from person to person and product/service to product/service. It is closely related to consumer loyalty which the result of consistently positive emotional experience, physical attribute- based satisfaction and perceived value of an experience, which includes the product or services whereas the state of satisfaction depends on a number of both psychological and physical variables which correlate with satisfaction behaviours such as return and recommend rate. The level of satisfaction can also vary depending on other options the customer may have and other products against which the customer can compare the organization's products. In a competitive marketplace where businesses compete for customers, customer satisfaction is seen as a key differentiator and increasingly has become a key element of business strategy. Therefore, it is essential for businesses to effectively manage customer satisfaction. To be able do this, firms need reliable and representative measures of satisfaction. In researching satisfaction, firms generally ask customers whether their product or service has met or exceeded expectations. Thus, expectations are a key factor behind satisfaction. When customers have high expectations and the reality falls short, they will be disappointed and will likely rate their experience as less than satisfying. For this reason, a luxury resort, for example, might receive a lower satisfaction rating than a budget motel—even though its facilities and service would be deemed superior in 'absolute' terms.

Satisfied customers, satisfied employees and satisfied shareholders all have one common characteristic – they are positive and enthusiastic about the company they are dealing with. Talking in more detail, they shall behave in a way desired and understood by a firm, when it comes to making decision about further cooperation with the company. Specifically, they will be making repeat purchases, delivering best quality of work and investing additional funds in the company stocks. Such behaviour of satisfied customers, employees and shareholders will contribute to business growth. Therefore satisfaction, understood in such a wide context, shall definitely e o the top of a o ga isatio s list as it has st o g positi e i pa t o usi ess esults. Customer satisfaction is often considered as the driver of customer loyalty and consecutive retention. This statement, although intuitively true, could be argued with. A satisfied customer may not always be a loyal one. Some may even argue that there is no reason to retain customers as new customers can easily be acquired if the marketing strategy is well in place. Another argument is that acquiring new customers can be more expensive than retaining existing customers.

Review of Literature

Westbrook (1980) Research on consumer satisfaction with products has typically ignored influences other than the confirmation of expectations relative to product outcomes. This paper examines the impact of broader, intrapersonal affective variables on satisfaction, and presents empirical results on the relative effects of both types of influence. the findings support the proposition that product satisfaction is partly a function of broader affective influences within the consumer, in addition to purchase-specific cognitive factors, such as the extent to which product outcomes meet or exceed expectations.

Woodruff et. al (1983) The authors propose to modify the basic confirmation/disconfirmation paradigm in two ways. First, expectations are replaced with experience-based norms as the standard for comparison of a brand's performance Second, a zone of indifference is postulated as a mediator between confirmation/disconfirmation ad satisfaction. Implication for future research also presented.

Bearden and Teel (1983) Data obtained from 375 members of a consumer panel in a two-phase study of consumer exfjeriences with automobile repairs and services were used to examine the antecedents and consequences of consumer satisfaction. The results support previous findings that expectations and disconfirmatian are plausible determinants of satisfaction, and suggest that complaint activity may be included in satisfaction/ dissatisfaction research as suggested by earlier descriptions of consumer complaining behavior.

Ram and Shile Jung (1990) This paper reports on an empirical investigation of the effect of product usage on consumers satisfaction in the context of consumer durables. It conceptualizes three dimensions of usage - usage frequency, usage function and usage situation- and examines the impact of these usage dimensions on satisfaction. Results of a field survey using five consumer durables suggest that the usage dimensions influence satisfaction through corresponding dimensions of usage disconfirmation, independent of the effect of performance disconfirmation satisfaction. The specific dimensions of usage disconfirmation which influence satisfaction vary by product.

Yi (1993) This study has investigated the moderating role of ambiguity in the process of consumer satisfaction formation. It is found that product ambiguity moderates the way that expectation, performance, and disconfirmation determine consumer satisfaction. When the product is ambiguous, consumer expectations have direct effects on consumer satisfaction as well as indirect effects through disconfirmation. On the other hand, when the product is unambiguous or easy to evaluate, product performance has direct effects on consumer satisfaction as well as indirect effects via disconfirmation. The theoretical and practical implications of these findings are discussed as well.

Anderson et. Al (1994) The study is about customer satisfaction, market share and profitability. Its main objective is to investigate how expectations, quality, and price affect customer satisfaction and why customer satisfaction, in turn, affects profitability. The authors used a system of equations to test out multiple hypothesis. The findings showed a preliminary indication of trade-offs between customer satisfaction and market share goals. They found out that customer satisfaction might fall as market share increases.

Gupta and Stewart (1996) Consumers use multiple strands to evaluate their satisfaction with a product and to establish post purchase behavioural intention. However, prior empirical research has focused on which individual standard best predicts satisfaction. In contrast,this article develops and tests a model of consumer satisfaction and post purchase behavioral intentionin which consumers simultaneously use multiple standards perceptions of performance ,brand expectations, and category expectations. The results of an experiment for a simulate ad service encounter provide support for the proposition that consumers use multiple standards and that these standards have differential effects on such post purchase outcomes as satisfaction, repurchase intention, an d willingness to recommend. Brand expectations are shown to be better predictors of affective outcomes (such as satisfaction), while category expectations are shown to be better predictors of behavioral outcomes (repurchase and recommendation). Consistent with prior research, perceived performance is shown to have a strong effect on both satisfaction and behavioural intention.

Anderson et. al (2001) The objective of this paper was to investigate whether there is concrete relation between customer satisfaction and productivity and what are the conditions under which there are tradeoffs between customer satisfaction and productivity. Also to investigate the extent to

which such tradeoffs are present, if present at all. It was found tradeoffs exist where increasing productivity might lead to lower levels of satisfaction however the correlation was much higher for services than for products.

Pauwels et. al (2004) The study is about understanding the short- and long-term impact of marketing actions, such as, new products, sales production and firm value on financial metrics, including topline, bottom-line, and stock market performance. The authors use vector-autoregressive odel to test out a ious h pothesis. The esults e e that e o d the i pa t of the fi s earnings and the general investment climate, product introductions have positive and increasing effects on firm value. In contrast, sales promotions diminish long-term firm value, even though they have positive effects on revenues and (in the short run) on profits.

Gountas and Gountas (2006) This paper explores how personality orientations and emotions influence consumer's service perceptions in the airline industry. Research area in consumer behaviour is limited to understanding of consumer's emotional experiences during their interactions with service providers. Little research investigates the relationships between personality differences, emotional states, and individual consumer behaviour. It investigates the effects of personality differences and emotional contagion of sales personnel in a service setting and suggests that both need consideration because they influence service performance outcomes.This study examines the relationships between tourism consumers' emotions, personality orientations and service satisfaction. The research findings suggest a direct relationship between the consumers' personality orientation, emotional characteristics and self-reported satisfaction of the service experience.

Waligóra and Waligóra (2007) A new method of customer satisfaction and loyalty measurement was developed for the purpose of the study; the method is called Brand Satisfaction Model. The study also aimed to apply the theoretical model into the practical research. The research revealed that there are significant differences in how satisfaction and loyalty of customers are created; it also outlined different factors that should be taken into account when implementing loyalty improvement programs.

Dillard and Bates (2010) The study was undertaken in order to understand whether dissatisfied customers or intending defectors could be regained as a result of efforts of consumer satisfaction and crisis management undertaken by the management and whether the timing of such measures was an important factor in the outcome. Findings indicated that such defectors could be regained with a 50% success rate, provided adequate solutions were provided to the problems faced by them.

Utpal M. Dholakia (2010) The study is about Understanding the Effects of Post-Service Experience Surveys on Delay and Acceleration of Customer Purchasing Behavior. The objective was to understand the effects of post-service experience surveys on delay and acceleration of customer purchasing behavior. The authors used data from a large US automotive maintenance service firm to test out various hypothesis. The sample took data from 5225 residents. The results indicated that the short- and longer-term influences of firm-sponsored post-service experience survey participation vary depending on the form of customer behavior examined. As a result, the effects of survey participation may be of, either consistent or contrasting valence, thereby yielding either favorable or unfavorable results to the firm. A laboratory experiment revealed that survey participation leads customers to make inferences of service completeness and enhances their recall of the specific service elements performed during the preventive maintenance visit.

Dr. Sharma et. Al (2011) The objective of this paper was to find the satisfaction amongst the customers, Market performance and Market position of TATA Motors. Primary Data and secondary data were used to formulate a regression coefficient to interpret the data. Tata Motor is one of the best cars manufacturing company in India, customers are satisfied because of affordable price, but the maintenance is a problem and resale value is very low. These are the two main reasons and other reasons are customer care does not respond to customers complaints, so the customers are dissatisfied. TATA Motors have to improve its customer care and decrease the price of their spare part and make available in all part of the country.

Jayasankaraprasad (2012) The purpose of this paper is to explore the antecedents of customer satisfaction and examine the consequences of customer satisfaction on customer behavioural outcomes. Shopper intercept survey technique was applied to collect the data from 580 actual shoppers from 35 supermarkets in twin cities of Hyderabad and Secunderabad in Andhra Pradesh. Results indicate that value for money, value for time, service quality, store reputation, and situational factors are the significant predictors (antecedents) of customer satisfaction in a typical food and grocery retail setting. Furthermore, results find that customer satisfaction significantly affects the store loyalty (behavioural and attitudinal), repurchase intention, positive word-of-mouth, price insensitivity, and complaint behaviour.

Nataraj S & Dr. N.Nagaraja (2012) The study is exploratory in nature and based on primary and secondary information. Aims at e eali g the o li e eha io of toda s auto o su e s a d atte pts to i estigate hat prominent factors maximize the online customer satisfaction. Found that online consumers o side the ost sig ifi a t fa to s fo e site satisfa tio of the Ca a ufa tu e s website on the basis of Quality of Content and Ease of Navigation.

Kaur and Soch (2012) The present study addresses both the conceptual and measurement issues related to customer loyalty amongst the cell phone users. Building on existing literature, the antecedents of customer loyalty are reassessed in a service setting namely, customer satisfaction, trust, commitment, corporate image, and switching costs. This paper reports the development and validation of scales for measuring customer loyalty and its antecedents. The scale development and validation process was divided into three phases. Phase 1 consisted of the item generation process, assessment of content validity, and initial purification of measures. Item analysis and exploratory factor analysis were used on data collected from 250 postgraduate business students of a major university in India for initial purification of the instrument. In Phase 2, additional data were collected from 855 cell phone users in northern India to assess the latent factor structure through confirmatory factor analysis. In Phase 3, the discriminant validity and convergent validity of the measures were established.

Şahin et. Al Brand experience, direct mail communication, trust and attitudes toward advertising are ajo a te ede ts of usto e s satisfa tio fo a a d a d satisfied usto e s a u more, accept higher prices and have a positive word-of-mouth effect. Also, we know that the cost of selling to new customers is much higher than selling to existing customers. In this context, the main aim of this paper is to investigate the relations among direct mail communications, brand experience, trust, and attitudes toward advertising, satisfaction and behavioral intentions. We work with Structural Equation Model (SEM) to analyses and explain the relationships between the variables in the model. The findings supported the proposed hypotheses, which are consistent with theoretical framework. All results are in line with the study expectations, with an exception that it refers to the relation between satisfaction and price p e iu . Ou stud suggests that to o i e high usto e s satisfa tio ates ith delivering positive brand experience, trust, and direct mail communication have a strategic opportunity to differentiate brand and reinforce customer behavioral intentions for a brand. Our study indicates that managers should know that overall evaluations of performance a d e pe ie e, ad e tisi g, di e t ail o u i atio a d t ust to p edi t usto e s behavioral intention battery through satisfaction. Research has investigated previously unexplored relations among brand experience, direct mail communications, trust, and attitudes toward advertising, satisfaction and behavioral intentions via SEM.

Usha and Dr. Nallabala (2014) The automobile sector is a key performer in the global and Indian economy. The automotive industry in India is one of the largest in the world and one of the fast growing globally. The stud o e s usto e s e pe tatio th ough Co o de oto s a d pe ei ed value by the customers through Concorde motors and the level of satisfactions of the customers. Concorde Motors (India) Limited, a 100% subsidiary of the company engaged in sales and service of Tata and FIAT passenger cars recorded a turnover of Rs.580.90 crores and profit after Tax of Rs.3.71 crores. Concorde Motors (India) Limited has declared a dividend of Rs.2.50 per share for the FY 2010-11 and Rs.7 per share for the FY 2010-11 on the 7% cumulative redeemable preference shares. The research study is carried out to know the Customer Satisfaction on FIAT cars. The Indian automotive market is one of the most competitive markets with low costs, which make it an attractive assembly base for foreign automotive manufacturers.

Javed et. Al (2015) The study is about customer satisfaction and service quality in four wheeler automobile industry. It deals with the review on customer satisfaction and its effect on automobile industry. Throughout the study, different variables have been studied such as Customer satisfaction, Service quality and Perceived service. The authors have used service quality model in order to indicate that the customer satisfaction is most important part of any industry. Therefore, it is the main responsibility of service industries to improve customer satisfaction and quality of service which is beneficial to enhance the no. of new customers.

Research Problem: To study Customer Satisfaction in the Automobile Industry. Key Variables: Customer Satisfaction, Effect of product functions and performance, Effect of purchase experience, Effect of After sales services

Research Objectives: Following are the objectives of this research study:

• To identify how the reasons which are influencing customer satisfaction. (Reasons: Features, Performance, Maintenance Cost, Mileage, Aesthetics).

• To study how much the purchase experience affects consumer satisfaction. • To study how after sales service affects consumer satisfaction • To study the relation between satisfaction and loyalty.

Research Methodology The research methodology, while conducting this stu...