Importance of networking
Background and significance to the study
Today, the increase in economic activity at the global level encourages business organizations to seek a competitive advantage by accessing new markets and expanding their operations and with advent of all information economic age, the network economics has been into era of rising economic mode which effectively uses information resources especially with globalization and rapidly developing technology a very fast growth in economy can be noticed in a very less time, especially economies like Brazil, Russia, India and China (BRIC) and the way these economies are growing there can be learning outcomes not only for each other but also for the world.
The traditional and historical enterprise marketing concept and means cannot keep up with the requirements of the new development not only in this competitive global market but also in this very competitive local market, so enterprises strive for the new and doable ideas through innovation in marketing theories and means.
Therefore keeping these things in mind, it is essential to learn the advanced and proper way of new marketing theories and methods which especially led to relationship with customers which includes different consumer behavior and building relationship. This is a valid business concept with enormous benefits for not only customers and companies but also to the overall industrial growth because of the fact that it's not only related to Sale, Service, Spares managements but also with internal and financial management too. It forms an effective marketing environment of enterprise, which is market oriented, customer-service focused and work process droved. Building relationships is a significant factor to upgrade the competition capabilities and the efficient approach for enterprises to adopt the network economic age.
The reaction in the automobile market in India can be noticed very easily because of its growth in such less time. However slashing prices of the products is not the only way to compete in the over-heated market. Currently the most important aspect is to place greater emphasis on customer value and enhance their relationships. With the system of building relationships with customers automobile manufactures can understand the feelings the customers have about the sales process and hence make appropriate adjustments to their marketing and strategies. Through building relationships or expanding their networks, many changes can be brought in practice like offering customization. Also with this the manufactures can understand the safety issues that are needed to be resolved and they can be improved in this field continuously.
This study gives an insight about the importance of networking and how it helps the organizations to grow and severs better in order to enhance their reputation in the eyes of the stakeholders and in turn trying to gain more competitive advantage.
Rationale for the study
The researcher has undertaken this study on building relationships/ networks in 2-wheeler industry primarily because of his keen interest in this industry with regards to the growing global importance of the concept of networking. This study has been undertaken in the United Kingdom, in view of the fact that how 2-wheeler industry over here acts, reacts and interacts which influences customers as compared to the Indian industries. The researcher thinks that this industry over here is not working enough to get into top of the charts in the marker.
The issue of networking has received greater attention with the advent of the intense globalization of business, albeit the concept itself is not a new one. The researcher is an Indian and has observed that Indian 2 wheeler industry is much aware of the importance of this issues and it can be turned into a learning outcome for many companies. This study can significantly contribute to driving further research in United Kingdome considering the tribes involved.
Aims and objectives of the study
The aim of this research is: to investigate and analyze different consumer behavior in rapid developing economies in 2-wheeler industry.
- To conduct an elaborate theoretical analysis and reviewing literatures and references on different aspects of Consumer behavior in rapid developing economies in 2-wheller industry.
- To undertake and analyze different aspects of sales management (In marketing terms).
- To gain an overall picture of different buyers/consumer behavior and impact of the behaviors.
- To undertake and analyze few bits of business cultures differences in Rapid developing economies.
Outline to the study
This study is structured into 5 chapters:
- 1st Chapter is the Introduction, which outlines the background of the research, the significance of the research, the aim and objectives.
- 2nd chapter is Literature review; it contains, different Aspects of consumer/ buyers behaviors, rapid developing economies and sales management
- 3rd chapter is Research methodology in which description of different methodologies are given which are used in this research.
- 4th chapter is Findings and Discussion; which gives an in-depth analysis and discussions on 2-wheeler industry in India, supplier's types, business cultures differences, communications, climate, demand factors and population effects on the industry.
- 5th chapter is Conclusion which provides conclusion on the findings and discussion. It is divided into four parts; first is the review for the aim and objectives, second is the review of methodology, third is the effecting factors on networking and last is the rationale for further study.
In this chapter, a reflection can be seen of the whole paper that what this paper will be looking into and how.
Chapter 2 Literature Review
Introduction to the Chapter
The literature review will explore the concept and aspects of consumer behavior by getting into different buyers /consumer reactions and impact of reactions and behavior. In our society where there are tremendous choices in every sector of the market, we continue to demand more and more, or we don't? Are we surrounded by too many choices? How important is personal decision, perception and attitudes in the 2-wheller industry or it are just the brand which speaks, market share and majority follows?
Then the 2nd bit examines the consumer behavior in Rapid developing economies with a view of understanding that what is going on underneath the surface? How consumer behaves in RDE keeping populations and demand in the industry?
Followed by the 3rd section which focuses on aspects of sales management or marketing by firstly different passions and attitudes are explored in an attempt to understand motivation . Secondly focuses different marketing aspects with different consumer behavior where the research asks; what do a consumer wants?
Then the final area of literature will explore the aspects and concepts of consumer behavior in RDE led to different aspects of marketing, specifically
Consumer behavior may be defined as that behavior exhibited by people in planning purchasing and using economic goods and services in simple terms "it's the way people act in the exchange process" (Charles 1975) and two other recent definition of consumer behavior are "the behavior that consumer displays in searching for, purchasing, using and evaluating products, services and ideas which they expect will satisfy their needs," (Leon G and Schiffman 1978 p4) and "the decision process and physical activity individuals engage in when evaluating, acquiring, and using economic goods and services." (David L 1979) Essentially, these definitions say that consumer behavior involves the entire process by which people select, acquire and use various products and services. (Terrell G. W. 1982) Consumer behavior is a function of both personal and situational variables. Personal variables include the consumer's motives, attitudes, beliefs and past experiences; while situational variables will include advertising and other promotional activities, product distribution, competition between suppliers and word-of-mouth communications. Furthermore these variables interrelate in a complex and dynamic manner (Keith. C .W 1997)
Approaches to the study
The study of consumer behavior as a separate discipline is a relatively new phenomenon. In the short time that consumer behavior has been studied, several theories and approaches to its study has appeared and the main reason behind that is because most view consumer behavior either as a problem-solving exercise or a cognitive process. In general, various topics, including attitudes, personality , learning, motivation, needs, perception, family influence, social influence, and culture, are discussed at length to provide a framework for understanding buyer behavior. (T.Williams.1982)
The study of human behavior can take either a behaviorist or a cognitive approach. The behaviorist concentrates on how organisms respond to stimuli without being concerned with why they respond as they do. Cognitive, existential, or phenomenological approach is concerned as much with the process behavior as with the outcome.
The study of buyer behavior has grown out of numerous micro theories largely based on the views of theorist individual disciplines. The theories of buyer behavior that have developed and influenced our thinking can be divided or classified into two broad areas: rational or substantive and emotional or nonsubtantive (P. Kotler 1965)
THEORIES OF CONSUMER BEHAVIOR
These theories take the view that the consumer approaches the buying Process armed with Adequate information or the capability and ambition for acquiring necessary knowledge to make the decision, by this type of given information a consumer carefully weigh alternatives and arrive at a rational purchasing decision.
The customer is completely informed about the product without significant personal cost or effort. The consumer's needs are stable and realistic-that is, he or she wants and needs the kinds of things that will satisfy physical needs and also this economic person Is intelligent and diligent in making purchase choices and in selecting the places where purchase are made.
Problem Solving and decision making
This theory suggests that the consumer does not possess all relevant information about the alternatives and the acquisition of such information requires time and effort.
Some of the customers needs are not completely stable and realistic and most purchases involve a degree of economic and psychological risk. In this buyer chooses from all the alternatives that meets his/her needs. They also faces a lot of complications while purchasing.
Concept of risk avoidance also builds on the premise that customers are decision makers who try to solve buying problems through a decision making process. The theory emphasizes that customers must take risks, often substantial risks, when they make purchases, and also stresses the value of brand and company reputation and suggests caution in marketing product features that are too unique.
Consumers actually learn from their shopping experiences and gradually simplify the buying process and this is done by developing habitual purchases pattern. Differences in consumer perceptions and motives are specifically treated as the influence factor
These types of theories emphasize the lack of information available to customers about a large majority of product range these theories also suggests that many product and brand differences are quite intangible and perhaps most important, they stress the emotional, unrealistic and sometimes even destructive goals and needs that underlie many purchases (Oxenfeldt 1966.)
The whole idea of this theory is that, the researcher must dig deeply into the consumer's unconscious mind to uncover the "real" reasons for purchases. But these reasons are highly individualistic and therefore it is extremely difficult to predict or even to explain behavior.
A consumer's physical and social environment can make a big difference in affecting his or her motives for product purchases and usage and also affect how he or she evaluates products (M. Solomon et al 2006) and some items are become status symbols reflecting the life-styles of various groups. The types of items purchased and even the nature of the purchase process itself are often influenced by formal and informal group affixations
In this purchase are seen as making many purchases on the spur of the moment, without prior thought or planning. If no thought or information seeking precedes the purchases, the buyer may be considered non rational (T .Williams 1982)
Random choice or probabilistic
Many purchases are trivial and differences between brands are slight and this is the main reason of which the research of this area is has focused on predicting brand-switching behavior and there is a good evidence that probabilistic models sometimes do as well as or better than more complex behavioral models in predicting brand choice (F. M. Bass 1974)
It is a way to pass your message to the other end and communication has shown its importance as never before.
The term ATTITUDE is widely used in popular culture and that's the reason the consumers are asked that what's your attitude towards this product or anything (Solomon. M et al 2006) Consumer has their own attitudes by which they are judged and then they are recognized by the companies for the different products in a way it's a way towards segmenting the market with different attitudes towards the products.
In the model below its been try to look that how the whole process works from organization to consumer. A Source must choose and encode a message and the meaning must be put into the message. There are many ways to say something or to convey the message and the structure of the message has a major effect on how it is perceived. The message must be transmitted via a medium, which could be broadcasts, TV, internet etc. Finally feedback must be received by the source which uses the reaction of receivers to modify aspects of the message (Solomon, M .et. al .2006 p.168).
Changing attitudes through Communication
Through communications attitude is created or mostly it is modified? This objective related to persuasion, which refers to an active attend to change attitudes. Persuasion is, of course the central goal of many marketing communications (Solomon, M .et. al .2006 p167)
According to one of the recent research by J. Walker Smith, the president of Yankelovich and Partners, Showed in their surveys' that 54% of respondents to their survey' avoid buying products that overwhelm them with advertising; 60 % said their opinion of adverting' is much more negative than just a few years ago'; 61 % said they agreed that the amount of advertising and marketing to which they are exposed' is not of control', also/ 65% said they believed that they' are constantly bombarded with too much' advertising; and 69% said they' are interested in products and services that would help them skip or block marketing.
Consumer are influence to change their mind due to many psychological reasons, few of the basic psychological principles on which people comply with a request (Robert et al. 2001) are as follows.
Reciprocity: People change their mind if they are given something for something and that's the reason why paid surveys increase by avg. 65% that which comes with an empty envelope.
Scarcity: items which are not easily available are more in demand and a consumer change his mind towards such kind of products which are for limited time such as limited stocks or limited edition products.
Authority: One changes his/her opinion or mind even for the reason who delivers the message and how cause people talk about those things that how they heard about the product and therefore by this reason the few things play an important role in influencing public attitudes.
Consistency: People try not to contradict themselves in terms of what they say and what they do about an issue and that's the reason why consumer believes so much in someone's advice.
Liking: People agree with those people who they admire or who they like.
Consensus: People like to see what others are doing before they make any decision about the same issue this desire to fit in with what others are doing influences the action of others. (Solomon M et al. 2006)
Lifestyle is a mode of living as it is reflected in every consumer's patterns of attitudes, interests, options and passion which all are unique in them. The study of lifestyle is an important thing to do because by doing this a person can understand deeply into consumer behavior and that of looking into how consumer spend their time and what they think of various elements of their environment and not only this by doing this one can also get an idea about consumers' motives, feeling and beliefs cause it is a reflection of self-concept. There are mainly two approaches towards the study of lifestyle which are traditional and contemporary Lifestyle (Evans. M et al 2009 p191) Consumers also make decision sometimes because of the ongoing trends. As pointed out by Orth et al (2004) also that study of lifestyle helps in explaining behavior and buying behavior activities, which in turn can inform target marketing approaches. Brunso et al (2004) also explore these links and show that values can be the 'top' level and product perceptions the 'bottom' level, with lifestyle usefully providing an intervening system and the mean-end chain can be used to work both ways- from the product attributes to reveal values through lifestyle or from values through lifestyle to reveal product or brand perceptions, in a 'goal directed' manner.
Consumer Decision Making Style
Consumer decision making style is linked with mental orientation characterizing to define it, and this is mainly done to link with consumer's approach to make shopping choices (Walsh et al 2001). The main idea behind this whole thing is that consumers engage in shopping with certain fundamental decision making styles.
Social groups and tribal Influences
In many cases, group influence is instrumental in determining an individual's buying behavior. Sprott back in 1958 wrote that a group is 'a plurality of persons who interact with one another in a given context social-groups.jpgmore than they do with anyone else'. In essence, a human group involves several persons who share common goals or purposes and who interact in pursuance of these objectives; each member of the group is perceived by others as a group member and all members are bound together by patterns and networks of interaction over time (Evans. M et al.2009 p242). The interdependence of group members is made enduring by the evolution of a group ideology which cements the belief, values, attributes and norms of the group (Kassarjian and Robertson, 1973).
Behavioral aspect also refers to the primary and secondary groups. Primary are characterized by their size and by the close relationships that take place within them whereas secondary are made up of more than one primary groups, Consumer research is also concerned with informal groups, which occur 'spontaneously' on the basis of common interests and the geographical closeness of members rather than formal groups which are usually officially organized groups with a more rigid structure. (Evans. M et al 2009 p243)
Any group of individuals or any individual who can significantly influence someone's behavior could be called as their reference group (Bearden and Etzel, 1982). Reference groups are significant to the extent that consumers aspire to be like them, emulate them listen to them, identify with them and buy what they buy but the question here which arise here is are these groups important? In respond to that Maslow's Hierarchy of needs can argue that need of belonging; affection and love etc are associated with reference groups. However the fact is that consumers use reference groups as sources of attitudes, beliefs, values or behaviors. Three types of reference groups to which a consumer can turn as a standard for behaviors.
There are such groups too which are negative reference groups or avoidance or dissociative groups whose behavior, beliefs and values the individual deliberately avoids adopting as their own (Evans. M et al 2009 p252)
Tribes and tribal group influence
People who have developed strong emotional bonds like sharing of same tastes, habits, passion etc they are a part of a group which are unstable (Maffesoli.1996). The ephemeral and unstable grouping of consumers who are joining together by their common or shared interest are termed as tribes.
The members of one tribe can be members of other tribes too at the same because of the fact that the boundaries of such groups are conceptual rather than physical (Cova and Cova . 2002), also membership of such a group transcends traditional culture, national and race barriers- anyone sharing the space and a common sentiment can join the tribe, which has a less articulated but differentiated form (Cova. 1997)
Unlike a market segment, the tribe consists of heterogeneous consumers with different demographic features who are capable of collective action and act as advocates for their causes (Cova and Cova 2002). In tribe there are hard core people who influence soft core and pretenders within the tribe and these people influence other (they can be of other tribes or within the same tribe too) (Dr. Deccan, J.2009) Culture plays a major role in tribal influence and vice versa cause culture connects people with common and shared interests, there are sub tribe within tribes also but the fact is that people are individuals even when they in a group as explained by Hofstede (2001) a primary dimension along cultures is the lens through which individuals in a society view themselves. In societies with strong individualistic tendencies, individuals perceive themselves largely as independent actors. In contrast, in societies emphasizing collectivism, the group becomes the primary source of an individual's identity.
The above literature gives a brief idea about the concepts of consumer behavior and better understanding about those aspects which influence the behaviors. Time has been taken in understanding the relationship between consumer behaviors and affecting aspect.
Aspects of Rapid developing economies.
Will be discussing mainly cultures, sub cultures and values with their similarities and differences Going deeper with touching to population, demand and availability of options.
Consumption decisions made in the market cannot be viewed as an independent event - these are very closely related with the values, social relationship and especially cultural allegiance. According to past research done by few researchers, national culture has shown considerable influence on consumer behavior (Jaishankar, 1998). National culture of any country, as outer stimuli, influence on the diffusion of products across countries (Kumar et al., 1998). With globalization, culture becomes predominantly important strategic issue in market that has to be faced and properly managed. People of each country possess a distinct ''national character' Clark, 1990).
Countries are a source of a considerable amount of common mental programming of their citizens (Hofstede, 1991). Core values of any country shape its national culture. As culture varies from countries to countries, a close insight about country-specific culture and core values is almost essential for a smooth sailing in any country market. For brand marketing, cultural dimensions play a vital role to formulate imagery about the brand and help marketer to communicate better (Banerjee 2008)
Cultures, values and Sub-cultures
As explained by Hofstede (2001) about culture that "it is the collective programming of the mind which distinguishes the members of one group or category of people from another". Cultures are refers to a set of values, ideas, artifacts and other meaningful symbols that help individuals to communicate, interpret and evaluate as members of different societies. It is normally homogeneous system of collectively shared meanings, way of life and common set of values shared by each member of all societies. Culture comprises the shared values, assumptions, understandings and goals that are learned from one generation and which are carried out to another, imposed by the current generation (Deresky, 2003). It governs how we wish to be treated and how we treat others; how we communicate, negotiate process information and make decisions (Scarborough, 2000) Values shapes ones attitude and beliefs about work, success, wealth, authority, equity, competition and many other such components of the content and context of the work environment too. In the nutshell, culture is learned by the members of the society and it is also shared simultaneously from one member to another. Culture is one of the fundamental base of a society if not the. It has a long-lasting influence on behavior of its members (people) (Banerjee 2008)
Aspects of Sales/Marketing Management
Will be discussing different marketing styles and importance of word of mouth with the help of marketing to recognized tribes
Case study p 35 from consumer behavior by martin evans , ahmad jamal and Gordon foxall 2nd edt in 2009