Individual Assignment : 15 Product Diary Report

MKTG 4110 : Consumer Behaviour

Name : Noradha Binti Norizan

Date : 31st March 2019

Lecturer Name : Fatin Husna Binti Suib

Introduction

Similar to many Asian countries, significant transformation is occurring in Malaysia‟s food

marketing system as a result of industrialization, economic growth, urbanization,
globalization and trade liberalization (Arshad, Mohamed & Latiff, 2006). These changes
have led to more affluent consumers who demand higher quality food products which are
differentiated through branding, labelling information and a variety of quality attributes to
meet consumers‟ increasingly diverse needs and preferences (Ishida, Law & Aita, 2003).
Additionally, as consumers become more educated they tend to become more conscious
about health and wellness issues related to food choices and diet (Quah & Tan, 2010). All
of these factors are driving shifts in Asian diets away from starch-based staples (e.g. rice)
and increasing demand for wheat-based, meat and dairy products as well as fruits and
vegetables (Prescott, Young, O‟Neill, Yau, & Stevens, 2002; Warr, Rodriguez & Penm,
2008).

It is an old saying that customer is the ‘king’ because he is the person on whose decision
demand of any product or service is dependent. The attitude of consumer or buyer decides
how demand will emerge for a new product and service and how existing goods and
services will be sold. The attitude in turn depends upon many economic, social, cultural
and climatic factors.

The decisions are also influenced by education, stage of economic development, life style,
information, size of family and host of other factors. The study of consumer behaviour
implies how and why a particular consumer or group reacts to decisions of producers. “We
define consumer behaviour as those actions directly involved in obtaining, consuming, and
disposing of products and services, including the decisions process that proceeds and
follow the action.”

According to another author the consumer behaviour is “the behaviour that consumer
display in scanning for purchasing, using, evaluating and disposing of products and
services that they expect will satisfy their needs. The study of consumer behaviour is the
study of how individuals make decisions to spend their available resources (time, money,
effort) on consumption related items. It includes the study of what they buy, why they buy
it, when they buy it, where they buy it, how often they buy it, and how often they use it”.

Normally in consumer behaviour one studies the behaviour of consumers for consumption
goods but in the study the behaviour of buyer is also included. He may be user i.e. ultimate
consumer or he may be buying for some-one else. In certain products like medicines one
buys on the prescription of a physician which is also part of consumer behaviour.

In case of capital goods that is plant, equipment, machinery, buildings etc the decisions
are often based on technical advice of others. In case of industrial raw materials the
decision is influenced by supplier of equipment. Then there are purely consumer goods
with short life and once they are used they extinguish. They are called Fast Moving
Consumer Goods (FMCG). There are other consumer goods which are durable like cars,
refrigerators, electrical iron, juicer-mixer etc. but they are basically consumer items with
long life.

There are also goods like clothes which are not consumed in one go but are used for long.
The behaviour of consumers for all these products are taken on different considerations
than short term consumer goods like fruits, juices, ice-cream or milk. The study implies
study of all these behaviour and the technique of study is different for different items.

15 Products You Purchase

Product that I purchased 90% are mostly used daily by my mother in her food stall.
Although there are a lot of products and brands in the market, the list below is our best
choice based on our research and finding and utmost importantly our income.

Product Particular (Brand, Name, Price)

 RICE
Brand - Cap Rambutan, Name - Super Special Tempatan, Price – RM12.50

 TEA
Brand - BOH, Name - Cameron Highlands Tea, Price - RM8.99

 MILK
Brand - F&N, Name - Gold Coin Kopi & Teh Tarik Sweetened Creamer, Price - RM2.82

 COFFEE
Brand - Nescafe, Name - Classic Instant Coffee, Price - RM25.24
  MILO
Brand - Nestle, Name - Milo Activ-Go Softpack, Price - RM16.49

 SARDINE
Brand - King Cup, Name - Sardines In Tomato Sauce, Price - RM7.44

 OlL
Brand - Saji, Name - Cooking Oil, Price - RM9.99

 EGG
Brand - Qplus, Name - Medium Farm Fresh Eggs, Price - RM6.49

 RICE VERMICELLI
Brand - Jasmine, Name - Bihun Rice Vermicelli, Price - RM2.55

 DISHWASHING LIQUID
Brand - Labour, Name - Lime Dishwashing Liquid, Price - RM1.99

 SUGAR
Brand - Gula Prai, Name - Gula Kastor, Price - RM2.39

 SOY SAUCE
Brand - Jalen, Name - Kicap Lemak Manis, Price - RM3.34

 CHILI SAUCE
Brand - Kimball, Name - Chili Sauce, Price - RM3.75

 SPICES
Brand - Adabi, Name - Rempah Kurma Ayam & Daging, Price - RM16.49

 TISSUE
Brand - Tesco, Name - Everyday Value Pop-up Tissue, Price - RM1.05

Day, Time, Where And Date You Buy The Product.

The items we purchase merely based on availability of the product for the day. In my case
it depends, sometimes entirely on customers itself and the weather for that day. Weather
play a major role in my business next to customers. If customer keep demanding for tea or
coffee, or the weather became too hot then i have to purchased the items twice in a day.

Basicly i purchase all the products listed above during evening around 5 p.m at Tesco
Sungai Petani daily on 30 March 2019. Although certain items like sugar, tea and coffee
were nearly finished around 11 a.m, we purchased them at around 12 afternoon at
Econojaya Mini Market just 100 meter from the food stall the same day, that is 30 March
2019.

In the food stall industry, you cannot bought plenty of products in one day because in my
area, there are other vendor services like us. We bought just enough for one day to
maintain the fresh products

Why You Buy Product Over Another

Consumer behavior can be broadly classified as the decisions and actions that influence
the purchasing behavior of a consumer. What drives consumers to choose a particular
product with respect to others is a question which is often analyzed and studied by
marketers. Most of the selection process involved in purchasing is based on emotions and
reasoning.

The study of consumer behavior not only helps to understand the past but even predict the
future. The below underlined factors pertaining to the tendencies, attitude and priorities of
people must be given due importance to have a fairly good understanding of the
purchasing patterns of consumers.

 Marketing Campaigns

Advertisement plays a greater role in influencing the purchasing decisions made by

consumers. They are even known to bring about a great shift in market shares of
competitive industries by influencing the purchasing decisions of consumers. The
Marketing campaigns done on regular basis can influence the consumer purchasing
decision to such an extent that they may opt for one brand over another or indulge in
indulgent or frivolous shopping. Marketing campaigns if undertaken at regular intervals
even help to remind consumers to shop for not so exciting products such as health
products or insurance policies.

 Economic Conditions

Consumer spending decisions are known to be greatly influenced by the economic

situation prevailing in the market. This holds true especially for purchases made of
vehicles, houses and other household appliances. A positive economic environment is
known to make consumers more confident and willing to indulge in purchases irrespective
of their personal financial liabilities.

 Personal Preferences

At the personal level, consumer behavior is influenced by various shades of likes, dislikes,
priorities, morals and values. In certain dynamic industries such as fashion, food and
personal care, the personal view and opinion of the consumer pertaining to style and fun
can become the dominant influencing factor. Though advertisement can help in influencing
these factors to some extent, the personal consumer likes and dislikes exert greater
influence on the end purchase made by a consumer.

 Group Influence

Group influence is also seen to affect the decisions made by a consumer. The primary
influential group consisting of family members, classmates, immediate relatives and the
secondary influential group consisting of neighbors and acquaintances are seen have
greater influence on the purchasing decisions of a consumer. Say for instance, the mass
liking for fast food over home cooked food or the craze for the SUV’s against small utility
vehicle are glaring examples of the same.

 Purchasing Power

Purchasing power of a consumer plays an important role in influencing the consumer

behavior. The consumers generally analyze their purchasing capacity before making a
decision to buy and products or services. The product may be excellent, but if it fails to
meet the buyers purchasing ability, it will have high impact on it its sales. Segmenting
consumers based on their buying capacity would help in determining eligible consumers to
achieve better results.
Understanding, analyzing and keeping track of consumer behavior is very critical for a
marketing department to retain their position successfully in the market place. There are
various other factors too that influence consumer behavior apart from the four listed above.

What Are The Disadvantages And Advantages Of Product Differentiation

Product differentiation is a marketing strategy that involves making distinct changes in

goods or services to make them stand out from others in the market. There are two types
of product differentiation: horizontal and vertical. In horizontal differentiation, the goods
differ, but their prices are almost similar. Goods in vertical differentiation differ in quality,
and customers prefer one brand to the other despite the price variations. Differentiation
has some distinct advantages and disadvantages for both businesses and their customers.

 Provides Variety of Choice

Product differentiation is an effective way of enhancing customers' responsiveness by
providing them with a wide array of products or services in the market. Firms develop
unique products to respond to customers' preferences, as opposed to one homogenous
good. Product differentiation gives customers from different segments of the market a wide
variety of goods to choose from. For example, the market contains a variety of breakfast
cereals with different nutritional contents from various companies.

 Enhances Supplier Creativity

To survive in the global competitive market, most companies keep inventing new products
that enable them to remain relevant. Firms compete to create unique products or services
that satisfy customer demands through differentiation. Companies can improve on existing
products to make them more effective and attractive.

For example, a photo development shop may provide instant services at a higher price or
an option for customers to wait for two days and pay less. In another example, Coca-Cola
customers may decide to buy regular Coke, Diet Coke or Coke Zero. In essence, product
differentiation generates better products that stimulate economic growth.

 Resources and Costs

Customer needs keep on changing with time, and companies can only ignore this at their
own peril. Companies that keep reinventing their products attract loyalty from customers,
but product differentiation requires a lot of resources for carrying out a market research to
know the customer needs, product development, launch, advertisement and monitoring.
Customers ultimately bear the burden of these costs by purchasing these goods at a
higher cost.

 Hinders Market Entry

It’s usually difficult for new firms to enter an existing market due to several barriers. One
such hurdle is product differentiation, which gives established brands an upper hand. Most
customers remain loyal to the well-known brands in the market and rarely try out products
made by new entrants.

Usually, if newcomers use price differentiation to entice customers, well-established

brands launch a similar low-priced item to protect their market share. Most companies
trying to enter the market find it hard to overcome product differentiation, because they
lack resources to create products that can compete with existing ones in terms of cost and
functionality.

Your Intent To Continue To Purchase The Same Product ( Or If You Decide To

Change The Product Your Purchase Pattern, Explain The Reason)

As a consumer, there are many factors that affect our purchasing decisions. Most people
are conditioned a certain way to choose from millions of alternative products and make
alternate purchasing decisions. We may not know it, but the factors that influence buying
decisions help the consumers in recognizing needs, and finding ways to solve these
needs. The decision processes and acts involved in buying and using products is known
as buying behavior, or the buying decision of the consumers.

The factors that affect these decisions may be different for each individual. For example,
even though your friend and you may share same interests, when you are out shopping for
something, like shoes, your friend may love ballerinas, while you may love wedges. The
choices vary because influenced by the different factors in life, each person learns to
create mental shortcuts that provide a systematic way to choose among alternatives.

Key Factors that Influence Buying Decisions

 1. Cultural Factors

Culture is one of the key factors that influences a consumer's buying decisions. These
factors refer to the set of values, preferences, perceptions, and ideologies of a particular
community. At an early age, buyers learn to recognize acceptable behavior and choices
when selecting products.

For example, it is our culture that teaches us that, as a buyer, we need to make payments
and honor contracts, pay on time, observe rules, and assume responsibility when seeking
information. Sometimes 'cultural shifts', due to the influence of different cultures indicate
the need to introduce new products.

Each culture is further divided into various subcultures based on age, geographical
location, religion, gender (male/female), etc.

2. Social Factors

Social factors, which includes the groups to which the customer belongs, and his or her
social status, also affect purchase decisions. Human beings are innately social. They need
people to interact with, and make decisions. Social groups, like families, can influence the
buying decisions of consumers. These factors are further divided into:

 Family

Family is one of the most important buying organizations in our society and, is thus, the
most influential group. Family has a direct or indirect influence on the behavior and
attitude of a buyer. In the traditional setting, it was the wife in a husband-wife model
relationship who was responsible for making buying decisions related to product
categories such as household products, food, and clothing. However, with more women
opting for full-time professional careers, these roles have changed. Today, it may be a
man doing the household shopping. So, it is important to have a marketing mix that
targets these consumers as well.

 Social Status
Social class or status can also influence buying decisions. The members of a social class
are one that share similar behavior, values, and interests. Apart from income, people in
the same occupation, neighborhood, or educational system can belong to a shared
social classes.
3. Psychological Motivations
A person's buying choices are influenced by four factors namely:

 Motivation

Every person has different needs. There are physiological needs, biological needs, social
needs, etc. According to Maslow's hierarchy of needs, human needs are arranged in a
hierarchy, from most pressing to least pressing. These include physiological needs such
as food and water, safety needs, social needs, esteem or ego needs, and self-
actualization needs.

Based on the nature of the needs, some may seem more important than others at some
point in time. Once basic physiological needs are fulfilled, a person moves on to acquire
other needs in the same order. This is when the need becomes a motive, and urges the
person to seek satisfaction by getting it.

 Learning

With experience, a person's behavior can change. This is learning. According to the
learning theory, when a person is exposed to strong motivations and positive
reinforcements, their buying decisions are altered.

 Perception

Perception is how a buyer selects and interprets the information that he or she is exposed
to. A motivated person is ready to do something, but what he does is influenced by his
perception. Perception can be different for different individuals. So, even when their needs
are the same, the difference in perception can make them buy different products. For
example, although you and your friend both went to buy shoes, she picked ballerinas
because she felt more comfortable in them, while you picked wedges because you felt it
looked much more comfortable.

 Beliefs and Attitudes

A consumer has specific beliefs about various products. These are usually descriptive
thoughts of how the product is. These thoughts can be acquired or learned over time. This,
in turn, affects consumer buying decision.

4. Personal Factors
Personal characteristics such as the consumer's age, occupation, economic
circumstances, lifestyle, and personality have great influence on the buying decisions and
behavior.

a) Gender, Age and Life-cycle Stage

Do you remember the difference in the clothes you bought when you were 15, and the
clothes you bought when you were 25? Age has an impact on a person's tastes and
buying motivations. As people age, they buy different goods and services. Gender also
influences what we buy. This is the reason you find beer ads on sports channels, and
household items ads during prime-time television series.

b) Occupation and Economic Circumstances

A person's occupation and economic circumstances affects the product choices he/she
makes. For example, a manager is more likely to buy a business suit as compared to a
blue-collar worker in a factory. Similarly, economic stability, income, and savings, all
contribute to how a consumer makes a purchase decision.

c) Lifestyle and Values

How a person lives in society, and his values and interests affect his purchase decisions.
Lifestyles may differ even if people belong to the same social class, subculture, or
occupation. Some people buy based on their views of the world, while others may want to
purchase influenced by the opinions of others. There are some who have a desire for
variety and risk taking, and thus, buy accordingly.

d) Personality

A distinct personality, which includes unique psychological characteristics, is an important

determinant of consumer decisions. Some common personality types include aggressive,
social, defensive, dominant, etc.

Marketing strategies including a great market mix are one of the best ways of influencing
consumer behavior. Clever marketing campaigns persuade people and influence what
they buy. Consumer decision-making process and behavior is highly unpredictable. For
marketing companies, knowing the factors that affect buying decisions can help in
assessing the impact of their marketing strategies, and how they can further improve them
to appeal to the consumers.
REFERENCE

Arshad, Mohamed & Latiff, 2006

Ishida, Law & Aita, 2003

Quah & Tan, 2010

Prescott, Young, O‟Neill, Yau, & Stevens, 2002

Warr, Rodriguez & Penm, 2008

Tesco Malaysia Berhad