CHAMELI DEVI INSTITUTE OF TECHNOLOGY AND

MANAGEMENT INDORE

“A study of influence of consumer’s disposable income on buying decision “

A MAJOR RESEARCH PROJECT

SUBMITTED FOR THE PARTIAL FULFILLMENT OF

MASTER OF BUSINESS ADMINISTRATION DEGREE AWARDED BY-DAVV INDORE

RESEARCH GUIDE – RESEAECH CANDIDATE-

DR.ATUL VORA SUMIT GOUR

CHAMELI DEVI INSTITUTE OF TECHNOLOGY & INDORE Ro.No.- 082344620050

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Certificate of Faculty Guide

This is to certify that Mr. Sumit Gour student of MBA program has completed his MRP entitled “A study of influence of consumer’s disposable income on buying decision “under my guidance.

He carried this project with full sincerity & declaration.

Date:- Faculty Guide

Dr.Atul Vora

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Declaration by Student

I here by declare that the project report entitle “A study of influence of consumer’s disposable income on buying decision “submitted by me to the CHAMELI DEVI INSTITUTE OF TECHNOLOGY & MANAGEMENT INDORE for the consideration for the award of Master Degree of Business Administration (MBA) represented by my own work except for the guidance and suggestion received, which have been suitably acknowledged.

I further state that this work doesn’t form part of my or any other report submitted this or any other University/Institute for the award of any degree or diploma.

Sumit gour

Date:

Place:

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Acknowledgement

This project has been a truly educative and enlightening experience for me, one that has seen me grow in professionally and personally by expanding my domain knowledge, for this I would like to thank the following people without whom this project could not be completed.

First I would like to thank to all staff specially Dr.Atul Vora who has been helpful throughout the project.

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Contents

Chapter Particulars Page No.

1. Introduction

A: Conceptual framework 7

B: Review of literature 21

C: Objective of the study 22

D: Hypothesis

2. Methodology

A: The Study 24

B: The Research Design 24

C: The Sample 24

D: The Tool Used

a. For Data Collection 24

b. For Data Analysis 25

3. Data Analysis & Discussion 27

4. Conclusion 38

5. Limitation 40

6. Suggestion & Implication of The Study 43

7. References 44

8. Appendices 46

A: Questionnaire5

INTRODUCTION

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A) Conceptual framework

Income or economical situation of a person is one of the factors which influence the behavior of any individual during buying or purchasing of goods and services. Income is a physiological factor which influences the behavior of consumer. Income is not only the thing which can decide consumer behavior, because every individual differ from that of others in perception as well as their needs are different.

Possibly the most challenging concept in marketing deals with the understanding why buyers do what they do (or don’t do). But such knowledge is critical for marketer since having strong understanding of buyer’s behavior will help shed light on what is important to the customer and also suggest the important influences on customer decision making. Using this information, marketers can create marketing programs that they believe will be of interest of consumers.

So we need to consider disposable income as a base for knowing their behavior based on their income. Disposable income is income which remains after tax reduction. Buyer’s behavior is deeply rooted with psychology with dashes of psychology thrown in just to make things interesting. Since every person in the world is different, it is impossible to have simple rules that explain how buying decision are made.

Consumer behavior refers to selection purchase and consumption of goods and services for the satisfaction of their wants. Presently the Indian economy is $1 trillion. From the past few years disposable income of an average Indian is rising because of the increase in middle and upper middle consumer income, and this is the factor which enabling them to spend more and more

Consumer’s income could be divided in following groups.

Money or nominal income: money received

Real income – purchasing power of money

Disposable income – money left after compulsory deductions

Discretionary income – income which can be used as we please after allowing

for regular commitments such as utility bills etc.

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Disposable income

Disposable income is total personal income minus personal current taxes. In national accounts definitions; personal income minus personal current taxes equals disposable personal income. Subtracting personal outlays (which includes the major category of personal (or, private) consumption) yields personal (or, private) savings.

Consumption expenditure plus savings equals disposable income after accounting for transfers such as payments to children in school or elderly parents’ living arrangements.

The marginal propensity to consume (MPC) is the

fraction of a change in disposable income that is consumed. For example, if

disposable income rises by $100, and $65 of that $100 is consumed, the MPC is

65%. Restated, the marginal propensity to save is 35%.

The lowered disposable income is recognized to be

the greatest challenge for the consumers' purchasing activities. All of the

interviewees described that lowered disposable income makes them feel more

careful when buying particular products. They also revealed that they are likely to

discuss their purchases and shopping lists with their families or close friends in

order to achieve greater buying efficiency in terms of buying the best quality for

the amount of financial value they sacrifice. This suggests that group influence

would be a great determinant of customer behavior, which is an interesting context

for further academic research as it would be valuable for a wide range of academic

and commercial parties to gain more insight on the way peer pressure affects

consumers during an economic crisis.

The interviewees revealed that when they discuss

purchases they are most interested in the price-quality ratio and the transaction

costs, which they are likely to experience during the buying processes. However,

they also shared that price and quality are important determinants but many of

them still identify the process of purchasing as a pleasurable event and therefore

customer service and in-store environment are of high importance.

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A person buying behavior is a true reflection of the social class he/she belongs to.

Social class is basically determined by the level of income of a person. And as a

matter of fact every individual spends according to the spending capacity he has,

which, in turn, is determined by his level of income. Social class determines what a

person would buy, and in what quantity. It also determines the frequency of use of

a product. For more details see the link below:

Discretionary income  

It is the income after subtracting taxes and

normal expenses (such as rent or mortgage, utilities, insurance, medical,

transportation, property maintenance, child support, inflation, food and sundries,

&c.) to maintain a certain standard of living. It is the amount of an individual's

income available for spending after the essentials (such as food, clothing, and

shelter) have been taken care of:

Discretionary income = Gross income - taxes – necessities

Despite the formal definitions above, disposable

income is commonly used to denote discretionary income. The meaning should

therefore be interpreted from context. Commonly, disposable income is the amount

of "play money" left to spend or save. The Consumer Leverage Ratio is the

expression of the ratio of Total Household Debt to Disposable Income.

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Per capita income

Per capita Income means how much an individual earns, of the yearly income that is generated in the country through productive activities. Per capital income of India means income of each Indian if national income is evenly divided among the country's population of 117 crore. Avg per capita income of India- $441.56 per person.

The per capita income grew by 10.5 per cent to Rs 44,345 in 2009-10 against Rs. 40,141 in the year-ago period, according to the government.

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Consumer behavior

Consumer behavior is the study of when, why,

how, and where people do or do not buy a product. It blends elements

from psychology, sociology social anthropology and economics. It attempts to

understand the buyer decision making process, both individually and in groups. It

studies characteristics of individual consumers such as demographics and

behavioral variables in an attempt to understand people’s want. It also tries to

assess influences on the consumer from groups such as family, friends, reference

groups, and society in general.

Customer behavior study is based on consumer

buying behavior, with the customer playing the three distinct roles of user, payer

and buyer. Relationship marketing is an influential asset for customer behavior

analysis as it has a keen interest in the re-discovery of the true meaning of

marketing through the re-affirmation of the importance of the customer or buyer. A

greater importance is also placed on consumer retention, customer relationship

management, personalization, customization and one-to-one marketing. Social

functions can be categorized into social choice and welfare functions.

Each method for vote counting is assumed as

social function but if Arrow’s possibility theorem is used for a social function, social

welfare function is achieved. Some specifications of the social functions are

decisiveness, neutrality, anonymity, monotonicity, unanimity and homogeneity and

weak and strong .No social choice function meets these requirements in an ordinal

scale simultaneously. The most important characteristic of a social function is

identification of the interactive effect of alternatives and creating a logical relation

with the ranks. Marketing provides services in order to satisfy customers. With that

in mind, the productive system is considered from its beginning at the production

level, to the end of the cycle.

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Types of Consumer Behavior

There are four distinctive buying behavior patterns which can be outlined. They differ with respect to the frequency of occurrence, emotional involvement, decision-making complexity and risk such as:

1) Programmed behavior.

2) Limited decision-making buying behavior.

3) Extensive decision-making buying behavior.

4) Impulsive buying.

Programmed behavior, also known as habitual buying behavior, is the buying pattern which can be characterized as the routine purchasing of low cost items.

Limited decision-making buying behavior can be characterized as a buying pattern that involves moderate levels of decision-making and comparatively low amounts of required information to trigger purchasing.

Extensive decision-making buying behavior.This type of behavior is characterized with complex decision-making, where the buyer needs a comparatively longer period to make a decision and greater amounts of information gathering.

Impulsive buying is characterized as a buying process that does not involve any conscious planning. It is a short-term phenomenon, which is usually provoked by an external stimuli and irritation, making particular products irresistible to consumers at a given short period of time.

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Factors Affecting Consumer Behavior

1) Cultural Factors

Consumer behavior is deeply influenced by cultural factors such as: buyer culture, subculture, and social class.

• Culture

Basically, culture is the part of every society and is the important cause of person wants and behavior. The influence of culture on buying behavior varies from country to country therefore marketers have to be very careful in analyzing the culture of different groups, regions or even countries.

• Subculture

Each culture contains different subcultures such as religions, nationalities, geographic regions, racial groups etc. Marketers can use these groups by segmenting the market into various small portions. For example marketers can design products according to the needs of a particular geographic group.

• Social Class

Every society possesses some form of social class which is important to the marketers because the buying behavior of people in a given social class is similar. In this way marketing activities could be tailored according to different social classes. Here we should note that social class is not only determined by income but there are various other factors as well such as: wealth, education, occupation etc.

2) Social Factors

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Social factors also impact the buying behavior of consumers. The important social factors are: reference groups, family, role and status.

• Reference Groups

Reference groups have potential in forming a person attitude or behavior. The impact of reference groups varies across products and brands.

• Family

Buyer behavior is strongly influenced by the member of a family. Therefore marketers are trying to find the roles and influence of the husband, wife and children. If the buying decision of a particular product is influenced by wife then the marketers will try to target the women in their advertisement. Here we should note that buying roles change with change in consumer lifestyles.

• Roles and Status

Each person possesses different roles and status in the society depending upon the groups, clubs, family, organization etc. to which he belongs. For example a woman is working in an organization as finance manager. Now she is playing two roles, one of finance manager and other of mother. Therefore her buying decisions will be influenced by her role and status.

3) Personal Factors

Personal factors can also affect the consumer behavior. Some of the important personal factors that influence the buying behavior are: lifestyle, economic situation, occupation, age, personality and self concept.

• Age

Age and life-cycle have potential impact on the consumer buying behavior. It is obvious that the consumers change the purchase of goods and services with the passage of time. Family life-cycle consists of different stages such young singles, married couples, unmarried couples etc which help marketers to develop appropriate products for each stage.

• Occupation

The occupation of a person has significant impact on his buying behavior. For example a marketing manager of an organization will try to purchase business

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suits, whereas a low level worker in the same organization will purchase rugged work clothes.

• Economic Situation

Consumer economic situation has great influence on his buying behavior. If the income and savings of a customer is high then he will purchase more expensive products. On the other hand, a person with low income and savings will purchase inexpensive products.

• Lifestyle

Lifestyle of customers is another import factor affecting the consumer buying behavior. Lifestyle refers to the way a person lives in a society and is expressed by the things in his/her surroundings. It is determined by customer interests, opinions, activities etc and shapes his whole pattern of acting and interacting in the world.

• Personality

Personality changes from person to person, time to time and place to place. Therefore it can greatly influence the buying behavior of customers. Actually, Personality is not what one wears; rather it is the totality of behavior of a man in different circumstances. It has different characteristics such as: dominance, aggressiveness, self-confidence etc which can be useful to determine the consumer behavior for particular product or service.

4. Psychological Factors

There are four important psychological factors affecting the consumer buying behavior. These are: perception, motivation, learning, beliefs and attitudes.

• Motivation

The level of motivation also affects the buying behavior of customers. Every person has different needs such as physiological needs, biological needs, social needs etc. The nature of the needs is that, some of them are most pressing while others are least pressing. Therefore a need becomes a motive when it is more pressing to direct the person to seek satisfaction.

• Perception

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Selecting, organizing and interpreting information in a way to produce a meaningful experience of the world is called perception. There are three different perceptual processes which are selective attention, selective distortion and selective retention. In case of selective attention, marketers try to attract the customer attention. Whereas, in case of selective distortion, customers try to interpret the information in a way that will support what the customers already believe. Similarly, in case of selective retention, marketers try to retain information that supports their belief.

• Beliefs and Attitudes

Customer possesses specific belief and attitude towards various products. Since such beliefs and attitudes make up brand image and affect consumer buying behavior therefore marketers are interested in them. Marketers can change the beliefs and attitudes of customers by launching special campaigns in this regard.

Black box model

ENVIRONMENTAL FACTORS

BUYER'S BLACK BOX

BUYER'S RESPONS

EMarketing

Stimuli

Environmental

Stimuli

Buyer Characteristics

Decision Process

ProductPricePlacePromotion

EconomicTechnologicalPoliticalCulturalDemographicNatural

AttitudesMotivationPerceptionsPersonalityLifestyleKnowledge

Problem recognitionInformation searchAlternative evaluationPurchase decisionPost-purchase

Product choiceBrand choiceDealer choicePurchase timingPurchase amount

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behavior

The black box model shows the interaction of stimuli, consumer characteristics, and

decision process and consumer responses it can be distinguished between

interpersonal stimuli (between people) or intrapersonal stimuli (within people). In

that model the focus is not set on the processes inside a consumer, but

the relation between the stimuli and the response of the consumer.

The marketing stimuli are planned and processed by

the companies, whereas the environmental stimulus is given by social factors,

based on the economical, political and cultural circumstances of a society. The

buyer’s black box contains the buyer characteristics and the decision process,

which determines the buyer’s response.

Consumer’s purchasing model

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Need recognition

Need recognition is the first and foremost step of consumer purchasing behavior, needs are different for different one sometimes organization’s need becomes platform for purchasing, marketer works on the need

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of consumer some needs are created by marketer need recognition gives the right direction to the process of information search.

Information search

Once the consumer has recognized a problem, they search for information on products and services that can solve that problem. Belch and Belch (2007) explain that consumers undertake both an internal (memory) and an external search.

Sources of information include:

Personal sources

Commercial sources

Public sources

Personal experience

The relevant internal psychological process that is associated with information

search is perception. Perception is defined as "the process by which an individual

receives, selects, organizes, and interprets information to create a meaningful

picture of the world".

The selective perception process

Stage Description

Selective exposure consumers select which promotional messages they will

expose themselves to.

Selective attention consumers select which promotional messages they will

pay attention to.

Selective comprehension consumer interprets messages in line with their

beliefs, attitudes, motives and experiences.

Selective retention consumers remember messages that are more meaningful

or important to them.

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Evaluation of alternatives

At this time the consumer compares the

brands and products that are in their evoked set. How can the marketing

organization increase the likelihood that their brand is part of the consumer's

evoked (consideration) set? Consumers evaluate alternatives in terms of the

functional and psychological benefits that they offer. The marketing organization

needs to understand what benefits consumers are seeking and therefore which

attributes are most important in terms of making a decision.

Purchase decision

Once the alternatives have been evaluated, the

consumer is ready to make a purchase decision. Sometimes purchase intention

does not result in an actual purchase. The marketing organization must facilitate

the consumer to act on their purchase intention. The organization can use variety

of techniques to achieve this. The provision of credit or payment terms may

encourage purchase, or a sales promotion such as the opportunity to receive a

premium or enter a competition may provide an incentive to buy now. The relevant

internal psychological process that is associated with purchase decision is

integration. Once the integration is achieved; the organization can influence the

purchase decisions much more easily.

Post Purchase evaluation

The EKB model was further developed by Rice

(1993) which suggested there should be a feedback loop, Foxall (2005) further

suggests the importance of the post purchase evaluation and that the post

purchase evaluation is a key due to its influences on future purchase patterns.

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Consumer behavior with price changes in market

One of the key analyses under the heading "consumer behavior" refers to the

interaction between price changes and consumer demand. From introductory

economics we know that a reduction in the price of X will result in an overall rise in

the quantity demanded of good X. However, this rise in the quantity demanded is

due to the total price effect, which can be subdivided into two separate parts, the

substitution effect and the income effect.

The substitution effect refers to the extra purchase of good X now that it is, after

the price fall, relatively cheaper than other substitutes in consumption. The income

effect refers to the rise in real income (purchasing power) now that the price of one

commodity is lower within the bundle of commodities purchased by the consumer.

This extra real income can potentially be used to buy more of all commodities,

including X.

Total price effect = substitution effect + income effect

In terms of rules associated with the law of demand, the substitution effect will

always be negative. The income effect can be positive, zero or negative.

Textbooks should provide more detail about the theory behind consumer behaviour.

Unfortunately, to find good data on the Web in this area is incredibly difficult, as

they are highly commercial and therefore expensive. Organizations like Mintel and

Keynote provide marketing reports based on extensive market research into

consumer behaviour across all sectors. Information services or libraries should be

approached to find out how to access this information either online or in hard copy.

One consumer research organization site is noted here.

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B) Review of literature-

Top 20 Indian Cities that accounts for 1/3rd of disposable Income

A study by Roopa Purushothaman and Rajesh Shukla (co-authored Goldman Sachs’ famous BRIC report) has conducted a study (on behalf of Kishore Biyani’s Future Capital Research and National Council of Applied Economic Research’s (NCAER))

The authors have identified 20 key cities (which accounted for ~$100-billion of consumption expenditure in 2007-08) and grouped them into three broad buckets

Megacities:

Largest cities in terms of population/market - Mumbai, Delhi, Kolkata, Chennai, Bangalore, Hyderabad, Ahmadabad and Pune.

Boomtowns: Next set of big population cities with high expenditure per household- Surat, Kanpur, Jaipur, Lucknow, Nagpur, Bhopal and Coimbatore.Niche cities: Smaller in terms of overall population, but still hit well above their weight in spending per household-Faridabad, Amritsar, Ludhiana, Chandigarh and Jalandhar.

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C) Objective of the study-This study is about the influence of

consumer’s disposable income on buying decision, as purchasing behavior of consumer is influenced by many factors & income is one of the physiological factors. Our study shows the buying pattern of different income consumer towards different products.

INCOME LEVEL

Below 10,000 Lower income level

10,000-18,000 Lower Middle

18,000-24,000 Middle

More then 24,000 Higher

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Hypothesis-

Ho1-People of higher income level takes insurance rather than lower income level.

Ho2-People of Middle & higher income level have their own house.

Ho3-People having income more then 10,000 goes outside for vacation.

Ho4-Higher income level goes outside maximum time to watch movie.

Ho5-People of higher income level (24,000) have their own car.

Ho6-Maximum no. of people from lower income level doesn’t purchase cloth from shopping mall.

Ho7-People of every income level goes equally outside for dinner.

Ho8-People of income level less then 10,000 doesn’t spend more then 800 on children’s education.

Ho9-Income level does not have more effect on spending pattern on mobile recharge.

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METHODOLOGY

The study-

This is an exploratory type of research. This undertakes to analyze the influence of consumer’s disposable income on buying decision ”

The design-

The research design will be conclusive in nature and would focus on the accurate description of consumer’s behavior based on their income level.

The sample-

The study is all about different income level of people, so we examined 50 people and divide them in four categories according to their income.

The Tools used-

a) For Data collection-Impact of income on decision-making in buying behavior. This type of behavior is characterized with complex decision-making, where the buyer

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needs a comparatively longer period to make a decision and greater amounts of information gathering.

Primary Data - The present dissertation incorporates a multi-method research process, where the researcher combines secondary and primary data in the same study. Primary data contributes to the researcher's ability to address the most important issues in the present context. The primary data is extracted through the fulfillment of structured questionnaire.

Secondary Data- The secondary data employed can be described as multiple source secondary data. The use of multiple source data provides the researcher with the opportunity to develop a balanced and analytical dissertation. The academic literature is used for outlining the academic context of consumers' buying behavior, whereas the commercial sources are used for identification of the current conditions.

Designing the Questionnaire

A questionnaire is consists of a set of questions presented to respondents. Because of its flexibility the questionnaire is by far the most common instrument used to collect primary data.

While preparing this questionnaire, the form, words and sequence of the questions were chosen very carefully. Care was taken not to influence the response of the respondents by asking them biased questions or showing any sort of biasness towards the results.

The questionnaire prepared is mix of open-ended and close-ended type of questions presented in a sequential form as not to deviate the flow to the information required.

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The open-ended question were asked to know the views of customer regarding the product or services expected from the company or the distributor and the close-ended question asked to collect the basic demographic information along with preferences about the value added services and products which the company intend to provide.

b) For Data Analysis- For data analysis we divided the respondents in to 4 categories according to income. And by % analysis we found the weight of different option of different income level.

DATA ANALYSIS

& DISCUSSION

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Data Analysis

1) What is your household income?

Graph no 1.1

Income level

No of con.

%

Below 10,000 11 22

10,000-18000 18 36

18,000-24000 8 16

More than 24000 13 26

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It is the percentage of different income level of consumer’s which were found by conducting research on the sample of 50,This graphs segments the sample in different level Which will be helpful for analyzing other topics related to consumer’s behavior.

2) Do you have insurance?

Graph no 1.2

This graph shows that more then 60% people from each income level have insurance, people with income level 18,000-24,000 Maximum (100%) of people having insurance.

Income level

Yes (%)

No (%)

Below 10,000 64 36

10,000-18000 67 33

18,000-24000 100 0

More than 24000 85 15

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3) Do you have your own house?

Graph no 1.3

This graphs shows that consumer’s whose income level is between 18000-24000 has the

Income level

Yes (%)

No (%)

Below 10,000 64 36

10,000-18000 61 39

18,000-24000 88 12

More then 24000 69 31

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Highest (88%) of having their home, although the % of income level more then 24000 who has their own house is 69% .

4) Do you like to go outside for vacation?

Graph no 1.4

Income level

Yes (%)

No (%)

Below 10,000 55 45

10,000-18000 67 33

18,000-24000 75 25

More than 24000 62 38

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Maximum % of people from income level ranging from 18,000-24,000 goes outside for vacation and people from other income level more then 55 % people goes outside for vacation.

5) Do you have a car?

Graph no 1.4

Income level Yes (%)

No (%)

Below 10,000 9 91

10,000-18000 17 83

18,000-24000 50 50

More than 24000 69 31

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This graph shows that purchasing of car is directly related with the income of consumer, more the income more the people buy the car.

6) How many times do you go movie in a month?

Never (%) Once (%) Twice (%) Thrice (%) Every week (%)

Below 10,000 45 36 19 0 0

10,000-18,000 28 28 39 0 5

18,000-24,000 0 63 25 12 0

< 24,000 8 46 22 8 16

Graph no 2.1

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This graph shows that maximum (63%) of consumer of income level below 18,000-24,000 goes for movie once in a month. Maximum no. of people go two time movies in a month.

7) From where do you purchase cloths?

Graph no 2.2

This graph shows that only (9%) of consumer of income of below 10,000 go for malls to shop and 73 % goes on shops.

Malls (%) Shops (%) Both (%)

Below 10,000 9 73 18

10,000-18000 39 39 22

18,000-24,000 50 13 37

More then 24,000 54 39 7

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8) How many times do you go outside for dinner in a month?

Never (%) Once (%) Twice (%) Every week (%) Frequently (%)

Below 10,000 45 36 19 0 0

10,000-18000 28 28 39 0 5

18,000-24,000 0 63 25 12 0

< 24,000 8 46 22 8 16

Graph no 2.3

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From that graph it could be implemented that maximum people (81) having income below 10000,Go twice outside for dinner in a month and 63% people of income level 18000-24000 goes once in a month outside for dinner.

9) How much money do you spend on your children’s education in a month?

Nothing (%) <200(%) 200-400(%) 400-800(%) <800(%)

Below 10,000 0 36 15 15 44

10,000-18000 61 0 11 6 22

18,000-24000 25 25 0 25 25

<24,000 46 8 0 0 46

Graph no 2.3

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From the above graph it could be implemented that more people from the income level from 10,000-18,000 does not spend no money on children’s education, and most people append more then 800 Rs. In a month.

10) How much money do you spend on your mobile recharge in month?

Less the 100

100-200 200-400 400-800

Below 10,000

27 38 27 8

10,000-18,000

0 50 44 6

18,000-24,000

0 38 37 25

< 24,000 0 23 23 54

Graph no 2.4

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From above graph it could be implemented that only 27% of consumer of income of below 10000 spend less than 100 Rs. In a month and 54 % of consumer having income more then 24000 spend more then 800 in a month on mobile recharge. Maximum no of people spend 100-200 on mobile recharge in a month.

CONCLUSION

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Conclusion- Consumer behavior is a complex phenomenon, I found that

consumer behave differently for different products following conclusions are as follows-

1)100% people from middle income level (18,000-24,000) takes insurance and 85% people of higher income level takes insurance .(From graph 1.2)

2)60% people from each income level have their own house maximum no. of people from 18,000- 24,000 have their own house.( From graph 1.3)

3) People from each income level go outside for vacation & the no. increases with income.( From graph 1.4)

4) People having income more then 18,000 50% people have car. (From graph 1.5)

5) Maximum people from middle income (18,000-24,000) go movie. Income level more then 18,000 goes lesser. (From graph 1.3)

6) Only 9% people from lower income level (10,000) go mall for shopping. (From graph 2.1)

7) More then 50% people from each income level go outside for dinner, Maximum no. people from middle income (18,000-24,000) in them. . (From graph 2.2)

8) People even from Low income level (Below 10,000) spend more then 800 in a moth on children’s education (.Graph no 2.3)

9) Beside Lower income (Below 10,000) each income level of people spend more then 100 in a month Graph no2.4).

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LIMITATION

Limitations-

Consumer buying behavior is influenced by so many factors so it is difficult to determine the impact of a particular factor like income level of consumer.

Consumer buying behavior‘s also determined by the demographic factors the implications of study could be irrelevant for other demography.

Consumer buying behavior also depends on their past economic situation, which decides the need for a particular product.

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SUGGESTION AND IMPLICATION

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Suggestions and Implications of the study-

Some suggestions are as follows-

More then 60% of people from different income level buy insurance, so insurance company can get the benefit of huge amount of consumers by providing them suitable option of investment.

More then 50% people from each income level go outside for vacation and this % increases with the income. People of income level from 10,000-18,000 are the prospectus consumer for tourism industry.

People whose income is more then 18,000 buy car, automobile can be benefited by them; people of income level below 18,000 could be customers if they get it in cheaper price.

Most the people from income level below 10,000 does ‘nt go for movie which can be targeted audience by lower price of entertainment.

People from income level from 0- 18,000 go more outside for dinner.

People of each income level spends more then Rs.100 on recharge in a month.

People from each income are ready to pay more then 800 monthly for their children’s good education.

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REFERENCES

References-

Websites

www.wikipidia.com

www.internationalbusiness.wikia.com

www.expressindia.com

www.tradechakra.com

www.manage indiabudget.nic.in

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www.mentparadise.com

Books-

Managerial Economics

By D.N. Dwiedi

Business research methodology

By William G.zikmund

Consumer Behavior & market strategy

By J Paul Peter Jerry colson

Consumer behavior

By Leon G.shiffman

APPENDICES

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Appendices-

Questionnaire for conducting survey for “impact of consumer’s disposable income on buying behavior”

This research is being done purely for academic purpose, I promise hereby that the information you are providing me will not be given anybody else for any purpose!

Name-

Occupation-

1) What is your household income?

Below 10,000 10,000-18,000 18,000-24,000 More than 24,000

2) Do you have insurance?

Yes No

3) Do you have your own house?

Yes No

4) Do you like to go outside on vacation?

Yes No

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5) Do you have car?

Yes No

6) How much time do you go for movie in a month?

Once Twice Thrice Four times

7) From where do you like to shop for cloths?

Shopping malls Shops Both

8) Do you like to go outside for dinner?

Never Once Twice Thrice Four times

9) How much money do you spend on your children’s education monthly?

Nothing Less than 200 200-400 400-800 More than 800

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10) How much money do you spend on your mobile recharge in a month?

Less than 100 100-200 200-400 400-800

Thank you very much for giving your precious time and information!

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