Consumer Behavior

Nature Scope and Importance of Consumer behavior. :

Consumer behavior is defined as “The dynamic interaction of affect and
cognition, behavior and the environment b which human beings conduct the exchange
aspects of lives”. IT means that the buying habits of the consumer are greatly affected
by
their thought process and their feelings experienced. Human beings are greatly
influenced
in their buying actions by various factors like opinion of others, marketing stimuli like
product, advertising, packaging and product appearance.
Importance of Consumer behavior:
• Ever increasing intensifying competition.
• More aggressive competitors emerging with greater frequency.
• Changes basis of competition.
• Geographic sources of competition are becoming wider.
• Niche attacks are becoming frequent.
• Pace of innovation is rapid.
• Price competition becoming more aggressive
• Product differentiation is declining.
As a principal, the marketing concept involves understanding the needs of the
consumers and translating these needs into products or services to satisfy these needs.
The basic objective in marketing is to achieve the goal of profit making through
customer
satisfaction. To do this, an organization should understand the consumer and be as
close
to them as possible.

CONSUMER BEHAVIOUR IS DYNAMIC

 The feelings, thinking, perceptions and actions of the customer and the society
at
large keep changing frequently. For example number of working women is on rise and
this has changed the concept of shopping. The dynamic nature of the consumer
behaviour
offers challenges to marketers and the task of creating marketing strategies becomes
complex, and exciting. Strategies that work today may not work tomorrow. Strategies
adopted in one market ma not work in another. The product life cycle are becoming
shorter and create additional pressures on marketers to bring innovative products and
concepts. The concept ‘value’ changes from time to time. Mahindra and mahindra had
to
come out with ‘Scorpio’ within launch of ‘Bolero’.
Consumer behaviour involves interactions:
Consumer behaviour involves interactions among peoples thinking, feelings, and
actions and the environment. This forces marketer to understand three things:
• What products and services mean to customers.
• What influences shopping, purchase, and consumption.
• What consumers need to do to purchase and consumer products and services?
Consumer behaviour involves exchange:
Consumer behaviour involves exchanges between human beings. People give
up
something of value to others and receive something in return. Much of consumer
behaviour involves people giving up money to obtain product and services, that is,
exchanges consumers and sellers. The role of marketing in society is to help create
exchange by formulating and implementing marketing strategies

 Consumer Research:
Consumer research is the systematic collection and analysis of consumer
information for the purpose of important decision making for marketing. Consumer
research plays an important role in marketing process, helps in consumer
measurement,
market potential, sales forecast, each element like product mix, distribution mix, price,
effectiveness of an advertisement campaign, consumer acceptance of a product. In
fiercely competitive situation, it is extremely critical for and organization to monitor the
customer relationship on a regular basis.
Consumer research is used for two purposes:
• Routine problem analysis .i.e. product potential, sales forecasting.
• Non-routing problem analysis .i.e. new product launch, success of promotional
schemes.
Needs for Consumer Research:
• How do consumers interpret information about marketing stimuli such as products,
stores, and advertising?
• How do consumers choose from among alternative product classes, products, and
brands?
• How do consumers form evaluation of products and brands?
• How does consumer interpret the benefits of market offerings?
• How do behaviour and environment affect consumer beliefs and attitudes?
• Why consumers are more interested or involved in some products or brands than
others?
• How d marketing strategies influence consumer’s beliefs and attitudes?
Answers to such questions can only be obtained through consumer feedback
and
for this it is imperative to study Consumer Research and integrate it into the overall
marketing function.

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Approaches to Consumer Research:
 There are two main categories of research methods. Secondary research uses
research that has already been done by someone else. For example, marketers often
find
information compiled by the U.S. Census very useful. However, in some cases,
information specific enough to satisfy a firm’s needs is not publicly available. For
example, a firm will have to run its own research to find out whether consumers would
prefer that more vanilla taste be added to its soft drink brand. Original research that a
firm does for itself is known as primary research.
There is no one perfect primary research method. Each has strengths and
weaknesses, and thus the appropriate method must be selected based on research
needs.
Surveys are useful for getting a great deal of specific information. Surveys can contain
open-ended questions (e.g., "In which city and state were you born?____________")or
closed-ended, where the respondent is asked to select answers from a brief list(e.g.,
"__Male ___ Female.") Open ended questions have the advantage that the respondent
is
not limited to the options listed, and that the respondent is not being influenced by
seeing
a list of responses. However, open-ended questions are often skipped by respondents,
and
coding them can be quite a challenge. In general, for surveys to yield meaningful
responses, sample sizes of over 100 are usually required because precision is
essential.
For example, if a market share of twenty percent would result in a loss while thirty
percent would be profitable, a confidence interval of 20-35% is too wide to be useful.
Surveys come in several different forms. Mail surveys are relatively inexpensive,
but response rates are typically quite low—typically from 5-20%. Phone-surveys get
somewhat higher response rates, but not many questions can be asked because many
answer options have to be repeated and few people are willing to stay on the phone for
more than five minutes. Mall intercepts are a convenient way to reach consumers, but
respondents may be reluctant to discuss anything sensitive face-to-face with an
interviewer.

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Observation of consumers is often a powerful tool. Looking at how consumers
select products may yield insights into how they make decisions and what they look for.
For example, some American manufacturers were concerned about low sales of their
products in Japan. Observing Japanese consumers, it was found that many of these
Japanese consumers scrutinized packages looking for a name of a major manufacturer
—
the product specific-brands that are common in the U.S.(e.g., Tide) were not impressive
to the Japanese, who wanted a name of a major firm like Mitsubishi or Proctor &
Gamble. Observation may help us determine how much time consumers spend
comparing
prices, or whether nutritional labels are being consulted. Physiological measures are
occasionally used to examine consumer response. For example, advertisers may want
to
measure a consumer’s level of arousal during various parts of an advertisement.
Types of Data:
Primary Data: Data collected at first hand either by the researcher or by someone
especially for the purpose of the study are known as primary data.
Secondary Data: Data which have been collected earlier for some other purpose are
secondary data in hands of marketing researcher.
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3. Consumer Learning:
Learning is defined as a permanent change in the behaviour of a consumer as a result
of
past experience.
The characteristic features of learning are as under:
• Learning involves a change in behaviour. This change may or may not be an important
over previous behaviour.
• Learning is a process, which continuously evolves and changes as a result of newly
acquired knowledge.
• Learning can occur by increase in knowledge through reading books, articles,
observation, thinking, and through discussions.
• The behaviour change is based on some form of practice or exception.
Thus we see that learning is based on two vital aspects that are behaviour and
experience. Learning can be either intentional or incidental. Intentional learning occurs
when the individual is deliberately searching for the information on the feature, benefits
etc of the product before a purchase. Incidental learning occurs when the information
comes to him on its own either through the print or electronic media, exhibitions etc.
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4. Consumer Perception:
It is selection, organization, and interpretation of marketing and
environmentalstimuli into a cohesive picture. Following are the some feature of
perception, which areas under:
• Perception is a mental process, whereby an individual selects data or information from
the environment, organizes it and draws significance or meaning from it.
• Perception is a basically a cognitive or thinking process and an individual’s activities,
emotions, feelings etc. are based on his perception of his perception of his surroundings
or environment.
• Perception being an intellectual and cognitive process will be subjective in nature. This
means that different people may perceive the same environment differently based on
the
effect of the environment.
Characteristics Affecting Perception:
Characteristic effecting perception can be divided into sensory elements and structural
elements.
Colour:Colour has important sensory connotations. Evidence suggests that red is
regarded as warm, sensual and not intimidating. Blue is seen as conforming and is
regarded to be colour that attempts to convey friendlier image. Pepsi attempt to cash on
the blue colour of the Indian cricket team during the recent World Cup cricket matches
has received a similar response. Many retailers in Mumbai call it ‘Ghaslet Pepsi’. This is
because Indians are more used to identify blue with kerosene and their long term
association with blue colour of kerosene led to call blue Pepsi as Ghaslet Pepsi.

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Type of Involvement:
Situational Involvement:
It is one that occurs only in specific situations and is temporary. For e.g. a
person
buying suit for marriage. Formal dressing for the marriage is a necessary and
hence a person not very fashion-conscious about clothes gets involved temporary for
his
marriage in a piece of suit. Enduring Involvement: It indicates an ongoing interest in the
product category. For example,
Attitudes:
Consumer attitudes are a composite of a consumer’s (1) beliefs about, (2)
feelings
about, (3) and behavioral intentions toward some object--within the context of
marketing,
usually a brand or retail store. These components are viewed together since they are
highly interdependent and together represent forces that influence how the consumer
will
react to the object.
Beliefs.
The first component is beliefs. A consumer may hold both positive beliefs toward
an object (e.g., coffee tastes good) as well as negative beliefs (e.g., coffee is easily
spilled
and stains papers). In addition, some beliefs may be neutral (coffee is black), and some
may be differ in valance depending on the person or the situation (e.g., coffee is hot and
stimulates--good on a cold morning, but not good on a hot summer evening when one
wants to sleep). Note also that the beliefs that consumers hold need not be accurate
(e.g.,
that pork contains little fat), and some beliefs may, upon closer examination, be
contradictory (e.g., that a historical figure was a good person but also owned slaves).
Affect.
Consumers also hold certain feelings toward brands or other objects.
Sometimes
these feelings are based on the beliefs (e.g., a person feels nauseated when thinking
about
a hamburger because of the tremendous amount of fat it contains), but there may also
be
feelings which are relatively independent of beliefs. For example, an extreme
environmentalist may believe that cutting down trees is morally wrong, but may have
positive affect toward Christmas trees because he or she unconsciously associates
these
trees with the experience that he or she had at Christmas as a child.
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Behavioral intention.
The behavioral intention is what the consumer plans to do with respect to the
object (e.g., buy or not buy the brand). As with affect, this is sometimes a logical
consequence of beliefs (or affect), but may sometimes reflect other circumstances--e.g.,
although a consumer does not really like a restaurant, he or she will go there because it
is
a hangout for his or her friends.
Attitude-Behavior Consistency.
Consumers often do not behave consistently with their attitudes for several
reasons:
o Ability.
He or she may be unable to do so. Although junior high school student likes pick-
up trucks and would like to buy one, she may lack a driver’s license.
o Competing demands for resources.
Although the above student would like to buy a pickup truck on her sixteenth
birthday, she would rather have a computer, and has money for only one of the two.
o Social influence.
A student thinks that smoking is really cool, but since his friends think it’s
disgusting, he does not smoke.
o Measurement problems.
Measuring attitudes is difficult. In many situations, consumers do not consciously
set out to enumerate how positively or negatively they feel about mopeds, and when a
market researcher asks them about their beliefs about mopeds, how
important these beliefs are, and their evaluation of the performance of mopeds with
respect to these beliefs, consumers often do not give very reliable answers. Thus, the
consumers may act consistently with their true attitudes, which were never uncovered
because an erroneous measurement was made.
o Attitude Change Strategies.
 Changing attitudes is generally very difficult, particularly when consumers
suspect that the marketer has a self-serving agenda in bringing about this change (e.g.,
to
get the consumer to buy more or to switch brands).
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o Changing affect.
One approach is to try to change affect, which may or may not involve getting
consumers to change their beliefs. One strategy uses the approach of classical
conditioning try to "pair" the product with a liked stimulus. For example, we "pair" a car
with a beautiful woman. Alternatively, we can try to get people to like the advertisement
and hope that this liking will "spill over" into the purchase of a product. For example, the
Pillsbury Doughboy does not really emphasize the conveyance of much information to
the consumer; instead, it attempts to create a warm, fuzzy image. Although Energizer
Bunny ads try to get people to believe that their batteries last longer, the main emphasis
is
on the likeable bunny. Finally, products which are better known, through the mere
exposure effect, tend to be better liked--that is, the more a product is advertised and
seen
in stores, the more it will generally be liked, even if consumers to do not develop any
specific beliefs about the product.
o Changing behavior.
People like to believe that their behavior is rational; thus, once they use our
products, chances are that they will continue unless someone is able to get them to
switch. One way to get people to switch to our brand is to use temporary price discounts
and coupons; however, when consumers buy a product on deal, they may justify the
purchase based on that deal (i.e., the low price) and may then switch to other brands on
deal later. A better way to get people to switch to our brand is to at least temporarily
obtain better shelf space so that the product is more convenient. Consumers are less
likely
to use this availability as a rationale for their purchase and may continue to buy the
product even when the product is less conveniently located. (Notice, by the way, that
this
represents a case of shaping).
o Changing beliefs.
Although attempting to change beliefs is the obvious way to attempt attitude
change, particularly when consumers hold unfavorable or inaccurate ones, this is often
difficult to achieve because consumers tend to resist. Several approaches to belief
change
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o Appeal approaches.
Several approaches to appeal may be used. The use of affect to induce
empathy
with advertising characters may increase attraction to a product, but may backfire if
consumers believe that people’s feelings are being exploited. Fear appeals appear to
work
only if (1) an optimal level of fear is evoked--not so much that people tune it out, but
enough to scare people into action and (2) a way to avoid the feared stimulus is
explicitly
indicated--e.g., gingivitis and tooth loss can be avoided by using this mouth wash.
Humor
appears to be effective in gaining attention, but does not appear to increase persuasion
in
practice. In addition, a more favorable attitude toward the advertisement may be created
by humorous advertising, which may in turn result in increased sales. Comparative
advertising, which is illegal in many countries, often increases sales for the sponsoring
brand, but may backfire in certain cultures.
o Culture:
Culture is part of the external influences that impact the consumer. That is,
culture
represents influences that are imposed on the consumer by other individuals.
The definition of culture offered in the text is "That complex whole which includes
knowledge, belief, art, morals, custom, and any other capabilities and habits acquired
by
man person as a member of society." From this definition, we make the following
observations:
•  Culture, as a "complex whole," is a system of interdependent components.
•  Knowledge and beliefs are important parts.
In the U.S., we know and believe that a person who is skilled and works hard will
get ahead. In other countries, it may be believed that differences in outcome result more
from luck. "Chunking," the name for China in Chinese literally means "The Middle
Kingdom." The belief among ancient Chinese that they were in the centre of the
universe
greatly influenced their thinking.
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CHAPTER 2: Current scenario of Apparel Industry
Industry scenario
The Indian textile and apparel industry has made a major contribution to the
national economy in terms of direct and indirect employment generation and net foreign
exchange earnings. The textile and apparel sector accounts for 18 per cent of
employment
in the industrial sector, 20 per cent of industrial production, 9 per cent of excise duty
collections and more than 30 per cent of Indian’s total exports.
India had few competitors in the booming international textile trade during the
post-independence period of the 1950s and 1960s, due to abundant supply of cotton
and
cheap labour and thriving mill sector. But Indian trade lost market share during 1970s in
the face of growing competition from few new industrializing nations (NICs) in an
expanding global economy. The 1980s marked rapid growth for apparel exports, which
were valued at Rs 6500 million in 1981, Rs 8500 million in 1985. Due to devaluation of
the rupee in 1991 and enactment of export-oriented policies, value of apparel exports
jumped to Rs 62823 million in 1991-92, Rs 183896 million in 1998-99 and to Rs 254799
million in 2000-01.
Opportunities
Indian apparels accounted for a tiny fraction of less than 3 per cent of overall
world export of apparel, suggesting an opportunity for considerable growth. There is a
very large domestic market for Indian apparel manufactures. As per McKinsey study,
the
market size is of Rs 20,000 crore, out of which only Rs 4,000 crore is catered to by
branded apparel. So there is still an Rs 16,000 crore market, which is catered by the
unorganized small size units. The developed nations, which are the destinations for
Indian textile products, use textiles in the form of apparel. Therefore, in order to improve
the presence in these markets and capture larger values of the chain the focus needs to
be
shifted towards the effective performance of the textile-apparel supply chain network,
rather than looking at textile industry in isolation.
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Market Scenario:
The speed at which the world economy is moving is truly incredible. And in this
fast paced global scenario, the spotlight is on India.
The Indian economy is growing at a rapid pace and the true emergence of the
middle class is what is driving this growth in our domestic market at an exponential rate,
which we have never seen before. With the rise in investments in the economy and
decrease in costs, people’s needs have increased in terms of goods and services,
different
retail experiences such as malls – all have contributed toward increasing consumer
demand.India is close to achieving a GDP growth rate of 8% that was projected by the
government for this year. I am optimistic that in the current scenario, the GDP growth
could even touch 10%.
In this environment, The Raymond Group too has grown at a tremendous pace
as
made the most of the global opportunities that the post-quota era presented us while
consolidating our business in the domestic market.
From being one of the most respected textile companies in the world Raymond
Group are now the world’s largest vertically and horizontally integrated
manufacturer of worsted suiting fabric - a ‘one stop shop’ providing various solutions
to our customers across various product categories - worsted suiting to formal suits,
shirting to formal shirts and denim fabric to jeans wear.
Raymond Group has expanded capacity of worsted suiting to 28 million metres
with a new facility at Vapi, Gujarat. In addition to expanding capacity of our denim
fabric facility to 40 million metres, Raymond Group have joined hands with UCO NV of
Belgium, a leading producer of high end denim to form a global denim company with a
combined capacity of 80 million metres, manufacturing facilities in 3 continents and a
global marketing network.

Raymond Group further expanded their textile business by entering a JV with

Gruppo Zambaiti, a textile major from Italy in the form of a 50:50 JV withCoton ificio
Honegger SPA for setting up of a Greenfield facility in India for high value cotton
shirting fabric. This JV with Gruppo Zambaitil helps them bring in best of the best
technological & design inputs and a strength of a global marketing network. Their JV
with Lanificio Fedora is Italy’s leading woolen fabric manufacturer for the manufacture
of carded woolen products and a respected name in the global markets has helped
enhance our carded woolen business as well.
Raymond Group have set up three world class garmenting units near
Bangalore – for the manufacture of formal suits, jeans wear and dress shirts. These
garmenting units will act as forward integration to their textile business enabling them to
offer a complete solution to their customers from fabric to apparel.
Through the entire growth and consolidation phase, Raymond Group have
never lost sight of what makes Raymond great – Their strength in innovation and
dedication in developing great products. Raymond proved its global excellence by being
the first Indian company in the world to bid for the world’s rarest bale of wool and
create the world’s finest fabric - Super 230s fabric made of 11.8-micron wool..
Raymond Group also unveiled their newest innovation‘Expressions’ an exquisite
collection of wool and polywool suiting fabric specially crafted using exotic fibers’ like
Cashmere, Angora, Mohair, Bamboo, Casein- a fibre developed from milk protein,
Linen, Silk, Soya bean, Tencel blended with Super 120s, 100s Merino Wool and fine
polyester.
In keeping with their objective to provide complete wardrobe solutions for
the Indian male, they unveiled exclusive brand stores for Park Avenue, Manzoni and
Parx. Their acquisition of ColorPlus is now complete. They have also expanded their
‘The Raymond Shop’ network and set up an exclusive 10,000 sq foot Flagship store for
Raymond. Raymond also ventured into a new area for the first time with a kids wear
brand -Zapp !
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Strengths of the Apparel Industry
The Indian textile industry is globally more competitive than other
industries in the country on relative terms. Most of the inputs required for this sector
being available from domestic sources and there are very little requirements of imports
and precious foreign exchange.
The Indian apparel-manufacturing sector was highly fragmented as knitted
hosiery and yarn-dyed, woven apparel. Units employing over 50 machines accounted
for
a mere 6 per cent of all firms, while 80 per cent firms employed up to 20 machines. The
extreme decentralization helped manufacturers to avoid labour problems and the labour
related laws, as well as seasonal fluctuations in business. It also imparted flexibility to
operations and provided surge capacity in production.
From middle of 1990s, manufacturing units of larger capacity with upgraded
technology, mostly in collaboration with a joint venture partner were established. During
the same period, Indian consumers could see availability of international brands in
domestic market, which were made by Indian garment manufacturers. This had raised
the
expectation level of discerning consumers and apparel industry faced the challenge to
improve its performance from this set of demanding consumers. Importers of Indian
apparels were generally satisfied with price and enthusiastic about the ability to source
small production quantities. With the entry of international garment companies into
India,
they bring in new designs, new craftsmanship, modern scientific management and also
the marketing strategies. These all can strengthen the competition mechanism so that
the
industry will gain more resources for developing new products, new brand names,
technology development and staff training in order to increase the market
competitiveness.
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CHAPTER 3: RAYMOND APPAREL LTD
To some the ultimate in fashion, to others something to aspire for. Brands
fromRaymond Apparel Ltd - the finest in readymade garments are more of a tradition
thatlives on forever. Dressing up gentlemen over the ears, it is nirvana for the senses.