UNIT 2

Consumers as Individual and in the Social Context

Consumer Perception

Consumer Perception is a marketing concept that tells us what Consumer think

about a brand or a company or its offerings. It can be positive or negative
feelings, perceptions, inhibitions, predispositions, expectations or experiences
that a customer has.

A marketing concept that encompasses a customer’s impression,

awareness and/or consciousness about a company or its offerings.
Customer perception is typically affected by advertising, reviews, public
relations, social media, personal experiences and other channels.

Why is consumer perception important?

The following are impacts of how customers perceive a product or service.

Impacts brand image

A brand’s image is directly influenced by customer perception. A brand’s reputation may suffer
due to a negative customer opinion, whereas positive customer opinion can improve it.
 Positive customer experience provides a competitive advantage
Positive customer perception can provide businesses with a competitive edge in the
market. It can also help differentiate a brand from its competitors.

Determines customer loyalty

The way a client perceives a brand affects their loyalty—a positive customer perception
enhances customer retention. Therefore, clients who value your product or service are
more
likely to become repeat customers.

Influences buying decisions

A customer’s attitude dramatically influences their buying choices. If a customer deems
a product or service high quality or in line with their values, they are more likely to
purchase it.

Affects profitability
A company’s bottom line can be influenced by clients’ attitude towards their brand or
general business. A positive customer insight results in higher sales and profitability,
while a negative
What factors influence customer perception?
insight may cause losses.

The following are some of the factors affecting consumer perception:

[Link] quality: Customer perception involves the quality of a product or service. If they
perceive a product to be of high quality, it can justify higher prices than competitors.
[Link]: The goal of pricing is for customers to believe they are receiving good value for their
money. This can be tricky.
If you price a product higher than its perceived value, customers will react negatively. But if
you price it too low, customers will question the product’s quality.

[Link] service: Customers’ attitude towards a brand can be significantly swayed by a

business’s quality of customer service. A company’s reputation can be boosted by good
customer service strategies.
On the other hand, a company can be perceived as unfriendly to customers through poor
customer service.
[Link] image and reputation: How customers perceive your business is greatly influenced by
the image and reputation of a brand and vice versa. Brands that have a positive image and
reputation tend to be viewed more positively by customers.
[Link] strategies: Customers’ perception of a product or service is significantly swayed
by its marketing and advertising strategy.
These are the tools you use to build an image for your products, and if your marketing is backed
up enough by reality that customers believe it, client perception will match.

Ways to measure consumer perception

Gauge how your company is perceived through the following:

Customer surveys

Surveys are one of the most frequently used methods to gauge customer perception. These can
be conducted via CSAT, NPS, and CES.
According to a study by Harvard Business Review, the primary metric used by 80% of customer
service organizations to measure customer experience is customer satisfaction (CSAT) scores.
The survey should encompass questions related to the customer’s experience, the quality of the
product or service provided, and their overall sentiment toward the company.

Collecting customer feedback

Encourage your customers to complete feedback forms following a product or service purchase.

This could provide valuable insights regarding their expectations, which are dependent on their
attitude of your company, and how well you have met them, which can tell you if that opinion is
changing.

Social media platforms

Companies can monitor how their customers view them by keeping an eye on comments and
posts on social media mediums like Facebook, Twitter, and LinkedIn.
They can evaluate comments that mention their products and that are posted directly to company
sites to gauge the overall perception of their customers.

Customer feedback and reviews

Companies can comprehend customer opinion of their product or service by analyzing online
reviews. This is an effective method to measure customer insight.

BrightLocal survey statistics reveal that approximately 46% of shoppers believe in online
reviews as much as personal recommendations, so this is a significant source both reflecting and
shaping people’s perceptions.

How to improve customer perception Here are the seven most effective strategies your

company can employ to tailor good customer perception.

1. Provide excellent customer service

The interactions between a business and its customers greatly influence how everyone perceive
your company’s attitude toward customers.

A customer service team with a reputation for being courteous, timely, and effective can make
customers perceive your company as being appreciative and respectful of them.

[Link] high-quality products or services

You want to make sure that the quality of your offerings meet or exceed the expectations
fostered by customers’ perception of your company. Your reputation will suffer if the quality is
poorer than expected.

While improving quality is always a good way to fix this, you can also tailor your marketing to
lower customer expectations and target a lower end of the market.

[Link] effective communication

Maintaining open communication channels and frequently updating your customers on new
product releases, company announcements, and other updates can foster an image of a social
company that likes to include clientele.

Offer customers a chance to give feedback, and if appropriate for your business, let them know
when you make a change based on it.

[Link] for customer feedback

How a company responds to customer feedback can significantly influence how customers
perceive them.
Collecting feedback from clients
A company that values, listens to, and responds to customer feedback is typically seen as more
customer-focused than a company that ignores suggestions or customer complaints.

[Link] and respond to reviews

Make sure your online presence positively represents your brand. Interact with customers on
social media, keep your website user-friendly, and handle online reviews efficiently.

[Link] the customer experience

Customers’ opinion of your company as customer-driven can also be significantly improved

through personalization.

By focusing on individual preferences, customizing marketing messages, and adapting product

suggestions, you can offer positive customer experience with your brand.

[Link] social responsibility

To be perceived as a business interested in more than just financial gains, participate in corporate
social responsibility programs that are in line with your brand’s values.

Factors deciding customer perception

In general, customer perception can be influence by a lot of factors. Some of the major factors
are

(i)Consistency of performance

How has the brand performed in the past and how it is performing currently.

(ii)Emotional Connect

Superb brands know that emotional connection with the customer is critical to
brand development.

(iii)Marketing Communications

How the brand communicates with the customers using the various media vehicles.

(iv)Holistic Marketing

A brand cannot be excellent if it has good sales staff but pathetic support staff. A brand has to be
a good all rounder and satisfy customers from all its touch points.
Consumer Learning
According to Kotler’s Definition, learning involves changes in an individual’s behavior arising
out of the experience. Most of the human behavior is learned over time, out of the experience.

Following are the features of consumer learning

Consumer learning is a process. A process which continually changes and acquires new
knowledge.
This knowledge can be obtained from reading, discussing, observing, thinking, etc.
Newly acquired knowledge or personal experience, both serve as feedback.

Consumer Attitude Formation & Change: Attitude functions

A remarkable fusion of psychology, cognition, and cultural factors can be seen in consumer
behaviour. Among the many variables that affect consumers' decisions, attitudes and branding
are crucial forces that mould perceptions, preferences, and purchasing choices. Consumers'
responses to stimuli are governed by attitudes, which are created through the complex
interaction of cognitive, affective, and behavioural stages. Branding acts as a company's
character and leaves a lasting impression on consumers.

 Phases of Consumer Attitude Formation:

1. Cognitive Phase: The cognitive phase is where the process of forming attitudes
begins. Here, customers actively seek out details about a good, service, or
company. During this stage, you will be exposed to a variety of touchpoints,
including commercials, social media, online
reviews, and human interactions. The knowledge gained during this stage serves as the building
block for attitudes.
[Link] Phase: Emotions are crucial to understanding during the emotional period.
Consumers respond emotionally to the knowledge they have learned. When given positive
information, people frequently experience excitement, anticipation, or even happiness, yet when
given unfavourable information, people may feel scepticism, disappointment, or worry.
[Link] Phase: The behavioural phase is where attitudes reach their peak. Consumers
make decisions about their behaviours at this phase. Consumers decide whether they will buy a
product, connect with a brand's content further, or even advocate for it based on the attitudes
they develop during the cognitive and affective phases.

 The Process of Consumer Attitude Formation:

[Link] the Foundation for Information Gathering
Consumer attitudes are the outcome of a proactive information-seeking activity. In order to
complete this process, information must be actively and unconsciously sought for from a variety
of sources, including advertisements, word-of-mouth, online evaluations, and personal
experiences.

[Link] Reaction: The Influence of Emotions

Emotional reactions are brought on by the information gathered. bad knowledge produces bad
emotions, and positive information causes positive emotions. These emotional reactions are very
important in forming the overall attitude.

[Link] deciding factor is behavioural intentions

Beliefs and emotions combine to create behavioural intentions. A consumer is more likely to act
favourably if they have a good attitude and feel emotionally linked to a brand or product. This
behaviour could take the form of making a purchase, supporting the brand, or taking other
favourable actions.

 The Role of Branding in Shaping Attitudes:

[Link] Image: Consumer views are heavily influenced by how a brand presents itself. Brands
that convey a sense of innovation, dependability, or eco-awareness influence how consumers
view them and their goods.
[Link] Consistency: Building trust requires consistency in branding, marketing, and product
quality. Customers have a more favourable opinion of a brand when they see it constantly uphold
its promises and ideals.
[Link] Personality: Brands frequently adopt distinctive personalities that appeal to particular
market groups. Based on their own beliefs and preferences, consumers' attitudes will be
influenced by a brand that projects an adventurous or opulent personality.
[Link] Branding: Connecting on an emotional level forges strong relationships. Brands
that cause consumers to feel strongly create a deeper connection.
 The Impact of Attitudes and Branding on Consumer Behavior:

[Link] Attitudes into Action with Purchase Intentions

Positive attitudes and purchase intentions are strongly correlated. Customers are more likely to
purchase products from businesses they trust and have strong emotional ties to.
[Link] Loyalty: A Permanent Bond
Positive attitudes result in a commitment to a brand. Customers that adopt a positive mindset are
more likely to stick with a brand, become brand champions, and make repeat purchases and
spread good word of mouth advertising.

1. Using Attitudes to Increase Influence Through Word of Mouth

Word-of-mouth marketing is heavily influenced by consumer opinions towards businesses and
products. Positively oriented customers who are satisfied are more likely to share their
experiences with others, influencing their peers' views and purchasing decisions.

1. Decision Making: Using Attitudes as a Guide

When making decisions, attitudes frequently act as mental shortcuts. Consumers rely on their
attitudes to simplify decisions in a crowded market with many options, making the process more
manageable.

Reference Groups
Reference groups are those groups which have direct or indirect influence on person’s attitudes
and behavior.
Every consumer prefers to evaluate his opinion based on the comparison of opinions of others.
Moreover, consumers are influenced by people that they come in contact with or what
they observe.

Types of Reference Groups

Schiffman and Kanuk have specified the following specific reference groups

(1)Friendship groups

(2)Shopping groups

(3)Work groups

(4)Virtual groups or communities; and

(5)Consumer action groups.

1. Friendship groups
Friendship groups are classified as informal groups. They are usually unstructured and lack
specific authority levels. Friends are more likely to influence an individual’s purchase decisions.
Friends influence the consumption pattern of individuals in certain category of products (choice
of food habits, drinks etc.)

The Influence of friendship groups is important to the marketer. The opinions and preferences of
friends greatly influence a consumer while selecting brands. Marketers of products such
as clothing, fine jewellery, watches, snack, foods beverages etc., have recognized the importance
of peer group. So, they frequently depict friendship situations in their advertisements.

2. Shopping groups
Shopping group comprises of two or more people who shop together. These groups are
sometimes the off shoots of family or friendship groups. Generally, the shopping group has
a social motive to share time together and enjoy lunch after shopping. It reduces the chances of
making an incorrect purchase. The group may feel more confident with collective decisions. The
shopping group prefers to shop around and select goods after comparing the quality, terms, style,
customer services, price, etc. The buyer is influenced by group pressure and group’s
brand preference. He has lot of confidence in the views expressed by his shopping group.

A special type of shopping group is the in-home shopping party. It typically consists of a group that
gathers together in the home of a friend. The marketer demonstrates the features of his
products simultaneously to a group of potential customers. Thus, the in-home shopping party is
devoted to demonstrating and evaluating a specific line of products. Undecided persons
overcome a reluctance to buy as their friends make positive purchase decisions.

3. Work groups
People spend considerable time at their jobs. So, it provides ample opportunity for work groups to
serve as a major influence on the consumption behavior of members.

The work group may be a formal group or informal group. Formal work groups are deliberately
created by companies in order to perform specific work. The formal work group may again be
divided into

 Permanent formal work group and

 Temporary formal work group.

(A) Permanent formal work groups

They are part of the top management team, various departments of the organization and
staff groups rendering specialized services to the line staff in the organization.

(B) Temporary formal work groups

They are formed for a particular purpose. They review salary policies to suggest
measures to maintain a smooth relationship between the union and management. They also
contemplate new products and services. Temporary formal work groups come to an end after the
accomplishment of the mission assigned to them. The members of the group are
permanent employees of the company.

Informal work groups

Members of informal work groups consist of people who have become friends as a
result of working for the same company. They may or may not work together as a team.
Informal work groups may influence the consumption behavior of members during coffee or
lunch breaks or after-work meetings.

Work groups are important to the marketer. In the past, firms sold their products exclusively by
directly calling on housewives in their houses. But nowadays many women go to work.
So, marketers direct their sales efforts to offices during lunch break. Sales representatives
reach working women at their places of employment.

[Link] groups or communities

The term virtual groups refers to web-based consumer groups. Use of computers and Internets
has paved the way for the emergence of a new type of group — virtual groups or communities.
Adults and children log on to the web. They visit special interest websites often with chat rooms.
A person can chat online with others who share his interest. He can send or receive
instant messages. Thus, an exchange of knowledgy takes place within a virtual community on a
wide range of topics and interests (vegetarianism, cooking, collecting, trading, finance, film
making, romance, politics, technology, art, hobbies, spiritualism, age grouping, online game,
voice-video chats, See e-mail, travel and vacations, educational opportunities and a host of life
style options. On the internet, people are free to express their thoughts. The anonymity of web
gives its users the freedom to express their views freely.

[Link] action groups

Consumer action groups have emerged in response to consumer movement.

Consumer movement provides consumers with assistance in their effort to make the right
purchase decisions. Consumer action groups are organized to correct a specific consumer abuse.
Women action groups are opposed to any advertising that may have a negative impact on them.
Family influences on Consumer Behavior
The family is the main reference group that may influence the consumer behaviour. Nowadays,
children are well informed about goods and services through media or friends circle, and other
sources. Therefore, they influence considerably in the decisions of buying both fast
moving consumer goods and durable items.

A person performs certain roles in a particular group such as family, club, organization, and so
on. For example, a person may perform the role of a vice president in a firm and another person
may perform the role of a marketing manager.

The vice president may enjoy higher status in the organization as compared to the
marketing manager. People may purchase the products that conform to their roles and status,
especially in the case of branded clothes, luxury watches, luxury cars, and so on.

Gender influences on Consumer Behavior

Gender is the range of characteristics pertaining to, and differentiating between, masculinity and
femininity. Depending on the context, these characteristics may include biological sex (i.e., the
state of being male, female, or an intersex variation), sex-based social structures (i.e.,
gender roles), or gender identity. Traditionally, people who identify as men or women or use
masculine or feminine gender pronouns are using a system of gender binary whereas
those who exist outside these groups fall under the umbrella terms non-binary or gender queer.

Age influences on Consumer Behavior

Age is an important demographic factor that affects consumer behavior. As people grow, their
needs change. Similar changes come to their buying decision making patterns. With age,
our health needs change and so do many other needs.

Age brings changes to people’s lifestyle and with it their needs and personal values are
also affected. When people are young, they spend more on their lifestyle needs from fun and
movies to fashion.

As they grow older, their expenses on these things shrink. Elderly people mostly remain indoor,
however, their health related expenses may rise. In this way, age becomes one of the
fundamental demographic factors affecting consumer behavior and buying decisions.
Social Class & Consumer Behavior
Social class is the segment of a society arrived at by a hierarchical classification
of individuals and families with a distinct status. The members of each class have
relatively the same status. The status denotes the aggregate effect of the members of a class.
Analysis of the characteristics of the social class will help the marketer to understand its
consumption pattern.

[Link] members of each class have relatively the same status

A social class is defined by the amount of status, which the members of that class have
in comparison with members of other social classes. The members in a particular social class
have relatively the same status. An individual or family achieves social class by acquisition of
skills, education, wealth and recognition. The status of the member reflects the aggregate
effect of influence and recognition conferred on them by the society. This in turn is either more
or less than the status of other classes.

[Link] within a given class tend to behave alike

Social classes are homogeneous divisions of the society. Each social class shows similar
life- styles, values, status, prestige and interests. So, the behavior pattern of the members
become similar. There are also shared attitudes and behavioral pattern among members.
So, the behavioral pattern differs among social classes. For example, a person belonging to
middle class prefers economically priced cars. But upper income group will prefer highly priced
cars. Thus, social classes exhibit varying buying pattern in purchase of products that
meets the life-style, status and prestige of their members.

[Link] class is hierarchical

Social class is determined by a hierarchical classification of individuals and families with
a distinct status. Families can climb the social ladder by achievement of members. When
each generation within a family tends to do better, there is an upward mobility in the social
ladder. When young adults have less disposable income than their successful parents, they
may slide down in the class hierarchy. The hierarchical aspect of social class is important
to marketers. Consumers may prefer to purchase products favored by their own or higher
social class (e.g. imported luxury automobiles). Consumers may avoid certain products because
they perceive the products to be lower class products.

[Link] class is measured by a combination of variables

Researchers use a combination of variables to measure social class. A number of socioeconomic
factors are combined to form one over all members of social class standing. They better reflect
the complexity of social class than a single variable. For example, to know the
consumer perceptions of mail and phone order shopping, the socioeconomic status was studied
by using a composite of income occupational status and education. It reveals that higher the
socioeconomic status, the more positive are the consumer’s ratings of mail and phone order
buying, relative to in-store shopping.
5. Social class is mobile
Social class membership is not hard and fixed. Individuals can move either up or down in social
class standing. The availability of free education and opportunities for self-development
prompts success in business and in life. Successful persons move up to the higher class.
Today, many young men and women start their own business to have higher social status.
Higher social classes become reference groups for ambitious men and women of lower social
status. Signs of upward mobility are found in India. For instance, plastic surgery was
once affordable only for movie stars and other wealthy people. Today, consumers of all
economic strata undergo cosmetic surgery.

6. Social class and status differentiation

Researchers measure social class in terms of social status. They define each social class by the
amount of status of the members of that class. It is also known as ―Social stratification―.
Social stratification has resulted in differentiated roles. For example, a person with higher
status owns a car. A middle class status person owns a two-wheeler. A person with
lower status owns a bicycle. This is the symbolic identification of role and status based on
social classification.
Cultural Influences on Consumer Behavior
The influence of culture is inevitable in our societal living. However, within a larger
society, there are sub systems of values exhibiting variations in behavioral pattern. Marketers
have begun to segment larger societies into smaller subgroups that are homogeneous in relation
to cultural values.

The individuals of a specific subculture vary in their consumption patterns. They show variation
in lifestyle, financial viability, food preferences, reading habits, purchase of specific brands in a
particular product category, purchase time, store patronage, etc.

Multi Culture in India

India is said to be a country of multi cultures. It is so because of its long history of civilization.
Different rulers have ruled the country. These rulers had different systems of governance
and social practices. However, now there is unity in diversity which is important to any marketer
in framing strategy for marketing.

Differences in Consumption pattern

Differences are found in the consumption pattern related to rural – urban sub-cultural division.
Variations are found in preferences for food items, housing, clothing, home, furnishing, transport
vehicles used, recreation and leisure activities, saving pattern, etc.

Economic Status – Classes of people in India

Economic status is another important sub-cultural variation. According to economic status,
people can be divided into three classes:

[Link] upper or affluent class,

[Link] middle class, and;
[Link] lower class.