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Factors Affecting Consumer Buying Behaviour

Introduction

The American Marketing Association defined ‘consumer behaviour’ as “the dynamic interaction of affect and cognition, behaviour and the environment by which human beings conduct exchange aspects of their lives” (De Mooij, 2011, p. 21). Kardes et al. (2014, p.13) see consumer behaviour as “an applied social science that draws on theories and concepts of psychology, sociology, anthropology, economics, history, and statistics”. Alternatively, consumer behaviour is “the study of how individuals spend their available resources on consumption-related items, [including] the study of what they buy, why they buy it, when they buy it, where they buy it, how often they buy it, and how often they use it” (Schiffman & Kanuk, 1996, cited in Saha et al., 2010, p. 40).

This is not to say that each of these factors has a distinct and determinable influence on consumer behaviour; often, these factors mitigate or contribute in complex ways to how consumers eventually behave. As Tatlilioglu (2014) observes, while the various factors differ from each other, such as those pertaining to the disciplines of psychology and economics, they are intertwined in the resultant behaviour, attitudes, expectations, emotions and feelings, preferences, and decisions of consumers that define market movements.

In general, academic literature adheres to the two disciplines alluded to by De Mooij (2011), Kardes et al. (2014), and Tatlilioglu (2014) – namely, economics and psychology, which combined result in a number of overlapping fields that include behavioural economics, market psychology, and consumer behaviour.

Consumer Preferences and Tastes

Consumer tastes and preferences pertain to demand-side factors that influence how customers search for, assess, and decide which products and service they will buy. Tastes and preferences are influenced by cultural, social, personal, and psychological factors that define consumers individually and in groups. A number of researchers have studied these factors, as discussed below:

Social and Cultural Factors

Ideally, consumer behaviour theories spring up and are developed within cultural contexts by studying the behaviour of people within each nation (De Mooij, 2011). A number of studies focused on the factors affecting consumer behaviour given specific countries, societies, or cultures. Sometimes, the distinction is circumscribed by a narrower geographical area than national boundaries; for instance, Topcu et al. (2010) were able to characterise the distinct consumer response to sunflower oil products in Turkey, but more particularly in the Erzurum Province. Social factors could be elements that comprise the motivation behind the purchase, which in turn could have been influenced by the motivating agent (family and friends, peer group, etc.) (Cerezo et al., 2013; Kurt et al., 2011; Virvilaite, & Saladiene, 2012; Xueming, et al, 2014). The social groups a person identifies with and whose approval of his inclusion are valuable to him comprise formidable factors that drive the purchase decision (Cavanaugh, 2014; Gherasim, 2013; Yalkin & Rosenbaum-Elliott, 2014; White et al., 2012).

Personal Factors

Customer satisfaction and loyalty are two such personal factors which affect consumer behaviour. Their effect on customers’ choice of service online and offline was the subject of discussion by Shankar et al. (2003). Their study’s findings suggested that the levels of customer satisfaction for services that is chosen online is the same as that for services chosen offline. Surprisingly, however, loyalty to service provider is higher for services that are chosen online than those chosen offline. It appears from the findings that a reciprocal relationship exists between customer satisfaction and loyalty, so that an increase in customer satisfaction positively reinforces loyalty, and vice-versa. This reciprocal relationship has been determined to be stronger online than offline. The stronger effects for online choices appear to be due to the ease of obtaining information online rather than offline. (Shankar et al., 2003).

Psychological Factors

Psychological factors include the level of trust the customer reposes on the product promoter or retail store owner. Cheung et al. (2005) and Gatautis et al. (2014) state that perception by consumers of the trust related risk factors drive them to translate purchase intention into purchase decision. Contributing to this reliance upon trust in terms of product/service characteristics are the aforementioned controllable key factors of product type, price, and brand reputation (Cheung et al. 2005; Gatautis et al. (2014).

Shopping medium is one factor that significantly affects consumer behaviour. According to Singh and Singh (2014), consumers behave differently for online and offline shopping, even if the same consumers have similar social, cultural, personal and psychological profiles. These factors appear to have a more profound influence on traditional shopping; on the other hand, online shopping is more impacted by the consumer’s individual point of view and personal perceptions. The influence of social and cultural factors are more constrained in online shopping. Therefore, the implication is that consumers exercise a greater freedom in making online choices based on their personal preference and are less limited by socio-cultural norms (Singh & Singh, 2014).

Market-Based Supply-Side Factors

The foregoing sections examined those factors which are associated with the personal attributes of the consumers; these fall properly within the sociological or psychological aspects of consumer behaviour. The other aspect is that of the economic field of study, which deals with the market attributes on the supply side. The marketing strategy is embodied in the marketing mix, namely the product, price, promotion and place, which should be appropriate to serve the target market. Saha et al. (2010) suggest some of these factors anchored on the four elements of the marketing mix:

Under product factors are the following sub-variables: brand, design, quality, durability, product warranty, variety model, beautiful packaging, importation, reparability, and environmental-friendliness (Saha et al., 2010). Price factors are comprised of the following sub-variables: having the cheapest price, providing cash discount, same quality as competitors but for a lower price than theirs, and value of price paid (Saha et al., 2010). Place factors include the following sub-variables: appealing store atmosphere and décor; the store has high geographic accessibility at the right price; merchandise sold is of the highest quality; product specialty of the store; merchandise display is pleasing to the consumer; the store is conveniently located; the store is well-stocked with a variety of choices; and the store is popular or well-known (Saha et al., 2010). Finally, the promotion factor, the sub-variables include celebrity endorsers; TV and radio advertising, bill board, newspaper and magazine advertising, catalogue and brochure promotional materials, other promotional campaigns (e.g. buy one- take one free, free gift, lucky draws, free delivery), and after sales service (Saha et al., 2010).

The target market is defined by the demographic segmentation of the intended customers; segmentation is commonly based on gender, age, education and income, and other social circumstances such as marital status, parenthood, lifestyle, place of residence, and so forth (Singh & Singh, 2014). Identification and definition of the target market enables the effective formulation of a cogent marketing strategy that achieves the objectives of the business – that is, to maximize sales volumes and amount while minimising costs and generating profit. These objectives serve the general goal of the business, which is to create products and services that meet consumer needs. Following are discussions of market mix elements in relation to consumer behaviour.

Product Segment and Place

The type of product being marketed and the type of retail store in which selling takes place also influence consumer behaviour. For instance, customers exhibit a greater price sensitivity for grocery products (Degeratu et al., 2000) than they do for higher end electronic products (Singh & Singh, 2014) and electrical products (Furaiji et al., 2010), although the medium for all three is online sales. Also, as noted in the Degeratu et al. (2000), Panda & Narayan Swar (2013/14), Gatautis et al. (2014), and Singh and Singh (2014) reports, the purchase decision also depends upon stark contrasts in online and traditional marketing.

Brand, Price and Promotion

A seminal study on brand and price was also examined by Grewal et al. (1998), who stated that brand names increase in importance when they are marketed online for some product categories only, and for others they have the same importance for both online and traditional markets. Greater importance is associated with brands that offer information on fewer attributes online; brands that rely on brand image for their differentiation do not really need to describe their products in a detailed manner, while functional products that do not really rely on brand names will experience better sales when offering detailed product information (Degeratu et al., 2000).

Krishna (2011) investigated the effectiveness of brand labels in attracting sales and building customer loyalty in order to generate repeat sales. The study discovered that private label brands in the retail apparel industry are very successful in attracting consumer buying behaviour, citing the confluence of external factors such as brand awareness of store, brand image, cheaper price, discounts, comfort, durability, design, quality, ambience and visual merchandising, which attach to the private label brands. These factors were categorised into four factors: brand image (i.e. brand awareness and image of the store), sales promotion offers (i.e. cheaper price and discounts), design (i.e. comfort and durability), and store atmospherics (i.e. ambience and visual merchandising). The favourable consumer behaviour was determined to be persistent irrespective of the customers’ occupation, social class (which was significant, given that the study was conducted in India, where social class is highly structured), or the demographic factors.

Concerning the price, there is a greater sensitivity on the level of prices online, attributed to the fact that online promotions are stronger signals of price discounts. Price and promotion, when combined, have a weaker effect online than offline. Executives expressed concern that online consumers may be overly focused on price, which may result in strong price competition (Degeratu et al., 2000).

Advertisement and Communications

When choosing online, sensory search attributes, such as visual cues about the product (such as the design on paper towels), have a lower impact on the choices made, while factual information of a non-sensory nature (for instance, the fat content of margarine) have a higher impact, compared to their effects on customers through traditional marketing. This is not surprising, because traditional marketing offers a more multidimensional sensory experience for the customer (i.e. the customer can not only see but also feel, smell, and otherwise examine the product with all five senses. Detailed information, however, can be accessed and appreciated more through the website than a salesperson can relate to the customer in the store (Degeratu et al., 2000). The apparent ineffectiveness of the provision of more detailed information in converting searches to sales was also evident in the study by Grant et al., (2007), which corroborates the findings of Degeratu et al. (2000).

Message structure and content are important in formulating advertising strategies. Vital elements in framing the advertising strategy to the consumer include information source utility, content utility, format utility, which pertain to the supplier. These are not the only elements that influence the effectiveness of information communication. Elements pertaining to the demand side are the personal factors that affect the consumer search behaviour, such as cognitive factors, personal skill factors (i.e. technology, search, and information processing skills), and perception of the utility of conducting the search. Also, product factors affect consumer search behaviour; for instance, ‘experience products’ such as wine, restaurants and travel which fulfil consumers’ experience needs, are defined by subjective or opinionated information, which may not be as persuasive to consumers as objective or factual information (Grant et al., 2007).

Some firms rely on advocacy issues thought to be popular among the public in order to encourage consumers to patronize their products or brand as a means of showing support for these issues. An example is green advertising, an element of green marketing that firms employ to identify themselves with consumers who are concerned about the environment, conserve resources, and who purchase environmentally friendly products and services. The study by Do Paco & Reis (2012), however, indicates that the opposite effect sometimes results. Consumers who are more environmentally concerned tend to develop a greater degree of scepticism toward green advertising that are exhibited on packages and featured in ads. This may be explained in the fact that the more environmentally concerned an individual is, the more discerning he/she will be towards outright claims made by companies, and will more keenly evaluate if such messages are ambiguous, confusing, or false. This reaction has been observed in both male and female consumers. Companies will therefore be wise to exercise caution in making sweeping claims that may be perceived to be misleading, opportunistic, and designed to take advantage of unwary consumers.

Sponsorship and Celebrity Endorsement

Sponsorship activities create an impact on consumer based brand equity behaviours, as observed by Akwensivie et al. (2014). Academic researchers look upon sponsorship as a strategic activity in aid of marketing, because “it concerns decision about the allocation of resources to achieve organizational objectives and also because it is used to align an organization with the pressures and demands of its environment” (Slack & Bentz, 1996, as cited in Akwensivie et al., 2014, p. 108). Brand image transfer, either at the individual or corporate brand level, is likely the strongest benefits of sponsorship. Customers may associate positive corporate responsibility values to the company or its brand cecause of a company’s sponsorship activities, which in turn enhances the consumers’ product assessment, resulting in favourable purchase decisions (Akwensivie et al., 2014).

Event sponsorship is one type of sponsorship that evokes strong motivations on the part of consumers to patronize certain products or services associated with the event. The event may be a social one, it may be competitive, commemorative, or the celebration of an important occasion. The most popular type of such event sponsorships is probably sports events, the mega event of which is the Olympics which is held every four years. Annual events include the major tournaments for specific sports events – football, baseball, golf, tennis, and so forth. Sponsorship particularly of a sports team is part of a firm’s communication mix; by identifying with the sponsored entity or event, the sponsor’s brand conveys its affective commitment to it (Lings & Owen, 2007). Affective commitment is the emotional attachment felt by a team’s fan base for the team, and it is this emotion that drives the identification that the fans attach to the sponsoring brand with the team to which affective commitment is endowed. Therefore, it is neither information nor evaluation that determines the purchase decision, but the emotional attachment to the team sponsored by the brand (Garland et al., 2008; Lings & Owen, 2007).

The study by Smith et al. (2008) on sport sponsorship and purchase intention likewise identifies an affective factor that motivates the buying decision by consumers. This factor is termed fan passion, which is consistent with the nature of affective commitment by Lings & Owen (2007). In the case of Smith et al. (2008), however, fan passion must be coupled with the perception of sponsor integrity; with only fan passion but with the lack of the perception of integrity, the sponsorship activity will not elicit the same commitment but will appear to be purely a commercial undertaking.

Another type of sponsorship which employ affective or emotional factors rather than information and evaluation is celebrity endorsements. In a research conducted of commercials in the United States, Tran (2013) found that 25% of all US commercials used celebrity endorsers. This type of sponsorship engages those consumers who have identified themselves with the celebrity; however, as with Smith et al. (2008), emotional attachment is not the sole determinant of purchase decisions in the case of celebrity endorsements. Rather, it is vital that source credibility – that is, the credibility of the endorser – is also perceived by consumers in order for purchase intention to result for the celebrity’s endorsed products. Source credibility include matching the right celebrity with the right brand (Dzisah & Ocloo, 2013). Higher levels of purchase motivation is related to an increase in consumer identification with and loyalty to the celebrity, and how credible such celebrity is perceived (Tran, 2013). When the celebrity’s credibility is challenged, such as when such celebrity is immersed in a scandal, revoking the endorsement becomes necessary; oftentimes, denial of the truth of such adverse event only serves to lower the endorser’s trustworthiness (Carrillat et al., 2013).

Conclusion

This brief review of available academic literature examines the factors that influence consumer behaviour that prior researchers have uncovered and treated on. While the consumer behaviours discussed covered the search for a desired product or service, the evaluation thereof based on available information and the emotions consumers attach to them, the central focus of much of the research dealt with the motivation that leads to the eventual purchase decision. The purpose of the academic inquiries conducted were to explore the relative impacts of such factors, such that marketing managers may be guided by the research findings in the proper designation and implementation of policies that increase sales and improve the viability of the business.

The research found many various factors that influence how consumers behave. It was important to consider both the demand side, pertaining to the consumers’ personal attributes and circumstances, as well as the supply side, dealing with the marketing strategy of the firm selling the product. Concerning the consumers’ tastes and preferences, the social, cultural, psychological, and personal factors all play a part in the motivation of the individual customer to make the purchase. On the part of the company, the product, price, place, and promotions factors which the company can control should be carefully considered in order to match the consumers’ tastes and preferences.

A number of new insights were unearthed during the course of the study. There were some practical courses of action that a company which markets online should take, such as the use their medium to reinforce loyalty, enhance the information content and make information access as easy as possible on the website, and provide frequent online users greater value to reward their patience. While sponsorships and celebrity endorsements are capable of motivating consumers on the basis of emotional identification, it is necessary that both the brand and the endorsers be perceived to possess credibility and integrity. Also not all green advertising will draw the support and patronage from environmentally conscious consumers; the company must take care to avoid ambiguous and misleading claims that may be perceived as false.

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