A Report On Understanding Consumer Behaviour towards Luxury Products By Jitesh Sanghvi MMS – 137, Marketing Year 2009-10 K J Somaiya Institute of Management Studies & Research Understanding Consumer Behaviour towards Luxury Products Understanding Consumer Behaviour Towards Luxury Products By Jitesh A Sanghvi Under the guidance of Mar. Nilesh Talreja Senior Executive Interface Communication ______________ Designation SIMSR, Mumbai K J Somaiya Institute of Management Studies & Research May-June, 09 Jitesh Sanghvi – MMS -137, Marketing
Page 1 Understanding Consumer Behaviour towards Luxury Products Certificate Jitesh Sanghvi – MMS -137, Marketing Page 2 Understanding Consumer Behaviour towards Luxury Products Certificate of Approval We approve this Summer Project Report titled “Understanding Consumer Behaviour Towards Luxury Products … ” as a certified study in management carried out and presented in a manner satisfactory to warrant its acceptance as a prerequisite for the award of Master in Management Studies for which it has been submitted.
It is understood that by this approval we do not necessarily endorse or approve any statement made, opinion expressed or conclusion drawn therein but approve the Summer Project Report only for the purpose it is submitted. Summer Project Report Examination Committee for evaluation of Summer Project Report Jitesh A Sanghvi Signature 1. Faculty Examiner 2. MMS Summer Project Co-coordinator Jitesh Sanghvi – MMS -137, Marketing Page 3 Understanding Consumer Behaviour towards Luxury Products EXECUTIVE SUMMARY
Studying consumer behaviour enables marketing researchers to predict how consumers will react to promotional messages and to understand why they make the purchase decision they do. Marketers realized that if they know more about the consumer decision making criteria, they can design marketing strategies and promotional messages that will influence consumers more effectively. The importance of consumer behaviour made marketers to think of a separate branch in marketing research – Consumer research, to deal exclusively for consumer related issues.
The current focus of this report is on study of underlying needs and motives in taking purchase decisions, consumer learning process and attitude formation process. The study has been initiated for Club Mahindra Holidays. The purpose of this study is to analyze consumer perceptions of luxury products and the factors that influence his purchase decisions. The objective is to understand consumer behaviour towards luxury products and the steps followed while purchasing it.
To achieve the above objectives, we first look at how luxury goods are different from regular goods and then go on to explore some facets and trends of the luxury goods as well as their market and consumers. We will understand the definition of luxury products through secondary research. Post secondary research we will develop few hypotheses which will give us the direction for our next step ie Qualitative Research. We will use interview method in qualitative research which will give an insight into the mindset of the consumers and their purchase steps involved and then follow it up with quantitative research (survey method).
Through this we will quantify our findings for the Indian luxury consumer and their buying behaviour. We will analyze the factors that influence the consumers in buying the luxury products. Jitesh Sanghvi – MMS -137, Marketing Page 4 Understanding Consumer Behaviour towards Luxury Products Research Abstract Scope: This project is a part of a job assigned to the planning department. This project is an initiative taken to understand the behaviour of consumers towards luxury products. Purchase of a luxury product involves lot of planning and research before taking any decision. There are number of factors that affect an individual? decision making process as well as his choice about the product. These factors are different for different types of luxury product. A research into these aspects will give us an insight into the mindset of the consumer and will help to study the consumer better. Method: Primary research was done in two steps. ? Qualitative Research – Depth Interview Method ? Quantitative Research – Survey Method 1) Qualitative Research: For qualitative research, few high income people were asked open ended questions which were formulated based on the secondary research and in line with the hypothesis.
Depth interview of 10 people were taken which gave an insight into their purchase behavior and their decision making process for a luxury good. Based on this interviews and a further review of the secondary research reports, a final survey questionnaire was prepared. 2) Quantitative Research: For quantitative research, after making the initial questionnaire it was pretested with 5 participants and was improvised. The final sample was 30 with target group being A and A+ socio-economic class people.
In June 2009, the survey was conducted to observe the behavior pattern of consumers in buying luxury products. This allowed us to find out about the behaviour of the consumer towards luxury products across various income groups. Also we asked them about what all factors Jitesh Sanghvi – MMS -137, Marketing Page 5 Understanding Consumer Behaviour towards Luxury Products influence them to buy such products and which brand of products do they feel are luxurious. We also understood the price range that they feel makes the product luxurious.
Thus in future while designing any interactive campaign the output of this survey would be of great use for positioning the product as a luxury product. Also some secondary data was mined regarding what exactly influences an individual? s decision. Conclusion: Luxury products are high involvement products which require high thinking and are defined by their exclusivity and brand. They are mostly bought as a symbol of status. People have high emotional attachment with luxury products and are mostly influenced by their family members in decision making as most of the products are bought for family use.
These products are also used as a means to gift their closed ones. Endorsing a film star or sport personality does not affect the image of a luxury product to a great extent. Luxury products give a feeling of pride and most of the purchase decision making is influenced by family members especially spouse. This entire initiative was one of its kinds and will help the INTERFACE COMMUNICATION to design its campaigns for Club Mahindra Holidays in a way to advertise them as a luxury club. Jitesh Sanghvi – MMS -137, Marketing Page 6
Understanding Consumer Behaviour towards Luxury Products Acknowledgement I would like to give my sincere thanks to my Industry Project Guide Mr. Nilesh Talreja, Senior Executive, Strategic Planning, Interface Communications and Ms. Nahid Elavia, Account Planner, Strategic Planning for their kind support and guidance during my project and also for providing me with a great opportunity to work with such a valuable organization. I would also like to thank Mrs. Shamla Sathe, Account Planning Head for giving me this great opportunity to work with Account Planning Department.
It is her visionary thinking, which has been the guiding force for whole of the division and my report. I would also like to thank Mr. Amit Dhokai, my colleague, who has provided me with the necessary information and his valuable suggestion and comments on bringing out this project in the best possible way. I would also like to thank all the faculties at SIMSR who have helped me directly or indirectly in the completion of this project. I thank Interface Communications (A part of Draft FCB+Ulka) for such a valuable learning experience.
Thank you Jitesh A Sanghvi MMS – 137 (2008-2010) K. J. Somaiya Institute of Management Studies & Research Jitesh Sanghvi – MMS -137, Marketing Page 7 Understanding Consumer Behaviour towards Luxury Products Sr. No. 1 2 2. 1 TABLE OF CONTENTS Company Overview Secondary Research Luxury Products: Getting to know luxury 2. 2 2. 3 Difference between regular & luxury goods Consumer Behavior: What is Consumer Buying Behaviour 2. 4 2. 5 2. 6 Stages of Consumer Buying Behaviour Types of Consumer Buying Behaviour Consumer Involvement: Causes of Consumer Involvement 2. 7 3 4 4. 1 4. 5 6 Models of Consumer Involvement Research Method Primary Research Qualitative Analysis Quantitative Analysis Recommendations Appendix 23 26 28 30 35 59 60 17 19 21 15 16 Page No. 9 12 14 Jitesh Sanghvi – MMS -137, Marketing Page 8 Understanding Consumer Behaviour towards Luxury Products LIST OF FIGURES & CHARTS Sr. No 1. 1 1. 2 1. 3 Particulars Difference between regular and Luxury goods Stages of Consumer Buying Behavior Consumer Involvement Page No. 15 18 20 Jitesh Sanghvi – MMS -137, Marketing Page 9 Understanding Consumer Behaviour towards Luxury Products COMPANY OVERVIEW
Jitesh Sanghvi – MMS -137, Marketing Page 10 Understanding Consumer Behaviour towards Luxury Products About Interface Communications History Interface Communications is the second agency of the Draft FCB Ulka group. The Draft FCB Ulka group has a 125 year heritage of pioneering concepts which define advertising and a 40 year heritage in India. Interface has grown from a single office to 5 offices in India and is one of the 1st few Indian agencies to boast of a pan Asia network. We are a team of 115 professionals across Delhi, Chennai, Bangalore, Kolkata and Mumbai.
Interface is the first Indian agency brand that has gone beyond India. Interface has opened offices in Malaysia, Hong Kong, China. In 2003 we launched operations in Taiwan, Singapore. Work with some of the best known brands in each country. Business Interface is a second agency that is created to handle large scale clients. We work with some of the biggest brands across sectors from FMCG to automobiles, from real estate to finance companies, from consumer durables to holidays and many more. Majority of our clients are industry leaders and we are proud to be their strategic partners.
Our clients have stuck by us as we are a process driven company. We have our share of global proprietary tools to provide a strategic edge to the clients we work with. Some of the more often used tools include: ? ? ? Mind and Mood and Moments The Wheel VIP and ICON Inspite of being process driven we are still a very people oriented organization. Our teams work together like a family and there is at all times a casual and jovial Jitesh Sanghvi – MMS -137, Marketing Page 11 Understanding Consumer Behaviour towards Luxury Products ork environment maintained. We believe in an open door policy where any employee can express himself/ herself freely. As an organization we believe in constant learning and thus stress on training and development at all times. The Draft FCB Ulka group is one of the only advertising agencies in India to run a 2 month long training program for fresh recruits. This program called ‘The Star One training’ is a rigorous training ground for the future advertising biggies. This program is an annual feature and has been going strong for more than a decade.
Draft FCB Ulka and Interface are some of the few agencies to have a very low attrition rate and most of the senior level management have been with the company on an average for more than 15 years which is a long time in advertising which sees constant churn. We at Interface live the values we believe in and for us our mantra is : We provide strategic communications partnership to our clients – to help sell their brands today, and build brand value over time Jitesh Sanghvi – MMS -137, Marketing Page 12 Understanding Consumer Behaviour towards Luxury Products Secondary Research on luxury products Jitesh Sanghvi – MMS -137, Marketing
Page 13 Understanding Consumer Behaviour towards Luxury Products Secondary Research: Luxury Products Getting to know luxury Luxury brands have often been associated with the core competences of creativity, exclusivity, craftsmanship, precision, high quality, innovation and premium pricing. These product attributes give the consumers the satisfaction of not only owning expensive items but the extra-added psychological benefits like esteem, prestige and a sense of a high status that reminds them and others that they belong to an exclusive group of only a select few, who can afford these pricey items.
The luxury sector targets its products and services at consumers on the top-end of the wealth spectrum. These self-selected elite are more or less price insensitive and choose to spend their time and money on objects that are plainly opulence rather than necessities. For these reasons, luxury and prestige brands have for centuries commanded an unwavering and often illogical customer loyalty. Luxury has never been something easy to define, yet this mystery concept is something highly desired by one and all alike.
We look at delving deeper into this mystery and aura of luxury goods by way of comparing them against „regular goods? as well as highlighting the characteristics of the luxury industry. But before beginning with that, lets first attempt to understand some common terms associated in the world of high-end goods : ? Luxury and prestige brands such as Rolex, Louis Vuitton and Cartier represent the highest form of craftsmanship and command a staunch consumer loyalty that is not affected by trends. These brands create and set the seasonal trends and are also capable to pulling all of their consumers with them wherever they go. Premium brands are those brands like Polo Ralph Lauren, Calvin Klein and Tommy Hilfiger that aspire to be luxury and prestige brands but their marketing mix strategies are more attuned to a mass market, albeit a luxury mass market. They are also termed as mass-premium brands or mass-luxury brands. ? Fashion brands on the other hand are those that address the masses. Jitesh Sanghvi – MMS -137, Marketing Page 14 Understanding Consumer Behaviour towards Luxury Products Difference between regular & luxury goods Fig 1. 1 Differences between Regular and Luxury Goods Jitesh Sanghvi – MMS -137, Marketing Page 15
Understanding Consumer Behaviour towards Luxury Products Consumer Behaviour What is Consumer Behaviour Buying Behaviour is the decision processes and acts of people involved in buying and using products. Consumer Buying Behaviour refers to the buying behaviour of the ultimate consumer. A firm needs to analyze buying behaviour for: ? Buyers reactions to a firms marketing strategy has a great impact on the firms success. ? The marketing concept stresses that a firm should create a Marketing Mix (MM) that satisfies (gives utility to) customers, therefore need to analyze the what, where, when and how consumers buy.
Jitesh Sanghvi – MMS -137, Marketing Page 16 Understanding Consumer Behaviour towards Luxury Products Stages of Consumer Buying Behaviour Fig 1. 2 Stages of Consumer Buying Behaviour The above figure shows 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. The 6 stages are: 1. 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. you see a commercial for a new pair of shoes, stimulates your recognition that you need a new pair of shoes. 2. Information search-o Internal search, memory. Page 17 Jitesh Sanghvi – MMS -137, Marketing Understanding Consumer Behaviour towards Luxury Products o 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 o o o o Chinese food Indian food Burger king Klondike kates etc 3. 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 choice then returns 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. 4. Purchase decision–Choose buying alternative, includes product, package, store, method of purchase etc. 5. Purchase–May differ from decision, time lapse between 4 & 5, product availability. 6. 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, you may think that you really wanted a Chinese meal instead.
Jitesh Sanghvi – MMS -137, Marketing Page 18 Understanding Consumer Behaviour towards Luxury Products Types of Consumer Buying Behaviour There are four types of consumer buying behaviour which are as follows: ? Routine Response/Programmed Behaviour–buying low involvement frequently purchased low cost items; need very little search and decision effort; purchased almost automatically. Examples include soft drinks, snack foods, milk etc. ? Limited Decision Making–buying product occasionally. When you need to obtain information about unfamiliar brand in a familiar product category, perhaps.
Requires a moderate amount of time for information gathering. Examples include Clothes–know product class but not the brand. ? Extensive Decision Making/Complex high involvement, unfamiliar, expensive and / or infrequently bought products (Luxury Products). High degree of economic / performance / psychological risk. Examples include cars, homes, computers, education. Spend a lot of time seeking information and deciding. Information from the companies MM; friends and relatives, store personnel etc. Go through all six stages of the buying process. ? Impulse buying, no conscious planning. Jitesh Sanghvi – MMS -137, Marketing
Page 19 Understanding Consumer Behaviour towards Luxury Products Consumer Involvement Some consumers are characterized as being more involved in products and shopping than others. A consumer who is highly involved with a product would be interested in knowing a lot about it before purchasing. Hence he reads brochures thoroughly, compares brands and models available at different outlets, asks questions, and looks for recommendations. Thus consumer involvement can be defined as heightened state of awareness that motivates consumers to seek out, attend to, and think about product information prior to purchase.
Jitesh Sanghvi – MMS -137, Marketing Page 20 Understanding Consumer Behaviour towards Luxury Products Causes of consumer involvement The factors that influences consumer involvement include personal, product and situational. ? Personal Factors Self-concept, needs and values are the three personal factors that influence the extent of consumer involvement in a product or service. The more product image, the value symbolism inherent in it and the needs it serves are fitting together with the consumer self- image, values and needs, the more likely the consumer is to feel involved in it.
Celebrities for example share a certain self image, certain values, and certain needs. They tend to use products and services that reflect their life style. They get highly involved in purchasing prestigious products like designer wear, imported cars, health care products etc. ? Product Factors The consumer involvement grows as the level of perceived risk in the purchase of a good or service increases. It is likely that consumers will feel more involved in the purchase of their house than in the purchase of tooth paste, it is a much riskier purchase.
Product differentiation affects involvement. The involvement increases as the number of alternatives that they have to choose from increases. This may be due to the fact that consumers feel variety which means greater risk. The pleasure one gets by using a product or service can also influence involvement. Some products are a greater source of pleasure to the consumer than others. Tea and coffee have a high level of hedonic (pleasure) value compared to, say household cleaners. Hence the involvement is high. Involvement increases when a product gains public attention.
Any product, that is socially visible or that is consumed in public, demands high involvement. For example, involvement in the purchase of car is more than the purchase of household items. Jitesh Sanghvi – MMS -137, Marketing Page 21 Understanding Consumer Behaviour towards Luxury Products ? Situational Factors The situation in which the product is brought or used can generate emotional involvement. The reason for purchase or purchase occasion affects involvement. For example, buying a pair of socks for yourself is far less involved than buying a gift for a close friend.
Social pressure can significantly increase involvement. One is likely to be more self conscious about the products and brands one looks at when shopping with friends than when shopping alone. The need to make a fast decision also influences involvement. A consumer who needs a new refrigerator and sees a „one- day- only sale? at an appliances retailer does not have the time to shop around and compare different brands and prices. The eminence of the decision heightens involvement. The involvement is high when the decision is irrevocable, for example when the retailer does not accept return or exchange on the sale items.
Thus involvement may be from outside the individual, as with situational involvement or from within the individual as with enduring involvement. It can be induced by a host of personal-product-and situation related factors, many of which can be controlled by the marketer. It affects the ways in which consumers see, process, and send information to others. Jitesh Sanghvi – MMS -137, Marketing Page 22 Understanding Consumer Behaviour towards Luxury Products Models of consumer involvement Learn-Feel-Do Hierarchy Model Buying decisions vary according to the way there are taken.
Some decisions are taken with lot of thinking; others are taken with great feelings. Some are made through force of habit and others are made consciously. The learn-feel-do hierarchy is simple matrix that attributes consumer choice to information (learn), attitude (feel), and behaviour (do) issues. The matrix has four quadrants, each specifying a major marketing communication goal to be informative, to be effective, to be habit forming, or promote self-satisfaction. Thinking and feeling are shown as a continuum – some decisions involve one or the other and many involve elements of both.
High and low importance is also represented as a continuum. Fig 1. 3 Consumer Involvement ? High Involvement / High Thinking Purchases in first quadrant require more information, both because of the importance of the product to the consumer and thinking issues related to the purchases. Major purchases such as cars, houses and other expensive and infrequently buying items come under this category. The strategy model is learn-feel-do. Marketers have to furnish full information to get consumer acceptance of the product. Luxury products fall in this category. Jitesh Sanghvi – MMS -137, Marketing
Page 23 Understanding Consumer Behaviour towards Luxury Products ? High Involvement / High Feeling The purchase decisions in second quadrant involve less of information than feeling. Typical purchases tied to self-esteem- jewellery, apparel, cosmetics and accessories come under this category. The strategy model is feel-learndo. To encourage purchases marketers must approach customers with emotion and appeal. ? Low Involvement / Low Feeling The purchases in this quadrant are motivated primarily by the need to satisfy personal tastes, many of which are influenced by self-image.
Products like news paper, soft drinks, Liquor etc. , fall under this category. Group influences often lead to the purchase of these items. The strategy model is do-feel-learn. It helps marketers to promote products through reference groups and other social factors. ? Low Involvement / Low Thinking It involves less in thinking and more of habitual buying. Products like stationery, groceries, food etc. , fall under this category. Over a period of time any product can fall in this segment. The role of information is to differentiate any „point of difference? from competitors.
Brand loyalty may result simply from the habit. The strategy model is do-learn-feel. It suggests that marketers induce trial through various sales promotion techniques. Jitesh Sanghvi – MMS -137, Marketing Page 24 Understanding Consumer Behaviour towards Luxury Products Research Method: The study is classified based on the consumer buying preferences and factors that influence purchase decisions. The research method adopted is exploratory as the research is still in its initial stage and the preliminary information that will be gathered will help in defining the problems and suggest hypotheses.
We are set to learn about consumer behaviour across various product categories of luxury. We intend to understand the influence of various factors including family members and friends on purchase decision, emotional attachment with the product, purchase of counterfeit products and endorsing a film or sports personality for luxury product. We also want to understand purchase behaviour for car, planning of holidays and perception of holiday clubs. Jitesh Sanghvi – MMS -137, Marketing Page 25 Understanding Consumer Behaviour towards Luxury Products PRIMARY RESEARCH
Jitesh Sanghvi – MMS -137, Marketing Page 26 Understanding Consumer Behaviour towards Luxury Products Primary Research: Methods Primary research was done in two steps. ? Qualitative Research – Depth Interview Method ? Quantitative Research – Survey Method 1) Qualitative Research: For qualitative research, few high income people were asked open ended questions which were formulated based on the secondary research and in line with the hypothesis. Depth interview of 10 people were taken which gave an insight into their purchase behavior and their decision making process for a luxury good.
Based on this interviews and a further review of the secondary research reports, a final survey questionnaire was prepared. 2) Quantitative Research: For quantitative research, after making the initial questionnaire it was pretested with 5 participants and was improvised. The final sample was 30 with target group being A and A+ socio-economic class people. In June 2009, the survey was conducted to observe the behavior pattern of consumers in buying luxury products. Purpose Based on the existing data and the findings of the survey, it can be understood what influences a consumer to buy a luxury product and how to each a consumer. The different perspectives of luxury products from a consumer? s point of view can be understood giving a detailed insight as to how to position a product as luxury product. Consumer? s expectations from a luxury product will help us to understand the modifications needed in a product to be categorized as luxurious product. Jitesh Sanghvi – MMS -137, Marketing Page 27 Understanding Consumer Behaviour towards Luxury Products Sampling Sampling procedure: The sample is selected in a random way, but those having a car with nearly worth more than 5lakhs.
It was collected through mails and personal visits to the known persons, by formal and informal talks and through filling up the questionnaire prepared. The data has been analyzed by using the graphical method prepared in Microsoft Excel. Sample size: The sample size of my project is limited to 30 only. This is limited due to time constraints. Sample design: Data has been presented with the help of bar graph, pie charts, stacked graphs etc. Limitation: ? Time limitation ? Research has been done only at Mumbai ? Some of the persons were not so responsive ? Possibility of error in data collection ?
Possibility of error in analysis of data due to small sample size Jitesh Sanghvi – MMS -137, Marketing Page 28 Understanding Consumer Behaviour towards Luxury Products Analysis: In qualitative research, a personal interview was conducted of 10 people to understand the perception of luxury products and their purchase decision making process. The layout of the interview was: Warm up General details about the person, his family background, his interests and his lifestyle Luxury Product To understand their perception of luxury products and steps involved in purchasing a luxury product. Car, Holiday & Club
To understand his perception of a luxurious holiday and his planning process while going on a holiday. To understand his attitude towards clubs and decision making of a car Factors influencing To understand various factors that influence his decision for buying a particular luxury product. For qualitative questionnaire see appendix 1 For quantitative questionnaire see appendix 2 Jitesh Sanghvi – MMS -137, Marketing Page 29 Understanding Consumer Behaviour towards Luxury Products Qualitative Analysis: The Depth Interviews conducted gave some valuable insights into the mindset of the consumer? perception about luxury products and their decision making process during purchase. Some of the interesting responses based on which quantitative questionnaire was made are as follows: 1) What is your opinion about luxury products? “Depends, it may be different for different people. DVD, TV and other stuffs would be luxury for me. ” “They are good for show off” “Luxury products are created by seller. They are not necessities for a buyer but a need has been created by the seller. The way the products are advertised, branded and presented, a need is created to buy it. ” First and foremost it gives you a satisfaction in life, satisfaction that you are making use of the dreams that are available in the market. It can also be used as a status symbol. ” “If you can afford it one must consider luxury products. What is the point if you can earn so much money and still don’t spend on luxury products? ” Jitesh Sanghvi – MMS -137, Marketing Page 30 Understanding Consumer Behaviour towards Luxury Products Observation: Luxury Products have different perceptions with different people. Some think it is a need created by buyer where as some feel these are products good for show-off.
Some consider it as a status symbol. 2) Is luxury a necessity? “Today a four vehicle has become a necessity. Though a four wheeler is a luxury still it becomes a necessity. Second example is the latest technology mobile phones. We use mobile phones even while travelling, before sleeping, after getting up, checking emails. So whatever you say about these products they have become a necessity. ” “It is all in the minds of the people. If they get attracted to the promotions of the product and offers, it becomes a necessity for them. As said earlier, the need is created by the seller. ” 3) Name a few luxury products?
Expensive Car/Bike Jewellery Club Membership Branded Perfumes Travel Holidays Expensive Car/Bike Big House Jewellery Trendy Mobile Club Membership Travel Holidays Club Membership Travel Holidays Electronic Gadgets Branded Perfumes Branded Apparels Club Membership Electronic Gadgets Travel Holidays Branded Perfumes Branded Apparels Observation: Club Membership, Travel Holidays and Expensive Car/Bike are considered Luxury products whereas other products like Jewellery, Electronic Gadgets, Branded Perfumes and Branded Apparels are considered semi-luxury products. Jitesh Sanghvi – MMS -137, Marketing Page 31
Understanding Consumer Behaviour towards Luxury Products 4) Can you take us through the entire process of buying this product right from the wish to buy – actual purchase? “My process to buy a new house started 10-12 years back. I saw an advertisement in the newspaper and then went and saw the house. Once finalised, I took a loan, sold the old house and bought this new house. ” “My old car was giving me lot of problem. So I decided to buy this new car. I wished to buy this a year back. I didn’t want to take loan, so saved money for a year and finally bought this. In this period, the prices went down, so it helped me. ” I had a car before I bought this new one. It took me 2 years to buy this. It was the European car of the year. I saw the ad in the newspaper and decided I wanted to buy this. Observation: Purchase of a luxury product requires lot of planning and it takes many months to buy such high value products. Proper research and information needs to be obtained about the product before finalising the product. 5) What is your opinion of holiday clubs? Would you consider them as a luxury holiday club? “If you travel around a lot, than it is worth. It is not a luxury holiday because they have different offers which are affordable by most of the people. “I would consider it as a luxury. Most of these packages are designed in such a manner that you can get discount during weekdays. Weekends are expensive. So those are the times when you have time. ” “They are good and give you the necessary relaxation. I don? t consider them entirely luxury because nowadays most of the people can afford it. ” Observation: Opinions about holiday clubs are varied as there is not clear understanding of necessity. There are number of clubs providing cheap holidays and hence clubs seem to be losing on the title of luxury club.
Jitesh Sanghvi – MMS -137, Marketing Page 32 Understanding Consumer Behaviour towards Luxury Products 6) Would you buy a counterfeit Rolex watch for a cheaper price? “I am not a watch person so I would definitely go for a counterfeit. But for my friend who likes watches he would always go with the original. ” “As far as I am concerned I would go for original one. I don’t go for show off. If I have to buy Rolex I would take original only. ” “I would go for the original, because it would last long and quality matters. The material with which it is made will be better than counterfeit one. ”
Observation: Those people who want to buy luxury products for its quality and performance would buy the original. However, those who buy with the purpose of showing-off would not mind buying the counterfeit product. 7) Do you believe showing a film star or sports personality in an ad creates an advantage? “People associate themselves with stars. They feel that the stars are recommending something to them than the product has some value. ” “Yes it does help the brand as there are lot of people who like following film stars. Hyundai I10 has SRK shown. ” “It does have an impact on a die-hard fan.
For me a good ad makes a difference like Vodafone. A product which is good will do good in the long run. But a product which is mediocre will benefit from the ad only for a short term. It wont work for a long period. For a new product to kick start it’s a good plot. ” Jitesh Sanghvi – MMS -137, Marketing Page 33 Understanding Consumer Behaviour towards Luxury Products Quantitative Analysis: The responses of 30 respondents have been analysed and compared to conclude on the behaviour of a consumer towards luxury product. The analysis is divided into 4 sections. 1) Understanding Luxury How do we define luxury products?
Exclusivity Branded Superior Quality Glamorous Elitist Status Symbol Prestigious Expensive Flashy / Gaudy Trendy Classic Indulgent Pampering Enduring Extravagant 0 10 20 30 40 50 60 70 80 During the course of our research we came across a number of definitions of ‘luxury goods’, some of which were conflicting, however most were based upon the notion of ‘luxury goods’ as representing „Exclusivity? and those associated with „Branded products?. The top 5 words associated with luxury products were Exclusivity, Branded, Superior Quality, Glamorous and Elitist. Luxury products are associated mostly with brands and quality.
They symbolize glamour and are considered to be prestigious. Nearly 30% of people felt luxury products can be identified by knowing how expensive they are. More than 40% of people consider it as a status symbol. Jitesh Sanghvi – MMS -137, Marketing Page 34 Understanding Consumer Behaviour towards Luxury Products What motivates you to buy luxury products? Status Symbol Long standing dream Pleasure Show Off Sense of achievement Reward for myself Feeling of belonging to an elite group Gift for family Investment Family / Personal Need Peer pressure Entertainment Societal Pressure 0 10 20 30 40 50 60 70 80 90
When asked about the motivations that drive you to buy the luxury products, more than 55% of people said they buy luxury products as a status symbol. These products are not affordable by many due to its high price. Hence most of the highly affluent people buy this to prove their status in the society. Nearly 35% of respondents bought it because of a long standing dream to buy a luxurious product which makes them feel belonging to a high income group. The other major motivations to buy a luxurious product are pleasure, show off, sense of achievement and reward for myself. Nearly 25% of respondents elt they would buy such products to belong to an elite group. Nearly 20% of people would gift a luxury product to their family. Only 13% bought such products as a means of personal or family need. They felt it would not make much of a difference if they didn? t possess these products. Jitesh Sanghvi – MMS -137, Marketing Page 35 Understanding Consumer Behaviour towards Luxury Products Necessity / Luxury Quotient 100% 90% 80% 70% 60% Mid Luxurious Most Luxurious 50% 40% 30% 20% 10% 0% Necessity Least Luxurious ? Necessity The respondents were asked to rate the above mentioned 17 products according to their use in their life.
More than 59% of people considered expensive jewellery as a necessity of their life. They felt this as a safer and better product to invest. Nearly 52% of people considered branded apparels as their necessity. They would not buy non branded clothes because they feel branded clothes give quality products. They can associate themselves with the brands and so prefer sticking to the branded products. It gives them a sense of belonging to the brands. The other major products that were considered as necessities includes a Big house, branded shoes and branded watches.
More than 35% people considered these products as their necessities of life. They do not mind spending more for branded products as its their necessity. Jitesh Sanghvi – MMS -137, Marketing Page 36 Understanding Consumer Behaviour towards Luxury Products ? Most luxurious Amongst most luxurious products, expensive bike leads the way with 83% followed by expensive car with 72%. They felt having a bike and car is a necessity but buying an expensive one is a luxury. In bikes, most of the people wanted to buy Harley Davidson followed by Yamaha and Suzuki. Most of the people felt a bike with price range of Rs. lakhs – 7. 5lakhs is considered to be a luxurious bike. Luxurious bikes are mostly used for show off as one of the respondent said “I like my Yamaha sports bike and I bought it purely for style, status and show-off” When it comes to car, most of the people wanted to own a Mercedes or a Maybach. Ferrari came third on their wish list. They considered a car in the price range of Rs. 40lakhs – 75lakhs as luxurious car. They felt a luxury car would give them pleasure, status and comfort. On third position for the most luxurious products were branded pens with nearly 48% people voting for it.
They felt Mont Blanc, Parker and Cross were the most luxurious pens and would not mind spending Rs. 2,000 – 10,000 for such pens. More than writing pleasure these pens gives them a feeling of belonging to an elite class. They would not mind gifting such luxurious products to their loved ones. ? Mid Luxurious For mid luxurious products, Luxury Hotels and Exotic Indian Holidays were opting for considered it. with 38% of bags and respondents Branded International Holidays came on third position with 38% each. Amongst Luxury hotels, Taj was the most favoured followed by Marriott, Oberoi and Hilton.
They felt Rs. 30,000 – 1lakh was a luxury price to spend on such hotels. For Indian holidays Rs. 1. 5Lakhs – 2Lakhs was considered a luxury where as for International holidays a price range of Rs. 5Lakhs – 10Lakhs was a luxury. Nearly 50% of people felt SOTC provided with luxurious international holidays where as for Indian holidays it was Raj travels. Jitesh Sanghvi – MMS -137, Marketing Page 37 Understanding Consumer Behaviour towards Luxury Products ? Least Luxurious In least luxurious products, nearly 40% of respondents selected Branded bags followed by 34% selecting Branded Perfumes and Branded Shoes.
Branded Cosmetics was next with 31% people opting for it. They felt these products were a little more than necessity but not as much a luxury. They would buy branded products only for better quality. Most of the people felt Rs. 10,000 – 20,000 would be a luxury price for a branded bag where as for Branded perfumes and shoes would be Rs. 5,000 – 10,000. For whom would you buy the luxury products? Self Family Branded Pens Branded Watches Branded Shoes Expensive Bike 60% 57% 47% 40% 33% 27% 27% 7% 7% 7% 7% 71% 63% 40% 43% 53% 60% 63% 73% 73% 93% 93% 93% 93% 100% 100% 100% 29% 37% Branded Bags
Branded Perfumes Expensive Car Hi-end Electronics Branded Apparels Expensive Furniture Big House Expensive Jewellery Club Membership Luxury Hotels 0% Branded Cosmetics 0% Exotic Indian Holiday 0% International Holidays 0% 100% When asked for who would they buy these products, majority of the products were intended to be bought for their family. Products like Branded pens, Branded watches, Branded Shoes and Expensive Bike were intended to be purchased for self use. Whereas Holidays, Branded Cosmetics and Luxury hotels were given 100% rating Jitesh Sanghvi – MMS -137, Marketing Page 38
Understanding Consumer Behaviour towards Luxury Products for family use. Most of the people said they would buy expensive perfumes for their family and would not mind gifting someone with it. Luxury products being high priced What triggers the need for luxury product purchase? Special Occasion / events Personal Achievement Love at first sight Professional Success Friend using it Seeing it on a trip abroad Family Satisfaction Advertisement Used by a role model Celebrity endorsement 2% 2% 5% 7% 6% 9% 17% 15% 15% 21% products, not many people buy it without a reason. When the respondents were asked what triggered them to buy such roducts, nearly 21% of people said special occasions / events in their lives. Special occasion may be anything from birthdays to marriage anniversaries to promotion to new child born. Thus most of the people buy such products as a result of some emotional feeling. 17% of respondents felt their personal achievement triggered them to buy such products and raise their standards through the use of such products. With promotion and better lifestyle, there is a need to use luxury products to show off and as a means of status symbol. It also gives them a feeling of satisfaction and pride to own a luxury product.
There are number of mediums and sources for advertising of products and creating product awareness. But luxury products are usually not Information Sources of Luxury Products Billboard / Outdoor Ads 14% Email 2% Newspaper 15% Radio 1% Brochures 13% TV Ads 15% Company Websites 7% PR Articles 7% advertised through all such mediums. It is important to reach out to the right consumers through appropriate medium. Hence, when asked about the information sources for luxury products majority of the respondents felt magazines were the right choice. They got most of the necessary Magazines 22%
Third Party Websites Blogs 0% 4% information about the products from various luxury magazines. Nearly 15% people Jitesh Sanghvi – MMS -137, Marketing Page 39 Understanding Consumer Behaviour towards Luxury Products felt newspaper gave them adequate information about the products. The other major sources which gave relevant information were Billboards / Outdoor Ads and Brochures. Time spent in planning before buying the product Expensive Bike Expensive Car Branded Pens International Holidays Luxury Hotels Exotic Indian Holiday Club Membership Hi-end Electronics Big House Branded Watches Most Luxurious
Least Luxurious Branded Cosmetics Branded Perfumes Branded Bags Expensive Furniture Branded Shoes Expensive Jewellery Branded Apparels 0% 20% 40% 60% 80% 100% No Planning Between 1-12 months 1-5 years More than 5 years Luxury products are high valued products. These products require high involvement and are high risks products in terms of investment. Hence proper planning and decision is important before purchasing the product. Depending on the products and price, planning is necessary. When asked to people, it was observed that most of the luxurious products according to people required more planning time.
To buy an expensive bike or car, they would take nearly 1 – 12 months to decide. They would do adequate research on the product and prices and offers and then buy it. For all the other most luxurious products i. e. Luxury hotel, International Holidays, Exotic Indian Holidays, club membership and Hi-end electronics they would take nearly a year to plan for the right product. For very high involvement product like a Big House they would take more than 1-5 years in deciding the right product. Products which are not high involvement products can be bought instantly from shops without Jitesh Sanghvi – MMS -137, Marketing Page 40
Understanding Consumer Behaviour towards Luxury Products planning. These products include Branded watches, Branded Perfumes, Branded cosmetics, Branded Shoes and Branded Pens. These products are used more often and can be bought again and hence they do not require much planning. As quoted by one of the respondent “House, Club memberships or any other Hi-end electronic goods are long term products. You don’t change every now and then. Hence proper planning is very much necessary for such products. ” At what stage do you decide which brand to buy?
Expensive Bike Expensive Car Branded Pens International Holidays Luxury Hotels Exotic Indian Holiday Club Membership Hi-end Electronics Big House Branded Watches Branded Cosmetics Branded Perfumes Branded Bags Expensive Furniture Branded Shoes Expensive Jewellery Post evaluation (After checking out various brands and options available) Brand doesn’t matter 0% 20% 40% 60% 80% 100% Pre Planned (Before entering the shop) Most Luxurious Least Luxurious Branded Apparels Even after planning, people are not sure which brand of product to buy and they decide to buy after going to the shop and looking at various options.
When asked at what stage do they decide the brand of the product, it was observed that for the most luxurious products they pre plan their brands. So majority of the people said for Expensive bike and car they would pre plan their brand. They find out about the product in magazines, internet, newspaper and other such media and decide on the brand. Products whose complete info cannot be obtained on magazines or internet are pre-planned. Whereas products which need to be tested and adequate Jitesh Sanghvi – MMS -137, Marketing Page 41 Understanding Consumer Behaviour towards Luxury Products nformation about all the brands is not available on internet are post planned. These include products like Branded Watches, Branded Pens, Branded Perfumes, etc. Luxury Hotels, Holidays and clubs can be both pre planned as well as post planned depending upon the choice of the people. People usually don? t shop alone. Whom do you go with while buying luxury products? Shopping Group Friends 5% 10% Children 15% Spouse 55% Parents 15% They go with someone with whom they are comfortable shopping. They like people who think like them for shopping. For many it is a fun activity to do window shopping.
However when it comes to luxury products shopping, they usually go with someone whose decision they rely on. This is because the product involves high risk. Hence when asked with whom do they shop, nearly 55% of respondents said they go with their spouse. Only 15% go with their children and a similar percentage of people go with their parents. Involvement of friends and shopping group in shopping is marginal. Since most of the luxury products that they buy are for family, they prefer going with their spouse. People whose children are mature enough to understand the high risk associated with the luxury product o not mind taking their children along for shopping. There are number of factors that affect one? s decision in buying a particular brand of luxury product. Nearly 84% of the respondents said the major factor that influences their decision to buy a particular luxury product was their Factors that influence purchase of luxury product Spouse Brand Friends Parents Children Peers / Reference… Society Role Model / Person… Dealer Celebrities 41% 38% 37% 30% 68% 63% 61% 59% 49% 84% Spouse. This is because they usually go with them for shopping. However, 68% of people feel Brand of the product does influence them to buy that product.
Jitesh Sanghvi – MMS -137, Marketing Page 42 Understanding Consumer Behaviour towards Luxury Products From where would you prefer to buy luxury product? 40% 35% 30% 25% 20% 15% 10% 5% 0% 40% Goods are available from number of places but luxury products are available only at selected places. It is important to a understand consumer 0% 4% 15% 15% 17% 9% from where purchases such high priced products. It was observed that nearly 40% people would buy from Exclusive Brand Outlet only whereas nearly 17% and 15% would buy from a multi-brand outlet and factory outlet respectively. 9% of the respondents said they wouldn? mind buying from grey market as they didn? t care much for the quality as much as for price. Since there is high involvement with luxury products, there are lot of emotions into play. As observed earlier, most of the luxury products bought is for family. This results in high emotional attachment with the product. People usually buy things that struck their heart. When polled, nearly 64% people agreed to the fact that they need to get emotionally attached to the product before they buy it. The product should touch their most important organ – Heart. None of the respondents disagreed to this fact which shows that luxury products have high motional quotient attached with it and they need to be positioned in the right way. Jitesh Sanghvi – MMS -137, Marketing Page 43 Understanding Consumer Behaviour towards Luxury Products Luxury bought products for are mostly These family. products have larger emotional attachment and hence 85% of people agreed that they would love to gift someone with a luxury product. Products like Branded Perfumes, Watches, Cosmetics, Pens and Bags are those which are usually gifted. One of the respondents said “Every year I gift my wife with some new luxury product. Last year I had gifted her with a car.
I gifted my son with a costly watch. There are lot feelings attached with such gifts” Luxury products being high valued gives a feeling of pride to own it. It also stands for status symbol as not many can afford it. Products Mercedes, Rolls Royce or Lamborghini are not affordable to many. People owning these products feel they status have achieved their When position. surveyed regarding the same, 71% of people felt they would buy luxury product as an indicator of their achievements whereas only 7% disagreed with the statement. Once they achieve a particular product they try and reach for a costlier and more luxurious product.
Thus each time they grow in position, they buy a new luxury product to indicate their achievement to the world. Jitesh Sanghvi – MMS -137, Marketing Page 44 Understanding Consumer Behaviour towards Luxury Products There is a huge market for counterfeit products and most of the products are made of China. These products are cheaper original as compared to branded luxury products and available in grey market. These products are exactly of same lookalike as the original except for its quality Products and like performance. perfumes, cosmetics, pens, bags and jewellery have counterfeit products.
When polled, there was a mixture of agreement and disagreement to buy such products. Overall 43% disagreed to buy such products but only 7% strongly disagreed to buy whereas although 42% agreed to buy such products, stunning 21% respondents strongly agreed to buy such products. Even though they were aware of the lack of quality in such products they would buy it. The only reason for this was cheaper price. Most of these respondents use it to show-off and are least concerned with quality. Most of the luxury products are high priced, but do they really deserve such prices or they make it look like a luxury and hence cost more.
Luxury products usually leverage on their image and brand value. They have superior quality and service. However, 86% of people feel their prices are exceedingly higher than what they should be. They feel they should get value for money. One of the respondent said “I would buy only Luxury products are over priced products Strongly Agree Agree Can’t Say Disagree 7% 7% 29% 57% those products which give value for money. Most of the products are just over priced. They don’t give true value of their price. ” Jitesh Sanghvi – MMS -137, Marketing Page 45 Understanding Consumer Behaviour towards Luxury Products
I would buy luxury product only on special auspicious days like Dhanteras, etc. Strongly Agree Can’t Say 14% As observed earlier many people said that they would buy luxury products on special occasions or events. However it was observed that they would not wait for days special like 29% auspicious 36% Disagree Strongly Disagree 21% Dhanteras, Diwali, New year, etc. Almost 57% people felt they would not wait to buy luxury products on special days. Crores of rupees are being spent on sports and film to personalities endorse them with a brand. The purpose is to target the fan following of the uperstar and lure them to buy the However product. for luxury products, it was observed that almost 50% disagreed to the fact that a film personality creates an added advantage for the product. They would not buy the product as their idol has endorsed the brand. Rather they would look at the quality of the product before buying it. Jitesh Sanghvi – MMS -137, Marketing Page 46 Understanding Consumer Behaviour towards Luxury Products I would take a loan, if needed, for buying the luxury product Agree 14% Not everyone can afford luxury products. But the desire to own a luxury product is always igher than what one has. Hence, sometimes we don? t have enough money to buy our desired luxury product. When Can’t Say 7% asked whether they would take a loan for fulfilling their desire to 29% Disagree Strongly Disagree buy a particular luxury product, almost 79% people refused to 50% take loans. Only 14% agreed to take loans to own their dream product. One of the respondent said “One should buy a luxury product only if he/she can has enough money. These products are not necessities. They should be bought after your necessities are fulfilled and only when you excess money left. Any product that is purchased should give value for money. Consumers purchase a particular product only if they feel they will get their money? s worth. Like a Mercedes which is worth every penny spent on it, Gucci perfumes give fragrance that no other Can’t Say 14% Strongly Agree Agree 21% Luxury products give value for money 29% perfumes give and with long lasting effects, all luxury products are expected to give value for consumer? s money. When Disagree Strongly Disagree 21% surveyed almost 50% people felt they got value for money from 14% luxury products.
Only 35% people disagreed to this statement showing a large number of people satisfied with luxury products. Jitesh Sanghvi – MMS -137, Marketing Page 47 Understanding Consumer Behaviour towards Luxury Products Luxury is to own what no other person owns Strongly Agree Agree Can’t Say Disagree Strongly Disagree 7% 14% 21% 29% 29% Luxury products have a class associated with it. People feel proud to own such high priced product. When asked whether they feel luxury is to own what no other person owns, almost 50% agreed with the statement. Only 21% of respondents disagreed with the statement.
Most of the people feel luxury product gives them a feeling of achievement and gives them a chance to show off. They want to buy products which are unique and not many can afford it. Since luxury products are very high priced products, people would be sacrificing their other needs to satisfy their love for luxury products. The branded shirts or jeans that they buy may not be of the best quality but they are high priced because of the brand value. When asked whether they think that a luxury product is a waste of Luxury product is a waste of money and impractical Agree 14% Can’t Say 14% Disagree
Strongly Disagree 21% 50% money and impractical, almost 71% disagreed to it. They felt that luxury products rightly deserve the price tag and the products give value for money. Jitesh Sanghvi – MMS -137, Marketing Page 48 Understanding Consumer Behaviour towards Luxury Products Luxury products being a high risk and high investment products it is important to understand the satisfaction level of people after buying the product. If people do not feel good about the product that they buy and if their basic purpose of buying the product is not served than the consumers will not come back to buy it again.
When asked whether luxury products make them feel good, surprisingly all the respondents agreed to the above statement. This shows that luxury products serve the right purpose and fulfil consumer? s expectations. Jitesh Sanghvi – MMS -137, Marketing Page 49 Understanding Consumer Behaviour towards Luxury Products 2) Luxury Holidays Holiday has become a necessity in today? s stressful lives. People need a break from their routine busy No of times people holiday in a year None Once Thrice Twice schedule and need to relax their time. Holiday gives them the much needed peace, time with family and most 13% 37% 7% 43% mportantly time to be with themselves. When people were surveyed on the number of times they holiday in a year, almost 93% said they go for holiday atleast once. Only 7% said they don? t holiday due to hectic schedule of life and work or due to personal reasons. On a luxury holiday people want Average spending on luxury holidays in a year Less than 1 Lakh Rs. 1 Lakh – 5 Lakh 7% More than Rs. 10 Lakh Rs. 5 Lakh – 10 Lakh carry out leisure activities, eat variety of cuisines, stay in the best of hotels, and enjoy the most beautiful places. All this comes at a price. In order to understand their spending 30% 56% 7% ehaviour we asked how much do they spend on luxury holidays in a year. 56% of people said they spend less than 1lakh where as 30% of people spent between Rs. 1lakh – 5lakh. Only 7% of people spent more than Rs. 10lakh per annum. This shows that people are conservative in nature even while holidaying in a luxurious way. Jitesh Sanghvi – MMS -137, Marketing Page 50 Understanding Consumer Behaviour towards Luxury Products Who offers luxury holidays? 27% 20% 20% 23% 23% 33% 40% 47% 53% 60% There are number of holidays tours clubs and and travels agencies which provide luxury packages Almost and 60% holiday trips. f respondents felt that luxury holidays are best provided by Taj Group of Hotels followed by Star cruises which got 53% votes. ITC welcome group of hotels, Marriott, and Club Mahindra got 47%, 40% and 33% votes respectively for providing luxury holidays. Amongst luxurious Luxurious Clubs Club Suman Mahindra 11% 18% Sterling 17% RCI 15% clubs majority of the people voted for Club Mahindra as the most luxurious club. Almost 18% of RGBC 12% Cambay 13% people voted for it followed by Sterling which got 17% votes followed by RCI and Country Club. Country Club 14% Jitesh Sanghvi – MMS -137, Marketing
Page 51 Understanding Consumer Behaviour towards Luxury Products Luxury holiday has Luxury holiday is about… It is about having an off-beat holiday, unusual experiences Its about expensive things and exotic places Its about pampering and taking care of oneself Indulgence – Great Food, great place, great times different connotations to different different people and expectations 13% 44% 30% 13% from it. Almost 44% of people felt a luxurious holiday “Indulgence is – about Great Food, Great Place, And Great Times. ” Nearly 30% of respondents felt ”It is about pampering and taking care of oneself. Whereas an equal number of 13% people felt a luxurious holiday is about “having an off-beat holiday, unusual experiences” and “It is about expensive things and exotic places” In an interview one of the respondent said “A luxury holiday should be about places never visited before, things never done before, fun never enjoyed before. ” There are number of medium Sources of Information 39% 52% 52% 52% 57% 61% 63% 73% through which one becomes aware of the luxury holidays and the facilities provided by various hotels. Holidaying is an activity which planning and needs lot needs about mode, lot of of nformation travelling proper destination stay, food, and other sightseeing activities. Hence it is very important to obtain genuine information about holidays. When asked about sources of information, most of the people relied on word of mouth from their friends, family, or closed ones. 63% said travel programs on TV were a good source of information. Jitesh Sanghvi – MMS -137, Marketing Page 52 Understanding Consumer Behaviour towards Luxury Products Factors influencing holiday decisions 80% 30% 41% 41% 41% 82% 94% While making the decision going for about a holiday, there are a number of which the making 0% 60% factors influence decision about the place. When surveyed about the factors, almost 94% of people said their spouse influenced their decision the most. This is so because most of times they holiday with their family. Next major factor was parents which got 82% votes followed by children which got 80% votes. Friends and other factors didn? t influence much in their decision making process. Jitesh Sanghvi – MMS -137, Marketing Page 53 Understanding Consumer Behaviour towards Luxury Products 3) Luxurious Car Car is one of the most How did u first think of buying the car?
While looking at the advertisemen t on Internet 3% By self love for car 30% luxurious products and is one of the most sought after product. It has become more than Others 11% a While looking at the advertisemen t on TV 16% necessity by providing various addon comforts and hitech technology. People buy car with different and By family’s recommenda tion 21% By friends consultation 19% perspectives different Almost expectations. 30% said they first thought of buying a car by self love for car. Another 19% people said they thought of buying by family’s recommendation and 19% said they would buy by friend’s consultation. There are number of ources from where one can get information about various cars, their different competitors comparison of and prices. Where do you look for information before buying a car? TV 5% Friends 18% Websites 17% Colleagues 13% Dealerships 13% Newspaper 8% Auto Review Sites 12% However to understand the most preferred sources, we asked people about their preference of search. Majority of people ie 18% consulted their friends for information. Another 17% Auto Magazines 14% checked on internet websites. Another 14% looked in auto magazines. Jitesh Sanghvi – MMS -137, Marketing Page 54 Understanding Consumer Behaviour towards Luxury Products
Luxury Car can be defined in a number of ways depending on the expectations of the people. Some people define luxury car for its brand value while others define it for their hi-tech features. Many consider it a luxury for its looks and superior performance. But majority of the people defined it as a comfort. 60% of the people would define it for its brand whereas 53% would define for its looks. Factors that influence purchase decisio