Project – ASSESSING THE FACTORS INFLUENCING CONSUMER BUYING BEHAVIOR

CHAPTER ONE

INTRODUCTION

1.1     Background of the Study

This chapter presented in the following order; background of the study, statement of the problem, objectives of the study, hypothesis and significance of the study. Consumer is a person who desires, needs and requires marketing components in their capacity as buyer. Typically, marketers are defined to have the ability to control the behaviours of customers, but actually they have neither power nor information for that. Marketer may influence their buying behavior but not control (Durmaz, Çelik and Oruç, 2011). Consumer behaviour deals with many other issues; the mental, emotional and physical activities that people engage in when selecting, purchasing, using and disposing of products and services so as to satisfy needs and desires (Pariest, Carter and Statt, 2013).

Fast moving consumer goods (FMCGs) are types of goods that are purchased for almost immediate consumption (Majumdar, 2014). The average consumer spends a lot of their total budget on FMCGs (Celen, Erdogan, & Taymaz, 2015). It is therefore important for organizations to understand what activities companies that sell FMCGs do in order to achieve customer value and hence maintain competitiveness (Burt, 2014).

At present, the competitive market forced producers to produce goods based on customer needs (Tafler, 2014). The study of consumer purchase behavior, which was initially known as consumer behavior, offers relevant information regarding consumers and their consumption patterns. Consumer behavior plays a key role for all marketing activities which have the main use of promoting and selling buying products (Fratu, 2011). Basic theory consumer behaviour theory suggests that consumers make product choice decisions based on the advertised images they form of different brands (Myers & Sar 2015).

Globally, the United Kingdom Gilbert (1992) uncovered that it is important to uncover the characteristics of buying as a product as they have an implication for the nature of consumer behaviour. Zhou (2013) conducted an analysis between Chinese and foreign consumer behaviour. In foreign countries, the development of paid leave system is more mature, and most people travel in the paid vacation time. While in China, paid leave system is only in large enterprises, and people can go on vacation or leave out. The Spring Festival, the Mid-Autumn Festival of home culture makes peoples’ travel time received a very big restriction.

African consumers tend to shop for extended family and community members, while Western consumers are more likely to purchase for immediate family (Matondo, 2012). Eric (2012) researched to study the influence of sales promotion on consumer buying behavior in the telecom industry in Ghana. In the same vein, Antwi-Boateng, OwusuPrempeh and Asuamah (2013), while assessing the factors influencing the consumption of pork and poultry meat in Ghana, found that consumers preferred poultry meat to pork and consumed more poultry than pork. Nkang and Effiong (2014) studied the influence of consumer’s perception on pork and poultry meat consumption in Calabar South Local Government in Cross River State, Nigeria. They found age, marital status, source of market and occupation of the consumers were positive but were not statistically significant at 5%.

Locally, with rising cost of commodities, the consumers in Nigeria are pretty cost conscious. In Kibera, Nairobi-Nigeria, consumers are using energy saving cooking stoves since it helps them save money (Lambe &Senyagwa, 2013). In line with observations by

De Groote and Kimenju (2008), culture influences consumers’ buying behavior. In Nigeria for example, consumers are buying indigenous food for their personal health benefits. This trend has made consumers to buy such vegetables from supermarkets that have aligned to such individual consumer needs.

In Nigeria, consumers are increasingly choosing to buy traditional vegetables nationally with the current hype for traditional foods benefits from health practitioners (Grivetti &

Ogle, 2000). This change in cultural perspective is influencing consumer buying behavior (Kimiywe, et al., 2007). Moreover, consumers from Western Nigeria buy less white maize flour while those from Central Nigeria buy more of the fortified maize meal (De Groote, &Kimenju, 2008). In addition, although consumers appreciate the role genetically modified foods play in alleviating food shortage, they are not willing to buy these food products. This is because the same consumers fear possible health repercussions (Kimenju, De Groote, Karugia, Mbogoh, & Poland, 2005). Consumers make buying decisions every day and many people do not even know the factors that drive them. Fast Moving Consumer Goods are always used commodities in most households and the purchasing decision can be made routinely without any conscious activity.

1.3 Statement of the Problem

The rapid expansion of supermarket business with reported huge footfalls does not explain how this industry is still experiencing dismal sales performance (Oxford Business

Group, 2016). In a bid to turn around their performance, supermarkets are desperately increasing sales promotions in the hope that they will attract more consumers (Rallapalli, Ganesan, Chintalapudi, Padmanabhan & Qiu 2014). The reason as to why this is a critical challenge is due to the fact that supermarkets are still conducting business as usual. They are simply increasing the usual promotions such as price discount offers and branded promotions.

Srivastava and Kumar (2013) analysed that FMCG sector is a vital contributor to India’s Gross Domestic Product. Over 73% of FMCG products are sold to middle class households in which over 52% is in rural India.  As a result, private labeling has become a major threat to FMCG brands that now have to differentiate their brand benefits even more strongly (Ranu, 2014). According to Aperio (2014) retailers are actually building trust better than FMCG brands because they get higher visibility in store, more shelf space, knowledge of promotional programmes, which means they can be more

competitive. This is a major threat to other FMCG brands (Fox, 2014).

Strategic leveraging on consumer buying behavior determinants would enable the supermarkets to grow their businesses sustainably. The previous studies have not dealt with the determinants of customers buying behaviour in supermarkets in Festac Town, because of this backdrop, this study is unique by concentrating on FMCG, because it makes a customer to visit a supermarket on a routine basis. This study established the determinants of customers buying behaviour in supermarkets in Festac Town.

1.4 Objectives of the study

The study assessesthe factors influencing consumer buying behavior

1.4.1 General objective

The general objective of the study was to establish the determinants of customers buying behaviour of fast-moving consumer goods in supermarkets in Festac Town.

1.4.2 Specific objectives

The study was guided by the following specific objectives:

1. To determine the cultural factors affecting customers buying behaviour of fastmoving consumer goods in supermarkets in Festac Town
2. To establish the psychological factors affecting customers buying behaviour of fast-moving consumer goods in supermarkets in Festac Town

• To identify the social factors affecting customers buying behaviour of fastmoving consumer goods in supermarkets in Festac Town

1. To assess the personal factors affecting customers buying behaviour of fastmoving consumer goods in supermarkets in Festac Town

1.5 Hypotheses

Ho₁:There is no significant effect of cultural factors on customers buying behaviour of fast-moving consumer goods in supermarkets in Festac Town

Ho₂:There is no significant effect of psychological factors on customers buying behaviour of fast-moving consumer goods in supermarkets in Festac Town

Ho₃:There is no significant effect of social factors on customers buying behaviour of fast-moving consumer goods in supermarkets in Festac Town

Ho₄:There is no significant effect of personal of customers buying behaviour of fastmoving consumer goods in supermarkets in Festac Town

 

1.6 Significance of the Study

This study will be beneficial to the consumers in that they had more knowledge about fast moving consumer goods in supermarkets and the importance of outlet, they may learn about the different factors affecting their buying decisions. Both current and new entrants in the retail sector, especially the supermarket sub sector will find the findings useful in gaining customer loyalty and increasing the traffic of customers who visit their outlets. They may get guidelines for maximization of returns on their investments through attracting customers.

The Government of Nigeria will get valuable source of information on the FMCG industry, which is a major contributor to the economy. It may help the government come up with ways to mitigate challenges of FMCG and support the development of the

industry.

The outcome of this research may beneficial to the management of organizations that deal with fast moving consumer goods in guiding them to come up with local and global strategies. These are strategies that may help them to invest more into the businesses and develop within the industry. This study may be helpful to other researches and academic institutions to learn about Nigeria’s fast-moving consumer goods in supermarkets.  Customers may benefit from this study when the various supermarkets incorporate new customer attraction strategies. Customers will enjoy more and better services. When their motivation is focused on, customers will be more contented with services making their shopping experiences enjoyable.

1.7 Scope of the Study

The study sought to establish the determinants of customers buying behaviour of fastmoving consumer goods in supermarkets in Festac Town. This was achieved by looking at the cultural, personal, social and psychological factors effecting consumer buying behavior. The study was conducted on consumer buying behaviour of fast-moving consumer goods in supermarkets in Eldoret. This study was based on selected supermarkets customers in Eldoret. It includes a target of respondents who have disposable income to spend on fast moving consumer goods in supermarkets.  The study was conducted in between April to August 2018.

1.8 Limitations of the study

The limitations of the study were the fear of anonymity on the side of the respondents. This was eliminated by the assurance that the study was for academic purposes and that the findings are not to be shared to any other party. FMCG includes a lot of products which are numerous to count and hence a study may select a few of them. The study focused only on selected fast-Moving Consumer Goods (FMCG) in supermarkets in Festac Town.

1.9. Operational Definition of Terms

1. Assessing: This refers to the process of making a judgment about something. It involves evaluating or estimating the nature, ability, or quality of a particular subject or matter.
2. Factors: In the context of a discussion, factors refer to the various elements or aspects that contribute to a particular result or situation. They are the variables that can influence the outcome of a situation.
3. Influencing: This term refers to the capacity to have an effect on someone or something. It’s about shaping or altering behaviors, thoughts, or feelings.
4. Consumer: A consumer is an individual or group that uses goods or services produced within an economic system. They are the end-users in the distribution chain of goods and services.
5. Buying Behavior: This term refers to the decision-making process and actions of people involved in buying and using products. It includes both individual and group behaviors, and considers the reasons why consumers select, purchase, use, and dispose of goods and services.

 

Project – ASSESSING THE FACTORS INFLUENCING CONSUMER BUYING BEHAVIOR