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Research Report on Impulse Buying

SUBMITTED TO:
SIR ANIS HASSAN

PREPARED BY:
QURATULAIN RIAZ
MEHREEN RAZA
SIDRA TANWEER
NAJMA JAVED

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Research Report on Impulse Buying

INTRODUCTION
Pakistan is a growing economy with a real GDP growth rate of 5%. The real private
consumption expenditure has grown at an average rate of 7.4 percent per annum during
the last four years resulting in the emergence of a strong middle class with growing
purchasing power. This has resulted in people vying for a more comfortable and
urbanized lifestyle. The mushroom growth of coffee houses, eateries, supermarkets, etc.,
is a proof of that.

In the past three decades, much research has been conducted internationally to define to
understand the psychological, economic and retail implications of such a trend. One area
of interest has been “impulse buying”. Impulse buying occurs when a consumer
experiences a sudden, often powerful and persistent urge to buy something immediately.
The impulse to buy is hedonically complex and may stimulate emotional conflict. Also,
impulse buying is prone to occur with diminished regard for its consequences.Marketers
and retailers tend to exploit these impulses which are tied to the basic need for instant
gratification.

Recently several supermarkets have been established in the urban cities of Pakistan. The
most prominent ones in Karachi are Imitiaz, Agha’s, EBCO, Naheed, Shaz, DMart.
However, no study has been conducted in Pakistan to study the buying behaviour of
shoppers and what factors influence their decisions. Hence, the researchers have decided
to conduct an exploratory research to understand the general nature of impulse buying in
four main supermarkets of Karachi. This research will lay the foundation for future
researches.

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Research Report on Impulse Buying

LITERATURE REVIEW

Pakistan: The Research Context


According to the Economic Survey (2006-07), the real GDP growth rate of Pakistan has
been 7% per annum in the last 5 years and the per capita income has grown by 11% to $
925. The real private consumption expenditure has grown at an average rate of 7.4
percent per annum during the last four years resulting in the emergence of a strong
middle class with growing purchasing power and with increase in the working population
and simultaneous decrease in the share of dependent population has declined, the
disposable incomes and current consumption has increased. This increase in consumer
spending has led to more shopping and consequently has justified a research into the
incidence and nature of impulse purchases. Also, with changing demographic trends,
gender roles in purchase behaviour have changed considerably in urban Pakistan with
women being more active in shopping now.

Most of the researches on impulse buying behaviour have been conducted in the Western
society which is considerably more advanced than Pakistan. The objective of this
research paper is to explore the incidence of and difference of impulse buying behavior in
supermarkets in Karachi, with respect to factors such as product category, grocery bill
and number of products bought, and the shopper’s gender. More importantly this paper
will help lay a foundation to build upon for future studies on impulse buying behavior in
Pakistan.

Conceptual Framework
Cobb and Hoyer (1986) and Kollat and Willet (1967) have defined impulse buying
simply as unplanned purchasing. Rook (1987) gave a narrow and more specific meaning
to impulse buying, which included behavioral elements. The definition of impulse is as
follows
“Impulse buying occurs when a consumer experiences a sudden, often powerful
and persistent urge to buy something immediately. The impulse to buy is
hedonically complex and may stimulate emotional conflict. Also, impulse buying

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Research Report on Impulse Buying

is prone to occur with diminished regard for its consequences.” (Rook, 1987, p.
191).

The understanding of impulse purchasing was greatly improved through Stern's (1962)
identification of four distinct classifications of impulse purchasing: planned, pure,
reminder and suggestion impulse purchasing. The four categories are as follows: (1) Pure
impulse buying is a novelty or escape purchasing which breaks a normal buying pattern;
(2) Reminder impulse buying occurs when a shopper sees an item and remembers that the
stock at home is exhausted or low or recalls an advertisement or other information about
the item and a previous decision to buy; (3) Suggestion impulse buying occurs when a
shopper sees a product for the first time and visualizes a need for it, even though he has
no previous knowledge of it; and (4) Planned impulse buying occurs when a shopper
enters the store with some specific purchases in mind, but with the expectation and
intention to make purchases that depend on price specials, coupon offers, and the like.

Conceptual Definition
Based on the extant literature reviewed we have defined impulse buying as done by
Engel, Kollat, and Blackwell (1968) (as cited in Piron, 1991). Impulse buying is defined
as a buying action undertaken without the problem having been previously recognized or
a buying intention formed prior to entering the store

Operational Definition
Based on the literature review we plan to follow the following definition for the purpose
of our research.

Shoppers are asked upon exiting the store what items they purchased. For each item, they
are then asked some variant of the question when they decided to buy; before or after
entering the store. The items purchased whose decisions were made after entering the
store are impulse purchases (Bellenger, Robertson, and Hirschman 1978).

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Research Report on Impulse Buying

Pretest questioning is not used as it forces the shopper to recite formed intentions and
commit the shoppers to their intentions (Pollay 1968). The problems with the post-
purchase operational definition are that the incidence of impulse purchases may be
understated by the shopper in an effort to appear rational. However, this definition is
easier to operationalize because shoppers will be willing to give interviews once rather
than twice (before and after shopping) and it does not create the bias in the mind of the
shoppers to follow the intention that they stated in the pre-shopping interview.

Factors Affecting Impulse Buying Behavior


Marketers have long recognized the significance of impulse buying. Empirical studies
such as Consumer Buying Habit Studies (1965) and Drugstore Brand Switching and
Impulse Buying (1965) have investigated the extent of unplanned buying in supermarkets
and drugstores and showed how different the incidences of impulse purchasing are (as
cited in Prasad, 1975).The incidence of impulse buying is increasing mainly because
consumers have accepted and adapted the methods of buying to certain merchandising
innovations and due to this interrelationship of buying to merchandising, impulse buying
will only grow significantly (Stern, 1962). We offer the following proposition.

Many researches have been carried out to study the nature of impulse buying and various
factors that affect it. Impulse buying is influenced by a variety of economic, situational,
personality, time, location and even cultural factors. Previous researches have measured
the impulse buying tendency in regards to buying “things” not specifying product
categories (Beatty and Ferrell, 1998; Puri, 1996; Rook and Fisher, 1995). Researches
have also been conducted to understand the underlying motivational factors behind
impulse buying. Similarly researches have been conducted to study factors that moderate
impulse buying behavior. Consumers engage in impulse buying to satisfy hedonic desires
for fun, novelty and variety; also impulsiveness is correlated with consumer’s desires to
fulfill self esteem and self actualization needs (Hausman, 2000). Mai, Jung, Lantz and
Leob (2003) found that individualist orientation was truly related to impulse buying.
Hausman (2000) has also suggested that more impulsive consumers tend to view their
buying decisions as more laborious. Consumers’ normative evaluations moderate the

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Research Report on Impulse Buying

relationship between impulse buying trait and consumers’ buying behavior (Rook and
Fisher, 1995). Here normative evaluation may be understood as consumers’ judgments
about the appropriateness of making an impulsive purchase in a given buying situation.

Gender Differences in Impulse buying


Several previous researches on impulse buying have paid some attention to the role
gender plays in determining this behavior. These researches show that men’s and
women’s shopping behaviour differs on many levels. Peter and Olson (1999) discuss that
men and women have been found to process information differently (as cited in Coley
and Burgess, 2003), relate to and value material possessions differently, purchase
different items for different reasons (Dittmar, Beattie and Friese 1995; Dittmar, Beattie
and Friese, 1996) and approach shopping task differently (Berni, 2001; Chiger 2001).
Kollat and Willet (1967) found that women tend to engage in more impulse buying as
compared to men. It is also argued that women because of their propensity to shop more
in general, make more impulsive purchases (Dittmar et al., 1996; Rook and Hoch, 1985).
On the other hand Cobb & Hoyer (1986) stated that women are more likely to exhibit
some element of planning before entering the store, whereas men are more likely to be
impulse shoppers. Hausman (2000) did not find significant correlation between gender
and impulse buying behavior.

Transaction Size affecting Impulse Buying


Stern (1962) has hypothesized circumstances that appear to be associated with the
occurrence of the behavior. Kollat and Willet (1967) used two measures of transaction
size: number of different products purchased and the grocery bill. They found out that
the increase in size of the grocery bill and number of purchases made resulted in an
increase in unplanned impulse purchases. Therefore, we offer the following propositions.

Shopping List and Impulse buying


Studies conducted by Kollat and Willet (1967) indicated that one of the factors that
affects impulse buying is the presence of a shopping list. This however only holds true if
the transaction size is greater than 15. When more than 15 or 20 products are purchased,

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Research Report on Impulse Buying

shoppers having a list make a smaller percentage of unplanned purchases. However,


when less than 15 or 20 products are bought, the shopping list does not affect the
percentage of unplanned purchases. This was also studied and confirmed by Abratt and
Goodey (1990). In order to study the effects on the presence of a shopping list on impulse
purchase behavhior, we present the following proposition.

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Research Report on Impulse Buying

MANAGEMENT PROBLEM TRANSLATED INTO RESEARCH OBJECTIVES

Research Research Research


Problem Questions Objectives
 To study the  What is the  To study the incidence of
incidence of incidence of impulse impulse buying in
impulse purchase in supermarkets of Karachi.
purchase supermarkets of
decisions with Karachi?
respect to five  To study whether
factors.  How does incidence purchase intentions are
impulse buying vary influenced by factors such
due to the presence as the gender of the
of a shopping list? shopper, presence of a
shopping list, the number
 Does increase in the of products purchased and
size of grocery bill the size of the grocery
increase the bill.
incidence of impulse
purchase decisions?

 Does impulse buying


increase as the
number of products
purchase increase?

 Is the incidence of
impulse buying
higher among males
than females?

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Research Report on Impulse Buying

HYPOTHESES
Based on our discussion & literature review, we arrived at the following hypotheses
which we would be testing.

Hypothesis 1: There is atmost 20% incidence of impulse buying in Supermarkets of


Karachi

Hypothesis 2: There is association between gender and impulse buying behavior..

Hypothesis 3: Rate of Impulse buying increases with the size of the bill

Hypothesis 4: Rate of Impulse buying increases with the number of different products
bought.

Hypothesis 5: There is association between presence of shopping list & impulse buying
behavior.

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Research Report on Impulse Buying

RESEARCH DESIGN
Type of research
The research was of exploratory nature and involved conducting in-depth interviews of
shopper leaving supermarkets to crystallize and better understand the problem at hand
and a few factors that affect it.

Data Collection Method


Secondary Data
Research papers were studied and online libraries such as JSTOR, EBSCO Host and
Palgrave Mcmillan were visited.

Primary Data
We collected information from the subjects by means of a survey. Furthermore the major
technique that we used to approach our subjects was the intercept technique i.e.
approaching them without prior notification or appointment. Personal intercept interviews
were used to collect information in a face to face situation. The supermarkets covered
were:
 Agha’s
 Naheed
 Imitaz
 EBCO

Measurement Technique
A questionnaire was designed by the researchers to be administered during the personal
interview. Care was taken to avoid loaded, double barreled, biased questions.

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Research Report on Impulse Buying

SAMPLING PLAN

Population Definition
Men and women of age 18 and above who have shopped in super markets in Karachi in
November during day time.

Sampling Frame
Four supermarkets in Karachi were selected namely Aghas, Naheed, Imtiaz, EBCO. The
shopping parties represent SEC A classification.

Sampling Unit
One shopping party.

Sampling Method
Non-probability convenience sampling (unstratified, single stage) - any shopping party
leaving the Super store after making some purchases.

Sample Size
20 respondents from each super market – aggregating to a total sampling size of 80.

Sampling Plan
The four researchers were spilt into two interviewing teams. One of the two interviewers
was stationed at the super market exit to select a shopping party leaving the super market
after making some purchases. The respondent was qualified by determining whether they
were carrying any shopping packages and their willingness to participate in the research.
After introduction the second researcher administered the questionnaire through a
personal interview. The questionnaire was completed and filled by the researcher herself.
The interview was terminated by thanking the respondents for their participation.

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Research Report on Impulse Buying

LIMITATIONS

1. People in our country are not very used to research hence they were not very
receptive or did not know how to respond to certain questions.
2. As students, the researchers had limited amount of resources (time, money, etc) to
spend on this research.
3. This research has been conducted in a four supermarkets of Karachi the findings
cannot be extended to all the supermarkets in Pakistan. Hence the findings are
only applicable to Karachi.
4. This research focuses on the incidence of impulse buying and a few factors
affecting it such as gender of the shopper, size of the shopping bill, presence of a
shopping list and the number of items purchased. This does not suggest that these
are the only factors that influence impulse buying decisions.
5. Some other influencing factors such as in-store stimuli (communication mix, shelf
placement), consumer traits other than gender, situational factors (mood, time,
money) and normative traits of decision making have not been studied. Hence, the
findings of this study cannot be extended to those areas.

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Research Report on Impulse Buying

RESULTS
Hypothesis 1: Incidence of Impulse buying
We used proportion test to test the significance of impulse buying in four supermarkets in
Karachi. Since we have a sample greater than 30, the Central Limit Theorem allows us to
conclude that the distribution of sample means is approximately normal and this sample
Z-test is used to measure the significance of impulse buying in the four super markets of
Karachi. According to Abratt and Goodey (1990), one in five unplanned purchase
incidences must be considered managerially significant. This was used to establish and
phrase the first null hypothesis. Our results showed that the incidence of impulse buying
is significantly greater than 20%. (The hypothesis testing is shown in Appendix)

Hypothesis 2: Association of Unplanned Purchases with Gender

Column
Male Female Total
Impulse 13 36 49
Planned 21 10 31
Row
Total 34 46 80

Table 1

According to the Chi-square statistical technique used to find the association between
gender and impulse buying behavior, we found that women have more tendencies to buy
on impulse as 78 per cent of our female respondents were found to be impulse purchasers
where as only 38 per cent of the male respondents showed impulse buying tendency. This
indicates that men plan well ahead before entering shopping markets than females. They
economize on their time and efforts and stick to their needs and decisions. Females do not
plan extensively before entering and are more inclined to be attracted to in-store stimuli.

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Research Report on Impulse Buying

F / Pl M / Im
13% 16%

M / Pl
26%

F / Im
45%

Figure 1
Kollet and Willet (1967), women purchase a higher percentage of products on an
unplanned basis because they make more purchases. When the number of purchases is
held constant, men and women have the same degree of susceptibility to unplanned
purchasing. However, our analysis indicates that in Karachi supermarket, the number of
products purchased by respondents has no affect on impulse buying tendency. Thus, the
impulsive behavior in our research can be attributed to solely to gender. Women are more
susceptible to engage in impulsive behavior in supermarkets. This finding is contrary to
what was found in the study of Impulse Buying Behavior in Vietman by Mai, Jung, Lantz
& Loeb (2001). They found that men exhibited a higher impulse buying tendency
because women needed to plan all expenses carefully so that their families’ modest
income could be spent “wisely”. We did not see this happening in Karachi probably
because our respondents mainly belonged to SEC A classification having income
comfortably above the “modest” level.

Hypothesis 3: Shopping bill and impulse buying behavior


Shopping bill is also a measure of transaction size. The Figure 2 depicts that there is no
relationship between unplanned purchasing and shopping bill. This was further proved by
regression analysis which gave a P value of the bill to be as high as 60 per cent hence we
can confidently reject the null hypothesis that impulse buying increases with the size of
the bill.

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Research Report on Impulse Buying

Relationship between Shopping Bill & Percentage of


Unplanned Purchases
40%
Percentage of Unplanned

30%
Purchases

20%

10%

0%
0-500 501-1000 1001- 1501- 2001- 2501- 3001- Over
1500 2000 2500 3000 3500 3501

Shopping Bill (Rs)

Figure 2

From our data we see that the correlation between impulse purchase and shopping bill
less than Rs. 1,000 is 25%. The correlation for bill between Rs. 1,000 and 3,000 is 7% –
almost no correlation. However for a bill size above Rs. 3,001 the correlation is negative.
This is for a bill size up to Rs. 6,000. For bill size greater than Rs. 6,000 we can
extrapolate from the observed pattern that the correlation would have been more
negative.

This is line with our findings relating to the number of products purchased in which we
found no correlation between the number of products and the impulse buying behavior
(details given below). Generally we can conclude that people who buy more will have
more shopping bill and will be engaging in less impulse buying.

Hypothesis 4: Number of Products bought and Impulse buying


The percentage of unplanned purchases has no significant correlation with the number of
different products bought by shoppers in super markets in Karachi as can be seen in the
Figure 3. This was also proved by regression analysis which had R 2 of 5 per cent and
high errors.

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Research Report on Impulse Buying

Percent of Unplanned Purchases


90%

Percent of Unplanned Purchases 80%

70%

60%

50%

40%

30%

20%

10%

0%
0 5 10 15 20 25 30 35
Different P roduct s Bought

Figure 3

Our findings explain that as the number of different products a customer intends to
purchase increases, the difference between actual and intended purchase decisions do not
vary. Even though the greater the number of products purchased, the greater the exposure
to in-store stimuli but the number of products bought on impulse do not increase. Hence,
we conclude, that in instances where customers shop for a larger number of items they
plan well ahead and there are little chances of impulse buying. This can be because as
customers plan for larger items they try to economize on their time and effort – hence
little or no impulse purchases. However, when customers shop for a few needed items or
engage in random shopping, they are more inclined to engage in impulse buying.

This is contrary to what was found in previous researches (Kollet & Willet 1967) which
indicated that as purchased items increase the level of unplanned impulse purchases also
increases. We found no such pattern in supermarkets in Karachi.

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Research Report on Impulse Buying

Hypothesis 5: Shopping list and Impulse buying Behavior


According to the Chi square statistical technique used to find the correlation between the
rate of unplanned purchasing with the presence of shopping list, we found no significant
association between the two variables. We interpret that the shopping list contains only
basic items and when people enter the super market they engage in impulse buying.
Hence we conclude that the tendency of a consumer to engage in impulse buying has no
association with the shopping list.
Also from the Table 2 we can conclude that majority of the people do not carry shopping
list with them (44%) or carry it only sometimes (35%). This shows there is natural
tendency amongst shoppers not to carry shopping lists with them.

Aghas Imtiaz Naheed EBCO Total


Never 9 9 11 6 35
Sometimes 8 7 5 8 28
Always 3 4 4 6 17
Total 20 20 20 20 80

Table 2

No
Shopping
Shopping list List
Planned 12 20 32
Unplanned 11 37 48
23 57 80

Table 3

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Research Report on Impulse Buying

List / Im
14%
No List / Pl
25%

List / Pl
15% No List / Im
46%

Figure 4

Kollet and Willet (1967) found that a shopping list influence purchases when more than
15 products are purchased. In our study, amongst those respondents who did buy more
than 15 products only 44% could be categorized as impulse buyers and 42 % of these
were carrying a shopping list. From this we can conclude no effect as such of shopping
list on the rate of impulse buying even when large number of different products is bought.

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Research Report on Impulse Buying

CONCLUSION AND RECOMMENDATIONS

Our research shows that impulse buying is a phenomenon common amongst the female
shoppers in Karachi. This can be because usually women buy for the whole family, not
only for themselves. So as they shop they are reminded of the items needed by others as
they come across the products in store and thus buy them. Also women generally have
greater time on hand to do shopping as compared to men; hence increasing their tendency
to engage in impulse buying. This has important implications for the in-store placement
of products. Products with which women can be attracted to buy on impulse, such as
frozen food, spices and other household & food items, should be prominently displayed
in-store so as to generate impulse purchases.

The impact of presence of shopping list, size of the shopping bill and number of products
purchased was found to be insignificant. Even the people carrying a shopping list
engaged in impulse purchases. This can be because most of the items on the shopping list
were collective use items or those needed by other people whereas personal use items
were bought on impulse. Some of the people were carrying shopping lists made by
someone else (who was not in the shopping party) such as the chef, mother-in-laws and
spouses.

The bill size and the number of items purchased are two measures to define the
transaction size. Overall, both of them turned out to have no significant correlation with
impulse buying. This shows that people who come to make large number of purchases
plan their shopping beforehand and hence engage in less impulse buying. This maybe
because they have already spent so much time spending what they had planned to buy,
that there is little time left to make other unplanned purchases.

We found high incidence of impulse buying in snacks and confectionaries. This maybe
because they are placed near the counter or at visible places in the Supermarkets so as to
attract people to buy them. We also found frozen food to be one of the recurring items on
the list of unplanned products by the respondents. These incidences of impulse buying

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Research Report on Impulse Buying

maybe because the deep freezers with transparent doors carrying the frozen food items
are placed right at the entrance of most of the superstores, hence catching people’s
attention as they enter or about to leave the store. Thus the importance of in-store stimuli
can be inferred from our study as we did not specifically test for their significance. This
can be the topic of future researches.

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Research Report on Impulse Buying

FUTURE RESEARCH
We have conducted an exploratory research to study the nature of impulse buying in
supermarkets of Karachi. However, the study does not extend to providing a causal
relationship between the various factors, hence future researches can conducted in those
areas.

The factors studied in our research include the gender of the shopper, size of the shopping
bill, presence of a shopping list and the number of items purchased. Future researches
may include situational factors such as mood, time and money; consumer traits and
normative traits.

Our research suggests no geographical difference in impulse buying. Hence it would be


useful to conduct future research in other cities of Pakistan to examine the differences in
impulse buying behavior between the different cities of Pakistan. Our study was only
confined to the SEC A class. Future researches can explore impulse buying in other
socio-economic classes of the population.

The findings of our research may be important from a theoretical perspective, because
they contribute to a better understanding of impulse buying behavior from the context of
a transitional economy. Our research also suggests some managerial implications
regarding promotion of impulse buying through increased physical and temporal
proximity.

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