Studying consumer behavior is very important for businesses and marketers, and their business strategy relies on reports of consumer behavior. As we know that the consumer is the person who consumes or uses the goods and services, and the customer is the person who buys from the retail store. In the customer vs. consumer article, we have had a detailed discussion on the differentiation between the two terms. Today, we’ll discuss how the consumer behaves and what factors affect his behavior.
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What is Consumer Behavior?
Consumer behavior is the process of studying the behavior of consumers that how they consume, dispose of, and use goods and services. It also includes studying the behavioral, emotional, and mental responses of consumers. The study of consumer behavior looks at things from various perspectives and takes a guide from different sciences like economics, psychology, chemistry, and biology.
When we talk about consumer behavior, then it’s very difficult to understand their varying moods. But if you categorize them based on their expectations and needs, it would become easier for you to understand their behavior. Different personal and environmental factors influencing the behavior of consumers.
5 Factors Influencing Consumer Behavior
Marketers want to understand the behavior of consumers because it helps them to make effective decisions. Here are the top five personal and environmental factors influencing consumer behavior, and they’re as follows;
Human psychology plays a very significant role in impacting the decision-making process of consumers. It’s very difficult to precisely measure and evaluate the psychological factors. But they’re powerful enough to impact consumers’ behavior and influence their decision. Some of the main psychological factors are as follows;
What motivates a person to use goods and services and what forces influence them to buy something to consume. Human needs are the powerful motive behind their consumption decision. When we talk about human needs, there are different kinds of needs like physiological needs, security needs, love and family needs, social needs, and self-actualization needs.
Physiological needs and security needs are the most important out of all human needs. They motivate a person to make the consumption decision.
There’s a very famous quotation “monkey see, monkey do.” It means that we as human beings are social animals live in societies and communities. Unconsciously our mind is always studying and learning from the environment. We gather information from various sources and our experiences, and all of these factors create our perception of different products.
Customer reviews, promotional schemes, TV ads, and feedback on social media put an impression on people. As a result, they create the perception of consumers. When people go out shopping, the perceptions they already have in their minds influence their decision.
When a person goes out shopping and purchases something, he gets to learn something about the product while using it. The learning process takes time and it depends on the knowledge, experience, and skill of the consumer.
When we say learning, there are two main types of learning; conditional learning and cognitive learning. In conditional learning, it’s where the consumer makes a move and learns from his responses when he faces a situation repeatedly. In cognitive learning, a consumer learns something after applying his skill and knowledge.
Attitudes and Beliefs
People have different beliefs and it impacts their purchasing decision. Consumer’s attitude is also very important and it tells the behavior of consumers towards different products. The reason marketers are interested in it is that the consumer’s attitude towards a certain product creates a brand image of the company. Even the purpose of their marketing campaigns is to influence consumer’s attitudes.
We human beings are social beings and we would love to live around people, create societies, and communities of like-minded people. It’s also our nature to follow the social codes of society so that the people around us accept us. When we go out for purchase, the choices we make tell about us to our society. Here are some of the social factors that play their part in affecting consumer behavior;
The group is when two or more people get together and they’ve some common objective. People in the group usually like-minded people and they would like to be associated with one another. The group plays a very important role in influencing the behavior and choice of other members.
The family where you’re born shapes and develops our behavior, character, and personality. The children follow and learn from their parents. The kind of TV channels and commercials they watch and the kind of thing they buy impact the behavior of children. They do the same thing when they group. We can also say that the family is the very first school in children.
Role and Status
We play different roles throughout our lives. Like the role of a child, brother, sister, siblings, students, professionals, mother, father, daughter, etc. Every role requires us to behave in a certain way. For instance, if you’re the CEO of a company, then you have to buy things based on his/her status. The choices we make also tell about our status.
Culture is a set of codes and values that people or groups follow in a certain community. That’s why people in different cultures behave differently because they follow the prevailing values and ideologies of their culture where they are brought up. In other words, culture plays a very important role in defining the behavior of consumers. Some of the main cultural factors are as follows;
Culture is a strong motivating force and it influences the purchasing behavior of consumers to a great extent. A culture comprises a set of codes, values, preferences, ideologies, needs, wants of the majority of people. We learn our cultural values from family, relatives, and the people who surround us.
Culture is a very wide term and it tells us the values of the whole country. There are many subcultures within a big culture. Like organizational culture, family culture, locality culture, vicinity culture, etc. People within the subculture may belong to different races, religions, and beliefs. But they follow the same set of codes of a subculture. Subculture is also important to marketers because it tells the behavior of consumers within a particular group.
Every society has different kinds of social classes across the world. The reason people have created social classes is because of many factors like income, education, family background, occupation, residential locations, and many others. People within a particular social class share the same set of values.
There are many personal factors like age, lifestyle, occupation, income, etc. They are also important to the consumers and it affects their purchasing behavior. These personal factors vary from person to person. Some of the main personal factors are as follows;
Age and Life Cycle Stages
Our preferences and choices keep on changing throughout our lives. That’s age is a very significant factor in the consumer’s behavior process. For instance, a teenager wants to buy colored clothes and beauty products. A middle-aged person would like to buy a house, car, property, business, etc. On the other hand, an old man would like to buy completely different things. The consumer behavior of females and children would be completely different.
Occupation is what we do for a living and earn our livelihood. People in different professions buy different things relevant to their profession. For instance, the purchasing of a professor would be completely different from the doctor and an engineer.
Lifestyle means the attitude of a person and how a person behaves in the community. It also influences consumer behavior, for instance, a person is living a healthy lifestyle, then he would choose healthy food and products rather than junk food.
Economic factors comprise purchasing power, personal income, market situation, and other economic variables. For instance, if a country is prosperous, it means people would have jobs, and people would have extra money for shopping. In such an environment, people would be confident about their purchasing decision.
When the economy of a country is weak, the unemployment rate would be high, people would have less money for purchasing, and they’ll price conscious about their choices. That’s why economic factors play a very important role in the consumer’s behavior. Some of the main economic factors are as follows;
Personal income means the money left after minimizing all the expenses. We can also call it a disposable income. Higher disposable income means that the person would have a higher buying power. When people have disposable income, they increase their expenses accordingly. People reduce their spending when their disposable income drops.
Family income means the accumulative earnings of all the members of the family. When a family has a higher income, surplus income to be more precise, they would have higher spending. Higher family income would impact the consumer behavior of all the members of the family.
When credit card companies make it easier for people to have easier consumer credit, bank loans, car loans, hire purchase, and other credit options. It means that they want people to spend more on the economy by providing them easy access to credit.
Liquid asset means cash and money in hand, securities, bonds, or in a bank account. It’s those assets that you can use and convert into cash easily. Higher liquid asset means that the buyer has more option to spend.
Government policies that the economic rules and regulations of the government. For instance, if the government increases the interest rate, taxes on spending, cash tax, or inflation rate. It impacts the purchasing pattern of customers’ spending would drop resultantly.