Consumer Behavior

1. What is Consumer Behavior?

o Definition:

▪ Consumer behavior refers to the study of how individuals, groups, and organizations select,
purchase, use, and dispose of products, services, or ideas to satisfy their needs and wants.

▪ It involves psychological (cognitive) and emotional (affective) processes that affect decisions.

▪ Example: Deciding to buy a phone involves considering factors like price (cognitive) and brand
appeal (emotional).

2. Why Study Consumer Behavior?

o Understanding why and how consumers make choices helps marketers design better products and
campaigns.

o It allows businesses to predict trends, needs, and consumer reactions to their offerings.

3. Compulsive vs. Impulsive Buying Behavior:

o Compulsive Buying:

▪ A psychological urge to purchase, often linked with emotional imbalance or stress.

▪ Uncontrollable and repetitive, even if the items purchased aren’t needed.

▪ Example: A person buying clothes frequently to cope with anxiety.

o Impulsive Buying:

▪ Driven by emotions and instant gratification.

▪ Often occurs in response to a trigger (e.g., seeing a “limited-time offer” banner).

▪ Example: Adding items to the cart during a flash sale without planning to buy them initially.

o Marketing Influence:

▪ Promotions, discounts, and emotional appeals encourage both compulsive and impulsive
buying behaviors.
Stages in the Decision-Making Process:
1. Problem Recognition:

▪ This is the starting point, where the consumer realizes a need or problem.

▪ Example: A consumer recognizes that their old phone is no longer functioning well.

▪ Types of Needs:

▪ Functional Needs: Practical (e.g., a car for transportation).

▪ Psychological Needs: Emotional (e.g., a luxury watch to feel successful).

2. Information Search:

▪ Internal Search: Using existing knowledge and experiences.

▪ External Search: Seeking recommendations from external sources (e.g., online reviews, family,
advertisements).

▪ Sources of Information:

▪ Personal Sources: Friends, family, peers.

▪ Mass Media: Social media, websites, forums.

▪ Marketing Communications: Advertisements, promotional displays.

3. Evaluation of Alternatives:

▪ Consumers compare various products and services based on features, quality, and price.

▪ Example: A consumer compares multiple smartphone brands before choosing one.

▪ Evaluation Criteria:
 ▪ Objective Criteria: Technical specifications, price.

▪ Subjective Criteria: Brand reputation, design.

4. Purchase Decision:

▪ After evaluating options, the consumer selects the product that best meets their needs.

▪ High vs. Low Involvement:

▪ High-Involvement Purchase: Requires significant research (e.g., buying a house).

▪ Low-Involvement Purchase: Routine purchases (e.g., buying groceries).

5. Post-Purchase Behavior:

▪ Consumers assess whether the product met their expectations.

▪ Post-Purchase Dissonance: Anxiety or regret about the purchase decision (also called buyer’s
remorse).

▪ Example: Feeling unsure after buying an expensive phone and wondering if a cheaper one
would have been enough.

Types of Buying Behavior

Four Types of Buying Behavior:

1. Habitual Buying Behavior:

▪ Consumers purchase the same product regularly out of habit, without much thought.

▪ Example: Always choosing the same toothpaste brand.

 ▪ Marketing Strategy: Brands focus on brand loyalty through convenience and consistent
quality.

2. Dissonance-Reducing Buying Behavior:

▪ Happens when consumers fear making the wrong choice, especially when products are high-
risk.

▪ Example: Purchasing a washing machine and worrying about reliability.

▪ Marketing Strategy: After-sales services and warranties help reduce post-purchase anxiety.

3. Extended Problem-Solving:

▪ High-involvement purchase decisions involving substantial research and evaluation.

▪ Example: Buying a car or house, where consumers compare multiple features and offers.

▪ Marketing Strategy: Brands provide detailed product information and personal consultations.

4. Variety-Seeking Buying Behavior:

▪ Consumers switch brands not due to dissatisfaction but for novelty.

▪ Example: Trying a new brand of snacks for variety.

▪ Marketing Strategy: Introducing new flavors or limited editions encourages variety-seeking

behavior.

Maslow’s Hierarchy of Needs and Consumer Behavior

Understanding Maslow’s Hierarchy of Needs:

o Maslow’s theory categorizes human needs into five levels, progressing from basic to higher-order
needs.
1. Physiological Needs:

o Basic survival needs like food, water, and shelter.

o Example: Buying groceries or paying rent.

o Marketing Strategy: Products fulfilling these needs are positioned as essential (e.g., affordable grocery
items).

2. Safety Needs:
o Includes personal and financial security, health, and safety.

o Example: Purchasing insurance policies or home security systems.

o Marketing Strategy: Banks offer savings plans, and health supplements highlight safety.

3. Social Needs (Belongingness):

o The need for love, friendship, and group belonging.

o Example: Joining a fitness club or purchasing trendy clothes to fit in with peers.

o Marketing Strategy: Brands emphasize community connection (e.g., social media campaigns).

4. Esteem Needs:
o Desire for recognition, respect, and achievement.

o Example: Buying a luxury car to signal success.

o Marketing Strategy: Ads highlight the status symbol of owning premium products.

5. Self-Actualization Needs:
o The pursuit of personal growth and fulfilment.

o Example: Investing in self-improvement courses or travelling to new places.

o Marketing Strategy: Brands promote experiences that enhance personal potential (e.g., adventure
travel).

McClelland's Theory of Needs and Consumer Behavior

McClelland's Three Needs Theory:
• This theory identifies three dominant needs that shape individual behaviour:

1. Need for Achievement (nAch):

▪ Individuals with this need are motivated to set and achieve challenging goals.

▪ They prefer working independently and receiving feedback.

 ▪ Example: A consumer buys the latest fitness tracker to set and monitor personal health
goals.

▪ Marketing Strategy: Brands target achievement-driven consumers by offering

performance metrics (e.g., tracking progress through apps).

2. Need for Affiliation (nAff):

▪ Individuals value relationships, social acceptance, and teamwork.

▪ They are likely to purchase products that help them fit into a group or community.

▪ Example: Buying sports team merchandise to feel connected with other fans.

▪ Marketing Strategy: Promote community-oriented events or brand campaigns (e.g.,

Nike’s campaigns supporting equality in sports).

3. Need for Power (nPow):

▪ Individuals seek status, influence, and control over their environment.

▪ They gravitate toward products that project authority or leadership.

▪ Example: Purchasing a luxury car to demonstrate success and social dominance.

▪ Marketing Strategy: Highlight the prestige associated with premium products

Motivation in Consumer Behavior

1. Utilitarian Motivation:

o Definition: Focused on practical utility and functionality of a product.

o Example: Buying a fuel-efficient car for lower running costs.

o Marketing Strategy: Emphasize product performance, reliability, and value for money in campaigns.

2. Hedonic Motivation:

o Definition: Driven by the desire for pleasure, enjoyment, and emotional satisfaction.

o Example: Going on a luxury vacation to relax and indulge.

o Marketing Strategy: Focus on experiential benefits and emotional appeal, such as using imagery of
relaxation in advertisements.

3. Extrinsic vs. Intrinsic Motivation:

o Extrinsic Motivation:

▪ Consumers are motivated by external rewards (e.g., discounts, points, prizes).

▪ Example: Buying a product because of a limited-time 20% discount.

▪ Marketing Strategy: Use loyalty programs or special promotions to drive purchases.

o Intrinsic Motivation:

▪ Driven by internal satisfaction and personal fulfillment.

▪ Example: Learning a new hobby because it’s enjoyable, not because of rewards.

▪ Marketing Strategy: Focus on promoting personal development and well-being.

Herzberg’s Two-Factor Theory of Motivation:
o Definition: Herzberg identified two sets of factors that influence consumer behavior:

1. Hygiene Factors: These prevent dissatisfaction but do not motivate purchasing behavior on
their own.

▪ Example: Basic product features like availability and functionality (e.g., a reliable
warranty).

2. Motivational Factors: These encourage consumers to make purchasing decisions by enhancing

satisfaction.

▪ Example: Faster delivery or exclusive rewards programs.

o Application in Marketing:

▪ Hygiene Factors: Ensuring a product meets minimum expectations (e.g., working correctly).

▪ Motivational Factors: Offering personalized offers, gifts, and loyalty points encourages
customer engagement.
The Role of Perception in Consumer Behavior

What is Perception?
o Definition: Perception is the process by which consumers interpret sensory inputs (e.g., sight, sound,
taste) to form opinions and judgments about products.

o Marketing Relevance: Consumers’ perceptions influence how they interact with brands and shape
purchasing decisions.

Types of Perception:
Social Perception:

▪ Shaped by cultural values, traditions, and social norms.

▪ Example: Preference for wearing traditional attire during festivals in India.

Selective Perception:

▪ Consumers pay attention to only relevant stimuli and ignore others.

▪ Example: A consumer focuses on the discount tag on a product and ignores its brand quality.

▪ Marketing Strategy: Use bold visuals and concise messaging to capture attention.

Subliminal Perception:

▪ Occurs when stimuli are presented below the conscious threshold, influencing consumers
indirectly.

▪ Example: Subtle background music in retail stores to create a pleasant shopping experience.

▪ Marketing Insight: Although subliminal advertising is controversial, sensory marketing (e.g.,

smells in bakeries) is commonly used to enhance perception.

How Perception Affects Brand Positioning:

o Perception influences brand identity and loyalty.

▪ Example: Apple is perceived as a premium, innovative brand, influencing customers to pay

higher prices.
The Howard Sheth Model explains the decision-making process consumers follow before making a
purchase, combining both rational and emotional factors. It shows how inputs, perception, learning,
and experience influence buying behavior. The model is divided into three parts:

1. Inputs:
External stimuli that influence consumer behavior, such as:
o Significative stimuli: Product features (quality, price, availability)
o Symbolic stimuli: Brand imagery or advertising message
o Social stimuli: Influence from family, social groups, or social class
2. Perceptual and Learning Constructs:
Internal processes shaping how consumers interpret inputs and learn:
o Perceptual constructs: Includes attention, perceptual bias, and stimulus ambiguity
(confusion from unclear information).
o Learning constructs: Focuses on attitudes, motives, brand comprehension, and choice
criteria. Consumers learn through experience and form attitudes that shape future
decisions.
3. Outputs:
The final stage, including:
o Purchase: Buying the product
o Intention: Desire to purchase formed through attitudes and learning
o Satisfaction: Evaluation of the purchase experience, which feeds back into future
behavior.
Personality Theories
Freudian Personality Theory

o Structure of Personality:

▪ Id: Operates on the pleasure principle, seeking immediate gratification.

▪ Example: Impulse buying luxury items for instant pleasure.

▪ Ego: Operates on the reality principle, balancing the id’s desires with social norms.

▪ Example: Delaying a purchase until payday, even though it’s tempting to buy now.

▪ Superego: Represents moral values and learned societal rules.

▪ Example: A consumer avoids buying counterfeit products to align with ethical

standards.
Trait Theory of Personality:

o Big Five Personality Traits:

▪ Openness: Curious, willing to try new things.

▪ Conscientiousness: Organized, responsible.

▪ Extraversion: Sociable, outgoing.

▪ Agreeableness: Cooperative, empathetic.

▪ Neuroticism: Prone to anxiety and mood swings.

o Application in Marketing:

▪ Brands use personality traits to create targeted advertising.

▪ Example: Outgoing individuals (high extraversion) are more likely to respond to social media
promotions.

The Concept of Self and Self-Image:

Self-concept refers to how consumers perceive themselves based on their personal opinions, beliefs, and values. It
shapes their buying decisions as they tend to choose products and brands that align with their identity or aspirations.
Example:

A fitness enthusiast may identify with activewear brands like Nike or Lululemon, as it reflects their self-concept of
being healthy and active.

Ideal Self vs. Actual Self

1. Ideal Self

o This is the person the consumer aspires to become—how they want to see themselves in the future.

o Example: A consumer buying formal clothes to project an image of a successful professional.

2. Actual Self

o This reflects the consumer's current self—how they see themselves at present. Consumers make
buying decisions that either reinforce or enhance this image.

Marketing Strategy: Aligning Products with the Ideal Self

• Brands align products and messages with the consumer’s ideal self to build emotional connections and foster
loyalty.

• Example: Promoting sportswear with campaigns focused on a healthy lifestyle encourages consumers to buy
products that resonate with their aspirations to be fit and active.

Fishbein Model and Theory of Reasoned Action

Fishbein Behavioral Intentions Model:
Formula:
A = ∑ (Bi × Ei)

▪ A: Attitude toward a product or behavior.

▪ Bi: Belief that the product possesses a certain attribute.

▪ Ei: Evaluation of the importance of that attribute.

Example: A consumer might believe that a smartphone brand has excellent battery life (Bi) and consider battery life
highly important (Ei). If these evaluations are positive, the consumer forms a favorable attitude toward that brand.

Theory of Reasoned Action (TRA):

o TRA Components:

▪ Attitudes Toward Behavior: Personal evaluations of the behavior.

▪ Subjective Norms: Perceived social pressure to perform or avoid the behavior.

o Example: A consumer may like the idea of switching to a vegan diet (attitude), but if their social circle
discourages it (subjective norm), they might hesitate to adopt the behavior.

o Planned Behavior Extension:

▪ Perceived Behavioral Control: Consumers' belief about how easy or difficult it is to perform
the behavior.

▪ Example: A person might want to exercise regularly but perceives it as difficult due to time
constraints, impacting their intention.
Learning Theories and Consumer Behavior
1. Classical Conditioning:

o Definition: Learning occurs by associating a neutral stimulus with a positive response.

o Example: A soft drink ad using upbeat music creates positive emotions that consumers associate with
the brand.

o Marketing Application: Ads that repeatedly pair products with pleasant stimuli (like happy moments)
reinforce positive associations.

2. Operant Conditioning:

o Definition: Behavior is learned through rewards and punishments.

o Example: Loyalty programs reward repeat customers with discounts, reinforcing their purchasing
behavior.

o Marketing Strategy: Offering incentives, such as cashback offers, encourages customers to return.

Forms of Cognitive Learning

Explicit Learning

o Conscious and intentional learning, where the individual actively seeks knowledge (e.g., studying for
exams).

Implicit Learning

o Learning that occurs unconsciously or unintentionally, such as picking up social cues or habits.

Meaningful Learning

o Relating new information to prior knowledge. This type of learning allows individuals to integrate
and better understand new concepts (also called subsumption).

Discovery Learning

o Involves exploring and experimenting to learn new things (e.g., using DIY products through trial and
error).

Receptive Learning

o Learning through listening or passive observation, such as attending lectures or listening to podcasts.

Non-Associative Learning

o Involves learning through habituation (reducing response to repeated stimuli) or sensitization

(increased response to stimuli over time).

Emotional Learning
 o Gaining knowledge through emotional experiences, which helps shape behavior and future
responses.

Experiential Learning

o Learning from direct experience, often hands-on, where individuals reflect on actions to improve or
adapt in future situations.

Persona of a Target Group

A persona is a fictional representation of a typical customer that reflects the characteristics of a target audience (TA). It
acts as a strategic mask, helping marketers understand and empathize with their audience.

Creating a Marketing Persona:

A persona includes:

• Demographics: Age, family, job title

• Goals and Challenges: What the target audience wants to achieve and the difficulties they face

• Media Preferences: Channels and platforms the audience engages with

Benefits of Personas in Marketing:

• Understanding Problems: Identifies the needs and issues of the target audience.

• Solving Problems: Helps align the product or service to meet customer needs.

• Brand Positioning: Assists in crafting messages that resonate with the audience.

Creating accurate personas helps businesses communicate effectively and deliver the right messages at the right
time, resulting in more personalized engagement.

Hofstede's Cultural Dimensions in Consumer Behavior

1. Hofstede’s Cultural Dimensions:

o Power Distance Index (PDI):

▪ Measures how much inequality is accepted within a society.

▪ Example: In high PDI countries, consumers expect hierarchical service structures (e.g., VIP
services).

o Individualism vs. Collectivism:

▪ Individualism: Focus on personal goals and independence.

▪ Collectivism: Focus on group harmony and social connections.

▪ Example: Western consumers prefer individual-focused campaigns, while Eastern cultures

resonate with community-oriented ads.

o Masculinity vs. Femininity:

▪ Masculine Societies: Value competition, achievement, and success.

▪ Feminine Societies: Emphasize relationships, empathy, and quality of life.

▪ Example: Ads emphasizing personal success appeal to masculine societies, while those
highlighting work-life balance resonate with feminine societies.

o Uncertainty Avoidance Index (UAI):

▪ Reflects a society’s tolerance for ambiguity and risk.

▪ Example: High UAI consumers prefer detailed information and guarantees before making
decisions.

o Long-Term vs. Short-Term Orientation:

▪ Long-Term Orientation: Focus on future rewards and perseverance.

▪ Short-Term Orientation: Focus on immediate benefits and traditions.

▪ Example: Long-term oriented consumers invest in savings plans, while short-term oriented
consumers prefer instant gratification products.

o Indulgence vs. Restraint:

▪ Indulgent Societies: Value pleasure and self-expression.

▪ Restrained Societies: Control desires and follow strict norms.

▪ Example: Indulgent societies prefer luxury products, while restrained societies prioritize
functionality.

2. Application of Hofstede’s Dimensions in Marketing:

o Brands tailor their campaigns according to cultural dimensions:

▪ Example: Global brands modify ads to align with local cultural norms (e.g., McDonald’s offering
vegetarian options in India)
Perception Management and Brand Positioning
Onion Model of Brand Positioning:

o Definition: This model explains how brands build identity through layers, from visible attributes to
core values.

o Layers:

1. Outer Layer: Represents visible elements like logos, advertisements, and packaging.

2. Core Layer: Consists of the brand’s fundamental values and mission.

▪ Example: Apple’s logo (outer layer) reflects its innovative core value (core layer).

AIO Profiling (Activities, Interests, and Opinions):

o Definition: AIO profiling helps marketers understand consumer lifestyles by analyzing daily routines,
hobbies, and beliefs.

o Example of Activities: Jogging, travelling, attending events.

o Example of Interests: Fashion, cooking, or environmental activism.

o Example of Opinions: Preferences on brands, products, or social issues.

o Marketing Application:

▪ Example: A sportswear brand targets active individuals through campaigns promoting an

adventurous lifestyle.
The Brand Identity Prism by Kapferer:
This is a framework used to build and maintain a brand’s identity through six key elements:

1. Physique

o The visible, physical characteristics of the brand (logo, color, font, mascot).

o It defines what the consumer perceives when interacting with the brand.

2. Personality

o The tone or voice of the brand, giving it human characteristics (e.g., inspiring, confident, fearless).

3. Culture

o The brand’s underlying values, norms, and traditions reflected in its offerings.

4. Relationship

o The emotional bond between the brand and its customers through engagement and service.

5. Reflection

o Describes the way the brand wants its customers to see themselves. It answers the question: “Who do
we want our customers to be?”

6. Self-Image

o Refers to how consumers envision themselves ideally and how the brand helps them achieve that
vision.

Externalization vs. Internalization:

• Externalization:
Involves all visible elements of the brand—logo, campaigns, and products—that shape consumer perceptions.

• Internalization:
Involves the values, beliefs, and traditions within the brand that align with the internal motivations of
consumers.

By addressing both external and internal aspects, brands can connect on a personal level and influence how customers
see themselves through the brand’s offerings.

Brand Loyalty
Brand loyalty refers to a consumer's consistent preference and favorable attitude toward a particular
brand over time, leading to repeat purchases. There is a close link between learning, habits, and brand
loyalty, as consumers tend to stick to brands that meet their needs and provide positive experiences.

Key Aspects of Brand Loyalty:

 • Emotional and Experiential Learning:
The foundation of brand loyalty lies in the emotional connection consumers develop through
experiences with the brand. Even with significant marketing investments, poor product or
service quality can erode brand loyalty.

• Measuring Brand Loyalty:

Brand loyalty is assessed through:
1. Customer Retention: The ability to keep customers over time.
2. Customer Lifetime Value: The total value a customer generates throughout their
relationship with the brand.
3. Customer Satisfaction Surveys: To gauge satisfaction and identify areas for
improvement.

Customer-Based Brand Equity (CBBE) Model

The Customer-Based Brand Equity (CBBE) model highlights how brands build value by forming strong
relationships with customers. It shows the stages of development required to establish deep brand
loyalty and long-term equity.

Stages of Brand Development

The CBBE model aligns with stages of brand development to achieve strong brand loyalty:

• Stage 1: Identity – Build brand awareness.

• Stage 2: Meaning – Define points of parity and differentiation.
• Stage 3: Response – Focus on generating positive emotional and cognitive reactions.
• Stage 4: Relationships – Foster deep connections and active loyalty.
Notes for the PPT on "Culture and Consumer Decision Making"
1. Understanding Culture in Consumer Behavior:
• Definition of Culture:
o Culture is described as the “society’s personality.” It’s a lens through which individuals
perceive products. It encompasses collective values, norms, arts, social institutions, and
intellectual achievements of a society.
o It dictates consumers' priorities for different activities, influencing their buying
behaviors.
o Every product is considered a cultural product, and all buying behaviors are influenced
by culture.
• Importance of Studying Culture:
o Consumer Resonance: Consumers resonate more with products that align with their
cultural values.
o Cultural Influence: Understanding the cultural context helps predict a product's
acceptance and provides insights into the dominant cultural ideals of the period.
2. Components of Culture in Consumer Behavior:
• Cultural Systems:
o Culture is dynamic and constantly evolving.
o Ecology: How a culture adapts to its habitat (e.g., Indians value frugality due to living
conditions).
o Social Structure: The orderly way in which society is organized, including domestic and
political groups.
o Ideology: The mental characteristics and worldview people share, influencing how they
interact with their environment.
• Cultural Evolution Example:
o Traditional Indian society evolved from large, agrarian families focused on maintaining
agricultural land to urban families with fewer members, greater resources, and higher
risk-taking abilities (e.g., startup ventures).
3. Key Concepts Related to Culture:
• Values and Core Values:
o Value: A belief that a certain condition is preferable (e.g., family orientation in Indian
culture).
 o Core Values: Unique values that define a culture and play a significant role in
consumption activities.
• Norms, Customs, and Conventions:
o Norms: Rules dictating what is considered right or wrong.
o Customs: Norms controlling basic behaviors (e.g., division of labor in households).
o Conventions: Norms guiding daily conduct.
• Myths and Rituals:
o Myth: A symbolic story representing cultural ideals.
o Rituals: Multiple symbolic behaviors occurring in a fixed sequence and repeated
periodically.
4. Learning Cultural Values:
• Types of Learning:
o Formal Learning: Learning from family members.
o Informal Learning: Learning through observation or friends.
o Technical Learning: Learning from institutions or scriptures.
• Processes of Cultural Learning:
o Enculturation: Learning the beliefs and behaviors endorsed by one’s own culture.
o Acculturation: Learning the value systems and behaviors of another culture.
• Acculturation Strategies:
o Integration: Adopting the host culture while retaining native culture.
o Assimilation: Adopting host culture norms and giving up native culture.
o Separation: Rejecting the host culture.
o Marginalization: Rejecting both native and host cultures.
5. Hofstede's Cultural Dimensions:
• Power Distance Index: Degree to which less powerful members expect and accept that power
is distributed unequally (e.g., police seeking support during a pandemic).
• Individualism vs. Collectivism: Preference for independent versus interdependent decisions.
• Masculinity vs. Femininity: Distinct versus overlapping gender roles.
• Uncertainty Avoidance Index: Society’s tolerance for uncertainty and ambiguity.
• Long vs. Short-Term Orientation: Focus on future rewards versus maintaining past and present.
 • Indulgence vs. Restraint: Degree to which people control their desires and impulses.

Notes for the PPT on "Family and Its Social Standing"

1. Understanding Family in Consumer Behavior:
• Definition of Family:
o A family is a group of people related by blood (consanguinity), marriage (affinity), or co-
residence.
o The primary purpose of families is to maintain the well-being of their members and
society.
o Families provide structure, safety, and socialization, preparing individuals for life outside
the family.
• Role of Families in Society:
o Families are critical in socializing members and teaching acceptable behavior, values,
and norms.
o In consumer behavior, understanding the influence of family on purchasing decisions is
crucial, as families impact what members buy, wear, and consume.
2. Types of Families:
• Traditional Families:
o Nuclear Family: Consists of two parents and their children.
o Joint Family: Multiple generations living together, often including extended relatives.
o Single-Parent Family: One parent raising children alone.
• Non-Traditional Families:
o Live-in Relationships: Couples living together without marriage.
o Nesters: Older children living with their parents.
o Gay/Lesbian Couples: Same-sex partners forming a family unit.
• Other Family Forms:
o Conjugal Family: Focused on the relationship between husband and wife.
o Matrifocal Family: Focused on the mother, often found in single-parent families.
o Blended Family: Families formed by merging two previously separated units.
o Monogamous/Polygamous Family: One spouse versus multiple spouses.
3. Role of Family in Socialization:
 • Socialization: The process by which individuals learn to behave according to societal norms.
• Consumer Socialization: Refers to how children acquire skills, knowledge, attitudes, and
experiences needed to function as consumers.
• Socializing Agents: Family members play a significant role as agents who influence consumer
behavior, determining what to buy, where to go, and how to behave.
4. Kinship and its Influence:
• Kinship: The bond of blood or marriage that binds people together.
o Affinal Kinship: Created through marriage, leading to relationships like in-laws.
o Consanguineous Kinship: Blood relations like parents, siblings, and children.
• Degrees of Kinship:
o Varying degrees of kinship influence the closeness and obligations within family
members, impacting decision-making in the family context.
5. Parental Roles in Socialization:

o Permissive: Highly nurturing, allowing children to explore

and express themselves, often indulging their requests
freely.
o Neglecting/Uninvolved: Minimal involvement, often
yielding to children’s requests without much thought.
o Authoritative: Balanced approach, nurturing but with
firm rules, often skeptical of advertisements, discussing
them with children.
o Authoritarian: Strict, enforcing rules rigidly, often restricts
environmental influences and is unlikely to yield to
children’s requests.
6. Family Decision Making and Consumer Behavior:
• Key Decision Makers:
o Kids: Act as primary market, influencers, and future consumers.
o Spouse: The decision-making process can be husband-dominated, wife-dominated, or
joint. In Indian contexts, wives can be classified as traditional, quasi-progressive, or
contemporary based on their decision-making roles.
o Elderly Members: Influence decisions based on their experience and traditional
knowledge.
• Types of Decisions:
 o Autonomic Decisions: Made by one member of the family without much input from
others.
o Joint Decisions: Involves input and consensus from multiple family members.
7. Family Life Cycle and Consumer Behavior:
• Stages in the Family Life Cycle:
o Bachelorhood: Young singles with limited responsibilities, high discretionary income,
significant consumption of luxury and entertainment products.
o Honeymooners: Newly married couples with double income, no kids (DINKs), high
consumption of durable goods, vacations, and lifestyle products.
o Full Nest (1): Families with young children, focused on home, childcare, and education-
related purchases.
o Full Nest (2): Families with older children, consumption shifts to education, health, and
recreational activities.
o Empty Nest: Parents whose children have moved out, focusing on retirement, travel,
and leisure activities.
o Dissolution: One spouse passes away, leading to a reduction in household size and
consumption.

Notes for the PPT on "Reference Groups, Opinion Leaders, and

Word of Mouth"
1. Understanding Reference Groups in Consumer Behavior:
• Definition of Reference Groups:
o Reference groups serve as sources of comparison, influence, and norms for people’s
opinions, values, and behavior.
o These groups can be formal (e.g., professional organizations) or informal (e.g., friends
and family).
o Most important reference groups include families, as they provide foundational skills,
knowledge, attitudes, and experiences that influence consumer behavior.
• Influence Exerted by Reference Groups:
o Informational Influence: Individuals seek information from the experiences or opinions
of peers, family members, or independent sources. This type of influence is based on
knowledge.
 o Utilitarian Influence: The desire to satisfy others' expectations impacts an individual’s
choices. This is based on conformity to social norms.
o Value-Expressive Influence: Individuals adopt behaviors or products that reflect their
desired self-image or identity based on identification with the group.
• Conditions for Reference Group Influence:
o Reference group influence is stronger when:
▪ The use of a product or brand is visible (e.g., fashion items, cars).
▪ The product is unnecessary, making it more of a status symbol.
▪ The individual has a higher commitment to the group.
▪ The activity or product is highly relevant to the group’s norms.
2. Brand Communities and Consumer Tribes:
• Brand Communities:
o A group of consumers who share a set of social relationships based on their usage of or
interest in a product (e.g., Harley-Davidson riders).
o These communities often exhibit strong loyalty to the brand and participate in group
activities centered around the brand.
• Consumer Tribes:
o Similar to brand communities, but broader. These groups share a lifestyle and can
identify with each other due to shared allegiance to an activity or product (e.g., extreme
sports enthusiasts).
3. Word-of-Mouth (WoM) Communication:
• Definition of WoM:
o WoM involves the transmission of product information between individuals. It is often
more reliable and trustworthy than traditional advertising because it comes from known
and trusted sources.
o Examples include recommending tourist destinations based on an influencer’s
experiences or trying new cuisines based on friends' suggestions.
• Impact of WoM:
o WoM comes with more social pressure to conform to recommendations than
advertisements.
o It is a double-edged sword for marketers: it can either boost or damage a brand’s image
depending on the nature of the communication.
4. Opinion Leadership:
 • Definition of Opinion Leaders:
o Opinion leaders are individuals whose advice is taken seriously by others. They influence
the attitudes and behaviors of others.
o These individuals are often the first to adopt new products and are highly social and
interconnected within their communities.
• Characteristics of Opinion Leaders:
o They are similar to the consumers they influence in terms of values and beliefs, making
their opinions more relatable and impactful.
o Opinion leaders are key figures in the diffusion of innovations and trends.
5. Case Study Analysis:
• Word-of-Mouth Marketing vs. Traditional Advertising:
o WoM marketing is often seen as more credible because it involves personal
recommendations, while traditional advertising can be perceived as biased or less
authentic.
• Diageo’s Strategy for Kettle One:
o The WoM marketing campaign for Kettle One could involve leveraging influencers and
opinion leaders to create buzz and credibility around the product.
o Consider the benefits and drawbacks of different WoM campaign strategies, such as
social media endorsements versus in-person events.
6. Discussion Questions:
• Benefits and Drawbacks of WoM Campaigns:
o Benefits include increased credibility and consumer trust, while drawbacks might
include the potential for negative WoM to spread quickly and harm the brand.
• Evaluating Campaign Choices:
o Analyze the effectiveness of WoM campaigns in comparison to traditional advertising.
Consider whether you agree with the campaign choice and why.