Factors affecting consumer buying behavior Why do we need to learn about consumer buying behavior?

The simple answer is that no longer can we take the customers for granted. Consumer buying behavior determines how our consumers decide to buy our product and what are the various factors responsible for this decision? Out of 11000 new products introduced by 77 companies, only 56% are present after 5 years. Only 8% of new product concepts offered by 112 leading companies reached the market. Out of that 83% failed to meet marketing objectives. What we need to understand here is why consumers make the purchases that they make, what factors influence consumer purchases and changing factors in our society The central focus of marketing is the consumer. To devise good marketing plans, it is necessary to examine consumer behavioral attributes and needs, lifestyles, and purchase processes and then make proper marketing-mix decisions. The study of Consumer behavior includes the study of what they buy, why they buy, how they buy, when they buy, from where they buy, and how often they buy. An open-minded consumer-oriented approach is imperative in todays diverse global marketplace so a firm can identify and serve its target market, minimize dissatisfaction, and stay ahead of competitors. Final consumers purchase for personal, family, or household use. Major Factors affecting consumer buying behavior

Cultural factors affecting consumer buying behaviour: Cultural factors have a significant impact on customer behavior.Culture is the most basic cause of a persons wants and behavior. Growing up, children learn basic values, perception and wants from the family and other important groups. Marketers are always trying to spot cultural shifts which might point to new products that might be wanted by customers or to increased demand. Social factors affecting consumer buying behaviour: A customers buying behavior is also influenced by social factors, such as the groups to which the customer belongs and social status.

Each culture contains sub-cultures groups of people with share values. Sub-cultures can include nationalities, religions, racial groups, or groups of people sharing the same geographical location. Sometimes a sub-culture will create a substantial and distinctive market segment of its own. For example, the youth culture or club culture has quite distinct values and buying characteristics from the much older gray generation Similarly, differences in social class can create customer groups. In fact, the official six social classes in the UK are widely used to profile and predict different customer behavior. In the UKs socioeconomic classification scheme, social class is not just determined by income. It is measured as a combination of occupation, income, education, wealth and other variables INTRODUCTION Before business can develop marketing strategies, they must understand what factors influence buyers behavior and how they make purchase decisions to satisfy their needs and wants. Buyers are moved by a complex set of deep and subtle emotions. Their behavior result from deeply held values and attitudes; their perception of the world and their place in it, from common sense, impulse or just plain whimsy. There are also several stages through which the consumer exhibit before deciding to purchase goods or services. These includes 5 steps which are: problem or need recognition, information search, alternative evaluation, purchase and post-purchase evaluation. CONSUMER BUYING BEHAVIOR Definition: Consumer behavior refers to the mental and emotional process and the observable behavior of consumers during searching, purchasing and post consumption of a product or service. Consumer behavior involves study of how people buy, what they buy, when they buy and why they buy. It blends the elements from psychology, sociology, sociopsychology, anthropology and economics. It also tries to assess the influence on the consumer from groups such as family, friends, reference groups and society in general.

Buyer behavior has two aspects: the final purchase activity visible to any observer and the detailed or short decision process that may involve the interplay of a number of complex variables not visible to anyone.

Factors Affecting Consumer Buying Behavior Consumer buying behavior is influenced by the major three factors: 1. Social Factors 2. Psychological Factors 3. Personal Factors. A. Social Factors Social factors refer to forces that other people exert and which affect consumers purchase behavior. These social factors can include culture and subculture, roles and family, social class and reference groups. Example: By taking into consideration Reference group, these can influence/ affect the consumer buying behavior. Reference group refers to a group with whom an individual identifies herself/ himself and the extent to which that person assumes many values, attitudes or behavior of group members. Reference groups can be family, school or college, work group, club membership, citizenship etc. Reference groups serve as one of the primary agents of consumer socialization and learning and can be influential enough to induce not only socially acceptable consumer behavior but also socially unacceptable and even personal 6 destructive behavior. For example, if fresher student joins a college / university, he/she will meet different people and form a group, in that group there can be behavior patterns of values, for example style of clothing, handsets which most of group member prefer or even destructive behavior such as excessive consumption of alcohol, use of harmful and addictive drugs etc. So, according to how an individual references him / herself to that particular reference group, this will influence and change his/her buying behavior. B. Psychological Factors These are internal to an individual and generate forces within that influence her/his purchase behavior. The major forces include motives, perception, learning, attitude and personality. Example: Attitude, is an enduring organization of motivational, emotional, perceptual and cognitive processes with respect to some aspect of our environment. Consumer form attitude towards a brand on the basis of their beliefs about the brand. For example, consumers of Sony products might have the belief that the products offered by Sony are durable; this will influence those customers to buy Sony products due to this attitude towards the brand.

C. Personal Factors These include those aspects that are unique to a person and influence purchase behavior. These factors include demographic factors, lifestyle, and situational factors. Example: Lifestyle is an indicator of how people live and express themselves on the basis of their activities, interests, and opinions. Lifestyle dimension provide a broader view of people about how they spend their time the importance of things in their surroundings and their beliefs on broad issues associated with life and living and themselves. This is influenced by demographic factors and personality. E.g. A CEO or Manager is likely to buy more formal clothes, ties and shoes or PDAs and less informal clothes like jeans as compared to a Mechanic or Civil engineer. So according to their lifestyle and profession, the buying behavior of people differ from one another.

CONSUMER BUYING DECISION PROCESS Definition: Consumer buying decision process is the processes undertaken by consumer in regard to a potential market transaction before, during and after the purchase of a product or service. Consumer decision making process generally involves five stages: Problem Recognition Purchase decision making process begins when a buyer becomes aware of an unsatisfied need or problem. This is the vital stage in buying decision process, because without recognizing the need or want, an individual would not seek to buy goods or service. There are several situations that can cause problem recognition, these include: Depletion of stock Dissatisfaction with goods in stock Environmental Changes Change in Financial Situation Marketer Initiated Activities

Example: Its when a person recognizes that she can not make a call from her mobile phone thats when she recognizes that her phone has been damaged i.e. the phone has hardware problems and needs to be repaired or buying a new piece. Information Search After the consumer has recognized the need, he / she will trying to find the means to solve that need. First he will recall how he used to solve such kind of a problem in the past, this is called nominal decision making. Secondly, a consumer will try to solve the problem by asking a friend or goes to the market to seek advice for which product will best serve his need, this is called limited decision making. Sources of information include: Personal sources Commercial Sources Public sources Personal experience Example: (continuing from previous) The user of the phone after recognizing that her phone is damaged, she will eventually try to find out how she can repair her phone. If she cannot repair it herself she will ask a friend to help out, if the friend can not solve the problem she will go to mobile repair shop, if they also can not repair it then she will try to find which mobile phone is good and that can serve her need. In this process of information collection it will yield awareness of set of brands of mobile phones she can buy. Alternatives evaluation Consumers evaluates criteria refer to various dimension; features, characteristics and benefits that a consumer desires to solve a certain problem. Product features and its benefit is what influence consumer to prefer that particular product. The consumer will decide which product to buy from a set of alternative products depending on each unique feature that the product offers and the benefit he / she can get out of that feature. Example: (continuing from previous) 9 When that user got enough information concerning the different brands of mobile phones available in the market, she will decide which kind of a mobile phone and brand shes going to buy depending upon her need for that particular mobile, either a mobile for multimedia and entertainment, smartphone or classic phone.

Purchase Action This stage involves selection of brand and the retail outlet to purchase such a product. Retail outlet image and its location are important. Consumer usually prefers a nearby retail outlet for minor shopping and they can willingly go to a far away store when they purchase items which are of higher values and which involve higher sensitive purchase decision. After selecting where to buy and what to buy, the consumer completes the final step of transaction by either cash or credit. Example: (continuing from previous) After selecting brand of the phone and model from different alternatives of mobile phones, she will make a final decision of where to buying that phone and make the final transaction procedures. Post-purchase Actions Consumer favorable post-purchase evaluation leads to satisfaction. Satisfaction with the purchase is basically a function of the initial performance level expectation and perceived performance relative to those expectations. Consumer tends to evaluate their wisdom on the purchase of that particular product. This can result to consumer experiencing post purchase dissatisfaction. If the consumers perceived performance level is below expectation and fail to meet satisfaction this will eventually cause dissatisfaction, and so the brand and/ or the outlet will not be considered by the consumer in the future purchases. This might cause the consumer to initiate complaint behavior and spread negative word-of-mouth concerning that particular product. Example: (continuing from previous) If she decided to buy a multimedia phone she will try to compare the quality of music it provides and pictures taken if they meet her expectations. If she will find that her 10 expectation are meet she will be satisfied, if she found that there are more additional features that she did not expect this mobile phone to have, she will be delighted, otherwise she will be dissatisfied.