CONSUMER BEHAVIOUR

BBA Marketing

Personal ConsumerPersonal Consumer

The individual who buys goods and services for his or her own use, for household use, for the use of a family member, or for a friend.

Organizational ConsumerOrganizational Consumer

A business, government agency, or other institution (profit or nonprofit) that buys the goods, services, and/or equipment necessary for the organization to function.

What are they Consuming?What are they Consuming?

Consumer Behavior……

• It is study of human behavior in the specific context of consumption of products and services.

• It is a decision process a person goes through when purchasing,using, evaluating and disposing of products.

• The ultimate objective of this process is satisfaction of needs and wants

Future of CB in India

• Increasing number of women in workforce

• Rise in the number of nuclear families

• Changes in lifestyle and income distribution

• Increase in mobility due t industries

• Increasing level of stress

• Need for consumer privacy

Scope of Consumer Behavior

How individuals make decisions to spend their valuable resources ( time, money & effort)

• What they buy• When they buy• Where they buy • Why they buy• How often

Consumer Behaviour focuses on..

• Wants more than Needs

• Discretionary spending More than Utilitarian spending

This is a Need

Needs - state of felt deprivation including physical, social, and individual needs.

Types of Needs• Physical:

– Food, clothing, shelter, safety• Social:

– Belonging, affection• Individual:

– Learning, knowledge, self-expression

This is a Want

Wants - form that a human need takes, as shaped by culture and individual personality.

This is Demand

“Demand”

Wants

Need / Want Fulfillment

• Needs and Wants fulfilled through a Marketing Offer :– Some combination of

products, services, information, or experiences offered to a market to satisfy a need or want.

Abraham Maslow - Need Satisfaction

Needs

Behaviour/Action

Goals

achievedrive

satisfy

teleologygoal-orientation

Motivation

Forces that stimulate and direct consumers towards purposeful goal oriented behaviour

The energizing force that causes behavior-each person is unique with a hierarchy of needs. A need becomes a motive when it is aroused sufficiently.

Motivation – Some components

• Inclination – what I feel I want to do – active/passive, conscious/sub-

conscious

• Direction – what I am trying to do

• Action – what I do do

• Effort – how hard I try

• Persistence – how long I keep trying

• How we construe expectations, needs, drives, efforts and results

(actual & 'rationalised'/felt) - self & others

Mechanism of Motivation Arousal

• Cognitive activity

• Situational Conditions

• Stimuli properties

Inner psychological characteristics that reflect how a person responds to his/her environment.

A persons consistent behavior or response to recurring situations.

Classification according to personality types permits some predictability of behavior.

Personality

Personality Structure according to Freud

ID-A warehouse of primitive or instinctual needs for which individual seeks immediate satisfaction

- survive, reproduce, and aggress.The id operates on the pleasure principle: If not constrained bu reality, it seeks immediate gratification.

Ego-Individual’s conscious control that balances the demands of the id and superego

The ego operates on the reality principle, satisfying the id’s desires in ways that will realistically bring pleasure rather than pain.

Superego- Individual’s internal expression of society’s moral and ethical codes of conduct

Ideal principle/ moral principle

Freudian theory & Marketing..

Consumer researchers using Freud’s theory see consumer purchases as a reflection and extension of the consumer’s own personality

Other Theories/ Non-Freudian theories

• Carl Jung– Sensing- thinking personality– Sensing- feeling personality– Intuiting- thinking personality– Intuiting – feeling personality

• Karen Horney’s CAD Theory• Trait Theory• Cattell’s Theory

Karen Horney’s CAD Theory

• Compliant Individuals- one who desires to be loved, appreciated and wanted by others

• Aggressive Individuals- one who moves against or competes with others, desires to excel and win admiration

• Detached Individuals- one who seeks emotional & behavioral freedom from others, desires independence, self sufficiency and freedom from obligations

Trait’s Theory• Personality theory with a focus on psychological

characteristics

• Trait - any distinguishing, relatively enduring way in which one individual differs from another

• Personality is linked to how consumers make their choices or to consumption of a broad product category - not a specific brand

Cattell's 16 Personality Factors

Abstractedness Imaginative versus practical

Apprehension: Worried versus confident

Dominance Forceful versus submissive

Emotional Stability Calm versus high strung

Liveliness Spontaneous versus restrained

Openness to Change Flexible versus attached to the familiar

Perfectionism Controlled versus undisciplined

Privateness Discreet versus open

Reasoning Abstract versus concrete

Rule Consciousness: Conforming versus non-conforming

Self-Reliance Self-sufficient versus dependent

Sensitivity Tender-hearted versus tough-minded.

Social Boldness Uninhibited versus shy

Tension Impatient versus relaxed

Vigilance Suspicious versus trusting

Warmth Outgoing versus reserved

The Five-Factor Theory of Personality

Extraversion: This trait includes characteristics such as excitability, sociability, talkativeness, assertiveness and high amounts of emotional expressiveness.

Agreeableness: This personality dimension includes attributes such as trust, altruism, kindness, affection, and other prosocial behaviors.

Conscientiousness: Common features of this dimension include high levels of thoughtfulness, with good impulse control and goal-directed behaviors. Those high in conscientiousness tend to be organized and mindful of details.

Neuroticism: Individuals high in this trait tend to experience emotional instability, anxiety, moodiness, irritability, and sadness.

Openness: This trait features characteristics such as imagination and insight, and those high in this trait also tend to have a broad range of interests.

1. I collect unusual products as a way of telling people I’m different

2. When dressing, I have sometimes dared to be different in ways that others are likely to disapprove

3. When products or brands I like become extremely popular, I lose interest in them

4. As far as I’m concerned, when it comes to the products I buy and the situations in which I use them, custom and rules are made to be broken

5. I have sometimes purchased unusual products or brands as a way to create a more distinctive personal image

Brand Personality

• Personality-like traits associated with brandsExamples– Purdue and freshness– Nike and athlete– BMW is performance driven– Levi’s 501 jeans are dependable and rugged

• Brand personality which is strong and favorable will strengthen a brand but not necessarily demand a price premium

Commands respect, authority

• America’s favored color• IBM holds the title to blue• Associated with club soda• Men seek products packaged in blue• Houses painted blue are avoided• Low-calorie, skim milk• Coffee in a blue can perceived as “mild”

Caution, novelty, temporary, warmth

• Eyes register it faster• Coffee in yellow can perceived as “weak”• Stops traffic• Sells a house

Secure, natural, relaxed or easy- going, living things

• Good work environment• Associated with vegetables and chewing gum• Canada Dry ginger ale sales increased when it changed sugar-free package from red to green and white

BLUEBLUE

YELLOWYELLOW

GREENGREEN

The Personality-like Associations of Colors

Copyright 2007 by Prentice Hall

Human, exciting, hot, passionate, strong

•Makes food “smell” better•Coffee in a red can perceived as “rich”•Women have a preference for bluish red•Men have a preference for yellowish red•Coca-Cola “owns” red

Powerful, affordable, informal

•Draws attention quickly

Informal and relaxed, masculine, nature

•Coffee in a dark-brown can was “too strong”

•Men seek products packaged in brownGoodness, purity, chastity, cleanliness, delicacy, refinement, formality

•Suggests reduced calories•Pure and wholesome food•Clean, bath products, feminine

Sophistication, power, authority, mystery

•Powerful clothing•High-tech electronics

Regal, wealthy, stately

•Suggests premium price

REDRED

ORANGEORANGE

BROWNBROWN

WHITEWHITE

BLACKBLACK

SILVER, SILVER, GOLDGOLD

Creating Brand Personality

• Defining the target audience• Find out what they need, what they like• Build a consumer personality profile• Create the product personality to match that

profile

Self and Self-Image

• Consumers have a variety of enduring images of themselves

• These images are associated with personality in that individuals consumption relates to self-image

Perception

Process by which an individual selects, organizes, and interprets information. It is selective.

How to get attention?

QUIZ: Identify the Product!!!

YOUR interpretation of “reality”

after information/stimuli is …

WHAT IS PERCEPTION?

F iltered out S elected O rganized Defined ….using YOUR existing…

CONT..

K nowledgeN eedsBeliefsV aluesA ssumptionsAttitudes.

CONT..

SensationThe absolute thresholdThe differential thresholdSubliminal perception

ELEMENTS OF PERCEPTIONELEMENTS OF PERCEPTION

Sensory Receptors: The human organs (eyes, ears, nose, mouth, skin) that receive sensory inputs.

Absolute Threshold : The lowest level at which an individual can experience a sensation.

Differential Threshold : The minimal difference that can be detected between two stimuli. Also known as the j.n.d. (just noticeable difference).

Subliminal Perception: Perception of very weak or rapid stimuli received below the level of conscious awareness.

The perception of price as an indicator of product quality (e.g., the higher the price, the higher the perceived quality of the product).

PRICE/QUALITY RELATIONSHIP

What do you see?

Now what do you see?

Nature of ProductPhysical Attributes of ProductPackage DesignBrand NameAdvertisements & CommercialsPosition of AdEditorial Environment

SOME MARKETING VARIABLES INFLUENCING CONSUMER PERCEPTION

Physical AppearancesStereotypesIrrelevant CuesFirst ImpressionsJumping to ConclusionsHalo Effect

DISTORTING INFLUENCES

• Defective haircut- Service• Retail store Image• Brand Image is a set of human characteristics

linked to the brand that consumers hold in memory

• Consumer loyalty associated with positive brand image

The degree of uncertainty perceived by the consumer as to the consequences (outcome) of a specific purchase decision

PERCEIVED RISK

Functional RiskPhysical RiskFinancial RiskPsychological RiskTime RiskSocial Risk

TYPES OF PERCEIVED RISK

HOW CONSUMERS HANDLE RISK

Seek InformationStay Brand LoyalSelect by Brand ImageRely on Store ImageBuy the Most Expensive ModelSeek ReassuranceBuy Small Packs

Some people purchase a watch from a cognitive and rational viewpoint where as some may go for its

styling or its association with a certain life style or status level this is an experimental emotional

approach

• Dec.Process Route Products

• Cognitive think/feel/do cars, new products with high

involvement

• Impulse do/feel/think snacks, beverages, small house holds

• Experience feel/do/think restaurants, trade shows, new products

with sampling demonstration

• Repeat/habit do/think/feel Low priced

Learning

Behavior resulting from repeated experience and thinking. Consumption is largely learnt behavior. Demand is built on strong drives, motivating cues and positive reinforcement.

4 ELEMENTS OF LEARNING• MOTIVES

– Motives arouse individuals and as a result they respond. This arousal function is essential because it activates the energy needed to engage in learning activity.

– By achieving the goal ,the arousal reduces, but have a greater tendency to occur again, that is why marketers put their product in a way that when relevant consumer motive arouse their products are their to satisfy the need.

– This result that consumer will learn a connection b/w the product and motive. • CUES

– Capable of providing direction i.e. it influences the manner in which, to respond to motive. e.g. hungry man is guided by restaurant signs or aroma of food.

• RESPONSE– Mental or physical activity in reaction to a stimulus.

• REINFORCEMENT– Anything that follows the response and increase the tendency of response to

reoccur in a similar situation.

Behavioural learning/ Experienced learning

• Classical Conditioning

- Leaning via association

• Operant Conditioning

- Learning via reinforcement

Cognitive Learning/ Conceptual Learning

– Consumers learn through information processing and problem solving

Classical Conditioning Process

ConditionedStimulus (bell,

Lipton Tea ,Brita waterfiltration pitcher)

Association develops throughcontiguity and repetition

Unconditionedstimulus

(Food, family events waterfall)

Unconditionedresponse(salivation,

fun& enjoyment,purity ,freshness)

Conditionedresponse(salivation,

fun& enjoyment,purity ,freshness)

1. Repetition2. Stimulus Generalization: According to classical conditioning theorists, learning

depends not only on repletion but also on the ability of individuals to generalize. 3. Stimulus Discrimination

• Product Line extension- the marketer adds related products to an already established brand

• Product form extension- Same product available in different forms

• Product category extension- diversifying in to different products in different categories using the same established brand

• Family branding- The practice of marketing a whole line of company products under the same brand name

Instrumental Conditioning

Consumers learn by means of a trial and error process, in which some purchase behaviors result in more favorable outcomes i.e., rewards than other purchase behaviors. A favorable experience is instrumental in teaching the individual to repeat a specific behavior

Increase or decrease inprobability of repeatbehavior (purchase)

Instrumental Conditioning Process

Behavior(consumer uses

product or service)

…Contd• Reinforcement- increases the strength of the response and

tends to induce repetition of the behaviour that preceded it.

Positive Negative

• Extinction & Forgetting- When a learned response is no longer reinforced, it diminishes to the point of extinction

• Classical Conditioning:– Based on the association of a stimulus and response– Most common in low involvement situations– Involve an already established response to another stimuli– The outcome is not dependant on consumers actions– Influences and change the opinions

• Operant Conditioning– Based on reward / punishment to desired response – Use of free samples highly effective in operant conditioning– Also known as Instrumental Learning– No previous stimuli –response relation – The outcome is dependent on learner’s action– Influences changes in goal –oriented behavior

Stimulus(popcorn)

Desired Response(Consumption)

Reinforcement(Pleasant Taste)

Higher Probability of Purchase

Brand Loyalty

The beahvioural aspect- repeat purchase

The attitudinal aspect- degree of disposition

68

Memory in Marketing• Brand Image

– Is the schematic memory of the brand

• Product Positioning– Is the decision by the management to try and achieve a defined brand image relative to

competition in a market segment– Related Concepts:

• Product Repositioning• Product Depositioning

• Brand Equity– Is the value assigned by consumers to a brand over and above the functional characteristics of

the product– People are willing to pay a “Premium” for brands with higher equity

• Brand Leverage– Is the use of brand equity of an existing brand for a new product– Is also known as brand extension, family branding or umbrella branding

Attitudes, Values & Beliefs

Attitude is a learnt disposition to react to certain situations which is influenced by values and beliefs.e.g. Japanese & Quality

• Beliefs– A descriptive thought or image a person has about something.

• Beliefs and attitudes are acquired through learning and doing.

• Beliefs may be based on knowledge, faith or opinion.

ATTITUDES• People’s attitude towards products is based on their attitude towards the

country of their origin.

--Impact of manufacturing countries varies with the product.

--Different countries enjoy different reputations for different products.

--A buyers perception of country affects his perception of the products of that country.

--Attitudes can change over a period of time.

Attitude Models

Tri-component Attitude Model

According to this model, attitudes

consist of three main components:

1. Cognitive component

2. Affective component

3. Conative component

Cognitive

AffectiveConative

A Simple Representation of Tri-component Attitude Model

Post-purchase Attitude ChangeCognitive Dissonance Theory

1. The degree of commitment. If it is easier to alter the decision, the consumer is less likely to experience dissonance.

2. The importance of the decision. If the purchase decision is more important, it is more likely that the consumer will experience dissonance.

3. The difficulty of choosing among alternatives. Decision difficulty depends on the number of alternatives considered.

4. The individual’s personality characteristics. Some individuals have a greater tendency of experiencing anxiety than others.

Copyright 2007 by Prentice Hall

What Is a Group?

• Two or more people who interact to accomplish either individual or mutual goals

• A membership group is one to which a person either belongs or would qualify for membership

• A symbolic group is one in which an individual is not likely to receive membership despite acting like a member

Membership Group

Primary Secondary

Family, Neighbours, Colleagues

Professional Association, Religious Association

When do Groups Exert Influence?The group influence on an individual's buying behaviour depends on three factors:

Attitude Towards the Group: According to William O. Bearden and Richard Rose, individual's susceptibility to group influence varies widely. The buying behaviour of a consumer is more likely to be influenced by the group if the individual:

1. Views the reference group as a credible source of information about the product or service.

2. Values the views and reactions of group members with regard to buying decisions.

3. Accepts the rewards and sanctions allotted out by the group for proper or improper behaviour.

Major Consumer Reference Groups -

Reference Groups

A Reference Group Reference Group is an Actual or Imaginary Individual or Group Conceived of Having Significant Relevance Upon an

Individual’s Evaluations, Aspirations, or Behavior.

Reference Groups Influence Consumers in Three Ways:

InformationalInformational Value-ExpressiveValue-Expressive

UtilitarianUtilitarian

Teens are very influenced by

indirect reference groups.

weblink

Nature of the Group: James H. Leigh and Terrance G. Gabel note that reference groups are more likely to influence a group member's behaviour if they are:i. Cohesive, that is having similar values and norms.ii. Frequently interacting and thus creating more opportunities to influence

members.iii. Distinctive and exclusive, that is, the membership in the group is highly

regarded.Harley-Davidson group example, the group is closely knit and for many members biking has become a full-time hobby. Membership is exclusive and distinctive as they refer to each other as "brothers" and outsiders as "citizens.“

Nature of the Product: The nature of the product also determines the degree of influence a group has on an individual. Groups are more likely to be influential for products, which are: (a) visible such as clothing and (b) exclusive that might speak of status such as a Mercedes.

Membership Groups

1. Primary Informal Groups

2. Primary Formal Groups

3. Secondary Informal Groups

4. Secondary Formal Groups

Types of Reference GroupsReference groups furnish points of comparison by which one can evaluate attitudes and behaviour.

An individual can be a member of a reference group such as the family and would be said to be part of a membership group.

This same individual may aspire to belong to a cricket club and would be said to be apart of an aspiration group.

A disclaimant group is one to which an individual may belong to or join and then reject the group's values.

An individual may also regard the membership in a specific group as something undesirable and to be avoided. Such a group is a dissociative group.

Aspiration GroupsAnticipatory Aspiration Groups: These are groups that an individual anticipates to join at some future time. The individual, generally, has some direct contact with such group(s). For instance, the individual may wish to join a group higher in the organisational hierarchy. The individual's aspiration is more likely to be an outcome of anticipated rewards that go with higher position in an organisation such as power, status, prestige, money and other perks.A good example of a direct appeal to aspiration group norms within the organisation is the ad for Johnnie Walker. The ad appeal focuses on anticipation of ultimately reaching at the top in the business organisation.

Appealing to Increase Position

Symbolic Aspiration Groups: The individual admires these groups but is unlikely to join them despite acceptance of the group's beliefs and attitudes. In a study Robert J. Fisher and Linda L. Price found that individuals establish a vicarious connection with such a group by purchasing a product associated to the aspiration group. For example, a tennis fan may buy a Nike sports jacket and shoes because many tennis star wear these. It is important for such an influence that the product is visually obvious. Marketers use certain celebrities to advertise the product and thereby appeal to the symbolic aspirations of consumers

Famous soccer player (David Bekham) endorses Police Sunglasses

Factors Affecting the Likelihoodof Conformity

Cultural Pressures

Fear of Deviance

Commitment

Group Dynamics

Susceptibility to Interpersonal Influences

Cont….

Nature of Reference Groups1. 'Norms' are generally defined rules and standards of behaviours that the

group establishes. Group members are expected to conform to these norms which may be with regard to the appropriateness of clothes, shoes, eating habits, or brands of cosmetics etc.

2. 'Values' are shared beliefs among group members regarding what behaviours are appropriate or inappropriate. Cultures and sub-cultures largely define the values, however, they do vary significantly by family and peer groups, for example, one family might place more value on material possessions and another on personal achievements independent of material possessions.3. 'Roles' refer to functions that an individual assumes or that the group

assigns to her/him to accomplish group objectives. For example, in a group buying behaviour such as a family, marketers can identify specific roles that individuals assume. The roles might be of initiator, influencer, decider, buyer and user.

4. 'Status' is the achieved or ascribed position that the individual occupies within the group's hierarchy. As one may expect, greater power and influence goes with higher status. For instance, the executive vice-president in an organisation has a higher status than the sales manager. The vice-president will most likely have a large, well-furnished office symbolising her/his status. In a typical Indian family, the head of the family has more status than anyone else.

Consumer purchases of products or services sometimes demonstrate status to match the wealth and implied superiority. Elegant dresses, expensive watches and cars etc. are considered symbols of status in many cultures.

5. 'Socialisation' refers to the process by which new members learn the group's system of values, norms and expected behaviour patterns. When an individual leaves one job and joins another organisation, she/he must learn the informal rules and expectations from the work groups, besides the formal rules and expectations.

Influence and Types of Reference GroupsInformational Influence

• Reference groups and other influence sources can exert informational influence

by offering information to help make decisions. For example, chat-groups on the

Internet often provide information on subjects such as Internet travel sites. This

type of influence occurs when a consumer accepts information as credible from a

reference group member and believes that the information will enhance

knowledge about product choice.

• Informational influence is based on either the similarity of the group's members

to the individual or the expertise of the influencing group member. For instance,

an individual may notice several members of a given group using a particular

brand of sports shoes.

• Normative InfluenceNormative Influence– The social power of reward and punishment that produces behavioral

compliance but may not produce any private acceptance of the position advocated.

• Comparative InfluenceComparative Influence– The group does not attempt to set, or enforce, rules for your

behavior, but only serves as a standard you choose for comparison.

Perceived Nature of Objectives source Type of Behaviour influence characteristics power

Informational Knowledge Credibility Expert Acceptance

Comparative Self-maintenance Similarity Referent Identification and enrichment

Normative Reward Power Reward or Conformity coercion

Types of Reference Group Influences

Informational influence is likely to be more important when consumers perceive financial, social, or performance risk in buying a product.

(a) Actual referent is a “typical” consumer (b) Symbolic referent The famous cricketer

Cont….

Applications of Reference Group InfluencesMarketers employ informational, comparative and normative group influences to develop marketing communication strategies.

Advertising often makes use of informational influence through expert spokespersons who communicate information about product features and performance. One approach employed is to use a character posing as an expert, such as a doctor for commonly used remedies, or the engineer for technical products.

Advertising applies comparative influence by using either an actual referent in the form of a "typical consumer" or use a celebrity as a symbolic referent with whom consumers identify because she/he is likeable or attractive. The "typical consumer" (Lalitaji of Surf ad) persuades consumers that people like themselves have used the advertised product (a)). The typical consumer is a referent because she/he mentions common needs and problems faced by the target group members. In case of symbolic referent, the ad takes advantage of her/his fame in some area of activity and not her/his expertise in the product category. The ad for Fiat Palio uses Sachin Tendulkar as a symbolic referent (b)).

Cont….

The Nature of Social Class1. Social classes are based on many components and not only on income and occupation, though income and occupation influence the determination of social class in many developed and developing economies.

2. Social classes are hierarchical that is, from high status to low status. Based on status criteria, individuals may be placed within a class on this hierarchy. The members of one specific social class perceive the other class either as higher or lower in status.

3. Social classes restrict behaviour and interaction between the classes is limited. Generally, members of a social class feel more comfortable and find reinforcement of shared values and behaviour patterns.

4. Social classes are homogenous. Based on similarity of factors such as education, activities, interests, opinions, attitudes and other behavioural patterns, social classes are viewed as homogenous divisions of a society.

5. Social class are dynamic and social stratification can be of 2 types:

Closed System

Open System

Social class (also referred to as social standing) means societal rank, which is one's position relative to others on one or more dimensions valued by society. Social class is based on demographic variables that others in society aspire for and hold in high esteem. These characteristics precipitate unique behaviours.

Socio-economic Social Uniquefactors class behaviours

Education Upper class PreferencesOccupation Middle classIncome level Lower-middle Purchases

Ownership classHeritage Lower class Consumption

Symbols of StatusConsumers buy products not only for what they can do but also for what they mean, because products or services are seen to possess personal and social meanings in addition to their functional attributes.

Conspicuous consumption refers to the tendency of the affluent class to demonstrate upper-class membership through their possessions.

Marketers use status and prestige appeals based on the following assumptions:

1. The need for self-esteem is universal. Everybody desires to be admired, acknowledged and respected by others.2. Consumers believe that their purchases of products or services reflect prestige and status.3. The expression and satisfaction of need for prestige varies across cultures.4. A marketer must communicate product prestige in a way that is culturally suitable for the target audience.

Social Class Categories

1. Upper2. Upper-Middle3. Middle 4. Lower-Middle5. Lower

The most general categorisation of social class structure can be put under three groups: 1. Upper class2. Middle class3. Lower class

CULTURE

• Knowledge• Art• Music• Language• Religion• Social customs• Food• Festivals

• CultureIt is a detailed examination of the character of the total society, including such factors as language, knowledge, laws, religion, food customs, music, art, technology, work patterns, products, and other artifacts that give a society its distinctive flavor. In a sense, culture is a society’s personality.

Culture is the sum total of learned learned beliefs, values, and customs that server to direct the consumer behavior of members of a particular society.

• SubcultureIt is a distinct cultural group that exists as an identifiable segment within a larger, more complex society.

Cross-cultural Influences

• The theme of cultural influences in a given country has two variations.

Cross-cultural influences and sub-cultural influences.

• Cross-cultural analysis helps marketers determine to what extent the consumers

of two or more nations are similar or different. The greater the similarity between

consumers, the more feasible it is to use relatively similar strategies in each

country.

Age SubculturesConsumers undergo predictable changes in values, lifestyles, and consumption patterns as they move through their life cycle.

Four Major Age Trends

• Baby Boomers• Generation X• Generation Y • Elderly

Categories1. Nationality2. Religion3. Geographic region4. Race

5. Age6. Gender7. Occupation8. Social class9. Ethnicity

ExamplesJamaican,Vietnamese,FrenchMormon, Baptist, CatholicNortheast, Southwest etc.Pacific Islander, Native American,

Caucasian.Senior citizen, teenagerFemale, maleBus driver, mechanic, engineer.Lower, middle, upper.Similar values and customs.

Rebecca Piirto has reported a study that surveyed more than 15,000 adults in 14

countries on five continents to identify global consumer segments sharing attitudes,

values and actual buying behaviour, blurring national boundaries and cultural

variations.

1. Strivers

2. Achievers

3. Pressured

4. Adapters

5. Traditional

Aspects of Sub-cultures

The influence of sub-culture on consumer behaviour depends on factors such as

sub-cultural distinctiveness, sub-cultural homogeneity and sub-cultural exclusion.

Sub-cultural distinctiveness

Sub-cultural homogeneity

Sub-cultural exclusion

Sub-cultures may be based on religion, region, language, age, gender and many

other differences. As in most other countries, one may easily notice several sub-

cultures in India. Out of several sub-cultures, only some are important from the

marketers' point of view for formulating separate marketing programmes. Much

depends on the relevance of a product category to a particular subculture.

Religious sub-cultures: Religious groups

can be regarded as sub-cultures because

of traditions and customs that are tied to

their beliefs and passed on from one

generation to the next.

Ad based on Religious Beliefs of the Largest Sub-culture in India. Durga, the Devi is believed as the destroyer of all evils.

Regional sub-cultures: Distinct regional sub-cultures arise due to climatic conditions, the natural environment and resources, language and significant social and cultural events. Such groups can be identified as having distinct and homogenous needs, tastes, lifestyles and, values.

Targeting consumers in the Hindi-speaking belt of North India Cont….

Excel Books8– 110 Consumer Behaviour (2nd Edition) Satish K Batra / S H H Kazmi

Part IIConsumer AttitudesC8

Copyright © 2008, Satish K Bhatra, S H H Kazmi

Charles D. Schewe has recommended a number of guidelines to make communication effective with older people: 1. Keep the message simple2. Make the message familiar3. Make the message concrete4. Take it point by point5. Give preference to print media6. Supply memory aids7. Make good use of contextTo develop successful adverting to this group, marketers should:1. Include older consumers in focus-group research in order to learn about

their motivations and attitudes.2. Hire older copywriters to provide new perspectives on this segment.3. Incorporate older models in advertisements in a genuine and typical way.4. Let the older buyers know the product will appeal to them.

The Power of Reference GroupsSocial Power

Referent Power

LegitimatePower

InformationPower

ExpertPower

CoercivePower

RewardPower

Types of Reference

Group Power

BUYING BEHAVOUR

• THERE IS A DIRECT RELATION BETWEEN BUYING DECISION AND THE END CONSUMER BEHAVOUR

• COMPLEX--CUSTOMER DEVELOPS A BELIEF ABOUT A PRODUCT

--AN ATTITUDE DEVELOPS AROUND THIS BELIEF

--FINALLY, A DECISION IS ARRIVED AT AFTER CAREFUL CONSIDERATION

• USUALLY NOTICED FOR PRODUCTS WHICH ARE EXPENSIVE, RISKY AND PURCHASED RARELY.

BUYER BEHAVIOR-HABITUAL• There are several products that consumers buy without much

involvement

• They are generally not brand conscious towards products purchased frequently and which are low priced.

• If they are buying a particular brand, it is only because of habit

• Marketers ,therefore ,believe that price and sales promotions are quite effective in pushing such products

• The marketing strategy therefore revolves around

• a) Linking products to a specific issue Colgate for bad breadth

• b) Linking the product to a personal situation-Bournvita to children’s health

• c) Designing ads which evoke strong emotions

• d) Adding new features to the existing product

BUYING BEHAVIOR-VARIETY SEEKING• In many situations while the involvement is low, there may be a lot of

brand differentiation.

• The consumer has a general idea about the product. He buys the product without much forethought and evaluation.

• He then tries the product and evaluates it accordingly.

• He may continue with the product or may experiment with another.

• His decision to switch may be • a) Based on dissatisfaction with the product• b) Need for variety.

BUYING ROLES• INITIATOR-The person who initially suggest the idea of purchase

• INFLUENCER-The person who’s views are sought in decision making process

• DECIDER-The person who decides on any aspect of purchase decision-when, where, how much, at what cost etc

• BUYER-The person who actually buys the product

• USER- The person who actually uses the product

STAGES IN BUYING DECISION PROCESS

• --PROBLEM RECOGNITION

• --INFORMATION SEARCH

• --EVALUATION OF ALTERNATIVES

• --PURCHASE DECISIONS

• --POST PURCHASE BEHAVIOR

• -- POST PURCHASE SATISFACTION

• -- POST PURCHASE ACTIONS

• --POST PURCHASE USE AND DISPOSAL

PROBLEM RECOGNITION• The process begins when the consumer realizes that he has a need

.Not satisfying that need is causing a problem to him.

• This need can be triggered by

• External Stimuli Internal Stimuli

• Marketers must therefore know what type of needs are triggered by various situations and stimuli.

INFORMATION GATHERING• The consumer would then like to collect all the information necessary to

satisfy the need. He will collect all the information he can about the prospective need.

• --To know about the product category

• --To know all the products in the category

• --To compare various attributes of different brands.

• --As the consumer cannot possibly gather ALL the information about All the brands, he concentrates on a set of brands called Awareness Set;from these the consumer selects a smaller group of brands called Consideration Set.

EVALUATION OF ALTERNATIVES• There is no set model for evaluation of alternatives• Broadly speaking• Consumer wants to satisfy a need

• Looks for certain benefits from the product

• Seeks a set of attributes that can maximize the benefit

• These attributes may be different for different products; different customers may look for different attributes.

• Consumers attach different importance to different attributes.

• Consumers generally go for those brands that have maximum attributes.• Consumers develop some beliefs about the product and this constitutes the

brand image.

PURCHASE DECISIONS• At this stage the consumer is at a transition stage from PURCHASE INTENTION

to PURCHASE DECISION

• He may be affected by two factors• --Attitude of others

• Intensity of negative feelings His own inclination to be of others influenced by others

• --Totally unanticipated factors e g accident, loss of job, financial mishap• sharp price rise.• The consumers decision to delay, avoid ,a purchase decision varies directly

with the perceived risk, which in turn varies with the amount of risk involved.•

POST PURCHASE BEHAVOUR,POST PURCHASE SATISFACTION, POST PURCHASE ACTIONS

• The marketers job does not end with sales.He has to know about the reaction of the consumer

• Greater the extent to which the products perceived performance meets the consumers expectation, greater is the satisfaction with the product.

• If the performance exceeds the expectation, the customer is delighted

• Marketers therefore have to attend to the post purchase reactions of the customer.

• Opinion Leadership

• Opinion leaders are those people who, in a given situation, are able to

exert personal influence. They are the ones most likely to influence others

through word-of-mouth communication because others seek advice and

information from them.

• Opinion leaders can informally influence the behaviour of consumers

towards products or services, either positively or negatively. If they are

satisfied with a product and like it, their word-of-mouth communication

can be helpful in ensuring its success; their dissatisfaction and dislike can

exert more influence in its failure.

The changing structure of family Three other basic functions provided by the family are particularly relevant to a discussion of consumer behavior.

These include:• Economic well being • Emotional support • Suitable family lifestyles

Cont….

Family Life Cycle Stages The concept of household or family life cycle is important for marketers in segmenting the market. In 1966, William Wells and George Gubar proposed eight stages to describe the family life cycle ("Life Cycle Concept in Marketing Research," Journal of Marketing Research, November 1966).

The following life cycle stages are typical of families:The bachelor stage: Young, single persons under the age of 35 years. Incomes are generally low since they have started careers, but they may have few financial burdens and sufficient discretionary income.Newly married: Young couples, no children. If both spouses are employed, they will have high levels of discretionary income.Full nest : Young married couples with youngest child under 6 years of age. There would be greater squeeze on income because of increased expenses on childcare. However, if they are members of a joint family, the level of discretionary income is likely to be high.Empty nest : Older married couples with no children living with them, parents still employed. Reduced expenses result in greater savings and highest discretionary income.

Nature of Household or Family PurchasesMuch depends on income limitations coupled with family responsibilities. Young bachelors as well as newly married young couples (assuming that both are employed) are quite likely to have significant discretionary income. Young bachelors are more likely to spend money on clothes and entertainment etc., while newly married couples will spend more on furnishings, time-saving home appliances, TV and music system etc. as they are establishing their new household. The family replaces many household items and also buys new appliances.

In case of non-traditional family lifecycle sequences, single parents are more likely to be females. In general, divorced women face significant decrease in their financial resources and this influences their buying patterns. Single parents are compelled to spend much less time with children and are likely to spend more money on day-care services for children and toys.

Cont….

Nature of Family Decision-MakingWhen two or more family members are directly or indirectly involved in the decision-making process, it is called family decision-making. Such family decisions differ from individual decisions in many ways. For example, if we consider the purchase of a bicycle for a child, some of the relevant aspects to think about can be: who recognises the need for bicycle? How a brand is selected? What role the concerned child plays?

Some family purchases are inherently emotional and affect the relationships between family members. The decision to buy a new dress, a toy, or a bicycle for the child is more than simply a routine purchase.

We have already seen the different purchase roles in the opening chapter of this book: the initiator, the gatekeeper or information gatherer, the influencer, the decider, the buyer and the user(s).

Cont….

According to Jagdish N. Sheth, joint decision-making is more likely under four conditions:

1. A joint decision is likely to be taken under such circumstances to reduce the

uncertainty and the risk. For example, the purchase of a house for the family

will most likely be a joint decision, as it would involve financial, social and

psychological risks.

Initiator Gatekeeper Influencer Decision Buyer User(Need (Information (Evaluation of maker (Purchase) (Consumption recognition)1 search) alternatives) (Decision & evaluation)

to buy)

Joint Decision Roles

Cont….

2. When the buying decision is important to the household. Purchase decisions for low-involvement products are mostly made individually. High-

involvement items such as expensive appliances etc. are generally purchased in consultation with other family members. Importance of most

high-involvement decisions is generally related to some kind of perceived risk.

3. Certain demographic factors encourage joint decision-making. i. Joint decisions are less likely among upper and lower socio-economic

groups. However, joint decision-making is quite likely among middle-income families.

ii. Joint decisions are fairly common among younger families, particularly during the first few years of marriage.

iii. As long as the family does not have any children, joint decision-making is more likely. Once children arrive, roles of spouses become more divided and the need for joint decisions decreases.

iv. If only one parent is employed, there are few time pressures and joint decision-making is more likely.

Cont….

Husband-wife Influences

Nature of Product

Traditionally, among different societies throughout the world, husbands are

regarded as providers of material support and leadership authority within the

family and wife is more likely to provide affection and moral support. Husbands

are viewed as dominant decision-makers for products such as financial services

and automobiles etc., while wives are regarded as decision makers for foods,

toiletries and small appliances etc. However, these roles have merged as an

increasing number of wives have started going into employment and changes in

family norms, particularly in urban areas.

Cont….

Nature of Purchase Influence

The differentiation of roles is believed to result from small group interaction.

Leaders that emerge take up either instrumental roles or expressive roles.

Leaders taking up instrumental roles are concerned with tasks that help the

group take decisions about its basic purpose or goal (also called functional or

task leaders). For example, decisions on budgets, timing and product

specifications would be task-oriented. Leaders with expressive roles facilitate

expression of group norms and provide the group with social and emotional

support in order to maintain intra-group cohesion such as design, colour and

style, reflect group norms.

Cont….

Family Characteristics

The third reason for variation in relative influence of husband/wife relates to family characteristics. Though husband and wife tend to dominate decisions for certain product categories, the degree of their dominance may vary within different families.

Research shows that the influence of the husband will generally be more in making purchase decisions than wife when:

1. Husband's level of education is higher than his wife.

2. Husband's income and occupational status are higher than wife's.

3. His wife is not employed.

4. The couple is young and at an earlier stage of family life cycle.

5. If the couple has a greater than average number of children.

Cont….

(a) Targeting wives for instrumental roles (b) Targeting husbands for non-traditional roles

Cont….

Parent-child Influences

Children are playing an increasingly important part in family decision-making. No

sooner do they posses the basic communication skills needed to interact with

parents and other family members, they start their "I want" this campaign. In the

context of consumer behaviour, parent-child relationship is viewed as a situation

of influence and yield. Children strive to influence parents to buy something and

parents yield to their demand.

Older children with greater media exposure are more likely to directly influence

decisions concerning purchase of food items, personal care and beauty

products, TV, stereo and computer etc. Dual-income households foster greater

self-reliance among children. As a result of this, they are likely to influence

decisions for products that the whole family consumes.