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4D International Journal of Management and Science

ISSN No: 2250-0669

@4D Crossconnect.com, Inc, 2012

www.4dinternationaljournal.com

Vol. 8, Issue1, 2017

Effects of Consumer Buying Behaviour Durable Sellers

*Ajit Sharad Deshpande**Dr.Taruna Saxena

ABSTRACT

Manufacturers of consumer durables do tend to sell their consumer products with an eye

toward long term use by the buyer. At the same time, many of these manufacturers normally

provide documentation that defines what is considered reasonable use of the goods. This

serves to set the standard for how long a consumer can reasonably expect the items to

function, provided that the durables are not abused or utilized in an inappropriate manner.

Consumer durables involve any type of products purchased by consumers that are

manufactured for long-term use. As opposed to many goods that are intended for consumption

in the short term, consumer durables are intended to endure regular usage for several years or

longer before replacement of the consumer product is required.The same consumer behaves

differently for consumer durable and consumer durables.

Key words:lomg term use,consumption,consumer durables,replacement

*Research Scholar-Shri Venkateshwara University **Prof. & Director

INTRODUCTION

The consumer durables segment can be segregated into consumer electronics (TVs, LCD and

audio systems etc.) and consumer appliances (also known as white goods) like refrigerators,

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washing machines, air conditioners (A/Cs), microwave ovens, vacuum cleaners and dishwashers.

Over the years, demand for consumer durables has increased with rising income levels, double-

income families, changing lifestyles, availability of credit, increasing consumer awareness and

introduction of new models. Products like air conditioners are no longer perceived as luxury

products.

Most of the segments in this sector are characterized by intense competition, emergence of new

companies (especially MNCs), and introduction of state-of-the-art models, price discounts and

exchange schemes. MNCs continue to dominate the Indian consumer durable segment, which is

apparent from the fact that these companies command more than 65% market share in the color

television (CTV) segment. The biggest attraction for MNCs is the growing Indian middle class.

This market is characterized with low penetration levels. MNCs hold an edge over their Indian

counterparts in terms of superior technology combined with a steady flow of capital, while

domestic companies compete on the basis of their well-acknowledged brands, an extensive

distribution network and an insight in local market conditions.

One of the critical factors those influences durable demand is the government spending on

infrastructure, especially the rural electrification programme. Given the government's inclination

to cut back spending, rural electrification programs have always lagged behind schedule. This

has not favored durable companies till now. Any incremental spending in infrastructure and

electrification programs could spur growth of the industry

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('000*) 2004-05 2012-13

Category Rura

l

Urba

n

All

Indi

a

Rura

l

Urba

n

All

Indi

a

TVs

(colour)

48 304 121 185 723 347

Refrigerato

rs

35 335 120 65 717 262

Washing

machines

10 167 55 20 399 135

Sewing

machines

71 172 100 85 152 103

(m) 2004-05 2012-13

Category Rura

l

Urba

n

All

Indi

a

Rura

l

Urba

n

All

Indi

a

TVs

(colour)

5.9 14.9 20.8 25.7 43.5 69.1

Refrigerato

rs

4.3 16.4 20.6 9.0 43.1 52.2

Washing

machines

1.2 8.2 9.5 2.8 24.0 26.9

Sewing

machines

8.7 8.4 17.2 11.8 9.1 20.5

Source: NCAER, * households

COMPETITION IN THE INDUSTRY

The entry of multinationals like LG, Sony, SHARP, Samsung, Hairier, Thomson, Hitachi, TCL,

Videocon etc into the Indian market, coupled with production capacities, is expected to push

supply and lower prices of LCD TV till festive season. Due to significant higher capacity and

intense competition, the ability of players to increase prices will be extremely restricted. As a

result, sales margins are expected to remain under considerable pressure.

The basis of competition for the CONSUMER DURABLE market in India is increasingly

moving towards brand strength and distribution networks. Hence, advertising and marketing

expenses are expected to remain significantly high for the players in this industry.

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TOP CONSUMER DURABLE BRANDS

• Akai • TCL

• BPL • Thomson

• Sony • Onida

• Hairier • Panasonic

• Hitachi • LG

• Samsung • Philips

• SHARP • VIDEOCON

CONSUMER BEHAVIOUR

To define consumer behavior: it is the study of consumers and the processes they use to choose,

use (consume), and dispose of products and services. A more in depth definition will also include

how that process impacts the world. Consumer behavior incorporates ideas from several sciences

including psychology, biology, chemistry and economics.

"All marketing decisions are based on assumptions and knowledge of consumer behavior,"

(Hawkins and Mothersbaugh, 2007). Researching consumer behavior is a complex process, but

understanding consumer behavior is critical to marketers-they can use it to:

How many times throughout the day do people make product decisions? If you stop to think

about it, many product decisions are made every day, some without much thought. What should I

wear? What should I eat? What am I going to do today? Many product decisions are answered

routinely every day and they help move the economy of cities, countries and ultimately the

world.

▪ Provide value and customer satisfaction.

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▪ Effectively target customers.

▪ Enhance the value of the company.

▪ Improve products and services.

▪ Create a competitive advantage

▪ Understand how customers view their products versus their competitors’ products.

▪ Expand the knowledge base in the field of marketing,

▪ Apply marketing strategies toward a positive affect on society (encourage people to

support charities, promote healthy habits, reduce drug use etc.)

Product decisions also shape life for the consumer. How can simple decisions be so important?

Why do marketers spend millions of dollars to uncover the reasons behind these decisions

The study of consumers helps firms and organizations improve their marketing strategies by

understanding issues such as how

• The psychology of how consumers think, feel, reason, and select between different

alternatives (e.g., brands, products, and retailers);

• The psychology of how the consumer is influenced by his or her environment (e.g.,

culture, family, signs, media);

• The behavior of consumers while shopping or making other marketing decisions;

• Limitations in consumer knowledge or information processing abilities influence

decisions and marketing outcome;

• How consumer motivation and decision strategies differ between products that differ in

their level of importance or interest that they entail for the consumer; and

• How marketers can adapt and improve their marketing campaigns and marketing

strategies to more effectively reach the consumer.

One "official" definition of consumer behavior is "The study of individuals, groups, or

organizations and the processes they use to select, secure, use, and dispose of products, services,

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experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer

and society." Although it is not necessary to memorize this definition, it brings up some useful

points:

• Behavior occurs either for the individual, or in the context of a group (e.g., friends

influence what kinds of clothes a person wears) or an organization (people on the job

make decisions as to which products the firm should use).

• Consumer behavior involves the use and disposal of products as well as the study of how

they are purchased. Product use is often of great interest to the marketer, because this

may influence how a product is best positioned or how we can encourage increased

consumption. Since many environmental problems result from product disposal (e.g.,

motor oil being sent into sewage systems to save the recycling fee, or garbage piling up at

landfills) this is also an area of interest.

• Consumer behavior involves services and ideas as well as tangible products.

• The impact of consumer behavior on society is also of relevance. For example,

aggressive marketing of high fat foods, or aggressive marketing of easy credit, may have

serious repercussions for the national health and economy.

2.REVIEW OF LITERATURE

Consumer behaiour is most studied area of learning both academically and professionally. It is

also an integrated part of Human Psychology.These all combined has induced the Business

Organisations tocontantly regulate their marketing strategy and product planning based on a

regular understanding of consumer behavior.The topic of consumer behaviour is one of the

massively studied topics by the researchers and marketers in the past and still being studied.

Researchers show different reasons as to why consumer behaviour has been the topic of many

academics and researchers. One of the common views is that understanding consumer behaviour

has become a factor that has a direct impact on the overall performance of the businesses (Kotler

and Keller, 2012). Another view suggests that understanding consumer behaviour has become

crucial especially due to fierce competition in retail industry in the UK and worldwide (Lancaster

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et al, 2002). This chapter will introduce some other areas of research background of consumer

behaviour addressing the works of researchers and marketers. Moreover, consumer decision

making process, in particular, five stages of consumer decision making process will be discussed

in detail.

Consumer Behaviour Christopher (1989) studied the shopping habits of consumers to form an

idea of whether or not the store concepts, product ranges and strategies of the companies are

appropriate towards consumer requirements. He believed that consumer behaviours are

unpredictable and changing continuously changing; while trying to under try to understand how

individual or group make their decision to spend their available resources on consumption-

related items. These are factors that influence the consumer before, during, and after a purchase

(Schiffiman and Kanuk, 1997), for example, feedback, from other customers, packing,

advertising, product appearance, and price (Peter & Olsonetc, 2005).

Perceptions take consumers to the process of selecting, organising, and interpreting stimuli to a

meaningful and coherent picture of the world (Schiffman and Kanuk (2007).Because there are so

many marketing stimuli, consumers need to limit the information of product that will have an

effect on the decision making. Bolfing (1988) also purposed that there are plenty of customers

that have ‘perceptual vigilance’ which is the stage of being screening information that is

relevant. On perception process, customers express their own final perception using their

consuming behaviour.Many consumer durable companies need to find innovative ways to

revitalize product lines.To do so ,they must better forecast demand ,improve supply chain

efficiencies and manage inventory to meet ever-fickle consumer tastes.

It is worth noting that consumer buying behaviour is studied as a part of the marketing and its

main objective it to learn the way how the individuals, groups or organizations choose, buy use

and dispose the goods and the factors such as their previous experience, taste, price and branding

on which the consumers base their purchasing decisions (Kotler and Keller, 2012).

One of such studies of consumer buying behaviour has been conducted by Acebron et al (2000).

The aim of the study was to analyze the impact of previous experience on buying behaviour of

fresh foods, particularly mussels. In their studies the authors used structural equation model in

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order to identify the relationship between the habits and previous experience on the consumer

buying decision. Their findings show that personal habits and previous experience on of the

consumers have a direct impact on the consumers’ purchase decision in the example of

purchasing fresh mussels. They also found that the image of the product has a crucial impact on

the purchasing decision of the consumer and further recommended that the product image should

continuously be improved in order to encourage the consumers towards purchasing.

Another study conducted by Variawa (2010) analyzed the influence of packaging on consumer

decision making process for Fast Moving Consumer Goods. The aim of the research was to

analyze the impact of packaging for decision making processes of low-income consumers in

retail shopping. A survey method has been used in order to reach the research objectives. In a

survey conducted in Star Hyper in the town of Canterville 250 respondents participated. The

findings of the research indicate that low-income consumers have more preferences towards

premium packaging as this can also be re-used after the product has been consumed. Although

the findings indicate that there is a weak relationship between the product packaging and brand

experience. However, it has been proven by the findings of the research that low-income

consumers have greater brand experience from the purchase of ‘premium’ products when

compared to their experience from purchasing ‘cheap’ brand products.

Lee (2005) carried out study to learn the five stages of consumer decision making process in the

example of China. The researcher focuses on the facts that affect the consumer decision making

process on purchasing imported health food products, in particular demographic effects such as

gender, education, income and marital status. The author employed questionnaire method in

order to reach the objectives of the research. Analysis of five stages of consumer decision

making process indicate that impact of family members on the consumer decision making

process of purchasing imported health food products was significant.

The author further explains this by the fact Chinese tradition of taking care of young and old

family members have long been developed and marriage is considered to be extremely important

in Chinese tradition. This reflects in the findings of the study that the purchase of imported

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health food products made by a person for the people outside the family is declined significantly

by both male and female Chinese after they get married.

Five Stages Model of consumer decision making process has also been studied by a number of

other researchers. Although different researchers offer various tendencies towards the definitions

of five stages, all of them have common views as they describe the stages in similar ways. One

of the common models of consumer decision making process has been offered by Blackwell et al

(2006). According to him, the five stages of consumer decision making process are

followings: problem/need recognition, information search, evaluation of alternatives, purchase

decision made and post-purchase evaluation.

Each stage is then defined by a number of researchers varying slightly but leading to a common

view about what each stage involves. For example, according to Bruner (1993) first stage, need

recognition occurs when an individual recognizes the difference between what they have and

what they want/need to have. This view is also supported by Neal and Questel (2006) stating that

need recognition occurs due to several factors and circumstances such as personal, professional

and lifestyle which in turn lead to formation of idea of purchasing.

In the next stage, consumer searches information related to desired product or service (Schiffman

and Kanuk, 2007). Information search process can be internal and external. While internal search

refers to the process where consumers rely on their personal experiences and believes, external

search involves wide search of information which includes addressing the media and advertising

or feedbacks from other people (Rose and Samouel, 2009).

Once the relevant information about the product or service is obtained the next stage involves

analyzing the alternatives. Kotler and Keller (2005) consider this stage as one of the important

stages as the consumer considers all the types and alternatives taking into account the factors

such as size, quality and also price.

Backhaus et al (2007) suggested that purchase decision is one of the important stages as this

stage refers to occurrence of transaction. In other words, once the consumer recognized the need,

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searched for relevant information and considered the alternatives he/she makes decision whether

or not to make the decision. Purchasing decision can further be divided into planned purchase,

partially purchase or impulse purchase as stated by Kacen (2002) which will be discussed further

in detail in the next chapters.

Finally, post-purchase decision involves experience of the consumer about their purchase.

Although the importance of this stage is not highlighted by many authors Neal et al (2004)

argues that this is perhaps one of the most important stages in the consumer decision making

process as it directly affects the consumers’ purchases of the same product or service from the

same supplier in the future.

The most noteworthy writers that serve as academic advocates of The Five Stage Model of

consumer decision making include Tyagi (2004), Kahle and Close (2006) Blackwell et al.

(2006), and others.It is important to note that The Five Stage Model is not the only model related

to consumer decision-making, and there are also a range of competing models that include

Stimulus-Organism-Response Model of Decision Making developed by Hebb in 1950’s,

Prescriptive Cognitive Models, The Theory of Trying (Bagozzi and Warsaw, 1990), Model of

Goal Directed Behaviour (Perugini and Bagozzi, 2001) and others. All of these models are

analysed in great detail in Literature Review chapter of this work.

CONCLUSION

It has been established that the consumer buying behaviour is the outcome of the needs and

wants of the consumer and they purchase to satisfy these needs and wants. Although it sounds

simple and clear, these needs can be various depending on the personal factors such as age,

psychology and personality. Also there are some other external factors which are broad and

beyond the control of the consumer.Regular study of consumers on the part of the business

organizations is one of the most important marketing functions. Changing customer loyalty, shift

in their choices and frequent changes in their mind set up all keep the Business organizations on

their toe. It is otherwise too. Often Company influence the consumer buying behavior through

their advertisements, promotions, product range, pricing and various other promotional activities.

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Marketing Management,12th

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