Buying Behaviour

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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 consumer’s demographics? Where does she stay? Which socio-economic class does she hail from? Who can influence her purchase behaviour? WHY? Why does she buy this product? This brand? What are her beliefs? What is her attitude towards this brand and the key competitors? What needs does this brand fulfill? WHEN? When does she buy the brand? Daily? Monthly? When does she use the brand? WHERE? Where does she buy the brand? Where else may she want to buy the brand? Where does she use the brand? At home? Outside?

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Consumer Buying Behaviour

Customer
Who’s running the organization? Customers!!! By Tom Peters It’s an old saying that customer is the ‘king’ 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 objectives set out by its stakeholders, its shareholders, its employees and others. But among the most important players in this game are the customers of the business. No business can be successful if it ignores the needs of its customers.

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Consumer Buying Behaviour

CONSUMER BEHAVIOUR
Meaning and definition
The study of consumer behaviour implies how and why a particular consumer or group reacts to decisions of producers. Consumer 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.” According 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 make decisions to spend their available resources (time, money, effort) on consumption related items. It 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.” Normally in consumer behaviour one studies the behaviour of consumers for consumption goods but in the study the behaviour of the buyer is also included. He may be user i.e. ultimate consumer or he may be buying for someone else. In a competitive environment, one cannot trust a product or a consumer. The producer has to produce what is demanded or what can be demanded. Study of consumer behaviour will help us to know what can be sold and what goods and services are likely to get rejected. In certain products like medicines one buys on the prescription of a physician which is also a part of consumer behaviour. In case of capital goods that is plant, equipment, machinery, buildings etc the decisions are often based on technical advise of others. In case of industrial raw materials the decision is influenced by supplier of equipment. Then there are purely consumer goods with short life and once they are used they extinguish. They are called Fast Moving Consumer Goods (FMCG). There are other consumer goods 3

Consumer Buying Behaviour which are durable like cars, refrigerators, electrical iron, juicer-mixer, etc but they basically consumer items with long life. There are also goods like clothes, which are not consumed in one go but are used for long. The behaviour of consumers for all these products is taken on different considerations than short-term consumer goods like fruits, juices, ice cream or milk. In short consumer behaviour implies study of behaviour of purchaser of all goods and services whether purely consumer goods, intermediate goods or capital goods. In other words it implies study of attitude of all consumers in disposing of their resources. Further it is not confined to final users but also include study of attitudes, of all those who take investment decisions whether they consume themselves or buy for others. It 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 advise/opinion. Consumer behaviour is an art and a science, economics, psychology, sociology. The study of consumer behaviour envelops all these and more. Be it a housewife buying a tube of tooth paste, an executive buying a tie, a school kid buying a pen or a multimillion dollar corporation buying heavy capital equipment, the process of buying is complex and, at times, intriguing. The consumer buying process is influenced by the consumer’s 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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Consumer Buying Behaviour

Understanding consumers for 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. Brand 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. If it is an established brand that is growing at a slow rate relative to the market, understanding consumers will help the brand to rejuvenate itself, with a new variant, or a new version. Just 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 know 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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Consumer Buying Behaviour Understanding consumers has to start and end with a series of questions:  Who are the consumers for the brand?  Why should they buy it?  When will they buy it?  Where will they buy it from?  How often will they buy it?  How 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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Consumer Buying Behaviour

Economics
Economic theory talks about the producers of goods and consumers of goods. A manufacturer makes 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. Economic theory states that lower the price, higher the demand. But since the manufacturer is trying to maximize his profits, the demand-supply situation arrives at an equilibrium position. The economic theory of consumption gets more interesting as the number of manufacturers increases and there is competition amongst them for the consumer’s wallet. Economic theory treats consumers as purely rational beings.

P R I C E DEMAND

QUANTITY

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Consumer Buying Behaviour

Buying behaviour
Consumer will buy whatever needed by him. But whatever he buys depends on some factors. The consumer buying is based on a particular behaviour, which if predicted helps the marketer to market his products thereby increasing the profits. This buying behaviour can be explained in the following manner:

Buying Behaviour

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Ability

*

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Opportunity
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Motivation

It is very important for marketers to understand consumer-buying behaviour because that is the only possibility to offer greater satisfaction for the consumer. Although there remains a certain amount of consumer dissatisfaction, the reason for this is that some marketers still are not consumer oriented and do not regard customer satisfaction as a primary objective. Another problem is that the tools for analyzing consumer behaviour are not very precise, so it is impossible for marketers to determine what is highly satisfying to buyers. If a marketer can identify consumer buyer behaviour, he or she will be in a better position to target products and services at them. Buyer behaviour is focused upon the needs of individuals, groups and organizations.

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Consumer Buying Behaviour

Buying decision
For some purchases, a consumer will spend very little time considering the purchase itself before making the decision to buy e.g. buying a roll of selotape. However, in other cases, consumers will ask the opinions of other people before making their purchase decision. Hence, marketers are always interested in learning which people are likely to influence the purchase decisions of a typical consumer in a target group. For example, if a member of your family is considering attending college, then it is unlikely that they will decide which college to attend without first discussing the matter with several people. The opinions of parents, siblings, friends, teachers, professional acquaintances, etc. will all have a certain degree of influence over the person’s final decision. Identifying the key ‘influencers’ is important. Companies may be able to target some forms of promotional activity at the influencers, so that they in turn will speak favourably about the company’s products/services to the actual purchaser or user.

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Consumer Buying Behaviour

POTENTIAL INFLUENCES ON CONSUMER BUYING BEHAVIOUR
Consumers are constantly being bombarded with marketing 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. Consumers do not retain much of this marketing information. However, when a promotional message is targeted to a specific group of consumers, it can prove very effective indeed. This is because the marketing message has been developed to appeal specifically to people in target group of consumers. Further more the marketing message will have been transmitted using promotional methods that these consumers have access to e.g. the Internet, T.V., etc. Before developing a marketing access, a company should first determine the likely 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. However there is dispute whether customer should be influenced or not and what methods should be applied to influence him. In certain cases wrong statements are made that may influence the buying behaviour. For 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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Consumer Buying Behaviour

The main factors that influence buying behaviour are as follows: 1. Economic factors:  Price  Income  Distribution of income  Competition with substitutes  Utility  Consumer preferences 2. Social factors:  Culture  Attitude of society  Social values  Life style  Personality  Size of family  Education  Health standards 3. Psychology It decides the personality, taste, attitudes of individuals or groups, lifestyle, preferences especially on occasions like marriage. The demonstration influence is also dependent upon psychology of an individual.

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Consumer Buying Behaviour

4. Anthropology and Geography Climate, region, history all affect consumer behaviour. In hot countries like India, certain products, which keep us cool like squashes, sarbats, are demanded, but they certainly have no demand in cold regions. The dress is also influenced by climate along with other factors. Culture is also influenced by climate. 5. Technology In case of equipments, whether for consumer use or industrial use, is affected by technological innovations and features. But it is not confined to durable goods only. Even in case of perishable goods the shelf life etc are determined by technological developments. Innovations and introduction of new products also depend upon technological change. 6. Situational influences Purchase task - who are you buying for? Social surroundings - who are you shopping with? Physical surroundings - where are you shopping? Temporal factors - how much time do you have to shop? Antecedent states What kind of mood are you in? Have you just been paid? Do you shop for status or self-gratification?

     • • • 7. Others

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Consumer Buying Behaviour This includes knowledge – technical or otherwise and information. Government decisions, laws, distribution policies have also big effect on consumer behaviour. All these factors are studied by consumer behaviour scientists and then they decide what production and marketing strategy should be adopted to develop a particular product, change the existing product and what pricing and marketing mix should be used to attract more customers towards the product or service to optimize sales and profits. MNC’s and few big companies have ignored except the consumer behaviour study in India. It is because till recently say upto the beginning of 90’s there was sellers market and anything could be sold. Therefore hardly any attention was paid to the consumer. For instance, Hindustan Motors continued to produce the same car for decades till Maruti appeared on the arena. But with the competition emerging many cars, refrigerators, TV’s and many items appeared on the scene. This resulted into the study of consumer behaviour.

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Consumer Buying Behaviour

Influence of attitudes on buying behaviour
Consumer characteristics like personality, lifestyles and attitudes, provide marketers with a fuller understanding of consumer behaviour than do demographics alone. To understand consumer attitudes, marketers need to know 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. Lifestyle is considered to be one of the most popular concepts in marketing as a way of understanding consumer behaviour. Attitudes, interests and opinions of consumers measure lifestyles.  Nature of consumer attitudes Marketers need to know what are consumer’s likes and dislikes. In simple explanation, these likes and dislikes are favourable or unfavourable attitudes. Attitudes can also be defined as “learned predispositions to respond to an object or class of objects 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. Attitudes help us understanding, why consumers do or do not buy a particular product from a certain store. They are used for judging the effectiveness of marketing activities, for evaluating marketing actions ever before they are implemented within the market place.

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Consumer Buying Behaviour

Three components of Attitudes: Brand beliefs, evaluations and intentions to buy define the three components of attitudes as shown below –

Brand Beliefs

Evaluations

Intentions

These are linked to the main three components of attitudes. Brand beliefs are the cogniting (thinking) component of attitudes, brand evaluations, the affecting component and intention to buy, the conative component. This linkage gives the high involvement hierarchy of effects, brand beliefs influence evaluation, which influence intention to buy. All these components are linked 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. For example, consumer does not want to shop from a particular store for a number of reasons. Intention measures do not reveal these reasons like convenient shopping hours. Therefore, reasons for consumers’ attitudes and intention can be known by measuring beliefs.

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Consumer Buying Behaviour

Family influences Family is an important influence on purchase decisions. Bonnet and Kassarjian say “Attitudes towards personal hygiene, preferences for food items etc. are acquired from parents.” Peer group influences Researchers say that peer groups are much more likely than advertising to influence attitudes and purchasing behaviour. Personality Personality also affects consumer’s attitudes. Traits such as aggression, extroversion, submissiveness or authoritarianism may influence attitudes toward brands and products. Information and experience According to learning theory, consumers past experiences influence their brand attitude and condition their future behaviour. It is seen that brand loyalty will quickly end if brand does not perform well. Therefore, information and experience also determines attitude. Role of Direct or Indirect experience Attitudes are formed as a result of direct contact with the object. Products that fail to perform as expected can easily lead to negative attitudes. Sometimes, even in absence of actual experience with an object one can form attitude. For example, many consumers have never driven Mercedes – Benz or spent a vacation in Switzerland, but then also form

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Consumer Buying Behaviour positive attitude for this. Similarly, the consumers can form an attitude by just seeing the ad that means, they can form the product attitudes. Attitudes 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.  Attitude -Toward the Ad models In today’s 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. Advertisers have paid a considerable attention in developing attitude – toward – the – ad – model. The consumers form various judgements and feelings as and when they are exposed to an ad. These judgements and feelings in turn affect the consumer’s attitude toward the ad and beliefs about the brand acquired from exposure to the ad. Finally, consumer’s attitude towards the ad and beliefs about the brand for his/her attitude the brand. The model says that to assess consumer’s attitude towards an ad it is important to distinguish between cognitive evaluations of the ad (i.e. whether it is informative or humorous) and affective responses toward the ad (i.e. feelings like sense of fear, or smile, or laughter, etc.) and also measures them separately. According to this model, researcher suggests that the feelings conveyed by an ad not only influence the attitude toward the ad but also affect the consumer’s evaluations of the brand and also the attitude towards the brand. However, if the gap appears after exposure of an ad (around one week) the positive effect of a liked ad an the attitude towards a

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Consumer Buying Behaviour brand may change. This usually happens when the purchase order is postponed or delayed by the consumer after an exposure of ad. Researchers say that both positive and negative feelings toward tend to exist side by side where both affect attitude uniquely. So, in this wide variety of feelings (both positive and negative) are to be assessed to study the influence of ad exposure. It is also seen and tested through research that the consumer’s attitude toward the ad for a novel product (new one) will have a stronger impact on brand attitude and purchase intention than for a familiar product. Researchers 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. So, in this research nature of attitude – object is used in assessing the potential impact of advertising exposure. It is observed that attitude towards a specific type of advertising (eg. comparative) may have some impact on the attitude toward a specific ad (eg. liking or disliking it). But attitudes toward ads in general seem to have little impact on the attitude toward a specific ad.  Can attitudes be changed? Formation of attitudes also explains how to change the attitudes but some other factors are involved. The research shows that – Exposure Merely, exposing a subject to stimulus (product/service etc) may be enough for the person to form positive attitudes towards the stimulus. Therefore in low involvement products like detergents, the most heavily advertised brands would become most familiar to the consumers, so most likely to be picked off the supermarket shelf.

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Consumer Buying Behaviour

Effective communication For changing the attitudes of consumers it is essential to treat the process of change as a form of information processing that is being subjected to persuasive communications. So, advertisers need to use persuasive communications in their advertisement. Cognitive dissonance According to this, all people strive to be consistent, if they hold two psychologically inconsistent beliefs / ideas / values / attitudes at the same time or if their behaviour contradicts these cognitions, they will find a way of reducing tension. At this moment, marketer 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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Consumer Buying Behaviour

Influence of personality on buying behaviour
Personality has many meanings. In consumer studies, personality is defined as consistent responses to environmental stimuli or we can also say patterns of behaviour that are consistent and enduring. An individual’s personality helps marketer to describe consumer segments as it provides for orderly and coherantly related experiences and behaviour. Personality characteristic may be a basis for product positioning. For example, one segment of the market may die because they want to stick to the group norms and therefore uses diet product. In contest another segment is on diet because of internal need. Therefore, company’s positioning strategies will be different for both. For the first segment, they will portray group approval as a result of product use, whereas positioning for the second segment would portray individual achievement. Marketers have used three personality theories to describe consumers: 1. Psychoanalytic theory or Freud’s theory. 2. Sociopsychological theory. 3. Trait theory.  Psychoanalytical theory This theory was given by Sigmund Freud. This theory stresses the unconscious nature of personality as a result of childhood conflicts. According to this theory, the human personality system consists of the id; ego, superego and conflicts are derived from these three components.

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Consumer Buying Behaviour Researchers who apply this theory to marketing believe that id and superego operate to create unconscious motives for purchasing certain products. Although consumers are primarily unaware of their true reasons for buying what they buy. Focus of marketers is on developing means to incomes these unconscious motives and applying psychoanalytical theory to marketing is known as motivational research.  Socio-psychological theory According to this theory, individual and society are interlinked. This theory disagrees with Freud’s contention. It is also called as Neo-Freudian theory. Researchers believe that social relationships are fundamental to the formation and development of personality. Karen Horney was a social theorist. She believed that personality is developed as an individual learns to cope with basic anxieties that stems up from parent – child relationships. She proposed that individuals could be classified into three personality groups: Complaint – Those individuals who moved toward others. They desire to be loved, wanted and appreciated. Aggressive – Those individuals who move against others. They desire to excel and win admiration. Detached – 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 quantitative approach. This theory states that an individual’s personality is composed of definite attributes called trait. A trait can be defined as any distinguishable, relatively

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Consumer Buying Behaviour enduring way in which one individual differs from another. For example, sociability relaxed style, amount of internal control. Trait theorists construct personality inventories and ask respondents to respond to many items by agreeing or disagreeing with certain statements or expressing likes or dislikes for certain situations or types of people. These items are then are statistically analyzed and reduced to a few personality dimensions. Single trait personality tests, which measure just 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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Consumer Buying Behaviour

Personal values (self concept or self images)
Why do some people make their consumption decisions differently than others? Personality can be one reason and another can be personal values. Personal values ask the question “Is this product for me?” These are particularly important in the needrecognition stage of consumer decision-making. Values are also used by consumers while evaluating brands, as “Is this brand for me?” Values are basically ‘ends’ people seek in their lives. Marketing often provides the ‘means’ to reach these ends. Values 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 End State of existence. Values are relatively stable but not completely static beliefs about what a person should do. Values are concerned with the goals and the ways of behaving to obtain goals. Values serve as the invisible outline for the development of many of the other components of the culture – the ideas, customs, traditions, myths, rituals, laws and material artifacts. In order to recognize the differences among consumers in different cultures and sub-cultures, marketers must be able to identify the values that define the culture and their impact on consumer behaviour. Self - Concept means the desire to attain self – consistency and the desire to enhance one’s self-esteem. Attaining self-consistency means that individuals will act in accordance with their concept of actual self. According to the marketer 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. Ideal self’s concept is related to one’s self-esteem. According to the marketer, a person who is dissatisfied with oneself will try and purchase products that could enhance their self-esteem. For example, a

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Consumer Buying Behaviour woman who is confident, efficient, modern may buy a different type of perfume or shop at different stores than a woman who would like to be more warm and attractive. It is not always that our self-image influences the products we choose but also the products we choose frequently influence our self-image. The products purchased with symbolic value say something about us and also what we feel about ourselves. Extended 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 selfconcept.

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Consumer Buying Behaviour

Life style concept
Lifestyle is another factor, which influences consumer behaviour. Lifestyle can be defined as patterns, in which people live and spend time and money. It is one of the most popular concepts in marketing for understanding consumer behaviour and is more comprehensive and more useful than either personality or values. Marketers try to relate the product to lifestyle, often through advertising, to the everyday experiences of the target market. Lifestyle can also be defined as a mode of living that is identified by how people spend their time (activities), what they consider important in their environment (interests) and what they think of themselves and the world around them (opinions). This means lifestyle reflects a person’s activities, interests and opinions. Consumer psychographics Psychographics is commonly known as study of ‘lifestyle’ of consumers. It 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 like India where lifestyle differs widely from region to region, the study of consumer psychographic is of great significance to the marketer. Say for instance, what is demanded or liked in Bengal may not be liked in Maharashtra. Psychographic 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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Consumer Buying Behaviour In a country like India consumer psychographic is of great significance in developing products and services, segmenting markets and promoting sales. Since the lifestyle depends on large number of factors the research also uses demographic and both are interdependent and take the help of each other. The psychographic research also takes 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 makes 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 taken to change the opinion and conduct opinion surveys on social, economic, political and cultural issues.

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Consumer Buying Behaviour

Influence of group dynamics / peer groups / consumer reference groups
Group dynamics means how individual form groups, and how one person’s purchasing influences the other individual’s actions. A ‘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 like two neighbours going out for shopping, or a formal group like housing association members who are more concerned about schools, parks, etc. in their vicinity. Consumer Relevant Groups The family It is seen, that from childhood an individual’s needs and consumption decisions are influenced by his/her family. Importance of family in various decisions is based on frequency of contact that individual has with other family members. Friendship Groups The immediate group, which an individual forms after he/she moves out from the house, is friendship group. Friendships are also sign of maturity and independence as they represent a breaking away from the family and forming social ties with the outside world. After family, friends most likely influence an individual’s purchase decisions. Friends fulfill a wide range of needs like they provide companionship, security and opportunity to discuss the matter, which they can’t with the family members.

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Consumer Buying Behaviour Friend’s opinions and preferences are very important for influencing an individual’s behaviour in determining the products or brands he/she actually selects. Formal Social Groups Formal social groups, as the name says, lack intimate relationship and they serve different function for an individual. Person joins this group to fulfill goals like making new friends, pursuing special interest, etc. This type of group interests marketers 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. Consumer relevant group could be any person or any group that a consumer may ask for to help him / her buying a particular product. Many a times, consumers are confused in buying some products. These products could be of same utility, same price, different brand, etc. At such times, consumer does not really know what to buy which brand to buy and at what price to buy. So, here comes the need for consumer relevant groups.

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Consumer Buying Behaviour

Influence of social and economic classes
Consumer behaviour is influenced by environment in which one lives. A number of factors such as culture, social class, personal influences, family, religion and his situation affect the decision process. Amongst them social class has great impact on consumer behaviour. Social 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. Blue collar (workers) and white collar (office jobs) 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. All chartered accountants, all lawyers, all architects behave similarly. However, they may not be having same outlook. For example, the income of a lawyer varies between Rs.5000 per month to Rs.30 lakh per month. A doctor may earn Rs.100 per day to Rs.10000 per day. These income differences make big differences in their behaviour as a consumer. Classification of social class Occupation To in one class marketer may not be able to get much advantage in marketing. Therefore along with occupation there is further division based on income. Persons of some occupation are therefore subdivided into various classes based on income.

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Consumer Buying Behaviour

Education The level of education also affects the behaviour as a consumer. An illiterate man has no interest in newspapers; books and magazines but people with high education need these products regularly. In the matter of other products, consumption also differs widely, therefore sometimes it is desirable to classify as per level of education. Income 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. But people even in same bracket behave differently based on many other factors such as place of their residence (urban, rural) or even state. Even people with same education, occupation and income behave differently in different regions due to cultural factors, climate, traditions, social customs, etc. Religion Religion 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. Jains, Brahmins, Agrawals generally will not eat meat but it is openly consumed by many other classes. Sikhs will not consume tobacco and cigarettes. Not only in the matter of eating religion also affects consumption in other ways. People 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 marketer.

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Consumer Buying Behaviour

Life style of various social classes The life style that is consumer behaviour of various social classes differs widely. A person in lowest class is able to buy only the bare minimum requirements of life. In India 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 and/or social organization for their shelter, education of children and meeting their day-to-day requirements. On the other extreme there are rich people either because of historical factors like zamindars and the like. But researchers have established that lifestyle of one social class in terms of attitude towards life; activities, behaviour and beliefs tend to be similar. On 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. In 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. But most of the marketers have measured social class on their economic status, profession and income. They do not consider religion, region and other social factors very important. But generally there is an agreement that “social classes are very broad groupings of individuals which hold roughly similar status levels in the society.”

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Consumer Buying Behaviour

Influence of family in decision-making
Normally what one understands from family is husband, wife and their children living with them in western civilization. But in India 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. Regarding consumer decisions there are four types of parents namely authoritarian parents, reflecting parents, democratic parents and permissive parents. The decisionmaking depends to a great extent on item to be purchased, its usage and the price.

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Consumer Buying Behaviour

BUYER BEHAVIOUR
Buyer behaviour model
How does a consumer make a purchase decision? What are the factors that influence this process? How do these factors interact among themselves? To explain in a very simple manner, say a boy feels thirsty. He wants a drink of water. While grabbing a bottle of water, his eyes fall on the bottle of Pepsi. Will he pick the Pepsi? What made his mother stock Pepsi at home? Was it meant for the kid or was it meant for the guests arriving at 4 p.m. A large amount of work has been done in the area of buyer behaviour. Models have been developed to explain the various factors that influence purchase behaviour. At the heart of any buyer behaviour model is the buying process: Need recognition

Information research

Evaluation of alternatives

Selection of Brand and Outlet

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Consumer Buying Behaviour Post-purchase Reactions The first stage refers to the need recognition. This is basically what the consumer wants. What does the consumer needs? In the earlier example in can be explained as the need for quenching thirst. The second stage refers to the information search. This basically involves your network, your sources. This will include what all drinks are available for quenching your thirst. This will include water, soft drinks, 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 Brand and Outlet. 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 Post-purchase Reactions. This basically includes your reaction towards the product you purchased. This stage will show whether you are satisfied with the product or not.

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Consumer Buying Behaviour

How to predict buyer behaviour
This is a very important question for marketers and it has been the objective of most personality research. Psychologists and other behavioural scientists have theorized that personality characteristics should predict brand or store preference and other types of buyer’s activity. We can classify them into two major categories: 1. Consumer innovativeness and their susceptibility to interpersonal influence. 2. Cognitive personality factors and interrelated consumption and possession traits.  Consumer innovativeness and their susceptibility to interpersonal influence There are various personality traits that have helped in differentiating between consumer innovator and non-innovators. Consumer innovativeness means now receptive consumers are to new products / services so that both consumers and marketers can be benefited from the right innovation. For measuring the researchers have designed certain instruments because personality – trait measure provides insights into the nature of consumer’s willingness to innovate. Dogmatic persons are those who display rigidity towards the unfamiliar and toward information that is contrary to their own established beliefs. Consumers who are low in dogmatism are more likely to prefer innovative products to established alternatives. In contrast, highly dogmatic consumers are more likely to choose established rather than innovative product alternatives. Variety – novelty seeking are of many types: exploratory purchase behaviour (brand switchers for experiencing new brands), vicarious exploration (where the consumer stores about the new information), and use innovativeness i.e. where the consumer uses already adopted product on a new or novel way.

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Consumer Buying Behaviour Consumer researchers are also interested in knowing the traits of the consumers who are likely to be responsive to the influence of others. According to this theory, there are three types of interpersonal influence: • • • Information influence –the tendency to accept information from others as evidence about reality. Value – expressive influence – the consumers desire to enhance their standing with others by being similar to them. Utilitarian influence – the consumers confirms with the wishes of others in order to obtain a reward or avoid punishment.  Cognitive Personality factors and interrelated consumption and possession traits It is very interesting for the researchers to know how cognitive personality factors influence various aspects of consumer behaviour. There are two types of cognitive personality traits. • Visualizer’s v/s verbalizers – Visualizers 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 for Cognition (NC) – Need for Cognition measures a persons craving for or enjoyment of thinking. It is seen through research that consumers who are high in NC are more likely to see that part of an ad first that is rich in product – 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.

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Consumer Buying Behaviour The failure of personality measures to predict consumer behaviour has given rise to new approaches. First, is to study the personality of brands rather than of people. Second is to develop broader behavioural concepts that are likely to be better targets for market segmentation. Consumers not only ascribe personality traits to products or services, they also tend to associate personality factors with specific colours. For example, yellow is associated with “novelty” and black means “sophistication”. Therefore, wishing to create a sophisticated personal or a premium image use labeling or packaging that is primarily black. In some cases, various or even brands are associated with a specific colour with personality - like connotations. For instance, Coco-cola is associated with red, which connotes excitement.

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Consumer Buying Behaviour

Decision-making
When one decides to buy a particular product it is an economic decision and expectations play an important role. One expects best of performance, durability, and dependability from a product or a service. Expectancy can be defined as “a monetary belief concerning the likelihood that a particular act will be followed by a particular outcome.” Act is the decision to buy a particular service or product and outcome is satisfaction or dissatisfaction from use/consumption of purchased products or service. Finally there are a number of alternatives for each product or service. The consumer has to decide which one should be bought. In case of consumer non-durables choice is immense. Be it shampoo, soap, wheat flour, cosmetics, garments or consumer durables like car, refrigerator, washing machine, T.V., computer or something else or services like restaurant, finance, doctor or others having long life, degree of involvement is high. In case of short life FMCG 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 knowledge, 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 making 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 known as buying decision making.

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Consumer Buying Behaviour Consumer buyer behaviour segments products into four quadrants:  High involvement-think This actually makes the consumer to think before buying. For buying these products the consumer has to do a bit of thinking as the products are expensive and can be bought once and not again and again. This will involve the economic side. Examples could be cars, T.V., camera, etc.  High involvement-feel For 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. Examples could be baby food, cooking oil, special skin creams, etc.  Low involvement-think For buying the products included in this category, a consumer does not have to think much. These products are needed in daily life. These products are responsive i.e. you don’t have an option, if you have to buy you will. Examples would be detergents, headache pills, engine oil, etc.  Low involvement-feel These products are basically there to satisfy the needs and wants of a consumer. For buying these products, a consumer does not have to think much. Examples included in this category would be ice creams, soft drinks, etc.

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Consumer Buying Behaviour High versus Low Involvement Problem-Solving  High Involvement purchase occasions, require extensive problem-solving.  Items can be expensive.  Have serious personal consequences.  Reflect one’s social image. These occasions typically involve:  Extensive information search, identification and evaluation of alternatives.  Consideration of several products attributes and brands.  The formation of attitudes.  Word-of-mouth. i.e. communication. E.g. the purchase of an automobile or stereo system. Low Involvement purchase occasions, require routine problem solving, typically involve little information search or consideration of various brands, other than price. Items may be purchased frequently or out of habit, they usually don’t involve any personal consequences. They tend to be privately consumed. E.g. the purchase of soap or toothpaste. Decision making process A consumer can pass through a number of stages when making a purchase decision. In some buying situations, the process moves very quickly, such as in the repeat purchasing of a family brand of convenience product. However, in other situations each stage of the consumer buying process can be clearly observed.

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Consumer Buying Behaviour

The stages that a consumer typically passes through are as follows: Awareness

Interest in product/service

Evaluation

Trial when allowed

Rejection/purchase

Product evaluation

Final adoption or rejection

No future purchase

Repeat purchase in case of FMCG

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Consumer Buying Behaviour

The decision-making process starts by awareness. This is whether you are aware about the product or not. Take the case of a shampoo. For instance there are hundreds of shampoos available in the Indian market but unless the consumer is aware about its performance, the brand is not considered. Unless he knows about the availability of the product (in this case take a shampoo) of a particular brand, it will not enter into consumer decision-making. Therefore, it is the function of the marketer to make the prospective customers to know 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 know the utility of the product i.e. for what all purposes the product can be used. Say if someone has to decide to buy a car, he must not restrict his choice to a few well-known brands, he must show interest in the new brands also. This is equally applicable to any other product also. If there are 10/15 shampoo brands in the market all of them should interest the customer, so that he may evaluate them. Evaluation in certain items can be done by the trial of the product. For instance, these days most car producers allow trial run and one can evaluate the automobile by trial run. In case of certain consumer items like shampoos, washing powders, etc. small packets are available. The consumer before making the purchase decision can buy small packs for trial. After trial or evaluation of its attributes the consumer may either purchase or reject the product or the service. If the consumer decides to purchase the product, he gets first hand experience and the product can be evaluated once again. For example, if a consumer purchases a shampoo and likes it, he will have repeat purchase. In case of durables like refrigerator, T.V., etc. if one finds the product as per his expectations; he will not only adopt it but will recommend it to others as well. If after the use the product is not found satisfactory it will not only be rejected but the experience will be narrated to others also.

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Consumer Buying Behaviour

These stages can be clearly demonstrated in the following example:  The consumer recognizes that they wish to make 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 talking to friends and family, obtaining holiday brochures, surfing the Internet, etc.  The consumer evaluates the alternative vacation possibilities.  The consumer makes 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 tickets, etc.  The consumer experiences the vacation. If the consumer and his/her family are satisfied with the vacation, they may decide to take this vacation again or recommend it to other family members or friends. If 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 making the same purchases.

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Consumer Buying Behaviour

Purchase decisions for FMCG Alternative 1 To purchase and consume one’s usual tried brand. To depend on same service provider i.e. Hotel, Doctor, Hospital, Courier service, Insurance Company To purchase a new brand To purchase on sale brand To buy on discount sales To buy national brand To purchase usual tried brand. Not to purchase on sale brand. Not to buy on discount sales. To buy store brand. Alternative 2 To purchase new brand which is well known. To try another Service provider who has reputation.

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Consumer Buying Behaviour

Purchase decisions for Consumer Durables Alternative 1 Buy national brand with highest market share Buy new innovative product Buy on the basis of Company’s reputation Buy international brands Buy domestic known brands Buy only well known brand Buy new company’s items Alternative 2 Buy cheap brand

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Consumer Buying Behaviour

PURCHASES
Methods of purchases
The method of purchase depends upon the product to be purchased and purchase intentions. The purchases can be fully planned, partially planned or unplanned. Fully planned purchases Most of the purchases of consumer durables like T.V., cars, refrigerators, cooking range are fully planned. Similarly purchases of durables like house property, insurance policy are fully planned. They are normally purchased after proper evaluation of the product. In these cases consumer decides in advance what product model and what brand he will buy. The author survey in Delhi suggests that 90 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. But very often the brand is decided at the shop after looking around; only in few items the brand is also predetermined but the decision sometimes is changed after visiting the shop/store on the recommendation of the retailer/shop keeper or by seeing the product. Partially planned purchases In this category those items fall which consumer intents to buy but does not make a shopping list before visiting the store/shop. In this group often the decision on the quantity to be purchased is decided by seeing the prices, the display of packaging and the mood of the consumer at the time of purchase. For instance, a consumer may decide before visit to the shop that what items he wants to purchase like soap, tea, wheat flour, 46

Consumer Buying Behaviour vegetable oil but the quantity and the brand is decided at the store. If consumer finds that there are discounts or sales promotion schemes, he may decide to buy larger quantities than otherwise intended. Unplanned purchases Those purchases, which are made spontaneously without prior planning, are called unplanned purchases. In 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. Home purchases from sales persons are largely of this nature as well as certain purchases at the store. But study done in Delhi suggest that only 10 percent of purchases fall in this group. Unplanned 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. Also, impulse buying is prone to occur with diminished regard to consequences”. For example, a person from South India visits Delhi in December/January unaware of weather. When after arrival in Delhi he feels cold, he is forced to buy a woollen jacket. A person from Delhi when visits Kerela in July/August without knowing 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 80 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, thinking that it is bargain purchase and its advantage must be taken. This is spontaneous purchase. Sometimes 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, thinking that it may not be available when actually he will need it.

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Consumer Buying Behaviour

When one visits a fair, exhibition or mela almost 100 percent of purchases are unplanned. People in India visit many fairs and melas where they go with the intention to buy certain goods but neither have they decided in advance their purchase basket nor they have shopping list. If they find something attractive to purchase either price wise, quality wise or product wise or they see some new product purchases are made spontaneously without any prior plan. The unplanned purchases can be under following circumstances:  Spontaneous.  Power compulsion and intensity to acquire a product.  Excitement and stimulation.  Situational influence.  Purchase in fairs, exhibitions. The survey of buyers in Delhi suggests that only 60-70 percent of purchases are planned, 23-30 percent of purchases are partially planned and 10-20 percent of purchases are unplanned.

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Consumer Buying Behaviour

Process of purchases
 Purchases can be made in the following ways:  Home shopping salesman, hawkers.  Direct mail.  E-commerce/telemarketing.  Visiting a shop or store or showroom. Home shopping There was a time when very high percentages of purchases were made through home shopping. Now in USA and other developed countries the role of home shopping has very much reduced and now does not account for more than 10 percent of total purchases. However, in India 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 hawker or a salesperson visits a house, he induces the consumer to purchase from him. Many persons specially ladies purchase from them to save time and inconvenience to visit the market. In order to help consumers to buy sitting at home now many suppliers of food, drinks, ice-creams, pizza are delivered at home. Such purchases are increasing day by day and the share of home purchases in the recent years has gone up from 10 percent in 1999 to 15 percent in 2001 in Delhi as per the survey. But home purchases are of two types of goods. One those which are branded and well known and other in which brand does not matter or where it is felt that it is a bargain purchase when sales person of well known companies make door to door selling for sales promotion. In rural areas home purchases are also made of products, which are not available on the shop in villages.

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Consumer Buying Behaviour

Direct mailing In Europe, USA and Japan a significant purchases are made through direct mail. In these system manufacturers, distributors or marketer mails the catalogue to the consumers giving certain basic details about the product, its price and mode of payment preferred by the seller. Some customers in USA get lots of such mails everyday. Some of the consumers study them and place orders but some others discard such mail literature. In India also some companies are mailing literature to the consumers directly or through agencies. But most of the consumers do not have faith in such sales and just 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 marketing is that it eliminates intermediaries and so consumers get products at cheaper price. But consumers buy them through mail only if they are well known brands; in other cases one prefers to see the product. Therefore this system of purchase is not popular in India in spite of renewed efforts by some companies but it is quite popular in USA. E-Commerce, Telemarketing E-commerce is becoming increasingly popular round the globe. Telemarketing is gradually becoming popular. In this type of sales the marketer gets telephone numbers of likely consumers and tries to persuade them to buy the particular property, service or product. Its basic limitation is that most of the people in India do not have telephones and those who have telephones do not want to talk during office hours; still insurance companies and banks are trying in a big way. Retail shop purchases Though exact figures are not available about purchases at retail shops or departmental stores, it is estimated that in USA 90 percent of purchases are in stores. In India also the purchases from shops may be almost same percentage or little lower because in India

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Consumer Buying Behaviour home purchases are more. The retail shops may be traditional shops in the colony or in the market or there can be departmental stores. In Europe, USA, Japan, Australia, etc in last few decades the importance of departmental stores in total sales is quite substantial. In India 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 markets and superstores is not just purchases. Many ladies visit the market for removal of boredom, passing time, recreation and sometimes even for window shopping for increasing the knowledge about various products and utilize it later on for actual purchases. It is said that “shopping has almost become a way of life itself for some”. This type of habit is declining in USA and Europe because more and more ladies take to a job. But in India ladies of big families who have little work at home, have a car at their disposal and shop only for pleasure. Along with shopping they go to some eating-house specially ‘chat’ shop. There are many reasons for frequent shopping such as loneliness, dispelling boredom or hunt shopping to buy something which may be available cheap I.e. bargain purchases. But there is also a group of consumers who feel boredom to go to a shop and prefer home shopping; such consumers are generally non-responsive to marketing efforts and visit the market only when they are forced to do so but their percentage in population is around 10 percent of the total. Discount stores There are certain stores who sell throughout the year at a discount. These stores make bulk purchases generally from the manufacturers and thus get bulk discount. They keep 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 space; they work in small space and save on rent. These stores generally do not have air condition shop, nor piped music or fancy light.

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Consumer Buying Behaviour These discount stores offer goods below the price charged by other shops and often discount is 10-15 percent. In Delhi Economy store works on this principle. These stores appeal most to the middle class who are price conscious. In Delhi Super Bazaar, a cooperative store works on this principle. According to recent studies such discount stores are increasingly becoming popular and so more of them are coming up. Direct Response Advertisement The direct is stimulated most by television advertisement for specific products which generally are not made available in the market. They are innovative products. Besides television advertisements for such purchases, ads are also given in magazines and newspapers. This type of buying requires 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 week 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 ‘sky-shop’ is one of the biggest sellers through television advertisement in India. In USA, Home Shopping Network Inc. was the pioneer in selling through television advertisement.

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Consumer Buying Behaviour

Results of purchases
Whatever process and method of purchase is adopted the ultimate objective 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 of purchase

Results match Expectation

Results are better than Expectation Results below Expectation

Based on experience and results the consumer reconfirms his decision for the failure (if result matches expectations or are better than expectations) 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 equally important and valuable for the marketer to maintain and expand its sales. There are four purchase results for the consumer. They are: First, he learns whether his perception about a product or service was right decision.

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Consumer Buying Behaviour Secondly, consumer acquires knowledge and information about the product or service, which will help in future decision making. Third, he learns whether he is satisfied. Fourth, about disposition of a product after it has been used. The post purchase results are also very important for the marketer to help him to maintain and expand his sales value. If a consumer is satisfied with a product he may normally buy same brand in future but in order to keep his products ahead of competitors, he is required to know the reactions of consumers. He has to find out why consumers are satisfied. And if the consumers are satisfied more than their expectations the marketer has to maintain his lead. And if the results are below expectations of consumers, he will not buy the product second time. In all three circumstances the marketer has to make strategy for future after knowing consumers satisfaction and dissatisfaction level. There comes the need of market research. Consumer response to Dissatisfaction When consumers are dissatisfied with a product or service, they may respond in one or more of the following ways:  Take no action.  Discontinue purchasing the product or using a service.  Complain to company.  Complain to consumer court or other bodies’ setup for the purpose by the industry / trade associations or consumer associations.  Engage in negative word of mouth communication to other consumers.

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Consumer Buying Behaviour

CASE STUDY
Research Methodology
1. Problem identification  Marico’s Objectives: “To determine the market potential and the ways through which sales of blister pack can be increased”.  Market Research Problem: “Awareness about parachute blister pack among the consumers and identification of needs for blister pack purchase.” Objectives  Exploring the market of blister pack.  Which types of consumers are purchasing blister packs?  What are the key factors in buying decision of blister pack?  Whether there is market potential or not for the blister pack?  What are the other substitutes consumers are using for blister pack?  Role of retailers in promotion of blister pack. 2. Type of research Exploratory Research The research work was Exploratory in nature and was meant to provide the basic information required by research objectives. It is a preliminary study and findings can be further consolidated after detailed conclusive study has been carried out. The major methods employed in research are survey and observation. The survey method was followed. This method of obtaining information is based on the questioning of the

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Consumer Buying Behaviour respondents. Typically, the questioning is structured, meaning some standardization is imposed on the data collection process. Advantages  The questionnaire is simple to administer.  Data obtained are reliable because the responses are limited to the alternatives stated.  Coding analysis and interpretation of data are relatively simple. Disadvantages  Respondents may be unwilling or unable to provide the desired information.  Respondent may not respond if the desired information is sensitive or personal.  Wording questions properly is not easy. 3. Sampling design process  Target population: The target population about which the inferences are to be made is consumers of parachute blister pack  Population frame: Retailers.  Sampling frame: Mumbai region  Sampling technique: Judgmental sampling  Sampling size: From whole of Mumbai, 300 consumers and 50 retailers are covered for which we have nearly contacted 1000 people.

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Consumer Buying Behaviour

4. Tools used for research Tools used for this research are questionnaire and in-depth interview. A brief questionnaire focused to collect the relevant information was prepared. The respondents were asked to fill up this questionnaire followed by in-depth interview. The data gathered through these questionnaires was analyzed using different statistical tools to judge the buyer behavior and major influencing factors for the purchase of blister pack. For back up information and more in-depth look data has been collected from retailers regarding sale and promotional tools for blister pack. 5. Time for completion The time taken to complete the market survey was 4 weeks. 3 weeks for the consumers and 1 week for retailers.

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Consumer Buying Behaviour

Profile of hair oil industry
Unlike shampoos or hair colors, which are products relatively new to the Indian psyche, the usage of hair oil is a deeply ingrained habit with Indian consumers. Therefore, this is one product where the major players do not have to fight either monetary or psychological barriers to usage. But this does not necessarily mean that being a branded player in the Rs1, 300 crore hair oils market is easy. Hair oiling is an age-old traditional habit of Indians. Hair oil is perceived to provide benefits of nourishment, strengthening hair, faster and better growth and reducing the problem of falling hair. Some consumers perceive that massaging hair oil has a cooling impact on the head. It also has a cosmetic appeal in terms of hair styling, as hair remain straight, soft and shining after applying oil. Coconut oil is very popular in the south. In north people use coconut oil as well as some other oil such as rapeseed, sesame, etc. Hair oil is primarily used as a pre-wash nourisher. Some people also use hair oil after bath as a conditioner. Segmentation It is very important to segment the target market before selling or marketing your product. This will make the job of the marketer easier and simpler, as he will be aware and very clear as to what he has to actually do and decide the strategies thereby.

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Consumer Buying Behaviour The major positioning platforms for hair oil are purity, hair nourishing and more recently, non-greasy look. Coconut oil and perfumed oil accounts for about 65% and 35% of market in volume terms. Consumer Awareness and Penetration Hair oil is an everyday habit with about 50% of the population. Hair oiling, a peculiarly Indian habit, is extremely popular in urban as well as rural India. Penetration of hair oil is 87% at all India level and is almost evenly distributed in urban and rural areas. While penetration in urban areas is marginally higher at 90.2%, the same closely follows at 85.8% in rural areas. In urban areas, penetration is higher in small towns (0.1-0.5m population) at 91.8% compared to medium and large town where it is 89.5-89.9%. Awareness about hair oil is over 90% in rural as well as urban areas. Market size The coconut hair oil market is currently estimated at Rs14bn, 60% of which is sold in branded form. The branded hair oil market is estimated at 70000 ton. The market has been growing at around 3-4% in volume terms and 6-7% pa in value terms. Market growth, although significantly lower than the shampoo market, is impressive, as penetration is already high. In fact, this growth rate has been maintained with strong marketing aggression by leading players in the segment. Growth There are several consumers who use coconut oil in cooking (especially in the south), and conversely other edible oil classified as cooking medium (for e.g. castor oil) is used for hair care also. Therefore, the actual size of the oil market should be larger than what is estimated on the basis of branded hair oils.

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Consumer Buying Behaviour During the last few years, several product variants, such as non-sticky 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 market for these products is estimated at Rs4.25bn and has been growing at 20-25% pa.

Organization Profile
History of Marico The history of Marico can be traced all the way back to 1857, when a young man Kanji Moorarji, set up a modest trade in spices which, in time, grew to include other export worthy commodities. This firm's success gave birth to The Bombay Oil Industries in 1948, set up to convert the traditional buying strengths of the firm in the commodities areas, to value added manufactured products. At first Bombay Oil was involved in copra trading besides crushing and refining of vegetable oils. Gradually, the company established itself firmly as a marketer of branded vegetable oils and later expanded into fatty acids, specialty chemicals and spice extracts. In 1983, Bombay Oil divisionalised its operations to create three Businesses: a Consumer Products Division; a Fatty acids and Chemicals Division and an Oleoresins Division, also called the Spice Extracts Division. In 1990, Bombay Oil again restructured itself to form several companies, each focusing on a specialized area of business. In April 1990, the Consumer Products Division became Marico. The history of Marico can be traced all the way back to 1857, when a young man Kanji Moorarji, set up a modest trade in spices which, in time, grew to include other export worthy commodities. This firm's success gave birth to The Bombay Oil Industries in 1948, set up to convert the traditional buying strengths of the firm in the commodities areas, to value added manufactured products

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Consumer Buying Behaviour

About Marico A leading Indian group operating in:  Consumer Products.  Aesthetic Services.  Global Ayurvedics business. Financial Year 2002-03 Turnover ~ Rs.7.75 billion (USD 163 Million) 12 brands and extensions with leadership in respective categories are as follows: Parachute, Saffola, Sweekar, Hair & Care, Shanti, Mediker, Mealmaker, Sil, Revive, Kaya and Sundari. The Overseas Sales franchise of Marico's branded FMCG products is one of the largest among the Indian companies. Marico's own manufacturing facilities are located at Goa, Kanjikode, Jalgaon, Saswad, Pondicherry and Daman Supported by subcontracting units. In Bangladesh, Marico operates through Marico Bangladesh Limited, a wholly owned subsidiary manufacturing facility at Mouchak, near Gazipur.

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Consumer Buying Behaviour

International Business Group (IBG)

Marico’s International Business is one of the top three among the Indian Consumer Goods companies. Marico reaches, more than fifteen countries in the Middle East and the Asian sub-continent. Marico’s product offerings in the international markets include Parachute Coconut Oil, Perfumed Oils, Hair Creams and edible oils. IBG’s product offering The portfolio comprises:  Parachute Coconut Oil  Parachute Gold - a hair oil  Parachute Hair Cream  Parachute Beliphool – a perfumed hair oil  Parachute Rose – a perfumed hair oil  Parachute Shanti Him Kesh Tel – a cooling hair oil  Saffola and Sweekar Refined edible oils

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Consumer Buying Behaviour

Geographical Reach Our products reach several countries in the Middle East and the Asian sub-continent: UAE, Saudi, Oman, Qatar, Bahrain, Kuwait, Yemen, Bangladesh, Pakistan, Nepal, Bhutan, and Sri Lanka, US, Canada, Singapore, Malaysia, Australia and Afghanistan. About Parachute

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Consumer Buying Behaviour

Parachute is premium edible grade oil, a market leader in its category. Synonymous with pure coconut oil in the market, Parachute is positioned on the platform of Vital Nourishment today. From a loosely available commodity to a path-breaking brand, Parachute pioneered the switch from coconut oil sold in tins to plastic. Parachute is also available in pouch packs, to service the rural sectors, increasing penetration. The positioning of Parachute has evolved over time. From the initial stand of purity to that of clarity to the `Coconut Dream' theme, with a new look and logo, to today's positioning of vital nourishment. The Coconut Dream logo is seen as an opportunity to transform Parachute from being the largest coconut oil brand into a mega brand with several value added products under the 'Coconut Goodness' umbrella. Innovations in Parachute To support its continuing endeavour to provide high quality Parachute Coconut Oil to its consumers, Marico has been constantly innovating for this brand. Some of the examples of innovation for Parachute are:  Flip Top Cap for Parachute bottles to enhance the safety and protect the purity of Parachute.  Easy Jar of Parachute to facilitate usage especially during winters.  Parachute Mini - a bottle shaped small pack being sold at an MRP of Re. 1  Parachute blister pack. These innovations have not only ensured protection of existing franchise; they have propelled further penetration, enabling conversion of loose oil consumers to packaged Parachute Coconut Oil. Innovation will continue to be at forefront in Marico's efforts to strengthen this brand.

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Consumer Buying Behaviour

Our consumers Parachute's primary target has been women of all ages. The brand has a huge loyalty, not only in the urban sections of India but also the rural. Parachute has several brand extensions, each filling existing need gaps, acquired from consumer insight. Quality Quality is all about satisfying consumers. It is not about profits or efficiencies but keeping the consumer happy, so that he/she stays loyal. One of the basic requirements to do this is to give the consumer a consistent product.

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Consumer Buying Behaviour

Data Collection and Analysis
Frequency of hair oil application 41.3% respondents said that they apply hair oil daily. 16.7% says 2-3 times a week and 15.3% says they apply hair oil once a week. The least number of people are in category of less than once a month (3.3%).

frequency of hair oil application
140 120 100 80 60

Frequency

40 20 0
2 1es tim ce on a y da 3 2es tim ce on a ek we ce on in a o tw ce on a th on m s les an th ce on

a y da

a ek we

k ee w

a on m

Conclusion

66

Consumer Buying Behaviour

Hair oil is an every day habit with most of the people. Therefore a large chunk of market consists of bulk purchase like tin or bottle. This signifies that market for blister pack is small and niche. Purchase of blister pack

h o w o fte n d o y o u b u y
50 E ve ryd a y 2 -3 d a ys in a w e e k 40 O n ce a w e e k 30 O n ce in 2 w e e ks O n ce a m o n th O n ly w h e n tra ve llin g 10 As and when needed O th e rs _ _ _ _ _ _ _ _ _ _ _ _
n mo ea nc no ha s t nth les o k a m we e ce o on a tw in ce ek on e a w eek ce w on s a e tim 2-3 ay ad y ce da on s a e tim 1-2

20

Count

0

fre q u e n c y o f h a ir o il a p p lic a tio n

67

Consumer Buying Behaviour

First came to know about blister pack Maximum number of people came to know about Blister pack at the shop outlet. Most of the respondents in our research replied that they have never seen any advertisement of parachute Blister pack on television or in any magazine. Even the people those who have responded that they first came to know about blister pack 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 about Blister pack
magazine 5.3% news papaer 6.0% radio others 9.7% 5.0% hoarding 3.7% television 9.3% at the shop/outlet 61.0%

68

Consumer Buying Behaviour Conclusion This clearly shows that the awareness of blister pack is very low and the awareness, which is there, is by looking at the packs in shop outlets. Pack the customer is using other than the blister pack 55% i.e. more than half of the people are using bottle other than blister pack, followed by tin. A few number of people said they are using blister pack along with bottle or tin pack. Least number of people said they are using sachet. Most of those using sachet earlier, said they are now using blister pack due to less usage and as wastage of oil is less in blister pack as compare to sachet. People using bottle or tin said that they are using bottle for regular purpose while blister pack for traveling or once in a while purpose.

69

Consumer Buying Behaviour

pack the customer is using other than blister pack
both botle and blist 11.3% both tin and blister 8.3% tin 13.7%

sachet 11.7%

bottle 55.0%

How often customer buy blister pack Maximum number of people are purchasing blister pack for traveling or as and when need arises like when the regular pack is over or for trial purpose etc. Number of people using blister pack everyday is least.

70

Consumer Buying Behaviour

100

80

60

40

20

Count

0
y er Ev 3 2O e nc e nc O e nc O O y nl As __ __ __ __ __ __ ed s ed er ne th n O he g w llin ve tra d an ys da

n he w

In this graph X-axis shows the frequency of hair oil application, and the Y-axis shows purchase of blister pack. The graph clearly shows that in the category of people applying hair oil regularly, the purchase of blister pack 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 pack for their general usage. Other than this we can se from the graph that people those who are purchasing blister pack regularly are in the habit of using oil rarely or once in a month time.

y da

in 2

a

a k ee w a k ee w

th on m

how often customer buy blister pack

in

ks ee w

71

Consumer Buying Behaviour

Application of Blister Pack

72

Consumer Buying Behaviour

how many times you can apply blister pack * sex Crosstabulation Count sex how many times you can apply blister pack once twice thrice There is not quantity even for one time Others ____________ male 40 145 32 7 5 229 female 34 29 4 3 1 71 Total 74 174 36 10 6 300

Total

160 140 120 100 80 60 40 20 0 once twice thrice Others ____________ There is not quantit

sex
male female

Count

how many times you can apply blister pack

The table and accompanied graph shows that most mail says that quantity of hair oil blister pack is sufficient to use twice, while the most number of female says they can 73

Consumer Buying Behaviour apply hair oil out of blister pack only once. In the category of thrice use the share of female is almost nil. Conclusion This finding shows the usage habits of male and female. Females are in habit of using more oil as compare to man due to long hair and looks consciousness. Therefore the target market of blister pack consists of less woman and more males.

As depicted by the table and chart given below, maximum numbers of respondents are using blister pack either for traveling for some other purpose but not for regular use.

74

Consumer Buying Behaviour Nearly 22% respondents said that they might purchase blister pack when there regular pack is over but not for the regular use.

on which occasions you buy blister pack Frequency 103 65 127 5 300 Percent 34.3 21.7 42.3 1.7 100.0 Valid Percent 34.3 21.7 42.3 1.7 100.0 Cumulative Percent 34.3 56.0 98.3 100.0

Valid

When travelling When my regular pack is over As and when 1 need it Others ____________ Total

reason for buying blister pack
140 120

100

80

60

40

Frequency

20 0 When travelling As and when 1 need i Others ____________ When my regular pack

How to open blister pack

75

Consumer Buying Behaviour Maximum numbers of respondents are opening blister pack by bending or cutting it. Although most of the people said that they didn’t faced any problem in opening the pack, they were of idea that opening the pack can be made still easier and better

100

80

60

40

20

faced any problem in
yes

Count

0 cut pierce fold bend bite any other way

no

how will you open a blister pack

SWOT Analysis of Blister Pack

76

Consumer Buying Behaviour In any business, it is imperative that the business be its own worst critic. A SWOT analysis forces an objective analysis of a company's position viz a viz its competitors and the marketplace. Simultaneously, an effective SWOT 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. Strengths  Wide distributions network reaching nearly 1.3 million outlets.  Near total dominance of the branded coconut hair oil market, with its flagship brand.  Top of mind brand recall in customers.  Immense brand loyalty enjoyed by the brand. Weaknesses  Almost negligible promotion and low consumer awareness.  Raw material prices of all key products are susceptible to wide fluctuations and can lead to earnings variability.  This pack is totally a niche product in nature and therefore cannot enjoy bulk sales.

Opportunities

77

Consumer Buying Behaviour  The hair-oil market is likely to grow at 5-6% pa. The value added hair-oil segment will grow at a much faster pace of 15-20% pa. Volume growth will be driven by a demand shift from unorganized sector (80% of market) to branded oils.  Product is mainly catering to the need of traveling segment, which is growing fast.  The value-added hair oils market is growing at a healthy 30 per cent per annum in volumes. Marico can encourage consumers to shift to the value-added market.  The growing consumer population offers a huge market for consumer products. At an average GDP growth of 5.5% until FY2007, the present consumer population of 80 m households can grow by 60% to around 130 m households. Threats  Nearly 120 look alike local brands eating share of parachute.  Low customer loyalty in case of small sachets and blister packs.

Findings

78

Consumer Buying Behaviour  Hair oil is a peculiar habit in India. More than 40% of people are in habit of applying hair oil daily.  Maximum no. of people are using blister packs for traveling purpose and not for regular usage.  Consumer awareness of blister pack is very low. Most of the people came to know about it at shop outlet.  In our research we found that usage of blister pack or small size sachets is among lower class that mainly comprises of labors and low-income group.  Students residing in hostels or out of home are using blister pack for their regular use.  There is a direct relation we found in frequency of hair oil application and purchase of blister pack, i.e. people using less hair oil comprises more of the customers of blister pack.  Regarding packaging, customer’s response is very nice and most of the people said that packaging is excellent although we can still make some improvements.  Blister pack is mainly used for traveling purpose for which it is facing competition with hair gel and creams.

Conclusion

79

Consumer Buying Behaviour Marketing research is the systematic procedure of collection, recording and analysis of data about problems related to the marketing of goods and services. It is both a science and an art. The essential purpose of marketing 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 project report on parachute blister pack has enriched my knowledge of marketing research and Marico Industries limited. Finally once again I extend my sincere thanks to all those who helped me in completing this research work. I hope our recommendations will be worthwhile for all those who are interested in it.

Recommendations

80

Consumer Buying Behaviour

Recommendations as based on the case are as per the four P’s of marketing, i.e:  Product  Price  Place  Promotion Product: As far as product is concerned there is not any necessity of changing the basic features of product. Parachute hair oil enjoys a great customer satisfaction and brand loyalty. Our suggestion is in relation to the packaging. Most of the customer feels that there should be a cap at the top so that after using the oil from blister pack they can recap it, as it will prevent oil wastage. Price: As far as price is concerned we can’t suggest anything better as it is already competitive. Place: Although distribution channel of Marico is among the best in corporate India, during our retail analysis we found that many of the retailers are not storing the blister pack. Company needs to place blister pack on most of the stores and especially on pan-beedi shops were the lower segment people comes more, who are the major customers of blister pack.

Many of the retailers are not storing blister pack and storing the local brands of competitors in the same category. The major reason posted by retailers is low margin in

81

Consumer Buying Behaviour case of parachute blister pack. Many a retailers replied that they are getting margin just double of parachute in other local brands. For more penetration of the pack in the market retailer margin needs to be increased. Promotion: Promotion is the most neglected area in case of blister pack. Most of the respondents said they have never seen an advertisement of blister pack on T.V. or any other medium also. The respondents who are aware of blister of blister pack replied that they have seen it first time on shop outlet. Marico needs to take some promotional programme for blister pack. Other than television advertising, hoardings will be the best medium of promotion for blister pack especially on railway stations. To increase the retailer visibility Company should provide hangers or some sort of dispensers to retailers in which they can keep blister packs on shop counter or shelf near to the visibility of customers. Point of purchase advertising like glow sign boards, gondolas will also be lot productive to increase awareness of blister pack. Advertising of blister pack should be done targeting the traveling segment, which is the major customer segment of blister pack.

BIBLIOGRAPHY

82

Consumer Buying Behaviour

Web sites:
 www.marketingteacher.com  www.bized.ac.uk  www.ihec.net  www.busmgt.ulst.ac.uk  www.austrainer.com  www.maricoindia.com

Books:
 Understanding Consumers – By M.G.Parameswaram.  Consumer Behaviour – By P.C. Jain and Monica Bhatt.

Newspapers:
 The Times of India  The Economic Times  Mid Day `

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