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CHAPTER I

INTRODUCTION
1.1 Background

Buying behavior is the sum total of a consumer's attitudes, preferences,


intentions, and decisions regarding the consumer's behavior in the marketplace when
purchasing a product or service. Consumer buying behavior refers to the selection,
purchase and consumption of goods and services for the satisfaction of their wants.
There are different processes involved in the consumer behavior. Many factors,
specificities and characteristics influence the individual in what he is and the
consumer in his decision making process, shopping habits, purchasing behavior, the
brands he buys or the retailers he goes. A purchase decision is the result of each and
every one of these factors. Initially the consumer tries to find what commodities he
would like to consume, then he selects only those commodities that promise greater
utility. After selecting the commodities, the consumer makes an estimate of the
available money which he can spend. Lastly, the consumer analyzes the prevailing
prices of commodities and takes the decision about the commodities he should
consume. Meanwhile, there are various other factors influencing the purchases of
consumer such as social, cultural, economic, personal and psychological (Ramya and
Ali, 2016).

A bakery (also baker's shop or bake shop) is an establishment that produces


and sells flour-based food baked in an oven such as bread, cookies, cakes, pastries,
and pies. Some retail bakeries are also cafés, serving coffee and tea to customers who
wish to consume the baked goods on the premises.

Baked goods have been around for thousands of years. The art of baking was
developed early during the Roman Empire. It was a highly famous art as Roman
citizens loved baked goods and demanded for them frequently for important occasions
such as feasts and weddings etc. Due to the fame and desire that the art of baking
received, around 300 BC, baking was introduced as an occupation and respectable
profession for Romans. The bakers began to prepare bread at home in an oven, using
mills to grind grain into the flour for their breads. The oncoming demand for baked
goods vigorously continued and the first bakers' guild was established in 168 BC in

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Rome. This drastic appeal for baked goods promoted baking all throughout Europe
and expanded into the eastern parts of Asia. Bakers started baking breads and goods at
home and selling them out on the streets (Ashokkumar, 2009).

This trend became common and soon, baked products were getting sold in
streets of Rome, Germany, London and many more. This resulted in a system of
delivering the goods to households, as the demand for baked breads and goods
significantly increased. This provoked the bakers to establish a place where people
could purchase baked goods for themselves. Therefore, in Paris, the first open-air
bakery of baked goods was developed and since then, bakeries became a common
place to purchase delicious goods and get together around the world. By the colonial
era, bakeries were commonly viewed as places to gather and socialize (Morgan,
2014).
On July 7, 1928, a bakery in Chillicothe, Missouri introduced pre-cut bread
using the automatic bread-slicing machine, invented by Otto Frederick Rohwedder.
While the bread initially failed to sell, due to its "sloppy" aesthetic, and the fact it
went stale faster (Latson, 2015), it later became popular. In World War II bread
slicing machines were effectively banned, as the metal in them was required for
wartime use. When they were requisitioned, creating 100 tonnes of metal alloy, the
decision proved very unpopular with housewives. World War II directly affected
bread industries in the UK. Baking schools closed during this time so when the war
did eventually end there was an absence of skilled bakers. This resulted in new
methods being developed to satisfy the world’s desire for bread. Methods like: adding
chemicals to dough, premixes and specialised machinery. These old methods of
baking were almost completely eradicated when these new methods were introduced
and became industrialised. The old methods were seen as unnecessary and financially
unsound, during this period there were not many traditional bakeries left (Time,
2017).
The bakery industry today offers immense opportunities for bakers,
decorators, trainers, process, managers, distributors and many has increased the jobs
for the people. It provides vast employment opportunities for the youth also. Trained
professionals are getting high salaried jobs in India as well as abroad. India’s exports
of the bakery products have also risen which is helping in the growth of the economy
of the country. Bakery products have also given some relief to the women. In the

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early days females had to prepare food all the time with no time to yet relief. But
now-a-days as women are also getting professionals, they have less time to give at
home and family. The growth of the bakery products has reduced the responsibilities
of kitchen. They can now easily prepare food with the readymade food items which
need less labour and time. Increased awareness of the bakery products has reduced the
burden of the females in the society. People going out of home can easily satisfy their
food needs. Thus the bakery products have solved many problems of the people (Giri,
2016).

Bakery products also solve the problem of preservation. These products can be
stored for few days and do not easily get spoiled. As other food items lose their taste
when stored for some time but the bakery products do not lose their taste. People
living away from home can easily store these food items. The bakery products have
reduced the dependence on females for satisfying their food requirements. Increased
demand for the bakery products has helped the primary sector of the country i.e.
agriculture. Almost all the bakery products are made from the wheat and dairy
products. There is a great demand of these agricultural items all over the world.
Farming has become now more commercial. Farmers grow the crop and sell at
competitive prices in the national as well as international market. These bakery
products have brought prosperity to the farmers all over the country. Likewise, the
demand for the dairy products has also experienced a hike all over the world. The
cattle owners get attractive prices for their products. Milk and milk products are in
great demand from the last few decades. Increased earning has improved the standard
of living of the people of rural areas which helped in the overall development of the
country as more than half of the population of our country is living in rural areas. The
agricultural and dairy products have raised the quantity of exports of the country and
thus contributed in balancing the trade of the country. Bakery products have
globalized the market facilitating the producers to sell their products profitably (Sahi,
2012).

Advertising is a form of communicating information, in persuasive purposes


for products (goods, services and ideas) by acknowledged sponsors through numerous
media. Albert Lakert, also known as the father of advertising, defined advertising as
“salesmanship in print, driven by a reason why” (William, 2012). Advertising is
directly related to the groups of people, rather than to individuals and therefore, it is a

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non-personal or mass communication. Those individuals could be consumers, people
who buy products or business people who would buy large quantities of products for
resale in their stores. Mass communication in advertising is very important, because
the whole purpose of advertising would be getting the message across to those who
will purchase goods, to consumers. Advertising also helps in promoting services and
ideas. In terms of the channel of communication, its purpose is to be a medium. An
advertising medium is any non-personal means used to present an ad to its target
audience. For example, we have radio advertising, television advertising, newspaper
ads, and more. Advertising is just one type of marketing communications. Marketing
communications are the various efforts and tools used to communicate with customers
and prospects, including solicitation letters, newspaper ads, event sponsorship,
publicity, telemarketing and many more (McDonald and Scott, 2007).

The history of advertising reaches to the preindustrial age. Preindustrial age


indicates the beginning period of written history and approximately the start of the
nineteenth century. Up to the industrial revolution, advertising and production
remained primarily a local phenomenon. Items such as land, slaves, and transport
(goods and services) were the one who were promoted (Wedel, 2000).

The history of advertising in Nepal can be viewed in between two periods;

1) Pre-2007 BS (pre- 1951AD) and

2) Period 2007-2046(1951-1990 AD)

Nepal’s first printed form of advertisement in Nepali language was published


in a cover page of a book called Mokshashiddi, by Krishna Giri in 1919 BS. This
advertising announced another book being brought out by Nepal Manoranjan Press,
which is the only authentic document on advertisement of Nepal. Likewise, the
second advertisement was found published after twenty-six years in 1945 BS. It was
announcement of forth coming monthly publication ‘Gorkha Bharat Jivan’ in the
cover page of book ‘HasyaManjari’ printed from Baneras. One of the most important
and influential advertisements in Nepal was published during 1950s BS in Sudha
Sagar, considered as the first newspaper of Nepal announced the publishing of a book
viz. ‘Nalopakhyan’.

Gorkhapatra appeared on 24th Baishak, 1958 as a weekly newspaper; in its


first publication it published the rate for advertisement in the paper. We can say that

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advertisement was recognized as the source of revenue for the media even while
publishing Gorkhapatra. Since then, in the name of public notices, government orders
and sanad advertisements were seen in the newspaper. The first commercial
advertisement was published in Gorkhapatra in 1984 BS. The advertisement thanked
Shree 3 Maharaj and announced on the opening of new petrol shop. In 1985 BS,
another commercial advertisement was published in the name of ‘The Himalyan
Motor Trading Company’. Bhet Narayan of Kathmandu provided both the above
advertisements.

The Rana Regime came to an end on 7th Falgun, 2007 BS. This resulted in the
establishment of democratic system in the country. The new political system in the
country brought significant changes in media, especially towards the rise in quantities
of newspapers and rise in readership, these factors created an environment for
advertising in the newspapers. But lack of industrialization and economic
development in the country made it difficult for the publications to get independence
and develop professionalism. The newspapers were either supported by the political
parties or were government owned.

In 2027/2028 music was used for advertising. The early advertising was
mostly broadcast live but after the construction of Photo-concern studio,
advertisement was then recorded here. Likewise, Ratna Recording Sansthan operated
advertising service in the country and paid the total cost. Television advertising
started after the establishment of Nepal Television on 17thMagh, 2041, test
transmission was conducted from 29th Shrawan 2042 to 14th Poush 2042. During this
period advertising was broadcast from the Nepal Television.

The situation after the restoration of democracy in 2046 (1990) paved the way
to the development of private media. The open economic and market policy,
international relationship, credibility of print media, rise in the number of newspapers
and the electronic media all increased the volume of advertising. Today advertising
has been recognized as the cornerstone for development of media.

The rise in newspapers, FM radios and television channels after 1990 has
brought competition in the media in search for more advertisement. Towards the
beginning of 1990s government owned media were main hosts for advertising
products because of their large circulation, reach and capacity. But after the decade of

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1990’s, the rise in private media has enlarged the market and transaction of
advertisement. However, there have not been significant studies on the market of
advertising in Nepal even today.

Buying Behavior from the Perspective of Bakery Products

Buying Behavior is the decision processes and acts of people involved in


buying and using products. Consumer buying behavior refers to the buying behavior
of the ultimate consumer on the market; what to buy, from where to buy, how often
and when to buy and how much money is spent on shopping. Consumer buying
behavior is based on individual characteristics, habits and preferences, which are also
affected by external factors such as advertising and economic situation. Therefore,
consumer buying is very much influenced by cultural, social, personal, and
psychological factors (Bowen et al., 2006).

Culture is the most fundamental determinant of a person’s wants and behavior;


consisting of the basic values, perception, wants, and behaviors that a person
constantly comprehends in the society surrounding him. Therefore it influences
people´s decisions that they make every day, even though they might not notice it
(Pandey & Dixit, 2011).

A consumer’s buying behavior is also influenced by social factors; consumer’s


reference groups (face-to-face), aspirational groups (admired groups an individual
would like to be part of) membership groups such as family, friends, co-workers and
social roles and statuses. For example an influence of a family in honey consumption
is high. Several consumers have inherited the use and different preferences of honey
from their parents or grandparents. They have al-ready been introduced its intended
use as a child. This also reflects to their buying behavior later on in their life (Kotler
et al., 2008).

A consumer's decision is also influenced by personal factors such as age and


life-cycle stage, occupation, economic situation, lifestyle, and personality and self-
concept. For example with time goods and services that people consume change.
Taste changes and how people perceive things, for instance, food in early life may be
replaced by another perception, with age comes the change in people’s preferences.
This applies also bakery products; taste, a structure of bakery product, origin of
bakery, packaging, etc. (Bowen et al., 2006).

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A consumer´s purchases are influenced by four major psychological factors:
Motivation, perception, learning ability, as well as beliefs and attitudes. When honey
and its usage are considered, often consumers’ attitudes are very positive due to its
health effects. Despite the fact consumers do not always act in accordance with their
attitudes (Pohjalainen, 1994).

Consumers feel the bakery product as an adjunct to their diet and they do not
classify it as a compulsory part of their daily diet. Therefore, there might not exist
strong motivation to purchase the bakery product, even though consumers are aware
of its good qualities. This makes it even more important to create a need and motivate
a consumer to purchase bakery products (Pohjalainen, 1994).

Various types of bakery products are produced in bakery industries in


Birendranagar of Surkhet. There are many bakery industries like Suraj Bakery
Udhyog, Gangamala Bakery Udhyog, etc. in Birendranagar of Surkhet. Bakery and
baked goods categories like bars, breads (bagels, buns, rolls, biscuits and loaf breads),
cookies, desserts (cakes, cheesecakes and pies), muffins, pizza, snack cakes, sweet
goods (doughnuts, Danish, sweet rolls, cinnamon rolls and coffee cake) and tortillas
are produced in Birendranagar of Surkhet. Bakery products in Surkhet are in common
use and are very important in Birendranagar of Surkhet. In modern days, bakery
products are becoming one of the most essential food items in human diet due to
readymade availability and high nutritive value. These are the most consumable wheat
based products. Wheat and other shortening agents are required as raw materials to
manufacture these products easily available in Surkhet. The plant and machinery and
the technology required to manufacturing these products are not completely available
in Nepal. Since the consumption of bakery products is increasing rapidly day by day,
the demand also is increasing enormously. So, though there are a lot of organized as
well as private sectors existing, but the demand will not meet totally by them in near
future. So far, new entrepreneurs, it may become very good sector for investment.
Thus, the bakery products have great importance for our society from all of these
views.

1.2 Justification of the Study

Advertising is costly; often its effects are uncertain, and sometimes it takes a
while before it makes any impact on consumers’ buying behavior. It is for these

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reasons that many companies think it appropriate, occasionally to reduce expenditures
on advertising or to entirely eliminate it. On the other hand, some companies
sometimes consider it unnecessary to advertise when their brands are already enjoying
great success without advertisement. Such behavior implicitly fails to consider the
fact that advertising is not just a current expense or mere exercise but an investment.

There are various advertisements on media on different types of products so


there is a competition of products in the market. Given this situation, the products
record high sales within Birendranagar, Surkhet. Today, the massive introduction of
the products in advertisement has made way for competition as so many people who
are involved in buying and selling now share their resources among the different
brands in order to maximize profit. These customers hear more of the product of their
chose from advertisement. As a result, a good percentage of the customers would no
doubt change from consumption of one product to another. Hence, there is a need for
a study which would best find out the impacts of advertisement on customers'
responses towards bakery products.

This study focuses on consumer´s behavior and the impact of advertising on


bakery product images. This study was carried out in Birendranagar of Surkhet in
order to find out the customer of their bakery products, the advertising and if the
customers are affected by the advertisement of bakery products. The focus of this
thesis is mostly on effectiveness of advertising. The situation at a targeted customers
was also investigated, in order to know the factors that affect bakery product
perceptions of potential customers. This information could help the bakery companies
to reach potential customers more effectively through advertising. The study mainly
discusses advertising and factors which affect customers’ product perceptions and
product images. The study would also be beneficial for the bakery industries to use
advertisement more effectively to attract customers.

1.3 Objectives of the Study


The general objective of this study was to find out the impacts of advertising
on buying behavior of customers towards bakery products. The specific objectives of
this study are as follows:
1. To find out the impact of price on buying behaviour of customer towards
bakery products.

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2. To analyze the impact of advertisement on buying behaviour of customer
towards bakery products.
3. To determine the impact of product brand on buying behaviour of customer
towards bakery products.
4. To find out the impact of layout on buying behaviour of customer towards
bakery products.
5. To determine the impact of location of bakery industry on buying behaviour of
customer towards bakery products.

1.4 Research Questions of the Study


This study has tried to find the answers of the following research questions:
1. How does the price of bakery product affect on buying behaviour of customer?
2. What are the impacts of advertisement on buying behaviour of customer
towards bakery products?
3. In what ways does the brand of bakery product affect on buying behaviour of
customer towards bakery products?
4. What are the impacts of layout on buying behaviour of customer towards
bakery products?
5. How does the location of bakery industry affect on buying behaviourof
customer towards bakery products?

1.5 Conceptual Framework of the Study

This study has been carried out to find out the impacts of advertisement on
buying behaviour of customers towards bakery products. In this study, price,
advertisement, brand, layout and location have been taken as the independent
variables while customers’ behaviour has been taken as the dependent variable. On
the basis of the objectives of the study, a conceptual framework has been developed
which is as follows:

Independent Variables
- Price
- Advertisement Dependent Variable
- Brand - Customer Behaviour
- Layout
- Location

Figure 1: Conceptual Framework of the Study

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Price

A value that will purchase a finite quantity, weight, or other measure of a good
or service. As the consideration given in exchange for transfer of ownership, price
forms the essential basis of commercial transactions. It may be fixed by a contract,
left to be determined by an agreed upon formula at a future date, or discovered or
negotiated during the course of dealings between the parties involved.

Ollila (2011) stated that high food prices can be a barrier to healthy eating if
food products are perceived as expensive and the consumers are not willing to accept
the higher prices. Understanding the role of price in food purchase situations is
important, but only a few studies document attitudes towards expensiveness or
cheapness in foods. In this thesis, the role of food price in food choice and consumers’
attitudes towards food prices were investigated and the aim was to measure the food
price attitudes. Food price attitudes were hypothesized to have an impact on
consumers’ willingness to pay judgments and their willingness to buy premium-priced
food products. Using qualitative data consisting of 40 thematic interviews the
experiences of the expensiveness and cheapness in foods were explored by using
functional food products as a target product category.
Advertisement
Advertising is a means of communication with the users of a product or
service. Advertisements are messages paid for by those who send them and are
intended to inform or influence people who receive them.
Ampofo (2014) seeks to examine the effects of advertising on consumer
buying behaviour considering demand for cosmetic products by residents in and
around Nagarabhavi, Bangalore. Using a sample of 100 respondents of mostly the
young, we ran regressions and found that advertising does influence expenses
incurred on cosmetics products but much influence on the purchase of cosmetic
products results from one’s income or pocket money available, and other factors like
price of the product, the brand and other people’s recommendation concerning the
product. We concluded that, advertising satisfies the needs of the firm and the wishes
of consumers. Its role cannot be replaced by any other means. Therefore firms must
strategize and know when and where they should advertise. The consumers need to be
informed about products and until that is done, the products of firms will still be in
stores with no demand for them.

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Brand
A brand is a unique design, sign, symbol, words, or a combination of these,
employed in creating an image that identifies a product and differentiates it from its
competitors.
Kumar et al. (1987) observed the factors influencing the buying decision making of
200 respondents for various food products. Country of origin and brand of the
products were cross- tabulated against age, gender and income. Results revealed that
the considered factors were independent of age, education and income. The brand
image seemed to be more important than the origin of the product, since the
consumers were attracted by the brands.
Layout
Layout is the way that something is arranged. The bakery industry is affected
by many of the current trends and naturalness (clean la-bel) and wellbeing is
emphasized in regard to bakery products. New products and product improvements
are continuously being launched. Because of this, advertising becomes an important
aspect especially when a large amount of purchasing decisions are done in-store. One
of the main ways to advertise products in the store are through in-store dis-plays.
Understanding how consumers actually look at in-store displays and how effective
they are in changing consumer behavior into a purchase decision at the point of
purchase will inform the best execution and layout of the display. The main aim of the
study was to get a better understanding of what an effective in-store display in
consumer decision making is. This was done by assessing three different aspects of
in-store displays: (1) the visual attention attracting ability, (2) if the intended
communication and content is comprehensible on the in-store display and (3) if the in-
store display can positively influence consumer decision making. The primary
methodology included usage of eye-tracking equipment with a complementary
questionnaire and the research was conducted by way of a two-phase experiment
(Ekman, 2016).
Location
Location is a place or position of a place or thing. Souki, Reis and Moura
(2015) show that the location of bakeries is an essential aspect for consumers in the
purchase decision process, because establishes the distance from consumers’ home to
the bakery. Thus, 76.8% of consumers prefer to buy baked products at bakeries near

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their homes, and 12.0% prefer to buy them at bakeries near their workplaces. In
addition, 11.0% of them use to buy them at bakeries located along the way they used
to go through. Only 0.2% of them did not provide any answer. The mean distance
from consumers’ home to the closest bakery they go often is about 2.46 kilometers.

1.6 Research Methodology


This section is concerned with formulating the plans and procedures,
measurement instrument development, methods for data collection, analysis and
interpretation. It deals with justification the methodology used for finding solutions to
the research problems. The strategy of sampling design (i.e. universe of population,
sampling frame, and sample selection technique and sample size) has also been
discussed. It also describes the participating organization and outlines the methods
gathering the data, characteristics of data and statistical tools to be used to analyze the
data.

1.6.1 Research Design


Research design is a master plan specifying the methods and procedures for
collecting and analyzing the needed information. The research design that the
researcher adopted in this study was the survey research design. Survey refers to the
collection of data through different methods such as interview or questionnaire. This
method is widely used in research process. With the help of survey, one can easily
analyze the individuals' opinion on certain topics. A survey may focus on opinions or
factual information depending on its purpose. All surveys involve administering
questions to individuals. Survey research design is an efficient method for
systematically collecting data and generalization the result. Therefore, this study
adopted quantitative research design.

1.6.2 Population of Study


The target population for the study defined to includes the customers of bakery
products in Birendranagar Municipality of Surkhet district.

1.6.3 Sampling Design


Sampling method is one of the important processes of sample selection during
survey. In survey process, sampling helps to describe and analyze the characteristics,
attitudes of the target population. The information was collected from the customers

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of different bakery products. The sample size was 55 customers of different bakery
products.
For this research purpose, both the primary and secondary sources were used
for data collection.
i. Primary Source
Primary data have been collected using structured quantitative strategy.
Survey research design was selection to collection primary data.
ii. Secondary Source
Secondary data were collected different websites of online published journals,
articles, books, unpublished thesis. These were obtained through library, e-library and
different Google search engine.

1.6.6 Questionnaire Development


Questionnaire has been developed in Nepali and English language because all
the respondents were not to understand English language. Some questions were self-
developed and some have been adopted from previous researches. Most of the
questions have been formulated in close-ended patterns. All questions have been
formulated in multiple chose categories questionnaire. Out of them, questions were
respondents profile questions and subject related questions.

1.6.7 Questionnaires Administration


Direct communication has been made with the respondents to collect
information and discuss about the survey work. Then the respondents were requested
to set the proper time for visit. Same size of the survey was 55 customers of different
bakery products. Questionnaire were self-administered to the customers and discussed
individually. Based on this, all the questions were self-filled up.

1.6.8 Data Analysis and Presentation


Preliminary cleaning and formatting is the first step in the data preparation.
For the analysis of data, frequency, percentages were used to describe the nature of
data. After analysis of each question, the figures have been shown in different table as
per the requirement of the subject matter.

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1.7 Limitations of the Study

Today's world is dynamic. Everything existing here are of limited characters.


Every principle, role, formula and conditions are applied within limitations. Likewise,
this study cannot escape from limitations. Therefore, the limitations of this study are
as follows:

1. This study is for partial fulfillment of Bachelors in Business Studies course of


Mid-Western University (MU). So, it may not be useful for other aspects.

2. Time and resources constraints are other limitations of this study.

3. This study is limited to only the customers of different bakery products. Thus, the
result will not be applicable to other groups of bakery customers.

4. The respondents are limited upto 55 only.

5. The data are collected from the customers of bakery products in Birendranagar
Municipality of Surkhet.

1.8 Organization of the Study


This study has been organized within the following chapters:

Chapter I: Introduction
Chapter I has included the background of the study, justification of the study,
objective of the study, research question of the study, conceptual framework of the
study, research methodology, limitations of the study and organization of the study.

Chapter II: Data Presentation and Analysis


Second chapter includes the presentation and analysis of data. This chapter
also includes the finding of the result

Chapter III: Summary, Conclusion and Recommendations


Third chapter includes the summary, conclusion and recommendations

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