CHAPTER 3
External Influences on
Consumer Behavior
SIMPLE MODEL OFCONSUMER BEHAVIOR
Motives
Attitudes
Needs Consumer
Purchase
Decision Learning
Family
Business
Perception
Personality
Internal Factors
Economic External Factors
INTRODUCTION
Consumer purchasing decisions are often affected by factors that
are outside of their control but have direct or indirect impact on how we
live and what we consume.
Consumers are faced with many external influences, including an
individual’s culture, subculture, household structure, and groups that
he/she associates with.
Marketers and business owners call these external influences
because the source of the influence comes from outside the person rather
than from inside.
Today consumers are faced with an array of product selection, and
competition is fierce among companies. This is why your understanding of
consumer behaviour is vital to the success of your business.
Both internal and external factors are inter connected and work
together
to assist the consumer decision making process.
INFLUENCING FACTORS IN CONSUMERDECISION
MAKING
GROUP BEHAVIOR
Man is social animal who loves to be in groups. Groups represent two or
more individuals who share a set of norms,
values, or beliefs and interact to accomplish individual or mutual goal.
Almost all consumer behavior takes place in a group setting of some sort.
A group's norms cover usually all the important behavioural aspects for the
functioning of that group and breaking those rules can bring up penalties.
When do Group Exert Influence?- The group influence on an individual’s
buying behavior depends on three factors-
Attitude towards the group: This includes Pride, Status, etc.
Nature of the group: This includes, Cohesive, Frequently interacting,
Exclusive membership.
Nature of the Product: This includes visibility of the product, Uniqueness
of the product.
Examples: Hardly Davidson Bike group, Friends connection, Aluminas of an
institute, etc.
TYPES OFGROUPS
REFERENCE GROUP
A reference group is any person or group that serves
a as point of
comparison for an individual in forming either
general or specific values, attitudes, or a specific guide for behavior.
In marketing prospective, reference group are groups that serve as
a frames of reference for individuals in their purchase or consumption
decisions.
Often a distinction is made between group and reference group.
Group is defined as two or more individuals who share a set of norms,
values, or beliefs and have certain implicit and explicit relationship.
Where as reference group is one whose presumed perspective or
values are being used by an individual to take decisions.
al
Examples: Shopping with friends, family, education
decisions.
NATURE OF REFERENCE GROUP
Status is the
Norms’ are generally rules
achieved or
and standards of behavior.
ascribed position
Norms that the individual
holds.
Status
Values are shared A groups influence
beliefs among on its member
group behavior is closely
related to it power.
Values
Power
Socialization
refers to the Roles are
process by functions that
which new an individual
members hold in a
learn the group.
Roles
groups
CONSUMPTION SITUATIONS AND REFERENCE GROUP INFLUENCE
TYPES OF REFERENCE GROUP
An individual can be a member of a reference group such as the
family and would be said to be part of a membership group
The same individual may aspire to belong to a cricket club and
would be said to be part of an aspiration group.
A disclaimant group is one to which an individual may belong to or
join then reject the group’s values.
Also an individual may also regard the membership in a specific
group as something undesirable and to avoidable. Such a group is a
dissociative group.
Primary Informal group: It includes family, peer group, friends etc.
Primary formal group: Business group, working colleagues etc.
Secondary Informal group: Women kitty party, sports group, etc.
Secondary formal: Only frequently meet are not so cohesive in
nature.
TYPES OF REFERENCE GROUPS
CULTURE
Culture influences consumers through the norms and values
established by the society in which they live.
It is the broadest environmental factor that influences consumers
behavior.
Culture is inculcated- It is passed down from one generation to
another through institutions such as family members and religion.
As culture evolves, it may be possible to associate benefits of a
product or brand with new values or it may be necessary to change the
product if that value is no longer gratifying the society. Example: Movies,
TV serials, etc.
es knowledge,
Definition: “Culture as the complex whole that includ beliefs, art, law,
morals, customs and any other capa acquired by humans bilities
as and habits of
a member
a society.”
CHARACTERISTIC OF CULTURE
Culture is invented: It cannot be viewed as something that just
exists and is waiting to be discovered. People are responsible for
inventing their culture.
Culture is learnt: It is not biological feature or instinctive.
The process of learning cultural values begin early in life largely through
social interactions among families, friends etc.
Culture is Shared: Culture by at large is shared by huge group
of human beings, generally religion, language, etc.
Culture satisfies needs: Culture offers order, direction and
guides societies in all phases of life by providing tried and trusted ways of
meeting physiological, personal and social needs.
Cultures are similar but different : There are certain similarities
among all cultures and many elements are present in all societies such
as cooking, dressing, etc.
Culture is not static: Culture do change gradually and
continuously.
These change however may be very slow or very fast.
PARTS OF CULTURE
1. Beliefs
These are mental and verbal statements that reflect a
consumer’s particular knowledge and assessment of something
and that affect an individual’s behaviour. It is related to formal
religion.
2. Values are based on the beliefs of a consumer.
The values of a culture differentiate right feelings, thoughts,
and behaviours from wrong ones.
An individual’s set of values plays an important role in
consumption activities, because in many cases, people purchase
products and services that they believe will help them attain a
value-related goal.
CONT’D
3. Norms: These are rules within a culture that designate
forms of acceptable and unacceptable behaviour. In
short, they’re the way a culture does things.
They’re linked with acceptable social standards of
appropriate behaviour within a culture. They may or may
not coincide with laws and policies.
ASPECTS OF CULTURE
Cultural system can be said to consist of three
functional areas:
1. Ecology – the way in which a system is
adapted to its habitat.
2. Social structures–the way in which orderly
social life is maintained.
3. Ideology – the mental characteristics of a
people and the way in which they relate to their
environment and social groups.
CULTURAL VALUES
A cultural value can be defined as a widely held belief
that endures over time.
In a culture, there are two types of values:
1) Instrumental value (or modes of conduct)
2) Terminal values (or states of existence)
INSTRUMENTAL VALUES
Instrumental values are core values,
permanent in nature, comprise personal
characteristics and character traits.
Instrumental values refer to preferable modes
of behavior and include values like honesty,
sincerity, ambition, independence, obedience,
imaginativeness, courageousness,
competitiveness, and also some negative traits
too.
TERMINAL VALUES
In our personal lives, terminal values are those
things that we can work towards or we think are
most important and we feel are most desirable
– terminal values are desirable states of
existence.
Terminal values include things like happiness,
self respect, family security, recognition, freedom,
inner harmony, comfortable life, professional
excellence, etc
SUB CULTURE
A sub culture is a segment within a culture that share a set if
meanings, values or activities that differ in certain respects from those of
the overall culture.
Sub culture analysis enables the marketing manager to focus on
beliefs, values, and customs shared by member of a specific sub group
make them desirable candidates for special marketing attention.
Sub culture therefore can be defined as a distinct culture group that
exists within a layer, complex society as an identifiable segments in terms
of its beliefs customs and values.
Therefore sub culture are relevant units of analysis for marketing
research.
Sub culture tend to transfer their beliefs and values from
generation to generation. Example: Youths
EXAMPLES FORSUB CULTURE
Category Sub- Culture
Geography North Ethiopia, South Ethiopia, East Ethiopia
Regional Region1, 2, 3, 4,, etc.
Age Children, Teenagers, Youth, Working professional,
etc.
Elderly People 50 Plus.
Women Children, Teenagers, Youth, Married women, etc.
Religion Muslims, Christians, Hindu, etc.
FAMLY
Family is defined as a group of two or morepeople related by birth,
marriage or adop and residing together. tio
n
House hold is a family and any
unrelated person residing in the same ho and consuming food from a common
kitch at least once a day. Eg: Hostel
us
All families are households but all households are not families.
e
An individual’s immediate family membersen play an essential role in
influencing his/her buying behaviour.
Family consists of Parent, Siblings, Spouse, Grandparents, Relatives, etc.
What an individual imbibes from his parents becomes his/her culture. What
he sees from his childhood becomes his habit or in other words lifestyle.
Family by far is the most important reference group. It is also the most basic
consumption unit for most consumer goods.
FUNCTIONS OFFAMILY
Economic Interpersona
Well Being l Skills
Provides
Emotional Religious
Support Values
Morals and
Suitable
Ethical
Life Style
Values
Social
Relationships
FAMILY LIFECYCLE STAGE
Bachelor stage Young, single person <35
Income Expense
Newly married Young couples no children
Income Expense
Full Nest I Young couples with <6 yrs
children Income Expense
Full Nest II Young couples with 6-12 yrs
children Income Expense
Full Nest III Old married couples with
dependent teenage Income Expense
Empty Nest I Old married couples with no
children living Income Expense
Solitary Older single person
Survivor Income Expense
FAMILY/HOUSEHOLD DECISION
MAKING PROCESS
Influencer
(Children)
Communication
targeted at Children
Initiator Decision
(Parents, Maker Purchaser
Children) (Parents, (Parents)
Children)
Communication
targeted at Parents
User
(Parents,
Information Children)
Gathering
SOCIAL CLASS
Some form of class structure or social stratification has existed in
all societies throughout human history.
A consumer's social class refers to his or her standing in society. It
is determined by a number of factors, including education, occupation and
income.
While income is an important indicator of social class, the
relationship is far from perfect since social
class is also determined by such factors as place of residence, cultural
interests and world-view.
Social Class is “defined as the division of members of a society into
a hierarchy of distinct status classes, so that members of each class
have relatively the same status and members of all other classes have
either more or less status.
Social Class is often measured on the bases of: relative wealth,
Power, prestige.
SOCIAL CLASS CATEGORY
Life-style Orientations & Purchasing Tendencies of the Different Social
[Link] Tendencies
Social Class Life-style Orientation
Upper Class Good taste Graceful living Quality merchandise
Good Things in life Expensive hobby and recreation
Individual expression Interest in equipment
arts and culture Travel Art
Middle Class Respectability Conformity Items in fashion
social esteem Items related to self presentation Nice
clothing, and home items.
Working Class Fun oriented Newest appliances Sporting events
Focus on Possessions Work Food items
related life
Lower Class Close family relationships Not Readily available products Status
interested in world affairs symbols
Neighborhood oriented
“UPWARD PULL STRATEGY “-TARGETED
AT MIDDLE CLASS
Positionin
Aspiration g
Prefer
s Upper
Products
To belong class
consumed
Middle to symbolism
by upper-
Class upper- for middle
middle
middle class
class
class products
SOCIAL STANDINGS: HOW IT IS DERIVED
AND INFLUENCE BEHAVIORS
Socio economic
factors Social standing
Unique behaviour
Upper
Preference,purcha
Occuption,educati class,middile
on,ownership,inco class, working se,[Link]
munication
me class, lower
class
HOW DOES SOCIAL CLASS AFFECT
CONSUMPTION?
Some of the ways in which social class can impact
consumer behaviour include conspicuous consumption:
The trickle-down effect and status float behaviour.
a) Trickle-down effect
The trickle-down effect occurs when consumption
patterns observed in the upper classes are copied by the
lower classes.
Consumers in the lower classes sometimes aspire to be
like their wealthier counterparts and so they may
consume similar products or services in order to ‘live like
the other half does’
CONT’D
b) Status float
Status float is effectively the reverse of the trickle-
down effect, where by consumers in the upper classes
begin to copy purchase patterns and consumption
behaviour previously seen in the lower classes.
In many Western countries, wealthy suburban youth
are now frequent purchasers of rap music and hip hop
clothing which is originated in the working class.
MARKETING STRATEGY AND SOCIAL CLASS
Marketers are interested in supplying the right
product to the right customer (target
segment) at the right price at the right time and
within the right promotion. The marketers find
that a combination of social class and income are
superior for product classes that are visible.
This product requires moderate expenditure and
are symbols of social status like TV set, cars,
clothing etc.
CONT’D
In designing market strategy using social
stratification, a process is followed in which
A. the marketer relates the status of the group
to the product.
B. the data is collected as target social strata
C. positions the product according to social
status
D. develops a proper marketing mix
OPINION LEADERSHIP
Opinion leaders are those people who, in a given situation, are able to exert
personal influence.
They are the ones most likely to influence others through word-of-mouth
communication because others seek advice and information from them.
Opinion leaders can influence the behavior of consumers positive and
negative towards to the product.
“Opinion leadership is the process by which
one person (the opinion leader) informally influences the actions or attitudes
or others,
who may be opinion seekers or merely opinion recipients.
In marketing context opinion leaders are those people who have used the
product by them self.
Young consumers often take the assistance of opinion leaders in there
purchase.
Opinion leadership is category specific – an opinion leader in one product
category is often an opinion seeker in others.
OPINION LEADERSHIP FLOWOF INFORMATION
SITUATION IN WHERE OPINIONLEADERS ARE
CONSIDERED
CONSUMER INFLUENCE AND THE
DIFFUSION OF INNOVATIONS
The process by which the acceptance of an
innovation is spread by communication to
members of social system over a period of
time.
The stages through which an individual
consumer passes in arriving at a decision to
try (or not to try), to continue using (or
discontinue using) a new product
DEFINING INNOVATIONS
Firm-oriented definitions
Product-oriented definitions
Market-oriented definitions
Consumer-oriented definitions
FACTORS THAT AFFECT THE
DIFFUSION OF INNOVATIONS
The Innovation
The Channels of Communication
The Social System
Time
PRODUCT CHARACTERISTICS
THAT INFLUENCE DIFFUSION
Relative Advantage
Compatibility
Complexity
Trialability
Observability
Felt Need
Risk
SOCIAL SYSTEM AND DIFFUSION
Does the target market have:
A positive attitude towards change?
Technological skill?
A general respect for education and science?
A focus on rational and ordered social relationship?
An outreach perspective?
The ability to accept different roles?
DIFFUSION OF INNOVATION MODEL
INNOVATORS: DESCRIPTION
• 2.5% of population
• Venturesome
• Very eager to try new ideas
• Acceptable if risk is daring
• More cosmopolite social relationships
• Communicates with other innovators
EARLY ADOPTERS: DESCRIPTION
• 13.5% of population
• Respected
• More integrated into the local social
system
• The persons to check with before adopting
a new idea
• Category contains greatest number of
opinion leaders
• Are role models
EARLY MAJORITY: DESCRIPTION
• 34% of population
• Deliberate
• Adopt new ideas just prior to the average
time
• Seldom hold leadership positions
• Deliberate for some time before adopting
LATE MAJORITY: DESCRIPTION
• 34% of population
• Skeptical
• Adopt new ideas just after the average
time
• Adopting may be both an economic
necessity and a reaction to peer pressures
• Innovations approached cautiously
LAGGARDS: DESCRIPTION
• 16% of population
• Traditional
• The last people to adopt an innovation
• Most “localite” in outlook
• Oriented to the past
• Suspicious of the new
ENHANCED ADOPTION PROCESS MODEL
THE PROFILE OF A CONSUMER
INNOVATOR
Interestin the Product Category
The Innovator Is an Opinion Leader
Personality Traits
Purchase and consumption characteristics
Media Habits
Social Characteristics
Demographic Characteristics
Are There Generalized Consumer
Innovators?
DIFFUSION PROCESS AND MARKETING
STRATEGY
Identify diffusion inhibitors and find ways to
compensate for these
Identify innovators and early adopters and cater
to them
Move consumers from awareness to adoption
Make effective use of word-of-mouth
communications
End of the Chapter!
