Management Studies: Consumer Buying Behavior

Most important components that affect to the buying behavior of a consumer

There are many major factors that affect consumer buying decision. The major components affecting consumer buying decisions are as follows:

A. Economic Factors: Buying decision primarily depends upon the several economic factors. They are as follows:

Personal income: The ability of the consumers to pay money depends upon the level of their personal income. The higher the level of income, the higher will be the purchasing power and the lower the income, the lower will be the purchasing power.
Income of other members of the family: In a joint family like Nepalese societies, change in income of one family may affect the buying capacity of another member of the same family.
Expected future income: Expectation of future income determines the buying behavior of the consumer.
Liquid assets: When a consumer posses adequate liquid assets, he will be able and willing to spend more on goods and services although his regular income is minimum. Bank balance, short term bank deposit, share, Government bonds, etc. are the examples of consumer liquid assets.
Credit facility: If adequate credit facility is available to the consumer, he will tend to spend more on goods and services although his regular income is low. Refrigerators, cars, scooters and TV, washing machine are sold on an installment basis. Cellular phones are also provided on installment basis.

B. Demographic Factors: Buying decision is affected and determined by demographic factors also. They include the following factors:

Age and life cycle stage: Consumer buys different goods and services over their life time. Consumption is also shaped by the stage of the family life cycle. For instance, a young person is usually fashion conscious, while a middle-aged person is usually status conscious.
Occupation: A person’s buying behavioral pattern is also influenced by his occupation. For example, a company president will buy expensive suit, credit card membership etc.
Gender (Sex): The product needs of male and a female significantly differ.
Life style: Life style is defined as the patterns in which people live and spend time and money. Life style is concerned with the overt actions and behavior of consumers. The life-style categories are different from one person to the other.

C. Socio-cultural Factors:

a) Social factors: The major social factors that affect consumer behavior are as follows:

Reference group: It is a relatively small social group to which person belongs or aspires to belong and that provide guides to acceptable beliefs, values, attitudes and behavior. Well known athletes, players, musicians, actors, and professionally successful people are reference groups. They influence product and brand choice.
Family: It is also considered as one of the strongest sources of group influence for the individual consumer. The joint family is the most common form family system in Nepal. From the marketers point of view the decision making role in the joint family system is being played by the oldest member of the family.
Roles and status: A person participates in many groups throughout the life. The person’s position in each group can be defined in terms of roles and status. A role consists of activities that a person is expected to perform according to the persons around him. Each role carries a status. A manager has more status than a salesman. Marketers are aware of status symbol potential of products and brands. However, status symbol varies for social classes and also geographically. On the basis of roles and status marketers target their product.

b) Cultural Factors: The major cultural factors that affect consumer’s behavior are as follows:

Culture: Culture is an important determinant of human behavior in the society. Marketers need to understand the major characteristics of culture such as: cultural values keep on changing through the passage of time and they are shared by the society as a whole.
Sub-culture: Sub-cultures include nationality, ethnic group and geographical regions. Many sub cultures make up important market segments and marketers often design product and marketing programmes tailored to their needs. They influence food preferences, clothing choices, recreation etc.
Social class: It is identified as relatively permanent homogeneous group of people having certain identifiable characteristics. There are three types of social classes:

High class
Middle class
Lower class

The marketer has to study the behavioral patterns of these classes so as to formulate marketing strategy and promotional communication.

Bases	Consumer Buying Behavior	Organizational Buying Behavior
Purpose of Buying	The individual consumers buy goods and services for ultimate use or satisfy their needs. The buying purpose of such consumers is not to earn profit by reselling the goods and services.	The organizations buy goods and services for their business needs. The buying purpose of them is to earn profit by using and reselling the goods and services.
Quantity	Although consumers buy various kinds of goods, the quantity of goods remains small. They buy only the necessary quantity of goods, which they need for regular use.	Organizational buying is done in large quantities. There are several reasons why organizations must buy the goods they need in bulk. In the first place, they use large quantities of each item and must maintain inventories at a level high enough that they will not run out of stock. Secondly, it is cheaper and more efficient to make large-volume purchases.
Purchase Decision	Consumer buying takes decision by consumers themselves. Sometimes they can consult with family members and friends. They need not fulfill any formality like organizational buying.	Organizational purchasing is a rational process because the purchasing behavior of organizations is guided by objective factors having to do with production and distribution. It takes long time than consumer buying.
Market Knowledge	Most of the consumers may not have adequate knowledge and information about market situation, available goods and services, etc. The educated customers may be aware and have knowledge about market and goods.	Organizational purchase criteria are specifically defined. Organizational buyers usually have fewer brands to choose from than do individuals, and their purchases must be evaluated on the basis of criteria that are specific to the overall needs of the organization. The organizational buyers have full knowledge of market and suppliers.
Types of Goods	Consumers buy many goods to use to satisfy personal or family needs.	Organizational buyers buy limited goods to use to conduct business.
Effect	Consumer buying behavior is effected by age, occupation, income level, education, gender etc. of consumers.	Many individuals are involved in the buying process. Within large organizations, rarely is one individual solely responsible for the purchase of products for the purchase of products or services. Instead, many individuals and departments may be involved and departments may be involved in the buying process.
Buying Process	The consumer buying process is very simple. No need to fulfill any formality. There is also no need to maintain extensive contact with sellers.	Buyers and sellers in the organizational market must maintain extensive contact.

Pages

Most important components that affect to the buying behavior of a consumer

You may also like:

Difference between Consumer Buying Behavior and Organizational Buying Behavior