external factors cb.pptx

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Consumer

Purchase

Decision

Motives

Personality

Needs

Perception

Learning

Attitudes

B u

s i n e s s

Economic

F ami l y

External Factors

Internal Factors

SIMPLE MODEL OF CONSUMER BEHAVIOR



External Influences in

Consumer Behavior



INTRODUCTION

Consumer purchasing decisions are often affected by factors that areoutside of their control but have direct or indirect impact on how we liveand what we consume.

Consumers are faced with many external influences, including anindividual’s culture, subculture, household structure, and groups thathe/she associates with.

Marketers and business owners call these external influences becausethe source of the influence comes from outside the person rather thanfrom inside.

Today consumers are faced with an array of product selection, and

competition is fierce among companies. This is why your understandingof consumer behaviour is vital to the success of your business.

Both internal and external factors are inter connected and work together to assist the consumer decision making process.



INFLUENCING FACTORS IN CONSUMER DECISION MAKING



GROUP BEHAVIOR

Man is social animal who loves to be in groups. Groupsrepresent two or more individuals who share a set of norms,

values, or beliefs and interact to accomplish individual or mutual goal.

Almost all consumer behavior takes place in a group setting of some sort.

A group's norms cover usually all the important behavioural aspects for

the functioning of that group and breaking those rules can bring uppenalties.

When do Group Exert Influence?- The group influence on an individual’s

buying behavior depends on three factors-

Attitude towards the group: This includes Pride, Status, etc.

Nature of the group: This includes, Cohesive, Frequently interacting,Exclusive membership.

Nature of the Product: This includes visibility of the product, Uniqueness

of the product.

Examples: Hardly Davidson Bike group, Friends connection, Aluminas of an

institute, etc.



TYPES OF GROUPS



REFERENCE GROUP

A reference group is any person or group that serves as apoint of comparison for an individual in forming either

general or specific values, attitudes, or a specific guide for behavior.

In marketing prospective, reference group are groups that serve as a

frames of reference for individuals in their purchase or consumption

decisions.

Often a distinction is made between group and reference group. Group

is defined as two or more individuals who share a set of norms, values,

or beliefs and have certain implicit and explicit relationship. Where as

reference group is one whose presumed perspective or values are beingused by an individual to take decisions.

Examples: Shopping with friends, family, educational

decisions.



NATURE OF REFERENCE GROUP

Norms

Norms’ are

generally rules andstandards of

behavior.

Values

Values are sharedbeliefs among

group

Roles

Roles are functions

that an individual

hold in a group.

Status

Status is the

achieved or ascribed position

that the individual

holds.

Socialization refers

to the process by

which new

members learn the

groups system.

Power

A groups influenceon its member

behavior is closely

related to it power.



Positive

membership

Aspiration group

Disclaimant group Dissociative group

Membership Non-membership

Types of Membership

Positive

membership

Aspiration group

Disclaimant group Dissociative group

Primary

Secondary

Informal Formal

Anticipatory

Symbolic

Types of aspiration group

TYPES OF REFERENCE GROUP



TYPES OF REFERENCE GROUP

An individual can be a member of a reference group such as the familyand would be said to be part of a membership group

The same individual may aspire to belong to a cricket club and would besaid to be part of an aspiration group.

A disclaimant group is one to which an individual may belong to or join

then reject the group’s values.

Also an individual may also regard the membership in a specific groupas something undesirable and to avoidable. Such a group is adissociative group.

Primary Informal group: It includes family, peer group, friends etc. Primary formal group: Business group, working colleagues etc.

Secondary Informal group: Women kitty party, sports group, etc.

Secondary formal: Only frequently meet are not so cohesive in nature.



CULTURE

Culture influences consumers through the norms and values establishedby the society in which they live.

It is the broadest environmental factor that influences consumers

behavior.

Culture is inculcated- It is passed down from one generation to another through institutions such as family members and religion.

As culture evolves, it may be possible to associate benefits of a product

or brand with new values or it may be necessary to change the product if

that value is no longer gratifying the society. Example: Movies, TV

serials, etc.

Definition: “Culture as the complex whole that includes knowledge,

beliefs, art, law, morals, customs and any other capabilities and habits

acquired by humans as a member of a society.”



CHARACTERISTIC OF CULTURE

Culture is invented: It cannot be viewed as something that

just exists and is waiting to be discovered. People are

responsible for inventing their culture.

Culture is learnt: It is not biological feature or instinctive.

The process of learning cultural values begin early in life

largely through social interactions among families, friends etc. Culture is Shared: Culture by at large is shared by huge

group of human beings, generally religion, language, etc.

Culture satisfies needs: Culture offers order, direction and guidessocieties in all phases of life by providing tried and trusted ways of

meeting physiological, personal and social needs. Cultures are similar but different : There are certain similarities

among all cultures and many elements are present in all societies suchas cooking, dressing, etc.

Culture is not static: Culture do change gradually and continuously.These change however may be very slow or very fast.



SUB CULTURE

A sub culture is a segment within a culture that share a set if meanings,values or activities that differ in certain respects from those of the overall

culture.

Sub culture analysis enables the marketing manager to focus on beliefs,

values, and customs shared by member of a specific sub group make

them desirable candidates for special marketing attention.

Sub culture therefore can be defined as a distinct culture group that

exists within a layer, complex society as an identifiable segments in

terms of its beliefs customs and values.

Therefore sub culture are relevant units of analysis for marketingresearch.

Sub culture tend to transfer their beliefs and values

from generation to generation. Example: Youths



Category Sub- Culture

Geography North Indian, South Indian, East Indian

Regional Gujarati, Marathi, Punjabi, Tamilians,

Malayalees, etc.

Age Children, Teenagers, Youth, Workingprofessional, etc.

Elderly

People

50 Plus.

Women Children, Teenagers, Youth, Married women,etc.

Caste Muslims, Christians, Hindu, etc.

EXAMPLES FOR SUB CULTURE



FAMILY

Family is defined as a group of two or more

people related by birth, marriage or adoption

and residing together.

House hold is a family and any

unrelated person residing in the same house

and consuming food from a common kitchen

at least once a day. Eg: Hostel

All families are households but all households are not families.

An individual’s immediate family members play an essential role ininfluencing his/her buying behaviour.

Family consists of Parent, Siblings, Spouse, Grandparents, Relatives, etc.

What an individual imbibes from his parents becomes his/her culture. Whathe sees from his childhood becomes his habit or in other words lifestyle.

Family by far is the most important reference group. It is also the most basicconsumption unit for most consumer goods.



FUNCTIONS OF FAMILY

Emotional

Support

Suitable

Life Style

Social

Relationships

Morals and

EthicalValues

Religious

Values

Interpersona

l SkillsEconomic

Well Being

Provides



FAMILY LIFE CYCLE STAGE

Bachelor stage Young, single person <35

Income Expense

Newly married Young couples no children

Income Expense

Full Nest I Young couples with <6 yrschildren Income Expense

Full Nest II Young couples with 6-12 yrs

children Income Expense

Full Nest III Old married couples with

dependent teenage Income ExpenseEmpty Nest I Old married couples with no

children living Income Expense

Solitary

Survivor

Older single person

Income Expense



Communication

targeted at Children

Communication

targeted at Parents

Influencer

(Children)

Initiator

(Parents,

Children)

Decision

Maker

(Parents,

Children)

Purchaser

(Parents)

User

(Parents,

Children)Information

Gathering

FAMILY/HOUSEHOLD DECISION MAKING PROCESS



Some form of class structure or social stratification

has existed in all societies throughout human history.

A consumer's social class refers to his or her standing

in society. It is determined by a number of factors,

including education, occupation and income.

While income is an important indicator of social class,

the relationship is far from perfect since social

class is also determined by such factors as place

of residence, cultural interests and world-view.

Social Class is “defined as the division of members of a society into ahierarchy of distinct status classes, so that members of each class haverelatively the same status and members of all other classes have either more or less status.

Social Class is often measured on the bases of: relative wealth, Power,

prestige.

SOCIAL CLASS



SOCIAL CLASS CATEGORY

Life-style Orientations & Purchasing Tendencies of the Different Social

Classes.Social Class Life-style Orientation Purchasing Tendencies

Upper Class Good taste

Graceful living

Good Things in life

Individual expression

Interest in arts and culture

Quality merchandise

Expensive hobby and recreation

equipment

Travel

Art

Middle Class Respectability

Conformity

social esteem

Items in fashion

Items related to self presentation

Nice clothing, and home items.

Working Class Fun oriented

Focus on Possessions

Work related life

Newest appliances

Sporting events

Food items

Lower Class Close family relationships

Not interested in world affairs

Neighborhood oriented

Readily available products

Status symbols



“UPWARD PULL STRATEGY “ - TARGETED AT MIDDLE CLASS

MiddleClass

Aspiration

s

To belong

toupper-

middle

class

Prefer

Products

consumedby upper-

middle

class

Positionin

g

Upper

class

symbolism

for middle

class

products



OPINION LEADERS HIP

Opinion leaders are those people who, in a given situation, are able to exert

personal influence. They are the ones most likely to influence others through word-of-mouth

communication because others seek advice and information from them.

Opinion leaders can influence the behavior

of consumers positive and negative towards

to the product.

“Opinion leadership is the process by which

one person (the opinion leader) informally

influences the actions or attitudes or others,

who may be opinion seekers or merely opinion recipients.

In marketing context opinion leaders are those people who have used theproduct by them self.

Young consumers often take the assistance of opinion leaders in therepurchase.

Opinion leadership is category specific – an opinion leader in one productcategory is often an opinion seeker in others.



OPINION LEADERSHIP FLOW OF INFORMATION



SITUATION IN WHERE OPINION LEADERS ARE CONSIDERED

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