Everything you need to know about the factors influencing consumer behaviour. Learn about:
A. Factors Influencing Consumer Behaviour 1. Cultural Factors 2. Social Factors 3. Personal Factors 4. Psychological Factors
B. Factors Influencing Consumer Buying Behaviour 1. External Influences on Consumer Behaviour 2. Internal Influences on Consumer Behaviour.
Consumer behaviour is a study of how people buy, what they buy, when they buy and why they buy. Of course, it is not easy to find out answers to ‘whys’ of behaviour.
One needs to look into the characteristics of individual consumers—the demographic, psychological and behaviour side of the coin Consumers might expend their time, money and effort in a casual manner. No rigid rule would compel them to look into the pros and cons of every buying decision in a rational way.
In fact, most buying decisions might just happen on the spot. It is therefore of vital importance to figure out what factors influence consumer behaviour.
This article will also help you to get the answers of:
- Cultural Factors Affecting Consumer Behaviour
- Demographic Factors Affecting Consumer Behaviour
- Influence of Culture on Consumer Behaviour
Factors Influencing Consumer Behaviour: Cultural, Demographic, Social, Personal and Psychological Factors
Factors Influencing Consumer Behaviour: Cultural Factors Affecting Consumer Behaviour
Consumer behaviour is a study of how people buy, what they buy, when they buy and why they buy. Of course, it is not easy to find out answers to ‘whys’ of behaviour. One needs to look into the characteristics of individual consumers—the demographic, psychological and behaviour side of the coin Consumers might expend their time, money and effort in a casual manner. No rigid rule would compel them to look into the pros and cons of every buying decision in a rational way. In fact, most buying decisions might just happen on the spot.
At other times, consumers might decide to buy after a careful evaluation of various available alternatives. Sometimes, they might take decisions independently. At other times, they might get influenced by friends, family, relations, neighbours etc. The mind of a consumer, in real terms, is like a black box.
To complicate matters further, consumers are notoriously fickle-minded. No one is able to predict as to how consumers would react to a particular offer or situation. Factors such as the competitive environment, the choices that greet consumers, the information overload created by competing brands—have complicated matters further.
Important factors influencing consumer behaviour may be presented thus:
1. Cultural Factors:
Culture is a set of values, traditions or beliefs which guide the individual’s behaviour. Growing up in a society, every individual learns these from family, friends, neighbours, and the society at large. Culture impacts the way we dress, eat, live and work. It manifests through various symbols, rituals which are unique to a society.
For example beef is not accepted in Hindu society and likewise pork in Muslim society. Failure to adjust to these differences can result in ineffective marketing or embarrassing mistakes. For example, business representatives of a U.S. community trying to market itself in Taiwan found this out the hard way. Seeking more foreign trade, they arrived in Taiwan bearing gifts of green baseball caps. It turned out that the trip was scheduled a month before Taiwan elections, and that green was the colour of the political opposition party.
Worse yet, the visitors learned after the fact that according to Taiwan culture, a man wears green to signify that his wife has been unfaithful. The head of the community delegation later noted, “I don’t know whatever happened to those green hats, but the trip gave us an understanding of the extreme differences in our cultures.” International marketers must understand the culture in each international market and adapt their marketing strategies accordingly.
2. Social Factors:
Man is a social animal. His behaviour is greatly influenced by peers, relatives, neighbours, and friends. Often a product fails or succeeds in the market place due to the influence exercised by these members. These groups exercise a strong influence on the lifestyles, and buying patterns of its members.
The importance of group influence varies across products and brands. It tends to be strongest when the product is visible to others whom the buyer respects. Manufacturers of products and brands subjected to strong group influence must figure out how to reach opinion leaders—people within a reference group who, because of special skills, knowledge, personality, or other characteristics, exert influence on others.
Many marketers try to identify opinion leaders for their products and direct marketing efforts toward them. In other cases, advertisements can simulate opinion leadership, thereby reducing the need for consumers to seek advice from others. The importance of group influence varies across products and brands.
It tends to be strongest when the product is visible to others whom the buyer respects. Purchases of products that are bought and used privately are not much affected by group influences because neither the product nor the brand will be noticed by others. Family members can strongly influence buyer behaviour.
The family is found to be the most important consumer buying organization in society, and it has been researched extensively. Marketers are interested in the roles and influence of the husband, wife, and children on the purchase of different products and services. Husband- wife involvement varies widely by product category.
Of course, Buying roles change with evolving consumer lifestyles. Children may also have a strong influence on family buying decisions such as buying a car. In the case of expensive products and services, husbands and wives often make joint decisions—such as buying a home.
3. Personal Factors:
The behaviour of consumers is also influenced by personal characteristics such as the buyer’s age, occupation, economic situation, lifestyle, personality and self-concept.
They are explained as under:
People change the goods and services that they buy over their life time. Tastes in food, clothes, furniture, and recreation are often age related. Young people generally go after trendy motor cycles, expensive watches, branded shirts, designer sun glasses, sports shoes etc.
A person’s occupation affects the goods and services bought. Blue-collar workers tend to buy more rugged work clothes, whereas white-collar workers buy more business suits. Marketers try to identify the occupational groups that have an above-average interest in their products and services. A company can even specialize in making products needed by a given occupational group. Thus, computer software companies will design different products for brand managers, accountants, engineers, lawyers, and doctors.
iii. Economic Situation:
A person’s economic situation will affect product choice. The availability of easy credit, for example, has prompted many to buy homes, expensive cars, white goods etc. Marketers of income-sensitive goods generally pay close attention to 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—in sync with market signals.
Life style is the pattern of living as expressed in a person’s activities, interests and opinions. A company may choose to target a particular lifestyle grouped—such as college students- -with a particular product offering—such as blue jeans—and use advertising which is in sync with the values and beliefs of this group. For example, Air Tel using the tag line Har Friend Jaroori Hai Yaar trying to woo the young generation.
Each person’s distinct personality influences his or her buying behaviour. Personality refers to the unique psychological characteristics that lead to relatively consistent and lasting responses to one’s own environment. Personality is usually described in terms of traits such as self-confidence, sociability, defensiveness, adaptability etc. Personality can be useful in analyzing consumer behaviour for certain product or brand choices.
For example, coffee marketers have discovered that heavy coffee drinkers tend to be high on sociability. Thus, to attract customers, Starbucks and other coffeehouses create environments in which people can relax and socialize over a cup of steaming coffee.
We generally buy goods and services that best reflect our self-image. Marketers of passenger cars, motor cycles, branded clothing, leather products, jewellery etc. use the self-concept to good advantage.
4. Psychological Factors:
A person’s buying choices are further influenced by four major psychological factors: motivation, perception, learning, and beliefs and attitudes.
They are explained as under:
A person has many needs at a given point of time. Some are biological needs—which compel a person to buy water, bread, biscuits etc. to reduce discomfort arising out of hunger. Others are psychological needs—arising out of a need for recognition, respect from others, belongingness etc. Psychologists have proposed a number of theories outlining human behaviour conditioned by powerful needs that compel a person to take appropriate actions almost immediately. A person has many needs at any given time.
According to Abraham Maslow, a person’s needs may be arranged according to a hierarchy—physiological, social, love, esteem and self-actualization needs—from the most pressing to the least pressing. A person tries to satisfy the most important need first. When that need is satisfied, it will stop being a motivator and the person will then try to satisfy the next most important need.
For example, starving people (physiological need) will not take an interest in the latest happenings in the art world (self-actualization needs), nor in how they are seen or esteemed by others (social or esteem needs), nor even in whether they are breathing clean air (safety needs). But as each important need is satisfied, the next most important need will come into play.
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: selective attention, selective distortion, and selective retention. People are exposed to a great amount of stimuli every day.
For example, the average person may be exposed to more than 1,500 ads in a single day. It is impossible for a person to pay attention to all these stimuli. Selective attention—the tendency for people to screen out most of the information to which they are exposed—means that marketers have to work especially hard to attract the consumer’s attention.
When people act, they learn. Learning describes changes in an individual’s behaviour arising from experience. Learning theorists say that most human behaviour is learned. An individual learns from past experience with an unbranded items do not last longer and decide to go after only branded goods. He may, therefore, decide to buy a Parker pen instead of a pen manufactured by local producers.
iv. Beliefs and Attitudes:
Through doing and learning, people acquire beliefs and attitudes. These, in turn, influence their buying behaviour. A belief is a descriptive thought that a person has about something. Buying behaviour differs greatly for a tube of toothpaste, a tennis racket, an expensive camera, and a new car. Marketers have to take care of the beliefs and attitudes of customers toward products and put everything in place while trying to deliver value/satisfaction to customers.
Factors Influencing Consumer Buying Behaviour: External and Internal Influences
The elements that have an influence on customer’s buying decisions can either be internal or external.
External Influences on Consumer Behaviour:
Practically all buyer behaviour is influenced by other people. The individual is influenced by members of his family, friends and members of the community. They provide information and standard of behaviour against which alternative buying behaviours are measured.
The impact of family is particularly seen on the formulation of values, attitudes, and purchasing patterns. The family defines purchase needs. It puts financial strains within which the buying is to be done.
Different members of the family play different roles, viz., initiator (who senses the need for purchase), influencer (who provides inputs into the purchase decision), decider (who finally decides what to purchase), and the user (who directly uses the product or service).
Therefore, marketers must know and study the influence of who makes the decision in the family? Whether the head of the family, or husband and wife or both, or children. The influence of wife predominates on food items and household furnishings, kitchenware, toiletries, etc.
Husbands’ influence predominates on purchase of durables, car, and life insurance. They may take joint decision in the case of enjoying vacations, selection of schools for children, entertainments, housing, living room furniture, etc.
Culture is the social heritage of the society. It encompasses the social values, attitudes towards work, social intercourse, language, belief, art, morals, law, customs, traditions and any other capabilities and habits acquired by man as a member of the society. Its influences are so pervasive that they are hard to identify and analyse.
These can provide an important basis for market segmentation, product development, advertising, etc. Personalisation of lifestyles has led to an increased refinement of market segments in the luxury and leisure markets.
Branding and packaging have come to reflect the attitudes of consumers and their desire for excitement by making use of bold colours and unusual designs. Most products connote values that relate to work, play, the family, morality, etc. These values should be not contradicted by any aspect of the product, its promotion and distribution.
4. Social class:
The population is generally divided into upper class, middle class and lower class on the basis of income category. These classes have different lifestyles and therefore, they can be reached through different advertising media, which may range from radio and newspaper to television for the urban population and outdoor media like banners, posters and wall paintings for the rural areas.
5. Reference groups:
These are collections of individuals providing the individual a sense of identity, accomplishment, and stability like colleagues, classmates, friends, etc. As these groups influence the individuals’ opinions, beliefs, and aspirations, they play key roles in marketing. If they try or use a product their followers are prone to do the same.
Therefore, marketers, often target their promotional efforts to reach reference groups and through them reach their followers by words of mouth or other subtle influences extended by the group.
6. Status Symbols:
People express their personalities not so much in words as in symbols, e.g. mannerisms, dress, ornaments, possessions, etc. Most people are increasingly concerned about their social status. Different products vary in their status symbol value. Status symbol for some may be a big car while for others it might a beautiful well-furnished modern bungalow.
The marketer should understand not only how the product satisfies certain needs but also how it fits into culture, because social classes exhibit differences in lifestyle. Hence, in designing marketing strategy, the marketer must carefully consider the nature and extent of social and cultural influences on the potential customers.
Internal Influences on Consumer Behaviour:
Internal or intra-personal influences are reflected in motivation, perception, learning, attitudes and personality of buyers. These are also known as the psychological determinants of consumer behaviour.
Motivation is the driving force which urges people to do things. It is a complex network of psychological and physiological mechanisms. Motives can be instinctive or learned; product or patronage, primary or selective; conscious or unconscious, rational or irrational. They range from biogenic needs, such as hunger, sex, food or drink and bodily comforts to the most advanced psychogenic needs like need for self-actualisation.
Perception is the sensing of stimuli external to the individual organization. It is the act or process of comprehending the world in which the individual exists. It is a complex process by which men select, organize and interpret sensory stimulation into a meaningful and coherent picture of the world.
It determines what is seen, felt, heard, smelt or tasted by the consumers when numerous stimuli are directed to them. Perception leads to thought and thought leads to action, marketing is concerned with understanding the process of perception. The individual perceives things according to many personal factors such as needs, moods, memories, values, etc. Therefore, the marketers must make sure that a given message is correctly perceived by the consumers.
It is the process of acquiring knowledge. The basic factors influencing it are: repetition, motivation, conditioning, and relationship and organization. Repetition is necessary for the progressive modification of psychological functions. To be effective it must be accompanied by attention, interest and goals. Motivation is an important factor in initiating and governing one’s activities, which may bring satisfaction.
Conditioning is a way of learning in which a new response to a particular stimulus is developed which does influence behaviour pattern. Relationship and organization also facilitate learning. If a past experience with a product is satisfying for a customer, his response towards it in the future will be favourable and vice versa.
Attitude is a way of thinking, feelings, beliefs and mindsets. It develops gradually due to experience and interactions with family, friends and reference groups.
There are three main components of attitude:
(i) The cognitive component- It is that which individual believes about the object—whether it is good or bad, necessary or unnecessary, useful or useless. It is the mental process which is concerned with gathering information and interpreting it logically.
(ii) The affective component- It is what the individual feels about the object—whether pleasant or unpleasant, tasty or tasteless. It is concerned with the individual’s emotions.
(iii) The conative component- It is concerned with how the individual responds to the object.
It reflects individual differences in behaviour. An individual responds with a certain amount of consistency to similar stimuli. Personality traits such as degrees of dominance, adventurousness, sociability, responsibility, etc. influence behaviour. However, generalisations about the effects of personality on consumer behaviour may prove oversimplifications.
Factors Influencing Consumer Behaviour: Influence of Culture on Consumer Behaviour
The stimulus-response model depicted the marketer as developer of marketing mix. This mix is exposed to consumers with an anticipation of eliciting a desired or positive response. Marketing stimuli refers to ingredients (i.e., product, price, place, and promotion) that marketers blend so that consumers behave in a manner that helps realize their organizational goals.
In marketing, success depends on how consumers behave towards a company or brand. The failure to extract a correct or positive response leads to failure.
In our model, consumer is placed in between stimuli and response. The cognitive perspective of consumer suggests that a consumer is not an inert system; rather he is an active processor of information. Consumer characteristics mediate marketing stimuli and influence their processing.
It is because of this phenomena that consumers differ in their response to a given stimuli. For instance, a price reduction may cause some consumers to buy more while others may stop buying the product. Similarly, use of a celebrity to promote a brand like Tag Heuer may be seen by some people as good while for others it may mean brand devaluation.
It is therefore of vital importance to figure out what factors influence consumer behaviour. Consumer behaviour is influenced by four factors, namely cultural, social, personal, and psychological.
The influence of culture, let us take the example of McDonald’s, a hugely successful fast food chain widely known for its hamburgers. However, in the Indian market, McDonald’s does not sell burgers that consist of beef patty. Instead, it markets burgers that contain potato patty.
One of its very successful offerings in India is the McAloo Tikki burger. If McDonald’s had adopted a standardized approach to market burgers made of beef or ham in India, it would have invited a strong backlash. Culture refers to learned beliefs, values, and customs that prevail in society.
It exerts influence on behaviour as some ways of doing things are taken for granted and accepted as the right way of doing things. Values are central to cultural phenomena. They are widely held beliefs about what is considered desirable.
For instance, spiritualism is fundamental to Indian values while materialism defines Western culture. Spiritually-oriented people are less likely to be attracted to goods and indulgence. Blatant consumerism in the West owes its origin to materialistic values. The following are some of the pertinent values in the context of marketing.
i. Masculine versus Feminine:
Gender authority in a society is related to prestige, power, and roles. Indian culture is patriarchal as men unfairly enjoy prestige and power over women. Husband dominance in family decision-making is exploited to target men in marketing of cars, homes, and appliances.
ii. Individual versus Collective:
Does culture value individual or collective effort? Culture emphasizes and rewards cooperation and conformity. India has a collectivist culture as conformity to group norms based on village, caste, and religion affiliation is valued. People who conform are praised whereas deviants are scorned at.
However, this seems to be changing and young India is moving towards individualistic culture. Bacardi promotes its white rum using the theme ‘be what you want to be’.
iii. Material versus Non-Material:
How is accumulation of wealth perceived? Does it dictate status and prestige? India has been a land of spirituality and materialism has been abhorred. Acquisition of wealth for its own sake was scoffed at. However, a shift towards materialistic culture is inevitable. Consequently, marketers will exploit this acquisitive culture to promote luxuries and comfort goods.
iv. Performance versus Status:
This aspect of culture is about whether prestige and status in society is determined by class, family, possessions, or performance. Indian culture was feudalistic and power inequality was accepted. Brands in old times were endorsed by people connected with royalty like Nawab Pataudi endorsed Gwalior Suiting’s.
However, this is changing and Indian culture is moving towards performance orientation. The achievement on one’s own merit is valued more. Brands nowadays use achievers like Shah Rukh Khan to connect with this emerging culture.
It is very rare to find homogenous culture in a country. Every culture is likely to contain many subcultures. Subculture refers to a small segment of culture that has different values and behaviours. India does enjoy a common culture on a higher level of abstracted values and beliefs called ‘Indianness’.
India is a diverse amalgamation of subcultures. These are based on factors such as race, religion, geographic location, gender, social class, and caste. A subcultural group is a part of a bigger cultural group yet people in the subcategory differ in terms of their values and behaviours.
These differences assume importance in marketing of products and services. This calls for adaptation of a marketing mix in accordance with the cultural moorings of each group. India is home to diverse religious groups such as Hindus, Muslims, Sikhs, Christians, Jains, Buddhists, Parsis, and Jews. People belonging to these subgroups differ from one another in terms of values, beliefs, and customs.
Therefore, products must differ in terms of their cultural relevance. A marketer first needs to assess the cultural sensitivity of his product or service and then develop a culturally consistent strategy. For instance, a detergent powder is less sensitive to cultural difference as compared to food.
The diversity of subcultures in India is not only confined to religions rather they can be observed across different geographies. For instance, differences could be observed among people belonging to different states such as Punjab, Gujarat, and West Bengal. New cultural formations are also emerging in India, which include working women, computer professionals, business class, and teenagers.
The term social class signifies divisions in society or how society is divided into different classes. A classless society would mean that people are not divided into different groups in term of their status. The concept of social class is based on hierarchical ordering of people in terms of considerations such as status, wealth, or prestige.
One of the most commonly used terminologies involves use of descriptors such as upper, middle, and lower class. Different parameters could be used to divide people into different groups such as income, occupation, and education. Social class is often used synonymously for socioeconomic groups.
This involves arriving at some meaningful socio-economic groupings. Socio-economic classification is often based on household income, education, and occupation. Social class analysis assumes significance in marketing because it allows making predictions about the behaviour of people in a class.
Socio-economic classification of Indian consumers was initially done on the basis of two parameters, namely education and occupation. For this purpose, the chief wage earner or head of the household was targeted. However, the new system targets both urban and rural consumers and uses two parameters, namely educational qualification of the chief wage earner in the household and number of assets owned out of a pre-specified list of 11 assets.
Based on these parameters each household is categorized into any one of the 12 socio-economic groups. This new system was devised partly because it was found that occupation and education are not the best indicators of income.
Consumers do not live in isolation and they are usually a part of society. Social factors such as family and groups influence consumer behaviour.
Consumption decisions are directly or indirectly influenced by other people. People belong to groups and even aspire to belong to some groups.
The following different types of groups can be distinguished:
i. Primary versus Secondary Group:
Primary group consists of people who come in contact frequently such as people in office or class. Secondary group on the other hand is characterized by limited interpersonal contact.
ii. Membership versus Aspirational Group:
Membership groups are the ones that have a condition of becoming a member such as a social club or literature group. Aspirational group is a non-member group that holds an attraction to a person. People seek symbolic membership by buying and consuming products associated with that group.
iii. Positive versus Negative or Dissociative:
Positive group is liked and people imitate or like to belong to a positive group, whereas dissociative group is disliked and therefore avoided. People, for instance, would like to associate with successful people and avoid failures in life.
Groups interest marketers because they exert influence on consumer buying. Group in the context of consumer behaviour does not mean a group of people; even a person can be influential. Groups exert influence by becoming a point of reference or comparison. For instance, if Kareena Kapoor has size zero figure and follows a particular type of yoga, it may influence many young girls to become size zero by practicing her style of yoga.
James Bond in his movies is seen wearing Omega wristwatch. This may inspire many people to buy Omega. Marketers can benefit from discovering the basis of group influence and its effectiveness.
Three types of influences can be distinguished, namely:
b. Aspirational, and
a. Normative Influence (Reward and Punishment):
It is also called utilitarian influence. People are motivated to conform to group norms in order to win approval and avoid disapproval or sanction. For instance, people in the young achiever category would like to buy BMW brand.
b. Aspirational Influence (Identification and Value Expression):
This influence occurs when a person develops a strong identification with a group. This feeling of oneness and admiration may cause a consumer to behave in a manner that is consistent with the group. Consumers buy brands that appear to be consumed or endorsed by admired people. The desire to be like the group is crucial for this influence to work.
c. Informational Influence (Expertise):
Consumers seek information and advice for making better decisions. Some groups or people are perceived to hold expertise in an area related to the consumer’s problem. For instance, people who have sensitive teeth would like to value advice from a dentist. Sensodyne’s communication is based on leveraging this influence.
Another group-related phenomenon that has a bearing on consumer behaviour is opinion leadership. Opinion leaders are those members of a group who can influence the behaviour of others by the process of information, advice, and opinion sharing. They are an active voice related to a particular product category.
They speak out and get consulted for advice and information. Information is a crucial requirement for effective decision-making and opinion leaders are people who are perceived to be credible and objective provider of information. Their opinions are valued because consumers find it an easy way to reduce their information search efforts and reduce risk by doing what is suggested by an expert.
Opinion leaders gain their status as result of their knowledge and experience, which is obtained through enduring involvement with the product category. For instance, some people tend to be fiercely involved with products such as cars or mobile phones that they get every piece of information about developments in the car or mobile phone industry.
It is this compulsiveness that makes them more informed and educated such that they can influence how consumers behave. Opinion leaders assume importance because they engage in two-step flow of communication. First, they are ongoing acquirers of information from mass media and second, they pass on this information to others.
Opinion leadership assumes importance in marketing for the value it can add in driving marketing goals. By identifying opinion leaders, they can be used to spread good word-of-mouth communication. Brands in the modern Internet era identify opinion leaders who write blogs, tweet, and participate in forums.
Family is one of the most important parts of social organization. Family is defined as a group consisting of two or more people who are related to each other by way of blood, marriage, or adoption. People who are part of a family reside together. The relationship and proximity between family members gives rise to interpersonal influence on each other’s behaviour including buying behaviour.
Often family and household are used to imply the same thing, but it is not true. Household may not consist of people who are related to each other by blood, marriage, or adoption. Therefore, all families are households but not vice versa. A household may also include roommates, unmarried couples, and paying guests.
Family assumes marketing significance because of family roles, decision dynamics, and family life cycle. All these areas are important for they hold key marketing implications. First, members in a family may assume different consumption roles, namely influencer (provides information about a product or service), gate keeper (controls flow of information), decider (enjoys power to take decision), buyer (makes actual purchase), preparer (transforms product to suitable form for use), user (consumers), maintainer (responsible for service and repair), and disposer (discarder of the product).
The second important parameter of family pertains to the decisions that are made in the family. Three types of decisions can be distinguished, namely husband-dominated, wife-dominated, and joint and autonomic. Understanding what type of decision a product or service involves in a family setup is important for product development, message, and media strategy.
For instance, typically a car buying decision is joint in nature in which the engineering and performance aspects concern men but interior and aesthetics fall in women’s domain. Accordingly, the performance aspects of car should be developed taking into consideration the preferences of man and the exteriors such as colours and upholstery must be designed to satisfy women.
Personal factors exert influence on consumer behaviour. What is bought and how it is bought is affected by consumer’s occupation, age, personality, and lifestyle.
Consumer behaviour is visibly influenced by age. Consider how needs and wants evolve with age. Consumer can be segmented into different groups based on age and some predictions can be made about values, activities, consumption habits, and brand preferences.
Children, teenagers, adults, and senior citizens demonstrate dissimilar buying behaviours. For instance, sweetened drinks such as Coke and Pepsi are targeted at teenagers and young consumers, whereas alcoholic drinks are generally aimed at mature adults.
Beer in this context is an exception, which is generally targeted at relatively younger age groups. Brands such as Kingfisher and Foster’s appeal to young consumers. Consider brands of healthy cooking oils like Saffola that appeal to young adult segment. Kids constitute a dominant market for confectionary and food items. Brands such as Maggi, Coffee Toffee, Big Babol, Gems, and Rasna appeal to the kids segment of the market.
ii. Financial Situation:
A direct relationship can be established between consumer purchase behaviour and financial situation. The purchasing power of a person has a direct bearing on what he consumes and what brands make up his consumption basket. One of the generalizations about consumer behaviour based on financial situation is that people at the subsistence level are primarily consumers of necessities and are attracted to basic value for money brands.
Brands such as Nirma washing powder, Babool toothpaste, Priyagold biscuits, and Godrej No. 1 toilet soap target this economy segment of the market. A parallel consumer group in India is the new affluence class which enjoys high incomes and is able to afford luxuries.
Some of the top luxury brands that target this segment include Mercedes-Benz, Jaguar, Tod’s, Burberry, and D&G. Affordability drives consumer buying in favour of aesthetics. Let us consider a product category like bath fittings that has attracted a host of high-end brands such as Kohler and American Concepts primarily due rise of a new consumer group who do not mind splurging money. As a result, bathrooms are no longer functional spaces and they have emerged as places of indulgence and experience.
Lifestyle or style of life refers to the pattern of living of an individual and includes activities, interests, preferences, attitudes, and consumption. For example, what kind of a lifestyle a person has could be inferred from what he does (e.g., how he exists, plays computer games, and watches television), his values (e.g., believes in jogging, takes stairs, plays squash, indulges in outdoor activity, and always on the go), what he prefers (e.g., biking, gardening, trekking, and shopping), and his attitude (e.g., does not like sedentary life). Lifestyle is influenced by personal, psychological, and social factors. All these factors combine to make a person, hence, they contribute to his or her way of life.
Lifestyle is of interest to a marketer because it impacts buying and consuming behaviour. How purchases are made; when, where, with whom, and what is bought; who all accompany at the time of consumption; in what way the product is consumed; at what time; and what all is consumed are all influenced by lifestyle.
Lifestyle measurement is a common phenomenon in marketing and its measurement methodologies are called psychographics. The term psychographics is made of ‘psycho’ that refers to psychological variables and ‘graphics’ that means measurement.
Psychographics search is about measurement of consumer in terms of psychological aspects, whereas demographic analysis is about measurement of aspects such as age, gender, income, and occupation. Psychographic studies are done by using questionnaires that capture information on consumer activities, interests, and opinions.
These are also called AIO inventories where in ‘A’ means how a person spends time, ‘I’ refers to preferences, and ‘O’ captures opinions on a wide range of issues.
One of the earliest studies on lifestyle measurement was done by SRI International of American population in 1978 and was further revised in 1989. These studies produced values and lifestyle segments (VALS). VALS2 found the following segments of consumers—actualizer, fulfiller, achiever, experiencer, believer, striver, maker, and struggler.
Psychographic information can inform marketers about what type of product would appeal to a particular segment. For instance, actualizers enjoy finer things in life, they are receptive to new products and technologies, are skeptical of advertising, read a wide variety of publications, and are not heavy television viewers.
iv. Personality and Self-Concept:
We often describe people by using different adjectives such as sophisticated or aggressive. These descriptions are like a tag assigned to somebody on the basis of his or her observed behaviour. Personality technically refers to inner psychological characteristics or qualities that determine how a person responds to his or her environment.
A combination of these characteristics gets reflected in a person’s behaviour in the form of a distinct character. The inner traits or characteristics provide an important way to distinguish people. People can be categorized in terms of their personality such as an introvert or extrovert and compliant or aggressive.
Since personality influences the way people respond to environment, these differences are likely to cause them to behave differently in their choice of products or advertising message. For instance, compliant people are likely to be less responsive to a new product category because as per their personality they are not initiators of change and they follow what others do.
It is for this reason new product marketers generally target the youth because young people tend to be characterized by aggression and initiative. Marketers leverage influence of personality by creating brand personality. A brand is infused with human traits or a given character that is consistent with the personality of the target consumer.
Although both brands of cola, Pepsi and Coke, do not differ much in terms of what is contained inside the bottle but they radically differ in terms of their brand personalities. Pepsi comes across as a challenger, aggressive, young, and fun while Coke is perceived as mature, unpretentious, stable and down-to-earth.
The consumer behaviour implication of personality lies in assumption of congruence. Personality becomes an important basis of brand differentiation in situations of technical product similarity. Furthermore, consumers are likely to get pulled towards those brands whose personality matches with consumers’ personality.
Self-concept is a relative concept. Personality refers to traits or characteristics that are observed by others while self-concept is self-perception of one’s own personality traits. It is a mental picture of one’s own self. It can be called the perception one has about oneself, the kind of person one is in terms of traits, habits, relationships, and behaviour.
Like personality, self-concept also influences consumer behaviour by subtly driving them to move in favour of those brands and messages that correspond to their self-concept. Products and services are valued not only for their functional utility but also their symbolic value. People buy cars on the basis of their technical specifications as well as their symbolism, which holds a major influence.
Cars are evaluated and compared with images that people have of themselves or how consistent or discrepant a brand’s image is from buyer’s self- image. A consumer who perceives himself to be down to earth is unlikely to favour a brand with the symbolism of exhibition and statement.
Consumers are motivated to preserve or enhance their self-concept, which becomes instrumental while designing marketing strategy. This translates into consumer’s drift in favour of a brand that is congruent with his self-image and avoiding the ones that are not.
Marketers use four facets of self-concept for creating brand pull, namely actual self (how a person perceives himself), desired self (how a person would like to see himself), actual social self (how a person feels others see him), and desired social self (how he would like others to see him).
The marketing implications stemming out of self-concept is that brands can be invested with symbolic meaning that either match with consumer’s current self or desired self. Most of the beauty brands project images of users that match with desired self-concept and thereby become means of a shift from actual to desire self.
Psychology is the study of human mind and behaviour. It is devoted to understanding thoughts, emotions, and behaviours. Consumer behaviour is influenced by psychological factors such as motivation, perception, learning, and attitude. These factors are not visible but their influence can be discerned. They, along with other factors contribute to making consumers behave the way they do.
There is always a reason why people do what they do or why do consumers buy one brand and not the other or shop at one store and not the other. Questions like these take us to the factor of motivation. Behaviour is a goal-directed activity. Consumer behaviour in this perspective is directed to achieve some goals.
Motivation, also known as inspiration, cause, impetus, or inducement, is the reason for behaving in a particular way. It is a driving force that causes people to take action. Consumers buy products and services to reduce discontent that arise when some needs and wants remain unsatisfied.
Discovering what goals consumers seek to attain or what needs and wants consumers seek to satisfy is essential for deciding what product or service to make and how to position the same. Consumers are guided by different motivations. The toothpaste market provides a good example of how different motivations are used to create brand pull. Closeup pulls customers by appealing to their social motives whereas Pepsodent focuses on safety motives.
Brands are offered by marketers as solutions that help consumers get relief from discontent or the state of unfulfilled needs. Brands fail when they do not correspond to the unfulfilled needs of the consumers. Needs and wants are the sources of discontent that become a playfield for marketers.
Every brand has to decide which need to satisfy without which it would fail to get into the buying process. Maslow’s hierarchy of needs provides one framework to understand human needs. It identifies five types of human needs, namely physiological, safety and security, social, ego, and self-actualization needs.
i. Physiological Needs:
These are the basic needs that need to be satisfied to sustain life biologically. Humans need food, water, air, and shelter for survival. These needs are also termed as primary or biological needs. Some of the products that aim to satisfy these needs include water, air-purifier, health foods, exercise equipment, yoga and fitness training, food, health supplements, condoms, basic home, and clothing.
ii. Safety Needs:
Once physiological needs are satisfied, safety needs gain prominence and start driving behaviour. These needs are related to protection from elements, security, law and order, stability, and freedom from fear. The need for safety moves a consumer towards products such as locks and safety alarms, smoke detectors, fire equipment, insurance, seat belts, sunscreen lotions, and mosquito nets.
iii. Social Needs:
Human needs are not confined to self and they also need love, affection, friendship, acceptance, and belonging. Social needs are reflected in the desire for love, affiliation, and group acceptance that provide a market for personal grooming products, entertainment, clubs, and social drinks.
iv. Ego Needs:
After the satisfaction of social needs, ego needs become the motivators. These find expression in the desire for status, reputation, recognition, and self-respect. People have the need to be recognized and considered useful. Conspicuous products such as automobiles, furniture, home decor items, clubs, liquor, and hobbies are aimed at satisfying these needs.
These needs sit at the top of the hierarchy. People seek self-fulfillment and desire to become what they are capable of. People want to realize their potential. Maslow summed up these needs as, ‘what a man can be must be’. It is this need that pushes people into extreme devotion to their passions such as sports, music, or arts. People seek fulfilment in different areas such as cooking, social causes, sports, and music.
Perception is related to the process by which external objective reality is transformed into internal subjective perceived reality. Perception is the lens through which the world is seen. It is for this reason one objective reality is differently observed by different persons.
This phenomenon of perception is best explained by the ‘glass half-full or half-empty experiment’. Technically perception is a process that involves selection, organization, and interpretation of stimuli. Through perception one becomes aware of external stimuli and is able to interpret it. Perception is all about making sense. This process involves exposure, attention, interpretation, and memory.
Product success requires that the consumer interprets it in a specific manner. A discrepant perception is a sure-shot recipe for failure. Consider the advertisements a consumer is exposed to everyday. All these ads are intended to convey a desired meaning or create an impression that in their calculation is required to elicit favourable consumer response.
For this, the stimuli need to pass through all stages of perceptual process. First, consumers must be exposed to the ad. Exposure will happen when the ad comes within the range of senses and creates activation. A large number of ads fail at this level as they are unable to register themselves in the consumer’s mind.
Exposure then leads to the next stage called attention. Senses convey information to the brain and information processing capacity is allocated to attend to the stimuli in waiting. A major chunk of ads manage to get exposure but fail to capture attention and are therefore not processed by the human mind.
The next stage is interpretation, which is the most crucial stage in the perception process. It is at this stage where meaning is derived. A large number of ads are misinterpreted leading to brand failures. For instance, use of black colour may be interpreted as high-end or related to prestige but it may also connote to death and mourning to others. Finally, the interpreted message is transferred to the memory for future use.
Perceptual process affects consumer behaviour through the following:
i. Perceptual Selectivity:
Most stimuli that people are exposed to are not selected by people for processing. This screening out of messages amounts to wastage of resources. This is caused by people’s desire to receive pleasant messages and avoid ones that clash with current attitudes and beliefs.
ii. Perceptual Distortion:
It is a situation when a stimulus is perceived differently from how it should be perceived. A message in an ad may be differently perceived because of differences in the experience, beliefs, attitude, and state of mind of people trying to interpret it.
iii. Perceptual Defence:
It is a process by which people protect themselves from threatening stimuli. Those stimuli or messages that appear to be harmful or offensive are blocked out. For instance, a smoker is likely to block out any ads that talk of the harmful effects of smoking.
iv. Selective Retention:
Memory is a limited resource and therefore mind exercises selectivity in what is to be retained. Information that is consistent with beliefs, interests, values, and attitudes of an individual has greater chances of being retained.
The cognitive model considers consumer as an active information processor and learner. Consumers learn how to use products and services, which store to patronize, and how a brand is different from the other. Consumers acquire consumption-related knowledge and experience that they use in future situations.
Learning is not always intentional and a great deal is learnt incidentally. Knowledge is the key element in learning. It improves buying processes and makes them efficient. Learning can be defined as a process by which information or skills are acquired. This results in a change of memory and behaviour.
People’s attitudes, beliefs, preferences, values, symbolic meanings, and feelings are acquired through learning. Learning affects what we do and how we do it.
Learning assumes importance because every marketer would want its customers to learn correctly about its brand’s attributes and benefits, evoked feelings, and its use method. How to make consumers learn effectively is a challenging task. It requires understanding of how learning takes place.
Four elements are critical in this context, namely motivation, cues, response, and reinforcement. Motivated people are fast learners. A consumer wanting to become an expert chef is likely to be motivated to learn about how different cuisines are prepared. A customer indifferent to a product category is less likely to be motivated to learn.
Cues are like stimuli that suggest ways to satisfy a specific motive. For instance, location of a store at a high-end mall is cue to the brand being premium or the selective availability of a brand like Rolex is cue to its exclusivity. Response is how a person reacts or behaves to a cue.
For instance, how a consumer behaves to a price reduction. Finally, reinforcement is what follows a response. The presence of reinforcement increases learning probability. Suppose the customer, who buys during price reduction and discovers huge savings is likely to learn to buy during price-offs. Marketers use rewards to reinforce consumer learning.
People express their inner feelings in terms of their liking and disliking for people, places, actors, movies, products, and brands. These expressions of inner feelings reveal their personalities. When a person is unfavourably inclined to a product or brand it is less likely to be purchased. An expression of internal disposition is called attitude.
Attitude is an internal psychological phenomenon that cannot be observed directly but can be deduced from what people say and do. For instance, people who hold favourable attitude towards Bharatiya Janata Party (BJP) were engaged in vociferous conversation extolling BJP’s prime ministerial candidate Narendra Modi, who is now the Prime Minister, and his Gujarat model of development.
These people are also likely to engage in door-to-door canvassing and attend rallies. Attitudes directly influence brand choice, word-of-mouth communication, and loyalty. Attitude consists of three components, namely cognitive, affective, and conative.
This component, as the name indicates, is related to cognition or knowledge that is held by a consumer about a brand. These take the form of beliefs about something. Marketers use advertising to create brand knowledge and to make consumers know what a brand is all about. For instance, Nescafe, a product of Nestle, is an instant coffee that comes in the powered form and is packaged in a glass jar.
This component is about how a consumer feels about the product or brand. The feelings that result from evaluations are expressed in terms of liking and disliking. When a consumer says that Audi is a good car, it implies that this car brand is positively evaluated.
This behavioural component of attitude is about how a consumer is likely to behave. Conation implies action tendencies and actual behaviour. It reveals the likelihood whether a brand would be bought. For instance, a consumer keeps buying Nescafe again and again.
Attitude is characterized by component consistency, that is, all three attitude components sit in harmony with each other. It is unlikely to have an inclination to buy a brand one feels bad about. Brands often engage in an attitude change exercise. For instance, Fiat brand did not do well in Indian market because many people believed that Fiat cars are fuel inefficient. Fiat accordingly sought to change this belief by an advertising campaign that focused consumer attention on its engine efficiency.