Everything you need to know about the factors affecting consumer behavior. Consumer behavior or purchases made by consumers are rarely unaffected. Such behavior is largely influenced by various factors.
A marketer has to understand such factors so that he can design appropriate products and marketing strategies and ultimately be able to deliver consumer satisfaction. There are several theories explaining the factors that influence consumer behavior.
Consumer behavior refers to the behavior of a person when he is acting as a consumer-when he is buying a commodity or a service. This includes three stages-pre- purchase behavior, the actual purchase and the stage of post-purchase behavior.
Consumer behavior is the decision process and physical activity engaged in evaluating, acquiring, using and disposal of goods and services.
ADVERTISEMENTS:
It includes the understanding of consumer thoughts, feelings and actions. In a layman’s language consumer behavior deals with the buying behavior of individuals.
The factors affecting consumer behavior are:- 1. Cultural Factors 2. Social Factors 3. Personal Factors 4. Psychological Factors.
Factors Affecting Consumer Behavior: Cultural Factors, Social Factors, Personal Factors and Psychological Factors
Factors Affecting Consumer Behavior – Top 4 Factors: Cultural Factor, Social Factors, Personal Factors and Psychological Factors
The buying behaviour of consumers is affected or is influenced by a number of factors. These factors are very broad, and, in general, affect even normal behaviour.
The factors can be classified as:
ADVERTISEMENTS:
1. Cultural factor,
2. Social factor,
3. Personal factor and
Factor # 1. Cultural Factors:
ADVERTISEMENTS:
The term culture normally refers to the person’s values, preferences, wants and desires, which dictate or determine, to a great extent, the person’s behaviour. These influences emerge from the environment, education and experiences encountered by the person through childhood and adulthood.
Middle class people desire to play safe, like security, and do not like to take risks. The lower middle class does not have much of an income, and office clerks tend to be a little suspicious. Office clerks tend to be immersed in their office matters and politics.
The social class denotes different social strata or layers within a group. For example, if the person is from a family of office goers, then clerical thinking will be strong. But, if the background is small business, then risk taking will appear in his behaviour.
On the other hand, if the person is from a farming background, then some caution will appear in the behaviour. The predictable behaviour of such people – prefer household goods, buy nothing very costly, rarely go in for something new. However, a few will take more risks than others.
ADVERTISEMENTS:
But these predictions may not hold true for all. The behaviour may be different, after all. The problem is, without predicting behaviour of consumers, retailers cannot plan for selling. In other words, decisions like what goods (merchandise) to stock, how much to stock, how to promote goods, the nature of discounts to give, are difficult to make. So retailers have to predict consumer behaviour, and use it to plan retailing operations.
Factor # 2. Social Factors:
This includes Reference Groups, Family Influences, Social Roles and Status.
Reference Groups:
Groups having a direct or indirect influence on the person’s behaviour like family, close friends, co-workers. Since they interact frequently with the person and most interactions are informal; the person absorbs their likes and dislikes.
ADVERTISEMENTS:
The family constitutes the most important reference group in buying behaviour. Parents, wives, and children normally influence a person much more than others do.
a. In a casual conversation with distant members of the family, an adolescent girl, studying in college remarked, “We prefer to go for Diwali or birthday shopping with mother. My father is extremely impatient, and wants us to buy without examining any variety. The moment a blue dress is taken out of the shelf by the counter clerk, my father will say ‘buy it’. My cupboard is full of blue dresses. My mother, on the other hand, allows us to see a whole range of dresses. We have decided to avoid my father’s company while buying clothes.”
b. When a neighbour changed his old TV for a Videocon Bazooka, the two children were adamant for a similar change in our house, even though our TV was bought only six months ago.
c. We have been family friends for more than ten years now. Our families shop together, and buy similar products. We go to the same shops. Now our other neighbours have also joined the same shopping gang.
ADVERTISEMENTS:
d. A crude research study indicated that the wife makes buying decisions in upper middle class and executive families. In the lower middle class it is quite the opposite. This is a general trend in India.
e. “Many of the products sell in this community since they are ‘status symbols’. A family will go in for imported goods (even smuggled goods) if another known family of equal status has it. Kitty parties among women appear to produce such motivation,”- says a retailing manager.
In cities especially metros, children are greatly influenced by TV serials, advertisement and changes those are occurring day to day. Children in the family are becoming big buyers.
Their choices of merchandise stretches from apparel (Jeans, flashy clothes and shoes), to watches, to audiocassettes, to two wheelers. There are many stores targeting youth nowadays. This market is gradually spreading to smaller towns. Youth, in particular, wants to be ‘trendy’. They seek their guidance from TV and fashion magazines.
Factor # 3. Personal Factors:
ADVERTISEMENTS:
The stage in a life cycle of a human being or age is a determinant of buying behaviour. The marketing people have to pay attention to the customer’s stage in a life cycle. Retired people are very careful in buying and spending.
The person’s occupation also influences his buying decision. A blue collared worker will prefer simple clothes, and maybe, a lunch box. White collared workers, on the contrary, prefer simple white or even coloured clothes, and goods to signify their status.
Lifestyle refers to the pattern of life adopted by a person. Retailers, and often marketing managers, seek to correlate life styles with products. The science of measuring and categorizing life styles is called “psychographics”.
In the developed countries, is applied through the use of standardized questionnaires. In USA, eight categories are normally identified for marketing purposes. These categories are further classified into two sub-divisions.
The methodology used for psychographics is fairly sound. However, marketing managers have extended the terms and jargon used for earmarking lifestyle categories. It will not be surprising if a student of retailing finds categories like Sleepwalkers, Chameleons, Avant- Guardians appearing in marketing literature. Several new market research tools to identify customer behaviour have recently appeared in the marketing world.
Are you a mouse potato or a techno-striver?
ADVERTISEMENTS:
Traditional market research may tell you who is buying a computer for the household. It may even tell you the lifestyle he or she possesses. However it will not tell you who in the household is using the computer. Nor will it provide details of what purpose it is being used.
Marketers of technology products can come to know about the buying habits of technology buyers and users with new research tools, which seek to segment consumers based on technology types. Two prominent research tools are “Techno-graphics” and SRI Consulting iVALS. These tools help segment consumers according to motivation, desire, attitudes and preferences.
Both Techno-graphics and iVALS reinforce the idea of a dual tier society, but one based on knowledge, not income. For instance, people who are more computer-savvy are perfect targets for an electronic banking product that allows them to pay bills, switch money between accounts, and check balances on the computer.
Those who are not computer literate will still write checks by hand, send payments through ‘Snail mail’, and stand in line for a bank teller. Yet the new market research tools reveal many shades in the spectrum between ‘the knows and the know nots’. For example, an airline may want to use techno graphics to improve online ticket sales.
It may then target the time strapped, the new age executive, and overlook the technology pessimists. Traditional market research tools only give an idea of the universe or total market, which can be approached. On the other hand, the new tools provide data about who will innovate in technology and the type of preferences they would possess.
Factor # 4. Psychological Factors:
At least four psychological factors appear to influence buying behaviour and choices.
ADVERTISEMENTS:
i. Motivation:
Persons from any strata or level in society possess ‘needs’. These needs can be physiological- hunger, thirst, fear of pain, or psychogenic- like need for recognition, or need for social contact. ‘Motives’ drive the person to act, when there is a need. The act is an attempt to fulfil the need. Naturally, the stronger the need, the more the motive.
The motive to buy something also arises from needs. Many theorists have written on motivation, but their theories are not very similar. Two well-known early theories emerged from Maslow, and Herzberg.
a. Maslow’s Theory of Hierarchy of Needs:
Maslow’s thesis is that a ‘hierarchy ‘ of needs can be noticed among persons. The hierarchy is an arrangement of needs, from the most to the least pressing, at a given point in time. The arrangement will vary between persons and with time.
The needs identified by Maslow are:
ADVERTISEMENTS:
At a given moment, any one of these needs will be dominant in the mind of the person. For the deprived or poor class of people, it is obvious that the dominant need will rarely be beyond the security level. On the contrary, the well to do lot will rarely feel a need for security. Once action satisfies the need, another need will become dominant in the person.
Buying is an action for fulfilling need. It becomes a motive in certain circumstances. A hungry person, when near a wayside restaurant, will be driven to act to remove his hunger. In case he has no money to buy something to eat, he will try to suppress his hunger. If the suppression is not strong enough, and he cannot buy, he will adopt other means to obtain something to eat, like begging, or stealing.
b. Hertberg’s Two Factors Theory:
The Herzberg’s two-factor theory distinguishes between factors that cause satisfaction and dissatisfaction. The dissatisfiers include hunger, thirst, security, fear of pain and similar physical factors. Fulfilling these factors does not lead automatically to satisfaction.
Herzberg viewed the necessity for satisfiers like recognition, status and challenge in jobs. In other words, the world of work needed the presence of steps to reduce dissatisfiers and produce satisfiers.
The implications of Herzberg’s theory in marketing can be simplified as:
ADVERTISEMENTS:
(i) Avoid Dissatisfiers:
Identify major dissatisfiers in your firm. Classify them. Train yourself to avoid such dissatisfiers like a poor quality product, poor communication skills, cluttered store, poor management of services, and /or very negligent after sales service.
(ii) Breed Satisfiers:
Identify satisfiers in your firm. Project and market products, optimistic behaviour, congenial environment, customer preferences and corporate reputation that satisfy the consumers and meet needs like status, and recognition.
ii. Perception:
This word means the process by which people view and understand the world and events around them. In other words, the manner in which a person receives and processes information from around and creates a meaningful picture is known as perception.
ADVERTISEMENTS:
It occurs due to personal factors as well as from stimuli from the surroundings. The consequence is that different people can perceive the same object differently.
iii. Selective Attention:
Marketing people have to use a wide variety of strategies to get people to notice and take interest in their products. With almost every product being advertised in various forms of media, the marketers of a product have to consider new strategies to attract notice for their product. In other words, the real difficulty is to consider the precise stimuli that will attract selective attention.
Some strategies are:
(i) Customer is likely to notice stimuli that relate to a current need. For example, if the counter sales girl is able to correctly guess what a customer really is seeking in the first few minutes of his visit to the store, and direct him to the right product, there is likelihood of a sale.
(ii) Customer normally notices things, which he/she wants to see. Best strategy is to direct him/her to the right counter at the entrance itself.
(iii) Customers are likely to notice deviations much more in the products they seek. Hence, there is no point in misleading them in the products they want.
Sometimes the salesperson will deliberately twist information on a product to suit a customer’s requirement. This is known as selective distortion. In describing the features of a product, a sales person must emphasize the merits of a product. Or repeatedly talk of some special features which competing products do not have.
This helps create selective retention, or help a customer retain positive information on the product. For example, the very high discount on a product will be retained by a customer far longer than its attractive packaging.
One wonders why some products are advertised repeatedly. Is it for selective retention or for selective attention?
There was a recent advertisement on TV for a particular brand of cooking oil. It used a very popular actress right through the length of the presentation. About five uses of the cooking oil were depicted. Its poly pack was shown a number of times with price. The accompanying background song named the oil brand in every stanza. Can we relate these acts to selective attention, distortion, and retention?
In the advertisement of an automatic clothes washer on TV, the emphasis is on the lady of the house performing magic, or doing an impossible cleaning act on clothes (removing food and oil stains without difficulty). Why this emphasis on performing magic?
iv. Learning:
Most of human behaviour is learned. Learning occurs from a complex interaction between stimuli, cues, responses and reinforcement. Internal stimuli result in action. Cues inform the person when and how to respond. If the results of action or response are rewarding, then the person is reinforced, and will respond in a similar manner, given similar circumstances, since he/she has learned about how to obtain positive outcomes.
Learning enables marketers to construct demand for a product by relating it to strong drives, employing motivating cues, and providing positive reinforcement. These factors can create brand loyalty, and win customers to a specific product.
The reliable performance of a refrigerator made by a manufacturer of household appliances made my friend buy a TV made by the same firm. There after sale service was excellent. Now my friend has decided to go in for an AC made by the same firm.
v. Beliefs and Attitudes:
Beliefs, like values, are developed from childhood, and are deep-rooted. A ‘belief is a descriptive thought a person holds about something. Beliefs may be based on faith, or long-standing opinion. Manufacturers and marketers are interested in beliefs, since beliefs create strong images in the minds of people about products. Sometimes marketers launch campaigns to correct beliefs.
For a long time a friend of mine was suspicious about South Korean products. He relied more on UK and US products. Suddenly one day he found that most of the components of his computer were from South Korea. His PC was working great. His beliefs started changing then.
There are some important cues that marketing managers must keep in mind about beliefs on the global market:
(i) The country of origin of a product will have an impact. For example, customers would definitely have preferences about where an automobile was made, but will not bother much about from where the lube oil came from.
(ii) Some countries are identified with goods- Japan for automobiles and electronic goods, France for wine, Scotland for whisky, the USA for Hi-tech goods, and so on. Customers would home in for the country when they have a purchase in mind.
(iii) Customers tend to extend their views about a country from the few products they are familiar with. For example, Japan becomes innovative in their minds. India is for intellectual and cheap labour market, cotton clothes of all types.
(iv) The marketing group must display prominently the labels of the products of the countries, which are popular among their customers.
(v) Attitudes towards countries can change with time. For example, Japan has now become innovative, earlier they were viewed as ‘copy-cats’.
The Indian sari market carries with it the reputation of many states. The ‘Kancheepuram Silk sari’ is considered heavy and possessing a long life. On the other hand, Banares silk is for marriages. Bengal cotton saris are used in the North for regular, household use.
An attitude is a person’s enduring favourable or unfavourable assessment and action tendency about a product. Attitudes exist in people about everything. Attitudes put people into a frame of mind of liking and disliking an object or good. Attitudes make people behave consistently towards a store or product.
It is difficult to change attitudes. Firms would need to fit their products or merchandise to prevailing attitudes of customers. There is no point in trying to change people’s attitudes on every product. Some exceptions do exist.
Macs withdrew their mutton based products when they realized the adverse reaction to it from customers in parts of India.
Some years ago mineral water was not all that popular. In time, after a variety of promotional attempts, there are several brands of bottled water available, in various types of packs.
The Buying Decisions:
The global age has compelled the marketing manager to think more intensively and creatively about customers than ever before. With increasing competition, the retailer looks beyond the influencing factors in customer purchases. Nowadays the retailer looks deep into the ‘buying decision’ made by customers.
Purchasing or buying decisions are considered to be stereotyped. An experienced retailer easily anticipates the roles in buying decisions. For example, women rarely consult men while buying undergarments. On the contrary, some women will consult their husbands when buying children’s clothing. The man of the house will rarely take the wife’s advice when buying his razor blades, or his pen.
There are five roles easily discernable in a buying decision:
i. Initiator- A person who first suggests the idea of buying a product or service.
ii. Influencer- A person who can influence the decision by his views.
iii. Decider- A person who actually decides what, how, and when to buy.
iv. Buyer – The person making the actual purchase.
v. User – The actual consumer.
During Diwali shopping, firecrackers are bought by the father, though the children may influence and decide. But in a large-scale sale, the wife may perform all the roles.
Factors Affecting Consumer Behavior – 3 Important Factors: Personal Factors, Psychological Factors and Social Factors
1. Personal Factors:
a. Age and Life Cycle Stages:
Young:
(i) Single
(ii) Married without children
(iii) Married with children
(iv) Divorced with children
Middle Aged:
(i) Single
(ii) Married without children
(iii) Married with children
(iv) Married without dependent children
(v) Divorced without children
(vi) Divorced with children
(vii) Divorced without dependent children
Older:
(i) Older married
b. Occupation – A person’s occupation affects the goods and services bought e.g. different types of cloths are purchased by blue color and white color workers.
c. Economic Situation – A person’s economic situation will affect product choice. Marketers of income-sensitive goods watch trends in personal income, savings and interest rates. If economic indicators point to a recession, marketers can take steps to redesign, reposition and re-price their products closely.
d. Life-Style – A person’s pattern of living, as expressed in his or her activities, interests and opinions is his life style. Understanding these forces involves measuring consumer’s major Activities Interests Opinions dimensions.
(i) Activities – Work, hobbies, shopping, sports, social events.
(ii) Interest – Food, fashion, family, recreation.
(iii) Opinions – About themselves, social issues, business products etc.
e. Personality and self-Concept –
Personality – A person’s distinguishing psychological characteristics that lead to relatively consistent and lasting responses to his or her own environment.
Self-Concept – The basic self-concept premise is that people’s possessions contribute to and reflect their identities i.e. “we are what we have”.
2. Psychological Factors:
These factors are – Motivation, Perception, Learning, Attitudes, Conditioning, etc.
i. Motivation – This is an inner urge which moves a person to buy some commodity. People buy certain goods as a result of particular mental force, or emotions.
ii. Perception or Image – That is, what product/brand image consumer has about a particular product? This also shapes consumer behaviour.
iii. Learning Experience – Buying decisions are affected by the past experiences of buyers from which they learn about the products.
iv. Attitudes – This refers to a person’s feeling or ideas towards some products. People generally have certain attitude towards clothes, food, dresses. A person’s attitude settles into a consistent pattern.
v. Conditioning, that is, condition of product say, its packaging; if attractive, he may buy the product.
vi. Personality, That is, a person’s popularity, friendliness, charisma; this determines consumer’s behaviour in selecting brands and products.
vii. Repetition – Continuous association of consumer with a product, say, due to constant use or advertisement moves him to buy it again and again. Here, his knowledge about the product increases and that inspires to consume the product more and more.
viii. Group Influence – When a consumer sees that a group or sizeable number of people are using a product, they also are influenced to buy the product.
3. Social Factors:
Consumers’ behaviors are determined to a great extent by social forces and groups such as reference groups, family etc.:
(i) Reference Groups – Groups of people who interact formally or informally influencing (direct or indirect) each other’s attitudes and behaviour. Membership groups are groups of people having a direct influence on a person. There are two types of membership groups – primary and secondary.
(ii) Primary groups – interact regularly and informally, e.g., family, friends, neighbours and co-workers
(iii) Secondary groups – interacts occasionally and formally, i.e. trade unions, professional associations, members of socio-cultural societies.
People are significantly influenced by their reference groups both for product and brand choices; sometimes mainly on choice of brand in such items as furniture and clothing, choice of product in such items as beer and cigarettes, or both choices in such items as automobiles and colour televisions. Marketers also try to reach opinion leaders in these reference groups.
These opinion leaders are persons who have significant influence on large number of members of the group, such as a village sarpanch, or the head of a religious order. Professional brand/product endorsements in the media by celebrities are one way of influencing consumer buying behaviour.
(iv) Family – Consumers’ family members are the most influencing reference groups, which shapes his buying behaviour.
Now it is observed that there is a shift in the buying decision centre i.e., the family member who has major influence on the buying decision. Earlier it used to be the eldest male member of the family who decided on purchase of house/flat, car, etc., while the female members decided major household products but nowadays these types of decision patterns are changing when female members (even children) have strong influence on such purchase as real estate, car, etc., which can be attributed to the impact of education/media advertising.
(v) Roles & Status – The buying behaviour of an individual depends on the type of role an individual is expected to play while purchasing, e.g., an individual plays the role of a father while buying birthday gifts for his son or the same individual is a husband buying an anniversary gift for his wife. Each role carries a status e.g., the individual mentioned above could be the Managing Director of an MNC or a teacher in a primary school.
Factors Affecting Consumer Behavior – 3 Basic Factors: Personal Factors, Psychological Factors and Social Factors
1. Personal Factors:
The buyer’s own characteristics such as age, stages in life cycle, occupation, lifestyle and personality, etc., are again determinants of his buying behaviour.
(i) Age:
A person’s behaviour and habits change as he grows older; for example, a child’s deep interest in toys and games gets transformed into collecting material objects automobiles and houses as he grows to adulthood, and in later life may again shift away from material things due to changing priorities.
(ii) Stages in Life Cycle:
Consumption is shaped by the family lifecycle, for example a young, independent bachelor will normally exhibit a different pattern of consumption from that of a middle aged family man with dependents to look after.
Nine stages of family life cycle (mentioned by William D Wells and George Gubar) are given below:
a. Bachelor stage – Young, single, not living at home. Few financial burdens, fashion opinion leaders. Recreation oriented. Buy- basic home equipment, furniture, cars, vacations.
b. Newly married couples – Young, no children. Highest purchase rate and highest average purchase of durables – cars, appliances, furniture, vacations.
c. Full nest I – Youngest child under six. Home purchasing at peak. Liquid assets low. Interested in new usually heavily, advertised products. Buy – washers, dryers, TV, baby food, chest rubs and cough medicines, vitamins, dolls, wagons, sleds, skates.
d. Full nest II – Youngest child six or over. Financial position better. Less influenced by advertising. Buy larger size packages, multiple unit deals. Buy – many foods, cleaning materials, bicycles, music lessons, pianos.
e. Full nest III – Older married couples with dependent children. Financial position still better. Some children gets jobs. Hard to influence with advertising. High average purchase of durables – new, more tasteful furniture, auto travel, unnecessary appliances, boats, dental services, magazines.
f. Empty nest I – Older married couples, no children living with them, head of household in labour force. Home ownership at peak. Most satisfied with financial position and money saved. Interested in travel recreation, self-education. Make gifts and contributions. Not interested in new products. Buy – vacation, luxuries, home improvements.
g. Empty nest II – Older married. No children living at home, head of household retired. Drastic cut in income. Keep home. Buy – medical appliances, medical-care products.
h. Solitary survivor – In labour force. Income still good but likely to sell home.
i. Solitary survivor – Retired. Same medical and product needs as other retired group; drastic cut in income. Special need for attention, affection, and security.
(iii) Occupation:
The nature of one’s occupation can influence buying behaviour. For example, blue collared workers tend to buy work clothes, work shoes whereas white collared corporate executives prefer to buy expensive, tailor made suits.
(iv) Life Style:
The patterns in which people live, spend time and money are collectively called their lifestyles. It is the ‘whole person’ as expressed in activities, interests and opinions. The Marketers’ task is to find the relationships between their products and lifestyle groups.
The marketer can find out the psychographics (use of psychology and demographics to understand an individual) of the consumer and design a suitable brand to match the consumer psychographics. The Complete Man positioning of Raymond Suiting and Things go better with coca-cola positioning of coca-cola are examples of successful brand positioning based on consumer psychographics.
Another most popular available classification system based on psychographic measurement is SRI Consulting Business Intelligence’s (SRIC-BI) VALSTM Framework. People are classified according to their tendencies and availability of resources such as actualisers, fulfilleds, achievers, experiencers, believers, strivers, makers and strugglers.
Personality and Self Concept:
A person’s buying behaviour is influenced by his/her personality traits.
(i) Personality – A set of unique psychological traits leading to relatively consistent and enduring pattern of response.
(a) Self confidence
(b) Dominance
(c) Sociability
(d) Autonomy
(e) Defensiveness
(f) Adaptability
(ii) Assumption – Consumers are likely to choose brands whose brand personality matches with their own.
(iii) Self Concept – How a person thinks of himself/herself, that is, the perception one has towards own self. This is based on the assumption “I am what I have”. For example, a rich illiterate person may have a huge (showcased) collection of classics in literature to give an appearance of a learned person.
2. Psychological Factors:
Motivation:
The force that energizes behaviour gives direction to behaviour and underlies the tendency to persist.
Theories of Motivation:
a. Freud’s Theory
b. Maslow’s Theory
c. Herzberg’s Two Factor Theory
a. Freud’s Theory – Sigmund Freud maintained that human behaviour is shaped by the psychological forces which are rooted in the unconscious state of his/her mind.
b. Maslow’s Theory – According to Abraham Maslow, human needs are arranged in hierarchy and people will try to satisfy their most important needs first.
c. Hertzberg’s Theory – Fredrick Hertzberg developed a two factor theory that distinguishes dissatisfiers and satisfiers. The absence of dissatisfiers is not enough, satisfiers must be present to motivate a purchase.
Learning – An individual learns and gains experience over time. Learning involves changes in an individual’s behaviour arising from experience. Each success or failure reinforces a particular learning/behaviour.
3. Social Factors:
Apart from being influenced by cultural factors, a consumer’s behaviour is impacted by a variety of social factors such as reference group, family, and social roles and statuses.
i. Reference Groups:
Reference groups consist of the groups that have potential forming an individual attitude, perception or behaviour. Reference group have mostly three effects on its group members. Firstly, reference group exposes an individual to new lifestyles. Secondly reference group influences an individual the way they see themselves, and thirdly it pressurize an individual to conform to the group liking or disliking.
Reference group are of various type:
a. Primary groups – such as family, friends, neighbors, and co-workers, with whom the person interact continuously and informally.
b. Secondary groups – such religious, professional, and trade union groups, which tend to be more formal and require less continuous interaction.
c. Aspirational groups – are those groups which an individual hopes to join.
d. Dissociative groups are those groups whose values or behaviour an individual rejects.
Reference group influences caries across the products and brands, so identifying the reference group and making strategies according to the reference group are one of the challenging jobs of marketers. Reference groups appear to influence both product and brand choice strongly. For example in product what type of upgraded product one is using, and in brand choices what brand a group member is opting.
An opinion leader is a person who has potential to influence others based on their skill, knowledge, and experience. Opinion leaders give advices such as which brand is good, which product is good, information related to comparison of products based on their experience of using that product.
Opinion leaders are not selected or not of a specific age group opinion leaders are found in all class of society. A sixteen year old can be an opinion leader about mobile phones based on the experience the teenager is having.
Marketers try to reach opinion leaders by identifying demographic and psychographic characteristics associated with opinion leadership, identifying the media read by opinion leaders, and directing messages at the opinion leaders.
ii. Family:
Family constitutes the most influential primary reference group and has strong a influence in buying behaviour. There are two types of family first is family of orientation and second is family of procreation.
Family of orientation includes father, mother and siblings. Marketers have to identify the influence of each family member and in the identification process it is being found that mother has a strong say in buying pattern then the marketers will try to target women in their promotional activities.
Family of procreation includes one’s spouse and children the same process apply here of identifying the decision maker and make promotional activity according to that member. In both the types of family buying roles changes with the change in consumer lifestyles
Buying behaviour of families vary from country to country. In India still joint family tradition prevails so in many families’ family of orientation and family of procreation is same.
iii. Roles and Status:
Customers select products that communicate their roles and status in society. Role refers to responsibilities that a person is expected to perform. Status is one’s position in society. Bach individual have different roles and status in society depending upon the groups, clubs, family, organizations they belong.
Sometime the roles and status are overlapping which becomes trouble for a marketer. For example a woman who is a CEO in a multinational company is also a mother of two year old infant. Now these two roles are poles apart and so her buying behaviour will also be very different if she has to wear formal attire at office place she has to wear something very comfortable at home and two strikes a common marketing gimmick for both the role.
Factors Affecting Consumer Behavior – Factors According to Philip Kotler: Cultural Factors, Social Factors, Personal Factors and Psychological Factors
Consumer behaviour or purchases made by consumers are rarely unaffected. Such behaviour is largely influenced by various factors. A marketer has to understand such factors so that he can design appropriate products and marketing strategies and ultimately be able to deliver consumer satisfaction. There are several theories explaining the factors that influence consumer behaviour.
Philip Kotler has listed down these factors as follows:
i. Culture
ii. Sub-culture
iii. Social class
2. Social Factors:
i. Reference groups
ii. Family
iii. Role and status
3. Personal Factors:
i. Age and life cycle stage
ii. Occupation
iii. Economic situation
iv. Lifestyle
v. Personality and self-concept
i. Motivation
ii. Perception
iii. Learning
iv. Beliefs and attitudes
1. Cultural Factors:
All the aspects of a person such as his thinking, behaviour, habits, interactions, speech etc. are largely influenced by the person’s culture. The person himself might not be consciously aware of this but this is an undeniable fact. The typical cultural factors are culture, sub-culture and social class. A person’s consumer behaviour is also largely affected by his culture. Therefore a marketer has to understand his customers’ culture and the type and extent of its influence on his purchase behaviour.
Culture refers to the cumulative deposit of knowledge, experience, beliefs, values, attitudes, meanings, hierarchies, religion, notions of time, roles, spatial relations, concepts of the universe, and material objects and possessions acquired by a group of people in the course of generations through individual and group striving. Culture is cultivated behavior; that is the totality of a person’s learned, accumulated experience, or more briefly, behavior through social learning, which is socially transmitted from one generation to the next.
A culture is a way of life that people accept, generally without thinking about them. Culture is considered to be the tradition of the people. Culture is a collective programming of the mind that distinguishes the members of one group or category of people from.
People very rarely change or come out of their culture. A person’s roots in his culture are always very deep and strong. Therefore a manufacturer has to adapt himself to the customers’ culture because the customers will never change their culture.
A sub-culture is a pocket or segment of culture which reflects the dominant aspects of the main culture. A sub-culture however shows the different customs, norms, and values of the local area. The minor difference culture and sub-culture is caused by differences in geographical areas, climates, prevailing local conditions etc.
Example:
There is a common culture throughout India but based on the common culture there are sub-cultures in each state of India.
Sub-cultures also form very strong and distinct market segments. Therefore a marketer has to understand not only the culture but also the sub-culture.
A social class is a group in which individuals are classified on the basis of education, occupation, income, esteem and prestige acquired mainly through economic and career based success and also accumulation of wealth. Persons belonging to a social class share similar values, interests and behaviour.
A marketer has to consider social class also because a social class exhibits a certain pattern of purchase behaviour.
2. Social Factors:
Social factors are essentially the factors on account of a person living and conforming to the society. The typical social factors are reference groups, family, roles and status. Cultural factors exert a strong influence over the consumer behaviour. Therefore a marketer has to understand the influence of such social factors.
Groups of people which have a direct influence on the consumers are called membership groups. Some of them are primary groups in which case the relationship is regular and informal such as family, friends, neighbours, co-workers. Some of them are secondary groups in which case the relationship is less regular but formal such as religious groups, professional associates, social service organizations etc.
These groups generally have informal leaders also called opinion leaders who exert a strong influence on the group members. Therefore a marketer should identify such opinion leaders and direct the marketing efforts towards them. These opinion leaders will in turn influence the group members.
The family itself is a strong group to which a person belongs and the family is also a purchasing unit. The influence of family on the purchase behaviour of an individual is very strong especially in a country like India. A marketer should understand the composition of the family and the importance of the role played by each member in the family.
Each person plays different roles in his day to day life depending on his relationship with the others. Example – A person plays the role of the father and husband in the family, role of a junior manager in the office and the role of an ordinary member in his religious organization.
Each role gives him a different status and his purchase behaviour is largely influenced by such a role and status. A marketer has to understand and analyze such roles and design appropriate marketing strategies.
3. Personal Factors:
A person’s consumer behaviour is largely affected by his personal factors irrespective of his culture and social factors.
The typical personal factors are:
i. Age and life cycle stage,
ii. Occupation,
iii. Economic situation,
iv. Life style and
v. Personality and self-concept.
As a person ages, his thinking, priorities, tastes, habits etc. change. A person also passes through several stages such as childhood, teenage, married person, parent, elderly person etc. Every stage makes him think differently. Therefore a marketer has to understand this fact and implement appropriate marketing policies.
A person’s occupation makes him buy certain types of things. A person buys and consumes things according to his occupation. An employee on the shop floor of a factory would dress differently from the CEO of a company. Marketers have to understand the influence of occupation on the buyer behaviour and implement appropriate marketing policies.
A person’s economic situation based on his income makes him buy goods and services in a particular manner. Higher the income, higher will be the purchases and also purchases of expensive goods and vice-versa. A person’s purchases also depend on the overall economic situation prevailing in the country such as inflation, recession etc. During a recession, people’s purchases naturally shrink.
A marketer has to understand his buyers’ economic situation and also the overall economic situation prevailing in the country to frame appropriate marketing policies.
Life style refers to a person’s pattern of living. This is beyond a person’s culture, subculture, social class etc. Life style has a profound impact on a person’s buying behaviour. A marketer has to study the life style of consumers and appropriately design products and marketing strategies.
v. Personality and Self Concept:
Personality refers to a set of unique psychological characteristics. Personality is expressed in traits such as self-confidence, dominance, sociability, autonomy, adaptability and aggressiveness.
Self-concept means the self-image of a person. A person purchases goods and services to suit his personality and self-image. A marketer must understand this factor while designing products and market strategies.
4. Psychological Factors:
Psychology is the science that deals with mental processes and behavior related characteristics of a person.
The typical psychological factors are:
i. Motivation,
ii. Perception,
iii. Learning and
iv. Beliefs and attitudes.
A person at a point of time will have various needs such as biological needs, psychological needs etc. Most of these needs will not be strong enough to motivate a person to act at that time. A need becomes a motive when it is aroused to a sufficient level of intensity. A motive is a need that is sufficiently pressing to direct the person to seek satisfaction.
There are several theories of motivation and the most popular ones are the following:
a. Freud’s theory of motivation and
b. Maslow’s theory of motivation.
a. Freud’s Theory of Motivation:
Sigmund Freud, an Austrian physician and pioneer psychoanalyst, is also known as the father of psychoanalysis. He developed many theories about human behavior, and one of the most intriguing ones and least examined is his theory of motivation.
According to Freud, people are largely not conscious of the real psychological forces that shape their behaviour. People repress many urges which remain in the mind. These urges are never eliminated or are under perfect control. Psychologists try to collect information that lie in a person’s mind. These motives also reveal a person’s product choices.
Freud believed that the true causes of human behavior are mostly unconscious psychological forces and acceptance of social norms is the process of constantly suppressing their psychological impulses. However, these impulses can never be completely eliminated or completely be controlled; they will appear in dreams, in inadvertently blurted out, or expressed in nervous behavior.
According to Freud the psychological forces that help in forming a person’s behavior are unconscious. A person who looks at a particular product not only sees the brand but also registers certain features like its color, weight, material etc. To understand this, techniques that trace a person’s motivation from beginning state to the end state are used by the marketer.
Consumers choose whether or not to purchase a product due to unconscious desires and motivators, and that the qualities of the product, such as touch, taste or smell, remind them of past events. Recognizing how the elements of a product trigger an emotional response from the consumer can help a marketer or salesperson understand how to lead a consumer toward making a purchase.
b. Maslow’s Theory of Motivation:
Abraham Harold Maslow was a popular psychologist of the USA. He tried to explain a phenomenon as to why some people exert their time and money on personal safety needs and some people on self-esteem needs and so on. He contended that human needs are always in a hierarchy beginning from the most urgent and important needs to the least ones.
One of the many interesting things Maslow noticed while he worked with monkeys early in his career, was that some needs take precedence over others. For example, if one is hungry and thirsty, one will tend to try to take care of the thirst first. After all, one can do without food for weeks, but can only do without water for a couple of days! Thirst is a “stronger” need than hunger.
Likewise, if one is very thirsty, but someone has put a choke hold on him and one cannot breathe. Which is more important? The need to breathe, of course is more important.
He also classified the needs in the same order, which are called the Maslow’s hierarchy of needs.
The following are the classifications:
(a) Physiological needs
(b) Safety needs
(c) Social needs
(d) Self-esteem needs
(e) Self-actualization needs
(a) Physiological Needs:
These are the needs which arise in a person on account of his physiology. Examples- Hunger, thirst etc. These include the needs we have for oxygen, water, protein, salt, sugar, calcium, and other minerals and vitamins. They also include the need to maintain a pH balance (getting too acidic or base will kill you) and temperature (98.6 or near to it). Also, there’s the need to be active, to rest, to sleep, to get rid of wastes (CO2, sweat, urine, and feces), to avoid pain etc.
Maslow believed, and research supports him, that these are in fact individual needs. A lack of vitamin C, for example will lead to a very specific hunger for things which have in the past provided that vitamin C such as orange juice.
(b) Safety Needs:
These are the needs which arise in a person on account of his intention to safe guard himself. Examples – Protection, security.
When the physiological needs are fairly taken care of, this second layer of needs will surface. One will become increasingly interested in finding safe circumstances, stability, protection etc.
At this stage one becomes concerned, not with needs like hunger and thirst, but with fears and anxieties. These needs could take the form of an urge to have a home in a safe neighborhood, a little job security, a good retirement plan and a bit of insurance, and so on.
(c) Social Needs:
These are the needs which arise in a person on account of his desire to be accepted in the society. Examples – Sense of belonging, love etc. These are also called love and belonging needs.
When physiological needs and safety needs are fairly taken care of, this third layer of needs starts surfacing. One begins to feel the need for friends, a life partner, children, affectionate relationships in general, and even a sense of community. One becomes increasingly susceptible to loneliness and social anxieties.
In our day-to-day life, we exhibit these needs in our desires to marry, have a family, be a part of a community, a member of an association etc.
(d) Self Esteem Needs:
These are the needs which arise in a person on account of his desire to be recognized in the society. Examples – Self-esteem, recognition, status etc.
When physiological, safety and social needs are fairly taken care of, one begins to look for a little self-esteem. Maslow noted two versions of esteem needs, a lower one and a higher one. The lower one is the need for the respect of others, the need for status, fame, glory, recognition, attention, reputation, appreciation, dignity and even dominance.
The higher form of these needs involves the need for self-respect, including feelings such as confidence, competence, achievement, mastery, independence, and freedom. It must be noted that this is the higher’ form because, unlike the respect of others, once one has self-respect, it is very difficult to lose it.
Maslow felt that these were at the roots of many, if not most, of our psychological ‘ problems. In modern countries, most of us have what we need in regard to our physiological and safety needs. We, more often than not, have quite a bit of love and belonging, too. It is a little respect that often seems so very difficult to get.
Maslow considers all of the preceding four levels of needs, deficit needs, or D-needs. If we do not have enough of something, or if there is a deficit, we feel the need. If we get all that we need, we feel nothing at all. In other words, they cease to be motivating. As the old adage goes, “you don’t miss your water till your v ell runs dry!”
(e) Self-Actualization Needs:
These are the needs which arise in a person on account of his desire to realize the potential in himself or to achieve the purpose behind his being. Examples- Self-development and realization.
The last level of needs is a little different. Maslow has used a variety of terms to refer to this level- He has called it growth motivation (in contrast to deficit motivation), being needs (or B-needs, in contrast to D-needs), and self-actualization needs.
These are needs that do not involve balance. Once engaged, they continue to be felt. In fact, they are likely to become stronger as we feed them. They involve the continuous desire to fulfill potential, to ‘be all that one can be.’ They are a matter of becoming the most complete, the fullest ‘individual’-hence the term, self-actualization.
If one wants to be truly self-actualizing, one needs to have his lower needs taken care of, at least to a considerable extent. This makes sense. If one is hungry, he is scrambling to get food; if one is unsafe, he has to be continuously on guard; if one is isolated and unloved, one has to satisfy that need; if one has a low sense of self-esteem, he has to be on the defensive. When ones lower needs are unmet, one cannot fully devote himself to fulfilling his potential.
Presently an extended hierarchy of needs is being referred to in which the following are the levels of needs:
(a) Biological and Physiological needs – air, food, drink, shelter, warmth, sex, sleep, etc.
(b) Safety needs – protection from elements, security, order, law, limits, stability, etc.
(c) Belongingness and Love needs – work group, family, affection, relationships, etc.
(d) Esteem needs – self-esteem, achievement, mastery, independence, status, dominance, prestige, managerial responsibility, etc.
(e) Cognitive needs – knowledge, meaning, etc.
(f) Aesthetic needs – appreciation and search for beauty, balance, form, etc.
(g) Self-Actualization needs – realizing personal potential, self-fulfillment, seeking personal growth and peak experiences.
(h) Transcendence needs – helping others to achieve self-actualization.
Marketers must understand the stage at which the buyers are at the time of marketing. They should also identify the motivating factors of the buyers. Marketing strategy should be appropriately designed.
A perception means a view or an opinion. The way in which a person acts in a given situation is influenced by his perception of the situation. Two people with the same motivation and in the same situation may act quite differently because they perceive the situation differently.
Why do people perceive the same situation differently? It is because even though all of us learn by the flow of information through our five senses-sight, hearing, smell, touch and tastes, each of us receives, organizes and interprets the information in an individual way. Perception is the process by which people select, organize and interpret information to form a meaningful picture of the World.
People can form different perceptions of the same stimulus because of three perceptual processes:
a. Selective attention,
b. Selective distortion and
c. Selective retention.
This means when people come across large amount of information or advertisements, they pay attention only to a selected part of it. Therefore marketers should really design outstanding advertisements so that the advertisements catch the attention of the people.
This means that people tend to interpret the information in such a way that will suit their own attitudes and beliefs. Therefore marketer should design advertisement messages with a high degree of clarity so that they cannot be interpreted otherwise.
This means even though people receive large amount of information, they will retain only that information which supports their attitudes and beliefs. Therefore marketer should design advertisements which have strong messages and which will be retained by the consumers.
When people act, they learn. Learning describes changes in an individual’s behaviour arising from experience. According to experts in the field of learning, most human behaviour is learned. Learning occurs through the interplay of drives, stimuli, cues, responses and reinforcements.
Marketers can build up demand for a product by associating it with strong drives using motivation cues and providing positive reinforcements.
People acquire beliefs and attitudes through doing and learning. These in turn influence their buying behaviour. A belief is a descriptive thought that a person has about something. These beliefs may be based on real knowledge, opinion or faith and may or may not carry an emotional charge.
Marketers are interested in the beliefs of people about products and services because these beliefs make up product and brand images which affect buying behaviour. If some beliefs are negative and prevent purchases, the marketer will have to launch a campaign to correct them.
An attitude describes a person’s consistent evaluations, feelings and tendencies towards an object or idea. Attitudes put people in a frame of mind of liking or disliking things, of moving towards or away from them.
Attitudes are difficult to change. A person’s attitudes fit into a certain pattern because of which it is very difficult to change them. Therefore a marketer should try to fit its products into the existing attitudes rather than to change attitudes.
Factors Affecting Consumer Behavior – 4 Main Factors: Cultural Factors, Social Factors, Psychological Factors and Personal Factors
Various factors affecting consumer behavior are as under:
Factor # 1. Cultural Factors:
(i) Culture – culture is the fundamental determinant of a person’s want and behavior, perception, values, preference etc., cultural factor is one of the major factors influencing the consumer’s buying behavior.
(ii) Subculture – subculture provides more specific identification and socialization of its members on the basis of factors such as- religion, caste, geographic location, nationality etc.
(iii) Social Class – Marketers choose their target market on the basis of the social class to which a customer belongs to as it affects the customer’s buying behavior and buying process.
Factor # 2. Social Factors:
It influences person’s attitude, interest and opinion about the product and the firm as well.
It includes following elements:
Reference Groups:
A reference group is a group to which an individual and another group is compared in terms of their characteristics and other social attributes.
The reference groups can be of following types:
(a) Membership/Primary Groups – It includes (family, friends, peer and coworkers) people who can influence a person directly.
(b) Secondary Group – It includes pressure groups, religious groups, trade unions, etc., influencing the person indirectly or directly.
(c) Aspirational Groups – It refers to the groups that a person wants to or interested to join.
(d) Dissociative Group – It refers to the groups a person rejects to be associated with.
Factor # 3. Personal Factors:
It includes all the primary factors related to a customer directly such as:
(i) Age – it is one of the most important factor influences the type, quality and quantity of the product to be purchased.
(ii) Stages in life cycle – The stage in the life cycle such as – child stage, adult, youth, old age, etc., affects the buyer behavior process.
(iii) Occupation – The industry and type of work a person is involved in, affects the buyer behavior process.
(iv) Economic Status – The economic status influences the buying capacity and thus the buyer behavior process as well.
(v) Self-concept – one’s self-concept (also called self-construction, self-identity, or self- perspective) one’s perception and opinion about the self.
(vi) Personality – The term personality can be defined as personal characteristics of one self which can be identified by observing the pattern of behavior in various situations. An individual’s personality plays a major role in his/her buying decision.
(vii) Lifestyle – Lifestyle is the typical way of life of an individual, group, or culture influences the decisions related to the buying process.
Factor # 4. Psychological Factors:
Psychological factors refer to thoughts, feelings and other cognitive characteristics that affect the attitude, interest and opinion about anything. Psychological factors play an important role in their buying decisions such as what, when and why to buy a particular product.
It includes factors such as:
(i) Motivation – Motivation is defined as the process that initiates, guides, and maintains goal- oriented behaviors which leads to action thus affects the decisions related to the buying process.
(ii) Perception – It refers to the way one selects, organize and interpret the information thus affects the buying decision. Perception can be of various types such as –
(a) Selective attention
(b) Selective distortion
(c) Selective retention
(iii) Belief – It can be defined as the descriptive thoughts which act as a base for the creation of one’s attitude, opinion and perception as well.
(iv) Attitude – It can be defined as a way in which one reacts to a certain situation. It also influences one’s decisions related to the buying process.
The study of consumer behavior helps the marketer to understand the demand pattern which helps them to influence the level, timing and the composition of the demand.