Influencing Factors of Buying Behavior

Consumer behavior is influenced by several factors. Analysis of such factors helps the marketer in formulating a suitable and meaningful marketing program. The major influencing factor of consumer buying behavior are explained as follows:

• Economic factors
• Socio-culture factors
• Psychological factors
• Demographic factors
• Psycho-analytic factors

Economic Factors

Buying decision primarily depends upon the purchasing power and or willingness of the consumer. Purchasing capacity and or willingness if consumer largely depends upon serval factors.

1. Level of personal income: The ability of the consumer to pay money depends upon the level of his personal income. The more income consumer gets the higher purchasing capacity he will have. An individual’s income may be either disposable or discretionary. Disposable personal income is the outcome of the gross personal income after deducting the government taxes, debt repayment, debt servicing charges, etc. once the basic need are met, the remaining income is spent by the consumer at his discretion. Hence the disposable income that remains after fulfillment od basic need is called discretionary income.
2. Income of other members of the family: Majority of Nepalese live in a joint family, where the responsibility of new earning usually fall on head of the family. Hence, when there is addition of earning member, the buying capacity of the other member of the family is affected in a positive way. In such circumstances, they are able and willing to spend more money or products they desire.
3. Expectation of income in future: The optimism or pessimism of the consumer about his future income also determine the level of his current expenditure. If he expects that, in the near future, he would receive additional income from any other sources, he will be willing to pend more money. On the contrary, if he does not expect the income to increase in the future, he may not be willing to spend more but try to save more.
4. Availability of liquid assets: Liquid assets are those assets, which can be turned into cash whenever required. Therefore, when a consumer possesses adequate liquid assets, he will be able and willing to spend more on goods and servicing although his regular income is minimum.
5. Availability of credit to consumer: If adequate credit facility is available to the consumer, he will tend to spend more on products and services although his regular income may be minimum.
6. Past-expenditure habits: The level of consumer spending on products and services also depends upon the past expenditure habit. If he established living standard in the past was high, the spending standard of the consumer will also be higher although he may not have adequate income during the period as he is habituated to spend more. In such scenario, he would be initiated to sell even his fixed assets.

Socio-Culture Factors

Society consists of individual’s groups and families of diverse nature, tastes, value, motives, attitudes and lifestyle. Therefore, the buying behavior of individual, group and family differ from one another. A successful marketer is one who can do detailed study and analysis of, significant social factors including family, reference group, social class, opinion leaders, and culture.

1. Family: Family is a social institution. It is a group of individuals related to each other such as the father, mother, sons, daughter, grandfather, grandmother, grandsons, granddaughter, nephew, uncle, etc. Family is primary group that exercises considerable influence on the consumption behavior of an individual. A family may be either joint or nuclear. Nuclear family consist of one parent a father, a mother and a child. Whereas, the joint family consists of nuclear family and other relatives such as uncle, aunt, grandfather, grandmother, etc. In the joint family, the buying process is a difficult task, because several members of the family may have impact or control in the decision-making process. Therefore, a marketer needs to determine which member normally has the more significant influence in choosing various products.
2. Reference group: A reference group is a group of people with similar values, beliefs and attitude. A reference group consists of all the groups that have a direct or indirect influence on the person’s attitude or behavior. A reference group may be a family, friends, membership groups, neighbors, and so on.
3. Social class: Social classes are formed due to difference in income levels. Each class are governed by similar values and attitudes. Social class greatly affects the buying behavior. Moreover, the buying behavior of each group differs significantly from one another, since possession of wealth by these group varies. Nepalese society has three classes. (i) upper class (ii) middle class (iii) lower class.
4. Opinion leaders: Opinion leaders are the individuals who lead to certain reference groups. Opinion leaders possess a disproportionately large amount of leadership quality. Opinion leadership refers to the degree to which an individual influences other in a given choice situation. A marketer must be able to identify such opinion leaders and analyze their roles that affect the buying behavior of the groups.
5. Culture: Culter is the total of human environment mankind’s knowledge, beliefs, art, morals, law, customers, religion any other capabilities and habits acquired by human as members of society. The consumption pattern of each of these groups differ significantly from one another.

Psychological Factors

Psychology is a state of one’s mind which cannot be studied with the help of general information and analysis. Psychology is another major influencing factor that has a major impact on buying behavior of a consumer. Psychology of a person is governed by several factors, which must be carefully analyzed by the marketer. These factors include.

1. Motivation: Motivation is an activity directed towards a goal. It is an internal emerging force that directs a person’s behavior towards his goal. A buyer’s action at any time is affected by a set of motive. Several psychologists have developed different theories of human motivation. Among them, one of the widely recognized theories of motivation is discussed here.

Maslow’s Theory of Motivation

To explain the consumer’s motivation toward a particular product, Abraham Maslow developed a theory based on human needs. He classified human needs into five categories called as ‘Maslow’s Hierarchy of Needs’. According to him, a person will try to satisfy the most critical needs first. When he succeeds in meeting these needs, he will shift to other needs for fulfillment as human needs gradually change after the fulfillment of one or other needs.

• Physiological needs: Physiological need refers to the basic need of a human. It includes air, food, water, sex, sleep etc. There are the first set of need that a human aims to fulfill. At this stage the human buys products and services that fulfills his physical need.
• Safety needs: Safety needs includes security of human life, property, employment, etc. After the fulfillment of physiological needs, people tend to fulfill their safety need. At this stage, physiological needs does not motivate the human being.
• Love\ belonging needs: It consists of sense of love and belongingness among the people the individual is connected. Human beings, being the social animal, want to live in society, require belongingness, and want to share their love with one another, without which cannot be satisfied how rich and safe they are.
• Esteem needs: Esteem need refers to the ego and prestige need. Every person, after the fulfillment physiological safety and love, belonging need want to fulfill this need. They want to attain prestige in society, they expect from other.
• Self-actualization needs: Self-actualization need is the highest level of needs for human beings. After the fulfillment of their esteem needs, they want to be all in society.

1. Perception: Perception means knowledge of idea about a product of situation received or derived by a person. In other words, perception is a process whereby a person acquires or perceives the meaning of an object or situation. A motivated person is ready to act in some way. The behavior of consumers towards products, packages, prices, designs, stores, advertisements and manufactures is affected strongly by how and what they perceive. The marketer must understand the impact that individual perceptions have on their purchase decisions.
2. Learning: When people perceive the meaning of an object of or situation, they act. When they act, they learn, people learn through experience. So learning can be defined as the change in individual’s behavior arising from experience or prior behavior in the similar situation. A marketer must know how the consumers learn about a product. Stimulus-response theory states the learning process of consumer behavior.
3. Beliefs and attitude: A beliefs is a descriptive thought that a person holds about something while an attitude consists of knowledge about an object or situation. When consumers have strong negative attitudes and beliefs towards the firm’s making mix, the marketer should try to change consumer attitudes to make them more favorable.
4. Personality: Personality means the person’s distinguishing psychological characteristics that lead to relatively consistent and enduring response to his or her environment. Marketer aim advertising campaigns at general types of personalities. In doing so, they use personality characteristics that are positively valued.

Demographic Factors

Consumer buying behavior in influenced by demographic factors also. Demographic factors are individual characteristics such as age, sex, race, culture, income, family size, occupation, education, material status, etc. These demographic factors can influence the individual who are involved in family decision making. These factors can also affect the extent to which a person uses products in a specific product category.

Psycho-Analytic Factors

The psychoanalytic approach, also called socio-psychology, propounded by Sigmund Freud states that personality is made up of three primary systems of interdependent psychological forces the id, the superego, and ego. Human behavior is a function of the interaction of these three systems.

• The ‘id’
• The ‘super-ego’
• The ‘ego’