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MANDALI’S
SUBMITTED BY
SHUBHAM VINOD KAMBLE
M.COM (SEM. III): BUSINESS ANALYTICS
SUBMITTED TO UNIVERSITY
OF MUMBAI2023-2024
PROJECT GUIDE
DR. MRS. VINITA PIMPALE
1
S.P. MANDALI’S
(AUTONOMOUS)
A Project Submitted
By
SHUBHAM VINOD KAMBLE
OCT 2023
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S.P. MANDALI’S
CERTIFICATE
Prof. Prof.
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S.P. MANDALI’S
(AUTONOMOUS)
Declaration by learner
Signature:
Certified by
Name of the Guiding Teacher: Dr. Mrs. Vinita Pimpale
Signature:
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Acknowledgment
To list who all have helped me is difficult because they are so numerous, and the
depth is so enormous.
I would like to acknowledge the following as being idealistic channels and fresh
dimensions in the completion of this project.
I take this opportunity to thank the University of Mumbai for giving me the chance
to do this project.
I would like to thank my Principal, Dr. Mrs. Shobana Vasudevan for providing the
necessary facilities required for the completion of this project.
I take this opportunity to thank our Coordinator Dr. Mrs. Vinita Pimpale,for her
moral support and guidance.
I would also like to express my sincere gratitude towards my project guide Dr. Mrs.
Vinita Pimpale whose guidance and care made the project successful.
I would like to thank my College Library, for having provided various reference
books and magazines related to my project.
Lastly, I would like to thank each person who directly or indirectly helped me in the
completion of the project especially my Parents and Peers who supported me
throughout my project.
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Executive Summary
The goal of consumer behavior analysis is to uncover ways you can better suit your customers’
behavior patterns and increase your conversion rate. The better you understand your customer
segmentation, the more easily you’ll be able to optimize your operations to focus on your most
profitable customer segments. When you understand your customer base better, you can build
bespoke customer journey maps for your most profitable customer segments to give them a
more targeted, optimized-for-them experience, which will increase conversions. Understanding
your consumers will help you identify what brings existing customers back, thus increasing
customer satisfaction and reducing customer churn. This kind of customer Analytics might
ultimately point towards a shift in marketing strategy, some tweaks to your product, or
something else entirely!
Every business is different, so it’s impossible to say what your customer behavior analysis
might uncover. At the same time, though, the benefits of this sort of analysis are universal. Any
business will benefit from understanding its customers better. As you come to understand your
customers better, you’ll likely discover lots of ways your company can optimize its approach.
A customer behavior analysis provides a framework for collecting, analyzing, and using data
about your customers in a meaningful way. It’s a process that allows you to gain insight into
customer behavior, as well as the motives and influences behind them.
A proper behavioral analysis goes far beyond basic metrics like page views or monthly active
users. From mapping the buyer journey to understanding what drives consumer purchasing
decisions, behavioral analytics tools help teams track, categorize, and uncover insights into
what, why, how, and when customers do what they do.
A thorough customer analysis involves several steps, which we’ll discuss below. When
properly executed, behavioral analysis provides a wealth of information that can be used across
the organization. Understanding this behaviour will help you make predictions about what
comes next and adapt your strategies for – from product to sales and marketing – to better
reflect your customer’s behaviour patterns. When you provide a customer experience that meets
your customers’ needs, you’re more likely to drive sales and maximize your ROI. By examining
customer-generated data and your own operational data using qualitative and quantitative
approaches, you can identify how customers behave at each interaction and understand what
drives that behaviour. You can use a customer behaviour analytics tool to help you surface
trends and actionable insights from large quantities of customer data.
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INDEX
Certificate ...................................................................................................................... 03
Acknowledgement ...........................................................................................................05
BIBLIOGRAPHY ........................................................................................................ 86
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CHAPTER - 1
INTRODUCTION
How many times do you make decisions throughout the day? What should I wear today? What
perfume should I put on? What am I going to have for lunch?
If you think about it, we make many buying decisions every day without giving them much
thought.
These decisions, as insignificant as they might seem, keep marketers up at night. Because
decoding the processes behind customers’ decisions means that we can use that info to boost
revenue.
Consumer behaviour is the study of consumers and the processes they use to choose, use
(consume), and dispose of products and services, including consumers’ emotional, mental, and
behavioral responses. Understanding consumer behavior is crucial for businesses to create
effective marketing strategies that can influence consumers’ decision-making processes.
Consumer behavior incorporates ideas from several sciences including psychology, biology,
chemistry, and economics.
By understanding consumer behavior, businesses can tailor their marketing efforts to target
specific groups, improve brand loyalty, and identify emerging trends. This knowledge can also
help businesses stay ahead of their competition and adapt to changes in consumer behavior.
Consumer behaviour is the study of the process involved in selecting, purchasing, using, or
disposing of products, services, ideas or experiences by individuals, groups, and organizations
to meet their needs and desires. (Solomon, 2006).
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Why is consumer behavior important?
By understanding how consumers decide on a product, they can fill in the gap in the market
and identify the products that are needed and the products that are obsolete.
Studying consumer behavior also helps marketers decide how to present their products in a
way that generates a maximum impact on consumers. Understanding consumer buying
behavior is the key secret to reaching and engaging your clients and converting them to
purchase from you.
• What consumers think and how they feel about various alternatives (brands, products,
etc.).
• How consumers’ environment (friends, family, media, etc.) influences their behavior.
Consumer behavior is often influenced by different factors. Marketers should study consumer
purchase patterns and figure out buyer trends.
In most cases, brands influence consumer behavior only with the things they can control; think
about how IKEA seems to compel you to spend more than what you intended to every time
you walk into the store.
So, what are the factors that influence consumers to say yes? There are three categories of
factors that influence consumer behavior:
3. Social factors: family, friends, education level, social media, income, all influence
consumers’ behavior.
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Types of consumer behavior
This type of behavior is encountered when consumers are buying an expensive, infrequently
bought product. They are highly involved in the purchase process and consumers’ research
before committing to a high-value investment. Imagine buying a house or a car; these are an
example of complex buying behavior.
The consumer is highly involved in the purchase process but has difficulties determining the
differences between brands. ‘Dissonance’ can occur when the consumer worries that they will
regret their choice.
Imagine you are buying a lawnmower. You will choose one based on price and convenience,
but after the purchase, you will seek confirmation that you’ve made the right choice.
Habitual purchases are characterized by the consumer having very little involvement in the
product or brand category. Imagine grocery shopping: you go to the store and buy your
preferred type of bread. You are exhibiting a habitual pattern, not strong brand loyalty.
4. Variety-seeking behavior
In this situation, a consumer purchases a different product not because they weren’t satisfied
with the previous one, but because they seek variety. Like when you are trying out new shower
gel scents.
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Important factors that influence consumer behaviour
Kotler & Keller (2015) outline that consumer’s buying behaviour is influenced by four driven
factors: cultural, social, personal, and psychological factors. The deepest influence on
consumers’ buying behaviour is caused by cultural factors among others.
• Cultural factors
Culture is the basic determinant of an individual’s wants and behaviour. Culture is a particular
group of people's characteristics and knowledge, including language, religion, cuisine, social
habits, music, and the arts. Culture, subculture, and social class have a particular impact on
consumer buying behaviour. Each culture consists of smaller subcultures and varies from one
country to another. These subcultures identify and classify people based on their shared
customs and beliefs. Subcultures include nationalities, religions, racial groups, and geographic
regions. Therefore, companies should create specialized marketing programs to suit certain
preferences of a subculture. (Kotler & Keller, 2015) According to Kotler & Keller (2015)
everyone belongs to a certain social class that influences the buying decision. People who
belong to the same social class share similar interests, values and behaviour. Therefore,
members from different social class possess different buying behaviours and have distinct
product and brand preferences. In order to understand how to best market existing products and
find opportunities for new products, marketers need to pay close attention to cultural values in
each country.
• Social factors
Besides cultural factors, our buying behaviour is affected by social factors such as reference
groups, family, and social roles and status. A person’s reference group is a group that is
associated with an individual who wants to be a part and be called a member of that group. For
instance, family, friends, neighbors, as well as religious, professional, and trade-union groups
can influence consumer preference in choosing a specific product or service. It is observed that
all members of the reference group share common buying behaviour and influence each other
strongly on product and brand choices. Therefore, marketers should identify the roles that
influence other people's behaviour within the reference group. (Kotler & Keller, 2015) Family
members are the most influential reference group for an individual’s decision making with an
emphasis on the purchase of certain goods and services. Moreover, family factor influences the
individual’s personality, attitude, and beliefs. According to Kotler & Keller (2015) there are
two families in a buyer’s life: a family of orientation and family of procreation. The family of
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orientation consists of parents and siblings, where parents have a strong influence on a person’s
behaviour. However, a family of procreation includes the person’s spouse and children, where
the preferences tend to change with the influence of the spouse.
The position and role of an individual in society also affect his/her buying behaviour. For
example, it is expected that a person holding a supreme position in the organization will buy
those items that advocate his or her status. Marketers should try to understand the position and
role of the individual long before the product is endorsed. (Kotler & Keller, 2015)
• Personal factors
Personal characteristics have a direct impact on consumer behaviour, and they include age and
life cycle stage, occupation and economic situations, personality and self-concept, lifestyle and
values. Therefore, it is important for marketers to understand this factor before designing a
marketing campaign. A consumer’s taste and preferences are most often influenced by their
age. This can be most commonly seen in food, clothing and any recreational activity purchases
they may do. People tend to buy different products in the different life cycle stages throughout
the entire life. For example, the brand of a perfume which individual used some years ago
might not suit his/her desires and needs in the present moment. Therefore, preferences in
purchasing a product constantly change. (Kotler & Keller, 2015) Occupation and economic
circumstances influence consumer behaviour in the marketplace as well. Both product and
brand choice are affected by the economic circumstances of the individual. Simultaneously,
individuals tend to buy products and services that promote their profession and role in society.
Buying patterns vary according to the individual’s occupation. (Kotler & Keller, 2015)
Consumer buying behaviour is strongly affected by personality and self-concept factors. By
personality, Kotler & Keller (2015) distinguish human psychological characteristics that lead
to behaviour buying responses that are relatively consistent and enduring. Each brand has a
personality. Consumers tend to choose and use brands that correspond to their personality and
are consistent with their actual self-concept that corresponds to how they view themselves.
Marketers carefully examine brand experiences to express brand personalities. According to
Kotler & Keller (2015) lifestyle and core values also influence consumer buying behaviour. By
lifestyle, the author defines an individual’s interest, opinions and activities that reflect the
person’s pattern of living in the society. However, core values guide people’s enduring choices
and desires and underlie attitudes and behaviours. Therefore, marketers orientate of consumer’s
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basic values and believe that their buying behaviour can be influenced by appeals to the inner
selves of people.
• Psychological factors
Psychological factors can affect consumer behaviour very strongly. That includes motivation,
perception, learning and memory. The level of motivation affects consumers' buying behaviour.
People tend to have many needs through any given time. Some needs are biogenic; they arise
from physiological states of tension such as hunger, thirst, or discomfort and other needs are
psychogenic; they arise from physiological states of tension such as the need for recognition,
esteem, or belonging. Therefore, people will try to satisfy the most important need first and
then move to the next need. (Kotler & Keller, 2015) A motivated person is ready to act with the
perception of the situation. Perception is also a psychological factor that is the process by which
an individual selects, organizes, and interprets information to draw a meaningful picture of the
world. Depending on their individual beliefs and attitudes, different people have different
perceptions of the same product. Therefore, marketers should try to understand the behaviour
and attitude of each individual to gain their attention towards the offerings. (Kotler & Keller,
2015) Learning process arises from a consumer’s experiences and is followed by action.
According to Kotler & Keller (2015) learning is produced from drives, stimuli, cues, responses,
and reinforcement, which means that if a consumer has a positive buying experience, then in
the future the customer will choose the same brand. Consumers tend to have several strong
associations and information about a brand that creates essential brand knowledge. Through
thoughts and feelings, perceptions and images, experiences, beliefs and attitudes, customers
create brand associations. Therefore, marketers have to ensure that consumers have the product
and service experiences that create the right brand knowledge and maintain this information in
their memory. (Kotler & Keller, 2015).
• Marketing campaigns
Marketing campaigns influence purchasing decisions a lot. If done right and regularly, with the
right marketing message, they can even persuade consumers to change brands or opt for more
expensive alternatives.
Marketing campaigns, such as Facebook ads for eCommerce, can even be used as reminders
for products/services that need to be bought regularly but are not necessarily on customers’ top
of mind (like insurance for example). A good marketing message can influence impulse
purchases.
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• Economic conditions
For expensive products, especially (like houses or cars), economic conditions play a big part.
A positive economic environment is known to make consumers more confident and willing to
indulge in purchases irrespective of their financial liabilities.
The consumer’s decision-making process is longer for expensive purchases, and it can be
influenced by more personal factors at the same time.
• Purchasing power
Finally, our purchasing power plays a significant role in influencing our behavior. Unless you
are a billionaire, you will consider your budget before making a purchase decision.
The product might be excellent, and the marketing could be on point, but if you don’t have the
money for it, you won’t buy it.
Segmenting consumers based on their buying capacity will help marketers determine eligible
consumers and achieve better results.
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Consumer decision-making process
The decision-making process is the method that marketers use to identify and track the decision
of a customer journey. This method helps to analyze the consumer’s decision-making process
from beginning to the end and it is divided into five separate stages where all the steps are
carefully studied by marketing managers. This process helps to understand how information is
obtained, how beliefs are formed, and what consumer criteria for product selection are
specified. (Solomon, 2006) Moreover, aspects of acting in a more sustainable way and
integration of sustainable consumption in each stage of the consumer decision-making process
are discussed in this chapter.
Problem recognition
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The consumer buying decision-making process starts with the problem recognition stage. This
stage identifies the difference between the consumer’s recognition of needs and wants. It occurs
when the consumer senses a significant difference between his or her current situation versus
a desired and ideal state. (Solomon, 2006) By collecting information from several consumers,
marketers need to identify the circumstances that trigger a particular need. (Kotler & Keller,
2015) For instance, a problem recognition might occur when an individual changed the
environment to constantly raining weather. Then, a person’s need will be to find suitable warm
and rain protection clothes as well as an umbrella.
Information search According to Solomon (2006) when the problem has been recognized,
consumer needs to find information to resolve it. Information search is the process when a
consumer examines his or her environment to find suitable data to make a reasonable decision.
In practice, information search activity becomes greater when the purchase is important, so
there is a need to learn more about the purchase and study different information sources.
(Solomon, 2006) Marketers need to understand what kind of information consumers are
looking for at different times and locations. (Kotler & Keller, 2015) According to Kotler &
Keller (2015) a consumer can gather information from the four main groups of information
sources. These information sources are divided into personal, commercial, public, and
experiential sources. However, each information source influences the buying decision and
varies according to the product category and the characteristics of the consumer. The
commercial source is a marketer- dominated source, where a consumer receives the greatest
amount of information about the product. This source includes advertisements, websites,
salespersons, dealers, packaging and displays. However, the most effective sources are
personal, public, and experiential that tend to be independent authorities. Personal sources are
defined by family, friends, neighbors, and acquaintances. Information source such as public
includes mass media, social media, and consumer rating organizations. (Kotler & Keller, 2015)
The experiential source for searching information consists of acts such as handling, examining,
and using the product itself. In fact, choosing this source of information puts an emphasis on
the consumption experience and what a consumer can experience by using the specific kind of
product. Thus, it would be based on an individual’s own perception of the product through the
earlier use of it. (Kotler & Keller, 2015) In addition, the public source, which includes mass
media provides increasingly valuable information towards advertising a specific range of
products with consumption benefits to the environment and the world itself. Therefore,
consumers become aware of these groups of products and brands through the public sources
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and are more likely to be engaged in sustainable consumption through purchasing products
from a sustainable brand.
Evaluation of alternatives
According to Solomon (2006) there is much effort involved in a purchase decision, when it
takes place at a time when the available alternatives must be chosen. Nowadays, it is becoming
more challenging for a consumer to make a choice on a purchase, as the market provides a
variation of brands that clamors customer’s attention. Evaluation of alternatives starts with
identifying alternatives. A consumer involved in extended problem-solving will carefully
evaluate several brands, while someone who makes a regular decision may not consider
alternatives to their normal brand. The consumer evaluates a product with the careful
categorization of all the options based on his/her knowledge and beliefs about the brand and
afterwards selects a product among the alternatives. The choice can be influenced by the
integration of information from sources, information present at the time of purchase, and beliefs
about the brands created through advertising. (Solomon, 2006) In this stage of a consumer’s
decision-making process, environmental concerns and buying behaviour of evaluating the
product alternatives are based around environmental costs, risks and benefits that will lead to
the future assessment of choices in choosing what to purchase. One approach to evaluating
more sustainable consumption patterns of a consumer is to consider whether a customer is
acquiring the more sustainable option from the product alternatives and at the same time to
consider future behaviour in using and disposing of the product.
Purchase decision
The consumer forms preferences among the brands in the choice set during the evaluation
stage and further creates an intention to buy the most preferred brand. During the purchase
decision process, the consumer still must make five following sub-decisions: brand, dealer,
quantity, timing, and payment method. (Kotler & Keller, 2015) Consumers may not formally
evaluate each purchase decision in some cases, while the final decision may be affected by
intervening factors in other cases. The first intervening factor is a factor of the attitude of others.
An individual’s purchase decision might affect what others think about the purchase because
people tend to depend on other’s opinion and attitude. The second intervening factor includes
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unanticipated situational factors. These factors might affect the postponing, modifying, or
avoiding of a purchase decision because of a perceived risk. Marketers need to understand the
factors that give consumers a sense of risk and provide information and support to reduce it.
(Kotler & Keller, 2015) In addition, to increase consumer’s sustainable performance in
consumption, a consumer might reconsider the manner of buying behaviour. In the stage of a
purchase decision, it might be evaluated through the purchasing of the product with an
emphasis on environmental benefit against other attributes of product features such as price,
performance, and design.
Post-purchase evaluation
Consumers may feel uncertain about a purchase after noticing disquieting product features or
hearing good recommendations about other brands. According to Kotler & Keller (2015)
marketing communications should supply support and beliefs for consumers that reinforce and
continually support positive feelings about a purchase. In addition, marketers should monitor
consumer behaviour from post-purchase satisfaction, post-purchase actions and post-purchase
product use and disposal. Satisfaction is a function of the closeness between expectations and
perceived performance of the product. The state of customer feelings after a purchase influence
greatly a company’s brand as it makes the difference if the customer buys the product again in
the future and talks positively or negatively about the product features to others. Moreover,
marketers should also monitor how buyers use and dispose of the product. Product
consumption rate is a key driver of sales frequency — the faster buyers consume a product, the
sooner they can be back on the market to buy it back. (Kotler & Keller, 2015) Likewise, during
this stage, the total consumption process approach must be taken into consideration. The use
and post-use phases play a key role in a sustainable impact and sustainable consumer
performance after the customer makes a purchase. This phase plays a crucial role for the
environment in terms of the overloaded landfill. Therefore, consumers can keep, reuse and
dispose of a product in a more sustainable way through selling or recycling that can lead to
positive changes to the environment and production processes. (Sustainable guide for
consumers: Eat well and save the planet!, 2007) It can be concluded that the buying behaviour
of consumers will determine the success or failure of new products and services being marketed
based on their performance in sustainability. Their overall behaviour will also have a strong
impact on the sustainability performance of all goods and services due to the role of consumers
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in determining sustainability impacts during the use and disposal phases of the consumption
process. (Wikipedia, 2019)
Sustainable consumer behaviour is the behaviour of a consumer that enhances social and
environmental performance, addressed by an individual’s wants and needs. (Wikipedia, 2019)
Consumption is not only an economic phenomenon that drives the economy of the whole
population and consumers’ behaviour, but it is also a process that helps individuals to express
their identity and establish a place in the society. It is a set of studies that identifies answers to
the questions of why and how consumers incorporate sustainability issues into their consumer
behaviour or not. It also studies what consumers purchase, how they use these products and
what they subsequently do with them. (Reisch, Eberle, & Lorek, 2013) In recent years, global
consumption patterns are unsustainable. It becomes obvious that efficiency gains and
technological advances alone are not sufficient to sustain global consumption. Therefore,
consumer consumption patterns that include consumer choice of products and services must be
changed immediately. (Sustainable consumption facts and trends: From a business perspective,
2008) Sustainable consumption and buying behaviour can be derived from a set of assumptions
and can be approached from different perspectives. For instance, the policy maker’s view, the
marketing view or the consumer field of interest.
Sustainable consumption covers aspects not only of products and services purchased from a
green brand but also it is an adoption of a lifestyle, where sustainability is reflected in all aspects
of consumers’ behaviour. The lifestyle and habits of an individual can include simple methods
that will lead to a more advanced form of sustainable consumption. These methods can include
the tendency of consuming fewer products and services and seek out and choose products that
have a reduced ecological impact, resource efficient and durable. Sustainable consumption also
leads towards being more ecologically aware of products and items people buy in order to
protect the environment. Moreover, the physical process of sequence conservation of resources
and reduction of waste should also be considered. Unfortunately, the food and beverage
industry is described as the most significant sector that leaves an ecological footprint in both
production and consumption stages due to the great impacts on the environment. Food
consumption tends to be an important issue in sustainable consumption and production policies.
(Reisch, Eberle, & Lorek, 2013) These consumption patterns are influenced by consumer
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buying decisions, however, and the way individual’s needs are met, are a major driver behind
climate change that will have consequences for people, countries, and species worldwide.
Therefore, consumers might adopt several consumption patterns in order to maintain the world
in a more sustainable way. In recent years, there is growing consumer demand for more
seasonal and local food. According to the National Consumer Council (NCC), seasonal food
can offer better taste and at the same time be more affordable on the market. Moreover,
purchased local food can deliver fresh taste, reduce food miles, farmers and communities can
take a huge advantage and it helps to reconnect consumers with where their food comes from.
Another way for a sustainable consumption comes from consuming less red meat, processed
meat and products of animal origin. There are many factors that affect sustainable production:
energy used for the production of fertilisers in animal feed, deforestation for making crops for
an animal feed caused by the reflection in less absorption of carbon dioxide and a large amount
of animal feed that is being produced for animals, which consumer buy and eat later. By this
consumption pattern of reducing meat intake, it will significantly help on the human’s effects
on the environment, while improving overall human’s health condition. In addition, products
bought from the company that integrates the Fairtrade principle is a significant motivator for
customers to choose the product among other alternatives. Fairtrade-certified products are
products, which are imported from poorer countries and that offer a fair-trade deal for
producers. Buying Fairtrade products is about improving the well-being and livelihoods of
farmers and workers in poorer countries, improving trade relation-ships and ensuring better
working conditions, greater access to health care and a higher living standard. However, the
de- gree to which the Fairtrade system involves companies varies greatly. Some firms work
entirely on fair trade principles and may be partly owned by producers in poorer countries or
reinvest a percentage of their profits to support producers' development programs.
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In terms of the sustainable use of products, the role of business and the role of consumers are
inherently linked. The product's environmental footprint in terms of production and disposal
and the proper use of the product in terms of its impact on the environment will be crucial.
Therefore, companies, governments and communities should understand current and future
consumption patterns, in order to change buying behaviour and develop more sustainable
products and ser- vices. (Sustainable consumption facts and trends: From a business
perspective, 2008)
Over and above that, by integrating an efficient production that includes the use of natural re-
sources, minimizing waste and optimizing products and services, companies, governments and
communities can benefit from increased competitiveness and profitable operations.
(Sustainable consumption facts and trends: from a business perspective, 2008) Meanwhile, the
ultimate ben- efit of consuming products in a more sustainable way can also lead to personal
satisfaction and develop a high quality of life through consumption experiences.
The competing needs stand for the need of our population to move forward technologically and
economically, and the needs to protect the environment, where we live.
The global economy is constantly growing. Companies that integrate sustainability in the
business model and recognise sustainable business innovation in their products and services
will create a huge benefit and success in the twenty-first century. (Lubber, 2011) Company’s
strategies that are aimed not only at making a profit but also at long - term profitability and
environmentally friendly sustainability have begun to become company agendas. In the same
way, as for custom- ers, shareholders and employees, companies should be aware of their
responsibilities towards the environment and society. In the future, it will be important for
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consumer choices if the brand is delivering performance that is based on sustainability.
(Boztepe, 2012)
Sustainable development is a long-term integrated approach that aims at balancing our eco-
nomic, environmental and social needs and enabling prosperity for generations together with
the minimising the over-consumption of key natural resources. (Jargan, 2015) There are three
main core areas that contribute to sustainable development philosophy and social science
according to The World Summit on Social Development. Different companies integrate
sustainable devel- opment activities through a different approach. (Commission, 2014)
Figure 2: The three pillars of sustainability (Purvis, Mao, & Robinson, 2018)
Economic development
Economic development ensures a healthy balance of our economic growth with our ecosystem.
Nevertheless, economic sustainability includes ensuring that the business makes a profit, but
also ensuring that business operations do not create social or environmental issues that harm
the company's long - term success. This pillar provides incentives for companies and other
organiza- tions to comply with the sustainability guidelines beyond their normal legislative
15
requirements. Besides, the market in supply and demand is consumerist in nature, and every
day modern life requires plenty of resources. As people tend to have high-consumption
patterns, companies have to ensure fair distribution and efficient allocation of all their
resources. (Jargan, 2015)
Social development
Social initiatives have an impact on consumer behaviour and employee performance. Social
de- velopment ensures the importance of awareness and legislation to protect humans’ health
from pollution and harmful organizations' activities. A sustainable business should have its
employees, stakeholders and the community support and approval, in which it operates in. This
pillar focuses on the company’s initiatives in social equity, treating employees fairly and being
a good commu- nity member locally and globally. (Jargan, 2015)
On the employee side, businesses focus on strategies for retention and engagement, including
more responsive benefits such as better maternity and paternity benefits, flexible scheduling,
and opportunities for learning and development. Companies have come up with many ways to
give back for community engagement, including fundraising, sponsorship, scholarships, and
local pub- lic project investment. (Beattie, 2019)
Environmental development
Environmental protection is the primary concern of the future of humanity and gets the main
attention from business. Moreover, environmental initiatives that include energy efficiency and
pollution mitigation can have a direct impact on reducing waste. Companies focus on
maintaining environmental development by reducing their carbon footprints, waste packaging,
water use, and overall environmental impact. Moreover, companies that are managing
environmental aspects, can cause a beneficial impact on the planet and also have a positive
financial impact. (Beattie, 2019) Other companies with an undeniable and obvious impact on
the environment, such as min- ing or food production, approach the environmental pillar by
benchmarking and reducing it. One of the environmental pillar challenges is that the impact of
a business is often not fully costly, which means externalities are not captured. (Beattie, 2019)
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The EPA recognized the key to this sustainability is the development of technology and the
pro- tection of the environment of the future from potential damage that technological advances
could potentially bring. (Jargan, 2015)
The green consumer is defined as the one, who adopts environmentally friendly behaviours
and/or buys green products over standard alternatives. Moreover, green consumers concern
about the environmental impact caused after their buying behaviour. Such type of consumers
tends to consider that each individual consumer as well as government, business and environ-
mentalists can play a role as a consumer and has to be in charge of environmental protection.
(Boztepe, 2012)
The “Green Gap” is the gap of inconsistency in consumers’ attitude and knowledge among the
actual buying behaviour. Significant numbers of consumers claim to be "green," but the extent
to which they are willing to buy goods based solely on environmental grounds is unclear.
(Ottman, 1998) Despite the significant increase in environmental awareness among consumers,
many of them have not taken their concerns into account in their actual choices and
consumption behav- iours. This may be due to the consumers, who are not willing to give up
or change their way of life.
Moreover, on practice, customers are unwilling to adopt green products, particularly because
of the various risk’s consumers perceive in their purchases. Perceived risks stand for the
uncertainty of the potential negative consequences that can arise with a choice of the product.
Those per- ceived risks are known as the explanation of the ‘Green Gap’. (Durif, Roy, &
Boivin, 2012)
The “green gap” is defined as the gap between consumers’ green intentions and green actions
that leads towards a high concern for the environment but a low green shopping behaviour.
(Guyader, Ottosson, Aichagui, & Witell, 2014)
17
In addition, there is a discrepancy between what consumers think is socially and ecologically
sus- tainable and what is their actual behaviour. This may be due to the lack of knowledge of
consum- ers about general consumer environmental impacts.
The actual consumption of green products around consumers is remaining moderate. There are
three main reasons affecting the moderate consumption of green products. First of all, consum-
ers remain sceptical about green practices of companies, as they lack the credibility of green
products and mislead green claims. Second, some consumers are unwilling to buy green
products because of the risks they can perceive. These risks include the product’s quality, price
and lack of information about the green product and its position on the market. Third, a green
gap can occur between pro-environmental attitudes and green purchase behaviour. The
phenomenon of the green gap can be explained for reasons relating to consumer’s status,
reputation and altruism. (Durif, Roy, & Boivin, 2012)
A green brand is a brand where environmental values build up the essence of the brand. Moreo-
ver, the green brand has an increased recognition and awareness of the environmental issues
and its emphasis lays on environmental sustainability. (Insch, 2011) When a company is going
green, it can benefit in several ways. First of all, the greening production processes often lead
to im- proved resource efficiencies, lowering the cost structure of the company and enhancing
its com- petitive position. Secondly, going green allows the company to distinguish itself by
offering new products in new markets or by offering additional benefits for current products.
Such practices can improve the company’s position in the marketplace and at the same time
develop new cus- tomer segments and enhance customer loyalty. (Polonsky & Rosenberger,
2001)
While green products are often "priced" higher than traditional goods, this does not always
mean that they cost more, especially if all associated costs are considered. Green goods often
have higher out - of - pocket initial costs but lower long - term costs. (Polonsky & Rosenberger,
2001) They may expect "green" goods to be priced competitively and perform the same as
18
others, thereby using the greenness of a product to distinguish between two relatively equal
goods. (Ottman, 1998)
According to the Sustainable Brand Index Official Report from 2018, Food and beverage is a
new leading industry within sustainability. The top three companies that make the ranking of
the most sustainable brands in Finland are as follows: Valio, Kotimaista and Fazer. These
brands are con- sidered to be the most sustainable in Finland for 2018. (Sustainable Brand
Index, 2018)
With environmental issues gaining importance to people, businesses have begun to change their
production, goods or service generation, and consequently marketing strategies. Companies
started producing environmentally friendly products. (Boztepe, 2012) Green marketing is a
com- plex strategy that has to achieve two goals at the same time: to improve environmental
quality while satisfying consumers. (Ottman, 1998)
Green marketing is a holistic, integrated approach that continually reassesses how companies
can achieve corporate goals and meet consumer needs while minimizing ecological harm in the
long term. (Polonsky & Rosenberger, 2001) Green marketing is a complicated tool that has to
be inte- grated across all areas and activities of the organization and be implemented
successfully in order to achieve long - term benefits. Moreover, a green marketing strategy can
lead to greater re- source efficiency and financial savings. In other words, less input is being
used and less waste or pollution is being generated. (Polonsky & Rosenberger, 2001)
Green marketing refers to the selling process based on the environmental benefits of products
and/or services. Such a product or service can be environmentally friendly or eco – friendly.
However, green marketing can be a very powerful marketing strategy when done correctly.
(Ward, 2018).
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Customer behavior patterns
Buying behavior patterns are not synonymous with buying habits. Habits are developed as
tendencies towards an action, and they become spontaneous over time, while patterns show a
predictable mental design.
Each customer has his unique buying habits, while buying behavior patterns are collective and
offer marketers a unique characterization. Customer behavior patterns can be grouped into:
1. Place of purchase
Most of the time, customers will divide their purchases between several stores even if all items
are available in the same store. Think of your favorite hypermarket: although you can find
clothes and shoes there as well, you’re probably buying those from actual clothing brands.
When a customer has the capability and access to purchase the same products in different
stores, they are not permanently loyal to any store unless that’s the only store they have access
to. Studying customer behavior in terms of choice of place will help marketers identify key
store locations.
2. Items purchased
Analyzing a shopping cart can give marketers lots of consumer insights about the items that
were purchased and how much of each item was purchased. Necessity items can be bought in
bulk while luxury items are more likely to be purchased less frequently and in small quantities.
The amount of each item purchased is influenced by the perishability of the item, the
purchasing power of the buyer, unit of sale, price, number of consumers for whom the item is
intended, etc.
Customers will go shopping according to their feasibility and will expect service even during
the oddest hours, especially now in the era of e-commerce where everything is only a few clicks
away.
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It’s the shop’s responsibility to meet these demands by identifying a purchase pattern and
matching its service according to the time and frequency of purchases. One thing to keep in
mind: seasonal variations and regional differences must also be accounted for.
4. Method of purchase
A customer can either walk into a store and buy an item right then and there or order online
and pay online via credit card or on delivery.
The method of purchase can also induce more spending from the customer (for online
shopping, you might also be charged a shipping fee for example).
The way a customer chooses to purchase an item also says a lot about the type of customer he
is. Gathering information about their behavior patterns helps you identify new ways to make
customers buy again, more often, and with higher values.
Think about all the data you’ve already collected about your customers. The purchase patterns
are hiding in your e-store’s analytics, and you can either look for insights manually or integrate
a tool with your eCommerce platforms such as Shopify to get automated insights about
behavior patterns.
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Purchase Pattern
Purchase patterns refer to the recurring behaviors and trends observed in how consumers buy
goods or services over a period of time. These patterns are essential for businesses and
marketers as they provide valuable insights into customer preferences, habits, and decision-
making processes. By analyzing purchase patterns, businesses can anticipate demand, optimize
inventory, design effective marketing strategies, and enhance overall customer satisfaction.
• Frequency of Purchases: Purchase patterns often reveal how frequently customers buy
a particular product or service. Some products, such as groceries, are bought regularly,
while others, like electronics, might be purchased less frequently.
• Average Transaction Value: Purchase patterns can indicate the average amount
customers are willing to spend per transaction. This information helps businesses in
pricing strategies and bundling products or services.
• Preferred Payment Methods: Analyzing purchase patterns can provide insights into the
preferred payment methods of customers, whether they prefer cash, credit cards, mobile
payments, or other options.
• Product Preferences: Customers often exhibit preferences for specific brands, models,
or features. By analyzing purchase patterns, businesses can identify which products are
popular and adjust their inventory or marketing strategies accordingly.
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• Shopping Channels: With the rise of e-commerce, purchase patterns also encompass
the channels through which customers make their purchases. Some customers prefer
online shopping, while others prefer in-store experiences.
• Customer Loyalty: Repeat purchases from the same customers indicate loyalty.
Tracking these patterns helps businesses in customer retention strategies, such as
loyalty programs and personalized offers.
• Demand Forecasting: Businesses can predict future demand for their products or
services based on historical purchase patterns. This enables them to manage their
inventory efficiently, avoiding shortages or overstocking.
23
In summary, purchase patterns are a vital component of market research. They offer valuable
insights into customer behavior, enabling businesses to make informed decisions, create
effective marketing strategies, and ultimately provide products and services that align with
customer needs and expectations.
1- Online vs. Offline Shopping: Trends in e-commerce and its impact on traditional retail.
2- Impulse Buying vs. Planned Purchases: Understanding the psychology behind spontaneous
vs. planned buying behavior.
3- Brand Loyalty and Repeat Purchases: Analysis of customer loyalty programs and their effect
on repeat business.
4- Seasonal and Cultural Influences: Examining how holidays and cultural events affect
consumer spending.
Online shopping and traditional offline shopping have both undergone significant
transformations in recent years, driven by advancements in technology and changing consumer
preferences. Let’s explore the trends in e-commerce and its impact on traditional retail.
• Traditional Retail: While physical stores offer hands-on experience, they lack the 24/7
accessibility of online platforms, which is crucial in today’s fast-paced world.
24
• Online Shopping: E-commerce sites excel in offering vast product selections. They also
use algorithms to personalize product recommendations based on customer preferences
and browsing history.
• Traditional Retail: Physical stores might have limited space, leading to a more curated
selection. However, they can provide personalized assistance through knowledgeable
staff.
• Online Shopping: E-commerce platforms often offer competitive prices due to lower
overhead costs. Online shoppers can easily compare prices and find the best deals.
• Traditional Retail: While some stores offer unique in-person discounts, online platforms
frequently host sales events, making it easier for consumers to find discounts without
leaving their homes.
4. Shopping Experience:
• Online Shopping: Virtual try-ons, augmented reality features, and detailed product
descriptions enhance the online shopping experience. However, it lacks the physical
sensory experience of touching and trying products.
• Traditional Retail: Physical stores provide a sensory experience: customers can touch,
feel, and try products before making a decision. Skilled salespeople enhance the
experience through personalized recommendations.
5. Social Interaction:
• Online Shopping: Social media integration and online reviews allow for virtual social
interactions. Customers can share their purchases and experiences with a broader
audience.
• Traditional Retail: Physical stores foster face-to-face social interactions. Shopping has
become a social activity, allowing friends and family to spend time together.
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1. Impulse Buying:
Definition: Impulse buying refers to the act of making unplanned and spontaneous purchases,
often triggered by emotions, visuals, or limited time offers.
Psychological Triggers:
• Visual Stimulation: Visually appealing displays or online ads can trigger impulsive
reactions, as humans are highly responsive to visual cues.
• Instant Gratification: Impulse buyers seek immediate pleasure and gratification, valuing
the emotional satisfaction of owning a product right away.
2. Planned Purchases:
Definition: Planned purchases involve careful consideration, research, and intention before
making a buying decision. Buyers actively seek information and compare options.
Psychological Triggers:
• Need Recognition: Recognizing a need or problem initiates the planned buying process.
Consumers then search for solutions that best fulfill their requirements.
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• Social Influence: Recommendations from friends, family, or online reviews play a
significant role in planned purchases, influencing perceptions of a product's reliability.
• Long-Term Benefits: Buyers focus on the long-term value, durability, and functionality
of a product, considering how it fits into their lifestyle or solves a persistent issue.
• Personal Factors: Individual traits, lifestyles, and experiences shape buying behavior.
Impulsive individuals may succumb to temptation more readily.
• Cultural and Social Norms: Cultural backgrounds and societal expectations influence
whether impulsive or planned buying behavior is considered acceptable.
• Setting Limits: Establishing budgets and shopping lists can prevent impulsive spending,
encouraging planned purchases aligned with financial goals.
Brand Loyalty and Repeat Purchases: Analyzing Customer Loyalty Programs and Their
Effect on Repeat Business
Customer loyalty programs are strategic initiatives employed by businesses to cultivate repeat
business and brand loyalty among their customers. These programs offer rewards, discounts,
or exclusive access to incentivize consumers to make repeat purchases. Let's analyze the impact
of these loyalty programs on customer behavior and repeat business:
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1. Building Emotional Connections:
• Repeat Business: Emotional connections fostered by these programs often lead to repeat
purchases. Customers return because they not only enjoy the products but also the
overall experience and the feeling of being valued.
• Loyalty Programs: Rewards and discounts provided through these programs serve as
incentives for customers to choose a specific brand over competitors. Points, cashbacks,
or exclusive member-only deals encourage repeat buying behavior.
• Repeat Business: Higher retention rates translate into repeat business. Loyal customers
are less likely to be swayed by competitors, leading to a stable revenue stream for the
business.
4. Word-of-Mouth Marketing:
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• Loyalty Programs: Satisfied customers engaged in loyalty programs often become
brand advocates. They recommend the brand to friends and family, creating positive
word-of-mouth marketing.
• Repeat Business: Positive recommendations from loyal customers attract new buyers
while reinforcing the loyalty of existing ones, contributing to a cycle of repeat business
and brand advocacy.
• Loyalty Programs: Data collected from these programs allow businesses to understand
customer preferences. Personalized offers based on this data enhance the customer
experience.
6. Competitive Edge:
• Loyalty Programs: Businesses with attractive loyalty programs gain a competitive edge.
Customers are more inclined to choose a brand that offers additional perks over one
that does not.
• Repeat Business: This competitive advantage translates into sustained repeat business.
Customers continue to choose the brand due to the added value provided by the loyalty
program.
Seasonal and Cultural Influences: Understanding the Impact of Holidays and Cultural
Events on Consumer Spending
Consumer spending patterns are significantly influenced by both seasonal changes and cultural
events. These influences play a crucial role in shaping purchasing behavior and market trends.
Let’s examine how holidays and cultural events affect consumer spending:
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1. Seasonal Influences:
• Impact: Retailers witness higher sales in summer clothing, sunglasses, sunscreen, and
outdoor furniture, as consumers prepare for vacations and outdoor gatherings.
b. Back-to-School Season:
• Retail Impact: Retailers prepare for the holiday rush, offering special discounts and
promotions. Online retailers compete fiercely for customer attention, leading to record-
breaking online sales.
2. Cultural Influences:
30
• Consumer Spending: Cultural events, such as Diwali, Christmas, Hanukkah, or Lunar
New Year, lead to increased spending on gifts, traditional clothing, decorations, and
special foods.
• Retail Impact: Specialty stores and markets catering to specific cultural items
experience a surge in sales. Online platforms offer curated selections to cater to diverse
cultural celebrations.
• Retail Impact: Restaurants, cinemas, amusement parks, and local attractions benefit
from heightened consumer spending during holidays, resulting in increased revenue.
3. Psychological Impact:
a. Emotional Buying:
b. Social Influence:
• Consumer Spending: Social gatherings during cultural events often lead to the exchange
of gifts and shared experiences, driving spending on items that enhance social
interactions.
• Retail Impact: Retailers focus on products and services that facilitate social
engagement, such as party supplies, decorations, and group entertainment packages.
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Consumer Decision-Making Processes: Understanding How Consumers Make Choices
Consumer decision-making processes refer to the series of steps that individuals go through
when buying products or services. These processes are critical for businesses to comprehend
as they provide insights into customer behavior, enabling companies to tailor their marketing
strategies effectively. The decision-making process typically involves several stages:
1. Problem Recognition:
• Recognition of Need: The process begins when a consumer perceives a gap between
their current situation and an ideal state, prompting them to recognize a need. This need
can be triggered by internal factors (personal desires or aspirations) or external factors
(advertisements or recommendations).
2. Information Search:
• Internal Search: Consumers scan their memory for information about products or
brands they are considering. This internal search involves recalling past experiences
and knowledge.
• External Search: If the internal search doesn’t yield sufficient information, consumers
turn to external sources such as family, friends, online reviews, or expert opinions. They
might also research online or visit stores to gather more data.
3. Evaluation of Alternatives:
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• Consideration Set: Consumers compile a set of options (consideration set) based on the
information gathered. They assess the features, benefits, and prices of these alternatives
to determine which one best meets their needs and preferences.
• Criteria: Consumers establish criteria against which they evaluate alternatives. These
criteria can include price, quality, brand reputation, or specific product features.
4. Purchase Decision:
• Intent to Purchase: After evaluating the alternatives, consumers form a purchase
intention for the product or service they deem most suitable.
• Decision-Making Factors: The final decision can be influenced by various factors such
as discounts, promotions, salesperson persuasion, or even unexpected situational
factors like sudden budget constraints.
5. Post-Purchase Evaluation:
• Satisfaction: After the purchase, consumers assess whether the product or service meets
their expectations. If it does, they experience satisfaction. If not, they might experience
cognitive dissonance—a feeling of discomfort leading to possible product returns or
negative word-of-mouth.
• Post-Purchase Behavior: Positive post-purchase experiences can lead to brand loyalty
and repeat purchases. Satisfied customers are more likely to recommend the product or
service to others.
E-marketing, also known as digital marketing or online marketing, refers to the use of digital
channels, platforms, and technologies to promote products, services, or brands. E-marketing
strategies have revolutionized the way businesses connect with their audience, providing
unprecedented opportunities for outreach, engagement, and growth. Here's a breakdown of the
impact of e-marketing strategies on businesses:
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1. Global Reach:
Wider Audience: E-marketing breaks down geographical barriers, allowing businesses to reach
a global audience. Through social media, websites, and online advertising, companies can
connect with potential customers worldwide, expanding their market reach.
2. Targeted Marketing:
3. Cost-Effectiveness:
Reduced Costs: Digital marketing often costs less than traditional methods like print or
television ads. Online advertising platforms offer flexible budgets, allowing businesses of all
sizes to create effective campaigns within their financial constraints. This cost-effectiveness
ensures a higher return on investment (ROI).
4. Data Analytics:
In-Depth Insights: E-marketing tools provide detailed analytics and data on consumer behavior.
Businesses can track website traffic, engagement rates, conversion rates, and more. Analyzing
this data helps in understanding customer preferences, enabling businesses to optimize their
strategies for better results.
• Direct Communication: social media and email marketing allow direct interaction with
customers. Businesses can respond to inquiries, gather feedback, and build
relationships, creating a loyal customer base.
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6. Personalization:
7. Brand Building:
8. Mobile Accessibility:
Mobile-Friendly Content: With the rise of smartphones, e-marketing strategies are optimized
for mobile devices. Mobile-responsive websites, apps, and mobile advertising ensure that
businesses can reach users who predominantly access the internet via their smartphones and
tablets.
9. Agile Marketing:
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Advertising and Branding: Shaping Consumer Perceptions and Preferences
Advertising and branding are integral components of marketing campaigns that wield
significant influence over how consumers perceive products, services, and companies. These
strategies not only create awareness but also shape consumer perceptions and preferences in
several ways:
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• Expert Endorsements: Celebrity endorsements or expert opinions in advertisements
lend credibility to the brand, especially when the endorser is respected and trusted by
the target audience.
• Consistency in Delivery: When advertising promises align with the actual product or
service experience, it reinforces the perception of quality. Consistency between
expectations set by ads and reality is crucial.
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7. Shaping Social and Cultural Perceptions:
• Social Causes: Brands often align with social or environmental causes in their
advertising campaigns. This association shapes consumers' perception of the brand as
socially responsible and ethical.
• Cultural Relevance: Advertisements that are culturally relevant and sensitive to local
customs and traditions resonate more deeply with consumers, fostering positive
perceptions of the brand.
Advertising and branding are powerful tools that not only create awareness but also mold how
consumers perceive and relate to a brand. Through consistent messaging, emotional
connections, credibility, differentiation, perceived quality, loyalty incentives, and cultural
relevance, businesses can shape consumer preferences and foster long-lasting relationships,
ultimately driving brand success in the market.
Pricing strategies play a crucial role in shaping consumer behavior and influencing purchasing
decisions. Businesses employ various techniques, including discounts, sales, and psychological
pricing, to attract customers and drive sales. Here's how these strategies impact consumer
choices:
a. Perceived Value:
• Discount Perception: Consumers perceive discounted prices as better value for their
money. Even a small discount can create a perception of savings, encouraging
purchases.
• Urgency and Scarcity: Limited-time discounts and sales create a sense of urgency.
Customers fear missing out on a good deal, prompting them to make impulsive
purchases before the offer expires.
b. Brand Loyalty:
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• Incentive for Repeat Purchases: Discounts and loyalty-based sales reward existing
customers, fostering loyalty. Customers are more likely to return to a brand that
appreciates their business through periodic discounts.
• Attracting New Customers: Discounts and sales attract price-sensitive consumers and
first-time buyers, expanding the customer base.
c. Promotion Effectiveness:
• Bundle Deals: Combining products or services into a discounted bundle often entices
customers, especially if the bundled items complement each other's use.
2. Psychological Pricing:
a. Prestige Perception:
• Odd Pricing: Setting prices just below a round number (e.g., $9.99 instead of $10)
creates an illusion of a significantly lower price. Consumers perceive such prices as
discounts, even if the difference is only one cent.
• High-End Perception: Round numbers (e.g., $100) are associated with quality and
premium products, while odd prices can appeal to budget-conscious shoppers.
• Decoy Pricing: Introducing a slightly inferior product at a significantly lower price can
make the main product seem more valuable. Consumers often choose the mid-tier
product, perceiving it as a balance between quality and price.
• Anchor Pricing: Presenting a high-priced item next to the target product can make the
target price seem more reasonable, influencing consumers to opt for the target product.
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c. Emotional Appeal:
• Charitable Pricing: Allowing customers to pay a little extra for a product, with the
additional amount donated to a charitable cause, can evoke positive emotions.
Customers feel good about their purchase, leading to loyalty and repeat business.
• Limited Edition Pricing: Limited edition products priced higher can create a sense of
exclusivity and urgency. Customers are motivated to buy before the item becomes
unavailable, driven by the fear of missing out.
3. Behavioral Economics:
a. Anchoring Effect:
• Reference Points: Consumers often anchor their perceptions of value based on initial
reference points. Discounts and psychological pricing can influence these reference
points, guiding consumers toward specific choices.
b. Loss Aversion:
• Fear of Missing Out (FOMO): Limited-time discounts and sales trigger loss aversion,
where consumers fear missing out on a good deal. This fear compels them to make a
purchase to avoid the perceived loss of the discount.
Product Placement and Promotion: Impact of Media Placement and Promotional Events
on Consumer Behavior
a. Subtle Influence:
40
• In-Context Exposure: Products placed seamlessly within movies, TV shows, or video
games subtly influence viewers without the intrusion of traditional ads. Consumers may
form positive associations with products seen in their favorite entertainment content.
• Familiarity and Trust: Familiarity breeds trust. When consumers see products used by
characters they admire, trust in the brand or product can increase, leading to a higher
likelihood of purchase.
• Memory Retention: Viewers often remember products integrated into their favorite
shows or movies. This retention boosts brand recall, making consumers more likely to
consider these products during their purchasing decisions.
• Emotional Connection: Emotional scenes in media can enhance the impact of product
placement. When a product is associated with powerful emotions, consumers form
stronger emotional connections, which can lead to brand loyalty.
2. Promotional Events:
a. Interactive Experience:
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• Brand Immersion: Events can create immersive brand experiences, leaving a lasting
impression. Interacting with the brand in a positive, memorable environment can shape
consumer attitudes and preferences.
• Social Media Impact: Events provide visually appealing content for social media
sharing. Photos and videos from events can go viral, increasing brand visibility and
attracting new customers.
• Cause-Related Events: Associating with charitable or social causes during events can
enhance a brand’s image. Consumers appreciate brands that contribute to social good,
which positively influences their perception and purchase decisions.
• Community Building: Events foster a sense of community among attendees who share
interests or values. Being part of a community strengthens consumer loyalty, making
attendees more likely to choose the brand in the future.
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b. Influence on Purchase Intent:
• Decision Facilitation: Exposure through media placement and events facilitates the
decision-making process. When consumers encounter a product both in media and in
real-life situations, it strengthens their confidence in the purchase, increasing the
likelihood of conversion.
• Informed Choices: Consumers exposed to products through multiple channels are more
informed about their choices. They may perceive the product as popular or in demand,
leading them to consider it favorably when making buying decisions.
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CHAPTER – 2
LITERATURE REVIEW
The COVID-19 outbreak has abruptly disrupted the global political and economic order
(Fernandes, 2020), significantly impacting consumer services sectors such as retailing,
hospitality, and tourism (Pantano et al., 2020). The pandemic has resulted in unprecedentedly
large-scale lockdowns across the world (Kuckertz et al., 2020), severely restricting people’s
daily activities. As a result, more consumer services companies are experimenting with new
technologies and platforms to meet the changing consumer demands, leading to new
consumption patterns. To cope with the restrictions, some consumer services companies have
developed alternative business models, such as “contactless delivery” and “social cinema.”
The government’s strict restriction on population movement has led to seismic shifts in people’s
livelihoods and daily lives. More people are suffering from depression and loneliness, and some
have resorted to alcohol, drugs, or even self-harm for relief (Alsukah et al., 2020). These
unhealthy emotions and behaviors have caused quite shifts in individuals’ consumption
psychology: people in a dire circumstance may develop a “nothing to lose” mentality and
become more prone to risk-taking, resulting in more impulse purchases (Hill et al., 1997; Harris
et al., 2002); they might also develop post-traumatic stress disorder (PTSD) and future anxiety,
resulting in fewer purchases to increase savings (Nolen-Hoeksema and Morrow, 1991; Kılıç
and Ulusoy, 2003; Kun et al., 2013). During the COVID-19 pandemic, consumer psychology
and purchase behavior have fundamentally changed.
Purchase behavior is a special and specific behavior that directly reflects people’s needs,
desires, and pursuit of material and spiritual interests (Braithwaite and Scott, 1990). Factors
44
that affect changes in purchase behavior include social factors, cultural factors, demographic
factors, and situational factors (Cici and Bilginer Özsaatcı, 2021). Therefore, the COVID-19
pandemic as a social factor is also affecting different changes in purchase behavior. Scholars
generally believe that many consumers showed panic buying behavior or impulsive buying
behavior in the early stage of the COVID-19 pandemic (Aljanabi, 2021; Stuart et al., 2021),
and even accompanied by compulsive buying behavior (Samet and Gözde, 2021). While
purchase behavior in the middle of the COVID-19 pandemic is characterized by mobility (Gao
et al., 2020; Zhang et al., 2020; Lu et al., 2021). The application of digital technology has
created favorable conditions for consumers to participate in online shopping, and consumers’
online purchase activities have increased significantly (Jiang and Nikolaos, 2021). However,
the changes in purchase behavior in the above literature focus on changes in a single dimension,
and do not systematically sort out the changes in consumer purchase behavior under the
COVID-19 pandemic. Therefore, according to the basic theory of marketing, this study
systematically sorts out the multiple dimensions of changes in consumer purchase behavior
under the COVID-19 pandemic and improves the items of the purchase behavior changes in
each dimension, so as to provide supplements for the theory of consumer behavior.
Countries around the world have adopted special measures such as regional blockades in the
process of fighting the epidemic. These measures are a shock to traditional business models
and require corresponding changes to traditional business models. However, there are currently
different perspectives on the impact of purchase behavior on corporate marketing models,
including traditional brick-and-mortar store purchase models, green marketing models, B2B
transaction models, and online marketing models (Buckles and Hudders, 2016; Nguyen et al.,
2016; Sundström et al., 2019; Wei and Ho, 2019). However, there is little literature analyzing
the impact of purchase behavior on firms’ business models from the perspective of crisis events.
Besides, there are many external factors affecting business model design, such as technological
change (Øiestad and Bugge, 2014), contextual factors (Zott and Amit, 2013; Ghezzi et al.,
2015), local market opportunities (Sinkovics et al., 2014), and third-party partnerships in the
customer value proposition development (Velu, 2015). Among the above-mentioned external
factors affecting business model innovation, less research is based on the impact of residents’
behavior. Therefore, it is particularly important to study the impact of changes in consumer
purchase behavior on business model design in the context of the COVID-19 pandemic.
45
To answer these questions, this paper examines consumers’ psychological changes over the
course of the COVID-19 pandemic based on the theory of environmental psychology, affective
psychology, and consumer psychology. The stimulus-organism- response (S-O-R) model
(Mehrabian and Russell, 1974) is used to explain how the pandemic triggered people’s
psychological alteration, which in turn sparked changes in their purchase behavior. Then, we
conduct a representative survey of 1742 individuals to explore the impact of customer purchase
behavior changes on the business model design of consumer services companies using the
expectation confirmation theoretical model (Oliver, 1980). The remainder of this article is
structured as follows: Section 2 is devoted to conceptual basis and research assumptions;
Section 3 presents the research design; Section 4 is the empirical analysis; Section 5 concludes
the paper.
46
behavior. By increasing their buying behaviors, they can relieve their inner anxiety and tension
(Samet and Gözde, 2021). Besides, online purchasing behaviors have become increasingly
popular with consumers after the COVID-19 outbreak. In the face of the government’s home
isolation measures, it has become more and more common for consumers to use online
shopping for food and other items. People who are aware of the risks of going out are more
willing to buy fresh food online (Lu et al., 2021). Consumer purchase behavior is no longer
limited by time and space, and consumers use mobile tools such as mobile phones to achieve
shopping freedom (Zhang et al., 2020). Among the above-mentioned studies have carried out
detailed research on a certain characteristic of changes in consumer purchase behavior but have
not systematically sorted out changes of the psychological characteristics and behavioral
characteristics of consumers. Changes in consumer purchase behavior are reflected in many
aspects, not just a single dimension of change.
In terms of purchase object, the outbreak of the epidemic has made consumers put forward
higher requirements for products or services. When consumers face an emergency, they choose
problem-solving products or services over emotional healing products or services (Yeung and
Fung, 2007; Cai et al., 2020). Utilitarian products, as opposed to hedonic items, are more
effective in addressing consumers’ immediate needs (Yang et al., 2020). Consumers caught in
the pandemic would increase their purchases of utilitarian products such as disinfectants,
masks, and health foods. On the other hand, when people are under pressure or are anxious
about external threats, instead of directly addressing the issues, they often activate a
psychological defense mechanism—the cognitive and behavioral tendencies that individuals
47
unconsciously adopt in the face of frustration or conflict in order to relieve tension and anxiety
(Cramer, 1991)—to protect themselves (Baumeister et al., 1998). The COVID-19 pandemic
has triggered people’s psychological defense mechanism, leading to more cautious buying.
Consumers are not only more price-sensitive, but they also demand higher-quality and more
reliable products. In terms of purchase objects, consumers pay more attention to the quality of
the objects they buy. The increase in online purchasing activities has also made consumers
more willing to disclose their personal information (Gao et al., 2020).
In terms of purchase motive, previous scholars can divide purchase motivation into hedonic
motivation, social motivation and utilitarian motivation (Voss et al., 2003). This framework,
which shapes consumer motivation for product categories, has been widely used in the field of
consumer behavior. In recent years, the application of new technologies has become more and
more extensive. Therefore, new media is used by more and more people and brings more fun
to consumers. Driven by hedonic motivation, consumers are more keen on new media shopping
methods such as Douyin and Kuaishou (Koch et al., 2020). The contribution of social
responsibility can improve consumers’ willingness to purchase in advance (Tong et al., 2021).
During the COVID-19 pandemic, many Chinese companies have donated financial and
material resources during the pandemic, which helped build positive customer perceptions and
attitudes toward their products (Yin et al., 2019). Therefore, driven by social motivation,
consumers are more willing to choose brands that have contributed to society. In addition,
consumers’ herd mentality makes them more utilitarian in the process of purchasing goods, and
thus more willing to choose products with higher evaluation (Samet and Gözde, 2021). Driven
by the above motivation, consumers choose more and more brands of goods.
In terms of purchase place, the government’s home isolation measures have made consumers’
offline shopping channels difficult, and their online purchases have become more and more
common (Zhang et al., 2020; Lu et al., 2021). Specifically, consumers have gradually
developed the habit of purchasing some daily necessities online. At the same time, the rapid
development of social media has brought more shopping convenience to consumers. As a
result, when consumers shop on social platforms such as WeChat (Larios-Gómez et al., 2021),
they are able to pick their favorite products more quickly (Ali et al., 2021). As the number of
consumers on social platforms increases, the number of consumers in offline venues decreases
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accordingly. Although consumers’ offline purchasing activities have decreased, consumers
have become more demanding of offline shopping places. In order to reduce the risk of
infection, when consumers shop offline, they pay more attention to the safety, convenience and
goodwill of shopping places (Butu et al., 2020). As a result, consumers have also changed
significantly in terms of purchase place.
In terms of purchase method, in order to avoid contact with uncertain external services and
reduce the risk of infection, consumers choose contactless delivery methods based on safety
needs (Larios-Gómez et al., 2021). Through the contactless delivery method, consumers can
effectively relieve their inner anxiety and smoothly maintain the order of daily life.
People’s fear and anxiety about the pandemic are unlikely to abate in the near future, and the
resulting changes in consumer demand might eventually damage the supply chain performance
of consumer services companies (Ivanov, 2020). These companies have already been
experiencing significant challenges with their existing business models due to strict social
isolation, delayed return-to-work, and disrupted logistics. The pandemic is putting some major
businesses to the test since consumers may not restore their previous buying habits anytime
soon (Pantano et al., 2020). According to the Expectation Confirmation Theory, consumer
services companies have to adjust their business models to meet new customer expectations in
order to obtain consumer satisfaction.
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Changes in consumer purchase behavior under the COVID-19 pandemic have had an impact
on the design of novelty-centered business models. Novelty-centered business models place
more emphasis on exploiting new opportunities in new ways (Foss and Saebi, 2017), and their
essence is to satisfy new customer value propositions, need or experience through innovations
in the content, structure or governance of the activity system. Although the COVID-19
pandemic has led to a decline in consumers’ purchase power, the requirements for product
quality upgrades will not change. Changes in purchase object drives consumer services
companies to design novelty-centered business models. With the improvement of consumers’
overall consumption level, the enhancement of consumption power and the upgrade of
consumption preferences, their satisfaction with standardized products gradually decreases,
and the trend of pursuing more diversified and personalized products or services will continue.
As consumer preferences increase in diversification, companies must launch new products and
price them appropriately in the face of a fiercely competitive market, especially in the context
of environmental uncertainty exacerbated by the COVID-19 pandemic. Novelty-centered
business models can bring customers better products and experience through innovative
methods on the basis of product technology innovation.
When it comes to purchase motive, consumers prefer products from companies with a reputable
image or a strong sense of social responsibility. Branded products increase consumers’
perceived usefulness (Bhattacherjee, 2001), which is precisely what novelty-centered business
models could accomplish. Therefore, consumers expect companies to design novelty-centered
business models. In terms of purchase method, consumers prefer novel purchase methods and
services such as mobile payment and contactless delivery. This suggests that consumer demand
for novel payment methods has not yet been completely satisfied. People who get exposed to
the same products or services repeatedly will eventually get bored due to the diminishing
marginal utility of overexposure (Line et al., 2016). Bored customers will eventually feel less
satisfied. Thus, consumer services companies should adopt a novelty-centered business model
design in order to re-establish customer satisfaction. Moreover, consumers tend to favor a
shorter purchase timeframe and a safer purchase place, indicating their expectation to reduce
perceived risks (Garaus and Garaus, 2021). To meet that expectation, firms would be better
served by novelty-centered business model design. Therefore, changes in consumer purchase
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behavior have led to the emergence of novelty-centered business models. In summary, the
following assumption is made:
H1a: Changes in purchase object facilitate the design of novelty-centered business models.
H1b: Changes in purchase motive facilitate the design of novelty-centered business models.
H1c: Changes in purchase place facilitate the design of novelty-centered business models.
H1d: Changes in purchase timeframe facilitate the design of novelty-centered business models.
H1e: Changes in purchase method facilitate the design of novelty-centered business models.
Changes in consumer purchase behavior under the COVID-19 pandemic have had an impact
on the design of efficiency-centered business models. Consumer purchase behavior is a process
from information acquisition, formation of purchase intention to purchase decision-making
problem. Consumer purchase intention is an important factor that determines the final purchase
decision. And information is an important factor that affects consumers’ purchasing intention
and ultimately making purchasing decisions. Generally speaking, consumers are risk-averse,
so they will collect a lot of relevant information before purchasing, so as to turn the uncertainty
of purchasing a certain product into certainty. With the rapid development of information
technology, whether the contradiction between the explosive growth of information and the
limited attention of consumers can be resolved has become an inevitable requirement for
enterprises to gain a competitive advantage. The rapid development of information technology
also brings the risk of personal information being infringed on consumers at all times in the
transaction, especially in the field of online consumption, the black industry chain of “stealing”
and “illegal use” of consumers’ personal information shows an explosive growth trend.
Whether companies can keep the personal information of consumers collected in business
activities strictly confidential has become a matter of close concern to consumers. Efficiency-
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centered business models emphasize that enterprises can improve business efficiency by
reducing transaction costs, improving information transparency and sharing, and improving
transaction security. With this, information can be efficiently shared between customers and
enterprises, and the “information island” between the two can be reduced, so that consumers
can trust enterprises and generate purchase intentions.
In terms of purchasing object, people are more rational in choosing what to purchase. This
increases consumer demand for efficiency in the products or services purchased from consumer
services companies. In this case, companies should choose an efficiency-centered business
model design since it emphasizes improving the efficiency of business transactions. Customers
are satisfied, and their expectations are confirmed when they perceive that the efficiency of the
goods or services exceeds the expected efficiency. In addition, with regards to purchase motive,
consumers tend to favor brands that are well rated and contribute to society. Consumers
perceive branded products as allowing them to make the right choice more quickly. Efficiency-
centered business models are consistent with this consumer perception. In terms of purchase
place, people prefer to shop online or on social media platforms, highlighting their expectations
for a safe and convenient shopping environment. Efficiency-centered business models are
essential for firms to meet such customer expectations. As mentioned above, consumers prefer
a shorter purchase timeframe, indicating that consumers’ time efficiency expectations have not
been fully satisfied and the increasing need for consumer services companies to develop
efficiency-centered business models. In terms of purchase method, the fact that consumers have
become more favorable in mobile payment and contactless delivery reflects the growing
consumer demand for efficient payment and delivery methods. Hence, consumer services
companies need to design an efficiency-centered business model to increase customer
satisfaction. Therefore, in addition to novelty-centered business models, the change in
consumer purchase behavior has also created a demand for efficiency-centered business
models. In summary, the following assumption is made:
H2a: Changes in purchase object facilitate the design of efficiency-centered business models.
H2b: Changes in purchase motive facilitate the design of efficiency-centered business models.
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H2c: Changes in purchase place facilitate the design of efficiency-centered business models.
H2e: Changes in purchase method facilitate the design of efficiency-centered business models.
Based on drawing on relevant research and theoretical achievements, this research innovatively
constructs a theoretical research model of consumer purchase behavior on business model
innovation under the background of normalization of the epidemic.
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2.2 The psychology behind online shopping and how it affects consumer behavior
In today’s fast-paced digital age, online shopping has become an integral part of our lives,
revolutionizing how we consume products and services. With just a few clicks, we access an
extensive selection of items, compare prices, and have our purchases conveniently delivered to
our doorstep. However, beneath the surface of this convenience lies a complex interplay of
psychological factors that significantly influence our decision-making processes as we navigate
the vast realm of online shopping. Let’s delve deeper into the intricate web of these
psychological aspects and explore how they shape our choices in the virtual aisles and checkout
counters.
One of the key factors that make online shopping so appealing is convenience. The ability to
shop anytime, anywhere, without the constraints of physical stores has transformed how we
engage with retail. The ease of browsing numerous options and making purchases within
minutes taps into our desire for instant gratification. With online shopping, we no longer need
to travel to physical stores, battle crowds, or adhere to store operating hours. Instead, we can
indulge in retail therapy with just a few taps on our devices. This convenience factor alone has
significantly contributed to the rise and widespread adoption of online shopping.
Another crucial psychological aspect that plays a significant role in online consumer behaviour
is the abundance of choices. Some e-commerce platforms offer a seemingly endless selection
of products catering to every taste and preference. The virtual marketplace eliminates the
physical limitations of traditional brick-and-mortar stores, allowing for a broader range of
products to be showcased and made available to consumers. However, this abundance of
choices can also lead to decision paralysis. In this phenomenon, consumers find it challenging
to decide due to the fear of making the wrong choice. When faced with countless options,
consumers may feel overwhelmed, uncertain, and hesitant to commit to a purchase. This is
where the importance of effective filters, personalized recommendations, and a streamlined
user experience comes into play. By helping consumers navigate the vast online marketplace,
these features can alleviate decision paralysis and enhance the shopping experience.
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The rise of social media and its influence on our lives has transformed how we discover and
engage with products. The power of social proof, where the actions and opinions of others
influence individuals, cannot be underestimated in the context of online shopping. Positive
reviews, ratings, and testimonials from fellow consumers act as social cues that validate the
quality and desirability of a product. The ability to read and rely on the experiences of others
helps build consumer trust and confidence in online shopping. E-commerce platforms that
effectively leverage social proof can harness this psychological factor to instill trust in
consumers, ultimately influencing their purchasing decisions.
Personalization has emerged as a significant trend in the realm of online shopping. E-commerce
platforms utilize data-driven insights to tailor the shopping experience to everyone’s
preferences and needs. Online retailers can present personalized product recommendations and
targeted advertisements by analyzing past purchasing behaviour, browsing history, and
demographic information. This customization fits our desire for relevance and individuality,
making us feel understood and catered to as consumers. When consumers feel that their needs
are accurately understood and met by an online platform.
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2.3 How AI Will Help Marketers Harness Psychology to Drive Consumer
Purchase Decisions:
Cognitive biases are consistent patterns of deviation from logical reasoning. While we may
aspire to make decisions based on objective analysis and unbiased judgment, the reality is that
our choices are often influenced by unconscious biases.
These cognitive biases shape and impact consumer behavior, and whether marketers realize it
or not, they are likely already leveraging the principles of cognitive bias psychology as a
marketing tool. Now that forward-thinking marketers are experimenting with generative
artificial intelligence (AI) tools and applications, such as machine learning, it’s a great time to
explore how AI could be used to leverage cognitive bias psychology.
Members of our agency team have been experimenting with the use of AI and machine learning
for professional applications and have found their capabilities remarkable. We’re excited about
the possibilities as the future of advertising evolves before our eyes. While our current AI usage
has primarily focused on programming and copywriting, we’re seeing more use cases,
including data analysis, image enhancements and creative inspiration, all of which we’re
excited to experiment with. Our trial usage of AI has also made us more acutely aware of the
technology’s powerful potential when combined with existing marketing techniques, such as
the use of cognitive biases.
The marriage of cognitive bias-based marketing techniques and AI has the potential to
revolutionize marketing. The integration of AI can empower marketers and advertisers to
further elevate the utilization of cognitive biases, creating new possibilities for driving
impactful and targeted marketing campaigns. The synergy between cognitive bias and AI may
have the power to unlock unprecedented levels of customer engagement in the ever-evolving
landscape of marketing.
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Here is a closer look at several cognitive biases currently used in marketing and potential ways
marketers can leverage AI to harness the power of these cognitive biases to drive better sales
outcomes.
Scarcity Effect: Marketers commonly use scarcity effect-based tactics with phrases like “Act
now—supplies are limited!” on the understanding that people tend to assign higher value to
items that are scarce compared to those that are available in abundance. Marketers can use
generative AI to create time-limited offers or a strategy for limited-edition products to drive
higher sales.
Cheerleader Effect: Also known as the bandwagon effect, this cognitive bias creates a sense
of confidence in consumers when they see others endorsing a product. AI can help marketers
conduct research to identify influencers who would maximize this effect with target groups. It
can also analyze data to create more personalized ads that are more likely to resonate with
individual consumers.
Empathy Gap: People like to think they make rational choices, but the reality is that emotions
often drive consumer behavior. The empathy gap is the tendency to underestimate the role
emotions play. This is why successful ad campaigns often use both cognitive and emotional
appeals to establish a connection with consumers and drive sales.
Marketers can effectively tap into this bias and influence consumer decision-making, with AI
allowing for more responsible and responsive advertising. AI tools such as Google’s Deep
Dream program generate dream-like images, which can help designers create unique designs
that appeal to consumers’ emotions.
Humor Effect: People find it easier to remember and recall humorous events, which has led
marketers to incorporate humor into their campaigns. In the insurance industry, ads featuring
popular recurring characters like Mayhem, Flo, and Emu and Doug have successfully used
humor to engage audiences and leave a lasting impression. Although AI doesn’t have a sense
of humor, marketers can use AI to help generate ideas and identify themes that are relatable
and grounded, allowing consumers to connect with the message on a personal level.
Loss Aversion: Human beings tend to perceive losses as more significant than gains, so
marketers, particularly in the home improvement service industry, often employ a strategy that
emphasizes the potential negative consequences of not taking action. AI can help identify what
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sense of loss a consumer will feel if they do not purchase the product so marketers can utilize
that emotion in ads.
Distinction Bias: When individuals compare two similar products side by side, the differences
between them become more pronounced than when they are evaluated individually. By using
AI to identify differences and emphasize them, marketers can effectively communicate the
distinct advantages of their offerings and influence consumer perceptions and purchasing
decisions.
Generative AI is becoming a powerful tool for marketers who are developing strategies,
implementing campaigns, and designing ads. The integration of AI with cognitive biases can
help marketers analyze creative content and optimize marketing performance, ultimately
driving increased sales.
That said, it’s important to note that as marketers, it’s critical to commit to using AI ethically
and transparently. It can be used to create more inclusive experiences, but humans must remain
in the mix to fact-check claims and ensure that ads aren’t deceptive.
By gaining a deeper understanding of these cognitive biases and AI’s potential to leverage
them, marketers can lay the groundwork to further enhance marketing strategies and achieve
measurable and impactful results. This is a time of radical change in advertising, as a new
frontier is being blazed. AI will further empower the harnessing of cognitive biases to
effectively elicit stronger and more compelling responses from the target audience. We are on
the cusp of the most rapid advertising advancements yet to be seen.
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2.4 The New Normal: How Indian consumers have changed post-pandemic
The COVID-19 pandemic turned the world upside down, and India is no exception. Even
though the pandemic seems to be a distant memory now, it is fascinating to witness how
consumer behavior has transformed post-COVID. From shopping habits to lifestyle choices,
Indians are embracing new trends and adapting to the "new normal" in remarkable ways.
Embracing the virtual realm in the wake of the pandemic, India experienced a digital revolution
like never before. E-commerce became a lifeline for consumers as they turned to online
platforms for everything from groceries to fashion. Mobile payment apps gained popularity,
allowing for convenient and contactless transactions. From virtual shopping carts to doorstep
deliveries, the digital landscape has forever altered the way we shop and interact.
Safety First
COVID-19 brought health and hygiene to the forefront of everyone's minds. Indians became
more conscious of their well-being, demanding products that promote personal hygiene,
sanitization, and immunity. Hand sanitizers, face masks, and vitamin supplements flew off
the shelves as consumers prioritized their health and safety. The phrase 'safety first' became a
mantra as individuals seek out businesses that go the extra mile to ensure cleanliness and
adherence to health protocols. A survey by One Green, one of Asia’s largest e-commerce
marketplaces for sustainable products, indicates a shift towards health-conscious and
environmentally friendly buying. Eight out of 10 Indians have changed their buying behavior
to prioritize their health and well-being, while six out of 10 respondents consider the
environmental impact when making purchase decisions. The data suggests that "green"
choices are gaining popularity, reflecting a conscious shift towards more sustainable and
mindful consumption in India.
Online
The traditional office setup took a backseat as remote work became the norm. Indians quickly
adapted to home-based services, embracing virtual meetings, online education, and
telemedicine. The home office has transformed into a hub of productivity, with people
seeking out flexible and convenient solutions that fit seamlessly into their lives. Online
learning platforms, telehealth consultations, and fitness apps gained popularity, empowering
individuals to thrive within the comfort of their own homes.
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them to reevaluate their consumption patterns. Sustainability and ethical practices took center
stage as people became more aware of the environmental impact of their choices. From eco-
friendly products to brands that prioritize social responsibility, Indians now seek out options
that align with their values. By supporting businesses that make a positive impact, consumers
are shaping a more sustainable future.
According to Accenture's 16th annual research report, which surveyed over 25,000
consumers across 22 countries, 71 per cent of respondents changed their behaviors and values
due to the pandemic. They have reevaluated what matters most in their lives and the
environment. As a result, their buying decisions, including what they purchase, how they
shop, and why they buy, have been directly impacted.
Navigating the New Consumer Landscape: The COVID-19 pandemic has reshaped consumer
behavior in India and all around the world. Driving a wave of digital transformation, health
consciousness, remote work adaptation, conscious consumption, local support, and cost
consciousness. As businesses and marketers, it's crucial to understand and adapt to these
evolving consumer behaviors to forge a resilient and consumer-centric future.
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CHAPTER-3
RESEARH METHODOLOGY
3.1 METHODOLOGY
The research is based upon both primary and secondary data both. The primary data was
collected through a questionnaire designed exclusively for the study. Secondary data was taken
from Research papers, journals, magazines, and websites.
Primary data are those which are collected for the first time and are original. A suitable
combination of Questionnaires and interview techniques is used to collect the required primary
data. By using a questionnaire, data has been collected from 100 sample respondents through
a survey method.
The secondary data are those which are already collected by someone for some purpose and
are available for the present study. Secondary data was collected from magazines, websites,
and other such sources.
The collected data has been analyzed and interpreted by using different statistical tools such as
percentages, pie charts, bar charts, etc.
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3.4 STRUCTURE OF QUESTINNAIRE
The questionnaire has been framed and circulated to collect primary data. The questionnaire
contains
Direct Questions
Samples were collected from consumers and buyers of online shopping through questionnaire.
The sampling size is 100, the sampling technique used for the study is Convenient Sampling
Sampling technique is the technique used to select the sample size. Convenient sampling
technique is used for this research. Customers were taken according to the convenience of the
research study. The respondents from questionnaire (survey method).
generalized.
The data was collected through structured questionnaire and analyzed based
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Chapter – 4
DATA INTERPRETATION: Agreeing to the review led 87% of the respondents to have a
place with the age bunch 21-30. The purpose for this is that the survey was shipped off greater
part of undergrads who have a place with this age bunch and further the most were 31-40 &
above 40 Years individually.
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DATA INTEPRETATION: Agreeing to the overview led 60.9% of the respondents are
female, 39% are male.
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DATA INTERPRETATION: Agreeing to the overview led 46% are graduates, 22.8% are
perusing undergraduate courses, 26.1% are HSC and others.
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DATA INTERPRETATION: Agreeing to the overview led 82.6% are single, 10.9% are
married and others.
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DATA INTERPRETATION: Agreeing to the overview led 53.3% are preferred
traditional shopping, 46.7% are preferred online shopping.
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DATA INTERPRETATION: Agreeing with the overview 78.3% mostly prefer
traditional shopping, and 21.7% prefer online shopping to save time.
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DATA INTERPRETATION: Agreeing with the overview 76.1% of consumers enjoy
shopping online while other 23.9% of consumers had bad experiences on
online websites.
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DATA INTERPRETATION: Agreeing with the overview 51.1% of consumers like
to make payments through UPI, 41.3% of consumers use cash on delivery
payment method due to fraud activities and 7.6% of consumers use plastic
money while making product purchasing decisions.
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DATA INTERPRETATION: Agreeing with the overview 80.4% of consumers prefer
quality over quantity in order to get worth for their money, 18.5% of
consumers make purchase decisions according to the price of the product and
the rest prefer quantity.
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DATA INTERPRETATION: Agreeing with the overview 60.9% of consumers make
purchase decisions on the basis of the reputation of the company in the
market, while 34.8% of consumers don’t consider the reputation of the
company.
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DATA INTERPRETATION: Agreeing with the overview 53.3% of consumers make
purchase decisions on the basis of need for the product, while 31.5% of
consumers make purchases according to the price of the product and 15.2%
prefer buying products that are trending in the market.
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DATA INTERPRETATION: Agreeing with the overview 65.2% of consumers are
neutral while making purchase decisions based on recommendations from
others, 25% of consumers buy products very often on recommendations,
furthermore 9.8% of consumers buy trending items.
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DATA INTERPRETATION: Agreeing with the overview 56.5% of consumers
strongly agree that product manufacturers should make the consumer
satisfaction top priority, while, 14.1% are neutral with the above statement.
Moreover, 28.3% consumers agree with the same. Ultimately almost all the
respondents agree with that manufacturers should consider the consumer
satisfaction as a top priority.
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Chapter – 5
Conclusion
In delving into the intricate realm of consumer behavior, this study has unraveled a tapestry of
insights that businesses can ill afford to ignore. Through a meticulous analysis of purchase
patterns and decision-making processes, several key findings have emerged. We have discerned
the nuanced interplay of cultural, social, personal, and psychological factors shaping
consumers' choices. Additionally, the impact of online versus offline shopping, impulse versus
planned purchases, and the dynamics of brand loyalty have been scrutinized, shedding light on
the complexity of consumer decisions.
Looking ahead, the future of consumer behavior analysis is poised on the precipice of
innovation. The integration of big data and predictive analytics promises unparalleled insights,
enabling businesses to anticipate trends and consumer preferences with unprecedented
accuracy.
One common question that eCommerce brands will ask is how consumers factor price into their
buying decisions. When consumers are evaluating a product, price is of course a huge factor.
But it’s not just about the product price — it’s about the entire cost of the purchase.
Let’s say your cameras are good value for the money, competitively priced, and have decent
reviews. What happens when your customers get to checkout, and see that you have a high
shipping cost?
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Instead of completing the purchase, they are going to see what the shipping cost is on the other
cameras they were considering. And what if one of them offers free shipping? You may lose
that customer. So how does a consumer know whether a purchase may be a good deal?
You don’t want shoppers to be surprised by any additional costs when they get to checkout.
Make sure to calculate taxes and shipping costs before they get to the final step. The more
transparent you can be about your pricing up front, the more likely you’ll be to complete the
sale.
If you want to turn a potential customer into a loyal brand advocate, it’s important to build trust
and keep them engaged at every step of the process. User-generated content is a powerful tool
for building brand awareness, highlighting the best things about your products, and ultimately,
growing your bottom line.
Moreover, ethical considerations will loom large, necessitating a delicate balance between data-
driven decision-making and consumer privacy. As globalization continues its inexorable
march, understanding cross-cultural behaviors will be pivotal for companies aiming to expand
their global footprint.
In this ever-evolving market landscape, the implications for businesses are profound. Those
that invest in ongoing research and adopt a proactive stance towards understanding consumer
behavior will wield a distinct competitive advantage. By embracing the insights gleaned from
this analysis, businesses can not only thrive but also foster meaningful, lasting relationships
with their customers, transforming mere transactions into enduring partnerships.
In essence, the study of consumer behavior is not a static endeavor but a dynamic process that
mirrors the evolving tapestry of society. Businesses that recognize this dynamism and respond
with agility and empathy are poised not only to survive but to flourish in the complex,
fascinating world of consumer preferences and choices.
Consumer behavior analysis is not a one-time effort but an ongoing process that demands
continuous attention, analysis, and adaptation. By implementing these recommendations,
businesses can gain a deep understanding of purchase patterns and decision-making processes.
Armed with this knowledge, they can craft strategies that resonate with consumers, drive sales,
and foster enduring relationships. In a market shaped by ever-evolving consumer preferences,
businesses that invest in understanding their customers are poised not just to survive, but to
thrive and lead the way into a successful and sustainable future.
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The rise of e-commerce has reshaped the retail landscape, offering unparalleled convenience
and variety. Traditional retail, on the other hand, continues to thrive by focusing on unique in-
person experiences and human interaction. The coexistence of these two shopping methods
highlights the diverse preferences of consumers in the modern world.
Impulse buying and planned purchases represent two contrasting approaches to consumer
behavior, each influenced by distinct psychological triggers. Understanding these triggers can
empower individuals to make conscious choices, balancing the excitement of spontaneous
purchases with the practicality of planned acquisitions, leading to more mindful and satisfying
shopping experiences.
Customer loyalty programs play a pivotal role in cultivating brand loyalty and encouraging
repeat purchases. By fostering emotional connections, providing incentives, enhancing
customer retention, promoting word-of-mouth marketing, enabling personalization, and
offering a competitive edge, these programs create a win-win situation for both businesses and
consumers, ensuring long-term relationships and consistent revenue streams.
Seasonal changes and cultural events have a profound impact on consumer spending behavior.
Retailers strategically align their marketing efforts and product offerings with these influences,
leveraging the emotional and social aspects associated with holidays and cultural celebrations
to drive sales. Understanding these patterns is essential for businesses to effectively connect
with consumers and optimize their offerings during specific times of the year.
E-marketing strategies have transformed the marketing landscape, providing businesses with
powerful tools to connect with their audience, enhance brand visibility, drive sales, and foster
long-term relationships. By leveraging the digital landscape effectively, businesses can adapt
to changing consumer behaviors, staying competitive and relevant in the fast-paced online
world.
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Discounts, sales, and psychological pricing leverage various psychological and behavioral
principles to influence consumer choices. By understanding these effects, businesses can
design pricing strategies that not only attract customers but also create a positive perception of
value, leading to increased sales and customer loyalty.
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Recommendations
Consumer behavior analysis, a multifaceted discipline, offers invaluable insights into the
intricacies of purchase patterns and decision-making processes. Understanding these nuances
is pivotal for businesses striving to succeed in today’s dynamic market landscape. In this
comprehensive guide, we explore a range of recommendations derived from consumer
behavior analysis, providing businesses with actionable insights to tailor their strategies,
enhance customer experiences, and foster long-term relationships with their clientele.
To truly comprehend purchase patterns and decision-making processes, businesses must invest
in robust consumer research. This involves employing a variety of methods such as surveys,
focus groups, and in-depth interviews. Utilize advanced analytics tools to mine data from
online platforms, social media, and customer interactions. By understanding the data,
businesses can identify trends, preferences, and pain points, enabling them to make informed
decisions.
In the digital age, the sheer volume of data available is staggering. Embracing big data analytics
and predictive modeling allows businesses to forecast consumer behavior accurately. By
analyzing past purchasing patterns and correlating them with demographic and psychographic
data, businesses can anticipate future trends. Predictive analytics enable personalized
marketing, targeted promotions, and inventory management tailored to customer demands.
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4. Leverage social media Listening and Sentiment Analysis:
Social media platforms are treasure troves of customer opinions and sentiments. Employ social
media listening tools to monitor conversations about your brand and products. Analyze
sentiment to gauge customer satisfaction and identify areas for improvement. Engaging with
customers on social media not only provides real-time feedback but also enhances brand
perception and fosters a sense of community.
Consumer decisions are often driven by emotions. Businesses that evoke positive emotions
through their products, marketing, and customer interactions create lasting impressions.
Emotional connections foster brand loyalty and drive repeat purchases. Utilize storytelling in
marketing campaigns to create narratives that customers can relate to emotionally. Empathy,
authenticity, and relatability are key in building these connections.
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Positive experiences not only drive immediate sales but also lead to positive word-of-mouth
and repeat business.
Consumers engage with businesses through multiple channels, both online and offline.
Embrace an omni-channel approach that integrates online platforms, social media, mobile apps,
and physical stores. Provide consistent brand experience across all channels. Omni-channel
marketing ensures that customers can seamlessly transition between online research and in-
store purchases, creating a cohesive and convenient shopping journey.
Encourage customers to provide feedback on products and services. Actively seek opinions
through surveys, reviews, and social media interactions. Analyze this feedback meticulously to
identify areas of improvement. Engaging with customers not only makes them feel valued but
also provides invaluable insights into their preferences. Businesses can use feedback to refine
products, enhance services, and tailor marketing campaigns to customer expectations.
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Annexure
1. Age
• 21-30 Years
• 30-40 Years
• Above 40
2. Gender
• Male
• Female
3. Educational Qualification
• School
• Hsc
• Graduate
• Postgraduate
• Job
4. Martial Status
• Single
• Married
• Divorce
• Relationship
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8. As India is Growing Digitally Which Payment mode do you prefer ?
• Card
• Cash on Delivery (COD)
• UPI
10. Do you consider the reputation of the company in the market while purchasing a Product?
• Yes
• No
• Maybe
13. on Scale of 1 to 10 how much would you rate your purchasing decisions made in daily
life. ( 1 being the least and 10 being the highest )
• 1 to 10
14. How much do you agree or disagree that consumer satisfaction should be the top priority
for the manufacturing Companies ?
• Agree
• Disagree
• Neutral
• Strongly Disagree
• Disagree
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Bibliography
https://www.forbes.com/sites/forbesagencycouncil/2023/09/15/how-ai-will-help-marketers-
harness-psychology-to-drive-consumer-purchase-decisions/?sh=470f40e01cdd
https://economictimes.indiatimes.com/news/how-to/the-new-normal-how-indian-consumers-
have-changed-post-pandemic/articleshow/102044620.cms?from=mdr
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