Consumer Behaviour

Consumer Buying Behaviour
CONCEPT
Consumer
The attitude of consumer or buyer decides how demand will emerge for a new product
and service and how existing goods and services will be sold. The attitude in turn
depends upon many economic, social, cultural, climatic factors. The decisions are also
influenced by education, stage of economic development, lifestyle, information, size of
family and hoast of other factors.
To understand consumers each brand has to start by asking several basic questions:
WHO
Who is the consumer? What are consumers demographics? Where does she stay? Which
socio-economic class does she hail from? Who can influence her purchase behaviour?
WH!
Why does she buy this product? This brand? What are her beliefs? What is her attitude
towards this brand and the ey competitors? What needs does this brand fulfill?
WHEN
When does she buy the brand? !aily? "onthly? When does she use the brand?
WHE"E
Where does she buy the brand? Where else may she want to buy the brand? Where does
she use the brand? #t home? $utside?
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Customer
Who#s running the organi$ation
Customers%%%
&y Tom 'eters
(ts an old saying that customer is the )ing because he is the person on whose decision
demand of any product or any service is dependent.
The purpose of a business organization is to achieve the ob*ectives set out by its
staeholders, its shareholders, its employees and others. &ut among the most important
players in this game are the customers of the business. +o business can be successful if it
ignores the needs of its customers.
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CON&'(E" BEH)*+O'"
(eaning and de,inition
The study of consumer behaviour implies how and why a particular consumer or group
reacts to decisions of producers. -onsumer behaviour could be defined as .those actions
directly involved in obtaining, consuming, and disposing of products and services,
including the decisions process that proceeds and follow the action./
#ccording to another author consumer behaviour is .the behaviour that consumer display
in scanning for purchasing, using, evaluating and disposing of products and services that
they expect will satisfy their needs. The study of consumer behaviour is the study of how
individuals mae decisions to spend their available resources 0time, money, effort1 on
consumption related items. (t includes the study of what to buy, when to buy, why to buy,
from where to buy, how often to buy, and how often they will use it./
+ormally in consumer behaviour one studies the behaviour of consumers for
consumption goods but in the study the behaviour of the buyer is also included. 2e may
be user i.e. ultimate consumer or he may be buying for someone else.
(n a competitive environment, one cannot trust a product or a consumer. The producer has
to produce what is demanded or what can be demanded. 3tudy of consumer behaviour
will help us to now what can be sold and what goods and services are liely to get
re*ected.
(n certain products lie medicines one buys on the prescription of a physician which is
also a part of consumer behaviour. (n case of capital goods that is plant, e4uipment,
machinery, buildings etc the decisions are often based on technical advise of others. (n
case of industrial raw materials the decision is influenced by supplier of e4uipment. Then
there are purely consumer goods with short life and once they are used they extinguish.
They are called 5ast "oving -onsumer 6oods 05"-61. There are other consumer goods
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which are durable lie cars, refrigerators, electrical iron, *uicer-mixer, etc but they
basically consumer items with long life. There are also goods lie clothes, which are not
consumed in one go but are used for long. The behaviour of consumers for all these
products is taen on different considerations than short-term consumer goods lie fruits,
*uices, ice cream or mil.
(n short consumer behaviour implies study of behaviour of purchaser of all goods and
services whether purely consumer goods, intermediate goods or capital goods. (n other
words it implies study of attitude of all consumers in disposing of their resources. 5urther
it is not confined to final users but also include study of attitudes, of all those who tae
investment decisions whether they consume themselves or buy for others. (t also includes
study of behaviour of those who are consultant, advisers and give their opinion to but or
not to buy a particular thing and the study of factors which influence their advise8opinion.
-onsumer behaviour is an art and a science, economics, psychology, sociology. The study
of consumer behaviour envelops all these and more. &e it a housewife buying a tube of
tooth paste, an executive buying a tie, a school id buying a pen or a multi-million dollar
corporation buying heavy capital e4uipment, the process of buying is complex and, at
times, intriguing. The consumer buying process is influenced by the consumers financial
position, personality, tastes, preferences, reference groups, social standing, and even the
economic sentiment that is dictated by the status of the economy.
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'nderstanding consumers ,or brand building
The success of a brand is dictated by its acceptance by consumers and consumer
acceptance is dependent on whether or not the brand understands the consumer needs and
fulfils them consistently. &rand building is very important for retaining the customers.
When a brand is being launched, it is very important to understand the consumers and
figure out what will attract them to the brand.
(f it is an established brand that is growing at a slow rate relative to the maret,
understanding consumers will help the brand to re*uvenate itself, with a new variant, or a
new version.
:ust as the consumer puts a face to an organization by using the brand as the recognition
device, it is the responsibility of the organization to recognize its consumers. The
organization should now who the regular users of the brand are? Who are the lapsed
users of the brand? Why the users are continuing to use the brand and why the lapsed
consumers have stopped using the brand?
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'nderstanding consumers has to start and end -ith a series o, questions:
Who are the consumers for the brand?
Why should they buy it?
When will they buy it?
Where will they buy it from?
2ow often will they buy it?
2ow much will they pay for it?
Whom will they consult for advice?
What are their beliefs about the product category?
What are the other products that serve the same purpose?
What is the share of this product category in solving the problem?
What are their attitudes towards the brand?
Why are some consumers never using the brand?
Why are some consumers using the brand regularly?
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Economics
=conomic theory tals about the producers of goods and consumers of goods. #
manufacturer maes consumption goods at a price and offers them to consumers at a
price. The consumers perceive value in the goods and are willing to pay a particular price
for the goods. =conomic theory states that lower the price, higher the demand. &ut since
the manufacturer is trying to maximize his profits, the demand-supply situation arrives at
an e4uilibrium position. The economic theory of consumption gets more interesting as the
number of manufacturers increases and there is competition amongst them for the
consumers wallet. =conomic theory treats consumers as purely rational beings.

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Buying behaviour
-onsumer will buy whatever needed by him. &ut whatever he buys depends on some
factors. The consumer buying is based on a particular behaviour, which if predicted helps
the mareter to maret his products thereby increasing the profits. This buying behaviour
can be explained in the following manner?
@ A A A A
(t is very important for mareters to understand consumer-buying behaviour because that
is the only possibility to offer greater satisfaction for the consumer. #lthough there
remains a certain amount of consumer dissatisfaction, the reason for this is that some
mareters still are not consumer oriented and do not regard customer satisfaction as a
primary ob*ective.
#nother problem is that the tools for analyzing consumer behaviour are not very precise,
so it is impossible for mareters to determine what is highly satisfying to buyers.
(f a mareter can identify consumer buyer behaviour, he or she will be in a better position
to target products and services at them. &uyer behaviour is focused upon the needs of
individuals, groups and organizations.
B
&uying
&ehaviour
#bility $pportunity "otivation
Buying decision
5or some purchases, a consumer will spend very little time considering the purchase itself
before maing the decision to buy e.g. buying a roll of selotape. 2owever, in other cases,
consumers will as the opinions of other people before maing their purchase decision.
2ence, mareters are always interested in learning which people are liely to influence
the purchase decisions of a typical consumer in a target group. 5or example, if a member
of your family is considering attending college, then it is unliely that they will decide
which college to attend without first discussing the matter with several people. The
opinions of parents, siblings, friends, teachers, professional ac4uaintances, etc. will all
have a certain degree of influence over the persons final decision. (dentifying the ey
)influencers is important. -ompanies may be able to target some forms of promotional
activity at the influencers, so that they in turn will spea favourably about the companys
products8services to the actual purchaser or user.
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POTENT+)0 +N10'ENCE& ON CON&'(E" B'!+N2
BEH)*+O'"
-onsumers are constantly being bombarded with mareting information and promotional
messages. These messages could be about new product launches, special product
promotions, and low-price offers. These appear everywhere from television
advertisements to web site banners. -onsumers do not retain much of this mareting
information. 2owever, when a promotional message is targeted to a specific group of
consumers, it can prove very effective indeed. This is because the mareting message has
been developed to appeal specifically to people in target group of consumers. 5urther
more the mareting message will have been transmitted using promotional methods that
these consumers have access to e.g. the (nternet, T.D., etc.
&efore developing a mareting access, a company should first determine the liely
influence on a potential consumer.
The behaviour of consumer is dependent on a number of factors, which may be economic
or non-economic factors and are dependent upon economic factors such as income, price,
psychology, sociology, culture, and climate. Therefore the study is dependent upon all
these sciences and consumer behaviour scientists study it through research and they
believe that behaviour can be influenced which has been proved by actual sales
promotion of a large number of products. 2owever there is dispute whether customer
should be influenced or not and what methods should be applied to influence him. (n
certain cases wrong statements are made that may influence the buying behaviour. 5or
instance, producers of certain face creams advertise that with usage of their creams,
complexion will become fair but actually it does not happen. There are ads for removing
baldness by using certain oils or creams, but this does not happen actually.
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The main ,actors that in,luence buying behaviour are as ,ollo-s:
34 Economic ,actors:
'rice
(ncome
!istribution of income
-ompetition with substitutes
Ftility
-onsumer preferences
54 &ocial ,actors:
-ulture
#ttitude of society
3ocial values
Gife style
'ersonality
3ize of family
=ducation
2ealth standards
64 Psychology
(t decides the personality, taste, attitudes of individuals or groups, lifestyle, preferences
especially on occasions lie marriage. The demonstration influence is also dependent
upon psychology of an individual.
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74 )nthro8ology and 2eogra8hy
-limate, region, history all affect consumer behaviour. (n hot countries lie (ndia, certain
products, which eep us cool lie s4uashes, sarbats, are demanded, but they certainly
have no demand in cold regions. The dress is also influenced by climate along with other
factors. -ulture is also influenced by climate.
94 Technology
(n case of e4uipments, whether for consumer use or industrial use, is affected by
technological innovations and features. &ut it is not confined to durable goods only. =ven
in case of perishable goods the shelf life etc are determined by technological
developments. (nnovations and introduction of new products also depend upon
technological change.
:4 &ituational in,luences
'urchase tas - who are you buying for?
3ocial surroundings - who are you shopping with?
'hysical surroundings - where are you shopping?
Temporal factors - how much time do you have to shop?
#ntecedent states -
What ind of mood are you in?
2ave you *ust been paid?
!o you shop for status or self-gratification?
;4 Others
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This includes nowledge H technical or otherwise and information.
6overnment decisions, laws, distribution policies have also big effect on consumer
behaviour. #ll these factors are studied by consumer behaviour scientists and then they
decide what production and mareting strategy should be adopted to develop a particular
product, change the existing product and what pricing and mareting mix should be used
to attract more customers towards the product or service to optimize sales and profits.
"+-s and few big companies have ignored except the consumer behaviour study in
(ndia. (t is because till recently say upto the beginning of CEs there was sellers maret
and anything could be sold. Therefore hardly any attention was paid to the consumer. 5or
instance, 2industan "otors continued to produce the same car for decades till "aruti
appeared on the arena. &ut with the competition emerging many cars, refrigerators, TDs
and many items appeared on the scene. This resulted into the study of consumer
behaviour.
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+n,luence o, attitudes on buying behaviour
-onsumer characteristics lie personality, lifestyles and attitudes, provide mareters with
a fuller understanding of consumer behaviour than do demographics alone. To understand
consumer attitudes, mareters need to now how consumers develop beliefs about and
preferences for brands based on the information they have processed. These beliefs and
preferences define consumers attitudes towards a brand.
Gifestyle is considered to be one of the most popular concepts in mareting as a way of
understanding consumer behaviour. #ttitudes, interests and opinions of consumers
measure lifestyles.
Nature o, consumer attitudes
"areters need to now what are consumers lies and dislies. (n simple explanation,
these lies and dislies are favourable or unfavourable attitudes. #ttitudes can also be
defined as .learned predispositions to respond to an ob*ect or class of ob*ects in a
consistently favourable or unfavourable way/. This means attitudes towards brands are
consumers learned tendencies to evaluate brands in a consistently favourable or
unfavourable way.
#ttitudes help us understanding, why consumers do or do not buy a particular product
from a certain store. They are used for *udging the effectiveness of mareting activities,
for evaluating mareting actions ever before they are implemented within the maret
place.
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Three com8onents o, )ttitudes:
&rand beliefs, evaluations and intentions to buy define the three components of attitudes
as shown below H
These are lined to the main three components of attitudes. &rand beliefs are the
cogniting 0thining1 component of attitudes, brand evaluations, the affecting component
and intention to buy, the conative component. This linage gives the high involvement
hierarchy of effects, brand beliefs influence evaluation, which influence intention to buy.
#ll these components are lined to behaviour.
There are important predicting and diagnostic differences among three components and
measures when prediction is of prime concern then behavioural intention measures are
most appropriate, since they offer the greatest predictive power, but are limited in their
diagnostic power. This is basically because of their inability to reveal why consumers
intend.

5or example, consumer does not want to shop from a particular store for a number of
reasons. (ntention measures do not reveal these reasons lie convenient shopping hours.
Therefore, reasons for consumers attitudes and intention can be nown by measuring
beliefs.
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&rand
&eliefs
=valuations
(ntentions
1amily in,luences
5amily is an important influence on purchase decisions. &onnet and Iassar*ian say
.#ttitudes towards personal hygiene, preferences for food items etc. are ac4uired from
parents./
Peer grou8 in,luences
Jesearchers say that peer groups are much more liely than advertising to influence
attitudes and purchasing behaviour.
Personality
'ersonality also affects consumers attitudes. Traits such as aggression, extroversion,
submissiveness or authoritarianism may influence attitudes toward brands and products.
+n,ormation and e<8erience
#ccording to learning theory, consumers past experiences influence their brand attitude
and condition their future behaviour. (t is seen that brand loyalty will 4uicly end if brand
does not perform well. Therefore, information and experience also determines attitude.
"ole o, .irect or +ndirect e<8erience
#ttitudes are formed as a result of direct contact with the ob*ect. 'roducts that fail to
perform as expected can easily lead to negative attitudes. 3ometimes, even in absence of
actual experience with an ob*ect one can form attitude. 5or example, many consumers
have never driven "ercedes H &enz or spent a vacation in 3witzerland, but then also form
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positive attitude for this. 3imilarly, the consumers can form an attitude by *ust seeing the
ad that means, they can form the product attitudes.
#ttitudes based on direct experience are held with more confidence. This means
consumers form stronger convictions about the product if had an actual direct experience
with it.
These processes that govern attitude formation are very important in order to develop
strategies and activities that will create, reinforce, or modify consumer attitudes.
)ttitude =To-ard the )d models
(n todays scenario, where half of the business if fetched alone through advertising, the
need for understanding the impact of advertising on consumer attitudes toward particular
products or brands has increased. #dvertisers have paid a considerable attention in
developing attitude H toward H the H ad H model.
The consumers form various *udgements and feelings as and when they are exposed to an
ad. These *udgements and feelings in turn affect the consumers attitude toward the ad
and beliefs about the brand ac4uired from exposure to the ad. 5inally, consumers attitude
towards the ad and beliefs about the brand for his8her attitude the brand.
The model says that to assess consumers attitude towards an ad it is important to
distinguish between cognitive evaluations of the ad 0i.e. whether it is informative or
humorous1 and affective responses toward the ad 0i.e. feelings lie sense of fear, or smile,
or laughter, etc.1 and also measures them separately.
#ccording to this model, researcher suggests that the feelings conveyed by an ad not only
influence the attitude toward the ad but also affect the consumers evaluations of the
brand and also the attitude towards the brand. 2owever, if the gap appears after exposure
of an ad 0around one wee1 the positive effect of a lied ad an the attitude towards a
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brand may change. This usually happens when the purchase order is postponed or
delayed by the consumer after an exposure of ad.
Jesearchers say that both positive and negative feelings toward tend to exist side by side
where both affect attitude uni4uely. 3o, in this wide variety of feelings 0both positive and
negative1 are to be assessed to study the influence of ad exposure.
(t is also seen and tested through research that the consumers attitude toward the ad for a
novel product 0new one1 will have a stronger impact on brand attitude and purchase
intention than for a familiar product. Jesearchers also found that beliefs about a brand
that result from ad exposure play much stronger role in determining attitudes towards the
brand for a familiar product. 3o, in this research nature of attitude H ob*ect is used in
assessing the potential impact of advertising exposure.
(t is observed that attitude towards a specific type of advertising 0eg. comparative1 may
have some impact on the attitude toward a specific ad 0eg. liing or disliing it1. &ut
attitudes toward ads in general seem to have little impact on the attitude toward a specific
ad.
Can attitudes be changed
5ormation of attitudes also explains how to change the attitudes but some other factors
are involved. The research shows that H
E<8osure
"erely, exposing a sub*ect to stimulus 0product8service etc1 may be enough for the
person to form positive attitudes towards the stimulus. Therefore in low involvement
products lie detergents, the most heavily advertised brands would become most familiar
to the consumers, so most liely to be piced off the supermaret shelf.
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E,,ective communication
5or changing the attitudes of consumers it is essential to treat the process of change as a
form of information processing that is being sub*ected to persuasive communications. 3o,
advertisers need to use persuasive communications in their advertisement.
Cognitive dissonance
#ccording to this, all people strive to be consistent, if they hold two psychologically
inconsistent beliefs 8 ideas 8 values 8 attitudes at the same time or if their behaviour
contradicts these cognitions, they will find a way of reducing tension. #t this moment,
mareter can come up with the benefits of the product, so the consumer can reduce
tension by buying that product and dissonance stage ends.
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+n,luence o, 8ersonality on buying behaviour
'ersonality has many meanings. (n consumer studies, personality is defined as consistent
responses to environmental stimuli or we can also say patterns of behaviour that are
consistent and enduring. #n individuals personality helps mareter to describe consumer
segments as it provides for orderly and coherantly related experiences and behaviour.
'ersonality characteristic may be a basis for product positioning. 5or example, one
segment of the maret may die because they want to stic to the group norms and
therefore uses diet product. (n contest another segment is on diet because of internal need.
Therefore, companys positioning strategies will be different for both. 5or the first
segment, they will portray group approval as a result of product use, whereas positioning
for the second segment would portray individual achievement.
(arketers have used three 8ersonality theories to describe consumers:
%. 'sychoanalytic theory or 5reuds theory.
,. 3ociopsychological theory.
7. Trait theory.
Psychoanalytical theory
This theory was given by 3igmund 5reud. This theory stresses the unconscious nature of
personality as a result of childhood conflicts. #ccording to this theory, the human
personality system consists of the idK ego, superego and conflicts are derived from these
three components.
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Jesearchers who apply this theory to mareting believe that id and superego operate to
create unconscious motives for purchasing certain products. #lthough consumers are
primarily unaware of their true reasons for buying what they buy. 5ocus of mareters is
on developing means to incomes these unconscious motives and applying
psychoanalytical theory to mareting is nown as motivational research.
&ocio=8sychological theory
#ccording to this theory, individual and society are interlined. This theory disagrees
with 5reuds contention. (t is also called as +eo-5reudian theory. Jesearchers believe that
social relationships are fundamental to the formation and development of personality.
Iaren 2orney was a social theorist. 3he believed that personality is developed as an
individual learns to cope with basic anxieties that stems up from parent H child
relationships. 3he proposed that individuals could be classified into three personality
groups?
Com8laint H Those individuals who moved toward others. They desire to be loved,
wanted and appreciated.
)ggressive H Those individuals who move against others. They desire to excel and win
admiration.
.etached H Those individuals who move away from others. They desire independence,
self-sufficiency and freedom from obligations.
Trait theory
This theory has been most widely used for measuring personality because it is a
4uantitative approach. This theory states that an individuals personality is composed of
definite attributes called trait. # trait can be defined as any distinguishable, relatively
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enduring way in which one individual differs from another. 5or example, sociability
relaxed style, amount of internal control.
Trait theorists construct personality inventories and as respondents to respond to many
items by agreeing or disagreeing with certain statements or expressing lies or dislies
for certain situations or types of people. These items are then are statistically analyzed
and reduced to a few personality dimensions.
3ingle trait personality tests, which measure *ust one trait, such as self-confidence, are
increasingly being developed for use in consumer behaviour studies. These personality
tests can be designed according to the need to measure traits such as consumer
innovativeness, consumer susceptibility to inter personal influence, consumer materialism
and consumer ethnocentrism.
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Personal values >sel, conce8t or sel, images?
Why do some people mae their consumption decisions differently than others?
'ersonality can be one reason and another can be personal values. 'ersonal values as the
4uestion .(s this product for me?/ These are particularly important in the need-
recognition stage of consumer decision-maing. Dalues are also used by consumers while
evaluating brands, as .(s this brand for me?/
Dalues are basically )ends people see in their lives. "areting often provides the
)means to reach these ends. Dalues are defined as an enduring belief that a specific mode
of conduct or end-state of existence is personally or socially preferable to an opposite or
converse mode of conduct or =nd 3tate of existence. Dalues are relatively stable but not
completely static beliefs about what a person should do. Dalues are concerned with the
goals and the ways of behaving to obtain goals.
Dalues serve as the invisible outline for the development of many of the other
components of the culture H the ideas, customs, traditions, myths, rituals, laws and
material artifacts. (n order to recognize the differences among consumers in different
cultures and sub-cultures, mareters must be able to identify the values that define the
culture and their impact on consumer behaviour.
3elf - -oncept means the desire to attain self H consistency and the desire to enhance
ones self-esteem. #ttaining self-consistency means that individuals will act in
accordance with their concept of actual self. #ccording to the mareter actual self means
consumers purchases are influenced by the image they have of themselves. They buy
products that they perceive as similar to their self-concept. (deal selfs concept is related
to ones self-esteem. #ccording to the mareter, a person who is dissatisfied with one-self
will try and purchase products that could enhance their self-esteem. 5or example, a
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woman who is confident, efficient, modern may buy a different type of perfume or shop
at different stores than a woman who would lie to be more warm and attractive.
(t is not always that our self-image influences the products we choose but also the
products we choose fre4uently influence our self-image. The products purchased with
symbolic value say something about us and also what we feel about ourselves. =xtended
self in simple term means we are what we wear, we are what we use. This means it
emphasizes the interaction between individuals and the symbols of environment. This
shows that consumers buy products for their symbolic value in enhancing their self-
concept.
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0i,e style conce8t
Gifestyle is another factor, which influences consumer behaviour.
Gifestyle can be defined as patterns, in which people live and spend time and money. (t is
one of the most popular concepts in mareting for understanding consumer behaviour and
is more comprehensive and more useful than either personality or values. "areters try to
relate the product to lifestyle, often through advertising, to the everyday experiences of
the target maret.
Gifestyle can also be defined as a mode of living that is identified by how people spend
their time 0activities1, what they consider important in their environment 0interests1 and
what they thin of themselves and the world around them 0opinions1. This means lifestyle
reflects a persons activities, interests and opinions.
Consumer 8sychogra8hics
'sychographics is commonly nown as study of )lifestyle of consumers. (t plays an
important part in consumer behaviour and helps in the promotion of those products and
services which are related to items of personal care, fashion, automobiles, telephonic
services, etc. in a country lie (ndia where lifestyle differs widely from region to region,
the study of consumer psychographic is of great significance to the mareter. 3ay for
instance, what is demanded or lied in &engal may not be lied in "aharashtra.
'sychographic is the study of lifestyle of consumers based on their activities, interests
and opinions. The study of consumer psychographics helps to promote sales especially of
those products, which relates to personal comforts, personal care, fashion, etc.
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(n a country lie (ndia consumer psychographic is of great significance in developing
products and services, segmenting marets and promoting sales. 3ince the lifestyle
depends on large number of factors the research also uses demographic and both are
interdependent and tae the help of each other.
The psychographic research also taes the help of motivational research to find out why
people have particular lifestyle and with help of motivational research tries to change the
psychology of consumers and thus maes an effort to change their lifestyle which become
basis of action. The activities and interest of consumers help to develop products for
different segments and modify them according to the opinion of consumers surveyed. The
help of psychographic is also taen to change the opinion and conduct opinion surveys on
social, economic, political and cultural issues.
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+n,luence o, grou8 dynamics @ 8eer grou8s @ consumer re,erence grou8s
6roup dynamics means how individual form groups, and how one persons purchasing
influences the other individuals actions.
# )group may be defined as two or more people who interact to accomplish either
individual or mutual goals.
This means that there can be an intimate group lie two neighbours going out for
shopping, or a formal group lie housing association members who are more concerned
about schools, pars, etc. in their vicinity.
Consumer "elevant 2rou8s
The ,amily
(t is seen, that from childhood an individuals needs and consumption decisions are
influenced by his8her family. (mportance of family in various decisions is based on
fre4uency of contact that individual has with other family members.
1riendshi8 2rou8s
The immediate group, which an individual forms after he8she moves out from the house,
is friendship group. 5riendships are also sign of maturity and independence as they
represent a breaing away from the family and forming social ties with the outside world.
#fter family, friends most liely influence an individuals purchase decisions. 5riends
fulfill a wide range of needs lie they provide companionship, security and opportunity to
discuss the matter, which they cant with the family members.
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5riends opinions and preferences are very important for influencing an individuals
behaviour in determining the products or brands he8she actually selects.
1ormal &ocial 2rou8s
5ormal social groups, as the name says, lac intimate relationship and they serve different
function for an individual. 'erson *oins this group to fulfill goals lie maing new
friends, pursuing special interest, etc. This type of group interests mareters because
often consume products together, can discuss products or brand or stores informally with
other members and sometimes can even copy the consumption behaviour of other
members whom they admire.
-onsumer relevant group could be any person or any group that a consumer may as for
to help him 8 her buying a particular product. "any a times, consumers are confused in
buying some products. These products could be of same utility, same price, different
brand, etc. #t such times, consumer does not really now what to buy which brand to buy
and at what price to buy. 3o, here comes the need for consumer relevant groups.
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+n,luence o, social and economic classes
-onsumer behaviour is influenced by environment in which one lives. # number of
factors such as culture, social class, personal influences, family, religion and his situation
affect the decision process. #mongst them social class has great impact on consumer
behaviour.
3ocial class can be described as .divisions within society composed of individuals
sharing similar values, interest and behaviour./
Two-category social class scheme divides the society in two classes based on profession
or level of income i.e.
&lue collar 0worers1 and white collar 0office *obs1 understand the buying behaviour of
consumers, occupation of people is to be studied as people of same profession are
expected to behave in a similar manner. #ll chartered accountants, all lawyers, all
architects behave similarly. 2owever, they may not be having same outloo. 5or
example, the income of a lawyer varies between Js.;EEE per month to Js.7E lah per
month. # doctor may earn Js.%EE per day to Js.%EEEE per day. These income differences
mae big differences in their behaviour as a consumer.
Classi,ication o, social class
Occu8ation
To in one class mareter may not be able to get much advantage in mareting. Therefore
along with occupation there is further division based on income. 'ersons of some
occupation are therefore subdivided into various classes based on income.
,C
Education
The level of education also affects the behaviour as a consumer. #n illiterate man has no
interest in newspapersK boos and magazines but people with high education need these
products regularly. (n the matter of other products, consumption also differs widely,
therefore sometimes it is desirable to classify as per level of education.
+ncome
The income of an individual or family plays an important role in his behaviour as a
consumer. The demand of products for rich, high income, middle income, low income
and poor differs widely and therefore it is most important criteria for social classification.
&ut people even in same bracet behave differently based on many other factors such as
place of their residence 0urban, rural1 or even state. =ven people with same education,
occupation and income behave differently in different regions due to cultural factors,
climate, traditions, social customs, etc.
"eligion
Jeligion is another factor, which influences the behaviour, as a consumer too
consumption of certain products is tobacco in some religion but permitted in other
irrespective of other factors. :ains, &rahmins, #grawals generally will not eat meat but it
is openly consumed by many other classes. 3ihs will not consume tobacco and
cigarettes. +ot only in the matter of eating religion also affects consumption in other
ways. 'eople of different religion have different festivals when they are gee and happy
and buy new things for self, family and for gifting. These factors affect their behaviour as
a consumer and are very important for mareter.
7E
0i,e style o, various social classes
The life style that is consumer behaviour of various social classes differs widely. # person
in lowest class is able to buy only the bare minimum re4uirements of life. (n (ndia and
some other countries there are people living below the poverty line. This class is not able
to meet even basic minimum and live on the many of state and8or social organization for
their shelter, education of children and meeting their day-to-day re4uirements. $n the
other extreme there are rich people either because of historical factors lie zamindars and
the lie. &ut researchers have established that lifestyle of one social class in terms of
attitude towards lifeK activities, behaviour and beliefs tend to be similar. $n this basis
researchers segregate them in different classes.
The decision process of individuals, families and classes are influenced by a number of
factors such as culture, social class, personal influence, region, religion, level of income
and profession, etc. (n society there are divisions based on their values, interests and
behaviours and people of homogenous natures, values, culture, interest and religion often
are considered social class. &ut most of the mareters have measured social class on their
economic status, profession and income. They do not consider religion, region and other
social factors very important. &ut generally there is an agreement that .social classes are
very broad groupings of individuals which hold roughly similar status levels in the
society./
7%
+n,luence o, ,amily in decision=making
+ormally what one understands from family is husband, wife and their children living
with them in western civilization. &ut in (ndia the family is much more extended and
includes all those persons who are related by blood, marriage or adoption and reside
together but often does not include those who are residing but have close blood relations.
The role and functions of the family depends upon education, lifestyle, family income,
etc. The basic functions of family are economic well being of members, provide
emotional support, establish suitable life style for the family and ensure proper
socialization of family members, which includes consumer socialization.
Jegarding consumer decisions there are four types of parents namely authoritarian
parents, reflecting parents, democratic parents and permissive parents. The decision-
maing depends to a great extent on item to be purchased, its usage and the price.
7,
B'!E" BEH)*+O'"
Buyer behaviour model
2ow does a consumer mae a purchase decision? What are the factors that influence this
process? 2ow do these factors interact among themselves?
To explain in a very simple manner, say a boy feels thirsty. 2e wants a drin of water.
While grabbing a bottle of water, his eyes fall on the bottle of 'epsi. Will he pic the
'epsi? What made his mother stoc 'epsi at home? Was it meant for the id or was it
meant for the guests arriving at 9 p.m.
# large amount of wor has been done in the area of buyer behaviour. "odels have been
developed to explain the various factors that influence purchase behaviour.
)t the heart o, any buyer behaviour model is the buying 8rocess:
Need recognition
+n,ormation research
Evaluation o, alternatives
&election o, Brand and Outlet
77
Post=8urchase "eactions
The first stage refers to the need recognition. This is basically what the consumer wants.
What does the consumer needs? (n the earlier example in can be explained as the need for
4uenching thirst.
The second stage refers to the information search. This basically involves your networ,
your sources. This will include what all drins are available for 4uenching your thirst.
This will include water, soft drins, sherbets, etc.
The third stage refers to evaluation of alternatives. This will include all the alternatives
you have and which of them is most promising in terms of your needs.
The fourth stage refers to selection of &rand and $utlet. This is basically out of the
alternatives which brand have you selected to go in for and out of the various outlets
available, from where you are planning to buy your selected product. This also includes
buying the product.
The fifth or the last stage is the 'ost-purchase Jeactions. This basically includes your
reaction towards the product you purchased. This stage will show whether you are
satisfied with the product or not.
79
Ho- to 8redict buyer behaviour
This is a very important 4uestion for mareters and it has been the ob*ective of most
personality research. 'sychologists and other behavioural scientists have theorized that
personality characteristics should predict brand or store preference and other types of
buyers activity. We can classify them into two ma*or categories?
%. -onsumer innovativeness and their susceptibility to interpersonal influence.
,. -ognitive personality factors and interrelated consumption and possession traits.
Consumer innovativeness and their susce8tibility to inter8ersonal in,luence
There are various personality traits that have helped in differentiating between consumer
innovator and non-innovators.
-onsumer innovativeness means now receptive consumers are to new products 8 services
so that both consumers and mareters can be benefited from the right innovation. 5or
measuring the researchers have designed certain instruments because personality H trait
measure provides insights into the nature of consumers willingness to innovate.
!ogmatic persons are those who display rigidity towards the unfamiliar and toward
information that is contrary to their own established beliefs. -onsumers who are low in
dogmatism are more liely to prefer innovative products to established alternatives. (n
contrast, highly dogmatic consumers are more liely to choose established rather than
innovative product alternatives.
Dariety H novelty seeing are of many types? e<8loratory 8urchase behaviour 0brand
switchers for experiencing new brands1, vicarious e<8loration 0where the consumer
stores about the new information1, and use innovativeness i.e. where the consumer uses
already adopted product on a new or novel way.
7;
-onsumer researchers are also interested in nowing the traits of the consumers who are
liely to be responsive to the influence of others. #ccording to this theory, there are three
types of interpersonal influence?
+n,ormation in,luence Hthe tendency to accept information from others as
evidence about reality.
*alue H e<8ressive in,luence H the consumers desire to enhance their standing
with others by being similar to them.
'tilitarian in,luence H the consumers confirms with the wishes of others in order
to obtain a reward or avoid punishment.
Cognitive Personality ,actors and interrelated consum8tion and 8ossession
traits
(t is very interesting for the researchers to now how cognitive personality factors
influence various aspects of consumer behaviour. There are two types of cognitive
personality traits.
*isuali$er#s v@s verbali$ers H Disualizers are those who prefer visual information
and products that stress the visual and verbalizers are those who prefer written or
verbal information and products.
Need ,or Cognition >NC? H +eed for -ognition measures a persons craving for
or en*oyment of thining. (t is seen through research that consumers who are high
in +- are more liely to see that part of an ad first that is rich in product H related
information are unresponsive to the contractual or peripheral aspects of the ad,
such as the model or the situation in which the product is used.
7<
The failure of personality measures to predict consumer behaviour has given rise to new
approaches. 5irst, is to study the personality of brands rather than of people. 3econd is to
develop broader behavioural concepts that are liely to be better targets for maret
segmentation.
-onsumers not only ascribe personality traits to products or services, they also tend to
associate personality factors with specific colours. 5or example, yellow is associated with
.novelty/ and blac means .sophistication/. Therefore, wishing to create a sophisticated
personal or a premium image use labeling or pacaging that is primarily blac. (n some
cases, various or even brands are associated with a specific colour with personality - lie
connotations. 5or instance, -oco-cola is associated with red, which connotes excitement.
7>
.ecision=making
When one decides to buy a particular product it is an economic decision and expectations
play an important role. $ne expects best of performance, durability, and dependability
from a product or a service. =xpectancy can be defined as .a monetary belief concerning
the lielihood that a particular act will be followed by a particular outcome./ #ct is the
decision to buy a particular service or product and outcome is satisfaction or
dissatisfaction from use8consumption of purchased products or service. 5inally there are a
number of alternatives for each product or service. The consumer has to decide which one
should be bought. (n case of consumer non-durables choice is immense. &e it shampoo,
soap, wheat flour, cosmetics, garments or consumer durables lie car, refrigerator,
washing machine, T.D., computer or something else or services lie restaurant, finance,
doctor or others having long life, degree of involvement is high. (n case of short life
5"-6 the involvement is low and the degree of involvement is medium in case of items
which have medium life and have to be replaced after some time.
The degree of involvement depends upon the level of nowledge, information,
psychology, culture and social system for the same product in different settings. The
involvements are ego involvement, commitment, communication, involvement, purchase
importance and extent of information research.
The decision maing process is a process where by a buyer decides to purchase a
particular product out of various available alternatives. The buyer expects best of
performance, durability and dependability, which he evaluates from a product. The
process of selection and final selection is nown as buying decision maing.
7B
Consumer buyer behaviour segments 8roducts into ,our quadrants:
High involvement=think
This actually maes the consumer to thin before buying. 5or buying these
products the consumer has to do a bit of thining as the products are expensive
and can be bought once and not again and again. This will involve the economic
side. =xamples could be cars, T.D., camera, etc.
High involvement=,eel
5or buying products included in this category, the consumer has to actually feel
the importance or the need of the product. This will involve the psychological
side. =xamples could be baby food, cooing oil, special sin creams, etc.
0o- involvement=think
5or buying the products included in this category, a consumer does not have to
thin much. These products are needed in daily life. These products are
responsive i.e. you dont have an option, if you have to buy you will. =xamples
would be detergents, headache pills, engine oil, etc.
0o- involvement=,eel
These products are basically there to satisfy the needs and wants of a consumer.
5or buying these products, a consumer does not have to thin much. =xamples
included in this category would be ice creams, soft drins, etc.
7C
High versus 0o- +nvolvement Problem=&olving
2igh (nvolvement purchase occasions, re4uire extensive problem-solving.
(tems can be expensive.
2ave serious personal conse4uences.
Jeflect ones social image.
These occasions ty8ically involve:
=xtensive information search, identification and evaluation of alternatives.
-onsideration of several products attributes and brands.
The formation of attitudes.
Word-of-mouth. i.e. communication.
=.g. the purchase of an automobile or stereo system.
Gow (nvolvement purchase occasions, re4uire routine problem solving, typically involve
little information search or consideration of various brands, other than price. (tems may
be purchased fre4uently or out of habit, they usually dont involve any personal
conse4uences. They tend to be privately consumed. =.g. the purchase of soap or
toothpaste.
.ecision making 8rocess
# consumer can pass through a number of stages when maing a purchase decision. (n
some buying situations, the process moves very 4uicly, such as in the repeat purchasing
of a family brand of convenience product. 2owever, in other situations each stage of the
consumer buying process can be clearly observed.
9E
The stages that a consumer ty8ically 8asses through are as ,ollo-s:
)-areness
+nterest in 8roduct@service
Evaluation
Trial -hen allo-ed
"eAection@8urchase
Product evaluation
1inal ado8tion or reAection
No ,uture 8urchase
"e8eat 8urchase in case o, 1(C2
9%
The decision-maing process starts by awareness. This is whether you are aware about
the product or not. Tae the case of a shampoo. 5or instance there are hundreds of
shampoos available in the (ndian maret but unless the consumer is aware about its
performance, the brand is not considered. Fnless he nows about the availability of the
product 0in this case tae a shampoo1 of a particular brand, it will not enter into consumer
decision-maing. Therefore, it is the function of the mareter to mae the prospective
customers to now about a product i.e. consumer must be informed about its availability.
The next stage is your interest in the product. This can be there or can be developed only
if you very well now the utility of the product i.e. for what all purposes the product can
be used. 3ay if someone has to decide to buy a car, he must not restrict his choice to a
few well-nown brands, he must show interest in the new brands also. This is e4ually
applicable to any other product also. (f there are %E8%; shampoo brands in the maret all
of them should interest the customer, so that he may evaluate them.
=valuation in certain items can be done by the trial of the product. 5or instance, these
days most car producers allow trial run and one can evaluate the automobile by trial run.
(n case of certain consumer items lie shampoos, washing powders, etc. small pacets are
available. The consumer before maing the purchase decision can buy small pacs for
trial.
#fter trial or evaluation of its attributes the consumer may either purchase or re*ect the
product or the service. (f the consumer decides to purchase the product, he gets first hand
experience and the product can be evaluated once again. 5or example, if a consumer
purchases a shampoo and lies it, he will have repeat purchase. (n case of durables lie
refrigerator, T.D., etc. if one finds the product as per his expectationsK he will not only
adopt it but will recommend it to others as well. (f after the use the product is not found
satisfactory it will not only be re*ected but the experience will be narrated to others also.
9,
These stages can be clearly demonstrated in the ,ollo-ing e<am8le:
The consumer recognizes that they wish to mae a purchase, such as purchasing a
family vacation.
The consumer starts to search for information about potential holiday
destinations, availability of hotel accommodations, flight schedules, holiday
activity for the family, etc. This information may involve taling to friends and
family, obtaining holiday brochures, surfing the (nternet, etc.
The consumer evaluates the alternative vacation possibilities.
The consumer maes a final decision about which vacation alternative to
purchase.
The consumer purchases the vacation alternative. This may be in the form of
single purchase through a travel agent or may consist of several purchases such as
hotel accommodation, airline ticets, etc.
The consumer experiences the vacation. (f the consumer and his8her family are
satisfied with the vacation, they may decide to tae this vacation again or
recommend it to other family members or friends. (f the vacation experience has
been an unhappy one, then the negative aspects of the vacation may be related to
family and friends, discouraging them from maing the same purchases.
97
Purchase decisions ,or 1(C2
)lternative 3 )lternative 5
To purchase and consume ones To purchase new brand which
usual tried brand. is well nown.
To depend on same service provider To try another 3ervice
i.e. 2otel, !octor, 2ospital, -ourier provider who has reputation.
service, (nsurance -ompany
To purchase a new brand To purchase usual tried brand.
To purchase on sale brand +ot to purchase on sale brand.
To buy on discount sales +ot to buy on discount sales.
To buy national brand To buy store brand.
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Purchase decisions ,or Consumer .urables
)lternative 3 )lternative 5
&uy national brand with highest &uy cheap brand
maret share
&uy new innovative product &uy only well nown brand
&uy on the basis of -ompanys &uy new companys items
reputation
&uy international brands &uy domestic nown brands
9;
P'"CH)&E&
(ethods o, 8urchases
The method of purchase depends upon the product to be purchased and purchase
intentions. The purchases can be fully planned, partially planned or unplanned.
1ully 8lanned 8urchases
"ost of the purchases of consumer durables lie T.D., cars, refrigerators, cooing range
are fully planned. 3imilarly purchases of durables lie house property, insurance policy
are fully planned. They are normally purchased after proper evaluation of the product. (n
these cases consumer decides in advance what product model and what brand he will buy.
The author survey in !elhi suggests that CE percent of purchases of durables and
consumer durables are fully planned.
The next category of purchases is daily consumption items for which a list of products to
be purchased is decided before visiting a shop or a store i.e. shopping list is decided
before stepping out of the house. &ut very often the brand is decided at the shop after
looing aroundK only in few items the brand is also predetermined but the decision
sometimes is changed after visiting the shop8store on the recommendation of the
retailer8shop eeper or by seeing the product.
Partially 8lanned 8urchases
(n this category those items fall which consumer intents to buy but does not mae a
shopping list before visiting the store8shop. (n this group often the decision on the
4uantity to be purchased is decided by seeing the prices, the display of pacaging and the
mood of the consumer at the time of purchase. 5or instance, a consumer may decide
before visit to the shop that what items he wants to purchase lie soap, tea, wheat flour,
9<
vegetable oil but the 4uantity and the brand is decided at the store. (f consumer finds that
there are discounts or sales promotion schemes, he may decide to buy larger 4uantities
than otherwise intended.
'n8lanned 8urchases
Those purchases, which are made spontaneously without prior planning, are called
unplanned purchases. (n such items advertisements, display, discounts, sales promotion
schemes, free coupons, lottery gifts, etc. induce a consumer to purchase them when
otherwise he has no intention to buy. 2ome purchases from sales persons are largely of
this nature as well as certain purchases at the store. &ut study done in !elhi suggest that
only %E percent of purchases fall in this group.
Fnplanned purchases occur .when a consumer experiences a sudden, often powerful and
persistent urge to buy something immediately. The impulse to buy is hedonically complex
and may stimulate emotional conflict. #lso, impulse buying is prone to occur with
diminished regard to conse4uences/. 5or example, a person from 3outh (ndia visits !elhi
in !ecember8:anuary unaware of weather. When after arrival in !elhi he feels cold, he is
forced to buy a woollen *acet. # person from !elhi when visits Ierela in :uly8#ugust
without nowing that it rains heavily there all the time, he is forced to buy an umbrella or
a raincoat. This is also situational influence on purchase decision.
When one visits a store and sees that certain products are at BE percent discount or )one is
free with one or there is a scope of winning a lottery the consumer puts aside )shopping
list and purchases such a product, thining that it is bargain purchase and its advantage
must be taen. This is spontaneous purchase.
3ometimes one is influenced by sudden excitement and stimulation to purchase a product
suddenly. When one sees a store and finds a product, which he was urging to buy for,
long immediately buys it, thining that it may not be available when actually he will need
it.
9>
When one visits a fair, exhibition or mela almost %EE percent of purchases are unplanned.
'eople in (ndia visit many fairs and melas where they go with the intention to buy certain
goods but neither have they decided in advance their purchase baset nor they have
shopping list. (f they find something attractive to purchase either price wise, 4uality wise
or product wise or they see some new product purchases are made spontaneously without
any prior plan.
The un8lanned 8urchases can be under ,ollo-ing circumstances:
3pontaneous.
'ower compulsion and intensity to ac4uire a product.
=xcitement and stimulation.
3ituational influence.
'urchase in fairs, exhibitions.
The survey of buyers in !elhi suggests that only <E->E percent of purchases are planned,
,7-7E percent of purchases are partially planned and %E-,E percent of purchases are
unplanned.
9B
Process o, 8urchases
'urchases can be made in the following ways?
2ome shopping salesman, hawers.
!irect mail.
=-commerce8telemareting.
Disiting a shop or store or showroom.
Home sho88ing
There was a time when very high percentages of purchases were made through home
shopping. +ow in F3# and other developed countries the role of home shopping has very
much reduced and now does not account for more than %E percent of total purchases.
2owever, in (ndia such purchases are much higher of the total, especially in rural areas
where shops are few and on them all the products are not available. Therefore when a
hawer or a salesperson visits a house, he induces the consumer to purchase from him.
"any persons specially ladies purchase from them to save time and inconvenience to
visit the maret. (n order to help consumers to buy sitting at home now many suppliers of
food, drins, ice-creams, pizza are delivered at home. 3uch purchases are increasing day
by day and the share of home purchases in the recent years has gone up from %E percent
in %CCC to %; percent in ,EE% in !elhi as per the survey. &ut home purchases are of two
types of goods. $ne those which are branded and well nown and other in which brand
does not matter or where it is felt that it is a bargain purchase when sales person of well
nown companies mae door to door selling for sales promotion. (n rural areas home
purchases are also made of products, which are not available on the shop in villages.
9C
.irect mailing
(n =urope, F3# and :apan a significant purchases are made through direct mail. (n these
system manufacturers, distributors or mareter mails the catalogue to the consumers
giving certain basic details about the product, its price and mode of payment preferred by
the seller. 3ome customers in F3# get lots of such mails everyday. 3ome of the
consumers study them and place orders but some others discard such mail literature. (n
(ndia also some companies are mailing literature to the consumers directly or through
agencies. &ut most of the consumers do not have faith in such sales and *ust ignore them.
They are afraid that they may not be cheated with regard to the product or it may be
inferior or may not be dispatched at all. The theory of such mareting is that it eliminates
intermediaries and so consumers get products at cheaper price. &ut consumers buy them
through mail only if they are well nown brandsK in other cases one prefers to see the
product. Therefore this system of purchase is not popular in (ndia in spite of renewed
efforts by some companies but it is 4uite popular in F3#.
E=CommerceB Telemarketing
=-commerce is becoming increasingly popular round the globe. Telemareting is
gradually becoming popular. (n this type of sales the mareter gets telephone numbers of
liely consumers and tries to persuade them to buy the particular property, service or
product. (ts basic limitation is that most of the people in (ndia do not have telephones and
those who have telephones do not want to tal during office hoursK still insurance
companies and bans are trying in a big way.
"etail sho8 8urchases
Though exact figures are not available about purchases at retail shops or departmental
stores, it is estimated that in F3# CE percent of purchases are in stores. (n (ndia also the
purchases from shops may be almost same percentage or little lower because in (ndia
;E
home purchases are more. The retail shops may be traditional shops in the colony or in
the maret or there can be departmental stores. (n =urope, F3#, :apan, #ustralia, etc in
last few decades the importance of departmental stores in total sales is 4uite substantial.
(n (ndia also in metropolitan cities and in big towns gradually the role of such stores is
increasing specially after globalization, which are visited by upper income group people
or youngsters.
The motivation for shopping in marets and superstores is not *ust purchases. "any
ladies visit the maret for removal of boredom, passing time, recreation and sometimes
even for window shopping for increasing the nowledge about various products and
utilize it later on for actual purchases. (t is said that .shopping has almost become a way
of life itself for some/. This type of habit is declining in F3# and =urope because more
and more ladies tae to a *ob. &ut in (ndia ladies of big families who have little wor at
home, have a car at their disposal and shop only for pleasure. #long with shopping they
go to some eating-house specially )chat shop. There are many reasons for fre4uent
shopping such as loneliness, dispelling boredom or hunt shopping to buy something
which may be available cheap (.e. bargain purchases. &ut there is also a group of
consumers who feel boredom to go to a shop and prefer home shoppingK such consumers
are generally non-responsive to mareting efforts and visit the maret only when they are
forced to do so but their percentage in population is around %E percent of the total.
.iscount stores
There are certain stores who sell throughout the year at a discount. These stores mae
bul purchases generally from the manufacturers and thus get bul discount. They eep
only those items, which sell fast and thus streamline inventory management and save on
inventory cost.
These stores have low overhead cost, they do not have innovative shop displays and save
on spaceK they wor in small space and save on rent. These stores generally do not have
air condition shop, nor piped music or fancy light.
;%
These discount stores offer goods below the price charged by other shops and often
discount is %E-%; percent. (n !elhi =conomy store wors on this principle. These stores
appeal most to the middle class who are price conscious. (n !elhi 3uper &azaar, a
cooperative store wors on this principle. #ccording to recent studies such discount
stores are increasingly becoming popular and so more of them are coming up.
.irect "es8onse )dvertisement
The direct is stimulated most by television advertisement for specific products which
generally are not made available in the maret. They are innovative products. &esides
television advertisements for such purchases, ads are also given in magazines and
newspapers. This type of buying re4uires a confidence in the seller and therefore to create
confidence among many such stores advertise that if the product is not found satisfactory,
it can be returned after a wee or fortnight of use but cost of return has to be borne by the
buyer. This type of advertisement ahs helped in promoting sales, and )sy-shop is one of
the biggest sellers through television advertisement in (ndia. (n F3#, 2ome 3hopping
+etwor (nc. was the pioneer in selling through television advertisement.
;,
"esults o, 8urchases
Whatever process and method of purchase is adopted the ultimate ob*ective of a
consumer is to get a satisfaction from the use or consumption of a product, which may be
one or the other as shown below?
Outcome o, 8urchase
&ased on experience and results the consumer reconfirms his decision for the failure 0if
result matches expectations or are better than expectations1 but modifies his decision if he
is not satisfied. The post purchase evaluation by the consumers is important not only for
the consumers for future decisions but they are also e4ually important and valuable for
the mareter to maintain and expand its sales. There are four purchase results for the
consumer. They are?
1irstB he learns whether his perception about a product or service was right decision.
;7
Jesults match
=xpectation
Jesults are
better than
=xpectation
Jesults below
=xpectation
&econdlyB consumer ac4uires nowledge and information about the product or service,
which will help in future decision maing.
ThirdB he learns whether he is satisfied.
1ourthB about disposition of a product after it has been used.
The post purchase results are also very important for the mareter to help him to maintain
and expand his sales value. (f a consumer is satisfied with a product he may normally buy
same brand in future but in order to eep his products ahead of competitors, he is
re4uired to now the reactions of consumers. 2e has to find out why consumers are
satisfied. #nd if the consumers are satisfied more than their expectations the mareter has
to maintain his lead. #nd if the results are below expectations of consumers, he will not
buy the product second time.
(n all three circumstances the mareter has to mae strategy for future after nowing
consumers satisfaction and dissatisfaction level. There comes the need of maret
research.
Consumer res8onse to .issatis,action
When consumers are dissatisfied with a product or service, they may respond in one or
more of the following ways?
Tae no action.
!iscontinue purchasing the product or using a service.
-omplain to company.
-omplain to consumer court or other bodies setup for the purpose by the industry
8 trade associations or consumer associations.
=ngage in negative word of mouth communication to other consumers.
;9
C)&E &T'.!
"esearch (ethodology
34 Problem identi,ication
"aricos $b*ectives? .To determine the maret potential and the ways through
which sales of blister pac can be increased/.
"aret Jesearch 'roblem? .#wareness about parachute blister pac among the
consumers and identification of needs for blister pac purchase./

ObAectives
=xploring the maret of blister pac.
Which types of consumers are purchasing blister pacs?
What are the ey factors in buying decision of blister pac?
Whether there is maret potential or not for the blister pac?
What are the other substitutes consumers are using for blister pac?
Jole of retailers in promotion of blister pac.
54 Ty8e o, research
E<8loratory "esearch
The research wor was =xploratory in nature and was meant to provide the basic
information re4uired by research ob*ectives. (t is a preliminary study and findings can be
further consolidated after detailed conclusive study has been carried out. The ma*or
methods employed in research are survey and observation. The survey method was
followed. This method of obtaining information is based on the 4uestioning of the
;;
respondents. Typically, the 4uestioning is structured, meaning some standardization is
imposed on the data collection process.
)dvantages
The 4uestionnaire is simple to administer.
!ata obtained are reliable because the responses are limited to the alternatives
stated.
-oding analysis and interpretation of data are relatively simple.
.isadvantages
Jespondents may be unwilling or unable to provide the desired information.
Jespondent may not respond if the desired information is sensitive or personal.
Wording 4uestions properly is not easy.
64 &am8ling design 8rocess
Target 8o8ulation? The target population about which the inferences are to be
made is consumers of parachute blister pac

Po8ulation ,rame? Jetailers.
&am8ling ,rame? "umbai region
&am8ling technique? :udgmental sampling
&am8ling si$e? 5rom whole of "umbai, 7EE consumers and ;E retailers are
covered for which we have nearly contacted %EEE people.

;<

74 Tools used ,or research

Tools used for this research are 4uestionnaire and in-depth interview. # brief
4uestionnaire focused to collect the relevant information was prepared. The respondents
were ased to fill up this 4uestionnaire followed by in-depth interview. The data gathered
through these 4uestionnaires was analyzed using different statistical tools to *udge the
buyer behavior and ma*or influencing factors for the purchase of blister pac. 5or bac
up information and more in-depth loo data has been collected from retailers regarding
sale and promotional tools for blister pac.
94 Time ,or com8letion

The time taen to complete the maret survey was 9 wees. 7 wees for the consumers
and % wee for retailers.
;>
Pro,ile o, hair oil industry
Fnlie shampoos or hair colors, which are products relatively new to the (ndian psyche,
the usage of hair oil is a deeply ingrained habit with (ndian consumers. Therefore, this is
one product where the ma*or players do not have to fight either monetary or
psychological barriers to usage. &ut this does not necessarily mean that being a branded
player in the Js%, 7EE crore hair oils maret is easy.
2air oiling is an age-old traditional habit of (ndians. 2air oil is perceived to provide
benefits of nourishment, strengthening hair, faster and better growth and reducing the
problem of falling hair. 3ome consumers perceive that massaging hair oil has a cooling
impact on the head.
(t also has a cosmetic appeal in terms of hair styling, as hair remain straight, soft and
shining after applying oil.
-oconut oil is very popular in the south. (n north people use coconut oil as well as some
other oil such as rapeseed, sesame, etc.
2air oil is primarily used as a pre-wash nourisher. 3ome people also use hair oil after
bath as a conditioner.
&egmentation
(t is very important to segment the target maret before selling or mareting your
product. This will mae the *ob of the mareter easier and simpler, as he will be aware
and very clear as to what he has to actually do and decide the strategies thereby.
;B
The ma*or positioning platforms for hair oil are purity, hair nourishing and more recently,
non-greasy loo. -oconut oil and perfumed oil accounts for about <;L and 7;L of
maret in volume terms.
Consumer )-areness and Penetration
2air oil is an everyday habit with about ;EL of the population.
2air oiling, a peculiarly (ndian habit, is extremely popular in urban as well as rural (ndia.
'enetration of hair oil is B>L at all (ndia level and is almost evenly distributed in urban
and rural areas. While penetration in urban areas is marginally higher at CE.,L, the same
closely follows at B;.BL in rural areas. (n urban areas, penetration is higher in small
towns 0E.%-E.;m population1 at C%.BL compared to medium and large town where it is
BC.;-BC.CL. #wareness about hair oil is over CEL in rural as well as urban areas.
(arket si$e
The coconut hair oil maret is currently estimated at Js%9bn, <EL of which is sold in
branded form. The branded hair oil maret is estimated at >EEEE ton. The maret has
been growing at around 7-9L in volume terms and <->L pa in value terms. "aret
growth, although significantly lower than the shampoo maret, is impressive, as
penetration is already high. (n fact, this growth rate has been maintained with strong
mareting aggression by leading players in the segment.
2ro-th
There are several consumers who use coconut oil in cooing 0especially in the south1, and
conversely other edible oil classified as cooing medium 0for e.g. castor oil1 is used for
hair care also. Therefore, the actual size of the oil maret should be larger than what is
estimated on the basis of branded hair oils.
;C
!uring the last few years, several product variants, such as non-sticy hair oil, value
added hair oil, etc have become very popular. These variants are growing at a much faster
pace, compared to the pure coconut hair oil segment. The maret for these products is
estimated at Js9.,;bn and has been growing at ,E-,;L pa.
Organi$ation Pro,ile
History o, (arico
The history of "arico can be traced all the way bac to %B;>, when a young man Ian*i
"oorar*i, set up a modest trade in spices which, in time, grew to include other export
worthy commodities. This firmMs success gave birth to The &ombay $il (ndustries in
%C9B, set up to convert the traditional buying strengths of the firm in the commodities
areas, to value added manufactured products.
#t first &ombay $il was involved in copra trading besides crushing and refining of
vegetable oils. 6radually, the company established itself firmly as a mareter of branded
vegetable oils and later expanded into fatty acids, specialty chemicals and spice extracts.
(n %CB7, &ombay $il divisionalised its operations to create three &usinesses? a -onsumer
'roducts !ivisionK a 5atty acids and -hemicals !ivision and an $leoresins !ivision, also
called the 3pice =xtracts !ivision.
(n %CCE, &ombay $il again restructured itself to form several companies, each focusing
on a specialized area of business. (n #pril %CCE, the -onsumer 'roducts !ivision became
"arico.
The history of "arico can be traced all the way bac to %B;>, when a young man Ian*i
"oorar*i, set up a modest trade in spices which, in time, grew to include other export
worthy commodities. This firmMs success gave birth to The &ombay $il (ndustries in
%C9B, set up to convert the traditional buying strengths of the firm in the commodities
areas, to value added manufactured products
<E
)bout (arico
# leading (ndian group operating in?
-onsumer 'roducts.
#esthetic 3ervices.
6lobal #yurvedics business.
5inancial Near ,EE,-E7 Turnover O Js.>.>; billion 0F3! %<7 "illion1 %, brands and
extensions with leadership in respective categories are as follows?
'arachute, 3affola, 3weear, 2air P -are, 3hanti, "edier, "ealmaer, 3il, Jevive,
Iaya and 3undari.
The $verseas 3ales franchise of "aricoMs branded 5"-6 products is one of the largest
among the (ndian companies.
"aricoMs own manufacturing facilities are located at 6oa, Ian*iode, :algaon, 3aswad,
'ondicherry and !aman 3upported by subcontracting units.
(n &angladesh, "arico operates through "arico &angladesh Gimited, a wholly owned
subsidiary manufacturing facility at "oucha, near 6azipur.
<%
+nternational Business 2rou8 >+B2?
"aricos (nternational &usiness is one of the top three among the (ndian -onsumer
6oods companies. "arico reaches, more than fifteen countries in the "iddle =ast and the
#sian sub-continent. "aricos product offerings in the international marets include
'arachute -oconut $il, 'erfumed $ils, 2air -reams and edible oils.
+B2#s 8roduct o,,ering
The 8ort,olio com8rises:

'arachute -oconut $il
'arachute 6old - a hair oil
'arachute 2air -ream
'arachute &eliphool H a perfumed hair oil
'arachute Jose H a perfumed hair oil
'arachute 3hanti 2im Iesh Tel H a cooling hair oil
3affola and 3weear Jefined edible oils
<,

2eogra8hical "each
$ur products reach several countries in the "iddle =ast and the #sian sub-continent?

F#=, 3audi, $man, Qatar, &ahrain, Iuwait, Nemen, &angladesh, 'aistan, +epal,
&hutan, and 3ri Gana, F3, -anada, 3ingapore, "alaysia, #ustralia and #fghanistan.
)bout Parachute
<7
'arachute is premium edible grade oil, a maret leader in its category. 3ynonymous with
pure coconut oil in the maret, 'arachute is positioned on the platform of Dital
+ourishment today. 5rom a loosely available commodity to a path-breaing brand,
'arachute pioneered the switch from coconut oil sold in tins to plastic. 'arachute is also
available in pouch pacs, to service the rural sectors, increasing penetration. The
positioning of 'arachute has evolved over time. 5rom the initial stand of purity to that of
clarity to the R-oconut !reamM theme, with a new loo and logo, to todayMs positioning of
vital nourishment. The -oconut !ream logo is seen as an opportunity to transform
'arachute from being the largest coconut oil brand into a mega brand with several value
added products under the M-oconut 6oodnessM umbrella.
+nnovations in Parachute
To support its continuing endeavour to provide high 4uality 'arachute -oconut $il to its
consumers, "arico has been constantly innovating for this brand. 3ome of the examples
of innovation for 'arachute are?
5lip Top -ap for 'arachute bottles to enhance the safety and protect the purity of
'arachute.
=asy :ar of 'arachute to facilitate usage especially during winters.
'arachute "ini - a bottle shaped small pac being sold at an "J' of Je. %
'arachute blister pac.
These innovations have not only ensured protection of existing franchiseK they have
propelled further penetration, enabling conversion of loose oil consumers to pacaged
'arachute -oconut $il. (nnovation will continue to be at forefront in "aricoMs efforts to
strengthen this brand.
<9
Our consumers
'arachuteMs primary target has been women of all ages. The brand has a huge loyalty, not
only in the urban sections of (ndia but also the rural. 'arachute has several brand
extensions, each filling existing need gaps, ac4uired from consumer insight.
/uality
Quality is all about satisfying consumers. (t is not about profits or efficiencies but
eeping the consumer happy, so that he8she stays loyal. $ne of the basic re4uirements to
do this is to give the consumer a consistent product.

<;
.ata Collection and )nalysis
1requency o, hair oil a88lication
9%.7L respondents said that they apply hair oil daily. %<.>L says ,-7 times a wee and
%;.7L says they apply hair oil once a wee. The least number of people are in category of
less than once a month 07.7L1.
frequency of hair oil application
l
e
s
s

t
h
a
n

o
n
c
e

a

m
o
n
o
n
c
e

a

m
o
n
t
h
o
n
c
e

i
n

a

t
w
o

w
e
e
k
o
n
c
e

a

w
e
e
k
2
-
3

t
i
m
e
s

a

w
e
e
k
o
n
c
e

a

d
a
y
1
-
2

t
i
m
e
s

a

d
a
y
F
r
e
q
u
e
n
c
y
140
120
100
80
60
40
20
0
Conclusion
<<
2air oil is an every day habit with most of the people. Therefore a large chun of maret
consists of bul purchase lie tin or bottle. This signifies that maret for blister pac is
small and niche.
Purchase o, blister 8ack
frequency of hair oil application
l
e
s
s

t
h
a
n

o
n
c
e

a

m
o
n
o
n
c
e

a

m
o
n
t
h
o
n
c
e

i
n

a

t
w
o

w
e
e
k
o
n
c
e

a

w
e
e
k
2
-
3

t
i
m
e
s

a

w
e
e
k
o
n
c
e

a

d
a
y
1
-
2

t
i
m
e
s

a

d
a
y
C
o
u
n
t
0
40
30
20
10
0
how often do you !uy
"#eryday
2-3 days in a week
$nce a week
$nce in 2 weeks
$nce a month
$nly when tra#ellin%
&s and when needed
$thers ''''''''''''
<>

1irst came to kno- about blister 8ack
"aximum number of people came to now about &lister pac at the shop outlet. "ost of
the respondents in our research replied that they have never seen any advertisement of
parachute &lister pac on television or in any magazine. =ven the people those who have
responded that they first came to now about blister pac in magazine or radio or
television, where not sure that is it really the medium which they are replying is correct
or any other.
First came to know a!out (lister pack
)*+,
61*0,
)*3,
3*+,
*0,
6*0,
*3,
others
at the shop-outlet
tele#ision
hoardin%
radio
news papaer
ma%a.ine
<B
Conclusion
This clearly shows that the awareness of blister pac is very low and the awareness,
which is there, is by looing at the pacs in shop outlets.
Pack the customer is using other than the blister 8ack
;;L i.e. more than half of the people are using bottle other than blister pac, followed by
tin. # few number of people said they are using blister pac along with bottle or tin pac.
Geast number of people said they are using sachet. "ost of those using sachet earlier, said
they are now using blister pac due to less usage and as wastage of oil is less in blister
pac as compare to sachet. 'eople using bottle or tin said that they are using bottle for
regular purpose while blister pac for traveling or once in a while purpose.
<C
pack the customer is usin% other than !lister pack
11*3,
8*3,
11*+,
*0,
13*+,
!oth !otle and !list
!oth tin and !lister
sachet
!ottle
tin
Ho- o,ten customer buy blister 8ack
"aximum number of people are purchasing blister pac for traveling or as and when
need arises lie when the regular pac is over or for trial purpose etc. +umber of people
using blister pac everyday is least.
>E
how of ten customer !uy !lister pack
$
t
h
e
r
s

'
'
'
'
'
'
'
'
'
'
'
'
&
s

a
n
d

w
h
e
n

n
e
e
d
e
d
$
n
l
y

w
h
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n

t
r
a
#
e
l
l
i
n
%
$
n
c
e

a

m
o
n
t
h
$
n
c
e

i
n

2

w
e
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k
s
$
n
c
e

a

w
e
e
k
2
-
3

d
a
y
s

i
n

a

w
e
e
k
"
#
e
r
y
d
a
y
C
o
u
n
t
100
80
60
40
20
0
(n this graph S-axis shows the fre4uency of hair oil application, and the N-axis shows
purchase of blister pac.
The graph clearly shows that in the category of people applying hair oil regularly, the
purchase of blister pac is not regular and mainly on occasions of traveling purpose or as
and when needed. This strengthens our conclusion from the earlier chart that regular oil
users are not opting for blister pac for their general usage.
$ther than this we can se from the graph that people those who are purchasing blister
pac regularly are in the habit of using oil rarely or once in a month time.

>%

)88lication o, Blister Pack
>,

how many times you can apply blister pack * sex Crosstabulation
Count
40 34 +4
14 2) 1+4
32 4 36
+ 3 10
1 6
22) +1 300
once
twice
thrice
/here is not quantity
e#en for one time
$thers ''''''''''''
how many
times you
can apply
!lister pack
/otal
male female
se0
/otal
how many times you can apply !lister pack
$thers ''''''''''''
/here is not quantit
thrice
twice
once
C
o
u
n
t
160
140
120
100
80
60
40
20
0
se0
male
f emale
The table and accompanied graph shows that most mail says that 4uantity of hair oil
blister pac is sufficient to use twice, while the most number of female says they can
>7
apply hair oil out of blister pac only once. (n the category of thrice use the share of
female is almost nil.
Conclusion
This finding shows the usage habits of male and female. 5emales are in habit of using
more oil as compare to man due to long hair and loos consciousness. Therefore the
target maret of blister pac consists of less woman and more males.
#s depicted by the table and chart given below, maximum numbers of respondents are
using blister pac either for traveling for some other purpose but not for regular use.
>9
+early ,,L respondents said that they might purchase blister pac when there regular
pac is over but not for the regular use.

on which occasions you buy blister pack
103 34*3 34*3 34*3
6 21*+ 21*+ 6*0
12+ 42*3 42*3 )8*3
1*+ 1*+ 100*0
300 100*0 100*0
1hen tra#ellin%
1hen my re%ular pack
is o#er
&s and when 1 need it
$thers ''''''''''''
/otal
2alid
Frequency 3ercent 2alid 3ercent
Cumulati#e
3ercent

reason for !uyin% !lister pack
$thers ''''''''''''
&s and when 1 need i
1hen my re%ular pack
1hen tra#ellin%
F
r
e
q
u
e
n
c
y
140
120
100
80
60
40
20
0
Ho- to o8en blister 8ack
>;
"aximum numbers of respondents are opening blister pac by bending or cutting it.
#lthough most of the people said that they didnt faced any problem in opening the pac,
they were of idea that opening the pac can be made still easier and better
how will you open a !lister pack
any other way
!ite
!end
fold
pierce
cut
C
o
u
n
t
100
80
60
40
20
0
faced any pro!lem in
yes
no
&WOT )nalysis o, Blister Pack
><
(n any business, it is imperative that the business be its own worst critic. # 3W$T
analysis forces an ob*ective analysis of a companyMs position viz a viz its competitors and
the maretplace. 3imultaneously, an effective 3W$T analysis will help determine in
which areas a company is succeeding, allowing it to allocate resources in such a way as
to maintain any dominant positions it may have.
&trengths

Wide distributions networ reaching nearly %.7 million outlets.
+ear total dominance of the branded coconut hair oil maret, with its flagship
brand.
Top of mind brand recall in customers.
(mmense brand loyalty en*oyed by the brand.
Weaknesses
#lmost negligible promotion and low consumer awareness.
Jaw material prices of all ey products are susceptible to wide fluctuations and
can lead to earnings variability.
This pac is totally a niche product in nature and therefore cannot en*oy bul
sales.
O88ortunities
>>
The hair-oil maret is liely to grow at ;-<L pa. The value added hair-oil segment
will grow at a much faster pace of %;-,EL pa. Dolume growth will be driven by a
demand shift from unorganized sector 0BEL of maret1 to branded oils.
'roduct is mainly catering to the need of traveling segment, which is growing
fast.
The value-added hair oils maret is growing at a healthy 7E per cent per annum in
volumes. "arico can encourage consumers to shift to the value-added maret.
The growing consumer population offers a huge maret for consumer products. #t
an average 6!' growth of ;.;L until 5N,EE>, the present consumer population
of BE m households can grow by <EL to around %7E m households.
Threats
+early %,E loo alie local brands eating share of parachute.
Gow customer loyalty in case of small sachets and blister pacs.
1indings
>B
2air oil is a peculiar habit in (ndia. "ore than 9EL of people are in habit of
applying hair oil daily.
"aximum no. of people are using blister pacs for traveling purpose and not for
regular usage.
-onsumer awareness of blister pac is very low. "ost of the people came to now
about it at shop outlet.
(n our research we found that usage of blister pac or small size sachets is among
lower class that mainly comprises of labors and low-income group.
3tudents residing in hostels or out of home are using blister pac for their regular
use.
There is a direct relation we found in fre4uency of hair oil application and
purchase of blister pac, i.e. people using less hair oil comprises more of the
customers of blister pac.
Jegarding pacaging, customers response is very nice and most of the people
said that pacaging is excellent although we can still mae some improvements.
&lister pac is mainly used for traveling purpose for which it is facing
competition with hair gel and creams.
Conclusion
>C
"areting research is the systematic procedure of collection, recording and analysis of
data about problems related to the mareting of goods and services. (t is both a science
and an art. The essential purpose of mareting research is to provide information, which
will facilitate the identification of an opportunity or problem, and to assist managers in
arriving at the best possible decisions when such situation comes.
This pro*ect report on parachute blister pac has enriched my nowledge of mareting
research and "arico (ndustries limited.
5inally once again ( extend my sincere thans to all those who helped me in completing
this research wor. ( hope our recommendations will be worthwhile for all those who are
interested in it.
"ecommendations
BE
Jecommendations as based on the case are as per the four 's of mareting, i.e?
'roduct
'rice
'lace
'romotion
Product:
#s far as product is concerned there is not any necessity of changing the basic features of
product. 'arachute hair oil en*oys a great customer satisfaction and brand loyalty. $ur
suggestion is in relation to the pacaging. "ost of the customer feels that there should be
a cap at the top so that after using the oil from blister pac they can recap it, as it will
prevent oil wastage.
Price:

#s far as price is concerned we cant suggest anything better as it is already competitive.
Place:
#lthough distribution channel of "arico is among the best in corporate (ndia, during our
retail analysis we found that many of the retailers are not storing the blister pac.
-ompany needs to place blister pac on most of the stores and especially on pan-beedi
shops were the lower segment people comes more, who are the ma*or customers of blister
pac.
"any of the retailers are not storing blister pac and storing the local brands of
competitors in the same category. The ma*or reason posted by retailers is low margin in
B%
case of parachute blister pac. "any a retailers replied that they are getting margin *ust
double of parachute in other local brands. 5or more penetration of the pac in the maret
retailer margin needs to be increased.
Promotion:

'romotion is the most neglected area in case of blister pac. "ost of the respondents said
they have never seen an advertisement of blister pac on T.D. or any other medium also.
The respondents who are aware of blister of blister pac replied that they have seen it
first time on shop outlet. "arico needs to tae some promotional programme for blister
pac. $ther than television advertising, hoardings will be the best medium of promotion
for blister pac especially on railway stations.
To increase the retailer visibility -ompany should provide hangers or some sort of
dispensers to retailers in which they can eep blister pacs on shop counter or shelf near
to the visibility of customers. 'oint of purchase advertising lie glow sign boards,
gondolas will also be lot productive to increase awareness of blister pac.
#dvertising of blister pac should be done targeting the traveling segment, which is the
ma*or customer segment of blister pac.
B+B0+O2")PH!
B,
Web sites:
---4marketingteacher4com
---4bi$ed4ac4uk
---4ihec4net
---4busmgt4ulst4ac4uk
---4austrainer4com
---4maricoindia4com
Books:
'nderstanding Consumers C By (424Parames-aram4
Consumer Behaviour C By P4C4 Dain and (onica Bhatt4
Ne-s8a8ers:
The Times o, +ndia
The Economic Times
(id .ay
E
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