written by | September 27, 2022

What are the Major Factors Influencing Consumer Behaviour?

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Table of Content


Consumer behaviour involves how consumer(s) receive, reject, or accept, and select, buy, and use goods, ideas, and various services offered in the market. Also, after using the product, idea, or service, the consumer's reaction- whether they turn away or return asking for more- is part of the consumer behaviour. 

This article will discuss the types of consumer behaviour, factors influencing consumer behaviour, and other related information. 

Did you know?

A consumer and a customer are not the same. A customer purchases the goods, but it is not necessary that they will use them too. A consumer may not make the purchase but is the product's final user. 

Types of Consumer Behaviour

There are four types of consumer behaviour:

  • Complex buying behaviour: It is a situation where consumer is purchasing and there are difference in brands.
  • Dissonance-reducing buying behaviour: Such behavior occur when consumer is highly involved but notices little difference between brands.
  • Habitual buying behaviour: Habitual buying behavior happens when consumer involvement is low and the difference between brands is small. 
  • Variety-seeking behaviour: In this situation consumers switch among products, categories or brands to avoid decreasing utility for repeat purchases or consumption of similar products. 

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Importance of Consumer Behaviour

Understanding consumer behaviour holds major importance in a business's decision-making. By doing so, businesses can make better and more effective product and service decisions. By understanding the needs of the consumer, they can help and offer consumers better products, services, or deals.

Each consumer needs a different thought process and attitude towards specific products. When a company fails to understand consumers' reactions to a product, there is a high chance of product failure. Marketers need to understand consumer expectations. It assists them in understanding the psychology of the consumer. It is essential to access the kind of product liked by consumers so that they can release it to market.

This will help businesses to establish themselves in the market and get hold of the clientele. 

Factors Influencing Consumer Behaviour

There are several factors influencing consumer buying behaviour. They are:

Psychological Factors

Human psychology influences an individual’s thinking and hence also decisions regarding purchases. Some important psychological factors affecting consumer behaviour are: 

Motivation

The motivation to achieve or possess something is a strong emotion that influences a consumer's buying behaviour. An individual makes purchases mainly to fulfil his needs. Needs can be of different types- basic needs, security, social needs, need to enhance the status, and self-actualisation needs. Since basic and security needs are most important, the consumer is motivated to fulfil these needs first.

Perception

A consumer’s buying is also influenced by perception. An advertisement in the newspaper or roadside hoardings, a review, or feedback all form an image in the consumer’s mind about a particular product. This perception influences the consumer’s buying decision. 

Learning

Learning is of two types- conditional or cognitive. In either case, the consumer uses his knowledge and skill to purchase the product.

Attitudes and Credence 

Consumer buying is also influenced by preformed notions or attitudes and acceptance. The preformed notion regarding the quality of a product draws the consumer towards particular brands. Faith in the quality and performance of a product based on earlier experience of using it pulls the consumer towards the same product. Understanding this behaviour helps marketers to produce and market their products accordingly. 

Social Factors

Consumer buying behaviour is also affected by the people amongst whom they live and move around. The social factors involved are: 

Family

The family has a major influence on the buying behaviour of a consumer. A person’s likes and preferences are formed since childhood, so they buy certain products through habit and are guided by the belief that they are good even when the consumer has grown up. 

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Reference Groups

People with whom the consumer associates influence their buying choices. Usually, all members of such groups have common product choices, shopping outlets, and similar buying behaviour. 

Status

The status of an individual affects his spending. A person who is in a high post and moves around an elite posh circle will spend lavishly as they have to maintain status. Individuals with a lesser income will have a different buying pattern since their buying capacity differs from the elite group. 

Cultural Factor

People belonging to particular communities maintain certain ideologies and values. Their social class and culture highly influence their buying behaviour. 

Personal Factors

Personal factors differ from person to person, so there is no similarity in consumer behaviour. Personal factors include −

Age

Age plays a vital role in deciding the choices of individuals. There will be a difference between the purchases of school-going teenagers and college-going adults. Young couples spend on household items and luxury goods, whereas middle-aged people have a subdued choice. 

Income

The income level also decides an individual's buying capacity and behaviour. Consumers belonging to the higher income bracket have higher disposable income and splurge on indulgences besides the usual purchases. Individuals from the middle-income and low-income groups use most of their income to provide basic needs like groceries, clothes, and education to the family. 

Occupation

Individuals belonging to different occupations show different buying behaviour. A person from the corporate sector will spend on formal clothing while a creative designer or writer will go for casual wear. 

Lifestyle

Lifestyle is the way an individual lives in society. This, too, shapes their buying behaviour. A consumer indulging in a healthy lifestyle will shop for healthy foods and different outfits. Individuals who have to travel alone will invest in good, sturdy, well-fitting attire and so on. 

Economic Factors

The economy of a country somehow affects the buying habits of a consumer. A nation with a strong economy results in higher purchasing capacity for the consumer and thus increased money supply in the market. A nation with a weak economy has a weak market, consumers with low purchasing power and those plagued with unemployment have a bad impact on it. 

Some economic factors influencing consumer behaviour are as follows: 

Personal Income

After fulfilling the basic needs, a consumer with higher disposable income spends freely on other items and things of value and interest. With the decrease in disposable income, such spending is reduced.

Family Income

Family Income means the total income of all the earning members of the family. Several earning members result in higher income, and this increased income is substantial to fulfil basic needs and luxuries. So higher family income results in the shoppers buying freely and more. 

Consumer Credit

Easy credit for purchasing goods results in increased spending. Availing credit through credit cards, bank loans, hire purchases, easy instalments, etc., results in buying luxury and comfort items. 

Liquid Assets

Consumers use liquid assets to spend on comfort and luxuries. Liquid assets like bank savings, securities, cash in hand, and others provide the consumer with confidence towards spending on luxury items. 

Savings

A consumer’s decision to save a larger part of his salary/ income decreases their spending, but if the consumer wishes to save a smaller amount, then most of his money will be spent on buying different products.

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Conclusion

These are some basic factors that influence consumer behaviour, and marketers need to be aware of them to make the right strategic marketing choices. Whether big or small, we make judgments on purchases almost every day, considering meeting a need before making any purchasing decisions. 

Various factors, many of which have been carefully noted here, can influence this need. Businesses can use each of these elements as a tool to improve their chances of making sales. We hope that this article has been able to provide you with a thorough understanding of these aspects.

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FAQs

Q: How does consumer credit influence buying behaviour?

Ans:

Easy credit for purchasing goods results in increased spending. Availing credit through credit cards, bank loans, hire purchases, easy instalments, etc., results in purchasing luxury and comfort items. 

Q: What are the economic factors that influence consumer behaviour?

Ans:

Following are the economic factors that influence consumer behaviour:

  • Personal Income
  • Family Income
  • Consumer Credit
  • Liquid Assets
  • Savings

Q: What are the factors affecting consumer behaviour?

Ans:

The factors influencing consumer behaviour are: 

  • Psychological Factors
  • Social Factors
  • Cultural factors
  • Personal Factors
  • Economic Factors

Q: What is Dissonance- reducing buying behaviour?

Ans:

Dissonance- reducing buying behaviour means that a consumer has selected a product and is willing to purchase it but is not sure if it will be the right purchase. They worry that they might have to regret his decision. This perplexing state of mind and the need for confirmation that they have made a correct choice is a part of such behaviour.

Q: What are the psychological factors influencing consumer buying decisions?

Ans:

Human psychology influences an individual’s thinking and hence also decisions regarding purchases. Some important psychological factors affecting consumer behaviour are: 

  • Motivation
  • Perception
  • Learning
  • Attitudes and Beliefs

Q: What are the types of consumer behaviour?

Ans:

There are four types of consumer behaviours:

  • Complex buying behaviour
  • Dissonance-reducing buying behaviour
  • Habitual buying behaviour
  • Variety-seeking behaviour

Q: What is consumer behaviour?

Ans:

Consumer behaviour involves how consumer(s) receive, reject, or accept, and select, buy, and use goods, ideas, and various services offered in the market. Also, after using the product, idea, or service, the consumer's reaction- whether they turn away or return asking for more- is part of the consumer behaviour.

Q: What is the importance of consumer Behaviour?

Ans:

Consumer Behaviour is the study that analyses the consumer to find out how they choose/select a product or service. Consumer behaviour is important as it helps to make better decisions on products and services. Knowing about consumer behaviour helps to adapt offerings to better suit the desire of the target market.

Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.
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Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.