5 Major Factors Affecting Consumer Behavior

When you think of consumer behavior, what's the first thought that pops into your head? Most people believe that this type of behavior is influenced mainly by ads, commercials, etc.

However, here's an interesting idea. Consumers' wants and needs are what drive any good marketing plan. It's the other way around.

Undoubtedly, you may have wondered why, for example, your taste in shopping is so different from your sibling's. In particular, when you consider that you grew up in the same household. Most likely, you even went to the same schools. Then why did you end up loving stores like Hot Topic and your sibling was all about stores like Hollister?

But many different things influence consumer behavior. You're probably not even aware of most of them. This article will explore the factors that influence how and why you shop and why it's essential to understand this as a business owner.

What is Consumer Behavior?

Consumer behavior consists of how consumers' emotions, attitudes, and preferences affect buying behavior. It's the study of customers and how they behave while deciding to buy a product.

Indeed, the study of consumer behavior is essential for marketers to understand the wants and needs of consumers. If you know the likes and dislikes of your consumers, then you can design a specific marketing strategy for them.

Consumers have different attitudes towards shopping. Understanding their thought processes is necessary for an effective marketing strategy. Also, understanding your consumers will help to find success for your current products and any future ones.

If a company fails to understand the reaction of a consumer towards a product, there are high chances of product failure. - Clootrack

Here is a short video that explains a bit further about the importance of understanding consumer behavior:

Factors Influencing Consumer Behavior

Five factors affect or influence consumer behavior. These factors help determine whether a person will purchase an item. Following are these five fundamental factors:

• psychological
• social
• cultural
• personal
• economic

1. Psychological Factors

In particular, human psychology significantly affects consumer behavior. However, it isn't easy to measure these types of factors.

These factors are:

• Motivation: The drive to get what we need. Every person has different needs. However, some needs are more pressing than others.
• Learning: It's how consumers change their behavior after they gain information. This process affects how you shop and what you buy.
• Attitudes & Beliefs: These are "mental positions" or ideas. Marketers aim to change beliefs and attitudes to positive ones. They do this by designing unique campaigns.
• Perception: This is when a customer collects information about a product and then gives it meaning. Two people can look at the same product yet see something very different.

Psychological factors have a considerable extent impact on consumer behavior and the factors can be seen while purchasing an object or product. - Louis Hill

2. Social Factors

Without a doubt, humans are social animals. We feel the need to it in and feel accepted. One way we do this is by imitating others. This includes imitating their purchases.

Social factors include the following:

• Family: Certainly, family greatly influences buyer behavior. Therefore, companies are interested in which family members have the most influence over purchases.
• Reference Groups: These are groups a consumer identifies with and may want to join. For example, there are social groups, workgroups, or close friends. The influence will be more significant if the product is visible, such as a purse or a car.
• Roles and Status: A role consists of the activities a person is expected to do, while status is a person's standing within society.

For example, if a woman works as a finance manager, she plays two roles: finance manager and mother. Therefore, she is largely influenced by her role and will choose products that communicate it. - Bakkah Learning

3. Cultural Factors

Cultural factors have a strong influence on consumer behavior. These factors are the values and ideologies of a community or group of individuals.

These factors are:

• Culture: The influence of culture varies from place to place. This means marketers have to be very careful in analyzing the culture of different groups, regions, and countries.
• Subculture: Marketers can use these groups by segmenting the market into several small portions. For example, they can design products according to the needs of a  geographic group.
• Social Class: Consumers in the same social class show similar purchasing behavior. Therefore, marketing activities can be tailored to fit different social classes.

4. Personal Factors

Personal factors, of course, vary from person to person. Such factors create different judgments and affect consumer behavior.

Here are the factors that influence our shopping tendencies:

• Age: Needless to say, each life-cycle involves different buying choices. For example, teenagers are more interested in buying the latest trends in clothes. In contrast, middle-aged people might be more interested in purchasing a family car.
• Occupation and Lifestyle: these two factors are important determinants of consumer behavior. An example of this is eating habits. A person living a vegetarian lifestyle will buy vegan products, while a "meat-eater" will be fine purchasing products containing meat.
• Personality: There are "Big Five" personality traits. Marketers determine the consumer behavior for a product or service based on these traits.

5. Economic Factors

Finally, let's talk about the factors that most affect consumer behavior. Economic factors have a big impact on consumers' purchasing decisions.

There are several economic factors, but we've narrowed them down to these three:

• Personal Income: When a person has a higher disposable income, the purchasing power goes up.
• Country Economic Situation: Consumers have higher buying power when a country has a strong economy. On the contrary, consumers' buying decisions become limited when a country's economy is struggling.
• Liquid Assets: When consumers have higher liquid assets, it gives them more confidence to buy luxury goods.

The Power of Consumer Behavior

Even though most of the time we don't notice, consumer behavior plays a big part in our daily lives. Therefore, it's always necessary for business owners to have the best marketing strategies targeted to their consumers. Starting from the type of coffee you buy in the morning to the dinner you order at night, each purchase has a process behind it with a whole list of factors that led to that decision.

Let's talk.

Reach out to us on Facebook or LinkedIn and tell us what strategies you use tailored for consumer behavior. Or follow us on Instagram for a bite-size version of our blog.

       

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