Consumer Behaviour Unit 4 Personal and Psychological Factors of Consumer Behaviour

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Consumer Behaviour Unit 4 Personal and Psychological Factors of Consumer Behaviour

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Personal and Psychological Factors of Consumer Behaviour

CONSUMER BEHAVIOUR

VERY SHORT TYPES QUESTION & ANSWERS

A. Multiple choice question and answers:

1. At the top of Maslow’s hierarchy of needs (shown as a pyramid in the text) are ___________ Needs. 

(a) Esteem.

(b) Self-actualisation.

(c) Social.

(d) Safety.

Ans (b) Self-actualization

2. A person ___________ Consists of all the groups that have a direct or indirect influence on his or her attitudes or behaviour.

(a) Subculture.

(b) Family.

(c) Social class.

(d) Reference group.

Ans: (d) Reference group 

3. Which of the following would be the best illustration of a subculture? 

(a) religion.

(b) your university.

(c) a group of close friends.

(d) a fraternity or sorority. 

Ans: (a) religion.

4. Understanding of consumer needs and then develops a marketing mix to satisfy these needs. 

(a) Marketing concepts.

(b) Strategic plan.

(c) The product influences.

(d) The price influences.

Ans: (a) Marketing concepts.

5. ___________ Is the single factor that best indicates the social class? 

(a) Time.

(b) Money.

(c) Occupation.

(d) Passion.

Ans: (c) Occupation.

6. Marketing strategies are often designed to influence ___________ and lead to profitable exchanges.

(a) Consumer decision making.

(b) Sales strategies.

(c) Advertising strategies.

(d) Export strategies.

Ans: (a) consumer decision making 

7. ___________ Refers to the information a consumer has stored their memory a product or service. 

(a) Cognitive dissonance.

(b) Product knowledge.

(c) Product research.

(d) Marketing research.

Ans: (b) product knowledge.

8. ___________ can influence the consumers thought about products.

(a) Marketing & popularity.

(b) Advertising, sales promotion, sales people and publicity.

(c) Sales promotion, popularity and Market.

(d) Billboards.

Ans: (b) Advertising, sales promotion, sales people and publicity.

9. ___________ Describes changes in an individual behaviour arising from experience.

(a) Modelling.

(b) Motivation.

(c) Perception.

(d) Learning.

Ans: (d) learning.

10. Maslow’s hierarchy of needs Includes all except which of the following.

(a) Cognition.

(b) Physiological.

(c) Safety.

(d) Belongings.

Ans: (a) cognition.

11. Which of the following is not a part of group influence? 

(a) Social class.

(b) Social group.

(c) Reference group.

(d) Personality.

Ans: (a) personality.

12. Which step of the buyer decision process immediately precedes the purchase decision? 

(a) Evaluation of alternatives.

(b) Information search.

(c) Need recognition.

(d) Post purchase behaviour.

Ans: (a) Evaluation of alternatives.

13. The stage in the adoption process where the consumer consumers whether trying the new product make sense is called? 

(a) Interest.

(b) Trial.

(c) Evaluation.

(d) Adoption.

Ans: (c) Evaluation.

14. Another term for a motive is a ___________.

(a) Action.

(b) Need.

(c) Cue. 

(d) Drive.

Ans: (d) Drive.

15. The marketing information system begins and ends with ___________? 

(a) Marketing managers.

(b) Marketing intelligence.

(c) Information technology.

(d) Consumers.

Ans: (a) marketing managers.

SHORT TYPE QUESTIONS & ANSWERS

1. What is an attitude? explain.

Ans: Attitude R an expression of inner feelings that reflect whether a person is favourable or unfavourably predisposed to some “object” (e.g., a brand, a service, or a retail establishment). Attitudes are not directly observable but must be inferred from what people say or what they do.

2. What is personality?

Ans: personality can be defined as the inner psychological characteristics that determine and reflect how a person responds to his or her environment.

3. Define the term ‘consumer life cycle’.

Ans: Lifestyle can be viewed as a unique pattern of living which influences and is reflected by onc’s consumptions behaviour. It refers to the goal a person shapes  for himself and the way he used to reach it. Many products today are “life cycle” products, that is, they portray a style of life Sought by potential users. In other words it is a Intrinsic psychological, social cultural, and behavioural characteristic that reflects how an individual is likely to act in relation to consumption decision.

4. Explain the term ‘motivation’.

Ans: The driving force within individuals that impels them to action. (for eg., being hungry motivates them go for food).

5. What is Emotional motives?

Ans: The selection of goals according to personal or subjective criteria eg. The desire for individuality, pride, fear, affection, status etc.

6. What is Rational motives?

Ans: Motives or goals based on economic or objective criteria, such as price, size, weight or miles-per-litre.

7. What do you mean by perception?

Ans: The process by which an individual selects, organises and interprets stimuli into a meaningful and coherent picture of the world.In other words giving meaning to the environment.

8. What is selective perception?

Ans: Consumers actively seek out messages that they find pleasant or with which they are sympathetic, and they actively avoid painful or threatening ones.Eg. heavy smokers avoid articles that link cigarette smoking to cancer.

9. What do you mean by subliminal perception?

Ans: It means perception of stimuli that are below the level needed to reach conscious awareness.

10. What do you mean by learning?

Ans: It is the process by which individuals acquire the purchase and consumption knowledge and experience that they apply to future related behaviour.

11. What do you mean by distributed learning?

Ans: Learning spaced over a period of time to increase consumer retention.

12. What is massed learning?

Ans: Compressing the learning schedule into a short time span to accelerate consumer learning.

13. Differentiate needs with wants.

Ans: A need is a basic requirement without which one cannot survive. Eg. Food, water, shelter. A want is an additional requirement other than need. In other words when a need is being specified that becomes want. E.g. Bisleri bottled water, Kellogg’s corn flakes.

14. What is AIOs?

Ans: They are psychographic variables that focus on activities, interests, and opinions. It is also referred to as life style.

15. What is classical conditioning or conditioned learning?

Ans: According to Palovian theory, conditioned learning results when a stimulus paired with another stimulus that elicits a known response serves to product the same response by itself.

16. What is instrumental conditioning?

Ans: A behavioural theory of learning based on a trail-and-error process, with habits formed as the result of positive experiences (reinforcement) resulting from specific behaviours.

17. What do you mean by cues?

Ans: It is a stimuli that give direction to consumer motives (i.e., that suggest a specific way to satisfy a salient motive).

18. What are external cues?

Ans: Cues external to the product (such as price store image, or brand image) that serve to influence the consumer’s perception of a product’s quality.

19. What are intrinsic cues?

Ans: Physical characteristics of the product (such as size, colour, flavour or aroma) that serve to influence the consumer’s perceptions of a product quality.

20. What is dogmatism?

Ans: A personality trait that reflects the degree of rigidity a person displays toward the unfamiliar and toward information that is contrary to his or her own established beliefs.

21. What do you mean by foot-in-the Door technique?

Ans: A theory of attitude change that suggests individual from attitudes that are consistent with their own prior behaviour.

22. What do you mean by self concept?

Ans: Consumers have a variety of enduring images of themselves. These self image or perception of self, are very closely associated with personality in that individuals tend to buy products and services. In other words consumer seek to depict themselves in their brand choices – they tend to approach products with images that could enhance their self-concept and avoid those products that do not.

LONG TYPE QUESTIONS & ANSWERS

1. What do you mean by Personal factors? What are the personal factors influencing consumer behaviour?

Ans: A person’s buying decisions are also influenced by personal characteristics that are unique to each individual, such as age, gender, education, economic condition, life-cycle stage, personality, self concept, and life-style. Individual characteristics are generally stable over the course of one’s life. 

 The personal factor influencing the consumer behaviour are:

(a) Occupation: The occupation of an individual plays a significant role in influencing his/her buying decision. An individual’s nature of job has a direct influence on the products and brands he picks for himself/herself. 

(b) Age: age and human life cycle also influence the buying behaviour of consumers. Teenagers would be more interested in buying bright and loud colours as compared to a middle aged or elderly individual who would prefer decent and subtle designs. Bachelor would prefer spending lavishly on items like beer, bikes, music, clothes, parties, clubs and so on. A young single would hardly be interested in buying a house, property, insurance policies, gold etc. An individual who has a family, on the other hand would be more interested in buying something which would benefit his family and make their future secure.

(c) Economic Condition: The buying tendency of an individual is directly proportional to his income/earnings per month. How much an individual brings home decides how much he spends and on which products? 

Individuals with high income would buy expensive and premium products as compared to individuals from middle and lower income group who would spend mostly on necessary items. You would hardly find an individual from a low income group spending money on designer clothes and watches. He would be more interested in buying grocery items or products necessary for his survival.

(d) Lifestyle: lifestyle, a term proposed by Austrian psychologist Alfred Adler in 1929, refers to the way an individual stays in the society. It is really important for some people to wear branded clothes whereas some individuals are really not brand conscious. An individual staying in a posh locality needs to maintain his status and image. As individual’s lifestyle is something to do with his style, attitude, perception, his social relations and immediate surroundings.

(e) Personality: An individual’s personality also affects his buying behaviour. Every individual has his/her own characteristic personality traits which reflect in his/her buying behaviour. A fitness freak would always look for fitness equipments whereas a music lover would happily spend on musical instruments, CDs, concerts, musical shows etc.

2. What are the psychological factors influencing consumer behaviour? 

Ans: motivation: The level of motivation influences the buying behaviour of the consumers. It is very well explained by Maslow through his need hierarchy theory comprising of basic needs, security needs, social needs, esteem needs and self-actualization needs. Usually, the basic needs and the security needs are more pressing needs than the other and hence,these needs become a motive that directs the consumer behaviour to seek satisfaction.

Perception: The consumer perception towards a particular product and the brand also influences his buying decision. The perception is the process through which the individual selects, organise and interpret the information to draw a meaningful conclusion. Such as, Apple iPhone is perceived as a premium brand and consumers are motivated to buy it to get associated with the elite class of the society. 

Learning: The individual’s learning depends on the skills, knowledge and intention. The skills are developed through practice while the knowledge and intention are acquired with the experience. There could be a conditional learning or a cognitive learning.

In the conditional learning the consumer derives learning from being conditioned to particular stimuli, i.e. when he is exposed to the similar situation, again and again, he develops a particular response towards it. while in the cognitive learning the individual applies all his knowledge, skill, attitudes, values and beliefs to find the solution of a problem and derive satisfaction out of it. 

Attitudes and Beliefs: The individuals have certain beliefs and attitudes towards products on which their purchase decisions rests. These attitudes and beliefs are the tendency to respond to a given product in a particular way, and these make up the brand image that influences the consumer buying behaviour thus, the Marketers try to understand the attitudes and Beliefs of the individuals and modify these through several marketing campaigns.

Thus, these are some of the psychological factors that the marketer must take into the consideration before undertaking the strategic marketing decision.

3. Explain the concept of personality? Explain the determinants of personality?

Ans: The term ‘personality’ is derived from the Latin word ‘persona’ which means a mask. According to K. Young, “Personality is a patterned body of habits, traits, attitudes and ideas of an individual, as these are organised externally into roles and statuses, and as they relate internally to motivation, goals, and various aspects of selfhood.” G. W. Allport defined it as “a person’s pattern of habits, attitudes, and traits which determine his adjustment to his environment.”

Personality of an individual also influences his / her buying behaviour. Personality refers to the unique psychological characteristics of an individual. It is usually described in terms of distinguishing character traits, attitudes and habits – dominance, sociability, autonomy, authoritativeness, aggressiveness, adaptability and the like. Marketers must have in-depth knowledge of different human personalities.

Determinants of Personality:

Personality does not evolve by a single factor. It is a mixture of a lot of things. Some of those factors are psychological, some are physical, some are biological and some are even hereditary. Some of the basic factors that affects personality are:

(i) Brain: Brain is one of the most important factors of personality determinant. It is generally believed that the father and the child adopt almost the same type of brain stimulation and the later differences are the result of the environment in which the child has been grown up. Electrical Stimulation of the Brain (ESB) and Split Brain Psychology (SBP) and the outcomes of genetic transmissions and are the tools that are used by the management of any organisation to mould and amend the employee’s behaviour to a more positive and proper one.

(ii) Physical Factors: One of the most important factors in determining personality is the ‘Physical Characteristics’ of an individual. It is believed that this factor plays a vital role in determining one’s behaviour in any organisation. Physical features may involve the height of a person (short or tall), his colour (white or black), his health status (fat or skinny) and his beauty (handsome or ugly). These factors are involved when interacting with any other person and thus contribute in the personality development in many ways.

(iii) Social Factors: Social factors also play a vital role in determining one’s personality. The things that revolve and evolve around us on a regular basis determine our personality. The society that we live in, the cultural environment that we face daily, the community we get interacted to, all are included in this factor. Relationships, coordination, co-operation, interaction, environment in the family, organisations, workplaces, communities, societies all contribute in way or another as personality determinants.

(iv) Cultural and Religious Factors: The culture in which one lives in, that may involve traditional practices, norms, customs, procedures, rules and regulations, precedents and values, all are important determinants of personality. Moreover, the creed, religion and believes are also very important factors of personality determinants.

(v) Heredity: Heredity is another factor determining human personality. Some of the similarities in man’s personality are said to be due to his common heredity. Every human group inherits the same general set of biological needs and capacities. These common needs and capacities explain some of our similarities in personality. Man originates from the union of male and female germ cells into a single cell which is formed at the moment of conception.

4. What is a personal factor in consumer behaviour?

 Ans: The personal factors are the individual factors to the consumers that strongly influences their buying behaviours. These factors very from person to person that results in a different set of perceptions, attitudes and behaviour towards certain goods and services. 

The personal Factors include childhood experience, knowledge and education, personality and self-construal, sense of control, values, political and would views, goals, felt responsibility, cognitive biases, place attachment, age, gender and chosen activities. 

Personal factors can also affect the consumer behaviour. Some of the important personal factors that influence the buying behaviour are: lifestyle, economic situation, occupation, age, personality and self concept Age and life-cycle have potential impact on the consumer buying behaviour.

Consumer behaviour is strongly influenced by many internal and external factors.internal conditions incurred demographics, psychographics, personality, motivation, knowledge, attitudes, beliefs, and feelings.

Consumers buyer behaviour is influenced by four major factors:

(a) Cultural.

(b) Social.

(c) personal.

(d) Psychological.

These factors cause consumers  to develop product and brand preferences.

The process of learning is influenced by a variety of personal factors…. Some of the personal factors that influence the learning process can be classified as under-sensation and perception, fatigue and boredom, maturation, emotional condition, needs, interests, motivation. attention.

The life-cycle theory of the consumption function was developed by Franco Modigliani, Alberto Ando and brumberg.

According to modigliani, The point of departure of the life cycle model is the hypothesis that consumption and saving  decisions of households at each point of time reflect more or less a conscious attempt at achieving the preferred distribution of consumption over the life cycle, subject to the constraint imposed by the resources accruing to the household over its lifetime.

An individual’s or household’s level of consumption depends not just on current income but also, and more importantly, on long-term expected earnings.

Individuals are assumed to plan a pattern of consumer expenditure based on expected earnings over their lifetime.

5. Define perception. Discuss the characteristics of perception. What are the factors affecting perception?

Ans: The term “perception” can be defined as the ability to derive meaning. Derived from the word “perceive”, it refers to the ability of giving meaning to whatever is sensed by our sense organs. It is the process through which an individual interprets ones’ sensory impressions to give meaning to them. Schiffman defines it as “the process by which an individual selects, organises, and interprets stimuli into a meaningful and coherent picture of the world.”

Perception is the process of selecting, organising and interpreting information inputs to produce meaning. A person receives information through the senses: sight, taste, hearing, smell and touch. How and what consumers perceive strongly affect their behaviour toward products, prices, package designs, salespeople, stores, advertisements and manufacturers.

Elements/Characteristics of Perception are given below:

(i) Sensation is the immediate and direct response of the sensory organs to stimuli. A stimulus may be any unit of input to any of these senses. Examples of stimuli include products, packages, brand names, advertisements and commercials. Sensory receptors are the human organs that receive sensory inputs. 

(ii) The Absolute Threshold – The lowest level at which an individual can experience a sensation is called the absolute threshold. The point at which a person can detect the difference between “something” and “nothing” is that person’s absolute threshold for the stimulus. Sensory adaptation is a problem that causes many advertisers to change their advertising campaigns regularly. 

(iii) The Differential Threshold The minimal difference that can be detected between two stimuli is called the difference threshold or the JND (just noticeable difference). A 19th century German scientist named Ernst Weber discovered that the JND between two stimuli was not an absolute amount, but an amount relative to the intensity of the first stimulus. 

Perception of a consumer is affected by the following factors:

(i) Motives and needs: Our motives and needs will definitely influence our perception. For example, a hungry person is motivated to recognise only the food items among other articles. His attention cannot be directed towards other things until his motive is satisfied.

(ii) Cognitive styles: People are said to differ in the ways they characteristically process the information. Every individual will have his or her own way of understanding the situation. It is said that the people who are flexible will have good attention and they are less affected by interfering influences and to be less dominated by internal needs and motives than or people at the constricted end.

(iii) Mental set: Set refers to preparedness or readiness to receive some sensory input. Such expectancy keeps the individual prepared with good attention and concentration. For example, when we are expecting the arrival of a train, we listen to its horn or sound even if there is a lot of noise disturbance.

(iv) Selectivity: This is the degree to which the brain is selecting from the environment. It is a function of how much is going on around the individual, and also of how selective (concentrated) the individual is on the current task. Selectivity is also subjective. Some people are a great deal more selective than others.

(v) Expectation: Expectations affect the perception of a person. Expectations are related with the state of anticipation of particular behaviour from a person. For example, a technical manager will expect that the non- technical people will be ignorant about the technical features of the product.

(vi) Situation: Elements in the environment surrounding an individual like time, location, light, heat etc., influence his perception. The context in which a person sees the objects or events is very important.

(vii) Cultural Upbringing: A person’s ethics, values and his cultural upbringing also play an important role in his perception about others. It is difficult to perceive the personality of a person raised in another culture because our judgement is based upon our own values.

(viii) Past experience: This leads us to interpret later experience in the light of what we already know. Psychologists call this the law of primacy, Sometimes sights, smells or sounds from our past will trigger off inappropriate responses: the smell of bread baking may recall a village bakery from twenty years ago, but in fact the smell could have been artificially generated by an aerosol spray near the supermarket bread counter.

6. What are the economic factors influencing consumers’ behaviour?

Ans: The economic factors are the factors that talk about the level of sales in the market and the financial position of the consumer, i.e. how much an individual spends on the purchase of goods and services that contribute to the overall sales of the company.

The following are the main economic factors that greatly influence the consumer buying behaviour:

(i) Personal income: The personal income of an individual influences his buying behaviour as it determines the level to which the amount is spent on the purchase of goods and services. The consumer has two types of personal incomes disposable income and discretionary income.

(a) The disposable personal income is the income left in hand after all the taxes, and other necessary payments have been made. The more the disposable personal income in hand the more is the expenditure on various items and vice-versa.

The discrepancy personal income is the income left after meeting all the basic necessities of life and is used for the purchase of the shopping goods, luxuries, durable goods, etc. An increase in the discretionary income results in more expenditure on the shopping goods through which the standard of living of an individual gets improved.

(b) family Income: The family income refers to the aggregate of the sum of the income of all the family members. The total family income also influences the buying behaviours of its members. The income remaining after meeting all the basic necessities of life can be used for the purchase of shopping goods, luxury items, durable goods, etc.

(c) Income Expectations: An Individual’s expectation with respect to his income level in the future influences his buying behaviour today. Such as, if a person expects  his income to increase in the future, then he will spend more money on the purchase of the luxury goods, durables and shopping goods. And on the contrary, if he expects his income to fall in the future his expenditure on such items also reduces. 

(d) Consumer credit: The credit facility available to the consumer also influences his buying behaviour. If the credit terms are liberal, and EMI scheme is also available, than the customers are likely to spend more on the luxury items, durable goods, and shopping goods. This credit is offered by the seller either directly or indirectly through the banks and other financial institutions.

(e) Liquid Assets: The liquid assets with the consumer also influences his buying behaviour. The liquid assets are the assets that are readily convertible into the cash. If the customer has more liquid assets, then he is likely to spend more on the luxury items and the shopping goods. On the other hand, if the liquid assets are few then the expenditure on luxury items also reduces. 

(f) Savings: The amount of savings out of the personal income also influences the consumer buying behaviour. Such as, if the customer decides to save more for a particular period, then his expenditure on the other items will be less and in case the savings are less the expenditure on other items increases.

7. Lifestyle is the result of such forces as culture, values, resources, symbol, licence and sanction. Explain the statement.

Ans: According to Laser lifestyle is a distinctive or characteristic mode of living that is applied by a group of people. It is a systems concept in so far as lifestyle is shaped by the forces of living in a group with its specific culture, values, resources, symbols, licence, and sanctions.Lifestyle involves classifying people according to their values, beliefs, opinions, and interests. There is no one standardised lifestyle segmentation model, instead market research firms, and advertising agencies are constantly devising new categories, which will best help target possible consumers of their clients products. Lifestyle is an important aspect when looking at consumer choices. Just because there may be two women with similar age and income, does not mean they’re likely to purchase the same products. People’s lifestyle comes into play especially when they come to high involvement products. These products carry high risk, are complex or have high price tags. They may be a car, home or insurance policy lifestyle comes into play here. Take for example buying a home. Some people might be outdoorsy, love gardening and want quiet. Whereas another couple may love fresh air, need a medium sized home and love the beach.Self-image is a strong aspect when thinking about how lifestyle affects purchases. The way someone feels they should look will strongly affect what they buy.

8. What are the social factors influencing consumer behaviour? 

Ans: The social factors are the factors that are prevalent in the society where a consumer lives in. The society is composed of several individuals that have different preferences and behaviours. These varied behaviours influence the personal preferences of the other set of individuals as they tend to perform those activities which are acceptable to the society.

The following are the important social factors that influence the behaviour of an individual in one or the other way:

(a) family: The family members play a crucial role in designing one’s preferences and behaviour. It offers an environment wherein the individual evolves, develop personality and acquire values. A child develops his buying behaviour and preferences by watching his parents and tend to buy the same products or services even when he grows old. The family can influence the buying behaviour of an individual in either of the two ways: 

(i) Influence the personality, attitude, beliefs, characteristics of the individual.

(ii) influence the decision making of an individual with respect to the purchase of certain goods and services.

(b) Reference group: A reference group is a group which an individual likes to get associated, i.e. want to be called as a member of that group. It is observed, that all the members of the reference group share common buying behaviour and have a strong influence over each other. 

The Marketers should try to identify the roles within the reference group that influences the behaviour of others. such as Initiator (who initiates the buying decision), Influencer (whose opinion influences the buying decision), decision-making (who has the authority to take the purchase decision) and buyer (who ultimately buys the product).

(c) Roles and Status: An individual’s position and role in the society also influences his buying behaviour. Such as, person holding a supreme position in the organisation is expected to purchase those items that advocate his status. The marketers should try to understand the individual’s position and the role very much before the endorsement of the products. 

Thus, The social factors Play a crucial role in building the behaviour of an individual, and the marketers should understand it properly before designing their marketing campaigns. 

9. What are the cultural factors influencing consumer behaviour? 

Ans: The cultural Factors are the factors that an individual learns at a very early stage of life due to socialisation within the family and other key institutions, such as the set of values, preferences, behaviour patterns, and perceptions are learned as the individual grows. 

(a) Culture: The culture refers to the beliefs, customs, rituals and practise that a particular group of people follows. As a child grows, he inculcates the buying and decision-making patterns through his family and the key institutions. The culture varies from region to region and even from country to country. Such as the sale of “sarees” and “lungis” is more in south than the north India. Therefore, the Marketer should carefully study all the different cultures and frame the marketing strategies accordingly. 

(b) Subculture: The culture can be further divided into subculture wherein the people are classified more specifically on the basis of their shared customs and beliefs, including religions, geographic regions, nationalities, etc. the different sub-cultures forms several market segments whose needs can be carefully studied by the Marketer, and the strategic marketing decisions can be taken accordingly. Such as the needs of the people living in metro cities and the ones living in B-grade cities must be identified before the launch of the marketing campaign.

(c) social class: the social class to which an individual belongs influences the buying decision. Generally, the people belonging to the same class are said to be sharing the similar interest, value and the behaviour. Our society is classified into three social classes upper class, middle class, and the lower class. The consumers belonging to these classes possess different buying behaviours. Such as an individual belonging to the upper class buy those products or services that advocate his status while the lower class people buy those products which satisfy their basic needs.

10. What is segmentation? What are the techniques of segmentation? 

Ans: Markets are Heterogeneous; segmentation divides them into Homogeneous sub-units The market for a product is nothing but the aggregate of the consumer of that product markets break up the Heterogeneous market for product into several sub units, or sub markets, each relatively more homogeneous within itself, compared to market into a number of sub markets/ distinct sub units of buyer, each with relatively more homogeneous characteristics, is known as market segmentation. It is the consumer who are Segmented, Not product, nor price It would be useful to provide one important clarification right at the beginning. Markets, sometimes, speaks of product segments and price segments and use these expressions as synonymous with market segments. This can leads to a wrong understanding of what market segments, or for that matter, the process of market segmentation as a whole, actually connote we have to be clear that in market segmentation, it is the consumers who are Segmented, not the product, nor price. Market is about people who consume the product, not about the product that’s gets consumed. 

Importance of segmentation:

(a) Facilities Right choice of target market.

(b) Facilities Effective tapping of the Chosen market.

(c) Makes the marketing Effort more Efficient and Economic.

(d) Helps Identify less satisfied segments and concentrate on them.

The bases of market segmentation: A market/consumer population for a product can be segmented using several relevant bases. 

The major ones include:

(i) Geographic.

(ii) Demographics.

(iii) Socio-cultural.

(iv) Psychographic.

(v) Buying Behavior.

Bases for segmentation: 

(a) Geographical segmentation: Segmentation of consumer based on factors like climate zone, continents/country, region, state, district, and urban/rural area, Constitutes geographic segmentation marketer, who operate globally, often segment the market segments the market by continents/country/region in the first instance, and then go for segmentation on other bases. National Markets within a country like India, often segment the market by region, state, district and urban/rural area, in the first instance, and then go for segmentation on other bases.

(b) Demographical Segmentation: segmentation of consumer based on variables such as race, religion, community, language, gender, marital status, family age, stage in family cycle, size, occupation, economic position/Income/purchasing capacity level, and social status, of the consumer demographic segmentation.

Based on age on can have the:

(i) Infants.

(ii) Child market teen market.

(iii) Youth market.

(iv) Middle Aged market.

(v) Elders market.

Genders: on the basis of gender, the consumer market May be classified into male market female market.

Companion design their products and services for particular social classes.

There are three social classes:

(i) Upper classes.

(ii) Middle classes.

(iii) Lower class.

Social and Cultural segmentation: culture and social class are the two main bases of segmentation here. 

Culture: Culture influence consumer behaviour, deeply. A given culture brings in its own unique pattern of social conduct. A person usually acquires his cultural attributes right at his childhood. Culture includes religious, caste, traditional, language, pattern of social behaviour

Social factors: social group of varying types exert influenced on the consumer. Social group include family, peer group, close colleges. They adopt their common life style. 

Psychographic Segmentation: psychographic segmentation groups customers according to their life-style and buying psychology. Many businesses offer products based on the attitudes, beliefs and emotions of their target market the desire for status, enhanced appearance and more money are examples of psychographic variables. They are the factors that influence your customers’ purchasing decision. In psychographic segmentation, elements like life style, activities attitude, self-concept and value system, form the base. A person’s pattern of interests, opinions, and combine to represent his or her lifestyle.

(i) knowledge of lifestyle can provide a very rich and meaningful picture of a person.

(ii) It can indicate whether the person is interested in outdoor sports, shopping, culture, or reading.

(iii) It can include information concerning attitudes and personality traits.

(iv) Lifestyle also can be used to define a segment empirically; this is often called psychographic (as opposed to demographic) segmentation.

Behavioural segmentation: The customer can also be divided into certain segments on the basis of their knowledge, attitude, use, or response to a product.

Such behavioural variables are discussed below: 

(i) Occasions: (Marriages, festival occasasions) 

(ii) Benefits sought: (Colgate-White teeth stops bad breath, cibaca provides Therapeutic benefits, Vicco vajradanthi and neem gives ayurvedic benefit) 

(iii) User Status: (Ex-users, first users, regular users, Potential users) 

(iv) Usage rate: (Light, Medium, and heavy user segments) 

(v) Loyalty status: (Hard core loyal, split loyal (Two or Three brands), Shifting loyal (Shift from one brand to another), Switchers (No loyalty to any brand)

(vi) Attitude: Customers are divided into five groups (Enthusiastic, positive, Indifferent, Negative and Hostile). 

11. What is the meaning of Lifestyle in Consumer behaviour? 

Ans: In consumer marketing, lifestyle is considered a psychological variable known to influence the buyer decision process for consumers. Lifestyle can be broadly defined as the way a person lives. In sociology, a lifestyle typically reflects an individual’s attitudes, values, or would view. A lifestyle is a means of forging a sense of self and to create cultural symbols that resonate with personal identity.

Marketing campaigns to reach and persuade consumers are created with the intention to align the product’s position with the target market’s lifestyle characteristics. Variables such as consumers’ interest in hunting; their attitude toward climate change; and, their deeply held opinion on fair-trade products, can therefore be used to both better understand the market and its behaviour, and position products effectively. It is the multifaceted aspect of lifestyle research that makes it so useful in consumer analysis.

Lifestyle is a distinctive mode of behaviour centred around activities, interests, opinions, attitudes and demographic characteristics distinguishing one segment of a population from another. A consumer’s lifestyle is seen as the sum of his interactions with his environment. Lifestyle studies are a component of the broader behavioural concept called psychographics. 

Lifestyle refers to the way consumers live and spend their time and money. It is determined by one’s past experiences, innate characteristics, and life situations.The lifestyle of a person is typically influenced by his/her needs, wants, and motivations and also by external factors such as culture, family, reference group, and social class. 

The lifestyle of a person involves his consumption pattern, his behaviour in the market place, practices, habits, conventional ways of doing things, allocation of income, and reasoned actions. It reflects an individual’s attitudes, values, interests, and views towards society. 

12. Write the characteristics of lifestyle.

Ans: following are the characteristics of lifestyle:

(a) Lifestyle is a group phenomenon: A person’s lifestyle bears the influence of his/her participation in social groups and of his/her relationships with others. Two clerks in the same office may exhibit different Lifestyles. 

(b) Lifestyle pervades various aspects of life: An individual’s Lifestyle May result in certain consistency of behaviour. Knowing a person’s conduct in one aspect of life may enable us to predict how he/she may behave in other areas.

(c) Lifestyle implies a central life interest: for every individual there are many central life interests like family, work, leisure, sexual exploits, religion, politics etc. that may fashion his interaction with the environment.

(d) Lifestyle vary according to sociologically relevant variables: The rate of social change in a society has a great deal to do with variations in lifestyles, so do age, sex, religion, ethnicity and social class. The increase in the number of double income families and that of working women have resulted in completely different Lifestyles in the 1980’s in India.

13. What is Self concept in Consumer behaviour? Explain the major aspects of Self concept. 

Ans: Self concept is defined as the way, in which we think, our preferences, our beliefs, our attitudes, our opinions arranged in a systematic manner and also how we should behave and react in various roles of life. self concept is a complex subject as we know the understanding of someone’s psychology, traits, abilities sometimes are really difficult. Consumers buy and use products and services and patronise retailers whose personalities or images relate in some way or other to their own self-images.  

Traditionally, individuals are considered to be having a single self-image which they normally exhibit. Such type of consumers are interested in those products and services which match or satisfy these single selves. However, as the world became more and more complex, it has become more appropriate to think of consumers as having multiple selves.

Self-concept can be described simply as how one perceives himself and his behaviour in the market place. It is the attitude one holds towards himself. what one thinks of himself. The self concept is not very realistic because an unconscious component is always present. 

Self-concept is a social phenomenon. It is an attitude to the self. Consequently, the way we dress, the products we use, the service we require, depend on how we want to perceive ourselves. There is a relationship between the self – image of a person and the product one wants to buy. Products act as symbols for consumers.

 The Below are some of the major aspects of self- concept:

(i) self-concept is organised: we all have various views about ourselves.We all may think we are kind, calm, patient, selfish, rude and what not. It doesn’t matter what perception you have about yourself. But the one perception that facilitates all these insights is organised self concept. When a person believes in something that matches his self concept he sticks to his view and does not agree to change the same and even if does, it takes a lot of time.

(ii) self concept is learned: it is believed that self concept is learned and no person is born with a self concept. It develops as and when we grow old. Our self concept is built when we meet people socially and interact with them. We are the ones who shape or alter our self concept and its quite natural that we may have a self concept different for ourselves as compared to what people think about us.

For example – If an individual thinks, he is very generous and helpful, it may not necessarily be the case with others. Others may see him as a selfish person.

(iii) Self concept is dynamic:  our self concept in life is not constant and it may change with instances that take place in our lives. When we face different situations and new challenges in life, our insight towards things may change. We see and behave according to the things and situations.

Thus, it is observed that self concept is a continuous development where we let go things that don’t match our self concept and hold on those things that we think are helpful in building our favourable perception. Self concept is the composite of ideas, feelings, emotions and attitudes that a person has about their identity and capabilities.

14. What are the 5 personality traits?

Ans: These traits are extroversion, conscientiousness, agreeableness, openness, and neuroticism or sometimes referred to as emotional intelligence.

(i) Extraversion is characterised by outgoing, talkative, sociable and assertive behaviour. Extraverts often engage in “actions [that are] directed toward obtaining power and dominance” 

(ii) Conscientiousness: The personality trait of conscientiousness is characterised by diligence and organisation. Conscientiousness is described by words like “precise,” “efficient,” “orderly,” and “persistent.” Conscientious individuals generally do not like the idea of spending a lot of time in waiting lines, since it is perceived to be inefficient. 

(iii) Agreeableness: The personality trait of agreeableness is related to the need for pleasant, cooperative and harmonious relations. Agreeable people are courteous, flexible, tolerant and forgiving. By contrast, people who display low levels of agreeableness tend to be more competitive in their day-to-day activities.

(iv) Openness: Openness of a consumer is also key for marketers to take into consideration. If someone is open to things that means they are willing and able to try new ideas and products. This is important when introducing a new product because there are going to be those consumers who are afraid to venture off from the product they are used to, but marketers can use research and find what it takes to get to the closed off consumers and make them willing to try new things and be a bit more open. Consumers who are open-minded on the other hand, don’t necessarily have to stay with the clear cut product, but they are willing to try new things and be adventurous.

(v) Neuroticism: Neuroticism is a trait where individuals are prone to negative thoughts such as anxiety, anger, envy, guilt and so on. Such individuals are often in a state of depression and do not know how to enjoy life. They always look at the negative sides of life and find it extremely difficult to cope up with stress.

15. Why lifestyle is an important aspect to consider.

Ans: Below will be some examples of why lifestyle is an important aspect to consider:

(i) Status in the Society: Social status is one of the key elements to how and why people buy certain products and services. It affects the quality and quantity of what people buy. Persons enjoying higher status in the society do spend a good amount of money on luxury items such as luxury cars, luxury watches, premium brands of clothing, jewellery, perfumes, etc.

(ii) Product involvement: People’s lifestyle comes into play especially when they come to high involvement products. These products carry high risk, are complex or have high price tags. They may be a car, home or insurance policy lifestyle comes into play here. Take for example buying a home. Some people might be outdoorsy, love gardening and want quiet. Whereas another couple may love fresh air, need a medium sized home and love the beach.

(iii) Activities: The activities people undertake vitally determine how their money will be spent. For example: if a person is dedicated to the gym and works in a gym, then they’re likely to spend most of their money on gym clothes, weights, exercise machines and healthy food.

(iv) Self-image: Self-image is a strong aspect when thinking about how lifestyle affects purchases. The way someone feels they should look will strongly affect what they buy.

16. Write short notes on:

(i) Self – Concept.

Ans: Self concept is defined as the way, in which we think, our preferences, our beliefs, our attitudes, our opinions arranged in a systematic manner and also how we should behave and react in various roles of life. self concept is a complex subject as we know the understanding of someone’s psychology, traits, abilities sometimes are really difficult. Consumers buy and use products and services and patronise retailers whose personalities or images relate in some way or other to their own self-images. Traditionally, individuals are considered to be having a single self-image which they normally exhibit. Such type of consumers are interested in those products and services which match or satisfy these single selves. However, as the world became more and more complex, it has become more appropriate to think of consumers as having multiple selves.

Self-concept can be described simply as how one perceives himself and his behaviour in the market place. It is the attitude one holds towards himself. what one thinks of himself. The self concept is not very realistic because an unconscious component is always present. Self-concept is a social phenomenon. It is an attitude to the self. Consequently, the way we dress, the products we use, the service we require, depend on how we want to perceive ourselves. There is a relationship between the self – image of a person and the product one wants to buy. Products act as symbols for consumers.

(ii) Nature of perception.

Ans: (i) Perception is a complex process. After a stimulus is detected by the sense organs, the perception process comes into play and involves the interplay of three processes, viz., selection, organisation and interpretation. It is a dynamic process.

(ii) It is also an intellectual process; it involves a lot of cognitive effort. Once sensation takes place, the perception process involves the selection, organisation and interpretation of data.

(iii) Perception is broad in nature; it includes a physiological component (through sensation), as well as sociological and psychological components.

(iv) Perception is a subjective process as two people may perceive the same stimuli differently. While two persons may be exposed to the same stimuli, the manner in which they select them, organise and interpret them is different. This is because the two are impacted by their background, learning and experiences, motivation, personality, cultures, values and lifestyles, social class effects etc which may be different from each other.

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