Social Class and

Consumer Behavior

Consumer Behavior
 The division of
members of a society
into a hierarchy of
distinct status classes,
Social Class so that members of
each class have either
higher or lower status
than members of other
classes.

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 Status Consumption
• Consumers endeavor to increase their
social standing through consumption
• Very important for luxury goods
• Is different from conspicuous consumption

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 Social Class Measurement
• Subjective Measures
– individuals are asked to estimate their own social-
class positions
• Reputational Measures
– informants make judgments concerning the social-
class membership of others within the community
• Objective Measures
– individuals answer specific socioeconomic
questions and then are categorized according to
answers

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 Objective Measures
• Single-variable • Composite-variable
indexes indexes
– Occupation – Index of Status
– Education Characteristics
– Income – Socioeconomic
– Status Score
Other Variables

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 A composite
measure of social
class that combines
occupation, source
Index of Status of income (not
Characteristics amount), house
(ISC) type/dwelling area
into a single
weighted index of
social class
standing.

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 A multivariable social
class measure used by
the United States
Bureau of the Census
Socioeconomic
that combines
Status Score
occupational status,
(SES) family income, and
educational attainment
into a single measure of
social class standing.

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 A composite
segmentation
strategy that uses
both geographic
variables (zip codes,
Geodemographic
Clusters
neighborhoods) and
demographic
variables (e.g.,
income, occupation)
to identify target
markets.

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 A composite index of
geographic and
socioeconomic factors
PRIZM
expressed in
(Potential
residential zip code
Rating Index
neighborhoods from
by Zip
which
Market)
geodemographic
consumer segments
are formed.

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 The Affluent Consumer
• Especially attractive target to marketers
• Growing number of households can be classified
as “mass affluent” with incomes of at least
$75,000 (Rs. 25 lacs in Indian context)
• Some researchers are defining affluent to
include lifestyle and psychographic factors in
addition to income
• Have different medial habits than the general
population

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The Influence of Culture
on Consumer Behavior

Consumer Behavior
 The sum total of learned
beliefs, values, and
customs that serve to
Culture
regulate the consumer
behavior of members of
a particular society.

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A Theoretical Model of Cultures’
Influence on Behavior

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 Culture Is Learned
Issues

• Enculturation and • Enculturation

acculturation – The learning of one’s
own culture
• Language and
• Acculturation
symbols – The learning of a
• Ritual new or foreign
• Sharing of culture culture

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 Culture Is Learned
Issues

• Enculturation and • Without a common

acculturation language shared
• Language and meaning could not exist
symbols • Marketers must choose
• Ritual appropriate symbols in
• Sharing of culture advertising
• Marketers can use
“known” symbols for
associations 11 - 15
 Culture Is Learned
Issues

• Enculturation and • A ritual is a type of

acculturation symbolic activity
• Language and consisting of a series of
symbols steps
• Ritual • Rituals extend over the
• Sharing of culture human life cycle
• Marketers realize that
rituals often involve
products (artifacts) 11 - 16
 Culture Is Learned
Issues
• To be a cultural
• Enculturation and characteristic, a belief,
value, or practice must
acculturation
be shared by a
• Language and significant portion of the
symbols society
• Ritual • Culture is transferred
• Sharing of Culture through family, schools,
houses of worship, and
media
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 Selected Rituals and Associated Artifacts

SELECTED RITUALS TYPICAL ARTIFACTS

Wedding White gown (something old, something new,
something borrowed, something blue)
Birth of child Government Savings Bond, silver baby spoon
Birthday Card, present, cake with candles
50th Wedding anniversary Catered party, card and gift, display of photos of the
couple’s life together
Graduation Pen, U.S. Savings Bond, card, wristwatch
Valentine’s Day Candy, card, flowers
New Year’s Eve Champagne, party, fancy dress
Thanksgiving Prepare a turkey meal for family and friends

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The Measurement of Culture
• Content Analysis
• Consumer Fieldwork
• Value Measurement Instruments

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

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 A cultural measurement
technique that takes
place within a natural
Field environment that
Observation focuses on observing
behavior (sometimes
without the subjects’
awareness).

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 Characteristics of Field
Observation
• Takes place within a natural environment
• Performed sometimes without the
subject’s awareness
• Focuses on observation of behavior

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 Researchers who
participate in the
Participant- environment that they
Observers are studying without
notifying those who
are being observed.

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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
• Values and Lifestyles (VALS)
– A value measurement based on two categories:
self-definition and resources

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 A distinct cultural group
that exists as an
Subculture identifiable segment
within a larger, more
complex society.

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 Examples of Major Subcultural
Categories

CATEGORIES EXAMPLES
Nationality Indian, Japanes, Italian, Russian
Religion Hindu, Catholic,
Geographic region Eastern, Southern, Western

Race African American, Asian,

Age Teenagers, elderly

Gender Female, Male
Occupation Scientist, Consultant,
Social class Lower, middle, upper

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 An ad
showing
many racial
subcultures

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 Regional Subcultures
• Many regional differences exist in
consumption behavior
– Westerners have a mug of black coffee
– Easterners have a cup of coffee with milk
and sugar
– White bread is preferred in the South and
Midwest
– Rye and whole wheat are preferred on the
East and West coasts

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Consumer Behavior
Consumer Behavior

Opinion Leadership
Process and
Diffusion of Innovation
 The process by which
one person (the
opinion leader)
informally influences
Opinion
the consumption
Leadership
actions or attitudes of
others who may be
opinion seekers or
opinion recipients.

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Reasons for the Effectiveness of
Opinion Leadership
• Credibility
• Positive and Negative Product
Information
• Information and Advice
• Opinion Leadership Is Category-
Specific
• Opinion Leadership Is a Two-way
Street

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 Viral Marketing
• Buzz Marketing
• Wildfire Marketing
• Avalanche Marketing
These terms describe any strategy that
encourages individuals to pass on a
marketing message to others;
The marriage of email and word-of-mouth
communication

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 Motivations Behind Opinion
Leadership
• The Needs of Opinion Leaders
• The Needs of Opinion Receivers
• Purchase Pals
• Surrogate Buyers versus Opinion Leaders

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 The Needs of Opinion Leaders

• Self involvement
• Social involvement
• Product involvement
• Message involvement

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The Needs of Opinion Receivers
• New-product or new usage information
• Reduction of perceived risk
• Reduction of search time
• Receiving the approval of the opinion
leader

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 A Comparison of Motivations
(Excerpts)
OPINION LEADERS OPINION RECEIVERS
SELF-IMPROVEMENT
MOTIVATIONS • Reduce the risk of making a purchase
• Reduce post-purchase uncertainty or commitment
dissonance • Reduce search time
• Gain attention or status
• Assert superiority and expertise
• Feel like an adventurer

PRODUCT-INVOLVEMENT
MOTIVATIONS • Learn how to use or consume a product
• Express satisfaction or dissatisfaction
with a product or service
• Learn what products are new in the
marketplace

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 Profile of Opinion Leaders

GENERALIZED
CATEGORY-SPECIFIC
ATTRIBUTES ACROSS
ATTRIBUTES
PRODUCT CATEGORIES
Innovativeness Interest
Willingness to talk Knowledge
Self-confidence Special-interest media exposure
Gregariousness Same age
Cognitive differentiation Same social status
Social exposure outside group

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 Individuals whose
influence stems from a
general knowledge or
Market
market expertise that
Maven
leads to an early
awareness of new
products and services.

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 The process by which
the acceptance of an
innovation is spread by
Diffusion
communication to
Process
members of social
system over a period of
time.

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 The stages through
which an individual
consumer passes in
Adoption arriving at a decision to
Process try (or not to try), to
continue using (or
discontinue using) a new
product.

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 Elements of the Diffusion
Process
• The Innovation
• The Channels of Communication
• The Social System
• Time

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 Defining Innovations
• Firm-oriented definitions
• Product-oriented definitions
• Market-oriented definitions
• Consumer-oriented definitions

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Product-Oriented Definitions

Continuous
Innovation

Dynamically
Continuous
Innovation

Discontinuous
Innovation

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Product Characteristics That
Influence Diffusion
• Relative Advantage
• Compatibility
• Complexity
• Trialability
• Observability

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Characteristics That Influence Diffusion

CHARACTERISTICS EXAMPLES

Air travel over train travel, cordless

Relative
phones over corded telephones
Advantage

Gillette MACH3 over disposable

Compatibility razors, digital telephone answering
machines over machines using tape

Electric shavers, instant puddings

Complexity

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 (continued)
CHARACTERISTICS EXAMPLES

Trial size jars and bottles of new

Trialability products, free trials of software,
free samples, cents-off coupons

Clothing, such as a new Tommy

Observability Hilfiger jacket, a car, wristwatches,
eyeglasses

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 Time and Diffusion
• Purchase Time
• Adopter Categories
• Rate of Adoption

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 A sequence of
categories that
describes how early (or
Adopter
late) a consumer
Categories
adopts a new product
in relation to other
adopters.

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 Adopter Categories

Early Laggards
Adopters
13.5% Early Late 16%
Majority Majority
Innovators 34%
34%
2.5%

Percentage of Adopters by Category Sequence

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 Innovators: Description

• 2.5% of population
• Venturesome
• Very eager to try new ideas
• Acceptable if risk is daring
• More cosmopolite social relationships
• Communicates with other innovators

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 Early Adopters: Description

• 13.5% of population
• Respected
• More integrated into the local social system
• The persons to check with before adopting a
new idea
• Category contains greatest number of
opinion leaders
• Are role models

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 Early Majority: Description

• 34% of population
• Deliberate
• Adopt new ideas just prior to the average
time
• Seldom hold leadership positions
• Deliberate for some time before adopting

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 Late Majority: Description
• 34% of population
• Skeptical
• Adopt new ideas just after the average
time
• Adopting may be both an economic
necessity and a reaction to peer pressures
• Innovations approached cautiously

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 Laggards: Description

• 16% of population
• Traditional
• The last people to adopt an innovation
• Most “localite” in outlook
• Oriented to the past
• Suspicious of the new

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 Stages in Adoption Process
WHAT HAPPENS
NAME OF DURING THIS EXAMPLE
STAGE STAGE
Consumer is first Janet sees an ad for a new MP3 player in
Awareness exposed to the product the magazine she is reading.
innovation.
Consumer is interested in Janet reads about the MP3 player on the
the product and searches manufacturer’s Web site and then goes to
Interest
for additional an electronics store near her apartment and
information. has a salesperson show her a unit.
Consumer decides After talking to a knowledgeable friend,
whether or not to believe Janet decides that this MP3 player will
that this product or allow her to easily download the MP3 files
Evaluation
service will satisfy the that she has on her computer. She also
need--a kind of “mental feels that the unit’s size is small enough to
trial.” easily fit into her beltpack.

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 Stages in Adoption Process (cont.)
WHAT HAPPENS
NAME OF DURING THIS EXAMPLE
STAGE STAGE
Consumer uses the Since an MP3 player cannot be “tried” like
product on a limited a small tube of toothpaste, Janet buys the
Trial basis MP3 player online from Amazon.com,
which offers a 30-day full refund policy.

If trial is favorable, Janet finds that the MP3 player is easy to

consumer decides to use use and that the sound quality is excellent.
the product on a full, She keeps the MP3 player.
Adoption rather than a limited
(Rejection) basis--if unfavorable, the
consumer decides to
reject it.

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Consumer Behavior
Consumer Behavior

Consumer Decision
Making and Beyond
Levels of Consumer Decision
Making

Extensive Problem
Solving

Limited Problem
Solving

Routine Response
Behavior

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 Models of Consumers: Four
Views of Consumer Decision
Making
• An Economic View
• A Passive View
• A Cognitive View
• An Emotional View

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 Goal Setting and Pursuit

Feedback

Goal
Goal Attainment/
Setting Failure

Formation Action
Action
of Goal Initiation/
Planning
Intention Control

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 Three Stages of Consumer
Decision Making
• Need Recognition
• Prepurchase Search
• Evaluation of Alternatives

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 Factors that are Likely to Increase Pre-
purchase Search

Product Factors
Long interpurchase time (a long-lasting or
infrequently used product)
Frequent changes in product styling
Volume purchasing (large number of units)
High price
Many alternative brands
Much variation in features

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 Factors that are Likely to Increase Pre-
purchase Search (continued)
Situational Factors
Experience
First-time purchase
No past experience because the product is new
Unsatisfactory past experience within the product category
Social Acceptability
The purchase is for a gift
The product is socially visible
Value-Related Considerations
Purchase is discretionary rather than necessary
All alternatives have both desirable and undesirable consequences
Family members disagree on product requirements
Product usage deviates from important reference group
The purchase involves ecological considerations
Many sources of conflicting information
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 Factors that are Likely to Increase Pre-
purchase Search (continued)
Product Factors
Demographic Characteristics of Consumer
Well-educated
High-income
White-collar occupation
Under 35 years of age
Personality
Low dogmatic
Low-risk perceiver (broad categorizer)
Other personal factors, such as high product involvement and
enjoyment of shopping and search

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Alternative Pre-purchase Information
Sources for an Ultralight Laptop

PERSONAL IMPERSONAL

Friends Newspaper articles

Neighbors Magazine articles
Relatives Consumer Reports
Co-workers Direct-mail brochures
Computer salespeople Information from product
Calling the electronics store advertisements
Internal web site

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 Issues in Alternative Evaluation
• Evoked Set (Consideration set)
• Criteria Used for Evaluating Brands
• Consumer Decision Rules
• Lifestyles as a Consumer Decision Strategy
• Incomplete Information and Noncomparable
Alternatives
• Series of Decisions
• Decision Rules and Marketing Strategy
• Consumption Vision

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 The Evoked Set as a Subset of All
Brands in a Product Class
All
Brands

Known Unknown
Brands Brands
(1)
Evoked Set Inept Set Inert Set
Acceptable Unacceptable Indifferent Overlooked
Brands Brands Brands Brands
(2) (3) (4)

Purchased Not Purchased

Brands Brands
(5)
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 Brands that a consumer
Inept Set excludes from purchase
consideration.

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 Brands that a consumer
is indifferent toward
Inert Set because they are
perceived as having no
particular advantage.

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 Consumer Decision Rules
• Compensatory Decision Rule

• Non-compensatory Decision Rule

– Conjunctive Decision Rule
– Disjunctive Decision Rule
– Lexicographic Rule

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 A type of decision
rule in which a
consumer evaluates
each brand in terms
Compensatory
of each relevant
Decision Rules
attribute and then
selects the brand
with the highest
weighted score.

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 A type of consumer
decision rule by
which positive
Non-
evaluation of a brand
compensatory
attribute does not
Decision
Rules compensate for a
negative evaluation of
the same brand on
some other attribute.

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 A non-compensatory
decision rule in which
consumers establish a
minimally acceptable
Conjunctive cutoff point for each
Decision attribute evaluated.
Rule Brands that fall below
the cutoff point on any
one attribute are
eliminated from further
consideration.

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 A non-compensatory
decision rule in which
consumers establish a
Disjunctive
minimally acceptable
Rule
cutoff point for each
relevant product
attribute.

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 A non-compensatory
decision rule -
consumers first rank
product attributes in
Lexicographic
terms of importance,
Rule
then compare brands
in terms of the
attribute considered
most important.

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 A simplified decision
rule by which consumers
make a product choice
Affect
on the basis of their
Referral
previously established
Decision
overall ratings of the
Rule
brands considered, rather
than on specific
attributes.

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 Hypothetical Use of Popular Decision Rules in
Making a Decision to Purchase an Ultralight
Laptop
DECISION RULE MENTAL STATEMENT
Compensatory rule “I selected the computer that came out best when I
balanced the good ratings against the bad ratings.”

Conjunctive rule “I selected the computer that had no bad features.”

Disjunctive rule “I picked the computer that excelled in at least one

attribute.”
Lexicographic rule “I looked at the feature that was most important to me and
chose the computer that ranked highest on that attribute.”

Affect referral rule “I bought the brand with the highest overall rating.”

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 Coping with Missing Information

• Delay decision until missing information

is obtained
• Ignore missing information and use
available information
• Change the decision strategy to one that
better accommodates for the missing
information
• Infer the missing information

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 Types of Purchases

Trial Repeat
Purchases Purchases

Long-Term
Commitment
Purchases

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 Outcomes of Post-purchase
Evaluation
• Actual Performance Matches Expectations
– Neutral Feeling
• Actual Performance Exceeds Expectations
– Positive Disconfirmation of Expectations
• Performance is Below Expectations
– Negative Disconfirmation of Expectations

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