Factors Influencing Consumer Behavior
Javier Ramirez
Liberty University
BUSI 520: Strategic Marketing Management
Muriel Wilson
January 27, 2022
Factors Influencing Consumer Behavior
The consumer decision process explains the internal process as well as individual
behaviour for making product or service decisions.
1. Cultural Factors
2. Social Factors
3. Personal Factors
4. Psychological Factors
5. Economic Factors
Factors Influencing Consumer Behavior
Cultural Factors
Culture: The set of basic values, perceptions, wants, and behaviours learned by a
member of society from family and other important institutions.
Consumers live in a complex social and cultural environment. The types of products and
services they buy can be influenced by the overall cultural context in which they grow up to
become individuals.
Below are some of the important cultural factors given:
Culture
Subculture
Social Class
Social Factors
Social factors, in turn, reflect a constant and dynamic influx through which individuals
learn different consumption meanings. Below are some of the important social factors
given:
Family
Reference Groups
Roles and status
Personal Factors
A person’s consumption behaviour is shaped by his personal characteristics. Below are
some of the important personal Factors given:
Age
Income
Personality
Self-concept
Occupation
Lifestyle
Gender
Psychological Factors
Psychological factors also influenced consumers. Internal psychological factors also
direct the decision-making process. These factors influence the reason or ‘why’ of buying.
Below are some of the important psychological factors given:
Motivation
Learning
Attitudes and Beliefs
Perception
Economic Factors
Economic factor also has a significant influence on buying decision of consumer
behavior.
Below are some of the important economic factors given:
Personal and Family Income
Income Expectations
Consumer Credit
Liquid Assets
Importance of Consumer Behaviour
It is important for marketers to study consumer behaviour. This helps marketers to
investigate and understand the way in which consumers behave.
Below are some of the importance of consumer behaviour is given below:
Identifying market opportunity
The study of consumer behaviour helps in identifying the unmet needs and wants of
consumers. This demands evaluating the prevailing trends in the marketplace, consumers’
lifestyles, income levels and emerging influences.
Selecting target market
A review of market opportunities often helps in identifying distinct consumer segments
with very distinct wants and need. Identifying these groups, learning how they behave and
how they form purchase decisions enables the marketer to design and market products
/services particularly suited to consumers wants and needs.
For example, an FMCG company conducted a consumer behaviour study and found out
that many existing and potential shampoo users preferred buying low-priced sachets
containing enough quantity for one or two washes rather than big bottles of hair shampoo.
Based on the research the company introduced shampoo sachets to gain foothold in
market.
Customer retention
Organisations lay emphasis on retaining customers than merely on customer
acquisition. Customer retention is the process of maintaining existing customers by catering
to their needs and even exceeding their expectations. Study of consumer behaviour helps to
convert a casual customer into a committed loyal customer.
Dynamic nature of market
Consumer behaviour lays emphasis on dynamic nature of the market. It helps the
manager to be dynamic and proactive in satisfying consumers ahead of its competitors. If
the organisation is not able to keep up with the current market trends it will find it arduous
to survive in the industry.
Marketing-mix decisions
Once unsatisfied needs and wants are identified, the organisation has to evaluate the
right mix of product, price, distribution and promotion. In this context, consumer behaviour
study is pivotal to resolve many challenging questions.
Effective use of productive resources
The study of consumer behaviour assists the manager to make the organisational
efforts consumer-oriented. It ensures optimum utilisation of resources for achieving
maximum efficiency.
Fulfil varied consumer preferences
With the onset of globalisation customers have wide range of alternatives in contrast to
pre 1991 era. So, in order to cater to diverse customer preferences, it is pertinent for
marketers to study customer behaviour.
For example, in the current scenario customers have various car manufacturers to
choose from such as Hyundai, Honda, Mercedes, BMW etc. Every automobile maker
leverages a certain segment of customers.
Address custom needs
Consumer opt for differentiated products that depict their special needs, personalities
and lifestyles. The study of consumer behaviour enables organisations to gratify the peculiar
needs.
For example, when Onida 21 was first introduced, it was advertised on television ‘for
the elite class’. Likewise, Maggi introduced its tomato sauce with emphasis on “It’s
different”.
Application of Consumer Behavior in Marketing
Application of consumer behaviour in marketing are:
1. Analyzing market opportunity
2. Selecting target market
3. Marketing mix decisions
4. Use in Social and Non-profits Marketing
Analyzing market opportunity
Consumer behaviour study helps in identifying the unfulfilled needs and wants of
consumers. This requires examining the trends and conditions operating in the marketplace,
consumers’ lifestyles and income levels. This may reveal some of the unsatisfied needs and
wants of the consumers.
The trend towards increasing number of dual income household and greater emphasis
on convenience and leisure have led to emerging needs for household gadgets such as
washing machine,mixer grinder, vacuum cleaner and childcare centres etc.
Selecting target market
A review of market opportunities often helps in identifying distinct consumer segments
with distinct and unique wants and needs. Identifying these groups, learning how they
behave and how theymake purchase decision enables the marketer to design and market
products or services particularly suited to their wants and needs.
For example, consumer studies have revealed that many existing and potential
shampoo users did not want to buy bigger shampoo packs and would rather prefer a low-
priced sachet containing enough quantity for one or two washes. This finding led companies
to introduce the shampoo sachet, which became good seller.
Marketing mix decisions
Once unsatisfied needs and wants are identified, themarketer has to determine the
right mix of product, price, distribution and promotion. Here too consumer behaviour study
is very helpful in finding answers to many perplexing questions. The answers to these
questions are obtained by consumer behaviour research.
Use in Social and Non-profits Marketing
Consumer behaviour studies are useful to design marketing strategies by social,
governmental and not-for-profit organisations to make their programmesmore effective
such as family planning, pulse polio, safe driving etc.
Consumer Behavior and Marketing
Following changes can be observed in the approach of marketers towards consumers.
Marketing oriented firms are focusing on customer satisfaction and retention.
Shifting from supply to demand: This shows the change in focus from the
supply products to creatind demand for the product. Producer determine what
consumer will purchase before making changes and/or adding a product from its
offerings.
From manufacturing to selling: It shows the change in focus from “how to
manufacture goods” to “how to sell” goods. It becomes practical in nature when
production increased more quickly than products were purchased.
From selling to marketing: It shows the change in focus from “selling
products” to the “marketing of products”. It discusses the change from a position of
scarcity following World War II to a change by the 1950s causing the marketing era
when selling to consumers became vital to the company. The point is made that Wal-
Mart is in the business of “buying what people need to consume”, not in selling
things.
Marketing Management Topics
Market Segmentation
Marketing Mix
Marketing Concept
Marketing Management Process
Marketing Environment
Consumer Behaviour
Business Buyer Behaviour
Segmentation, Targeting and Positioning
Marketing Management
Advertising
Marketing Planning
Public Relations
Sales Promotion
Types of Sales Promotion
Techniques of Sales Promotion
New Product Development Process
