CONSUMER

BEHAVIOUR
Module – 5 ( Group Influence)
Module – 6 (Class and Culture )
Additional course - Consumer Influence and the Diffusion
of Innovations.
Books for reference
Title: Consumer Behavior
Author: Leon Schiffman and Leslie Kanuk
Publisher: Prentice Hall / Pearson Education
 LEARNING PLAN OF CONSUMER BEHAVIOR
 Group Influence.
- Definition.
- Types of Groups.
- Reference groups
- Family influence.
- application of groups on consumers.
 Class and Culture.
- Introduction
- Status symbol of each strata in social class
- Implication in market.
CASE STUDY FORMAT
1. Back ground of the case 2. Problem of the study
• History of the company • Growth of the product / service.
• Background of the industry • Impact of competition on the
• Type of products available in the product or service.
segment. • Measures taken by the company to
• Market leaders enhance the brand, customer
• Market share in terms of volume loyalty, price, promotion.
and value. • Measures taken by the company in
terms of strategy to enhance
consumer base for the product /
service.

3. Action of the company . 4. Questions and suggestion

-Strategy -Major problems in the case
-Level of success of the strategy. -Suggestions for the case
TYPE OF CASE STUDY (SAMPLE COMPANY NAMES)

 Maruti Udyog Limited (MUL)

The entry of Maruti Udyog Limited (MUL), the leading Indian car
manufacturer, into the used car market. Between the late 1990s and early
2000s, MUL found its profit margins going down. This made it imperative
for it to look for other revenue generating avenues, and this included the
entry into the user car market in India. Maruti used its customer relations
practices to build customer loyalty and word-of-mouth awareness.
 Issues:
 Evolution of the used car-market in India
 Role of word-of-mouth in developing new business for a company
 The role of changing demographics in developing new markets
TYPE OF CASE STUDY (SAMPLE COMPANY NAMES)
 Bharat Electronics Limited (BEL) and Electronics Corporation of
India Limited (ECIL), Government of India undertakings,
developed Electronic Voting Machines (EVMs) for use in the
Indian elections. How these machines increased the efficiency of
the Indian electoral process and how the general public accepted
these innovative machines are also dealt with. A comparative
study is made of the Indian EVMs and the voting machines used
in USA.
 Issues:
 How EVMs increased the efficiency of election process in India
 How the general public in India accepted the EVMs
 The advantages of Indian EVMs over voting machines used in
USA
TYPE OF CASE STUDY (SAMPLE COMPANY NAMES)

 MTV practiced a globalized brand strategy in

order to be the favorite music channel for its
target market. It went in for local recruitment,
customizing its program content to suit local
needs, coming out with innovative programs.
 Issues:

 Challenges faced by a broadcasting company

which caters to markets around the globe.
 Strategies followed by broadcasting companies to
attract the target markets.
GROUP
 Two or more people who interact to
accomplish either individual or mutual goals.
 The broad scope of this definition include : -
- Intimate group : - which include close
friends , neighbors etc.
- Formal group : - which include
association of members.
 TYPES OF GROUP
Primary Secondary Formal Informal Membership Symbolic
Group Group Group Group groups group

The The The group The group A group to These are

frequency of frequency of which is which is which a groups in
interaction interaction of highly more loosely person which an
of the the individual defined defined is qualifies for individual is
individual is is structure, called as membership not likely to
high or occasionally member informal is called as receive
regular with with others roles, group. membership membership,
other authority group. but adapts
individuals. levels and the other
specific groups
goals they values ,
are attitudes and
classified behavior.
as formal
group
CONSUMER RELEVANT GROUPS

Friendship
Family
group

Formal social Shopping

groups groups

Consumer
action group Work groups
CONSUMER RELEVANT GROUP

Family
 An individual’s family often is in the best
position to influence individuals consumption
decisions.
 The family importance in this regard is based on
the frequency of contact that the individual has
with other family members and or the extent of
influence that the family has on establishing a
wide range of values , attitudes and behavior.
CONSUMER RELEVANT GROUP
Friendship groups
 They typically classified as informal groups
 Friends fulfill a wide range of needs, they provide security and
opportunity to discussion .
 The opinions and preferences of friends are an important influence
in determining the products or brands a consumer ultimately selects.
 Consumers are more likely to seek information from friends they
believe have values or outlook similar to their own.
 Marketers influence individual consumers to buy products or service
by depicting friendship situations in their promotional activities like
television advertisement, hoarding etc.
FORMAL SOCIAL GROUPS
 A consumer joins a formal social groups to fulfill specific goals of
making new friends, broadening perspective and pursuing a special
interest.
 Marketers are interested in these groups , often they consume
products and services together in a group.
 Membership in a formal group may influence a consumers behavior
in several ways , members of such group have frequent opportunity
to informally discuss products and services and few members may
copy the consumption behavior pattern of other member whom they
admire.
 Common product that are sold to formal groups are insurance,
automobile , tax saving schemes , special interest publications of
books etc.
SHOPPING GROUPS
 Two or more people who shop together, whether for food, for clothing
or simply to pass the time can be called a shopping groups.
 Such groups are often consist of family, friendship groups and they are
also called as “ Purchase Pals”.
 The motivation for shopping with a purchase pals range from a primary
social motive to share time together and enjoying shopping to help
reduce the risk when making an important buying decision.
 In case of buying expensive products purchase pals influence the
consumer in evaluating product line in the segment and finally decide
on the product or service. For example, home entertainment product,
investment decision in stock market, buying a car, foreign vacation
tours etc.
CONSUMER ACTION GROUPS
 A particular kind of consumer group , consumer action group has
emerged in response to the consumerist movement.
 Consumer action groups are divided into two broad categories
1. Those that organize to correct a specific consumer abuse
and then disband.
2. Consumer groups that organize to address broader, more
pervasive problem areas and operate over an extended
period of time.
 The main aim of consumer action groups is to bring sufficient
pressure on the business community to make them correct perceived
consumer abuses.
 For example, making consumer aware of being (Veg) and stop killing
of animals , consumer awareness movement on advantage of using
helmets while driving a motorcycle, etc.
WORK GROUPS
 The amount of time that consumer spend at their jobs, frequently more
than 35 hours per week, this provides ample opportunity for work
groups to serve as a major influence on ht consumption behavior of
members .
 The formal and the informal work group influence the consumer . The
formal work group consists of those individuals who work together as
a team. Their direct and sustained work relationship offers opportunity
for one or more members to influence the consumption related
attitudes on other team members. Informal work groups consist of
people who have become friends as a result of working for the same
firm.
 The work groups influence consumers brand choice.
 REFERENCE GROUPS
 Reference group is any person or group that serves as a point of
comparison for an individual in forming either general or specific
values, attitudes and behavior.
 From a marketing perspective, reference groups are groups that serve as
frame of reference for individuals in their purchase or consumption
decision.
 Reference groups that influence general values or behavior are called
“ Normative reference groups” . For example, an child's normative
reference group is the immediate family, which is likely to play an
important role in child’s consumer values and behavior, like which
food to select for good nutrition, appropriate ways of dress for specific
occasions, what constitutes good values. In an advertisement of child
products , they use the concept of child’s family, friends all the
participants in the advertisement are normative reference group.
REFERENCE GROUPS
 Reference groups that serve as benchmarks for specific or narrowly
defined attitudes are called as “Comparative Reference groups”.
 Comparative reference group is that group in which the
consumer has indirect relation and less face to face
interaction, such type of groups attract the consumer and the
consumer gradually start to adopt the life style of the
personalities lying in the comparative reference group.
 A comparative reference groups might be a neighboring family whose
lifestyle appears to be admirable and worthy of imitation .
For example , the way the maintain their home, their choice of home
furnishings and car , etc.
REFERENCE GROUP
 Normative and Comparative reference groups are
important.
 Normative reference groups, influence the development of
a basic code of behavior; while comparative reference
groups influence the expression of specific consumer
attitude and behavior.
 It is likely that the specific influences of comparative
reference groups to some measure depend on the basic
values and behavior patterns established early in a persons
development by normative reference groups .
REFERENCE GROUPS
 Indirect reference groups consist of those individuals with
whom a person does not have direct face-to-face contact.
 They receive information about the product and service
and its benefits through the movie stars, sports heroes,
political leaders, or TV personalities.
MAJOR CONSUMER REFERENCE GROUPS

Others culture

One’s own culture

Selected subculture

Social class

Friends

Family

Individual
TYPES OF REFERENCE GROUPS
 Reference groups can be classified in terms of a persons membership
or degree of involvement with the group , as well as in terms of the
positive or negative influences they have on his or her values, attitudes
and behavior.
Membership Non Membership
Group Group

Positive Influence Contractual group Aspirational Group

Negative Disclaimant Group Avoidance groups

Influence
TYPES OF REFERENCE GROUPS
 Contactual group is one in which a person holds
membership or has regular face to face contact and of whose
values , attitude and standards he or she approves.
 Aspirational group is a group in which a person does not
hold membership and does not have face to face contact but
wants to be a member.
 Disclaimant group is a group in which a person holds
membership or has face to face contact but disapproves of the
groups values, attitude and behavior.
 Avoidance group is a group in which a person does not hold
membership and does not have face to face contact and of
whose values, attitude and behavior he or she disapproves.
EXAMPLE :- TYPES OF REFERENCE GROUPS
 Tom recently finished a job in Navy and is now beginning his
new career as computer specialist for a local telephone
company. The telephone company’s experienced computer
staff members serve as Tom’s contactual groups. Tom
believes that continuing his education to obtain an advanced
degree in computer will enhance his career opportunity. It is
clear that individuals who hold advanced a degrees in
computers serves as an aspirational group . In contrast, Tom
views those high school friends who neither took advantage of
education , these friends are disclaimant group. Finally, Tom
rejects the actions of those people who he perceives who don’t
demonstrate adequate respect for families ,such serve as an
avoidance group.
FACTORS THAT AFFECT REFERENCE GROUP
INFLUENCE

 Information and Experience

 An individual who has firsthand experience with a product or
service , or can easily obtain full information about it , is less
likely to be influenced by the advice or examples of others.
 On the other hand , a person who has little or no experience
with a product or services and does not expect to have access
to objective information is more likely to seek out the advice of
other.
 For example : when we buy a product , either we have full
information on the product and after sales service or we don’t
have information about the product and after sales service, in
this case we depend on the other to know more about the
product and after sales service.
FACTORS THAT AFFECT REFERENCE GROUP
INFLUENCE

 Credibility, Attractiveness and power of the Reference

group.
 A reference group that is perceived as credible, attractive or
powerful can induce consumer attitude behavior change.
 For example: when consumer are concerned with obtaining
accurate information about the performance or quality of a
product or service ,they are likely to be persuaded by those
whom they consider trustworthy and knowledgeable. That is ,t
hey are more likely to be persuaded by sources with high
credibility.
FACTORS THAT AFFECT REFERENCE GROUP
INFLUENCE

 Conspicuousness(look) of the product

 The potential influence of a reference group on a purchase
decision varies according to how visually or verbally look of
the product is to others.
REFERENCE GROUPS AND CONSUMER
CONFORMITY
 Marketers are traditionally interested in the ability of reference
groups to change consumer attitudes and behavior.
 To be capable of such influence, 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 groups
 Legitimize an individual’s decision to use the same products as
the group.
APPLICATION OF THE REFERENCE GROUP
CONCEPT

 Reference groups appeals are used very effectively by

advertisers to communicate with their markets .
 Five major types of reference group appeals in common
marketing usage are : -
 Celebrity appeal

 Expert appeal

 Common man appeal

 Executive appeal

 Trade or spokes character appeals.

CELEBRITIES
 Celebrities, particularly movie stars, TV personalities,
sports icon , provide a very common type of reference
group appeals.
 To their loyal followers and to much of the general public.

 Companies spend enormous sum of money to have

celebrities promote their product, with the expectation that
the reading or viewing audience with react positivity to the
celebrity association with their product.
 The impact of advertisement with celebrity had a positive
impact on the product.
APPLICATION OF CELEBRITIES - EXAMPLE
Product : Compaq.

Celebrity : Shahrukh Khan.

Endorsement price : Rs 3-5 crore per annum

for brand endorsement.

Objective : Being a product category leader

our objective is to bring about a paradigm

shift in the common perception about PCs.

We want to reach every home across country.

This required an icon with universal appeal

that transcends demographics and age-

groups.
HOW CELEBRITIES ARE USED
 A firm that decides to employ a celebrity to promote its products or
service has a choice of using the celebrity , they are as under
 Testimonial : If the celebrity has personally used the product or
service and is in a position to attest to its quality, then he or she
to give a testimonial, to give an endorsement.
 Endorsement : Celebrities often are asked to lend their names to
ads for product or services with which they may or may not be
experts.
 Actor : A celebrity may be asked to present a product or service
as part of a character enactment, rather than as a personal
testimonial or endorsement.
 Spokesperson : A celebrity who represents a brand or company
over an extended period of time, often in print and television
ads, as well as in personal appearances, is usually called
company spokesperson.
TESTIMONIAL ADVERTISEMENT
ENDORSEMENT
SPOKESPERSON