family buying behavior in purchasing health insurance ii

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A study on the family’s decision making process while buying health insurance 1

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A study on family buying behavior in Health Insurance

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Page 1: Family Buying Behavior in Purchasing Health Insurance II

A study on the family’s decision making process

while buying health insurance

Abstract

Families constitute an important economic and social unit that affects consumption decisions of individual family members. Of all the reference groups, family has one of the strongest, immediate, and most pervasive effects on consumer's personality, motivation, and attitude. There are some

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general role patterns and interactive processes between family members that are of special interest to marketers.

The entire family’s decision-making process has been studied by marketing researchers for many years. Although the knowledge base has increased substantially on this topic, the empirical research has generally focused on goods. As services continue to dominate the gross domestic product in India and Insurance plays a very dominant role in increasing the GDP, understanding the behavior of the family while buying health insurance becomes critical.

Family decision-making research has frequently examined role relationship between husband and wife across stages and sub-decisions. In this study it is being tried to find out, what role parents and children play other than husband and wife in family decision-making process and how does a family decide on a financial product such as a Health Insurance Product.

Keywords: Family Buying Behavior, Health Insurance, Family Role

Table of Content

Topic Page No.2

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Abstract 2

Introduction to the Subject 4-11

Importance of the Study 12

Objectives 13

Methodologies 14

Limitations 15

Data Interpretation 16-20

Conclusion 21

Graphs and Charts 22-28

Reference 29

INTRODUCTION TO THE SUBJECT

Consumer behavior is "The study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society." It brings up some useful points:

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Behavior occurs either for the individual, or in the context of a group (e.g., friends influence what kinds of clothes a person wears) or an organization (people on the job make decisions as to which products the firm should use).

Consumer behavior involves the use and disposal of products as well as the study of how they are purchased. Product use is often of great interest to the marketer, because this may influence how a product is best positioned or how we can encourage increased consumption. Since many environmental problems result from product disposal (e.g., motor oil being sent into sewage systems to save the recycling fee, or garbage piling up at landfills) this is also an area of interest.

Consumer behavior involves services and ideas as well as tangible products. The impact of consumer behavior on society is also of relevance. For example, aggressive

marketing of high fat foods, or aggressive marketing of easy credit, may have serious repercussions for the national health and economy.

What is a buying behavior?

Prior to segmenting the various aspects of buying behaviors, it pays to know what exactly this decision process includes. In simplest terms, the entrepreneur who understands what makes a customer choose product A over product B also understands:

Factors that contribute to the decision Cultural aspects that influence purchases Gender-specific shopping idiosyncrasies Age-related buying decisions

It is interesting to note that product quality and price do not always determine a customer’s decision to choose product A over product B; as a result, smart marketing and clever advertising can even give a cheaper good a leg up in the market.

A closer look at influences

According to marketing experts at the University of Delaware, there are four distinct influences that shape a consumer’s buying decision behavior:

1. Need detection2. Data collection3. Choice availability4. Product selection

Please note that the actual purchase experience and subsequent satisfaction with the product influence future buying decisions. They determine possible brand loyalty and also company name recognition. The entrepreneur, who is affiliated with a product or company by virtue of an independent sales position, must be cognizant that his success or failure in the business is tied -- directly -- to the post-purchase evaluations the buyer makes.

Family Types

As a consuming unit to consider, the marketer is interested in the variety of living arrangements that exist in the population. There are several types of families and their buying requirements would differ subject to their structural variations.

There is the nuclear family, which is termed as consisting of the husband, wife and their offspring.

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There is the extended family in which the family structure extends beyond the nuclear family and includes other relatives such as the parents of the husband or wife, aunts, uncles, grandparents and in-laws. The traditional household set-up in India consisting of a. joint family is an example of an extended family. The term family is actually a subset of the more general classification of household, where the household comprises all those persons who occupy and share a housing unit. The household thus covers a variety of living arrangements such as roommates living in an apartment, single parent families, and joint family households, all of which are of value to the marketer as consumption units.

FAMILY BUYING INFLUENCES: NATURE AND TYPES OF INFLUENCES

The Reciprocal Nature of Family Influence The family is not just a social group. It is also an earning, consuming, decision making unit, and it is of importance to marketers because of the influence that family members have on purchase and consumption decision. In this section we will consider the various family related factors that have an impact on consumer decision making. The family's influence comes from the fact that the bonds within the family are likely to be much more powerful and intimate than those in other small groups. Because of these bonds, the family has profound social, cultural, psychological and economic influence on consumers. Within the family, operating as the unit of analysis, a reciprocal influence operates on all decisions. There are three main sources of influence in the family decision process. These are the father, the mother and other family members. Since a particular family may have several persons in the other family member’s category, the decision process for a given family can be complex. Every family member brings his or her own motives, evaluations, beliefs and predispositions to the decision process. Every family member becomes part of the environment for the other family members and, influences, and is influenced by them. And the cognitions, behaviour and environments of the several persons become an important consideration for the marketer, as do the interactions of the members among themselves. Not only do we need to analyze the cognitions of these individuals, but also the possible interaction patterns between each of the family members. For the marketer, it is therefore necessary to sort out the extent of influence exerted by the various family members. In the next section you will read about the two main buying influences that operate on the individual within the family, namely consumer socialization and the intergenerational influences

FAMILY DECISION-MAKING

The decisions made by families involve large amounts of money and, it is necessary to understand as much as possible about this consumption unit. In this section we will examine how families make their purchase decision. How many members are involved in each decision? How are they involved? How does this influence work on the outcome? What is the best way to reach them?As in other small groups, there is a well defined role structure in families as well, as you would find if you apply this concept to your own family. Thus, there is the Instrumental role, usually taken by the head of the family for the achievement of specific goals. In addition, there is the expressive role undertaken by the wife and other family members to provide emotional support to the functioning of the family group. In addition to this goal-oriented behavior there is also a set of purchase roles undertaken by family members. FAMILY ROLE STRUCTURE AND BUYING BEHAVIOUR

In order to function as a cohesive unit, purchase roles or tasks are assigned and carried out by one or more family members. When trying to reach families, therefore, marketers need to realize that a set of purchase roles exist and come into play within the family. These roles can be identified and they determine how families make decisions.

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The important buying roles include:

The Instigator (Initiator): This is the person who first suggests the idea of a product or service and initiates the purchase process, to begin with. The Initiator can even be a stranger. For example, you may see someone walking down the street, wearing a new style of sweater or shirt, and decide tilt you would like a similar one. Or, you may go over to a friend's house and notice a new stereo. Your friend (the instigator), turns it on to demonstrate the sound quality. The matter is then discussed at home with your family members (co-decision makers) and you decide whether the brand suits your requirements. The Influencer: This is someone whose opinion is valued in the decision making process. An influencer may b e a friend, brother, sister, spouse, doctor or other influential person. All these persons have a direct or indirect influence on the final purchase decision.

The Decider: This is the person who makes the final decision on what brand or make to buy, after all aspects such as price, quality, servicing, have been thought over. The Purchaser (Buyer): This is the individual who actually purchases the product, pays for it, takes it home or arranges for delivery. Very often, the purchaser and the decider are the same person, particularly for big value items.

The Consumer: He is the user of the goods or service. Although these five buying roles are performed whenever a purchase is made, the individual performing each role may vary from purchase to purchase, and from family to family. The number and identity of the family members who fill these roles thus varies. In any given situation, the same member may take on several or all roles. Thus, in some cases, a single family member may independently assume a number of roles, in which case, it is really an individual decision within a family context. In other cases, a single role will be performed jointly by two or more family members.

Multiple roles, too, may be performed by one of the family members. For example, in the purchase of household cleaning products, a single person may perform all buying roles. In contrast, in purchasing cornflakes, the mother may act as the decider and buyer, her children as influencers and users and her husband as the evaluator. Thus, different persons may perform different tasks in the purchase process. In all cases, family roles are usually appointed in a way that ensures that they will be handled efficiently. Again, for example, the person who purchases a loaf of bread may not be the same one who prepares the toast or eats it. In fact, the purchaser may have been quite indifferent to the various brands or makes and purchased it only because one or more family members expressed preference.

Family Decision Stages

Just as there are different purchase roles, there are also a number of different steps in the decision to buy a product or service. And the amount of influence exerted by the husband, wife and children will vary, depending on the stage of the decision process. If you refer back to Figure 1 for what goes on inside the consumer's mind, you will find that the simplest of these is the five-stage decision-making model which includes:

1. Problem recognition 2. Search for information 3. Evaluation of alternatives 4. Final decision 5. Purchase

The role of husband, wife and children will differ across the stages. There can thus be shifts in the husband-wife decision-making from stage one of problem recognition, to stage two of search for

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information and finally, to the decision. Marketers should therefore examine husband-wife decision-making in terms of specific purchase factors.

THE DYNAMICS OF FAMILY 'DECISION-MAKING: PURCHASE INFLUENCES AND ROLE SPECIALISATION

The assignment of roles to specific members of the family has an impact on the overall buying behaviour. There is a sensitive interplay of roles and the different roles are reflected in the relative influence of husband and wife. The extent and nature of husband-wife influence is an interesting factor to consider in family decisions, because it is likely to shift, depending on the specific stage of the decision-making process and the specific product features under consideration. When a single person decides to eat out, the decision is based on only his or her own needs. But when that person gets married, the situation changes. A household forms and its members are confronted with various decisions that reflect the needs of the family unit. Who will pay the bills? Who will do the grocery shopping: Who will wash the clothes? Who will cook the dinner?

It has consistently been found that, most husband-wife influence studies classify consumer decisions as husband-dominated, wife-dominated, joint or syncratic and, autonomic or unilateral. This gives us four main decision type categories, namely:

Wife-dominant decisions: Wives have been found to dominate decisions on food purchase, groceries, household furniture and appliances. Husband-dominant decisions: Husbands have been found to dominate the decisions on purchases such as automobiles and life insurance. Syncratic decisions (Joint decisions): These are decisions in which husbands and wives share influence. Vacations, choice of schools for children, for example, are jointly decided. Autonomic decisions (Unilateral decisions): Decisions of lesser importance that either the husband or wife make independently. In a joint decision, several persons will be involved in performing a particular role in deciding what to buy (or not buy). Shared consumption and joint decision-making are characteristic of family living. As children grow older, their opinions about products also become important.

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An interesting aspect of the role specialization in the purchase decision process is that, in several families, particularly in traditional households, the husband takes on the roles that are external to the home such as arranging finances, buying the product and so on. The wife performs tasks internal to the home, as in grocery shopping, decorating and cleaning. However, as women become more active, these distinctions decrease, even though they continue to hold for the majority of the Indian households.Different family members assume the leadership role under different situations. Particularly for low cost items, decisions tend to be autonomic and each partner tends to take responsibility for particular types of purchases. More expensive items involve more joint decision-making. And compromises often have to be made on how a family's limited resources will be spent, since family members value different items differently. All families face the problem of determining who gets what he or she wants, even when resisted by others. When family members disagree about the goals, then decisions become more difficult to make. Decisions may thus be either consensual or accommodative. In the case of consensual decisions, everyone in the family may agree with the desired outcome. However, accommodative decisions become necessary in other cases, and conflict resolution may then need to be accomplished.There are two ways that families generally use to resolve conflict. One is persuasion, where a family member is persuaded to make a decision. When persuasion is not used then bargaining is often resorted to. Bargaining involves creating conditions of give and take in which a family member is induced to make a decision that is favorable to other family members. The element of power within the family is obtained from a variety of sources such as the following: 1) Economic resources: Here, the person making the greater economic contribution tends to have the most power. 2) Cultural norms: The prevailing culture may decide which partner has the most power. In many cultures the male is the dominant partner and decisions for several product purchases may be husband-dominant. 3) Expert power: One partner has more knowledge and more detailed information concerning the products purchase under consideration. 4) Legitimate power: This is the influence that results naturally from role expectations in the family. 5) Bargaining power: This involves inducing one member to make a decision favorable to another on the basis of give and take. 6) Reward/referent power: One spouse may reward the other by doing something the other will like. 7) Emotional power: The direction of the purchase decision may be influenced by one partner by making use of non-verbal emotional pressure on the other.

The Influence of Children Another influence operating on family purchase behavior is the influence of children on the budget allocation and purchases and consumption. The birth of a child creates a demand for a wide variety of products a couple never needed or considered purchasing previously. In addition, children influence the purchase of many products both directly and indirectly. Thus in a child-centered culture such as exists in Indian society, children tend to dramatically affect family expenditures. When children are part of a family, their influence may or may not be felt. However, it is found that the child centeredness of mothers may increase their receptivity to the child. As soon as children develop the basic skills to communicate they start attempting to influence the family decisions. Older children participate more directly in the decision processes. While children generally have no say in how much to spend (which essentially remains a parental prerogative) they influence virtually all major dimensions of the decision-making exercise. They may take up buying roles of initiators and influencers in case of products the use of which they share with others in the family. Examples could be the choice of breakfast cereal, brand of toothpaste and other toiletries. As they grow older, they may take a far greater degree of leadership for particular purchases, for example choice of amusement, and restaurants, and sometimes even vacations. In products which are for their exclusive use, the influence is obviously much greater. The role of children, however, varies across product categories and even across family environments. As families differ in their internal culture, the discretion that is allowed to children may differ across families and would affect the degree of influence children can exert on purchase decision. In addition, children are also influenced by their

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families through the socialization process. In the context of consumer behaviour the parent-child relationship can be seen as an influence versus yield situation. Children, acting as initiators or influencers seek to influence parents make a particular product/brand decision (to yield). The response of the parent may be modified by enabling condition, or a differing order of expenditure priorities. It has been found that attempts on the part of children to influence purchase decisions of parents tend to decline as they grow up.

The Family Life Cycle ConceptJust as individuals and product types go through a life cycle, families also have life cycles. Most people go through several phases in their lives. The term family life cycle refers to the series of life stages through which individuals proceed over time. It describes, in other words, the process of family formation and dissolution. Thus, a family may begin as a married couple and move through a series of stages in which young children are born, grow older and move out and, finally, the couple grows old. Each life cycle stage differs from the previous stages in terms of family structure, financial position, consumption patterns, and product needs and preferences. The family Life Cycle Stages The life cycle of families has been conceptualized as a progression involving several stages:

The Bachelor Stage (Young and single) In the bachelor stage of the life cycle, income is low relative to future earnings, since most bachelors are just beginning their careers. However, there are few financial burdens. They therefore have relatively high discretionary incomes. They tend to spend substantial amounts on personal consumption items, food, clothing, transportation, certain luxury goods entertainment, vacations, and possibly even a car. A few basic furniture items may be acquired, as well as some kitchen equipment. However these purchases tend to be on a non-systematic basis and also minimal, because possessions restrict their freedom of movement. This market segment also offers marketers opportunities in terms of single serving packaging for a wide variety of foods. Overall, there is more individuality in purchasing at this stage.

The Newly Married Couples (Young, no children) With marriage, the requirements and resources change. Household requirements increase. In addition, in some cases, both partners may be working. This stage therefore represents a high expenditure period. Purchases include durable goods such as refrigerators and other appliances, inexpensive durable furniture, home entertainment items such as TV sets. These items often take priority over other purchases.

Full Nest 1 (Young, married, with child) The arrival of a child creates major changes. Some wives may stop working and they suffer a reduction in income. The financial resources thus change significantly. Child rearing and educational responsibilities increase. Money is now directed to baby furniture, toys, chest rubs, vitamins, baby foods and baby medicines. While more shopping is done, the family also faces more medical bills. This is also the period that they become dissatisfied with their income and with their inability to accumulate earnings.

Full Nest 2 (Older, married, with children) The family's financial position starts to improve because of career progress and also because many wives return to work. They present an active market for a wide variety of food products, bicycles, music lessons, magazines and also educational services as children are growing up.

Full Nest 3 (Older, married, with dependent children) Income is high for the family at this stage. However, they now represent experienced buyers and tend to be less interested in new product purchases. Expenditures continue to be high due to replacement buying in the later phases of the stage.

Empty Nest (Older, married, with no children living with them)

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With no children living at home, the financial position stabilizes.Savings accumulate. There may be resurgence in self-education. Hobbies also become an important source of satisfaction. More is spent on luxury appliances, magazines. and health products. Major expenditures are on home ownership, home improvements and also on medical care.

Solitary Survivor (Older, single, retired people) Simple, often more economical lifestyle. A lower income due to retirement may be a restrictive factor. Health care and other services become important. The stages at which families find themselves thus affect the nature of the goods and services required their wants and consumption patterns, as well as the volume of consumption on specific products. At each stage there are unique needs, different patterns of object accumulation, and different demands that are placed on the family. It would seem, therefore, that the family life cycle is a better predictor of consumption patterns than age. For example, it is well known that major furniture items are bought at or shortly after marriage, regardless of age. Conversely, furniture purchases tend to be put off in favor of baby furniture and medical expenses at the time and stage required. The family life cycle stages are therefore used along with age in analyzing and segmenting markets. Since it combines incomes, marital status, social perceptions, and family needs into one measure, richer picture of family is obtained than is possible on any single variable. Family life cycle analysis thus permits marketers to segment families into subgroups that are relatively homogeneous in terms of age, interests, needs and disposable income. Segmentation by stage in the family life cycle also permits marketers to develop products and services to meet the specific needs of families at each stage, and to design promotional strategies for their specific target audiences. You will find in Table 1 the differences in the consumption patterns and characteristics of families in the various family life cycle stages. As you can see, the presence or absence of children to a large extent dictates the family’s activities and much of a family's disposable income gets spent in fulfilling children's needs. The traditional view of the family life cycle has, however, been criticized for failing to recognize that a single family unit may not exist throughout the life of an individual. Families may be created by second marriages, and these families may involve children from prior marriages. Also, the traditional model ignores the existence of single parent households. The modern family life cycle, which takes into accounts, the existence of working women, is a more complex and more useful model than the traditional model. The modern family life cycle accounts for women in the work force and dual income families. The pace of life is faster and there is less time for children and for one another. As a result the two income households are more likely to spend more on time saving and convenience goods. Women also appear to retain the primary responsibility for housekeeping though husbands appear to help more than in the past. Convenience products ranging from paper plates automatic appliances and other convenience foods appeal to the working women segment. There is also more sharing of responsibilities than in single income households. In conclusion, while the family life cycle concept segments families on the basis of demographic variables, it still has the disadvantage that it ignores the psychological variables. It is therefore used to supplement the concept of lifestyle which emphasizes behavioral dispositions and attitudes. it is a good idea to remember, moreover, that while the family life cycle is an important factor in controlling consumption patterns, there are other variables such as available income, education, occupation, whose effects govern spending on such items as food, clothing, housing and even cars, and which control how consumers spend their. money. Family life cycle is also related to the use of leisure time, family expenditure patterns for services and other consumer activities

Emerging health insurance market

Health insurance in a narrow sense would be ‘an individual or group purchasing health care coverage in advance by paying a fee called premium.’ In its broader sense, it would be any arrangement that helps to defer, delay, reduce or altogether avoid payment for health care incurred by individuals and

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households. Given the appropriateness of this definition in the Indian context, this is the definition, we would adopt. The health insurance market in India is very limited covering about 10% of the total population. The existing schemes can be categorized as: (1) Voluntary health insurance schemes or private-for-profit schemes; (2) Employer-based schemes; (3) Insurance offered by NGOs / community based health insurance, and (4) Mandatory health insurance schemes or government run schemes (namely ESIS, CGHS).

In recent years, there has been a liberalization of the Indian healthcare sector to allow for a much-needed private insurance market to emerge. Due to liberalization and a growing middle class with increased spending power, there has been an increase in the number of insurance policies issued in the country. In 2001-02, 7.5 million policies were sold. By 2003-04, the number of policies issued had increased by 37%, to 10.3 million.Still, it is quite disheartening to find that Insurance is limited to only a small proportion of people in the organized sector covering less than 10% of the total population. Currently, there no mechanism or infrastructure for collecting mandatory premium among the large informal sector. Even in terms of the existing schemes, there is insufficient and inadequate information about the various schemes. Data gaps also prevail. Much of the focus of the existing schemes is on hospital expenses. There continues to be lack of awareness among people about health insurance. Hence, this study was made to find out how a family as a buying unit behaves while purchasing a Health Insurance product.

Importance of the study:

Families are more complex to understand as compared to individual consumers for specific roles played by family members undergo dynamic and continuous changes because of psychographic and attitudinal metamorphosis. Some families remain essentially traditional in their life styles following the traditional role patterns and relationships, while others adopt more materialistic orientations;

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wherein the individual family member becomes of prime importance because of his individuality. In such families, the choice of each individual needs to be considered independently and every individual priority owes due consideration before the final decision outcome. Still, some other families are left in between-trying to adopt the modern life style and at the same time confining to the traditional norms and values. The roles and relationships in such families follow an entirely different pattern. These shifts are also being increasingly caused by participation of women in the labor force. The dual-career families, within a social stratum, have relatively greater discretionary income to buy products that are otherwise sometimes out of reach, for single-earner families. Not only are the buying structures different, but also the persons involved in the purchase and use of these products differ due to various factors playing in the family, one of which is the time pressure experienced by women in such families.

Such a study is important for the marketers, as in the current business scenario, the choice of which health insurance to purchase has become crucial in the Indian economy, especially since today it is a service driven one.

Objectives of the study:

The objective of this study dwells on the following points:

To understand the family’s decision making process.

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To identify the factors those contribute to the family’s decision making process while

buying health insurance.

To attempt to provide a framework of buying behavior among Indian families while

purchasing health insurance.

Methodologies:

The following methodologies were adopted for this study:

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Type and Design of the Study:

Although attempts were taken to explore family’s decision-making process of buying

health insurance, however this study was a bit descriptive research and hence was

tested with certain hypotheses.

Scope:

The scope is limited to Eastern India.

Sample Criteria:

The scope of this research encompasses the family’s decision-making process while buying health insurance in India. However the sample included the families of metros and Tier-II cities. The sample was drawn from non probabilistic sampling techniques. Due to scarcity of resources equal representation in each of the resources category could not be reached. A total of 35 sample families have been collected.

Sample Selection:

The sample is restricted to Indian families residing in metros and Tier-II cities.

Data Collection:

Data were collected from both primary and secondary sources. The secondary source includes internet, brochures, pamphlets, published and unpublished reports etc, where as the primary sources include, interactions, structured and unstructured interviews, administration of questionnaire, directive brain storming etc.

Analysis:

The quantitative and qualitative analysis has been done to find out the implications as set in the objectives.

Sample Size: 35

QUESTIONNAIRE DESCRIPTIONThe interviewees to whom the questionnaire was administered were assured of anonymity. The survey was conducted online with the help of googledocs. The questionnaire was mostly of close ended type except for one question which required short open ended answers.

Limitations:

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Owing to the limitations of the availability of resources such as time, funds and access, the following limitations could not be avoided. These limitations are necessary to be kept in mind, while interpreting the results obtained in the research and the analysis.

1. The index to an extent can be said was based on my perceptions and as such, may not be verifiable.

2. It was be possible to conduct tests to verify the external and internal validity of the scale, owing to the limitations of the resources.

3. The sampling methodology used is entirely non probabilistic in nature, and purely based on convenience, due to constraints of time and accessibility.

Data Interpretation

Out of the 35 respondents, 10 belonged to the age group of 26-30 and 8 belonged to the age group of 31-35. The least no of respondents i.e. 1 was from the age group 50-60. The age group 26-30 and 31-35 seems to be more sensitive towards purchasing Health Insurance. If we go by theory, the first stage

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is primarily the bachelor and new married stage without children. Out of the 10 respondents belonging to the age group of 26-30, 6 are bachelors and 4 are married with no children.It is interesting to note that all the people belonging to these two groups already have a Health Insurance, barring 2(one from each of these two groups). However, one in the age group of 26-30 who is married and has a family holds a Health Insurance policy from his employer. Hence, he has not answered the buying process questions. The gender distribution is as follows. 4 of the respondents are women and 31 are men. Out of the 3 female respondents, 1 is single and the rest of the three are married. Rest all have a Health Insurance, belonging to all other groups.

Features Frequency Percentage Cumulative %       Age Group      18-25 3 9% 9%26-30 10 29% 37%31-35 8 23% 60%36-40 3 9% 69%41-50 6 17% 86%50-60 1 3% 89%>60 4 11% 100%Employment Self      Private Sector Job 23 66% 66%Public Sector Job 3 9% 74%Others 5 14% 89%Own Business 3 9% 97%

Government Job 1 3% 100%

GenderMale 31 89%

Female 4 11%

       

Educational Qualification Self      

10th 0 0% 0%

12th 1 3% 3%Graduation 11 31% 34%Post graduation 18 51% 86%Professional 5 14% 100%       Educational Qualification Spouse      10th 1 5% 5%12th 3 16% 21%Graduation 7 37% 58%Post graduation 7 37% 95%Professional 1 5% 100%       

Educational Qualification Father      10th 0 0% 0%12th 5 19% 19%Graduation 19 70% 89%Post graduation 2 7% 96%Professional 1 4% 100%       

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Educational Qualification Mother      10th 6 22% 22%12th 10 37% 59%Graduation 9 33% 93%Post graduation 2 7% 100%Professional 0 0% 100%       Educational Qualification Child1      10th 1 13% 13%12th 2 25% 38%Graduation 2 25% 63%Post graduation 2 25% 88%Professional 1 13% 100%       Educational Qualification Child2      10th 3 50% 50%12th 0 0% 50%Graduation 2 33% 83%Post graduation 1 17% 100%Professional 0 0% 100%       Working Members in your Family      You 31 48% 48%Spouse 12 18% 66%Father 12 18% 85%Mother 5 8% 92%Child1 4 6% 98%Child2 1 2% 100%       Family Income      1L-2L 2 6% 6%2L-3L 4 11% 17%3L-4L 4 11% 29%4L-5L 7 20% 49%>5L 18 51% 100%

Who took the Initiative to buy Health Insurance

     You 20 57%Spouse 3 9%Father 4 11%Mother 2 6%Child1 3 9%Child2 0 0%

In 57% of the cases, the respondent himself took the initiative to purchase HI. Spouse influence was only 9%. Out of these 20 respondents who are the initiators themselves, 1 is a female. Fathers’ influence was found to be more. I.e.11%. Out of the 20 respondents who themselves took the initiative to buy HI, 11 were married. And even after that the spouse initiative is so less. Out of these 11 married respondents, 6 of the respondents’ wives are working ladies. If we go buy the recent research on spouse influence, it can be said that working wives’ influence in initializing a buying decision is reducing.In all the 4 cases, where the Father played the initiator’s role, the respondent is single. So, it can be said that a small percentage of single bachelors are still not the initiators as far as buying HI is

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concerned. 3 respondents said that their children took the initiative. When we look at the demography of these 3 respondents, we find that all 3 are above the age of 60. Hence, it is evident that people beyond 50 and dependant on their children are not the initiators.

Who in your family did the information search regarding Health Insurance?

     You 20 57%Spouse 3 9%Father 5 14%Mother 0 0%Child1 3 9%Child2 0 0%

Information sourcing, an important stage in buying process, too shows a similar kind of nature. Spouse influence is same. However, Father’s role as an information seeker seems to be evolving. Again the 3 children information seekers are the children of the dependant parents.

After seeking for information who evaluated the alternatives?

     You 16 46%Spouse 3 9%Father 9 26%Mother 1 3%Child1 2 6%Child2 0 0%

It is interesting to note that Father’s role has enhanced when evaluation of alternatives came into picture. This shows that Indian children prefer to involve Father’s as evaluators in the family decision making process of HI. Since HI is a financial product, may be that’s the reason why parent’s role becomes important.

Who took the final decision in buying the Health Insurance plan?

You 16 46%Spouse 5 14%Father 7 20%Mother 1 3%Child1 2 6%Child2 0 0%

Here comes an interesting point to note. The married respondents depend on their wives to make the final decision. % respondents have shown that they are dependent on their wives to make the final decision.

Who finally bought the Health Insurance Policy?

You 20 57%Spouse 2 6%

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Father 6 17%Mother 0 0%Child1 3 9%Child2 0 0%

The final purchaser in 57% of the cases is the respondent himself. Out of which 1 is a female. 6 of the cases show Father as a purchaser. In all these 6 cases, the Father is also into some sort of employment.

From Where did you (or whoever did information search) seek for the information?

     Friends and Peers 17 55%Internet 15 48%Company Website 14 45%Company Representative 8 26%Social Networking Websites 0 0%

Friends and peers seem to be the best source of information. It shows that Indian customers still rely on traditional means of information seeking. However, Internet scores and company websites are the second options. The less reliance on company representatives for information seeking shows that customers do not trust what they say. Or their information is not that important or relevant. Reason could be that they would never speak anything negative about their company product.

What factors do you consider before purchasing a Health Insurance Policy?

Premium 12 39%Product Features 25 81%Company Brand and Image 7 23%Service 21 68%Network Hospitals 8 26%OPD benefits 7 23%

If we look at the factors which are important for a customer before deciding on a HI purchase, Product features are the most important factor, followed by service.

Which factor influenced you to buy Health Insurance?

A touching Advertisement 1 3%A family member's death/disability/health problem 17 49%A friend's or peer's death/disability/health problem 8 23%Doctor's Recommendation 2 6%Forceful selling by Sales person 1 3%

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Page 20: Family Buying Behavior in Purchasing Health Insurance II

It is interesting to note that the factor that influenced them to buy a Health Insurance product is some mishap in their family. It was death, disability or health problem. Another factor is mishap in their friends’ or peers’ family. Thus it is evident that HI is felt to be important only after there is some sort of mishappenings faced or seen by the respondents. It shows that people are still reactive and not proactive as far as buying HI is concerned.

The study wanted to find out how much time a family takes in buying a HI. Almost 75% respondents said that they purchased health insurance within a month. This shows that Health Insurance buying involves a lot of information searching yet the decision is taken quite early.

As far the family’s decision making model is concerned, nothing extra from the other researches came up. However, based on the respondents comment, this particular model is prepared:

Family Member’s/peers’ Friends Death Disability

Friends/Peers/FriendsCompany WebsitesInternet

Product FeaturesService

Conclusion

The study on the family buying behavior in Health Insurance shows that Family does play a very important role in deciding on a HI purchase. Husbands initiate the decision and fathers paly an important role in information search and evaluation of alternatives. The wives play an important role in finalization of the Health Insurance policy.

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Need Analysis

Evaluation of Alternatives

Information Search

Purchase

Page 21: Family Buying Behavior in Purchasing Health Insurance II

Kindly mention your age

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Page 22: Family Buying Behavior in Purchasing Health Insurance II

18-25 3 9%

26-30 10 29%

31-35 8 23%

36-40 3 9%

41-50 6 17%

50-60 1 3%

>60 4 11%

Marital StatusMarried 19 54%

Single 14 40%

Widow/Widower 1 3%

Divorcee 1 3%

Type of Your EmploymentGovernment Job 1 3%

Public Sector Job 3 9%

Private Sector Job 23 66%

Own business 3 9%

Others 5 14%

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Page 23: Family Buying Behavior in Purchasing Health Insurance II

Qualification of you and your family Members - You10th 0 0%

12th 1 3%

Graduation 11 31%

Post graduation 18 51%

Professional 5 14%

Qualification of you and your family Members - Spouse10th 1 3%

12th 3 9%

Graduation 7 20%

Post graduation 7 20%

Professional 1 3%

Qualification of you and your family Members - Father10th 0 0%

12th 5 14%

Graduation 19 54%

Post graduation 2 6%

Professional 1 3%

Qualification of you and your family Members - Mother10th 6 17%

12th 10 29%

Graduation 9 26%

Post graduation 2 6%

Professional 0 0%

Qualification of you and your family Members - Child1

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Page 24: Family Buying Behavior in Purchasing Health Insurance II

10th 1 3%

12th 2 6%

Graduation 2 6%

Post graduation 2 6%

Professional 1 3%

Qualification of you and your family Members - Child210th 3 9%

12th 0 0%

Graduation 2 6%

Post graduation 1 3%

Professional 0 0%

Working Members in your FamilyYou 31 89%

Spouse 12 34%

Father 12 34%

Mother 5 14%

Child1 4 11%

Child2 1 3%

People may select more than one checkbox, so percentages may add up to more than 100%.

Please Mention Your Total (Gross) Annual Household Income1L-2L 2 6%

2L-3L 4 11%

3L-4L 4 11%

4L-5L 7 20%

>5L 18 51%

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Page 25: Family Buying Behavior in Purchasing Health Insurance II

Do You Presently Have any Health Insurance Policy For Any of Your Family Member?

Yes 31 89%

No 4 11%

Who took the initiative whether to purchase Health Insurance or not?You 20 57%

Spouse 3 9%

Father 4 11%

Mother 2 6%

Child1 3 9%

Child2 0 0%

Who in your family did the information search regarding Health Insurance?You 20 57%

Spouse 3 9%

Father 5 14%

Mother 0 0%

Child1 3 9%

Child2 0 0%

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Page 26: Family Buying Behavior in Purchasing Health Insurance II

From Where did you (or whoever did information search) seek for the information?Friends and Peers 1

755%

Internet 15

48%

Company Website 14

45%

Company Representative 8 26%

Social Networking Websites 0 0%

People may select more than one checkbox, so percentages may add up to more than 100%.

After seeking for information who evaluated the alternatives?You 16 46%

Spouse 3 9%

Father 9 26%

Mother 1 3%

Child1 2 6%

Child2 0 0%

Who took the final decision in buying the Health Insurance planYou 16 46%

Spouse 5 14%

Father 7 20%

Mother 1 3%

Child1 2 6%

Child2 0 0%

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Page 27: Family Buying Behavior in Purchasing Health Insurance II

What factors do you consider before purchasing a Health Insurance Policy?Premium 1

239%

Product Features 25

81%

Company Brand and Image 7 23%

Service 21

68%

Network Hospitals 8 26%

OPD benefits 7 23%

People may select more than one checkbox, so percentages may add up to more than 100%.

Did your spouse readily agree with you while you decided to buy Health Insurance?

Yes 17 49%

No 1 3%

Which factor influenced you to buy Health Insurance

A touching Advertisement 1 3%

A family member's death/disability/health problem 17

49%

A friend's or peer's death/disability/health problem 8 23%

Doctor's Recommendation 2 6%

Forceful selling by Sales person 1 3%

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Page 28: Family Buying Behavior in Purchasing Health Insurance II

Who finally bought the Health Insurance Policy?You 20 57%

Spouse 2 6%

Father 6 17%

Mother 0 0%

Child1 3 9%

Child2 0 0%

How much time did you take to buy Health Insurance?> 6 Months 1 3%

3-6 Months 0 0%

2 Months 2 6%

Within a month 26 74%

Instantly 2 6%

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References

Bismarck J. Manes Jr., M.A. (2006). A Market Analysis of Consumer Behavior For Companies in A Self-Insurance Group [Electronic Version]. Western Michigan University. Master Thesis.

Blackwell, R. D., Miniard, P. W., & Engel, J.F. (2002). Consumer Behavior. Ninth Edition. (Russian Translation). PITER.

Ekström, K.M. (2003). Revisiting the Family Tree: Historical and Future Consumer Behavior Research. [Electronic Version]. Academy of Marketing Science ReviewVolume 2003 – N: 1

Kacen, J.J., Lee, J.A. (2002). The Influence of Culture on Consumer Impulsive Buying Behavior [Electronic Version]. Journal Of Consumer Psychology, 12(2), 163–176.

Kaur, P., Singh, R. (2006). Children In Family Purchase Decision Making In India And The West: A Review [Electronic Version]. Academy of Marketing Science ReviewVolume 2006 – No: 8

Solomon, M., Bamossy, G., Askegaard, S., & Hogg, M. K. (2006). Consumer Behavior A European Perspective. Third Edition. Prentice Hall.

http://surveysystem.com/sscalc.htmhttp://www.president.kg/docs/const_2006rv/http://www.deik.org.trhttp://memory.loc.gov/frd/cs/profiles/Kyrgyzstan.pdfhttp://www.freenet.bishkek.su

University of Delaware, http://www.udel.edu/alex/chapt6.htmlMBA Lectures, http://mba-lectures.com/marketing/principles-of-marketing/650/types-of-buying-decision-behavior.htmlImage: “Neuromarketing” by Balougador/Wikimedia Commons via CC-BY-SA-2.5-CA + GFDL

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