These characteristics may include how a person makes decisions, their unique habits and interests, and opinions. When considering personal factors, decisions are also influenced by age, gender, background, culture, and other personal issues.
For example, an older person will likely exhibit different consumer behaviors than a younger person, meaning they will choose products differently and spend their money on items that may not interest a younger generation. The third factor that has a significant impact on consumer behavior is social characteristics.
Social influencers are quite diverse and can include a person's family, social interaction, work or school communities, or any group of people a person affiliates with. It can also include a person's social class, which involves income, living conditions, and education level.
The social factors are very diverse and can be difficult to analyze when developing marketing plans. However, it is critical to consider the social factors in consumer behavior, as they greatly influence how people respond to marketing messages and make purchasing decisions. For example, how using a famous spokesperson can influence buyers.
Through research and observation, several models have been developed that help further explain why consumers make decisions, including the black box, personal variables and complex models.
The black-box model is based on external stimulus-response, meaning something triggers the consumer to make buying decisions that are influenced by many factors, including marketing messages, sampling, product availability, promotions, and price.
When influenced by the personal-variable model , consumers make decisions based on internal factors. These internal factors may include personal opinions, belief systems, values, traditions, goals, or any other internal motivator.
The third consumer behavior model is the complex model. The complex model considers both internal and external variables. Focus Groups - Getting several consumers together at the same time and place offers a chance to ask marketing questions and determine how consumers feel about existing or new products.
Get access risk-free for 30 days, just create an account. Surveys - Asking people for input allows the marketing group to understand how consumers feel, what they want, and how they will react. If it is clear consumers are not happy with a current product or will not want a future product, companies can make accommodations for consumer behavior and capitalize on greater sales elsewhere.
Track Sales History - Past consumer behavior helps predict future consumer behavior. By studying what consumers have done historically, companies can make predictions of what customers will do in response to changes.
Think about the last time you went to the market and scanned your rewards card. The data collected from your purchases is combined with millions of other transactions to better understand consumer behavior. Once companies have a better understanding of consumer buying habits and consumer behavior, they have valuable information about what consumers want, how they learn about products, and how they spend their money. Marketing takes this information to create ad campaigns about existing and new products with the intent to create a demand for products and services.
By understanding consumer behavior, the marketing department of a company can effectively create an entire campaign to support the awareness and demand for a product or service. Consumer behavior is the study of how people make decisions about what they buy, want, need or act in regards to a product, service or company. Consumers have more options than ever, with more companies competing for their attention and money.
Understanding consumer behavior is critical to being competitive. Companies that tailor their marketing efforts to match consumer behavior are more likely to understand their customers and provide products or services that appeal to them. To understand consumer behavior, marketers must understand the factors that affect it, including psychological, personal and social factors. Additionally, there are several ways to study consumer behavior, like the black-box, personal-variable and complex models.
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Consumer behavior is explained and the way companies learn about consumer behavior is discussed. The way that marketing benefits from understanding consumer behavior is examined. Try it risk-free for 30 days. An error occurred trying to load this video.
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Consumer Behavior in the Hospitality Industry: Setting the Advertising Budget: Brought to you by Techwalla. Consumer Behavior Models - An Overview. The Psychology of Marketing Management Hub: Major Factors Influencing Consumer Behavior. About the Author Marcus Paine started writing in and has worked with some popular publishing houses in Gloucestershire like Edward Elgar Publishing and Nelson Thornes. Depending on which text editor you're pasting into, you might have to add the italics to the site name.
Conflicts in Consumer Behavior Motivation. Internal influences refer to both personal and interpersonal factors. Social theory suggests that individuals have both a personal identity and a social identity. Personal identity consists of unique personal characteristics such as skills and capabilities, interests and hobbies. Social identity consists of the individual's perception of the central groups to which an individual belongs and may refer to an age group, a lifestyle group, religious group, educational group or some other reference group.
Social psychologists have established that the need to belong is one of the fundamental human needs. Demographic factors include income level, psychographics lifestyles , age, occupation and socio-economic status. Personality factors include knowledge, attitudes, personal values, beliefs , emotions and feelings. Psychological factors include an individual's motivation , attitudes , personal values and beliefs.
Other factors that may affect the purchase decision include the environment and the consumer's prior experience with the category or brand. Social identity factors include culture, sub-culture and reference groups. The consumer's underlying motivation drives consumer action, including information search and the purchase decision.
The consumer's attitude to a brand or brand preference is described as a link between the brand and a purchase motivation. One approach to understanding motivations, was developed by Abraham Maslow.
Maslow's hierarchy of needs is based on five levels of needs, organized accordingly to the level of importance. Maslow's five needs are: Physiological needs and safety needs are the so-called lower order needs. Consumers typically use most of their resources time, energy and finances attempting to satisfy these lower order needs before the higher order needs of belonging, esteem and self-actualization become meaningful. Part of any marketing program requires an understanding of which motives drive given product choices.
Marketing communications can illustrate how a product or brand fulfills these needs. Another approach proposes eight purchase motivations, five negative motives and three positive motives, which energise purchase decisions as illustrated in the table below.
In the marketing literature, the consumer's motivation to search for information and engage in the purchase decision process is sometimes known as involvement. On the other hand, a purchase decision is classified as high involvement when psycho-social risks are perceived to be relatively high. Part of marketing strategy is to ascertain how consumers gain knowledge and use information from external sources.
The perception process is where individuals receive, organize and interpret information in order to attribute some meaning. Perception involves three distinct processes: Sensation is also part of the perception process, and it is linked direct with responses from the senses creating some reaction towards the brand name, advertising and packaging.
The process of perception is uniquely individual and may depend on a combination of internal and external factors such as experiences, expectations, needs and the momentary set. When exposed to a stimulus, consumers may respond in entirely different ways due to individual perceptual processes. Selective exposure occurs when consumers decide whether to be exposed to information inputs.
Selective attention occurs when consumers focus on some messages to the exclusion of others. Selective comprehension is where the consumer interprets information in a manner that is consistent with their own beliefs. Selective retention occurs when consumers remember some information while rapidly forgetting other information. The way that consumers combine information inputs to arrive at a purchase decision is known as integration.
Marketers are interested in consumer perceptions of brands, packaging, product formulations, labeling and pricing. Of special interest is the threshold of perception also known as the just noticeable difference in a stimulus. For example, how much should a marketer lower a price before consumers recognize it as a bargain?
Accordingly, white packaging would be an inappropriate color choice for food labels on products to be marketed in Asia. The consumer's prior experience with the category, product or brand can have a major bearing on purchase decision-making. Experienced consumers also called experts are more sophisticated consumers; they tend to be more skillful information searchers, canvass a broader range of information sources and use complex heuristics to evaluate purchase options.
Novice consumers, on the other hand, are less efficient information searchers and tend to perceive higher levels of purchase risk on account of their unfamiliarity with the brand or category. When consumers have prior experience, they have less motivation to search for information, spend less effort on information search but can process new information more efficiently. Purchasing behaviour can also be affected by external influences, such as culture , sub-culture , social class , reference groups , family and situational determinants.
Culture is the broadest and most abstract of the external factors. Culture refers to the complexity of learning meanings, values, norms, and customs shared by members of a society. Cultural norms are relatively stable over time, therefore, culture has a major impact on consumer behaviour.
Research studies have consistently shown that culture influences almost every aspect of purchasing: Marketers, interested in global expansion, are especially interested in understanding cross-cultural differences in purchasing and consumption. For instance, Ferrari, one of the world's top brands found that Chinese consumers are very different from their Western counterparts. Whereas consumers in the US, UK and Australia expect to wait 12 months for a custom-made Ferrari, prospective Chinese buyers want to drive the vehicle off the showroom floor.
Buyers see their friends riding around in a luxury car and want to have the same as quickly as possible. To meet the growing demand for luxury goods, Ferrari and other luxury car makers have been forced to modify their production processes for Asian markets. Subcultures may be based on age, geographic, religious, racial, and ethnic differences.
More often, however, a subculture occurs when people with shared interests form a loose-knit group with a distinctive identity sometimes called consumer tribes. Members of subcultures are self-selected, and signal their membership status by adopting symbols, rituals or behaviours that are widely understood by other members of the tribe e. For example, within youth culture it is possible to identify a number of sub-groups with common interests such as skaters and bladers, surfers, ravers, punks, skin-heads, Goths, homies and others.
A different type of subculture is a consumption subculture which is based on a shared commitment to a common brand or product. In other words, consumption subcultures cut across demographic, geographic and social boundaries. The most well-known example of a consumption subculture is that of Harley-Davidson motorcycle owners. Ethnographic researchers who have studied Harley riders believe that there are only two types of motor cyclists; namely Harley owners and the rest.
Subcultures are important to marketers for several reasons. Secondly, and perhaps less obviously, many new fads and fashions emerge spontaneously from within these tribal groups. Trend-spotters are accordingly interested in studying the lifestyles and activities of tribes in an effort to spot new trends before they go mainstream. Social class refers to relatively homogenous divisions in a society, typically based on socio-economic variables such as educational attainment, income and occupation.
Social class can be very difficult to define and measure, however marketers around the world tend to use a conventional classification which divides any given population into five socio-economic quintiles e. AB socio-economic segments are of particular interest to marketers of luxury goods and services such as travel, dining-out, entertainment, luxury cars, investment or wealth management services, up-market consumer electronics and designer labels e.
A reference group is defined as "a group whose presumed perspectives or values are being used by an individual as the basis for his or her judgment, opinions, and actions. The literature identifies five broad types of reference group; primary, secondary, aspirational, dissociative and formal:. Opinion Leaders can act like reference groups in that they exert considerable social influence because of their product knowledge, expertise and credibility.
In the marketing literature, opinion leaders are also known as influencers, mavens and even hubs. Typically, opinion leaders have high levels of involvement with the product category, are heavy users of the category and tend to be early adopters of new technologies within the category. In order to leverage the value of opinion leaders in marketing strategies, it is important to be able to identify the unique opinion leaders for each category or situation and this can be very challenging.
Some techniques that can be used are through key informants, socio-metric techniques and self-questionnaires. Marketers of cosmetics and skincare preparations regularly provide fashion editors with free samples in the hope that their products will be mentioned in fashion magazines. The family has a great impact on the individual because he learn from his young age how to act as a conscious consumer by acquiring the skills, values and trends of his family environment.
As the family plays an important role in the consuming process and affects the behavior of its purchasing members, those interested in marketing should design the advertisements to suit this role. The role of the husband and wife in the purchasing decisions can be categorized into three types: The goods are purchased by a decision of the wife only.
Children play an important role in the family's purchasing processes but their role varies according to the age of the child.
Older children tend to consume higher-priced goods such as computers, bedrooms, trips, etc. Situation determinants play an important role in influencing the behavior of the consumer and are factors independent of the individual and its characteristics, and related to the place and time of purchase or consumption, and know that it "The temporal and spatial conditions surrounding the purchasing and consumer position that temporarily affect the behavior of the individual without having to do with his or her personal characteristics or the elements of the marketing mix".
These effects fall into two sets of factors: A number of theorists have argued that certain fundamental decision-making styles can be identified. Based on these factors, the authors developed a typology of eight distinct decision-making styles: The Consumer Styles Inventory CSI has been extensively tested and retested in a wide variety of countries and purchasing contexts.
In addition to understanding the purchasing decision, marketers are interested a number of different aspects of consumer behaviour that occur before, during and after making a purchase choice. Areas of particular interest include: The consumer's perceptions of risk are a major consideration in the pre-purchase stage of the purchasing decision. Perceived risk is defined as "the consumer's perceptions of the uncertainty and adverse consequences of engaging in an activity".
The marketing literature identifies many different types of risk, of which five are the most frequently cited: If a consumer perceives a purchase to be risky, he or she will engage in strategies to reduce the perceived risk until it is within their tolerance levels or, if they are unable to do so, withdraw from the purchase. Services marketers have argued that risk perception is higher for services because they lack the search attributes of products i.
Experience goods, such as restaurants and clubs, can only be evaluated with certainty after purchase or consumption. In the case of credence goods, such as many professional services, the consumer finds it difficult to fully appreciate the quality of the goods even after purchase and consumption has occurred. Difficulties evaluating quality after consumption may arise because the cost of obtaining information is prohibitive, or because the consumer lacks the requisite skills and knowledge to undertake such evaluations.
Typical risk-reduction strategies used include: Within consumer behaviour, a particular area of interest is the study of how innovative new products, services, ideas or technologies spread through groups. Insights about how innovations are diffused i. In addition, diffusion models provide benchmarks against which new product introductions can be tracked. A sizeable body of literature has been devoted to the diffusion of innovation. However, the exact shape and timing of curves varies in different product markets such that some innovations are diffused relatively quickly, while others can take many years to achieve broad market acceptance.
The diffusion model developed by Everett Rogers is widely used in consumer marketing because it segments consumers into five groups, based on their rate of new product adoption. An innovation is any new idea, object or process that is perceived as new by members of the social system.
Communication channels are the means by which information about the innovation is transmitted to members of the social system and may include mass media, digital media and personal communications between members of the social system. Time refers to the rate at which the innovation is picked up by the members of the social system. A number of factors contribute to the rate at which innovations are diffused through a social community.
Innovations with some or all of these factors are more likely to be adopted quickly. Accordingly, marketing communications may stress the innovation's relative benefits over other solutions to the consumer's problem. Marketing messages may also focus on compatibility and observability. Marketers can also facilitate adoption by offering limited scale trial e. Studies have shown that the diffusion rate for many new technologies is speeding up.
For example, it took decades for the telephone to achieve 50 percent penetration rates beginning in around , but it took less than five years for cellphones to achieve the same penetration rates.
In order to explain the increasing pace of adoption, some have pointed to supply-side issues such as reduced barriers to entry and lower costs of innovation,   while others have argued that consumers drive adoption rates because they place a high value on the convenience of new innovations.
Brand-switching occurs when a consumer chooses to purchase a brand that is different to the regular or customary brand purchased. Consumers switch brands for a variety of reasons including that the store did not have the regular brand or the consumer's desire for variety or novelty in brand choice. In the fast moving consumer goods market FMCG , the incidence of switching is relatively high.
A great deal of marketing activity is targeted at brand-switchers. Marketers are particularly interested in understanding the factors that lead to brand-switching. The concept of switching costs also known as switching barriers is pertinent to the understanding of brand switching.
Switching costs refer to the costs incurred by a consumer when he or she switches from one supplier to another or from one brand to another. Although switching costs are often monetary, the concept can also refer to psychological costs such as time, effort and inconvenience incurred as a result of switching.
When switching costs are relatively low, as in the case of many fast moving consumer goods FMCG , the incidence of brand switching tends to be higher. An example of switching that includes both monetary and psychological costs is when Android or Apple users wish to switch to a different platform, they would need to sacrifice their data, including purchased music tracks, apps or media and may also need to learn new routines to become an efficient user.
Channel-switching not to be confused with zapping or channel surfing on TV is the action of consumers switching to a different purchasing environment or distribution channel to purchase goods, such as switching from brick-and-mortar stores to online catalogues, or the internet. For instance, in Australia and New Zealand, following a relaxation of laws prohibiting supermarkets from selling therapeutic goods, consumers are gradually switching away from pharmacies and towards supermarkets for the purchase of minor analgesics, cough and cold preparations and complementary medicines such as vitamins and herbal remedies.
For the consumer, channel switching offers a more diverse shopping experience. However, marketers need to be alert to channel switching because of its potential to erode market share.
Evidence of channel switching can suggest that disruptive forces are at play, and that consumer behaviour is undergoing fundamental changes. A consumer may be prompted to switch channels when the product or service can be found cheaper, when superior models become available, when a wider range is offered, or simply because it is more convenient to shop through a different channel e. Impulse purchases are unplanned purchases.
Recent research carried out by Nielsen International suggests that about 72 percent of FMCG purchases are planned, but that 28 percent of supermarket purchases are unplanned or impulse purchases. Retailers use insights from this type of research to design stores in ways that maximise opportunities for impulse-buying.
Research suggests that affect plays an important role in underlying attitudes, as well as shaping evaluation and decision-making. Consumer researchers have noted the difficulties separating the concepts of affect, emotions, feelings and mood.
Customer behavior models are typically based on data mining of customer data, and each model is designed to answer one question at one point in time. For example, a customer model can be used to predict what a particular group of customers will do in response to a particular marketing action.
Consumer behavior is the study of how people make decisions about what they buy, want, need, or act in regards to a product, service, or company. It is critical to understand consumer behavior to.
Industrial and Individual Consumer Behavior Models. Understanding buyer behaviors plays an important part in marketing. Considerable research on buyer behavior both at conceptual level and empirical level has been accumulated. Consumer behavior models Howard sheth model Customer lacks well defined evaluative criteria to judge the product Searches for information After passing his own personality, his intake is modified Evaluates the brands available Seeks greatest potential of satisfying his motives.
The economic model of consumer behavior focuses on the idea that a consumer’s buying pattern is based on the idea of getting the most benefits while minimizing costs. Thus, one can predict consumer behavior based on economic indicators such as the consumer’s purchasing power and the price of competitive products. Models of consumer behaviour 1. By: Vikram.G.B Lecturer, P.G. Dept. of Commerce Vivekananda Degree College 2. Nicosia model of consumer behaviour Anju Mariyams. Engel kollat blackwell model ANOOP S NAIR. Chap 2 behaviour models zahirul baharin. Consumer behavior and factors influencing consumer behavior.