Tuesday, October 2, 2012

Marketing 101: Social Factors Affecting Consumer Buyer Behavior

In my last post I examined the cultural factors influencing consumer buyer behavior.  Cultures, subcultures and cultural trends all shape the Model of Consumer Buying Behavior.  Another major part of consumer buyer behavior is the element of Social Factors.  Human beings are social. They need people around them to interact with, and to discuss various issues in order to reach to better solutions and ideas. We all live in a society of some form, and it is very important for individuals to adhere to the "laws" and social "regulations" of a community.  These Social Factors typically consist of the consumer's small groups, their family, and their social roles and social status.

First let's examine Groups.  For the marketer, a social group is defined as having two or more people who will interact to accomplish individual or mutual goals - one of which is usually purchasing a good or service to meet a need or desire. The reality is that a consumer's behavior isn't influenced my just one group; it is influenced by many different groups.  We refer to these groups as Reference Groups.

Reference groups influence the consumer by serving as direct (face to face) or indirect points of comparison or "reference" in building a consumer's behavior and attitudes.  In a reference group with direct influence, several individuals may be a part of the consumer's purchase decision. The typical roles of these individuals are:

The Initiator
The Initiator is the individual that first suggests or thinks of the idea of buying a product or service.

The Influencer
The Influencer is the individual whose view or advice influences the consumer's buying decision.  This person is sometimes also referred to as the Opinion Leader.  The Influencer is usually has special skills or knowledge, personality or other characteristics that will exert social influence on other members of the group. The role of the Influencer or Opinion Leader has taken on a whole new meaning and emphasis with the advent of social media platforms.

The Decider
The Decider is an individual with power and/or the financial authority to make the choice regarding which product to buy.  This is usually the consumer, but it can also be another person.

The Buyer is a person who conducts the buying transaction.  This is also usually the consumer, but it can be another person as well.

The User is the person (or persons) who will actually use the product or service that has been bought.

It is important to note that very often consumers are influenced by reference groups that they do not belong to.  We will sometimes refer to these groups as aspirational groups.  One example of an aspirational group would be the olympic team of the consumer's country.  The consumer may aspire, due to the success of the team members, to "be like them."  This may lead them to buy many of the same products that the team members may be endorsing, so that they can move towards their goal of acquiring many of the same traits of those group members.  Aspirational groups can exert a lot of influence over a group of consumers, and their potential to help a marketer increase sales should not be ignored.

Family Groups
Family Groups are usually considered to be the most important “buying” organisations within a given society.  Marketers are most interested in the roles and influence different members of a family group on a large variety of products and services a consumer may buy.  Over time the buying roles of the traditional husband-wife model relationship have been changing. In most societies, the wife is usually the primary buyer for the family unit, primarily in the product categories of food, household products and clothing. However, with more women entering into full-time work, and more men becoming telecommuting, traditional family roles are changing.  The challenge for the marketer is understanding how these societal changes affect demand for their products and services, and how the messaging mix might need to be changed to attract male rather than female buyers in a given product category (or vice versa).

Another factor to consider in Family Groups is the stage of life of its members.  Married individuals tend to show strong desires towards buying products and services which would benefit not only them but also the members of their family group. A consumer who has a spouse and child at home usually will buy for them rather than spending on themselves. An consumer entering into marriage would be more interested in buying a house, a car, and other household items such as furniture and decorating products.  Every consumer will usually go through a common set of stages of life, and will show a different buying mindset in each stage.  For a common male consumer this tends to look like:

  • Bachelorhood: Trends towards alcohol, electronics, vehicles, mobile technology (Spends Lavishly)
  • Newly Married: Trends towards purchasing a home, car, furnishings. (Spends sensibly)
  • Family with Children: Trends towards purchasing products to secure the well-being of his family’s future.
  • Empty Nest (Children getting married)/Retirement/Old Age: Trends towards medicines, health product categories, and products that are part of an increased lifestyle and income level.

Social Status
One aspect of social status is a consumer's economic status.  Marketers take into consideration the social class of the consumer when tailoring messaging to them.  A social class is a relatively "permanent" and ordered division in a society whose members share similar values, interests, and behaviors.  These classes have their own distinct reference groups, and often reference groups in some classes will influence consumers who are members of a different social class. Different social classes will tend to desire different categories of products as part of their consumer buyer behavior.  For example, an upper middle class consumer will tend to spend more of their disposable income on "luxury" items, whereas a consumer from middle to lower income groups will tend to purchase items that are required for their own survival over day-to-day comfort.

In the United States, there are four distinct class groups:
Upper Class (3%)
- Upper Uppers: The social elite who live on inherited wealth.  They are philanthropic, own many homes, and send their children to the best schools.
- Lower Uppers: Consumers who earn high income through great ability.  They are active in social and political culture groups, buy expensive homes, educations and vehicles.

Middle Class (44%)
- Upper Middles: Professionals and corporate managers who don't have a high family status or unusual levels of wealth.  They believe in higher education, and they want the "better things in life".
- Middle Class: "Average" income white and blue collar consumers who live in the better part of town.  They buy products to keep up with current trends.  They want to be in a nice home in a nice area and send their kids to quality schools.

Working Class (38%)
- They lead a working class lifestyle at any income level, education level, or job.  They usually will depend on relatives for economic and emotional support, for purchasing advice, and for assistance in rough times.  Family is the most important reference and cultural group.

Lower Class (16%) 
- Upper Lowers: These are the working poor.  Their living standard is just above the poverty line, and they actively strive to advance to a higher class of life.  Often they do not a great education or skills, and they are often poorly paid for unskilled work and tasks.
- Lower Lowers:  These are the visibly poor in society.  They are poorly educated and unskilled.  They are usually out of work and depend on the government for assistance most of the time.  They are in the middle of a day-to-day existence.

It is the marketer's job to not ignore any of the reference groups of our target markets.  We must be constantly researching and identifying these groups, because they will expose people to new lifestyles and behaviors, and change their attitudes and influence the consumer's self-image.  Reference groups are a vital component of our marketing campaigns.

In my next post I will examine other types of social factors.  After that I will look at the VALS Lifestyle Classification System.


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