A STUDY TO INDICATE FACTORS INFLUENCING THE BUYING .
BACHELOR THESISMsVera BoaduA STUDY TO INDICATE FACTORSINFLUENCING THE BUYINGBEHAVIOUR OF CIGARETTESMOKERS2012
Faculty of MediaBACHELOR THESISA Study to indicate Factorsinfluencing the buying Behaviourof Cigarette Smokersauthor:Ms. Vera Boaducourse of studies:Business Managementseminar group:BM09w2-Bfirst examiner:Robert J. Wierzbicki(Prof.Dr.-Ing)second examiner:Herbert E.Graus (Prof)submission:Bremen,10. August 2012
Personal DetailsBoadu, VeraA Study to indicate Factors influencing the buying Behaviour of CigaretteSmokers41 Pages, University of Applied Sciences,Faculty of Media, Bachelor Thesis, 2012AbstractThe main purpose of this thesis is to investigate factors influencing the buyingdecision of cigarette smokers. To achieve this, different theories concerningconsumer buying behavior and factors influencing have been discussed toachieve a deeper understand of consumer behaviour. To enable me comprehendthe influence factors that influence the buying decision of a smoker as aconsumer, a survey with questionnaires was performed. The results of the surveyindicates that brand awareness, quality of the tobacco, price, packaging,advertisement, influence by others and availability are the major factorsinfluencing the buying decision of a smoker, with availability, quality, price andbrand awareness having the most effective influence on a smoker.
Table of ContentsTable of ContentsTable of Contents .IVTable of Figures VIList of Tables .VIList of Pictures .VILists of Graphs .VIAcknowledgement .VII1. Introduction .11.1 Background .21.2 Research Goals 32. Literature Research 52.1 Consumer Buying Behaviour .52.1.1Consumer Buying Process 72.1.2Types of Buying Behaviour .92.2 Factors influencing Consumer Buying Decision .102.2.1Brand and Branding .102.2.2Advertisement .162.2.3Price .172.2.4Packaging 172.2.5Availability 172.2.6Culture .182.2.7Psychological Factors 192.2.8Individual Factors 202.2.9Influence by Others .20IV
Table of Contents2.3 Problems of Cigarette Brands .213. Research Method .263.1 Research Approach .263.2 Data Collection .263.3 Limitations .273.4 Questionnaire .274. Research Findings .295. Conclusion .40References .VIIIAppendices .XIIIDeclaration of Originality .XVIIV
Table of FiguresTable of FiguresFigure 1: Thesis Outline 4Figure 2.1.1: Consumer Buying Process 7List of TablesTable 2.1: The types of Consumer Behaviour .6Table 2.1.2: Four types of Consumer Buying Behaviour .9List of PicturesPicture 2.3 Packaging Warning Messages .22List of GraphsGraph 1: Demographics Participants of the Survey 30Graph 2: Favourite Brand of Cigarette .31Graph 3: Importance of Brand Loyalty .32Graph 4: Importance of Price .33Graph 5: Importance of Quality .34Graph 6: Importance of Packaging .36Graph 7: Importance of Advertisement .37Graph 8: Importance of Availability .38VI
AcknowledgementVIIAcknowledgementI give thanks to the Almighty God for giving me the wisdom, understanding,knowledge and strength during the period of my research.I,also take the opportunity to appreciate the assistance and guidance I had frommy supervisors Prof. Dr.- Ing Robert J. Wierzbicki and Prof. Herbert E. Graus. Iam very grateful for their help.Special thanks go to my family for their continuous support, encouragement andlove and also friends who have been of help to me during the course of mystudies.
Introduction1“Customers set up a hierarchy of values, wants, and needs based on empiricaldata, opinions, word-of-mouth references and previous experiences with productsand services. They use that information to make purchasing decisions.”-Regis McKenna, founder of the marketing firm Regis McKenna Inc.
Introduction21. IntroductionThe consumer behavior is result of multiple influences. To enable markerterscome up with effective tools to affect the decision making of consumers, theyneed to understand the motives behind the consumers’ behaviour.In order for atobacco company to be successful, it needs to recognise the needs of itsconsumers and understand why they purchase its products and be able toanalyse the consumer’s behaviour and the factors they take into considerationwhen buying its brand, This will help the company to create and implent effectivemarketing strategies to reach and keep its consumers. This thesis is to add to theliterature about cigarette smokers’ behaviour and factors influencing their buyingbehaviour, by helping tobacco companies know the determinants behind thesmokers’ purchasing behaviour to be able to come up with better marketingpolicies and concepts to maintain or win more consumers. These goals are all themore crucial, since the companies are presently facing bans and restriction ontheir marketing activities. With the present anti-smoking era linking smoking tovarious health problems, campaigns being organised to increase the awarenessof the risks involved in smoking and offering help to reduce smoking, there is stilla large number of people who smoke, this triggered my interest to research onfactors, that influence their behaviour.1.1 BackgroundA cigarette is a small roll of finely cut tobacco leaves wrapped in a cylinder of thinpaper for smoking. Most modern manufactured cigarettes are filtered and includereconstituted tobacco and other additives.The following are the various brands of cigarettes, which are well known amongsmokers: Marlboro, Lucky Strike, Pall Mall, L & M, West, Gauloises Blondes andJohn Player Special.
Introduction3The companies in the cigarette industry manufacture cigarettes from tobacco.The cigarette industry is one of the tobacco industries, which produces apart fromcigarette, tobacco products such as cigars and chewing tobacco or snuff.The cigarette industry is dominated by a few large tobacco companies. Theworld's largest cigarette manufacturers are British American Tobacco, Altria,Imperial Tobacco and China National Tobacco. In 2009 in Germany, the cigarettemanufacturer Philip Morris had the highest market share in the field of cigaretteproduction with 36.5 percent, followed by British American Tobacco (BAT) andReemtsma1. In all, the German industry made a turnover of nearly EUR 19.5billion in 2008. Only a fraction of the revenues for the German cigarettemanufacturer is generated abroad. According to German Cigarette Association(ODP) in Germany there are nearly 9,000 workers in the cigarette industry. Themost popular cigarette brand was Marlboro Red in 2009 with a market share ofalmost 12 percent, followed by L & M Red Label and Marlboro Gold.2The tobacco companies specialized in the cultivation and industrial processing oftobacco into finished products such as cigarettes, fine cut tobacco, cigars, pipetobacco or cigarillos. As an industry, the tobacco industry is part of theconsumption industry. The tobacco industry is mainly dominated by large globalcorporations and public enterprises.1.2 Research GoalsThe main objective is to understand the factors influencing the buying decision ofa cigarette smoker as a consumer. Another Objective is to find out which of thefactors has the most significant impact on their buying decision, before discussingthe factors influencing the buying behaviour of smokers.1A Report by the Frankfurter Rundschau: ,11088230.html retrieved on 20 June 20122thwww.tabakkontrolle.de retrieved on 20 June 2012
Introduction4Research will be presented on consumer buying behaviour and the variousdeterminants influencing buying decision. Also information about the problemsfacing cigarette brands will be discussed.OutlineThe thesis is divided into 5 chapters:1.2.3.4.5. INTRODUCTION LITERATURE PRIEVIEW METHODOLOGY RESEARCH FINDINGS CONCLUSIONFigure 1: Thesis OutlineThe first chapter provides an introduction to the rationale of the thesis and theobjectives to be achieved.The second chapter focuses on the theoretical part of the research. Differenttheories concerning consumer buying behaviour and the factors influencing thepurchasing decision are presented.The methodology including research approach, data collection, limitation and thequestionnaires are presented in the third chapter.The empirical findings and analysed answers are given in the fourth chapter.The fifth chapter provides summary and conclusion of the study based on theliterature research.
Literature Research52. Literature ResearchTo fully understand the underlying problematic nature and factors influencing thebehavior of a consumer, theories from researchers within the field will bediscussed in this section. A closer look will consider consumer behavior theoriesand the impact they play on the buying actions of consumers, defining the variousfactors that influence the buying behaviour.2.1 . Consumer Buying BehaviourTo be able to comprehend the impact the different factors have on the decisionmaking of a consumer, it is essential to understand what, why, how, where andhow much a consumer buys.It is very important to understand that the buying behaviour of a consumer isintergral to his social environment, the competing products in the marketplaceand the brand marketing strategy imposed by the manufacturer. Belch and Belch(2004) share this view; they defined consumer behavior as “the process andactivities people engage in when searching, selecting, purchasing, using,evaluating and disposing of product and service so as to satisfy their needs anddesires”.3Consumer behaviour can also be define as the understanding of what aconsumer needs and what exactly influences his buying behavior.4 A buyer goesthrough some series of stages in arriving at a decision to buy a product orservice. Consumer behaviour can also be described as how a consumerdistinguish products and services, their reasons for purchasing and consuming aproduct .53Belch & Belch, 2004Kotler, 2003. Page 1325Howard, 1994. Page 14
Literature Research6Dahlqvist and Linde (2002), presents an in-depth analysis of the role consumerbehaviour plays in the buying decision of consumers by discussing four factors.These factors are presented in the table below:6Rational BehaviourConsumers with rational behaviour first get someknowledge about the product and what it may offer. Byassessing this information, they get an attitude towardthe product and finally act; whether or not to buy theproduct. This type of behavior is mostly common whenconsumers are purchasing expensive products forexample cars.(KNOWLEDGE ATTITUDE ACTION)Unconscious BehaviourConsumers with unconscious behaviour begin with anattitude towards the product, this attitude may eithercome from emotions or feelings. This attitude will leadthe consumers to find out more information about theproduct and get knowledge about it and finally acttheir choice. (ATTITUDE KNOWLEDGE ACTION)Learned BehaviourThis type of behaviour stems from habits. TheseConsumers do not plan their choice of product, theydo it by habit. Example of this behaviour is whenbuying a newspaper.(ACTION KNOWLEDGE ATTITUDE)Social BehaviourConsumers with social behaviour choose theirproducts as a result of the social environment whichthey live in. Their status, lifestyle and influence fromothers determine the product they will buy.(ACTION ATTITUDE KNOWLEDGE)Table 2.1: The types of consumer behaviour, source: Dahlqvist and Linde (2002)6Dalqvist & Linde 2002, Reklameffekter
Literature Research72.1.1 Consumer Buying ProcessBefore a consumer purchases a specific product or service, there are five stagesof decicion making process he goes through.7 A need is recognized in the mind ofthe consumer, followed by information research, then analysing alternativesbetween products. Afterwards the consumer makes a decision either to purchaseand use the product and then comes the post purchase behaviour, this willdecide whether the product was able to satisfy the consumer’s need.Problem recognitionInformation searchEvaluation of alternativesPurchase decisionPost-purchase behaviorFigure 2.1.1: Consumer Buying Process (Adapted from MarketingManagement and Consumer Behavior by Philip Kotler, 2000)The buying process consists of five steps which the consumer undergoes asshown in figure 2.1.1. The decision is made to solve a problem of any kind orsatisfy a need. The problem recognition occurs when a consumer identifies aneed or a problem and the need is prompted either by an7Kotler, 2000. Page 161
Literature Research8external (example: advertisement, friend’s purchases) or internal (example:hunger, fear, stress) stimulus. For example a smoker feels stressed out fromwork of studies and realizes the need to smoke to calm his or her nerves.After the need has been recognized the next step is information search. Theconsumer begins to search information, in this case about cigarettes. Theinformation can be gathered from different sources such as commercial source(example: advertisement, salespersons), personal source (friends and family),experiential source (such as using the product) and public source. When thenecessary and essential information has been acquired the consumers goes tothe next step, which is the evaluation of alternatives. The information searchimproves the consumer’s knowledge about the different and available brands.This helps the consumer to evaluate and rank the alternative brands.The consumer compares the options with criterion that depends on the situationand his own buying behavior. The preferred brand with certain benefits that suitsand help solve the need of the consumer will be chosen. This leads to thePurchase decision. The consumer would select the most important information,weigh the benefits of each product and decides either to purchase a particularproduct or not, postpone the purchase or even not purchase at all. Income,attitude of others or perceived risk can influence the purchasing decision.8After purchasing and using the product, the consumer compares his expectationand the experience he had with the product to see if his need has been satisfiedor not. This information influences any future purchase decision. A satisfactoryexperience may lead to a repeat purchase while a disappointment may cause aconsumer not to purchase the product again. Consumers do not necessarily gothrough all the five steps at every purchase. In routine purchases some stagesare skipped, for example everyday goods, information search and evaluation areeven skipped.8Du Plessis, Rousseau & Blem,1994. Page 47
Literature Research92.1.2 Types of Buying BehaviourDifferences in consumers buying behaviour depends on the type of product theconsumer is purchasing. A behaviour model consisting of four different buyingbehaviours was designed by Kotler et al (1999).9High InvolvementLow InvolvementSignificant differencesComplex buyingVariety-seekingbetween brandsbehaviourbehaviourFew differencesDissonance-reducingHabitual buyingbetween brandsbehaviourbehaviourTable 2.1.2 four types of consumer’s buying behaviour, source: Kotler et al (1999) p. 251Complex buying occurs when there is high involvement from the consumer to aproduct and significant differences between the brands. This means that before aconsumer purchase a high quality brand, he searches for a lot of informationabout that brand.Dissonance-reducing behavior happens when a consumer is highly involved inpurchasing a product because of the purchase is expensive or infrequent. Thereis little difference between existing brands.9Kotler, Armstrong, Saunder & Wong, 1999. Page 251
Literature Research10Variety-seeking behavior is the case where the individual likes to shop aroundand experiment with different products. In other words, an individual may shoparound for different breakfast cereals because he wants variety in the mornings.Habitual buying behavior is where the individual buys a product out of habit e.g. adaily newspaper, sugar or salt. Cigarette smokers can be classified as having ahabitual buying behavior because there is perceived little difference betweenexisting cigarette brand manufacturers.2.2 Factors influencing Consumer Buying BehaviourThere are a number of factors that influence a consumer and his lifestyle. Thesefactors help to form the attitude and needs of the consumer. The needs of acustomer are triggered by culture, social class and reference groups and alsointernal factors which include motivation, demographic and former experience.Also marketing activities such as advertisement, quality of a brand, price strategyalso have a significant impact on the consumer buying behaviour.2.2.1 Brand and BrandingBrand can be defined as “the distinctive product offering created by the use of aname, symbol, design, packaging, or some combination of these intended todifferentiate it from its competitors”.10 Another definition of brand is “a name,term, sign, symbol, design or a combination of these that identifies the makers orseller of the product or services”.11 This means that a brand is something thatsymbolises the uniqueness of a product or service, since it differs from otherproducts or services from competitors even if it satisfies the same need. A brandis also a means of communicating the benefits of1011Jobber & Fahy,2003.Page 131Kotler,Wong, Saunder & Strong,2005. Page 113
Literature Research11a product or service that a consumer can derive from using that product.12 Brandsare important because they shape the consumer decision and create economicvalue. For a consumer, the most significant roles brands play is the signal ofquality and risk reducer especially when making a purchase decision. Brands aredeveloped to convey quality, which leads a positive image, prestige, virtue orlifestly.Branding is the process involved in creating a unique name and image for aproduct or service in the consumer’s mind, mainly through advertisementcampaign with consistent theme. Branding aims to establish a significant anddifferentiated presence in the market that attracts and retains loyal customer.13The process of branding today is also to create emotional attachment to aproduct or company.14 Branding effort create a feeling of involvement, a sense ofhigher quality and an aura of an intangible qualities that surround the brandname, mark or symbol. One benefit of branding is that the brand designates aproduct or a service as being different from competitors' products and services bysignaling certain key values specific to a particular brand.Brand EquityIn the literatures, different definitions of brand equity have been proposed. Brandequity is “the differential effect of a brand knowledge on consumer response tothe marketing of a brand”.15 It is the value endowed by the brand to the product.Brand equality enables a customer to pay a premium for a branded productcompared to an identical unbranded version.Brand equity is also known as “a set of assets (liabilities) linked to a brand’sname and symbol that adds to (subtracts from) the value provide12Lamb,Hair & McDaniel,2004.Page html retrieved on 22.June 201214Kotler & Armstrong, 200415Keller, 1993. Page 813
Literature Research12by a product or service to a firm and/or that firm’s customers”.16 Aaker hasclustered those assets and liabilities into five categories: a) Brand loyalty b)Brand
The main purpose of this thesis is to investigate factors influencing the buying decision of cigarette smokers. To achieve this, different theories concerning consumer buying behavior and factors influencing have been discussed to achieve a deeper understand of consumer behaviour. To enable me comprehend
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mix were predominantly the major factors influencing the consumers ¶ decision to buy. These was based on durable goods, such as televisions fridge, motor vehicle and etc. Kotler and Armstrong (2007) conducted a research to study factors affecting consumer buying behavior. Amongst all the factors, physical factors, social factors, cultural factors
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several kinds of factors: (1) individual factors (per ceptions, self-image, peers); (2) social factors (societal norms); (3) environmental factors, such as advertising and economics; and (4) cultural factors, such as traditional uses of tobacco, acculturation, and the historical context of the tobacco industry in various communities.
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