Effect of Personal Factors eee eeeee LEARNING OBJECTIVES ‘After studying this chapter, you will be able to: Understand the impact of personal characteristics such as age, life cycle stage, occupation, ifestyle and, in general, social class on consumer behaviour. Highlight some of the newer sub-cultures such as movies, music and sports, especially cricket, which are gaining prominence in India. Know about the shift in linguistic preference (like ‘Hinglish’, socializing patterns, television and gaming, which are making rapid penetration among the urban youth in India CHAPTER OUTLINES Influence of Age on Consumer Behaviour Effect of Life Cycle Stage Effect of Occupation on Consumer Behaviour Social Class and Their Behavioural Patterns Effect of Lifestyle on Consumer Behaviour The New Subcultures Conclusion Recommended Readingch as age, Consumer's behaviour is evidently influenced by many personal characteristics s yle, personality. The effect of conomie condition, life personal factors on consumer behaviour is discussed now cox life eyele stage, occupation, INFLUENCE OF AGE ON CONSUMER BEHAVIOUR Product needs and interests vary with consumer's age. There is a definite variation in the pattern of consumption according to the age group. For example, the younger population always gravitate towards spending on non-essentials and entertainment products while the older age group consumers spend most on the basic necessities, medical care, ete. That is any marketers segment the market according ro the age and choose their target market While age profiling of a market can he easily done, there is a subtle underlying reason which needs some more explanation, The ‘profiling’ of customers based on age has to take into account two distinct effects: (i) the age effect and (ii) the cohort effect. The age effect would be ay follows: the heightened desire to own a car just after marriage (say, when a consumer is 25-35 years of age). A cohort effect is slightly different. It implies thar people tend to hold on to the interests they had acquired during their growing-up stage. For example, if the people who are today in the age group of 50+ have grown up appreciating the scooter, they would probably still like travelling around a city on a. two-wheeler. inilatly, they my. © to shop in a kirana stores and wear Bata shoes/tailor-made shirts rather than going toa mall and wear brands like Nike or Van Heusen, In contrast, today’s generation, if they can afford, would probably prefer to use Nike or Levi’s products even when they are 50. The basis of age profiling is also another form of understanding the subcultures. Ie is commonly assumed that the members of a specific subculture possess a distinct set of beliefs, values and customs that set them apart from other subcultures. More importantly, they adhere to most of the dominant cultural beliefs and behavioural patterns of that community. Hence it becomes easier for the marketer to understand the behaviour of a chunk of the market based on what age group these consumers belong to. The important shifts that occur in these persons according to their age can be perceived through distinctive lifestyles of each age group. Table 7.1 gives an idea of how the population distribution in India has changed during 1996-2006. This data can be used to identify the distinct underlying market opportunity for different products within each age group,TABLE 7.1 istribution in Indian Population (millions) ——___* Distribution in Indian Population (its) 2006 2001 1135 708.5 ee 221.2 230.1 122.4 409.0 ae 35-54 ee a fat 239.2 207.3 55 and above rae Aoi 88.7 ie 1094.4 7012.4 934.2 India is a very young nation when compared with some advanced and developed countries like USA, France, Switzerland, and others. That is t0 say, India which became an independent nation in 1947 has today emerged as a land of great market opportunity. Nearly two-thirds of its population are helow the age of 35, and nearly 50% of its Population are below 25 years, which is a very encouraging situation for companies Producing consumer goods and luxury goods. Given the low penetration of many personal use products, the above demographic picture gives an indication that there exists a big opportunity in India for the young generation who are in the age group of 20-34 years. This age group is characterized by a propensity to spend on pleasurable needs and is keen to buy many look or feel good considerations. A corollary to this would be that at any point of time in India there would be a huge number of older generation people and, they have sufficient personal income from savings thus, the demand for basics and medical care would remain high. Also, the cohort effect would probably show in the fact that 25 years from now, the older generation would be much different from today, while the younger generation would probably gravitate towards materialistic life noticed in present-day western society. A marketer must understand this subtle hints and thus plan to promote, place and price his products accordingly. EFFECT OF LIFE CYCLE STAGE Life cycle is a sociological concept which describes how a person progresses in life. It emphasizes on age, occupation, marital status, composition of families, and income of the person. Though these factors change with time, life cycle is of great importance to marketers. Especially in an Indian context, it is better to talk of a family life cycle (see Figure 71). It can be characterized in terms of the age of the person and how many children are living at home. As a matter of fact, in Indian families, there are people of different age groups— from adolescents and adults (unmarried), married couple with children, married couple without children, and parents living with their children or some of them staying alone. AtFigure 7.1 Illustration of family life cycle (FLC) stages. cimes events like marriage or migration to city (specially from rural to urban location) may alter the family scenario, creating single-parent households. Classification of families by stage in the life cycle is significant in knowing consumption related behaviour. In general, spending increases as people shift from young single status to young married, and it remains high until it falls sharply at the older couple or the older ingle unit family. Also, the pattern of consumption changes according to the life cycle ¢ a household is in. Newly married people naturally spend more on healthcare (beautification), clothing, and transportation. As families expand, the spending on household items generally goes up. Young singles tend to spend more on personal transportation facilities like cars or two-wheelers and clothing while the older generation spends more on healthcare and home-based products. The change in life cycle stage is a very attractive subject for any marketer as it is the point where consumers tend to develop strong brand loyalty or preferences as well as switch brands. With growing affluence and adoption of the Western culture, certain new consumption pattems are being noticed in urban-based Indian families. We have discussed this issue in Chapter 9. st Non-traditional FLC The five main factors which alter the basic structures of family life cycle and lead to formation of non-traditional FLC are: 1. Hostel students (young people living outside home) 2. Cohabitation (limited in India but on the rise) 3. Extended family (Adule children living with parents) 4. Dual family (Husband and family living at different places) 5. Unmarried/Widowed Persons The understanding of family is also important for marketers for another reason. The members of a family assume specific roles such as gatekeeper, influencer, decider, buyer and(ear Oca a concer Beit TET these roles are carried user in their everyday functioning of purchase decisions. Generally, is worth observing out by different members of the houschold. A family’s decision-making style India being a traditionally male-dominated and patriarchal society, high-v are normally done by the male members in the family whereas smaller or regula purchases like groceries are mostly done by the female members in the family. Assuming this to be true, it will help marketers target products at the deciders, say, for example, a toiletry and regular household products (brands) will be targeted more at the housewife, whereas a car or a motorcycle brand used to be targeted at the husband. However, this trend is fast changing as women are today more and more empowered to take many family decisions and also increasingly woman are joining the workforce. That is why probably the Whirlpool refrigerator and washing machine ads show a woman taking the final decision Similarly, the role of children in decision making also has been acknowledged. Today, we see more and more products are being targeted at the children (e.g. chocolates, shoes and even some durables). In fact, most young parents take children along with them while purchasing grocery items, alue purchases 1 domestic EFFECT OF OCCUPATION ON CONSUMER BEHAVIOUR Occupation is a widely accepted and probably the best-documented measure of social class because it reflects the status of a person in society. The importance of occupation as a social class indicator is dramatized by the frequency with which people ask each other when they meet for the first time: “Where are you working” or “What do you do for a living?” The response to this question serves as a guide in sizing up people. Occupation has long been an important aspect for forming market segments. Marketers commonly segment markets on the basis of income because they feel that it is a strong indicator of the ability (or inability) to pay for a product or a specific model of the product Occupation and income are often combined with other demographic variables to more accurately define market targets. To illustrate, high income has been combined with age to identify the important affluent elderly segment. It has also been combined with both age and occupational status to produce the so-called yuppie segment, a sought-after subgroup of the baby boomer marker. More importantly, marketers frequently think in terms of specific occupations while defining a target market for their products or broader occupational categories. Further, the likelihood that particular occupations would be receptive to certain products or services often provides the basis for an occupational screener requirement for participation in focus groups or survey research and marketers are making occupational datatbases for direct marketing campaigns. Within the domain of occupational status, there has also been an increasing trend towards self-employment among business and professional people, Specifically, it appears mployed or entrepreneurs are more likey e. This link that business and professional people who are self to be sustantially wealthier than their counterparts who work for someoneberween self-employment and higher incomes is consistent with the trend of increasing the number of business school graduates seeking to work for themselves rather than taking up a job or work for a company/business. Self-employment is also dependent on one’s desire to be independent rather than be subject to others and the ensuing tension and stress. SOCIAL CLASS AND THEIR BEHAVIOURAL PATTERNS Sociologists have classified members of a society on a continuum of social positions. Social class structures are important because they strongly affect norms and values and, hence consumption and possessions. Given that members of a social class interact regularly with each other, people are more likely to be influenced by individuals in their own social class than by those in other classes. A number of research studies have formed a scale of status consumption Education plays a critical role in defining social class because it is one of the key determinants of occupation and of social status. In fact, educational attainment is considered the most reliable determinant of consumers’ future income-earning potential. In India, education has always been given priority, particularly in the middle-class segment. Though overall literacy rates in India are low, yet higher and technical education has been an integral part of the grooming for the entire nation. This is particularly true of Kerala, one of the most literate states in the country. Another important concept which relates directly to occupation and economic status is the meaning of money which often comes to symbolize power, security and freedom. People learn the meaning of money early in childhood. Parents easily discover that they can control their children through rewards and punishments based on monetary incentiv« and on buying or not buying things. This early learning later translates into adult life when money is viewed as a means to acquiring things that bring a sense of status and prestige. Behavioural Patterns of Different Social Class Categories The upper social class in India is a varied group of individuals. This group mainly consists of the business community, professionals, the politicians, new social elite and the upper middle class. The upper class consumers tend to choose many conspicuous consumer products using many symbolic characteristics, not just the price, as an indicator of the product's quality. Self-expression of status is attained generally, result in the purchase of many high-quality, prestigious brands in such product categories The Indian upper class is also growing. According to unofficial data, there are an estimated 7,11,000 individuals who own liquid cash of about Rs 50 lakhs and the amount is expected to increase co 1.1 million, growing annually at 11.6% by end of 2009. The India Luxury Trends 2006 have classified consumers of luxury goods into four categories: 1. Aristocrats—the source of wealth is business income or ownership of inherited wealth,5 se near ono annie Behe aE amount of money massed a huge New rich (the ‘nouveau riche’)—those who have and lead a lavish style of acquiring different luxury goods. ation of children, better 3. Professionals—Spend mainly on high end white goods, educ housing and premium cars or utility vehicles. on to luxury, unlikely to indulge 4. The traditionally affluent—having an orienta beyond a point we white collar jobs, with many of them having pursued higher education. The majority of the private sector and government employees come under this category of social class. Although the values and consumption pattems of middle class consumers vary, many try to imitate the upper class on consumption of dress and clothing and other household possessions. Generally, itis noticed that the middle class values determine the type of products and services that middle class consumers acquire and consume, For instance, the middle class people spend most of their disposable income on, children’s education, clothing, food and household gadgets, personal grooming and vacation, In fact, of late many middle class families in India have acquired a car(s) or two-wheelers, The working class mainly consists of blue collar workers. The working class consumers heavily depend on family members for economic and social support in many areas, particularly for key purchases and during difficult times. They have a local orientation— socially, psychologically and geographically—than other classes. Consumers in the working class are more likely to spend than save. At times when their income is spent before the end of every month, they resort to borrowing for their daily needs from known kirana stores. They are more likely to judge product quality on the basis of price (higher price means better quality), to shop in kirana or discount stores, and have less product information when purchasing. For example, they buy cheaper bar and toilet coaps, cheaper detergents (Nirma, Wheel), etc. This segment of the market constitutes a significant size in India. Basically they hail from rural areas. ‘A large population—about 70% live in such rural heartlands. These people are primarily engaged in agriculture. Hence, the population involved in the secondary sector or the industrial sector has reduced over the years, yet the core sector growth is visible, particularly in the tertiary sector (e.g. transport, service related activities) s hierarchy are below poverty line (BPL) consumers, the An overriding The middle class consists primarily of those who hay At the low end of the stat shelterless who sleep on the footpaths, or live in makeshift shantie characteristic of the homeless is their struggle for survival. With little regular income, such homeless consumers have difficulty in buying daily necessities like food and medicine Neverthless, from the point of view of marketers, bottom of the special pyramid is also important, They constitute the market for most of the unbranded commodities in India EFFECT OF LIFESTYLE ON CONSUMER BEHAVIOUR 1s within psychographic ¢ segmentation bas Lifestyle typologies are among the most eff segmentation. It has been observed that lifestyle characteristics rather than demographicvariables provide more relevant information to understand consumer behaviour and to design effective advertising campaigns. It has also been found that lifestyle segments differ in the style of consumption, the importance they place on various attributes, and the loyalty and dependence on word-of-mouth. Thus, lifestyle segmentation seems to be particularly well suited to study the different types of consumption patterns in a diverse market like India. Lifestyles very closely relate to consumers’ values and personality, many a time providing much better insights to develop new products as they ate actual manifestations of actual living pattern of an individual. It has a long tradition in marketing research, to use an umbrella term called “activities, interests and opinions” (AIOs) scales to identify and describe how psychographic segments differ from one another. What people do in their spare time is often a good indicator of their lifestyle. Consumers engaged in different activities differ in opinions and interests, and may represent distinct lifestyle segments for marketers. Consumer lifestyles can have important implications for market profiling, marketing communication, and new product ideas, as explained below. Profiling Evidence from research has shown that within each consumer social class, there is a constellation of specific lifestyle factors (shared beliefs, attitudes, activities, and behaviours) that tend to distinguish the members of each class from the members of all other social classes. People in any class possess values, attitudes and behavioural patterns that are a hybrid of two or more classes. To identify consumer segment for special offerings, marketers can use lifestyles as an identification variable. For example, eyeing the future trend towards busier lifestyle and increase in the number of working women, the ‘ready to eat’ concept is catching up fast. Brands like Kohinoor, MTR, and Kitchens of India, to name a few, are already in the market, offering the full range of Indian cuisine. Even for cooking, Indian consumers are fast moving from hand-grinded spices to mixer spices to purees, pastes, or specialized condiments required for a recipe. Most of the Indian preparations require specialized condiments that need to be mixed and ground in right proportion to get the right taste Now taking into account the busier lifestyle that is in vague, in order to save time and do away with drudgery, several companies are offering a range of such condiments. Lifestyle segmentation has also cross-cultural implications. Marketers often monitor lifestyle changes to identify new opportunities, Communication People with different lifestyles choose different kinds of brands (even in the same product category), and the appealing factors for them are different. For example, a middle class