The chapter comprises of Meaning and Characteristics, Importance, Factors Influencing Consumer Behaviour, Consumer Purchase Decision Process, Buying Roles, Buying Motives, Buyer Behaviour Models.
Consumer behaviour is the study of how individual customers, groups or organizations select, buy, use, and dispose ideas, goods, and services to satisfy their needs and wants.
It refers to the. actions of the consumers in the marketplace and the underlying motives for those actions.
Consumer behaviour is the study of how people make decisions about what they buy, want, need, or act in regards to a product, service or company.
It is a study of the actions of the consumers that drive them to buy and use certain products. Understanding consumer buying behavior is most important for marketers as it helps them to relate better to the expectation of the consumers.
a) Consumer behavior is the part of human behavior: This cannot be separated. Human behavior decides what to buy, when to buy etc. This is unpredictable in nature. Based on the past behavioral pattern one can at least estimate like the past he might behave.
b) Learning the consumer is difficult and complex as it involves the study of hum beings: Each Individual behaves differently when he is placed at different situations. Every day is a lesson from each and every individual while we learn the consumer behavior. Today one may purchase a product because of its smell, tomorrow it may vary and he will purchase another due to some another reason.
c) Consumer behavior is dynamic: A consumer's behavior is always changing in nature: The taste and preference of the people vary. According to that consumers behave differently. As the modern world changes the consumer's behaving pattern also changes.
d) Consumer behavior is influenced by psychological, social and physical factors: A consumer may be loyal with a product due to its status values. Another may stick with a product due to its economy in price. Understanding these factors by a marketer is crucial before placing the product to the consumers.
1. To design production policies: This is the first importance of consumer behaviour and it means that all the production policies have designed taking into consideration the consumer preference so that product can be successful in the market.
2. Know the effect of price on buying: This is the second consumer behaviour importance and it means that consumer behavior can help in understanding the effect of price on buying. Whenever the price is moderate on cheap more and more customer will buy the product.
After the time of production, there comes a time in which the company has to decide what the price of our product will be because it helps to divide the categories of the customer and also helps to attain more sales.
3. Exploit the market opportunities: This is the third importance or significance of consumer behaviour and it means that the change in consumer preference can be a good opportunity for the marketing
The chapter comprises of Service Marketing, E-Marketing, Green Marketing, Customer Relationship Management, Rural Marketing; Other Emerging Trends- Ethical Issues in Marketing.
Service is an act or performance that one party can offer to another that is essentially intangible and does not result in any ownership of anything. Its production may or may not be tied to physical products.(Philip Kotler)
It is based on relationship and value.
It may be used to market a service or product.
What is Service Marketing?
The American Marketing Association defines services marketing as “an organizational function and a set of processes for identifying or creating, communicating, and delivering value to customers and for managing customer relationship in a way that benefit the organization and stake-holders”.
Service marketing is involved in designing, delivering, and doing post-delivery analysis of services for optimizing reach, measuring customer satisfaction, and standing-out from identical services offered by other market players.
Intangibility: A service is not a physical product that you can touch or see. A service can be experienced by the buyer or the receiver. Also, you can not judge the quality of the service before consumption.
Heterogeneous: There can be no perfect standardization of services. Even if the service provider remains the same, the quality of the service may differ from time to time.
Inseparability: One unique characteristic of services is that the service and the service provider cannot be separated. Unlike with goods/products the manufacturing and the consumption of services cannot be separated by storage.
No Stock Maintenance: The production and consumption of services are not inseparable because storage of services is not possible. Being an intangible transaction there can never be an inventory of services.
The potential customers form an impression about the service on the basis of service environment. The service environment represents the physical back drop that surrounds the service.
For example, providing hygienic food is the core service in a hotel or restaurant. Customers expect the restaurants to be maintained clean, offer flexible dining hours prompt service, soft music, décor, exotic menu etc.
Advantages of Service Marketing: 1, Repeat business
When you build a plan of service to reach your customers, you can expect a reward of repeat business from them. The goal of effectively marketing your brand is to capture the attention of your target market.
2. referrals
The next best thing to having your clients come back is to have them tell others about their experience and recommend your products or services to them. You must consider that if your customers have a bad experience, it is likely they will tell 10 people about that negative experiences also.
3. publicity
Other benefits from your good service are through publicity. As the buzz flows about your outstanding service, from following through on what you’ve promised.
Unit V AMM Green Marketing, CRM & Rural MarketingDayanand Huded
The Presentation comprises of Green marketing, Customer relationship management and rural marketing.
Green marketing is the marketing of products that are presumed to be environmentally safe. It incorporates a broad range of activities, including product modification, changes to the production process, sustainable packaging, as well as modifying advertising.
The term ‘green’ is indicative of purity. Green means pure in quality and fair or just in dealing. For example, green advertising means advertising without adverse impact on society. Green message means matured and neutral facts, free from exaggeration or ambiguity.
CRM: Customer Relationship Management is a comprehensive approach for creating, maintaining and expanding customer relationships.
CRM “is a business strategy that aims to understand, anticipate and manage the needs of an organisation’s current and potential customers”
It is a “comprehensive approach which provides seamless integration of every area of business that touches the customer- namely marketing, sales, customer services and field support through the integration of people, process and technology”
CRM is a shift from traditional marketing as it focuses on the retention of customers in addition to the acquisition of new customers
“The expression Customer Relationship Management (CRM) is becoming standard terminology, replacing what is widely perceived to be a misleadingly narrow term, relationship marketing (RM)”
CRM (Customer Relationship Management) is a comprehensive strategy and process of acquiring, retaining and partnering with selective customers to create superior value for the company and the customer.
The basic objective of CRM is to increase marketing efficiency and effectiveness.
Rural Marketing:
Rural marketing is a practise of assessing, persuading and converting the needs, wants, purchasing power of the customers into effective demand for products and service out for sale which would help in sufficing the requirements of people in the rural areas and thus increase the satisfaction levels as well as standard of living.
There are 600,000 villages in India. 25% of all villages account for 65% of the total rural population. So we can contact 65% of 680 million or 700 million population by simply contacting 150000 villages – which shows the huge potential of this market.
Rural marketing involves the process of developing, pricing, promoting, distributing rural specific product and a service leading to exchange between rural and urban market which satisfies consumer demand and also achieves organizational objectives.
The chapter comprises of The Depositories Act, 1996; SEBI Depositories and Participants Regulations 1996 and 2012; Types of Depositories - NSDL, CDSL and Depository Participant; Dematerialization - International Securities Identification Number (ISIN) - Procedure for Dematerialization and Rematerialization; Settlement of Off- Market Transactions: Insider Trading - Legal Framework for Investor Protection in India; Internet Initiatives at Depository services; Credit Rating- Meaning and Necessity, Methodology of Credit Rating, Credit Rating Agencies in India.
What is Depository?
An organization where the securities of an investor are held in electronic form at the request of the investor and which carries out the securities transactions by book entry through the medium of a depository participant.
What is a Depository System?
A system whereby transfer of securities takes place by means of book entry on the ledgers of the Depository without physical movement of scripts.
Problems Resulted in Formation of Depository
Before introduction of Depository system, the problems faced by investors and corporates in handling large volume of paper were as follows:
1)Bad deliveries, 2) Fake certificates, 3) Loss of certificates in transit
4) Mutilation of certificates, 5) Delays in transfer Long settlement cycles, 6), Mismatch of signatures, 7) Delay in refund and remission of dividend etc.
Code of Conduct for Participants
1. A participant shall make all efforts to protect the interests of investors.
2. A participant shall always endeavour to—
(a) render the best possible advice to the clients having regard to the clients needs and the environments and his own professional skills;
grievances of investors are redressed without any delay
3. A participant shall maintain high standards of integrity in all its dealings with its clients and other intermediaries, in the conduct of its business.
4. A participant shall be prompt and diligent in opening of a beneficial owner account, dispatch of the dematerialisation request form, rematerialisation request form and execution of debit instruction slip and in all the other activities undertaken by him on behalf of the beneficial owners.
5. A participant shall endeavour to resolve all the complaints against it or in respect of the activities carried out by it as quickly as possible, and not later than one month of receipt.
6. A participant shall not increase charges/fees for the services rendered without proper advance notice to the beneficial owners.
7. A participant shall not indulge in any unfair competition, which is likely to harm the interests of other participants or investors or is likely to place such other participants in a disadvantageous position while competing for or executing any assignment.
8. A participant shall not make any exaggerated statement whether oral or written to the clients either about its qualifications or capability to render certain services or about its achievements in regard to SE.
The chapter comprises of Service Marketing, E-Marketing, Green Marketing, Customer Relationship Management, Rural Marketing; Other Emerging Trends- Ethical Issues in Marketing.
Service is an act or performance that one party can offer to another that is essentially intangible and does not result in any ownership of anything. Its production may or may not be tied to physical products.(Philip Kotler)
It is based on relationship and value.
It may be used to market a service or product.
What is Service Marketing?
The American Marketing Association defines services marketing as “an organizational function and a set of processes for identifying or creating, communicating, and delivering value to customers and for managing customer relationship in a way that benefit the organization and stake-holders”.
Service marketing is involved in designing, delivering, and doing post-delivery analysis of services for optimizing reach, measuring customer satisfaction, and standing-out from identical services offered by other market players.
Intangibility: A service is not a physical product that you can touch or see. A service can be experienced by the buyer or the receiver. Also, you can not judge the quality of the service before consumption.
Heterogeneous: There can be no perfect standardization of services. Even if the service provider remains the same, the quality of the service may differ from time to time.
Inseparability: One unique characteristic of services is that the service and the service provider cannot be separated. Unlike with goods/products the manufacturing and the consumption of services cannot be separated by storage.
No Stock Maintenance: The production and consumption of services are not inseparable because storage of services is not possible. Being an intangible transaction there can never be an inventory of services.
The potential customers form an impression about the service on the basis of service environment. The service environment represents the physical back drop that surrounds the service.
For example, providing hygienic food is the core service in a hotel or restaurant. Customers expect the restaurants to be maintained clean, offer flexible dining hours prompt service, soft music, décor, exotic menu etc.
Advantages of Service Marketing: 1, Repeat business
When you build a plan of service to reach your customers, you can expect a reward of repeat business from them. The goal of effectively marketing your brand is to capture the attention of your target market.
2. referrals
The next best thing to having your clients come back is to have them tell others about their experience and recommend your products or services to them. You must consider that if your customers have a bad experience, it is likely they will tell 10 people about that negative experiences also.
3. publicity
Other benefits from your good service are through publicity. As the buzz flows about your outstanding service, from following through on what you’ve promised.
Unit V AMM Green Marketing, CRM & Rural MarketingDayanand Huded
The Presentation comprises of Green marketing, Customer relationship management and rural marketing.
Green marketing is the marketing of products that are presumed to be environmentally safe. It incorporates a broad range of activities, including product modification, changes to the production process, sustainable packaging, as well as modifying advertising.
The term ‘green’ is indicative of purity. Green means pure in quality and fair or just in dealing. For example, green advertising means advertising without adverse impact on society. Green message means matured and neutral facts, free from exaggeration or ambiguity.
CRM: Customer Relationship Management is a comprehensive approach for creating, maintaining and expanding customer relationships.
CRM “is a business strategy that aims to understand, anticipate and manage the needs of an organisation’s current and potential customers”
It is a “comprehensive approach which provides seamless integration of every area of business that touches the customer- namely marketing, sales, customer services and field support through the integration of people, process and technology”
CRM is a shift from traditional marketing as it focuses on the retention of customers in addition to the acquisition of new customers
“The expression Customer Relationship Management (CRM) is becoming standard terminology, replacing what is widely perceived to be a misleadingly narrow term, relationship marketing (RM)”
CRM (Customer Relationship Management) is a comprehensive strategy and process of acquiring, retaining and partnering with selective customers to create superior value for the company and the customer.
The basic objective of CRM is to increase marketing efficiency and effectiveness.
Rural Marketing:
Rural marketing is a practise of assessing, persuading and converting the needs, wants, purchasing power of the customers into effective demand for products and service out for sale which would help in sufficing the requirements of people in the rural areas and thus increase the satisfaction levels as well as standard of living.
There are 600,000 villages in India. 25% of all villages account for 65% of the total rural population. So we can contact 65% of 680 million or 700 million population by simply contacting 150000 villages – which shows the huge potential of this market.
Rural marketing involves the process of developing, pricing, promoting, distributing rural specific product and a service leading to exchange between rural and urban market which satisfies consumer demand and also achieves organizational objectives.
The chapter comprises of The Depositories Act, 1996; SEBI Depositories and Participants Regulations 1996 and 2012; Types of Depositories - NSDL, CDSL and Depository Participant; Dematerialization - International Securities Identification Number (ISIN) - Procedure for Dematerialization and Rematerialization; Settlement of Off- Market Transactions: Insider Trading - Legal Framework for Investor Protection in India; Internet Initiatives at Depository services; Credit Rating- Meaning and Necessity, Methodology of Credit Rating, Credit Rating Agencies in India.
What is Depository?
An organization where the securities of an investor are held in electronic form at the request of the investor and which carries out the securities transactions by book entry through the medium of a depository participant.
What is a Depository System?
A system whereby transfer of securities takes place by means of book entry on the ledgers of the Depository without physical movement of scripts.
Problems Resulted in Formation of Depository
Before introduction of Depository system, the problems faced by investors and corporates in handling large volume of paper were as follows:
1)Bad deliveries, 2) Fake certificates, 3) Loss of certificates in transit
4) Mutilation of certificates, 5) Delays in transfer Long settlement cycles, 6), Mismatch of signatures, 7) Delay in refund and remission of dividend etc.
Code of Conduct for Participants
1. A participant shall make all efforts to protect the interests of investors.
2. A participant shall always endeavour to—
(a) render the best possible advice to the clients having regard to the clients needs and the environments and his own professional skills;
grievances of investors are redressed without any delay
3. A participant shall maintain high standards of integrity in all its dealings with its clients and other intermediaries, in the conduct of its business.
4. A participant shall be prompt and diligent in opening of a beneficial owner account, dispatch of the dematerialisation request form, rematerialisation request form and execution of debit instruction slip and in all the other activities undertaken by him on behalf of the beneficial owners.
5. A participant shall endeavour to resolve all the complaints against it or in respect of the activities carried out by it as quickly as possible, and not later than one month of receipt.
6. A participant shall not increase charges/fees for the services rendered without proper advance notice to the beneficial owners.
7. A participant shall not indulge in any unfair competition, which is likely to harm the interests of other participants or investors or is likely to place such other participants in a disadvantageous position while competing for or executing any assignment.
8. A participant shall not make any exaggerated statement whether oral or written to the clients either about its qualifications or capability to render certain services or about its achievements in regard to SE.
Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large
Services marketing is a sub-field of marketing, The promotion of economic activities offered by a business to its clients. Service marketing might include the process of selling telecommunications, health treatment, financial, hospitality, car rental, air travel, and professional services.
In this presentation, we will discuss the marketing procedure in the services, how to organize marketing planning and analyze marketing opportunities. We will also talk about the selection process of target market, developing the service marketing mix and managing marketing effort.
To know more about Welingkar School’s Distance Learning Program and courses offered, visit:
http://www.welingkaronline.org/distance-learning/online-mba.html
Types of Retail locations, its importance and Decisions making.
Types
1. Freestanding or isolated store location
2. Part of a business center
3. Part of a shopping center
Role of Marketing Channels – Channel Design & Channel Conflicts Venkat. P
Role of Marketing Channels – Channel Design Decisions – Channel Management Decisions – Types, Causes & Management of Channel Conflicts (See class Notes)– Concept of Logistics. Definition & Components of Marketing Communication mix – Characteristics of Marketing Communication Mix – Developing Effective Communication mix.
Consumer Behavior- meaning, nature and importance, Factors influencing consumer behavior, Buying Behavior process. Market Segmentation- meaning and need Bases for market segmentation, Requisites for effective segmentation, Steps in segmentation process, Targeting- meaning, strategies, Positioning- meaning and types
Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large
Services marketing is a sub-field of marketing, The promotion of economic activities offered by a business to its clients. Service marketing might include the process of selling telecommunications, health treatment, financial, hospitality, car rental, air travel, and professional services.
In this presentation, we will discuss the marketing procedure in the services, how to organize marketing planning and analyze marketing opportunities. We will also talk about the selection process of target market, developing the service marketing mix and managing marketing effort.
To know more about Welingkar School’s Distance Learning Program and courses offered, visit:
http://www.welingkaronline.org/distance-learning/online-mba.html
Types of Retail locations, its importance and Decisions making.
Types
1. Freestanding or isolated store location
2. Part of a business center
3. Part of a shopping center
Role of Marketing Channels – Channel Design & Channel Conflicts Venkat. P
Role of Marketing Channels – Channel Design Decisions – Channel Management Decisions – Types, Causes & Management of Channel Conflicts (See class Notes)– Concept of Logistics. Definition & Components of Marketing Communication mix – Characteristics of Marketing Communication Mix – Developing Effective Communication mix.
Consumer Behavior- meaning, nature and importance, Factors influencing consumer behavior, Buying Behavior process. Market Segmentation- meaning and need Bases for market segmentation, Requisites for effective segmentation, Steps in segmentation process, Targeting- meaning, strategies, Positioning- meaning and types
Introduction to Consumer Behaviour; Consumer Behaviour
and Marketing Strategy; Consumer Involvement – Levels
of involvement, and Decision Making.
Consumer Decision Process – Stages in Decision Process,
Information Search Process; Evaluative Criteria and
Decision Rules, Consumer Motivation – Types of Consumer
Needs, Ways of Motivating Consumers. Information
Processing and Consumer Perception.
Consumer Attitudes and Attitude Change; Influence of
Personality and Self Concept on Buying Behaviour,
Psychographics and Lifestyles, Impuse Buying.
Diffusion of Innovation and Opinion Leadership, Family
Decision Making, Influence of Reference Group
Industrial Buying Behaviour– Process and factors, Models
of Consumer Behaviour – Harward Seth, Nicosia, E& D,
Economic Model; Introduction to Consumer Behaviour
Audit; Consumer Behaviour Studies in India.
Without an understanding of consumers, how they think, and the reasons for how they behave, it is very difficult for a business to give them exactly what they want.
The study of consumer behaviour improves decision-making as some of the guesswork is removed.
Through a better understanding of consumer behaviour, businesses can make better choices with their marketing to attract more of their target customers.
What is Consumer Behaviour?
Consumer behaviour is the study of consumption. It aims to have a better understanding of consumer actions and processes used in their purchase decisions, as well as the usage of products and services and how they are disposed of.
Exploring how the consumer’s emotions, attitudes and preferences affect buying behaviour, consumer behaviour draws upon ideas from several fields including psychology, sociology, anthropology, biology, marketing and economics.
An underlying motivation drives a consumer to act and purchase. These motivations fit under the problem recognition phase discussed above.
This motivation can be either positive or negative. A positive motivation could be a pleasure – having dinner a nice restaurant or a night on the town. A negative motivation could be the avoidance of unpleasantness such as purchasing toothpaste to minimise tooth decay, getting toothaches and having to visit a dentist.
Similar to Unit IV AMM- Consumer Behaviour Analysis (20)
The chapter consists of Tax Deducted at Source and Collection of Tax at source.
Tax Deducted at Source (TDS) is one of the ways to collect tax based on certain percentages on the amount payable by the receiver on goods/services. The collected tax is a revenue for the government.
Who is liable to deduct TDS under GST law?
A. A department or an establishment of the Central Government or State Government; or
B. Local authority; or
C. Governmental agencies; or
D. Such persons or category of persons as may be notified by the Government.
As per the latest Notification dated 13th September 2018, the following entities also need to deduct TDS-
An authority or a board or any other body which has been set up by Parliament or a State Legislature or by a government, with 51% equity ( control) owned by the government.
A society established by the Central or any State Government or a Local Authority and the society is registered under the Societies Registration Act, 1860.
Public sector undertakings.
What is TCS under GST
Tax Collected at Source (TCS) under GST means the tax collected by an e-commerce operator from the consideration received by it on behalf of the supplier of goods, or services who makes supplies through the operator’s online platform. TCS will be charged as a percentage on the net taxable supplies. The provision of TCS under GST is dealt under Section 52 of the CGST Act.
Who is liable to collect TCS under GST
Certain operators who own, operate and manage e-commerce platforms are liable to collect TCS. TCS applies only if the operators collect the consideration from the customers on behalf of vendors or suppliers. In other words, when the e-commerce operators pay the consideration collected to the vendors they have to deduct an amount as TCS and pay the net amount.
Here are few exceptions to the TCS provisions for the services provided by an e-commerce platform:
Hotel accommodation/clubs (unregistered suppliers)
Transportation of passengers – radio taxi, motor cab or motorcycle
Housekeeping services like plumbing, carpentry etc. (unregistered suppliers)
For example – M/s.XYZ stores (a proprietorship) is selling garments through Flipkart. Flipkart, being an e-commerce operator, before it makes the payment of consideration collected on behalf of XYZ, will be liable to deduct TCS.
What is the rate applicable under TCS
The dealers or traders supplying goods and/or services through e-commerce operators will receive payment after deduction of TCS @ 1%. The rate is notified by the CBIC in Notification no. 52/2018 under CGST Act and 02/2018 under IGST Act.
This means for an intra-state supply TCS at 1% will be collected, i.e 0.5 % under CGST and 0.5% under SGST. Similarly, for a transaction between the states, the TCS rate will be 1%, i.e under the IGST Act.
The chapter consists of Computation of Tax Liability and Payment of Tax; Interest on Delayed Payment of Tax; Refund of Tax; Tax Deduction at Source (TDS); Collection of Tax at Source (TCS); Computation of Interest on Delayed Payment of Tax. Composition scheme, eligible tax payers, turn over limit in case of composition scheme. Eligibility for composition scheme, person not eligible to opt composition scheme, conditions for availing composition scheme, advantages and disadvantages of composition scheme, computation of tax liability, Interest on delayed payment of tax,
Refund of Tax: Usually when the GST paid is more than the GST liability a situation of claiming GST refund arises. Under GST the process of claiming a refund is standardized to avoid confusion. The process is online and time limits have also been set for the same.
When can the refund be claimed?
There are many cases where refund can be claimed. Here are some of them – Excess payment of tax is made due to mistake or omission.
Dealer Exports (including deemed export) goods/services under claim of rebate or Refund
ITC accumulation due to output being tax exempt or nil-rated
Refund of tax paid on purchases made by Embassies or UN bodies
Tax Refund for International Tourists
Finalization of provisional assessment
How to calculate GST refund?
Let’s take a simple case of excess tax payment made. Mr. B’s GST liability for the month of September is Rs 50000. But due to mistake, Mr. B made a GST payment of Rs 5 lakh. Now Mr. B has made an excess GST payment of Rs 4.5 lakh which can be claimed as a refund by him. The time limit for claiming the refund is 2 years from the date of payment.
The chapter consists of basics of Goods and Service Tax, Tax Invoice; Credit and Debit Notes; E-Way Bill, Procedure for Generation of E-Way Bill; Accounts and Records; Electronic Cash Ledger, Manner of Utilization of Amount in Electronic Cash Ledger, Electronic Credit Ledger-Manner of Utilization of ITC, Electronic Liability Ledger-Order of Discharge of Tax and Other Dues.
An invoice is a commercial instrument issued by a supplier of goods/services to a recipient.
In GST, all invoices issued between the date of implementation of GST and the date of issuance of GST registration certificate will have to be reissued in the form of a revised invoice and have to be raised within a month of issuance of the registration certificate.
A supplementary tax invoice is an invoice that a taxable person issues if any deficiency is found in a tax invoice already issued by the said taxable person. A supplementary invoice is also known as a debit note.
The recipient who is registered under GST has to issue a payment voucher for the transactions(goods or services) on which reverse charge is applicable to the supplier. For example Ajay cashew house registered in Delhi had purchased cashew nuts from Vikram an agriculturist for Rs 100000 in Karnataka.
Rule 55 specifies the cases where at the time of removal of goods, goods may be removed on delivery challan and invoice may be issued after delivery. Issuance of Credit Note – Section 34(1)
Issuance of Debit Note – Section 34(3)
Details of Credit Note to be furnished in return – Section 34(2)
Details of Debit Note to be furnished in return – Section 34(4)
EWay Bill is an Electronic Way bill for movement of goods to be generated on the eWay Bill Portal. A GST registered person cannot transport goods in a vehicle whose value exceeds Rs. 50,000 (Single Invoice/bill/delivery challan) without an e-way bill that is generated on ewaybillgst.gov.in.
Registered Person – E-way bill must be generated when there is a movement of goods of more than Rs 50,000 in value to or from a registered person. A Registered person or the transporter may choose to generate and carry eway bill even if the value of goods is less than Rs 50,000.
e-Cash ledger indicates the amount that has been paid by the taxpayer to the government. The amount in this ledger can be used to make payment of tax, interest, liability, fees and so forth.
e-Credit ledger or electronic credit ledger is maintained in the form GST PMT-02 on the GST Portal.
This ledger helps in tracking all the Input Tax Credit (ITC) claims made by the taxpayer. However, it shall be noted that any remaining amount in the e-Credit ledger can be used in making the payment of output tax liability only. E-Liability Register will reflect the total tax liability of a taxpayer for a particular tax period.
Debit to Electronic Credit Ledger and Credit to Electronic Liability Register
Unit 5 CSM: Strategic Evaluation and ComtrolDayanand Huded
The chapter comprises of Overview of Strategic Evaluation; Strategic Control; Techniques of Strategic Evaluation and Control. Evaluation of Strategic Alternatives - Product Portfolio Models, BCG Matrix, GE Matrix, Gap Analysis; Strategic Control System.
Strategic evaluation and control is the final phase in the process of strategic management. Its basic purpose is to ensure that the strategy is achieving the goals and objectives set for the strategy. It compares performance with the desired results and provides the feedback necessary for management to take corrective action.
According to Fred R. David, strategy evaluation includes three basic activities
(1) examining the underlying bases of a firm’s strategy,
(2) comparing expected results with actual results, and
(3) taking corrective action to ensure that performance conforms to plans. Sometime, the best formulated strategies become obsolete (outdated) as a firm’s external and internal environments change.
Strategic control is a type of “steering control”. We have to track the strategy as it is being implemented, detect any problems or changes in the predictions made, and make necessary adjustments. This is especially important because the implementation process itself takes a long time before we can achieve the results.
Strategic control is like an alarm long before the calamity can happen.
Operational control is the process of ensuring that specific tasks are carried out effectively and efficiently. The operational control aims at evaluating the performance of the organization. Most of the control system in organization are operational in nature. Some examples of operational control are : Budgetary control, Quality control, Inventory control, Production Control, Cost control etc.
Portfolio Model is a technique used to analyse organisations in relation to their environments
Portfolio (set, collection, assortment, range, group)
A business Portfolio may be any collection of brands/products, markets, branches /divisions, income generating assets, etc.
PA is usually applied to firms with multiple SBUs (more than one product/services, customer categories, markets , divisions)
Helps managers in taking decisions regarding which SBUs to allocate more or less resources to at a given strategic point in time
After portfolio analysis firm makes an informed strategic choice e.g.
To have a balanced portfolio (minimize risk and maximize return) of all portfolios
To actively deploy a retrenchment strategy
The chapter comprises of Meaning, Environment, Raising of Finance in International Markets, Euro Issues, GDRs and ADRs Guidelines for Raising Funds in International Markets through various Instruments; Working of International Stock Exchanges with respect to their Size - Listing Requirements, Membership, Clearing and Settlement of New York Stock Exchange, NASDAQ, London Stock Exchange, Tokyo Stock Exchange, Luxembourg Stock Exchange, German and France Stock Exchanges.
The international stock market refers to all the international markets that negotiate stocks from their domestic companies. For example, you can buy stocks from Apple at the local American market, but to get stocks from the Japanese Sapporo, you need to go the international (Japanese) market. Most countries have their own stock exchange.
Part of the financial system concerned with raising long-term capital through shares, bonds, and other long-term investments.
EURO ISSUE:
The term `euro' denotes that the issue is listed on a European Stock Exchange.
A euro issue is a issue where the securities are issued in a currency different from the currency of the country of issue and the securities are sold in international market to individual and institutional investors.
Euro securities are negotiable and transferable securities distributed by a syndicate of market intermediaries and underwriters, By an euro issue, a company is able to raise funds at a cheaper rate, Euro bond is an international bond issued to investors from throughout the world.
A global depositary receipt (GDR) is a certificate issued by a bank that represents shares in a foreign stock on two or more global markets. GDRs typically trade on American stock exchanges as well as Eurozone or Asian exchanges.
GDRs represent ownership of an underlying number of shares of a foreign company and are commonly used to invest in companies from developing or emerging markets by investors in developed markets.
Prices of global depositary receipt are based on the values of related shares, but they are traded and settled independently of the underlying share.
ADR's are depository receipts issued in United States of America (USA) in accordance with the provisions of Securities and Exchange Commission.
American Depository Receipts (ADRs) offer US investors a means to gain investment exposure to non-US stocks without the complexities of dealing in foreign stock markets.
It refers to a negotiable certificate issued by a U.S. depositary bank representing a specified number of shares usually one share of a foreign company's stock.
The ADR trades on U.S. stock markets as any domestic shares would. ADRs offer U.S. investors a way to purchase stock in overseas companies that would not otherwise be available.
It is denominated in US $
INFOSYS Technologies was the First Indian Company to issue ADR.
The chapter comprises of Importance and Functions, Listing of Securities in Stock Exchanges; Players in Stock Exchange - Investors, Speculators, Market Makers, Stock Brokers; Eligibility Criteria; Trading in Stock Exchange, Stock Exchanges - Bombay Stock Exchange, National Stock Exchange, Over-the-Counter Exchange of India; The SEBI Trading Mechanism - BOLT, NEAT System and Screen Based System.
Listing refers to the admission of the securities of a company on a recognised stock exchange for trading. Listing of securities is undertaken with the primary objective of providing marketability, liquidity and transferability of shares.
To be submitted along with the application for listing:-
1. Memorandum of Associations, Articles of Association, Prospectus, Directors’ report, Annual Accounts, Agreement with Underwriters, etc.
2. Company’s activities, capital structure, distribution of shares, dividends and bonus shares issued, etc.
Listing Requirements:
For this purpose companies have been classified into 2 groups:-
1. Large Cap Companies (minimum issue size of Rs.10 crores and market capitalization of not less than Rs.25 crores)
2. Small Cap Companies (minimum issue size of Rs.3 crores and market capitalization of not less than Rs.5 crores)
Trading in Stock Exchange
The system of trading in stock exchanges for many years was known as floor trading.
In the new electronic stock exchanges which have fully automated computerized mode of trading, floor trading is replaced with a new system of trading known as screen-based trading.
Screen-based trading are two types
1. Quote driven system 2. Order driven system
Under the quote driven system the market- maker, who is a dealer in particular security, input two way quotes into the system that is bid price and offer price .
Under the order driven system clients place their buy and sell orders with the brokers.
Types of Orders
An investor may place two type of orders
1. Market order-In market order the broker is instructed by the investor to buy or sell a stated number of share immediately at the best price in the market.
2. Limit order- It is an order for the purchase or sale of securities at a fixed price specified by the client. “ buy at Rs. 50 or less” “ sell at Rs. 60 or more” No guarantee that limit order will be executed
National Stock Exchange
Established in 1992
Girish Chandra Chaturvedi, Chairperson
Ashishkumar Chauhan, MD and CEO
NSE is ranked 4th in the world in cash equities by number of trades as per the statistics maintained by the World Federation of Exchanges (WFE) for the calendar year 2021
First dematerialized electronic exchange in the country.
Number of Lists 2002 (As of October 2021)
The exchange was incorporated in 1992 as a tax-paying company and was recognized as a stock exchange in 1993 under the Securities Contracts (Regulation) Act, 1956, when P. V. Narasimha Rao was the Prime Minister of India and Manmohan Singh was the Finance Minister.
The chapter comprises of Primary Market - Its Role and Functions; Issue of Capital - Methods of Issuing Securities in Primary Market, Intermediaries in New Issue Market - Merchant Bankers, Underwriters, Brokers, Registrars and Managers Bankers; Pricing of Issue - Book Building, Green Shoe Option, Procedure for New Issues and SEBI Guidelines for Issue in Primary Market.
The primary market is where securities are created. It's in this market that firms sell (float) new stocks and bonds to the public for the first time. An initial public offering, or IPO, is an example of a primary market.
These trades provide an opportunity for investors to buy securities from the bank that did the initial underwriting for a particular stock.
An IPO occurs when a private company issues stock to the public for the first time.
Companies and government entities sell new issues of common and preferred stock, corporate bonds and government bonds, notes, and bills on the primary market to fund business improvements or expand operations. Although an investment bank may set the securities' initial price and receive a fee for facilitating sales, most of the funding goes to the issuer. Investors typically pay less for securities on the primary market than on the secondary market.
A rights offering (issue) permits companies to raise additional equity through the primary market after already having securities enter the secondary market. Current investors are offered prorated rights based on the shares they currently own, and others can invest anew in newly minted shares.
Companies can raise capital at relatively low cost, and the securities so issued in the primary market provide high liquidity as the same can be sold in the secondary market almost immediately.
The primary market is an important source for mobilisation of savings in an economy. Funds are mobilised from commoners for investing in other channels. It leads to monetary resources being put into investment options.
Chances of price manipulation in the primary market are considerably less when compared to the secondary market. Such manipulation usually occurs by deflating or inflating a security price, thereby deliberately interfering with fair and free operations of the market.
The primary market acts as a potential avenue for diversification to cut down on risk. It enables an investor to allocate his/her investment across different categories involving multiple financial instruments and industries.
It is not subject to any market fluctuations. The prices of stocks are determined before an initial public offering, and investors know the actual amount they will have to invest.
Unit II Tax Planning and Company PromotionDayanand Huded
The chapter comprises of Meaning of Tax Planning, Tax Avoidance, Tax Evasion and Tax Management; Features and Scope for Tax Planning; Business Location and Tax Planning; Nature of Business and Tax Planning: FTZ, Units in SEZ, 100% EOU and Infrastructure Development.
Tax planning is a focal part of financial planning. It ensures savings on taxes while simultaneously conforming to the legal obligations and requirements of the Income Tax Act, 1961. The primary concept of tax planning is to save money and mitigate one's tax burden.
Tax Planning is the arrangement of financial activities in such a way that maximum tax benefits are enjoyed by making use of all beneficial provisions in the tax laws. It entitles the assessee to avail certain exemptions, deductions, rebates and reliefs, so as to minimise its tax liability.
(i) Reduction of tax liability: One of the supreme objectives of tax planning is the reduction of the tax liability of the payer and the resultant saving of the earnings for a better enjoyment of the fruits of hard labour.
(ii) Minimization of litigation and the tax payer may be saved from the hardships and inconveniences caused by unnecessary litigations.
(iii) Productive investment: Tax planning is a measure of awareness of the taxpayer to the intricacies of the taxation laws and it is the economic consciousness of the income earner to find out the ways and means of productive investment of the earnings which would go a long way to minimize its tax burden.
(iv) Healthy growth of economy: The saving of earnings is the only basement upon which the economic structure of human life is founded.
(v) Economic stability: Productive investment increase contours of the national economy embracing in itself the economic prosperity of not only the tax payers but also of those who earn the income not chargeable to tax. The planning thus creates economic stability of the nation and its people by even distribution of economic resources.
(i) Residential status and citizenship of the assessee: We know that a non-resident in India is not liable to pay income-tax on incomes which accrue or arise and are also received outside India, whereas a resident in India is liable to pay income-tax on such incomes.
(ii) Heads of income/assets to be included in computing net wealth: Before the Tax-planner goes in for his task; he has to have a full picture of the sources of Income of the tax payer and the members of his family
This chapter consists of E-commerce Transaction and Liability in Special Cases; Tonnage Taxation, TDS; Advance Payment of Tax with reference to Corporate Assessee; TCS; Administrative Procedure; Assessment- Procedures and Types of Assessment; Return on Income; Statement of Financial Transaction (SFT). E-Filing: Appeal and Revision; Penalties.
Electronic contracts are governed by the basic principles elucidated in the Indian Contract Act, 1872, which mandates that a valid contract should have been entered with a free consent and for a lawful consideration between two adults.
Investments in the E-Commerce Space in India Foreign direct investment (“FDI”) in India is regulated under the Foreign Exchange Management Act 1999 (“FEMA”). The Department of Industrial Policy and Promotion (“DIPP”), Ministry of Commerce and Industry, Government of India makes policy pronouncements on FDI through Press Notes and Press Releases which are notified by the Reserve Bank of India (“RBI”) as amendments to Foreign Exchange Management Regulations, 2000
Tonnage Tax is a way for qualifying shipping companies to calculate their shipping related profits for Corporation Tax (CT) purposes. The shipping related profits are calculated based on the tonnage of the ships used in the company's shipping trade.
A tonnage tax is a taxation mechanism that can be applied to shipping companies instead of ordinary corporate taxation. The tax is determined by the net tonnage of the entire fleet of vessels under operation or use by a company. It is on the basis of this variable that taxation is applied.
Tonnage Tax is a way for qualifying shipping companies to calculate their shipping related profits for Corporation Tax (CT) purposes. The shipping related profits are calculated based on the tonnage of the ships used in the company’s shipping trade.
The concept of TDS was introduced with an aim to collect tax from the very source of income. As per this concept, a person (deductor) who is liable to make payment of specified nature to any other person (deductee) shall deduct tax at source and remit the same into the account of the Central Government. The deductee from whose income tax has been deducted at source would be entitled to get credit of the amount so deducted on the basis of Form 26AS or TDS certificate issued by the deductor.
Tax Planning with Reference to Managerial Decisions_NC.pdfDayanand Huded
This chapter comprises of Financial Decisions: Capital Structure Decisions; Dividend Policy; Bonus Shares and Capital Gains; Bond Washing Transactions; Own or Lease of an Asset, Installment or Hire Purchase, Make or Buy Decisions, Buying an Asset with Own Fund or Borrowed Fund and Repair, Replace, Renewal or Renovation; Shutdown or Continue: Tax Planning in respect of Amalgamation or De-Merger of Companies, Conversion of a Firm into a Company; Conversion of Sole Proprietorship into Company, Conversion of Company into Limited Liability Partnership.
Cost of Capital and also expenditure incurred in raising of such capital. Expectation of shareholders by way of dividend, growth etc. Expansion need of the business i.e. the rate by which profits of the business shall be again ploughed back in the business.
If the return on investment > rate of interest , maximum debt funds may be used, since is shall increase the rate of return on equity . However, cost of raising debt fund should be kept in mind.
if rate of return on investment < rate of interest, minimum debt funds should be used.
Where assessee enjoys tax holidays under various provisions of Income-Tax in such case minimum debt fund should be used, since the profit arising from business is fully exempt from tax which increase the rate of return of equity capital. But the borrowed funds reduces the profits ( profits less interest) before tax and to the extent exemption is reduce.
bond washing transaction can be defined as a transaction where some securities are sold sometime before the due date of Interest and reacquired after the due date is over. In order to discourage such transactions section 94 was introduced.
Where the owner of any securities (in this sub- section and in subsection (2) referred to as" the owner") sells or transfers those securities, and buys back or reacquires the securities, then, if the result of the transaction is that any interest becoming payable in respect of the securities is receivable otherwise.
Bond washing is the practice of selling a bond just before it pays a coupon payment and then buying it back once the coupon has been paid. Bond washing previously could result in apparently tax-free capital gains because after the coupon has been paid, the bond will often sell for less. However, the practice has been banned in most major jurisdictions.
The Chapter comprises of Carry Forward and Set Off of Losses in the case of Companies, Computation of Taxable Income of Companies; Computation of Corporate Tax Liability; Minimum Alternate Tax; and Tax on Distributed Profits of Domestic Companies. Surcharge, Minimum Alternate Tax, Problems on MAT.
The Finance Act, 2022 has inserted a new section 79A to the Income-tax Act to restrict set off of losses consequent to search, requisition and survey. It has been provided that in case the total income of any previous year of an assessee includes any undisclosed income detected as a result of:
(a) Search initiated under section 132; or
(b) A requisition made under section 132A; or
(c) A survey conducted under section 133A other than under section 133A(2A).
Then, no set-off of any loss, whether brought forward or otherwise, or unabsorbed depreciation, shall be allowed against such undisclosed income while computing the total income of the assessee for such previous year.
The total income of accompany is also computed in the manner in which income of any assessee is computed. A company is assessed in its own name; i.e. a company pays tax on its income as a distinct unit. A tax paid by a company is not deemed to have been paid on behalf of its shareholders. It is determined as follows:
1. First ascertain income under the different heads of income.
2. Income of other persons may be included in the income of the company under sections 60 and 61( para 206 and 207)
3. Current and brought forward losses should be adjusted according to the provisions of sections 70 to 80 (as per para 226 to 233).Para 335 of section 79 provides all the provisions regarding set off and carry forward of losses of closely held companies.
4. The total income so derived under computation of different heads of income is “Gross Total Income”.
5. Following deductions are allowed from the Gross total income so computed, under section 80C to 80 U
The chapter consists of organizational structure of financial system, Components of financial system, Functions of securities of market, securities market and economic growth, profile of Indian securities market, structure of stock exchange, OTCEI, SEBI Act-1992, Role of SEBI in capital market, powers and functions of SEBI, Securities contract regulation act 1956, Reforms to promote investor confidence, and Role of International Organisation of Securities COmmissions.
Substance of Emotion, Theories of Emotion, Types and Dimensions of Emotions, Emotional Styles; Fairness, Reciprocity and Trust; Conformity; Bayesian Decision Making, Heuristics and Cognitive Biases; Neuro Finance and Trader’s Brain.
The concept of emotion may seem simple, but scientists often have trouble agreeing on what it really means. Most scientists believe that emotions involve things other than just feelings
The way that someone experiences an emotion. A feeling is something that you experience internally, in your own mind, and that other people can understand based on your behavior. You can help other people understand how you feel using emotion terms, like “anger” or “sadness”—the subject of this study—or by using analogies, like “I feel the way a kid would feel if her dad took away her Halloween candy.”
They involve bodily reactions, like when your heart races because you feel excited. They also involve expressive movements, including facial expressions and sounds—for example, when you say “woah” because you are fascinated by something. And emotions involve behaviors, like yelling at someone when you are angry.
People use many different words to describe the emotions that they feel.
The patterns of emotion that we found corresponded to 25 different categories of emotion: admiration, adoration, appreciation of beauty, amusement, anger, anxiety, awe, awkwardness, boredom, calmness, confusion, craving, disgust, empathic pain, entrancement, excitement, fear, horror, interest, joy, nostalgia, relief, sadness, satisfaction, and surprise.
According to the Cannon-Bard theory of emotion, we feel emotions and experience physiological reactions such as sweating, trembling, and muscle tension simultaneously.
Another well-known physiological theory is the Cannon-Bard theory of emotion. Walter Cannon disagreed with the James-Lange theory of emotion on several different grounds. First, he suggested, people can experience physiological reactions linked to emotions without actually feeling those emotions. For example, your heart might race because you have been exercising, not because you are afraid.
Cannon also suggested that emotional responses occur much too quickly to be simply products of physical states. When you encounter a danger in the environment, you will often feel afraid before you start to experience the physical symptoms associated with fear, such as shaking hands, rapid breathing, and a racing heart.
Cannon and Bard’s theory suggests that the physical and psychological experience of emotion happens at the same time and that one does not cause the other.
Study of how owners and managers of publicly-traded companies make decisions that affect the values of those companies.
Examines effects of manager’s and investor’s psychological biases on firms corporate finance decisions.
Main psychological traps met are: confirmation bias, hindsight bias, herding behavior conservatism, the role of affects, wishful thinking, opaque framing, representativeness bias and overconfidence.
“Real-world” view- Managers and investors may be irrational (Psychological Biases) (“homo sapiens” view).
Behavioural Corporate Finance: considers managerial irrationality/biases. Focus on corporate finance decisions (investment appraisal, capital structure/dividend policy.
How the personal traits of managers affect the decisions made in the firm, especially financial decisions. We will see that the psychological qualities of individuals holding management positions have a decisive effect on.
For instance, their financing and capital budgeting decisions or their dividend policy. It will also become clear that the psychological profile of each manager will provide an explanation for the financial decisions made beyond the scope of the company and its business sector.
Assumptions of Behavioural Corporate Finance
Assumes irrational entrepreneurs or managers
Postulates irrational investors and limited arbitrage.
The Rational Managers with Irrational Investors Approach
This approach assumes that securities market arbitrage is imperfect, and thus that prices can be too high or too low. Rational managers are assumed to perceive mispricings, and to make decisions that may encourage respond to mispricing.
Rational manager objectives in irrational market:
1. Fundamental value - Maximizing fundamental value has the usual ingredients.
2. Catering - Catering refers to decisions that aim at boosting stock price above the level of intrinsic value.
3. Market timing - Market timing relates to the decision that aims at exploiting temporary mispricing.
Two Key Building Blocks:
1. Limits on arbitrage - Irrational investors impact prices because arbitrage is limited.
2. Smart managers - Managers have the ability to detect when valuations are wrong and they act on mispricing.
The chapter consists of Expected Utility Theory [EUT] and Rational Thought: Decision Making under Risk and Uncertainty - Expected Utility as a basis for Decision-Making – Theories Based on Expected Utility Concept – Investor Rationality and Market Efficiency. Self Deception – Forms of Over Confidence, Causes of Over Confidence, and other Forms of Self-Deception. Prospect Theory, Difference between EUT and Prospect Theory; Agency Theory; SP/A Theory; Framing, Mental Accounting; Error in Bernoulli’s Theory.
Expected utility theory and its examples. Making decisions under certainty is easy. The cause and effect are known, and the risk involved is minimal. What’s tough is making decisions under risk and uncertainty. The outcome is unpredictable because you don’t have all the information about the alternatives. Before we learn deeper about decision-making under risk and uncertainty, let’s look at each of these situations such as certainty, risk and uncertainty. Despite all the data crunching and predictive technology, businesses these days have to deal with a lot of uncertainty and the ‘what if’ scenarios.
The recent pandemic outbreak has dramatically altered the business landscape globally. Today, decision-making has become more complicated due to the uncertainty all around us.
Quantitative management is not a modern business idea but a management theory that came into existence after World War II. Business owners initially used it in Japan to pick up the pieces of the devastation caused by the war and started taking baby steps toward reconstruction. It focuses on the following elements of business operations:
Customer satisfaction
Business value enhancement
Empowerment of employees
Creating synergy among teams
Creating quality products
Preventing defects
Being responsible for quality
Focusing on continuous improvement
Leveraging statistical measurement
Remaining focused on the processes
Commitment to refinement and learning
Quantitative techniques in management as a collection of mathematical and statistical tools. They’re known by different names, such as management science or operation research. In modern business methods, statistical techniques are also viewed as a part of quantitative management techniques.
When appropriately used, quantitative approaches to management can become a powerful means of analysis, leading to effective decision-making. These techniques help resolve complex business problems by leveraging systematic and scientific methods.
The chapter consists of several aspects of behavioural finance and its foundations such as;
Overconfidence is the tendency for people to overestimate their knowledge, abilities, and the precision of their information, or to be overly sanguine (optimistic) of the future and their ability to control it. It is found that most people most of the time are overconfident is well documented by researchers in the psychology literature.
Overconfidence comes in different forms one of them is miscalibration, the tendency to believe that your knowledge is more precise (accuracy) than it really is.
Prospect theory assumes that losses and gains are valued differently, and thus individuals make decisions based on perceived gains instead of perceived losses. Also known as the "loss-aversion" theory, the general concept is that if two choices are put before an individual, both equal, with one presented in terms of potential gains and the other in terms of possible losses, the former option will be chosen.
Emotion is a complex, subjective experience accompanied by biological and behavioral changes. Emotion involves feeling, thinking, activation of the nervous system, physiological changes, and behavioral changes such as facial expressions.
There are many different types of emotions that have an influence on how we live and interact with others. At times, it may seem like we are ruled by these emotions. The choices we make, the actions we take, and the perceptions we have are all influenced by the emotions we are experiencing at any given moment.
The adaptive market hypothesis (AMH) is an alternative economic theory that combines principles of the well-known and often controversial efficient market hypothesis (EMH) with behavioral finance. It was introduced to the world in 2004 by Massachusetts Institute of Technology (MIT) professor Andrew Lo.
The Chapter consists of evolutionary aspects of behavioural finance. Discussed Hyperbolic discounting, familiarity bias, heuristics, self-deception, overconfidence, success equation, and EMH. Further, the chapter discussed the emotion and theories of emotions, dimensions of emotions, and social influence on investment and consumption. In psychology, a heuristic is an easy-to-compute procedure or "rule of thumb" that people use when forming beliefs, judgments or decisions. The familiarity heuristic was developed based on the discovery of the availability heuristic by psychologists Amos Tversky and Daniel Kahneman; it happens when the familiar is favored over novel places, people, or things.
The familiarity heuristic can be applied to various situations that individuals experience in day-to-day life. When these situations appear similar to previous situations, especially if the individuals are experiencing a high cognitive load, they may regress to the state of mind in which they have felt or behaved before. The familiarity heuristic stems from the availability heuristic, which was studied by Tversky and Kahneman. The availability heuristic suggests that the likelihood of events is estimated based on how many examples of such events come to mind. Thus the familiarity heuristic shows how "bias of availability is related to the ease of recall.
Individuals automatically assume that their previous behaviour will yield the same results when a similar situation arises. Emotion is a complex, subjective experience accompanied by biological and behavioral changes. Emotion involves feeling, thinking, activation of the nervous system, physiological changes, and behavioural changes such as facial expressions.
In psychology, emotion is often defined as a complex state of feeling that results in physical and psychological changes that influence thought and behavior. Emotionality is associated with a range of psychological phenomena, including temperament, personality, mood, and motivation.
According to author David G. Myers, human emotion involves “ physiological arousal, expressive behaviours, and conscious experience."
Behavioural finance is a concept developed with the inputs taken from the field of psychology and finance. It tries to understand the various puzzling factors in stock markets to offer better explanations for the same.
Behavioural finance is defined as the study of the influence of socio-psychological factors on an asset’s price. It focuses on investor behaviour and their investment decision-making process.
HEURISTICS: (Rule of thumb strategy) Heuristics are referred as rule of thumb, which applies in decision making to reduce the cognitive resources to solve a problem. These are mental shortcuts that simplify the complex methods to make a judgment. Investor as decision maker confronts a set of choices within certainty and limited ability to quantify results. This leads identification and understanding of all heuristics that affect financial decision making. Some of heuristics are representativeness, anchoring & adjustments, familiarity, overconfidence, regret aversion, conservatism, mental accounting, availability, ambiguity aversion and effect. Heuristics help to make decision.
FRAMING: The perceptions of choices that people have are strongly influenced by how these choices are framed. It means choices depend on how question is framed, even though the objective facts remain constant. Psychologists refer this behaviour as a’ frame dependence’. As Glaser, Langer, Reynders and Weber(2007) show that investors forecast of the stock market depends on whether they are given and asked to forecast future prices or future return. So it is how framing has adversely affected people’s choices.
EMOTIONS: Emotions and associated human unconscious needs, fantasies, and fears drive much decision of human beings. How these needs, fantasies, and fears influence financial decision? Behavioural finance recognise the role Keynes’s “animal spirit” plays in explaining investor choices, and thus shaping financial markets (Akerlof and Shiller, 2009). Underlying premises is that our feeling determine psychic reality affect investment judgment.
MARKET IMPACT: Do the Cognitive errors and biases of individuals and groups of people affect market and market prices? Indeed, main attraction of behavioural finance field was that market prices did not appear to be fair. How market anomalies fed an interest in the possibility that they could be explained by psychology? Standard finance argues that investors’ mistakes would not affect market prices because when prices deviate from fundamental value, rational investor would exploit the mispricing for their own profit.
Biological screening of herbal drugs: Introduction and Need for
Phyto-Pharmacological Screening, New Strategies for evaluating
Natural Products, In vitro evaluation techniques for Antioxidants, Antimicrobial and Anticancer drugs. In vivo evaluation techniques
for Anti-inflammatory, Antiulcer, Anticancer, Wound healing, Antidiabetic, Hepatoprotective, Cardio protective, Diuretics and
Antifertility, Toxicity studies as per OECD guidelines
Acetabularia Information For Class 9 .docxvaibhavrinwa19
Acetabularia acetabulum is a single-celled green alga that in its vegetative state is morphologically differentiated into a basal rhizoid and an axially elongated stalk, which bears whorls of branching hairs. The single diploid nucleus resides in the rhizoid.
How to Make a Field invisible in Odoo 17Celine George
It is possible to hide or invisible some fields in odoo. Commonly using “invisible” attribute in the field definition to invisible the fields. This slide will show how to make a field invisible in odoo 17.
A Strategic Approach: GenAI in EducationPeter Windle
Artificial Intelligence (AI) technologies such as Generative AI, Image Generators and Large Language Models have had a dramatic impact on teaching, learning and assessment over the past 18 months. The most immediate threat AI posed was to Academic Integrity with Higher Education Institutes (HEIs) focusing their efforts on combating the use of GenAI in assessment. Guidelines were developed for staff and students, policies put in place too. Innovative educators have forged paths in the use of Generative AI for teaching, learning and assessments leading to pockets of transformation springing up across HEIs, often with little or no top-down guidance, support or direction.
This Gasta posits a strategic approach to integrating AI into HEIs to prepare staff, students and the curriculum for an evolving world and workplace. We will highlight the advantages of working with these technologies beyond the realm of teaching, learning and assessment by considering prompt engineering skills, industry impact, curriculum changes, and the need for staff upskilling. In contrast, not engaging strategically with Generative AI poses risks, including falling behind peers, missed opportunities and failing to ensure our graduates remain employable. The rapid evolution of AI technologies necessitates a proactive and strategic approach if we are to remain relevant.
June 3, 2024 Anti-Semitism Letter Sent to MIT President Kornbluth and MIT Cor...Levi Shapiro
Letter from the Congress of the United States regarding Anti-Semitism sent June 3rd to MIT President Sally Kornbluth, MIT Corp Chair, Mark Gorenberg
Dear Dr. Kornbluth and Mr. Gorenberg,
The US House of Representatives is deeply concerned by ongoing and pervasive acts of antisemitic
harassment and intimidation at the Massachusetts Institute of Technology (MIT). Failing to act decisively to ensure a safe learning environment for all students would be a grave dereliction of your responsibilities as President of MIT and Chair of the MIT Corporation.
This Congress will not stand idly by and allow an environment hostile to Jewish students to persist. The House believes that your institution is in violation of Title VI of the Civil Rights Act, and the inability or
unwillingness to rectify this violation through action requires accountability.
Postsecondary education is a unique opportunity for students to learn and have their ideas and beliefs challenged. However, universities receiving hundreds of millions of federal funds annually have denied
students that opportunity and have been hijacked to become venues for the promotion of terrorism, antisemitic harassment and intimidation, unlawful encampments, and in some cases, assaults and riots.
The House of Representatives will not countenance the use of federal funds to indoctrinate students into hateful, antisemitic, anti-American supporters of terrorism. Investigations into campus antisemitism by the Committee on Education and the Workforce and the Committee on Ways and Means have been expanded into a Congress-wide probe across all relevant jurisdictions to address this national crisis. The undersigned Committees will conduct oversight into the use of federal funds at MIT and its learning environment under authorities granted to each Committee.
• The Committee on Education and the Workforce has been investigating your institution since December 7, 2023. The Committee has broad jurisdiction over postsecondary education, including its compliance with Title VI of the Civil Rights Act, campus safety concerns over disruptions to the learning environment, and the awarding of federal student aid under the Higher Education Act.
• The Committee on Oversight and Accountability is investigating the sources of funding and other support flowing to groups espousing pro-Hamas propaganda and engaged in antisemitic harassment and intimidation of students. The Committee on Oversight and Accountability is the principal oversight committee of the US House of Representatives and has broad authority to investigate “any matter” at “any time” under House Rule X.
• The Committee on Ways and Means has been investigating several universities since November 15, 2023, when the Committee held a hearing entitled From Ivory Towers to Dark Corners: Investigating the Nexus Between Antisemitism, Tax-Exempt Universities, and Terror Financing. The Committee followed the hearing with letters to those institutions on January 10, 202
Unit 8 - Information and Communication Technology (Paper I).pdfThiyagu K
This slides describes the basic concepts of ICT, basics of Email, Emerging Technology and Digital Initiatives in Education. This presentations aligns with the UGC Paper I syllabus.
2024.06.01 Introducing a competency framework for languag learning materials ...Sandy Millin
http://sandymillin.wordpress.com/iateflwebinar2024
Published classroom materials form the basis of syllabuses, drive teacher professional development, and have a potentially huge influence on learners, teachers and education systems. All teachers also create their own materials, whether a few sentences on a blackboard, a highly-structured fully-realised online course, or anything in between. Despite this, the knowledge and skills needed to create effective language learning materials are rarely part of teacher training, and are mostly learnt by trial and error.
Knowledge and skills frameworks, generally called competency frameworks, for ELT teachers, trainers and managers have existed for a few years now. However, until I created one for my MA dissertation, there wasn’t one drawing together what we need to know and do to be able to effectively produce language learning materials.
This webinar will introduce you to my framework, highlighting the key competencies I identified from my research. It will also show how anybody involved in language teaching (any language, not just English!), teacher training, managing schools or developing language learning materials can benefit from using the framework.
Synthetic Fiber Construction in lab .pptxPavel ( NSTU)
Synthetic fiber production is a fascinating and complex field that blends chemistry, engineering, and environmental science. By understanding these aspects, students can gain a comprehensive view of synthetic fiber production, its impact on society and the environment, and the potential for future innovations. Synthetic fibers play a crucial role in modern society, impacting various aspects of daily life, industry, and the environment. ynthetic fibers are integral to modern life, offering a range of benefits from cost-effectiveness and versatility to innovative applications and performance characteristics. While they pose environmental challenges, ongoing research and development aim to create more sustainable and eco-friendly alternatives. Understanding the importance of synthetic fibers helps in appreciating their role in the economy, industry, and daily life, while also emphasizing the need for sustainable practices and innovation.
The Roman Empire A Historical Colossus.pdfkaushalkr1407
The Roman Empire, a vast and enduring power, stands as one of history's most remarkable civilizations, leaving an indelible imprint on the world. It emerged from the Roman Republic, transitioning into an imperial powerhouse under the leadership of Augustus Caesar in 27 BCE. This transformation marked the beginning of an era defined by unprecedented territorial expansion, architectural marvels, and profound cultural influence.
The empire's roots lie in the city of Rome, founded, according to legend, by Romulus in 753 BCE. Over centuries, Rome evolved from a small settlement to a formidable republic, characterized by a complex political system with elected officials and checks on power. However, internal strife, class conflicts, and military ambitions paved the way for the end of the Republic. Julius Caesar’s dictatorship and subsequent assassination in 44 BCE created a power vacuum, leading to a civil war. Octavian, later Augustus, emerged victorious, heralding the Roman Empire’s birth.
Under Augustus, the empire experienced the Pax Romana, a 200-year period of relative peace and stability. Augustus reformed the military, established efficient administrative systems, and initiated grand construction projects. The empire's borders expanded, encompassing territories from Britain to Egypt and from Spain to the Euphrates. Roman legions, renowned for their discipline and engineering prowess, secured and maintained these vast territories, building roads, fortifications, and cities that facilitated control and integration.
The Roman Empire’s society was hierarchical, with a rigid class system. At the top were the patricians, wealthy elites who held significant political power. Below them were the plebeians, free citizens with limited political influence, and the vast numbers of slaves who formed the backbone of the economy. The family unit was central, governed by the paterfamilias, the male head who held absolute authority.
Culturally, the Romans were eclectic, absorbing and adapting elements from the civilizations they encountered, particularly the Greeks. Roman art, literature, and philosophy reflected this synthesis, creating a rich cultural tapestry. Latin, the Roman language, became the lingua franca of the Western world, influencing numerous modern languages.
Roman architecture and engineering achievements were monumental. They perfected the arch, vault, and dome, constructing enduring structures like the Colosseum, Pantheon, and aqueducts. These engineering marvels not only showcased Roman ingenuity but also served practical purposes, from public entertainment to water supply.
1. Advanced Marketing Management
Unit IV: Consumer Behaviour Analysis
• Meaning and Characteristics, Importance, Factors
Influencing Consumer Behaviour, Consumer
Purchase Decision Process, Buying Roles, Buying
Motives, Buyer Behaviour Models
Prepared by
Mr. Dayananda Huded M.Com JRF, NET, KSET
Teaching Assistant
Rani Channamma university, PG Centre, Jamkhandi
E-Mail: dayanandch65@gmail.com
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Mr. Dayananda Huded
2. Consumer Behaviour
• Consumer behaviour is the study of how individual customers,
groups or organizations select, buy, use, and dispose ideas, goods,
and services to satisfy their needs and wants.
• It refers to the. actions of the consumers in the marketplace and the
underlying motives for those actions.
• Consumer behaviour is the study of how people make decisions
about what they buy, want, need, or act in regards to a product,
about what they buy, want, need, or act in regards to a product,
service or company.
• It is a study of the actions of the consumers that drive them to buy
and use certain products. Understanding consumer buying behavior
is most important for marketers as it helps them to relate better to
the expectation of the consumers.
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3. Definitions
• According to Pilliph Kotler “Consumer behaviour is the study of
how people buy, what they buy, when they buy, and why they buy.
• According to Soloman “Consumer behaviour is the study of the
processes involved when individuals or groups select, purchase,
use, or dispose of products, services, ideas, or experiences to satisfy
needs and desires.
• According to Professor Bearden and Associates “Consumer
• According to Professor Bearden and Associates “Consumer
behaviour is the mental and emotional process and the physical
activities of people who purchase and use goods and services to
satisfy needs and wants.
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4. Characteristics of Consumer Behaviour
• a) Consumer behavior is the part of human behavior: This cannot be
separated. Human behavior decides what to buy, when to buy etc. This is
unpredictable in nature. Based on the past behavioral pattern one can at least
estimate like the past he might behave.
• b) Learning the consumer is difficult and complex as it involves the study of
hum beings: Each Individual behaves differently when he is placed at different
situations. Every day is a lesson from each and every individual while we learn
the consumer behavior. Today one may purchase a product because of its smell,
tomorrow it may vary and he will purchase another due to some another reason.
tomorrow it may vary and he will purchase another due to some another reason.
• c) Consumer behavior is dynamic: A consumer's behavior is always changing
in nature: The taste and preference of the people vary. According to that
consumers behave differently. As the modern world changes the consumer's
behaving pattern also changes.
• d) Consumer behavior is influenced by psychological, social and physical
factors: A consumer may be loyal with a product due to its status values. Another
may stick with a product due to its economy in price. Understanding these factors
by a marketer is crucial before placing the product to the consumers.
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5. • e) Study of consumer behavior is crucial for marketers: Before producing
a product or launching a product, he has to go through a clear analysis of the
consumer behavior. If the people or prospects reject the product, he has to
modify it.
• f) Consumer behavior is a continuous process as it involves the process
starts before the buying and continuing after purchasing: Before buying
there will be high confusions and expectations about the product. After
buying it, if the buyer is satisfied with the product he shows a positive
behavior, otherwise negative.
behavior, otherwise negative.
• g) Consumer Behaviour involves Products, Services, Activities, and
Ideas: In the scope of consumer behaviour, not only products are included
but also the services, and activities (getting children vaccinated for polio),
and ideas (saying no to drugs). Thus consumer behaviour rotates around
offerings.
• h) Consumer Behaviour involves more than Buying
• i) Consumer Behaviour is a Dynamic Process
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6. Importance of Consumer Behaviour
• 1. To design production policies: This is the first importance of
consumer behaviour and it means that all the production policies have designed
taking into consideration the consumer preference so that product can be
successful in the market.
• 2. Know the effect of price on buying: This is the second consumer behaviour
importance and it means that consumer behavior can help in understanding the
effect of price on buying. Whenever the price is moderate on cheap more and
more customer will buy the product.
• After the time of production, there comes a time in which the company has to
• After the time of production, there comes a time in which the company has to
decide what the price of our product will be because it helps to divide the
categories of the customer and also helps to attain more sales.
• 3. Exploit the market opportunities: This is the third importance or
significance of consumer behaviour and it means that the change in consumer
preference can be a good opportunity for the mark to bring something which
cannot as a revaluation in the market. For Example– When palm pops introduced
in the market, it was successful due to the stylish and sleek design.
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7. • 4. Design marketing mix: This is the fourth importance of consumer
behaviour and it means that consumer behavior is very much vital in
designing and approaching marketing mix to be chosen (product, price,
place, and promotion).
• 5. Implement STP Strategies: This is the fifth importance of consumer
behaviour and it means that the segmentation, targeting,
and positioning strategies are implemented by understanding the
behaviour of consumers towards the various brands.
• 6. Helps in understanding diversified preferences: This is the
sixth importance of consumer behaviour and it means that the consumer
preferences are diversified in nature and their keep on changing over a
particular period of time. Nowadays consumers are more value
conscious and they want to extract the maximum benefits from a
particular product of a brand.
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8. • 7. Understanding of various roles played by consumers:
This is the seventh importance and it means that there are various roles
played by the consumers in the consumer decision-making process. These
roles are initiators, influencers, decider, users, buyers, and gatekeeper. The
steps of the consumer decision-making process can be described are as
follows:-
– Need Recognition,
– Information Search,
– Evaluation of Alternatives,
– Purchase Decisions,
– Purchase Decisions,
– Post Purchase Behaviour.
• 8. Results in customers satisfaction:
This is the eighth importance of consumer behaviour and it means when
the designed product is matching the expectations of the customer than they
result in customer satisfaction. In case the product is exceeding the
expectations of the customer then its result in customer delight.
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9. 7 O’s Framework of Consumer Behaviour
1. Occupants: Who is the
Consumer
2. Object of Purchase: What
does the Consumer Buy
3. Objective: Why is the
Consumer Buying
4. Occasion: When do they
Buy or How Often do they Buy
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Buy or How Often do they Buy
and Use
5. Outlets: Where do they Buy
6. Operations: How do they
Buy
7. Organisation: Who is
Involved
11. • 1. Cultural Factors
• Culture: The set of basic values, perceptions, wants, and
behaviours learned by a member of society from family and other
important institutions.
• Consumers live in a complex social and cultural environment. The
types of products and services they buy can be influenced by the
overall cultural context in which they grow up to become
overall cultural context in which they grow up to become
individuals.
• Below are some of the important cultural factors given:
– Culture
– Subculture
– Social Class
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12. • 2. Social Factors
• Social factors, in turn, reflect a constant and dynamic influx through
which individuals learn different consumption meanings. Below are some
of the important social factors given:
– Family
– Reference Groups
– Roles and status
• 3. Personal Factors
• 3. Personal Factors
• A person’s consumption behaviour is shaped by his personal
characteristics. Below are some of the important personal Factors given:
– Age
– Income
– Personality
– Self-concept
– Occupation
– Lifestyle
– Gender
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13. • 4. Psychological Factors
• Psychological factors also influenced consumers. Internal psychological
factors also direct the decision-making process. These factors influence
the reason or ‘why’ of buying.
• Below are some of the important psychological factors given:
– Motivation
– Learning
– Attitudes and Beliefs
– Perception
• 5. Economic Factors
• Economic factor also has a significant influence on buying decision of
consumer behavior.
• Below are some of the important economic factors given:
– Personal and Family Income
– Income Expectations
– Consumer Credit
– Liquid Assets
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14. Consumer Purchase Decision Process
• 1. Problem Recognition
• It’s in fact, the beginning of the buying process It is a perception. We realize what
we should ideally have and what we have at present. The decision to buy a
particular product depends on the necessity of that product to the buyer from
FMCG to a luxury product
• 2. Information Seeking
• This follows the problem recognization stage. The search is mostly directed
toward the products that are consistent with our needs. The amount and type of
information that is collected are related to the product in relation to the need for
information that is collected are related to the product in relation to the need for
the product information that can be gathered by ads, visiting the store through the
internet, or by talking with your friends.
• 3. Evaluation of Alternatives
• When the consumer seeks information he realizes the alternative choices
available and gets the background against which choices can be made. The brand
that consumer considers while making a purchase decision forms an evoked set
which is a small proportion of the total available brands. Promotion, especially
advertising provides information to consumers enabling them to evaluate.
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15. • 4. Buying Decision
• After the alternative choices are evaluated The brands are ranked &
the top-ranking brand may be purchased. Ultimate buying decisions
may undergo a change if the preferred brand is not available.
• 5. Post-Purchase Evaluation
• Now the product has been bought and consumed. It is the stage for
post-purchase evaluation. The consumer may either be satisfied or
dissatisfied. A satisfied consumer stores the product information in his
dissatisfied. A satisfied consumer stores the product information in his
memory and uses it next time at the time of the problem recognition
stage. A dissatisfied consumer may go in for another brand next time
he is out to buy. He will seek additional & will consider another set of
brands.
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16. Consumer Purchase Decision Process
Problem Information
Evaluation
of
Purchase
Post
Purchase
Stage – 1 Stage – 2 Stage – 3 Stage – 4 Stage – 5
Problem
Recognition
Information
Search
Evaluation
of
Alternatives
Purchase
Decision
Post
Purchase
Behaviour
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17. Buying Roles
• Consumer behaviour is influenced not only by consumer personali- ties
and motivations, but also by the various participant in the buying process.
Consumer decision making is an intricate process.
• To understand how consumers actually take the decision to buy a product,
it is important for marketers to identify who makes and has input in the
decision-making process. In a buying process there are various
participants involved.
• Thus we can distinguish roles, people might play in a buying decision.
– Initiator
– Influencer
– Influencer
– Gatekeeper
– Decider
– Buyer
– Users
– Maintainer
– Preparer
– Disposer
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18. • 1. Initiator: The person who first suggest the idea of buying the particular
product or service.
• An initiator is a person who first gets the thought or gives the suggestion/idea
of buying a particular product. A child might play the role of an initiator in
the purchase process of chocolate.
• 2. Influencer: An influencer is a person who directly or indirectly has some
influence on the final buying decision of others. The parents play the role of
influencers in the purchase process of chocolate.
• A person whose view or idea or advice influences the buying decision.
• Influencer is a person who influences the buying decision, actual
purchase or the use of product or service. Influencer can be a
technical expert, consultant or anyone who provides input for the
buying decision.
• For example, a salesperson might influence you to buy a product.
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19. • 3. Gatekeeper: A gatekeeper is a person who permits the flow of certain information and
restricts the flow of some set of information. Parents play the role of a gatekeeper in the
selection of movies for children.
• A gatekeeper is the one who Influences the processing of information. The gatekeeper
may possess a greater expertise in acquiring and evaluating the information.
• 4. Decider: A decider is a person who finally determines part or the whole of the buying
decision, ie, all quantity like whether to buy, what to buy, how to buy, when to buy, or
where to buy are considered. In the event of buying baby products, the mother plays the
role of the decider.
• A decider is the one who vets what to buy, how to buy, when to buy and from where to
• A decider is the one who vets what to buy, how to buy, when to buy and from where to
buy.
• 5. Buyer: The buyer is the person who actually purchases and pays for the purchase. In a
typical family decision making process, the father plays the role of the buyer who is
involved in the economic transaction.
• A buyer is the one who is involved in the physical activity of making a purchase and
conducts the final transaction or exchange. At the time of purchasing the buyer can
negotiate on the price.
• For example, housewife may be the buyer who actually buys all the foodstuffs, rations and
toiletries of the family.
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20. • 6. Users: The user is the person who actually uses or consumes the product or
service. In most of the grocery product purchase, the entire family uses the
product. In a typical purchase of a washing machine, the housewife plays the
role of the user.
• 7. Maintainer: Members who service or repair the product so that it will
provide continued satisfaction is a maintainer.
• 8. Preparer: The preparer is the person who changes the product to a usable
form for consumption.
• For Example: In a typical family consumption of food items, the mother plays
the role of preparer.
• 9. Disposer: The disposer is the person who finally disposes of the package of
the product.
• For Example: The mother plays the role pf disposer after the product is
consumed by the family.
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21. Buying Motives
• Meaning:
• A motive is the inner state that moves, or prompts a person to action.
– W. J. Stanton,
• “A motive may be defined as a drive or an urge for which can
individual seeks satisfaction. It becomes a buying motive when the
individual seeks satisfaction through the purchase of something.”
• In the words of D. J. Durdian, “Buying motives are those influences or
• In the words of D. J. Durdian, “Buying motives are those influences or
considerations which provide the impulse to buy, induce action or
determine choice in the purchase of goods and services.”
• According to Berelson and Steiner – “A motive is the inner state that
energizes, activates or moves and that directs or channels behaviour to
work goals.”
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22. Buying Motives
• Money
• Vanity – (Affection)
• Acquisitiveness: Excessive interest in acquiring money or material things. Ex.
Collection of Coins
• Rivalry: Companies that compete to sell the same goods can become rivals as
each seeks to convince consumers to purchase its products, to the exclusion of the
products.
• Adornment: a thing which adorns or decorates; an ornament.
• Ex. cosmetics, jewellery, clothing accessories, facial hair, fingernail modification,
tattooing etc.
• Cleanliness
• Amusement - the state or experience of finding something funny.
• Ex. Watching a basketball game and flying a kite etc.
• Companionship: Companionship is a term often used in the context of
friendship. A feeling of fellowship or friendship.
• Mental Culture - cultural beliefs, values, and norms.
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23. Buying Motives
• Appropriateness - the quality of being suitable or right for a
particular situation or occasion.
Ex. Purchasing of Products in home opening ceremony, birthday,
marriage, etc.
• Ambition: Purchase of anything to achieve his/her intension.
• Inhibitiveness – Prohibit or forbid or divert from a purpose
• Reverence – Admiration or adoration
• Tastes
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• Tastes
• Gender
• Limitation
• Curiosity
• Self-preservation
• Sympathy
• Gratitude
• Patriotism and so on.
24. Classifications of Buying Motives
• 1. Physical, Psychological and Sociological Buying Motives:
• The psychological buying motives are related to the satisfaction of basic
human needs for subsistence such as satisfaction of the needs for food,
shelter and clothes, and security. The psychological buying motives relates to
the need for prestige or self-preservation, etc. the sociological buying
motives are related to the motives that exist at present and is expected in all
the social situations.
• 2. Acquired and Inherent Buying Motives:
• The acquired buying motives are learned motives and are influenced by the
environment factors. Such motives are related to socio-economic conditions
and the level of education, such as economy, information, work efficiency,
profit facility, quality, beauty, fashion, social presage, acceptance, etc.
• The inherent buying motives are present in a person from his birth. It belongs
to basic human instincts whereas the acquired buying motives are concerned
with the environment. They are influenced by hunger, thirsts, sleep, leisure,
security, playing entertainment, etc.
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25. • 3. Primary and Selective Buying Motives:
• The primary buying motives increase the general demands for products and not
the specific demands for a specified product/brand. The demands for radios,
TVs, cars, motorcycles, etc. fall under this category of primary motives.
• The selective buying motives influence for the purchase of specific brands, for
instance, the demands for Bajaj’s Chetak Scooter, Onida TV, Philips Radios,
etc.
• 4. Conscious and Dormant Buying Motives: The conscious buying motives
are such motives, which are identified by the buyer without any help from
marketing functions, like advertising, personal selling or promotional tools.
marketing functions, like advertising, personal selling or promotional tools.
The conscious buying motives influence the satisfaction of presently existing
needs of a customer. Such buying motives take shape within the sub-conscious
minds of the customers and are not influenced by the external environmental
factors.
• The dormant buying motives are silent motives and do not influence the buyers
until their attention is invited by the marketing functions. Thus, dormant
buying motives are related with satisfaction of those needs which are created
by the marketing functions. A consumer does not possess the knowledge of
such needs without the persuasion of marketing activities.
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26. • 5. Rational and Emotional Buying Motives:
• Alfred Gross has classified the buying motives as emotional and rational.
• A customer takes rational or economic buying decisions for availing
at least a few of the following advantages:
• (i) Where the buying is more profitable.
• (ii) Where there is saving of time.
• (iii) Where there is similarity/uniformity in the products.
• (iv) Where the item is simple to operate.
• (v) Where there are different uses of the product.
• (v) Where there are different uses of the product.
• (vi) Where it saves the space in keeping the product.
• (vii) Where there is economy in use.
• (viii) Where the product is of good design.
• (ix) Where it is a better product comparing to other products. Etc.
• Emotional buying motives influence a person to purchase certain goods or
services not because of its rationality, but because of his emotion.
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27. • 6. Product and Patronage Buying Motives:
• Product buying motives motivates a person towards purchasing a
special products. This motive is a generated by the physical and
psychological features of the product, such as design, colour, size,
package, quality, price etc.
• Patronage motive influences a person to purchase the products of a
specific seller, dealer or a producer. If a customer is satisfied with
specific seller, dealer or a producer. If a customer is satisfied with
the product of a specific seller/producer, he prefers to buy the
products of that seller/producer because of certain advantages, such
as home delivery of goods purchased, a reasonable price, location
of the seller/shop, assortment of goods, goodwill demonstration of
the product and decoration of the shop, and the good behaviour of
the seller.
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28. Buyer Behaviour Model
Buyer Behaviour Models
1. Howard Sheth
1. Traditional Models 2. Contemporary Models
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1. Economic Model
2. Learning Model
3. Psychoanalytical
Model
4. Sociological
Model
1. Howard Sheth
Model
2. Nicosia Model
3. Stimulus-Response
Model
4. Engel, Blackwell
and Minard
Model
29. Traditional Models
• 1. The Economic Model: According to the economic model of
buyer behaviour, the buyer is a rational man and his buying
decisions are governed by the concept of utility. If he has a certain
amount of purchasing power, a set of needs to be met, and a set of
products to choose from, he will allocate this amount over the set of
products in a very rational manner with the intention of maximising
the utility / benefit / need satisfaction.
• 2. The Learning Model: According to the learning model, which
• 2. The Learning Model: According to the learning model, which
takes its cue from the Pavlovian stimulus-response theory on
learning-buyer behaviour can be influenced by manipulating the
drives, stimuli and responses of the buyer. The model rests on the
human ability of learning, forgetting, and discriminating.
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30. • 3. The Psychoanalytical Model: The psychoanalytical model
draws mainly from Freudian psychology. According to this model, a
consumer has a complex set of deep-seated motives that drive him
towards certain behaviour. The buyer has a private world with all
his hidden fears, suppressed desires and totally subjective longings.
Appealing to these desires and longings can influence his buying
action.
• 4. The Sociological Model: According to the sociological model,
• 4. The Sociological Model: According to the sociological model,
the individual buyer is influenced in his buying behaviour by
society – by intimate groups as well as social classes. His buying
decisions are not totally governed by utility; he has a desire to
emulate, follow, and fit in with his environment. And, several of his
buying decisions may be governed by the compulsions arising out
of his being a social creature.
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31. Contemporary Models
• 1. Howerd and Sheth Model
• One of model that represent consumer behaviour on the market.
• It attempts to explain the rationality of choice of the product by the
consumer under conditions of incomplete information and reduced
processing capability.
• Howarth Sheth Model substantiates the complexity involved in
consumer behaviour and takes into consideration various factors
like attitudes of consumer, their perception levels and learning
like attitudes of consumer, their perception levels and learning
capacity that influence consumer behaviour.
• This model Consists of Four Variables
• 1. Input variables
• 2. Output variables
• 3. Hypothetical constructs: Perceptual constructs and Learning
constructs
• 4. Exogenous variables
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32. • 1. Input Variables:
• Significative Stimuli: These are tangible product characteristics like
uniqueness, quality etc.
• Symbolic Stimuli: Perception of an individual regards to a product.
• Social Stimuli: It focuses on all factors belong to society.
• 2. Output Variables in Howarth Sheth Model refers to the final
purchase decision and satisfaction or dissatisfaction levels of a
purchase decision and satisfaction or dissatisfaction levels of a
consumer after making a purchase. High satisfaction results in
elevated brand performance while dissatisfaction leads to lower
brand performance.
• 3. Hypothetical constructs: Hypothetical constructs include
psychological variables such as motivation, attitude, learning, etc.
• Hypothetical constructs categorised into two
• i.e. Perceptual Constructs and Learning Constructs
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33. • Perceptual Constructs: Deals with the way that individual percieves
and responds to the information from the input variables.
• Learning Constructs: Deals with the stages from the buyer motives
to the satisfaction in a buying decision.
• 4. Exogenous Variables: Which is also called as external variables.
• External variables refers to the indirect influence exerted on the
decision making process of consumers by factors such as finacial
decision making process of consumers by factors such as finacial
status, social class, necessity to purchase and personality traits of
individuals.
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35. 2. Nicosia Model
• This model shows the interactive relationship between the company and
the consumer. They arise between them for mutual communication.
• Company communicates with consumers through promotional activities,
while consumers by making purchases.
• The model tries to establish the links between a firm and its consumer –
how the activities of the firm influence the consumer and result in his
decision to buy. The messages from the firm first influences the
predisposition of the consumer towards the product. Depending on the
predisposition of the consumer towards the product. Depending on the
situation, he develops a certain attitude towards the product.
• It may lead to a search for the product or an evaluation of the product. If
these steps have a positive impact on him, it may result in a decision to
buy. This is the sum and substance of the ‘activity explanations’ in the
Nicosia model. The model groups these activities into four basic fields.
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36. • Field One with two sub-fields – the firm’s attributes and the
consumer’s attributes. An advertising message from the firm reaches
the consumer’s attributes. Depending on the way the message is
received by the consumer, he develops a certain attitude and this
becomes the input for Field Two.
• Field Two is the area of search and evaluation of the advertised
product and other alternatives. If this process results in a motivation to
buy, it becomes the input for Field Three.
buy, it becomes the input for Field Three.
• Field Three consists of the act of purchase. And
• Field Four consists of the use of the purchased item.
• There is an output from Field Four – feedback of sales results of the
firm.
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37. 3. Stimulus-Response Model
• Another model of consumer behavior, called the stimulus-
response or “black box” model, focuses on the consumer as a
thinker and problem solver who responds to a range of external
and internal factors when deciding whether or not to buy.
• Examples: You are hungry so you eat some food. A rabbit gets
scared so it runs away. You are cold so you put on a jacket.
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39. • Buyer Behavior As Problem Solving
• A common way for marketers to think about consumer behavior today is as a set
of activities a person goes through in order to solve problems. This problem-
solving process is triggered when a consumer identifies some unmet need. For
instance, a family consumes all of the milk in the house, or a birthday party is
coming up and a gift is needed, or a soccer team is planning an end-of-season
picnic. Each buying scenario presents a problem the buyer must solve. These
problems can involve two types of needs: physical (such as a need for milk, a
birthday gift, or picnic food) or psychological (for example, the need to
birthday gift, or picnic food) or psychological (for example, the need to
feel secure, the need to be loved, or the need to have fun).
• This problem-solving process also involves needs and wants. A need is a basic
deficiency for an essential item. You need food, water, air, security, and so forth.
A want places specific, personal criteria on how a need must be fulfilled. To
illustrate, when we are hungry, food is a need. When we have a specific food item
in mind, that item is a want. That difference is illustrated by the familiar
scenario of standing in front of a full refrigerator and complaining that there is
nothing to eat.
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40. 4. Engel-Kollat-Blackwell and Minard Model (1978)
• Engle, Blackwell Model is essentially a conscious problem solving
and learning model of consumer behaviour. This model has a good
decsription pf active information seeking and evaluation processes
of consumer, reflecting consumer behaviour process during
choosing product or service.
• In this model, they view consumer behaviour as a decision process
and identify five activities occurring in this process over a period of
time. They are;
time. They are;
– Problem recognition
– Information search
– Evaluation of alternatives
– Choice
– Outcome
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