Marketing 5.
4
Lesson 5.4
Objectives
At the end of the class, students will be able
● Describe four factors that influence consumer behavior
Influencing consumer behaviour
Consumer behaviour involves the study of how consumers (either individually or in
groups) make decisions about what they buy, when they buy, how much they buy, how
frequently and who they buy from.
It looks at their buying habits and spending patterns and what influences them.
It is helpful to separate these influences into price factors and non-price factors.
Price factors-Product Prices
Businesses need to know what will happen to consumer demand for products if
they increase or reduce their prices.
They also need to know what will happen to total spending by consumers on
products (this is important because it affects the total revenues businesses will
from the sale of their products)
Price factors-Price of substitutes
Consumer demand for a product can also be affected by changes in the prices of
other products. A substitute is a good or service that may be used or consumed in
place of another, to satisfy the same or similar consumer need or want.
For example, an increase in the price of butter results in an increase in demand
for margarine. Butter and margarine are close substitutes for many consumers;
that is, they both satisfy the same consumer want.
Non price factors-Product quality
Consumers define ‘quality’ in different ways. Four of the main dimensions used to
assess the quality of a product are: features, durability, conformance to standards
and serviceability.
Quality is an important factor for influencing consumer behaviour, since people
are usually willing to pay more for what they think are better quality products.
Dimensions of quality
Scan page 215
Non price factors-Taste
Taste can be interpreted in two ways:
Taste when consuming food and beverages: taste specifically refers to flavour (sour salty sweet
etc)
Taste in a general sense: taste to the individual preferences or lifestyle choices (for example
teenagers choose their outfit according to their preference in terms of colour design material
length etc)
Non price factors-Tradition
Tradition can refer to cultural customs that are passed from one generation to the next
and to individual habits. Both of these can affect consumer behaviour and spending
patterns.
Cultural factors such as religion, family bonds and nationality affect choices and
spending patterns in different regions and at different times of the year. For example,
many Americans increase the spending of sweets in October to celebrate Halloween.
Non price factors-Income
Higher incomes allow individuals to purchase large quantities and/ or more
expensive items. Income and price combined determine an individual’s ability to
purchase (affordability). Different products, prices and promotions will appeal to
them.
Non-Price factors-Spending patterns
There are various factors which affect consumer spending as follows:
Demographics: consumers of different ages gender race ethnic origin education levels
household size occupation etc have different spending patterns. For example someone in
the 65 + age bracket will purchase different grocery items than of family with two
teenagers
Seasonal patterns: changes in weather patterns (especially in temperate countries)
affect consumers spending.
Non-Price factors-Spending patterns
Levels of income: A consumer spending pattern will differ based on the level of
income. Those at a lower income level may focus on necessary items such as
food and bills whereas those at a higher income level may purchase luxury items
as well.
Consumer confidence: the state of the economy (in recession or a boom ) affects
how consumers spend (such as the fear of unemployment or higher taxes)
Non-Price factors-Brand loyalty
Customers may become brand loyal or faithful if they have had a good experience,
and so repeatedly this product over time. Many people have strong brand
preferences for simple convenience goods like soap, fast food and shoes as well
as for luxury goods such as cars and jewellery.
Brand loyalty means purchase decisions are often routine and predictable for the
customer
Looking ahead
Next class: Packaging and Branding
