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Unit 2 consumer behavior
- 1. CONSUMER BEHAVIOR Presented by Dr. D VARALAKSHMI B.Tech,MBA, Ph.D Lecturer in Management JNTUA
- 2. CULTURE • culture can be defined as the sum total of learned beliefs, values and customs that serve to guide and direct the consumer behaviour of all members of that society. • Culture is learned through three ways 1. formal learning 2. informal learning 3. technical learning
- 3. Characteristics of Culture • Culture is learned. • Culture regulates society –Norms, standards of behaviour, rewards and punishments. • Culture makes life more efficient • All members follow same norms. • Culture is adaptive. • Culture is environmental. • Multiple cultures are nested hierarchically.
- 4. Types of culture • National culture • Popular culture • Sub culture • Corporate culture
- 5. Hofstede’s Five Dimensions of Culture • Culture has a profound impact on the way consumers perceive themselves, products they buy and use, purchasing processes, and the organisations from which they purchase. Marketers, however, are giving more attention, to understanding macro cultures and how they affect consumer behaviour. 1. Individualism versus collectivism 2. Power Distance 3. Uncertainty Avoidance 4. Masculinity/femininity 5. Abstract versus associative thinking
- 6. Cultural Influences • Culture influences the pattern of living, of consumption, of decision-making by individuals. • Culture forms a boundary within which an individual thinks and acts. • It can be acquired from the family.
- 8. Measurement of Culture • Content Analysis • Consumer Fieldwork • Value Measurement Instruments
- 9. Content Analysis • A method for systematically analyzing the content of verbal and/or pictorial communication. • Frequently used to determine prevailing social values of a society.
- 10. Consumer Feedback • Field Observation – Natural setting – Subject unaware – Focus on observation of behavior • Participant Observation
- 11. Field Observation • A measurement technique that takes place within a natural environment that focuses on observing behaviour (sometimes without the subjects’ awareness). • Takes place within a natural environment • Performed sometimes without the subject’s awareness • Focuses on observation of behaviour
- 12. Participant Observation • Researchers who participate in the environment that they are studying without notifying those who are being observed
- 13. 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
- 14. Culture and Marketing Strategy • Identify key cultural values that affect the consumption of the product • Ensure the marketing mix appeals to these values • Examine changes in cultural values and adapt the marketing mix if needed • Modify marketing mix to subcultures if the culture is heterogeneous • Be aware of symbols and ritual
- 15. CROSS CULTURAL CONSUMER BEHAVIOUR • Cross-cultural marketing is defined as ―the effort to determine to what extent the consumers of two or more nations are similar or different. • This will facilitate marketers to understand the psychological, social and cultural aspects of foreign consumers they wish to target.
- 16. Importance A company can enter a foreign market as a • Domestic exporter • Foreign importer • Foreign government-solicit the firm to sell abroad The firm‘s objectives could be: • To determine how consumers in two or more societies are similar/different and devise suitable, appropriate strategies . • Devise individualized marketing strategy if cultural beliefs, values and customs of a specific country are different Characteristic features of a firm going global: • 1. High market share in the domestic market • 2. Advantageous economies of scale • 3. Access to marketing/manufacturing bases across global borders. • 4.Availability of resources and capability to absorb huge losses • 5. Product/technology clout • 6. Cost and differentiation advantages •
- 17. Problems in Cross Cultural marketing 1. Problems related to product selection: The marketer going for cross cultural marketing has to select the customers/ market not on the basis of the superficial similarities of age or income, but by using the real motivating factors that prompt them to accept or reject products. 2. Problems related to promotion/marketing communication: e.g. Ariel in the middle east and also Pepsi 3. Problems related to pricing: the marketer has to adjust his pricing policies according to the local economic conditions and customs. 4. Problems related to selection of distribution channels:
- 18. Cross Cultural Consumer Analysis • Cross-cultural consumer analysis can be defined as the effort to determine to what extent the consumers of two or more nations are similar or different. • A major objective of cross-cultural consumer analysis is to determine how consumers in two or more societies are similar and how they are different.
- 19. Positive Effects • Many consumers may take into consideration the country of origin of a product. • Country-of-origin commonly: – France = wine, fashion, perfume – Italy = pasta, designer clothing, furniture, shoes, and sports cars – Japan = cameras and consumer electronics – Germany = cars, tools, and machinery
- 20. Negative Effects • Some consumers have animosity toward a country – People’s Republic of China has some animosity to Japan – Jewish consumers avoid German products – New Zealand and Australian consumers boycott French products
- 21. Socio-Cultural Influences • Marketing involves both technical and social elements. ◦ Technical elements are generally universally ◦ Social elements are market specific and display the cultural differences of a given society • The impact of socio-cultural factors on marketing is important in understanding consumer behaviour and planning appropriate market strategies
- 22. Socio-Cultural Dimensions • Customs, lifestyles, and values that characterize a society ◦include anything within the context of society that has the potential to affect behaviour. • Examples of socio-cultural variables. ◦ Population demographics, educational levels, norms and values, attitudes toward social responsibility...
- 23. Socio-Cultural Aspects marketers should consider • Aesthetics • Education • Language • Law and Politics • Material Culture • Religion • Social Organizations • Technology • Values and Attitudes
- 25. Economic Factors • Economic Factors are the factors that talk about the level of sales in the market and the financial position of the consumer, i.e. how much an individual spends on the purchase of goods and services that contribute to the overall sales of the company.
- 27. SOCIAL AND CULTURAL ENVIRONMENT • GROUP: A group may be defined as two or more people who interact to accomplish some goals. a. Primary versus Secondary Groups : interaction b. Formal versus Informal Groups : structure c. Large versus Small Groups: size and complexity d. Membership versus Symbolic Groups: association
- 28. SOCIAL CLASS • 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 the members of all other classes have either more or less status. Characteristics of Social Classes: 1. Persons within a given social class tend to behave more alike 2. Social class is hierarchical 3. 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. 4. Social class is continuous rather than concrete, with individuals able to move into a higher social class or drop into a lower class.
- 29. SOCIAL STRATIFICATION • Social stratification refers to the system of ranking people into groups according to one or more criteria deemed important to society. These include race, colour and wealth among others. • It can also be defined as the process by which society is divided in terms of hierarchy where one social group is placed higher than another group. This hierarchy is a rank order of groups and is linked strongly to perceptions of ethnicity, colour, class and even gender. • It is based on four principles:- 1. Social stratification is a trait of society, not simply a reflection of individual differences 2. Social stratification carries over from generation to generation 3. Social stratification is universal but variable . 4. Social stratification involves not just inequality but beliefs as well
- 30. REFERENCE GROUPS • Reference groups are groups that serve as a frame of reference for individuals in their purchase decisions. • valuable perspective for understanding the impact of other people on an individual's consumption beliefs, attitudes, and behavior. • Reference groups that influence general values or behavior are called normative reference groups. • Reference groups that serve as benchmarks for specific or narrowly defined attitudes or behavior are called comparative reference groups.
- 31. TYPES OF REFERENCE GROUPS • A contactual group is a group in which a person holds membership or has regular face- to-face contact and of whose values, attitudes, and standards he or she approves. • An aspirational group is a group in which a person does not hold membership and does not have face-to-face contact, but wants to be a member.
- 32. TYPES OF REFERENCE GROUPS • A disclaimant group is a group in which a person holds membership or has face-to-face contact but disapproves of the group's values, attitudes, and behavior. • An avoidance group is a group in which a person does not hold membership and does not have face-to-face contact and disapproves of the group's values, attitudes, and behavior.
- 33. Factors that Affect Reference Group Influence • Information and Experience • Credibility, Attractiveness, and Power of the Reference Group • Conspicuousness of the Product • Reference Group Impact on Product and Brand Choice • Reference Groups and Consumer Conformity
- 34. BENEFITS OF REFERENCE GROUP • Increase brand awareness • They serve to reduce perceived risk. (celebrity, common man and expert)
- 35. FAMILY INFLUENCE • The importance of the family or household unit in consumer behavior arises for two reasons: 1. Many products are purchased by a family unit. 2. Individuals‘ buying decisions may be heavily influenced by other family members.
- 36. STAGES IN FAMILY LIFE CYCLE STAGES ECONOMIC CIRCUMSTANCES LIKELY BUYING BEHAVIOR BACHELORHOOD PARENTHOOD POSTPARENTHOOD DISSOLUTION
- 37. How Personal Influences is Related with Consumer Behavior? • These factors are not visible, though they influence the consumer to a great extent. 1. Age and Life cycle Stage 2. Occupation And Income 3. Life Style 4. Personality