Page 129 - DMGT506_CONSUMER_BEHAVIOUR

Consumer Behaviour

Notes 4. Status is the achieved or ascribed position that the individual occupies within the
group's hierarchy.
5. Socialisation refers to the process by which new members learn the group's system
of values, norms and expected behaviour patterns.
6. A group's influence on its members' behaviour is closely related to its 'power'.
Power may be of following types:
(a) Reward power refers to the group's ability to reward the individual.

(b) Coercive power relates to the power of the group to use disapproval, withholding
rewards, or even punishing the individual.
(c) Expert power influences the results from the experience, expertise and knowledge
of the individual or group.
(d) Referent power flows from the feeling of identification that the individual has
with the members of the group.

Case Study Buyer Aspirations and Consumer Durable Sales

he demand for consumer durables in India has always depended on two things - the
aspiration felt for certain products, and the affordability of such products for the
Ttargeted population.
Over the past several years, the disposable income of Indian consumers has grown
significantly. In the meanwhile the prices of most consumer durables have fallen
substantially. As a result, affordability is not an issue for a large number of Indian
consumers.

On the other hand, the aspiration to move on to modern technology has been kindled
across product categories. In the television segment the aspiration is driven by LCD/LED
TVs, in washing machines it is driven by fully automatic and front loading washing
machines, in kitchen appliances it is driven by microwave ovens, side-by-side refrigerators
and induction cookers, in IT products it is driven by laptops and netbooks. Therefore,
across the consumer durables spectrum, there is no dearth of aspiration for high-end
products that are priced at a premium to average products in the category.

In rural India, the improved disposable incomes arising out of Employment Guarantee
Schemes as well as the improving access to credit is already resulting in strong demand
for entry-level products in each category, whether it is 14" TVs, 165-litre direct-cool
refrigerators, basic washers, or mobile phones. Thus, rural demand is another major
engine of growth for the consumer durables industry.
This fundamental combination of a dramatic improvement in affordability and an explosion
of aspiration for high-end and entry-level products will ensure that the durables market
in India grows handsomely for the next five to six years.
In this play between aspiration and affordability, the festival season brings two key
factors. On the demand side, employees getting festival bonuses during Diwali season
mean better cash availability for big-ticket purchases. Another segment of consumers are
not really constrained by cash, but are waiting for "the right time to buy" when the offers
are most attractive.

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