NATIONAL INSTITUTE OF FASHION TECHNOLOGY, GANDHINAGAR

RESEARCH PROPOSAL On The effect of education of consumers on product selection and their buying behavior

Submitted by: Aryan Singh Ayushi Fathepuria Ruchika Tripathi Swati Singh

Executive Summary
The dynamic and competitive nature of todays markets has made it necessary for producers to know their customer effectively and make products according to the needs of the customer. The consumer has varied choices and in such a scenario brand loyalty is decreasing as the customer looks for the best quality at the lowest price. The consumer buying process is a complex phenomenon wherein no single factor dominates the consumer psychology. Income, of course, plays a major role in determining what a consumer buys but the effect of education on the product selection has to be ascertained to know how and if the type of education of a consumer affects what he buys and ultimately, his buying behaviour. For e.g, a consumer with an education background in garments will make his/her choices differently while buying a product in that segment, as opposed to customers.

CopyRight @ 2011

Page 2

Problem Statement
How does education level affect what choices a consumer makes in terms of product selection and hence, what is its affect on the buying behavior of the consumer?

Research Objective
To study how education level of consumer affects his/her product selection and hence his/her buying behavior with respect to two product categories namely Apparels & Grocery Item in Ahmedabad.

Sub Objective
1. To study the nature, extent and affect of education on the buying pattern of consumer. 2. To study two product categories, Apparels and Grocery, and to determine the affect of consumer education on the buying of these two categories. 3. To study the Ahmedabad consumer market and divide the consumer base on the basis of income and age, for the purpose of the study.

CopyRight @ 2011

Page 3

Literature Review
Consumer behavior research is the scientific study of the processes consumers use to select, secure, use and dispose of products and services that satisfy their needs. Firms can satisfy those needs only to the extent that they understand their customers. Knowledge of consumer behaviour directly affects marketing strategy. This is because of the marketing concept, i. e., the idea that firms exist to satisfy customer needs. Firms can satisfy those needs only to the extent that they understand their customers. For this reason, marketing strategies must incorporate knowledge of consumer behaviour into every facet of a strategic marketing plan.

The human behaviour is complex, replete with controversies and contradictions and comes as no surprise to marketing academicians as well as practioners. There is a widespread recognition that consumer behaviour is the key to contemporary marketing success.

Definition:

Consumer behavior refers to the mental and emotional process and the observable behavior of consumers during searching, purchasing and post consumption of a product or service. Consumer behavior involves study of how people buy, what they buy, when they buy and why they buy. It blends the elements from psychology, sociology, sociopsychology, anthropology and economics. It also tries to assess the influence on the consumer from groups such as family, friends, reference groups and society in general. Buyer behavior has two aspects: the final purchase activity visible to any observer and the detailed or short decision process that may involve the interplay of a number of complex variables not visible to anyone.

Factors Affecting Consumer Buying Behavior

Consumer buying behavior is influenced by the major three factors: 1. Social Factors 2. Psychological Factors 3. Personal Factors.
CopyRight @ 2011 Page 4

A. Social Factors Social factors refer to forces that other people exert and which affect consumers purchase behavior. These social factors can include culture and subculture, roles and family, social class and reference groups.

Example: By taking into consideration Reference group, these can influence/ affect the consumer buying behavior. Reference group refers to a group with whom an individual identifies herself/ himself and the extent to which that person assumes many values, attitudes or behavior of group members. Reference groups can be family, school or college, work group, club membership, citizenship etc. Reference groups serve as one of the primary agents of consumer socialization and learning and can be influential enough to induce not only socially acceptable consumer behavior but also socially unacceptable and even personal destructive behavior. For example, if fresher student joins a college / university, he/she will meet different people and form a group, in that group there can be behavior patterns of values, for example style of clothing, handsets which most of group member prefer or even destructive behavior such as excessive consumption of alcohol, use of harmful and addictive drugs etc. So, according to how an individual references him / herself to that particular reference group, this will influence and change his/her buying behavior.

B. Psychological Factors

These are internal to an individual and generate forces within that influence her/his purchase behavior. The major forces include motives, perception, learning, attitude and personality.

Example: Attitude, is an enduring organization of motivational, emotional, perceptual and cognitive processes with respect to some aspect of our environment. Consumer form attitude towards a brand on the basis of their beliefs about the brand. For example, consumers of Sony products
CopyRight @ 2011 Page 5

might have the belief that the products offered by Sony are durable; this will influence those customers to buy Sony products due to this attitude towards the brand.

C. Personal Factors

These include those aspects that are unique to a person and influence purchase behavior. These factors include demographic factors, lifestyle, and situational factors.

Example:

Lifestyle is an indicator of how people live and express themselves on the basis of their activities, interests, and opinions. Lifestyle dimension provide a broader view of people about how they spend their time the importance of things in their surroundings and their beliefs on broad issues associated with life and living and themselves. This is influenced by demographic factors and personality. E.g. A CEO or Manager is likely to buy more formal clothes, ties and shoes or PDAs and less informal clothes like jeans as compared to a Mechanic or Civil engineer. So according to their lifestyle and profession, the buying behavior of people differ from one another.

Consumer Buying Decision Process

Consumer buying decision process is the processes undertaken by consumer in regard to a potential market transaction before, during and after the purchase of a product or service.

CopyRight @ 2011

Page 6

Consumer decision making process generally involves five stages:

Problem

Problem Recognition

Purchase decision making process begins when a buyer becomes aware of an unsatisfied need or problem. This is the vital stage in buying decision process, because without recognizing the need or want, an individual would not seek to buy goods or service. There are several situations that can cause problem recognition, these include: Depletion of stock Dissatisfaction with goods in stock Environmental Changes Change in Financial Situation Marketer Initiated Activities

Example: Its when she recognizes that her phone has been damaged i.e. the phone has hardware problems and needs to be repaired or buying a new piece.

CopyRight @ 2011

Page 7

Information Search

After the consumer has recognized the need, he / she will trying to find the means to solve that need. First he will recall how he used to solve such kind of a problem in the past, this is called nominal decision making. Secondly, a consumer will try to solve the problem by asking a friend or goes to the market to seek advice for which product will best serve his need, this is called limited decision making. Sources of information include: Personal sources Commercial Sources Public sources Personal experience Example: (continuing from previous)

The user of the phone after recognizing that her phone is damaged, she will eventually try to find out how she can repair her phone. If she cannot repair it herself she will ask a friend to help out, if the friend can not solve the problem she will go to mobile repair shop, if they also can not repair it then she will try to find which mobile phone is good and that can serve her need. In this process of information collection it will yield awareness of set of brands of mobile phones she can buy.

CopyRight @ 2011

Page 8

Alternatives evaluation Consumers evaluates criteria refer to various dimension; features, characteristics and benefits that a consumer desires to solve a certain problem. Product features and its benefit is what influence consumer to prefer that particular product. The consumer will decide which product to buy from a set of alternative products depending on each unique feature that the product offers and the benefit he / she can get out of that feature. Example: (continuing from previous)

When that user got enough information concerning the different brands of mobile phones available in the market, she will decide which kind of a mobile phone and brand shes going to buy depending upon her need for that particular mobile, either a mobile for multimedia and entertainment, smartphone or classic phone.

Purchase Action

This stage involves selection of brand and the retail outlet to purchase such a product. Retail outlet image and its location are important. Consumer usually prefers a nearby retail outlet for minor shopping and they can willingly go to a far away store when they purchase items which are of higher values and which involve higher sensitive purchase decision. After selecting where to buy and what to buy, the consumer completes the final step of transaction by either cash or credit. Example: (continuing from previous)

After selecting brand of the phone and model from different alternatives of mobile phones, she will make a final decision of where to buying that phone and make the final transaction procedures.

CopyRight @ 2011

Page 9

Post-purchase Actions

Consumer favorable post-purchase evaluation leads to satisfaction. Satisfaction with the purchase is basically a function of the initial performance level expectation and perceived performance relative to those expectations. Consumer tends to evaluate their wisdom on the purchase of that particular product. This can result to consumer experiencing post purchase dissatisfaction. If the consumers perceived performance level is below expectation and fail to meet satisfaction this will eventually cause dissatisfaction, and so the brand and/ or the outlet will not be considered by the consumer in the future purchases. This might cause the consumer to initiate complaint behavior and spread negative word-of-mouth concerning that particular product.

Example: (continuing from previous)

If she decided to buy a multimedia phone she will try to compare the quality of music it provides and pictures taken if they meet her expectations. If she will find that her expectation are meet she will be satisfied, if she found that there are more additional features that she did not expect this mobile phone to have, she will be delighted, otherwise she will be dissatisfied.

Consumer Classification In addition to income classification and consumer classification, Indian households can also be segmented according to the occupation and education levels of the chief earner of the household (the person who contributes most to the household expenses). This is called as Socio-Economic Classification (SEC), which is mainly used by market planners to target market before launching their new products. SEC is made to understand the purchase behavior and the consumption pattern of the households.

SOCIO ECONOMIC CLASSIFICATION (SEC) - NRS 2005

CopyRight @ 2011

Page 10

The Market Research Society of India categorises socio-economic groups based on both occupation and education of the chief wage earner of the household.

These eight classes are A1, A2, B1, B2, C, D, E1, and E2. A1 is the uppermost socioeconomic class and E2, the lowest.

CopyRight @ 2011

Page 11

Sections A & B refer to High-class- constitutes over a quarter of urban population Sec C refers to Middle-class-- constitutes 21% of the urban population Sections D & E refer to Low-class-constitutes over half the urban population.

CopyRight @ 2011

Page 12

Education and Consumer Buying Behaviour

HOUSEHOLD DISTRIBUTION BY EDUCATION ALL INDIA-RURAL & URBAN

National Readership Survey 05

URBAN - RURAL DIVIDE HOUSEHOLDS BY INCOME

CopyRight @ 2011

Page 13

National Readership Survey 05

No study has yet been conducted as to how the education level affects the buying decision process of a consumer. Since no one factor affect the buying process in isolation, education cannot be the sole criteria that affects what a consumer buys, but for any retailer to be successful, it has to know the complete profile of the consumer, to know the intricacies of the working of a consumers mind. Demographics of Ahmedabad According to the 2001 national census, the population of Ahmedabad was declared to be 35 lakhs, or 3.5 million people. This figure was only limited to the municipality region. The total population of the Ahmedabad Urban Agglomeration (which also includes the region governed by AUDA) came to 45.19 lakhs, or 4.5 million people. There are 886 females to every 1000 males. Ahmedabad has a literacy rate of 79.89%, which is the highest in Gujarat (87.81% males and 71.12% females are literate). According to the census for the ninth plan, there are 30737 rural families living in Ahmedabad. Out of those, 5.41% (1663 families) live below the poverty line.

CopyRight @ 2011

Page 14

Research Design

Research Approach For the purpose of the research the consumers will be divided according to income for a particular age bracket for apparels and age wise for Grocery. The area of study is too wide to be completed within the given timeframe and hence only two product categories have been chosen. Another rationale behind selecting these two product categories is that the choices of the customer is not influenced by any external forces and are made by the consumer keeping in mind his/her choices. The method adopted will be exploratory and hence qualitative research through close contact with research field in question .This way the researcher develops an understanding and becomes able to formulate a theory explaining the phenomenon under investigation. The research will be exploratory as well as descriptive because it explores the behaviour of consumers and at the same time tries to establish a causal relationship between variables.

Contact Method Since the sample size is large, surveys will be conducted in various malls and other shopping centers in the city. With concise and straightforward questionnaires, we can analyze a sample group that represents your target market. The larger the sample, the more reliable your results will be. In-person surveys are one-on-one interviews and questionnaires typically conducted in high-traffic locations such as shopping malls. It helps in presenting people with samples

CopyRight @ 2011

Page 15

of products, packaging, or advertising and gathers immediate feedback. In-person surveys can generate response rates of more than 90 percent, but they are costly.

Sampling Design The consumers will be segregated on the basis of age and income according to the requirement of the study hence the sampling done will be Quota Sampling. In quota sampling, while designing the study it is decided how many people with which characteristics to include as participants. Characteristics might include age, place of residence, gender, income, education etc.

Contact Instrument Questionnaires will be used as a research instrument because : 1. The sample size is large 2. Standard questions have to be asked from all the respondents. 3. The number of questions to be asked is more and will require the respondents to give objective answers.

CopyRight @ 2011

Page 16

Data Analysis
After assimilation of data, analysis will be done and the results will be displayed with the help of tables, charts, graphs. Since a result of no relationship is also possible, only one tool might not be sufficient to represent the result. Through the Questionnaire, the responses the consumers to various questions will be analyzed and will be checked to ascertain whether there is any relationship between education and the buying behaviour of the consumer.

Nature & Form of Result

The research is expected to give a research model wherein the effects of education level on the consumer buying behaviour can be explained. In all probability the research might give a no relationship result as a lot of factors affect the consumer buying behaviour and these factors may be more dominant than education. 1. The effect of education on product selection by consumers 2. Effect of education on Consumer buying behaviour 3. A research model to explain the phenomena

Budget
Stationery Photocopy and Printing Transportation Internet Overheads Total Rs 50 Rs 200 Rs 200 Rs 200 Rs 300 Rs. 950

CopyRight @ 2011

Page 17

Schedule
The Research will be conducted from 3rd Januray, 2011 till 17th January. Duration: 14 days

CopyRight @ 2011

Page 18

Facilities & Special Resource

Internet Computer Stationery

Bibliography
NRS Survey 2005
http://www.timm.indiatimes.com/timm/cimc.jsp

http://www.learnmarketing.net/consumer.htm http://www.ihmctan.edu/PDF/notes/Research_Methodology.pdf http://www.sykronix.com/tsoc/courses/sales/sls_cons.htm

Research Methodology by C.R Kothari

CopyRight @ 2011

Page 19