Consumer Markets

and Buying Behavior

Agenda

Definition and Components

Models of consumer behaviour

Factors affecting Consumer

Behavior

Types of Buying Behavior

Buying Decision Process for

new products
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b)Sub Culture

 Each culture consists of smaller sub-cultures that provide more specific

identification and socialisation for their members. Sub-culture refers to a set of
beliefs shared by a subgroup of the main culture, which include nationalities,
religions, racial groups and geographic regions. Many sub-Cultures make up
important market segments and marketers have to design products and
marketing programs tailored to their needs.
 Although this subgroup will share most of the beliefs of the main culture, they
share among themselves another set of beliefs, which may be at odds with
those held by the main group. For example, Indians are normally seen as
orthodox, conservative people, but rich, up-market youths do not hesitate to
enjoy night parties with liquor and women. Another example is that, the urban
educated or upper class exhibits more trace of individualism although Indian
culture is mostly collective in nature.

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c)Social Class
 Consumer behaviour is determined by the social class to which they belong. The
classification of socioeconomic groups is known as Socio-Economic Classification
(SEC). Social class is relatively a permanent and ordered division in a society whose
members share similar value, interest and behaviour. Social class is not determined by a
single factor, such as income but it is measured as a combination of various factors,
such as income, occupation, education, authority, power, property, ownership, life styles,
consumption, pattern etc.
 There are three different social classes in our society. They are upper class, middle class
and lower class. These three social classes differ in their buying behaviour. Upper class
consumers want high-class goods to maintain their status in the society. Middle class
consumers purchase carefully and collect information to compare different producers in
the same line and lower class consumers buy on impulse.
 Again there could be education considerations. A rich but not so educated people will not
normally buy a computer. We should consider another factor of social mobility where a
person gets up in the social ladder (for example, poor can become middle class and
middle class become rich or the children of uneducated family can attain higher
education) or down in the social ladder (for example, rich can become poor or the
children of a highly educated family may not continue study).

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 Social Class and consumer behavior

STATUS (UPPER CLASS, MIDDLE CLASS AND LOWER CLASS)

 People from upper class generally have a tendency to spend on luxurious items such as
expensive gadgets, cars, dresses.

 You would hardly find an individual from a lower class spending money on high-end
products.

 A person who finds it difficult to make ends meet would rather prefer spending on items
necessary for survival.

 Individuals from middle class segment generally are more interested in buying products
which would make their future secure.

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Social

 Family
 Groups and Social Networks
 Roles and Status

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Family

 There are two types of families in the buyer’s life viz. nuclear family and Joint
family. Nuclear family is that where the family size is small and individuals have
higher liberty to take decisions whereas in joint families, the family size is large
and group decision-making gets more preference than individual. Family
members can strongly influence the buyer behaviour, particularly in the Indian
contest. The tastes, likes, dislikes, life styles etc. of the members are rooted in
the family buying behaviour.

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Family

 The family influence on the buying behaviour of a member may be found in two
ways
 i) The family influence on the individual personality, characteristics, attitudes
and evaluation criteria and
 ii) The influence on the decision-making process involved in the purchase of
goods and services. In India, the head of the family may alone or jointly with his
wife decides the purchase. So marketers should study the role and the relative
influence of the husband, wife and children in the purchase of goods and
services.

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Family Life-cycle and consumer behavior

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Family Life-cycle and consumer behavior

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Family Life-cycle and consumer behavior

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 Family Life-cycle and consumer behavior

7. EMPTY NEST 2
Older married couples with no children living with them & parents retired.
Drop in income & couple relies on savings & fixed income from retirement benefits.

8. SOLITARY SURVIVOR
Older single persons with low income & increasing medical needs (widow or widower)

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Family Life-cycle and consumer behavior

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Family Life-cycle and consumer behavior

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Family Life-cycle and consumer behavior

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Family Life-cycle and consumer behavior

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 Family Life-cycle and consumer behavior

NATURE OF HOUSEHOLDS OR FAMILY PURCHASE

Two factors influence many of the buying decisions in a family ;
- income limitations
- family responsibilities
Young bachelors & newly married young couples (assuming that they both work) have
more discretionary income.
Young bachelors spend more on clothes & entertainment.
Young married couples will spend more on furnishings, home appliances, TV, music
system etc.
 The pattern will change when they have a child – wife may leave the job & income will
fall.

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Groups

 A group is two or more persons who share a set of norms and whose
relationship makes their behaviour interdependent. A reference group is a group
of people with whom an individual associates. It is a group of people who
strongly influence a person’s attitudes values and behaviour directly or
indirectly. Reference groups fall into many possible grouping, which are not
necessarily to be exhaustive (i.e. non over-lapping).

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Membership or contractual groups

 They are those groups to which the person belongs, and interacts. These
groups have a direct influence on their member’s behaviour.

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Primary or non-formative groups

 They refer to groups of friends, family members, neighbours co-workers etc

whom we see most often. In this case, there is fairly continuous or regular, but
informal interaction with cohesiveness and mutual participation, which result in
similar beliefs and behaviour within the group.

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Secondary Groups

 They include religious groups, professional groups etc, which are composed of
people whom we see occasionally. These groups are less influential in shaping
attitudes and controlling behaviour but can exert influence on behaviour within
the purview of the subject of mutual interest. For example, you can be member
of a philately or literary club where you can discuss on mutually interesting
subjects.

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Aspiration Group

 These are group to which a person would like to join as member. These groups
can be very powerful in influencing behaviour because the individual will often
adopt the behaviour of the aspirational group in the hopes of being accepted as
a member. Sometimes the aspirational groups are better off financially, or will be
more powerful; the desire join such groups is usually classed as ambition.
 For example, a humble office worker may dream of one day having the
designation to be present in the company boardroom. Advertising commonly
uses images of aspirational groups, implying that the use of a particular product
will move the individual a little closer to being a member of an aspirational
group. Just consider Nokia 6230 ad campaign where an young man with Nokia
mobile is shown to be capable to go the top position in the company, thus
instigating you to use the same model in order to join the same aspirational
group.

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Dissociative or Avoidance Group

 These are groups whose value an individual rejects and the individual does not
want to be associated with. For example, a senior corporate executive does not
want to be taken as a teenager. Hence, the individual will try to avoid certain
products or behaviours rather than be taken for somebody from the dissociative
group. In the just given example, the executive may not use cigarette, perfume
or car, which are very much teenager-oriented. Like aspirational groups, the
definition of a group as dissociative is purely subjective and it varies from one
individual to the next.

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Formal Groups

 These groups have a known list of members, very often recorded somewhere.
An example might be a professional association, or a club. Usually the rules and
structure of the group are laid down in writing. There are rules for membership
and members’ behaviour is constrained while they remain part of the group.

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Roles and Status

 A person participates in many groups like family, clubs, and organisations. The
person’s position in each group can be defined in tern of role and status. A role
consists of the activities that a person is expected to perform. Each role carries
a status. People choose products that communicate their role and status in
society. Marketers must be aware of the status symbol potential of products and
brands.

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Personal Factors

 Personal factors also influence buyer behaviour. The important personal factors,
which influence buyer behaviour, are a) Age, b) Occupation, c) Income and d)
Life Style

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a)Age

 Age of a person is one of the important personal factors influencing buyer

behaviour. People buy different products at their different stages of cycle. Their
taste, preference, etc also change with change in life cycle.

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b)Occupation

 Occupation or profession of a person influences his buying behaviour. The life

styles and buying considerations and decisions differ widely according to the
nature of the occupation. For instance, the buying of a doctor can be easily
differentiated from that of a lawyer, teacher, clerk businessman, landlord, etc.
So, the marketing managers have to design different marketing strategies suit
the buying motives of different occupational groups.

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c)Income

 Income level of people is another factor which can exert influence in shaping the
consumption pattern. Income is an important source of purchasing power. So,
buying pattern of people differs with different levels of income.

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d)Lifestyle

 Life style to a person’s pattern or way of living as expressed in his activity,

interests and opinions that portrays the “whole person” interacting with the
environment. Marketing managers have to design different marketing strategies
to suit the life styles of the consumers.

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e)Economic Situation

 Consumer behaviour is influenced largely by economic factors. Economic

factors that influence consumer behaviour are
 a) Personal Income,
 b) Family income,
 c) Income expectations,
 d) Savings,
 e) Liquid assets of the Consumer,
 f) Consumer credit,
 g) Other economic factors.

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Psychological factors

 Motivation
 Perception
 Learning
 Beliefs and attitudes

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Motivation

 A need becomes a motive when it is aroused to a sufficient level of intensity. A

motive is a need that is sufficiently pressing to drive the person to act. There
can be of types of needs:
1. Biogenic needs:
They arise from physiological states of tension such as thirst, hunger
2. Psychogenic needs:
They arise from psychological states of tension such as needs for recognition,
esteem

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Motivation

 In the words of William J Stanton, “A motive can be defined as a drive or an

urge for which an individual seeks satisfaction. It becomes a buying motive
when the individual seeks satisfaction through the purchase of something”. A
motive is an inner urge (or need) that moves a person to take purchase action
to satisfy two kinds of wants viz. core wants and secondary wants.
 So, motivation is the force that activates goal-oriented behaviour. Motivation
acts as a driving force that impels an individual to take action to satisfy his
needs. So it becomes one of the internal factors influencing consumer
behaviour.

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Thank you
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