Business Behavior Factors: How Do They Affect the Decision to Purchase Goods and Services

It's long been accepted that price is a paramount factor when making a purchase. But it's far from the only one. It's crucial to understand what else influences a person's decision in that pivotal "to buy or not to buy" moment. What drives their choice when faced with an array of similar products? This article aims to delve deeper into these nuances.

For retailers to outpace their competitors, they must have a comprehensive understanding of their clientele: how decisions are made, what motivates them, and what might deter them from making a purchase.

While we won't claim to have cracked the code of consumer behavior entirely, we'll try to peek into the "black box" and shed light on several aspects that shape purchasing decisions.

Consumer behavior encompasses the emotional and behavioral reactions people have related to the selection, acquisition, and use of a product or service. When making choices, the context of the purchase location and the information channel are significant. Based on consumer behavior, companies model and establish their marketing strategy, pinpoint advertising channels and tools, and set the product range and prices.

Consumer behavior results from the interplay of three multiplied factors: the capability to purchase, the opportunity to do so, and the motivation behind it.

Without discerning a consumer's motivation, it becomes challenging to position a product accurately and elevate its perceived value.

What, besides motivation, influences a buyer's choice and dictates their behavior during decision-making?

Consumer behavior is a three-stage process:

Understanding what influences beliefs and shapes a consumer's attitude comes from recognizing the factors that determine their behavior. Let's consider a decision-making model created by Hawkins, Best, and Coney. This descriptive model demonstrates that the process of satisfying varying needs is rooted in a consumer's lifestyle.

In this model, lifestyle plays a pivotal role in shaping needs and attitudes. Lifestyle is the ensemble of habits and actions undertaken by an individual, reflected in behavioral patterns, thought processes, and decision-making. It, in turn, rests on a multitude of external and internal factors.

Diving deeper, these influential factors can be broadly categorized into two subgroups: internal and external factors.

Internal factors encompass personal and psychological aspects, while external ones relate to social and cultural elements.

Personal factors stand out as some of the key elements influencing a purchase decision. They include:

- The gender and age of the buyer
- Life cycle stage
- Education level
- Occupation
- Lifestyle
- Income level
- Worldview, etc.

Age, gender, and life cycle stage are particularly noteworthy. Marketers have devised numerous classifications of consumer behavior based on life cycle stages.

Here's one version of a life cycle breakdown employed when researching target audiences.

Utilizing generational theory to explain consumer behavior has become a commonplace approach. "Generation X", "Millennials", and "Generation Z" feature prominently in every other marketing study.

For instance, older individuals tend to possess limited knowledge about the internet and new technologies. This makes them more inclined to try out products before purchasing. On the flip side, younger customers are more receptive to retail innovations. This is especially true for Millennials (Generation Y) and Generation Z. However, a portion of these young consumers are either new to the workforce, earning modest salaries, or are still in their educational phase, impacting their disposable income. Those with lower incomes often approach online shopping with caution due to a low tolerance for financial loss, in contrast to higher-income consumers.

Gender differences also come into play. Women frequently purchase clothing, cosmetics, toys, and similar products, while men typically lean towards gadgets. Regardless of gender, no one takes purchase decisions lightly; what unifies all is the significant amount of time spent searching for the best options.

Occupation plays a pivotal role. A person's professional field greatly influences the channels through which they obtain information and the criteria they employ when making choices.

Tech-savvy shoppers are more inclined towards online purchasing because they can easily assess potential risks. They can quickly gauge the reliability of an online store in terms of payment methods, product quality, delivery, and so on.

Economic status plays a part too. A family's income and financial well-being significantly affect the contents of their shopping cart and their preferred brands.

Lifestyle, defined by people's interests and activities, and how they allocate resources like time, money, and information, has a direct influence on consumer decisions. A factory worker, for example, is unlikely to spontaneously jet off to Paris for a weekend opera premiere at the "Grand Opera."

Personality type also matters. Psychological traits distinguishing one individual from another, such as temperament, character disposition, and other characteristics, undoubtedly influence consumer behavior.

Behind every purchase decision lies the fulfillment of a specific need. Before making a purchase, an individual undergoes an internal dialogue, asking themselves questions like, "Should I search for a better price?", "Should I visit another online store?", "Is this store trustworthy?" and myriad other queries that clarify their stance on the purchase.

Four primary psychological factors influence consumer behavior: motivation, perception, learning, and belief systems.

Motivation

A motive is a tangible need for someone or something. It's our desire, our aspiration or dream, what our body or mind demands. What we aim to achieve is termed as an objective, incentive, or target.

Identifying how to motivate a customer to recognize a need for a product or service and then take action to satisfy that need is the initial step.

Perception

Perception is also a pivotal factor. It relates to how your client perceives the world or learns about your product. People have different learning methods. For those who are visually inclined, they'll quickly grasp a product with high-quality images. Kinesthetics will need to understand its dimensions and read detailed descriptions about the material, texture, or other product features, and so on.

Belief System

The belief system ties in with all these factors and can influence them. Customer behavior will be affected by the opinions they've formed about a specific brand. For example, if certain beliefs of a customer (like their stance on social issues or environmental concerns) don't align with a brand's image, they might not buy the product, even if they consider it beneficial.

Learning/Experience

On the flip side, consumers' past shopping experiences play a critical role in their purchasing decisions. Hence, providing exceptional customer service can be vital for retailers.

In addition to these internal factors of consumer behavior, external factors, particularly sociocultural ones, profoundly impact an individual.

Reference Groups and Social Surroundings.

Take, for instance, a person who urgently needed a laptop last month. They opted for a MacBook Pro. What influenced this decision to pick this specific model? It was primarily because their close friend, who is tech-savvy, uses a gadget from this brand and is quite satisfied with it.

Family Influences

The family holds significant sway in the decision-making process. For instance, if you're married, you'll likely lean towards products that benefit the whole family or come in family-sized packaging.

Social Roles and Status

One's social role and status also shape consumer behaviors. Imagine you are a commercial director at a large company, someone's son, husband, and father. Your role could impact the purchasing inclinations of many. When deciding on a purchase, a consumer might lean into one of their roles. They might choose clothing based on the prestige of their position, while their choice in vehicles might revolve around their role as the head of a large family.

Cultural influences on consumer behavior echo the social ones. Culture represents enduring forms of social interactions, crystallized as generally accepted norms and values passed from one generation to the next.

It encompasses art, religion, societal customs, and traditions, standing as one of the most fundamental drivers dictating an individual's desires and actions. Nearly everything we do – our reaction to information, our decision-making process, and our societal interactions – is rooted in culture.

Ideology

Culture pertains to beliefs and practices shared by a specific group of people. Since it varies from country to country, this factor is essential to consider when entering foreign markets.

Subcultures

Every culture consists of "subcultures" - subsets of people with shared values and beliefs distinguishing them from the broader cultural milieu. Subcultures might be centered around nationalities, religions, racial groups, or even people living in the same geographical area.

For instance, a subculture might be defined by musical preferences (rockers, hip-hop enthusiasts) or generational priorities (youth subcultures). From a sales and marketing perspective, it's crucial to determine whether your potential customer belongs to any subculture and then tailor your advertising content accordingly.

Social Classes

Furthermore, societies are stratified into classes - relatively homogeneous, stable, hierarchically structured groups united by a similar socio-economic status. Members within these classes share interests, values, and behaviors. Consumers from different classes exhibit varied purchasing behaviors. A stark example would be India's caste system.

Beyond the subconscious personal factors shaping a buyer's behavior, a company's direct marketing efforts on its customers are equally significant and can be categorized under socio-cultural influences. Skillfully employing the right triggers and motives, from engaging messages to influential figures like bloggers and influencers, marketers drive the consumer towards making a purchase.

By leaning on correctly identified motivations and significant factors, they craft a unique web experience. The amalgamation of information, emotions, online functionalities, and other elements propels the consumer towards actions desired by the marketers.

With online shopping now a staple in people's lives, optimizing e-commerce platforms to align with expected customer experiences is paramount.

Yet, it's far from a straightforward task. Behind customer behavior lies a multitude of factors, many of which are not readily discernible. It takes time, effort, and a few missteps to eventually devise a strategy best suited for both your business and your clientele.

But if you manage to pinpoint the key influences affecting your potential customer, the time and energy spent in discerning them will yield dividends manifold.