Environmental Influences on Consumer

Behavior:
 (a) Cultural Influences on Consumer Behavior – Concept of Culture, Values, Sub-
cultures, Influence of Indian Culture on Consumers, Multiplicity of Indian Cultures
and their influence on consumer behavior, Cross-cultural Influences.
 (b) Social Class and Group Influences on Consumer Behavior - Concept of Social
Class, Social Sub-Class, Money and Other Status Symbols, AIO classification of
Lifestyle, VALS Typology, Source of Group Influences, Types & Nature of
Reference Groups, Reference Group Influences and Applications, Group Norms
and Behavior, Family Life Cycle Stages, Family Purchases, Family Decision-
making, Purchasing Roles within family, Word-of-Mouth Communications within
Groups, Opinion Leadership.
 (c)Indian Consumer: Social classes in India - old and new
Socio-Economic Classes (SEC) in Urban & Rural
Markets,
 Characteristics
of BoP Consumers, Gen Z Consumers,
HNI Consumers in India.
 (d)Diffusion of Innovation - Types of Innovation,
Diffusion Process, Factors Affecting the Diffusion of
Innovation,
 The AdoptionProcess, Time Factor in Diffusion Process,
Culture, Communication and Diffusion. (11+1)
 1.1 Environmental Influence on
Consumer Behavior
Introduction:
Consumer behavior is the study
of the behavior that consumers
display during the processes of
searching for purchasing, using,
evaluating, and disposing of
products and services that they
expect will satisfy their needs.
External factors do not affect the
decision process directly, but
percolate or filter through the
individual determinants, to
influence the decision process as
shown in Fig.The arrow shows
how the external influences are
filtered towards the individual
determinants to affect the
decision process.
 1.1 Environmental Influence on
Consumer Behavior
A) Individual Determinants:

Motivation and
Involvement:

Information
Attitudes
Processing
Individual
Determinan
ts

Personality
Learning and
and Self-
Memory
concept
 1.1 Environmental Influence on
Consumer Behavior
B) External Environmental Factors Affecting Consumer Behavior:

Social Group
Influences
Social Class Family
Influence Influence

Sub-cultural Personal
Influences Influences

External
Cultural Other
Influences Environmental Influences
Factors
 1.1 Environmental Influence on
Consumer Behavior

External Environment Factor also having strong impact on consumer

behavior. These factors are a follows.
1) Cultural Influences:
It is defined as a complex sum total of knowledge, belief, traditions,
customs, art, moral law or any other habit acquired by people as
members of society. Our consumer behaviour that is the things a
person buy is influenced by our background or culture.
2) Sub-cultural Influences:
Within a culture, there are many groups or segments of people with
distinct customs, traditions and behaviour. In the Indian culture itself,
we have many subcultures, the culture of the South, the North, East
and the West.
B) External Environmental Factors
Affecting Consumer Behavior:
 3) Social Class Influence:
 By social class refer to the group of people who share equal positions in a society.
Social class is defined by parameters like income, education, occupation, etc.
Within a social class, people share the same values and beliefs and tend to purchase
similar kinds of products.
 4) Social Group Influences:
  A group is a collection of individuals who share some consumer relationship,
attitudes and have the same interest. Such groups are prevalent in societies. These
groups could be primary where interaction takes place frequently and consists of
family groups.
 1.1 Environmental Influence on
Consumer Behavior

5) Family Influence:
As has already been said, the family is the most important of the primary group and is the
strongest source of influence on consumer behaviour. Children learn the family tradition and
customs, and they imbibe many behavioural patterns from their family members, both
consciously and unconsciously.
6) Personal Influences:
Each individual processes the information received in different ways and evaluates the
products in his own personal way. This is irrespective of the influence of the family, social
class, cultural heritage, etc. a person’s own personality ultimately influences his decision.
7) Other Influences:
Consumers are also influenced by national or regional events which could be like the Asiad,
the Olympics and Cricket test matches, World Cup, the war or a calamity. These leave
permanent or temporary impressions on the mind of the consumer and affect his behaviour
Consumers’ buyer behaviour

1) Cultural,
2) Social,
3) Personal,
4) Psychological.
 Cultural Social Personal Psychological
Factors Factors Factors Factors
• Age & Life
Cycle stage • Motivation
• Reference
• Culture Group • Occupation
• Perception
• Economic
• Sub Culture • Family Situation
• Learning
• Life Style
• Social Class • Roles &
• Personality
Status • Beliefs &
& self
Attitude
concept
 1.3 Culture and Sub-Culture
A) Culture:
e )Nature of Culture:

Nature of
Culture

Culture is an Culture is Culture is Culture Fulfils Culture Is Social,

Acquired Quality Communicative Idealistic some Needs Not Individual
 1.3 Culture and Sub-Culture
Culture is
Invented
Culture is a set of
Other
A) Culture: Characteristics
Learned
Responses
f) Characteristics of Culture:

Culture Is
Integration
Shared

Characteristics
Adaptation
of Culture Culture is
Gratifying and
Persistent

Culture is
Culture is
Dynamic and
Prescriptive
Adapts

Cultures are Culture is an

Similar yet Organized and
Different Integrated Whole
 1.3 Culture and Sub-Culture
A) Culture:
g) Influence of Culture on Consumer Behavior:

Culture
Influencing the Nature of Adapting
Adapting a Influence on
Pattern of Culture International
Cross Cultural Technology
Living: Influence Culture
Behavior
 1.3 Culture and Sub-Culture

A)Culture: Influence of Culture on Consumer Behavior:

1) Influencing the Pattern of Living:
Culture is that complex whole which includes knowledge, belief, art,
law, morals, customs and any other capabilities and habits acquired
by humans as members of society.
2) Culture Adapting a Cross Cultural Behavior:
Culture forms a boundary within which an individual thinks and
acts. When one thinks and acts beyond these boundaries, he is
adopting a cross-cultural behaviour and there are cross-cultural
influences as well.
Influence of Culture on Consumer
Behavior:
 3) Nature of Culture Influence:
 The nature of cultural influences is such that a person is seldom aware of them.
One feels. Behaves and thinks like the other members of the same culture. It is all
pervasive and is present everywhere.
 4) Influence on Technology:
 Material culture influences technology and how it brings cultural changes like use
of telephones, mobile phones, clothing styles and fashions gives the marketers a
chance to improve the product, packing etc. to meet the needs of the customers
 5) Adapting International Culture:
 Culture keeps changing slowly over time; and is not static. Changes take place due
to rapid technologies.
Cultural Factors
Culture has several important
characteristics:
 Culture has various characteristics. From various definitions, we can deduce the
following characteristics of culture:
 Culture is comprehensive.
 Culture is learned rather than being something we are born with.
• Learned Behavior.
• Culture is Abstract.
• Culture Includes Attitudes, Values, and Knowledge.
• Culture is a Way of Life.
• Language is the Chief Vehicle of Culture.
• Culture is Dynamic.
• Culture Varies from Society to Society.
 The Relevance of culture
 In addition to its intrinsic value, culture provides
important social and economic benefits.
 With improved learning and health, increased
tolerance, and opportunities to come together with
others, culture enhances our quality of life and
increases overall well-being for both individuals and
communities.
 The influence of culture
 For a brand, it is important to understand and take into account the
cultural factors inherent to each market or to each situation in order
to adapt its product and its marketing strategy.
 As these will play a role in the perception, habits, behavior or
expectations of consumers.
 For example, in the West, it is common to invite colleagues or
friends at home for a dinner. In Japan, on the contrary, invite
someone home does not usually fit into the local customs
Cultural Factors
CULTURE!!!
CULTURE!!!
CULTURAL LEARNING
 ACQUISITION OF CULTURE

•Enculturation
– learning of one’s own culture .
• Acculturation :
learning of a new or foreign culture.
 INDIAN CORE VALUES

 Indian society is driven by a set of core values.

 Variation in urban values due to:
 Changing Lifestyles,
 Westernization.
 Indian consumers are culture-conscious as they follow
the
 cultural expectations of the society.
 Sub culture

 Each culture contains smaller subcultures or groups of

people with shared value systems based on common life
experiences and situation.
 Subculturesinclude: Nationalities, religions, racial groups
and geographical regions.
 A subculture
is a segment of a larger culture whose
members share distinguish values and patterns of
behaviour.
SUBCULTURES
 Festivities

 Cultural celebrations are very much a part of Indian culture.

 Sub-cultures also have various festivals.
 Brands offer sales promotional programs during festive
seasons.
 Smart customers make “value-based” deals during these
times.
 Consumers postpone their purchases, especially durables, in
the hope of getting such deals.
SUBCULTURES
 Social Class
 Social Class is a group of individuals with similar social rank, based on such
factors as occupation, education and wealth.
 Social classes are relatively permanent and ordered divisions whose members
share similar values, interests and behaviours.
 Social class is not determined by a single factor but is measured as a combination
of occupation, income, education, wealth and various other factors.
 Markets are interested in social class because people within a given social class
tend to exhibit similar buying behaviour.
 Social classes show distinct services and brand preferences in areas, such as:
clothing, home furnishing, leisure activity and motor vehicles.
Social Class!!!
Social Class!!!
 1.5 Social Group
C) Group Properties:

Status Norms Role Socialization Power

 1.5 Social Group

C) Group Properties:
In order to understand the nature of groups better, we need to examine several other important
components such as status, norms, role, socialization, power and their significance for consumer
behavior.
1) Status:
Status refers to the achieved or ascribed position of an individual in a group or in society, and
it consists of the rights and duties associated with that position. Status also may refer to some
grouping on the basis of age or sex, family, occupation, and friendship or common interest.
2) Norms:
Norms are the rules and standards of conduct by which group members are expected to abide.
For informal groups, norms are generally unwritten but are, nevertheless, usually quite well
understood.
3) Role:
This term is used to designate all of the behavior patterns associated with a particular status.
Role is the dynamic aspect of status and includes the attitudes, values, and behavior ascribed
by the society to persons occupying this status. The social structure partially prescribes what
sort of role behavior is acceptable and thus what is expected.
 1.5 Social Group
C) Group Properties:
4) Socialization:
They refer to the process by which new members learn the group's system of values, norms
and expected behaviour patterns. When an individual leaves one job and joins another in an
organization, she/ he must learn the informal rules and expectations from the work groups
besides the formal rules and expectations.

5) Power:
A group's influence on its members' behavior is closely related to its 'power'.
a) Reward Power:
It is refers to the group's ability to reward the individual. The strength of reward power
increases with the size of the rewards as perceived by the individual.

b) Coercive Power :
It relates to the power of the group to use disapproval, with holding rewards or even punishing
the individual.
 1.5 Social Group

C) Group Properties:
5) Power:
C )Expert Power:
It influences the results from the experience, expertise and
knowledge of the individual or Consumers regularly
accept influence from friends .
e) Referent Power:
It flows from the feeling of identification that the
individual has with the members of the group.
 Social Factors
1. Reference Group- A group in society that
influences an individuals purchasing behaviour.

Group- Two or more people who interact to

accomplish individual or mutual goal.

Opinion Leader- “An individual who influences the

opinions of others.” Person with in a reference
group who, because of special skills, knowledge,
personality, or other characteristics, exerts social
influence on others.

Norm- A value or attitude deemed acceptable by a

group.
 Primary Membership Group- A reference group with
which people interact regularly in an informal, face to
face manner, such as family, friends, or fellow
employees.

 Secondary Membership Group- A reference group with

which people associate less consistently and more
formally than a primary membership group, such as a
club, professional group, or religious group.

 Aspirational Reference Group- A group that someone

would like to join.

 Nonaspirational Reference Group- A group with which

an individual does not want to associate.
2. Family- Family is the most important social institution
for many consumers, strongly influencing values,
attitudes, self concepts and buying behaviour. Moreover
the family is responsible for the socialization process.

Socialization Process- How cultural values and norms are

passed down to children.

3. Role and Status- A person belongs to many groups-

family, clubs and organization. The person’s position in
each group can be defined in terms of both role &
status. A role consists of the activities people are
expected to perform according to the persons around
them. Each role carries a status reflecting the general
esteem given to it by society.
 Understanding the Social Factors that
Affect Consumer Behaviour

Direct Indirect
Reference
Group Primary Secondary Aspirational Nonaspirational

Opinion Leader People U Know Celebrities

Socialization Process
Family Initiators, Influencer, Decision Maker, Purchaser,
& Consumer
 Personal Factors
 Gender

 Age & life cycle stage- Traditionally family life

cycle stages include young singles and married
couples with children.

 Nontraditional stages such as unmarried couples,

singles marrying later in life, childless couples,
same sex couples, single parents and extended
parents.

 Occupation

 Economic Situation
 Lifestyle- A person’s pattern of living as
expressed in his or her activities, interests and
opinions.
“A mode of living as identified by a person’s
activities, interests and opinions.”

 Personality- A way of organizing and grouping

the consistencies of an individual’s reactions to
situations.

 Self Concept- How consumers perceive

themselves in terms of attitudes, perceptions,
beliefs, and self-evaluations.
Psychological Factors
 Perception- The process by which people select, organize,
and interpret stimuli into a meaningful and coherent picture.
Selective Exposure- The process whereby a consumer
notices certain stimuli and ignores others.
Selective Distortion- A process whereby a consumer or
distorts information that conflicts with his or her personal
beliefs.
Selective Retention- A process whereby a consumer
remembers only that information that support his or her
personal beliefs.

Selective Exposure
Perception
Selective Retention Selective Distortion
  Motivation-

Motive- A driving force that cause a person to

take action to satisfy specific needs.
 Maslow’s Hierarchy of Needs- A method of
classifying human needs & motivations into five
categories in ascending order of importance:
psychological, safety, social, esteem, & self-
actualization.

Needs
Motivation
Psychological Safety Social Esteem Self-Actualization
 Learning- A process that
creates changes in behavior,
immediate or expected,
through experience and
practice.
 Belief- An organized pattern of knowledge that
an individual holds as true about his or her
world.

 Attitude- A learned tendency to respond

consistently toward a given object.
 1.6 Family Life Cycle

A) Meaning:
Families pass through a series of stages that change them
over time. This process historically has been called the
Family Life Cycle Concept may need to be changed to
household life cycle (HLC) or consumer life cycle (CLC) in
the future to reflect changes in society.
B) Family Life Cycle Stages :
The life cycle of families has been conceptualized as a
progression involving several stages which are given as
below.
Family Life Cycle Stages : Bachelor Stage

Solitary Newly Married

Survivor Couple

Stages of Family
Life Cycle

Empty Nest Full Nest 1

Full NEst 3 Full Nest 2

 1.6 Family Life Cycle

B) Family Life Cycle Stages :

1) The Bachelor Stage (Young and Single):
In the bachelor stage of the life cycle, income is low relative to future earnings, since most
bachelors are just beginning their careers. A few basic furniture items may be acquired, as well
as some kitchen equipment. However purchase tend to be on a non-systematic basis and also
minimal because possessions restrict their freedom of movement. This market segment also
offers marketers opportunities in terms of single serving packaging for a wide variety of foods.
Overall, there is more individuality in purchasing at this stage.
2) The Newly Married Couples (Young, No Children):
With marriage, the requirements and resources change. Household requirements increase. In
addition, in some cases, both partners may be working. This stage therefore represents a high
expenditure period.
 Family Life Cycle

 3) Full Nest 1 (Young, Married With Child) :

 The arrival of a child creates major changes. Some wives may stop working and
they suffer a reduction in income. The financial resources thus change
significantly. Child educational responsibilities increase. Money is now directed to
baby furniture, toys, chest rubs, vitamins, baby foods and baby medicines.
 4) Full Nest 2 (Older, Married, With Children):
 The family's financial position starts to improve because of career progress and
also because many wives return to work. They present an active market for a wide
variety of food products, bicycles, music lessons, magazines and also educational
services as children are growing up.
 Family Life Cycle

B) Family Life Cycle Stages :

5) Full Nest 3 (Older, Married With Dependent Children):
Income is high for the family at this stage. However, they now represent experienced buyers and
tend to be less interested in new product purchases.

6) Empty Nest (Older, Married With No Children Living With Them):

With no children living at home, the financial position stabilizes Savings accumulate. There may
be resurgence in self-education. Hobbies also become an important source of satisfaction.
More is spent on luxury appliances, magazines and health products. Major expenditures are on
home ownership, home improvements and also on medical care.
7) Solitary Survivor (Older, Single, Retired People):
Simple is often more economical lifestyle. A lower income due to retirement may be a restrictive
factor. Health care and other services become important.
 1.6 Family Life Cycle

C) Purchasing Decision in Family Life Cycle:

Family decision making is the process by which decisions that directly or indirectly involve
two or more family members are made. Most importantly, many family purchases are
inherently emotional and affect the relationships between the family members. However
Family
these purchasing decision roles are given Purchase
as follows.
Roles:

Sex Roles And

Full Nest Decisions Decision-Making
Responsibilities

Young Children Heuristics in Joint

Decision Decision-Making

Children
 1.6 Family Life Cycle

C) Purchasing Decision in Family Life Cycle:

1) Family Purchase Roles:
There are six roles that frequently occur in family decision making. It is important to note that
individuals will play various roles for different decisions (see fig.1.3)
a) Initiator(s):
The family member who first recognizes a need or starts the purchase process.
b) Information Gatherer(s):
The individual who has expertise and Interest in particular purchase. Different individuals
may seek information at different times or on different aspects of the purchase.
c) Influencer(s):
The person who influences the alternatives evaluated, the criteria considered, and the final
choice.
d) Decision maker(s):
The individual who makes the final decision. Of course, joint decisions also are likely to
occur.
e) Purchaser(s):
The family member who actually purchases the product. This is typically an adult or
teenager.
 1.6 Family Life Cycle

C) Purchasing Decision in Family Life Cycle:

2) Sex Roles And Decision-Making Responsibilities:
Traditionally, some buying decisions, termed Autocratic Decisions, Syncratic Decision
a) Autocratic Decisions:
Autocratic Decisions were made by one spouse. Men, for instance, often had sole responsibility for selecting
a car, while most decorating choices fell to women.
b) Syncratic Decisions:
In Syncratic Decision decisions, other decisions such as holiday destinations, were made jointly. According
to a study conducted by Roper Starch Worldwide, wives tend to have the most say when buying groceries,
children’s toys, clothes and medicines. Syncratic decisions are common for cars, holidays, homes,
appliances, furniture, home electronics, interior design and long-distance phone services. As the couple’s
education increases, more decisions are likely to be made together.
3) Heuristics in Joint Decision-Making:
The synoptic ideal calls for the husband and wife to take a common view and act as joint decision makers. A
couple ‘reaches’ rather than ‘makes’ a decision. This process has been described as‘ muddling through’.
One common technique for simplifying the decision-making process is the use of heuristics. Some
decision-making patterns frequently observed when a couple makes decisions in buying a new house
illustrate the use of heuristics:
 1.6 Family Life Cycle

C) Purchasing Decision in Family Life Cycle:

a) Common Preference:
The couple’s areas of common preference are based upon salient, objective dimensions rather
than more subtle, hard-to-define cues. For example, a couple may easily agree on the number
of bedrooms they need in the new home, but will have more difficulty achieving a common
view of how the home should look.
b) Task Specialization:
The couple agrees on a system of task specialization, where each is responsible for certain duties
or decision areas and does not interfere in the other’s. For many couples, these assignments are
likely to be influenced by their perceived sex roles. For example, the wife may seek out houses
in advance that meet their requirements, while the husband determines whether the couple can
obtain a mortgage.
c) Concessions :
They are based on the intensity of each spouse’s preferences. One spouse will yield to the
influence of the other in many cases simply because his or her level of preference for a certain
attribute is not particularly intense, where in other situations he or she will be willing to exert
effort to obtain a favorable decision. . In cases where Intense preferences for different
attributes exist, rather than attempt to influence each Other, spouses will ‘trade off’ a less-
intense preference for a more strongly felt one.
 1.6 Family Life Cycle

C) Purchasing Decision in Family Life Cycle:

4) Children:
Anyone who has had the ‘delightful’ experience of supermarket shopping with one or more
children knows that children often have a say in what their parents buy, especially for products
like breakfast cereal. In addition, children increasingly are being recognized as a potential
market for traditionally adult products. For example, Kodak is putting a lot of promotional
effort into encouraging children to become photographers.
5)Young Children Decision:
Young bachelors and newlyweds have the most ‘modern’ sex-role attitudes, are the most likely to
exercise regularly, to go to pubs, concerts, the cinema and restaurants, and to go dancing; and
they consume more alcohol. Families with young children are more likely to consume health
foods such as fruit, juice and yogurt, while those made up of single parents and older children
buy more junk foods.
6) Full Nest Decisions:
Babysitter and day care usage is, of course, highest among single-parent and full nest households,
while home maintenance services (e.g. lawn mowing) are most likely to be employed by older
couples and bachelors, in family chores. The monetary value of homes, cars and other durables
is lowest for bachelors and single parents, but increases as people go through the full nest and
childless couple stages.