1. Cultural factors

Cultural factors exert a broad and deep influence on consumer behavior. The marketer needs to understand the role played by the buyer’s culture, subculture, and social class.

a) Culture

Culture is the most basic cause of a person’s wants and behaviour. Human behaviour is largely learned. Growing up in a society, a child learns basic values, perceptions, wants, and behaviours from the family and other important institutions. A child normally learns or is exposed to the following values: achievement and success, activity and involvement, efficiency and practicality, progress, hard work, material comfort, respect for elders, conformity, humanitarianism, youthfulness, and fitness and health. Every group or society has a culture and cultural influences on buying behaviour may vary greatly from country to country. Failure to adjust to these differences can result in ineffective marketing or embarrassing mistakes.

Marketers are always trying to spot cultural shifts in order to discover new products that might be wanted. For example, the cultural shift towards greater concern about health and fitness, especially among young urban women, has created a huge industry for health and fitness services, exercise equipment and clothing, organic foods, and a variety of diets. The shift towards informality has resulted in more demand for casual clothing and simpler home furnishing.

Similarly, there has been an increasing shift among male consumers towards the use of cosmetics to look fairer and more handsome. Brands like emami fair and handsome, nivea for men and garnier men are trying to seize this marketing opportunity that has arisen due to the cultural shift among young men in India.

b) Subculture

Each culture contains smaller subcultures, or groups of people with shared value systems based on common life experiences and situations. Subcultures include nationality, religions, racial groups, and geographic regions. Many subcultures make up important market segments, and marketers often design products and marketing programmes tailored to their needs. Examples of such important subculture groups based on religion include hindu, muslim, sikh, christian, buddhist, jain and parsi consumers in subcontinent. Many products and services, especially linked with religious rituals and festivals, are targeted at these subcultures. Geographic regions also give rise to interesting subcultures. Thus bengali, punjabi and gujarati people form distinct subculture in india.

Consider the subculture of the punjabi community in pakistan. Punjabi is the most populous and affluent province in pakistan. Nearly 60% of the country’s population lives in the province. Punjabi people in pakistan are predominantly muslims with a spiritually built on the tolerant practices of sufi saints. They are also seen as extroverts who want to enjoy life to the hilt. This can be seen in their consumption behaviour, which is ostentatious, and in their colorful celebrations, such as weddings and basant, accompanied by loud music, bhangra,  and excitement. Celebration of life is an essential part of the punjabi culture and several products are offered to cater to their needs. For instance, food streets in Gawal mandi, lahore, epitomizes the punjabi zest for life. Authentic desi food is enjoyed by hundreds of locals and foreigners each night in traditional setting.

c) Social Class 

Almost every society has some form of social class structure. Social classes are society’s relatively permanent and ordered divisions whose member share similar values, interests and behaviours.

Social class is not determined by a single factor, such as income, but is measured as a combination of occupation, income, education, wealth and other variables. Marketers in the indian subcontinent have developed a socioeconomic classification system to segment urban households on the level of education and occupation of the chief wage earner of the household.

Marketers are interested in socioeconomic classes because people in the given socioeconomic class tend to exhibit similar buying behaviour. Social classes show distinct product and brand preferences in areas such as clothing, home furnishing, leisure activity, and automobile.

2. Social factors 

A consumer’s behavior also is influenced by social factors, such as consumer’s small groups, family and social roles and status.

a) Groups and Social Networks

Many small groups influence a person’s behavior. Groups that have a direct influence and to which a person belongs are called membership groups. In contrast, reference in forming a person’s attitudes or behavior. People often are influenced by reference groups to which they do not belong. For example, an aspirational group is one to which the individual wishes to belong, as when a young cricket player hopes to someday emulate cricket star like Sachin Tendulkar.

Marketers try to identify the reference group of their target markets. Reference groups expose a person to new behaviors and lifestyles, influence the person’s attitudes and self-concept and create pressures to conform that may affect the persons product and brand choices. The importance of group influence varies across products and brands. It tends to be strongest when the product is visible to others whom the buyer respects.

i) Word of mouth influence and buzz marketing

Marketers of brands subjected to strong group influence must figure out how to reach opinion leaders. Opinion leaders are people within a reference group who, because of special skills, knowledge, personality, or other characteristics, exert social influence on others.

Marketers often try to identify opinion leaders for their products and direct marketing efforts towards them. They use buzz marketing by enlisting or even creating opinion leaders to serve as brand ambassador who spread the word about their products. Mays companies are now creating brand ambassador programs in an attempt to turn influential but everyday customers into brand evangelists.

Proctor and Gamble has created a huge word-of-mouth marketing arm in the US consisting of 350,000 moms.

ii) Online social networks

Over the past few years, a new type of social interaction has exploded onto the scene-online social networking. Online social networks are online communities where people socialize or exchange information and opinions. Social networking media range from blogs to social networking website, such as Myspace.com, Orkut and You tube, to entire virtual worlds, such as second life. This new form of high tech buzz has big implications for marketer.

Marketers are working to harness the power to these new social networks to promote their products and build closer customer relationship. Instead of throwing more one-way commercial messages at ad-weary consumers, they hope to use social networks to interact with consumers and become a part of their conversations and lives. Many brands have set up MySpace pages and Facebook groups. The Facebook group of some of these brands offer free downloads contests, and printable coupons. Wal-Mart set up the "Roommate Style Match" Facebook group, aimed at jump-starting college student back-to-school sales. Members take a quiz to determine their decorating style and get a list of "recommended products" they can buy at Wal-Mart to match their style with their roommate's.

Other companies regularly post ads or custom videos on video-sharing sites such as YouTube. Viewers watch more than 2.5 billion YouTube videos in a single month, making it an attractive marketing outlet. For example, American Eagle Outfitters posts short, entertaining movies on YouTube. Heinz runs the Top This TV Challenge, which invites amateurs to submit homemade Heinz Ketchup commercials with the chance to win a grand prize of $57,000 and have their commercial aired on national television.

Following the success of large social networking sites such as MySpace and Facebook, thou­sands of niche sites have popped up that cater to more selective online communities. There is at least one social networking site tor every interest or hobby.

Companies can even create their own social networks. For example, Procter & Gamble set up Capessa (www.capessa.com), "a gathering place for real women to share their stories, offer their per­sonal wisdom and practical advice, improve their lives, and be inspired. The only thing that's missing is the kitchen table." The site gives women a place to express themselves and P&G an opportunity to observe and learn more about their needs and feelings.

But marketers must be careful when tapping into online social networks. Results are diffi­cult to measure and control. Ultimately, the users control the content, so online network market­ing attempts can easily backfire. For example, when Chevrolet launched a Web contest in the United States inviting folks to create their own ads for its Chevy Tahoe, it quickly lost control. Says one observer, "the entries that got passed around, blogged about and eventually covered in the mainstream media were all about the SUV's abysmal gas mileage and melting polar ice caps." One user-generated ad proclaimed, "Like this snowy wilderness? Better get your fill of it now. Then say hello to global warming." Another concluded, "$70 to fill up the tank, which will last less than 400 miles. Chevy Tahoe."

b) Family

Family members can strongly influence buyer behavior. The family is the most important consumer buying organization in society, and it has been researched extensively. Marketers are interested in the roles and influence of the husband, wife, and children on the purchase of different products and services. Brooke Bond Red Label tea in India encourages its consumers to send in stories of their marriage. It promises to print the interesting ones on the package of the tea, along with a family photograph.

Husband-wife involvement varies widely by product category and by stage in the buying process. Buying roles change with evolving consumer lifestyles. In the subcontinent, the wife tra­ditionally has been the main purchasing influence for the family in the areas of food, household products, and clothing. But with more and more women holding jobs outside the home and the willingness of husbands to do more of the family's purchasing, all this is changing. These chang­ing trends are even more extreme in the West. For example, in the United States, men now account for about 40 percent of all food-shopping dollars. Women influence 65 percent of all new car pur­chases, 91 percent of new home purchases, and 92 percent of vacation purchases. In all, women in the United States now make almost 85 percent of all family purchases, spending two-thirds of the nation's GDP.

Such changes suggest that marketers in industries that have sold their products to only men or only women are now courting the opposite sex. For example, after realizing that women today account for more and more of all technology purchases, computer manufacturers like Dell and Toshiba have stepped up their efforts to woo women buyers. They now advertise regularly in female-focused and business magazines.

Children may also have a strong influence on family's buying decisions. Especially in a social scenario where more and more families are becoming nuclear and have only one or two children, and when, in most of the families, both the parents work (referred to as double income single kids, or DISK, families), parents pamper their kids with a number of products and listen to them while making purchase decisions. According to one study, working parents compensate for the time and attention that they are unable to devote to their kids by showering their children with gifts. They also influence their family spending in areas such as soft drinks, food, health drinks like Complan and Bournvita, clothing, entertainment, and personal care items including soaps and detergents. One recent study in the United States found that kids significantly influence family decisions about where they take vacations and what cars and cell phones they buy. As a result, marketers of cars, full-service restaurants, cell phones, and travel destinations are now placing ads on networks such as Cartoon Network and Toon Disney. 

c) Roles and Status

A person belongs to many groups—family, clubs, organizations. The person's position in each group can be defined in terms of both role and status. A role consists of the activities people are expected to perform according to the persons around them. Each role carries a status reflecting the general esteem given to it by society.

People usually choose products appropriate to their roles and status. Consider the various roles a working mother plays. In her company, she plays the role of a brand manager; in her fam­ily, she plays the role of wife and mother; at her favorite sporting events, she plays the role of avid fan. As a brand manager, she will buy the kind of clothing that reflects her role and status in her company.

3) Personal Factors

A buyer's decisions also are influenced by personal characteristics such as the buyer's age and life-cycle stage, occupation, economic situation, lifestyle, and personality and self-concept.

a) Age and Life-Cycle Stage

People change the goods and services they buy over their lifetimes. Tastes in food, clothes, furniture, and recreation are often age related. Buying is also shaped by the stage of the family life cycle—the stages through which families might pass as they mature over time. Marketers often define their tar­get markets in terms of life-cycle stage and develop appropriate products and marketing plans for each stage.

Traditional family life-cycle stages include young singles and married couples with children. Today, however, marketers are increasingly catering to a growing number of alternative, nontraditional stages such as unmarried couples, singles marrying later in life, childless couples, same-sex couples, single parents, extended parents (those with young adult children returning home), and others.

RBC Royal Bank has identified five life-stage segments. The Youth segment includes customers younger than 18. Getting started consists of customers aged 18 to 35 who are going through first experiences, such as their graduation, first credit card, first car, first loan, marriage, and first child. Builders, customers aged 35 to 50, are in their peak earning years. As they build careers and family, they tend to borrow more than they invest. Accumulators, aged 50 to 60, worry about saving for retirement and investing wisely. Finally, Preservers, customers over 60, want to maximize their retire­ment income to maintain a desired lifestyle. RBC markets different services to the different seg­ments. For example, with Builders, who face many expenses, it emphasizes loans and debt-load management services.

b) Occupation

A person's occupation affects the goods and services bought. Blue-collar workers tend to buy-more rugged work clothes, whereas executives buy more business suits. Marketers try to iden­tify the occupational groups that have an above-average interest in their products and services. A company can even specialize in making products needed by a given occupational group. For example, companies in Sialkot, Pakistan, supply surgical instruments to surgeons all over the world.

c) Economic Situation

A person's economic situation will affect product choice. Marketers of income-sensitive goods watch trends in personal income, savings, and interest rates. If economic indicators point to a recession, mar­keters can take steps to redesign, reposition, and re-price their products closely. Some marketers target consumers who have lots of money and resources, charging prices to match. For example, Rolex posi­tions its luxury watches as "a tribute to elegance, an object of passion, a symbol for all time." Other mar­keters target consumers with more modest means. Timex makes more affordable watches that "take a licking and keep on ticking."

d) Lifestyle

People coming from the same subculture, social class, and occupation may have quite different lifestyles. Lifestyle is a person's pattern of living as expressed in his or her psychographics. It involves measuring consumers' major AIO dimensions—activities (work, hobbies, shopping, sports, social events), interests (food, fashion, family, recreation), and opinions (about themselves, social issues, business, products). Lifestyle captures something more than the person's social class or personality. It profiles a person's whole pattern of acting and interacting in the world.

When used carefully, the lifestyle concept can help marketers understand changing consumer values and how they affect buying behavior. Consumers don't just buy products, they buy the val­ues and lifestyles those products represent. For example, BMW doesn't just sell convertibles, it sells the convertible lifestyle: "Skies never bluer. Knuckles never whiter." In Pakistan, ChenOne, the retail chain, has attempted to address the evolving lifestyles of affluent urbanites.

ChenOne provides its customers a wide canvas of styles, trends, moods, and craftsmanship in home furniture, bed linen, kitchen accessories, bedroom and bathroom accessories, crockery, and decorative accessories, all under one roof. The shopping environment is spe­cially created to depict the sophisticated, modern lifestyles of its customers. In addition, ChenOne provides custom-made services to its customers through its interior consultancy and home fash­ion department. Customers are able to express their unique lifestyles by select­ing items from a vast range of options on their own, or with help from highly qualified, experienced, and professional designers. ChenOne allows a homemaker the luxury of a uniformly harmonized decor right from bed Linen, cushions, curtains, rugs, and upholstery to lamps and lampshades in order to make a statement

e) Personality and Self-Concept

Each person's distinct personality influences his or her buying behavior. Personality refers to the unique psychological characteristics that lead to relatively consistent and lasting responses to one's own environment. Personality is usually described in terms of traits such as self-confidence, domi­nance, sociability, autonomy, defensiveness, adaptability, and aggressiveness. Personality can be useful in analyzing consumer behavior for certain product or brand choices.

The idea is that brands also have personalities, and that consumers are likely to choose brands with personalities that match their own. A brand personality is the specific mix of human traits that may be attributed to a particular brand. One researcher identified five brand personality traits:

1.  Sincerity (down-to-earth, honest, wholesome, and cheerful)

2.  Excitement (daring, spirited, imaginative, and up-to-date)

3.  Competence (reliable, intelligent, and successful)

4.  Sophistication (upper class and charming)

5.  Ruggedness (outdoorsy and tough)

Most well-known brands are strongly associated with one particular trait: Jeep with "ruggedness," Apple with "excitement," CNN with "competence," and Dove with "sincerity." Hence, these brands will attract persons who are high on the same personality traits.

Many marketers use a concept related to personality—a person's self-concept (also called self-image). The basic self-concept premise is that people's possessions contribute to and reflect their identities—that is, "we are what we have." Thus, in order to understand consumer behavior, the marketer must first understand the relationship between consumer self-concept and, possessions.

Apple applies these concepts in a recent series of ads that characterize two people as comput­ers—one guy plays the part of an Apple Mac and the other plays a PC. The two have very different personalities and self-concepts. "Hello, I'm a Mac," says the guy on the right, who's younger and dressed in jeans. "And I'm a PC," says the one on the left, who's wearing dweeby glasses and a jacket and tie. The two men discuss the relative advantages of Macs versus PCs, with the Mac coming out on top. The ads present the Mac brand personality as young, laid back, and hip. The PC is portrayed as buttoned down, corporate, and a bit dorky. The message? If you see yourself as young and with it, you need a Mac.

4. Psychological Factors

A person's buying choices are further influenced by four major psychological factors: motivation, perception, learning, and beliefs and attitudes.

a) Motivation

A person has many needs at any given time. Some are biological, arising from states of tension such as hunger, thirst, or discomfort. Others are psychological, arising from the need for recognition, esteem, or belonging. A need becomes a motive when it is aroused to a sufficient level of intensity. A motive (or drive) is a need that is sufficiently press­ing to direct the person to seek satisfac­tion. Psychologists have developed theories of human motivation. Two of the most popular—the theories of Sigmund Freud and Abraham Maslow—have quite different meanings for consumer analysis and marketing.

Sigmund Freud assumed that people are largely unconscious about the real psychological forces shaping their behavior. He saw the person as growing up and repressing many urges. These urges are never eliminated or under perfect control; they emerge in dreams, in slips of the tongue, in neurotic and obsessive behavior, or ultimately in psychoses.

Freud's theory suggests that a per­son's buying decisions are affected by sub conscious motives that even the buyer may not fully understand. Thus, a middle-aged customer in Pakistan who buys Engro Food's Olwell milk might explain that she simply is health conscious and wants to maintain her daily intake of calcium. At a deeper level, she may be trying to impress others with her slim appearance. At a still deeper level, she may be buying the milk to feel young and attractive again.

The term motivation research refers to qualitative research designed to probe consumers' hidden, subconscious motivations. Consumers often don't know or can't describe just why they act as they do. Thus, motivation researchers use a variety of probing techniques to uncover underlying emotions and attitudes toward brands and buying situations.

Many companies employ teams of psychologists, anthropologists, and other social scientists to carry out motivation research. One ad agency routinely conducts one-on-one, therapy-like inter­views to delve into the inner workings of consumers. Another company asks consumers to describe their favorite brands as animals or cars (say, Honda versus Suzuki) in order to assess the prestige associated with various brands. Still others rely on hypnosis, dream therapy, or soft lights and mood music to plumb the murky depths of consumer psyches.

Such projective techniques seem pretty goofy, and some marketers dismiss such motivation research as mumbo jumbo. But many marketers use such touchy-feely approaches, now sometimes called interpretive consumer research, to dig deeper into consumer psyches and develop better market­ing strategies.

Abraham Maslow sought to explain why people are driven by particular needs at particular times. Why does one person spend much time and energy on personal safety and another on gain­ing the esteem of others? Maslow's answer is that human needs are arranged in a hierarchy, as shown in Figure from the most pressing at the bottom to the least pressing at the top. They include physiological needs, safety needs, social needs, esteem needs, and self-actualization needs.

A person tries to satisfy the most important need first. When that need is satisfied, it will stop being a motivator and the person will then try to satisfy the next most important need. For example, starving people (physiological need) will not take an interest in the latest happenings in the art world (self-actualization needs), nor in how they are seen or esteemed by others (social or esteem needs), nor even in whether they are breathing clean air (safety needs). But as each important need is satisfied, the next most important need will come into play. 

a) Perception

A motivated person is ready to act. How the person acts is influenced by his or her own perception of the situation. All of us learn by the flow of information through our five senses: sight, hearing, smell, touch, and taste. However, each of us receives, organizes, and interprets this sensory information in an individ­ual way. Perception is the process by which people select, organize, and interpret information to form a meaningful picture of the world.

People can form different perceptions of the same stimulus because of three perceptual processes: selective attention, selective distortion, and selective retention. People are exposed to a great amount of stimuli every day. For example, people are exposed to an estimated 3,000 to 5,000 ad messages every day. It is impossible for a person to pay attention to all these stimuli. Selective attention—the tendency for people to screen out most of the information to which they are exposed — means that marketers must work especially to attract the consumer's attention.

Even noticed stimuli do not always come across in the intended way. Each person fits incoming information into an existing mind-set. Selective distortion describes the tendency of people to interpret information in a way that will support what they already believe. For example, if you distrust a company, you might percent even honest ads from the company as question­able. Selective distortion means that marketer must try to understand the mind-sets of con­sumers and how these will affect interpretations of advertising and sales information.

People also will forget much of what they learn. They tend to retain information that supports their attitudes and beliefs. Because of selective retention, consumers are likely to remember good points made about a brand they favor and to forget good points made about competing brands. Because of selective attention, distortion, and retention, marketers must work hard to get their messages through. This fact explains why marketers use so much drama and repetition in sending messages to their market.

Interestingly, although most marketers worry about whether their offers will be perceived at all, some consumers worry that they will be affected by marketing messages without even knowing it-through subliminal advertising. In 1957, a researcher announced that he had flashed the phrases "Eat popcorn" and "Drink Coca-Cola" on a screen in a New Jersey movie theater every five seconds for l/300th of a second. He reported that although viewers did not consciously recognize these messages, they absorbed them subconsciously and bought 58 percent more popcorn and 18 percent more Coke. Suddenly advertisers and consumer-protection groups became intensely interested in subliminal perception. People voiced fears of being brainwashed, and California and Canada declared the practice illegal. Although the researcher later admitted to making up the data, the issue has not died. Some consumers still fear that they are being manipulated by subliminal messages

Numerous studies by psychologists and consumer researchers have found little or no link between subliminal messages and consumer behavior. Recent brain wave studies have found that in certain circumstances, our brains may register subliminal messages. However, it appears that sub­liminal advertising simply doesn't have the power attributed to it by its critics. Most advertisers scoff at the notion of an industry conspiracy to manipulate consumers through "invisible" messages. Says one industry insider, "[Some consumers believe we are] wizards who can manipulate them at will. Ha! Snort! Oh my sides! As we know, just between us, most of [us] have difficulty getting a 2 percent increase in sales with the help of $50 million in media and extremely liminal images of sex, money, power, and other [motivators] of human emotion. The very idea of [us] as puppeteers, cruelly pulling the strings of consumer marionettes, is almost too much to bear."

b) Learning

When people act, they learn. Learning describes changes in an individual's behavior arising from experience. Learning theorists say that most human behavior is learned. Learning occurs through the interplay of drives, stimuli, cues, responses, and reinforcement.

A drive is a strong internal stimulus that calls for action. A drive becomes a motive when it is directed toward a particular stimulus object. For example, a person's drive for self-actualization might motivate him or her to look into buying a camera. The consumer's response to the idea of buy­ing a camera is conditioned by the surrounding cues. Cues are minor stimuli that determine when, where, and how the person responds. For example, the person might spot several camera brands in a shop window, hear of a special sale price, or discuss cameras with a friend. These are all cues that might influence a consumer's response to his or her interest in buying the product.

Suppose the consumer buys a Nikon camera. If the experience is rewarding, the consumer will probably use the camera more and more, and his or her response will be reinforced. Then, the next time the consumer shops for a camera, or for binoculars or some similar product, the probability is greater that he or she will buy a Nikon product. The practical significance of learning theory for marketers is that they can build up demand for a product by associating it with strong drives, using motivating cues, and providing positive reinforcement.

c) Beliefs and Attitudes

Through doing and learning, people acquire beliefs and attitudes. These, in turn, influence their buying behavior. A belief is a descriptive thought that a person has about something. Beliefs may be based on real knowledge, opinion, or faith and may or may not carry an emotional charge. Marketers are inter­ested in the beliefs that people formulate about specific products and services, because these beliefs make up product and brand images that affect buying behavior. If some of the beliefs are wrong and prevent purchase, the marketer will want to launch a campaign to correct them.

People have attitudes regarding religion, politics, clothes, music, food, and almost everything else. Attitude describes a person's relatively consistent evaluations, feelings, and tendencies toward an object or idea. Attitudes put people into a frame of mind of liking or disliking things, of moving toward or away from them. Our camera buyer may hold attitudes such as "Buy the best," "The Japanese make the best electronics products in the world," and "Creativity and self-expression are among the most important things in life." If so, the Nikon camera would fit well into the consumer's existing attitudes.

Attitudes are difficult to change. A person's attitudes fit into a pattern, and to change one atti­tude may require difficult adjustments in many others. Thus, a company should usually try to fit its products into existing attitudes rather than attempt to change attitudes. For example, McDonald's does not sell beef and pork products in India as it is a religious taboo to eat beef or pork. In some predominantly vegetarian states like Gujarat, it even declares its franchises as "pure vegetarian" and does not offer non-vegetarian products. Moreover, considering the family orientation of Indian con­sumers, it calls its restaurants "family restaurants," unlike in the United States, where they are called "fast-food outlets." By matching today's attitudes about religion and family orientation, McDonald's has become a great success in the category of fast-food restaurants in India.

We can now appreciate the many forces acting on consumer behavior. The consumer's choice results from the complex interplay of cultural, social, personal, and psychological factors.