Factors affecting Impulsive Buying

Consumer Behavior
Executive Summary
Customers buy products especially in B2C segment and coming under convenience goods
category very frequently and on an impulse i.e., think a little about it. They are low priced and
have many near substitutes and therefore, these types of product have relatively strong branding,
eye-catching colors & designs so that they stand apart. Consumer’s behavior is different while
purchasing these products. These purchases are mostly done in the spur/heat-of-the-moment
without any advance planning. In this study, we have tried to understand the factors resulting in
Impulse buying behavior in the customers. Our study indicates that discounts/ promotions and in
store environment strongly influence the impulse behavior in general consumers/ shoppers.
Between the two situational factors, discounts and promotional offers appears to be more
significant factor to promote impulse buying compared to in-store environment. Further,
demographic factors like age, gender, marital status and income also have been found to have an
impact on the impulsive buying behavior.
Table of Contents
1. Introduction..............................................................................................................................1

1.1. Background Of study........................................................................................................1

1.2. Statement of Issue.............................................................................................................1

1.3. Hypothesis.........................................................................................................................2

2. Conceptual Framework............................................................................................................2

3. Methodology............................................................................................................................3

3.1. Research Approach...........................................................................................................3

3.2. Instrument and Validity....................................................................................................3

3.3. Sample and Sample Size...................................................................................................4

4. Data Analysis and Findings......................................................................................................4

4.1. Research Frequencies........................................................................................................4

4.2. Analysis.............................................................................................................................5

4.3. Findings.............................................................................................................................6

5. Conclusion and Recommendations..........................................................................................7

Appendix..........................................................................................................................................8

References........................................................................................................................................9
1. Introduction

1.1. Background Of study

Impulse buying, as suggested by (Rook D. , 1987) occurs, when a consumer
experiences a sudden, often persistent urge to buy something immediately. The impulse
to buy is hedonically complex and may stimulate emotional conflict. Also, impulse
buying is prone to occur with diminished regard for its consequences. Majority of the
purchases are found to be made on impulse. Impulsive buying therefore, has been
considered an important feature in consumer behavior.
1.1.1. Elements driving Impulse buying
 Mood of customer
 Price
 In store environment
 Credit availability
 Attractiveness of a
product
 Culture
 Brand name
 Advertisement
 Quality
 Variety
 Fashion and trends
 Varying impulse buying behavior was shown not only by different shoppers purchasing
over the same item but also by the same shopper purchasing the same item under
different circumstances such as time, location. This resulted Stern (1962) to categorize
the impulsive purchase into a “mix” of different kinds of impulse buying like;
a) Pure impulse buying: It is a novelty or escape purchase which breaks a normal
buying pattern.
b) Reminder impulse buying: Occurs when a shopper sees an item or recalls an
advertisement or other information and remembers that the stock at home is low
or exhausted.
c) Suggestion impulse buying: Occurs when a shopper sees a product for the first
time and visualizes a need for it.
d) Planned impulse buying: Occurs when the shopper makes specific purchase
decisions on the basis of price specials, coupon offers.
1.2. Statement of Issue
Previously impulse buying was synonymous with “unplanned purchase”, that is the
shopper didn’t make purchase planning in advance (Stern, 1962) and it focused on the
product rather than the customers. The importance of understanding impulse purchasing
in retail stores was first identified in the marketing literature over sixty years ago
(Clover, 1950). In today’s market-oriented society impulsive purchase buying pattern is
increasing. Therefore, it is important for the marketers to study the impulse buying
behavior of the consumers.
The study on impulse buying behavior is broadly discussed on the factors that could
stimulate the behavior for customers towards different stimuli. Impulse buying behavior
of shoppers are affected by external factors, internal factors, demographic factors,
situational and socio-cultural factors (Huang & Hsieh, 2011) & (Wansink 1994).
Among these various factors, due to time limitation, we have considered pricing in terms
of discount / offers and in store environment and the demographic factors like Age,
Income and Marital Status as the concept under the study influencing impulsive buying
and tried to study the standalone impact of the demographic and situational factors.
 1.3. Hypothesis
H0: There is no significant relationship between promotional activities, in store
environment and impulsive buying.
H1: Consumer’s impulse buying behavior and promotional activities has a positive
relationship.
H2: Consumer’s impulse buying behavior and in-store design & display have a positive
relationship.

2. Conceptual Framework
Historically, impulse buying was defined as unplanned purchases. Rook redefined the
concept of impulsive buying in 1987. Impulse buying has been defined as relatively
extraordinary, exciting, and more emotional than rational, and it is characterized by (1)
relatively rapid decision making and (2) a subjective bias in favour of immediate possession
(Rook D., 1987) (Rook & Hoch, 1985).

(Applebaum, 1951) have specifically included "exposure to a stimulus" in the definition of

impulse purchase. Impulse buying refers to purchasing something you do not have in mind or
on your shopping list.

(Zhou & Wong, 2004) Divide the in-store shopping environment into two different effects;
the promotional and the atmospheric effects.
Promotional effects include discounts, coupons, and lower prices, while atmospheric effects
include in-store display and designs, advertisement, sales personnel, and buyers buying or
crowding.

2.1 Promotional Offers and Discounts:

Past research shows that 88% of impulse buying is affected by the perception of lower prices
when visiting the stores. Consumers use price cues when making a purchase decision.
Discounts and offers implying savings create positive emotions in customer minds, resulting
in a positive response towards the lowered price and inducing purchase.
2.2 In-Store Environments:
In-store shopping environment has been reported as one of the significant determinants of
impulse buying. The in-store designs and displays, background music, well-mannered and
friendly personnel, in-store wall ads and promotion displays, cleanliness, and scents all add
up to the in-store shopping environment.

Advertisments
Discounts & Discounts
Promotions Price
Campaigns

Impulsive Buying

Ambiance
Display
Store
Facilities
Environment
Layout
Employee

Figure 1: Conceptualization of Variables

3. Methodology
3.1. Research Approach: The research focuses on identifying the factors influencing the
impulsive behavior in consumers. The data collection was primarily done by preparing
and sending across a questionnaire. Due to resource limitations, direct approach, i.e.
visiting the stores and asking the customers to fill in the questionnaire couldn’t be
carried out. The primary objective of the study is to test and examine the nature of
relationship between the above discussed variables rather than finding something new.
Hence, a quantitative approach has been used for data collection & analysis.
3.2. Instrument and Validity: A five point scale/rating based questionnaire has been used
and to ensure study’s validity and reliability, questions have been referred from past
studies related to : Buying Impulsiveness Scale and In store environment.
3.3. Sample: Due to resource limitations, a convenient sampling method has been used. We
asked our friends, colleagues and relatives (Total respondents: 100 ) to respond to
questionnaire.

4. Data Analysis and Findings

4.1. Data Frequency
4.1.1. Age
Age Frequency Percentage
20-40 80 80%
40+ 20 20%
Total 100 100%

Out of the total respondents, 80% belonged to 20-40 age group and 20% were 40+.
4.1.2. Gender
Gender Frequency Percentage
Female 45 45%
Male 55 55%
Total 100 100%

45% of the total respondents were female and 55% were male
 4.1.3. Marital status
Marital Status Frequency Percentage
Married 68 68%
Unmarried 32 32%
Total 100 100%

68% of the respondents were married and 32% were unmarried.

4.1.4. Monthly Income
Income Frequency Percentage
<50,000 38 38%
50,000- 41 41%
100,000
100,000> 21 21%
Total 100 100%

People with monthly earning less than 50,000/- accounted for 38% , 41% of the respondents
earned between 50k-100k per month and 21% of the respondents earned more than 100k per
month.
Analysis
Multiple regression analysis has been used to identify the underlying relation between the
variables. Impulsive behavior has been measured in terms of discounts/promotional offers and
In-store environment.

Regression Statistics
Multiple R 0.61
R Square 0.38
Adjusted R Square 0.36
Standard Error 1.11
Observations 100
 The regression analysis indicates value of R as 0.61 i.e., the relationship between the
dependent variable – Impulsive buying and independent variables – Discounts
/promotions and in store atmosphere is 61%. It also shows that about 38% of the
variance in impulsive buying is explained by the regression model.

ANOVA
  df SS MS F Significance F
Regressio 2 74.2800 37.1400 29.8424 7.93604E-11
n 6 3 8
Residual 97 120.719 1.24453
9 5
Total 99 195      

The ANOVA table indicates that the model is significant where F-value is 29.84 and
significance is <0.05.

  Coefficie Standard t Stat P- Lower Upper Lower Upper

nts Error value 95% 95% 95.0% 95.0%
Interc - 0.712099 - 0.0143 - - - -
ept 1.775971 62 2.4939 23 3.189291 0.362650 3.189291 0.362650
118 9 745 49 74 492
Discou 0.838417 0.145561 5.7598 9.91E- 0.549518 1.127316 0.549518 1.127316
nt 478 254 95 08 683 274 683 274
In- 0.475344 0.159563 2.9790 0.0036 0.158654 0.792033 0.158654 0.792033
store 229 542 28 54 767 692 767 692

The t-Stat and P-value for each variable indicates that there is a significant impact of
each variable on impulsive buying. P-value for discount and offers is <0.05 and in store
environment is 0.0036<0.05. Therefore, accepting the alternative hypothesis, H1 and H2.
Looking at the coefficients, we can say firmly that with a unit change in discount offer
and in store environment, the impulsive behavior changes by 83% and 47%,
respectively.
 4.2. Findings on Situational Factors

 Discount offers and in store environment have a direct and significant impact on
the impulsive buying behavior of consumers
 The correlation is positively significant, and impulse is triggered when there is a
positive change in the factors and the impulse is withdrawn when the factors are
negative.
 Among the two factors identified, discounts and pricing have higher influence on
impulsive behavior compared to in store environments.
4.3. Findings on Demographic Factors ( Graphs attached in the Annexure )
 35% of the respondents showed very strong impulsive buying behavior, 20%
showed strong behavior and 45% showed medium-weak buying behavior
Very strong & Strong Buying Behavior characteristics:
 100% belong to the younger age group (20-40)
 More men showed the buying behavior compared to women
 Most belonged to income group of >50k per month and irrespective of the
marital status
Medium-Weak Buying Behavior characteristics:
 Married men /women showed restraint
 Income class of <50000 showed less tendency for impulsive buying

5. Conclusions & Implications for Marketeers

Our study indicates that discounts/ promotions and in store environment strongly influence
the impulse behavior in general consumers/ shoppers. Between the two factors, discounts and
promotional offers appears to be more significant factor to promote impulse buying
compared to in-store environment. In order to trigger impulsive buying behavior,
producers/stores need to :
 Offer periodic promotions/discounts/ attractive pricing
 Introduce loyalty /reward schemes
 Mileage cards, affiliate programs
 In store environment although not much effective when compared with pricing and
promotional offer, also plays a part in triggering impulsive behavior. In store factors such as
ambience, product displays, layout, employee’s behavior, infrastructure and facilities plays
an important role in impulsive buying behavior.
 Create & maintain a good, amicable, ambient and try to make the consumer’s
shopping experience unique in itself
 Train employees
 Maintain proper lighting, displays, scents in the store
Appendix

consumer behaviour
project data.xlsx

Questionnaire:
Age Sex
Marital Status Education

Monthly Income (Please Tick) Below 50,000 50,000 – 1,00,000 Above 1,00,000
Please tick the most appropriate option that describes your buying behavior:
SD=Strongly, Disagree, D=Disagree, N=Neutral, A=Agree, SA=Strongly Agree
S. No Items SD D N A SA
1 I often buy things spontaneously
2 “Just do it” describes the way I buy things
3 I often buy things without thinking
4 “I see it, I buy it” describes me
5 Buy now think later describes me
6 Sometimes I feel like buying things on the spur of the moment
7 I buy things according to how I feel at the moment
8 I carefully plan most of my purchases
9 Sometimes I am a bit reckless about what I buy
10 I end up buying products with attractive prices even if it is not in my
shopping list
11 Discount attracts me to buy things on the spot
12 Various schemes (gifts and offers) encourages me to buy items that
are not in my shopping list.
13 My shopping is influenced by in store advertisements
14 Attractive product displays encourages me to buy more
15 Pleasant ambiance of a store encourages me to buy more
16 I tend to buy more when the store employees are helpful and
friendly
17 The attractiveness of the physical facilities has a positive influences
my buying behavior
18 I often end up with less items when the store is overcrowded
 Impulsive Buying Behaviour Exhibited by
Respondents
50
45
45
40
35
35
30
25
20
20
15
10
5
0
Very strong Strong Medium-Weak

Very Strong Impulsive Behaviour

100
100
90
80
70 60
60 54 54
50 46 43
40
40
30
20
10 0 3
0
ale ale Ag
e ge ie
d
ie
d
m
e
m
e
m
e
M m +A ar
r
ar
r co co co
Fe 40 4 0 In In In
0- m M K 0K 0K
2 Un 0 0
<5 -1
0
>1
0 K
5
 Strong Impulsive Behaviour
100
100 90
90
80
70
60 55
50 50
50 45
40
30
20
10 5 5
0
0
ale ale Ag
e
Ag
e
r ie
d
r ie
d
m
e
m
e
m
e
M m
40
+ ar ar co co co
Fe 0- 4 0
m M In In In
2 Un 0 K 0K 0K
<5 0 0
-1 >1
5 0K

Medium-Weak Impulsive Behaviour

100
90 82 80
80
70
60 56 56
50 44 44
40
30
18 18
20
10 2
0
ale ale Ag
e ge ie
d
ie
d
m
e
m
e
m
e
M m +A ar
r
ar
r co co co
Fe 40 4 0 In In In
0- m M K 0K 0K
2 Un 0 0
<5 -1
0
>1
0 K
5
References

Clover, V. (1950). Relative importance of impulse buying in retail stores. Journal of marketing,
15(1), 66-70.
Baker, Julie, A. P., Grewal, D., & Voss, G. B. (2002). The Influence of Multiple Store
Environment Cues on Perceived Merchandise Value and Patronage Intentions. JM, 120-
141.
D.Bellenger, Robertson, D., & E.Hirschamn. (1978). Impulse buying varies by products. Journal
of Advertising Research, 18,, 15-18.
Huang, L.-Y., & Hsieh, Y. (2011). What drives consumer impulse buying? Evidence from a
retail setting in Tiwan. Journal of International Management Studies, 6(1).
Rook, D. (1987). The buying impulse. Journal of consumer research, 14(2), 189-99.
Rook, D., & Fisher, R. J. (1995). Normative Influences on Impulsive Buying Behaviour. Journal
of Consumer Research,22,, 305-13.
Stern, H. (1962). The Significance of Impulse buying today. Journal of Marketing, 59-62.