Buyer Behavior in Consumer Electronics Market Project Report

1. A
DISSERTATION REPORT
ON
“Buyer Behavior in Consumer Electronics Market”
Report by
Subhojit Dey
Submitted to the Department of Management Studies
In Partial fulfillment Of the Requirements
For the 2-Year full-time PGDM course
In Partial Fulfillment of the Requirement for the 2-year Full-Time
PGDM Course
PRESIDENCY INTERNATIONAL INSTITUTE OF MANAGEMENT
VIDHYADER NAGAR, JAIPUR
ROLL NO.1029 BATCH YEAR 2009-11 SPECIALIZATION:MARKETING, FINANCE

2. Certificate of Originality
Subhojit Dey D/o Sh.Prasanta Kumar Dey, having roll no- 1029 of Batch 2009-2011, do hereby
certify and declare that this research report titled Buyer Behavior In Consumer Electronics
Market is the result of my own work. This report contains no materials or information which has
been previously submitted for any other academic diploma or degree, except where indicated
otherwise.
Date: Signature of the Student
SUBHOJIT DEY

3. Approval page
This report, entitled Buyer Behavior in Consumer Electronics Prepared and submitted by
SUBHOJIT DEY, in partial fulfillment of the requirements for the degree of PGDM is hereby
accepted.
GAURAV VARSHNEY
(Faculty Guide)
Accepted as partial fulfillment of the requirements for the second year full-time PGDM
COURSE.

4. ACKNOWLEDGEMENT
The moment of acknowledgement is one of the prides that gives up a feeling of cherish about”. I
take this opportunity to express our sincere gratitude to all, contributed to making this work possible
within very limited time.
I am also thankful to all mine faculty specially MR KAMLESH KUMAR JANGID under her
guidance which has really a source of inspiration and supporting to accomplish my project fairly
and effectively.
I am greatly thankful to my colleagues, friends and parents for their regardless help and appreciation
in my each and every moment of internship.
I am very thankful to God who blessed me with energy, potential and will power to complete the
internship and also the project with best of my worth.
SUBHOJIT DEY
PGDM 4th SEMESTER

5. TABLE OF CONTENTS
1. Industry Introduction
2. Consumer electronics industry analysis
3. Consumer Buying Behavior
4. Existing Players in the Indian market
5. Research Methodology
6. Key findings
7. Some statistics
8. Challenges to the electronics industry
9. Limitation of the project.
Bibliography

6. 1).Introduction-
1.1 Worldwide consumer electronics market
The consumer electronics industry has witnessed a unique growth over the past few years. This
growth can be attributed to the increasing effect of state of the art electronic devices on the market.
The consumer electronics industry is ushering in the dawn of Convergence. It is the confluence and
merging of hitherto separated markets of digital based audio, video and information technology,
removing entry barriers across the market and industry boundaries. This convergence of
technologies has resulted in a greater demand for consumer devices, be they portable, in-home
(mobile phones, digital camera) or in-car (CD/DVD players), offering multiple functions.
The revolution brought about by Digital technology has enabled the consumer electronics sector to
profit from the growing interaction of digital applications such as: camcorders, DVD
player/recorder, still camera, computer monitor, LCD TV etc. It has also witnessed the emergence
of mobile telecommunications technology, incorporating both digital visual and digital MP3
capabilities. The computer industry has also benefited by being able to make its way into
consumer's living rooms. HDTV's with VGA connections and SD/MMC card slots, personal media
players, and Microsoft-based Media Center PCs have pushed the two industries even closer together
than before.
The India Consumer Electronics Report provides industry professionals and strategists, corporate
analysts, electronics associations, government departments and regulatory bodies with independent
forecasts and competitive intelligence on India's consumer electronics industry.
India‟s consumer electronics devices market, defined as the addressable market for computing
devices, mobile handsets and AV products, is projected at about US$29.4bn in 2011. This is
expected to increase to US$50.6bn by 2015, driven by rising incomes and growing affordability.
Only nine out of 1,000 people in India own a computer, one-fifth of the level in China, while Indian
handset population penetration is about 57%.
Spending on consumer electronics devices is projected to grow at an overall CAGR (compounded
annual growth rate) of 14% through 2015, with the key segments including low-cost mobile
handsets, colour TVs, set-top boxes and notebook computers. In 2010 demand for LED TV sets
grew strongly, and touchscreen phones were another growth area.
Consumer electronics manufacturers, after suffering a rare dip in sales last year, are hoping to
bounce back in 2010 with smartphones, e-readers and smaller laptops leading the way.

7. 1.2 Consumer expenditure on durable goods
Consumer durables are items that provide a flow of services to a consumer over a
period of time. Examples include new cars, household appliances, audio-visual
equipment, furniture etc. The real level of spending on durables has surged in the last eight years.
1.3 Segment Definition
In general consumer electronics refers to a variety of electronic equipment used by private
customers. This industry can be divided into many segments:
1. „Traditional‟ Consumer Electronics: audio and video equipment

8. 2. Computing Devices: Computers, Calculators, Laptops
3. White Goods: Household /Domestic Appliances such as washing machines, irons, vacuum
cleaners, grinders, etc
4. Personal Care: Hair Dryers, shavers, electric toothbrushes.
In addition to this, the emergence of telecommunication has lead to the convergence of mobile
technology into the consumer electronics industry and hence this paper will only deal with
traditional consumer electronics, mobile phones and computing devices which can be termed as
Brown Goods as per industry definitions. Henceforth in this paper consumer electronics will refer to
Brown Goods.
In 2008, the market size was estimated to be $22 billion and growing. With the growing population
in India, exceeding 1 billion, the consumer electronic Industry is all geared up for fast growth in the
coming years. The predicted figure for the consumer electronic market by 2013 is around $46
billion, growing at a compound annual growth rate (CAGR) of 16%. This astounding growth is due
to many factors, the major ones including
Rising disposable incomes coupled with increasing consumer exposure
Increase in manufacturing in the local grounds
Credit/Financing schemes which make purchase easy
Growing competition , leading to better deals
Increased reach due to better distribution networks
1.4. Consumer electronics market in India
India has an increasingly affluent middle class population that, on the back of rapid economic
growth, has made the country‟s consumer electronics industry highly dynamic. The industry has
been witnessing significant growth in recent years due to several factors, such as retail boom,
growing disposable income and availability of easy finance schemes. But still, the consumer
electronics goods, like refrigerators, microwave and washing machines have low penetration in
the country, representing vast room for future growth.
The report finds that since the penetration of several products like TVs and refrigerators are
reaching saturation in the urban areas, the markets for these products are shifting to the semi-
urban and rural areas.
This analytical research evaluates the Indian consumer electronics industry. It briefly discusses
about the current and emerging trends in the industry, underlining the future potential areas and
key issues crucial for the industry development. It provides an insight into the emerging and
potential future trend in all the categories and highlights the key strategies that need to be worked
upon to get success in the highly competitive industry.

9. The report thoroughly analyzes the historic performance and future
prospects, offering 4-year industry forecast, of following consume electronics products:
- Washing Machines (Semi-automatic & Fully Automatic)
- Television
- Set-top Box
- Refrigerator (Frost-free & Direct Cool)
- Air Conditioner
- Microwave Oven
- MP3 Players
- Digital Camera & Camcorder
- Mobile Handsets
- PCs (Desktop & Notebook)

10. 1.5 Classification of consumer durable Goods
Classification of consumer durable goods
Cameras & camcorders
Computers
Digital camera
Laptops
Movie camera
Desktops
Camera accessories
Monitors Kitchen Appliances
Peripherals Cooking range
Comp Hand blender Telephone & Mobiles
uter Toaster maker Mobile phones
acces
Water purifiers Land line telephones
sories
Vaccum cleaners Fax
Food processor Mobile accessories
&mixer,grinder
Television Water heater
CRT/LCD/Plasma
CD/DVD player
DTH

11. 1.6..SWOT Analysis Of Electronics-
 Strengths
1. Presence of established distribution networks in both urban and rural areas
2. Presence of well-known brands
3. In recent years, organized sector has increased its share in the market vis a vis
the unorganized sector.
 Weaknesses
1. Demand is seasonal and is high during festive season
2. Demand is dependent on good monsoons
3. Poor government spending on infrastructure
4. Low purchasing power of consumers
 Opportunities
1. In India, the penetration level of white goods is lower as compared to other developing countries.
2. Unexploited rural market
3. Rapid urbanization
4. Increase in income levels, i.e. increase in purchasing power of consumers
5. Easy availability of finance
 Threats
1. Higher import duties on raw materials imposed in the Budget 2007-08
2. Cheap imports from Singapore, China and other Asian countries
1.7. Trends in electronic market
Propelled by growing middle class population, changing lifestyle and rapid urbanization, the Indian
consumer electronics industry is forecasted to grow at a rapid rate of 10% to 12% in the coming few
years
Volume sales of washing machine will be driven by growth in fully automatic category during
2008-09 to 2011-12. The market for televisions in India is changing rapidly from the conventional
CRT technology to Flat Panel Display Televisions (FPTV). Currently, the split between CRT and
FPTV is around 97% and 3% respectively, and the share of FPTV is projected to increase at robust
rate in near future.
Frost-free refrigerator sales, certainly growing at a much faster pace than the direct-cool category,
are anticipated to drive the Indian refrigerators market over the forecast period
The AC market in India is projected to grow at 30% to 35% for the coming few years. Driven by
young population, demand for MP3 players and digital video appliances are anticipated to surge at
double-digit rate in near future

12. The low penetration level of consumer electronics goods coupled with increasing preference for
comfort and luxurious goods are widely attracting the foreign as well as domestic players to the
industry.
TRENDS IN TERMS OF TECHNOLOGY AND PRODUCTS – INDIA
Lower duties, cheaper technology and strong competition with low entry barriers ensure
competitive prices
Increase in brand and product choice
Value-for-money pricing lead consumers to upgrade – from corded to cord-less phones,
from conventional CRT to flat-screen or plasma/LCD TVs, from 15- to 17-inch computer
monitors, from 1- to 3-megapixel cameras, from monochrome to colour phones, etc
Huge boom in mobile phone purchases with high penetration even in rural markets (launch
of value for money, no frills, reliance phones gave an impetus to rural penetration)

13. 2.) Consumer electronics industry analysis
Porter’s Five Forces Model
Although the Indian Consumer electronics market is highly competitive, the high growth rates that
it promises make it a good industry to enter.
Threat of New
Entrants
Low to Moderate
Bargaining Power Rivalry Amongst Bargaining Power
of Suppliers Existing Firms of Customers
Low Moderate Moderate to High
Threat of
Substitutes
Low
Threat of New Entrants
Capital Requirements and Economies of Scale:
In the case of retail stores, there is lack of good distribution network and lack of
knowledge of consumer buying patterns which calls for large investment in distribution channels
and research to improve the reach. Economies of scale is required in as there are large fixed costs
associated with setting up a manufacturing plant as there are problems of under-developed
infrastructure, erratic supply of water and electricity in many areas, a high cost of capital and
continuous up gradation of technical and managerial skills.
Supply Chain Issues:
The existence of too many intermediaries in the supply chain coupled with issues in
logistics, management of POS data, pilferage and distribution and inventory management, eats away
the profits of the retailer, making it unattractive for new entrants

14. Product Differentiation:
Though the awareness is increasing amongst the Indian consumers, retailers and
manufacturers are unable to increase brand loyalty. The Indian consumer is very price sensitive and
hence he keeps hoping from one place to another, hunting for good deals. Switching costs vary
amongst the electronic categories. For instance, the switching costs in mobile phones are high, as
consumers who are used to one brand find it difficult to use another brand. However, for televisions,
cameras, and even laptops, consumers are ready to try new brands based on price for features
offered and service quality or reputation of the brand.
Government Policy:
By encouraging manufacturing zones and improving the infrastructure, the government is
developing the entire manufacturing sector, which will help in boosting the electronics production
in India, which has traditionally been a very small slice of the overall manufacturing segment.
While the government is trying to encourage the growth of the retail and manufacturing industries in
India, there are some policies which need to be looked at.
· The duty structure for electronics adds up to 30% which is a significant amount. This is mainly due
to the multiple tax structure which consists of 12% VAT, 8% excise, 4% Goods and Service Tax,
2% Central Sales Tax and Local taxes.
· The FDI policy limits to 51% stake for foreign investors, which forces foreign retailers to use
franchise arrangements, and in the manufacturing sector, the FDI is 100% favouring foreign
investors
· Existence of the grey market due to poor government regulations to keep counterfeits at bay
coupled with the lack of consumer knowledge and legal recourse encourages manufacturers to
churn out spurious products which can lead to lost sales of the tune of 10-15%.
· Red tapes and bribery in the Indian government system is also a stumbling block
for new retailers or manufacturers.
Taking into consideration the positives and negatives, India still offers a good chance for new
entrants and hence the threat is considered to be low to moderate.
Bargaining Power of Buyers
With the emergence of new channels like the internet, auction sites like rediff.com, the general
consumer (buyers) who usually purchase electronic goods from electronic retailers, hypermarts,
music and book stores, can easily compare prices and go for the best deals in town. Though the
better brands can command a higher price, buyers are constantly comparing prices, service quality
and product features and hence commands a moderate to high power in this industry.
Large chain stores like Tata Croma, E-Zone have distinct advantage over the smaller stand alone
stores as they can demand good discounts suppliers. As brands play an important role in the

15. electronics market, the retailers find it difficult to integrate backwards to produce their own
electronic goods as in the case of private food labels. Considering the market dynamics and the size
of the market, the buyers have moderate to high power in the consumer electronics industry
Bargaining power of suppliers
The biggest threat is the trend of large suppliers integrating forward as in the case of Dell, Apple,
Nokia, by setting up their own retail outlets. However, in the Indian electronic context, there are a
large number of suppliers in the market who face overcapacities, poor distribution, large duties, and
declining margins and hence the bargaining power for suppliers is less and competitive pricing
comes into play. With more companies setting up the manufacturing plants in India, like Nokia in
the south, the bargaining power of suppliers is definitely low to medium. Product differentiation is
more and more difficult in the consumer electronics industry and the existence of cheap Chinese
suppliers also adds woes to the suppliers.
Intensity of Rivalry amongst existing players
There are few key players in the consumer electronic market, but as they are part of big Indian
business groups, they have a lot of muscle power and hence the intensity of rivalry can be placed at
a mid level. Though factors such as high transport and storage costs, lack of differentiation, large
investments, and low switching costs tend to intensify the rivalry, the fact that the market is only at
the nascent stage with promises of high growth rates of 16% coupled with the diverse needs of
customer groups, and an untapped rural market; the existing players seem to be enjoying a relatively
low rivalry.
Threat of Substitutes
The threat of substitutes for the manufacturers of these electronic goods is medium to high unlike
the case of white goods. As new technology enters the market at increasing pace, the manufacturers
and retailers need to understand the consumer needs. For instance the VCR was replaced by the
DVD player which will soon be replaced by a Blue Ray Player. The incorporation of camera in the
mobile phones is definitely a threat to the camera market. Hence product innovations in this
segment are very high and players in this industry need to mindful of this.

16. 3) Consumer buying behavior
 WHAT IS BUYER BEHAVIOUR?
The wealth of products and services produced in a country make our economy strong. Almost all
the products, which are available to buyers, have a number of alternative suppliers: substitute
products are available to consumers, who make decision to buy products. Therefore a seller most of
his time, seeks buyers and tries to please them. In order to be successful, a seller is concerned with.
 · Who is the customer?
 · What do consumers buy?
 · When do consumers buy?
 · How do consumers buy?
 · From where do consumers buy?
 · Why do consumers buy?
A buyer makes a purchase of a particular product or a particular brand and this can be termed “
product buying motives” and the reason behind the purchase from a particular seller is “ patronage
motives” When a person gets his pay packet, and if he is educated ,sits down along with his wife
and prepares a family budget, by appropriating the amount to different needs. It may happen that
after a trip to the market, they might have purchased some items, which are not in the budget, and
thus there arises a deviation from the budgeted items and expenditure. all the behaviour of human
beings during the purchase may be termed as “buyer behaviour”.
 HOW CONSUMERS BUY
1. Need/Want/Desire is Recognized
In the first step the consumer has determined that for some reason he/she is not satisfied (i.e.,
consumer‟s perceived actual condition) and wants to improve his/her situation (i.e consumer‟s
perceived desired condition). For instance, internal triggers, such as hunger or thirst, may tell the
consumer that food or drink is needed. External factors can also trigger consumer‟s needs.
Marketers are particularly good at this through advertising, instore displays and even the intentional
use of scent (e.g., perfume counters).

17. 2. Search for Information
Assuming consumers are motivated to satisfy his or her need, they will next undertake a search for
information on possible solutions. The sources used to acquire this information may be as simple as
remembering information from past experience (i.e., memory) or the consumer may expend
considerable effort to locate information from outside sources (e.g., Internet search, talk with others,
etc.). How much effort the consumer directs toward searching depends on such factors as: the
importance of satisfying the need, familiarity with available solutions, and the amount of time
available to search.
3. Evaluate Options
Consumers‟ search efforts may result in a set of options from which a choice can be made. It should
be noted that there may be two levels to this stage. At level one the consumer may create a set of
possible solutions to their needs (i.e., product types) while at level two the consumer may be
evaluating particular products (i.e., brands) within each solution. For example, a consumer who
needs to replace a television has multiple solutions to choose from such as plasma, LCD and CRT
television.
4. Purchase
In many cases the solution chosen by the consumer is the same as the product whose evaluation is
the highest. However, this may change when it is actually time to make the purchase. The
“intended” purchase may be altered at the time of purchase for many reasons such as: the product is
out-of-stock, a competitor offers an incentive at the pointof- purchase (e.g., store salesperson
mentions a competitor‟s offer), the customer lacks the necessary funds (e.g., credit card not
working), or members of the consumer‟s reference group take a negative view of the purchase (e.g.,
friend is critical of purchase).
5. After-Purchase Evaluation
Once the consumer has made the purchase they are faced with an evaluation of the decision. If the
product performs below the consumer‟s expectation then he/she will reevaluate satisfaction with the
decision, which at its extreme may result in the consumer returning the product while in less
extreme situations the consumer will retain the purchased item but may take a negative view of the
product. Such evaluations are more likely to occur in cases of expensive or highly important
purchases. To help ease the concerns consumers have with their purchase evaluation, marketers
need to be receptive and even encourage consumer contact. Customer service centers and follow-up
market research are useful tools in helping to address purchasers‟ concerns.


18.  Why Consumers Buy :
Customers make purchases in order to satisfy needs. Some of these needs are basic and must be
filled by everyone on the planet (e.g., food, shelter) while others are not required for basic survival
and vary depending on the person. It probably makes more sense to classify needs that are not a
necessity as wants or desires. In fact, in many countries where the standard of living is very high, a
large portion of the population‟s income is spent on wants and desires rather than on basic needs.
For example, in planning for a family vacation the mother may make the hotel reservations but
others in the family may have input on the hotel choice. Similarly, a father may purchase snacks at
the grocery store but his young child may be the one who selected it from the store shelf. So
understanding consumer purchase behavior involves not only understanding how decisions are
made but also understanding the dynamics that influence purchases
3.1..TYPES OF CONSUMER PURCHASE BEHAVIOUR
Consumers are faced with purchase decisions nearly every day. But not all decisions are treated the
same. Some decisions are more complex than others and thus require more effort by the consumer.
Other decisions are fairly routine and require little effort . In general, consumers face four types of
purchase decisions:
· Minor New Purchase – these purchases represent something new to a consumer but in the
customer‟s mind is not a very important purchase in terms of need, money or other reason (e.g.,
status within a group).
· Minor Re-Purchase – these are the most routine of all purchases and often the
consumer returns to purchase the same product without giving much thought to
other product options (i.e., consumer is brand loyalty).
· Major New Purchase – these purchases are the most difficult of all purchases
because the product being purchased is important to the consumer but the
consumer has little or no previous experience making these decisions. The
consumer‟s lack of confidence in making this type of decision often (but not
always) requires the consumer to engage in an extensive decision-making process..
· Major Re-Purchase - these purchase decisions are also important to the consumer but the
consumer feels confident in making these decisions since they have previous experience purchasing
the product
For marketers it is important to understand how consumers treat the purchase decisions they face. If
a company is targeting customers who feel a purchase decision is difficult (i.e., Major New
Purchase), their marketing strategy may vary greatly from a company targeting customers who view
the purchase decision as routine. In fact, the same company may face both situations at the same
time; for some the product is new, while other customers see the purchase as routine. The
implication of buying behavior for marketers is that different buying situations require different
marketing efforts

19. “Nothing is more difficult and therefore, more precious, than to be able to decide is
quoted to be the words of Napoleon. This is amply true in the case of consumer too. It is for this
reason that the marketers are bound to have a full knowledge of the consumer – buying decision
process.
However it should be remembered that the actual act of purchasing is only one stage in the process
and the process is initiated at the several stages prior to the actual purchase. Secondly even though
we find that purchase is one of the final links in the chain of process, not all decision processes lead
to purchase. The individual consumer may terminate the process during any stage. Finally not all
consumer decisions always include all stages. Persons engaged in extensive decision making
usually employ all stages of this decision process. Where as those engaged in limited decisions
making and routine response behaviour may omit some stages. The consumer decision process is
composed of two parts, the process itself and the factors affecting the process.
A survey conducted by the marketing team of shoppers stop Ltd. Reveals the
psychography of the modern shopper.
Accordingly the survey classifies customers in to the four segments namely
· Convenience Shoppers
· Value Shoppers
· Image Shoppers
· Experience Shoppers
Convenience shoppers for instance ,are people who consume relatively less amount of time while
shopping. Also they look out for the width and depth of the range they purchase and conduct their
annual shopping at one shot.
Value Shoppers always hunt for value for money ; Prefer quality reassurance and
benchmark offerings among other related attributes.
Image Shoppers are fashion- conscious and look out for the latest trends and labels. On the other
hand , Experience Shoppers are attentive and prefer personalized services look out for the right
ambience, prefer giving personal advice on clothing at the time of purchase , and prefer not to buy at
one sold.

20. 3.2..Cultural factors Influencing Consumer Behaviour
Cultures, which only goes on to make the marketer's job tougher. Some of the few cultural factors
that influence buyer behaviour are:
1. Product (colour, size, design, and shape)
There are many examples that support this point. A good example would be Philips audio systems.
Urban India looks at technology with the viewpoint of „the smaller the better‟ . However, in rural
India, the viewpoint is totally opposite. That is the main reason for the large acceptance of big audio
systems. Thus Philips makes audio systems, which are big in size and get accepted in rural India by
their sheer size.
2. Social practices
There are so many different cultures, and each culture exhibits different social practices. For
example, in a few villages they have common bath areas. Villagers used to buy one Lifebuoy cake
and cut it into smaller bars. This helped lifebuoy to introduce smaller 75-gram soap bars, which
could be used individually.
3. Decision-making by male head
The male in Indian culture has always been given the designation of key decision maker. For
example, the Mukhiya‟ s opinion (Head of the village), in most cases, is shared with the rest of the
village. Even in a house the male head is the final decision maker. In rural areas, this trend is very
prominent.
4. Changes in saving and investment patterns
From Gold, Land, to Tractors, VCR‟ s, LCD TV‟ s etc.
3.3..MARKETING IMPLICATIONS OF CONSUMER’S DECISION PROCESS
It was during 1960‟s that a number of theories to explain the consumer „s decision
process started appearing. The three leading theorists were Howard-sheth , Engel Kollat- Blackwell
and Nicosia. Since then a considerable research on the marketing implications of the process has
been developed and tested the applications of many elements of marketing.
Many of the marketing strategies and tactics will have to be developed in relation to
consumer attitudes. Marketing strategies,if effectively used, will go a long way in
initiating and developing consumer attitudes in favour of the products.
THE IMPORTANT MOTIVES, INFLUENCING THE ULTIMATE BUYING BEHAVIOUR OF
CUSTOMERS.

21. 1. Fear : To overcome theft, you may purchase a burglar alarm(out of
fear)
2. Desire for money : Purchasing when the price falls down.
3. Vanity : Getting costly items to be admired by others
4. Pride : Possessing luxurious items for high position in the society
5. Love and affection : When you purchase toys, dresses for your sister, it is out Of affections.
6. Sex and romance : Spending much on dresses, ornaments etc.
7. Fashion : Imitation motives : Old people dress like young ones.
8. Possession : This refers to collection of stamps, coins etc.
9. Health and Physical : Purchasing health foods, vitamins etc.
Well being
10. Comfort and : Purchasing equipments like refrigerator, pressure cookers etc
3.4..Consumer Electronics Market
Rapid Innovation
Dynamic Market Place
Highly Competitive Industry
Significant Time-To-Market Pressures
Significant Cost Pressures
Rapid Rates of Market Penetration
Rapid Transition from One Technology to another
3.5..ECONOMIC FACTOR AFFECT THE BUYER’S BEHAVIOUR
1. Disposal personal income :
The economists made attempts to establish a relationship between income and
spending. Disposal personal income represents potential purchasing power that a buyer has. The
change in income has a direct relation on buying habits.

22. 2.Size of family income :
The size of family and size of family income affect the spending and saving patterns. Generally
large family spend more and short family spend less, in comparison.
3. Income expectations :
The expected income to receive in future has a direct relation with the buying behaviour. The
expectation of higher or lower income has a direct effect on spending plans.
4.Propensity to consume and to save :
This goes to the habit of spending or saving with the disposal income of buyers. If the buyers give
importance to present needs, then they dispose of their income. And buyers spend less if they give
importance to future needs.
5. Liquidity of Fund :
The present buying plans are influenced greatly by liquidity of assets i.e., cash and assets readily
convertible into cash, e.g. bonds, bank balances etc.,
6. Consumer Credit :
“ Buy now and pay later” plays its role effectively in the rapid growth of markets for car, scooter,
radio, furniture and the like.
Economic model suggests behavioural hypothesis :
Lower the price of the product, higher the sales.
Lower the price of substitute products, lower the sales of this product
Higher the real income, higher the sales of the product.
Higher the promotional expenses, higher the sales.
3.6..Factors influencing consumer purchase behaviour
The factors affecting consumer behaviour are discussed from the perspective of
Internal influences,
Environmental influences (external influences)
Marketer –initiated influences
1. Internal influences – not directly observable - are those factors which are internalized to
the consumer and affect the consumer‟s selection of products. They are: motivations, perceptions,
learning, attitudes, personality and lifestyle. These factors are related to one another. For example,
to some extent, our level of motivation and our specific motives have an effect on those stimuli we
perceive in our environment and on how we perceive them. Information gathered through these

23. perceptions enables us to learn about our environment and the specific products and brands in our
environment. Learning is essential for the development of attitudes.
Motives - the initial stage of the consumer decision process represent the recognition of a need
or problem. According to A. Maslow, needs are arranged in the following hierarchy:
1. Psychological needs (nutritional necessities, sleep, sensory pleasure, maternal behaviour,
activity and exercise);
2. Safety needs (security, stability, dependency, protection, freedom, need for laws);
3. Belongingness and love needs (to give and receive love and affection, to develop
relationships);
4. Esteem needs;
5. Self-actualization needs (self-fulfilment, self – development).
Unless a certain level of needs has been satisfied, higher levels of needs will not serve to
motivate the individual. Thus, once a level of needs has been satisfied, it no longer serves as a
motivator. The amount of unsatisfied needs influences the effort that the individual will expend in
seeking need gratification. The object of the individual‟s behaviour is determined also by its ability
to satisfy the particular motivating need.
Perceptions. Marketers are concerned with the way consumers perceive their product
offers. Consumers are faced with an increasingly complex environment which bombards them with
thousands of stimuli every day. Perception is the process by which the sensory stimuli are selected,
organized and given meaning. For example our perception of “quality” may be based on known
standards of performance. When there are no objective standards, our perception of
quality may be based on subjective factors such as brand name, the store in which the
product is stocked, an advertising slogan or price.
Learning may be defined as a change in the response tendency of an individual because of
the effect of experience with the environment. Consumers learn to respond in a particular way by
studying the consequences of their purchase behaviour. For example, people continue to purchase a
particular brand if they are satisfied with that brand. The most significant outcome of a consumer‟s
use of a product is satisfaction with the product. Some marketers consider repetitive advertising as
an important tool for establishing associations between product symbols (packing, logos) and brand
names, thus creating familiarity with the product among customers. These familiar brands are much
more likely to be considered by customers than brands they have not heard of before. Concerning
brand loyalty (the greater probability that a consumer will purchase a certain brand repeatedly) the
consumer even may be aware that other brands might offer greater satisfaction, yet is not interested
in those brands. The brand currently being purchased may provide enough satisfaction and not
exploring new brands reduces the consumer‟s risk of unknown consequences. But recent research

24. found out that brand-loyal consumers have been declining. The erosion of brand loyalty and the
growth of non-brand products determine challenges for firms that invested much in building brand
names.
Attitudes. Marketers‟ concern is to understand how attitudes toward brands are formed,
maintained and changed since they are important determinants of consumer‟s behavior. Consumers
favour products and brands for which they have positive attitudes and avoid those for which they
have negative attitudes. For example, consumers who agree that some nutrients are healthy will
have a positive attitude for products containing them. But on contrary, consumers who believe that
caffeine is harmful have the tendency to avoid cola products. Attitudes toward products and brands
are also shaped by family and peer groups. Consumers hold beliefs about the attributes of a
particular brand or about the benefits which it provides. For example, a woman believes that
Pantene Shampoo has a nice smell, rinses out easily (are attributes) and makes her hair shiny and
attractive (benefits). Consumers make an overall evaluation of a brand on the basis of their beliefs
about its attributes or benefits. When consumers have favourable evaluations of brands they tend to
purchase. When the evaluations are unfavourable they tend not to purchase.
Generally, the consumer looks at only one or a few attributes of a product. The marketer‟s
task is to identify the relevant product attributes and their benefits, communicate them to the
consumer and provide an opportunity for their easy in –store evaluation. For example, in a
supermarket, consumers who want to purchase a new product that they have not used before, they
pick the product on the shelf and examine it (read the label, smell it).
Personality refers to the way a person acts which makes that person different from others.
This is a fundamental aspect of human behaviour which influences purchase behaviour. People are
very different and their personalities influence the purchasing process but marketing researches
faced difficulty in trying to use personality to explain specific consumer purchases. Therefore,
marketers have turned to lifestyle research.
Lifestyle represents a broad composite of what a person does, the way the lives, what
products and services are bought and how they are used. Lifestyle is in fact what the individual does
with available resources – financial, social and time. This dimension influences consumer
behaviour. According to their lifestyles people purchase different products and services, from
different places or stores, at different periods. Considering foodstuffs purchasing, there are people
who go shopping many times a week, once a week, twice a month and so on according to their time,
money and needs. There are people who prefer spending a large amount of money for a larger
quantity of foodstuffs at a time but others cannot afford it and buy smaller quantities of products
more often. Some people prefer an expensive one - week vacation to a cheaper fortnight vacation.
2. Environmental influences refer to economic factors, cultural factors, social class,
reference groups and random environmental factors.

25. Economic factors. It is obvious that consumers cannot spend more money than they have or
use more credit than is available to them. The consumer‟s available income is an important
influencer of behaviour because it can limit total expenditures, eliminate alternatives, change
expectations of product attainments and influence the amount of time devoted to gathering
information on the alternatives. The cost of living is another influencer because if it rises at a rate
less than the rate of personal income, consumers either will have a real increase in income and will
spend their money for more goods and services or will increase their savings. Otherwise, if income
increases do not keep pace with rises in the cost of living, real income declines and consumers find
that their paychecks do not buy the same amount of goods and services as before. To compensate
for this decline in real income, they will seek less expensive items or retail outlets with fewer
services but lower mark-ups.
Cultural factors. Culture is the broadest of the external social influences on consumer‟s
behaviour. Values are learned through the process of consumer socialization in which younger
members of society develop attitudes toward products, brands and the purchasing process.
Social learning is the result of social influences on consumer behaviour. For example, a
child is taught to buy or how to shop for bargains or a child may imitate the consumption patterns of
family members and peers. Marketing abroad requires particular attention to cultural differences.
Many companies, when they begin to market abroad, make serious errors because they are unaware
of the subtle differences in local cultural values. As concerns subcultures, orthodox people,
Mormons, or other religion-based subcultures have rules which include what their members can and
cannot consume. When subcultures contain enough people, they can be considered as market
segments justifying separate marketing strategies. Hispanics represent the main important
subculture in the United States. Their attitudes toward brands are often distinct. Thus companies
such as McDonald‟s, Coca –Cola advertise in Spanish language.
Social class. Moreover, people do not live with uniformly equal status. Every society is
stratified into different levels of social status which give rise to many of our social motivations.
Sometimes people attempt to climb the social ladder purchasing certain products (the tendency to
buy certain brands of cars considered conventionally the best ones).
Reference group is any aggregation of people who influence an individual‟s attitudes or
behaviour. Someone will buy Nike trainers because a famous sportsman wears that brand. Family is
considered to have the greatest influence on purchase behaviour. Besides adult roles, parents set
examples of adult consumers. But parents may be influenced by their children. The child can
request a certain brand of cereal, chocolate or toy seen on TV. Family buying patterns vary
according to the type of products being purchased. For example, the husband has the dominant
influence in purchasing the car and different types of insurance but the wife has the dominant

26. influence in purchasing cleaning products, food, and clothing. From changes in family composition,
a study has drawn the following implications for marketers:
Declining family size affects marketers who sell products that appeal to large families (large
package sizes of products).
The young divorced stage may be a good segment for small appliances, personal services
(health spas and sports clubs)
Middle–aged childless couples and divorced individuals with no children to support may
represent a good market for luxury goods and services.
Middle – aged divorce parents may seek low-priced products.
Random environmental factors also can shape consumer‟s behaviour. Weather, for
example, determines the demand for specific products. Hot weather areas increase the demand for
air-conditioners and cooling beverages. Also, epidemics or a disease may request purchasing
specific medications. A government announcement can affect consumer‟s attitudes and purchase
behaviour. A disease largely spread among animals may cause a drop in demand for meat or related
products. International situations can influence consumer‟s behaviour. The oil crisis affected the
way consumers evaluated automobiles. Changing technology is constantly influencing consumer‟s
behaviour. Video projectors replaced other projection equipment.
3. Market-initiated influences. Buyer behaviour influences which are controllable by the
marketer‟s own organisation are of major interest. In formulating the marketing programme of a
firm, the marketing decision-maker should view the different components (product, price,
distribution, personal selling, and advertising) as an integrated package, which the consumer will
perceive as a single offering. Marketing elements are seen by the consumer as only part of the total
purchase environment. A price can be high or low relative to the consumer‟s income, need for
quality and perceived quality of the brand.
Consumer‟s behaviour concerns the study of the following questions: what, when, how,
where and why people do or do not buy products. It attempts to understand the consumer
decision making process, both individually and in groups. It studies characteristics of individual
consumers and behavioural variables in an attempt to understand people's needs and wants and
also tries to assess influences on the consumer from groups such as family, friends, reference
groups, and society in general. Consumer‟s behaviour is a complex process comprising all the
activities people engage in when they search for, select, purchase, use, evaluate and dispose
products and services in order to satisfy their needs and desires.

27. CONSUMER BEHAVIOUR TRENDS
Shift from buying predominately during Diwali and other festive seasons to year round
purchasing
Consumers more aware of brands
Consumers more conscious of style, looks, technical specifications
More research is done on technically advanced gadgets, but there has also been an increase
in impulse buying with increasing disposable incomes, competitive prices and wide choice
3.7..Different Segments of Indian Consumer
The Socialites
Socialites belong to the upper class. They prefer to shop in specialty stores, go to clubs on
weekends, and spend a good amount on luxury goods. They are always looking for something
different. They go for high value, exclusive products. Socialites are also very branding conscious
and would go only for the best known in the market.
The Conservatives
The Conservatives belong to the middle class. The conservative segment is the reflection of the true
Indian culture. They are traditional in their outlook, cautious in their approach towards purchase;
spend more time with family than in partying and focus more on savings than spending. Slow in
decision making, they seek a lot of information before making any purchase. They look for
durability and functionality but at the same time is also image conscious.
The Working Women
The working woman segment is the one, which has seen a tremendous growth in the late nineties.
This segment has opened the floodgates for the Indian retailers. The working woman today has
grown out of her long-standing image of being the homemaker. Today, she is rubbing shoulders
with men, proving herself to be equally good, if not better. Working women have their own mind in
decision to purchase the products that appeal to them.
The Youth
The “rise of next generation” has been written about with unbridled optimism and
enthusiasm, based on the coming of age of liberalization children. They are global in their
worldwide view and have been exposed to enormous information unlike their parents raised amidst
a consumption-friendly and consumption encouraging social discourse. They are expected to be at
the forefront of creating a new, modern, west-embracing consumer society, as well as yield the
demographic dividend that will drive economic growth

28. Revolution in Indian Consumer Behaviour
· Rising disposables incomes(higher buying power)
· Male no longer the sole income generator
· Enjoys travelling, shopping and eating out
· Increased indulgence in entertainment and lifestyle products
· Pester power, Seeking variety
· Seeking value for money(High quality and price consciousness)
· Technology Savvy (Internet, Mobiles, Voice Recognition…)
· Getting used to speed of service
· Convenience seekers

29. 4)Existing Players in the indian market
Before the liberalization of the Indian economy, only a few companies like Kelvinator, Godrej,
Allwyn, and Voltas were the major players in the consumer durables market, accounting for no less
than 90% of the market. Then, after the liberalization, foreign players like LG, Sony, Samsung,
Whirlpool, Daewoo, and Aiwa came into the picture. Today, these players control the major share
of the consumer durables market.
Consumer durables market is expected to grow at 10-15% in 2007-2010. It is growing very fast
because of rise in living standards, easy access to consumer finance, and wide range of choice, as
many foreign players are entering in the market
With the increase in income levels, easy availability of finance, increase in consumer awareness,
and introduction of new models, the demand for consumer durables has increased significantly.
Products like washing machines, air conditioners, microwave ovens, color televisions (CTVs) are
no longer considered luxury items. However, there are still very few players in categories like
vacuum cleaners, and dishwashers
Consumer durables sector is characterized by the emergence of MNCs, exchange offers, discounts,
and intense competition. The market share of MNCs in consumer durables sector is 65%. MNC's
major target is the growing middle class of India. MNCs offer superior technology to the
Consumers whereas the Indian companies compete on the basis of firm grasp of the local market,
their well-acknowledged brands, and hold over wide distribution network. However, the penetration
level of the consumer durables is still low in India.
4.1..Classification of consumer durables sector
The Consumer Durables industry consists of durable goods and appliances for domestic use such as
televisions,refrigerators, airconditioners and washing machines. Instruments such as cellphones and
kitchen appliances like microwave ovens are also included in this category.
The sector has been witnessing significant growth in recent years, helped by several drivers such as
the emerging retail boom, real estate and housing demand, greater disposable income and an overall
increase in the level of affluence of a significant section of the population. The industry is
represented by major international and local players such as BPL, Videocon, Voltas, Blue Star,
MIRC Electronics, Titan, Whirlpool, etc.
The consumer durables industry can be broadly classified into two segments: Consumer Electronics
and Consumer Appliances. Consumer Appliances can be further categorised into Brown Goods and
White Goods. The key product lines under each segment are as follows.
Kitchen Applicances/Brown Goods Consumer Electronics

30. Consumer
Durables
Consumer Consumer Others Like
Appliances Electronics Jewellery,Watche
s etc
Mobile phones
Brown
Goods/Kitchen Television
White
goods Appliances MP3 Player
Mixer DVD Player
Refrigerator
Grinder VCD Player
Washing
machine Iron Computers
Air Electric fans Telephones
Conditioner Cooking range Camera/camcorders
Speakers & Chimneys Home Theatres
Audio
components Microwawe oven
Sewing
machines
Electric Fans
Cleaning
equipments

31. 4.2..Scope
1. In term of purchasing power parity (ppp), India is the 4th largest economy in the world and
overtake Japan in the near future become the 3rd largest.
2. Indian consumer durable market is expected to reach $400 billion by on 2010
3. India has the youngest population amongst the major countries. There are lot of people in the
different income categories nearly the two third population is below the age of 35 and nearly 50% is
below 25.
4.. There are 56 million people in middle class, who are earning us$4,400-US$21,800 a year. And
there are 6 million rich household in India.
5. The upper-middle and high-income household in urban areas are expected to grew to 38.2 million
in 2007 as against 14.6 million in 2000.
4.3..BRANDS IN CONSUMER ELECTRONICS SECTOR
MNCs NATIONAL REGIONAL
LG )
SAMSUNG ) KOREA ONIDA BUSH
HYUNDAI) VIDEOCON CROWN
BPL SALORA
TCL ) CHINA GODREJ T-SERIES
HAIER ) VOLTAS WESTON
IFB OSKAR
PHILIPS ) HOLLAND
PANASONIC )
SHARP )
HITACHI )
SANSUI ) JAPAN
AKAI )
AIWA
WHIRLPOOL )
India‟s Consumer Durable industry is dominated by some of the top players like Voltas,
Kelvinator, Allwyn and Godrej, but after liberalization many foreign companies has also entered
the consumer durable industry in India.

32. Some of the major category of good coming under consumer durable industry is washing
machines, air-conditioners, refrigerators and CTVs. Some of the top players presently
dominating the consumer durable industry in India are:
Top players in consumer durable industry:
• Nokia India
• LG Electronics India Limited
• Philips India
• Titan Industries
• Samsung India Electronics
• Whirlpool Appliances
• Siemens
• Sony India
• Videocon Industries
• Blue Star
Some of the details regarding these top players in the consumer durable industry in India is given
below:
Nokia India:
Nokia India is a world leader in mobile phone industry and they have built a diverse product
portfolio with a view to meet the mobile phone requirement of different types of consumer. Their
product ranges from an entry-level mobile phone to an advance mobile phones with several
applications and multimedia facilities like gaming, music and imaging.
LG Electronics India Limited:
LG Electronics India Limited came into existence in the year 1997 and they have manufacturing
units at Pune, Delhi and greater Noida for manufacture of consumer durable goods like
televisions, IT products, vacuum cleaners, audio devices, microwave ovens, washing machines,
refrigerators, air conditioners, etc…
Philips India:
Philips India are leaders in the production of different consumer durable products like domestic
appliances, personal care products, etc… Their product range includes household products,
kitchen appliances, personal care products, accessories, phones, PC products, portable
entertainment and televisions.

33. Titan Industries:
Titan Industries came into existence in the year 1984 and it is a joint venture between Tamil
Nadu Industrial Development Corporation and the Tata Group. They are dealing with consumer
durables like sunglasses, jewelry and watches. Their jewelry business is being done in the name
of Tanishq.
Samsung India Electronics:
Samsung India came into existence in the year 1995 and they are dealing with different
businesses like household business, consumer electronics business and IT business. Their
product range includes washing machines, refrigerators, color monitors and color televisions.
Whirlpool Appliances:
Whirlpool Appliances came into India in the late 1980s and this company was established in
joint venture with TVS group. They are having their business in 170 countries and in the year
1995, they acquired Kelvinator India Ltd, which was a consumer durable company by itself.
Siemens:
Siemens have their operations in more than 190 countries and they have an employee base of
more than 4 lakh employees all over the world. They have more than 15 sales offices and
manufacturing units in India. They are engaged in different businesses like lighting,
transportation, healthcare, information and communications, energy and automation & control.
Sony India:
Sony India came into existence in the year 1994 and they have more than 7000 channel partners,
more than 200 Sony exclusive outlets in the name of Sony World and more than 20 direct branch
locations. They are dealing with nearly 20 different products in the consumer durable industry in
India.
Videocon Industries:
Videocon is actually based in India and they are dealing with a variety of home appliances and
consumer electronics. Their product variety include consumer electronics, glass, Thompson
products, Oil & gas.
Blue Star:
The main product dealt by Blue Star is central air conditioners. They are the leading producers of
Air-conditioners in India and they have made their presence felt in different countries like
Africa, South East Asia and Middle East.
These consumer durable companies are operating with the main objective of meeting the
requirement of a wide range of consumers belonging to different financial strata and these
companies have reached this place mainly because of the satisfaction they offered to their
customers.

34. TODAY Consumer durables sector is characterized by the emergence of MNCs, exchange offers,
discounts, and intense competition. The market share of MNCs in consumer durables sector is 65%.
MNC's major target is the growing middle class of India. MNCs offer superior technology to the
LG, SAMSUNG the two Korean companies has been maintaining the lead in the industries with LG
being leader in almost all the categories.
The company, having a turnover of Rs 9,500 crore and market share of 26 per cent, is investing Rs
360 crore on brand-building and other marketing initiatives and around Rs 140 crore on research
and development, besides launching new platforms in information technology and related areas

35. 4.4…1)MARKET SHARE OF CONSUMER APPLIANCE AND CONSUMER
ELECTRONIC:-

36. 2)Market share of consumer appliances and consumer electronic:-

37. 3)Position of CTV in various states in India-

38. 4)Position of AC in various States in India-

39. 5)Position of Audio & Home Theater in various in India-

40. 6)Position of DVD in various in India-
This analysis is based on the survey which represent the position of different consumer durables
in various states in India. I select different brand in different category as per the market share and
the demand of product in market. This analysis represents the market position of different
consumer durables during the period of March 2010. It shows that LG has captured maximum
market share almost in every
category. LG and Samsung have the maximum market in consumer durable market but LG
dominate the almost all the category in consumer durable.
Prominent consumer electronic company, LG Electronics Inc. has said that it expects the sale of its
products in India to up by 15 per cent in 2010. Moon Bum Shin, managing director of LG
Electronics India has said that the company has earmarked 4.8 billion rupees for investment purpose
in India this year. The said money will be used to market as well as manufacture new products.

41. 5.)….RESEARCH METHODOLOGY
Research methodology is considered as the nerve of the project. Without a proper well-organized
research plan, it is impossible to complete the project and reach to any conclusion. The project was
based on the survey plan. The main objective of survey was to collect appropriate data, which work
as a base for drawing conclusion and getting result.
Therefore, research methodology is the way to systematically solve the research problem. Research
methodology not only talks of the methods but also logic behind the methods used in the context of
a research study and it expl ains why a particular method has been used in the preference of the
other methods
5.1..MEANING OF RESEARCH –
Research in common parlance refers to a search for knowledge. One can also define research as a
scientific and systematic search for pertinent information on a specific topic. In fact, research is
an art of scientific investigation. The Advanced Learner‟s Dictionary of Current English lays
down the meaning of research as a careful investigation or inquiry especially through search for
new facts in any branch of knowledge. Redman and Mory define research as a “systematized
effort to gain new knowledge.” Some people consider research as a movement from the known
to the unknown. It is actually a voyage of discovery.
Research is an academic activity and such a term should be used in a technical sense. According
to Clifford Woody research comprises defining and redefining problems, formulating hypothesis
or suggested solutions; collecting
organizing and evaluating data; making deductions and reaching conclusions to determine whether
they fit the formulating hypothesis. D.Slesinger and M.Stephenson in the Encyclopedia of Social
Sciences define research as “the manipulation of things, concepts or symbols for the purpose of
generalizing to extend, corrector verify
knowledge, whether that knowledge aids in construction of theory or in the practice of art.”
Research is thus an original contribution to the existing stock of knowledge making for its
advancement. It is the pursuit of truth with the help of study, observation, comparison and
experiment. In short, the search for knowledge through objective and systematic method of finding
solution to a problem is research. The systematic approach concerning generalization and the
formulation of a theory is also research. As such the term „research‟ refers to the systematic method
consisting of enunciating the problem, formulating a hypothesis, collecting facts or data, analyzing
the facts and reaching certain conclusion either in the form of solutions towards the concerned
problem or in certain generalization for some theoretical formulation

42. 5.2..Marketing Research Process-
Defiene the Problem & Research
Objective
Define the Reserch Plan
Collect the Information
Analyze The information
Present the Findings in Report
Step 1: Define the problem and the research objectives
The 1st step in research is formulating a research problem. It is most important stage as poorly
defined problems will not yield useful results. Also the marketing management must be careful
not to define the problem too broadly or too narrowly. In order to identify the research problem,
three categories of symptomatic situations, namely, overt difficulties, latent difficulties and
unnoticed opportunities should be studied. Overt difficulties are hose which are quite apparent
and which manifest themselves. Latent difficulties are those which are not so apparent and
which, if not checked, would soon become evident. Unnoticed opportunities indicate the
potential for growth in a certain area of marketing. Such opportunities are not clearly seen and
dome effort is required to explore them.
Step 2: Develop the research plan
Designing a research plan calls for decisions on data sources, choice of research design, research
approaches, research instruments, sampling plan and contact methods.
Step 3: Collect the information
Our research group collected the information over a period of 15 days and from various locations
such as malls, residential complexes, colleges and schools and also retailers

43. Step 4: Analyze the information
After the process of gathering information was completed we tabulated the data and developed
frequency distributions and extracted the findings from the survey.
Step 5: Present the findings
Finally we prepared a project report on our survey and along with the
findings we also presented our recommendations.
Step 6: Make the decision
5.3..Research design:
Research design is important primarily because of the increased complexity in the market as well as
marketing approaches available to the researchers. In fact, it is the key to the evolution of successful
marketing strategies and programmers. It is an important tool to study buyer‟s behavior,
consumption pattern, brand loyalty, and focus market changes. A research design specifies the
methods and procedures for conducting a particular study. According to Kerlinger, “Research
Design is a plan, conceptual structure, and strategy of investigation conceived as to obtain answers
to research questions and to
control variance.
A research design is the detailed blueprint used to guide a research study toward its objectives.
The process of designing a research study involves many interrelated decisions. The most
significant decision is the choice of research approach, because it determines how the
information will be obtained.
To design something also means to ensure that the pieces fit together. The achievement of this fit
among objective, research approach, and research tactics is inherently an iterative process in
which earlier decisions are constantly reconsidered in light of subsequent decisions
5.4..DATA COLLECTION
The task of data collection begins after problem has been identified. While deciding about the
method of data collection to be used for the study the researcher should keep in mind two types
of data viz, primary data and secondary.
The primary data are those, which are collected afresh and for first time and thus happen to be
original in character. The secondary are those which have been collected by someone else and
which have already been passed through statistical process.
The researcher would have to decide which sort of data he would be using for his study. The
method collecting primary and secondary data differ since primary data are to be originally
collected while in case of secondary data the nature of data collection work is merely that of
compilation.

44. There are several ways of collecting primary data. They are as follows:
1.Observation method
2. Interview method
3. Through questionnaires
4. Through schedules
OBSERVATION METHOD
Observation becomes a scientific tool and the method of data collection for the researcher when
it serves a formulated research. Purpose is systematically planned and recorded and is subjected
to checks and controls on validity and reliability. Under the observation method the information
is sought by way of investigators own direct observation without asking from respondent
Survey(questionnaire to public)
Surveys are concerned with decribing,recording,analyzing, and interpreting conditions that exist
or existed.the researcher does not manipulate the variable or arrange FOR EVENTS TO
happen.surveys are only concerned with conditions or relationships that exist., opinions that are
held, process that are going on,effects that are evident or trends that are developing.they are
primarily concerned with present but at times do consider past events and influences as they
relate to current conditions.
1)surveys type research usually have larger samples because percentage of responses generally
happen to be low ,as low as 20% to 30% ,especially in mailed questionnaire studies.thus,the
survey method gathers data relatively from the larger number of cases at a pecular times.
2)surveys are the example of field research and are concerned with hypothesis formulation and
testing analysis of the relationships between non-manipulated variables.
3)surveys may either be census or sample surveys they may also be classified as social
surveys,public opinions surveys.
COLLECTION OF SECONDARY DATA
Secondary data means that are already available that is they refer to the data, which have already
been collected and analyzed by someone else. When the researcher utilizes secondary data, then
he has to look into various sources from where he can obtain them. In this case he is certainly not
confronted with the problems that are usually associated with the collection of original data.
Secondary data may be either published or unpublished data. Usually published data are
available in:
-Various publications of the central, state and local government.

45. -Various publications of foreign government or of international bodies and their subsidiary
organization.
-Technical and trade journals.
-Books magazines and newspapers.
-Reports publication of various associations connected with business and industry, banks, stocks
exchanges etc.
-Reports prepared by various scholars‟ universities economists etc in different field.
Public records and statistics, historical documents and other sources of publish information. The
sources of unpublished data are many; they may be found in diaries, letters unpublished biographies
and autobiographies and also may be available with scholar‟s research workers. Trade organization,
labor bureaus and other public/private organizations.
Researcher must be careful in using data. He must make a minute because it is just possible that
the secondary data may be unsuitable or maybe be inadequate in the context of a problem which
the researcher wants to study.
5.5Selection of appropriate methods for data collection -
Nature scope and object of enquiry: This constitutes the most important
factor affecting the choice of a particular method .the method selected should be such that it suits
the type of enquiry that is to be conducted in the researcher, this factor is also important in
deciding whether the data already available are to be used not yet available are to be collected
Availability of funds: Availability of funds for the research project
determines to a large extent the method to be used for the collection of data. When the funds at
the disposal of the researcher are very limited, he will have to select a comparatively cheaper
method. Finance in fact is big constraint in practice and the researcher has to act within this
limitation
Time factor: Availability of time has also to be taken into account in
deciding particular method of data collection. Some methods take relatively more time whereas
with others the data can be collected in a comparatively shorter duration. The time at the disposal
of the researcher thus affects the selection of the method by which the data is collected.
Precision required: Precision required is yet another important factor to be
considered at the time of selecting the method of collection of data

46. 5.6..DATA COLLECTION METHODS:
After the research problem, we have to identify and select which type of data is to research. At this
stage; we have to organize a field survey to collect the data. One of the important tools for
conducting market research is the availability of necessary and useful data.
Primary data: For primary data collection, we have to plan the following four important aspects.
 Sampling
 Research Instrument
 Secondary Data - The Company‟s profile, journals and various literature studies are
important sources of secondary data.
 Data analysis and interpretation
1.Questionnaires
2.Pie chart and Bar chart
Questionnaires:
This is the most popular tool for the data collection. A questionnaire contains question that the
researcher wishes to ask his respondents which is always guided by the objective of the survey.
Pie chart:
This is very useful diagram to represent data , which are divided into a number of categories. This
diagram consists of a circle of divided into a number of sectors, which are proportional to the values
they represent. The total value is represented by the full create. The diagram bar chart can make
comparison among the various components or between a part and a whole of data.
Bar chart:
This is another way of representing data graphically. As the name implies, it consist of a number of
whispered bar, which originate from a common base line and are equal widths. The lengths of the
bards are proportional to the value they represent.
Preparation of report:
The report was based on the analysis and presented with the findings and suggestions. The sample
of the questionnaires is attached with the report itself.

47. 5.7..Sampling Methodology:
Details of the sampling methodology, I have made questionnaire. The one is made for the
Customer.
No. of questions in questionnaires for customer: 09
No. of question related to consumer behavior 04
No. of people met during the research: 200
No. of respondents during the research: 50
Sample unit
Professionals
 usiness man
B
Employees
House wife
Working women
Students
5.8..ANALYSIS-
Q1. Have you purchased any consumer durable during Exhibitions?
 Yes
 No

48. 0%
0%
35%
Yes
65% No
Inferences
1. 65 % of Customer have not purchased any consumer durable from exhibitions.
2. Only 35 % people have purchased.
3. It shows that consumers are coming in the exhibition for knowledge of product and also
they want to know that weather there is actual price difference in exhibition and shop or not.
4. Consumers also want to compare to the different brand which are available in the exhibition.
5. So exhibitions are more useful to increases brand awareness.
6.People are less interested to purchase product from the exhibition
Q.2 While purchasing consumer durable which parameter influences you?
Price
Product feature
Brand
Service
Durability

49. 9%
30%
16%
Price
Product Feature
Brand
26% service
19%
Durability
Inference
1. 30% of customer gives importance to price. So it shows that Indian consumers are very price
sensitive. They give more importance to price over the brand.
2. 26% give importance to brand. So price and Brand matter a lots for the costumers. And they are
also want best brand in best price.
3. 19% to product feature Service 16% and durability 9% Service is also a big factor for the
customer they are less interested in the durability
Q3. From where you prefer buying consumer durables?
Exhibitions
Co.shoppee
Showroom

50. 0%
17%
47%
Exhibitions
Co.shoppee
36%
Showroom
Inference:
1. A majority of customers prefer to buy from showrooms. Very less proposition of customers buys
from Exhibitions.
2. 47% customers are prefer to buy from the showrooms because the showrooms are more
convenient to customers they also think that these shops give more discounts.
3. People are less interested to buy from the exhibition they only visit the exhibition for price
quotation of the product and the comparison of the product
Q.4. you prefer to buy from the same as you have mentioned in Q.3 because of following
reasons?
 Attractive Price
 Service
 Demonstrations

51.  Offers
 Convenience
29%
35%
Service
Demonstration
Offers
18%
Convenience
18%
Inference
1. Customers buy from showrooms because of the service and convenience. These are two main
factors
2. Customers are preferred to buy from the showroom because of they think that these convenient
store may provide good after sell service.
3. Customer also thinks that there is more chance to bargain and they can get more discounts in
these showrooms.
4. Price is also a factor that attract the customer in these showrooms.
Q.5… How frequently you change your consumer durables?
 1-3 years
 3-5 years
 5-10 years
 More than 10 years

52. 4%
19%
1-3 Years
54% 3-5 Years
23% 5-10 Years
More than 10 Years
Inference
1. Customers prefer to change consumer durables in more than 10 years. In India people do not
change consumer durable frequently.
2. 23% customers change their consumer durable within 10 year.
3. It represent that Indian consumer do not prefer to change their consumer durable frequently.
Q.6.. Has your friends/relatives opinions influenced you to buy electronics products?
a) Strongly agree b) Agree c) Average d) Disagree
e) Strongly disagree

53. 5%
10%
40% Strongly Agree
Agree
20% Average
Disagree
Strrongly disagree
25%
Inference-
1. Majority of the customers are influenced by friends/ family opinion in buying electronic
products. Among them Youth are the most.
2. There are very few customers who does not influence by their relatives or friends opinion.
They are quite conservative.
Q.7. what influence you the most while making buying decision?
1. Personality
2. Lifestyle
3. Self- esteem.

54. 4. Reference groups
20% 20%
Personality
Lifestyle
30% 30% Self-Esteem
Reference group
Inference-
1...Majority of the customers are interested in buying electronic products for their
personality and Life style.
2. Some people also buy because of their self-esteem means for their acceptance,
recognition in society.
Q.8.. What initiated you to purchase consumer durables for the first time?
A) Word of mouth
b) Friends
c) Need Recognition

55. d) Celebrities/Movies
10% 10%
30% Word of mouth
Friends
50% Need recognition
Celebrities/Movies
Inferences-
1. People prefer to buy consumer durables when they recognize need for it or when they are
influenced by their friends/relatives.
2. Very few decide to purchase by influencing with the Celebrities & word of mouth.
Q.9..Which segment of consumer mostly influence purchase decision?
A) Socialites
b) Conservatives
c) Working Women

56. d) Youth
25%
35%
Socialities
Conservatives
Working womer
10% Youth
30%
Inference-
1. Youth and working Women Plays an important role in Purchase decision.
2.Although socialites play lesser role than youth and working women, but yet they can‟t be
ignored.

57. 6)Key findings
The sector has been witnessing significant growth in recent years, helped by several drivers such as
the emerging retail boom, real estate and housing demand, greater disposable income and an overall
increase in the level of affluence of a significant section of the population. The industry is
represented by major international and local players such as BPL, Videocon, Voltas, Blue Star,
MIRC Electronics, Titan, Whirlpool, etc.
The electrical appliances industry, which had been focused on the urban market, is now reaching out
to semi-urban and rural markets as well, because of the shift
in living style of the population, increasing electrification of villages and relatively higher
purchasing power of consumers. As the market penetrates into the core
middle class segment in both urban and rural areas, it is expected to expand phenomenally, offering
large volumes to the industry.
Computers
Computers accounted for around 33% of Indian consumer electronics spending in 2009. BMI
forecasts Indian domestic market PC sales (including notebooks and accessories) of US$6.4bn in
2010, up from US$5.3bn in 2009. Sales were up by as much as one-third in Q110 compared with
the same period of the previous year. With PC penetration currently around 2%, computer hardware
compound annual growth rate (CAGR) for the 2010-2014 period will be around 15%.
AV
India‟s domestic video, audio and gaming device market is expected to grow to a value of
US$19.5bn in 2014. Television will remain the core product in this category, with sports events
such as India Premier League cricket and the 2010
Commonwealth Games in Delhi helping to drive demand for TV set upgrades. LCD TV set sales
grew almost 100% in 2009 and are projected to reach around 2.5mn units in 2010.
Mobile Handsets
Indian mobile handset sales accounted for around 33% of Indian consumer electronics spending in
2009. Total Indian market handset sales are expected to grow to 220.7mn units in 2014, as mobile
subscriber penetration soars towards 133%. Vendors are likely to increase their focus on semiurban
rural customers, with penetration in rural areas estimated at less than 15%, far below the national
level. Smartphones and touch-screen models are a strong growth area, with Indian and multinational
vendors competing to offer phones with perceived high-end features at affordable prices.

58. Other reasons-
Young Population with rising incomes
45% of the Indian population is below 25 years which accounts to close to 500 million
consumers (18+) of which 230 million are in Urban India. With the rising incomes and education
levels, the discretionary expenditure is increasing.
 Availability of Easy Credit Options
With all the major players offering easy EMI schemes and with the increased
penetration of Credit cards, the Indian consumers now have an easier access to consumer electronics
 Changing Consumption Patterns
Gone are the times when people bought electronics with the intension of using it
for years together. With increasing speed of innovations and as new technologies
come in, the Indian consumer wants the latest and the best. Now mobile phones
are changed every year, laptops once in 2 years ,etc. People want to be trendy and
are becoming gizmo frenzy.
 Falling Prices of Consumer Electronics
With new models, products and more competition, prices are being driven even further down.
Especially in the mobile phone segment, prices fall as much 20% after 6 months after introduction.

59. CUSTOMER SURVEY FINDINGS
1. Secondary supports play an important role in the customers mind and create awareness among the
customers. The secondary support includes Demonstration, Exhibition & Even Sponsors.
2. From the survey it was found out that the majority of customers don‟t buy consumer durables
from exhibitions. They just visit the exhibitions to see the co. latest model.
3. They want to buy from the showrooms or from co. showrooms. For them service is important
.Beside convenience and other factors service is key factor.
4.Also majority of customers do not want any financing scheme for purchasing the durables.
5. Customers are also now very choosy in buying the product and it is important for the company to
make loyal customer of their brand.
6. In survey we found that LG has captured maximum market share in every category. LG
dominates CTV, LCD, and Refrigerator, and Washing machine, category.
7. LG and Samsung have bottle neck competition in TV and REF. category.
8. The product is well aware and it is on top of mind of customer

60. 7)Some Statistics-
Consumer electronics (durables) sector continues to be the main stay of the Indian electronic
industry contributing about 32 per cent of the total electronic hardware production. By the
end of 2005-06, the market for consumer durables (including entertainment electronics,
communitarian and IT products) was Rs 180 billion (US $4.5 billion). The market is
expected to grow at 10 to 12 per cent annually and is expected to reach Rs 60 billion (US$13.3
billion) by 2008. The urban consumer durables market is growing at an annual rate of seven to 10
per cent, the rural durables market is growing at 25 per cent annually. Some high-growth categories
within this segment include mobile phones, TVs and music systems.
Source:- Isuppli Markets(Indian market intelligence service)

62. 8)Challenges to the electronics industry-
 Price Wars
With the increase in price wars due to the entry of new players in the market and increase in
manufacturing capacity by some original manufacturers, the profitability and margins of the
companies are adversely affected. Hence companies need to increase focus on product / store
differentiation to address various segmental specific needs
 Lack of Distribution Networks and Logistics Management
Getting stock into a store in India is a massive challenge given the poor city roads and
complex intra city transportation regulations , high cost of moving goods between starts, inefficient
storage ( e.g. small store backrooms owing to expensive real estate). It is of utmost importance to
design an efficient network. Transportation, including railway systems, highways has to meet global
standards. Airport capacities, power supply, warehouse facilities and timely distribution are other
areas which need to be enhanced. The distribution network is also highly fragmented and is very
poor in semi-urban and rural areas.
 Presence of Gray Market in Consumer Electronics
Presence of gray market in consumer electronics products, especially in DVD player,
music players is definitely eating into the sales of the retailers. Counterfeit products are present
across a wide range of products.
 Increasing Awareness of the Indian Consumers
With the increase in access to Internet information, and availability of wide range of
choices, consumers have become quite smart. They want the product that is easy-tohandle, good in
quality and low in price. Most importantly, consumers want some
guarantee for the product that they are buying. The role of electronic companies doesn't end on the
sale of the product, but continues till the end of guarantee period.
 Trained manpower shortage in India
There is lack of talent in consumer electronics retailing. Retailers need to spend heavily on training
its sales force to match the expectations of the Indian consumers both in terms of technical
knowledge and soft skills.

63. 10)Limitations of the project-
Every study has certain limitations. In my study, also there were certain limitations, which I could
not able to solve.
1. The research was conducted in a very small area.
2. My research work period witness the biggest ups and downs in product sale of different brands,
which affected the perception of the customer. This was biggest drawback of my study.
3. The customer filled the questionnaire mostly in careless manner, so it was difficult to make them
hold for time.
4. I had only found the upper-middle class family to fill up the questionnaire, but generally, an
Average middle class family was required for the study.
5.The sample size is also very small which represent my research on consumer behavior

64. Conclusion
The consumer durables industry in India is set for sustained growth over the long term, fuelled by
favourable consumer demographics, overall growth in services and industrial sectors and
infrastructure development in suburban and rural areas. Several Indian and MNC players are
looking to strengthen their presence in India to leverage this opportunity.
Success in the long-term will require firms to develop a wide and robust distribution network,
differentiate their products in areas of relevance to the consumer and innovate in the areas of
promotion, product financing, etc. The product and approach to market need to be customised to
suit the unique needs of the Indian market.

65. BIBLIOGRAPHY
 www.lgindia.com
 www.google.com
 www.wikipedia.com
 “India Consumer Electronics Report Q4 2010”
 “India Consumer Electronics Report Q2 2011”