to study consumer satisfaction towards ford cars in solapur city

BBA III(SEM VI) SOLAPUR UNIVERSITY,SOLAPUR

CHAPTER-I

INTRODUCTION

INTRODUCTION ABOUT THE STUDY

A market survey is a research technique used to gather consumer preferences and

purchase intent of a company's products and services within a geographical area. Market

surveys are extremely important because companies learn what their customers like and

dislike about their products and services. Primary research involves collecting original data

about the preferences, buying habits, opinions, and attitudes of current or prospective

customers. This data can be gathered in focus groups, surveys, and field tests. Secondary

research is based on existing data from reference books, magazines and newspapers, industry

publications, chambers of commerce, government agencies, or trade associations. It yields

information about industry sales trends and growth rates, demographic profiles, and regional

business statistics.

Customer satisfaction is a concept that more and more companies are putting at the

heart of their strategy, but for this to be successful, they’re needs to be clarity about what

customer satisfaction means and what needs to happen to drive improvement.

NEED FOR STUDY

Increasing competition, ever growing market, easy availability of the finances and

increasing population of young executives, with huge disposable incomes, over the past few

years has substantially increased the sales in the automobile industry. Also, the competition

among the dealers of the products has increased with each trying to maximize their customer

base. This makes it imperative for the dealers to provide the best of the services and exceed

the customer expectations to achieve customer delight and loyalty.

The study tries to understand the key service parameters and reflect upon the

dysfunctional areas, thus providing the dealer with an insight into the level of customer

satisfaction and changing trends of the customer expectations.

Prin.K.P.Mangalwedhekar Institute of Management ,Solapur


OBJECTIVE OF THE STUDY

To study and understand the key service parameters using Customer Satisfaction and

reflect upon the low performing areas:

To study about the customer satisfaction on the services provided by the dealers.

To study the opinion of the owners of cars regarding its features like mileage, price

etc.

To study the effect of advertisement on the customers to promote the product.

To study the customer satisfaction with usage of their cars.

To study the information resources that the customer using before purchasing the car.

SCOPE OF THE STUDY

The research measures the experiences of customers.

Defines and analyses the experiences based on key deliverables.

Gains insights into Customer expectations.



LIMITATIONS

The study is restricted in scope of owing to the following limitations:

Due to constraint of time only city of Solapur is selected and so it cannot claim to be a

comprehensive study of the population.

The sample size is restricted to 50 respondents.

RESEARCH METHODOLOGY

Preliminary stage of study- a pilot survey, personal interview of sales

consultants, potential customers and existing customer was conducted to arrive at key

deliverables which would ensure customer satisfaction. The research tool

(questionnaire) was designed by inducing the various queries, based on the key

deliverables, which would reflect the customer satisfaction.

The research was based on a study of a sample, sized 50, using simple random

sample selected from the existing database of Ford. The research included collection

of data from the primary sources using the research tool (questionnaire). Final stage

was to analyze, interpret and draw conclusions from the data collected.

Date Sources:

Primary Data:

The data is collected directly from each and every customer.

Pilot Survey

A pilot survey was conducted to understand the factors, which would positively

influence the customer. Personal Interviews were conducted for the sales team, potential



customers and the existing customers of Ford. The factors scoring high in the interviews

were considered to be the key deliverables.

Survey Research:

The research was done to learn about people’s preferences and satisfaction of the

Ford customer.

Research Tool:

Questionnaire

Interview through questionnaire method was employed for the research

purpose. The questionnaires were individually administered to each customer to ensure

minimum scope for faulty data entry and error of understanding. This method also gave

the interviewer the scope of entering into a dialogue and understanding the customer’s

perception better.

The questionnaire tried to capture the responses of the customers mainly on the

key deliverables, derived from the pilot survey conducted, and a few questions have been

included to gauge the level of satisfaction and to gain insight into customer expectations.

Unstructured interview

The interview complemented the primary research tool and helped deliver

into details of responses provided by the customers. This not only validated the responses

of the customers but also helped the interviewer understand the expectations of the

customers.



Sampling Unit: In this study the sampling unit used is the existing customer base of

Ford. Selection is made from the list of Customers during the last one year.

Sampling Size: Sample size was chosen to be 50.

Sampling Procedure: Simple Random Sampling.

In simple random sampling, each member of the target population has the

same chance of being selected for participation in the study. For a sample to truly be a

simple random sample we need to develop a list or sampling frame that includes almost

all of the population, then from this we randomly pull names from the sampling frame

using some kind of random method such as a random number table or a random number

generator. Finally, numbers are assigned to all members of the population and pull the

names of those members whose numbers are pulled from the table or generator.

The biggest advantage to a simple random sample is that we get a pretty good

unbiased sample fairly easily. The biggest downside is that we may not get all elements

of the population that are of interest.



CHAPTER-II

INDUSTRY PROFILE AND COMPANY PROFILE

INTRODUCTION ABOUT THE INDUSTRY

Automobile Industry History

In the year 1769, a French engineer by the name of Nicolas J. Cugnot invented the

first automobile to run on roads. This automobile, in fact, was a self-powered, three-wheeled,

military tractor that made the use of a steam engine. The range of the automobile, however,

was very brief and at the most, it could only run at a stretch for fifteen minutes. In addition,

these automobiles were not fit for the roads as the steam engines made them very heavy and

large, and required ample starting time.

The Automobile Industry came of age with Henry Ford in 1914 for the bulk production of

cars. This lead to the development of the industry and it first begun in the assembly lines of

his car factory. The several methods adopted by Ford, made the new invention (that is, the

car) popular amongst the rich as well as the masses.

According the History of Automobile Industry US, dominated the automobile

markets around the globe with no notable competitors. However, after the end of the Second

World War in 1945, the Automobile Industry of other technologically advanced nations

such as Japan and certain European nations gained momentum and within a very short

period, beginning in the early 1980s, the U.S Automobile Industry was flooded with foreign

automobile companies, especially those of Japan and Germany.

The current trends of the Global Automobile Industry reveal that in the developed

countries the Automobile Industries are stagnating as a result of the drooping car markets,

whereas the Automobile Industry in the developing nations, such as, India and Brazil, have

been consistently registering higher growth rates every passing year for their flourishing



domestic automobile markets.

The World Automobile Industry is turned to the developing markets.

With the developed markets almost saturated, the World Automobile Industry is

now focused on the developing markets of South America and Asia, and Eastern Europe with

special emphasis on BRIC (Brazil, Russia, India, and China).

As per the reports of the International Organization of Motor Vehicle Manufacturers or

OICA(the association of the companies involved in World Automobile Industry), for the

fiscal end in 2010, the automobile manufacturers in the U.S. have been overtaken by those in

Japan, in terms of the total volume of automobile units manufactured worldwide.

Measures to be adopted by global leaders of the World Automobile Industry.

Several significant economic measures are being considered by the major players of

the World Automobile Industry in order to make a smooth entry into the markets of the

developing countries, and to make a name for themselves. The effective measures include:

Reducing the selling prices of the automobiles manufactured in their factories

Improving the levels of after-sales services to keep customers satisfied

Opening manufacturing factories in the developing nations, to reduce effective costs

of production as well as saving shipping charges, and enhancing prompt delivery of

automobile units.

Automobile Industry Trends

In keeping with the Automobile Industry Trends, the leading automobile

manufacturers are turning to the Asian markets that appear set to grow immensely over the

next decade. The automobile markets in the U.S., Europe and the Japan have almost matured

as a result of saturation and appear set to decline through the next decade. In contrast, the



automobile markets spread over the entire Asian continent (with the exception of Japan), are

constantly increasing in size and will be the destination for most of the globally leading

automobile manufacturers.

The Automobile Industry Trends reveal that the emerging markets of the

developing nations of Asia especially China, and India are backed by their huge population

growth rate, to add to the growing national economy of these two nations.

The rapid growth of the national economy of the BRIC countries (including Brazil,

Russia, India, and China) has enabled a growing section of the population of these countries

to purchase automobiles. Global surveys conducted recently reveal that within the next ten

years, these emerging automobile markets will account for nearly a whopping 90 percent of

the global automobile sales growth. As a result of this, leading Automobile manufacturers of

the world are setting up factories in the emerging markets, in order to serve the potential

consumers better as well as reduce manufacturing and shipping costs. In addition, these

arrangements are enabling the leading global automobile manufacturers to compete with the

local automobile manufacturers, which were flourishing in the absence of quality

competition.

The Emerging Indian Automobile Market

The Indian Automobile Market is a promising industrial sector that is growing

immensely every passing year. The passenger cars are referred to, through the use of the

word "automobile." The whooping growth experienced by the Indian Automobile Market in

the last financial year itself that is the financial year end in February, 2011 was very close to

a 38 percent over the previous fiscal. This statistical fact is a glittering example of the

potential of the growing Automobile Industry in India.

As per the survey conducted by the Society of Indian Automobile Manufacturers,

the total number of automobiles manufactured by the Automobile Industry in India,

throughout the financial year 2010-11, was very close to the 35.5 lakh (3.5 million) margin.



The huge of number of automobiles manufactured by the Automobile Industry in India was

an enormous growth upon the number of automobiles manufactured during the previous

fiscal that ended in 2010.

The total number of cars that were exported from India was very close to the 5.0 lakh

(5.0 hundred thousand) margin, an encouraging sign for the Automobile Industry in India.

The export of cars manufactured in India comprised nearly 33 percent of the total number of

cars manufactured domestically by the Automobile Industry in India.

The India Automobile Market looks set to prosper, largely due to the growing market

for automobiles that is developing in India. In the financial year that ended in February,

2009, the Indian automobile markets were the fastest growing in the world, with the

registered growth rate touching nearly 20 percent. The Automobile Industry in India

mainly comprises of the small car section, which enjoys nearly a 2/3rd market share of the

entire market for automobiles in India. In this respect, the Indian markets are the largest in

the world for small cars, behind Japan.

The Indian passenger car market which ranks amongst the largest in the world, is

poised to become even larger and enter the top five passenger car markets in the world in the

next decade.

India Automobile Industry

Following India's growing openness, the arrival of new and existing models, easy availability

of finance at relatively low rate of interest and price discounts offered by the dealers and

manufacturers all have stirred the demand for vehicles and a strong growth of the Indian

automobile industry. The data obtained from ministry of commerce and industry,

shows high growth obtained since 2001- 02 in automobile production continuing in the first

three quarters of the 2004-05. Annual growth was 16.0 per cent in April-December, 2004;

the growth rate in 2003-04 was 15.1 per cent the automobile industry grew at a compound

annual growth rate (CAGR) of 22 per cent between 1992 and 1997.

With investment exceeding Rs. 50,000 crore, the turnover of the automobile

industry exceeded Rs. 59,518 crore in 2002-03. Including turnover of the auto-component



sector, the automotive industry's turnover, which was above Rs. 84,000 crore in 2002-03, is

estimated to have exceeded Rs.1,00,000 crore ( USD 22. 74 billion) in 2003-04.

Major Manufacturers in Automobile Industry

Maruti Udyog Ltd.

General Motors India

Ford India Ltd.

Eicher Motors

Bajaj Auto

Daewoo Motors India

Hero Motors

Hindustan Motors

Mahindra Motors

Hyundai Motor India Ltd.

Royal Enfield Motors

Telco

TVS Motors

DC Designs

Swaraj Mazda Ltd

Government has liberalized the norms for foreign investment and import of technology

and that appears to have benefited the automobile sector. The production of total vehicles

increased from 4.2 million in 2005-06 to 7.3 million in 2006-07.



The industry has adopted the global standards and this was manifested in the

increasing exports of the sector. After a temporary slump during 2007- 2008 , such exports

registered robust growth rates of well over 50 per cent in 2008-09 and 2009-10 each to

exceed two and- a-half times the export figure for 2011-12.

Automobile Export Numbers

THE KEY FACTORS BEHIND THIS UPSWING

Sales incentives, introduction of new models as well as variants coupled with easy

availability of low cost finance with comfortable repayment options continued to drive

demand and sales of automobiles during the first two quarters of the current year. The risk of

an increase in the interest rates, the impact of delayed monsoons on rural demand, and

increase in the costs of inputs such as steel are the key concerns for the players in the

industry.

As the players continue to introduce new models and variants, the competition may

intensify further. The ability of the players to contain costs and focus on exports will be

critical for the performance of their respective companies.

The auto component sector has also posted significant growth of 20 per cent in 2009-

10, to achieve a sales turnover of Rs.30,640 crore (US$ 6.7 billion). Further, there is a

potential for higher growth due to outsourcing activities by global automobiles giants.

Today, this sector has emerged as another sunrise sector.

2.2 COMPANY PROFILE

Ford Motor Company designs, develops, manufactures, and services cars and

trucks worldwide. It operates in two sectors, Automotive and Financial Services. The

Automotive sector sells vehicles under Ford, Mercury, Lincoln, and Volvo brand names.

This sector markets cars, trucks, and parts through retail dealers in North America, and

through distributors and dealers outside of North America. It also sells cars and trucks to

dealers for sale to fleet customers, including daily rental car companies, commercial fleet



customers, leasing companies, and governments. In addition, this sector provides retail

customers with a range of after-the-sale vehicle services and products in areas, such as

maintenance and light repair, heavy repair, collision, vehicle accessories, and extended

service warranty under the Genuine Ford, Lincoln-Mercury Parts and Service, Ford Custom

Accessories, Ford Extended Service Plan, and Motor craft brand names. The Financial

Services sector offers various automotive financing products to and through automotive

dealers. It offers retail financing, which includes purchasing retail installment sale contracts

and retail lease contracts from dealers, and financing to commercial customers to purchase or

lease vehicle fleets; wholesale financing that comprises making loans to dealers to finance

the purchase of vehicle inventory; and other financing, which consists of making loans to

dealers for working capital, improvements to dealership facilities, and to purchase or finance

dealership real estate. This sector also services the finance receivables and leases that it

originates and purchases, makes loans to its affiliates, purchases receivables, and provides

insurance services related to its financing programs. Ford Motor Company was founded in

1903 and is based in Dearborn, Michigan.

Henry Ford and Family

The story of Henry Ford is not of a prodigy entrepreneur or an overnight success.

Ford grew up on a farm and might have easily have remained in agriculture. But something

stronger pulled at Ford’s imagination, mechanics, and machinery, understanding how things

worked and what new possibilities lay in store. As a young boy, he took apart everything he

got his hands on. He quickly became known around the neighborhood for fixing people’s

watches. In 1896, Ford invented the Quadricycle . It was the first “horseless carriage” that he

actually built. Its a far cry from today’s cars and even from what he produced a few years

later, but in a way it was the starting point of Ford’s career as a businessman. Until the

Quadricycle, Ford’s tinkering was experimental, theoretical-like the gas engine he built on

his kitchen table in the 1890’s, which was just an engine with nothing to power. The

Quadricycle showed enough potential that it launched the beginning of Ford’s business

ventures.



Ideas into Business

Ford Motor Company was founded on June 16, 1903.The first Ford, the model A,

was being sold in Detroit a few months later. When founded the Ford Motor Company was

just one of 15 car manufacturers in Michgan and 88 in the US. But as it began to turn a profit

within its first few months,it became clear that Henry Ford’s vision for the automotive

industry was going to work and work in a big way. During the first five years of Ford Motor

Company’s existence, Henry Ford, as chief engineer and later as president, directed a

development and production program that started in a converted wagon shop.

Henry Ford’s insistence that the company’s future lay in the production of

affordable cars for a mass market caused increasing friction between him and the other

investors. As some left, Ford acquired enough stock to increase its own holdings to 58.5

percent. Henry Ford became president in 1906, replacing John.S.Gray,a Detroit banker who

had served as the company’s first president.

Ford Family through the Years

The years between the world wars were a period of hectic expansion. In 1917,

Ford Motor Company began producing trucks and tractors. In 1919,a conflict with

stockholders over the millions to be spent building the giant Rouge manufacturing complex

in Dearborn, Michigan led to the company becoming wholly owned by Henry Ford and his

son, Edsel, who then succeeded his father as president. After Edsel Ford passed away in

1943,a saddened Henry Ford resumed the presidency.

Henry Ford resigned for the second time at the end of World War II. His eldest

grandson, Henry Ford II, became president on Sept 21,1945.Even as Henry Ford II drove the

industry’s first postwar car off the assembly line, he was making plans to reorganize and

decentralize the company to resume its prewar position as a major force in a fiercely

competitive auto industry.

Henry Ford II provided strong leadership for Ford Motor Company from the

postwar era into the 1980s.He was president from 1945 until 1960 and chief executive officer



from 1945 until 1979.He was chairman of the board of directors from 1960 until 1980 and

removed as chairman of the finance committee from 1980 until his death in 1987.Now,at the

beginning of its second century,another Ford family member has been named CEO of Ford

Motor Company, the first family member to hold the position in more than 20 years. Like his

uncle, Henry Ford I, William Clay Ford Jr.(great grandson of Henry Ford) leads a company

where “family” has a much broader meaning, referring to far more than just those with the

last name “Ford”. Today, the Ford family comprises of employees, dealers, suppliers,

shareholders, customers and more-all those who help fulfill the vision Bill Ford has defined

for the company: to create great products that benefit customers, shareholders and society.

HISTORY

The Dream Becomes A Business

Ford Motor Company entered the business world on June 16,1903, when Henry

Ford and 11 business associates signed the signed the company’s articles of incorporation.

With $28,000 in cash, the pioneering industrialists gave birth to what was to become one of

the world’s largest corporations. Few companies are as closely identified with the history and

development of industry and society throughout the 20th century as Ford Motor Company.

As with most great enterprises, Ford Motor Company’s beginnings were modest.

The company had anxious moments in its infancy. The earliest record of a shipment is July

20, 1903, approximately one month after incorporation, to a Detroit physician. With the

company’s first sale came hope –a young Ford Motor Company had taken its first steps.

Mass Production On The Line

Perhaps Ford Motor Company’s single greatest contribution to automotive

manufacturing was the moving assembly line. First implemented at the Highland Part plant

(in Michigan, US) in 1913, the new technique allowed individual workers to stay in one

place and perform the same tasks repeatedly on multiple vehicles that passed them. The



proved tremendously efficient, helping the company far surpass the production levels of their

competitors-and making the vehicles more affordable.

The First Vehicles

Henry Ford insisted that the company’s future lay in the production of affordable

cars for a mass market. Beginning in 1903, the company began using the first 19 letters of

the alphabet to name new cars. In 1908, the Model T was born.19 years and 15 million

Model T’s later, Ford Motor Company was a giant industrial complex that spanned the

globe. In 1925, Ford Motor Company acquired the Lincoln Motor Company, thus branching

out into luxury cars, and in the 1930’s, the Mercury division was created to establish a

division centered on mid-priced cars. Ford Motor Company was growing.

Becoming a Global Company

In the 50’s came the Thunderbird and the chance to own a part of Ford Motor

Company. The company went public and, on Feb 24, 1959, had about 350,000 new

stockholders. Henry Ford II’s keen perception of political and economic trends in the 50’s

led to the global expansion of FMC in the 60’s, and the establishment of Ford of Europe in

1967, 20 years ahead of the European Economic Community’s arrival. The company

established its North American Automotive Operations in 1971, consolidating U.S, Canadian

and Mexican operations more than two decades ahead of the North American Free Trade

Agreement.

Ford Motor Company started the last century with a single man envisioning products

that would meet the needs of people in a world on the verge of high gear industrialization.

Today, Ford Motor Company is a family of automotive brands consisting of: Ford, Lincoln,

Mercury, Mazda, Jaguar, Land Rover, Aston Martin and Volvo. The company is beginning

its second century of existence with a worldwide organization that retains and expands Henry



Ford’s heritage by developing products that serve the varying and ever changing needs of

people in the global community.

OVERVIEW

Their Vision

To become the world’s leading Consumer Company for automotive products and

services.

Their Mission

We are a global family with a proud heritage passionately committed to providing

personal mobility for people around the world.

We anticipate consumer need and deliver outstanding products and services that

improve people’s lives.

Their Values

Our business is driven by their consumer focus, creativity, resourcefulness, and

entrepreneurial spirit.

We are an inspired, diverse team. We respect and value everyone’s contribution. The

health and safety of our people are paramount.

We are a leader in environmental responsibility. Our integrity is never compromised

and they make a positive contribution to society.

We constantly strive to improve in everything they do. Guided by these values, we

provide superior returns to their shareholders.



FORD

Genuine, Progressive, Smart

Ford Motor Company offers reliable, affordable vehicles for the world’s varying

lifestyles. From the Model T-the car that first brought driving to the masses, to more recent

favorite like the Escape, Ford vehicles have been among the world’s most popular cars and

trucks.

Major Competitors

Daimler Chrysler, Fiat, General Motors, Honda, Nissan, Toyota, Volkswagen, Hyundai

FORD INDIA PRIVATE LIMITED

Ford India Private Limited is a wholly owned subsidiary of the Ford Motor

Company in India. Ford India Private Limited's head quarters are located in Chengalpattu,

Tamil Nadu. It currently is the 8th largest car maker in India after Maruti Suzuki, Hyundai,

Tata Motors, Mahindra, Chevrolet, Honda and Toyota.

The modern Ford India Private Limited began production in 1996, although the

roots trace back to 1907 when the Model A was launched. Its manufacturing facilities are in

Maraimalai Nagar near Chennai. Ford India Private Limited began production in 1926, but

was shut down in 1954. Production began again with the joint venture Mahindra Ford India

Limited (MFIL) in October 1995, a 50-50 venture with Mahindra & Mahindra Limited. Ford

Motor Company increased its interest to 72% in March 1998 and renamed the company Ford

India Private Limited. FIPL's main manufacturing plant had a capacity of 100,000 vehicles

annually and is located in Maraimalai Nagar, 45 kms. From Chennai. As its new hatchback

Figo was launhced in March 2010, Ford Motor Company had invested $500 million to

double capacity of the plant to 200,000 vehicles and 250,000 engines annually.

Current Models

1. Ford Ikon – launched in 1999



2. Ford Endeavor – launched in 2004

3. Ford Fiesta – launched in 2005

4. Ford Figo – launched in 2010

5. Ford Fiesto – launched in 2012

6. Ford Ecosport – launched in 2013

Discontinued Models

1. Ford Escort (1996 -2000)

2. Ford Mondeo(2001 – 2005)

3. Ford Fusion(2004-2010)

Service Network

As of June 2010, FIPL has 168 dealerships in 97 cities across India . The company

plans to expand to 200 dealerships by the end of 2010.

Sales Performance

FIPL posted tremendous record sale, witnessing a 272 per cent growth in year-on

year sales for the month of May when compared to May 2009. Ford Figo continued to drive

record sales for Ford India for the third consecutive month since its launch in the Indian

market.

Ford India also saw an increase in its month-on-month sales with May posting higher

sales than April, achieving a 7.6 per cent high against last month's sale of 7509 units. Other

Ford brands also saw a rise in demands which added to the overall volume for May with all

the brands performing well. Ford India will commence its second production shift at its

manufacturing plant in Maramalainagar from July, with training of new employees already

underway, to meet strong demands for its products especially the Figo



Exports

FIPL currently exports vehicles in small quantity to countries in South America and

Africa.
