JOURNAL OF COMMERCE AND MANAGEMENT RESEARCH -ISSN-2249-0442

Volume-4
Issue-2
December-2014

BUYER BEHAVIOUR TOWARDS THE DEALER SELECTION FOR PASSENGER

CAR PURCHASE IN MALAPPURAM DISTRICT
K.P NAJEEMUDEEN
Research Scholar - Ph.D, Karpagam University
Dr. N. PANCHANATHAM
Research Supervisor, Karpagam University
Professor, Department of Business Administration, Annamalai University
Abstract
Every consumer is highly unique and a complex human, yet there are many things
consumers have in common when it comes to buying. Many factors are involved in their
buying decisions, any one or more can become their deciding factor. The post globalization
era has witnessed the footprints of global automobile giants marching towards India to tap
Indias highly potential passenger car market. As a result customers are flooded with a wide
variety of options to choose from. Dealers are the middle men between a car manufacturer
and its customers. Dealer thus becomes the most important link in joining the company to its
customers as he is the person who will sell the product, will deliver it and will keep on
providing the after sales services to the customers as and when required. So, it becomes
necessary to study dealer as a part of customers satisfaction journey with the product called
car. The objective of this paper is to investigate those differentiating parameters that
determine the customers selection of a dealer for the purchase of passenger cars and the
other factors that influence the screening and selection of the dealer. The primary data was
collected from 97 respondents, located in Tirur taluk using convenience sampling. The results
revealed the strong influence of attributes like previous relationship or rapport with the
dealer, ready availability of vehicle and the influence of reference group.
KEYWORDS
Consumer Behaviour, Buyer, Automobile, Passenger Cars, Dealer, India, Kerala, Tirur.
INTRODUCTION
The twentieth century has borne witness to remarkable changes in the marketplace caused by
sharp changes in the lifestyle patterns of the past and present day consumers due to
globalization. Time tested marketing concepts are being turned down as they fail to measure
the behaviour of new generation customers. Their behaviour is characterized by the
distinctiveness of individual expectations, preference for multiple options, tendency to
abandon Brand loyalty and switch to competitor brands that provide higher perceived value.
The new generation consumers are difficult to classify by conventional demographic factors
and unless their thought process and buying behaviour preferences are fully understood,
decisions on product designs, product variants, branding and distribution channels are likely
to be mislaid.
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There cannot be a second opinion on the fact that the automobile vehicles have become the
unavoidable part of our life. Life without vehicle is just beyond imagination these days. It is
not only an indicator of national economy; but an individuals progress graph can be
measured on the grounds of the automobile vehicles used by him for day to day work and
also for pleasures and treasures of happiness, prestige and style as well.
Investment in a Car is the costliest investment made in a life time only next to construction of
a house, for any human being. Unlike other consumable durables, the decision to buy specific
brand of Car is shaped over a long period of time. It is a common knowledge that all of us are
attracted towards cars right from childhood and we have developed our own perceptions for
cars. When we acquire the capacity to buy cars, our experience of buying, involves both
emotional and rational aspects which lead to a purchase decision. The period between
recognition of need to buy a car and the actual purchase may run into many weeks or even
months.
Dealers are the middle men between a car manufacturer and its customers. Dealer thus
becomes the most important link in joining the company to its customers as he is the person
who will sell the product, will deliver it and will keep on providing the after sales services to
the customers as and when required. So, it becomes necessary to study dealer as a part of
customers satisfaction journey with the product called car (Nikhil Monga, Dr. Bhuvnender
Chaudhary & Saurabh Tripathi - 2012)
There is obviously a strong link between customer satisfaction and customer retention.
Satisfaction of the consumer, after the sales, is important for repeat purchase. It is more
profitable to retain existing customers, rather than looking for new ones. Satisfied customers
will someday become loyal customers, in other words there is a positive correlation between
customer satisfaction scores and customer buying behaviour. If a customer rates the car very
high in satisfying his or her needs, the car manufacturer should expect more referrals. This
study is intended to analyse the factors which are considered by the customers to be
important while selecting a car dealer for their purchase and the factors influencing the
selection on the basis of a descriptive study conducted in Tirur taluk of Malappuram district
in Kerala.
STATEMENT OF THE PROBLEM
The post globalization boom in the automobile sector of India has paved way for stiff
competition among the variety of car manufacturer who are in a race to capture a major
chunk of the Indian passenger car market. This competition not only exists between
manufacturers, but among the car dealers too. We can even witness the existence of different
dealers of the same brand of cars in a single market, fighting among themselves to gain more
sales. This facilitated the customer with a wide variety of options from which he can choose
his dream vehicle. The OEMs are even encouraging this fights to derive maximum sales and
gain the market share by creating a Survival of the fittest scenario. Now it has become
imperative for the car dealers to do what all is necessary to attract customers to their
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showroom with better public relations, customer care and after-sales service for winning their
pie in the market. This study intends to analyse the factors that influence the customer choice
for passenger car dealers with special reference to Tirur, which is a main growing market for
passenger cars.
REVIEW OF LITERATURE
According to Nikhil Monga, Dr. Bhuvnender Chaudhary & Saurabh Tripathi (2012)
Dealers are the middle men between a car manufacturer and its customers. Dealer thus
becomes the most important link in joining the company to its customers as he is the person
who will sell the product, will deliver it and will keep on providing the after sales services to
the customers as and when required. So, it becomes necessary to study dealer as a part of
customers satisfaction journey with the product called car. They also states that the dealer
related parameters of customer satisfaction are Distance (Proximity), Advertisements
(Promotions), Technical Facilities, Cost of Service, Availability of Spares, Information
Provided, Service Time, Charges, Staff, Car Handling (Delivery & service), Assured
Customer Transactions, Ambience of Service Center and Finance (Credit) Schemes.
Dr. S. Subadra, Dr. K.M Murugesan and Dr. R. Ganapathi (2010) identified that
availability of spare parts and service facilities are serious matters of concern in the purchase
decision of passenger cars.
Ajay Tekchandani (2013) pointed out that there is a positive correlation between customer
satisfaction and market share. Also, after sale service is the prime factor for boosting the level
of customer satisfaction, particularly in passenger car industry.
Clement Sudhakar and Venkatapathy (2009) examined the power of peer group in buying
Automobile with reference to Coimbatore District. It was also found that the influence of
friends is higher for the purchase of small sized and midsized cars.
White (2004), discussed the factors those plays a vital role in choice of car buyers and
observed that consumer negotiate with dealers over price and pursue them to every extent to
avail incentives as well as low-interest payment plans. He concluded that with an increasing
trend of multi-car households, car dealers and advertisers should target the right audience,
taking into consideration the power of children and the impact of life stage. Even after the
fact that women are the primary buyers of most new cars, study concluded, the motor trade
has traditionally been contemptuous of women's role in the car-buying process.
Vikram Shende (2014) Car dealers and manufacturers show very good hospitality to
customers during their visits to the place of showroom before and immediately after their
purchase. But after some time they face a problem with their dealers regarding after sales
service. Therefore, it is suggested that the services rendered r to be rendered should be
properly explained, friendly approach and reliability in service to be further improved. Cost
of spare parts to be charged reasonably.

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Cars had a greater probability of selling if the seller had a better reputation, according to
Thomas Andrews (2007).
OBJECTIVES OF THE STUDY
The purpose of this research is to study the behaviour of consumers, perception of product
attributes and level of satisfaction with respect to passenger cars. The following are the
objectives:
To analyze the socio-economic profile of the sample respondents.
To identify and analyze the factors influencing customers decision to buy the car
from a particular dealer.
To evaluate the parameters on which the customers rate the dealers before finalizing
the one from whom they purchase.
To make suggestions in the light of the findings of the study.
SCOPE OF THE STUDY
Tirur is a municipal town in Malappuram district in the Indian state of Kerala, spread over
an area of 16.55 square kilometers (6.39 sq mi). It is one of the business centers of
Malappuram district and is situated 26 kilometers west of Malappuram and 41 kilometers
south of Kozhikode. Tirur is also a major regional trading centre for fish and betel leaf and
has an average elevation of 2 meters (6 ft 7 in). As of 2011 India census, Tirur had a
population of 58,490 of which 48% are male and 52% female. Tirur has an average literacy
rate of 80%, higher than the national average of 59.5%. The male literacy is 81% and female
literacy is 78%. In Tirur, 14% of the population is under six years of age.
Being the biggest business centre and NRI belt in Malappuram district, Tirur is one among
the economically richest town in Malabar region. Due to their increasing purchasing power,
the people of this district have started to buy cars for various purposes like personal use,
professional use and even as a symbol of social status. Tirur is a potential market for all the
products and services, because people of various religions, languages, cultural backgrounds
and demographic cum socio economic characteristics live in this area.
LIMITATIONS OF THE STUDY
The time available at disposal of the research was limited for an independent study.
Respondents lack of time to give information and casual attitudes.
The study was limited to Tirur town only.
This study didn't study the psychographics of the consumers.
RESEARCH METHODOLOGY
A sample of 250 consumers was selected for the present study around Tirur town which is in
Malappuram district of Kerala. As the universe of the study is large, the researchers have
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decided to select sample respondents by adopting the Simple Random Sampling Technique.
A structured questionnaire was designed and administered among the respondents to give a
fair representation to various attributes of the consumers. A total of 250 Interview schedules
were prepared and out of this, only 220 interview schedules were filled up and collected. A
scrutiny of these schedules led to the rejection of 19 interview schedules on account of
incomplete responses. Thus 201 completed interview schedules were used for the present
study. The secondary data has been collected from various published articles, journals,
magazines and also through the internet. For the purpose of evaluation, the percentages and
weighted score test have been used for meaningful analysis and clear presentation.
DEMOGRAPHIC CHARACTERISTICS OF THE RESPONDENTS
Features
Age

Sex

Occupation

Monthly Income

Education
Qualification

Marital Status

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Parameters
16-25
26-35
36-45
Above 45
Male
Female
Government Staff
Businessmen
Professional
Private Job
NRI
Student
Agriculture
Daily Wage
Retired/Unemployed
upto 10,000
10001-20000
20001-30000
30001-40000
Above 40000
No Income
upto Matric level
Intermediate
Graduate
Post Graduate
Professional
Courses
Married
Single

No. of Respondents
36
84
51
30
197
4
11
68
30
16
32
11
5
20
8
54
74
38
9
11
15
94
39
40
9

Percentage
17.91
41.79
25.37
14.93
98.01
1.99
5.47
33.83
14.93
7.96
15.92
5.47
2.49
9.95
3.98
26.87
36.82
18.91
4.48
5.47
7.46
46.77
19.4
19.9
4.48

19
152
49

9.45
75.62
24.38

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DATA ANALYSIS & INTERPRETATION

Table 1: Factors considered for the selection of the dealer.
Reasons
No. of Responses Percentage
Better After sale Service Facilities
24
11.94
Relationship with Dealer/Salesman
65
32.34
Emergency Road Service Assistance
15
7.46
Offers & Discounts
6
2.99
Ready Availability of the Car
22
10.95
Attraction of the Showroom
8
3.98
Proximity of the Showroom
10
4.98
Availability of Spare Parts
17
8.46
Low Maintenance cost
16
7.96
High Exchange Value for Old Vehicle
18
8.96
Total
201
100

Rank
2
1
7
10
3
9
8
5
6
4

As per the above table, about 32 percent of the respondents have stated that they have
purchased their car from the dealer whom they know before and have a good relationship.
About 12 percent of the respondents have chosen to purchase their car from the dealer having
better after-sale service facilities while 11 percent of respondents have bought their car from
the dealer with whom their preferred model/colour was available at that particular point of
time. 9 percent of the respondents replied that their dealer selection was influenced by the
exchange value offered by the dealer for their old car whereas, 8 percent of the respondents
made their dealer selection based on the availability of spare parts with the dealer and 7.5
percent preferred the dealer with the lowest maintenance cost. This implies that dealers
relationship/rapport with the customers is the prime factor which influences the customers
decision about from whom to buy. Other major influencing factors are the after-sale service
facilities, ready availability of car models/colours liked by the customers on demand, high
value for exchange vehicle, availability of spare parts and low maintenance cost.
This can be better illustrated in a graphical representation as below.

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8%

9%

9%

8%
32%
8% 4%

11%
3%

Better After sale Service Facilties

Emergency Road Service Assisitance
Ready Availability of the Car
Proximity of the Showroom
Low Maintenenance cost

8%

Relationship with Dealer/Salesman

Offers & Discounts
Attraction of the Showroom
Availability of Spare Parts
High Exchange Value for Old Vehicle

Table 2: Factors influenced the selection of the dealer from whom the existing car has
been bought.
Factors

No. of Responses Percentage

30
14.93
18
8.96

Advertisements
Media / Online Reviews
Reference from Friends, Relatives &
Colleagues
Own Experience
Public Opinion (Word of Mouth)
Salesmanship
Road show, Demo, Display etc.
Customer Meet
Total

40
24
64
10
9
6
201

19.9
11.94
31.84
4.98
4.48
2.99
100

Rank
3
5
2
4
1
6
7
8

About 32 percent of the respondents have stated that they had purchased their existing car
from the dealer who had the maximum public opinion in his favour. 20 percent of the
respondents purchased from the dealer referred by their friends, colleagues and relatives.
About 15 percent of the respondents had stated to be chosen their dealer based on the
advertisements whereas 12 percent of the respondents came to a decision on the basis of their
own precious experience. From this we can infer that favourable public opinion (Word of
Mouth), referrals from friends/relatives/colleagues, advertisements and customers own
experience in the past with the dealer are the major factors that influence the decision of the
customer to purchase from a particular dealer.

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This can be graphically represented as below.

5%

4%

3%

15%
9%

32%
20%
12%

Advertisements
Media / Online Reviews
Reference from Friends, Relatives & Colleagues
Own Experience

FINDINGS & SUGGESTIONS

The major findings from this study are:
1. Customers have a penchant for buying from the dealers with whom they have a good
relationship in the past. Hence the dealers should build a healthy relationship and
rapport with their existing customers as well as prospective customers to ensure sales
from new customers and encourage the repurchase and referrals from the existing
customers.
2. The other things that customers give weightage while selecting a dealer are the aftersales service facilities available with the dealer, ready availability of the desired
colours and models of cars on demand, high exchange value for their old cars and
availability of spare parts. Hence the dealer should improve their after-sale service
facilities, maintain enough stock of different models and colours of cars, enhance their
exchange facilities and keep adequate stock of spare parts to attract more customers
and boost up the sales.
3. Only a very few customers have opined that they will opt to buy from a dealer who
gives maximum offers and discounts to them. This breaks the misconception that the
customers are more inclined towards the dealer providing huge discounts and offers.
If they have a good relationship with the dealer and the dealer also is well equipped
with proper service facilities, vehicle plus spare parts stock and exchange facilities,
the customers will surely buy from him even though he doesnt gives them any
discounts or offers.

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4. Word of mouth is an important factor that determines the customers selection of the
dealership for buying their dream vehicle. Also the reference given by the friends,
relatives and colleagues to the customer have an impact on his purchase decision.
Hence dealers should ensure they have a favourable public opinion in the market and
the existing customers are ready to refer them to their friends, colleagues and
relatives for their car purchase. This can be ensured by providing proper service and
satisfaction to the existing customers.
5. Customers own experiences with the dealer in the past also have an impact on the
selection of the dealer. If the customer is pleased with the service and hospitality
offered by the dealer during his previous encounters he will surely make his next
purchase also from the same dealer. He will also give some favourable word of mouth
about the dealer to his friends, colleagues and relatives and will be ready to refer the
dealer to them when they are about to purchase a car. On the other hand, if he had any
bitter experience from the dealer, he will surely stay away from the dealer in future
and will also give some negative word of mouth and try to prevent others from going
to that particular dealer, citing his own experience. Hence the dealers should provide
maximum satisfaction to their customers to create goodwill in the market and avoid
any negative publicity.
CONCLUSIONS
Dealers are the connecting link between the parent company and the buyer. He speaks, acts
and sells on behalf of the manufacturer. His operations and dealings have a great impact on
the image and goodwill of the parent company. If he satisfies the customer he will gain from
more sales and will boost the image of the company. If he loses customer confidence it will
affect his sale along with tarnishing the company image. Hence it is his duty to protect the
public image of the company by ensuring maximum satisfaction and better service to the
customers. In this age of social media and satellite communication there are higher chances
for customer feedback, both positive and negative, to be transmitted quickly and extensively
thereby impacting the sales. Negative feedbacks spread more quickly than positive acclaims.
Hence the car dealers should work devotedly to ensure customer satisfaction with a motive of
gaining goodwill in the market and also to provide an impetus to their sale.

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