unit-i crcbm gvp mba

CONSUMER BEHAVIOR

UNIT-I: Introduction: Nature, Scope and meaning of consumer behavior-consumer and marketing

strategy-Determinants of consumer behavior-Models of consumer behavior – (Nicosia, Howard

Seth Model, The Engel –Kollat-Blackwell Model) Profile of the Indian Consumer.

Introduction: Consumer behavior is comparatively a new field of study which evolved just after the

Second World War. The seller’s market has disappeared and buyers market has come up. This led to

paradigm shift of the manufacturer’s attention from product to consumer and specially focused on the

consumer behaviour. The evaluation of marketing concept from mere selling concept to consumer

oriented marketing has resulted in buyer behavior becoming an independent discipline. The growth of

consumerism and consumer legislation emphasizes the importance that is given to the consumer.

Consumer behavior is a study of how individuals make decision to spend their available resources (time,

money and effort) or consumption related aspects (What they buy? When they buy?, How they buy?

etc.).

The heterogeneity among people makes understating consumer behavior challenging task to marketers.

Hence marketers felt the need to obtain an in depth knowledge of consumers buying behavior. Finally

this knowledge acted as an imperative tool in the hats of marketers to forecast the future buying behavior

of customers and devise four marketing strategies in order to create long term customer relationship.

Consumer Behaviour

It is broadly the study of individuals, or organizations and the processes consumers use to search, select,

use and dispose of products, services, experience, or ideas to satisfy needs and its impact on the consumer

and society.

Customers versus Consumers

The term ‘customer’ is specific in terms of brand, company, or shop. It refers to person who customarily

or regularly purchases particular brand, purchases particular company’s product, or purchases from

particular shop. Thus a person who shops at Bata Stores or who uses Raymond’s clothing is a customer

of these firms. Whereas the ‘consumer’ is a person who generally engages in the activities - search,

select, use and dispose of products, services, experience, or ideas.

UNIT-I GVP-MBA SEMESTER -III

CONSUMER BEHAVIOR

Consumer Motives

Consumer has a motive for purchasing a particular product. Motive is a strong feeling, urge, instinct,

desire or emotion that makes the buyer to make a decision to buy. Buying motives thus are defined as

‘those influences or considerations which provide the impulse to buy, induce action or determine choice

in the purchase of goods or service. These motives are generally controlled by economic, social,

psychological influences etc.

Need for Study of Consumer Behaviour

The study of consumer behavior helps everybody as all are consumers. It is essential for marketers to

understand consumers to survive and succeed in the competitive marketing environment. The following

reasons highlight the importance of studying consumer behaviour as a discipline.

Before understanding consumer behaviour let us first go through few more terminologies:

Who is a Consumer ?

Any individual who purchases goods and services from the market for his/her end-use is called a

consumer. In other words a consumer is one who consumes goods and services available in the market.

Example - Tom might purchase a tricycle for his son or Mike might buy a shirt for himself. In the abo

examples, both Tom and Mike are consumers.

What is consumer Interest ?

Every customer shows inclination towards particular products and services. Consumer interest is nothing

but willingness of consumers to purchase products and services as per their taste, need and of course

pocket.

Let us go through the following example:

Both Maria and Sandra went to the nearby shopping mall to buy dresses for themselves. The store

manager showed them the best dresses available with him. Maria immediately purchased two dresses

but Sandra returned home empty handed. The dresses were little too expensive for Sandra and she

preferred simple and subtle designs as compared to designer wears available at the store.


CONSUMER BEHAVIOR

In the above example Sandra and Maria had similar requirements but there was a huge

difference in their taste, mind set and ability to spend.

What is Consumer Behaviour?

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 Purpose

Why do you think an individual does not buy a product ?

No requirement

Income/Budget/Financial constraints

Taste

When do you think consumers purchase products?

Festive season

Birthday

Anniversary

Marriage or other special occasions

There are in fact 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.


CONSUMER BEHAVIOR

In a layman’s 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

DEFINING CONSUMER BEHAVIOR:

Consumer Behavior may be defined as “the interplay of forces that takes place during a

consumption process, within a consumers’ self and his environment. - this interaction takes place

between three elements viz. knowledge, affect and behavior; - it continues through pre-purchase

activity to the post purchase experience; - it includes the stages of evaluating, acquiring, using

and disposing of goods and services”.

The “consumer” includes both personal consumers and business/industrial/organizational

consumers.

Consumer behavior explains the reasons and logic that underlie purchasing decisions and

consumption patterns; it explains the processes through which buyers make decisions. The study

includes within its purview, the interplay between cognition, affect and behavior that goes on

within a consumer during the consumption process: selecting, using and disposing off goods and

services.

Consumer behavior explains the reasons and logic that underlie purchasing decisions and

consumption patterns; it explains the processes through which buyers make decisions. The study

includes within its purview, the interplay between cognition, affect and behavior that goes on

within a consumer during the consumption process: selecting, using and disposing off goods and

services.

“The behavior that consumers display in searching for, purchasing, using, evalauting and disposing of products and services that they expect will satisfy their needs.”

- Schiffman and Kanuk

“…..the decision process and physical activity engaged in when evaluating, acquiring, using or disposing of goods and services."

- Loudon and Bitta


CONSUMER BEHAVIOR

“ The study of consumers as they exchange something of value for a product or service that satisfies their needs”

- Wells and Prensky

“Those actions directly involved in obtaining, consuming and disposing of products and services including the decision processes that precede and follow these actions”.

-Engel, Blackwell, Miniard

“the dynamic interaction of effect and cognition, behavior and the environment by which human beings conduct the exchange aspects of their lives”

-American Marketing Association

NATURE and SCOPE OF CONSUMER BEHAVIOR:

Nature of Consumer Behavior:

The subject deals with issues related to cognition, affect and behavior in consumption behaviors,

against the backdrop of individual and environmental determinants. The individual determinants pertain

to an individual’s internal self and include psychological components like personal motivation and

involvement, perception, learning and memory, attitudes, self-concept and personality, and, decision

making. The environmental determinants pertain to external influences surrounding an individual and

include sociological, anthropological and economic components like the family, social groups, reference

groups, social class, culture, sub-culture, cross-culture, and national and regional influences.

The subject can be studied at micro or macro levels depending upon whether it is analyzed at the

individual level or at the group level.

The subject is interdisciplinary. It has borrowed heavily from psychology (the study of the

individual: individual determinants in buying behavior), sociology (the study of groups: group dynamics

in buying behavior), social psychology (the study of how an individual operates in group/groups and its

effects on buying behavior), anthropology (the influence of society on the individual: cultural and cross-

cultural issues in buying behavior), and economics (income and purchasing power).


CONSUMER BEHAVIOR

Consumer behavior is dynamic and interacting in nature. The three components of cognition,

affect and behavior of individuals alone or in groups keeps on changing; so does the environment. There

is a continuous interplay or interaction between the three components themselves and with the

environment. This impacts consumption pattern and behavior and it keeps on evolving and it is highly

dynamic.

Consumer behavior involves the process of exchange between the buyer and the seller, mutually

beneficial for both.

As a field of study it is descriptive and also analytical/ interpretive. It is descriptive as it explains

consumer decision making and behavior in the context of individual determinants and environmental

influences. It is analytical/ interpretive, as against a backdrop of theories borrowed from psychology,

sociology, social psychology, anthropology and economics, the study analyzes consumption behavior of

individuals alone and in groups. It makes use of qualitative and quantitative tools and techniques for

research and analysis, with the objective is to understand and predict consumption behavior.

It is a science as well as an art. It uses both, theories borrowed from social sciences to understand

consumption behavior, and quantitative and qualitative tools and techniques to predict consumer

behavior.

Scope of Consumer Behavior:

The study of consumer behavior deals with understanding consumption patterns and behavior. It

includes within its ambit the answers to the following: - ‘What’ the consumers buy: goods and services

- ‘Why’ they buy it: need and want

- ‘When’ do they buy it: time: day, week, month, year, occasions etc.

- ‘Where’ they buy it: place

- ‘How often they buy’ it: time interval

- ‘How often they use’ it: frequency of use


CONSUMER BEHAVIOR

The scope of consumer behavior includes not only the actual buyer but also the various roles played by

him/ different individuals.

Basic Components:

Decision making (Cognitive and Affect): -this includes the stages of decision making: Need

recognition, Information search, Evaluation of

alternatives, Purchase activity, Post purchase behavior.

Actual purchase (Behavior): -this includes the visible physical activity of buying of

goods and/or service. It is the result of the interplay of

many individual and environmental determinants which

are invisible.

Examples: Let us take two examples.

Example 1:

A child goes to a kindergarten school. She comes back home and asks her parents to buy her a

set of color pencils and crayons. Now the roles played are:

1. Initiator: the child in nursery school

2. Influencer: a fellow classmate

3. Decider: the father or the mother

4. Buyer: the father or the mother

5. User: the child

Example 2:

The lady of a house who is a housewife and spends her day at home doing household chores

watches TV in her free time. That is her only source of entertainment. The TV at home is giving

problem. She desires a new TV set, and says that she wants an LCD plasma TV. Now the roles

played are:

1. Initiator: the housewife (mother)

2. Influencer: a friend / neighbor


CONSUMER BEHAVIOR

3. Decider: the husband or the son

4. Buyer: the husband or the son

5. User: the family

Consumer behavior focuses specifically on the Buyer and often User. But also analyzes impact

of other roles.

Buyers and

Sellers:

They are the key elements in consumer behavior. They have needs and

wants and go through a complex buying process, so as to be able to satisfy

the need through purchase of the good or service offering. They enter into an

exchange process with the seller, which leaves both the parties (buyer and

seller) better off than before. In fact the exchange process is value enhancing

in nature, leading to satisfaction of both the parties.

APPLICATION OF CONSUMER BEHAVIOR:

An understanding of consumer behavior is necessary for long term success and survival of a firm.

It is viewed as the edifice of the marketing concept, an important orientation in marketing

management.

According to the marketing concept, the marketer should be able to determine needs and wants of

the target segment and provide product and service offerings more effectively and efficiently than

competitors. It is essentially a customer-centered philosophy, which aims at understanding

customer needs and wants, providing the right product and service, and deriving customer

satisfaction; “ make what you can sell” rather than “sell what you make.”

An understanding of the study of consumer behavior helps formulate appropriate marketing

strategies for a firm keeping in view the consumer and his environment.

It has a number of applications; the main application bases are as follows:

Analyze the environment The knowledge of consumer behavior can be applied to help

identify opportunities and fight threats. The opportunities

could be in terms of newer customers, newer markets,

unfulfilled needs and wants (through a study of consumer

individual determinants and other environmental influences).


CONSUMER BEHAVIOR

The threats could be fought by developing and implementing

appropriate marketing strategies to best fit the environment.

The marketing strategies need to be dynamic and constantly evolving keeping in

view the uncertainty in the environment; Environmental uncertainty is a function of

complexity and dynamism. Complexity is defined in terms of the number, strength and

interrelatedness of the various factors in the environment that a firm has to deal with.

Dynamism relates to how quickly the changes take place in the environment.

Segmentation, targeting and

positioning:

The study of consumer behavior may be applied to segment

the market, select the target market and position the

product or service offering. Identifying the target segment,

understanding their needs, providing the right product and

service offering and communicating about the offering – all

of these help a marketer succeed in the long term and

ensure his survival and success in a changing environment.

a) Segment the market: The marketer needs to identify distinct customer groups with needs and

wants, classify them on basis of descriptive characteristics and behavioral dimensions.

The descriptive characteristics may take forms of age, gender, income, occupation, education,

family size, family life cycle, gender, lifestyle, personality, religion, generation, geography,

nationality, and social class. The behavioral dimensions take forms of benefits, uses, use

occasion, usage rates, and loyalty status.

b) Select target market: The marketer then selects one or more markets to enter. The segment(s)

that should be targeted should be viable; there should be a fit between the market attractiveness

and the company’s objectives and resources. The marketer would be able to assess the viability

of a segment on the basis of the following criteria, viz., measurability, substantiability,

accessibility, differentiability, and actionability.


CONSUMER BEHAVIOR

c) Position the product offering in the mind of the customers: The marketers should be able

to communicate the distinct and/or unique product characteristics.

Designing the Marketing Strategy: There exists interrelatedness between the Consumer,

the Environment and the Marketing strategy.

a) Consumer: The consumer has his needs and wants as well as product preferences; Thus, there

exists an interplay of Cognition (knowledge about products and alternatives), Affect (feelings of

favorableness and unfavorableness) and Behavior (action: buy or not to buy).

b) Environment: This refers to forces in the environment, which make the environment complex

and dynamic.

c) Marketing strategies: This implies setting up of goals and then achieving them through the

design of an appropriate marketing mix.

The Marketing Strategy should be designed to influence consumers (Cognition, Affect and

Behavior) and be influenced by them. It should be flexible and ever evolving with changes in the

customer needs and wants; as well as, changes in the environment in which it operates. The

knowledge of consumer behavior can be applied to develop a “best fit” between consumer needs

and wants, the environment in which the firm operates; and, the firms’ goals and objectives.

Designing the Marketing Mix:

4 Ps

The study of consumer behavior may be applied to design

the 4 Ps.


CONSUMER BEHAVIOR

a) Product: The term product includes both tangible products and intangible services. The issues

to address consist of name (brand), size, shape, features, labeling, packaging, accessories and

supplementary products, terms of sale and services, after sales etc.

b) Price: This includes the pricing of the product offering. The major components include, form of

payment, terms and conditions of payment, discounts, price sensitivity, differential prices and

customer reaction, imagery (price increase and customer reaction, price decrease and customer

reaction).

c) Place and Distribution: This includes the marketing channel, and comprises decisions

regarding choice of channel (direct or indirect), location, accessibility and availability of product

offering, wholesaling, retailing, logistics etc.

d) Promotion: This includes marketing communication, and the major issues comprise decisions

on communication/promotion mix, the message and media strategy (the content, appeal and

context).

Application in Governmental and

Non-profit Organizations and Social

Marketing:

The knowledge of consumer behavior finds relevance even in

Governmental and Non-profit Organizations and Social Marketing.

Governmental and Non-profit Organizations have the society as its

customers and need to understand them so as to be able to serve

them better.

Social marketing involves propagation of ideas; attempts at

such circulation and spread of ideas for moral and social upliftment

can be more successful if there is a proper understanding of the these

consumers (i.e., the public and society)

WHY STUDY CONSUMER BEHAVIOR?


CONSUMER BEHAVIOR

The subject of Consumer Behavior is viewed as the edifice of the marketing concept, an important

orientation in marketing management. The knowledge of Consumer Behavior helps the marketer

understand and predict the consumption patterns and consumption behaviors of people. It helps them gain

insights as to why a consumer behaves differently to another consumer; as well as, why a consumer

behaves differently in different times and buying situations. The study helps them understand the internal

(individual determinants) and external (environmental factors) forces that impel people to act out

different consumption patterns and behaviors.

The study helps the marketer in:

a) Analyzing the environment: identifying opportunities and fighting threats b) Segmenting,

targeting and positioning

c) Designing the marketing-mix

d) Designing the marketing strategy

e) Governmental and Non-profit Organization and Social Marketing

MODELS OF CONSUMERS

MODELS OF CONSUMER BEHAVIOR

5.1 Models of Consumers

5.2 Models of Consumer Behavior: General Models

5.3 Models of Consumer Behavior: Basic Models

5.4 Models of Consumer Behavior: Specific

Models

Introduction:

Consumers are different. Although the decision making process is the same, they have varying

perspectives and this impacts the final decision. Consumer behavior models help a marketer in

identifying and understanding a wide range of variables that could explain consumer behavior. In this

way these models help a marketer understand and predict buyer behavior, and they help the marketer

formulate better marketing programs and strategies. Researchers have attempted to study the dynamics of


CONSUMER BEHAVIOR

consumer decision making consumer behavior from varying orientations, and various models have been

proposed. These models have evolved from the economic paradigm of the 1940s, to the irrational,

impulsive, emotional and vulnerable social consumer of the 1950s and 1960s, to the information

processor of the 1960’s and 70s, to the cognitive and rational consumer post 1980’s. The purchase

paradigms have also evolved; there is the cognitive paradigm, where purchase is regarded as an outcome

of problem solving; the reinforcement paradigm, where purchase is regarded as a learned behaviour; and

the habit paradigm, where it is regarded as a pre-established routine pattern of behaviour

MODELS OF CONSUMERS:

Consumers approach the marketplaces differently; they go though the buying decision process differently

as it gets impacted by internal and external forces. Researchers have attempted to understand the

dynamics of consumer decision making and they have classified four varying views and perspectives, the

underlying forces operating within consumers that could be employed to approach the marketplace.

These are i) Economic ii) Cognitive iii) Passive iv) Emotional.

i) Economic view: According to the economic perspective of studying consumers, the consumer is

regarded as being rational. The model assumes that there exists in the market a state of perfect

competition; the consumer is aware of the various alternatives; he has the knowledge and ability to rank

all of these; and he finally takes a rational decision. He takes a decision and makes a choice as after

taking into account the cost and benefit, and the overall value in economic terms.

ii) Cognitive view: The consumer is regarded as being a problem solver, who searches for products to

fulfill his needs/wants. Consumer decisions are based on information gathering and processing. The

consumer is believed to take decisions after a lot of thought and deliberation, so as to get maximum

benefit and value.

iii) Passive view: Here, the consumer is regarded as irrational and impulsive, who easily succumbs to

the selling and promotional efforts of the marketer. It is assumed that the consumers are submissive to the

self-serving interests of the marketer and the salespersons are powerful.

iv) Emotional view: The consumer is regarded as being emotional and impulsive. who takes decisions

based on moods and emotions. Marketers must put in efforts and create positive mood and emotions.

MODELS OF CONSUMER BEHAVIOR: General Models:


CONSUMER BEHAVIOR

The consumer models refer to varying orientations and perspectives with which consumers approach the

marketplace and how/why they behave as they do. They refer to how the varying orientations impact the

buying decision process and overall buyer behavior. Various models have been proposed by researchers;

these models can be classified as (a) General models (b) Specific models. This session deals with the

General Models. The Specific Models are dealt with in the next session.

GENERAL MODELS: There are four models that fall under this category, viz. Economic model,

Psychological model, Psychoanalytic model and Sociological model

i) The Economic model: The economic model explains buying behavior from an economic

perspective; The assumption is that resources are scarce viz. a viz unlimited needs; a consumer seeks

value: he wants maximum benefit at minimum cost. The economic models showed concern as to how

scarce resources were allotted to satisfy the unlimited needs and wants. Economic models can be further

classified into Micro economic models and Macroeconomic models.

Micro economic models:

The micro economic models focus on the act of purchasing; they focus on what an average consumer

would purchase and in what quantity; they also ignore why and how the needs/wants get prioritized, and

how the behavior is underpinned.

According to the micro economic view, consumers are rational in nature and value utility. With resources

being scarce, they would allocate money on their purchases in a way that satisfies them maximally. The

consumer decisions are thus based on benefit to cost ratio; the consumer would settle on an alternative

that provides the highest ratio in terms of marginal utility.

The limitations of studying consumer behavior with this orientation is that consumers are not always

rational, and they seek average /adequate satisfaction and not total satisfaction. Also, consumers assess

the benefit to cost ratio differently; they define the two variables “cost” and “ benefit” variedly; the issue

is subjective. The view is also silent about other forces that operate during the buying process.

Macro economic models:


CONSUMER BEHAVIOR

The macro economic models focus on the overall trend in the economy that has an impact and is also

impacted upon by buying patterns. They focus on the aggregate flows in the economy. Conclusion about

consumer behavior are made after analyzing such flows. This approach could also be studied with two

orientations:

a) Relative income hypothesis: A persons’ expenses is influenced by his social surrounding and group.

With his income being constant, the relative expenses and the resultant savings will not change, until and

unless, there is a big change in the total income. The hypothesis holds that what and how much a

consumer spends is not solely dependent on income, but is influenced by peers.

b) Permanent income hypothesis: Even if the total income increases, people initially exhibit inertia

towards spending as they want to accumulate wealth; so purchasing pattern does not change immediately.

The limitations of studying consumer behavior with this orientation is that the view is silent about other

forces that operate during the buying process

ii) The Psychological model: The psychological model, also called the Learning Model or the

Pavlovian Learning Model, was proposed by classical psychologists led by Pavlov. According to this

model, consumption behavior and decision making is a function of interactions between human needs

and drives, stimuli and cues, responses and reinforcements.

People have needs and wants; They are driven towards products and services (stimuli and cues), which

they purchase (response), and they expect a satisfying experience (rewards and reinforcements); Repeat

behavior would depend on reinforcement received.

The model believes that behavior is deeply affected by the learning experiences of the buyers; and

learning is a product of information search, information processing, reasoning and perception.

Reinforcement leads to a habit formation and the decision process for an individual becomes routinized,

leading to brand loyalty. Consumers also learn through trial and error and resultant experiences that get

stored in our memory.

The limitations of studying consumer behavior with this approach is that the model seems incomplete.

Learning is not the only determinant in the buying process and the decision making. The model totally


CONSUMER BEHAVIOR

ignores the role played by (a) other individual determinants like perception, personality (the sub-

conscious), attitudes; as well as (b) interpersonal and group influences.

iii) Psychoanalytic model: The psychoanalytic model was proposed by Sigmund Freud. The model

tries to explain consumer behavior as a resultant of forces that operate at subconscious level. The

individual consumer has a set of deep seated motives which drive him towards certain buying decisions

According to the model, buyers needs and desires operate at several levels of consciousness. Not all of

the behavior is understandable and explainable by the person. Also not all of human behavior is overtly

visible and explainable. Sometimes, the behavior may not be realized and understood by the person

himself. Such causes can be understood by drawing inferences from observation and casual probing.

There have been two more contributions that have been made to the psychoanalytic approach, these are a)

Gestalt model b) Cognitive theory

Gestalt model: The model based on Gestalt principles (meaning “patterns and configuration”) lays

emphasis on the perceptual processes that impact buying behavior. According to this model, consumption

behavior and decision making is based on how a consumer perceives a stimuli ( the product and the

service offering and the 4 Ps) viz a viz. the external environment and his own prior experiences.

Cognitive theory: The model proposed by Leon Festinger, views the consumer as one who faces a

feeling of anxiety (dissonance), while he is making a purchase; this is because he is faced with many

alternatives, all of which seem desirable. Post-purchase, this dissonance increases even further. There is

an imbalance in the cognitive structure; and the consumer tries to get out of this state as soon as he can.

So a buyer gathers information that supports his choice and avoids information that goes against it.

iv) Sociological model: The model is based on findings of Thorstien Veblen, and focuses on the role

played by social groups and social forces. A person’s consumption pattern and buying behavior is

affected by social factors; his family, friends, peers, social groups, reference group and culture have a

major role to play. According to the model, man is perceived as a “social animal”, and thus he conforms

to norms of its culture, sub culture and groups amongst which he operates. Emulative factors and social

influences have a big role to play in consumer decision making.


CONSUMER BEHAVIOR

MARKETING IMPLICATIONS OF MODELS

MODEL IMPLICATION

Economic model:

a) Micro economic

b) Macro economic

-Consumers’ are price sensitive; they look out for a value proposition and thus buy

those offerings that give them more benefit vis a vis cost.

-As a marketer, this implies that he should offer to customers a Value proposition.

-Deals and sales promotion can also impact buying decisions to his favor.

Con consumer purchases are affected by fluctuations in the economy.

Consumers learn from experiences of self and others. would buy products and

Services that are rewarding and would bring positive reinforcement.

Psychological model -Marketers should arrange for product demonstrations. should also encourage trials:

free samples, testing and sales promotion can help elicit trials.

Consumer finds the product usage satisfying; he would go for a repeat purchase.

Psychoanalytic model:

a) Gestalt

b) Cognitive

-While consumers may look for functional benefits while buying a product, they

are also affected by hedonic elements. The marketer also needs to understand the

consumer psyche and design the 4Ps accordingly; this has implications on pricing

and promotion.

This has implications for brand management; branding, brand associations and

Imagery.

-This is related to post-purchase behavior; the marketer needs to help minimize the

Consumer’s post-purchase dissonance.


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Sociological model - A persons’ purchase behavior is affected by his culture, sub culture and

social group;

- Opinion leadership and social group appeals.

MODELS OF CONSUMER BEHAVIOR: Basic Models:

i) Model of Consumer Buying:

The consumer market is defined as end user markets. Also called Business to Consumer markets, or B2C

markets, the product and service offering is bought by the consumer for his personal use. The decision

making process in consumer markets is different from the one that takes place in business or industrial

markets.

According to Kotler and Armstrong, the basic model of consumer decision making process comprises

three major components, viz., marketing and other stimuli (these act as influences), the buyer’s black box

(these are related to the consumer) and the buyer responses (this is the response part). The

components/processes as well as the working dynamics are explained as follows:

1. Marketing and other stimuli: A consumer is confronted with a stimulus in the environment. This

stimulus could be of two kinds;

a) One that is presented by the marketer through the marketing mix or the 4Ps, product, price, place and

promotion;

-product: attributes, features, appearance, packaging etc.

-price: cost, value, esteem (prestige)

-place: location and convenience, accessibility

-promotion: advertising, sales promotion, personal selling, publicity, direct marketing.

b) The other that is presented by the environment, and could be economic, technological, political and

cultural.

2. Buyer’s black box: The stimuli that is presented to the consumer by the marketer and the environment

is then dealt with by the buyer’s black box. The buyer’s black box, comprises two sub components, viz.,


CONSUMER BEHAVIOR

the buyer’s characteristics and the buyer decision process. The buyers characteristics could be personal,

psychological, cultural and social.

a) Personal:

-age and life-cycle stage (family life cycle: single, newly married couples, full nest I, full nest II, full

nest III, empty nest I, empty nest II, solitary survivor

-occupation (occupation affects consumption patterns)

-economic situation

-lifestyle (pattern of living as Activities, Interest, Opinions, AIOs)

-personality (personality is defined in terms of traits; these are psychological characteristics which lead

to relatively consistent patterns of behavior towards the environment) and self-concept (self-concept is

reflective of identity; how a person perceives himself including attitudes, perceptions, beliefs etc).

Products and brands also have a personality; consumers are likely to choose such brands whose

personalities match their own self.

b) Psychological:

-motivation (motives; urge to act to fulfil a goal or satisfy a need/want)

-perception (ability to sense the environment and give meaning to it through the mechanisms of

selection, organization and interpretation).

-learning (a relatively permanent change in behavior as a result of ones’ experience; relates to memory;

learning could be experiential based on direct experience or conceptual based on indirect experience;

consumer learning could be based on marketing communication/seller provided information, personal

word of mouth and/or experiential).


CONSUMER BEHAVIOR

-beliefs (thoughts that a person holds about something; these are subjective perceptions about how a

person feels towards an object/person/situation) and attitudes (a favorable or unfavorable

disposition/feeling towards an object, person or a situation).

c) Cultural:

-culture (a sum total of values, knowledge, beliefs, myths, language, customs, rituals and traditions that

govern a society). Culture exerts the broadest and the deepest influence; eg. Influences on our eating

patterns, clothing, day to day living etc. Cultural influences are handed down from one generation to the

next and are learned and acquired).

-sub-culture (subset of culture: smaller groups of people within culture with shared value systems within

the group but different from other groups; identifiable through demographics).

-social class: ordered and relatively permanent divisions/stratifications in the society into upper, middle

lower classes; members in a class share similar values, interests, lifestyles and behaviors; the division is

based on combination of occupation, income, education, wealth, and other variables.

d) Social:

-family: most important influence; (there occurs in a family what is referred to as socialization; family of

orientation: parents and siblings; family of procreation: spouse and children; further some decisions are

husband dominated, some are wife dominated and some are joint; roles played by family members),

family life cycle (stages through which a family evolves; People’s consumption priorities change and

they buy different goods and services over a lifetime).

-friends and peers, colleagues.

-groups: reference groups {these are people to whom an individual looks as a basis for personal

standards; they are formal and informal groups that influence buying behavior; reference groups could be

direct (membership groups) or indirect (aspirational groups); reference groups serve as information

sources, influence perceptions, affect an individual’s aspiration levels; they could stimulate or constrain a

person’s behavior}.

- opinion leaders (they influence the opinion of others based on skills, expertise, status or personality).

-roles and status: the role refers to the expected activities and status is the esteem given to role by society.


CONSUMER BEHAVIOR

Research and studies into these factors can provide a marketer with knowledge that can help him serve

the consumers more effectively. These characteristics affect the buying decision process, which

comprises five steps:

a) Problem recognition: This is the first stage where a person recognizes that there is a problem or a

need to fulfill. This may either be an actual state (AS Type), where a problem has arisen and needs to be

sorted out; the product is failing, or the consumer is running short of it, and thus needs a replacement. A

problem could also be a desired state (DS Type), where there is an imbalance between the actual state

and the desired state; another product seems better and superior to the one that is being currently used,

and so the consumer wants to buy it.

A need could be triggered off by an internal stimulus or an external stimulus. Marketers need to identify

what could trigger a particular need.

b) Information search: After a need is recognized, the consumer goes for an information search, so as to

be able to make the right purchase decision. He gathers information about the product category and the

variations, various alternatives and the various brands. Such a search could be ongoing, specific or

incidental. The consumer could recalls information that is stored in his memory (comprising information

gathered and stored, as well as his experiences, direct and indirect). He could also seek information from

the external environment. The sources of information search could be personal (family, friends, peers

and colleagues), commercial (marketers’ communication in the form of advertising, salespersons,

publicity etc), public (mass media, consumer forums, government rating agencies) and experiential (self

and others’ experiences). Personal contacts are highly influential sources, public sources are highly

credible.

c) Evaluation of alternatives: Once the consumer has gathered information and identified the

alternatives, he compares the different alternatives available on certain features. These are those features

that a consumer considers in choosing among alternatives; these could be functional/utilitarian in nature

(benefits, attributes, features), or subjective/emotional/hedonic (emotions, prestige etc.).The consumer

also uses decision rules that help a consumer simplify the decision process. At the end of the evaluation,

purchase intentions are formed.


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d) Purchase decision: After the consumer has evaluated the various alternatives, he selects a particular

brand. Consumer purchases may be trials/first purchases or repeat purchases. The consumer may further

have to make decisions on where to buy from, how much to buy, whom to buy from, when to buy and

how to pay. It is noteworthy that a purchase intention (desire to buy the most preferred brand) may not

always result in a purchase decision in favor of the brand; it could get moderated by attitudes of others

and unexpected situational factors

e) Post purchase behavior: After the purchase, the consumer uses the product and re evaluates the

chosen alternative in light of its performance viz. a viz. the expectations. He could be experience feelings

of neutrality (Performance meets expectations), satisfaction (Performance exceeds expectations) or

dissatisfaction (Performance falls short of expectations). This phase is significant as it (i) acts as an

experience and gets stored in the memory; (ii) affects future purchase decisions; (iii) acts as a feedback.

3. Buyer responses: While in the black box, the buyer also takes a decision with respect to the product,

brand, dealer, timing and amount.

II) MODEL OF INDUSTRIAL BUYING:

The business/industrial market is defined as a market that buys, transforms/processes and sells further,

either for further transformation/processing or, for consumer use. The business market consists of all the

organizations, that buy goods and services for further use in the production and supply of other goods and

services that are sold to others. Also called Business to Business markets, or B2B markets, the product

and service offering is bought by one business organization and further processed/transformed/assembled

consumer for further sale either to another business consumer or a personal consumer. The business

markets are very different from consumer markets; they are huge in terms of size and investment; contain

fewer but larger and bulkier buyers; they are geographically concentrated; it’s a derived demand and

there is more inelasticity; demand also fluctuates very rapidly. The buying situation that an industrial

buyer faces could range between a straight rebuy, a modified-rebuy and a new-task. These situations are

based on the complexity of the problem being solved, the newness of the product requirement, the risk

involved, the number of people involved in the buying process, the time available in hand.


CONSUMER BEHAVIOR

With business markets being different than industrial markets, the decision making process in

business/industrial markets is also different from the one that takes place in consumer markets. The

buying decision is taken in a very formal and professional manner by a group of people who are referred

to as the buying center. It is highly formalized, bureauctartic and very complex. The buyers and sellers

work very closely and try to build long term alliances and partnerships

According to Kotler and Armstrong, the basic model of business consumer decision making process

comprises three major components, viz., the environment (these act as influences), the buying

organization (these are related to the buying center, the decision process and the influences) and the

buyer responses (this is the response part). The components/processes as well as the working dynamics

are explained as follows:

1. The Environment: The environment surrounding the business organization comprises the

marketing stimuli in terms of the marketing mix or the 4Ps, product, price, place and promotion; It also

comprises the other stimuli in terms of economic, technological, political, cultural and competitive

environment. They environment acts as a stimulus to act; it provides strengths and opportunities and also

helps identify weaknesses and threats.

2. 2. The Buying Organization: The buying organization comprises the buying center which goes

through the entire buying process. The buying center is the decision making unit of the buying

organization; it is a formally defined unit and comprises people from various departments and functional

areas; the various members of the unit, vary in personal background, interest and preferences as also their

buying motives, habits and orientations. Membership, power balance and dynamics vary for different

products and buying situations. In case of a new-task, when the product/service is being purchased for the


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first time, the engineering and the RandD personnel have a major role to play and act powerful; In cases

of the straight-rebuy (routine purchases; repeat orders) and modified-rebuy situations (where product

specifications are modified), purchase department acts powerful.

There are various factors that influence the buying decision in industrial buying behavior, viz,

environmental, organizational, interpersonal and individual.

a) Environmental:

- Economic: Various stages in the business cycle (inflation, depression, recession etc) and their resultant

impact on money flows in the economy, level of demand , government orientation towards economy and

monetary policies (interest rates etc).

- Technological: Rate of technological change; Technology transfer and adoption; Technology versus

environment; Kind of technology adopted.

- Competitive: Amount of competition (number of competitors); Nature of competition; Dynamics of

competition.

- Political: Political stability/instability; Governmental philosophy and orientation towards investment,

growth and development.

- Natural environment: Availability of natural resources; Impact of industry on the environment;

Environmental depletion; Environmental pollution; Waste and disposal etc.


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b) Organizational:

- Philosophy and orientation of the founder, directors and executives.

- Company vision, mission and strategy.

- Objectives of the company.

- Policies and procedures for purchase (Centralized versus decentralized; Quality versus price; Short term

versus long term contracts; Intranet and extranet; Supply chain management; Partnership management).

- Structures, systems for purchase: Buying center constituents, power dynamics and balances.

c) Interpersonal and Individual:

The buying center comprises people from various departments and functional areas. Every constituent is

an individual in himself. He is different from others in terms of demographic and psychographic

backgrounds in terms of age, income, personality, risk attitude, culture etc. The buying centre is diverse

in terms of varying interests and orientations towards buying, as well as varying interests, authority,

status, empathy, and persuasiveness.

The decision making process in industrial buying is much more elaborate and complex than consumer

buying. Robinson and Associates have identified eight stages and called each of the stages as buyphases.

a) Problem recognition: The buying process begins when someone in the organization identifies a

need. A need could be triggered off by an internal stimulus or an external stimulus.

b) General need description: The product/service requirement is laid out in very broad terms.

c) Product specification: Then the concerned department/person specifies the product’s characteristics

and requirements.

d) Supplier search: Business organizations generate for themselves a list of vendors. This list is drawn

up from trade directories, websites, trade shows etc. In case of a straight rebuy or a modified rebuy, the

buyer can refer to such a database. In cases of a new-task, he would have to search for new vendors.

e) Proposal solicitation: Thereafter, the buyer would invite suppliers to submit their trade proposals;

such an invitation could be placed in the newspapers, trade journals and company websites. The vendors

are asked to submit details related to the product specifications, features, price, delivery time and period

etc

f) Supplier selection: After the proposals have been submitted by the vendors, the buyer would go in for

an evaluation of the suppliers. The buying center would establish the evaluative criteria, i.e. the basis on

which the vendors would be evaluated. These criteria would vary across products/services, buying


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situations etc. In cases of government organization, the prime consideration while evaluating suppliers is

the price.

The buying center needs to take decisions on:

- how many suppliers to use.

- whether quality is a major determinant or price is a major determinant.

- total evaluation of the supplier, including his reputation.

g) Order-routine specification: Once the busying center has taken a decision on the selection of the

vendor, the formal requisition is made in terms of listing the technical specifications, quantity required,

delivery terms, negotiated price, payment terms, damages, return policies etc.

h) Performance review: The buyer reviews the performance of the chosen supplier(s) on a regular basis.

This evaluation helps the buyer later in cases of straight rebuy and modified rebuy. On the basis of an

evaluation, the relationship/contract with the supplier is continued or terminated.

3. Buyer responses: While in the black box, the buyer also takes a decision with respect to the

product/service choice, supplier choice, order quantity, delivery terms and times, service terms and

payment

MODELS OF CONSUMER BEHAVIOR: SPECIFIC MODELS I

The consumer models refer to varying orientations and perspectives with which consumers approach the

marketplace and how/why they behave as they do. They refer to how the varying orientations impact the

buying decision process and overall buyer behavior. Various models have been proposed by researchers;

these models can be classified as (a) General models (b) Specific models. The previous session dealt with

the General Models. This session deals with two Specific Models. The rest of the Specific Models are

dealt with in the next section.


CONSUMER BEHAVIOR

SPECIFIC MODELS: The models that have been explained in this session are Howard and Sheth’s

model and Nicosia’s model.

i) The Howard Sheth model (1969):

Howard and Sheth used the term buying behavior and not consumer behavior as the industrial buyers and

consumers are similar in most aspects. While the model was proposed in the 1960s, for industrial buying,

the term “buyer” is used to connote both industrial consumers and personal consumers. Through the

model, Howard and Sheth, tried to explain buyer rationality while making purchase decisions even in

conditions of incomplete information. While they differentiated between three levels of decision making,

EPS, LPS and RPS, the model focuses on repeat buying/purchase.

The model has four major components, viz., stimulus inputs (input variables), hypothetical constructs,

response outputs (output variables), and, exogenous variables.

a) Stimulus inputs (Input variables): The input variables refer to the stimuli in the environment; they

take the form of informative cues about the product/service offering; these information cues could relate

to quality, price, distinctiveness, service and availability.

The informational cues could be Significative, Symbolic, (both of which are commercial and can be

controlled by the marketer) and Social (non-commercial and uncontrollable by the marketer; family,

reference groups and social class). All these three types of stimuli provide inputs concerning the

product/brand to a consumer.

- Significative stimuli: The product/brand information that the marketer provides, comprises the

significative component; it deals essentially with the brand characteristics.

- Symbolic stimuli: this is the psychological form with which a buyer perceives the product and service

offering (brand); it is figurative (verbal and visual product characteristics) and perceptual and depends on

how the offering has been positioned; it emanates from advertising and promotion efforts.

-Social stimuli: this is the information about the product or service offering that comes from the social

environment viz. family, groups, society and culture at large.


CONSUMER BEHAVIOR

b) Hypothetical constructs: Howard and Sheth classified the hypothetical constructs into two major

groups, viz., perceptual constructs and learning constructs. These constitute the central part of the model

and deal with the psychological variables which operate when the consumer is undergoing the decision

making process.

- Perceptual constructs: The perceptual constructs deal with how a consumer obtains and processes

information received from the input variables. Once the buyer is exposed to any information, there is an

attention; this attention towards the stimuli depends on the buyers’ sensitivity to information in terms of

his urge and receptivity towards such information. Not all information would be processed and the intake

of information is subject to perceived uncertainty and lack of meaningfulness of information; this is

referred to as stimulus ambiguity. This reflects the degree to which the buyer regulates the stimulus

information flow. Stimulus ambiguity occurs when a consumer does not understand the message from

the environment; it could trigger off a need for a specific and active search for information and thus lead

to an overt search for information. The information that is gathered and processed may suffer from

perceptual bias if the consumer distorts the information received so as to fit his/her established

needs/beliefs/values/experiences etc.

- Learning constructs: The learning constructs relate to buyer learning, formation of attitudes and

opinions, and the final decision. The learning constructs are seven in number, and range from a buyer’s

motive for a purchase to the final satisfaction from a purchase; the interplay of these constructs ultimately

leads to a response output or a purchase. The motives refer to the goals that a buyer seeks to achieve

through a purchase and the corresponding urge towards action or the purchase activity. The brand

comprehension is the knowledge and information that the buyer has about the various brands in his

evoked set. The buyer forms an order of preference for the various brands; this order of preference is

based on the choice criteria (decision mediators). The decision mediators are the evaluative criteria and

the application of decisions rules by the buyer to the various purchase alternatives.

Based on the choice criteria, the attitudes are formed for the varying brands. The attitudes reflect the

predisposition of the buyer; preference toward alternative brands; and, feelings of like/dislike towards the

offerings. The brand potential of the evoked set determines the buyer's perception and confidence level of

the brands that he is considering to purchase. The purchase intention is a cumulative outcome of the


CONSUMER BEHAVIOR

interaction of buyer motives, choice criteria, brand comprehension, resultant brand attitude and the

confidence associated with the purchase. Satisfaction, another learning construct, involves the post

purchase evaluation (whether expectation from an offering matches the performance) and resultant

impact (positive/negative) on brand comprehension.

c) Response outputs (output variables): The output variables refer to the buyer’s action or response

to stimulus inputs. According to Howard and Sheth, the response outputs comprise five constituents, viz.,

attention, comprehension, attitude, intention and purchase. These could be arranged in a hierarchy,

starting from attention and ending up with purchase.

- Attention refers to the degree or level of information that a buyer accepts when exposed to a stimulus.

It reflects the magnitude of the buyer's information intake.

- Comprehension is the amount of information that he actually processes and stores; here, it refers to

brand comprehension which is buyers’ knowledge about the product/service category and brand.

- The attitude is the composite of cognition, affect and behavior towards the offering; the attitude

reflects his evaluation of the brand and the like/dislike based on the brand potential.

- Intention refers to the buyer’s intention to buy or not to buy a particular offering.

- Purchase behavior refers to the actual act of buying. The purchase behavior is a cumulative result of

the other four constituents.

d) Exogenous variables: The Howard and Sheth model also comprises certain constant exogenous

variables that influence some or all of the constructs explained above, and thereby impact the final output

variables. These are explained as Inhibitors or environmental forces that restrain the purchase of a

favored brand; eg., importance of the purchase, price, financial status of the buyer, time at the disposal of

the buyer, personality traits, social pressures etc.

Working relationships between Constructs and the Model:

Through their model, Howard and Sheth explain the buying decision process that a buyer undergoes, and

the factors that affect his choice decision towards a brand. The process starts when the buyer is exposed

to a stimulus. As a result of the exposure, stimulus ambiguity occurs, which leads to an overt search for

information. The information that is received is contingent upon the interplay between the attitudes and


CONSUMER BEHAVIOR

the motives. In other words, the search for information and the conclusions drawn would be filtered by

perceptual bias (that would be a result of attitude, confidence, search and motives). It may alter the

existing patterns of motives and choice criteria, thereby leading to a change in the attitude towards the

brand, brand comprehension, motives, purchase intention and/or action. The final purchase decision is

based on the interaction between brand comprehension, strength of attitudes towards the brand,

confidence in the purchase decision and purchase intention. The actual purchase is influenced by the

buyer's intentions and inhibitors, which he confronts. The entire process is impacted by various

exogenous variables like the importance of purchase, price, time available to make the purchase, social

and cultural influences etc. After the purchase, the buyer experiences satisfaction if the performance

matches and exceeds expectation; this satisfaction would strengthen brand comprehension, reinforce the

confidence associated with the buying situations, and strengthen the intention to repeat purchase of the

brand. With a satisfying purchase decision, the buyer learns about buying in similar situations and the

behavior tends to get routinized. The purchase feedback thus influences the consumers’ attitudes and

intention.

Through their model, Howard and Sheth explain the buying decision process that a buyer undergoes, and

the factors that affect his choice decision towards a brand. The process starts when the buyer is exposed

to a stimulus. As a result of the exposure, stimulus ambiguity occurs, which leads to an overt search for

information. The information that is received is contingent upon the interplay between the attitudes and

the motives. In other words, the search for information and the conclusions drawn would be filtered by

perceptual bias (that would be a result of attitude, confidence, search and motives). It may alter the

existing patterns of motives and choice criteria, thereby leading to a change in the attitude towards the

brand, brand comprehension, motives, purchase intention and/or action. The final purchase decision is

based on the interaction between brand comprehension, strength of attitudes towards the brand,

confidence in the purchase decision and purchase intention.

The actual purchase is influenced by the buyer's intentions and inhibitors, which he confronts. The entire

process is impacted by various exogenous variables like the importance of purchase, price, time available

to make the purchase, social and cultural influences etc. After the purchase, the buyer experiences

satisfaction if the performance matches and exceeds expectation; this satisfaction would strengthen brand

comprehension, reinforce the confidence associated with the buying situations, and strengthen the


CONSUMER BEHAVIOR

intention to repeat purchase of the brand. With a satisfying purchase decision, the buyer learns about

buying in similar situations and the behavior tends to get routinized. The purchase feedback thus

influences the consumers’ attitudes and intention.

An Assessment of the Model

The model is an integrative model that incorporates many of the aspects of consumer behavior; it links

together the various constructs/variables which may influence the decision making process and explains

their relationship that leads to a purchase decision. It highlights the importance of inputs to the consumer

buying process. It was one of the first models to divulge as to what constitutes loyalty towards a specific

product. It helped gain insights in to the processes as to how consumers’ process information. The model

is user friendly and is one of the few models which has been used most commonly and tested in depth.

However, the limitation lies in the fact that the various constructs cannot be realistically tested; some of

the constructs are inadequately defined, and thus do not lend to reliable measurements.


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ii) Nicosia’s model of Consumer Decision Process (1966):

The model proposed by Francesco Nicosia in the 1970s, was one of the first models of consumer behavior

to explain the complex decision process that consumers engage in during purchase of new products. Instead

of following a traditional approach where the focus lay on the act of purchase, Nicosia tried to explain the

dynamics involved in decision making. Presenting his model as a flow-chart, he illustrated the decision


CONSUMER BEHAVIOR

making steps that the consumers adopt before buying goods or services; decision aiming was presented as a

series of decisions, which follow one another. The various components of the model are seen as interacting

with each other, with none being essentially dependent or independent; they are all connected through direct

loops as well as feedback loops. Thus, the model describes a flow of influences where each component acts

as an input to the next. The consumer decision process focuses on the relationship between the marketing

organization and its consumers; the marketing organization through its marketing program affects its

customers; the customers through their response to the marketer’s action, affects the subsequent decisions of

the marketer; the cycle continues.

The various components that are further distinguished into main fields and subfields of the model are

marketer's communication affecting consumer’s attitude, consumer's search and evaluation, purchase action,

consumption experience and feedback. The first field ranges from the marketer (source of message) to the

consumer (attitude); the second from the search for to the evaluation of means/end(s) relation(s) which

forms the preaction field; the third field relates to the act of purchase; and the fourth to feedback. The output

from one field acts as the input for the next. These are explained as follows:

1. Marketer's communication affecting consumers’ attitude: This comprises Field 1 (i.e. “from

the source of a message to the consumers’ attitude”). The consumer is exposed to the firm’s attributes

through the marketing communication; this marketing communication could take place impersonally via

mass media (TV, newspaper, websites, etc) as well as personally. The information could relate to the firm

attributes as well as the product, price and distribution. This message relating to the firm’s attributes affects

the consumers’ perception, predisposition and attitude toward the firm and its offering. Of course, the

impact on perception and attitude is also dependent upon the consumer’s personal characteristics, values,

experiences, culture, social influences etc. Thus, the marketer’s communication affects the consumers’

attitude.

2. 2. Consumer's search and evaluation: After an attitude is formed, the consumer moves to Field 2

of the model, i.e. the consumer’s search for and evaluation of means/end(s) relation(s) which forms the

preaction field. The consumer searches for information about the product category and the varying

alternatives, and thereafter evaluates the various brands on criteria like attributes, benefits, features etc.

These criteria could be based on his learning and past experiences as well as the marketer's inputs. This step

creates a motive in the mind of the consumer to purchase the product.


CONSUMER BEHAVIOR

3. Purchase action: The motivated state leads to Field 3 of the model, i.e. the decision making on the part

of the consumer and the act of purchase. The consumer finally gets into action and buys the product from a

chosen retailer.

4. Consumption experience and feedback: The purchase action leads a consumer to Field 4 of the model

which is consumption experience and feedback. After purchasing the product, and the resultant

consumption, the consumer may have two kinds of experiences. A positive experience in terms of customer

satisfaction may reinforce his predisposition with the product/brand and make him loyal towards it. A

negative experience on the other hand, implying consumer dissatisfaction would affect his attitude

negatively, lower down evaluations about the product/brand and even block his future purchases. This Filed

provides feedback to the marketer, who can modify its mix accordingly.

In the first field, the marketer communicates with the customer and promotes an unfamiliar product to him;

depending upon the existing predispositions and his evaluation, the consumer develops an attitude. In the

second field, the consumer searches for information and evaluates it based on his attitudes; thereafter, he

develops a motivation to act. In the third field, he makes and purchase and in the fourth field, he would

provide feedback and also memorize his experience and learning for future use. Thus, the firm

communicates with consumers through its marketing messages and the consumers react through an act of

purchase. Both the firm and the consumer influence each other.

An Assessment of the Model Nicosia’s model is an integrative model that tries to integrate the body of

knowledge that existed at the time of its formulation in the area of consumer behavior. It was a pioneering

attempt to focus on the conscious decision-making behavior of consumers, where the act of purchase was

only one stage in the entire ongoing decision process of consumers. The flowcharting approach proposed by

Nicosia, simplifies and systemizes the variables that affect consumer decision making. It contributes to the

step by step "funnel approach" which views consumers’ movement from general product knowledge toward

specific brand knowledge and from a passive position to an active state which is motivated toward a

particular brand.

However, the model suffers from limitations in the sense that the model proposes assumptions, boundaries

and constraints that need not be realistic. It has been argued that attitude, motivation and experience may not

occur in the same sequence. Variables in the model have not been clearly defined. Factors internal to the


CONSUMER BEHAVIOR

consumer have not been defined and dealt with completely. The mathematical testing of the model and its

validity are questionable.


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CONSUMER DECISION MODEL

The Consumer Decision Model (also known as the Engel-Blackwell-Miniard Model) was originally

developed in 1968 by Engel, Kollat, and Blackwell and has gone through numerous revisions; the latest

publication of the model is depicted in Figure

It can be seen that many of the elements of the model are similar to those presented in the Theory of

Buyer Behaviour (Howard andSheth 1969), however the structure of presentation and relationship

between the variables differs somewhat. The model is structured around a seven point decision process:

need recognition followed by a search of information both internally and externally, the evaluation of

alternatives, purchase, post purchase reflection and finally, divestment. These decisions are influenced

by two main factors. Firstly stimuli is received and processed by the consumer in conjunction with

memories of previous experiences, and secondly, external variables in the form of either environmental

influences or individual differences. The environmental influences identified include: Culture; social

class; personal influence; family and situation. While the individual influences include: Consumer

resource; motivation and involvement; knowledge; attitudes; personality; values and lifestyle

(Blackwell,Miniard et al. 2001).


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Entry to the model is through need recognition when the consumer acknowledges a discrepancy

between their current state and some desirable alternative. This process is driven by an interaction

between processed stimuli inputs and environmental and individual variables. After a need has been

acknowledged the consumer embarks on a search for information, both internally through the

consumers’ memory bank of previous experiences, and externally. The authors argue that the model is

suitable for use in explaining situations involving both extended problem solving and limited problem

solving by modifying the degree to which various stages of the model are engaged in by the consumer

(Loudon andDella Bitta 1993). The depth of information search will be highly dependant on the nature

of problem solving, with new or complex consumption problems being subjected to extensive external

information searches, while simpler problems may rely wholly on a simplified internal search of

previous behaviour. Information is said to pass through five stages of processing before storage and


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use, namely: exposure, attention, comprehension, acceptance and retention (Blackwell,Miniard et

al. 2001).

The alternative consumer choices are evaluated by the establishment of beliefs, attitudes and purchase

intentions. This process of evaluation is influenced by both the environmental variables and the

individual variables. Intention is depicted as the direct antecedent to purchase which is the only

outcome tolerated by the model. Inhibitors are not explicitly depicted as mediating between intentions

and purchase, however the environmental and individual influences are again said to act on purchase.

Situation is listed as an environmental influence, and while this factor is not clearly defined, it could

include such factors as time pressure or financial limitations which could serve to inhibit the consumer

from realising their purchase intentions (VanTonder 2003).

Consumption is followed by post-consumption evaluation which serves a feedback function into future

external searches and belief formation. Divestment is depicted as the final stage in the consumption

process acknowledging that the product purchased is likely to be disposed of at some point post

consumption.

Engel, Blackwell and Kollat’s Model: Engel-Blackwell-Miniard Model of Consumer Behavior

The Engel, Kollat and Blackwell Model, also referred to as the EKB model was proposed to organize

and describe the growing body of knowledge/research concerning consumer behavior. A

comprehensive model, it shows the various components of consumer decision making and the

relationships/interactions among them. The model went through many revisions and modifications,

with attempts to elaborate upon the interrelationship between the various components and sub-

components; and, finally another model was proposed in the 1990s which came to be known as the

Engel, Blackwell and Miniard Model (EBM). The model consists of five parts, viz. information

input, information processing, decision process stage, decision process variables, and external

influences.

1. Information input: The information input includes all kinds of stimuli that a consumer is exposed

to and triggers a kind of behavior. The consumer is exposed to a large number of stimuli both

marketing (advertising, publicity, personal selling, demonstrations, store display, point of purchase

stimuli) as well as non-marketing sources (family, friends, peers); thus the various stimuli compete


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for consumer’s attention. These stimuli provide information to the consumer and trigger off the

decision making process.

2. Information processing: Stimuli received in the first stage provide information; the information is

processed into meaningful information. The stage comprises consumer’s exposure, attention,

perception/comprehension, acceptance, and retention of information. The consumer is exposed to

stimuli (and the accompanying information); attention determines which of the stimuli he will focus

upon; thereafter he would interpret and comprehend it, accepts it in his short term memory and

retains it by transferring the input to long-term memory.

3. Decision-process stage: At any time during the information processing, the consumer could enter

into this stage. The model focuses on the five basic decision-process stages, viz., problem

recognition, search, alternative evaluation, choice, and outcomes (post-purchase evaluation and

behavior).

There is problem recognition; this is followed by a search for information, which may be internal

based on memory. The search of information is also impacted by environmental influences.

Thereafter, the consumer evaluates the various alternatives; while evaluation, belief lead to the

formation of attitudes, which in turn affect the purchase intention. The next stage is the choice and

purchase, which gets impacted by individual differences. Finally there is an outcome, in the form of

satisfaction and dissatisfaction. This outcome acts as a feedback on the input and impacts the cycle

again. Environmental influences, individual differences and social influences, directly and indirectly

influence each of the stages of the decision process.

However, EKB proposed that it is not necessary for every consumer to go through all the five stages;

it would depend on whether the problem is an extensive or a routine problem-solving behavior.

4. Decision process variables: The model proposes individual influences that affect the various

stages of the decision making process. Individual characteristics include constructs like

demographics, motives, beliefs, attitude, personality, values, lifestyle, normative compliance, etc.


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5. External influences: The model also proposes certain environmental and situational influences

that affect the decision making process. The environmental influences include “Circles of Social

Influence,” like culture, sub-culture, social class, reference groups, family and other normative

influences; situational influences include consumer’s financial condition

The decision process comprises five stages from need recognition to outcome. The outcome in the

form of satisfaction/dissatisfaction acts as the input in then next cycle of a similar purchase. Each of

the components is directly or indirectly impacted by environmental influences, individual differences

and social influences.

The model incorporates many constructs that impact consumer decision making. It tries to explain

clearly the interrelationships between stages in the decision process and the various variables. They

attempted to relate belief-attitude-intention. An attempt was made to define the variables and specify

functional relationships between the various constructs. However, the model fails to adequately

explain as to how each of these influences consumer decision making. Critics argue that there are too

many variables; these have not been defined; the model is vague and complex; and the validity of the

model has been questionable. The model was revised in the 1990s and proposed again as the Engel,

Blackwell and Miniard (EBM) model

The EKB model went through a series of revisions and modifications and finally it was proposed as

the Engel, Blackwell and Miniard Model. The model consists of four sections viz., information

input; information processing; decision process and variables influencing the decision process. The

variables and the working relationship is similar to the EKB but has been slightly modified.

Information received from marketing and non-marketing stimuli feeds into the information-

processing section of the model. The information section of the model comprises various stages like

exposure, attention, comprehension, acceptance and retention. After passing through these stages, it

goes into the memory. Then this information that is stored in the memory acts as an initial influence

on the need recognition stage. If internal information is inadequate there is a search for external

information. The model focuses on the decision process stages: need recognition, search, pre-

purchase alternative evaluation, purchase, consumption, post-purchase alternative evaluation and

divestment. “Divestment” as a construct was additionally added as a modification over the EKB


CONSUMER BEHAVIOR

model. Divestment relates to options of disposal, recycling or remarketing. The entire process is

influenced by environmental influences and individual differences.

Critique of the Consumer Decision Model

One of the key strengths of the Consumer Decision Model is that it has continued to evolve since

original publication in 1968 (J.F. Engel,Kollat et al. 1968), evolutions that should have improved the

explanatory power of the model in light of advances in consumer behaviour theory and knowledge. One

such evolution is the inclusion of such factors as consumption and divestment, embracing

contemporary definitions of consumer behaviour which include such stages of consumption in their

scope (Peter andOlson 2008, Schiffman andKanuk 2007, Solomon,Bamossy et al. 2006).

The model provides a clear depiction of the process of consumption making it easy to comprehend and

intuitively pleasing (Foxall 1990). The mechanistic approach is, however, criticised to be too restrictive

to adequately accommodate the variety of consumer decision situations (Erasmus,Boshoff et al. 2001,

Loudon and Della Bitta 1993).

In parallel with the Theory of Buyer Behaviour, the influence of environmental and individual factors is

purportedly specific to certain process within the model. This is counter intuitive, and ignores other

impacts that such variables may have on the wider processes, for example, individual differences may

exert significant influence on the marketing stimuli a consumer is firstly exposed to and secondly, how

these stimuli are received and processed.

The environmental and individual variables have drawn criticism due to the vagueness of their

definition and role within the decision process (Loudon andDella Bitta 1993); for example the influence

of environmental variables is identified, but their role in affecting behaviour is not well developed.

Further, the role of individual motives for purchase is only alluded to within need recognition,

appearing to somewhat neglect a rich theoretical and important area of consideration (Bagozzi,Gurhan-

Canli et al. 2002, Loudon and Della Bitta 1993).


CONSUMER BEHAVIOR

PROFILE OF THE INDIAN CONSUMER

The recent years have witnessed rapid transformation and vigorous profits in Indian retail stores across

various categories. This can be contemplated as a result of the changing attitude of Indian consumers

and their overwhelming acceptance to modern retail formats. Asian markets witness a shift in trend

from traditional retailing to organized retailing driven by the liberalizations on Foreign Direct

Investments. For example, in China there was a drastic structural development after FDI was permitted

in retailing. India has entered a stage of positive economic development which requires liberalization

of the retail market to gain a significant enhancement.

The Indian consumption patterns are slowly converging with global norms. The Indian consumer is

now spending more on consumer durables, apparel, entertainment, vacations and lifestyle related

activities. Entertainment, clothing and restaurant dining are categories that have been witnessing a

maximum rise in consumer spending since 2002.

India is on the radar screen in the retail world and global retailers and at their wings seeking entry into

the Indian retail market. The market is growing at a steady rate of 11-12 percent and accounts for

around 10 percent of the country's GDP. The inherent attractiveness of this segment lures retail giants

and investments are likely to sky rocket with an estimate of Rs 20-25 billion in the next 2-3 years, and

over Rs 200 billion by end of 2010. Indian retail market is considered to be the second largest in the

world in terms of growth potential.

Challenges facing the Organized Retail Industry:

Despite the rosy hopes, some facts have to be considered to positively initiate the retail momentum

and ensure its sustained growth. The major constraint of the organized retail market in India is the

competition from the un-organized sector. Traditional retailing has been deep rooted in India for the

past few centuries and enjoys the benefits of low cost structure, mostly owner-operated, therein

resulting in less labor costs and little or no taxes to pay. Consumer familiarity with the traditional

formats for generations is the greatest advantage to the un-organized sector. On the contrary,

organized sector have big expenses like higher labor costs, social security to employees, bigger

premises, and taxes to meet.


CONSUMER BEHAVIOR

Availability and cost of retail space is one major area where Government intervention is necessary.

Liberalizing policy guidelines for FDI needs focus as well. Proper training facilities for meeting the

increasing requirements of workers in the sector would need the attention of both Government and

the industry. Competition for experienced personnel would lead to belligerence between retailers

and higher rates of attrition , especially during the phase of accelerate d growth of the retail

industry. The process of avoiding middlemen and providing increased income to farmers through

direct procurement by retail chains need the attention of policy makers. Taking care of supply chain

management, mass procurement arrangements and inventory management are areas that need the

focus of entrepreneurs.

India is now on the radar of global retailers. Accelerated development of retailing industry in t he

country and building brand value of domestic products is essential not only for marketing our

consumer products more efficiently , but also for the development of our own retailing industry.

According to KSA Technopak 300 million odd middle class - the Real consumers - is catching the

attention of the world with over 600 million effective consumers by 2010. India is bound to emerge

as one of the largest consumer markets of the world by 2010.

About one-third of households in India can afford white goods, such as washing machines,

refrigerators and air conditioners. However, consumers are price-conscious, and demand for many

white goods is restrained by long replacement cycles in urban areas.

As per India's Marketing White book (2006) by Business world, India has around 192 million

households. Of these only a little over six million are 'affluent' – that is, with household income in

excess of INR 215, 000. Another 75 million households are in the category of 'well off' immediately

below the affluent, earning between INR 45,000 and INR 215,000. This is a sizable proportion

which offers excellent opportunity for organized retailers to serve.

Consumer Profile: One of the key reasons for the increased consumption is the impressive growth

of the middle class. Around 70 per cent of the total households in India reside in the rural areas. The

total number of rural household is expected to rise from 135 million in 2001-02 to 153 million in

2009-10. This presents the largest potential market in the world. According to the study conducted

by NCEAR, the number of `lower middle income' group in rural areas is almost double as


CONSUMER BEHAVIOR

compared to the urban areas, having a large consuming class with 41% of the Indian middle class

and 58% of the total disposable income.

The Indian rural market has been growing at 3-4% per annum, adding more than 1 million new

consumers every year and now accounts for close to 50% of the volume consumption of fast-

moving consumer goods (FMCG) in India. The market size of the fast moving consumer goods

sector is projected to be more than double to US$ 23.25 billion by 2010 from the present US$ 11.16

billion. As a result, it is becoming an important market place for fast moving consumer goods as

well as consumer durables.

There were nearly 70 mn households (33% of the total) with an income of more than US$3,000 in

2006. These "well-off" households already own relatively expensive consumer durables, such as air

conditioners and refrigerators.

600 mn+ effective buyers by 2010

550 mn+ under the age of 20 by 2015

70 mn+ earn Rs. 8,00,000+ ($18,000) a year – number to rise to 140 mn by 2011

India's Income classes

1990-00 2005-06

RICH (annual income > US$ 4,700) * Own cars, PCs

3million

households

6milliion

households

CONSUMING (US$ 1000-4700) * Have bulk of banded consumer goods, 70% of 2-wheelers, refrigerators, washing machines

55million 75million

CLIMBERS (US$500-1000) * Have atleast one major durable (mixer, sewing machine/tv)

66million 78million

ASPIRANTS (US$350-500) * Have bicycles, radios and fans

32million 33million

DESTITUTES (Less than US$350) * Not buying

24million 17million


CONSUMER BEHAVIOR

Consumer Behavior: Availability of lifestyle spending options is increasing for Indian consumers and

that inducing higher spends on "status acquisition". Traditionally, Indian consumer is cautious about

debts. In recent past, this attitude has changed radically and in recent year's credit is no more a feared

entity.

Indian consumer buying behavior to a large extent has a western influence. Foreign brands have gained

wide consumer acceptance in India and they are much more open for experimentation. Beauty parlors

in cities, eateries, designer wear, watches, hi-tech products are a few instances which reflect these

changes.

Purchasing priorities in India also influence the level of sales of individual products. Penetration data

bear this out: televisions in use in 2006 were estimated at 95 per 1,000 populations, far higher than the

level for white goods. This reflects the growing demand for entertainment in India.

According to Ernst and Young report, 'The Great Indian Retail Story, 2006', the emergence of a larger

middle and upper middle classes and the substantial increase in their disposable income has changed

the nature of shopping in India from need based to lifestyle dictated. The self-employed segment has

replaced the employed salaried segment as the mainstream market, thus resulting in an increasing

consumption of productivity goods, especially mobile phones and 2 - 4 wheeler vehicles. There is also

an easier acceptance of luxury and an increased willingness to experiment with the mainstream fashion,

resulting in an increased willingness towards disposability and casting out from apparels to cars to

mobile phones to consumer durables.

Consumer Spending: The rate of growth of spending on discretionary items (unlike basic necessities

like food) has been growing at an average of 9 per cent per year over the past five years. A nation of

savers, India, has now altered into a nation of spenders.

KSA Technopak's Consumer Outlook 2004 report estimates that an average Indian spends 40% of his

monthly salary on food and grocery and 8% on personal care products.


CONSUMER BEHAVIOR

Indian consumer spending basket (2003):

Consumer durables – 53%

Books and Music – 32%

Movies and Theater – 38%

Vacation – 32%

Home Textiles – 29%

Mobile phones – 96%

Payment Household help – 48%

Computer / peripherals – 10%

Consumer Spend (Year 2006)

Total Consumer Spend : Rs. 20,00,000 cr ($ 445 bn)

Retail : Rs. 12,00,000 cr ($ 270 billion) double digit growth expected

Organized Retail: Rs. 55,000 cr ($ 12.4 bn) at current prices 40%+ annual growth expected

Scope for Organized Retail: Rs. 2, 00, 000 cr ($ 45 bn) by 2010. Av. Salary hike of 15+ per cent:

there will be lot more consumption.

Leading retailers' sales growth: 50-100% in 2005-06

Urban-Rural divide in Spending (%)

Category Rural Urban

Entertainment 33 67

Consumer Services 44 56

Durables 50 50

Misc. Consumer goods 57 43

Clothing and Footwear 61 39

Food 64 36


CONSUMER BEHAVIOR

The demanding assertive Indian consumer is now sowing the seeds for an exciting retail

transformation that has already started bringing in larger interest from International Brands / formats.

With the advent of these players, the race is on to please the Indian consumer and its time for the

Indian Consumer to sit back and enjoy the hospitality of being treated like a King.

India is gradually moving up as a Global emerging economical force and is already considered as an

international hub for information Technology, Automobiles, Malls both of Indian and foreign

companies and Textiles particularly synthetic.

No comprehensive study of the Indian consumer has been undertaken so far. We have to rely on the

fragmented studies that have been conducted by different agencies. When we attempt to draw a profile

of the Indian consumer, we tread on difficult territory. With due recognition of this limitation, we are

outlining a broad profile of the Indian consumer, including his buying motives and habits.

India being very vast geographically, consumers here are naturally scattered over a vast territory. As

the country is also marked by great diversity in climate, religion, language, literacy level, customs and

calendars, lifestyles and economies status, here consumers present a complex and bizarre group. The

heterogeneity holds many implications for a marketer, especially to those going in for national

marketing.

Broad profile of the Indian consumer

Demographics:

Size of population: According to the Census 2001 the population of India stood at 1,027 million, of

which 742 million lived in rural areas and 285 million in urban areas.

Literacy and education: According to the Census 2001, the nationâ€™s average literacy rate is 65.4

percent. There is a rise in growth of literacy rate since 1951 and it has increased substantially in the

last decade.


CONSUMER BEHAVIOR

From now onwards there will be a faster progress in checking illiteracy as the proportion of youngsters

enrolled in schools is going up and more and more neo-literates are also emerging from the adults, as a

result of the National Literacy Program. Over 21 percent of all adults in the country now read some

publication or the other. In urban areas, the percentage is over 56. The government has targeted to

achieve 80 percent literacy on a nationwide basis in the next 10 years.

A vast educated manpower: It is a paradox; on the one hand, India has the highest concentration of

illiterates in the world; and on the other, it has the second highest concentration of literates and third

largest pool of educated and technically trained manpower in the world. India has a strong pool of

engineers, scientists and technically educated persons. In modern fields like information technology,

India has been displaying its strength very clearly in recent years.

Diversity, the Hallmark:

Indian consumers are not a homogeneous lot. They are marked by great diversity. It is this diversity

that strikes us first when we look at Indian consumers that is diversity in religion, language, culture,

tradition, social customs, and dress and food habits.

Religious diversity:

The one billion people of India belong to seven different religious groupsâ€”Hindus, Muslims,

Christians, Sikhs, Buddhists, Jains and Zoroastrians. In addition, there are other persuasions and there

are sects, sub-sects, castes and sub-castes. Each religion has its own hierarchic structure, concretized

through centuries of practices. Each caste has its own customs established over generations. In birth

and death, in marriage and family life, the individual is entangled in the chores of his religion or caste.

What is welcome for one religion is taboo for the other; and something totally banned in one religion

is an accepted practice in another.

Linguistic diversity:

The same diversity is seen in the matter of language. Sixteen languages have been specified in the

Constitution of India as national languages. In addition, there are hundreds of dialects. In several

places, many amalgams of languages have been formed as a result of shifting populations. If a


CONSUMER BEHAVIOR

marketing man has to approach the entire national market of India, this linguistic diversity is a big

challenge.

Diversity in dress and food habits:

As far as dress is concerned, India holds out the picture of widely varying styles. Almost every state,

or religious community, has its own traditional styles of dress. The same is the case with ornaments

and Jewellery. As regard food, rice is the staple food in the South and wheat in the North. Of course,

in several of the southern states people now consume wheat products as co-food items. Likewise,

certain southern dishes have become popular in the north. Still the basic difference in food habits

remains. There are certain communities, which are strict vegetarians. For meat eaters, there are several

restrictions; for the Hindu, beef is taboo, for the Muslim, pork is taboo, for the Christian, both are

delicious. Some use coconut oil as the cooking medium, some use groundnut oil, and some others,

mustard or gingelly oil.

The conclusion if a marketer wants to market his products in India he has to consider all the above

diversified aspects before planning the marketing strategy. Accordingly the advertisements, sales

promotion activities, distribution channels and retailing plans must be drawn in order to successfully

sell the goods whether for B2B or consumer goods through malls and retailers.

When India opened its economy to the global marketplace in the early 1990s, many multinational

corporations rushed in to pursue its middle-class consumers—an estimated 200 million people—only

to confront low incomes, social and political conservatism, and resistance to change. It turned out that

the Indian consumer was a tough one to figure out and win over.

Things are changing. Although attitudes remain complex, they have shifted substantially toward

consumerism, particularly over the past decade. The country’s recent economic performance is a

factor, of course. For three years, GDP growth has been strong and sustained, at an average annual rate

of around 8%. The population’s demographic profile also plays a role: Indians constitute a fifth of the

world’s citizens below age 20. So a youthful, exuberant generation, weaned on success, is joining the

ranks of Indian consumers.


CONSUMER BEHAVIOR

To examine the changes in attitude, the Gallup Organization conducted two surveys of more than

2,000 respondents gauging the habits, hopes, plans, and evolution of the Indian consumer in the

decade from 1996 to 2006. (For a similar look by Gallup at Chinese attitudes, see William McEwen et

al., “Inside the Mind of the Chinese Consumer,” HBR March 2006.) In collaboration with our

colleagues Raksha Arora and Prasun Basu, we mined the data and emerged with three key insights.

Indians are getting more materialistic.

Indians are often stereotyped as deeply spiritual people who reject materialistic values. Our research

suggests that this stereotype no longer reflects reality. For instance, almost half of India’s urban

population had adopted a “work hard and get rich” ethos by 1996; another 9% had done so by 2006.

Indians are more motivated than ever by personal ambition and a desire for material success, and they

put in the hours it takes to achieve those goals. A recent Gallup poll of more than 30 countries showed

that, with an average workweek of 50 hours, India ranks among the hardest working nations globally.

(The average in the United States is 42 hours; major European nations such as Germany, France, and

the UK have workweeks of fewer than 40 hours.)

Consumerism is becoming a way of life in India.

An analysis of Indians’ savings goals underscores the increase in materialism. Although long-term

plans remain a high priority, life’s pleasures in the here and now have gained importance over the past

decade. Indians’ desire to set money aside for electronics and durables has grown so dramatically that

it has nearly caught up with their desire to save for their children’s education. Travel and

entertainment have also gained ground.


CONSUMER BEHAVIOR

Interestingly, this trend does not apply only to the young—it holds true for people aged

15 to 55. And it is not merely a large-city phenomenon; people in smaller towns espouse

these values as well.

Among durable goods, high-tech luxury items are increasingly in demand. The number of

Indians who own or use mobile phones, for example, has grown 1,600%—not surprising

in a country that is adding more than 3 million subscribers a month. The number of

people who own or use computers or laptops is up 100%, albeit from a very small base.

Ownership of music systems and televisions is also on the rise.

The Indian consumption patterns are slowly converging with global norms. The Indian

consumer is now spending more on consumer durables, apparel, entertainment, vacations

and lifestyle related activities. Entertainment, clothing and restaurant dining are

categories that have been witnessing a maximum rise in consumer spending since 2002.

Source: The Great Indian Retail Story 2006, Ernst and Young.

Source: KPMG/Research


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