consumer behavior

1. UNIT-II
CONSUMER
BEHAVIOR

9.  Advantages of AIO
• Defining the target market – This method facilitates defining the target
market beyond simple demographic or product usage variations
• Create a new view of the existing market – Creating strategies with
stereotyping in mind about a typical customer in mind may not always
match assumptions.
• Position the Product – Marketers can use psychographic information to
emphasize features in a product that fits with a person’s lifestyle
• Communicating product attributes in better way - Provides useful input
to advertisers regarding a much richer mental image of target
consumer who are in the process of communicating something useful
about the product.
• Product strategy development – Helps marketers identify new product
opportunities, draft media strategies by understanding how a product
fits or does not fit into consumer lifestyle.
• Marketing Social and Political Issues – Psychographic segmentation
becomes important in political campaigns and policy makers for
finding commonalities among consumers.

12.  History of the term VALS
 VALS is actually a proprietary term of SRI
international. The term was developed by Social
scientist and futurist Arnold mitchell. Arnold mitchell
actually developed the vals framework to determine
different classes of people who had varying values,
attitudes and lifestyle. These people were determined
by the resources they had at their disposal as well as
the amount of primary innovation they could accept or
create. Thus the people with low resources were low on
innovation and the ones with higher resources were
higher in innovation. This formed the basis of the
VALS framework.

13.  Vals which is also known as values attitude and
lifestyle is one of the primary ways to
perform psychographic segmentation.
 All three terms are intangible in nature and therefore
give an idea of the inert nature of the consumer. If you
know what your consumer is thinking, you would
know what kind of promotions or
communications will attract him most. And how do
you know what the consumer is thinking? By
determining his vals – Values, attitudes and lifestyle.

14.  VALS is different for different people. Lets take income as
an example. If you are a person with high income your
lifestyle would probably include habits of the SEC A class
such as dining out of home frequently and that too in top
class restaurants, wearing only branded clothes and buying
the best cars out there. Whereas if you are a middle class
income group consumer, you would be more wary of
spending money and would rather concentrate on savings.
 So now how does VALS affect a marketer? Lets say you were
a banker. What would you sell someone who had a high
income lifestyle? You would sell them investment options
and would also dedicate a relationship manager to take care
of their needs. In fact, the bankers also have a term for high
income individuals known as HNI – high networth
individuals. But, if your lifestyle was that of a low income
customer, you are more likely to be targeted for savings

15.  Innovators – The class of consumer at the top of the vals framework. They
are characterized by High income and high resource individuals for whom
independence is very important. They have their own individual taste in things
and are motivated in achieving the finer things in life.
 Thinkers – A well educated professional is an excellent example of Thinkers in
the vals framework. These are the people who have high resources and are
motivated by their knowledge. These are the rational decision making
consumers and are well informed about their surroundings. These consumers
are likely to accept any social change because of their knowledge level.
 Believers – The subtle difference between thinkers and believers is that
thinkers make their own decisions whereas believers are more social in nature
and hence also believe other consumers. They are characterized by lower
resources and are less likely to accept innovation on their own. They are the
best class of word of mouth consumers.
 Achievers – The achievers are mainly motivated by – guess what –
Achievements. These individuals want to excel at their job as well in their
family. Thus they are more likely to purchase a brand which has shown its
success over time. The achievers are said to be high resource consumers but at
the same time, if any brand is rising, they are more likely to adopt that brand
faster.

16.  Strivers – Low resource consumer group which wants to reach some
achievement are known as strivers. These customers do not have the resources
to be an achiever. But as they have values similar to an achiever, they fall under
the striver category. If a striver can gain the necessary resources such as a high
income or social status then he can move on to becoming an achiever.
 Experiencers – The group of consumers who have high resources but also
need a mode of self expression are known as Experiencers. Mostly
characterized by young adults, it consists of people who want to experience
being different. This class of consumers is filled up with early adopters who
spend heavily on food, clothing and other youthful products and services.
 Makers – These are consumers who also want self expression but they are
limited by the number of resources they have. Thus they would be more
focused towards building a better family rather than going out and actually
spending higher amount of money. Making themselves into better individuals
and families becomes a form of self expression for the Makers.
 Survivors – The class of consumers in the Vals framework with the least
resources and therefore the least likely to adopt any innovation. As they are not
likely to change their course of action regularly, they form into brand loyal
customers. An example can include old age pension earners living alone for
whom the basic necessities are important and they are least likely to
concentrate on anything else.

17.  The Social Factors are the factors that are prevalent in
the society where a consumer live in. The society is
composed of several individuals that have different
preferences and behaviors. These varied behaviors
influence the personal preferences of the other set of
individuals as they tend to perform those activities
which are acceptable to the society.

18.  The following are the important social factors that
influence the behavior of an individual in one or the
other way:

19.  Family: The family members play a crucial role in designing one’s
preferences and behavior. It offers an environment wherein the
individual evolves, develop personality and acquire values. A child
develops his buying behavior and preferences by watching his parents
and tend to buy the same products or services even when he grows old.
The family can influence the buying behavior of an individual in either
of the two ways:
 Influences the personality, attitude, beliefs, characteristics of the
individual.
 Influences the decision making of an individual with respect to the
purchase of certain goods and services.
 It is believed that an individual passes through two families: Family of
Orientation and Family of Procreation. In the former type, it is the
family wherein an individual has taken the birth, and the parents have
a strong influence on his behavior. While in the family of procreation,
it is the family created by an individual with his spouse and children
and as such the preferences tend to change with the influence of the
spouse.

20.  Reference Group: A reference group is a group with which an
individual likes to get associated, i.e. want to be called as a
member of that group. It is observed, that all the members of the
reference group share common buying behavior and have a
strong influence over each other. The marketers should try to
identify the roles within the reference group that influences the
behavior of others. Such as Initiator (who initiates the buying
decision), Influencer (whose opinion influences the buying
decision), Decision-Maker (who has the authority to take the
purchase decision) and Buyer (who ultimately buys the
product).
 Roles and Status: An individual’s position and role in the
society also influences his buying behavior. Such as, a person
holding a supreme position in the organization is expected to
purchase those items that advocate his status. The marketers
should try to understand the individual’s position and the role
very much before the endorsement of the products.
 Thus, The social factors play a crucial role in building the
behavior of an individual, and the marketers should understand
it properly before designing their marketing campaigns.

21. Consumer Behavior is an effort to study and understand the
buying tendencies of consumers for their end use.
Social factors play an essential role in influencing the
buying decisions of consumers.
Human beings are social animals. We need people around to
talk to and discuss various issues to reach to better solutions
and ideas. We all live in a society and it is really important
for individuals to adhere to the laws and regulations of
society.
Social Factors influencing consumer buying decision can be
classified as under:

22.  Reference Groups
 Immediate Family Members
 Relatives
 Role in the Society
 Status in the society
 Reference Groups
 Every individual has some people around who
influence him/her in any way. Reference groups
comprise of people that individuals compare
themselves with. Every individual knows some people in
the society who become their idols in due course of time.
 Co workers, family members, relatives, neighbors, friends,
seniors at workplace often form reference groups.

23.  Reference groups are generally of two types:
 Primary Group - consists of individuals one interacts with on a
regular basis.
 Primary groups include:
 Friends
 Family Members
 Relatives
 Co Workers
 All the above influence the buying decisions of consumers due
to following reasons:
 They have used the product or brand earlier.
 They know what the product is all about. They have complete
knowledge about the features and specifications of the product.
 Tim wanted to purchase a laptop for himself. He went to the
nearby store and purchased a Dell Laptop. The reason why he
purchased a Dell Laptop was because all his friends were using
the same model and were quite satisfied with the product. We
tend to pick up products our friends recommend.

24.  A married individual would show strong inclination
towards buying products which would benefit not only
him but also his family members as compared to a
bachelor. Family plays an important role in
influencing the buying decisions of individuals.
 A consumer who has a wife and child at home would buy
for them rather than spending on himself. An individual
entering into marriage would be more interested in
buying a house, car, household items, furniture and so
on. When an individual gets married and starts a family,
most of his buying decisions are taken by the entire
family.

25.  Every individual goes through the following stages and
shows a different buying need in each stage:
 Bachelorhood: Purchases Alcohol, Beer, Bike, Mobile
Handsets (Spends Lavishly)
 Newly Married: Tend to purchase a new house, car,
household furnishings. (Spends sensibly)
 Family with Children: Purchases products to secure his as
well as his family’s future.
 Empty nest (Children getting married)/Retirement/Old
Age: Medicines, Health Products, and Necessary Items.
 A Ford Car in the neighbourhood would prompt three
more families to buy the same model.
 Secondary Groups - Secondary groups share indirect
relationship with the consumer. These groups are more
formal and individuals do not interact with them on a
regular basis, Example - Religious Associations, Political
Parties, Clubs etc.

26.  Role in the Society
 Each individual plays a dual role in the society
depending on the group he belongs to. An
individual working as Chief Executive Officer with a
reputed firm is also someone’s husband and father at
home. The buying tendency of individuals depends on
the role he plays in the society.
 Social Status
 An individual from an upper middle class would spend
on luxurious items whereas an individual from middle
to lower income group would buy items required for
his/her survival.

28.  Buying Roles of a Family
 The various roles played by members of a family while
making a purchase decision are:
 Influencer – The family member or family members
who provide information about a product or service to
other family members.
 Gatekeeper – Family members who control the flow
and direction of the contents of the information.
 Decider – The one with the power to select the
product whether individually or jointly.

29.  Buyer – The one who makes the actual purchase.
 Preparer – The family member or family members
who prepare the product for family consumption.
 User – The consumers of the product or service.
 Maintainer – The members who maintain the
product for continued use and satisfaction.
 Disposer – The member who disposes of the product.

30.  The family is a major influence on the consumer behavior
of its members. There are many examples of how the family
influences the consumption behavior of its members. A
child learns how to enjoy candy by observing an older
brother or sister; learns the use and value of money by
listening to and watching his or her parents. Decisions
about a new car, a vacation trip, or whether to go to a local
or an out-of-town college are consumption decisions
usually made within the context of a family setting. The
family commonly provides the opportunity for product
exposure and trial and imparts consumption values to its
members. As a major consumption unit, the family is also a
prime target for the marketing of many products and
services.