CHAPTER 1

INTRODUCTION
1.1INTRODUCTION
Consumer buying behaviour is the sum total of a consumer's attitudes, preferences, intentions,
and decisions regarding the consumer's behaviour in the marketplace when purchasing a product
or service. Anthropology, psychology, sociology, and other social science fields are all used in the
study of consumer behaviour. The identification of consumer purchasing patterns should be
prioritised if a marketer wishes to target certain customers with certain items and services.
Consumer behaviour is the study of how individual, customers, groups or organizations select,
buy, use, and dispose ideas, goods, and services to satisfy their needs and wants. It refers to the
actions of the consumers in the marketplace and the underlying motives for those actions.
Consumer Behaviour is related closely with the satisfied of the consumer. In the marketing, the
consumer satisfaction has become a challenge in the competitive environment.

Consumer behaviour compels the marketers to know the answers of following questions:
1. Who buys the product?
2. Why does he buy the product?
3. How does he buy the product?
4. Where does he buy the product?
5. What are his expectations?
6. What he expects from the firm?
7. How he will be satisfied after buying the product?

FACTORS INFLUENCING CONSUMER BEHAVIOUR

1.Psychological Factors:

• Perception: How individuals interpret and make sense of information. This includes selective
attention, selective distortion, and selective retention.

• Motivation: The underlying needs and desires that drive consumer behavior. These could be
physiological (basic needs) or psychological (higher-level needs like status or belonging).

• Attitudes: The overall evaluation of a product, service, brand, or even an entire category.
Attitudes can be formed through personal experiences, social influences, and marketing efforts.
• Learning: How individuals acquire new behaviors and knowledge, which can be influenced by
personal experiences, social interactions, and marketing messages.

• Personality: Individual characteristics, traits, and behavior patterns that influence how
consumers respond to marketing stimuli.

2.Social Factors:
• Culture: The values, beliefs, customs, and norms shared by a group of people. Culture heavily
influences consumer behavior, affecting preferences, buying habits, and decision-making
processes.

• Reference Groups: Groups that individuals compare themselves to or aspire to emulate. These
could be family, friends, coworkers, or celebrities. Reference groups influence consumer behavior
through social comparison and normative influence.

• Family: The roles and influence of family members on consumer decisions, including decision-
makers, influencers, and users within the household.

• Social Class: Socioeconomic status, occupation, education level, and income influence
consumer behavior by shaping preferences, lifestyle choices, and purchasing power.

3.Personal Factors:
• Demographics: Characteristics such as age, gender, income, education, occupation, marital
status, and family size can affect consumer behavior.

• Lifestyle: How individuals choose to live their lives, including activities, interests, opinions,
and values. Lifestyle influences purchasing decisions and brand choices.

• Values and Beliefs: Personal principles and convictions that influence consumer behaviour and
decision-making.

4.Situational Factors:
• Purchase Context: The specific circumstances surrounding a purchase, such as time pressure,
mood, and location, can impact consumer behavior.

• Urgency: The perceived importance or necessity of making a purchase, which can be influenced
by factors like scarcity, promotions, or immediate needs.
• Physical Environment: The surroundings where a purchase takes place, such as store layout,
ambiance, and music, can influence consumer behavior.

5.Marketing Mix:
•Product: Attributes, features, quality, branding, and packaging influence consumer
perceptions and preferences.

• Price: The perceived value of a product relative to its cost, including pricing strategies, discounts,
and promotions.

• Place: Distribution channels, accessibility, and convenience impact where and how consumers
purchase products.

• Promotion: Marketing communications, advertising, sales promotions, and public relations

efforts influence consumer awareness, perception, and behavior.

DECISION-MAKING PROCESS OF CONSUMER BEHAVIOUR

The mechanism of consumer behaviour can be understood by considering following decision
making process:

There are the following stages of the Consumer Decision-Making Process given below

Stage 1: Need recognition

This is the first step in the process where a consumer identifies a need or desire that they want to
fulfill. This could be a functional need (like hunger), an emotional need (like wanting to feel
happy), or a social need (like fitting in with a group).
Stage 2: Information Search
The buyer considers all the benefits and drawbacks of the purchase at this stage of their decision-
making process. Because of changing styles and online shopping sites, consumer know much more
about what they want to buy and can make better choices.

Stage 3: Evaluation of alternatives

In this stage, the third stage in the consumer decision-making process is to carefully look at all the
all the alternative and substitutes on the market. Once consumer know what they need and where
to get it, they will start looking for the best deals or options.

Stage 4: Buying the product or service

After going through the above stages, the customer decides what to buy and where to buy it. The
consumer makes a smart choice to buy a product based on his needs and wants after he has looked
at all the facts.

Stage 5: Post-purchase evaluation

In the last stage of the consumer decision-making process, the consumer evaluates or analyzes the
product they bought. They look at how helpful the product is, how satisfied they are with it, and
how much it is worth to meet their needs.

TYPES OF CONSUMER BUYING BEHAVIOUR

1. Routine Response Behavior: Low-involvement purchases with minimal decision-making

effort.

2. Limited Decision Making: Moderate involvement in the purchase decision with some
information search and evaluation.

3. Extensive Decision Making: High involvement requiring significant information search and
evaluation.
Impact of Digitalization on Consumer Buying Behaviour

1.Introduction to Digitalization
 Define digitalization: The integration of digital technologies into various aspects of
everyday life, including shopping and consumer behavior.

 Importance of understanding the impact of digitalization on consumer buying

behavior: Digital technologies have transformed how consumers research, evaluate, and
purchase products, necessitating businesses to adapt their strategies accordingly.

2. Online Shopping Convenience:

 Accessibility: Digital platforms enable consumers to shop from anywhere with internet
access.

 24/7 Availability: Online stores operate round-the-clock, allowing consumers to make

purchases at their convenience.

 Reduced Time and Effort: Shopping online saves time and effort compared to traditional
brick-and-mortar stores.

3. Influence of Social Media:

 Peer Recommendations: Consumers rely on recommendations from friends, family, and
online communities when making purchasing decisions.

 Influencer Marketing: Social media influencers shape consumer preferences and

purchasing behavior through sponsored content and endorsements.

 User-Generated Content: Reviews, ratings, and testimonials influence consumer trust and
perception of products or brands.

4. Personalization and Targeted Marketing:

 Data Analytics: Digital platforms collect and analyze consumer data to personalize
marketing messages and product recommendations.

 Behavioral Targeting: Advertisements are tailored to individual preferences and past

behaviors, increasing relevance and effectiveness.
  Customized Offers: Businesses offer personalized discounts, promotions, and
recommendations based on consumer profiles and shopping history.

5. Omnichannel Retailing:
 Seamless Shopping Experience: Integration of online and offline channels provides
consumers with a cohesive shopping journey across multiple touchpoints.

 Click-and-Collect: Consumers can order online and pick up purchases in-store, combining
the convenience of online shopping with the immediacy of physical retail.

 Showrooming and Web rooming: Consumers visit physical stores to evaluate products
before making purchases online (showrooming) or research online before buying in-store
(web rooming).

6. Mobile Commerce (M-Commerce):

 Post-Purchase Evaluation: Online reviews, social media discussions, and customer service
interactions shape consumer satisfaction and loyalty.

 On-the-Go Shopping: Mobile devices enable consumers to shop anytime, anywhere,

making purchases on smartphones and tablets.

 Mobile Payments: Digital wallets and mobile payment apps streamline the checkout
process, offering convenience and security.

 Location-Based Services: Geotargeted promotions and personalized offers based on a

consumer's location enhance relevance and engagement.

7. Impact on Consumer Decision-Making Process:

 Information Search: Consumers rely on digital channels to research products, compare
prices, and read reviews before making purchase decisions.

 Evaluation of Alternatives: Online access to a wide range of products and brands enables
consumers to compare options and make informed choices.

 Purchase Decision: Digital platforms influence where and how consumers make purchases,
with factors like website usability and payment options impacting decision-making.
  Post-Purchase Evaluation: Online reviews, social media discussions, and customer service
interactions shape consumer satisfaction and loyalty.

8. Future Trends and Opportunities:

 Augmented Reality (AR) and Virtual Reality (VR): Immersive technologies enhance the
online shopping experience, allowing consumers to visualize products in real-world settings.

 Voice Commerce: Voice-activated assistants and smart speakers enable hands-free shopping
and voice-controlled transactions.

 Artificial Intelligence (AI): AI-powered chat bots and virtual assistants provide
personalized customer support and recommendations, improving the overall shopping
experience.
 COMPANY PROFILE OF NYKAA

HISTORY OF COSMETICS
The discovery of the art of photography and of films, particularly, provided the impetus to a sudden
growth in cosmetics. As watchers saw images of famous people with perfect complexion and
strong sexual appeal, the standards of a woman's beauty started to change. Cosmetics have become
a means to beautify one's physical appearance.

During the 1920s, cosmetic history increased quickly. Between the year
1927 and 1930, advertising expenses on the radio increased from $300,000 to $3.2 million. At first,
a lot of the feminine magazines declined advertisements on cosmetics. However, near the end of
cosmetics had progressed and cosmetic advertising in magazines became one of the magazine
industries' largest revenue producing resources.

NYKAA

Nykaa is an Indian cosmetics company that offers wellness, skincare, and cosmetics goods. The
Sanskrit word "Nayaka," which means "the one in the spotlight," is the root of the word "Nykaa,"
and the brand has undoubtedly been in the spotlight ever since it began. Nykaa initially started as
an online platform offering a wide range of beauty and cosmetic products.
Over the years, it has expanded its offerings to include skincare,
haircare, fragrances, personal care, and wellness products. As of my last update, Nykaa has
established itself as one of the leading beauty and wellness retailers in India, with plans for further
expansion and diversification. When Nykaa started and how it grows whole journey explained
below:

• Inception 2012:
Incorporated in 2012 as an online beauty retailer, a niche that built us a strong base among
commerce giants.
• Omnichanne 2014:
Nykaa Launched first physical store, realizing the need to make value creation model more robust.
• Expansion 2015- 2020:
A time of aggressive geographic and vertical expansion, venturing into own brands, multiple
international luxury brands Diversified portfolio by launching Fashion Amplified content led
engagement model across channels.
• Pandemic 2020:
Pivoted quickly into an essential online store, launching a new category of private labels, including
hand sanitisers, masks, hand wash, among others Enabled curated selection by geography.

• UNICORN 2020:
Club with a fresh ₹1,000 million funding from Steadview Capital, at a valuation of ₹91,000 million

• New Normal 2021:

Nykaa Launched marketplace for fashion segment to align it with evolving consumer demands
Developed hyper-local delivery model, leveraged tech for enhanced customer experience in the
new normal.
• Growth boosters 2021-2022:
Nykaa Expanded their physical retail presence and fulfilment network to get closer to customer
Listed on the bourses, raising ₹53,497 million through IPO of which ₹47,197 million was through
OFS and ₹6,300 million by way of fresh capital.

ORIGIN OF NYKAA
It was founded by Falguni Nayar in 2012. Falguni Nayar, a former investment banker, identified a
gap in the Indian market for a dedicated beauty and wellness e-commerce platform. Nykaa started
as an online retailer offering a wide range of cosmetics, skincare, haircare, fragrances, and personal
care products from various brands.

FALGUNI NAYAR
(Executive chairperson, Managing Director
Chief Executive officer, Age 61)

PRODUCT RANGE
Nykaa boasts a diverse catalog featuring thousands of products from both local and international
brands. From well-known beauty labels to niche indie brands, Nykaa offers something for every
beauty enthusiast, including makeup, skincare, haircare, personal care, fragrances, and wellness
products.

PLATFORM FEATURES
• User-Friendly Interface: Nykaa's website and mobile app are designed for seamless navigation,
making it easy for customers to discover and purchase products.
• Reviews and Ratings: Customers can access authentic reviews and ratings from fellow shoppers,
helping them make informed purchasing decisions.
• Beauty Advice and Tutorials: Nykaa provides expert beauty tips, tutorials, and articles to
educate and inspire customers.
• Exclusive Offers and Discounts: Nykaa frequently offers exclusive deals, discounts, and
promotions to its customers, enhancing the value proposition.
• Customer Support: The platform offers dedicated customer support to assist users with
inquiries, orders, and product recommendations.
VISION
Bring inspiration and joy to people, everywhere, every day.

MISSION
To create a world where our customers have access to a finely curated, authentic assortment of
products and services that delight and elevate the human spirit.

KEY GOALS
• Grow customer base.
• Improve customer loyalty.
• Exclusivity of relationships.
• Drive engagement.
• Expanding our physical footprint
• Influencer network complemented by expert advisory at physical stores.
• Assisted buying experience in stores and retail channel.
• Brands that win in key niches.
• Driving a holistic portfolio of brands that delight customers.
• Brands that win in key niches.
• Driving a holistic portfolio of brands that delight customers.
STRATEGIES TO ACHIEVE GOALS
1. Provide an immersive shopping experience
• Content-led marketing to engage and acquire customers
• Use levers of ‘voice, video, and vernacular’
• Continuously expand product portfolio and refine
• Make strategic investment towards creating a symbiotic relationship with brand partners
• Create value for our brand partners through improved merchandising, refined marketing,
and new data driven brand specific experience
2. Invest in the expansion of physical stores network and fulfilment centres to get closer to
customers and improve customer journey and bring stakeholders in the industry together in
the industry together.
• Focus in growing our presence beyond Tier-1 cities.
• Invest in people and infrastructure to create strong offline and online.
3. Identifying market and category gaps and building innovative products to address
customer needs.
• Expand product offering in our house of brands portfolio.
• Add new, long-term focused brands.
• Leverage insights on the latest regime, styles, and trends in beauty & personal care and lifestyle
categories and construct detailed and informative content to improve customer journey.

AWARDS
Nykaa has received many accolades for disrupting the beauty market.
• The 17th India Business Leader Award in 2022.
• The Disruptor of the Year in 2019.
• Kantar’s Brandz List features Nykaa as one of most valuable brands in India in 2021.

REVENUE
In FY 2022-2023, Nykaa has witnessed a consolidated Revenue from Operations of
₹44,820million, a growth of over 32% over the previous year. In FY 2021-2022, Nykaa has
witnessed a consolidated Revenue from operations of ₹ 33,997 million. Nykaa continues to
prioritise the balance between growth and profitability while continuing to invest for the future.
Nykaa Company’s focus remains on creating a long-term sustainable value for all stakeholders.
Future Outlook
As Nykaa continues to innovate and evolve, it remains committed to enhancing the beauty
shopping experience for its customers. With a focus on customer satisfaction, product diversity,
and technological advancements, Nykaa is poised for continued growth and success in the dynamic
beauty landscape. Nykaa stands as a testament to the power of entrepreneurship, innovation, and
passion in transforming an industry and delighting customers.