Indian Consumer Buying Behaviour in the UK

Indian Consumer Buying Behaviour in the UK 1. Introduction This dissertation provide an overview of research topic on Indian consumer buying behavior in UK, first part outline aims and objective of the dissertation and followed by the motivation and study carried. Outline of structure of the dissertation and limitation are presented. 1.1 Aims and Objectives The aim of the dissertation is to understand and identify the social, cultural, buying behaviour characteristics of Indian community in UK. The research carried out primary and secondary research associated with Indian community and shows the linked between the ethnic consumer behaviour connections with market. What are the consumer buying behaviour characteristics of Indian Community in the UK†? Objective The objective of the dissertation is to focus and study on buying behavior of the Indian Community living in UK. To determine identify categories associated with Indian and their age characteristics. The article, literature, journal covers cultural, ethnical issues, historical issues of Indian identify integrating it with the personally studies. The method used on the basis of quantifiable observation for statistical analysis and philosophical interpretive research method to support Questionnaires are used to analyses the primary data. The findings reveal personal, ethnical, buying pattern and cultural characteristics relevant for identifying Indians consumer behavior. The conclusions are made for the implications of this identity need to be taken into account by the UK marketers or business market for new segment to target. 1.2 Motivations behind the Dissertation The Indians are part of a multicultural UK society, they make a significant cultural and consumer force Ref 35 (Fletcher, 2003). They are increasing in size, purchasing power and geographic concentration, giving â€Å"marketers a unique opportunity to modify their marketing strategies in the pursuit of increased market share and profitability† Ref 27 (Lindridge and Dibb, 2003). Due to increase in ethnic population and cultural diversity which represent many opportunity and threats to the markets hence marketer has to acknowledge the change in market by understanding the ethnic diversity Ref 35. Total in UK around 29% organization dont target ethnic market while 47% do target but were not effective in strategies due to lack of understanding and information about the Indian community in UK. Ref 27 (Lindridge and Dibb, 2003 cited: Fulford, 2001). Since UK represent multiethnic society, consisting of a diverse mix of culture and languages, there generates to understand the buying behaviors of all the elements which effects the business to fulfill marketing knowledge as the for the satisfaction of customer needs and wants Ref 28 (Chudry and Pallister, 2002)(Ref 25). This report will be focusing on the consumer buying behaviors characteristics of the Indians community in UK. 1.4 Limitations of the study The limitation of the study are that there has not been enough research done on the cultural characteristics of Indian Consumer Behaviour therefore there is no previous more studies carried out to judge the topic further. The Empirical Side of the Research has been hindered due to the fact that there is only one researcher, which made difficult to gather substantial studies and sample of Indian Community for quantitative research which have been omitted due to lack of manpower and time. 2. Literature Review Consumer Behaviour According to Philip Kotler consumer behavior as â€Å"the buying behavior of final consumer- individual and households who buys goods and services for personal consumption†, all to this it is directly related to market created by Consumer which varies in income, age, education level and taste across the world tremendously. They buy incredible variety of services and products which diverse consumer connection with each other with other element of the world (Ref 1). Today consumers have many choices to select a product as compared to ten or fifteen year before. Business growth depends on loyal customer or repeat purchase because they are satisfied with product variety/ services which they have received which bring consumer into the stores. Lot of marketing efforts is played to bring consumer to the stores, normally consumer assumes marketing as advertising and selling which is flow of goods from producers to customer. Marketing has great influence on fast moving consumer goods t hrough range of activities includes promotion, market research, advertising etc. Evaluation and monitoring of customer is also an important and one method of evaluation is by completing marketing research. Ref 7 (Woodruffe 1995 149, 163-4) According to Adrian Palmer Business Philosophy, marketing puts customers at the centre point of all the organizations which reflects the basic values to understand and response to customer necessity and needs to search constantly for new market opportunities. (Ref 22) There are three major components of marketing by Narver and Slater (1990) Customer Orientation, Competitor Orientation and Interfunctional Co-ordination. Customer Orientation understands its target buyers, Competitor Orientation focus on customer and its competitors police and strategy, while Interfunctional Co-ordination which futile marketing manager to develop the marketing plans to creating value, delivering promise made to customer and integrates its human and physical resources effectively and adapts them to meet customer needs. Marketing key concepts depends on customers, needs, value, exchange and market. Marketing Environment According Kotler â€Å"The actors and forces outside marketing that affect marketing ability to develop and maintain successful transaction with its target customer.† As per Environment markets depends to two major environment micro and macro environment but basically here we will be dealing with Macro Environment with explores border concepts of consumer behavior. Macro Environment consists of larges societal forces like demographic, cultural, economical, natural, political and technological. UK which is huge market with varied customers which are widely scattered hence we have to focus on specific Indian Consumer segment. According to Kotler Segment marketing is an â€Å"isolating broad segments that make up a market and adapting the marketing to match the needs of one or more segments†.(Ref 1,2). For marketer to target the entire consumer with same marketing style and approach doesnt satisfy to all customer where are many customer are dissatisfi ed or there need are fulfilled, hence here opportunity arise fro the company for specific segment. As per data and statistics Marketer has to go for niche marketing to target specific segment. According to Kotler Niche Marketing is Focusing or sub segment or niches with distinctive traits that may seek a special combination of benefits.(Ref 1,2). Hence in this project we will be focusing on Indian consumer with total UK consumer hence below gives the Geographical, Cultural, Political, Technological and Economical consumer patterns as compared to total UK Consumer. Geographically Indian Consumer In UK According to Kotler Demography or Geographical shows the study of human population in terms of size, density, location, age, gender, race occupation.(Ref1) Its very important because its gives marketers major interest it involve people, and people make up markets, as Indian Consumer geographical location is given below. Geographical Distribution of Minority Religions Mainly In London Percentage of each religion living in London, April 2001, GB Percentage of each religion living in London, April 2001, GB http://www.statistics.gov.uk/cci/nugget.asp?id=956 (Ref 39) Families with dependent children: by ethnic group and family type, April 2001, UK Families with dependent http://www.statistics.gov.uk/cci/nugget.asp?id=956 Total International Migration (TIM) to/from the UK 1991-2004 Total International Migration (TIM) to/from the UK 1991-2004 According to recent survey by Government in 2004, around 223,000 more people migrated to UK than migrated abroad, as its higher migration than estimat e before in 1991. Migration from New Commonwealth has increased by 45 percent between 2003 and 2004 within this group, net in migration from Asian was risen from 38,000 to 54000 in 2003, 2004 respectively. Ref 39 Net migration by country of last or next residence (1995-2004) Net migration by country of last or next residence (1995-2004) The demographic characterized of ethnic population in Britain is complex, As 97 percent of Britains non white population live in England, where most of the Indian lives in England and major cities of Scotland, approximately 53 percent of Indian lives in the south east and a further 30 percent in the midlands. Recently due to new Government laws implementation in Scotland the increase of Asian community are raising in great major cities like Edinburgh and Glasgow .Ref 39 Social, Cultural and Economic characteristics of the Ethnic population Culture can be defined as a â€Å"unique pattern of shared meanings that characterized a society and distinguish it from other societies. It is passed down from generation to generation and has been described as a societys ‘personality † Ref 21 (Wells and Prensky, 1996). Culture should be viewed as a â€Å"complex bundle of independent variables that can be attributed to behaviour† Ref 27. Culture plays an important part in the identification of an ethnic group, as ethnic groups are â€Å"those human groups that entertain a subjective belief in their common descent because similarities of physical type or of custom or both, or because of memories of colonization and immigration† Ref 27 i.e. culture. According to Kotler the cultural environment is made up of institution and other forces that affect the societys basic values, perceptions, preference and behavior. Every consumer grows in specific environment which gives some beliefs, values, inheritance, family structure, reference characteristics which reflects in him.(Ref 1) Culture is forever evolving â€Å"synthesizing old ideas with new ones† Ref 20 (Solomon, 2004). All cultures are different, but there are four dimensions that are in all cultures: 1. Power distance: how relationships form when difference in power is perceived. 2. Uncertainty: â€Å"the degree to which people feel threatened by ambiguous situations and have beliefs and institutions that help them to avoid this uncertainty† Ref20 3. Masculinity/femininity: how clear are the sex roles? 4. Individualism: cultures differ on how individualist (importance attached to personal goals) or collectivist (people lower their personal goals for the group) they may be Ref 20. 2.3.2.1 Components of Culture The components of culture are a useful tool for marketers as they can use appropriate marketing communications to associate the product with the consumers values. Values â€Å"Values are the underlying beliefs about the appropriate ways the members of a culture should act, think, and feel† Ref21, these values are: i. Somewhat stable; ii. Somewhat general iii. â€Å"Fairly widely accepted as a guide to culturally appropriate behaviour and therefore as a ‘standard of desirable and undesirable beliefs, attitudes and behaviour† (CIM, 1993).Ref 23 Norms and Customs Norms are the rules of values on how to behave or not behave; individuals may or may not accept these norms Ref 9 (Antonides and van Raaij, 1998). â€Å"Crescive† norms are norms that are rooted in a culture (Ref 20). â€Å"Crescive† norms can also be perceived as a custom, which are the â€Å"established patterns of behaviour adopted within the society or community. They regulate and regularize social practices and define which behaviours are acceptable† (Rice, 1997) Ref 16. Williams (1981) identified four forms of customs or what Le Vine (1997) calls ‘ostensible markers from the least to the most serious enforced:Ref 19,26 Myths Myths are tales that exemplify one or more of the shared values of a culture by describing a person, event, or idea that symbolizes values (Wells and Prensky, 1996) Ref 21. Myths serve four interconnected functions in a culture: Ref 19 1. Metaphysical: explains the origin of life 2. Cosmological: all the components of the universe is part of one picture 3. Sociological: the maintaining of social order through a social code 4. Psychological: the providing of models for personal behaviour Ref 20(Solomon, 2004) Rituals a. â€Å"A ritual is a set of interrelated patterns of behaviour that have a symbolic meaning† (Ref 21), ritualized behavior is formal and ceremonial such as marriage ceremonies and religious services (CIM, 1993). Ritualistic behaviour is an individual behavior that is made into a ritual such as shaving and getting up at a certain time in the morning Ref 19 (Schiffman and Kanuk, 2003). Sacred and Profane Consumption * Sacred consumption involves items and events that are not part of ordinary activities and are treated as such, example, religious ceremonies (Ref 20). * Profane Consumption involves ordinary, everyday items and events (Ref 20) * Sacred Events when consumers activities take on special status, it can be anything from public events, sports events or holidays, as they occupy sacred time and space for the consumer Ref 20 (Solomon, 2004). Material Artefacts Material artefacts are possessions that have a special significance to members of a culture. Artefacts obtain their special significance due to the role they play in myths, customs, and rituals. Artefacts can be everyday products that have symbolic meanings, which give them special status in culture, such as red roses for Valentines Day Ref 21. Indian have different rituals, customer,myths which relates each other, due to help of British Government Indian enjoy major big Indian Festival like Diwali, Dusshera etc in UK, as festival times seems to major shopping and expenditure time of Indian , majority of Indian community still does major investment, buying or moving on special festive period or religious occasion then usual day due to long traditional belief from ancient time. Gold purchasing and wearing is one of the passion in Indian customer , Women during festive period used to buy gold and diamonds which is one of the major segment for marketer to target the ethnic community during festive period. Language and Symbols Language makes the learning and sharing of culture possible (CIM, 1993), without a common language, a shared understanding would cease to exist, which will lead to the extinction of a culture Ref 19. Symbols are an important aspect of language; they can be verbal or non-verbal (CIM, 1993). Verbal symbols include television and magazine advertisement, whilst non-verbal symbols are s, shapes and colours Ref 19. Symbols can carry a number of different meanings and have different interpretations to many people; these interpretations can be unique to one culture. India have a diverse culture with more 24 different language, having Hindi has national language, majority of Indian in UK use Hindi or English as communication language in community. According to Journal of Consumer Behaviour, Britain ethnic minority population was around 5.5 percent with spending power of L 10 Bn in 1998 which has increased drastically, whereas the population of Indian are increasing faster than Caucasian which leads increase in buying power. Many companies has started targeting ethnic group eg. Jaguar started sponsorship events of Indian Bollywood Mega Mela in London of 3 days. Indian culture are great lovers of music and art from ancient times, ancient history have shown deep interest in this field which has contributed in formation of Bollywood industry, world largest film industry in the world, which influence billion of people in India through cultural aspects and Behaviour. Before Bollywood industry was popular only in east but now every year its increase 18 % market globally with 3.6 billion global audience which higher than Hollywood which has only 2.5 billion global audience, Indian community which migrated and living in UK cannot distract from viewing Bollywood movies and channels Which has created a huge market for Indian viewer of Asian channels and Bollywood movies in UK market. As per recent survey by BBC more than 70% of British Asian homes twice the national average the Telewest, sky or cable tv at home where viewing two third of Asian viewer are made of Asian interest channels featuring dramas, Bollywood music of back home and movies. Also s urveyed revealed that majority of ethnic population have their own mobile, DVD and internet at home. Majority Indian women back in India has highly soap addicts drama , survey carried out shown that 71% percent ethnic community made a point of watching soap as compared to 56% of white woman. Leader in broadcaster were Zee TV and Star which was just a new comer in UK around 4 year before but in his second year of launch he had 90,000 strong customer of ethnic community because Star TV is one of Indian Top Channel with 42 million subscribers which show cultural inheritance in UK which has high growth rate. Some of provider like Telewest understood the consumer Behaviour of ethnic community and launch Asian Channel Package which was cheaper than individual channel and wholesome package which attracted number of customer toward him. Ref 31, 32, 33 2.3.2.2 Subcultures For a marketer culture may come across as too broad a subject, as it embraces whole societies (CIM, 1993), therefore, to make life much easier a marketer could subdivide a culture into distinct subcultures. A subculture can then be defined as groups of people within a society that share common experiences and beliefs, which distinguishes them from other groups (Ref 20). An individual can belong to a number of subcultures and these subcultures can play a crucial role in defining the extended self (Ref 20) . Rice (1997) suggests that there are five prime subcultures: Geography; Religion; Age; Gender and Ethnicity.(Ref 16) Indian with has diverse culture with varied religion, India has many sub religion which makes sub culture or sub group like Sikh religion which has same characteristics and belief like Hindu, . While Indian Muslims used to differ in culture, tradition and belief which can be a new sub culture. As under studies and my knowledge India used to be male dominant society from long time, still majority of Indian women in India used to housewife and male used to earn but in recent 20 years women in India used to work and way ahead but still male dominant the heavy purchase like home, car, investment, buying while female dominant male in purchase of household, home maintenance, buying food etc which reflect same in UK. 2.3.2.3 Acculturation Acculturation is the â€Å"process of movement and adaptation to one countrys environment by a person from another country† (Ref 20); this process is the learning of the host countries language, myths, values, customs and rituals (Wells and Prensky, 1996) Ref 21. There is also the opposite affect of acculturation which is enculturation that is the â€Å"process of learning ones native cultural values† Ref 21. (Ref 9) Antonides and van Raaij (1998) call this the process of socialization with the culture being transferred from the older to the younger generation through family, religious groups, schools and other agents. Ref 9 Acculturation agents can align with the culture of origin or the culture of immigration in Fig. 1.3 shows how well an individual responds to the agents depends on their individual differences, these responses thus affect the acculturation process such as; movement which is the physical movement from one location to another; there is then the need for the translation of social rules in the host country; and this leads to the adaptation process by the consumer, on how much do they align with the host nation. The acculturation outcomes are either to assimilate with the host nation, by adopting their values; maintain practices from culture of origin; or just segregate completely from the host nation, by only buying goods from people from their culture. Many Indian migrated from India have cultural Behaviour of back country as well they kindly start adopting the British culture , hence year after year they have 20-30 percent of British culture which has replaced some of the Indian culture, Majority Indian in back country used to religious more but after migrating they become less religious , dont concern more than usual, also majority of Indian in back country use to Vegetarian and keep to avoid Liquor but after several years in UK they used to eat majority on Non Vegetarian food except religion prohibition of eating beef (Hindu and Sikh) and pork(Muslims) and start drinking more than usual, the back country they used to leave in joint family and have strong family structure , which has little bit change in coming year, the new generation British Indian or Indian leaving from long time use to leave separately than joint family , get separate from parents and leave independently but still have strong bondage with family which shows m ixed culture of Indian and British. According Sinha (1969) and Mandelbaum (1970) study indicated that the Indian families are of dominant concern for most Indians. Individuals within the family are instilled with collectivist cultural values of duty, interdependence, obedience, reliability and sacrifice for the group (Triandis, 1989; Triandis et al., 1993). In contrast, individualistic cultures encourage detachment from the family unit and greater individuality (Halman, 1996). It is British Indians relationship with their family that may be a major cultural determinant upon their buyer behavior. The family units influence, within the collectivist-individualistic context noted earlier, therefore, will be assessed through three buyer behavior areas: use of possessions to enhance social status, materialism and reference group use. Family structure and Reference Group According to Journal of Consumer Behaviour , Ethnic Indian Community have family dominant concern for most Indian, individuals within the family has distinct collectivist value of culture, duty, obedience, interdependence, sacrifice and reliability where in contrast Britishs Causcaucian are detached and great individuality. This relationship bondage within the family structure has major cultural determinant upon their buying Behaviour. As per Journal Indian Immigrant are more concerned with possessions than people, inferring and have a materialistic Behaviour which is other way on British Community. Ref 30 A reference group is â€Å"any person or group that serves as a point of comparison for an individual in forming either general or specific values, attitudes, or a specific guide for behavior† (Ref 19), these groups can be real or imagined (Ref 20). Reference groups can be influential as they can be â€Å"informative, utilitarian, and value-expressive† (Ref 20). Normative reference groups influence general values or behavior, whereas comparative reference groups are benchmarks for specific attitudes or behavior (Ref 19). Factors that affect reference groups influence on consumers may include: * Information and experience: an individual who has knowledge of a product/service is less likely to be influence by a group * Credibility, attractiveness, and power of the reference group: these groups can induce consumer attitude and behavior change, as they are seen as trustworthy and knowledgeable * Conspicuousness of the product: reference groups influence varies according to whether the product visually conspicuous (one that stands out) or verbally conspicuous (a product can be easily described) (Ref 19) There are several types of reference groups that can be defined as either ‘aspirational (successful business people sportsmen or celebrities) or ‘membership (groups that an individual can identify with) groups (Solomon, 2004)Ref 20. Some of these reference groups are: * Friendship groups: they are informal groups and are the most influential group when it comes to the purchase decision * Shopping groups: they are made-up of family or friends, this function can be referred to as purchase pals * Work groups: because of the amount of time people spend at work, the work group can be a major influence (Ref 19) According to Green the family structure favored by Indian community which have traditional family structure and contrary to it, as the new generation has different attitudes towards family structure across the generation in Indian families. The family structure favored by Indian groups varies enormously It is clearly important for marketers to be aware of these divergent trends since they will have important implications for advertising and promotional activities directed towards the various ethnic groups (Green, 1999). According to Journal of Consumer Behaviour, due to collectivist culture of Indian which are affected by external perceptions, then reference group selection may be determined by the need of gain recognition of the familys reputation, majority British Indian seek recognition from these reference group, secondly work colleagues and friends have greater collectivist power of culture. Ref 30 Age profile of minority groups According to Journal Dawn Burton (Ref 24) Age profile plays an important role in minority group, one of the most significant features of the Indian population is its younger age as compared to white indigenous population. According to data 1990, 48 percent of the ethnic minority population was under 24 years of age in 1999 compared with 31 percent of the white population. Indian group had 41 percent of individual in this age group, As a study in US marketer have recognized that younger age profile of minority group is having an important impact on consumer behaviors . T he studied show that Indian Minorities community have higher percentage of card ownership, ATM usages, use cards for withdraw cash and more likely purchase goods and service with cards than the white population Ref 26(Texas Banking, 1999) hence Indian community has similar culture expectation like in Britain . Ref 24,26. Economic and Social Characteristics Economic Environment consists of factors which affects the consumer purchasing power and spending patterns, According to Adrian Palmer for â€Å"marketer its hard to appreciate fully the cultural values of a society, attitudes to specific product changes through time and at any one time between different groups†. â€Å"Like in Home market specially UK, company should understand the processes of gradual changes and be prepared to satisfy the changing needs of consumer† (Ref 22). As a new challenges for marketing are posed by the diverse cultural tradition of ethnic minorities. According to Journal Dawn Burton issues can be addressed our social and economic factor, the issues holds religion, household income and family structure. Before targeting a specific segment its important level of income and expenditure, the superiority of Indian groups over the white category is party accounted for the higher proportion of pensioner households in the white indigenous population.(R ef 24) The PSI survey is useful in this respect since it categorizes the proportion of members of different ethnic groups in various income brackets. The ethnic Indian and White Population were on a par but there are significant proportions of high earners in the Indian, Indian population in UK are at high earning capacity with high saving as compared to White or any other community Ref 32. They have strong purchasing power. According recent publication in newspaper, out of 10 richest people of UK five are from Indian origin, hence from this statistics one can imagine how far Indian are economical strong in UK, world 3 richest and UK Top richest person Mr. Laksmi Mittal belong to India, majority of Indian living in UK are economical sound and having high saving then the normal British consumer, due to which they have strong buying power Ref 35, Ref 40 According to International Journal of Entrepreneurship, majority of Indian community in UK runs small scale business, in transition which are lining into owing large scale, profitable, enterprise has not the attracted investment but attention of media and research , nearly of half of independent shops in Britain in 1990 were own by Ethnic Asian entrepreneur which have high scale of Indian, in which have around 300 millionaire 1990 which have increased to 500 or more today, whereas they are 2 percent of working age population in Britain , contributing towards wealth creating by employment which is greater in size. According to Modood in 1997 the average weekly earning of Indian exceeds those of White population In Britain. Ref 30,33 As Success of the Asian Business in Britain likes in their cultural characteristics which have high encourage thrift, hard and reliance on family lab our. There are major cultural facts like mechanisms of self help, family controlled business, informal source, local ethnic community market which builds the business to new ladder. A enterprenuser who makes productive use of the community like cheap family labor, finance within community, cultural values, niche marketing to satisfy the demands of their own community for ethnic product which have huge population to fulfill. Ref 30 Ethnic business has asserted the success due to sense of developing from small to large scale business, due to ability of branch out from ethnic enclave economy. According social aspect, Indian community have strong social education belief, around 60 percent have done bachelors degree or higher qualification which impact on growth in business and employment.Ref 30,33 Technological According Kotler Technological environment is a Force that create new technologies, creating new product and market opportunities. Today every second or day a new technology hits the market which Technological point of Indian Consumer In UK have hardly any in-depth studies, but Study by PSI (see Table IV).showed the individual about their ownership of a range of consumer durables, as compared to white population. In comparison Indian community has higher ownerships of some items like micro-ovens, video recorder, computer, washing machine etc than other community hence the market looks immense for specific Indian Segment. Indian community have higher eagerness toward technology aspects specially for household purchase , also one of the studies said that Car market has began specific target towards Indian consumer due to there high tech power consumer attitude and affording capacity. In UK, most of Indian community gives first preference to buy Mercedes rather than any other car due to its royal status, which similar concept previous back in India. As India is becoming a global hub for IT, greater increase in Internet User and IT becoming a way to cheaper communication to India most of the Indian prefer to buy computer or high tech things to get connected. According to The Guardian majority of Indian were more likely to have own mobiles phone, dvd, household durables, internet at home than white population in UK. Ref 32,33 Lifestyle Lifestyle segments are measured through the use of A.I.O. (Activities, Interests, and Opinions) rating statements. It measures peoples activities in terms of how they live their lives; their interests on what is important to the consumer; their opinions on themselves and social/cultural issues; as well as demographic descriptors such as age, education, income, etc. Ref 36 (Plummer, 1974) Ref 11 (Brassington and Pettitt, 2003). Table 1.1 lists elements,