There is a growing literature on the importance of consumer behavior in the field of marketing. In today’s era of the ever changing business environment, many firms strive hard for their survival and their stake in the market. With the advancement of technology, the trend toward globalization, the increasing socioeconomic involvement of businesses in foreign countries, and the rising political interference in corporate world, it is becoming very challenging for organizations to manage and develop their business. Many have come up with several strategies to optimize the use of their resources. They also make every effort to minimize their costs and generate maximum revenue.
However, organizations cannot accomplish their objectives if they have insubstantial marketing strategies. When it comes to marketing strategies, the customer is always bound to be the focus. Customers have a crucial role in the success of any organization since they are the people who generate revenue for the organization by buying, using, and influencing others to buy their products and services. Hence, companies always want to know what makes the customer buy or not to buy their products and services (Clopton, 1984). Marketing is about creating demand for the organization’s products and services and fulfilling its customer’s needs—present or future. For this reason, it is imperative that marketing professionals recognize the manner in which the consumers react when they are exposed to n number of available options varying in price, payment mode, and purchasing and delivering method.
Consumers do not purchase a product and service only because of its actual utility, but also because of its perceived worth. There are several reasons an individual may purchase a particular thing. For example, they may actually need it, or perhaps they just want to try it out, or buy it because the respect the opinion of someone who recommended that product (Esso & Dibb, 2004; Garbarino & Strahilevitz, 2004).
It has become difficult for buyers to make a purchase decision as a result of so many available options that are very similar. It is difficult for consumers to decide on what offerings they should spend their time, efforts, energy, and money. On the other hand, it is very difficult for organizations to know on what offerings the customer will spend their time, efforts, energy, and money. Therefore, it is crucial for marketing teams to understand the factors that impact customers’ purchasing processes and buying decisions.
This paper highlights the importance of consumer buying behavior in the marketing field and analyzes the theoretical aspects of consumer buying behavior and the factors that influence it. This paper also reviews the relationship between consumer buying behavior and the factors that influence consumers’ purchasing processes and purchase decisions. Additionally, it classifies the factors in different categories.
There is abundant attention paid on the four Ps of marketing—product, price, place, and promotion—and there has sufficient research in this area. However, there is a lack of research pertaining to the relationship between consumer buying behavior and the factors that influence consumers’ purchasing processes and purchase decisions. This paper will help marketing managers gain a better understanding about what affects consumers’ decision making and will aid them in using these factors to construct better marketing strategies.
Recently combining research methods (e.g., Gable, 1994, p. 112) has become increasingly important, in particular when pursuing the goal of gaining “rich theoretical insights” (Dyer & Wilkins, 1991, p. 613). One form of “developing new theoretical insights” is the review-centric research approach in which a researcher reviews “existing theory and research” (LePine & Wilcox-King, 2010, p. 506), but the argument can be made that we also can include case study research findings that are based on the real world observation of practitioners and organizations (e.g., Dyer & WIlkins, 1991; Eisenhardt, 1989). In the research presented here, the focus is on combining the most important “previously established studies and concepts” that I have identified in the academic literature, based on which I provide a synthesis that “advances our understanding” LePine & Wilcox-King, 2010, p. 507). In this study I identify the most important success factors that help in the current business or organizational situation to build our goal to accomplish a competitive advantage. My research approach incorporates the “interpretive paradigm,” in which a rich description of each factor in our current organization context is established (Dyer & WIlkins, 1991, p. 615).
Internal and External Factors Affecting Consumer Buying Behavior
The main objective of this research was to develop and review a conceptual model that depicts the relationship between buying behavior and four factors: cultural, social, personal, and psychological. The model presented in the figure above clearly identifies and classifies (internal and external) the important factors affecting the consumer buyer behavior. In addition, it depicts the relationship between buying behavior and main four factors.
There is much to discuss about the roles that these specific factors play in determining the consumer’s behavior. In marketing, the functions of consumer buying behavior and the factors influencing it are correlated. For this reason, the outcome of the purchasing process may depend on various factors. This model focuses on understanding consumers’ buying behaviors and the relationship between consumers’ buying behaviors and the impacting factors. First, it is important to understand the meaning of consumer behavior and second, it is important to understand the impacting factors and their meaning. A complete explanation of these factors and their subfactors is presented below.
Consumer behavior involves the study of individuals and the method they employ to choose, use, and set out products and services to fulfill their wants, as well as the effect that these method have on the consumer and the society as a whole. Consumer behavior refers to all the thoughts, feelings, and actions an individual experiences before or while buying any product, service, or idea. Buyer behavior is the concept that answers what, why, how, when, and where an individual makes purchase. As a result, the outcome of buyer behavior is the buyer’s decision.
The entire purchasing process involves considering what should be bought, which brand is good or suitable, from where or whom should the purchase be made, when to purchase, how much to spend, how much time to devote to a purchase, and in what intervals to buy. Consequently, the end result of the buyer behavior is the customer’s final decision regarding the product choice, brand choice, dealer choice, purchase timing, purchase amount, and purchase frequency. Consumer buying behavior “is a confluence of at least three streams of social science—i.e., individual psychology, social psychology, and cultural anthropology” Ramachander, 1988, p. 2).
There are several factors that make a consumer behave in a certain manner. The factors under discussion help answer a consumer’s questions about what to buy, whether to buy it, where to buy it, why, when, and how. These factors knowingly or unknowingly influence the consumer; they may be within the buyer’s control or beyond their control.
These factors can be classified into external (cultural and social) and internal (personal and psychological) factors.
Culture deeply influences the buying behavior of an individual, and thus, marketing professionals should focus on segmenting their markets based on the cultural needs and wants of consumers. “Culture represents the mix of norms, financial and moral values, convictions, attitudes, and habits developed in time by mankind, which the members of the society share and which highly determine their behavior, including the purchase and consumption behavior” (Radulescu, Cetina, & Orzan, 2012, p. 2). As Adersone and Gaile-Sarkane (2008) state, “The concept of culture has two primary implications for marketing: it determines the most basic values that influence consumer behavior patterns, and it can be used to distinguish subcultures that represent substantial market segments and opportunities” (p. 4). Furthermore, “an individual’s consumption behavior may be viewed and imitated or rejected by others. It can then become the group’s norm of behavior and be identified as part of the culture of a given population” (Luna & Gupta, 2001, p. 2).
Adersone and Gaile-Sarkane (2008) further point out, “The process of absorbing a culture is called socialization. It continues throughout one’s life and produces many specific preferences for products and services, shopping patterns, and interactions with others. Applied to marketing and consumer behavior, it is referred to as consumer socialization” (p. 2). For example, “the advertisement which motivates a British or American housewife or teenager to buy a cosmetic or a pair of jeans (to take a concrete example) may not suit the sociocultural background of an Indian target for the same product” (Ramachander, 1988, p. 5). Cultural factors include the following:
· buyer culture—Culture refers to the entire way of life of a group of people from a particular society, place, or time. Culture encompasses every aspect of life including the thoughts, behavior, practices, technology, rituals, norms, language, beliefs, ethics, lifestyle, institution, and art of any given group of individuals. Therefore, individuals differing in cultural background may have different views about a particular product of service. They may have preference for goods and services which suit their culture. For example, wearing a western outfit to festivals is not accepted in Indian culture.
· subculture—Every culture consists of several varied subcultures, such as, nationalities, geographic regions, racial groups, religions, etc. Subculture can be thought of as a group of people who have common experiences and situations.
· social class—Members of every culture have differences in income, profession, and education. These divisions can be referred to as social classes. People from the same social class generally have common interests and exhibit similar behaviors.
“Social factors also impact the buying behavior of consumers. The important social factors are: reference groups, family, role, and status” (Gajjar, 2013, p. 2). “Social criteria concern the impact that the purchase makes on the person’s perceived relationships with other people and the influence of social norms on the person (Andersone & Gaile-Sarkane, 2008, p. 2). According to Ramachander (1988), “The importance attached to children, to education, to health, to husband’s status, the type of house in which one lives and display of consumer durables and other status symbols are indeed all very relevant to buyer behavior of the housewife” (p. 5). Therefore, studying the following relevant social factors will improve firms’ marketing effectiveness:
· reference groups—Individuals are knowingly or unknowingly a part of some groups. For example, female students studying at a particular university are a part of the female student group in that university. The groups one belongs to are known as membership groups, and the groups one compares oneself against to evaluate one’s own or the group’s achievements, behavior, or attitudes, are called reference groups.
· family—The preferences and opinions of family members have great influence on an individual’s or the family’s purchases. “The habits in terms of consumption are influenced… by the family, in relation to its functions—traditional or modern, with a less significant role, as a consequence of involving other social groups and institutions” (Radulescu, Cetina, & Orzan, 2012, p. 3).
· role and status—The role individuals perform and the status they have in the group determine their position in the group. Thus, they tend to select and use goods that suit their position.
A buyer’s purchasing process is influenced by personal factors that are unique for every individual. “The decisions of a buyer/consumer are also influenced by personal characteristics, especially by age and the stage of the life cycle that the consumer crosses, sex, occupation, financial status, lifestyle, personality and opinion of self” (Radulescu, Cetina, & Orzan, 2012, p. 3). Furthermore, “Demographic factors play an important role in the consumer purchase process. income, age, occupation, and a myriad of other demographics can influence decision making at every step in the process” (Andersone & Gaile-Sarkane, 2008, p. 5). For example, “in the family, women are those who influence the consumption decision especially for children and old people” (Radulescu, Cetina, & Orzan, 2012, p. 4).
Personal factors that affect the purchasing process include the following:
· age—Obviously the individual’s needs depend on his or her age. Wants and preferences change as a person’s age changes. At every stage in a human’s life, his or her needs and desires are different. For example, a 70-year-old diabetic patient will not regularly buy high-calorie foods and high-sugar chocolates, whereas a 10-year-old boy would like to buy these sweets very often.
· education—The educational level or educational field also determines the behavior of the consumers. People with different levels of education may also differ in their ability to collect, process, and analyze information. The educational field also has an impact on the buying behavior of consumers. For example, doctors may be more inclined to buy nutritious food, as they are aware about the advantages of a healthful diet.
· profession—The occupation of an individual impacts his or her buying decisions. Individuals select items that suit their profession or are required for them in their professional life. For example, a project manager may purchase more issues of the PM Network magazine as compared to general public.
· income—Obviously, everyone thinks about their income and expenditure before spending. Therefore, the economic condition of individuals influence their target price range for a product. Consumers always hunt for economic deals; however, if the economic condition of the buyer is very good, he or she may buy premium products.
· personality—Personality determines how a person behaves in a given situation and interacts with others. A person’s personality affects his or her inclination toward products that suit their personality. However, it is difficult to identify the association between the individual personality and the pattern of exhibited behavior.
· lifestyle—Lifestyle is the way one lives and connects with others. “Lifestyle describes a person’s pattern of living as expressed in activities, interests, and opinions. Lifestyle traits are more concrete than personality traits and more directly linked to the acquisition, use, and disposition of goods and services” (Andersone & Gaile-Sarkane, 2008, p. 4).
An Individual’s perception, motivation, learning, beliefs, and attitudes are the main psychological factors that affect consumer buying behavior. The value of a product or service for any individual depends on how they perceive it, what attitude they have toward it, what they believe about it, and what motivates their purchase. “When analyzing the process by which consumers make purchase decisions, marketers should understand such psychological factors as motivation, perception, learning, personality, and attitudes, because they help explain the why of consumer behavior” (Andersone & Gaile-Sarkane, 2008, p. 5). According to Stávková, Stejskal, and Toufarová (2008), “Consumers’ skills and knowledge are connected to learning and predestinate changes of behavior. Therefore to cause changes of consumer behavior concerning the concrete product, it is necessary to give adequate information. Knowledge and positive or negative feelings influence humans’ perception and consequently decision making and behavior” ( p. 2).
Consider the effect of the following psychological factors on buying behavior:
· perception—Perception is the process by which one finds, analyzes, and makes conclusions from internal and external information for their exploitation. Two individuals exposed to exactly same marketing communication may have different perceptions of the same product. For example, “Elders prefer hospitalization rather than ambulatory treatment as a consequence of the perception that they are better cared after in the hospital, while younger people prefer ambulatory treatment and investigations” (Radulescu, Cetina, & Orzan, 2012, p. 3).
· motivation—There are several reasons behind why an individual purchases anything. They may have several justified grounds that form the basis for a buying decision. These reasons may be referred as motives. “Motive means the inner driving force that orients human/consumers’ activities towards meeting the needs or achievement of the definite aim. In every decision-making process several motives play a role, not only one” (Stávková, Stejskal, and Toufarová, 2008, p. 2).
· learning—Individuals learn from their past experience, current observations, and interaction with others. Then they make use of their learning while making any buying decisions. They collect information from several sources and use it while making any decision.
· beliefs and attitudes—Beliefs are the feelings and thoughts that one strongly believes to be true about something. Attitudes are the individual positive or negative evaluations regarding something. Purchasers tend to have certain beliefs and attitudes toward different products. These beliefs and attitudes form the brand image of the product and thus impact the final decision of the purchaser. That is why marketers are concerned about the beliefs and attitudes the customers have about the product, service, or idea. Marketers attempt to alter the beliefs and attitudes of consumers through aggressive marketing campaigns.
Consumer behavior refers to all the thoughts, feelings, and actions that an individual has or takes before or while buying any product, service, or idea. Buyer behavior is the concept that answers what, why, how, when, and where an individual makes purchase. The main factors that have immense impact on the buying process and final decision of consumers are cultural, social, personal, and physiological.
The cultural background of the consumer plays a key role in decision making. People from different culture have different opinions about the same product; as a result, marketers should focus on segmenting their markets based on the cultural needs and wants of consumers (Luna & Gupta, 2001; Henry, 1976; Kacen & Lee, 2002; Knight & Calantone, 2000). It is imperative that organizations understand the importance of culture in the buyer’s life. They should try to understand aspects of every culture that they wish to target.
Additionally, social factors also have considerable impact on the buyer behavior, as every individual is concerned about how other people from their society see them. Their status in the society and people’s views about them matter a lot to an individual. Therefore, the social factors also impact the way the act and behave, leading to an impact on their purchasing decisions (Chiou & Pan, 2008; Carrington, Neville, & Whitwell, 2010). It is vital that marketing professionals study the personal factors and figure out suitable marketing plans. Subsequently, it is vital that organizations examine such social factors that influence the buyer’s behavior to implement effective marketing strategies.
Moreover, personal factors are unique to every individual and also drive the behavior of individuals. The personal characteristics of individuals have significant impact on what their needs are, what they select, what they like, and what they consider valuable (Charles, 2012; Bearden, Netemeyer, & Teel, 1989). Consequently, these personal factors govern their purchase behavior (Fischer & Arnold, 1994). It is very necessary that marketing professionals study the personal factors and figure out suitable marketing plans.
Furthermore, psychological factors have a substantial impact on the buyer behavior. The purchase decision is the reflection of an individual’s inner feelings and thoughts (Vinson, Scott, & Lamont, 1977; McGuire, 1976). The study of psychological factors affecting consumer buying behavior will help marketers launch smarter marketing plans.
These main external and internal factors have several subfactors that influence buyer behavior. The chief subfactors identified from this research are as follows (Andersone & Gaile-Sarkane, 2008; Gajjar, 2013; Radulescu, Cetina, & Orzan, 2012; Stávková, Stejskal, & Toufarová, 2008):
· buyer culture
· social class
· reference groups
· role and status
· beliefs and attitudes
This research suggests that marketers should evaluate the factors that influence the “to buy or not to buy decision” of the consumers. Consumers are influenced by many internal and external factors, knowingly or unknowingly. For this reason, even after identifying all the impacting factors, the consumer’s behavior is very complex to predict. Furthermore, it is difficult to know the degree to which a specific factor influences the decision making of consumers. As a consequence, it ends up being very difficult to predict the exact behavior even after taking into consideration all the factors. Hence, I advocate that marketers should undergo a detailed analysis of all these factors for specific target customers, for a specific product or service, and in a particular environment, while implementing marketing strategies. Certainly, deeply understanding the factors will lend a hand in developing better marketing strategies to create demand and increase the sales of the organization’s products and services. It will also aid in forecasting the future demand of the product.
The most important contribution of this research toward the marketing literature is that the buying behavior should not be studied and considered only while selling the products; rather, it should be taken into consideration in the initial stages of marketing. My recommendation is that organizations should identify and consider the factors that affect the buying behavior while developing new products. There is a lot of cost, time, and effort involved in developing and rolling out a new product; unfortunately, a number of new products do not succeed when they are launched in the market. If organizations include the buyer behavior study in their new product development stage, they may have a higher probability of success.
The study of consumer behavior is important in the marketing field, as it forms the basis of marketing strategies. The study of consumer buying behavior facilitates comprehension of what the buyers think, what their feelings are, the reasons behind their decisions, and how they pick among several options. Insight into the factors that influence buying decisions enables marketers to better predict not only the demand of their product or service, but also the purchasing motives and purchasing frequency of the product or service. More importantly, if these factors are considered while developing new products, it will support the development of products with a higher probability of success. However, consumer behavior is very difficult to predict; therefore, further study is suggested to closely understand the degree to which these factors impact the consumer’s buying behavior, as gaining this insight will help organizations create more suitable products and will help marketing professionals build more-effective marketing strategies.
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Consumer Buying Behavior by Manali Khaniwale from International Journal of Innovation and Scientific Research is available under a Creative Commons Attribution 3.0 Unported license. © 2015, ISSR Journals. UMUC has modified this work and it is available under the original license.