Four Factors That Affect Our Buying Decisions

Understanding the factors that influence consumer behaviour is essential for understanding and effectively communicating with customers. While it is difficult to predict the exact response due to complexities and variables within each factor, studying consumer behaviour can help a brand effectively communicate with its intended audience.

This behaviour can be studied by analysing consumers’ motivations, attitudes and beliefs towards the products they consume. A consumer behaviour analysis is a systematic determination of the factors which influence the manner in which a consumer decides upon product choice. Such factors may include promotional techniques employed by marketers to persuade consumers to buy their products, actual prices charged by sellers at which to purchase those products, alternative brands available at similar or equivalent values, etc.

In order to cater to the global market, companies need to keep in mind four basic factors that influence consumer behaviour:

• Cultural
• Social
• Psychological
• Economic

Cultural

Consumer behaviour is influenced by culture, which includes traditions and customs, food, languages and beliefs. One must identify these cultural beliefs to be able to target consumers who are close to them.

Learning about the target market’s cultural properties can help you understand how brands are perceived and can help with marketing and product positioning. We will look at the different factors that affect consumers’ behaviour, including their cultural properties, needs and wants.

Social

The family plays a major role in defining their personality, beliefs, etc. This gives shape to their choices and preferences. As one’s family includes people they see on a daily basis, it is more likely that a family together discusses which products and services must be purchased, e.g., cars, refrigerators, etc. A person’s role in the family also has a big impact on his purchases.

A consumer’s friends also tend to make a big impact on the products they purchase, as the influence of peers is like no other. Based on a study in Turkey, 46% of the respondents believed that the most important factor when buying goods and services were the environment and friends.

To appeal to all sorts of age groups, brands must avoid stereotyping, and reward loyalty and positive reviews (and at the same time, respond to negative reviews immediately and rectify the same).

Psychological

The four most important factors affecting consumer behaviour are needs, wants, emotions and benefits. On top of all these drivers, businesses should also consider brand perception, which is the overall view of a particular product or company that they have formed after exposure to them. Businesses should also consider how all these factors can be properly managed to market their products effectively.

The perception of a brand plays a major role in consumer choices. For example, Apple is seen as a premium brand, and buyers believe that using its products makes it seem that they belong to a higher social class/economic bracket.

Selective attention is a key factor in determining consumer behaviour. The customer is constantly bombarded with ads for products and services. In order to stand out from the crowd, companies often use stimuli such as sound and colour.

Selective distortion refers to the tendency of customers to distort information based on their product beliefs (previous experience with the brand and marketing effort). In this case, strong brands or those with great marketing presence can put out ambiguous advertisements; a customer who has seen the brand’s ads will still be able to perceive it in a positive light.

Consumers tend to retain information that supports their beliefs. In order to make their brand get noticed, companies tend to use repetition.

Economic

Economic factors play a massive role in consumer behaviour, i.e., one’s financial position also dictates their purchases. For example, the CEO of a company is more inclined to buy luxury goods as compared to a clerk. Thus, one’s disposable income defines their purchasing power. It is not just an individual’s purchasing power that matters, a family income is also taken into consideration

Marketing and advertising are critical for ensuring that the consumer receives the benefits of a company’s product. This article discusses the most important factors affecting consumer behaviour in both product merchandising and advertising strategies.