Professional Documents
Culture Documents
Roles
Consumers have different roles in purchasing products and services, and these roles can
influence their buying behavior.
LEARNING OBJECTIVES
KEY TAKEAWAYS
Key Points
Influencers are people who have a relatively large audience in which to tout their beliefs.
In the consumer world, influencers can impact the success or failure of a product by
using it or shunning it.
A prosumer is usually a serious hobbyist, with similar interests and skills of
professionals. The prosumer generally uses professional (or nearly professional)
equipment and has a relatively high disposable income.
Marketers often create a ” persona ” for their products and services in order to represent
the different user types in a target market.
Key Terms
Consumers have different roles in purchasing products and services. Here, a role is defined as the
expected behavior of an individual in a society. These roles can be as part of the consumer’s
family, employment, or social status, among other things. For example, the role of father can be
different than the role of mother in purchasing consumer goods. Although there are many
different roles that can influence how a consumer behaves, three in particular are presented here:
influencers, prosumers, and personas.
Influencers
Influencers are people who have a relatively large audience in which to tout their beliefs. In the
consumer world, influencers can impact the success or failure of a product by using it or
shunning it. A marketer often targets influencers rather than the entire target market, because
these influencers can alter the behavior of other people. Influencers can be influential buyers,
retailers, or people, such as journalists or industry professionals (among others). Influencers are
sometimes ranked according to six criteria: market reach (how many people the influencer will
connect with), independence (no vested interest in product), frequency of impact, expertise,
persuasiveness, and thoroughness (the extent to which influence is exerted across the decision
lifecycle).
J.J. Abrams, “Apple Fanatic”: TV series creator J.J. Abrams can influence other people to buy certain products by saying how
much he likes the product.
Prosumers
In its most common usage, a prosumer is usually a serious hobbyist, with similar interests and
skills of professionals. For example, the availability and relatively low cost of photography
equipment have given rise to many people who are serious about photography but are not usually
paid for their work. This is an important role for marketers to consider, as the prosumer generally
uses professional (or nearly professional) equipment and has relatively high disposable income.
Other examples of prosumers are found in home improvement and cooking segments.
Personas
A persona is a social role. Marketers often create a “persona” for their products and services in
order to represent the different user types in a target market. A marketer may decide his product
is best suited for a specific demographic and will define that demographic as clearly as possible.
For example, “soccer mom” might be the target market for minivans. A persona may be created
to capture the “soccer mom,” perhaps by giving her a name or other defining characteristics. A
persona simply helps a marketer get a clearer picture of who will be buying his product.
Family
Families have a tremendous influence on consumer purchasing.
LEARNING OBJECTIVES
Describe how family dynamics and the family life cycle can influence purchasing decisions
KEY TAKEAWAYS
Key Points
One way to understand the consumer behavior of a family is to identify the decision
maker for a purchase.
Families’influence on buying habits includes how parents play a significant role and,
eventually, how a spouse and children play an even more significant role.
People go through a family life cycle composed of different stages of purchasing patterns.
Key Terms
life cycle:
The useful life of a product or system; the developmental history of an
individual or group in society.
Many factors influence purchasing. A consumer’s family is one of the most significant factors
because a family helps shape an individual’s attitudes and behaviors. One way to understand the
family’s impact on consumer behavior is to identify the decision maker for a purchase. A
decision maker for a purchase can be a husband, wife, or even a child, and sometimes decisions
are made in collaboration. Often, the decision maker changes based on the type of purchase or
the size of the purchase. A new refrigerator, for example, is likely to be a joint decision, while a
week’s groceries might be selected by a single member of the family.
Grocery Shopping: Families are a major influence on shopping patterns and consumer habits.
Families influence purchases in many ways. At first, the influence of parents is significant
because of how parents help their children to develop political and religious beliefs, lifestyle
choices, and consumer preferences. Most people are who they are because of their parents. A
spouse and children, however, can exert an even more significant force on a consumer’s
purchases. Interaction between spouses and the number and ages of children play a particularly
powerful role on buying behaviors. These family influences affect how consumers look at
purchases more directly than most other social influences on consumer purchasing.
Another aspect of understanding the impact of families on buying behavior is the family life
cycle. Most, though certainly not all, individuals and families pass through an orderly sequence
of life stages that can be used to understand their purchasing patterns. A typical adult starts in the
bachelor stage of being young and single and then moves to being part of a married couple
without children. Then the married couple transition to Full Nest stages, where the family has
dependent children living at home. Once the children leave, the family enters the Empty Nest
Stage, which is typically where older married couples (working or retired) no longer have
dependent children living with them. Finally, the individual reaches the “solitary survivor” stage
of being an older single person. Consumer behavior and purchasing is different in each of these
stages. Understanding the family life cycle is beneficial for marketers because it helps in
defining target customers.
Reference Groups
Reference groups are groups that consumers will look to for help in making purchasing
decisions.
LEARNING OBJECTIVES
KEY TAKEAWAYS
Key Points
Reference groups are groups that consumers compare themselves to or associate with.
They can heavily influence purchasing patterns.
Friends, clubs, religious groups, and celebrities can all act as reference groups.
If a reference group endorses a product, either through use or statements about the
product, those that look to the group will often purchase that product.
Key Terms
target market: A group of people whose needs and preferences match the product range
of a company and to whom those products are marketed.
opinion leader: The agent who is an active media user and who interprets the meaning of
media messages or content for lower-end media users.
Reference groups are groups that consumers compare themselves to or associate with. Reference
groups are similar to opinion leaders in that they can have a profound influence on consumer
behavior. Reference groups are considered a social influence in consumer purchasing. They are
often groups that consumers will look to to make purchasing decisions. So if a reference group
endorses a product, either through use or statements about the product, those that look to the
group will often purchase that product. On the other hand, if a reference group disapproves of a
product, those that associate with that group will probably not purchase the product.
Friends: Friends are one of the most powerful reference groups because they influencing our consumer behavior.
Reference groups can and do have a tremendous influence on purchasing decisions. This is
evident in a number of ways, such as through roles. Everyone is expected to behave in a certain
way based on the reference group we belong to. Students act like students. In keeping with this
idea, people will often modify their own behavior to coincide with group norms (even those that
profess non-conformity are in some ways conforming with other people who want the same
thing). Reference groups communicate through opinion leaders, who influence what others do,
act, and buy. In the consumer world, this means that if a reference group purchases a product,
those that associate with the group likely will as well.
Opinion Leaders
Opinion leaders are people consumers look to for guidance in making purchase decisions,
usually someone with more knowledge of the subject.
LEARNING OBJECTIVES
Discuss the importance of opinion leaders in marketing and how they can influence the success
of a product or service
KEY TAKEAWAYS
Key Points
Consumers seek out help in making consumer purchases. One source of help is an
opinion leader.
Opinion leaders are usually seen as being honest and impartial. They have the standing to
be able to influence others.
Finding opinion leaders can be vital to the success of a marketing plan, as they can then
influence others to purchase the product or service.
Celebrities are often used as opinion leaders in promoting a product.
Key Terms
Our purchase decisions are influenced by any number of people or groups. We often look to
opinion leaders for help in our consumer decisions. Opinion leaders are usually people who are
more knowledgeable about a certain product or service than the average consumer. As such,
opinion leaders can shape how a product is viewed. Consumers are constantly seeking out the
advice of knowledgeable friends or acquaintances who can provide information, give advice, or
actually make the decision. For some product categories, there are professional opinion leaders
who are quite easy to identify–for instance, auto mechanics, beauticians, stock brokers, and
physicians. All these professionals can influence the decisions consumers make within their area
of expertise. Sometimes, these opinion leaders can actually be groups, known as reference
groups.
Secondary Groups: Mechanics can be considered opinion leaders in the automotive industry.
Opinion leaders are generally people who have the ability to influence others. They usually have
deeper expertise in a certain area, and are often looked to for help in making consumer decisions.
For example, a local high school teacher may be an opinion leader for parents in selecting
colleges for their children. Often, an opinion leader is among the first to use a new product or
service, and can then pass on his or her opinions of the product to others. Opinion leaders are
often trusted and unbiased and have the social network of friends, family, and coworkers
necessary to disperse information.
Opinion leaders are particularly useful in marketing. If a marketer can identify key opinion
leaders for a certain group, she can then direct her efforts towards attracting these individuals. In
marketing, celebrities are often used as opinion leaders. Although they may not actually know
more about a product or service, there is usually the perception that they do. Celebrity
endorsements in marketing are a way to give clout to a product or service. Opinion leaders can
have a profound influence on the success of a product, and on one’s own consumer purchases.
Dale Earnhardt, Jr.: Celebrities are opinion leaders for the products or services they promote.
Social Classes
Marketers should understand that a person’s social class will have a major influence on the types
and quantity of consumer goods purchased.
LEARNING OBJECTIVES
Illustrate how social class impacts consumer behavior and buying patterns
KEY TAKEAWAYS
Key Points
People are usually grouped in social classes according to income, wealth, education, or
type of occupation.
There isa major difference in the consumer behavior of different social classes. The
upper class, for example, has more disposable income and can thus spend more on
most products.
Eachsocial class has distinct characteristics and approaches to consumer purchases. A
marketer should understand the dynamic of the social class he or she is targeting.
Key Terms
Social Class
A major influence on one’s purchasing habits and consumer behavior is the social class in which
one finds him or herself. Social class is considered an external influence on consumer behavior
because it is not a function of feelings or knowledge. Social class is often hard to define; in fact,
many people dispute the existence of social classes in the United States. Usually, however,
people are grouped in social classes according to income, wealth, education, or type of
occupation. Perhaps the simplest model to define social class is a three-tiered approach that
includes the rich, the middle class, and the poor. Other models have as many as a dozen levels.
People in the same social class tend to have similar attitudes, live in similar neighborhoods, dress
alike, and shop at the same type of stores.
Upper Class : Social class has a profound effect on the types and quantity of consumer goods purchased.
Effect on Marketing
Marketers must be very aware of the social class of their target market. If a marketer wishes to
target efforts toward the upper classes, then the market offering must be designed to meet their
expectations in terms of quality, service, and atmosphere. A marketer should understand the
dynamic of the social class as well. For example, the upper-middle class are generally ambitious,
future-oriented people who have succeeded economically and now seek to enhance their quality
of life. Material goods often take on major symbolic meaning for this group. Effective marketers
will understand that and be able to tailor their approach accordingly.
Culture
Culture can have a profound effect on consumer behavior and purchasing, and can affect how a
product is marketed.
LEARNING OBJECTIVES
Discuss the three components of a culture and how they impact consumer behavior.
KEY TAKEAWAYS
Key Points
There are three components of a culture: beliefs, values, and customs. Each plays a role
in influencing consumer purchasing.
Culture canbe further divided into subcultures. One’s race, religion and class are all ways
subcultures can be established.
The marketing strategy should show the product or service as reinforcing the beliefs,
values and customs of the targeted culture.
Key Terms
Culture
Culture can have a profound effect on consumer behavior and impact how a product is marketed.
In this sense, culture is defined as the distinct way peoples’ experiences, customs and beliefs
define how they behave. American culture, for example, values hard work, thrift and
achievement. There are generally three components of a culture: beliefs, values, and customs.
Cultural Practices: Cultural practices can have a huge impact on consumer behavior.
A belief is a proposition that reflects a person’s particular knowledge and assessment of
something.
Values are general statements that guide behavior and influence beliefs. The function of a
value system is to help a person choose between alternatives in everyday life.
Customs are modes of behavior that constitute culturally approved ways of behaving in
specific situations. For example, taking one’s mother out for dinner and buying her
presents for Mother’s Day is an American custom.
Culture can be further divided into subcultures. One’s race, religion and class are all ways
subcultures can be established. For example, a person can be a part of the larger “American”
culture and still be a member of other subcultures based on his or her socio-economic
background. Each of these subcultures will have specific influences on consumer behavior.
Consumer Misbehavior
Consumer misbehavior refers to the common occurrence of consumers acting outside the norm.
LEARNING OBJECTIVES
Give examples of common types of consumer misbehavior and common retailer tactics for
addressing consumer misbehavior issues.
KEY TAKEAWAYS
Key Points
Consumer misbehavior is specifically related to retail and other markets, and includes
things from cutting in line to fights between customers to credit card fraud.
Common types of consumer misbehavior include shoplifting, abusive behavior, credit
card fraud, and black markets.
Since the cost of consumer misbehavior can be very high, many retailers feel it is worth
fighting, and use a variety of tactics to do so.
Key Terms
credit card fraud: A wide-ranging term for theft and fraud committed using a credit card
or any similar payment mechanism as a fraudulent source of funds in a transaction.
The purpose may be to obtain goods without paying, or to obtain unauthorized funds
from an account.
Black Friday: The day following Thanksgiving Day in the United States, traditionally
the beginning of the Christmas shopping season.
Consumer Misbehavior
Consumer misbehavior refers to the common occurrence of consumers acting outside the norm.
It is generally recognized that there are social behaviors that are acceptable in a given situation.
Anything outside of those accepted behaviors is considered misbehavior. Consumer misbehavior
is specifically related to retail and other markets, and includes things from cutting in line to
fights between customers to credit card fraud. Combating consumer misbehavior is an expensive,
time-consuming activity. Some economists estimate the total monetary value of consumer
misbehavior to be in the hundreds of billions of dollars.
Shoplifting
Shoplifting is the theft of goods from a retail establishment. Although a very common crime, it is
still considered consumer misbehavior. Researchers divide shoplifters into two categories:
“boosters,” professionals who resell what they steal, and “snitches,” amateurs who steal for their
personal use. Researchers generally agree that shoplifters are driven by either economic or
psychosocial motives. Psychosocial motivations may include peer pressure, a desire for thrill or
excitement, impulse, intoxication, or compulsion.
Credit card fraud is a wide-ranging term for theft and fraud committed using a credit card or any
similar payment mechanism as a fraudulent source of funds in a transaction. The purpose may be
to obtain goods without paying, or to obtain unauthorized funds from an account. Estimates put
the cost of credit card fraud to billions of dollars.
Fraud: Credit card fraud is a form of consumer misbehavior that can cost billions of dollars a year.
A black market or underground economy is a market in goods or services which operates outside
the formal one supported by the established state power. It often involves illegal, smuggled, or
counterfeit goods. In many parts of the world, black markets operate side by side with legal
markets, sometimes openly. Worldwide, the underground economy is estimated to have provided
1.8 billion jobs. Similar is a gray market economy where a company makes their products
available even they are not authorized to do so.
Although fairly expensive to do, many retailers have begun fighting consumer misbehavior.
Retailers often employ more security and staff during times where the propensity for consumer
misbehavior increases, such as during “Black Friday” sales. Many also use electronic tracking
devices on products and closed-circuit television to fight shoplifting and fraud. Since the cost of
consumer misbehavior can be so high, many retailers feel it is worth fighting.
The amount of effort that consumers put into making a purchase decision is related to the
importance of the final decision, or what market researchers refer to as the level of involvement.
Many choices that consumers make about brands, products, or services are mid-level decisions
that require only limited problem solving. The higher the perceived risk of a decision to a
consumer, the more effort and time the consumer is generally willing to put into a structured or
expanded decision-making process.
Now that you know the steps that consumers go through in order to make decisions that are high
risk, you can use this information to increase the relevance of your market research and enhance
your marketing and advertising campaigns. Effective marketing strategies based on the 5 steps
of decision making include the following:
Source:
Solomon, M. R., Marshall, G. W., Stuart, E. W., Smith, J. B., Charlebois, S., and Shah, B.
(2013). Marketing: Real people, real choices (4th Canadian ed.). Toronto: Pearson Canada, Inc.
Share
The study of consumer behavior not only helps to understand the past but even predict the future.
The below underlined factors pertaining to the tendencies, attitude and priorities of people must be
given due importance to have a fairly good understanding of the purchasing patterns of consumers
5. Marketing Campaigns
Advertisement plays a greater role in influencing the purchasing decisions made by consumers.
They are even known to bring about a great shift in market shares of competitive industries by
influencing the purchasing decisions of consumers. The Marketing campaigns done on regular basis
can influence the consumer purchasing decision to such an extent that they may opt for one brand
over another or indulge in indulgent or frivolous shopping. Marketing campaigns if undertaken at
regular intervals even help to remind consumers to shop for not so exciting products such as health
products or insurance policies.
4. Economic Conditions
Consumer spending decisions are known to be greatly influenced by the economic situation
prevailing in the market. This holds true especially for purchases made of vehicles, houses and other
household appliances. A positive economic environment is known to make consumers more
confident and willing to indulge in purchases irrespective of their personal financial liabilities.
3. Personal Preferences
At the personal level, consumer behavior is influenced by various shades of likes, dislikes, priorities,
morals and values. In certain dynamic industries such as fashion, food and personal care, the
personal view and opinion of the consumer pertaining to style and fun can become the dominant
influencing factor. Though advertisement can help in influencing these factors to some extent, the
personal consumer likes and dislikes exert greater influence on the end purchase made by a
consumer.
2. Group Influence
Group influence is also seen to affect the decisions made by a consumer. The primary influential
group consisting of family members, classmates, immediate relatives and the secondary influential
group consisting of neighbors and acquaintances are seen have greater influence on the purchasing
decisions of a consumer. Say for instance, the mass liking for fast food over home cooked food or
the craze for the SUV’s against small utility vehicle are glaring examples of the same.
1. Purchasing Power
Purchasing power of a consumer plays an important role in influencing the consumer behavior. The
consumers generally analyze their purchasing capacity before making a decision to buy and
products or services. The product may be excellent, but if it fails to meet the buyers purchasing
ability, it will have high impact on it its sales. Segmenting consumers based on their buying capacity
would help in determining eligible consumers to achieve better results.
Understanding, analyzing and keeping track of consumer behavior is very critical for a marketing
department to retain their position successfully in the market place. There are various other factors
too that influence consumer behavior apart from the four listed above.
REFERENCE THIS
Physical Surroundings:
This category of situational factors include marketer's geographical and institutional location,
furnishings, sounds, lighting, aromas, weather, signs and observable contours as well as
products, exhibits or other materials circumventing the stimulus thing (Pride, Hughes & Kapoor,
2008). Significant physical factors also include store design and layout that if considered by
markers at the time of designing their facilities can benefit them in increasing consumers'
purchase. It could also be understood with an example of a grocery store (Kotler, 2002).
Most of the grocery stores used to place bread and milk on the differing ends of the stores as
consumers need both of these products. For purchasing both of these products they will visit the
whole store and might also see and purchase other items (East, Wright & Vanhuele, 2008). The
next substantial physical factor that affects consumers' purchasing decision is store location. If
store location is convenient, it will definitely attract more and more consumers (Peter &
Donnelly, 2002). Starbuck's that is the well-known company had done a great job in regard to
locating its stores in nations where it operates. This is the most beneficial factor for the company
in attracting consumers in great numbers (Docrat, 2007).
By managing this physical factor, a coffee marketer can easily drive consumers towards its
coffee. In addition to this, other substantial physical factors that need to be managed are store
environment or atmosphere as it strikes a lot to a consumer at the time of his purchase decision
(Pride, Hughes & Kapoor, 2008). If a consumer discovers a place relaxing with some light
music, effective lightings, temperature, he/she will definitely enjoy coffee in that store (Roslow,
Li & Nicholls, 2000). In this way, it can be said that physical factors is related to the
management of the physical environment that involves all the nonhuman, physical facets of the
market in which consumer behaviour takes place (Kotler, 2002).
Generally, it is said that any aspect of the physical environment can have an effect on consumer
behaviour (Assael, 2005). The physical environment that affects consumer purchasing behaviour
can be classified into following elements:
Spatial elements
Non-spatial elements coffee (Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins, 2007).
Spatial elements pertain to all kinds of physical objects like products and brands, countries,
cities, stores, shopping centres and interior decorations. On the other hand, non-spatial elements
pertains to all intangible factors like lightings, aromas, temperature, humidity, rainfall,
illumination, noise level and time (Docrat, 2007). By understanding the effect of these different
aspects of the physical environment, a marketer can easily design strategies to effect consumer
cognitions and behaviours regarding purchasing coffee (Pride, Hughes & Kapoor, 2008).
Social Surroundings:
Social surroundings related to a purchase involve features and fundamental interactions of other
people who are present throughout a purchase decision or who may be there when the product is
utilized or consumed coffee (Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins, 2007). In
addition to this social surroundings also include the shopping environment conditions. In other
words, it can be said that social surroundings that influence consumers purchasing decisions are
other persons, their compatibilities, roles, interactions and crowding (Chapter 5-Lecture Outline,
n.d.).
The social situation in which a consumer is will significantly affect what he will buy, how much
he will buy and when (Roslow, Li & Nicholls, 2000). Most of us see collage students buying
different products outside retail stores or shopping malls but we don't purchase anything from
them but if we see someone whom we know, it will affect our decision (Pride, Hughes &
Kapoor, 2008). By understanding the social situation in which a consumer is, marketer can
significantly affect their purchase decisions. Most of the companies like Avon and Tupperware,
sell their products at parties because they know in these kinds of parties consumers are in
different social situation and have to buy something (Docrat, 2007).
When a student is in collage he will not spend much amount on fast-food but when he is in a
restaurant with his special friend or close friend he will definitely spend much more on his food
or drink. In this way, consumers purchasing decisions are highly affected by their social situation
or surroundings that if understood by marketers can assist them with effective selling strategies
(Docrat, 2007). Social surroundings have significant influence on the consumers throughout their
purchase and consumption process.
Time:
The next substantial situational factor that influences consumer purchasing decision is time.
Time affects consumers buying decision process in a number of ways like the amount of time
necessitated to become well-informed about a product, to look for for it, and to pay money for
and make use of it (Chapter 5-Lecture Outline, n.d.). Time plays a substantial role and in this a
buyer regards the probable regularity of product use, the time-span required to make use of the
product, and the span of the all-inclusive product life. In addition to this, other time aspects that
affect consumers purchase are time of day, day of the week or month, times of year, and
vacations coffee (Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins, 2007).
The consumer purchase decision is affected by the time, he/she devotes for purchasing decisions.
This could also be understood with an example like if a customer is under severe time constraints
he will either make a fast purchase decision or hold-up a decision (Pride, Hughes & Kapoor,
2008). By managing and handling time, marketers can positively affect consumers' purchasing
decisions. In regard to having a coffee may a customer have lots of time or may a customer have
little time. All these things need to be considered for designing effective strategies to affect
consumers purchasing decisions (Docrat, 2007).
Nowadays, most of the consumers are having lack of time due to their busy or hectic schedules
the companies or marketers should design strategies that accommodated this need of consumers.
In this way, by identifying time related factors that affects consumers' decision-making, a
marketer can become able in serving its consumers in a much more enhanced way.
Purchasing Reason:
Another substantial situational influence is related to consumers' purchasing reason. It is a
significant factor that affects consumers' every purchase decision. The cause for purchase
elevates the questions of what precisely the product buying should bring about and for whom
(Loudon, 2001). For example, when we go to but a gift for friend it differs from what we buy
from out closed ones or family members. Our purchasing totally differs with our purchasing
reason and this in turn will also affect the time spend on purchasing (Docrat, 2007).
Similar is the situation with consumers when they go for a coffee in a store as some may
purchase it for relaxation or some ay purchase it for having fun with friends in a store where
there are no limits of time to sit and talk coffee (Quester, Neal, Pettigrew, Grimmer, Davis &
Hawkins, 2007). Purchasing decision is significantly affects by the reason to purchase a product
as every product fulfils different needs and necessity of consumers (Pride, Hughes & Kapoor,
2008). By understanding these reasons a company or marketer can significantly influence its
consumers purchase decisions.
Nowadays, every company designs different offerings for kids, youngsters and old aged people
as they know all of them have different reasons for their purchase. Understanding why a
consumer purchase a coffee will definitely assist its marketers in presenting it to its consumers in
a different and much more unique way (Loudon, 2001).
Conclusion
With the help of above discussion of situational factors that affect consumers buying behaviour it
becomes evident that understanding of these situational influences is vital for a marketer. By
understanding situational influences that may affect its consumers buying decisions related to
coffee, will assist him in the development of effective strategies to serve its customers (East,
Wright & Vanhuele, 2008). Coffee marketers that also feel complicated to sell coffee, can do it
in an effective way by understanding situational influences. Knowledge about these situational
influences can be used by marketers to develop effective and positive situations that will
definitely affect consumers' coffee purchasing decisions.
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Situational Factors
Just as influencer communications are impacted by community, economic, socio-cultural groupthink, and
ideological situations, these universal situations are further impacted by local “situational factors;” they
represent the personal factors in the consumer’s life that interact with the universal situations outlined
previously to further impact the purchase decision-making process.
Situational Factors
Personal circumstances such as household finances, lifestyle, and relationships that influence the decision-
making process of individuals within communities.
Thousands of women may actively follow a popular Mommy-blogger, reading and even commenting on her
every post. Yet, for example, when the blogger recommends a particular game system, the age and sex of the
reader’s children will dramatically impact her decision to purchase that product or not. If a business’ audience is
mothers, simply broadcasting recommendations to all of them through popular bloggers without an
understanding of their personal situational factors will miss the mark with most of them.
Consider the decision-making process of this same consumer looking for a restaurant when travelling in a new
city while using the geolocation social networks such as FourSquare or Facebook’s Places. They see who of
their friends or colleagues have “checked in” in that city or at a specific restaurant in the city and choose a
location based on their need to connect with a friendly face.
This is the blueprint that we use when servicing our clients, moving people along the customer life cycle to build
business value and profit by improving the customer experience. As part of that methodology, we recognize
that not all customers are—or will be—advocates. Once they become a customer, there’s a period of
“satisfaction” where customers look to have their purchase decision justified by good customer service, product
utility, and so on. Once proven, they move toward “loyalty,” which is represented by their willingness to buy
more from the business based on its continuing good service, utility, and possibly recognition or rewards for
continued patronage. Some, but not all of those within the loyalty stage of the life cycle, become so happy that
they choose to voluntarily advocate the product and service to their business.
Situational influences are temporary conditions that affect how buyers behave—whether they
actually buy your product, buy additional products, or buy nothing at all from you. They include
things like physical factors, social factors, time factors, the reason for the buyer’s purchase, and the
buyer’s mood. You have undoubtedly been affected by all these factors at one time or another.
Because businesses very much want to try to control these factors, let’s now look at them in more
detail.
directionally challenged. Marketing professionals take physical factors such as a store’s design and layout into
account when they are designing their facilities. Presumably, the longer you wander around a facility, the more
you will spend. Grocery stores frequently place bread and milk products on the opposite ends of the stores
because people often need both types of products. To buy both, they have to walk around an entire store, which
of course, is loaded with other items they might see and purchase.
Store locations are another example of a physical factor. Starbucks has done a good job in terms of locating its
stores. It has the process down to a science; you can scarcely drive a few miles down the road without passing a
Starbucks. You can also buy cups of Starbucks coffee at many grocery stores and in airports—virtually any place
Physical factors like these—the ones over which firms have control—are called atmospherics. In addition to store
locations, they include the music played at stores, the lighting, temperature, and even the smells you
experience. Perhaps you’ve visited the office of an apartment complex and noticed how great it looked and even
smelled. It’s no coincidence. The managers of the complex were trying to get you to stay for a while and have a
look at their facilities. Research shows that “strategic fragrancing” results in customers staying in stores longer,
buying more, and leaving with better impression of the quality of stores’ services and products. Mirrors near
hotel elevators are another example. Hotel operators have found that when people are busy looking at
themselves in the mirrors, they don’t feel like they are waiting as long for their elevators. [1]
Not all physical factors are under a company’s control, however. Take weather, for example. Rain and other
types of weather can be a boon to some companies, like umbrella makers such as London Fog, but a problem
for others. Beach resorts, outdoor concert venues, and golf courses suffer when the weather is rainy. So do a lot
of retail organizations—restaurants, clothing stores, and automobile dealers. Who wants to shop for a car in the
rain or snow?
Firms often attempt to deal with adverse physical factors such as bad weather by making their products more
attractive during unattractive times. For example, many resorts offer consumers discounts to travel to beach
locations during hurricane season. Having an online presence is another way to cope with weather-related
problems. What could be more comfortable than shopping at home? If it’s too cold and windy to drive to the
GAP, REI, or Abercrombie & Fitch, you can buy these companies’ products online. You can shop online for cars,
Crowding is another situational factor. Have you ever left a store and not purchased anything because it was
just too crowded? Some studies have shown that consumers feel better about retailers who attempt to prevent
overcrowding in their stores. However, other studies have shown that to a certain extent, crowding can have a
positive impact on a person’s buying experience. The phenomenon is often referred to as “herd behavior.”
If people are lined up to buy something, you want to know why. Should you get in line to buy it too? Herd
behavior helped drive up the price of houses in the mid-2000s before the prices for them rapidly fell.
Unfortunately, herd behavior has also led to the deaths of people. In 2008, a store employee was trampled to
death by an early morning crowd rushing into a Walmart to snap up holiday bargains.
To some extent, how people react to crowding depends on their personal tolerance levels. Which rock concert
would you rather attend: A sold-out concert in which the crowd is having a rocking good time? Or a half-sold-
out concert where you can perhaps move to a seat closer to the stage and not have to stand in line at the
restrooms? [2]
have seen Girl Scouts selling cookies outside grocery stores and other retail establishments and purchased
nothing from them. But what if your neighbor’s daughter is selling the cookies? Are you going to turn her down,
Video Clip
Are you going to turn down this cute Girl Scout’s cookies? What if she’s your neighbor’s daughter? Pass the milk,
please!
Companies like Avon and Tupperware that sell their products at parties understand that the social situation
you’re in makes a difference. When you’re at a Tupperware party a friend is having, you don’t want to
disappoint her by not buying anything. Plus, everyone at the party will think you’re cheap.
Certain social situations can also make you less willing to buy products. You might spend quite a bit of money
each month eating at fast-food restaurants like McDonald’s and Subway. But suppose you’ve got a hot first
date? Where do you take your date? Some people might take a first date to Subway, but that first date might
also be the last. Other people would perhaps choose a restaurant that’s more upscale. Likewise, if you have
turned down a drink or dessert on a date because you were worried about what the person you were with might
have thought, your consumption was affected by your social situation. [3]
they buy. Researchers have even discovered whether someone is a “morning person” or “evening person” affects
shopping patterns. Seven-Eleven Japan is a company that’s extremely in tune to physical factors such as time
and how it affects buyers. The company’s point-of-sale systems at its checkout counters monitor what is selling
well and when, and stores are restocked with those items immediately—sometimes via motorcycle deliveries
that zip in and out of traffic along Japan’s crowded streets. The goal is to get the products on the shelves when
and where consumers want them. Seven-Eleven Japan also knows that, like Americans, its customers are “time
starved.” Shoppers can pay their utility bills, local taxes, and insurance or pension premiums at Seven-Eleven
Companies worldwide are aware of people’s lack of time and are finding ways to accommodate them. Some
doctors’ offices offer drive-through shots for patients who are in a hurry and for elderly patients who find it
difficult to get out of their cars. Tickets.com allows companies to sell tickets by sending them to customers’
mobile phones when they call in. The phones’ displays are then read by barcode scanners when the ticket
purchasers arrive at the events they’re attending. Likewise, if you need customer service from Amazon.com,
there’s no need to wait on hold on the telephone. If you have an account with Amazon, you just click a button on
the company’s Web site and an Amazon representative calls you immediately.
emergency purchase? Are you shopping for a gift? In recent years, emergency clinics have sprung up in strip
malls all over the country. Convenience is one reason. The other is sheer necessity. If you cut yourself and you
are bleeding badly, you’re probably not going to shop around much to find the best clinic to go to. You will go to
to spend much time shopping for it either. Gift certificates have been a popular way to purchase for years. But
now you can purchase them as cards at your corner grocery store. By contrast, suppose you need to buy an
engagement ring. Sure, you could buy one online in a jiffy, but you probably wouldn’t, because it’s a high-
involvement product. What if it were a fake? How would you know until after you purchased it? What if your
significant other turned you down and you had to return the ring? How hard would it be to get back online and
People’s moods temporarily affect their spending patterns. Some people enjoy shopping. It’s entertaining for
them. At the extreme are compulsive spenders who get a temporary “high” from spending.
A sour mood can spoil a consumer’s desire to shop. The crash of the U.S. stock market in 2008 left many people
feeling poorer, leading to a dramatic downturn in consumer spending. Penny pinching came into vogue, and
conspicuous spending was out. Costco and Walmart experienced heightened sales of their low-cost Kirkland
Saks Fifth Avenue wasn’t so lucky. Its annual release of spring fashions usually leads to a feeding frenzy among
shoppers, but spring 2009 was different. “We’ve definitely seen a drop-off of this idea of shopping for
entertainment,” says Kimberly Grabel, Saks Fifth Avenue’s senior vice president of marketing. [7]
To get buyers in the shopping mood, companies resorted to different measures. The upscale retailer Neiman
Marcus began introducing more midpriced brands. By studying customer’s loyalty cards, the French
hypermarket Carrefour hoped to find ways to get its customers to purchase nonfood items that have higher
profit margins.
The glum mood wasn’t bad for all businesses though. Discounters like Half-Priced books saw their sales surge.
So did seed sellers as people began planting their own gardens. Finally, those products you see being hawked on
television? Aqua Globes, Snuggies, and Ped Eggs? Their sales were the best ever. Apparently, consumers too
broke to go to on vacation or shop at Saks were instead watching television and treating themselves to the
products. [8]
KEY TAKEAWAY
Situational influences are temporary conditions that affect how buyers behave. They include physical factors such
as a store’s buying locations, layout, music, lighting, and even smells. Companies try to make the physical factors
in which consumers shop as favorable as possible. If they can’t, they utilize other tactics such as discounts. The
consumer’s social situation, time situation, the reason for their purchases, and their moods also affect their buying
behavior.
REVIEW QUESTIONS
1. Why and how does the social situation the consumer is in play a role in behavior?
2. Outline the types of physical factors companies try to affect and how they go about it.
3. What social situations have you been in that affected what you purchased?
4. What types of moods and time situations are likely to affect people’s buying behavior?
Motivation
Motivation is the inward drive we have to get what we need. In the mid-1900s, Abraham Maslow, an American
they can begin fulfilling higher-level needs. Have you ever gone shopping when you were tired or hungry? Even
if you were shopping for something that would make you envy of your friends (maybe a new car) you probably
wanted to sleep or eat even worse. (Forget the car. Just give me a nap and a candy bar.)
People’s needs can be recurring, such as the physiological need for hunger. You eat breakfast and are hungry at
lunchtime and then again in the evening. Other needs tend to be enduring, such as the need for shelter,
clothing, and safety. Still other needs arise at different points in time in a person’s life. For example, during
grade school and high school, your social needs probably rose to the forefront. You wanted to have friends and
get a date. Perhaps this prompted you to buy certain types of clothing or electronic devices. After high school,
you began thinking about how people would view you in your “station” in life, so you decided to pay for college
and get a professional degree, thereby fulfilling your need for esteem. If you’re lucky, at some point you will
realize Maslow’s state of self-actualization: You will believe you have become the person in life that you feel you
Marketing professionals understand Maslow’s hierarchy. Take the need for people to feel secure and safe.
Following the economic crisis that began in 2008, the sales of new automobiles dropped sharply virtually
everywhere around the world—except the sales of Hyundai vehicles. Hyundai ran an ad campaign that assured
car buyers they could return their vehicles if they couldn’t make the payments on them without damaging their
credit. Other carmakers began offering similar programs after they saw how successful Hyundai had been.
Likewise, banks began offering “worry-free” mortgages to ease the minds of would-be homebuyers. For a fee of
about $500, First Mortgage Corp., a Texas-based bank, offered to make a homeowner’s mortgage payment for
that affect your different senses—sight, hearing, touch, smell, and taste. How you combine these senses also
makes a difference. For example, in one study, consumers were blindfolded and asked to drink a new brand of
clear beer. Most of them said the product tasted like regular beer. However, when the blindfolds came off and
they drank the beer, many of them described it as “watery” tasting. [2]
Using different types of stimuli, marketing professionals try to make you more perceptive to their products
whether you need them or not. It’s not an easy job. Consumers today are bombarded with all types of marketing
from every angle—television, radio, magazines, the Internet, and even bathroom walls. It’s been estimated that
the average consumer is exposed to about three thousand advertisements per day. [3] Consumers are also
multitasking more today than in the past. They are surfing the Internet, watching television, and checking their
cell phones for text messages simultaneously. All day, every day, we are receiving information. Some, but not
Have you ever read or thought about something and then started noticing ads and information about it popping
up everywhere? That’s because your perception of it had become heightened. Many people are more perceptive
to advertisements for products they need. Selective perception is the process of filtering out information based on
how relevant it is to you. It’s been described as a “suit of armor” that helps you filter out information
you don’t need. At other times, people forget information, even if it’s quite relevant to them, which is
called selective retention. Usually the information contradicts the person’s belief. A longtime chain smoker who
To be sure their advertising messages get through to you, companies use repetition. How tired of iPhone
commercials were you before they tapered off the tube? How often do you see the same commercial aired
Video Clip
Using surprising stimuli is also a technique. Sometimes this is called shock advertising. The clothing makers
Benetton and Calvin Klein are probably best known for their shocking advertising. Calvin Klein sparked an
uproar when it featured scantily clad prepubescent teens in its ads. There’s evidence that shock advertising
actually works, though. One study found that shocking content increased attention, benefited memory, and
Subliminal advertising is the opposite of shock advertising. It involves exposing consumers to marketing stimuli—
photos, ads, message, and so forth—by stealthily embedding them in movies, ads, and other media. For
example, the words Drink Coca-Cola might be flashed for a millisecond on a movie screen. Consumers were
thought to perceive the information subconsciously, and it would make them buy products. Keep in mind that
today it’s common to see brands such as Coke being consumed in movies and television programs, but there’s
nothing subliminal about it. Coke and other companies often pay to have their products in the shows.
The general public became aware of subliminal advertising in the 1960s. Many people considered the practice
to be subversive, and in 1974, the Federal Communications Commission condemned it. Its effectiveness is
somewhat sketchy, in any case. It didn’t help that much of the original research on it, conducted in the 1950s by
a market researcher who was trying to drum up business for his market research firm, was fabricated. [5]
People are still fascinated by subliminal advertising, however. To create “buzz” about the television show The
Mole in 2008, ABC began hyping it by airing short commercials composed of just a few frames. If you blinked,
you missed it. Some television stations actually called ABC to figure out what was going on. One-second ads
Even if your marketing effort reaches consumers and they retain it, different consumers can perceive it
differently. Show two people the same product and you’ll get two different perceptions of it. One man sees
Pledge, an outstanding furniture polish, while another sees a can of spray no different from any other furniture
polish. One woman sees a luxurious Gucci purse, and the other sees an overpriced bag to hold keys and
makeup. [7] A couple of frames about The Mole might make you want to see the television show. However, your
friend might see the ad, find it stupid, and never tune in to watch the show.
Learning
Learning refers to the process by which consumers change their behavior after they gain information or
experience a product. It’s the reason you don’t buy a crummy product twice. Learning doesn’t just affect what
you buy, however. It affects how you shop. People with limited experience about a product or brand generally
seek out more information about it than people who have used it before.
Companies try to get consumers to learn about their products in different ways. Car dealerships offer test
drives. Pharmaceutical reps leave behind lots of free items at doctor’s offices with medication names and logos
written all over them—pens, coffee cups, magnets, and so on. Free samples of products that come in the mail or
are delivered with newspapers are another example. To promote its new line of coffees, McDonald’s offered
to run through a maze for a piece cheese or a dog to salivate just by ringing a bell. Companies engage in operant
conditioning by rewarding consumers, too. The prizes that come in Cracker Jacks and with McDonald’s Happy
Meals are examples. The rewards cause consumers to want to repeat their purchasing behaviors. Other rewards
include free tans offered with gym memberships, punch cards that give you a free Subway sandwich after a
certain number of purchases, and free car washes when you fill up your car with a tank of gas.
Consumer’s Attitude
Attitudes are “mental positions” or emotional feelings people have about products, services, companies, ideas,
issues, or institutions. [8] Attitudes tend to be enduring, and because they are based on people’s values and
beliefs, they are hard to change. That doesn’t stop sellers from trying, though. They want people to have positive
rather than negative feelings about their offerings. A few years ago, KFC began running ads to the effect that
fried chicken was healthy—until the U.S. Federal Trade Commission told the company to stop. Wendy’s slogan
to the effect that its products are “way better than fast food” is another example. Fast food has a negative
connotation, so Wendy’s is trying to get consumers to think about its offerings as being better.
A good example of a shift in the attitudes of consumers relates to banks. The taxpayer-paid government bailouts
of big banks that began in 2008 provoked the wrath of Americans, creating an opportunity for small banks not
involved in the credit derivates and subprime mortgage mess. The Worthington National Bank, a small bank in
Fort Worth, Texas, ran billboards reading: “Did Your Bank Take a Bailout? We didn’t.” Another read: “Just Say
NO to Bailout Banks. Bank Responsibly!” The Worthington Bank received tens of millions in new deposits soon
Figure 3.9
Worthington National, a small Texas bank, capitalized on people’s bad attitudes toward big banks that accepted
bailouts from the government in 2008–2009. After running billboards with this message, the bank received
© WorthingtonBank.com
KEY TAKEAWAY
Psychologist Abraham Maslow theorized that people have to fulfill their basic needs—like the need for food,
water, and sleep—before they can begin fulfilling higher-level needs. Perception is how you interpret the world
around you and make sense of it in your brain. To be sure their advertising messages get through to you,
companies often resort to repetition. Shocking advertising and subliminal advertising are two other methods.
Learning is the process by which consumers change their behavior after they gain information about or
experience with a product. Consumers’ attitudes are the “mental positions” people take based on their values and
beliefs. Attitudes tend to be enduring and are often difficult for companies to change.
REVIEW QUESTIONS
1. How does Maslow’s Hierarchy of Needs help marketing professionals?
2. How does the process of perception work and how can companies use it to their advantage in their marketing?
3. What types of learning do companies try to get consumers to engage in?
Key Takeaway
Motivation
Nancy went to a nearby restaurant and ordered pizza for herself.
In the above example, Hunger was the motivating factor for Nancy to purchase pizza. There are several
other factors which motivate individuals to purchase products and services. An individual who is thirsty
would definitely not mind spending on soft drinks, packaged water, juice and so on. Recognition and self
esteem also influence the buying decision of individuals.
Individuals prefer to spend on premium brands and unique merchandise for others to look up to them.
Certain products become their status symbol and people know them by their choice of picking up
products that are exclusive. An individual who wears a Tag Heuer watch would never purchase a local
watch as this would be against his image.
Perception
What is Perception ?
What an individual thinks about a particular product or service is his/her perception towards the same.
For someone a Dell Laptop might be the best laptop while for others it could be just one of the best
brands available.
Individuals with the same needs might not purchase similar products due to difference in perception.
Catherine and Roselyn had a hectic day at work and thus wanted to have something while returning from
work. Catherine ordered a large chicken pizza with French fries and coke while Roselyn preferred a baked
vegetable sandwich. Though both Catherine and Roselyn had the same motivation (hunger), but the
products they purchased were entirely different as Roselyn perceived pizza to be a calorie laden food.
Individuals think differently and their perceptions do not match.
Individuals perceive similar situation differently due to difference in the way they interpret information.
There are three different processes which lead to difference in perception:
1. Selective Attention - Selective attention refers to the process where individuals pay attention
to information that is of use to them or their immediate family members. An individual in a single
day is exposed to numerous advertisements, billboards, hoardings etc but he is interested in only
those which would benefit him in any way. He would not be interested in information which is
not relevant at the moment.
2. Selective Distortion - Consumers tend to perceive information in a way which would be in line
to their existing thoughts and beliefs.
3. Selective Retention - Consumers remember information which would be useful to them, rest
all they forget in due course of time. Michael wanted to purchase a watch for his wife and thus
he remembered the RADO advertisement which he had seen several days ago.
Learning
Learning comes only through experience. An individual comes to know about a product and service only
after he/she uses the same. An individual who is satisfied with a particular product/service will show a
strong inclination towards buying the same product again.
Consumers purchase products/services based on their opinions which they form towards a particular
product or service. A product might be really good but if the consumer feels it is useless, he would never
buy it.
Related Articles
1Types of Consumer Buying Behaviors & Product Decisions
2Business Theories of Buying Behavior
3Role of Perception in Consumer Behavior
4Description of How Marketers Can Use Maslow's Hierarchy of Needs
Convincing consumers that you're selling what they ought to be buying forms the central job of the marketer
and advertiser. Marketing plans the strategies and tactics; advertising implements them and spreads the
message. To succeed in positioning your brand as the right solution to consumers' problems or needs, take
advantage of the psychological tenets that explain and predict what people buy. Four basic factors underlie the
decisions consumers make when they spend.
Motivation and Need
Needs motivate buying behavior. You buy food when you're hungry, protective gear to feel safe, brand-name
clothing to look stylish, education to enable accomplishment and self-improvement to reach self-actualization,
the pinnacle of psychologist Abraham Maslow's hierarchical pyramid of needs. The more basic the need, the
greater the priority it assumes in driving consumers to fulfill it. If you can convince consumers that your
product or service meets one of their motivating drives, you can convince them to buy what you're selling.
Advertising can help associate a product with need fulfillment.
The selective way in which the human mind views the world around it and the information that reaches it
forms the basis of perception. To get attention, you can use shock tactics, surprise, humor or any device that
makes people watch and listen. Once you get consumers' attention, you must induce them to remember your
message without filtering it through the "distortion field" of their outlooks and mindsets. Repetition helps
make your information stick. That simple concept helps explain how often you see the same ad and how many
times it repeats an important part of its message, such as the phone number to call in a direct-response TV spot.
Consumers can gain decision-making information from advertising, especially about products in categories
beyond their experience. If a commercial message convinces consumers to try a product but their post-
purchase experiences prove dissatisfying, they learn to avoid that product, even if it changes enough to negate
their prior dissatisfaction. In response, the advertiser must try to teach consumers another message about the
product, one that removes prior conditioning in favor of new information. Conditioning also explains how
rewards, gifts with purchases and "but wait, there's more" messages work to train you to prefer one product in
a category over another.
What consumers believe about a seller, product or service affects whether and what they buy. These attitudes
can persist even when the situations that produce them change. If a company appears to share your values, it
may attract your business. If you perceive a product as beneficial or its competition as harmful, you move
toward one and avoid the other. Advertising strives to position products so they appear associated with positive
traits and to counteract beliefs that interfere with the products' ability to attract buyers.
The study’s authors theorized that scarcity produces mild psychological arousal
in consumers, which was evident in self-reports. Researchers used words related
to rarity to introduce the scarcity effect. Another strategy that increased
psychological arousal in consumers was the use of bright colors.
2. Color Psychology
Color psychology examines how hues influence human behavior. In its guide to
understanding color psychology, Quick Sprout attributes 11 percent of its new
leads and 20 percent of a wellness blog’s revenue to a product that displays a
bright red bar at the top of webpages.
Using bold colors to stand out on a website is one way to implement color
psychology and impact consumers. Color psychology is a broad field. It includes
the meaning of certain colors, how colors affect emotions and applications such
as contrasting dark and bright colors.
According to Quick Sprout, more than 92 percent of people say that visual appeal
is the top factor affecting purchase decisions, compared to other sensory
experiences like taste or smell.
3. Price Anchoring
Anchoring is a cognitive bias that refers to consumers’ tendency to place more
importance on the first piece of information they receive when making decisions.
In pricing situations, marketers place premium products and services near
standard options to help consumers choose the best value.
Web only subscription for $59 a year — 16 percent chose this subscription.
Print only subscription for $125 a year — 0 percent chose this subscription.
Print and web subscription for $125 a year — 84 percent chose this
subscription.
Here is what happened when The Economist asked a different group of MIT
students which subscription they would choose, after eliminating the option that
provided the anchor effect.
Web only subscription for $59 a year — 68 percent chose this subscription.
Print only subscription for $125 a year — 32 percent chose this subscription.
Ariely writes that it’s a misconception that “you rationally analyze all factors
before making a choice or determining value.” Rather, “your first perception
lingers in your mind, affecting later perceptions and decisions.”