CONSUMER BEHAVIOUR

CONSUMER BUYING BEHAVIOUR AND DECISION MAKING PROCESS

TERM REPORT

SUBMITTED BY : ABEER SALIM HIRA WAHEED MEHREEN ABBAS NAZNEEN ZUBAIR SANIYA IKRAM

SUBMITTED TO: Maam Ambreen Bashir

Consumer Behaviour: Consumers or the Customers are valuable assets for any organisation as they are the ultimate destination of any products or services. Since, they are the ultimate end users of any product or services, thus, the success of any organisation depends upon the satisfaction of the consumers, if not they will switch to other brands. Due to this reason, the satisfaction of the consumers becomes priority for any organisations. For satisfying the consumers, one has to know about what consumer buy, why they buy it, when they buy it, how and how often they buy it and what made them to switch to other brands.

Our term report is an attempt to study the buying patterns among the individuals with relevance to hair care services. The study also examines the various factors which influence the consumers to choose a particular brand for hair care service and reasons for their switching to other brands.

Product Service Category : Hair Care INTRODUCTION Consumers or the Customers are valuable assets for any organisation. Consumer is an individual or group of individuals who select, purchase, use, or dispose of products, services, ideas, or experiences to satisfy needs and desires. In other words, Consumers are the ultimate destination of any products or services. The study of these individuals, groups, or organizations is what we call Consumer behaviour. The processes by which these organisations select, secure, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society. It blends elements from psychology, sociology, social anthropology and economics. It attempts to understand the buyer decision making process, both individually and in groups. It studies characteristics of individual consumers such as demographics and behavioral variables in an attempt to understand people's wants. It also tries to assess influences on the consumer from groups such as family, friends, reference groups, and society in general. Customer behavior study is based on consumer buying behaviour, with the customer playing the three distinct roles of USER, PAYER AND BUYER.

In the present competitive global market, it has been seen that organisations are increasingly focusing on the retention of their existing customers. Thus, Gaining knowledge about customers' switching behavior is substantively important for the sustainability of any organisation. Customers' switching behavior is the process exhibited by a customer, behaving differently to a particular brand and undergoes alteration in the preference of the existing product or services. Since, customers are the ultimate end users of any product or services, the success of any organisation depends upon the satisfaction of the consumers, if not they will switch to other brands. When any organisation loses a customer they are not only losing future earnings but also incurring the cost of finding new customers. Over time loyal customers become less pricesensitive therefore, losing loyal customer means giving up high margins. Considering the technological advancements and its easy access to every individual, customers are becoming intolerant and they can dissolve the relationship as soon as any problem arises. Thus, customer retention is the core concern of each and every organization. OBJECTIVES: To highlight the reasons behind the first choice of the consumers for a particular service Reason for switching the brand Level of satisfaction with the current choice and why.

Product/Service Category: HAIR CARE SEVICES Salon 1: Mona J Salon Respondent 1: Natasha Tarique switched over from Rush Salon Natasha Tarique was a consumer of the hair highlighting Salon 2: Saqib & Sabihas Respondent 2: Amber switched over from Saminas Amber was a consumer of Hair Rebonding

Name Natasha Tarique Amber

Service Hair Highlighting Hair Rebonding

Experienced Rush Salon Saminas

Switched Mona J Salon Saqib & Sabihas

Rush Salon: Situated in London, with over 30 branches in London this Salon is considered to be the competition to the renowned Toni & Guy in London. Mona J Salon: An upscale makeup artist who has done ramp and print shoots plentiful, has a medium setup with services matching top notch salons of Karachi. Saminas : The salon was placed in the category of reliable salons where the quality of products was not bad but the profile was low and not much highlighted. Saqib & Sabihas: The salon has a long list of loyal clients who prefer a more pampered environment with attention from the owner couple. Not much known for makeup skills but other services offered match other best salons of Karachi. Competition Since the target market is such who have a need of looking more appealing. The competition of the category 1 can be classified as Other high end Salons Freelance beauty consultants

For category of hair rebonding the competition is as below Other high end Salons Freelance beauty consultants DIY Hair straightening kits Hair iron manufacturing companies

MARKEING MIX STRATEGIES : Rush has competitor salons such as Tony & Guy, Headmasters, Sean Hannah all expensive and upper class salons. Rush gets an edge over its competitors as its environment is more friendly. Here small talk is encouraged with the client unlike its high end competitor salons. The product in terms of quality, styling, setup of the salon which is all chrome and glass is highly impressive and places t as a high end salon. The prices are negligibly less than the competitor and most services have the same prices in the category of salons. Rush has plenty of branches and it takes pride that anyone be it in Kensington or Canterbury, therefore place is a benefit to rush that is ahred with other Salons of UK as well. Since the digital media is mammoth sized abroad Rush and its likes have major presence not only on facebook and twitter but also well managed websites and blogs where online appointments are possible Saminas main competitors were Rose, Depilex Mahrose, Kashees beauty parlour. The individual attention of the owner with few clients at a time was an attraction for clients who were not happy in over crowded over rated salons like Rose and Depilex. The products used were of a good quality which gave the clients much comfort and guarantee of no damage. The prices were similar to the other good parlours of the area. Many good salons resort to penetration pricing, Saminas Salon did the same in order to compete with established bigger names had kept a little less margin for more consumers. Since the area is a densely populated zone of Karachi the location and place was good for building clientele. The promotion can be labeled as personal selling since the owner herself spoke to clients hence became the active spokesperson for the services.

MARKETING MIX OF SWITCHED OVER SALONS: Mona J Salon Mona J Salon has competitor salons such as Tony and Guy, Bina Khan, Sabs, Alle nora, Aliya Tippu Shaheen etc. Their Unique selling proposition in comparison to others is affordability of an experienced stylist in comparison to new more expensive fashion makeup artists. This salon is a well established name hence their product and service offered is established as safe and they extend support to their client. They have good prices that are a bit less than the competitor brands as they resort to bundled prices and get maximum benefit out of it. Since high quality products are used the guarantee of the manufacturer automatically is passed on. Since the loyal clientele belongs to the SEC A the place of Salon is in DHA. Therefore, attracting most people to the safe and convenient place. This salon has a thriving page on facebook and no paid promotions. Appearances on morning shows have done immense benefit for the public relationing therefore the promotion though limited has been done well. Saqib and Sabihas main competitors based on their offered services is Dressing table, Neelos, Blo, Mahvish Hasan Salon etc. The salon has renowned products used for all service. Since both owners are qualified Vidal Sasoon students the quality and service expected and given by the salon is really good. This salon follows a skim price method as they want to enlarge their image as high end salon and resorting to lesser margin can change the image of the salon. In six months they do come up with a short discount scheme for their loyal and regular clients. The salon is located in Defence, again a good place to capture the target market that is status conscious; they see the prices reflecting their buying powers.

Saqib and Sabiha are active on facebook and constantly promote their new work. Since they are established, their best promotion also comes from morning shows and magazine interviews. MARKETING MIX SALON 1 MARKETING MIX RUSH SALON: Product/ Service: Highlights Place: London

Price: 60 Pounds

Promotion: Various electronic media like facebook, through its website, magazines like She and Visage

MARKETING MIX SALON 2 MARKETING MIX SAMINAs: ProductService: Hair Rebonding Place: Near Time Medicos, Karachi

Price:Rs.20000

Promotion: word of mouth

Research Methodology:
The Selection of both the consumers was based on non probability convenience sampling. The research design was qualitative, where interpretivism being the dominant paradigm. While conducting the interview, discussion guide (attached as annexure) was used to direct the interview toward a pre defined objective. Out of 15 questions in total, 8 questions were related to the current service for both the consumers, while the remaining 7 focused on behaviour and consumption pattern that led to the switch of the service. The main focus was to understand the consumption patterns of both the consumers, their motivation to consumer a particular service and/ or switching to another service.

Following are the questions asked in order to direct the interview for both the consumers:

1) How did you first come to know about Hair highlight/Re-Bonding? 2) What was the motivation for you to go through this procedure? 3) Which salon did you choose and why? 4) Time/ year when service was taken? 5) Were you a client at the salon before you took this service? 6) Did you become a client later at this salon after the service? 7) How much research did you put into this research? 8) How much did you pay? Questions after the switch 1) Why did you switch? 2) Reasons for the switching? 3) What was your research this time? 4) Where you a client at this salon before? 5) Did you become a client after this service? 6) How much did you pay? 7) Why less than last time?

Customer Profile:

RESPONDENT 1:

Basis for Segmentation: Facts: Demographics: The consumer is a 24 years old female, who was single when she consumed the service, got her highlights done from Rush. She lives in Clifton and belongs to a high social class. She is a working woman who did her MBA from London and is currently associated with a media/ advertising agency. Her monthly income is around Rs.30000, which she spends on herself.

Cognition: The consumer is an independent individual, who is the decision maker of her family. She is very much outgoing and loves experiencing things around and is high on innovation having high resources. She is particularly interested in photography and partying out with friends and family, in which she is engaged very frequently.

Consumption Specific: Facts: The consumer is independent in making decisions. She consumes such grooming services on monthly basis. She got her highlights done for her sisters wedding. She is a loyal customer of Mona J to which she switched after Rush. She believes that at Mona J, the results are promising, i.e.; the results of a particular service shown in catalogue are exactly the same when consumed. The quality is also one of the most promising elements of Mona J.

Cognition: This consumer looks for quality and promising result when it comes to self enhancing activities. Her involvement was very high because she is very much conscious about her looks and appearance and believes that enhancing her outlook gives more self-confidence and admiration.

The benefits that she looked for were quality, promising end results, i.e., health, shinny hair with voluminous appearance and the colour that goes with her personality.

RESPONDANT 2:

Basis for Segmentation: Facts: Demographics: The consumer is a 28 years old female, who is single who got her rebonding done at Saminas, located near Time Medicos, opposite AKUH. She lives in Gulshan , and belongs to upper middle social class. She is a working woman who has done her BBA from Pakistan and is currently associated with private organization. Her monthly income is around Rs.15000, which she spends on herself.

Cognition: The consumer is a kind of individual who takes decision after having a careful research done and then having a joint decision and opinion of her family. She is introvert and does not take risk. She is high on innovation having high resources and is a Thinker. She is particularly interested in reading books and outings with family and friends.

Consumption Specific: Facts: The consumer makes decision a careful analysis. She consumes such grooming services on monthly basis. She got her rebonding done because she wanted her a solution to her unmanageable, frizzy hair instead of compromising her hair length and playing with cuts. She was a loyal customer of Saminas but had to switch to Saqib and Sabihas because the previous saloon got closed and shifted to USA. She was quite satisfied with the service she consumed and got various procedures done.

Cognition: This consumer looks for quality and reliability when it comes to self enhancing activities. Her involvement was very high because she is very much concerned about the outcomes of whatever she does. She does not like taking risk and so finds out first hand information from people who have experienced things personally. She is also very much conscious and concerned about her hair and cant afford to cause any damage. She likes long yet manageable hair and did not want to compromise the length. The benefits that she looked for were quality, reliability, positive and desired outcome, health, shinny, silk and smooth hair.

CUSTOMER PERCEPTION DUE TO MARKETING MIX USED BY THE SERVICE PROVIDERS: Consumer 1: Rush is perceived to be a hair dressing saloon which delivers quality, creativity and consistency in whatever they offer. It is a London Based saloon that is well known and appreciated among consumers and is a competitor to Toni and Guy. Most of its clientage belongs to the higher class society. Visiting Rush and getting your things done here is itself an experience. Marketing Mix: Service: Highlights Price: 60Pounds Place: London Promotion: Their services are worldwide promoted through various electronic media like facebook, websites, magazines like She and Visage. Along with the services being promoted through various channels and experiences of the people who come here, the consumers also get attracted to it because of the its Fame and Brand Equity. The staff their demonstrate consumers the real pictures of various procedure performed previously and guide customers by giving their experts opinion about what would suit them.

CUSTOMER 2: Saminas is a local hair dressing saloon that is perceived to be reliable having quality products and satisfied customers. Most of its Clientage belongs to Middle-middle and upper middle class. It is a competitor to Farseen, which again is a Karachi based saloon located in similar area The products used are of good quality. Marketing Mix: Service: Hair Rebonding Price: Rs. 20000 Place: Near Time Medicos, opposite AKUH, Karachi Promotion: No definite strategy, word of mouth Since the consumers get the first hand information by the customers who regularly visit Saminas and are satisfied, people are often attracted by the results and the positive feedback. The live examples draw people to get their beauty treatments and services done here.

CUSTOMER Customer 1:

PROFILE

AND

SEGMENTATION

BASES

Consumer Rooted

Consumption specific

Fact

Age: 24 years old Gender: female Marital Status: single. Income: Rs. 30000/ month Education: Masters Occupation: Media/ advertising Social Class: Upper Address: Clifton

Usage Rate: Varies but averagemonthly basis Usage Situation/ occasion:

Sisters Wedding Brand Loyalty: good Psychographics: Out going,

frequently engaged in outing with friends and new families, things, is

experiences

interested in photography. Cognition Personality Traits: Extrovert, out going, independent, decision maker VALS: High resources, high innovation, experiencer. Lifestyle: The consumer is an independent individual, who is the decision maker of her family. She is particularly interested in photography and partying out with friends and family, in which she is engaged very frequently. Believes that enhancing her outlook gives more self-confidence and admiration Benefits Wanted: quality and promising results that enhances her personality. Level high. Awareness About the of involvement: very

Alternatives: Yes

CUSTOMER 2

Consumer Rooted

Consumption specific

Facts

Age: 28 years old Gender: female Marital Status: single. Income: Rs. 15000/ month Education: Bachelors Occupation: HR co-ordinator Social Class: Upper Middle Class Address: Gulshan-e-Iqbal

Usage Rate: Varies but averagemonthly basis Usage Situation/ occasion: Get rid of unmanageable hair Brand Loyalty: good Psychographics: reading books, Interested in

information

seeker, likes watching TV and photography.

Cognition

Personality Traits: Introvert, Carefull in making decisions, reserved, considers family members for opinion

Benefits

Wanted:

quality,

reliability,

healthy, shinny, silky, smooth hair Level of involvement: very high. Awareness Alternatives: Yes About the

VALS: High resources, high innovation, thinker. Lifestyle: The consumer seeks opinion of her family members while making decisions.

Frequently engaged in family gatherings Believes in looking simple yet presentable.

CUSTOMER MOTIVATION: In reference to the Maslows hierarchy of needs, our customers fall in the category of satisfying their Ego needs and self- actualization needs. Customer 1: The underlying motivation for this customer is her unsatisfied needs to secure a position of an achiever. As this customer is high innovator and also have high resources to satisfy her needs. She is outgoing, sophisticated, and a mix of ideal private self-and ideal social self. She has a goal oriented life style focusing on both her professional carrier as well as her family. She wants to brand herself in social gatherings with a premium brand in order to be proud of using premium services from well-established and expensive brands to show her success among her peers and social circles. According to the model of motivation the underlying need of the customer is to have noticeable hairs among social circle. She wanted to have a combination of satisfying her needs to have fun as well as being centre of attention possessing different hair color shades. Since hair highlighting is a new trend to go for having different hair color look. She wanted to make her hair color more interesting but that could not directly affect her personality. Since the customer have already took services from Rush, London and later changed her geographical location, now she desired to have the same level of satisfaction to go for highlights that would have same result as previously. This anxious attitude made her to search for a hair care service having same attributes and possessing both functional and emotional benefits. This is the tension and drive that was imposed on her and she went for searching. Her traits of egoistic approach has rendered her to identify the hair care service of Mona J from her contacts, friends, family, and colleagues and her perception of attaining the same fulfillment of her satisfaction in getting her hair highlights done made her to achieve the goal. She has accomplished the product specific goal and took hair highlights from Mona J. in this way, customer has fallen under the model for motivation.

Attributes

Functional consequences

Psychosocial consequences

Value

Highlighted hair colors of own choice

Indifferent beauty

Admiration from people & Selfconfidence

Self-esteem

Customer 2: Our second customer is a believer. She is conservative and tends to select the brands which are wellestablished and within her resources. But yet she is outgoing and knows very well how to manage her resources and underlying deeds effectively. She is less risky and traditional but also wants to move well in her social circle and have super egoistic approach towards using services or brands. She is believer, and makers. She is also focused on reliability and quality of brand and took opinion from her peer. She wanted to achieve the same level of satisfaction and underlying motivation from Saqib and Sabihas as she used to with Saminas. As this customer is less on innovation but has strong emotional affect as she wants to look good and wants free from frizzy hairs. She is less caring about brands but wants similar quality of services as her past experience. She also wants to gain fame in her surroundings, her friends, and colleagues and is keen to hear appreciation from others. According to the model of motivation the underlying need of the customer is to have noticeable hairs among social circle. She wanted to get her frustration out by permanent straightening of her hairs as she could not manage her frizzy hairs well at her workplace. Earlier the customer took services from saminas but ultimaletly she had to switch to another service centre as saminas has moved to foreign country. She heard from her fellows that For saqib and sabihas offer similar quality of services and beautiful lon-term hair straightening as that saminas in high prices. Her passionate approach towards goal accomplishment drives her to use the saqib and sabihas services to obtain her optimim level of satisfaction. Hence the customer was delighted thru the achieving goal and thereby reduction in her tension which has brought customer delight. Considering the means-ends chain model,

Attributes

Functional consequences

Psychosocial consequences

Value

Free from frizzy hairs

Silky soft hairs Sensual look

Social acceptance Well managed hairs & time self confidence

Self-esteem

Decision-making process:
Consumer 1

External influence -24 year female MBA, earning 30,000, Sec A, independent, decision-maker, innovator, risk taker, media exposure, status conscious - -ou Internal influence influence - Personality-Ego, extrovert -Emotional appeal (arousal & Pleasure seeker) -Product attribute driven by cognitive component

Experiences Acquisitions

Decision process styles Problem identificationNeed for same quality highlights as from Rush London Information Search-Peer review, internet search Evaluation of expected outcome risk taking Purchase-services of highlights taken Post purchase behavior-looks forward for repeat purchase

Life styles

-sophisticated Desire/ Needs

Experiences Acquisitions

Consumer 2

External influence -28 year female BBA, earning 15,000, Sec upper middle class, decision-maker, less innovator, less risk media exposure, peer reviews, quality conscious , believer and maker

Experiences Acquisitions

Decision process styles Problem identificationNeed for same quality hairs rebounding highlights as from Saminas Information Search-Peer review, internet search Evaluation of expected outcome based on peers experiences Purchase-services of hairs rebounding Post purchase behavior-very satisfied and repeat purchase attitude

Life styles

-sophisticated
Desire/ Needs

Internal influence influence - Personality-Super Ego, -Emotional appeal (arousal) -Product attribute driven by effective component
Experiences Acquisitions

CUSTOMRER BEHAVIOUR: This research explores the relationship between customers' loyalty and satisfaction with their hair care professionals. Although the marketing literature is stuffed with studies that examine the interaction between service providers and customers, the extant literature is almost silent regarding hair care service providers and their clients' loyalty and satisfaction. Research indicates that hair care providers need advanced salon skills to provide their diverse customers with the latest styles. Therefore, basic knowledge about hair care is a necessary but insufficient condition for customer satisfaction in the hair care industry. We also found that after

clients have had several visits to the salon, customers and hairdressers develop a bond of trust that may lead to customer satisfaction. Both parties enact authoritative stances by raising questions, making suggestions, and ratifying or objecting to hair-care recommendations. However, it is our observation that some hair care providers resent negative verbal customer feedback and do not feel appreciated for the time and energy required to achieve and maintain specific hairstyles or services. This relationship is described as client-stylist negotiations. Often clients may want to choose a look or style that may not promote healthy hair or will not suit them, since some customers may be more concerned with instant gratification than long-term hair care and healthy hair considerations. Although brand loyalty is a well-researched inquiry, in this study we define brand loyalty as "a deeply held commitment to rebuy or repatronize a preferred service consistently in the future, thereby causing repetitive same-brand or same brand-set purchasing, despite situation influence and marketing efforts having the potential to cause switching behavior. Thus, consumers continue to buy services that provide them some degree of satisfaction and utility. We have found that consumers switched brand (or service providers) due to the influence of price variety and product-related features. MARKETING IMPLICATIONS: Brand performance is dependent upon utilitarian value, hedonic value, brand trust, brand affect, purchase loyalty, attitudinal loyalty, market share and relative price. Based on the previous discussion, we propose the following: 1) There is a positive relationship between customer loyalty and satisfaction, therefore hair care service providers should maintain a good relation ship with their clients which will help to promote customer loyalty. 2) They should also focus on client comfort. Service provider interaction is positively related to customer loyalty and satisfaction. Consequences of client comfort can include increased disclosure, confidence, trust, commitment, self-esteem, reduced perceived risk, satisfaction and improved relational exchange. 3) Service quality has been defined as a form of attitude, related to but not equivalent to satisfaction that results from the comparisons of expectations with performance. In order to produce quality service, hair care providers must have the required skills and knowledge to perform the service. Hair care providers must be consistent in their performance. 4) Hair quality is positively related to customer loyalty and satisfaction. The hair care atmosphere is defined as an enjoyable service environment that is experienced by the customer "servicescape" and it may have a profound effect on customer satisfaction, especially if clients spend a substantial amount of time at the facility, which is true of

barbershops and hair salons. We conjecture that atmosphere, timeliness, and scheduling will be positively related to loyalty and satisfaction. 5) In addition, we also advance that customer satisfaction may mediate the relationship between customer loyalty and its antecedents. Thus, we will evaluate the following hypotheses: 6) Timeliness will be positively related to loyalty and satisfaction. 7) Scheduling will be positively related to loyalty and satisfaction. 8) Satisfaction will mediate the relationship between customer loyalty and its antecedents (a. provider interaction, b. hair quality, c. timeliness, d. scheduling, and e. atmosphere). DISCUSSION Consistent with our research we found that the antecedents (provider interaction, hair quality, timeliness, scheduling, and atmosphere) and loyalty and satisfaction were positively related. Loyalty was positively related to satisfaction . We also found that hair quality, scheduling, and satisfaction positively influenced loyalty. We found that satisfaction mediated the relationship between customer loyalty and two antecedents, hair quality and scheduling. Thus, the level of satisfaction may enhance the hair quality-loyalty and scheduling-loyalty relationships among customers. Satisfaction did not mediate the relationship between loyalty and the other antecedents (provider interaction, timeliness, and atmosphere) in the model. In today's fast-paced world, appearance is important to both men and women. Hair care providers are well aware of the importance of great service and customer loyalty; however there is little empirical information from the customer's point of view. In the hair care profession it seems that verbal feedback is more readily accepted as opposed to more formal surveys and questionnaires, this study provides empirical evidence demonstrating the importance of hair quality for women and scheduling for women. PROMOTIONAL STRATEGIES: Since the respondents have the personality as status conscious, innovators/believers our promotion should not focus on fancy and extravagant promotions rather focus should be on product features which content with the need of the customers which are trying to keep the basic values system intact at the same time going out and achieving what one desires. Targeting should be done through word of mouth, social networking sites and uploading procedure videos.

Promotion should focus on complete hair care solutions and not specific to the particular service. The brand name and logo should bare a modern and trendy appeal which will strike the target market. This will also help in building better perception of the brand. Since the customer have the self concept of Actual private self the promotional campaign should show a confident, independent women with attractive shiny hair proclaiming it the best. The customers also have the self concept of Ideal social self we can also make a promotional campaign which shows friends/collegues/envying admiring the hair quality of the central character. CONCLUSION Using the current research we investigated the mediating effects of customer satisfaction on the relationship between customer loyalty and its antecedents. Satisfaction mediated the relationship between customer loyalty and two of its antecedents, hair quality and scheduling in our model. Customer satisfaction did not mediate the relationship between customer loyalty and three other antecedents (provider interaction, timeliness, and atmosphere). This study represents one of the first to examine the mediator effects of customer satisfaction on the relationship between customer loyalty and its antecedents in the hair care provider industry. Another contribution of this study is that it provides additional evidence on the importance of examining mediator models, which may provide a sensitivity analysis at the individual level.

Findings from this study have important and practical implications. Salon owners may need to consider hair quality and scheduling in order to better satisfy customers, generate customer loyalty, and maximize profits. In addition, to be satisfied our findings indicate that women customers are more concerned with quality and scheduling flexibility. The hair care service industry is evolving in a very dynamic market and client retention is critical. Identifying the primary factors that encourage customer satisfaction, loyalty and retention can make a very important contribution to the financial success of hair service provider organizations as well as individual hair care professionals.