Module II [demographics and social starti.pptx

AMITY SCHOOL OF BUSINESS
Principles of Consumer
Behavior
MODULE II
BY
Dr. Ruchika Jeswal

Topics to be covered
• Demographics and social stratification
• Group influence on consumer behaviour: Social groups
and Reference Groups
• Family: Concept of Family Life cycle and influence on
consumer behaviour, Family Purchase decision
process.
2

Model of consumer behaviour
3

Demographics
• Demographics: It describes a population in terms of its
size, distribution and structure.
• Example: demographics of a high end coffee shop
crowd.
• Marketers frequently segment and describe markets on
the basis of demographics.
• Use this information to select appropriate media.
4

• Population Size and Distribution
• Occupation
• Education
• Age
5

Copyright © 2006
Pearson Education Canada Inc.
Social Class and Consumer
Behaviour

Social Stratification
• Societal Rank: One’s position relative to other’s on one
or more dimensions valued by society.
• Education, occupation, ownership of property, income
level and heritage influence your social standing.
• Social Class System: It can be defined as a
hierarchical division of a society into relatively distinct
and homogenous groups with respect to attitudes,
values and lifestyles.
7

Copyright © 2006 Pearson Education
Canada Inc.
11-8
Social Class
• The division of members of a society into a hierarchy of
distinct status classes, so that members of each class
have either higher or lower status than members of
other classes.

Canada Inc.
11-11
Social Comparison Theory
• states that individuals compare their own possessions
against those of others to determine their relative social
standing.

The Coleman Rainwater Social Class
Hierarchy
• Upper Americans
Upper-upper
Lower-upper
Upper-middle
• Middle Americans
Middle Class
Working Class
• Lower Americans
Upper-Lower
Lower-lower 12

Canada Inc.
11-14
Social Class and Social Status
• Status is frequently thought of as the relative rankings
of members of each social class
–wealth
–power
–prestige

Canada Inc.
11-15
Characteristics of Social Class
• Is hierarchical
• Is a natural form of segmentation
• Provides a frame of reference for consumer behaviour
• Reflects a person’s relative social status
• In Canada, individuals can up or down the social class
hierarchy

Canada Inc.
11-16
Status Consumption
• The process by which consumers actively increase
their social standing through conspicuous consumption
or possessions

Canada Inc.
11-17
What is Middle Class?
• The “middle” 50% of household
incomes Households made up of
college-educated adults who use
computers, and are involved in
children’s education
• Lower-middle to middle-middle based
on income, education, and occupation
(this view does NOT include upper-
middle which is considered affluent)

Canada Inc.
11-18
What is Working Class?
• Households with lower earnings; control more than
30% of the total income in the U.S.
• These consumers tend to be more brand loyal than
wealthier consumers

Canada Inc.
11-19
(continued)

Canada Inc.
11-20
Figure 11-14 (continued)
(continued)

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11-21
(continued)

Canada Inc.
11-22
(continued)

Canada Inc.
11-23

Canada Inc.
11-24
Social Class and Marketing Strategy
• Clothing, Fashion, and Shopping
– Where one shops
– External point of identification
• The Pursuit of Leisure
– Type of leisure activities differ
» continued

Canada Inc.
11-25
Social Class and Marketing Strategy
• Saving, Spending, and Credit
– Level of immediate gratification sought varies
• Responses to marketing communication
– Upper classes have a broader and more general view of the
world
– Regional variations in language rise as we move down the
social ladder
– Exposure to media varies by social class
» continued

Canada Inc.
11-26
Limitations of Social Class
• Social class is more difficult to measure than
income
• Many purchase behaviours are related more
to income than social class
• Consumers often use expected social class
for their consumption patterns
• Dual incomes have changed consumption
patterns
• Individual dimensions of social class are
sometimes better predictors of consumer
behaviour

REFERENCE GROUP
AND FAMILY
27

Canada Inc.
12-28
What is a Group?
A group is defined as two or more individuals who
share a set of norms, values or beliefs and have
certain implicitly or explicitly defined relationship to
one another such that their behaviors are
interdependent.

Canada Inc.
12-29
Reference Group
• A person or group that serves as a point of comparison
(or reference) for an individual in the formation of either
general or specific values, attitudes, or behaviour.
• Thus, a reference group is simply a group that an
individual uses as a guide for behavior in a specific
situation.

Groups may be classified as follows
• Four criteria are particularly useful:
1. membership
2. Strength of social tie
3. Type of contact
4. Attraction
31

• Membership criterion is dichotomous : either one is a
member of a particular group or one is not a member of
that group.
• Strength of social ties refers to the closeness and
intimacy of the group linkages.
• a) Primary groups: family, friends ; involve strong ties
and frequent interaction.
• b) Secondary groups: professional and neighbourhood
associations involve weaker ties and less frequent
interactions.
32

• Type of contact : refers to whether the interaction is
direct or indirect. Internet ; online communities is an
example of indirect communication.
• Attraction: refers to the desirability that membership in
a given group has for the individual . This can range
from positive to negative.
• a) dissociate groups: groups with negative desirability.
• b) aspiration groups: non membership groups with a
positive attraction. Individuals purchase products
thought to be used by a desired group.
33

Canada Inc.
12-34
Nature of Reference Group Influence
• Informational Influence- when the individual uses the
behaviours and opinions of reference group members as
potentially useful bits of information. E.g. Nutrition bar
• Normative Influence- occurs when an individual fulfills
group expectations to gain a direct reward or to avoid a
sanction. Strongest if group has strong ties
• Identification Influence- also known as value expressive.
Occurs when individuals have internalized the group’s
values and norms.

Two consumption Situation
Characteristics and Product/Brand choice
35

Degree of Reference Group Influence
Visible Usage
High relevance of product to
group
Low individual purchase
confidence
Strong individual commitment
to group
Non Necessary item
36
HIGH DEGREE OF
REFERNCE GROUP
INFLUENCE
→

Degree of Reference Group Influence
37

•
38

Marketing Strategies based on Reference
Group Influence
• Personal sales Strategies- e.g. of a sales person
influencing a group of consumers.
• Advertising Strategies- all three types of influence
would be used in various advertisements.
39

Opinion Leader
• An individual who actively filter’s, interprets and
provides product or brand related information to their
family, friends and colleagues is known as an opinion
leader.
• E.g. seeking opinion for a product from someone you
believe is knowledgeable about the product category.
• Generally seen in high-involvement products.
40

Canada Inc.
Factors Encouraging Conformity:
A Reference Group Must ...
• Inform or make the individual aware of a specific product or
brand
• Provide the individual with the opportunity to compare his
or her own thinking with the attitudes and behaviour of the
group
• Influence the individual to adopt attitudes and behaviour
that are consistent with the norms of the group
• Legitimize the decision to use the same products as the
group

Canada Inc.
12-42
Reference Groups and Marketing
Strategy
• Recognize the extent of reference group influence in a
situation
• Identify the most effective type of reference group
influence
• Identify possible reference group members to use in
promotions
• Attempt to increase reference group influence

SOCIAL GROUPS
43

Families and Households
44

Canada Inc.
12-45
The Family Life Cycle
• Traditional Family Life Cycle
– Stage I: Bachelorhood
– Stage II: Honeymooners
– Stage III: Parenthood
– Stage IV: Post-parenthood
– Stage V: Dissolution
• Modifications - the Nontraditional FLC

Stages of House hold Life Cycle
STAGE Single Married Children -None Children < 6
years
Children > 6
years
Younger < 35
Single I + +
Young married + +
Full Nest I + +
Single parent I + +
Middle aged
(35-64)
Single II + +
Delayed Full
Nest I
+ +
Full Nest II + +
Single Parent II + +
Empty Nest I + +
Older > 64 46

Canada Inc.
12-48

Canada Inc.
12-49
Figure 12-6 Noteworthy Nontraditional
FLC Stages
Family Households
Childless couples It is increasingly acceptable for married couples
to elect not to have children. Contributing forces
are more career-oriented married women and
delayed marriages.
Couples who marry later
in life (in their late 30s or
later)
More career-oriented men and women and
greater occurrence of couples living together.
Likely to have fewer or even no children.
Couples who have first
child later in life (in their
late 30s or later)
Likely to have fewer children. Stress quality
lifestyle: “Only the best is good enough”
Alternative FLC Stages Definition/Commentary

Canada Inc.
12-50
Family Households
Single parents II Young man or woman who has one or more
children out of wedlock.
Single parents III A single person who adopts one or more
children.
Extended family Young single-adult children who return home to
avoid the expenses of living alone while
establishing their careers. Divorced daughter or
son and grandchild(ren) return home to parents.
Frail elderly parents who move in with children.
Newlyweds living with in-laws.
Single parents I High divorce rates (about 50%) contribute to a
portion of single-parent households

Canada Inc.
12-51
Nonfamily Households
Unmarried couples Increased acceptance of heterosexual and
homosexual couples.
Divorced persons (no
children)
High divorce rate contributes to dissolution of
households before children are born.
Single persons (most are
young)
Primarily a result of delaying first marriage; also,
men and women who never marry.
Widowed persons (most
are elderly)
Longer life expectancy, especially for women;
means more over-75 single-person households.

Canada Inc.
12-52
Other Functions of the Family
• Economic well-being
• Emotional support
• Suitable family lifestyles

Family Decision Making
• It is the process by which decisions that directly or
indirectly involve two or more family members are
made.
• Family purchases often compared to organizational
buying purchases.
• Family purchases are inherently emotional and affect
the relationships between the family members.
53

The Nature of Family Purchase Role
54

Individuals play various roles for different
decisions :
• Initiator
• Information gatherer
• Influencer
• Decision Maker
• Purchaser
• User
55

Family decision making can also be
categorized :
• Husband – dominant
• Wife-dominant
• Joint
• Individualized
• Child-dominant
56

Conclusions on Family Decision Making
• Different family members are involved in different
stages of the decision process.
• Different family members often evaluate different
attributes of the product or brand
• Desires of family members also needs to be taken into
account.
• Overt conflicts in decision making are less common
than agreement.
57

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