Environmental influences on consumer behavior

Environmental influences physical environment: collection of nonhuman elements that comprise the field in which consumer behavior occurs (spatial and nonspatial elements); social environment: all human activities and interactions; culture subculture social class reference groups family 15 4 4 4 16

In-class exercise: Hofstede’s cultural dimensions Go to http://www.geert-hofstede.com/index.shtml and read the descriptions of the four primary dimensions of cultural variation (power distance, individualism, masculinity, and uncertainty avoidance). How does the U.S. rate on the four dimensions? Which countries are highest and lowest on each dimension? What are the marketing implications of a country’s standing on each dimension?

Dimensions of cultural variation (Hofstede 1980) power distance: uncertainty avoidance: individualism/collectivism: masculinity/femininity:

use of status symbols showing people alone or as part of a group long copy and testimonials by experts respect for old age nonconforming lifestyles men or women in nontraditional roles importance of being well-groomed nuclear vs. extended family “It’s so good, you want to keep it for yourself” vs. “It’s so good, you want to share it with others” “Be the best” or “Big is beautiful” vs. “Brilliant in its simpleness”

Globalization vs. adaptation globalization: argument that companies should ignore superficial cultural differences, learn to operate as if the world were one large market, and pursue this market with standardized marketing mixes (Levitt); adaptation: argument that companies should emphasize local cultural differences, segment markets on the basis of these differences, and adapt their marketing mixes to the local culture; 9 9

Subculture culture of a segment of society that differs in significant ways from the culture as a whole; ethnic groups geographic areas age groups religious affiliations socio-economic groups 17 6 6 6 18

Social class a hierarchy of social status in a society leading to interactions of people as equals, superiors, or inferiors; influenced most heavily by educational credentials, occupation prestige level, income, and area of residence; 11 15

Reference groups A group of people that serves as a standard of reference in guiding an individual’s thoughts, feelings, and actions. Types of reference group influence: informational: normative (utilitarian): comparative (value-expressive): 19 8 8 8 20

To satisfy the expectations of fellow work associates, the individual’s decision to purchase a particular brand is influenced by their preferences. The individual seeks information from those who work with the product as a profession. The individual sometimes feels that it would be nice to be like the type of person which advertisements show using a particular brand. The brand which the individual selects is influenced by observing a seal of approval of an independent testing agency (such as Good Housekeeping). The individual feels that the purchase of a particular brand helps him show others what he is, or would like to be (such as an athlete, successful businessman, good mother, etc.).

Reference group influence on product and brand choice (Bearden and Etzel 1982) public product choice weak reference group influence strong reference group influence brand choice strong reference group influence PuNe (e.g., wristwatch, automobile, man’s suit) PuLu (e.g., golf club, snow skis, sailboat) necessity luxury weak reference group influence PrNe (e.g., mattress, floor lamp, refrigerator) PrLu (e.g., TV game, trash compactor, icemaker) private 3

Families families vs. households: a family is two or more persons residing together who are related by blood, adoption, or marriage; a household is one or more persons sharing the same housing unit; many decision are made by families or households, not individuals; consumer behavior varies over the family life cycle (based on age, marital status, and number and ages of children); 20 9 9 9 21

Parental Roles in Family Decision Making 3 wife dominant 2.5 2 autonomic syncratic 1.5 husband dominant Percentage of families engaging in joint decision making 1 0% 50% 100% 9

Parental Influence by Product Category 3 wife dominant cleaning products food wife's clothing 2.5 cosmetics children's toys appliances husband's clothing 2 vacation housing alcoholic beverages television car 1.5 other insurance life insurance husband dominant Percentage of families engaging in joint decision making 1 0% 50% 100% 10

Parental Influence by Stage of Decision 3 wife dominant 1 problem recognition 2 search for information 3 final decision 2.5 1 2 appliances husband's 3 2 clothing car 1.5 husband dominant life insurance Percentage of families engaging in joint decision making 1 0% 50% 100% 11

The family life cycle young single 8.2 % young married without children 2.9 % other young married with children 17.1 % divorced with kids 1.9 % divorced with no kids 0.1 % middle-aged (35-65) married with children 33.0 % married with no dependent children 5.5 % married with no children 4.7 % divorced with no kids 0.3 % older (65+) married, spouse present 5.2 % unmarried, no spouse present 2.0 % all others 17.2 % 21 13 10 10 22