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4DIJMS-Vol.-8,Issue-1 ISSN-2250-0669
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4D International Journal of Management and Science
ISSN No: 2250-0669
@4D Crossconnect.com, Inc, 2012
www.4dinternationaljournal.com
Vol. 8, Issue1, 2017
Effects of Consumer Buying Behaviour Durable Sellers
*Ajit Sharad Deshpande**Dr.Taruna Saxena
ABSTRACT
Manufacturers of consumer durables do tend to sell their consumer products with an eye
toward long term use by the buyer. At the same time, many of these manufacturers normally
provide documentation that defines what is considered reasonable use of the goods. This
serves to set the standard for how long a consumer can reasonably expect the items to
function, provided that the durables are not abused or utilized in an inappropriate manner.
Consumer durables involve any type of products purchased by consumers that are
manufactured for long-term use. As opposed to many goods that are intended for consumption
in the short term, consumer durables are intended to endure regular usage for several years or
longer before replacement of the consumer product is required.The same consumer behaves
differently for consumer durable and consumer durables.
Key words:lomg term use,consumption,consumer durables,replacement
*Research Scholar-Shri Venkateshwara University **Prof. & Director
INTRODUCTION
The consumer durables segment can be segregated into consumer electronics (TVs, LCD and
audio systems etc.) and consumer appliances (also known as white goods) like refrigerators,
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washing machines, air conditioners (A/Cs), microwave ovens, vacuum cleaners and dishwashers.
Over the years, demand for consumer durables has increased with rising income levels, double-
income families, changing lifestyles, availability of credit, increasing consumer awareness and
introduction of new models. Products like air conditioners are no longer perceived as luxury
products.
Most of the segments in this sector are characterized by intense competition, emergence of new
companies (especially MNCs), and introduction of state-of-the-art models, price discounts and
exchange schemes. MNCs continue to dominate the Indian consumer durable segment, which is
apparent from the fact that these companies command more than 65% market share in the color
television (CTV) segment. The biggest attraction for MNCs is the growing Indian middle class.
This market is characterized with low penetration levels. MNCs hold an edge over their Indian
counterparts in terms of superior technology combined with a steady flow of capital, while
domestic companies compete on the basis of their well-acknowledged brands, an extensive
distribution network and an insight in local market conditions.
One of the critical factors those influences durable demand is the government spending on
infrastructure, especially the rural electrification programme. Given the government's inclination
to cut back spending, rural electrification programs have always lagged behind schedule. This
has not favored durable companies till now. Any incremental spending in infrastructure and
electrification programs could spur growth of the industry
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('000*) 2004-05 2012-13
Category Rura
l
Urba
n
All
Indi
a
Rura
l
Urba
n
All
Indi
a
TVs
(colour)
48 304 121 185 723 347
Refrigerato
rs
35 335 120 65 717 262
Washing
machines
10 167 55 20 399 135
Sewing
machines
71 172 100 85 152 103
(m) 2004-05 2012-13
Category Rura
l
Urba
n
All
Indi
a
Rura
l
Urba
n
All
Indi
a
TVs
(colour)
5.9 14.9 20.8 25.7 43.5 69.1
Refrigerato
rs
4.3 16.4 20.6 9.0 43.1 52.2
Washing
machines
1.2 8.2 9.5 2.8 24.0 26.9
Sewing
machines
8.7 8.4 17.2 11.8 9.1 20.5
Source: NCAER, * households
COMPETITION IN THE INDUSTRY
The entry of multinationals like LG, Sony, SHARP, Samsung, Hairier, Thomson, Hitachi, TCL,
Videocon etc into the Indian market, coupled with production capacities, is expected to push
supply and lower prices of LCD TV till festive season. Due to significant higher capacity and
intense competition, the ability of players to increase prices will be extremely restricted. As a
result, sales margins are expected to remain under considerable pressure.
The basis of competition for the CONSUMER DURABLE market in India is increasingly
moving towards brand strength and distribution networks. Hence, advertising and marketing
expenses are expected to remain significantly high for the players in this industry.
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TOP CONSUMER DURABLE BRANDS
• Akai • TCL
• BPL • Thomson
• Sony • Onida
• Hairier • Panasonic
• Hitachi • LG
• Samsung • Philips
• SHARP • VIDEOCON
CONSUMER BEHAVIOUR
To define consumer behavior: it is the study of consumers and the processes they use to choose,
use (consume), and dispose of products and services. A more in depth definition will also include
how that process impacts the world. Consumer behavior incorporates ideas from several sciences
including psychology, biology, chemistry and economics.
"All marketing decisions are based on assumptions and knowledge of consumer behavior,"
(Hawkins and Mothersbaugh, 2007). Researching consumer behavior is a complex process, but
understanding consumer behavior is critical to marketers-they can use it to:
How many times throughout the day do people make product decisions? If you stop to think
about it, many product decisions are made every day, some without much thought. What should I
wear? What should I eat? What am I going to do today? Many product decisions are answered
routinely every day and they help move the economy of cities, countries and ultimately the
world.
▪ Provide value and customer satisfaction.
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▪ Effectively target customers.
▪ Enhance the value of the company.
▪ Improve products and services.
▪ Create a competitive advantage
▪ Understand how customers view their products versus their competitors’ products.
▪ Expand the knowledge base in the field of marketing,
▪ Apply marketing strategies toward a positive affect on society (encourage people to
support charities, promote healthy habits, reduce drug use etc.)
Product decisions also shape life for the consumer. How can simple decisions be so important?
Why do marketers spend millions of dollars to uncover the reasons behind these decisions
The study of consumers helps firms and organizations improve their marketing strategies by
understanding issues such as how
• The psychology of how consumers think, feel, reason, and select between different
alternatives (e.g., brands, products, and retailers);
• The psychology of how the consumer is influenced by his or her environment (e.g.,
culture, family, signs, media);
• The behavior of consumers while shopping or making other marketing decisions;
• Limitations in consumer knowledge or information processing abilities influence
decisions and marketing outcome;
• How consumer motivation and decision strategies differ between products that differ in
their level of importance or interest that they entail for the consumer; and
• How marketers can adapt and improve their marketing campaigns and marketing
strategies to more effectively reach the consumer.
One "official" definition of consumer behavior is "The study of individuals, groups, or
organizations and the processes they use to select, secure, use, and dispose of products, services,
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experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer
and society." Although it is not necessary to memorize this definition, it brings up some useful
points:
• Behavior occurs either for the individual, or in the context of a group (e.g., friends
influence what kinds of clothes a person wears) or an organization (people on the job
make decisions as to which products the firm should use).
• Consumer behavior involves the use and disposal of products as well as the study of how
they are purchased. 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 increased
consumption. Since many environmental problems result from product disposal (e.g.,
motor oil being sent into sewage systems to save the recycling fee, or garbage piling up at
landfills) this is also an area of interest.
• Consumer behavior involves services and ideas as well as tangible products.
• The impact of consumer behavior on society is also of relevance. For example,
aggressive marketing of high fat foods, or aggressive marketing of easy credit, may have
serious repercussions for the national health and economy.
2.REVIEW OF LITERATURE
Consumer behaiour is most studied area of learning both academically and professionally. It is
also an integrated part of Human Psychology.These all combined has induced the Business
Organisations tocontantly regulate their marketing strategy and product planning based on a
regular understanding of consumer behavior.The topic of consumer behaviour is one of the
massively studied topics by the researchers and marketers in the past and still being studied.
Researchers show different reasons as to why consumer behaviour has been the topic of many
academics and researchers. One of the common views is that understanding consumer behaviour
has become a factor that has a direct impact on the overall performance of the businesses (Kotler
and Keller, 2012). Another view suggests that understanding consumer behaviour has become
crucial especially due to fierce competition in retail industry in the UK and worldwide (Lancaster
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et al, 2002). This chapter will introduce some other areas of research background of consumer
behaviour addressing the works of researchers and marketers. Moreover, consumer decision
making process, in particular, five stages of consumer decision making process will be discussed
in detail.
Consumer Behaviour Christopher (1989) studied the shopping habits of consumers to form an
idea of whether or not the store concepts, product ranges and strategies of the companies are
appropriate towards consumer requirements. He believed that consumer behaviours are
unpredictable and changing continuously changing; while trying to under try to understand how
individual or group make their decision to spend their available resources on consumption-
related items. These are factors that influence the consumer before, during, and after a purchase
(Schiffiman and Kanuk, 1997), for example, feedback, from other customers, packing,
advertising, product appearance, and price (Peter & Olsonetc, 2005).
Perceptions take consumers to the process of selecting, organising, and interpreting stimuli to a
meaningful and coherent picture of the world (Schiffman and Kanuk (2007).Because there are so
many marketing stimuli, consumers need to limit the information of product that will have an
effect on the decision making. Bolfing (1988) also purposed that there are plenty of customers
that have ‘perceptual vigilance’ which is the stage of being screening information that is
relevant. On perception process, customers express their own final perception using their
consuming behaviour.Many consumer durable companies need to find innovative ways to
revitalize product lines.To do so ,they must better forecast demand ,improve supply chain
efficiencies and manage inventory to meet ever-fickle consumer tastes.
It is worth noting that consumer buying behaviour is studied as a part of the marketing and its
main objective it to learn the way how the individuals, groups or organizations choose, buy use
and dispose the goods and the factors such as their previous experience, taste, price and branding
on which the consumers base their purchasing decisions (Kotler and Keller, 2012).
One of such studies of consumer buying behaviour has been conducted by Acebron et al (2000).
The aim of the study was to analyze the impact of previous experience on buying behaviour of
fresh foods, particularly mussels. In their studies the authors used structural equation model in
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order to identify the relationship between the habits and previous experience on the consumer
buying decision. Their findings show that personal habits and previous experience on of the
consumers have a direct impact on the consumers’ purchase decision in the example of
purchasing fresh mussels. They also found that the image of the product has a crucial impact on
the purchasing decision of the consumer and further recommended that the product image should
continuously be improved in order to encourage the consumers towards purchasing.
Another study conducted by Variawa (2010) analyzed the influence of packaging on consumer
decision making process for Fast Moving Consumer Goods. The aim of the research was to
analyze the impact of packaging for decision making processes of low-income consumers in
retail shopping. A survey method has been used in order to reach the research objectives. In a
survey conducted in Star Hyper in the town of Canterville 250 respondents participated. The
findings of the research indicate that low-income consumers have more preferences towards
premium packaging as this can also be re-used after the product has been consumed. Although
the findings indicate that there is a weak relationship between the product packaging and brand
experience. However, it has been proven by the findings of the research that low-income
consumers have greater brand experience from the purchase of ‘premium’ products when
compared to their experience from purchasing ‘cheap’ brand products.
Lee (2005) carried out study to learn the five stages of consumer decision making process in the
example of China. The researcher focuses on the facts that affect the consumer decision making
process on purchasing imported health food products, in particular demographic effects such as
gender, education, income and marital status. The author employed questionnaire method in
order to reach the objectives of the research. Analysis of five stages of consumer decision
making process indicate that impact of family members on the consumer decision making
process of purchasing imported health food products was significant.
The author further explains this by the fact Chinese tradition of taking care of young and old
family members have long been developed and marriage is considered to be extremely important
in Chinese tradition. This reflects in the findings of the study that the purchase of imported
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health food products made by a person for the people outside the family is declined significantly
by both male and female Chinese after they get married.
Five Stages Model of consumer decision making process has also been studied by a number of
other researchers. Although different researchers offer various tendencies towards the definitions
of five stages, all of them have common views as they describe the stages in similar ways. One
of the common models of consumer decision making process has been offered by Blackwell et al
(2006). According to him, the five stages of consumer decision making process are
followings: problem/need recognition, information search, evaluation of alternatives, purchase
decision made and post-purchase evaluation.
Each stage is then defined by a number of researchers varying slightly but leading to a common
view about what each stage involves. For example, according to Bruner (1993) first stage, need
recognition occurs when an individual recognizes the difference between what they have and
what they want/need to have. This view is also supported by Neal and Questel (2006) stating that
need recognition occurs due to several factors and circumstances such as personal, professional
and lifestyle which in turn lead to formation of idea of purchasing.
In the next stage, consumer searches information related to desired product or service (Schiffman
and Kanuk, 2007). Information search process can be internal and external. While internal search
refers to the process where consumers rely on their personal experiences and believes, external
search involves wide search of information which includes addressing the media and advertising
or feedbacks from other people (Rose and Samouel, 2009).
Once the relevant information about the product or service is obtained the next stage involves
analyzing the alternatives. Kotler and Keller (2005) consider this stage as one of the important
stages as the consumer considers all the types and alternatives taking into account the factors
such as size, quality and also price.
Backhaus et al (2007) suggested that purchase decision is one of the important stages as this
stage refers to occurrence of transaction. In other words, once the consumer recognized the need,
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searched for relevant information and considered the alternatives he/she makes decision whether
or not to make the decision. Purchasing decision can further be divided into planned purchase,
partially purchase or impulse purchase as stated by Kacen (2002) which will be discussed further
in detail in the next chapters.
Finally, post-purchase decision involves experience of the consumer about their purchase.
Although the importance of this stage is not highlighted by many authors Neal et al (2004)
argues that this is perhaps one of the most important stages in the consumer decision making
process as it directly affects the consumers’ purchases of the same product or service from the
same supplier in the future.
The most noteworthy writers that serve as academic advocates of The Five Stage Model of
consumer decision making include Tyagi (2004), Kahle and Close (2006) Blackwell et al.
(2006), and others.It is important to note that The Five Stage Model is not the only model related
to consumer decision-making, and there are also a range of competing models that include
Stimulus-Organism-Response Model of Decision Making developed by Hebb in 1950’s,
Prescriptive Cognitive Models, The Theory of Trying (Bagozzi and Warsaw, 1990), Model of
Goal Directed Behaviour (Perugini and Bagozzi, 2001) and others. All of these models are
analysed in great detail in Literature Review chapter of this work.
CONCLUSION
It has been established that the consumer buying behaviour is the outcome of the needs and
wants of the consumer and they purchase to satisfy these needs and wants. Although it sounds
simple and clear, these needs can be various depending on the personal factors such as age,
psychology and personality. Also there are some other external factors which are broad and
beyond the control of the consumer.Regular study of consumers on the part of the business
organizations is one of the most important marketing functions. Changing customer loyalty, shift
in their choices and frequent changes in their mind set up all keep the Business organizations on
their toe. It is otherwise too. Often Company influence the consumer buying behavior through
their advertisements, promotions, product range, pricing and various other promotional activities.
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