UNIT 1

Introduction

1.1    Introduction: Nature, scope and importance marketing; Evolution of marketing concepts; Marketing mix, Marketing environment.

Marketing is the action, set of organizations, and cycles for making, conveying, and trading contributions that have an incentive for clients, customers, accomplices, and society at large. Marketing is the way toward getting possible customers or clients keen on your products and services. The catchphrase in this definition is "measure"; marketing including exploring, advancing, selling, and disseminating your products or services.

This discipline focuses on the investigation of market and buyer practices and it examines the business management of organizations to pull in, obtain and hold clients ideally imparting brand dependability by fulfilling their needs constantly.

According to AMA, “Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large”.

Philip Kotler defines marketing as “the science and art of exploring, creating, and delivering value to satisfy the needs of a target market at a profit. Marketing identifies unfulfilled needs and desires. It defines, measures and quantifies the size of the identified market and the profit potential”.

Nature scope and importance of marketing

Nature of marketing

1. Marketing is customer oriented: Marketing begins and ends with the customer. Marketing concerns itself not only with the satisfaction of the customer but also objects to delight him/her. All the organizational activities must be targeted and focused towards the customer. Customers must be allowed to decree product specifications and standards regarding quality. And for this, customer’s needs must be examined continuously.
2. Marketing is the delivery of value: When a customer is satisfied from a particular product based on its overall performance, then the satisfaction that he has received is known as customer value. Customers consider the product’s value and price before making a decision and make a trade-off between cost and benefit of the product. They will choose a product that gives them more value per rupee. According to De Rose, “Value is the satisfaction of customer requirements at the lowest possible cost of acquisition, ownership and use”. Thus, the organization must aim to deliver greater customer value than that of their competitors.
3. Marketing is network of relationships: The focal point of all marketing activities is the customer. The term relationships marketing came into light in1990’s. According to Philip Kotler, “Relationship Marketing is the practice of building long-term satisfying relations with key parties like customers, suppliers and distributors in order to retain their long term preference and business.” So the marketers should aim at maintaining long term relationships by delivering high quality products, better services and fair prices than their competitors.
4. Marketing is business: All activities start from marketing i.e. through knowing customer’s needs and wants and ends on the customer i.e. providing after sales service and knowing customer dissonance. The entire business revolves around marketing.
5. Marketing is dynamic: The word dynamic means ever changing. The needs and wants of the customer are changing constantly. Since the goal of marketing is to meet customer’s needs and wants by furnishing them with the products they want to buy, therefore, marketing must also change constantly to meet those needs and wants.

Scope of marketing

1. Marketing Research: Market Research is a tool used for decision making about the marketing mix’s elements. Research has to be carried out in order to identify the customer’s needs, their tastes and preferences, their interests, economic position, their paying capacity and effectiveness of certain advertisements. For this purpose, data is collected, tabulated, codified, analyzed, and presented through knowledgeable techniques crafted to reveal what customers will buy, why they will buy it, and how much they will pay for it. Market research aims at adapting products to the desires of buyers.
2. Pricing: Pricing is extremely important since it directly affects an organization’s sales and profits. While deciding the price of the product a number of factors have to be kept in mind like the cost of production, paying capacity of the customer, industry demand, competitor’s prices and the target profit margin. Price knits together the elements of the marketing mix and pays for their respective contributions. Therefore, the marketing manager must analyze and reconcile the various elements of those variables which influence price, and must then decide on an optimal price policy. A good pricing policy is a significant factor to attract the customers.
3. Advertising and Sales Promotion: In this era of tough competition, the sales promotion and advertisements have become almost an inbuilt part of the marketing. It helps to make the customer aware about the product, makes him
4. Curious about the product and thus promotes sales. There are ample sources of sales promotion and advertisements taking the decision about which source to be selected is also an imperative part in the sphere of marketing management. Through advertising marketers are able to position their products in the minds of the customer using various media like newspapers, magazines, television, radio, hoardings, window display and internet etc.
5. Channels of Distribution: Bringing together the buyer and seller and facilitating their exchange is the essence of marketing. Distribution channels are an integral part of a complex system that has evolved from cultural and social patterns in order to facilitate exchange transactions. Marketers must decide what methods are best for distributing their particular products. There are various media of distribution like the retailers, the wholesalers, department stores, chain stores, super markets etc. Marketers may choose to sell directly to the customers, to the customers through sales agents, to jobbers, directly to retailers, or to retailers through sales representatives.
6. Financing: It is difficult to perform various marketing activities without the availability of adequate and cheap finance. It has been rightly remarked “Money or Credit is the lubricant that facilitates the operation of the marketing machine as modern marketing requires vast resources.” The term financing includes decisions like budgeting for marketing activities, obtaining the necessary funds needed for operations and providing financial assistance to customers so they can purchase the business products and services. In the era of global competition, financing of customer purchasing has become an important part of marketing. Marketers have to offer different finance schemes to their customers to increase the volume of sales.
7. After-Sales Service: The furnishing of after sales service is very critical for the satisfaction of the customers. The free repairs, the return or exchange of the product during the guarantee period if the product proves defective or worthless, etc. are included in after sales service.

Importance of marketing

1. It promotes awareness among the public – Marketing enables the customers to become aware about the various products that are available in the market. A firm’s product must be known to the potential buyers for it to succeed. If there were no marketing or advertising, the customers would not know about the products. A company must capitalize on marketing activities so as not to miss the opportunity of being discovered. Attempts should be made to reach as many customers as possible and tell them what the company has to offer with the help of effective marketing strategies.

2. It helps in boosting sales- Once the prospects become aware about the company’s products or services it boosts up the chances that customers will make a purchase. New customers also start to spread the word, informing their friends and family about the company’s product and consequently company’s sales starts to increase rapidly. No matter what a company is selling, it will generate sales once the people come to know about it through TV advertisements, commercials, newspaper advertisements, etc. The more the people see and hear about a new product, the more inclined they will be to buy it.

3. It builds company reputation – Marketing helps to build brand name recognition or product recall and hence enables the customers to relate the brand name with the images, logos and captions that they see or hear in advertisements. When the company is able to satisfy the expectation of its customers, its reputation stand on a concrete ground. And once a company succeeds in establishing its name, its business will grow and expand and more and more customers will start purchasing its products and services.

4. It helps in fostering healthy competition – Marketing promotes a climate of healthy competition in the marketplace. It helps to position the company as being superior to its rivals so that the customers will prefer its products rather than buying from other firms that sell similar products and services. Competition drives the firms to invest in research and development in order to produce better quality and innovative products and services. Thus marketing also helps to foster innovation.

Evolution of marketing concepts

Marketing is as old as human civilization. Even in the earliest stage of human civilization exchange was taking place, though, without any consideration. The evidence of this could be noted from the anthropological studies. The number of excavations that have taken place around the world has also confirmed this. However in those days, the exchange was not so well organized or structured. This was because, there was very little surplus and efforts to create surplus was not even realized. When groups of human beings started living in batches, there arose the need for exchange within the group or among the groups. Historical evidence indicated that this took place in a very crude barter term. This was the earliest seed for modern marketing.

Another convincing evidence is the number of ancient literatures of Indian origin. All of them referred to the classification of the society in to four groups viz., Brahmins, shathriyas, vysyas and sudras. Of these four groups, was mainly indulging in exchange activities. They were governed by ethical practices and considered it as sin to violate such practices.

As years rolled, the approach to marketing also changed. From a stage of household exchange of goods and services, exchange started taking place between families and households. Such an exchange always took place through barter system. But when exchange took place between different groups in the society, the need for a medium of exchange was felt. Originally stones were used which was replaced by anything which commanded social respect was accepted. But in due course, precious metals like gold and silver were used as a medium. It is interesting to note that till very recently, the value of many was linked to the value of gold. When man invented money, exchange became very smooth devoid of all the problems associated with the barter exchange system. While exchange was getting perfected, the world stated looking at marketing in different ways.

Till the mid 1940‟s it was thought that the producers should produce what is possible and then make efforts to sell what is produced. In this approach, marketing was viewed from producers/sellers side. But this was proved to be a fatal mistake by Levitt through his historic article. Levitt brought sense to the world of marketing. He proved that market should be facing customer rather than the customer facing the market. In other words, manufacturers should contently look at the market to capture signals and translate that into acceptable products or services. Hence, marketing became customer focused and customer centered. So the approach now turned out to be „Produce what the consumers want‟. This automatically made every producer to identify his consumer and study his requirements so that what is produced is what is wanted.

Concepts of marketing

Needs

Human necessities are the essential requirements and including food, clothing and safe house. Without these people can't survive. An all-encompassing piece of requirements today has become training and medical services. For the most part, the products which fall under the necessities category of products don't need a push.

Rather the client gets it themselves. However, in the present intense and serious world, endless brands have thought of the very contribution fulfilling the necessities of the client, that even the "needs categoryproduct" must be pushed in the clients mind.

Example of needs classificationproducts/areas – Agriculture area, Real Estate, FMCG, etc.

Wants

Wants are a stride in front of requirements and are generally reliant on the necessities of people themselves. For example, you need to wash up. In any case, I am certain you clean up with the best cleansers. In this way Wants are not compulsory piece of life. You don’t need a decent smelling cleanser. Yet, you will utilize it since it is your need. In the above picture, the infant needs milk yet it wants Chocolate. Example of wants classification products/areas – Hospitality industry, Electronics, Consumer Durables and so forth, FMCG, and so on.

Demands

You may need a BMW or a Mercedes for a car. You should go for a journey. In any case, can you really purchase a BMW or go on a journey? You can give you can purchase a BMW or go on a journey. Consequently a stride in front of needs is requests. At the point when an individual needs something which is premium, yet he additionally can get it, at that point these needs are changed over to requests. The fundamental distinction among needs and requests is want. A client may want something yet he will be unable to satisfy his longing.

Marketing mix

Meaning

Neil Borden in the year 1953 presented the term Marketing mix, an augmentation of the work done by one of his partners James Culliton in 1948. The way toward advertising or conveyance of merchandise requires specific consideration of the executives since creation has no significance except if products are sold. Marketing mix is the way toward planning and coordinating different components of advertising in such a manner to guarantee the achievement of big business destinations. The components of marketing mix have been grouped under four heads—product, price, place and promotion. That is the reason marketing mix is supposed to be a combination of four P's.

Choices identifying with the product incorporates product planning, bundling and marking, and assortments of the product. Choice on cost is significant on the grounds that business depend to a huge degree on product valuing. Regardless of whether uniform cost will be charged or various costs will be charged for similar product in various business sectors are instances of choice relating to the cost of the product. The third significant component is place, which alludes to choice with respect to the market where products will be offered available to be purchased. Promotion includes choices bearing on the available resources of expanding deals.

Various instruments or strategies might be received for this reason. The overall significance to be connected to the different strategies is chosen while focusing on the component of promotion in marketing mix. So, marketing mix includes choices with respect to products to the made accessible, the cost to be charged for the equivalent, and the motivation to be given to the shoppers in the business sectors where products would be made ready to move. These choices are taken keeping in view the impact of marketing powers outside the association e.g., shopper conduct, contenders' technique and government strategy.

In this way, the advertising mix demonstrates the fitting mix of four P's—product, price, promotion, and place—for accomplishing marketing targets. The parts are otherwise called marketing mix factors or controllable factors as they can be utilized by business necessities. In 1960, E. Jerome McCarthy in his book, Basic Marketing, advocated a four-factor order, the supposed four P's Product, Price, Place and Promotion. Marketing Mix - A combination of a few thoughts and plans followed by an advertising delegate to advance a specific product or brand is called marketing mix. A few ideas and thoughts joined together to detail last systems accommodating in creation a brand famous among the majority structure marketing mix.

Elements of Marketing Mix

Product: Product is a decent, (for example, music players, shoes and so forth) or administration, (for example, hotels, airlines, and so on) that is offered as an answer for fulfill the necessities of your client.

When building up the product, you need to consider its life cycle and plan for various difficulties that may emerge during its phases. When the product arrives at its last stage (deals decrease stage), it's an ideal opportunity to rethink the thing to win the interest of the clients once more.

Merchandise fabricated by associations for the end-clients are called products. Products can be of two kinds - Tangible Product and Intangible Product (Services). An individual can see, contact and feel substantial products when contrasted with theoretical products. A product in a commercial center is something which a merchant offers to the purchasers in return of cash.

Price: The following component of the advertising mix is the price your client is happy to pay for your product. This decides the benefit you will have the option to create. When setting a cost for your product, consider the amount you have spent on delivering it, the price scopes of your rivals, and the apparent product esteem.

The cash which a purchaser pays for a product is called as cost of the product. The cost of a product is by implication relative to its accessibility on the lookout. Lesser its accessibility, more would be its cost and bad habit a versa. Retail locations which stock remarkable products (not accessible at some other store) provide a greater expense estimate from the purchasers.

Place: This is about the dissemination focus of the product and the strategies utilized in dispersing it to the client. Any place this is, it should be effectively available to the client. For instance, on the off chance that you have an actual store, it should be situated in a place that can be effectively found by the client. In the event that you own a site to advertise your product, ensure it is effectively safe.

Place alludes to the area where the products are accessible and can be sold or bought. Purchasers can buy products either from actual business sectors or from virtual business sectors. In an actual market, purchasers and dealers can genuinely meet and associate with one another though in a virtual market purchasers and venders meet through web.

Promotion: Promotion alludes to the techniques a business uses to pick up the consideration of the clients to their product. These incorporates deals promotions, client assistance, advertising, marketing and so on While making your promotionsystem, consider the strategies utilized by your rivals, the channels that are best in arriving at your clients, and whether they coordinate the apparent estimation of your product.

Promotion alludes to the different procedures and thoughts executed by the advertisers to make the end - clients mindful of their image. Promotion incorporates different procedures utilized to advance and make a brand famous among the majority.

Advertising: Print media, Television, radio are compelling approaches to tempt clients and make them mindful of the brand's presence. Boards, hoardings, flags introduced astutely at key areas like substantial traffic zones, intersections, railroad stations, transport stands draw in the passing people towards a specific brand. Slogans likewise increment the review estimation of the brand among the clients.

Marketing environment

The marketing environment refers to all internal and external factors, which directly or indirectly influence the organization’s decisions related to marketing activities. Internal factors are within the control of an organization; whereas, external factors do not fall within its control. The external factors include government, technological, economical, social, and competitive forces; whereas, organization’s strengths, weaknesses, and competencies form the part of internal factors.

A marketing environment mostly comprises of the following types of environment:

1. Micro Environment

2. Macro Environment

The discussion of these environments are given below:

1. Micro Environment:

Micro environment refers to the environment, which is closely linked to the organization, and directly affects organizational activities. It can be divided into supply side and demand side environment. Supply side environment includes the suppliers, marketing intermediaries, and competitors who offer raw materials or supply products. On the other hand, demand side environment includes customers who consume products.

Let us discuss the micro environment forces in the following points:

1. Suppliers: It provides raw material to produce goods and services. Suppliers can influence the profit of an organization because the price of raw material determines the final price of the product. Organizations need to monitor suppliers on a regular basis to know the supply shortages and change in the price of inputs.
2. Marketing Intermediaries: It helps organizations in establishing a link with customers. They help in promoting, selling, and distributing products.

Marketing intermediaries include the following:

• Resellers: It purchases the products from the organizations and sell to the customers. Examples of resellers are wholesalers and retailers.
• Distribution Centers: It helps organizations to store the goods. A warehouse is an example of distribution center.
• Marketing Agencies: It promotes the organization’s products by making the customers aware about benefits of products. An advertising agency is an example of marketing agency.
• Financial Intermediaries: It provides finance for the business transactions. Examples of financial intermediaries are banks, credit organizations, and insurance organizations.

Iii. Customers: Customers buy the product of the organization for final consumption. The main goal of an organization is customer satisfaction. The organization undertakes the research and development activities to analyze the needs of customers and manufacture products according to those needs.

Iv. Competitors: It helps an organization to differentiate its product to maintain position in the market. Competition refers to a situation where various organizations offer similar products and try to gain market share by adopting different marketing strategies.

2.   Macro Environment:

Macro environment involves a set of environmental factors that is beyond the control of an organization. These factors influence the organizational activities to a significant extent. Macro environment is subject to constant change. The changes in macro environment bring opportunities and threats in an organization. Let us discuss these factors in details:

1. Demographic Environment:

Demographic environment is the scientific study of human population in terms of elements, such as age, gender, education, occupation, income, and location. It also includes the increasing role of women and technology. These elements are also called as demographic variables. Before marketing a product, a marketer collects the information to find the suitable market for the product.

Ii.   Economic Environment:

Economic environment affects the organization’s costs structure and customers’ purchasing power. The purchasing power of a customer depends on the current income, prices of the product, savings, and credit availability. The factors economic environment is as follows: a

• Inflation: It influences the customers’ demand for different products. For example, higher petrol prices lead to a fall in demand for cars.
• Interest Rates: It determines the borrowing activities of the organization. For example, increase in interest rates for loan may lead organizations to cut their important activities.
• Unemployment: It leads to a no income state, which affects the purchasing power of an individual.
• Customer Income: It regulates the buying behavior of a customer. The change in the customer’s income leads to changed spending patterns for the products, such as food and clothing.
• Monetary and Fiscal Policy: It affects all the organizations. The monetary policy stabilizes the economy by controlling the interest rates and money supply in an economy; whereas, fiscal policy regulates the government spending in various areas by collecting the revenue from the citizens by taxing their income.

Iii. Natural Environment:

Natural environment consists of natural resources, which are needed as raw materials to manufacture products by the organization. The marketing activities affect these natural resources, such as depletion of ozone layer due to the use of chemicals. The corrosion of the natural environment is increasing day-by-day and is becoming a global problem.

Following natural factors affect the marketing activities of an organization in a great way:

• Natural Resources: It serves as raw material for manufacturing various products. Every organization consumes natural resources for the production of its products. Organizations are realizing the problem of depletion of resources and trying best to use these resources judiciously. Thus, some organizations have indulged in de-marketing their products.
• Weather: It leads to opportunities or threats for the organizations. For example, in summer, demand for water coolers, air conditioners, cotton clothes, and water increases while in winter, the demand for woolen clothes and room heaters rises. The marketing environment is greatly influenced by the weather conditions of a country.
• Pollution: It includes air, water, and noise pollution, which lead to environmental degradation. Now-a-days, organizations tend to promote environment friendly products through its marketing activities. For example, the organizations promote the usage of jute and paper bags instead of plastic bags.

Iv. Socio-Cultural Environment:

Socio-cultural environment comprises forces, such as society’s basic values, attitudes, perception, and behavior. These forces help in determining that what type of products customers prefer, what influences the purchase attitude or decision, which brand they prefer, and at what time they buy the products. The socio-cultural environment explains the characteristics of the society in which the organization exists. The analysis of socio-cultural environment helps an organization in identifying the threats and opportunities in an organization.

For example, the lifestyles of people are changing day-by-day. Now, the women are perceived as an active earning member of the family. If all the members of a family are working then the family has less time to spend for shopping. This has led to the development of shopping malls and super markets, where individuals could get everything under one roof to save their time.

v.   Technological Environment:

Technology contributes to the economic growth of a country. It has become an indispensible part of our lives. Organizations that fail to track ongoing technological changes find it difficult to survive in today’s competitive environment. Technology acts as a rapidly changing force, which creates new opportunities for the marketers to acquire the market share. Marketers with the help of technology can create and deliver products matching the life style of customers. Thus, marketers should observe the changing trends in technology.

Key takeaways

1. Marketing including exploring, advancing, selling, and disseminating your products or services.
2. The marketing environment refers to all internal and external factors, which directly or indirectly influence the organization’s decisions related to marketing activities
3. Micro environment refers to the environment, which is closely linked to the organization, and directly affects organizational activities.
4. Macro environment involves a set of environmental factors that is beyond the control of an organization.

1.2    Consumer Behavior – An Overview: Consumer buying process; Factors influencing consumer buying decisions.

Consumer buying behavior is the study of an individual or a household that purchases for personal consumption.

The five stages of the consumer decision making process include: Problem recognition, information search, information evaluation, purchase decision, and evaluation after purchase. This is just a general model of the decision making process and it emphasizes that the buying decision making process starts before the actual purchase and continues even after the purchase. It also encourages the marketer to focus on the complete buying process and not just on the purchase decision.

Steps in consumer decision making process

1. Problem recognition- The first step of the consumer decision-making process is recognizing the need for a service or product. Need recognition, whether prompted internally or externally, results in the same response: a want. Once consumers recognize a want, they need to gather information to understand how they can fulfil that want
2. Information search-  When researching their options, consumers again rely on internal and external factors, as well as past interactions with a product or brand, both positive and negative. In the information stage, they may browse through options at a physical location or consult online resources, such as Google or customer reviews.
3. Alternatives evaluation-  At this point in the consumer decision-making process, prospective buyers have developed criteria for what they want in a product. Now they weigh their prospective choices against comparable alternatives. Alternatives may present themselves in the form of lower prices, additional product benefits, product availability, or something as personal as colour or style options. Your marketing material should be geared towards convincing consumers that your product is superior to other alternatives
4. Purchase decision- This is the moment the consumer has been waiting for: the actual purchase. Once they have gathered all the facts, including feedback from previous customers, consumers should arrive at a logical conclusion on the product or service to purchase.
5. Post-purchase evaluation- The best marketers know that the process doesn’t end at the purchase step – in fact, that’s only the beginning of a customer’s value for your company. Once acquisition is out of the way, your new goal is to create long-term relationships between consumer and company, ensuring that you get the most value out of your customers, and they get the most value out of your products

Factors influencing consumer buying decisions

(A) Cultural Factors:

Cultural factors have the broadest and deepest impact on consumer behaviour. This set of factors mainly includes broad culture, sub-culture, and culture of social classes.

1. Broad Culture:

Culture is a powerful and dominant determinant of personal needs and wants. Culture can be broadly defined as: The way of living, way of doing, and way of worshiping. Culture determines the total patter of life. Culture has a tremendous effect on needs and preference. People react according to the culture to which they belong.

Every culture has its values, customs, traditions, and beliefs, which determine needs, preference, and overall behaviour. The child acquires a set of values, perception, attitudes, interest, preference, and behaviour from family and other key social institutions that control his/her behaviour. Every member is bound to follow cultural values to which he belongs.

2. Subcultures:

Each culture consists of smaller subcultures. Each subculture provides more specific identification of members belong to it. Product and marketing programme should be prepared in light of subcultures to tailor their needs.

Subculture includes:

i. Nationality:

Every nation has its own unique culture that shapes and controls behaviour its citizens. For example, Indian culture, American culture, Japanese culture, Chinese culture, African culture, etc. Consumers of different nations hold different behaviour toward the company’s products and strategies. The company can concentrate on one or more nations to serve.

Ii. Religion:

It is a powerful determinant of consumer needs and wants. Every religion has its culture in terms of rules, values, rituals, and procedures that have impact on its followers. Commonly, consumer behaviour is directly affected by religion in terms of products that are symbolically and ritualistically associated with the celebration of various religious events and festivals/holidays.

Iii. Racial Groups:

In each culture, we find various racial groups; each of them tends to be different in terms of needs, roles, professions, habits, preference, and use of products. Each group responds differently to marketing offers due to different cultural backgrounds.

For example, in our country, we find a number of racial groups like Kshatriya, Banya, Patel, Brahmin, Scheduled Caste, Scheduled Tribe, Shepherded, and so forth. These racial groups have their cultural values, norms, standards, habits, etc., that govern their overall response toward the company’s products.

Iv. Geographical Regions:

Each geographic region represents specific culture and differs in terms of needs, preference, habits, usage rates, and uses of products. Clothing, residence, food, vehicle, etc., are determined by regional climate and culture.

3. Culture of Social Classes:

Philip Kotler defines: “Social classes are relatively homogeneous and enduring divisions in a society, which are hierarchically ordered and whose members share similar values, interest, and behaviour.” In many cases, social classes are based on caste system. Members of different castes have their cultures and, accordingly, they perform certain roles.

Social classes reflect differences in income, occupation, education, their roles in society, and so on. Every social class has its culture that affects behaviour of its members. Social classes differ in their dress, speech patterns, recreational preferences, social status, value orientation, etc.

i. Upper-upper

Ii. Lower upper

Iii. Upper middle

Iv. Middle class

v. Working class

Vi. Upper lower

Vii. Lower-lower

Normally, with reference to India, on the basis of income level, or status in society, we can identity three social classes like upper class, middle class, and lower class. In every society, percentage of each of these classes is subject to differ. Marketer should design his marketing programme to cater the needs of specific social classes.

(B) Social Factors:

Here, we examine the effect of social factors on consumer needs and preferences (behaviour). Social factors affect consumer behaviour. Consumer response to product, brand, and company is notably influenced by a number of social factors – family, reference groups, and roles and statuses. Marketer needs to analyze these social factors of his target market to cater its needs effectively.

Social factors influencing consumer behavior are as follows:

1. Family:

Family is one of the most powerful social factors affecting consumer behaviour. This is more significant where there is joint family system, in which children use to live with family for longer time. Values, traditions, and preferences are transmitted from parents to children inherently.

Family members constitute the most influential primary reference group. From family, its member acquires an orientation toward religion, politics, ambition, self-worth, love, respect, and so on. Need, preference, buying habits, consumption rate, and many other aspects determined by family affect one’s behaviour.

2. Reference Groups:

Philip Kotler states: “A person’s reference group consists of all the groups that have a direct (face-to-face) or indirect influence on the person’s attitudes or behaviour.” Groups having a direct influence on the person are called membership groups.

Normally, following reference groups affect behaviour of their members:

i. Primary Reference Groups:

They are informal groups such as family members, friends, neighbors, relatives, and co-workers with whom the person interact fairly continuously. Habits, life-style, and opinions of these groups have direct impact on the person.

Ii. Secondary Reference Groups:

They tend to be more formal groups such as religious groups, professional groups, trade unions or associations, etc., that affect buying decisions of an individual buyer.

Iii. Aspiration (Aspired) Groups:

A person is not the member of such groups. But, he likes to belong to those groups. He imitates habits, preference and buying pattern of such groups. For example, college students imitate/like to belong to film stars, sportsmen, or professional groups.

Iv. Dissociative (Disliked) Groups:

Theses reference groups include such groups whose values or behaviour a person rejects or dislikes. He tends to behave differently than those groups. A marketer should identify reference groups of his target market and should try to influence those groups. In case of television, automobile, clothing, home furniture, books and magazines, cigarettes, etc., the reference groups have more direct impact on buyers’ purchase decision.

3. Roles and Statuses:

A person plays various roles in many groups throughout his life. He has to play different roles in family, club, office, or social organisation. A role consists of the activities that a person is expected to perform. For example, a person is father for his children, husband for his wife, son for his parents, friend for his friends, boss for his department, and a member of social organisation.

4. Social Customs and Traditions:

Social customs, beliefs or traditions can be associated with religion, caste, or economic aspects. Such customs determine needs and preference of products in different occasions and, hence, affect consumer behaviour.

5. Income Level:

Income affects needs and wants of consumers. Preference of the rich consumers and the poor consumers differ notably. In case of quality, brand image, novelty, and costs, there is wide difference between the rich and the poor buyers. Marketer must be aware of expectations of different income groups of his target market.

(C) Personal Factors:

Along with cultural and social factors, personal factors also affect one’s buying decision. Personal factors are related to the buyer himself. These factors mainly include age and stage in life cycle, occupation, economic circumstances, life style, personality, and self-concept. Let us briefly examine the effect of personal factors on consumer behaviour.

i. Age and Stage in Life Cycle:

A man passes through various stages of his life cycle, such as infant, child, teenager, young, adult, and old. Need and preference vary as one passes through different stages of life cycle. For example, child and adult differ to a great extent in terms of needs and preference. Marketer may concentrate on one or more stages of his target consumers’ life cycle. Use of different product depends on age and stage of buyers’ life cycle.

Ii. Occupation:

Buying and using pattern of consumer, to a large extent, is affected by a person’s occupation. For example, industrialist, teacher, artist, scientist, manager, doctor, supervisor, worker, trader, etc., differ significantly in term of need, preference, and overall buying pattern. Company can specialize its products according to needs and wants of special professional groups.

Iii. Economic Circumstances:

Product preference, frequency of buying, quality, and quantity are largely affected by consumers’ economic circumstances. Economic circumstances consist of spendable income, income stability, level of savings, assets, debts, borrowing power, and attitudes toward saving versus spending. People buy products keeping in mind these economic circumstances.

Iv. Life Style:

People with the same culture, social class, and occupation may differ in term of their life style. Knowledge of life style of the target market is essential for marketer to design more relevant marketing programme. Kotler defines: “Life style is the person’s pattern of living in the world as expressed in the person’s activities, interest, and opinions.”

v. Personality:

Personality is a distinguished set of physical and psychotically characteristics that lead to relatively consistent and enduring response to one’s environment. Personality characteristics, such as individualism, difference, self-confidence, courage, firmness, sociability, mental balance, patience, etc., have a strong influence on needs and preferences. Every person buys that product which suits his personality. In case of clothing, automobiles, shoes, perfumes, etc., products are influenced by users’ personality characteristics.

Vi. Self-concept:

It is also referred as self-image. It is what person believes of him. There can be actual self-concept, how he views himself; ideal self-concept, how he would like to view himself; and others-self-concept, how he thinks other see him. Person purchases such product that matches with his/her self-image. Marker must identify self-concept of his target buyers and must try to match the products with them.

Vii. Gender:

Gender or sex affects buying behaviour. Some products are male-dominated while some are female-dominated. Male customers react to those products which are closely suit their needs and styles. Cosmetics products are more closely related to female customers than male. Marketer must be aware of gender-effect on buying behaviour of the market.

Viii. Education:

Education makes the difference. Highly educated, moderately educated, less educated, and illiterates differ considerably in terms of their needs and preferences. In the same way, stage of education (like primary, secondary, college, etc.) affects buyers’ behaviour.

Education factor seems more relevant to academic institutes, book publishers, magazines, and newspapers. Education affects one’s mindset. Buyers’ colour choice, quality-orientation, services, and other aspects have more or less educational significance.

(D) Psychological Factors:

Buying behaviour is influenced by several psychological factors. The dominants among them include motivation, perception, learning, and beliefs and attitudes. It is difficult to measure the impact of psychological factors as they are internal, but are much powerful to control persons’ buying choice. Manager must try to understand probable role the factors play in making buying decisions.

i. Motivation:

It has a significant impact on consumer behaviour. Motivation is closely related to human needs. One has many needs at a given time. Some needs are biogenic or physiological in nature arising from physiological states of tension, such as hunger, thirst, or discomfort.

Other needs are psychogenic or psychological in nature arising from psychological state of tension, such as recognition, esteem, or belonging. Motivation comes from motive; motive is expression of needs; or intensified need become a motive. Thus, a motive is the need that is sufficiently pressing to drive the person to act. Satisfying the need reduces the felt tension.

People hold one or more of following motives to buy:

i. To satisfy basic needs like hunger, thirst, or love

Ii. To protect from economic, physical or mental hazards

Iii. To get social status

Iv. To be recognized or appreciated

v. To be respected

Vi. To be self-actualized

Vii. To avoid physical or mental stress

Ii. Perception:

Person’s motivation to act depends on his perception of situation. It is one of the strongest factors affecting behaviour. The stimuli – product, advertising appeal, incentives, or anything – are perceived differently by different people due to difference in perception. Marketer should know how people perceive marketing offers.

Iii. Learning:

Most human behaviour is learned. Learning is basically concerned with experience of an individual. Learning can be defined as: Relatively permanent changes arising from experience. If an individual has satisfactory experience of buying and using the products, he is more likely to talk favourably or repeat the same.

Iv. Beliefs:

People hold beliefs about company, company’s goods or services, and they act accordingly. Beliefs of the buyers affect product and brand image. We can define the term as: Belief is a descriptive thought that a person holds about something. Beliefs may be based on knowledge, opinion, or faith.

v. Attitudes:

An attitude is a person’s enduring favourable or unfavorable evaluations, emotional feelings, and action tendencies toward some object or idea. These emotional feelings are usually evaluative in nature. People hold attitudes toward almost everything, such as religion, politics, clothes, music, food, product, company, and so on.

Key takeaways-

1. The five stages of the consumer decision making process include: Problem recognition, information search, information evaluation, purchase decision, and evaluation after purchase
2. Cultural factors have the broadest and deepest impact on consumer behavior
3. Consumer response to product, brand, and company is notably influenced by a number of social factors

Sources

1. Davar R.S – Salesmanship and Publicity – Vikash Publication

2. Sahu P.K & Rout K.C – Salesmanship & Sales Management – S.Chand

3. Spiro, Stanton, and Rich, Management of the Sales force, McGraw Hill.

4. Rusell, F. A. Beach and Richard H. Buskirk, Selling: Principles and Practices, McGraw Hill

5. Futrell, Charles, Sales Management: Behaviour, Practices and Cases, The Dryden Press.