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Summer Internship Report

On

“CONSUMER BEHAVIOUR”

By

----
DIKSHA SONI

BBA(CAM) 2010

Under the Supervision of

Mr.VIJAY NEHRA

Department of Finance

In Partial Fulfillment of Award of Bachelor of Business Administration

DAV INSTITUTE OF MANAGEMENT

FARIDABAD
DAV INSTITUTE OF MANAGEMENT,FARIDABAD

DECLARATION

I, DIKSHA ARORA student of Bachelor of Business Administration from DAV Institute of Managment

hereby declare that I have completed Summer Internship on “COMSUMER BEHAVIOUR” as part of the course requirement.
I further declare that the information presented in this project are true and original to the best of my knowledge.

Date:26/07/10 DIKSHA SONI


Enroll. No
Place:Faridabad
BBA Class of 2010
LUMAX INDUSTRIES Ltd.

B-86, Mayapuri Industrial Area, Phase-I

New Delhi-110064(India)

Email: latlmkt@airtelbroadband.in

August 26,2010

Diksha Soni

DAV Institute of Management

Faridabad

To Whom It May Concern:

This is to certify that Diksha Soni , a student of DAV Instutute of Management,Faridabad has
successfully completed her internship at LUMAX INDUSTRIES LTD. During the period June
1.2010 to July 31,2010, under the guidance of Vijay Nehra.

We truly appreciate the sincerity and dedication with which the student has carried out the
project.

All the best for all your future endeavours!

Sincerely Yours,

For LUMAX INDUSTRIES LTD.


Taranjeet Singh

Zonal HR Manager
ACKNOWLEDGEMENT

This report is the result of efforts put in by many people who contributed to it by offer ing
valuable suggestions, encouraging advices, constructive criticism and proper guidance. At this
level of understanding it is often difficult to understand the wide spectrum of knowledge without
proper guidance and advice. Their support and surveillance throughout the project stand out as
beacon of inspiration to us.

I take this opportunity to express my heartfelt gratitude to my industry guide, Taranjeet Singh,
for offering valuable suggestions, encouraging advices, constructive cr iticism and proper
guidance. I would also like to thank my faculty guide Mr. Vijay nehra, for his continuance
guidance, his immense interest, valuable guidance, constant inspiration and kind co-operation
throughout the period of work undertaken and furnishing me with the in-depth theoretical
knowledge.

I would also express my sincere gratitude to Mr. Pulak Sinha, Rajesh Jauhari,
Rajender Bhardwaj, S.K. Bali and other members of LUMAX who were always ver y helpful and
encouraging. I also acknowledge my profound sense of gratitude to myfriends and parents
for their moral support to carve out this project.

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CONTENTS

S No. Chapter
pg.no.

1. INTRODUCTION
2. COMPANY PROFILE
3. LITERATURE REVIEW
4. RESEARCH METHOLOGY
5. DATA ANALYSIS &INTERPRETATION
6. LIMITATION,RECOMMENDATION & SUGGESTION
7. ANNEXURE

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Introduction

The 1990s have borne witness to dramatic shifts in the marketplace triggered by sharp
changes in the lifestyle patterns of the past and present and the radical revolution in the
telecommunication technology. Time tested concepts on Brand loyalty and Mass Marketing,
are being turned on their heads as they fail to gauge the Behaviour of new generation
customers. The behaviour is characterized by the uniqueness of individual expectations, the
preference for multiple options, propensity to abandon Brand loyalty and switch to
competition Brands that give higher (perceived) value. The new breed is even willing to
import to satisfy specific requirement. It is difficult to classify this generation by
conventional Demographic factors and unless their thought process and buying behaviour are
fully understood, decisions on product designs and packaging, Branding and Distribution
channels are likely to be misplaced. With the inevitability of change looming large over the
horizon, Indian companies must learn from their western counterparts; not only to identify the
sources, timing and direction of the changes likely to affect India, but also the new
competencies and perspective that will enable them to respond to these changes,
comprehensively and effectively. Companies offering Product or Services will need to
understand this new face of the customers. The changing Demographic profile of the
population in terms of education, income, size of family and so on, are important by what
will be more substantive in days to come will be the Psychographics of customers that is how
they feel, think or behave. Markers will have to constantly monitor and understand the
underlying Psychographics to map their respective industries are moving and decide what
needs to be done, by way of adding value that motivates customers to buy the company’s
products and influence the future industry structure.

The study of consumers helps firms and organizations improve their marketing strategies by
understanding issues such as how

The psychology of how consumers think, feel, reason, and select between different
alternatives (e.g., brands, products, and retailers);

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The psychology of how the consumer is influenced by his or her environment (e.g., culture,
family, signs, media);

The behavior of consumers while shopping or making other marketing decisions;

Limitations in consumer knowledge or information processing abilities influence decisions


and marketing outcome;

How consumer motivation and decision strategies differ between products that differ in their
level of importance or interest that they entail for the consumer; and

How marketers can adapt and improve their marketing campaigns and marketing strategies to
more effectively reach the consumer.

One "official" definition of consumer behavior is "The study of individuals, groups, or


organizations and the processes they use to select, secure, use, and dispose of products,
services, experiences, or ideas to satisfy needs and the impacts that these processes have on
the consumer and society." Although it is not necessary to memorize this definition, it brings
up some useful points:

Behavior occurs either for the individual, or in the context of a group (e.g., friends influence
what kinds of clothes a person wears) or an organization (people on the job make decisions as
to which products the firm should use).

Consumer behavior involves the use and disposal of products as well as the study of how they
are purchased. Product use is often of great interest to the marketer, because this may
influence how a product is best positioned or how we can encourage increased consumption.
Since many environmental problems result from product disposal (e.g., motor oil being sent
into sewage systems to save the recycling fee, or garbage piling up at landfills) this is also an
area of interest.

Consumer behavior involves services and ideas as well as tangible products.

The impact of consumer behavior on society is also of relevance. For example, aggressive
marketing of high fat foods, or aggressive marketing of easy credit, may have serious
repercussions for the national health and economy.

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Consumer behaviour is the study of when, why, how, and where people do or do not buy
product. It blends elements from psychology, sociology, social anthropology and economics.
It attempts to understand the buyer decision making process, both individually and in groups.
It studies characteristics of individual consumers such as demographics and behavioural
variables in an attempt to understand people's wants. It also tries to assess influences on the
consumer from groups such as family, friends, reference groups, and society in general.

Customer behaviour study is based on consumer buying behaviour, with the customer playing
the three distinct roles of user, payer and buyer. Relationship marketing is an influential asset
for customer behaviour analysis as it has a keen interest in the re-discovery of the true
meaning of marketing through the re-affirmation of the importance of the customer or buyer.
A greater importance is also placed on consumer retention, customer relationship
management, personalisation, customisation and one-to-one marketing. Social functions can
be categorized into social choice and welfare functions.

Each method for vote counting is assumed as a social function but if Arrow’s possibility
theorem is used for a social function, social welfare function is achieved. Some specifications
of the social functions are decisiveness, neutrality, anonymity, monotonicity, unanimity,
homogeneity and weak and strong Pareto optimality. No social choice function meets these
requirements in an ordinal scale simultaneously. The most important characteristic of a social
function is identification of the interactive effect of alternatives and creating a logical relation
with the ranks. Marketing provides services in order to satisfy customers. With that in mind,
the productive system is considered from its beginning at the production level, to the end of
the cycle, the consumer (Kioumarsi et al., 2009).

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CONSUMER BEHAVIOUR: SIGNIFICANCE

Consumer behaviour is defined as “The dynamic interaction of affect and


cognition, behaviour and the environment b which human beings conduct the exchange
aspects of lives”. IT means that the buying habits of the consumer are greatly affected by
their thought process and their feelings experienced. Human beings are greatly influenced in
their buying actions by various factors like opinion of others, marketing stimuli like
product, advertising, packaging and product appearance.

Importance of Consumer behaviour:

• Ever increasing intensifying competition.


• More aggressive competitors emerging with greater frequency.
• Changes basis of competition.
• Geographic sources of competition are becoming wider.
• Niche attacks are becoming frequent.
• Pace of innovation is rapid.
• Price competition becoming more aggressive
• Product differentiation is declining.

As a principal, the marketing concept involves understanding the needs of the consumers and
translating these needs into products or services to satisfy these needs. The basic objective
inmarketing is to achieve the goal of profit making through customer satisfaction. To do this,
an organization should understand the consumer and be as close to them as possible.

Consumer behaviour is Dynamic:

The feelings, thinking, perceptions and actions of the customer and the society at large keep
changing frequently. For example number of working women is on rise and this has changed
the concept of shopping. The dynamic nature of the consumer behaviour offers challenges to

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marketers and the task of creating marketing strategies becomes complex, and exciting.
Strategies that work today may not work tomorrow. Strategies adopted in one market ma not
work in another. The product life cycle are becoming shorter and create additional pressures
on marketers to bring innovative products and concepts. The concept ‘value’ changes from
time to time. Mahindra and mahindra had to come out with ‘Scorpio’ within launch of
‘Bolero’.

Consumer behaviour involves interactions:

Consumer behaviour involves interactions among peoples thinking, feelings, and actions and
the environment. This forces marketers to understand three things:

• What products and services mean to customers.

• What influences shopping, purchase, and consumption.

• What consumers need to do to purchase and consume products and services.

Consumer behaviour involves exchange:

Consumer behaviour involves exchanges between human beings. People give up something
of value to others and receive something in return. Much of consumer behaviour involves
people giving up money to obtain product and services, that is, exchanges consumers and
sellers. The role of marketing in society is to help create exchange by formulating and
implementingmarketing strategies.

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CONSUMER BEHAVIOUR: OBJECTIVES

1. Understand the impact of the digital revolution on general consumer behavior.

2. Define consumer behavior.

3. Identify the two major approaches to the study of consumer behavior.

4. Understand the development of the marketing concept.

5. Understand the role of consumer research in the study of consumer behavior.

6. Understand how segmentation, targeting, and positioning are used in the study of
consumer behavior.

7. Define customer value, satisfaction, and retention.

8. Discuss the role of ethics in marketing.

9. Describe the societal marketing concept.

Briefly discuss the three interlocking stages of consumer decision-making.

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CONSUMER BEHAVIOUR AT GLANCE

1. DEFINITION

2. OBJECTIVES

3. LIMITATIONS

4. WORKING

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CONSUMER BEHAVIOUR: DEFINITION

“Consumer behaviour is the study of when, why, how, and where people do or do not
buy product. It blends elements
from psychology,sociology, social anthropology and economics. It attempts to understand the
buyer decision making process, both individually and in groups.”

“Actions (that is, behavior) undertaken by people (that is, consumers) that involve the
satisfaction of wants and needs.”

“The behaviour of the consumer or decision maker in the market place of products and
services. Library user behaviour is often captured in library literature under use studies.”

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AWARENESS : This means to know about the existence of the product in the
market. It is the first stage of the adoption process. The consumers are exposed
to the product innovation. The consumers at this stage are not interested in
more information about the product.

PERCEPTION : It is defined as the process by which an individual selects, organizes and


interprets stimuli into a meaningful and coherent of the world. It is how we see the world
around us’. Two persons subject to the same stimulus under the same conditions will react
differently. A stimulus is any unit of input to any of the senses. The study of perception is
largely the study of what we subconsciously add to or subtract from raw sensory to produce
our own private picture of the world.

ATTITUDE : In simple dictionary meaning ‘attitude; means a way of thinking is a learned


predisposition to behave in a consistently favorable or unfavorable way with respect to a
given object. Attitudes are learned may be because of a previous experience with the product,
information acquired from others, and exposure to mass media. Attitudes are not permanent,
they do change over a period of time.

Consumer Behavior

The study of consumers helps firms and organizations improve their marketing strategies by
understanding issues such as how consumers think, feel, reason, and select between different
alternatives (e.g., brands, products);

The psychology of how the consumer is influenced by his or her environment (e.g., culture,
family, signs, media);

The behavior of consumers while shopping or making other marketing decisions;

Limitations in consumer knowledge or information processing abilities influence decisions


and marketing outcome;

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How consumer motivation and decision strategies differ between products that differ in their
level of importance or interest that they entail for the consumer; and how marketers can adapt
and improve their marketing campaigns and marketing strategies to more effectively reach
the consumer.

Understanding these issues helps in adapting strategies by taking the consumer into
consideration. For example, by understanding that a number of different messages compete
for our potential customers’ attention, one learns that to be effective, advertisements must
usually be repeated extensively. It is also learnt that consumers will sometimes be persuaded
more by logical arguments, but at other times will be persuaded more by emotional or
symbolic appeals. By understanding the consumer, the company will be able to make a more
informed decision as to which strategy to employ.

The "official" definition of consumer behavior given in the text is "The study of individuals,
groups, or organizations and the processes they use to select, secure, use, and dispose of
products, services, experiences, or ideas to satisfy needs and the impacts that these processes
have on the consumer and society.

Behavior occurs either for the individual, or in the context of a group (e.g., friends influence
what kinds of clothes a person wears) or an organization (people on the job make decisions as
to which products the firm should use).

Consumer behavior involves the use and disposal of products as well as the study of how they
are purchased. Product use is often of great interest to the marketer, because this may
influence how a product is best positioned or how we can encourage increased consumption.
Since many environmental problems result from product disposal (e.g., motor oil being sent
into sewage systems to save the recycling fee, or garbage piling up at landfills) this is also an
area of interest.

Consumer behavior involves services and ideas as well as tangible products.

The impact of consumer behavior on society is also of relevance. For example, aggressive
marketing of high fat foods, or aggressive marketing of easy credit, may have serious
repercussions for the national health and economy.

There are four main applications of consumer behavior:

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The most obvious is for marketing strategy—i.e., for making better marketing campaigns.
For example, by understanding that consumers are more receptive to food advertising when
they are hungry, we learn to schedule snack advertisements late in the afternoon. By
understanding that new products are usually initially adopted by a few consumers and only
spread later, and then only gradually, to the rest of the population, we learn that (1)
companies that introduce new products must be well financed so that they can stay afloat
until their products become a commercial success and (2) it is important to please initial
customers, since they will in turn influence many subsequent customers’ brand choices.

As a final benefit, studying consumer behavior should make us better consumers. Common
sense suggests, for example, that if you buy a 64 liquid ounce bottle of laundry detergent, you
should pay less per ounce than if you bought two 32 ounce bottles. In practice, however, you
often pay a size premium by buying the larger quantity. In other words, in this case, knowing
this fact will sensitize you to the need to check the unit cost labels to determine if you
are really getting a bargain. There are several units in the market that can be analyzed.

Models of buyer decision making

In an early study of the buyer decision process literature, Frank Nicosia (Nicosia, F. 1966; pp
9-21) identified three types of buyer decision making models. They are the univariate model
(He called it the "simple scheme".) in which only one behavioural determinant was allowed
in a stimulus-response type of relationship; the multi-variate model (He called it a "reduced
form scheme".) in which numerous independent variables were assumed to determine buyer
behaviour; and finally the "system of equations" model (He called it a "structural scheme" or
"process scheme".) in which numerous functional relations (either univariate or multi-variate)
interact in a complex system of equations. He concluded that only this third type of model is
capable of expressing the complexity of buyer decision processes. In chapter 7, Nicosia
builds a comprehensive model involving five modules. The encoding module includes
determinants like "attributes of the brand", "environmental factors", "consumer's attributes",
"attributes of the organization", and "attributes of the message". Other modules in the system
include, consumer decoding, search and evaluation, decision, and consumption.

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General model

A general model of the buyer decision process consists of the following steps:

• Problem recognition;

• Information Search

• Evaluation of Alternative

• Purchase decision

• Purchase

• Post-purchase behavior/buyer's remorse (cognitive dissonance)

There are a range of alternative models, but that of AIUAPR, which most directly links to the
steps in the marketing/promotional process is often seen as the most generally useful;

• AWARENESS - before anything else can happen the potential customers must
become aware that the product or service exists. Thus, the first task must be to gain
the attention of the target audience. All the different models are, predictably, agreed
on this first step. If the audience never hears the message, they will not act on it, no
matter how powerful it is

• INTEREST - but it is not sufficient to grab their attention. The message must interest
them and persuade them that the product or service is relevant to their needs. The
content of the message(s) must therefore be meaningful and clearly relevant to that
target audience's needs, and this is where marketing research can come into its own.

• UNDERSTANDING - once an interest is established, the prospective customer must


be able to appreciate how well the offering may meet his or her needs, again as

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revealed by the marketing research. This may be no small achievement where the
advertiser has just a few words, or ten seconds, to convey their message.

• ATTITUDES - but the message must go even further; to persuade the reader to adopt
a sufficiently positive attitude towards the product or service that he or she will
purchase it, albeit as a trial. There is no adequate way of describing how this may be
achieved. It is simply down to the magic of the advertiser's art, or based on the
strength of the product or service itself.

• PURCHASE - all the above stages might happen in a few minutes while the reader is
considering the advertisement; in the comfort of his or her favorite armchair. The final
buying decision, on the other hand, may take place some time later; perhaps weeks
later, when the prospective buyer actually tries to find a shop which stocks the
product.

• REPEAT PURCHASE - but in most cases this first purchase is best viewed as just a
trial purchase. Only if the experience is a success for the customer will it be turned
into repeat purchases. These repeats, not the single purchase which is the focus of
most models, are where the vendors focus should be, for these are where the profits
are generated. The earlier stages are merely a very necessary prerequisite for this!

This is a very simple model, and as such does apply quite generally. Its lessons are that you
cannot obtain repeat purchasing without going through the stages of building awareness and
then obtaining trial use; which has to be successful. It is a pattern which applies to all repeat
purchase products and services; industrial goods just as much as baked beans. This simple
theory is rarely taken any further - to look at the series of transactions which such repeat
purchasing implies. The consumer's growing experience over a number of such transactions
is often the determining factor in the later - and future - purchases. All the succeeding
transactions are, thus, interdependent - and the overall decision-making process may
accordingly be much more complex than most models allow for.

Cognitive and personal biases in decision making

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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 conclusions.

• 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.

• Experiential limitations - Unwillingness or inability to look beyond 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.

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• 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.

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RESEARCH METHODOLOGY

Research Methodology includes a philosophically coherent collection of theories, concepts


or ideas as they relate to a particular discipline or field of inquiry:

Methodology refers to more than a simple set of methods; rather it refers to the rationale and
the philosophical assumptions that underlie a particular study relative to the scientific
method. This is why scholarly literature often includes a section on the methodology of the
researchers. This section does more than outline the researchers’ methods (as in, “We
conducted a survey of 50 people over a two-week period and subjected the results to
statistical analysis”, etc.); it might explain what the researchers’ ontological or
epistemological views are.

Another key (though arguably imprecise) usage for methodology does not refer to research or
to the specific analysis techniques. This often refers to anything and everything that can be
encapsulated for a discipline or a series of processes, activities and tasks. Examples of this
are found in software development, project management and business process fields. This use
of the term is typified by the outline who, what, where, when, and why. In the documentation
of the processes that make up the discipline, that is being supported by "this" methodology,
that is where we would find the "methods" or processes. The processes themselves are only
part of the methodology along with the identification and usage of the standards, policies,
rules, etc.

Researchers acknowledge the need for rigor, logic, and coherence in their methodologies,
which are subject to peer review.

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The system of collecting data for research projects is known as research
methodology. The data may be collected for either theoretical or practical
research for example management research may be strategically conceptualized
along with operational planning methods and change management.

Some important factors in research methodology include validity of research


data, Ethics and the reliability of measures most of your work is finished by the
time you finish the analysis of your data.

Formulating of research questions along with sampling weather probable or non


probable is followed by measurement that includes surveys and scaling. This is
followed by research design, which may be either experimental or quasi-
experimental. The last two stages are data analysis and finally writing the
research paper, which is organised carefully into graphs and tables so that only
important relevant data is shown.

Methodology can properly refer to the theoretical analysis of the methods


appropriate to a field of study or to the body of methods and principles particular
to a branch of knowledge. In this sense, one may speak of objections to the
methodology of a geographic survey (that is, objections dealing with the
appropriateness of the methods used) or of the methodology of modern
cognitive psychology (that is, the principles and practices that underlie research
in the field). In recent years, however, methodology has been increasingly used
as a pretentious substitute for method in scientific and technical contexts, as in
The oil company has not yet decided on a methodology for restoring the
beaches. People may have taken to this practice by influence of the adjective
methodological to mean "pertaining to methods." Methodological may have
acquired this meaning because people had already been using the more ordinary
adjective methodical to mean "orderly, systematic." But the misuse of
methodology obscures an important conceptual distinction between the tools of
scientific investigation (properly methods) and the principles that determine how
such tools are deployed and interpreted.

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Research Methodology

The Technical Insights research group employs the following research


methodology:

• Step 1: Perform a review of patents to become familiar with the major


developers and commercial players and their processes.

• Step 2: Building on the patent search, review abstracts and


identify scientific papers that help analyze the key players and become
more familiar with technical processes.

• Step 3: Interview university and national laboratory researchers not


involved with the major commercial players to find out about the
advantages and disadvantages of processes, and identify the drivers and
challenges behind technologies; round out the list of key players.

• Step 4: Armed with knowledge from patents, papers, and academic


interviews, call the principal companies, developers, researchers,
engineers, and marketing experts; ask them the appropriate intelligence
questions to satisfy the research requirements.

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Research instrument: Books, Journal, Magazines, prior research.

research instrument

a testing device for measuring a given phenomenon, such as a paper and pencil test, a questionnaire,
an interview, a research tool, or a set of guidelines for observation.

Data collection: Secondary source

Data gathered from surveys, or input from several independent or networked locations via
data capture, data entry, or data logging.

As we saw in the Data Collection: Low-Cost Secondary Research tutorial,


thererket estimates are critical, acquiring the best researched market
information requires a fee

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Tools for data analysis

• Time series

• Trend analysis

• Percentages

COMPANY PROFILE

LUMAX, a well known name in India, is the leading manufacturer and supplier of a wide
Range of automotive components

for various auto applications. LUMAX has been in to the Business of automotive components
for more than past three decades.

During this period marked by major technological innovations & up gradation, LUMAX has
acquired deep expertise and know- how

to manufacture world-class Auto components. Our main products are Brake Lining, Clutch
Facing, Brake Pads, Ceramic Disc Button, Rubber Brake Parts and much more.

Our company’s philosophy is of continuous modernization and up gradation of skills,


processes and machinery. With our sizeable

production capacity, advantage of low manufacturing cost and in – house tool making
capabilities, we are in a position to provide good quality product at very competitive prices.

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Stock Data: Recent Stock Performance:
Current Price (11/5/2010): 49.15 1 Week 4.1% 13 Weeks -1.7%
4 Weeks -3.5% 52 Weeks 32.7%
(Figures in Indian Rupees)

Lumax Automotive Systems Limited Key Data:

Ticker: 532537 Country: INDIA

Exchanges: BOM Major Industry: Automotive

Original Parts & Accessories


Sub Industry:
Mfrs.

994,033,473
2010 Sales Employees: N/A
(Year Ending Jan 2011).

Currency: Indian Rupees Market Cap: 363,911,810

Shares
Fiscal Yr Ends: March 7,404,106
Outstanding:

Closely Held
Share Type: Ordinary 5,441,014
Shares:

INFRASTRUCTURE FACILITIES

--------------------------

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Our diligent team of expert engineers evaluates, prioritizes and completes projects on
schedule that meet the vision of Sharic. They believe they have a responsibility to satisfy

customers and their ever-changing needs, providing them with the latest information

QUALITY

--------

LUMAX automotive believes in quality first ! anything else later. quality of product, Service
& Relationship. LUMAX shall give such products & services, at competitive prices,

and with the highest reliability & faith in all our dealings.

PRODUCTS RANGE

BRAKE LININGS

Asbestos Free

Free of any metal and poisonous

heavy metal such as lead

High and constant co-efficient of friction

Good fade recovery characteristics

Less wear

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Environment friendly

Comfort braking

CLUTCH FACINGS

Non Asbestos

High heat dissipation

Longer Life

100% pollution free & non hazardous material

Good fade characteristics

Sensitive, low wear and durable

Resistant to high temperature.

CODE OF CONDUCT FOR DIRECTORS AND SENIOR


MANAGEMENT

I. INTRODUCTION
This Code of Conduct is applicable to all Executive Directors of the Company (including
MD) and also its Senior Management personnel and all functional heads who are expected to

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comply with the letter and spirit of this Code in addition to the existing applicable laws &
regulations & relevant policies, rules and procedures of the Company.

The principal duty of the Board of Directors, along with management, is to ensure that the
Company is well managed and subserves the basic interests of its shareholders.

II. GUIDELINES FOR CONDUCT


Each director and Management personnel seek to use due care in the performance of his/her
duties, be loyal to the Company, act in good faith and in a manner such Director and
Management personnel reasonably believes to be not opposed to the best interests of the
Company. A Director and Management personnel should seek to also:-
• Make reasonable efforts to attend Board and committee meetings;
• dedicate time and attention to the Company;
• comply with all applicable laws, regulations, confidentiality obligations and corporate
policies of the Company.

III. BUSINESS OPPORTUNITIES


In carrying out their duties and responsibilities, Directors and Management personnels should
avoid:
• appropriating corporate business opportunities for themselves that are discovered through
the use of Company property or information or their position as Directors and Specified
employees;
• using Company property or information, or their position as Director and Specified
employees, for personal gain; and
• competing with the Company.

A Director / Management personnel, who wishes to avail of a corporate business opportunity,


should disclose such opportunity to the Company’s Board of Directors. If the Board of
Directors determines that the Company does not have an actual or expected interest in such
opportunity, then, and only then, may the Director and Management personnel avail of it,
provided that the Director and Management personnel has not wrongfully utilized the
Company's resources in order to acquire such opportunity.

IV. CONFLICTS OF INTEREST


Directors must avoid and promptly disclose to the Comply potential conflicts of interest

30
regarding any matters concerning the Company. A conflict of interest exists where the
interests or benefits of Directors conflict with the interests or benefits of the Company.

V. COMPANY PROPERTY
Directors and Management personnels should endeavor to ensure that management is causing
the Company’s assets, proprietary information and resources to be used by the Company and
its employees only for legitimate business purposes of the Company.

VI. CONFIDENTIAL INFORMATION


Director and Management personnel’s should maintain the confidentiality of information
entrusted to or gained by them in the course of carrying out their duties and responsibilities,
except where disclosure is approved by the Company or legally mandated or if such
information is in the public domain. Such confidential and proprietary information shall
never be disclosed or used for the personal gain or advantage of any Director and
Management personnel.

VII. FAIR DEALING


Director and Management personnel’s should endeavour to deal fairly, and should promote
fair dealing by the Company, its employees and agents, with customers, suppliers and
employees.

VIII. COMPLIANCE WITH LAWS AND REGULATIONS


Directors and Management personnel’s should comply, and endeavour to ensure that the
management is causing the Company to comply, with applicable laws, rules and regulations.
In addition, if any Director and Management personnel becomes aware of any information
that he or she believes constitutes evidence of a material violation of any securities or other
laws, rules or regulations applicable to the Company or the operation of its business, by the
Company, any employee or another Director and Management personnel, then such Director
and Management personnel should bring such information to the attention of the Board.

IX. INSIDER TRADING


Directors and Management Personnel should observe all applicable laws and regulations
including the Company policies and Code as applicable to them with respect to the purchase
and sale of the company’s securities. In addition, they should obstain from dealing in

31
Company’s shares, whether directly or indirectly, at least 15 days before the Board Meeting
Date approving Company’s Quarterly Results.

Any waiver of the amendments to the Company policies or Codes may be made only by the
Company’s Board of Directors and will be disclosed promptly as required by applicable laws
and regulations including the rules of any exchange on which the company’s securities are
listed or traded.

X. NON-COMPLIANCE
Suspected violations of this Code may be reported to the Board through Chairman of the
Board or the Chairman of the Audit Committee. All reported violations should be
appropriately investigated.

Any waiver of this Director and Management personnels’ Code must be approved by the
Board of Directors and publicly disclosed if required by any applicable law or regulation.

XI. EMPLOYEES
The Director and Management personnel should respect each and every employee of the
Company, treat each of them in a fair and equitable manner; respect their privacy and not to
share/disclose their personal information without their prior consent; maintain non-
discriminatory approach and refrain from harassing employees, making sexual advancements,
coercion, threat by virtue of his/her position with the Company.

XII. CUSTOMERS
The Director and Management personnel should ensure to provide products and services,
which meet the desired quality and safety standards and redress the Customer’s grievance
genuinely

XIII. SHAREHOLDERS
The Director and Specified employee should ensure to protect interest of the shareholders by
ensuring maintenance of accurate and complete records by avoiding false misleading or
artificial entries in the Books of accounts.

32
XIV. REPORTING
Company Secretary shall be the Compliance Officer for the purpose of this code. Directors
are required to report observed violations of the Code and illegal or unethical behaviour to
the Compliance Officer. All reports will be treated in a confidential manner and it is
Company’ policy to not allow retaliation for reports made in good faith of misconduct by
others. In accordance with an established, documented & approved process the Company will
undertake review & where appropriate, investigations of alleged violations or misconduct.
Directors are expected to cooperate in initial investigations of misconduct and violations of
this Code.

Competitors :

52-
Sales Market
Current Change P/E Week
Company (Rs.Milli Cap.
Price (%) Ratio High/Lo
on) (Rs.Million)
w

48095.2 5736.7 5914/33


Bosch -0.68 24.38 181367.90
8 0 81

42134.7
Exide Inds 133.90 -0.48 19.72 114367.50 142/73
0

Motherson 12949.4
166.45 0.39 36.01 64254.76 167/72
Sumi Sys 3

10524.5
Amtek Auto 191.55 -1.77 23.32 39474.44 239/107
7

Tube 23456.4
129.25 -1.52 29.88 24267.38 133/51
Investments 0

33
Wabco - TVS 4259.46 859.55 -2.58 21.30 16735.10 983/234

14634.0
Amara Raja 199.10 2.79 9.90 16543.19 199/107
2

Bosch
5311.69 595.95 0.00 16.19 12391.59 597/593
Chassis

Banco
2879.14 128.90 -1.53 11.91 9361.79 135/29
Products

Amtek India 7994.47 63.70 -0.86 11.67 8308.25 78/35

Federal-
Mogul 7599.70 139.95 -1.41 14.93 7896.98 182/47
Goetze

Auto.Axle 2672.39 495.80 0.53 18.39 7453.23 519/130

Sundaram-
4923.70 179.30 -2.45 56.69 6972.48 194/60
Clayton

Jamna Auto
5576.06 128.10 -0.58 29.66 4711.66 140/29
Inds.

Sona Koyo
8852.10 22.80 -3.18 21.62 4680.37 24/10
Steerg Sys

34
Gabriel India 6969.94 59.40 -3.10 18.31 4402.69 68/13

ZF Steering 2161.20 414.50 -3.48 10.90 3896.53 458/127

Shanthi
1213.87 45.30 -0.88 23.07 3734.41 56/32
Gears

Rico Auto
7279.10 26.95 -2.36 58.59 3556.40 33/17
Inds

12413.7
Wheels India 335.00 0.30 25.45 3296.39 370/151
6

Minda
4456.95 293.00 -1.61 13.68 3128.41 362/143
Industries

Subros 6944.16 50.55 2.02 10.72 2972.44 53/25

Pricol 7793.61 33.15 1.22 11.57 2947.50 33/10

Lumax
6341.54 312.15 0.27 49.10 2909.95 309/100
Industries

SteStrWhe 3173.14 212.75 0.45 19.86 2883.90 212/59

Denso India 5306.46 95.75 -0.26 14.17 2676.45 109/54

Munjal
8291.25 64.75 -2.26 10.77 2649.67 70/43
Showa

35
Halonix 3840.63 91.30 0.55 0.00 2544.15 109/61

Hind.Compo 773.08 455.00 1.35 0.52 2469.23 480/151

Suprajit Engg 1634.65 19.15 -2.05 10.76 2346.39 20/5

Setco
1633.44 255.20 2.20 12.37 2202.82 271/115
Automotive

Fiem Inds 2192.89 174.75 -0.23 19.51 2095.18 182/53

India Nipon
1279.20 256.45 0.45 10.35 2062.59 270/118
Electric

Ucal Fuel
3002.57 86.55 -3.35 30.81 1980.28 110/42
Sys.

Autoline Inds 2340.73 159.35 0.95 14.26 1926.55 165/68

Fairfield
1126.56 68.65 0.07 12.42 1874.19 78/25
Atlas

Automobile
2333.59 281.95 -3.16 0.00 1869.66 297/170
Corp

Hi-Tech
2947.76 194.85 -1.57 10.41 1857.56 205/52
Gears

36
Tudor India 1265.90 69.25 0.00 146.67 1704.71 69/69

Jay Bharat
6917.26 77.80 -0.83 7.32 1698.44 86/39
Maruti

LumAutTec 2270.27 134.55 2.16 22.61 1531.87 143/26

Rane Engine
2360.31 290.15 -1.64 31.70 1519.54 332/76
Valve

Rane Brake 2363.00 190.15 0.00 13.60 1371.93 194/168

Rane Madras 4196.56 132.45 -1.71 8.23 1369.62 140/38

Pren.Pipe 1274.51 99.00 1.54 10.05 1365.00 111/45

Shivam
1428.13 130.25 0.66 11.18 1294.00 138/53
Autotech

REIL
191.41 339.00 4.21 66.01 1279.73 339/210
Eleetricals

Munjal Auto
2351.13 126.60 -0.43 7.98 1271.50 132/54
Inds

Ceekay
1038.82 194.55 -4.98 0.00 1229.87 224/46
Daikin

Omax Autos 8120.76 56.70 -1.31 8.59 1228.75 71/30

37
Clutch Auto 1974.49 71.80 -1.24 14.45 1212.77 90/27

IST 190.43 202.00 2.02 65.35 1154.75 249/96

Perfect Circle
736.88 32.55 0.00 0.00 1085.11 0/0
India

Igarashi
2578.13 73.85 -4.95 39.52 1078.04 79/19
Motors

Enkei
3006.96 92.80 -4.33 7.96 1067.00 150/48
Castalloy

Auto.Stamp 4143.70 102.10 -1.35 14.59 1055.55 110/38

JMT Auto 1953.40 63.00 -5.69 27.23 961.60 78/31

IP Rings 678.55 135.35 1.31 16.91 940.83 135/37

Sund.Brake 1993.32 225.90 -3.38 16.51 919.90 285/137

Talbros Auto
2291.43 73.45 -0.74 15.06 913.58 79/33
Compo

Rane Brake
1810.23 114.95 0.88 9.04 901.91 129/60
Lining

38
Harita
1962.52 115.00 0.44 0.00 889.56 117/41
Seating Sys

Samkrg
991.29 88.00 3.83 11.71 832.29 86/44
Pistons

1100/28
Triton Valves 913.26 804.55 -1.69 16.85 810.24
3

ANG
1154.34 65.10 5.00 10.72 777.48 60/34
Industries

JBM Auto 2163.64 67.50 -1.82 8.51 701.17 82/31

Jay Ushin 2508.83 154.15 0.42 8.98 593.20 170/58

Bharat Seats 3360.63 18.00 0.00 13.64 565.20 27/10

Bharat Gears 2462.40 71.40 0.28 9.06 556.63 75/25

Hella India 139.75 166.00 -1.01 0.00 531.84 202/95

Machino
1234.44 82.00 -0.36 7.08 505.06 86/40
Plastics

Jai Parabolic
873.21 29.05 0.00 0.00 501.52 30/27
Sprg

Menon 438.88 52.40 -0.66 10.69 492.69 67/28

39
Bearings

Menon
1074.89 93.20 2.47 7.13 463.85 98/55
Pistons

PAE 2407.45 44.95 -4.26 9.40 446.95 57/21

Mah.Compo 459.97 90.35 -2.90 15.86 408.33 99/54

KAR Mobiles 833.90 156.40 -2.43 15.13 359.07 183/108

Autolite India 735.93 34.90 -2.38 61.47 338.06 45/21

LumAutSys 1000.45 41.65 -1.30 0.00 312.45 52/25

Bosch
3575.84 54.25 0.00 1.50 287.50 0/0
Rexroth (I)

GS Auto Intl. 926.52 32.70 -1.95 5.69 266.80 59/19

Hind Hardy
333.78 143.15 2.54 56.41 209.18 138/41
Spicer

Vybra
547.72 27.05 -2.52 0.00 197.83 31/10
Automet

KEW Inds. 532.19 12.12 -1.94 8.33 185.82 19/10

Raunaq Auto 577.89 22.40 0.00 7.11 177.67 28/11

40
Comp

Remsons
690.33 28.85 -0.52 9.87 164.83 32/15
Inds

Trident Tools 0.16 22.60 0.44 25.14 151.88 79/16

Delta
74.53 28.15 3.87 89.61 131.73 34/12
Magnets

FrontSpring 269.55 33.85 3.36 4.27 128.99 43/11

Guj.AutGe 144.35 341.00 3.27 8.74 115.57 386/167

Spectra
184.88 14.75 1.72 17.79 102.64 19/6
Industries

Gajra Bevel
230.61 6.91 19.97 3.32 54.15 9/4
Gears

Coventry
127.41 8.25 0.00 0.00 43.31 0/0
Spring

Coventry
323.91 8.82 -3.08 19.91 41.02 11/6
CoilOMatic

GG
Automotive 43.79 4.90 0.00 12.82 38.79 0/0
Gears

41
Jagan Lamps 106.32 5.35 -1.11 44.41 37.30 9/3

Brakes Auto 239.10 9.03 -2.59 37.04 36.30 15/4

Mipco
Seamless 0.00 0.92 0.00 0.00 3.30 0/0
Rings

Consumer behavior analysis represents one development within the behavior-analytic


tradition of interpreting complex behavior, in which a specific conceptual framework has
been proposed (i.e., the Behavioral Perspective Model). According to this model, consumer
behavior occurs at the intersection of a consumer-behavior setting and an individual's
learning history of consumption and is a function of utilitarian (mediated by the product) and
informational (mediated by other persons) consequences. The model has been useful in
analyses of consumers' brand choice and reactions to different settings. In the present paper,
the model was applied to the interpretation of environmental deleterious behaviors (use of
private transportation, consumption of domestic energy, waste disposal, and domestic
consumption of water). This application pointed to specific marketing strategies that should
be adopted to modify each of these operant classes.

Radical behaviorist interpretation of complex behavior-that which is not amenable directly to


an experimental analysis-has taken two forms. The first, which we may call "top-down," is
perhaps the more frequently encountered, and is the mainstay of Skinner's (1953)
interpretations of economic, political and religious life-among other areas of application. It
consists in suggesting surrogates of the elements of the three- or four-term contingency that
might comprise responses of the kind controlled in the laboratory and the stimuli that would
control them in such a closed setting. The behavior under interpretation, which typically
occurs in a much more open setting, is then described as though it was predictable and

42
controllable from a knowledge of the elements of the situation that have been labeled
establishing operations, discriminative stimuli, reinforcers and punishers.

This report will outline the most relevant behavioural characteristics of customers and
examine the ways they find, compare and evaluate product information. Comparison of the
newly collected survey data with the existing consumer behaviour theory resulted in detection
of a number of issues related to a specific consumer group. The purpose of this report is to
translate these findings into a set of implementation activities on strategic and technological
level. Execution of these recommendations will result in better conversion of visitors into
customers and encourage customer loyalty and referrals.

The focus group of this study will be young adults aged between eighteen and thirty-four
interested in buying a brake pads or a related product.

showed that there are product types, which are more likely to be sold such as Brake Linings,
Clutch Facings, Brake pads, Rubber brake parts. Reason for this is that when purchasing
these types of products, one does not require personal inspection and most, if not all features,
can be outlined in the product description and images. Most products in the automobile
family belong to this category.

Majority of young adults interviewed for purpose of this research tend to be active
information seekers. A high level of technological confidence within this group tends to be an
encouraging factor when it comes to product information research online.

The following analysis presents both, focus group results and behavioural theory in a parallel
fashion divided into two main research topics:

• Information Retrieval and Search Patterns


• Perception of Product Information Online

These two areas are mutually dependent and particularly important in a market where
consumers have the power to choose the right product from a number of competing suppliers.
Well-structured product information that cannot be found easily online is as much of a

43
problem as is having easily accessible information that does not meet the consumer's
expectations.

INFORMATION RETRIEVAL AND SEARCH PATTERNS

Combination of practical tests, survey statistics and one-on-one interviews conducted with a
group of volunteers, produced a first-hand insight into behavioural characteristic of the target
consumer group. During the survey, participants were asked to respond to a list of statements
with five levels of agreement and disagreement, each related to search habits, information
retrieval, perception of information presented online and the way it can influence their buying
decision. The interview was conducted on a conversational level as an opportunity for
participants to elaborate on their survey input.

PRACTICAL TEST: STAGE ONE – INITIAL SEARCH

Fifteen volunteers were shown an unknown brand of a Brake pads were only logo was
visible. Participants were then asked to find out more about this product.

The first search stage in most cases started with a major search engine (Google, Live, and
Yahoo) in its non-local version. Before clicking on a first satisfactory search result,
participants were inquired about the nature of their search, for example, how they searched
through results, what they were looking for and what grabbed their attention in the result they
were about to click on. As illustrated in Figure 2, participants mainly looked for the highest
percentage match in the search result titles (blue text) where word proximity in the phrase
played an important factor, following the search result description body (black text). Web
address (green text) was largely ignored.

User eye LUMAX in the search engine results.

Following is the search referral data for March 2007 that illustrates typical user searches that
bring visitors to the site:

44
1. Brake pads
2. Semi-Metallic Brake pads
3. Non-Asbestos Organic Brake pads
4. Low-Metallic NAO brake pads
5. Ceramic brake pads

PRACTICAL TEST: STAGE TWO – FINDING THE


PRODUCT

As the research narrows down, consumers tend to localise the results (Example: “Australian
Results Only”). Search phrases in this stage are likely to contain a brand name or a specific
feature. Survey results show that consumers are willing to ‘drill' down to the third page of the
results. Majority however would only look at the first page of the results (seventy-three
percent) while many will only look at the top half of the page.

Consumer search engine drill-down: How far are they willing to go?

A common assumption is that young adults tend to be more technologically minded than the
rest of the population.

45
An interesting fact is that around a third of the interviewed individuals knew very little or
nothing about certain aspects

of their research due to the nature of the product and rapid changes in technology. For
example, ninety per cent of participants could not explain the purpose of Brake linings,
which is becoming a standard feature in all new Brake system. For this reason, we must
consider extensive problem-solving behaviour (Andreasen, 1997). which consumers will be
going through in some stages of their product research. Extensive problem-solving behaviour
occurs when a consumer engages in a decision making process without established evaluation
criteria towards multiple product types, for example, comparing a large number of brands.
Without point of reference and way to compare their current findings with previous
experiences, consumers find product research activity to be a rather involved activity.

This appeared to be the most sensitive part of the research and most participants required a
high level of concentration in order to gain a satisfactory level of information. Participants
were slow to respond to questions and appeared to be lightly irritable when being interrupted.

Consumer research (Raymond, 2003) showed that brands, which interrupted an intellectually
engaging task, received an instant dislike. Further research into task interruption online (Moe,
2006) discusses a possibility of positive effects of various forms of interstitial promotions,
such as pop-up ads, pop-under ads, bridging pages, and in-page animations, depending on the
industry and placement context. The fact that this type of advertising is still commonly used
across the Internet indicates that there are potential benefits of this method (analogous to
spam industry) otherwise; it would have been abandoned by publishers and advertisers.

A task interruption test had to be conducted in order to determine whether this possibility
applies to the selected consumer group.

Five participants were asked to find out more information about a specific Brake linings
online (Brake lining with non-asbestos material). Their browser's home page was purposely
set to an online portal that contained a single popup and colourful animated ads (ring tones,
emoticons, computer wallpapers and screen savers). All participants have closed the pop-up
ad and spent an average of twelve seconds looking at the portal before visiting their favourite
search engine.

46
Incredibly, none of the participants remembered the model of the phone while one could not
even recall the brand. Consumers tend to rely on short-term memory while accessing various
resources across the Internet. Remembering everything does not seem to be practical in the
initial stages of the search due to the amount of potentially visited resources. Interruptions
caused by interstitial promotions could therefore permanently disrupt the research and
displease the consumer.

PERCEPTION OF PRODUCT INFORMATION ONLINE

How consumers see and understand product information online

When buying products and services online, consumers are facing two fundamental
differences: removal of physical presence and (as a compensation) abundance and versatility
of product information (Kurnia & Schubert, 2006). In other words, a physical product has
been replaced by product information.

PRACTICAL TEST: STAGE THREE

The third stage in the product research involves product information collection, pricing and
feature/benefit evaluation. Search engines at this stage do not necessarily represent the main
resource any more. Survey participants were at this stage just as likely to visit product
reviews or news websites, seeking human advice and consumer reviews.

47
Search behaviour and response to online advertising

Due to rapid growth in technology, information collection and organising is has become a
rather feasible activity and more consumers are turning towards their own research “pulling”
the information than information being “pushed” to them as that would be the case in most
forms of non-interactive media.

According to study on Australian consumers (Lindstrom, 2001) one of the main emerging
characteristics of online users is the growing lack of patience . Lack of patience is especially
prominent when a consumer engages in product research, feature and price comparison. This
has been tested with a focus group and the survey results confirm that this is still the case. A
majority of interviewed individuals stated that they are willing to wait only up to five seconds
for a page to load.

48
Online consumers are time conscious and are often willing to gamble with their money rather
than time as it is impossible to recover lost time, where a moderate financial loss can be
compensated (Koiso-Kanttila, 2005). Consumers will appreciate businesses, which value for
customer's time by employing technology, tools, information and customer service.

Focus group interview findings on the product information appear to be contradictory.


Consumers are not willing to read extensive amounts of data. They prefer to ‘scan' through
volumes of information very briefly while looking for key benefits . For this, they require
moderate amounts of summarised information. At the other hand, consumers are also not
likely to buy anything online unless complete product information is available. Having to
inquire about a certain product due to lack of information available on the website delays the
transaction, however most participants were willing to wait extra time for a human response
to an online inquiry

How long are consumers willing to wait for a reply to an online inquiry?

Zingale and Arndt (2001) discuss the importance of private time. A sales person can interrupt
a customer in a physical store while they are engaged in their initial research. This is
particularly harmful if occurring prior to the stage when the customer is ready to buy or even
ask any meaningful questions. Removing consumers from their ‘safety zone' can delay or
cancel the purchase.

Online stores have an obvious advantage in this case. The absence of the sales person allows
website visitors to research products in their own time and pace, with no external pressure or

49
time restrictions. After receiving a satisfactory level of information, consumers either make a
further inquiry or complete their purchase.

Consumer opinions towards place of purchase – Part 1

A website can traditionally be seen as a place of purchase, however, for consumers it is also a
store, a brochure and a sales person, and is expected to serve quickly and perform well.
Survey results show that the quality of presentation and information breakdown can affect
consumer attitude towards the product and buying confidence. For example, basic quality
standards are necessary in order to create consumer trust (speed and structural integrity).
Second most prominent factor seems to be simplicity of the checkout process. Majority of
participants have stated that they prefer not to fill out long registration forms.

Survey participants responded best to the product information available on the actual product
description page.

As visible from the , consumers favour almost all timesaving tools such as:

• Pop-up descriptions
• Photo galleries
• Product summaries before full product information

50
• Product comparison

An interesting observation is that most interviewed consumers considered automated product


suggestions either irrelevant or unnecessary, therefore most would not follow such leads An
example of this would be Amazon's “Customers who bought this item also bought the
following…” and eBay's “Related products” section. Instead, members of this consumer
group choose to do their own independent research, compare their own findings and read
other people's reviews and recommendations. In addition, very few consumers were willing
to read FAQ, as they tend to appear too generic and broad, therefore requiring extra effort to
find the required piece of information.

Consumer opinions towards place of purchase – Part 2

SUMMARY OF FINDINGS

IMPLICATIONS WITH PROMOTION:

51
1. Consumers use search engines on both global and local level
2. Result pages are scanned for context corresponding to a supplied search term
3. Pace of search decreases in proportion to the depth of the research
4. Intrusive advertising campaigns can create negative image

PLACE OF PURCHASE AND PRODUCT INFORMATION:

1. Amount of information online directly affects consumer search behaviour


2. Online consumers value integrated timesaving features
3. Information breakdown is required to prevent information overload
4. Consumers value human reviews more than automated recommendations

RECOMMENDATIONS

SEARCH ENGINE PROMOTION

Based on the analysis of consumer search behaviour, it is evident that the typical consumer is
likely to ‘scan' rather than read search result pages. In order to maximise on potential traffic it
is necessary to enhance search result page positioning and increase visibility of search terms
in result page titles. This can be achieved by search engine optimisation. A Pay-Per-Click
campaign can be used as an alternative for more immediate results.

STATIC ADS

The focus consumer group did not respond well to aggressive advertising methods. Although
not recommended, this type of advertising could be implemented in a subtle contextual
advertising campaign. Ad placement could, for example, compliment the website content and
be accessible on consumer demand. Article link ads (see example left), for example, would
outperform banners or pop-up ads.

52
PRODUCT INFORMATION

Main consideration when it comes to product information is segmentation and lack of


physical presence. As discussed in the behaviour analysis, consumers prefer to read and
compare short summaries before choosing to read the full description. Quality and amount of
product information will compensate for the lack of physical presence, while implementation
of timesaving mechanisms and human-based recommendations would encourage product
research and purchase.

ADDITIONAL FINDINGS

Online pricing strategy may strongly affect consumers in a number of ways. Part of the
research paper on consumption decisions and personal rules (Amir, Lobel & Ariely, 2005)
focuses on pricing consistency impact in online environment. An example used in this paper
was Amazon.com and the consumer outrage caused by price inflation for the frequent buyers
in order to generate extra profits from the most loyal customers.

How much are consumers willing to spend on a single purchase

This example also implies the importance of online and offline price synchronisation. As
illustrated in , consumers expect online prices to be lower or equal to those in the physical
stores. Increase in choice contributes to a more active research process and more prominent
selective criteria (Bellman, Johnson, Lohse & Mandel, 2006). Failing to satisfy their

53
expectations can reduce their interest in the product and direct their research toward better-
priced product with similar or matching features.

Expectations from online pricing and payment options.

Privacy and security.

54
Physical proof.

Market analysis requires an understanding of the 4-Cs which are consumer,


conditions, competitor and the company. A study is undertaken to provide superior
customer value, which is the main objective of the company. For providing better
customer value we should learn the needs of the consumer, the offering of the
company, vis-a-vis its competitors and the environment which is economic, physical,
technological, etc.
A consumer is anyone who engages himself in physical activities, of evaluating,
acquiring, using or disposing of goods and services.
A customer is one who actually purchases a product or service from a particular
organisation or a shop. A customer is always defined in terms of a specific product or
company.
However, the term consumer is a broader term which emphasises not only the
actual buyer or customer, but also its users, i.e. consumers. Sometimes a product is
purchased by the head of the family and used by the whole family, i.e. a refrigerator
or a car. There are some consumer behaviour roles which are played by different
members of the family.
Role Description
Initiator The person who determines that some need or want is to be met (e.g.
a daughter indicating the need for a colour TV).

55
Influencer The person or persons who intentionally or unintentionally influence
the decision to buy or endorse the view of the initiator.
Buyer The person who actually makes a purchase.
User The person or persons who actually use or consume the product.
All the consumer behaviour roles are to be kept in mind but, the emphasis is on
the buyer whose role is overt and visible.

(a) The Consumer


To understand the consumer; researches are made. Sometimes motivational research
becomes handy to bring out hidden attitudes, uncover emotions and feelings. Many
firms send questionnaires to customers to ask about their satisfaction, future needs
and ideas for a new product. On the basis of the answers received, changes in the
marketing mix is made and advertising is also streamlined.

(b) The External Analysis (Company)


The external analysis may be done by the feedbacks from the industry analyst and
by marketing researches. The internal analysis is made by the firm.s financial
conditions, the quantum of the sales, force and other factors within the company.
The study of these factors leads to a better understanding of the consumer and
his needs.

(c) The Competition


In the analysis of the market, a study of the strengths and weaknesses of the
competitors, their strategies, their anticipated moves and their reaction to the
companies. moves and plans is to be made. The company after getting this
information, reacts accordingly and changes its marketing mix and the offering is
made in a manner which can out do the competitor. This is a very difficult process
and it is easier said than done. To have correct information about the competitors
and to anticipate their further moves is the job of the researcher.
(d) The Conditions
The conditions under which the firms are operating has also to be seriously
considered. The factors to be studied are the economy, the physical environment, the
government regulations, the technological developments, etc. These effect the
consumer needs, i.e. the deterioration of the environment and its pollution may lead

56
to the use and innovation of safer products. People are health conscious and are
concerned with their safety. Hence, in this case, safer products have a better chance
with the consumer. In case of recession, the flow of money is restricted greatly. This
leads to the formulation of different marketing strategies.

(e) Market Segmentation


The market is divided into segments which are a portion of a larger market whose
needs are similar and, they are homogeneous in themselves. Such segments are
identified with similar needs.

(f) Need Set


By need set, it is meant that there are products which satisfy more than one need.
An automobile can fill the transportation needs, status need, fun needs or time
saving needs. So the company tries to identify the need sets which its product can
fulfil. Then we try to identify the groups who have similar needs, i.e. some people
need economical cars, others may go for luxury cars.

(g) Demographic and Psychographic Characteristics


These groups are identified and they are described in terms of their demographic
and psychographic characteristics. The company finds out how and when the product
is purchased and consumed.

(h) Target Segment


After all the above preliminary work is done, the target customer group known as
the target segment is chosen, keeping in mind how the company can provide superior
customer value at a profit. The segment which can best be served with the
company.s capabilities at a profit is chosen. It has to be kept in mind that different
target segments require different marketing strategies and, with the change in the
environmental conditions the market mix has to be adjusted accordingly.

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ANALYSIS OF CONSUMER BEHAVIOUR IN REGARD TO

AUTOMOBILE PRODUCTS

Consumer behaviour in respect of AUTOMOBILE PRODUCTS(brake pads, non asbestos,


asbestos brake linings, clutches) was studied during 2007 using
different socio-economic variables assessed by so-called evaluation criteria 1-5. The
objective of study was to possibly identify effect of different variables on consumer
decision upon purchase of automobile products. Automobile products were perceived
differently at
various types of purchasing places. The most important socio-economic variables
explaining individual differences in consumer behaviours regarding purchase of involved
were: trust, gender of consumer, quality, origin, and price of
product. Conclusions derived from the analysis can be used as useful barometer for
market orientation. The outcomes suggest that assessment of consumer behaviour
through evaluation criteria can contribute to a better understanding of consumer
behaviour in respect of different automobile products. With specific extension of market
indicators the evaluation method used in this study may be relevant to analyze
perception of consumer behaviour in regards to automobile chain and other automotive
products
in future.
The automobile sector is most favourable sector in india contributing about 10
percent to total GDP, directly providing employment and improving rural
family income. There are a lot of national and international organizations
which have supported this sector in india like Indian Government, india
Cluster Business support, Indian Association of Automobile
Producers.
During recent years producers and processors automobile associations were
established which now-a-days are playing important role in this sector. Effects
were constructed on market and marketing research, incorporation of private
contractors and suppliers and promoting public and private dialogue.
Although there are visible improvements, yet a special emphasize needs to

58
be given to whole automobile manufacturers chain as main component in automobile sector
e.g. providing awards for best quality products, automobile quality management at
processing unit, improving automobile products quality, introducing new and better
quality automotive products studying factors affecting automobiles and automotive products
and consumer(s) behaviour.

Now, the automobile sector could be determined as an industry consisting of two


sectors: and commercial
manufacturers who produce solely for market . (3). Last
year history in India is characterized with transition process of centralized
economy to oriented open and free market approach. Many economies of
developing countries do not pay attention and undervalue the consumer
behaviours.
About consumer behaviours on automobile products, different studies (8,9) show
existence of significant differences between consumer behaviours in different
countries.

MATERIALS AND METHODS


This survey was carried out by the Department of automobile
. Interviews of
304 respondents were conducted in super-markets (677) and mini-markets
(397) and later 23 interviews were completed in green market mainly for
Automobile products.
All interviews were completed in North region incorporating three
supermarkets, 10 mini-markets and one green market. All consumers buying
Automotive products during period of survey without any pre-selection criteria were
part of study..
Structure of consumer’s age is presented

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The information from interview was collected and inserted directly in
questionnaire which contains qualitative and quantitative questions. The
questionnaire comprised information according to what consumer was buying
and their perceptions towards supply of these products. To assess overall
impact questionnaire was also comprised different socio-economic variables
like sex of consumer (female, male or both), age of consumer (> 20 years old,
20 - 40 years old, 40 - 60 years old and > 60 years), family size, origin of
product (local or imported) and producer name.
To study the reasons for choosing automobile products upon supply, a coding
approach from 1- 5 was used (1 = very important; 2 = highly important; 3 =
average; 4 = less important; 5 = not important). Perception of consumers
about automobile products was assessed using different variables i.e. habits, trust,
price, quality, package, age of consumer, origin of product, type of shop,
brand and gender of consumer.
Due to lack of consumers experience for interviews, poor quality interviews in
some cases and incomplete records were removed from final analysis. JMPstarter
business unit program of SAS (Institute SAS Inc. 2004) was used to

60
analyse the results. An analysis of variances was performed to assess level
of significance for effects of different variables on perception of consumer
about automobile products. Contingency analyses were used to analyze indicator’s
perception of consumers about automobile products using criteria of importance 1-5.

RESULTS AND DISCUSSION

The results showed a strong effect on perception of consumer


behaviours upon purchasing automobile products by socio-economic variables as

Level of significances for effects of different variables on perception of


consumers about automobile products.

Indicator Prob > F


Trust < 0.0001
Quality < 0.001
Habits < 0.0717
Price < 0.0500
Packaging < 0.6973 (NS*)
Type of shop < 0.0939 (NS*)
Brand < 0.1969 (NS*)
Gender of < 0.0420
consumer
Age of > 0.1988 (NS*)
consumer
Origin of < 0.0048
product
NS = Nosignificance for level P > 0.05.

trust, quality of products (P < 0.0001). Significant effects during supply of


automobile products were also marked from variables like product origin, price, and
gender of consumer i.e. P < 0.0048, P < 0.050, and P < 0.0420, respectively.
Although numerical differences were observed while analyzing effect of
independent variables like packaging, age of consumer, brand, type of shop,
and producer name, yet no significant variation upon purchase of automotive

61
products was noted for these variables.
Automotive products of local origin seem to be more attractive for male consumer’s
(about 63%) or when both genders (about 85%) purchase automobile products
together as compared to the imported one. Tendency of female
consumers to origin of automobile product was observed to be equal.

Most of consumers considered market variable a very important factor and


put it at consumer perception criteria 1 and 2 (about 89%), showing high
effect of product quality on consumers’ decision for purchase of automobile food.
More than 50 percent attribute their perception to automobile product evaluation
criteria 1 to 3, which means consumers do assess quality and express
trustiness about different automobile products prior to purchase of automobile food
The results about packaging of automobile products and perception of
consumers’ behaviour are surprisingly indicate that consumers do not see it
as important factor and thus consider packaging of products at evaluation
criteria 5. Regarding price effect it was revealed that consumers
placed price of automobile product at evaluation criteria 1, 2 and 3. considering
price as very important to average in case of white cheese and yoghurt.
However, majority of consumers do not consider it as important factor also for
other products. Analyses of consumer age effect and their estimation upon
purchase of automobile products clearly indicate that majority of automobile
products included in this study were purchased by group of consumers
between 20 – 39 and 40 – 60 years old, respectively (about 84.60 %), while
consumers below 20 years age prefer more to buy yoghurt and fruit yoghurt.
Consumers above age 60 years, tend to frequent less market places
purchasing only about 5.29 percent of automobile products

Diffusion of Innovation

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Products tend to go through a life cycle. Initially, a product is introduced. Since the product is
not well known and is usually expensive, sales are usually limited. Eventually, however,
many products reach a growth phase—sales 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 others—they 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 ü 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.

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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 market—noone 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 segment—e.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. The saturation point is the
maximum proportion of consumers likely to adopt a product.

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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 adoption.

The case of credit cards was a bit more complicated and involved a “chicken-and-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.

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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 Wasn’t 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 continuous innovation involves some change in technology,

66
although the product is used much the same way that its predecessors were used—e.g., jet vs.
propeller aircraft. A discontinous innovation involves a product that fundamentally changes
the way that things are done—e.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 is
trialable (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 speed—many 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 don’t 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 spread—people 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.

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• 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 resistance.

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 don’t end up using them much.

Attitudes

Introduction. Consumer attitudes are a composite of a consumer’s (1) beliefs about, (2)
feelings about, (3) and behavioral intentions toward some object--within the context of
marketing, usually a brand or retail store. These components are viewed together since they
are highly interdependent and together represent forces that influence how the consumer will
react to the object.

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Beliefs. The first component is beliefs. A consumer may hold both positive beliefs toward
an object (e.g., coffee tastes good) as well as negative beliefs (e.g., coffee is easily spilled and
stains papers). In addition, some beliefs may be neutral (coffee is black), and some may be
differ in valance depending on the person or the situation (e.g., coffee is hot and stimulates--
good on a cold morning, but not good on a hot summer evening when one wants to sleep).
Note also that the beliefs that consumers hold need not be accurate (e.g., that pork contains
little fat), and some beliefs may, upon closer examination, be contradictory (e.g., that a
historical figure was a good person but also owned slaves).

Since a consumer holds many beliefs, it may often be difficult to get down to a “bottom line”
overall belief about whether an object such as McDonald’s is overall good or bad. The
Multiattribute (also sometimes known as the Fishbein) Model attempts to summarize overall
attitudes into one score using the equation:

That is, for each belief, we take the weight or importance (Wi) of that belief and multiply it
with its evaluation (Xib). For example, a consumer believes that the taste of a beverage is
moderately important, or a 4 on a scale from 1 to 7. He or she believes that coffee tastes very
good, or a 6 on a scale from 1 to 7. Thus, the product here is 4(6)=24. On the other hand, he
or she believes that the potential of a drink to stain is extremely important (7), and coffee
fares moderately badly, at a score -4, on this attribute (since this is a negative belief, we now
take negative numbers from -1 to -7, with -7 being worst). Thus, we now have 7(-4)=-28.
Had these two beliefs been the only beliefs the consumer held, his or her total, or aggregated,
attitude would have been 24+(-28)=-4. In practice, of course, consumers tend to have many
more beliefs that must each be added to obtain an accurate measurement.

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Affect. Consumers also hold certain feelings toward brands or other objects. Sometimes
these feelings are based on the beliefs (e.g., a person feels nauseated when thinking about a
hamburger because of the tremendous amount of fat it contains), but there may also be
feelings which are relatively independent of beliefs. For example, an extreme
environmentalist may believe that cutting down trees is morally wrong, but may have positive
affect toward Christmas trees because he or she unconsciously associates these trees with the
experience that he or she had at Christmas as a child.

Behavioral Intention. The behavioral intention is what the consumer plans to do with respect
to the object (e.g., buy or not buy the brand). As with affect, this is sometimes a logical
consequence of beliefs (or affect), but may sometimes reflect other circumstances--e.g.,
although a consumer does not really like a restaurant, he or she will go there because it is a
hangout for his or her friends.

Attitude-Behavior Consistency. Consumers often do not behave consistently with their


attitudes for several reasons:

• Ability. He or she may be unable to do so. Although junior high school student likes
pick-up trucks and would like to buy one, she may lack a driver’s license.

• Competing demands for resources. Although the above student would like to buy a
pickup truck on her sixteenth birthday, she would rather have a computer, and has
money for only one of the two.

• Social influence. A student thinks that smoking is really cool, but since his friends
think it’s disgusting, he does not smoke.

• Measurement problems. Measuring attitudes is difficult. In many situations,


consumers do not consciously set out to enumerate how positively or negatively they
feel about mopeds, and when a market researcher asks them about their beliefs about
mopeds, how important these beliefs are, and their evaluation of the performance of
mopeds with respect to these beliefs, consumers often do not give very reliable

70
answers. Thus, the consumers may act consistently with their true attitudes, which
were never uncovered because an erroneous measurement was made.

Attitude Change Strategies. Changing attitudes is generally very difficult, particularly when
consumers suspect that the marketer has a self-serving agenda in bringing about this change
(e.g., to get the consumer to buy more or to switch brands).

Changing affect. One approach is to try to change affect, which may or may not involve
getting consumers to change their beliefs. One strategy uses the approach of classical
conditioning try to “pair” the product with a liked stimulus. For example, we “pair” a car
with a beautiful woman. Alternatively, we can try to get people to like the advertisement and
hope that this liking will “spill over” into the purchase of a product. For example, the
Pillsbury Doughboy does not really emphasize the conveyance of much information to the
consumer; instead, it attempts to create a warm, fuzzy image. Although Energizer Bunny ads
try to get people to believe that their batteries last longer, the main emphasis is on the likeable
bunny. Finally, products which are better known, through the mere exposure effect, tend to
be better liked--that is, the more a product is advertised and seen in stores, the more it will
generally be liked, even if consumers to do not develop any specific beliefs about the
product.

Changing behavior. People like to believe that their behavior is rational; thus, once they use
our products, chances are that they will continue unless someone is able to get them to
switch. One way to get people to switch to our brand is to use temporary price discounts and
coupons; however, when consumers buy a product on deal, they may justify the purchase
based on that deal (i.e., the low price) and may then switch to other brands on deal later. A
better way to get people to switch to our brand is to at least temporarily obtain better shelf
space so that the product is more convenient. Consumers are less likely to use this
availability as a rationale for their purchase and may continue to buy the product even when
the product is less conveniently located. (Notice, by the way, that this represents a case of
shaping).

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Changing beliefs. Although attempting to change beliefs is the obvious way to attempt
attitude change, particularly when consumers hold unfavorable or inaccurate ones, this is
often difficult to achieve because consumers tend to resist. Several approaches to belief
change exist:

• Change currently held beliefs. It is generally very difficult to attempt to change


beliefs that people hold, particularly those that are strongly held, even if they are
inaccurate. For example, the petroleum industry advertised for a long time that its
profits were lower than were commonly believed, and provided extensive factual
evidence in its advertising to support this reality. Consumers were suspicious and
rejected this information, however.

• Change the importance of beliefs. Although the sugar manufacturers would


undoubtedly like to decrease the importance of healthy teeth, it is usually not feasible
to make beliefs less important--consumers are likely to reason, why, then, would you
bother bringing them up in the first place? However, it may be possible to strengthen
beliefs that favor us--e.g., a vitamin supplement manufacturer may advertise that it is
extremely important for women to replace iron lost through menstruation. Most
consumers already agree with this, but the belief can be made stronger.

• Add beliefs. Consumers are less likely to resist the addition of beliefs so long as they
do not conflict with existing beliefs. Thus, the beef industry has added beliefs that
beef (1) is convenient and (2) can be used to make a number of creative dishes.
Vitamin manufacturers attempt to add the belief that stress causes vitamin depletion,
which sounds quite plausible to most people.

• Change ideal. It usually difficult, and very risky, to attempt to change ideals, and
only few firms succeed. For example, Hard Candy may have attempted to change the
ideal away from traditional beauty toward more unique self expression.

One-sided vs. two-sided appeals. Attitude research has shown that consumers often tend to
react more favorably to advertisements which either (1) admit something negative about the
sponsoring brand (e.g., the Volvo is a clumsy car, but very safe) or (2) admits something
positive about a competing brand (e.g., a competing supermarket has slightly lower prices,

72
but offers less service and selection). Two-sided appeals must, contain overriding arguments
why the sponsoring brand is ultimately superior--that is, in the above examples, the “but” part
must be emphasized.

The Elaboration Likelihood Model (ELM) and Celebrity Endorsements. The ELM suggests
that consumers will scrutinize claims more in important situations than in unimportant ones.
For example, we found that in the study of people trying to get ahead of others in a line to use
photo copiers, the compliance rate was about fifty percent when people just asked to get
ahead. However, when the justification “... because I have to make copies” was added,
compliance increased to 80%. Since the reason offered really did not add substantive
information, we conclude that it was not extensively analyzed--in the jargon of the theory,
“elaboration” was low.

The ELM suggests that for “unimportant” products, elaboration will be low, and thus Bill
Cosby is able to endorse Coke and Jell-O without having any special credentials to do so.
However, for products which are either expensive or important for some other reason (e.g., a
pain reliever given to a child that could be harmed by using dangerous substances),
elaboration is likely to be more extensive, and the endorser is expected to be “congruent,” or
compatible, with the product. For example, a basket ball player is likely to be effective in
endorsing athletic shoes, but not in endorsing automobiles. On the other hand, a nationally

73
syndicated auto columnist would be successful in endorsing cars, but not athletic shoes. All
of them, however, could endorse fast food restaurants effectively.

Appeal Approaches. Several approaches to appeal may be used. The use of affect to induce
empathy with advertising characters may increase attraction to a product, but may backfire if
consumers believe that people’s feelings are being exploited. Fear appeals appear to work
only if (1) an optimal level of fear is evoked--not so much that people tune it out, but enough
to scare people into action and (2) a way to avoid the feared stimulus is explicitly indicated--
e.g., gingivitis and tooth loss can be avoided by using this mouth wash. Humor appears to be
effective in gaining attention, but does not appear to increase persuasion in practice. In
addition, a more favourable attitude toward the advertisement may be created by humorous
advertising, which may in turn result in increased sales. Comparative advertising, which is
illegal in many countries, often increases sales for the sponsoring brand, but may backfire in
certain cultures.

CONCLUSION

The MARKETING performance of the corporation continued to shows an upward


trend. From the whole report we find that the company is financially sound as well as has a
good working in MARKETING. It has diversified utility with multiple businesses. It works
as a leading corporate citizen with a key focus on executing its social responsibility. In short
it can be said that the organization is using a very enhanced version technology to undertake
various function and also adopt best practices.

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RECOMMENDATIONS & SUGGESTIONS

 Company should have more experienced and energetic MARKETING executives


to enhance their working in the marketing department.

 Company should try to improve its infrastructure to enhance the quality and
work.

 Company should provide proper training facilities to their employees.

 Company should try to improve the existing marketing channel, visit to the dealers
to create healthy relation and hearing of complaints. Atleast monthly visit of sales
executive should be in the market to create and maintain healthy relations.

 Company should try to get more and more young employees to work as new blood
would provide good competitive work force as well as enhance the performance .

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BIBLOGRAPHY

 LUMAX AUTOMOTIVE ANNUAL REPORT

 WWW.LUMAXAUTO.COM

 WWW.WIKIPEDIA.COM

 WWW.GOOGLE.COM

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QUESTIONNAIRE

Employee Name_______________________
Dept_______________ No.____________

Q1. How would you define your work?

______________________________

______________________________

Q2. What would you describe as the most challenging thing in your job?

______________________________

Q3. What is the most enjoyable part of your work?

______________________________

Q4. How would you rate your team working skills?

?Excellent ?Average ?Below average

Q5. How do you handle pressure at work?

______________________________

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Q6. Is there anything that you think the management of the organization
can do to help you handle work-related stress better?

78