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Dissertation proposal

. Proposed working title

What part consumer attitudes play in choosing or switching utility supplier in U.K? A case study of British Gas.

2. Research Background/context

This dissertation proposes the research of the consumer attitudes which is part of consumer buying behaviour. The dissertation will be based on studying the consumer attitudes in utility market of U.K. The focus of the study will be on how attitudes play their role in choosing of a utility supplier and what are the things which are important for a consumer when choosing a utility supplier e.g. is it price, service or renewable energy.

This dissertation will also focus on consumer attitudes towards switching supplier. This research project will be able to answer some of the questions like do the customer switch supplier easily? What are the reasons of switching? And what are the reasons for not switching their supplier?

As mentioned in the title this research is being done for British Gas one of the leading utility company of U.K. British Gas is a Centrica owned firm which holds more then 16 million customers but last year British Gas lost nearly one million customers. The gas and electricity provider, which has put up prices twice in 2004, lost 290,000 customers in the first half of the year and 630,000 in the second. (BBC news, http://news.bbc.co.uk/2/low/business/4084481.stm). This is the main problem of the company that it is loosing many customers because of price increase but despite of high prices compared to other utility suppliers British Gas is still a leading firm. The question is why the company is loosing so many customers? As far I see the main reason for loosing customers is price but if we see the past British Gas prices were always high compared to its competitors but it got more points on service. Are consumers of utility market only going for price or still they prefer premium price for good service? I want to do this research to understand consumer attitudes in choosing and switching of suppliers in utility market which will help British Gas to develop their marketing strategy. This research will also be able to give recommendations to the firm to win back their old customers and make new customers by understanding their needs wants and demands.

Before going into the research objectives and research methodology let's briefly describe consumer behaviour and consumer attitudes.

2.1 consumer buying behaviour

Consumer behaviour studies how individuals, groups , and organizations select buy, use, and dispose of goods, services, ideas or experiences to satisfy their needs and desires (Philip kotler,1999).

Lancaster and Massingham described Consumer behaviour as the acts of individuals directly involved in obtaining and using economic goods and services, including the decision processes that precede and determine these acts (Lancaster and Massingham,1999). Consumer behaviour is also defined as the study of how people buy, what they buy, and why they buy.

This marketing discipline applies knowledge from areas such as psychology, sociology, anthropology, and economics to describe and understand how consumers are likely to behave. It attempts to understand the buyer decision making process, both individually and in groups. Consumer buying consists of the activities involved in the buying and using the products or services for personnel and household use (Lancaster and massingham,1999).

Knowledge of consumer behaviour principles allows marketers and other managers to become more effective at making good decisions. They can better predict consumer actions, determine the needs of target markets, and understand how consumers perceive and understand marketing information.

Geoff Lancaster (1999) described a simplified framework of consumer behvaiour. As seen in the diagram below ,environmental influences that are external to the consumer have an effect on purchase behaviour. The consumer also has influences that are individually determined. These are carried out consciously or subconsciously on the memory. The diagram also show the decision making process in which information can be fed back and the purchase process can be stopped and resumed at an earlier stage.

As described by Cohen (1991), the marketing mix inputs (or the four P's of price, place, promotion, and product) are adapted and focused upon the consumer. The psychology of each individual considers the product or service on offer in relation to their own culture, attitude, previous learning, and personal perception. The consumer then decides whether or not to purchase, where to purchase, the brand that he or she prefers, and other choices.
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2.2 Attitudes

Attitudes has been one of the most important subjects of study in the field of consumer behaviour. Attitude research forms the basis for developing new products, repositioning existing products, creating advertising campaigns and predicting brand preferences as well as general purchase behaviour.

Social psychologists, unfortunately, do not agree on the precise definition of attitude. One concept is that an attitude is how positive or negative, favorable or pro or con a person feels towards an object( Loudon and Della Bitta,1999). Allport views attitudes as " learned predispositions to respond to an object or ...

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