Live Project on Consumer Buying Behavior on Soft Drinks BY Arijit Das Reg. No : 5027 And Nadim Ahmed Khan Reg. No : 5019 Of VISHWA VISHWANI INSTITUTE OF SYSTEMS AND MANAGEMENT Under the Guidance of Sunitha Ratnakaram Associate Professor A PROJECT REPORT Submitted to the FACULTY OF BUSINESS MANAGEMENT In partial fulfillment of the requirements For the award of the POST GRADUATE DIPLOMA IN MANAGEMENT November 2010 DECLARATION We Arijit Das and Nadim Ahmed Khan hereby declare that this project titled “Consumer Buying Behaviour”is an original work carried out by ous , under the guidance of Sunitha Ratnakaram(Associate Professor).
The report submitted by ous is a bonafide work carried by ous of our own efforts and it has not been submitted to any other University or published any time before. Arijit Das Nadim Ahmed Khan Date :20. 11. 2010 Place : Hyderabad Table of contents ChapterNo. | Title| Page No. | Chapter1| Introduction | | | introduction of study| 6-7| | OBJECTIVES| 7| | NEED OF THE STUDY| 7| | SCOPE & LIMITATIONS| 7-8|
CHAPTER 2| REVIEW OF LITERATURE| | | SUMMARY OF 10 ARTICLES| 10-14| CHAPTER 3| RESEARCH METHODOLOGY| | | SOURCE AND TYPE OF DATA COLLECTION| 16| | SAMPLE DESIGN| 16-17| | RESEARCH INSTRUMENT| 17| | STATISTICAL ANALYSIS DETAILS| 18-20| Chapter 4| DATA ANALYSIS| | | CROSS TABULATION| 22-36| | GRAPHICAL REPRESENTATION AND INFERENCE| 22-36| CHAPTER 5| FINDINGS,RECOMMENDATIONS,CONCLUSION| | | FINDINGS| 38| | RECOMMENDATION| 38| | CONCLUSION| 38| | REFERENCES| 39| | ANNEXURE| 40-41| CHAPTER 1 INTRODUCTION INTRODUCTION INTRODUCTION TO STUDY
What influences consumers to purchase products or services? The consumer buying process is a complex matter as many internal and external factors have an impact on the buying decisions of the consumer.
When purchasing a product there several processes, which consumers go through.
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These will be discussed below. 1. Problem/Need Recognition How do you decide you want to buy a particular product or service? It could be that your DVD player stops working and you now have to look for a new one, all those DVD films you purchased you can no longer play! So you have a problem or a new need.
For high value items like a DVD player or a car or other low frequency purchased products this is the process we would take. However, for impulse low frequency purchases e. g. confectionery the process is different. 2. Information search So we have a problem, our DVD player no longer works and we need to buy a new one. What’s the solution? Yes go out and purchase a new one, but which brand? Shall we buy the same brand as the one that blew up? Or stay clear of that? Consumer often go on some form of information search to help them through their purchase decision.
Sources of information could be family, friends, neighbours who may have the product you have in mind, alternatively you may ask the sales people, or dealers, or read specialist magazines like What DVD? to help with their purchase decision. You may even actually examine the product before you decide to purchase it. 3. Evaluation of different purchase options So what DVD player do we purchase? Shall it be Sony, Toshiba or Bush? Consumers allocate attribute factors to certain products, almost like a point scoring system which they work out in their mind over which brand to purchase.
This means that consumers know what features from the rivals will benefit them and they attach different degrees of importance to each attribute. For example sound maybe better on the Sony product and picture on the Toshiba , but picture clarity is more important to you then sound. Consumers usually have some sort of brand preference with companies as they may have had a good history with a particular brand or their friends may have had a reliable history with one, but if the decision falls between the Sony DVD or Toshiba then which one shall it be?
It could be that the a review the consumer reads on the particular Toshiba product may have tipped the balance and that they will purchase that brand. 4. Purchase decision Through the evaluation process discussed above consumers will reach their final purchase decision and they reach the final process of going through the purchase action e. g. The process of going to the shop to buy the product, which for some consumers can be as just as rewarding as actually purchasing the product. Purchase of the product can either be through the store, the web, or over the phone. 5. Post Purchase Behaviour
Ever have doubts about the product after you purchased it? This simply is post purchase behaviour and research shows that it is a common trait amongst purchasers of products. Manufacturers of products clearly want recent consumers to feel proud of their purchase, it is therefore just as important for manufacturers to advertise for the sake of their recent purchaser so consumers feel comfortable that they own a product from a strong and reputable organisation. This limits post purchase behaviour. i. e. You feel reassured that you own the latest advertised product. OBJECTIVES To understand the major factors influencing consumer buying behavior. * To know and recognize the types of buying decision behavior. * To understand the stages In the buying decision process. NEED OF THE STUDY * To understand why consumer make the purchases that they make SCOPE AND LIMITATIONS Scope of the study The scope of the study is to get the first hand knowledge about the buying behavior of consumers towards different brands of Soft drinks in VVISM students. The scope is restricted to study the factors affecting the preference of consumers while choosing a soft drink in VVISM college students.
This is done to avoid perceptual bias and for providing objectivity to the study. Limitations of the study Sincere efforts have been made to collect authentic and reliable information from respondents, however the report is subject to following limitations: * Some respondents were reluctant to give the information, so their responses may be biased. * Time could be a major limitation as it may have affected the inferences drawn in the study. Only 20 respondents have been contacted due to time constraint. * Sample may not be the true representative of the universe. Study was conducted in VVISM, Hyderabad only. So the results of the study may not be applicable in other areas. CHAPTER 2 REVIEW OF LITERATURE REVIEW OF LITERATURE SUMMARY OF 10 ARTICLES 1. Consumer buying behavior and market segmentation(By Rabbitat) According to the marketing guru Phillip Kotler, a human need is defined as a state of felt deprivation. A human want on the other hand is a need shaped by the individuals culture and society. Understanding what consumers need and how these needs can be made into wants is what effective marketing is all about!
For instance a customer need may be thirst, and any drink such as a bottle of water could satisfy this need. However at the point of purchase effective marketing determines what the customer will want to purchase in order to quench their thirst. For example a good advertisement for coke could steer the customer away from the bottled water section and towards the fizzy drinks. On the other hand an effective ad for ice lollies, an indirect competitor, could steer the consumer away from the fizzy drinks. Therefore the more effective the marketing, the easier it will be to get the cash out of the customers hand!
It is then obvious that Marketing is all about understanding consumer needs and steering the customer toward Your product by creating certain wants in the minds of the customer. To do this marketers should be aware of the consumer buying behavior process: Buyer recognition: the consumer has to realize there is a problem or need that needs to be fulfilled. The effective marketer will identify there is a difference between the actual state of the consumer and the desired state, and try to fulfill this state of deprivation. Information search: in this stage the buyer considers all the alternatives present.
For instance, according to the example above, the customer would look at all thirst quenchers such as fizzy drinks, bottled water, juices and ice lollies. The most information a customer gains about alternatives is through commercial sources, such as advertisements and campaigns. However information about intangible products in the service industry would mostly come from personal experience or experience from others. Evaluation of alternatives: this is where all the information is gathered and evaluated to help make the purchasing decision.
These three stages are important, for marketers to understand consumer behavior and what influences purchasing of a certain product category and brand. Purchase decision: this is the stage where purchasing of the most preferred alternative takes place. However the product category, brand, reseller, timing and quantity all play a role in the purchase decision. Post purchase decision: good marketers maintain a good relationship with the customer even after the purchase has been made. This is to reduce any chance of cognitive dissonance that the customer may experience with the product.
To reduce the negative effects of customer cognitive dissonance, good after sales services could be provided along with effective advertising. This will attract more customers via word of mouth and generate repeat purchases. 2. Break the Resistance of Consumer Buying Behavior(By Darrell Zahorsky) Buyers today are a fickle group. Who’s to blame them? Bombarded with an endless selection of products and services, making a good purchase decision isn’t easy. What can your small business do when your potential buyers won’t buy? 5 Stages of Consumer Buying Behavior 1.
Need Awareness: The beginning point of most purchasing is your potential buyer recognition of a need in their life. This need can be established by encountering a problem or prompted by a company’s marketing. 2. Information Search: With the rise of the Internet, it has never been easier for buyers to research their purchase. Make sure your small business is in the game by providing educational material on your website. 3. Check Options: After an information search, the customer will evaluate all the available options. Options include wanted features, pricing, and company credibility. 4.
Purchase Decision: This is the moment when the customer wants to buy. Deals are easily lost when you keep selling to the customer. There’s an old adage in sales, when the customer says, “I’ll take it,” keep your mouth closed, and close the deal. 5. Post Buying Behavior: An overlooked piece of consumer buying behavior is what occurs after the purchase. The buyer will look for reinforcement from media, friends, and other sources confirming they made the right decision. Cognitive dissonance or “buyer’s remorse” happens when the buyer begins to feel the purchase wasn’t right for them. 3. Simple Purchases Aren’t Always so Simple(By S.
L. O Brien) Purchasing decisions include many factors that most consumers are not even aware of. Five steps are involved in nearly every purchase made: need recognition, information search, evaluation of alternatives, purchase Decision and finally post purchase behavior. even the simpler purchases can include any or all of these steps. Purchases are further influenced by such things as personal psychological and social issues. A good market researcher will study the thought process undergone by consumer, compare it with their demographic data and use the resulting information to market their products.
Simple purchases aren’t always so simple 4. Nowhere to hide: buyer behavior in a connected world(By Paul Gibler) Window shopping isn’t dead, it has simply moved into a different dimension. This is a dimension where your business has “nowhere to hide” or can be “completely hidden” given the power of the Internet. Your business, be it a manufacturer, supplier or retailer needs to understand the changing nature of buyer behavior facilitated by the Internet. Whether buying through a virtual, real or multi-channel storefront, the options consumers use to learn about products, compare products, or shop prices have multiplied exponentially.
The greater transparency created by these tools has made it critical that you understand and incorporate them into your business and marketing plans. Before the days of the Internet, buyer behavior often focused on word of mouth recommendations and feedback; in-store questioning; listening to, watching or reviewing ads; or reading print reviews in vertical publications or from multi-line authorities like Consumer’s Report. Today, the options for information search and product comparisons have multiplied beyond consumer’s processing ability.
While this creates an opportunity for high service marketers with high touch products it has also generated the need to understand how consumers are behaving in their product purchasing activities. Consumers are continuing to look for ways to stretch their dollar while getting the best quality product that satisfies their needs. This has led them into “brick and mortar” stores like Costco, Wal-Mart, Aldi and Trader Joes to buy their food and staples; but it has also led them online for more complex purchases. 5. Consumer Buying Behavior and Manipulation(By Lance Winslow)
We all know there are ways that that businesses use to manipulate our buying behavior to get us to buy more. We know there are many techniques and other stimuli, which affect us and we know that they are often employed in businesses. Generally we accept this even we actually stop to think about it. We probably determine that it is inappropriate and somewhat unfair. Yet we all participate in the impulse shopping and it seems to make us feel good to buy things,as a reward for our labours,with the money we have made. Certain music in stores will assist in helping retailers sell more.
Certain room temperature at retailers,book stores,cofeeshops will increase impulse buying,which are generally amongst the highest priced items and definitely the highest profit items. 6. The Importance of Changing Customer Buying Behavior(By Stephen Diorio) The broad-scale adoption of new technologies has empowered consumers in previously unimagined ways. As a result, customer buying behavior is adapting to these new technological advances so rapidly that marketers sometimes cannot keep pace. Web sales are growing faster than catalog and store sales. Most direct marketers are now at least experimenting with online transactions.
In the last year, for example, Lands’ End experienced 300 percent growth in e-sales while paper catalog sales growth slowed to 10 percent and margins shrank. 7. Types of Buying Decision Behavior(By Raja Vikram) Buying decision differs from person to person. Depending upon the need of the person,the decision gets changed. Various types of buying behavior are : Complex buying behaviour : This situation involves the high level of involvement from consumers and the same with the difference among brands. Dissonance reducing behavior : This involves high involvement of the buyer but a less significance difference among the brands.
Habitual buying behavior : Here,there will not be any kind from the customer. Here the purchase happens depending upon the brand familiarity. Variety seeking buying behavior : Here the customer involvement is low but there will be significant difference among brands. 8. Characteristic Affecting Consumer Purchase Behavior(By Dhanan Sarwo utomo) People buy different products from different brand to satisfy their need. Consumer purchases are influenced strongly by cultural, social, personal and psychological characteristic . although marketers cannot control such factors , they must give attention to them.
Marketers are always trying to spot cultural shifts in order to discover new product that might be wanted. For example the shift toward informality has resulted more demand for casual clothing and simpler fashionable products. 9. Consumer shopping behavior:How much do consumer save? (By Rachel Griffith) This paper documents the potential and actual savings that consumers realize from four particular types of purchasing behavior: purchasing on sale; buying in bulk (at a lower per unit price); buying generic brands; and choosing outlets. How much can and do households save through each of these behaviors?
How do these patterns vary with consumer demographics? We use data collected by a marketing firm on all food purchases brought into the home for a large, nationally representative sample of U. K. households in 2006. We are interested in how consumer choice affects the measurement of price changes. In particular, a standard price index based on a fixed basket of goods will overstate the rise in the true cost of living because it does not properly consider sales and bulk purchasing. According to our measures, the extent of this bias might be of the same or even greater magnitude than the better-known substitution and outlet biases. 0. Indian consumer will seek value(By Arvind Singhal) Some of the trends listed below may look contradictory but then, at this time, the Indian consumer, especially the urban, middle income, and relatively young segment (and this classification will probably cover about 200 million individuals) is showing some seemingly contradictory buying behaviour. * Consumers will move beyond basic needs to discretionary spending. * They will seek value in products that serve basic needs such as food and grocery. * The definition of value will be different for different products.
For instance, they will seek the lowest price for products that serve basic needs, whereas in others the determinants will range from aspiration to convenience to brand name. * There will be more visible consumption for products having bling value and consumers will continue to pay a premium for them. * We will see rise in indulgence with more desire for enjoyment and experience. * Consumers will seek more instant gratification. * We will also see the culture of throughout-the-year consumption rather than festival- or occasion-led spendings in the past. * We will see increasing fear of being ordinary.
Consumers would want to be extraordinary though still within current social norms. * Consumers will get more conscious about their health and well being. * They will begin getting concerned with the surrounding environment—including nature, society, politics and public policy CHAPTER 3 RESEARCH METHODOLOGY RESEARCH METHODOLOGY SOURCE AND TYPE OF DATA COLLECTION 1 Primary Data Primary data is that data which is collected for the first time. It is original in nature in the shape of raw material. For the purpose of collection of primary data, a well structured questionnaire was framed which was filled by the respondents.
The questionnaire comprises of close ended as well as open ended questions. In close ended questions dichotomous, ranking, checklist questions and multiple choice questions are used. 2 Secondary Data Secondary data is the data which is already collected by someone. They are secondary in nature and are in shape of finished product. Secondary data was collected so as to have accurate results. Required data was collected from various books, magazines, journals and internet. SAMPLING DESIGN Sampling refers to selecting some of the elements in a population by which one can draw conclusions about the entire population. Universe Universe is the infinite number of elements which the researcher is targeting in his study. Since the study is restricted to VVISM students only the universe for the study consists of all the soft drink consumers in VVISM .
2 Population Population is finite number of elements which the researcher is going to target in particular area. All the soft drink consumer students in VVISM college form the population for the study. 3 Sampling Unit Sampling Unit is the single unit of the population. A single individual who consume soft drink form the sampling unit of the study. Extent Extent refers to the geographical area where there is a scope of population. The extent of the study is VVISM,Hyderabad. 5 Sampling Technique The selection of the respondents was done on the basis of convenience technique based on the non probability method of sampling. 6 Sample size Sample size is the size of sample drawn from the population which is the true representative of the research. The number of respondents included in the study was 50 for convenience in evaluating and analyzing the data and because of time constraint.
RESEARCH INSTRUMENT Questionnaire This instrument is more popular. The questionnaire is sent to the person concerned to answer the questions formatted and return the same soon. A questionnaire consist of a number of questions printed and typed in definite order on a form or set of forms. The questionnaire is sent to the respondents. In order to achieve the research objectives it is necessary to collect accurate and relevant data,secondary data are already published data collected for purposed other than specific research needs at hand.
Primary data that are collected specifically for the research situation at hand,were collected by surveys using respondents surveys is one of the ways of collecting primary data namely observations,experiments and surveys. STATISTICAL ANALYSIS DETAILS QUESTIONNAIRE Q 1. Do you like to have soft drinks? a. Yes b. No Yes| No| 42| 8| Q 2. Do you think that soft drinks that are available in the market are harmful for your health ? a. Yes b. No Yes| No| 29| 21| Q 3. Do you think that soft drinks are good for refreshment? a. Yes b. No Yes| No| 37| 13| Q 4. Which is your favourite flavour? . Cola b. Orange c. Mango d. Lemon e. Others Cola| Orange| Mango| Lemon| Others| 26| 10| 10| 4| 0| Q 5. Are you satisfied with the price of your favourite soft drink? a. Satisfied b. Highly Satisfied c. Dissatisfied d. Highly dissatisfied Satisfied|
Highly satisfied| Dissatisfied| Highly dissatisfied| 21| 29| 0| 0| Q 6. Are you influnenced by the advertisement given by your favourite soft drink company? a. Yes b. No c. May be Yes| No| May be| 24| 19| 7| Q 7. Do you think that endorsement by the celebrities can increase the sell of the soft drinks? . Yes b. No c. May be Yes| No| May be| 28| 7| 15| Q 8. Is your favourite soft drink available in all/most of the retail store in your city? a. Yes b. No Yes| No| 39| 11| Q 9. Do you feel that soft drinks should contain less calories so that those can be taken by the diabatese patients also? a. Yes b. No Yes| No| 32| 18| Q 10. How many times in a week you go for soft drinks? a. 0-3 times b. 4-6 times c. 7-10 times d. More than 10 times 0-3 times| 4-6 times| 7-10 times| More than 10 times| 20| 22| 5| 3| Q 11.
If you are an alcohol consumer,then at the time of consuming alcohol do you consume soft drinks also for making the taste of alcohol better? a. Yes b. No c. Sometimes Yes| No| Sometimes| 8| 5| 6| Q 12. Do you store soft drink at the refrigerator of your home? a. Yes b. No Yes| No| 33| 17| Q 13. According to you what is the main USP of the soft drinks available in the market? a. Less costly than other drinks b. Taste c. Availability d. More refreshing Less costly than other drinks| Taste| Availability| More refreshing than other drinks| 4| 39| 0| 7| Q 14.
Do you feel that inspite of using artificial flavours soft drink companies should go for natural flavours? a. Yes b. No c. May be Yes| No| May be| 21| 18| 11| Q 15. How do you rate the promotional strategies used by the soft drink companies? 1| 2| 3| 4| 5| 6| 7| 8| 9| 10| | | | | | 2| 12| 15| 19| 2| CHAPTER 4 DATA ANALYSIS DATA ANALYSIS CROSS TABULATION,GRAPHICAL REPRESENTATION AND INFERENCE QUESTIONNAIRE Q 1. Do you like to have soft drinks? a. Yes b. No Yes| No| 42| 8| Interpretation Since the survey is done among the youth,from the statistics we can say that consumption of soft drink is very popular among youth.
Q 2. Do you think that soft drinks that are available in the market are harmful for your health ? a. Yes b. No Yes| No| 29| 21| Interpretation Out of 50 people 21 people think that having soft drinks is harmful for their health. Inspite of that most of them consume soft drinks. Q 3. Do you think that soft drinks are good for refreshment? a. Yes b. No Yes| No| 37| 13| Interpretation Most number of people feel that soft drinks are good for refreshment. Q 4. Which is your favourite flavour? a. Cola b. Orange c. Mango d. Lemon e.
Others Cola| Orange| Mango| Lemon| Others| 26| 10| 10| 4| 0| Interpretation Majority of the people prefer to have cola. Q 5. Are you satisfied with the price of your favourite soft drink? a. Satisfied b. Highly Satisfied c. Dissatisfied d. Highly dissatisfied Satisfied| Highly satisfied| Dissatisfied| Highly dissatisfied| 21| 29| 0| 0| Interpretation There is no dissatisfaction among the consumer regarding the price of the soft drinks. Q 6. Are you influnenced by the advertisement given by your favourite soft drink company? a. Yes b. No c. May be
Yes| No| May be| 24| 19| 7| Interpretation Most of the people are influenced by the advertisement given by the companies. So we can say that advertisement plays a major role in influencing soft drinks consumer. Q 7. Do you think that endorsement by the celebrities can increase the sell of the soft drinks? a. Yes b. No c. May be Yes| No| May be| 28| 7| 15| Interpretation Majority of the people are influenced by the celebrity endorsement Q 8. Is your favourite soft drink available in all/most of the retail store in your city? a. Yes b. No Yes| No| 39| 11| Interpretation
Since most of the people’s favourite soft drinks are available throughout their city,we can assume that distribution system of those companies are quite good. Though in some cases better distribution is required. Q 9. Do you feel that soft drinks should contain less calories so that those can be taken by the diabatese patients also? a. Yes b. No Yes| No| 32| 18| Interpretation Most of the people are satisfied with the calory level in the soft drinks. Though some people want less calories. Q 10. How many times in a week you go for soft drinks? a. 0-3 times b. 4-6 times c. -10 times d. More than 10 times 0-3 times| 4-6 times| 7-10 times| More than 10 times| 20| 22| 5| 3| Interpretation Majority of the people consume at least 4-6 times in a week. So we can assume that high demand for soft drink is there. Q 11. If you are an alcohol consumer,then at the time of consuming alcohol do you consume soft drinks also for making the taste of alcohol better? a. Yes b. No c. Sometimes Yes| No| Sometimes| 8| 5| 6| Interpretation There exists a derived consumption of soft drinks. Q 12. Do you store soft drink at the refrigerator of your home? a. Yes b.
No Yes| No| 33| 17| Interpretation Now a days most of the people store soft drinks in their home. So we can assume that the popularity of consuming soft drinks is increasing day by day. Q 13. According to you what is the main USP of the soft drinks available in the market? a. Less costly than other drinks b. Taste c. Availability d. More refreshing Less costly than other drinks| Taste| Availability| More refreshing than other drinks| 4| 39| 0| 7| Interpretation Majority of the people consume soft drinks because of it’s taste. Price doesn’t matter that much to them. Q 14.
Do you feel that inspite of using artificial flavours soft drink companies should go for natural flavours? a. Yes b. No c. May be Yes| No| May be| 21| 18| 11| Interpretation Most of the people feels that natural flavours would be better than the artificial/synthetic flavours. Q 15. How do you rate the promotional strategies used by the soft drink companies? 1| 2| 3| 4| 5| 6| 7| 8| 9| 10| | | | | | 2| 12| 15| 19| 2| Interpretation Majority of the consumer are very much satisfied by the promotions being done by the companies. CHAPTER 5 FINDINGS RECOMMENDATIONS CONCLUSION FINDINGS AND RECOMMENDATIONS FINDINGS Most of the consumers are influenced by those brands which represents their characteristics. In this case we have found that cola drinks are preffered by most of the boys,since those drinks are stronger than other drinks and most of the girls preffer to have orange and mango flavoured drinks as those are mild in taste compare to the cola drinks. * Most of the consumers are influenced by those brands which are being endorsed by the celebrities. * Promotion plays a very important role in case of increasing the sell,penetrate the market and holding the current market share. RECOMMENDATIONS * Now a days consumers are becoming health conscious.
So keeping that in mind,companies should think about using natural flavours in spite of those synthetic ones. * To increase the market share companies should think about the people like diabatese patients also as they cannot consume high calories. Though some companies are manufacturing diet soft drinks but they are very few in numbers. CONCLUSION * From the survey it can be conclude that majority of the consumer like to purchase cola , flavor. * Consumers like to purchase soft drinks because of refreshments * In this scenario consumer buying behaviour is changed, because they are more health conscious .
REFERENCES * http://www. helium. com/items/656129-consumer-buying-behavior-and-market-segmen tation * http://sbinformation. about. com/od/advertisingpr/a/behavior. htm * http://www. associatedcontent. com/article/19593/marketing_factors_consumer_buying_behavior. html? cat=35 * ” http://www. WorldThinkTank. net/wttbbs/” * http://ideas. repec. org/a/aea/jecper/v23y2009i2p99-120. html * http://www. livemint. com/2008/12/24222258/Buying-behaviour-Indian-consu. html * www. google. co. in * www. yahoo. co. in
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