ConsumerPurchaseDecision

Motives

Personality

Needs

Perception

Learning

Attitudes

Bu

sin

essCultu

re

Economic

Fam

ily

Social

External Factors

Internal Factors

SIMPLE MODEL OF CONSUMER BEHAVIOR

PREPARED BY

MATHEW LAWRENCE

External Influences in Consumer Behavior

INTRODUCTION

Consumer purchasing decisions are often affected by factors that are outside of their control but have direct or indirect impact on how we live and what we consume.

Consumers are faced with many external influences, including an individual’s culture, subculture, household structure, and groups that he/she associates with.

Marketers and business owners call these external influences because the source of the influence comes from outside the person rather than from inside.

Today consumers are faced with an array of product selection, and competition is fierce among companies. This is why your understanding of consumer behaviour is vital to the success of your business.

Both internal and external factors are inter connected and work together to assist the consumer decision making process.

INFLUENCING FACTORS IN CONSUMER DECISION MAKING

GROUP BEHAVIOR

Man is social animal who loves to be in groups. Groups represent two or more individuals who share a set of norms, values, or beliefs and interact to accomplish individual or mutual goal. Almost all consumer behavior takes place in a group setting of some

sort. A group's norms cover usually all the important behavioural aspects for the functioning of that group and breaking those rules can bring up

penalties. When do Group Exert Influence?- The group influence on an individual’s

buying behavior depends on three factors- Attitude towards the group: This includes Pride, Status, etc. Nature of the group: This includes, Cohesive, Frequently interacting,

Exclusive membership. Nature of the Product: This includes visibility of the product,

Uniqueness of the product. Examples: Hardly Davidson Bike group, Friends connection, Aluminas of

an institute, etc.

TYPES OF GROUPS

REFERENCE GROUP

A reference group is any person or group that serves as a point of comparison for an individual in forming either general or specific values, attitudes, or a specific guide for

behavior.

In marketing prospective, reference group are groups that serve as a frames of reference for individuals in their purchase or consumption decisions.

Often a distinction is made between group and reference group. Group is defined as two or more individuals who share a set of norms, values, or beliefs and have certain implicit and explicit relationship. Where as reference group is one whose presumed perspective or values are being used by an individual to take decisions.

Examples: Shopping with friends, family, educational decisions.

NATURE OF REFERENCE GROUP

Norms

Norms’ are generally rules and standards of behavior.

Values

Values are shared beliefs among group

Roles

Roles are functions that an individual hold in a group.

Status

Status is the achieved or ascribed position that the individual holds.

Socialization

Socialization refers to the process by which new members learn the groups system.

Power

A groups influence on its member behavior is closely related to it power.

Positive membership

Aspiration group

Disclaimant group Dissociative group

Membership Non-membership

Types of Membership

Positive membership

Aspiration group

Disclaimant group Dissociative group

Primary

Secondary

Informal Formal

Anticipatory

Symbolic

Types of aspiration group

TYPES OF REFERENCE GROUP

TYPES OF REFERENCE GROUP

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

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

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

Also an individual may also regard the membership in a specific group as something undesirable and to avoidable. Such a group is a dissociative group.

Primary Informal group: It includes family, peer group, friends etc.

Primary formal group: Business group, working colleagues etc.

Secondary Informal group: Women kitty party, sports group, etc.

Secondary formal: Only frequently meet are not so cohesive in nature.

CULTURE

Culture influences consumers through the norms and values established by the society in which they live.

It is the broadest environmental factor that influences consumers behavior.

Culture is inculcated- It is passed down from one generation to another through institutions such as family members and religion.

As culture evolves, it may be possible to associate benefits of a product or brand with new values or it may be necessary to change the product if that value is no longer gratifying the society. Example: Movies, TV serials, etc.

Definition: “Culture as the complex whole that includes knowledge, beliefs, art, law, morals, customs and any other capabilities and habits acquired by humans as a member of a society.”

CHARACTERISTIC OF CULTURE

Culture is invented: It cannot be viewed as something that just exists and is waiting to be discovered. People are responsible for inventing their culture. Culture is learnt: It is not biological feature or instinctive. The process of learning cultural values begin early in life largely through social interactions among families, friends etc. Culture is Shared: Culture by at large is shared by huge group of human beings, generally religion, language, etc. Culture satisfies needs: Culture offers order, direction and

guides societies in all phases of life by providing tried and trusted ways of meeting physiological, personal and social needs.

Cultures are similar but different : There are certain similarities among all cultures and many elements are present in all societies such as cooking, dressing, etc.

Culture is not static: Culture do change gradually and continuously. These change however may be very slow or very fast.

SUB CULTURE

A sub culture is a segment within a culture that share a set if meanings, values or activities that differ in certain respects from those of the overall culture.

Sub culture analysis enables the marketing manager to focus on beliefs, values, and customs shared by member of a specific sub group make them desirable candidates for special marketing attention.

Sub culture therefore can be defined as a distinct culture group that exists within a layer, complex society as an identifiable segments in terms of its beliefs customs and values.

Therefore sub culture are relevant units of analysis for marketing research.

Sub culture tend to transfer their beliefs and values from generation to generation. Example: Youths

Category Sub- Culture

Geography North Indian, South Indian, East Indian

Regional Gujarati, Marathi, Punjabi, Tamilians, Malayalees, etc.

Age Children, Teenagers, Youth, Working professional, etc.

Elderly People

50 Plus.

Women Children, Teenagers, Youth, Married women, etc.

Caste Muslims, Christians, Hindu, etc.

EXAMPLES FOR SUB CULTURE

FAMILY

Family is defined as a group of two or more people related by birth, marriage or adoption and residing together.

House hold is a family and any unrelated person residing in the same house and consuming food from a common kitchen at least once a day. Eg: Hostel

All families are households but all households are not families.

An individual’s immediate family members play an essential role in influencing his/her buying behaviour.

Family consists of Parent, Siblings, Spouse, Grandparents, Relatives, etc.

What an individual imbibes from his parents becomes his/her culture. What he sees from his childhood becomes his habit or in other words lifestyle.

Family by far is the most important reference group. It is also the most basic consumption unit for most consumer goods.

FUNCTIONS OF FAMILY

Emotional Support

Suitable Life Style

Social Relationshi

ps

Morals and

Ethical Values

Religious Values

Interpersonal Skills

Economic Well Being

Provides

FAMILY LIFE CYCLE STAGE

Bachelor stage

Young, single person <35

Income

Expense

Newly married

Young couples no children

Income

Expense

Full Nest I Young couples with <6 yrs children

Income

Expense

Full Nest II Young couples with 6-12 yrs children Income

Expense

Full Nest III Old married couples with dependent teenage Income

Expense

Empty Nest I Old married couples with no children living Income

Expense

Solitary Survivor

Older single person Income

Expense

Communication targeted at

Children

Communication targeted at

Parents

Influencer(Children)

Initiator(Parents, Children)

DecisionMaker

(Parents, Children)

Purchaser(Parents)

User(Parents,Children)Information

Gathering

FAMILY/HOUSEHOLD DECISION MAKING PROCESS

Some form of class structure or social stratification has existed in all societies throughout human history.

A consumer's social class refers to his or her standing in society. It is determined by a number of factors, including education, occupation and income.

While income is an important indicator of social class, the relationship is far from perfect since social class is also determined by such factors as place of residence, cultural interests and world-view.

Social Class is “defined as the division of members of a society into a hierarchy of distinct status classes, so that members of each class have relatively the same status and members of all other classes have either more or less status.

Social Class is often measured on the bases of: relative wealth, Power, prestige.

SOCIAL CLASS

SOCIAL CLASS CATEGORY Life-style Orientations & Purchasing Tendencies of the Different Social Classes.

Social Class

Life-style Orientation

Purchasing Tendencies

Upper Class Good tasteGraceful livingGood Things in lifeIndividual expressionInterest in arts and culture

Quality merchandiseExpensive hobby and recreation equipmentTravelArt

Middle Class RespectabilityConformitysocial esteem

Items in fashionItems related to self presentationNice clothing, and home items.

Working Class Fun orientedFocus on PossessionsWork related life

Newest appliancesSporting eventsFood items

Lower Class Close family relationshipsNot interested in world affairsNeighborhood oriented

Readily available productsStatus symbols

“UPWARD PULL STRATEGY “- TARGETED AT MIDDLE CLASS

Middle

Class

Aspirations

To belong to

upper-middleclass

Prefer

Products consume

dby upper-

middleclass

Positioning

Upper class

symbolismfor

middleclass

products

OPINION LEADERS HIP

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 influence the behavior of consumers positive and negative towards to the product. “Opinion leadership is the process by which one person (the opinion leader) informally influences the actions or attitudes or others, who may be opinion seekers or merely opinion recipients. In marketing context opinion leaders are those people who have

used the product by them self. Young consumers often take the assistance of opinion leaders in

there purchase. Opinion leadership is category specific – an opinion leader in one

product category is often an opinion seeker in others.

OPINION LEADERSHIP FLOW OF INFORMATION

SITUATION IN WHERE OPINION LEADERS ARE CONSIDERED

Assignment- Presentation

Identify a social media platform which is influenced by certain reference groups

and opinion leaders? Further also attempt to analyze how social networking

communities are providing beneficial- compared to conventional advertising

strategies in creating brand awareness in the market?