Research Topic:

Factors Affecting Consumers Impulse Buying Behavio r

Subjec t:

Strategic Marketing Management

Submitted by the Group Members:

Yaqoob Ullah 5809

Submitted to:

Sir, Mr. Shahzad Khan

City University of Science and Inf ormation

Technology

Factors Affecting Consumers Impulse Buying Behavior

Abstra ct
Impulse Buying is the kind of purchase that a consumer makes which was not planned in advance. The purpose of this research effort is to find out the different variables that affects the consumers impulse buying behavior. The impact of variables like unexpected cheaper prices, windows display, the in-store shopping environment, promotional activities and credit availability, on consumer impulse buying behavior, has been studied. The study is based on the primary data collected from the respondents of Peshawar through a structured questionnaire. SPSS software was used for data analysis. It has been found that Impulse buying is on high growth due to pricing & promotional strategies, credit card facility and store characteristics.

1Introductio n
1.1-Background of the study Impulse buying phenomenon has been studied since decades because its an important source of revenue for retailing; 30-50% of all purchases can be contributed by impulse purchases. Markets are the places where people from different social classes come and purchase different kinds of products. This purchase is either planned or unplanned. People have been noticed who makes a purchase which was not in their shopping list but were persuaded by either the attractive price or store designs or displays or availability of credit. This kind of unplanned purchase is termed as impulse buying. Researchers are trying to find out the different factors that create impulse buying and this study is also an effort made to add something new to the existing knowledge. 1.2-Problem statement What factors can make consumer go for impulse or unplanned purchasing? 1.3-Research Questions What is Impulse Buying? What Drives Impulse Buying? Do unexpected cheaper prices have an immediate effect on impulse buying behavior? Is the In-Store Shopping environment a responsible for impulse buying? Does credit availability urge consumers to go for impulse buying?

1.4-Objective of the study To find out the factors causing the impulse buying of the consumers in Peshawar.

1.5-Scope of the study Scope of the study is confined to impulse purchase. Respondents are selected from Peshawar. The geographical area of the study is restricted to Peshawar city only. 1.6-Significance of the study This is very important to find out how retailers make high volume of sales through impulse buying and how this study will help them make strategies which will affect consumers impulse buying behavior.

2: Literature Review
2.1-Definition of Impulse buying: An unplanned purchase caused by an exposure to a stimulus and decided "on-thespot." Unplanned Purchase Engel, Kollat and Blackwell (1968) have defined an unplanned purchase as: A buying action undertaken without a problem having been previously recognized or a buying intention formed prior to entering the store (p.483). Exposure to a Stimulus Applebaum (1951) and Stern (1962) have specifically included "exposure to a stimulus" in their definition of an impulse purchase. Impulse buying refers to as when you purchase something you dont have in mind or on your shopping list. On The Spot On The Spot is referred to the time and location which is the third part of impulse buying. Initially, the researchers (cf. Engel et al. (1968) identified the element of location in impulse buying and very recently, many researchers proposed

that both location and time are the elements that are likely to differentiate impulse buying from non impulse buying. Settle and Alreck (1986) admitted on page 335 that: The whole Impulse purchase decision takes place on sale point and happens within few seconds of time. Marketing and consumer researchers have been trying to know the concept of impulse buying for forty years and everyone has defined it in their own perspectives, some of which are described here: Rook (1987) defined Impulse buying as a desire to purchase aroused by a forceful motivation that a consumer feels. Han (1991) defined it for fashion oriented people as the desire to purchase is aroused by involvement in fashion. Beatty and Ferrell (1998) suggested that the more time is available, the greater the likelihood that a consumer will make a purchase. Cha (2001) proposed that Impulse buying behavior regarding fashion commodities are mostly concerned with patterns like chaste and repeated emotions. Babin (2001) reported that emotions highly influence the consumers purchase and spending intentions. These emotions may be the features of the items, customer self interest, their evaluation and the preference they give to shopping at stores.

Park (2006) included that overall impulse buying behavior has a positive relationship with the fashion oriented impulse buying.

2.4 Elements Which Drive Impulse Purchase Mood of customer Price Store designs and displays Credit availability Attractiveness of a product Culture Brand name Advertisement Quality Variety Fashion and trends

2.3- Unexpected Cheaper Prices and Discounts and Watching Buyers Buy According to previous researches, 88% of impulse buying is affected by the perception of lower prices when visiting the stores. Consumers use their mental accounting whenever they purchase. The unexpected lower prices and savings create positive emotions in their minds which results in a positive response towards that.

The marketers use many tools to make consumers buy on impulse. It includes price promotions such as buy one get one free offers, discounts and coupons and in some stores cash rewards. Many consumers admit that their desire for shopping more and more is triggered by lowest unanticipated prices as well as attractive discounts on products. 2.4: The In-Store Shopping environment: Most of the researches have reported that one of the major determinants of impulse buying behavior is the in-store shopping environment. The in-store designs and displays, background music, well-mannered and friendly personnel, in-store wall ads and promotion displays, cleanliness as well scents are all add up to in-store shopping environment. Zhou and Wong (2004) divided the in-store shopping environment into 2 separate effects; the promotional effect and the atmospheric effect. Promotional effect includes discounts, coupon and cheaper prices while atmospheric effects includes in-store shopping display and designs, advertisement, sales personnel and buyers buying or crowding.

2.4: Credit Card: According to Roberts and Jones (2001), use of credit cards are highly contributed to the volumes of impulse purchase. Credit availability is seen to have caused higher sales because consumers are less concerned with the payment at the time shopping as compared to the time when they have to pay the credit. Credit cards provide the facility to buy on credit and also its more convenient and easy to use. According to Tokunga (1993), heavy credit users have been found to be less price conscious as compare to the people who buy on cash. Deshpande and Krishnan, (1980) reported that credit cards even leads to the purchase of very high priced items. Jones (2001) also explained that consumer spending is highly facilitated by the use of credit cards.

The impulse buying behavior is a dependent variable while Price, promotion, instore designs and displays and credit availability are Independent variables.

2.5- Research Hypothesis H1- There is a positive relationship between consumers impulse buying behavior and unexpected lower prices. H2- Consumers impulse buying behavior and promotional approaches has a positive relationship. H3- Consumers impulse buying behavior and credit card has a positive relationship. H4- Consumers impulse buying behavior and in-store design & display have a positive relationship.

3. Research Methodology
3.1 Sampling The shopping area of Peshawar is selected as a sample group. Sample size is 120 respondents. 3.2 Instrument Data has been collected through Questionnaire which included close ended Questions. 3.3: Data Analysis Methods: SPSS (Statistical Packages for Social Sciences) software has been used to data analysis.

QUESTIONNAIRE

EVALUATING FACTORS AFFECTING IMPULSE BUYING BEHAVIOUR

Thank you for participating in the Survey regarding Impulse buying. Buyers are usually seen to have purchased products which they have not planned and this phenomenon of unplanned purchasing is known as impulse buying. Kindly identify the factors affecting your impulse buying behavior in the below Questionnaire.

PERSONAL DETAILS
(The given information will not be disclosed in public and will only be used for research purpose)

NAME: GENDER OCCUPATION: MONTHLY INCOME:

Impulse Buying 1) I am actually an impulse buyer. Yes No Dont Know 2) I purchase only what is on my shopping list. Yes No Dont Know 3) Sometimes I shop to feel better. Yes No Dont Know 4) I feel regret after I make an impulse purchase. Yes No Dont Know Pricing& Promotional strategies 5) Attractive price of products affects my impulse buying behavior. Yes No Dont Know 6) Special offers or discounts influence my shopping.

Yes

No

Dont Know

7) After sales free gifts pushes me to go for impulse buying. Yes No Dont Know 8) My shopping is influenced by advertisement. Yes No Dont Know Windows Displays & Designs 9) I usually pay attention to shops window display and design. Yes No Dont Know 10) I am interested in shopping at shops having well designed windows. Yes No Dont Know 11) Shopping environment usually enhances my shopping bills. Yes No Dont Know Credit Card Availability 12) Availability of credit card facility increases shopping. Yes No Dont Know 13) I use credit card to buy impulse. Yes No Dont Know 14) Its always a fun to buy on credit card. Yes No Dont Know 15) Credit card availability always enhances my shopping bills. Yes No Dont Know

4: Research Analysis
Variables Frequencies: Primary data was collected from total of 120 respondents out of which only 108 responses were received and 12 were missed.
Gender Frequency Percent Valid Percent Cumulative Percent male Valid female Total 99 9 108 91.7 8.3 100.0 91.7 8.3 100.0 91.7 100.0

The above table shows that out of total 108 respondents, 99 were male with a valid percentage of 91.7% and 9 were females with a valid percentage of 8.3%, which shows a greater percentage rate of males than females.
Occupation Frequency Percent Valid Percent Cumulative Percent student Valid non student Total 89 19 108 82.4 17.6 100.0 82.4 17.6 100.0 82.4 100.0

Out of 108 respondents, 89 were students with a percentage of 82.4% and 19 nonstudents with a percentage rate of 17.6%.

Monthly Income Frequency Percent Valid Percent Cumulative Percent 10000 to 20000 Valid 21000 to 30000 31000 to 40000 Total Missing Total System 28 15 9 52 56 108 25.9 13.9 8.3 48.1 51.9 100.0 53.8 28.8 17.3 100.0 53.8 82.7 100.0

The frequency regarding monthly income shows that respondents having monthly income from 10000-20000 are 28 which makes 25.9%, from 21000-30000 are 15 which makes 13.9%, from 31000-40000 are 9 which makes 8.3%. There are 56 respondents missing which didnt give any response regarding their monthly income and no tick mark on any of the options.

Descriptive Statistics:
The descriptive statistics of demographic factors and other variables are as following;
Descriptive Statistics N Gender occupation Mon.Incm Valid N (listwise) 108 108 52 52 Minimum 1.00 1.00 1.00 Maximum 2.00 2.00 3.00 Mean 1.0833 1.1759 1.6346 Std. Deviation .27767 .38253 .76770

The descriptive statistics of demographic factors shows the maximum and minimum value, Mean and Standard deviation. Gender respondents number is 108, its minimum value is one and maximum value is two with a mean of 1.08. The mean values more lies to the male side which is one. The standard deviation value is 0.278. The occupations total respondents are 108, its minimum value is one and maximum value is 2. The mean value of occupation is 1.176 which lies more on the male side whose value is one. The standard deviation value of occupation is 0.383. The monthly incomes total respondents are 108. The minimum value of occupation is 1 and maximum value is 3. The minimum 1 value stands for respondents having monthly income from 10000-20000 and the maximum value of 3 stands for respondents having monthly income from 31000-40000. The mean value of monthly income is 1.635 which more lies to the 2nd value means that responds average income is near from 21000-30000. The standard deviation value is 0.768.

Multiple Regression analysis:

Multiple regression analysis is used when there is one dependent variable and two or more than two independent variables. The following is interpretation of the multiple regression analysis.

Model Summary Model 1 a. R .447a R Square .200 Adjusted R Square .169 Std. Error of the Estimate .99999

Predictors: (Constant), , WDndD, CA, PndPstrg

The model summary table of impulse buying and window dressing and design, credit availability and pricing and promotion shows that the value of R is 0.447, which means that there is 44.7% relationship between dependent and independent variable. The R square value is 0.200 which means that the independent variable has brought 20% variance in the dependent variable.

ANOVA table Model Regression 1 Residual Total a. Dependent Variable: IB b. Predictors: (Constant), WDndD, CA, PndPstrg Sum of Squares 25.768 102.997 128.766 df 4 103 107 Mean Square 6.442 1.000 F 6.442 Sig. .000b

In ANOVA table the value of F shows the significance of the whole model. Here the value of F is 6.442 which is greater than 3.78 and also the significance level is less than 0.05 which shows that the model is significant.

Coefficients table Model Unstandardized Coefficients Standardized Coefficients B (Constant) PndPstrg 1 WDndD CA 4.594 .350 .278 .144 Std. Error .704 .094 .086 .074 .352 .302 .183 Beta 6.529 3.709 3.235 1.96 .000 .000 .002 .05 t Sig.

a. Dependent Variable: IB

In the coefficients table the value of t-test for price and promotion is 3.709 and p value is less than .05 which is significant, therefore we reject the null hypothesis and accept the alternative hypothesis. The value of t-test for window dressing and design is 3.325 and the p value is less than .05 therefore we accept the alternative hypothesis and reject the null hypothesis. The value of T for Credit availability is 1.96 and the p value is .05 therefore we reject the null hypothesis and accept the alternative hypothesis.

5: Conclusion and Recommendations

Impulse buying is a sudden and immediate response to purchase a specific product with no pre-shopping intentions. T-test was used in order to find out the affect of the different variables on consumers impulse buying behavior. The findings of the study indicate that pricing strategies, store characteristics, credit availability and promotional activities mostly influence the impulse buying behavior of consumers at Peshawar.

Sellers and marketers are recommended to offer different discounts seasonal cut off in prices in order to enhance the impulse buying behavior. They should provide facility of ATM in their shops in order to facilitate the credit or visa card holders. In-store environment should be made attractive through windows attractive designs and displays, scents, lights and color. Promotional activities should be enhanced in order to create desire for that in consumers and also make them feel safe after purchasing it.

References
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