Consumer behaviour



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CONSUMER BEHAVIOUR

The liberalization and global operation of businesses have given an opportunity to the customers/ consumers to select one out of various similar products available in the market. The global trend in the market has affected the consumer's behavior to a great extent, whether it is a case of seller operating in international, regional, local level or a case of consumers involved in purchasing consumable/ industrial products. Due to globalization of business and liberalized policies of the government the auto industry has witnessed a major selling prospect. Many multinational companies have entered to fray, turning the market place into a virtual battlefield. Today consumers have many options and are much better equipped with information to choose from these available options. The consumer now exhibits a totally different behavior what they used to do in a regulated market.

The existence of any business is due to unfulfilled needs and wants of the consumer. To fulfill needs of consumer, products/services are introduced in the market by business organization. So, a thorough knowledge of consumers and understanding of their behavior is must for a meaningful existence of any organization.

Consumer behavior can be defined as “the decision process and physical activity engaged in when evaluating, acquiring, using or disposing of goods and services.”1An understanding of consumer behavior is of critical importance to all person engaged in any form of marketing activity. This understanding enables the marketers to find behavior of consumers, to influence their behaviors and to manipulate the influencing variables to gain advantage.

The growth in the size of companies and markets has given birth to the marketing research and consumer behavior that has become one of the focal points of marketing. This is being researched very widely. The products are designed to fit into consumers' perception. The products are distributed as per the consumers' convenience and advertised to communicate consumers and ultimately influence their behavior in favor of its offers. Since the stakes in the business are very high, competition is too stiff and failure of the business is too risky. Therefore, it is desirable to assess the consumers’ behavior and their preferences in order to remain competitive in the market.

The consumer’s buying patterns, according to researchers, is an area for in-depth study for suggesting different useful marketing strategies. In the present era, the information technology is growing at very fast rate. This has created tremendous competition in the market. The enhanced importance of consumers' behavior, in the recent development of information system, has provoked an interest in examining the buying/subscribing pattern of two-wheelers by consumers.

Consumer Behavior in the Present Perspective

The knowledge of consumer behavior is a fairly important aspect, both from the viewpoint of the academician’s theoretical interest and the practical applicability that it has for the marketing practitioners. In the modern concept of marketing, the only rationale for the firm's existence is believed to be the consumer's satisfaction that it provides. The importance of consumer behavior was well recognized by the social and management scientist. The father of our nation, Mahatma Gandhi recognized the importance of the customers. He said, “A customer is the most important visitor on our premises. He is not dependent on us. We are dependent on him. He is not an interruption in our work. He is the purpose of it. He is not an outsider on our business. He is a part of it. We are not doing him a favor by serving him. He is doing a favor by giving us an opportunity to do so.”2 Therefore, it is of vital importance that the knowledge of "what makes the consumer to think" and what consequently would contribute to his satisfaction, is at the disposal of marketer.

The fast changing business environment has provided many inputs (in terms of both the product package and emotional images built into them) that influences buyers' behavior and keeps consumer preferences in a constant state of flux. The information revolution and intensifying competition places a large amount of solicited information at the consumer's disposal before buying a product. The informational inputs, advocating the merits of each branded goods influence the buyers decision to a great extent. There are various other factors that influence the consumer behavior may also be the topics of interest from the marketer point of view.

Model of Consumer Behaviour

In earlier times, marketers could understand consumers well through the daily experience of selling to them. But as firms and marketers have grown in size, many marketing decision makers lost direct contact with their customers and now have turned to consumer research.

The market stimuli consists of the four Ps, product, price, place and promotion . Other stimuli include major forces and events in the buyers environment such as economic, technological, political and cultural. All these stimuli enter the buyer's black box, where they are turned into a set of observable buyer responses such as product choice, brand choice, dealer choice, purchase timing and purchase amount.

Factors Influencing Consumer Behaviour

Consumer behavior is affected by a host of variables, ranging from personal motivation, needs, attributes and values, personality characteristics, socio-economics and cultural background, age, sex, professional status to social influences of various kind exerted by family, friends, colleagues and society as a whole. The combination of these various factors produced a different impact on each one of us as manifested our different behavior as consumer.



Psychological factors such as individual consumer needs and motivations, perceptions, attitudes, the learning processes and personality characteristics are the similarities, which operate across different types of people and influence their behavior. Amongst the social influences affecting behavior, we can classify the influence of family, friends, leaders and the social clause to which the consumer belongs

Factors Influencing Consumer Behavior

Cultural Factors: Cultural factors exert the broadest and deepest influence on consumer behavior. The marketer needs to understand the role played by the buyers' culture, sub culture and social class.

(a) Culture: It is the most basic cause of person's wants and behavior. Human behavior is largely learned. Growing up in a society, a child learns basic value, perceptions, wants and behavior from the family and other important institutions.

(b) Sub-Culture: Each culture contains smaller sub-cultures or groups of people with shared value systems based on common life experiences and situations. Sub-cultures include nationalities, religions, racial groups, and demographic regions. Many sub-cultures make up important market segments, and marketers often design products and marketing programs clubbed to their needs. These factors will effect the consumer’s food preferences, clothing choices, recreation activities and career goals.

(c) Social Class: Social classes are the society's relative permanent and ordered divisions whose members share similar value, interests and behaviors. Social class is not determined by a single factor such as income, but is measured as a combination of occupation, income, education, wealth and other variables. Social class shows distinct product and brand preferences in areas such as clothing, home furnishings, leisure activities and automobiles.

Social Factors: Consumer's behavior is also influenced by social factors such as consumer’s small groups, family and social roles and status. Keeping these factors in to consideration, the marketers and companies should design the market strategies for better response from consumers.

(a) Reference Groups: A person's behavior is influenced many small groups. The primary groups are such as family, friends, neighbors and co-workers. Secondary groups are such as, religious groups, professional associations and trade unions. The reference groups are the groups that serve as direct or indirect points of comparison or reference in forming a person's attitude or behavior. People often are influenced by reference groups that they do not belong to.

(b) Family: Family members can strongly influence buyer behaviour. We can distinguish between two families in the buyer's life. The buyer's parents make up the family of orientation. Parents provide a person with an orientation towards religion, politics and economics and a sense of personal ambition, self worth and love.

“The family of procreation”- The buyer's “spouse and children” have a more direct influence on every day buying behavior. This family is the most important consumer buying organization in the society, and it has been researched extensively. Marketers are interested in the roles and relatives influence of the spouse, and children on the purchase of large of variety of products and services.



(c) Role and status: The person's position in each group (such as family, clubs and organization) can be defined in terms of both “role” and “status”. A role consist of the activities that people are expected to perform according to the persons around them. Each role carries a status, which reflects the general esteem given to it by society. People often choose products that show their status in the society.

1.5.3. Personal Factors: The buying decision of consumer/ buyer is also influenced by personal characteristics such as buyer's age and life-cycle stage, occupation, economic situation, life style and personality and self concept.

(a) Age and Life-Cycle stage: The consumers change the goods and services they buy over their life times. Tastes in food, clothes, furniture and recreations are often age related. Buying is also shaped by the stage of the family life cycle. Marketers should pay attention to the changing buying interests that might be associated with these adult passages.

(b) Occupation: A person's occupation affects the goods and services bought. Blue-collar workers tend to buy more work clothes, whereas white-collar workers buy more suits and ties. Marketers try to identify the occupational groups that have an above average interest in their products and services.

(c) Economic Condition: The economic condition of buyer normally affects the product choice and buying decision. Marketers of income sensitive goods closely watch trends in personal income, savings and interest rates. If economic indicators point to a recession, marketers can take steps to redesign, reposition and reprise their products.

(d) Life Style: As the time changes, the life style of the people also changes. Life style is a person's pattern of living as expressed in his or her activities, interests and opinions. Life style captures something more than the person's social class or personality. It profiles a person's whole pattern of acting and interacting in the world.

1.5.3 (e) Personality and Self Concept: Everyone has a distinct personality and it influences his or her buying decision. Personality refers to the unit psychological characteristics that lead to relative consistent and lasting responses to one's own environment. Personality can be useful in analyzing consumer behavior for certain product or brand choices.

A person's self-concept also influences the buying decision. In order to understand consumer behavior, the marketers must first understand the relationship between consumer self-concept and possessions. Then, the buying decision can be made oriented towards the particular product.

Psychological Factors: The buying decision and behavior of consumer for a particular product is also influenced by four major psychological factors. These are motivation, perception, learning and beliefs and attitudes. The same are explained in the following headings:

(a) Motivation: “The motivation is an inner state that mobilizes bodily energy and directs it in selective fashion towards goals usually located in the external environment.”4 A person has many needs at a given time. Some are "biological" arising from states of tension such as hunger, thirst or discomfort. Others are “psychological” arising from the need for recognition, esteem or belonging. Marketers do their best to motivate the buyers and attract them for a particular product. Thus, the motivation helps in influencing the buying decision of buyer to a great extent.

(b) Perception: It is the process by which people select, organize and interpret information to form a meaningful picture of the world. Motivation makes the persons ready to buy the item, and perception makes the person mentally ready for selecting a particular brand of item. Marketing managers make efforts, so that the buyers get confirmed to buy that item or services.

(c) Learning: Learning describes changes in individual's behavior arising from experience. Learning occurs through the interplay of drives, stimuli, cues, responses, and reinforcement. The practical significance of learning theory for marketers is that they can build up demand for a product by associating it with strong drives using motivating cues and providing positive reinforcement.

(d) Beliefs and Attitudes: Through doing and learning, people acquire their beliefs and attitudes. These in turn, influence the buying behavior of consumers. A “belief” is a descriptive thought that a person has about something. An “attitude” describes a person's relatively consistent evaluations, feelings, and tendencies towards an idea or object.

The marketers are interested in the beliefs that people formulate about specific products and services, because these beliefs make up product and brand images that affect buying behavior.



1.6 Consumers’ Decision

In the present context, the consumers get many information at hand due to the information revolution. Media (electronic and print), TV, Radio and satellite communication have made easy to consumers to choose the best products available in the market for their use. The marketers have to play a key role in attracting the potential buyers in favor of their products. The buying decision varies as per the information available with the consumer before buying a particular product. Information available through Internet with the help of cable TV has created a new dimension in making decision before the buying any product. Thus, the decision of buyers depends a lot on the information available with the buyers.

Making a decision to buy any item is a rationale and conscious process in which the consumer evaluates each of the available alternatives to select the best among them. Each decision, one makes, involves an elaborate mental exercise and a degree of active reasoning, though on the surface, it may not always seems to be so.

Stages in the Buyers’ Decision Process

In making a purchase decision, a consumer normally goes through the following five stages:



(a) Problem Recognition: The buying process starts with the buyer recognizing the need or problem. This need occurs for replacing an old item with new one because of its poor performance, perishable stage or not able to fulfill the requirement. It may happen for household items, official use items, industrial or agricultural implements. Thus, the marketers must understand how and when consumers make choices and they can facilitate those types of products available in the market.

(b) Pre-Purchase Information Search: This is of two types:

(I) Internal Search: It refers to recalling relevant information stored

in the memory.



(ii) External Search: It refers to the deliberate and voluntary seeking of new information regarding the product/brand under consideration.

Evaluation of Alternatives: The buyer's final decision for purchasing depends on product attribute, the relative importance of each attribute to the consumer, brand image, attitudes towards the different brands or alternatives under consideration. This stage of the buying decision process gives the marketer a relative importance attached to each attribute by various consumer segments, altering beliefs and attitudes about his own brand, and calling attention to neglect product attributes.

  1. Purchase Decision: After calculating everything, buyer takes decision to buy that item. At the last stage also, the buyer's decision can be influenced by giving some special price discount and attract the buyer towards the product. In this, marketer plays a very crucial role.

(e) Post Purchase Decision: After purchasing the item, the buyer finds that the performance and utility matches up to his expectation. The satisfaction will reinforce the buyer's perceived favourable image of the brand, which is likely to be extended to the entire range of products manufactured by the company. A satisfied customer is, thus, a very powerful source of influence for potential customers.

The self explanatory block diagram about the aforesaid discussion follows: 5



Problem Recognition

Information Search

Evaluation of Alternative

Purchase Decision

Post purchase behavior

Stages in Buyer’s Decision Process

Thus, one can now appreciate the many individual characteristics and factors affecting on consumer behavior. The information technology which has attained new dimensions in the recent past has sufficiently influenced the consumer's behavior especially in the field of brand selection and buying patterns. The markets some times face difficulties for motivating and influencing the buyer's decision in favor of a particular product.

The consumer's choice results from the complex interplay of culture, social, personal and psychological factors. Although, many of these factors cannot be influenced by the marketer, they can be useful in identifying interested buyers and in shaping products and appeals to better serve their needs.
Organizational buying Vs. Consumer buying
Marketing theory traditionally splits analysis of buyer or customer behavior into two broad groups for analysis –Consumer Buyers and Organizational Buyers.

Consumer buyers are those who purchase items for their personal consumption.

Organizational buyers are those who purchase items on behalf of their business or organization.

In contrast to consumers, organizational buyers represent those “buying goods and services on behalf of an organization for the purpose of the furtherance of organizational objectives” (Lancaster, 1999). Before highlighting some of the differences between the two, however, it is important to caution against over stressing the differences. For instance, you may come across some authors who argue that buying goods on behalf of one’s employers makes buyers more caution and rational than when purchasing consumer goods privately. Come of the features of organizational buying which is different from the consumer buying can be summarized as :


Setting for Buying: For consumers, the buying unit is within the household, whereas for the organizational buyer, the setting is within the firm. This means as an industrial marketer targeting the organizational buyer, one must take account of factors such as buying procedures, levels of authority, and so on, factors not relevant in consumer marketing.
Technical/Commercial Knowledge: You will see that usually, the organizational purchaser will be a trained professional, more knowledgeable than the average consumer purchaser. This can often necessitate a completely different sales approach.
Contact with Buyers/Distribution Channels: You will find that organizational markets are usually more geographically concentrated than consumer markets. Factors such as proximity to available labor, raw materials, and transportation facilities often dictate an industry’s location. In addition, compared to consumer markets, there can be far fewer potential customers. Taken together, these variables mean that you, as an industrial marketer must normally maintain far more direct and personal contact with his or her potential clients.
Number of Decision-Makers: Normally in consumer purchasing, the number of people involved in the decision making process can be very small; i.e. an individual, a couple, a family, etc. In organizational buying, however, a great many people can be involved in the purchasing process. This can mean differences in both the number of people marketing communications must attempt to convince and that quite different decisions might emerge as a result of group dynamics than might initially be anticipated on the basis of individual discussions.

Derived Demand: Organizational buyers often continually adjust their buying decisions on the basis of projected sales figures, buying more units when forecast sales are higher. The result can be a sort of “pendulum effect”, with a knock-on effect throughout the buying chain as each chain member adjusts it’s buying patterns accordingly.


Reciprocal Demand: Sometimes, a buyer can also be a seller at the same time. A software company producing a package for an insurance company, for instance, might also purchases its insurance services from what is effectively one of its own customers. Both companies want to sell to each other, affecting each other’s eventual buying decisions to a varying degree. As we can see, there are subtle differences between consumer and organizational forms of buying.


Differences in Organizational Transactions
• Buying specialists are often used. It is usually seen that organizations often employ people who are professional purchasing agents. Just as sales agents are professional specialists at finding organizations that need the products that their employer produces, purchasing agents are specialists are professional specialists at finding what their employer needs. Whatever stereotypes you might have from experiences with salespeople in consumer sales, any negative stereotypes of salesperson behavior probably would not be appropriate in dealing with professional buyers.
• Often use multiple buying responsibilities. A household purchaser is often the sole decision maker. Making a sale toan organization, however, often requires selling to several entities within the buying center. For example, you might be using a desktop computer at work, but the decision as to what specifications were needed might have been set by someone in the computer department, the decision to buy might have been made by your department manager, bids taken by someone in the purchasing department, and the final authorization made by the company president.
• Often use multiple suppliers. It is often desirable to have a long-term relationship with more than one supplier, even if a second supplier has higher prices for otherwise similar terms and conditions. If problems in quality or delivery are experienced with a supplier, production can still be maintained if the second supplier can be used to replace the first. The ideals of a cozy, trusting relationship that has been promised with strategic alliances in the popular business literature does not always work if it leaves one party vulnerable as a sole supplier or buyer.
• More likely to require exact specifications. A household purchaser might select a particular model of desktop computer for no other reason than it has a pleasing color. An organizational purchaser is more likely to set specifications regarding processor speed, memory, hard drive size, and such before taking bids on price.
• Often lease equipment and space. As a household consumer, you would probably prefer to own your own car, furniture, and home. These are things that represent personal expression, status, and wealth. Your objectives as a business manager, however, are very different. You might prefer to lease public warehouse space to provide the flexibility to change locations when the market demands, to lease trucks so that you can leave the problems of maintenance and disposition to someone else, etc.
• More frequently employ competitive bidding and negotiation. Household consumers (especially those of us in urban settings) are more likely to accept as final a price that is placed on a product in a retail setting or to accept a price that is given to us by a service provider. As a business manager, your employer is more likely to require that you accept, say, three bids for a service or to negotiate various terms and conditions associated with product specifications, delivery, and price.
Users: If you are a secretary, you might have had the experience of arriving to work one day to find a new typewriter on your desk, whether or not you even wanted it. A salesperson would not call on you if you had no influence over what product was purchased. However, if you and your co-workers submit numerous complaints about missing or problematic features of the new replacements, the salesperson might be faced with a very expensive customer service problem to solve. A user is the end consumer of a product.
Influencers: Perhaps in this case, the office manager was consulted with regard to features or specifications to set in the purchase of new typewriters. Although the office manager might have no decision-making authority with regard to the purchase, whatever specifications s/he requests could be used without change in making the purchase. A salesperson might need to be aware of these influencers - a special trick is to get the influencer to write a specification list that happens to match the seller’s product features! An influencer is someone who has influence over what is purchased.
Deciders: In this case, some middle manager, ignorant of the needs of secretaries, might have made the decision as to when and what to purchase. The point of this statement is that the marketer or seller must be aware of how it is that decisions are made and often must focus some or all efforts at whomever it is that makes decisions in the organization. Note, however, that decision-making authority does not necessarily mean that this person exerts any influence on what is purchased. The company president might be the only person who signs all purchase requisitions, and therefore has ultimate decision authority, but might otherwise merely sign some requisitions without question or involvement. A decider is someone who ultimately has authority if or what to purchase.
Buyers: The final purchase transaction might be left to a purchasing agent who otherwise has no involvement in decision-making. A sales agent for an office equipment supply house might help an organization to decide what brand of typewriters would be best, but that organization could then allow the purchasing agent to find the best deal on that brand, and the best deal with regard to price might come from a competing office supply house. A responsibility of salespeople, then, is often to maintain good, trusting, and long-term relationships with the purchasing agents in prospective buying organizations, whether or not they have purchased in the past. A buyer is someone who arranges the

transaction.


Gatekeepers: Why do salespeople often give secretaries little gifts of chocolates or flowers or an occasional free lunch? A secretary can be nice or nasty in passing information in either direction. The prospective buyer’s secretaries can be helpful in providing names, telephone numbers, and office hours of key members of a buying center in an organization. They can also be helpful in passing messages from the salesperson to members of the organization. A gatekeeper could include anyone in the organization who can control the flow of information. Some books use the term Decision Making Unit to describe the notion of the buying center, and some additionally include the entity of initiator. An initiator would be a person who initiates the idea or a purchase. Note that the idea of the Buying Center is conceptual - there is no such department in any organization!
Application of Consumer Behavior: The consumer behavior has a number of applications in the following areas of marketing:

Analyzing market opportunity: Study of consumer behavior helps in identifying needs and wants which are unfulfilled. This is done by examining trends in income, consumer’s life styles and emerging influences. As I have taken case study of buying pattern of beers by the consumers of Lucknow city so by studying trends in income, consumers’ life style, their preferences, and other related issues will give opportunity for marketers for assessing the demand for the two-wheelers.

Selecting the Target Market: The study of consumer trends would reveal distinct group of consumer with very distinct need and wants. Knowing who these groups are, how they behave, how they decide to buy, enable the marketer to market product/services specially suited to their needs. By studying consumer behavior, the marketer can plan and can segment the prospects in a effective manner. He would position his in that locality in which people can afford to pay easily.

Determining the Product Mix: Today most of the companies manufacturing the two-wheelers produces the variety of brands in order to meet the diverse need of the consumers. The knowledge of consumer is most useful in determining the product mix and place the product in a better and effective way.

Determining the Price of the Product: the decision related to price is a critical factor for the management. To decide price, the manufacturer has to choose that price level which maximises sales revenue. In a free market economy where there is a tough competition in the market, manufacturer try to gain competitive edge through setting different price policy. Actually only thorough knowledge of consumer behaviour in actual buying situation that marketer can hope to find answer to these issues.



Determining the Promotional Strategies: Marketer can plan promotional strategies by knowing target consumer, their location, media to which they have access, their preferred media and role played by advertising in influencing purchase decision.

Marketing Research is a vehicle through we can obtain information about present and potential customer’s behavior, their reaction and prospective about marketing. Learning more about the consumer and marketing is the heart of marketing research. The objective of this study is to know about the consumer’s perception & preference towards Beer of MML.


‘Beer’ it self has a niche in the market. A certain age group people use to drink for the shake of just showing which some people take it just as a substitute to whisky and do not Jan as that of whisky. The Beer industry is developing with speed of app. 15%. The Mohan Meakin enjoys a good position in the Beer Market by launching Meakin 10000 The coming up of Multinational in the filed has made it tough for the company to capture the same market share as it was enjoying few decades ago. Since thirty years put now seeing the current requirements the company decided to change its old pattern and planned to walk with the Traits. This study contains the about the reaction of consumers towards the Beer. The target consumers are there figured and the area for research is also sound and through it.
Through the proper & throughout research of the company & its external environment the SWOT, Conclusion and Recommendation are concluded with proper marketing strategies. This research study is taken in NCR area.

This research training helped me in getting more practical and enhanced my awareness level of consumer oriented towards buying a product of liquor of “Mohan Meakin Ltd.”.




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