Factors Influencing Consumer Behaviour

Many factors and determinants significantly impact customers purchasing behaviour. Understanding these factors is essential for businesses to develop effective marketing strategies and improve their sales performance. By understanding these factors, businesses can tailor their products and services to meet customers’ needs and preferences, ultimately leading to increased customer satisfaction and loyalty.

Some of the key factors that influence customers’ buying behaviour include their personal preferences, needs, and values. Additionally, external factors such as social trends, economic conditions, and cultural norms also play an influential role in shaping customers’ purchasing decisions.

Some of the key factors that influence customer buying behaviour include personal preferences, cultural background, social status, economic conditions, and psychological factors. For instance, customers may be more likely to purchase products that align with their values and beliefs or those that are associated with a particular social group. Economic conditions such as income, employment status, and inflation can also affect customers’ purchasing power and decision making.

Moreover, psychological factors such as perception, motivation, and attitude can play a significant role in shaping customers’ buying behaviour. For example, customers may be motivated to purchase products that fulfil their needs or desires, or they may have a positive or negative attitude towards a particular brand or product.

To gain a deeper understanding of customers’ buying behaviour, companies can conduct market research and analyze customer data. This information can help businesses tailor their marketing efforts to satisfactorily meet the needs and preferences of their target audience.

By taking a customer-centric approach and focusing on the factors that influence their purchasing behaviour, companies can improve their sales performance and build stronger relationships with their customers.

There are various factors and determinants which directly influence customers’ buying behaviour. They are as follows:

1) Cultural Factors

i) Culture

Culture is the key element for determining an individual’s buying behaviour. The cultural factors influencing the features of a society consist of earned values, norms, rituals, and symbols. The values, beliefs, customs, and traditions of a particular society influence the way people make their buying decisions. For example, a kid attains a defined set of values and behaviours from his family, friends and key institutions. In the U.S., a child is open to adapting values such as individualism, freedom, external comfort, humanitarianism, efficiency, practicality and youthfulness.

Every society possesses its norms and values that have been established over time. Cultural norms are passed down from generation to generation and were created by our forefathers to shape human behaviour. Culture stands as the most influential factor impacting consumer behaviour. It affects people’s choices in clothing, eating habits, residence, and more. For example, in India, the tradition of eating with hands and fingers prevails, while spoon and fork are still considered a part of Western culture in many households.

Culture in every society plays an important role in shaping consumer buying patterns. In Western countries, consumers are accustomed to full-service supermarkets, leading to observable differences in shopping practices. In India, people are accustomed to purchasing from smaller, locality-based shops despite large departmental stores and supermarkets in cities.

Cultures are not static; they change slowly or rapidly depending on the society. Therefore, from a marketer’s perspective, it is important to take note of cultural shifts. Traditionally, in India, the role of women in a household was confined to household duties and raising children. However, this role has undergone significant changes in urban India in the past three decades. Many women have pursued higher and technical education, entering various professions. Consequently, dual-income households have proliferated, and buying power has also increased. Men are learning to share household responsibilities, assisting women in managing everyday family affairs.

The need to save time for women during routine work at home has led to increased use of appliances such as dishwashers, washing machines, microwave ovens, etc. Marketers have taken note of these changes and are introducing ready-to-eat food items, heat-and-serve options, etc., to alleviate the burden on working women. Marketers are thus always concerned about cultural shifts and are eager to discover new products and services consumers may desire.

ii) Sub-culture

Culture has several sub-cultures which assist marketers to recognise and socialise with their customers easily. It includes religions, nationalities, racial groups, and geographic regions. Many times, these sub-cultures are defined as a market segment and marketers offer products based on their needs and wants. Sub-cultures are unique and diverse, that provide valuable insights into the preferences, behaviours, and attitudes of different consumer groups.

Subcultures exist within a given dominant culture. In India, if we broadly classify culture as Western and Indian, subcultures can be identified as South Indian, Punjabi, Bengali, Kashmiri, etc. These subcultures impact dietary habits, clothing, ceremonies, and more.

A subculture can influence purchase behaviour depending on the relevance of the product category. For instance, cosmetic items are popular among all women, irrespective of their subculture. Given India’s diverse religious landscape, religious groups can also be regarded as subcultures. When McDonald’s entered the Indian market, they couldn’t market their famous product, the Big Mac (which contains beef), because 80 per cent of the Indian population, predominantly Hindu, abstains from beef consumption. Instead, McDonald’s introduced ‘Big Maharaja,’ a product containing mutton. Similarly, in India, where a sizable population follows Islam and avoids pork consumption, McDonald’s does not promote products containing pork.

Certain toothpaste brands claim to be free from animal products to cater to the needs of vegetarian subcultures. Marketers have also identified age subcultures, as individuals of different age groups exhibit distinct lifestyles and needs. A substantial proportion of the Indian population belongs to the above 55 age group, and numerous healthcare products are targeted at this demographic.

Teenagers, characterized by a carefree attitude and rebellion against authority and traditional beliefs, form another significant subculture. This nature influences their purchasing behaviour, making this market attractive to marketers. Preferences and tastes formed during these years can significantly influence purchases throughout their lives.

Gender subculture is also crucial, with home appliances traditionally associated with women. Marketers often target these products toward the female population. However, many products are now breaking away from traditional gender typing, including financial services, cars, mobile phones, computer games, and equipment designed with women’s preferences in mind.

iii) Social Class

Social class defines the ranking of individuals in society into lower, middle, and upper classes based on their income levels and purchasing power. Members of each class hold a certain status determined by their power and prestige. Consumers within the same social class tend to share similar desires, attitudes, preferences, and possessions.

Social class significantly influences people, shaping and manifesting common behavioural patterns. The homes we live in, the clothes we wear, the cars we own, and the watches we choose become indicators of our social class. The items consumers purchase serve as symbols that convey their identity and social standing to others. Marketers can target individuals within each social class segment who aspire to elevate their status by acquiring possessions that symbolize distinction enjoyed by those in higher social status rungs.

Every individual in society is a part of some social class. These social classes are defined based on the caste system which indicates specific roles, which cannot be changed. Often, the caste system is transformed into a social class. Social classes are comparatively equal and permanent societies. These classes share similar behaviours, interests, and values.

iv) Age and Stage in the Life Cycle

The requirements of a person change with his age. Different stages in life need different sets of products. For example, in childhood, baby food is consumed and in youth, healthy food is consumed. Things like the taste in clothes, home decor and recreational activities are also related to age. Therefore, consumption pattern is created based on the family lifecycle.

i) Reference Group

A person or a group who is identified as a reference to an individual, defining the fundamental or fixed attitude, values or behaviours, is known as a ‘reference group‘. Being a social class member, an individual always compares his abilities and opinions with the defined abilities of a reference.

A reference group refers to people with whom an individual identifies and from whom they absorb various values, attitudes, or behaviours. Peer influence plays a significant role in consumer behaviour; most belong to one or several reference groups. The primary group we associate with is our family, and other examples include school or college-related groups, office groups, and club memberships.

Groups play an important role in shaping consumer behaviour by imparting socially acceptable norms. They have a significant impact on patterns of product use and their consumption. In China, for instance, the cultural practice of purchasing live fish is so deeply rooted that the marketing of frozen fish has struggled to establish itself. The norms and values embedded within a reference group are so deeply ingrained that challenging or countering them proves difficult.

ii) Family

The buyer’s behaviour is largely influenced by his family members. Family is the main buying organisation in society.

There are two types of families, as given below:

a) Family of Orientation

An individual attains an orientation from parents towards their religion, politics, self-worth, etc. It is usually observed that grown-up children who are living with regardings signify them as their ideal reference group.

b) Family of Procreation

In this type of family, the buying behaviour is affected by every family member such as a spouse, children, parents, etc. They purchase products considering the requirements of every individual in a family.

iii) Roles and Status

Everyone assumes various roles, such as being a son or daughter, husband or wife, mother or father, employee, teacher, or employer. These general roles significantly impact a person’s buying behaviour. For example, a father who is also a teacher may need a laptop computer, while his daughter may desire a two-wheeler for commuting to college. As a result, the father might delay his decision to purchase the laptop. The evolving roles of individuals within a family also influence the types of purchases and buying behaviour.

Both husband and wife may jointly decide on the purchase patterns regarding durable goods and household items. In modern times, children play an increasingly significant role in family purchases.

A person performs different roles and has different statuses in various groups such as family, Organization, clubs, etc. The activity performed by a person is defined as a role and every role carries a status. For example, an RBI manager has more status than a sales manager and a sales manager has more status than a receptionist. This is because of the difference in their income, which directly affects the status of the individuals. Therefore, the buying decision of an individual is largely based on their role and status in society.

3) Personal Factors

i) Age and Stage in the Life Cycle

ii) Occupation and Economic Circumstances

The consumption pattern of an individual is also affected by the occupation. For example, a blue-collar employee will buy necessary items like formal clothes, office shoes or a lunchbox. While, a company head will buy luxury items like air travel tickets, a country club membership, or a large sailboat. Here, marketers target those consumers who have a high amount of interest in their products. The selection of products also varies regarding economic circumstances such as monthly income, savings, purchasing power, assets, debts, etc.

iii) Lifestyle

Lifestyle is a certain way in which an individual lives his life. It may comprise individuals’ activities, interests, opinions, etc. The lifestyle also depicts how a person interacts with their surroundings. A marketer needs to find out the product which is most suitable for customers’ lifestyles. For example, a person belonging to the upper class will buy only luxury cars because it suits his lifestyle.

iv) Personality

Personality is an individual characteristic of a person. These are distinctive psychological features that lead to relatively constant and long-term responses to the market environment. Personality can help define the consumers’ behaviour but the type of personality should be identified precisely and there should be a strong relation between the personality type and the products.

Personality characteristics help us describe and differentiate individuals. Individuals may be classified as nervous, ambitious, outspoken, timid, shy, bold, etc. An individual’s personality is shaped by inherited traits and interactions with the environment, moderated by situational conditions. Marketers leverage various themes in advertising rooted in a psychoanalytic understanding of personality, such as fantasy, wish fulfilment, aggression, and escape from life’s pressures. Examples of product categories employing these themes include:

Hair dryers.
Perfumes.
Skincare products.
Ready-to-wear garments.
Even some brands of computers, laptops and cellular phones.

4) Psychological Factors

i) Motivation

Motivation is a reason to act in a particular way. The reasons can be physiological or psychological. which usually arise out of human needs and wants. These physiological needs can be hunger, thirst, and discomfort while the psychological needs can be self-esteem, recognition, or belongingness. A need acts as a motive when it reaches a certain level of intensity then it pushes a person to act in the same direction.

When people perceive a need for something, they enter a motivated state; for example, upon encountering an advertisement claiming that a product contains ‘Extra calcium,’ essential for the growth of children’s bones, a health-conscious housewife may be motivated to switch to that brand.

Multiple motives can influence purchase behaviour simultaneously. Consider a middle-income individual who owns a two-wheeler but finds travelling with the entire family challenging. Such a person aspires to purchase a car for added comfort. Simultaneously, another individual who commutes to the office on a two-wheeler may be motivated to buy a vehicle after receiving a higher position at work, as owning a car becomes a matter of prestige.

The attainment of pleasure from consuming a product or service is often linked to emotions or fantasies. For example, motorcycle advertisements emphasizing the slim, sleek models target consumers who, despite already owning a similar product, seek the pleasure of a new one. This is known as a hedonic motive.

ii) Perception

Perception is a process or a way of looking at a person or a thing. It does not just depend on the physical stimuli rather it also involves the reactions received from the surroundings and the thinking process within the individual. All these factors combine to form a perception.

Perception is an individualized process influenced by internal factors like an individual’s beliefs, experiences, needs, moods, and expectations. Although we all possess the same sensory organs for seeing, hearing, touching, smelling, and tasting, the degree to which we attend to information, how we organize it, and how we interpret it varies among individuals. This variability is termed perception and comprises three distinct processes.

a) Sensation: This is the immediate direct response of the sense organs to stimuli such as brand names, packaging, advertisements, etc.

b) Information Selection: This involves paying attention to a specific stimulus. Individual psychological factors such as personality, needs, expectations, and motives influence this process. Consumers focus on stimuli relevant to their needs or interests while filtering out irrelevant ones.

c) Interpreting the Information: This refers to organizing, categorizing, and interpreting information registered by the senses. It may be influenced by selective attention, selective comprehension, or selective retention, all of which impact the interpretation process.

iii) Learning

Learning is a process of acquiring skills, knowledge and experiences. Learning leads to changes in one’s behaviour mainly with increasing knowledge and experience. It generates out of the drives, stimuli, responses, cues and reinforcements: Learning enables one to make wise decisions.

Consumer learning is the process through which individuals acquire knowledge and experience related to purchasing and consuming goods, applying this knowledge to shape their future buying behaviour. For example, an aqua farmer aiming to boost shrimp production experiences an internal stimulus called a drive. This drive transforms into a motive when it centres on a specific stimulus object, such as discovering a feed that enhances growth. In response to this stimulus, the farmer purchases and uses the feed positively.

Marketers must tap into consumers’ emotions and perceptions to elicit favourable reactions to their products and services. Some companies adopt policies like offering a money-back guarantee if the product fails to satisfy, demonstrating a willingness to bear the costs of customer complaints to establish long-term relationships with buyers.

Upon discovering that the feed promotes growth and increases production, the farmer experiences satisfaction. However, the farmer will be dissatisfied if the feed exceeds expectations. This psychological state, known as ‘cognitive dissonance,’ is something market-oriented organizations address through specific policies.

iv) Beliefs

Beliefs are attained through actions and learning which strongly influences the buyer’s behaviour. It is an idea that an individual accepts as being true. Belief depends upon one’s faith and trust. and opinion for a person or a product. For example, customers have a lot of faith or belief in goods and services delivered by Tata Group.

v) Attitudes

Every individual experiences and behaves in specific ways regarding a particular object, person, or service. This is referred to as a person’s attitude. Attitudes greatly influence consumer behaviour, as people hold attitudes toward various factors such as products, brands, companies, celebrities, and advertisements. Marketing managers employ methods to measure consumer attitudes by creating attitude scales.

vi) Self-Image

An individual’s self-image is how they perceive themselves—a fusion of their ideal self, how they believe others perceive them, and how they are.

Instant coffee was first introduced in 1949 after consumer testing. Initially, it seemed that it would be widely accepted because consumers couldn’t distinguish which cup contained instant coffee when given unmarked cups. However, when Nestle Company launched its Nescafe brand, it was disappointed by the response. In a follow-up research, a direct question, “Why don’t you use instant coffee?” was asked. Most responses were, ‘I do not like the taste.’ Despite positive pre-launch marketing results, Nestle employed a psychologist to pose the question in less direct ways to understand underlying motives.

Two shopping lists, identical except for one item (coffee—one with Nescafe instant coffee and the other with drip grind coffee), were prepared and given to two sets of sample respondents, each consisting of 100 people. Respondents were then asked to infer the characteristics and personality traits of the woman who wrote the shopping list. The woman who bought instant coffee was described as lazy, poorly organized, careless with money, an inadequate housewife, and a mother. Respondents were projecting their feelings toward instant coffee. In other words, the rejection of instant coffee was not due to poor taste but rather the respondents’ concern about how others would perceive them if they used a convenience product like instant coffee. This study on buyer behaviour illustrates the impact of customer perceptions and motivations on purchasing decisions.

Factors Influencing Consumer Behaviour