Download VTU MBA 3rd Sem 16MBAMM301-Consumer Behaviour CB Chapter 5 -Important Notes

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External Influence on Consumer Behavior

Part 1

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Module 5

Social Class

• The division of members of a society into distinct status classes, so that members of each class have relatively similar lifestyles and members of other classes have either higher or lower status than members of their own class.

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Characteristics of Social Class

• Is hierarchical
• Is a natural form of segmentation
• Provides a frame of reference for consumers
• Reflects a person's relative social status

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Social Class and Social Status

Status is frequently thought of as the relative rankings of members of each social class

• Wealth
• Power

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• Prestige

Status Consumption

• The process by which consumers actively increase their social standing through noticeable purchases and possessions.

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Social Class Measures

• Subjective Measures: individuals are asked to estimate their own social-class positions
• Reputational Measures: informants make judgments concerning the social-class membership of others within the community
• Objective Measures: individuals answer specific socioeconomic questions and then are categorized according to answers.

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Objective Measures

• Single-variable indexes
  • Occupation
  • Education
  • Income
  • Other Variables

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• Composite-variable indexes
  • Index of Status Characteristics
  • Socioeconomic Status Score

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Index of Status Characteristics

• A composite measure of social class that combines occupation, source of income (not amount), and house type / dwelling area into a single weighted index of social class standing.

Socioeconomic Status Score

• A multivariable social class measure used by the U.S. Bureau of the Census that combines occupational status with educational attainment into a single measure of social class standing.

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Social Class Structure

Five-Category Social Classes

• Upper
• Upper-Middle

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• Middle
• Lower-Middle
• Lower

FIGURE 11-4 Social-Class Profiles

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The Upper-Upper Class—Country Club Establishment

• Small number of well-established families
• Belong to best country clubs and sponsor major charity events
• Serve as trustees for local universities and hospitals
• Prominent physicians and lawyers

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• May be heads of major financial institutions, owners of major companies
• Accustomed to wealth, so do not spend money conspicuously

The Lower-Upper Class—New Wealth

• Not quite accepted by the upper crust of society
• Represent "new money"

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• Successful business executives
• Conspicuous users of their new wealth

Figure 11-14 (continued)

The Upper-Middle Class—Achieving Professionals

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• Have neither family status nor unusual wealth
• Career-oriented
• Young successful professionals, corporate managers, and business owners
• Most are university graduates, many with graduate degrees
• Active in professional, community, and social activities

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• Have a keen interest in obtaining the “better things in life”
• Their homes serve as symbols of their achievements
• Consumption is often conspicuous
• Very child-oriented

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Figure 11-14 (continued)

The Lower-Middle Class—Faithful Followers

• Primarily non-managerial white-collar workers and highly paid blue-collar workers
• Want to achieve respectability and be accepted as good citizens
• Want their children to be well-behaved

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• Tend to be churchgoers and are often involved in church-related activities
• Prefer a neat and clean appearance and tend to avoid faddish or highly styled clothing
• Constitute a major market for do-it-yourself products

Figure 11-14 (continued)

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The Upper-Lower Class—Security-Minded Majority

• The largest social-class segment
• Solidly blue collar
• Strive for security (sometimes gained from union membership)
• View work as a means to "buy" enjoyment

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• Want children to behave properly
• High wage earners in this group may spend impulsively
• Interested in items that enhance their leisure time
• Husbands have a strong “macho" self-image
• Males are sports fans, heavy smokers, beer drinkers

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Figure 11-14 (continued)

The Lower-Lower Class—Strugglers

• Poorly educated, unskilled labourers
• Often out of work

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• Children are often treated poorly
• Tend to live a day-to-day existence

Social Class and Marketing

• Clothing, Fashion, and Shopping
  • Where one shops

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  • External point of identification
• The Pursuit of Leisure
  • Type of leisure activities differ
  • continued

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Social Class and Marketing

• Saving, Spending, and Credit
  • Level of immediate gratification sought varies
• Responses to marketing communications
  • Upper classes have a broader and more general media exposure pattern than do the other social classes

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  • Regional variations in language rise as we move down the social-class ladder
  • Exposure to media varies by social class
  • continued

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Features of Social Class

• Multidimensional
• Hierarchical
• Restrict behaviour
• Homogeneous

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• Dynamic

Culture: The Original Definition

• E.B. Tylor, an English anthropologist and pioneer founder, gave culture its classic definition with:
• "That complex whole which includes Knowledge, belief, art, morals, law, customs, and any other capabilities and habits acquired by man as a member of society"

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Characteristics Of Culture

All cultures have at least five characteristics in common:

• Culture is learned
• Culture is based on symbols

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• Culture is shared
• Culture is patterned or integrated
• Culture is usually adaptive

Factors Affecting Culture

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• 1 social factors
  • Reference Groups
  • Family
  • Roles and status
• 2 personal factors
  • Age and stages in lifecycle

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  • Occupation and Economic circumstance
  • Personality
  • Lifestyle
  • values

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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 instinct. The process of learning cultural values begin early in life largely through social interactions among families.
• Culture is Shared: Culture by at large is shared by a large group of human beings, generally religion, language etc.

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• Culture satisfies needs: Culture offers order, direction and guidance in societies in all phases of life by providing tried and tested methods 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 cultures as cooking, dressing, etc.
• Culture is not static: Culture do change gradually over time. These change however may be very slow or very fast.

Customs

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• These are the ways of behaving under specific circumstances
• how you react to the situation
• Different culture may have different customs

Characteristics of customs

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• Generation to generation
• Reactions to situation
• Provide clues to culture
• Specific behaviours under circumstance

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Role of Customs

• Determines customs and Traditions
• Predicts consumer buying behaviour
• Helps in Understanding
• Society's Culture

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• Understand purchase pattern
• Predict customers' acceptance towards products

BELIEFS, VALUES ATTITUDES, AND BEHAVIORS

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Everyone has a philosophy your philosophy is what you believe, your thoughts, ideals, your eternal pursuit of truth and wisdom. As we think, so we live; and how we live is a pretty good indication of what we think.

- Albert A. Mon

A belief is an internal feeling that something is true, even though that may be unproven or irrational.

eg: I believe that walking under a ladder brings bad luck or I believe that there is life after death.

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Beliefs are the convictions we hold to be true, usually without actual evidence.

Beliefs are basically assumptions about the world and our values stem from them.

Our beliefs grow from what we see, hear, experience, read and think about. From these things we derive an opinion that we hold to be true and unmovable over time. From our beliefs we derive our values, which may either be correct or incorrect when compared with actual evidence, but nonetheless hold true for us.

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IDEAS WHERE OUR BELIEFS COME FROM

• CULTURE
• PEERS
• EDUCATION
• EXPERIENCES

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• MENTORS

WHAT IS VALUE:

A value is a measure of the worth or importance a person attaches to something. Our values are often reflected in the way we live our lives.

eg: I value freedom of speech. I value my family.

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WHAT IS VALUES

Set of values adopted by an individual or society that determines behavior

Categories of Values

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• Personal
• Social
• Economic
• Political
• Religious

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Where do values come from?

Our values come from a variety of sources. Some of these include:

• family
• peers (social influences)

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• the workplace (work ethics, job roles)
• significant life events (death, divorce, losing jobs, major accident and trauma, major health issues, significant financial losses and so on)

Role of Customs, Values and Beliefs in Consumer Behaviour?

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Culture and Marketing Strategies

• 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 as needed
• Modify marketing mix to subcultures if the culture is diverse

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• Be aware of symbols and ritual

Subculture

A concept from the academic fields of sociology and anthropology, a subculture is a group of people within a culture that differentiates itself from the parent culture to which it belongs, often maintaining some of its founding principles.

Subcultures develop their own norms and values regarding cultural, political and sexual matters

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EXAMPLES FOR SUB CULTURE

Sub-Cultural division and Consumer Behaviour of consumers in India

• The influence of culture is inevitable in our society.

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• However, within a larger society, there are many subgroups exhibiting variations in behavioral pattern.
• Marketers have begun to segment large societies into subgroups that are homogeneous in relation to certain characteristics.

Sub-Cultural division and Consumer Behaviour of consumers in India

• The individuals of a specific subculture vary in their consumption patterns.

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• They show variation in lifestyle, financial viability, reading habits, purchase of specific brands in a particular category, purchase time, store patronage, etc.

Multi Culture in India

• India is said to be a country of multi cultures.
• It is so because of its long history of civilization.

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• Different rulers have ruled the country.
• These rulers had different systems of governance. However, now there is unity in diversity which helps the marketer in framing strategy for marketing.

• The diversity has given birth to ever increasing subcultures. India is a country with 29 states and six union territories.
• Each state has its own own culture.

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• There are more than one subculture is found in each state.
• There are major religions such as Hindus, Muslims, Jains and Bhuddhas.

• Each state and religion has its own traditional style of dressing, wearing ornaments, food preferences etc.
• Wheat and wheat products are consumed more in north India. People in south India consume rice.

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• Certain communities do not eat non- vegetarian food, while among the other communities non-vegetarian food is popular

Differences in Consumption pattern

• Differences are found in the consumption pattern in the urban sub-cultural division.
• Variations are found in preferences for food, home, furnishing, transport vehicles used, recreation activities, saving pattern, etc.

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Economic Status – Classes of People

• Economic status is another important sub-cultural variable. According to economic status, people can be divided into three classes:
  • the upper or affluent class,
  • the middle class, and;
  • the lower class.

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• The affluent class accounts for only a negligible percentage of the society. Luxury items are consumed more by this class.
• On the other hand, the lower class spends more on necessities. People in the lower class have very little purchasing power.

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• What is more important to the marketers is the middle class which forms a big chunk.
• Marketers have evinced a keen interest in the consumption pattern of the middle class.
• In spite of the regional, linguistic and cultural variations, the middle class consumers follow a common pattern of buying behavior.

SUBCULTURE

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Types of subcultures

TYPES OF SUB-CULTURE:

• Based on the varying criteria, there can be different sub cultures.
• The important subcultural categories are nationality, geographic location, religion, race and caste, gender and age.

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• From a marketing perspective, these could all be treated as distinct market segments, which need to be studied carefully before deciding on a product/service offering and a suitable marketing mix for a particular segment(s).

Nationality:

• Sub-cultures could be based on nationality.
• While we are all Asians, we are distinct with our own cultures and are different in terms of language, customs and traditions.

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• Thus, we are classified as Indians, Burmese, etc.

Geographical location:

• Within a country, we could be different across climatic conditions, regions and terrains, and density of population.
• This is more so in cases where the country is large and spread across a huge population occupying a vast territory.

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• People tend to develop regional affinity and this gets reflected in the food they eat, clothes they wear, hobbies they pursue, etc.

Religion:

• People also exhibit differences when it comes to the religion they belong to.
• Hindus, Muslims, Christians, Sikhs, Parsis etc. differ from one another and have different values and beliefs, customs and traditions etc.

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• As consumers, they make purchase choices and consumption that are influenced by the dictates of their religion, religious scriptures, and holy books.

Race and caste:

• Culture and its components also vary across races and castes.
• Pathans and Yadavs are all different from one another. Such racial sub-cultures also impact buying behavior and consumption patterns.

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Gender:

• Because gender roles have an impact on acts of consumption, it constitutes an important cultural sub-group. Men and women across all cultures are assigned different traits that tend to make them masculine and feminine. They also play different roles in society and are two distinct sub-groups.

Cross-Cultural Consumer Analysis

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To determine whether and how to enter in a foreign market, firms must conduct some form of 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.
• Such analysis can provide marketers with an understanding of the psychological, social, and cultural characteristics of the foreign consumers they wish to target, so that they can design effective marketing strategies for the specific national markets involved.

Cross-Cultural Consumer Analysis

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Issues

• Similarities and differences among people
• The growing global middle class
• The global teenage market
• Acculturation

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• Growing affluence and sophistication of many global consumers
• South America, Eastern Europe, and Asia
• Marketers increasingly focus on the global teenage market

What are three similarities between Indian culture and American culture.

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• Political systems: Both the countries have a democratic culture.
• The U.S is the world's oldest democracy while India is the world's largest democracy.
• Both the countries were former British colonies.

What are three similarities between Indian culture and American culture.

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Entrepreneurship:

• Both the countries love to take risks to create wealth.
• However, India's full potential has not yet been unleashed due to socialist policies from 1947-1992.
• The recent wealth creation in the Indian economy was unleashed in the Indian economy post 1992 and these policies are still in place.
• Also, the US and India trade has been increasing rapidly.

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• The IT industry links between both the countries are strong.

Here are the differences between both the countries

Ten Differences Between Collectivist and Individualist Cultures

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Here are the differences between both the countries:

Shame based vs guilt based society:

In this aspect, India is similar to its Asian neighbors.

India is predominantly a Shame based society while the US is a guilt based society.

For instance, if you take a bribe in India you would not feel ashamed unless you are caught. However, in the U.S. you would feel ashamed regardless, because the US is a guilt based society.

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Cross-Cultural Consumer Analysis

Issues

• Similarities and differences among people
• The growing global middle class

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• The global teen market
• Acculturation

• The growing similarities between middle-class teens in many parts of the world
• More affluent and have more money to spend than their parents did at the same age
• Marketers increasingly focus on the global teenage market

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Cross-Cultural Consumer Analysis

Issues

• Similarities and differences among people
• The growing global middle class

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• The global teen market
• Acculturation

• Growing affluence and sophistication of many global consumers
• American, European, and Asian teens
• Marketers increasingly focus on the global teenage market

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Cross-Cultural Consumer Analysis

Issues

• Similarities and differences among people
• The growing global middle class

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• The global teen market
• Acculturation

• There are affluent, fashion- and image-conscious young people in many countries
• They are eager to try new products and have the interest, the discretion, and the means to purchase them
• Consumer behavior is becoming more and more homogenous

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Cross-Cultural Consumer Analysis

Issues

• Similarities and differences among people
• The growing global middle class

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• The global teen market
• Acculturation

• Marketers must determine everything about the foreign consumers relevant to the product or service that they plan to sell
• Usage conditions, product benefits, and promotional appeals
• In foreign countries

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Research Issues in Cross-Cultural Studies

Table 13.8

Table 13.8 (continued)

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Major Challenges in Cross Culture

• Ambiguity
• Cultures provide people with ways of thinking, seeing, hearing, and interpreting the world. Thus there are different things to people from different cultures even if they talk the "same" language. When the language is not the same and translation has to be used to communicate, the potential for misunderstandings increases

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• Inflexible Attitude
• Some people when they enter a different culture try to avoid exposure or experience of the host culture. This introvert behavior and closed mindset, leading to the visitor is not accepting the host culture. It is important to be open on new experiences to learn and adapt to the new culture.

• An Indian boss planned to delegate a task to an intern. Being in an India, the supervisor was quite comfortable giving ambiguous instructions and assumed that the intern would feel the same and he would immediately start working on the task. But, the intern did not move a single step forward and requested his boss to provide clear instructions. Rather than understanding the cultural context of this situation, the boss turned it into a series of opinionated arguments with the intern and tried to change the behavior of the trainee to accommodate more ambiguous instructions. Such scenarios, often lead to poor communication and team dynamics.

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• Ethnocentrism
• Ethnocentrism is the assumption that the culture one is familiar with is right, moral and rational, and that other cultures are wrong or inferior. Ethnocentrism is often an unconscious behavior and is therefore difficult to prevent in advance. When confronted with a new or different culture, individuals judge it with reference to their own culture and make no attempt to evaluate the new culture from that country's point of view.

Strategies to overcome cross-cultural problems

• Understanding the Communication style

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• Different cultures have different communication styles. In terms of communication context, cultures are divided into “high context” and "low context" cultures. Examples of High context cultures are African, Chinese, Indian, Japanese, among others. Low context cultures include Australian, German, etc.

• Understanding the Cultural Values
• According to Geert Hofstede, there is no such thing as a universal management method. Management interacts with the whole of society including politics, family, religion, beliefs, etc.

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Here's the comparison of India, China and United States on the basis of Hofstede's cultural dimensions.

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