The

Consumer’s
Culture And
Psychological
Core
Module 2
 This week we will continue our in depth
understanding towards the implications of
Overview psychological factors in consumer behavior.
After revealing and viewing the module
content you will complete your second
written assignment and/or accomplish a
quiz. Everything that you need to
successfully complete this assignment is
located in the Module Assessments, but if
you have questions – please, do not
hesitate to ask.
 After you complete the required assignments,

Learning you will be able to:

Objectives 1. Provide a more comprehensive definition to

the psychological factors of consumer behavior;

2. Discuss the components of psychological

factors; and

3. Practice psychological factors in influencing

consumer’s decision
Content

Consumer psychology studies how and why people buy and use
products and services. In today’s Western society, buying and
consuming are central to daily life. Understanding consumer
behavior helps businesses and psychologists see how
consumption shapes actions and decisions. Researchers began
exploring these behaviors in the early 20th century, laying the
groundwork for modern consumer psychology. This field aims to
clarify the relationship between buying habits and human
behavior.
What is Consumer Psychology?

Consumer psychology examines how and why people engage in buying

and using products, focusing on their thought processes and behaviors. It
draws from fields like psychology, marketing, economics, and sociology to
study areas like decision-making, motivation, perception, and advertising’s
influence on behavior.

While much of its research supports marketing and sales strategies, it also
explores broader impacts, such as how consumption shape's identity,
affects children, and influences the environment. The discipline aims to
understand consumer actions and their effects on individuals and society.
How Do Psychological Factors Play a
Role in Consumer Behavior?

There are four psychological factors that influence consumer behavior: Motivation,
perception, learning, and attitude or belief system. Motivation speaks to the
internal needs of the consumer. Understanding how to motivate your customer is a
powerful tool. The way your target customer perceives the world or learns about
your product, whether online or in person, can also influence behavior. Finally, belief
systems have the ability to influence all of the above. For example, some people
learn best visually. Professional pictures and images of your product or service can
communicate a thousand words regardless of belief system. This explains why
pictures and images are so important for marketing. Consumers make purchase
decisions every day. When they make a decision about your product, they're thinking
about solving a need. That need may be driven by a variety of factors. Each of the
factors listed above can be tied back to ways a small business can leverage its
storefront or website to increase the probability of a sale. Keep these factors in mind
Types of Consumer Behavior:

1. Complex buying behavior This type of behavior is encountered when consumers are buying an expensive,
infrequently bought product. They are highly involved in the purchase process and consumers' research before
committing to a high-value investment. Imagine buying a house or a car; these are an example of a complex buying
behavior.

2. Dissonance-reducing buying behavior The consumer is highly involved in the purchase process but has
difficulties determining the differences between brands. 'Dissonance' can occur when the consumer worries that they
will regret their choice. Imagine you are buying a lawnmower. You will choose one based on price and convenience, but
after the purchase, you will seek confirmation that you've made the right choice.

3. Habitual buying behavior Habitual purchases are characterized by the fact that the consumer has very little
involvement in the product or brand category. Imagine grocery shopping: you go to the store and buy your preferred
type of bread. You are exhibiting a habitual pattern, not strong brand loyalty.

4. Variety seeking behavior In this situation, a consumer purchases a different product not because they weren't
satisfied with the previous one, but because they seek variety. Like when you are trying out new shower gel scents.
Customer Behavior Pattern

Buying behavior patterns are not synonymous with buying habits. Habits are developed as
tendencies towards an action and they become spontaneous over time, while patterns show a
predictable mental design.

Customer behavior patterns can be grouped into:

1. Place of purchase

Most of the time, customers will divide their purchases between several stores even if all items
are available in the same store. Think of your favorite hypermarket: although you can find
clothes and shoes there as well, you're probably buying those from actual clothing brands.
Customer Behavior Pattern

2. Items purchased

Analyzing a shopping cart can give marketers lots of consumer insights about the
items that were purchased and how much of each item was purchased. Necessity
items can be bought in bulk while luxury items are more likely to be purchased less
frequently and in small quantities.

3. Time and frequency of purchase

Customers will go shopping according to their feasibility and will expect service even
during the oddest hours; especially now in the era of e-commerce where everything
is only a few clicks away.
Customer Behavior Pattern

4. Method of purchase

A customer can either walk into a store and buy an item right then and there or
order online and pay online via credit card or on delivery.

The way a customer chooses to purchase an item also says a lot about the type of
customer he is.
Customer Behavior Segmentation

Customer segmentation and identifying types of buyers have always been

important. Now that personalization and customer experience are factors that
determine a business success, effective segmentation is even more important.

Traditionally, most marketers use six primary types of behavioral segmentation.

1. Benefits sought

A customer who buys toothpaste can look for four different reasons: whitening,
sensitive teeth, flavor, or price.
Customer Behavior Segmentation

2. Occasion or timing-based

Occasion and timing-based behavioral segments refer to both universal and personal
occasions.

Recurring-personal occasions are purchasing patterns for an individual customer that

consistently repeat over a while.

Rare-personal occasions are also related to individual customers, but are more
irregular and spontaneous, and thus more difficult to predict.
Customer Behavior Segmentation

3. Usage rate

Product or service usage is another common way to segment customers by behavior,

based on the frequency at which a customer purchases from or interacts with a product
or service. Usage behavior can be a strong predictive indicator of loyalty or churn and,
therefore, lifetime value.

4. Brand Loyalty Status

Loyal customers are a business’s most valuable assets. They are cheaper to retain,
usually have the highest lifetime value, and can become brand advocates.
Customer Behavior Segmentation

5. User Status

There are many different possible user statuses you might have depending on your business. A few examples
are:

• Non-users
• Prospects
• First-time buyers
• Regular users
• Defectors (ex-customers who have switched to a competitor)

6. Customer Journey Stage

Segmenting the audience base on buyer readiness allows marketers to align communication and personalize
experiences to increase conversion at every stage.
Customer Behavior Segmentation

Here’s what these variables show you:

Recency – how recent a customer placed the last order on your website;

Frequency – how many times a customer purchased something from your website
in the analyzed period of time;

Monetary Value – how much each customer spent on your website since the first
order.
 The power of
communication
Customer Behavior Segmentation

The RFM model analysis can be executed in 2 ways:

Manually – exporting your database in a spreadsheet and analyzing your customers following the
rules for RFM analysis;

Automatically – through certain tools that are creating RFM dashboards.

RFM segmentation and analysis can reveal who your most loyal and profitable customers are and also:
• Reveal what brands and products are dragging your business down;
• Build custom recommendations for your customers;
• Solve certain Customer Experience problems.

Before making decisions based on gut feeling regarding your customers and your audience, observe
their behavior, listen to them and build a relationship that will make them stay loyal no matter how
aggressive your competitors are.
 Thank you


John Poul Delfin

Sheryn Delos Reyes
Kyan Villaruz
Earl Villasis