No two individuals have same buying preferences. The buying tendencies of individuals vary as per their age, need, income, lifestyle, geographical location, willingness to spend, family status and so on. An individual’s immediate family members play an essential role in influencing his/her buying behaviour.

An individual tends to discuss with his immediate family members before purchasing a particular product or service. Family members might support an individual’s decision to buy a particular product, stop him for purchasing it or suggest few other options.

Family comprises of:

• Parents
• Siblings
• Spouse
• Grandparents
• Relatives (Cousins/Aunts, Uncles etc)

What an individual imbibes from his parents becomes his/her culture. In countries like India, where children are supposed to stay with their parents till the time they get married, the influence of parents on an individual’s buying decisions can not be ignored. What he sees from his childhood becomes his habit or in other words lifestyle. A female from an orthodox background would prefer salwar suits, saris instead of westerns or short outfits. In India, parents expect their children to dress up in nice, colourful outfits during marriages, festivals or other auspicious occasions. Even if children want to buy something else, their parents would always prompt them to buy traditional attire, thus influencing their buying decision.

The moment an individual enters into wedlock, his/her partner influences his buying decisions to a great extent. In most families, wife accompanies her husband for shopping be it grocery, home appliances, furnishings, car etc.An individual would always discuss with his/her partner before any major purchase. After marriage, individuals generally do not like spending on himself/herself; rather they do it for their partner or family.

A young bachelor would not mind spending on alcohol, attending night parties, casinos but the moment he has a wife at home, he would instead spend on household and necessary items. No bachelor likes to invest money on mutual funds, insurance policies, mediclaims etc but for someone who is married buying an investment plan becomes his first priority. Women generally are inclined towards buying toiletries, perfumes, dresses, household items, furnishings, food products while men would rather love to spend on gadgets, cars, bikes, alcohol etc.Both have different tastes but when they come together, they mutually decide on what to buy and what not to buy.

A Bachelor would never purchase Women’s Horlicks or Kellogg’s K special or a female perfume but when he has a wife at home; he would love to purchase them for his wife. A young girl who has never purchased shaving creams or men’s perfume all through her life for herself would not mind purchasing for her husband, father or father in law. A working woman would have different needs as compared to a housewife. A woman who goes to office would prompt her husband to buy formal trouser and shirt, office bag, make up products etc for her while a house wife would not like spending on all these as she does not require an office bag and so on.

Children also influence the buying decisions of individuals. An individual spends happily on toys, candies, ice creams, chocolates. sweets when he has children at home. Children in the family prompt their parents to subscribe to Disney Channel, Cartoon network and so on.

Individuals do not mind spending on medicines, health supplements, vitamin tablets, protein drinks if they have ailing parents at home.

The family is the main reference group that may influence the consumer behaviour. Nowadays, children are well informed about goods and services through media or friends circle, and other sources. Therefore, they influence considerably in the decisions of buying both fast moving consumer goods and durable items.

A person performs certain roles in a particular group such as family, club, organization, and so on. For example, a person may perform the role of a vice president in a firm and another person may perform the role of a marketing manager.

The vice president may enjoy higher status in the organization as compared to the marketing manager. People may purchase the products that conform to their roles and status, especially in the case of branded clothes, luxury watches, luxury cars, and so on.

The changing structure of family

 Three other basic functions provided by the family are particularly relevant to a discussion of consumer behavior.

These include:

• Economic well being
• Emotional support
• Suitable family lifestyles

Emotional well-being

Although families in the affluent nations of North America, Europe and Asia are no longer formed primarily for economic security, providing financial means to its dependents unquestionably a basic family function. How the family divides its responsibilities for providing economic well-being has changed considerably during past 30 years. No longer are traditional husband as economic provider and wife as home maker and child-rearer still valid. For instance, it is very common for married women with children in the United States and other industrial countries to be employed outside the home for their husbands to share household responsibilities.

The economic role of children also has changed. Today, despite the fact that many teenage children work, they rarely assist the family financially. Instead, many teenagers are expected to pay for their own amusements.

Emotional support

The provision of emotional nourishment (including love, affection, and intimacy) to its members is an important core function of the contemporary family. In fulfilling this function, the family provides support and encouragement and assists its members in coping with decision making and with personal or social problems. To make it easier for working parents to show their love, affection, and support to their children, greeting card companies have been increasingly creating cards for parents to give to their children (vice versa)

Suitable family lifestyle

Another important family function in terms of consumer behavior is the establishment of a suitable lifestyle for the family. Upbringing, experience, and the personal and jointly held goals of the spouses determine the importance placed on education or career, on reading, on television viewing, on the learning of computer skills, on the frequency quality of dining out, and on the selection of other entertainment and recreational activities.

Family lifestyle commitments, including the allocation of time, are generally influencing consumption patterns.

The word dynamics means ‘force’. Group dynamics means the study of forces within a group. Since human beings have an innate desire for belonging to a group, group dynamism is bound to occur. In an organization or in a society, we can see groups, small or large, working for the well-being.

The social process by which people interact with each other in small groups can be called group dynamism. A group has certain common objectives and goals and members are bound together with certain values and culture.

In organizational development, group dynamics refers to the understanding of behaviour of people in groups that are trying to solve a problem or making a decision. A good manager can act as a facilitator and assist the group in accompanying its objectives and arrive at correct decisions.

Because people gather in groups for reasons other than task accomplishment, group process occurs in other types of groups such as personal growth groups (e.g., encounter groups, study groups, prayer groups). In such cases, an individual with expertise in group process can be helpful in the role of facilitator.

Importance of Group Dynamism:

1. The group can influence the thinking of its members. The members are always influenced by the interactions of other members in the group.
2. A group with a good leader performs better as compared to a group with weak leader.
3. The group can give the effect of synergy, that is, if the group consists of positive thinkers then its output is more than the double every time.
4. Group dynamism can give job satisfaction to the members.
5. The group can also bring team spirit among the members.
6. Even the attitude, perceptions, and ideas of members depend on group dynamism. For example, the negative thinkers can be converted to positive thinkers with the help of the facilitator.
7. If the group works as a cohesive group, the cooperation and convergence can result in maximiza­tion of productivity.
8. Lastly, group dynamism can reduce the labour unrest and labour turnover due to emotional attach­ment among the group members.

Types of Groups:

Groups can be classified in a number of ways like by structure, by regularity of contact, by size, by membership. Sometimes groups are differentiated in terms of size or complexity but it is very difficult to state which group to be considered as large or small.

It is seen that in some groups a single member knows only a few of the group’s members personally or is fully aware of roles or activities each member has to play where as in small groups every member knows each other personally and are also aware of the specific roles or activities in the group. For example, each member of the college science club is likely to know others in the club and is also aware of their duties and interests within the group.

1. Primary Group and Secondary Group:

If a person interacts on regular basis with other individuals, then these individuals can be considered a primary group. Interaction can be with members of the family, with the colleagues, with neighbours etc., this means whose opinions are valued by that person, on the other hand, if a person interacts only occasionally with others, or whose opinions are not important, then this type of group is called secondary.

Difference:

Primary and secondary groups can be distinguished on the basis of perceived importance of the group to the individual and the frequency with which the individual interacts with them.

Formal Group and Informal Group:

This is the second useful way to classify groups on the basis of their formal nature. If a group has a highly defined structure, specific roles and authority levels and specific goals then this is called a formal group. For example, in an organization a list of all employees (defined structure), Managing Director, Manager, Assistants etc., (specific roles and authority levels), this shows a formal group.

Goals may be different for different organisations like to assist the homeless, working for the benefit of old people or marketing goals-Increasing sales, promoting the product etc. In these kinds of groups members have a vested interest towards a specific -goal, therefore, they are classified as a formal group.

On the other hand, if a group is more loosely defined, then it is an informal group. For example, four five girls who become friends in the school and now meet only once a month. For the marketer, informal social groups are more important because of loosely defined structure a more conducive environment is available for exchange of information to the members.

Membership Group and Symbolic Group:

Membership Group is a group to which a person belongs or would qualify for membership. For example, college alumni association, IMA, association of doctors, tennis club etc. Symbolic group is a group in which an individual is not likely to receive membership even if he/ she acts like a member by adopting that group’s values, behaviour and attitude. For example, for youngsters cricketers like Sachin Tendulkar, Sourav Ganguly etc. may constitute a symbolic group. They try to identify with these players by imitating their behaviour like the style or sometimes by purchasing specific brand of bat, gloves, dress, ball etc.

Even after this, youngsters probably will never qualify for membership as a professional cricketer. Now-a-days marketers are using the celeb­rity for advertising their products, so that people aspire to become like them after owning and using those products. Studying these groups is very important to the marketer as they exert the greatest potential influence on the consumption decisions of an individual.

Consumer Relevant Groups:

To understand in detail the kind of impact specific groups has on individuals, let us study six basic consumer relevant groups:

The Family:

It is seen, that from childhood an individual needs and consumption decisions are influenced by his/her family. Importance of the family in various decisions is based on the frequency of contact that individual has with other family members. Moreover, it is in the family an individual establishes a wide range of values, attitudes and behaviors.

Friendship Groups:

The immediate group which an individual forms after he/she moves out from the house is friendship group. Friendships are also sign of maturity and independence as they represent a breaking away from the family and forming of social ties with the outside world. They are classified as informal groups as they are unstructured and usually lack specific authority levels.

After family an individual’s purchase decisions are most likely influenced by friends. Friends fulfill a wide range of needs like they provide companionship, security and opportunity to discuss the matter which they can’t with the family members.

Friends opinions and preferences are very important for influencing an individual’s behaviour in determining the products or brands he/she actually selects. For example, marketers of products like branded shirts, jewellery and alcoholic beverages depicts friendship situations in the advertisements- ‘Green Label’ -T.V. commercial of alcoholic beverage. Consumers like to seek information from those friends who have values or outlooks similar to their own. The influence of friends will be more in a purchase decision one’s an individual finds greater similarity.

Formal social Groups:

Formal social groups, as the name says, lack intimate relationship and they serve different function for an individual. A person joins this group to fulfill goals like making new friends, pursuing a special interest, meeting important’ people specially for career advancement or also sometimes promoting a specific cause (working for the welfare of orphans).

This type of group interests marketers because members often consume products together, can discuss products or services or stores informally with other members and sometimes can even copy the consumption behaviour of other members whom they admire.

Shopping Groups:

Two or more people who shop together this can be either for food, for clothing or simply to pass the time-can be called a shopping group; people like to shop with others who are pleasant company or who they feel have more experience or knowledge about a desired product or service. Shopping with others reduces the risk that a purchase decision will be socially unacceptable, collective decision is the best in which none of the members knows about the product to be purchased.

Now-a-days, in-home shopping is more common, it consists of a group who gathers together in the home of a friend to attend a “party” which is arranged to demonstrate and evaluate a specific line of products. This kind of approach helps marketers to demonstrate the features of their products simultaneously to a group of potential customers in their surroundings.

Consumer-Action Groups:

Consumer-action groups can be divided into two broad categories: those that organize to correct a specific consumer abuse and then disband, and those that organize to address broader, more pervasive problem areas and operate over an extended or indefinite period of time.

Work Groups:

This type of group also serves as a major influence on the consumption behaviour of members as they spend a sheer amount of time at their jobs (around 48 hours per week). Formal work group consists of those individuals who work together as a team.

Their direct and sustained work relationship offers substantial opportunity for one or more members to influence the consumption related attitudes and activities of other team members. Informal friendship/work groups consists of people who have become friends as a result of working for the same firm, they may/ may not work together as a team. Marketers have recognized that work groups influences consumers brand choices and some­times even the store choice, so now they are redirecting their sales efforts to offices and plants during lunch-hour visits.

In sociology and social psychology, an in-group is a social group to which a person psychologically identifies as being a member. By contrast, an out-group is a social group with which an individual does not identify. People may for example identify with their peer group, family, community, sports team, political party, gender, religion, or nation. It has been found that the psychological membership of social groups and categories is associated with a wide variety of phenomena.

The terminology was made popular by Henri Tajfel and colleagues during his work in formulating social identity theory. The significance of in-group and out-group categorization was identified using a method called the minimal group paradigm. Tajfel and colleagues found that people can form self-preferencing in-groups within a matter of minutes and that such groups can form even on the basis of completely arbitrary and invented discriminatory characteristics, such as preferences for certain paintings.

Associated phenomena

The psychological categorization of people into in-group and out-group members is associated with a variety of phenomena. The following examples have all received a great deal of academic attention.

In-group favoritism

This refers to the fact that under certain conditions, people will prefer and have affinity for one’s in-group over the out-group, or anyone viewed as outside the in-group. This can be expressed in one’s evaluation of others, linking, allocation of resources, and many other ways.

Out-group derogation

Discrimination between in-groups and out-groups is a matter of favoritism towards an in-group and the absence of equivalent favoritism towards an out-group. Out-group derogation is the phenomenon in which an out-group is perceived as being threatening to the members of an in-group. This phenomenon often accompanies in-group favoritism, as it requires one to have an affinity towards their in-group. Some research suggests that out-group derogation occurs when an out-group is perceived as blocking or hindering the goals of an in-group. It has also been argued that out-group derogation is a natural consequence of the categorization process.

Social influence

People have been shown to be differentially influenced by in-group members. That is, under conditions where group categorization is psychologically salient, people will shift their beliefs in line with in-group social norms.

Group polarization

This generally refers to the tendency of groups to make decisions that are more extreme than the initial inclination of its members, although polarization toward the most central beliefs has also been observed. It has been shown that this effect is related to a psychologically salient in-group and outgroup categorization.

Group homogeneity

Categorization of people into social groups increases the perception that group members are similar to one another. An outcome of this is the out-group homogeneity effect. This refers to the perception of members of an out-group as being homogenous, while members of one’s in-group are perceived as being diverse, e.g. “they are alike; we are diverse”. This is especially likely to occur in regard to negative characteristics. Under certain conditions, in-group members can be perceived as being similar to one another in regard to positive characteristics. This effect is called in-group homogeneity.

Postulated role in human evolution

In evolutionary psychology, in-group favoritism is seen as an evolved mechanism selected for the advantages of coalition affiliation. It has been argued that characteristics such as gender and ethnicity are inflexible or even essential features of such systems. However, there is evidence that elements of favoritism are flexible in that they can be erased by changes in social categorization. One study in the field of behavioural genetics suggests that biological mechanisms may exist which favor a coexistence of both flexible and essentialist systems.

Some of the differences between in-group and out-group are as follows:

(1) The groups with which individual identifies himself are his in group. one’s family, one’s college are example of his in group. But out groups refers to those groups with which individual do not identify himself. These are outside groups. Pakistan is an out group for Indians.

(2) In group members use the term ‘we’ to express themselves but they use the term ‘they’ for the members of out-group.

(3) Individual is the member of his in group whereas he is not at all a member of his out group.

(4) In group based on ethnocentrism. Ethnocentrism is one of the important characteristic of in group. But out group is not based on ethnocentrism.

(5) Similarity in behavior, attitude and opinion is observed among the members of in group. But they show dissimilar behavior; attitude and opinion towards the members of out group.

(6) In group members have positive attitude towards their own in group but they have negative attitudes towards their out group.

(7) Members of in group display co-operation, good-will, mutual help and possess a sense of solidarity, a feeling of brotherhood and readiness to sacrifice themselves for the group. But individual shows a sense of avoidance, dislike, indifference and antagonism towards the members of out group.

(8) In group is a group to which individual belongs to but all other group to which he does not belongs to are his out group.

(9) Members of in group feel that their personal welfare is bound up with other members of group but out group members do not feel so.

The most important thing for the marketer is to understand about the role of ‘opinion leadership’ in marketing of goods and services. Opinion leadership which is otherwise known as word of mouth communication is an important personal influence on consumers. With the proliferation of cell phone usage and e-mail, many people are always available to friends, family and business associates. Message spreads like virus among people. Opinion leaders offer advice or information about a product, service and how a particular product may be used. Words of mouth takes place through personal or face to face communication.

Opinion Leadership

Opinion leadership is defined as the process in which one person influences the attitudes or actions of other person informally, who may be identified as opinion leader. They offer informal advice about the product or service. Opinion leaders are part of the social groups. They have social communication network. The communication is informal and interpersonal in nature which happens between those who are not associated with the commercial selling source directly.

Examples of Opinion Leadership

The role of opinion leadership could be seen in the following examples.

1. During casual talk, a friend talks about the car he recently bought. He recommends buying it.
2. A person shows a friend photographs of his recent tour abroad. He suggests that by using a particular make of camera, better pictures could be shot.
3. A family wants to have a swimming pool in their spacious house. The family head asks neighbors which pool construction company they should call.
4. A parent wants admission for his child in a particular school. He contacts other parents sending their children to the same school.

Characteristics of Opinion Leaders

Opinion leadership is a dynamic process. It is the most powerful consumer force. As informal communication sources, it effectively influences consumers in their product related decisions. The dynamics of the opinion leadership may be discussed under the following headings:

1. Credible source of information,
2. Provision of both positive and negative product information,
3. Source of information and advice,
4. Two-way street,
5. Specific characteristics.

(A) Credible Source

Opinion leaders are knowledgeable. Their advice about a product or service is considered reliable. As opinion leaders are informal sources of information, it is perceived that they give advice in the best interest of opinion seekers. The first hand information received from opinion leaders helps in reducing perceived risks. It properly tackles the anxiety in buying new products as the opinion is based on the first hand experience.

(B) Provision of Both Positive and Negative Product Information

Marketers provide information which is invariably favorable to the products they are marketing. But opinion leaders are not directly associated with marketers. They provide both favorable and unfavorable information about the product. So, opinion seekers have faith in opinion leaders. They are confident that they are receiving both positive and negative information in an accurate way.

(C) Sources of Information and Advice

Opinion leaders are the source of both information and advice. They simply share their experience about a product or service. Their talk is related to what they know about a product. In their more aggressive talks, they advise others to buy or avoid a specific product. They base their advice on proper reasons.

(D) Two-way Street

Opinion leaders in one product related situation become opinion receivers in another situation even for the same product. For example, a new homeowner thinking of buying a lawn mover seeks information and advice from other people about which brand to select. After purchasing the lawn mover, he may be satisfied with the product (in the post purchase experience). Now he has a compelling need to talk favorably about the purchase to other people to confirm the correctness of his choice. In the first instance, he is an opinion receiver and in the second he is an opinion leader.

Sometimes, an opinion leader is influenced by an opinion receiver. For example, a person may recommend a favorite hotel to his friend. In response the opinion receiver gives his own comments on that hotel. Finally, the opinion leader may come to realize that the hotel is too small, too isolated and offers fewer amenities than other hotels.

(E) Specific Characteristics

Opinion leaders possess distinct personality traits. These include self-confidence and gregariousness. They are socially inclined, outspoken and are knowledgeable.

We as consumers always find a new innovation-idea or product or even new service attractive. However, for the firm which is trying its hand at the new innovation, there is always a question hanging around. How fast will the diffusion of the innovation take place? This is to say that any innovation has got an element of risk involved. The firm will introduce a new concept or a new product after an intensive research is carried out by it. Thus we see that the process of diffusion of innovation is very critical to a firm.

Diffusion

Diffusion is a macro process concerned with the spread of a new product an innovation from its source to the consuming public. Adoption is a micro process that focuses on the stages through which an individual consumer passes when deciding to accept or reject a new product.

Diffusion of innovations is the process by which acceptance of an innovation (new products or new service or new idea) is spread by communication (mass media, sales people, informal conversation) to members of the target market over a period of time.

Some new product innovation, which were easily accepted by customers

The Diffusion Process

The diffusion process follows a similar pattern, overtime, irrespective of the social group or innovation. The typical diffusion process shows a slow growth or adoption. It later rises rapidly, and then a period of slow growth is noticed. In fast diffusion process, the product clicks immediately. The spread of innovation is very quick. People patronise the product immediately, and later on there is again slow diffusion. In slow diffusion process, the product takes a lot of time to diffuse or spread, and the consumer follows a pattern of adoption slowly by getting acquainted with the product.

Diffusion is the process by which the acceptance of an innovation (a new product, a new service, new idea or new practice) is spread by communication (mass media, salespeople, or informal conversations) to members of a social

system (a target market) over a period of time. The four basic elements of this process are:

1. The Innovation
2. The channels of Communication
3. The Social System
4. Time

Fig.4.2. Diffusion Process

These studies show that the products take a certain amount of time, from when it gets introduced to its saturation. The marketer therefore has to understand what determines the spread of innovation in a given market segment, and how do the early buying consumers differ from those of late purchasers.

1. The Innovation:

Various approaches which have been taken to define a new product or a new service include

a) Firm-oriented definitions: A firm oriented approach treats the newness of a product from the perspective of the company producing or marketing it. When the product is new to the firm it is considered to be new.

b) Product oriented definitions: Product-oriented approach focuses on the features inherent in the product itself and on the effects these features are

likely to have on consumers‘ established usage patterns. Three types of product innovations could be: Continuous innovation having the least disruptive influence on established patterns involving the introduction of a modified product, rather than a totally new product. E.g., latest version of Microsoft Office; dynamically continuous innovation which may involve the creation of a new product or the modification of an existing product e.g., disposable diapers, CD players; discontinuous innovations requiring consumers to adopt new behavior patterns e.g., TV, fax machines, Internet

c) Market oriented definitions: Judges the newness of a product in terms of how much exposure consumers have to the new product. The definitions could be:

A product id considered new if it has been purchased by a relatively small (fixed) percentage of the potential market.

A product is considered new if it has been on the market for a relatively short (specified) period of time.

d) Consumer oriented definitions: A new product is any product that a potential consumer judges to be new.

2. The channels of Communication:

How quickly an innovation spreads through a market depends to a great extent on communications between the marketer and consumers, as well as communication among consumers i.e., word-of-mouth communication. Thus this communication will include two types of communication:

1. Communication between marketers and consumers
2. Communication among consumers i.e., word of mouth.

Consumer information sources fall into four categories:

Personal sources: Family, friends, neighbors, and acquaintances.

Commercial sources: sales people, advertising, sales promotion techniques.

Public sources: Mass media, consumer rating organisations

Experimental sources: Demonstration, handling samples.

Depending on the innovation or new product, and the prospective customers, the firms try to adopt a cost effective way of communicating with them.

3. The Social System

The diffusion of a new product usually takes place in a social setting frequently referred to as a social system. In our case, the terms market segment and target segment may be more relevant than the term social system used in diffusion research. A social system is a physical, social, or cultural environment to which people belong and within which they function. For example, for new hybrid seed rice, the social system might consist of all farmers in a number of local villages.

The key point to remember is that a social system‘s orientation is the climate in which marketers must operate to gain acceptance for their new products. For example, in recent years, the World has experienced a decline in the demand for red meat. The growing interest in health and fitness thought the nation has created a climate in which red meat is considered too high in fat and calorie content. At the same time, the consumption of chicken and fish has increased, because these foods satisfy the prevailing nutritional values of a great number of consumers.

4. Time

Time pervades the study of diffusion in three distinct but interrelated ways:

a) The amount of purchase time: Purchase time refers to the amount of time that elapses between consumers‘ initial awareness of a new product or service and the point at which they purchase or reject it. For instance, when the concept of Home Land‖ super market was introduced by Asha Chavan in Pune, apart from offering a variety of quality products, also give an unconditional guarantee of replacement or refund, home delivery of all, even single item telephonic orders at no extra cost. And beyond

business, Homeland also offers free services like phone, electricity, credit card and cell phone bill payments.

b) The identification of adopter categories: The concept of adopter categories involves a classification scheme that indicates where a consumer stands in relation to other consumers in terms of time. Five adopter categories are frequently used viz., innovators, early adopters, early majority, late majority, and laggards. Let us discuss about these categories later in the chapter.

c) The rate of adoption: The rate of adoption is concerned with how long it takes a new product or service to be adopted by members of a social system i.e., how quickly it takes a new product to be accepted by those who will ultimately adopt it.

The marketing objective for launching new products is to gain wide acceptance from the market as quickly as possible. So as to obtain huge market share with the new product, marketers either adopt a Penetrating strategy, i.e., low introductory price to discourage competitors from entering the market or go for a Skimming strategy.

Influence of Product Characteristics on diffusion

The rate of spread of innovation depends on a number of factors listed below:

1. Type of group: Some groups, who are young, affluent and highly educated, accept changes faster than the old, traditional and poor groups. This shows that the target market is an important determinant of the rate of diffusion.
2. Perceived risk: The more the risk associated with changing to new innovation, the slower is the rate of diffusion. The risk consists of the product not performing as expected, the risk of the consequences of change-over, and the risk of reverting back to the old product, if not satisfied with the innovative product.
3. Type of decision: An individual vs. a collective decision. Individual decisions lead to faster diffusion than collective ones.

4. Marketing effort: This also affects the diffusion process. More aggressive marketing effort, consisting of high and continuous advertising expenditure, diffuses faster than otherwise.
5. Trial: The trial can be taken at low cost and low risk, the diffusion is faster. Some products can be borrowed, rented or, their trial can be taken at retail outlets. These products like medicines and other low priced items have faster diffusion. These days even car outlets are giving free trials and rides to prospective customers, to make their new models of cars diffuse faster.
6. Fulfillment of felt need: The faster a need is satisfied or fulfilled by a product, the greater is the rate of its diffusion.
7. Compatibility: The more the product is compatible with the beliefs, attitudes and values of the individual or group the faster the diffusion – vegetables soup for vegetarians, ordinary microwave no roasting.
8. Relevant advantage: The advantage could be of price, quality, ease of handling, product quality. To have quick diffusion, the product must offer either a price advantage or a performance advantage. Washing machine is expensive, but a labour saving device.
9. Complexity: If the product is complex (difficult to understand and use) the diffusion is slower. The product may be complex but its use must be easy. Complexity may be because of many attributes (at- tributes complexity which are difficult to under- stand). The other complexity may be trade off complexity. The trade off takes place between cost of purchase and economy. Convenience vs. space or speed of cooking, vs. quality of cooking, as in microwave ovens.
10. Observability: The more easily the positive effects of the products can be observed, the more discussion takes place and faster the diffusion process, e.g. cell phones.

Classification of Adopters

Adopters can be classified into five groups based on the time when they adopt.

Innovators: The first 2.5 per cent to adopt innovation.

Early adopters: The next 13.5 per cent to adopt.

Early majority: The next 34 per cent to adopt.

Late majority: The next 34 per cent to adopt.

Laggards: The final 16 per cent to adopt.

Innovators

Innovators are venturesome risk takers. They are younger, more educated and socially mobile. They have the capacity to absorb risk associated with the new product. They are cosmopolitan in outlook, are aware and make use of commercial media, and are eager to learn about new products, are progressive, ready to use new products.

Early adopters

They take a calculated risk before investing and using new innovations. They are opinion leaders and provide information to groups, but they are also concerned about failure. Therefore, they weigh advantages and disadvantages of the product before plunging in for a purchase.

Early majority

They tend to be more continuous and use the product after the innovators and early adopters seem to be satisfied with it. They are elders, well educated and less socially mobile. They rely heavily on inter-personal source of in- formation. They constitute 34 per cent of the consumers.

Late majority

They are doubtful and skeptical about the innovation of new products. They tend to use the product not so much because of innovation, but because of other pressures, non-availability of the product and social pressures. They have less social status, and are less socially mobile than the previous group.

Laggards

They are more traditional. They possess limited social interaction and are oriented to the past. They adopt the innovations with great reluctance. They constitute a small portion of 16 per cent of the consumers.

As depicted in figure 4.4 below adopter categories are generally depicted as taking on the characteristics of a normal distribution i.e., a bell-shaped curve that describes the total population that ultimately adopts a product.

Non adopter Categories

A classification of the non-adopter categories would include:

1. The unaware group: Those consumers who are not aware of the new product
2. Symbolic rejectors: Who, though aware of the product, have decided against buying it.
3. Symbolic adopters: Who know the product will be useful or them but have not tried it.
4. Trial adopters: Who have tried the product and also rejected the same.
5. Trial rejectors

Role of Personal Influence

Personal influence is another important factor, which plays a role in the adoption process of new products. This refers to what effect the statements made abut ‗a new product‘ by one person will have on another person‘s change in attitude or probability. This means that based on the comments or views expressed by ones personal friend or acquaintance one may change the decision to adopt a new product or innovation. It is usually observed that consumers and especially women prefer to consult one another‘s friends and value the opinions expressed by them about new products, the quality differences among the different brands, store at which to purchase to experience shopping and so on.

Market strategy related to diffusion.

There are differences in the early purchasers or innovators and late purchasers (Laggards). The strategy for the target market adopted is a “moving target market” approach. First the general target market is selected, and then the focus shifts to innovators, early adopters, early majority, late majority and laggards. This takes place as the product keeps getting acceptance from the consumers. There is then a change in the media and advertising themes for different target groups.

Diffusion enhancement strategies

The idea is to find out the diffusion inhibitors and to eliminate them for the enhancement of diffusion. For this the diffusion determinants are analysed, and diffusion strategies framed, as given in table below.

Opinion Leadership is the process by which the opinion leader informally influences the actions or attitudes of others, who may be opinion seekers or merely opinion recipients. Opinion receivers perceive the opinion leader as a highly credible, objective source of product information who can help reduce their search and analysis time and percieved risk.

Opinion leaders are motivated to give information or advice to others, in part doing so enhances their own status and self image and because such advice tends to reduce any post purchase dissonance that they may have.Other motives include product involvement, message involvement or any other involvement.

Market researchers identify opinion leaders by such methods as self designation, key informants, the sociometric method and the objective method.

Studies of opinion leadership indicate that this phenomenon tends to be product category specific, generally one of their interest. An opinion leader of one product range can be an opinion receiver for another product category.

Generally, opinion leaders are gregarious, self confident, innovative people who like to talk. Additionally, they may feel differentiated from others and choose to act differently (or public individuation).

They acquire information about their areas of interest through avid readership of special interest magazines and ezines and by means of new product trials.

Their interests may often overlap into adjacent areas and thus their opinion leadership may also extend into those areas.

Who is a market maven ?

The market maven is an intense case of a opinion leader kind of person. These consumers possess a wide range of information about many different types of products, retail outlets, and other dimensions of markets.

They both initiative discussions with other consumers and respond to requests for market information over a wide range of products and services. 

Market mavens are also distinguished from other opinion leaders because their influence stems not so much from product experience but from a more general knowledge or market expertise that leads them to an early awareness of a wide array of new products and services.

The opinion leadership process usually take place among friends, neighbours and work associates who have frequent physical proximity and thus have ample opportunity to hold informal product related conversations. These conversations usually occur naturally in the context of the product-category usage.

The two step flow of communication theory highlights the role of interpersonal influence in the transmission of information from the mass media to the populations at large. This theory provides the foundation for a revised multi step flow of communication model, which takes into account the fact that information and influence often are 2 way processes and that the opinion leaders both influence and are influenced by opinion receivers.

It is important for the marketers to segment their audiences into opinion leaders and opinion receivers for their respective product categories. When marketers can direct their promotional efforts to the more influential segments of these markets, these opinion leaders will transmit the information to those who seek product advice.

Marketers try to simulate and stimulate opinion leadership. They have also found that they can create opinion leaders for their products by taking socially involved or influential people and deliberately increasing their enthusiasm for a product category.

The diffusion process and the adoption process are 2 closely related concepts concerned with the acceptance of new products by customers.

The diffusion process is a macro process that focuses on the spread of an innovation from its source to the consuming public.

The adoption process is a micro process that examines the stages through which an individual consumer passes when making a decision to accept or reject a new product.

The definition of the term innovation can be

1. Firm oriented(new to the firm),
2. Product oriented(a continuous innovation, a dynamically continuous innovation, or  A discontinuous innovation),
3. Market oriented(how long the product has been on the market or an arbitrary percentage of the potential target market that has purchased it), or
4. Consumer oriented (new to the customer).

Market-oriented definitions of innovation are most useful to consumer researchers in the study of the diffusion and adoption of new products.

Five Product Characteristics influence the consumers acceptance of a new product:

1. Relative Advantage
2. Compatibility
3. Complexity
4. Trialability
5. Observability

Diffusion researchers are concerned with 2 aspects of communication – the channels through which word about a new product or service is spread to the public and the types of messages that influence the adoption or rejection of new products or services.

Diffusion is always examined in the context of a specific social system, such as a target market, a community, a region or even a nation.

Time is an integral consideration in the diffusion process. Researchers are concerned with the amount of purchase time required for an individual customer to adopt or reject a new product/service, with the rate of adoptions and with the identification of sequential adopters.

The 5 adopter categories are innovators, early adopters, early majority, late majority and laggards.

Marketing Strategists try to control the rate of adoption through their new product pricing policies. Companies who wish to penetrate the market to achieve market leaderships try to acquire wide adoption as quickly as possible by using low prices. Those who wish to recoup their developmental costs quickly use a skimming pricing policy but lengthen the adoption process.

The traditional adoption process model describes 5 stages through which an individual consumer passes to arrive at the decision to adopt or reject a new product:

1. Awareness, 
2. Interest,
3. Evaluation
4. Trial
5. Adoption

To make it more realistic, an enhanced model is recommended as one that considers the possibility of a pre existing need or problem, the likelihood that some form of evaluation might occur through the entire process, and that even after adoption there will be post adoption or purchase evaluation that might either strengthen the commitment or alternatively lead to discontinuation of the product/service.

Companies marketing new products are vitally concerned with identifying the consumer innovator so that they may direct their promotional campaigns to the people who are most like to try new products, adopts them and influences others.

Consumer Research has identified a number of consumer related characteristics, including product interest, opinion leadership, personality factors, purchase and consumption traits, media habits, social characteristics, and demographic variables that distinguish consumer innovators from later adopters. These serve as useful variables in the segmentation of markets for new product introductions.

1. Family is one of the most powerful social factors affecting consumer behaviour. This is more significant where there is joint family system, in which children use to live with family for longer time. Values, traditions, and preferences are transmitted from parents to children inherently.

Family members constitute the most influential primary reference group. From family, its member acquires an orientation toward religion, politics, ambition, self-worth, love, respect, and so on. Need, preference, buying habits, consumption rate, and many other aspects determined by family affect one’s behaviour.

In every family, elders, husband-wife, other members, and children have varying degree of influence on purchase decision, which is the matter of interest for the marker to appeal them. Some products are children dominant; some products are husband dominant; some products are wife dominant; while some products are equal dominant.

2. Reference Groups:

Philip Kotler states: “A person’s reference group consists of all the groups that have a direct (face-to-face) or indirect influence on the person’s attitudes or behaviour.” Groups having a direct influence on the person are called membership groups.

Normally, following reference groups affect behaviour of their members:

1. Primary Reference Groups:

They are informal groups such as family members, friends, neighbors, relatives, and co-workers with whom the person interact fairly continuously. Habits, life-style, and opinions of these groups have direct impact on the person.

2. Secondary Reference Groups:

They tend to be more formal groups such as religious groups, professional groups, trade unions or associations, etc., that affect buying decisions of an individual buyer.

3. Aspiration (Aspired) Groups:

A person is not the member of such groups. But, he likes to belong to those groups. He imitates habits, preference and buying pattern of such groups. For example, college students imitate/like to belong to film stars, sportsmen, or professional groups.

4. Dissociative (Disliked) Groups:

Theses reference groups include such groups whose values or behaviour a person rejects or dislikes. He tends to behave differently than those groups. A marketer should identify reference groups of his target market and should try to influence those groups. In case of television, automobile, clothing, home furniture, books and magazines, cigarettes, etc., the reference groups have more direct impact on buyers’ purchase decision.

Family Decision Stages

1. Problem recognition
2. Search for information
3. Evaluation of alternatives
4. Final decision

Husband-wife influence studies, classify consumer decisions as:
Wife-dominant decisions, e.g., food, purchase of groceries.Husband-dominant decisions, e.g., automobiles, life insurance.Syncratic decisions (joint), e.g., vacations, choice of schools for children.Automatic decisions (unilateral)
Decisions may either be:
Consensual: Everyone in the family may agree with the desired outcome.
Accommodative: Need conflict resolution by persuasion or bargaining.
Element of power within the family is obtained from:
Economic resources: Persons making greater economic contribution have more economic power.
Cultural norms: In a male dominated society husband has greater powers.
Expert power: More knowledge a person possess. Husband may know more about cars wife may know more about household items.
Legitimate power: This depends on the role the family members play.
Bargaining power: Power through give and take method.
Reward/referent power: Giving rewards to others which are liked and appreciated. Emotional power: Purchase decisions are influenced by emotions, sentiments and feelings of one partner.

The Social Factors are the factors that are prevalent in the society where a consumer live in.  The society is composed of several individuals that have different preferences and behaviors. These varied behaviors influence the personal preferences of the other set of individuals as they tend to perform those activities which are acceptable to the society.

The following are the important social factors that influence the behavior of an individual in one or the other way:

1. Family: The family members play a crucial role in designing one’s preferences and behavior. It offers an environment wherein the individual evolves, develop personality and acquire values. A child develops his buying behavior and preferences by watching his parents and tend to buy the same products or services even when he grows old. The family can influence the buying behavior of an individual in either of the two ways:

• Influences the personality, attitude, beliefs, characteristics of the individual.
• Influences the decision making of an individual with respect to the purchase of certain goods and services.

It is believed that an individual passes through two families: Family of Orientation and Family of Procreation. In the former type, it is the family wherein an individual has taken the birth, and the parents have a strong influence on his behavior. While in the family of procreation, it is the family created by an individual with his spouse and children and as such the preferences tend to change with the influence of the spouse.

2. Reference Group: A reference group is a group with which an individual likes to get associated, i.e. want to be called as a member of that group. It is observed, that all the members of the reference group share common buying behavior and have a strong influence over each other.

The marketers should try to identify the roles within the reference group that influences the behavior of others. Such as Initiator (who initiates the buying decision), Influencer (whose opinion influences the buying decision), Decision-Maker (who has the authority to take the purchase decision) and Buyer (who ultimately buys the product).

3. Roles and Status: An individual’s position and role in the society also influences his buying behavior. Such as, a person holding a supreme position in the organization is expected to purchase those items that advocate his status. The marketers should try to understand the individual’s position and the role very much before the endorsement of the products.

Thus, The social factors play a crucial role in building the behavior of an individual, and the marketers should understand it properly before designing their marketing campaigns.