Unit IV: Environmental influence

of consumer behavior

social class, life style profile of social

class, application of CB
Culture: characteristics cross cultural
understanding
Social Class and Its Influences

 Social class is the relatively permanent and

homogeneous strata in a society that differ in their
status, wealth, education, possessions and values.
 All societies have social hierarchies based on the
above aspects.
 Different social classes exhibit significant
differences in their purchase behavior.
 The difference in the consumption behavior of
social classes is due to the following factors:

Lecture By: Dipesh Bista

Social Class and Its Influences
 Economic: Families belonging to different social classes have
different levels of income. The variation in income levels
result in differences in choice of stores, choice of products
and brands and frequency of buying.
 Psychological: Different social classes vary to some extent in
terms of the psychological factors such as values, beliefs and
attitude of the families which influence the consumption
behavior.
 Life-styles: Social class also determines the type of life style
adopted by individuals and families. Choice of leisure
activities, hobbies, opinions considerably differ in various
social classes.

Lecture By: Dipesh Bista

Social Class Categories in Nepal
 Social class stratifications are artificial divisions in a
society based on income, wealth, education and
profession.
 The type of stratification differs from one society to
the other society.
 For instance, the American society is divided into
blue color, grey color, and white color working
class.
 In Nepal, social class stratification is still not very
clear. Nevertheless, the following class categories
exist in the Nepalese society.

Lecture By: Dipesh Bista

Social Class Categories in Nepal
 Lower Class: This class represents the highest proportion of the population.
It constitute of the people who live below the poverty line. People in this class
are mostly illiterate and have high mortality and morbidity rate. They
represent the marginal farmers of the villages and migrant workers in the
urban areas. This class depends on their daily earnings for their livelihood.
 Lower Middle Class: This class has mostly clerical jobs in the public or private
sector, or are small traders. They send their children to Government or
community schools. They have a fixed income and manage their modest life-
style within their income. They also have some ancestral property in the form
of farm land and a very modest house. This class cannot save any money and
have very little discretionary income.
 Middle Class: This class has good income from their salaried jobs or
businesses. They send their children to private schools. They are capable of
saving money from their income and have moderate discretionary income.
They also own small houses and motorcycle as family vehicles.

Lecture By: Dipesh Bista

Social Class Categories in Nepal
 The Upper-middle Class: This class constitute of people who have secondary
sources of income apart from their professional income. They have more than
one house and also own moderately priced family car. This class sends their
children to expensive schools in Nepal and India for education. This category
constitute of Government officials, and professionals such as doctors,
engineers and lawyers. This is the major consuming class in Nepal. They
adopt a mixed life-style that is partly Nepalese and partly Western.

 The Upper Class: This class constitute of a very small population (about one
percent) who have either inherited huge ancestral property or amassed huge
wealth through business or corruption. The neo-rich class also belongs to
this category. This class sends their children abroad for education, own huge
houses, have big bank balances, and own expensive foreign cars. This class
has fully adopted the western life-style.


Lecture By: Dipesh Bista

Measurement of Social Class

 Measurement of a social class can be

performed in three ways:
 subjective measures,
 reputational measures,
 and objective measures.

Lecture By: Dipesh Bista

Subjective measures
 The subjective measurement technique asks the respondents to
state in what class category they belong to. For instance,
respondents are asked the following question:

Which of the following five categories best describes your social class?

 Lower Class [ ]
 Lower-middle Class [ ]
 Middle Class [ ]
 Upper-middle Class [ ]
 Upper Class [ ]

 Thus the social class stratification is performed on the subjective

judgment of the respondents based on self-perceptions or self-
images.

Lecture By: Dipesh Bista

Reputational measures
 The reputational measures use information
from other people (key informants or
neighbors) to state the class category of a
family well known to them.
 This approach is very popular among the

sociologists who use the method to define

social structure.

Lecture By: Dipesh Bista

Objective measures
 The objective measures use key socio-
economic variables such as income,
occupation, education, and life-style to
define social class.
 The social class stratification can be achieved

by using a single variable or a composite

index of several variables.

Lecture By: Dipesh Bista

Social Class Mobility
 Social class is measured in terms of households. Household membership in a class
category changes as the family income, education, and occupation changes. Thus social
class is dynamic.

 People move both upwards as well as downwards from their current class membership.
If a country provides free education and ample opportunities for self-development
people rapidly move upwards.

 In Nepal, access to free quality education is very rare that results in very slow upward
social class movement. Large parts of the population live in a vicious cycle of poverty,
illiteracy, and malnutrition.
 Government’s effort to break this vicious cycle through various intervention programs
has miserably failed. This has resulted in a downward movement in Nepal’s rural
masses.

 Nevertheless, many farming families have moved upwards from lower class to lower-
middle class through horticulture and poultry farming. Some families have moved
upwards due to foreign employment. Better education has also made possible for many
urban middle-class families to move to upper-middle class.

Lecture By: Dipesh Bista

Affluent and Non-affluent Consumer
Behavior
 The social class structure in every society has grouped the total population into haves
and have-nots.

 The rapid pace of development in India and China is creating a very large affluent class
that has good income that can be spend a large part of their discretionary income on
luxury products such as expensive cars, homes, consumer durables, and jewelry.

 The affluent market consumes much of the supply of expensive wines, travels, and cars.
They are also the target consumers of private schools, expensive restaurants, health
clubs, golf clubs, and credit cards. The holiday resorts around Kathmandu valley
(Nagarkot and Dhulikhel) are targeted at affluent class’s leisure time activities.

 On the other hand, the non-affluent class is involved in their basic consumption pattern
making ends meet with their low discretionary incomes. This class represents a very
large part of the total population and cannot be ignored by marketers. The non-
affluent class is the target customers for cheap electronics, ready-to-wear garments,
common grocery, cinemas, and quick snack items.

Lecture By: Dipesh Bista

Consumer Behavior Applications of
Social Class
 Shopping Patterns: The reason for shopping differs among
different classes.
 For instance, the upper class and upper-middle class tend to
shop not only out of necessity but also for pleasure.
 This class is known to prefer stores with high-fashion image.
 Many department stores target the upper classes by making
shopping a pleasure.
 The middle class usually prefer the stores with price appeals.
 Middle class also show positive attitude toward bargaining.

Lecture By: Dipesh Bista

Consumer Behavior Applications of
Social Class
 Clothing and Fashion
 Class belonging is often reflected in choice of clothing and
adoption of fashion related products.
 Upper classes prefer to buy clothes from boutiques or go for
the original brands.
 The middle class buy clothing materials and get it stitched
from a tailoring shop or go for copies of the original brands.
 The lower classes buy cheap ready-to-wear dresses from flea
market.
 Brand name has no importance for the lower class
 The upper classes are the first to adopt new fashion that
slowly trickles down to middle classes and lower classes.

Lecture By: Dipesh Bista

Consumer Behavior Applications of
Social Class
 Leisure Time Activities
 The leisure activities of classes differ in predictable
ways.
 Type and place of entertainment sought by
different classes significantly differ.
 Upper classes seek entertainment through partying
in clubs, dining in expensive restaurants, through
travels and foreign shopping trips.
 Television is the major source of entertainment for
the middle class.
 The lower class visit cinema halls for
entertainment.

Lecture By: Dipesh Bista

Consumer Behavior Applications of
Social Class
 Home Decoration
 Class difference is clearly visible in the
purchase of items required for decorating
homes.
 Upper, middle and lower classes have distinct
choice in the purchase and use of furniture,
curtains and other home decorating items
such as paintings, sculptures, television,
flower pots etc.

Lecture By: Dipesh Bista

Culture and Consumer Behavior

Cultural values give rise to

norms and associated sanctions,
which in turn influence
consumption patterns.
Cultures are not static. They
typically evolve and change
slowly over time.

Lecture By: Dipesh Bista

Culture and Sub-culture

 Culture is a set of socially acquired behavior

patterns transmitted symbolically through language
and other means to the members of a particular
society.
 Culture, in brief, is the way of life of people in a
society.
 Culture can be tangible as well as intangible.
 Tangible culture is represented by housing, tools,
dresses, food habits works of art etc.
 Intangible culture is represented by language,
religions, values, beliefs, attitudes etc.

Lecture By: Dipesh Bista

Characteristics of Culture
Culture is learned:
 Culture is learned behavior from the past generation. Cultural
anthropologists have identified three forms of learning:
 In formal learning, the adults teach the younger generation
the cultural behavior.
 In informal learning, the younger generation observes and
imitates the behavior of other people. Informal learning can
also take place from media exposures.
 In technical learning, the teachers instruct the child in an
educational environment as what should and should not be
done.
 Through the learning process an individual learns the
consumption behavior of his culture and behaves accordingly.

Lecture By: Dipesh Bista

Characteristics of Culture
 Culture is dynamic
 Culture is also dynamic and adaptive.
 Cultural behavior changes with cross cultural exchanges as
new behavior is learned from other cultures.
 It also changes with new challenges to the current society.
For instance, the challenges posed by the population
explosion in the Hindu society have resulted in the adaptation
of birth control devices in a very short period of time.
 Thus, cross cultural influences and new challenges
establishes new consumption behavior in a society.

Lecture By: Dipesh Bista

Characteristics of Culture
 Culture satisfies needs
 Culture exists to satisfy the needs of the people in
a society.
 Culture offers social order, direction and guidance
to the people in all types of problem solving
situations.
 It provides proven methods of satisfying
physiological, psychological and social needs.
 The cultural rituals, symbols, customs, traditions,
dressing, housing, marital systems and many other
cultural values provide satisfaction to individuals
and groups.

Lecture By: Dipesh Bista

Characteristics of Culture
 Culture has sub-cultures
 The sub-culture is a subdivision of national culture based on
some homogeneous characteristics such as language,
ethnicity, race, region etc.
 The culture provides a broad behavior guideline, while
subculture provides specific behavior norms under the
culture.
 Sub-culture has similar characteristics of culture, i.e., sub-
cultural behavior is learned; sub-cultural behavior is dynamic;
and subculture provides outlet for need satisfaction.
 Sub-cultural influences on consumer behavior are similar to
cultural influences.

Lecture By: Dipesh Bista

Variations in Cultural Values
The numerous values that differ across
cultures and affect consumption include:
 Other-Oriented Values
 Environment-Oriented Values
 Self-Oriented Values

Lecture By: Dipesh Bista

Variations in Cultural Values
Other-Oriented Values

 Individual/Collective
 Youth/Age
 Extended/Limited Family
 Masculine/Feminine
 Competitive/Cooperative
 Diversity/Uniformity

Lecture By: Dipesh Bista

Variations in Cultural Values
Environment-Oriented Values

 Cleanliness
 Performance/Status
 Tradition/Change
 Risk taking/Security
 Problem solving/Fatalistic
 Nature

Lecture By: Dipesh Bista

Variations in Cultural Values
Self-Oriented Values

 Active/Passive
 Sensual gratification/Abstinence
 Material/Nonmaterial
 Hard work/Leisure
 Postponed gratification/Immediate gratification
 Religious/Secular

Lecture By: Dipesh Bista

Measurement of Culture
 Content analysis: Content analysis measures the culture in terms of
the content of communication messages (verbal, written and
pictorial messages) used in a culture. The main basis of such
measurement is how women are depicted in marketing
communication.
 Field observation: Under this method, the measurement is based on
a observation technique in which the researcher and studies a
culture for a very long period of time. The observation may be
participative (disguised) or non-participative (open).
 Qualitative tools: Focus group discussion and in-depth interviews
can also be used to understand the cultural norms and values.
 Value measurement survey: A survey conducted with a structures
questionnaire can also provide information on the culture. The
survey is based on a value measurement instrument that asks
respondents to express their opinions on freedom, comfort, national
security, and peace.

Lecture By: Dipesh Bista

Cultural Influences on Consumer
Behavior

 Culture is the accumulation of shared

meanings, rituals, norms, and traditions
among the members of a society.
 Culture has strong influence on consumer

behavior in terms of consumption choices,

core values, myths and superstitions, and
rituals.

Lecture By: Dipesh Bista

Consumption choices
 People’s consumption behavior is largely guided by the culture. What
people wear, what they eat, and what importance are attributed on
products and services are determined by the culture.
 Cultural acceptance is the most important factor in the success of a
product or service.
 The Western concept of a healthy body is slim and trim while in the
middle-east such a body is perceived to an indicator of poverty.
Thus, a low calorie product becomes an instant hit in the Western
market while in the East there is more demand for high calorie food.
 Even in the Eastern culture there is a great variation among the
various nations. For example, in Japan men share the same bath tank
and are not ashamed to bathe in nude which is unthinkable in other
cultures.

Lecture By: Dipesh Bista

Core Values
 Culture provides core values to the people.
 The Western cultures have core values such as individualism,
equality, hardworking, achievement, and technology dependency.
 The Nepalese core values consist of fatalism, collectivism, nepotism,
and lack of importance of time.
 Most of the Eastern cultures are based on a power hierarchy, the
center of power lies in the head of a family, institution or an
organization.
 Eastern cultures provide a value to work for mutual benefits of the
members of a family and society.
 In the Western culture such hierarchy does not exist. People are
perceived to be equal and free to make individual decisions.

Lecture By: Dipesh Bista

Myths and Superstitions
 Every culture has certain myths and superstitions
that influence consumer behavior.
 Myths related to good luck and bad luck are
prevalent in every culture whether it is modern or
traditional.
 In the Western culture the number 7 is associated
with good luck and number 13 with bad luck. In the
Hindu society the numbers 8 and 12 are associated
with bad luck.
 Similarly in Nepal, people avoid buying new clothes
on Monday and iron-based items on Saturday.

Lecture By: Dipesh Bista

Rituals
 Rituals are socio-religious practices of a society that are
performed to please gods, goddesses, and ancestors.
 Religious ceremonies (worships) and social ceremonies (birth,
initiations, marriage, and death) differ among the different
cultures and sub-cultures. The use of products in the
ceremonies also differs among the cultures.
 Similarly, the rituals related to gift-giving also influences
consumer behavior.
 The recent trend in Nepal’s urban life has introduced flower
bouquet as a major gift item that has increased the demand
for flower in the market.

Lecture By: Dipesh Bista