MARUTI SUZUKI INDIA LIMITED.

CONSUMER BEHAVIOUR.
Consumer Decision Making Process for two different products- a car and a bicycle.

By: Isha Agarwal (Staff No 235539) Md. Adil Hussain (Staff No 235113) Prarthana Kejriwal (Staff No 235121) Tushar Ajitsaria (Staff No 235105)

Acknowledgement.
Apart from the efforts of the group members, the success of any project depends largely on the encouragement and guidelines of many others. We take this opportunity to express our gratitude to the people who have been instrumental in the successful completion of this project. We would like to show our greatest appreciation to our Professor, Mr. Harsh Verma for his tremendous support and help. Without his encouragement and guidance this project would not have materialized. Also, we would like to thank our esteemed organization, Maruti Suzuki India Ltd. under the roofs of which we were provided with an opportunity to work on a project of this high a scope. The guidance and support received from all the members who contributed to this project, was vital for the success of the project.

Abstract.
The objective of the project is to have a clear understanding of the buying pattern of the consumer. This enables us to further understand why a customer behaves in a particular manner, the steps that a customer follows before making a purchase and also the competitors strategies in every step of decision-making. Thorough analysis of the same helps marketers to develop strategies, which will enable them to sell the product to the customers via a catalyst. The methodology adopted for the successful completion of this report was continuous reviewing of articles on the Internet about consumer behavior and also references from class notes were taken into study. After going through the entire process and separately working out the decision making process for two products that involve high and low involvement respectively it can be concluded that every rationale consumer goes through a series of steps. These, steps however may be skipped if the product taken into consideration does not involve a lot of risks for the consumer. Therefore, consumer decision-making is getting to know the psychology of the consumer so that marketers can build strategies thereafter and reach the target market without disappointment.

Contents.
Topics 1. Introduction: DECISION MAKING: Definition Process/steps 2. DMP in case of a high involvement product: CAR 3. DMP in case of a low involvement product: BICYCLE 4. CONCLUSION 5. BIBLIOGRAPHY Page Number:

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Introduction.
Decision-making can be regarded as the mental processes (cognitive process) resulting in the selection of a course of action among several alternative scenarios. Every decisionmaking process produces a final choice. The output can be an action or an opinion of choice. The analysis of individual decisions is concerned with the logic of decision making and rationality and the invariant choice it leads to. It might be regarded as a problem solving activity, which is terminated when a satisfactory solution is reached. A major part of decision-making involves the analysis of a finite set of alternatives described in terms of some evaluative criteria. These criteria may be benefit or cost in nature. Then the problem might be to rank these alternatives in terms of how attractive they are to the decision makers when all the criteria are considered simultaneously. Another goal might be to just find the best alternative or to determine the relative total priority of each alternative (for instance, if alternatives represent projects competing for funds) when all the criteria are considered simultaneously. Thus, after weighing the level of risk a product carries, the customer goes through a DECISION MAKING PROCESS which can either be an extensive problem solving or no problem solving situation.

DECISION MAKING PROCESS

Step I: NEED RECOGNITION Need recognition occurs in a situation where perceived state of an individual is not equal to the actual state of affairs. Therefore, a customer, when buying a product, should believe that it is capable of solving his/her problem. Otherwise no matter how good the product, it will fail in the market. Manufactures must present goods that a customer wants rather than what he can produce. It also becomes paramount for the producers to carefully monitor customers trends as they keep changing over time. This is where the opportunity for the retailers lies. Step II: INFORMATION SEARCH Once a consumer becomes aware of his unmet needs, he begins looking for information. Source of information varies from customer to customer. There are both active and passive seekers. Few extensively search information on every available medium whereas few are just receptive to information around them. However, if a customer is loyal to a brand, then he may or may not search for any information when buying a product. This is where it becomes difficult for the marketers to sell their product to these consumers. These products fall in the evoke set of the known brands by the consumers. This set may or may not have more than one product. When more than one product is present in the evoke set, the inertia can be shaken by minimal stimuli. Here the customer is in the state of indifference where slight variations in the price may induce the customer to switch his preference as all the brands in this set are more or less the same. However, its almost impossible to induce the customer to change his preference when only one brand is present in the set. The customer is attached to the product either rationally or emotionally. Rationality can still be questioned by better products in the market which
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shock the customer by catchy commercials. This is what we call creating brand superiority. But expecting a consumer who is emotionally attached to the brand is just not feasible. Here, no reasoning or logic would be enough for the customer to change his preference because in this case, its the heart that rules the customers head.

There are various steps to information processing: Exposure Attention Comprehension Acceptance Retention.

Step III: EVALUATION After the necessary information has been gathered and processed, consumers begin to narrow down their options on the basis of features/characteristics they are looking for, to resolve their problems. This leaves them with an exhaustive list of alternatives which help them in making the final purchase. This is one of the most crucial stages for a marketer as it is in this stage that a consumer may or may not accept the marketers product. Different evaluative criteria may be used by different consumers-some may use pre existing evaluations stored in their memories while others would not be hesitant in trying new products. These choices are influenced by both individual and environmental factors which include consumers lifestyle, values etc. , evaluation is a stage where a marketer can switch a consumers preference when he has more than one brand in his Evoke set by offering various sales promotion benefits or even by slightly reducing the price. This is because the consumer is indifferent to all the known brands for that product and is ready to switch over for some incentive. Also, evaluation is done for, from which retailer to purchase. This would be influenced by factors such as, convenient location of the store, nature of the retailer, attention given to the customer, product and parts availability etc. Step IV: PURCHASE Purchase is the stage every marketer wants the consumer to achieve for his product. However, it is completely in the hands of the consumer which product he/she chooses ultimately. The job of a marketer is not over yet as its possible to change the preference of the consumer at the last instant. It quite happens that a consumer ends up buying a product different from what he had decided upon depending on what happens during the point of purchase. So suppose a customer chooses a particular retailer to buy a bottle of shampoo. He may find it rational to buy it from the next store which is offering the
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customer a whopping 20% discount for the same product. Similarly, hours of operation maybe a critical factor for working people. Step V: Post purchase The job of the marketere dosent end at purchase. If the manufacturer wants repeated purchase and brand loyalty from the customer, he has to make sure the consumer is delighted with the usage of the product and is looking forward for repeated purchase. However if a customer is dissatisfied with the product he is likely to experience a phenomenon called post cognitive dissonance. It can be describes as the uncomfortable state following the act of choosing between a set of alternatives, each of which had some desirable attributes. This means the consumer feels the product has not satisfied his needs. Post purchase dissonance increases with the degree of involvement by the consumer. Competitors have a hard time assessing the minds of the consumers who are satisfied with the product because these consumers tend to make repeated purchases of the same brand. The most important determinant of a product is the use-inspite of a product bein good, if a customer doent use it wel, he is likely to be dissatified with the usage. Therefore, companies pay special attention to these factors and instructions are clearly mentioned for a particular product. Also, sometimes the consumers have second thoughts for the products already purchased, making them think if they made the right choiice in terms of the purchase. Companies have follow up calls and other tactics to make sure the consumers do not face any post purchase regret.

Case I
Product taken into consideration, EON Car being purchased for commuting on a daily basis and also for other family needs. Level of risk involved under the following heads: Price (compensation given by one party to another in return for goods or services) high Functional (exposur to physical harm) high Social (acceptance by the society) high Hedonism (prefernce for a particular taste) high Product differention (how one product can be distinguishedfrom the other on the basis of its attributes)- high

Purchase of car involves high degree of involvement as the risks involved are high and the commodity itself is a luxury for many. It falls under extensive problem solving commodity for the consumer. This becomes the key factor in shaping the type of decision process a customer would follow. Efforts are made to minimize the risk and maximize gains from the purchase made. Hence, customers go through a series of steps before a final deal is struck. Similarly, marketers are trying to capture as many markets as possible. So every organization remains active to be noticed by the customer. This is achieved in various ways including advertisements, sales promotion, publicity and personal selling. Therefore, every marketer is trying to get associated with the stages as early as possible because choices are made much before the final purchase is carried out except for some contingent situations. Every commercial or sales promotion activity is strategically built keeping in mind each stage that a consumer passes through, in the decision making process (DMP). Because if a marketer is under the impression that only the purchase stage is important, it will be a huge blow for the organiztion when the perceived sales will not match the atual sales inspite of all the focus on the purchase process. Hence, it becomes paramount for every marketer to pay attention to all the stages which is in a way understood by the developers too. Here, we will analyse and understand how the marketerts have tried reaching the target segment by their marketing strategies in every particular stage of the Deision Making Process. 1. Need recognition- This is based on the need that must be satisfied. Before the need can be satisfied, it should be activated. Many factors influence need-it may be prompted internal needs or by an act or an advertisement or some other external factor. Many organizations create advertisemnets that prompt a consumer to identify an unrecognized need. However, how a consumer reacts to a recognized need is a
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matter of importance attached to that need . for example, when Hyundai places a hoarding of a stylish EON car that aims at solving the problem to commute, in front of a metro station, it does strike a chord with the consumers where they are made aware of the problems attached with taking a metro to reach the office daily. Also, the poster directly hits the social aspirations of owning a car. Here, the consumer may be okay with travelling in the metro to reach his destination, but seeing the advertisement daily might evoke thoughts of his owinng the car, which as the company claims will be easy on the pockets too (being the cheapest in its category).

2. Information search- once a need has been recognised, the consumer begins to look for information. As purchasing a car involves high involvement, the customer will look at various sources for extensive information search which could be both internal and external. This is because of the risks attached to the product. For example, a consumer buys a car and it breaks down, or doesnt perform well, the consequences are significant. The person might lose a lot of money, not to mention the inconvenience caused. As the product involves a lot of technicalities, the consumer would like to read and understand the critical features that separates one product from another. Therefore, marketers make use of a lot of printed materials like brochures, magazines, newspaper advertisements and the internet.

Inetrnet has come a long way in helping the consumers make informed choices. Every key market player has assured the customers a dedicated website for all the relevant specifications. Various other facilities have been brought to use as more and more people have begun to make use of the internet. Places where the use of internet is not very rampant prnt media like newspapers and magazine are used. Also, nice, glossy pictures and advertisements for urban market is printed in the magazines for them to read in their spare time. As extensive information search goes into purchasing a car, marketers must make sure that the information required by the consumers come handy. Because consumers do not retain all the information they are exposed to, it becomes mandatary for a marketer to project their products in a way that it catches immediate attention of the consumer. The consumer may notice a product owing to either of the following factors-it fits with an individuals existing habits or values, it does not create risk, easy to understand, or that it is realted to the customers current need. 3. Evaluation- from all the information a consumer has collected, he narrows down to a few choices on careful evaluation. This evauation is one on the basis of pre defined criteria that a consumer has in mind during information search. In case of a car, the consumer may want a car that gives good mileage, meets his family needs, looks good, has the latest technology etc. So based on these criteria the consumer differentiayes the products and put them in different sets. Few cars which a consumer finds more or less similar, will be in one set called the consideration set and he will pick one product from this very set if he is not particularly loyal to one particular brand. Hence, the inertia can be disturbed by the marketer by offering various sales promotion activities.

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For example, here, the company releases a chart comparing the two cars, explicitly declaring that his car is better than the competitors. So now when the customer decides on the final product to be bought, he obviously will take into consideration the claims made by the company for their product. This influences the cosumers choice. Second factor is the easy availabilty of loan offered by the company. Since purchasing a car is a huge investment, consumers look for loans. The consumer moves in favour of the company which provides hassle free loan options at minimum interest rate. 4. Purchase- when a product involves high customer involvement, it rarely happens when a customer ends up buying a product other than what he had thought of. For some reason, if the customer changes his mind at the time of purchase, he will go through all the processes all over again rather than just buying any other product that meets his demands. Therefore, any factor that could eliminate the possibility of the customer purchasing the product should be addressed. Such a case may arise when a customer walks in to buy the car and the car is not available. If the customer doesnt need the car immediately, he would still be ready to wait for the car to reach the seller. However, if the customer is in need to buy the car for immediate use, then he might go back home, look for some more information, and pick another product from his consideartion set. Another reason for a customer not purchasing the product even after finalizing could be the product of the dealers behaviour. The dealer may sem to not be interested or the behaviour itself could be unpleasant. In that case, the customer would switch to some other dealer. The manufacturer dosnt suffer under these scenarios but the dealer defiinetly does. This way the dealer loses a customer which in turn could shy away other prospective customers too. 5. Post purchase- the job of the marketere dosent end at purchase. If the manufacturer wants repeated purchase and brand loyalty from the customer, he has to make sure the consumer is delighted with the usage of the product and is looking forward for
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repeated purchase. However if a customer is dissatisfied with the product he is likely to experience a phenomenon called post cognitive dissonance. It can be describes as the uncomfortable state following the act of choosing between a set of alternatives, each of which had some desirable attributes. This means the consumer feels the product has not satisfied his needs. The level of post cognitive dissonance is even higher for an expensive product such as a car. It may occur due to a lot of factors which include- poor service available for the car, inconvience of reach in contacting the dealer or the service stations, intermittent break downs of the car, lack of commitment from the company or the dealer once the purchase is made, no follow up queries from the manufacturer or a representative etc. therefore, car manufacturers are trying to reach the customers in as many ways as possible so that no inconvinience is experienced by the customer even if there is some technical issue involved with the car. No company is in a postion to gurrantee the purchase made by the customer,the idea is to address the problem at the earliest.

Hyundai records highest ever sales

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Case II.
Product taken into consideration bicycles customer purchasing it as fitness equipment Level of risks involved in purchasing a bicycle are as follows: Price (compensation given by one party to another in return for goods or services) low Functional (exposur to physical harm) high Social (acceptance by the society) low Hedonism (prefernce for a particular taste) low Product differention (how one product can be distinguishedfrom the other on the basis of its attributes) - low As we can see the risks involved in purchasing a cycle is comparitively lower than any other product bought for commuting purpose. Therefore, a consumer can afford to take risk and the involvement would not be as high as compared to cars. The consumer would definitely go through the decision making process but there are high chances of them skipping one particular step or not doing any extensive reasoning at some stage. The steps involved in purchasing a bicycle and marketers strategies thereof, are as follows: 1. NEED RECOGNITION- need for a cycle arises in a situation when a person is conscious about his health. Here, instead of using other alternatives like joining a gym or other wellness programs, citing the advantages associated with cycling, he decides on it. Well, the major benefits that a person derives from a cycle are- he can use it as per his convenience, the time can be ditributed throughout the day according to the leisure time at the riders discretion, more than one family member can use the same product, its available against a one time expenditure rather than monthly subscriptions and also, can be used as an alternative mode of transport as and when required. Therefore, marketers here try to potray their product as a solution to obesity. Adverisements talk about how effectively one can fight various diseases by staying fit which in turn comes from cycling.

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2. Information search There is no detailed information search on part of the consumer in case of a cycle.

3. Evaluation when it comes to purchasing a cycle extensive information search has been skipped. The customer just walks into a sports equipment outlet, for eg, PLANET SPORTS, and compares the cycles. The major criteria that a customer would look for would not be more than just one or two. He might compare the products for price and a few technicalities if his knowledge permits. Therefore, a marketers main role in capturing the customers mind is through the advertisements that lay special emphasis on the health benefits of the consumer. Also, exclusive features that a marketer is offering on the cycle (calorie meter installed in the cycle etc.) can be used as a Unique Selling Proposition (USP) for that cycle.

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4. Purchase- a customer will purchse the product as intended. However, since the consumer does not come with any pre decided cycle brand, the purchase depends on the evaluation process. Also. Factors like availibility of the customers prefferd colour, design etc are the factors which might influence his choice. Another factor could be the dealers behaviour itself. Since it becomes very easy for a customer to find another store that sells bicycles, the customer can look for it elsewhere in case he aint satisfied with the dealer or his employees behaviour. Therefore, the manufacturer should make sure that the the money he is investing on maketing the products should bear fruitful results. This can be achieved by keeping the stock available with the dealers and allowing the customers the privilege of choosing from a variety.

5. Post purchase- Chances of post purchase dissonance are very low in case of a bicycle. Hardly a customer will buy a cycle twice in his lifecycle for fitness purpose. The same cycle can be used for as long as the customer requires. Again, chances of post product dissonance are very low as no service or follow up is needed after the purchase has been made.

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Conclusion.
Since every good or service that we buy is the net result of a decision making process that goes on in a consumers mind, it is essential for every marketer to study and analyse the Decision Making Process of a typical consumer of his product before adopting any strategy. The importance of such Decision Making Process has increased over the years, when every consumer has a large variety of products available to him as per his convenience. Besides, the quantum of goods and services consumed by an average consumer has also increased over the years. Not only do consumers have wider choices available to them, the frequency of shifting from one product to other has also increased. Consumers tend to shift to better and more convenient products very easily. Therefore, each marketer has to undertake intensive market research to study the personality, psychographic characteristics and psychology of his target audience. With this insight, he has to understand the buying behaviour of the targeted audience and formulate strategies which will best fit his products in the minds of the customers during their decision making process. Any failure in the strategy formulation can lead to the complete failure of the product, no matter hoe good the product is. A successful understanding of the Consumer Decision Making Process will give the marketer a competitive edge over others. This necessitates the understanding of dynamics of consumer choice and the brand connect a consumer has with a particular brand, when he buys one.

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http://www.hyundai.com/in/en/Showroom/Flash/SRFOVERVIEW/DF_IN_SR_22_11101015 1236.html

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