TERM PAPER OF CONSUMER BEHAVIOUR TOPIC – FACTORS AFFECTING CONSUMER DURABLE BRAND CHOICES

SUBMITTED TO – Mr.AMIT DATT SUBMITTED BY – BHANU PARTAP REGISTRATION ID – 10908208 SECTION - RT1903 ROLL NO. – B73

ACKNOWLEDGEMENT In preparation of this Term Paper by me, I feel great pleasure because it gives me extensive practical knowledge in my career. I get idea an about the “factors affecting consumer durable brand choices” by this Term Paper. It is not possible to prepare a project Term Paper without the assistance & encouragement of other people. This one is certainly no exception. On the very outset of this Term Paper, I would like to extend my sincere & heartfelt obligation towards all the personages. I would like to give my deep sincere regard to those who helped me in the successful completion of the task and preparation of the Term Paper. I am thankful to Mr.Amit Datt (Faculty Guide) for valuable inspiration and guidance provided me throughout the course of this term paper. They have patient and critically gone the subject matter. I would also thank all distributor & all shopkeeper for their continues support.

DURABLE GOODS –

In economics, a durable good or a hard good is a good that does not quickly wear out, or more specifically, one that yields utility over time rather than being completely consumed in one use. Items like bricks or jewelery could be considered perfectly durable goods, because they should theoretically never wear out. Highly durable goods such as refrigerators, cars, or mobile phones usually continue to be useful for three or more years of use[1], so durable goods are typically characterized by long periods between successive purchases. Examples of consumer durable goods include cars, household goods (home appliances, consumer electronics, furniture, etc.), sports equipment, and toys.

OBJECTIVE OF THE STUDY My main objective is only to justify the preferences of students for the brand equity of durable brands plus the allocation of resources leading to the result for proper brand utilization. SCOPE OF STUDYING THE TOPIC DURABLE GOODS IN INDIA –

OPINION LEADERSHIP Opinion leadership is a concept that arises out of the theory of two-step flow of communication propounded by Paul Lazarsfeld and Elihu Katz. This theory is one of several models that try to explain the diffusion of innovations, ideas, or commercial products. The opinion leader is the agent who is an active media user and who interprets the meaning of media messages or content for lower-end media users. Typically the opinion leader is held in high esteem by those that accept his or her opinions. Opinion leadership tends to be subject specific, that is, a person that is an opinion leader in one field may be a follower in another field. An example of an opinion leader in the field of computer technology, might be a neighborhood computer service technician. The technician has access to far more information on this topic than the average consumer and has the requisite background to understand the information, though the same person might be a follower at another field (for example sports) and ask others for advice. WORD - OF - MOUTH COMMUNICATION RESEARCH METHODOLOGY INTRODUCTION TO RESEARCH METHODOLOGY Research refers to a search for knowledge. One can also define research as a scientific and systematic search for pertinent information on a specific topic. According to Clifford Woody research comprises defining and redefining problems, formulating hypothesis or suggested solutions; collecting, organizing and evaluating data; making deductions and reaching conclusions; and at last carefully testing the conclusions to determine whether they fit the formulating hypothesis. THE STUDY. The study method is discriptive in nature with survey method being used to compute the study because here I am going to explore different variable which effect the consumer buying behavior of durable goods. SAMPLING DESIGN POPULATION. constraints. Population will be students of lovely professional university because of time and cost

SAMPLING ELEMENTS. All lovely professional students will be respondent will be the sampling elements.

SAMPLING TECHNIQUE . Judgment sampling technique will be used because of time and money constraints .Moreover whole of the population might not be user of durble goods so to remove biasness the judgment sampling technique will be used. SAMPLING SIZE. Sampling size will be 50 respondents. This facilitated the process of obtaining answers from a variety of individuals, who will provide a wide range of answers. Thus the questionnaires provide an unbiased variety of answers which in turn helped in reaching a definite conclusion. TOOLS FOR DATA COLLECTION of underlying factor. Self designed unstructured questionnaires data will be used for identification

QUALITATIVE AND QUANTITATIVE RESEARCH AND DATA GATHERING Primary data will be collected by means of preparing a questionnaire and getting it filled by a large sample space. These questionnaires will help in drawing conclusions about the case. Secondary data will be gathered from the books, internet sites, articles and journals on advertisement. Any new information that could be a source of good learning will be given prime importance.In social sciences and later in other disciplines, the following two research methods can be applied, depending on the properties of the subject matter and on the objective of the research: Qualitative research (understanding of human behavior and the reasons that govern such behavior)  Quantitative research (systematic empirical investigation of quantitative properties and phenomena and their relationships) Research is often conducted using the hourglass model Structure of Research[1]. The hourglass model starts with a broad spectrum for research, focusing in on the required information through the methodology of the project (like the neck of the hourglass), then expands the research in the form of discussion and results.

DATA COLLECTION PRIMARY DATA- For taking over my research, I take the help of self constructed questionnaire and utilized the perception of LPU students towards the variants of durable brands. SECONDARY DATA- Other resources of collecting the data are the old Journals,internet websites and the blogs of my various friends and relatives.

HYPOTHESIS NULL HYPOTHESIS H0: All the factors are equally important. ALTERNATE HYPOTHESIS H1:All the factors are not equally important

One more thing can be assumed,if possible there Is no basic reason for the students to preserve Their physcological needs in form of Fast food.

On the other hand, students likes the variants of Fast food and are crazy about the taste of junk food. THEY ARE Adapting fast foods as their physcological needs.

REVIEW OF LITERATURE Two of the seminal studies in (Boush, et al. 1987; Aaker and Keller 1990), researchers have investigated several antecedents and consequences. Many studies have taken place in the research arena and it is growing larger - to understand the different vagaries of brand extensions. The broad areas on brand extensions research on product market characteristics conducive for brand extensions are how the consumers evaluate the brand extensions, and impact of brand extensions on the parent brand. Since the two seminal studies on brand extensions (Boush, et al.1987; Aaker & Keller 1990), many studies have been undertaken to study the different dimensions of brand extensions. More than 50 research studies since 1987 have empirically analyzed and tested the impact of certain success factors on the overall evaluation of brand extensions. Mostly, this consumer evaluation of brand extension studies focused on parent brand quality and

similarity fit in terms of usage, image and features of the original brand product category to extended product category and difficulty of extending the product category by the parent company. These researches throw some excellent insights on the different factors affecting consumer evaluations of brand extensions. If the company launches a high-quality product by exploiting existing weak brand, the brand equity of existing weak brand increases due the positive evaluation of the high quality extended product category (Jun, Mazumdar, and Raj 1999; Keller and Aaker 1992). Brand equity built in a certain product catgory can also be exploited by licensing the well-known brand name to third parties for use in a related class. The strategy is used to challenge major players in an industry (Branson 1998). The chances are high for companies to exploit its high prestige brands to stretch to more remote product categories than brands with inferior reputations (Park, Milberg, and Lawson 1991). Company can also exploit and overstretch its top quality brands. Cannibalization, a decrease in sales in the original category, can result from competition from the extensions(Buday 1991; Reddy, Holak, and Bhat 1994; Sullivan 1990). Failure of brand extensions may weaken brand equity, or positively associate with the original brand (Boush and Loken 1991; Gurhan-Canli and Maheswaran 1998; John, Loken, and Joiner 1998). Sometimes the unsuccessful brand extensions create undesirable associations, which put the company at a serious risk (Aaker 1990: Lane and Jacobson 1995). The more products a company markets under one umbrella brand, the higher the risk that if a disaster occurs to one of them, the effect will spill over to the rest (Sullivan 1990). Opportunities to create a new brand are also foregone (Aaker 1990). The following strong research insights can be observed from the brand extensions literature. Most number of brand extensions research involved with fast moving consumer goods and durable goods except on one study (Aaker and Keller 1990) included McDonald’s as a service brand but they did not make any analytical distinctions between FMCG and services. Only one study addressed the importance of brand extensions in the services sector (Ruyter and Wetzels 2000). Only one study compared brand extension judgements between FMCG and durable goods (Broniarczyk and Alba 1994). The majority of the previous studies basically used consumer surveys to investigate consumer evaluations of hypothetical brand extensions (i.e., extension not introduced in the market). Respondents in prior surveys rated the independent (success factors) and dependent variable (success of the extensions) on simple rating scales (Aaker and Keller 1990; Barone, Miniard, and Rome 2000; Bottomley and Doyle 1996; Bottomley and Holden 2001; Boush and Loken 1991; Broniarczyk and Alba 1994; Dacin Smith 1994; Keller and Aaker 1992; Klink and Smith 2001; lane 2000; Milberg, and Lawson 1991). Most previous research used students as subjects (Aaker and Keller 1990; Barone, Miniard, and Rome 2000; Bottomley and Doyle 1996; Boush and Loken 1991; Broniarczyk and Alba 1994; Dacin and Smith 1994; Klink an dSmith 2001; Lane 2000; Park, Milberg, and Lawson 1991)

Therefore, a research issue that has remained underexposed concerns the extension of services to unrelated markets by making use of the corporate brand. Yet, this type of service extension is becoming a prevalent phenomenon. For instance, deregulation and privatization caused many companies (TATA, Reliance, LIC, SBI) to enter into service markets, such as telecommunications, insurance sectors and transport and spurred a number of corporate service brand extensions, particularly service providers active in a myriad of other markets. Service providers attempt to acquire customer trust on the basis of solidity of their reputation in the market in which they have traditionally been active. As services consist primarily of intangible properties, corporate service brands may be used to reduce perceived risk and to influence frequently unobservable extension evaluation criteria, such as credibility, quality and eventually customer patronage intentions. This seems particularly important when services are extended to markets in which the service provider has no proven expertise. Brands serve as cues for triggering image perceptions based on expressive values associated with the company name.

DATA ANALYSIS FACTOR /VARIABLES extensivelyuseddurablebrand televisionyouprefer washingmachineyoupurchase featureyoupreferfordu rables pricesensitivity outletforbuying price quality warranty lifespan services technology appearances /MISSING LISTWISE

/ANALYSIS extensivelyuseddurablebrand televisionyouprefer washingmachineyoupurchase featureyoupreferfordur ables pricesensitivity o utletforbuying price quality warranty lifespan services technology appearances /PRINT INITIAL EXTRACTION ROTATION /PLOT EIGEN /CRITERIA MINEIGEN(1) ITERATE(25) /EXTRACTION PC /CRITERIA ITERATE(25) /ROTATION VARIMAX /METHOD=CORRELATION.

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FACTOR ANALYSIS Communalities
Initial which durable brand in your opinion is extremely used by the masses today in daily life Extraction

1.000

.396

Total Variance Explained
Com pone nt 1 2 3 4 5 6 7 8 9 10 11 12 13 Initial Eigenvalues Total 1.967 1.770 1.530 1.336 1.216 .968 .844 .810 .739 .623 .509 .354 .334 % of Cumulative Variance % 15.128 13.613 11.767 10.275 9.353 7.446 6.496 6.233 5.682 4.794 3.919 2.724 2.571 15.128 28.741 40.509 50.783 60.136 67.582 74.078 80.310 85.992 90.786 94.705 97.429 100.000 Extraction Sums of Squared Rotation Sums of Squared which brand of television Loadings prefer the most Loadings would you 1.000 .685 % of Cumulative Total % of Cumulative Total Variance % Variance % which of washing 1.967 15.128brand15.128 1.741 13.395 13.395 machine would you like to 1.770 13.613 28.741 1.713 13.175 26.571 purchase for houshold .645 1.530 11.767 purposes 40.509 1.521 1.000 11.699 38.269 1.336 10.275 50.783 1.454 11.181 49.450 1.216 9.353 60.136 1.389 10.686 60.136 which feature of the product is mostly concerned to you while buying a durable brand 1.000 .646

are you price sensitive from which outlet would you like to purchase your desired durable brand

1.000

.670

Extraction Method: Principal Component Analysis.

1.000

.712

price of durable brand quality of durable brand

1.000 1.000

.533 .628

Rotated Component Matrixa
1 which durable brand in your opinion is extremely used by the masses today in daily life which brand of television would you prefer the most which brand of washing machine would you like to purchase for houshold purposes which feature of the product is mostly concerned to you while buying a durable brand are you price sensitive from which outlet would you like to purchase your desired durable brand price of durable brand quality of durable brand warranty of durable brand lifespan of durable brand services of durable brand technology in durable brand appearances of durable brand .100 -.002 .066 .749 -.194 -.177 -.076 -.287 .126 .672 -.708 .187 -.069 2 .476 .140 .771 -.117 .072 .744 .018 -.499 .005 .007 -.186 -.044 .116 Component 3 .279 .778 -.211 .205 -.002 .330 -.614 .494 .060 -.063 .118 -.003 -.020 4 -.008 .123 .042 -.127 .746 .108 .152 .216 .787 -.083 -.200 .221 -.258 5 .286 .211 .006 -.110 .265 -.084 .357 -.073 -.238 .157 -.032 .645 .737

Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization. a. Rotation converged in 6 iterations.

Component Matrixa
1 which durable brand in your opinion is extremely used by the masses today in daily life which brand of television would you prefer the most which brand of washing machine would you like to purchase for houshold purposes which feature of the product is mostly concerned to you while buying a durable brand are you price sensitive from which outlet would you like to purchase your desired durable brand .426 .003 .594 .290 .017 2 .369 .526 .299 -.414 .546 Component 3 .080 .441 -.183 .616 -.048 4 -.219 -.230 -.127 -.056 .603 5 .155 .401 -.391 .086 .074

.276

.671

.072

-.335

-.262

price of durable brand quality of durable brand warranty of durable brand lifespan of durable brand services of durable brand technology in durable brand appearances of durable brand Extraction Method: Principal Component Analysis. a. 5 components extracted.

.236 -.643 -.047 .487 -.583 .333 .336

-.104 .201 .327 -.371 .197 .093 .068

-.542 .285 .387 .292 -.370 -.063 -.397

.416 .089 .600 .080 -.259 .329 -.133

.020 .292 -.278 .140 .094 .519 .579

Component Transformation Matrix

Component 1 2 3 4 5

1 .604 -.488 .612 .147 .041

2 .658 .527 -.121 -.335 -.403

3 -.217 .459 .652 -.408 .389

4 -.025 .501 .236 .820 -.139

5 .394 .152 -.361 .162 .816

Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization.

DATA INTERPRETATION Using SPSS as a research tool ,we came to know that the FIVE factors which suits to the people perception of BUYING DURABLE BRANDS are1.Durable brands are highly innovative and sophisticated. 2.Variety in the extension of durable brands. 3. These are largely revolutionized and authenticated. 4. The other main concern for the people is the area from where the brands are easily and efficiencely purchased. 5.The outlook of accessories and clean shining look of the brand is also equipped with the interest of youth. From here it is concluded that preference of the consumers towards durable brand choices remains still till they are provided with the different taste and ingredients of branded products..Plus it is also sensible for the various brandsretailers to deplete the prices of popular smaller acessories.

CONCLUSION AND MANAGERIAL IMPLICATIONS

This research paper augments existing literature on consumer evaluation of brand extension in the services category. This examines the importance of similarity fit, impact of perceived service quality, significance of high brand reputation, and influence of perceived risk involved in the FMCG and services. Interestingly, this study strengthens the earlier literature in terms of findings in the similarity dimensions. Similarity between the core products/services and extended products/services are considered most important whenever the consumer evaluates the brand extensions. This study also supports the earlier study in terms of the relationship between the perceived service quality and brand reputation. The brand reputation could be enhanced by way of enriching the quality in product or services offered by the company.

Again, the very purpose of using brand extension in creating familiarity among customers is fulfilled. These issues are to a large extent supported by brand extensions in the services category. If there is a strong brand reputation, then there is every possibility that the brand extension is successful in a competitive market. Contrary to the earlier findings, when perceived risk is high in the extended product category, then the brand extension would help us in reducing the perceived risk involved in the purchase of products/services. But this study does not support this assumption. This could be because of the inherent difficulties involved in perceiving the risk involved in the services. Since the services by nature have the credence quality it is very difficult for consumers to perceive the risk involved in the services.

This research paper gives a comprehensive view of how the consumers evaluate the service brand extensions. That the underlying parameters used in the consumer evaluation for service brand extensions are similarity fit, service quality and brand reputation are clearly revealed through the results of this study. More over this study strengthens the assumption that the service quality would enhance the reputation of the brand. The researchers may look into the features of perceived risk and its impact on the brand extensions evaluations in the future studies. This study also paves the way for researchers to do a similar kind of brand extensions studies for the different categories of service sectors. Managerial implications could be that the brand extensions strategy may be used most successfully in cases the similarity between the core product and extended product category should be there in some way. The fit may be in

terms of substitutability, complimenting the core product, usage relevance, or based on the core facilities used for developing and delivering the product/services. We see significant differences in explanatory power at the individual brand level. This might be due to the evaluation based on brand specific factors. Further customers do not use the reputation of the producer as a more important due to service extensions quality than to consumable extensions quality.

QUESTIONAIRE
THIS IS THE SURVEY CONDUCTED BY THE STUDENT OF LPU “LOVELY PROFESSIONAL UNIVERSITY”. IT IS DONE IN ORDER TO ANALYZE THE FACTORS AFFECTING THE CONSUMER DURABLE BRAND CHOICE AND THEIR PERCEPTION TOWARDS THE PURCHASING DECISION OF THESE GOODS. WE WILL BE HIGHLY OBLIGED IF YOU GIVE YOUR FULL SUPPORT TO US. YOUR COOPERATION IS THE SOURCE OF OUR MOTIVATION.

1. NAME : ………………………………………………………………………………………………….. 2. AGE : D). 24 – 29 3. GENDER : A). MALE A). BELOW 15 YEARS E). 30 – ABOVE B). FEMALE B). 15 – 18 C). 19 – 23

4. WHICH DURABLE BRAND IN YOUR OPINION IS EXTENSIVELY USED BY THE MASSES TODAY IN DAILY LIFE? A). REFRIGERATER D). MICROWAVE OVEN G). OTHER 5. WHICH BRAND OF TELEVISION WOULD YOU PREFER THE MOST? A). BPL E). SAMSUNG B). LG C). ONIDA D). SONY BRAVIA B). TELEVISION E). WASHING MACHINE C). DVD PLAYER

6. WHICH BRAND OF WASHING MACHINE WOULD YOU LIKE TO PURCHASE FOR HOUSEHOLD PURPOSES? A). WHIRLPOOL E). ANY OTHER 7. WHICH FEATURE OF THE PRODUCT IS MOSTLY CONCERNED TO YOU WHILE BUYING A DURABLE BRAND? A). HIGH PRICE D). WARRANTY G). OTHER 8. ARE YOU PRICE SENSITIVE? A). YES B). NO B). BRAND EQUITY E). SERVICE C). AVAILABILITY F). ADDITIONAL FEATURES B). LG C). SAMSUNG D). GODREJ

9. FROM WHICH OUTLET WOULD YOU LIKE TO PURCHASE YOUR DESIRED DURABLE BRAND? A). RETAIL OUTLET D). WHOLESELLERS B). SHOWROOMS E). OTHER C). KIOSKS

10. RATE THESE DURABLE BRANDS ON THE BASIS OF FOLLOWING ATTRIBUTES. [NOTE : RANK EACH CELL IN NUMERICS COUNTING FROM 1-5] SAMSUNG LG PRICE QUALITY WARRANTY LIFE SPAN SERVICES GODREJ VOLTAS WHIRLPOOL

TECHNOLOGY APPEARANCES WHERE 1 – EXCELLENT, 2 – V.GOOD, 3 – GOOD, 4 – AVERAGE, 5 – POOR . 11. IF ANY SUGGESTIONS………………………………………………………………………………………………….... ……………………………………………………………………………………………………………………………………… …………………………………………………………………………………… WE THANK YOU FOR YOUR CO-OPERATION . THANK YOU!

REFERENCES
1.

Aaker, David A. (1996), “Building Strong Brands”, New York: The Free Press, 380 p. Aaker, David A. and Keller, Kevin Lane (1990), “Consumer Evaluations of Brand Extensions”, Journal of Marketing, 54, (January), pp. 27-41. Baker, W., Hutchinson, J. Wesley, Moore, D. and Nedungadi, P. (1986), “Brand Familarity and Advertising: Effects on the Evoked Set and Brand Preferences”. In:Advances in Consumer Research, 27 (December), pp.371-381. Barone, Michael J., Miniard, Paul W. and Romeo, Jean B. (2000), “The Influence of Positive Mood on Brand Extension Evaluations”, Journal of Consumer Research, 26 (March), pp. 386-400.

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Bottomley, Paul A. and Doyle, John R. (1996), “The Formation of Attitudes towards Brand Extensions: Testing and Generalising Aaker and Keller’s Model”, International Journal of Research in Marketing, 13, pp. 365-377. Boush, David M. and Loken, Barbara (1991), “A Process Tracing Study of Brand Extension Evaluation”, Journal of Marketing Research, 28 (February), pp. 16-28. Boush, David M., Shipp, S. Loken, B., Gencturk, E., Crockett, S., Kennedy, E., Minshall, B.,Misurell, D., Rochford, L. and Strobel, J. (1987), “Affect Generalization to Similar and Dissimilar Brand Extensions”, Psychology & Marketing, 4 (3), pp. 225-237 Branson, Richard (1998). “ Making Brand Extensions Work”, Sales and Marketing Management, 150(11), 84. Broniarczyk, Susan M. and Alba, Joseph W. (1994), “The Importance of the Brand in Brand Extension”, Journal of Marketing Research, 31 (May), pp. 214-228. Buday, Tom (1991), “Capitalizing on Brand Extensions”, Journal Of Consumer Marketing, 6(Fall), 27-30. Dacin, Peter A. and Smith, Daniel C. (1994), “The Effect of Brand Portfolio Characteristics on Consumer Evaluations of Brand Extensions”, Journal of Marketing Research, 31 (May), pp. 229-242.

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