Module 4

Amity Business School

1


MBA Class of 2011, Semester III

Consumer Behaviour

Module-IV

Vivek Singh Tomar

[email protected]


• Group Dynamics and Reference Groups,

• Family Decision Making

• Social Class

• Culture

• Subculture

Module IV (Content)


What is a Group?

• Two or more people who interact to accomplish either individual or mutual goals

• A membership group is one to which a person either belongs or would qualify for membership

• A symbolic group is one in which an individual is not likely to receive membership despite acting like a member


Reference GroupReference Group

A person or group that serves as a point of

comparison (or reference) for an individual in

the formation of either general or specific

values, attitudes, or behavior.


Broad Categories of Reference Groups

• Normative Reference Groups

• Comparative Reference Groups


Indirect Reference GroupsIndirect Reference Groups

Individuals or groups with whom a person

identifies but does not have direct face-to-

face contact, such as movie stars, sports

heroes, political leaders, or TV personalities.


Major

Consumer

Reference

Groups

Reference Groups


Positive Influences on Conformity

Group Characteristics

• Attractiveness

• Expertise

• Credibility

• Past Success

• Clarity of Group Goals

Personal Characteristics

• Tendency to Conform

• Need for Affiliation

• Need to be Liked

• Desire for Control

• Fear of Negative Evaluation


Factors Encouraging Conformity:

A Reference Group Must ...

• Inform or make the individual aware of a specific product or brand

• Provide the individual with the opportunity to compare his or her own thinking with the attitudes and behavior of the group

• Influence the individual to adopt attitudes and behavior that are consistent with the norms of the group

• Legitimize the decision to use the same products as the group


Selected Consumer-Related

Reference Groups

• Friendship groups

• Shopping groups

• Work groups

• Virtual groups or communities

• Consumer-action groups


Brand Communities

• Suzuki Swift owners club

www.swiftowners.co.uk

• Sunsilk Gang of Girls

• Harley Davidson Owner Groups

• Kwality walls Cornetto hojaanede.com


Reference Group Appeals

• Celebrities

• The expert

• The “common man”

• The executive and employee spokesperson

• Trade or spokes-characters

• Other reference group appeals

Reebok uses

Celebrity Appeal:

Dhoni and Bipasha


Types of Celebrity AppealsTYPETYPE DEFINITIONDEFINITION EXAMPLEEXAMPLE

Testimonial Based on personal usage, a celebrity

attests to the quality of the product or

service

Saif Ali Khan Ford Fiesta

Endorsement Celebrity lends his name and appears

on behalf of a product or service with

which he/she may not be an expert

Amitabh Bacchan Perfume

Actor Celebrity presents a product or

service as part of a character

endorsement

David Beckham Gillete Mach

III

Spokesperson Celebrity represents the brand or

company over an extended period of

time

Bipasha Basu Gili


Customers

Providing

Testimonials


Spokes Character



Households

Households

Family Households:

Married couple,

Nuclear family,

Extended family

Non-Family Households:

Unmarried couples,

Friends/ Roommates,

Boarders


The Typical Household?

• Canada: Nuclear family

• Thailand: Extended family

• USA: Not married, no children

• India: Joint Family


Consumer SocializationConsumer Socialization

The process by which children acquire the

skills, knowledge, and attitudes necessary to

function as consumers.


Consumption Related

Socialization

Amity Business SchoolA Simple Model of the

Socialization Process

Influence More Basic

Values/Behavior

•Moral/religious principles

• Interpersonal skills

•Dress/grooming standards

•Manners and speech

•Educational motivation

•Occupational career goals

•Consumer behavior norms

Influence More Basic

Values/Behavior

•Moral/religious principles

• Interpersonal skills

•Dress/grooming standards

•Manners and speech

•Educational motivation

•Occupational career goals

•Consumer behavior norms

Influence More Expressive

Attitudes/Behavior

• Style

• Fashion

• Fads

• “In/Out”

•Acceptable consumer behavior

Influence More Expressive

Attitudes/Behavior

• Style

• Fashion

• Fads

• “In/Out”

•Acceptable consumer behavior

Other Family

Members

Other Family

Members FriendsFriends

Young PersonYoung Person

Preadolescent Adolescent Teens Older


Other Functions of the Family

• Economic well-being

• Emotional support

• Suitable family lifestyles


Appealing to the

Responsibility of

Providing for Future

Family Financial

Need


Kurkure family

oriented theme

advertising

Amity Business SchoolEight Roles in the Family Decision-Making Process

ROLEROLE DESCRIPTIONDESCRIPTION

Influencers Family member(s) who provide information to other members about a product

or service

Gatekeepers Family member(s) who control the flow of information about a product or

service into the family

Deciders Family member(s) with the power to determine unilaterally or jointly whether

to shop for, purchase, use, consume, or dispose of a specific product or service

Buyers Family member(s) who make the actual purchase of a particular product or

service

Preparers Family member(s) who transform the product into a form suitable for

consumption by other family members

Users Family member(s) who use or consume a particular product or service

Maintainers Family member(s) who service or repair the product so that it will provide

continued satisfaction.

Disposers Family member(s) who initiate or carry out the disposal or discontinuation of a

particular product or service


Dynamics of Husband-Wife

Decision Making

• Husband-Dominated

• Wife-Dominated

• Joint

– Equal

– Syncratic

• Autonomic

– Solitary

– Unilateral


The Family Life Cycle

• Traditional Family Life Cycle

– Stage I: Bachelorhood

– Stage II: Honeymooners

– Stage III: Parenthood

– Stage IV: Postparenthood

– Stage V: Dissolution

• Modifications - the Nontraditional FLC


Targeting the To-Be- Married Segment


Targeting the

PostParenthood

Stage

Amity Business SchoolAn Extended Family life Cycle

Middle-Aged

Divorced without

Children

Middle-Aged

Married without

Children

Young

Divorced without

Children

Young

Single*

Young

Married

without

Children*

Young

Married

with

Children*

Middle-

Aged

Married

with

Children*

Middle-

Aged

Married

without

Dependent

Children*

Older

Married*

Older

Unmarried*

Middle-

Aged

Divorced

with

Children

Middle-

Aged

Divorced

without

Children

Young

Divorced

with

Children** Traditional Family Flow

Recycled Flow

Usual Flow


Noteworthy Nontraditional FLC Stages

Family Households

Childless couples It is increasingly acceptable for married couples to elect

not to have children. Contributing forces are more career-

oriented married women and delayed marriages.

Couples who marry later in

life (in their late 30s or later)

More career-oriented men and women and greater

occurrence of couples living together. Likely to have

fewer or even no children.

Couples who have first child

later in life (in their late 30s or

later)

Likely to have fewer children. Stress quality lifestyle:

“Only the best is good enough”

Alternative FLC Stages Definition/Commentary


Family Households

Single parents II Young man or woman who has one or more children out

of wedlock.

Single parents III A single person who adopts one or more children.

Extended family Young single-adult children who return home to avoid the

expenses of living alone while establishing their careers.

Divorced daughter or son and grandchild(ren) return

home to parents. Frail elderly parents who move in with

children. Newlyweds living with in-laws.


Single parents I High divorce rates (about 50%) contribute to a portion of

single-parent households


Nonfamily Households

Unmarried couples Increased acceptance of heterosexual and homosexual

couples.

Divorced persons (no children) High divorce rate contributes to dissolution of households

before children are born.

Single persons (most are

young)

Primarily a result of delaying first marriage; also, men

and women who never marry.


Widowed persons (most are

elderly)

Longer life expectancy, especially for women; means

more over-75 single-person households.


Social ClassSocial Class

The division of members of a society into

a hierarchy of distinct status classes, so

that members of each class have either

higher or lower status than members of

other classes.


Social Class and Social Status

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

–wealth

–power

–prestige

Social Comparison Theory

states that individuals

compare their

own possessions against those

of others to determine their

relative social standing.


Status Consumption

The process by which consumers actively

increase their social standing through

conspicuous consumption or possessions


Convenient Approaches to

Social Class• Social status is usually defined in terms of one or more of the following socioeconomic variables:

– Family Income

– Occupational Status

– Educational Attainment


Targeting Upscale Customers


Percent Distribution of Five-Category

Social-Class Measure

SOCIAL CLASSES

Upper 4.3 6.89

Upper-middle 13.8 7.10

Middle 32.8 15.44

Working 32.3 34.20

Lower 16.8 36.37

Total percentage 100.0 100.0

USA (%) India (%)


Social Class Measurement

• 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


Objective Measures

• Single-variable

indexes

– Occupation

– Education

– Income

– Other Variables

• Composite-variable indexes– Index of Status Characteristics

– Socioeconomic Status Score


Index of Status Index of Status

Characteristics Characteristics

(ISC)(ISC)

A composite measure of social class that

combines occupation, source of income (not

amount), house type / dwelling area into a

single weighted index of social class

standing.


Socioeconomic Socioeconomic

Status Score Status Score

(SES)(SES)

A multivariable social class measure used by the

United States Bureau of the Census that combines

occupational status, family income, and educational

attainment into a single measure of social class

standing.


Social-Class Profiles

THE UPPER-UPPER CLASS--COUNTRY CLUB

•Small number of well-established families

•Belong to best country clubs and sponsor major charity events

•Serve as trustees for local colleges and hospitals

•Prominent physicians and lawyers

•May be heads of major financial institutions, owners of major long-

established firms

•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”

•Successful business executive

•Conspicuous users of their new wealth


THE UPPER-MIDDLE CLASS--ACHIEVING

PROFESSIONALS

•Have neither family status nor unusual wealth

•Career oriented

•Young, successful professionals, corporate managers, and business

owners

•Most are college graduates, many with advanced degrees

•Active in professional, community, and social activities

•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


THE LOWER-MIDDLE CLASS--FAITHFUL FOLLOWERS

•Primary 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

•Tend to be churchgoers and are often involved in church-sponsored

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


THE UPPER-LOWER CLASS--SECURITY-MINDED

MAJORITY

•The largest social-class segment

•Solidly blue-collar

•Strive for security

•View work as a means to “buy” enjoyment

•Want children to behave properly

•High wage earners in this group may spend impulsively

•Interested in items that enhance leisure time (e.g., TV sets)

•Husbands typically have a strong “macho” self-image

•Males are sports fans, heavy smokers, beer drinkers


THE LOWER-LOWER CLASS--ROCK BOTTOM

•Poorly educated, unskilled laborers

•Often out of work

•Children are often poorly treated

•Tend to live a day-to-day existence


Appealing to Upward

Mobility


GeodemographicGeodemographic ClustersClusters

A composite segmentation strategy that uses

both geographic variables (zip codes,

neighborhoods) and demographic variables

(e.g., income, occupation) to identify target

markets.


PRIZM (Potential Rating Index by Zip PRIZM (Potential Rating Index by Zip

Market)Market)

A composite index of geographic and

socioeconomic factors expressed in residential

zip code neighborhoods from which

geodemographic consumer segments are formed.


A Profile of PRIZM Cluster: “Urban Gold

Coast” (Cluster 06)SOCIOECONOMIC FACTORS:

Percent of U.S. households 0.60%

Predominant age range Mixed

Socioeconomic group Affluent

Demographic caption Professional urban singles and couples

Education College graduates

Occupation White collar

Race/Ethnicity White, Asian

LIFESTYLE:

Use WebTV online

Listen to Oldie Goldies

Read New York Magazine

Watch Politically Incorrect


What is Middle Class?

• India’s middle class numbers around 300 million representing 30% of the population spread across 5,000 towns and cities.

• More than 70% of nuclear family units have moved out of the traditional joint family households into their own homes.

• Children continue to be the main focus of families.

• The size of the average middle-class family is 4.3 people

• An estimated 100% of households have televisions, 91% have mobile phones and 19% own four-wheel vehicles. Half the households experienced growing incomes in the past 12 months, of which one-third enjoyed a rise in excess of 20%.


What is Working Class?

• Of the 222 million households in India, the absolutely poor households (annual incomes below 45,000) accounted for only 15.6 % of them or about 35 million (about 200 million Indians). Another 80 million households are in income levels of 45,000-90,000 per year

• These consumers tend to be more brand loyal than wealthier consumers


Consumer Behavior and

Social Class

• Clothing, Fashion, and Shopping

• The Pursuit of Leisure

• Saving, Spending, and Credit

• Social Class and Communication


CultureCulture

The sum total of learned beliefs, values, and

customs that serve to regulate the consumer

behavior of members of a particular society.


Culture

Culture offers order, direction, and guidance

in all phases of human problem solving:

When to eat, Where to eat,

What to eat for each meal,

What to serve guests at a dinner party,

picnic, or wedding.


Forms of Cultural Learning

Formal Learning

Informal Learning

Technical Learning


The Movement of Cultural Meaning

Culturally Constituted WorldCulturally Constituted World

Consumer GoodsConsumer Goods

Individual ConsumerIndividual Consumer

Grooming

Ritual

Fashion

SystemAdvertising/Fashion

System

Exchange

Ritual

Possession

RitualDivestment

Ritual

Instrument of Meaning Transfer

Location of Meaning


Issues in Culture

• Enculturation and acculturation

• Language and symbols

• Ritual

• Sharing of Culture


Selected Rituals and Associated Artifacts

(Americans)

SELECTED RITUALS TYPICAL ARTIFACTS

Wedding White gown (something old, something new, something

borrowed, something blue)

Birth of child U.S. Savings Bond, silver baby spoon

Birthday Card, present, cake with candles

50th Wedding anniversary Catered party, card and gift, display of photos of the

couple’s life together

Graduation Pen, U.S. Savings Bond, card, wristwatch

Valentine’s Day Candy, card, flowers

New Year’s Eve Champagne, party, fancy dress

Thanksgiving Prepare a turkey meal for family and friends


Indian rituals (16 Sanskars)

The 16 Samskaras

Most of the Brahmins used to follow complex rituals in connection with major

events in their lives, such as pregnancy, childbirth, education, marriage, and death.

Although, the number of major samskaras fluctuates between 12 and 18 in the

Grhya Sutras, later, it became 16 in number,generally known as "Shodasha

Samskaras" (Ṣoḍaśa Saṃskāra).

Garbhadhana

Pumsavana

Simanatonayana

Jatakarman

Namakarana

Nishkramana

Annaprashana

Chudakarana

Karnavedha

Vidyarambha

Upanayana

Praishartha

Keshanta and Ritusuddhi

Samavartana

Vivaha

Antyeshti


Nightly Facial Beauty Ritual of a Young Internet

Sales Representative

1. I pull my hair back with a headband.

2. I wash my face with tepid water using Dove facial cleanser to remove all

makeup.

3. Next, I use a Q-tip with some moisturizer around my eyes to make sure all eye

makeup is removed.

4. I apply Dermacil facial cream to my face to heavily moisturize and Clinique

Dramatically Different Lotion on my neck and throat.

5. If I have a blemish, I apply Clearasil Treatment to the area to dry it out.

6. Twice weekly (or as necessary) I use Aapri Facial Scrub to remove dry and

dead skin.

7. Once a week I apply Clinique Clarifying Lotion 2 with a cotton ball to my face

and throat to remove deep down dirt and oils.

8. Once a month I get a professional salon facial to deep clean my pores.


Culture and Advertising

• Is it the role of advertising to socialize readers

on how to dress, decorate their homes,

choose wines and food for parties, etc?

– Grihashobha

– Cosmopolitan

– Femina


The Measurement of Culture

• Content Analysis

• Consumer Fieldwork

• Value Measurement Instruments


Content Content

AnalysisAnalysis

A method for systematically analyzing the

content of verbal and/or pictorial

communication. The method is frequently used

to determine prevailing social values of a

society.


Field Field

ObservationObservation

A cultural measurement technique that takes

place within a natural environment that focuses

on observing behavior (sometimes without the

subjects’ awareness).


Characteristics of Field Observation

• Takes place within a natural environment

• Performed sometimes without the subject’s awareness

• Focuses on observation of behavior


ParticipantParticipant--

ObserversObservers

Researchers who participate in the

environment that they are studying without

notifying those who are being observed.


Value Measurement Survey Instruments

• Rokeach Value Survey (RVS): A self-administered inventory consisting of eighteen “terminal” values (i.e., personal goals) and eighteen “instrumental” values (i.e., ways of reaching personal goals).

• List of Values (LOV): A value measurement instrument that asks consumers to identify their two most important values from a nine-value list that is based on the terminal values of the RokeachValue Survey

• Values and Lifestyles (VALS): A value measurement based on two categories: self-definition and resources


The Rokeach Value Survey

TERMINAL VALUES INSTRMENTAL VALUES

A COMFORTABLE LIFE AMBITIOUS

AN EXCITING LIFE BROAD-MINDED

A WORLD AT PEACE CAPABLE

EQUALITY CHEERFUL

FREEDOM CLEAN

HAPPINESS COURAGEOUS

NATIONAL SECURITY FORGIVING

PLEASURE HELPFUL

SALVATION HONEST

SOCIAL RECOGNITION IMAGINATIVE

TRUE FRIENDSHIP INDEPENDENT

WISDOM INTELLECTUAL


continued

TERMINAL VALUES INSTRMENTAL VALUES

A WORLD OF BEAUTY LOGICAL

FAMILY SECURITY LOVING

MATURE LOVE OBEDIENT

SELF-RESPECT POLITE

A SENSE OF ACCOMPLISHMENT RESPONSIBLE

INNER HARMONY SELF-CONTROLLED


American Core Values

• Achievement and success

• Activity

• Efficiency and practicality

• Progress

• Material comfort

• Individualism

• Freedom

• External conformity

• Humanitarianism

• Youthfulness

• Fitness and health


Criteria for Value Selection

• The value must be pervasive.

• The value must be enduring.

• The value must be consumer-related.


SubcultureSubculture

A distinct cultural group that exists as an

identifiable segment within a larger, more

complex society.


Relationship Between Culture and

Subculture

Subcultural

Traits

of

North Indians

Dominant

Cultural

Traits of

Indian Citizens

Subcultural

Traits

of

South Indians


Examples of Major Subcultural Categories

CATEGORIES EXAMPLES

Nationality Bangladeshi, Pakistani, Anglo Indian

Religion Hindu, Muslim, Christian, Sikh

Geographic region Northeast, Southwest, Midwestern

Race Caucasian, Mediterranean, Mongolian,

Dravidian

Age Senior citizen, teenager, Xers

Gender Female, Male

Occupation Bus driver, mechanic, engineer

Social class Lower, middle, upper


Major Age Subcultures

Generation X

Market

Baby Boomer

Market

Seniors

Market

Generation Y

Market


Generation YGeneration Y

Born between 1977 and 1994; also called

echo boomers and millennium generation


3 Subsegments of Gen Y

• Gen Y Adults

• Gen Y Teens

• Gen Y Tweens


Generation XGeneration X

Born between 1965 and 1979; post baby

boomer segment (also referred to as Xers or

busters).


Baby BoomersBaby Boomers

Individuals born between 1946 and 1964

(approximately 45% of the adult population).


Baby Boomers

• The largest age category alive today

• Frequently make important consumer

purchase decisions

• Include a small subsegment of trendsetting

consumers (yuppies) who influence consumer

tastes of other age segments


SeniorsSeniors

Generally older consumers. Consist of

subcultures, including the 50-plus market and

the “elderly consumers” market.


Three Senior Subsegments

• The Young-Old (65-74)

• The Old (75-84)

• The Old-Old (85 and older)


Issues in Understanding Sex as a

Subculture

• Sex Roles and Consumer Behavior

– Masculine vs. Feminine Traits

• The Working Woman

– Segmentation Issues

– Shopping Patterns


Segmenting the Female Market

• Four Segments:

– Stay-at-Home Housewives

– Plan-to-Work Housewives

– Just-a-Job Working Women

– Career-Oriented Working Women

Module 4

Documents

amity business school

boarders amity business

family family members

family members members

groups virtual groups

service family members

membership group

extended family usa