CONSUMER BEHAVIOR AS A DETERMINANT OF PRODUCT PERFORMANCE WITH A VIEW TO EXPLORE DUFIL PRIMA FOODS PLC, ERIC MOORE ROAD, SURULERE, LAGOS
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CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
The evolution of the study of consumer behaviour dates back into the ancient times. Societies used symbols, and pictorial signs to attract their product users. Over centuries, these elements were used for promotion of products. Consumer behaviour involves individuals, groups, or organizations and the processes they use to select, secure, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society. It blends elements from psychology, sociology, social anthropology and economics (Jalees, 2006).
Today, the study attempts to understand the decision-making processes of buyers, both individually and in groups. It observes characteristics of individual consumers such as demographics and behavioural variables in an attempt to understand people’s wants. It also tries to assess influences on the consumer from groups such as family, friends, reference groups, and society in general. The consumer plays three distinct roles of user, payer and buyer. Research has shown that consumer behaviour is difficult to predict, even for experts in the field (Hussainy, Riaz, Kazi, & Herani (2008).
Product origin is one of the extrinsic cues that consumers use in forming consumption preference and making purchase choices. Economics of information theory classifies products into three categories according to how consumers evaluate the product. This classification was initially developed to help explain the notion that consumer information about quality often has ¨profound effects upon the market structure of consumer goods¨ (Sharp, 2003).
According to Romaniuk (2004), an individual buying behaviour is influenced by motivation, perception, learning, beliefs and attitude. These factors affect consumer at a psychological level and determine her overall buying behaviour. Maslow’s hierarchy, Herzberg Theory and Freud Theory try and explain people different motivational level in undertaking a buying decision. Perception is what consumer understands about a product through their senses. Marketers have to pay attention to consumer’s perception about a brand rather than true offering of the product. Learning comes from experience; consumer may respond to stimuli and purchase a product. A favorable purchase will generate positive experience resulting in pleasant learning. Belief is the pre-conceived notion a consumer has towards a brand. It is kind of influence a brand exerts on consumer. For example, there is a strong belief product coming through German engineering are quality products. Companies may take advantage of this belief and route their production through Germany.
Companies need to think beyond buying behaviour and analyze the actual buying process. Complex buying behaviour requires high involvement of buyers, as it is infrequent in nature, expensive, and they are significant differences among the available choice e.g. automobile. Grocery buying is referred to as habitual buying, which requires less involvement as few differences among brands, frequent and inexpensive. Buying process involves purchase need, decision makers, information search, alternatives evaluation, purchase decision and post purchase behaviour. Companies try hard to understand consumer experience and expectation at every stage of buying process. Marketers need to figure the right combinations which will initiate purchase need e.g. marketing programs. Companies should ensure consumer have readily available information to take the decision e.g. internet, friends. Consumers evaluate alternatives based on their brand perception and belief. Companies need to work hard to develop products, which match this perception and belief every time. Final purchase decision is taken looking other’s perception of the brand. Post purchase if expectations meet actual performance consumer is satisfied and more likely to repurchase or recommend the brand to others (Romaniuk & Sharp 2003).
1.2 Statement of the Problem
The strong objection and arguments against consumer behavior as a determinant of product performance are buttressed below:
Cultural background is one of the militating factors that can adversely affect product performance in the market in the sense that peoples’ acceptance or rejection of a product is based on their cultural belief. A product is likely to receive low patronage if the belief for the product has not been established in a particular geographical area.
Low psychological factors such as mental processes or perceptions and motivation can negatively affect the acceptance of a product. Consumer tends to buy less when they are psychologically sad or unhappy.
Biased perception from family roles and reference groups can negatively influence consumers’ attitude towards a product, thereby resulting into low sales of a particular product.
1.3 Aims And Objectives Of The Study
The main purpose of this research is to examine consumer behavior as a determinant of product performance
Other objectives include:
- To evaluate the influence of consumers’ buying behavior on organizational sales volume.
- To examine the effect of consumers’ psychological status on product performance.
- To find out if perceived attitude of family roles and reference groups affect consumer purchase decision
- To examine the effect of both negative and positive attitude of consumers behavior on product performance.
1.4 Research Questions
In assessing the purpose of the study, this research project attempts to answer the following questions:
- Does consumers’ buying behavior have any influence on organizational sales volume?
- How does consumers’ psychological status affect product performance?
- Does perceived attitude of family roles and reference groups has any effect on consumer purchase decision?
- Does consumer’s attitude has any effect on product performance?
1.5 Research Hypotheses
In carrying out this research work the following theoretical statements are suggested to serve as a direction on which the work will be premised:
- Ho: There is no significant relationship between consumer behavior and product performance.
H1: There is significant relationship between consumer behavior and product performance.
1.6 Scope of the Study
This research work aimed to examine consumer behavior as a determinant of product performance with a view to explore Dufil Prima Foods Plc, Eric Moore Road, Surulere, Lagos.
1.7 Limitation of the Study
Some perceived constraints may be encounter by the researcher in the course of carrying out the research work. The limitations are as follows:
- Inadequate material: Inadequate material constituted one of the limitations of the research work. The non-availability of materials like journals, textbooks etc the research study.
- Finance: The researcher also may encounter some financial constraints which will contribute in limiting the work in the sense that fund available was not enough to carry out the research to a logical conclusion.
iii. Time: Time is also another factor or limitation that may affect the research work. The limited time may not give the researcher enough opportunity to do more rigorous work.
- Significance of the Study
It is hoped that the findings and recommendations of the study will be of great benefit through the following ways:
The study will broaden students understanding about the cause of consumer behavior on business environment and it effects on sales volume.
The study will be of great benefit to the public by bringing to their awareness how the influence of reference groups and family ground affect their perception about a product.
The study will also help sales manager to monitor the trend of the market and the consumption pattern in order to establish an interactive dialogue between an organization and its customers.
It will also help the sales personnel to reposition their branding and marketing strategy in the society in order to attract and retain their target market.
- Definition of Terms
Consumer: A consumer is a person or group of people that are the final users of products and or services generated within a social system. A consumer may be a person or group, such as a household.
Decision: Decision can be regarded as the mental processes (cognitive process) resulting in the selection of a course of action among several alternative scenarios. Every decision making process produces a final choice.
Environment: Environment (systems), the surroundings of a physical system that may interact with the system by exchanging mass, energy, or other properties.
Influence: Influence is the action or process of producing effects on the actions, behavior, opinions, etc., of another or others.
Purchase: This refers to a business or organization attempting for acquiring goods or services to accomplish the goals of the enterprise.
Organization: An organization is a social group which distributes tasks for a collective goal.
Sales: The exchange of goods or services for an amount of money or its equivalent; the act of selling.
Performance: The accomplishment of a given task measured against preset known standards of accuracy, completeness, cost, and speed.
Product: The accomplishment of a given task measured against preset known standards of accuracy, completeness, cost, and speed.
1.9 Brief Outline of Literature to be reviewed
- Preamble
Customer behaviour study is based on consumer buying behaviour, with the customer playing the three distinct roles of user, payer and buyer. Relationship marketing is an influential asset for customer behaviour analysis as it has a keen interest in the re-discovery of the true meaning of marketing through the re-affirmation of the importance of the customer or buyer. A greater importance is also placed on consumer retention, customer relationship management, personalisation, customisation and one-to-one marketing.
- Theoretical Frame work
There are numerous theories on consumer behaviour. Most theories of consumer behaviour generally propose that the effectiveness of purchase decision is dependent on the main practices being carried out including more exposure towards the brand.
- The Market Power Theory of Consumer Purchase decision
- Theories of Consumer Decision Applied to Advertising
- Economic Model Applied to Consumer behaviour
- Stimulus-Response Model Applied to Consumer behaviour
- Classical Conditioning
- Operant Conditioning
- Stimulus-Response-Organism Model Applied to Consumer behaviour
The theories involved in stimulus-Response-organism model are:
- Attribution Theory
- Theories of Price Perception
- Attitude Models
- Deal Proneness
Other outlines to be considered in the study are:
- The problems and prospects of Consumer behaviour on product performance.
- Factors affecting consumer behaviour
- The historical background of Dufil Prima Food Plc
1.10 Methodology of Study
Research Design: The Research design involve plan, structure and ways the researcher intend to execute the study. However, the most suitable design for this study is the survey design/method. This is more appropriate as the research study intends to observe what is happening to sample subjects or variables without any attempt to manipulate or control them.
Characteristics of Study Population: The study population will be the staff Nigerian Dafil Prima Foods Plc, Surulere, Lagos made up of 152 employees, from different departments and gender. The employee are broken down into below casual 17, clerical 45, Supervisor 5, officer 65, Assistance 20, manager 14.
Sampling Techniques: The study seeks to adopt simple random sampling method in order to give every member of the population an equal and independent chance of being selected.
Data collection instrument: The research instrument for data collection will be a self-designed questionnaire, which will be personally administered to the staff of Dufil Prima Foods Plc, Eric Moore Road, Surulere, Lagos.
Data presentation: The data which is collected will be represented through tables, using simple percentage for analyzes and interpreting of the questionnaire.
Data Analysis: The hypotheses formulated will be subsequently tested using chi-square test statistics.
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