INTRODUCTION

Consumer behavior is a study of the emotions, attitudes and tastes of the

individuals,groups or associations related with the use and disposal of goods
and services. It consist of the tastes and preferences of the consumers that
have an effect on their buying behavior. The study of the behavior of
the consumers consists of investigation of the individual qualities such as
demographics, personality traits and the market trends that helps in the
determination of people’s wants and consumption patterns. Consumer
behavior studies how the individuals decide to use their resources
such as time and money on the aspects related to
consumption(Schiffman et al., 2014)

Consumer Behavior behaviour refers to the actions and decision processes

of people who purchase goods and
services for personal consumption.”- James F Engel, Roger D Blackwell and
Paul Minia

The behaviour that consumers display in searching for, purchasing, using,

evaluating and disposing of, if products and services that they expect will
satisfy their needs.Leon G Schiffman and Leslie Lazar Kanuk

Learning Objectives:

 Demonstrate the importance of understanding the behaviour ofcustomers

and consumers in formulating marketing strategy.
 Describe the different factors influencing the behavior of consumers.
 Demonstrate the application of a consumer decision making scenario.

Consumer behavior is influenced by many different factors. A marketer should

try to understand the factors that influence consumer behavior. Here are 5
major factors that influence consumer behavior:

1. Psychological Factors
Human psychology is a major determinant of consumer behavior. These
factors are difficult to measure but are powerful enough to influence a buying
decision.

Some of the important psychological factors are:

Motivation

When a person is motivated enough, it influences the buying behavior of

the person. A person has many needs such as social needs, basic needs,
security needs, esteem needs, and self-actualization needs. Out of all
these needs, the basic needs and security needs take a position above all
other needs. Hence basic needs and security needs have the power to
motivate a consumer to buy products and services.
 Perception

Consumer perception is a major factor that influences consumer behavior.

Customer perception is a process where a customer collects information
about a product and interprets the information to make a meaningful
image of a particular product.

When a customer sees advertisements, promotions, customer reviews,

social media feedback, etc. relating to a product, they develop an
impression about the product. Hence consumer perception becomes a
great influence on the buying decision of consumers.

Learning

When a person buys a product, he/she gets to learn something more

about the product. Learning comes over a period of time through
experience. A consumer’s learning depends on skills and knowledge.
While skill can be gained through practice, knowledge can be acquired
only through experience.

Learning can be either conditional or cognitive. In conditional learning the

consumer is exposed to a situation repeatedly, thereby making a
consumer to develop a response towards it.

Whereas in cognitive learning, the consumer will apply his knowledge and
skills to find satisfaction and a solution from the product that he buys.

Attitudes and Beliefs

Consumers have certain attitudes and beliefs which influence the buying
decisions of a consumer. Based on this attitude, the consumer behaves in
a particular way towards a product. This attitude plays a significant role in
defining the brand image of a product. Hence, marketers try hard to
understand the attitude of a consumer to design their marketing
campaigns.

2. Social Factors

Humans are social beings and they live around many people who influence
their buying behavior. Humans try to imitate other humans and also wish to be
socially accepted in the society. Hence their buying behavior is influenced by
other people around them. These factors are considered as social factors.

Some of the social factors are:

Family

Family plays a significant role in shaping the buying behavior of a person.

A person develops preferences from his childhood by watching family buy
 products and continues to buy the same products even when they grow
up.

Reference Groups

A reference group is a group of people with whom a person associates

himself. Generally, all the people in the reference group have common
buying behavior and influence each other.

Roles and status

A person is influenced by the role that he holds in the society. If a person

is in a high position, his buying behavior will be influenced largely by his
status. A person who is a Chief Executive Officer in a company will buy
according to his status while a staff or an employee of the same company
will have different buying pattern.

3. Cultural factors

A group of people is associated with a set of values and ideologies that

belong to a particular community. When a person comes from a particular
community, his/her behavior is highly influenced by the culture relating to that
particular community.

Some of the cultural factors are:

Culture

Cultural Factors have a strong influence on consumer buying behavior.

Cultural Factors include the basic values, needs, wants, preferences,
perceptions, and behaviors that are observed and learned by a consumer
from their near family members and other important people around them.

Subculture

Within a cultural group, there exists many subcultures. These sub-cultural

groups share the same set of beliefs and values. Subcultures can consist
of people from different religion, caste, geographies and nationalities.
These subcultures by itself form a customer segment.

Social Class

Each and every society across the globe has the form of social class. The
social class is not just determined by the income, but also other factors
 such as the occupation, family background, education and residence
location. Social class is important to predict the consumer behavior.

4. Personal Factors

Factors that are personal to the consumers influence their buying behavior.
These personal factors differ from person to person, thereby producing
different perceptions and consumer behavior.

Some of the personal factors are:

Age

Age is a major factor that influences buying behavior. The buying choices
of youth differ from that of middle-aged people. Elderly people have a
totally different buying behavior. Teenagers will be more interested in
buying colorful clothes and beauty products. Middle-aged are focused on
house, property and vehicle for the family.

Income

Income has the ability to influence the buying behavior of a person. Higher
income gives higher purchasing power to consumers. When a consumer
has higher disposable income, it gives more opportunity for the consumer
to spend on luxurious products. Whereas low-income or middle-income
group consumers spend most of their income on basic needs such as
groceries and clothes.

Occupation

Occupation of a consumer influences the buying behavior. A person tends

to buy things that are appropriate to this/her profession. For example, a
doctor would buy clothes according to this profession while a professor
will have different buying pattern.

Lifestyle

Lifestyle is an attitude, and a way in which an individual stay in the

society. The buying behavior is highly influenced by the lifestyle of a
consumer. For example when a consumer leads a healthy lifestyle, then
the products he buys will relate to healthy alternatives to junk food.

5. Economic Factors

The consumer buying habits and decisions greatly depend on the economic
situation of a country or a market. When a nation is prosperous, the economy
is strong, which leads to the greater money supply in the market and higher
purchasing power for consumers. When consumers experience a positive
economic environment, they are more confident to spend on buying products.
Whereas, a weak economy reflects a struggling market that is impacted by
unemployment and lower purchasing power.

Economic factors bear a significant influence on the buying decision of a

consumer. Some of the important economic factors are:

Personal Income
When a person has a higher disposable income, the purchasing power
increases simultaneously. Disposable income refers to the money that is
left after spending towards the basic needs of a person.

When there is an increase in disposable income, it leads to higher

expenditure on various items. But when the disposable income reduces,
parallelly the spending on multiple items also reduced.

Family Income

Family income is the total income from all the members of a family. When
more people are earning in the family, there is more income available for
shopping basic needs and luxuries. Higher family income influences the
people in the family to buy more. When there is a surplus income
available for the family, the tendency is to buy more luxury items which
otherwise a person might not have been able to buy.

Consumer Credit

When a consumer is offered easy credit to purchase goods, it promotes

higher spending. Sellers are making it easy for the consumers to avail
credit in the form of credit cards, easy installments, bank loans, hire
purchase, and many such other credit options. When there is higher credit
available to consumers, the purchase of comfort and luxury items
increases.

Liquid Assets

Consumers who have liquid assets tend to spend more on comfort and
luxuries. Liquid assets are those assets, which can be converted into cash
very easily. Cash in hand, bank savings and securities are some
examples of liquid assets. When a consumer has higher liquid assets, it
gives him more confidence to buy luxury goods.

Savings

A consumer is highly influenced by the amount of savings he/she wishes

to set aside from his income. If a consumer decided to save more, then
his expenditure on buying reduces. Whereas if a consumer is interested in
saving more, then most of his income will go towards buying products.

CONSUMER DECISION MAKING PROCESS

Like other companies, the consumer decision making process in
this service company will include the following steps:

 Pre-purchase stage
 Consumption stage
 Post-purchase stage

Consumer follows this decision making process to satisfy his need and wants.
The first step is always a problem and there is a need for the solution of such
problem service, then the consumer collects information for the quenching
such need, then the different alternatives are evaluated and the best one is
selected from the many.In the end, the consumer evaluates the quantum of
satisfaction generated from the purchase or use of the service.

Example:
In the first step there will be a problem and in the present case, the consumer
will be hungry.Next, he will search for restaurants to quench his hunger. He
will do so by taking into consideration the resources available to him such as
time and money.Then he will evaluate the different restaurants on the basis
of his available resources.After analyzing and evaluating the different
alternatives, he will make the purchase decision.
References:

Megha Dhiman (2020/2021). Consumer Behavior

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