CBProject Group7

8/13/2019 CBProject Group7

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To study

Impulse BuyingBehavior atSupermarkets

Project to study Consumerbehavior

GROUP 7Akshay Balooni 12P004 Pallavi Agrawal 12P032 Prerak Goel 12P035 Swapnil Bahekar 12P075 Chetan Dawada 12P077 Gireesh Babu 12P084


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Table of ContentsIntroduction ............................................................................................................................................ 3

Literature Review .................................................................................................................................... 3

Research Methodology ........................................................................................................................... 6

Sample................................................................................................................................................. 6

Limitations .......................................................................................................................................... 6

Analysis and Discussion........................................................................................................................... 7

Descriptive Analysis ............................................................................................................................ 7

Data reduction and reliability test ...................................................................................................... 9

References ............................................................................................................................................ 15

Appendix ............................................................................................................................................... 16


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IntroductionImpulse buying refers to making unplanned and sudden purchases (Rook, 1987). Impulse

buying behaviour is frequently based on the presence of an immediate stimulus object and isoften accompanied by feelings of excitement and pleasure and/or a powerful urge to buy.

(Rook, Sept, 1987)

(Crispen, July, 2009)The retailing business is globally experiencing huge trends due to theever-changing nature of consumer tastes, consumption patterns and buying behaviours. Eachretailers ability to sustainably sell its merchandise, therefore, largely depends on the strategicstrength of its marketing mix activities. Bayley and Nancarrow (1998) define impulsive

buying as a sudden, compelling, hedonically complex buying behaviour in which the rapidityof an impulse decision process precludes thoughtful and deliberate consideration ofalternative information and choices.

Rather than carefully searching, deliberating and evaluating alternatives before buying,consumers are just as likely to make many of these purchases on impulse, on a whim, becausethey are emotionally driven. Impulsive buying is influenced mainly by the inputs componentas identified in the model. These inputs include the marketing activities of organizations andthe socio-cultural inputs. Retailers marketing activities ranges from the product itself (its

package, size and guarantees), media advertising and other promotional efforts, pricing policyand the distribution (Schiffman and Kanuk, 2007). Marketing efforts can be at macro level(as for mass media) and can be at micro level: as for in-store adverts, point-of-purchasedisplays, in-store promotions and pleasant in-store shopping environments.

Literature ReviewThe various factors as a determinant of impulsive buying can be elaborated as follows

The in-store shopping environmentFactors such as in-store background music, store display, scent, instore promotions, prices,shop cleanliness, shop density or congestion and store personnel all make up the instoreshopping environment, among others.

Factors with a promotional, informative and economic effect: Coupons Heilman et al. (20 02) referred to these coupons as surprise coupons and described them asunanticipated coupons encountered while in the shop and that are intended to be used for that

particular shopping trip.

Unexpected cheaper prices and discounts/sales/specialsThe effect of unexpected cheaper prices on impulse buying is almost similar to the effect ofinstant coupons since they also present a windfall gain to the consumer.


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Factors with an atmospheric, entertaining, experiential and hedonic effectIn-store displaysStrategic displays can then be devised that help to increase sales especially throughunplanned purchases by consumers. One strategy may be to identify the commonality of

goods bought by list-buyers and then attractively display complementary products next tothese common products.Sales peopleConsumers tend to enjoy a shopping experience with supportive and friendly shop assistants.

Shop crowding and densityConsumers adjust to higher retail densities by reducing shopping time, deviating from theirshopping plans, buying less to enter express checkout lanes, postponing purchases, relyingmore on shopping lists, reducing interpersonal communications and refraining fromexploratory behaviours (Michon et al., 2005). (RICHARD E. NISBETT, 1969, Vol. 12, No.4)

Besides the external stimuli above t he buyers state or internal factors also play a role. Forexample, supermarket aisles are lined with temptations for most people who shop on anempty stomach. Imagination readily places potatoes and onions around roasts and transforms

pancake mix into a steaming, buttered snack. When one has recently eaten, on the other hand,roasts are examined with an efficient, dispassionate eye and pancake mix is just pancake mix.The trip may be less enjoyable, but escape with budget and schedule intact is more likely. Itseems, then, that normal individuals will spend increasing amounts of time and money in the

supermarket as their state of food deprivation increases.

(Willett, (Feb., 1967)) This study proposes that such buying behaviour can be explained withthe help of factors (a) the exposure to in-store stimuli hypothesis and (b) the customer-commitment hypothesis. In-store stimuli apparently create new needs or remind the shopperof temporarily forgotten needs. The customer-commitment hypothesis suggests thatdifferences between purchase intentions and actual purchases are caused by incompletemeasures of purchase intentions. Differences exist between measured and actual purchaseintentions because the shopper is un-willing or unable to spend the time and effort necessaryto itemize her purchase plans.

Transaction Size: The percentage of unplanned purchases increases as the number ofdifferent products purchased increase.Shopping trip: The percentage of unplanned purchases is larger during major shopping tripsthan during fill-in trips.Frequency of Purchase: Product purchase frequencies are significantly related to productunplanned purchase rates. Given two customer transactions of the same size, one wouldexpect an inverse relationship between the purchase frequencies of the products included inthe transaction and the percentage of unplanned purchases that comprise the transaction. For

example, if the shopper purchases products which are purchased infrequently, she would beexpected to make a higher percentage of unplanned purchases.


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Respondents' anecdotes provide vivid pictures of typical and more unusual impulse buyingepisodes. A few distinctive behavioural features emerged from respondents' descriptions oftheir impulse buying experience.

Spontaneous urge to buyThe sudden urge to buy is likely to be triggered by a visual confrontation with a product or bysome pro-motional stimulus, but the buying impulse does not always depend on direct visualstimulation. Some respondents described sitting at home and suddenly experiencing the urgeto go out and buy something, with no apparent external visual encouragement.Excitement and SimulationThe variety and high levels of excitement that are attributed to impulse buying distinguish itfrom more calm and rational consumer decision making. It comes on as a surprise and

provides novelty and spontaneity. The buying impulse tends to disrupt an individual'songoing behaviour stream. This may cause it to be frightening, too; the extraordinarystimulation can induce feelings of being out-of-control.SynchronicityIndividuals who report this type of experience say they felt that they were in the right place atthe right time, the beneficiaries of a unique and fortuitous convergence of events.Hedonic elements of Good and Bad and Disregard for consequences are other featuresexhibited by shoppers engaging in impulsive buying.


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Research Methodology

The research project could investigate the relationship among the various shoppercharacteristics and the features of retailing and point of purchase stimuli or situations.

Shopper characteristics might include involvement, attitude and ethnicity and so on. Whileretailing features could encompass the store format, store size and locations as well. Thisstudy takes the impulse purchase tendency of student community as the buyer characteristicto find relation to external cues at time of in-store shopping.Broadly three different constructs are identified based on our secondary research to representthe store characteristics. These are the in-store promotional schemes and offers, the attractivestore displays, the floor merchandising. Another three constructs are selected to denote out ofstore influences through buyers general impulse buying reactions, occasion of buying andeffect of reference group influencing the purchase.

Accordingly the variables are developed in form of questions addressing the underlyingconstructs and through references to previous studies. (Beatty & Ferrel, 1998; Han, 1987;Rook & Hoch, 1985; Weun et al, 1997; Youn & Faber, 2000). Responses are measured usinga five-point Likert scale, which ranged from Strongly Disagree (1) to Strongly Agree (5).

SampleThe sample covered is 80 responses within the college among the student community. Thesurvey administration was done primarily online with additional surveys done door to door to

meet the set target.

The data analysis is carried out using the statistical tool of SPSS (Statistical package forSocial Sciences). Descriptive analysis has been carried out followed by factor analysis for thecomponent analysis. Then a reliability test is conducted on the variables determining thosefactors.

Limitations1. The sample was limited to the college premises and age group majorly belongs to that

of the student fraternity. Data collected in other areas may produce different results.2. The student shopping traits and their dependability on in-store displays or promotion

may differ on an individual basis.3. The study is limited to quantitative analysis. The survey asked them to answer the

questions based on their general impulse buying experience as far as they were awareof it. However Qualitative analysis could provide more results.


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Analysis and Discussion

Descriptive AnalysisBased on the questionnaire developed, the following variables fall under the respectiveconstructs indentified:

Construct 1 Promotional and discount schemes Variables 17, 7, 10, 21Construct 2 In-store attraction displays Variables 6, 11, 16, 19Construct 3 Merchandising actions Variables 8, 20, 14, 12, 15Construct 4 Impulse buying tendency/reactions Variables 1, 2, 5, 9Construct 5 Reference/accompanying group Variables 13, 4, 3Construct 6 Occasion of shopping Variables 18, 22, 23

A descriptive analysis of variables as per the constructs identified is shown below.

Descriptive Statistics ( Promotional and discount schemes )

N Minimum Maximum Mean Std. DeviationVAR00007 72 1.00 5.00 3.6780 .97274VAR00010 72 2.00 5.00 3.5085 .98913VAR00017 72 1.00 5.00 3.2203 1.09965VAR00021 72 1.00 5.00 3.3559 1.02994Valid N (listwise) 72

Mean: 3.44

The table for construct 1 shows that respondents rate promotional schemes relatively stronglyas influencing factor of their impulse buying behaviour in a supermarket.

Descriptive Statistics ( In-store attraction displays )

N Minimum Maximum Mean Std. DeviationVAR00006 72 1.00 5.00 3.3051 1.02140VAR00011 72 1.00 5.00 3.3051 1.11810VAR00016 72 1.00 5.00 3.1356 1.00786VAR00019 72 1.00 5.00 3.1017 1.07791Valid N (listwise) 72

Mean 3.21

The descriptive analysis for construct 2 shows that Instore attraction is not really aninfluencing factor.


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Descriptive Statistics( Merchandising actions )

N Minimum Maximum Mean Std. DeviationVAR00008 59 1.00 5.00 3.3559 1.02994VAR00012 59 1.00 5.00 3.4407 1.11836

VAR00014 59 2.00 5.00 3.5085 .97154VAR00015 59 1.00 5.00 3.4915 1.00641VAR00020 59 1.00 5.00 3.3051 1.23532Valid N (listwise) 59

Mean 3.42

Merchandising activities on the store floor is rated by the respondents as again a relativelystronger determinant in their impulse purchases.

Descriptive Statistics( Impulse buying tendency/reactions )

N Minimum Maximum Mean Std. DeviationVAR00001 59 1.00 5.00 3.1356 1.12123VAR00002 59 1.00 5.00 3.7797 1.01824VAR00005 59 1.00 5.00 2.8305 1.10098VAR00009 59 1.00 5.00 3.7288 .90650Valid N (listwise) 59

Mean 3.36

Descriptive Statistics( Reference/accompanying group )

N Minimum Maximum Mean Std. Deviation

VAR00003 59 1.00 5.00 3.0508 1.18064VAR00013 59 1.00 5.00 3.2712 .94377VAR00004 59 2.00 5.00 3.9831 .62949Valid N (listwise) 59

Mean 3.44

Descriptive Statistics( Occasion of shopping )

N Minimum Maximum Mean Std. DeviationVAR00018 59 1.00 5.00 3.5254 .93506VAR00022 59 1.00 5.00 3.7966 1.01335

VAR00023 59 1.00 5.00 3.7797 .78932Valid N (listwise) 59

Mean 3.7


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Data reduction and reliability test

The following section shows the Principal component analyses with Varimax rotationconducted for the variables.

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .615

Bartlett's Test ofSphericity

Approx. Chi-Square 521.980Df 253Sig. .000

Communalities

Initial ExtractionVAR00001

1.000 .635VAR00002 1.000 .821VAR00003 1.000 .775VAR00004 1.000 .715VAR00005 1.000 .662VAR00006 1.000 .732VAR00007 1.000 .561VAR00008 1.000 .710VAR00009 1.000 .716VAR00010 1.000 .564VAR00011 1.000 .816

VAR00012 1.000 .738VAR00013 1.000 .643VAR00014 1.000 .653VAR00015 1.000 .715VAR00016 1.000 .844VAR00017 1.000 .733VAR00018 1.000 .783VAR00019 1.000 .646VAR00020 1.000 .712VAR00021 1.000 .677VAR00022 1.000 .722

VAR00023 1.000 .773Extraction Method: Principal Component Analysis.

Total Variance Explained

Component

Initial Eigen valuesExtraction Sums of Squared

Loadings Rotation Sums of Squared Loadings

Total% of

VarianceCumulative

% Total% of

VarianceCumulative

% Total% of

VarianceCumulative

%1 5.315 23.111 23.111 5.315 23.111 23.111 2.890 12.564 12.5642 2.363 10.275 33.386 2.363 10.275 33.386 2.653 11.537 24.1013 1.899 8.258 41.644 1.899 8.258 41.644 2.223 9.664 33.7654 1.705 7.412 49.056 1.705 7.412 49.056 2.006 8.721 42.4865 1.402 6.096 55.151 1.402 6.096 55.151 1.872 8.139 50.624


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6 1.358 5.904 61.056 1.358 5.904 61.056 1.660 7.219 57.8447 1.243 5.403 66.459 1.243 5.403 66.459 1.552 6.749 64.5938 1.063 4.620 71.078 1.063 4.620 71.078 1.492 6.486 71.0789 .984 4.277 75.356

10 .817 3.553 78.909

11 .718 3.121 82.02912 .651 2.831 84.86013 .570 2.477 87.33714 .505 2.198 89.53515 .462 2.008 91.54316 .426 1.852 93.39417 .350 1.520 94.91418 .315 1.370 96.28419 .259 1.125 97.40920 .219 .951 98.36121 .147 .640 99.001

22 .120 .523 99.52423 .109 .476 100.000

Extraction Method: Principal Component Analysis.

Rotated Component Matrix (a)

Component

1 2 3 4 5 6 7 8VAR00015 .777VAR00008 .717VAR00014 .670VAR00001 .622VAR00012 .469 .464VAR00009 .778VAR00023 .721VAR00007 .706VAR00021 .632VAR00016 .832VAR00017 .486 .689VAR00010 .496VAR00019 .712VAR00006 .833VAR00011 .452 .458VAR00020 .803VAR00002 .458 .542VAR00004 .785VAR00013 .700VAR00003 -. 697VAR00005 .816VAR00022 .450 -.566VAR00018 .445 .503

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

a Rotation converged in 21 iterations.


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It is known that t he interpretability of a component is improved if it is measured by at least threevariables, when all of the variables that load on the component have the same conceptual meaning,when the conceptual meaning of other components appear to be measuring other constructs, and whenthe rotated factor pattern shows simple structure, i.e. each variable loads significantly on only one

component.

It can be seen from the factor analysis above the variables load onto eight components i.e. thenumber of factors revealed is eight. The eight components account for 70% of the total

percent variance in the dataset. Once we have an interpretable pattern of loadings, we namethe factors or components according to their substantive content or core. The factors shouldhave conceptually distinct names and content. Variables with higher loadings on a factorshould play a more important role in naming the factor.

As per the analysis then the variables that form a factor and the consequent name given to

the factor is as follows

Factor # Component name1 Merchandising Variables 15, 8, 14, 1, 122 Schemes and discounts Variables 9, 23, 7, 213 Visual Stimuli

Clearance sign/ symbolsVariables 16, 17, 10

4 In store attractivedisplays

Variables 19, 6, 11

5 - Variables 20, 26 Influencer group Variables 4, 137 Occasion for buying Variables 5, 22, 188 - Variable 3

Once the data reduction of variables to one component each is performed internal consistencyis checked using Cronbachs alpha to ensure the reliability of data reduction. Briefly, internalconsistency is the extent to which the individual items that constitute a test correlate with oneanother or with test total. In the social sciences, one of the most widely used indices ofinternal consistency is coefficient alpha or Cronbach's alpha. The general rule of thumb isthat it must be above 0.70 in order to be judged adequate.

Factor 1(Merchandising on floor of store)

Reliability Statistics

Cronbach's Alpha

Cronbach's Alpha Based

onStandardized

Items N of Items.768 .771 5


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Item Statistics

Mean Std. Deviation NVAR00015 3.4915 1.00641 72VAR00014 3.5085 .97154 72VAR00008 3.3559 1.02994 72VAR00012 3.4407 1.11836 72VAR00001 3.1356 1.12123 72

Factor 2 (Schemes and discounts)Reliability Statistics

Cronbach's

Alpha


onStandardized


Item Statistics

Mean Std. Deviation NVAR00009 3.7288 .90650 72VAR00023 3.7797 .78932 72VAR00021 3.3559 1.02994 72VAR00007 3.6780 .97274 72

Factor 3 (Visual Stimuli: Clearance signs/ symbols)


Cronbach's Alpha


onStandardized


Item Statistics

Mean Std. Deviation NVAR00016 3.1356 1.00786 72VAR00017 3.2203 1.09965 72VAR00010 3.5085 .98913 72


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Factor 4(In store attractive displays)


Cronbach's Alpha

Cronbach's

Alpha BasedonStandardized


Item Statistics

Mean Std. Deviation NVAR00011 3.3051 1.11810 72VAR00019 3.1017 1.07791 72VAR00006 3.3051 1.02140 72

Factor 7 (Occasion for buying)


Cronbach's Alpha(a)


onStandardized

Items(a) N of Items.561 .570 3

Item Statistics

Mean Std. Deviation NVAR00022 3.7966 1.01335 72VAR00018 3.5254 .93506 72VAR00005 3.1356 1.12123 72

The above reliability tests show that the factors 1, 2, 3 namely merchandising on floor ofstore, schemes and discounts and visual stimuli: clearance signs/ symbols are the onlycomponents obtained from factor analysis which satisfy the reliability test.


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Conclusion

Since Indian retail market is continuously increasing, people are purchasing goods sincethere is increase in income of common people as well as change in tastes and preferences ofconsumers. It is important for the retail players to be able to understand the different factorsaffecting the extent in impulse buying behaviour. The results of the factor analysis indicatethat the factor 1 which is the merchandising on the floor is a determinant of impulse purchase

behaviour. The factor includes increased tendencies due to activities such as designeddisplays at the shop windows, attractive and eye catching merchandise stocking and displayof product in-store.Factor 2 includes various schemes like (buy 1 get 1 free), various festival season discounts,kind of product being bought, effective pricing and discounting strategy. This shows thatimportance of influence promotional schemes on buying behaviour of customers. Factor 3which is clearance and sale signs and banners includes any event organized by organizationto promote sales, strategic placing of the articles, the brand image of product and emotional

appeal of the advertisements.


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ReferencesCrispen, M. T. (July, 2009). In-store shopping environment and impulsive buying. African Journal of

Marketing Management , Vol. 1(4) pp. 102-108 .

RICHARD E. NISBETT, D. E. (1969, Vol. 12, No. 4). OBESITY, FOOD DEPRIVATION, AND SUPERMARKET.

Journal of Personality and Social Psychology .

Rook, D. W. (Sept, 1987). The Buying Impulse. Journal of Consumer Research, Volume 14, no.2 ,189,199.

Willett, D. T. ((Feb., 1967)). Customer Impulse Purchasing Behavior. Journal of Marketing Research,

Vol. 4, No. 1 , pp. 21-31.


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Appendix

StronglyDisagree(1)

Disagree(2)

Does notmatter(3)

Agree(4)

StronglyAgree(5)

1. I go shopping to change mymood.

2. I feel a sense of excitementwhen I make an impulse

purchase.3. My co-shopper makes me

actively search forcomplimentary products most ofthe times.

4. The person with whom you are

going for shopping influences buying behaviour.5. After I make an impulse

purchase I feel regret.6. I tend to rely on store displays

when I make a decision to purchase product.

7. Sale/clearance signs entice meto look through the product.

8. I tend to choose which store toshop in depending on eye-catching window displays.

9. Various schemes like (buy 1 get1 free) to make prices attractiveaffects my buying behaviour

positively.10. When I see a special promotion

sign, I go to look at that product(Advertisement of product in

print and visual media attractsme to buy).

11. When I see product that I likeon in-store form/mannequindisplay, I tend to buy it.

12. I tend to try on product thatcatches my eye when I pass byit.

13. Comments of reference groupinfluence my buying behaviour.

14. When I walk along the isle, Itend to look through the product

placed close to me.(placing of

product attracts)15. I feel compelled to enter the


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store when I see an interestingwindow display.

16. When I see product featuring anew style or design on display, Itend to buy it.

17. I am more likely to make anunintended purchase if the

product has a sale or clearancesign.

18. I make unplanned purchasesmore in festivals or for specialoccasions

19. I get an idea of what I want to buy after looking through the in-store mannequin displays.

20. When I see product that catchesmy eye I tend to try it withoutlooking through the wholesection.

21. If I see an interesting promotional offer (reduced price, sales promotion, and etc.)on in-store signs (Hording and

pamphlets of product), I tend to buy.

22. Special occasion motivates me

to buy it.23. Various festivalsdeals/discounts on productinduce purchase of product.

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