CONSUMER BEHAVIOR

Understand External Factors that influence Consumer behaviour –

Cultural, Subculture, Social, Reference Groups

CHAPTER:2

Image source:https://www.marketingprofs.com/articles/2017/31629/five-ways-to-gain-customer-insight-a-guide-for-marketers
• Course learning outcome : Understand External Factors that influence
Consumer behaviour – Cultural, Subculture, Social, Reference Groups

• Content
• Factors influencing consumer behavior (Characteristics affecting consumer behavior)
• Cultural factors, Characteristics of culture,Subculture,Social class
• Reference Groups
• Importance of reference groups
• Types of reference groups influence
• Categories or types of reference groups
 Factors influencing consumer behavior
external factors(4 factors)
Consumer purchases are strongly influenced by cultural,
social, personal, and psychological characteristics.

Cultural Social(society) Personal Psychological

Culture(traditi Reference Age and life cycle stage Way of thinking
on) groups(advice ,opini Occupation Motivation
Sub culture on,help) Economic situation Perception
Social class Family Personality and self- Learning
Ex::tradition Roles and status concept ex.based on age Beliefs and attitudes
(food Ex family friends product preference is Ex based on the
language ,hab different like food advertisement and
its)place,tribe, attraction
religion

Factors influencing consumer behavior explain with the help of examples

• Cultural factors
• E.B. Taylor defined culture as “that complex whole
which includes knowledge, belief(trust), morale, law,
custom and any other capabilities and habits as
acquired by man as a member of society.”
• Cultural factors have a broad and deep influence on
consumer behavior. Culture is a set of basic values,
perceptions, norms and behaviors learned by a
consumer from the family and other institutions.
Culture establishes the values, attitudes, customary
behavior, religion and art of a given group of people.
Culture is the sum total of learned beliefs, values, and
customs that serve to regulate the consumer behavior
of members of a particular society. Thus culture is the
meanings that are shared by people in a social group.
• Characteristics of culture (tradition & habits)
• 1. Culture is social(society): Culture does not exist in
isolation. It develops through social interaction(talking).
People in a society acquire culture by association with others.
• 2. Culture is shared: Culture is shared among people in a
society. For example, customs, traditions, beliefs, ideas,
values, morale etc. are all shared by people in a group or
society.(teach culture to others)
• 3. Culture is learned: Culture is learned and often called
“learned ways of behaviour”. (see and learn)
• 4. Culture is transmitted: Culture is transmitted(transfer)
from one generation to another. Language makes it possible
for the present generation to understand the achievement of
earlier generations.
• 5. Culture is continuous and cumulative: Culture exists as
a continuous process. It tends to become cumulative.
• 6. Culture varies from society to society: Every society has a culture of its own. It
differs from society to society. Culture of every society is unique. Cultures are not
uniform(same). Cultural elements like customs, traditions, morale, values, and beliefs are
different in different societies.ex: different language in different countries
• 7. Culture is dynamic: Culture of a society undergoes constant change. Culture is major
factor for the changing conditions of the physical world. Hence culture is
dynamic.example tea or coffee instead of kahwa
• 8. Culture is satisfying: Culture provides proper opportunities for the satisfaction(happy
of our needs and desires. Our biological needs and social needs are fulfilled in cultural
ways(habits). Culture determines and guides various activities of man. Thus, culture is
defined as the process through which human beings satisfy their wants. (ex: dressing)
• 9. Culture is symbolic: The communication process uses symbols to identify the given
actions, attitudes and behaviors of the people.(language)
• 10. Culture is adaptive: The cultural adaptation is the evolutionary process that modifies
the social life of the people in an environment. The human adaptations uses innovative
way to create new cultural dimension on its way of life from the cultural transformation
of clothing, food shelter, music, arts including the beliefs, traditions and history.(person
may change or adjust according to place)
• Examples;
• In UK it is customary to offer a visitor a cup of tea or coffee
• In China it is customary to offer food
• Comparing television advertisements people in UK prefer humorous
advertisements than the US.
• Chevy Nova-in Spain means “Doesn’t go”
• In North America and Western Europe, consumers are independent, whereas
consumers of Japan, India, Africa, South America are highly interrelated.
• “American Motors” Matador brand had problems in Peurto Rico because
matador means “killer”.
• Some societies have favourite foods that represent culture, e.g. Mexicans love
chilies, Irish love Guinness, French love cheese, Americans love hamburgers.
• ‘Come alive, you are in the Pepsi generation’ means ‘Come alive out of the
grave’ (in Germany) and ‘Pepsi brings your ancestors back from the grave (in
China).
• Esso- name means ‘stalled car’ in Japan. (Slow moving)
• In the U.S and Canada, people try to reach decisions as quickly and
efficiently as possible. The top people are concerned with reaching an
agreement on the main points. In Greece this approach is considered negative.
A Greece executive assumes that anyone who ignores the details is
untrustworthy. Latin Americans prefer to make deals slowly, after much
discussion. Africans takes more time to make decisions.
• In China, receiving a clock as a gift is considered bad luck.
• For the signal “No”, people in U.S and Canada shake their heads
back and forth. In Bulgaria, they nod up and down. People in
Japan move their right hand to say “No”, while in Sicily, people
raise their chin.
• Meanings of Blue (Holland – warmth; Iran – death; Sweden –
coldness; India – purity)
• Meanings of Yellow (U.S. – warmth; France – fidelity (loyalty,
reliability or trustworthiness)
• White symbols purity in the U.S., it is a symbol of death in China. 
• Subculture

• Each culture contains smaller subcultures, or groups of

people with shared value systems based on common life
experiences and situations. Subculture refers to groups
within a society(country) which possess distinctive
characteristics(habits). Subcultures include nationalities,
religions, racial groups, and geographic regions. Many
subcultures make up important market segments, and
marketers design products and marketing programs to
their needs.
• Examples of four important subculture groups include
Hispanic, African-American, Asian and mature
consumers.
• The US Hispanic market – Americans of Cuban, Mexican, Central American,
South American, and Puerto Rican descent- consists of almost 42 million
consumers. They tend to buy more branded, higher quality products. They are
brand loyal. Procter & Gamble market their major brands Pantene, Tide,
Crest, and Pampers.
• African-American consumers (39 million) also attract much marketing
attention. The US black population is growing. They are price conscious and
strongly motivated by quality and selection. St.Joseph Aspirin focusing on
African-American comes in the dosage recommended by the Association of
Black Cardiologists for daily heart therapy.
• Asian Americans are the most affluent segment (12.5 million). Chinese
Americans constitute the largest group, followed by Filipinos, Japanese
Americans, Asian Indians, and Korean Americans. They shop frequently and
are the most brand conscious. Example; Wal-Mart stocks a large selection of
CDs and videos from Asian artists, Asian favored health and beauty products,
and children’s learning videos that feature multiple language tracks.
• Mature consumers (75 million) are the mature US population. They are better
off financially (rich)and have more time. This is the market for exotic travels,
restaurants, high-tech home entertainment products, leisure goods and
services, designer furniture and fashions, financial services and health care
services, cosmetics, personal care products, health foods, fitness products.
(buy expensive product and enjoy)
• Major age subcultures
• Generation Y: Born between 1977 and 1994; also called
echo boomers and millennium generation. They are
more likely to switch brands quicker than other segments
• Generation X: Born between 1965 and 1979; post baby
boomer segment (also referred to as Xers or busters).
They need to buy products to set up households and for
young children. They often shop at value-oriented
retailers. (aged,home)
• Baby Boomers: Individuals born between 1946 and
1964. Their demand includes (old and enjoy) luxury
travel, spas, health clubs, cosmetics, salons, diet plan
foods, and health foods
• Seniors: Generally older consumers. Consist of
subcultures, including the 50-plus market and the
“elderly consumers” market.safe
• Social class

• Social classes are relatively homogenous

divisions in a society whose members share
similar values, interests and behavior. It is
measured as a combination of occupation,
income, education, wealth and other variables.
Social classes show distinct product and brand
preferences in areas such as clothing, home
furnishings, leisure activity and automobiles.
• Characteristics of social classes

• People within each social class behave similar

than people from two different social classes
• People are considered superior or inferior
according to their social class
• A person’s social class is determined by
occupation, income, wealth, education etc
• Individuals can move from one social class to
another- up or down- during their life time.
• Example; The major American social classes
 Upper class
Upper Uppers (1%) social elite class, live on inherited wealth
Upper Lower (2%) earned high income through their ability, active in social affairs, buy
In expensive homes, cars etc.
co
m
e
Middle class
Middle Upper (12%) professionals, independent business persons, and corporate
managers, educated
Oc Middle class (32%) average pay, white and blue collar workers
cu
pa
tio
n
Working class
Working class (38%) working class life style, depend heavily on relatives for economic and
emotional support and get advices on purchases.
Ed
uc
ati
on
Lower Class
Lower Upper (9%) working poor, lack education
Lower lowers (7%) very poor, uneducated, unskilled labourers
W
ea
lth
Group
• Introduction

• A group consists of two or more people

who interact with each other accomplish
some goal. Important groups include
families, close friends, co-workers,
neighbours etc. Some of these groups may
become reference groups.
• Reference Groups

• A reference group involves one or more people

whom someone uses as a basis for comparison or
point of reference in forming affective and
cognitive responses and performing behavior.
• Reference groups serve as direct (face to face) or
indirect points of comparison or reference in
forming a person’s attitudes or behavior. People
are influenced by reference groups to which they
do not belong. Marketers try to identify the
reference groups of their target markets.
• Importance of reference groups

• Reference groups expose a person to new behaviours and life styles.

• Influence the person’s attitudes and self-concept.
• Create pressures to conform that may affect the person’s product and
brand choices.
• Group influence varies across products and brands
• Group influence tends to be strongest when the product is visible to
others whom the buyer respects.
• Opinion leaders

• Opinion leaders are people within a reference group, who

because special skills, knowledge, personality or other
characteristics exerts influences on others. These
consumers drive trends and influence mass opinion. They
are also called influencials or leading adopters.
• Marketers try to identify opinion leaders for their products
and direct marketing efforts towards them. They use buzz
marketing by enlisting or even creating opinion leaders to
spread the word about their brands. Example; mothers
discuss about a new dish wash or a food item. Children talk
about the taste of a new health drink. They are the best
source to capture “honest word of mouth” and to build a
network that will turn passionate consumers into brand
evangelists”.
• Types of reference groups influence
• Informational reference group influence transmits useful
information to consumers about products, services, and stores from
other people. Consumers tend to be influenced by reference groups if
the information is perceived as reliable and trustworthy. Thus
consumers reduce the risk of making a decision. Highly credible
reference groups are more likely to have informational influence on
consumers.
• Utilitarian reference group influence on consumer behavior (affect and
cognition) occurs when the reference group controls important rewards
and punishments. It concerns a degree of conformity with the behavior
or norms of a group with which the consumers want to identify. An
individual may purchasea brand because they want to comply with the
expectations of others. (eg; family members or colleagues at work etc)
• Example; in some work groups, people are expected to wear formal
business suits, whereas other work groups encourage very casual dress.
• Value expressive reference group influence can affect people’s self-
concepts. As cultural units, reference groups create cultural meanings
(beliefs, values, goals, behavioual norms, life styles). People seek
desirable cultural meanings in maintaining self-concepts. By
identifying with certain reference groups, consumers can draw
meanings and use it of their own.
• Categories or types of reference groups

• Primary groups: A primary group is a small group where there is a face

to face interaction on a regular basis. This group is composed of people
we most often see like friends, family, close colleagues.
• Secondary groups: They are composed of people we see occasionally,
with whom we have some shared interest. Example; a trade association,
sports club. These groups are less influential in shaping attitudes and
controlling behavior.
• Aspirational groups: are the groups which the individuals want to join.
These groups can be very powerful in influencing behavior, because the
individual will often adopt the behavior of the aspirational group in the
hope of being accepted as a member.
• Dissociative group: The individual does not want to be associated with
the group. This can have a negative effect on behavior. The individuals
avoids certain products or behavior rather than be mistaken for
somebody from the dissociative group.
• Formal groups: have a known list of members. Example;
professional association or a club. The rules and structure
of the group are laid down in writing. There are rules for
membership and the members’ behavior is constrained
while they remain part of the group.
• Informal groups: are less structured and based on
friendship. Example; individual’s circle of friends. They
exist only for mutual moral support, company and sharing
experiences.

• Automatic groups: are those groups one belongs by virtue

of age, gender, culture and education. They are also called
as category groups. Members have not joined voluntarily,
and people are influenced by group pressure to buy.
• Virtual groups: On line virtual groups (communities) are created
due to the wide spread growth of the World Wide Web. New
technologies permit to make direct connections with others by the
elimination of middlemen. This process is known as
disintermediation.
• Likeminded people come together irrespective of time and space to
form groups and a variety of networks. This process is called
aggregation.
• Research on internet cultures revealed that online groups are
market oriented in their interest. This is referred as “virtual
communities of consumption”.
• Membership reference groups: A membership reference group is
one to which a person belongs or qualifies for membership. All
workers in a factory qualify for membership to the labor union.
• Symbolic reference groups: A symbolic reference group is one
which an individual aspires to belong to, but is not likely to be
received as a member.
• 
• Influence of reference groups in purchase
• 1. Normative influence:
• This influence is one, in which the consumer had direct
relation or face to face relation and influence on the
consumer buying decision and behavior. For example,
family and friends
• 2. Comparative influence:
• The consumer has indirect relation and less face to face
interaction, such type of groups attract the consumer and
the consumer gradually start to adopt the life style of the
personalities lying in the comparative reference group.
For example celebrities, sportsmen and other popular
personalities.
• 
• The Importance of Families and Households on Consumer
Behavior
•  Many products are purchased by a family unit.
• Individual’s buying decisions may be heavily influenced by other
family members.
• Purchase decisions of families depend on the roles of the various
members in the purchase, consumption, and influence of products. 
• References:

• Course materials prepared by Mr. Renjith Kumar and updated by Mr. Musthaq Ahmed in the year 2013-2014 semesters.
• Martin Evans, Ahmad Jamal, & Gordon Foxall, Consumer Behavior, 2006, John Wiley & Sons, England.
• Paul J. Peter and Jerry C Olson, Consumer Behavior and Marketing Strategy, Eighth edition, 2008, Mc Graw Hill
International edition, Singapore.
• Philip Kotler, Marketing Management, Analysis, Planning, Implementation and Control, Prentice Hall of India Pvt Ltd.
• Gary Armstrong and Kotler Philip, Marketing, An Introduction, 8th edition, 2007, Pearson Prentice Hall, New Jersey
• Jim Blythe, Principles and Practice of Marketing, 2008, Thomson Learning, London
• http://www.preservearticles.com/201101173455/characteristics-of-culture.html
• http://savior.hubpages.com/hub/Characteristics-of-Culture
• References:
• Martin Evans, Ahmad Jamal, & Gordon Foxall, Consumer Behaviour, 2006, John Wiley & Sons, England.
• Paul J. Peter and Jerry C Olson, Consumer Behaviour and Marketing Strategy, Eighth edition, 2008, Mc Graw Hill
International edition, Singapore
• PhilipKotler, Marketing Management, Analysis, Planning, Implementation and Control, Prentice Hall of India Pvt Ltd.
• Gary Armstrong and Kotler Philip, Marketing, An Introduction, 8th edition, 2007, Pearson Prentice Hall, New Jersey
• Jim Blythe, Principles and Practice of Marketing, 2008, Thomson Learning, London
• http://www.marketing91.com/reference-groups-in-consumer-buying/
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VERSION HISTORY

Version No Date Approved Changes incorporated

01 Sem. (I) 2022/2023

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