Factors Influencing Consumer Behaviour

The consumer decision process explains the internal process as well as individual behavior for making product or service decisions. The consumption process is influenced by external factors like cultural, social, personal, and psychological factors.

When the marketing and other stimuli come in contact with the buyer, his decision process is initiated. The marketer has to correctly read the buyer’s conscious/ unconscious behavior to generate a positive response. Every person has his/her distinct set of standards of judgment.

However, there is some commonality between all of us, which makes a marketer classify and analyze consumer behavior. These are known as similarities or universals.

Consumer behavior is affected by a host of variables, ranging from psychological factors like personal motivations, needs, attitudes and values, personality characteristics, socioeconomic and cultural background, demographic variables like age, gender, professional status, social influences of various kinds exerted by family, friends, colleagues, and society as a whole and broader cultural factors.

The combination of these variables has a deeper impact on each one of us as manifested in our different behaviour as a consumer.

Influence of Cultural Factors

There is a subtle influence of cultural factors on the consumer’s decision process. 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.

There is also the influence of the immediate subculture with which the consumer identifies himself as a member. Consumers also grow up in a social setting, which is characterized by the concept of social class.

Culture

Culture is the complex way of living of individuals. It represents the way consumers live and grow up to acquire cultural values and norms. Culture is defined as a complex of values, ideas, attitudes, and other meaningful symbols created by man to shape human behaviour and the artefacts of that behaviour as they are transmitted from one generation to the next.

Culture is also the largest single grouping of people sharing a distinctly unique social heritage. Each culture evolves over centuries and passes from one generation to other. Many of our consumption behaviour are manifested in our subconscious due to transformation from one generation to the other.

Every culture has two components viz. material and non-material component. Material artefacts are the products, tools, monuments and structures that man has created from the natural resources which have come to stay as an indicator of a particular culture.

Non-material cultural components explain the symbols, signs, semiotics and rituals used by people to reflect their way of living and tell the life story of nations and civilisations. Life in itself is called rites of passage. Every one of us has to complete these rites in the birth, graduation, marriage and death of individuals.

Marketing managers need to understand the cultural context in which consumers derive meaning from products and services. Religion being the foremost factor in deciding the cultural context allows or forbids certain consumption choices for instance Hindus are forbidden to use beef and Muslims to use pork.

Colours and symbols also carry different meanings in different cultures. The symbol of Swastika is a sacred symbol of Hindus whereas its slight modified version represents the tyranny of Nazi rulers of Germany and hence is a symbol of hatred in Europe.

So, while studying consumer behaviour in any culture, one must recognises products or services not only as materials produced by the culture, but also as the culmination of abstract values, attitudes and related symbolism associated with the culture having a direct bearing on the consumption pattern of the user.

Sub-culture

Culture is a larger manifestation of a nation. People tend to identify themselves with immediate sub-cultural systems, which are reflected through the race, religion, nationality and geographical locations. Sub-cultural factors help in providing an immediate identification and socialisation to the consumer.

People tend to identify and behave in a very similar manner when they come from the same state, practice similar faith and are from the representative race. A Punjabi will always present himself as someone from Punjab and finds it more comfortable in the company of Punjabis.

There is more homogeneity in practices, rituals and celebrations among Punjabis than any other non-Punjabi community. Sub cultural identifications are immediate in consumption choices compared to a broader national culture. Below is a list of cultural values relevant in the context of consumption.

Social Class

More immediate identification and homogeneity in consumption is seen in the social classification system used to develop a hierarchical order in every society. In a developed and capitalistic economy, the social classification is linked to the financial and material resources of the individual; the eastern nations like India have a different method of social classification through caste system.

In an oriental society, social classification comes out of ascription, which is directly linked to the caste system. Irrespective of material and financial gains, Brahmins in India are put in the highest echelon in the social ladder, followed by warriors, businessmen or trade community and finally the scheduled castes whose job is to serve the upper three castes.

The social classification and belongingness is not linked to the individual’s economic success but to his birth or ascription to a particular class.

Social class is defined as a relatively permanent and homogeneous division(s) in the society to which individuals and families belong and they share similar values, lifestyles, interests and behaviour. These are very broad groupings of individuals who hold roughly similar status levels in society, arranged in a hierarchy from low through middle to upper class divisions.

The individual can move up or down during his lifetime among the social classes depending on his success in career and business. People in one social class tend to show very similar behaviour and there is a variation of behaviour between each class. Since social classification is enduring and is a part of a broader social system, it is always studied in the context of broader cultural influence on consumer behaviour.

The following factors contribute to the social class of an individual.

Influence of Social Factors

As we have mentioned, cultural factors are broader influences on consumption choice and are subtle in their impact in shaping the consumption choice of individuals. Social factors in turn reflect a constant and dynamic influx through which individuals learn different consumption meanings.

The social factors influencing consumer behaviour include reference group, family and social roles and status. Let us discuss each one of them in brief and understand their influence in consumer decision process.

Reference Group

A person’s reference group has a face-to-face, direct impact or indirect impact on his attitude and behaviour. Groups with direct influence are the membership groups.

Membership groups can be classified as primary membership groups like family, friends, neighbours and colleagues with whom he has a continuous and informal interaction; secondary membership groups like religious membership groups, professional associations and trade union groups where interactions are more formal and less continuous in nature.

References groups expose people to new behaviour through which they develop membership behaviour by using products and services similar to the group members. So, new groups exert pressure to confirm to group norms, which influences the brand choice behaviour.

People are also influenced by the aspirational groups to which they are currently not members but expect to belong at future period of time. Similarly individuals reject ideas and membership norms of certain reference groups. They are called dissociative groups.

Reference groups influence consumption decisions, which can be studied by analysing factors like product category, reference group characteristics and group communication process. The kind of goods and services used by a reference group is also a determinant of influence on the consumption decisions of group members.

People generally resent strong pressures and bold directives. However, a participative approach of communicating group norms regarding consumption decisions can yield a better adoption by people in a group.

Family

Out of all the social factors, the one most important and effective in influencing the consumption choice is the family. Aristotle in 4th B.C. defined family, as the association established by nature for the supply of man’s everyday wants. It is defined as two or more people related by blood, marriage or adoption that reside together.

The individuals who constitute a family might be described as members of the most basic unit of society or the most fundamental unit of society who live together and interact to satisfy their personal and mutual needs.

Families are sometimes referred as households but not all households are families. A household might include individuals who are not related by blood, marriage or adoption such as unmarried couples, family friends, roommates or boarders. We will use family and household synonymously.

The simplest type of family in number of members is a married couple. A husband and wife and one or more children constitute a nuclear family. The nuclear family, together with at least one grand parent living within the household is called an extended family. When a couple creates a family with their children, it is called family of procreation and when they are a part of family with their parents, it is called family of orientation.

Families have four basic functions, namely function of economic well being in which husband is the bread earner and wife is the home maker and child rearer; function of emotional support in which the family attempts to assist its members in coping with personal and social problems; function of suitable family life cycle which covers upbringing, experience and the personal and jointly determined goals of the spouses.

It determines the importance placed in education, career, reading and selection of other entertainment and recreational activities. Family life cycle commitments including allocation of time for other members greatly influence the consumption pattern.

For example, marketing of convenience and fast foods, emergence of shopping malls and out of the home entertainment is due to increased number of working mothers in households of India; the fourth function the family member socialisation especially for children, is the central family function.

This process consists of imparting to children the basic values and modes of behaviour consistent within the culture. These generally include moral and religious principles, interpersonal skills, dress and grooming standards, appropriate manners and speech and selection of suitable educational, occupational career goals.

Most marketers recognise the family as the basic decision making unit and therefore they most frequently examine the attitudes and behaviour of one of the family members whom they believe to be the decision maker. They are also likely to evaluate the consumption role and observe the behaviour of the member who is likely to make the final decision.

Roles and Status

Consumers participate in different roles in different groups like family, professional and recreational associations and formal organizations. Their role is defined in terms of role and status. A role consists of the set of activities a person is expected to perform in all these groups – as a father, as an employee, or as a member of the work organization.

Each of these roles carries some level of status. A person working as the vice president of a company enjoys more status than a marketing manager. Marketing communication managers communicate various roles and status through their brand associations.

As a marketer they need to be aware about what kind of status symbol each of the products and services carry for the consumer. In a modern society, status comes from achievements, source of income and materialistic ownership of products and properties, whereas in an oriental and traditional society, consumers tend to get a status out of ascription and inheritance.

Marketing managers develop favourable brand associations by linking their brands and products with the meaningful status connotations in society.

Influence of Personal Factors

A person’s consumption behaviour is shaped by his personal characteristics. These factors include demographic factors like age, income, and language, level of education and gender factors, his stage in life cycle, occupation, economic circumstances, lifestyle, personality and the self concept.

People consume different kinds of products in different age groups. Marketers take a count on the target population’s requirements and design products and marketing programs with the life stage of the consumer. The ever-ageing population in Japan is in need of products and services, which will help them in digestion, viewing and mobility.

So marketers find a big market for digestive tablets, glasses and walking sticks aimed at this segment of population whereas majority of Indians being in stage of youth need quality education, technical training, housing and jobs. So the age of the consumer as well as his stage in life will also influence his consumption pattern.

Occupational Factors

Occupational factors also influence consumer behaviour. These factors include both the type of job and nature of job. Demand pattern for a blue-collar worker is different than that of a white-collar worker. His product choice, brand beliefs are influenced by his occupation. By nature of occupation we mean the regularity of income.

If the person is in a full time and permanent job, his consumption pattern will be different than a person who goes in and out of a job. The financial conditions and income levels will influence his demand and consumption pattern.

In a typical situation, marketers look for the level of spendable income that the target segment has. Whatsoever the consumer earns, he cannot spend it all as there are tax related obligatory payments he has to make. This income is called disposable income. He will save some amount of money in the form of savings and investments from his disposable income.

The net from this proceeding is called spendable income. A consumer will be happy to find an overall increase in the spendable income level, which will allow him to allocate higher resources in each consumption situation. His economic circumstances will influence his financial liquidity position, debts, borrowing power and attitude towards spending and savings.

Marketers selling price value products in a developing market keep a watch on the trends in income and consumption pattern and spending and saving habits of target consumers. In the event of a boom like what India is experiencing these days, marketers tend to make the products and services more affordable and luxurious for commodities and expensive for personal categories respectively.

Lifestyle

Lifestyle is also another personal factor influencing the decision of consumers. People coming from a different culture, social class and occupation exhibit different lifestyles. Lifestyle is the wholesome pattern of living of a person in the world as expressed in his values and lifestyle patterns, in his activities, interests and opinions.

It portrays whole person interacting with his or her environment. It is important for marketers to establish a link between the lifestyle of people with the associations people develop with products and brands.

For example, a person working in a Business Process Outsourcing (BPO) industry tends to show a different pattern of lifestyle compared to someone teaching in a business school. At a later stage, the former will be more oriented towards achievement whereas a professor in a business school will be more oriented towards self actualisation.

A study of lifestyle is called Psychographics. It is the science of using psychological and social variables to understand consumers and their usage context. There are various measures for identifying psychographics of people.

The way in which marketers facilitate the expression of an individual’s lifestyle is by providing customers with parts of a potential mosaic from which they as artists of their own lifestyles can pick and chose to develop the composition that, for the specific time looks best.

Psychographics deals with mental profiling of consumer’s psychological processes and properties. It is the systematic use of relevant activity, interest and opinion constructs to quantitatively explore and explain the communicating, purchasing and consuming behaviour of consumers for brands, products or set of products.

Psychographics is the method of defining lifestyle in measurable terms. There are two frameworks used for the purpose of lifestyle analysis viz. AIO and VALS Framework. AIO (Activities, Interest, Opinion) framework model frames long sets of questions using the following measures to find out major dimensions of lifestyles of consumers.

Personality and Self-concept

The next set of personal factors influencing the purchase decision of consumers is personality and self-concept. Personality refers to a person’s consistent way of responding to a wide range of situations. Marketers are interested in personality as a way to target consumers.

Are people with particular personalities more likely to buy certain products? Personalities are stable among people and do not change under normal circumstances. However, behaviours shown under conditions of intoxication, medication cannot be taken as part of personality.

Individuals tend to show a systematic pattern of response and also demonstrate a stable set of characteristics to be considered under one personality type. Our idea is to only make the reader understand what personality is and how a marketing program can influence the consumer’s behaviour.

There are various theories on personality. They are grouped as psychological, sociological, trait and factor theories of personality. The psychological school propounded by Freud postulates that consumers have three dynamic forces namely id, ego, and super ego and the personality is shaped by interplay of these three internal forces.

While id addresses the hedonistic desires of individuals, super ego attempts to play the moral policeman; ego is the executive that tries to bring a balance between these two opposites. Personality of individuals is shaped by interplay of these three forces.

The sociological theories of personality takes a radical view and assume that personality of an individual is shaped by how he interacts and learns from his environment. So it has more to do with a person interacting with society and seeking power, love, care and appreciation, which in turn will form his personality, and Product or brand perception also depends on external environment, biases and loyalty of individuals towards other products and brands. The problem of perception is that it is dependant on each individual’s ability to process and interpret the physical stimuli, so the meanings for the same product or brand will vary from person to person. This happens because of three processes involved in perception, namely selective attention, selective distortion and selective retention.characteristics.

Karen Harney propounded the sociological school of personality, which was subsequently supported by many others. Quite contrary to the above two propositions, marketers follow the trait and factor theories for developing consumer stereotypes for the purpose of application of personality ideas in the context of marketing.

Traits are relatively stable set of characteristics that individual’s show in all possible situations like aggression, patriotism or power-seeking behaviour. Many traits have a high degree of relationship and they explain a broader variable called ‘Factor of Personality.’ Factors are independent variables or characteristics explaining the personality of the individuals.

Marketing application of personality theories is very evident in the field of advertising. While trait and factor theories propagate stereotyping personalities in brand communication, sociological theories are used in advertisements e.g. Raymonds’ campaign in which the child appreciates the dress of father,

Santoor brand of soap in which the mother of a grown up girl looks younger and is asked about the college in which she studies; psychological theories of personality are applied in cases where some element of sex is hidden in the context of marriage and shown in the advertisement e.g.

MR coffee campaign with the catch line ‘you don’t get satisfaction by instant’ is an example of use of psychological theories in advertising. Personality explains totality of a person’s make up rather than focusing on specific action that he or she will take in particular situations.

Marketers use self-concept to develop brand personality. They expect that using self-concept will help customers to identify and match their personalities with that of the brand. Self-concept has various classifications.

There is a real self or actual self, which is what the consumer thinks he is; there is an ideal self which explains how he wants to himself; there is the other self which is how he thinks he is being viewed by others.

A marketer needs to know which kind of self the consumer is likely to use in his product choice context and accordingly project that self concept in his marketing program. Jennifer Aaker in her seminal article on brand personality has identified five traits as components of brand personality.

Sincerity (Down to earth, honest, wholesome and cheerful)
Excitement (daring, spirited, imaginative and up to date)
Competence (reliable, intelligent and successful)
Sophistication (upper class and charming)
Ruggedness (outdoorsy and tough)

As a consumer, we naturally buy goods and services that fit our self-concept or self-image. All of us carry around a complex mental picture of ourselves. Marketers should try to develop brand images that match the self-image of the target market.

Of course, one’s actual self concept may differ from his ideal self concept. Some purchases and possessions such as clothing, cars, furniture and houses, are more central to self-concept than others. Marketers of products that contribute strongly to self-image (hairstyling, shoes, perfume, jewellery and eyeglasses) need to assess their customers’ self-concepts.

Psychological Factors

Consumers are also influenced by the psychological factors. Internal psychological factors subtly guide the decision-making process. These factors are important as they influence the reason or ‘why’ of buying. These factors are motivation, learning and perception and attitude. Let us discuss each of these factors and how they influence the consumer decision process.

Motivation

Motivation leads people to move from a general level of need awareness to pursuing a specific goal and to take action towards achieving that specific goal. Psychology helps in understanding how the consumer learnt about a brand and how his memory influences his buying habits.

Consumers have biogenic needs driven by born instincts and psychogenic needs, which arise from psychological states of tension such as the need for love, care and belongingness. A need becomes motive only when the need is strong enough to drive the person to act in a desired way. Various theories are available in literature to explain the concept of motivation.

Maslow’s hierarchy of needs model explains that individuals follow a typical pattern of need structure. In order to fulfil their needs, they follow a hierarchical model in which once a lower order need is fulfilled, the customer pursues the next order of need.

The human factor always moves towards satisfying certain basic needs as explained by Maslow. Therefore, a study of why and how a consumer is motivated to buy certain products and services helps us in understanding consumer behaviour. Maslow classified the needs of individuals as physiological needs, safety needs, social needs, esteem needs and self-actualisation needs.

A person would first satisfy his physiological need and then move higher in the order to satisfy the higher order needs. The physiological needs include basic needs like hunger, thirst and sex. Safety needs include needs related to security and protection. Social needs include sense of belonging and love. Esteem needs include self-esteem and recognition need.

Self-actualisation need covers self-development and realisation need. People will try to satisfy the most pressing need first and then move to the next level. Marketers help in giving signals and cues to make their brand as fulfilling the most pressing need of the consumer.

Perception

Perception is a process through which a consumer’s mind receives, organises and interprets physical stimuli. It is influenced by various factors such as colour, size and brand. Perception explains how consumer’s process information.

A motivated customer is ready to take a purchase decision for which he will search, process and interpret available information about products and services. It is a process of customers painting their world with meanings about the products and services.

Product or brand perception also depends on external environment, biases and loyalty of individuals towards other products and brands. The problem of perception is that it is dependant on each individual’s ability to process and interpret the physical stimuli, so the meanings for the same product or brand will vary from person to person.

This happens because of three processes involved in perception, namely selective attention, selective distortion and selective retention.

We are exposed to a huge amount of information about the world everyday, which also includes information about products and services. Due to the advent of Internet, there has also been an information explosion. Unfortunately, ability of consumer to process this huge information and interest in evaluating this information is limited.

His interest is in evaluating information, which is pertinent to his current goals and needs. He actively searches this information and processes it for developing meanings.

In some cases, though he does not face a consumption problem currently, he evaluates information passively due to his interest or expectation that a need may arise in future. His information processing is more passive and ongoing in nature. This behaviour of consumers is called selective attention.

Thus, individuals will process that information and notice that stimuli which relates to one of their current needs; individuals will notice those stimuli which they expect to use in future and finally, they will notice a stimuli which is largely deviating from the conventional and traditional models of information for delivery of physical product stimuli.

An advertisement, which is very creative and different than others in a slot, is likely to catch consumer’s attention because of this deviated behaviour. Although individuals continuously evaluate information they are also influenced by unexpected stimuli such as sales promotion programs and events organised around products and brands.

The information stimuli sent by the marketer or sender gets modified and distorted due to various external factors and the availability of previous information with the individuals.

This is called selective distortion process, which explains the likelihood of consumers to modify and twist the information and interpret information in a way, which is different than the way the company wanted it to be interpreted and which will fit better into their preconceptions. Marketers’ role in the selective distortion process is very limited.

Finally, people do not have such a powerful memory box to remember all the information aimed at them through various marketing and communication programs. In that case, they are likely to reject the huge amount of information and prioritize what set of information, they are going to retain for future use.

It used insight and self estimation for the goal and developed learned response pattern through use of the stool to reach the bananas. Consumers are engaged in various kinds of behaviour, and use the sum-total of their information, experiences, attitudes, values, beliefs, etc., to try to solve their problems and derive satisfaction. Consumer learning based on application of marketing knowledge is an example of cognitive consumption learning.

This process is called selective retention. Due to the process of selective retention, individuals tend to remember only key benefits or attributes of products and brands and reject a major part of marketing information.

Learning

Learning is closely related to knowledge, skill, and intention – three basic behavioural characteristics. It appears that knowledge and intention acquired through experience and skills, come from practice. Learning is not directly observed, but rather is inferred from a change in performance. This indicates that learning and performance are related but distinct concepts regarding the consumer.

Learning brings changes in people’s behaviour due to experience or application of insight. Most human behaviour is learned and people acquire new behavioural patterns and meanings through the learning process. Learning occurs due to interplay of drives, stimuli, cues and responses. Drive is a strong stimulus that impels customers to take action.

An important desire or pressing motivation takes the form of a drive, which breaks the inertia and activates consumers to take decisions. A cue is a weak stimulus, which in itself has no ability to generate a response but has ability to guide the direction of the effect of a stimulus. It is like a catalyst in a chemical reaction.

Ambience in a store and colour of packaging are examples of cues. People learn to discriminate between various similar stimuli. Discrimination is defined as the process in which the individual learns to recognises differences in sets of similar stimuli and can adjust his response to each differentiating stimulus.

Learning theories help marketers design marketing programs and design programs to make customers learn about selective consumption in favour of company’s products and brands. The marketing manager can associate the offer with the desired expectations of consumers, use cues to hasten the process of decision-making and manage the response pattern in the form of higher mind share and market share.

There are two approaches of learning as explained in the following paragraphs.

Conditional Learning

This is based on stimulus response behaviour and is based on experiential learning. These theories postulate that learning can happen by conditioning a relationship between the stimulus and response. The individual learns this relationship through experience. This may happen involuntarily or may happen due to the consumer’s actions.

Pavlov’s experiment on the dog and bell is an example of involuntary learning in which the dog was forced to learn about the bell; which was rung everytime the food was served. In this case, food is the unconditioned stimulus, bell is the conditioned stimulus and the salivation of the dog is the desired response.

In BF Skinner’s experiment of instrumental conditioning, the bird voluntarily tried to press one of the switches and learnt to connect the particular switch with the food and developed the learning over trial and error method.

Cognitive Learning

This kind of learning occurs without previous experience and by use of insight and cognition. There is no need to have an earlier conditioning between stimulus and response for learning. Wolfgang Kohler’s experiment with the chimpanzee is based on the cognitive learning in which the animal used his own insights for using the tool kept in the cage to reach the bananas.

Attitude

Consumers develop favourable or unfavourable attitudes towards products or brands before they decide to buy the product or brand in the market place. Formation of positive attitude is a necessary condition for the completion of the purchase process.

Attitude is defined as a favourable or unfavourable predisposition that people hold towards objects in the environment. An attitude is a tendency to respond to a given product in a particular way. Awareness about attitudes helps the marketing managers in deciding what product attributes and service components should be there in the marketing program to create a positive disposition.

Attitude has three distinct components, namely cognitive, affective and behavioural or connative. Attitude is an individual’s enduring favourable and unfavourable evaluations, emotional feelings and action tendencies towards some objects.

The cognitive component addresses the rational and logical evaluations whereas affective component addresses the emotional feeling that consumers hold towards the objects and products and finally the connative components addresses the action tendencies. Attitude leads people towards a consistent way of viewing and responding to objects.

Beliefs

Consumers also have descriptive thoughts about products and brands in the market place. These descriptive thoughts are called brand beliefs and they influence the decision making process of consumers.

If consumers believe that a brand available in the market is good then it is very difficult to push another product without changing the brand belief of consumers. Brand beliefs reside in consumer memory and often advertisers use it for building storyboards for products and brands.

The belief that diamonds are forever made advertisers to use a catch line ‘Hira hain sada ke liye’ in diamond advertising campaign. Marketers use neutral network models to find out which is the desired set of associations that consumers hold towards a brand and use them in their brand promotion.

Consumers hold brand beliefs like ‘Tatas are an ethically correct company’ and “Sony only sells premium brands” in the television market. This helps the marketing manager to decide where to position brands and what kind of brand belief he would love consumers to make for his brand.

ARTICLE SOURCES

Tapan K Panda, Marketing Management, Excel Books.
V S Ramaswami and S Namakumari, Marketing Management, Macmillan, 2003.
Ramphal and Gupta, Case and Simulations in Marketing, Galgotia.
Jayachandran, Marketing Management, Tata McGraw Hill, 2003.
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