Consumer Behavior Individual Assignment

Submitted to Prof: Neena Sondhi

Submitted by: Naval Maheshwari

Naval

Table of Contents
Single Nest old couple.................................................................................................................................. 2 Brief Introduction of the couple 1: ........................................................................................................... 2 Purchase Decision of Medical Insurance................................................................................................... 2 Last Holiday planned:............................................................................................................................... 2 Purchase Decision of clothes: ................................................................................................................... 3 Differences in purchasing decisions from their past life............................................................................ 3 Full Nest 1 Family: ....................................................................................................................................... 4 Brief introduction of the family 2 ............................................................................................................. 4 Purchase Decision of Medical Insurance................................................................................................... 4 Last Holiday planned:............................................................................................................................... 4 Purchase Decision of clothes: ................................................................................................................... 5 Differences in purchasing decisions from their past life:........................................................................... 5 Analysis of the Similarities and Differences: ................................................................................................. 6 Consumer Decision Making Process: ........................................................................................................ 6 Influence of Various factors (internal /External) on the purchasing behavior:........................................... 6 Marketing Implications for the marketer based on the above analysis: ........................................................ 7 Word of Mouth Publicity:......................................................................................................................... 7 Small knowledge awareness campaigns: .................................................................................................. 7 Introducing more price points .................................................................................................................. 7 Advertisements that use Associative Reference Groups ........................................................................... 7 Exclusive medium ranged apparel stores for family buying: ..................................................................... 7 Travel Companies focus on short holiday packages: ................................................................................. 8 Exclusive Promotional Schemes during festival Seasons: .......................................................................... 8

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Single Nest old couple: Mr. Rajkumar Saxena and Mrs. Asha Saxena
Place:Aligarh

Brief Introduction of the couple 1:

Mr. Rajkumar Saxena is a service man. He is working with State bank of India for the past 33 years. He has two children, one boy and one girl. His daughter is married and is living in Dedradun where as son is currently working in an IT company in Noida. His wife Mrs. Asha Saxena is a house wife. They belong to a middle class family with average income of Mr. Rajkumar Saxena lying close to 5.0 Lakh per annum. Now a days since both children are living out of Aligarh, only Mr. Rajkumar and his wife is staying in their house in Aligarh. Their house is situated in a very posh locality of Aligarh. On asking about hisannual Income Mr. Rajkumar said that comparing the pay- standards of other banks, SBI pay scale is little less but since it is a semi government organization, work load is little less. There is a sense of security and less headache. His social circle consists of his colleagues from SBI. Now days he is enjoying a good reputation among other employees of SBI which he has earned with his hard work and honesty in the past 33 years.

Purchase Decision of Medical Insurance:Mr. Rajkumar has taken a full medical

coverage scheme for each and every member of his family. He told me that State Bank of India has very good medical insurance scheme for its employee under which every employee of SBI is fullycovered for all its medical expenses whereas other family members like spouse and dependent children are covered upto 75% of all medical expenses. Apart from this he has taken Rs 5 lakh medi-claim insurance from HDFC life insurance for his spouse and his both children. On asking about why he has purchased an additional medical insurance, he told that actually one of his close relative is working with HDFC insurance department. He only recommended him about this scheme. He trusted so much to his close relative that he even was not aware about all the terms and conditions of his medical insurance plan. However he said that with cost of medical expenses increasing exponentially, there is no harm to have more than once insurance scheme.

Last Holiday planned: Mr. Rajkumar Saxena is a bank employee. He said that in his bank
there is something called Leave Travel Allowance (LTA) which is due in every two years. According to it, Bank will pay the to and fro charges for a specified distance to his employee and for his family members. Employee only needs to take care of other expenses. This enabled Mr. Rajkumar to visit number of places across India in the past years with his family. He said he usually did not go alone for a family trip. Usually they were accompanied by another family of his close friend. He said although for the past 4-5 years his family did not planned for any holiday trip but he do remember about theirtrip of Jagganath Puri which they planned in
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2006 June.He said the trip was grand success as all family members including his wife and children enjoyed a lot. He even showed me some snaps of that trip. The place was decided by the mutual consensus of both the families. And once destination was finalized train reservations and other arrangements were done well in advance so that there should not be any kind of last minute hassles. He said(in a laughter tone)that since he belongs to a middle class family, he cannot plan some exotic holiday for his family and thus he always preferred to go places where there was something for both the adults and as well as for children.

Purchase Decision of clothes:He said normally he purchased clothes with his wife.
Usually his wife only does shopping for him as well. At this age he mostly preferred to buy cloth from the market and get it stich from the tailor. He said wearing stitched clothes suits him better both economically and fitting wise. He said if his wife needs to shop for herself, she usually goes with some neighborhood lady. Although during some special occasions like Diwali or if there is some marriage in the family he do not mind going for shopping with his spouse or family. Asking about his children he said till the time they were in Aligarh, they mostly shopped with their friends and now when they are living out of station, going shopping with them is out of context.

Differences in purchasing decisions from their past life: Mr. Rajkumar said that
previously when his son and daughter were living with them, it was quite easy for them to decide what to purchase and what not to purchase. He said both of his children are computer savvy and for anything needs to be purchased they used to seek information about the same from internet. Apart from this,previously they always looked for saving bits and pieces of money for their children so as to use it for future use, mainly because at that time their children were totally dependent but now when his son start earning that liability is little bit reduced and now his son would not allow them to compromise with quality for price. Another difference which they found in purchase pattern from past is that in todays world you just cannot trust anyone, whether you personally know the person or it is a product endorsed by famous personality. Everybody knows that it is all manipulated with money. Thus you can only trust either you family members or your very close reference group.

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Full Nest 1 Family:Mr. Amit Rathi and Mrs. Aarti Rathi

Place: Aligarh

Brief introduction of the family 2: Mr. Amit Rathi,34 year old is a Service man and a
Business man both. He as on official record is in clerical department of Irrigation department of Uttar Pradesh Aligarh Branch but apart from his service he also runs several small businesses either alone or along with some partners. Mrs. Aarti Rathi is a house maker. They have two children, one 8 years old daughter Manya and one 5 year old son Pranav. Both of them are studying in one of the famous school of Aligarh. Mr. Amit Rathi is a very aggressive kind of person. He usually takes lot of risk in various businesses. He think that if you can work hard till the age of 40-45 years, then there would not be any problem after wards. He said that it is always better to prepare yourself before for any circumstances instead of asking someone for help, especially for money.

Purchase Decision of Medical Insurance:Mr. Amit Rathi is a kind of person who

understands that life is full of uncertainties so it is always better to prepare beforehand yourself. As a result he has taken life insurance schemes for all his family members. He said he does not want to take any risk and if by paying a small amount of premium, he can get the satisfaction of mind, why can t you avail the facility. He has LIC policy covering accidental coverage upto 5 Lakhs for which he is paying quarterly premium. He clarified that LIC is the most trusted LIC insurance one could have. Another reason for him to choose LIC was his friend s prior bad experience with some private institution.

Last Holiday planned:He said he likes to go for short duration trips of 1-2 days. .It is
because of the fact that apart from his service he is running some small businesses and he does not want his business to suffer because of his holiday trips. He said normally his family along with his sister s family planned trips for Mathura, Agra etc. places which can be covered within 1-2 days. However he also went to vaisho-devi quite a number of times. He said we usually hired one taxi like quails or Scorpio and went for the trip. According to him hiring a taxi is very comfortable for him because it gives him full freedom of deciding where to go and at what time to go and how long to stay. Not only this he said since his children are small so it even good from this point of view that he can stop the taxi anywhere he wants in the middle of the road in case if required. He said recently his family returned from the Govardhan after giving 21 kms long parikrama . He said they were total 8 people including his sister s family and they hired a quails this time. He said trip was very good and even his children enjoyed a lot. He said taxi they hired must be of some known and trusted source.

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Purchase Decision of clothes: He said for purchasing of clothes he usually go with his
wife. He said he normally avoid going to market during weekends. One major reason why he normally goes with his wife during purchase of clothes and other thing is that since Aligarh is not a very big city, there are many shop owners who know him quite well either because of his office terms of because of his business purpose. As a result of this, he sometimes gets quite a good discount from the shop owner if he accompanies his wife to that store. They normally shop 3-4 times a year in addition to special shopping during festival season where it is almost mandatory for him to buy new clothes at least for his children. It is usually a joint decision of his and his wife as what to purchase and from where to purchase. He normally decide budget before going to the shop so as to avoid after math confusion with his wife. Normally we see ads in the television and newspaper to find out what is latest available in the market and tries to buy them if they are available within budget.

Differences in purchasing decisions from their past life:

Mr. Amit Rathi told us that when he was newly married they used to spend a lot more as compared to what they are spending right now for things like holiday trips and Clothes. But when we have kids, number of trips reduces considerably. It is because now they have much more responsibly as compared to before. Previously what happened was as soon as he himself or his wife saw any new ads regarding newly launched product or any movie, they went for it. But now they think twice before actually buying it. He said previously it was much more independent decision making process for him but now he has to take his wife s decision into account because usually she is the one who thinks more of savings and future. He said now he inquires a lot more before buying anything as compared to past. This is because the level of trust among people has gone down. Now days you cannot trust any advertisements of promotion schemes of nay company because most of the time they just cannot keep their promises. However even then they have to believe little bit in these advertisements because they do not have any other concrete source of information. His peer group is also lacking in the information like his family.

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Analysis of the Similarities and Differences:

Consumer Decision Making Process: In both the cases we identified that CDM process
involves lot of external influences and factors. In the Single Nest Old couple case , parents are more dependent of their children and other close relative whereas in the full nest II case , family is most influenced by the Television and other Media Advertisements. However for both the families trust plays an important in CDM process. For both the families, both, the product and the purchase involvement are high. This is because of the fact that for both the families, money is always a constrained. So, even if the product is not costly, they end up spending money very meticulously and wisely which makes it high involvement product. Information search and Evaluation criteria for both the families arelimited. Single Nest II family depends on their children for the information whereas Single Nest Family depends on the TV commercial and his peer group. Purchase decision for Amit Rathi Family matters more than Mr. Rajkumar Saxena family. It is because of the fact that Mr. Amit Rathi and his wife are not much brand conscious and does not bother trying other cheaper alternative where as Mr. Rajkumar Saxenadoes not mind buying slightly costly product because now they do not have much liability left on their shoulders and they also have one more source of income. Most of the time choice of high involvement product for both the families is attribute based. They followed disjunctive decision making rule.

Influence of Various factors(internal /External) on the purchasing behavior:

Both the families belong to Indian Culture and north Indian sub-culture. Thus, differences based on culture and sub-culture is minimal in both the cases. However because of the difference in ages and income there purchasing pattern differs slightly. For E:g Single Nest Old couple is now not ready to compromise with the quality where as full nest II, even though belongs to younger generation, is not much brand conscious. It s main reason lying in the difference in incomes for both the families as well as the kind of liabilities the head of the family have on its shoulder. But still, economic risk is high for both the families. .Also, Social risk for both the families is high because both the families belong to middle class where society still plays a very important role. Family structure is also responsible for the final decision taken for e.g. In Single nest old couple family , decision is now being taken considering the choice of children while for Mr. Amit Rathi family, head of the family i:e Mr. Amit Rathi is the whole sole responsible person. Presence of reference is available for both the families but for Mr. Amit Rathi, influence of reference group is more. This is because of the age factor. Also Mr. Amit Rathi always tried to use his networking and social skills to get some discount from the shopkeepers where as this phenomenon is missing in Mr. Raj Kumar Saxena family which may be because Mr. Rajkumar is has a great reputation in his social class and society which he has earned in the past 33 years.

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Marketing Implications for the marketer based on the above analysis:

Word of Mouth Publicity: Both the families are heavily dependent on the external
information before purchasing any product. Thus it is highly recommended for the insurance companies to indulge in some word of mouth publicity. Members of both the family paid high level of significance on trust and values. Thus companies need to create a loyal and trusty relationship with the customer so as to create a positive brand image and can win the confidence of the customer. Especially for products like Medical insurance which is a high involvement product for maximum people because of the lengthy premium periods and other features, positive word of mouth is very important.

Small knowledge awareness campaigns: Most of the people especially middle class
families want to have a medical insurance of their families, but because of the lack of information of proper suitable schemes suitable for them, they could not able to buy the same. Thus companies need to run small knowledge spreading campaign in which they target all the middle and upper middle class families and make them aware as what is available in the market and which plan s suit better as per the requirements of the particular family.

Introducing more price points: It is been observed in the above analysis that although
middle class family want to purchase branded clothes but sometimes they were priced so high that they do not fit into their budget . Thus if various apparel companies can introduce one more price point which is little cheaper than their existing one, may be they can increase their target market and can generate high revenues. However, this can come up as a brand dilution exercise for the companies. Thus, companies need to decide very strategically whether they should go for this option or not.

Advertisements that use Associative Reference Groups- The respondents are not
very much affected by brand ambassadors for various product categories. In fact they are affected by their close relatives and people like them in general. Therefore marketers can use advertisements that represent the general demeanour of these associative reference consumers making the target customers believe that the product is for them.

Exclusive medium ranged apparel stores for family buying: Various apparel
manufacturing companies should consider the fact the in tier II cities, still husbands accompany their wives for clothes shopping and during their particular visit they shop for all the members of the family i:e men, women and kids. Although this family shopping facility is available in metro cities in various malls but tier II cities are still untapped with this concept. Thus companies which aretargeting this middle class market segment of Tier II cities should open some exclusive medium ranged showrooms where families can find everything under one roof.
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Travel Companies focus on short holiday packages: A middle class family, especially if
is a business family is always time pressed to go for holiday trips. And whenever they plan any trip, they would like to have their own personal taxi so that they can move around with their comfort. Thus travel companies can focus on this market segment and can come out with some 3-4 day exciting holiday packages with a personal taxi assigned to the respective family. Another way of promoting for this segment can be done by providing discount on subsequent trips. E.g. family first time availing the taxi facility will get some discount if they plan another trip within some stipulated time interval.

Exclusive Promotional Schemes during festival Seasons: It is observed in the above

analysis that full nest II families who have kids in their homes tend to shop compulsory during the festival seasons. Thus marketers can come out various promotional schemes to target those customers who are little bit price conscious and always look for best deals in the markets.

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