Consumer_Behaviour

[pic] [pic] [pic][pic] December 12th, 2010 Submitted by: Sara Tariq - 5998 Asma Haroon - 6486 Mariam Effendi - 9132 Submitted to: Ms. Aliya Hassan [pic] Acknowledgment [pic] Our term project for the class of consumer behavior fall 2010, entitled “social class, culture and its influence on consumer behavior which was assigned to us by Ms. Aliya Hassan who acted as, project adviser was thoughtful enough to provide us her precious time for which we are obliged and thankful. It will not be out of place to mention that Ms. Aliya Hassan gave us very useful suggestions in our project and for which we are grateful to her from the core of our heart. Letter of Transmittal December 6th, 2010 Ms. Aliya Hassan IoBM, Karachi Respected teacher, We are submitting herewith our report entitled “social class, culture and its influence on consumer behavior, as partial fulfillment of the consumer behavior fall 2010 course requirement. The main purpose of this report is to learn about the importance of culture, sub culture and social class in consumer behavior and to master a set of concepts on how to avoid making cross cultural marketing mistakes. This report shows a detail of the imperativeness of the culture and social class in the study of consumer behavior and the results of poor cross cultural awareness. We hope that this report will merit your approval. Respectfully yours, Asma Haroon Sara Tarik Mariam Effendi Contents INTRODUCTION: 8 Culture and Subculture 10 Dealing with culture 11 Warning about stereotyping 12 Cultural lessons 12 Cultural characteristics as a continuum 13 Hofstede Dimensions 13 • Individualism vs. collectivism: 13 • Power distance: 14 • Masculinity vs. femininity: 14 • Uncertainty avoidance: 14 High vs. Low context cultures: 14 Ethnocentrism and the self-reference criterion 15 Language issues 15 Results of Poor Cross Cultural Awareness 17 25 most unfortunate product names 27 Demographics 32 Segmentation, Targeting, and Positioning 32 The influence of social classes on consumer behavior: 37 Social Factors: 37 The family of procreation 37 Personal Factors: 38 Group Influences 39 Families and Family Decision Making 41 Single vs. Married and living with Spouses’ Families: 41 Value to Traditions: 42 No. of Income/Earnings Contributors in the Family: 43 Decision Influencer in the Family: 43 Conclusion: 46 Bibliography 47 INTRODUCTION: The study of consumers helps firms and organizations improve their marketing strategies by understanding issues such as how: • The psychology of how consumers think, feel, reason, and select between different alternatives (e.g., brands, products, and retailers); • The psychology of how the consumer is influenced by his or her environment (e.g., culture, family, signs, media); • The behavior of consumers while shopping or making other marketing decisions; • Limitations in consumer knowledge or information processing abilities influence decisions and marketing outcome;  • How consumer motivation and decision strategies differ between products that differ in their level of importance or interest that they entail for the consumer; and • How marketers can adapt and improve their marketing campaigns and marketing strategies to more effectively reach the consumer. There are four main applications of consumer behavior: · The most obvious is for marketing strategy—i.e., for making better marketing campaigns. For example, by understanding that consumers are more receptive to food advertising when they are hungry, we learn to schedule snack advertisements late in the afternoon. By understanding that new products are usually initially adopted by a few consumers and only spread later, and then only gradually, to the rest of the population, we learn that: 1. Companies that introduce new products must be well financed so that they can stay afloat until their products become a commercial success. 2. It is important to please initial customers, since they will in turn influence many subsequent customers’ brand choices A second application is public policy. In the 1980s, Accutane, a near miracle cure for acne, was introduced. Unfortunately, Accutane resulted in severe birth defects if taken by pregnant women. Although physicians were instructed to warn their female patients of this, a number still became pregnant while taking the drug. To get consumers’ attention, the Federal Drug Administration (FDA) took the step of requiring that very graphic pictures of deformed babies be shown on the medicine containers. Social marketing involves getting ideas across to consumers rather than selling something. Marty Fishbein, a marketing professor, went on sabbatical to work for the Centers for Disease Control trying to reduce the incidence of transmission of diseases through illegal drug use. The best solution, obviously, would be if we could get illegal drug users to stop. This, however, was deemed to be infeasible. It was also determined that the practice of sharing needles was too ingrained in the drug culture to be stopped. As a result, using knowledge of consumer attitudes, Dr. Fishbein created a campaign that encouraged the cleaning of needles in bleach before sharing them, a goal that was believed to be more realistic. As a final benefit, studying consumer behavior should make us better consumers. Common sense suggests, for example, that if you buy a 64 liquid ounce bottle of laundry detergent, you should pay less per ounce than if you bought two 32 ounce bottles. In practice, however, you often pay a size premium by buying the larger quantity. In other words, in this case, knowing this fact will sensitize you to the need to check the unit cost labels to determine if you are really getting a bargain. Culture and Subculture Culture is part of the external influences that impact the consumer. That is culture represents influences that are imposed on the consumer by other individuals. The definition of culture is that complex whole which includes knowledge, belief, art, morals, custom, and any other capabilities and habits acquired by a person as a member of society. From this definition, we make the following observations: • Culture, as a complex whole, is a system of interdependent components. • Knowledge and beliefs are important parts. In U.S., we know and believe that a person who is skilled and works hard will get ahead. In other countries, it may be believed that differences in outcome result more from luck. The name for China in Chinese, literally means the Middle Kingdom. The belief among ancient Chinese that they were in the center of the universe greatly influenced their thinking. • Other issues are relevant. Art, for example, may be reflected in the rather arbitrary practice of wearing ties in some countries and wearing turbans in others. Notice, by the way, that what at least some countries view as moral may in fact be highly immoral by the standards of another country. For example, the law that once banned interracial marriages in South Africa was named the immorality Act, even though in most civilized countries this law, and any degree of explicit racial prejudice, would itself be considered highly immoral. Culture has several important characteristics: (1) Culture is comprehensive. This means that all parts must fit together in some logical fashion. For example, bowing and a strong desire to avoid the loss of face are unified in their manifestation of the importance of respect. (2) Culture is learned rather than being something we are born with. (3) Culture is manifested within boundaries of acceptable behavior. Failure to behave within the prescribed norms may lead to sanctions, ranging from being hauled off by the police for indecent exposure to being laughed at by others for wearing a suit at the beach. (4) Conscious awareness of cultural standards is limited. One American spy was intercepted by the Germans during World War II simply because of the way he held his knife and fork while eating. (5) Cultures fall somewhere on a continuum between static and dynamic depending on how quickly they accept change. For example, American culture has changed a great deal since the 1950s, while the culture of Saudi Arabia has changed much less. Dealing with culture Culture is a problematic issue for many marketers since it is inherently nebulous and often difficult to understand. One may violate the cultural norms of another country without being informed of this, and people from different cultures may feel uncomfortable in each other presence without knowing exactly why (for example, two speakers may unconsciously continue to attempt to adjust to reach an incompatible preferred interpersonal distance). Warning about stereotyping When observing a culture, one must be careful not to over-generalize about traits that one sees. Research in social psychology has suggested a strong tendency for people to perceive an out-group as more homogenous than an in-group, even when they knew what members had been assigned to each group purely by chance. [pic] Cultural lessons There are several important cultural lessons to be considered. For example, within the Muslim tradition, the dog is considered a dirty animal, so portraying it as man’s best friend in an advertisement is counter-productive. Packaging, seen as a reflection of the quality of the real product is considerably more important in Asia than in the U.S., where there is a tendency to focus on the contents which really counts. [pic] Cultural characteristics as a continuum There is a tendency to stereotype cultures as being one way or another (e.g., individualistic rather than collectivistic). However, countries fall on a continuum of cultural traits. Hofstede research demonstrates a wide range between the most individualistic and collectivistic countries. Hofstede Dimensions Gert Hofstede, a Dutch researcher, was able to interview a large number of IBM executives in various countries, and found that cultural differences tended to center around four key dimensions: Individualism vs. collectivism: To what extent do people believe in individual responsibility and reward rather than having these measures aimed at the larger group. Contrary to the stereotype, Japan actually ranks in the middle of this dimension, while Indonesia and West Africa rank toward the collectivistic side. The U.S., Britain, and the Netherlands rate toward individualism. Power distance: To what extent is there a strong separation of individuals based on rank. Power distance tends to be particularly high in Arab countries and some Latin American ones, while it is more modest in Northern Europe and the U.S. Masculinity vs. femininity: It involves a somewhat more nebulous concept. masculine values involve competition and conquering nature by means such as large construction projects, while feminine values involve harmony and environmental protection. Japan is one of the more masculine countries, while the Netherlands rank relatively low. The U.S. is close to the middle, slightly toward the masculine side. The fact that these values are thought of as masculine or feminine does not mean that they are consistently held by members of each respective gender, there are very large within-group differences. There is, however, often a large correlation of these cultural values with the status of women. Uncertainty avoidance:  It involves the extent to which a structured situation with clear rules is preferred to a more ambiguous one; in general, countries with lower uncertainty avoidance tend to be more tolerant of risk. Japan ranks very high. Few countries are very low in any absolute sense, but relatively speaking, Britain and Hong Kong are lower, and the U.S. is in the lower range of the distribution. Although Hofstede original work did not address this, a fifth dimension of long term vs. short term orientation has been proposed. In the U.S., managers like to see quick results, while Japanese managers are known for take a long term view, often accepting long periods before profitability is obtained. High vs. Low context cultures: In some cultures, we see is what you get the speaker is expected to make his or her points clear and limit ambiguity. This is the case in the U.S. if you have something on your mind, you are expected to say it directly, subject to some reasonable standards of diplomacy. In Japan, in contrast, facial expressions and what is not said may be an important clue to understanding a speaker meaning. Thus, it may be very difficult for Japanese speakers to understand another written communication. The nature of languages may exacerbate this phenomenon while the German language is very precise, Chinese lacks many grammatical features, and the meaning of words may be somewhat less precise. English ranks somewhere in the middle of this continuum. Ethnocentrism and the self-reference criterion The self-reference criterion refers to the tendency of individuals, often unconsciously, to use the standards of one’s own culture to evaluate others. For example, Americans may perceive more traditional societies to be backward and unmotivated because they fail to adopt new technologies or social customs, seeking instead to preserve traditional values. In the 1960s, a supposedly well read American psychology professor referred to Indian culture because, despite severe food shortages, the Hindu religion did not allow the eating of cows. The psychologist expressed disgust that the cows were allowed to roam free in villages, although it turns out that they provided valuable functions by offering milk and fertilizing fields. Ethnocentrism is the tendency to view one culture to be superior to others. The important thing here is to consider how these biases may come in the way in dealing with members of other cultures. There is a tendency of outsiders to a culture to overstate the similarity of members of that culture to each other. In the United States, there is a great deal of heterogeneity within our culture; however, we often underestimate the diversity within other cultures. For example, in Latin America, there are great differences between people who live in coastal and mountainous areas; there are also great differences between social classes. Language issues Language is an important element of culture. It should be realized that regional differences may be subtle. For example, one word may mean one thing in one Latin American country, but something off-color in another. It should also be kept in mind that much information is carried in non-verbal communication. In some cultures, we nod to signify yes and shake our heads to signify no; in other cultures, the practice is reversed. Within the context of language: · There are often large variations in regional dialects of a given language. The differences between U.S., Australian, and British English are actually modest compared to differences between dialects of Spanish and German. · Idioms involve figures of speech that may not be used, literally translated, in other languages. For example, baseball is a predominantly North and South American sport makes sense here, but the term does not carry the same meaning in cultures where the sport is less popular. · Neologisms involve terms that have come into language relatively recently as technology or society involved. With the proliferation of computer technology, for example, the idea of an add-on became widely known. It may take longer for such terms to diffuse into other regions of the world. In parts of the world where English is heavily studied in schools, the emphasis is often on grammar and traditional language rather than on current terminology, so neologisms have a wide potential not to be understood. · Slang exists within most languages. Again, regional variations are common and not all people in a region where slang is used will necessarily understand this.  Different perspectives exist in different cultures on several issues. For e.g. · Monochromic cultures tend to value precise scheduling and doing one thing at a time; in polychromic cultures, in contrast, promptness is valued less, and multiple tasks may be performed simultaneously. · Space is perceived differently. Americans will feel crowded where people from more densely populated countries will be comfortable. · Symbols differ in meaning. For example, while white symbols purity in the U.S., it is a symbol of death in China. Colors that are considered masculine and feminine also differ by culture. · Americans have a lot of quite shallow friends toward whom little obligation is felt; people in European and some Asian cultures have fewer, but more significant friends. For example, one Ph.D. student from India, with limited income, felt obligated to try buy an airline ticket for a friend to go back to India when a relative had died. · In the U.S. and much of Europe, agreements are typically rather precise and contractual in nature; in Asia, there is a greater tendency to settle issues as they come up. As a result, building a relationship of trust is more important in Asia, since you must be able to count on your partner being reasonable. · In terms of etiquette, some cultures have more rigid procedures than others. In some countries, for example, there are explicit standards as to how a gift should be presented. In some cultures, gifts should be presented in private to avoid embarrassing the recipient; in others, the gift should be made publicly to ensure that no perception of secret bribery could be made. Results of Poor Cross Cultural Awareness Having a poor understanding of the influence of cross cultural differences in areas such as management, PR, advertising and negotiations can eventually lead to blunders that can have damaging consequences. It is crucial for today's business personnel to understand the impact of cross cultural differences on business, trade and internal company organization. The success or failure of a company, venture, merger or acquisition is essentially in the hands of people. If these people are not cross culturally aware then misunderstandings, offence and a breakdown in communication can occur. The need for greater cross cultural awareness is heightened in our global economies. Cross cultural differences in matters such as language, etiquette, non-verbal communication, norms and values can, do and will lead to cross cultural blunders. Cross cultural blunders that could have been avoided with appropriate cross cultural awareness training are as following: 1. Locum is a Swedish company. As most companies do at Christmas they sent out Christmas cards to customers. In 1991, they decided to give their logo a little holiday spirit by replacing the "o" in Locum with a heart. [pic] 2. The Japanese company Matsushita Electric was promoting a new Japanese PC for internet users. Panasonic created the new web browser and had received license to use the cartoon character Woody Woodpecker as an interactive internet guide. The day before the huge marketing campaign, Panasonic realized its error and pulled the plug. The ads for the new product featured the following slogan:  "Touch Woody - The Internet Pecker." The company only realized its cross cultural blunder when an embarrassed American explained what "Touch Woody's Pecker" could be interpreted as! 3. The Swedish furniture giant IKEA somehow agreed upon the name "FARTFULL" for one of its new desks. [pic] 4. In the late 1970s, Wang, the American computer company could not understand why its British branches were refusing to use its latest motto "Wang Cares". Of course, to British ears this sounds too close to "Wankers" which would not really give a very positive image to any company. [pic] 5. There are several examples of companies getting tangled up with bad translations of products due to the word "mist". "Irish Mist" (an alcoholic drink), "Mist Stick" (a curling iron from Clairol) and "Silver Mist" (Rolls Royce car) all flopping as "mist" in German means dung/manure. Fancy a glass of Irish dung. 6. "Traficante" and Italian mineral water found a great reception in Spain's underworld. In Spanish it translates as "drug dealer". [pic] 7. In 2002, Umbro the UK sports manufacturer had to withdraw its new trainers (sneakers) called the Zyklon. The firm received complaints from many organizations and individuals as it was the name of the gas used by the Nazi regime to murder millions of Jews in concentration camps. [pic] 8. Sharwoods, a UK food manufacturer, spent £6 million on a campaign to launch its new 'Bundh' sauces. It  received calls from numerous Punjabi speakers telling them that "bundh" sounded just like the Punjabi word for "arse". 9. Honda introduced their new car "Fitta" into Nordic countries in 2001. If they had taken the time to undertake some cross cultural marketing research they may have discovered that "Fitta" was an old word used in vulgar language to refer to a woman's genitals in Swedish, Norwegian and Danish. In the end they renamed it "Honda Jazz". 10. A nice cross cultural example of the fact that all pictures or symbols are not interpreted the same across the world: staff at the African port of Stevadores saw the "internationally recognized" symbol for "fragile" (i.e. broken wine glass) and presumed it was a box of broken glass. Rather than waste space they threw all the boxes into the sea. [pic] 11. Pepsodent tried to sell its toothpaste in Southeast Asia by emphasizing that it "whitens your teeth." They found out that the local natives chew betel nuts to blacken their teeth which they find attractive. 12. Bacardi concocted a fruity drink with the name 'Pavian' to suggest French chic ... but 'Pavian' means 'baboon' in German. 13. In 1995, Nintendo has set the gaming world on fire with their new DS system, built entirely around its touch screen. A Korean company wanting to make a piece of dictionary software that takes advantage of the touch screen capabilities. Touch Dictionary just needed to shorten it up, to make it snappier, something cool that the kids will remember, hence “Touch Dic.” [pic] 14. The American Dairy Association's huge success with its campaign "Got Milk'" prompted them to expand advertising to Mexico. It was soon brought to their attention that the Spanish translation read "Are you lactating'" 15. When Gerber first started selling baby food in Africa, they used the same packaging as in the USA -- with a cute baby on the label. Later they found out that in Africa, companies routinely put pictures on the label of what is inside since many people cannot read! 16. A company advertised eyeglasses in Thailand by featuring a variety of cute animals wearing glasses. The ad was a poor choice since animals are considered to be a form of low life and no self respecting. Thai would wear anything worn by animals. [pic] 17. The soft drink Fresca was being promoted by a saleswoman in Mexico. She was surprised that her sales pitch was greeted with laughter, and later embarrassed when she learned that fresca is slang for "lesbian." 18. A soft drink was introduced into Arab countries with an attractive label that had stars on it--six-pointed stars. The Arabs interpreted this as pro-Israeli and refused to buy it. Another label was printed in ten languages, one of which was Hebrew--again the Arabs did not buy it. In addition to interpersonal cross cultural gaffes, the translation of documents, brochures, advertisements and signs also offer some comical cross cultural blunders. 19. Kellogg had to rename its Bran Buds cereal in Sweden when it discovered that the name roughly translated to "burned farmer." 20. When PepsiCo advertised Pepsi in Taiwan with the ad "Come Alive With Pepsi" they had no idea that it would be translated into Chinese as "Pepsi brings your ancestors back from the dead." 21. American medical containers were distributed in Great Britain and caused quite a stir. The instructions to "Take off top and push in bottom," innocuous to Americans, had very strong sexual connotations to the British. 22. In Italy, a campaign for Schweppes Tonic Water translated the name into "Schweppes Toilet Water." 23. United Airlines unknowingly got off on the wrong foot during its initial flights from Hong Kong.  To commemorate the occasion, they handed out white carnations to the passengers.  When they learned that to many Asians white flowers represent bad luck and even death, they changed to red carnations 24. A famous drug company marketed a new remedy in the United Arab Emirates. To avoid any mistakes they used pictures. The first picture was of someone ill, the next picture showed the person taking the medication, the last picture showed them looking well. What they forgot is that in the Arab world people read from right to left! [pic] In conclusion, poor cross cultural awareness has many consequences, some serious others comical. It is imperative that in the global economy cross cultural awareness is seen a necessary investment to avoid such blunders. 25 most unfortunate product names [pic] [pic] Severe Acute respiratory Syndrome (SARS) [pic] [pic] [pic] [pic] [pic] [pic] [pic] [pic] [pic] [pic] [pic] [pic] [pic] [pic] [pic] [pic] [pic] [pic] [pic] [pic] [pic] [pic] [pic] [pic] Demographics Several issues are useful in the structure of a population. For example, in some rapidly growing countries, a large percentage of the population is concentrated among younger generations. In countries such as Korea, China, and Taiwan, this has helped stimulate economic growth, while in certain poorer countries, it puts pressures on society to accommodate an increasing number of people on a fixed amount of land. Other countries such as Japan and Germany, in contrast, experience problems with a "graying" society, where fewer non-retired people are around to support an increasing number of aging seniors. Because Germany actually hovers around negative population growth, the German government has issued large financial incentives, in the forms of subsidies, for women who have children. In the United States, population growth occurs both through births and immigration. Since the number of births is not growing, problems occur for firms that are dependent on population growth (e.g., Gerber, a manufacturer of baby food). Social class is a somewhat nebulous subject that involves stratifying people into groups with various amounts of prestige, power, and privilege. In part because of the pioneering influence in American history, status differentiations here are quite vague. We cannot, for example, associate social class with income, because a traditionally low status job as a plumber may today come with as much income as a traditionally more prestigious job as a school teacher. In certain other cultures, however, stratification is more clear-cut. Although the caste system in India is now illegal, it still maintains a tremendous influence on that society. While some mobility exists today, social class awareness is also somewhat greater in Britain, where social status is in part reinforced by the class connotations of the accent with which one speaks. Segmentation, Targeting, and Positioning  Segmentation, targeting, and positioning together comprise a three stage  process. We first (1) determine which kinds of customers exist, then (2) select which ones we are best off trying to serve and, finally, (3) implement our segmentation by optimizing our products/services for that segment and communicating that we have made the choice to distinguish ourselves that way. [pic] Segmentation involves finding out what kinds of consumers with different needs exist. In the auto market, for example, some consumers demand speed and performance, while others are much more concerned about roominess and safety. In general, it holds true that you can be all things to all people, and experience has demonstrated that firms that specialize in meeting the needs of one group of consumers over another tend to be more profitable. Generically, there are three approaches to marketing: 1. In the undifferentiated strategy, all consumers are treated as the same, with firms not making any specific efforts to satisfy particular groups. This may work when the product is a standard one where one competitor really can offer much that another one can. Usually, this is the case only for commodities. 2. In the concentrated strategy, one firm chooses to focus on one of several segments that exist while leaving other segments to competitors. For example, Southwest Airlines focuses on price sensitive consumers who will forego meals and assigned seating for low prices. 3. In contrast, most airlines follow the differentiated strategy: They offer high priced tickets to those who are inflexible in that they cannot tell in advance when they need to fly and find it impractical to stay over a Saturday. These travelers usually business travelers pay high fares but can only fill the planes up partially. The same airlines then sell some of the remaining seats to more price sensitive customers who can buy two weeks in advance and stay over. Segmentation calls for some tough choices. There may be a large number of variables that can be used to differentiate consumers of a given product category; yet, in practice, it becomes impossibly cumbersome to work with more than a few at a time. Thus, we need to determine which variables will be most useful in distinguishing different groups of consumers. We might thus decide, for example, that the variables that are most relevant in separating different kinds of soft drink consumers are (1) preference for taste vs. low calories, (2) preference for Cola vs. non-cola taste, (3) price sensitivity willingness to pay for brand names; and (4) heavy vs. light consumers. We now put these variables together to arrive at various combinations.   Several different kinds of variables can be used for segmentation. · Demographic variables essentially refer to personal statistics such as income, gender, education, location (rural vs. urban, East vs. West), ethnicity, and family size. Campbell soup, for instance, has found that Western U.S. consumers on the average prefer spicier soups thus, you get a different product in the same cans at the East and West coasts. Facing flat sales of guns in the traditional male dominated market, a manufacturer came out with the Lady Remmington, a more compact, handier gun more attractive to women. Taking this a step farther, it is also possible to segment on lifestyle and values. · Some consumers want to be seen as similar to others, while a different segment wants to stand apart from the crowd. · Another basis for segmentation is behavior. Some consumers are brand loyal i.e., they tend to stick with their preferred brands even when a competing one is on sale. Some consumers are heavy users while others are light users. For example, research conducted by the wine industry shows that some 80% of the product is consumed by 20% of the consumers resumably a rather intoxicated group. · One can also segment on benefits sought, essentially bypassing demographic explanatory variables. Some consumers, for example, like scented soap (a segment likely to be attracted to brands such as Irish Spring), while others prefer the clean feeling of unscented soap (the ivory segment). Some consumers use toothpaste primarily to promote oral health, while another segment is more interested in breath freshening. In the next step, we decide to target one or more segments. Our choice should generally depend on several factors. First, how well are existing segments served by other manufacturers. It will be more difficult to appeal to a segment that is already well served than to one whose needs are not currently being served well. Secondly, how large is the segment, and how can we expect it to grow. Thirdly, do we have strengths as a company that will help us appeal particularly to one group of consumers Firms may already have an established reputation. While McDonald has a great reputation for fast, consistent quality, family friendly food, it would be difficult to convince consumers that McDonald now offers gourmet food. Thus, McDonald would probably be better off targeting families in search of consistent quality food in nice, clean restaurants. Positioning involves implementing our targeting. For example, Apple Computer has chosen to position itself as a maker of user-friendly computers. Thus, Apple has done a lot through its advertising to promote itself, through its un-intimidating icons, as a computer for on-geeks. [pic] To effectively attempt repositioning, it is important to understand how one brand and those of competitors are perceived. One approach to identifying consumer product perceptions is multidimensional scaling. Here, we identify how products are perceived on two or more dimensions allowing us to plot brands against each other. It may then be possible to attempt brand in a more desirable direction by selectively promoting certain points. There are two main approaches to multi-dimensional scaling. In the a priori approach, market researchers identify dimensions of interest and then ask consumers about their perceptions on each dimension for each brand. This is useful when: (1) The market researcher knows which dimensions are of interest. (2) The customer perception on each dimension is relatively clear. In the similarity rating approach, respondents are not asked about their perceptions of brands on any specific dimensions. Instead, subjects are asked to rate the extent of similarity of different pairs of products (e.g., How similar on a scale of 1-7 is Snicker to Kit-Kat and how similar is Toblerone to Three Musketeers). Using a computer algorithms, the computer then identifies positions of each brand on a map of a given number of dimensions. The computer does not reveal what each dimension mean as that must be left to human interpretation based on what the variations in each dimension appears to reveal. This second method is more useful when no specific product dimensions have been identified as being of particular interest or when it is not clear what the variables of difference are for the product category. The influence of social classes on consumer behavior: Social classes show distinct product and brand preferences in such areas as clothing, home furnishings, leisure activity, and automobiles. Social Factors: A consumer’s behavior is also influenced by social factors, such as the consumer’s small groups, family, and social roles and status. Because these social factors can strongly affect consumer responses, companies must take them into account when designing their marketing strategies. · Groups - a person’s behavior is influenced by many small groups. Groups which have a direct influence and to which a person belongs are called membership groups. References groups are groups that serve as direct or indirect points of comparison or reference in the forming of a person’s attitudes or behavior. Marketers try to identify the reference groups of their target markets. The importance of group influence varies across products and brands, but it tends to be strongest for conspicuous purchases. · Family - family members can strongly influence buyer behavior. We can distinguish between two families in the buyer’s life. The buyer’s parents make up the family of orientation. From parents a person acquires an orientation toward religion, politics, and economics and a sense of personal ambition, self-worth, and love. The family of procreation- the buyer’s spouse and children-exert a more direct influence on everyday buying behavior. The family is the most important consumer buying organization in society, and it has been researched extensively. Marketers are interested in the roles and relative influence of the husband, wife, and children on the purchase of a large variety of products and services. · Roles and Status - a person belongs to many groups-family, clubs, organizations. The person’s position in each group can be defined in terms of both role and status. A role consists of the activities people are expected to perform according to the persons around them. Each role carries a status reflecting the general esteem given to it by the society. Personal Factors: a buyer’s decisions are also influenced by personal characteristics such as the buyer’s age and life-cycle stage, occupation, economic situation, life style, personality and self-concept. Age and Life-Cycle State - people change the goods and services they buy over their lifetimes. Buying is also shaped by the stage of the family life cycle-the stages through which families might pass as they mature over time. Marketers often define their target markets in terms of life-cycle stage and develop appropriate products and marketing plans. Occupation - a person’s occupation affects the goods and services bought. Marketers try to identify the occupational groups that have an above-average interest in their products and services.  A company can even specialize in making products needed by a given occupational group. Economic Situation - a person’s economic situation will greatly affect product choice. Marketers of income-sensitive goods closely watch trends in personal income, savings, and interest rates. If economic indicators point to a recession, marketers can take steps to redesign, reposition, and re-price their products. Life Style - people coming from the same subculture, social class, and even occupation may have quite different life styles. Life style is a person’s pattern of living as expressed in his or her activities, interests, and opinions. Life style captures something more than the person’s social class or personality. The life-style concept, when used carefully, can help the marketer gain an understanding of changing consumer values and how they affect buying behavior. Personality and Self-Concept - each person’s distinct personality will influence his or her buying behavior. Personality refers to the unique psychological characteristics that lead to relatively consistent and lasting responses to one’s own environment. Many marketers use a concept related to personality-a person’s self-concept. Psychological Factors: A person’s buying choices are also influenced by four major psychological factors - motivation, perception, learning, and beliefs and attitudes. Motivation - a person has many needs at any given time. Some needs are biological, arising from states of tension such as hunger, thirst, or discomfort. Other needs are psychological, arising from the need for recognition, esteem, or belonging. Most of these needs will not be strong enough to motivate the person to act at a given point in time. A need becomes a motive when it aroused to a sufficient lever of intensity. A motive is a need that is sufficiently pressing to direct the person to seek satisfaction. Motivation researchers collect in-depth information from small samples of consumers to uncover the deeper motives for their product choices. Group Influences Humans are inherently social animals, and individuals greatly influence each other. A useful framework of analysis of group influence on the individual is the so called reference group—the term comes about because an individual uses a relevant group as a standard of reference against which oneself is compared. Reference groups come in several different forms. · The aspirational reference group refers to those others against whom one would like to compare oneself. For example, many firms use athletes as spokespeople, and these represent what many people would ideally like to be. · Associative reference groups include people who more realistically represent the individuals’ current equals or near-equals—e.g., coworkers, neighbors, or members of churches, clubs, and organizations. Paco Underhill, a former anthropologist turned retail consultant and author of the book Why We Buy has performed research suggesting that among many teenagers, the process of clothes buying is a two stage process. In the first stage, the teenagers go on a "reconnaissance" mission with their friends to find out what is available and what is "cool." This is often a lengthy process. In the later phase, parents who will need to pay for the purchases are brought. This stage is typically much briefer. Finally, the dissociative reference group includes people that the individual would not like to be like. For example, the store literally named The Gap came about because many younger people wanted to actively dissociate from parents and other older and "uncool" people. The Quality Paperback Book Cluspecifically suggests in its advertising that its members are "a breed apart" from conventional readers of popular books. Reference groups come with various degrees of influence. Primary reference groups come with a great deal of influence—e.g., members of a fraternity/sorority. Secondary reference groups tend to have somewhat less influence—e.g., members of a boating club that one encounters only during week-ends are likely to have their influence limited to consumption during that time period. Another typology divides reference groups into the informational kind (influence is based almost entirely on members’ knowledge), normative(members influence what is perceived to be "right," "proper," "responsible," or "cool"), or identification. The difference between the latter two categories involves the individual’s motivation for compliance. In case of the normative reference group, the individual tends to comply largely for utilitarian reasons—dressing according to company standards is likely to help your career, but there is no real motivation to dress that way outside the job. In contrast, people comply with identification groups’ standards for the sake of belonging—for example, a member of a religious group may wear a symbol even outside the house of worship because the religion is a part of the person’s identity. Families and Family Decision Making One of the most important factors that influences consumer buying behaviors is the family structure. The factors related to families that influence a consumer’s decisions are: * Whether a consumer comes from a large family or a small one Or the family structure is based on conventional/ traditional values or modern updated liberal values Or the consumer is a single parent or married with kids. * If both the parents are working or the family in based on just One-Income earning household. * Who influences the family decisions at the time of purchase or use of any product. All these factors vary in an East to West culture. The likelihood of families headed by single parents in more in the west then in the east and therefore, the culture and lifestyle differs accordingly. Single vs. Married and living with Spouses’ Families: Now the kind of lifestyle a family has when being brought up in a family headed by a single parent is more fast paced, career oriented, cost conscious and individualistic. As far as families raised by married spouses is concerned, the consumers are more towards family values, value occasions and events that highlight the family togetherness, comparatively less fast paced and looking for things that can accommodate the entire family then just the individual. For example: A person with a large family, when buying a car would see how much people a car can accommodate, and how safe it is and buy accordingly (i.e. a family car) rather than just thinking about what clicks to him/her, such as the “The Ford Galaxy MPV and The Renault Grand Scénic,” respectively. [pic] [pic] Value to Traditions: Families living in west value traditions less and are more inclined towards adopting a life style that breaks free of the usual norms of the society and choices are mostly based on individual preferences and done in a non-conventional way, rather than following the traditions as is the case with Eastern families. Example: A woman wearing a black wedding gown on her wedding rather than white in a Western Society. Breaking the Norms: Wedding Gown Designer Martin Grant. [pic] [pic] The same kind of example can be given about Ramadan In East. The families unite with each other, open their fasts at the same time on the same dinner table, and certain food associations are formed with usage at such traditional occasions such as Rooh Afzah in Ramadan, Cadbury Celebrations “Kuch meetha ho jaye” at the time of happy family occasions such as weddings, birthdays, etc. No. of Income/Earnings Contributors in the Family: This is a very important factor in consumer buying behavior. If a family is based on a single person earning in the family, then the most important thing is cost effectiveness and value for money from any items being consumed. Such families are more necessity-based consumption families. As for the families that have more than one income contributor in the house, their life in more inclined towards luxury, ease of living and such people are more inclined towards trying out various more expensive brands. Eastern and Middle Eastern countries are more towards a single income contributor’s side while western countries’ lifestyle is based on more than one income contributor. Decision Influencer in the Family: Individual members of families often serve different roles in decisions that ultimately draw on shared family resources. Some individuals are information gatherers/holders, who seek out information about products of relevance. These individuals often have a great deal of power because they may selectively pass on information that favors their chosen alternatives. Influencers do not ultimately have the power decide between alternatives, but they may make their wishes known by asking for specific products or causing embarrassing situations if their demands are not met. The decision makes have the power to determine issues such as: · Whether to buy · Which product to buy (pick-up or passenger car) · Which brand to buy · Where to buy it and · When to buy For example: A mother is usually responsible for buying groceries for home, but her decision of buying the product will be influenced by the choice of her children. Such as Cereal. If a mother likes whole wheat honey cereal but her children who hold influence on her shopping like chocolate flavored cereal, then she would buy a cereal , which maybe whole wheat but having a chocolate flavor. Same goes a husband and a wife influence. A wife may have a great deal of influence over what her husband purchases for himself and the family such as E-cigarettes. Social Class and Consumer behavior: Social Class * Social class—a status hierarchy by which groups and individuals are classified on the basis of esteem and prestige.—American Marketing Association * A social class is a group of people whom other members of the community see as equal to one another in social prestige and whom others believe to be superior or inferior in prestige to other groups that constitute the social classes below them or above them (Warner). Other Definitions * Relatively permanent and homogenous divisions in a society in which individuals or families sharing similar values, lifestyles, interests, and behavior can be categorized. * Measures typically are a combination of demographic identifiers which are correlated with product bought, values held, etc. Types of Social Classes: 1) Upper Class 2) Upper-Middle Class 3) Lower-Middle Class 4) Lower Class How a person’s social class can be assessed' Social class judgements can be passed on the basis of: * Occupation: What a person does for a living; It is an indicator of other signs of class membership: income, personal associations, and status. Other then the personal performance of a person also comes under occupation. * Income Source: Level of income is not by itself a good indicator of class. Income source along with occupation may help us determine whether two individuals that have the same income belong in the same class: investments, inheritance, old wealth, etc. * Possessions & Education. How Social Class Affect Consumer Behavior' It affects the products people buy: clothing, home furnisihings and appliances. Certain brands are associated with specific social classes (occupations, educ, etc). Example: Media Use * Lower-class people are less likely to subscribe to newspapers than are members of the middle class. Choice of magazine is likely tied to education and reading ability * Lower-middle class— Women‘s Own, Ladies Home Journal * Upper-middle class—Time, The New Yorker, Reader’s Digest etc. Broadcast media choice also varies by social class * Upper-middle class—NBC vs. lower-middle class: CBS * Lower-middle class—more responsive to audiovisual forms of communication Social Class: Shopping Upper-class women are the most “impulsive” about shopping Outlet choice varies by social class Upper-lower class women are likely to respond to promotions offering coupons or other special inducement. Conclusion: Markets must be understood before marketing strategies can be developed. The consumer market buys goods and services for personal consumption. Consumers vary tremendously in age, income, education, tastes and other factors. Marketers must understand how consumers transform marketing and other inputs into buying responses. Consumer behavior is influenced by the buyer’s characteristics and by the buyer’s decision process. Buyer characteristics include four major factors: cultural, social, personal, and psychological. A person’s buying behavior is the result of the complex interplay of all these cultural, social, personal, and psychological factors. Many of these factors cannot be controlled by marketers, but they are useful in identifying and understanding the consumers that marketers are trying to influence. These factors help in designing the marketing mix of products and brands before they are brought into the market by studying these social and cultural factors and hence, predict the sales and outcome of the products In the market accordingly. Bibliography Wikipedia http://www.kwintessential.co.uk/cultural-services/articles/Results%20of%20Poor%20Cross%20Cultural%20Awareness.html http://www.kwintessential.co.uk/cultural-services/articles/crosscultural-marketing.html http://crab.rutgers.edu/~ckaufman/ConsumerbehaviorSocialClassRefGroupNotes.html www.Consumerpsychologist.com ----------------------- CULTURE, SUB-CULTURE, SOCIAL CLASS & ITS INFLUENCE ON CONSUMER BEHAVIOUR [Type the document title]