MODULE 3: ENVIRONMENTAL DETERMINANTS OF

CONSUMER BEHAVIOUR
Prof.Smeeta K,KLE CBA Hubballi 1
Environmental Determinants of Consumer
Behaviour
Family Influences; Influence of Culture;
Subculture & Cross-Cultural Influences; Group
Dynamics and Consumer Reference Groups;
Social Class: Family role. Person’s Age, Life
cycle stage, Occupational and economic
circumstances.
Prof.Smeeta K,KLE CBA Hubballi 2
 ENVIRONMENTAL DETERMINANTS
• Environmental determinants of consumer behaviour refer to the
external factors in an individual’s surrounding that influence their
buying decisions and consumption patterns.
• These factors are crucial in shaping how consumers perceive
products, make purchasing choices, and engage with brands.
• Understanding these environmental determinants is essential for
businesses and marketers to tailor their strategies effectively and
meet consumer needs.
• Consumer behavior encompasses the intricate process by which
individuals allocate their valuable resources- time, money& effort.

Prof.Smeeta K,KLE CBA Hubballi 3

 ENVIRONMENTAL DETERMINANTS OF CONSUMER
BEHAVIOUR
1. Family influence
2. Influence of culture
Sub culture
Cross culture
3. Group dynamics
Consumer reference group
4. Social class

Prof.Smeeta K,KLE CBA Hubballi 4

Prof.Smeeta K,KLE CBA Hubballi 5
 FAMILY INFLUENCE
• Family is defined as two or more persons related by
blood, marriage or adoption who resides together.
Family is a fundamental social institution that plays
a central role in the lives of individuals and society
as whole.
• Family provide emotional support, socialization,
and sense of belonging.

Prof.Smeeta K,KLE CBA Hubballi 6

TYPES OF FAMILY

Prof.Smeeta K,KLE CBA Hubballi 7

 IMPACT OF FAMILY ON CONSUMER BEHAVIOUR
• Socialization
• Role Differentiation
• Decision making Dynamics
• Influence on purchase decisions
• Joint vs individual decisions
• Norms and values
• Intra family conflicts
• Consumer specialization
• parental influence
• Life stage transitions
• Family communication
• Brand and product loyalty
Prof.Smeeta K,KLE CBA Hubballi 8
 FAMILY LIFE CYCLE

UNMARRIED
COUPLES

NEWLY SOLITARY
SINGLE FULL NEST EMPTY NEST
MARRIED SURVIVOR

SINGLE
PARENT

Prof.Smeeta K,KLE CBA Hubballi 9

 FAMILY LIFE CYCLE
• The family life cycle is a concept in
marketing and consumer behaviour
that divides the progression of a typical
family unit into distinct stages based on
age, marital status, and preference of
children within the household.
• It provides insights into how individuals
consumption patterns, purchasing
behaviours, and needs evolve as they
transition through different life stages
within the family structure.
• Understanding the family life cycle
helps marketers tailor their strategies
to target and meet the changing needs
of consumers effectively.
Prof.Smeeta K,KLE CBA Hubballi 10
 FAMILY LIFE CYCLE
• The family life cycle typically consists
of the following stages:
1. Bachelor Stage: This stage includes
young, single individuals who have not
yet formed their own families. Their
consumption patterns may be
characterized by independence,
experimentation, and spending on
personal interests and experiences.
• Ex:
– Entertainment and social activities
– Personal care products
– Technology gadgets
– Dinning out
– Travel Prof.Smeeta K,KLE CBA Hubballi 11
 FAMILY LIFE CYCLE
2. Newly Married Stage:
This stage involves newly
married couples setting up
their households. Their
spending may focus on
establishing and purchasing
furniture's, appliances, and
other household essentials.
Ex:
• Household furnishings and
appliances
• Home décor and renovation
expenses
• Wedding related expenses
• Home entertainmentProf.Smeeta
system K,KLE CBA Hubballi 12
 FAMILY LIFE CYCLE
3. Parenthood Stage- Early
Parenthood: Couples become
parents for the first time during
this stage. Their consumption
priorities shift towards child
related expenses.
EX;
• baby clothing, equipment
• Baby care products
• Pediatric medical expenses
• Maternity and baby related
classes
Prof.Smeeta K,KLE CBA Hubballi 13
 FAMILY LIFE CYCLE
4. Parenthood Stage- Full Nest I:
Families have young children
who depend on them. Spending
continues to focus on child
related expenses, education, and
family oriented activities.
• Ex: school supplies and
educational expenses
• Children’s clothing shoes
• Family outings
• Children's hobbies and sports
equipment
• Health and wellness products
for family
Prof.Smeeta K,KLE CBA Hubballi 14
 FAMILY LIFE CYCLE
5. Parenthood Stage- Full Nest II:
Families in this stage have older
children or teenagers. Spending
may shifts towards education, etc.
• Education related expenses
• Extracurricular activities and
classes
• Family vacations and travel
• Electronics and gadgets for
children
• Personal care products for
teenagers Prof.Smeeta K,KLE CBA Hubballi 15
 FAMILY LIFE CYCLE
6. Parenthood Stage- Empty Nest I:
Children leave home for higher
education or employed in this stage.
Parents may have more disposal
income, and spending could be
directed towards travel, leisure
activities, and home renovations.
• Travel and leisure activities
• Home renovations and upgrades
• Fitness membership
• Entertainment and hobbies
• Retirement planning and
investment
Prof.Smeeta K,KLE CBA Hubballi 16
 FAMILY LIFE CYCLE
7. Parenthood Stage- Empty
Nest II:
At this stage parents are
often near retirement age or
have already retired.
Travel and vacation packages
Health and medical expenses
Home maintenance and
improvement
Seniors social clubs and
membership Prof.Smeeta K,KLE CBA Hubballi 17
 FAMILY LIFE CYCLE
8. Solitary Survivor:
This stage involves
individuals who are single
due to divorce, separation,
or the death of a spouse.
• Solo travel
• Health and wellness
• Financial planning
• Hobbies and personal
interest
• Social activities and
memberships Prof.Smeeta K,KLE CBA Hubballi 18
 USE OF FAMILY LIFE CYCLE MODEL IN MARKETING
• Segmentation and targeting
• Product development and
customization
• Message tailoring
• Media and communication
channels
• Pricing and promotion
strategies
• New product opportunities
• Customer loyalty and
retention
• Brand loyalty
• Cross selling
• Cultural and social trends
Prof.Smeeta K,KLE CBA Hubballi 19
DIFFERENT ROLES IN THE FAMILY DECISION PROCESS
INITIATOR GATEKEEPER
INFLUENCER
Individual who first Controls the flow of
Provide suggestions,
recognizes the need or information and
advice, or opinions that
desire for a particular access to the
influence decision
product/service. decision making
making.
process
OBSERVER
Family members who
are not directly
involved in the
ROLES DECISION MAKER
The individual who
decision making
process but are aware
IN physically acquires
the product/service
of the choices being
considered.
FAMILY
DISPOSER USER
PURCHASER
Responsible for deciding The individuals who
The individual who
how to dispose or of replace will directly consume
physically acquires the
a product once it is no or utilize the
product/service
longer useful or needed. product/service
Prof.Smeeta K,KLE CBA Hubballi 20
 CULTURAL FACTORS
• Culture in consumer behavior refers to the set of shared
values, beliefs, norms, traditions, symbols, and practices
within a particular society or social group. It
encompasses the way people live, their customs, and
their worldview.
– Values and beliefs
– Norms and social customs
– Symbols and rituals
– Language and communication styles
– Aesthetic and design preferences
– Social structures and roles
– Cultural subgroups
– Cultural trends and influences
– Globalization and cross cultural influences
Prof.Smeeta K,KLE CBA Hubballi 21
 SUBCULTURE
• A subculture refers to a distinct group within a larger society that shares
distinctive values, norms, behaviours and preferences that distinguish it
from the mainstream culture.
• Subcultures emerge based on various factors, such as shared interests,
beliefs, hobbies, demographics, lifestyles and experiences.
• Youth Subculture
• Luxury subculture
• Environmental subculture
• Ethnic subculture
• Retro subculture
• Health and wellness subculture
• Tech and geek subculture
• Artistic and geek subculture
• Foodie subculture
• Adventure subculture
• Music subculture

Prof.Smeeta K,KLE CBA Hubballi 22

 CROSS CULTURAL INFLUENCE
• Cross Cultural influence in consumer behaviour refers to the
impact of different cultural backgrounds, values, norms,
and traditions on individuals purchasing decisions,
preferences and consumption patterns.
• It’s the recognition that culture plays a crucial role in shaping
how people perceive and interact with products, brands, and
marketing messages, especially when those cultures differs
from their own.
– Cultural sensitivity
– Cultural norms and values
– Localization of marketing
– Cultural symbols and icons
– Consumer beahviour variability
– Global brands and local adaptation
– Acculturation and cultural hybridity
Prof.Smeeta K,KLE CBA Hubballi 23
 GROUP DYNAMICS AND CONSUMER REFERENCE GROUP
• Group dynamics refers to individuals interactions, relationships,
and behaviours and how they influence their buying decisions,
preferences, and consumption patterns.
• Group dynamics play a significant role in shaping consumer
behaviour.
• People are social being who often make decisions based on the
influence and interactions of the group they belong to or associate
with.
• Key aspects of group dynamics are;
• Social influence
• Norms and conformity
• Opinion leaders
• Group polarization
• Social comparison
• Leadership and roles
• Communication patterns
• Group cohesion Prof.Smeeta K,KLE CBA Hubballi 24
 REFERENCE GROUP
• In consumer behaviour, a reference group refers to a social group
or category of individuals that an individual uses as a basis for
comparing and evaluating their attitudes, behaviours, values, and
opinions.
• Reference groups play a significant role in influencing how
individuals perceive themselves and make purchasing decisions.
• These groups can directly and indirectly impact consumer choices
and behaviours.

Prof.Smeeta K,KLE CBA Hubballi 25

 FEATURES REFERENCE GROUP
✔ Identification
✔ Relevance
✔ Group membership
✔ Conformity pressure
✔ Information source
✔ Norms and values
✔ Aspiration value
✔ Opinion leaders
✔ Social identity
✔ Cultural context
✔ Dynamic nature
✔ Multiple reference groups
Prof.Smeeta K,KLE CBA Hubballi 26
 TYPES OF REFERENCE GROUPS
NORMATIVE REFERENCE GROUP: People align their choices and actions with the expectations of these
groups to avoid rejection and maintain group harmony

COMPARATIVE: Individual compare themselves to asses their attitudes, behaviour, and

achievements
INDIRECT REFERENCE GROUP: Not directly visible or known to the individual, but their
influence is channeled through social norms, cultural values and media representations.

CONTRACTUAL RG: Individual who enter into these contracts often adopt the norms and values of the
group in exchange for benefits or membership privileges. Ex: affiliations with org,clubs

ASPIRATIONAL RF: Aspiration groups are often associated with prestige, success,
and a desired lifestyle
DISCRIMINANT RG: individuals may define their identity in opposition to these groups to
establish their uniqueness and differentiation.

AVOIDANCE RG: People may reject the groups behavior, choices to prevent
negative perceptions or stigmatization
BRAND COMMUNITIES: these reference groups from around shared interests in
particular brands or products.
DIRECT REFERENCE GROUP: These are groups
Prof.Smeeta with which an individual has direct
K,KLE CBA Hubballi 27
interaction but still consider as a point of reference for their decision.
 REFERENCE GROUP POWER
Informational power
Normative power
Reward power
Expert power
Referent power
Innovative power
Social comparison
power
Cultural power
Aspirational power
Prof.Smeeta K,KLE CBA Hubballi 28
 FACTORS INFLUENCING THE ACCEPTANCE OF REFERENCE
GROUP
❖ Relevance and similarity
❖ Group membership
❖ Aspirational value
❖ Social identity
❖ Perceived attractiveness
❖ Group size
❖ Social status and power
❖ Opinion leaders
❖ Cultural and social context

❖ Personal value
❖ Peer pressure
Prof.Smeeta K,KLE CBA Hubballi 29
 SOCIAL CLASS
• Social class, family roles, age, life cycle stage,
occupational status, and economic circumstances
are all significant factors that influence consumer
behaviour.
1. Social Class
Meaning: Social class refers to a person’s social
position based on income, education, occupation,
and lifestyle.
• Product choices
• Status and symbolism
• Shopping habits Prof.Smeeta K,KLE CBA Hubballi 30
 SOCIAL CLASS
2. Family roles: Family roles within a household
influence consumer behaviour due to the roles and
responsibilities each family member holds
• Decision making
• Parental roles
• Gender roles
3. Age and life cycle: Age and lifecycle stages have a
significant impact on consumer behaviour.
• Changing preferences
• Life cycle stages
Prof.Smeeta K,KLE CBA Hubballi 31
 SOCIAL CLASS
4. Occupational and economic circumstances: it
influence consumer behaviour in terms of purchasing
power and lifestyle choices.
• Income level
• Occupational influence
• Economic uncertainty

Prof.Smeeta K,KLE CBA Hubballi 32