Understanding Consumer Behavior

• Consumer behavior involves studying individuals, groups, and organizations.
• It also studies the processes they use to select, secure, and dispose of products, services, experiences, or ideas.
• This is done to understand how consumers satisfy needs and the effects these processes have on the consumer and society.
• Consumer behavior analysis aims to understand buyers' decision-making, both individually and in groups.
• It studies consumers' demographics and behavioral traits for insights into their desires.
• Additionally, it evaluates the effects of family, friends, reference groups, and society.

Factors Influencing Consumer Behavior

• There are four primary categories of factors that affect how consumers behave; cultural, social, personal, and psychological reasons.

Cultural Factors

• Culture is the fundamental values, perceptions, wants, and behaviors learned from family and important institutions.
• Culture significantly affects one's needs and actions.
• Each group or society possesses a culture, and its impact on purchasing habits differs across countries, and regions
• Marketers should look for cultural changes to find new product opportunities.

Sub-Culture

• Subcultures are groups with shared value systems rooted in similar life events and situations.
• These encompass gender, age, geographic location, nationalities, religions and ethnic groups.
• Brands often consider subcultures when dividing a market, tailoring products or communication to fit specific needs and values.

Social Class

• Social class represents relatively permanent divisions in a society.
• Members within each division share comparable values, interests, and behaviors.
• There are seven American social classes, including upper upper class, lower upper class, upper middle class, middle class, working class, upper lower class, and lower lower class.
• Marketers focus on social class as a determinant because people in the same social class tend to exhibit similar purchasing patterns.

Social Factors

• A consumer’s behavior is influenced by social factors.
• These social factors include small groups, social networks, family, social roles, and status.

Groups and Social Networks:

• Membership groups are social groups to which a person belongs and which exert influence on them.
• Membership groups are typically linked to someone's origin, age, location, work, interests, leisure activities, etc.
• Influence varies across individuals and groups, but common consumption patterns are generally seen within a group.
• Understanding group features like mindset, values, and lifestyle enables brands to better focus their advertising.

Reference Groups

• Reference groups introduce new lifestyles and behaviors, shape attitudes and self-image, and may pressure conformity affecting product and brand choices.
• Aspirational groups exert considerable influence as consumers try to emulate their members by buying similar products.
• Word-of-mouth has a big impact through recommendations from friends, family, and other consumers on buying decisions.
• Opinion leaders are people inside a reference group that use their skills, knowledge, personality to influence other people socially.

Online Social Networks

• Online social networks include communities like blogs, social media, and forums where individuals connect, share information, and express opinions.
• Marketers should identify the reference groups of their target market.

Family

• Family heavily influences consumer behavior and serves as a vital consumer buying unit in society.
• Marketers analyze how husbands, wives, and children affect purchasing decisions for products and services.
• Evolving roles inside families reflect a shifting marketing landscape.

Roles and Status

• An individual's position in their family, job, club, or group reflects a role and social status.
• Social roles involve expected attitudes and actions based on one's profession, workplace position, familial role, and societal expectations.
• Social status shows the importance and rank of someone in society within social circles.
• Social roles and status strongly influence consumer choices, especially for products used in public.

Personal Factors

• Personal characteristics like occupation, age, life stage, economic situation, lifestyle, personality, and self-concept influence the buyer's behavior.

Occupation

• A person's job has an impact on their consumption of goods and services.
• Marketers aim to find the occupational groups with a higher interest in their offerings.

Age and Life Stage

• Consumers do not buy the same products or services at all ages.
• A consumer changes their lifestyles, values, environment, activities, hobbies and consumer habits through their life.
• A consumer could switch from eating unhealthy food to adopting a healthy diet when starting a family.
• The significance of different factors affecting buying decisions changes.
• The "social value" of a brand matters more when a consumer is 25 than when they are 65.

Economic Situation

• An individual purchasing power has a big impact on the purchasing power based on their capital.
• Affordability, perspectives on money, and price sensitivity influence buying decisions.
• It shapes the retailers and brands that consumers choose.
• Some consumers look for external indicators of income and purchasing power though the social value of products.

Lifestyle

• Individual’s lifestyles include activities, values, attitudes, and interests.
• The consumer's lifestyle greatly influences their purchasing decisions and behavior.
• A consumer focused on health prefers organic food, visits specialized stores, and engages in regular exercise and purchases related products.

Personality and Self-Concept

• Personality means unique psychological traits that set apart groups or individuals.
• Characteristics of personality include confidence, sociability, autonomy, charisma, ambition, openness, shyness, curiosity, and adaptability.
• Brands often have human-like traits.
• Consumers are likely to pick brands that line up with their own personalities.
• A person's self-concept is their inner image.
• Brands often aim to cultivate an image and persona resonating with the desired traits and core values of their target consumers.

Psychological Factors

• An individual's buying decisions are further shaped by four major psychological factors.
• Motivation (drives), perception, learning, and beliefs/attitudes are all psychological factors.

Motivation

• A motive is a need strong enough to make a person seek satisfaction.
• Motivation usually operates subconsciously and can be difficult to measure.
• Sigmund Freud and Abraham Maslow's developed the two most referenced motivation theories.

Perception

• Perception is people select, organize, and interpret data to see the world.
• Each person’s experiences, beliefs, and personal factors cause their perspectives to differ.

Learning

• Learning means changes in individual behavior based from experiences.
• Learning happens through association of drives, responses, cues, stimuli, and reinforcement.
• For example, getting sick from milk creates a negative link, teaching you to avoid it.
• A good product produces a stronger intention to buy it in the future.

Beliefs And Attitudes

• A belief is what someone thinks about something.
• Marketers care about customers' beliefs about specific products and services since these beliefs shape product and brand image that affect buyer behavior.
• Attitude is a person's typical likes or dislikes and feelings toward an idea or object.
• Beliefs and attitudes stay fixed in the individual's thoughts and resist change.
• For many, their attitudes and beliefs reflect their identity.