What drives your customers: Understanding consumer behaviour and key factors in decision-making

The success of a product or a service is mainly determined by how your potential customers, clientele or consumers react towards it. This makes studying their behaviour and responses quite an important factor to take into consideration during design and marketing.?

So, what exactly is consumer behaviour?

Consumer behaviour is the study of individuals, groups and/or organisations and all activities associated with the purchase, use and disposal of goods and services. It consists of how the consumers’ emotions, attitudes and preferences affect buying behaviour.?

Additionally, it also takes into account individual qualities such as demography, personality, lifestyle, and some behaviour variables such as usage rates and occasions, brand loyalty and advocacy as well as the disposition to refer the brand, product or service. It also looks into the various influences the customer may have, from social groups such as friends, family, reference groups and other segments of society such as popular influencers and leaders.?

Comprehending how purchase and consumption decisions are made is crucial for marketers. As people are active decision makers i.e they decide what to buy based on their disposable income or budget. These decisions are also made after extensive comparison between similar products. At other times, shortage of time, knowledge and/or negotiation ability also plays a large role. In cases where impulse or habitual purchases are made, there is almost no thinking involved.?

What are the different roles in decision-making?

• The initiator

This person suggests a particular item for deliberation

• The influencer

Any other person who the consumer looks up to, may also endorse the suggestion made by the initiator. This convinces the consumer to purchase the product.

• The decider

The person who ultimately chooses to purchase something is the decider.

• The purchaser

The person who goes out and buys the product is the purchaser.?

• The user

The person who utilises the product is the user.

Let us understand this with an example. Suppose a person is looking to purchase some face cream, and looks to their friends for suggestions. A friend may come forward with a brand A that they like. Here, the friend is the initiator. Later, the person may come across an advertisement of the same brand of cream, being endorsed by a celebrity that they look up to. Here, the celebrity is the influencer. This may convince the person to make the decision to purchase the face cream and use it. Here, the person would play the role of decider, purchaser as well as user.?

Now, let us look closely at the various stages of decision-making:

1. Problem recognition, otherwise known as category need or need arousal

The customer first identifies a need, which is typically defined as the difference between their current state and their ideal state.?

They become aware of a need in numerous ways:

• Natural depletion i.e running out of a particular product.
• Regular purchase i.e habitual purchase of an item.
• Dissatisfaction i.e they are discontent with the product that they currently have.
• Related products i.e purchasing one product may lead to the requirement of others. eg)When people purchase a computer, they may also need earphones, a mouse, keyboard etc...
• New needs or wants eg)When you adopt a pet, you need pet food, pet accessories, pet medication etc...
• Marketer-induced problem recognition i.e a marketer convinces? people that they have a problem that they did not previously have eg) Marketing of most cosmetics is based on persuading people that they have an issue with their appearance.
• New products or categories eg) Ear pods caused a lot of curiosity among people who were traditionally used to headsets and earphones

1. Research

The customer then proceeds to research and evaluate the numerous options available on the market. This occurs in two stages:

• Internal search: The customer tries to bring to memory products that they might already have come across. The brands that come to mind at this stage are part of the evoked set.?
• External search: The evoked set is then supplemented by using sources such as the Internet, brand/manufacturer websites, window shopping, browsing product reviews, peer referrals etc…

All favourable choices then form part of the consideration set.??

1. Evaluation of alternatives

Evaluation can be considered both a separate stage or a continuous process. Alternatives are evaluated both on functional and psycho-social fronts.

• Functional basis refers to the concrete, tangible benefits that the customer may experience. eg) The comfort that one may have wearing a particular brand of clothing.
• Psycho-social basis refers to the abstract or personality-based outcomes. eg) Wearing a designer clothing brand may earn social esteem whereas cheaper, store-brand clothing may not be able to do the same. Brand image also is a key factor that is taken into thought during evaluation. Consumers can have both negative and positive dispositions towards a brand. Substantial evidence suggests that customers display favourable attitudes towards brands that match their own personality. This can affect related factors such as brand preference and choice, brand satisfaction and loyalty as well as their inclination to recommend the brand to others.?

3. Purchase decision

Post evaluation of alternatives, customers proceed to choosing what they ultimately will? purchase. This decision is called purchase intent. However, purchase intent is not definitive of purchase. This can happen in cases where the consumer may want to buy an item but not know where to buy it from.?

As consumers near actual purchase decisions, they tend to rely on personal information sources. Here, personal sales representatives serve a crucial role. To ensure conversion, they should present social evidence (success and satisfaction of other clients) as well as scarcity attraction (eg. limited time offers).

1. Post-feedback evaluation

After the product/service is purchased and experienced, the customer inspects and compares features. They analyse whether the product was worth the price and if the functionality and quality met their expectations. This analysis is fundamental in influencing their next decision, or post-purchase intention. When post-purchase intention is positive, the customer tends to repeat the purchase. When it is negative, the customer does the opposite.?

But what are consumers influenced the most by?

In short, there are two types of influences on customers - internal and external. Let us explore these factors in greater detail.?

• Internal influences

1. Perception

A large part of marketing strategy lies in discovering how your consumer base receives information and utilises it. People perceive stimuli in numerous ways due to personality differences. Due to this, when exposed to a particular stimulus, people react to it in multiple ways. That is why sensational aspects of the product, such as brand name, advertisement and packaging are valuable - they are powerful in changing perceptions!

1. Symbolic Consumer Behaviour

There is certain social and cultural significance attached to the consumption of a certain product such as atmosphere, emotions, status, style etc. This symbolic consumption is strongly displayed in brand consumption. eg) Driving luxury cars may be a symbol of wealth and class.?

1. Previous experience

The previous experience that a customer has with a brand, product or service has a strong influence on their purchasing decision. This also correlates greatly to the extent of research and evaluation of alternatives done by the consumer.?

• External Influences

1. Culture

As cultural norms tend to be steady over time, it has significant ramifications on decision-making. It affects psychological factors such as self-identity and motivation, as well as processing and perception of information. Thus, it is crucial to understand the culture of your target consumer base before marketing anything to them. Understanding cultural norms involved in purchasing and consumption is particularly important if your are looking to expand your market globally.

1. Social Class

Social classes are groups in society divided by socio-economic factors, and are difficult to clearly define. Typically, the upper social classes form a smaller part of the population but account for the highest spending. They tend to purchase products to maintain their social class and image. The middle-class are more cautious in comparison and tend to research and evaluate alternatives to a greater extent. The lower class are typically impulse buyers.

1. Reference groups

Reference groups are social groups whose perspectives, opinions and values are used as a basis for judgement by an individual. When you look into how a person or society chooses their reference groups, it becomes easier to impact their choices. eg) Brands of make-up typically hire popular and attractive celebrities to advertise their products, in the hopes that the fans of the latter will be persuaded to buy them.?

For your reference, we have also included a diagram below.

There are also certain factors that lead to consumer convergence (similar attitudes and perceptions) and divergence (dissimilar attitudes and perceptions)

Let us look into them.

• Convergence factors:

1. Globalisation

Globalisation through technology, trade, and travel leads to shared cultural norms and values as well as behaviour.

1. Technological Advancement

Rapid advancement in technology around the world have led to development of novel goods and services that are being quickly adapted by consumers.?

1. Advertisement and Marketing

Improvements in marketing strategies and techniques have led to the formation of global brands that many identify with.?

• Divergence factors:

1. Cultural differences

Cultures vary globally, and this can lead to discrete behaviour, values and attitudes towards goods, services and brands.

1. Economic difference

Disparity in wealth, education and social status can lead to different attitudes in consumers.

1. Socio-political factors

Socio-political factors such as religion, ideologies, value systems and government policies also play a powerful role in influencing consumer behaviour.

Conclusory note:

In this article, we have delved into what consumer behaviour is, the roles involved in decision-making, the process of decision-making itself, internal and external influences on the consumer as well as convergence and divergence factors. These aspects can decide whether you hit or miss. Thus, when designing and marketing any goods and services, it becomes important for you to study these factors carefully in your target consumer-base in order to successfully launch your product.?

We hope this helped you understand your customers better!