Prepared by

N.T.K Kalinga
0000015696
Integrated Research Project
Sri Lanka Institute of Marketing
Research problem & Scope
The world is changing dramatically and consumer needs and
wants are changing in very single minute. Therefore there are
bundle of opportunities for business to take competitive
advantage in the world. Those businesses can be either
product or service.

Vehicle industry is one of the main industries in the world.

Now a days vehicle became an essential need of the people.
Consumers are willing to buy different kind of vehicles such
as cars, bikes, vans for their consumption. In modern world
consumers tend buy environment friendly cars such as
hybrid cars for their consumption with various reasons

Consumer behavior in automobile industry is differing from

country to country as well as person to person
 Consumer behavior defined as the behavior that consumers
display in searching for, purchasing, evaluating and
disposing of product or service that they expect will satisfy
their needs.

Consumers are unique.

Consumer behavior includes what they buy, why they buy,

when they buy, how often they buy etc.

Hence the consumer decision making process will directly

effect for consumer behavior as well.
The Automobile Industry

The worlds automobile industry begun in the 1890s

With the technological Revolution it has developed with

many innovative technologies and extra features.

As a result of new technologies the companies were able to

introduce hybrid vehicles to the market.

Hybrid electric vehicles are alternatives to conventional,

internal combustion engine automobiles that achieve higher
fuel economy by combining a conventional engine with a
rechargeable battery.
 The TOYOTA has introduced hybrid cars to the market in
1997 and then followed by HONDA in 1999.

Consumers are buying increasing numbers of

environmentally friendly cars. Because the increased fuel
economy of hybrids is alternative because of concerns
about both climate change and energy security.

Increasingly, many of these environmentally conscious

consumers choose to purchase petrol-electric hybrid
vehicles.
 In this category of greener-cars, Toyotas Prius model is
reported to be the market leader. In 2009-10, it was the
best-selling car in Japan, an important leading market for
automobile trends (Mick 2010).

World consumers tend to buy this hybrid vehicle due to

various reasons. Some people buy hybrid cars as a green
product, some are an economical product and some are for
show off or for trend.
Sri Lankan Hybrid Market

The Sri Lankan Hybrid vehicle market has been growing

rapidly.
The global brands such as TOYOTA, HONDA, and
NISSAN have represented in current hybrid market in Sri
Lanka.
The first two hybrid models available to Sri Lankan
consumers were the TOYOTA Prius and the HONDA
Insight.
However TOYOTA is the market leader in hybrid vehicle
market in Sri Lanka.

The hybrid vehicle registrations are increasing rapidly in

day by day
Research questions & Objectives
What are the Factors Affecting on Purchase Decision
of Hybrid Vehicles in Sri Lanka?

o The objectives of the study are formulated as follows based on the broader
research question state above

To identify the factors affecting on purchase decision of

Hybrid Vehicles in Sri Lanka.

To find out whether Sri Lankans buy hybrid cars due to

Economical Factor or else Environmental factor
 Sri Lankan Hybrid Market
The Sri Lankan Hybrid vehicle market has been growing
rapidly.
The global brands such as TOYOTA, HONDA, Mercedes,
BMW and NISSAN have represented in current hybrid
market in Sri Lanka.
The first two hybrid models available to Sri Lankan
consumers were the TOYOTA Prius and the HONDA Insight.
However TOYOTA is the market leader in hybrid vehicle
market in Sri Lanka. Sri Lankan consumers are buying these
products for various reasons.
Therefore the hybrid vehicle registrations are increasing
rapidly in day by day..
Importance
Literature Review
Consumer behavior focuses on how individuals make decisions to spend
their available resources (time, money, effort) on consumption-related
items" (Schiffman and Kanuk 2000). Solomon, in 1995 also stated that
Consumer behavior is the study of the processes involved when
individuals or groups select, purchase, use, or dispose of products,
services, ideas, or experiences to satisfy needs and desires

Consumers enter into the process of actively evaluating automobiles

for purchase when they experience a strong desire or need for a car
(Dholakia 2001; Frey & Jegen 2001; Villacorta, Koestner & Lekes
2003)
The increased fuel economy of hybrids is attractive because of
concerns about both climate change and energy security. (Heutel,
Garth, and Muehlegger.E, 2010).
)
 Demographic factors.
There is an attractive impact of gender on purchase intention. There
are several issues on the basis of gender differences about their
purchase intention like association among gender and time
(McDonald, 1994; Arndt, 1977), and impact of gender on unplanned
purchase intention (Granbois, 1968; Kollat, 1967).

Age is another important demographic factor. Old shoppers are more

loyal and there is high store loyalty among the people of 25-44 age
groups (East, 1995). In the meantime Steaughan stated in 2001, this
may be to a certain extent because elders are lesser engage in
purchasing activities than other income group and normally they are
willing lesser to accept new changes and ambiguity .
In a more comprehensive model of consumer information search for
automobiles, Ratchford, Talukdar, & Lee (2001) found the demographic
variables of age, education and income to be statistically significant
determinants of consumer search strategies.
 Social Factors

a good occupation generate good income and by having good

income level a household can get better education (Solomon,
1999) which ultimately have the impact on their purchase
intention .
Social influence can affect an individuals choices (Ajzen
1991). These constructs were car buyers attitudes on
environmentalism (Jansson, Marell & Nordlund 2009), in-
and extrinsic motivation to consume green products and
social influence (Kahle 1995),
 Economic factors
Haddad et al. (2011) finds out the economic factor which is
consisted of five variables, such as income, interest rate,
area, conversion and taxes. Moreover, Adair et al.(1996,
p.24) and Daly et al. (2003, p.306) group interest rate,
maximum
Environmental Factors - Consumer demand for green
products is growing, and the automobile industry is no
exception. There is growing awareness of fuel-efficient and
alternative fuel vehicles, and consumer research indicates a
growing interest in purchasing more fuel efficient and low
emissions greener vehicles.
Some Prius drivers may derive benefits from the green
image associated with hybrid vehicles. (Chu & Sadeque.s
2007).
Conceptual Framework

Independent Variables Dependent Variable

Demographic Factors Purchase Decision

Social Factors
of Hybrid vehicles

Economic Factors
Environmental Factors
 Operationalisation
Construct Dimension Indicators Measurement Questionnaire
Demographic factors Age Numbers/Likert For each dimension
Gender
Scale
Education level
Identifying the Monthly Income
factors affecting
in purchase
decision of Social Factors Primary groups, Numbers/Likert For each dimension
Hybrid vehicles. Social Recognition, Scale
Adaptation to new
technology

Economic Factors Fuel cost, Numbers/Likert

For each dimension
Taxes, Scale
Interest Rates

Environmental Factors Environment pollution, Numbers/Likert For each dimension

Scale
Attitude towards
 Method of Study
Contents of the approach Explanation

Sample frame
Hybrid Car Owners in Kandy District

Sampling Simple random sampling- Fixed interval

random sampling method 100 to be selected
with a fixed interval of 5.
Sample size 100

Data collection approach Survey

Survey instrument Questionnaire

Contact method In person (Delivery and collection

questionnaire)

Data analysis technique Descriptive statistics & Regression Analysis

Data analysis tool MS Excel

 Key Findings
Economic Factors Environmental Social Factors
Factors

Average of factor 4.64666 4.6 4.141741

affecting on purchase
decision

Standard deviation 0.297258848 0.294133 0.233837

Importance 1 2 2

The averages of the factors affecting purchase decision variables were

prioritized in the descending order to find out the most significant factor
which has higher influence than others.

Economic factors are the most important variable has an average mean
value of 4.646 regarding the purchase decision of hybrid vehicles.
 purchase decision the environment factors were ranked as
the second most important element which has an average
mean value of 4.60.

the social factors have the third highest mean value of 4.14.

By above analysis researcher has identified that economic

factors are the most significant variable which has highest
factors affecting purchase decision on hybrid vehicles.
 Variable Coefficient Value P Value

Economic Factor 0.0205199 0.07583

Environmental Factor -0.0027457 0.09804

Social Factor -0.0169233 0.02468

With reference to the Regression Analysis its clearly

indicated that regarding purchase decision most significant
factor is economic with an value of +0.0205. For a
particular Hybrid car purchase economic factors will be the
most impact factor
Recommendations
The Government can educate the people to importance of
Hybrid Cars.

Using Hybrid cars will be one major solution for fuel

consumption because as of now government paying a lot of
money for oil imports.
People who are directly engaging in environmental protection
activities can promote Hybrid vehicles as a solution to decrease
the environment pollution.

Especially who are engaging in vehicle business can promote

Hybrid Vehicles rather than Normal vehicles.
Thank You