Consumer Behaviour

Consumer Behaviour

This course contains the basics of Consumer Behaviour

Course introduction
Test Your Caliber
Interview Questions
Pragnya Meter Exam

Consumer Behaviour


The family is a major influence on the consumer behaviour of its members. There are many examples of how the family influences the consumption behaviour of its members. A child learns how to enjoy candy by observing an older brother or sister; learns the use and value of money by listening to and watching his or  her parents. Decisions about a new car, avacation trip, or whether to go to a local or an out-of-town college are consumption decisions usually made within the context of a family setting. The family commonly provides the opportunity for product exposure and trial, and imparts consumption values to its members. As a major consumption unit, the family is also a prime target  for  the marketing of manyproducts and services.

Family Life Cycle and Buying Roles
It is important for a marketeer to know the family structure and its consumption characteristics.He should be able to understand the family which is a subset of a household. A household ismade up of persons who live and occupy a housing unit. These include both, nuclear and extendedfamilies. A household is a basic consumption unit for most consumable goods. Major itemssuch as housing, automobiles, electrical appliances, washing machine, etc. are used more byhouseholds than individuals. In a household, many items can be shared and possessed, whereasindividuals some times do not posses many such items individually.

Family types
Nuclear family: It consists of two adults of opposite sex living in a socially approved sexrelationship with their children. It consists of husband, wife and their offspring. Joint family: It includes a nuclear family and other relatives such as parents of husband/wife, aunts, uncles, and grandparents, also.

Family Buying Influences

Family is a social group. It is also an earning, consuming and decision-making unit. All purchasesare influenced by family members. Family is a closely-knit unit, and the bonds in afamily are more powerful than in other groups. A reciprocal influence operates in all familydecisions. There are three main influences which are father, mother and other family members.Every member has his own motives, beliefs and predisposition to the decision process.Every member is influenced and influences other family members. There is a reciprocal influenceexerted in the decision process other family members. It becomes important for a marketer to sort out all family influences, and formulate a strategy for effective marketing.

Consumer socialisation is the process by which young people acquire the skills, knowledgeand attitudes relevant to their functioning as consumers. Interactions take place in afamily which develops tastes, preferences, shopping styles, choice of clothes to wear. Howmuch money to spend, where to buy from, what to use at which occasions. The figure showshow a consumer is socialised. There are a number of background factors like the age, sex,social class, etc. Then there are the socialising agents from whom they learn. These are media,family members, peers and teachers.

These influence the learning mechanism and the result is a socialised consumer. Advertising and promotional activities have a strong influence on consumer socialisation. It can alsobe done by the family members through:

  • Instrumental training: In this the parent teaches the children the value of food, whichto consume which to keep away from. What choice is to be made for clothes, whatproducts to refrain from. How to avoid dysfunctional behaviour.
  • Modeling: When a child learns the behaviour by observing others. It can be consciouslyor subconsciously learnt. One such example is smoking.
  • Mediation: To make the children realise the facts by discussion, or by demonstration,or by any other method available.

Inter-generational Influences
By this we mean that children learn from their fathers and fore fathers. A child is influenced through generations, which develop religious and cultural values. The attitudes are developed towards sports, leisure, education, social life. This is known as the intergenerational carry over. Children learn to use products and services used by their family members, mostly parents and grand parents and some take pride in it too.
Family Decision-making
In a family there is the
Instrument role: Taken by the head of the family for the achievement of special goals.
Expressive role: Undertaken by the wife and other family members to provide emotional support
The concept of intergenerational carry over
Important buying roles are:

  1. The instigator (initiator): Person who first suggests the idea of a product/service and initiates the purchase process.
  2. The influencer: Person having direct/Indirect influences, on final purchase decision.
  3. The decider: Person who makes the final decision.
  4. The purchaser (buyer): Person who actually purchases the product, pays for it, takes it home.
  5. The consumer: User of goods/service. 

Family Decision Stages

  1. Problem recognition
  2. Search for information
  3. Evaluation of alternatives
  4. Final decision

Husband-wife influence studies, classify consumer decisions as:
Wife-dominant decisions, e.g., food, purchase of groceries. Husband-dominant decisions, e.g., automobiles, life insurance. Syncratic decisions (joint), e.g., vacations, choice of schools for children. Automatic decisions (unilateral)
Decisions may either be:
Consensual: Everyone in the family may agree with the desired outcome.
Accommodative: Need conflict resolution by persuasion or bargaining.
Element of power within the family is obtained from:
Economic resources: Persons making greater economic contribution have more economic power.
Cultural norms: In a male dominated society husband has greater powers.
Expert power: More knowledge a person possess. Husband may know more about cars wife may know more about household items.
Legitimate power: This depends on the role the family members play.
Bargaining power: Power through give and take method.
Reward/referent power: Giving rewards to others which are liked and appreciated. Emotional power: Purchase decisions are influenced by emotions, sentiments and feelings of one partner.

The Family life cycle stages

  1. The bachelor stage—young and single.
  2. The newly married couples—young, no children.
  3. Full nest 1—young, married, with child.
  4. Full nest 2—older, married, with children.
  5. Full nest 3–older, married, with dependent children.
  6. Empty nest—older, married, with no children living with them.
  7. Solitary survivor—older, single, retired people.

1.Young Singles
Young singles may live alone, with their nuclear families, or with friends, or they may co-habitate with partners-translating into a wide range of how much disposable income is spent on furniture, rent, food, and other living expenses in this stage .Although earnings tend to be relatively low, these consumers usually don’t have many financial obligations and don’t feel the need to save for their futures or retirement. Many of them find themselves spending as much as they make on cars, furnishings for first residences away from home, fashions, recreation,alcoholic beverages, food away from home, vacations, and other products and services involved in the dating game. Some of these singles may have young children, forcing them to give up
2. Newly married couples:
Newly married couples without children are usually better off financially than they were when they were single, since they often have two incomes available to spend on one household. These families tent to spend a substantial amount of their income son cars, clothing, vacations, and other leisure activities. They also have the highest purchase rate and highest average purchases of durable good (particularly furniture and appliances) and appear to be more susceptible to advertising.
3. Full Nest I:
With the arrival of the first child, parents being to change their roles in the family, and decide if one parent will stay to care for the child or if they will both work and buy daycare services .Either route usually leads to a decline in family disposable income and a change in how the family spends its income. In this stage, families are likely to move into their first home;purchases furniture and furnishings for the child; buy a washer and dryer and home maintenance items; and purchase new items such as baby food, cough medicine, vitamins, toys, sleds,and skates. These requirements reduce families’ ability to save,and the husband and wife are often dissatisfied with their financial position.
4. Full Nest II
In this stage, the youngest child has reached school age, the employed spouse’s income has improved, and the other spouse often returns to part-or full-time work outside the home. Consequently, the family’s financial position usually improves,but the family finds itself consuming more and in larger quantities. Consumption patterns continue to be heavily influenced by the children, since the family tends to buy large-sized packages of food and cleaning suppliers, bicycles, music lessons, clothing, sports equipment, and a computer. Discount department stores (such as Cost co and Sam’s Club) are popular with consumers in this stage.
5. Full Nest III
As the family grows older and parents enter their min-40s, their financial position usually continues to improve because the primary wage earner’s income rises, the second wage earner is receiving a higher salary, and the children earn spending an education money from occasional and part-time employment.The family typically replaces some worn pieces of furniture,purchases another automobiles, buys some luxury appliances,and spends money on dental services (braces) and education .Families also spend more on computers in this stage, buying additional PCs for their older children. Depending on where children go to college and how many are seeking higher education, the financial position of the family may be tighter than other instances
6. Empty nest
Older married with no children living with them. Financial position stabilizes and there is no expense on children. The couple is free to enjoy their own pursuits and spend on luxury or self-improvement items and medical care.
7. Solitary survivor
Older single retired people. Retired people living alone after the death of a partner. Life becomes lonely and income may reduce due to retirement. This again changes the consumption pattern and living style of old people.

Another point to note, is that the family life cycle concept segments the families on the basis of demographic variables, and ignores the psychographics variables (families interest and opinions) of family members. Family life cycle is also related to the spare time and the available income, education, etc. A marketer has to take these elements into consideration.

The stages at which families find themselves, affect the nature of the goods and services required, their wants and consumption patterns, as well as the volume of consumption on specific products. The traditional view of the family life cycle has been criticized for failing to recognize that a single family unit may not exist throughout the life of an individual. Families may be created by second marriages, and these may involve children from prior marriages. The traditional model also ignores the existence of single parent households. The modern family lifecycle which takes into account the existence of working women, is a more complex and more useful model than the traditional model.

Marketing strategy for family decision-making
It is realized that various purchasing tasks are performed by various members of the family.The products are bought for joint use of the family. Refrigerator, TV, sofa set, car, etc. The product is to be purchased by family funds where more than one person may be contributing to the fund. Sometimes the funds are not enough and other products may have to be sacrificed town an expensive product. Some family members may not be agreeable to the choice made for the product, and may consider it as a profligate expenditure. These are the main influences in the family decision making, which are the outlets preferred by the family members for the purchase of the product. All the above considerations are important, and once all this is known strategy can be formulated in a better manner.

Personal Influences

Each individual receives the information and processes and evaluates the product in his own way. This is irrespective of the family, social class or cultural heritage etc. His own personality ultimately influences his decision. He has his own personal reasons for likes, dislikes, price,convenience or status. Some individuals may lay greater emphasis on price, others on quality and still others on status, symbol, convenience of the product etc. Personal influences go a long way in the purchase of a product. The personal influences can be linked to the following:

  • Age and life cycle stage

Bachelor, married.
Full Nest I, II
Empty Nest I, II
Solitary Survivor

  • Occupation, Blues Collar, White Collar.
  • Economic Circumstances

High Income Group
Low Income Group
Middle Income Group

  • Life Style --- Pattern of Living.
  • Personality --- It is an internal determinant which influence our consumption patterns.
  • Self concept --- How one perceives himself and his behavior.

Personal influence is the effect or change in a person’s attitude or behavior as a result of communication with others.
The change in behavior may be influenced by communication. It may be source initiated(by the influencer) or recipient oriented by the influence).

  • Communication may result in one-way or two-way influence i.e., The individual may influence while being influenced.
  • Communication resulting in influence may be verbal or visual.

Personal influence is synonymously used as word-of-mouth, although the word-of-mouths only a verbal communication. Word of mouth communication is more effective than advertising whether it is product or services. The executives of the Paramount Motion Pictures has remarked that “Word of mouth is the most important Marketing element that exists. “There can be ‘Synthetic’ or simulated word of mouth (When celebrities talk to us on T. V. It creates a situation as if they have entered our house and are actually talking to us). The other is the real word of mouth. Both can be very convincing. The communication should be positive, to be effective. The word of mouth of communications strong because:

  • Consumers view word of mouth as trustworthy information which helps in making better decisions.
  • Personal contacts provide special support and give a stamp of approach to a purchase which is not the case in Mass Media.
  • The information provided is backed by social group pressures and forces the purchase.

When choosing the products and services consumers are also influenced by advice fro mother people. Today 80% of all buying decision are influenced by some one’s direct recommendation .Decision such as which Air Conditioner to buy, which Movie to see. There are a lot of interaction which helps the individual to make decisions. An individual can also be personally influenced by neighbors, friends, co-workers, acquaintances. Those who influence are the opinion leaders and those who are influenced are opinion receivers.

Personal influences are dependant on the process of communication. For a long time marketing communication was a one-way process media which was dissipated by opinioned. Audience now are not passive receivers of communication but take active part in the two-way communication.

The verbal flow of communication and personal influence may take between a source and receiver in the following stages:

  1. Source initiated–one-way influence
    “Ram told me how good his Fridge was, so I decided to buy one”.
  2. Receiver initiated–two-way influence
    “I asked Ram what brand of Fridge he recommends”
  3. Source initiated–two-way influence
    “I showed my cupboard to Ram. He got interested and said that he would buy one bassoon as possible”.
  4. Receiver initiated–two-way influence
    “I asked Ram what he know about electric ranges. We had a nice discussion of the features of various brands”.

Opinion leaders exert their opinion on individuals
Opinion leaders are persons who informally give product information and advise to others.
Opinion leaders are persuasive and they influence the individuals in a number of ways:

  • The Opinion leaders are Credible and give free information which is genuine and can be trusted.
  • They give both Positive and Negative information.
  • They give neutral comments as well. The negative information is given only when it is very necessary.
  • They give information and advice. They may talk about their experiences with a product,give advice to others to buy or avoid a specific product. The advice, such as:
  • Which product is the best.
  • How to best use a specific product.
  • Where to shop.
  • Who provides the best service.

Opinion leaders give categorically specific information. They specialize in certain specific products on which they give information e.g., automobiles, white goods, consumable products etc.
Opinion leaders do a two-way job
An opinion leader may also himself get influenced and personal influences by word of mouth may be uncontrollable. Although, it is believed that word of mouth communication is extremely effective, but informal communication is hard to control.
There are certain rum our themes that adversely affect the personal behavior of the consumers, these can be:

  • The product was produced under unsanitary conditions.
  • The product has culturally unacceptable ingredient.
  • The product has undesirable depressant or stimulant.
  • The product has a cancer-causing element.
  • The firm was owned by a misguided or misguided foreign country etc.

Word of mouth is used by telephones to remove misconception of consumers who have been dissatisfied with the product. Their dissatisfaction removal is the job of the marketeer.All these are ways by which personal influences are affected and personal influences make the consumer to take his own decision.