Determinants & Factors influencing Consumer Behaviour

In a Market, different consumers have different needs. As all consumers are unique they exhibit different behaviour while making a purchase decision due to various factors influencing consumer behaviour. Therefore it is important to understand the various factors influencing consumer behaviour.

Factors Influencing Consumer Behaviour

The Various factors influencing Consumer Behaviour can be classified into 4 categories:

• Economic Factors
• Personal Factors
• Cultural and Social Factors
• Psychological Factors

Economic Factors influencing consumer behaviour:

• Personal Income – Total Income of the consumer
• Discretionary Income – Income available to a consumer after deducting taxes and basic cost of living.
• Disposable Income – Income available with consumer to spend according to his wishes
• Family Income – Income of the family. Lower income families have less demand than prosperous families.
• Consumer Expectations Regarding Future Income
• Availability of Liquid Assets with the consumer
• Consumer Credit – Availability of consumer credit, Credit policies
• Level of Standard of Living

A consumer demands more and spends more with increase in his income or expectations of future profits or availability of liquid cash or availability of credit but saves and demands less in its absence. The nature of consumption and buying pattern of a consumer is also affected by the income of the family and the level of standard of living. 

Personal Factors influencing Consumer Behaviour:

• Age – People of different ages have different needs.
• Occupation – Professionals, businessman, salaried-workers have different demands.
• Life Cycle Stage – Newly born, Teenager, Bachelor, Married, Parent, Grand Parent
• Lifestyle – Achievers, Strugglers, Strivers, Makers
• Personality – Aggressive, Shy, Introvert, Extrovert, Conservative, Experimental
• Self-Concept – One`s perceptions towards themselves.

Cultural Factors affecting Consumer Behaviour

• Culture – Culture is basically the way of living and thinking pattern that is followed from generation to generation in a society. It includes knowledge, belief, traditions, morals, values, customs and other such habits that are acquired by people as members of a society.

Eg. Indian culture is entirely different from cultures of other Asian, Arabic and Western countries.

• Sub-culture – Sub-culture is a segment of culture which helps a marketer to know another person’s culture either psychologically, socially or through mass identification. Sub-culture consists of a group of people within a culture who exhibit similar buying behaviour and have similar believes.

E.g. Within India, buying behaviour of muslims of the north India can be differentiated form the muslims of the south India

• Social class – Social class segments the market on the basis income criteria and standard of living. It refers to divisions of members of a society on the basis of education, occupation, income etc. Usually people belonging to the same social class have similar preferences in case of choice of residence, entertainment, luxary products etc.

E.g. Buying behaviour of the upper class can be easily differentiated from the middle and lower class.

Social Factors influencing Consumer Behaviour 

Social Group – A group is any collection of individuals with similar interests, opinions and activities. An individual draws cues regarding consumption and disposal of products from various social groups he belongs to. The various social groups an individual forms a part of are:

• Reference Group – It refers to all those people which directly affect the purchase pattern and decision of a consumer as they serve as a point of reference or comparison for the consumer while making a purchase decision.
• Contractual Group – It includes friends, family, peers who have a direct and daily face to face interaction with an individual. They are the most important source of influence on consumer behaviour.
• Avoidance Group – A group of people that have a negative impact on a consumer. A consumer disassociates himself from such a group and avoid using products and services used, recommended or promoted by the avoidance group.
• Aspirational Group – It includes film stars, TV celebrities, Sport stars etc. whom a consumer aspires to be. A consumer wants to associate himself with people he aspires and uses products and services used, recommended and promoted by them.

Opinion Leaders – It refers to a key individual in a group which influences the behaviour of members of the group by providing them relevant information about new trends and products in the market. 

Role and Status – Every person plays many roles in the society i.e. employee to his boss, parent to his children, referrer for young ones, advisor to peers etc. and their buying pattern depends upon the role they play in the society. People also select and buy products according to their status in the society. Social status of a person refers to his/her position in the society depending upon his income, occupation, education etc.

E.g. CEO of a company would prefer to buy branded products from big stores, while a worker in the same company may prefer value for money products from nearby stores.

Psychological Factors affecting Consumer Behaviour:

Customers behave differently towards the same marketing mix (product) due to their respective psychological makeup. The psychological factors that affect consumer behaviour are:

• Motivation – A motive is an internal force that drives a person to do something i.e. fulfill a need, achieve a goal, solve a problem. Different motives of a consumer can be understood through Maslow Hierarchy of needs. All consumers react differently towards a product depending upon their position in the hierarchy. i.e. an individual will first satisfy his basic needs and then move upward in the hierarchy with satisfaction of each want.
• Involvement – It refers to the amount of interest or importance a consumers shows towards a product. A consumer may have high or low involvement in a product.

For e.g. a cricketer will give very high importance and will be highly involved while purchasing a cricket bat while he may have very low involvement and interest when purchasing luggage bags.  

• Perception – It is a process of selecting, organizing, and interpreting information from our internal and external environment to form a meaningful picture. All consumers perceive the same product differently according to their own perceptions.

For e.g. Wrestling is perceived differently by different people, some perceive it a meaning less fighting while some consider it a sport.

• Learning – It is a process which brings a permanent change in the behaviour of a person. People generally learn through past experiences and develop a certain behaviour towards a product or service.
• Personality – It refers to the total of all physical, mental and moral characteristics of a person. Customers buy products that suit their personality, for example some people prefer wearing formal clothes some like to wear casual clothes depending upon what suits their personality.
• Lifestyle – A person`s lifestyle is made up of his activities, opinions and interests. Lifestyle of a person also depends upon his position in the life cycle stage i.e. Teenager, Bachelor, Married etc.

E.g. while teenagers or children are care free and majorly spend on recreation activities and Parents are more money conscious and majorly spend on consumer durables. 

• Attitude – Attitude is a person`s predisposition to act favourably or unfavourably towards a product, service, event, people etc. It is the way a person thinks or feels about an object. Consumers develop a positive or negetive attitude towards a product or service due to a marketing stimuli, situational variables, experience or advertising and then decide upon an intended action for that product or service.

For E.g. entrepreneurs attitude towards risk, some are risk takers some like to play it safe

Determinants of Consumer Behaviour

Factors influencing consumer behaviour can also be classified into Individual Determinants and External Determinants. The individual determinants shape and determine the needs and motives of a consumer and direct him towards a purchase, while the external determinants indirectly influence the purchase process by filtering through individual determinants.