Consumer buying behavior report

Learning Resource

Analysis of Consumer Buying Behavior

Introduction

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.

Research Method

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).

Factors Influencing Consumer Buying Behavior

A fish-bone diagram presenting the important internal and external factors affecting consumer buying behavior. External factors are cultural and social. Cultural factors include buyer culture and subculture. Social factors include reference groups, family, and role and status. Internal factors are personal and psychological. Personal factors include age, education, profession, income, lifestyle, and personality. Psychological factors include motivation, learning, perception, and beliefs and attitudes.

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.

Explanation and Discussion

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 Buying Behavior

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).

Factors Influencing Consumer Buying Behavior

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.

External Factors

Cultural 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

"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.

Internal Factors

Personal Factors

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).