1Intro and External Determinents

8/3/2019 1Intro and External Determinents

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B Y

P R O F . P A L L A V I S A J A N A P W A R

Introduction


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B E C A U S E N O L O N G E R C A N W E T A K E T H EC U S T O M E R / C O N S U ME R F O R G R A N T E D .

Why do we need to study

Consumer Behaviour?


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Failure rates of new products introduced

Out of 11000 new products introduced by 77companies, only 56% are present 5 years later.

Only 8% of new product concepts offered by 112leading companies reached the market. Out of that83% failed to meet marketing objectives.


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Consumer Behavior

The decision process and physical activity individualengage in when evaluating , acquiring , using ordisposing of goods, services or ideas .


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The questions Businesses try to understand

What makes customers tick.

Who buys?

How do they buy?

When do they buy?

Where do they buy?

Why do they buy?


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Studying consumers provides clues for

1. Improving/introducing products & services

2. Setting prices

3. Devising channels

4. Crafting messages

5. Developing other marketing activities

6. Look for emerging trends and new opportunities

To understand the buyer and to create a customerout of him


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Buyer Behaviour

4Ps Marketing

Environment

Buyer

Characteristics

Buyer

Decision Process

Buyer

Decision

Consumer


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Buyer characteristics

Factors influencing Consumer Behaviour

External Determinants Internal Determinants


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Overall Model Of Consumer Behavior


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Internal Determinants

1. Perception

2. Learning

3. Memory

4. Personality5. Emotion

6. Attitude

7. Motives


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External Determinants

1. Culture

2. Subculture

3. Social Class

4. Social Group5. Family

6. Reference Group

7. Opinion leader


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The Concept of Culture

Culture: The complex whole that includesknowledge, belief, art, law, morals, customs,and any other capabilities and habits

acquired by humans as members of society Key issues: Comprehensive

Acquired

Boundaries Seldom Aware


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Cultural Factors


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Variations in Cultural Values

Environment-

oriented

values

Other-

oriented

values

Self-oriented

values

Consumption

Purchase

Communications

Societys view

of relationships

between people

Societys view

of relationships

with environment

Objectives/

approaches

to life society

finds desirable


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Other-oriented Values

Individual/Collective: Membership

Extended/Limited Family:Grandparents

Adult/Child: US versus other Countries

Masculine/Feminine: Rank, Prestige

Competitive/Cooperative: Comparative

Ads

Youth/Age: Elders


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Environment-oriented Values

Cleanliness: How Much?

Performance/Status: Branded Goods

Tradition/Change: Innovation

Risk taking/Security: Entrepreneur

Problem-solving/Fatalistic:Acceptance

Nature: Social Responsibility


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Self-oriented Values

Active/Passive: DO SOMETHING!

Material/Nonmaterial:Instrumental/Terminal

Hard work/Leisure: Vacation?

Postponed gratification/Immediategratification: Credit

Sensual gratification/Abstinence:Differences

Humor/Serious: Superficial


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Factors Influencing NonverbalCommunication


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Sub Culture


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Nature of Subcultures

A segment of a larger culturewhose members sharedistinguishing patterns ofbehavior.


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Sub Culture

It is based on the social history of the group as wellas current situation.

Ethnic Groups, Religion and Geographical region

is base for the sub culture. Individual can be part of more than one sub

culture.

Which subculture dominates a particular targetgroup is major task in front of the manager.


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Identification Produces UniqueMarket Behaviors

Culture and subculture defines the Product


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Point of Study for Subculture :

Demographic Characteristics

Size

Location

Income and Employment Education

Family and Age

Psychographic characteristics


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Marketing Implications of Subculture :

Product Purchase Patterns

Shopping Behavior

Promotion


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Sub cultures in India

Differences in Festival

Religious norms

Eating Habit

Clothing


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Social Class ,Group and Family


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Social Class Influence

Social classrepresents an interesting way to look ata market; influenced by such factors as education,occupation, and place of residence

may be used as a basis for segmenting markets, andmay reflect the aspirations of consumers

social classes exist whether people care to admit it or

not; differences in beliefs and attitudes exist acrossclass boundaries; and social class may be a betterpredictor of buyer behaviour than income


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Understanding Stratification

Rossides (1997) uses five-class model to describe U.S. classsystem:

Upper class

Upper-middle classLower-middle class

Working class

Lower class

.

Systems of Stratification Social Classes

Income inequality basic characteristic of class

system

The Social Class


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The Social ClassSystem

The Upper

Class

(2%)

The Upper (Old Money) The Lower (New Rich)

The Middle

Class

(45%)

The Upper (12%)

Moderately successful business

people, professionalsThe Lower (32%)

White collar workers, technicians,

small business owners

The Lower

Class(54%)

The Upper (38%)Blue collar (working class)

The Lower (16%)Unskilled, chronically unemployed,

welfare poor


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Groups


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Reference Group Influence

Reference groups are those with whom we interactand who influence our attitudes, values and

behaviour

Small reference groupsestablish norms thatinfluence purchase decisions, and their word-of-mouth is considered to be more powerful than

advertising and other commercial forces.


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Broad categories of reference groups

Normative reference groups : Family and House hold

Comparative reference groups :Neighbourhood, College etc.

Indirect Reference Group : TV stars, Political leaders

Formal and informal/friendship groups

Membership Vs Aspirational groups

Positive vs Negative groups

Virtual groups or communities

h ff f


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Factors That Affect Reference GroupInfluence :

Information and Experience

Credibility , Attractiveness and Power of Reference

group Conspicuousness of the product

Reference groups and consumer conformity.


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Types of reference groups

Reference groups

Formal & informal groups

Primary/secondary groups

Membership groups

Aspirational groups

Dissociative groups

Distinctions &characteristics Formal reference groups have

clearly specified structure, informalgroups do not

Primary reference groups involvedirect, face-to-face interactions;

secondary groups do not

people become formal members ofmembership reference groups

People aspire to join or emulateaspirational reference groups

People seek to avoid or rejectdissociative reference groups


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The Nature of Reference Group Influence

Informational: when an individual usesbehavior and opinions of reference groupmembers as potentially useful bits ofinformation

Normative: when an individual fulfillsgroup expectations to gain a direct reward orto avoid a sanction

Identification: when individuals haveinternalized the groups values and norms


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Discussion Question (#31)

How important are reference groups to the purchaseof these products? Would their influence also affectthe brand or model? Would their influence beinformational, normative, or identification?

a. Mobile Phone

b. Bike

c. Traditional weard. An Internet connection

e. Volunteering with a nonprofitorganization


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Family


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Household Influenceson Consumption Decisions


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Family influences

The importance of the family is also emphasised by itsvarious functions to marketers-The family as a consumption unit-A purchasing unit

-A financial resource- A source of information- A source of physical satisfaction- A source of emotional satisfaction


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Family

Household Influences the most ConsumptionDecisions.

Structure of Family

Stage of FamilyLife Cycle

FamilyDecision Process

Family Purchaseand

Consumption

Behavior

MarketingStrategy


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Stages of Family

Each stage represents unique needs and wants awell as financial conditions and experiences from aparticular social class and group.

Bachelor stage

Young married couple

Full nest I

Full nest II

Empty nest Retired people

Special Category


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Stages of Family

For each stage three parameters play important rolein the purchase behavior

Financial Situation

Market behavior What do they pay for?


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Types of Roles Found in Families

Everyone has a role:

Users: Persons who use/consume theproduct

Gatekeepers: Information Controllers Influencers: Evaluation Assistants

Deciders: Actual Decision Makers

Buyers: Purchase Makers Maintainers: Maintenance Personnel


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Family decision-making

Kotler distinguishes five buying roles which must betaken into consideration in analyses of familyconsumption behaviour

The initiator

The influencer

The decider

The purchaser

The user

It is common for individuals in a family to carry outdifferent and sometimes more than one role in thepurchase process


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Consumer Behavior Roles

Initiator The person who first suggests or thinks of the idea of

buying a particular product or service Influencer A person whose view or advice influences the buying

decision Decider The individual with the power and/or financial authority to

make the ultimate choice regarding which product to buy Buyer

The person who concludes the transaction User The person (or persons) who actually uses the product or

service


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Consumer Behavior Roles :

Initiator : The individual who determines that some need

or wan is not being me and authorizes a purchaseto rectify the situation.

Influencer :

A person who by some intentional orunintentional word or actions influences thepurchase decision , the actual purchase and orthe use of product or service .


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Consumer Behavior Roles :

Buyer :

The individual who actually makes the purchasetransaction.

User :

The person most directly involved in theconsumption or use of the product.


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Consumer Behavior Roles : Example :

Initiator : Architect suggesting for

the kitchen amenities .

Influencer :

Interior designersuggesting the designs.

Decider : The woman in the family

Buyer :

The head of the Family

User :

The women in the familyor the maid.

Implication of family decision making for


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Implication of family decision making formarketers

Marketers must find out whether a woman or man in thehousehold is the buyer or decision-maker for the product.

Whether it is parents or children who usually finds out firstabout products or brands

Who in the family has the power to persuade the buyer tomake a particular brand choice and purchase

The above information may determine the productpositioning (ie masculine/feminine, youthful/matureimage)

May also determine distribution and promotion pattern May determine target audience for information

This information comes from study of?


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Opinion Leadership

An Opinion Leader is a person who informally influencesthe actions or attitudes of others

He/she may be a leader in relation to certain products

Opinion Leader has the following characteristics

Knowledge and interest Consumer innovators Media choice


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Opinion Leadership

Characteristics of opinion leader


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Assignment

Case study Rambir singh and family

To be discussed on February 22, 2011 from 10 a.m.to 1p.m.

Documents

1Intro and External Determinents