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\title{The Influence of Formal and Informal Sources on Consumer Buying Behavior}
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             \author[1]{Dr. Shahzad  Khan}

             \author[2]{Dr. Shahzad  Khan}

             \affil[1]{  MS Research Scholar Institute of Management Sciences Peshawar Pakistan.}

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\date{\small \em Received: 12 May 2012 Accepted: 7 June 2012 Published: 20 June 2012}

\maketitle


\begin{abstract}
        


All over the world there are two sources that influence consumer buying behavior. The first is formal source, which is a kind of source which is well planned and paid for example advertising, personal selling, sale promotion and public relation. The second source is informal which is a kind of source which is not pre planned and non paid like reference group, culture etc. This research emphasizes that how formal and informal sources affect consumer buying behavior. For the research a sample of 200 students of three private universities targeted from Peshawar region. On the basis of their responses a regression and correlation analysis was conducted. Findings and results of the study shows that formal sources have more influence on consumer buying behavior. Within the formal sources advertising is the key factor which contributes more towards consumer buying behavior for telecom services. While in case of informal sources reference group contribute more in comparison of other informal sources towards consumer buying behavior for telecom services.

\end{abstract}


\keywords{Formal sources, Informal sources, Consumer buying behavior and Telecom industry.}

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\let\tabcellsep& 	 	 		 \par
The Influence of Formal and Informal Sources on Consumer Buying Behavior Abstract -All over the world there are two sources that influence consumer buying behavior. The first is formal source, which is a kind of source which is well planned and paid for example advertising, personal selling, sale promotion and public relation. The second source is informal which is a kind of source which is not pre planned and non paid like reference group, culture etc. This research emphasizes that how formal and informal sources affect consumer buying behavior. For the research a sample of 200 students of three private universities targeted from Peshawar region. On the basis of their responses a regression and correlation analysis was conducted. Findings and results of the study shows that formal sources have more influence on consumer buying behavior. Within the formal sources advertising is the key factor which contributes more towards consumer buying behavior for telecom services. While in case of informal sources reference group contribute more in comparison of other informal sources towards consumer buying behavior for telecom services. According to \hyperref[b2]{Barton (1999)} Personal selling carry personal contacts which makes it is unique. The conditions where the target market is concentrated, personal selling can be used. This may also applicable if the product is complex and of high value. Personal selling also know face to face selling is a formal source that most often brings the buying decision process to a satisfactory conclusion for buyer \& seller. According to Jagdish (1995) the strength of personal selling is that it is flexible \& provides immediate feedback. The sales presentation can be personalized based upon the wants of customer. Many customers don't know what they want \& it is through personal selling that marketer can help him out. \hyperref[b7]{Kristof (2001)} in his study describe that sale promoting is a short term benefits offered by the company for the enhancement of sale or attraction of consumers. Sale promotion can be in terms of extra quantity, coupons, buy one get one free, free sample etc. Similarly public relation has also an impact on consumer buying behavior.\par
b) Informal Sources \hyperref[b8]{Mery (1985)} describes in his study that after using a product user has a perception about the product and can express his opinion on others. These expressions are unpaid and unplanned and are known as informal sources. On the other hand formal paid and planned. These are advertisement, sales promotion etc Shahzad (2011).\par
sources. E.g. if a person goes to a shopkeeper to buy LG color TV but someone tells him that LG televisions are not as durable as SONY is. If the first person changes his decision \& buy SONY color TV then, one can say that informal source has effected the person buying decision. So these sources after careful study have been divided into three categories.\par
According to Abraham (2011) individuals identifies with the group to the extent that he takes on many of the values, attitudes or behaviors of group members. There are three types of groups. Membership group is a kind of group to who human belongs. The second is Aspiration Groups to which a person wants to belong to. The third group is disassociate. It is a type of groups to which a person does not want to belong to. Honda tries to disassociate from biker group. Wilfred (2008) the degree of individual's susceptibility \& strength of involvement to the reference group effects his/her purchase decision.\par
Paul  {\ref (2000)} in his study describe that the social class also has an impact on consumer buying behavior. A person belongs to a particular class deals to his/her type environment. For example upper class American prefer luxury car like Ferrari.\par
According to Jacqueline (2002) culture is the combination of values, beliefs and customs which are accepted by a group of people living in a particular area. It is the cultures who determine what is acceptable with product eat, wear, reside \& travel. According to Ramzan (2011) culture effects what people buy, when they buy and how they buy. While subculture groups those individuals who have similar value \& behavior patterns within the group but differ from those in other groups e.g. if local culture does not permit alcohol consumption then no matter one cannot sell alcoholic beer there. In this case company decides to change the product to non-alcoholic beer. \hyperref[b13]{Raska (2011)} explain in his study that environment is the factor that can change the actions of human being. These actions may relate to buying or to genral life. 
\section[{II. Theoretical Frame Work Of The Study}]{II. Theoretical Frame Work Of The Study}\par
There are two variables discussed in this study, i.e. independent and dependent variables. The below figure shows the variables that consumer buying behavior is dependent upon formal and informal sources as shown in figure below.\par
The theoretical frame work of the study includes all those variables that are identified along with corelation after applying the statistical tools. Both formal and informal sources and its factors are independent variables of the study. The formal sources are advertising, personal selling, sale promotion and public relation. While informal sources includes reference group, social class, culture and environment.  
\section[{Global Journal of}]{Global Journal of} 
\section[{Culture Environment}]{Culture Environment}\par
Study identified the relationship among above variables. On the basis of these variables a conclusion and recommendations is provided. 
\section[{III.}]{III.} 
\section[{Methodology}]{Methodology}\par
As this research is focused on the Telecom industry. So from telecoms industry consumers Peshawar a sample of 200 was selected for data analysis. The Likert scale questionnaire is designed for collecting the data from the mention sample. The data is collected from the students of departments of management's science of three private universities Preston, Sarhad and City University.\par
The number of participants who contacted was 200. For data collection among 200 consumers a research instrument was distributed. The response from respondent was 96\% and regression and correlation analysis is conducted on mentioned sample size. 
\section[{a) Reliability of Scale}]{a) Reliability of Scale}\par
The table 1 below shows the reliability of the data collected from respondents. The following scales show that the data collected from mentioned sample is reliable and respondents answered accurately. Because the variables are exceeding from 70\% which is the standard of acceptance for reliability. IV. 
\section[{Hypotheses of the Study and Regression Analysis}]{Hypotheses of the Study and Regression Analysis}\par
An overview of the hypothesis related to the relationship between consumer buying behavior with formal and informal sources. In order to test the hypothesis of the study eight regression equations were developed along with eight hypotheses. Study shows that there is significant relationship between the consumer buying behavior and following hypothesis. 
\section[{Objectives Hypothesis Relationship between Formal sources and consumber buying behavior.}]{Objectives Hypothesis Relationship between Formal sources and consumber buying behavior.}\par
H:1 There is a positive relationship between consumer buying behavior and advertising. H:2 Personal selling has an impact on consumer buying behavior. . H:3 There is a positive relationship sale promotion and consumer buying behavior. H:4 Public relation has an impact on consumer buying behavior.   \hyperref[tab_4]{2} show that the overall model is highly significant. In case of informal sources there is a significant relationship exist between Consumer buying behavior and reference group with correlation coefficient (r = .843). Which mean that reference group has an impact on consumer buying behavior. There is a relationship exist between Consumer buying behavior and social class with correlation coefficient (r = .619). Which mean that social class can influence the buying behavior of the consumers. Culture is another informal source that can influence the Consumer buying behavior with correlation coefficient (r = .726). Environment has a influence on the Consumer buying behavior with correlation coefficient (r = .643) . 
\section[{VI.}]{VI.} 
\section[{Conclusion}]{Conclusion}\par
Research finds that there is a significant relationship between formal and informal sources and consumer buying behavior for telecom sectors. Both sources play a vital role in the purchase behavior of consumer but formal resources play more vital role in buying decision. In formal sources advertising is the dominant factor which contributes more towards purchase behavior in comparison of other formal sources with correlation (r = .938).\par
While in case of informal sources reference group is the key player with correlation (r = .843) which contribute more toward the consumer purchase behavior. Over all between all formal and informal sources the vital role is from the formal sources. Hence it is concluded that both formal and formal sources has the influence on consumer buying behavior but formal sources has greater influence on consumer buying behavior.\begin{figure}[htbp]
\noindent\textbf{}\includegraphics[]{image-2.png}
\caption{\label{fig_0}[A}\end{figure}
 \begin{figure}[htbp]
\noindent\textbf{} \par 
\begin{longtable}{P{0.85\textwidth}}
2012\\
ear\\
2\\
and Business Research Volume XII Issue XII Version I\\
Management\\
Consumer\\
Buying Behavior\end{longtable} \par
 
\caption{\label{tab_1}Personal Selling Sale Promotion Advertising Formal Sources Public Relation Informal Sources Reference Group Social Class}\end{figure}
 \begin{figure}[htbp]
\noindent\textbf{1} \par 
\begin{longtable}{P{0.3163430420711974\textwidth}P{0.36585760517799354\textwidth}P{0.16779935275080904\textwidth}}
S.No\tabcellsep Variables\tabcellsep Cronbach's Alpha\\
1\tabcellsep Consumer Buying\tabcellsep 0.833\\
\tabcellsep Behavior\tabcellsep \\
2\tabcellsep Advertising\tabcellsep 0.903\\
3\tabcellsep Personal Selling\tabcellsep 0.819\\
4\tabcellsep Sale Promotion\tabcellsep 0.782\\
5\tabcellsep Public Relation\tabcellsep 0.725\\
6\tabcellsep Reference Group\tabcellsep 0.766\\
7\tabcellsep Social Class\tabcellsep 0.879\\
8\tabcellsep Culture\tabcellsep 0.910\\
9\tabcellsep Environment\tabcellsep 0.718\\
\multicolumn{3}{l}{The above table calculations suggest that the responses}\\
\multicolumn{3}{l}{given by respondents of the study are reliable.}\end{longtable} \par
 
\caption{\label{tab_2}Table 1 :}\end{figure}
 \begin{figure}[htbp]
\noindent\textbf{} \par 
\begin{longtable}{P{0.1350467289719626\textwidth}P{0.5441588785046729\textwidth}P{0.17079439252336448\textwidth}}
\tabcellsep \tabcellsep 2012\\
\tabcellsep \tabcellsep 3\\
Relationship between Informal sources and consumber buying behavior.\tabcellsep H:1 Reference group has a significant impact on consumer buying behavior. H:2 Social class influence consumer buying behavior. H:3 Culture has a positive relationship with consumer buying behavior. H:4 Environment of consumer can influence the buying behavior of consumer. .\tabcellsep Global Journal of Management and Business Research Volume XII Issue XII Version I\end{longtable} \par
  {\small\itshape [Note: © 2012 Global Journals Inc. (US)]} 
\caption{\label{tab_3}}\end{figure}
 \begin{figure}[htbp]
\noindent\textbf{2} \par 
\begin{longtable}{P{0.5781725888324873\textwidth}P{0.2718274111675127\textwidth}}
below shows significance relationship\tabcellsep significant relationship with formal and informal sources.\\
between the dependent and independent variables. It\tabcellsep Table\\
explains that the consumer buying behavior has\tabcellsep \end{longtable} \par
 
\caption{\label{tab_4}Table 2}\end{figure}
 \begin{figure}[htbp]
\noindent\textbf{2} \par 
\begin{longtable}{P{0.85\textwidth}}
FORMAL SOURCES\end{longtable} \par
 
\caption{\label{tab_5}Table 2 :}\end{figure}
 \begin{figure}[htbp]
\noindent\textbf{3} \par 
\begin{longtable}{P{0.02375776397515528\textwidth}P{0.43027950310559004\textwidth}P{0.2666149068322981\textwidth}P{0.04223602484472049\textwidth}P{0.08711180124223603\textwidth}}
\tabcellsep \multicolumn{2}{l}{FORMAL SOURCES}\tabcellsep \tabcellsep \\
S.\tabcellsep Dependent\tabcellsep Independent\tabcellsep R\tabcellsep R Square\\
No\tabcellsep Variables\tabcellsep variable\tabcellsep \tabcellsep \\
1\tabcellsep Consumer\tabcellsep Advertising\tabcellsep 0.938\tabcellsep 0.879\\
\tabcellsep Buying Behavior\tabcellsep \tabcellsep \tabcellsep \\
2\tabcellsep Consumer\tabcellsep \multicolumn{2}{l}{Personal Selling 0.721}\tabcellsep 0.519\\
\tabcellsep Buying Behavior\tabcellsep \tabcellsep \tabcellsep \\
3\tabcellsep Consumer\tabcellsep \multicolumn{2}{l}{Sale Promotion 0.842}\tabcellsep 0.708\\
\tabcellsep Buying Behavior\tabcellsep \tabcellsep \tabcellsep \\
4\tabcellsep Consumer\tabcellsep Public Relation\tabcellsep 0.729\tabcellsep 0.531\\
\tabcellsep Buying Behavior\tabcellsep \tabcellsep \tabcellsep \\
\tabcellsep \multicolumn{2}{l}{INFORMAL SOURCES}\tabcellsep \tabcellsep \\
1\tabcellsep Consumer\tabcellsep Reference\tabcellsep 0.843\tabcellsep 0.710\\
\tabcellsep Buying Behavior\tabcellsep Group\tabcellsep \tabcellsep \end{longtable} \par
 
\caption{\label{tab_6}Table 3 :}\end{figure}
 			\footnote{© 2012 Global Journals Inc. (US)} 		 		\backmatter  			 \par
There is an significant relationships exist between Consumer buying behavior and advertising (t-statistic = 21. 430 and P-value= 0.000) which mean advertising has an impact on Consumer buying behavior. There is significant relationship exist between Consumer buying behavior and personal selling (t-statistic = 32.251 and P-value= 0.000). There is significant relationship exist between Consumer buying behavior and sale promotion (t-statistic = 19.254 and P-value= 0.000). There is a significant relationships exist between Consumer buying behavior and public relation (t-statistic = 49.788 and P-value= 0.000) which mean that public relation has an impact on Consumer buying behavior.\par
Table  {\ref 2} above shows that there is a significant relationships exist between Consumer buying behavior and reference group (t-statistic = 49. 258 and P-value= 0.000) which mean reference group has an impact on Consumer buying behavior. There is significant relationship exist between Consumer buying behavior and social class (t-statistic = 37.199 and P-value= 0.000). There is significant relationship exist between Consumer buying behavior and culture (t-statistic = 15.297 and P-value= 0.000). There is a significant relationships exist between Consumer buying behavior and environment (tstatistic = 26.328 and P-value= 0.000) which mean environment has an impact on Consumer buying behavior.\par
Hence the above result shows that the Consumer buying behavior is dependent upon above mentioned variables.\par
V. 
\subsection[{Correlation Analysis}]{Correlation Analysis}\par
As shown in table 3 below, there is strong association between Consumer buying behavior and formal and informal sources.\par
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