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3.0 Objectives
3.1 Introduction
3.2 Meaning of Consumer Environment
3.3 Family Environment
3.3.1 Structural Aspects
3.3.2 Family Life Cycle
3.3.3 Family Roles and Decision Making
3.4 Dimensions of Consumer Environment
3.4.1 Economic Environment
3:4.2 Social Environment
3.4.3 Cultural Environment
3.5 Changes in the Consumer Environment
3.6 Let Us Sum Up
3.7 Key Words
3.8 Some Useful Books
3.9 Answers to Check Your Progress Exercises

This unit deals with consumer environment which influences consumers' buying deci-
sions. A study of the environmental factors affecting consumer behaviour should enable
you to:
recognise the influence of the family environment.
explain the economic factors affecting consumer behaviour.
identify the social classes which exercise a considerable influence on buyer's
a appreciate the impact of cultural environment.
analyse changes in the consumer environment brought about by economic reforms
and globalisation.

All consumers are subject to the influence of several environmental factors and these
have an important bearing on their behaviour. The family, as well as economic, social
and cultural forces taken together constitute the consumer's environment. Thus, the
economic activities of a consumer are conditioned by several internal and external
In a dynamic and complex socio-economic environment, the consumer of today is
exposed to a large variety of new products and services.
Consumers to-day are also conscious of their rights a& wants to be assured of right
quality of goods being available at the right price. It is in this context that the concept of
'Caveat Vendor' - let the seller beware - is replacing the term 'Caveat Emptor' - let
the consumer beware.
Besides, market conditions have been changing with technological changes, innovations

a, befoe. ThecoSe of developing new producfs have also been imeasing en0mous1y
each year, while the risk of failure haunfs the dreams of enmpeneurs.
A comprehensive approach to consumer environment should recognise that man is a
complex being, and that any explanation of his economic decisions which does not take
note of his psychological make-up, the society in which he lives, and the cultural
background that flavours his orientation towards life, is likely to result in unsound
business decisions by manufacturers and distributors of a very wide range of goods.
The consumer environment can be broadly classified as external and internal. The
external environment to be discussed in detail in this unit comprise the various economic,
social and cultural forces that are beyond the control of individual consumers.
The psychological factors that are internal to the consumer include cognitions, attitudes,
motivation, personality and interpersonal response traits.

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Figure 3.1 : The Complex Consumer Environment


The influence of a family on its members is pervasive. The effect of traditional attitudes,
interests, motivations, etc. is appreciable not only in the formative years, but is likely to
extend throughout the life span of its members. During their early years, children often
acquire consumption habits - including learning brand aames of certain types of
products - which become part of their way of life.
The life-style of a family largely sets its status in society. People's aspirations,
professional opportunities, general behaviow and expectations are deeply affected by the
traditional living style of their families.
Through the family, individuals are introduced to society; they learn acceptable standards
of behaviow. Within the family, cultural values are transmitted &d specific roles are
assumed in the household. Members of a family interact with one another, and this m y
lead to conflict on occasions, particularly when those in authority constrain the behaviour
of dependents. A mother may decide that she knows best, what type of clothing to buy
for her young children and refuse to purchase garments which she thinks are unsuitable,
3.3.1 Strrirtm~ral
The term 'family' is used to describe several kinds of households. Broadly these can be
I divided into two types of family structures: the 'Nuclear' family which refers to the im-
Consumer :The Bnslcs 2) Give three examples of individual psychological factors.

3) What is a family life cycle ?

After analysing
also increase the shopper's efficiency and help to call consumers attention to new prod- Consumer Environment
ucts that might benefit them.
Packaging which imparts benefits such as protection, economy and convenience, also in-
fluence buyers' decisions.
d) Price Considerations

be85ie/477996 789.9598 Tmdand

Consumer :The Bas~cs hold similar views about tht; appropriate means of reaching theln. ~vlarkedngManager's
therefore study in detail the charzcteristics of the social class hefore designing marketing
strategies for it.
A member of any social class would normally select items that conform to the notion of
good taste and fitness held by the class. Families of the upper middle class, for instance.
including fairly successful professional men and executives are likely to buy particular
kind of houses, furniture, clothing, recreation and luxuries that coincide with what their
class thinks is the proper way to live. Indicators of changes in social stratification are
more equal educational opportunity, greater social mobility, the impact of modem
communication, mass media, etc., and they cause simfiv blurring of rigid social d~v~sioiis
and attitudes. In addition to social classes, there are social and occupational groups which
have a bearing on consumer behaviour. The social group differs from a social class in the
sense that the group is narrower and restricted in memberships. Thcs a class inay
compromise of several groups. The groups that affect a consumer's behaviour are
discussed below.
Reference Group is a relatively small social group to which a consumer belongs or
aspires to belong and that acts as a guide to acceptable beliefs, values, attitudes and
behaviour. Membership of such groups consist of small but intimate members who
frequently meet and interact with each other. Suitable examples of such g 7 - s u , ~are
friends, peer groups, fmi!y, work associates, professional associations and c ? on.
Membership groups play a significant role in the transmissioil of beileis. AInong
membership groups, the family is considered the most powerful influenlfal group becziusc
of its unique role in early childhood socialisation.
Aspirational groups are groups of which an individual makes maximum effort to r~cquire
membership. Sports heroes and movie stars are examples of aspirational Eraups.
Dissociative groups are groups which an individual avoids relating to. Such groups
equally contribute to
The &ratusof ~ o m e flni a particular culture may affect the con$~:rnpbon
of certaintypes Consumer Environment
of products,such as domesticlabour saving equipments(WashingMachines,Ivficrowave
can be identified on me basisof religion,
In a big country like India, several sub-cultures
rural-urban origin and geographical distribution.Further, as population of an increases,
the broad idealsof culture no longer satisfy certain minority groups andsub-cultures
Cultural changesare the outcomeof social, political and economlcfactors, changesin
technology,changesin the literacy rates andso forth.
Cultural trends areused as a basis for market segmentation,product development,
of marketingsttategy.
advertisingand other aspects


The consumerenvironmentall over the world andparticularly in Ind~ais undergoinga
sea chmge. Globalisation has placed theconsumerin the wider internationalmarket.
Liberalisation, privatisation and economic reforms in India have broughtin multi-
nationalsand havealso usheredin technicalcollabori?tionmd joint ventures.
These changeshave resultedin a host of new products floodingthe Indian market.
Consumers have a wider rangeof productsto choosefrom; anc marketersare constantly
competihgfor higher salesthrough advertisingand innovativec:!:~s promotion tools.
Quality consciousnessand cost consciousnessare alsogrowing. i'ompaniesareconstantly
struggling to improve quality, reduce
costsand providebetter aftcr-salesservicesto their
Consumer awareness
has consa!cr;lbly increasedand consumer forums
Consumer:The Basics The consumer todav is also a more rational, aware and discerning individual than he was
in the past.


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