Market Analysis

Lecture: 4
Factors affecting Consumer
Behavior
Session Objectives

By the end of this class, we will be able to:

▪ Understand and classify the factors

affecting Consumer Behavior:

− Cultural factors

− Social factors

− Economic factors

− Internal or Psychological Factors

Break-out Activity
Are there any certain factors that affect
Consumer Behavior?
Cultural Factors

Cultural factors plays a very vital role in determining consumer behaviour. It is sub-divided
into the following:

Sub-cul Social
Culture
ture class
Cultural Factors
▪ Culture influences considerably the
pattern of consumption and
decision-making. Marketers have to
explore the cultural forces and have
to frame marketing strategies for
each category to push up the sales
− For example, food is strongly
linked to culture. While fish is
regarded as a delicacy in Bengal,
and the Bengalis boast of several
hundred different varieties,
whereas in Gujarat, Rajasthan or
Tamil Naru, fish is regarded as
mostly unacceptable food item
Cultural Factors
▪ Sub-cultures make up important
market segments and marketers
have to design products and
marketing programs tailored to their
needs
− For example, Indians are normally
seen as orthodox, conservative
people, but rich, up-market youths
do not hesitate to enjoy night parties
with liquor and women

▪ Consumer behavior is determined by

the social class to which they belong.
All the social classes differ in their
buying behavior
− For example, upper class consumers
want high-class goods to maintain
their status in the society
Social Factors

Man is a social animal. Hence, our behavior patterns, likes and dislikes are influenced by the
people around us to a great extent. We always seek confirmation from the people around us
and seldom do things that are not socially acceptable

The social factors

influencing Reference Role/status
Family
consumer group in society
behaviour are:
Social Factors

▪ Family members can strongly influence the

buyer behavior, particularly in the Indian contest.
The tastes, likes, dislikes, life styles etc. of the
members are rooted in the family buying
behavior

▪ Reference group is a group of people who

strongly influence a person’s attitudes values
and behavior directly or indirectly

▪ Role means what position individual occupies

and behavior of a consumer is influenced by the
status of individuals in society. The pattern of
consumption is framed accordingly
Break-out Activity
Give an example of a product / brand where
social factor is very strong, and explain why?
Economic Factors

Consumer behavior is influenced largely by economic factors. Economic factors that

influence consumer behavior are:

Personal Income Liquid

Income Expectations Assets

01 02 03 04 05

Family Income Savings

Economic Factors

▪ The personal income of a person is determinant of his

buying behaviour. An increase in the disposable income
leads to an increase in the expenditure on various items and
a fall in the disposable income leads to a fall in the
expenditure
▪ Family income influences the buying behavior of the family.
The surplus family income, remaining after the expenditure
on the basic needs of the family, is made available for
buying shopping goods, durables and luxuries
▪ Income expectations are one of the important
determinants of the buying behavior of an individual. If he
expects any increase in his income, he is tempted to spend
more on shopping goods, durable goods and luxuries
▪ Savings also influence the buying behavior of an individual.
A change in the amount of savings leads to a change in the
expenditure of an individual
▪ If an individual has more liquid assets, he goes in for buying
comforts and luxuries as compared to if he has less liquid
assets
Internal or Psychological Factors

Psychological factors relate to the mind of the consumer and how it works. There are four
psychological factors affecting consumer behavior:

Attitudes and Beliefs

Perception
Learning

Motivation
Internal or Psychological Factors

▪ Motivation is the inner drive or pressure to take action

to satisfy a need of an individual

▪ Perception is the picture that a person creates based

on inputs from his environment. Marketers always try to
create a positive perception and keep reinforcing it

▪ Learning refers to the experience of a person in

consumption of a product / service. A good experience
with a product means positive learning and likelihood
of repeat purchase

▪ Attitudes and beliefs impact purchase decision, so

marketer needs to create positive belief by highlighting
strong and differentiating factors about brand
Tactical Intervention
Everyone in class has a different
culture and interest. As an
individual, discuss the various
factors that affect your behaviour
as a customer.
Check your understanding

You work as a Sales Manager at Samsung Show

Room in Connaught place

A family comprising of husband and wife, enters

the showroom looking for a fully automatic
washing machine. The family is decently dressed,
both have iPhones, and work in Multi National
Companies. They are looking for a machine which
dries clothes up to 100%

Q Q. As a sales manager, observe the customers,

and identify the right product according to the
different factors influencing consumer
behavior?
Tactical Intervention
Make a presentation on the factors
affecting consumer behaviour in a
luxury designer store.