Tag: Psychological Factors

The term ‘consumerism’ was first coined by businessmen in the mid-1960s as they thought consumer movement as another “ism” like socialism and communism threatening capitalism.

Consumerism is defined as social force designed to protect consumer interests in the marketplace by organising consumer pressures on business. Consumerism is a protest of consumers against unfair business practices and business injustices.

The idea of consumer supremacy and consumer sovereignty is definitely fallacious in a free market economy. In reality, consumer is not a king or queen. The manufacturer or the seller is dominant and his voice is all powerful. His interests normally prevail over the welfare of the consumer.

The root-cause of consumer movement or consumerism is ‘consumer dissonance’, as it has been so nicely termed. Dissonance means after purchase doubts, dissatisfaction, disillusion, disappointment. These are the sentiments of all dethroned sovereigns. But the consumer protection (the core of consumerism) is essential for a healthy economy.

The apparatus of consumer protection alone can give necessary strength to consumers in the market and restore the balance in the buyer-seller relationship. Basically, consumers are demanding four ‘rights’ from the company- Safety of products, full and accurate information about products and services (without which some articles may not be usable and may produce sales-resistance), a choice and a voice (redress).

Growth of consumer movement was a proof that business had not been practising the marketing concept but merely paying it lip sympathy. Drucker revealed that consumerism is “product-oriented marketing.” Consumer protection or consumerism will be redundant if business sincerely practices marketing concept, viz. customer-oriented marketing philosophy.

Kotler is one of the few marketing theorists to see that consumerism is the ultimate expression of the marketing concept because it forces product managers and marketers to look at things from consumer’s point of view. In other words the pressure of consumer protection really presents opportunities not challenges which, if seized upon by the marketers, can provide additional strength to their marketing effort.

Marketers should realise that only satisfied customers are the best business assets and they should not spare any efforts in obtaining as many as possible. This is the underlying spirit of marketing concept and if such a policy is executed not only in letter but also in spirit, there is no reason to have any additional constraint like consumerism or legislation.

Consumer Responsibilities

The rights and responsibilities being the two faces of the same coin, the IOCU has also drafted certain consumer responsibilities which are as follows:

(a) Critical Awareness: To be alert and questioning about the goods and services they use.

(b) Action: To act on fair and just demands.

(c) Social Responsibility: Consumers must be concerned about the impact of their consumption behaviour on other citizens, particularly on disadvantaged groups in the local, national or international community.

(d) Environmental Awareness: To be sensitive about what their consumption of goods does to the environment and not waste scarce natural resources or pollute the earth.

(e) Solidarity: To act together through the formulation of consumer groups which have the strength and influence to promote consumer interests.

Areas of Basic Rights of Consumers:

Consumers have “rights” which are important for all marketers to appreciate. Recently the UK government has encouraged the development of a citizen’s charter which includes a “Patient’s charter” for the National Health Service, a passenger’s charter for rail travellers, and various other customer-focused initiatives.

The real awakening of consumerism was in the USA. Before Nader’s book, President Kennedy highlighted the obligation on an organisation owes to its customers in his “Consumer Bill of Rights”.

This encompassed four main areas that should be basic rights for all consumers:

(1) The right to safety

(2) The right to be informed

(3) The right to choose

(4) The right to be heard.

The idea of rights can be traced back to the “inalienable rights” included in the US Declaration of Independence by Thomas Jefferson. The marketing profession of today must be aware of these rights and combine them where possible in any marketing plans for products and services. They form a good framework for considerations.

(1) The Right to Safety:

When a purchase is made, the consumer has the right to expect that it is safe to use. The product should be able to perform as promised and should not have false or misleading guarantees. This “right” is in fact a minefield for the marketing profession. Products which were at one time regarded as safe for use or consumption have subsequently been found by modern research not to be so.

There was a time when cigarettes were regarded as not being harmful to health, sugar in foods was not highlighted in television advertising as being bad for teeth, and the public were advised to “go to work on an egg”- in retrospect, was it safe to do so? Other examples are to be found in the medical field, such as the Thalidomide drug which caused deformity to children born to mothers who took his prescribed drug.

Legislation which highlights “Products liability” has been introduced in several countries. This has forced suppliers to consider their responsibility. But should companies go further in a positive rather than a negative way? It could be said that this right will be closely linked to legislation and it is obvious that this right will be closely linked to legislation and it is obvious that marketers who fail to protect consumers do so at their peril.

(2) The Right to be informed:

The right to be informed has far-reaching consequences – it encompasses false or misleading advertising, insufficient information about ingredients in products, insufficient information on product use and operating instructions, and information which is deceptive about pricing or credit terms. But this adopts a negative approach. Avoiding trouble is not sufficient.

Any market should take advantage of every opportunity to communicate with consumers and to inform them about the benefits and features of the product offered. It should be no protection to claim that consumers fail to read instructions. Marketers must ensure fully effective communications between consumer and supplier.

But this ‘right’ determines that customers should be given adequate information in order to implement the next right-the right to choose.

(3) The Right to Choose:

The consumer has the right to choose and, of course, marketing does try to influence that choice. But, in most western markets competition is encouraged and products should not confuse consumers.

As an example, it has been suggested that to make this right easier to attain, packaging should be changed so that similar products from different firms are packaged in exactly the same quantities, or at least use both metric and imperial weights/ measures and so make value comparisons easier for the customer.

In fact, Sainsbury provide this comparative information on shelf tickets, but Tesco do not. The unanswered question remains; Do consumers use this information in making choices, or do they use other criteria?

(4) The Right to be Heard:

The right of free speech is present in all western countries. However, do organisations listen to consumers? In a well-focused marketing organisation such feedback should be encouraged, and it should be treated as a key input for the future. This right allows consumers to express their views after a purchase, especially if it is not satisfactory. When anything goes wrong with a purchase the customer should expect that any complaint should be fairly and speedily dealt with.

Consumerism and Marketing

All consumer groups affect the marketing environment in which organisations operate. In addition, it should be realised that individual pressure groups are each ‘marketing’ their ideas, but this is not considered here. Pressure groups can be considered as one way of receiving feedback from consumers.

By working with such groups marketers can gain increased influence, and this can be reflected in additional exposure as the pressure groups can generate positive. PR for cooperative suppliers. Where it is an area of individual consumer taste, such as; beer, the Campaign for Real Ale successfully encouraged suppliers to meet demands.

So marketers need to work with organised consumer groups and understand the power of such groups in reflecting consumer attitudes and in shaping demand. The consumers of today can vote with their spending power.

There is a growing realisation that this is happening. Companies that recognise this and comply with such expectations hold a strong marketing advantage over their unaware competitors. In 1991 The Times reported:

‘Stop drinking Nescafe for the sake of babies in Brazil’, the General Synod (of the Church of England) told us this week. But as far as the Church the England’s legislators are concerned, we may continue to enjoy Rowntrees’ sweets, Eindus fish fingers and Cross & Blackwell soup-our babies may continue to sup breast milk substitutes.

Yet these are also products of the Nestle group, which, campaigners claim, promotes bottle feeding in third world countries, encouraging mothers to give up breast-feeding, and increasing the risk of disease. Nestle says that it is acting in accordance with a World Health Organisation code of 1981; the campaigners retort that it is breaching rules added to the code in 1986.

We chose not to target baby milk, because it seemed inappropriate to boycott a product that some child might genuinely need/ says Patti Rundall, the national coordinator of Baby Milk Action, the pressure group that inspired the motion passed by the synod. ‘Nescafe is Nestle” s highest profile brand and the company can well afford to lose some of its market share without its affecting jobs.’

Campaigners do not necessarily measure effectiveness only in terms of policies reversed and products withdrawn. There is little doubt that numerically more boycotts fail than succeed, the magazine The Ethical Consumer said last year, adding – ‘Even an “unsuccessful” boycott can be a useful campaigning tool.’

However, when the Avon cosmetics group announced in June 1989 that it was giving up animal-testing, a spokesman admitted that consumer boycotts had influenced the decision. A similar animal testing campaign against Boots. The Chemist, has been less successful. The campaign is directed at Boots shops, but its targets include drug-testing by Boots Pharmaceuticals.

The point is that Nestle are being made a target for consumer action aimed at their top selling product, even though the behaviour being attacked is taking place with another product (dried baby milk) in another country (Brazil).

In marketing and economics, it is said consumer is the king. Consumers are supposed to direct and control all economic activities, but the reality is a far cry from this in India.

The reasons are many:

1. Some products, some of which are of strategic importance, are short in supply. Producers exploit the consumer as in the situation of excess demand, supplier and not the consumer becomes the king in the market. Trading in such products gives rise to black market and hoarding.
2. In certain products, even if there is no actual shortage, markets due to oligopoly (market with few sellers) and monopoly (market with one seller), create an artificial demand by restricting the output so that they are able to push up the price. Under such conditions, consumers often get products paying a high price for a low quality.
3. Ignorant and uneducated consumers. Lack of education has spilled its ill effect on every sphere of the society, including in consumption. Consumers are ignorant and uneducated about the market conditions and the availability of products. In such situations, the marketer has a tendency to exploit the consumer. The situation is really unfortunate when the so called educated people turn out to be ignorant consumers. In India, there are many such cases.
4. People are very scared of the legal procedures. People are apprehensive about Police and Courts. Many consumers, to avoid legal action, will not exercise their rights. People are unaware of the simple procedures under the Consumer Protection Act.
5. Last but not the least, India is a country of low and middle-class income people. Most of them struggle for their “bread and butter” and consider raising voice, against injustice towards them from the market or a Government institution, a time wasting activity, This needs an attitudinal change, and consumerism can go a long way in achieving such attitudinal change.

All these points emphasise one aspect. There is a real need in our country to have a good and effective “Consumer Protection.” Such a protection will go a long way to build a healthy economy. A strong market is made up by strong supply and demand side. Consumer Protection, which is the core of consumerism alone, can give necessary strength to the demand side in the market, which is generally biased in favour of the supplier. To strike a balance in the buyer-seller relation, “consumer protection” plays an important role.

To have an effective consumer protection, a practical response on the part of three parties, viz., the business, the Government and the consumer, is essential. Firstly, the business, comprising the producers and all the elements of the distribution channels, all have to give due importance and regard to consumer rights.

The producer has an inescapable responsibility to ensure efficiency in production and quality of output. Producers are always tempted to charge “exploitative price” that should be resisted, especially when the product is of high importance and relatively low supply. In other words, if it is a seller’s market, a socially responsible producer should see that product reaches the consumer within a reasonable time and at a reasonable price, i.e., products should not be hoarded and black marketed.

As the veteran business executive of a multinational observes- “Restraint is best exercised voluntarily than through legislation, which will, otherwise, become inevitable. Advertising agencies and marketing management have a very important role to play in this respect. By overplaying the claims, they will be cutting the very branch on which they are perched.”

Secondly, the Government has to come to the rescue of the “helpless” consumer by preventing him from being misled, duped, cheated and exploited. The motive of private gain tempts business to maximise income by socially undesirable trade practices. These are calls for Government intervention.

Statutory action, to protect the interests of consumers, has become quite common everywhere in the world. The most common example of Government’s intervention to protect consumer’s interest is the policy of price cycling in the case of house rent, kerosene, etc.

Thirdly, consumers themselves should accept consumerism as a means of asserting and enjoying their rights. This brings us to the next important issue in consumerism:  “Consumer’s Rights.”

Indian Scenario on Consumer Protection

Protection of consumers is necessary because an average consumer is less informed and less powerful than the seller. Both voluntary measures and law can be used to protect consumers.

Anyone who buys goods and avails services for his/her use is a consumer. Any user of such goods and services with the permission of the buyer is also a consumer. Government of India has enacted more than thirty laws to improve the lot of the consumers.

Some of these are; The Contract Act 1882, The Sale of Goods Act 1930, The Laws of Torts, The Essential Commodities Act 1955, Tine Prevention of Food Adulteration Act 1954, The Standards and Weights of Measures Act 1976, The Monopolies and Restrictive Trade Practices (MRTP) Act 1969, Agriculture Produce (Grading and Marketing) Act 1937 and the Consumer Protection Act 1986.

Despite the plethora of laws and rules, the status of consumers in India remains deplorable. There are several loopholes in many laws. The implementation of many laws has been tardy and faulty. The enforcement machinery is lethargic and corrupt.

Consumers are ignorant of the rights and remedies available to them under different laws. Even if a consumer is aware of these laws, he does not go to the courts due to complicated, time-consuming and expensive legal procedures.

In the absence of strong consumer movement, legislation has failed to improve the lot of the consumers. Further, the various laws provide no direct relief to the consumer as the focus is on punishment to persons violating the laws.

The Consumer Protection Act, 1986 was enacted for better protection of consumers’ interests. It provides effective safeguards to consumers against defective goods, unsatisfactory services, unfair trade practices and other forms of exploitation.

The law lays down a time frame for disposal of cases. It provides for simple, speedy and inexpensive redressal of grievances because no fee or other charges have to be incurred by a consumer. He can make a complaint on a simple paper without any legal or stamp paper.

Unlike other laws, which are punitive or preventive in nature, this law is compensatory in nature. It provides for three tier machinery consisting of the District Forum, State Commissions and National Commission.

The law also provides for formation of Consumer Protection Councils. These Councils are expected to promote the cause of consumer protection in every State of India through education.

Consumerism is a social and economic order that encourages the acquisition of goods and services in ever-increasing amounts. With the Industrial Revolution, but particularly in the 20th century, mass production led to overproduction the supply of goods would grow beyond consumer demand, and so manufacturers turned to planned obsolescence and advertising to manipulate consumer spending. In 1899, a book on consumerism published by Thorstein Veblen, called The Theory of the Leisure Class, examined the widespread values and economic institutions emerging along with the widespread “leisure time” at the beginning of the 20th century. In it, Veblen “views the activities and spending habits of this leisure class in terms of conspicuous and vicarious consumption and waste. Both relate to the display of status and not to functionality or usefulness.”

In economics, consumerism may refer to economic policies that emphasise consumption. In an abstract sense, it is the consideration that the free choice of consumers should strongly orient the choice by manufacturers of what is produced and how, and therefore orient the economic organization of a society (compare producerism, especially in the British sense of the term).

Consumerism has been widely criticized by both individuals who choose other ways of participating in the economy (i.e. choosing simple living or slow living) and experts evaluating the effects of modern capitalism on the world. Experts often assert that consumerism has physical limits such as growth imperative and overconsumption, which have larger impacts on the environment, including direct effects like overexploitation of natural resources or large amounts of waste from disposable goods, and larger effects like climate change. Similarly, some research and criticism focuses on the sociological effects of consumerism, such as reinforcement of class barriers and creation of inequalities.

Consumerism covers the following areas of consumer dissatisfaction and remedial efforts:

(1) Removal or reduction of discontent and dissatisfaction generated in the exchange relationships between buyers and sellers in the market. The marketing activities of the selling firms must ensure consumer satisfaction which is the core of marketing concept. Marketing practices and policies are the main targets of consumerism.

(2) Consumerism is interested in protecting consumers from any organisation with which there is an exchange relationship. Hence, consumer dissonance (post-purchase anxiety and doubt) and remedial effort can develop from consumers’ relations not only with profit-seeking organisations but also with non-profit organisations, e.g., hospitals, schools, Government agencies, etc.

(3) Modern consumerism also takes keen interest in environmental matters affecting the quality of life.

Consumerism Opportunities:

Consumerism is now an established, a vocal, and a well-organised force in the marketplace so that consumer complaints and grievances will be heard and redressed.

If business ignores them or if business cannot or will not be accountable to the consumer, it is obvious that the only alternative is more and more consumer legislation and Government intervention to ensure justice and fair play to consumers. It means that indifference of business towards ever-growing consumer movement will amount to an open invitation or a blank cheque in favour of Government interference in the free market mechanism.

Areas of Basic Rights of Consumers:

Consumers have “rights” which are important for all marketers to appreciate. Recently the UK government has encouraged the development of a citizen’s charter which includes a “Patient’s charter” for the National Health Service, a passenger’s charter for rail travellers, and various other customer-focused initiatives.

The real awakening of consumerism was in the USA. Before Nader’s book, President Kennedy highlighted the obligation on an organisation owes to its customers in his “Consumer Bill of Rights”.

This encompassed four main areas that should be basic rights for all consumers:

(1) The right to safety

(2) The right to be informed

(3) The right to choose

(4) The right to be heard.

The idea of rights can be traced back to the “inalienable rights” included in the US Declaration of Independence by Thomas Jefferson. The marketing profession of today must be aware of these rights and combine them where possible in any marketing plans for products and services. They form a good framework for considerations.

(1) The Right to Safety:

When a purchase is made, the consumer has the right to expect that it is safe to use. The product should be able to perform as promised and should not have false or misleading guarantees. This “right” is in fact a minefield for the marketing profession. Products which were at one time regarded as safe for use or consumption have subsequently been found by modern research not to be so.

(2) The Right to be informed:

The right to be informed has far-reaching consequences it encompasses false or misleading advertising, insufficient information about ingredients in products, insufficient information on product use and operating instructions, and information which is deceptive about pricing or credit terms. But this adopts a negative approach. Avoiding trouble is not sufficient.

Any market should take advantage of every opportunity to communicate with consumers and to inform them about the benefits and features of the product offered. It should be no protection to claim that consumers fail to read instructions. Marketers must ensure fully effective communications between consumer and supplier.

(3) The Right to Choose:

The consumer has the right to choose and, of course, marketing does try to influence that choice. But, in most western markets competition is encouraged and products should not confuse consumers.

As an example, it has been suggested that to make this right easier to attain, packaging should be changed so that similar products from different firms are packaged in exactly the same quantities, or at least use both metric and imperial weights/ measures and so make value comparisons easier for the customer.

(4) The Right to be Heard:

The right of free speech is present in all western countries. However, do organisations listen to consumers? In a well-focused marketing organisation such feedback should be encouraged, and it should be treated as a key input for the future. This right allows consumers to express their views after a purchase, especially if it is not satisfactory. When anything goes wrong with a purchase the customer should expect that any complaint should be fairly and speedily dealt with.

The influence of media on consumer behavior is profound. The billions of dollars spent in advertising each year attest to the impact of media on consumer purchasing and buying preferences. The ability of media to shape consumer trends and tastes through media such as movies, television shows and music is all-pervasive. New media such as Internet sites accelerates consumer receptivity to products through comments made on websites and blogs.

Entertainment Media

Media can shape who we are as both public and private people. The adage you are what you consume should apply to media as much as it does to food. A celebrity wears a certain clothes ensemble or mentions the designer, manufacturer or store where it was purchased and almost immediately, sales for that item skyrocket. Celebrity endorsers bring instant brand awareness and receptivity even if indirect. Advertisers pay to get their products conspicuous placement in TV and movies because they believe these seemingly non-commercial associations will result in positive uplift and eventually, sales.

Advertising Media

Media is such a part of our daily lives that we don’t even realize it’s influencing us in big and small ways. Media use in advertising is purposely designed to elicit a change in consumer action, belief and perception. It unabashedly woos us to buy products we don’t need and trust wholly with product claims that are puffery or exaggerated. While it’s generally known that we’re being swayed for commercial reasons, the consuming public allows these forays because media pays for shows on television or music on the radio as well as the information and news we read in newspapers and magazines.

Caveat Emptor

Websites such as Angies’ List and The Urban Shopper exist to guide consumers in their choice of products and services, locally and nationally. The consumerism adage “Buyer Beware” is needed more than ever as the power of all media to influence and inform and impact consumerism continues grows exponentially, and more people have access to that media, with fewer controls in place to scrutinize what’s respectable or true.

Online Media

The Internet has added significantly to media’s ability to influence consumers. There are thousands of websites from both commercial and private sources hawking everything for sale under the sun. While consumers still retain a bit of guarded concern on those commercial entities they know are out for a buck, they tend to be swayed and a bit more open to entreaties from bloggers and forum posts, which they typically view as unbiased third parties.

Reference groups are groups of people that influence an individual’s attitudes, values, beliefs, and buying behaviour. They act as a point of comparison or reference for individuals when making consumption decisions. These groups can be formal, such as professional associations, or informal, like friends, family, or peer groups. Reference groups affect consumer behaviour by shaping perceptions of what is acceptable, desirable, or aspirational. They serve as sources of information, social approval, and identity reinforcement. Consumers often adopt buying patterns, brands, or lifestyles that align with the values of their reference groups. Thus, marketers study reference groups to design strategies that build social acceptance and appeal to consumers’ desire for belonging and approval.

Types of Reference Groups:

• Primary Reference Groups

Primary reference groups are close-knit groups with whom an individual interacts frequently and shares emotional connections. Examples include family members, close friends, and peers. These groups strongly influence consumer behaviour because of direct communication and regular interactions. Members often exchange opinions, suggestions, and experiences that shape buying decisions. For instance, children may adopt their parents’ brand preferences, or a person may purchase a product recommended by close friends. These groups act as a foundation for social learning, shaping values, attitudes, and consumption habits. Marketers often target primary groups because word-of-mouth and personal recommendations from trusted sources play a crucial role in shaping brand loyalty and influencing purchase decisions effectively.

• Secondary Reference Groups

Secondary reference groups are larger and less personal compared to primary groups. They include associations, clubs, professional networks, or communities where interactions are more formal and goal-oriented. Though the emotional bond is weaker, these groups influence consumer behaviour by setting standards, rules, or social expectations. For example, a person may purchase formal attire due to professional association requirements or adopt certain products promoted in community organizations. Secondary groups provide consumers with exposure to new ideas and broader perspectives, often influencing them to align with group norms. Marketers often use endorsements, sponsorships, or collaborations with these groups to reach wider audiences and create credibility for their products or services.

• Aspirational Reference Groups

Aspirational reference groups are groups to which individuals aspire to belong but are not currently members. These groups strongly influence consumer behaviour by motivating individuals to adopt lifestyles, brands, or consumption patterns associated with success, prestige, or social status. Celebrities, influencers, professional elites, or admired peer groups often serve as aspirational references. For example, a consumer may purchase luxury brands, follow fashion trends, or adopt a fitness routine to emulate the lifestyles of their role models. Marketers strategically use aspirational groups in advertising to create a sense of desirability, encouraging consumers to associate products with upward mobility, prestige, or self-improvement. Aspirational influence is powerful in shaping aspirational purchases and brand positioning.

• Dissociative Reference Groups

Dissociative reference groups are groups with values, lifestyles, or behaviours that an individual actively avoids or rejects. These groups influence consumer behaviour by motivating people to distance themselves from products or brands associated with them. For example, a person may avoid budget brands to not be perceived as part of a low-status group, or they may reject certain cultural or lifestyle products that contradict their values. Dissociative groups are equally important for marketers because consumers’ avoidance patterns highlight how positioning and branding must be managed carefully. By differentiating products from negative associations, marketers can appeal to consumers who consciously wish to separate themselves from specific groups or identities.

Reference groups effects of Consumer Behaviour:

• Informational Influence

Reference groups affect consumer behaviour by providing valuable information that guides purchasing decisions. Consumers often rely on group members for advice, reviews, or first-hand product experiences before making a choice. For example, a person may consult friends about which smartphone brand is most reliable. This informational influence reduces uncertainty and builds confidence in the decision-making process. Online communities, social media groups, and peer discussions act as strong sources of product knowledge. Marketers leverage this effect by encouraging user reviews, testimonials, and influencer recommendations to shape perceptions. Informational influence plays a crucial role in new product adoption, technology purchases, and high-involvement decisions where accuracy and trust are important.

• Normative (Utilitarian) Influence

Normative influence occurs when consumers conform to group expectations to gain approval or avoid disapproval. People often purchase products, brands, or services that align with social norms established by their reference groups. For instance, wearing fashionable clothing may be influenced by peer approval, or buying luxury goods may help individuals maintain social acceptance. The fear of social rejection or desire for belonging drives this behaviour. Normative influence is particularly strong in visible consumption categories such as clothing, gadgets, and lifestyle choices. Marketers use this effect by creating campaigns that emphasize social acceptance, group belonging, and the idea that using a product will enhance social status and peer approval.

• Value–Expressive (Identification) Influence

Value-expressive influence shapes consumer behaviour by allowing individuals to express their self-concept and identity through group association. Consumers adopt products and brands that reflect the values, beliefs, or lifestyles of their reference groups. For example, someone who identifies with an eco-friendly community may prefer sustainable clothing or organic food brands. Similarly, youth groups may influence members to adopt trendy gadgets or music styles. This influence helps individuals communicate who they are or aspire to be. Marketers tap into value-expressive influence by aligning brand messaging with lifestyle values, cultural identity, and self-expression. This effect is particularly strong in lifestyle, fashion, and cause-driven marketing campaigns.

• Comparative Influence

Comparative influence arises when consumers evaluate themselves, their possessions, or their lifestyle against those of their reference groups. People compare their choices with others to determine if they are aligned with social standards. For example, someone may compare their car model with peers to ensure it reflects their social standing. This influence drives competitive consumption and motivates consumers to upgrade products, adopt new brands, or pursue higher status symbols. It can create both satisfaction (if aligned) or dissatisfaction (if lagging behind). Marketers use comparative influence by positioning products as aspirational, highlighting competitive advantages, or showcasing how their brand allows consumers to “keep up” with or surpass peers.

• Conformity Influence

Conformity influence occurs when consumers adjust their attitudes, preferences, or behaviours to match the expectations of their reference groups. Individuals often conform to avoid conflict, reduce uncertainty, or strengthen their sense of belonging. For instance, in a workplace setting, employees may adopt the same brand of gadgets or clothing styles as their colleagues. Similarly, students may use the same social media platforms as their peers. Conformity fosters group harmony but can limit individuality. Marketers leverage this effect by promoting trends, emphasizing popularity, and creating campaigns that highlight collective adoption of a product, persuading consumers that “everyone is using it.” This influence strongly drives fashion, technology, and lifestyle consumption.

• Aspirational Influence

Aspirational influence occurs when consumers look up to a reference group or individuals they admire and aspire to emulate their lifestyle, behaviour, or consumption patterns. These groups may include celebrities, influencers, successful entrepreneurs, or elite social circles. Consumers are motivated to purchase products that symbolize prestige and success to feel closer to their aspirational group. For example, buying luxury fashion, premium cars, or branded gadgets often reflects aspirational influence. Marketers tap into this by using celebrity endorsements, influencer marketing, and aspirational advertising to associate their brand with status and achievement. This effect drives premium product demand, brand loyalty, and inspires upward mobility in consumer lifestyles.

• Dissociative Influence

Dissociative influence arises when consumers deliberately avoid products, brands, or behaviours associated with a group they do not wish to identify with. Unlike aspirational groups, dissociative groups represent lifestyles, values, or status symbols that consumers reject. For example, a young professional may avoid wearing outdated fashion brands associated with older generations, or eco-conscious buyers may avoid companies known for unethical practices. This influence helps consumers shape their identity by creating boundaries of “what not to be.” Marketers must be cautious of this effect, ensuring their brand does not become linked to negative perceptions. Conversely, some brands position themselves as alternatives to dissociative groups, appealing to rebellious or non-conformist consumers.

Social class plays a significant role in shaping consumer behaviour, as it influences people’s lifestyles, values, purchasing power, and preferences. It refers to divisions in society based on income, education, occupation, and wealth, which determine access to resources and opportunities. Social class not only reflects economic position but also carries cultural meanings, affecting how consumers perceive themselves and how they wish to be perceived by others. Higher social classes often emphasize prestige, exclusivity, and luxury brands, while middle and lower classes focus more on value for money, functionality, and necessity. Marketers study social class structures to segment markets, target consumers effectively, and design positioning strategies that appeal to specific class-driven needs. Products and services often carry symbolic meanings, allowing consumers to express their identity and social aspirations. For instance, owning premium cars, designer clothing, or branded gadgets may signal higher status. Conversely, affordable but reliable goods cater to practical needs of lower-income groups. Social class thus creates both differences and similarities in buying patterns, making it one of the most crucial environmental determinants of consumer behaviour. Understanding its impact helps marketers anticipate consumer expectations and build stronger brand-consumer relationships.

Nature of Social Class

• Hierarchical Structure

Social class is inherently hierarchical, dividing society into higher, middle, and lower groups. Each level carries specific privileges, opportunities, and consumption patterns. The hierarchy is not rigid, allowing movement upward or downward depending on education, occupation, and income. Consumers in higher classes enjoy greater access to luxury, cultural capital, and exclusive services, while lower classes focus on necessity-based consumption. This layered nature of class reflects inequality, aspirations, and distinct behavioral differences among consumers in the marketplace.

• Relative and Comparative

The nature of social class is relative, meaning it is understood in comparison to others. A person’s status is judged not in isolation, but against peers, neighbors, and society at large. For example, owning a car may symbolize higher class in one community, but merely average in another. This relativity shapes consumer choices, as individuals constantly compare themselves with reference groups. Marketers often exploit this by positioning products to appeal to aspirational desires and social comparisons across different classes.

• Cultural and Social Influence

Social class is influenced by cultural values, traditions, and social norms. It reflects lifestyle, beliefs, and practices beyond just wealth. For example, etiquette, fashion sense, language, and even leisure activities are markers of class identity. Class determines what is considered “acceptable” or “prestigious” in a given society, shaping consumption accordingly. Individuals within a class share similar tastes, preferences, and consumption habits, reinforcing cultural cohesion. Thus, social class is not only economic but deeply cultural, affecting consumer behavior and purchase decisions significantly.

• Dynamic in Nature

Social class is dynamic, meaning it changes with time, economic development, and personal achievements. Upward mobility occurs when individuals improve their education, income, or occupation, leading to new consumption patterns. Conversely, economic crises or unemployment may cause downward mobility. Globalization and digitalization have also blurred class distinctions by providing wider access to products and information. Thus, social class is not fixed but continually evolving, influencing how consumers adapt their choices, aspirations, and lifestyles in response to changing circumstances.

• Multidimensional Concept

The nature of social class is multidimensional, determined by several factors like income, education, occupation, lifestyle, and even family background. A wealthy person without cultural refinement may not enjoy the same status as an educated professional with cultural capital. Similarly, occupation and social influence can sometimes outweigh income in class identification. This multidimensional aspect makes social class complex, as it cannot be defined by a single factor. It reflects a combination of economic, cultural, and social dimensions that shape consumer identity.

Symbols of Status:

Symbols of status are material and non-material indicators that reflect an individual’s social standing and serve as tools for social recognition. In consumer behaviour, such symbols influence how people project their identity and how others perceive them. These symbols can include luxury cars, designer clothing, premium smartphones, branded jewelry, or even experiences like luxury travel and membership in elite clubs. Status symbols allow individuals to signal wealth, success, and cultural sophistication, even beyond their basic functional value. For instance, an expensive watch not only tells time but also conveys prestige and achievement. Non-material symbols such as education, professional titles, or belonging to elite organizations also serve as strong indicators of status. Marketers leverage these aspirations by associating products with exclusivity, sophistication, and social prestige. For example, advertising campaigns for luxury brands often highlight scarcity, celebrity endorsements, and heritage value to strengthen symbolic meaning. Status symbols vary across cultures—what is prestigious in one society may not hold the same value in another. Importantly, as consumers strive to climb the social ladder, their purchasing decisions are often guided by a desire to own products that reflect higher-class lifestyles. Thus, symbols of status strongly shape consumer motivation and brand preference.

• Wealth as a Status Symbol

Wealth remains one of the strongest indicators of social status. Ownership of luxury houses, high-end cars, jewelry, and designer fashion reflects financial power and prestige. The ability to spend lavishly on vacations, memberships in elite clubs, and philanthropy also symbolizes wealth. Consumers use such displays to differentiate themselves from lower classes and reinforce social identity. Marketers leverage this by positioning products as luxury or premium. The symbolic value often outweighs functional utility, as people purchase these items not just for use, but to showcase their financial strength, social standing, and elite lifestyle in the eyes of society.

• Education as a Status Symbol

Educational qualifications serve as a vital symbol of social class and mobility. Higher education, especially from prestigious institutions, represents knowledge, refinement, and superior social standing. Degrees and professional credentials act as gateways to elite professions and higher incomes, indirectly reflecting success and achievement. Consumers with advanced education often seek products and services that align with intellectual sophistication, global exposure, and cultural awareness. For many, sending children to expensive schools or international universities becomes a display of social position. Education symbolizes not only intelligence but also the social prestige and lifestyle opportunities it affords in modern consumer societies.

• Occupation as a Status Symbol

Occupation is a direct indicator of one’s role, prestige, and contribution to society. Professions such as doctors, lawyers, engineers, and CEOs are regarded with high respect, symbolizing authority, knowledge, and influence. The nature of one’s job often dictates income, lifestyle, and consumption patterns. For example, corporate executives may use luxury brands, business-class travel, and elite memberships to reinforce their occupational prestige. Similarly, uniforms, titles, and professional designations act as visible markers of status. Consumers often align their buying behavior with occupations that emphasize prestige, responsibility, and authority, making occupational identity a strong determinant of perceived social class.

• Lifestyle as a Status Symbol

Lifestyle choices, such as where people live, how they spend their leisure time, and the hobbies they pursue, symbolize their social position. Living in affluent neighborhoods, traveling internationally, engaging in fine dining, fitness clubs, or cultural events reflects an elevated status. People use lifestyle consumption to differentiate themselves and communicate sophistication, modernity, or exclusivity. Even subtle choices, like owning eco-friendly vehicles or adopting luxury wellness practices, signal values tied to class. Marketers target this by promoting products as part of a desirable lifestyle rather than just functional goods. Lifestyle serves as a dynamic and evolving marker of social status.

• Consumption of Luxury Brands as Status Symbols

Luxury brands play a significant role in signifying social class and prestige. Products like Rolex watches, Gucci apparel, Mercedes-Benz cars, or Apple gadgets act as visible markers of wealth and exclusivity. Such goods carry symbolic value far beyond their functional utility, providing consumers with recognition and respect in society. People buy luxury brands to signal belonging to higher social classes or aspirations for upward mobility. Exclusive branding strategies like limited editions and celebrity endorsements reinforce their desirability. Thus, luxury consumption is not merely about personal satisfaction but about creating an image of success, influence, and elevated social status.

Social Class Categories:

Social class categories are typically divided into groups based on income, education, occupation, and lifestyle, each demonstrating distinct consumer behaviours. A common classification includes the upper class, middle class, and lower class, with further subdivisions for accuracy. The upper-upper class consists of inherited wealth families, often consuming exclusive luxury goods and emphasizing heritage. The lower-upper class includes newly wealthy individuals who display status through visible consumption such as luxury cars and designer brands. The upper-middle class comprises professionals, managers, and entrepreneurs who value education, quality, and upward mobility, often purchasing premium but practical goods. The lower-middle class focuses on security and respectability, preferring branded but affordable products. The working class typically emphasizes durability, price sensitivity, and functional goods. The lower class often faces financial constraints, limiting choices to basic necessities. These categories not only represent purchasing power but also cultural values, aspirations, and lifestyles. For marketers, understanding these segments allows for targeted campaigns—luxury branding for higher classes, aspirational advertising for middle classes, and value-oriented strategies for lower classes. Social class categories thus provide a framework for predicting consumer decisions, highlighting how economic and cultural factors jointly influence patterns of consumption.

• Upper Class

The upper class consists of wealthy individuals and families with high income, inherited wealth, or ownership of major businesses and assets. They have strong purchasing power, often favor luxury brands, exclusive products, and services that symbolize status and prestige. Their consumer behavior reflects a preference for high-quality, innovative, and rare items, as well as early adoption of premium technology. They also influence fashion, lifestyle, and brand trends as opinion leaders. Marketers often target this class through exclusivity, luxury branding, and personalized experiences. Their consumption choices are guided by prestige, social recognition, and maintaining a distinct elite identity.

• Upper Middle Class

The upper middle class includes professionals, business executives, entrepreneurs, and people with high educational backgrounds. They have comfortable disposable incomes and focus on quality, brand reputation, and lifestyle enhancement in consumption. Their purchasing behavior often reflects aspirations for upward mobility and social recognition. They prefer branded clothing, luxury cars, fine dining, and advanced technology. Unlike the upper class, their spending is more rational and linked to professional success and lifestyle needs. They value products that signify achievement and sophistication. Marketers target them by highlighting quality, convenience, and prestige while appealing to their desire for both practicality and social status.

• Lower Middle Class

The lower middle class comprises office workers, teachers, small business owners, and service employees. Their income is moderate, and consumption focuses on value-for-money, durability, and affordability. They are conscious of their social image and often aspire to emulate the lifestyle of higher classes. They purchase branded goods occasionally, focusing on affordable variants or discounted offers. Their consumer behavior includes saving-oriented choices and reliance on credit for big purchases. Marketers target this group by offering budget-friendly branded products, installment purchase options, and promotions. Their buying decisions balance between practicality, affordability, and the desire to climb the social ladder.

• Working Class

The working class includes factory workers, clerks, and individuals with lower incomes and less financial security. Their consumer behavior is largely guided by necessity, price sensitivity, and basic functionality. They prioritize essential goods like food, clothing, housing, and transportation over luxury or discretionary items. However, they also spend on affordable entertainment, mass-market products, and budget services. Brand loyalty is common if the products provide consistent quality at a reasonable price. Marketers target this class with discounts, value packs, and affordable alternatives. Their consumption patterns highlight practicality, survival, and gradual aspirations for upward mobility through small lifestyle improvements.

• Lower Class

The lower class consists of individuals and families with very limited income, often living below the poverty line. Their consumer behavior is focused on fulfilling basic needs like food, shelter, clothing, and healthcare. They are highly price-conscious and rely on low-cost, subsidized, or second-hand goods. Discretionary spending is minimal, and brand preference is often non-existent unless affordability allows. Their consumption choices are constrained by financial limitations, making them dependent on government schemes, NGOs, or low-priced local markets. Marketers rarely target this group directly, but affordable product innovations, microfinance, and rural marketing strategies are tailored to address their basic consumption needs.

Innovation refers to the process of creating and implementing new ideas, products, services, or processes that add value to consumers and businesses. In the context of consumer behaviour, innovation plays a crucial role in shaping preferences, influencing purchase decisions, and driving market trends. It can be technological, such as introducing a new gadget, or conceptual, like developing a unique service model. Innovations attract consumers by offering novelty, convenience, or improved functionality, often creating a competitive advantage for companies. Consumer acceptance of innovation depends on perceived benefits, ease of use, social influence, and risk considerations. Ultimately, innovation drives change in consumer behaviour by encouraging experimentation, brand switching, and the adoption of new consumption patterns.

Diffusion of Innovation Model:

• Innovators (2.5%):

Innovators are the first group to try a new product or idea. They are adventurous, risk-takers, and willing to experiment even when the innovation is unproven. Often financially stable and highly informed, they seek novelty and enjoy being ahead of trends. Innovators play a critical role in the diffusion process by providing initial feedback and helping refine products. They are less influenced by social pressure and more by curiosity and technical interest. Their adoption encourages early adopters to follow, acting as the starting point for broader market acceptance of innovations.

• Early Adopters (13.5%):

Early adopters are opinion leaders and trendsetters who adopt innovations soon after innovators. They are socially respected, well-connected, and often serve as role models within their networks. Their adoption signals credibility, encouraging others to consider the innovation. Early adopters are more cautious than innovators but still willing to take calculated risks. They value the practical benefits and long-term advantages of innovations and often provide feedback to improve products. Marketers target this group to accelerate diffusion because their positive experiences and recommendations strongly influence the early and late majority.

• Early Majority (34%):

The early majority adopts an innovation after careful consideration, once its usefulness and reliability are proven. They are deliberate, avoid risks, and rely heavily on recommendations from innovators and early adopters. This group is socially connected but not leaders; they prefer tested solutions over novelty. Adoption by the early majority signals that the innovation has reached mainstream acceptance. Marketing strategies targeting this segment focus on demonstrating value, ease of use, and trustworthiness. Their collective adoption significantly drives market growth, bridging the gap between trendsetters and the majority of consumers, making the product widely accepted and established.

• Late Majority (34%):

The late majority is skeptical and cautious, adopting innovations only after most of society has embraced them. They tend to have limited resources, lower social influence, and are influenced by peer pressure rather than novelty. Risk aversion is high, and they often require strong assurance of value, affordability, and simplicity. Marketers often appeal to this group through social proof, discounts, and guarantees. Adoption by the late majority is essential for achieving mass-market penetration and maximizing sales. Their acceptance marks the peak of the diffusion curve, solidifying the innovation as a standard or mainstream product.

• Laggards (16%):

Laggards are the last group to adopt an innovation, often resistant to change due to tradition, skepticism, or limited resources. They prefer familiar products and are influenced minimally by social or marketing pressures. Laggards may adopt only when the innovation becomes unavoidable or when older alternatives are unavailable. Their adoption is usually slow, and they often require extensive persuasion, strong evidence of benefits, or generational influence. Although small in number, laggards complete the diffusion process, ensuring that the innovation reaches all consumer segments. Understanding their behavior helps marketers plan long-term strategies and phase out older products effectively.

Diffusion Process:

• Knowledge Stage:

In this stage, consumers become aware of a new product, idea, or innovation. They gain information through advertisements, media, word-of-mouth, or personal observation. At this point, consumers understand the innovation’s existence but lack detailed knowledge about its features or benefits. Effective communication and marketing strategies are crucial to create awareness and spark interest. Without adequate knowledge, the diffusion process cannot start, as consumers cannot adopt what they do not know exists.

• Persuasion Stage:

During the persuasion stage, consumers form attitudes toward the innovation based on perceived advantages, social influence, and personal evaluation. They seek more information, compare alternatives, and consider the benefits and risks. Positive opinions and recommendations from early adopters and opinion leaders strongly influence this stage. The goal is to convince consumers that the innovation is valuable, practical, and compatible with their needs, encouraging them to move toward adoption rather than rejecting it.

• Decision Stage:

In the decision stage, consumers make a choice to adopt or reject the innovation. This involves weighing the advantages, risks, costs, and compatibility with their lifestyle. Trial usage, demonstrations, or sampling often help reduce uncertainty. Marketing efforts focus on facilitating the purchase decision through promotions, guarantees, or easy access. The decision stage is critical because a positive choice initiates the adoption process, while rejection may require re-marketing strategies or social influence to reconsider later.

• Implementation Stage:

The implementation stage occurs when consumers start using the innovation. They integrate it into daily life, experience its functionality, and evaluate its practical benefits. This stage may involve learning how to use the product effectively, overcoming usage challenges, and adapting behavior to accommodate the innovation. Positive experiences reinforce adoption, while difficulties or dissatisfaction may lead to discontinuation. Companies provide user support, instructions, and customer service to ensure smooth implementation and enhance consumer satisfaction.

• Confirmation Stage:

In the confirmation stage, consumers seek validation for their adoption decision. They look for reinforcement from personal experience, peers, or social networks to confirm that adopting the innovation was the right choice. Positive feedback strengthens loyalty and continued usage, while negative feedback may lead to discontinuance or switching to alternatives. Marketers encourage confirmation through testimonials, follow-up services, and community engagement. This stage ensures long-term adoption, repeat usage, and advocacy, completing the diffusion process and helping the innovation achieve market stability.

Types of Innovation:

• Product Innovation:

Product innovation involves creating or improving a product to offer new features, better quality, or enhanced functionality. It can be a completely new product or an upgraded version of an existing one. This type of innovation attracts consumers by meeting unmet needs, solving problems, or providing greater convenience. Product innovation often drives brand differentiation and competitive advantage. Companies invest in research and development, design, and testing to ensure that innovations are practical, appealing, and valuable. Successful product innovations can lead to increased sales, customer loyalty, and long-term market leadership.

• Process Innovation:

Process innovation focuses on improving the methods, techniques, or systems used to produce or deliver products and services. It aims to increase efficiency, reduce costs, enhance quality, or shorten production time. Examples include automation, lean manufacturing, and digital workflows. Process innovations do not always change the product itself but improve the value chain, benefiting both companies and consumers through faster delivery, lower prices, or higher consistency. Such innovations can strengthen competitive advantage, streamline operations, and improve customer satisfaction by ensuring products and services are delivered more efficiently and reliably.

• Marketing Innovation:

Marketing innovation involves developing new strategies to promote, distribute, or sell products and services. It includes novel advertising campaigns, pricing models, branding approaches, or distribution channels. The goal is to enhance customer engagement, expand market reach, and differentiate the brand in competitive markets. Marketing innovation leverages consumer insights, technology, and creative messaging to influence purchase behavior and build loyalty. For example, digital campaigns, influencer marketing, and experiential promotions are modern forms. This type of innovation helps firms connect with target audiences more effectively, communicate product value, and stimulate demand in ways that traditional marketing may not achieve.

• Organizational Innovation:

Organizational innovation refers to changes in a company’s structure, management practices, or business models to improve efficiency, flexibility, or competitiveness. This includes new workflows, team structures, leadership approaches, or collaborative systems. It enhances decision-making, resource utilization, and employee engagement, ultimately supporting innovation in products or services. Organizational innovation is crucial for adapting to market changes, fostering creativity, and sustaining long-term growth. Companies adopting innovative organizational practices can respond faster to consumer needs, implement strategies effectively, and maintain a competitive edge. It complements other types of innovation by providing a supportive internal environment for success.

Product features that affect the adoption:

• Relative Advantage:

Relative advantage refers to the degree to which a product is perceived as better than existing alternatives. Consumers are more likely to adopt innovations that offer clear benefits, such as improved performance, convenience, cost savings, or enhanced status. The greater the perceived advantage, the faster the adoption rate. Marketers highlight unique selling points and practical benefits to emphasize relative advantage. Products that significantly improve efficiency or solve problems effectively are adopted more readily. If consumers cannot perceive a meaningful improvement, even innovative products may face resistance in the market.

• Compatibility:

Compatibility measures how well a new product aligns with existing values, experiences, and needs of consumers. Innovations that fit seamlessly into current lifestyles, habits, or social norms are adopted more easily. A product incompatible with consumer expectations or routines may face hesitation or rejection. For example, technology requiring significant behavioral changes may experience slower adoption. Marketers must understand target audiences and design products that integrate with their preferences, culture, and usage patterns. Higher compatibility reduces perceived risk, increases comfort, and encourages quicker acceptance, ensuring smoother diffusion of the innovation in the market.

• Complexity:

Complexity refers to the perceived difficulty in understanding or using a product. Products that are simple, intuitive, and easy to learn are adopted faster, while those perceived as complicated may discourage potential users. High complexity increases the learning curve, frustration, and perceived risk, slowing diffusion. Companies often provide tutorials, demonstrations, and user-friendly designs to reduce complexity. Innovations that appear accessible and convenient encourage experimentation and trial usage. Reducing complexity not only enhances adoption but also boosts customer satisfaction, loyalty, and word-of-mouth promotion, accelerating the overall diffusion process in the target market.

• Trialability:

Trialability is the extent to which consumers can experiment with a product before making a full commitment. Products that allow sampling, demonstrations, or trial periods reduce perceived risk and uncertainty, making adoption easier. Trial experiences help consumers evaluate benefits, usability, and compatibility with their needs. High trialability fosters confidence, encourages word-of-mouth promotion, and often accelerates the diffusion process. Companies frequently use free trials, pilot programs, or temporary usage options to increase trialability. When consumers can experience a product firsthand, they are more likely to adopt it permanently and recommend it to others.

• Observability:

Observability refers to how visible the results and benefits of a product are to others. Innovations whose advantages are easily seen or demonstrated encourage adoption through social influence and peer validation. Consumers are more likely to try products that others use successfully, as it reduces uncertainty and builds trust. Observability can be enhanced through testimonials, social media sharing, or public demonstrations. Products with high observability benefit from positive word-of-mouth, imitation, and faster market penetration. The more tangible and noticeable the outcomes of using an innovation, the higher the likelihood that potential adopters will follow suit.