Factors Determining Consumer Buying Decisions
|Factors determining Consumer Buying Decision|
I. Economic Factors
- Consumer’s income level: Income of all consumers’ cannot be same. Some have more and others have low income level. If the income of consumers is high, purchasing power and readiness become high, otherwise their purchasing power and readiness become low. The consumers having high level income take quick decision to buy high quality goods or services. But those having low income take slow decision to buy low quality goods or services.
- Income of other members of family: Consumer lives in family. Family expense is managed by adding the income of all members of the family. Any change in income of other members also affects the purchasing decision of the consumer. If income of the other family members increases, purchasing power also increases; if decreases, it also decreases. In the countries like Nepal where joint families live together, income of other family members also should be studied and analyzed while analyzing the economic determining factors.
- Liquid assets: If the consumers have liquid assets such bank (balance), gold, silver, share, government bond etc., their purchasing power does not drop off even if incomes become irregular or drop down, because such liquid assets increase their purchasing power.
- Attitude towards spending: Consumers’ spending attitude becomes different. Some consumers form positive and others form negative attitude towards expense. Such attitude also influences buying decision.
- Credit facility: Credit facility also influences consumers’ purchasing power and readiness. If credit facility is available, consumers’ spending level increases. Just the opposite, if no credit facility is available consumers’ spending level decreases.
II. Demographic Factors
III. Psychological Factors
- Stimulus response theory: This is called S-R theory. Consumers express response as a result of stimulus. For example; consumers can be simulated by advertisement and they buy goods or services as response to the advertisement.
- Modern theory: This theory includes drive, cue, response and reinforcement. Drive stimulates consumers to buy goods or services, cue gives information how the consumers respond. If the response is positive, its enforce takes place, otherwise it does not.
|Maslow's Hierarchy of Need Theory|
- Physiological needs: Physiological needs of human being are compulsory nature. Food, shelter, clothes, thrust, hunger etc. are physiological needs.
- Safety needs: When human’s physiological needs are fulfilled, security needs are realized. Security from physical danger, bad health, weak economic condition etc. are included in safety needs.
- Social needs: After the security needs have been fulfilled, human begins to realize social needs. Friendly behavior, socially acceptable, living with love, involvement in social organizations etc. are included in social needs.
- Ego or esteem needs: After the human’s physiological, safety and social needs are fulfilled, she/he begins to realize ego or esteem needs. Under this come self respect, dignity, honor, freedom, praise, recognition of freedom etc.
- Self actualization needs: According to Maslow, after the ego or esteem needs are fulfilled, human realizes self-actualization needs. This includes use of special skill, ability, creativeness, self-development etc.
|Comparison between Maslow's and Hertzberg's Need Theories|
- Self-confidence or dependency
- Aggressive or friendly
- Introvert or extrovert
- Traditional or dynamic
- Learning: Attitude develops through learning process. For example, consumer learns something about goods through direct experience, information collection, mass communication media etc. As a result, his/her attitude develops.
- Consistency: Attitude becomes comparatively consistent but it becomes temporary. Attitude changes after a long time. As situation also affects attitude, it may change even in shorter time.
- Favorable or unfavorable: Consumers’ attitude towards goods or services becomes either positive or negative. It never remains neutral.
- Activities: Activity aspect includes how the consumers pass their time, what works they do, what their interest is, how they buy and how they pass holidays etc.
- Interest: Consumers’ interests about home, family, food, job, fashion etc. are included under this aspect.
- Opinion: Consumers’ thought, ideas and attitude towards society, politics, business, goods, services etc. are included in this aspect.
IV. Socio-cultural Factors
- Initiator: The person who first presents suggestion or proposes to buy any goods is called initiator.
- Influencer: The person who influences buying decision is called influencer. Influencer plays an important role in buying decision.
- Decider: The person who takes last decision about what to buy, how to buy, where to buy and when to buy is called decider.
- User: The person who uses goods or services is called user.
- Economic condition
- Life style
- Values, beliefs and attitudes
- Occupation/ profession
- Membership group: This includes family, religious group, professional group, trade union, etc.
- Aspiration group: The group interested to be member of any desired group is called aspiration group. For instance, political group, social or religious group, sport group, other extra activity group etc.
- Disassociate group: The group which breaks up from one and joins any other group is called disassociation. For example, if any political leader renounces politics and starts religious, social or other activities, it is called dissociation.