Consumer behaviour external factors

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This ppt would be useful for those who wants to understand what external factors affect consumer behavior.

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  • 1. SIMPLE MODEL OF CONSUMER BEHAVIOR Motives Attitudes Needs Consumer Purchase Decision Learning Family Business Perception Personality Internal Factors Economic External Factors
  • 2. External Influences in Consumer BehaviorPREPARED BYMATHEW LAWRENCE
  • 3. 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.
  • 4. INFLUENCING FACTORS IN CONSUMER DECISION MAKING
  • 5. 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 groups 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.
  • 6. TYPES OF GROUPS
  • 7. 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.
  • 8. NATURE OF REFERENCE GROUP Status is the Norms’ are achieved or generally rules and ascribed position standards of that the individual behavior. holds. Norms Status Values are shared A groups influence beliefs among on its member group behavior is closely related to it power. Values Power Socialization refers to the process by Roles are functions which new that an individual members learn the hold in a group. groups system. Roles
  • 9. TYPES OF REFERENCE GROUP Membership Non-membership Positive Aspiration group membership Disclaimant group Dissociative group Types of Membership Informal Formal Positive Aspiration group Primary membership Secondary Disclaimant group Dissociative group Types of aspiration group Anticipatory Symbolic
  • 10. 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.
  • 11. 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.”
  • 12. 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.
  • 13. 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
  • 14. EXAMPLES FOR SUB CULTURE 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 50 Plus. People Women Children, Teenagers, Youth, Married women, etc. Caste Muslims, Christians, Hindu, etc.
  • 15. 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.
  • 16. FUNCTIONS OF FAMILY Economic Interpersona Well Being l Skills Provides Emotional Religious Support Values Morals and Suitable Ethical Life Style Values Social Relationships
  • 17. 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 Older single person Survivor Income Expense
  • 18. FAMILY/HOUSEHOLD DECISION MAKING PROCESS Influencer (Children) Communication targeted at Children Initiator Decision (Parents, Maker Purchaser Children) (Parents, (Parents) Children) Communication targeted at Parents User (Parents, Information Children) Gathering
  • 19. SOCIAL CLASS Some form of class structure or social stratification has existed in all societies throughout human history. A consumers 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.
  • 20. SOCIAL CLASS CATEGORY Life-style Orientations & Purchasing Tendencies of the Different Social Classes. Social Class Life-style Orientation Purchasing Tendencies Upper Class Good taste Quality merchandise Graceful living Expensive hobby and recreation Good Things in life equipment Individual expression Travel Interest in arts and culture Art Middle Class Respectability Items in fashion Conformity Items related to self presentation social esteem Nice clothing, and home items. Working Class Fun oriented Newest appliances Focus on Possessions Sporting events Work related life Food items Lower Class Close family relationships Readily available products Not interested in world affairs Status symbols Neighborhood oriented
  • 21. “UPWARD PULL STRATEGY “- TARGETED AT MIDDLE CLASS Positionin Aspiration g Prefer s Upper Products To belong class consumed Middle to symbolism by upper- Class upper- for middle middle middle class class class products
  • 22. 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.
  • 23. OPINION LEADERSHIP FLOW OF INFORMATION
  • 24. SITUATION IN WHERE OPINION LEADERS ARE CONSIDERED
  • 25. Assignment- PresentationIdentify a social media platform which is influenced by certain reference groupsand opinion leaders?Further also attempt to analyze how social networking communities areproviding beneficial- compared to conventional advertising strategies increating brand awareness in the market?