Consumer Buying Behaviour

The smart spender

This behaviour trend has been triggered by two years of high inflation but, according to Abheek Singhi, partner and director, BCG India, "The conspicuous-to-conscious spending is a longer term trend that will continue," even though 75% of Indians feel that the economy will improve in the future.

Meena Kaushik, executive chairperson, Quantum Research, a qualitative research firm, states: "Smart shopping, stretching one's money and getting great deals have always been part of the Indian consumer's shopping psyche. What we believe is happening is that consumers are more ready to widen their product and brand repertoires, indicating their readiness to experiment, gain a wider exposure and make considered choices."

"It's more of a shifting behaviour of save here to spend there, something that's triggering trading-up and trading-down in buying behaviour," Singhi said. "Trading up happens where the consumer is willing to pay extra premium for a perceived benefit, which can range from emotional to functional though the consumer can normally not differentiate between the two."

Quantum finds that the consumer is straddling parallel need states and is in a perpetual struggle to reconcile these: the self indulgent, pampering, 'living the modern lifestyle' side that comes with money and plethora of branded choices; and the traditional 'middle class' conditioning towards more cautious, planned, guilt free spending.

It's not that Indian consumers are not willing to pay more for products. Trade-ups are happening, finds BCG, in categories such as health, fresh foods and kids. Brand name is another reason to trade up, driven by the increasing importance of social status.

Trading down is happening in discretionary categories such as jewellery, athletic shoes, sporting equipment, entertainment, eating out, leisure travel, and wines and spirits. "More people are buying holiday packages, but they are looking for the best deals on them," said Singhi. "Unless the product is differentiated, people will trade up or trade down in the same category."

Sharda Agarwal, director, Marketgate, pointed to differentiation that can matter: "Nissan Micra, an 'A' segment entry level car, offers keyless entry, a higher order feature that comes with the high end 'C' or 'D' segment cars. As an unexpected feature, the differentiation stands out.

Fashion Futures: The Psychologies of Consumer Buying Behaviour

The digital world has entered a year where online consumer demand is higher than ever before. Purchasing and searching for products has become faster due to advanced internet speeds, and convenient purchases can be made on a growing variety of platforms – whenever and wherever. Many retailers already have an eStore, and with many more planning online development, consumers will start to spend over multiple websites and if not already, start embracing mCommerce. With an ever growing marketplace, retailers need to engage consumers by giving them as emotionally satisfying and desirable experience when shopping online to gain brand loyalty and differentiate themselves from the competitors. With consumers becoming harder to analyse and segment into groups (due to diversity in beliefs, attitudes and values), retailers need to allocate more time and expenditure to consumer research to enable successful trading online. So how can retailers stay on top? Well market research firms such as eConsultancy and Forrester provide reports on statistics measurements of consumer behaviour that are important to assisting retailer’s plans of targeting consumers to their brands. Another option is to look into the psychology of consumer behaviour and how they make decisions like Marsden, Ariely and others (mentioned below). Marsden’s insights refer to the theories of Professor Dan Ariely, author of Predictably Irrational (a book describing his extensive research into behavioural economics) and explain why consumers use shop-and-tell applications to share purchase information online. Marsden believes that individuals don’t only shop to consume, but also to manage public appearance and personal identity. If this is correct, then how could retailers adapt to these natural effects of human behaviour to sell to consumers in today’s market. The effect of expectations: Consumers have previously held expectations that irrationally cloud their points of view and even sensory experiences. This means that consumers are likely to ‘like’ something if a retailer suggests that they should, or use positive associations around their products. Consumers are also bad at planning for themselves and sticking to purchasing plans. Retailers could lend a hand here by offering advice to help manage consumer arrangements. Value & Quality : Consumers often judge the value of products by comparing prices and associating quality with the cost.

Business

Principles of marketing

Models in Consumer Buying Behaviour

Marketing, an introduction

Consumer and industrial buying behavior