CONSUMER BEHAVIOR ( A comparative study of Barista and Caf Coffee Day) DESSERTATION Submitted To THE IIS UNIVERSITYFOR THE DEGREE OF MBA-INTERNATIONAL BUSINESS(Department of HRM&IB)

SUPERVISED BY: SUBMITTED BY:Dr. Ankita Gangwal Jain Prabhjot kaurHead of Department MBA-IB (SEM-IV)Dept. of HRM and IB ICG/2013/15877

2014-2015

Acknowledgement I take this opportunity to express my profound gratitude and deep regard to my faculty DR M.K SHARMA, DEAN FACULTY OF COMMERCE AND MANAGEMENT for his exemplary guidance, monitoring and constant encouragement throughout the course of this thesis. The blessing, help and guidance given by him time to time shall me a long way in the journey of life on which I am about to embark.I wish to express my sincere gratitude to Mam Dr. Ankita Gangwal Jain, head department of HRM&IB of international college for girls, jaipur for providing me an opportunity to do seminar project.I also take this opportunity to express a deep sense ago gratitude to my tutor guardian Dr. Ankita Gangwal jain, head department of HRM&IB for her cordial support, valuable information and guidance which helped me in completing this task through various stages.

Preface It is true that Experience is best teacher in todays globalize world , where cutthroat competition is prevailing in the market, theoretical knowledge, which would help an individual his/her career activate.The MBA program is well structured and integrated course of business studies. The main objective of practical training at MBA level is to develop skill in student by supplement to the theoretical study of business management in general industrial training helps tp gain real life knowledge about the industrial environment and buntline practices.The MBA programmed provides student with a fundamental knowledge of business and organizational functions and activates, as well as an exposure to strategic thinking of management

CONTENT

PG. NO.

Chapter-1

Introduction

Chapter-2Research Methodology Meaning Of Research Objective Of Study Research Design Scope of the study Significance of the study Relevance of the study Limitations of study Review of literature

Chapter-3 Company Profile

Chapter-4Data Analysis and Interpretation

Chapter-5Findings and suggestions

Chapter-6 Conclusion

Bibliography

Annexure

CHAPTER 1INTRODUCTION

INTRODUCTION

Consumer BehaviorConsumer behaviour has been always of great interest to marketers. The knowledge of consumer behavior helps the marketer to understand how consumers think, feel and select from alternatives like products, brands and the like and how the consumers are influenced by their environment, the reference groups, family, and salespersons and so on. A consumers buying behavior is influenced by cultural, social, personal and psychological factors. Most of these factors are uncontrollable and beyond the hands of marketers but they have to be considered while trying to understand the complex behavior of the consumers. Consumer is the study of the processes involved when individuals or groups select, purchase, use, or dispose of products, services, ideas, or experiences to satisfy needs and desires . In the marketing context, the term consumer refers not only to the act of purchase itself, but also to patterns of aggregate buying which include pre-purchase and post-purchase activities. Pre-purchase activity might consist of the growing awareness of a need or want, and a search for and evaluation of information about the products and brands that might satisfy it. Post-purchase activities include the evaluation of the purchased item in use and the reduction of any anxiety which accompanies the purchase of expensive and infrequently-bought items. Each of these has implications for purchase and repurchase and they are amenable in differing degrees to marketer influence . Engel, et al. define consumer behaviour as those acts of individuals directly involved in obtaining, using, and disposing of economic goods and services, including the decision processes that precede and determine these acts. Simple observation provides limited insight into the complex nature of consumer choice and researchers have increasingly sought the more sophisticated concepts and methods of investigation provided by behavioural sciences in order to understand, predict, and possibly control consumer behaviour more effectively.

It is the study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society.It blends elements frompsychology,sociology,socialanthropology, marketing andeconomics. It attempts to understand the decision-making processes of buyers, both individually and in groups such as how emotions affect buying behaviour. It studies characteristics of individual consumers such asdemographicsand behavioural variables in an attempt to understand people's wants. It also tries to assess influences on the consumer from groups such as family, friends, sports, reference groups, and society in general. Customer behaviour study is based on consumer buying behaviour, with the customer playing the three distinct roles of user, payer and buyer. Research has shown that consumer behaviour is difficult to predict, even for experts in the field.Relationship marketing is an influential asset for customer behaviour analysis as it has a keen interest in the re-discovery of the true meaning of marketing through the re-affirmation of the importance of the customer or buyer. A greater importance is also placed on consumer retention, customer relationship management, personalisation, customisation and one-to-one marketing. Social functions can be categorized intosocial choiceand welfare functions.Each method for vote counting is assumed as social function but ifArrows possibility theoremis used for a social function, social welfare function is achieved. Some specifications of the social functions are decisiveness,neutrality,anonymity,monotonicity, unanimity, homogeneity and weak and strongPareto optimality. No social choice function meets these requirements in an ordinal scale simultaneously. The most important characteristic of a social function is identification of the interactive effect of alternatives and creating a logical relation with the ranks. Marketing provides services in order to satisfy customers. With that in mind the productive system is considered from its beginning at the production level, to the end of the. cycle, the consumer.It is a globally accepted fact that in recent times, marketers have become dynamic and the consumer has control over the strategic decisions made by the insurance companies. Companies are put to challenge to understand the pulses of new age policyholders and their buying pattern. India, in this scenario is no exception. It is being a nation of diverse cultures and traditions, understanding the consumers buying pattern become a hard task. With the advent of globalization and the sequel changes in the country, many Multinational Insurance Corporations have started making a foray into Indian insurance market due to its sky-scraping potential. Business environment today is turbulent as never before and the service industry as promising as never before. In this era of intense competition where customer is the king, success depends a lot on the efficiency of the managers in delivering what they have promised and the responsibility lies on the organizations to develop such a culture where business ethics are followed, value for the services is provided and quality services are offered to achieve higher level of customer satisfaction. For achieving customer satisfaction understanding dynamic consumer behaviour is essential. As true believers in the marketing concept marketer should try their best to meet needs of consumers.Service firms should follow a proactive approach i.e. begin the service and satisfaction management process before they even come in contact with customers and also be reactive i.e. look forward for customers to complain, welcome them and tell them what to do. This study is an attempt to develop a thought on how to focus on enabling and keeping promises in service firms because how promises are kept is a clear indication of how strong and for how long shall the customer relationship be. The service sector dominates the Indian economy today, contributing to more than half of our National Income. Since services are intangible in nature and cannot be checked before the purchase is actually made therefore, it is very critical to deliver what has been promised to the target customer. Consumer behaviour studies play an important role in framing marketing and in deciding marketing strategies.

Some selected definitions of consumer behaviour are as follows:1. According to Engel, Blackwell, and Mansard, consumer behaviour is the actions and decision processes of people who purchase goods and services for personal consumption.2. According to Louden and Bitta, consumer behaviour is the decision process and physical activity, which individuals engage in when evaluating, acquiring, using or disposing of goods and services.Consumers are often studied because certain discussions are significantly affected by their behaviour or expected actions. For this reason, such consumer behaviour is said to be an applied discipline. Such applications can exist at two level of analysis. The micro perspective involves understanding consumers for the purpose of helping a firm or organization accomplish its objectives. On the macro or societal perspective consumers collectively influence economic and social conditions within an entire society,Consumption and Customer: Consumption process is related to different types of individuals, purchaser, shopper or customer and is generally used synonymously to indicate one who actively engaged in buying. The consumption process involves three interrelated activities of decisions: determine personal or groups wants, seek out and purchase products and employ products to derive benefits.1 Customer: The term customer is typically used to refer to one who regularly purchase from a particular store or company. The consumer more generally refers to anyone engaging in any of the activities (evaluating, acquiring, using or disposing of goods and services) used in the definition of consumer behaviour.2 Therefore, a customer is defined in terms of specific firm while consumer is not. Customers are value maximiser within the bounds of search costs, limited knowledge, mobility and income. The most commonly thought of consumer situation is that of an individual making a purchase with little or no influence of others. A consumer or buyer is one who determines personal wants, buys products and uses those products. The traditional viewpoint defines consumers strictly in terms of economic goods and services or one who consumes goods. The customer is king philosophy has become one of those marketing fads and fashions that have continued to trail the growth and expansion of the product economy. The term consumer is often used to describe two different kinds of consuming entities personal consumer and organizational consumer. Ultimate consumers are those individuals who purchases for the purpose of individual or household consumption. Buyer is the individual who actually makes the purchase transaction whereas user is the person most directly involved in the consumption or use of the purchased product. A customer is also called client, buyer, shopper or purchaser, usually used to refer to a current or potential buyer or user of the products of an individual or organisation, called the supplier, seller, or vendor. 5 This is typically through purchasing or renting goods or services. However, in certain contexts, the term customer also includes by extension anyone who uses or experiences the services of another. A customer may also be a viewer of the product or service that is being sold despite deciding to not buy them.

CONSUMER BEHAVIOUR AND BUYER BEHAVIOUR Consumer Behaviour is seen to involve a complicated mental process as well as physical activity (purchase decision). Consumer behaviour is a decision process and physical activity individuals engage in when evaluating, acquiring, using or disposing of goods and services. Consumer Behaviour reflects the totality of consumers decisions with respect to the acquisition, consumption and disposition off goods, services, time and ideas by (human) decision making units. 6 Buyer Behaviour particularly is the study of decision making units as they can buy for themselves or others. Thus, buying behaviour particularly involves collective response of buyers for selecting, evaluating, deciding and post purchase behaviour. Buyer behaviour is the study of human response to services and the marketing of products and services. Buyer behaviour researches continuously investigate a broad range of human responses including human affective, cognitive and behavioural responses. The buying behavior and purchase decisions are need to be studied thoroughly in order to understand, predict and analyze critical market variations of a particular product or service. The field of consumer behaviour is the broad study of individuals, groups or organisations and the process they use to select secure and dispose of products, services, experiences or ideas to satisfy needs and the impacts that these processes have on the consumer and society.

Consumer behaviour studies are based on the buying behavior:The collective behaviour of consumers has a significant influence on quality and level of standard of living. Buyer Behaviour is broadly defined by various scholars and researchers as: 1. Its the behaviour displayed by the consumers during the acquisition, use and disposition of products/services, time and ideas by decision making units. 2. It is the body of knowledge which studies various aspects of purchase and consumption of products and services by individuals with various social and psychological variables at play. 3. 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. The activities directly involved in obtaining, consuming and disposing of products and services, including the decision processes that precede and follow these actions.

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Nature of Consumer Behaviour:

The various factors that influence the consumer behaviour are as follows:

Marketing factors such as product design, price, promotion, packaging, positioning and distribution. Personal factors such as age, gender, education and income level. Psychological factors such as buying motives, perception of the product and attitudes towards the product. Situational factors such as physical surroundings at the time of purchase, social surroundings and time factor. Social factors such as social status, reference groups and family. fCultural factors, such as religion, social classcaste and sub-castes. Undergoes a constant change:Consumer behaviour is not static. It undergoes a change over a period of time depending on the nature of products. For example, kids prefer colourful and fancy footwear, but as they grow up as teenagers and young adults, they prefer trendy footwear, and as middle-aged and senior citizens they prefer more sober footwear. The change in buying behaviour may take place due to several other factors such as increase in income level, education level and marketing factors.

Varies from consumer to consumer:All consumers do not behave in the same manner. Different consumers behave differently. The differences in consumer behaviour are due to individual factors such as the nature of the consumers, lifestyle and culture. For example, some consumers are technoholics. They go on a shopping and spend beyond their means.They borrow money from friends, relatives, banks, and at times even adopt unethical means to spend on shopping of advance technologies. But there are other consumers who, despite having surplus money, do not go even for the regular purchases and avoid use and purchase of advance technologies. Varies from region to region and country to county:The consumer behaviour varies across states, regions and countries. For example, the behaviour of the urban consumers is different from that of the rural consumers. A good number of rural consumers are conservative in their buying behaviours.The rich rural consumers may think twice to spend on luxuries despite having sufficient funds, whereas the urban consumers may even take bank loans to buy luxury items such as cars and household appliances. The consumer behaviour may also varies across the states, regions and countries. It may differ depending on the upbringing, lifestyles and level of development. Information on consumer behaviour is important to the marketers:Marketers need to have a good knowledge of the consumer behaviour. They need to study the various factors that influence the consumer behaviour of their target customers.

The knowledge of consumer behaviour enables them to take appropriate marketing decisions in respect of the following factors. Product design/model

Pricing of the product Promotion of the product Packaging Positioning Place of distribution. Leads to purchase decision:A positive consumer behaviour leads to a purchase decision. A consumer may take the decision of buying a product on the basis of different buying motives. The purchase decision leads to higher demand, and the sales of the marketers increase. Therefore, marketers need to influence consumer behaviour to increase their purchases.Varies from product to product:Consumer behaviour is different for different products. There are some consumers who may buy more quantity of certain items and very low or no quantity of other items. For example, teenagers may spend heavily on products such as cell phones and branded wears for snob appeal, but may not spend on general and academic reading. A middle- aged person may spend less on clothing, but may invest money in savings, insurance schemes, pension schemes, and so on.

Improves standard of living:The buying behaviour of the consumers may lead to higher standard of living. The more a person buys the goods and services, the higher is the standard of living. But if a person spends less on goods and services, despite having a good income, they deprives themselves of higher standard of living. Reflects status:The consumer behaviour is not only influenced by the status of a consumer, but it also reflects it. The consumers who own luxury cars, watches and other items are considered belonging to a higher status. The luxury items also give a sense of pride to the owners.Consumer Behaviour is a branch which deals with the various stages a consumer goes through before purchasing products or services for his end use.Why do you think an individual buys a product ? Need Social Status Gifting PurposeWhy do you think an individual does not buy a product ? No requirement Income/Budget/Financial constraints TasteWhen do you think consumers purchase products ? Festive season Birthday Anniversary Marriage or other special occasionsThere are infact several factors which influence buying decision of a consumer ranging from psychological, social, economic and so on. The study of consumer behaviour explains as to: Why and why not a consumer buys a product ? When a consumer buys a product ? How a consumer buys a product ?During Christmas, the buying tendencies of consumers increase as compared to other months. In the same way during Valentines week, individuals are often seen purchasing gifts for their partners. Fluctuations in the financial markets and recession decrease the buying capacity of individuals.In a laymans language consumer behaviour deals with the buying behaviour of individuals.The main catalyst which triggers the buying decision of an individual is need for a particular product/service.Consumers purchase products and services as and when need arises.According to Belch and Belch, whenever need arises; a consumer searches for several information which would help him in his purchase.Following are the sources of information: Personal Sources Commercial Sources Public Sources Personal ExperiencePerception also plays an important role in influencing the buying decision of consumers.Buying decisions of consumers also depend on the following factors: Messages, advertisements, promotional materials, a consumer goes through also calledselective exposure. Not all promotional materials and advertisements excite a consumer. A consumer does not pay attention to everything he sees. He is interested in only what he wants to see. Such behaviour is calledselective attention. Consumer interpretationrefers to how an individual perceives a particular message. A consumer would certainly buy something which appeals him the most. He would remember the most relevant and meaningful message also calleD asselective retention. He would obviously not remember something which has nothing to do with his need.

Importance of consumer behaviour:The modern marketing management tries to solve the basic problems of consumers in the area of consumption. To survive in the market, a firm has to be constantly innovating and understand the latest consumer needs and tastes. It will be extremely useful in exploiting marketing opportunities and in meeting the challenges that the Indian market offers. It is important for the marketers to understand the buyer behaviour due to the following reasons.

The study of consumer behaviour for any product is of vital importance to marketers in shaping the fortunes of their organizations. It is significant for regulating consumption of goods and thereby maintaining economic stability. It is useful in developing ways for the more efficient utilization of resources of marketing. It also helps in solving marketing management problems in more effective manner. Today consumers give more importance on environment friendly products. They are concerned about health, hygiene and fitness. They prefer natural products. Hence detailed study on upcoming groups of consumers is essential for any firm. The growth of consumer protection movement has created an urgent need to understand how consumers make their consumption and buying decision. Consumers tastes and preferences are ever changing. Study of consumer behaviour gives information regarding colour, design, size etc. which consumers want. In short, consumer behaviour helps in formulating of production policy. For effective market segmentation and target marketing, it is essential to have an understanding of consumers and behaviour.

Factors influencing consumer behavior:There are 4 main types of factors influencing consumer behavior: cultural factors, social factors, personal factors and psychological factors.I. Cultural factorsCultural factors are coming from the different components related to culture or cultural environment from which the consumer belongs.Culture and societal environment:. As these will play a role in the perception, habits, behavior or expectations of consumers.For example, in the West, it is common to invite colleagues or friends at home for a drink or dinner. In Japan, on the contrary, invite someone home does not usually fit into the local customs. It is preferable to do that this kind of outing with friends or colleagues in restaurant.A significant specificity to take into account for the brands in markets such as savory snacking or sodas and alcoholic beverages. Usage and consumption moments are not the same in all regions of the world.While if a Japanese offer you a gift, the Culture is crucial when it comes to understanding the needs and behaviors of an individual.Throughout his existence, an individual will be influenced by his family, his friends, his cultural environment or society that will teach him values, preferences as well as common behaviors to their own culture.For a brand, it is important to understand and take into account the cultural factors inherent to each market or to courtesy is to offer him an equivalent gift in return.McDonalds is a brilliant example of adaptation to the specificities of each culture and each market. Well aware of the importance to have an offer with specific products to meet the needs and tastes of consumers from different cultures, the fast-food giant has for example: a McBaguette in France with french baguette and Dijon mustard, a Chicken Maharaja Mac and a Masala Grill Chicken in India (with Indian spices) as well as a Mega Teriyaki Burger with teriyaki sauce or Gurakoro with macaroni gratin and croquett )in Japan.While all the ingredients used by McDonalds in arabic andmuslim countries are certified halal. The fast food chain not offering, of course, any product with bacon or pork.Sub-cultures :A society is composed of several sub-cultures in which people can identify. Subcultures are groups of people who share the same values based on a common experience or a similar lifestyle in general.Subcultures are the nationalities, religions, ethnic groups, age groups, gender of the individual, etc..The subcultures are often considered by the brands for the segmentation of a market in order to adapt a product or a communication strategy to the values or the specific needs of this segment.For example in recent years, the segment of ethnic cosmetics has greatly expanded. These are products more suited to non-Caucasian populations and to types of skin pigmentation for african, arab or indian populations for example.Its a real brand positioning with a well-defined target in a sector that only offered makeup products to a caucasian target until now (with the exception of niche brands) and was then receiving critics from consumers of different origin.Brands often communicate in different ways, sometimes even create specific products (sometimes without significant intrinsic difference) for the same type of product in order to specifically target an age group, a gender or a specific sub-culture.Consumers are usually more receptive to products and marketing strategies that specifically target them.

Social classes:Social classes are defined as groups more or less homogenous and ranked against each other according to a form of social hierarchy. Even if its very large groups, we usually find similar values, lifestyles, interests and behaviors in individuals belonging to the same social class.We often assume three general categories among social classes : lower class, middle class and upper class.People from different social classes tend to have different desires and consumption patterns. Disparities resulting from the difference in their purchasing power, but not only. According to some researchers, behavior and buying habits would also be a way of identification and belonging to its social class.Beyond a common foundation to the whole population and taking into account that many counterexample naturally exist, they usually do not always buy the same products, do not choose the same kind of vacation, do not always watch the same TV shows, do not always read the same magazines, do not have the same hobbies and do not always go in the same types of retailers and stores.For example, consumers from the middle class and upper class generally consume more balanced and healthy food products than those from the lower class.They dont go in the same stores either. If some retailers are, of course, patronized by everyone, some are more specifically targeted to upper classes such as The Fresh Market, Whole Foods Market, Barneys New York or Nordstrom. While others, such as discount supermarkets, attract more consumers from the lower class.Some studies have also suggested that the social perception of a brand or a retailer is playing a role in the behavior and purchasing decisions of consumers.In addition, the consumer buying behavior may also change according to social class. A consumer from the lower class will be more focused on price. While a shopper from the upper class will be more attracted to elements such as quality, innovation, features, or even the social benefit that he can obtain from the product.Cultural trends:Cultural trends or Bandwagon effect are defined as trends widely followed by people and which are amplified by their mere popularity and by conformity or compliance with social pressure. The more people follow a trend, the more others will want to follow it.They affect behavior and shopping habits of consumers and may be related to the release of new products or become a source of innovation for brands.By social pressure, desire to conformity or belonging to a group, desire to follow fashion trends or simply due to the high visibility provided by media, consumers will be influenced, consciously or unconsciously, by these trends.For example, Facebook has become a cultural trend. The social network has widely grew to the point of becoming a must have, especially among young people.It is the same with the growth of the tablet market. Tablets such as iPad or Galaxy Tab have become a global cultural trend leading many consumers to buy one. Even if they had never specially felt the need before.For a brand, create a new cultural trend from scratch is not easy.Appledid it with the tablets with its iPad. But this is an exception. However, brands must remain attentive to the new trends and bandwagon effects. Whether to accompany it (create a page on Facebook) or to take part in the newly created market (create its own tablet).II. Social factors Social factors are among the factorsinfluencing consumer behavior significantly. They fall into three groups, family and social roles and status.Reference groups and membership groups :The membership groups of an individual are social groups to which he belongs and which will influence him. The membership groups are usually related to its social origin, age, place of residence, work, hobbies, leisure, etc..The influence level may vary depending on individuals and groups. But is generally observed common consumption trends among the members of a same group.The understanding of the specific features (mindset, values, lifestyle, etc..) of each group allows brands to better target their advertising message.More generally, reference groups are defined as those that provide to the individual some points of comparison more or less direct about his behavior, lifestyle, desires or consumer habits. They influence the image that the individual has of himself as well as his behavior. Whether it is a membership group or a non-membership group.Because the individual can also be influenced by a group to which he doesnt belong yet but wishes to be part of. This is called an aspirational group. This group will have a direct influence on the consumer who, wishing to belong to this group and look like its members, will try to buy the same products.For example, even if he doesnt need it yet, a surfing beginner may want to buy advanced brands or products used by experienced surfers (aspirational group) in order to get closer to this group. While a teen may want the shoe model or smartphone used by the group of popular guys from his high school (aspirational group) in order to be accepted by this group.Some brands have understood this very well and communicate, implicitly or not, on the social benefit provided by their products.Within a reference group that influence the consumer buying behavior, several roles have been identified: The initiator:the person who suggests buying a product or service The influencer: the person whose point of view or advice will influence the buying decision. It may be a person outside the group (singer, athlete, actor, etc..) but on which group members rely on. The decision-maker: the person who will choose which product to buy. In general, its the consumer but in some cases it may be another person. For example, the leader of a soccer supporters group (membership group) that will define, for the whole group, which supporters scarf buy and bear during the next game.The buyer:The person who will buy the product. Generally, this will be the final consumer .Many brands look to target opinion leaders (initiator or influencer) to spread the use and purchase of their product in a social group. Either through an internal person of the group when it comes to a small social group. Or through a sponsorship or a partnership with a reference leader (celebrity, actor, musician, athlete, etc..) for larger groups.Family: The family is maybe the most influencing factor for an individual. It forms an environment of socialization in which an individual will evolve, shape his personality, acquire values. But also develop attitudes and opinions on various subjects such as politics, society, social relations or himself and his desires.But also on his consumer habits, his perception of brands and the products he buys.We all kept, for many of us and for some products and brands, the same buying habits and consumption patterns that the ones we had known in our family. Perceptions and family habits generally have a strong influence on the consumer buying behavior. People will tend to keep the same as those acquired with their families.For example, if you have never drunk Coke during your childhood and your parents have described it as a product full of sugar and not good for health. There is far less chance that you are going to buy it when you will grow up that someone who drinks Coke since childhood.For brands especially for Fast-Moving Consumer Goods (FMCG) or Consumer Packaged Goods (CPG) successfully integrate the family is both a real challenge and an opportunity to develop a strong consumer loyalty among all the family members.Thats why its important for brands to be seen as a family brand in order to become a consumer habit for parents and children when they will become adults.Social roles and status:The position of an individual within his family, his work, his country club, his group of friends, etc. All this can be defined in terms of role and social status.A social role is a set of attitudes and activities that an individual is supposed to have and do according to his profession and his position at work, his position in the family, his gender, etc.. and expectations of the people around him.Social status meanwhile reflects the rank and the importance of this role in society or in social groups. Some are more valued than others.The social role and status profoundly influences the consumer behavior and his purchasing decisions. Especially for all the visible products from other people.For example, a consumer may buy a Ferrari or a Porsche for the quality of the car but also for the external signs of social success that this kind of cars represents. Moreover, it is likely that a CEO driving a small car like a Ford Fiesta or a Volkswagen Golf would be taken less seriously by its customers and business partners than if he is driving a german luxury car.And this kind of behaviors and influences can be found at every level and for every role and social status.Again, many brands have understood it by creating an image associated with their products reflecting an important social role or status.III. Personal factors:Decisions and buying behavior are obviously also influenced by the characteristics of each consumer.Age and way of life:A consumer does not buy the same products or services at 20 or 70 years. His lifestyle, values, environment, activities, hobbies and consumer habits evolve throughout his life.For example, during his life, a consumer could change his diet from unhealthy products (fast food, ready meals, etc..) to a healthier diet, during mid-life with family before needing to follow a little later a low cholesterol diet to avoid health problems.The factors influencing the buying decision process may also change. For example, the social value of a brand generally play a more important role in the decision for a consumer at 25 than at 65 years.The family life cycle of the individual will also have an influence on his values, lifestyles and buying behavior depending whether hes single, in a relationship, in a relationship with kids, etc.. As well as the region of the country and the kind of city where he lives (large city, small town, countryside, etc..For a brand or a retailer, it may be interesting to identify, understand, measure and analyze what are the criteria and personal factors that influence the shopping behavior of their customers in order to adapt.For example, it is more than possible that consumers living in New York do not have the same behavior and purchasing habits than the ones in Nebraska. For a retailer, have a deep understanding and adapt to these differences will be a real asset to increase sales.Purchasing power and revenue:The purchasing power of an individual will have, of course, a decisive influence on his behavior and purchasing decisions based on his income and his capital.This obviously affects what he can afford, his perspective on money and the level of importance of price in his purchasing decisions. But it also plays a role in the kind of retailers where he goes or the kind of brands he buys.As for social status, some consumers may also look for the social value of products they buy in order to show external indications of their incomes and their level of purchasing power.Lifestyle:The lifestyle of an individual includes all of its activities, interests, values and opinions.The lifestyle of a consumer will influence on his behavior and purchasing decisions. For example, a consumer with a healthy and balanced lifestyle will prefer to eat organic products and go to specific grocery stores, will do some jogging regularly (and therefore will buy shoes, clothes and specific products), etc..Personality and self-concept:Personality is the set of traits and specific characteristics of each individual. It is the product of the interaction of psychological and physiological characteristics of the individual and results in constant behaviors.It materializes into some traits such as confidence, sociability, autonomy, charisma, ambition, openness to others, shyness, curiosity, adaptability, etc..While the self-concept is the image that the individual has or would like to have of him and he conveys to his entourage. These two concepts greatly influence the individual in his choices and his way of being in everyday life. And therefore also his shopping behavior and purchasing habits as consumer.In order to attract more customers, many brands are trying to develop an image and a personality that conveys the traits and values - real or desired of consumers they are targeting.For example, since its launch, Apple cultivates an image of innovation, creativity, boldness and singularity which is able to attract consumers who identify to these values and who feel valued in their self-concept by buying a product from Apple.Because consumers do not just buy products based on their needs or for their intrinsic features but they are also looking for products that are consistent and reinforce the image they have of themselves or they would like to have.The more a product or brand can convey a positive and favorable self-image to the consumer, the more it will be appreciated and regularly purchased.IV. Psychological factorsAmong the factors factors influencing consumer behavior, psychological factors can be divided into 4 categories: motivation, perception, learning as well as beliefs and attitudes

.Motivation:Motivation is what will drive consumers to develop a purchasing behavior. It is the expression of a need is which became pressing enough to lead the consumer to want to satisfy it. It is usually working at a subconscious level and is often difficult to measure.Motivation is directly related to the need and is expressed in the same type of classification as defined in thestages of the consumer buying decision process.To increase sales and encourage consumers to purchase, brands should try to create, make conscious or reinforce a need in the consumers mind so that he develops a purchase motivation. He will be much more interested in considering and buy their products.They must also, according to research, the type of product they sell and the consumers they target, pick out the motivation and the need to which their product respond in order to make them appear as the solution to the consumers need.Perception:Perception is the process through which an individual selects, organizes and interprets the information he receives in order to do something that makes sense. The perception of a situation at a given time may decide if and how the person will act.Depending to his experiences, beliefs and personal characteristics, an individual will have a different perception from another.Each person faces every day tens of thousands of sensory stimuli (visual, auditory, kinesthetic, olfactory and gustatory). It would be impossible for the brain to process all consciously. That is why it focuses only on some of them.

The perception mechanism of an individual is organized around three processes: Selective Attention:The individual focuses only on a few details or stimulus to which he is subjected. The type of information or stimuli to which an individual is more sensitive depends on the person.For brands and advertisers successfully capture and retain the attention of consumers is increasingly difficult. For example, many users no longer pay any attention, unconsciously, to banner ads on the Internet. This kind of process is called Banner Blindness.The attention level also varies depending on the activity of the individual and the number of other stimuli in the environment. For example, an individual who is bored during a subway trip will be much more attentive to a new ad displayed in the tube. It is a new stimuli that breaks the trip routine for him.Consumers will also be much more attentive to stimuli related to a need. For example, a consumer who wishes to buy a new car will pay more attention to car manufacturers ads. While neglecting those for computers.Lastly, people are more likely to be attentive to stimuli that are new or out of the ordinary. For example, an innovative advertising or a marketing message (Unique Value Proposition) widely different from its competitors is more likely to be remembered by consumers. Selective Distortion:In many situations, two people are not going to interpret an information or a stimulus in the same way. Each individual will have a different perception based on his experience, state of mind, beliefs and attitudes. Selective distortion leads people to interpret situations in order to make them consistent with their beliefs and values.For brands, it means that the message they communicate will never be perceived exactly in the same way by consumers. And that everyone may have a different perception of it. Thats why its important to regularly ask consumers in order to know their actual brand perception.Selective distortion often benefits to strong and popular brands. Studies have shown that the perception and brand image plays a key role in the way consumers perceived and judged the product.Several experiments have shown that even if we give them the same product, consumers find that the product is or tastes better when theyve been told that its from a brand they like than when theyve been told its a generic brand. While it is exactly the same product!Similarly, consumers will tend to appreciate even less a product if it comes from a brand for which they have a negative perception. Selective Retention:People do not retain all the information and stimuli they have been exposed to. Selective retention means what the individual will store and retain from a given situation or a particular stimulus. As for selective distortion, individuals tend to memorize information that will fit with their existing beliefs and perceptions.For example, consumers will remember especially the benefits of a brand or product they like and will forget the drawbacks or competing products advantages.Selective retention is also what explains why brands and advertisers use so much repetition in their advertising campaigns and why they are so broadcasted. So that the selective retention can help the brand to become a top of mind brand in the consumers mind.Learning:Learning is through action. When we act, we learn. It implies a change in the behavior resulting from the experience. The learning changes the behavior of an individual as he acquires information and experience.For example, if you are sick after drinking milk, you had a negative experience, you associate the milk with this state of discomfort and you learn that you should not drink milk. Therefore, you dont buy milk anymore.Rather, if you had a good experience with the product, you will have much more desire to buy it again next time.The learning theories can be used in marketing by brands. As the theory of operant conditioning which states that you can build a good image and high demand for a product by associating it with a positive reinforcement (or rather a bad image with a negative reinforcement)Beliefs and attitudes:A belief is a conviction that an individual has on something. Through the experience he acquires, his learning and his external influences (family, friends, etc..), he will develop beliefs that will influence his buying behavior.While an attitude can be defined as a feeling, an assessment of an object or idea and the predisposition to act in a certain way toward that object. Attitudes allow the individual to develop a coherent behavior against a class of similar objects or ideas.Beliefs as well as attitudes are generally well-anchored in the individuals mind and are difficult to change. For many people, their beliefs and attitudes are part of their personality and of who they are.However, it is important to understand, identify and analyze the positive attitudes and beliefs but also the negative ones that consumers can have on a brand or product. To change the brands marketing message or adjust its positioning in order to get consumers to change their brand perception.Consumer behaviorinvolves the psychological processes that consumers go through in recognizing needs, finding ways to solve these needs, making purchase decisions (e.g., whether or not to purchase a product and, if so, which brand and where), interpret information, make plans, and implement these plans (e.g., by engaging in comparison shopping or actually purchasing a product).

Theory of consumer behaviorOur analysis of demand permits us to determine the underlying factors affecting the level of consumer demand of a given commodity. An increase in the price of a commodity, we expect consumers to react by decreasing the quantity they want to buy. Our discussion of elasticity of demand further develop our understanding of demand by showing to us the extent of how consumers react to adjustment in price.

In this chapter, we further explain the behavior of demand by analyzing consumer behavior. The theory of consumer behavior describes how consumers buy different goods and services. Furthermore, consumer behavior also explains how a consumer allocates its income in relation to the purchase of different commodities and how price affects his or her decision. There are two theories that seek to explain consumer behavior. These are the utility theory and the indifference preference theory.Consumer behavior assumptions:1. Rational consumer2. Consumer Preferences

Application of Consumer BehaviourThe study of consumer behaviour deals with basic questions related to buying such as: what we buy, why we buy and how we buy. The study of consumer behaviour makes us aware of the subtle influences that persuade us to use the product or services of our choices we do. For understanding consumer behaviour, implementation of consumer behaviour theories and verification of applications of such theories is necessary. Consumer behaviour is simple a large subset of larger field of human behaviour and an extended field of marketing attracting researchers and marketers from past few decades. Four main applications of consumer behavior The most obvious application of consumer behaviour is for deriving marketing strategy. New products initially adopted by a few consumers and spread gradually to the rest of the population later. The companies that introduce new products must be well financed so that they can stay afloat until their products become a commercial success. It is also important to please initial customers, since they will in turn influence many subsequent customers brand choices.

CONSUMER BEHAVIOUR: AN EMERGING FIELD OF STUDY In the highly specialised study of business management, business administration or just management today, marketing management function plays a very critical role in business activities. This is because this functional area of management (1) earns the revenue and (2) works in the close proximity with the public or persons outside the organisation. Controlling these two attributes to have the desired benefits are the most difficult part of the management, because none of these two are within the direct control of the marketers. This does not mean that the other functional areas are not useful, but they are not directly involved in the activities mentioned above.Marketing consists of an interaction between buyer and seller for the purpose of exchanging something valuable to the mutual benefit of both the parties to the transaction. One cannot appreciate this marketing process by observing only the seller, knowledge about consumer is a sound basis for marketing strategies and decisions. Markets are selected on the basis of consumer wants, location, characteristics and expenditure patterns. To ignore the customer can lead to disaster in a modern economy. Consumer behaviour has become an integral part of strategic market planning. It is also the basis of the approach to the concept of Holistic Marketing. The belief that ethics and corporate social responsibility should also be integral components of every marketing decision is embodied in a revised marketing concept the societal marketing concept which calls on marketers to fulfil the needs of their target markets in ways that improve society as a whole. Consumer or the Customer play a very critical role as these are the people who finally buy the goods and services of the organization and the firm is always on the move to make them buy so as to earn revenue. Its crucial from both the points of view as given below: From the customers point of view.

Today, in the highly developed and technologically advanced society, the customers have a great deal of choices and options (often very close and competing) to decide on or compare; (a) they have the products of an extreme range of products attributes .(b) they have a wide range of cost and payment choices .(c) they can order them to be supplied to their door step or anywhere else (the 3rd P - Place) (d) finally they are bombarded with more communications from more channels of information than ever before with the invent of information technology (the 4th P - Promotion). From the marketers point of view: The purpose of marketing is to sell more stuff to more people more often for more money in order to make more profit. This is the basic principle of requirement for the marketers in earlier days where aggressive selling was the primary aim. It cannot be achieved by force, aggression or plain alluring. Customer today are more informed, more knowledgeable, more demanding, more discerning and above all there is no dearth of marketers to buy from. The marketers have to earn them or win them over. The global marketplace is a study of diversity among consumers, producers, marketers, retailers, advertising media, cultures, customs and of course the individual or psychological behaviour. However, despite prevailing diversities, there also are many similarities. Consumer market is highly sensitive and driven by widely diversified culture in many countries. The study of consumer behaviour is also very important to the marketers because it enables them to understand and predict buying behaviour of consumers in the marketplace. It is concerned not only with what consumers buy, but also with why they buy it, when, where, how they buy it, how often they buy it and also how they enjoy the services. Consumer research is the methodology used to study consumer behaviour; it takes place at every phase of the buying process: before the purchase, during the purchase and after the purchase. Researches shows that two different buyers buying the same product may have done it for different reasons, paid different prices, used in different ways, have different emotional attachments towards the things and so on. The market strategies are reframed to achieve organisational objectives depending upon knowing, serving and influencing consumers. This suggests that the knowledge and information about consumers is critical for developing successful marketing strategies. The relationship between consumers and marketers, consumer behaviour and marketing strategy is instable to attain organisational objectives. Consumer behaviour is interdisciplinary approach based on concepts and theories about people that have been developed by behavioural scientists, philosophers and researchers in diverse disciplines such as psychology, sociology, social psychology, cultural anthropology and economics. The study of consumer behaviour also helps management to understand consumers needs so as to recognise the potential for the trend of development of change in consumer requirements and new technology and also to articulate the new thing in terms of the consumers needs so that it will be universally accepted in the market well. The following are few examples of the benefits of the study of consumer behaviour derived by the different categories of people: (a) a marketing manager should know about consumer behaviour as it will Chapter 2: Consumer Behaviour help him to design better marketing plans to get those plans accepted within the company. (b) in insurance company the marketing department would like to know the policyholders need and (c) researchers want to analyse the consumers decision process and ingredients of customer satisfaction. DIFFERENT VIEWS ON CUSTOMER :Marketing scientists had noted that consumer does not always act or react as suggested by economic theory. Therefore customer is further analysed from different angle. Sometime consumers buy because of emotions involved in a purchase decision or several other reasons. (1) Economic and Passive Customer: Economic view explains the consumer as an economic man who buys rationally to maximize the utility (benefits) derived from a product or service. The passive view explains the consumer basically submissive to the self-serving interest and promotional efforts of marketers. (2) Cognitive Versus Emotional Customer: According to cognitive view consumer is defined as a thinker and problem solver. Emotional man is a reality of each of us because of deeply rooted feeling and emotions. (3) Potential and Realised Customer: There are three possibilities to identify the state of consumer; (1) non consumers (2) potential consumers and (3) realized consumers. A non consumer is an individual who has no need for a given product/service and is not likely to have need in the foreseeable future. An individual not currently purchasing may influenced to buy at some future point of time is referred to as a potential consumer. Realized consumers generally conform to our earlier definition of purchaser or shopper, since they are engaged in buying. (4) Personal Consumer Versus Organisational Consumer: The term consumer is often used to describe two different kinds of consuming entities; the personal consumer and the organisational consumer. The personal consumer buys goods and services for his own, for the use of the household, for just one: Consumer Behaviour 104 member or as a gift for a friend. In these context the goods are bought or finally use by individuals who are referred to as end users or ultimate consumers. Whereas organizational consumers buy for altering, modifying or reselling the products/services. (5) Final Consumer: Any person engaged in the consumption process is a consumer but these buyers can be identified by the type of market to which they belong. Two major types of market to which they belong are final consumer and industrial buyer. The final consumer market consists of individuals who buy for personal consumption or to meet the collective needs of family or household unit. (6) Rural Consumer: The rural market is one such segment that caught the fancy of certain Indian marketers in a big war. Marketer considers catering to the rural market as an opportunity, an antidote to the slow growth they faced in urban India. Rural consumers as a segment have several distinctive characteristics and the values aspirations and needs of this vast heterogeneous culture of rural consumers are quite different from the urban consumers. (7) Women as a Consumer and Decision Maker: Gender is considered as an important characteristic for consumer behaviour studies by marketers from past several years. They treat women as an exception rather than as normal average is a retrograde gap. Large number of experts felt that it is a fact of life that women consumer exhibit special traits and behaviour. 2.7 BUYING ROLES For making strategic decisions the marketers have to identify the buyers who make the final buying decisions. It is truly a big task before the marketers to identify the target buyers of the particular service. (1) Influencer: Several people may be involved in a particular purchase decision, but all of them are not consumers. A person who has influence, whose views or advice is given wheightage while taking the final decision. Chapter 2: Consumer Behaviour 105 (2) Gatekeepers: Family members who control the flow of information about a product or service into the family. (3) Initiator: The person who is the first to suggest or think of the idea of purchasing a product or service. (4) Decider: The person who finally takes the decisions of whether to buy, what to buy, how to buy and from where to buy. (5) Buyer: The person who actually buy the product/service after making PAYMENTS.

CONCEPTS AND DIMENSIONS OF CONSUMER BEHAVIOUR Consumer behaviour is an interdisciplinary science and relatively emerged as a new field of study in the mid to late 1060s. This new discipline is borrowed heavily from concepts developed in other scientific disciplines such as applied psychology, social psychology, cultural anthropology, economics and econometrics. Therefore, it is crucial to discuss various dimensions of consumer behaviour in the context of Indian consumer. (a) Consumer Needs and Motivation: Consumer needs are the basis of all modern marketing. The key to a companys survival, profitability and growth in a highly competitive environment is its ability to identify and satisfy unfulfilled consumer needs Marketers do not create needs though in some instances they may make consumer more keenly aware of unfelt need. Motivation can be described as the deriving force within individuals that impels them to action. The deriving force is produced by a state of tension exists as the result of an unfilled need. Motivation is a need-induced tension which exerts a push on the individual to engage in behaviour that he expects, will gratify needs and thus reduce tension. Individuals strive both consciously and subconsciously to reduce this tension through behaviour that they anticipate will fulfill their needs. Consumer motivation is dynamic in nature because their wants are frequently changing. (b) Consumer Psychographics: Marketing practitioner and consumer researchers refer Psychographics as lifestyle analysis or AIO (activity, interest and opinions) research. Consumer specific psychographics researches are related to consumer personality, buying motives, interests, attitudes, beliefs and values. Services specific psychographics researches are related to product attributes such as consumer responses about products, brands or a specific consumption situation. Consumer perception: Perception is defined as the process by which an individual organises and interprets stimuli into a meaningful and coherent manner. Stimuli are sensory inputs include services, packages, brand names, advertisements and commercials. Sensory receptors are the human organs that receive sensory inputs. Sensation is the immediate and direct response of the sensory organs to simple stimuli. Learning and consumer involvement: Consumer learning is the process of acquiring the knowledge related to purchase and consumption information. Consumer attitudes: Attitudes are expression of inner feelings that reflects whether a person is favorably or unfavorably predisposed to some object, person or event. As an outcome of psychological process attitudes are not directly observable but must be inferred from what people say or do. (c) Demographic Factors: Demographics describe a population in terms of its size, distribution and structure. Demographics influence buying behaviour both directly and indirectly by affecting other attributes of individuals such as their personal values and decision styles. There are contradictory conclusions about the effect of age, income and gender for a particular service. Age, age-groups, education level, income, occupation etc. serves as various dimensions of demographics. In India additional factors such as religion, social denominations, caste, age, family background, regional disparities in Chapter 2: Consumer Behaviour 107 states, linguistic difference, regional perception of class factor and the degree of impact of these factors in affecting the social status, all play crucial role in determining the social status of an individual. (d) Economic Factors: Wealth, home ownership, number of earning members in a family, household income, expenditure, rate of interest, inflation, economic conditions and investment pattern are some of the economic factors have strong influence on consumer purchase decision. (e) Communication and Consumer Behaviour: FLC is a strategic tool for marketers to segment families in terms of a series of stages spanning the life course of a family unit. Traditional family life cycle stages are bachelorhood, honeymooners, parenthood, post parenthood and dissolution. Consumer and their social classes: Social class is defined as the division of members of a society into a hierarchy of distinct status classes so that members of each class have relatively the same status and members of all other classes have either more or less status. Social class is measured in terms of social status of its members and comparison of members of each social Chapter 2: Consumer Behaviour 108 class with other social Communication is the transmission of messages from a sender to a receiver by means of signals of some sort sent through a channel. There are four basic components of all communications: a source, a destination, a medium and a message. There are two types of communication to which a consumer is exposed interpersonal communication and impersonal (or mass) communication. (f) Socio-cultural Factors: Consumer in a group and consumer reference groups: A group may be defined as two or more people who interact to accomplish similar goals. Consumer relevant groups are family, friends, formal social groups, shopping groups, consumer action groups, work groups, references groups etc. Four basic functions provided by the family are relevant to consumer behaviour these include; economic well-being, emotionalsupport, suitable family lifestyles and family-member socialization. Sociologists and researchers have strongly favoured the concept of Family Life Cycle (FLC) - a way to classify family units into significant groups. classes. Some of the variables of the social class are occupation, income, educational level and property ownership etc. Culture and consumer behaviour: Culture is a sum total of learned beliefs, values and customs that serves to direct the consumer behaviour of a particular society. Subculture can be thought as a distinct cultural group that exists as an identifiable segment within a larger and more complex society. (g) Consumer and Consumerism:

BUYING PROCESS OR CONSUMER DECISION MAKING : Decision is the selection of an action from two or more alternatives. In other words, in order to make a decision, there must be a choice of alternatives available. If a person has a choice between making a purchase and not making a purchase, or a choice between brands, we can say that this person is in a position to make a decision. A no-choice decision is commonly referred to as a Hobsons choice. Buyer decision making is an attempt to solve consumer problems. A problem refers to a discrepancy between a desired state and an ideal state which is sufficient to arouse and activate a decision process. Thus problem can be major or minor and the broader and more ambiguous a problem is, the more potential solutions are generally available. The study of buyer behaviour is the most dynamic marketing activities as the buyer rapidly change their preferences and are affected by multiple factors at a given point of time, are difficult to analyze. Therefore, it is necessary that continuous study of buying behaviour must be conducted and extended. This monitoring will make an understanding of marketing management to take effective decisions regarding service price, distribution and promotion. A marketer understands how buyer will respond to different service features, prices, advertising appeals and so on will have an enormous Chapter 2: Consumer Behaviour 109 advantage over his adversaries. When a buyer takes a decision to buy there is no rigid rule to bind them. Sometimes the decisions are taken on spot or after evaluating various alternatives available and reassuring himself with the opinion of those who have already purchased the service. Four views of buyer decision making: Before presenting a simple model how consumers make decisions. For depicting consumer decision making its important to consider several models of man. The term model of man refers to a general perspective held by a significant number of people concerning how (and why) individuals behave as they do. Following are the consumer-related models of man:- (1) Economic man (Traditional view): Economics reflects a world of perfect competition and the consumer is often characterised as an economic man. The economic theory of consumer behaviour was synthesized by Alfred Marshall from the ideas of Classical Economists and the proponents of theory of Marginal Utility. Economic view explains the consumer as an economic man who buys rationally to maximize the utility (benefits) derived from a service. To behave rationally in the economic sense a consumer would have tobe aware of all available service alternatives. The consumer would have to be capable of correctly ranking each alternative in terms of its benefits and disadvantages. According to leading social scientists this view is unrealistic because of three reasons (a) people are limited by their existing skills, habits and reflexes (b) people are limited by their existing values and goals (c) people are limited by the extent of their knowledge. However, consumers rarely have enough information, sufficient or sufficiently information, or even an adequate degree of involvement or motivation to make perfect decision. Consumers are living in an imperfect world where they do not maximise their decisions in terms of economic considerations such as price- quantity relationships, marginal utility or indifference curves. Indeed the consumers are often unwilling to engage in extensive decision making activities and will instead settle for a satisfactory decision, one that is good enough. For this reason, the economic model is often rejected as too idealistic and simplistic. Chapter 2: Consumer Behaviour 110 The economists described man as a rational buyer and viewed the market as a collection of homogenous buyers.(2) Passive man: This model is quite opposite to the economic model of man. The passive view depicts the consumer basically submissive to the self-serving interest and promotional efforts of marketers. Consumers are perceived as impulsive and irrational purchasers, ready to yield to the arms and aims of marketers. At least to some degree the passive model of the consumer was subscribed by the hard deriving salesman who is trained to manipulate customer. The passive man view fails to recognize that the consumer plays an equal (if not dominant) role in many buying situations by seeking information about service alternatives and selecting the service that appears to offer greatest satisfaction. (3) Cognitive man: According to this view consumer is defined as a thinking problem solver. Within this framework consumers are frequently depicted as either receptive to or actively seeking services that fulfill their needs and enrich their lives. The cognitive man focuses on the process by which consumers seek and evaluate information about the services. There are six types of consumer perceived risks (functional risk, economic risk, physical risk, social risk, psychological risk and time risk) which a consumer use to handle such as collecting information about alternatives, patronizing specific agents, brand loyalty etc. These risks are key components of cognitive view and consumers are viewed as information-processing systems. Consumer may use a preference formation strategy that is CONSUMERS CHOICES (OPTIONS/ATTRIBUTES:: Personality strongly impacts decisions of buyer. Consumers choice involves selection of one service/brand from a set of possibilities and on variety, reception of stimulators and excitement of trying from new stores. Sometimes choices are based upon judgments like consumer will purchase the services if they have a favorable attitude towards a product consumer choice involves selecting one service from a set of possibilities. (1) Consideration Set: Consideration set is the range of services that a consumers can recall on the basis of past experience before any new purchase. (2) Price-List Cuing: Consumers consideration sets are likely to vary over the time, depending on how many and which particular brands happen to be salient, vivid or accessible from memory at the time the purchase decision is rendered. This dynamic set of consideration set formation raises some interesting issues for marketing strategy.BUYING/PURCHASE BEHAVIOUR The output of the consumer decision making concerns two important issues associated to post decision activities purchase behaviour and post purchase evaluation. The objective of studying these activities is to increase the consumer satisfaction with his purchase. Consumers make two types of purchases; trial purchase and repeat purchases. If a consumer purchases a service or brand for the first time and buys a smaller quantity than usual such purchase would termed as trial purchase. Thus a trial is the exploratory phase of purchase behaviour in which consumers attempt to evaluate a service through direct use. If a trial brand is found more satisfactory and better than other established brands/service, the consumers are likely to repeat the purchase. Repeat purchase behaviour is closely related to the concept of brand loyalty. Trial is not feasible in many cases due to certain reasons like highly priced product and budgetary constraints.

CHAPTER 2RESEARCH METHODOLOGY

RESEARCH METHODOLOGY

Research methodology Theprocessused to collectinformationanddatafor the purpose ofmakingbusinessdecisions. The methodology may include publication research, interviews,surveysand other researchtechniques, and could include both present and historical information. It is the way to systematically solve the research problem. It may be understood as a science of studying how research is done scientifically. In it we study the various steps that are adopted by the researcher. It is essential for the researcher to know not only the research method technique but also the methodology.By the research, we get the knowledge that how much the company contributes to the society. And by research, we indentify that there are very many problems like inordinate delay in the transfer of shared certificate. This is important because by this we get to know about the profit gaining and investment of the company.

OBJECTIVES OF STUDY

To compare and study Barista and Caf Coffee Day, identify areas of excellence and areas needing improvement, and provide suggestions for such improvement. To compare two prominent service sector companies on a common platform, analyze their working and performance and highlight what they are doing well, while providing suggestions and recommendations for improvement. To understand consumer Behaviour To understand market performance of barista and caf coffee day.

REVIEW OF LITERATURE

Acc to Hirschman 1986, calder and tybout 1987: In contrast to the traditional perspectives, the interpretive and postmodern perspectives of consumer behaviour attribute consumers with the capacity to proactively assign meaning to and represent their environments rather than just passively respond to them.

Acc to Holbroo k 1995: The interpretive perspective for example suggests, that behaviour is channeled by the content and structure of consumers subjective meaning systems .

Acc to OShaughnessy and Holbrook (1988, 206) -:From an interpretivist point of view, actions like buying are not simply matters of rational calculation with consumers computing up the pros and cons of objective facts, but rather are matters involving felt expectations as to how the consumption episode will be personally experienced.

Acc to (Buttle 1989; Firat 1992; Hirschman 1985 Thus consumers behave and make decisions by reference to the internal (psycho) logic of their subjective meaning systems. The focus of inquiry of the interpretive and postmodern perspectives therefore becomes, consumers subjective meanings and language or discourses7.

Acc to Brown (1995b, 295): Asserts however, that the interpretive perspective is different from the postmodern perspective in marketing because the former presupposes an autonomous human subject, the free-thinking, self conscious individual. For example, humanistic and phenomenological perspectives conceive the individual consumer as a unified, coherent and rational agent who is the author of his or her own experience and meaning; therefore, analogous to the traditional conjecture, the interpretive paradigm also assumes that there is some pre-given natural essence of consumer .

Acc to Slife and Williams 1995): In addition, whilst the interpretive paradigm stresses the experiential side of consumer behaviour such as fantasies, feelings and fun .

Acc to (Holbrook and Hirschman 1982), it suggests that consumers construct coherent and consistent representations, or subjective maps, of the world in order to make it more meaningful and predictable (

Acc to brown 1995a :In contrast, the postmodern perspective argues that there is no fixed or pre-given essences residing inside consumers that make them behave the way they do

Acc to foster 1983: Rather, self-identity and subjectivity are assumed to be constituted by particular forms of language, or discourses, which in turn are mediated by the consumers social interactions .

Acc to burr 1995: Thus, identity is said to be constantly in flux and changing depending upon with whom the consumer is consuming, in what circumstances they are consuming, and for what purposes . The postmodern perspective of consumer behaviour firmly points to the fragmentary and fluid nature of consumers self-identity.

Acc to Firat et al. (1995, 44) contend, that consumers frequently change their self-concepts, character, values and often subscribe to multiple and often highly contradictory value systems, lifestyles, etc., without feeling inconsistent or improper. Thus, the postmodern perspective places great emphasis on the creativity, autonomy, and power of consumers to define and change themselves and the world in which they live through different patterns of consumption and lifestyles s.

Acc to Hawkins, Best, Coney and Mokherjee: The authors of the book discussed various factors affecting consumer behaviour for buying such as demographic and social influences (family and household), group influence, impact of advertising and internal influences (learning, perception, attitude etc.). The book elucidated the topics such as types of consumer decisions, purchase involvement and product involvement. The book also emphasized on information search process and various ways for providing relevant information to the consumers are recommended in this study. The book also emphasized on individual judgment and proposed that the ability of an individual to distinguish between similar stimuli is called sensory discrimination which could involve many variables related to individual preferences. 1

Acc to Leslie Lazar and Schiffman: The authors suggested consumer behaviour as individual differs as from group. The family decision for a purchase decision is entirely different from individual decision making. The authors discussed various variables that affect consumer purchase decision. The book focused on family life cycle and various needs of consumer during different life stages. The family decision making process as a group decision making is elaborated and it is recommended to segment the market according to family need hierarchy.

Acc to Bitta and Della: The authors proposed that consumer behaviour studies play an important role in deciding marketing segments and marketing strategies. The authors recommended that consumer is often studied because certain discussions are significantly affected by their behaviour or expected Chapter 3: Consumer Behaviour In Life Insurance 164 actions. For this reason such consumer behaviour is said to be an applied discipline. Such applications can exist at two levels of analysis. Market segmentation, consumer decision making and buying behaviour is considered as core marketing activities in designing effective marketing strategies.

The micro perspective involves understanding consumers for the purpose of helping a firm or organisation to accomplish its objectives. On the other hand macro or societal perspective consumers collectively influence economic and social conditions within an entire society. The authors discussed factors affecting consumer behaviour at micro and macro level for making a purchase decision.

Acc to Karunik and Schiffman: The book highlights dynamic business environment is turbulent as never before and the service industry as promising as never before. In this era of intense competition companies understand the customer is the king in the market and success depends a lot on the efficiency of the managers in delivering the promised product or services. The responsibility lies on the organisations to develop a culture, ethics, responsibility, value and quality services should be offered to achieve higher level of customer satisfaction. Dynamic consumer behaviour is required to analyse various factors affecting consumer purchase decision directly or indirectly.

Acc to Batra, S, K & Kazmi,: The book has described consumer decision making process, buyers black box and importance of consumer behaviour studies for marketers in order to understand what satisfy the ultimate consumer. The book described vital characteristics of Indian consumer and competitive advantages in Indian context for the marketers. The consumer decision process, buying roles and consumer black box are discussed in detail. The various steps evolving consumer decision making are linked with the life stages. Young buyers, women and children considered as uprising consumers groups as a part of competitive market situations.

Acc to Philip Kotler: The customer is always considered as a core of business activity. Author discussed in this book that marketing is only one factor in attracting and keeping customers. Peter F. Drucker observed that a companys first task is to create customers. Customer estimate will deliver the most Chapter 3: Consumer Behaviour In Life Insurance 165 value. The book highlighted consumer decisions making process and buying roles. The book considered customers as value maximiser within the bounds of search costs, limited knowledge, mobility and income.

Acc to Mar C. Lovelock and J. Writz: The book emphasised on services marketing as a broad area and places marketing issues within a broader general management context while offering a balanced focused on close ties that link marketing, operations and human resource marketing. It also relates the understanding of consumer behaviour function to develop appropriate marketing strategy. Service triangle, feature of services and service marketing strategies are discussed in this book with detailed explanation of service quality model.

Acc to Lovelock: The book is emphasised on advancements and challenges in services marketing. The book discussed role of consumer in designing services, delivering and performing quality service to the consumers for deriving customer satisfaction. The book focused on complexity of designing service marketing strategies and establishing service standards. Various threats and challenges in designing service marketing strategies have been discussed with required solutions in turbulent marketing situations.

Acc to Zeithaml and Bitner: The book emphasised on various ingredients of services marketing such as consumer behaviour in services, services designs and standards, delivering and performing service and managing service promises. The book focused on various challenges and issues of service marketing, the GAPS model of service quality and customer defined service standards. The book discussed service quality models and service preference models in detail. The book also recommended uniformity in quality standards should be implemented. Indian Insurance A Profile by Narayanan, H.: The book highlighted features of Indian insurance markets, development of insurance sector in India, major players in insurance sector and insurance products offered to Indian policyholders. The book also provided detail of growth of life insurance and general insurance in India with appropriate statistics. Various phases of growth and development of insurance sector are presented in an efficient manner. The comparison of life insurance and life insurance is also provided in Indian and global context. The detail of LIC and private players is given in this book related to number of life insurance policies, growth in life insurance premium, life insurance density and number of agents in life insurance etc.

Acc to. M. Bhole and Jitendra Mahakud, Fifth ed.: The book focused on Financial Institutions and Markets: Structure, Growth and Innovations, the book elucidated IRDA policy reforms, Indian Financial System since 2002 and insurance sector reforms. The aggregate view of Indian insurance is presented is three developmental phases since 1818. Policy development, structure and various types of insurance plans are defined with evaluation process. The growth of financial services, financial sector reforms and role of regulators in financial reforms has been discussed in this book.

Hypothesis of the study: It is a tool of quantitative study. It is a tentative and formal prediction about the relationship between two or more variables in the population being studied, and the hypothesis translates the research question into a prediction of expected outcomes. There is difference between the consumer behavior of barista and caf coffee day customers.It is of two types:Null hypothesis: It always predicts the absence relationship between two variables. For ex: there is no relationship between education and income.Alternative hypothesis: It states an actual expectation, such as higher level of education increase the likelihood of earning a higher income.

SIGNIFICANCE OF THE STUDY The project undertaken by me on consumer behavior proves very significant element to know the consumer behaviour of the customers of barista and caf coffee day. So the study helps me out: To compare and study barista and caf coffee day, identifying areas of excellence, areas needing improvement . To understand market performance of barista and caf coffee day. Consumers tastes and preferences are ever changing. Study of consumer behaviour gives information regarding colour, design, size etc. which consumers want. In short, consumer behaviour helps in formulating of production policy

Besides, the primary data collected with the help of the questionnaire, I have also collected the relevant secondary data from various sources like magazines, books and internet and newspapers.Based on relevant primary and secondary data, a comparative analysis has been done so as to find out the areas of excellence and areas of improvement of both organizations. Statistical tools: Through the questionnaire The programming used will be SPSS and The word. Pie charts Bar graphs

Limitations of study The scope of study is limited to the respondents as they are selected from in and around Jaipur. Measurement of customer satisfaction is difficult However, barista and caf coffee day are located in other places. Only opinion of respondents of Jaipur was considered for finding out the opinion of respondents. Most of the customers were not satisfied with taste and quality of eatables of barista and caf coffee day.

CHAPTER 3COMPANY PROFILE

BARISTA Barista coffee was establishes in 1999 with the aim of identifying growth opportunities in the coffee business. Increasing disposable incomes and global trends in coffee indicate immense growth potential in one particular segment.More significantly, they believe they have been quick to spot a latent need waiting to be trapped.Coffee lovers seek a complete experience. One that combines intelligent positioning with the right product and carefully designed cafes. In other words, with the right customers seek an experiential lifestyle brand. The Barista Caf LogoAs of today, Barista exists in over 22 cities, and operates over 140 outlets nationally. In the last 2 years, Barista has opened over 100 outlets in the country and with a new outlet opening nationally every 14 dates, Barista is currently experiencing phenomenal growth.With outlets opening in Sri Lanka and Dubai, Barista is looking at potential growth opportunities in Asia, making it highly competitive international brand.

Marketing MixProduct MixCoffees & Teas RefreshingAlternativesEatables

Coffee with Milk Smoothies SandwichesCappuccinoCaffe MochaCaffe LatteGuavaMangoGrapePaneer Tikka

Black Coffee Granitas RollsEspresso ItalianoEsperanoTMAmericanoBlue CuracaoLime Ice

Dessert Coffees Milk Based PastasLatte BiancoCaffe BorgiaStrawberry FreezeMocha Freeze

Cold Coffees Iced Tea Other FoodBrrristaTMBrrrista FrappeTMBrrrista BlastTMIced Caffe Mocha

Coffee Add-ons Other Drinks DessertsVarious FlavoursChocolate FudgeWhipped Cream

Barista: Product Mix Width Some products may have been added/ removed from the product mix, due to changes since gathering information.

Product Sources:Barista sources its coffee beans from around the world, but a major supplier is of the TATA Group that owns a large stake- holding in Barista. These coffee beans are then sent to venice, Italy where they are roasted into a blend exclusively for Barista.The food and deserts at Barista is exlusively catered to by the Taj, who ensures a high standard of quality with all its products. Barista also sells merchandise through its store, all of which is imported. The merchandise accounts for nearly 1/6th of Baristas overall sales..The Barista coffee beansQuality Sources:Barista has a check on the quality of its products every 14 days. Barista also incorporate TQM at its headquarters in Delhi. Since Delhi is the base for all its distribution,