CONSUMER BEHAVIOUR AND BUYING DECISION MAKING

By

Hetal Machhi
Faculty
SEMCOM College
Vallabh Vidyanagar
E-mail : hetai001@yahoo.com
&
Vikram Jain
Area Sales Manager (Gujarat)
Jineshwar Writing Instrument Ltd.
Mumbai
 

Marketing in India is growing through an indefinable phase. In addition to this is the changing role of consumer (from the  " Karta" of the family to the kid) in making decision and the way in which the new generation Indian consumer behaves. In today's global marketing era, where market is offering, diversity of consumer preference, his decision has become more important in changing environment. Many new upcoming trends have been seen in these decades. According to the data provided by (NCAER) latest Indian market demographics report 2002 in the period from 1998-99 to 1999-2000, the purchase of white goods rose 103 & in south India, but just 0.4 % in the north and actually fell 15.5 % in the west. In other words, the potential in the north and the west is truly large. With income levels rising- especially in the post- reforms period- the number of upper-medium and high-income households rose from 4.1 % of the total numbers of households in 1989-90 to 11 .9 in 1998-99. The pattern of consumption has also undergone a sea change. Similarly, the number of low-income households, that is households with an annual income of less than Rs 35,000 per year, has fallen from 58.2 % in 1992-93 to 39.7 % in 1998-99.

Since income levels is going up, leisure and luxury market have boomed in the recent times.

INCOME LEVEL:

(All figure in %)
 

A traditional family in India is different from a western family in that the " empty nest" stage of the family life cycle is not very common. The decision making process for the purchasing of consumer durables is quite elaborate, as many members with their diverse view are involved in it. At the same time, the characteristics of Indian families are changing under the influence of external factors such as liberalization and media explosion. Indian families are presently in a state of flux, shifting from being strictly hierarchical to more egalitarian in character. This is all because of a sea change in the structure of income distribution where:

• High-income class is expanding very fast.
• Middle-income classes bulging in size more so in rural India.
• During the post reform period the rate of growth in the upper income categories was much higher, compared to the corresponding decline in the size of the low-income class.  The growth of the top most income class after 1995-96 has been of the order of about 19 %.
• A significant negative growth in the urban low-income class was observed in south and west India, followed by north India. A decline of over 15 % points in Karnataka , Punjab, Haryana , and Tamil Naidu.

RURAL –URBAN DIVIDE:

• The rural markets are growing. However the level of infrastructure development (including that of the services sector) and performance of agriculture will determine their further growth.
• Availability of electricity alone is a critical factor for durable ownership.

THE FMCG MARKET [1990'S]

• During the 1990's the rural segment of the FMCG market has grown steadily at over 3 % per annum.
• Market size for products with lower penetration and consumption levels has grown at over 40 % per annum during the later half of the 1990's. Significantly such products are at the higher side of the price line.
• There is other such as washing materials and toothpaste, where substitution effects are observed to have taken place.

REGIONAL DISTRIBUTION OF FAST MOVING CONSUMER GOODS 1998-99 ( IN % )
 

North – 30.35
Haryana - 2.02
Madhya pradesh - 6.28
Uttar Pradesh - 14.75
Delhi - 3.55

South -25.41
Andra Pradesh - 10.20
Tamil Naidu - 7

West - 25.28
Gujarat - 5.53
Maharashtra - 15.0

East - 18.95
Bihar - 5.26
West Bengle -9.18

Consumer Decision making [CDM] is helpful for the marketer to focus on a specific stage of the process. Even an established brand like " Her0 Honda" will have to maintain " top-of-the –mind" recall through constant advertising and continue with its demonstration at a retail outlet.

The roles played by members of the family varies with demographics parameters as well as with the typed of products. While a number of psychological variables are useful in obtaining into consumer's psyche, it is worthwhile to probe into some specific aspects of consumer decision making in order to formulate marketing strategies. CDM enables marketers to visualize a broad framework of stage and apply psychological or/ and group variables to a specific product/ market/ brand situation. The influencer plays an important role in CDM. Unlike the organizational buying process, in the case of a family, the influencer do not usually have expertise but assume their respective roles on the basis of the family dynamics.
 

The role of an influencer spans across stages II and III of the CDM process.

Once the decision to buy a particular consumer durable product is made and announced. Family members may provide what information is available to them about the product, and may even be assigned to gather information. For collecting additional data, the influencers may use any of the four basis sources of information, viz, personal, commercial, public and experiential. The degree of acceptance of the information and the preference of the influencers may, however, vary. The entire family member will act as a influencer. The moderator (Whom the influencers confine) May be instructed to collect the desired information.

OCCUPATIONAL DEMOGRAPHICS-CRITICAL TO MARKET GROWTH STRATEGIES:

• Irrespective of the economic scenario, the salaried-class households have consistently contributed to the growth in consumer markets.
• The services and industrial sectors are the most likely growth providers in the year ahead and that is where the salaried-class households, numbering over 35 million, characterized by their fixed and regular income flow, hold significance.

CONCLUSION:

New generation of consumer believes in " My- Society" as compare to old generation belief " My-self". Their buying behavior is " I like-So I buy" , enjoyment or " is it  good to me and my society?.

Marketer's implication for such upcoming generation is:

• Commoditisation of brands: Routine items and white goods will be bought on price, accessibility and not for brand values.
• Novelty will not be a reason for trial: The new generation consumer will try to simplify complexity by dropping into routine behaviors.
• Brand will be for pleasure: Brand will have to redefine role, where consumers are physically more satisfied and psychologically more confidant.
• Evaluation parameter of brand will change: When consumers are going to continuously ask about the long-term safety/ effects of using product.

References:

Dimensions of buying roles in family decision-making – Management Review, Vol 15,No.4-December 2003.

Changing Profile of the Indian Consumer-Indian Management" The journal of the all India Management Association", Vol 42, Issue-5, May 2003.

Buying Behaviors in the Hinterland- Indian Management " The journal of the all India Management Association", Vol 41, Issue-7, December 2002.

Conceptual Issues in Consumer Behavior- The Indian Context-
 S. Ramesh Kumar.
 

Hetal Machhi
Faculty
SEMCOM College
Vallabh Vidyanagar
E-mail : hetai001@yahoo.com
&
Vikram Jain
Area Sales Manager (Gujarat)
Jineshwar Writing Instrument Ltd.
Mumbai
 

Source : E-mail April 13, 2004

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