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Rakesh Kumar Singh

Name : RAKESH KUMAR SINGH

Roll No. : 510910259

Learning Centre : Systems Domain (2779)

Subject : Consumer Behaviour

Assignment No. : Set – II (MK0002)

Date of Submission : 2010

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Rakesh Kumar Singh

MBA Semester – 3
MK0002– Consumer Behaviour
Assignment Set- 2

Q.1 What are the relative advantages and disadvantages of quantitative and qualitative research in
understanding consumer behaviour? [10 Marks]
Ans:
A Comparison of Qualitative and Quantitative
Research

Qualitative Research Quantitative Research

Basic research To gain a broad qualitative To quantify the data and
objective understanding of the generalize the results
underlying reasons and form the sample to the
motivations; population of interest;
As a first step in Recommend a final
multistage research course of action
Type of sample Small numbers of non- Large number of
used representative cases representative cases
Data collection Unstructured Structured
Method
Nature of data Non-statistical Statistical
analysis

• Advantages
– Greater data accuracy than direct questioning, in natural settings people behave
naturally,
– Problems of refusal, not at home, false response, non-cooperation etc. are absent,
– No recall error,
– In some situations, only way
• Number of customers visiting a store
• Studying children’s behavior
• Limitations
– Time consuming, -- too many things to observe,
– may not be representative,
– Difficulty in determining root cause of the behavior.
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Rakesh Kumar Singh

Q.2 Assume that the following new products are just being launched in the Indian market – a) LCD
TV and b) I Pod. Based on the five characteristics of innovations, what prediction could you make
regarding the speed of adoption of these products? [10 Marks]

Ans: The speed of adoption of the abovementioned products will depend upon the following factors:

1. Awareness: The consumer is first exposed to the new product. At this stage the innovation is
introduced to the person, but there is no true knowledge of the product. Because of this lack of
information, the person does not feel the need to run out and find out more information, much less
consider consuming it. The awareness stage merely sets the groundwork for the following stages. It is
argued that since a person often stumbles upon the innovation by accident during the awareness stage,
it will provide little incentive to get more information. Others feel that for a person to become aware,
the innovation must fill a particular need in their life for them to notice.

2. Interest: The consumer is interested in the product and starts searching for additional information.
At this stage, the person decides to invest time and energy into finding out more about the innovation.
At this point the person feels good about the innovation, but does not really know how or if it can be
useful in his/her own life. The interest stage is purely to gather knowledge, not to decide whether to
adopt.

3. Evaluation: Consumer decides whether or not to believe that this product or service will satisfy
his/her need. At this stage, the person firsts begins to make a decision about the innovation. How could
I use it? Do I really need it? Would it be to my advantage if I had it? These are all questions the
consumers ask themselves during the evaluation stage. Then if the innovation appears to be positive for
their life, they will try it out. If the innovation has a negative connotation, they may seek the advice and
knowledge of their peers.

4. Trial: The consumer uses the product on a limited basis. This is the next stage called the trial stage.
Here the individual physically gives the innovation a chance by trying it out for a limited period. What
they are looking to find out during this trial stage is how the innovation can fit into their needs and
desires. Research proves that most people will not adopt an innovation without personally testing it first
to see if it really “works”.

5. Adoption/Rejection: If trial is favourable, the consumer decides to use the product on a full scale
basis; if unfavourable, the consumer decides to reject it. This final stage is the adoption stage. Here the
individual uses information that they have gathered in the interest and evaluation stages and with the
outcome of the trial stage, decides to adopt the innovation. At this point in the adoption process, the
individual not only adopts the innovation but embraces it for the future. There is, however, another
possible stage to the adoption process. After the individual adopts the innovation they may decide to
reject it for whatever reason. This decision to reject the innovation after agreeing to adopt it is called
discontinuance.

This is a very simplistic model, as there could be several other steps involved in this process. In many
cases, the post adoption or post purchase evaluation can lead to a strengthened commitment, or to a
decision to discontinue use.

The adoption of some products may have very little effect on the behavioural and lifestyle changes of
consumers. Some innovations may lead to major changes in these spheres. Examples of innovations
which had a major impact on society include the automobile, locomotive, telephone, refrigerator,
television, airplane, personal computer, etc.

Q.3 List out and briefly explain five major differences between consumer buying behaviour and
business buying behaviour. [10 Marks]
Ans: Five major differences between consumer buying behaviour and business buying behaviour are:
Consumer Buying Behavior
1. Consumer buying normally evolves from
needs and wants which is known as problem
recognition and it depends upon a number
of factors like social factors, cultural factors
etc.
2. Once the consumer has recognized a 2. The buying centre consists of those people in
problem, he/she searches for information
on products and services that can solve that
problem. Sources of information include
Personal sources, Commercial sources,
Public sources & Personal experience etc.
3. The consumer compares the brands and
products that are in their evoked set.
Consumers evaluate alternatives in terms of
the functional and psychological benefits
that they offer.
4. Once the alternatives have been
evaluated, the consumer is ready to make a
purchase decision. Sometimes purchase
intention does not result in an actual
purchase.
5. It is common for customers to experience
concerns after making a purchase decision.
This arises from a concept that is known as
“cognitive dissonance”. The customer,
having bought a product, may feel that an
alternative would have been preferable. In
these circumstances that customer will not
repurchase immediately, but is likely to
switch brands next time.
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Business Buying Behavior
1. The organizational buying behavior process is
well documented with many models depicting the
various phases, the members involved, and the
decisions made in each phase. The basic five phase
model can be extended to eight; purchase
initiation; evaluations criteria formation;
information search; supplier definition for RFQ;
evaluation of quotations; negotiations; suppliers
choice; and choice implementation.
the organizational who are involved directly or
indirectly in the buying process, i.e. the user, buyer
influencer, decider and gatekeeper to who the role
of ‘initiator’ has also been added. The buyers in
the process are subject to a wide variety and
complexity of buying motives and rules of
selection.
3. The level of risk depends upon the
characteristics of the buying situation faced. The
supplier can influence the degree of perceived
uncertainty by the buyer and cause certain desired
behavioral reactions by the use of information and
the implementation of certain actions.
4. Three key factors are shown to influence
organizational buying behavior, these are, types of
buying situations and situational factors,
geographical and cultural factors and time factors.
5. Actions can be taken to influence the supply
market. Based on the type of items purchased and
on its position in the buying matrix, a company
will develop different relationships with suppliers
depending upon the number of suppliers, the
supplier’s share, characteristics of selected
suppliers, and the nature of customer-supplier
relationships.