What are the key factors and subfactors that influence consumer behaviour

In the real business world, it is important for the marketers to take a closer look at what makes consumer say yes when it comes to making a purchase decision. A consumer’s decisions to purchase are driven by a variety of complex factors, namely Cultural, Social, Personal, and Psychological. The degree to which marketers understand of these factors is a measure of success in the marketplace.

To have deep understanding into the buying behaviour of consumers does not happen just by observing what consumers do when they choosing the product. It comes with insight on why consumer do what they do and perceive and how they act on marketing information in their own special way. Consideration of individual differences in social class, reference group, personality and lifestyle, and perception should be taken into account.

Cultural Factor

The first major group of factors that influence consumer-purchasing decision are the cultural factors. Culture is the essential character of a society that distinguishes it from other cultural groups. The underlying elements of every culture are the values, language, myths, customs, ritual and laws that shape the behaviour of the culture. Marketers must understand the way a person’s culture and its accompanying values, as well as a person’s subculture and social class, influence their buying behaviour.

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Culture encompasses all the things consumer do without conscious choice as their values are ingrained into their daily life. Human interaction creates values and prescribes acceptable behaviour for each culture. Consumers are not born knowing the values and norms of their society. Instead, they learned what is acceptable from family and friends.

Every society has a social class system. A social class is a group of people who are approximately equal in terms of their income, occupations and lifestyles (Solomon, Michael R. Fifth Edition Pg 389). For example, upper-class consumers are more likely to be executive, self-employed professionals with high income and at least an undergraduate degree. Working-class and middle class consumers, on the other hand, are more likely to be service or blue-collar workers that have lower income and have attained only high school education.

Marketers are interested in social class for two main reasons. Firstly, it helps to decide which medium is to be used for advertising. Secondly, knowing what products appeal to which social classes can help to determine where is best to distribute their products.

Social Factor

Most consumers will usually seek out opinion of others to reduce their effort on searching and evaluating on the product they are looking for. Consumers may also seek out others’ opinions for guidance on new product or services. Specifically, consumers interact socially with reference groups, opinion leaders, and family members to obtain product information and decision approval.

A reference group refers to a set of people that consumer is motivated to please or imitate (Solomon, Michael R., Elnora W. Stuart pg 205). Consumers may use products or brands to identify with or become a member of a group. They learn from observing what and how the members of their reference group purchase. At the same time, they will use the same criteria to make their own purchase decisions.

There are two groups of reference, direct or indirect reference groups. Direct reference groups are involved with the individual’s daily life and can have major impact on the basic buying decision-making and behaviour. There are primary membership groups such as family and friends and secondary group such as clubs and religious groups.

Indirect group refers to those aspirational reference groups, which people would like to join. To join such groups, an individual must conform to the norm, that are values and attitudes deemed acceptable, of that group.

Nonaspirational reference group, or dissociative group influence consumers’ buying behaviour when consumers try to maintain a distance away from them. They may boycott or avoid buying some types of product to avoid being associated with a particular group.

For marketers, reference groups has three importance implications. Firstly they serve as information sources and influence perceptions. Secondly, they affect an individual’s aspiration levels and lastly, their norms will either restrict or promote the consumers’ buying behaviour.

Personal Factor

A person’s buying decision are also influenced by personal characteristics that are special and different to each individual, such as age, gender, personality and lifestyle. Individual characteristics are generally stable over the whole lifecycle of one’s life.

Personality refers to the unique psychological characteristics that consistently influence the way a person responds to situation in his or her environment (Solomon, Michael R., Eluora W. Stuart, pg 198). It includes people’s underlying disposition, especially their most dominant characteristics. Although personality is one of the least useful concepts in the study of consumers’ behaviour, some marketers believe that personality affects the brand and types of product purchased.

Personality is reflected in the lifestyle of an individual. A lifestyle is the pattern of consumption that reflects a person’s choice of how he or she spends time and money (Solomon, Michael R. Fifth Edition. Pg 173). Unlike personality characteristics, which are hard to describe, lifestyle are useful in segmenting and targeting consumers.

Psychological Factor

An individual’s purchasing decisions are increasingly dependent on psychological factors that are perception, motivation, learning, and beliefs. Consumers use these factors to interact with their world, they are the means for which consumers use to recognise their feelings, gather and analyse information, consolidate their thoughts and opinion.

The world is full of stimuli, which consumers will come across in the form of sensations from our 5 senses. Humans add or take away from these sensations as meaning are assigned to them based on past experience. Perception is the process by which stimuli are selected, organised and interpreted (Solomon, Michael R. Fifth Edition. Pg 42).

Marketers must recognise the importance of cues or signals in consumers’ perception of the product. They must identify the attributes that consumers want to see in the product, and then design signals to communicate with the consumers on these attributes.

Case Study

Watches is generally a normal commodity in which everyone would at least have one. However, by taking a closer look, we can observe that there are difference levels of the types of watches in the market. There are watches that are catered to the more general market and those of the higher end products. In this discussion, we will limit our scope of discussion to the marketing mix of the different types of watches (high-end, mid range and lower end watches).

Product

In our daily life, we would need a watch to tell us the time. However as technology advances, there are more features added to just a simple time telling device. Different consumers have different needs. In the market, there are high-end watches that do not need battery to operate, but just need movement to activate the mechanism. Rolex has come out with a high-end watch meant for those super consumers who are willing to fork out thousands for the watch. Consumers are willing to pay that kind of pricing, as they believe it represent their social standing. There are also watches that operate as a stopwatch with many other functions included. Consumers are usually attracted by the functions packed product. One such example is a Casio G-Shock. It is a digital watch with many functions. Such mid range watch is targeted at those teenagers who are attracted by the trendy outlook of the product and the multi-functional features. There are consumers who are just going for a simple watch. They may choose a lower end watch that cost a couple of dollars. Such watches are those inferior pvc watches, which can be easily replaced when spoilt.

Usually high end and mid range watches have special series of product that are seasonal or limited editions. By doing so, consumers will feel exclusive to own that particular limited edition watch. Some collectors are also willing to fork out the money to purchase such limited edition watches.

Place/ Distribution

Different ranges of watches are found in different places. Higher end watches such as Rolex and Cartier are found at major shopping district such as orchard road. Their targeted market consumers are willing to travel to purchase the watch. Their retail establishment boutiques are well renovated with classy atmosphere, which are aimed at upper class consumers. Mid range watches such as Swatch and Casio can be found in those shopping centres. They are mainly catered for the middle class of consumers and they have wide distribution. Some mid range watches have their own retail establishment while mostly distribute their products to separate retail entity. Lower end watches are found in neighbourhood market and flea market.

Promotion

Typical consumers get to find out the products through advertisement. Usually the middle range of watches uses advertisement to promote their products. We can usually see advertisement of Swatch and Casio in magazines and television programmes. The higher end watches do use advertisement to promote their products too, however, the advertisement are usually seen in those “special” magazines that are targeted for those professionals, executives, such as Times magazine and Business Times. Lower end watches do not have much promotion, as it is usually not profitable for them to do so.

Price

Lower end products, as mentioned, are catered for the lower class of consumers with low purchasing power. As such, the price of such watches is usually quite cheap. As compared, mid range watches are much more expansive, but is still within the reach of the middle class of consumers. Consumers, today, are more willing to spend. They are willing to pay for a much better and trendy watch, which reflects their taste and preferences. Executives and professionals will go for that high-end branded watch despite the costly pricing, as it will define their social status. On the contrary, should those branded watch reduce their pricing, they may suffer a drop in sales for they will no longer seem to be exclusive.

During festive seasons, such as Chinese New Year, Christmas and Valentines Day, mid range watches would usually come up with promotions for their watches. For example, they would offer special price discount during such period to enhance their sales.

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