Impulse of Impulse Behavior


By

Pramit Das
B.Com(H), MBA, PGDJMC, Fellow-HRD,CSMT, AIMA
Faculty Member-Marketing
ICFAI
 


Introduction – Impulse or Myth?

Why do I always find my wife and son at Bigbazar, when I can't find them at home? The reason is not that the distance is less than a kilometer. My wife, an ideal prey for today's retail format and my son at the age of three is deemed to be a consumer in his own right plays cat and mouse with my limited salary. Every time she purchased something big, she comes up with her smiling face to console me and with a same old excuse. She had gone for some grocery items and end up buying a new OTG. Every time whatever promises she made to me, she end up repeated the same story month after month. This introspection of my own family motivates me for the retrospection of others.

Impulse buying happens when you get trapped in a buildup situation propagated by effective retail communication or out of the mind discount offers and you buy without thinking much about it. Impulse items can be anything, a new product, samples or well-established products at surprising low prices. Research conducted by University of California tracks 30,000 purchases made by 4,200 customers who were engaged in a shopping trip in US reveals that 68% of their purchases were unplanned. A similar research conducted in UK by Point of Purchase Advertising International (POPAI) revealed that 70% of the purchase decisions were taken on spot in the store.

Impulse buying is such a sudden phenomenon where instinct plays a predominant role. A customer makes a purchase without proper planning or prior homework. This is the scenario that marketer and retailer try to capitalize and harness. They provide such impulsive stimuli which are packaged innovatively clubbed with basic needs and wants. In the name of instant gratification and glory customers are often victimized. Instincts are driven by emotions and emotions are driven by attitude and perception.

Impulse – The missing link

Impulse buying alters the normal decision making modules in consumers' mental space and rapture all consumer behaviour phylosophies. Consumer mental accounting is a process by which a customer codes, categorise and evaluate the financial outcome of a choise. Impulse upsets all the logical sequence of the consumers' actions and then is replaced with an irrational moment of self gratification and hence altering the age old time-tested theories. Impulse items appeal to the emotional side of consumers. Some items bought on impulse are not considered functional or necessary in the consumers' lives. Similarly why do I need an OTG, when I already have a microven?

Sometimes customers are not able to express the selection of their brand and might not be aware of his internal decision making. But an unconcious decision making process takes place in his mind which is influenced by cognition and experience. Thus impulse buying behaviour is very much tune with the psychological and physiological need of the customer.

According to American Marketing Association – "A purchase behavior that is assumed to be made without prior planning or thought. Often, it is claimed, impulse buying involves an emotional reaction to the stimulus object (product, packaging, point-of-purchase display, or whatever) in addition to the simple acquisition act.

Many researchers all round the globe are conducting research on impluse buying behavior of which Sunghwan Yi of University Guelph is one of them. He is conducting studies on various strategies adopted by the shoppers to restrict their impulse purchases. According to Yi, "If we can reduce the number of impulse purchases, we can start to reduce the onset of compulsive behaviour," Another important objective to initiate research on impulse is to reduce the tendency of impulse because it can be converted into compulsive behaviour. Make your customer dancing at your tunes.

Jacqueline J. Kacen, Professor of Department of Business Administration, University of Illinois, carried out a series of multi-country survey among the consumers of US, Australia and South-East Asia. He has tried to find out cross-cultural factors influencing impulse purchase behavior. The research abstract suggests, "Impulse buying generates over $4 billion in annual sales volume in the United States. With the growth of e-commerce and television shopping channels, consumers have easy access to impulse purchasing opportunities, but little is known about this sudden, compelling, hedonically complex purchasing behavior in non-Western cultures." At this context a natural question arise if cross-cultural influences are at all a factor that may trigger consumer's impulses not neglecting or undermining other correlated factors like attitude, perception, personality, emotion, and Self-Image. Personal significance of spot satisfaction is very important. So the influencing interferences of such factor cannot be negated. Impulse is not a US disease.

For half a century there has been a series of investigation conducted by consumer researcher to investigate empirical evidence of impulse, even though there hasn't been any significant break through.

Prof. Dennis W Rook and Prof. Robert J Fisher of University Chicago in the year 1995 through one of their article try to establish a conceptual and empirical framework of consumer Impulse. Theirs' research tried to knot a relationship between the consumers impulsiveness trait and associated buying behaviors attributes like demographic and psychological factors. The most prominent segment of the study is such relation becomes significant only when consumers considered that such impulse is appropriate. Impulse is so many occasions are followed by dissonance reducing behavior. Till date there has not been any significant research on the impulse behavior of Indian consumers on the context of retail revolution and which is almost simultaneous and coincidental.

Upsetting the process of Buying Behavior

Consumer behavior is a study of how individuals make decisions to spend their available resources (time, money and effort) on consumption of related items (What, why, when, where and how they buy and use such products and services). Also we need to understand, why consumers make the purchases that they make? What are the factors that influence consumer purchases? What is the changing factors in our society that guide such purchase behavior.

The 5 stages of consumer decision process are:

Problem Recognition / Awareness of Need: In this stage we identify the difference between the desired state and the actual condition. They are based on consumer's perception of what their actual state is and where they want to be. If you see a commercial for a Retail discount offer of Buy One – Get One (BOGO) in respect of some apparels brands, it will automatically stimulates your recognition that you need those.

Information search: It is based on two form of evaluation, Internal Information and  External Information. The sources of external information are memory, cognition and experiences. The sources of external information are Friends, Peer and relatives (which includes Viral / Bush fire Marketing), Advertising, PR, Event marketing, Catalogues, comparison-shopping; public sources etc. In case of impulse buying emotions block such internal computing

Evaluation of Alternatives: You need to establish criteria for evaluation, identify features and attributes you want to buy. You need to give rank or weightage, then find evaluative alternatives or resume a fresh search. The Expectancy Value model of attitude formation provides us how consumer evaluates products and services by combining their beliefs, attitudes, and attribute-based fascinations in respect to a brand. The customers fail to recognize the importance of alternative evaluations at this point of time in the case of impulse. It becomes a very important aspect in the post purchase stage of dissonance is outcome of such purchase. 

Purchase decision—In this stage the customer choose products from the buying alternatives (evoke set) but during impulse purchase decision take place even before problem recognition..

Post-Purchase Evaluation—The outcome can be either of two Satisfaction or Dissatisfaction and in case of dissatisfaction this stage is followed by evaluation of alternatives. Most of the dissatisfied impulse behavior is followed by a post mortem.

We can see impulse behaviour do not have a place if buyers behavior follow such systematic sequence. A study conducted in various branded retail outlets in 5 metro cities in India shows 54% of all sales are actually unplanned purchases. This is why the study of impulse purchase in Indian context is so important.

Impulse and Perception

Perception is a process by which the individual selects, organizes and interprets stimuli into a meaning and coherent picture of the world. The customer who is exposed to any of such marketing stimuli or an advertisement, the first reflex that is initiated in the customer's mind is known as sensation. Sensation is received by the five senses of the customer. The attributes that trigger sensation in the customer's mind can be product feature, price, and promotional attractiveness. Optimum quantum of sensational mix that ignites instinct is the absolute threshold. This absolute threshold must generate some emotional element that will eventually result into impulse.

Impulse and Attitude

Attitude is a complex mental state of readiness, organized through experience, creating a dynamic influence on the individual's response to all objects and situations to which it is related. Fishbein extended model 'Theory of reasoned action' explains the interrelationships of psychological factors and external factors that initiate purchase behavior.

Self Belief + Evaluation = Attitude
Self Perception + Referral Opinion = Subjective Norm
Attitude + Subjective Norm = Intention to perform action
The twisted from of this theory in terms of impulse purchase;
Self Belief + Instant Evaluation (optimum sensation) = Attitude
Self Perception + Self Opinion (absolute threshold) = Subjective Norm
Attitude + Subjective Norm = perform impulse action

Impulse and Promotions

Promotions and retail merchandising is the fearsome tool of generating sensation. The India Retail wave has supplemented the growth of Sales Promotion. More of advertising money is now pouring into marketing and promotion of retail brands. Most supermarket shelves are abuzz with more promos than merchandise and within the stricking distance to hunt a customer. Categories include, grocery items, juices and beverages, confectionery, leather goods, consumer durables, Apparels and jewelry items ready to aroused customers appetite to consume. On the other hand more and more retail consumers are ready for the best bargain of their lifetime. From both the frontiers retailer will generate impulse.

There can be several other reasons of such retail promotional mania.

1. To break the clutter of growing number of retail brands
2. Declining brand loyalty and customer becoming more promotional sensitive.
3. Brand proliferation and low top of the mind recall
4. Tendency to go back to unorganized retail.

Impulse – no looking back

In the midst of such economic insurrection new malls are coming every day and few hundred more are coming up in the next five years. Multiple retail formats have sprung up across different cities, city horizons are flooded with malls and shopping complexes. More and more will penetrate in semi urbanize and rural India emulating the Wal-Mart model.

Retail consumptions in India are mammoth, close to $200 billion. This $200 billion will expect to become $300 billion in the next few years. This is the era of Organised retail  and which is expected to grow at 40% for the next five years. If we go by the RAI statistics, India will witness impulse purchases amounting to $ 60 billion that is enough to electrify the whole of rural India. In late 1960s India witnessed Green Revolution, early 1980s witnessed White Revolution, Mall Revolution has just begun. Average Indian, as consumers become richer, younger, more ambitious and instinctive than before. Indian consumers are on the full stride in terms of their consumption levels that can surpass US consumption level in next 20 years.

In the past decade the Indian demographic pattern has changed not only in terms of income but also in terms of socio-cultural attributes and family lifecycles. The double incomes becoming a norm in urban areas, increased advertising and sales promotion have made buying more achievable and exhilarating to a larger portion of the population. In this context nobody dares to ask weather such promotional offer influence impulse behavior among urban customer or not. Through my diminutive research endeavor I would like focus whether today's urban class are carrying the same western syndrome "Impulse" and are becoming easy prey to the retail brands.

Let us find impulse

In order to find out the extend of impulse in retail consumer behavior, I have carried out a research work in Kolkata with the following objectives:

1. To study the quantum of impulse behavior
2. To determine the factors affecting such behavior.
3. To determine whether the customer buy more in planned purchases or in impulse behavior.

The survey was conducted in four retail brands in North and South Kolkata. There were 150 respondents in total, ages of the respondents varying between 20 to 40 years. This demographic represents young forward-looking Indian consumers who have more disposable income and more willingness to consume.

In the research it was observed that 119 customers on that day had made unplanned purchases.


Then we have done the regression analysis between the annual income and amount of retail purchases customer made on that particular day.

Regression Statistics : Annual Income & Retail Purchases

Multiple R

0.48

R Square

0.23

Observations

150


R value 0.46 signifies positive correlation between Annual income and retail purchase made on a particular day. R Square (coefficient of determination) is 0.22, which means that only 22% variation is retail purchase can be explained in terms of annual income.

Then we have concentrated our research only on the people who have conducted unplanned purchase. We have tried to find out the correlation of various factors associated with the unplanned retail purchases.

Then we have done the regression analysis between the Product Feature & price with amount of retail purchases customer made on that particular day. R square of product feature and retail purchase is .80 where else with price is only .22.

It is also seen that the average unplanned purchase is 2.5 times more than the planned purchase. To quantify emotional reaction was very difficult.

Conclusion

Playing with aggressive promotional campaign the retail brains in India are poised to rewrite the consumer behavior pattern targeting at the "Impulse Syndrome". The retail brands across the country incessantly positioned themselves in the middle-to-premium segment of the market in view of achieving such "impulse" objective triggering the unplanned purchases.

Consumer lifestyle, family life-cycles and cultural pattern is shifting in every average Indian cities and also in rural some rural pockets. An emergent segment economically well off, upwardly mobile consumers having similar needs, desires, fantasies and demand aspirations are looking for instant fulfillment. With satellite television, internet and mobile communication available in smaller cities and suburbs, people are ever more out in the open with the bare truth how the people in 'Wild West' lives. This is the future of modern retail in India characterized by impulse behavior. It gives a huge opportunity to the modern Indian retailers to aroused consumer emotion as day by day it is becoming ultimate mantra in the great Indian retail saga.

Reference

Marketing Management – 9th Edition – Philip Kotler

www.cbcnews.com

www.ibef.com

www.restore.dc.com
 


Pramit Das
B.Com(H), MBA, PGDJMC, Fellow-HRD,CSMT, AIMA
Faculty Member-Marketing
ICFAI
 

Source: E-mail April 10, 2008

          

Articles No. 1-99 / Articles No. 100-199 / Articles No. 200-299 / Articles No. 300-399 /
Articles No. 400-499 / Articles No. 500-599 / Articles No. 600-699 / Back to Articles 700 Onward
Faculty Column Main Page