The market is saturated with products and services that seem to have very few differences so that some businesses have a difficult time distinguishing themselves from the competition. If you ever find yourself in a similar situation, you may find that studying consumer psychology and behavior is useful for your business.
Studies on consumer psychology and behavior show the relationship between consumers and businesses, with a focus on consumers’ purchasing decisions. These studies cover:
- The psychological, behavioral, and motivational reasons behind buying decisions
- External and internal factors that affect or influence buying decisions
- Feelings or emotions associated with specific industries and brands
- How companies can tailor campaigns that better appeal to their consumers
By focusing on getting to know the consumer psyche, you’ll gain insights into what drives your consumers to make specific purchases and ignore other options.
Factors that affect consumer behavior
Consumer behavior is not logical or linear, precisely because there are several factors that influence the way consumers behave and make decisions. And although predicting consumer behavior is not an exact science (even with the use of algorithms), getting to know your consumers and the factors that move them can help you make educated guesses as to how your products (or services) are perceived and will be received by your market.
These factors are as follows:
- Economic: This is probably the most obvious and influential factor as the pricing strategy is an important aspect of product positioning. Every target demographic belongs to a socioeconomic class and has an income level or purchasing power. You may offer the greatest, most useful product in the world, but if very few people or no one can afford it, it’s practically useless. Additionally, consumers who are met with two very similar options usually make a final decision based on price.
- Sociocultural: The influence of culture and society on the individual is pervasive and lifelong, whether or not people are aware of it. Our personal values, social mores, cultural traditions, socio-economic class, educational attainment, belief system, and lifestyle affect the choices we make, including our daily purchases. You can easily see this with products that go viral on social media where people decide to “like,” support or actually order an item simply because a lot of their friends or family members have already done so. Another good example of this is when transnational or multinational companies tailor the brand name and ingredients of certain products they offer to ensure these agree with the culture of the people they are marketing them to.
- Psychological: How consumers perceive your business, brand and offerings affects how they behave or react to your marketing campaigns and business overall. Your brand image may be perceived differently depending on the psychological lenses of your target audience. For example, successful brands that are marketed as family-friendly may be viewed negatively by some consumers if it is found that they pollute rivers and streams or have unfair labor practices. Some consumers may be indifferent to these things and will keep buying, while others whose political sensibilities may have been offended will start looking for alternatives.
- Personal: Although money and social pressure majorly affect buying decisions, a consumer who finds your product or service personally unnecessary won’t be persuaded to avail of it. This is the reason why companies that produce cosmetics, beauty and personal hygiene products have found a way to sell to a traditionally non-receptive audience: men. By offering two different product segments addressing the needs of each gender, these companies have not only persuaded men to use specialized cosmetics, beauty and personal hygiene products, but have also expanded their market share.
In discussing the above factors that influence consumers’ buying decisions, we’re merely scratching the surface. So if you want to know how you can make your brand more competitive and ensure it reaches the people who matter, get in touch with us at Ethridge & Associates.