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Factors Influencing Consumer Buying Behaviour

The document outlines various factors influencing consumer buying behavior, categorized into psychological, personal, cultural, social, economic, and environmental factors. It emphasizes the importance of understanding consumer behavior for effective marketing strategies, enhancing customer relationships, and identifying market opportunities. Key insights include the impact of consumer needs, social influences, and economic conditions on purchasing decisions.

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14 views3 pages

Factors Influencing Consumer Buying Behaviour

The document outlines various factors influencing consumer buying behavior, categorized into psychological, personal, cultural, social, economic, and environmental factors. It emphasizes the importance of understanding consumer behavior for effective marketing strategies, enhancing customer relationships, and identifying market opportunities. Key insights include the impact of consumer needs, social influences, and economic conditions on purchasing decisions.

Uploaded by

sweta
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Factors influencing consumer buying behaviour

Consumer Behaviour: Meaning, Characteristics & Factors

Mnemonic: "Pigs Sing Cool Pop Evenings"

(1) P - Psychological Factors


(2) S - Social Factors
(3) C - Cultural Factors
(4) P - Personal Factors
(5) E - Economic Factors

Psychological Factors
Example: People are more likely to buy a product sold for 999 than 1000. The ending in ‘…
99’ is perceived as cheaper by the brain.
 Consumer Needs and Motivation: This factor explores the basic human needs that drive
buying decisions, as outlined in Maslow’s hierarchy of needs.
 Reference Groups: People are influenced by the groups they belong to or admire, impacting
their choices.
 Roles and Status: Social roles and positions can affect what individuals purchase.
 Family: Family dynamics and roles play a crucial role in consumer choices.
 Perception: How consumers perceive products and brands can heavily influence their
decisions.

Personal Factors

 Age: Different age groups have varying preferences and buying patterns.
 Stages in the Life Cycle: Life events and stages, such as getting married or having children,
impact consumer behaviour.
 Learning: Consumer behaviour can change as people learn more about products or
services.

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 Beliefs and Attitudes: Personal beliefs and attitudes shape consumer choices.

Cultural Factors

 Culture: Cultural values and norms have a significant influence on what people buy.
 Subculture: Smaller cultural groups within a society can have distinct preferences.
 Social Class: Social status and class affect consumer decisions.

Social Factors

 Status: One’s social status or position can impact what they purchase.
 Lifestyle: A person’s way of living influences their buying choices.
 Occupation and Economic Status: Employment and financial situation play a role in
consumer behaviour.
 Personality: Individual personality traits can affect preferences and decisions.

Economic Factors

 Personal Income: The amount of money an individual earns affects their purchasing power.
 Family Income: Household income impacts overall spending.
 Income Expectations: What people anticipate in terms of future income can influence current
buying decisions.
 Savings: The level of savings an individual has can affect their willingness to spend.
 Liquidity of funds: Access to liquid assets, like cash or credit, can influence spending habits.
 Consumer Credit: Availability of credit can impact purchasing decisions. (Example: iphone
EMIs)

Environmental Factors

 Political Situation: The political climate can influence consumer confidence and behaviour.
 Legal Forces: Laws and regulations, such as consumer protection laws, affect the market.
 Technological Advancements: Technological innovations shape consumer preferences and
choices.
 Ethical Considerations: Consumer decisions may be influenced by ethical concerns related
to products or brands.

Why is Understanding Consumer Behavior Important?


The importance of consumer behavior in marketing is far reaching. The insights you gain
from studying and understanding consumer behavior will help you make informed choices
about how to plan out your marketing strategy so that you reach your audience most
efficiently. You’ll have a better grasp on the types of messaging to include on your website
and social media platforms and in your advertising. It’s all about creating the right image for
the right audience.

Consumer behavior is important because it provides many benefits, including:

1) Consumer differentiation While you may have already established a targeted


demographic for your business, expanding your understanding of consumer
behaviors can help you identify variations among your individual customers. Each

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new sub-group of consumers has its own unique characteristics that can then be
targeted and marketed to more precisely.
2) Building stronger customer relationships Understanding consumer behavior is
important because it helps you create a relationship of understanding and trust with
your consumers, which can ultimately result in an increase in brand loyalty. It shows
the consumer that you’ve done your homework, and that you understand their wants
and needs.

3) Increased brand loyalty and trust Knowing your customers helps you communicate
that you have the solutions they’re looking for. Building that type of rapport with your
audience is hugely valuable in securing and retaining a customer base. According to
Salesforce, a leading customer relationship management platform, 73% of
consumers expect companies to understand their needs and expectations, and
organizations that lead in customer experience see a cumulative total return of
+22.5% on the S&P 500 index compared to their competitors.

4) Informed marketing decisions Paying close, regular attention to consumer


behavior can help you spot trends in their actions as they begin to emerge. The
sooner you spot these trends, the more efficiently you can shift your marketing efforts
to support them – ensuring you don’t waste precious resources on outdated
information and keeping you relevant and ahead of the curve.

5) Identifying room for new products Another thing the data allows you to keep an
eye on is an opening for the development of new products or services. If your
customers are consistently performing a particular behavior, or expressing needs that
your business does not currently address, you may find that there’s room in the
market for you to expand your offerings.

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