Chapter 6

Examples with illustrations of culture, social and personal factors which can affect marketing activities

Culture
Cultural differences that exist across countries, marketers are also increasingly recognizing the importance of cultural differences within a society. Understanding cultural differences is important to achieve success in any market, let alone on the world business stage.

 Sociologic differences around the world largely outweigh the similarities. People in the global community are influenced and driven by different things. When responding to advertising, some value freedom, reward for effort and an entrepreneurial approach, while others avoid individualism like the plague.
Lack of cultural considerations not only can result in a mediocre response to product promotions, but can even impact the company's international image.

Nestl suffered significant international criticism when a breast milk substitute marketed in Africa was deemed to be the cause of malnutrition in babies. While there was nothing wrong with their product, Nestl was at fault because the company didn't consider the possibility that reduced literacy levels in Africa would result in their breast milk substitute being misused.

Some cultures grimace at the use of terms, symbols or even colors, repugnant in their life experiences. Different colors appeal more in certain countries, particularly in religious societies, than in others. For example, red is very much a color of luck to the Chinese, but a warning sign to many other nationalities. In China, gold is almost always a sign of prosperity and success. The issue of color selection in marketing applies not only to print and media ads, but also to web sites.

Gender is a factor when considering your target market in any country, but in some societies it is more relevant than in others.
If you are selling medical supplies in the Russian Republic today you should be aware the vast majority of Russian doctors are women. However in countries like the U.S., Australia and the U.K. men make up the majority of doctors.

Gender esteem also has significant implications in countries like Japan, Austria and in Arab countries where males often command ultimate decision authority over females. In contrast, in Sweden the female population has a much greater say in purchasing decisions.

Religious beliefs play a significant role in Indian society. Religion influences every aspect of their lives including theirs response and reaction to marketing copy. Motivational selling techniques are considered crass to many Indians while educational, emotive and informative data is more readily accepted.

Social Factors
Social factors are important to consider while creating and implementing a marketing strategy of a company. These often-linked but somewhat different factors have diverse effects on the decisions of consumers and buyers.

Basically, sociocultural factors are customs, lifestyles and values that characterize a society. More specifically, cultural aspects include aesthetics, education, language, law and politics, religion, social organizations, technology and material culture, values and attitudes.
Social factors include reference groups, family, role and status in the society. Small-business owners should be aware of and understand these factors' connection with buying habits.

 These social factors can include aspects such as groups, social networks, online social networking, and so on. In fact, one of the most important social factors that influence consumer buying behavior is the family. The role of the husband, wife, and children can all play a part in what, why, and when a product is bought.

Education and Language

The average level of education in a society affects the interests and sophistication of consumers.
For example, in a community in which a high percentage of potential customers have some form of post-secondary education, small-business owners might use more details and explanations while advertising and promoting products.

The spoken language of the community is a decisive factor on the labeling and advertising of the products. Consider the foreign language skills in the society while advertising.
For example, in Washington, D.C., different transportation companies use English and Spanish on their brochures.

Social Organization
As part of the culture, social organization is the way a society organizes itself, how it considers kinship, status system, social institutions and interest groups. For example, the role of women in a society, whether they are the decisionmakers in shopping, for example, is a decisive factor in marketing. The marketing of a small business can be successful by building its advertising strategy on women or moms, a specific interest group or a leader that has the biggest influence in the community.

Reference Group and Family

Because people are social beings, each person has people around him who influence his decisions in some way. Reference groups comprise people with whom individuals compare themselves. Family members, relatives, neighbors, friends, co-workers and seniors at workplace can form reference groups. Well-known and respected idols in society serve as examples in lifestyle, values and buying habits. Family is a specific reference group and can play the most important role in influencing the buying decisions of the individuals.

Role and Status in Society

A person's role in society and social status affects her buying decisions. Each person plays a dual role in society depending on the group to which she belongs. An individual working as president at a reputed firm is also someones wife and mother at home. The social status is also a relevant factor; an individual from an upper-middle class would spend on luxurious goods, while an individual from a lower income group would buy items required for basic needs. Knowing the income information of the potential customers gives the small-business owner an edge, allowing her to have more information about customer habits and implement a successful marketing strategy.

Personal Factors
1. Occupation The occupation of an individual plays a significant role in influencing his/her buying decision. An individuals nature of job has a direct influence on the products and brands he picks for himself/herself.

2. Age
Age and human lifecycle also influence the buying behaviour of consumers.
Teenagers would be more interested in buying bright and loud colours as compared to a middle aged or elderly individual who would prefer decent and subtle designs.

 A bachelor would prefer spending lavishly on items like beer, bikes, music, clothes, parties, clubs and so on. A young single would hardly be interested in buying a house, property, insurance policies, gold etc. An individual who has a family, on the other hand would be more interested in buying something which would benefit his family and make their future secure.

3. Economic Condition The buying tendency of an individual is directly proportional to his income/earnings per month. How much an individual brings home decides how much he spends and on which products?

Individuals with high income would buy expensive and premium products as compared to individuals from middle and lower income group who would spend mostly on necessary items. You would hardly find an individual from a low income group spending money on designer clothes and watches. He would be more interested in buying grocery items or products necessary for his survival.

4. Lifestyle
Lifestyle, a term proposed by Austrian psychologist Alfred Adler in 1929, refers to the way an individual stays in the society. It is really important for some people to wear branded clothes whereas some individuals are really not brand conscious. An individual staying in a posh locality needs to maintain his status and image. An individuals lifestyle is something to do with his style, attitude, perception, his social relations and immediate surroundings.

5. Personality
An individuals personality also affects his buying behaviour. Every individual has his/her own characteristic personality traits which reflect in his/her buying behaviour.

Give examples to illustrate the five-stage model of buying decision process

Stages in the Consumer Decision Making Process

Problem Recognition
Consumers recognize a problem as a need or want:
Internal stimuli: refers to a personal perception experienced by the consumer, such as hunger, thirst, and so on. External stimuli include outside influences such as advertising or word-of-mouth.

Problem Recognition
Ex:
New fashions, can make people recognize that their current clothing is not in style or up to date. A first year college student may need a personal computer. A recently retired couple may now have the time and money to take a European vacation.

Information search
Consumers search for information that is helpful in making a purchasing decision. Information can be gathered in many ways:
personal sources commercial sources public sources experience sources

Information search
Ex:
A Physician of often learn new drugs from commercial sources but turn to other doctors for evaluation Before buying a car, for example, the consumer may ask friends opinions, read reviews in Consumer Reports, consult several web sites, and visit several dealerships.

Evaluation of alternative
Compare products with respect to their various features and benefits:
brands, styles, sizes, colors, prices, and related services or at different stores

Beliefs and attitudes; expectancy-value model Ex:

When a consumer buy a new laptop, he/she can consider between a Sony Vaio and a Dell laptop by comparing: prices, screen sizes, etc

Purchase Decisions
Consumers have recognized a need, done some research on the product, and evaluated available alternatives. ->ready to make a purchase decision Inventing factors:
Attitude of others Unanticipated situation factors:

Purchase Decisions
Inventing factors:
Attitude of others Unanticipated situation factors:
Functional risk Physical risk Financial risk Social risk Psychological risk Time risk

Postpurchase behavior (Evaluation After Purchase)

How the customer feels, whether he is satisfied or dissatisfied Considering purchase the product again or other products within the brand repertoire.

Example
Tim went to a nearby retail store to buy a laptop for himself. The Need to buy a laptop can be due to any of the following reasons:
His old laptop was giving him problems. He wanted a new laptop to check his personal mails at home. He wanted to gift a new laptop to his wife. He needed a new laptop to start his own business.

Example
The store manager showed Tim all the samples available with him and explained him the features and specifications of each model (information) Tim before buying the laptop checked few other options as well. The information can come from various other sources such as newspaper, websites, magazines, advertisements, billboards etc.

Example
After few rounds of negotiations and comparing product brands, styles, sizes, colors, prices, Tim selected one for himself. After that if Tim satisfied with the product, he will consider buying that brand again However if Tim unsatisfied, he might chose other product

Give examples of risks customers may have in the buying process

Functional risk: the product does not perform up to

expectations

Ex: Food, which can strongly influence consumer choice. consumers are concerned about losing money if a product does not work well In order to reduce risks associated with product purchase, both consumers and marketers have to: Brand loyalty Store loyalty Purchase well-known brands Seeking/offering warranties products Trial before purchase Information seeking/provision

Physical risk: the product poses a threat to the physical well-being or health of the user
consumers think about the potential physical or health dangers associated with a purchase EX: consumers often shy away from buying perishable groceries that have passed the stated expiration date because they are afraid of getting sick from eating spoiled Food.

Financial risk: the product is not worth the price paid

EX: the cost of buying a home. When consumers perceive high product-category risk due to high price levels. Consumers buying decisions can be improved if they might incorporate advice from a variety of sources before make a decision.

Time risk: the failure of the product results in a

opportunity cost of finding another satisfactory product

Ex: if you take your money out of a stock because of a

predicted downturn, you risk the chance of the stock increasing in price before you buy back in. (reflect uncertainties about the length of time must be invested in buying)

time risk may be high, if the offering involves considerable time commitment or if it entails a long commitment period.

Psychological Risk: the product affects the mental well-being of the user
Ex: Sometimes people are concerned that a product may not fit their self-image. This is mainly true for clothing. Did you ever buy a tie or skirt and stop wearing it because it just wasnt you?

Social risk: the product results in embarrassment from others

Ex: When you buy a painting for your living room or some exotic furniture you might be afraid of the social risk. A celebrity endorsement might reduce the social risk. Marketers must ensure that their product is consistent with the self-identity of their prospect and compatible with the prospects social aspirations within their peer group.

Conclusion
Consumers reduce their perceived risk by buying major, well-known brands and/or by engaging in word-of mouth conversations with others before buying to reduce their risk. Alternatively, searching for information on the Web or in publications is a way of reducing risk.