1

A
PROJECT REPORT
ON

CONSUMER BEHAVIOUR

ANALYSIS IN BUYING BEHAVIOVR

FOR THE PARTIAL FULFILLMENT OF DEGREE OF MASTER OF

BUSINESS ADMINISTRATION

SUBMITTED TO:
SUBMITTED BY:

Mrs. SUMAN PATHAK

PAWAN JOSHI

Sr. LECTURER, MBA

ROLL NO-09020500058
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MBA 3nd
SEM

AMRAPALI INSTITUTE OF MANAGEMENT AND COMPUTER APPLICATION

Shiksha Nagar, Lamachaur, Haldwani

(Affiliated to Uttarakhand Technical University, Dehradun)

ACKNOWLEDGEMENT

We wish to express our sincere appreciation to those persons who

have

contributed either directly or indirectly to this project. Most of all, we

want

to thanks Mrs. SUMAN PATHAK she guided, motivated and assisted us

in

developing this project. We are also greatly thankful to Mr. VEER PAL
GANGWAR,

who gave us useful information about this project.

Finally, we want to pay our compliments, to our friends, who

encouraged us
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in completing this project. All the members of the group worked hard
in

getting information from the concerned departments.

TABLE OF ONTENT

• ACKNOWLEDGMENT

• INTRODUCTION

• BUYING BEHAVIOUR

• STAGE OF BUYING PROCESS

• TYPES OF BUYING BEHAVIOUR

• CATEGORIES EFFECT BUYING BEHAVIOUR

• FACTORS OF BEHAVIOUR

• DECESION MAKING PROCESS

• CONCLUSION
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• BIBLIOGRAPHY

INTRODUCTION
CONSUMER BUYING BEHAVIOUR

Definition of Buying Behaviour:

Buying Behaviour is the decision processes and acts of people involved in buying and using products.

Firms need to understand:

• why consumers make the purchases that they make?

• what factors influence consumer purchases?
• the changing factors in our society.

Consumer Buying Behaviour refers to the buying behaviour of the ultimate consumer. A firm needs to
analyze buying behaviour for:

• Buyers reactions to a firms marketing strategy has a great impact on the firm’s success.
• The marketing concept stresses that a firm should create a Marketing Mix (MM) that satisfies
(gives utility to) customers, therefore need to analyze the what, where, when and how
consumers buy.
• Marketers can better predict how consumers will respond to marketing strategies.

Stages of the Consumer Buying Process

Six Stages to the Consumer Buying Decision Process (For complex decisions). Actual purchasing is
only one stage of the process. Not all decision processes lead to a purchase. All consumer decisions do
not always include all 6 stages, determined by the degree of complexity...discussed next.
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The 6 stages are:

1. Problem Recognition(awareness of need)--difference between the desired state and the actual
condition. Deficit in assortment of products. Hunger--Food. Hunger stimulates your need to
eat.
Can be stimulated by the marketer through product information--did not know you were
deficient? I.E., see a commercial for a new pair of shoes, stimulates your recognition that you
need a new pair of shoes.
2. Information search--
o Internal search, memory.
o External search if you need more information. Friends and relatives (word of mouth).
Marketer dominated sources; comparison shopping; public sources etc.

A successful information search leaves a buyer with possible alternatives, the evoked
set.Hungry, want to go out and eat, evoked set is

o chinese food
o indian food
o burger king
o klondike kates etc
3. Evaluation of Alternatives--need to establish criteria for evaluation, features the buyer wants
or does not want. Rank/weight alternatives or resume search. May decide that you want to eat
something spicy, indian gets highest rank etc.
If not satisfied with your choice, then return to the search phase. Can you think of another
restaurant? Look in the yellow pages etc. Information from different sources may be treated
differently. Marketers try to influence by "framing" alternatives.
4. Purchase decision--Choose buying alternative, includes product, package, store, method of
purchase etc.
5. Purchase--May differ from decision, time lapse between 4 & 5, product availability.
6. Post-Purchase Evaluation--outcome: Satisfaction or Dissatisfaction. Cognitive Dissonance,
have you made the right decision. This can be reduced by warranties, after sales
communication etc.
After eating an indian meal, may think that really you wanted a chinese meal instead.

Types of Consumer Buying Behaviour

Types of consumer buying behaviour are determined by:

• Level of Involvement in purchase decision. Importance and intensity of interest in a product in

a particular situation.
• Buyers, level of involvement determines why he/she is motivated to seek information about a
certain products and brands but virtually ignores others.

High involvement purchases--Honda Motorbike, high priced goods, products visible to others, and the
higher the risk the higher the involvement. Types of risk:

• Personal risk
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• Social risk
• Economic risk

The four type of consumer buying behaviour are:

• Routine Response/Programmed Behaviour--buying low involvement frequently purchased low

cost items; need very little search and decision effort; purchased almost automatically.
Examples include soft drinks, snack foods, milk etc.
• Limited Decision Making--buying product occasionally. When you need to obtain information
about unfamiliar brand in a familiar product category, perhaps. Requires a moderate amount of
time for information gathering. Examples include Clothes--know product class but not the
brand.
• Extensive Decision Making/Complex high involvement, unfamiliar, expensive and/or
infrequently bought products. High degree of economic/performance/psychological risk.
Examples include cars, homes, computers, education. Spend a lot of time seeking information
and deciding.
Information from the companies MM; friends and relatives, store personnel etc. Go through all
six stages of the buying process.
• Impulse buying, no conscious planning.

The purchase of the same product does not always elicit the same Buying Behaviour. Product can shift
from one category to the next.
For example:
Going out for dinner for one person may be extensive decision making (for someone that does not go
out often at all), but limited decision making for someone else. The reason for the dinner, whether it is
an anniversary celebration, Valentine’s Day dinner, or a meal with a couple of friends will also
determine the extent of the decision making.

Categories that Effect the Consumer Buying Decision Process

A consumer, making a purchase decision will be affected by the following three factors:

1. Personal
2. Psychological
3. Social

The marketer must be aware of these factors in order to develop an appropriate MM for its target
market.

Personal:

unique to a particular person. Demographic Factors such as Sex, Race, Age etc.
Who in the family is responsible for the decision making?
Young people purchase things for different reasons than older people.

Psychological factors:
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Psychological factors include:

• Motives--

A motive is an internal energizing force that orients a person's activities toward satisfying a
need or achieving a goal.
Actions are effected by a set of motives, not just one. If marketers can identify motives then
they can better develop a marketing mix.
MASLOW hierarchy of needs!!

o Physiological
o Safety
o Love and Belonging
o Esteem
o Self Actualization

Need to determine what level of the hierarchy the consumers are at to determine what
motivates their purchases.

• Perception--

What do you see?? Perception is the process of selecting, organizing and interpreting
information inputs to produce meaning. IE we chose what info we pay attention to, organize it
and interpret it.
Information inputs are the sensations received through sight, taste, hearing, smell and touch.

Selective Exposure-select inputs to be exposed to our awareness. More likely if it is linked to

an event, satisfies current needs, intensity of input changes (sharp price drop).

Selective Distortion-Changing/twisting current received information, inconsistent with beliefs.

Advertisers that use comparative advertisements (pitching one product against another), have
to be very careful that consumers do not distort the facts and perceive that the advertisement
was for the competitor. A current example...MCI and AT&T...do you ever get confused?

Selective Retention-Remember inputs that support beliefs, forgets those that don't.
Average supermarket shopper is exposed to 17,000 products in a shopping visit lasting 30
minutes-60% of purchases are unplanned. Exposed to 1,500 advertisement per day. Can't be
expected to be aware of all these inputs, and certainly will not retain many.

Interpreting information is based on what is already familiar, on knowledge that is stored in the
memory.

• Ability and Knowledge--

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Need to understand individual’s capacity to learn. Learning, changes in a person's behaviour

caused by information and experience. Therefore to change consumers' behaviour about your
product, need to give them new information re: product...free sample etc.

When making buying decisions, buyers must process information.

Knowledge is the familiarity with the product and expertise.

Inexperience buyers often use prices as an indicator of quality more than those who have
knowledge of a product.
Non-alcoholic Beer example: consumers chose the most expensive six-pack, because they
assume that the greater price indicates greater quality.

Learning is the process through which a relatively permanent change in behaviour results from
the consequences of past behaviour.

• Attitudes--

Knowledge and positive and negative feelings about an object or activity-maybe tangible or
intangible, living or non- living.....Drive perceptions

Individual learns attitudes through experience and interaction with other people.
Consumer attitudes toward a firm and its products greatly influence the success or failure of the
firm's marketing strategy.

Oldsmobile vs. Lexus, due to consumers attitudes toward Oldsmobile (as discovered by class
exercise) need to disassociate Aurora from the Oldsmobile name.

Exxon Valdez-nearly 20,000 credit cards were returned or cut-up after the tragic oil spill.

Honda "You meet the nicest people on a Honda", dispel the unsavory image of a motorbike
rider, late 1950s. Changing market of the 1990s, baby boomers aging, Hondas market returning
to hard core. To change this they have a new slogan "Come ride with us".

Attitudes and attitude change are influenced by consumers, personality and lifestyle.

Consumers screen information that conflicts with their attitudes. Distort information to make it
consistent and selectively retain information that reinforces our attitudes. IE brand loyalty.

There is a difference between attitude and intention to buy (ability to buy).

• Personality--

all the internal traits and behaviours that make a person unique, uniqueness arrives from a
person's heredity and personal experience. Examples include:

o Workaholism
o Compulsiveness
o Self confidence
o Friendliness
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o Adaptability
o Ambitiousness
o Dogmatism
o Authoritarianism
o Introversion
o Extroversion
o Aggressiveness
o Competitiveness.

Traits affect the way people behave. Marketers try to match the store image to the perceived
image of their customers.

There is a weak association between personality and Buying Behaviour, this may be due to
unreliable measures. In Nike ads for example, Consumers buy products that are consistent with
their self concept.

• Lifestyles--

Recent US trends in lifestyles are a shift towards personal independence and individualism and
a preference for a healthy, natural lifestyle.

Lifestyles are the consistent patterns people follow in their lives.

EXAMPLE: healthy foods for a healthy lifestyle. Sun tan not considered fashionable in US
until 1920's. Now an assault by the American Academy of Dermatology.

Social Factors:

Consumer wants, learning, motives etc. are influenced by opinion leaders, person's family, reference
groups, social class and culture.

• Opinion leaders--

Spokes-people etc. Marketers try to attract opinion leaders...they actually use (pay)
spokespeople to market their products. Michael Jordon (Nike, McDonalds, Gatorade etc.)

Can be risky...Michael Jackson...OJ Simpson...Chevy Chase

• Roles and Family Influences--

Role...things you should do based on the expectations of you from your position within a
group.
People have many roles.
Husband, father, employer/ee. Individuals role are continuing to change therefore marketers
must continue to update information.

Family is the most basic group a person belongs to. Marketers must understand:
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o that many family decisions are made by the family unit

o consumer behaviour starts in the family unit
o family roles and preferences are the model for children's future family (can
reject/alter/etc)
o family buying decisions are a mixture of family interactions and individual decision
making
o family acts an interpreter of social and cultural values for the individual.

The Family life cycle: families go through stages. Each stage creates different consumer
demands:

o bachelor stage...
o newly married, young, no children...me
o full nest I, youngest child under 6
o full nest II, youngest child 6 or over
o full nest III, older married couples with dependent children
o empty nest I, older married couples with no children living with them, head in labour
force
o empty nest II, older married couples, no children living at home, head retired
o solitary survivor, in labour force
o solitary survivor, retired
o Modernized life cycle includes divorced and no children.

Because 2 income families are becoming more common, the decision maker within the family
unit is changing...also, family has less time for children, and therefore tends to let them
influence purchase decisions in order to alleviate some of the guilt. (Children influence about
$130 billion of goods in a year) Children also have more money to spend themselves.

• Reference Groups--

Individual identifies with the group to the extent that he takes on many of the values, attitudes
or behaviours of the group members.

Families, friends, sororities, civic and professional organizations.

Any group that has a positive or negative influence on a person’s attitude and behaviour.
Membership groups (belong to)
Affinity marketing is focused on the desires of consumers that belong to reference groups.
Marketers get the groups to approve the product and communicate that approval to its
members. Credit Cards etc.!!

Aspiration groups (want to belong to)

Disassociate groups (do not want to belong to)
Honda, tries to disassociate from the "biker" group.

The degree to which a reference group will affect a purchase decision depends on an
individual’s susceptibility to reference group influence and the strength of his/her involvement
with the group.
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• Social Class--

an open group of individuals who have similar social rank. Jamaica is not a classless society.
Class criteria: occupation, education, income, wealth, race, ethnic groups and possessions.

Social class influences many aspects of our lives. IE upper middle class prefer luxury cars
Mercedes.

o Upper -upper-upper class, .3%, inherited wealth, aristocratic names.

o Lower-upper class, 1.2%, newer social elite, from current professionals and corporate
elite
o Upper-middle class, 12.5%, college graduates, managers and professionals
o Lower middle class, 32%, average pay white collar workers and blue collar friends
o Working class, 38%, average pay blue collar workers
o Upper-lower class, 9%, working
o Lower-lower class, 7%,

Social class determines to some extent, the types, quality, quantity of products that a person
buys or uses.

Lower class people tend to stay close to home when shopping, do not engage in much pre-
purchase information gathering.
Stores project definite class images.

Family, reference groups and social classes are all social influences on consumer behaviour.
All operate within a larger culture.

• Culture and Sub-culture--

Culture refers to the set of values, ideas, and attitudes that are accepted by a homogenous group
of people and transmitted to the next generation.

Culture also determines what is acceptable with product advertising. Culture determines what
people wear, eat, reside and travel. Cultural values in the US are good health, education,
individualism and freedom.

Different society, different levels of needs, different cultural values.

Culture can be divided into subcultures:

o geographic regions
o human characteristics such as age and ethnic background.

.
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Culture affects what people buy, how they buy and when they buy.

Understanding Consumer Buying Behaviour offers consumers greater satisfaction (Utility). We must
assume that the company has adopted the Marketing Concept and are consumer oriented.

• The study of how and why people purchase goods and services is termed consumer buying
behaviour . The term covers the decision-making processes from those that precede the
purchase of goods or services to the final experience of using the product or service. Models of
consumer buying behaviour draw together the various influences on, and the process of, the
buying decision. They attempt to understand the proverbial 'blackbox' of what happens within
the consumer between his or her exposure to marketing stimuli and the actual decision to
purchase.

Figure Black box model of consumer buying behaviour

Source: Keegan et al. (1992, p. 193)

The essence of the model is that it suggests consumers will respond in particular ways to different
stimuli after they have 'processed' those stimuli in their minds. In more detail, the model suggests that
factors external to the consumer will act as a stimulus for behaviour, but that the consumer's personal
characteristics and decision-making process will interact with the stimulus before a particular
behavioural response is generated.

It is called the 'black box' model because we still know so little about how the human mind works. We
cannot see what goes on in the mind and we don't really know much about what goes on in there, so it's
like a black box. As far as consumer behaviour goes, we know enough to be able to identify major
internal influences and the major steps in the decision-making process which consumers use, but we
don't really know how consumers transform all these data, together with the stimuli, to generate
particular responses.

Turn now to the following reading to begin looking at your text's introduction to buyer behaviour.

Psychological influences
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• Kotler et al. (2004) elaborate on several psychological variables influencing consumer buying
behaviour:
• perception
• motivation
• learning
• beliefs and attitudes
• personality and self concept.
• If you look back to Figure 4.1 you will note that Keegan et al. (1992) refer to these as being
included in the buyer's mind or internal factors.

Although your text covers the remaining psychological variables well, it is worth mentioning the
importance of attitudes. An attitude is a learned, relatively enduring feeling of being favourable or
unfavourable towards something, whether that might be, say a particular outlet, product or brand. As
attitudes are learned, they are difficult to change and they lead people to act fairly consistently towards
similar objects. As marketers, therefore, it is much more appropriate that we should try to match our
products to people's attitudes rather than try to change those attitudes. This is particularly relevant for
international marketing, so please keep it in mind when you study the following reading on an
international aspect of consumer behaviour.

Activity

The three selective processes are very relevant to your study habits as a student (a consumer of this
course). So:

1. Think of, and write down, an example of selective exposure which relates to your study
activities.
2. Do the same for selective distortion (also known as selective perception) and selective
retention.
3. Then answer the following question: how can I apply this information to improve my study
habits?

Cultural and social influences

• Your text suggest that there are a number of social and cultural influences:
• culture and sub-culture
• social class
• household types
• reference groups
• roles and status.

Marketers understand family purchasing behaviour in terms of the family life-cycle as well as the role
of individual family members. Table 4.1 presents the traditional family life-cycle in terms of the
opportunities each stage provides for marketing. However, demographic changes are altering the
traditional family life-cycle.

Table The traditional family life-cycle :

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Stage in cycle Characteristics Opportunities for marketing

Bachelor, male Independent; young; early Clothing; automobile; stereo;

or female stage of career; low travel; restaurants; entertainment;
earnings, low appeal to status
discretionary income
Newly married Two incomes; relative Apartment furnishings; travel;
independence; present- clothing; durables; appeal to
and future-oriented enjoyment and togetherness
Full nest I Youngest child under 6; Goods and services geared to
one to one-and-a-half child; home; family-use items;
incomes; limited practicality of items; durability;
independence; future- safety; pharmaceuticals; appeal
oriented to economy; child care
Full nest II Youngest child over 6, Savings; home; education; family
but dependent; one-and-a- vacations; child-oriented
half to two incomes; at products; some interest in
least one spouse luxuries; appeal to comfort and
established in career; long-range enjoyment
future-oriented
Full nest III Youngest child living at Education; expensive durables
home, but independent; for children; replacement and
highest income level; improvement of parents'
thoughts of future durables; appeal to comfort and
retirement luxury
Empty nest I No children at home; Vacation home; travel; clothing;
independent; good entertainment; luxuries; appeal to
income; thoughts of self self-gratification
and retirement
Empty nest II Retirement; less income Travel; recreation; living in new
and expenses; present- home; pharmaceuticals and
oriented health items; little interest in
luxuries; appeal to comfort at a
low price

Sole survivor I Only one spouse alive; Immersion in job and friends
actively employed; leading to interest in travel,
present -oriented; good clothing, health and recreation
income areas; appeal to productive
citizen
Sole survivor II Only one spouse alive; Travel; recreation;
retired; some feeling of pharmaceuticals; security; appeal
futility; less income to economy and social activity

Source: Evans and Berman (1992, p. 146)

• Now it is time to review what your text has to say about the social and personal influences
which act as stimuli in consumer behaviour whilst the reading illustrates how advertisers are
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using their knowledge of women and the family to promote products. It is also a good
opportunity to read through an article by Dessler (1990), which although written over a decade
ago, provides some excellent examples of what we have been discussing in a maritime context.

The decision-making process

Thus far we have discussed the influences that affect what products a consumer decides to purchase.
However, the consumer is yet to make an actual decision! Let us look now at what is involved in
actually making those decisions. Kotler et al. (2004) outline four major types of decision-making
behaviour that a consumer uses. They are:

• complex buying behaviour

• dissonance-reducing buying behaviour
• habitual buying behaviour
• variety seeking buying behaviour.
• Your next reading defines the above decision-making behaviours and introduces you to the
five-step decision-making process consumers go through when accepting or rejecting a new
product. The reading is also useful because it discusses the decision process for purchasing new
products.

• Even though in your role you may be dealing largely with organisations, you will still need to
be familiar with consumer buying behaviour. For example, the demand for consumer goods
that pass through ports is driven by the social and psychological factors we discussed earlier.

CONCLUSION

The essence of the marketing concept is understanding consumer needs and developing products that
meet these needs effectively. And yet, every scores of new product are withdrawn from the
market soon after their introduction; many other products also “fail” when their sales fall short of
providing the revenues needed both to cover their development costs and to generate profits
clearly, understanding consumer needs is a complex issue.Most of the new products introduce,
including failed products, fall within the product categories sold in supermarkets- such as food,
beverages, household maintanance, personal care, baby care and other categories. In an effort to
pinpoint causes of product failures in these areas, an organization named new product works
maintains a vast collection of foods, beverages, household, and personal care products that were
introduced and subsequently withdrawn from the marketplace.
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BIBLIOGRAPHY:

• www.google.com
• www.casestudy.com
• www.mbaguyes.com
• www.scribd.com
• Leon Schiffman :