Factors affecting consumer buying decisions

Factors affecting consumer buying decision.

Consumer make buying decisions. Their decisions are influenced by economic, personal, psychological and sociocultural factors.

1.      Economic factor:
a) level of income: the ability to spend is determined by level of income. Product choice is very much dependent on income level
b) liquid assets: consumers who do not have regular income may possess liquid assets like gold and shares. They provide spending power to the consumers.
c) Savings, debt and credit availability: they all affect consumer expenditure levels. High savings result in lower interest rates. Credit availability by bank becomes cheaper through lower interest rates. This increases the level of consumer spending.
d) Attitude towards spending: Negative attitude toward spending adversely affects the willingness of the consumers to spend. This influences the product choice.
e) Economic conditions: the stage of economic development, inflation and business cycles affect consumers’ willingness to spend. Prosperity is good and recession is bad for marketing. Health of the economy affects consumer behavior.

2.      Personal factors: Personal factors can also affect the consumer behavior.
a) Age: Age and life-cycle have potential impact on the consumer buying behavior. It is obvious that the consumers change the purchase of goods and services with the passage of time. Family life-cycle consists of different stages such young singles, married couples, unmarried couples etc. which help marketers to develop appropriate products for each stage

b) Gender: male and female exhibit differences in buying behavior. Their needs also vary.

c) Family size and family life cycle: family size determines the level of expenditure and

Product choice. The family life cycle influences spending patterns. Product interests differ according to the stage in family life cycle. Such stages consist of singles, bachelors, married, married with children and old.

d) Occupation: occupation influences consumption pattern. Factory workers buy work clothes. Bank managers buy expensive suits.

3.      Psychological factors:

a)      Motivation: The level of motivation also affects the buying behavior of customers. Every person has different needs such as physiological needs, biological needs, social needs etc. The nature of the needs is that, some of them are most pressing while others are least pressing. Therefore a need becomes a motive when it is more pressing to direct the person to seek satisfaction.

b)      Perception: Selecting, organizing and interpreting information in a way to produce a meaningful experience of the world is called perception. There are three different perceptual processes which are selective attention, selective distortion and selective retention.
Selective attention: consumers are selective in noticing information, they are more likely to notice stimuli that relate to their current needs
selective distortion: consumers distort information to suit their preconceptions. They hear what they want to hear.
Selective retention: consumers tend to retain information that supports their attitudes and beliefs. They want to continue believing in what they believe.

Perception influences consumer buying decisions. Marketers must understand how the consumers see the world around them. They must ensure that customers perceive their marketing mix in a positive way

c)      Learning: learning is an enduring change in behavior. It results from information and

Experience. Most human behavior is learned.

d)      Attitudes and beliefs:  attitudes reflect likes and dislikes of consumers. An attitude is a person’s judgment toward some object, people or event. They are learned, have consistency, and are either favorable or unfavorable about objects. Personal experience, environment and situation molds attitude.
    Belief is a descriptive thought that a consumer holds about something. It can be based on knowledge, opinion or faith. Beliefs make up product and brand image.
        

e)      Personality: Personality changes from person to person, time to time and place to place. Therefore it can greatly influence the buying behavior of customers. Actually, Personality is not what one wears; rather it is the totality of behavior of a man in different circumstances. It has different characteristics such as: dominance, aggressiveness, self-confidence etc. which can be useful to determine the consumer behavior for particular product or service

f) Lifestyle: Lifestyle of customers is another import factor affecting the consumer buying behavior. Lifestyle refers to the way a person lives in a society and is expressed by the things in his/her surroundings. It is determined by customer interests, opinions, activities etc. and shapes his whole pattern of acting and interacting in the world.

4.      Social factors: social factors are influences that other people exert on a consumer behavior.
a) Reference groups: reference groups consist of groups that have a direct or indirect influence on the consumer’s attitudes. Consumers use them as appoint of reference for evaluating their own beliefs and attitudes. There are three types of reference group’s
      -Membership groups: a person holds membership of the groups and has regular face-to-face contact. For example, family, co-workers, etc.

      -Aspiration groups: a person aspires to join the group but is not a member of the group
      -Dissociative groups: a person keeps distance and rejects the values, attitudes or behavior of the group
 Reference groups influence product and brands choices.

b) Family: Buyer behavior is strongly influenced by the member of a family. The role performed by each member influences family purchase decision. Roles can be
-Initiator: suggests the idea for the product
-influencer: provides information and advice about the product
-decider: makes the buying decision

-buyer: makes the actual purchase of the product

-users: uses or consumes the product.

c) Roles and status: Each person possesses different roles and status in the society depending upon the groups, clubs, family, organization etc. to which he belongs. For example a woman is working in an organization as finance manager. Now she is playing two roles, one of finance manager and other of mother. Therefore her buying decisions will be influenced by her role and status.

5.      Cultural factors: Consumer behavior is deeply influenced by cultural factors such as: buyer culture, subculture, and social class.
a) Culture: culture includes values, attitudes, beliefs, language, religion, customs, traditions and works of arts and architecture. Culture reflects the ways people live together. Culture is a learned behavior. It changes over time. Food habits, dress and housing are influenced by cultural norms. Marketers should offer marketing mixes to fit cultural norms. Cultural changes should be carefully taken into account for modifying marketing mixes.

b) Subculture: each culture consists of subcultures. Subculture is based on homogeneous characteristics such as religion, language, race, caste and ethnicity. Marketers can use these groups by segmenting the market into various small portions.

c) Social class: It is a rank within a society. It is determined by members that constitute social class. It can be upper, middle and lower. It indicates preferences and life style. Members share similar values, interests and behavior. Social class reflects income, occupation, education and area of residence. It is a grouping of people. There are substantial differences in the buying behavior among classes.