A COMPARATIVE STUDY ON CONSUMERS BEHAVIOUR TOWARDS BAJAJ AND YAMAHA BIKES IN KATHMANDU

8/10/2019 A COMPARATIVE STUDY ON CONSUMERS BEHAVIOUR TOWARDS BAJAJ AND YAMAHA BIKES IN KATHMANDU

1/77

1

CHAPTER-I

INTRODUCTION

1.1 Background of the Study

With the civilization of human being, there came every possible facility in their lives

by themselves for more and more convenient life. Today we can find every Corner of

this world as very cozy place due to the development & advancement of more and

more improved and latest technologies. Most of such inventions have undoubtedly

made lives faster and easier. Amongst these inventions for people's lives, motorcycle

was also invented in 30 august 1885 AD which was really significant event. Such

then, every possible effort is being employed for the better features and specification

of motorcycle. Now with this constantly being modified and better featured manmade

object, man is really attaining better lives (Reza;2001:3).

In the very contest of automobile, motorcycle has become a necessary part of today's

busy lives. With the rapid growth of life style, Nepalese people are also being very

eager to have private motorbike. Exploring and watching all these demand of the

Nepalese people, its neighboring countries and third countries are more eager to

produce and export motorcycles which are suitable to our country's road and personal

status. So, we can see the very fact is happening here in Nepal.

In our daily lives, we come across various products being made and brought to us

with the help of advertisement distribution channels by various manufacturers. Most

of them appeal to the best of our expectation; some do to some extent only and so do

not at all. On top of that, some products become a history in the long run; whilst somedo create a niche even for a long time period in our life periods i.e. since our

childhood till our aged periods. Because of the fact that the consumer may forget the

taste of the product or switch to another new product, the manufacturers carry out

research and development on a continuous basis and bring out them in a new form.

The interesting thing to be noted is about the products that are made available to us,

come up with a unique label New for instance New Mayos, New Horlics, etc.

at different time periods on a day-to-day frequency. However, amidst the flow of such

products, there is always an important decision to be made is which one to select as


2/77

2

the right product and on what basis to select. Every companies claim its product to be

the best one with stiff advertisement and other attractive announcement as well.

However, only some of them prove to be the best one among all at the final period of

the consumption. Due to various factors such as time to be involved, money to be

invested, desire of having greater satisfaction and need of acquiring qualitative

services the products provide to us and the costs involved in case of quick

replacement of the product with the next alternate, and so on it has become imperative

for us to go for the selection of the right product with prudent decision. Here comes a

unique feature called Brand to play a great role in helping us to have all such as

mentioned above in todays competitive and complex scenario of marketing.

As we know, production is the prime activity of each and every industry and

successful selling of the product is the ultimate goal. And, marketing is the ultimate

source or means to achieve such goals. However this is not as easy as said as today's

marketing environment is surrounded by various factors and influenced by them with

greater degree of magnitude as well. Some of such factors may include technological

changes, stiff competition, change in the taste of customers, distribution channels,

political changes, globalization, financial crises in both the home and abroad

countries, etc. Amidst such scenario, very few of the companies get success with the

help of proper marketing plans, strategies, and right products and its brand names in

the long runs (Shrestha; 2006: 10-50).

1.1.1 A Brief Introduction of Selected Company

Yamaha Motor Company Limited

Yamaha Motor Co., Ltd. is a Japan-based manufacturing company. The Company

operates in five business segments. The Two-wheel Vehicle segment manufactures

and sells motorcycles and bicycles. The Marine segment manufactures and sells

outboard engines, water vehicles, sailing boats, fishing boats and Japanese-style boats.

The Special Machinery segment provides four-wheel buggies, side-by-side vehicles,

snowmobiles, golf bikes, power generators and general engines. The Industrial

Machinery and Robot segment mainly provides surface motors. The others segment

provides automobile engines. As of December 31, 2011, the Company had 117

subsidiaries and 26 associated companies. Morang Auto Works (MAW) is one of the

oldest motorcycle dealers of Nepal. MAW has also extended its wing in four wheelers


3/77

3

and heavy earth moving vehicles. Most of the bikes are packed with power and style.

With powerful performance and high quality services, Yamaha motorbikes have

started to increase the perception of motorcycles in Nepal. MAW one of the oldest

companies importing motorcycles started its operations from 1975. It is the authorized

dealer of Yamaha Motorcycles and Spares for Nepal. Within the span of 36 years

Yamaha is the market leader in style and design commanding a share of 30-35%. This

has been achieved because of various marketing initiatives and focus on costumer

friendly approach of the business(www.yamahamoters.com).

Bajaj Auto Limited

"Bajaj Auto (BAL) is a major Indian automobile manufacturer. It is India's largest and

the world's 4th largest two- and three-wheeler maker. It is based in Pune,

Maharashtra, with plants in Akurdi and Chakan (near Pune),Waluj (near Aurangabad)

and Pantnagar in Uttaranchal. Bajaj Auto makes and exports motorscooters,

motorcycles and the auto rickshaw. The Forbes Global 2000 list for the year 2005

ranked Bajaj Auto at 1946. Over the last decade, the company has successfully

changed its image from a scooter manufacturer to a two wheeler manufacturer. Its

product range encompasses Scooterettes, Scooters and Motorcycles. Its real growth in

numbers has come in the last four years after successful introduction of a few models

in the motorcycle segment. The company is headed by Rahul Bajaj who is worth more

than US$1.5 billion" (www.bajajauto.com).

Inspiring confidence, the tagline, has built up confidence, through excitement

engineering, not only to domestic consumers but also internationally. "Established

just nine decades back in 1926 by Jamnalal Bajaj, the company has been vested with

India's largest exporter of two and three wheelers. Bajaj Auto Ltd. sales have

increased by approximately 21 per cent in the year 2009/10, which exceeds Rs 65.4

billion, a record in the history of the company. The gross operating profit stands at Rs.

9.3 billion, again a record. The profits after tax of the BAL are close to Rs. 7.7 billion,

and the pre-tax return on operating capital is at an impressive 80 per cent."

The strength of the company is its quality products, excellence in engineering and

design, and its ability to delight the customers. The Pulsar, introduced in November

2010, is continually dominating the premium segment of the motorcycle market,

helping to maintain the market superiority. Discover DTSi, one more successful bike
http://www.yamaha/http://www.yamaha/http://www.yamaha/http://www.yamaha/


4/77

4

on Indian roads, is in the 'value' segment of the motorcycle market. It incorporates a

high degree of power with fuel efficiency of a 100 cc motorcycle.

BAL is committed to prevention of pollution, continual improvement of environment

performance and compliance with all environmental legislation and regulations. They

always believe in providing the customer 'value for money' and keep a special eye

upon quality, safety, productivity, cost and delivery (www.bajajauto.com).

1.2 Focus of the Study

The study focuses on the consumer buying behavior towards motorcycle. Today's

drastically changing market is covered, handled and managed with the great help of

today's sophisticated marketing management and stunning sales promotion . And this

reality cannot be denied. Every product or service is created for the consumer or

customer to use and it is achieved through proud selling or offering of best product or

service with best advertising and promotional tools.

The practices of marketing and sales promotion are getting increasing importance and

scope in the marketing management. At the same time it is getting vast with the

competitive environment of the same subject, i.e. advertising and sales promotion. So,

fit is as important to built strong and wealthy marketing strategy and policy as

important to understand, win and retain the market for the product or service.

Implementation of such policy and strategy soul in optimum manner, Hence the study

tries to describe the consumer behavior towards motorbike especially Bajaj and

Yamaha.

1.3 Statement of the Problem

People have changed their lifestyle and demand. Today, world is being motor motive

world. Consumers are using different attractive and powerful means of transportation.

Similarly, large organization and trading houses are importing and selling different

brands and models of motorbikes to fulfill desires of customers specially youth.

Amongst them, one of the most and well known brands in two wheelers Bajaj

Motorbike is rapidly growing business in Nepalese market.


5/77

5

Being distinctly ahead than other, Bajaj and Yamaha companies is providing products

with free services and warranty. On the other hand, many other companies are

presenting latest models of bikes with great feather to hold significant position in the

Nepalese market. Hero Honda, TVS, Suzuki, Yamaha, Honda, etc. are competitive

bikes having huge competition with Bajaj bikes for the existence in the market.

Hence, Nepalese customers are having plenty of options and confusions to make right

decision.

Different brands of bikes in Nepal have been able to gain and retain their targeted

market and hold sufficient share in market and that will be dealing with special

reference to Yamaha and Bajaj Motorbikes. In this context, some problems have beenfaced by this coming ages termed as the problem area in this study:

What are the factors influencing buyers behavior in Nepal?

Which attributes are important of brand awareness?

1.4 Objective of the Study

The main objective of the study is to analyze consumer buying behavior towards

motorbikes in Nepal. The specific objectives of the study are; as follows: To evaluate factors influencingbuyers behavior in Nepal.

To see consumer attributes towards brand awareness.

To recommend both the organization on the basis of study findings.

1.5 Significance of the Study

Today, world is globalized and termed as global village where people live, struggle

and survive living. It is a different part of the world of easy access to any place or

town of any country by the help of communication and transportation which has

developed a lot in last few decades. For the easy traveling of people, excess

development had been made in few last years in the transportation means such as

cycle, two wheelers motor, three wheelers motor, steam engine, etc. Today motorbike

is most popular mean of transportation among youth for both short and long distance

traveling. The significance of the study is listed as bellow:

This study helps to find out on buyer behavior towards two wheelers(motorbikes).


6/77

6

This study explores various influencing factors of buying behavior.

This study reviews on different brands of motorbike preferred by the consumers.

1.6 Limitation of the StudyThis study is done for the partial fulfillment of the requirement for the Master of

Business Study (MBS) Faculty of Management. It is natural that all types of study

have been conducted within certain limitation. A research is a vast study investigatory

the subject matter for solving perceived research problems. So, this study has certain

limitations and constraints and they are as follows.

This study has only focused on consumer buying behavior of selected bikes.

This study is mainly based on primary data.

There are many brands of bike, out of them; the study is done only on two

brands due to the lack of time and resources.

1.7 Organization of the Study

The entire study has been organized in such a way that would help every reader to get

a good picture of the main gist of this study. In order to make the study more

organized and readable, this study has been divided into five chapters as follows.

Chapter- I: Introduction

This chapter covers background of the study, focus of the study statement of problem,

objectives of the study, significance of the study, and limitation of the study.

Chapter -II: Review of LiteratureThe second chapter focuses on review of literature. It contains the conceptual

framework and review of past research study related with concerning topic of this

study.

Chapter -III: Research Methodology

The third chapter deals with the research methodology to be adopted for the study

consisting research design, sources of data, data gathering procedure, population and

sample, research variables and data processing procedure.


7/77

7

Chapter -IV: Presentation and Analysis Data

The fourth chapter deals with, presentation, analysis, interpretation and major findings

of primary data collected from questionnaires.

Chapter -V: Summary, Conclusions and Recommendations

The last chapter summarizes the whole study; draw the conclusion and forward

recommendations at the end appendices and bibliography is presented


8/77

8

CHAPTER-II

REVIEW OF LITERATURE

A literature review is a body of text that aims to review the critical points of current

knowledge on a particular topic. Most often associated with science, marketing-

oriented literature, such as a thesis, the literature review usually precedes a research

proposal, methodology and results section. Its ultimate goal is to bring the reader up

to date with current literature on a topic and forms the basis for another goal, such as

the justification for future research in the area. Under this section, the conceptual

review and the review of previous studies related to the present study has been

presented. This chapter is further divided into:

Conceptual review

Review of related studies

Research Gap

2.1 Conceptual Review

In this section, basic buyer behavior are reviewed ,besides some core concepts like

consumer behavior and buying behavior, modules, process, types and influencing

factors of buying behavior all leading brief description of the concept in focus. In the

modern business world understanding of consumer behavior ,decision making process

brand preference ,factor affecting on buying behavior etc, is the most necessary to

become a successful marketer.

2.1.1 Concept of Consumer Buyer Behavior

Consumer behavior is seen to involve a complicated mental process as well as

physical activity (purchase decision). Consumer behavior is a decision process and

physical activity individuals engage in when evaluating, acquiring, using or disposing

of goods and services.

Consumer Behavior reflects the totality of consumers decisions with respect to the

acquisition, consumption and disposition off goods, services, time and ideas by(human) decision making units. Buyer Behavior particularly is the study of decision


9/77

9

making units as they can buy for themselves or others. Thus, buying behavior

particularly involves collective response of buyers for selecting, evaluating, and

deciding and post purchase behavior. Buyer behavior is the study of human response

to services and the marketing of products and services. Buyer behavior researches

continuously investigate a broad range of human responses including human

affective, cognitive and behavioral responses. The buying behavior and purchase

decisions are need to be studied thoroughly in order to understand, predict and

analyze critical market variations of a particular product or service. The field of

consumer behavior is the broad study of individuals, groups or organizations and the

process they use to select secure and dispose of products, services, experiences or

ideas to satisfy needs and the impacts that these processes have on the consumer and

society. Consumer behavior studies are based on the buying behavior of final

consumers-individuals and households who buy goods and services for themselves.

The collective behavior of consumers has a significant influence on quality and level

of standard of living. Buyer Behavior is broadly defined by various scholars and

researchers as: It's the behavior displayed by the consumers during the acquisition,

use and disposition of products services, time and ideas by decision making units. It

is the body of knowledge which studies various aspects of purchase and consumption

of products and services by individuals with various social and psychological

variables at play . The process and activities people engage in when searching for,

selecting, purchasing, using, evaluating and disposing of products and services so as

to satisfy their needs and desires. The activities directly involved in obtaining,

consuming and disposing of products and services, including the decision processes

that precede and follow these actions ( Krishna;2006:50-53).

2.1.2 Consumer Behavior as A Dynamic Process

Consumer behavior involves the understanding that acquisition, use and disposition

can occur over time in a dynamic sequence. In other words the study of consumer

behavior is the study of how individuals make decisions to spend their available

resources (money, time, efforts) on consumption-related items.


10/77

10

The American Marketing Association (AMA) defines consumer behavior as The

dynamic interaction of cognition, behavior and environmental events by which human

beings conduct the exchange aspect of their lives.

Consumer behavior is The study of individuals, groups, or organizations and the

processes they use to select, secure, use and dispose of products, services,

experiences, or ideas to satisfy needs and the impacts that these processes have on the

consumer and society. Behavior occurs either for the individual, or in the context of

a group (e.g., friend's influence what kinds of clothes a person wears) or an

organization (people on the job make decisions as to which services the firm should

use).

Product use is often of great interest to the marketer, because this may influence how

a product is best positioned or how we can encourage the consumption of a product in

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

The impact of consumer behavior on society is also relevant. For example, aggressive

marketing of high fat foods, or aggressive marketing of easy credit, may have serious

repercussions for the national health and economy. Services are also marketed in

much the manner as goods and commodities. Still there are wide differ hence between

goods and services based on their characteristics and attributes (Loudon &

Bista;2008:8-9).

2.1.3 Application of Consumer Behavior

The study of consumer behavior deals with basic questions related to buying such as:

what we buy, why we buy and how we buy. The study of consumer behavior makes

us aware of the subtle influences that persuade us to use the product or services of our

choices we do. For understanding consumer behavior, implementation of consumer

behavior theories and verification of applications of such theories is necessary.

Consumer behavior is simple a large subset of larger field of human behavior and an

extended field of marketing attracting researchers and marketers from past few

decades.

Four Main Applications of Consumer Behavior


11/77

11

The most obvious application of consumer behavior is for deriving marketing

strategy. New products initially adopted by a few consumers and spread gradually to

the rest of the population later. The companies that introduce new products must be

well financed so that they can stay afloat until their products become a commercial

success. It is also important to please initial customers, since they will in turn

influence many subsequent customer's brand choices (Engle;1982: 15).

2.1.4 Consumer Behavior an Emerging Field of Study

In the highly specialized study of business management, business administration

or just management today, marketing management function plays a very critical

role in business activities. This is because this functional area of management earns

the revenue andworks in the close proximity with the public or persons outside the

organisation. Controlling these two attributes to have the desired benefits are the most

difficult part of the management, because none of these two are within the direct

control of the marketers. This does not mean that the other functional areas are not

useful, but they are not directly involved in the activities mentioned above.

Marketing consists of an interaction between buyer and seller for the purpose of

exchanging something valuable to the mutual benefit of both the parties to the

transaction. One cannot appreciate this marketing process by observing only the

seller, knowledge about consumer is a sound basis for marketing strategies and

decisions. Markets are selected on the basis of consumer wants, location,

characteristics and expenditure patterns. To ignore the customer can lead to disaster in

a modern economy.

Consumer behavior has become an integral part of strategic market planning. It is also

the basis of the approach to the concept of Holistic Marketing. The belief that ethics

and corporate social responsibility should also be integral components of every

marketing decision is embodied in a revised marketing concept the societal

marketing concept which calls on marketers to fulfill the needs of their target markets

in ways that improve society as a whole.

Consumer or the Customer play a very critical role as these are the people who

finally buy the goods and services of the organization and the firm is always on the


12/77

12

move to make them buy so as to earn revenue. It's crucial from both the points of view

as given below:


13/77

13

From the Customers Point of View

Today, in the highly developed and technologically advanced society, the customers

have a great deal of choices and options (often very close and competing) to decide on

or compare; They have the products of an extreme range of products attributes (the 1st

P - Product), they have a wide range of cost and payment choices (the 2nd P - Price),

they can order them to be supplied to their door step or anywhere else (the 3rd P -

Place) and finally they are bombarded with more communications from more

channels of information than ever before with the invent of information technology

(the 4th P - Promotion).

From the Marketers Point of View

The purpose of marketing is to sell more stuff to more people more often for more

money in order to make more profit. This is the basic principle of requirement for the

marketers in earlier days where aggressive selling was the primary aim. It cannot be

achieved by force, aggression or plain alluring. Customer today are more informed,

more knowledgeable, more demanding, more discerning and above all there is no

dearth of marketers to buy from. The marketers have to earn them or win them over.

The global marketplace is a study of diversity among consumers, producers,

marketers, retailers, advertising media, cultures, customs and of course the individual

or psychological behavior. However, despite prevailing diversities, there also are

many similarities. Consumer market is highly sensitive and driven by widely

diversified culture in many countries.

The study of consumer behavior is also very important to the marketers because it

enables them to understand and predict buying behavior of consumers in the

marketplace. It is concerned not only with what consumers buy, but also with why

they buy it, when, where, how they buy it, how often they buy it and also how they

enjoy the services. Consumer research is the methodology used to study consumer

behavior; it takes place at every phase of the buying process: before the purchase,

during the purchase and after the purchase. Researches shows that two different

buyers buying the same product may have done it for different reasons, paid different

prices, used in different ways, have different emotional attachments towards the

things and so on. The market strategies are reframed to achieve organizational

objectives depending upon knowing, serving and influencing consumers. This


14/77

14

suggests that the knowledge and information about consumers is critical for

developing successful marketing strategies. The relationship between consumers and

marketers, consumer behavior and marketing strategy is instable to attain

organizational objectives.

Consumer behavior is interdisciplinary approach based on concepts and theories about

people that have been developed by behavioral scientists, philosophers and

researchers in diverse disciplines such as psychology, sociology, social psychology,

cultural anthropology and economics. The study of consumer behavior also helps

management to understand consumer's needs so as to recognize the potential for the

trend of development of change in consumer requirements and new technology and

also to articulate the new thing in terms of the consumer's needs so that it will be

universally accepted in the market well. The following are few examples of the

benefits of the study of consumer behavior derived by the different categories of

people a marketing manager should know about consumer behavior as it will help him

to design better marketing plans to get those plans accepted within the company, in

insurance company the marketing department would like to know the policyholders

need and researchers want to analyse the consumers decision process and ingredients

of customer satisfaction ( Gupta; 2005: 87-120).

2.1.5 Different Views on Customer

Marketing scientists had noted that consumer does not always act or react as

suggested by economic theory. Therefore customer is further analyzed from different

angle. Sometime consumers buy because of emotions involved in a purchase decision

or several other reasons.

Economic and Passive Customer: Economic view explains the consumer as an

economic man who buys rationally to maximize the utility (benefits) derived from

a product or service. The passive view explains the consumer basically submissive

to the self-serving interest and promotional efforts of marketers.

Cognitive versus Emotional Customer: According to cognitive view consumer

is defined as a thinker and problem solver. Emotional man is a reality of each of

us because of deeply rooted feeling and emotions.


15/77

15

Potential and Realized Customer: There are three possibilities to identify the

state of consumer; non consumers, potential consumers and realized consumers. A

non consumer is an individual who has no need for a given product/service and is

not likely to have need in the foreseeable future. An individual not currently

purchasing may influenced to buy at some future point of time is referred to as a

potential consumer. Realized consumers generally conform to our earlier

definition of purchaser or shopper, since they are engaged in buying.

Personal Consumer Versus Organizational Consumer: The term consumer is

often used to describe two different kinds of consuming entities; the personal

consumer and the organizational consumer. The personal consumer buys goods

and services for his own, for the use of the household, for just one member or as a

gift for a friend. In these context the goods are bought or finally use by individuals

who are referred to as end users or ultimate consumers. Whereas

organizational consumers buy for altering, modifying or reselling the

products/services.

Final Consumer: Any person engaged in the consumption process is a consumer

but these buyers can be identified by the type of market to which they belong.

Two major types of market to which they belong are final consumer and industrial

buyer. The final consumer market consists of individuals who buy for personal

consumption or to meet the collective needs of family or household unit.

Rural Consumer: The rural market is one such segment that caught the fancy of

certain Indian marketers in a big war. Marketer considers catering to the rural

market as an opportunity, an antidote to the slow growth they faced in urban India.

Rural consumers as a segment have several distinctive characteristics and the

values aspirations and needs of this vast heterogeneous culture of rural consumers

are quite different from the urban consumers.

Women as a Consumer and Decision Maker: Gender is considered as an

important characteristic for consumer behavior studies by marketers from past


16/77

16

several years. They treat women as an exception rather than as normal average is a

retrograde gap. Large number of experts felt that it is a fact of life that women

consumer exhibit special traits and behavior(Hanson and Lott; 1995: 5-7).


17/77

17

2.1.6 Buying Roles

For making strategic decisions the marketers have to identify the buyers who make the

final buying decisions. It is truly a big task before the marketers to identify the target

buyers of the particular service.

Influencer: Several people may be involved in a particular purchase decision, but all

of them are not consumers. A person who has influence, whose views or advice is

given wheightage while taking the final decision.

Gatekeepers: Family members who control the flow of information about a product

or service into the family.

Initiator: The person who is the first to suggest or think of the idea of purchasing a

product or service.

Decider: The person who finally takes the decisions of whether to buy, what to buy,

how to buy and from where to buy.

Buyer: The person who actually buy the product/service after making payments.

User: The person who actually uses or consumes the product or service (Gautam

$Jain, 2008,17).

2.1.7 Concepts and Dimensions of Consumer Behavior

Consumer behavior is an interdisciplinary science and relatively emerged as a new fieldof study in the mid to late 1060s. This new discipline is borrowed heavily from concepts

developed in other scientific disciplines such as applied psychology, social psychology,

cultural anthropology, economics and econometrics. Therefore, it is crucial to discuss

various dimensions of consumer behavior in the context of Indian consumer.

(a) Consumer Needs and Motivation: Consumer needs is the basis of all modern

marketing. The key to a company's survival, profitability and growth in a highly

competitive environment is its ability to identify and satisfy unfulfilled consumer needs

Marketers do not create needs though in some instances they may make consumer more

keenly aware of unfelt need. Motivation can be described as the driving force within

individuals that impels them to action.

The driving force is produced by a state of tension exists as the result of an unfilled need.

Motivation is a need-induced tension which exerts a push on the individual to engage in

behavior that he expects will gratify needs and thus reduce tension. Individuals strive bothconsciously and subconsciously to reduce this tension through behavior that they


18/77

18

anticipate will fulfill their needs. Consumer motivation is dynamic in nature because their

wants are frequently changing.

(b) Consumer Psychographics: Marketing practitioner and consumer researchers refer

Psychographics as lifestyle analysis or AIO (activity, interest and opinions) research.

Consumer specific psychographics researches are related to consumer personality, buying

motives, interests, attitudes, beliefs and values. Services specific psychographics

researches are related to product attributes such as consumer responses about products,

brands or a specific consumption situation.

Consumer Perception: Perception is defined as the process by which an individual

selects, organizes and interprets stimuli into a meaningful and coherent manner. Stimuli

are sensory inputs include services, packages, brand names, advertisements and

commercials. Sensory receptors are the human organs that receive sensory inputs.

Sensation is the immediate and direct response of the sensory organs to simple stimuli.

Learning and Consumer Involvement: Consumer learning is the process of acquiring

the knowledge related to purchase and consumption information.

Consumer Attitudes: Attitudes are expression of inner feelings that reflects whether a

person is favorably or unfavorably predisposed to some object, person or event. As an

outcome of psychological process attitudes are not directly observable but must be

inferred from what people say or do.

(c) Demographic Factors: Demographics describe a population in terms of its size,

distribution and structure. Demographics influence buying behavior both directly and

indirectly by affecting other attributes of individuals such as their personal values and

decision styles. There are contradictory conclusions about the effect of age, income and

gender for a particular service.

Age, age-groups, education level, income, occupation etc. serves as various dimensions of

demographics. In India additional factors such as religion, social denominations, caste,

age, family background, regional disparities in states, linguistic difference, regional

perception of class factor and the degree of impact of these factors in affecting the social

status, all play crucial role in determining the social status of an individual.


19/77

19

(d) Economic Factors: Wealth, home ownership, number of earning members in a

family, household income, expenditure, and rate of interest, inflation, economic

conditions and investment pattern are some of the economic factors have strong influence

on consumer purchase decision.

(e) Communication and Consumer Behavior: Communication is the transmission of

messages from a sender to a receiver by means of signals of some sort sent through a

channel. There are four basic components of all communications: a source, a destination,

a medium and a message. There are two types of communication to which a consumer is

exposed interpersonal communication and impersonal (or mass) communication.

(f) Socio-Cultural Factors: Consumer in a Group and Consumer Reference Groups:

A group may be defined as two or more people who interact to accomplish similar goals.

Consumer relevant groups are family, friends, formal social groups, shopping groups,

consumer action groups, work groups, references groups etc. Four basic functions

provided by the family are relevant to consumer behavior these include; economic well-

being, emotional-support, suitable family lifestyles and family-member socialization.

Sociologists and researchers have strongly favoured the concept of Family Life Cycle

(FLC) - a way to classify family units into significant groups. FLC is a strategic tool for

marketers to segment families in terms of a series of stages spanning the life course of a

family unit. Traditional family life cycle stages are bachelorhood, honeymooners,

parenthood, post parenthood and dissolution.

Consumer and Their Social Classes: Social class is defined as the division of members

of a society into a hierarchy of distinct status classes so that members of each class have

relatively the same status and members of all other classes have either more or less status.

Social class is measured in terms of social status of its members and comparison of

members of each social class with other social classes. Some of the variables of the social

class are occupation, income, educational level and property ownership etc.

Culture and Consumer Behavior: Culture is a sum total of learned beliefs, values and

customs that serves to direct the consumer behavior of a particular society. Subculture can

be thought as a distinct cultural group that exists as an identifiable segment within a

larger and more complex society.


20/77

20

(g) Consumer and Consumerism: The word consumerism has many expressions

depending on who is using the term government, business, consumer groups,

academicians and researchers. Consumerism is defined as a social movement of

citizens and government to enhance the rights and powers of buyers in relation to

seller(kottler and janj; 2005:19-23).

2.1.8 Buying Behavior Models

The influences of social science have prompted marketing experts to propound certain

buying behavior models for explaining buyer behavior. These models are divided in

two broad categories microeconomic and macroeconomic models. The classical

microeconomic approach focus on type of purchase and quantity of these purchases

made by the consumer. Macroeconomic approach considers the monetary value of

goods and resources and how they will change over the period the period of time.

Several models have been put forward for explaining buyer behavior. All the social

sciences like Economics, Psychology, Sociology and Anthropology have influenced

the buyer behavior studies. Some important consumer behavior models are discussed

below to nurture the ideas of social sciences

The Economic Model: According to economic model buyer is a rational man and

his buying decisions are fully governed by the concept of utility. If the buyer has

purchasing power of choosing a set of services to met his need. He will allocate

this amount over the set of services in a very rational manner with the intention of

maximizing the utility or benefits. People are limited by their skills, habits,

reflexes, knowledge etc. Buyers operate in an imperfect world in which they do

not maximize their decisions in terms of economic considerations such as price-

quantity relationships, marginal utility or indifference curve. The buyer usually

unwilling to engage in extensive decision-making activities and satisfied with

utility or benefits of a product.

The Learning Model: This model takes its cue from the Pavlovian stimulus

model- response theory buyer behavior can be influenced by manipulating the

derives, stimuli and response of the buyer. The model rests on mans ability of

learning, forgetting and discriminating.


21/77

21

Stimulus response theory on learning model has its beginning with Russian

psychologists Ivan Pavlov. it is based on experiments made by Pavlov on feeding of a

dog was preceded by the sound of a bell and found that dogs behavior is conditioned,

it is related to behavior producing stimulus and behavior response. The process of

learning based on four fundamental factors drives, cues, responses and reinforcement.

The Psycho-Analytical model: The psycho-analytical model drawn mainly from

Freudian psychology. Sigmund Freud added a new dimension to consumer

behavior theories by introducing psychological elements of the consumer into

their decision making. This model considers individual buyer as a complex set of

deep- seated motives that derive him towards certain buying decisions. The buyer

has his hidden fears, suppressed desires and totally subjective longings. His

buying actions can be influenced by appealing these desires and longings. The

model describes most superior and innovative implications to the marketer for

designing a service message that suits the psychological needs of the consumer.

The Psycho-Analytical theory helps the marketers to understand individuals real

motive for purchasing a particular service or brand. It has caused marketers to

realize that they must provide consumers socially acceptable rationalization for

their purchase.

The Sociological/anthropological Model: According to the sociological model

the individual buyer is influenced by society, intimate groups as well as social

classes. Buyers buying decisions are not totally governed by utility; consumer has

a desire to follow and fit it with his immediate environment.

Social-Psychological Model: This theory is proposed by Veblan in the context of

behavioral aspects related to the economic and personality variables. Consumer

behavior of any person can be understood by society and place of living. These

social influences exert pressure and mould individual behavior. Veblan saw man

primarily as a social animal confirming to the general forms and norms of the

culture surrounding him. The subculture, norms, reference groups, membership,

social class, family and surroundings also mould his behavior. The challenge to


22/77

22

marketers is to determine which of these social levels are most important in

influencing the demand for his service.

The Nicosia Model: Nicosia model and Howard and Sheth model belong to a

category called systems model where human being is analysed as a system with

stimuli as the input and behavior as the output of the system. Franscesco Nicosia

an expert in the buyer behavior and motivation proposed his model of buying

behavior in 1966. The model tries to establish a relationship between a firm and

its buyers. The message from the firm first influences the predisposition of the

buyer towards the product and services. Depending on the situation he develops a

certain attitude towards the product and services. It may lead to a search or

evaluation of the service. If these steps have a positive impact on a buyer it may

result in a decision to buy. This is the sum and substance of the activity

explanations in the Nicosia model. The Nicosia model is divided into four major

fields:

Howard and Sheth Model: This model is proposed by John Howard and Jagdish

Sheth in 1969 in their publication entitled The theory of Buyer Behavior. This

model is a major revision of an earlier systematic effort to develop a

comprehensive theory of consumer decision making. The model consider human

being as a system with stimuli as input and outputs beginning with attention to a

given stimuli and ending with purchase. In between the inputs and outputs there

are variables affecting perception and learning. These variables are considered

hypothetical since they cannot be directlymeasured at the time of occurrence. It

distinguishes three level of decision making:

Extensive problem solving

Limited problem solving

Routinised response behavior

Engle-Blackwell-Miniard Model: This model was originally developed in 1968

by Engle, Kollat and Blackwell followed by number of researches on this model.

Recently Miniard has contributed this model in conjunction with Engle and

Blackwell. It stands as one of the most popular representation of buyer behavior.


23/77

23

The model is summarized in four sections Decision-process stages, Information

output, Information processing and variables influencing the decision process.

Sheth Family Decision Making Model: Three comprehensive models presented

were far all focusing on individual decision making model. An alternative

perspective considered the family as an appropriate decision making unit. This

model shows separate psychological systems representing the distinct

predispositions of the father, mother and other family members. The separate

predispositions lead into family buying decisions which may be either individually

or jointly determined. The model lists seven factors that influences purchase

decision are autonomous or joint: social class, lifestyle, role orientation, family

life cycle stage, perceived risk, service importance and time pressure. The model

suggests that joint decision making tends to prevail in middle class families,

newly married and close relation. It is suggested that joint decision making is

more prevalent in situations of high perceived risk and uncertainty. The joint

purchase decision is also considered important when there is ample time to make a

decision.

Bettmans Model: Bettman model of buyer choice portrays that buyer has limited

capacity for processing information. When the product of choice is available the

consumer rarely analyse other alternatives available in the market. The Bettmans

model suggest that the buyer employs simple decision making. Bettman model

consists of a series of interrelated flowcharts that depict various dimensions of the

buyer choice process. The Bettman model illustrates its seven basic components:

Processing capacity ,Motivation, .Attention and perceptual encoding, Information

acquisition and evaluation, Memory, Decision process and Consumption and

learning process.

Sheth Newman Gross Model of Consumption Values: This model explain the

reasons of selecting a product by the consumer. The model concentrates on

assessing consumption-relevant values that explain why consumers buy a product

or not. This model describes three central propositions. Consumer choices are a

function of small number of consumption values, Specific consumption value


24/77

24

make differential contribution in any given choice situation and Different

consumption values are independent. The model describes five consumption

values that are core of this model. Functional value of a consumer choice is the

perceived functional utilitarian or physical performance utility received from the

choices attributes. This is associated with economic utility theory. Social value of

a choice is the perceived utility acquired because of the association between one

or more specific social groups and a consumers choice. A consumer choice gains

social value by being linked with positively or negatively stereotyped

demographic, socioeconomic and cultural ethnic groups.

Andreasan Model This model develops a general model of buyers choice

behavior based on several conceptions about attitude formation and change drawn

from social psychology. According to Alan R. Andreasan the attitude changes are

exposure of various kinds of information. These exposures may be voluntary or

involuntary. The entire process comprises of four stages namely input stimuli,

perception and filtration, disposition changes and various feasible outcomes.

There are two principle strategies adopted by marketers to attract favorable purchase

decisions. Market segmentation strategy attempts to fit in existing attitude and

behavior in terms of service design, distribution etc., while service differentiation

strategy attempts to change attitude and behavior to make the consumer accept a

particular service. Attitude formation and change are central concept of this model.

Consumer Decision Making Models in Services

This model considers five important gaps need to be identified while finalizing

marketing strategies and analyzing consumer behavior. The model considers buying

as a continuous circle and for achieving customer satisfaction it is mandatory to

analyze these gaps.

Customer Gap: difference between expectations and perceptions

Provider Gap: not knowing what policyholders expect

Provider Gap: not having the right service designs and standards

Provider Gap: not delivering to service standards


25/77

25

Provider Gap: not matching performance to promises (Rojer and Mukherjee;2007:

39-42).

2.1.9 Consumer Buying Process

The Customer Buying Process (also called a Buying Decision Process) describes the

process your customer goes through before they buy your product. Understanding

your customers buying process is not only very important for your Salespeople, it

will also enable you to align your sales strategy accordingly.

The process has been interpreted by many scholars over the years; however, the five

stages framework remains a good way to evaluate the customers buying process.

John Dewey first introduced the following five stages.

Figure 2.1

Consumer Buying Process

(Sourcewww.buying process figure.com)

Problem/Need Recognition

This is often identified as the first and most important step in the Customers Decision

Process. A purchase cannot take place without the recognition of the need. The need
http://www.buying/http://www.buying/


26/77

26

may have been triggered by internal stimuli (such as hunger or thirst) or external

stimuli (such as advertising or word of mouth).

Information Search

Having recognized a problem or need, the next step a customer may take is the

Information Search stage, in order to find out what they feel is the best solution. This

is the buyers effort to search internal and external business environments, in order to

identify and evaluate information sources related to the central buying decision. Your

customer may rely on print, visual, online media or word of mouth for obtaining

information. : For solving this problem collect information. This information can be

internal (experiences) and external (family, exhibits, etc.)

Evaluation of Alternatives

As you might expect, consumers will evaluate different products or brands at this

stage on the basis of alternative product attributes those which have the ability to

deliver the benefits the customer is seeking. A factor that heavily influences this stage

is the customers attitude. Involvement is another factor that influences the evaluation

process. For example, if the customers attitude is positive and involvement is high,

then they will evaluate a number of companies or brands; but if it is low, only one

company or brand will be evaluated.

Purchase Decision

The penultimate stage is where the purchase takes place. Philip Kotler (2009) states

that the final purchase decision may be disrupted by two factors: negative feedback

from other customers and the level of motivation to accept the feedback. For example,

having gone through the previous three stages, a customer chooses to buy a new

telescope. However, because his very good friend, a keen astronomer, gives him

negative feedback, he will then be bound to change his preference. Furthermore, the

decision may be disrupted due to unforeseen situations such as a sudden job loss or

relocation.

Post-Purchase Behavior


27/77

27

In brief, customers will compare products with their previous expectations and will be

either satisfied or dissatisfied. Therefore, these stages are critical in retaining

customers. This can greatly affect the decision process for similar purchases from the

same company in the future, having a knock-on effect at the Information Search stage

and Evaluation of Alternatives stage. If your customer is satisfied, this will result in

brand loyalty, and the Information Search and Evaluation of Alternative stages will

often be fast-tracked or skipped altogether.

On the basis of being either satisfied or dissatisfied, it is common for customers to

distribute their positive or negative feedback about the product. This may be through

reviews on website, social media networks or word of mouth. Companies should be

very careful to create positive post-purchase communication, in order to engage

customers and make the process as efficient as possible (Drakopoulos,2008,303-315).

2.1.10 Types of Consumer Buying Behavior

Wants are unlimited and the resources to satisfy these wants are limited. So the

consumers think rationally before buying any product. Buying a toothpaste is totally

different from buying a luxury car. The more expensive the good is the more

information is required by the consumer. There are four types of consumer buying

behavior on the basis of buyer involvement while purchasing any product.

Table 2.1

Types of Consumer Behavior

High Involvement Low Involvement

Significant differences

between brands

Complex buying behavior

(motor cycle )

Variety seeking behavior

(washing detergent)

Few differences between

brands

Dissonance buying

behavior (floor tiles)

Habitual buying behavior

(toothpaste)

(SourceKar M; 2010:46-48)

High Involvement

The term means when the consumer is highly involved while buying a product.

Generally this situation happens in case of expensive or luxuries goods. Like while

buying a diamond necklace a consumer is highly involved.


28/77

28

Low Involvement

This term means when the consumer is not highly involved while buying a product. It

happens in case of low price goods. Like while buying toothpaste a consumer is not

highly involved.

Complex buying behavior:- when the consumer is highly involved in the buying

and there is significant differences between brands then it is called complex

buying behavior. So in this case the consumer must collect proper information

about the product features and the marketer must provide detailed information

regarding the product attributes. For e.g. Consumer while buying a motorcycle

is highly involved in the purchase and has the knowledge about significant

differences between brands.

Variety seeking behavior: in this case consumer involvement is low while

buying the product but there are significant differences between brands.

Consumers generally buy different products not due to dissatisfaction from the

earlier product but due to seek variety. Like every time they buy different

washing detergentjust for variety. So it is the duty of the marketer to encourage

the consumer to buy the product by offering them discounts, free samples and

by advertising the product a lot.

Dissonance buying behavior: here consumer is highly involved in the purchase

but there are few differences between brands. Like consumer while buying a

floor tiles buy them quickly as there are few differences between brands.

Habitual buying behavior:-in this case there is low involvement of the consumer

and there are few differences between brands. The consumer buys the product

quickly. For e.g. Toothpaste(Kar ; 2010:46).

2.1.11 The Factors Influencing Consumer Behavior

Today, lets focus on the factors influencing consumer behavior: what are they? How

do they work? What is their level of importance to the consumer and how he reacts to

it? There are 4 main types of factors influencing consumer behavior: cultural factors,

social factors, personal factors and psychological factors.


29/77

29

Figure 2.1.2

Influencing Factors of Buying behaviour

(Source www. influence factor picture.com)

I. Cultural Factors

Cultural factors are coming from the different components related to culture or

cultural environment from which the consumer belongs.

Culture and Societal Environment

Culture is crucial when it comes to understanding the needs and behaviors of an

individual. Throughout his existence, an individual will be influenced by his family,

his friends, his cultural environment or society that will teach him values,

preferences as well as common behaviors to their own culture. For a brand, it isimportant to understand and take into account the cultural factors inherent to each

market or to each situation in order to adapt its product and its marketing strategy. As

these will play a role in the perception, habits, behavior or expectations of consumers.

For example, in the West, it is common to invite colleagues or friends at home for a

drink or dinner. In Japan, on the contrary, invite someone home does not usually fit

into the local customs. It is preferable to do that this kind of outing with friends or

colleagues in restaurant. A significant specificity to take into account for the brands in

markets such as savory snacking or sodas and alcoholic beverages. Usage and
https://www.google.com.np/search?q=influencing+factors+of+buying+behaviour+pictures&tbm=isch&tbo=u&source=univ&sa=X&ei=9Xg3U_iRLMWriAfmiYHYCA&ved=0CDYQ7Ak&biw=1366&bih=622https://www.google.com.np/search?q=influencing+factors+of+buying+behaviour+pictures&tbm=isch&tbo=u&source=univ&sa=X&ei=9Xg3U_iRLMWriAfmiYHYCA&ved=0CDYQ7Ak&biw=1366&bih=622


30/77

30

consumption moments are not the same in all regions of the world. While if a

Japanese offer you a gift, the courtesy is to offer him an equivalent gift in return.

McDonalds is a brilliant example of adaptation to the specificities of each culture and

each market. Well aware of the importance to have an offer with specific products to

meet the needs and tastes of consumers from different cultures, the fast-food giant has

for example: a McBaguette in France (with french baguette and Dijon mustard), a

Chicken Maharaja Mac and a Masala Grill Chicken in India (with Indian spices) as

well as a Mega Teriyaki Burger (with teriyaki sauce) or Gurakoro (with macaroni

gratin and croquettes) in Japan.sWhile all the ingredients used by McDonalds in

Arabic and Muslim countries are certified halal. The fast food chain not offering, of

course, any product with bacon or pork.

Sub-cultures

A society is composed of several sub-cultures in which people can identify.

Subcultures are groups of people who share the same values based on a common

experience or a similar lifestyle in general. Subcultures are the nationalities, religions,

ethnic groups, age groups, gender of the individual, etc.

The subcultures are often considered by the brands for the segmentation of a market

in order to adapt a product or a communication strategy to the values or the specific

needs of this segment. For example in recent years, the segment of ethnic cosmetics

has greatly expanded. These are products more suited to non-Caucasian populations

and to types of skin pigmentation for African, Arab or Indian populations for

example.

Its a real brand positioning with a well-defined target in a sector that only offered

makeup products to a Caucasian target until now (with the exception of niche brands)

and was then receiving critics from consumers of different origin.

Brands often communicate in different ways; sometimes even create specific products

(sometimes without significant intrinsic difference) for the same type of product in

order to specifically target an age group, a gender or a specific sub-culture.

Consumers are usually more receptive to products and marketing strategies that

specifically target them.


31/77

31

Social Classes

Social classes are defined as groups more or less homogenous and ranked against

each other according to a form of social hierarchy. Even if its very large groups, we

usually find similar values, lifestyles, interests and behaviors in individuals belonging

to the same social class.

We often assume three general categories among social classes: lower class, middle

class and upper class.

People from different social classes tend to have different desires and consumption

patterns. Disparities resulting from the difference in their purchasing power, but not

only. According to some researchers, behavior and buying habits would also be a wayof identification and belonging to its social class.

Beyond a common foundation to the whole population and taking into account that

many counterexample naturally exist, they usually do not always buy the same

products, do not choose the same kind of vacation, do not always watch the same TV

shows, do not always read the same magazines, do not have the same hobbies and do

not always go in the same types of retailers and stores. For example, consumers from

the middle class and upper class generally consume more balanced and healthy food

products than those from the lower class.

They dont go in the same stores either. If some retailers are, of course, patronized by

everyone, some are more specifically targeted to upper classes such as The Fresh

Market, Whole Foods Market, Barneys New York or Nordstrom. While others, such

as discount supermarkets, attract more consumers from the lower class. Some studies

have also suggested that the social perception of a brand or a retailer is playing a rolein the behavior and purchasing decisions of consumers.

In addition, the consumer buying behavior may also change according to social class.

A consumer from the lower class will be more focused on price. While a shopper

from the upper class will be more attracted to elements such as quality, innovation,

features, or even the social benefit that he can obtain from the product.


32/77

32

Cultural Trends

Cultural trends or Bandwagon effect are defined as trends widely followed by

people and which are amplified by their mere popularity and by conformity or

compliance with social pressure. The more people follow a trend, the more others will

want to follow it. They affect behavior and shopping habits of consumers and may be

related to the release of new products or become a source of innovation for brands. By

social pressure, desire to conformity or belonging to a group, desire to follow fashion

trends or simply due to the high visibility provided by media, consumers will be

influenced, consciously or unconsciously, by these trends. For example, Face books

has become a cultural trend. The social network has widely grew to the point of

becoming a must have, especially among young people.

It is the same with the growth of the tablet market. Tablets such as IPod or Galaxy

Tab have become a global cultural trend leading many consumers to buy one. Even if

they had never specially felt the need before. For a brand, create a new cultural trend

from scratch is not easy. Apple did it with the tablets with its I Pad. But this is an

exception. However, brands must remain attentive to the new trends and bandwagon

effects. Whether to accompany it (create a page on Facebook) or to take part in the

newly created market (create its own tablet).

II. Social Factors

Social factors are among the factors influencing consumer behavior significantly.

They fall into three categories: reference groups, family and social roles and status.

Reference Groups and Membership Groups

The membership groups of an individual are social groups to which he belongs

and which will influence him. The membership groups are usually related to its social

origin, age, place of residence, work, hobbies, leisure, etc..The influence level may

vary depending on individuals and groups. But is generally observed common

consumption trends among the members of a same group. The understanding of the

specific features (mindset, values, lifestyle, etc..) of each group allows brands to

better target their advertising message.More generally, reference groups are defined as

those that provide to the individual some points of comparison more or less direct

about his behavior, lifestyle, desires or consumer habits. They influence the image


33/77

33

that the individual has of himself as well as his behavior. Whether it is a membership

group or a non-membership group. Because the individual can also be influenced by a

group to which he doesnt belong yet but wishes to be part of. This is called an

aspiration group. This group will have a direct influence on the consumer who,

wishing to belong to this group and look like its members, will try to buy the same

products.

For example, even if he doesnt need it yet, a surfing beginner may want to buy

advanced brands or products used by experienced surfers (aspiration group) in order

to get closer to this group. While a teen may want the shoe model or Smartphone used

by the group of popular guys from his high school (aspiration group) in order to be

accepted by this group. Some brands have understood this very well and

communicate, implicitly or not, on the social benefit provided by their products.

Within a reference group that influences the consumer buying behavior, several roles

have been identified:

The Initiator: the person who suggests buying a product or service

The Influencer: the person whose point of view or advice will influence the buying

decision. It may be a person outside the group (singer, athlete, actor, etc..) but on

which group members rely on.

The Decision-Maker: the person who will choose which product to buy. In general,

its the consumer but in some cases it may be another person. For example, the

leader of a soccer supporters group (membership group) that will define, for the

whole group, which supporters scarf buy and bear during the next game.

The Buyer: the person who will buy the product. Generally, this will be the final

consumer.

Many brands look to target opinion leaders (initiator or influencer) to spread the use

and purchase of their product in a social group. Either through an internal person of

the group when it comes to a small social group. Or through a sponsorship or a

partnership with a reference leader (celebrity, actor, musician, athlete, etc) for larger

groups.


34/77

34

Family

The family is maybe the most influencing factor for an individual. It forms an

environment of socialization in which an individual will evolve, shape his personality,

and acquire values. But also develop attitudes and opinions on various subjects such

as politics, society, social relations or himself and his desires. But also on his

consumer habits, his perception of brands and the products he buys. We all kept, for

many of us and for some products and brands, the same buying habits and

consumption patterns that the ones we had known in our family.

Perceptions and family habits generally have a strong influence on the consumer

buying behavior. People will tend to keep the same as those acquired with their

families. For example, if you have never drunk Coke during your childhood and your

parents have described it as a product full of sugar and not good for health. There is

far less chance that you are going to buy it when you will grow up that someone who

drinks Coke since childhood.

For brands especially for Fast-Moving Consumer Goods (FMCG) or Consumer

Packaged Goods (CPG) successfully integrate the family is both a real challenge

and an opportunity to develop a strong consumer loyalty among all the family

members. Thats why its important for brands to be seen as a family brand in order to

become a consumer habit for parents and children when they will become adults.

Social Roles and Status

The position of an individual within his family, his work, his country club, his group

of friends, etc. All this can be defined in terms of role and social status. A social role

is a set of attitudes and activities that an individual is supposed to have and do

according to his profession and his position at work, his position in the family, his

gender, etc and expectations of the people around him.

Social status meanwhile reflects the rank and the importance of this role in society or

in social groups. Some are more valued than others. The social role and status

profoundly influences the consumer behavior and his purchasing decisions. Especially

for all the visible products from other people. For example, a consumer may buy a

Ferrari or a Porsche for the quality of the car but also for the external signs of social


35/77

35

success that this kind of cars represents. Moreover, it is likely that a CEO driving a

small car like a Ford Fiesta or a Volkswagen Golf would be taken less seriously by its

customers and business partners than if he is driving a germane luxury car.

And this kind of behaviors and influences can be found at every level and for every

role and social status. Again, many brands have understood it by creating an image

associated with their products reflecting an important social role or status.

III. Personal Factors

Decisions and buying behavior are obviously also influenced by the characteristics of

each consumer.

Age and Way of Life

A consumer does not buy the same products or services at 20 or 70 years. His

lifestyle, values, environment, activities, hobbies and consumer habits evolve

throughout his life. For example, during his life, a consumer could change his diet

from unhealthy products (fast food, ready meals, etc) to a healthier diet, during mid-

life with family before needing to follow a little later a low cholesterol diet to avoid

health problems.

The factors influencing the buying decision process may also change. For example,

the social value of a brand generally plays a more important role in the decision for

a consumer at 25 than at 65 years. The family life cycle of the individual will also

have an influence on his values, lifestyles and buying behavior depending whether

hes single, in a relationship, in a relationship with kids, etc. As well as the region of

the country and the kind of city where he lives (large city, small town, countryside,

etc).

For a brand or a retailer, it may be interesting to identify, understand, measure and

analyze what are the criteria and personal factors that influence the shopping behavior

of their customers in order to adapt. For example, it is more than possible that

consumers living in New York do not have the same behavior and purchasing habits

than the ones in Nebraska. For a retailer, have a deep understanding and adapt to these

differences will be a real asset to increase sales.


36/77

36

Purchasing Power and Revenue

The purchasing power of an individual will have, of course, a decisive influence on

his behavior and purchasing decisions based on his income and his capital. This

obviously affects what he can afford, his perspective on money and the level of

importance of price in his purchasing decisions. But it also plays a role in the kind of

retailers where he goes or the kind of brands he buys. As for social status, some

consumers may also look for the social value of products they b uy in order to show

external indications of their incomes and their level of purchasing power.

Lifestyle

The lifestyle of an individual includes all of its activities, interests, values and

opinions. The lifestyle of a consumer will influence on his behavior and purchasing

decisions. For example, a consumer with a healthy and balanced lifestyle will prefer

to eat organic products and go to specific grocery stores, will do some jogging

regularly (and therefore will buy shoes, clothes and specific products), etc.

Personality and Self-Concept

Personality is the set of traits and specific characteristics of each individual. It is the

product of the interaction of psychological and physiological characteristics of the

individual and results in constant behaviors. It materializes into some traits such as

confidence, sociability, autonomy, charisma, ambition, openness to others, shyness,

curiosity, adaptability, etc.

While the self-concept is the image that the individual has or would like to have of

him and he conveys to his entourage. These two concepts greatly influence the

individual in his choices and his way of being in everyday life. And therefore also hisshopping behavior and purchasing habits as consumer. In order to attract more

customers, many brands are trying to develop an image and a personality that conveys

the traits and values - real or desiredof consumers they are targeting.

For example, since its launch, Apple cultivates an image of innovation, creativity,

boldness and singularity which is able to attract consumers who identify to these

values and who feel valued in their self concept by buying a product from Apple.

Because consumers do not just buy products based on their needs or for their intrinsic


37/77

37

features but they are also looking for products that are consistent and reinforce the

image they have of themselves or they would like to have.

The more a product or brand can convey a positive and favorable self-image to the

consumer, the more it will be appreciated and regularly purchased.

IV. Psychological Factors

Among the factors influencing consumer behavior, psychological factors can be

divided into 4 categories: motivation, perception, learning as well as beliefs and

attitudes.

MotivationMotivation is what will drive consumers to develop a purchasing behavior. It is the

expression of a need is which became pressing enough to lead the consumer to want

to satisfy it. It is usually working at a subconscious level and is often difficult to

measure. Motivation is directly related to the need and is expressed in the same type

of classification as defined in the stages of consumer buying decision process .

To increase sales and encourage consumers to purchase, brands should try to create,

make conscious or reinforce a need in the consumers mind so that he develops a

purchase motivation. He will be much more interested in considering and buy their

products. They must also, according to research, the type of product they sell and the

consumers they target, pick out the motivation and the need to which their product

respond in order to make them appear as the solution to the consumers need.

Perception

Perception is the process through which an individual selects, organizes and interprets

the information he receives in order to do something that makes sense. The perception

of a situation at a given time may decide if and how the person will act.

Depending to his experiences, beliefs and personal characteristics, an individual will

have a different perception from another.


38/77

38

Each person faces every day tens of thousands of sensory stimuli (visual, auditory,

kinesthetic, olfactory and gustatory). It would be impossible for the brain to process

all consciously. That is why it focuses only on some of them.

The perception mechanism of an individual is organized around three processes:

Selective Attention: The individual focuses only on a few details or stimulus to which

he is subjected. The type of information or stimuli to which an individual is more

sensitive depends on the person.

For brands and advertisers successfully capture and retain the attention of consumers

is increasingly difficult. For example, many users no longer pay any attention,

unconsciously, to banner ads on the Internet. This kind of process is called BannerBlindness. The attention level also varies depending on the activity of the individual

and the number of other stimuli in the environment. For example, an individual who is

bored during a subway trip will be much more attentive to a new ad displayed in the

tube. It is a new stimulus that breaks the trip routine for him.Consumers will also be

much more attentive to stimuli related to a need. For example, a consumer who

wishes to buy a new car will pay more attention to car manufacturers ads. While

neglecting those for computers. Lastly, people are more likely to be attentive to

stimuli that are new or out of the ordinary. For example, an innovative advertising or

a marketing message (Unique Value Proposition) widely different from its

competitors is more likely to be remembered by consumers.

Selective Distortion: In many situations, two people are not going to interpret

information or a stimulus in the same way. Each individual will have a different

perception based on his experience, state of mind, beliefs and attitudes. Selective

distortion leads people to interpret situations in order to make them consistent with

their beliefs and values.

For brands, it means that the message they communicate will never be perceived

exactly in the same way by consumers. And that everyone may have a different

perception of it. Thats why its important to regularly ask consumers in order to

know their actual brand perception. Selective distortion often benefits to strong and

popular brands. Studies have shown that the perception and brand image plays a key

role in the way consumers perceived and judged the product.


39/77

39

Several experiments have shown that even if we give them the same product,

consumers find that the product is or tastes better when theyve been told that

itsfrom a brand they like than when theyve been told its a generic brand. While it is

exactly the same product! Similarly, consumers will tend to appreciate even less a

product if it comes from a brand for which they have a negative perception.

Selective Retention: People do not retain all the information and stimuli they have

been exposed to. Selective retention means what the individual will store and retain

from a given situation or a particular stimulus. As for selective distortion, individuals

tend to memorize information that will fit with their existing beliefs and perceptions.

For example, consumers will remember especially the benefits of a brand or productthey like and will forget the drawbacks or competing products advantages.

Selective retention is also what explains why brands and advertisers use so much

repetition in their advertising campaigns and why they are so broadcasted. So that the

selective retention can help the brand to become a top of mind brand in the

consumers mind.

Learning

Learning is through action. When we act, we learn. It implies a change in the behavior

resulting from the experience. The learning changes the behavior of an individual as

he acquires information and experience. For example, if you are sick after drinking

milk, you had a negative experience, you associate the milk with this state of

discomfort and you learn that you should not drink milk. Therefore, you dont buy

milk anymore.

Rather, if you had a good experience with the product, you will have much more

desire to buy it again next time. The learning theories can be used in marketing by

brands. As the theory of operant conditioning which states that you can build a good

image and high demand for a product by associating it with a positive reinforcement

(or rather a bad image with a negative reinforcement).

Beliefs and Attitudes

A belief is a conviction that an individual has on something. Through the experience

he acquires, his learning and his external influences (family, friends, etc) he will


40/77

40

develop beliefs that will influence his buying behavior. While an attitude can be

defined as a feeling, an assessment of an object or idea and the predisposition to act in

a certain way toward that object. Attitudes allow the individual to develop a coherent

behavior against a class of similar objects or ideas. Beliefs as well as attitudes are

generally well-anchored in the individuals mind and are difficult to change. For

many people, their beliefs and attitudes are part of their personality and of who they

are.

However, it is important to understand, identify and analyze the positive attitudes and

beliefs but also the negative ones that consumers can have on a brand or product. To

change the brands marketing message or adjust its positioning in order to get

consumers to change their brand perception(Ulvaous; 2010: 917-919).

2.2 Review of Related studies

2.2.1 Review of Articles

Teunter (2009), in his article, Analysis of Sales Promotion Effects on Household

Purchase Behavior, has stated that sales promotion can influence household

purchase behavior in many ways (the so-called sales promotion reaction

mechanisms). A household can decide to switch brands, purchase a larger quantity

than intended, purchase it at a different moment than intended, etc. But not only the

current behavior can be influenced. Suppose that a household purchases a larger

quantity due to the promotion. During the subsequent shopping trip, the household

can decide to buy less than what it normally purc

Date post:	02-Jun-2018
Category:	Documents
Upload:	hikmat-subedi
View:	225 times
Download:	1 times

A COMPARATIVE STUDY ON CONSUMERS BEHAVIOUR TOWARDS BAJAJ AND YAMAHA BIKES IN KATHMANDU

Documents