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Submitted to Dr. Michael Coulburn
(Professor)
Salford Business School
Date 9th
Aug 2015
Type of Assignment Individual
Submitted by
Name of Student Sanjay Vaid
Roll No 00436743
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Table of Contents
CONTEMPORARY ISSUES IN CONSUMER RESEARCH........................................................... 1
MID TERM ASSIGNMENT: CULTURAL INFLUENCE ..................................................................... 1
INTRODUCTION.................................................................................................................... 5
CULTURE:............................................................................................................................ 5
THE CUSTOMER’S CULTURE:.................................................................................................. 7
CUSTOM ER DIV ERSITY: ........................................................................................................ 7
THE AGE INFLUENCE ON CULTURE AND CONSUMPTION:............................................................ 7
GENDER AND SEXUAL INFLUENCE: ......................................................................................... 8
REGIONAL INFLUENCES: ....................................................................................................... 9
ETHNIC INFLUENCES:...........................................................................................................10
RELIGIOUS INFLUENCE:........................................................................................................10
OCCASION:.........................................................................................................................11
EXTENDED/LIMITED FAMILY: .................................................................................................11
SOCIAL CLASS INFLUENCE ..................................................................................................12
SOCIAL CLASS INFLUENCE: ..................................................................................................12
DETERMINANTS OF SOCIAL CLASS:........................................................................................13
CONSPICUOUS CONSUMPTION AND STA TUS SYMBOLS: ...........................................................14
COMPENSATORY CONSUMPTION: .........................................................................................14
THE CONSUMPTION PATTERNS OF SPECIFIC SOCIAL CLASS:....................................................14
HOUSEHOLD INFLUENCE: .....................................................................................................14
ROLES THAT HOUSEHOLD PLAYS:..........................................................................................15
PSYCHOGRAPHICS: VALUES, PERSONALITY, AND LIFESTYLES: .................................................................16
VALUES: ...............................................................................................................................16
AGE AND VALUES: ...............................................................................................................17
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MEA NS-END CHAIN ANALYSIS: .............................................................................................17
PERSONALITY .....................................................................................................................17
PSYCHOANALYTIC APPROA CHES: .........................................................................................18
TRAIT THEORIES: ................................................................................................................18
PHENOMENOLOGICAL APPROA CHES: ....................................................................................18
SOCIAL-PSYCHOLOGICAL THEORIES:.....................................................................................18
BEHAVIORAL APPROA CHES: .................................................................................................18
PERSONALITY AND CONSUMER BEHAV IOR: ............................................................................18
ILLUSTRATION OF SEAGRAM ROYAL STAG .............................................................................18
SOCIAL INFLUENCERS:........................................................................................................19
OPINION LEA DER: ................................................................................................................19
CONSUMER CHARACTERISTIC: .............................................................................................20
GROUP CHARACTERISTICS:..................................................................................................20
FOOD SAFETY, HYGIENE AND ETHICS:....................................................................................20
MCDONALDS LOCALIZATION TO MEET CULTURAL DEMANDS: ..................................................20
SUGGESTION: .....................................................................................................................21
WORKS CITED.....................................................................................................................22
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Introduction
Consumer behavior is the field of understanding how the consumer buys and what
influences their buying decisions at its core. “It is a rich arena of study drawing on
the perspective from disciplines as wide ranging as economics, psychology,
sociology, cultural anthropology and other.” (Fahy & Jobber, 2012)
Culture:
We need to consider culture to understand consumer consumption pattern. The
impact of cultural influence is very strong on consumer buying behavior and how
they perceive a product. Companies when venturing into global business have to
decide the basis on cultural factors on their adoption of the product in terms of
localization to meet consumer aspiration and demand.
“Culture refers to learned norms based on the values, attitudes, and the belief of a
group of people.” (Daniels, et al., 2009)
As per Michel R. Solomon, “Culture is a society’s personality. It includes both
abstract ideas, such as values and ethics and material objects and services, such as
automobiles, clothing, food, arts and sports a society produce.” (Solomon, 2011).
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Figure 1.0 A Theoretical Model of Cultural Influence onBehavior. Source: (Karahanna, et al.,
2005) (Schiffman& Kanku,1997)
Culture is also not static it's evolving continuously, and with the introduction of the
internet and its wide accessibility, world is becoming boundary-less. When it comes
to people to people and culture to culture contact, and it is impacting on cultural
acceptance and how its perceived and accepted.
Personality
Traits
Subjective
Culture:
Regional
Ethnic
Religious
Linguistic
National
Professional
Organizational
Groups
Cognitive
Beliefs
Practices
Values
Attitude
Social
Norms
Behavioral
intentions
Behavior
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The customer’s culture:
Customer Diversity:
The Age influence on culture and consumption:
Population age factors data can help markets to make a decision based on taste
pattern. There are four major age groups a) teens and Generation Y, also called
“millenniums,” b) Generation X, c) boomers and c) Senior. ‘The basic logic is that
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people of the same age are going through similar life experiences and, therefore,
share common needs, symbols and memories, which, in turn, may lead to similar
consumption patterns. (Hoyer, et al., 2008)
In India, the population age group distribution is skewed. More than 50% of the
populations are fairly young and 55% of the workforce. There is another large based
waiting to come into the workforce, which would make the dependency ratio low.
Thus, there would be high income in the household and which would affect their
consumption pattern.
The Rural-Urban Divide:
The Rural and Urban population also divide the taste and preference of the
consumer. In a country like India, 70% of the population lives in villages
having different consumption preference than the rest 30% living in cities. But
the rural and urban landscape is also changing with more people migrating
from villages to cities affecting household both in origin location and also
migrated household. Also, the urban landscape is also changing, with tier 2,
tier 3 and new cities with unfolding the potentials and affecting their
consumption trends.
Gender and Sexual influence:
“Gender refers to a biological clarification (male or female), and sexual orientation
reflects a person’s preference towards a certain behavior.” (Hoyer, et al., 2008)
The gender ratio in term of the population in India is skewed with woman population
undergoing demographic and psychographic profile change. The population of
working woman has increased, and this has led to more out of home mothers
creating new and changing consumption habits.
According to Hofstede’s 4+1 dimension model of national culture, that includes
power distance, uncertainty avoidance, individualism, masculinity and time
perspective. “Masculinity cultures exhibit different roles for men and women and
perceive any this big as important. The feminine culture value ‘small as beautiful’ and
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stress quality of life and environment over materialistic ends.” (Hollesen & Banerjee,
2010)
Regional Influences:
The region of the world in which they resides influences consumption patterns of
customer. This could be due ethnic, religious, economical, agricultural or
geographical reason. Factor movement or people movement also plays an
important role, for example, the fastest growing restaurant cuisines in the United
Sates are Thai, Indian, Vietnamese and Cajun. That's predominantly due to the
migration of people. Also, certain countries are associated with certain products, for
example beer in the United Kingdom and sushi in Japan. Consumption of certain
products is forbidden in certain countries; for example, drinking alcohol and
consumption of pork is prohibited in Muslim countries and beef in India. People from
Afghanistan prefer Kebab with no spices, but with only salt added for marinating,
whereas in Indian prefers Kebab Marinated in species and curries.
“Marketers need to understand global differences in consumption behavior so they
can alter marketing strategy, where necessary to appeal to specific regions and
countries.” (Hoyer, et al., 2008)
Many companies have adjusted the market positioning and product offerings by
localization. For example, KFC and Pizza Hut offer rice bowl which is adaptation of
local cuisine Biryani both in vegetarian and non-vegetarian option.
Regional influences in India vary from one state to another. And differs in terms of
culture, languages and religion that impacts the consumption behavior. There are 28
states and seven union territories, 18 official languages and 1652 distinct dialects. In
terms of religion there are six main religions, Hinduism, Islam, Christianity, Sikhism,
Buddhism and Jainism.
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Ethnic influences:
Ethnic influences are another major factor that affects consumer behavior. “The
Member of this ethnic group share a common heritage, set of belief and religion and
experience that set them apart from other society.” (Hoyer, et al., 2008)
India has a diverse ethnic population with more than 80 languages and 120 dialects
spoken in the country.
KFC and Pizza Hut in India:
KFC and Pizza Hut, both owned by Yum Brands, have done well in India. They
customize their American-Style Menus to the taste of consumers in specific cities,
with local ingredients and flavors that appeal to each sub-segment.
Religious influence:
Another type of subculture is based on religious beliefs. ‘Religion provides people
with a structured set of beliefs and values that serve as a code of conduct or guide to
behavior.’ (Hoyer, et al., 2008)
Religious beliefs can prohibit the consumption of certain products. Common
prohibitions are on the consumption of liquor, Tabaco, and caffeine, including Cola.
Orthodox Jews do not eat pork or shellfish, and only consume those meat and
poultry products certified as kosher. Muslims do not eat pork or drink liquor. Catholic
consumers may choose to not consume meat on Fridays during the season of Lent.
Most Hindus and Jains are vegetarians. Hindu and Sikhs do not eat beef. Sikhs do
not consume tobacco. Also, the colour green has significance for Muslim and orange
or red for the Hindus, which has led to its frequent use in product packaging for
these groups.
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Occasion:
A lot of package confectionery, food products are exchanged during occasions like
Festivals, birthdays, Marriages, etc. as gifts. In India in most such occasion sweets
are exchanged.
Extended/limited family:
Family
The fact that a family is a nuclear family with husband, wife and their children. Or has
extended family that includes their parents, grandparents, etc. also play a significant
role in consumer choice and consumption in terms of food products.
The role and importance of family in India are far more than an individualistic society.
Although due to modern day compulsion children live away from their parents, but
they consult them, and their decision is a collective decision.
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Social Class Influence
Social Class influence:
Many societies in the world have social class. The social class hierarchy confers
higher status to some classes of people than to others.
“Social Stratification is the division of members of the 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.” (Schiffman &
Kanku, 1997) (Nair, 2009)
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“A status-oriented society is more likely to prefer “quality” or established and
prestigious brand names and high-priced items to functionally equivalent items with
unknown brand names or lower prices.” (Mooji & Hofstede, 2002) (Hawkins, et al.,
2013)
Determinants of social class:
Marlow’s hierarchy of needs, represented as a pyramid with the most basic needs at
the bottom. (Fahy & Jobber, 2012)
Maslow’s hierarchy of needs is a theory that the author finds indicate the reasons for
different consumption pattern based on class, which is further indicative assessment.
“Status is related to the concept of a power index that refers to the degree to which
people accept inequality in power, authority, status and wealth as natural or inherent
in society.” (Shavitt, et al., 2006) (Hawkins, et al., 2013)
Some of the determinants of social class are Income, Occupation, Education,
inherited status and earned status that affect consumer consumption choice and
pattern.
Self
Actulaisation
Esteem
Love/belonging
Safety
Physiological
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Conspicuous Consumption and status Symbols:
“Conspicuous consumption, also related to social class, is an attempt to offset
deficiencies or lack of esteem by devoting attention to consumption.” (Hoyer, et al.,
2008). Conspicuous consumption product or services are valuable to their owner
because of what they tell others. This can be dining at a high-end restaurant or
possessing a premium scotch or wine.
In countries like Brazil or India dining at Pizza Hut, McDonalds or Burger King is
considered a status symbol for lower middle class.
Compensatory Consumption:
This type of consumption is an attempt to offset deficiencies or lack of esteem by
devoting attention to consumption.
Case of Radisson Kebab Factory:
The Great Kebab Factory, a fine dining restaurant in Radisson hotels owned by the
Carlson Rezidor Hotel group. They have now opened a stand-alone restaurant for
customers who might get intimidated with five-star hotel appearances, look and price
perception. And in its place would prefer a more toned down version of the
restaurant in the hotel. This concept of the standalone restaurant is open by
Radisson and is located in the suburbs of New Delhi.
The consumption Patterns of Specific Social class:
There are typically four main classes 1) The upper middle class 2) the Middle class
and the working class 4) Homeless
Household influence:
“A family is usually defined as a group of individuals living together who are related
by marriage, blood or adoption.” (Hoyer, et al., 2008)
The factor the effect family consumption is a nuclear family, extended family, a family
with or without kids, married or unmarried, single or divorced, etc. and some earning
member in the family.
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“Household is a broader term that includes a single person living alone or a group of
individuals who live together in a common dwelling, regardless of whether they are
related.” (Hoyer, et al., 2008)
Roles that household plays:
There can be more than one person responsible for acquisition and consumption.
Other than this there can be spouse’s roles in the decision-making. Children
predominantly are inducers in consumption decision.
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Certain cultures like India it’s the wife, mother or sisters who make most of the
decisions related to food consumption and purchase.
Psychographics: Values, personality, and Lifestyles:
Values:
Value serve as a standard guide our decisions and behavior over time. Value varies
in specificity at the broader level, it global values, which represents the individual
value system.
Individuals in different countries are exposed to different cultural values, which lead
to cross-cultural differences in values.
As pointed out earlier in this essay Geert Hofstede other two dimensions play a
significant role in cultural values.
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- Individualism verse collectivism: This is the degree to which a culture is
individualistic as against collective.
- Uncertainty Avoidance: The extended to which a culture prefers structured to
unstructured situations.
Different social class upholds different values that affect their consumption pattern.
Age and Values:
A particular generation might have different and common values than that of another
generation, which might affect their consumption pattern.
Means-End Chain Analysis:
Marketers can use mean-end analysis to understanding the attributes they consider
important and gain better insight of consumer values. They can use this information
zero in on the values that drive a consumer decision.
Case of Miller light beer:
Miller Light beer is position has low-calorie beer appealing to the health-conscious
consumer.
The distinctive product positioning advertisement says, “Less filling, low – calorie
beer with no sacrifice in taste.” They used ex-athletes in these advertisements to
deliver the message.
Personality
Individuals with comparable background hold similar value. However, people do not
always act the same way.
“Personality consists of the distinctive patterns of behavior, tendencies, qualities or
personal dispositions that make an individual different from another individual and
lead to a consistent response to environmental stimuli.” (Hoyer, et al., 2008).
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Psychoanalytic Approaches:
Personalities drive from a set of dynamic, unconscious and continuous struggle
within the mind.
Trait Theories:
As per trait theory, personality is composed of characteristics that describe and
differentiate individuals. Psychologist Carl Jung developed traits theory and
categorizes individuals as introverts and extroverts.
Phenomenological Approaches:
This theory proposes that personality is predominantly shaped by an individual’s
interpretation of life events.
Social-Psychological theories:
As per this individual theory, Individual’s action in a social situation is to meet their
needs.
Behavioral Approaches:
This approach proposes that difference in personality, is an outcome of how
individuals have been awarded or punished in the past.
Personality and Consumer Behavior:
Markets have often designed advertisement message to appeal to a particular
personality
Illustration of Seagram Royal Stag
Seagram Royal Stag a Whisky brand uses the tagline “It’s your moment, Make it
Large” this is directed towards achievers.
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Social Influencers:
Opinion leader:
Opinion leaders are part of a general category of gatekeepers; they act as an
information broker between mass media and the views and behaviors of an
individual or a group.
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Consumer Characteristic:
The personalities of some consumer lead them to be readily susceptible to influence
by others. “Group cohesiveness and group similarity also affect the degree of
normative influence,” (Pamela , 2001) (Phelps, et al., 2000) (Hoyer, et al., 2008)
Group Characteristics:
The characteristic of a group influences the degree of normative influence.
Marketers can create normative influences through an advertisement to demonstrate
the benefits that can follow from the product use or nonuse.
Case of Saffola:
Saffola a healthy cooking oil Advertisement provides normative influence by
identifying the way in which homemaker woman takes care of the house and family
members.
Informational influence:
Reference group and other influence sources can exert information influence by
offering information to help make a decision.
Other influences are by word of mouth and viral marketing.
Food Safety, Hygiene and Ethics:
Food Safety and Hygiene is a universal concern across all cultures, use of harmful chemicals,
pesticides in Vegetables, Poultry and package product cause harm to consumer health., and
so does un-hygienicfoodand service environment.
Treatment of animals and environment is another ethical concern that influences
consumers, on how they perceive brands and influencestheirbuyingdecision.
McDonald’s localization to meet cultural demands:
McDonalds is one company that has localized to the product, positioning,
advertisement, and other marketing communication and yet not compromises its
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global standardization in term of quality. McDonald in India started their
operation1996 and offered vegetarian varieties like MacAloo Tikki Burger, Curry
Pans, Wraps pizza Macpuff and MacVegee today. They do not offer beef or pork
product taking into consideration religious sentiments in India. “In Japan market, they
renamed their well-known mascot Ronald McDonald to Donald McDonald as The
Japanese language does not include R sound. They have localized their menu in
Japan and introduced corn soup and green tea milkshake. In Sweden McDonald’s
developed a new package using woodcut illustrations and a softer design to appeal
to the internet the consumers of the nation in food value and the outdoors.” (Monga
& John, 2002)
Suggestion:
- There is a high potential for offering products and services to the season
demands of occasions, festivals, etc. Today, a working class person’s leisure
time at hand is limited, they need to make a choice between where to devote
time. Companies like McDonald or Pizzahut can provide options for the
consumer to arrange get-together to exchange gifts during festival or
occasions at short notice. They can also provide with offering to buy flowers
or gifts in store. That would help people save travel time and enjoy theses
occasion. This service will have high demand in cities.
- The second suggestions are to offer this product in places like trains, long
route buses, Gymnasium, college and office canteens and flights as modern
consumer consumption is happening in these places.
- Offer healthy products, display the nutrition facts on the packaging and align
with similar health cause propagation groups on social media.
- They should offer their product via social media Facebook etc. using location
service and book order via e-commerce online.
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