Consumer Behavior

At the heart of a business is the consumer; they are what makes a business a business. Understanding consumer behavior is crucial as it helps businesses attract new buyers and retain current ones by catering to their needs and preferences.

The goal of studying consumer behavior is to understand people’s wants and consumption patterns, which come together to form the backbone of the business’s marketing strategy and subsequent decision-making. Knowing valuable information about consumers’ purchasing behaviors and motivators can help create targeted marketing campaigns for products. The data can also be used to segment the market into different segments, which comes in handy to tighten up the marketing efforts.

Psychological Factors  

Let’s look at the three factors that impact consumer behavior. The first is psychological factors. These are the subliminal elements that influence the consumers’ perceptions, decisions, and ultimately their buying behaviors.¹ Consumers’ perception of a brand plays a significant role in determining what they buy. For instance, those attracted to exclusivity may be happy to splurge on expensive branded items because of the associated status symbols.

Also, consumers' preference to buy what they perceive as the best in the market, coupled with the phenomenon of social proof (where individuals rely on the actions and opinions of others to guide their own behavior), may incline them to choose one brand over another despite both offering the same product.² So, your peers think that Apple is the best technology company, you may be more likely to buy an Apple laptop for your studies.

Emotion also plays a major role in influencing purchasing decisions. Ever wondered why you purchased something? More and more research is showing that logic and rational thinking is not the sole driver of our buying choices. In fact, it seems that 95% of our purchasing decisions are made in the subconscious mind.³ We like to think that we make purchasing decisions by comparing brands and different price points but really, as Harvard professor Gerald Zaltman indicates, this is not exactly the case. Unconscious urges, guided by our emotions, significantly drive the choices we make.⁴ 

Personal Factors

Demographic information like age, gender, and lifestyle have been shown to affect consumer behavior.⁵ Parent organizations will often segment their secondary operations by age and gender. For example, the retail giant, Abercrombie & Fitch Co., has another brand called Hollister Co. that specifically markets toward the teen consumer in terms of clothing styles, pricing, and advertising. And the sports brand, Authentic Brands Group, has subsidiary clothing lines that cater to different market segments—Roxy, which primarily targets women, and Quicksilver, which primarily targets men. In terms of lifestyle, most obviously, we buy things that are in line with our hobbies and habits. For example, marketing waterproof jackets to hiking enthusiasts may find more success than to individuals working remotely.

Social Factors

Income level is closely correlated with purchasing patterns.⁶ Socioeconomic status is likely a driving force in whether a family bases their purchases on wants versus needs. Those who have the desire to fit into the community, such as teenagers in a highschool, may be easily influenced by trends or what is commonly found in their social group. And finally, family dynamics are shown to impact purchasing decisions where survey results reveal that children and parents name each other as a key influencer in their purchasing decisions.⁷

What is Consumer Behavior Research? 

To conduct consumer behavior research, we would use the same methods employed in market research: surveys, interviews, and focus groups. But, because consumer behavior aims to garner a wide and comprehensive set of data about the consumer, other methodologies have become increasingly popular. These include ethnographic research, consumer neuroscience, machine learning, and customer relationship management (CRM) databases. For example, studies on consumer neuroscience have revealed the influence of the brain’s emotional center, the limbic system, on purchasing decisions.⁸ CRM databases have also been used to unify customer information and track their interactions with the company.