A REPORT

ON
“STUDY OF COGNITIVE DISSONANCE IN THE CONSUMER
PURCHASE BEHAVIOR AT A SINGLE BRAND OUTLET VIS- A- VIS
MULTI BRAND OUTLET”

BY
Rohini Parmar
09BS0002804
 A REPORT
ON

“STUDY OF COGNITIVE DISSONANCE IN THE CONSUMER

PURCHASE BEHAVIOR AT A SINGLE BRAND OUTLET VIS- A- VIS
MULTI BRAND OUTLET”

BY
Rohini Parmar (09BS0002804)

A report submitted in partial fulfillment of

the requirements of
MBA Program of
The ICFAI University, Dehradun
 ACKNOWLEDGEMENTS

I take immense pleasure in completing this project and submitting the final project report. This
project has provided me a platform to acquire a deep understanding of the subject, viz., cognitive
dissonance in the consumer buying behaviour. I am deeply indebted to my institution which
provided me an opportunity to undergo a project, which gave me thorough insight and
experience of the above mentioned subject and will act as a stepping stone in my career.

This is a known fact; a project can never be prepared by the single effort of the person to whom
project is assigned, where it also demands the help and guardianship of some conversant person
who helped the undersigned actively or passively in the completion of the project.

In this context, express my gratitude to Dr. Samta Jain for assigning me such a worthwhile
topic to work upon and guiding me to understand the complexities involved.

ROHINI PARMAR

09BS0002804
 TABLE OF CONTENTS

Authorization ii

Acknowledgements iii

Abstract 6

1. Introduction

1.1 Purpose, scope and limitation 7

1.2 Sources and methods 8

2. Consumer Buying Behaviour

2.1 Introduction 9

2.2 types of consumer buying behaviour 11

2.3 categories that affect consumer buying 13

 ABSTRACT

Buyers today are a fickle group. Who's to blame them? Bombarded with an endless selection of
products and services, making a good purchase decision isn't easy. What can your small business
do when your potential buyers won't buy? Tackling the buying resistance problem begins with
understanding how consumers or companies make buying decisions. Buyers will typically go
through various stages to make the decision to purchase.

Marketing and consumer behavior are intrinsically connected. Without grasping a level of

understanding of what drives consumers, marketers would have a pretty difficult time identifying
the right market segments and putting together a marketing campaign that will attract
attention. Studying consumers helps marketers improve their strategies because it gives
them insight into understanding buyer behavior. By obtaining a view into how consumers think,
feel, reason and choose, marketers can use this information to not only design products and
services that will be in demand, but also how to present these options to the consumer base
in an attractive fashion.

Consumer behavior is an important consideration when constructing a marketing plan. While

profits, sales numbers and all profit generating departments are important, when it comes down
to it consumer behavior is a big part of the marketing puzzle. Businesses that cannot
understanding how a consumer's mind operates will have a more challenging time figuring out
how to target a campaign that will attract or catch attention.Understanding how to utilize the
information gleaned from consumer behavior is the key. Armed with this information marketers
can focus on producing products and/or services targeted markets are actually interested in, and
they can also figure out how to develop effective campaigns.

Thus we see that in today’s world, consumer is the king and therefore, this topic is of special
interest to each and every marketer.
 PURPOSE, SCOPE AND LIMITATIONS

PURPOSE & SCOPE: Why do we study consumer behavior?

Most products eventually end up in private households even though they will pass through a
number of steps on their way from producer to end user. Producers and traders form vertical
chains or networks, called value chains, at the end of which is the consumer. Understanding
consumer behaviour is not only important for the producer but for all the other actors in the
chain. The value that the consumer puts on the goods or services limits what everyone else can
get from the value chain.

In today’s world, the consumer is the king, and therefore as a student of marketing it is taken for
known that knowledge of the target audience is a must. This project will help in understanding
various dimensions of the consumer buying behaviour, which is important as we are attempting
to understand a very complex phenomenon and its learnings will help us in making better future
decision.

LIMITATION:

Although a lot of effort is being put into understanding the consumer behaviour, the project
suffers from some limitations:

- The data collected is not complete representative of the population.

- Each and every person is different, therefore generalizations become difficult.
- Consumer buying behaviour is a multi dimensional concept and our project focuses on
only a single concept, which is the outlet size and no. of products.

Thus, the result of the project should be taken in consideration with these limitations to get a
more clearer picture.
 SOURCES AND METHODOLOGY

A project methodology tells what has to be done, to manage projects from start to finish. It
describes every step in the project cycle in depth. No single method for conducting research data
can be termed as perfect, because each one has some limitations. It depends on the type of
research plus the circumstances surrounding the research, primarily the prevailing culture and the
willingness of the employees as well as the company to reveal the information which may be
critical to the completion of the research. Both qualitative and quantitative methodologies will be
used in order to minimize weaknesses and reach deeper understanding of the area.

The project is planned to be completed in 3 steps:

 Collection of primary and secondary data

Primary data will be collected using research techniques like questionnaire.

Secondary data collection includes :

- Books on consumer behaviour

- Internet
- Articles & Journals

 Survey by questionnaire
The questionnaire is a self designed questionnaire consisting of 10 questions to
understand the consumer buying behaviour.

 Analysis of data and findings :

The data will be quantified using Ms- Excel. This will help us to gain a better
understanding of the data collected.
 INTRODUCTION

Stores are the place where buyers buy products whether it’s planned or unplanned purchase.
These stores sell hundreds and thousands of products daily and consumers are consuming these
products at the cost of their income. It only depends on the income of the person, that how much
and how many times he or she visits shopping stores to buy products. It is usually seen that
buyers purchase products which they have not planned and this phenomenon of unplanned
purchasing is termed as impulse buying. In previous researches, researchers and scholars have
tried to measure impulse purchasing of different types of products in multiple shopping stores as
it is reported by Bellenger et al. (1978); Du Pont (1965); Kollat and Willett (1967), Prasad
(1975); Williams and Dardis (1972).If a marketer can identify consumer buyer behaviour, he or
she will be in a better position to target products and services at them. Buyer behaviour is
focused upon the needs of individuals, groups and organisations.It is important to understand the
relevance of human needs to buyer behaviour (remember, marketing is aboutsatisfying needs).

 CONSUMER BUYING BEHAVIOUR

 Definition of Buying Behavior:

Buying Behavior is the decision processes and acts of people involved in buying and
using products.

 Need to understand:

- why consumers make the purchases that they make?

- what factors influence consumer purchases?
- the changing factors in our society.

Consumer Buying Behavior refers to the buying behavior of the ultimate consumer. A firm needs
to analyze buying behavior for:
  Buyers reactions to a firms marketing strategy has a great impact on the firms success.

 The marketing concept stresses that a firm should create a Marketing Mix that satisfies
(gives utility to) customers, therefore need to analyze the what, where, when and how
consumers buy.

 Marketers can better predict how consumers will respond to marketing strategies.

What influences consumers to purchase products or services? The consumer buying process is a
complex matter as many internal and external factors have an impact on the buying decisions of
the consumer.

When purchasing a product there several processes, which consumers go through. These will be
discussed below.

 Problem/Need Recognition
How do you decide you want to buy a particular product or service? It could be that your
DVD player stops working and you now have to look for a new one, all those DVD films
you purchased you can no longer play! So you have a problem or a new need. For high
value items like a DVD player or a car or other low frequency purchased products this is
the process we would take. However, for impulse low frequency purchases e.g.
confectionery the process is different.

 Information search
So we have a problem, our DVD player no longer works and we need to buy a new one.
What’s the solution? Yes go out and purchase a new one, but which brand? Shall we buy
the same brand as the one that blew up? Or stay clear of that? Consumer often go on
some form of information search to help them through their purchase decision. Sources of
information could be family, friends, neighbours who may have the product you have in
mind, alternatively you may ask the sales people, or dealers, or read specialist magazines
like What DVD? to help with their purchase decision. You may even actually examine
the product before you decide to purchase it.
 Evaluation of different purchase options.
So what DVD player do we purchase? Shall it be Sony, Toshiba or Bush? Consumers
allocate attribute factors to certain products, almost like a point scoring system which
they work out in their mind over which brand to purchase. This means that consumers
know what features from the rivals will benefit them and they attach different degrees of
importance to each attribute. For example sound maybe better on the Sony product and
picture on the Toshiba , but picture clarity is more important to you then sound.
Consumers usually have some sort of brand preference with companies as they may have
had a good history with a particular brand or their friends may have had a reliable history
with one, but if the decision falls between the Sony DVD or Toshiba then which one shall
it be? It could be that the a review the consumer reads on the particular Toshiba product
may have tipped the balance and that they will purchase that brand.

 Purchase decision
Through the evaluation process discussed above consumers will reach their final purchase
decision and they reach the final process of going through the purchase action e.g. The
process of going to the shop to buy the product, which for some consumers can be as just
as rewarding as actually purchasing the product. Purchase of the product can either be
through the store, the web, or over the phone.

 Post Purchase Behaviour

Ever have doubts about the product after you purchased it? This simply is post purchase
behaviour and research shows that it is a common trait amongst purchasers of products.
Manufacturers of products clearly want recent consumers to feel proud of their purchase,
it is therefore just as important for manufacturers to advertise for the sake of their recent
purchaser so consumers feel comfortable that they own a product from a strong and
reputable organisation. This limits post purchase behaviour. i.e. You feel reassured that
you own the latest advertised product.
  Types of consumer buying behavior

Types of consumer buying behavior are determined by:

 Level of Involvement in purchase decision. Importance and intensity of interest in a

product in a particular situation.

 Buyers level of involvement determines why he/she is motivated to seek information

about a certain products and brands but virtually ignores others.

High involvement purchases--Honda Motorbike, high priced goods, products visible to others,
and the higher the risk the higher the involvement. Types of risk:

 Personal risk

 Social risk

 Economic risk

The four type of consumer buying behavior are:

 Routine Response/Programmed Behavior--buying low involvement frequently purchased

low cost items; need very little search and decision effort; purchased almost
automatically. Examples include soft drinks, snack foods, milk etc.

 Limited Decision Making--buying product occasionally. When you need to obtain

information about unfamiliar brand in a familiar product category, perhaps. Requires a
moderate amount of time for information gathering. Examples include Clothes--know
product class but not the brand.

 Extensive Decision Making/Complex high involvement, unfamiliar, expensive and/or

infrequently bought products. High degree of economic/performance/psychological risk.
Examples include cars, homes, computers, education. Spend alot of time seeking
information and deciding.
 Information from the companies MM; friends and relatives, store personnel etc. Go
through all six stages of the buying process.

 Impulse buying, no conscious planning.

The purchase of the same product does not always elicit the same Buying Behavior. Product can
shift from one category to the next.
For example:
Going out for dinner for one person may be extensive decision making (for someone that does
not go out often at all), but limited decision making for someone else. The reason for the dinner,
whether it is an anniversary celebration, or a meal with a couple of friends will also determine
the extent of the decision making.

 Categories that effect the consumer buying decision process

A consumer, making a purchase decision will be affected by the following three factors:

1. Personal
2. Psychological
3. Social

The marketer must be aware of these factors in order to develop an appropriate MarketingMix
for its target market.

Personal :Unique to a particular person. Demographic Factors. Sex, Race, Age etc.Who in the
family is responsible for the decision making.Young people purchase things for different reasons
than older people.

Psychological factors: Psychological factors include:

 Motives—
 A motive is an internal energizing force that orients a person's activities toward satisfying
a need or achieving a goal.
Actions are effected by a set of motives, not just one. If marketers can identify motives
then they can better develop a marketing mix.

Maslow’s Hierarchy of Needs :

Abraham Maslow hierarchy of needs theory sets out to explain what motivated individuals in
life to achieve. He set out his answer in a form of a hierarchy. He suggests individuals aim to
meet basic psychological needs of hunger and thirst. When this has been met they then move up
to the next stage of the hierarchy, safety needs, where the priority lay with job security and the
knowing that an income will be available to them regularly. Social needs come in the next level
of the hierarchy, the need to belong or be loved is a natural human desire and people do strive for
this belonging. Esteem need is the need for status and recognition within society, status
sometimes drives people, the need to have a good job title and be recognised or the need to wear
branded clothes as a symbol of status.
Self-actualisation the realisation that an individual has reached their potential in life. The point of
self-actualisation is down to the individual, when do you know you have reached your point of
self-fulfilment?

But how does this concept help an organisation trying to market a product or service?
Well as we have established earlier within this website, marketing is about meeting needs and
providing benefits, Maslows concept suggests that needs change as we go along our path of
striving for self-actualisation. Supermarket firms develop value brands to meet the psychological
needs of hunger and thirst. Harrods develops products and services for those who want have met
their esteem needs. So Maslows concept is useful for marketers as it can help them understand
and develop consumer needs and wants.

 Perception-

What do you see?? Perception is the process of selecting, organizing and interpreting information
inputs to produce meaning. IE we chose what info we pay attention to, organize it and interpret
it.Information inputs are the sensations received through sight, taste, hearing, smell and touch.

Selective Exposure-select inputs to be exposed to our awareness. More likely if it is linked to an

event, satisfies current needs, intensity of input changes (sharp price drop).

Selective Distortion-Changing/twisting current received information, inconsistent with beliefs.

Advertisers that use comparative advertisements (pitching one product against another), have to
be very careful that consumers do not distort the facts and perceive that the advertisement was
for the competitor. A current example...MCI and AT&T...do you ever get confused?

Selective Retention-Remember inputs that support beliefs, forgets those that don't.
Average supermarket shopper is exposed to 17,000 products in a shopping visit lasting 30
minutes-60% of purchases are unplanned. Exposed to 1,500 advertisement per day. Can't be
expected to be aware of all these inputs, and certainly will not retain many.

Interpreting information is based on what is already familiar, on knowledge that is stored in the
memory.

 Ability and Knowledge--

Need to understand individuals capacity to learn. Learning, changes in a person's behavior

caused by information and experience. Therefore to change consumers' behavior about your
product, need to give them new information re: product...free sample etc.When making buying
decisions, buyers must process information.Knowledge is the familiarity with the product and
expertise.Inexperience buyers often use prices as an indicator of quality more than those who
have knowledge of a product.Non-alcoholic Beer example: consumers chose the most expensive
six-pack, because they assume that the greater price indicates greater quality.

Learning is the process through which a relatively permanent change in behavior results from the
consequences of past behavior.

 Attitudes--

Knowledge and positive and negative feelings about an object or activity-maybe tangible or
intangible, living or non- living.....Drive perceptions.Individual learns attitudes through
experience and interaction with other people.Consumer attitudes toward a firm and its products
greatly influence the success or failure of the firm's marketing strategy.

Attitudes and attitude change are influenced by consumers personality and lifestyle.Consumers
screen information that conflicts with their attitudes. Distort information to make it consistent
and selectively retain information that reinforces our attitudes. IE brand loyalty.There is a
difference between attitude and intention to buy (ability to buy).

Example:Honda "You meet the nicest people on a Honda", dispel the unsavory image of a
motorbike rider, late 1950s. Changing market of the 1990s, baby boomers aging, Hondas market
returning to hard core. To change this they have a new slogan "Come ride with us".

 Personality--

all the internal traits and behaviors that make a person unique, uniqueness arrives from a person's
heredity and personal experience. Examples include:

o Workaholism

o Compulsiveness

o Self confidence

o Friendliness

o Adaptability
 o Ambitiousness

o Dogmatism

o Authoritarianism

o Introversion

o Extroversion

o Aggressiveness

o Competitiveness.

Traits effect the way people behave. Marketers try to match the store image to the perceived
image of their customers.

There is a weak association between personality and Buying Behavior, this may be due to
unreliable measures. Nike ads. Consumers buy products that are consistent with their self
concept.

 Lifestyles--

Recent US trends in lifestyles are a shift towards personal independence and individualism and a
preference for a healthy, natural lifestyle.Lifestyles are the consistent patterns people follow in
their lives.

 Social Factors

Consumer wants, learning, motives etc. are influenced by opinion leaders, person's family,
reference groups, social class and culture.

 Opinion leaders--

Spokespeople etc. Marketers try to attract opinion leaders...they actually use (pay) spokespeople
to market their products. Michael Jordon (Nike, McDonalds, Gatorade etc.). it can also be
risky...Michael Jackson...OJ Simpson...Chevy Chase
  Roles and Family Influences--

Role...things you should do based on the expectations of you from your position within a group.
People have many roles.
Husband, father, employer/ee. Individuals role are continuing to change therefore marketers must
continue to update information.

Family is the most basic group a person belongs to. Marketers must understand:

o that many family decisions are made by the family unit

o consumer behavior starts in the family unit

o family roles and preferences are the model for children's future family (can
reject/alter/etc)

o family buying decisions are a mixture of family interactions and individual

decision making

o family acts an interpreter of social and cultural values for the individual.

 Reference Groups--

Individual identifies with the group to the extent that he takes on many of the values, attitudes or
behaviors of the group members.

Families, friends, sororities, civic and professional organizations.

Any group that has a positive or negative influence on a persons attitude and behavior.
Membership groups (belong to)
Affinity marketing is focused on the desires of consumers that belong to reference groups.
Marketers get the groups to approve the product and communicate that approval to its members.
Credit Cards etc.!!

Aspiration groups (want to belong to)

Disassociate groups (do not want to belong to)
Honda, tries to disassociate from the "biker" group.
The degree to which a reference group will affect a purchase decision depends on an individuals
susceptibility to reference group influence and the strength of his/her involvement with the
group.

 Social Class--

an open group of individuals who have similar social rank. Indian criteria; occupation, education,
income, wealth, race, ethnic groups and possessions.Social class influences many aspects of our
lives. Social class determines to some extent, the types, quality, quantity of products that a
person buys or uses.Lower class people tend to stay close to home when shopping, do not engage
in much prepurchase information gathering.Stores project definite class images.Family, reference
groups and social classes are all social influences on consumer behavior. All operate within a
larger culture.

 Culture and Sub-culture--

Culture refers to the set of values, ideas, and attitudes that are accepted by a homogenous group
of people and transmitted to the next generation.Culture also determines what is acceptable with
product advertising. Culture determines what people wear, eat, reside and travel. Cultural values
in the US are good health, education, individualism and freedom. In american culture time
scarcity is a growing problem. IE change in meals. Big impact on international marketing.

Different society, different levels of needs, different cultural values.Culture can be divided into
subcultures:

o geographic regions

o human characteristics such as age and ethnic background.

Culture effects what people buy, how they buy and when they buy. Just think, what influences
you before you buy a product or service? Your friends, your upbringing, your culture, the media,
a role model or influences from certain groups?

The psychology of each individual considers the product or service on offer in relation to their
own culture, attitude, previous learning, and personal perception. The consumer then decides
whether or not to purchase, where to purchase, the brand that he or she prefers, and other
choices.