CHAPTER 1

INTRODUCTION TO ONLINE BUYING BEHAVIOUR

At global economic level, India is one country among the BRIC nations which has

established itself as an economy with emerging markets. Since liberalization, the

country has witnessed growth at rate which is very remarkable. With changes in

most of the sectors, capital markets, infrastructure, banking, insurance, etc. are the

sectors where India has witnessed a high pace of growth. With reforms in business

sectors and the revolutionary changes in Information Technology sector, the

choices of consumers’ with reference to shopping situation and payment

mechanisms have also broadened. Buyers now have the alternative option of

buying a product or availing of a service from offline as well as from online shops.

With the increasing penetration of internet, these methods of purchasing have

become popular. Today people have many choices with reference to buying

venues, but the most recent one is buying through internet i.e. online shopping

mode.

Nowadays, the Internet is being widely used for various purposes and has become

part of daily life. At its inception internet was used as a medium for

communication only but with time it has become a source to learn, entertain and

most recently a medium for the exchange of goods and services between buyer and

seller. The internet now has resulted in a new mode of exchange between buyer

and sellers and has created an alternative for the traditional marketplace. Shopping
 Introduction to Online Buyimg Behaviour

through the internet has brought a different dimension to commercial activities.

Compared to traditional shopping, consumers are preferring the internet as

shopping medium because of its characteristics like ability to view and shop at any

time from any corner of the world, feature like searching information about

commodities, place a query / review or give purchase orders. Along with these

features, convenience and comparatively lower price are some additional features

resulting in acceptance of internet as a new shopping avenue.

1.1 Definition of Online Buying Behaviour

Behavior is the apparent, noticeable response in a given situation with respect to a

given target.

Use of the Internet for retail shopping has expanded immensely in recent years and

has had a profound influence on the shopping process for many consumers. Online

buying behaviour is a type of behaviour which is exhibited by customers while

browsing websites of an e-tailer in order to search, select and purchase goods and

services, in order to fulfill their needs and wants. It’s basically a behaviour which

is reflected by the purchaser during the process of buying through the internet.

1.2 Online Shopping

While shopping online,every customer desires convenience, speed, price benefits,

product comparison facility etc. It is not that these features are not available in

traditional shopping methods. But due to changes in life style, the notions of these

features have changed among the buyers. Now individuals are finding it difficult to

2
shop from traditional channels due to their changed lifestyle. As a result of all

these issues along with the technological advancements, a new mode of shopping

i.e online shopping also called as electronic shopping has emerged. The Internet, in

the field of shopping, has brought sea changes in the mindset of customers with

reference to convenience, speed, price, product information and services associated

with online shopping. The internet has provided marketers with a completely new

way to create value for customers and build relationships with them' in the form of

online shopping. Online shopping is the process whereby consumers directly,

without an intermediary service, buy goods or services from a seller in real-time

over the Internet. One way of doing electronic commerce is online shopping. In

online shopping, electronically the sale or purchase of transaction takes place 1. It

is also referred to as e-shopping where‘e’ stands for Electronic

Shopping.Electronic shopping is defined as a computer activity/exchange

performed by a consumer, via a computer-based interface, where the consumer's

computer is connected to and can interact with, a retailer's digital storefront to

purchase the products or services over the internet.

An e-shop allows the customer to browse entire range of product or service offered

by e-vendor, view pictures of the products, along with the complete description of

the product specifications, including features and prices. On online stores with the

help of “search” features e-shoppers can easily search out specific models, brands

or items 2. An online shop is also referred to as , e-shop, e-store, internet shop,

webshop, webstore, online store, or virtual store. In present time almost all the big
retailers are now offering their online shops. These are also known as e-tailers and

their online retail shops are sometimes known as e-tail.

1.3 Historical Overview of Online Shopping

Today internet has changed the way we shop. In present day one of the most

popular activity on the web is shopping. Online shopping has got tremendous

charm in it as one can shop online at any time , from anywhere. It also offers to

compare the product features and their prices by sitting at home itself. The history

of online shopping dates back to the year 1979.The origin of online shopping is

linked with the invention of videotex being invented in 1979 by Micheal Aldrich

in the UK. The term e-commerce was originally generated to explain the process

of execution of business activities taking place electronically by making use of

technologies like Electronic Data Interchange (EDI) and Electronic Funds Transfer

(EFT). EDI and EFT are considered as the backbone of e-commerce. These

technologies only, made it possible to exchange information and execute

transactions like the placement of purchase orders and generation of invoices

electronically. 1980 to 1990 was the period of the growth of e-commerce industry

around the world. This growth took place because of the invention of ATM’s and

introduction of debit cards. During this period the major players which led to the

growth of e- commerce include Boston Computer Exchange, Minitel and

Electronic Mall. All these were electronic marketplace launched by different

countries. In the year 1990 biggest achievement till date of e-commerce took place.

In this year Tim Berners-Lee introduced the first ever web browser known as
World Wide Web. In the very next year, it started using it for commercial benefits.

In 1994 Netscape released a new browser which helped the people visiting any

website by typing its name in navigator browser. Along with this Netscape also

issued Secure Sockets Layer (SSL) encryption to address security issues while

doing online transactions. Another major milestone which took place is the

introduction of paypal system in 1998. Paypalis the company which provides an

alternative (through the internet) for cash or check payment. As a result of these

two inventions, many European and American businesses created their e-

commerce websites between 1998 and 2000. Some of them were Amazon, e-Bay,

Alibaba,Indiamart. Till the year 2000, a large number of online vendors came in

the industry with the speculation of ever increasing profit with time.

Unfortunately, in the same year, the e-commerce market went down and many of

players were wiped off from the industry. This downfall even could not stop the e-

commerce industry to grow. Many new players and even the retailers who were

having the brick and mortar stores started offering their products online by means

of their online websites. After year, 2000 to till date the e-commerce industry kept

growing with day by day increasing number of players. Even like an offline

business,many big e-commerce companies started acquiring small e-commerce

companies in order to achieve higher levels of profit.Some e-commerce companies

like Amazon have also issued their IPO so early in the year 2011 only.After 2000

various different models of E-Commerce came into existence.Along with this it

has been observed that hundreds of e-commerce services such as online food

ordering, media streaming, online advertising, online marketplace, brick and

mortar retailers, e-commerce payment systems and online store frontshave

emerged.

1.4 Timeline of Online Shopping

 Year 1979 was the year of conception of online shopping being mark by

invention of electronic shopping by Micheal Aldrich.

 After conception ,the next milestone took place in 1982 with the launch of

Boston Computer Exchange for selling used computers.

 In 1982 , in France, a pre-internet videotext online service by the name of

Minitel was introduced. [5]

 Year 1984 was marked for the launch of online marketplace “Electronic

mall”by Compuserve.It was popular for offering product images in all

color. [6]

 In 1987, Swreg, an online payment processor for global businesses began to

provide software.[7]

 In 1990, WorldWideWeb, the first ever web browser, was introduced by

Tim Berners-Lee.With help of worldwideweb,e-commerce websites can be

easily browsed. [8]

 Year 1992 was the year for the launch of an online marketplace for selling

books ,named as Book Stacks Unlimited.[9]

 After world wide web, in 1994, another web browser by the name Netscape

Navigator was introduced by Netscape. [10]

 1995 was the year known for launch of Amazon.com, an online

marketplace by Jeff Bezos. [11]

 In the same year,one more online marketplace launched was as Ebay.com

which was earlier known as Auctionweb. [12]

 In 1996,An Indian online marketplace , Indiamart was launched. [13]

 In the same year, Korea also launched an online market place called as

Ecplaza. . [14]

 The year 1998 is marked for the launch of very well-known online payment

system –Paypal. [15]

 In 1999, an online marketplace for shoes and other apparels was launched

by the name of Zappos. [16]

 In the same year China launched Alibaba.com, an online marketplace. [17]

 In 2000, an online marketplace,Stubhub was launched for selling tickets of

events. [18]

 In the same year,Google launched an online advertising service called as

Adwords.It allowed users to show an advertisement in Google search

results that is related to the viewer's search. [19]

 In the year 2000,Walmart launched its website so that its customers’ can

shop online. [20]

 In 2001, an online payment platform was launched by the name Skrill. [21]

 In the same year ,a business-to-business online shopping system was

launched by Costco.[22]
 Again in 2001 ,an online marketplace for technology was launched by the

name Newegg. [23]

 In 2002,Ebay,an online marketplace acquired paypal,an online payment

system in $1.5 billion in stocks. [24][25]

 After 2001, in 2002 another business-to-business online

marketplace,Bossgoo was launched. [26]

 In the same year ,an online delivery service was launched by Safeway Inc.
[27]

 In 2003,Google launched Adsense which allowed users to promote their

goods on the web, based on the product's relevance to the viewer of the

advertisement. [28][29]

 Steam, the digital Right Management and gaming platform was launched at

global level by Valve Corporation in the same year. [30]

 In 2005, Amazon in order to expand,launched Amazon prime Service which

allows users to expedite shipping on any purchases for a flat annual fee. [31]

 Year 2006 is marked for the launch of a prominent storefront service called

as Shopify. [32]

 In the same year Ebay acquired Stubhub.[33]

 In 2007 another popular online marketplace of India,Flipkart was launched.

.[34]

 In the same year, in Seattle, an online food ordering service,Amazonfresh

was started. .[35]

 In 2008,another online storefront service, Magento was launched.[36]

 In 2008, Paypalcredit was acquired by Ebay.com).[37]

 In the same year ,an online gaming marketplace,GOG.Com was launched ).

[38]

 In 2009, an online storefront, Bigcommerce was launched. .[39]

 The same year is also marked for acquisition of Zappos.com by Amazon.

.[40]

 In 2009 itself ,a game changer in the field of payment made for online

purchase was introduced by the name of Bitcoin.[41]

 In 2010, An online marketplace by the name Groupon was launched. .[42]

 In 2011, an acquisition activity of Magento by Ebay.com took place. .[43]

 In the same year google wallet like paypal was launched. It was a prominent

online payment system. .[44]

 In 2012, an online food ordering and delivery system, Instacart was

launched. .[45]

 In 2013 ,Google Express ,an online food ordering service like AmazonFresh

and Instacart was launched.[46]

 In the same year, China was declared as country with world’s largest e-

commerce market.[47]

 In 2014, an online payment system in form of mobile app called as Apple

Pay was launched.[48]

 2104 was also the year for the launch of an online marketplace jet.com.[49]

 In 2015, like Apple pay ,Android Pay was launched by Google.[50]

 In the same year Pinterest for allowing the users to sold their pins to others,

entered e-commerce industry by adding buyable pins. .[51] [52] [53]

 In 2016, declaration of acquisition of Jet.com by Walmart was announced.

.[54]

 In the same year Alibaba, an Chinese online marketplace announced about

acquisition of a controlling stake in Lazada Group. .[55]

1.5 Reasons for Buying Through Online Channel

There exists a large amount of differences between online and offline shopping

channel. The biggest being the intangibility of online shopping channel. Inspite

this barrier a large portion of the population is accepting this mode of shopping

because of below-mentioned advantages.

 Convenience

The online shops allow its customers to shop for all 7 days in a week without any

time limitation. Unlike offline shopping, in it, there is no time limitation for

making the purchase. If an e-shopper has laptop or mobile with internet connection

he or she can do the shopping from home or office or anywhere. Online shoppers

even don’t have to wait for the shop assistant to help them for making purchase.

Payment for purchase made takes place with a click of the mouse. One of the

problems which customers have to face at the time of festivals and special events

is the huge crowd. Many times it happens that customers have to do their shopping

in a hurried manner because of the crowd. Online shopping channel provides

convenience in this matter also. There is no concept of crowds while shopping

through. Along with shopping one can search information about merchandise very

conveniently while shopping through online channels. It also provides convenience

with reference to tracking of order status, delivery & shipping status.

 Time Saving

Online shopping channel helps customers save a lot of time which is consumed in

case of offline shopping. In the case of online shopping, customers need not to go

anywhere for shopping, they need not stand in long bill queues , even they don’t

have to face the crowd while shopping. All these features of online shopping

results in saving of consumersprecious time. By means of online shopping,

customers can easily send gifts to their relatives and friends on especial occasions

thereby saving their travel time.

 Ease of Comparison

In online system, one can easily compare merchandise and its pricing at different

websites with the simple click of a button .Now there are many websites available

which are specifically made for comparison purpose like www.compareraja.in,

www.policybazzar.com, etc.By comparing through these website one can easily

choose the best deal for purchase.

 Large Variety

A physical store is either single branded or multi-branded. In both type of physical

stores there arises limitation either related to the availability of several brands or

limitations related to the availability of variants of a product of a particular brand.

No such problems arise with virtual stores. In a virtual store, a shopper can easily

search and purchase several products and multiple products at a single location.

Even purchase of an international brand can be easily made through online

shopping mode from any corner of the world.

 Lower prices and discount offers

E-shoppers can purchase the merchandise at comparatively lower prices through

online shopping channel. The reason being no involvement of middlemen between

buyer and seller in supply process. Online retailers time to time provide discount

offers to their customers. They generally launch sales with heavy discounts offers

on festivals, at the end of a season and on independence and republic day. Due to

the elimination of maintenance, real-estate cost, the retailers are able to sell the

products with attractive discounts through online.

 Fewer Expenses

In the case ofconventional shopping many time buyers spend money on activities

like eating out, traveling, impulsive shopping etc. which results in high level of

money expenditure than the required one. Such type of expenses is not there in

case of online shopping.

 Discreet Purchases

Shopping throughonline modes allows a shopper to make the purchase in privacy.

In this mode of shopping, shoppers don’t face the problem of other people or

salesperson watching their activities like what they are purchasing, how much time
they are consuming in taking purchase decision etc. Thus the e-shoppers are

rescued from the embarrassment occurring because of all these issueswhile

shopping through online shopping mode.

 Less compulsive shopping

In offline mode often it happens that we end up buying those products which we

don't really require. The reason being pressure to purchase exerted by shopkeepers

by using different selling skills. Sometimes, it also happens that because of limited

choices in the offline shops that customer goes to, one has to end up the purchase

process by making a choice from those available. In online mode, no such situation

arises with shoppers.

1.6 Online Shopping Scenario in India

In past few years innovation in technologies relating to telecommunications has

resulted in changes in many facets of our lives including the way of information

searching, the way we make a booking for our travel plans and the way we buy

products or services. Today undoubtedly purchasing through conventional brick

and mortar retail stores is preferred, but along with it e-commerce or electronic

commerce is spreading its roots as an alternate mode for shopping in India . The

most popularly known form of e-commerce or electronic commerce is online

shopping.

The spread of e-commerce industry today is found around the world. Presently

the Asia-Pacific region is becoming the leader of the e-commerce industrywith 33

percent of the global market in 2015 which will reach to over 37 percent in 2018.

In Asia Pacific region China is the country with largest e-commerce market in the

world. India comes after China at the second position. Recent statistics have

shown that sales revenues generated through Indian e-retailing sector (Annexure

B-1) have grown extremely high from 2012, from a value of 2.3 billion U.S.

dollars to an estimated 17.5 billion U.S. dollars in 2015, representing a growth

equal to eight times. In parlance with contribution in overall sales of Indian retail

sector, the Indian e-retailing segments contribution is equal to 0.9 percent of

overall to reach up to 1.4 percent in 2018.

The e-commerce market of India is considered as one of the fastest-growing e-

commerce markets at the global level, (Annexure B-2) because of rising number

of new internet users doing online shopping due to low rated of mobile

connections and various other advantages of online shopping. As per information

provided by Statista 2016, till 2016, 26 percent of the local population was using

the internet; which is ten times of those using it in 2006. Likewise, there is an

expectation of increase in number of Indian number of digital buyers up to 41

million by 2016 (Annexure B-3) which in percentage is equal to 27 percent of the

total number of internet users (Annexure B-4) in the country.

The above data represents that online retailing is expanding its wings in the

country at an astonishing pace. The most prominent reasons driving the online

buying are discounts & offers provided by the e-tailersand option to make

payment by cash-on-delivery mode. Besides these two reasons,one of the reasons

along with others, observed in metro cities, is their busy lifestyle. Also, the rising

internet penetration and broadband availability, and growing culture of Smart

phones and tablets are motivating people to buy products online.

With reference to latest trends running in Indian online market according to report

produced by sokrati.com in June 2016 Indian men shop online three times more

than Indian women. Among the payment modes offered the most preferred one is

cash on delivery by Indian shoppers. Indian e-shoppers majorly purchase clothing

and accessories .After it is mobile accessories. The majority of purchase orders are

placed during business hours only. Awareness about it is found more in metros or

tier-I cities as compared to tier-II & III cities.

1.7 Online Shopping and Consumer Behaviour

Internet today has brought the huge gamut of changes in the way we search or buy

products. With ever increasing number of internet and its benefits familiar

consumers, online shopping is becoming popular day by day on grounds of

convenience, cost, information and choice. Commercial organizations decision of

incorporating the World Wide Web into their business for offering the facility of

online purchasing has made 'online shopping' a part of our lives. As we know that

goal of every businesses' is to earn profit through sales. Thus for making the sale

and other related activities, it is of paramount importance for a business house to

have the knowledge and toanalyse consumers' behaviour. In the case of online

shopping as it is not so old concept as well as there exists the intangibility issues it
becomes much more important to understand key issues and factors affecting the

buying behaviour of online customers or consumers.

1.8 Consumer Behaviour

In an environment of fierce competition among the marketers, in order to convert

the needs and wants of the prospective consumers into a purchase order, it is very

important for marketers to understand the target customers and factors lying

behind their purchase behaviour. According to Kotler and Keller (2011), various

ways adopted by individuals or groups, for purchasing and disposing of goods,

services, ideas or experiences, with a goal to satisfy their needs and wants is

referred to as study of consumer buying behaviour . One more definition given by

Kumar (2004) consumer buying behaviour “refers to the buying behaviour of final

consumers, both individuals and households, who buy goods and services for

personal consumption”,Schiffman and Kanuk (2007) describes buying behaviour

of consumer as behaviour that consumers show when they choose and order the

products or services in conformity of their resources available with an intent to

achieve a level of satisfaction for their needs and desires. Thus the behaviour of

consumer while purchasing involves product search, product evaluation where the

consumer evaluates different attributes, purchase and consumption of the product.

For manufacturers as well as service providers it is of utmost importance to have

an understanding of behaviour of consumers while buying and the ways they

choose their products and services. This understanding will provide them a leading

edge in competition. Studies in the field of consumer behaviour help the marketers
to apprehend about causes lying behind consumers purchase of a particular goods

and services. Such studies also help in determining which products are demanded

in the marketplace, which has become out-of-date, and how best to present the

goods to the consumers. Behaviour of a consumer is considered to be complicated

as the mindset and attitude of each consumer differs from other with reference to

purchase, consumption and disposal of product (Solomon, 2009). But generally,

every consumer undergoes a standard process while making the purchase of

merchandise. The consumer buying process is explained in succeeding section of

the chapter.

1.9 Consumer Buying Process

A consumer decision-making process is generally explained as a process consists

of several sequential steps / stages. The model is summarized in Figure 1. This

model includes five steps, starting from need recognition and problem awareness

related to the product and searching the information of the same followed by

alternative evaluation, making the purchase decision and finally post purchase

evaluation.
Figure 1.1: Consumer Buying Process

1.10 Stages of Consumer Buying Process

I. Need Recognition / Problem Awareness

The very first step of the buying process is the identification of need of a customer.

The purchase decision of a customer is entirely dependent on need recognition by

a customer. This recognition happens when there is a discrepancy between the

consumer’s actual situation and the and the desired one. This discrepancy arises

due to changes either into actual or desired situation of a customer. The consumer

will then work to remove this gap between actual and desired situation if he/ she

provides a high level of importance to the need identified. It can be interpreted as

if the need is really important to be fulfilled then consumer takes will move

forward for the purchase of product otherwise not. However, it is not the case

always.
II. Information Search

The information search process starts with recognition of the problem by the

consumers. The consumer now will gather information about potential product

choices that may meet the needs identified. The collected information comprises

information majorly relating to product features, brand, seller and price are the

major subjects. Sources of information generally are print media, radio, television,

and Internet advertising. Majorly sources of information are divided into two

categories-Internal sources refers to the information availablein consumer’s

memory. This information gets collected in mind of the consumer either from its

earlier experience with product or brand and opinion about it in mind. Generally,

internal sources are the basis of taking a decision regarding the purchase of the

everyday product. But when the consumer doesn’t have much information about

the product or brand then he / she has to switch to another source i.e. External

sources includes information collected from friends or family, customers reviews

or looking at promotional ads on different media or by talking to salespersons.

III. Evaluation of Alternative

After identifying the need and collecting the information from various sources the

consumer now has many alternative solutions to choose from for satisfying the

need. Now the consumer evaluates different alternatives and tries to choose the

one he thinks is the best solution for satisfying his need. While doing so, two

aspects are used to assess all the alternatives. One of the aspect is related to the

objective characteristics (such as the features and functionality of the product) and
the other is associated with subjective characters (perception and perceived value

of the brand by the consumer or its reputation).

Consumer’s level of involvement in evaluation process and importance of

purchase decision for the consumer are two criteria which decide how many

alternative to be considered. On the opposite, the number of considered solutions

will be much smaller for an everyday product or a regular purchase.

IV. Purchase Decision

The purchase decision is the stage which results in the conversion of prospective

customers into actual customers. The consumer steps to the actual buying process

after accessing the characteristic features of the target product and brand and

evaluating all available options. Now the possession of product moves from

marketer to customer. Besides the product features and function ,the buying

decision of customer decision at this stage is also affected by such things as the

quality of his shopping experience or of the store, the availability of a promotion, a

return policy or good terms and conditions for the sale.

V. Post-purchase behavior

The consumer decision-making process ends with post-purchase evaluation. When

a consumer starts using a product side by side he keeps on evaluating it. The

consumer or customer may feel satisfied or dissatisfied depending upon the

performance level of the product purchased. This evaluation will have an effect on

consumer’s future buying decision. If the product experience is satisfying it will

result in minimization of information search and alternative evaluation stage in

case of repurchase made by the customer for satisfying the same type of need. The

ultimate outcome will be gaining of a loyal customer by the seller or brand. An

alternative to it the consumer has to repeat every step of buying process if his / her

experience is average or disappointing. Post purchase evaluation is also connected

with word-of-mouth publicity.

The entire consumer buying process is not something which works in isolation.

There are lot many factors which affect consumer buying process at several stages.

It is very essential for marketers to consider these factors for converting a

prospective buyer into a real buyer.

1.11 Factors Affecting Consumer Behaviour

Consumer behaviour has been always of great interest to marketers. The

knowledge of consumer behavior helps the marketer to understand how consumers

think, feel and select from alternatives offered There are many determinants of

buying behaviour of a consumer like cultural , social, personal , psychological

factors, etc. Although these factors are uncontrollable but then also plays a

prominent role in understanding complicated buying behaviour of a customer.

All these factors work together at all the occasions to mould the behavioural

pattern of consumers. It is interesting to note that the factors, which are responsible

for the behavior of consumers, are complimentary in character.Below are

explained the major factors which generally influence the consumer behaviour.
Figure 1.2 : Factors Influencing Consumer Behaviour

Various factors which influences the behaviour of consumers while buying:-

1. Cultural Factors

Consumer behavior is deeply influenced by cultural factors which comprise of

three sub factors i.e. buyer culture, subculture and social sub classes. Culture

gives birth to traditions, values, norms and attitude of customers along with

various other factors. Culture is the part of every society and is the important cause

of person wants and behavior. When we move from one country to another, the

culture changes. Thus the marketers are required to pay utmost attention while

assessing the impact of culture on buying behaviour. Each culture is a blend of

various subcultures such as nationalities, geographic regions, religions,racial

groups etc. A subculture is a group of individuals who have similar values and

behavioural pattern which is different from surrounding subcultural groups. Every

society possesses some form of social class which is important to the marketers
because the buying behavior of people in a given social class is similar. Social

class can be defined as a division of society wherein the members have similar

interest ,value and show similar buying behaviour.

2. Social Factors

The consumer’s social features of consumers is also recognized as a determinant,

which has a prominent impact on consumer behaviour. The important social

factors are reference groups, family, role and status. Reference Groups refers to a

group of people which influences an individual because an individual is a member

of it or wishes to become a member of it. An individual may belong to many

reference groups at a time. The various reference groups are family members,

friends, neighbor’s co-workers, religious groups, professional groups,Aspiration

group, etc. Next, comes the family of a customer which is taken as primary social

factor or reference group influencing the buying behaviour to a greater extent. In

Indian society, two types of families have been prominently seen i.e. Nuclear

family and the joint family. The basic feature of nuclear family is its small family

size and high level of liberty with individuals take decisions whereas in joint

families, the family size is large and group decision-making gets more preference

than individual. The Role playedby a customer and its status alsohas an effect on

its buying behaviour. With the change in role and status, the buying behaviour of

customers also changes.

3. Personal Factors

Personal factor also referred to as demographic factors in many studies relating to

consumer behaviour. Personal factors include age, gender, education, occupation,

income, lifecycle stage, lifestyle, personality and self-concept'. Consumer’s

aspects like thinking, searching, and processing of information, decision- making

and evaluation of products or services varies because of influence of the personal

factors. Age and life-cycle have prominent influence on the consumer buying

behavior. The taste, preference and behaviour changes with changes in the age and

life cycle phase of a buyer. Income of a buyer also act as predictor of its buying

behaviour. Buyer with high income and high amount of saving generally prefer to

purchase high priced merchandise. With changes in sources of earning or

occupation, the buying behaviour of a prospects shift from one category of

product or brand to another. Lifestyle is another influencing factor which

influences the buying behaviour of a customer. The things or a product in an

individual’s surroundings gives indication about the lifestyle an individual is

living. In order to understand the buyers behaviour it is also important to know

about the buyer’s personality. Personality signifies “the inner psychological

characteristics that reflect how a person reacts to his environment”. The individual

choices for various products and brands is representation of individual’s

personality.56
4. Psychological Factors

Psychological factors which influence the behavior of consumers includes

'motivation', 'perception', learning' and 'attitude'.Motivation can be explained as a

desire that is generated because of an unsatisfied need. When the intensity of need

is very high it gets converted into motive. William J Stanton defines motive as “a

drive or an urge for which an individual seeks satisfaction. It becomes a buying

motive when the individual seeks satisfaction through the purchase of something”.

The decision regarding amount of information to be searched and size of

expenditure to be made on product, brand, store of consumer goods is influenced

by motives of buyers. Perception about a product leads to thought and thought

leads to action. Thus perception plays a vital role in expressing a particular

behaviour towards purchase of a product. Consumer learning is process in

continuum wherein a consumer learns something new on daily basis. What all a

consumer has learned from the environment or past experience becomes a

contributing factor in behaviour towards purchase of a product. Attitude

influences everyone's life and it affects the way in which everyone adjusts with,

and reacts to, other people, objects or events. A marketer receives great helping in

knowing consumers reaction by analyzing its attitude. As attitude of a consumer

puts its impact on usagepattern, frequency of consumption, preference for market.

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