Factors Influencing Retail Consumer
Understanding consumer behaviour is
critical for a retail business in order to create and develop effective
marketing strategies and employ 4 Ps of marketing mix (Product, Price, Place,
and Promotion) to generate high revenue in the long run.
Here are some factors which directly
influence consumer buying behaviour: −
1. Market
Conditions/Recession
In a well-performing market, customers
don’t mind spending on comfort and luxuries. In contrast, during an economic
crisis they tend to prioritize their requirements from basic needs to luxuries,
in that order and focus only on what is absolutely essential to survive.
2. Cultural Background
Every child (a would-be-customer)
acquires a personality, thought process, and attitude while growing up by
learning, observing, and forming opinions, likes, and dislikes from its
surrounding. Buying behaviour differs in people depending on the various
cultures they are brought up in and different demographics they come from.
3. Social Status
Social status is nothing but a position
of the customer in the society. Generally, people form groups while interacting
with each other for the satisfaction of their social needs.
These groups have prominent effects on
the buying behaviour. When customers buy with family members or friends, the
chances are more that their choice is altered or biased under peer pressure for
the purpose of trying something new. Dominating people in the family can alter
the choice or decision making of a submissive customer.
4. Income Levels
Consumers with high income has high
self-respect and expects everything best when it comes to buying products or
availing services. Consumers of this class don’t generally think twice on cost
if he is buying a good quality product.
On the other hand, low-income group
consumers would prefer a low-cost substitute of the same product. For example,
a professional earning handsome pay package would not hesitate to buy an
iPhone6 but a taxi driver in India would buy a low-cost mobile.
5. Personal Elements
Here is how the personal elements change
buying behaviour −
Gender − Men and women differ in their perspective,
objective, and habits while deciding what to buy and actually buying it.
Researchers at Wharton’s Jay H. Baker Retail Initiative and the Verde Group,
studied men and women on shopping and found that men buy, while women shop.
Women have an emotional attachment to shopping and for men it is a mission.
Hence, men shop fast and women stay in the shop for a longer time. Men make
faster decisions; women prefer to look for better deals even if they have
decided on buying a particular product.
Wise retail managers set their marketing
policies such that the four Ps are appealing to both the genders.
Age − People belonging to different ages or stages of
life cycles make different purchase decisions.
Occupation − The occupational status changes
the requirement of the products or services. For example, a person working as a
small-scale farmer may not require a high-priced electronic gadget but an IT
professional would need it.
Lifestyle − Customers of different
lifestyles choose different products within the same culture.
Nature − Customers with high personal awareness, confidence,
adaptability, and dominance are too choosy and take time while selecting a
product but are quick in making a buying decision.
6. Psychological
Elements
Psychological factors are a major
influence in customer’s buying behaviour. Some of them are −
Motivation − Customers often make purchase
decisions by particular motives such as natural force of hunger, thirst, need
of safety, to name a few.
Perception − Customers form different
perceptions about various products or services of the same category after using
it. Hence perceptions of customer lead to biased buying decisions.
Learning − Customers learn about new
products or services in the market from various resources such as peers,
advertisements, and Internet. Hence, learning largely affects their buying
decisions. For example, today’s IT-age customer finds out the difference
between two products’ specifications, costs, durability, expected life, looks,
etc., and then decides which one to buy.
Beliefs and Attitudes − Beliefs and attitudes are
important drivers of customer’s buying decision.
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