PROJECT REPORT

ON

MARKETING RESEARCH OF SONY WORLD

Submitted in partial fulfillment of the requirement of

Bachelor of Business Administration

Of

Guru Gobind Singh Indraprastha University

SUBMITTED TO: SUBMITTED BY:

MR. RAVI JAIN MOHIT BENIWAL 026761101712

Maharaja Agrasen Institute of Management StudiesAffiliated to Guru Gobind Singh Indraprastha University, Delhi

PSP Area, Plot No. 1, Sector 22, Rohini, Delhi – 110086

DECLARATION

I, MOHIT BENNIWAL certify that the Summer Internship Project Report entitled

“Marketing Research of Sony World” is an original one and has not been submitted to

any other Institution for the fulfillment of the requirement of a course of Management

Programme (BBA).

Place: _______________

Date: ____________

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Acknowledgement

“Acknowledgement are a bit like accepting speeches; predictable but from

the heart so here is some predictable prose direct from the heart.’’

A successful project can never be prepared by the single effort of the

person to whom project is assigned but it also demand the help and

guardianship of some conversant person who helped the undersigned activity

or passively in the completion of successful project . curiosity leads to

research, humans are curious by the nature .To satisfy his thirst for

knowledge, he goes on enquiring more and cooperation of other individual,

it is not possible to reach to any conclusion I would like to extend our

sincere gratitude towards MR. ANOOP KUMAR GUPTA under whose

guidance I undertook the project , for extending the advice and direction that

is required to carry on a study of this project, and for helping me with the

intricate detail of the every step of the way It is worthless if I do not pay my

sincere thanks to all faculty members for their positive co-operation to

complete my project in significant manner. This work is the result of the

direct and indirect co-operation of the various persons to whom we wish to

express our appreciation and gratitude. And lastly I would like to thanks to

the all my friends, my parents, my senior s, and all the person who have

helped me in completing my project

MOHIT BENIWAL

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EXECUTIVE SUMMARY

Possibly the most challenging concept in marketing deals with understanding why buyers

do what they do (or don’t do), but such knowledge is critical for marketers since having a

strong understanding of buyer behavior will help shed light on what is important to the

customer and also suggest the important influences on customer decision-making. Using

this information, marketers can create marketing programs that they believe will be of

interest to customers.

As you might guess, factors affecting how customers make decisions are extremely

complex. Buyer behavior is deeply rooted in psychology with dashes of sociology thrown

in just to make things more interesting. Since every person in the world is different, it is

impossible to have simple rules that explain how buying decisions are made. But those

who have spent many years analyzing customer activity have presented us with useful

“guidelines” in how someone decides whether or not to make a purchase.

However, buying behavior is not only a function of the product: it is also, and in some

cases perhaps more so, a function of the consumer, his social environment of other

consumers, the competing products in the marketplace, and the brand marketing strategy.

In order to design the best product, it is necessary to understand not just the physics and

chemistry of the product, but also the psychology of consumers and the sociology of

consumer groups or networks.

A customer's approach to purchasing a product or service is influenced by their situation -

whether they have money and how important, frequent, risky or urgent the purchase is to

them in their situation.

Imagine the difference between someone with plenty of money who can afford to make a

mistake when buying as opposed to someone who has scraped her last few pounds

together. They might both be buying the same product but their financial situation

suggests that their approach to buying will be very different.

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Customers make more of an effort, and become more involved, if the purchase is

relatively important to them - particularly if they have no previous experience of buying

such a product or service.

On the other hand, if the item being purchased is low value and frequently bought, like a

jar of coffee, it follows that the buyer will spend less time and effort and will have less

involvement with the purchase.

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TABLE OF CONTENTS

1. EXECUTIVE SUMMARY...................................................................................4

2. INTRODUCTION ................................................................................................6

3. INDUSTRY PROFILE........................................................................................10

4. COMPANY PROFILE........................................................................................19

5. RESEARCH OBJECTIVE & METHODOLOGY..............................................28

6. LITERATURE REVIEW....................................................................................29

7. PRIMARY FINDING AND ANALYSIS...........................................................51

8. RECOMMENDATIONS....................................................................................59

9. CONCLUSION & IMPLICATIONS..................................................................61

10. BIBLIOGRAPHY...............................................................................................63

11. COPY OF THE QUESTIONNAIRE..................................................................66

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INTRODUCTION

Marketing and sales departments carry out two separate functions; nevertheless, they

must interact closely with each other, as both are essential parts for the marketing

activities in each company. Each company has the goal to fulfill customer needs and also

to match the company’s sales target followed by financial success. In practice, the

working relationship between the sales and marketing functions is often described as

unsatisfactory, so that any improvement at the marketing and sales interface will have a

positive effect on top and bottom-line growth. So, in order to increase value for the

company it is essential to evaluate this interaction.

It has not only major impact on the generation of value for the company, but also on its

capabilities to adapt to the rapidly changing environment, as this requires active and

cross-functional teamwork, as well as even more focus on the customer. The body of

literature also suggests that implementing marketing as a strategic concept in all parts of

the company increases customer satisfaction which in turn leads to corporate success.

Marketing and sales have the overall common goal to understand customer needs and

solve customers’ problems better than the competition by offering superior value to

customers.

Therefore, in order to bring benefit to a company, marketing and sales should interact and

collaborate closely, so as to boost the overall business performance. Every company can

and should improve the relationship between sales and marketing” to bring about a great

positive impact on the company’s growth. In theory, marketing is often defined to include

sales, e.g. distribution being one of the 4Ps or 7Ps of the marketing-mix. In corporate

practice one can see all kind of structures involving marketing and sales usually as

separate entities. Here, sales assuming a dominant role in the organization in terms of

resource allocation. While the term ‘marketing’ being used for:

Product communication (including information material and merchandise) in

support of the sales force only. PR (‘Corporate Communication’) is usually one of

the core responsibilities of the CEO;

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Responsibility for product communication (‘Marketing Communication’) and

Business Development, i.e. identifying new market opportunities;

Responsibility for product communication, Business Development, and Product

Management (sometimes referred to as ‘Product Marketing’) with Pricing being

one of the responsibilities of Product Management (and sometimes also R&D);

Covering the role of Business Development and/or Product Management is often

combined with the responsibility for Market (Marketing) Research as well

As the terms marketing and sales are used in different ways, also the interaction between

the two functions raises a couple of questions which need to be addressed by marketing

researchers, e.g.: how can marketing and sales interaction best be organized? Is there an

ideal spread of marketing responsibility? What kind of processes need to be implemented

to assure a smooth co-operation between the two? Only recently, marketing and sales

interaction has gained more attention. Previously the academic focus was more on

marketing’s interaction with other functions such as R&D or finance, and researchers did

not differ between the marketing and sales functions at all.

This has changed recently, as in business reality they are mainly separate functions within

a company. Marketing and sales have different tasks within an organization and usually

have different goal orientations, an issue that has been recently addressed in

organizational research. There seems to be a lack of understanding as to what kinds of

processes are important for the marketing and sales relationship and how the two

functions can work together.

Sale Techniques:

The sale can be made through:

Direct Sales, involving person to person contact

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Buying Facilitation Method

Pro forma sales

Agency-based

sales agents (real estate, manufacturing)

Sales Outsourcing through direct branded representation

Transaction sales

Consultative sales

Complex sales

consignment

telemarketing or telesales

retail or consumer

Door-to-door or traveling salesperson

Request for Proposal is an invitation for suppliers, through a bidding process, to submit a

proposal on a specific product or service. An RFP is usually part of a complex sales

process, also known as enterprise sales. Business-to-business — Business-to-business

sales are much more relationship based owing to the lack of emotional attachment to the

products in question. Industrial/Professional Sales is selling from one business to another.

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INDUSTRY PROFILE

Overview of India’s Consumer Electronic Market:

The Indian consumer durables segment can be segregated into consumer electronics

(TVs, VCD players and audio systems etc.) and consumer appliances (also known as

white goods) like refrigerators, washing machines, air conditioners (A/Cs), microwave

ovens, vacuum cleaners and dishwashers.

Most of the segments in this sector are characterized by intense competition, emergence

of new companies (especially MNCs) and introduction of state-of-the-art models, price

discounts and exchange schemes. MNCs continue to dominate the Indian consumer

durable segment, which is apparent from the fact that these companies command more

than 65 per cent market share in the colour television (CTV) segment. In consonance

with the global trend, over the years, demand for consumer durables has increased with

rising income levels, double-income families, changing lifestyles, availability of credit,

increasing consumer awareness and introduction of new models. Products like air

conditioners are no longer perceived as luxury products.

Growth of Consumer Electronics Production in India

As more consumers grow comfortable with technology, companies need to build simpler

devices that offer more entertainment and convenience. These new machines need to

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work together readily, and should be as easy to set up and use as a telephone or a

television. Consumerization of technology could be a major phenomenon over the next 5

to 10 years. This could hasten industry consolidation, as healthy companies gain market

share by buying out weaker ones at attractive prices. Apart from steady income gains,

consumer financing has become a major driver in the consumer durables industry. In the

case of more expensive consumer goods, such as refrigerators, washing machines, colour

televisions and personal computers, retailers are joining forces with banks and finance

companies to market their goods more aggressively. Among department stores, other

factors that will support rising sales include a strong emphasis on retail technology,

loyalty schemes, private labels and the subletting of floor space in larger stores to smaller

retailers selling a variety of products and services, such as music and coffee.

Growth Scenario:

Rising disposable income and declining prices of durables have resulted in increased

volumes. An increase in disposable income is aided by an increase n the number of both

double-income and nuclear families. The market for consumer durables (including

entertainment electronics, communitarian and IT products) is estimated at Rs 32 billion

(US $7.1 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 2015. 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.

Opportunities and Potentialities:

The rising rate of growth of GDP, rising purchasing power of people with higher

propensity to consume with preference for sophisticated brands would provide constant

impetus to growth of white goods industry segment. Penetration of consumer durables

would be deeper in rural India if banks and financial institutions come out with liberal

incentive schemes for the white goods industry segment, growth in disposable income,

improving lifestyles, power availability, low running cost, and rise in temperatures.

While the consumer durables market is facing a slowdown due to saturation in the urban

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market, rural consumers should be provided with easily payable consumer finance

schemes and basic services, after sales services to suit the infrastructure and the existing

amenities like electricity, voltage etc. Currently, rural consumers purchase their durables

from the nearest towns, leading to increased expenses due to transportation. Purchase

necessarily done only during the harvest, festive and wedding seasons — April to June

and October to November in North India and October to February in the South, believed

to be months `good for buying’, should be converted to routine regular feature from the

seasonal character. Rural India that accounts for nearly 70% of the total number of

households, has a 2% penetration in case of refrigerators and 0.5% for washing machines,

offers plenty of scope and opportunities for the white goods industry. The urban

consumer durable market for products including TV is growing annually by 7 to 10 %

whereas the rural market is zooming ahead at around 25 % annually. According to survey

made by industry, the rural market is growing faster than the urban India now. The urban

market is a replacement and up gradation market now. The increasing popularity of easily

available consumer loans and the expansion of hire purchase schemes will give a moral

boost to the price-sensitive consumers. The attractive schemes of financial institutions

and commercial banks are increasingly becoming suitable for the consumer. Consumer

goods companies are themselves coming out with attractive financing schemes to

consumers through their extensive dealer network. This has a direct bearing on future

demand. The other factor for surging demand for consumer goods is the phenomenal

growth of media in India. The flurry of television channels and the rising penetration of

cinemas will continue to spread awareness of products in the remotest of markets. The

vigorous marketing efforts being made by the domestic majors will help the industry. It

will help to sustain the demand boom witnessed recently in this sector. The ability of

imports to compete is set to rise. However, the effective duty protection is still quite high

at about 35-40 per cent. So, a flood of imports is unlikely and would be rather need

based. Reduction in import duties may significantly lower prices of products such as

microwave ovens, whose market size is quite small in India. Otherwise, local

manufacturing will continue to stay competitive. At the same time, there will be some

positive benefits in the form of reduction in input costs. Washing machines and

refrigerators will also benefit from lower input costs.

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SWOT analysis of Industry:

Strengths:

Presence of established distribution networks in both urban and rural areas

Presence of well-known brands

In recent years, organized sector has increased its share in the market Vis a Vis

the unorganized sector.

Weaknesses:

Demand is seasonal and is high during festive season

Demand is dependent on good monsoons

Poor government spending on infrastructure

Low purchasing power of consumers

Opportunities:

In India, the penetration level of white goods is lower as compared to other

developing countries.

Unexploited rural market

Rapid urbanization

Increase in income levels, i.e. increase in purchasing power of consumers

Easy availability of finance

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Threats:

Higher import duties on raw materials imposed in the Budget 2007-08

Cheap imports from Singapore, China and other Asian countries

The key growth drivers for Indian consumer electronic industry are:

Rise in disposable income: The demand for consumer electronics has been rising

with the increase in disposable income coupled with more and more consumers

falling under the double income families. The growing Indian middle class is an

attraction for companies who are out there to woo them.

Availability of newer variants of a product: Consumers are spoilt for choice

when it comes to choosing products. Newer variants of a product will help a

company in getting the attention of consumers who look for innovation in

products.

Product pricing: The consumer durables industry is highly price sensitive,

making price the determining factor in increasing volumes, at least for lower

range consumers. For middle and upper range consumers, it is the brand name,

technology and product features that are important.

Availability of financing schemes: Availability of credit and the structure of the

loan determine the affordability of the product. Sale of a particular product is

determined by the cost of credit as much as the flexibility of the scheme.

Rise in the share of organized retail: Rise in organized retail will set the growth

pace of the Indian consumer durables industry. According to a working paper

released by the Indian Council for Research on International Economic Relations

(ICRIER), organized retail which constituted a mere four percent of the retail

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sector in FY07 is likely to grow at 45-50% per annum and quadruple its share in

the total retail pie 16% by 2011-2012. The share will grow with bigger players

entering the market.

Innovative advertising and brand promotion: Sales promotion measures such

as discounts, free gifts and exchange offers help a company in distinguishing

itself from others.

Festive season sales: Demand for color TVs usually pick up during the festive

seasons. As a result most companies come out with offers during this period to

cash in on the festive mood. This period will continue to be the growth driver for

consumer durable companies.

Major hurdles and challenges plaguing the Indian consumer durables sector:

Threat from new entrants, especially global companies: The domestic

consumer durables sector faces threat from newer companies, especially from

global ones who have technologically advanced products to offer.

Rivalry and competition: Presence of a large number of players in the domestic

consumer durables industry leads to competition and rivalry among companies.

Threat from rivalry and competition poses a threat to domestic companies.

Potential markets remaining yet untapped: A large segment of the domestic

market, mostly the rural market is yet to be tapped. Tapping this yet untapped and

unorganized market is a major challenge for the Indian consumer durables sector.

Threat from substitute products/services: The domestic consumer durables

industry is plagued by threats from substitute products. Easy accessibility to

theatres/multiplexes, especially in urban areas has turned off the viewership from

TV to a large extent. With the advent of a horde of FM radio stations, radio sets

have now substituted TVs.

Customer power with respect to availability of choice: The availability of a

wide product line on account of most products being homogeneous, poses a threat

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for companies operating in the consumer durables sector. Customers have the

choice of both domestically produced and imported goods, with similar features.

Industry Classification:

The consumer durable industry can be broadly classified as consumer electronics and

consumer appliance. The consumer appliances category can be further segmented as

white goods and brown goods.

Industrial Growth:

The industrial sector grew in moderation during FY08 at 8.5% on the back of a

comparatively higher growth of 11.5% during the previous fiscal. The country’s real

GDP grew by 9% during FY11; a tad lower than 9.6% in the previous fiscal. The

consumer durables segment witnessed a fall in production particularly for items where

consumer preferences have shifted towards newer products. Shifting in the consumption

pattern coupled with rising input costs of steel, iron ore etc, may further affect the

production levels of these goods. On the supply side newer variants of consumer durables

on the back of technological advancements have flooded the market, whereas on the

demand side it is the prospering middle class and consumerism which have led to

changing demand patterns.

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Consumer durables: Industry size, growth and trends:

During FY 12, volume share of consumer durables was as follows...

The consumer durable market in India was estimated to be around US $ 4.5 billion in

2009 — 07. More than 700 million units have been sold in the year 2010-2011. LCD

T.V. forming the bulk of the sales with 30% share of volume. LCD TV, refrigerator and

Air conditioner together constitute more than 60 % of the sales in terms of the number of

units sold. The LCD TV production was 15.10 million units in 2010-2011 and is expected

to grow by at least 25 %. At the disaggregated level conventional LCD TV volumes have

been falling while flat TV’s have grown strongly. The flat segment of the LCD TV now

accounts for more than 60% of the total domestic LCD TV production High end products

such as Liquid crystal display ( LCD), and plasma display TV grew by 400 % and 150 %

respectively in 06-07 with sharp decline in the price of these products.

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Now let’s see who all the market players in this color T.V. segment are.

LCD TV Company and relative market share table and pie chart...

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COMPANY PROFILE

Sony India Pvt. Ltd., based in New Delhi, is the Indian subsidiary of Japan's

Sony corporation, headquartered in Tokyo.

Sony's principal Indian businesses include Marketing, Sales and After-Sales Service of

electronic products & software exports Products: LCD Televisions, Video and Digital

Still Cameras, Notebooks and Business Projectors, Personal Audio, Audio Video

Accessories, Hi-fi Audios and Home Theater systems, Car Audio and Visual Systems,

Game Consoles, Mobile Phones, Recording Media and Energy Devices, Broadcast and

Professional products. 

In India, Sony has its footprint across all major towns and cities in the country through a

distribution network of over 10,400 dealers and distributors, 270 exclusive Sony outlets

and 23 direct branch locations. Moreover, Sony's 19 sales branches cover a total of 450

cities. It has also developed a network of 270 Sony Center and established 30 warehouses

across the country to manage it's supply chain effectively.

Sony Corporation is a multinational conglomerate corporation headquartered in Minato,

Tokyo, Japan, and one of the world's largest media conglomerates with revenue

exceeding ¥ 7.730.0 trillion, or $78.88 billion U.S. (FY2008). Sony is one of the leading

manufacturers of electronics, video, communications, video game consoles, and

information technology products for the consumer and professional markets. Its founders

Akio Morita and Masaru Ibuka derived the name from sonus, the Latin word for sound,

and also from the English slang word 'sonny', since they considered themselves to be

'sonny boys', a loan word into Japanese which in the early 1950s connoted smart and

presentable young men.

Sony Corporation is the electronics business unit and the parent company of the Sony

Group, which is engaged in business through its five operating segments – electronics,

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games, entertainment (motion pictures and music), financial services and other. These

make Sony one of the most comprehensive entertainment companies in the world. Sony's

principal business operations include Sony Corporation (Sony Electronics in the U.S.),

Sony Pictures Entertainment, Sony Computer Entertainment, Sony Music Entertainment,

Sony Ericsson, and Sony Financial. As a semiconductor maker, Sony is among the

Worldwide Top 20 Semiconductor Sales Leaders. The company's current slogan is

make.believe. Their former slogan was like.no.other.

History:

In late 1945, after the end of World War II, Masaru Ibuka started a radio repair shop in a

bomb-damaged department store building in Nihonbashi of Tokyo. The next year, he was

joined by his colleague, Akio Morita, and they founded a company called Tokyo Tsushin

Kogyo K.K., (Tokyo Telecommunications Engineering Corporation). The company built

Japan's first tape recorder called the Type-G.

In the early 1950s, Ibuka traveled in the United States and heard about Bell Labs'

invention of the transistor. He convinced Bell to license the transistor technology to his

Japanese company. While most American companies were researching the transistor for

its military applications, Ibuka and Morita looked to apply it to communications.

Although the American companies Regency and Texas Instruments built the first

transistor radios, it was Ibuka's company that made them commercially successful for the

first time.

In August 1955, Tokyo Tsushin Kogyo released the Sony TR-55, Japan's first

commercially produced transistor radio. They followed up in December of the same year

by releasing the Sony TR-72, a product that won favor both within Japan and in export

markets, including Canada, Australia, the Netherlands and Germany. Featuring six

transistors, push-pull output and greatly improved sound quality, the TR-72 continued to

be a popular seller into the early sixties.

In May 1956, the company released the TR-6, which featured an innovative slim design

and sound quality capable of rivaling portable tube radios. It was for the TR-6 that Sony

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first contracted "Atchan", a cartoon character created by Fuyuhiko Okabe, to become its

advertising character. Now known as "Sony Boy", the character first appeared in a

cartoon ad holding a TR-6 to his ear, but went on to represent the company in ads for a

variety of products well into the mid-sixties. The following year, 1957, Tokyo Tsushin

Kogyo came out with the TR-63 model, then the smallest (112 × 71 × 32 mm) transistor

radio in commercial production. It was a worldwide commercial success.

University of Arizona professor Michael Brian Schiffer, Ph.D., says, "Sony was not first,

but its transistor radio was the most successful. The TR-63 of 1957 cracked open the U.S.

market and launched the new industry of consumer microelectronics." By the mid 1950s,

American teens had begun buying portable transistor radios in huge numbers, helping to

propel the fledgling industry from an estimated 100,000 units in 1955 to 5,000,000 units

by the end of 1968.

Sony's headquarters moved to Minato, Tokyo from Shinagawa, Tokyo around the end of

2006.

Origin of name:

When Tokyo Tsushin Kogyo was looking for a romanized name to use to market

themselves, they strongly considered using their initials, TTK. The primary reason they

did not is that the railway company Tokyo Kyuko was known as TKK. The company

occasionally used the acronym "Totsuko" in Japan, but during his visit to the United

States, Morita discovered that Americans had trouble pronouncing that name. Another

early name that was tried out for a while was "Tokyo Teletech" until Morita discovered

that there was an American company already using Teletech as a brand name. The name

"Sony" was chosen for the brand as a mix of two words. One was the Latin word Sonus

which is the root of "sonic" and "sound" and the other was "sonny," a familiar term used

in 1950s America to call a boy. The first Sony-branded product, the TR-55 transistor

radio, appeared in 1955 but the company name didn't change to Sony until January 1958.

At the time of the change, it was extremely unusual for a Japanese company to use

Roman letters instead of kanji to spell its name. The move was not without opposition:

TTK's principal bank at the time, Mitsui, had strong feelings about the name. They

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pushed for a name such as Sony Electronic Industries, or Sony Teletech. Akio Morita was

firm, however, as he did not want the company name tied to any particular industry.

Eventually, both Ibuka and Mitsui Bank's chairman gave their approval.

Products, technologies and proprietary formats:

Sony has historically been notable for creating its own in-house standards for new

recording and storage technologies, instead of adopting those of other manufacturers and

standards bodies. The most infamous of these was the videotape format war of the early

1980s, when Sony marketed the Betamax system for video cassette recorders against the

VHS format developed by JVC. In the end, VHS gained critical mass in the marketplace

and became the worldwide standard for consumer VCRs and Sony adopted the format.

While Betamax is for all practical purposes an obsolete format, a professional-oriented

component video format called Betacam that was derived from Betamax is still used

today, especially in the film and television industry.

In 1968 Sony introduced the Trinitron brand name for its line of aperture grille cathode

ray tube televisions and (later) computer monitors. Trinitron displays are still produced,

but only for markets such as Pakistan, Bangladesh, India and China. Sony discontinued

the last Trinitron-based television set in the USA in early 2007. Trinitron computer

monitors were discontinued in 2005.

Sony launched the Betamax videocassette recording format in 1975. In 1979 the

Walkman brand was introduced, in the form of the world's first portable music player.

1982 saw the launch of Sony's professional Betacam videotape format and the

collaborative Compact Disc format. In 1983 Sony introduced 90 mm micro diskettes

(better known as 3.5-inch (89 mm) floppy disks), which it had developed at a time when

there were 4" floppy disks and a lot of variations from different companies to replace the

then on-going 5.25" floppy disks. Sony had great success and the format became

dominant; 3.5" floppy disks gradually became obsolete as they were replaced by current

media formats. In 1983 Sony launched the MSX, a home computer system, and

introduced the world (with their counterpart Philips) to the Compact Disc or CD. In 1984

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Sony launched the Discman series which extended their Walkman brand to portable CD

products. In 1985 Sony launched their Handycam products and the Video8 format.

Video8 and the follow-on hi-band Hi8 format became popular in the consumer camcorder

market. In 1987 Sony launched the 4 mm DAT or Digital Audio Tape as a new digital

audio tape standard.

In addition to developing consumer-based recording media, after the launch of the CD

Sony began development of commercially based recording media. In 1986 they launched

Write-Once optical discs (WO) and in 1988 launched Magneto-optical discs which were

around 125MB size for the specific use of archival data storage.

In the early 1990s two high-density optical storage standards were being developed: one

was the MultiMedia Compact Disc (MMCD), backed by Philips and Sony, and the other

was the Super Density disc (SD), supported by Toshiba and many others. Philips and

Sony abandoned their MMCD format and agreed upon Toshiba's SD format with only

one modification based on MMCD technology, viz EFMPlus. The unified disc format

was called DVD which was marketed in 1997.

Sony introduced the MiniDisc format in 1993 as an alternative to Philips DCC or Digital

Compact Cassette. Since the introduction of MiniDisc, Sony has attempted to promote its

own audio compression technologies under the ATRAC brand, against the more widely

used MP3. Until late 2004, Sony's Network Walkman line of digital portable music

players did not support the MP3 de facto standard natively, although the provided

software SonicStage would convert MP3 files into the ATRAC or ATRAC3 formats.

In 1993, Sony challenged the industry standard Dolby Digital 5.1 surround sound format

with a newer and more advanced proprietary motion picture digital audio format called

SDDS (Sony Dynamic Digital Sound). This format employed eight channels (7.1) of

audio opposed to just six used in Dolby Digital 5.1 at the time. Unlike Dolby Digital,

SDDS utilized a method of backup by having mirrored arrays of bits on both sides of the

film which acted as a measure of reliability in case the film was partially damaged.

Ultimately, SDDS has been vastly overshadowed by the preferred DTS (Digital Theatre

System) and Dolby Digital standards in the motion picture industry. SDDS was solely

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developed for use in the theatre circuit; Sony never intended to develop a home theatre

version of SDDS.

In 1998, Sony launched their Memory Stick format; flash memory cards for use in Sony

lines of digital cameras and portable music players. It has seen little support outside of

Sony's own products with Secure Digital cards (SD) commanding considerably greater

popularity . This is due in part to the SD format's greater throughput (which allows faster

devices), higher capacities, and significantly lower price per unit capacity compared to

Memory Sticks available at the same time. Sony has made updates to the Memory Stick

format with Memory Stick Duo and Memory Stick Micro.

Sony and Philips jointly developed the Sony-Philips digital interface format (S/PDIF) and

the high-fidelity audio system SACD. The latter has since been entrenched in a format

war with DVD-Audio. At present, neither has gained a major foothold with the general

public. CDs are preferred by consumers because of ubiquitous presence of CD drives in

consumer devices.

In 1994 Sony launched the PlayStation (later PS one). This successful console was

succeeded by the PlayStation 2 in 2000, itself succeeded by the PlayStation 3 in 2006.

The PlayStation 2 has become the most successful video game console of all time. It has

sold a total of over 140 million units and still going. The PlayStation brand was extended

to the portable games market in 2005 by the PlayStation Portable (PSP) and in 2009, the

PSP go. Sony developed the Universal Media Disc (UMD) optical disc medium for use

on the PlayStation Portable. Although Sony tried to push the UMD format for movies,

major-studio support for the format was cut back in spring 2006, though as of 2009 some

major-studio titles continue to be released on UMD.

In 2004, Sony built upon the MiniDisc format by releasing Hi-MD. Hi-MD allows the

playback and recording of audio on newly-introduced 1 GB Hi-MD discs in addition to

playback and recording on regular MiniDiscs. Recordings on the Hi-MD Walkmans can

be transferred to and from the computer virtually unrestricted, unlike earlier NetMD. In

addition to saving audio on the discs, Hi-MD allows the storage of computer files such as

documents, videos and photos. Hi-MD introduced the ability to record CD-quality audio

24

with a linear PCM recording feature. It was the first time since MiniDisc's introduction in

1992 that the ATRAC codec could be bypassed and lossless CD-quality audio could be

recorded on the small discs.

Sony was one of the leading developers and remains one of the strongest proponents of

the Blu-ray Disc optical disc format, which eventually emerged as the market leader over

the competing standard, Toshiba's HD DVD, after a 2 year-long format war. The first

Blu-ray players became commercially available in June 2006, and Sony's first Blu-ray

player, the Sony BDP-S1, debuted in December 2006 with an MSRP of US $999.95. By

the end of 2007 the format had the backing of every major motion picture studio except

Universal, Paramount, and Dreamworks. The Blu-ray format's popularity continued to

increase, solidifying its position as the dominant HD media format, and Toshiba

announced its decision to stop supporting HD DVD on 19 February 2008.

On 10 September 2007 Sony unveiled Rolly, an egg-shaped digital robotic music player

which has colour lights that flash as it “dances” and has flapping wings that can twist to

its tunes. Movements along with the music downloaded from personal computers and

Bluetooth can be set. Rolly, which went on sale in Japan on 29 September 2007, has one

gigabyte of memory to store tunes. Sony also developed dog-shaped robots called AIBO

and humanoids and QRIO.

Manufacturing Base:

Slightly more than 50% of the electronics' segment's total annual production during the

fiscal year 2005 took place in Japan, including the production of digital cameras, video

cameras, flat panel televisions, personal computers, semiconductors and components such

as batteries and Memory Sticks. Approximately 65% of the annual production in Japan

was destined for other regions. China accounted for slightly more than 10% of total

annual production, approximately 70% of which was destined for other regions.

Asia, excluding Japan and China, accounted for slightly more than 10% of total annual

production with approximately 60% destined for Japan, the US and the EU. The

25

Americas and Europe together accounted for the remaining slightly less than 25% of total

annual production, most of which was destined for local distribution and sale.

Sony's Sales and Distribution by Geographical Regions in 2009

Geographic Region Total Sales ( Yen in millions)

Japan 1,873,219

United States 1,827,812

Europe 2,307,658

Other Area 2,041,270

Global slowdown affects this year, Sony Corp suffered its first annual loss in 14 years

and could be grimmer in upcoming years too. On 9 December 2008, Sony Corp. said it

will cut 8,000 jobs, drop 8,000 contractors and reduce its global manufacturing sites by

10% to save $1.1 billion a year

Sony has received numerous awards and much recognition for their environmental efforts

throughout the world. Their achievements in the way of energy and environmental

conservation have earned them respect for their green campaign despite bad press from a

low ranking on Greenpeace's greener electronics report.

Improvement efforts

Since 1976, Sony has had an Environmental Conference. Sony's policies address their

effects on global warming, the environment, and resources. They are taking steps to

reduce the amount of greenhouse gases that they put out as well as regulating the

products they get from their suppliers in a process that they call "green

procurement".Sony has said that they have signed on to have about 75 percent of their

Sony Building running on geothermal power. The "Sony Take Back Recycling Program"

allows consumers to recycle the electronics products that they buy from Sony by taking

them to eCycle (Recycling) drop-off points around the U.S. The company has also

26

developed a biobattery that runs on sugars and carbohydrates that works similarly to the

way living creatures work. This is the most powerful small biobattery to date.

Green TV

For sale in Japan on 30 July 2008, Sony's green product, new flat-panel 32-inch

(810 mm) TV 150,000 yen (US$ 1,400; € 900) Bravia KDL-32JE1 offers ecological

consumers advantages of less energy consumption (70% less) than regular models with

the same image quality. Sony was able to reduce carbon dioxide emissions totaling 79

kilograms (174 pounds) a year, without sacrificing quality by developing a brighter back

light and better filtering, which produces light more efficiently. The TVs will have liquid

crystal displays along with high-definition digital broadcast capabilities.

Criticism

In 2000, Sony was ridiculed for a document entitled "NGO Strategy" that was leaked to

the press. The document involved the company's surveillance of environmental activists

in an attempt to plan how to counter their movements. It specifically mentioned

environmental groups that were trying to pass laws that held electronics-producing

companies responsible for the clean up of the toxic chemicals contained in their

merchandise. In early July 2007, Sony ranked 14th on the Greenpeace chart "Guide to

Greener Electronics." This chart graded major electronics companies on their

environmental work. Sony fell from its earlier 11th place ranking due to Greenpeace's

claims that Sony had double standards in their waste policies.

In 2005, it was made public that the videogame Full Spectrum Warrior, developed by

Sony Pictures Imageworks and Pandemic Studios, was paid for in whole by the United

States Department of Defense, for use as an urban combat trainer. Not only was the

simulation never used as intended, but the Army lost its full investment while Pandemic

Studios went on to release the simulation, now an entertainment game, through THQ and

it became a success. The wisdom of the Army's contract with both Sony and Pandemic

was questioned in the press at the time.

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RESEARCH OBJECTIVE AND METHODOLOGY

OBJECTIVE:

To analyze the factors influencing the customers to choose a sony.

To know the customers view towards sony

To understand the customer like and dislike about the sony

RESEARCH METHODOLOGY:

Secondary data:    Company website, newspaper, magazines, books, articles and online

journals

Primary data: It will be collected through questionnaire survey.

Tool Used: A Structured Questionnaire will be used

Sampling Method: Random Sampling Method

Sample Size: 100

Target Audience: Marketers

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LITERATURE REVIEW

Why do customers buy?

What goes on inside a customer's mind before, during and after a purchase? How do

buyers choose? What are the hidden influences? How do buyers process information?

Unlocking these secrets opens the door to success.

Why buy a Coca-Cola? Is it because of thirst? Why buy Levi's jeans? Is it to avoid

hypothermia, or to conform to a social norm? Or do some brands offer other benefits -

emotional benefits? Are there hidden reasons?

Let's look at the other side. What do the advertisers promise? That Coca Cola will quench

your thirst or Levi's will keep your legs warm? Perhaps they appeal to other desires?

Look at the advertisements. Try to summarise exactly what you think they are saying.

This takes practice. Summarising advertisements is a skill which top marketing people

develop. It may give you an insight into society, its values and aspirations; that is, if you

believe that advertising reflects society.

We are not perfectly rational, sensible buyers. We do not always choose goods and

services solely on price, performance and availability. The truth is that many purchases

are influenced by a whole host of emotional reasons like esteem and image. Many of

these non-rational reasons are hidden deep in our subconscious.

In-depth research probes into the darker depths of our unconscious. Some research

presents such bizarre explanations that many marketers reject the findings. For example,

Ernest Dichter's 1964 handbook of motivations suggested that men buy open-top/

convertible cars as substitute mistresses! But even today, top companies use in-depth

research techniques to discover the hidden reasons why we buy or don't buy.

Common sense observation also provides useful insights into the minds of buyers.

Research helps find the real reasons why we buy what we buy. This requires time, money

and expertise. Surprisingly many other organisations don't really know exactly why their

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customers buy or don't buy from them. Yet understanding customers is at the heart of

marketing.

Once the reasons why people buy or don't buy are discovered, the marketing mix can be

changed to suit the buyer's needs and wants.

Buyer behaviour involves both simple and complex mental processes. Marketers cannot

capture human nature in its entirety but we can learn a lot about customers through

research, observation and thinking. Here's Professor Theodore Levitt:

I think it is a process of trying to think your way through why people behave in certain

ways. Or if not why, then what that behavior is likely to be given certain kinds of

products, certain kinds of... just stop to think.

Types of Consumer Buying Situation

A customer's approach to purchasing a product or service is influenced by their situation -

whether they have money and how important, frequent, risky or urgent the purchase is to

them in their situation. Imagine the difference between someone with plenty of money

who can afford to make a mistake when buying as opposed to someone who has scraped

her last few pounds together. They might both be buying the same product but their

financial situation suggests that their approach to buying will be very different.

Customers make more of an effort, and become more involved, if the purchase is

relatively important to them - particularly if they have no previous experience of buying

such a product or service. On the other hand, if the item being purchased is low value and

frequently bought, like a jar of coffee, it follows that the buyer will spend less time and

effort and will have less involvement with the purchase.

These frequent, inexpensive purchases generally have little risk, and require less

information. These kind of purchase situations are referred to as 'Low Involvement

Purchases'. In these situations, consumers can fall into a routine purchasing pattern which

requires little thought and even less effort.

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Whenever the need is stimulated - a particular brand is automatically purchased. This is

called 'Reutilized Response Behavior.' You can visit the Hall Of Fame later to see the

gurus explain how brands influence routine purchases.

Alternatively, an expensive high risk infrequent purchase like your first computer will

require a lot of detailed information and careful analysis before deciding which machine.

This is called 'High Involvement'. Here the consumer goes through an extensive problem

solving process - searching and collecting information, evaluating it and eventually

deciding on a particular choice.

There is a third type of buying situation. This is where the customer has had some

experience of buying a particular type of product or service before. There is less risk

attached and less information is required. This is called 'Limited Problem Solving'.

Customers require different marketing mixes in different buying situations. For example,

a routinised response purchase, like a can of cola, doesn't require much supporting

product literature but perhaps it needs wide distribution and easy availability. An

extensive problem solving Type of Purchase, on the other hand, would require detailed

product literature and trained sales people.

Time also affects the buying situation. If a purchase is urgent the purchasing pattern will

be different from another situation where there is more time available. For example, the

decision to call a plumber to install a new shower is different from calling a plumber to

stop a leaking pipe!

To summaries, the three types of consumer buying situation can be put onto a problem

solving continuum.

Stages of the Consumer Buying Process

Six Stages to the Consumer Buying Decision Process (For complex decisions). Actual

purchasing is only one stage of the process. Not all decision processes lead to a purchase.

All consumer decisions do not always include all 6 stages, determined by the degree of

complexity...discussed next.

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The 6 stages are:

Problem Recognition (awareness of need)--difference between the desired state and the

actual condition. Deficit in assortment of products Hunger--Food Hunger stimulates your

need to eat.

Can be stimulated by the marketer through product information--did not know you were

deficient? I.E., see a commercial for a new pair of shoes, stimulates your recognition that

you need a new pair of shoes.

Information search--

Internal search, memory.

External search if you need more information. Friends and relatives (word of

mouth). Marketer dominated sources; comparison shopping; public sources etc.

A successful information search leaves a buyer with possible alternatives, the evoked set.

Hungry, want to go out and eat, evoked set is

chinese food

Indian food

burger king

Klondike kates etc

Evaluation of Alternatives--need to establish criteria for evaluation, features the buyer

wants or does not want. Rank/weight alternatives or resume search. May decide that you

want to eat something spicy, Indian gets highest rank etc. If not satisfied with your

choices then return to the search phase. Can you think of another restaurant? Look in the

yellow pages etc. Information from different sources may be treated differently.

Marketers try to influence by "framing" alternatives.

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Purchase decision--Choose buying alternative, includes product, package, store, method

of purchase etc.

Purchase--May differ from decision, time lapse between 4 & 5, product availability.

Post-Purchase Evaluation--outcome: Satisfaction or Dissatisfaction. Cognitive

Dissonance, have you made the right decision. This can be reduced by warranties, after

sales communication etc.

After eating an indian meal, may think that really you wanted a Chinese meal instead.

Consumer Behavior

Consumer’s balancing between choices alternatives has been extensively studied in the

literature. Companies should be aware of the real signals and cues that are being used by

their consumers. Their cognitive maps make part of a more holistic context, in which they

face many complementary and competitive product settings, experiences and

social/cultural trends. This conceptual paper extended with examples and an empirical

study shows that consumers’ knowledge structures and cognitive maps may be totally

different from the company’s initial point of view. Competition among alternatives may

not be about new marketing mix related dimensions, but also about reinterpreted old

dimensions (within the consumer’s specific context). Moreover, marketing mix

instruments are strongly interrelated in the consumer’s mind. This implies that product;

price, communication and distribution efforts no longer can be treated as separate

elements of the marketing mix, as often presented in marketing plans. Instead they should

be integrated in “one marketing concept” that is based on all associations characterizing

consumers’ cognitive maps. Finally, the empirical study shows that lack of authenticity,

consistency and simplicity are three important drivers of cognitive discrepancies between

the company and the consumer.

Knowing why consumers truly buy is a hot topic.

Lindstrom (2008) even talks about the new discipline “buyology”. Moreover, consumer’s

balancing between choice alternatives has been extensively studied in the literature. The

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introduction of a new product alternative will often alter the consumers’ reference

framework. To learn about a new product, consumers will rely on their existing

knowledge from a familiar domain. This may imply that consumers with different

product knowledge will respond differently to new products. They illustrate this with the

digital camera. They find that consumers having limited camera knowledge, but

extensive computer knowledge are the most likely to purchase a digital camera, whereas

those having camera knowledge, but limited computer knowledge, are the least likely to

adopt it. They find that increasing the number of features of product alternatives may not

only lead to a capability gain, but also to a usability loss, because of increased

complexity. As complexity increases, consumers have to be convinced by the extra value

of the new product alternative, in order to be willing to buy the product. The complexity

level may be related to the number, order and interdependence/interaction of the various

subsystems (components and features at a lower level). As defined in Gatignon et al.

(2002) core subsystems are those that are tightly coupled to other subsystems. Peripheral

subsystems on the other hand, are weakly related. An innovation may involve a change in

the subsystems (general innovation) or in the linkages (architectural innovation). The

more subsystems make up the product, the more it may be dependent on new trends for

each of these subsystems and hence complicate a consumer’s purchase decision. The

more (fewer) linkages, the less (more) easily the innovation can be imitated by others.

For instance, modular architectures in the IT industry (decreasing the number of separate

linkages) increase the entry of imitators. Another important issue in analyzing consumers

facing product complexity is their bounded rationality, indicating that they have to

evaluate new products in a rapidly changing context with imperfect knowledge and

uncertainty about the future. Besides minimum threshold effects there may also be

maximum threshold effects for consumers, indicating that companies can over perform.

There may even be an installed base effect, which is the effect of an existing technology

that tends to preclude or slow down the adoption of a superseding technology or product.

These effects may be highly dependent on the customer profile. For instance, lead users

or innovators may be more motivated to innovate or experience new needs than the

majority of the target market. Resistance may occur in particular when characteristics of

the new product imply a change in behavior (more actions or more complicated actions to

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be performed by the customer). They also found that changes in consumption patterns are

“key factors” in affecting the customer’s evaluation of new products. The adoption of

new products can be explained by its relative advantage, compatibility, complexity, trial

ability and observability. In terms of observability, a key question however remains what

product related cues are being used by the consumers and how they are being processed

within their mental minds.

The real cognitive maps and knowledge structures of consumers

Companies should be aware of the real signals and cues that are being used by their

consumers such as indicators of quality and price. Consumers may infer a positive

correlation between the observed quality of a new feature and

Company perspective

It may also change the relational property schemes that are well-known in the literature.

According to the principle of regularity a non preferred alternative (for example, x

compared to y) cannot become preferred when new alternatives (for example, z) become

available. This implies: if y is chosen from the set (x, y) then one would expect that x

should not be chosen from the set (x, y, z). However, according to the decoy effect

theory, the introduction of a new alternative (a decoy), which is dominated (on a certain

dimension) by at least one of the original alternatives, may alter the preferences among

the original competing alternatives. This implies: If y is chosen from the set (x, y), based

on dimension a, then it is possible that x is chosen from the set (x, y, z), based on the

unobserved quality of the base product. It gives the example of a European battery

35

supplier, who noticed that its high tech/high-priced batteries showed nice sales results.

Believing that high-tech users were driving demand, the company started placing display

racks that describe the battery’s benefits for high tech applications such as in digital

devices. Unexpectedly, sales began to fell. It turned out that many users had bought these

high-tech/high priced batteries for another reason, believing that these batteries lasted

longer, and independent of the application. The fact that digital devices were mentioned

specifically now in the communication (displays), had an opposite effect on some users

looking for long-lasting batteries in all applications and not looking for batteries in

specific applications (from their perspective). This example shows that insight in

consumers’ knowledge structures and cognitive maps remains an essential part of

marketing, as the structures and maps may be totally different from the company’s initial

point of view

another dimension b that comes into the consumer’s consideration set (after the

introduction of z). The battery example shows that the new dimension b introduced by

the new alternative (in our example: high-tech dimension), may alter the perception

towards an old dimension a (in our example: durability). Therefore, competition among

alternatives may not only be about the new dimension, but also about a “reinterpreted”

old dimension. This extends the previous decoy theory. Moreover, consumers’ product

perceptions and preferences make part of a more holistic context, in which consumers

face many complementary and competitive product settings, experiences and

social/cultural trends.

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Holistic reference framework of customers

For instance, that consumers visit multiple retail stores to take advantage of two types of

store complementarity: i to balance transportation and handling costs against acquisition

costs (which all make part of the customer’s experience); i and/or to choose the best

value for different product categories in different stores. Moreover, today’s consumer

may choose the most expensive brand within a product category (not being very price

sensitive within that product category within the store), but expecting to buy the same

brand cheaper compared to competitive stores (hence being price sensitive from a

competitive point of view). It shows that in today’s competitive context, all marketing

mix related instruments are clearly interrelated in the consumer’s mind.

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The reasons of change in purchase behavior

These four categories show that there may be a discrepancy between the company’s

cognitive maps (reasoning) and that of the consumer, due to reasons related to brand

history, authenticity, complexity and inconsistency. The remaining (quite obvious)

reasons for leaving the brand or brand variety were: “better competitive offer”, “time for

a change (looking for variety)”, “bad service” and “price too high”.

Contributions of Psychology to Consumer Behavior

Identifying Parental Styles

For over seventy years child development psychologists have attempted to systematically

analyze the nature of parent-child interactions. Their preoccupation has been with the

consequences of these interactions on personality development of children. Early studies

which focused on disciplinary techniques have given way to examination of a broader

range of child rearing practices. In 1959, Schaefer noted the development of two

contrasting approaches to the study of parental behavior. One approach, typified by the

research of Sears, Macoby, and Levin (1957) analyzed molecular variables relating to

socialization of specific systems of behavior (e.g., oral, anal, sexual, etc.). A second

approach treated parental behavior in terms of molar social and emotional interactions.

38

This second approach, with its reliance on standardized measurement instruments, large

samples and multi-variate statistical procedures, has dominated the field since 1959.

Over the last two decades, researchers have made an effort to develop a parsimonious

model of parent-child relations. The method most commonly used involves factor

analysis of one of the parent-child relations instruments. Across studies, two orthogonal

dimensions have consistently emerged. These have been labeled the interpersonal

support/love axis and the authority/power axis.

Schaefer argues for a three, rather than two, dimensional representation of parent-child

relations, with the authority/power axis differentiated into psychological autonomy versus

psychological control and firm control versus lax control dimensions. Recent empirical

evidence supports a three dimensional configuration conceptualization is similar to

Schaefer's and also employs three dimensions: one pertaining to love/nurturance and two

to power/control. Becker, however, subdivides control into restrictiveness versus

permissiveness and anxious-emotional involvement versus calm detachment. The extent

to which Becker's and Schaefer's models describe the same conceptual space has never

been determined. The fact that these models employ different dimensions may simply

reflect "...differences in the labeling of identical factors or may indicate that neighboring

and overlapping sectors of the conceptual space emerged as factors because of different

samples of parent behavior".

Parent styles associated with the warm end of the warmth-hostility dimension tend to be

more accepting, understanding, and child-centered and make more frequent use of

explanations and reasons in discipline. Styles at the restrictive end of the restrictive-

permissive dimension place more restrictions on the child's behavior and tend to be firm

in enforcement of rules. Parent styles associated with the anxious end of the anxious-

emotional involvement-calm detachment dimension evidence high emotionality in child

relations and may baby and overprotect the child.

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Linkage to Personality

It appears that certain psychotic disorders are associated with the same psychotic disorder

in the parent. It is also known that authoritarian parents tend to have authoritarian

offspring. There is only limited, recent research of a longitudinal nature linking specific

parental styles to development of personality traits in the "normal" adult. There is ample

evidence, however, which links patterns of family relations to the personality

development of children and teenagers. Accepting the premise that personality is basic,

enduring, and formed relatively early in life, these effects might be expected to carry over

into adulthood. Similar results are found in other studies.

Application to Consumer Behavior

More important than the specific conclusions of this research on parent-child relations

and personality, is the manner in which it has contributed to the development of

personality theory. This approach could be easily adapted in the consumer behavior field,

given the interest that already exists regarding children's socialization as consumers.

Unfortunately, the literature on this subject is quite fragmented and needs a unifying

framework.

In terms of future research, initial efforts might be aimed at clarifying the structure of

parent-child interactions on consumption matters. Efforts to date have concentrated more

on the content than the structure of these interactions, although the latter may be more

important to personality development. There are 2 needs to catalog and classify the

multitude of ways that parents and children interact over consumption. Families then

need to be observed in situ, taking a representative sampling of their behaviors, with

measurements obtained on a wide variety of interaction variables. This would be

followed by attempts at data reduction. As Myers notes (1974), "theory development in

the behavioral sciences often begins with an attempt to locate fundamental axes or

dimensions as the basis for a framework for the representation of the behavioral unit."

The behavioral unit in this case is either the family or parent-child dyad.

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However, when the relevant space is found, it would be appropriate to examine the

distribution of families in that space with the goal of identifying clusters of parenting

styles or family environments (vis-a-vis consumption).

Involvement: Origins in Social Psychology

Involvement originates from social psychology and specifically from the persuasive

communication literature, where the social judgement-involvement approach has been

used to explain attitude and attitude change. Social judgement theory, which considers

how individuals judge received messages, is based on three attitude scales: the latitude of

acceptance, the latitude of rejection and the latitude of non-commitment (Sherif, et al.,

1965). For an individual to accept a position and change their attitude there must be a

discrepancy between the message and that person’s own position. The notion of ‘ego-

involvement’, which refers to the relationship between an individual and a social issue,

has been argued to systematically affect the structure of the three judgmental latitudes.

For example, highly involved individuals with wider latitudes of rejection (and smaller

acceptance and non-commitment latitudes), are not susceptible to persuasive

communication. The opposite is true for individuals with low involvement, who have

wider latitudes of acceptance and are therefore highly receptive In social psychology,

‘ego involvement’ refers to the centrality or importance of a social issue in a person’s

life. It is defined as “arousal singularly on, in combination of the individuals’

commitment or stands in the context of appropriate situations”. Thus a person is said to

be ‘ego involved’ when their position on an issue is intrinsically significant or central to

their self-identify or when a person is strongly committed to a position. In this respect,

ego involvement entails the elements of centrality, importance and commitment.

According to this conceptualization, ego involvement is seen as synonymous with

commitment and related to extremity, although the preferred position is that the three are

distinct concepts. For example, an individual may be committed to a position on a social

issue, or even take an extreme stand without necessarily being highly involved. However,

social judgement theory proposes that position extremity is positively correlated with ego

involvement in that extreme positions tend to be ego involving This conceptualization of

involvement has been the basis for applying and treating involvement in marketing,

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particularly in the consumer behavior domain. As involvement is viewed as a

hypothetical or speculative concept, its conceptualization comes from social psychology

theory, in which it is grounded. However, the variation in nature, content, definitions and

nomology of involvement in social psychology, has complicated the construct’s

application in marketing and particularly consumer behavior. As a consequence, the

problems and confusion surrounding involvement in social psychology have been

transferred to the marketing domain. Social psychologists have examined involvement in

the context of persuasive communication addressing its ‘attitude object’, as a social issue

(e.g. involvement with health and safety). However, its application in consumer behavior

focuses on examining involvement in a broader context to include different aspects of

behavior and various attitude objects. For example, product involvement, purchasing

involvement, purchasing-decision involvement, brand involvement task involvement,

issue involvement, service involvement and advertising involvement. This practice has

resulted in a number of relatively ‘new’ definitions or conceptualizations and

measurements which have aggravated the confusion in understanding involvement in the

marketing context. Thus, involvement has been seen as overlapping with similar concepts

such as commitment, importance, proneness and cognitive effort. For example, they have

identified five distinct yet related concepts, which have been studied under the general

rubric of ‘involvement’. These included involvement, commitment, communication

involvement, purchase importance and response involvement

Situational Involvement: Extending the concept of Purchase Decision Involvement

Purchase decision involvement represents a ‘mindset’ that allows researchers to capture

situational variations in the purchase decision. An example would be an emergency

purchase versus a regular purchase of the same product. Unlike enduring involvement,

purchase decision involvement is not always predictive of information search. Thus a

routine purchase decision such as the purchase of a chocolate bar is not necessarily

described as low involvement, since the consumer may not be indifferent to the choice of

brands. Consumers may therefore be aware of differences between alternative brands

even for inexpensive products which marketing texts typically classify as low

involvement. Consequently, he suggests that consumers may base these brand decisions

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on the perceived level of similarity or difference between alternative offerings. The

essence of Mittal’s conceptualization of purchase decision involvement is that consumers

care about what they buy and are motivated to make the right choice. Purchase decision

involvement seems to be affected by the purchase situation. Different purchase situations

might include whether an item is being bought routinely, in an emergency, or for a gift.

The purchase situation thus affects the extent to which the consumer is motivated to make

the right choice. For example, a consumer who buys boxed chocolates as a gift may

exhibit a high level of motivation to make the right choice. On the other hand, when the

same consumer buys boxed chocolates for their own consumption, the level of motivation

may not be so great. In the first situation, the individual may be more concerned and

exhibit a higher degree of care over the brand choice. In the second instance, the

individual may be relatively indifferent. This implies that the type of purchase may

determine the level of motivation to make the right choice, and that this then determines

the degree of care taken over the selection. Mittal (1989) tested this proposition using

emergency and regular purchase scenarios for different products. The results indicated

that individuals show less concern and care in an emergency purchase scenario than in a

regular purchase scenario for the same products. Therefore, the purchase situation seems

to determine the effort consumers are willing to put in a purchase as well as the types of

promotional references (appeals) what consumers are likely to be receptive to. The

degree of interaction among the three factors (type of purchase/purchase situation, level

of motivation and care in relation to brand choice) apparently determines the level of

purchase involvement and captures any situational variations in behavior (e.g. routine,

gift, regular or emergency purchase behavior) [Mittal, 1989]. Consideration of these

issues is timely in view of the rising popularity of in-home shopping and the greater

shopping channel choice now facing consumers. Given this context, it seems that

consumers’ brand choice is sometimes affected by the availability of brands within a

specific channel, such as a retail store, catalog or the Internet. For example, consumers

making online purchases tend to have access to a wider range of brands than those buying

through other means. This implies that the shopping channel which consumers select is

likely to shape or affect their eventual brand choice. Thus an individual electing to shop

for a gift online may do so because this channel offers access to a larger number of

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alternative brands. This may even result in a brand being chosen which is only available

via the Internet. Similarly, consumers may select a particular shopping channel because it

enables them to engage in ‘trade off’ behavior between the range of available brands and

convenience. For example, a time-poor individual using catalog or direct mail may do so

because these channels enable more efficient shopping within the available time. It is

therefore argued that in particular purchasing situations, shopping channel selection can

impact upon brand choice behavior. Specifically, it is suggested that the chosen shopping

channel may moderate the level of purchase decision involvement. In other words,

shopping channel choice can be considered to aggravate situational variations in

behavior. Consider the following scenario: When the gift purchase of boxed chocolates

via Internet is compared with a similar purchase from a retail store, the level of care and

concern displayed by the purchasers may differ. This may reflect differences in

involvement levels and in information search behavior. The implication is that purchase

decision involvement may not be bound solely by the situation, but also by the shopping

channel which can become part of an individual’s decision making process.

Information Search and Decision Making

Problem Recognition:  One model of consumer decision making involves

several steps. The first one is problem recognition—you realize that something is not as it

should be.  Perhaps, for example, your car is getting more difficult to start and is not

accelerating well.    The second step is information search—what are some alternative

ways of solving the problem?  You might buy a new car, buy a used car, take your car in

for repair, ride the bus, ride a taxi, or ride a skateboard to work.  The third step involves

evaluation of alternatives.  A skateboard is inexpensive, but may be ill-suited for long

distances and for rainy days.   Finally, we have the purchase stage, and sometimes a post-

purchase stage (e.g., you return a product to the store because you did not find it

satisfactory).  In reality, people may go back and forth between the stages.  For example,

a person may resume alternative identification during while evaluating already known

alternatives.

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Consumer involvement will tend to vary dramatically depending on the type of product. 

In general, consumer involvement will be higher for products that are very expensive

(e.g., a home, a car) or are highly significant in the consumer’s life in some other way

(e.g., a word processing program or acne medication).

It is important to consider the consumer’s motivation for buying products.  To achieve

this goal, we can use the Means-End chain, wherein we consider a logical progression of

consequences of product use that eventually lead to desired end benefit.  Thus, for

example, a consumer may see that a car has a large engine, leading to fast acceleration,

leading to a feeling of performance, leading to a feeling of power, which ultimately

improves the consumer’s self-esteem.  A handgun may aim bullets with precision, which

enables the user to kill an intruder, which means that the intruder will not be able to harm

the consumer’s family, which achieves the desired end-state of security.  In advertising, it

is important to portray the desired end-states.  Focusing on the large motor will do less

good than portraying a successful person driving the car.

Information search and decision making:  Consumers engage in both internal and

external information search. 

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Internal search involves the consumer identifying alternatives from his or her memory. 

For certain low involvement products, it is very important that marketing programs

achieve “top of mind” awareness.  For example, few people will search the Yellow Pages

for fast food restaurants; thus, the consumer must be able to retrieve one’s restaurant

from memory before it will be considered.  For high involvement products, consumers

are more likely to use an external search.  Before buying a car, for example, the consumer

may ask friends’ opinions, read reviews in Consumer Reports, consult several web sites,

and visit several dealerships.  Thus, firms that make products that are selected

predominantly through external search must invest in having information available to the

consumer in need—e.g., through brochures, web sites, or news coverage.

A compensatory decision involves the consumer “trading off” good and bad attributes of

a product.  For example, a car may have a low price and good gas mileage but slow

acceleration.  If the price is sufficiently inexpensive and gas efficient, the consumer may

then select it over a car with better acceleration that costs more and uses more gas. 

Occasionally, a decision will involve a non-compensatory strategy.  For example, a

parent may reject all soft drinks that contain artificial sweeteners.   Here, other good

features such as taste and low calories cannot overcome this one “non-negotiable”

attribute.

The amount of effort a consumer puts into searching depends on a number of factors such

as the market (how many competitors are there, and how great are differences between

46

brands expected to be?), product characteristics (how important is this product?  How

complex is the product?  How obvious are indications of quality?), consumer

characteristics (how interested is a consumer, generally, in analyzing product

characteristics and making the best possible deal?), and situational characteristics.

Two interesting issues in decisions are:

Variety seeking (where consumers seek to try new brands not because these

brands are expected to be “better” in any way, but rather because the consumer

wants a “change of pace,” and

“Impulse” purchases—unplanned buys. This represents a somewhat “fuzzy”

group.  For example, a shopper may plan to buy vegetables but only decide in the

store to actually buy broccoli and corn.  Alternatively, a person may buy an item

which is currently on sale, or one that he or she remembers that is needed only

once inside the store.

A number of factors involve consumer choices.  In some cases, consumers will be more

motivated.  For example, one may be more careful choosing a gift for an in-law than

when buying the same thing for one self.  Some consumers are also more motivated to

comparison shop for the best prices, while others are more convenience oriented. 

Personality impacts decisions.  Some like variety more than others, and some are more

receptive to stimulation and excitement in trying new stores.  Perception influences

decisions.  Some people, for example, can taste the difference between generic and name

brand foods while many cannot.  Selective perception occurs when a person is paying

attention only to information of interest.  For example, when looking for a new car, the

consumer may pay more attention to car ads than when this is not in the horizon.  Some

consumers are put off by perceived risk.  Thus, many marketers offer a money back

guarantee.  Consumers will tend to change their behavior through learning—e.g., they

will avoid restaurants they have found to be crowded and will settle on brands that best

meet their tastes.  Consumers differ in the values they hold (e.g., some people are more

committed to recycling than others who will not want to go through the hassle).  We will

consider the issue of lifestyle under segmentation.

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Families and Family Decision Making

The Family Life Cycle: Individuals and families tend to go through a "life cycle:" The

simple life cycle goes from

 

For purposes of this discussion, a "couple" may either be married or merely involve

living together. The breakup of a non-marital relationship involving cohabitation is

similarly considered equivalent to a divorce.

In real life, this situation is, of course, a bit more complicated. For example, many

couples undergo divorce. Then we have one of the scenarios:

Single parenthood can result either from divorce or from the death of one parent. Divorce

usually entails a significant change in the relative wealth of spouses. In some cases, the

non-custodial parent (usually the father) will not pay the required child support, and even

if he or she does, that still may not leave the custodial parent and children as well off as

they were during the marriage. On the other hand, in some cases, some non-custodial

parents will be called on to pay a large part of their income in child support. This is

particularly a problem when the non-custodial parent remarries and has additional

48

children in the second (or subsequent marriages). In any event, divorce often results in a

large demand for:

Low cost furniture and household items

Time-saving goods and services

Divorced parents frequently remarry, or become involved in other non-marital

relationships; thus, we may see

       Another variation involves

       

Here, the single parent who assumes responsibility for one or more children may not

form a relationship with the other parent of the child.

Integrating all the possibilities discussed, we get the following depiction of the Family

Life Cycle:

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Generally, there are two main themes in the Family Life Cycle, subject to significant

exceptions:

As a person gets older, he or she tends to advance in his or her career and tends to

get greater income (exceptions: maternity leave, divorce, retirement).

Unfortunately, obligations also tend to increase with time (at least until one’s

mortgage has been paid off). Children and paying for one’s house are two of the

greatest expenses.

Note that although a single person may have a lower income than a married couple, the

single may be able to buy more discretionary items.

Family Decision Making: Individual members of families often serve different roles in

decisions that ultimately draw on shared family resources. Some individuals are

information gatherers/holders, who seek out information about products of relevance.

These individuals often have a great deal of power because they may selectively pass on

information that favors their chosen alternatives. Influencers do not ultimately have the

power decide between alternatives, but they may make their wishes known by asking for

specific products or causing embarrassing situations if their demands are not met. The

decision maker(s) have the power to determine issues such as:

Whether to buy;

Which product to buy (pick-up or passenger car?);

Which brand to buy;

Where to buy it; and

When to buy.

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PRIMARY FINDINGS AND ANALYSIS

1. Which product you are selling the most?

51

2. Which brand is popular in the market (1 to 5)?

52

3. Which one of the brand is more advanced in technology?

53

4. Which one is good value for money?

54

5. Which brand is preferred by customer?

55

6. How much percentage of the each brand you selling & which one is more in

demand?

56

7. Which scheme is preferred by customer?

57

8. Which brand is more preferable to you?

58

RECOMMENDATIONS

Finally, customers with expectations too discrepant to shape need to be abandoned.

Customer selection can be an effective means of managing customer expectations. A firm

that serves a broad range of customers with widely varying expectations cannot focus its

efforts on any particular level of service, and divergent customers make divergent

demands and thereby confuse and strain the service provider system. Both

accommodation and alteration approaches are utilized by business firms; in the academic

literature, however, the alteration approach has not received much systematic attention.

Segmentation has been the second accommodation mechanism, particularly useful when

needs, wants, and expectations increase in diversity across consumers. Businesses have

two possible avenues to managing customer expectations: (i) accommodating the

expectations, and (ii) altering (i.e., shaping) them, Of course, when either approach fails,

a third option exists, namely to abandon the customer. Target marketing and allow firms

to exploit market segments most suited to their skills and resources, and to in turn meet

market needs in a more tailored fashion. Finally, quality and satisfaction enhancement

efforts also are governed by pragmatics of technical and economic viability. Airlines

cannot entirely eliminate flight delays or overbooked flights, stores cannot entirely ensure

short checkout lines, and low price offerings cannot offer the amenities of full-service

offerings some customers inadvertently assume and come to expect. Increasingly,

marketers are questioning a runaway obsession with quality improvement to satisfy

customer expectations without regard to bottom-line impact of quality efforts. The best

known divorce of quality upgrade and bottom-line outcome is the case of Wallace

Clearly, many market offerings need enhancement (by product innovations, by segment-

specific customization, or by quality improvements) so as to meet or exceed customer

expectations. Indeed, we cannot overemphasize the first requisite for firms to attempt to

accommodate as many of customers’ expectations as economically feasible. However,

many expectations are infeasible or costly to accommodate, and instead require altering.

Expectations too discrepant from the performance reality are counter-productive for the

marketer. If they are too low (as happens with firms who acquire bad reputation), they

59

hold no appeal for the firm’s offering. If too high, they lead to customer dissatisfaction

with the firm’s performance. Therefore, both low and high expectations need to be

shaped rather than accommodated.’ Selectivity allows not only well-fitting product or

service offering, but it also permits more realistic promises to lure customers. In the

absence of selectivity, advertising regresses toward trying to promise everything to

everyone, an approach that cannot but “over promise.”

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CONCLUSION & IMPLICATIONS

A significant portion of the study of real estate deals with the consequences of consumer

decisions regarding real estate assets and services. Appraisal attempts to estimate the

value of property to consumers. Market analysis attempts to predict consumer demand for

real estate services. Investment analysis must determine the required rate of return to an

investor. Finance analyzes consumers’ mortgage choices and expected repayment pattern.

Brokerage studies the transactions between buyers and sellers. All of these elements of

real estate study stand to benefit from a better understanding of consumer behavior.

The study of consumer behavior involves trying to understand complex human beings

and the reasons they act the way they do in the marketplace. It recognizes that consumer

decisions take place inside a person who has a distinctive personality and attitudes, yet is

similar to other consumers exposed to the same external influences of culture and society.

Rather than using simplifying assumptions to ignore these complexities, real estate

educators should embrace the study of consumer behavior to better understand the

reasons behind market choices.

The relevance of consumer behavior to real estate studies is best accepted, perhaps, in the

areas of development, brokerage and leasing. These segments of the real estate discipline

have traditionally had the closest ties to the consumer. Still, real estate transactions are

often modeled as solely economic transactions.

Within appraisal, the sales comparison approach estimates the value of a property based

on what consumers are willing to pay for individual components of the property. The

study of consumer behavior examines which people value what components and why

preferences change over time. Buyer attributes can be explicitly considered in appraisal

to determine properties considered as having the same utility and amenities (Ratcliff,

1965, 1972).

Attitudes, lifestyle and tastes affect consumer preferences for space. Market analysts

should not rely exclusively on census-based economic and demographic data from which

they infer information about consumers (Rabianski, 1995). Incorporating information

about consumer attitudes, preferences and perceptions into economic models of housing

61

demand is critical to any reduction of the large margin of unexplained variance in

housing consumption behavior (Megbolugbe, Marks and Schwartz, 1991).

While this article serves as an introduction to consumer behavior applications to real

estate study with an emphasis on residential real estate and homebuyers, the concepts are

equally valuable to the study of other types of real estate and other decisionmaking

situations. For example, the value of a particular property to an individual

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64

COPY OF THE QUESTIONNAIRE

1. Which product you are selling the most?

Branded

Others

2. Which brand is popular in the market (1 to 5)?

Sony

Samsung

LG

Videocon

Others

Intex

Iball

3. Which one of the brand is more advanced in technology?

Sony

Samsung

LG

Videocon

Others

Intex

Iball

65

4. Which one is good value for money?

Sony

Samsung

LG

Videocon

Others

Intex

Iball

5. Which brand is preferred by customer?

Sony

Samsung

LG

Videocon

Others

Intex

Iball

6. How much percentage of the each brand you selling & which one is more in

demand?

Sony

Samsung

66

LG

Videocon

Others

Intex

Iball

7. Which scheme is preferred by customer?

EMI

Extended warranty

Budled offer

8. Which brand is more preferable to you?

Sony

Samsung

LG

Videocon

Others

67