Consumer Behavior Individual_Online digital books

Consumer behaviour

1. Consumer Behaviour Assignment - 2 Online / Digital Books (Kindle, Etc) Prepared by: Group - 2 Prashant Sharma (CGT19021) Ankul Anand (CGT19007) Piyush Arora (CGT19016) Pawan Kumar Mishra (CGT19015)

2. Evolution of Consumer Behaviour Theory Our Understanding of Consumer Behaviour has come a long way from treating Customers as perfectly Rationale to admitting the it depends on both customer’s Experience and Environment One such world changing phenomenon as coined by Nicholas Taleb is Black Swan Events . COVID-19 outbreak is one such event and this presentation attempts to gauge its effect on Consumer Behaviour

3. Consumer Behaviour : Building blocks Consumer behaviour is the psychological and behavioral processes involved when individuals or groups search , select , purchase , use , evaluate or dispose of products , services , ideas or experiences to satisfy their expected needs and desires Marketers prime objective is to understand the multistage decision making process of consumers and trigger stimuli to motivating consumers to buy there products and services Various sources influence / support consumer during the purchase process

4. Black Swan event & Changed Consumer Behaviour in current context of COVID-19 Across Categories

5. Understanding Black Swan Events Characteristics of a Black Swan Event Extremely Rare Event Hugh Impact Explainable in retrospect Examples of Black Swan Events Black Swan changes the World to New One COVID-19 worldwide breakout is one such Black swan events and it will change the way Consumers behave. We will start with studying the general understanding of changed behaviour at times of Black Swan events and then would analyse the effect of latest COVID-19 event.

6. Impact of Black Swan Events on Consumer Behaviour – A Framework In the event of negative Black Swan, consumer reacts in destructive, random and unanticipated manner Black Swan events forced consumer into extraordinary learning experience . But the good news is Marketers can gain out of Black Swan if they interfere at the right time Two perspectives about consumer learning : The following framework assesses the impact of Black Swan Events in 3 different kinds of Consumer Behaviour :

7. Impact of Black Swan Events on Consumer Behaviour – A Framework By studying and examining different “Black Swan” events this study found that the first information, guidance, and instruction provider is the one who obtains more followers (especially in social media) and credibility, in other words the first initiator obtains the largest bulk of followers (potential customers), however, what matters here is choosing the right moment to intervene using proper types of inputs Unexpected Opportunity Intervene at Right Time Intervene at Wrong Time Purchase Decision Existing Purchase Decision Influenced Purchase Decision Unexpected Purchase Decision Sr No Input Output Unexpected Opportunity Intervene at Right Time Intervene at Wrong Time Existing Purchase Decision Influenced Purchase Decision Unexpected Purchase Decision 1 1 2 1 1 1 3 1 1 1 4 1 1 1 1

8. Impact of Black Swan Events on Consumer Behaviour – A Framework Conclusion – People needs information and guidance during Black Swan events and this is the key element that organizations can benefit from it if they interfere at right time Sr No Input Output 1 There is no Black Swan event and no intervention from marketers. Existing Purchase Behaviour will prevail 2 Black Swan event arrives but marketers were not ready so they sit back and wait. Some of the customers will continue with existing Purchase decision but others will show new and unexpected consumer behaviour 3 Marketers are ready to interfere at the right time to influence the customer behaviour toward their interest. The Output would be directing purchase decision and creating a new consumer behaviour that serve their best interest 4 Decision of interference taken too late. Same result as no intervention except the possibility of losing more market share if other firms had taken steps proactively

9. COVID-19 and its Impact in different Industries Potential Winning & Losing Industries in short term

10. COVID-19 and its Impact in different Industries New York Times quotes “ Not since the attacks of Sept. 11, 2001, has a crisis enveloped so much of the economy so quickly ” Healthcare Industry 100% spike in medicine order & 200% in mask & sanitizer I general Caps on the number of masks and sanitizers one can order by pharma retailers Raw materials crisis as pharmaceutical industry sources them from China India has restricted export of about 26 APIs and formulations including antibiotics, vitamins, and hormones to ensure availability Behaviour Observed Triggering factors Short term Virtual consultation with doctors will increase Majority of users who hadn’t tried virtual healthcare earlier would rely on such means even in future AI-powered remote monitoring tools will flourish Relaxation on import of ventilators and medicines too are expected from the government’s side Long term Telecoms ZTE and China Telecom designed a 5G-powered system that enables remote consultations and diagnoses of the virus Discussions have also begun on commencing manufacturing of imported APIs within the country as well as exploring options to source them from new markets. Change in Consumer Behaviour Intervention at Right time

11. COVID-19 and its Impact in different Industries Retail Industry Brands like Nike, Lululemon,  Apple,  Lush, Urban Outfitters, Under Armour and Patagonia have recently announced the temporary closure of their stores Food Retail experiencing boom due to panic buying Crisis has changed what an average grocery basket looks like. Behaviour Observed Triggering factors Short term Cashless payment adoption and usage could tick up worldwide Ecommerce is likely to grow as consumers eschew physical stores and crowded gathering places Delivery services across the board might see an onslaught of new customers In medium term, payments companies are anticipating an overall downturn in business as consumer spending falls Long term Smarter store layout to reduce congestion and enable contactless cash transactions Smart Technology to win customer’s faith and facilitate remote working of employees Opt for digital payments and shift to online channel to make the process contactless Change in Consumer Behaviour Intervention at Right time “While our physical doors are closed, our virtual doors are still open”, UnderArmour

12. COVID-19 and its Impact in different Industries Manufacturing Industry Fiat Chrysler and Hyundai temporary halting production in Serbia & Korea due to shortage of supply from China Consumer’s spending has moved toward essential and medical buying Most of government projects have been halted which reduced demand Automobile firms like Mahindra designed prototype of ventilators Tata Group and other big manufacturers have contributed in PM fund Behaviour Observed Triggering factors Short term Consumers would drift towards those corporate groups which they felt helped the society during crisis Customers may prefer those companies which has multi-sourcing partners so that they don’t suffer for parts and repairs during future crisis Sense of nationalistic feelings would dominate purchase behaviour Long term High time for companies to consider sourcing from multiple regions Consider automation in the earlier stages of the supply chain to combat labor intensive processes Apply robust digital-twin and scenario-based modeling to proactively assess various disruption scenarios Change in Consumer Behaviour Intervention at Right time “ Consumer trust more important than short-term sales” Madison’s Vikram Sakhuja

13. COVID-19 and its Impact in different Industries Banking Industry Since social distancing is preached, online banking is taking speed Non-tech savvy customers too are forced to use digital platform Savings Account interest rate and MCLR rate got cut to liquidate the economy. Consumers may develop the habit to keep more emergency cash with time Behaviour Observed Triggering factors Short term Customers will now shift to online channels when it comes to banking as well Consumer may increase the cash in hand in anticipation of similar crisis and lockdowns Since non-customers will use online platforms more regularly, they will look for better security features Long term Launch positive and safety-oriented messaging aimed at reducing customer anxiety about fraud Provide tutorials online and by phone and boost remote support options Better interface especially for first-time users whose usage is a direct result of coronavirus concerns Use this opportunity to effectively educate customers for using online services & continue this in the future. Change in Consumer Behaviour Intervention at Right time “ Consumer trust more important than short-term sales” Madison’s Vikram Sakhuja

14. Consumer Behaviour relevant to Books & E Reading Industry

15. Understanding the Industry & its Stakeholders Revenue Stream Stake-holders

16. Book Sales Fall as Impact of Coronavirus Increases NEW YORK (AP) — The number of physical books sold dropped 10 percent from the previous week, the latest sign of the effect of the coronavirus on the publishing industry. Could the coronavirus pandemic lock down Indian publishing for some time? Online and brick-and-mortar retailers have cut back drastically on orders as customer footfalls and sales dwindle. Corona impact: Season’s biggest books that didn’t get their time in the spotlight due to virus outbreak The publishers are now pushing back the release of dozens of books to summer and fall. Covid-19’s Impact on Libraries Goes Beyond Books Shuttering public libraries puts a strain on communities—even if it’s the only way to keep people safe. What are the Headlines ?

17. Adverse Effect of COVID-19 Being Invisible in Market All the stakeholders will lose big : Book releases postponed Author cant do publicity except through online modes Book Stores closed and few of them may never reopen Loses for libraries & event organisers Author’s revenue gets interrupted Publishing houses would lay-off staffs Sales of books dipped Three Stages of negative domino effect The diversity of books and culture is in real danger because of this domino effect

18. Primary Research: Consumer Behavior During Lockdown in Covid-19 Outbreak SN Question Asked in the Survey Option 1 % Response Option 2 % Response Option 3 % Response Option 4 % Response 1 How many books do you read per year < 2 35% 2-4 19% 4-6 15% >6 31% 2 Do you buy books or borrow from library / friends Buy 46% Borrow 19% Download 35%     3 What is the frequency of buying books As per need 81% Monthly 8% Quatertly 12%     4 Why do you buy new books Academic requirement 42% professional need 31% self interest 15% Pursing another hobby 12% 5 How do you buy books ? online / offline Online 42% offline 58%         6 Rank your preference of mode of book (least being most preferred) - Hard copy, soft copy, audiobook. (pls mention best like process even though you may be using another mode due to othe constraints) Hard copy 65% Soft copy 27% Audiobook 8%     7 During COVID-19, have you increased/ decreased book reading Increased 38% Reduced 23% Same 38%     8 If reduced what are you doing to spend the time ? Digital Entertainment 38% Time with family 23% Increased work load 15% Relaxing 23% 9 How many books have you purchased in last 2 months Nil 46% 1 27% 2 23% >2 4% 10 How have you bought books ? local store, online, soft copy, downloaded from internet Local Store 0% Online - Hardcopy 4% Online - softcopy 77% downloaded 23% 11 During COVID-19, are you finding it more convenient to go for e-books rather than hard-copy yes 35% No 42% Don't know 23%     12 Do you think futrue of books will shift towards online / e reading ? (definitelty, no it will return back, cant say) yes 62% No. it will go to earlier days 27% Don't know 12%     Total No. of Respondents- 26

19. Primary Research: Summarizing the Results During COVID-19, have you increased/ decreased book reading? How have you bought books ? local store, online, soft copy, downloaded from internet Do you think future of books will shift towards online / e reading ? During the Covid-19 outbreak, 39% respondents have increased reading while an almost equal chunk of respondents have also decreased reading. This implies that Covid-19 outbreak has impact equally (positively and negatively) on reading habits. 74% respondents prefer buying online softcopies of the books and 22% preferring downloaded books from internet implying that the respondents prefer reading softcopies. A whopping 61% respondents agreed that the future of books will shift towards online/e-reading.

20. Have people stopped buying Books : Top 50 searched terms in Amazon.com Search Term 3/8/20 - 3/14/20 3/1/20 - 3/7/20 2/23/20 - 2/29/20 Vitamin c 26 45 143 Masks for germ protection 27 8 3 Face mask 28 3 4 Face mask medical 29 17 6 Lysol disinfecting wipes 30 25 496 Lysol wipes 31 38 971 Disinfectant spray 32 77 652 Hand sanitizer wipes 33 23 304 Scott toilet paper 34 876 2775 Hand sanitizer pump 35 33 416 Iphone 11 case 36 11 9 Pasta 37 198 449 Isopropyl alcohol 38 61 2512 Wipes 39 194 617 Alcohol wipes 40 69 520 Antibacterial hand soap 41 75 1089 Sanitizing wipes 42 80 1192 Clorox 43 159 2052 Clorox disinfecting wipes 44 135 3094 Bleach 45 212 956 Airpods 46 15 12 Disinfecting wipes 47 76 2036 Water bottle 48 26 27 Search Term 3/8/20 - 3/14/20 3/1/20 - 3/7/20 2/23/20 - 2/29/20 Toilet paper 1 9 37 Hand sanitizer 2 1 2 Clorox wipes 3 7 96 Toilet paper bulk 4 603 2657 Disinfectant wipes 5 18 344 Lysol spray 6 16 138 N95 mask 7 2 1 Paper towels 8 42 94 Baby wipes 9 153 110 Aloe vera gel 10 13 1278 Purell hand sanitizer 11 5 36 Hand soap 12 53 308 Sanitizer 13 12 136 Lysol 14 32 454 Thermometer 15 41 82 Rubbing alcohol 16 28 1209 Alcohol 17 35 758 Hand sanitizer travel size 18 10 54 Purell 19 4 41 Bidet 20 259 1531 Charmin toilet paper 21 361 2522 Water 22 40 118 Mask 23 6 7

21. The Silver-lining Using the framework discussed earlier and considering COVID-19 as Unexpected Opportunity, the book industry must intervene at Right time to achieve Intended Purchase decision

22. How World is saving their writers

23. References http://eprints.bournemouth.ac.uk/10107/1/Consumer_Behaviour_Theory_-_Approaches_&_Models.pdf https://shodhganga.inflibnet.ac.in/bitstream/10603/43816/7/07_chapter3.pdf https://economictimes.indiatimes.com/industry/cons-products/fmcg/covid-19-a-black-swan-event-consumer-trust-more-important-than-short-term-sales-madisons-vikram-sakhuja/articleshow/74834350.cms?from=mdr https://www.xcubelabs.com/our-blog/covid-19-pandemic-black-swan-event-or-a-new-direction-for-businesses/ https://www.blog.invesco.us.com/the-coronavirus-is-proving-to-be-a-black-swan-event-unpredictable-and-with-massive-consequences/ https://www.forbes.com/sites/gregpetro/2020/03/06/a-black-swan-event-will-coronavirus-finally-force-adoption-of-next-gen-tech/#3fc52b0b2027 https://www.emarketer.com/content/the-biggest-business-impacts-of-the-coronavirus-pandemic-according-to-business-insider-intelligence https://trendemon.com/blog/how-is-coronavirus-impacting-consumer-behavior-a-data-driven-perspective/ https://www.emarketer.com/content/the-biggest-business-impacts-of-the-coronavirus-pandemic-according-to-business-insider-intelligence http://globalbizresearch.org/files/id_3030_gjetemcp_abdulla-s-alhamad_abdelbaset-queiri-364845.pdf

24. References https://economictimes.indiatimes.com/industry/cons-products/fmcg/covid-19-a-black-swan-event-consumer-trust-more-important-than-short-term-sales-madisons-vikram-sakhuja/articleshow/74834350.cms?from=mdr https://goodereader.com/blog/electronic-readers/coronavirus-is-disrupting-the-entire-e-reader-industry Coronavirus is disrupting the entire e-Reader Industry goodereader.com › Home › e-Reader News https://goodereader.com/blog/electronic-readers/coronavirus-continues-to-disrupt-the-e-rea...

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