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S.no Contents Pg.No
1. Chapter 1. Introduction 2-20
2. Chapter 2. Research and Methodology 21-26
3. Chapter 3. Data Analysis And Interpretation 27-37
4. Findings 38
5. Limitations 39
6. Conclusions 40
7. Suggestion and Recommendations 41
INDEX
8. Questionnaires and Bibliography 42-45
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CHAPTER 1INTRODUCTION
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CONSUMER BEHAVIOR:
Not understanding your consumer’s motivations needs and preferences can hurt. The aim of
marketing is to meet and satisfy target consumer’s needs and wants. The field of consumer behavior
studies how individuals or groups of individuals select, buy, use and dispose of goods or services.
Understanding consumer behavior and “knowing consumers” is not simple. Consumers may say one
thing and do another. They may not be in touch with their deeper motivations. They may respond to
influences that change their minds at the last minute.
But studying consumers provides clues for developing new products, product features, prices and
altering marketing strategies accordingly. Let us try and understand the buyer behavior process.
Problem Recognition: Perceiving a Need
Information Search: Seeking Value
Alternative Evaluation: Assessing Value
Purchase Decision: Buying Value
Post purchase Behavior: Value in Consumption
Problem Recognition
The buying process starts when the buyer recognizes a problem or need. The need can be triggered
by internal or external stimuli. Marketers need to identify the circumstances that trigger a particular
need. By gathering information from a number of consumers, marketers can identify the most
frequent stimuli that spark an interest in a product category. They can then develop marketing
strategies that trigger consumer interest.
Information Search
An aroused consumer will be inclined to search for more information. Consumer information
sources fall into four groups
Personal Sources: Family, Friends, Neighbors, Acquaintances
Public Sources : Mass Media, Consumer-Rating Organisations
Experiential Sources : Handling, Examining, Using the Product
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Knowing about the sources will help the companies in preparing effective communications for the
target market.
Alternative Evaluation
How does the consumer evaluate competitive brands and make a final value judgment? There is no
single process used by all consumers or by one consumer in all buying situations. But some basic
concepts will help us in understanding consumer evaluation processes.
First, the consumer is trying to satisfy a need.
Second, the consumer is looking for certain benefits from the product solution.
Third, the consumer sees each product as a bundle of attributes with varying abilities for delivering
the benefits sought to satisfy this need.
Purchase Decision
In the evaluation stage, the consumer forms preferences among the brands in the choice set. The
Consumer may also form an intention to buy the most preferred brand. However, two factors can
Intervene between the purchase intention and purchase decision.
The first factor is the attitudes of others and the second factor is unanticipated situational factors
such as loss of income, some other urgent purchase etc.
In executing a purchase intention, the consumer may make up to five purchase sub-decisions,
Brand decision
Vendor decision
Quantity decision
Timing decision
Payment-method decision
Post-Purchase Behavior
After purchasing the product, the consumer will experience some level of satisfaction or
Dissatisfaction. The marketer’s job thus, does not end when the product is brought. Marketers must
Monitor post-purchase satisfaction, post-purchase actions and post-purchase product uses.
AN EXAMPLE OF A PURCHASE BEHAVIOR BY A CONSUMER IS GIVEN BELOW
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Problem Recognition
The need was recognized when my old mobile phone stopped working. I was using Nokia 5200 and
suddenly it stopped working and when given for repair, I was informed that the mobile can not be
repaired. The process of getting my mobile repaired took some 10 days i.e. for almost 10 days I was
without a mobile phone. The need was felt when it was my birthday and I was not able to be in
touch with my friends and family. Since I use my mobile even to surf my mails and internet I was
not
even able to do that. All this caused a lot of in convince and finally I had to go for a new mobile
phone.
Information Search
For me my mobile phone is a high involvement product. Since am a student with limited disposable
income I purchase a mobile once in a wile. I don’t change my mobile set unless and until it stops
working and therefore at the time of making a decision to buy a new mobile I went through all the
various mobile phones available in my budget and of my preferred brand. i always look for various
offers and even compared rates at various stores and mobile dealers.
Alternative Evaluation
In identifying the various alternatives I went through various mobiles available of my preferred
brand. I even discussed with my family members and friends about which mobile do they
recommend. I met various dealers and stores to know the latest Nokia launches and various offers
available with all these dealers. No check out the rates and features I even visited various web sites
where I compared all the features and prices of various brands available in my budget.
Since I am a Nokia loyalist so I never preferred changing my mobile brand. although the other brand
offers were really tempting but they were still not able to influence me to change my brand. The
only issue was which mobile model I should go for. There were various mobiles available and were
almost similar apart from some features difference and design. Finally I decided to go for Nokia
3120
which was economical, had a good design, was Nokia latest launch and was satisfying almost all my
needs i.e. it was a 3G phone so apt for internet surfing and with all the latest features.
Purchase Decision
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Finally the action taken by me was purchasing Nokia 3120. The mobile store had am offer of
getting
a hand free on every purchase but somehow that model was not available with them. i waited for
few days and then I finally bought the mobile from e store. Although that hands free offer was not
available but that was urgency since I was not able to avoid the need of having a mobile.
Post Purchase Behaviour
Am using the mobile since past 2 months and till now am quite content with my decision. Its
working pretty well and is apt for me.
What is consumer Buying Behaviour?
Buying Behaviour is the decision processes and acts of people involved in buying and using
products.
Firms need to understand:
why consumers make the purchases that they make? what factors influence consumer purchases? the changing factors in our society.
Consumer Buying Behavior refers to the buying behavior of the ultimate consumer. A firm needs to analyze buying behavior for:
Buyers’ reactions to a firms marketing strategy has a great impact on the firm’s success. The marketing concept stresses that a firm should create a Marketing Mix (MM) that satisfies
(gives utility to) customers, therefore need to analyze the what, where, when and how consumers buy.
Marketers can better predict how consumers will respond to marketing strategies.
Stages of the Consumer Buying Process
Six Stages to the Consumer Buying Decision Process (For complex decisions). Actual purchasing is only one stage of the process. Not all decision processes lead to a purchase. All consumer decisions do not always include all 6 stages, determined by the degree of complexity are discussed next.
The 6 stages are:
1. Problem Recognition(awareness of need)--difference between the desired state and the actual condition. Deficit in assortment of products. Hunger--Food. Hunger stimulates your need to eat.Can be stimulated by the marketer through product information--did not know you were deficient? I.E., see a commercial for a new pair of shoes, stimulates your recognition that you need a new pair of shoes.
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2. Information search--
o Internal search, memory.
o External search if you need more information. Friends and relatives (word of mouth).
Marketer dominated sources; comparison shopping; public sources etc.
A successful information search leaves a buyer with possible alternatives, the evoked set.
Hungry, want to go out and eat, evoked set is
o chinese food o indian food o burger king o klondike kates etc
3. Evaluation of Alternatives--need to establish criteria for evaluation, features the buyer wants
or does not want. Rank/weight alternatives or resume search. May decide that you want to eat
something spicy, Indian gets highest rank etc.
If not satisfied with your choice, then return to the search phase. Can you think of another
restaurant? Look in the yellow pages etc. Information from different sources may be treated
differently. Marketers try to influence by "framing" alternatives.
4. Purchase decision--Choose buying alternative, includes product, package, store, method of
purchase etc.
5. Purchase--May differ from decision, time lapse between 4 & 5, product availability.
6. Post-Purchase Evaluation--outcome: Satisfaction or Dissatisfaction. Cognitive Dissonance,
have you made the right decision. This can be reduced by warranties, after sales
communication etc.
After eating an indian meal, may think that really you wanted a chinese meal instead.
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Types of Consumer Buying Behavior
Types of consumer buying behavior are determined by:
Level of Involvement in purchase decision. Importance and intensity of interest in a product
in a particular situation.
Buyers, level of involvement determines why he/she is motivated to seek information about a
certain products and brands but virtually ignores others.
High involvement purchases--Honda Motorbike, high priced goods, products visible to others, and
the higher the risk the higher the involvement. Types of risk:
low cost items; need very little search and decision effort; purchased almost automatically.
Examples include soft drinks, snack foods, milk etc.
Limited Decision Making--buying product occasionally. When you need to obtain
information about unfamiliar brand in a familiar product category, perhaps. Requires a
moderate amount of time for information gathering. Examples include Clothes--know
product class but not the brand.
Extensive Decision Making/Complex high involvement, unfamiliar, expensive and/or
infrequently bought products. High degree of economic/performance/psychological risk.
Examples include cars, homes, computers, education. Spend a lot of time seeking
information and deciding.
Information from the companies MM; friends and relatives, store personnel etc. Go through
all six stages of the buying process.
Impulse buying, no conscious planning.
The purchase of the same product does not always elicit the same Buying Behaviour. Product can
shift from one category to the next.
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For example: Going out for dinner for one person may be extensive decision making (for
someone that does not go out often at all), but limited decision making for someone else. The reason
for the dinner, whether it is an anniversary celebration, Valentine’s Day dinner, or a meal with a
couple of friends will also determine the extent of the decision making.
Categories that Effect the Consumer Buying Decision Process
A consumer, making a purchase decision will be affected by the following three factors:
1. Personal
2. Psychological
3. Social
The marketer must be aware of these factors in order to develop an appropriate MM for its target
market.
Personal
Its unique to a particular person. Demographic Factors such as Sex, Race, Age etc.Who in the family is responsible for the decision making?Young people purchase things for different reasons than older people.
Psychological factors
Psychological factors include:
Motives:
A motive is an internal energizing force that orients a person's activities toward satisfying a need or achieving a goal.Actions are effected by a set of motives, not just one. If marketers can identify motives then they can better develop a marketing mix.MASLOW hierarchy of needs!!
o Physiological o Safety o Love and Belonging o Esteem o Self Actualization
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Need to determine what level of the hierarchy the consumers are at to determine what motivates their purchases.
Perception:What do you see?? Perception is the process of selecting, organizing and interpreting information inputs to produce meaning. IE we chose what info we pay attention to, organize it and interpret it.Information inputs are the sensations received through sight, taste, hearing, smell and touch.
Selective Exposure-select inputs to be exposed to our awareness. More likely if it is linked to an event, satisfies current needs, intensity of input changes (sharp price drop).
Selective Distortion-Changing/twisting current received information, inconsistent with beliefs.
Advertisers that use comparative advertisements (pitching one product against another), have to be very careful that consumers do not distort the facts and perceive that the advertisement was for the competitor. A current example...MCI and AT&T...do you ever get confused?
Selective Retention-Remember inputs that support beliefs, forgets those that don't.Average supermarket shopper is exposed to 17,000 products in a shopping visit lasting 30 minutes-60% of purchases are unplanned. Exposed to 1,500 advertisement per day. Can't be expected to be aware of all these inputs, and certainly will not retain many.
Interpreting information is based on what is already familiar, on knowledge that is stored in the memory.
Ability and Knowledge:
Need to understand individual’s capacity to learn. Learning, changes in a person's behaviour caused by information and experience. Therefore to change consumers' behaviour about your product, need to give them new information re: product...free sample etc.
When making buying decisions, buyers must process information.Knowledge is the familiarity with the product and expertise.
Inexperience buyers often use prices as an indicator of quality more than those who have knowledge of a product.Non-alcoholic Beer example: consumers chose the most expensive six-pack, because they assume that the greater price indicates greater quality.
Learning is the process through which a relatively permanent change in behavior results from the consequences of past behavior.
Attitudes:Knowledge and positive and negative feelings about an object or activity-maybe tangible or intangible, living or non- living.....Drive perceptions
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Individual learns attitudes through experience and interaction with other people.Consumer attitudes toward a firm and its products greatly influence the success or failure of the firm's marketing strategy.
Honda "You meet the nicest people on a Honda", dispel the unsavory image of a motorbike
rider, late 1950s. Changing market of the 1990s, baby boomers aging, Hondas market
returning to hard core. To change this they have a new slogan "Come ride with us".
Attitudes and attitude change are influenced by consumers, personality and lifestyle.
Consumers screen information that conflicts with their attitudes. Distort information to make
it consistent and selectively retain information that reinforces our attitudes. IE brand loyalty.
There is a difference between attitude and intention to buy (ability to buy).
Personality:
All the internal traits and behaviours that make a person unique, uniqueness arrives from a
person's heredity and personal experience. Examples include:
o Workaholics
o Compulsiveness
o Self confidence
o Friendliness
o Adaptability
o Ambitiousness
o Dogmatism
o Authoritarianism
o Introversion
o Extroversion
o Aggressiveness
o Competitiveness.
Traits affect the way people behave. Marketers try to match the store image to the perceived
image of their customers.
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There is a weak association between personality and Buying Behaviour, this may be due to
unreliable measures. In Nike ads for example, Consumers buy products that are consistent
with their self concept.
Lifestyles:
Recent US trends in lifestyles are a shift towards personal independence and individualism
and a preference for a healthy, natural lifestyle. Lifestyles are the consistent patterns people
follow in their lives.
EXAMPLE: healthy foods for a healthy lifestyle. Sun tan not considered fashionable in US
until 1920's. Now an assault by the American Academy of Dermatology.
Social Factors
Consumer wants, learning, motives etc. are influenced by opinion leaders, person's family, reference
groups, social class and culture.
Opinion leaders--
Spokes-people etc. Marketers try to attract opinion leaders...they actually use (pay)
spokespeople to market their products. Michael Jordon (Nike, McDonalds, Gatorade etc.)
Can be risky...Michael Jackson...OJ Simpson...Chevy Chase
Roles and Family Influences--
Role and things you should do based on the expectations of you from your position within a
group. People have many roles. Husband, father, employer/ee. Individuals role are
continuing to change therefore marketers must continue to update information.
Family is the most basic group a person belongs to. Marketers must understand:
o that many family decisions are made by the family unit
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o consumer behaviour starts in the family unit
o family roles and preferences are the model for children's future family (can
reject/alter/etc)
o family buying decisions are a mixture of family interactions and individual decision
making
o family acts an interpreter of social and cultural values for the individual.
The Family life cycle: families go through stages. Each stage creates different consumer
demands:
o bachelor stage...
o newly married, young, no children...me
o full nest I, youngest child under 6
o full nest II, youngest child 6 or over
o full nest III, older married couples with dependent children
o empty nest I, older married couples with no children living with them, head in labour
force
o empty nest II, older married couples, no children living at home, head retired
o solitary survivor, in labour force
o solitary survivor, retired
o Modernized life cycle includes divorced and no children.
Because 2 income families are becoming more common, the decision maker within the
family unit is changing also, family has less time for children, and therefore tends to let them
influence purchase decisions in order to alleviate some of the guilt. (Children influence about
$130 billion of goods in a year) Children also have more money to spend themselves.
Reference Groups--
Individual identifies with the group to the extent that he takes on many of the values,
attitudes or behaviours of the group members.
Families, friends, sororities, civic and professional organizations.
Any group that has a positive or negative influence on a person’s attitude and behavior.
Affinity marketing is focused on the desires of consumers that belong to reference groups.
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Marketers get the groups to approve the product and communicate that approval to its
members. Credit Cards etc.
Aspiration groups (want to belong to) Disassociate groups (do not want
to belong to)Honda, tries to disassociate from the "biker" group.
The degree to which a reference group will affect a purchase decision depends on an
individual’s susceptibility to reference group influence and the strength of his/her
involvement with the group.
Social Class--
An open group of individuals who have similar social rank. Jamaica is not a classless society.
Class criteria: occupation, education, income, wealth, race, ethnic groups and possessions.
Social class influences many aspects of our lives. IE upper middle class prefer luxury cars
Mercedes.
o Upper -upper-upper class, .3%, inherited wealth, aristocratic names.
o Lower-upper class, 1.2%, newer social elite, from current professionals and corporate
elite
o Upper-middle class, 12.5%, college graduates, managers and professionals
o Lower middle class, 32%, average pay white collar workers and blue collar friends
o Working class, 38%, average pay blue collar workers
o Upper-lower class, 9%, working
o Lower-lower class, 7%,
Social class determines to some extent, the types, quality, quantity of products that a person
buys or uses.
Lower class people tend to stay close to home when shopping; do not engage in much pre-
purchase information gathering. Stores project definite class images.
Family, reference groups and social classes are all social influences on consumer behaviour.
All operate within a larger culture.
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Culture and Sub-culture--
Culture refers to the set of values, ideas, and attitudes that are accepted by a homogenous
group of people and transmitted to the next generation.
Culture also determines what is acceptable with product advertising. Culture determines what
people wear, eat, reside and travel. Cultural values in the US are good health, education,
individualism and freedom.
Different society, different levels of needs, different cultural values.
Culture can be divided into subcultures:
o geographic regions
o human characteristics such as age and ethnic background.
Culture affects what people buy, how they buy and when they buy. Understanding Consumer
Buying Behavior offers consumers greater satisfaction (Utility). We must assume that the company
has adopted the Marketing Concept and are consumer oriented.
The study of how and why people purchase goods and services is termed consumer buying
behaviour . The term covers the decision-making processes from those that precede the
purchase of goods or services to the final experience of using the product or service. Models
of consumer buying behaviour draw together the various influences on, and the process of,
the buying decision. They attempt to understand the proverbial 'blackbox' of what happens
within the consumer between his or her exposure to marketing stimuli and the actual decision
to purchase.
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Figure Black box model of consumer buying behaviour
Source: Keegan et al. (1992, p. 193)
The essence of the model is that it suggests consumers will respond in particular ways to different
stimuli after they have 'processed' those stimuli in their minds. In more detail, the model suggests
that factors external to the consumer will act as a stimulus for behaviour, but that the consumer's
personal characteristics and decision-making process will interact with the stimulus before a
particular behavioural response is generated.
It is called the 'black box' model because we still know so little about how the human mind works.
We cannot see what goes on in the mind and we don't really know much about what goes on in
there, so it's like a black box. As far as consumer behaviour goes, we know enough to be able to
identify major internal influences and the major steps in the decision-making process which
consumers use, but we don't really know how consumers transform all these data, together with the
stimuli, to generate particular responses.
Turn now to the following reading to begin looking at your text's introduction to buyer behavior.
MOBILE INDUSTRY:
With rapid consumerism sweeping the country, India has emerged as the second largest mobile
handset market, poised for explosive growth by 2007. The major drivers for growth have been the
demand and also the existence of companies providing the most technologically advanced handsets
at justifiable prices. The technological developments have been the driving factor for the increasing
demand graph.
The mobile handset market in India is estimated to be worth Rs.8.05billion (US $2billion) as of
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2004/05 and will surge by 62% with approximately 100-million subscribers nationwide by 2007. It
is also learnt that the Indian mobile subscribers are willing to pay for upgrades, value-based
services, and advanced models that provide better services.
There has been a growth in the mobile handset market in India and the demand is increasing with
the increasing tele-density. The market is overloaded with the number of mobile handset providers
due to which the customer is able to bargain for a reasonable price for the mobile. The various
players are Nokia, Samsung, Motorola, Sony Ericsson, Alcatel, Panasonic, Siemens, BenQ,