Many factors and characteristics influence consumer behavior during the shopping, decision-making, and purchasing processes. These include everything from brand preferences to subculture trends to psychological conditioning.
Of course, organizations that identify and understand these factors will successfully engage, influence, and benefit from their customers. Thus the reason for understanding why consumers behave in the manner they do.
While there are many different fields that study consumer behavior – business, marketing, and psychology among them, perhaps the most important from a business or organization’s perspective is the role that data science plays in analyzing consumer behavior. It is indeed one of the largest aspects of developing a better understanding of why people buy certain products and services and pass others over.
So, what are the aspects of consumer behavior? Let’s find out!
What is Consumer Behavior?
Let’s Let’s begin with a simple definition of consumer behavior. It is the study of the factors that influence why, how, and what people purchase.
As noted a moment ago, these factors are as varied as they are many, which makes understanding the complex relationship between these factors and consumer behavior a sometimes difficult task. There is much data to be collected, stored, cleaned, and analyzed before data scientists can make sense of what the data is telling them.
Of course, there are different levels of information that must be analyzed. For example, there are external forces (e.g., societal pressures) to purchase certain items. At the same time, there are internal forces (e.g., thoughts and emotions) that can influence consumers to buy certain products and not others. The processes of motivation, perception, cognition, groupthink, and peer pressure are further elements to this puzzle.
The task for data scientists and other stakeholders is to make sense of what forces are at work and how those forces can be harnessed or even directed in a way that results in more consumers buying more products and services from particular brands.
What are the Components of Consumer Behavior?
Of course, in order to tap into the buying behaviors of consumers, we first must understand some of the common forces that guide us in our buying decisions.
While each decision we make with regard to buying a product or service can be the result of a different combination of factors, there are a few underlying reasons that are common to most buying decisions:
- The decision process
- Cultural and societal influences
- Psychological factors
- Subcultural influences
Let’s explore each of these in more detail.
The Decision Process
All consumers follow the same general cycle when buying things.
First, they recognize a problem. For example, let’s say while shaving this morning you realize that you’re almost out of shave cream. To solve this problem, you then conduct research. This could be accomplished by searching for products in a physical store or online using services like Google or Amazon.
Next, you evaluate the alternatives. This could involve asking a friend, reading online reviews or seeing which celebrities endorse what products. Likewise, you might simply compare prices between two or more types of shave cream. The process of weighing alternatives will vary widely depending on the type of purchase.
For example, weighing the alternatives between types of shaving cream might take just a few moments – after all, it isn’t a life-changing purchase or one that will cost you a lot of money. But when you’re deciding which new car to buy, you will likely spend much more time and effort researching the different options and comparing them to one another before making a purchase.
Then, once a purchase decision is made and you’ve bought the product or service, you’ll engage in post-purchase behavior. You’ll use the product or service, evaluate whether or not it was a good purchase, and move on to tasks like returning a product, recommending it to a friend, or liking the brand’s social media page.
Again, remember that these steps are just generalizations that most people go through when buying most products and services. Sometimes, you might skip a step in the decision-making process, like when you impulse-buy an item off the rack at the checkout counter at the grocery store – there’s no research involved, no weighing alternatives – you just go for it.
And while every person is different, it’s important for businesses and organizations to understand these general steps of the decision-making process as it can inform a business regarding the best ways to reach consumers and market their product to enhance the likelihood that the product will be purchased.
Culture and Society
Our buying decisions can be influenced by all sorts of factors, not the least of which are cultural and societal influences.
Culture is the first thing that companies must understand when it comes to successfully analyzing the needs and behaviors of consumers. It is the underlying part of society that instills in us things like values, perspectives, and preferences.
Marketers who pay careful attention to cultural and societal influences will maximize their results and dominate their industry. In certain cultures, brand names are extremely valued as a social status symbol. Thus, companies that make cars, clothes, and cellphones should market their products with a premium approach that claims both high price and high quality.
Here’s an example: luxury clothing brands like Dolce & Gabbana are regarded highly in many cultures as being a symbol of status and wealth. As such, their products are sought-after by many consumers. That is, because of cultural influences, the buying public perceives products from Dolce & Gabbana to be premium, and by purchasing them, consumers feel as though they have a piece of that status and wealth.
Another example is Champion sportswear. Years ago, Champion was considered a “cheap” brand, but because of a huge rise in popularity of the brand on social media, it has become a highly sought-after brand for teens and young adults. The fortunes of Champion literally changed because of the cultural and societal influences that made people seek out their clothing in droves.
Consumer behavior is heavily influenced by invisible psychological factors that impact our purchase analysis and decisions.
First, consumer motivation is an expression of a need or want that must be satisfied. The nature of a need, such as an economical car for commuting, is different from a want, such as a sports car for fun. Yet, both needs and wants drive our buying behaviors. In fact, businesses count on you buying things that you don’t actually need! A good example of this is buying a new phone when the one you currently have works perfectly fine.
Second, businesses have to consider how people perceive a product or service. If you recall from a moment ago, part of the decision-making process is conducting research about possible products to purchase. Perception plays an important role in this because the research we do on products or services molds our opinions about those products. If, for example, you see thousands of positive reviews of a product, you’ll perceive it to be a good product. But, if you see multiple news stories about a company that treats its employees poorly, your perception of their products will not be a good one.
Our attitudes and beliefs can strongly influence our buying behaviors as well. If, for example, you strongly believe that organic foods are the best for your health, you will seek out organic foods to purchase, even if they are more expensive.
But attitudes and beliefs aren’t just important for your personal buying behavior. From a marketing standpoint, businesses want to understand what the prevailing attitudes and beliefs are of their target market, that way they can tailor their marketing to address those attitudes and beliefs. As a result, the things we believe can help shape the image of certain products. The belief of a few social media influencers that the Champion is a cool and fresh clothing brand has led to the development of Champion as just that.
Another psychological factor at work in consumer behavior is learning.
When you buy something, you learn a lot about that product through hands-on experience. You might learn very quickly that the product you’ve purchased looks and feels very cheap. On the other hand, you might learn that it’s extremely well made and intuitive to use.
This kind of learning is important on a couple of levels. First, if you learn that a product is exactly what you need, that it solves a particular problem, and that it is worth the money, you are more likely to become a loyal customer of that brand. Of course, if the product stinks, the opposite will be true.The second level of this is the effect it has on your post-purchasing behavior. If the item is nice, you’ll keep it, tell your friends and family about it, and maybe even make social media posts telling others how awesome the product is. But if you don’t like the product, you might return it, leave a bad review, or both.
Obviously, businesses want you to learn about their product or service and discover that it’s everything you wanted. Because of this, businesses and marketers work very hard to ensure that you become a satisfied customer.
According to Science Direct, subcultures tend to oppose the dominant culture or lead the way in innovative ideas and behavior. Subcultures can be made up of groups who share similar interests and lifestyles, such as goth and gaming subcultures, as well as traditional categories, such as race and religion.
Consumer behavior experts segment markets based on these classifications. Forbes states that Old Spice’s “gender-biased” advertising famously worked after they switched their advertising focus from men to women. They found that women account for 85 percent of all consumer purchases, so their funny ads that appeal to women worked well.
This is but one example of how the subcultures to which we belong can both influence our buying behavior and the ways in which businesses market their products to us. The lesson here is this – businesses collect copious amounts of data on consumers (and potential consumers too). In fact, the more data, the better, as it helps marketing professionals figure out when, where, why, and how to market products and services to groups of people large and small.
There are many ways to label and categorize personality traits. For example, consumers who are highly innovative will be willing to try new product and service offerings. Understanding the level of consumer innovativeness will help organizations predict receptivity, the rate of product adoption, and the most lucrative market segments.
On the other hand, consumers who are highly dogmatic might be defensive to advertising campaigns, but loyal to brands and open to credible experts and celebrities. Some personalities are dependent on collective opinion, while others prefer to direct trends.
The moral of the story is that marketers have a very tough task of sifting through all the different types of personalities that consumers may have and figuring out ways to reach consumers on a very personal level.
For example, Rivian, an electric vehicle manufacturer, likely doesn’t have to worry too much about their messaging to innovative, forward-thinking consumers. It’s the consumers that are wary of electric vehicle technology and who have been loyal to a certain brand of gas-powered vehicle that they might have trouble reaching with their message. This, of course, is one of the primary goals of researching consumer behavior – to figure out how to get one’s message to even the most leery of consumers.
Why is Studying Consumer Behavior Important?
Understanding why consumers buy the products they do is critically important for a variety of reasons. It informs product design and development, drives customer differentiation, and helps businesses identify what they need to do to retain customers over the long term.
Additionally, by studying what consumers need and want, businesses can innovate and develop new products and services. They can solve problems, fill a niche, and push society forward with products that make life easier, more efficient, more functional, and so forth.
This is a complex field, no doubt. It brings together psychology, sociology, economics, and marketing, to name but a few. It is an important endeavor, too. Businesses and organizations as well as consumers share in the benefits of studying these types of behaviors.
Updated October 2021