SIKKIM MANIPAL UNIVERSITY

ASSIGNMENT

Name Dhananjay Kumar

Roll No. 510911381

Course MBA-Semester-3

Subject Consumer Behaviour

Subject Code MK0002-Set-2

Centre Code 1799

Q.1 What are the relative advantages and disadvantages of quantitative and qualitative
research in understanding consumer behaviour? [10 Marks]
 Qualitative Research Quantitative Research
Basic research objective To gain a broad qualitative To quantify data and
understanding of the generalize the results from
underlying reasons and the sample to the population
motivations; as a first step in of interest; Recommend a
multistage research final course of action
Type of sample used Small numbers of non- Large numbers of
representative cases representative cases
Data collection method Unstructured Structured
Nature of data analysis Non- Statistical Statistical

Advantages:
- Greater data accuracy than direct questioning, in natural settings people behave
naturally
- Problem of refusal, not at home, false response, non-cooperation etc. are absent
- No recall error
- In only some situations, only way
o Number of customers visiting a store

o Studying childrens behaviour

- There are many advantages of interpretative research. First the researcher will be
observing the behaviour of the consumer in a natural setting and hence the artificial
nature of surveys, focus group rooms, or other laboratory type settings are avoided.
Second, the consumer is observed over a long period of time stretching from a few
hours to a few weeks, rather than a few minutes. Third, the researcher gets a first hand
knowledge of consumer behaviour rather than getting third party respondents
reactions. Fourth, because of the extended mutual exposure between the researcher
and the customer, a greater trust is built which can then lead to customers being more
sincere and honest. Finally, the customer activity being analysed and questioned is
much more immediate and physically present.
-
Disadvantages:
- This is also very time consuming and quite expensive.
- May not be representative
- Difficulty in determining root cause of behaviour
- The interpretation of data is quite subjective, in spite of following certain analytical
procedures.
- These methods are good at generating hypotheses; but not at confirming hypotheses
 or suggesting any general principles.

- This method however has a few shortcomings. It requires highly skilled and well-
trained researchers who are less preoccupied with recording the responses than the
interpretation of their observations. This is also very time consuming and quite
expensive. The interpretation of data is quite subjective, in spite of following certain
analytical procedures. Finally these methods are good at generating hypotheses; but
not at confirming hypotheses or suggesting any general principles.

Q.2 Assume that the following new products are just being launched in the Indian
market a) LCD TV and b) I Pod. Based on the five characteristics of innovations,
what prediction could you make regarding the speed of adoption of these products? [10
Marks]

There are five stages in arriving at a decision to purchase or reject a new product.
1. Awareness, 2. Interest, 3. Evaluation, 4. Trial and 5. Adoption
(or Rejection)
1. Awareness: The consumer is first exposed to the new product. At this stage the innovation
is introduced to the person, but there is no true knowledge of the product. Because of this
lack of information, the person does not feel the need to run out and find out more
information, much less consider consuming it. The awareness stage merely sets the
groundwork for the following stages. It is argued that since a person often stumbles upon the
innovation by accident during the awareness stage, it will provide little incentive to get more
information. Others feel that for a person to become aware, the innovation must fill a
particular need in their life for them to notice.
2. Interest: The consumer is interested in the product and starts searching for additional
information. At this stage, the person decides to invest time and energy into finding out more
about the innovation. At this point the person feels good about the innovation, but does not
really know how or if it can be useful in his/her own life. The interest stage is purely to gather
knowledge, not to decide whether to adopt.
3. Evaluation: Consumer decides whether or not to believe that this product or service will
satisfy his/her need. At this stage, the person firsts begins to make a decision about the
innovation. How could I use it? Do I really need it? Would it be to my advantage if I had it?
These are all questions the consumers ask themselves during the evaluation stage. Then if the
innovation appears to be positive for their life, they will try it out. If the innovation has a
negative connotation, they may seek the advice and knowledge of their peers.
4. Trial: The consumer uses the product on a limited basis. This is the next stage called the
trial stage. Here the individual physically gives the innovation a chance by trying it out for a
limited period. What they are looking to find out during this trial stage is how the innovation
can fit into their needs and desires. Research proves that most people will not adopt an
innovation without personally testing it first to see if it really works.
5. Adoption/Rejection: If trial is favourable, the consumer decides to use the product on a
full scale basis; if unfavourable, the consumer decides to reject it. This final stage is the
adoption stage. Here the individual uses information that they have gathered in the interest
and evaluation stages and with the outcome of the trial stage, decides to adopt the innovation.
At this point in the adoption process, the individual not only adopts the innovation but
embraces it for the future. There is, however, another possible stage to the adoption process.
After the individual adopts the innovation they may decide to reject it for whatever reason.
This decision to reject the innovation after agreeing to adopt it is called discontinuance.
This is a very simplistic model, as there could be several other steps involved in this process.
In many cases, the post adoption or post purchase evaluation can lead to a strengthened
commitment, or to a decision to discontinue use.
The adoption of some products may have very little effect on the behavioural and lifestyle
changes of consumers. Some innovations may lead to major changes in these spheres.
Examples of innovations which had a major impact on society include the automobile,
locomotive, telephone, refrigerator, television, airplane, personal computer, etc.
Q.3 List out and briefly explain five major differences between consumer buying
behaviour and business buying behaviour. [10 Marks]

Consumer buying behaviour Business buying behaviour

1. Consumer buying normally 1. The organizational buying behaviour

evolves from needs and wants process is well documented with many
which is known as problem models depicting the various phases, the
recognition and it depends upon members involved, and the decision in each
a number of factors like social phase. The basic five phase model can be
factors, cultural factors etc. extended into eight: purchase initiation,
evaluation criteria information, information
search, supplier definition for RFQ,
evaluation of quotations, negotiations,
suppliers choice and choice
implementation.

2. Once the consumer has 2. The buying centre consists of those people
recognized a problem, he/she in the organizational who are involved
searches for information on directly or indirectly in the buying process,
products and services that can i.e. the user, buyer influencer, decider and
solve the problem. Sources of gatekeeper to who the role of initiator has
information include Personal also been added. The buyers in the process
sources, Commercial sources, are subject to a wide variety and
Public sources and Personal complexity of buying motive and rules of
experience etc. selection.

3. The consumer compares the 3. The level of risk depends upon the
brands and products that are in characteristics of the buying situation
their evoked set. Consumer faced. The supplier can influence the
evaluates alternatives in terms degree of perceived uncertainty by the
of the functional & buyer and cause certain desired behavioural
psychological benefits that they reactions by the use of information and the
 offer. implementation of certain actions.

4. Once the alternatives have been 4. The key factors are shown to influence
evaluated, the consumer ready organizational buying behaviour, these are,
to make a purchase decision, types of buying situations and situational
Sometimes purchase intention factors, geographical and cultural factors
does not result in an actual and time factors.
purchase.
5. Actions can be influence to taken the
5. It is common for customers to supply market. Based on the type of items
experience concerns after purchased and on its position in the buying
making a purchase decision. matrix, a company will develop different
This arises from a concept that relationship with suppliers depending upon
is known as cognitive the number of suppliers, the suppliers
dissonance. The customer, share, characteristics of selected suppliers
having bought a product may and the nature of customer-supplier
feel that an alternative would relationships.
have been preferable. In these
circumstances the customer will
not repurchase immediately, but
is likely to switch brands next
time.