BBA-804 CONSUMER BEHAVIOUR

Prepared By: Department of management NIMS, Noida

Section I Consumer Behaviour: Nature & Application. Consumer as an individual: Consumer needs & Motivations. (ii) Influence of personality, psychographics & attitude on consumer behaviour.

INTRODUCTION All of us are consumers. We consume things of daily use, we also consume and buy these products according to our needs, preferences and buying power. These can be consumable goods, durable goods, specialty goods or, industrial goods. What we buy, how we buy, where and when we buy, in how much quantity we buy depends on our perception, self concept, social and cultural background and our age and family cycle, our attitudes, beliefs values, motivation, personality, social class and many other factors that are both internal and external to us. While buying, we also consider whether to buy or not to buy and, from which source or seller to buy. In some societies there is a lot of affluence and, these societies can afford to buy in greater quantities and at shorter intervals. In poor societies, the consumer can barely meet his barest needs. The marketers therefore try to understand the needs of different consumers and having understood his different behaviors which require an in-depth study of their internal and external environment, they formulate their plans for marketing. Management is the youngest of sciences and oldest of arts and consumer Behavior in management is a very young discipline. Various scholars and Academicians concentrated on it at a much later stage. It was during the 1950s, that marketing concept developed, and thus the need to study the behavior of consumers was recognized. Marketing starts with the needs of the customer and ends with his satisfaction. When everything revolves round the customer, then the study of consumer behavior becomes a necessity. It starts with the buying of goods. Goods can be bought individually, or in groups. Goods can be bought under stress (to satisfy an immediate need), for comfort and luxury in small quantities or in bulk. For all this, exchange is required. This exchange is usually between the seller and the buyer. It can also be between consumers. Consumer behavior can be defined as the decision-making process and physical activity involved in acquiring, evaluating, using and disposing of goods and services.

This definition clearly brings out that it is not just the buying of goods/services that receives attention in consumer behavior but, the process starts much before the goods have been acquired or bought. A process of buying starts in the minds of the consumer, which leads to the finding of alternatives between products that can be acquired with their relative advantages and disadvantages. This leads to internal and external research. Then follows a process of decision-making for purchase and Using the goods, and then the post purchase behavior which is also very important, because it gives a clue to the marketers whether his product has been a success or not. To understand the likes and dislikes of the consumer, extensive consumer Research studies are being conducted. These researches try to find out: What the consumer thinks of the companys products and those of its Competitors? How can the product be improved in their opinion? How the customers use the product? What is the customers attitude towards the pro duct and its advertising? What is the role of the customer in his family? The following key questions should be answered for consumer research. A market comes into existence because it fulfills the needs of the consumer. In this connection, a marketer has to know the 70s framework for consumer research.

Marketing Strategy and Consumer Behavior (i) Marketing Analysis (a) Consumer (b) Company (c) Competition (d) Condition

(ii) Marketing Segmentation (e) Identify product related needs (f) Group customers with similar need sets (g) Describe each group (h) Select target market (iii) Marketing Strategy (i) Product (j) Price (k) Distribution (l) Communication (m) Service (iv) Consumer Decision Process (n) Problem recognition (o) Information searchinternal, external (p) Alternative evaluation (q) Purchase (r) Use (s) Evaluation (v) Outcomes (t) Customer satisfaction (u) Sales (v) Product/Brand image

APPLICATION OF CONSUMER BEHAVIOR 1.To Analyze Market Opportunity: The study on consumer behavior helps to understand market opportunity, so we can enter to new market opportunities. Customer is the king in the market, so analysis of consumer's needs is essential for understand nature of market.

2. Selecting the Target Market: The study of consumer behavior help to understand market, it help to understand customer needs, and we can concentrate to particular needs of customer. By the analysis of market if we find out one particular segment needs a special care, then we can concentrate in to that area. 3 .Determining the Product Mix: Having identified the unfulfilled need slot and having modified the product to suit differing consumer tastes, the marketer now has to get down to the brass tacks of marketing. He has to determine the right mix of product; price promotion and advertising understand his behavior. 4. Use in Non-profit and Social Marketing: The knowledge of consumer behavior is also useful in the marketing of non-profit or social or governmental services of institution such as hospitals, voluntary agencies, law enforcement and tax collection agencies.
APPROACHES TO CONSUMER BEHAVIOR

There are two broad approaches to study of consumer behavior a managerial approach views consumer behavior as an applied social science. And other one holistic approach views consumer behavior as a pure rather than applied social science. Managerial approach: a managerial approach to consumer behavior tends to be more micro and cognitive in nature. It is micro in emphasizing the individual consumer. His or her attitude, perception, lifestyles, and demographic characteristics. Environmental affects, reference group, the family, culture are studied in the context of how they influence the individual consumer behavior. Holistic approach: a holistic approach is more macro in its orientation, it tends to focus, more on the nature of consumption experience than on the purchasing

process because it stress the broader, culturally derived context of consumption. Consumption is seen as being symbolic as well as normative.

Role of Consumer Behavior in Marketing Consumer Behavior refers to the study of buying tendencies of consumers. An individual who goes for shopping does not necessarily end up buying products. There are several stages a consumer goes through before he finally picks up things available in the market. Various factors, be it cultural, social, personal or psychological influence the buying decision of individuals. Marketers need to understand the buying behavior of consumers for their products to do well. It is really important for marketers to understand what prompts a consumer to purchase a particular product and what stops him from buying. What marketers need to understand? The psychology of consumers (what they feel about a particular product and their brand on the whole). How consumers are influenced by their immediate surroundings, family members, friends, co workers and so on.

What a consumer thinks when he goes out for shopping? A marketer needs to first identify his target consumers and understand their lifestyles, psychologies, income, spending capabilities, mentalities to offer them the right product. Individuals from lower income group would never be interested in buying expensive and luxurious products. He would first fulfill his basic

physiological needs like food, air, water etc. Trying to sell a Mercedes or a Rado watch to someone who finds it difficult to make ends meet would definitely be a disaster. Kelloggs K special would hardly find any takers in the low income group. In this segment, individuals would be more interested in buying fresh fruits, vegetables, pulses which are necessary for their survival rather than spending on health supplements. It is really essential for the marketers to understand the needs of consumers. Find out what they are actually looking for? There are ideally two different ways which enable marketers to understand their consumers. Primary Research Secondary Research Primary Research - Primary Research refers to a research methodology where marketers interact with consumers directly and gather as much information as they can. Information is generally collected through surveys, questionnaires, feedback forms, interviews etc. Secondary Research - Secondary Research often refers to relying on information which has been collected by others at some point of time. The background and family status of an individual also influence his/her buying behavior. Selling a laptop to an individual who is not much educated would be pointless. Remember consumers would show interest in your products only if they are of any use to them or their immediate family members. A low grade worker would never be interested in purchasing business suits or formal shirts.

 Canned juices are a hit among middle and higher income group where individuals are really conscious about their health and fitness. Individuals who live hand to mouth would never spend on sugar free tablets, health supplements, or for that matter Diet Coke. It is also important to give complete information to end-users. Do not hide anything from them. It is not ethical. All tobacco products come with a warning. Individuals should be familiar with not only the benefits but also the side effects of the products.

CONSUMER NEEDS AND MOTIVATION

Diversity is not a new phenomenon. We all seek different pleasures and spend our money in different ways. One husband and wife may spend their vacation on a cruise to Singapore, their friends may prefer a camping trip to Nathiagali. One father and mother may buy their young child a bicycle; another may buy theirs a personal computer. One woman may spend her Christmas bonus on a new washer/dryer; her neighbor may spend hers to join a health club. Human needs consumer needs are the basis of all modern marketing. Needs are the essence of the marketing concept. The key to a companys survival, profitability and growth in a highly competitive marketing environment is its ability to identify and satisfy unfulfilled consumer needs better and sooner than the competition. Marketers do not create needs, though in some instances they may make consumers more keenly aware of unfelt needs. Successful marketers define their markets in terms of the needs they presume to satisfy, rather than in the terms of the products they sell. This is a market-oriented, rather than a production-oriented, approach to marketing. A marketing orientation focuses on the needs of the buyer; a production-orientation focuses on the

needs of the seller. The Marketing concept implies that the manufacturer will make only what it knows people will buy; a production orientation implies that the manufacturer will try to sell what it decides to make.

What is Motivation? We are interested in motivation because it is the driving force of behavior and there must be a reason, a motive for purchasing, and using products. Motivation can be described as the driving force within individuals that impels them to action. The driving force is produced by a state of tension, which exists as a result of an unfulfilled need. Individuals strive both consciously and unconsciously to reduce this tension through behaviour which they anticipate will fulfill their needs and thus relieve them of the stress they feel. People experience wishes, desires and needs. These can originate from unmet physical needs or from fantasy or imagery. On this basis, we can assume that needs can be triggered by both internal and external forces. There are many factors that can trigger motivation, and motivational researchers try to identify and understand these factors. Until now, there has been a tendency to focus on needs, and a popular approach has been to assume that people do not act of their own will. Freud introduced the notion are largely unconscious of the real psychological forces shaping their behaviour. his theory assumes that we grow up repressing many urges. These urges are never eliminated or under perfect control; they emerge as dreams, slips of the tongue, or in neurotic and obsessive behaviour. So, reasons for purchasing a product may be conscious or unconscious.
Needs

We use the term need when referring to any human requirement, although there is a variety of other words that may be sued such as wants or desires. Every individual has needs; some are innate, others are acquired, but, most importantly, needs underlie all human action. Innate needs are physiological (i.e. biogenic); they include the needs for food, water, air, clothing, shelter and sex. Because they are needed to sustain biological life, biogenic needs are considered primary needs or motives.

Acquired needs are needs that we learn in response to our culture or environment. They may include the need for self-esteem, prestige, affection, power or learning. Because acquired needs are generally psychological (i.e. psychogenic), they are considered secondary needs or motives.
Goals

Goals are sought-after results of motivated behaviour. All behaviour is goal-oriented. Our discussion of motivation is in part connected to generic goals that is, the general classes or categories of goals that consumers select to fulfill their needs. Marketers are even more concerned with consumers product-specific goals that is, the specifically branded or labeled products they select to fulfill their needs. For example, Lipton Company wants their consumers to view iced tea as a good way to quench summer thirst (i.e. as a product-specific goal). The Selection of Goals People have many needs, and for any given need there are many different and appropriate goals. The goals selected by individuals depend on their personal experiences, physical capacity, prevailing norms and values, and the goals accessibility in the physical and social environment. For example, a young man may have a strong hunger need. If he is a young university athlete, he may envision a thick sirloin steak as his goal object; if his doctor has advised him not to consume red meat, he may then settle for tuna steak. If he has never tasted steak, if it is outside the realm of personal experience, he would probably not even

think of it, but instead select a food that has previously satisfied his hunger. Our perception of ourselves also serves to influence the specific goals we select. The products we own, would like to own, or would not like to own, are often perceived in terms of how closely they reflect our selfimage. A product that is perceived as matching our self-image has a greater probability of being selected than one that is not. Thus, a man who perceives himself as young or sophisticated may drive a Porsche who perceives herself as rich and conservative may drive a Mercedes. Interdependence of Needs and Goals Needs and goals are interdependent; neither exist without the other. However, people are often not as aware of their needs as they are of their goals. For example, a teenager may not be consciously aware of her social needs but may join a photography club to meet new friends. A local politician may not be aware of a power need but may regularly run for public office.

Positive and Negative Motivation Motivation can be positive or negative in direction. We may feel a strong driving force towards some object or condition, or a driving force away form some object or condition. For example, a person may be impelled towards a restaurant to fulfill a hunger need and away form motorcycle transportation to fulfill a safety need.

Rational versus Emotional Motives Some consumer behaviorists distinguish between so called rational motives and emotional (or-rational) motives. They use the term rationally when they carefully consider all alternatives and choose those that give them greatest utility. In a marketing context, rationality implies that consumers select goals based on totally

objective criteria, such as size, weight, price, or kilometers per liter. Emotional motives imply the selection of goals according to personal or subjective criteria (e.g. pride, fear, or the desire for individuality, affection, status).

The Dynamic Nature of Motivation Motivation is a highly dynamic construct that is constantly changing in reaction to life experience.

Needs and Goals are constantly changing Our needs and goals are always growing and changing in response to our physical condition, environment, interactions with others, and experiences. As we attain our goals, we develop new ones. If we do not attain our goals, we continue to strive for old ones, or develop substitute goals. Some of the reasons why needdriven human activity never ceases include the following:

Existing needs are never completely satisfied; they continually induce activity designed to attain or maintain fulfillment. As needs become satisfied, new and higher order needs emerge to be fulfilled. People who achieve their goals set new and higher goals for themselves.

Arousal of Motives Most of our specific needs are dormant much of the time. The arousal of any specific set of needs at a specific point in time may be caused by internal stimuli found in our physiological conditions, or in our emotional or cognitive processes, or by external stimuli in the outside environment. For the most part, purchases will

not be made unless we experience a need and are activated to satisfy it. Unsatisfied needs create a state of tension. There is agreement that most individuals are tension avoiders. However, if tension cannot be avoided, most of us would wish to resolve the tension as quickly as possible, and this creates a certain type pf behavior. The amount of energy we are willing to expend in the purchase of a product is a function of both the level of tension the unsatisfied need state creates and the degree to which we think the product will satisfy the need. Motivation levels can, therefore, range from passion to inertia. In turn, this affects the level of involvement that consumers display in the purchase situation. Physiological Arousal Bodily needs at any specific moment are rooted in our physiological condition at that moment. A drop in blood sugar level, or stomach contractions, will trigger awareness of a hunger need. A decrease in body temperature will induce shivering, which makes us aware of the need for warmth. Emotional Arousal Thinking or daydreaming sometimes results in the arousal or stimulation of latent needs. People who are bored or frustrated in attempts to achieve their goals often engage in daydreaming, in which they imagine themselves in all sorts of desirable situations. These thoughts tend to arouse dormant needs, which may produce uncomfortable tensions that push them into goal-oriented behavior. A young woman who dreams of becoming a business tycoon may enroll in business school. A young man who wants to play professional football may identify with a major league player and use the products he endorses commercially.

Cognitive Arousal

Sometimes random thoughts or a personal achievement can lead to a cognitive awareness of needs. An advertisement that provokes memories of home might trigger instant recognition of the need to speak with someone special.

Environmental Arousal The set of needs activated at a particular time are often determined by specific cues in the environment. Without these cues, the needs would remain dormant. For example, the six o clock news, the sight or smell of freshly baked bread, fast food TV commercials, the childrens return from school all these may arouse the need for food.

Hierarchy of Needs One of the most widely accepted theories for human motivation has been developed by Abraham Maslow. His theory can be applied to interpreting how consumer goods and services can be perceived as satisfying different level of needs of consumers.

In summary, the hierarchy of needs theory postulates a five-level hierarchy of prepotent human needs. Higher-order needs become the driving force behind human behavior as lower-level needs are satisfied. The theory says, in effect, that dissatisfaction not satisfaction motivates behavior.

A Trio of Needs Some psychologists believe in the existence of a trio of basic needs: the needs for power, affiliation, and achievement. The power need relates to our desire to control our environment. It includes the need to control other people and various objects. This need appears to be

closely related to the ego need, in that many individuals experience increased self enhancement when they exercise power over objects or people. A number of products, such as cars, lend themselves to promises of power or superiority for users. Affiliation is a well-known and well-researched social motive that has farreaching influence on consumer behavior. The affiliation need suggests that behavior is highly influenced by the desire for friendship, acceptance, and belonging. People with high affiliation needs tend to have a strong dependence on others. They often select goods they feel will meet with the approval of friends. A considerable number of research studies have focused on the achievement need. Individuals with a strong need for achievement often regard often regard personal accomplishment as an end in itself. The achievement need is closely related to both the egoistic need and selfactualization need. People with a high need for achievement have certain traits that make them open to relevant appeals. They are more selfconfident, and enjoy taking calculated risks. They research their environment actively, and are very interested in feedback. Their interest in monetary rewards or profits is primarily due to the feedback that money provides as to how they are doing.

PERSONALITY, PSYCHOGRAPHICS AND CONSUMER BEHAVIOUR INTRODUCTION Consumer behaviour is an integral part of our human activity and concerns those processes that influence our consumption related

decisions. These processes consist of a range of external and internal factors such as culture, income, perception, attitudes, learning patterns and personality (Schiffman & Kanuk, 1991). They help us understand the various consumption needs of individuals and the reasons for the decisions that consumers make. Within this open system's perspective, focus will be placed on one of these internal variables, namely personality, and the influence, affect and relevance it has on individual behaviour and marketing research in South Africa. Personality indicates the persistent disposition of an individual to behave in a particular way (Sarason & Sarason, 1986). Individuals can therefore be described as high risk takers, aggressive or very sociable, and it serves to help us differentiate between individuals, and to segment people into different personality groups. Personality has therefore been found to be one of the more engrossing concepts in consumer behaviour because it is thought that it will enable marketers to segment people into similar consuming groups and thereby facilitate the development of standardised products and promotional campaigns (Schiffman & Kanuk, 1991). It has also been thought that because of the persistent or stable quality of personality, one can learn which personality characteristics will influence specific consumer responses (Schiffman & Kanuk, 1991). Various personality theories and psychographic inventories have therefore been applied to the area of marketing in order to explain and predict such behaviour.
PERSONALITY THEORIES Psychoanalytic Theory

In consumer behaviour, the psychoanalytic theory has been applied in order to emphasize the unconscious nature of personality, and the way behaviour is related to childhood conflicts and the stresses between the id, ego and super ego within the personality system (Assael, 1987). The interaction of these three components account for the variety of personalities, attitudes and behaviour patterns of people, and for some of the consumer decisions people make (Kassarjian, 1971).

Researchers in applying the psychoanalytic theory to consumer behaviour have based their studies on the premise that human drives are largely unconscious, and that consumers are not aware of their true motives (Engel & Blackwell, 1990). It has been argued that these unconscious motives can only be determined through indirect methods of research, and therefore techniques such as observation and inference, projective techniques, focus group discussions and in depth interviews have been used. They focus on the consumers purchases so that what we wear, drive and the products we use are reflections and extensions of our personality (Schiffman & Kanuk, 1991). The psychoanalytic approach has been criticised because it lacks empiricism. It has also been questioned whether it is really possible that deep-seated motives can be influenced by advertising strategies (Assael, 1987). However, despite this critique, psychoanalysis has provided marketers with some actionable findings. In the case of power tools, studies have suggested that they seem to provide men with a feeling of omnipotence and masculinity, while in the case of men who buy convertibles, it is seen as a substitute mistress (Engel & Blackwell, 1990). To a large extent, advertising has been influenced by the psychoanalytic approach to personality, especially in terms of the emphasis on sexual and other deep seated biological instincts (Engel & Blackwell, 1990). Marketers have tried to influence the behaviour of consumers by stimulating the individual's primitive instincts and fantasies, and offering a means of gratification for them. Although the psychoanalytic approach lacks empiricism, and findings based on this kind of research have been subject to serious questions of validity, it has made marketers realise that consumers are driven by internal forces of which they are unaware. Psychoanalysis has served to bring marketers face to face with a group of consumers, and instead of presenting marketers with a number of meaningless statistical outcomes, it has provided them with some explanation as to the behaviour of

consumers. Prior to the advent of such personality research, advertising and marketing research was described as "a wasteland of percentage" (Assael, 1987 p.218). However, researchers have stated that one should go further to gain a thorough and in-depth understanding of personality and consumer decision making, as a consumer's personality is a result of more than just subconscious drives (Engel & Blackwell, 1990).

Section II Consumer as a perceiver & learner. Individual differences in behavior personality, values, lifestyle. Consumer behavior & external influences : Group dynamic & consumer reference groups

Consumer as a perceiver & learner. The customers perception of a product or a brand is what matters Perception is the process by which an individual selects, organizes, and interprets the information he or she receives from the environment. The Process of Perception Sensation Organization Interpretation Factors that Shape Perception Stimulus characteristics The nature of information from the environment Context characteristics The setting in which the information is received Customer characteristics Personal knowledge and experiences Stimulus Characteristics Sensory Stimulates any of the five senses Information content Moves the perceptual process beyond sensation or stimulus selection towards organization and interpretation

The Customer as a Learner Learning is a change in the content of long-term memory

 Human learning is directed at acquiring a potential for future adaptive behaviour Mechanisms of Learning Cognitive learning Classical conditioning Instrumental conditioning Modelling

Cognitive Learning Acquiring new information from written or oral communication (i) Rote memorization (ii) Information is rehearsed until it gets firmly lodged in long-term memory (iii) Problem solving (iv) Actively processing information Classical Conditioning The process in which a person learns an association between two stimuli due to their constant appearance as a pair (i.e., Pavlovs dog) (i) Unconditioned stimulus (UCS) (ii) A stimulus toward which a customer already has a pre-existing specific response, so the response to it does not have to be conditioned (iii) Conditioned stimulus (CS) (iv) A stimulus to which the customer either does not have a response, or has a pre-existing response that needs modification, so a new response needs to be conditioned Instrumental Conditioning

 We learn to respond in certain ways because a response is instrumental to obtaining a reward Behaviourism theory (B.F. Skinner) Marketers use this learning mechanism most effectively by making the product its own intrinsic reward (i) Coupons (ii) Sweepstakes (iii) Rebates (iv) Frequent flier programs

Modelling We learn by observing others Four classes of people likely to be imitated by others: Persons superior in age-grade hierarchy Persons superior in social status Persons superior in intelligence ranking system Superior technicians in any field

Components of Personality While there are many different theories of personality, the first step is to understand exactly what is meant by the term personality. A brief definition would be that personality is made up of the characteristic patterns of thoughts, feelings and behaviors that make a person unique. In addition to this, personality arises from within the individual and remains fairly consistent throughout life. Some of the fundamental characteristics of personality include: Consistency - There is generally a recognizable order and regularity to behaviors. Essentially, people act in the same ways or similar ways in a variety of situations.

Psychological and physiological - Personality is a psychological construct, but research suggests that it is also influenced by biological processes and needs. It impacts behaviors and actions - Personality does not just influence how we move and respond in our environment; it also causes us to act in certain ways. Multiple expressions - Personality is displayed in more than just behavior. It can also be seen in our thoughts, feelings, close relationships and other social interactions.

Theories of Personality There are a number of different theories about how personality develops. Different schools of thought in psychology influence many of these theories. Some of these major perspectives on personality include: Type theories are the early perspectives on personality. These theories suggested that there are a limited number of "personality types" which are related to biological influences. Trait theories viewed personality as the result of internal characteristics that are genetically based. Psychodynamic theories of personality are heavily influenced by the work of Sigmund Freud, and emphasize the influence of the unconscious on personality. Psychodynamic theories include Sigmund Freuds psychosexual stage theory and Erik Eriksons stages of psychosocial development. Behavioral theories suggest that personality is a result of interaction between the individual and the environment. Behavioral theorists

study observable and measurable behaviors, rejecting theories that take internal thoughts and feelings into account. Behavioral theorists include B. F. Skinner and John B. Watson. Humanist theories emphasize the importance of free will and individual experience in the development of personality. Humanist theorists include Carl Rogers and Abraham Maslow.

Value is a concept that describes the beliefs of an individual or culture. A set of values may be placed into the notion of a value system. Values are considered subjective and vary across people and cultures. Types of values include ethical/moral values, doctrinal/ideological (political, religious) values, social values, and aesthetic values. It is debated whether some values are innate. Personal values Personal values evolve from circumstances with the external world and can change over time. Integrity in the application of values refers to its continuity; persons have integrity if they apply their values appropriately regardless of arguments or negative reinforcement from others. Values are applied appropriately when they are applied in the right area. For example, it would be appropriate to apply religious values in times of happiness as well as in times of despair. Personal values are implicitly related to choice; they guide decisions by allowing for an individual's choices to be compared to each choice's associated values. Personal values developed early in life may be resistant to change. They may be derived from those of particular groups or systems, such as culture, religion, and political party. However, personal values are not universal; one's genes, family, nation and historical

environment help determine one's personal values. This is not to say that the value concepts themselves are not universal, merely that each individual possess a unique conception of them i.e. a personal knowledge of the appropriate values for their own genes, feelings and experience. Personal values of other persons are dignity of that other person. Life Style

A lifestyle typically reflects an individual's attitudes, values or world view. Therefore, a lifestyle is a means of forging a sense of self and to create cultural symbols that resonate with personal identity. Not all aspects of a lifestyle are voluntary. Surrounding social and technical systems can constrain the lifestyle choices available to the individual and the symbols she/he is able to project to others and the self. The lines between personal identity and the everyday doings that signal a particular lifestyle become blurred in modern society. For example, "green lifestyle" means holding beliefs and engaging in activities that consume fewer resources and produce less harmful waste (i.e. a smaller carbon footprint), and deriving a sense of self from holding these beliefs and engaging in these activities. Some commentators, [who?] argue that, in modernity, the cornerstone of lifestyle construction is consumption behavior, which offer the possibility to create and further individualize the self with different products or services that signal different ways of life. Lifestyle may include views on politics, religion, health, intimacy, and more. All of these aspects play a role in shaping someone's

lifestyle. In the magazine and television industries, "lifestyle" is used to describe a category of publications or programs.

Consumer Behaviour External influences - Introduction What are external influences in consumer behavior? a. What a consumer eats, wears, and believes are all learned and influenced by the culture they live in, their family, childhood and social environment. All of these are external factors that affect purchases.
Here is a list of the external influences that affect consumer behavior:

Age Race Gender Education level Cross-cultural influences Sub-cultures (Hispanic-American) Social status (upper, middle, lower) Customs, Beliefs, Expectations, Traditions, Habits Reference groups are groups that have shared beliefs, interests and behaviors and influence a consumers behavior:

Examples include: Religious, Political, Family, Friends, Co-workers, Clubs and Associations.

People are social and they want to belong to special groups. Group members share common interests, influence each other, and share rules and values. Primary groups are those with the most influence, such as family members; secondary groups have less interaction than the primary group, such as clubs and organizations. As children grow into teenagers, their parents become less of an influence and peer groups become more of an influence. All groups exert what is called social power; some groups have more power than others over consumers decisions. Values Community Family Life Cycle

c. External influences can also include situational influences, sometimes called atmosphericssensory items in an environment that may change buying patterns, such as music, color, smell, and lighting. If a store plays loud rock music, they may attract young adults, but drive away older consumers. Color is a huge influence on behavior, but is also dependent on culture, since different cultures perceive colors differently. In the US white is a color worn at weddings, and in China, red is the color of choice for weddings. Many bakeries will pump the smell of their treats outside the store, so that passersby will be more likely to want to come in. d. Before making a purchase, consumers will go through an external information search. They will go through this search in order to evaluate the alternatives and narrow down their list of choices. It includes: Personal experiencehave they purchased this product before? How do they feel about it? Websites/Internet searchresearching the quality of the product

Knowledgesomeone with little or no knowledge of the product will need lots of information! Friends/reference groupsconsumers ask friends, family and coworkers about their experiences with the product. Advertising and promotions e. A purchase may be ultimately made due to Heuristics. This is a personal set of values that everyone has and it causes consumers to buy what they are comfortable buying, such as purchasing from specific countries of origin, or products that they are brand loyal to.

THE INFLUENCE OF REFERENCE GROUPS

This section deals with various aspects of the dynamics of reference group influence. You would know from your personal experience that, influential people in your life have helped to shape your buying decisions. You will find that this holds true for items like clothing, for instance, that must be acceptable by your peer group. A major reason for studying groups is that interaction among people modifies behavior. Reference groups influence consumer behaviour in two ways: 1) They set levels of aspiration for the individual, i.e. they offer cues as to what lifestyle should be led. 2) They define items appropriate for a member of the group to lead that lifestyle. You had learnt earlier on, that, reference groups are defined as groups that a person refers to, and identifies with, to the extent that the group becomes a norm, standard or point of reference. A reference group is, in other words, a group to which a person will compare himself or herself, to determine his or her own relative standing.

Consumers also look to reference groups for guidance and advice. Reference groups are usually small groups, and are not as broad as an entire social
class. The reference group concept was, in fact, originally developed in connection with small groups. These include the family, close friends, neighbours, religious groups, work groups and also, athletic groups. The family is recognised as an important reference group. In addition, various family members may play different roles in the purchase consumption process. Like the family, there are several other social groups that have an enormous influence on our lives. They regulate our lives through establishing standards of dress and conduct, and the accomplishment of tasks on a face-to-face basis. Issues of importance to marketing concerning reference group influence include: What influence do reference groups exert on individuals? How does reference group influence vary across products and brands? These two issues will be discussed in the following sections. How Reference Groups Influence Consumption Reference groups affect consumers through a variety of means: through norms, through information, and through influencing the value expressive needs of consumers. They influence consumers through bringing about attitude changes by encouraging the expression of certain values and attitudes expressed through the group. Because an individual wants t be a part of a group, he or she will be influenced by the values and attitudes of the group. Furthermore, groups whose members exhibit similar social characteristics are more susceptible to attitude change than groups whose members are less homogeneous. Thus people frequently buy products that others in their group buy. You must remember, of course, that individuals who feel a strong sense of identification with a group do so because they derive strong psychological or material benefit from being associated with the group. Reference groups also influence consumption through norms and conformity pressures. All members of a group must adhere to the norms established for that group. To enforce normative systems, groups tend to exert conformity pressure, direct or indirect, on their members. For example, teenager peer groups exert pressure on members' choice of clothing. Conformity pressure is common in everyone's personal experience. Of course, it is possible that the pressure to conform can produce the opposite effect. Levels of Group Involvement: In addition, there are three processes or levels of group involvement. These have been termed as compliance, identification and internalisation. Compliance involves only overt behaviour on the part of the individual and makes no demands on personal beliefs and attitudes. Identification represents a closer, more dependent relationship than that implied by compliance. In identification, the individual

complies to maintain a social relationship. Identification also reinforces the self-perceptions of individuals. Internalising the values of the group occurs at the third stage. In internalisation, consumers enforce the values of the group even in its absence.

What is a Group? A group is:

two or more people who share a common definition and evaluation of themselves and behave in accordance with such a definition (Vaughan & Hogg, 2002, p. 200) a collection of people who interact with one another, accept rights and obligations as members and who share a common identity. formal social structure face-to-face interaction 2 or more persons common fate common goals interdependence self-definition as group members recognition by others

Criteria for a group include:

Introduction to Group Dynamics Human beings exhibit some characteristic behavior patterns in groups. People involved in managing groups and group members themselves can benefit from studying theories and doing practical exercises which help them to better understand people's behaviour in groups and group dynamics. When group patterns are combined with study of individual development, then group dynamics can also be applied to education and therapy (as is often the case in experiential, outdoor and adventure education). People may may underestimate the importance of society and group memberships on their lives. Whilst people sometimes undertake solo journeys ut by and large much of our experiences of life involve being

engaged with others and groups. The nature of these groups can be quite varied, from a family going for a walk, to the crowd at a football game, to an internet discussion group, to a group of fellow workers. Given the diverse, yet common occurrence of groups, what is the nature and pattern of such groupexperiences? The social dynamics which occur within groups over time vary from group to group, but also illustrate some commonalities.

What are the important characteristics of reference group

Characteristics of Reference Group

The following are the main characteristics of 'Reference group'. (1) Reference groups are the conceptual groups not the actual groups, because these are non-membership groups. (2) Relative deprivation is the kernel of reference group behaviour. For instance an Indian scientists who compares his lot with another Indian scientist settled in the United States feels deprived of many infrastructural facilities favourable to research. (3) Anticipatory socialisation is another basic element of reference group. In order to get a membership in the reference group the individuals undergo the process of socialisation that is, take on the values and lifestyles of the group to which they would like to belong in future. Similarly the low caste Hindus irritate in an anticipation that they would be included in the high castes.

(4) Reference group need not remain the same forever. An individual may change his reference groups as he takes on different statuses in life. (5) Reference groups are not that much significant in simple societies as they are in modern societies. In modern complex societies reference groups are abundant. (6) In reference group behaviour one relates oneself to the other individuals or groups and tries to adopt their values and standards.

Section III Social class & Status. Culture & ethic values. Family & household influences. Situational influences.

What is social class?

Any observer of American society would quickly note that there are large variations in wealth, material possessions, power and authority, and prestige in our society. They would also note differences in access to education, healthcare and leisure. One child in ten lives in poverty in major industrial countries, one in five in the United States. Taken together these differences in resources and outcomes are thought of as the basis of inequality. What is the source of this inequality? Some say it is the result of an unequal distribution of resources, power and authority. What are resources: money, land, assets distinction made between wealth monetary value of all own and income amount of money brought in through wages, investment, etc. What is power: ability to be in charge, to rule What is authority: control, particularly in the face of resistance Are material interests (money, land, assets, etc.) the only basis of inequality? Status represents another form of inequality standing, esteem, respect, prestige, may involve physical ability, intelligence, beauty, occupations that are ranked in order of prestige doctors, corporate lawyers, financial experts to garbage collectors and janitors. When sociologists talk of social class, they refer to a group of individuals who occupy a similar position in the economic system of production. Within that system occupation is very important because it provides financial rewards, stability and benefits like healthcare. Are people in similar positions, aware of each other? In broad terms, yes. Get information (cues) by type of job, neighborhood, clothing, cars, etc. Also get information by conversation topics, style, grammar etc. Can people mislead or be misled? Of course. Is there a point of view specific to social class? Middle class values? Working class values? How many social classes are there in the United States? Disagreement within the field on both the number and the composition of these classes. Many sociologists suggest five: Upper Class Elite Represent institutional leadership, heads of multinational corporations, foundations, universities Capitalist elite owners of lands, stocks and bonds and other assets wealth derived from what they own Forbes magazine publishes a list of the 400 wealthiest families in America. In 1997, net worth had to be at least $475 million.Bill Gates, in that year, had net worth pf 39.8 billion. Of all the wealth represented on the Forbes list, more than half is inherited.

Newly acquired wealth, nouveau riche, have vast amounts of money but not often accepted into old money circles. Upper Middle Class Represent scientific and technical knowledge engineers, accountants, lawyers, architects, university faculty, managers and directors of public and private organizations. Have both high incomes and high social prestige. Welleducated. Difficult to define a middle class (i.e. upper middle, middle middle and lower middle) probably the largest class group in the United States because being middle class is more that just income, about lifestyles and resources, etc. Lower Middle Class Clerical-administrative Provide support for professionals Engage in data collection., record-keeping Paralegals.\, bank tellers, sales Blue-collar workers in skilled trades Working Class Craft workers Laborers in factories Restaurant workers Nursing home staff Repair shops, garages Delivery services Poor Working poor work full-time at wages below poverty line Social services Underclass Social class is one of the most important concepts that sociologists discuss and yet its definition is often illusive. There are two classical sociologists who are most important in the discussions about class Karl Marx and Max Weber.

What are the core values of Ethical Culture?

"The first postulate of Ethical Culture is the existence of a moral law as permeating as the physical laws of nature... Is this conception of god less real, less inspiring, less reasonable than the concept of an absolute creator and ruler of the universe?" "The second postulate of ethical religion is the existence of a spiritual element in human nature which makes us capable of seeking the fulfillment of the moral law in our daily conduct. It is on the ground of this capability that we attribute worth to human beings." Ethical Values Ethical Culture values are optimum principles of behavior based on the understanding that human beings are autonomous individuals whose wellbeing, paradoxically, depends on their connections to everyone and everything else. Respect for Human Worth. I am an evolving person cultivating goodness. Every person is a creative source with an inherent capacity for goodness. Responsibility. I am in charge of who I am and what I do. Everyone is accountable for his or her actions. Love. I encourage the beauty, goodness, and creative power in every person. Everyone has the right to be all he or she can be. Freedom. I appreciate and express my uniqueness. Everyone has the right to make his or her own choices. Kindness. I care for the well-being of people. Everyone has the right to safety. Fairness. I act as I wish ideally to be treated. Everyone has the right to an equal opportunity. Trust. I honor my agreements. Everyone is accountable for his or her promises. Truthfulness. I speak without misleading. Everyone can face reality honestly. Forgiving. I admit my mistakes: by expressing sorrow for causing harm, by making amends, and by learning a better way. Everyone can learn by trial and error. Joy. I choose to find within me delight in being alive. Everyone can experience the bliss of being in harmony with his or her ethical yearnings.

Family influence in consumer behavior

FAMILY INFLUENCE IN CONSUMER BEHAVIOR The family is the most important consumer buying organization in society, and family members constitute the most influential primary reference group. We can distinguish between families in the buyers life.

The family of orientation consists of parents and siblings. From parents a person acquires an orientation toward religion, politics, and economies, and a sense of personal ambition, self-worth, and love. Even if the buyer no longer interacts very much with his or her parents, their influence on behavior can be significant. In countries where parents live with grown children, their influence can be substantial. A more direct influence on everyday buying behavior is the family of procreation namely ones spouse and children. The makeup of the American family however has changed dramatically. Census Bureaus newest numbers shows that married couple households the dominant cohort since the countrys founding have slipped from nearly 80% in the 1950s to roughly 50% today. The above figures mean that the Unites States 86 million single adults could soon define the new majority. Already, un-married make up 42% of the workforce, 40% of home buyers, 35% of voters, and one of the most powerful consumer groups on record. Marketers will have to pay attention not only to the buying habits of singletons? who have delayed marriage, but also to families once considered on the fringe that are cohabiting partners , divorced parents who share custody, single parents by choice , and same sex couples who may or may not have children. Marketers are interested in the roles and relative influences of family members in the purchase of a large variety of products and services. In the United States, husband-wife involvement has traditionally varied widely by product category. The wife has usually acted as the familys main purchasing agent, especially for food, sundries, and staple-clothing items. Now traditional purchasing roles are changing, and marketers would be wise to see both men and women as possible targets. With expensive products and services like cars, vacations, or housing, the vast majority of husbands and wives engage in more in more joint decision making. Given womens increasing wealth and income generating ability, financial service firms such as Citigroup, Charles Schwab, and Merrill Lynch have expanded their efforts to attract women investors and business owners. And marketers are realizing that men

arent the main buyers of high-tech gizmos and gadgets these days. Women actually buy more technology than men do, but consumer electronics stores have been slow to catch on to this fact. Some savvy electronics stores are starting to heed womens complaints of being ignored, patronized, or offended by salespeople. Radio Shack Corp., a 7,000-store chain, began actively recruiting female store managers so that a woman manages about one out of every seven stores. Nevertheless, men and women may respond differently to marketing messages. One study showed that women valued connections and relationships with family and friends and placed a high priority on people. Men, on the other hand, related more to competition and placed a high priority on action. Marketers are taking more direct aim at women with new products such as Quakers Nutrition for Women cereals and crest Rejuvenating Effects toothpaste. Gillette Co. researched psychological issues specific to women and came out with an ergonomically designed razor Venus that fits more easily in a womans hand. Sherwin-Williams recently designed a Dutch Boy easy-to-use Twist and pour? pint can targeted specifically at women. Another shift in buying patterns is an increase in the amount of dollars spent and the direct and indirect influence wielded by children and teens. Direct influence describes childrens hints, request, and demandsI want to go to McDonalds.? Direct influence of kids between the ages of 4 and 12 totaled around $275 billion in 1999. Their indirect influence on parental spending accounted for another $312 billion of household purchases. Indirect influence means that parents know the brands, product choices, and preferences of their children without hints or outright requests. One research study showed that teenagers were playing a more active role than before in helping parents choose a car, audio / video equipment, or a vacation spot. Marketers use every possible channel of communication to reach kids, especially such popular media as Nickelodeon, Cartoon Network, or the Disney Channel on TV and magazines such as Nickelodeon, Sports Illustrated for kids, and Disney Adventures.

We summarize that the marketers have to concentrate on the interests of various consumers may be from the same family group or otherwise. To list out each of them are separate consumers in their own right and they can be listed as, housewives or women in the household, husband, children, grand parents, singletons, cohabiting partners , divorced parents who share custody, single parents by choice, and same sex couples who may or may not have children. Today it is not specific to advanced countries alone but the type of aforesaid type of consumers are now common even in Asian and African countries.