1. Discuss and explain the key factors influencing consumer behaviour. Why must organisations understand consumer behaviour in order to optimise sales? “Marketing is the activity, set of institutions and processes for creating communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large” (AMA, 2007). “Consumer behaviour is the judgment of final consumers individuals and households who buy goods and services for personal consumption” (Kotler et al., 1999)
There are four key factors influencing consumer behaviour. They are social, cultural, personal and psychological factors. Consumer may tends to change their buying behaviour according to these factors. Cultural factors are described as people who react particular way regard to religion reason. Different culture response differently, how people behave with their buying decision. for instance in Myanmar, majority of people do not have a habit of doing sport or using supplement for diet purposes. In United Kingdom, on the other hand, groups of men and women tend to emphasis on sport and taking supplement. As a supplement business prospective, they should not supply their product or sell in Myanmar.
Social factors are mainly influenced by family, close friend and personal attitude. They are also known as ‘reference group’. Reference group are important as the product are satisfied for their needs, the message with forward to another person which is also known as “word of mouth”. The communication is powerful because we trust our friends’ and colleagues’ opinions. For example, majority of wealthy people do not buy a Primark product, simple because of their status, they should be buying much more expensive product such as Gucci and Chanel. If they do consumer Primark product their friend may talk behind their back which affect the status.
After taking cultural and social factors into consideration, the next things people naturally put things into account is personal factors. personal factors can be defined as a belief in which a person think the particular brand is valued to them. Personal factors consists of buyer’s age, occupation, economic situation and lifestyle. Depending on human life cycle, buyers’ decision making is changing in different stages. Therefore, marketer often segment the market and target the consumer life stages. As an example, it is an inappropriate for the marketer to sell Samsung latest smart phone to senior citizen, they may only want to use simple keypad phone. In term of occupation, people are concerning about their status and image in their society. The products that they consume are crucial to his or her status.
Psychological factors include belief, interest and motivation. Everyone has their own belief in different way. Often majority of people are bias when buying a particular brand. There is no right or wrong answer, in fact, people learnt from past experience whether the brand had met their needs or how they perceived the brand . For example, Iphone 5, more and more people are getting the new Iphone 5, not because it is very special. In fact Samsung s3, has better functionality than Iphone but still people buys it. This shows people value the brand of Apple and how they perceived the brand. Motivation factors are another factor that consumer think before they buy. According to Maslow theory, different people has different needs. So, marketer should know how to segment the market and target the right person to maximise sales.
In summary, organisation should consider how consumer behave for certain product by looking at these four factors. furthermore, communicating with consumer are crucial to the market as they sent the message the consumer about the product’s feature. Therefore, marketer has to be segment the market and target the right consumer to deliver the message across.