Customer Buying

UNIT 1 CUSTOMER BUYING BEHAVIOUR Behaviour in Retail

IN RETAIL
Structure
1.0 Objectives
1.1 Introduction
1.2 Definition of Consumer Behaviour
1.3 Decision Making of Consumers in the Product Category
1.3.1 When the Consumer go for High Level of Pre-purchase Search
1.3.2 High Involvement versus Low Involvement Consumer Behaviour
1.3.3 Marketing Implications for High and Low Involvement Product Categories
1.3.4 Strategies for Improving Consumer Involvement
1.4 Hierarchy of Social Influences on Consumer Behaviour
1.5 Influence of Demographics – Lifestyle – Stage in Life-Cycle
1.6 Influence of Perception and Memory
1.7 Influence of Needs and Attitude on a Product Category
1.8 Let Us Sum Up
1.9 Keywords
1.10 Answers to Check Your Progress
1.11 Terminal Questions
1.12 Further Readings

1.0 OBJECTIVES
You have already gone through in our previous course “Store Operation” about the
various roles of customer and their inclination towards the Store Operation. In this
present unit more emphasis will be given on the customer buying behaviour with reference
to retail. The basic aim of this unit is to understand customer buying behaviour in retail.
Learners are expected to be compatible with customer behaviour. This will facilitate
learners when they are putting themselves in retail outlets. By the time you complete
this unit, you should be able to:
● acquaint with the impact of decision making and involvement of consumers in the
product category;
● explore the mentality of the consumer towards the high level of pre-purchase
search;
● compare between the high involvement versus low involvement consumer
behaviour;
● identify certain ways and strategies for improving consumer involvement;
● explain different hierarchy of social influences on consumer behaviour;
● understand the influence of demographics, lifestyle etc. and
● identify the control of needs and attitude on a product category.
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Retail Operations and
Store Management-II 1.1 INTRODUCTION
How many times during the daytime do public make product decisions? If you prevent
to imagine about it, numerous product decisions are made every day, some without
much consideration. What should I be dressed in? What should I consume? What am I
going to perform nowadays? Many product decisions are answered regularly on a daily
basis and they help shift the economy of cities, countries and ultimately the world.
Indian consumers are showing greater flexibility to the inflation and consuming like
never before. As a consumer you have to decide on what to buy, how much to buy, from
where to buy, why to buy, and when to buy.
Product decisions also outline life for the consumer. How can straightforward decisions
be so significant? Why do marketers pay out millions of rupees to discover the cause at
the back of these decisions?
Consumer behaviour can be described as the study of consumers and the processes
they utilize to decide use (consume), and dispose of products and services. A more in
depth definition will also include how that process impacts the world. Consumer behaviour
incorporates ideas from quite a few sciences including psychology, biology, chemistry
and economics.

1.2 DEFINITION OF CONSUMER BEHAVIOUR

Study of consumer behaviour is both a science and an art. It is a science because one
can decipher certain patterns in consumer decision making and work with certain logic
and models for reaching a decision or understanding the patterns and trends.
You need to answer these questions whenever you decide to buy a product. You must
be aware that for some of the products you make a thoughtful and conscious decision,
while for many routine purchases the decision happens automatically and unconsciously
due to a set pattern of answers already stored in your memory for a given type of
product. Thus it becomes important to understand these patterns of buying behaviours
for different product types and different buying situations. One buys the product either
individually or along with family or friends. Some time the product is bought as an urgent
need or as part of the regular buy, or at other times for prestige or comfort. There are
different options and substitutes available as a consumer to us to satisfy our needs or
wants. The final purchase decision will depend on our value system, self attitude,
knowledge, self perception or image, our socio-cultural background, stage in our life-
cycle, self motivation, and other environmental factors.

Source: Image Courtesy http://www.consumerpsychologist.com

6 Figure 1.1: Consumer Behaviour: The Psychology of Marketing
From the above figure it is very well clear that internal and external factors play an important Customer Buying
Behaviour in Retail
role in consumer decision making and finally influence the behaviour of a consumer. It is an
art because many decisions of consumers sometime cannot be deciphered through scientific
models as these are based on individual choices, self image and personality traits. For example
buying decisions that go beyond needs and wants, i.e. for luxury brands, entertainments etc.
For better understanding of consumer behaviour it is necessary to:
● Identify the underlying mechanism of decision making process for different product
categories;
● Identify factors that influence the decision making for different product in different
circumstances;
● Understand the ever changing retail environment and formats.
In order to decide on suitable marketing response, it is necessary that the retailer makes
serious effort to understand the dynamics of consumer behaviour. The consumer
behaviour may be understood through the study of secondary research work as well as
through first hand interaction with consumers on the floor of the store.

1.3 DECISION MAKING OF CONSUMERS IN

THE PRODUCT CATEGORY
It is necessary to understand the exact purchasing habit of the consumer vis-à-vis the
concerned product category. We can divide the product categories based on the
consumers’ level of involvement while making purchase of the concerned category and
their extent of decision making as explained in the Table 1.1.
Table 1.1: Grouping the Product Category based on Decision Making of
Consumers in the Product Category
Consumers’ Decision Making Process Extent of Involvement in the Product Category
High Low
Level of Extended search or Complex decision Limited decision making
Decision evaluation of making, while buying involved as the pur-
making alternative brands/ high value products chasing may be done out
involved while items or options of like Electronic of impulse or need of the
selecting the sources of Products, Furniture, moment or for the sake
item/s within a purchase Homes, Designer of variety, based on
Product Apparel, Health familiarity or comparing
category Products, etc. Here it brand within the store.
is obvious the risk For e.g. T-shirt or medium
involved in making to low priced products
wrong decision is like chocolates, select
high to very high. groceries. The risk
involved is low for making
a wrong decision.
Routine purchases Brand Loyal, normally Inertia, usually low value
done due to habits the consumers go for items purchased out of
or routine usages – their selected brands necessity like paper
not much search is or source of purchase napkins, hand-towels,
involved, may go (like a familiar regular use men’s
for a select brand convenience store or innerwear’s, salt, sugar,
or option due to a mall), for example, pepper, regular grocery
prior experience cologne, deodorants, items, washing/cleaning
high priced lingerie’s soaps/liquids, bread,
& innerwear’s, soaps, bakery items, snacks,
shampoos, hair-oil, etc.
Food products etc.
7
Source: Adapted from Consumer Marketing and Buying Behvior’, Boyd, Walker, Larreche, Marketing
Management, ch.5, pg 102, Irwin Mcgraw-Hill, 3rd Edition, US dated 04th February 2012.
Retail Operations and 1.3.1 High Level of Pre-purchase Search
Store Management-II
Normally it is seen that consumers go for extended search when the following factors
are present:

Figure 1.2: Pre-purchase search from the Consumer’s End

The above mentioned figure throws the light on Pre-purchase search from the consumer’s
end and highlight certain factors.
i. Factors related with product: There are certain factors related to product
(a) when there are frequent changes in fashion or other product features and a
consumer has to purchase a Jeans. He/She would like to know the various options
that are available in the market before making the final decision; (b) when there
are frequent changes in pricing, the customer will make enquiries on the present
prices of the product like in case of food products or groceries or to check on
special offers from any of the stores; (c) when there is long gap between the
repeat purchase; and the volume of purchase is high; (d) when there are many
brands available in the market offering varied combination of features or benefits;
or when the unit price is high.
ii. Circumstantial or Situational Factors: There are situational factors as follows
which also causes the consumer to go for extended search:
a. Experience with the product: If the consumer had an unsatisfactory past
experience with a particular item or brand in a product category. In such
case, the consumer would definitely like to do better search on the product
availability and the beneficial features of various brands/items in the given
category. This also happens when the consumer has no past experience or is
a first time user of the product category.
b. Social acceptability: When purchase is a lifestyle based which is visible in
a social settings like party or get-togethers then the consumer wants to ensure
that his/her purchase is seen as contemporary or trendy. In such cases, the
consumer would like to see different options available to him/her. The
consumer also becomes conscious about his/her choice when he/she has to
buy the item as a gift.
c. Conflicting views: When there are options which have both the desirable
and undesirable features, there is no agreement on the best alternative among
8 the decision making group or the users of the product. When product is a
 discretionary purchase rather than a necessity, there are ecological and Customer Buying
Behaviour in Retail
economic considerations, and the information available on the product category
is a conflicting one. In all such situations the buyer of the category is forced
to look at many aspect of the category before he/she decides on one.
iii. Personal Factors: Personal factors definitely have influence over the level of
pre-purchase search undertaken by a consumer. These factors are as follow:
a. Demographic profile of the consumer: When the consumer belongs to a
well educated, high income group and socially well placed background, and
below 55 years of age group then due to the peer or social pressure needs to
ensure that his choices are seen as the right ones.
b. Personality characteristics: Certain characteristics of the consumer also
contribute to increase in level of search for decision making. For example,
open minded consumers and the ones with low risk taking profile naturally
would like to go for an extended search before making a choice. Similarly,
consumers with a liking for shopping and search with high involvement flavour
of certain product category would also go in for extended search.

1.3.2 High Involvement versus Low Involvement Consumer Behaviour

Generally following characteristics will be observed for consumers with high
involvement with a product category.

Source: http://womma.org
Figure1.3: High vs. Low Consumer Behaviour
The above mentioned model is based and adapted from Henry Assael, Consumer
Behaviour and Marketing Action Cincinnati: Southwestern College Publishing, 1995)
pg. 157 dated 04th February, 2012.
● These kinds of consumers are information seekers and processors; they will actively
look out for more details on the product feature or other salient features, availability
etc. They may seek information either on the net or through their friends or social
circles. They usually look at product advertisements very carefully for finding out
useful details.
● Consumers will do proper evaluation before deciding on their purchase.
● They would like to maximize their satisfaction level through inter brand comparison
and identify the one with most benefits related to their needs.
● They are more conscious about their lifestyle needs and social standing and hence
more appropriate to seek products that help enhance their social acceptability and
belief system.

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Retail Operations and
Store Management-II

Source: http://www.yoyoor.com/travelchina/Guangzhou/shopping/24_shopping.shtml
Figure 1.4: Traditional Indian handmade cloth brand used by socialite
Fabindia is a traditional Indian handmade cloth brand, which expands its products to the
US, Italy, Japan, India, Dubai and China. In the faith of “Celebrating India,” Fabindia
intends to bring the traditional Indian arts and crafts into modern life around the world.
All the clothing in the shop is hand made in India.
From the above figure, it is clear that a socialite would like to buy his/her clothing from
a well known branded fashion store like Fabindia rather than any street outlet, which
may also be selling similar products/brands. These types of consumers always seek the
opinions of their reference groups or friends before they decide to opt for an outlet or
brand, or any other product features. Generally it is seen that consumers go through a
problem solving process involving five steps, as shown in Figure 1.5, when purchasing
high involvement products or services.

Figure 1.5: Steps Involved in the Decision Making Process for a High Involvement Product
10
The characteristics of the low involvement consumer behaviour are as follow: Customer Buying
Behaviour in Retail
These consumers will not seek out information or do systematic processing of information.
They will receive the information passively and may file it in their memory. For example
seeing an advertisement for Britannia Toast, the consumer neither evaluates it nor tries
to make a meaning out of it but simply file it away in his memory. Later when the
consumer visits a convenience store and sees the brand on the shelf he either out of
curiosity or just because he has a need for the toast will just pick up the package of the
said brand. The above action on the part of the consumer is more due to the familiarity
generated, exposure to advertisement or through word of mouth publicity rather than a
strong or positive association with the brand. The consumer may decide after the
consumption of toasts whether the product is really good or ordinary, which in turn will
determine his future decision on purchase of the said brand.
Hence, you have noticed that the product evaluation happens only after usage or purchase
of the product or brand. Thus the decision making process is different as compared to
the complex decision making process, where the evaluation happens in advance before
the product is purchased.
Low involvement consumers are a passive audience for advertisement.
Consumers want to gain reasonable level of satisfaction on few key attributes. The
purchase is generally done on the basis of familiarity either through advertisement or
word of mouth publicity. The products in the low interest category are normally non life-
style or non personality based, and hence their purchases are not influenced by
consumer’s self belief or identity.
Purchases of these products are not influenced by the reference or social groups as
they have nothing to do with social norms or traditions.
As shown in Table 2.1, there are two types of low involvement buying behaviours. First,
inertia, which indicates that consumers out of sheer habit or through a random decision
to buy a product. There are no differences amongst the available brands in a category
and the risk of making wrong decision being low, decides to go for a certain brand.
Second, impulse buying, when a consumer decides to buy a different product/item/
brand for the sake of variety, just for the sake of change and not due to dissonance with
their current brand/product.

1.3.3 Marketing Implications for High and Low Involvement Product Categories
You have learnt that there are specific differences between the high and low involvement
consumer behaviours. Thus, you need to adopt different marketing programs for marketing
of the products falling under the high and low involvement categories. The implications
of these differences on the marketing mix elements are discussed as below:
a) Product Features and Positioning: For both low and high involvement product
categories it is utmost important to ensure that the brand or items in the given
product category have features that differ to certain extent while offering standard
benefits. This will help in creating a good choice for the consumer while making a
final decision. It is also important that on key product features the consumer should
not face any problem. The reason why he/she makes a choice in the first place, so
as to maximize his/her experience with the item or brand chosen from the given
category. A store has the option to provide a positioning as suitable for the category
and the store image. For e.g. Big Bazaar and Future Bazaar which is an online
store of Big Bazaar, may position most of its product categories on the feature of
“Isse sasta aur achchha kahin nahin” (cheap and best products, Nowhere else).
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Retail Operations and
Store Management-II

Source: Future Bazaar.com

Figure 1.6: Snapshot of Future bazaar Online Retail store
For example “Croma” (a retail chain belongs to TATA group selling exclusively electronic
items) may position itself as “Exclusive range at most reasonable prices”.

Source: www.cromaretail.com
Figure 1.7: Snapshot of croma online retail store
At Croma, well-trained store advisors, who have an in-depth knowledge of the
products, guide, can advice and help customer to choose a product that’s just
right for them. The aim is to ensure that shoppers make informed purchases. The
stores are large (15,000-20,000 sq ft), well-planned and designed to make shopping
a pleasure. The in-store experience is backed by robust after-sales service.
b) Advertising and Promotion: In case of low involvement products the consumers
do not seek information but he/she only gathers the information, passively. Thus it
is important that the advertisement message should be directed to few important
key features of the said brand/category which should help create positive association
and familiarity with the brand/category while having high recall value. For e.g. a
distinctive colour in the advertising frame or specific packaging colours highlighted
innovatively will help in better recall and familiarity with the brand.
Generally TV advertising is considered good for creating passive learning, and hence
would be useful in case of low involvement product categories.
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 Customer Buying
Behaviour in Retail

Source: Adapted From the URL http://www.homeshop18.com/about-us.html dated 5th February, 2012
Figure 1.7: Advertising and Promotion by Home Shop18 an online Retail Store
For example Homeshop 18 is an online & on-air retail marketing and distribution venture
backed by the Network 18 Group that was launched as India’s first 24 hour Home
Shopping TV channel on April 9, 2008. It offers innovative, differentiated and
demonstrative retail experiences on TV and internet and has emerged as the largest
multimedia retailer in India. It has a user base of 2.5 million. For high involvement
product categories, as the consumers actively seek information it would be better to
advertise through print media. In high involvement categories the emphasis is not only
on providing information on the features but also to build a positive lifestyle image which
goes well with its target consumer group.
c) Pricing: The main Unique Selling Proposition (USP) for many of the low
involvement products is their comparative low prices. Hence, many of the Food
and Grocery products sellers as well as the medium to low priced garment sellers,
try to gain the trial of their products through special price offers. If the consumers
do not face any problem with the brand/product and are able to have a positive
association with the brand /product then he/she is likely to continue with the same
brand/product out of sheer inertia. He/She may continue this until there is another
competitor offering further lower prices. In case of high involvement products,
price is related to quality and features as well as the lifestyle image the product
category is able to establish in consumers’ mind.
d) Availability/Distribution: One of the reasons for the success of many of the
FMCG products is their wide distribution network and availability of products at
every possible corner. Hence, extensive distribution and availability of low
involvement products help in gaining quick confidence of the consumers as well as
high recall. For the high involvement categories it is necessary to have select
distribution and availability points so as to create an exclusivity and lifestyle image
of the category. For example the distribution and retail-shop network of most of
the electronics product like TVs, Refrigerators, Washing Machines, Air Conditioners,
etc. by companies like Sony, LG, Samsung, Godrej, Philips, Hitachi and many more.

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Retail Operations and 1.3.4 Strategies for Improving Consumer Involvement
Store Management-II
Particularly for low involvement product categories it makes sense to make efforts for
increasing consumer involvement with the said category. This can be achieved through
many innovative ideas like starting a loyalty program for the consumers based on
achievement of purchase target within a certain period of time. For example offering
attractive gift coupons or benefits on achieving the given purchase value; or offering
bonus points. Thus, it would be visualised that many large format stores have very
attractive loyalty programs both to encourage shopping of categories as well as to build
loyalty towards the concerned stores. Some other ideas could be summarized through
the following concepts;
The product category is linked to some involving issue, as when a cereal product category
is linked to a health benefit due to some special certification by a health organization.
For example Colgate and Pepsodent claim to have special health benefits as certified by
Indian Medical Council.

Figure 1.8: Special health benefits as certified by Indian Medical Council

‘Fortune’ oil claiming benefit of maintaining healthy heart condition. The Saffola brand,
owned by Marico Industries, retails a portfolio of products like salt and flour. You should
note that the brand name is popularly associated with its core product—cooking oil. In
the cooking oil segment, the brand has garnered tremendous trust and is practically a
generic name among homemakers. The brand has been very successful in promoting
health as a central theme throughout its messaging—especially on its website, where a
diverse selection of products is featured.

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 Customer Buying
Behaviour in Retail

Source: Saffola
Figure 1.9: Saffola advertisement for the healthy heart
Based on the URL http://www.fortunecookingoil.com dated 12th February 2012 it had
been observed that World Heart Day Sponsored by Saffola brought awareness
among people towards the cholesterol and make them concerned towards their
hearts.
Based on the URL http://www.campaignindia.in, it had been observed that Saffola gifts
reader’s free copies of Times of India (TOI) to celebrate World Heart Day. Continuing
with its Saffolalife initiative, Saffola has rolled out their latest Total Video Converter
(TVC), and print innovation on World Heart Day. TVC, which has been created by
McCann Erickson, Saffola has brought together media houses in India to further the
cause of preventive heart care. Television actors from STAR Plus, Colors and Zee TV
feature in a TVC which further promotes Saffolalife’s ‘Heart Age Finder tool’ and
raises awareness about the fact that even though we celebrate the birthday of our
favorite stars, we often forget the one who is the most important; our heart. In addition,
Saffola has gifted readers in Mumbai, Delhi and Bangalore a free copy of the Times of
India for their heart. Every page of the newspaper has a gift for readers and as one
goes through the paper, gifts are discovered in the form of different ways to take care of
your heart. The FrontPage of the paper has an advertisement which urges readers to
blow out the candles before they can unwrap the gift. Readers have to place the
advertisement in front and log on to ww.isurprise.com from a mobile phone in order to
blow the candles and discover the age of their heart1.
The product category can be tied to a personally involving situation, may be aiding in
faster or tasty cooking, as being advertised for ‘Pilsburry’ flours or special spices and
additives by ‘Ramdev’ Masala; or ‘Fair & Lovely’ skin cream for improving skin tone.
Or advertising might draw on lifestyle or social values, as is the case with many Apparel
brands or lifestyle product categories like Watches, Jewellery, Tea, Coffee, Breakfast
foods, etc.
Or adding an important new feature to the product category, thus drawing new set of
consumers to the category, may be like adding imported food products/brands to the
Food and Grocery category or imported fruits and vegetables to the Fruits & Vegetables
category.

15
Retail Operations and
Store Management-II 1.4 SOCIAL INFLUENCES ON CONSUMER BEHAVIOUR
Normally social pressures of people around us or those with whom we constantly come
in contact or interact with influence our needs, wants, evaluations, and product or brand
choices. You may see social influence when you have to buy high involvement and
socially visible goods or services. The social influences affecting consumers’ purchase
decisions are culture, subculture, social class, reference groups, and family.
You need to consider hierarchy of major social influences (as shown in Figure 1.9)
affecting consumer behaviour in order to gain better understanding of the consumers
thinking. Thereby you may develop marketing strategies for the benefit of the concerned
product categories. From the above model you may realize that understanding consumer
behaviour is very important as it leads us through appropriate stages in our analysis.
Thus you are able to meet consumer need appropriately as well as design the
communication and promotion strategies appropriately.
Let us have a brief look at each aspect of social influence on consumer behaviour:

1. Culture and Sub-culture

These are generally the customs or traditions followed by the consumers within their
social group or communities to which they belong. Hence, certain set of beliefs, attitudes
and behavioural patterns get shared among a particular social group and these are
transmitted to the next generation over a period of time. Thus they may take roots with
the new generation too. Sub-cultures are sub groups within the main cultural group,
which share either common geographical or ethnic or racial or religious backgrounds.
For example within Maharashtrian culture there could be sub-cultural groups belonging
to certain specific territories like western Maharashtra region, Vidarbha region or Konkan
region which will follow a certain set of beliefs and behavioural patterns of their own.
Cultural differences among countries and regions offer tremendous opportunities to
retailers of all types to cash on them, particularly for such products as food, clothes, and
personal care items. Sub-cultural differences offer opportunities at local level to retail
outlets located in specific locations by stocking and differentiating product categories as
per the dominant sub-cultural group’s preferences.

2. Influence of social class – reference group – family

These are basically social groups which generally influence consumers’ buying pattern
of items in a product category or the choice of product category. Generally, groups
belonging to the same income class, educational background and occupation will have
close similarity in their purchase pattern.
The reference group is normally the group which has influence on the normative behaviour
(as with the friend circle or college group), when social acceptance is important; or
influence of the importance or value given to a particular product or category (like for
certain brands or items in a category; for e.g. if there is a practice of using Basmati rice

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 Customer Buying
Behaviour in Retail
Cultural – sub
cultural influence
Social
Influence
Social and
reference groups
and family

Influence of
Personal Demographics – stage in
influence lifecycle – lifestyle &
values

Influence of perception and

memory

Psychological
influence Influence of needs and attitudes
toward product class/ category

Attitudes toward
brands

Consumers’ final decision to buy

the product

Source: Based on ‘Consumer Marketing and Buying Behaviour’, Boyd, Walker, Larreche, Marketing
Management, ch.5, pg 116, Irwin McGraw-Hill, 3rd Edition, US.
Figure 1.10: The Hierarchical Structure of Social Influences Affecting Consumer behaviour
among a certain group of housewives then the whole group will try to confirm with this
practice) this is also called value-expressive influence; or there could be influence through
sharing of information and opinions. For instance, if someone wants to visit a particular
type of retail store or chain, then the consumer may like to seek opinion of his/her
reference circle on certain aspects. It also helps to assess the merits of a given product/
service.
Family is the primary social group which has the basic influence on many of the consumers’
product choices, as it is the first training ground for a consumer for acquiring skills,
knowledge, and attitudes towards its role as a consumer (this is the reason why many
consumers will stay with the same brands or product categories as their childhood ones
even when they are grown up). Therefore, family has a great and lasting influence on its
younger members’ attitudes and preferences toward various brands and stores.

Check Your Progress-A

1. Briefly comment on the following statements.
a) Family is the primary social group which has the basic influence on many
of the consumers’ product choices.
............................................................................................................
............................................................................................................
............................................................................................................
............................................................................................................
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Retail Operations and
Store Management-II
b) Cultural differences among countries and regions offer tremendous
opportunities.
............................................................................................................
............................................................................................................
............................................................................................................
c) The brand has been very successful in promoting health as a central theme
throughout its messaging.
............................................................................................................
............................................................................................................
............................................................................................................
d) Low involvement consumers are a passive audience for advertisement.
............................................................................................................
............................................................................................................
............................................................................................................
e) Limited decision making involved as the purchasing may be done out of
impulse or need of the moment or for the sake of variety.
............................................................................................................
............................................................................................................
............................................................................................................
2. Fill in the blanks with the appropriate word given in the brackets
a) Consumer Behaviour ________ because one can decipher certain patterns
in consumer decision making and work with certain logic and models for
reaching a decision ( A Science/ An Art)
b) Consumers will do proper evaluation before deciding on their _______.
(Purchase/ Sell)
c) Cultural differences among countries and regions recommend wonderful
________ to retailers. (Threat/Opportunity)
3. State whether the following statements are True or False
a) The main USP for many of the low involvement products is their comparative
low prices
b) Particularly for low involvement product categories it makes sense to make
efforts for decreasing consumer involvement.
c) Family is the secondary social group which has the basic influence on many
of the consumers’ product choices

1.5 INFLUENCE OF DEMOGRAPHICS– LIFESTYLE –

STAGE IN LIFE-CYCLE
Elly Kog, Director Human Potential, KBC states that human resources departments
have to take into account demographical trends. (URL http://www.thefifthconference.
com/topic/people/influence-demographics-human-resources More and more).
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Elly Kog explains: “We have investigated how the labour market evolves, and we have Customer Buying
Behaviour in Retail
figures about how many graduates are entering the market and how many baby boomers
are retiring. We know how many people we need and we try to predict how many of
them we can attract. For this purpose we use internal data like the age of our employees,
but also external data like demographic statistics.” If you look at all these statistics, you
can see that KBC (as well as other companies) will have problems attracting enough
people. Elly also stresses that the baby boomers are leaving the labour market between
2010 and 2020. At the same time, the influx of graduates should remain stable from
2010 to 2015. Demographically speaking, the real problem starts from 2015 on, when
the influx of graduates will decrease substantially. So within next ten years, employees
will become a scarce good: all companies will be fishing in the same increasingly small
pool of graduates
a) Influence of Demographics: Demographical attributes like age-groups, sexual
influences, education, occupational groups, and socio-economic groups definitely
influence the consumers. These attributes influence their choices – nature of their
demands – their ability to buy these products in order to satisfy their needs – and
the perceived importance of various attributes or criteria used to evaluate the
alternative items or brands in a product category. For example, older-age consumers
may be much more concerned and interested about health-care products, insurance
schemes, saving schemes etc. They may be less concerned about buying new
home furnishing, clothing, and beauty-care products than the younger age groups.
b) Influence of Life-styles: You may find that persons belonging to two different
lifestyles will have different set of choices within the same product/ sub product
category even when they belong to same income, education, occupation and age
group. This happens due to difference in activities, interest and opinions; which
result in differences in buying pattern, purpose, as well as product usage. For
example, two families belonging to same demographics will buy their breakfast
foods differently due to differences in their life-styles. You may buy refined flour
and other ingredients to make parantha, while the other may buy bread and butter
or cornflakes.
In the Indian Urban context you can clearly identify two well-to-do groups with
different life-styles and thereby needs viz. Traditionally rich (the group which belongs
to rich class due to its inheritance of property rights and richness) and the Neo-
riche (which has newly acquired property and richness with their efforts). The
traditionally rich group have all their habits and preferences coming from their
family usage of products and inheritance. The neo-rich will either try to imitate the
habits of traditionally rich or develop new habits based on their newly acquired
knowledge, information and travel to international cities. This inherent difference
reflects in the way each group will respond to advertisement of a new luxury brand
or product.
c) Stage in Life-cycle: Stages in family-life-cycle also greatly influence the product
choices. For example, the young newly married couple will be more concerned
about buying a new house and prefer to spend more on house-hold related items
like utensils, furnishing, furniture etc. The middle-aged couple will be more
concerned with their kids’ needs and wants, educational products for children etc.

1.6 INFLUENCE OF PERCEPTION AND MEMORY

You have learnt about demographics and now in this head the influence of memory and
perception is taken into consideration. This is all about what things look like; it’s what
you call them etc. 19
Retail Operations and a) Perception: Through perception the consumer identifies, organizes, and interprets
Store Management-II
information. A consumer may pass through the process of exposure to information,
say through an advertisement on TV, and then a repeat exposure may draw his
attention, which may lead to comprehension and then to final retention in the memory.
After the consumer has fully perceived and understood the information, he/she
uses the same to evaluate different product categories/ brands and make a final
decision on purchase of the product. In case of low involvement categories, the
perception process is different as the consumer will not make effort to comprehend
the information but may just store it in his/her memory. A repeat exposure may
cause to retain the information, which may generate familiarity with the brand
when they come across it in a store. For high involvement purchase, the consumer
pay particular attention to information about the product or brands in a category
and the needs it will satisfy for making a good decision. Consumers need to be
selective in perceiving information in order to cope with the clutter of messages
received from different sources. This selectivity occurs at each of the four stages
in the perception process – exposure, attention, comprehension, and retention.
Consumers tend to retain that information which supports what they believe and
are interested in or relevant at a given point in time. Thus selectivity and organization
are the two important features of a perceptual process, which explain why two
different consumers will perceive the same information differently.
b) Memory: The human memory has its limitation. The consumers can retain only
small portion of the information perceived by them. There are two types of memories
– short term and long term. Normally information from the surrounding is initially
processed by the short term memory but is forgotten in less than 30 seconds because
of flow of new information or inattention. Certain information perceived to be
important consciously or sub consciously get transferred to the long term memory.
The information stored in the long term memory can be retrieved later. Thus for
many product categories or brands, the information may be technical and complex
nature, and needs careful understanding by the consumer. This may be the case
with most of the high involvement product categories, then print media is considered
to be the most suitable medium for communicating the useful details to the
consumers. TV is preferred when certain key information, like brand name, product
features and symbols, needs to be highlighted as in case of low involvement products,
and then repeated frequently for retention in memory.
Another mental factor that determines the amount of information the consumer
remembers about a product and uses, is the way in which the said information is
organized mentally. This organization of information happens through the process
of categorization and integration. Categorization helps consumer to process the
known information quickly and efficiently. For instance consumer’s experience
with a particular kind of characteristic of a product, for example say, a taste of
juice with soyabean ingredient will determine his/her reaction to an advertisement
for a product with similar ingredient. Integration means that consumers perceive
separate pieces of related information as an organized whole. For example, consumer
will integrate various pieces of information such as a brand Advertisement, its
price, and the retail store’s ambience and its location that carries the brand to
create an overall impression about the brand.

1.7 INFLUENCE OF NEEDS AND ATTITUDE ON A

PRODUCT CATEGORY
An attitude is a positive or negative feeling about an object (say for a brand or product
category) that predisposes a person to behave in a particular way towards that object.
20
(Boyd, walker, carreine, 2012)
Attitudes are based on the assessment of the consumer about a certain brand or product Customer Buying
Behaviour in Retail
category if it provides the required benefits thereby fulfilling the consumer’s specific
need. The evaluation is done on multi-attributes, each attribute of differing weightage or
importance. Consumers use different ways to evaluate alternative brands based on the
strength of their needs, their involvement with the product category, and the risk they
associate with the purchase. (Amyostom and Daron lacobucci, 1995).
There are compensatory and non compensatory models to assess brands on multiple
attributes. A model is called compensatory when it determines the preference for a
brand among competitive brands, based on overall sum of the weighted ratings on all the
relevant attributes for each of the brands. It is called compensatory because a poor
evaluation on one attribute may be compensated by a strong evaluation on another one.
A Non-compensatory attitude model is based on one single attribute which is most
important or relevant at a given time or in a situation. For instance, in a low involvement
product - consumer may adopt a simple approach of evaluating competing brands on a
single attribute at a time. It is non-compensatory because a poor evaluation on one
cannot be compensated by a strong evaluation on another one.
These models provide clues for designing marketing programs that address the specific
concerns of consumers. The multi-attribute model shows consumers’ ideal combination
of product/service attributes, and relative importance of each of these attributes. Through
clustering of group of consumers on the similar set of attributes one can identify the
important parameters on which these set of consumers differ from each other. This
may help to formulate marketing mix to attract the larger groups among these sets to the
product category. The analysis also help in identifying the relative position of brands
(within a category) with respect to the “ideal attributes” chosen by the largest segment
of the consumers.
These models certainly help in finalizing marketing programs pertaining to product
features, pricing, and advertising.
Some of the actions taken by the marketers of product categories to change the
consumers’ attitude favorably towards their product category or brand vis-à-vis other
competing categories or brands are as follows:
a) Changing attitude toward the product class or type to increase the total market:
Here the manufacturer or retailer may attempt to develop a primary need or modify
the current need to channelise it to its stores. For example when Big Bazaar made
a start as a hyper store, in order to create a demand for the grocery and food
products, it ensured very competitive pricing. In some items even substantially
keeping lower than those available in general market, just to attract the customers
and gain their trust (vis-à-vis the ‘bhaiyaa’ or kirana shop from which they usually
buy their daily needs).
b) Giving more importance to attributes as desired by consumers: This can be
clearly seen by many supermarket retailers highlighting the brands and products
providing health benefits; particularly the cooking oil category with display of many
brands offering cholesterol reducing benefits.
c) Adding a salient product characteristic to the existing ones: This can be seen
in many of the FMCG products which keep on introducing one new benefit, after
a gap of some months, in their existing brand in order to renew its presence and
sale. For example ‘Tide’ detergent brand introduced a new characteristic of
fragrance along with the other attributes.

21
Retail Operations and
Store Management-II

Source: Tide
Figure 1.11: Tide combination with Lemon and Chandan
d) Improving ratings of the salient product characteristics of a particular brand:
Such dramatic changes are seen in many durable products which with the help of
their R&D is able to come up with some brilliant product characteristics. You may
see the Refrigerators with double compartments and water dispenser facility, latest
models of cellular phones, etc.
e) Lowering the ratings of the salient product characteristics of competing
brands: This is seen in comparative advertisings done by some brands either through
direct or indirect comparison, particularly those in the food and health categories.
For example Complan and Bournvita brands for their health based chocolate
flavoured drinks.

Source: Complan and Bournvita

Figure 1.12: Comparative view of Complan and Bournvita
22
Attitudes may also be changed for a new brand with the help of a substantial reduction Customer Buying
Behaviour in Retail
in price; or through the celebrity backing to a product, for e.g. Shahrukh Khan promoting
Fair & Handsome fairness cream for men; or through free product trials.

Source: http://www.fairandhandsome.net/
Figure 1.13: Fair & Handsome fairness cream for men
The figure mentioned above gives a close overview about handsome fairness cream for
men
Fair and Handsome: Emami, in collaboration with Activor Corp, USA, herbalists and
dermatologists from India has created a unique fairness cream for Men with a
breakthrough. This is Five Power Fairness System to make skin fair and handsome in 4
weeks. It also helps in relieving stress and fatigue signs - gives men’s tough skin a
firmer look. Emami Fair and Handsome World’s No.1 fairness cream protects men’s
face from sun’s UV Rays.

Check Your Progress-B

1. Briefly comment on the following statements.
a) Categorization helps consumer to process the known information quickly
and efficiently
............................................................................................................
............................................................................................................
............................................................................................................
b) An attitude is a positive or negative feeling about an object.
............................................................................................................
............................................................................................................
............................................................................................................
23
Retail Operations and
Store Management-II
2. Fill in the blanks with the appropriate word given in the brackets
3. State whether the following statements are True or False
c) Comparative advertisings done by some brands either through direct or
indirect comparison.
............................................................................................................
............................................................................................................
............................................................................................................
a) Marketers can take _________significant actions to change the consumers’
attitude (Many/One)
b) Consumer wills __________ various pieces of information such as a brand
Advertisement, its price, and the retail store’s ambience and its location.
(Integrate/Disintegrate)
c) There are compensatory and non compensatory models to assess brands on
__________ attributes (Multiple/Single)
a) The human memory has its limitation, as the consumers can retain only
small portion of the information perceived by them.
b) Groups belonging to the same income class, educational background and
occupation will have close discrepancy in their purchase pattern.
c) Family is the secondary social group which has the basic influence on many
of the consumers’ product choices.
d) A Non-compensatory attitude model is based on one single attribute.

1.8 LET US SUM UP

● Consumers’ decision making processes can mainly be classified on the basis of
high versus low involvement with the product and the extensiveness of the search
for information before making an actual purchase.
● In order to reduce psychological or financial risk in purchase of a high involvement
product, consumer is generally involved in a complex decision making process.
● Consumers generally go for high level of pre- search information when following
factors are present: Factors related with products; Circumstantial or situational
factors; and Personal factors.
● There are definite characteristics that differentiate between the high and low
involvement consumer behaviour.
● We have to adopt different marketing programs for marketing of the products
falling under the high and low involvement categories. The marketing mix that
needs to be worked upon are: Product features and Positioning; Advertising and
Promotion; Pricing and Availability/Distribution.
● Particularly for low involvement product categories, it makes sense to make efforts
for increasing consumer involvement with the said category.
● Normally social pressures of people around us or those with whom we constantly
come in contact or interact with influence our needs, wants, evaluations, and product
or brand choices.
● One can see social influence when one has to buy high involvement and socially
24 visible goods or services. The social influences affecting consumers’ purchase
decisions are culture, subculture, social class, reference groups, and family.
● It is observed that demographics, lifestyle, and stages in life-cycle definitely have Customer Buying
Behaviour in Retail
influence on the purchase decisions and preference of product types by a consumer.
● Through perception the consumer identifies, organizes, and interprets information.
After the consumer has fully perceived and understood the information, he/she
uses the same to evaluate different product categories/ brands and make a final
decision on purchase of the product.
● The human memory has its limitation. The consumers can retain only small portion
of the information perceived by them. There are two types of memories – short
term and long term.
● An attitude is a positive or negative feeling about an object (say for a brand or
product category) that predisposes a person to behave in a particular way towards
that object.
● There are compensatory and non compensatory models to assess brands on multiple
attributes. These models provide clues to designing marketing programs that address
the specific concerns of consumers.
● Marketers can take many important actions to change the consumers’ attitude
favorably towards their brand or product category vis-à-vis other competing brands
and product categories.

1.9 KEYWORDS
Social acceptability : When the purchase is a lifestyle based which is
visible in a social settings like party or get-togethers.
Demographic profile : When the consumer belongs to a well educated, high
income group and socially well placed background,
and below 55 years age group.
Positioning : For both low and high involvement product categories
it is utmost important to ensure that the brand or
items in the given product category have features
that differ to certain extent while offering standard
benefits.
Pricing : The main USP for many of the low involvement
products is their comparative low prices.
Consumer : A consumer is a person or group of people that are
the final users of products generated within a social
system.
Promotion : Products sold at attractive prices so as to generate
sales and profits.
Advertising : Any paid form of non-personal communication of
ideas or products in the “prime media”: i.e. television,
newspapers, magazines, billboard posters, radio,
cinema etc. The two basic aspects of advertising
are the message (what you want your communication
to say) and the medium (how you get your message
across)
Personal Selling : May focus initially on developing a relationship with
the potential buyer, but will always ultimately end
with an attempt to “close the sale”. 25
Retail Operations and Sales Promotion : Providing incentives to customers or to the distribution
Store Management-II
channel to stimulate demand for a product.
Publicity : The communication of a product, brand or business
by placing information about it in the media.

1.10 ANSWERS TO CHECK YOUR PROGRESS

Check Your Progress-A

FIB
a. Science b. Sell c. Opportunity
True and False
a. True b. False c. False

Check Your Progress-B

FIB
a. Many b. Integrate c. Multiple
True and False
a. True b. False c. True d. True

1.11 TERMINAL QUESTIONS

1. Describe the concept of high and low involvement consumer behaviour.
2. When does the consumer go for high level of pre-purchase search?
3. What are the characteristics of consumer with low involvement with a product
category?
4. Explain the marketing implications for high and low involvement product categories.
5. Discuss strategies to be adopted for improving consumer involvement?
6. Explain with diagram the concept of hierarchy of social influence on consumer
behaviour.
7. How do culture and sub-cultures influence consumer behaviour?
8. Why are family and reference groups important in making a purchase decision?
9. How do demographics, life-style and stages in life-cycle influence consumers’
decision making?
10. Explain the concept of perception in influencing consumer behaviour.
11. Discuss the role of memory in consumer’s decision making process.
12. Explain the compensatory and non-compensatory models in the consumers’ decision
making process for evaluating brands on multiple attributes.
13. Explain the actions to be asked by the marketer for changing the attitude favourably
towards its brand.

26
 Customer Buying
1.12 FURTHER READINGS Behaviour in Retail

Books
● “Consumer Behaviour” – Leon Schiffman, Leslie Lazar Kanuk – Pearson / PHI,
8/e , 2001
● Hawkins, Best, Coney “Consumer Behaviour” –– TMH, 9/e, 2004
● Kuldeep Singh “Retail Management in New Dimension” –– Global Vision Publishing
House, New Delhi, 2012
● Manish V Sidhpuria “ Retail Franchising” –– The McGraw-Hill Companies, New
Delhi, 2011
● Michael Levy , Barton A Weitz and Ajay Pandit“ Retailing Management” –––The
McGraw-Hill Companies, New Delhi, 2008
● Peeru Ahmed & Sagadevan, “Customer Relationship Management” –– Vikas
Publishing, 1999
● Robert Rugimbana and Sonny Nwankwo, “Cross cultural marketing”, 2000
● Schiffman, Kanuk, and Hansen Chapter 13: The Influence of Culture and Subculture
on Consumer Behaviour. 2008
● Sheth, Mittal – Thomson, “Customer Behaviour – A Managerial Perspective”,
2005
● Suja Nair , “Consumer Behaviour In Indian Perspective” , Himalaya Publishers,
2004
● Swapna Pradhan “ Retailing Management” –– The McGraw-Hill Companies,
New Delhi, 2011
● Sheth Mittal “Customer Behaviour – A Managerial Perspective” –- Thomson,
2/e, 2004
● Alok Kumar and Chhabi Sinha “CRM” –,7/e, Biztantra
Journals
● Cowley, Elizabeth (2005), “Views From Consumers Next in Line: The Fundamental
Attribution Error in a Service Setting,” Journal of the Academy of Marketing Science,
33 (2): 139-153.
● Bellizzi, Joseph A.; Bristol, Terry (2004), “An assessment of supermarket loyalty
cards in one major US market,” Journal of Consumer Marketing, 21 (2), p144 –
155.
● Crockett, David; Wallendorf, Melanie (2004), “The Role of Normative Political
Ideology in Consumer Behaviour,” Journal of Consumer Research, 31 (3): 511 –
529.
● Argo and Dahl (2005), The influence of mere social presence in a retail context,
Journal of Consumer Research, 32, 207-212.
● Noah J. Goldstein, Robert B. Cialdini, Vladas Griskevicius (2008). A Room with a
Viewpoint: Using Social Norms to Motivate Environmental Conservation in Hotels.
Journal of Consumer Research. Vol 35
Websites and Online Resources
● http://www.econ.upf.edu/eng/graduates/gpem/pdf/courses/2010-11/
Consumer%20Behaviour%20in%20Marketing.pdf
● http://www.maths-in-industry.org/miis/38/1/Consumers.pdf
● http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1479-1838
● http://iamsam.hubpages.com/hub/Consumer-Behaviour 27
Retail Operations and
Store Management-II
Activity

Visit a supermarket and study the behaviour of customer. How do you distinguish
between information seeker and information processer when exploring the kind of
consumer in a retail store.
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Note : These Terminal Questions/Check Your Progress/Activity will help you to

understand the unit better. Try to write answers for them. But do not submit
your answers to the University for Assessment. These are for your practice
only.

28