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Economic Definition of consumer behavior. Defined.

Term consumer behavior Definition: Actions (that is, behavior) undertaken by people (that is, consumers) that involve the satisfaction of wants and needs. Such actions often, but not always, involve the acquisition (that is, purchase) of goods and services through markets. The study of consumer behavior is fundamental to the understanding of the demand-side of the market. From a marketing perspective, the patterns, actions or steps in the process of decision making by consumers. The decision making process is influenced by various attitudes, motives, and social influences on the purchaser. Buyers tend to behave in certain ways including habits, brand loyalty, and post purchase behavior.

Chapter 6 Class Notes
Contents of Chapter 6 Class Notes
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What is Consumer Buying Behavior? Stages of Consumer Buying Behavior? Types of Consumer Buying Behavior. Categories That Effect Consumer Buying Behavior. o Personal o Psychological o Social Please Email alex@udel.edu any comments Return to Syllabus Return to Homepage

What is Consumer Buying Behavior? Definition of Buying Behavior: Buying Behavior is the decision processes and acts of people involved in buying and using products.

Need to understand:
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why consumers make the purchases that they make? what factors influence consumer purchases? the changing factors in our society.

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

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Buyers reactions to a firms marketing strategy has a great impact on the firms 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.

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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.

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 o o o

chinese food indian food burger king klondike kates etc

5.. products visible to others. May decide that you want to eat something spicy. Marketers try to influence by "framing" alternatives. product availability. Rank/weight alternatives or resume search. Cognitive Dissonance. method of purchase etc. have you made the right decision.3. Return to Contents List Types of Consumer Buying Behavior Types of consumer buying behavior are determined by:   Level of Involvement in purchase decision. Information from different sources may be treated differently. 6. After eating an indian meal. after sales communication etc. This helps reduce cognitive dissonance when a marketer can answer any concerns of a new consumer. Importance and intensity of interest in a product in a particular situation. This can be reduced by warranties. 4. Types of risk:    Personal risk Social risk Economic risk The four type of consumer buying behavior are: . includes product. Handout. high priced goods. and the higher the risk the higher the involvement.Pillsbury 1-800#s 1-800 #s gives the consumer a way of communicating with the marketer after purchase. Evaluation of Alternatives--need to establish criteria for evaluation. may think that really you wanted a chinese meal instead. High involvement purchases--Honda Motorbike. Post-Purchase Evaluation--outcome: Satisfaction or Dissatisfaction. Purchase--May differ from decision. features the buyer wants or does not want. store. Purchase decision--Choose buying alternative. Buyers level of involvement determines why he/she is motivated to seek information about a certain products and brands but virtually ignores others. time lapse between 4 & 5. indian gets highest rank etc.. package. If not satisfied with your choice then return to the search phase. Can you think of another restaurant? Look in the yellow pages etc.

no conscious planning. making a purchase decision will be affected by the following three factors: Personal 2. Examples include soft drinks. milk etc. or a meal with a couple of friends will also determine the extent of the decision making. need very little search and decision effort. but limited decision making for someone else. Information from the companies MM. For example: Going out for dinner for one person may be extensive decision making (for someone that does not go out often at all). expensive and/or infrequently bought products. When you need to obtain information about unfamiliar brand in a familiar product category. perhaps. The reason for the dinner. education. homes. Social 1. Psychological 3. The marketer must be aware of these factors in order to develop an appropriate MM for its target market. purchased almost automatically. snack foods. Return to Contents List Categories that Effect the Consumer Buying Decision Process A consumer. Examples include Clothes--know product class but not the brand. High degree of economic/performance/psychological risk. The purchase of the same product does not always elicit the same Buying Behavior. friends and relatives. Spend alot of time seeking information and deciding. Return to Contents List . Go through all six stages of the buying process. Product can shift from one category to the next. Examples include cars. unfamiliar. Limited Decision Making--buying product occasionally. computers.    Routine Response/Programmed Behavior--buying low involvement frequently purchased low cost items. Impulse buying. Extensive Decision Making/Complex high involvement. Requires a moderate amount of time for information gathering. store personnel etc. whether it is an anniversary celebration.

. Upon extensive research it was determined that the product did sell well in inner-city . Handout. Demographic Factors. Young people purchase things for different reasons than older people... The product was not selling well.Nutrament Debunked. Sex.. MASLOW hierarchy of needs!! o o o o o Physiological Safety Love and Belonging Esteem Self Actualization Need to determine what level of the hierarchy the consumers are at to determine what motivates their purchases. not just one.. Actions are effected by a set of motives. Return to Contents List Psychological factors 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... Race.. Handout. It was therefore targeted at consumers whose needs were for either love and Belonging or esteem. a product marketed by Bristol-Myers Squibb originally was targeted at consumers that needed to receive additional energy from their drinks after exercise etc. Nutrament. If marketers can identify motives then they can better develop a marketing mix. and was almost terminated.From choices to checkout. a fitness drink.Personal Unique to a particular person. Highlights the differences between male and female shoppers in the supermarket. Who in the family is responsible for the decision making.. Age etc.

Selective Distortion-Changing/twisting current received information. A current example. Can't be expected to be aware of all these inputs. Exposed to 1. Motives often operate at a subconscious level therefore are difficult to measure. Average supermarket shopper is exposed to 17. Information inputs are the sensations received through sight. They would purchase Nutrament as a substitute for a meal. organizing and interpreting information inputs to produce meaning. forgets those that don't..000 products in a shopping visit lasting 30 minutes-60% of purchases are unplanned.MCI and AT&T. . taste. intensity of input changes (sharp price drop). More likely if it is linked to an event. and certainly will not retain many.500 advertisement per day.  Perception-- What do you see?? Perception is the process of selecting.. have to be very careful that consumers do not distort the facts and perceive that the advertisement was for the competitor. hearing. Their motivation to purchase was completely different to the motivation that B-MS had originally thought. organize it and interpret it. satisfies current needs. Selective Exposure-select inputs to be exposed to our awareness. IE we chose what info we pay attention to. BM-S therefore had to redesign its MM to better meet the needs of this target market. These consumers were at the Physiological level of the hierarchy. inconsistent with beliefs.do you ever get confused? Selective Retention-Remember inputs that support beliefs. It was determined that the consumers for the product were actually drug addicts who couldn't not digest a regular meal. Advertisers that use comparative advertisements (pitching one product against another).. smell and touch.convenience stores..

Need to sell a whole new country. and hence its products. need to give them new information re: product.open bottle of wine and pour it!! Also educate american consumers about changes in SA. Non-alcoholic Beer example: consumers chose the most expensive six-pack.. Handout..free sample etc.South Africa wine. because they assume that the greater price indicates greater quality. South Africa. ..Interpreting information is based on what is already familiar. on knowledge that is stored in the memory.. buyers must process information... When making buying decisions. Consumers have strong perceptions of the country.. Therefore to change consumers' behavior about your product. Consumer attitudes toward a firm and its products greatly influence the success or failure of the firm's marketing strategy.. Learning.. changes in a person's behavior caused by information and experience... Learning is the process through which a relatively permanent change in behavior results from the consequences of past behavior. Problems marketing wine from South Africa. Inexperience buyers often use prices as an indicator of quality more than those who have knowledge of a product.  Attitudes-- Knowledge and positive and negative feelings about an object or activitymaybe tangible or intangible. living or non. Knowledge is the familiarity with the product and expertise..  Ability and Knowledge-- Need to understand individuals capacity to learn.Drive perceptions Individual learns attitudes through experience and interaction with other people..living.

Exxon Valdez-nearly 20.  Personality-- all the internal traits and behaviors that make a person unique. IE brand loyalty.Oldsmobile.. Examples include: o o o o o o o o o o o Workaholism Compulsiveness Self confidence Friendliness Adaptability Ambitiousness Dogmatism Authoritarianism Introversion Extroversion Aggressiveness .. late 1950s. Attitudes and attitude change are influenced by consumers personality and lifestyle. Oldsmobile vs. Honda "You meet the nicest people on a Honda".. baby boomers aging. To change this they have a new slogan "Come ride with us".. There is a difference between attitude and intention to buy (ability to buy). uniqueness arrives from a person's heredity and personal experience. Distort information to make it consistent and selectively retain information that reinforces our attitudes. Hondas market returning to hard core.. Changing market of the 1990s. dispel the unsavory image of a motorbike rider.Handout. Lexus. Consumers screen information that conflicts with their attitudes.. due to consumers attitudes toward Oldsmobile (as discovered by class exercise) need to disassociate Aurora from the Oldsmobile name.000 credit cards were returned or cut-up after the tragic oil spill.

. are influenced by opinion leaders....they actually use (pay) spokespeople to market their products. natural lifestyle.Chevy Chase  Roles and Family Influences-- . person's family. There is a weak association between personality and Buying Behavior. Now an assault by the American Academy of Dermatology. McDonalds. Lifestyles are the consistent patterns people follow in their lives. motives etc. Michael Jordon (Nike. Sun tan not considered fashionable in US until 1920's.edu the results.. Marketers try to attract opinion leaders. Consumers buy products that are consistent with their self concept.OJ Simpson. Gatorade etc. EXAMPLE healthy foods for a healthy lifestyle. reference groups. Traits effect the way people behave.  Lifestyles-- Recent US trends in lifestyles are a shift towards personal independence and individualism and a preference for a healthy.) Can be risky. Handout.. complete the survey and Email alex@udel. to access Value and Lifestyles (VALS) Program. social class and culture. Nike ads.. Extra credit assignment from the news group. learning..o Competitiveness. this may be due to unreliable measures. Marketers try to match the store image to the perceived image of their customers.. Return to Contents List Social Factors Consumer wants. This is a survey tool that marketers can use to better understand their target market(s).Here Comes the Sun to Confound Health Savvy Lotion Makers.Michael Jackson...  Opinion leaders-- Spokespeople etc.

. youngest child 6 or over full nest III.most of BUAD301 newly married. People have many roles.things you should do based on the expectations of you from your position within a group. Individuals role are continuing to change therefore marketers must continue to update information. Handout. youngest child under 6 full nest II. no children. older married couples with no children living with them. Family is the most basic group a person belongs to. no children living at home.. in labor force solitary survivor. young. and therefore tends to let them influence purchase decisions in order to alleviate . employer/ee.... family has less time for children..me full nest I. Husband.. The Family life cycle: families go through stages.. each stage creates different consumer demands: o o o o o o o o o o bachelor stage. the decision maker within the family unit is changing. head in labor force empty nest II. head retired solitary survivor. Marketers must understand: o o o o o that many family decisions are made by the family unit consumer behavior starts in the family unit family roles and preferences are the model for children's future family (can reject/alter/etc) family buying decisions are a mixture of family interactions and individual decision making family acts an interpreter of social and cultural values for the individual.also. older married couples. older married couples with dependant children empty nest I.Two Income Marriages Are Now the Norm Because 2 income families are becoming more common. retired Modernized life cycle includes divorced and no children...Role. father.

 Social Class-- an open group of individuals who have similar social rank. occupation. civic and professional organizations. (Children influence about $130 billion of goods in a year) Children also have more money to spend themselves. managers and professionals . Lower-upper class.5%. Membership groups (belong to) Affinity marketing is focused on the desires of consumers that belong to reference groups. Social class influences many aspects of our lives.  Reference Groups-- Individual identifies with the group to the extent that he takes on many of the values. o o o Upper Americans-upper-upper class. education. friends. inherited wealth. race. Credit Cards etc. from current professionals and corporate elite Upper-middle class. IE upper middle class Americans prefer luxury cars Mercedes. college graduates. US is not a classless society. aristocratic names. 1.2%. The degree to which a reference group will affect a purchase decision depends on an individuals susceptibility to reference group influence and the strength of his/her involvement with the group. wealth. tries to disassociate from the "biker" group. 12.!! Aspiration groups (want to belong to) Disassociate groups (do not want to belong to) Honda.3%. Families. newer social elite. income. sororities. Marketers get the groups to approve the product and communicate that approval to its members.some of the guilt. attitudes or behaviors of the group members. Any group that has a positive or negative influence on a persons attitude and behavior. ethnic groups and possessions. . US criteria.

but that is my opinion!!.. IE change in meals. 9%. different levels of needs. teenage and Asian American. 7%. Lower class people tend to stay close to home when shopping. and attitudes that are accepted by a homogenous group of people and transmitted to the next generation. eat.. how they buy and when they buy.Will British warm up to iced tea? No. do not engage in much prepurchase information gathering. Cultural values in the US are good health. 38%.o o o o Middle Americans-middle class. reside and travel. Culture effects what people buy. average pay white collar workers and blue collar friends Working class. quantity of products that a person buys or uses. In american culture time scarcity is a growing problem. ideas. on welfare Social class determines to some extent. All operate within a larger culture... average pay blue collar workers Lower Americans-lower class. Family. . Culture determines what people wear. different cultural values.. Culture also determines what is acceptable with product advertising. 32%. reference groups and social classes are all social influences on consumer behavior. quality. IE West Coast. Culture can be divided into subcultures: o o geographic regions human characteristics such as age and ethnic background. Stores project definite class images. the types. not on welfare Lower-lower class. Handout. working. individualism and freedom.Tea is a part of the British culture. Different society. education.  Culture and Sub-culture-- Culture refers to the set of values. Big impact on international marketing. hot with milk..

The outline for auditing consumer behavior has been simplified and generalized below. consistent with the determined product position at which title to the product is relinquished or the service is performed. or Internet. consumers) into groups with similar needs to satisfy for product development and media selection. wholesale. Customer Influences External influences . Customer satisfaction – post-purchase policies to promoted customer use. Price – pricing policy consistent with the determined product position. Product – physical product characteristics or service to be experienced for each market segment. website. Product positioning – determination of a desirable product or brand position in the mind of the consumer relative to competing brands. We must assume that the company has adopted the Marketing Concept and are consumer oriented. Promotion – advertising. but the execution of the process can be invaluable for identifying challenges and opportunities for improving marketing strategy. reference and repeat purchases. learning. Place (Distribution Strategy) – channel or distribution strategy. such as time. promotion. loyalty. telemarketing and direct sales force activities.e. patience. such as retail. Auditing Consumer Behavior: A Process for Building Marketing Strategy A complete understanding of the influences that affect consumer behavior is an essential foundation for building a marketing strategy. etc. Hawkins.Understanding Consumer Buying Behavior offers consumers greater satisfaction (Utility).. Best. Marketing Decision Areas Market segmentation – division of all possible product users (i. publicity. The price is the all inclusive set of consideration that the consumer must tender in exchange for the product or service. and money. visual packaging. and Coney (2001) suggested a process for identifying information associated with the critical decisions that marketing managers must make about major elements of marketing.

. subculture..g. stages)       Problem recognition Information search Alternative evaluation Outlet selection Purchase Post-purchase processes (e. and social class Reference groups and family / households Marketing activities by the company (e. it is possible to outline the areas in which data should be gathered in order to construct a complete consumer behavior audit template as follows: .    Culture. product attributes. and retail outlet) Internal influences     Needs. and emotions Perceptions. income. product or offer communications. packaging. and values Demographics. purchase.e.. motives. sales presentation. disposition. learning and memory Personality and lifestyle Attitudes Situation influences      Physical features Time perspective Social surroundings Task definition Antecedent states and situations (e. or definition) Decision process influences (i. use. and evaluation) By interweaving the decision areas with the relevant customer influences listed above.. advertisements.g. use.g.

4 million lower middle income households ( US$ 581 to US$ 1162).8 million households in India. Among the total 164. different segments of An important and recent development in India’s consumerism is the emergence of the rural market for several basic consumer goods. status. 19.7 million middle income group (US$ 1162 to . Three-fourths of India’s population lives in rural areas. followed by 50. India is a lucrative market even though the per capita income in India is low and it remains a huge market. and contribute one-third of the national income. This rural population is spread all over India. India is a big country with 28 states. 80.0 Introduction This study on Indian consumer behavior is aimed at helping Malaysian businessmen to get a better understanding of the Indian market place thus enabling them to embark on selected strategies to effectively reach the Indian consumers. the marketing manager should have a thorough understanding of the influences on consumer behavior and the key decision areas in which the influences are activated. even for costly products. over one billion people and 120 dialects/languages. PRODUCT MARKET STUDY: CONSUMER BEHAVIOR IN INDIA Date : October 2005 MATRADE CHENNAI 1.7 million households comes under low income group ( <US$ 581 ). in close to 0. based on class. From the market perspective. and income.       Step 1: Market segmentation (…) Identify customer influences Step 2: Product positioning (…) Identify customer influences Step 3: Price (…) Identify customer influences Step 4: Place (Distribution strategy) (…) Identify customer influences Step 5: Promotion (…) Identify customer influences Step 6: Product (…) Identify customer influences Step 7: Customer satisfaction (…) Identify customer influences By completing the above steps and answering all the associated questions regarding customer influences at each of the stages. people of India comprise consumers.6 million villages.

. 3. the role of history and tradition in shaping the Indian consumer behavior is quite unique. They are traditional in their outlook. The conservative segment is the reflection of the true Indian culture. They are always looking for something different. They look for durability and functionality but at the same time are also image conscious. These values are far more dominant that values of ambition and achievement. and spend a good amount on luxury goods. Perhaps. hair oils and tooth powder existing with shampoos and toothpaste. spend more time with family than in partying and focus more on savings than spending. This orientation in fact. Brands with identities that support family values tend to be popular and accepted easily in the Indian market.8 million high income group (>US$ 2465). Indian consumers have a high degree of family orientation. one sees traditional products along side modern products. Socialites are also very brand conscious and would go only for the best known in the market. 8.US$ 1190 ). luxury brands have to design a unique pricing strategy in order to get a foothold in the Indian market. 2. they seek a lot of information before making any purchase. go to clubs on weekends. exclusive products.2 million upper middle income group (US$ 1790 to US$ 2465 ) and 5. cautious in their approach towards purchases.0 3. Such orientation to value has labeled Indians as one of the most discerning consumers in the world. care and affection. Apart from psychology and economics.0 Characteristics Of The Indian Consumer Behavior The Indian consumers are noted for the high degree of value orientation.1 Different Segments Of Indian Consumers The Socialites Socialites belong to the upper class. Indian consumers are also associated with values of nurturing. only in India. extends to the extended family and friends as well. They go for high value. Product which communicate feelings and emotions gel with the Indian consumers.2 The Conservatives The Conservatives belong to the middle class. For example. They are the darlings of exclusive establishments. They prefer to shop in specialty stores. Even. 3. Slow in decision making.

900. They aspire to social status and power. belong to this category.2 The Super Rich The Super Rich have income greater than US$22. 4. Some rich farmers. 4.per annum.961.1 The Rich The rich have income greater than US$11. if not better.per annum.000/. but often have to settle for the more affordable one. These habits in turn affect their purchasing habits where they are trying to go for the middle and upper middle level priced products. which has seen a tremendous growth in the late nineties. There are some DINK households of middle-level executives. There is no typical profile of the ultrarich. They consume services greatly. who have been rich for a long time. therefore. They buy many durables and are status conscious. to attain the super-rich status. 4. backgrounds are distinctly middle class. The Super Rich are mainly professionals and devoted to consumerism. she is rubbing shoulders with men. Some single earning households are of first generation entrepreneurs. proving herself to be equally good. They do not have a homogenous profile. . They own multiple cars and houses.000/. The number of households in this category is 98. Total number of households is 320. The working woman today has grown out of her long-standing image of being the homemaker.3 The Working Women The working woman segment is the one. Total household having such incomes are 1. This segment has opened the floodgates for the Indian retailers.0 India’s Rich India’s rich can be categorized into five major categories as follows: 4.000/.058.863. They spend more on leisure and entertainment-activities than on future looking investments. There are less DINK families here than in the rich category. Working women have their own mind in decision to purchase the products that appeal to them. These people are upwardly mobile. Across the category.per annum.per annum.3 The Ultra Rich The Ultra Rich have income greater than US$44. Some of them in this category are Double Income No Kids (DINK) households.000/.289.4 The Sheer Rich The Sheer Rich is made up by households having income exceeding US$110. 4. Such households are 20. Today. 3. There are joint families as well as nuclear families in this category.They prefer high value consumer products. They aspire.

1 Marketing Strategies Online Marketing A study by the Confederation of Indian Industry (CII) and the International Trade Centre predicts that e-commerce activity in India will rise from US$ 0. 5. A variety of people belong to this category.000/. They crave for exclusivity in what they buy. there is a significant increase of consumer awareness among the Indians. as a result of the increasing literacy in the country.per annum. and are knowledgeable about technology. This awareness has made the Indian consumers seek more and more reliable sources for purchases such as organized retail chains that have a corporate background and where the accountability is more pronounced.16 billion. products and the market and are beginning to demand benefits beyond just availability of a range of products that came from ‘trusted’ manufacturers. The Indian rural market has been growing at 3-4% per annum. exposure to the west. There are hardly 6.0 Rural Consumer About three quarters of the Indian population are in the rural areas and with the growing middle class. the spill over effect of the growing urban middle class is also felt in the rural areas. 7. 6. specially in the Indian cities.0 7. satellite television. The consumer also seeks to purchase from a place where his/her feedback is more valued. it is becoming an important market place for fast moving consumer goods as well as consumer durables.515 such households in India. Indian consumers are now more aware and discerning. The Indian consumers are price sensitive and prefer to buy value for money products. Most premium brands are relevant to them. Some of them are techies. The market size of the fast moving consumer goods sector is projected to more than double to US$ 23.25 billion by 2010 from the present US$ 11.10 million . They are first-generation entrepreneurs who have made it big.4.0 Increasing Awareness Of Indian Consumers Over the years. foreign magazines and newspapers.5 The Obscenely Rich The Obscenely Rich is made up of households having income exceeding US$222. adding more than 1 million new consumers every year and now accounts for close to 50% of the volume consumption of fast-moving consumergoods (FMCG) in India. As a result. They are just equivalent to the rich in the developed countries. Today more and more consumers are selective on the quality of the products/services.

expomarkets. In the midst of the advertisement clutter. In India. cassettes.shopping. When a consumer likes the celebrity in the advertisement. The popular online shops in India include:     www.in www. Celebrities create headlines. they pay more attention to them.2 Celebrity Influence This is an important tool which is able to influence Indian consumer buying behaviour. . he or she is more likely to accept what thecelebrity says about the advertised product and therefore will develop more positive feelings toward the advertisement and the brand itself.ebay. books.reliablegreetings. With the visual media becoming more popular the use of celebrities in the TV media has increased.com www.3 Quality Oriented Outlets Indian consumers looking for quality choose expensive brands as they feel that price is an indicator of quality. the advertisements that celebrities endorse also achieve high recall rates. Famous celebrities are able to attract attention and retain attention by their mere presence in the advertisements. of which the business to business segment will account for US$ 5. Consumers like advertisements more if they are admirers of the celebrities in the advertisements. When people see their favoured reference group members or celebrities in theadvertisements. medicine and educational material. CDs/VCDs/DVDs.8 billion in 2005-06. Celebrities may also help reposition products.41 billion.com 7. What they endorse sell like hot cakes.rediff. Their activities and movements are being closely watched and imitated. The Malaysian businessmen can contact celebrities for endorsing their products through advertising agencies. It is not surprising therefore that using celebrities in advertisements has become common practice. In India especially. 7. The contact addresses are given in the appendix1.in 2000-01 to US$ 5.com www. the products Indian consumers are buying through online are greeting cards. Products with sagging sales needs some boosting and in this Indian celebrities can help by way of they endorsing the product concerned. celebrities are being increasingly used in marketing communication by marketers to lend personality to their products. Indians always love their heroes and heroines. magazines. clothes. Currently.shopping. it is not difficult to look for the reasons as to why companies are increasingly using celebrities.

in the absence of well known brands in selected product range. Some of the established retail outlets in India for selected products are found in Appendix II. Freebies generally comprise tooth paste. In general. 7. Consumers in India are taking lead in prompting manufacturers to adopt technologies to produce ecofriendly products. washing machines. 8. The future key for marketing could be to select more ethical and ecological responsible products and packaging. consumers are likely to take cues from well established retail outlets hoping that these outlets carry quality products.0 8.However. Malaysians can work with the local business partners to attract the consumers by way of such promotion campaigns. costly campaigns may embark on the strategy to engage well known retail outlets to capture the segment of Indian consumers looking for quality products. perhaps should consider giving freebies for the purchases made by the Indian consumers. they take less pain in traditional method of cooking and cleaning. 7. Freebies are consumer products given free of charge as gifts to purchases of selected products above a certain value. Malaysian companies wanting to penetrate the Indian market. Malaysian businessmen who prefer not to go for high-visibility. which is also convenient for consumers.5 Eco-Friendly Products The environmental awareness in India has started affecting marketing of products based upon their eco-friendliness. Indian consumers are likely to buy environmentally responsible products and packs. . balancing environmental concerns with commercial considerations. The working urbanites are depending more on fast and ready-to-serve food. cooking oil etc. and ready made clothes are some of the product categories in which freebies are given to Indian consumers. TVs. thus.1 Changing Trends In Indian Consumer Behaviour Bulk Purchasing Urbanisation is taking place in India at a dramatic pace and is influencing the life style and buying behaviour of the consumers. soaps.4 Freebies Indian consumer buying behaviour is influenced by freebies. detergent. refrigerators.

rather than frequent visits to the neighbourhood market/store/vendor. The Indianconsumer has become much more openminded and experimental in his/her perspective. designer wear. Indian consumers have also developed lifestyles which have emerged from changing attitudes and mind sets. . hitech products are a few instances which reflect these changes. eateries. India’s economic liberalization policies were initiated in 1991. Foreign made furniture is well accepted by the Indian consumers.3 Buyers’ Market In The Making The sellers’ market is slowly moving towards becoming the buyers’ market. Malaysian. exposure to western influences and a need for self-gratification. 8. The popular growing shopping trend among urbanities is purchasing from super markets to hyper stores. There is an increase in positive attitude towards western trends. Foreign brands have gained they include items such as. There is now an exponential growth of western trend reaching the Indian consumer by way of the media and Indians working abroad. Chinese.2 Trendy Lifestyles The current urban middle and upper class Indian consumer buying behaviour to a large extent has western influence. 8. Foreign brands vie increasingly with domestic brands for the growing market in India. Since. watches. many new product offerings have entered the Indian market and product variety has also increased manifold. Beauty parlours in cities.  Beverages  Packed food  Ready to eat food  Pre-cooked food  Canned food  Personal care products  Audio/video products  Garment and apparel  Footwear  Sportswear  Toys  Gift items wide consumer acceptance in India. Italian furniture are growing in popularity in India.Bulk purchases from hyper stores seems to be the trend these days with purchasing becoming more of a once-a-week affair.

Of food expenditure.74 in 2002-03. Food expenditure included US$ 2. The way Indian consumers are spending their money on various items has changed in recent years. vegetables and edible oil and US$3.53 was split up into US$ 10. Non-food expenditure included US$ 1. and another US$1.2 per cent. fuel and light.71 per cent.07 per cent in 1992-93 to 44. Similarly spending on transport and communication has grown at 13.34 was split up into US$ 6. footwear and US$3. US$ 2.56 for non-food. milk products.0 Consumer Spending Behaviour The Indian consumer spending has increased from US$ 133. US$ 2.Import licensing restrictions are being eliminated and tariffs significantly reduced and this has led to large range of consumer goods made available in India. Consumer expenditure hasbeen in tandem with the annual GDP growth. beverages etc. edible oil and US$ 2. . and US$ 5. for food. education. except on cereals and cereal substitutes. milk products.60 in 1992-93 to US$ 350.11 was spent per person per month on fuel and light. a compound growth rate of 19.77 on other non-food items. Other items have increased in importance. medical and healthcare spending has increased from 3. Indian consumers have always preferred foreign goods and with the liberalization. a compound annual growth of 10. for example. conveyance and rent contributed to the gap significantly. vegetables.16. per capita 30 days' consumer expenditure of US$ 12. While the Compound Annual Growth Rate (CAGR) in total consumer spending has been around 12 per cent a year over the past decade.53 for non-food. For the urban sector.16 on others. and US$ 1.37 for milk.00 for clothing. The average monthly per capita expenditures on cereals and cereal substitutes for rural and urban areas are very close to each other.25 for cereals and cereal substitutes. milk and milk products.5 per cent of total expenditure over the same period. they now have a choice of foreign products vis-à-vis the local products. and US$ 2.00 for food and US$ 13. The gap between rural and urban averages of MPCE was of the order of US$ 11. For rural India.8 per cent in 2002-03. there have been sharp ups and downs.13 per cent at current prices.45 on other non-food expenditure. Urban expenditure levels per capita exceeded rural levels for all the product groups.37 went towards cereals and cereal substitutes while US$ 3. 9.67 was spent on milk. The share being spent on the basis (food and beverages) has fallen from 54. The item-groups viz.78.96 on other food items.65 on clothing and footwear and US$9. on an average. average Monthly Per Capita Consumer Expenditure (MPCE) of US$ 23.5 per cent to 8.11 for fuel and light. miscellaneous consumer goods & services.

In India.55.162 – US$1. the higher income group (>US$2. where it was about US$ 5.190) spends more on consumer expendables than the rich. For the Indian market.465) spends more amount of their income on luxury goods and trendy products than fact moving consumer products.0 Conclusion Top class. Malaysian exporters/manufacturers should see the substantial middle class and base the market demand/projections on this roughly estimated at 250 million people with substantial disposable income. Combined the middle and the lower income group provide 60 per cent of the value of the Indian market.Non-food expenditure per person in the urban sector was more than double of that for the rural sector. The middle income group (US$1. 10. middle class and lower class are income related classifications of the population and each of this class has its own consumption pattern. .