INCLUDED

CONSUMER
BEHAVIOUR
Insights from Indian Market

Ramanuj Majumdar
CONSUMER BEHAVIOUR
Insights from Indian Market

Ramanuj Majumdar
Professor of Marketing
Indian Institute of Management Calcutta

New Delhi-110001
2010
CONSUMER BEHAVIOUR: Insights from Indian Market (with CD-ROM)
Ramanuj Majumdar

© 2010 by PHI Learning Private Limited, New Delhi. All rights reserved. No part of this book
may be reproduced in any form, by mimeograph or any other means, without permission in
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ISBN-978-81-203-3963-7

The export rights of this book are vested solely with the publisher.

Published by Asoke K. Ghosh, PHI Learning Private Limited, M-97, Connaught Circus,
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 To
the Sacred Memory of
Nabin Ray
who has been a source of candid wisdom
 Contents

Preface ................................................................................................... vii

PART I
CONSUMER BEHAVIOUR: AN OVERVIEW
Chapter 1 Understanding Consumer Behaviour: An Overview ............................. 3

PART II
THE CONSUMER AS AN INDIVIDUAL
Chapter 2 Consumer Motivation .......................................................................... 35
Chapter 3 Consumer Perception .......................................................................... 51
Chapter 4 Consumer Beliefs and Attitudes .......................................................... 71
Chapter 5 Consumer Learning and Experience .................................................... 85
Chapter 6 Consumer Personality and Self-image ............................................... 105

PART III
CONSUMERS IN THEIR SOCIAL AND CULTURAL SETTINGS

Chapter 7 Effect of Personal Factors ................................................................. 127

Chapter 8 Influence of Reference Groups ......................................................... 141
Chapter 9 Culture and Western Influence on Consumer Behaviour ................. 161
 vi Contents

PART IV
THE CONSUMER DECISION-MAKING PROCESS

Chapter 10 Consumer’s Decision Making ........................................................... 193

Chapter 11 Comprehensive Models of Consumer Decision Making .................... 225

PART V
UNDERSTANDING INDIAN MARKET DIVERSITY AND EVOLVING
CONSUMER BEHAVIOUR

Chapter 12 Diversity of Indian Market .............................................................. 245

Chapter 13 Changing Indian Consumer Behaviour ............................................. 265

PART VI
CASE STUDIES

Case Study 1 Cadbury Dairy Milk Chocolates ........................................... 293

Case Study 2 Lux—The Beauty Soap ................................................................ 299
Case Study 3 Titan Watches................................................................. 303
Case Study 4 Sprite—Soft Drink ....................................................................... 307
Case Study 5 Nescafe Instant Coffee ................................................................. 311
Case Study 6 Maruti 800 Passenger Car ........................................................... 317
Case Study 7 Dove Hair Care ............................................................... 323
Glossary............................................................................................... 329
Index .................................................................................................. 343
 Preface

As the title of the book indicates, this book focuses on Consumer Behaviour and decision
making, with necessary theoretical foundations and offers many practical insights from the
Indian market. I have strived to address some of the basic questions about consumers
(referred as buyers, shoppers, and so on) in India such as: “How do people make choice
decisions in the market place? What factors possibly influence the act of shopping or
buying? Why do consumers behave in a particular manner?” This book tries to give some
meaningful answers to such fundamental questions about the consumer psyche.
Another important question that arises is: How is this book different from other texts?
Most of the books on Consumer Behaviour available today are invariably written from the
perspective of the consumers in the advanced or the first-world countries. During my long
experience of teaching this Marketing elective course in Indian Institute of Management
(IIM) Calcutta, I have always felt the necessity to have a textbook with adequate examples
from the Indian market. This book is primarily meant to fulfil this objective.
Here my goal is to provide an analysis of the subject that is cutting edge and based on
research on a variety of consumer behaviour topics. I have tried to lay the necessary
theoretical foundations and, at every stage, endeavoured to show their applications to the
Indian market. Thus, the book contains both the theory of and insights into Consumer
Behaviour for the benefit of the students and practitioners who are keen to know about the
Indian market. Moreover, it will enable the teaching fraternity in MBA programmes in
India to adopt the book easily in the classroom.
The book is divided into six parts. Part I consists of one chapter (Chapter 1—
Understanding Consumer Behaviour) which gives an overview of the different factors
influencing consumer decision making. It provides a comprehensive picture of Consumer
 viii Preface

Behaviour. The chapter shows the importance of understanding the consumer for the
benefit of the marketers and cites many live examples of how marketers in India have
utilized knowledge of Consumer Behaviour to evolve their marketing strategies.
Part II (Chapters 2–6) deals with the psychological make-up of the consumer as an
individual. Here, different aspects of consumer psychology in the decision-making process
are highlighted. The chapters cover topics such as consumer motivation, consumer
perception, consumer beliefs and attitudes, consumer learning and experiential knowledge,
consumer personality, and self-image.
Part III (Chapters 7–9) is devoted to issues about how consumers are influenced by
their social and cultural settings. In particular, it examines the following topics: the effect
of personal factors, influence of reference groups, and cultural and western influences on
consumer behaviour.
Part IV (Chapters 10 and 11) focuses on the consumer’s decision-making process for
different types of acquisitions and possessions. Chapter 10 (Consumer Decision Making)
discusses the various stages involved in decision making. For example, it sequentially covers
problem recognition, information search, alternative evaluation, actual choice, and post-
purchase behaviour. Then, Chapter 11 (Comprehensive Models of Consumer Decision
Making) presents six well-established comprehensive models, proposed by eminent scholars
on consumer behaviour. Each of these models outlines a range of internal and external
factors that possibly influence consumer decisions, and the complex relationships and
interactions among those identified variables.
India with a population of more than one billion and consistent economic growth in
recent times presents a tremendous market opportunity. However, because of its huge
diversity, it has also simultaneously posed many a challenge to the marketers to understand
the nature of the consumers. Part V (Chapters 12 and 13) shows this diversity in behaviour
and highlights certain insights from the Indian market . While Chapter 12 (Diversity of
Indian Market) examines those diversities as well as presents a macro-picture of the typical
consumption and behavioural patterns noticed in India, Chapter 13 (Changing Indian
Consumer Behaviour) stresses on the emerging patterns of Consumer Behaviour observed
in India.
Parts VI— Case Studies—presents seven case studies on consumer related issues of
brand building based on some successful brands in the Indian market.
The Power Point Presentations (PPTs) attached as CD to this book would, I believe,
reinforce the topics covered in the book and be of great value to the students.
The organization of the text is flexible such that, after covering Part I, the remaining
chapters can be studied in any order. Each part stands on its own, covering a specific
aspect.
Of the many people who have been enormously helpful in writing this book, I would
like to first thank my numerous Marketing students, specially of the 44th and 45th batch
Post Graduate Programme (PGP) of IIM Calcutta, who have provided me with invaluable
 Preface ix

feedback and queries when I taught this Marketing elective course in the second year
curriculum in our MBA Programme.
Over the years, I have received many insightful suggestions and constructive
comments from Professor Judas Roy, my erstwhile thesis guide and colleague in IIM
Calcutta, and many leading marketing practitioners in India. Especially, I must mention
the names of Harish Manwani (Hindustan Unilever), Hasit B. Josipura (Glaxo),
D. Sivakumar (Nokia), M.G. Parmeswaran (FCB Ulka), and my numerous friends from
various industries in India who have shared their valuable experience with me from time
to time. I am grateful to each of them.
Also, I would like to warmly acknowledge the contributions of my wife, Sriya, an
applied psychologist, who provided me invaluable ideas and offered many clarifications
about various psychological aspects of Consumer Behaviour.
I wish to thank the Publishers, PHI Learning, for their speedy processing—much faster
than I had imagined—and quality publishing of the book. In particular, I am thankful to
Mr. Asoke Ghosh, Chairman and Managing Director, for his encouragement in
undertaking this book-writing project; Surajit Sarkar, Deputy Regional Sales Manager, who
persuaded me to hand over the script quickly; K.C. Devasia, Senior Editor, for his valuable
suggestions and significant contributions (including his very fine editing) to the book; and
the production team for the careful processing of the manuscript.
Finally, I would like to express my special appreciation to my son, Rwitajit, currently
an M.Tech. student at BITS Pilani, for making the front cover design and editing of the
PPTs attached with this book.
Ramanuj Majumdar
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