Customer segmentation of Hyundai i20 and measurement of customer satisfaction level free essay sample

ACKNOWLEDGEMENT Exchange of ideas generates a new object to work in a better way. Whenever a person is helped and co-operated by other, his heart is bound to pay gratitude and obligation to them. An endeavour is difficult even to initiate without the help of many souls who are always there by the grace of god. I am honoured to be attached with prestigious organization. I extend my sincere gratitude to the management of â€Å"JSV HYUNDAI† for giving me an opportunity to work with them and assisting me in my project whenever required. Though the language is a poor substitute for the sentiments, yet there is no way out to recover to it for expressing my profound gratitude, indebtedness and sincere regards to Ideal Institute of Management Technology for giving me this platform from where I could pursue this internship. I am immensely grateful to Mr. Amit Kumar Srivastava sales manager JSV Hyundai for his constant support and suggestion during the period of my training. We will write a custom essay sample on Customer segmentation of Hyundai i20 and measurement of customer satisfaction level or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Ishan Chandra A7006409011 BBA Vth Semester TABLE OF CONTENTS Chapter No. Topic 1. Introduction 1. 1 Customer 1. 1. 1 Definition of customer 1. 2 Customer Profiling 1. 3 Customer satisfaction 1. 3. 1 The purpose of business 1. 3. 2 Definition of customer satisfaction 1. 3. 3 Measuring customer satisfaction 1. 3. 4 Importance of customer satisfaction 2. Problem Statement 2. 1 Scope of the project 2. 2 Objective of the project 2. 3 An Industry overview 2. 3. 1The four wheeler industry in India 2. 4 Company profile 2. 5 About the car 3. Research Methodology 3. 1 Research method 3. 2 Data source 3. 3 Target population Sampling plan 3. 4 Target areas 3. 5 Data processing 4. Results Discussions 4. 1Building of customer profile 4. 1. 1. Gender 4. 1. 2. Age 4. 1. 3. Family status 4. 1. 4. Educational qualification 4. 1. 5. Occupation 4. 1. 6. Monthly household income 4. 1. 7. Budget decision 4. 1. 8. Driving scenario 4. 2 Analysis of customer profile 4. 3 Other important information regarding the Verna customers 4. 3. 1 Purchase criteria 4. 3. 1. Source of information 4. 4Analysis of customer satisfaction 4. 5. 1 Audio system 4. 5. 2 Overall styling of the car 4. 5. 3 Additional features 4. 6 Exterior styling of the car 4. 7 Interior styling of the car 4. 8 Luggage space 4. 9 Performance of the car 4. 10 Overall performance of the car 4. 11 Safety features 4. 12 Pricing of the car 4. 13 Accessory package 4. 14 Strengths shortcomings of the car 4. 15Findings 4. 16Limitations 5. Recommendations conclusions 5. 1 Recommendations 5. 2 Conclusions 6. 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 cliches 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 â€Å"Customer†. 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 fulfilment. Managerially, fulfilment 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. 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. 1. 3. 3 Measuring customer satisfaction: There are several ways to gather input from customers. The easiest way to find out how customers feels 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 youll get a personal feel for each customer. The disadvantage is that youll 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: 1st. 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. Its 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. One’s own position in clients minds. 2nd. Focus Groups 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 others responses. 3rd. 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 companys product to others. This will help company in getting new customers. As a result companys 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 solving customers complaint. CHAPTER II: Problem Statement 2. 1 Scope Of The Project: i. A detailed study of the four wheeler industry in India, ii. A brief study about functioning of Hyundai Motors India ltd. (HMIL) iii. Understanding the customer profile for the new Hyundai Fluidic Verna, iv. Understanding and analyzing the level of satisfaction or dissatisfaction among the customers of the new Honda city the reasons for the same. 2. 2 Objectives Of The Project: i. To understand the detailed profile of the customers of the Hyundai i20. ii. To evaluate the level of satisfaction or dissatisfaction among the customers of the Hyundai i20 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. Indian four-wheeler Industry, ii. Hyundai and iii. Hyundai i20 2. 3 AN INDUSTRY OVERVIEW: 2. 3. 1 The four wheeler industry in India: Background 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 all-pervasive 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 1940s 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 Indias 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. 2. 4. 1(c) Market Share scenario in the car industry: (i) Passenger Cars segment: 2. 5 COMPANY PROFILE: Hyundai is a group of companies (or chaebol) founded in South Korea by one of the most famous businessmen in Korean history: Chung Ju-Yung. The first Hyundai Company was founded in 1947 as a construction company by Chung, after his previous efforts running a rice store and an auto-repair business had to be abandoned due to difficulties with the Japanese military government of Korea. Two of the best-known Hyundai divisions are Hyundai Motor Company, the worlds fourth largest automobile manufacturer by volume as of January 2011, and Hyundai Heavy Industries, the worlds largest shipbuilder. Other companies currently or formerly controlled by members of Chungs extended family may be loosely referred to as a part of the Hyundai chaebol. Hyundai in India Hyundai Motor India Limited (HMIL) is a wholly owned subsidiary of Hyundai Motor Company (HMC), South Korea and is the largest passenger car exporter and the second largest car manufacturer in India. HMIL presently markets 7 models of passenger cars across segments. The A2 segment includes the Santro, i10 and the i20, the A3 segment includes the Accent and the Verna, the A5 segment includes the Sonata Transform and the SUV segment includes the Santa Fe. 2. 6 About the Car: 2. 6. 1 The Hyundai i20 The Hyundai i20 is a super-mini/subcompact car, made its debut at the Paris Motor Show in October 2008 and went on the sale in December 2008 in India to fit between the i10 and i30. It is a front-wheel drive car, and is available in three and five door versions. The i20 replaces the Getz in most markets but in the UK and India, the Getz will still be available for the time being. The i20 is assembled in Turkey (Izmit plant) for the European market and in Sriperumbudur (near Chennai), India for sale in Asia and Oceania CHAPTER III: Research Methodology 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. 3. 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. 3. 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. 3. 3 Target population Sampling plan: The target population consisted of all the existing customers of the Hyundai i20 and the research area was Lucknow. 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. 3. 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 (JSV Hyundai), ii) Petrol pumps, iii) Shopping malls, (which included the West End mall Fun republic mall). 3. 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. CHAPTER IV: Results Discussions 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. 4. 1 BUILDING OF CUSTOMER PROFILE: 4. 1. 1 GENDER: Table 1. 1 Frequency Percentage Male 175 87. 50% Female 25 12. 50% Total 200 100% Fig. 1. 1 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. 4. 1. 2 AGE: 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. Hyundai Motors India 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 Hyundai i20 has ended up costing much more than what was planned at the time of its launch in India. 4. 1. 3 FAMILY STATUS: 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. 4. 1. 4EDUCATIONAL QUALIFICATION: Table 1. 4 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. 4. 1. 5OCCUPATION: Table 1. 5 Frequency Percentage Business 139 69. 50% Service 38 19% Self-Employed 19 9. 50% Students 4 2% Total 200 100 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 Hyundai Fluidic Verna 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) 4. 1. 6Monthly Household Income: Table 1. 6 Fig. 1. 6 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 Express) this car (costing more than Rs. 6. 0 lacs) seems to cater an extremely small segment of customers. 4. 1. 7 BUDGET DECISION: Table 1. 7(a) Frequency Percent Valid Percent Cumulative Percent Pre decided 154 77. 0 77. 0 77. 0 Not decided 46 23. 0 23. 0 100. 0 Total 200 100. 0 100. 0 Table 1. 7(b) Amount Frequency Percentage 6,00,00 to 8,00,000 12 7. 8% 8,00,001 to 10,00,000 76 49. 3% 10,00,001 to 12,00,000 66 42. 9% Total 154 100% Table 1. 7(ab) and Fig. 1. 7 (ab) 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. 4. 1. 8 DRIVING SCENARIO: 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 chauffeurs (drivers). 4. 2 ANALYSIS 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. 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. 6 lacs to 9 lacs. The customers usually drive their car on their own. 4. 2 Other important information regarding the customers: 4. 3. 1 PURCHASE CRITERIA: Key Factors Considered Before Buying A Car: 1. Brand Name: Section I. 1 2. Price Of The Car: Table 3. 1(b) Frequency Percent Valid Percent Cumulative Percent Yes 60 30. 0 30. 0 30. 0 No 140 70. 0 70. 0 100. 0 Total 200 100. 0 100. 0 3. Interior Styling: 4. Performance When the customers were asked that, what were the key factors that they considered while buying the car? i. 126 out of 200 respondents agreed that Brand Name was a key factor that was considered while buying the car. ii. 60 out of 200 respondents said that price of the car was an important while buying the car. iii. 52 out of all the respondents agreed that Exterior styling was an important criterion while buying the car. iv. 39 out of 200 respondents considered interior styling to be a key factor. v. 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. 4. 2. 1 Source of Information: 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. 4. 3 Analysis Customer Satisfaction: 4. 3. 1 Audio System: 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. 4. 3. 2 Overall Styling Features: Fig 5. 3 When the customers were asked to score the main features of their all new Hyundai i20 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. 4. 3. 3 Additional features: Table S. NO. Requested Feature Frequency Percentage Price willing to pay(in Rs. ) 1. CD/Cassette player 197 98. 5% Nil (Free of cost) 2. Alloy Wheels 191 95. 5% 12,000 to 15,000 3. Side Air Bags 132 66% 5,000 to 7,000 4. Rear Parking Sensors 96 48% 1,800 to 3,000 5. Navigation 82 41% 10,000 to 15,000 When the respondents were asked whether they would like some new features to be introduced as standard to their all new Hyundai i20 the price they were willing to pay for the same, the researcher found the above stated results. Although both the CD/Cassette player the Alloy wheels are available in the accessory packages provided by Hyundai, 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. Exterior Styling of the Car: 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. 4. 3. 4 Interior Styling: (a) Accessing from the Driver’s seat: Leg Head Room Audio (Performance Control) Air conditioner Score Frequency Percentage Cumulative percentage 2 5 2. 5% 2. 5% 3 74 37% 39. 5% 4 118 59% 98. 5% 5 3 1. 5% 100% Total 200 100% When the customers were asked to mark certain interior features of their all new Hyundai i20 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. Accessing from the rear seat: