Operations of the retailer SAINSBURYS

Published Date: 23 Mar 2015

This report provides a view on operations of SAINSBURY'S , the third largest supermarket chain across United Kingdom. SAINSBURY'S, in spite of being the longest standing retail chain has been facing stiff competition from rivals like TESCO , MORRISONS. The competitors seemed to have developed at a faster pace since SAINSBURY'S has been through a difficult time in recent years and TESCO is now twice the size in terms of turnover.

Matter of analysis in terms of SAINSBURY's supermarket is the operational strategies that have been implemented to cope up given the current downturn. The operations management concepts incorporated in SAINSBURY's operational routine can play a vital role to achieve its main performance objectives like customer satisfaction, fast operations, achieving flexibility for the customers need and retaining loyal customers.

There is also a scope for SAINSBURY'S to meet its target growth and regain its position if it is ready to make a few changes in its operations in terms of a better inventory management, robust technological advancements and creating a better customer base. The report discusses the various successful implementations and certain flaws that can be wiped in order to attain smoother operations at SAINSBURY'

OPERATIONS MANAGEMENT ASSIGNMENT

INTRODUCTION:

An operation is a process transforming a set of resources into services and goods. The input resources may be raw materials, information, or even the customer. These resources are transformed into final goods or services by facilities and staff of the operation( Fig 1).

Operations Management is very important in business operations since it forms the heart of the organisation by controlling the system of operation. Operations management plays a vital role because any operation requires a combination of merchandising, logistics, coordination and cost control skills to move products from production facilities to the consumer(2).

[pic] Fig1 Input output transformation model for operations.

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Sainsbury's Supermarkets is the UK's longest standing and third largest major food retailing chain, having opened its first store in 1869. The Sainsbury's brand is built upon a heritage of providing customers with healthy, safe, fresh and tasty food. The stores serve over 18 million customers a week and offer around 30,000 products, having a market share of around 16 per cent(3). An internet-based home delivery shopping service is also available to 88 per cent of UK households.

PROCESS LAYOUT:

Fig.2 Layout design of Sainsbury's

The supermarket is positioned as a process layout. Wherein the physical components are arranged or grouped according to the general function they perform (Fig.2). It operates in a manner that is designed to move the customer through the store until they end up at the cash register. First thing that a customer encounters is the customer services in case of any initial enquiries by the customers. Along the first aisle are aligned the fresh food items for everyday requirements. The dry goods and breads are placed in the middle aisles. The frozen food section is placed near the checkouts to keep them from defrosting while the shopper is moving around the aisles. What makes the layout of the store so coherent is the fact that essentials are lined along the walls and corners and items that are appealing right in the eyesight.

PROCESS FLOW OF THE OPERATION:

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Fig.3 Process flow of Sainsbury's operations.

Sainsbury's process flow illuminates various stages between stocking and delivering the product that a customer chooses to buy from the supermarket (Fig.3). Initially the inventory stores the goods and materials that are held available in stock for the business. To manage the stock there is an effective solution in place named "Wesupply" which has been implemented at Sainsbury by IBM (5) .It allows monitoring the status of orders all across the Sainsbury's network. It regulates the item supply at the shelves, and helps delivery system coordinate with the inventory replenishment. The manager regulates and changes the item price according to the demand . The customer has access to the price rates and various schemes and offers, this is the display stage, once the products are chosen the billing takes place at the cashier, leading to the packaging stage where the customer is handed over the product which was formerly stocked at the inventory.

IMPORTANCE OF PERFORMANCE OBJECTIVE TO THE OPERATION:

THE QUALITY OBJECTIVE:

Sainsbury's customers give most credit to the company's passion for healthy, safe, fresh and tasty food .Despite the present economic conditions the company stands by its quality related objectives. Good food at fair prices, providing a satisfying shopping experience, spreading and reaching out to customers by opening new stores at various locations. Hygiene anh heath and safety issues given utmost importance .

THE SPEED OBJECTIVE:

Sainsbury's tries best to synchronize supply with demands. Goods are made immediately available to the customers. According to the industry speed checks a customer spends an average of eight minutes, from joining a queue to receiving the receipt. Sainsbury's is recruiting an extra and of 10,000 all across the chains to cut down the checkout queues. The extra staff will mainly be the part-time positions (6).

THE DEPENDABILITY OBJECTIVE:

Specifying the supermarket timings , providing product related information and schemes in form of shelf toppers , discounts , posters ,makes the supermarket a reliable place to visit every time .There is a constant availability of parking ,and special slots are reserved for the disabled and 'parent and child' parking at all times .Making shopping at the supermarket a hassle free experience.

THE FLEXIBILITY OBJECTIVE:

Sainsbury's creates brand ranges for various needs, inclusion of healthier and value dishes in addition to the irresistible and authentic dishes, incorporating organic ranges of food if one suffers from allergies and health related issues, defines the level of flexibility Sainsbury caters to for its customers.

Extra tills are opened at peak hours and more staff is recruited to adjust to the number of customers that are served at Sainsbury's.

THE COST OBJECTIVE:

The cost at the supermarket is incurred at maintaining the inventory, implementing various technologies and facility cost, staff cost. The facility cost can be reduced by getting rid of the aging equipment, and using renewable forms of energy. Sainsbury's initiative to switch to Enercon E40 KW ( wind turbine) has lead to enormous cost saving.

VOLUME VARIETY VARIATION AND VISIBILITY CHARACTERISTICS OF SAINSBURY'S:

Volume and variety: A relationship between volume and variety are as shown: the general position of operations is along the diagonal, when the volume is high, variety is high and vice versa.

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Supermarkets offer a high variety of products and yet sell in high volume.. But in this case, the process is standardized for all the customers .All the customers receive similar kind of services, the process is not customised or tailored keeping each individuals needs in mind. Therefore, considering a supermarket process, the variety would still be considered low and the rule still stands. Hence in a supermarket scenario there are high levels of capital investments, systemizations, routinized workflow which leads to low unit costs.

Variations: Sainsbury is in the high levels of demand variation and has changing capacity .The company has to stay in touch with the variations in customer demand constantly which would lead to high unit cost. With various sections at the supermarket ranging from electronics to household items the stacks have to be replenished on the regular bases.

Visibility: A new solution named "Wesupply" has been implemented at Sainsbury by IBM which allows monitoring the status of orders all across the Sainsbury's network, this leads to visibility within operations which amplifies stock availability for the customers.

The supermarket uses various communication tools like discount vouchers, shelf toppers, posters at the entrance and various displays in the aisles to equip the customer with information on product availability and offers. A supermarket website displaying the product promo sections is also available.(11).

INFERRED OPERATIONS STRATEGY OF THE ORGANISATION:

The supermarket aims to meet the "Making Sainsbury great again "target, which would involve generating sales growth of £2.5 billion putting it in a strong position during the latter months of the year(7). The supermarket wants to concentrate on sales-led recovery that makes availability of items its top priority. Introduction of 250 new ranges of products and retaining emphasis on healthier food in the new range "Taste the Difference" advertised by celebrity chef Jamie Oliver has been paying off for the supermarkets growth. With the re-launch of non-food items Sainsbury's offers to drive sales momentum (3).

Sainsbury's another operational strategy pertaining to its employees is to move the HR function to a more centralised, paperless system. It would be a gradual process to turn off the current labour intensive system. The new software system will free up personnel managers from their admin duties to focus more time on training and coaching staff and managers(10).

SUGGESTIONS:

SAINSBURY'S uses "Wesupply" solutions to monitor the status of orders across its entire network and manage the availability of products. This improves the visibility of supply chain performance of the supermarket(5) , but in recent times a new solution named Radio-frequency identification (RFID) is used for the further improvement of inventory accuracy (8). It allows a far more scope of cost cutting and flexibility via wireless mobility. Retail chains like ASDA, TESCO, MARKS n SPENCERS have already incorporated this system into their operations.

CONCLUSION:

Behind the largest companies to the minor stores, there needs to be a system that makes it run. Sainsbury's being the third largest retail chain organisation too dwells on the operations management concepts to be able to manage all the goods and services that they distribute at a global level. The various performance objectives that are important to an organisation like maintaining speed in operations, bringing flexibility to the customers, maintaining the dependability from customers perspective, saving operational cost and enhancing profitability become realizable when operations management focuses on subtle routines and activities of the various processes.

Seeing 1.3 billion additional sales and a wide focus on quality values (Introduction of "Try something new today ") which was branded incredibly successful and encouraged people to adapt better eating habits proves that Sainsbury is well on the path of achieving the target "Making Sainsbury's great again" (9).

REFERENCES

[pic]1) Danny Samson and Mile Terziovski (1999), The relationship between total quality Management Practices and operational performance, Journal of Operations Management, Volume 17 Issue 4: 393-409.

a Department of [pic]Management,[pic] University of Melbourne, Australia

b Department of Business [pic]Management,[pic] Monash University, Australia

Received 11 September 1997;

accepted 8 July 1998.

Available online 10 May 1999.

Abstract

Total quality [pic]management[pic] (TQM) has been a widely applied process for improving competitiveness around the world, but with mixed success. A review of the literature revealed gaps in research in this area of quality/operations [pic]management,[pic] particularly in the area of empirical testing of the effectiveness of TQM implementation. The aim of this study was to examine the total quality [pic]management[pic] practices and [pic]operational[pic] performance of a large number of manufacturing companies in order to determine the relationships between these practices, individually and collectively, and firm performance. We used a large data base of 1200 Australian and New Zealand manufacturing organisations. The reliability and validity (construct, content, criterion) of the practice and performance measures were evaluated. Our study showed that the relationship between TQM practice and organisational performance is significant in a cross-sectional sense, in that TQM practice intensity explains a significant proportion of variance in performance. Some but not all of the categories of TQM practice were particularly strong predictors of performance. The categories of leadership, [pic]management[pic] of people and customer focus were the strongest significant predictors of [pic]operational[pic] performance. This is consistent with literature findings that behavioural factors such as executive commitment, employee empowerment and an open culture can produce competitive advantage more strongly than TQM tools and techniques such as process improvement, benchmarking, and information and analysis.

Author Keywords: Quality; Operations [pic]management[pic]; Performance; Human resource/OM interface; Empirical research

Article Outline

A. Introduction

2. Literature review and research problem background

2.1. Purpose of the literature review

2.2. The development of TQM

3. Theoretical framework and research hypotheses

3.1. TQM elements

3.1.1. Leadership

3.1.2. People management

3.1.3. Customer focus

3.1.4. Strategic planning

3.1.5. Information and analysis

3.1.6. Process management

3.1.7. Performance

3.2. Research hypotheses

3.2.1. Hypothesis H1

3.2.2. Hypothesis H2

4. Methodology

4.1. Background

4.2. Sample

4.3. Survey instrument

4.4. Data preparation

4.4.1. Selection of questions

4.4.2. Screening of outliers

4.4.3. Treatment of incomplete responses

4.5. Analysis procedures

5. Results

6. Discussion of results and findings

6.1. Tests of hypothesis H1

6.1.1. Validity

6.1.1.1. Content validity

6.1.1.2. Construct validity

6.1.1.3. Criterion validity

6.1.2. Reliability

6.2. Test for hypothesis H2

6.3. Findings

7. Conclusions, limitations and further research

Appendix

A.1. Survey questions

A.1.1. Leadership

A.1.2. People management

A.1.3. Customer focus

A.1.4. Planning

A.1.5. Process management

A.1.6. Information and analysis

A.1.7. Organisational performance

References

2) Rodolfo Vázquez , Ignacio A. Rodríguez-Del Bosque, Ana Ma Díaz and Agustín V. Ruiz (2001), Service quality in supermarket retailing: identifying critical service experiences, Journal of retailing and customer services, Volume 8 Issue 1: 1-14.

3) http://www.sainsburys.co.uk

4) http://www.j- sainsbury.co.uk/index.asp?PageID=424ion=&Year=2000&NewsID=130

5) http://www.wesupply.com/news/articles/news_090409

6) http://www.thisislondon.co.uk/news/article-4216114-sainsburys-10000-queue-cutters.do

7) http://www.ukessays.com/essays/accounting/sainsburys-plc.php

8) http://fplreflib.findlay.co.uk/articles/4563/RFID%20barcodes.pdf

9.http://www.independent.co.uk/news/business/news/123-profit-rise-makes-sainsburys- great-again-424381.html

10).http://www.personneltoday.com/articles/2007/08/07/41820/jobs-in-firing-line-as-sainsburys-plans-to-centralise-its-hr.html

11) Chambers, S., Slack, N., Johnston, R., & Betts, A. (2009). Operations And Process Management: Principles and Practices for Strategic Impact. Prentice Hall.

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CUSTOMER    BUYING  BEHAVIOUR

ABSTRACT

    customers make purchases in order to satisfy needs. The wealth of products and services produced in a country make our economy strong.All  the behaviour of human beings during the purchase may be termed as "buyer behaviour".. In this article there is a view about birth of buying ideas, what is buyer behaviour,  How consumer buy, why consumer buy, types, Decision process, Motives,conclusion.

INTRODUCTION

Consumer is the king and it is the consumer determines what a business is, therefore a sound marketing programme start with a careful analysis of the habits, attitudes, motives and needs of consumers. In particular a marketer should find answer to the following questions:

  What are the products they buy?

    Why they buy them?

   How they buy them?

  When they buy them ?

   Where they buy them?

   How often they buy them?

THE BIRTH OF BUYING IDEAS

   Mr.A owns scooter. The scooter is causing dissatisfication because of some defects or troubles in it. He decides to replace it with another scooter. He anticipates the idea of a trouble free and dependable scooter. He decides not to buy a scooter of the same make, because of dissatisfication and lack of confidence. Thus a thought seed about a new  scooter is born in him, the moment he thinks,"I must replace the scooter " the buying ideas come up. With the thought in his mind, he thinks of the benefits. And this leads to further thinking: what sort of a scooter will give the benefits, he wants. The benefits make the desire. He may buy any one of many makes of scooter, which can give the desired benefits. He makes enquiries and observe through talking to his friends. He reads advertisement about the new scooters. He chooses one with all the possible advantages and which is wholly dependable. Mr.A is a prospective customer to a dealer.

WHAT IS BUYER BEHAVIOUR?

  The wealth of products and services produced in a country make our economy strong. Almost all the products, which are available to buyers, have a number of alternative suppliers: substitute products are available to consumers, who make decision to buy products. Therefore a seller most of his time, seeks buyers and tries to please them. In order to be successful, a seller is concerned with.

Who is the customer?

What do consumers buy?

When do consumers buy?

How do consumers buy?

From where do consumers buy?

Why do consumers buy?

A buyer makes a purchase of a particular product or a particular brand and this can be termed " product buying motives" and the reason behind the purchase from a particular seller is " patronage motives"

    When a person gets his pay packet, and if he is educated ,sits down along with his wife and prepares a family budget, by appropriating the amount to different needs. It may happen that after a trip to the market, they might have purchased some items, which are not in the budget, and thus there arises a deviation from the budgeted items and expenditure. all  the behaviour of human beings during the purchase may be termed as "buyer behaviour".

 HOW CONSUMER BUY

 1. Need/Want/Desire is Recognized

In the first step the consumer has determined that for some reason he/she is not satisfied (i.e., consumer's perceived actual condition) and wants to improve his/her situation (i.e., consumer's perceived desired condition). For instance, internal triggers, such as hunger or thirst, may tell the consumer that food or drink is needed. External factors can also trigger consumer's needs. Marketers are particularly good at this through advertising, in-store displays and even the intentional use of scent (e.g., perfume counters).

2. Search for Information

Assuming consumers are motivated to satisfy his or her need, they will next undertake a search for information on possible solutions. The sources used to acquire this information may be as simple as remembering information from past experience (i.e., memory) or the consumer may expend considerable effort to locate information from outside sources (e.g., Internet search, talk with others, etc.). How much effort the consumer directs toward searching depends on such factors as: the importance of satisfying the need, familiarity with available solutions, and the amount of time available to search.

3. Evaluate Options

Consumers' search efforts may result in a set of options from which a choice can be made. It should be noted that there may be two levels to this stage. At level one the consumer may create a set of possible solutions to their needs (i.e., product types) while at level two the consumer may be evaluating particular products (i.e., brands) within each solution. For example, a consumer who needs to replace a television has multiple solutions to choose from such as plasma, LCD and CRT television.

4. Purchase

In many cases the solution chosen by the consumer is the same as the product whose evaluation is the highest. However, this may change when it is actually time to make the purchase. The "intended" purchase may be altered at the time of purchase for many reasons such as: the product is out-of-stock, a competitor offers an incentive at the point-of-purchase (e.g., store salesperson mentions a competitor's offer), the customer lacks the necessary funds (e.g., credit card not working), or members of the consumer's reference group take a negative view of the purchase (e.g., friend is critical of purchase).

 5. After-Purchase Evaluation

Once the consumer has made the purchase they are faced with an evaluation of the decision. If the product performs below the consumer's expectation then he/she will re-evaluate satisfaction with the decision, which at its extreme may result in the consumer returning the product while in less extreme situations the consumer will retain the purchased item but may take a negative view of the product. Such evaluations are more likely to occur in cases of expensive or highly important purchases. To help ease the concerns consumers have with their purchase evaluation, marketers need to be receptive and even encourage consumer contact. Customer service centers and follow-up market research are useful tools in helping to address purchasers' concerns.

Why Consumers Buy :

 customers make purchases in order to satisfy needs.  Some of these needs are basic and must be filled by everyone on the planet (e.g., food, shelter) while others are not required for basic survival and vary depending on the person.  It probably makes more sense to classify needs that are not a necessity as wants or desires.  In fact, in many countries where the standard of living is very high, a large portion of the population's income is spent on wants and desires rather than on basic needs. 

    For example, in planning for a family vacation the mother may make the hotel reservations but others in the family may have input on the hotel choice.  Similarly, a father may purchase snacks at the grocery store but his young child may be the one who selected it from the store shelf.  So understanding consumer purchase behavior involves not only understanding how decisions are made but also understanding the dynamics that influence purchases.

TYPES OF CONSUMER PURCHASE BEHAVIOR

      Consumers are faced with purchase decisions nearly every day.  But not all decisions are treated the same.  Some decisions are more complex than others and thus require more effort by the consumer.  Other decisions are fairly routine and require little effort.  In general, consumers face four types of purchase decisions:

Minor New Purchase - these purchases represent something new to a consumer but in the customer's mind is not a very important purchase in terms of need, money or other reason (e.g., status within a group).

 Minor Re-Purchase - these are the most routine of all purchases and often the consumer returns to purchase the same product without giving much thought to other product options (i.e., consumer is brand loyalty).

Major New Purchase - these purchases are the most difficult of all purchases because the product being purchased is important to the consumer but the consumer has little or no previous experience making these decisions.  The consumer's lack of confidence in making this type of decision often (but not always) requires the consumer to engage in an extensive decision-making process..

Major Re-Purchase - these purchase decisions are also important to the consumer but the consumer feels confident in making these decisions since they have previous experience purchasing the product.

For marketers it is important to understand how consumers treat the purchase decisions they face.  If a company is targeting customers who feel a purchase decision is difficult (i.e., Major New Purchase), their marketing strategy may vary greatly from a company targeting customers who view the purchase decision as routine.  In fact, the same company may face both situations at the same time; for some the product is new, while other customers see the purchase as routine.  The implication of buying behavior for marketers is that different buying situations require different marketing efforts

Consumer Buying Decision Process      

   "Nothing is more difficult and therefore, more precious, than to be able to decide is quoted to be the words of Napoleon. This is amply true in the case of consumer too. It is for this reason that the marketers are bound to have a full knowledge of the consumer - buying decision process.

   However it should be remembered that the actual act of purchasing is only one stage in the process and the process is initiated at the several stages prior to the actual purchase. Secondly even though we find that purchase is one of the final links in the chain of process, not all decision processes lead to purchase. The individual consumer may terminate the process during any stage. Finally not all consumer decisions always include all stages. Persons engaged in extensive decision making usually employ all stages of this decision process. Where as those engaged in limited decisions making and routine response behaviour may omit some stages. The consumer decision process is composed of two parts, the process itself and the factors affecting the process.

  SURVEY BY  THE MARKETING TEAM

   A survey conducted by the marketing team of shoppers stop Ltd. Reveals the psychography of the modern shopper.

Acordingly the survey classifies customers in to the four segments namely

Convenience Shoppers

Value Shoppers

Image Shoppers

Experience Shoppers

Convenience shoppers  for instance ,are people who consume relatively less amount of time while shopping. Also they look out for the width and depth of the range they purchase and conduct their annual shopping at one shot.

Value Shoppers always hunt for value for money ; Prefer quality reassurance and benchmark offerings among other related attributes.

Image Shoppers are fashion- conscious and look out for the latest trends and labels.

On the other hand , Experience Shoppers are attentive and prefer personalized services look out  for the right ambience, prefer giving personal advice on clothing at the time of purchase , and prefer not to buy at one sold.

MARKETING IMPLICATIONS OF CONSUMER'S DECISION PROCESS

          It was during 1960's that a number of theories to explain the consumer 's decision process started appearing. The three leading theorists were Howard-sheth , Engel Kollat-Blackwell and Nicosia. Since then a considerable research on the marketing implications of the process has been developed and tested the applications of many elements of marketing.

        Many of the marketing dtrategies and tactics will have to be developed in relation to consumer attitudes. Marketing strategies ,if effectively used, will go a long way in initiating and developing consumer attitudes in favour of the products.

THE IMPORTANT MOTIVES, INFLUENCING THE ULTIMATE  BUYING BEHAVIOUR OF CUSTOMERS.

1. Fear                         : To overcome theft, you may purchase a burglar alarm(out of  

                                        fear)

2. Desire for money    : Purchasing when the price falls down.

3. Vanity                      : Getting costly items to be admired by others

4. Pride                         : Possessing luxurious items for high position in the society 

5. Love and affection   : When you purchase toys, dresses for your sister, it is out of 

                                       affections.

6. Sex and romance      : Spending much on dresses, ornaments etc.

7. Fashion                      : Imitation motives : Old people dress like young ones.

8. Possession                  : This refers to collection of stamps, coins etc.

9. Health and Physical :Purchasing health foods, vitamins etc.

   Well being

10. Comfort  and          :Purchasing equipments like refrigerator, pressure cookers,  mixy        convenience                    etc.

 

ECONOMIC FACTOR AFFECT THE BUYER'S BEHAVIOUR

1.Disposal personal income :

    The economists made attempts to establish a relationship between income and spending. Disposal personal income represents potential purchasing power that a buyer has. The  change in income has a direct relation on buying habits.

 2.Size of family income :

   The size of family and size of family income affect the spending and saving patterns. Generally large family spend more and short family spend less, in comparison.

 3. Income expectations :

    The expected income to receive in future has a direct relation with the buying behaviour. The expectation of higher or lower income has a direct effect on spending plans.

 4.Propensity to consume and to save :

   This goes to the habit of spending or saving with the disposal income of buyers. If the buyers give importance to present needs, then they dispose of their income. And buyers spend less if they give importance to future needs.

 5. Liquidity of Fund :

    The present buying plans are influenced greatly by liquidity of assets i.e., cash and assets readily convertible into cash, eg bonds, bank balances etc.,

 6. Consumer Credit :

  " Buy now and pay later" plays its role effectively in the rapid growth of markets for car, scooter, radio, furniture and the like.

Economic model suggests behavioural hypothsis :

Lower the price of the product, higher the sales.

Lower the price of substitute products, lower the sales of this product

Higher the real income, higher the sales of the product.

Higher the promotional expenses, higher the sales.

Internal influences of buyers

psychographics (lifestyle),

 personality, motivation, knowledge,

attitudes,

beliefs, and

feelings.

demographics,

consumer behaviour concern with consumer need consumer actions in the direction of satisfing needs leads to his behaviour behaviour of every individuals depend on thinking process.

EXTERNAL INFLUENCES OF BUYERS

 culture,

sub-culture,

Locality,

royalty,

ethnicity,

family,

 social class,

reference groups,

lifestyle, and

market mix factors.

.CONCLUSION

Competing for the consumer is a never-ending challenge. This is due principally to the uniqueness and competitiveness of each individual market, for they are all different and all require different approaches" . Knowledge of the buying motives of consumers is essential for a marketer.The changes in the market are brought by the consumers.

 REFERENCES

 Consumer Behavior In Indian Perspective - Suja Nair - Himalaya Publishers

 Consumer Behaviour - Walker

Modern marketing - - R.S.N Pillai, Bagavathi

Read more: http://www.articlesbase.com/marketing-articles/customer-buying-behaviour-999729.html#ixzz0xqBoDdc1 

Under Creative Commons License: Attribution

Introduction

Possibly the most challenging concept in the marketing is to deal with understanding the buyer behaviour. Consumer Buying Behaviour refers to the buying behaviour of the final customers, and households who buy goods and services for personal consumption. It is fascinating but different area to research and this is particularly relevant in the tourism field, where the decision to purchase by a consumer is of emotional significance.

Consumers vary tremendously in age, income, education level and tastes and they buy an incredible variety of goods and services. Today market place has become very competitive. During the last 20 years hundreds of hotel companies developed new restaurants and hotels around the globe. In addition hospitality and tourism industry have undergone globalisation which has increased the competitors within the industry. So to attract the customers, the company that really understand how consumers will respond to different product features, price and advertising appeal has a great advantage over its competitors. Consumer behaviour is affected by many uncontrollable factors and their purchases are strongly influenced by cultural, social, personal and psychological factors. These factors cannot be control by marketers but must be taken into account before launching product or advertising the product.

Factors affecting consumer buying behaviour

Consumer decision making is essentially a problem solving process. Most customers, whether individual customers or organisational buyers, go through similar mental processes in deciding which products and brands to buy. The more marketers know about the factors affecting their customers buying behaviour the greater their ability to design attractive product or service offerings to define and target meaningful market segments, and to develop marketing programs to fit the concerns and desires of those segments. The factors affecting consumer behaviour are as follows:-

1. Cultural Factors: - Cultural factors exert the broadest and deepest influence on consumer behaviour. It has a significant impact on the consumer buying behaviour. Cultural factors consist of culture, subculture and social class.

(A) Culture: - Culture is the most basic cause of a person's wants and behaviour. It comprises the basic values, perceptions, wants and behaviours that person learns continuously in society. Cultural values and beliefs tend to be relatively stable over time, but they can change from one generation to the next in response to changing conditions in society. For example, the baby boomers born in the United States between 1946 and 1960 have somewhat different values and behaviour patterns from those of their parents. Culture is an integral part of the hospitality and travel industry because it determines our lifestyle. Marketers are always trying to spot cultural shifts which might point the new products that might be wanted by customers or to increase demand. For example the cultural shift towards greater concern about health and fitness has created opportunities which resulted in many hotels adding exercise rooms or health clubs so that their guest can have access to it. And now companies are servicing customers who wish to buy low calorie food like McDonalds, Burger king and providing activity and health related holidays etc. Similarly the increased desire for leisure time has resulted in increased demand for convenience products and services such as microwave ovens, ready meals and direct marketing service businesses such as telephone banking and insurance.

(B) Subculture: - Each culture contains smaller subculture or groups of people with shared value systems based on common life experiences and situations. Many subcultures make up important market segments and marketers often design products and marketing programs according to their needs. For example, the average American family now has two wage earners who probably share decisions relation to vacations, car, financial instruments and major furniture items. In contrast, Korean -Americans as a subculture in America are much more inclined to favour the male in almost all decisions, including food. Now the American markets becoming more diverse so the companies are seeking managers who understand subcultures

Cultural differences across countries create both problems and opportunities for international marketers. Although consumers in different countries may have some things in common their value, attitudes, tastes etc but still it is a difficult task for the marketers to understand consumer behaviour outside their home country. Failing to understand the differences in customs and behaviours of other country can be fall down of company and its product at international level. For example , Burger king went to India without understanding the Indian culture which forced them to close down and same thing happened to KFC when they went to India .So the marketers must decide on the degree to which they will adapt their products and marketing programs to meet the unique need of consumer in various markets.

(2) Social Factors: - Almost every society has some form social class structure. Every society has its status groupings largely based on similarities in income, education and occupation. Social classes are relatively permanent and ordered divisions in a society whose members shares similar values, interests and behaviours. Researchers have invented the five typical social class are upper, upper-middle, and middle, working and lower. Social class in nations like USA, Canada, Australia and New Zealand is not indicated by a single factor such as income but it is measured by combination of income, occupation, education wealth and other variables. Social classes show distinct product and brand preferences in areas such as food, travel and leisure activity. Some marketers focus on only one class. For example, Marriott Hotel in States targets only upper class and the restaurants in the downtown of Los Angles focus on middle class.

(A) Groups: - An individual's attitudes and behaviour are influenced by many small groups. These include a variety of groups that effect consumer behaviour through normative compliance, value expressed influence and informational influence. Reference groups serve as direct or indirect point of comparison or reference in the forming of a person's attitude and behaviour. Marketers try to identify the reference groups of their target market. They influence consumers in many ways like they expose the person to new behaviours and lifestyles; they influence the person's attitudes and self concept. The importance of group influence varies by product and brand. It tends to be stronger when product is visible and weak when purchases of product made privately. Certain nightclubs can be associated with reference groups, attracting people who belong or wish to belong to the groups who frequent the night clubs.

(B) The Family: - Family members have a strong influence on buyer behaviour. Marketers are interested in the roles and influence of the husband, wife and children on the purchase on the different products and services. Family members tend to specialize in the purchase of certain products either because of their interest or expertise or the role structure of family. The influence of various family members varies substantially across countries. Generally, the more traditional the society the more men hold the power. As women become more educated and more influential as wage earners in developing nation, more joint decision making will happen. Buying roles change with evolving consumer lifestyles. In America the wife traditionally has been the main purchasing agent for the family especially in the areas of food, household products and clothing. Children for instance, exert a large influence on decisions involving fast food restaurants. McDonalds aims fast food advertisement directly at children.

(C) Roles and Status: - Role things you should do based on the expectations of you from your position within a group. People have many roles. Husband, father, employer, Individuals role are continuing to change therefore marketers must continue to update information. Family is the most basic group a person belongs to. Marketers must understand that each role influences buying behaviour. For example, college dining with parents may act differently than when they are dining with peers. Our roles are also influenced by our surroundings. People dining in elegant restaurants behave differently than when they dine at any fast food restaurants. Each role carries a status reflecting the general esteem given to it by society. People often choose products that show their status in society. For example a business travel may get upset when all first class seats are sold in the desired flight and being forced to travel in economy class. So the marketers and sales professional have to be careful regarding the role and status of the prospective customer.

(3) Personal Factors: - Personal factors include individual characteristics that, when taken in aggregate, distinguish the individual from others of the same social group and culture. These include age, life-cycle stage, occupation, economic circumstances, and lifestyle. A consumer's personality and self-conception will also influence his or her buying behaviour.

(A) Demographic: - Demographic influences include the individual's characteristics such as age, gender, ethnic origin, economic situation, family lifecycle and occupation. It also influences the nature of consumer needs and wants, their ability to buy products or services to satisfy those needs and consumers attitudes toward and preferences for different products and brands. Preferences for leisure activities, travel destinations, food and entertainment are often age related. For example, older consumers spend more on medical care and travel and less on home furnishings and clothing than do younger people, the presence of young children obviously affects the purchasing of a variety of goods and services. Age related factors are very important but its often overlooked by marketers. Successful marketing to various age segments may require specialization and targeted strategies. It requires a marketing staff and advertising agency with people of varying ages and cultural backgrounds.

(B) Situational factors: - Situational factors influence the consumer's buying decision when changes occur in the consumer's circumstances. A person's economic situation greatly affects product choice and the decision to purchase a particular product. A rise in income may lead the consumer to think about purchasing a new car. On the other hand, being made redundant may cause the consumer to cancel a holiday. Companies must take advantage of opportunities caused by economic upturns and take defensive steps when facing an economic downturn.

(C) Lifestyle: - People coming from the same culture, social class and occupation may have quite different lifestyles. This influencing factor relates to the way we live through the activities we engage in and interests we express. In simple terms it is what we value out of life. Lifestyle is often determined by how we spend our time and money. Marketers search for relationships between their products and people who are achievement oriented. A chef may then target its restaurant more clearly at the achiever lifestyle. For marketers it is important to know that consumers make purchase decisions to support their self concept. For example, when examining consumers a marketer may initially build marketing strategy around more obvious clues to consumption behaviour, such as consumer's demographic indicators e.g., age, occupation, income.

(4) Psychological Factors: - Although marketers try to define groups of potential customers with common attributes or interests, as a useful unit for the formulation of marketing strategies, it should not be forgotten that such groups or market segments are still made up of individuals who are different from each other. A person's buying choices are influenced by five psychological factors such as Motivation, Perception, Personality, Ability and Knowledge and Attitude.

(A) Motivation: - A person has many needs at any given time. Some are biological arising from hunger, thirst and discomfort. A motive is an internal force that encourages the consumer towards a particular course of action; it has both intensity and direction. Motivation is also closely tied to the concept of involvement, which relates to how much effort the consumer will exert in making a decision. Highly motivated consumers will want to get mentally and physically involved in the purchase process. Not all products have a high percentage of highly involved customers e.g. milk but marketers who market products and services that may lead to high level of consumer involvement should prepare options that will be attractive to this group. A motive is an internal energizing force that orients a person's activities toward satisfying a need or achieving a goal. Actions are effected by a set of motives, not just one. If marketers can identify motives then they can better develop a marketing mix.

Maslow's hierarchy of needs has long been used as a framework for classifying basic motivations. Five groups of needs are stacked one on top of other and form a progression. Having achieved satisfaction on the lowest level, the individual can progress to strive to achieve the goals of the next level up.

(B) Perception: - Perception is the process of selecting, organizing and interpreting information inputs to produce meaning. A motivated person is ready to act. How that person acts is influenced by his or her perception. When consumers collect information about a high involvement service such as a cruise, they follow a series of steps, or a hierarchy of effects. For example seeing an advertisement for food when you are hungry is more likely to produce a positive response than seeing the same advertisement after having a heavy meal. So marketers hope that their messages reach target audiences when they are relaxed, at leisure and at ease with the world, because then the individual is more likely to place a positive interpretation on the message and its less likely to be distracted by the other pressures and needs.

(C) Personality: - Personality, consisting of all the features, traits, behaviours and experiences that make each of us distinctive and unique. With high involvement products, where there is a strong emotional and psychological link between the product and the consumer, it is relatively easy to see how personality might affect choice and decision making. Personality can be useful in analyzing consumer behaviour for some product or brand choices. For example, a beer company may discover that heavy beer drinkers tend to rank high in sociability and aggressiveness. This information can be used to establish a brand image for the beer and to suggest the type of people to show in an advertisement.

(D) Attitude: - An attitude is a stance that an individual takes on a subject that predisposes them to react in a certain way to that subject. In marketing terms, consumers can develop attitudes to any kind of product or service or indeed to any aspect of the marketing mix and these attitudes will affect consumer behaviour. For example, many people who have developed the attitude that eating healthy food is important perceive chicken as healthy alternative to beef and pork. Attitudes put people in a frame of mind for liking or disliking things. In hotels and restaurants, first time customers who develop an immediate negative attitude will be prevented from returning.

Conclusion

Marketers can see that understanding consumer behaviour is a vital aspect of marketing. Marketers need to understand the role of involvement and habit, information processing and the concept of life values in consumer behaviour as well as cultural determinants. They must exercise care in analyzing consumer behaviour. Consumers often turn down what appears to be a winning offer. As we have seen that understanding consumer buying behaviour is never simple and it is affected by many different factors, yet understanding it is the essential task of marketing management.