Understanding Consumer Behavior-1

Consumers differ from one another in terms of their sex, age, education, income, family life-cycle stage, personality and life style, and other personal characteristics which influence their buying behavior. Man is social animal and is influenced by the people with whom he interacts. Each person interacts with and is a member of many groups. These groups provide a point of reference of comparison for the consumer and are known as reference groups such as family, friends, social organizations, professional associations; the strongest influence is exerted by the family.

Culture is the most pervasive influence on our lives and influences all aspects of our behavior; consumers operate within the cultural framework of their society and purchase only those products which fit in with their cultural norms. Within each culture there exist many sub-cultures comprising distinct nationality groups, religious groups, racial groups, geographic groups that have their own unique values and life-style. Social classes are group of people who have similar income, education, wealth, social status, value and beliefs. The marketer must understand that people with different cultural, sub-cultural and social class background have different product and brand preferences and need suitably modified products and marketing strategies.

Cultural Factors-1

Though a marketer can influence all the three types of learning through his company’s advertising strategy, it is informal learning which is most amenable to such influences. Children learn much more about products and services through advertisements in mass media (especially TV) than they do either from their parents or teachers. Brand loyalties and images developed in the early formative years of childhood tend to be deep-rooted and affect the child’s consumer behaviour even in later years of adulthood. Marketers’ interest lies in identifying the potential consumer segments and ‘catching them young’.

The kind of products and advertising appeals that can work effectively in a society depend largely on its cultural background. In the American Society, individualism, freedom, achievement, success, material comfort, efficiency and practicality are values which are followed and imbibed by the younger children. Products and services which fulfil these values are most successfully marketed in America.

In the Indian society, on the contrary, conformity, spiritualism, respect for the elderly, traditionalism and education are some of the dominant cultural values. However, our society is undergoing a cultural metamorphosis and you can discern some major cultural shifts which have far reaching consequences for the introduction of a vast variety of new products and services.

Cultural Factors

Culture
Culture is an extremely critical and all pervasive influence in our life. “It is a mould in which we are all cast, and it controls our daily lives in many unsuspected ways” (Edward T. Hall-T. Hall-The Silent Language). The study of culture encompasses all aspects of a society such as its religion, knowledge, language, laws, customs, traditions, music, art, technology, work patterns, products, etc. We can understand with the example of curtain and blinds. In many Asian countries curtains are part of their culture. Those countries are still using curtains as part of their window treatment. Which in other countries blinds, roller shades, woven wood shades blinds has taken place of curtains. So, culture is extremely important factor for consumer behavior. All these factors make up the unique, distinctive ‘personality’ of each society. For our purpose of studying consumer behavior, culture can be defined as the sum total of learned beliefs, values and customs which serve to guide and direct the consumer behavior of all members of that society.

1. Formal learning in which parents and elders teach children the proper way to behave; for instance a child may be taught that too many toffees and chocolates are bad for his teeth. This learning may influence his response, both as a child and adult, towards these products.
2. Informal learning in which we learn by imitating the behavior of our parents, friends, or by watching TB and film actors in action;
3. Technical learning in which instructions are given about the specific method by which certain things have to be done such as painting, dancing, singing, etc.

Diffusion of Innovation

Still today we have discussed on some Social factors like reference group, family, roles, status, group norms, etc……In our last post we have discussed on Opinion leaders as a part of reference group. Today we are going to discuss on Diffusion of Innovation which is another factor of the reference group.

Diffusion of Innovation
Opinion leaders are usually innovators. They are always trying out new products and brands, and recommending them to the opinion receivers. The acceptance of new products, brands, and ideas is known as the diffusion of innovation. In a narrow sense, innovation is defined as something new or modified which has a relative advantage over the existing products, brands, and ideas is known as the diffusion of innovation. In a narrow sense, innovation is defined as something new or modified which has a relative advantage over the exiting products. Marketers are concerned with the pread or diffusion of this innovation which is a two-step process. The first step is the spread of awareness of an innovation from its sources to the consumers. The second step is the individual consumer decision-making process which leads up to the acceptance or rejection of the innovation. We will discuss on cultural and sub culture factors in our next post.

Opinion Leader-2

Both opinion leaders and followers receive information on all kinds of products and services from the mass media. But the opinion receivers are more influenced by the opinion leaders rather than the media. In the eyes of the opinion receiver, the opinion leader has more credibility than the mass media. The opinion leaders become a sort of ‘middleman’ receiving information from mass media and passing it on to opinion receivers.

Advertisers and marketers are concerned with reaching the opinion leaders and ensuring that they receive the intended information which they can, in turn, pass on to opinion receivers. Thus the first task of the marketer is to identify the opinion leaders. In a particular society, persons who are members or participants in a number of social organisations and have a high social activity participation are likely candidates for opinion leaders. Having identified the opinion leaders, the next task is to reach them through the media which they patronise. Direct mail pieces, magazines and journals of clubs and social organisations and special interest magazines (for speciality products) are some of the appropriate channels for this purpose.

blinds, roller shades, woven wood shades

Opinion Leaders-1

Apart form the family, a consumer is influenced by the advice he receives from his friends, neighbours, relatives and colleagues about what products and services he should buy. This process of influencing is known as the opinion leadership process and is described as the process by which one person (the opinion leader) informally influences the actions or attitudes of others (opinion receivers).

The influence is informal and the setting in which the influencing process takes place has nothing to do with the actual buying or selling of the product in question. For instance, during lunch hour you casually ask your colleague to recommend a good scooter mechanic. Or you discuss with your relatives and neighbours what brand of TV they possess and try to ascertain which is the brand recommended by most, before purchasing a TV for your own home. Further, the process often occurs between two persons rather than in a large group setting. Thus, the opinion leadership process can also be thought of as the ‘word-of-mouth’ communication.

The advice of opinion leaders is sought in case of specific products. People who have acquired considerable knowledge and experience in a particular field are thought of as opinion leaders in that area.

Other Social Factors-1

As out talk on Social factors we have discussed on some social factors like Family, Status, Roles and today we are going to discuss on Group norms and Conformity.
Group norms
The norms of a group are the implicit rules of conduct and behavior that are expected of its member. For instance, in certain multi-national companies in India, the norm for office wear includes a full-sleeved shirt and tie, notwithstanding the terrible heat conditions. If marketers can identify the various groups to which potential consumers belong, they can successfully market those products and services whose consumption is dictated by the group norms.

Conformity
Conformity implies that members of a group have adopted attitudes and behavior patterns that are consistent with the group’s norms. In the context of consumer behavior it refers to the percentage of members who knowingly use the same brand or product. Example group a working for project a have same work environment and identical dress code. Their office window has same vertical window blinds and other group has different colors vertical window blinds. These ways they are trying to show conformity towards their group within the company.
We will discuss on Opinion Leaders in our next post.

vertical blinds, window blinds

Social Factors - Family-1

Today we continue our discussion on one important social factor and which is a family. Traditionally, it has been the wife’s role to purchase food, clothing and other household sundries, while the husband played a dominant role in the purchase of automobiles and life insurance. But with the emergence of the working woman, these lines of traditional role demarcation have been getting increasingly blurred. Husbands now have to shoulder a greater part of the household duties while women are asserting themselves in areas so far treated as the husband’s domain. Thus, the same decision, in different families may be made either by the husband or wife, or both may have an equal voice. Children are also beginning to exert their influence on the family’s purchase decision. This is especially true in case of products such as television, stereo music systems, records, personal computers, etc. where the children are likely to have more updated information about various brands and product attributes.

Commenting on the consumer behavior trends in the hi-fi stereo music today, Vice-president of Peico Electronic (Consumer electronics division) said, “It is teenagers who select sets, and their papers just buy them” (as reported in ‘India Today’ July 31, 1987).

In our next post we will discuss on other social factors like Roles, Status, Group norms etc.

mini blinds, discount motel, term life insurance

Social Factors - Family

As our talk on social factors we continue our discussion on one important factor and that is Family. The family is the most important of all these groups and we shall discuss it in detail. The family, as a unit, is an important consumer for many products which are purchased for consumption by all members. It is a source of major influence on the individual members’ buying behavior. We can identify two families which shape an individual’s consumption behavior. One is the family of orientation that is the family in which you are born and consists of your parents, brothers and sisters. It is from parents that we imbibe most of our values, attitudes, beliefs and purchase behavior patterns. Long after an individual has ceased to live with his parents, their influence on the sub-conscious mind still continues to be great. In India, where children continue to live with their parents even after attaining adulthood, the latter’s influence is extremely important.

The second type of family is the family of procreation consisting of the consumer’s spouse and children. Within the family, different members play different roles. Marketers are interested in finding out exactly the role played by individual members so that they can appropriately design their promotion strategy to suit these differing roles.

Reference Group -1

Formal and informal groups:
A formal group has a highly defined structure, specific roles and authority positions and specific goals. Rotaty, Lions, Jaycees are some of the well-known social groups in our society. Labor unions, social clubs and societies are other types of formal groups to which individuals may belong.

In contrast, an informal group is loosely defined and may have no specified roles and goals. Meeting your neighbors over lunch once a month for friendly exchange of news is an instance of an informal group.

Membership and symbolic groups:
A membership groups is one to which a person belongs or qualifies for membership. All workers in a factory qualify for membership to the labor union. A symbolic group is one which an individual aspires to belong to, but is not likely to be received as a member. A head clerk in an office may act as if he belongs to the top management group by adopting their attitudes, values and modes of dress. Both membership and symbolic groups influence consumer behavior but membership groups have a more direct influence. Primary, informal and small groups exert the maximum influence on consumers and are great interest for marketers.

Any of these groups can serve as a reference group for a consumer if it serves as a point of reference or comparison in the formation of the values, attitudes and behavior. As a part of one women social reference group, all member women are eligible to have a free medical insurance or maternity coverage. Different kinds of groups, whether small or large, formal or informal or symbolic qualify as a reference group. The concept of reference group is a very wide one and includes both direct and indirect or group influences.

Indirect reference groups comprise those individuals or groups with whom an individual does not have any direct face-to-face contact. Such as film stars, TV stars, sportsmen, politicians.

Family Life Cycle and Buying Pattern - 1

Why CRM, we are talking here and we talked aspect related with consumer behaviour in our past posts. CRM Software is part of Agency Management System. We are talking Family Life cycle and buying pattern of consumer in last post. Today we continue with that.

Full Nest - Old married couples with dependant children, when a person is in this phase financial positions still better. Spend on education, more tasteful furniture, cars, non-necessary appliances etc.

Empty Nest 1- older married couples, no children living at home, household head still working when a person is in this stage spend on travel, recreation, self-improvement, home-improvement, health care.

Empty Nest 2 - older married, no children at home, head retired - when a person is in this stage drastic reduction in income. Buy medical appliances and medi-care products which aid good health.

Solitary Survivor - In Labor Force - when a person is in this stage likely to sell home, but income still good.

Solitary Survivor - Retired when a person is in this stage Reduce income, spend on medical product.

ref: Insurance CRM Software, SFA Software, Agency Management System

Perception - Selective Distortion -

Perception we are talking here as part of consumer behavior with why crm and agency management system.

Today, we are going to talk about Selective Distortion.

Let us suppose you have decided to purchase a specific brand ‘A’ of pressure cooker. Since you have already made your decision you would seek only that information which reinforces the correctness of your decision.

If you hear some positive remarks made about brand ‘B’ you would tend to find some shortcoming or flaw in that brand so that you do not feel that you have made a wrong decision by buying brand ‘A’. When to fit information to suit your own ideas or personal meaning, the process is known as selective distortion. Thus, a marketer may find that his message is often not received in the intended manner but it is twisted in different ways by different consumers.


ref: crm software and sfa applications, agency management system

Perception - Selective Exposure - CRM

Perception we are talking here as part of consumer behavior which is a part of any agency management system. We talked Types of Consumers, Buyer Vs User, factor influencing consumer behavior, psychological factors , Maslow's Hierarchy of Human Needs, Maslow's Hierarchy of Human Needs -1.

We start our talk with CRM and lead organizer software and we talked CRM, Importance of Consumer Behavior , and Consumer Behavior-Introduction.

Today we are going to talk on Selective Exposure as part of Perception with reference to Consumer Behavior.

You must have noticed that when you are on the look-out for purchasing a specific product, be it camera, refrigerator, television or any other high value product or service, you suddenly, seem to notice more than the usual number of advertisement pertaining to that specific product. This is because of your selective exposure. People are more likely to notice stimuli which relate to their immediate needs. For the marketer, the implication is that he has to carefully and accurately identify his potential customers since other customers are not at all likely to notice the stimuli. Having identified the potential customers, the marketer has to ensure that the stimuli are interesting enough to attract and hold their attention.


ref: CRM & CRM Software, agency management system

Maslow's Hierarchy of Human Needs - Consumer Behaviour

Why CRM? We are talking here. We talked about CRM, Importance of Consumer Behavior , Consumer Behavior---Introduction as a part of leadorganizer and lead management with reference to Why CRM. In our previous post, we talk about Types of Consumers, Buyer Vs User and factor influencing consumer behavior and psychological factors effecting consumer behavior.

Today we are going to talk about Maslow’s Hierarchy of Needs.

All human need can be classified into five hierarchical categories and this hierarchy is universally applicable. These five categories are as under.

1) Physiological Needs.
2) Safety & Security Needs.
3) Social Needs.
4) Ego Needs.
5) Self actualization Needs.
The theory of hierarchy of need was propounded by Abraham Maslow. According to Maslow’s hierarchy all needs can be ranked in order of importance from the low biological need to the higher level psychological needs. Each level of unfulfilled need motivates the individual’s behaviour and as each successive level of need is fulfilled people keep moving on to the next higher level of need.
The different levels of need have been depicted as being water tight compartments. But in reality there is always overlap amongst the different levels of need. Since no need is ever totally satisfied. There is always scope for further fulfillment.

We continue our talk in next post.

ref: crm & sfa software

Psychological Factors-Consumer Behavior

We talk about Importance of Consumer Behavior , Consumer Behavior---Introduction ,CRM as a part of leadorganizer and lead management with reference to crm. In our previous post, we talk about Types of Consumers, Buyer Vs User and factor influencing consumer behavior.


Consumer Needs and Motivations
We all have needs and we consume different goods and services with the expectation that they will help fulfill these needs. When a need is sufficiently pressing, it directs the person to seek its satisfaction. It is known as Motive. All our needs can be classified into two categories-primary and secondary.

Primary need or motives are the physiological need which we are born with, such as the need for air, water, food, clothing, shelter and sex.

The secondary needs are our acquired needs which we have developed in response to the society and environment in which we live. The secondary needs are the result of the individuals’ psychological make-up and his relationship with other members of the society.

The secondary need may include the need of power, prestige, esteem, affection, learning, status etc. Clothing is a primary need for all of us but the need for three piece tweed suit or jean pant o silk kimono are expressions acquired needs. The man wearing a three piece tweed suit may be seeking to fulfill his status need or his ego need by impressing his friends and family.

The theory of hierarchy of need was propounded by Abraham Maslow. We talk on this in our next post.


ref: crm, sfa, lead management, leadorganizer software for insurance industry.