Major Factors Influencing Consumer

Behavior
1. Psychological Factors
2. Social Factors
3. Cultural Factors
4. Personal Factors
5. Economic Factors

Consumer behavior is influenced by many different factors. A marketer should try to

1. Psychological Factors
Human psychology is a major determinant of consumer behavior. These factors are difficult to
measure but are powerful enough to influence a buying decision.

Some of the important psychological factors are:

i. Motivation
When a person is motivated enough, it influences the buying behaviour of the person. A person
has many needs such as the social needs, basic needs, security needs, esteem needs and self-
actualization needs. Out of all these needs, the basic needs and security needs take a position
above all other needs. Hence basic needs and security needs have the power to motivate a
consumer to buy products and services.

ii. Perception

Consumer perception is a major factor that influences consumer behavior. Customer

When a customer sees advertisements, promotions, customer reviews, social media feedback,
etc. relating to a product, they develop an impression about the product. Hence consumer
perception becomes a great influence on the buying decision of consumers.

iii. Learning

When a person buys a product, he/she gets to learn something more about the product.
Learning comes over a period of time through experience. A consumer’s learning
depends on skills and knowledge. While a skill can be gained through practice,
knowledge can be acquired only through experience.

Learning can be either conditional or cognitive. In conditional learning the consumer

Whereas in cognitive learning, the consumer will apply his knowledge and skills to
find satisfaction and a solution from the product that he buys.

iv. Attitudes and Beliefs

Consumers have certain attitude and beliefs which influence the buying decisions of a
consumer. Based on this attitude, the consumer behaves in a particular way towards a
product. This attitude plays a significant role in defining the brand image of a product.
Hence, the marketers try hard to understand the attitude of a consumer to design their
marketing campaigns.

2. Social Factors
Humans are social beings and they live around many people who influence their buying
behavior. Human try to imitate other humans and also wish to be socially accepted in the society.
Hence their buying behavior is influenced by other people around them. These factors are
considered as social factors. Some of the social factors are:
i. Family

Family plays a significant role in shaping the buying behavior of a person. A person develops
preferences from his childhood by watching family buy products and continues to buy the same
products even when they grow up.

ii. Reference Groups

Reference group is a group of people with whom a person associates himself. Generally, all the
people in the reference group have common buying behavior and influence each other.

iii. Roles and status

A person is influenced by the role that he holds in the society. If a person is in a high position,
his buying behavior will be influenced largely by his status. A person who is a Chief Executive
Officer in a company will buy according to his status while a staff or an employee of the same
company will have different buying pattern.

3. Cultural factors
A group of people are associated with a set of values and ideologies that belong to a particular
community. When a person comes from a particular community, his/her behavior is highly
influenced by the culture relating to that particular community. Some of the cultural factors are:

i. Culture

Cultural Factors have strong influence on consumer buyer behavior. Cultural Factors include the
basic values, needs, wants, preferences, perceptions, and behaviors that are observed and learned
by a consumer from their near family members and other important people around them.

ii. Subculture

Within a cultural group, there exists many subcultures. These subcultural groups share the same
set of beliefs and values. Subcultures can consist of people from different religion, caste,
geographies and nationalities. These subcultures by itself form a customer segment.

iii. Social Class

Each and every society across the globe has form of social class. The social class is not just
determined by the income, but also other factors such as the occupation, family background,
education and residence location. Social class is important to predict the consumer behavior.

4. Personal Factors
Factors that are personal to the consumers influence their buying behavior. These personal
factors differ from person to person, thereby producing different perceptions and consumer
behavior.

Some of the personal factors are:

i. Age

Age is a major factor that influences buying behavior. The buying choices of youth differ from
that of middle-aged people. Elderly people have a totally different buying behavior. Teenagers
will be more interested in buying colorful clothes and beauty products. Middle-aged are focused
on house, property and vehicle for the family.

ii. Income

Income has the ability to influence the buying behavior of a person. Higher income gives higher
purchasing power to consumers. When a consumer has higher disposable income, it gives more
opportunity for the consumer to spend on luxurious products. Whereas low-income or middle-
income group consumers spend most of their income on basic needs such as groceries and
clothes.

iii. Occupation

Occupation of a consumer influences the buying behavior. A person tends to buy things that are
appropriate to this/her profession. For example, a doctor would buy clothes according to this
profession while a professor will have different buying pattern.

iv. Lifestyle

Lifestyle is an attitude, and a way in which an individual stay in the society. The buying behavior
is highly influenced by the lifestyle of a consumer. For example when a consumer leads a
healthy lifestyle, then the products he buys will relate to healthy alternatives to junk food.

5. Economic Factors
The consumer buying habits and decisions greatly depend on the economic situation
of a country or a market. When a nation is prosperous, the economy is strong, which
leads to the greater money supply in the market and higher purchasing power for
consumers. When consumers experience a positive economic environment, they are
more confident to spend on buying products.

Whereas, a weak economy reflects a struggling market that is impacted by unemployment and
lower purchasing power.
Economic factors bear a significant influence on the buying decision of a consumer. Some of the
important economic factors are:

i. Personal Income

When a person has a higher disposable income, the purchasing power increases simultaneously.
Disposable income refers to the money that is left after spending towards the basic needs of a
person.

When there is an increase in disposable income, it leads to higher expenditure on various items.
But when the disposable income reduces, parallelly the spending on multiple items also reduced.

ii. Family Income

Family income is the total income from all the members of a family. When more people are
earning in the family, there is more income available for shopping basic needs and luxuries.
Higher family income influences the people in the family to buy more. When there is a surplus
income available for the family, the tendency is to buy more luxury items which otherwise a
person might not have been able to buy.

iii. Consumer Credit

When a consumer is offered easy credit to purchase goods, it promotes higher spending. Sellers
are making it easy for the consumers to avail credit in the form of credit cards, easy installments,
bank loans, hire purchase, and many such other credit options. When there is higher credit
available to consumers, the purchase of comfort and luxury items increases.

iv. Liquid Assets

Consumers who have liquid assets tend to spend more on comfort and luxuries. Liquid assets are
those assets, which can be converted into cash very easily. Cash in hand, bank savings and
securities are some examples of liquid assets. When a consumer has higher liquid assets, it gives
him more confidence to buy luxury goods.

v. Savings

A consumer is highly influenced by the amount of savings he/she wishes to set aside from his
income. If a consumer decided to save more, then his expenditure on buying reduces. Whereas if
a consumer is interested in saving more, then most of his income will go towards buying
products.