Top 5 Important Factors Which Influence Consumer Behaviour in India

Traditions, values, norms, rules, and attitudes come from many sources, but majority of them come from culture and influence the way one is brought up in a society. Within a culture, there may be many sub-cultures based upon religion, nationality, race, geographical areas, language or racial groups.

The north Indians cannot live without chapatti, but southerners cannot live without idli-dosa. In the US and UK, people call others with their first names, but in China more formal behaviour would be required.

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Culture determines what we eat, drink, wear, where we stay and how we travel. In India, Hindus do not eat non-vegetarian food during Navratras. That is why McDonald’s does not prepare non-vegetarian burgers during that period. Even the colour is greatly influenced by culture. On funeral, Indian wear white clothes, but in western culture black colour is the preference for the occasion.

When cultural change takes place the marketing mix also gets affected. Today, in urban India, many women work and thus family income jumps. Working women do not have time. The result is increase in eateries and time-saving electronic gadgets.

A culture comprises different subcultures. A subculture is a group of individuals who have similarity of values and behaviour patterns and different from that of surrounding culture. In the US culture there are many subcultures which include African American, Hispanic, Jewish, Indian Americans, etc.

In Delhi, existence of different state associations like Rajasthan Parishad, Andhra Association, etc. are an effort to showcase their subculture and preserve it. Please note that one individual may be member of more than one subculture. Someone born in Andhra and brought up in Tamilnadu may represent the features of both the subcultures. However, it is not necessary that every member of a subculture follows the values and behaviour attributed to the same subculture.

In the Indian context, culture is an important element to be taken care of. About a quarter century back, a brand Velvette introduced shampoo in sachets and now almost all the MNCs are marketing a larger share in sachets only. High degree of price sensitivity is a strong characteristic of Indian culture. Another feature of Indian culture is products have close linkages with cultural values. Marketing managers would have to time the products, especially new mindset products (like cigarette to professional women had to be withdrawn because our culture does not support the idea).

Social Class:

Social class indicates people who are approximately equal in terms of their incomes and social standing in the community. Social class groupings or social stratification are heavily dependent upon society’s cultural background. Indian society is more hierarchical – Brahmins, Vaishyas, Kshatrias, and Shudras.

The Brahmins are at the top and Shudras at the bottom. However, societies in Scandinavia and Japan have much flatter structure. In some societies people belong to a class due to birth; but in some societies, which are open, individuals can move from one class to another class. Social class impacts people’s expenditure, savings and credit purchases. Many Indians even today believe not to spend beyond their income.

Decisions like what we buy, in what quantity we buy, and what quality we buy are influenced by the social class we belong to. Behaviour of one social class may be imitated by another class, which is known as trickle-down effect. Products meant for lower social classes may be adopted by people of higher classes, as happened in case of jeans. Jeans were basically meant for working class, but soon adopted by upper classes.

Similarly a product meant for upper classes may see a lower version for adoption by lower classes. Thus, there may be both downward and upward mobility. The impact of groups or group norms on individual behaviour is called the Asch phenomenon, named after social psychologist SE. Asch, who documented characteristics of individual behaviour.

Marketers determine their strategy of marketing mix to woo particular social class consumers. This may be done through particular store location and its interiors, product design and features, pricing, and promotion. The appeal used in Giorgio Armani is — Handmade to measure. In India, most of the MNCs concentrate on growing middle class.

Reference Groups:

An individual may belong to many groups. A reference group is a group which influences an individual because that individual is a member of a group or aspires to be a member of some group. Reference group is used as a criterion for self- evaluation.

Reference groups can be of many types, like formal (members of a professional group), and informal (social friends); primary (family, friends and close colleagues) and secondary (trade union, trade association, sports club); Aspirational groups (the groups individual would like to join), Disassociative groups (individual does not want to join like corrupt politicians); and Automatic Groups (to which one belongs to by virtue of age, gender, culture, or education).

A person belonging to particular class will adopt the buying behaviour acceptable to the group because of normative influence or compliance (because non­compliance will invite group disapproval); value-expressive influence (need for psychological association with the group); and informational influence (reference to the group before purchase).

It has also been found that young mothers accept the opinion of friends with young children than the doctor, mother-in-law and the sister-in-law. Similarly, poor people are more influenced by informal reference groups, while wealthier people are more influenced by formal groups. Clothing, jewellery, cars, furniture, residential apartments and hard drinks are highly influenced by group influence.

Family:

Family is primary reference group and as such it influences purchasing behaviour a lot. Most people belong to at least two families in their lifetime— One in which they are born into and the second, they eventually create later in life. Apart from the fact, every consumer, if gets married the family influences of his own and that of in-laws, both influence the purchase behaviour.

The family of husband, wife and one or more children has been referred to as the “cornflake packet” family. The food habits are always influenced by the family in which one is born and raised. A child’s perception is greatly influenced by the parental influence. Parents also buy products to provide best of care and love to their children. Purchase of disposable diapers and baby food are the examples to this effect.

Families may have one or all of the following characteristics:

1. Face-to-face contact:

Family members normally see each other daily (people going for work to Mumbai from Pune may be meeting only on holidays) and a few of the members may be advisers, others may be information-providers, and yet others may be decision makers.

2. Shared Consumption:

In a family fridge, Television, iron, washing machine, and drawing room and living room furniture are shared. Food is purchased and cooked collectively. However, in India where Joint family has been the norm, now separate TV and Washing Machine have been accepted.

3. Subordination of individual needs:

Since consumption is shared, some members in the family may not find their objectives getting preference over others. These members have to subordinate their needs to overall family needs.

4. The buying agent:

Where women are not working, they go in for shopping. Since mothers are also working the shopping has to be done by teens and the fathers. Even otherwise teens devote more time to TV, most of the marketers try to communicate with them.

Roles:

In India, presently the children have become more active participants and shoppers. They exert huge influence on purchase of car and television (which car to buy and what colour to buy). It is not uncommon to listen – ‘well this car is a signature statement.’

A customer has to play different roles and his behaviour too changes accordingly. Our attire should be different when we go for the morning walk, go to office, go to parties and go for sleep.

Women have to play the role of a housewife and also go to work and the attire would be different. Women feel more confident and individual in making purchases.

In a family marketers concentrate on four roles:

1. Both husband and wife including children, make individual decisions, like personal care.

2. Husband dominated role, like buying a generator.

3. Wife dominated role, like buying for kitchen or clothing for children.

4. Joint decisions, like purchase of a house.

An Opinion Leader:

In every informal group, there may be one or more opinion leader (s). The Opinion leader makes available information about a particular subject like car mileage. Other group members seek expert advice from him. Opinion leaders may not be authority on each and every subject. But being the opinion leader, one tries to remain informed of on every subject. An opinion leader becomes very important when the consumer (group member) involvement with the product is high and knowledge about product is low. Opinion leaders may be from the family itself.

2. Demographic Factors:

Population-Size:

A country’s consumer behaviour shall be highly influenced by the population size. More the population, more the income and more shopping will be done. More expenditure on food and groceries will be there.

Age:

Consumers of different age groups have different needs. At the same time, people belonging to same age groups differ in many other ways, they tend to share a set of values and common cultural experiences that they carry throughout life. Marketers initially develop a product to attract one age group, and then make an effort to broaden the appeal. McDonald’s initially targeted children and now targets the entire family.

Gender:

Differentiating by gender starts very early. Though the social attitudes to gender discrimination are much reduced, but in terms of different requirements is a reality. Diapers for women are pink. The undergarments are different for two genders.

Family Structure:

Another demographic factor which influences a consumer’s spending priorities is a person’s family and marital status. Young bachelors and newlyweds go to movies and eat out. Families with young children spend a lot on education and health foods. Older people often spend on home maintenance.

Birth and Death Rates:

In India, both the birth rate and death rate have gone down. The average age of an individual has gone up. Thus, there is a substantial segment of elderly people who have greater income and greater purchasing power.

Working Class:

In India the age group of 24 to 60 is substantial, even greater than China. Thus India is able to reap demographic dividend. Since more people are earning so they have more disposable income to spend. Working class buys dresses according to their professions.

Ethnic Changes:

Over the time the ethnicity changes. Indians have accepted jeans and tee shirts, burger and pizza, English films and music, and the other western practices and rituals.

3. Economic Factors:

Income:

The distribution of wealth is of great interest to marketers since it determines which groups have the greatest purchasing power and market potential.

Size of the Family:

Size of the family influences consumer behaviour in terms of quantity to be purchased per frequency and on the whole. More nuclear the families are more the small flats are demanded.

Income Expectations:

If the future income is to be appreciated, present expenditure may be up. People buy flats, cars or big ticket items, in expectation of future income.

Credit Facilities:

Banks extend credit facilities for housing and cars. Most of the houses and cars are purchased on credit from the banks. Similarly most of the motorcycles are purchased on credit provided by autofinance companies.

Expenditure Pattern and Saving:

People in different groups have different pattern of expenditure and savings. People in lower income group spend more on food expenditure and have little savings. Most of the middle class customers spend on durables, whereas, customers of higher income class spend more on jewellery and artistic possessions.

Personal Influences:

Personal attributes such as age, occupation and financial situation, the personality, family life stage and the lifestyle is bound to affect consumer behaviour. We have already included them in demographic and economic factors.

4.Psychological Influences:

There are individual factors like motivation, perception, learning, beliefs and attitudes, which influence consumer behaviour.

Motivation:

Different individuals have different needs even at one time ranging from psychological to safety to social to esteem to self-actualisation needs, as shown by the hierarchy of needs theory of Maslow. These needs may lie dormant at any particular time but once aroused to a high enough level they get into motivational force.

According to Freud’s theory of motivation an individual’s buying behaviour will be guided by unconscious motive. A person may be buying a deodorant to remain freshened up during summer season, but unconscious motive may be to impress young lady.

Maslow says that to begin with people would need basic requirements of life and once the lower order need is fulfilled then they get motivated by the needs at the next level. It means people would need different products and services as they move up the hierarchy. At the first level, people need Roti (Food and water), Kapda (clothing), and Makan (shelter).

Even sex is a basic need and that is why marketers of Colgate toothpaste and Axe deodorant promote those brands on the basis of sex appeal. At the next level of hierarchy are safety needs – ‘security and freedom from physical and emotional pain and suffering’. People go in for buying life and Medical insurance policies, decay-fighting toothpastes, food nutrients, vitamins, and other health protectors.

At the third level are the social needs – ‘need for love and affection and a sense of belonging’. People buy cosmetics, ageing creams, go to gyms, buy jewellery and so on to show their belongingness. At the fourth level there are esteem needs – ‘respect and recognition from others and a sense of one’s own worth’. People buy costly cars, wear Armani suits, carry Louis Vuitton bags, fly first class, go for foreign travel, and acquire club memberships. And at the highest level are self-actualisation needs -‘need to grow and become what one is capable of. At this level people learn music and yoga, which they could not due to other preoccupations.

Perception:

Perception is the process through which ‘people select, organise and interpret stimuli to the five senses of sight, sound, smell, taste and touch’ . The reaction of a consumer to a product or the store depends upon his perception of external stimulus. Different people perceive the same thing at the same time in different ways.

A 3-year old Alto car for a teenager is thrilling as it is the first car in the household; the parents may see in it a long overdue status seeking; for others it may be just an automobile; and for the second-hand car dealer, it is just a commodity to sell. Different individuals may perceive differently due to ‘selective attention or exposure (not conscious of all the inputs), selective distortion (‘twisting currently received information) and selective retention (only remembering the information which is compatible with personal feelings and beliefs).

“Perception is the process of selecting, organizing, and interpreting information inputs to produce meaning. Information inputs are sensations received through sight, taste, hearing, smell, and touch.”

Selective attention:

It refers to the tendency of individuals to not to give attention to the majority of stimulants. You come to college from your home and lot of stimuli is communicated, you remember only Nokia Phone communication and do not give attention to all of them because of selective attention. The phenomenon is also called as selective exposure.

Selective Distortion:

It means that people process information within their present state of attitudes and beliefs. At times we read what we think rather than what is written. Why don’t you remember all the stimulants you heard and saw, because you remember only that information that reinforces your attitudes and beliefs?

Perception is an important variable for market segmentation as it is related with learning, attitudes, and beliefs.

Learning:

Learning, in marketing context, indicates to immediate or expected changes in consumer behaviour as a result of experience. Learning can take place through conditioning, social learning and cognitive (mental) learning.

Conditioning; Reinforcement is necessary for individuals to develop attitudes and beliefs. This is the reason companies constantly go in for communicating. If a person’s experience with a product or service is positive, it would reinforce positive attitudes and beliefs, and the product/service will be bought again. However, the negative experience will lead to negative attitudes and it may lead to negativity even for the other products of the same brand or manufacturer.

Social learning:

Instead of individual learning, individuals may learn from the slogan or the behaviour of others. Iodex slogan – ‘Iodex maliye, Kaam par chaliye’ forms the attitude about its attributes. An individual may buy Colgate Salt because his colleague has reported positive experience.

Cognitive learning:

In case of high involvement buying, an individual may use his own cognitive learning to develop his own attitudes and beliefs about a product.

Attitudes and Beliefs:

An attitude is a general, mental, and intentional response to a given product, store, advertising, and people. Since attitudes are learnt, it is possible to change them. Attitudes are a person’s enduring favourable or unfavourable evaluations, emotions, or action tendencies toward some object/idea or person.

An attitude, thus, has cognitive (information and knowledge about an object or concept), affective (dealing with feelings or emotional reaction) and behavioural (tendencies to act in a particular manner) components. Attitudes do influence our purchase behaviour. Companies sponsor sports or other events so that customers’ attitudes get favourable. We may drink Coca Cola, as it was the official drink of World Cup Cricket. But a favourable attitude may not evince interest in buying the product, because attitudes are controlled by situation.

Personality:

“It is a set of internal traits and distinct behavioural tendencies that result in consistent patterns of behaviour in certain situations.”

5. Situational Influences:

Circumstances, location and time also affect the consumer buying behaviour. Situational factors can influence the buyer during any stage of buying process and may cause the process to extend, shorten or terminate the process. Russell W. Belk has classified the situational factors into five categories – Physical surroundings, social surroundings, time perspective, reason for purchase, and the buyer’s momentary mood and condition.

Physical surrounding refers to location, store atmosphere, aroma, sounds, lighting, weather and other factors in which the decision is made. Many stores and departmental stores create such an atmosphere conducive to making purchase decisions. Scorching summer encourage the customers to buy fridges, coolers, air conditioners, ice creams, etc. and if the summers are cool then may discourage to buy the same.

Social surroundings include the presence of friends, relatives, kids. Buyers may be compelled to behave in a particular way. Also influence is the presence of people in whose product is to be consumed. In Indian marriages a lot is spent on buying the items, which would otherwise not be purchased, because of the presence of in-laws.

Many potential customers just don’t make purchases because they don’t get the requisite attention. Time plays an important role in buying behaviour. Buyer does consider the possible frequency of product use (lehnga choli only on marriage day), the length of time required to use the product, and the length of the product life, at what time of day/month/season the buying is made, the time required to make purchases.

If the product is for own use, one would like to buy the best than bought for gifting, where budget constraint may loom in mind. And finally, the buyer’s moods (anger, happiness, anxiety, eagerness, contentment) or momentary conditions (Illness, winning a lottery, receipt of unexpected money, etc.) also influence buying decisions.