THE ENIGMA OF IMPULSE BUYING

GROUP MEMBERS:

AMITANSHU SRIVASTAVA ALOK KUMAR

ANAND KUMAR ABHISHEK DHAL

MUNMUN

Discussion Outline

INTRODUCTION

PROJECT RATIONALE

CONCLUSIONS OBJECTIVES

ANALYSIS AND FINDINGS

MANAGEMENT IMPLICATION

INTRODUCTION

PROJECT RATIONALE

CONCLUSIONS OBJECTIVES

ANALYSIS AND FINDINGS

MANAGEMENT IMPLICATION

Discussion Outline

Myth or Reality

Impulse buying is such a sudden phenomenon where instinct plays a predominant role.

Impulse buying behavior is an enigma in the marketing world.

According to many literature and consumers impulse buying is a sign of immaturity and lacking behavioral control or as irrational, risky, and wasteful.

A customer makes a purchase without proper planning or prior homework.

This is the scenario that marketer and retailer try to capitalize and harness.

Myth or Reality

It is propagated by effective retail communication or out of the mind discount offers.

They provide such impulsive stimuli which are innovatively clubbed with basic needs and wants.

Instincts are driven by emotions and emotions are driven by attitude and perception.

Impulse items can be anything, a new product, samples or well established products at surprising low prices.

INTRODUCTION

PROJECT RATIONALE

CONCLUSIONS OBJECTIVES

ANALYSIS AND FINDINGS

MANAGEMENT IMPLICATION

Discussion Outline

Project Rationale

Impulse buying behavior is much more complex than conceptualized.

The impulse purchases is observed across a broad range of product offerings in a variety of price ranges. For example, not only FMCG products but also automobiles are bought in impulse.

The purchase of relatively expensive products indicates it is an inherent individual trait, rather than a response to inexpensive product offerings.

Marketers need to understand such consumer behavior in order to formulate appropriate marketing strategy.

INTRODUCTION

PROJECT RATIONALE

CONCLUSIONS OBJECTIVES

ANALYSIS AND FINDINGS

MANAGEMENT IMPLICATION

Discussion Outline

Broad Objective

The broad objective of this project is to understand the impulse buying behavior and what makes consumers to for a impulse purchase

Specific Objectives

To determine

whether the customer

buy more in planned

manner or in

unplanned manner.

SPECFIC OBJECTIVES

To determine the factors affecting

such behavior.

INTRODUCTION

PROJECT RATIONALE

CONCLUSIONS OBJECTIVES

ANALYSIS AND FINDINGS

MANAGEMENT IMPLICATION

Discussion Outline

Cluster Analysis

Cluster

1 2 3Variety_life 1.86 4.17 4.21Follow_Others 2.20 3.56 2.55Lead_Others 1.49 3.54 4.03New_Things 3.12 2.31 3.88Age 3.72 4.48 2.64Education 3.74 3.90 3.48Occupation 4.45 5.35 3.21Monthly_Income

2.25 1.79 2.00

Gender 1.28 1.19 1.33Final Cluster Centers

Cluster Analysis

Age: 1: < 18 2: 18-24 3: 25-34 4: 35-44 5: 45-54 6: 55-64 7: > 64

Education: 1: Secondary 2: Higher Secondary 3: Graduate 4: Post

Graduate 4: Others

Occupation: 1: Student 2: Self Employed Professional 3: Business 4: Govt. Service

5: Pvt. Service 6: Retired 7: At Home

Income: 1: < 15000 2: 15000 – 30000 3: 30000 – 50000 4: > 50000

Gender: 1: Male 2: Female

Cluster Analysis

Cluster 1 65.000

2 52.000

3 33.000

Valid 150.000

Missing .000

17%

9%

8%

49%

17%

I rarely ever buy impulsively.

Strongly Disagree

Disagree

Can't Say

Agree

Strongly Agree

8%

27%

21%

31%

13%

I always buy if I like it.

Strongly Disagree

Disagree

Can't Say

Agree

Strongly Agree

33%

24%

23%

20%

While moving around the store, I decide for purchasing by looking

at the things.

Strongly Disagree

Disagree

Can't Say

Agree

Strongly Agree

29%

13%52%

6%

While moving around, I often buy being tempted out of need which

has suddenly evolved

Strongly Disagree

Disagree

Can't Say

Agree

Strongly Agree

5%

28%

11%39%

18%

When I go for shopping I buy things that I had not intended to purchase.

Strongly Disagree

Disagree

Can't Say

Agree

Strongly Agree

21%

53%

5%

17%

4%

Strongly DisagreeDisagreeCan't SayAgreeStrongly Agree

Quite often I regret after buying new things.

Factor Analysis

Kaiser-Meyer-Olkin Measure of Sampling Adequacy.

.623

Bartlett's Test of Sphericity

Approx. Chi-Square 1459.126

df 28

Sig. .000

KMO and Bartlett's Test

Scree Plot

Component Matrix(a)

Component

1Low_Price .894Hidden_Desires .428Advertisements .938Visibility .879Shelf_Space .934Discount .767Packing .891Storage .750

N Mean

Std. Deviatio

nStd.

Error

95% Confidence Interval for Mean

Minimum

Maximum

Lower Bound

Upper Bound

18-24 yrs

34 2.76 1.327 .228 2.30 3.23 1 5

25-34 yrs

61 2.87 1.500 .192 2.48 3.25 1 5

35-44 16 2.88 1.455 .364 2.10 3.65 1 5

45-54 yrs

13 2.69 1.494 .414 1.79 3.59 1 5

55-64 yrs

10 2.80 1.317 .416 1.86 3.74 1 5

> 64 yrs 16 2.94 1.569 .392 2.10 3.77 1 5

Total 150 2.83 1.430 .117 2.60 3.06 1 5

DESCRIPTIVES

Relationship Between a Advertisement and Age

AD

The null hypothesis is that the advertisement has effect on age

Sum of Squares df

Mean Square F Sig.

Between Groups

.708 5 .142 .067 .997

Within Groups

304.125 144 2.112

Total 304.833 149

ANOVAAD

For 5 and 144 degree of freedom the critical value of F is 2.21 for α = 0.05 . Because the calculated value is less then the critical value, the null hypothesis is accepted, i.e advertisement has effect on age.

N Mean

Std. Deviatio

nStd.

Error

95% Confidence Interval for Mean

Minimum

Maximum

Lower Bound

Upper Bound

male111 2.94 1.454 .138 2.66 3.21 1 5

female39 2.54 1.335 .214 2.11 2.97 1 5

Total150 2.83 1.430 .117 2.60 3.06 1 5

Relationship Between a Advertisement and GenderDESCRIPTIVES

AD

The null hypothesis is that the advertisement has effect on gender

Sum of Squares df

Mean Square F Sig.

Between Groups

4.582 1 4.582 2.259 .135

Within Groups 300.251 148 2.029

Total 304.833 149

ANOVAAD

For 1 and 148 degree of freedom the critical value of F is 3.84 for α = 0.05 . Because the calculated value is less then the critical value, the null hypothesis is accepted, i.e advertisement has effect on gender.

INTRODUCTION

PROJECT RATIONALE

CONCLUSIONS OBJECTIVES

ANALYSIS AND FINDINGS

MANAGEMENT IMPLICATION

Discussion Outline

Management Implications

Should create an environment where consumers can be relieved of their negative perceptions of impulse.

They may also stress the non-economic rewards of impulse buying.

Make the environment more complex: Stocking more merchandise Store layout Creating stimulating atmospherics Increasing information may be useful to stimulate

impulse buying

Make impulse purchasing more risk-free.

Management Implications

Shopping should be fun – it is management’s

job to make it so:

The impact of the store is crucial to success.

They need to appreciate that many shoppers do

not have a specific objective or purpose.

They should focus as much on entertainment,

interest and excitement as they do on getting the

mix of merchandise right and the pricing spot on.

Have special demonstrations.

Use special offers to stimulate sales.

Get the right employees and train them well.

INTRODUCTION

PROJECT RATIONALE

CONCLUSIONS OBJECTIVES

ANALYSIS AND FINDINGS

MANAGEMENT IMPLICATION

Discussion Outline

Conclusions

Data support the theory that impulse buying is a common method of product selection.

The impulse to buy is hedonically complex and may stimulate emotional conflict.

Impulse buying behavior is not always an irrational but sometime a rational response to the complexities present in the environment.

Consumers use shopping to satisfy a number of wants, not just their want for the products they acquire during the shopping excursion.

Conclusions

The shopping act and impulsive product selection provide hedonic rewards.

Research on impulse buying behavior indicates that individual consumers do not view their specific purchases as wrong.

INTRODUCTION

PROJECT RATIONALE

CONCLUSIONS OBJECTIVES

ANALYSIS AND FINDINGS

MANAGEMENT IMPLICATION

Discussion Outline