MODULE 2

ENVIRONMENTAL INFLUENCES

ENVIRONMENTAL INFLUENCES
{PERCEPTION & CB}

CONSUMER PERCEPTION
PERCEPTION is ? How we see things. When exposed to the same object, people see it differently depending on their: 1. Expectations 2. Needs & 3. background

GESTALT THEORY
According to Kohler, Kolfka & Wertheimer:

A complex phenomenon can not be broken down or reduced to simpler components for analysis & understanding, due to the effect of wholeness, which is more than the sum . Thus an object in its complete form has a bigger impact. The phenomenon is called Gestalt theory.

3 basic things to be understood

The impact of background like music, color etc.-

consumers have tendency to develop a relation b/w object & background. Ground figure reversal should be avoided Perception of the image as a group- people tend to remember the object in totality as a group of things seen or heard. The principle of closure- consumers tend to fill in the blanks based on their prior experience. Eg tag lines of certain products.

Zeigernik effect
Closure principle encourages audience

participation. Research prove that consumer feels the need to hear or see the rest of the initial message , because sense of having closure prevails. This is called Zeigernik effect.

3 processes of selectivity

1. 2. 3.

We do not respond to most of the millions of stimuli we are subject to everyday due to : Selective exposure Selective distortion Selective retention

Selective exposure

1. 2. 3.

It is the process by which people avoid stimuli in their environment in following 3 ways: People are more likely to notice stimuli that relates to current need. eg- loan rates People are more likely to notice stimuli that they expect or anticipate. Eg- petrol pump services People are more likely to notice stimuli that are large in relation to normal size of stimuli. Eg- whole page colored ad.

Selective distortion
It is the process in which individual compares new information with his or her existing knowledge store or frame of reference , & in case of inconsistency alters new information to confirm to the established beliefs.

Selective retention
Its the phenomenon of retaining in

memory only part of what is perceived & the information that supports their existing attitudes & beliefs. For eg- ads of the bank of which an individual is already a member.

Factors affecting perception of stimuli

These are 4 factors: 1. Social factors 2. Cultural factors 3. Psychological factors 4. Personal factors Of these 1st & 2nd are external & 3rd & 4th are internal.

CONSUMER DECISION MAKING FRAMEWORK

FACTORS

SOCIAL FACTORS

FAMILY INFLUENCE

ROLES & STATUS

CULTURAL FACTORS

PSYCOLOGICAL FACTORS

PERSONAL FACTORS

REFERENCE GROUP INFLUENCE

BELIEFS & ATTITUDE CULTURE SUB CULTURE

LEARNING
AGE & FAMILY LIFE ECONOMIC CYCLE CIRCUMSTANCES

PERSONALITY SOCIAL CLASS

OCCUPATION

Social factors
1.
2. 3.

Family influence Reference Group influence Roles & status.

CULTURE
is part of the external influences
a complex whole, is a system of

interdependent components. includes knowledge, belief, art, morals, custom,

Culture
The sum total of learned beliefs, values,

and customs that serve to regulate the consumer behavior of members of a particular society.

Important characteristics of culture

is comprehensive. This means that all parts must fit together in some logical fashion Culture is learned rather than being something we are born with. Displayed by boundaries of acceptable behavior. is a problematic issue for many marketers as it is often difficult to understand. One may violate the cultural norms of another country unknowingly. Guides our behavior Is Enduring

Hofstedes Dimensions

1. 2.

3.
4.

Gert Hofstede, a Dutch researcher, interviewed a large number of IBM executives in various countries, and found that cultural differences tended to center around four key dimensions: Individualism vs. collectivism Power distance Masculinity vs. femininity Uncertainty avoidance

Individualism vs. collectivism

To what extent do people believe in individual

responsibility and reward rather than having these measures aimed at the larger group? Japan ranks in the middle of this dimension, Indonesia and West Africa rank toward the collectivistic side. 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, modest in Northern Europe and the U.S.

Masculinity vs. femininity

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.

Uncertainty avoidance
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, the U.S, Britain and Hong Kong are lower.

a fifth dimension
long term vs. short term orientation In the U.S., managers like to see quick results, while Japanese managers are known to take a long term view, often accepting long periods before profitability is obtained.

Cultural meaning and Role of Product Symbolism

Consumers buy the product for Symbolism rather than

its utility

Role of Product Symbolism

Communicating Social status

Means of self Expression

Means of sharing Experiences Products are hedonics e.g. Jewelleries Products are experiential

Cultural Factors that Affect Consumer Behavior and Marketing Strategy

Language

Demographics Consumer behavior Values

Marketing strategy

Nonverbal communications

Issues in Culture
Enculturation-Learning about own

culture Acculturation-Learning about different culture Language and symbols Ritual Sharing of Culture

Contd.
Sub Culture A Broad groups of

consumers with similar values that distinguish them from Society as a whole. Cross culture- A Broad groups of consumers having different values that distinguish them from Society as a whole

Subculture defined..

David Arnold A subdivision of national culture, composed of a combination of factorable social situations such as class status, ethnic background, region & religious affiliation, but forming in their combination a functioning unit which has an integrated impact on the participating individual.

SUB-CULTURE
is a group of people with different ideologies

and usually fashion and music tastes than that of the larger culture they are a part of. Many subcultures also detach from the "mainstream A subculture normally has a different style of clothing, hair, music and a different personality to another subculture

Sub-culture & its relevance

They maintain their identity by possessing different beliefs, different 1. 2. 3. 4.

ways of doing the same thing . Bases of subculture: Geographic region Religion Age Gender These segments may not be distinct but overlapping.

Few examples
Goths: are people who like death.

Emos: hate their lives so much that they get depressed ,they enjoy self harm because they believe it's the only thing they feel.
Scenes: like emos but they like colourful things. Punks: like to disobey orders and breaking all the rules.

Typical Subcultures

a. b. c.

TypesGeographic Subcultures Religion Age CohortsGen X Gen Y Baby Boomers Mature Market

Age subculture
Various bases: youth, elderly, family life

cycle. Further subdivisions teenagers, adolescents, bachelors, parenthood etc. Elderly market more rational than emotional purchases, quality valued more, return on money is expected more. Different basket of products required.

Gender subculture
Bases like males, females, newer

ones- gays, others etc. Views change regarding same object, attitude, motivation etc. Traditional roles changing Product attributes need to be changed according to the targeted category.

Religious subculture
6 broad religious

Hindu
Muslim Christians Sikh

groups & 2 reserved groups exist in India Guides the rituals at birth, marriage, death etc. Essential items required, dress, household items, lifestyle etc. affected by religion.

Buddhist
Jain S.C S.T

82.72% 11.2% 2.59% 1.89% 0.71% 0.48% 14.6% 6.94%

Selected Rituals and Associated Artifacts

SELECTED RITUALS Wedding Birth of child Birthday TYPICAL ARTIFACTS Designer clothes, branded gold jewelry, consumer durable combo packs, catering n marriage halls Child savings plan, baby products, gold ornaments Card, present, cakes, candles

50th Wedding anniversary

Valentines Day

Catered party, card and gift, photo frames with photos of the couples life together
Candy, card, flowers

New Years Eve

Inauguration of house Religious ceremony

Champagne, party, fancy dress

Bouquets, home-dcor items, photo frames, wallclock sticks, pooja packs, silver or designer idols Incense

Geographic subculture
As per 71 census, 15 major

Hindi 208.51
Bengali Telugu Marathi Tamil 31.69 Urdu Gujarati Malayalam Kannada

languages are spoken in India. (Figures are in millions.)

Relevance for marketer- food

44.79 44.76 41.77 28.62 25.87 21.94 21.71 14.11 8.96 2.5 1.68 2212 prsn

habits, special festivals, kinds of gifts, home decoration. Lifestyle is majorly affected by region.

Oriya 21.71
Punjabi Assamese Kashmiri Sindhi Sanskrit

Age Cohorts
Mature market (Over 55 years old)
Baby Boomers (Born Between 1946 &

1964) Gen X (Born Between 1965 and 1976) Gen Y (1977 and 1994)

Social Class
The division of members of a society into a hierarchy of distinct status classes, so that members of each class have either higher or lower status than members of other classes. Status is frequently thought of as the relative rankings of members of each social class wealth power prestige

Inter-personal influences
1.
2. 3.

Family influence Reference Group influence Roles & status.

Reference groups
any person or group that serves as a

point of comparison or reference for an individual in the formation of either general or specific values, attitudes or behavior.

Advantages of groups
Act as a motivator
Solves the problems Provides various approaches to the

situation Circulates the information Increases acceptance

Disadvantages of groups
Co-ordination costs time & money
Dominance Conflicts

Untimely decisions
Diffusion of responsibility

Types of groups
Contactual group- holds a membership, or a

regular face-to-face contact, approves values etc. Aspirational doesnt have relationship, but aspires to have, has a positive impact Disclaimant holds membership, but disapproves values etc. Avoidance neither has membership nor aspires, behavior opposite to this group.

Application of group influence on CB

Use of celebrities for product

endorsements Use of experts for product endorsements Use of spokesperson for product endorsements.

FAMILY INFLUENCE
Most important & fundamental influence
Families act as purchasing units Indian units are different from their western

counterpart Eldest member who is not the bread earner can decide on the way of bringing up children Children adopt a particular purchasing behavior due to family influence.

Roles & status

Roles are patterns of needs, goals, beliefs,

attitudes, values & behavior- expected from a person on a particular position in society. An individual swipes over various roles when in various situations. Each role affects the behavior of the person while doing purchases for that very role.