Factors Influencing Consumer Behaviour
There are many factors and determinants that 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 consists 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.
ii) Sub-culture: A culture has several sub-cultures which assist the marketers to easily recognise and socialise with its customers. 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 want. Sub-cultures are unique and diverse, that provide valuable insights into the preferences, behaviours, and attitudes of different consumer groups.
iii) Social Class: Mostly, 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 similar and permanent societies. These classes share similar behaviour, interests, and values.
i) 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.
2) Social Factors
i) Reference Group: A person or a group who is identified as a reference to an individual, defining the fundamental or fixed attitudes, 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.
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: A person performs different roles and has different statuses in various groups such as family, organisation, 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: 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.
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.
4) Psychological Factors
i) Motivation: It 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.
ii) Perception: It 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.
iii) Learning: It 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 take wise decisions.
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.