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This is to certify that work entitled Project title Consumer buying behavior
of Godrej home appliances through Direct Sales is a piece of work done by
Students name Subhakanta Dash under my guidance and supervision for
the partial fulfillment of degree of

PGPM, Asian School Of Business

Management, Bhubaneswar.

To the best of my knowledge and belief the thesis:

a. Embodies the work of the candidate himself.
b. Has duly been completed.
c. Fulfills the requirements of the rules and regulations relating to the
summer internship of the institute.
d. Is up-to the standard both in respect to contents and language for
being referred to the examiner

Signature of the Faculty Guide

Name of faculty guide

Prof. Bhaktabandhu Dash


I, Subhakanta Dash of 1st Year PGPM, Asian School Of Business

Management ,Bhubaneswar, hereby declare that the project titled






through Direct Sales was done by me under the guidance of

Prof. Bhakatabandhu Dash, Faculty of Human Resource






Bhubaneswar, Mr. Niladri S. Chatterjee, Dy.Manager, Direct

sales, Appliance Division, Godrej & Boyce Mfg. Co. Ltd,
Bhubaneswar, during 13th April, 2010 to 4th June, 2010.

I also declare that this project has not been submitted for the
award of any other degree, diploma, literature or recognition

Place: Bhubaneswar

Subhakanta Dash


(Regn: PGPM/09-11/51)


I am indebted to Mr. Niladri S. Chatterjee, Dy. Manager, Direct Sales,

Appliance division, Godrej & Boyce Mfg. Co. Ltd. Bhubaneswar, for giving
me an opportunity to work as a summer project trainee in this esteemed
organization. His knowledge and experience was a great motivating factor.
This effort would not have been possible without his able, efficient, valuable
and timely advice, insights and thoughts. I am very much thankful to sir for
his valuable guidance and support.
I take this opportunity to express my heartfelt gratitude to my faculty guide
Prof. Bhaktabandhu Dash, Faculty of Human Resource Management,
Asian School Of Business Management. I am thankful to sir for his valuable
support and guidance throughout the project.

I am also thankful to the Director, Dean and all the faculty members of Asian
School of Business Management for their valuable support throughout the
I am equally grateful to each and every member of Godrej & Boyce Mfg. Co.
Ltd., Bhubaneswar for their whole-hearted co-operation in completing this
project in stipulated time.
I extend my sincere thanks to all customers of Godrej Appliances who helped
me for my project.
Last but not the least, I would like to thank my family members and friends
whose unbounded support facilitated the successful completion of the

On the job training

1. On The Job Training (OJT) gives a practical exposure and helps in acquiring
the on road skills.
2. First and foremost objective is to know the response of existing customers
of Godrej Direct sales division..

3. To gain the complete knowledge about the products of Godrej & Boyce
Manufacturing co. ltd, Appliances Division
4. To generate the leads through the survey.
5. To sort out the prospective leads from the data I have collected through
the survey.
6. To make the relationship stronger with the existing customers and to
follow up them, make sure that they are satisfied with the product.
7. To maintain good relationship with the corporate employees.
8. To get more references from the customers and generate new leads by
following a chain process.
9. To find out the customer awareness on booming financial market and to
find out the investment patterns of the people.

To make the customer aware of the benefits of the products from

different competitors.

On the job training we also came to know about the various products of

Godrej Appliancesand its detail benefit that the customer will get.

How to convince a customer through the telephone to sell products by

following the customer database.


After all how the claims of the customers will be settled quickly.

Things which I learnt from OJT

1. You have to achieve your target within due time.

2. I have to know more than my client
3. Patience
4. To understand the clients perception (how to motivate them)
5. Enjoyment is also a part of work(work-life balance)
6. Punctuality
7. Discipline
8. Hard worker
9. patience to take tension

Dedication towards the work


continuous effort


Leading character


Courage to deal the situation


knowledge to recruit the person


knowledge about the product

In this research the benchmark practices has been assessed. In this era of
competition it is high time to realize for an organization regarding what is its
strength, its core competencies, what is to be benchmarked, how it should be
benchmarked and with whom. This project studies the consumer buying

behavior of Godrej Home appliances through Direct sales with reference to

existing customers.
The project gives a detail description of consumer buying behavior process.
It covers the application of designing and managing the sales force strategy
of the company in order to manage, shape and motivate the customers as
well as employees. Certain policies followed by the company are jotted as
well as certain suggestions have been given. Today the biggest asset of an
organization is its pool of human resource. The better is its human resource
the more productive the company becomes. So it is highly essential for an
organization to identify, train and recruits talented people.
Only by selling products to people does not end. Another big deal for the
organization is how to retain those customers. The company has to provide
good after sales service. But above all it is not just these parameters which
retain a customer but other factors like having regular contact, providing
them the ambience, the sense of feeling that they are being needed by the
organization. So the issues regarding customer retention is discussed. Apart
from these, relation building is a matter of immense concern now days.
Relation building is referred to as a corporate asset in this study. In this fast
moving competitive era and growing population of service providers the
major task rather than to create a customer is to retain him.


Indian market was weak in providing good after sales service but now a day
there is huge competition.
This report also includes the analysis of the psychological as well as
Demographical analysis which will be very much helpful for a company. This
report also says about various marketing and advertising strategies that can
be followed by the company in order to grab the prevailing opportunities.

Company background

Introduction to company

Corporate Profile

Product Profile


SWOT of the Company

The Godrej Group is one of the largest players of Home Appliances

in India and has always delighted the consumer with relevant
technology in a wide range of efficient products. In 1958, Godrej
was the First Indian Company to manufacture Refrigerators and
has become synonymous with the category. Godrej pioneered the
launch of Polyurethane Foam (PUF) which became the new
benchmark for the refrigerator industry. In the last 1 year, Godrej
has introduced 104 new products across various categoriesRefrigerators,






Machines and DVD Players. With new innovative technologies

like Silver Shower technology in refrigerators, i-Sense and EM5
in Air conditioners, Steam Microwave Ovens, DAC+ in Washing
Machines etc, Godrej is redefining the technology space in Indian
Appliances context.

In 1958, Godrej Appliances makes the very first refrigerator in

India. Fast forward to today. Eon is bringing you cool new features to meet
todays needs. Our addiction to innovation is an old story. We launched PUF
(polyurethane foam) technology way back in the 80s. Created 100% CFC free
fridges much before green got fashionable. And added colorful doors to these
cooling machines. And so on.
We continue moving forward. Not just with Refrigerators, also washing
Machines, Air Conditioners, Microwave Ovens, DVD Players and Televisions
and more. Not to be cheeky here, but we were voted the Most Trusted
Brand, Gold award (Readers Digest consumer survey) 4 years in a row by
our consumers. And earned the CNBC Consumer Awaaz Award, 3 years in a
row. Eon, in the Consumer World Awards, was chosen as Mera Brand of the
year, 2008. Next. Godrej Appliances becomes a Super brand.


Godrej and Boyce Mfg. Co. Ltd. deals in both the consumer products as well
as industrial products. Both have wide ranges of products in it. From
appliances to personal care in consumer products while the storage solution,
machine tool service, agro products, chemicals etc comes in the industrial
products category. Recently it has announced to increase the number
of retail stores from 49 to 100 by 2010. Investment of Rs 20 crore will
be made to make it a success. Godrej Appliances Ltd. brings out
refrigerators, washing machines, air-conditioners, microwave ovens, and DVD
players in India with the latest technology. Every consumer good comes with
price range and variety to serve absolutely all the strata of the society. Fully
sensing the need and demand of the market of IT in India Godrej InfoTech
Limited provides IT solutions like the development of software, e solutions
development, customization & ERP. It also provides database outsourcing
and consultancy services
Godrej Industries ltd. manufactures Oleo chemicals. Over two dozens of industries in
India use the chemicals made by Godrej industries. They all in all make more than
hundred of such chemicals. Besides this it also produces edible oil, vanaspati and
bakery fats, and deals in medical diagnostic and real estate. Product has quality
that of international standard and yet at competitive price. Company's' profile
shows that Godrej Properties ltd a real estate arm of Godrej Group is doing wonders
in residential sector in India. it is coming up with property project in Bangalore.

Our Divisions:
Furniture (Interio)

AV Solutions (Prima)
Electricals & Electronics
Lawkim Motors


Material Handling

Precision Engineering

Precision Systems

Process Equipment

Security Solutions


Storage Solutions


Vending (Prima)

Godrej India has seen both the post and pre independence days as it got
established in 1897. It started its business with locks manufacturing and at
present it a provider of wide variety of services in India, like doors, furniture,







industries, home appliances etc. The website on different associates gives

full details on the dealers, their locations and maintenance tips on each
product manufactured by Godrej India. Godrej has captured a consumer
market in India at large scale with its brands like Soaps, Toiletries, Hair Care,
Household Care, Fabric Care, Baby Care and Keyline Brands.
Godrej Appliances - The largest engineering and consumer products
company in the country having varied interests from engineering to personal
care products. We are also one of the most respected corporate houses
known for our philanthropy and initiation of labour reforms besides being
recognized for our values of fair, transparent and ethical dealings.
Godrej's appliance division aims to achieve a growth of 40 per cent in
turnover this year. The division posted 30 per cent growth in turnover at Rs


1,700 crore in 2009-10, Mr Menezes said, the C.O.O of the Appliances

division.. Appliance division accounts for almost one-third of Godrej and
Boyce's total turnover. Godrej Appliances, one of the largest manufacturers
of Home Appliances in India, has won the National Energy Conservation
Awards 2009 a prestigious award from the Ministry of Power, Government of
India for its Eco-friendly Refrigerators. The Government of India has
recognized the eco-friendly technology and manufacturing processes as well
as the eco-friendly innovation in design adopted by Godrej Appliances
making it a clear winner for this award.
Bags The National Energy Conservation Award 2009, The Super
Brand Award 2010 for Eco-Friendly Refrigerators & The NSCI Safety
Awards for its Mohali Plant. Godrej Refrigerators has been repeatedly
awarded Consumer Superbrand in its category the first time being in 2004,
followed by 2009. This also makes Godrej Appliances the only Indian brand in
the consumer durables space to have won this award.
25% of the shares of the Godrej Groups holding company are held in a trust
that invests back in the environment, healthcare and education. Which
means business is not just about big bucks but keeping our land green, our
folks happy and healthy and our kids smart. In 1920, our founder Ardeshir
Godrej gave a donation of Rs. 3 lakhs to the Tilak Swaraj Fund then
considered a princely sum - for liquor prohibition and upliftment of the
downtrodden. His gesture of philanthropy grew into the Godrej corporate
policy. Giving back turned into our way of saying thank you to the 400 million
Indians who are Godrej loyalists.
Corporate Profile
Company Profile


The Company celebrated its centenary in 1997. In 1897 a young man named
Ardeshir Godrej gave up law and turned to lock-making. Ardeshir went on to
make safes and security equipment of the highest order, and then stunned
the world by creating toilet soap from vegetable oil.
His brother Pirojsha Godrej carried Ardeshir's dream forward, leading Godrej
towards becoming a vibrant, multi-business enterprise. Pirojsha laid the
foundation for the sprawling industrial garden township (ISO 14001- certified)
now called Pirojshanagar in the suburbs of Mumbai. Godrej touches the lives
of millions of Indians every day. To them, it is a symbol of enduring ideals in a
changing world.
The Godrej Group touches the lives of 400 million Indians who use at least
one of our products every single day. Our commitment to quality,
attention to detail and customer centricity has helped us earn the trust of
generations of Indians.

Mission, vision & Motto

Vision Of godrej: Godrej in Every Home and Work place.
Mission sTATEMENT:
Godrej Mission is to operate in existing and new businesses which
capitalize on the Godrej brand and corporate image of reliability and
Godrej objective is to delight its customer both in India and abroad.


Godrej shall strive for excellence by nurturing, developing and

empowering its employees and suppliers.
Godrej entourages an open atmosphere, conducive to learning and
team work
Accelerate the growth of Indian household insecticides market.
To globalize the business rapidly.
Enriching Quality of Life Everyday Everywhere.
Motto of godrej: We care the quality of your life.

Values of Godrej:Commitment to Quality

Customer Orientation
Dedication & Commitment
Honesty & Integrity
Learning Organization
Openness & Transparency
Respect/Care & Concern for People


Teamwork and Trust

The Evolution Of Godrej

1897 Establishment Of The Company

1918 Launched the first soap in the world to be made without animal fat.
1923 We maid our first Almirah.
1932 Incorporated with limited liability.
1951 It made ballot boxes for free Indias first election.
1958 We made our first refrigerator.
1978 Our employee count stood at 12000. Today its 20,000 and growing.
1986 Godrej launched its Hair Dye.
1995 We discovered that Godrej Washing machine had hatke use to whip
up lassi.
1997 We turned to 100.
2008 We helped develop the launch vehicle and lunar orbiter for
Chandrayaan-1, indias

first unmanned mission to the

moon. Its our pride.


2008 Godrej logo colour changed.

Established in 1897, the Company was incorporated with limited liability on
March 3, 1932, under the Indian Companies Act, 1913.
Sales-Subsidiaries and Affiliates
The Company is one of the largest privately-held diversified industrial
corporations in India. The combined Sales (including Excise Duty) of the
Company, its subsidiaries and affiliates, during the Fiscal Year ended March
31, 2008, were about Rs. 90,000 million (US$ 1,900 million).

Jamshyd Godrej:

Jamshyd Godrej is the Chairman of the Board of

Godrej & Boyce Mfg. Co.

Ltd. He graduated in Mechanical Engineering

from Illinois Institute of Technology, USA. He is the Chairman of Aspen

Institute India.
Adi Godrej: Adi Godrej is the Chairman of the Godrej Group and several
entities that are part of one of Indias leading conglomerates. These include
Indian companies like Godrej Industries, Godrej Consumer Products, Godrej


Properties as well as international companies such as Keyline Brands U.K and

Rapidol South Africa.
Nadir Godrej:

Nadir Godrej is the Managing Director of Godrej

Industries and Chairman, Godrej Agrovet. He is also a Director of

numerous firms including Godrej & Boyce, Godrej Foods, Godrej Consumer
Products and Godrej Sara Lee.
Other Executive Directors: P. D. Lam, K. A. Palia, V. M. Crishna, A. G.
Non-executive Directors: A. B. Godrej, N. B. Godrej, K. N. Petigara, B. A.
Hathikhanavala,F. P. Sarkari,

P. P. Shah, A. Ramachandran

Since its inception, the Company is controlled by the GODREJ family based in
Mumbai, India. Its shares are not listed on any Stock Exchange. About onefourth of the Company's share capital is held by Pirojsha Godrej Foundation,
a public charitable trust.

Godrej & Boyce Mfg.Co.Ltd

Branches (Sales and Service) and Retail

The Company has a network of:
38 Company-owned Showrooms
more than 2,200 Wholesale Dealers, and more than 18,000 Retail Outlets.


Company has Representative Offices in Sharjah (UAE), Nairobi (Kenya), Colombo (Sri
Lanka) and Riyadh (Saudi Arabia).


Personnel department comprises of four employees- one deputy and 3
seniors under him.
Over all there are 19 plants make all different products like security
systems, locks, doors, etc. Each of this plant is considered as a separate
profit making center. Profits made by each of the plants are accounted for
separately in its Annual report also.

Different levels of management are as follows:

- Base level - In this level, new-entrants are trained about the various

levels of the department.

O - Operation
P - Promotion of product
T - Technical

- Sales

- This level consists of owners and M.D.

Each of this level consists of three sub-sections, through which each

employee has to pass to reach a higher level. An employee, before moving
into the next level, he has to be in each sub section for at least two years.
It is a division of GODREJ appliance, where companys representatives go
directly to the customer and fulfill the requirement. It is a initiative towards


CRM. It has started its operation in 2002 by selling contracts and AMCs. But
looking at the need of the customer and after understanding the customer in
a better way we have started selling appliances from 2005.Presently it has
its operation in 15 branches.
medabad,Bhopal,Chandigarh,Cochin,Coimbatore and Bhubaneswar.
National head is Mr.Rajinder Kool
Zonal manager (ME)-Mr.Bharat Bhusan Agarwal
Zonal Manager (SW)-Mr.Sumit Malik


Started operation in May 2008
It has 2 division telecalling and D2D 10 executives are there who put
up camps in different location and visit to the homes in that locality. The
average knocks per executive is 35 to telecalling 4 executives are there
who call to the existing customer and generate the leads and the sales
executive follow up the leads.



Frost Free
Direct Cool


Washing Machine

Split A.c

Microwave Oven

Fully automatic

Window A.c

Semi automatic


Grill &

From locks to aerospace, furniture to construction, appliances to custom-built
critical equipment, and several more, Godrej & Boyce has a diverse range of
products and services.

Major Competitors of Godrej Appliances

1) LG
2) Samsung

3) Whirlpool

4) Videocon
Godrej believe in Brighter Living
Brighter Living = Progression + Expression + Empathy + Experience




SWOT of the Company


The Company has got wide range of branches within the country.

The Company has wide range of product line.

The Company has there respectable and believable brand name.

Company is having large number of customer with higher satisfaction.

Exchange offer.
The Company does not go for advertising, which is one of the biggest
disadvantage of Godrej.

Manpower is less at sale officer level so that it affecting directly on

the way of sale.

The effective selling schemes are not available like payment on

Sales executives are not well mannered
Godrej has more opportunities to grow as it has earned good market
share in Orissa.
Technical up gradation time to time is also one of the opportunities.
Opportunity in providing exchange offer in Air-conditioners and
microwave oven.


The growing competition in the Appliances sector

is threat for all

manufacturing companies so it is also threat for Godrej to stand in the

market with the higher position.




Marketing is the process by which companies determine what products or
services may be of interest to customers, and the strategy to use in sales,
communications and business development. It is an integrated process









strong customer relationships in order to capture value from customers in

Marketing is used to identify the customer, to keep the customer, and to
satisfy the customer. With the customer as the focus of its activities, it can
be concluded that marketing management is one of the major components
of business management. The evolution of marketing was caused due
to mature markets and overcapacities in the last 2-3 centuries. Companies
then shifted the focus from production to the customer in order to
stay profitable.
The term marketing concept holds that achieving organizational goals
depends on knowing the needs and wants of target markets and delivering
the desired satisfactions. It proposes that in order to satisfy its organizational
objectives, an organization should anticipate the needs and wants of
consumers and satisfy these more effectively than competitors.

Different Types of Marketing.

Print Advertising
Print campaigns include newspaper and magazine advertising. This type of
marketing can carry a variety of messages (either brand oriented or direct
response) and can be focused on a particular audience based on who reads
the publication in question. So for example, if you want to reach people who

live in San Diego, put your marketing efforts into the San Diego daily
newspapers. If you are selling a new line of cat collars, look into Cat Fancy or
other feline-related periodicals. Print advertising must be prepared well in
advance to meet the deadlines of the publications especially with monthly
magazines, since they are printed months before their release date.
Direct Mail
Although many believe Direct Mail marketing has seen its best days already
passed; there is still some life in this powerful, traditional form of advertising.
Direct Mail refers to postcards, brochures and flyers that are sent through the
mail and generally contain a direct response call-to-action. Using direct mail
means having to purchase some necessities for the campaign, including
printing materials, postage and the address lists of the demographic you
wish to target.
TV and Radio
Among the most high profile campaigns in the industry, television and radio
advertising offer the opportunity to reach the largest number of people in the
shortest time frame. Among the disadvantages of these marketing efforts are
the potentially high cost and the inability to truly target your demographic
with precise accuracy. However, the prestige associated with television
advertising can elevate a business in a way no other marketing format can.
Online Marketing
The rising star in the world of marketing is online. The web continues to
explode and along with it so do the advertising opportunities. Billions and
billions more advertising dollars are spent every year online, as business try
to find ways to tap into the Internet user. The most common types of Online
Marketing include:

Pay Per Click bidding on search terms and having the business ads appear
when the relevant keywords are searched for in Google and Yahoo!
Banner Advertising creating a graphic advertisement and placing it on
relevant websites. The ad then takes customers directly to the advertisers
Email Marketing Using lists of email addresses to deliver content and
promotional offers to potential customers.
Organic Search Using search engine optimization (SEO) to rank high on
Google and Yahoo! in your given area of business. This is achieved by
manipulating the copy on a website and in the HTML code that forms the
backbone of the web pages.
It is worth nothing that many businesses are abandoning the more
traditional, print forms of marketing in favor of reaching out to the online
world. As print and direct mail see their numbers decline, more and more
businesses are choosing the cost effective, highly targeted marketing options
found online.


Consumer Behavior and Segmentation, Targeting &

Segmentation, targeting, and positioning together comprise a three stage
process. We first (1) determine which kinds of customers exist, then (2)
select which ones we are best off trying to serve and, finally, (3) implement
our segmentation by optimizing our products/services for that segment and
communicating that we have made the choice to distinguish ourselves that


Segmentation involves finding out what kinds of consumers with different

needs exist. In the auto market, for example, some consumers demand
speed and performance, while others are much more concerned about
roominess and safety. In general, it holds true that You cant be all things to
all people, and experience has demonstrated that firms that specialize in
meeting the needs of one group of consumers over another tend to be more
Generically, there are three approaches to marketing. In the undifferentiated
strategy, all consumers are treated as the same, with firms not making any
specific efforts to satisfy particular groups. This may work when the product
is a standard one where one competitor really cant offer much that another











the concentratedstrategy, one firm chooses to focus on one of several

segments that exist while leaving other segments to competitors.


example, Southwest Airlines focuses on price sensitive consumers who will

forego meals and assigned seating for low prices. In contrast, most airlines
follow the differentiated strategy: They offer high priced tickets to those who
are inflexible in that they cannot tell in advance when they need to fly and
find it impractical to stay over a Saturday. These travelersusually business
travelerspay high fares but can only fill the planes up partially. The same
airlines then sell some of the remaining seats to more price sensitive
customers who can buy two weeks in advance and stay over.
Note that segmentation calls for some tough choices. There may be a large
number of variables that can be used to differentiate consumers of a given
product category; yet, in practice, it becomes impossibly cumbersome to
work with more than a few at a time. Thus, we need to determine which
variables will be most useful in distinguishing different groups of consumers.
We might thus decide, for example, that the variables that are most relevant
in separating different kinds of soft drink consumers are (1) preference for


taste vs. low calories, (2) preference for Cola vs. non-cola taste, (3) price
sensitivitywillingness to pay for brand names; and (4) heavy vs. light
consumers. We now put these variables together to arrive at various
Several different kinds of variables can be used for segmentation.
Demographic variables essentially refer to personal statistics such as
income, gender, education, location (rural vs. urban, East vs. West),
ethnicity, and family size. Campbells soup, for instance, has found that
Western U.S. consumers on the average prefer spicier soupsthus, you get a
different product in the same cans at the East and West coasts. Facing flat
sales of guns in the traditional male dominated market, a manufacturer
came out with the Lady Remmington, a more compact, handier gun more
attractive to women. Taking this a step farther, it is also possible to segment
on lifestyle and values.
Some consumers want to be seen as similar to others, while a different
segment wants to stand apart from the crowd.
Another basis for segmentation is behavior. Some consumers are brand
loyali.e., they tend to stick with their preferred brands even when a
competing one is on sale. Some consumers are heavy users while others
are light users. For example, research conducted by the wine industry
shows that some 80% of the product is consumed by 20% of the consumers
presumably a rather intoxicated group.




on benefits

demographic explanatory variables.




Some consumers, for example, like

scented soap (a segment likely to be attracted to brands such as Irish

Spring), while others prefer the clean feeling of unscented soap (the
Ivory segment). Some consumers use toothpaste primarily to promote oral
health, while another segment is more interested in breath freshening.


In the next step, we decide to target one or more segments. Our choice
should generally depend on several factors. First, how well are existing
segments served by other manufacturers? It will be more difficult to appeal
to a segment that is already well served than to one whose needs are not
currently being served well. Secondly, how large is the segment, and how
can we expect it to grow? (Note that a downside to a large, rapidly growing
segment is that it tends to attract competition).

Thirdly, do we have

strengths as a company that will help us appeal particularly to one group of


Firms may already have an established reputation.


McDonalds has a great reputation for fast, consistent quality, family friendly
food, it would be difficult to convince consumers that McDonalds now offers
gourmet food. Thus, McDs would probably be better off targeting families in
search of consistent quality food in nice, clean restaurants.
Positioning involves implementing our





Computer has chosen to position itself as a maker of user-friendly

computers. Thus, Apple has done a lot through its advertising to promote
itself, through its unintimidating icons, as a computer for non-geeks. The
Visual C software programming language, in contrast, is aimed a techies.


Michael Treacy and Fred Wiersema suggested in their 1993 book The
Discipline of Market Leaders that most successful firms fall into one of three







advantage by maintaining exceptional efficiency, thus enabling the firm to

provide reliable service to the customer at a significantly lower cost than
those of less well organized and well run competitors. The emphasis here is
mostly on low cost, subject to reliable performance, and less value is put on
customizing the offering for the specific customer. Wal-Mart is an example of
this discipline. Elaborate logistical designs allow goods to be moved at the
lowest cost, with extensive systems predicting when specific quantities of
supplies will be needed.
Customer intimate firms, which excel in serving the specific needs of the
individual customer well. There is less emphasis on efficiency, which is
sacrificed for providing more precisely what is wanted by the customer.
Reliability is also stressed.

Nordstroms and IBM are examples of this

Technologically excellent firms, which produce the most advanced products
currently available with the latest technology, constantly maintaining
leadership in innovation.

These firms, because they work with costly

technology that need constant refinement, cannot be as efficient as the

operationally excellent firms and often cannot adapt their products as well to
the needs of the individual customer. Intel is an example of this discipline.
Treacy and Wiersema suggest that in addition to excelling on one of the
three value dimensions, firms must meet acceptable levels on the other two.


Wal-Mart, for example, does maintain some level of customer service.

Nordstroms and Intel both must meet some standards of cost effectiveness.
The emphasis, beyond meeting the minimum required level in the two other







Repositioning involves an attempt to change consumer perceptions of a

brand, usually because the existing position that the brand holds has
become less attractive. Sears, for example, attempted to reposition itself
from a place that offered great sales but unattractive prices the rest of the









Repositioning in practice is very difficult to accomplish. A great deal of

money is often needed for advertising and other promotional efforts, and in
many cases, the repositioning fails.
To effectively attempt repositioning, it is important to understand how ones
brand and those of competitors are perceived. One approach to identifying
consumer product perceptions is multidimensional scaling. Here, we identify
how products are perceived on two or more dimensions, allowing us to plot
brands against each other. It may then be possible to attempt to move
ones brand in a more desirable direction by selectively promoting certain
points. There are two main approaches to multi-dimensional scaling. In
the prior approach, market researchers identify dimensions of interest and
then ask consumers about their perceptions on each dimension for each

This is useful when (1) the market researcher knows which

dimensions are of interest and (2) the customers perception on each

dimension is relatively clear (as opposed to being made up on the spot to
be able to give the researcher a desired answer).

In the similarity

rating approach, respondents are not asked about their perceptions of

brands on any specific dimensions. Instead, subjects are asked to rate the
extent of similarity of different pairs of products (e.g., How similar, on a scale
of 1-7, is Snickers to Kitkat, and how similar is Toblerone to Three


Musketeers?) Using a computer algorithms, the computer then identifies

positions of each brand on a map of a given number of dimensions. The
computer does not reveal what each dimension meansthat must be left to
human interpretation based on what the variations in each dimension
appears to reveal. This second method is more useful when no specific
product dimensions have been identified as being of particular interest or
when it is not clear what the variables of difference are for the product

Diffusion of Innovation
Products tend to go through a life cycle. Initially, a product is introduced.
Since the product is not well known and is usually expensive (e.g., as
microwave ovens were in the late 1970s), sales are usually limited.
Eventually, however, many products reach a growth phasesales increase
dramatically. More firms enter with their models of the product. Frequently,
unfortunately, the product will reach a maturity stage where little growth will
be seen. For example, in the United States, almost every household has at
least one color TV set. Some products may also reach a decline stage,
usually because the product category is being replaced by something better.
For example, typewriters experienced declining sales as more consumers
switched to computers or other word processing equipment. The product life
cycle is tied to the phenomenon of diffusion of innovation. When a new
product comes out, it is likely to first be adopted by consumers who are more
innovative than othersthey are willing to pay a premium price for the new
product and take a risk on unproven technology. It is important to be on the
good side of innovators since many other later adopters will tend to rely for
advice on the innovators who are thought to be more knowledgeable about
new products for advice.


At later phases of the PLC, the firm may need to modify its market strategy.
For example, facing a saturated market for baking soda in its traditional use,
Arm Hammer launched a major campaign to get consumers to use the
product to deodorize refrigerators. Deodorizing powders to be used before
vacuuming were also created.
It is sometimes useful to think of products as being either new or existing.
Many firms today rely increasingly on new products for a large part of their
sales. New products can be new in several ways. They can be new to the
marketnoone else ever made a product like this before. For example,
Chrysler invented the minivan. Products can also be new to the firm
another firm invented the product, but the firm is now making its own
version. For example, IBM did not invent the personal computer, but entered
after other firms showed the market to have a high potential. Products can
be new to the segmente.g., cellular phones and pagers were first aimed at
physicians and other price-insensitive segments. Later, firms decided to
target the more price-sensitive mass market. A product can be new for legal
purposes. Because consumers tend to be attracted to new and improved
products, the Federal Trade Commission (FTC) only allows firms to put that
label on reformulated products for six months after a significant change has
been made.


The diffusion of innovation refers to the tendency of new products, practices,

or ideas to spread among people. Usually, when new products or ideas come
about, they are only adopted by a small group of people initially; later, many
innovations spread to other people.

The bell shaped curve frequently illustrates the rate of adoption of a new
product. Cumulative adoptions are reflected by the S-shaped curve.
Thesaturation point is the maximum proportion of consumers likely to adopt
a product.

In the case of refrigerators in the U.S., the saturation level is nearly one
hundred percent of households; it well below that for video games that, even
when spread out to a large part of the population, will be of interest to far
from everyone.


Several specific product categories have case histories that illustrate

important issues in adoption. Until some time in the 1800s, few physicians
bothered to scrub prior to surgery, even though new scientific theories
predicted that small microbes not visible to the naked eye could cause
infection. Younger and more progressive physicians began scrubbing early
on, but they lacked the stature to make their older colleagues follow.
ATM cards spread relatively quickly. Since the cards were used in public,
others who did not yet hold the cards could see how convenient they were.
Although some people were concerned about security, the convenience
factors seemed to be a decisive factor in the tug-of-war for and against
The case of credit cards was a bit more complicated and involved a chickenand-egg paradox. Accepting credit cards was not a particularly attractive
option for retailers until they were carried by a large enough number of
consumers. Consumers, in contrast, were not particularly interested in cards
that were not accepted by a large number of retailers. Thus, it was
necessary to jump start the process, signing up large corporate accounts,
under favorable terms, early in the cycle, after which the cards became
worthwhile for retailers to accept.
Rap music initially spread quickly among urban youths in large part because
of the low costs of recording. Later, rap music became popular among a
very different segment, suburban youths, because of its apparently authentic
depiction of an exotic urban lifestyle.
Hybrid corn was adopted only slowly among many farmers. Although hybrid
corn provided yields of about 20% more than traditional corn, many farmers
had difficulty believing that this smaller seed could provide a superior
harvest. They were usually reluctant to try it because a failed harvest could
have serious economic consequences, including a possible loss of the farm.


Agricultural extension agents then sought out the most progressive farmers
to try hybrid corn, also aiming for farmers who were most respected and
most likely to be imitated by others. Few farmers switched to hybrid corn
outright from year to year. Instead, many started out with a fraction of their
land, and gradually switched to 100% hybrid corn when this innovation had
proven itself useful.
Several forces often work against innovation. One is risk, which can be
either social or financial. For example, early buyers of the CD player risked
that few CDs would be recorded before the CD player went the way of the 8
track player. Another risk is being perceived by others as being weird for
trying a fringe product or idea. For example, Barbara Mandrell sings the
song I Was Country When Country Wasnt Cool. Other sources of
resistance include the initial effort needed to learn to use new products (e.g.,
it takes time to learn to meditate or to learn how to use a computer) and
concerns about compatibility with the existing culture or technology. For
example, birth control is incompatible with strong religious influences in
countries heavily influenced by Islam or Catholicism, and a computer
database is incompatible with a large, established card file.
Innovations come in different degrees. A continuous innovation includes
slight improvements over time. Very little usually changes from year to year
in automobiles, and even automobiles of the 1990s are driven much the
same way that automobiles of the 1950 were driven. A dynamically
continuousinnovation involves some change in technology, although the
product is used much the same way that its predecessors were usede.g.,
jet vs. propeller aircraft. A discontinous innovation involves a product that
fundamentally changes the way that things are donee.g., the fax and
photocopiers. In general, discontinuous innovations are more difficult to
market since greater changes are required in the way things are done, but
the rewards are also often significant.


Several factors influence the speed with which an innovation spreads. One
issue is relative advantage (i.e., the ratio of risk or cost to benefits). Some
products, such as cellular phones, fax machines, and ATM cards, have a
strong relative advantage. Other products, such as automobile satellite
navigation systems, entail some advantages, but the cost ratio is high.
Lower priced products often spread more quickly, and the extent to which
the product istrialable (farmers did not have to plant all their land with hybrid
corn at once, while one usually has to buy a cellular phone to try it out)
influence the speed of diffusion. Finally, the extent of switching difficulties
influences speedmany offices were slow to adopt computers because users
had to learn how to use them.
Some cultures tend to adopt new products more quickly than others, based
on several factors:
Modernity: The extent to which the culture is receptive to new things. In
some countries, such as Britain and Saudi Arabia, tradition is greatly valued
thus, new products often dont fare too well. The United States, in
contrast, tends to value progress.
Homophily: The more similar to each other that members of a culture are,
the more likely an innovation is to spreadpeople are more likely to imitate
similar than different models. The two most rapidly adopting countries in the
World are the U.S. and Japan. While the U.S. interestingly scores very low,
Japan scores high.
Physical distance: The greater the distance between people, the less likely
innovation is to spread.
Opinion leadership: The more opinion leaders are valued and respected, the
more likely an innovation is to spread. The style of opinion leaders
moderates this influence, however. In less innovative countries, opinion


leaders tend to be more conservative, i.e., to reflect the local norms of

It should be noted that innovation is not always an unqualifiedly good thing.
Some innovations, such as infant formula adopted in developing countries,
may do more harm than good. Individuals may also become dependent on
the innovations. For example, travel agents who get used to booking online
may be unable to process manual reservations.
Sometimes innovations are disadopted. For example, many individuals
disadopt cellular phones if they find out that they dont end up using them

Buying Behavior
A marketing firm must ascertain the nature of the customers buying
behavior, if it is to market its product properly. In order to entice and
persuade a consumer to buy a product, marketers try to determine the
behavioral process of how a given product is purchased. Buying behavior is
usually split in two prime strands, whether selling to the consumer, known
as business-to-consumer (B2C)






as business-to-business (B2B).

B2C buying behavior

This mode of behavior concerns consumers, in the purchase of a given
product. As an example, if one pictures a pair of sneakers, the desire for a
pair of sneakers would be followed by an information search on available
types/brands. This may include perusing media outlets, but most commonly
consists of information gathered from family and friends. If the information
search is insufficient, the consumer may search for alternative means to
satisfy the need/want. In this case, this may be buying leather shoes,
sandals, etc. The purchase decision is then made, in which the consumer
actually buys the product. Following this stage, a post-purchase evaluation is
often conducted, comprising an appraisal of the value/utility brought by the
purchase of the sneakers. If the value/utility is high, then a repeat purchase
may be bought. This could then develop into consumer loyalty, for the firm
producing the pair of sneakers.
B2B buying behavior
Relates to organizational/industrial buying behavior.B2C and B2B behavior
are not exact, as similarities and differences exist. Some of the key
differences are listed below:
In a straight re-buy, the fourth, fifth and sixth stages are omitted. In a
modified re-buy scenario, the fifth and sixth stages are precluded. In a new
buy, all aforementioned stages are conducted.

Consumer Buying Behavior


Possibly the most challenging concept in marketing deals with understanding

why buyers do what they do (or dont do). But such knowledge is critical for
marketers since having a strong understanding of buyer behavior will help
shed light on what is important to the customer and also suggest the
important influences on customer decision-making. Using this information,
marketers can create marketing programs that they believe will be of
interest to customers.
As you might guess, factors affecting how customers make decisions are
extremely complex. Buyer behavior is deeply rooted in psychology with
dashes of sociology thrown in just to make things more interesting. Since
every person in the world is different, it is impossible to have simple rules
that explain how buying decisions are made. But those who have spent many
years analyzing customer activity have presented us with useful guidelines
in how someone decides whether or not to make a purchase.
In fact, pick up any textbook that examines customer behavior and each
seems to approach it from a different angle. The perspective we take is to
touch on just the basic concepts that appear to be commonly accepted as
influencing customer behavior. We will devote two sections of the Principles
of Marketing tutorial to customer behavior. In this section we will examine
the buying behavior of consumers (i.e., when people buy for personal
reasons) while in section 4 we will examine factors that influence buyers
decisions in the business market.
This tutorial includes the following topics:
1. Consumer Buying Behavior
2. Types of Purchase Decisions
3. Why Consumers Buy
4. What Influences Purchasing

5. Internal: Perceptual Filter

6. Internal: Knowledge and Attitude
7. Internal: Personality and Lifestyle
8. Internal: Roles and Motivation
9. External: Culture and Groups
10. External: Situation
11. How Consumers Buy
12. Purchase Decision Steps 1 and 2
13. Purchase Decision Steps 3, 4 and 5

Types of Consumer Purchase Decisions

Consumers are faced with purchase decisions nearly every day. But not all
decisions are treated the same. Some decisions are more complex than
others and thus require more effort by the consumer. Other decisions are
fairly routine and require little effort. In general, consumers face four types of
purchase decisions:
Minor New Purchases these purchases represent something new to a
consumer but in the customers mind is not a very important purchase in
terms of need, money or other reason (e.g., status within a group).
Minor Re-Purchases these are the most routine of all purchases and often
the consumer returns to purchase the same product without giving much
thought to other product options (i.e., consumer is brand loyalty).


Major New Purchases these purchases are the most difficult of all
purchases because these are important to the consumer but the consumer
has little or no previous experience making the purchase. This type of
decision often (but not always) requires the consumer to engage in an
extensive decision-making process.
Major Re-Purchase - these purchase decisions are also important to the
customer but the customer feels more confident in making the decision since
they have experienced purchasing the product in the past.

For marketers it is important to understand how consumers treat the

purchase decisions they face. If a company is targeting customers who feel a
purchase decision is difficult (i.e., Major New Purchase), their marketing
strategy may vary greatly from a company targeting customers who view the
purchase decision as routine. In fact, the same company may face both
situations at the same time; for some the product is new, while other
customers see the purchase as routine. The implication of buying behavior
for marketers is that different buying situations require different marketing
Why Consumers Buy
As we discussed in Part 1: What is marketing? Customers make purchases in
order to satisfy needs. Some of these needs are basic and must be filled by
everyone on the planet (e.g., food, shelter) while others are not required for
basic survival and vary depending on the person. It probably makes more
sense to classify needs that are not a necessity as wants or desires. In fact,
in many countries where the standard of living is very high, a large portion of
the populations income is spent on wants and desires rather than on basic


In this tutorial when we mention the consumer we are referring to the actual
buyer, the person spending the money. But is should also be pointed out that
the one who does the buying is not necessarily the user of what is bought
and that others may be involved in the buying decision in addition to the
actual buyer. While the purchasing process in the consumer market is not as
complex as the business market, having multiple people involved in a
purchase decision is not unusual. For example, in planning for a family
vacation the mother may make the hotel reservations but others in the
family may have input on the hotel choice. Similarly, a father may purchase
snacks at the grocery store but his young child may be the one who selected
it from the store shelf.








understanding how decisions are made but also understanding the dynamics
that influence purchases.
What Influences Purchasing?
As we discussed the decision-making process for consumers is anything but
straight forward. There are many factors that can affect this process as a
person works through the purchase decision. The number of potential
influences on consumer behavior is limitless. However, marketers are well
served to understand the KEY influences. By doing so they may be in a
position to tailor their marketing efforts to take advantages of these
influences in a way that will satisfy the consumer and the marketer
(remember this is a key part of the definition of marketing).


For the purposes of this tutorial we will break these influences down into
three main categories: Internal, External and Marketing. However, those
interested in learning more about customer buying activity may want to
consult one or more consumer behavior books where they will find additional
methods for explaining consumer buying behavior.
For the most part the influences are not mutually exclusive. Instead, they are
all interconnected and, as we will see, work together to form who we are and
how we behave.
For each of the influences that are discussed we will provide a basic
description and also suggest its implication to marketers. Bear in mind we
only provide a few marketing implications for each influence; clearly there
are many more.


We start our examination of the influences on consumer purchase decisions

by first looking inside ourselves to see which are the most important internal
factors that affect how we make choices.
Perceptual Filter
Perception is how we see ourselves and the world we live in. However, what
ends up being stored inside us doesnt always get there in a direct manner.
Often our mental makeup results from information that has been consciously
or unconsciously filtered as we experience it, a process we refer to as a
perceptual filter. To us this is our reality, though it does not mean it is an
accurate reflection on what is real. Thus, perception is the way we filter
stimuli (e.g., someone talking to us, reading a newspaper story) and then
make sense out of it.

Perception has several steps.

Exposure sensing a stimuli (e.g. seeing an ad)
Attention an effort to recognize the nature of stimuli (e.g. recognizing it is
an ad)
Awareness assigning meaning to a stimuli (e.g., humorous ad for
particular product)
Retention adding the meaning to ones internal makeup (i.e., product has
fun ads)
How these steps are eventually carried out depends on a persons approach
to learning. By learning we mean how someone changes what they know,
which in turn may affect how they act. There are many theories of learning, a


discussion of which is beyond the scope of this tutorial, however, suffice to

say that people are likely to learn in different ways. For instance, one person
may be able to focus very strongly on a certain advertisement and be able to
retain the information after being exposed only one time while another
person may need to be exposed to the same advertisement many times
before he/she even recognizes what it is. Consumers are also more likely to
retain information if a person has a strong interest in the stimuli. If a person
is in need of new car they are more likely to pay attention to a new
advertisement for a car while someone who does not need a car may need to
see the advertisement many times before they recognize the brand of
Marketing Implication:
Marketers spend large sums of money in an attempt to get customers to
have a positive impression of their products. But clearly the existence of a
perceptual filter suggests that getting to this stage is not easy. Exposing
consumers to a product can be very challenging considering the amount of
competing product messages (ads) that are also trying to accomplish the
same objective (i.e., advertising clutter). So marketers must be creative and
use various means to deliver their message Once the message reaches
consumer it must be interesting enough to capture their attention (e.g., talk
about the products benefits). But attending to the message is not enough.
For marketers the most critical step is the one that occurs with awareness.
Here marketers must continually monitor and respond if their message
becomes distorted in ways that will negatively shape its meaning. This can
often happen due in part to competitive activity (e.g., comparison
advertisements). Finally, getting the consumer to give positive meaning to
the message they have retained requires the marketer make sure that
consumers accurately interpret the facts about the product.

Knowledge is the sum of all information known by a person. It is the facts of

the world as he/she knows it and the depth of knowledge is a function of the
breadth of worldly experiences and the strength of an individuals long-term
memory. Obviously what exists as knowledge to an individual depends on
how an individuals perceptual filter makes sense of the information it is
exposed to.
Marketing Implications:
Marketers may conduct research that will gauge consumers level of
knowledge regarding their product. As we will see below, it is likely that other
factors influencing consumer behavior are in large part shaped by what is
known about a product. Thus, developing methods (e.g., incentives) to
encourage consumers to accept more information (or correct information)
may affect other influencing factors.

In simple terms attitude refers to what a person feels or believes about
something. Additionally, attitude may be reflected in how an individual acts
based on his or her beliefs. Once formed, attitudes can be very difficult to
change. Thus, if a consumer has a negative attitude toward a particular issue
it will take considerable effort to change what they believe to be true.

Marketing Implication:
Marketers facing consumers who have a negative attitude toward their
product must work to identify the key issues shaping a consumers attitude
then adjust marketing decisions (e.g., advertising) in an effort to change the

attitude. For companies competing against strong rivals to whom loyal

consumers exhibit a positive attitude, an important strategy is to work to see
why consumers feel positive toward the competitor and then try to meet or
beat the competitor on these issues. Alternatively, a company can try to
locate customers who feel negatively toward the competitor and then
increase awareness among this group
An individuals personality relates to perceived personal characteristics that
are consistently exhibited, especially when one acts in the presence of
others. In most, but not all, cases the behaviors one projects in a situation is
similar to the behaviors a person exhibits in another situation. In this way
personality is the sum of sensory experiences others get from experiencing a
person (i.e., how one talks, reacts). While ones personality is often
interpreted by those we interact with, the person has their own vision of their
personality, called self concept, which may or may not be the same has how
others view us.
Marketing Implication:
For marketers it is important to know that consumers make purchase
decisions to support their self concept. Using research techniques to identify
how customers view themselves may give marketers insight into products
and promotion options that are not readily apparent. For example, when
examining consumers a marketer may initially build marketing strategy
around more obvious clues to consumption behavior, such as consumers
demographic indicators (e.g., age, occupation, income). However, in-depth
research may yield information that shows consumers are purchasing
products to fulfill self-concept objectives that have little to do with the
demographic category they fall into (e.g., senior citizen may be making


purchases that make them feel younger). Appealing to the consumers self
concept needs could expand the market to which the product is targeted.
This influencing factor relates to the way we live through the activities we
engage in and interests we express. In simple terms it is what we value out
of life. Lifestyle is often determined by how we spend our time and money.
Marketing Implication:
Products and services are purchased to support consumers lifestyles.
Marketers have worked hard researching how consumers in their target
markets live their lives since this information is key to developing products,
suggesting promotional strategies and even determining how best to
distribute products. The fact that lifestyle is so directly tied to marketing
activity will be further examined as we discuss developing target market
strategies (See Part 5 Targeting Markets).
Roles represent the position we feel we hold or others feel we should hold
when dealing in a group environment. These positions carry certain
responsibilities yet it is important to understand that some of these
responsibilities may, in fact, be perceived and not spelled out or even
accepted by others. In support of their roles, consumers will make product
choices that may vary depending on which role they are assuming. As
illustration, a person who is responsible for selecting snack food for an office
party his boss will attend may choose higher quality products than he would
choose when selecting snacks for his family.
Marketing Implication:


Advertisers often show how the benefits of their products aid consumers as
they perform certain roles. Typically the underlying message of this
promotional approach is to suggest that using the advertisers product will
help raise ones status in the eyes of others while using a competitors
product may have a negative effect on status.
Motivation relates to our desire to achieve a certain outcome. Many internal
factors we have already discussed can affect a customers desire to achieve
a certain outcome but there are others. For instance, when it comes to
making purchase decisions customers motivation could be affected by such
issues as financial position (e.g., can I afford the purchase?), time constraints
(e.g., do I need to make the purchase quickly?), overall value (e.g., am I
getting my moneys worth?), and perceived risk (e.g., what happens if I make
a bad decision).
Marketing Implication:
Motivation is also closely tied to the concept of involvement, which relates to
how much effort the consumer will exert in making a decision. Highly
motivated consumers will want to get mentally and physically involved in the
purchase process. Not all products have a high percentage of highly involved
customers (e.g., milk) but marketers who market products and services that
may lead to high level of consumer involvement should prepare options that
will be attractive to this group. For instance, marketers should make it easy
for consumers to learn about their product (e.g., information on website, free
video preview) and, for some products, allow customers to experience the
product (e.g., free trial) before committing to the purchase.


Consumer purchasing decisions are often affected by factors that are outside
of their control but have direct or indirect impact on how we live and what
we consume.
Culture represents the behavior, beliefs and, in many cases, the way we act
learned by interacting or observing other members of society. In this way
much of what we do is shared behavior, passed along from one member of
society to another. Yet culture is a broad concept that, while of interest to
marketers, is not nearly as important as understanding what occurs within
smaller groups or sub-cultures to which we may also belong. Sub-cultures
also have shared values but this occurs within a smaller groups. For instance,
sub-cultures exist where groups share similar values in terms of ethnicity,
religious beliefs, geographic location, special interests and many others.
Marketing Implication:
As part of their efforts to convince customers to purchase their products,
marketers often use cultural representations, especially in promotional
appeals. The objective is to connect to consumers using cultural references
that are easily understood and often embraced by the consumer. By doing so
the marketer hopes the consumer feels more comfortable with or can relate
better to the product since it corresponds with their cultural values.
Additionally, smart marketers use strong research efforts in an attempt to
identify differences in how sub-culture behaves. These efforts help pave the
way for spotting trends within a sub-culture, which the marketer can
capitalize on through new marketing tactics (e.g., new products, new sales
channels, added value, etc.).

Other Group Membership


In addition to cultural influences, consumers belong to many other groups

with which they share certain characteristics and which may influence
purchase decisions. Often these groups contain opinion leaders or others
who have major influence on what the customer purchases. Some of the
basic groups we may belong to include:
Social Class represents the social standing one has within a society based
on such factors as income level, education, occupation
Family ones family situation can have a strong effect on how purchase
decisions are made
Reference groups most consumers simultaneously belong to many other
groups with which they associate or, in some cases, feel the need to

Marketing Implications:
Identifying and understanding the groups consumers belong to is a key
strategy for marketers. Doing so helps identify target markets, develop new
products, and create appealing marketing promotions to which consumers
can relate. In particular, marketers seek to locate group leaders and others
to whom members of the group look for advice or direction. These opinion
leaders, if well respected by the group, can be used to gain insight into group
behavior and if these opinion leaders accept promotional opportunities could
act as effective spokespeople for the marketers products.
A purchase decision can be strongly affected by the situation in which people
find themselves. Not all situations are controllable, in which case a consumer
may not follow their normal process for making a purchase decision. For


instance, if a person needs a product quickly and a store does not carry the
brand they normally purchase, the customer may choose a competitors
Marketing Implications:
Marketers can take advantage of decisions made in uncontrollable situations
in at least two ways. First, the marketers can use promotional methods to
reinforce a specific selection of products when the consumer is confronted
with a particular situation. For example, automotive services can be
purchased that promise to service vehicles if the user runs into problems
anywhere and at anytime. Second, marketers can use marketing methods
that attempt to convince consumers that a situation is less likely to occur if
the marketers product is used. This can also be seen with auto products,
where marketers explain that using their product will prevent unexpected
damage to their vehicles.

How Consumers Buy

So now that we have discussed the factors influencing a consumers decision
to purchase, lets examine the process itself. This process is presented in a
sequence of 5 steps as shown below.
However, whether a consumer will actually carryout each step depends on
the type of purchase decision that is faced. For instance, for minor repurchases the consumer may be quite loyal to the same brand, thus the
decision is a routine one (i.e., buy the same product) and little effort is
involved in making a purchase decision. In cases of routine, brand loyal
purchases consumers may skip several steps in the purchasing process since
they know exactly what they want allowing the consumer to move quickly
through the steps. But for more complex decisions, such as Major New


Purchases, the purchasing process can extend for days, weeks, months or
longer. So in presenting these steps marketers should realize that, depending
on the circumstances surrounding the purchase, the importance of each step
may vary.

1. Need/Want/Desire is recognized
In the first step the consumer has determined that for some reason he/she is
not satisfied (i.e., consumers perceived actual condition) and wants to
improve his/her situation (i.e., consumers perceived desired condition). For
instance, internal triggers, such as hunger or thirst, may tell the consumer
that food or drink is needed. External factors can also trigger consumers
needs. Marketers are particularly good at this through advertising, in-store
displays and even the intentional use of scent (e.g., perfume counters). At
this stage the decision-making process may stall if the consumer is not
motivated to continue (see Motivation above). However, if the consumer
does have the internal drive to satisfy the need they will continue to the next
2. Search for Information
Assuming consumers are motivated to satisfy his or her need, they will next
undertake a search for information on possible solutions. The sources used to
acquire this information may be as simple as remembering information from
past experience (i.e., memory) or the consumer may expend considerable
effort to locate information from outside sources (e.g., Internet search, talk
with others, etc.). How much effort the consumer directs toward searching
depends on such factors as: the importance of satisfying the need, familiarity
with available solutions, and the amount of time available to search. To
appeal to consumers who are at the search stage, marketers should make
efforts to ensure consumers can locate information related to their product.

For example, for marketers whose customers rely on the Internet for
information gathering, attaining high rankings in search engines has become
a critical marketing objective.
3. Evaluate Options
Consumers search efforts may result in a set of options from which a choice
can be made. It should be noted that there may be two levels to this stage.
At level one the consumer may create a set of possible solutions to their
needs (i.e., product types) while at level two the consumer may be
evaluating particular products (i.e., brands) within each solution. For
example, a consumer who needs to replace a television has multiple
solutions to choose from such as plasma, LCD and CRT televisions. Within
each solution type will be multiple brands from which to choose. Marketers
need to understand how consumers evaluate product options and why some
products are included while others are not. Most importantly, marketers must
determine which criteria consumers are using in their selection of possible
options and how each criterion is evaluated. Returning to the television
example, marketing tactics will be most effective when the marketer can
tailor their efforts by knowing what benefits are most important to
consumers when selecting options (e.g., picture quality, brand name, screen
size, etc.) and then determine the order of importance of each benefit.

4. Purchase
In many cases the solution chosen by the consumer is the same as the
product whose evaluation is the highest. However, this may change when it
is actually time to make the purchase. The intended purchase may be
altered at the time of purchase for many reasons such as: the product is out-


of-stock, a competitor offers an incentive at the point-of-purchase (e.g., store

salesperson mentions a competitors offer), the customer lacks the
necessary funds (e.g., credit card not working), or members of the
consumers reference group take a negative view of the purchase (e.g.,
friend is critical of purchase). Marketers whose product is most desirable to
the consumer must make sure that the transaction goes smoothly. For
example, Internet retailers have worked hard to prevent consumers from
abandoning online purchase (i.e., online shopping carts) by streamlining the
checkout process. For marketers whose product is not the consumers
selected product, last chance marketing efforts may be worth exploring, such
as offering incentives to store personnel to talk up their product at the
checkout line.
5. After-Purchase Evaluation
Once the consumer has made the purchase they are faced with an
evaluation of the decision. If the product performs below the consumers
expectation then he/she will re-evaluate satisfaction with the decision, which
at its extreme may result in the consumer returning the product while in less
extreme situations the consumer will retain the purchased item but may take
a negative view of the product. Such evaluations are more likely to occur in
cases of expensive or highly important purchases. To help ease the concerns
consumers have with their purchase evaluation, marketers need to be
receptive and even encourage consumer contact. Customer service centers
and follow-up market research are useful tools in helping to address
purchasers concerns.
As weve seen, consumer purchasing is quite complex.

Cognitive and personal biases in decision making


It is generally agreed that biases can creep into our decision making
processes, calling into question the correctness of a decision. Below is a list
of some of the more common cognitive biases.
Selective search for evidence - We tend to be willing to gather facts that
support certain conclusions but disregard other facts that support different
Premature termination of search for evidence - We tend to accept the first
alternative that looks like it might work.
Conservatism and inertia - Unwillingness to change thought patterns that we
have used in the past in the face of new circumstances.








the scope of our past experiences; rejection of the unfamiliar.

Selective perception - We actively screen-out information that we do not
think is salient.
Wishful thinking or optimism - We tend to want to see things in a positive
light and this can distort our perception and thinking.
Recency - We tend to place more attention on more recent information and
either ignore or forget more distant information.
Repetition bias - A willingness to believe what we have been told most often
and by the greatest number of different of sources.
Anchoring - Decisions are unduly influenced by initial information that shapes
our view of subsequent information.


Group think
Peer pressure to conform to the opinions held by the group.
Source credibility bias - We reject something if we have a bias against the
person, organization, or group to which the person belongs: We are inclined
to accept a statement by someone we like.
Incremental decision making and escalating commitment - We look at a
decision as a small step in a process and this tends to perpetuate a series of
similar decisions. This can be contrasted with zero-based decision making.
Inconsistency - The unwillingness to apply the same decision criteria in
similar situations.

Attribution asymmetry
We tend to attribute our success to our abilities and talents, but we attribute
our failures to bad luck and external factors. We attribute other's success to
good luck, and their failures to their mistakes.
Role fulfillment - We conform to the decision making expectations that others
have of someone in our position.
Underestimating uncertainty and the illusion of control - We tend to
underestimate future uncertainty because we tend to believe we have more
control over events than we really do.
Faulty generalizations - In order to simplify an extremely complex world, we
tend to group things and people. These simplifying generalizations can bias
decision making processes.
Ascription of causality - We tend to ascribe causation even when the
evidence only suggests correlation. Just because birds fly to the equatorial

regions when the trees lose their leaves, does not mean that the birds
migrate because the trees lose their leaves

o Research Objective
o Research Design
o Sample Size
o Research Hypothesis




To study the consumer buying behavior for Godrej & Boyce

manufacturing Bhubaneswar branch.

To study the view of people about various factors while buying from
Direct Sales Bhubaneswar

To know customer income range and their ability to purchase

To know the reaction regarding after sales service.

Research Design
2 Age*2 Sex

Exploratory Research

Descriptive Research


Bhubaneswar city Nayapalli, Khandagiri, Oldtown ,Kalinga Vihar, Acharya
Vihar,Unit-8, Pallashpalli

Area sampling


Primary data collection Through questionnaire.

Secondary data collection Books, Magazines & Websites

Data collection
1. Measurement instrument: structured questionnaire
2. Method: survey

Sources of data

A. Primary data- primary data were collected through a well structured

questionnaire designed separately for consumers. A pilot survey was
conducted to test the utility of the questionnaire and necessary
changes being made.


B. Secondary data- secondary data are collected from various WEB

SITES (,, )
Book (Philip Kotler) etc.

Sample size: Total sample size is 156 individual customers, out of which
all are valid. Sample procedure Area sampling
Sample area: Bhubaneswar
In BBSR the area covered is, Nayapalli, Khandagiri, Oldtown ,Kalinga Vihar,
Acharya Vihar,Unit-8, Pallashpalli because in this particular area there are so
many existing customers as per companys register.
Data collected from the survey through systematically framed questionnaires
and those are being analyzed and shown in graphical representation


Chapter -5

Results and Interpretation

Analysis of data

Graphical presentation


Data Analysis and Interpretation

Sample Size- 156

Nayapalli- 78
Male- 111

Khandagiri- 30

Oldtown- 34

Others- 14

Female- 45

Age Grouop- Young Age group (20-34) , Middle Age Group (35-50),
Old Age Group (51-69)
Consumer Profile Analysis


The survey included 156 individuals out of which 111 are Male respondent
and 45 are female respondents. The survey is basically conducted in
Nayapalli, Khandagiri, Oldtown and some other areas. The ratio of male
respondent to female respondent is 2.46:1.
Psychographic Analysis
Life style Analysis

From the above chart it can be interpreted that 53.8% of the total sample are
more culture oriented irrespective of place and age. Nayapalli area alone
holds 25.6% of the total population, then followed by old town, khandagiri
and other regions.
24.25% of the sample are sports oriented , it includes mostly the agegroup of
20-34.the rest 21.95% are outdoor oriented.
Scope for Godrej
So eventually it can be interpreted that most of the people in Bhubaneswar
are culture oriented. So Godrej has to take care of that. It should sponsor or
arrange some cultural programme in the heart of the city to catch the

attention of the culture oriented people. More specifically Godrej can attract
to the younger by sponsoring the local club matches and can provide some
youth awards to the emerging students which will be less expensive and
highly productive.

Personality Analysis

Personality Analysis
The column chart of demographic analysis says that most of the respondent
of the representative sample are ambitious followed by gregarious and
authoritarian and compulsive respectively.

Scope for Godrej

From the above analysis it is clear that respondent belonging to age group
20-34 and 35-50 are mostly ambitious. Yes obviously they will expect more in


comparision to their pay. This generation always wants to be the best in a

stipulated time period. So Godrej has the opportunity to attract the young
mass by providing attractive offers especially in festive seasons.

Demographic Analysis

From the revealed survey it is clear that people belong to three age group
i.e. 20-34, 35-50,51-69. The average annual income of the young age group
i.e. 20-34 is 4lakh per annum having 4 family members.
The little older age group with comparison to the former is also in the same
trend which has the average annual income of 3.9 lakh with 4 family
The older part of the sample has the highest average salary of 4.7 lakh per
annum with 5 family members.
Scope for Godrej


Godrej is able to touch the heart of young and middle age people so it should
march forward without loosing their faith. It is only possible by providing
qualitative product.

Q.1. Which appliance have you purchased from Direct Sales?

From the above Chart it can be interpreted that Refrigerator is the first
choice of everyone . the middle age group has taken the aerial root by
covering the no. of 66 refrigerators. From this it is clear that Godrej has an
impressive market share in Refrigerator.
But godrej will not be happy with the no. of washing machine and
airconditions sold during the year. So it clearly sights that Godrej is quite
back in comparision to its competitors. Microwave Oven is also in the same


But the most shocking thing is that Godrej is unable to open its account in
DVD, Water Purifier and UPS. So Godrej has to exercise its brain towards
heavy advertisement in order to stay tuned in the track.
Scope for Godrej
Godrej has the opportunity to promote its Dog category products with the
likes of its star product Refrigerator.
So the management of Godrej should exercise its brain on this.
Another factor can not be omitted that Godrej is able to attract the young as
well as middle age group. so there is a huge opportunity to march forward
with the ambitious and gregarious personalities.
2. Why you purchased appliance from Direct Sales?

As general human tendency is always searching good products with less
price and it certainly becomes more when a company offers an exchange
offer. From the above chart it is clear that the middle age group has taken
the most benefit from the offer so as the most oldest age group. though the
young age group is also in the trend but availability of various choices has
attracted them very much.


Competitive pricing is also somehow a point of concern for both young and
middle age group. But the old age group has not taken competitive pricing
into count.
In direct sales sales person is the biggest factor. But the respondents have
not given importance to the sales person during their purchase decision.
Only middle age group has put some importance.
Life becomes very busy now days. So general expectation is that people will
not spend many time in searching dealers to buy product. But the
respondents have proved this wrong. They are well concerned about the
product that they are going to buy.
Scope for Godrej
Godrej has got a positive response from its customers by providing exchange
offer. But the point of discussion is that it is only offering this offer in three
products. So the management should think about providing exchange offer
on other products, so that Godrej will satisfy its tagline.

3. What are the factors responsible to select a product?



Normally when we are going to buy some valuable product generally we

focus on brand name and quality primarily. Like us brand name and quality
are also the first preference of the respondents which is pretty clear from the
above chart.
The respondents has given priority on brandname followed by quality, price,
after sales service. But nobody is influenced by their peers.
Scope for Godrej
Godrej should target the gregarious personalities in different areas in order
to increase its public relation. Public relation and publicity can be easily done
through existing customers who have gregarious personalities.
4. What is the most important factor in a Sales Person making Direct Sales?

When we are going to buy some product from Direct sales generally we test
his product knowledge so that we can get the most valuable product with


satisfaction. This survey has also proved that product knowledge is the most
important thing that they expect from a sales person. These views are
especially from the young and middle age group respondent. The old age
group has put their importance on the grooming and appearance of the sales
person which is placed in the second position by both the young and middle
age group. Communication skill and Ability to clear concerns have also
opened their account but they have been placed 3rd and fourth respectively.
Scope for Godrej
The survey reveals that Godrej should put more emphasis on training which
will enrich their knowledge regarding the products. The sales persons should
also be given motivational training in order satisfy the demand of the market
in every condition
5. Will you prefer to pay a little more amount to get a better quality product and



Certainly one will be eager to pay a little more amount than the existing if he
is offered a qualitative product satisfying his need. If we will put our eye
towards the various age groups Yes is quite superseding over No.
So we can also interpret that the ambitious and greagarious personality
group has strongly put positive view. But the authoritarian and compulsive
group has strongly disagreed to the point.
Scope for Godrej
Godrej is always getting massive positive response from the gregarious and
ambitious personality. So Godrej should take this as an advantage. Through
the gregarious personalities it can be able to get publicity.

6. By Satisfaction of a product you mean



When the matter comes into satisfaction level we generally hope for the
best. The data from the survey says that all age groups put quality as their
first choice that they expect from a product. By giving this kind of response
this kind of response they have proved that if the quality of the product is
good and if the product is reliable then after sales service is not required.
Thats why good after sales service has come in second place followed value
for money and price.
Scope for Godrej
After sales service is a headache for every company now. So Godrej has to
consider about producing quality products so that after sales service will not
be required. So the management should think over this.

7. Please rank the overall satisfaction level from the product bought from Direct Sales
on a scale of 10?


During the survey the respondents were asked to rank the product from the
scale 1-10. The respondents also responded well.
Both young and old age group have given the rank 7.8 in average where as
the middle age group has given the average rank of 7.2.
Scope for Godrej
Godrejs position is Average which is clear from the analysis. So the top
management should think about this to get rid of excellent position.

8. Feedback



The survey report states that most people are satisfied with the product and
brand. All the age group did not hesitate to put their view in favour of
satisfied towards this corporate giant. But the management should not sleep
it should improvise its after sales service. So that it can secure no.1 position


Findings, Suggestions &




No proper Advertisement

Not widely spread in the rural area

After sales service is not satisfactory

Management is quite rigid

There is a huge gap between words and work

It aims at increasing the sales volume rather after sales service

No proper co-ordination among the sales executives

Motivation level is quite low


The sales executives are not disciplined

The sales executives lack Professionalism

It has an opportunity to capitalize its sales growth by taking the

advantage on Peoples faith.

There is no communication with the customers after the selling of the


Godrej , Bhubaneswar is not trustworthy due to the undisciplined sales


Many customers fail to register their complain

Godrej has become no. 1 in Orissa due to the Exchange offer rather its
Brand impact.


It should highly promote itself in rural areas.

It should offer a free insurance scheme/package of a little amount with

every appliance.

It should follow market development strategy for Orissa circle.

In rural area it should call for exclusive dealers rather opening its own
sales division initially.

Improvement in after sales service.


Good motivational training should be provided to employees.

They should be taught general etiquettes.

It can go for advertisement through leaflets.

According to the study it can target the gregarious personalities in

different areas through which it can increase its public relation.

As many of the existing customers are having ambitious and

gregarious personality it should not loose their faith.

As the study reveals that most people are culture oriented so it can
arrange / sponsor some cultural programmes in order to sustain faith of
the existing customers so as to attract other culture oriented people.

As some people are sports oriented it can sponsor some important club
and state level matches in order to attract sports oriented people.

The company should offer exchange offer in every product.


The company should follow the following advertising strategy

It should do its advertisement by distributing its leaflets which will be very

less expensive

It can get publicity by organizing interesting games with small prizes.

Tangible advertisement of product which are new in market

Advertisement in front of Malls, Big Bazaar, City Centre


It will be less time consuming and less expensive in comparison to

electronic and print media. Another benefit from this advertisement is that
you can come across directly with consumers and can study their behavior.

Implications for senior management to design strategies

Godrej is operating in 2 cities of Orissa. Now it extended its branch into

one more place. But it can not be avoided that Godrej is no.1 Brand in
Orissa though it is operating in 2 cities. From this the management can
easily forecast the future if it opens its outlets in every major towns
and it should call for exclusive dealers in rural areas.

It should change in its policy of appointing less educated employee.

They might give you a handsome sales volume initially but for long-


term its not possible to continue the trend because of their negative

It should put more emphasis on Customer Relationship Management.

For Orissa circle Market development strategy will do the business

instead product development strategy.

Godrej is well known in rural areas for its security equipments. So the
management should think on taking the advantage from this.

The top management should consider about providing small insurance

schemes as the parents of 20th century are very careful towards their
children. Which will not only help the company to increase the sales
volume but also it will provide an opportunity to start a new business in
the form of insurance.

It should update itself with the most advanced technology

As population is growing every business entity is busy in increasing its

sales volume rather after sales service. It provides an opportunity for
Godrej to take advantage from this.

It should target high sales volume through best service rather best
sales team.

A Suggested Marketing Action plan for GodrejDirect, Bhubaneswar.

A clearly defined professional service and a marketing message



At first Godrej should communicate the essence of its product and

service to potential clients. It must generate immediate attention and

Well designed and implemented marketing activities or strategies that

get the word out about the products and services. Godrej should
design its strategies to build familiarity and convey vital information
while building a relationship with its future clients.

Godrej should follow an organized, step-by-step selling process that

turns qualified prospective clients into motivated paying clients as
quickly and as efficiently as possible.


and service



The Visitpreliminarie
Trial Close



Trial Close

Listening to

How to understand consumer behavior better


When market researchers begin evaluating the behavior of consumers, it is a

mistake to rely on conventional wisdom, especially when it is possible to
study the actual activity in which consumers are engaged when using a
product or service. Where are they when they buy certain items? When do
they use it? Who is with them when they make the purchase? Why do they
buy under certain circumstances and not others? Researchers need to
determine the major needs being satisfied by that good or service in order to
effectively sell it.
There are two principal ways to evaluate the motivation behind consumer
purchases. These are by direction (what they want) and intensity (how much
they want it). Direction refers to what the customer wants from a product.
For example, if a customer is selecting a Refrigerator, they may like the idea
is one Refrigerator is cheaper than another, but what they really want is fast
Refrigerator, and will probably pay more if they think the more expensive
brand can satisfy their requirement. Godrej needs to understand the principal
motivation behind each type of product to correctly target potential
The other way to evaluate consumer behavior, intensity, refers to whether a
customer's interest in a product is compelling enough that they will go out
and make the purchase. Good marketing can create that kind of intensity.
While it is easy to speculate on all these elements of consumer motivation, it
is much harder to actively research motivating factors for any given product.
It is rare that a consumer's reasons for buying a product or service can be
accurately determined through direct questioning. Godrej has to develop
other ways to get real responses. These include asking consumers "How do
you think a friend of yours would react to this marketing material?" While
consumers do not like to admit that marketing affects them at all, they are
often willing to speculate on how it would affect someone else. And most
often they answer with what would be their own responses.

Another tactic that has proven successful is to ask consumers "What kind of
person would use this type of product?" By asking this question, it can be
determined what the consumer believes buying the product would say about
them, as well as whether or not they would want to be seen as that type of
person. One of the best ways to influence consumer behavior is to give
buyers an acceptable motive. This is somewhat related to the idea of asking
what type of person would buy a certain product in evaluating consumer
behavior. Consumers want to feel they're doing something good, being a
good person, eating healthy, making contacts, keeping up appearances, or
that they just deserve to be spoiled a little bit. If marketers can convince
consumers that they need a product or service for some "legitimate" reason,
customers will be more likely to make a purchase. Finally, another alternative
for influencing customer behavior is by offering specialized goods.



Limitations and Conclusion


Limitations of the study

Getting accurate response from the customers due to their inherent

problems. They may be partial or may refuse to cooperate.

Many of the people dont find time to give response.

Due to poor after sales service customers strictly rejected the


After the successfully completion of my summer internship I understood that
market research is an important aspects for a company through out the life
cycle of a particular product. It helps in knowing the changing taste,
preference, life style etc. of the consumer. During the training I found that
Area Sampling method is a perfective market research technique.
With reference to my research topic that is CONSUMER BUYING BEHAVIOR
TOWARDS GODREJ HOME APPLIANCES. It was found that, 70% of the
respondents have responded with a positive note. That means they are
satisfied with their product.
From the study it was found that most of the customers had gone for Godrej
brand only due to exchange offer i.e. 85%. It was also found that Brand
name and quality of the product are the first preference for the customers
apart from age group. From the study it was also found that customers put
more preference on product knowledge of the sales person during the
purchase of the product. So the company should provide effective training to
its sales person regarding product features.
Eventually it can be concluded that Godrej Appliance has the market share in
Orissa. Exchange offer has been the reason to buy the Godrej product.





Marketing Management, A south Asian PerspectiveKotler Philip, Keller Kelvin, Koshy Abraham, Jha Mithileshwar,
Edition-Twelfth edition. Publisher- Prentice Hall of India (p) Ltd,

Research Methodology- Kothari C.R.,

Edition-2004, reprint 2006
Publisher New Age International (P) Ltd, publishers
Methods of Data Collection, page no- 95
Sampling Fundamentals, page no- 15






Family Members:
Annual Household Income:

Q1) Which appliance have you purchased from Direct Sales?

a) Refrigerator b) Washing Machine c) Air-Conditioner d) Microwave Oven e) DVD
f) Water Purifier
g) UPS Q2) Why you purchased appliance from Direct Sales?
a) Availability of vaired choice
b) Competitive pricing
c) Exchange offer
d) Sales Person
e) No time spent on finding a dealer


Q3) What are the factors responsible to select a product?

a) Brand Name
b) Quality
c) Price
d) After Sales Service
e) Peer pressure
Q4) What is the most important factor in a Sales Person making Direct Sales?
a) Communication skills
b) Product Knowledge
c) Grooming / Apperance
d) Ability to clear concerns

Q5) Will you prefer to pay a little more amount to get a better quality product and services?
a) Yes

b) No

Q6) By Satisfaction of a product you mean ...

a) Price
b) Quality Product
c) Good after sales serivce
d) Value for money (ready to pay bit more for a quality product)

Q7) Please rank the overall satisfaction level from the product bought from Direct Sales on a scale of 10?


Q8) Feedback