economic factors, social factors, socio-cultural factors, reference groups, social stratification, family influence, personal influence

1. CONSUMER BEHAVIOR
Presented by
Dr. D VARALAKSHMI
B.Tech,MBA, Ph.D
Lecturer in Management
JNTUA

2. CULTURE
• culture can be defined as the sum total of
learned beliefs, values and customs that serve
to guide and direct the consumer behaviour of
all members of that society.
• Culture is learned through three ways
1. formal learning
2. informal learning
3. technical learning

3. Characteristics of Culture
• Culture is learned.
• Culture regulates society –Norms, standards
of behaviour, rewards and punishments.
• Culture makes life more efficient
• All members follow same norms.
• Culture is adaptive.
• Culture is environmental.
• Multiple cultures are nested hierarchically.

4. Types of culture
• National culture
• Popular culture
• Sub culture
• Corporate culture

5. Hofstede’s Five Dimensions of Culture
• Culture has a profound impact on the way consumers
perceive themselves, products they buy and use,
purchasing processes, and the organisations from
which they purchase. Marketers, however, are giving
more attention, to understanding macro cultures and
how they affect consumer behaviour.
1. Individualism versus collectivism
2. Power Distance
3. Uncertainty Avoidance
4. Masculinity/femininity
5. Abstract versus associative thinking

6. Cultural Influences
• Culture influences the pattern of living, of
consumption, of decision-making by
individuals.
• Culture forms a boundary within which an
individual thinks and acts.
• It can be acquired from the family.

8. Measurement of Culture
• Content Analysis
• Consumer Fieldwork
• Value Measurement Instruments

9. Content Analysis
• A method for systematically analyzing the
content of verbal and/or pictorial
communication.
• Frequently used to determine prevailing social
values of a society.

10. Consumer Feedback
• Field Observation
– Natural setting
– Subject unaware
– Focus on observation of behavior
• Participant Observation

11. Field Observation
• A measurement technique that takes place
within a natural environment that focuses on
observing behaviour (sometimes without the
subjects’ awareness).
• Takes place within a natural environment
• Performed sometimes without the subject’s
awareness
• Focuses on observation of behaviour

12. Participant Observation
• Researchers who participate in the
environment that they are studying without
notifying those who are being observed

13. Value Measurement Survey
Instruments
• Rokeach Value Survey (RVS) – A self-
administered inventory consisting of eighteen
“terminal” values (i.e., personal goals) and
eighteen “instrumental” values (i.e., ways of
reaching personal goals).
• List of Values (LOV) – A value measurement
instrument that asks consumers to identify
their two most important values from a nine-
value list that is based on the terminal values
of the Rokeach Value Survey

14. Culture and Marketing Strategy
• Identify key cultural values that affect the
consumption of the product
• Ensure the marketing mix appeals to these
values
• Examine changes in cultural values and adapt
the marketing mix if needed
• Modify marketing mix to subcultures if the
culture is heterogeneous
• Be aware of symbols and ritual

15. CROSS CULTURAL CONSUMER
BEHAVIOUR
• Cross-cultural marketing is defined as ―the
effort to determine to what extent the
consumers of two or more nations are similar
or different.
• This will facilitate marketers to understand the
psychological, social and cultural aspects of
foreign consumers they wish to target.

16. Importance
A company can enter a foreign market as a
• Domestic exporter
• Foreign importer
• Foreign government-solicit the firm to sell abroad
The firm‘s objectives could be:
• To determine how consumers in two or more societies are
similar/different and devise suitable, appropriate strategies .
• Devise individualized marketing strategy if cultural beliefs, values and
customs of a specific country are different
Characteristic features of a firm going global:
• 1. High market share in the domestic market
• 2. Advantageous economies of scale
• 3. Access to marketing/manufacturing bases across global borders.
• 4.Availability of resources and capability to absorb huge losses
• 5. Product/technology clout
• 6. Cost and differentiation advantages
•

17. Problems in Cross Cultural marketing
1. Problems related to product selection: The marketer
going for cross cultural marketing has to select the
customers/ market not on the basis of the superficial
similarities of age or income, but by using the real
motivating factors that prompt them to accept or
reject products.
2. Problems related to promotion/marketing
communication: e.g. Ariel in the middle east and also
Pepsi
3. Problems related to pricing: the marketer has to adjust
his pricing policies according to the local economic
conditions and customs.
4. Problems related to selection of distribution channels:

18. Cross Cultural Consumer Analysis
• Cross-cultural consumer analysis can be
defined as the effort to determine to what
extent the consumers of two or more nations
are similar or different.
• A major objective of cross-cultural consumer
analysis is to determine how consumers in
two or more societies are similar and how
they are different.

19. Positive Effects
• Many consumers may take into consideration
the country of origin of a product.
• Country-of-origin commonly:
– France = wine, fashion, perfume
– Italy = pasta, designer clothing, furniture, shoes,
and sports cars
– Japan = cameras and consumer electronics
– Germany = cars, tools, and machinery

20. Negative Effects
• Some consumers have animosity toward a country
– People’s Republic of China has some animosity to Japan
– Jewish consumers avoid German products
– New Zealand and Australian consumers boycott French
products

21. Socio-Cultural Influences
• Marketing involves both technical and social
elements.
◦ Technical elements are generally universally
◦ Social elements are market specific and display
the cultural differences of a given society
• The impact of socio-cultural factors on
marketing is important in understanding
consumer behaviour and planning appropriate
market strategies

22. Socio-Cultural Dimensions
• Customs, lifestyles, and values that
characterize a society
◦include anything within the context of society
that has the potential to affect behaviour.
• Examples of socio-cultural variables.
◦ Population demographics, educational levels,
norms and values, attitudes toward social
responsibility...

23. Socio-Cultural Aspects marketers
should consider
• Aesthetics
• Education
• Language
• Law and Politics
• Material Culture
• Religion
• Social Organizations
• Technology
• Values and Attitudes

25. Economic Factors
• Economic Factors are the factors that talk
about the level of sales in the market and the
financial position of the consumer, i.e. how
much an individual spends on the purchase of
goods and services that contribute to the
overall sales of the company.

27. SOCIAL AND CULTURAL
ENVIRONMENT
• GROUP: A group may be defined as two or
more people who interact to accomplish some
goals.
a. Primary versus Secondary Groups : interaction
b. Formal versus Informal Groups : structure
c. Large versus Small Groups: size and
complexity
d. Membership versus Symbolic Groups:
association

28. SOCIAL CLASS
• 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 the members of all other classes have either more
or less status.
Characteristics of Social Classes:
1. Persons within a given social class tend to behave more alike
2. Social class is hierarchical
3. Social class is not measured by a single variable but is measured as
a weighted function of one‘s occupation, income, wealth,
education, status, prestige, etc.
4. Social class is continuous rather than concrete, with individuals
able to move into a higher social class or drop into a lower class.

29. SOCIAL STRATIFICATION
• Social stratification refers to the system of ranking people into
groups according to one or more criteria deemed important to
society. These include race, colour and wealth among others.
• It can also be defined as the process by which society is divided in
terms of hierarchy where one social group is placed higher than
another group. This hierarchy is a rank order of groups and is linked
strongly to perceptions of ethnicity, colour, class and even gender.
• It is based on four principles:-
1. Social stratification is a trait of society, not simply a reflection of
individual differences
2. Social stratification carries over from generation to generation
3. Social stratification is universal but variable .
4. Social stratification involves not just inequality but beliefs as well

30. REFERENCE GROUPS
• Reference groups are groups that serve as a
frame of reference for individuals in their
purchase decisions.
• valuable perspective for understanding the
impact of other people on an individual's
consumption beliefs, attitudes, and behavior.
• Reference groups that influence general values or
behavior are called normative reference groups.
• Reference groups that serve as benchmarks for
specific or narrowly defined attitudes or behavior
are called comparative reference groups.

31. TYPES OF REFERENCE GROUPS
• A contactual group is a group in which a
person holds membership or has regular face-
to-face contact and of whose values, attitudes,
and standards he or she approves.
• An aspirational group is a group in which a
person does not hold membership and does
not have face-to-face contact, but wants to be
a member.

32. TYPES OF REFERENCE GROUPS
• A disclaimant group is a group in which a
person holds membership or has face-to-face
contact but disapproves of the group's values,
attitudes, and behavior.
• An avoidance group is a group in which a
person does not hold membership and does
not have face-to-face contact and disapproves
of the group's values, attitudes, and behavior.

33. Factors that Affect Reference Group
Influence
• Information and Experience
• Credibility, Attractiveness, and Power of the
Reference Group
• Conspicuousness of the Product
• Reference Group Impact on Product and
Brand Choice
• Reference Groups and Consumer Conformity

34. BENEFITS OF REFERENCE GROUP
• Increase brand awareness
• They serve to reduce perceived risk. (celebrity,
common man and expert)

35. FAMILY INFLUENCE
• The importance of the family or household
unit in consumer behavior arises for two
reasons:
1. Many products are purchased by a family
unit.
2. Individuals‘ buying decisions may be heavily
influenced by other family members.

36. STAGES IN FAMILY LIFE CYCLE
STAGES ECONOMIC
CIRCUMSTANCES
LIKELY BUYING BEHAVIOR
BACHELORHOOD
PARENTHOOD
POSTPARENTHOOD
DISSOLUTION

37. How Personal Influences is Related
with Consumer Behavior?
• These factors are not visible, though they
influence the consumer to a great extent.
1. Age and Life cycle Stage
2. Occupation And Income
3. Life Style
4. Personality