Final

Consumer Buying Behaviour
CONCEPT
Consumer
The attitude of consumer or buyer decides how demand will emerge for a new product
and service and how existing goods and services will be sold. The attitude in turn
depends upon many economic, social, cultural, climatic factors. The decisions are also
influenced by education, stage of economic development, lifestyle, information, size of
family and hoast of other factors.
To understand consumers each brand has to start by asking several basic questions:
WHO?
Who is the consumer? What are consumers demographics? Where does she stay? Which
socio-economic class does she hail from? Who can influence her purchase behaviour?
WHY?
Why does she buy this product? This brand? What are her beliefs? What is her attitude
towards this brand and the key competitors? What needs does this brand fulfill?
WHEN?
When does she buy the brand? Daily? Monthly? When does she use the brand?
WHERE?
Where does she buy the brand? Where else may she want to buy the brand? Where does
she use the brand? At home? Outside?
Customer
Whos running the organization?
Customers!!!
By Tom Peters
Its an old saying that customer is the king because he is the person on whose decision
demand of any product or any service is dependent.
The purpose of a business organization is to achieve the objectives set out by its
stakeholders, its shareholders, its employees and others. But among the most important
players in this game are the customers of the business. No business can be successful if it
ignores the needs of its customers.
CONSUMER BEHAVIOUR
Meaning and definition
The study of consumer behaviour implies how and why a particular consumer or group
reacts to decisions of producers. Consumer behaviour could be defined as those actions
directly involved in obtaining, consuming, and disposing of products and services,
including the decisions process that proceeds and follow the action.
According to another author consumer behaviour is the behaviour that consumer display
in scanning for purchasing, using, evaluating and disposing of products and services that
they expect will satisfy their needs. The study of consumer behaviour is the study of how
individuals make decisions to spend their available resources (time, money, effort) on
consumption related items. It includes the study of what to buy, when to buy, why to buy,
from where to buy, how often to buy, and how often they will use it.
Normally in consumer behaviour one studies the behaviour of consumers for
consumption goods but in the study the behaviour of the buyer is also included. He may
be user i.e. ultimate consumer or he may be buying for someone else.
In a competitive environment, one cannot trust a product or a consumer. The producer has
to produce what is demanded or what can be demanded. Study of consumer behaviour
will help us to know what can be sold and what goods and services are likely to get
rejected.
In certain products like medicines one buys on the prescription of a physician which is
also a part of consumer behaviour. In case of capital goods that is plant, equipment,
machinery, buildings etc the decisions are often based on technical advise of others. In
case of industrial raw materials the decision is influenced by supplier of equipment. Then
there are purely consumer goods with short life and once they are used they extinguish.
They are called Fast Moving Consumer Goods (FMCG). There are other consumer goods
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which are durable like cars, refrigerators, electrical iron, juicer-mixer, etc but they
basically consumer items with long life. There are also goods like clothes, which are not
consumed in one go but are used for long. The behaviour of consumers for all these
products is taken on different considerations than short-term consumer goods like fruits,
juices, ice cream or milk.
In short consumer behaviour implies study of behaviour of purchaser of all goods and
services whether purely consumer goods, intermediate goods or capital goods. In other
words it implies study of attitude of all consumers in disposing of their resources. Further
it is not confined to final users but also include study of attitudes, of all those who take
investment decisions whether they consume themselves or buy for others. It also includes
study of behaviour of those who are consultant, advisers and give their opinion to but or
not to buy a particular thing and the study of factors which influence their advise/opinion.
Consumer behaviour is an art and a science, economics, psychology, sociology. The study
of consumer behaviour envelops all these and more. Be it a housewife buying a tube of
tooth paste, an executive buying a tie, a school kid buying a pen or a multi-million dollar
corporation buying heavy capital equipment, the process of buying is complex and, at
times, intriguing. The consumer buying process is influenced by the consumers financial
position, personality, tastes, preferences, reference groups, social standing, and even the
economic sentiment that is dictated by the status of the economy.
Understanding consumers for brand building

The success of a brand is dictated by its acceptance by consumers and consumer
acceptance is dependent on whether or not the brand understands the consumer needs and
fulfils them consistently. Brand building is very important for retaining the customers.
When a brand is being launched, it is very important to understand the consumers and
figure out what will attract them to the brand.
If it is an established brand that is growing at a slow rate relative to the market,
understanding consumers will help the brand to rejuvenate itself, with a new variant, or a
new version.
Just as the consumer puts a face to an organization by using the brand as the recognition
device, it is the responsibility of the organization to recognize its consumers. The
organization should know who the regular users of the brand are? Who are the lapsed
users of the brand? Why the users are continuing to use the brand and why the lapsed
consumers have stopped using the brand?

Understanding consumers has to start and end with a series of questions:
Who are the consumers for the brand?
Why should they buy it?
When will they buy it?
Where will they buy it from?
How often will they buy it?
How much will they pay for it?
Whom will they consult for advice?
What are their beliefs about the product category?
What are the other products that serve the same purpose?
What is the share of this product category in solving the problem?
What are their attitudes towards the brand?
Why are some consumers never using the brand?
Why are some consumers using the brand regularly?
Economics
Economic theory talks about the producers of goods and consumers of goods. A
manufacturer makes consumption goods at a price and offers them to consumers at a
price. The consumers perceive value in the goods and are willing to pay a particular price
for the goods. Economic theory states that lower the price, higher the demand. But since
the manufacturer is trying to maximize his profits, the demand-supply situation arrives at
an equilibrium position. The economic theory of consumption gets more interesting as the
number of manufacturers increases and there is competition amongst them for the
consumers wallet. Economic theory treats consumers as purely rational beings.
P
R
DEMAND
I
C
E
QUANTITY
Buying behaviour
Consumer will buy whatever needed by him. But whatever he buys depends on some
factors. The consumer buying is based on a particular behaviour, which if predicted helps
the marketer to market his products thereby increasing the profits. This buying behaviour
can be explained in the following manner:
Buying
Behaviour
Ability
Opportunity
*
Motivation
It is very important for marketers to understand consumer-buying behaviour because that

is the only possibility to offer greater satisfaction for the consumer. Although there
remains a certain amount of consumer dissatisfaction, the reason for this is that some
marketers still are not consumer oriented and do not regard customer satisfaction as a
primary objective.
Another problem is that the tools for analyzing consumer behaviour are not very precise,
so it is impossible for marketers to determine what is highly satisfying to buyers.
If a marketer can identify consumer buyer behaviour, he or she will be in a better position
to target products and services at them. Buyer behaviour is focused upon the needs of
individuals, groups and organizations.
Buying decision
For some purchases, a consumer will spend very little time considering the purchase itself
before making the decision to buy e.g. buying a roll of selotape. However, in other cases,
consumers will ask the opinions of other people before making their purchase decision.
Hence, marketers are always interested in learning which people are likely to influence
the purchase decisions of a typical consumer in a target group. For example, if a member
of your family is considering attending college, then it is unlikely that they will decide
which college to attend without first discussing the matter with several people. The
opinions of parents, siblings, friends, teachers, professional acquaintances, etc. will all
have a certain degree of influence over the persons final decision. Identifying the key
influencers is important. Companies may be able to target some forms of promotional
activity at the influencers, so that they in turn will speak favourably about the companys
products/services to the actual purchaser or user.
POTENTIAL INFLUENCES ON CONSUMER BUYING

BEHAVIOUR
Consumers are constantly being bombarded with marketing information and promotional
messages. These messages could be about new product launches, special product
promotions, and low-price offers. These appear everywhere from television
advertisements to web site banners. Consumers do not retain much of this marketing
information. However, when a promotional message is targeted to a specific group of
consumers, it can prove very effective indeed. This is because the marketing message has
been developed to appeal specifically to people in target group of consumers. Further
more the marketing message will have been transmitted using promotional methods that
these consumers have access to e.g. the Internet, T.V., etc.
Before developing a marketing access, a company should first determine the likely
influence on a potential consumer.
The behaviour of consumer is dependent on a number of factors, which may be economic
or non-economic factors and are dependent upon economic factors such as income, price,
psychology, sociology, culture, and climate. Therefore the study is dependent upon all
these sciences and consumer behaviour scientists study it through research and they
believe that behaviour can be influenced which has been proved by actual sales
promotion of a large number of products. However there is dispute whether customer
should be influenced or not and what methods should be applied to influence him. In
certain cases wrong statements are made that may influence the buying behaviour. For
instance, producers of certain face creams advertise that with usage of their creams,
complexion will become fair but actually it does not happen. There are ads for removing
baldness by using certain oils or creams, but this does not happen actually.
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The main factors that influence buying behaviour are as follows:

1. Economic factors:
Price
Income
Distribution of income
Competition with substitutes
Utility
Consumer preferences
2. Social factors:
Culture
Attitude of society
Social values
Life style
Personality
Size of family
Education
Health standards
3. Psychology
It decides the personality, taste, attitudes of individuals or groups, lifestyle, preferences
especially on occasions like marriage. The demonstration influence is also dependent
upon psychology of an individual.
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4. Anthropology and Geography

Climate, region, history all affect consumer behaviour. In hot countries like India, certain
products, which keep us cool like squashes, sarbats, are demanded, but they certainly
have no demand in cold regions. The dress is also influenced by climate along with other
factors. Culture is also influenced by climate.
5. Technology
In case of equipments, whether for consumer use or industrial use, is affected by
technological innovations and features. But it is not confined to durable goods only. Even
in case of perishable goods the shelf life etc are determined by technological
developments. Innovations and introduction of new products also depend upon
technological change.
6. Situational influences
Purchase task - who are you buying for?
Social surroundings - who are you shopping with?
Physical surroundings - where are you shopping?
Temporal factors - how much time do you have to shop?
Antecedent states
What kind of mood are you in?
Have you just been paid?
Do you shop for status or self-gratification?
7. Others
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This includes knowledge technical or otherwise and information.
Government decisions, laws, distribution policies have also big effect on consumer
behaviour. All these factors are studied by consumer behaviour scientists and then they
decide what production and marketing strategy should be adopted to develop a particular
product, change the existing product and what pricing and marketing mix should be used
to attract more customers towards the product or service to optimize sales and profits.
MNCs and few big companies have ignored except the consumer behaviour study in
India. It is because till recently say upto the beginning of 90s there was sellers market
and anything could be sold. Therefore hardly any attention was paid to the consumer. For
instance, Hindustan Motors continued to produce the same car for decades till Maruti
appeared on the arena. But with the competition emerging many cars, refrigerators, TVs
and many items appeared on the scene. This resulted into the study of consumer
behaviour.
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Influence of attitudes on buying behaviour

Consumer characteristics like personality, lifestyles and attitudes, provide marketers with
a fuller understanding of consumer behaviour than do demographics alone. To understand
consumer attitudes, marketers need to know how consumers develop beliefs about and
preferences for brands based on the information they have processed. These beliefs and
preferences define consumers attitudes towards a brand.
Lifestyle is considered to be one of the most popular concepts in marketing as a way of
understanding consumer behaviour. Attitudes, interests and opinions of consumers
measure lifestyles.
Nature of consumer attitudes
Marketers need to know what are consumers likes and dislikes. In simple explanation,
these likes and dislikes are favourable or unfavourable attitudes. Attitudes can also be
defined as learned predispositions to respond to an object or class of objects in a
consistently favourable or unfavourable way. This means attitudes towards brands are
consumers learned tendencies to evaluate brands in a consistently favourable or
unfavourable way.
Attitudes help us understanding, why consumers do or do not buy a particular product
from a certain store. They are used for judging the effectiveness of marketing activities,
for evaluating marketing actions ever before they are implemented within the market
place.
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Three components of Attitudes:

Brand beliefs, evaluations and intentions to buy define the three components of attitudes
as shown below
Brand
Beliefs
Evaluations
Intentions
These are linked to the main three components of attitudes. Brand beliefs are the
cogniting (thinking) component of attitudes, brand evaluations, the affecting component
and intention to buy, the conative component. This linkage gives the high involvement
hierarchy of effects, brand beliefs influence evaluation, which influence intention to buy.
All these components are linked to behaviour.
There are important predicting and diagnostic differences among three components and
measures when prediction is of prime concern then behavioural intention measures are
most appropriate, since they offer the greatest predictive power, but are limited in their
diagnostic power. This is basically because of their inability to reveal why consumers
intend.
For example, consumer does not want to shop from a particular store for a number of
reasons. Intention measures do not reveal these reasons like convenient shopping hours.
Therefore, reasons for consumers attitudes and intention can be known by measuring
beliefs.
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Family influences
Family is an important influence on purchase decisions. Bonnet and Kassarjian say
Attitudes towards personal hygiene, preferences for food items etc. are acquired from
parents.
Peer group influences
Researchers say that peer groups are much more likely than advertising to influence
attitudes and purchasing behaviour.
Personality
Personality also affects consumers attitudes. Traits such as aggression, extroversion,
submissiveness or authoritarianism may influence attitudes toward brands and products.
Information and experience
According to learning theory, consumers past experiences influence their brand attitude
and condition their future behaviour. It is seen that brand loyalty will quickly end if brand
does not perform well. Therefore, information and experience also determines attitude.
Role of Direct or Indirect experience
Attitudes are formed as a result of direct contact with the object. Products that fail to
perform as expected can easily lead to negative attitudes. Sometimes, even in absence of
actual experience with an object one can form attitude. For example, many consumers
have never driven Mercedes Benz or spent a vacation in Switzerland, but then also form
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positive attitude for this. Similarly, the consumers can form an attitude by just seeing the
ad that means, they can form the product attitudes.
Attitudes based on direct experience are held with more confidence. This means
consumers form stronger convictions about the product if had an actual direct experience
with it.
These processes that govern attitude formation are very important in order to develop
strategies and activities that will create, reinforce, or modify consumer attitudes.
Attitude -Toward the Ad models
In todays scenario, where half of the business if fetched alone through advertising, the
need for understanding the impact of advertising on consumer attitudes toward particular
products or brands has increased. Advertisers have paid a considerable attention in
developing attitude toward the ad model.
The consumers form various judgements and feelings as and when they are exposed to an
ad. These judgements and feelings in turn affect the consumers attitude toward the ad
and beliefs about the brand acquired from exposure to the ad. Finally, consumers attitude
towards the ad and beliefs about the brand for his/her attitude the brand.
The model says that to assess consumers attitude towards an ad it is important to
distinguish between cognitive evaluations of the ad (i.e. whether it is informative or
humorous) and affective responses toward the ad (i.e. feelings like sense of fear, or smile,
or laughter, etc.) and also measures them separately.
According to this model, researcher suggests that the feelings conveyed by an ad not only
influence the attitude toward the ad but also affect the consumers evaluations of the
brand and also the attitude towards the brand. However, if the gap appears after exposure
of an ad (around one week) the positive effect of a liked ad an the attitude towards a
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brand may change. This usually happens when the purchase order is postponed or
delayed by the consumer after an exposure of ad.
Researchers say that both positive and negative feelings toward tend to exist side by side
where both affect attitude uniquely. So, in this wide variety of feelings (both positive and
negative) are to be assessed to study the influence of ad exposure.
It is also seen and tested through research that the consumers attitude toward the ad for a
novel product (new one) will have a stronger impact on brand attitude and purchase
intention than for a familiar product. Researchers also found that beliefs about a brand
that result from ad exposure play much stronger role in determining attitudes towards the
brand for a familiar product. So, in this research nature of attitude object is used in
assessing the potential impact of advertising exposure.
It is observed that attitude towards a specific type of advertising (eg. comparative) may
have some impact on the attitude toward a specific ad (eg. liking or disliking it). But
attitudes toward ads in general seem to have little impact on the attitude toward a specific
ad.
Can attitudes be changed?
Formation of attitudes also explains how to change the attitudes but some other factors
are involved. The research shows that
Exposure
Merely, exposing a subject to stimulus (product/service etc) may be enough for the
person to form positive attitudes towards the stimulus. Therefore in low involvement
products like detergents, the most heavily advertised brands would become most familiar
to the consumers, so most likely to be picked off the supermarket shelf.
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Effective communication
For changing the attitudes of consumers it is essential to treat the process of change as a
form of information processing that is being subjected to persuasive communications. So,
advertisers need to use persuasive communications in their advertisement.
Cognitive dissonance
According to this, all people strive to be consistent, if they hold two psychologically
inconsistent beliefs / ideas / values / attitudes at the same time or if their behaviour
contradicts these cognitions, they will find a way of reducing tension. At this moment,
marketer can come up with the benefits of the product, so the consumer can reduce
tension by buying that product and dissonance stage ends.
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Influence of personality on buying behaviour

Personality has many meanings. In consumer studies, personality is defined as consistent
responses to environmental stimuli or we can also say patterns of behaviour that are
consistent and enduring. An individuals personality helps marketer to describe consumer
segments as it provides for orderly and coherantly related experiences and behaviour.
Personality characteristic may be a basis for product positioning. For example, one
segment of the market may die because they want to stick to the group norms and
therefore uses diet product. In contest another segment is on diet because of internal need.
Therefore, companys positioning strategies will be different for both. For the first
segment, they will portray group approval as a result of product use, whereas positioning
for the second segment would portray individual achievement.
Marketers have used three personality theories to describe consumers:
1. Psychoanalytic theory or Freuds theory.
2. Sociopsychological theory.
3. Trait theory.
Psychoanalytical theory
This theory was given by Sigmund Freud. This theory stresses the unconscious nature of
personality as a result of childhood conflicts. According to this theory, the human
personality system consists of the id; ego, superego and conflicts are derived from these
three components.
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Researchers who apply this theory to marketing believe that id and superego operate to
create unconscious motives for purchasing certain products. Although consumers are
primarily unaware of their true reasons for buying what they buy. Focus of marketers is
on developing means to incomes these unconscious motives and applying
psychoanalytical theory to marketing is known as motivational research.
Socio-psychological theory
According to this theory, individual and society are interlinked. This theory disagrees
with Freuds contention. It is also called as Neo-Freudian theory. Researchers believe that
social relationships are fundamental to the formation and development of personality.
Karen Horney was a social theorist. She believed that personality is developed as an
individual learns to cope with basic anxieties that stems up from parent child
relationships. She proposed that individuals could be classified into three personality
groups:
Complaint Those individuals who moved toward others. They desire to be loved,
wanted and appreciated.
Aggressive Those individuals who move against others. They desire to excel and win
admiration.
Detached Those individuals who move away from others. They desire independence,
self-sufficiency and freedom from obligations.
Trait theory
This theory has been most widely used for measuring personality because it is a
quantitative approach. This theory states that an individuals personality is composed of
definite attributes called trait. A trait can be defined as any distinguishable, relatively
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enduring way in which one individual differs from another. For example, sociability
relaxed style, amount of internal control.
Trait theorists construct personality inventories and ask respondents to respond to many
items by agreeing or disagreeing with certain statements or expressing likes or dislikes
for certain situations or types of people. These items are then are statistically analyzed
and reduced to a few personality dimensions.
Single trait personality tests, which measure just one trait, such as self-confidence, are
increasingly being developed for use in consumer behaviour studies. These personality
tests can be designed according to the need to measure traits such as consumer
innovativeness, consumer susceptibility to inter personal influence, consumer materialism
and consumer ethnocentrism.
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Personal values (self concept or self images)

Why do some people make their consumption decisions differently than others?
Personality can be one reason and another can be personal values. Personal values ask the
question Is this product for me? These are particularly important in the needrecognition stage of consumer decision-making. Values are also used by consumers while
evaluating brands, as Is this brand for me?
Values are basically ends people seek in their lives. Marketing often provides the
means to reach these ends. Values are defined as an enduring belief that a specific mode
of conduct or end-state of existence is personally or socially preferable to an opposite or
converse mode of conduct or End State of existence. Values are relatively stable but not
completely static beliefs about what a person should do. Values are concerned with the
goals and the ways of behaving to obtain goals.
Values serve as the invisible outline for the development of many of the other
components of the culture the ideas, customs, traditions, myths, rituals, laws and
material artifacts. In order to recognize the differences among consumers in different
cultures and sub-cultures, marketers must be able to identify the values that define the
culture and their impact on consumer behaviour.
Self - Concept means the desire to attain self consistency and the desire to enhance
ones self-esteem. Attaining self-consistency means that individuals will act in
accordance with their concept of actual self. According to the marketer actual self means
consumers purchases are influenced by the image they have of themselves. They buy
products that they perceive as similar to their self-concept. Ideal selfs concept is related
to ones self-esteem. According to the marketer, a person who is dissatisfied with one-self
will try and purchase products that could enhance their self-esteem. For example, a
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woman who is confident, efficient, modern may buy a different type of perfume or shop
at different stores than a woman who would like to be more warm and attractive.
It is not always that our self-image influences the products we choose but also the
products we choose frequently influence our self-image. The products purchased with
symbolic value say something about us and also what we feel about ourselves. Extended
self in simple term means we are what we wear, we are what we use. This means it
emphasizes the interaction between individuals and the symbols of environment. This
shows that consumers buy products for their symbolic value in enhancing their selfconcept.
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Life style concept

Lifestyle is another factor, which influences consumer behaviour.
Lifestyle can be defined as patterns, in which people live and spend time and money. It is
one of the most popular concepts in marketing for understanding consumer behaviour and
is more comprehensive and more useful than either personality or values. Marketers try to
relate the product to lifestyle, often through advertising, to the everyday experiences of
the target market.
Lifestyle can also be defined as a mode of living that is identified by how people spend
their time (activities), what they consider important in their environment (interests) and
what they think of themselves and the world around them (opinions). This means lifestyle
reflects a persons activities, interests and opinions.
Consumer psychographics
Psychographics is commonly known as study of lifestyle of consumers. It plays an
important part in consumer behaviour and helps in the promotion of those products and
services which are related to items of personal care, fashion, automobiles, telephonic
services, etc. in a country like India where lifestyle differs widely from region to region,
the study of consumer psychographic is of great significance to the marketer. Say for
instance, what is demanded or liked in Bengal may not be liked in Maharashtra.
Psychographic is the study of lifestyle of consumers based on their activities, interests
and opinions. The study of consumer psychographics helps to promote sales especially of
those products, which relates to personal comforts, personal care, fashion, etc.
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In a country like India consumer psychographic is of great significance in developing
products and services, segmenting markets and promoting sales. Since the lifestyle
depends on large number of factors the research also uses demographic and both are
interdependent and take the help of each other.
The psychographic research also takes the help of motivational research to find out why
people have particular lifestyle and with help of motivational research tries to change the
psychology of consumers and thus makes an effort to change their lifestyle which become
basis of action. The activities and interest of consumers help to develop products for
different segments and modify them according to the opinion of consumers surveyed. The
help of psychographic is also taken to change the opinion and conduct opinion surveys on
social, economic, political and cultural issues.
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Influence of group dynamics / peer groups / consumer reference groups

Group dynamics means how individual form groups, and how one persons purchasing
influences the other individuals actions.
A group may be defined as two or more people who interact to accomplish either
individual or mutual goals.
This means that there can be an intimate group like two neighbours going out for
shopping, or a formal group like housing association members who are more concerned
about schools, parks, etc. in their vicinity.
Consumer Relevant Groups
The family
It is seen, that from childhood an individuals needs and consumption decisions are
influenced by his/her family. Importance of family in various decisions is based on
frequency of contact that individual has with other family members.
Friendship Groups
The immediate group, which an individual forms after he/she moves out from the house,
is friendship group. Friendships are also sign of maturity and independence as they
represent a breaking away from the family and forming social ties with the outside world.
After family, friends most likely influence an individuals purchase decisions. Friends
fulfill a wide range of needs like they provide companionship, security and opportunity to
discuss the matter, which they cant with the family members.
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Friends opinions and preferences are very important for influencing an individuals
behaviour in determining the products or brands he/she actually selects.
Formal Social Groups
Formal social groups, as the name says, lack intimate relationship and they serve different
function for an individual. Person joins this group to fulfill goals like making new
friends, pursuing special interest, etc. This type of group interests marketers because
often consume products together, can discuss products or brand or stores informally with
other members and sometimes can even copy the consumption behaviour of other
members whom they admire.
Consumer relevant group could be any person or any group that a consumer may ask for
to help him / her buying a particular product. Many a times, consumers are confused in
buying some products. These products could be of same utility, same price, different
brand, etc. At such times, consumer does not really know what to buy which brand to buy
and at what price to buy. So, here comes the need for consumer relevant groups.
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Influence of social and economic classes

Consumer behaviour is influenced by environment in which one lives. A number of
factors such as culture, social class, personal influences, family, religion and his situation
affect the decision process. Amongst them social class has great impact on consumer
behaviour.
Social class can be described as divisions within society composed of individuals
sharing similar values, interest and behaviour.
Two-category social class scheme divides the society in two classes based on profession
or level of income i.e.
Blue collar (workers) and white collar (office jobs) understand the buying behaviour of
consumers, occupation of people is to be studied as people of same profession are
expected to behave in a similar manner. All chartered accountants, all lawyers, all
architects behave similarly. However, they may not be having same outlook. For
example, the income of a lawyer varies between Rs.5000 per month to Rs.30 lakh per
month. A doctor may earn Rs.100 per day to Rs.10000 per day. These income differences
make big differences in their behaviour as a consumer.
Classification of social class
Occupation
To in one class marketer may not be able to get much advantage in marketing. Therefore
along with occupation there is further division based on income. Persons of some
occupation are therefore subdivided into various classes based on income.
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Education
The level of education also affects the behaviour as a consumer. An illiterate man has no
interest in newspapers; books and magazines but people with high education need these
products regularly. In the matter of other products, consumption also differs widely,
therefore sometimes it is desirable to classify as per level of education.
Income
The income of an individual or family plays an important role in his behaviour as a
consumer. The demand of products for rich, high income, middle income, low income
and poor differs widely and therefore it is most important criteria for social classification.
But people even in same bracket behave differently based on many other factors such as
place of their residence (urban, rural) or even state. Even people with same education,
occupation and income behave differently in different regions due to cultural factors,
climate, traditions, social customs, etc.
Religion
Religion is another factor, which influences the behaviour, as a consumer too
consumption of certain products is tobacco in some religion but permitted in other
irrespective of other factors. Jains, Brahmins, Agrawals generally will not eat meat but it
is openly consumed by many other classes. Sikhs will not consume tobacco and
cigarettes. Not only in the matter of eating religion also affects consumption in other
ways. People of different religion have different festivals when they are gee and happy
and buy new things for self, family and for gifting. These factors affect their behaviour as
a consumer and are very important for marketer.
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Life style of various social classes

The life style that is consumer behaviour of various social classes differs widely. A person
in lowest class is able to buy only the bare minimum requirements of life. In India and
some other countries there are people living below the poverty line. This class is not able
to meet even basic minimum and live on the many of state and/or social organization for
their shelter, education of children and meeting their day-to-day requirements. On the
other extreme there are rich people either because of historical factors like zamindars and
the like. But researchers have established that lifestyle of one social class in terms of
attitude towards life; activities, behaviour and beliefs tend to be similar. On this basis
researchers segregate them in different classes.
The decision process of individuals, families and classes are influenced by a number of
factors such as culture, social class, personal influence, region, religion, level of income
and profession, etc. In society there are divisions based on their values, interests and
behaviours and people of homogenous natures, values, culture, interest and religion often
are considered social class. But most of the marketers have measured social class on their
economic status, profession and income. They do not consider religion, region and other
social factors very important. But generally there is an agreement that social classes are
very broad groupings of individuals which hold roughly similar status levels in the
society.
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Influence of family in decision-making

Normally what one understands from family is husband, wife and their children living
with them in western civilization. But in India the family is much more extended and
includes all those persons who are related by blood, marriage or adoption and reside
together but often does not include those who are residing but have close blood relations.
The role and functions of the family depends upon education, lifestyle, family income,
etc. The basic functions of family are economic well being of members, provide
emotional support, establish suitable life style for the family and ensure proper
socialization of family members, which includes consumer socialization.
Regarding consumer decisions there are four types of parents namely authoritarian
parents, reflecting parents, democratic parents and permissive parents. The decisionmaking depends to a great extent on item to be purchased, its usage and the price.
32
BUYER BEHAVIOUR
Buyer behaviour model
How does a consumer make a purchase decision? What are the factors that influence this
process? How do these factors interact among themselves?
To explain in a very simple manner, say a boy feels thirsty. He wants a drink of water.
While grabbing a bottle of water, his eyes fall on the bottle of Pepsi. Will he pick the
Pepsi? What made his mother stock Pepsi at home? Was it meant for the kid or was it
meant for the guests arriving at 4 p.m.
A large amount of work has been done in the area of buyer behaviour. Models have been
developed to explain the various factors that influence purchase behaviour.
At the heart of any buyer behaviour model is the buying process:
Need recognition
Information research
Evaluation of alternatives
Selection of Brand and Outlet
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Post-purchase Reactions
The first stage refers to the need recognition. This is basically what the consumer wants.
What does the consumer needs? In the earlier example in can be explained as the need for
quenching thirst.
The second stage refers to the information search. This basically involves your network,
your sources. This will include what all drinks are available for quenching your thirst.
This will include water, soft drinks, sherbets, etc.
The third stage refers to evaluation of alternatives. This will include all the alternatives
you have and which of them is most promising in terms of your needs.
The fourth stage refers to selection of Brand and Outlet. This is basically out of the
alternatives which brand have you selected to go in for and out of the various outlets
available, from where you are planning to buy your selected product. This also includes
buying the product.
The fifth or the last stage is the Post-purchase Reactions. This basically includes your
reaction towards the product you purchased. This stage will show whether you are
satisfied with the product or not.
34
How to predict buyer behaviour

This is a very important question for marketers and it has been the objective of most
personality research. Psychologists and other behavioural scientists have theorized that
personality characteristics should predict brand or store preference and other types of
buyers activity. We can classify them into two major categories:
1. Consumer innovativeness and their susceptibility to interpersonal influence.
2. Cognitive personality factors and interrelated consumption and possession traits.
Consumer innovativeness and their susceptibility to interpersonal influence
There are various personality traits that have helped in differentiating between consumer
innovator and non-innovators.
Consumer innovativeness means now receptive consumers are to new products / services
so that both consumers and marketers can be benefited from the right innovation. For
measuring the researchers have designed certain instruments because personality trait
measure provides insights into the nature of consumers willingness to innovate.
Dogmatic persons are those who display rigidity towards the unfamiliar and toward
information that is contrary to their own established beliefs. Consumers who are low in
dogmatism are more likely to prefer innovative products to established alternatives. In
contrast, highly dogmatic consumers are more likely to choose established rather than
innovative product alternatives.
Variety novelty seeking are of many types: exploratory purchase behaviour (brand
switchers for experiencing new brands), vicarious exploration (where the consumer
stores about the new information), and use innovativeness i.e. where the consumer uses
already adopted product on a new or novel way.
35

Consumer researchers are also interested in knowing the traits of the consumers who are
likely to be responsive to the influence of others. According to this theory, there are three
types of interpersonal influence:
Information influence the tendency to accept information from others as

evidence about reality.
Value expressive influence the consumers desire to enhance their standing

with others by being similar to them.
Utilitarian influence the consumers confirms with the wishes of others in order
to obtain a reward or avoid punishment.
Cognitive Personality factors and interrelated consumption and possession

traits
It is very interesting for the researchers to know how cognitive personality factors
influence various aspects of consumer behaviour. There are two types of cognitive
personality traits.
Visualizers v/s verbalizers Visualizers are those who prefer visual information
and products that stress the visual and verbalizers are those who prefer written or
verbal information and products.
Need for Cognition (NC) Need for Cognition measures a persons craving for
or enjoyment of thinking. It is seen through research that consumers who are high
in NC are more likely to see that part of an ad first that is rich in product related
information are unresponsive to the contractual or peripheral aspects of the ad,
such as the model or the situation in which the product is used.
36

The failure of personality measures to predict consumer behaviour has given rise to new
approaches. First, is to study the personality of brands rather than of people. Second is to
develop broader behavioural concepts that are likely to be better targets for market
segmentation.
Consumers not only ascribe personality traits to products or services, they also tend to
associate personality factors with specific colours. For example, yellow is associated with
novelty and black means sophistication. Therefore, wishing to create a sophisticated
personal or a premium image use labeling or packaging that is primarily black. In some
cases, various or even brands are associated with a specific colour with personality - like
connotations. For instance, Coco-cola is associated with red, which connotes excitement.
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Decision-making
When one decides to buy a particular product it is an economic decision and expectations
play an important role. One expects best of performance, durability, and dependability
from a product or a service. Expectancy can be defined as a monetary belief concerning
the likelihood that a particular act will be followed by a particular outcome. Act is the
decision to buy a particular service or product and outcome is satisfaction or
dissatisfaction from use/consumption of purchased products or service. Finally there are a
number of alternatives for each product or service. The consumer has to decide which one
should be bought. In case of consumer non-durables choice is immense. Be it shampoo,
soap, wheat flour, cosmetics, garments or consumer durables like car, refrigerator,
washing machine, T.V., computer or something else or services like restaurant, finance,
doctor or others having long life, degree of involvement is high. In case of short life
FMCG the involvement is low and the degree of involvement is medium in case of items
which have medium life and have to be replaced after some time.
The degree of involvement depends upon the level of knowledge, information,
psychology, culture and social system for the same product in different settings. The
involvements are ego involvement, commitment, communication, involvement, purchase
importance and extent of information research.
The decision making process is a process where by a buyer decides to purchase a
particular product out of various available alternatives. The buyer expects best of
performance, durability and dependability, which he evaluates from a product. The
process of selection and final selection is known as buying decision making.
38

Consumer buyer behaviour segments products into four quadrants:
High involvement-think
This actually makes the consumer to think before buying. For buying these
products the consumer has to do a bit of thinking as the products are expensive
and can be bought once and not again and again. This will involve the economic
side. Examples could be cars, T.V., camera, etc.
High involvement-feel
For buying products included in this category, the consumer has to actually feel
the importance or the need of the product. This will involve the psychological
side. Examples could be baby food, cooking oil, special skin creams, etc.
Low involvement-think
For buying the products included in this category, a consumer does not have to
think much. These products are needed in daily life. These products are
responsive i.e. you dont have an option, if you have to buy you will. Examples
would be detergents, headache pills, engine oil, etc.
Low involvement-feel
These products are basically there to satisfy the needs and wants of a consumer.
For buying these products, a consumer does not have to think much. Examples
included in this category would be ice creams, soft drinks, etc.
39

High versus Low Involvement Problem-Solving
High Involvement purchase occasions, require extensive problem-solving.
Items can be expensive.
Have serious personal consequences.
Reflect ones social image.
These occasions typically involve:
Extensive information search, identification and evaluation of alternatives.
Consideration of several products attributes and brands.
The formation of attitudes.
Word-of-mouth. i.e. communication.
E.g. the purchase of an automobile or stereo system.
Low Involvement purchase occasions, require routine problem solving, typically involve
little information search or consideration of various brands, other than price. Items may
be purchased frequently or out of habit, they usually dont involve any personal
consequences. They tend to be privately consumed. E.g. the purchase of soap or
toothpaste.
Decision making process
A consumer can pass through a number of stages when making a purchase decision. In
some buying situations, the process moves very quickly, such as in the repeat purchasing
of a family brand of convenience product. However, in other situations each stage of the
consumer buying process can be clearly observed.
40
The stages that a consumer typically passes through are as follows:

Awareness
Interest in product/service
Evaluation
Trial when allowed
Rejection/purchase
Product evaluation
Final adoption or rejection
No future purchase
Repeat purchase in case of FMCG
41
The decision-making process starts by awareness. This is whether you are aware about
the product or not. Take the case of a shampoo. For instance there are hundreds of
shampoos available in the Indian market but unless the consumer is aware about its
performance, the brand is not considered. Unless he knows about the availability of the
product (in this case take a shampoo) of a particular brand, it will not enter into consumer
decision-making. Therefore, it is the function of the marketer to make the prospective
customers to know about a product i.e. consumer must be informed about its availability.
The next stage is your interest in the product. This can be there or can be developed only
if you very well know the utility of the product i.e. for what all purposes the product can
be used. Say if someone has to decide to buy a car, he must not restrict his choice to a
few well-known brands, he must show interest in the new brands also. This is equally
applicable to any other product also. If there are 10/15 shampoo brands in the market all
of them should interest the customer, so that he may evaluate them.
Evaluation in certain items can be done by the trial of the product. For instance, these
days most car producers allow trial run and one can evaluate the automobile by trial run.
In case of certain consumer items like shampoos, washing powders, etc. small packets are
available. The consumer before making the purchase decision can buy small packs for
trial.
After trial or evaluation of its attributes the consumer may either purchase or reject the
product or the service. If the consumer decides to purchase the product, he gets first hand
experience and the product can be evaluated once again. For example, if a consumer
purchases a shampoo and likes it, he will have repeat purchase. In case of durables like
refrigerator, T.V., etc. if one finds the product as per his expectations; he will not only
adopt it but will recommend it to others as well. If after the use the product is not found
satisfactory it will not only be rejected but the experience will be narrated to others also.
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These stages can be clearly demonstrated in the following example:

The consumer recognizes that they wish to make a purchase, such as purchasing a
family vacation.
The consumer starts to search for information about potential holiday
destinations, availability of hotel accommodations, flight schedules, holiday
activity for the family, etc. This information may involve talking to friends and
family, obtaining holiday brochures, surfing the Internet, etc.
The consumer evaluates the alternative vacation possibilities.
The consumer makes a final decision about which vacation alternative to
purchase.
The consumer purchases the vacation alternative. This may be in the form of
single purchase through a travel agent or may consist of several purchases such as
hotel accommodation, airline tickets, etc.
The consumer experiences the vacation. If the consumer and his/her family are
satisfied with the vacation, they may decide to take this vacation again or
recommend it to other family members or friends. If the vacation experience has
been an unhappy one, then the negative aspects of the vacation may be related to
family and friends, discouraging them from making the same purchases.
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Purchase decisions for FMCG

Alternative 1
Alternative 2
To purchase and consume ones
To purchase new brand which
usual tried brand.
is well known.
To depend on same service provider
To try another Service
i.e. Hotel, Doctor, Hospital, Courier
provider who has reputation.
service, Insurance Company

To purchase a new brand
To purchase usual tried brand.
To purchase on sale brand
Not to purchase on sale brand.
To buy on discount sales
Not to buy on discount sales.
To buy national brand
To buy store brand.
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Purchase decisions for Consumer Durables

Alternative 1
Buy national brand with highest
Alternative 2
Buy cheap brand
market share
Buy new innovative product
Buy only well known brand
Buy on the basis of Companys
Buy new companys items
reputation
Buy international brands
Buy domestic known brands
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PURCHASES
Methods of purchases
The method of purchase depends upon the product to be purchased and purchase
intentions. The purchases can be fully planned, partially planned or unplanned.
Fully planned purchases
Most of the purchases of consumer durables like T.V., cars, refrigerators, cooking range
are fully planned. Similarly purchases of durables like house property, insurance policy
are fully planned. They are normally purchased after proper evaluation of the product. In
these cases consumer decides in advance what product model and what brand he will buy.
The author survey in Delhi suggests that 90 percent of purchases of durables and
consumer durables are fully planned.
The next category of purchases is daily consumption items for which a list of products to
be purchased is decided before visiting a shop or a store i.e. shopping list is decided
before stepping out of the house. But very often the brand is decided at the shop after
looking around; only in few items the brand is also predetermined but the decision
sometimes is changed after visiting the shop/store on the recommendation of the
retailer/shop keeper or by seeing the product.
Partially planned purchases
In this category those items fall which consumer intents to buy but does not make a
shopping list before visiting the store/shop. In this group often the decision on the
quantity to be purchased is decided by seeing the prices, the display of packaging and the
mood of the consumer at the time of purchase. For instance, a consumer may decide
before visit to the shop that what items he wants to purchase like soap, tea, wheat flour,
46

vegetable oil but the quantity and the brand is decided at the store. If consumer finds that
there are discounts or sales promotion schemes, he may decide to buy larger quantities
than otherwise intended.
Unplanned purchases
Those purchases, which are made spontaneously without prior planning, are called
unplanned purchases. In such items advertisements, display, discounts, sales promotion
schemes, free coupons, lottery gifts, etc. induce a consumer to purchase them when
otherwise he has no intention to buy. Home purchases from sales persons are largely of
this nature as well as certain purchases at the store. But study done in Delhi suggest that
only 10 percent of purchases fall in this group.
Unplanned purchases occur when a consumer experiences a sudden, often powerful and
persistent urge to buy something immediately. The impulse to buy is hedonically complex
and may stimulate emotional conflict. Also, impulse buying is prone to occur with
diminished regard to consequences. For example, a person from South India visits Delhi
in December/January unaware of weather. When after arrival in Delhi he feels cold, he is
forced to buy a woollen jacket. A person from Delhi when visits Kerela in July/August
without knowing that it rains heavily there all the time, he is forced to buy an umbrella or
a raincoat. This is also situational influence on purchase decision.
When one visits a store and sees that certain products are at 80 percent discount or one is
free with one or there is a scope of winning a lottery the consumer puts aside shopping
list and purchases such a product, thinking that it is bargain purchase and its advantage
must be taken. This is spontaneous purchase.
Sometimes one is influenced by sudden excitement and stimulation to purchase a product
suddenly. When one sees a store and finds a product, which he was urging to buy for,
long immediately buys it, thinking that it may not be available when actually he will need
it.
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When one visits a fair, exhibition or mela almost 100 percent of purchases are unplanned.
People in India visit many fairs and melas where they go with the intention to buy certain
goods but neither have they decided in advance their purchase basket nor they have
shopping list. If they find something attractive to purchase either price wise, quality wise
or product wise or they see some new product purchases are made spontaneously without
any prior plan.
The unplanned purchases can be under following circumstances:
Spontaneous.
Power compulsion and intensity to acquire a product.
Excitement and stimulation.
Situational influence.
Purchase in fairs, exhibitions.
The survey of buyers in Delhi suggests that only 60-70 percent of purchases are planned,
23-30 percent of purchases are partially planned and 10-20 percent of purchases are
unplanned.
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Process of purchases
Purchases can be made in the following ways:
Home shopping salesman, hawkers.
Direct mail.
E-commerce/telemarketing.
Visiting a shop or store or showroom.
Home shopping
There was a time when very high percentages of purchases were made through home
shopping. Now in USA and other developed countries the role of home shopping has very
much reduced and now does not account for more than 10 percent of total purchases.
However, in India such purchases are much higher of the total, especially in rural areas
where shops are few and on them all the products are not available. Therefore when a
hawker or a salesperson visits a house, he induces the consumer to purchase from him.
Many persons specially ladies purchase from them to save time and inconvenience to
visit the market. In order to help consumers to buy sitting at home now many suppliers of
food, drinks, ice-creams, pizza are delivered at home. Such purchases are increasing day
by day and the share of home purchases in the recent years has gone up from 10 percent
in 1999 to 15 percent in 2001 in Delhi as per the survey. But home purchases are of two
types of goods. One those which are branded and well known and other in which brand
does not matter or where it is felt that it is a bargain purchase when sales person of well
known companies make door to door selling for sales promotion. In rural areas home
purchases are also made of products, which are not available on the shop in villages.
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Direct mailing
In Europe, USA and Japan a significant purchases are made through direct mail. In these
system manufacturers, distributors or marketer mails the catalogue to the consumers
giving certain basic details about the product, its price and mode of payment preferred by
the seller. Some customers in USA get lots of such mails everyday. Some of the
consumers study them and place orders but some others discard such mail literature. In
India also some companies are mailing literature to the consumers directly or through
agencies. But most of the consumers do not have faith in such sales and just ignore them.
They are afraid that they may not be cheated with regard to the product or it may be
inferior or may not be dispatched at all. The theory of such marketing is that it eliminates
intermediaries and so consumers get products at cheaper price. But consumers buy them
through mail only if they are well known brands; in other cases one prefers to see the
product. Therefore this system of purchase is not popular in India in spite of renewed
efforts by some companies but it is quite popular in USA.
E-Commerce, Telemarketing
E-commerce is becoming increasingly popular round the globe. Telemarketing is
gradually becoming popular. In this type of sales the marketer gets telephone numbers of
likely consumers and tries to persuade them to buy the particular property, service or
product. Its basic limitation is that most of the people in India do not have telephones and
those who have telephones do not want to talk during office hours; still insurance
companies and banks are trying in a big way.
Retail shop purchases
Though exact figures are not available about purchases at retail shops or departmental
stores, it is estimated that in USA 90 percent of purchases are in stores. In India also the
purchases from shops may be almost same percentage or little lower because in India
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home purchases are more. The retail shops may be traditional shops in the colony or in
the market or there can be departmental stores. In Europe, USA, Japan, Australia, etc in
last few decades the importance of departmental stores in total sales is quite substantial.
In India also in metropolitan cities and in big towns gradually the role of such stores is
increasing specially after globalization, which are visited by upper income group people
or youngsters.
The motivation for shopping in markets and superstores is not just purchases. Many
ladies visit the market for removal of boredom, passing time, recreation and sometimes
even for window shopping for increasing the knowledge about various products and
utilize it later on for actual purchases. It is said that shopping has almost become a way
of life itself for some. This type of habit is declining in USA and Europe because more
and more ladies take to a job. But in India ladies of big families who have little work at
home, have a car at their disposal and shop only for pleasure. Along with shopping they
go to some eating-house specially chat shop. There are many reasons for frequent
shopping such as loneliness, dispelling boredom or hunt shopping to buy something
which may be available cheap I.e. bargain purchases. But there is also a group of
consumers who feel boredom to go to a shop and prefer home shopping; such consumers
are generally non-responsive to marketing efforts and visit the market only when they are
forced to do so but their percentage in population is around 10 percent of the total.
Discount stores
There are certain stores who sell throughout the year at a discount. These stores make
bulk purchases generally from the manufacturers and thus get bulk discount. They keep
only those items, which sell fast and thus streamline inventory management and save on
inventory cost.
These stores have low overhead cost, they do not have innovative shop displays and save
on space; they work in small space and save on rent. These stores generally do not have
air condition shop, nor piped music or fancy light.
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These discount stores offer goods below the price charged by other shops and often
discount is 10-15 percent. In Delhi Economy store works on this principle. These stores
appeal most to the middle class who are price conscious. In Delhi Super Bazaar, a
cooperative store works on this principle. According to recent studies such discount
stores are increasingly becoming popular and so more of them are coming up.
Direct Response Advertisement
The direct is stimulated most by television advertisement for specific products which
generally are not made available in the market. They are innovative products. Besides
television advertisements for such purchases, ads are also given in magazines and
newspapers. This type of buying requires a confidence in the seller and therefore to create
confidence among many such stores advertise that if the product is not found satisfactory,
it can be returned after a week or fortnight of use but cost of return has to be borne by the
buyer. This type of advertisement ahs helped in promoting sales, and sky-shop is one of
the biggest sellers through television advertisement in India. In USA, Home Shopping
Network Inc. was the pioneer in selling through television advertisement.
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Results of purchases
Whatever process and method of purchase is adopted the ultimate objective of a
consumer is to get a satisfaction from the use or consumption of a product, which may be
one or the other as shown below:
Outcome of purchase
Results match
Expectation
Results are
better than
Expectation
Results below
Expectation
Based on experience and results the consumer reconfirms his decision for the failure (if
result matches expectations or are better than expectations) but modifies his decision if he
is not satisfied. The post purchase evaluation by the consumers is important not only for
the consumers for future decisions but they are also equally important and valuable for
the marketer to maintain and expand its sales. There are four purchase results for the
consumer. They are:
First, he learns whether his perception about a product or service was right decision.
53

Secondly, consumer acquires knowledge and information about the product or service,
which will help in future decision making.
Third, he learns whether he is satisfied.
Fourth, about disposition of a product after it has been used.
The post purchase results are also very important for the marketer to help him to maintain
and expand his sales value. If a consumer is satisfied with a product he may normally buy
same brand in future but in order to keep his products ahead of competitors, he is
required to know the reactions of consumers. He has to find out why consumers are
satisfied. And if the consumers are satisfied more than their expectations the marketer has
to maintain his lead. And if the results are below expectations of consumers, he will not
buy the product second time.
In all three circumstances the marketer has to make strategy for future after knowing
consumers satisfaction and dissatisfaction level. There comes the need of market
research.
Consumer response to Dissatisfaction
When consumers are dissatisfied with a product or service, they may respond in one or
more of the following ways:
Take no action.
Discontinue purchasing the product or using a service.
Complain to company.
Complain to consumer court or other bodies setup for the purpose by the industry
/ trade associations or consumer associations.
Engage in negative word of mouth communication to other consumers.
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CASE STUDY
Research Methodology
1. Problem identification
Maricos Objectives:
To determine the market potential and the ways through
which sales of blister pack can be increased.

Market Research Problem: Awareness about parachute blister pack among the
consumers and identification of needs for blister pack purchase.
Objectives
Exploring the market of blister pack.
Which types of consumers are purchasing blister packs?
What are the key factors in buying decision of blister pack?
Whether there is market potential or not for the blister pack?
What are the other substitutes consumers are using for blister pack?
Role of retailers in promotion of blister pack.
2. Type of research
Exploratory Research
The research work was Exploratory in nature and was meant to provide the basic
information required by research objectives. It is a preliminary study and findings can be
further consolidated after detailed conclusive study has been carried out. The major
methods employed in research are survey and observation. The survey method was
followed. This method of obtaining information is based on the questioning of the
55

respondents. Typically, the questioning is structured, meaning some standardization is
imposed on the data collection process.
Advantages
The questionnaire is simple to administer.
Data obtained are reliable because the responses are limited to the alternatives
stated.
Coding analysis and interpretation of data are relatively simple.
Disadvantages
Respondents may be unwilling or unable to provide the desired information.
Respondent may not respond if the desired information is sensitive or personal.
Wording questions properly is not easy.
3. Sampling design process
Target population: The target population about which the inferences are to be
made is consumers of parachute blister pack
Population frame: Retailers.
Sampling frame: Mumbai region
Sampling technique: Judgmental sampling
Sampling size: From whole of Mumbai, 300 consumers and 50 retailers are
covered for which we have nearly contacted 1000 people.
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4. Tools used for research

Tools used for this research are questionnaire and in-depth interview. A brief
questionnaire focused to collect the relevant information was prepared. The respondents
were asked to fill up this questionnaire followed by in-depth interview. The data gathered
through these questionnaires was analyzed using different statistical tools to judge the
buyer behavior and major influencing factors for the purchase of blister pack. For back
up information and more in-depth look data has been collected from retailers regarding
sale and promotional tools for blister pack.
5. Time for completion
The time taken to complete the market survey was 4 weeks. 3 weeks for the consumers
and 1 week for retailers.
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Profile of hair oil industry

Unlike shampoos or hair colors, which are products relatively new to the Indian psyche,
the usage of hair oil is a deeply ingrained habit with Indian consumers. Therefore, this is
one product where the major players do not have to fight either monetary or
psychological barriers to usage. But this does not necessarily mean that being a branded
player in the Rs1, 300 crore hair oils market is easy.
Hair oiling is an age-old traditional habit of Indians. Hair oil is perceived to provide
benefits of nourishment, strengthening hair, faster and better growth and reducing the
problem of falling hair. Some consumers perceive that massaging hair oil has a cooling
impact on the head.
It also has a cosmetic appeal in terms of hair styling, as hair remain straight, soft and
shining after applying oil.
Coconut oil is very popular in the south. In north people use coconut oil as well as some
other oil such as rapeseed, sesame, etc.
Hair oil is primarily used as a pre-wash nourisher. Some people also use hair oil after
bath as a conditioner.
Segmentation
It is very important to segment the target market before selling or marketing your
product. This will make the job of the marketer easier and simpler, as he will be aware
and very clear as to what he has to actually do and decide the strategies thereby.
58

The major positioning platforms for hair oil are purity, hair nourishing and more recently,
non-greasy look. Coconut oil and perfumed oil accounts for about 65% and 35% of
market in volume terms.
Consumer Awareness and Penetration
Hair oil is an everyday habit with about 50% of the population.
Hair oiling, a peculiarly Indian habit, is extremely popular in urban as well as rural India.
Penetration of hair oil is 87% at all India level and is almost evenly distributed in urban
and rural areas. While penetration in urban areas is marginally higher at 90.2%, the same
closely follows at 85.8% in rural areas. In urban areas, penetration is higher in small
towns (0.1-0.5m population) at 91.8% compared to medium and large town where it is
89.5-89.9%. Awareness about hair oil is over 90% in rural as well as urban areas.
Market size
The coconut hair oil market is currently estimated at Rs14bn, 60% of which is sold in
branded form. The branded hair oil market is estimated at 70000 ton. The market has
been growing at around 3-4% in volume terms and 6-7% pa in value terms. Market
growth, although significantly lower than the shampoo market, is impressive, as
penetration is already high. In fact, this growth rate has been maintained with strong
marketing aggression by leading players in the segment.
Growth
There are several consumers who use coconut oil in cooking (especially in the south), and
conversely other edible oil classified as cooking medium (for e.g. castor oil) is used for
hair care also. Therefore, the actual size of the oil market should be larger than what is
estimated on the basis of branded hair oils.
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During the last few years, several product variants, such as non-sticky hair oil, value
added hair oil, etc have become very popular. These variants are growing at a much faster
pace, compared to the pure coconut hair oil segment. The market for these products is
estimated at Rs4.25bn and has been growing at 20-25% pa.
Organization Profile
History of Marico
The history of Marico can be traced all the way back to 1857, when a young man Kanji
Moorarji, set up a modest trade in spices which, in time, grew to include other export
worthy commodities. This firm's success gave birth to The Bombay Oil Industries in
1948, set up to convert the traditional buying strengths of the firm in the commodities
areas, to value added manufactured products.
At first Bombay Oil was involved in copra trading besides crushing and refining of
vegetable oils. Gradually, the company established itself firmly as a marketer of branded
vegetable oils and later expanded into fatty acids, specialty chemicals and spice extracts.
In 1983, Bombay Oil divisionalised its operations to create three Businesses: a Consumer
Products Division; a Fatty acids and Chemicals Division and an Oleoresins Division, also
called the Spice Extracts Division.
In 1990, Bombay Oil again restructured itself to form several companies, each focusing
on a specialized area of business. In April 1990, the Consumer Products Division became
Marico.
The history of Marico can be traced all the way back to 1857, when a young man Kanji
Moorarji, set up a modest trade in spices which, in time, grew to include other export
worthy commodities. This firm's success gave birth to The Bombay Oil Industries in
1948, set up to convert the traditional buying strengths of the firm in the commodities
areas, to value added manufactured products
60
About Marico
A leading Indian group operating in:
Consumer Products.
Aesthetic Services.
Global Ayurvedics business.
Financial Year 2002-03 Turnover ~ Rs.7.75 billion (USD 163 Million) 12 brands and
extensions with leadership in respective categories are as follows:
Parachute, Saffola, Sweekar, Hair & Care, Shanti, Mediker, Mealmaker, Sil, Revive,
Kaya and Sundari.
The Overseas Sales franchise of Marico's branded FMCG products is one of the largest
among the Indian companies.
Marico's own manufacturing facilities are located at Goa, Kanjikode, Jalgaon, Saswad,
Pondicherry and Daman Supported by subcontracting units.
In Bangladesh, Marico operates through Marico Bangladesh Limited, a wholly owned
subsidiary manufacturing facility at Mouchak, near Gazipur.
61
International Business Group (IBG)
Maricos International Business is one of the top three among the Indian Consumer
Goods companies. Marico reaches, more than fifteen countries in the Middle East and the
Asian sub-continent. Maricos product offerings in the international markets include
Parachute Coconut Oil, Perfumed Oils, Hair Creams and edible oils.
IBGs product offering
The portfolio comprises:
Parachute Coconut Oil
Parachute Gold - a hair oil
Parachute Hair Cream
Parachute Beliphool a perfumed hair oil
Parachute Rose a perfumed hair oil
Parachute Shanti Him Kesh Tel a cooling hair oil
Saffola and Sweekar Refined edible oils
62
Geographical Reach
Our products reach several countries in the Middle East and the Asian sub-continent:
UAE, Saudi, Oman, Qatar, Bahrain, Kuwait, Yemen, Bangladesh, Pakistan, Nepal,
Bhutan, and Sri Lanka, US, Canada, Singapore, Malaysia, Australia and Afghanistan.
63
About Parachute
Parachute is premium edible grade oil, a market leader in its category. Synonymous with
pure coconut oil in the market, Parachute is positioned on the platform of Vital
Nourishment today. From a loosely available commodity to a path-breaking brand,
Parachute pioneered the switch from coconut oil sold in tins to plastic. Parachute is also
available in pouch packs, to service the rural sectors, increasing penetration. The
positioning of Parachute has evolved over time. From the initial stand of purity to that of
clarity to the `Coconut Dream' theme, with a new look and logo, to today's positioning of
vital nourishment. The Coconut Dream logo is seen as an opportunity to transform
64

Parachute from being the largest coconut oil brand into a mega brand with several value
added products under the 'Coconut Goodness' umbrella.
Innovations in Parachute
To support its continuing endeavour to provide high quality Parachute Coconut Oil to its
consumers, Marico has been constantly innovating for this brand. Some of the examples
of innovation for Parachute are:
Flip Top Cap for Parachute bottles to enhance the safety and protect the purity of
Parachute.
Easy Jar of Parachute to facilitate usage especially during winters.
Parachute Mini - a bottle shaped small pack being sold at an MRP of Re. 1
Parachute blister pack.
These innovations have not only ensured protection of existing franchise; they have
propelled further penetration, enabling conversion of loose oil consumers to packaged
Parachute Coconut Oil. Innovation will continue to be at forefront in Marico's efforts to
strengthen this brand.
Our consumers
Parachute's primary target has been women of all ages. The brand has a huge loyalty, not
only in the urban sections of India but also the rural. Parachute has several brand
extensions, each filling existing need gaps, acquired from consumer insight.
Quality
65
Quality is all about satisfying consumers. It is not about profits or efficiencies but
keeping the consumer happy, so that he/she stays loyal. One of the basic requirements to
do this is to give the consumer a consistent product.
66
Data Collection and Analysis

Frequency of hair oil application
41.3% respondents said that they apply hair oil daily. 16.7% says 2-3 times a week and
15.3% says they apply hair oil once a week. The least number of people are in category of
less than once a month (3.3%).
frequency of hair oil application

140
120
100
80
Frequency
60
40
20
0
Conclusion
67
Hair oil is an every day habit with most of the people. Therefore a large chunk of market
consists of bulk purchase like tin or bottle. This signifies that market for blister pack is
small and niche.
Purchase of blister pack
how often do you buy

Everyday
50
2-3 days in a week

40
Once a week
30
Once in 2 weeks
Once a month
20
Only when travelling
Count
10
As and when needed
Others ____________
frequency of hair oil application
68
First came to know about blister pack

Maximum number of people came to know about Blister pack at the shop outlet. Most of
the respondents in our research replied that they have never seen any advertisement of
parachute Blister pack on television or in any magazine. Even the people those who have
responded that they first came to know about blister pack in magazine or radio or
television, where not sure that is it really the medium which they are replying is correct
or any other.
First came to know about Blister pack

magazine
5.3%
news papaer
6.0%
radio
others
9.7%
5.0%
hoarding
3.7%
television
9.3%
at the shop/outlet
61.0%
69

Conclusion
This clearly shows that the awareness of blister pack is very low and the awareness,
which is there, is by looking at the packs in shop outlets.
Pack the customer is using other than the blister pack
55% i.e. more than half of the people are using bottle other than blister pack, followed by
tin. A few number of people said they are using blister pack along with bottle or tin pack.
Least number of people said they are using sachet. Most of those using sachet earlier, said
they are now using blister pack due to less usage and as wastage of oil is less in blister
pack as compare to sachet. People using bottle or tin said that they are using bottle for
regular purpose while blister pack for traveling or once in a while purpose.
70
pack the customer is using other than blister pack

both botle and blist
11.3%
tin
13.7%
both tin and blister

8.3%
sachet
11.7%
bottle
55.0%
How often customer buy blister pack

Maximum number of people are purchasing blister pack for traveling or as and when
need arises like when the regular pack is over or for trial purpose etc. Number of people
using blister pack everyday is least.
71
100
80
60
40
Count
20
how often customer buy blister pack
In this graph X-axis shows the frequency of hair oil application, and the Y-axis shows
purchase of blister pack.
The graph clearly shows that in the category of people applying hair oil regularly, the
purchase of blister pack is not regular and mainly on occasions of traveling purpose or as
and when needed. This strengthens our conclusion from the earlier chart that regular oil
users are not opting for blister pack for their general usage.
Other than this we can se from the graph that people those who are purchasing blister
pack regularly are in the habit of using oil rarely or once in a month time.
72
Application of Blister Pack
73
how many times you can apply blister pack * sex Crosstabulation
Count
sex
male
how many
times you
can apply
blister pack
once
twice
thrice
There is not quantity
even for one time
Others ____________
Total
40
145
32
female
34
29
4
Total
10
5
229
1
71
6
300
74
174
36
160
140
120
100
80
60
sex
Count
40
20
male
female
once
thrice
twice
Others ____________
There is not quantit
how many times you can apply blister pack
The table and accompanied graph shows that most mail says that quantity of hair oil
blister pack is sufficient to use twice, while the most number of female says they can
74

apply hair oil out of blister pack only once. In the category of thrice use the share of
female is almost nil.
Conclusion
This finding shows the usage habits of male and female. Females are in habit of using
more oil as compare to man due to long hair and looks consciousness. Therefore the
target market of blister pack consists of less woman and more males.
As depicted by the table and chart given below, maximum numbers of respondents are
using blister pack either for traveling for some other purpose but not for regular use.
75

Nearly 22% respondents said that they might purchase blister pack when there regular
pack is over but not for the regular use.
on which occasions you buy blister pack
Valid
When travelling
When my regular pack
is over
As and when 1 need it
Others ____________
Total
Frequency
103
Percent
34.3
Valid Percent
34.3
Cumulative
Percent
34.3
65
21.7
21.7
56.0
127
5
300
42.3
1.7
100.0
42.3
1.7
100.0
98.3
100.0
reason for buying blister pack

140
120
100
80
60
Frequency
40
20
0
When travelling
As and when 1 need i
When my regular pack
Others ____________
How to open blister pack
76

Maximum numbers of respondents are opening blister pack by bending or cutting it.
Although most of the people said that they didnt faced any problem in opening the pack,
they were of idea that opening the pack can be made still easier and better
100
80
60
40
faced any problem in
Count
20
yes
0
no
cut
fold
pierce
bite
bend
any other way
how will you open a blister pack
SWOT Analysis of Blister Pack
77

In any business, it is imperative that the business be its own worst critic. A SWOT
analysis forces an objective analysis of a company's position viz a viz its competitors and
the marketplace. Simultaneously, an effective SWOT analysis will help determine in
which areas a company is succeeding, allowing it to allocate resources in such a way as
to maintain any dominant positions it may have.
Strengths
Wide distributions network reaching nearly 1.3 million outlets.
Near total dominance of the branded coconut hair oil market, with its flagship
brand.
Top of mind brand recall in customers.
Immense brand loyalty enjoyed by the brand.
Weaknesses
Almost negligible promotion and low consumer awareness.
Raw material prices of all key products are susceptible to wide fluctuations and
can lead to earnings variability.
This pack is totally a niche product in nature and therefore cannot enjoy bulk
sales.
Opportunities
78

The hair-oil market is likely to grow at 5-6% pa. The value added hair-oil segment
will grow at a much faster pace of 15-20% pa. Volume growth will be driven by a
demand shift from unorganized sector (80% of market) to branded oils.
Product is mainly catering to the need of traveling segment, which is growing
fast.
The value-added hair oils market is growing at a healthy 30 per cent per annum in
volumes. Marico can encourage consumers to shift to the value-added market.
The growing consumer population offers a huge market for consumer products. At
an average GDP growth of 5.5% until FY2007, the present consumer population
of 80 m households can grow by 60% to around 130 m households.
Threats
Nearly 120 look alike local brands eating share of parachute.
Low customer loyalty in case of small sachets and blister packs.
Findings
79

Hair oil is a peculiar habit in India. More than 40% of people are in habit of
applying hair oil daily.
Maximum no. of people are using blister packs for traveling purpose and not for
regular usage.
Consumer awareness of blister pack is very low. Most of the people came to know
about it at shop outlet.
In our research we found that usage of blister pack or small size sachets is among
lower class that mainly comprises of labors and low-income group.
Students residing in hostels or out of home are using blister pack for their regular
use.
There is a direct relation we found in frequency of hair oil application and
purchase of blister pack, i.e. people using less hair oil comprises more of the
customers of blister pack.
Regarding packaging, customers response is very nice and most of the people
said that packaging is excellent although we can still make some improvements.
Blister pack is mainly used for traveling purpose for which it is facing
competition with hair gel and creams.
Conclusion
80

Marketing research is the systematic procedure of collection, recording and analysis of
data about problems related to the marketing of goods and services. It is both a science
and an art. The essential purpose of marketing research is to provide information, which
will facilitate the identification of an opportunity or problem, and to assist managers in
arriving at the best possible decisions when such situation comes.
This project report on parachute blister pack has enriched my knowledge of marketing
research and Marico Industries limited.
Finally once again I extend my sincere thanks to all those who helped me in completing
this research work. I hope our recommendations will be worthwhile for all those who are
interested in it.
Recommendations
81
Recommendations as based on the case are as per the four Ps of marketing, i.e:
Product
Price
Place
Promotion
Product:
As far as product is concerned there is not any necessity of changing the basic features of
product. Parachute hair oil enjoys a great customer satisfaction and brand loyalty. Our
suggestion is in relation to the packaging. Most of the customer feels that there should be
a cap at the top so that after using the oil from blister pack they can recap it, as it will
prevent oil wastage.
Price:
As far as price is concerned we cant suggest anything better as it is already competitive.
Place:
Although distribution channel of Marico is among the best in corporate India, during our
retail analysis we found that many of the retailers are not storing the blister pack.
Company needs to place blister pack on most of the stores and especially on pan-beedi
shops were the lower segment people comes more, who are the major customers of blister
pack.
Many of the retailers are not storing blister pack and storing the local brands of
competitors in the same category. The major reason posted by retailers is low margin in
82

case of parachute blister pack. Many a retailers replied that they are getting margin just
double of parachute in other local brands. For more penetration of the pack in the market
retailer margin needs to be increased.
Promotion:
Promotion is the most neglected area in case of blister pack. Most of the respondents said
they have never seen an advertisement of blister pack on T.V. or any other medium also.
The respondents who are aware of blister of blister pack replied that they have seen it
first time on shop outlet. Marico needs to take some promotional programme for blister
pack. Other than television advertising, hoardings will be the best medium of promotion
for blister pack especially on railway stations.
To increase the retailer visibility Company should provide hangers or some sort of
dispensers to retailers in which they can keep blister packs on shop counter or shelf near
to the visibility of customers. Point of purchase advertising like glow sign boards,
gondolas will also be lot productive to increase awareness of blister pack.
Advertising of blister pack should be done targeting the traveling segment, which is the
major customer segment of blister pack.
BIBLIOGRAPHY
83
Web sites:
www.marketingteacher.com
www.bized.ac.uk
www.ihec.net
www.busmgt.ulst.ac.uk
www.austrainer.com
www.maricoindia.com
Books:
Understanding Consumers By M.G.Parameswaram.
Consumer Behaviour By P.C. Jain and Monica Bhatt.
Newspapers:
The Times of India
The Economic Times
Mid Day
`
84

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