Factors Influencing: Consumer Behavior / Buying Decisions

FACTORS INFLUENCING
CONSUMER BEHAVIOR / BUYING DECISIONS

FACTORS INFLUENCING BUYING DECISIONS
The consumer decision-making process is influenced by
- Cultural,
- Social,
- Personal/Individual, and
- Psychological factors.
CULTURAL FACTORS
• Culture & Values
• Subculture
• Social class
• CULTURAL FACTORS – Culture & Values
- Culture is an important character of society that
distinguishes each group
- Culture is the totality of values, language, myths, customs,
rituals, and laws that shape the behavior of the people and
transmitted from one generation to the next.
- What people eat, how they dress, what they think and feel,
and what language they speak are all dimensions of culture.
• A child growing up in the US is exposed to values such as
achievement and success, activity, efficiency and
practicality, progress, material comfort, individualism,
freedom, external comfort, humanitarianism, and
youthfulness.
• A child growing up in India ?
is exposed to values such as respect and care for elders,
honesty and integrity, hard work, achievement and success,
humanitarianism, and compassion

• A child growing up in another country might have a
different view of self, relationship to others, and rituals.
• Marketers must closely attend to cultural values in every
country to understand how to best market their existing
products and find opportunities for new products.
• Culture is learned. Consumers are not born knowing the

values and norms of their society. Children learn the
values & culture from from parents ,teachers and peers.
• Culture is dynamic. It adapts to changing needs and an
evolving environment, The rapid growth of technology in
today's world has accelerated the rate of cultural change
• The most defining element of a culture is its values-the

enduring beliefs shared by a society that a specific
mode of conduct is personally or socially preferable to
another mode of conduct.
• Consumers with similar value systems tend to react
alike to prices and other marketing-related
inducements.
• Values also correspond to consumption patterns.
- With a rise in health awareness levels, people are more
concerned about the food they consume. This value has
created lucrative markets for products such as natural
juices, multigrain cereals and snacks, sugar-free food
items that allow consumers to remain fit and healthy.
- Values can also influence consumers television viewing
habits or the magazines they read
Understanding Cultural Differences
Like people, products have cultural values and rules that
influence their perception and use.
Colors, for example, may have different meanings in global
markets
- In China, white is the color of mourning and brides wear red.
- In US, black is for mourning and brides wear white.
Language is another important aspect of culture that global marketers
must consider.
When translating product names, slogans, and promotional messages
into foreign languages, they must be careful not to convey the wrong
message.
- General Motors discovered too late that Nova (the name of an
economical car) literally means
"doesn't go" in Spanish
Pepsi faced a similar situation in Taiwan where by its slogan of "Come
Alive with Pepsi" translated to
"Pepsi brings your ancestors back from the dead"

• Mc Donalds, PizzaHut
80% Indians do not eat beef. They stopped offering
which is common in many Western countries
• CULTURAL FACTORS - Subculture

• A subculture is a homogeneous group of people who
share elements of the overall culture as well as cultural
elements unique to their own group.
• Within subcultures, people's attitudes, values, and
purchase decisions are even more similar than they are
within the broader culture
• CULTURAL FACTORS - Subculture
• Each culture consists of smaller subcultures that provide
more specific identification and socialization for their
members.
• Subcultures include nationalities, religions, racial groups,
and geographic regions.
• When subcultures grow large and affluent enough,
companies often design specialized marketing programs
to serve them
• Subculture
• As a matter of fact, a great difference between the tastes
and preferences across regions in India.
• Food preferences
- North Indians have a preference for wheat.
- South Indians have a preference for rice and
- East Indians have a preference for fish.
• Subculture
• consumption of gold is the highest in the southern
states.
- Over40 percent of total gold consumption in India is in
the southern regions, while the eastern regions consume
the least amount of gold.
- The high consumption of gold in southern India can be
attributed to the custom of buying gold and the metal
being considered as a safe investment
CULTURAL FACTORS – Social class
A social class is a group of people who are considered
nearly equal in status or community esteem, who regularly
socialize among themselves both formally and informally,
and who share behavioral norms.
Social class is typically measured as a combination of
occupation, income, education, wealth, and other variables
CULTURAL FACTORS – Social class
• Affluent upper-class consumers are more Iikely to be
salaried executives or self-employed professionals with at
least an undergraduate degree.
• Working-class or middle-class consumers are more likely to
be blue-collar employees with graduation/PG.
• Educational attainment, however, seems to be the most
reliable indicator of a person's social and economic status.
• Knowing what products appeal to which social classes can
help marketers to determine the right marketing strategy.
SOCIAL FACTORS
• Reference groups
• Opinion leaders
• Family
SOCIAL FACTORS
Many consumers seek out the opinions of others to
- To reduce their search and evaluation effort or
uncertainty, especially as the perceived risk of the
decision increases.
- For guidance on new products or services, products with
image-related attributes
- Specifically, consumers interact socially with reference
groups, opinion leaders, and family members to obtain
product information and decision approval
SOCIAL FACTORS- Reference groups
• All the formal and informal groups that influence the
buying behavior of an individual are that person’s
reference groups.
• They learn from observing how members of their
reference groups consume, and they use the same
criteria to make their own consumer decisions
• There are two broad categories of reference groups.
a) Direct and Indirect groups
SOCIAL FACTORS- Direct Reference groups
• Primary membership groups include all with which people
interact regularly in an informal, face-to-face manner.
Ex: Family, friends, and co-workers.
• In contrast , people interact with secondary membership
groups less consistently and more formally.
Ex: Clubs, professional and religious groups
SOCIAL FACTORS- Indirect Reference groups
• Aspirational reference groups are those a person would like
to join.
• To join an aspirational groups a person must at least
conform to the norms of that group. (Norms are the values
and attitudes deemed acceptable by the group.)
• Thus, a person who wants to be elected to public office may
begin to dress more conservatively, as other politicians do
• Similarly, teenagers may dye their hair and experiment with
body piercing and tattoos.
SOCIAL FACTORS- Indirect Reference groups

• Non-aspirational reference groups : A consumer may avoid
- buying some types of clothing or cars,
- going to certain restaurants or stores,
- Moving with a particular friends group
- even buying a home in a certain neighborhood
in order to avoid being associated with a particular group.
For marketers, reference groups have three important
implications:
1. They serve as information sources and influence
perceptions
2. They affect an individual's aspiration levels and
3. Their norms either force/limit or stimulate consumer
behavior.
SOCIAL FACTORS- Opinion leaders
• opinion leaders are those who influence others. it is
important for marketing managers to persuade such
people to purchase their goods or services.
• Opinion leaders are often the first to try new products
and services out of pure curiosity. They are typically
self-indulgent and status seeking .
• Opinion leaders explore fascinating products and
services
SOCIAL FACTORS- Opinion leaders
• Marketers try to create opinion leaders.
• On a national level, companies sometimes use movie
stars, sports figures, and other celebrities to promote
products, hoping they are appropriate opinion leaders.
• The effectiveness of celebrity endorsements varies,
though, depending largely on how credible and
attractive the spokes person is and how familiar people
are with him
SOCIAL FACTORS- family
• Family is the most important social institution for many
consumers , strongly influencing values, attitudes, self-
concept and buying behaviour.
• Children learn by observing their parents consumption
patterns .
• Family members play different roles depending on the
nature of the product to buy.
Initiator /Influencer / Decision maker / Purchaser / Consumer
PERSONAL FACTORS
AGE AND STAGE IN THE LIFE CYCLE
OCCUPATION AND ECONOMIC CIRCUMSTANCES
PERSONALITY
SELF – CONCEPT
PERSONAL FACTORS - AGE AND STAGE IN THE LIFE CYCLE

• Our taste in food, clothes, furniture, and recreation is
often related to our age.
• Consumption is also shaped by the family life cycle
and the number, age, and gender of people in the
household at any point in time.
PERSONAL FACTORS - OCCUPATION AND ECONOMIC CIRCUMSTANCES
• Occupation also influences buying decision. Marketers try
to identify the occupational groups that have above-
average interest in their products and services and even
tailor products for certain occupational groups.
• product and brand choice are greatly affected by economic
circumstances: disposable income (level, stability), savings
and assets, debts, borrowing power, and attitudes toward
spending.
PERSONAL FACTORS - PERSONALITY

• Each person has personality characteristics (psychological
traits), that influence the buying behavior.
• The traits include asself-confidence, dominance, autonomy,
reverence/devotion, sociability, defensiveness, and
adaptability
PERSONAL FACTORS – SELF – CONCEPT
Self-concept - how we view ourselves
Consumers often choose and use brands with a brand

personality consistent with their actual self-concept
PERSONAL FACTORS – SELF – CONCEPT
Ideal self-concept - how we would like to view ourselves

Others' self-concept - how we think others see us
Although the match may instead be based on the
consumer's ideal self-concept (how we would like to view
ourselves) or even on others' self-concept (how we think
others see us).
These effects may also be more observable for publicly
consumed products than for privately consumed goods.
PSYCHOLOGICAL FACTORS -
• Motivation
• Perception
• Learning
PSYCHOLOGICAL FACTORS – Motivation

• Maslow’s need hierarchy:
- 5-levels of needs – Physiological, safety, social, esteem
and self-actualization
- The level of need the consumer wants fulfill is the
influencing factor to decide whether to buy your
company product.
PSYCHOLOGICAL FACTORS – Motivation
Herzberg theory:
Dissatisfiers and Satisfiers :
- Companies should avoid dissatisfiers in the features of
product, negative meanings in communication, wrong
demonstration etc
- Then companies need to identify and offer the
satisfiers and motivators about the product.
PSYCHOLOGICAL FACTORS – Perception
• In marketing, perceptions are more important than reality,
because perceptions affect consumer’s actual behavior.
• Perception is the process by which consumers select,
organize, and interpret information (Mktg. Stimuli).
• Consumers form different perceptions of the same object
because of three perceptual processes:
1. selective attention,
2. selective distortion, and
3. selective retention.
PSYCHOLOGICAL FACTORS – Perception - selective attention:
- When a consumer exposed to 30 Ads in a day, 50 stalls in

an exhibition, thousands of products in a mall ,
- For which he pays attention?
- For a product of Rs 1000/-, 10% or Rs 100/ discount
Which is more attention paid?
 Identifying right stimuli is the challenge for marketers
PSYCHOLOGICAL FACTORS – Perception - Selective distortion
• Selective distortion is the tendency to interpret information in
a way that fits our pre-conceptions.
• Consumers will often interfere with information to be
consistent with prior brand and product beliefs and
expectations
• Selective distortion can work to the advantage of marketers
with strong brands.
• In other words, coffee may seem to taste better, a car may
seem to drive more smoothly, the wait in a bank line may
seem shorter, depending on the brand.
PSYCHOLOGICAL FACTORS – Perception - Selective retention
• Consumers don't remember much of the information to
which we’re exposed,
But
retain information that supports our attitudes and
beliefs, because of selective retention.
• Consumers remember good points about a product they
like and forget good points about competing products.
• Selective retention again works to the advantage of
strong brands.
PSYCHOLOGICAL FACTORS – Learning
• Learning induces changes in our behavior arising from experience.
Most human behavior is learned.
• Learning theory teaches marketers that they can build demand for a
product by associating it with strong drives, using motivating cues,
and providing positive reinforcement.
• A new company can enter the market by appealing to the same
drives competitors use and by providing similar cues, because buyers
are more likely to transfer loyalty to similar brands (Generalization)
or
• The company might design its brand to appeal to a different set of
drives and offer strong cue inducements to switch (Differentiation)
THANK YOU

Factors Influencing: Consumer Behavior / Buying Decisions

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FACTORS INFLUENCING

CONSUMER BEHAVIOR / BUYING DECISIONS

• CULTURAL FACTORS – Culture & Values

• Culture is learned. Consumers are not born knowing the

• The most defining element of a culture is its values-the

Understanding Cultural Differences

• CULTURAL FACTORS - Subculture

SOCIAL FACTORS- Indirect Reference groups

PERSONAL FACTORS - AGE AND STAGE IN THE LIFE CYCLE

PERSONAL FACTORS - PERSONALITY

Consumers often choose and use brands with a brand

Ideal self-concept - how we would like to view ourselves

PSYCHOLOGICAL FACTORS – Motivation

- When a consumer exposed to 30 Ads in a day, 50 stalls in

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