21PMBSE033 OVERSEAS BUYING BEHAVIOUR

UNIT I INTRODUCTION 9 Buyer Behavior: Introduction, Meaning

& Definition, Nature & Scope, Buyer Behavior Process, Conceptual
Framework, Models of buyer Behavior, Inter Disciplinary Approach,
Buyer Research, Methods of Data Collection, Data Analysis, Report
Preparation.
CONSUMER BEHAVIOUR  UNIT 1

The term consumer behaviour, individual buyer behaviour, end user

behaviour and consumer buying behaviour all stands for the same.
Consumer behaviour is the study of how individuals, groups and
Organisation select buy, use and dispose of goods and services, ideas
or experiences to satisfy their needs and wants.

Consumer behaviour may be defined as the decision process and

physical activity individuals engage in when evaluating, acquiring,
using or disposing of goods and services.

According to Belch and Belch "consumer behaviour is 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".
Nature of Consumer Behaviour: 
Systematic process : Consumer behaviour is a systematic process
relating to buying decisions of the customers. The buying process
consists of the following steps : 

 Need identification to buy the product 

 Information search relating to the product 
 Listining and evaluating the alternative 
 Purchase decision 
 Post purchase evaluation by the marketer

Influenced by various factors : Consumer behaviour is influenced by a

number of factors the factors that influence consumers include
marketing, personal, psychological, situational, social and cultural
etc. 

Different for different customers   : All consumers do not behave in

the same manner. Different consumers behave differently. The
different in consumer behaviour is due to individual factors such as
nature of the consumer's lifestyle, culture etc. 

Different for different products  : Consumer behaviour is different for

different products there are some consumers who may buy more
quantity of certain items and very low quantity of some other items. 
Vary across regions  : The consumer behaviour vary across States,
regions and countries. For instance, the behaviour of urban consumers
is different from that of rural consumers.  normally rural consumers
are conservative (traditional) in their buying behaviour.

Vital for marketers  : Marketers need to have a good knowledge of

consumer behaviour they need to study the various factors that
influence consumer behaviour of the target customers. The knowledge
of consumer behaviour enables marketers to take appropriate
marketing decisions. 

Reflect status  : Consumer buying behaviour is not only influenced by

status of a consumer coma but it also reflect it. Those consumers who
owned luxury cars, watches and other items are considered by others
as persons of higher status. 

Result in spread effect  : Consumer behaviour as a spread effect. The

buying behaviour of one person may influence the buying behaviour
of another person. For instance, a customer may always prefer to buy
premium brands of clothing, watches and other items etc. This may
influence some of his friends, neighbours and colleagues. This is one
of the reasons why marketers use celebrities like Shahrukh Khan,
sachin to endorse their brands.

Undergoes a change : The consumer behaviour undergoes a change

over a period of time depending upon changes in age , education and
income level etc, for example, kids may prefer colourful dresses but
as they grow up as teenagers and young adults, they may prefer trendy
clothes. 

Information search : Search for information is a common consumer

behaviour. Consumers cannot purchase goods and services if they are
unaware that a good or service exists. When a consumer decides to
buy a certain item, his decision must be based on the information he
has gethered about what products our services are available to fulfill
his needs. There might be a product available that would be better
suited to the consumers needs, but if he is an aware of product, he will
not buy it. 

Brand loyalty : Brand loyalty is another characteristic of consumer

behaviour. Brand loyalty is the tendency of a consumer to buy
product products or services from a certain company that one likes or
equates with having high quality goods and services. For example, if
Naina's first car was a Honda as a teenager and the car lasted 200,000
miles, she might have a tendency to buy hondas again in the future
due to her previous positive experience. This brand loyalty may be so
strong that she forgoes the information search all together when
considering for next vehicle.
Scope of Consumer Behaviour: 

1) Consumer behaviour and marketing management : Effective

business managers realise the importance of marketing to the success
of their firm. A sound understanding of consumer behaviour is
essential to the long run success of any marketing program. In fact, it
is seen as a comerstone of the Marketing concept, an important
orientation of philosophy of many marketing managers. The essence
of the Marketing concept is captured in three interrelated  orientations
consumers needs and wants, company integrated strategy. 

2) Consumer behaviour and non profit and social marketing : In

today's world even the non-profit organisations like government
agencies, religious sects, universities and charitable institutions have
to market their services for ideas to the "target group of consumers or
institution." At other times these groups are required to appeal to the
general public for support of certain causes or ideas. Also they make
their contribution towards eradication of the problems of the society.
Thus a clear understanding of the consumer behaviour and decision
making process will assist these efforts.

3) Consumer behaviour and government decision making : In recent

years the relevance of consumer behaviour principles to government
decision making. Two major areas of activities have been affected: 
i) Government services: It is increasingly and that government
provision of public services can benefit significantly from an
understanding of the consumers, or users, of these services.
ii) consumer protection: Many Agencies at all levels of government
are involved with regulating business practices for the purpose of
protecting consumers welfare.

4) Consumer behaviour and demarketing: It has become increasingly

clear that consumers are entering an era of scarcity in terms of some
natural gas and water. These scarcities have led to promotions
stressing conservation rather than consumption. In other
circumstances, consumers have been encouraged to decrease or stop
their use of particular goods believed to have harmful effects.
Programs designed to reduce drug abuse, gambling, and similar types
of conception examples. These actions have been undertaken by
government agencies non profit organisations, and other private
groups. The term "demarketing" refers to all such efforts to encourage
consumers to reduce their consumption of a particular product or
services.

5) Consumer behaviour and consumer education: Consumer also

stands to benefit directly from orderly investigations of their own
behaviour. This can occur on an individual basis or as part of more
formal educational programs. For example, when consumers learn
that a large proportion of the billions spend annually on grocery
products is used for impulse purchases and not spend according to pre
planned shopping list, consumers may be more willing to plan effort
to save money. In general, as marketers that can influence consumers'
purchases, consumers have the opportunity to understand better how
they affect their own behaviour.
Importance of consumer behaviour:
1) production policies: The study of consumer behaviour effects
production policies of enterprise. Consumer behaviour discovers the
habits, tastes and preferences of consumers and such discovery
enables and enterprise to plan and develop its products according to
these specifications. It is necessary for an enterprise to be in
continuous touch with the changes in consumer behaviour so that
necessary changes in products may be made.

2) Price policies: The buyer behaviour is equally important in having

price policies. The buyers of some products purchase only because
particular articles are cheaper than the competitive articles available
in the market.

3) Decision regarding channels of distribution: The goods, which are

sold and solely on the basis of low price mast and economical
distribution channels. In case of those articles, which week T.V. sets,
refrigerators etc. Must have different channels of distribution. Thus,
decisions regarding channels of distribution are taken on the basis of
consumer behaviour.

4) Decision regarding sales promotion: Study of consumer behaviour

is also vital in making decisions regarding sales promotion. It enables
the producer to know what motive prompt consumer to make
purchase and the same are utilised in promotional campaigns to
awaken desire to purchase.

5) Exploiting marketing opportunities: Study of consumer behaviour

helps the marketers to  understand the consumers needs, aspirations,
expectations, problems etc. This knowledge will be useful to the
marketers in exploiting marketing opportunities and meeting the
challenges of the market.

6) Consumer do not always act or react predictably: The consumers of

the past used to react to price levels as if price and quality had
positive relation. Today, week value for money, lesser price but with
superior features. The consumers response indicates that the shift had
occurred.

7) Highly diversified consumer preferences: This shift has occurred

due to availability of more choice now. Thus study of consumer
behaviour is important to understand the changes.

8) Rapid introduction of new products: Rapid introduction of new

product with technological advancement has made the job of studying
consumer behaviour more imperative. For example, the information
Technologies are changing very fast in personal computer industry.

9) Implementing the "Marketing concept": This calls for studying the

consumer behaviour, all customers need have to be given priority.
Thus identification of target market before production becomes
essential to deliver the desired customer satisfaction and delight.

Applications of consumer behaviour: 

1) Analysing market opportunity: Consumer behaviour study help in
identifying the unfulfilled needs and wants of consumers. This
requires examining the friends and conditions operating in the
Marketplace, consumers lifestyle, income levels and energy
influences. This may reveal unsatisfied needs and wants. Mosquito
repellents have been marketed in response to a genuine and unfulfilled
consumer need.

2) Selecting target market: Review of market opportunities often

helps in identifying district consumer segments with very distinct and
unique wants and needs. Identifying these groups, behave and how
they make purchase decisions enable the marketer to design and
market products or services particularly suited to their wants and
needs. For example, please sleep revealed that many existing and
potential shampoo users did not want to buy shampoo fax price at rate
60 for more and would rather prefer a low price package containing
enough quantity for one or two washers. This finding LED companies
to introduce the shampoos sachet, which become a good seller.

3) Marketing-mix decisions: Once unsatisfied needs and wants are

identified, the marketer has to determine the right mix of product,
price, distribution and promotion. Where too, consumer behaviour
study is very helpful in finding answers too many preplexing
questions. The factors of marketing mix decisions are:
i) product ii) price iii) promotion iv) distribution

4) Use in social and non profits marketing: Consumer behaviour

studies are useful to design marketing strategies by social,
governmental and not for profit organisations to make their
programmes more effective such as family planning, awareness about
AIDS.
Far too often, retailers think that consumer buying is randomized.
That certain products appeal to certain customers and that a purchase
either happens or it doesn’t. They approach product and service
marketing in the same way, based on trial and error. What if there
were a distinctive set of steps that most consumers went through
before deciding whether to make a purchase or not? What if there was
a scientific method for determining what goes into the buying process
that could make marketing to a target audience more than a shot in the
dark?
The good news? It does exist. The actual purchase is just one step. In
fact, there are six stages to the consumer buying process, and as a
marketer, you can market to them effectively.

1.Problem Recognition
Put simply, before a purchase can ever take place, the customer must
have a reason to believe that what they want, where they want to be or
how they perceive themselves or a situation is different from where
they actually are. The desire is different from the reality – this
presents a problem for the customer.
However, for the marketer, this creates an opportunity. By taking the
time to “create a problem” for the customer, whether they recognize
that it exists already or not, you’re starting the buying process. To do
this, start with content marketing. Share facts and testimonials of what
your product or service can provide. Ask questions to pull the
potential customer into the buying process. Doing this helps a
potential customer realize that they have a need that should be solved.

2. Information Search
Once a problem is recognized, the customer search process begins.
They know there is an issue and they’re looking for a solution. If it’s a
new makeup foundation, they look for foundation; if it’s a new
refrigerator with all the newest technology thrown in, they start
looking at refrigerators – it’s fairly straight forward.
As a marketer, the best way to market to this need is to establish your
brand or the brand of your clients as an industry leader or expert in a
specific field. Methods to consider include becoming a Google
Trusted Store or by advertising partnerships and sponsors prominently
on all web materials and collaterals.
Becoming a Google Trusted Store, like CJ Pony Parts – a leading
dealer of Ford Mustang parts – allows you to increase search rankings
and to provide a sense of customer security by displaying your status
on your website.
Increasing your credibility markets to the information search process
by keeps you in front of the customer and ahead of the competition.

3. Evaluation of Alternatives
Just because you stand out among the competition doesn’t mean a
customer will absolutely purchase your product or service. In fact,
now more than ever, customers want to be sure they’ve done thorough
research prior to making a purchase. Because of this, even though
they may be sure of what they want, they’ll still want to compare
other options to ensure their decision is the right one.
Marketing to this couldn’t be easier. Keep them on your site for the
evaluation of alternatives stage. Leading insurance provider
Geico allows customers to compare rates with other insurance
providers all under their own website – even if the competition can
offer a cheaper price. This not only simplifies the process, it
establishes a trusting customer relationship, especially during the
evaluation of alternatives stage.

4. Purchase Decision
Somewhat surprisingly, the purchase decision falls near the middle of
the six stages of the consumer buying process. At this point, the
customer has explored multiple options, they understand pricing and
payment options and they are deciding whether to move forward with
the purchase or not. That’s right, at this point they could still decide to
walk away.
This means it’s time to step up the game in the marketing process by
providing a sense of security while reminding customers of why they
wanted to make the purchase in the first time. At this stage, giving as
much information relating to the need that was created in step one
along with why your brand, is the best provider to fulfill this need is
essential.
If a customer walks away from the purchase, this is the time to bring
them back. Retargeting or simple email reminders that speak to the
need for the product in question can enforce the purchase decision,
even if the opportunity seems lost. Step four is by far the most
important one in the consumer buying process. This is where profits
are either made or lost.

5. Purchase
A need has been created, research has been completed and the
customer has decided to make a purchase. All the stages that lead to a
conversion have been finished. However, this doesn’t mean it’s a sure
thing. A consumer could still be lost. Marketing is just as important
during this stage as during the previous.
Marketing to this stage is straightforward: keep it simple. Test your
brand’s purchase process online. Is it complicated? Are there too
many steps? Is the load time too slow? Can a purchase be completed
just as simply on a mobile device as on a desktop computer? Ask
these critical questions and make adjustments. If the purchase process
is too difficult, customers, and therefore revenue, can be easily lost.

6. Post-Purchase Evaluation
Just because a purchase has been made, the process has not ended. In
fact, revenues and customer loyalty can be easily lost. After a
purchase is made, it’s inevitable that the customer must decide
whether they are satisfied with the decision that was made or not.
They evaluate.
If a customer feels as though an incorrect decision was made, a return
could take place. This can be mitigated by identifying the source of
dissonance, and offering an exchange that is simple and
straightforward. However, even if the customer is satisfied with his or
her decision to make the purchase, whether a future purchase is made
from your brand is still in question. Because of this, sending follow-
up surveys and emails that thank the customer for making a purchase
are critical.
Take the time to understand the six stages of the consumer buying
process. Doing this ensures that your marketing strategy addresses
each stage and leads to higher conversions and long-term customer
loyalty.
Consumer research process
Developing Research Objectives

The first step in the consumer research process is developing the

research objectives which involves defining the purposes and
objectives to ensure an appropriate design. A statement of objective
helps to define the type and level of information needed.
Collect Secondary Data
There are two distinct sources of secondary data − internal and
external. Always seek internal sources first. Most go straight to
Google without considering the fact that data might exist within the
organization itself. This can sometimes be in the ‘heads’ of the
personnel.
External Sources
External sources are numerous. Consumer Generated Media (CGM),
especially, has grown in importance as a data source. The key is to
avoid spending too much time following ‘blind alleys’. This is where
the time and cost can escalate sharply.
 Directories
 Country information
 Published marketing research reports
 News sources
 CGM (Newsgroups, blogs, groups)
 Internet – single search engines, and multiple search
engines
Primary Research
Primary research is basically the original research. Here you yourself
collect the information through various tools available. In primary
research, you don’t tend to depend on any third parties. You may
conduct interviews or surveys, observe, or even directly go to the
object for collecting information.
Quantitative Research
A quantitative research study is comprised of research design, the data
collection methods, instruments to be used, and the sample design.
Following are the three basic designs or approaches used for
quantitative design −
 Observational Research − In this method of observational
research, the people or customers are observed effectively
when they purchase a particular product. It helps the
researcher to gain in-depth understanding of the
relationship between the people and products by observing
them while purchasing and using the product.
 Experimentation − Experimentation is a type of research
where only certain variables are manipulated while others
are kept constant in order to encourage the change in the
constant variable
 Surveys − A survey is a method of research in which an
interviewer interacts with respondents to obtain facts,
opinions and attitudes.
Following are the various survey methods which are generally used −
 Personal interview survey
 Telephone survey
 Mail surveys
  Online surveys
 Quantitative research data collection instruments

Data Collection Instruments for Quantitative Research Data

Questionnaire and Attitude Scale − For quantitative research the

primary data collection instrument is a questionnaire and the most
frequent one is attitude scale which is used to capture evaluative data.
Following are the important methods of data collection in the
qualitative design techniques which are used in the initial stages of
research.
 In-Depth Interview − Depth interview is conducted in
length and in a non-structured manner where the
interviewer is highly trained and minimizes his own
participation in the discussion once the general subject is
discussed.
 Focus Group − Focus group involves many respondents
who interact with the analyst in a group discussion and
focuses on a particular product.

Projective Techniques

Projective techniques are best used to understand the motives of

people when they are unconsciously rational.
The analyst generally analyzes and reports his findings based on the
responses received in qualitative research whereas in quantitative
analysis, the researchers oversees the complete research, analyses the
open ended questions, classifies the responses and systematically
tabulate them.
conceptual framework 

A conceptual framework illustrates the expected relationship

between your variables. It defines the relevant objectives for
your research process and maps out how they come together to draw
coherent conclusions.
Data Collection Methods
To analyze and make decisions about a certain business, sales, etc.,
data will be collected. This collected data will help in making some
conclusions about the performance of a particular business. Thus, data
collection is essential to analyze the performance of a business unit,
solving a problem and making assumptions about specific things
when required. Before going into the methods of data collection, let
us understand what data collection is and how it helps in various
fields.

What is Data Collection?

In Statistics, data collection is a process of gathering information from
all the relevant sources to find a solution to the research problem. It
helps to evaluate the outcome of the problem. The data collection
methods allow a person to conclude an answer to the relevant
question. Most of the organizations use data collection methods to
make assumptions about future probabilities and trends. Once the data
is collected, it is necessary to undergo the data organization process.
The main sources of the data collections methods are “Data”. Data
can be classified into two types, namely primary data and secondary
data. The primary importance of data collection in any research or
business process is that it helps to determine many important things
about the company, particularly the performance. So, the data
collection process plays an important role in all the streams.
Depending on the type of data, the data collection method is divided
into two categories namely,

 Primary Data Collection methods

 Secondary Data Collection methods

In this article, the different types of data collection methods and their
advantages and limitations are explained.

Primary Data Collection Methods

Primary data or raw data is a type of information that is obtained
directly from the first-hand source through experiments, surveys or
observations. The primary data collection method is further classified
into two types. They are

 Quantitative Data Collection Methods

 Qualitative Data Collection Methods

Let us discuss the different methods performed to collect the data

under these two data collection methods.

Quantitative Data Collection Methods

It is based on mathematical calculations using various formats like
close-ended questions, correlation and regression methods, mean,
median or mode measures. This method is cheaper than qualitative
data collection methods and it can be applied in a short duration of
time.

Qualitative Data Collection Methods

It does not involve any mathematical calculations. This method is
closely associated with elements that are not quantifiable. This
qualitative data collection method includes interviews, questionnaires,
observations, case studies, etc. There are several methods to collect
this type of data. They are
Observation Method
Observation method is used when the study relates to behavioural
science. This method is planned systematically. It is subject to many
controls and checks. The different types of observations are:

 Structured and unstructured observation

 Controlled and uncontrolled observation

 Participant, non-participant and disguised observation

Interview Method
The method of collecting data in terms of verbal responses. It is
achieved in two ways, such as

 Personal Interview – In this method, a person known as an

interviewer is required to ask questions face to face to the other
person. The personal interview can be structured or
unstructured, direct investigation, focused conversation, etc.
 Telephonic Interview – In this method, an interviewer obtains
information by contacting people on the telephone to ask the
questions or views, verbally.
Questionnaire Method
In this method, the set of questions are mailed to the respondent. They
should read, reply and subsequently return the questionnaire. The
questions are printed in the definite order on the form. A good survey
should have the following features:

 Short and simple

 Should follow a logical sequence

 Provide adequate space for answers

 Avoid technical terms

 Should have good physical appearance such as colour, quality of

the paper to attract the attention of the respondent
Schedules
This method is similar to the questionnaire method with a slight
difference. The enumerations are specially appointed for the purpose
of filling the schedules. It explains the aims and objects of the
investigation and may remove misunderstandings, if any have come
up. Enumerators should be trained to perform their job with hard
work and patience.

Secondary Data Collection Methods

Secondary data is data collected by someone other than the actual
user. It means that the information is already available, and someone
analyses it. The secondary data includes magazines, newspapers,
books, journals, etc. It may be either published data or unpublished
data.
Published data are available in various resources including

 Government publications
 Public records

 Historical and statistical documents

 Business documents

 Technical and trade journals

Unpublished data includes

 Diaries
 Letters
 Unpublished biographies, etc.