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Consumer Behavior Consumer Behavior Environmental influences Environmental Environmental influences on influences on consumer behavior consumer behavior

Consumer Behavior Environmental influences Environmental influences on consumer behavior

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Page 1: Consumer Behavior Environmental influences Environmental influences on consumer behavior

Consumer BehaviorConsumer BehaviorEnvironmental influences

Environmental Environmental

influences on influences on

consumer behaviorconsumer behavior

Page 2: Consumer Behavior Environmental influences Environmental influences on consumer behavior

Consumer BehaviorConsumer BehaviorEnvironmental influences

Environmental influences• physical environment: collection of nonhuman

elements that comprise the field in which consumer behavior occurs (spatial and nonspatial elements);

• social environment: all human activities and interactions;

– culture– subculture– social class– reference groups– family

Page 3: Consumer Behavior Environmental influences Environmental influences on consumer behavior

Consumer BehaviorConsumer BehaviorEnvironmental influences

In-class exercise: Hofstede’s cultural dimensions

Go to http://www.geert-hofstede.com/index.shtml and read the descriptions of the four primary dimensions of cultural variation (power distance, individualism, masculinity, and uncertainty avoidance). How does the U.S. rate on the four dimensions? Which countries are highest and lowest on each dimension? What are the marketing implications of a country’s standing on each dimension?

Page 4: Consumer Behavior Environmental influences Environmental influences on consumer behavior

Consumer BehaviorConsumer BehaviorEnvironmental influences

Dimensions of cultural variation (Hofstede 1980)

• power distance:

• uncertainty avoidance:

• individualism/collectivism:

• masculinity/femininity:

Page 5: Consumer Behavior Environmental influences Environmental influences on consumer behavior

Consumer BehaviorConsumer BehaviorEnvironmental influences

• use of status symbols• showing people alone or as part of a group• long copy and testimonials by experts• respect for old age• nonconforming lifestyles• men or women in nontraditional roles• importance of being well-groomed• nuclear vs. extended family• “It’s so good, you want to keep it for yourself” vs. “It’s so

good, you want to share it with others”• “Be the best” or “Big is beautiful” vs. “Brilliant in its

simpleness”

Page 6: Consumer Behavior Environmental influences Environmental influences on consumer behavior

Consumer BehaviorConsumer BehaviorEnvironmental influences

Globalization vs. adaptation• globalization: argument that companies should

ignore superficial cultural differences, learn to operate as if the world were one large market, and pursue this market with standardized marketing mixes (Levitt);

• adaptation: argument that companies should emphasize local cultural differences, segment markets on the basis of these differences, and adapt their marketing mixes to the local culture;

Page 7: Consumer Behavior Environmental influences Environmental influences on consumer behavior

Consumer BehaviorConsumer BehaviorEnvironmental influences

Subcultureculture of a segment of society that differs in significant ways from the culture as a whole;

• ethnic groups• geographic areas• age groups• religious affiliations• socio-economic groups

Page 8: Consumer Behavior Environmental influences Environmental influences on consumer behavior

Consumer BehaviorConsumer BehaviorEnvironmental influences

Social class

• a hierarchy of social status in a society leading to interactions of people as equals, superiors, or inferiors;

• influenced most heavily by educational credentials, occupation prestige level, income, and area of residence;

Page 9: Consumer Behavior Environmental influences Environmental influences on consumer behavior

Consumer BehaviorConsumer BehaviorEnvironmental influences

Reference groupsA group of people that serves as a standard of reference in guiding an individual’s thoughts, feelings, and actions.

Types of reference group influence:– informational:

– normative (utilitarian):

– comparative (value-expressive):

Page 10: Consumer Behavior Environmental influences Environmental influences on consumer behavior

Consumer BehaviorConsumer BehaviorEnvironmental influences

• To satisfy the expectations of fellow work associates, the individual’s decision to purchase a particular brand is influenced by their preferences.

• The individual seeks information from those who work with the product as a profession.

• The individual sometimes feels that it would be nice to be like the type of person which advertisements show using a particular brand.

• The brand which the individual selects is influenced by observing a seal of approval of an independent testing agency (such as Good Housekeeping).

• The individual feels that the purchase of a particular brand helps him show others what he is, or would like to be (such as an athlete, successful businessman, good mother, etc.).

Page 11: Consumer Behavior Environmental influences Environmental influences on consumer behavior

Consumer BehaviorConsumer BehaviorEnvironmental influences

Reference group influence on product and brand choice (Bearden and Etzel 1982)

necessity luxury

private

public

brandchoice

product choice weak reference

group influencestrong referencegroup influence

strongreference

groupinfluence

weakreference

groupinfluence

PuNe(e.g., wristwatch,

automobile,man’s suit)

PrNe(e.g., mattress,

floor lamp,refrigerator)

PuLu(e.g., golf club,

snow skis, sailboat)

PrLu(e.g., TV game,

trash compactor, icemaker)

Page 12: Consumer Behavior Environmental influences Environmental influences on consumer behavior

Consumer BehaviorConsumer BehaviorEnvironmental influences

Families• families vs. households:

– a family is two or more persons residing together who are related by blood, adoption, or marriage;

– a household is one or more persons sharing the same housing unit;

• many decision are made by families or households, not individuals;

• consumer behavior varies over the family life cycle (based on age, marital status, and number and ages of children);

Page 13: Consumer Behavior Environmental influences Environmental influences on consumer behavior

Consumer BehaviorConsumer BehaviorEnvironmental influences

Parental Roles in Family Decision Making

0% 50% 100%

3

2.5

2

1.5

1

wife dominant

husband dominant

autonomic syncratic

Percentage of families engaging in joint decision making

Page 14: Consumer Behavior Environmental influences Environmental influences on consumer behavior

Consumer BehaviorConsumer BehaviorEnvironmental influences

Parental Influence by Product Category

0% 50% 100%

Percentage of families engaging in joint decision making

3

2.5

2

1.5

1

wife's clothing

husband's clothing

life insuranceother insurance

vacation

television

car

food

cleaningproducts

cosmetics

children's toys

housing

appliances

wifedominant

husbanddominant

alcoholic beverages

Page 15: Consumer Behavior Environmental influences Environmental influences on consumer behavior

Consumer BehaviorConsumer BehaviorEnvironmental influences

Parental Influence by Stage of Decision

0% 50% 100%

3

2.5

2

1.5

1

life insurance

car

appliances

wifedominant

husbanddominant

husband'sclothing

1

2

3

1 problem recognition2 search for information3 final decision

Percentage of families engaging in joint decision making

Page 16: Consumer Behavior Environmental influences Environmental influences on consumer behavior

Consumer BehaviorConsumer BehaviorEnvironmental influences

The family life cycle• young single 8.2 %• young married without children 2.9 %• other young

– married with children 17.1 %– divorced with kids 1.9 %– divorced with no kids 0.1 %

• middle-aged (35-65)– married with children 33.0 %– married with no dependent children 5.5 %– married with no children 4.7 %– divorced with no kids 0.3 %– divorced with kids 1.9 %

• older (65+)– married, spouse present 5.2 %– unmarried, no spouse present 2.0 %

• all others 17.2 %