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FACTORS AFFECTING CONSUMER BEHAVIOUR ASSUMING AND FULFILLING CREDIT LIABILITIES IN LATVIA
Ilona Lejniece
University of Latvia, Latvia, lejnieki@apollo.lv

Abstract
The aim of the research paper is to determine the factors which affect the behaviour and decision making of consumers when assuming credit liabilities. To achieve this objective the questionnaire as a method of qualitative analysis was worked out and employed. The questionnaire was used to reveal the motivation of consumers behaviour regarding credit liabilities. The data obtained during the research process about the parameters of this phenomenon characterize the each part of the unit analysed. Consumer behaviour and decision making process is affected both by internal and external factors. The group of internal factors comprises psychological and personal factors of consumer behaviour. The group of external factors affecting consumer behaviour comprises social factors, which influence the decision of the consumer to assume credit liabilities. Keywords: consumer behaviour, external factors, internal factors, credit liabilities, Latvia. JEL Classification: M39, M30, M30, G2, P2.

Introduction
The main goal of research is to analyze factors what influences consumer behaviour assuming and fulfilling credit liabilities. Very special role in presented research is devoted to analysis of consumer behaviour in small market with specific particularities (for example Latvia). Research object is particularities of consumer behaviour under impact of internal and external factors. The research data collection realized through a direct interview method and indirect method of interview. The data collection instrument in this research is a structured questionnaire with limit options, part of the questions can have more answers. The research method - a typological multi-stage sample or occasional sample. In processing the research data are used statistical analysis and multidimensional analysis. Using the evaluation scale of 1 to 10, the participant of the research (respondents) value each given factor, where "1" means that a given factor did not affect the decision / insignificant factor, "10 "means that the given factor has a major impact on the decision / the most important factor (see Table 1). Table 1. Factors affecting consumer behaviour to the questionnaire
(authors summary) Factors group Psychological factors (internal factors) Factors Attitude Knowledge Level interested-in Motivation Perception New experience Values Information about credit relation Living standard Social status 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 3 3 3 3 3 3 3 3 3 3 4 4 4 4 4 4 4 4 4 4 Rating/value 5 6 7 5 6 7 5 6 7 5 6 7 5 6 7 5 5 5 5 5 6 6 6 6 6 7 7 7 7 7 8 8 8 8 8 8 8 8 8 8 9 9 9 9 9 9 9 9 9 9 10 10 10 10 10 10 10 10 10 10

Personal factors (internal factors) Social factors (external factors)

The table summarizes the ten most important factors affecting consumer behaviour. These factors are grouped into three main categories-psychological factors, personal factors and social factors. For each factor group the author made analyze using the survey results. Statistical data analysis was made using the program SPSS tools. 1274

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Table 2. Analyze sample (n=1008, authors summary)

Gender Valid Women Men 18-25 26-30 31-35 36-40 41-45 46-50 51-55 56-60 61-65 Over 65 Elementary school Secondary school Higher Capital City Town Rural area Unemployed Farmer Housekeeper Self-empoyed Pensioner Private sector employed Public sector employed Student Employer Other Frequency 799 209 324 204 120 60 132 48 72 36 0 12 48 319 641 542 144 212 110 72 12 48 53 13 148 242 204 144 72 Valid Percent 79,3 20,7 32,1 20,2 11,9 6 13,1 4,8 7,1 3,6 0 1,2 4,8 31,6 63,6 53,8 14,3 21 10,9 7,1 1,2 4,8 5,3 1,3 14,7 24 20,2 14,3 7,1

Age

Education

Location

Occupation

The unit of analysis- respondents aged over 18 years, who have credit liabilities and who is the enduser of the credit products. The survey involved 1008 respondents of Latvia (n = 1008).

Psychological factors what influence consumer behaviour

Psychological factors are the elements of consumers mental processes, comprising perception, motivation, knowledge and capacities, attitude and personality of the consumer. Perception shapes the world outlook of a human being. In fact, this process of selection and analysis means, that human beings view on credit relations are insufficient. Because of this human mind fills the gaps in perception, synthesizing its knowledge, previous experience, rumours, phantasies, etc. It is the process of analysis and selection of human mind. Motivation is the inner force that stimulates the consumer to act. Motivation as a catalyst to assume credit liabilities is a vector- it has intensity and direction. At the same time the consumer assesses the level of his knowledge and capacities that affect the process of decision making, when selecting the most adequate credit agreement. Attitude affects consumer in three dimensions: by exploration, which characterizes conscious mind activity, by impressions that characterize the consumer's emotional attitude to credit liabilities, by commitment that characterizes the realization of consumer's planned action or behaviour model. Knowledge affects the decision making process itself, based on the previous knowledge. It is difficult to determine the prior knowledge of each consumer, but with additional and key questions it is possible to detect at least a certain part of what the consumers knowledge is about. 1275

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The level of interested-in characterizes what importance the consumer gives to the choice in favour of one or another credit product and decision making process. This level reflects consumers emotional attitude towards credit liabilities. Motivation is the inner force that stimulates the consumer to act. Motivation as a catalyst to assume credit liabilities is a vector- it has intensity and direction. At the same time the consumer assesses the level of his knowledge and capacities that affect the process of decision making, when selecting the most adequate credit agreement. Perception indicates how consumer has created his own world outlook where the reflection of complexity of objects, visions, situations and events in conscience does not take place by direct effect on sensor organs. Table 3. Psychological factors affecting consumer behaviour to the questionnaire
(n=1008, authors summary) Attitude Frequency Knowledge Frequency The level interested-in Frequency Frequency Valid Percent Motivation Frequency Perception

Valid Percent

Valid Percent

Valid Percent

Valid

1 2 3 4 5 6 7 8 9 10 Total

180 96 12 24 204 84 72 96 96 144 1008

17,9 9,5 1,2 2,4 20,2 8,3 7,1 9,5 9,5 14,3 100

144 48 84 24 168 48 120 120 84 168 1008

14,3 4,8 8,3 2,4 16,7 4,8 11,9 11,9 8,3 16,7 100

168 84 24 48 156 24 72 144 144 144 1008

16,7 8,3 2,4 4,8 15,5 2,4 7,1 14,3 14,3 14,3 100

408 72 48 72 96 36 0 108 36 132 1008

40,5 7,1 4,8 7,1 9,5 3,6 0 10,7 3,6 13,1 100

336 96 72 48 120 60 96 108 36 36 1008

Analyzing results of the survey about attitude as psychological factor impact on consumer behaviour, that affect the consumer's decision assuming and fulfilling credit liabilities, author concludes that attitude did not affect decision of 180 respondents assuming and fulfilling credit liabilities (17,9% of cases), however for 144 respondents (14,3% of cases), attitude was an important factor that affected the decision of consumer behaviour assuming and fulfilling credit liabilities in Latvia. Analyzing results of the survey about knowledge as psychological factor impact on consumer behaviour, that affect the consumer's decision assuming and fulfilling credit liabilities, author concludes that knowledge did not affect decision of 144 respondents assuming and fulfilling credit liabilities (14,3% of cases), however for 168 respondents (16,7% of cases), knowledge was an important factor that affected the decision of consumer behaviour assuming and fulfilling credit liabilities in Latvia. Analyzing results of the survey about the level of interested-in as psychological factor impact on consumer behaviour, that affect the consumer's decision assuming and fulfilling credit liabilities, author concludes that the level of interested-in did not affect decision of 168 respondents assuming and fulfilling credit liabilities (16,7% of cases), however for 144 respondents (14,3% of cases), the level of interested-in was an important factor that affected the decision of consumer behaviour assuming and fulfilling credit liabilities in Latvia. Analyzing results of the survey about motivation as psychological factor impact on consumer behaviour, that affect the consumer's decision assuming and fulfilling credit liabilities, author concludes that motivation did not affect decision of 408 respondents assuming and fulfilling credit liabilities (40,5% of cases), however for 132 respondents (13,1% of cases), motivation was an important factor that affected the decision of consumer behaviour assuming and fulfilling credit liabilities in Latvia. Analyzing results of the survey about perception as psychological factor impact on consumer behaviour, that affect the consumer's decision assuming and fulfilling credit liabilities, author concludes that perception did not affect decision of 336 respondents assuming and fulfilling credit liabilities (33,3% of 1276

Valid Percent 33,3 9,5 7,1 4,8 11,9 6 9,5 10,7 3,6 3,6 100

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cases), however for 36 respondents (3,6% of cases), perception was an important factor that affected the decision of consumer behaviour assuming and fulfilling credit liabilities in Latvia.

Personal factors what influence consumer behaviour

Personal factors include individual features of the consumer which affect the decision making process. They comprise: 1) demographic factors which are individual features- age, gender, nationality, income level, family status, occupation; 2) situative factors which are the level of the change of material conditions of the consumer and his interests (preferences). The considerable attention is focused on selection of product/service and the decision making process which reflect the emotional attitude of the consumer towards product/service. Table 4. Personal factor affecting consumer behaviour to the questionnaire
(n=1008, authors summary) Valid 1 2 3 4 5 6 7 8 9 10 Total New experience Frequency Valid Percent 516 51,2 48 4,8 72 7,1 72 7,1 84 8,3 36 3,6 24 2,4 60 6 36 3,6 60 6 1008 100 Frequency 276 84 96 60 132 60 84 72 48 96 1008 Values Valid Percent 27,4 8,3 9,5 6 13,1 6 8,3 7,1 4,8 9,5 100

Analyzing results of the survey about new experience as personal factor impact on consumer behaviour, that affect the consumer's decision assuming and fulfilling credit liabilities, author concludes that new experience did not affect decision of 516 respondents assuming and fulfilling credit liabilities (51,2% of cases), however for 60 respondents (6% of cases), new experience was an important factor that affected the decision of consumer behaviour assuming and fulfilling credit liabilities in Latvia. Analyzing results of the survey about values as personal factor impact on consumer behaviour, that affect the consumer's decision assuming and fulfilling credit liabilities, author concludes that values did not affect decision of 276 respondents assuming and fulfilling credit liabilities (27,4% of cases), however for 96 respondents (9,5% of cases), values was an important factor that affected the decision of consumer behaviour assuming and fulfilling credit liabilities in Latvia.

Social factors what influence consumer behaviour

The group of external factors affecting consumer behaviour comprises social factors, which influence the decision of the consumer to assume credit liabilities. Social factors characterize the impact of friends and family members on the consumer decision making process. There exist different situative conditions that have a profound impact on consumer attitude and behaviour. The situative condition affected by communications can be personal and indirect. Personal communication is defined as direct impact on consumer. Indirectly affecting communication is integrated in the form of marketing communications- advertising, booklets, publications, etc. The evaluation of service provider or a specific brand shapes the attitude which manifests itself in active consumer behaviour when assuming and fulfilling credit liabilities.

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Table 5. Social factors affecting consumer behaviour to the questionnaire

(n=1008, authors summary) Information about credit relation Valid 1 2 3 4 5 6 7 8 9 10 Total Frequency 72 48 24 60 144 72 132 168 96 192 1008 Valid Percent 7,1 4,8 2,4 6 14,3 7,1 13,1 16,7 9,5 19 100 Living standard Frequency 72 48 12 24 120 72 108 108 180 264 1008 Valid Percent 7,1 4,8 1,2 2,4 11,9 7,1 10,7 10,7 17,9 26,2 100 Social status Frequency 348 84 84 36 108 36 36 96 96 84 1008 Valid Percent 34,5 8,3 8,3 3,6 10,7 3,6 3,6 9,5 9,5 8,3 100

Analyzing results of the survey about information about credit relation as social factor impact on consumer behaviour, that affect the consumer's decision assuming and fulfilling credit liabilities, author concludes that information about credit relation did not affect decision of 72 respondents assuming and fulfilling credit liabilities (7,1% of cases), however for 192 respondents (19% of cases), information about credit relation was an important factor that affected the decision of consumer behaviour assuming and fulfilling credit liabilities in Latvia. Analyzing results of the survey about living standard as social factor impact on consumer behaviour, that affect the consumer's decision assuming and fulfilling credit liabilities, author concludes that living standard did not affect decision of 72 respondents assuming and fulfilling credit liabilities (7,1% of cases), however for 264 respondents (26,2% of cases), living standard was an important factor that affected the decision of consumer behaviour assuming and fulfilling credit liabilities in Latvia. Analyzing results of the survey about social status as social factor impact on consumer behaviour, that affect the consumer's decision assuming and fulfilling credit liabilities, author concludes that social status did not affect decision of 348 respondents assuming and fulfilling credit liabilities (34,5% of cases), however for 84 respondents (8,3% of cases), social status was an important factor that affected the decision of consumer behaviour assuming and fulfilling credit liabilities in Latvia.

Summary
Consumer behaviour is affected by situation and the consumer himself, that is, internal and external factors. Internal factors refer to such characteristics of individuals as age, income level, interests, and state of mood, knowledge, involvements and attitudes. External factors refer to situation and environment where the consumers interrelate, which can affect attitude, decisions and behaviour. Internal and external factors have important influence on consumer behaviour. However, external factors are more special. External factors are unpredictable and are influenced not only by economical situation in state out also in region and whole world. Because living standard and social status of person change by externals, that is influenced by flow of information.

References
1. 2. 3. 4. 5. Arhipova I., Balina S. (2006). Statistics for economics and business. Riga, Datorzinbu centrs, pp 362. Andersone I. (2008). On influence of factors on consumer behaviour. 5. International Conference Business and management 2008, Selected Papers. Vilnius "Technika", ISBN 978-9955-28-311-9, pp 246-252. Blythe J. (2004). Essentials of Marketing. Pearson Education Limited, pp 284. Joseph F.Hair, Jr., William C. Black, Barry J. Babin, Rolph E. Anderson, Ronald L. (2004). Tatham. Multivariate Data Analysis. Sixth Edition. Pearson- Prentice-Hall, pp 14-15. Kothler P. (2004). Marketing management. 11th International edition Prentice-Hall, pp 706.

This paper has been supported by the European Social Fund within the project Support for Doctoral Studies at University of Latvia. 1278