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“HOW TO CREATE A HIGH INOLVEMENT IN A LOW INVOLVEMENT PURCHASE”
Submitted By Neha Katyal (8/08) Pranay Sharma (36/08) Anju Bala Ahuja (48/08) Inderdeep Kaur (56/08) Nipun Trikha (58/08) Abhishek Chanana (138/08)
Submitted to: Prof. Kirti Sharma
TABLE OF CONTENTS
Contents Page No.
Title Page List of Contents Acknowledgement Executive Summary Introduction to the problem Rationale and Scope of Study Review of Literature Objective of Study Research Methodology Conceptual Discussion Data Analysis 23
(i) (ii) 1 2 3 4 5-6 7 8 11-15 17
3. 4. 5. 6.
15. Annexure - Questionnaire
A real life project is an integral part of an MBA curriculum. It helps the student to undergo a simulation test of what the student is going to face in his future job sphere and gives a taste of practicality. We feel obliged to express our thanks MS Kirti Sharma, Professor, LBSIM, New Delhi for her continuous support and valuable guidance during the completion of this study. The acknowledgement would not be valid without expressing our sincere thanks to the customers for their cooperation and help in filling the questionnaires.
Group 3 Section B Lal Bahadur Shastri Institute of Management New Delhi
Indian Apparel Industry constitutes both branded and unbranded garments. Branded ready to wear clothing presently have a 24% share in the garment market in India, while unbranded market have around 50% market share. The remaining is catered by tailor made garments. Also of the total market size 46% belongs to men’s, 37% to women’s and remaining 17% to children’s apparel. The branded apparel Industry for men is increasing at a CAGR of 24%, showing a high potential in the market, which are generally considered as a high involvement purchase, especially for the unbranded garment purchasers. Expected to cross 25000 crore by 2010 as per a research by Just Style The aim of the research is was to analyze the factors, which can lead to the conversion of the low involvement purchasers to high involvement purchasers. For this purpose the primary study was done through questionnaires. The data was then clustered in two segments – high and low involvement purchasers and was analyzed using SPSS. It is expected that the results of the analysis will show certain differences in the expected preferences for the attributes of the product while buying for themselves. The results were as per expectations where respondents were divided into two clusters (high involvement and low involvement) and these clusters differed significantly in the stated expectations from the product.
Introduction to the problem
The problem is to create high involvement in a low involvement product. Identify the important characteristics, features, strategies and marketing efforts which can create high involvement in a low involvement product. Find out whether people are ready to pay more for a product category, if yes, why? It would make sense for the marketer to try to shit consumer from a more involved in the product because involvement means commitment involved customer are more likely to remain loyal to marketers brand in face of competitive activity. The customer may be involved with the product but may not be interested in paying more for it. In the research we have to find out what are the factors which will bring the customer out of his shell and pursue him to pay more for the brand or the product. What all factors will push the consumer to pay that extra amount of money and make him loyal to a particular brand?
• • • • • • •
Identifying the motive and basic reasons why people go for expensive apparel. How much time and money they are willing to spend on apparel purchase. The extra benefits which they derive from apparels. Can the product be involved with an involving issue so that the customer can relate to the issue and the product? Can a problem be identified which already exists in the consumers mind but he is unaware about the fact which can be solved by the marketer. Can the product be linked with an involving advertisement like in case of airtel in the hope that customer will establish some link with the product. If some new attribute can be added to the product which will make the customer more attached to the product.
Rationale and Scope of study
The reaserch has been conducted to answer the following question so that we can
map the consumers mind set and track his basic motives before going for a purchase.
• Identifying the motive and basic reasons why people go for expensive apparel. • • How much time and money they are willing to spend on apparel purchase. The extra benefits which they derive from apparels.
• Can the product be involved with an involving issue so that the customer can relate to the issue and the product? • Can a problem be identified which already exists in the consumers mind but he is unaware about the fact which can be solved by the marketer. • Can the product be linked with an involving advertisement like in case of airtel in the hope that customer will establish some link with the product.
If some new attribute can be added to the product which will make the customer more attached to the product.
Scope of the study Geographical Scope The primary data for the purpose of analysis has been collected only from Delhi/NCR region. Product Scope In order to analyze the factors that create high involvement in low involvement purchase we have restricted ourselves to men’s apparel only. Time scope
Data has been collected within a period of two weeks from August 2, 2009 to August 14, 2009.
Review of Literature
India has approximately 30,000 readymade garment manufacturing units and around three million people are working in the industry. A gamut of attires and outfits are created by these apparel and fashion manufacturers India which are later on circulated and sold in different corners of the country by apparel and fashion distributors in India. There has been significant increase in customer spending in this segment, reflecting the changing consumer behavior. Per capita GDP spending on apparel increased to 5.8% in 2006 from 4.9% in 2003. Indian Apparel Industry constitutes both branded and unbranded garments. Branded ready to wear clothing presently have a 24% share in the garment market in India, while unbranded market have around 50% market share. The remaining is catered by tailor made garments. Also of the total market size 46% belongs to men’s, 37% to women’s and remaining 17% to children’s apparel. The men’s apparel industry is expected to increase at a CAGR of 14.86 % during the period from 2008-2010.Segment wise men’s apparel Industry classification includes: Formal wear, casual wear, night wear woolens and others. The major players in branded men’s apparel includes Madura Garments, Provogue India Ltd., Raymond Apparel Ltd., Pantaloon Retail (India) Ltd., Levi Strauss & Co. etc The branded apparel Industry for men is increasing at a CAGR of 24% and is expected to cross 25000 crore by 2010 as per a research by just style. In 2007, men’s apparel industry was mainly dominated by shirts (in value terms) accounting for 36.5% of total men’s segment
Objective of Study
To determine the factors that would transform a Low Involvement Product to a High Involvement Product
1. Primary Research
Primary data is collected through personal interviews with the help of structured questionnaires.
Sampling Technique: Convenient Sampling Sample Unit: Male in the age group of 25-40 Sample Frame: Delhi/NCR Sample Size: 91
2. Secondary Research A secondary literature revive will be done to study the strategies used by brands and products who have switched from a low involvement product to a high involvement product. The various benefits they have derived in the process and can any of the similar strategy be used for apparels.
After conducting the primary and the secondary research the data obtained will be analyzed and the factors which can make a product from low involvement to a high involvement will be identified.
In the end a strategy for converting a low involvement product to high involvement product will be formulated and the benefits from doing the same will pointed out.
CONCEPTUAL DISCUSSION Customer involvement can be defined in the terms of level of engagement and active processing undertaken by a consumer in response to a marketing stimulus. It also impacts other aspects of consumer behavior like brand loyalty a product is able to generate or the price premium that products commands. The concept of low and high involvement choice can better be understood based on three theories (a) The theory of passive learning developed by Krugmen (b) The theory of social Judgment developed by sheriff (c) Elaboration Likelihood Model developed by Petty and cacioppo.
Krugmen’s Theory of Passive learning The theory hypothesized that a low involvement medium like TV results in passive learning. This is because the viewer is in a relaxed state and does not pay much attention to the message. He does not link the message to his or her needs brand beliefs and past experience. The respondent hence shows a high level of recall for a particular TV advertisement but the advertisement has little influence on brand attitude. In contrast print media (magazines and newspapers) are high involvement media because advertising is inanimate and reader is animate. The pace of exposure is within reader’s control, the reader has more opportunity to reflect on advertising. As per the Krugmen’s theory of passive learning the low involvement view holds the following principles:
1. Consumer learn information at random. 2. Consumers are information catchers in contrast to high involvement where they are information seekers. 3. Consumer represents a passive audience for advertising. 4. Consumers evaluate brands after buying. 5. Consumer seek an acceptable rather than optimum level of satisfaction.
6. Personality and life style characteristics are not related to consumer behavior.
7. Reference group exert little influence on consumers in low involvement conditions.
Sheriff’s Theory of Social Judgement Sheriff theory explains individual position in terms of involvement by identifying latitude of acceptance, latitude of rejection and latitude of non commitment. A highly involved individual who has a definite opinion about an issue would accept few other positions and would reject a wide number of positions (narrow latitude of acceptance and wide latitude of rejection). An uninvolved individual would find more positions acceptable (wide latitude of acceptance) or would have no opinion of the issue (wide latitude of non commitment). A highly involved individual who agrees with the message (with his or her latitude of acceptance) interprets it as more positive than actually is. This action represents an assimilation effect. A message that individual disagrees with (within latitude of rejection) is interpreted as more negative than actually is. This reaction represents contrast effect.
Elaboration Likelihood Model Petty and Cacioppo’s Elaboration Likelihood Model (ELM) is a third theory that provides insight into uninvolved customers. Illustrating how consumers process information in high and low involvement conditions, the model presents a continuum from elaborate (central ) processing to non-elaborate (peripheral processing). The degree of elaboration depends on consumer’s
motivation to process information. If consumers are more involved, they are more motivated to process information , leading to more elaborate central processing. Less involved customers are less motivated to process information leading to non elaborate (peripheral processing). Motivation to process the message is closely related to its relevance in meeting consumer needs. The more relevant the message, the more likely the consumers are to develop thoughts in support of or counter too its content. Thus the arthiritis affected consumer viewing a commercial for a pain reliever that claims to relieve of the pain of arthiritis is more likely to elaborate on the message as compared with a consumer who rarely encounters such pain. Uninvolved consumers are unlikely to develop such message relevant thoughts. Elaboration is minimal because consumers are not motivated to process the information. They act as passive recipients of information. Petty and Cacioppo’s distinction between high and Low Involvement is similar to Krugman’s distinction between active and passive consumers. ELM focuses on the consumer’s response to the message ( in support of or against ) and the nature of the stimuli that are most likely to persuade the active or passive information processor where as Krugman’s model focuses on message exposure and comprehension. Converting a Low involvement purchase to high involvement Marketer use techniques to convert a low involvement product into a high involvement product. These techniques may revolve around either improving the product features or improving the value communication through advertisement or other mediums. To present the steps form the marketer point of view, increasing the involvement of a customer in a product may involve following steps:
Figure 1: MARKETING
*American Marketing Association
1. Value creation is done by identification of customer needs and designing a product that satisfies those needs. Example apparels can provide following types of benefits.
2. Value communication helps in carving a distinct identity through brand positioning
activities. Eg brands like pantaloons create an identity for themselves by using extensive advertisements
3. Value delivery involves post purchase activities that helps in building a long lasting
relationship. Eg most retail shops today have features like filling coupons to provide discounts on future purchases etc
Questionnaire was designed in such a manner to derive two pieces of information: Determine whether men’s apparel is LIP or HIP for respondent Are benefits sought by these two categories different? If so, we can find a way to transform our product from LIP to HIP There were certain limitations of the questionnaire which will be discussed in the last section but the present questionnaire served the purpose of providing the above mentioned information. It found out whether a person with low involvement in buying process or a person with high involvement on the basis of question no. 1, 2, 3, 4, 7 and 8. These questions seek to define the cluster on the basis of variables like: Frequency of buying, time spent, amount spent, priority (Discount or occasion or new launch), brand loyalty and exact need (whether exact need is known or not) Question no. 5 was meant to study the difference in the expectations of the people of different groups on variables like: quality, price, size/fit, design, brand name, durability, status There were other factors like age and favorite brands which were also included.
We had 91 filled up questionnaire. The data from these questionnaire was analyzed through following techniques: CLUSTER ANALYSIS : This technique was applied to find out different segments that exist in the market of branded apparel for men. Cluster analysis is a techniques where responses are analyzed to find out existing segmentation. We performed cluster analysis for following questions:
1. How often do you buy clothes in a month? 2. What is the average amount in rupees you spend when you go to buy clothes? 3. Once on a visit, approximately how much time do you spend while buying apparels/clothes? 4. You have an exact idea of the kind of apparel you want before you go for shopping. (You don’t go for impulsive shopping). 5. You have particular preferences for the brands while going for apparels’ shopping. (You are loyal towards certain brands). 6. Which factor would entice you more, to buy clothes : Discounts offered, Occasions (Festivals, Interviews, Change of season etc), New Collection launched 7. Which factor affects your choice of choosing one retailer over the others while going to buy clothes.
All of these questions related to the kind of buying behavior exhibited by customers of men apparels. We expected to find certain clusters of people which can be segmented into : 1. Cluster for whom buying is actually a high involvement process. 2. Cluster for whom buying is low involvement process.
INDEPENDENT SAMPLE T TEST: now we have two samples which belong to two different types of respondents. One sample is of people who consider buying of apparel as low involvement process and the other sample which consider it to be a high involvement process. We applied independent sample t test to find whether the difference in the expectations of the
customers in each of the cluster differed significantly at 95% level of confidence. The independent t test were applied for importance of each of the following attribute while buying an apparel: Quality, size/fit, design, brand name, price, durability, status HYPOTHESIS; Null Hypothesis 1: There is no significant difference in the importance of quality attribute while buying apparel for respondents belonging to high involvement group and low involvement group.
Null Hypothesis 2: There is no significant difference in the importance of price attribute while buying apparel for respondents belonging to high involvement group and low involvement group.
Null Hypothesis 3: There is no significant difference in the importance of brand name attribute while buying apparel for respondents belonging to high involvement group and low involvement group.
Null Hypothesis 4: There is no significant difference in the importance of size/fit attribute while buying apparel for respondents belonging to high involvement group and low involvement group.
Null Hypothesis 5: There is no significant difference in the importance of durability attribute while buying apparel for respondents belonging to high involvement group and low involvement group.
Null Hypothesis 6: There is no significant difference in the importance of status attribute while buying apparel for respondents belonging to high involvement group and low involvement group.
Null Hypothesis 7: There is no significant difference in the importance of design attribute while buying apparel for respondents belonging to high involvement group and low involvement group. RESULTS : Cluster analysis provided us with two clusters
Final Cluster Centers Cluster 1 FREQ AVGEXP AVGTIME EXCTNEED BRNDLOYL BUYBEHAV PRIORITY 1.56 1.48 1.36 2.64 2.16 1.70 2.58 2 3.02 3.32 3.51 3.12 3.15 2.22 2.34 Table 1: Cluster
It showed that the cluster one which on the basis of buying behavior can be taken as Low involvement customers and the cluster two can be taken as high involvement customers.
CLUSTER 1: LOW INVOLVEMENT GROUP
These types of customers spend less amount of time when they go to buy apparel even though they are often less clear about what kind of apparel they exactly need. They also buy clothes less frequently. They score less on brand loyalty. Their buying behavior shows that buying apparel is a process in which they do not like getting much involved.
CLUSTER 2 : HIGH INVOLVEMENT GROUP These types of customers spend MORE amount of time when they go to buy apparel and they are often more clear about what kind of apparel they exactly need. They also buy clothes more frequently. They score high on brand loyalty. Their buying behavior shows that buying apparel is a process in which they do not like getting much involved
Number of Cases in each Cluster Cluster 1 50.000
2 Valid Missing
41.000 91.000 .000
Table 2 : Number of respondent in each Cluster
INDEPENDENT SAMPLE T TEST After receiving two different cluster of people we performed independent sample t test which provided following results:
Group Statistics Cluster Quality 1.00 2.00 Size/Fit 1.00 2.00 Design 1.00 2.00 BrandNam 1.00 2.00 Price 1.00 2.00 Durability 1.00 2.00 Status 1.00 2.00 N 58 33 58 33 58 33 58 33 58 33 58 33 58 33 Std. Std. Error Deviation Mean 3.4138 .7263 9.537E-02 3.8485 3.3448 3.6667 3.4138 3.7879 3.3966 4.0606 3.6207 4.3939 3.5862 3.3333 3.3621 3.8182 .5075 8.835E-02 .6085 7.990E-02 .9574 .1667 Mean
.7263 9.537E-02 .8572 .7710 .6586 .8950 .7475 .1492 .1012 .1146 .1175 .1301
.4968 6.523E-02 .4787 8.333E-02 .5833 7.660E-02 1.3568 .2362
Table 3: Difference between cluster on different attributes
The above table shows that both the cluster differed from each other on their mean scores for the importance of each of the attribute that was measured in the study. We
also see the whether the difference between these means was significant or not. For this first, Levene test for equality of variances was conducted and then the 2 tail significance was seen at 95% level of confidence.
Table 5: SPSS output
S Attribute no 1 Quality
Implications for cluster Important Important Important Important Important Important Important Very Important Important Very Important Important Important Important Important
Whether the difference was significant Yes
Brand name 3.3966 4.0606
Table 5 : Final results of Independent Sample T Test
1. People for whom buying is a high involvement process pay more importance to Quality,
Design, Brand name and price. People from this cluster paying more importance to price seems possible since these are the people who spend more money while buying and also have higher frequency of buying. However when we compare this fact that these people actually do not wait for discounts the results seems contradictory. 2. Secondly for people for whom buying is a low involvement process pay more importance to durability 3. On attributes like size/fit and status both of the cluster did not differed significantly Hence the clusters differ from each other not only on their buying behavior but also on the their expectation from the product they are buying.
Hence marketer should focus on the variables –stated above as significant- to improve the value offering which will also be responsible in shifting customers from low involvement group to high involvement group.
LIMITATIONS: We limited our study to finding the difference between two clusters on the basis of their functional and emotional benefits they receive from apparels. Other factors like ambience of the retail outlet, brand personality etc could also be responsible in shifting the customers from low involvement group to high involvement group. Secondly our study shows that these are the difference that exist between the clusters on the basis of their stated expectations but were these the causes that actually made them shift from low involvement to higher involvement group. This is possible only through a time series analysis of customers and finding out the reason for the shift in the behavior if it happens.
We, the students of LBSIM, request your co-operation for a research project done purely for academic purposes. Please note that responses would be kept confidential. 1. How often do you buy clothes in a month? 0-1 2-3 4-5 >5 2. What is the average amount in rupees you spend when you go to buy clothes? <1000 1000-2000 2000-3000 >3000 3. Once on a visit, approximately how much time do you spend while buying apparels/clothes? <30 mins 30mins – 1 hr 2-3 hrs > 3 hrs 4. Please select an option applicable to you.
a) You have an exact idea of the kind of apparel you want before you go for shopping. (You don’t go for impulsive shopping). Strongly Disagree Strongly Agree Somewhat Disagree Somewhat Agree
b) You have particular preferences for the brands while going for apparels’ shopping. (You are loyal towards certain brands).
Strongly Disagree Strongly Agree
5. Please rate the following factors as per their importance for buying the apparels. (1
being most important and 5 being least) Fabric quality Size/fit Design Brand name Price Durability Status 1 4 1 4 1 4 1 4 1 4 1 4 1 4 2 5 5 5 5 5 5 5 2 2 3 3 2 2 3 3 2 2 3 3 3
6. Rank the following brands as per your preference. (1 being Highest and 7 being Lowest)
___ ___ ___ ___ ___ ___
Louis Philippe Van Heusen Peter England Blackberry Zodiac Allen Solly
7. Which factor would entice you more, to buy clothes :
Discounts offered Occasions (Festivals, Interviews, Change of season etc) New Collection launched
8. Which factor affects your choice of choosing one retailer over the others while going
to buy clothes : Proximity to your place Ambience More variety Availability of your preferred brands
< 20 21 - 25 25 – 30 30 – 40 40
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