Notes Prepared by: Joel Peter Lobo
External influence on consumer behavior
External influence on consumer behavior
(Family)
The changing structure of family
Three other basic functions provided by the family are particularly relevant to a discussion of consumer behavior.
These include:
· Economic well being
· Emotional support
· Suitable family lifestyles
Emotional well-being
Although families in the affluent nations of North America, Europe and Asia are no longer formed primarily for economic security, providing financial means to its dependents unquestionably a basic family function. How the family divides its responsibilities for providing economic well-being has changed considerably during past 30 years. No longer are traditional husband as economic provider and wife as home maker and child-rearer still valid. For instance, it is very common for married women with children in the United States and other industrial countries to be employed outside the home for their husbands to share household responsibilities.
The economic role of children also has changed. Today, despite the fact that many teenage children work, they rarely assist the family financially. Instead, many teenagers are expected to pay for their own amusements.
Emotional support
The provision of emotional nourishment (including love, affection, and intimacy) to its members is an important core function of the contemporary family. In fulfilling this function, the family provides support and encouragement and assists its members in coping with decision making and with personal or social problems. To make it easier for working parents to show their love, affection, and support to their children, greeting card companies have been increasingly creating cards for parents to give to their children (vice versa)
Suitable family lifestyle
Another important family function in terms of consumer behavior is the establishment of a suitable lifestyle for the family. Upbringing, experience, and the personal and jointly held goals of the spouses determine the importance placed on education or career, on reading, on television viewing, on the learning of computer skills, on the frequency quality of dining out, and on the selection of other entertainment and recreational activities.
Family lifestyle commitments, including the allocation of time, are generally influencing consumption patterns.
Family life cycle stages
The concept of household or family life cycle is important for marketers in segmenting the market. In 1966, William wells and George Gubar proposed eight stages to describe the family life cycle.
The following life cycle stages are typical of families:
1. The bachelor stage: young, single person under age of 35 years. Incomes are generally low since they have started careers, but they may have few financial burdens and sufficient discretionary income.
2. Newly married: young couples, no children. If both spores are employed, they will have high level of discretionary income.
3. Full nest 1: young married couples with youngest child under 6 years of age. There would be greater squeezes on income because of increased on childcare. However, if they are members of a joint family, the level of discretionary income is likely to be high.
4. Full nest 2: young married couples with children from 6 years to 12 years of age. Better financial position because income of both parents rising. Children spend more hours outside their parents influence.
5. Full nest 3: older married couples with dependent teenage children living at home. Financial position of family continues to improve. There are increasing costs of college education for children.
6. Empty nest 1: older married couples with no children living with them, parents still employed. Reduced expenses result in greater savings and highest discretionary income.
7. Empty nest 2: older married couples with no children living with them and parents retired. Drop in income and couple relies on savings and fixed income from retirement benefits.
8. Solitary survivor 1: older single persons with low income and increasing medical needs.
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Family decision making and consumption-related roles
When two or more family members are directly or indirectly involved in the decision making process, it is called family decision making. Such family decisions differs from individuals decisions in many ways. For example, if we consider the purchase of a bicycle for a child, some of the relevant aspects to think about can be: who recognizes the need for bicycle? How a brand is selected? What role the concerned child plays?
Joint decisions are more likely to operate in the early stages of family life cycle when both spouses are relatively less experienced. After gaining experience, they usually delegate responsibilities concerning buying decisions to each other.
Key family consumption roles
For a family to function as a cohesive unit, tasks such as doing the laundry, preparing meals, setting the dinner table, taking out the garbage, and walking the dog must be carried out by one or more family members. In a dynamic society, family related duties are constantly changing however, we can identify either distinct roles in the family decision making process.
For example, a family member may be walking down the cookie aisle at a local supermarket when she picks out an interesting new fat-free cookie. Her selection does not directly involve the influence of other family members. She is the decider, the buyer and, in a sense, the gatekeeper, however, she may not be the sole consumer. Products may be consumed by a single family member, consumed or used directly by two or more family members, or consumed indirectly by the entire family.
Dynamics of husband-wife decision making
Marketers are interested in the relative amount of influence that a husband and a wife have when it comes to family consumption choices. The relative influence of husbands and wives can be classified as: husband dominated, wife dominated, joint, and autonomic.
The relative influence of a husband and wife on a particular consumer decisions depends in part on the product and service category. For instance, during 1950s, the purchase of a new automobile was strongly husband dominated, whereas food and financial banking decisions more often were wife dominated. Fifty years later, the purchase of the family’s principal automobile is still often husbands dominated in many households. However, in other contexts or situations, female car buyers are a segment to which many car manufacturers are currently receiving a great deal of marketing attention. Also, in the case of financial decision making, there has been a general trend over the past decade to have the female head of household make financial decisions.
Husband wife decision making also appears to be related to cultural influence. Research comparing husband wife decision making patterns in the people’s republic of china and in the United States revels that among Chinese there were substantially fewer “joint” decisions and more “husband dominated” decisions for many household purchases. However, when limiting the comparison to urban and rural Chinese households, the research showed that in a large city such as Beijing, married couples were more likely than rural couples to share equally in purchase decisions. Still further, because of china’s “one child” policy and the ensuring custom of treating a single child as a “little emperor”, many of the parents purchase decisions are influenced by the input of their child.
In another recent cross-culture study, husband-wife decision making was studied among three groups: Asian Indians living in India, Asian Indians living in the United States, and American nationals. Results show a decrease in husband decisions and an increase in wife dominated decisions, going from Asian Indians in India , to Asian Indians in the United States
Groups:
Activities
Groups:
Groups exist in every formal and informal type of organisations. Such groups are created by the members for its satisfaction. Very often groups get formed automatically because of the operation of various socio psychological factors. Such groups affect the behaviour of its members.
Group dynamics is related to determining the interactions and forces between group members in a social situation. The term dynamics originated from the Greek word meaning force. Thus if this term can be extended to group dynamics, it refers to the study of forces operating within a group. Here it would be proper to mention the difference between aggregates and groups. Aggregation of individuals refers to where individuals are not aware of each other, or if aware, do not interact with each other in a meaningful way. A group will comprise of:
1. Two or more people who are interdependent on each other, with group members and
2. The group share a set of beliefs, valves and norms, which regulates their mutual conduct.
Meaning of Group:
Marvin E. Shaw has defined groups as “two or more persons who are interacting with one another in a such a manner that each person influences and influenced by each other”
People generally tend to define a group differently, mainly because it is difficult to define a group independent of some specific reference or purpose. As per the above definition when two or more people interact together such that each member is influence as well as be influenced by other group members, it is referred to as a group
Clouis R. Shepherd defines groups as “A group may be defined as the aggregation of small number of persons who work for common goals, develop a shared attitudes and are aware that they are part of a group and perceive themselves as such”.
Characteristics of Groups:
1. Two or more persons: To form a group there should be atleast two persons, because a single individual cannot interact. Though no maximum limits have been set, the size of the group should be such so as to allow meaningful interaction among the members of group.
2. Collective identity: Each member of the group must believe that he is member of the group and also be aware of his participation in the group activity. For instance a group of boys are room-mates staying together in the hostel. Though they may not be studying in the same class but because of their identity of room-mates they would prefer to go out together for shopping.
3. Interaction: Members of the group will interact with each other. Though it is not necessary for all members of the group to interact simultaneously but each member must atleast occasionally interact with the members of the group.
4. Shared goal interest: Members of the group should concur to the attainment of objectives each one must atleast share one of the groups concerns
Reasons for formation of groups:
The reasons for the formation of groups are as follows
1. Solution for mindedness: Though the group members bring with them expertise in the form of knowledge and experience sometimes due to want of time the group members may pressurise all concerned with the group to arrive at solution to the problem quickly. In such cases the decisions arrived at may be improper/ hasty/ premature one and need not be the correct one.
2. Compromised results: In case of problems the group members though interactions and discussions will understand the problem hold discussions and try to arrive at a consensus. However sometimes when consensus is arrived at, the group may perceive group harmony as more important than any given task decision. This results in a compromise on the solution arrived at. Under the circumstances this may not be the best solution but rather a compromised one.
3. Untimely decisions: One of the characteristic features of a group is that decisions can be taken very fast. But at a times leader of the group will as a rule of the thumb take a decision and then communicate it group. In such cases the very purpose for formation of a group is defeated. By following the thumb rule the group leader will be taking a unilateral decisions and not the united one. Moreover since the decision taken is single handedly and also arrived at quickly it may be an untimely decision.
4. Conflicts: Since the informal group exist to meet and satisfy the social needs of its members, there are chances of occurrences of role conflict. This problem arises when the individual group member becomes more committed to his/her own goal and seem to undermine their group members problems. In case of imbalance between the two and if the group as such is not constituted properly conflict may arise.
5. Dominance: Groups are useful for transmitting and sharing information. In case of a problem all members can discuss it together and decisions can be arrived at with opportunities for clarification. However there is is always a fear of a single person a dominant personality assuming unofficial authority.
Types of Groups:
1. Family life cycle:
Even though it is the family unit which purchases home appliances, toys, furniture etc, it is cannot be implied that all the families are in the market at the same time or for that matter at any time. This means that along with family decision making the family life cycle also plays a role in influencing consumer behaviour and also helps in gaining insight into consumption related behaviour.
People’s consumptions patterns of goods and services they buy and consume changes over their lifetime. As babies they consume baby food in the earlier years, most food items in their growing and mature years and specific diets in the later years. Individuals taste and preference related to cloths, automobiles, idea of re-creation etc. is also related to stage of the family life cycle and age.
Some writers like Gail Sheehy in his papers ‘predictable crisis in adult life’ and Roger Gould in ‘transformation’ has identified certain psychological life cycle stages that adults experience certain passage or transformation as they go through life. This means that changing consumption interest can also associated with these adult passages.
Thus marketers very often try to identify their target markets in terms of family life cycle and develop appropriate product and marketing plans. Further they also have to pay attention to the changing consumption interests that might be associated with these adult passages and develop marketing programmes accordingly.
2. Friendship groups:
An individuals for his/her protection self awareness and enhancement needs others around him/her Leon Festinger in his ‘ A theory of social comparison processes’ has claimed that there exists in the human organisms a drive to evaluate his opinions and abilities. If objective non social means are not available of others. In other words human beings prefer the company of other and these people’s opinion also matters to them. Consumers also enjoy the company of their friends when purchasing certain types of goods. Such friendship group influence the consumer especially products like clothing, fine jewellery, cosmetics and personal care items, food items etc.
The influence of the friends is also seen in buyers choice of food habits and drinks. Marketers have realised the important role played by the friends in influencing the consumption pattern of individuals in certain category of products and also involved in designing suitable marketing communication programmes. To mention a few advertisements- coca-cola,(all soft drinks) close up, colgate etc (tooth paste) rin bar , life bouy, life bouy plus,(soaps and detergents) Hero tribe ranger (cycle) Four square, Gold Flake etc. (cigarettes) and so on are based on themes of evolved around friendship.
3. Formal social clubs:
Human beings are generally considered to be sociable in nature, spend much of his/her time in group situations. They like to be associated with formal social clubs like the Rotary Club, Lions Club etc. The reason for their getting associated with such social groups may be to achieve a specific goal like making new friends, career advancement or pursuing a special interest or promoting a specific cause. Such formal social systems generally comprises of three elements
Interaction
Sentiments
Sentiments
Activities are the tasks that people perform. Interactions are the behaviour that occurs between people in performing the tasks. And the sentiments are the attitudes that develop between individuals within the group. George C. Homans argues that these concepts through separate and closely related. A change in any of these three elements will produce some change in the other two.
In a formal organisation setup, job (activities) has to be done that require people to work together (interactions). These jobs must be sufficiently satisfying (sentiments) for people to continue doing them. With more and more positive interaction with each other, more and more positive sentiments will be developed by the people towards each other. As, this process continues there is tendency for the group members to become more alike in their activities and their sentiments.
Markets releasing the role played by the formal groups on their individual members can work out a suitable sales promotion and communication programme and deliver the same to its target segment.
4. Shopping friends/groups:
According to psychology ‘group’ refers to the number of people who interact with one another are psychologically aware of one another and perceive themselves to be a group. In the same way, shopping groups can be assumed to exists because the friends or the group members need to relate to each other mainly because of the physical location of the people same perception of things matching personality, styles ,outlooks etc. These factors are responsible for the increase in the frequency of the interactions between the members of a shopping group.
So depending on the product category and target market segment the marketer should develop a marketing programme keeping in mind the shopping group who are likely to be involved in the decision making process and who will are also likely to influence the individual buyer.
5. Work Group:
This group can comprises of formal work group and informal work group. The formal work groups are those which are deliberately created by companies in order to fulfil specific tasks or functions clearly related to the total organisational goals and objectives. Based on their duration, the formal work groups can be of two types.
a).Permanent formal work group: are part of the top management team, work units in various departments of the organisation staff groups proving specialised services to the line people in the organisation, permanent committees and so on.
b) Temporary formal work groups: are committees or tasks forces created for a particular purpose/mission. They may be created to study and review the salary policies to suggest measures to improve the relationship between the union and management or to think of new products and services and so on. These temporary formal groups may exist till the tasks assigned to them have been completed. Very often the committee /temporary work group will comprise of members, who are already on the permanent payroll of the company. However till the completion of work assigned to the committee there will be close interactions between the members.
Markets must realise that the work group also plays a very important role in promoting their products and work out marketing programmes to communicate information about their product and its usage to the work groups.
Bibliography:
1) Leon G. schiffman, Leslie Lazer Kanuk,
“CONSUMER BEHAVIOR”, 9th edition,
Pearson/ PHI.
2) Batra k satish, kazmi S H H,
“CONSUMER BEHAVIOR”
2nd edition, 2008,
New Delhi.
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