Unit 1

Success Publication
Unit 1
Environmental Influence on Consumer Behaviour
1.1 Environmental Influence on Consumer Behaviour

1.2 Basic Concepts in Consumer Behaviour
1.3 Culture & Subculture
1.4 Social Class
1.5 Social Groups
1.6 Family
1.7 Marketing Mix
Introduction
 Consumer behavior is a process whereby individuals decide What, When, Where, How
and from Whom to purchase goods and services.
 Culture is related to the dominant cultural beliefs, values & customs of a society
irrespective of the different traits of the multiple subcultures within that culture which
has strong impact on behavior.
 A person should aware of social class to a certain extent, which gives an idea of their
status.
 Social class is a reality of life. It reflects on the marketing behaviour of consumers. Family
decision-making is the process by which decisions is directly or indirectly involve two or
more family members which is also one of the important factor.
 In buying process, the consumer deliberates with himself and is also influenced by many
marketing mix, outside factors before it finally makes any purchase decision.
1.1 Environmental Influence on
Consumer Behavior
Introduction:
Consumer behavior is the study of
the behavior that consumers display
during the processes of searching
for purchasing, using, evaluating,
and disposing of products and
services that they expect will satisfy
their needs. External factors do not
affect the decision process directly,
but percolate or filter through the
individual determinants, to
influence the decision process as
shown in Fig.The arrow shows how
the external influences are filtered
towards the individual determinants
to affect the decision process.
Consumer Behavior
A) Individual Determinants:
Motivation
and
Involvement:
Information
Attitudes
Processing
Individual
Determinants
Personality
Learning and
and Self-
Memory
concept
Consumer Behavior
Individual determinants influenced consumer behavior strongly which are as follows
Motivation and Involvement, Attitude, Personality and Self-Concept, Learning and Memory
and Information Processing.
1) Motivation and Involvement:
In a society, different consumer’s exhibit different consumer behaviour because they are
unique and has unique sets of needs. Motivation is that internal force that activates some
needs and provides direction of behaviour towards fulfillment of these needs. While talking of
motivation, it cannot afford to forget the Maslow’s Hierarchy of needs which tells that about
the primary and secondary needs.
2) Attitudes:
These are learned predispositions towards people, objects and events. Attitudes are
responsible for our responses and are not inborn but are learnt from people around them.
Attitudes influence on purchase decisions and consumer behaviour. A person having a
carefree attitude will buy an object without much involvement.
3) Personality and Self-concept:
It is the sum totals of a person mental, physical and moral qualities and characteristics that
are present in him and that make him what he is. Consumers try to buy the products that
match their personality.
Consumer Behavior
4) Learning and Memory:
Every day a person are exposed to a wide range of information, but retain only a small portion of
it, he tend to remember the information that he is interested in or, that is important to him. In
a family different member of the family are interested in different types of information which
they individually retain.
5) Information Processing:
All consumers analyze and process the information they receive. These are activities that a
consumer engages in, while gathering, assimilating and evaluating information. Consumers
assimilate and evaluate selective information and this reflects on their motives, attitudes and
personality and self-concept.
Consumer Behavior
B) External Environmental Factors Affecting Consumer Behavior:
Social Group
Influences
Social Class Family
Influence Influence
Sub-cultural Personal
Influences Influences
External
Cultural Other
Influences Environmental Influences
Factors
Consumer Behavior
External Environment Factor also having strong impact on consumer behavior. These factors
are a follows.
1) Cultural Influences:
It is defined as a complex sum total of knowledge, belief, traditions, customs, art, moral law or
any other habit acquired by people as members of society. Our consumer behaviour that is
the things a person buy is influenced by our background or culture.
2) Sub-cultural Influences:
Within a culture, there are many groups or segments of people with distinct customs,
traditions and behaviour. In the Indian culture itself, we have many subcultures, the culture
of the South, the North, East and the West.
3) Social Class Influence:
By social class refer to the group of people who share equal positions in a society. Social class
is defined by parameters like income, education, occupation, etc. Within a social class, people
share the same values and beliefs and tend to purchase similar kinds of products.
4) Social Group Influences:
A group is a collection of individuals who share some consumer relationship, attitudes and
have the same interest. Such groups are prevalent in societies. These groups could be primary
where interaction takes place frequently and consists of family groups.
Consumer Behavior
5) Family Influence:
As has already been said, the family is the most important of the primary group and is the
strongest source of influence on consumer behaviour. Children learn the family tradition and
customs, and they imbibe many behavioural patterns from their family members, both
consciously and unconsciously.
6) Personal Influences:
Each individual processes the information received in different ways and evaluates the
products in his own personal way. This is irrespective of the influence of the family, social
class, cultural heritage, etc. a person’s own personality ultimately influences his decision.
7) Other Influences:
Consumers are also influenced by national or regional events which could be like the Asiad,
the Olympics and Cricket test matches, World Cup, the war or a calamity. These leave
permanent or temporary impressions on the mind of the consumer and affect his behaviour
1.2 Basic concepts in Consumer
Behavior
While studying Consumer behavior it is prior to understand some concepts, which are given as
follows.
A) Consumer:
Traditionally, consumers have been defined very strictly in terms of economic goods and
services wherein monetary exchange is involved. This concept, over a period of time, has
been broadened.
a) Meaning of Consumer:
The 'consumer' is a person who generally engages in the activities search, select, use and
dispose of products, services, experience, or ideas.
b) Definitions of Consumer:
1) Civil Code:
A consumer is a natural person concluding a contract with a professional and whose aim in
concluding the contract is not directly connected to their (the consumer`s) business activity.
2) Bill:
A “consumer” as “an individual acting for purposes that are wholly or mainly outside that
person’s trade, business, craft or profession”.
Behavior
A) Consumer:
c) Types of Consumer:
Personal
Consumer Organisational
Consumer
1) Personal Consumer:
It buys goods and services for her or his personal use (such as cigarettes or haircut), or for
household consumption (such as sugar, furniture, telephone service etc.), or for just one
member of the family (such as a pair of shoes for the son), or a birthday present for a friend
(such as a pen set). In all these instances, the goods are bought for final use, referred as “end
users’ or “ultimate consumers.
2) Organisational Consumer:
It includes profit and not-for-profit organisations. Government, agencies and institutions buy
products, equipment and services required for running these organisations. Manufacturing
firms buy raw materials to produce and sell their own goods. They buy advertising services to
communicate with their customers. Similarly, advertising service companies buy equipment to
provide services they sell. Government agencies buy office products needed for everyday
operations.
Behavior
B) Customer:
The term 'customer' is specific in terms of` brand, company, or shop. It refers to person who
customarily or regularly purchases particular brand, purchases a particular company's
product, or purchases from a particular shop.
a) Meaning of Customer:
Customer is anyone who regularly makes purchases from a store or a company is termed as
“customer” of that store or the company.

b) Definition of Customer:
1 )Hayden Noel:
An individual, or business that purchases the goods or services produced by a business. The
customer is the end goal of businesses, since it is the customer who pays for supply and
creates demand. Businesses will often compete through advertisements or sales in order to
attract a larger customer base.
Behavior
C) Consumer Roles in Consumer Behavior:
However role of a consumer are given as follows.
1) Buying Quality Products :
It is the role of a consumer to buy a product after having a thorough knowledge of its price
and quality.
2) To Check The Weights :
Generally, the sellers often cheat consumer by using unfair weights and measures. The
consumer should ensure that he is getting the product of right weight and measure.
3) Reading The Label Carefully:
It is the role of the consumer to read the label of the product. It should have complete and
true information about the product.
4) Beware Of False And Attractive Advertisements:
Often the product is not that attractive as it is made out in the advertisement by the seller.
5) Beware Of Misleading Schemes:
It is the role of the consumer to beware of misleading schemes. These days, almost every
product in the market is available with a gift, discount, or a free product.
Behavior
C) Consumer Roles in Consumer Behavior:
6) To Procure The Bill:
Often the consumer does ask for a bill or cash receipt in order to avail sales tax. Later on, if
the product comes to be defective, he becomes helpless.
7) Buying From Reputed Shops:
It is the role of the consumer to make purchase' from the reputed shops like super bazaar,
cooperative stores, etc.
8) Avoid Purchases From Black Market:
The consumer should discharge hill role of responsible citizen. He should not buy from black
market and in excess of his requirements.
9) To Buy Standardized Product:
Often the consumer buys cheap products which are not durable or are not safe, therefore, it
is the role of the consumer to buy products with standardization marks, and is safe in every
respect.
10) To Use A Product :
It is the role of the consumer to use the product as per its instructions, e.g., if a medicine
carries instructions-'Store in cool place-’ it should be stored in the fridge.
11) Knowledge of Consumer Rights:
These days the seller is trying to cheat the consumer in every possible way to earn maximum
profits. It is the duty of the consumer to be aware of his rights.
Behavior
D) Consumerism:
The term 'consumerism' is different from the term 'consumer' which can be stated as
consumerism is a social movement seeking to argument the rights and powers of buyers in
relation to sellers. Consumerism is a movement designed to improve the rights and powers
of the consumers in relation to the sellers of products and services. Thus, a consumer is a
person who buys goods and services for consideration or hires the services for a
consideration, which has been paid or promised while consumerism is a social force within
the environment design to aid and protect the consumer by exerting legal, moral, and
economical pressure on business.
E) De-marketing:
It is a form of advertising in which physical marketing materials are provided to consumers in
order to communicate information about a product or service. Direct marketing does not
involve advertisements placed on the internet, on television or over the radio. Types of direct
marketing materials include catalogs, mailers, and fliers. Direct marketing removes the
"middle man" from the promotion process, as a company's message is provided directly to a
potential customer. This type of marketing is typically used by companies with smaller
advertising budgets, since they cannot afford to pay for advertisements on television and
often do not have the brand recognition of larger firms.
1.3 Culture and Sub-Culture
A) Culture:
a) Meaning:
Culture consists of the beliefs, behaviors, objects, and other characteristics common to the
members of a particular group or society. Popularly speaking, being cultured means being
well educated, knowledgeable of the arts, stylish, and well-mannered.
b) Definition:
1) Satish K Batra:
“Culture refers to the cumulative deposit of knowledge, experience, beliefs, values, attitudes,
meanings, hierarchies, religion, notions of time, roles, spatial relations, concepts of the
universe, and material objects and possessions acquired by a group of people in the course of
generations through individual and group striving.”
c) Culture and Consumer Behavior:

The study of culture generally requires a global examination of the character of the total
society, including such factors as language, knowledge, laws, religions, food customs, music,
art, technology, work pattern, products, and other artifacts that give the society its distinctive
flavor. In a sense, culture is a society's personality. It is not easy to define its boundaries.
.
A) Culture:
d)Components of Culture:
1) Beliefs:
These consist of the very large number of mental or verbal
statements such as "I believe that reflect a person’s
particular knowledge and assessment of something such as Beliefs
another person, a store, a product, a brand.”
2) Values:
Values differ from other beliefs, because they meet the
following criteria : Components
i. They are relatively few in number, _ of culture
ii. They serve as a guide for culturally appropriate behaviour, Customs Values
iii.They are enduring or difficult to change,
iv. They are not tied to specific objects or situations and
v. They are widely accepted by the members of a society.
3 )Customs:
In contrast to beliefs and values, customs are over the modes
of behaviour that constitute culturally approved or
acceptable ways of behaving in specific situations.
A) Culture:
e )Nature of Culture:
Nature of
Culture
Culture is an Culture Is
Culture is Culture is Culture Fulfils
Acquired Social, Not
Communicative Idealistic some Needs
Quality Individual
A) Culture:
e )Nature of Culture:
Important facts concerning the nature of culture are as follows:
1) Culture is an Acquired Quality:
Culture is not innate. Traits learned through socialization, habits and thoughts are what is
called culture. Man acquires the cultural behaviour because he has the capability of symbolic
communication.
2 )Culture is Communicative:
In this way, culture is communicated from one generation to the next. As a result of this,
culture is constantly accumulating.
3) Culture is Idealistic:
In culture are included those ideal norms of behaviour according to which the members of
society attempt to conduct themselves. Society accepts these ideals, norms and patterns.
4) Culture Fulfils some Needs:
Culture fulfils those ethical and social needs which are ends in themselves. Social habits are
included in culture. Habits can be formed of those activities only which tend to fulfill some
needs. Without fulfillment of those needs, culture cannot exist.
5) Culture Is Social, Not Individual:
Every individual takes some part in the transmission and communication of culture but
culture is social rather than individual.
Culture is
Invented Culture is a
Other
A) Culture: Characteristics
set of Learned
f) Characteristics of Culture: Responses
Culture Is
Integration
Shared
Characteristics
Adaptation of Culture Culture is
Gratifying and
Persistent
Culture is
Culture is
Dynamic and
Prescriptive
Adapts
Culture is an
Cultures are
Organized and
Similar yet
Integrated
Different
Whole
A) Culture:
f) Characteristics of Culture:
1) Culture is Invented:
This means that culture is invented and is not a set of instinctive responses. It is a way of
thinking, feeling and acting that result from years of accumulated experience and is handed
down from one generation to another.
2) Culture is a set of Learned Responses :

Cultural learning takes two forms. One is patterned instruction. The other is imitative
learning.
3) Culture Is Shared:
Culture is frequently viewed as a group phenomenon. It thus links together the members of a
society.
4) Culture is Gratifying and Persistent:

Culture in a society offers direction and guidance to the members, to satisfy physiological and
personal needs.
A) Culture:
5) Culture is Dynamic and Adapts:
In spite of resistance to change in societies, cultures are gradually and continuously changing.
Marry factors are likely to produce cultural change such as new technologies," resource
shortages, such as those of energy and water, and customs borrowed from other culture.
6) Culture is an Organized and Integrated Whole:

This means that the elements of a culture are consistent aid woven together to form a whole.
7) Cultures are Similar yet Different:

In terms of elements that they exhibit, cultures are strikingly similar, elements like social
institutions of family, marriage, schools, government, housing, religious, social functions,
personal adornments, calendars, language, music and dance forms and law in every society
whose culture may be interested in studying.
8) Culture is Prescriptive:
Culture determines desirable norms or patterns of behaviour so that in a given cultural
context people have a common appreciation of what is right and wrong, indeed what is
proper or improper.
A) Culture:
9) Adaptation:
Culture has the characteristic of adaptation. Culture is constantly undergoing change In
concurring with the environment and due to this transformation it is constantly being
adapted to external forces but once it is developed, the influence of the natural, environment
begins to decrease.
10) Integration:
Culture has the quality of becoming integrated. Culture possesses an order and a system. Its
various parts are integrated with each other and any new element which is introduced is also
integrated.
11) Other Characteristics:

In this way, culture is social, idealistic and acquired. It fulfils many of man's needs. It
possesses the characteristics of communication, adaptation and interrogation. It is a special
quality of man. It is the evidence of his social heritage
A) Culture:
g) Influence of Culture on Consumer Behavior:
Culture
Influencing Nature of
Adapting a Influence on
the Pattern of Culture
Cross Cultural Technology
Living: Influence
Behavior
A) Culture:
g) Influence of Culture on Consumer Behavior:
1) Influencing the Pattern of Living:
Culture is that complex whole which includes knowledge, belief, art, law, morals, customs and
any other capabilities and habits acquired by humans as members of society.
2) Culture Adapting a Cross Cultural Behavior:
Culture forms a boundary within which an individual thinks and acts. When one thinks and
acts beyond these boundaries, he is adopting a cross-cultural behaviour and there are cross-
cultural influences as well.
3) Nature of Culture Influence:
The nature of cultural influences is such that a person is seldom aware of them. One feels.
Behaves and thinks like the other members of the same culture. It is all pervasive and is
present everywhere.
4) Influence on Technology:
Material culture influences technology and how it brings cultural changes like use of
telephones, mobile phones, clothing styles and fashions gives the marketers a chance to
improve the product, packing etc. to meet the needs of the customers
5) Adapting International Culture:
Culture keeps changing slowly over time; and is not static. Changes take place due to rapid
technologies.
A) Culture:
h) Cultural Relevance To Marketing Decisions :
Manifestations of
Culture
Differences in
The Significance of Subcultures such as
Symbols in a Society Blacks, Jews, and
Hispanics
A) Culture:
h) Cultural Relevance To Marketing Decisions :
Nearly all purchases of goods are made either to provide physical comfort or to implement
the activities that make up the life of a culture.
1) Manifestations of Culture:
National character or the differences that distinguish one national group from another. These
are the obvious as well as the more subtle cultural differences that distinguish Americans,
Swedes, Germans and Brazilians.
2)Differences in Subcultures such as Blacks, Jews, and Hispanics:
The silent language of gesture, posture, food, and drink preferences is non-verbal clues to
behavior.
3) The Significance of Symbols in a Society:
The science of semiotics provides a structure for studying and analyzing how signs (anything
that conveys meaning) function within a culture. Advertising is a prime example of using
semiotics to invest products with meaning for a culture whose dominant focus is
consumptions.
B) Subculture:
A society with a common culture can be further subdivided on the basis of socio-cultural
(nationality social class, religion) and demographic (region, language, occupation, age, gender)
variables into various groups called subcultures.
a) Meaning of Sub-Culture:
It is a distinct cultural group that exists as an identifiable segment within a larger more
complex society. It is a group of people whom you refer to, while making buying decisions.
b) Definition of Subculture:
1) Gordon;
A subdivision of a national culture, composed of a combination of factorable social
situations such as class status, ethnic background, regional and rural or urban residence,
and religious affiliation, but forming in their combination a functional unity which has an
integrated impact on the participating individual. (Gordon, 1947; 40)

B) Subculture:
c) Characteristics of Subcultures:
Demographic Psychographic
Characteristic Characteristics
i) Demographic Characteristic
1) Size:
The Asian population (consisting at Chinese. Filipino, Japanese, Asian- Indian, Korean,
Vietnamese, Hawaiian, and other segments) in the United States is almost 8 million. or
about 3 percent of the total population and largely because of immigration, it is the fastest
growing minority in the nation.
2) Location:
56 percent of all Asians live in the West, compared to just 21 percent of all Americans.
Twelve states have over 100,000 Asian Americans. Approximately 40 percent of Asian
American live in California and over 10 percent live in Hawaii.
3) Education:
Asian-American high scholars an: more likely than other students to enroll in college
preparatory programs.
B) Subculture:
c) Characteristics of Subcultures:
i) Demographic Characteristic
4) Family and Age:
The population segment is a youthful group, having an average age of 30 compared to 36 for
whites. The average number of people per household is 3.2.
5) Income and Employment:
Although there are personal incomes are lower than whites. Asian American households have a
higher median income than any other ethnic groups including whites.
ii) Psychographic Characteristics:
When a person consider such subcultures as Asians and Hispanics, it is important to understand
the concepts H assimilation and accumulation. Assimilation refers to a person being taught
some but not all of the attitudes, values. and behaviors of another culture.
B) Subculture:
d) Influence of Sub-Culture on Consumer Behavior:
Regional, Ethnic, And Religious Influences On

Consumer Behavior
Age, Gender, And Household Influence Consumer

Behavior
Physiographic
B) Subculture:
i) Regional, Ethnic, And Religious Influences On Consumer Behavior:
The three major aspects of culture that have important effects on consumer behavior are
regional, ethnic and religious differences.
1) Region:
Consumption patterns may differ in various regions of India and the world. Marketing strategy
can sometimes be tailored specifically to these regions.
2) Ethnic Group:
Our country has a number of different ethnic groups and population trends will dramatically
alter the demographic profile of the country in the next50 years. The very diverse Asian
American subculture is described as young and having higher socioeconomic status.
3) Religious:
Religious beliefs and values can influence consumer. Many marketers are now becoming
multicultural in their marketing activities by trying to appeal to a variety of cultures at the
same time although the diversity of the Indian melting pot may be unique.
B) Subculture:
ii) Age, Gender, And Household Influence Consumer Behavior:
Age, Gender and Household also have important effects on consumer behavior.
1) Age:
Among the four major age groups Teens, who need to establish an identity? Are the
consumers of tomorrow and have an increasing influence on family decisions.
2) Gender:
The affect of gender differences on consumer behavior is examined next. Sex roles are
changing. Women are becoming more professional and independent, and men are
becoming more sensitive and caring.
3) Households :
Also exert an important influence on acquisition and consumption patterns. First,
household members can play different roles in the decision process (gatekeeper. influencer.
decider.
B) Subculture:
iii) Physiographic : Value, Personality and Life Style:
The role of physiographic in affecting consumer behaviour are detailed below
1) Values :
They are enduring beliefs about things that are important. They are learned through the
processes of socialization and acculturation. Our values exist in an organized value system
with some values being viewed as more important than others.
2) Personality:
It consists of the distinctive patterns of behaviors. Tendencies, qualities and personal
disposition that make people different from one another. Approaches to the study of
personality include.
3) Life Style :
Marketers also measures lifestyles. Which are patterns of behavior for activities interests
and opinions? These lifestyles can provide some additional insight into consumers’
consumption patterns. Finally, some marketer researcher use Psycho graphic techniques
that involve all of these factors to predict consumer behavior.
1.4 Social Class
A social class refers to a social position that an individual occupies in a society. People
belonging to a social class have many characteristics, such as education, occupation,
ownership of property and source of income. In India there are many social classes
and these dividing the society into a hierarchy of classes, varying from the high class to
low.
A) Meaning:
Social class can be viewed as a range of social positions in a society. Social class
means societal rank, which is one’s position relative to others on one or more
dimensions valued by society.
B) Definition of Social Class:

Schiff man:
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.
1.4 Social Class
C) Characteristics of the Social Classes:
The main characteristics of Social class are as follows.
1) Social class is Hierarchical:
Social Class makes the classification of people into Higher Class, Middle Class and Lower Class
as per their education, prestige, value etc.
2) Measures of Social Class:
Social Class Measured in terms of occupation, income, wealth etc. 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. Social class is often measured in terms of
social status. Subjective values set by a society determine the ideal types of people in that
society.
3) Social Class is Continuous:
Social class is continuous rather than concrete, with individuals able to move into a higher
social class or drop into a lower class.

1.4 Social Class
D) Measurement of Social Class
Social class is often measured in terms of social status. Subjective values set by a society
determine the ideal types of people in that society. Important factors that determine the
status in most societies include authority over others, political, economic, military, or
religious power; ownership of property, income, occupation, lifestyle and consumption
patterns, education; public service, ancestry and connections.
When measuring social class, which is often used simultaneously with socioeconomic status,
the characteristics of the male father figure are most often used to represent the status of
the children. This approach seems logical when assessing children from two-parent, intact
families. The father figure approach may not always be an accurate portrayal of most families
in society.
1.4 Social Class
E) Effect of Social Class on Lifestyles
Smaller Group
Separation of Group as per Hierarchy
Sharing of Values and Pattern
Separation Of Individual Person into Group
Separation of Hierarchical Structure In a Country
Separation of Classes
Developing Common Behavioral Pattern
Identifying the Financial Capacities:
Determining Purchase Decisions

1.4 Social Class
1) Smaller Group:
Although social class can be thought of as a continuum a range of social positions on which
each member of society can be placed –researchers have preferred to divide the continuum
into a small number of specific social classes or strata. Within this framework, the concept of
social class is used to assign individuals or families to a social class category.
2) Separation of Group as per Hierarchy:

Most societies can be divided into a social class hierarchy where by some individuals have
higher status than others. These social classes are identifiable groups of individuals whose
behaviors and lifestyles differ from those of other classes.
3) Sharing of Values and Pattern:

Members of a particular social class tend to share similar values and behavior patterns. It is
important to stress that social classes are not formal groups with a strong identity but rather
loose collections of individuals with similar life experiences.
1.4 Social Class
4) Separation Of Individual Person into Group:
In most societies, individuals can be divided into three major groupings of high, middle, and
lower classes. Often, however finer distinctions are made.
5) Separation of Hierarchical Structure In a Country:

Although most societies have some kind of hierarchical structure, the size and composition of
the classes depends on the relative prosperity of a particular country.
6) Separation of Classes :
Interestingly, across most societies the upper classes are more similar to each other than
they are to other classes within their own countries because the upper classes tend to be
more cosmopolitan and international in orientation.
7) Developing Common Behavioral Pattern:

Social class influences people and they may develop and exhibit common behavioral
patterns. They may have similar desires, attitudes, preferences, and possessions.
1.4 Social Class
8) Identifying the Financial Capacities:

In societies where financial wealth signifies status, possessions become an indicator of
income and wealth, since others are unlikely to know how much one earn.
9) Determining Purchase Decisions:

Cultural and societal variables establish the outer boundaries of lifestyle specific to their
culture. The interaction of group and individual expectations and values creates a systematic
pattern of behaviour.
1.4 Social Class
8) Identifying the Financial Capacities:

In societies where financial wealth signifies status, possessions become an indicator of
income and wealth, since others are unlikely to know how much one earn.
9) Determining Purchase Decisions:

Cultural and societal variables establish the outer boundaries of lifestyle specific to their
culture. The interaction of group and individual expectations and values creates a systematic
pattern of behaviour.
1.5 Social Group
A) Meaning of Social Group:
A social group is the group of people that gather together to fulfill specific goal. Social groups
are helpful joining people in finding friendships or a lifelong partner. Not every collection of
individuals is a group, as the term is used by sociologists. Actually it can distinguish three
different collections of people: aggregations, categories and groups. An aggregation is any
number of people who are in close proximity to one another at a given time. A category is any
number of people who have some particular attributes in common. A group consists of
people who have a sense of as a result of interaction with each other.

B) Definitions of Social Group:
1) R.M Williams.
"A social group is a given aggregate of people playing interrelated roles and recognised by
themselves or others as a unit of interaction.”
2) Ogburn and Nimkoff

"Whenever two or more individuals come together and influence one another, they may be
said to constitute a social group,”.
1.5 Social Group
C) Group Properties:
Status Norms Role Socialization Power

1.5 Social Group
In order to understand the nature of groups better, we need to examine several other important
components such as status, norms, role, socialization, power and their significance for consumer
behavior.
1) Status:
Status refers to the achieved or ascribed position of an individual in a group or in society, and
it consists of the rights and duties associated with that position. Status also may refer to
some grouping on the basis of age or sex, family, occupation, and friendship or common
interest.
2) Norms:
Norms are the rules and standards of conduct by which group members are expected to
abide. For informal groups, norms are generally unwritten but are, nevertheless, usually quite
well understood.
3) Role:
This term is used to designate all of the behavior patterns associated with a particular status.
Role is the dynamic aspect of status and includes the attitudes, values, and behavior ascribed
by the society to persons occupying this status. The social structure partially prescribes what
sort of role behavior is acceptable and thus what is expected.
1.5 Social Group
4) Socialization:
They refer to the process by which new members learn the group's system of values, norms
and expected behaviour patterns. When an individual leaves one job and joins another in an
organization, she/ he must learn the informal rules and expectations from the work groups
besides the formal rules and expectations.
5) Power:
A group's influence on its members' behavior is closely related to its 'power'.
a) Reward Power:
It is refers to the group's ability to reward the individual. The strength of reward power
increases with the size of the rewards as perceived by the individual.
b) Coercive Power :
It relates to the power of the group to use disapproval, with holding rewards or even
punishing the individual.
1.5 Social Group
5) Power:
C )Expert Power:
It influences the results from the experience, expertise and knowledge of the individual or
Consumers regularly accept influence from friends .
d) Expert Power:
It influences the results from the experience, expertise and knowledge of the Individual or
groups.
e) Referent Power:
It flows from the feeling of identification that the individual has with the members of the
group.
1.5 Social Group
D) Reference Group:
Reference groups are groups that serve as a frame of reference for individuals in their
purchase decisions. This basic concept provides a valuable perspective for understanding the
impact of other people on an individual’s consumption beliefs, attitudes, and behaviour. It
also provides some insight into methods that Groups can be used to effect desired changes in
consumer behavior.
a) Meaning of Reference Group:

Reference groups are generally defined as groups whose presumed perspectives or values are
used by an individual as the basis for his or her current behaviour, beliefs and feelings.
Reference play a huge role in the lives of young consumes as they are sometimes easily
molded into consumers on their reference groups.
b) Types of Reference Group:

1) Membership versus Non-membership:
Membership groups are those to which the individual belong. Membership in some groups is
automatic by virtue of the consumer’s age, sex, education, and marital status.
2) Positive versus Negative:
Reference groups can also be classified as to whether they attract or repel the individual.
1.5 Social Group
D) Reference Group:
c) Influence of Reference Group on Consumer
Behavior:
1) Informational Influence:
Informational influence occurs when an individual
uses the behaviors and opinions of reference Informational
group members as potentially useful bits of Influence
information.
2) Normative Influence:
Normative influence sometimes referred to
Austilitarian influence, occurs when an individual
fulfills group expectations to gain a direct reward
or to avoid a sanction. Identification Normative
Influence Influence
3) Identification Influence:
Identification influence also called value
expressive influence occurs when individuals have
internalized the group’s values and norms.
1.6 Family Life Cycle
A) Meaning:
Families pass through a series of stages that change them over time. This process
historically has been called the Family Life Cycle Concept may need to be changed to
household life cycle (HLC) or consumer life cycle (CLC) in the future to reflect changes in
society.
B) Family Life Cycle Stages :
The life cycle of families has been conceptualized
Bachelor as a progression involving several stages
which are given as below. Stage
Newly
Solitary
Married
Survivor
Couple
Stages of
Family Life
Cycle
Empty Nest Full Nest 1
Full NEst 3 Full Nest 2


1) The Bachelor Stage (Young and Single):
In the bachelor stage of the life cycle, income is low relative to future earnings, since most
bachelors are just beginning their careers. A few basic furniture items may be acquired, as
well as some kitchen equipment. However purchase tend to be on a non-systematic basis and
also minimal because possessions restrict their freedom of movement. This market segment
also offers marketers opportunities in terms of single serving packaging for a wide variety of
foods. Overall, there is more individuality in purchasing at this stage.
2) The Newly Married Couples (Young, No Children):
With marriage, the requirements and resources change. Household requirements increase. In
addition, in some cases, both partners may be working. This stage therefore represents a high
expenditure period.
3) Full Nest 1 (Young, Married With Child) :
The arrival of a child creates major changes. Some wives may stop working and they suffer a
reduction in income. The financial resources thus change significantly. Child rearing and
educational responsibilities increase. Money is now directed to baby furniture, toys, chest
rubs, vitamins, baby foods and baby medicines.

4) Full Nest 2 (Older, Married, With Children):
The family's financial position starts to improve because of career progress and also because
many wives return to work. They present an active market for a wide variety of food products,
bicycles, music lessons, magazines and also educational services as children are growing up.
5) Full Nest 3 (Older, Married With Dependent Children):
Income is high for the family at this stage. However, they now represent experienced buyers and
tend to be less interested in new product purchases. Expenditures continue to be high due to
replacement buying in the later phases of the stage.
6) Empty Nest (Older, Married With No Children Living With Them):
With no children living at home, the financial position stabilizes Savings accumulate. There may
be resurgence in self-education. Hobbies also become an important source of satisfaction.
More is spent on luxury appliances, magazines and health products. Major expenditures are
on home ownership, home improvements and also on medical care.
7) Solitary Survivor (Older, Single, Retired People):
Simple is often more economical lifestyle. A lower income due to retirement may be a restrictive
factor. Health care and other services become important. The stages at which families find
themselves thus affect the nature of the goods and services required their wants and
consumption patterns, as well as the volume of consumption on specific products.
C) Purchasing Decision in Family Life Cycle:

Family decision making is the process by which decisions that directly or indirectly involve two
or more family members are made. Most importantly, many family purchases are inherently
emotional and affect the relationships between the family members. However these
Family Purchase
purchasing decision roles are given as follows.
Roles:
Sex Roles And

Full Nest Decisions Decision-Making
Responsibilities
Young Children Heuristics in Joint

Decision Decision-Making
Children

1) Family Purchase Roles:
There are six roles that frequently occur in family decision making. It is important to note that
individuals will play various roles for different decisions (see fig.1.3)
a) Initiator(s):
The family member who first recognizes a need or starts the purchase process.
b) Information Gatherer(s):
The individual who has expertise and Interest in particular purchase. Different individuals
may seek information at different times or on different aspects of the purchase.
c) Influencer(s):
The person who influences the alternatives evaluated, the criteria considered, and the final
choice.
d) Decision maker(s):
The individual who makes the final decision. Of course, joint decisions also are likely to
occur.
e) Purchaser(s):
The family member who actually purchases the product. This is typically an adult or
teenager.

2) Sex Roles And Decision-Making Responsibilities:
Traditionally, some buying decisions, termed Autocratic Decisions, Syncratic Decision
a) Autocratic Decisions:
Autocratic Decisions were made by one spouse. Men, for instance, often had sole responsibility
for selecting a car, while most decorating choices fell to women.
b) Syncratic Decisions:
In Syncratic Decision decisions, other decisions such as holiday destinations, were made jointly.
According to a study conducted by Roper Starch Worldwide, wives tend to have the most say
when buying groceries, children’s toys, clothes and medicines. Syncratic decisions are
common for cars, holidays, homes, appliances, furniture, home electronics, interior design
and long-distance phone services. As the couple’s education increases, more decisions are
likely to be made together.
3) Heuristics in Joint Decision-Making:
The synoptic ideal calls for the husband and wife to take a common view and act as joint
decision makers. A couple ‘reaches’ rather than ‘makes’ a decision. This process has been
described as‘ muddling through’. One common technique for simplifying the decision-making
process is the use of heuristics. Some decision-making patterns frequently observed when a
couple makes decisions in buying a new house illustrate the use of heuristics:

a) Common Preference:
The couple’s areas of common preference are based upon salient, objective dimensions rather
than more subtle, hard-to-define cues. For example, a couple may easily agree on the number
of bedrooms they need in the new home, but will have more difficulty achieving a common
view of how the home should look.
b) Task Specialization:
The couple agrees on a system of task specialization, where each is responsible for certain duties
or decision areas and does not interfere in the other’s. For many couples, these assignments
are likely to be influenced by their perceived sex roles. For example, the wife may seek out
houses in advance that meet their requirements, while the husband determines whether the
couple can obtain a mortgage.
c) Concessions :
They are based on the intensity of each spouse’s preferences. One spouse will yield to the
influence of the other in many cases simply because his or her level of preference for a certain
attribute is not particularly intense, where in other situations he or she will be willing to exert
effort to obtain a favorable decision. . In cases where Intense preferences for different
attributes exist, rather than attempt to influence each Other, spouses will ‘trade off’ a less-
intense preference for a more strongly felt one.

4) Children:
Anyone who has had the ‘delightful’ experience of supermarket shopping with one or more
children knows that children often have a say in what their parents buy, especially for
products like breakfast cereal. In addition, children increasingly are being recognized as a
potential market for traditionally adult products. For example, Kodak is putting a lot of
promotional effort into encouraging children to become photographers.
5)Young Children Decision:
Young bachelors and newlyweds have the most ‘modern’ sex-role attitudes, are the most likely
to exercise regularly, to go to pubs, concerts, the cinema and restaurants, and to go dancing;
and they consume more alcohol. Families with young children are more likely to consume
health foods such as fruit, juice and yogurt, while those made up of single parents and older
children buy more junk foods.
6) Full Nest Decisions:
Babysitter and day care usage is, of course, highest among single-parent and full nest
households, while home maintenance services (e.g. lawn mowing) are most likely to be
employed by older couples and bachelors, in family chores. The monetary value of homes,
cars and other durables is lowest for bachelors and single parents, but increases as people go
through the full nest and childless couple stages.
1.7 Marketing Mix
A) Meaning:
The concept of ‘Marketing Mix’ is an important development in the marketing field. Thus,
marketing mix is related to pricing, advertising, selling, physical distribution etc. It is also
related to the environmental elements such as economy, competition, culture and
technology. All these variables have come to be known as the 'Marketing Mix Variables'.
They are also alternatively referred to as the four P’s of Marketing.
Product Price
Promotio
Place
n
1.7 Marketing Mix
B) Influence of Marketing Mix Variables:

Once unsatisfied needs and wants are identified, the marketer has to determine the right mix
of product, price, distribution and promotion. If the programme is success then customer
purchase & repurchase & process is continue where as if not sales will be lost & business
collapse. Here consumer behaviour study is very helpful in finding answers too many
questions.
1) Product:
The marketer designs the product or service that would satisfy unfulfilled needs or wants.
Further decisions regarding the product concern the size, shape and features. The marketer
also has to decide about packaging, important aspects of service, warranties and accessories
etc.
2) Price:
The second important component of marketing mix is price. Marketers must decide what price
to charge for the product or service. These decisions will influence the flow of revenue to
the company. Should the marketer charge the same, higher, or lower price in comparison to
competition? Is the consumer price sensitive and would a lower price stimulate sales?
Should there be any price with discounts? Do consumers perceive lower price indicative of
poor quality?
1.7 Marketing Mix
B) Influence of Marketing Mix Variables:

3) Promotion:
Promotion is concerned with marketing communications to consumers. The more important
promotion methods are advertising, personal selling, sales promotion, publicity and direct
marketing. The marketer has to decide which method would be most suitable to effectively
reach the consumers. Should it be advertising alone or should it be combined with sales
promotion? The company has to know the target consumers, their location, what media do
they have access to and what are their media preferences etc. In most cases of industrial
products, there is very little or no advertising.
4) Place:
Under these circumstances, the company decided to sell the product only through personal
selling, with salespeople calling directly on the consumer at her/his home. These salespeople
had enough time to explain and demonstrate the vacuum cleaner and convince prospects
about its usefulness. Retail outlets would not have been suitable for this sales approach. This
strategy was based on understanding of consumer behaviour and yielded good results.

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1.1 Environmental Influence on Consumer Behaviour

c) Culture and Consumer Behavior:

2) Culture is a set of Learned Responses :

4) Culture is Gratifying and Persistent:

6) Culture is an Organized and Integrated Whole:

7) Cultures are Similar yet Different:

11) Other Characteristics:

Regional, Ethnic, And Religious Influences On

Age, Gender, And Household Influence Consumer

B) Definition of Social Class:

Separation of Group as per Hierarchy

Sharing of Values and Pattern

Separation Of Individual Person into Group

Separation of Hierarchical Structure In a Country

Developing Common Behavioral Pattern

Identifying the Financial Capacities:

Determining Purchase Decisions

2) Separation of Group as per Hierarchy:

3) Sharing of Values and Pattern:

5) Separation of Hierarchical Structure In a Country:

7) Developing Common Behavioral Pattern:

8) Identifying the Financial Capacities:

9) Determining Purchase Decisions:

8) Identifying the Financial Capacities:

9) Determining Purchase Decisions:

2) Ogburn and Nimkoff

Status Norms Role Socialization Power

a) Meaning of Reference Group:

b) Types of Reference Group:

Full NEst 3 Full Nest 2

B) Family Life Cycle Stages :

B) Family Life Cycle Stages :

C) Purchasing Decision in Family Life Cycle:

Sex Roles And

Young Children Heuristics in Joint

C) Purchasing Decision in Family Life Cycle:

C) Purchasing Decision in Family Life Cycle:

C) Purchasing Decision in Family Life Cycle:

C) Purchasing Decision in Family Life Cycle:

B) Influence of Marketing Mix Variables:

B) Influence of Marketing Mix Variables:

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