Effect of Social Influence on Consumer Behaviour

This essay analyzes the impact of social factors like cultural background and social class on consumer behaviour, with a case study of Woolworths Group. It also discusses the marketing strategies, target market analysis, and market segmentation of the organization.

Running head: EFFECT OF SOCIAL INFLUENCE ON CONSUMER BEHAVIOUR
EFFECT OF SOCIAL INFLUENCE ON CONSUMER BEHAVIOUR
Name of the Student
Name of the University
Author Note

1EFFECT OF SOCIAL INFLUENCE ON CONSUMER BEHAVIOUR
Introduction
Consumer behaviour is related to the effort of studying and understanding the
behaviour of the consumers and their buying tendencies. This study helps the organizations in
deciding its target customers and ways by which the products will be presented in the market.
Social factors have an important role in the ways by which they influence the decisions of the
consumers of the various organizations. The human beings are considered to be social
animals and they are always influenced by the social environment and the external
environment as well. The essay will be mainly based on the analysis of two major social
influences which can influence the decision-making process of the consumers (Badgaiyan &
Verma, 2015).
Analysis of consumer behaviour based on social influences
The organization that is taken into consideration for analysis of consumer behaviour is
Woolworths Group. Woolworths Group is an organization of Australian origin which
operates in the retail sector. The organization was established in the year 1924 and it has its
operations in New Zealand and Australia. Woolworths has acquired the second biggest
organization in Australia in terms of its revenue. The organization is that has become the
biggest takeaway liquor retailer. The first store of Woolworths was opened in Stupendous
Bargain Basement in Sydney. The company had gone through many losses in the year 2016
and it had opened many innovative stores all through Australia to bring back its lost position
(Bartels & Onwezen, 2014).
The two social factors that are considered in the analysis of consumer behaviour
in Woolworths are cultural factors and the social class. The cultural factors mainly
comprise of the various set of values and the ideologies of the communities or the group of
the individuals. The cultural factors have immense effect on the buying decisions of the
individuals. The various individuals have different set of beliefs and habits which they
develop from their family, background and status. The culture of the individuals is developed
from their childhood from their families (Woolworths.com.au., 2018). The religion, gender
and status of the individuals affect their process of decision-making. The economic and social
class of the consumers also affect their buying behaviour. The decisions that are made by the
buyers are based on the ways by which the social factors are related to their buying process
(Gifford & Nilsson, 2014). The social class can be described as the divisions that are made
within the society based on values, behaviour and interest of the various groups of people.

2EFFECT OF SOCIAL INFLUENCE ON CONSUMER BEHAVIOUR
The other major factors that can be used to define social class are related to the income of the
individuals, the quality of the neighbourhood from where they belong and their profession.
These factors affect the ways by which these consumers take decisions related to the purchase
of products belonging to different categories and price levels. This depicts that the social
factors related to the various consumers affect their buying behaviour and the products that
are purchased by them (Hajli, 2015).
The marketing strategy of Woolworths has been formulated based on the analysis of
the behaviour of the different consumers of the organization. The strategy related to
marketing is formulated by the management of Woolworths with the help of a process called
the wheel consumer analysis. The wheel consumer analysis is formed based on three
strategies which are, affect and cognition, consumer behaviour and consumer environment.
The consumer behaviour analysis is given most importance by the marketing executives of
Woolworths. The consumer behaviour of the organization is based in many different factors.
The social factors related to the consumers of Woolworths influence their purchase decisions
(Pansari & Kumar, 2017).
Woolworths analyses the culture to which the consumers belong and the effect of this
culture on their buying behaviour. The culture of the country affects the culture that is
adopted by the individuals who belong to that country. Woolworths has formulated many
strategies to win the trust of the customers. The organization has always placed the customers
at the top priority and has designed their products and offerings based on their tastes and
preferences. The company always formulates strategies that can help in acquiring and
retaining the customers. The products of the organization are offered in such a manner so that
they can cater to the needs of the customers belonging to all parts of the society or from any
economic class. The pricing strategy of the organization affects the buying behaviour of the
consumers based on their economic class (Pappas, 2016). The design of the stores also
influences the buying decisions that are made by the consumers. The main reason being that
the consumers belong to different cultures and their style of shopping is different. Based on
the style of shopping some people may like the shopping experience and feel in the stores and
it may so happen that some may not like the feel as well. Thus it can be said that the social
factors of the consumers which include their social class and the cultural factors affect their
decisions related to the purchasing of products.

3EFFECT OF SOCIAL INFLUENCE ON CONSUMER BEHAVIOUR
The 4 Ps of marketing mix of Woolworths are related to the mix of products, price,
promotion and place with respect to the marketing strategy of the organization.
Product – Woolworths is an Australian retail based organization. The company
provides different types of items related to grocery which are a major part of the marketing
mix. The products of the company include, fruits, meat, vegetables and the packaged
products. Woolworths provides huge variety of products related to various brands,
international cuisine and local produce. The products are offered based on the preferences
and the behaviour of the consumers. The customers are never left dissatisfied related to their
choice of products when they visit the stores of Woolworths. This is possible due to the
analysis that is performed by the company based on the preferences of the customers related
to the social factors (Parsons, Maclaran & Chatzidakis, 2017). The diverse range of products
offered by the company has helped them in creating a different position in the market. The
needs of the various types of customers have been fulfilled with the help of the consumer
behaviour analysis.
Price – The prices of the products that are offered by Woolworths are same or little
more than the prices in the market. The prices are kept in such a manner so that they provide
competition in the market. The different segments of customers belonging to the various
social and economic classes have preferences for different products in the market.
Woolworths has fixed the prices of their products based on the various levels of customers
The customers are also provided with shopping cards that can help in tracking the purchases
in the stores automatically (Raheem, Vishnu & Ahmed, 2014).
Place – Woolworths has its operations in more than 1000 stores in Australia. Among
these 950 are supermarkets and others are the convenience stores The company also has its
operations in the online platform. Woolworths has also developed a specialised mobile app
for purchases of products. The stores are all designed and operated based on the choices and
preferences of the individuals who belong to the society where the stores operate. The stores
offer products belonging various private brands like, Woolworth Homebrand, Woolworths
Gold, Woolworths Select and Woolworths Fresh. The organization therefore aims at creating
a customer base at all the levels in the society. The distribution network of Woolworths is
strong enough to reach the various customers and fulfil their needs (Rani, 2014).
Promotion – The promotional activities of Woolworths have always been of great
importance. The company has been innovating its capabilities based on the various

4EFFECT OF SOCIAL INFLUENCE ON CONSUMER BEHAVIOUR
promotional offers and schemes that they have been able to provide to the customers. The
promotional activities of the company are also based on the tastes and the preferences of the
various types of customers who are a major part of the operations. The company provides
loyalty schemes for the customers which include a variety of facilities. The online platform is
also used by the company for the purpose if reaching the various types of customers.
Woolworths also provides gift cards and they use extensive methods of promotion based on
the media. The online shopping platform of the company also attracts a huge segment if
customers who help the company in increasing its revenues and profitability (Sasmita &
Mohd Suki, 2015).
Target market analysis is related to the study of the potential customers of an
organization. The company can identify its target market with the help of data collected with
respect to the current customer base, the competition of the company is also analysed to
decide the target market. The company needs to analyse the services and products and choose
specific demographics to select the appropriate market area for its products. The
psychographics of the target group of people are also analysed by the company for analysing
target market. The analysis of target market is important for deciding the group of consumers
who need to be directly targeted by the company with the help of their services and products.
These are the group of consumers who require the products that are being offered by the
company (Schuitema & Groot, 2015). The target market of Woolworths is analysed by the
organization with the help of the levels of income of the consumers. The group of people who
are targeted by Woolworths mainly belong to the middle to the upper income group of
people. The company has been able to place themselves as one of the top brands among this
group of people. The sales of Woolworths have grown both in the fields of clothing and
grocery divisions. The limited target market of Woolworths is related to the huge growth of
revenues in the same area (Sharma, 2014). The various strategies that are used by
Woolworths for influencing the target market are, co-branding, endorsement and multi-
branding. The strategy related to endorsement has helped Woolworths in creating sub-
categories within the various categories. In this manner the organization offers its services to
the consumers belonging to the various groups of people. The social and the cultural
background of consumers affect the ways by which the they take the decisions of buying
products from Woolworths.
Market segmentation is related to the process by which a potential group of
consumers are divided according to their likes and choices and other basic characteristics

5EFFECT OF SOCIAL INFLUENCE ON CONSUMER BEHAVIOUR
related to their preferences. The market segmentation is done based on the gender,
psychographic factors like the age, gender and the income of the specific group of people.
The place from where the consumers belong affect their likes and choices and further
influences their buying decision (Sirgy, 2015). The usage of the products and the lifestyle of
the consumers are also related to the segmentation of market. The various types of market
segmentation are demographic segmentation, geographic segmentation, behavioural
segmentation and psychographic segmentation. The consumers are divided in such a manner
so that the company can offer the specific products according to the preferences of the
various groups. Woolworths uses the process of market segmentation to decide the group of
customers to whom the products will be offered (Zeugner-Roth, Žabkar & Diamantopoulos,
2015). The cultural background and the social and economic factors affect the process of
market segmentation that is done by the company. The group of consumers of Woolworths
are divided based on the culture to which they belong and their economic conditions are also
taken into consideration. The four ways of market segmentation are used by Woolworths to
divide the consumer groups and further the offer products which are suitable for the particular
groups of people (Rettie, Burchell & Barnham, 2014).
Conclusion
The analysis in the essay shows that the buying behaviour of the consumers is
affected by the social factors like, cultural background and social and economic class. These
factors affect the ways by which decisions are made by the consumers and the products that
they intend to buy. Woolworths is a retail organization and it has its operations in many
different areas of Australia. The organization decides the market where it can offer its
products and further increase the revenues. The target group of customers and the market
segmentation process is also based on the social factors related to the consumers and the
areas to which they belong.

6EFFECT OF SOCIAL INFLUENCE ON CONSUMER BEHAVIOUR
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