Consumer Behaviour

Module – 5
Dr Virupaksha Goud

Topics to be covered :
External Influences on Consumer Behaviour: Part 1 A) Social Class: Social Class Basics, What is Social
Class? (Social class & Social status, the dynamics of status consumption, Features of Social Class, Five
Social-Class Categories in India B) Culture and Subculture - Major Focus on Indian Perspective
Culture: Basics, Meaning, Characteristics, Factors affecting culture, Role of customs, values and
beliefs in Consumer Behaviour. Subculture: Meaning, Subculture division and consumption pattern
in India, Types of subcultures (Nationality subcultures, Religious subcultures, Geographic and
regional subcultures, racial subcultures, age subcultures, sex as a subculture) Cross-cultural
consumer analysis: Similarities and differences among people, the growing global middle class;
Acculturation is a needed marketing viewpoint, applying research techniques Cross-cultural
marketing strategy: Cross-cultural marketing problems in India, Strategies to overcome cross-
cultural problems.

Social Class Basics

Social class is defined as the division of members of a society into a hierarchy of distinct status
classes, so that members of each class have relatively the same status and members of all other
classes have either more or less status.

Social Class and Social Status

Researchers often measure social class in terms of social status; that is, they define each social class
by the amount of status the members of that class have in comparison with members of other social
classes. In social class research, status s frequently thought of as the relative rankings of members of
each social class in terms of specific status factors. For eg. Relative wealth, power and prestige are
three status factors frequently used when estimating social class.

The Dynamics of Status Consumption

It is the process by which consumers endeavour to increase their social standing through
conspicuous consumption and possessions. A number of research studies validated a status
consumption scale :
A Five-Question Status Consumption Scale
1. I would buy a product just because it has status.
2. I am interested in new products with status.
3. I would pay more for a product if it had status.
4. The status of a product is irrelevant to me.
5. A product is more valuable to me if it has some snob appeal.
The development of such measures are important, for as the market for luxury or status products
continues to grow, there is an even greater need for marketers to identify and understand which
consumers especially seek out such status-enhancing possessions, as well as the relationship
between status consumption and social class.

Measurement of Social Class

Single –variable indexes
1) Occupation : It is observed that business executives and professionals who are self-
employed or entrepreneurs are substantially more likely to be very wealthy than their
counterparts who work for someone else.
 2) Education : The more education a person has, the more likely it is that the person is well
paid and has an admired or respected position.
3) Income : Individual or family income is another socioeconomic variable frequently used to
approximate social class standing.
Social-class profiles
THE UPPER UPPER CLASS
 Small number of well established families
 Belongs to best clubs and sponsor major charity events.
 Serve as trustees for major colleges and hospitals
 Accustomed to wealth, so do not spend money conspicuously.
THE LOWER-UPPER CLASS
 Not quite accepted by upper class of society
 Represent ‘new money’
 Successful business executives
 Conspicuous users of their new wealth
THE UPPER-MIDDLE CLASS
 Have neither family status nor unusual wealth
 Career oriented
 Successful professionals, corporate managers and business owners.
 Most are college graduates, many with advanced degrees
 Have a keen interest in obtaining the ‘better things in life’
 Their homes serve as symbols of their achievements
THE LOWER MIDDLE CLASS
 Primarily non-managerial white-collar workers and highly paid blue collar
workers.
 Want their children to be well-behaved
 Religious
 Prefer a neat and clean appearance and tend to avoid highly styled clothing
THE UPPER-LOWER CLASS
 Solidly blue collar
 View work as a means to buy enjoyment
 High wage earners in this group may spend impulsively
 Interested in items that enhance their leisure time
THE LOWER-LOWER CLASS
 Poorly educated, unskilled labourers
 Often out of work
 Children are often poorly treated
 Tend to live a day to day existence

Consumer Behavior Applications of Social Class

 Clothing, Fashion and Shopping : Most people dress to fit their self-image, which includes
their perceptions of their own social-class membership. People tend to avoid stores that
have the image of appealing to a social class very different from their own.
 Saving, Spending and Credit : Upper class consumers are more future oriented, they are
more willing to invest in insurance, stocks And real estate. Lower class consumers are
generally more concerned with immediate gratification.
 Social Class and Communication : Higher social-class members tend to prefer current events
and drama, whereas lower class individuals tend to prefer soap operas, quiz shows and
comedies. Higher class consumers tend to have greater exposure to magazines and
newspapers than do their lower-class counterparts. Lower class consumers are likely to have
 greater exposure to publications that dramatize romance and the lifestyles of movie and
television celebrities.

Features of Social Class

 Social classes are based on many components and not only on income and occupation,
though income and occupation influence the determination of social class in many
developed and developing economies.
 Social classes are hierarchical that is, from high status to low status.
 Social class restrict behaviour and interaction between the classes is limited. As a result of
this, members of the same social class are inclined to associate and interact with each other.
 Social classes are homogeneous. Based on similarity of factors such as education, activities,
interests, opinions, attitudes and other behavioural patterns, social classes are viewed as
homogeneous divisions of a society.
 Social classes are dynamic and social stratification are of two types. In a closed system,
people are born into a social class, and cannot leave it; they inherit a status. In an open
system, people have some opportunity to move upward or downward from one social class
to another.
Five Social Class Categories in India
1. Upper class – 4.3%
2. Upper-middle class – 13.8%
3. Middle class – 32.8%
4. Lower middle class – 32.3%
5. Lower class – 16.8%
Upper Class : The upper class of most societies is a varied group of individuals who include
the aristocracy, the new social elite and the upper middle class. Aristocracy consists of
traditional old money families who acquired great wealth and power and whose members
live on inherited wealth such as old business families. The new social elite are those who
have acquired a great deal of wealth and status in their own lifetimes.
They tend to buy items that are known to be high-priced and can be publicly consumed or
displayed such as expensive cars, watches and designer dresses.

The middle Class : This class is composed of primarily white-collar workers at managerial
levels, moderately successful professionals such as doctors, lawyers, professors, owners of
medium sized businesses and graduates who are likely to reach occupational status levels
within a few years. This social class is generally large.

The Lower Class : They are poor people and generally represent a sizable population,
particularly in the poorer developing countries. A large number of households in the poor
class category live below the poverty line.

Culture : Basics
Culture is the sum total of learned beliefs, values, and customs that serve to direct the
consumer behaviour of members of a particular society.
Characteristics
1. Culture is invented : It cannot be viewed as something that just exists and is waiting to be
discovered. People are responsible for inventing their culture and this invention consists of
ideas, values, beliefs and skills, arts and crafts.
 2. Culture is learnt : It is not like biological features or instinctive. The process of learning
cultural values begins early in life largely through social interactions among family
members, friends, in educational and religious institutions.
3. Culture is shared : By a fairly large group of human beings living in organised societies and
works as a linking force. American culture is shared by a large number of other countries
through the availability of such products as Coca Cola, McDonalds Burger etc.
4. Culture satisfies needs : Culture offers order, direction and guides societies in all phases of
life by providing tried and trusted ways of meeting physiological, personal and social needs
and due to these reasons people feel comfortable in doing things in the customary way.
5. Cultures are similar but different : There are certain similarities among all cultures and
many elements are present in all societies such as adornment of body, cooking food,
calendar, family, language, religious rituals, dancing , music and many other elements.
There are however, very significant variations in the nature of these elements in different
societies.
6. Culture is not static : These changes, however may be very slow in some cultures while
others may be more dynamic and receptive to changes.

Factors influencing Culture

 New Technology : eg. Mobile Phone Culture
 Population Shifts : Rajasthani people shifting from Rajasthan to Bangalore
 Resource Shortages : Solar Energy Culture
 Wars
 Changing Values
 Customs Borrowed from other Culture

Cultural Values
Cultural Values are enduring beliefs that a given behaviour or outcome is desirable or good. Our
values, as enduring beliefs serve as standards that guide our behaviour across situations and over
time. Social values represent normal behaviour for a society or group. Personal values define normal
behaviour for an individual. Milton J Rokeach and his Rokeach Value Scale (RVS) had largely
influenced early researches concerning cultural values. RVS is used by asking respondents to rank
the importance of goals and ways of conduct that can be analysed by ethnicity, religion, age, gender
or any other variables that might be of interest in consumer analysis. Many researchers have linked
personal values to brand preference, product usage and market segmentation.

Indian Core Values

Family Orientation : Family for an Indian not only includes one’s own family but also the extended
family-parents, siblings,grandparents etc.
Savings Orientation : Savings is still an inherent value of Indians; given the uncertainty in income
generation. Most Indian families have to depend on personal savings for their living after retirement
and for their medical expenses all through their lives.
Festivities : Celebrating festivals is very much a part of India’s culture in all the states. A number of
consumers postpone their purchases, especially durables, in the hope of getting deals. Tanishq came
out with Rakhi in gold on Raksha Bandhan.
Shopping as a Ritual : The type of buyers, the shops they buy from, and the products they purchase
vary across geographical territories and the economic spectrum of consumers.
Mythology : Mythological stories, scriptures and music are an inherent part of the Indian culture.
Food Habits : Hot , spicy delicacies are popular in India.

Subculture
A distinct cultural group that exists as an identifiable segment within a larger, more complex society.
Thus the cultural profile of a society or nation is a composite of two distinct elements 1) the unique
beliefs, values and customs subscribed to by members of specific subcultures.; and 2) the central or
core cultural themes that are shared by most of the population, regardless of specific subcultural
memberships.

Dominant
Subcultural Subcultural
Cultural
traits of Traits of
Traits of
Protesthans Roman
Christians
Catholics

Aspects of Sub-cultures
1. Sub-cultural distinctiveness : When a sub-culture strives harder to maintain a separate
identity, its potential influence is more. For eg. Indians settled in many countries have
maintained their language and religious practices as a means of cultural identity.
2. Sub-cultural homogeneity : A sub-culture with homogeneous values is more likely to exert
influence on its members. For eg. Hindus, Muslims and Sikhs of Indian origin appear to be
members of separate sub-cultures.
3. Sub-cultural exclusion : At times sub-cultures are excluded by society. Even today in India,
scheduled castes are excluded from upper caste society.

Nationality Subcultures
Nationality is an important subcultural reference that guides what they value and what they buy.
This is especially true for the population of a country like the United States that has a history of
attracting people from all over the globe. When it comes to consumer behaviour, this ancestral pride
is manifested most strongly in the consumption of ethnic foods, in travel to the homeland, and in
the purchase of numerous cultural artifacts.
Examples of Major Subcultural Categories
Categories Examples
Nationality Greek, Italian, Russian
Religion Catholic, Hindu
Geographic region Eastern, Southern, Southwestern
Race African, American, Asian
Age Teenagers, Elderly
Gender Female, Male
Occupation Bus driver, cook, scientist
Social Class Lower, middle, upper.
Religious Subcultures
Of 200 different organized religious subcultures, Protestant denominations, Roman Catholicism, and
Judaism are the principal organized religious faiths. The members of all these religious groups at
times are likely to make purchase decisions that are influenced by their religious identity.
Commonly, consumer behaviour is directly affected by religion in terms of products that are
symbolically associated with the celebration of various religious holidays. For eg. Christmas has
become the major gift-purchasing season of the year.
Geographic and Regional Subculture
Anyone who has travelled across the country, has probably noted many regional differences in
consumption behaviour, especially when it comes to food and drink. For eg. A mug of black coffee
typifies the West, while a cup of coffee with milk and sugar is preferred in the East. There also are
geographic differences in the consumption of a staple food item such as rice and Chapati. For eg. In
North Wheat Chapati is generally preferred whereas in South rice is a staple food. Festivals
celebrated are also different when we travel from North to South and from East to West.

Racial Subcultures
The major racial subcultures are Anglo-Indians, African American and American Indian. Although
differences in lifestyle and consumer spending patterns exist among these groups, they show a vast
majority of differences in consumer behaviour.

Age Subcultures
Age subcultures are limited to four age groups from youngest to oldest : Generation Y (Born
between the years 1977 and 1994), Generation X ( born between 1965 and 1979), Baby Boomers
(Age segment of the population that was born between 1946 and 1964), and Seniors (60-65 Years
old).
Generation Y
Spends money lavishly, grown up in a media saturated environment, Internet savvy.
Generation X
Purchase good brand names, Style in music fashion and language.
Baby Boomers
Motivated consumers, Enjoy buying for themselves, for their homes or apartments and for others
(Consumption oriented).
Elders
Leads a lavish life, major purchasers of luxury products such as cars, alcohol, vacations and financial
products.
Sex as a Subculture
Aggressiveness and competitiveness are considered as muscular traits whereas, neatness,
tactfulness, gentleness and talkativeness are considered feminine traits.
Shaving equipment, cigars, pants, ties and work clothing are purchased by males, whereas bracelets,
hair dryers, hair spray and sweet smelling colognes are purchased by females.
Role of women in todays’ world is changing . More of working women are there and so the spending
and consumption pattern of the women are changing. Marketers are also targeting tehm in
advertisement because of the change in their role.

Cross Cultural Consumer Analysis

To determine whether and how to enter a foreign market, marketers need to conduct some form of
cross-cultural analysis. Cross Cultural consumer analysis is defined as the effort to determine to what
extent the consumers of two or more nations are similar or different.

Similarities and Differences among people

A major objective of cross-cultural consumer analysis is to determine how consumers in two or more
societies are similar and how they are different. Such an understanding of the similarities and
differences that exist between nations is critical to the multinational marketer who must devise
appropriate strategies to reach consumers in specific foreign markets. The greater the similarity
between nations, the more feasible it is to use relatively similar marketing strategies in each nation.

The growing global middle class

The growing middle class in developing countries is a phenomenon that is very attractive to global
marketers who are often eager to identify new customers for their products. The news media has
given considerable coverage to the idea that the rapidly expanding middle class in countries of Asia,
South America, and Eastern Europe is based on the reality that, although per capita income may be
low , there is nevertheless largely discretionary income. This means that a middle class Indian family
is a target customer for YVs, VCRs and Computers.
The rather rapid expansion of middle class consumers over the past 50 years have attracted the
attention of many well established marketing powerhouses, who were already finding their home
markets to be rather mature and reaching what was felt to be saturation point in terms of sales
opportunities.

The Global Teen Market

Teenagers appear to have quite similar interests , desires and consumption behaviour no matter
where they live due to advanced technology, social networking sites, instant messaging and blogs.

Acculturation is a needed marketing viewpoint

Acculturation is a process of learning the culture of foreign countries in which we want to expand
our business. Too many marketers contemplating international expansion make the strategic error
of believing that if its product is liked by local or domestic consumers, then everyone will like it. To
overcome such a narrow and culturally myopic view, marketers must also go through an
acculturation process. They must learn everything that is relevant about the usage or potential
usage of their products and product categories in the foreign countries in which they plan to
operate.
Acculturation is a dual process for marketers. First marketers must thoroughly orient themselves to
the values, beliefs, and customs of the new society to appropriately position and market their
products. Secondly, to gain acceptance for a culturally new product in a foreign society , they must
develop a strategy that encourage members of that society to modify or break with their own
traditions.

Alternative Multinational Strategies

Some marketers have argued that world markets are becoming more and more similar and that
standardized marketing strategies are therefore becoming more feasible. For eg. Exxon Mobil has
launched a 150million $ marketing campaign to promote its brands and the firm wants all the ads to
carry the same look and feel regardless of the country in which it is aired. In contrast, other
marketers feel that differences between consumers of various nations are far too great to permit a
standardized marketing strategy and thus have localized marketing strategies.

Adaptive Global Marketing

Some firms embrace a strategy that adapts their advertising messages to the specific values of
particular cultures . McDonalds is an example of a firm that tries to localize its advertising and other
marketing communications to consumers in each of the cross cultural markets in which it operates,
making it a glocal company. For eg. The Ronald McDonald that we all know has been renamed
Donald McDonald in Japan, because the Japanese language does not contain the R sound.
Additionally for Indian Market, they made changes in their menu from a pork or Beef hamburger to
Mc Aloo Tikki.