7.1 Factors That Influence Consumers’ Buying Behaviour

Social Situation

The social situation you’re in can significantly affect your purchase behaviour. Perhaps you have seen Girl Scouts selling cookies outside grocery stores and other retail establishments and purchased nothing from them, but what if your neighbour’s daughter is selling the cookies? Are you going to turn her down or be a friendly neighbour and buy a box (or two)?

Companies like Pampered Chef that sell their products at parties understand that the social situation makes a difference. When you’re at a friend’s Pampered Chef party, you don’t want to look cheap or disappoint your friend by not buying anything. Certain social situations can also make you less willing to buy products. You might spend quite a bit of money each month eating at fast-food restaurants like McDonald’s and Subway. Where do you take someone for your first date? Some people might take a first date to Subway, but other people would perhaps choose a more upscale restaurant. Likewise, if you have turned down a drink or dessert on a date because you were worried about what the person you were with might have thought, your consumption was affected by your social situation (Matilla & Wirtz, 2008).

Time

The time of day, time of year, and how much time consumers feel like they have to shop affect what they buy. Researchers have even discovered whether someone is a “morning person” or “evening person” affects shopping patterns. Have you ever gone to the grocery store when you are hungry or after payday when you have cash in your pocket? When you are hungry or have cash, you may purchase more than you would at other times. Seven-Eleven Japan is a company that’s extremely in tune with time and how it affects buyers. The company’s point-of-sale systems at its checkout counters monitor what is selling well and when, and stores are restocked with those items immediately—sometimes via motorcycle deliveries that zip in and out of traffic along Japan’s crowded streets. The goal is to get the products on the shelves when and where consumers want them. Seven-Eleven Japan also knows that, like Americans, its customers are “time-starved.” Shoppers can pay their utility bills, local taxes, and insurance or pension premiums at Seven-Eleven Japan stores and even make photocopies (Bird, 2002).

Companies worldwide are aware of people’s lack of time and are finding ways to accommodate them. Some doctors’ offices offer drive-through shots for patients who are in a hurry and for elderly patients who find it difficult to get out of their cars. Tickets.com allows companies to sell tickets by sending them to customers’ mobile phones when they call in. The phones’ displays are then read by barcode scanners when the ticket purchasers arrive at the events they’re attending. Likewise, if you need customer service from Amazon.com, there’s no need to wait on the telephone. If you have an account with Amazon, you just click a button on the company’s website, and an Amazon representative calls you immediately.

Reason for the Purchase

The reason you are shopping also affects the amount of time you will spend shopping. Are you making an emergency purchase? What if you need something for an important dinner or a project and only have an hour to get everything? Are you shopping for a gift or a special occasion? Are you buying something to complete a task/project and need it quickly? In recent years, emergency clinics have sprung up in strip malls all over the country. Convenience is one reason. The other is a sheer necessity. If you cut yourself and you are bleeding badly, you’re probably not going to shop around much to find the best clinic. You will go to the one that’s closest to you. The same thing may happen if you need something immediately.

Purchasing a gift might not be an emergency situation, but you might not want to spend much time shopping for it, either. Gift certificates have been popular for years. You can purchase gift cards for numerous merchants at your local grocery store or online. By contrast, suppose you need to buy an engagement ring. Sure, you could buy one online in a jiffy, but you probably wouldn’t do that. What if the diamond was fake? What if your significant other turned you down, and you had to return the ring? How hard would it be to get back online and return the ring (Hornik & Miniero, 2009)?

Mood

Have you ever felt like going on a shopping spree? At other times, wild horses couldn’t drag you to a mall. People’s moods temporarily affect their spending patterns. Some people enjoy shopping. It’s entertaining for them. At the extreme are compulsive spenders who get a temporary “high” from spending.

A sour mood can spoil a consumer’s desire to shop. The crash of the U.S. stock market in 2008 left many people feeling poorer, leading to a dramatic downturn in consumer spending. Penny pinching came into vogue, and conspicuous spending was out. Costco and Walmart experienced heightened sales of their low-cost Kirkland Signature and Great Value brands as consumers scrimped (Birchall, 2009). Saks Fifth Avenue wasn’t so lucky. Its annual release of spring fashions usually leads to a feeding frenzy among shoppers, but spring 2009 was different. “We’ve definitely seen a drop-off of this idea of shopping for entertainment,” says Kimberly Grabel, Saks Fifth Avenue’s senior vice president of marketing (Rosenbloom, 2009). To get buyers in the shopping mood, companies resorted to different measures. The upscale retailer Neiman Marcus began introducing more mid-priced brands. By studying customer loyalty cards, the French hypermarket Carrefour hoped to find ways to get its customers to purchase nonfood items that have higher profit margins.

The glum mood wasn’t bad for all businesses, though. Discounters like Half-Priced Books saw their sales surge. So did seed sellers as people began planting their own gardens. Finally, what about those products (Aqua Globes, Snuggies, and Ped Eggs) you see being hawked on television? Their sales were the best ever. Apparently, consumers who were too broke to go on vacation or shop at Saks were instead watching television and treating themselves to the products (Ward, 2009).

Personality describes a person’s disposition, helps show why people are different and encompasses a person’s unique traits. The “Big Five” personality traits that psychologists discuss frequently include openness, or how open you are to new experiences, conscientiousness or how diligent you are, extraversion or how outgoing or shy you are, agreeableness or how easy you are to get along with, and neuroticism or how prone you are to negative mental states.

Do personality traits predict people’s purchasing behaviour? Can companies successfully target certain products to people based on their personalities? How do you find out what personalities consumers have? Are extraverts wild spenders and introverts penny pinchers?

The link between people’s personalities and their buying behaviour is somewhat unclear. Some research studies have shown that “sensation seekers,” or people who exhibit extremely high levels of openness, are more likely to respond well to advertising that’s violent and graphic. The problem for firms is figuring out “who’s who” in terms of their personalities.

Marketers have had better luck linking people’s self-concepts to their buying behaviour. Your self-concept is how you see yourself—be it positive or negative. Your ideal self is how you would like to see yourself—whether it’s prettier, more popular, more eco-conscious, or more “goth,” and others’ self-concept, or how you think others see you, also influences your purchase behaviour. Marketing researchers believe people buy products to enhance how they feel about themselves—to get themselves closer to their ideal selves.

The slogan “Be All That You Can Be,” which was used by the U.S. Army for years to recruit soldiers, is an attempt to appeal to the self-concept. Presumably, by joining the U.S. Army, you will become a better version of yourself, which will, in turn, improve your life. Many beauty products and cosmetic procedures are advertised in a way that’s supposed to appeal to the ideal self people seek. All of us want products that improve our lives.

Lifestyle

If you have ever watched the television show Wife Swap, you can see that despite people’s similarities (e.g., being middle-class Americans who are married with children), their lifestyles can differ radically. To better understand and connect with consumers, companies interview or ask people to complete questionnaires about their lifestyles or their activities, interests, and opinions (often referred to as AIO statements). Consumers are not only asked about products they like, where they live, and what their gender is but also about what they do—that is, how they spend their time and what their priorities, values, opinions, and general outlooks on the world are. Where do they go other than work? Who do they like to talk to? What do they talk about? Researchers hired by Procter & Gamble have gone so far as to follow women around for weeks as they shop, run errands, and socialize with one another (Berner, 2006). Other companies have paid people to keep a daily journal of their activities and routines.

A number of research organizations examine the lifestyle and psychographic characteristics of consumers. Psychographics combines the lifestyle traits of consumers and their personality styles with an analysis of their attitudes, activities, and values to determine groups of consumers with similar characteristics. One of the most widely used systems to classify people based on psychographics is the VALS (Values, Attitudes, and Lifestyles) framework. Using VALS to combine psychographics with demographic information such as marital status, education level, and income provides a better understanding of consumers.

Motivation

Motivation is the inward drive we have to get what we need. In the mid-1900s, Abraham Maslow, an American psychologist, developed the hierarchy of needs shown in Figure 7.1.1.

Maslow theorized that people have to fulfill their basic needs—food, water, and sleep—before they can begin fulfilling higher-level needs. Have you ever gone shopping when you were tired or hungry? Even if you were shopping for something that would make you the envy of your friends (maybe a new car) you probably wanted to sleep or eat even more. (Forget the car. Just give me a nap and a candy bar.)

The need for food is recurring. Other needs, such as shelter, clothing, and safety, tend to be enduring. Other needs still arise at different points in a person’s life. For example, your social needs probably rose to the forefront during grade school and high school. You wanted to have friends and get a date. Perhaps this prompted you to buy certain types of clothing or electronic devices. After high school, you began thinking about how people would view you in your “station” in life, so you decided to pay for college and get a professional degree, thereby fulfilling your need for esteem. If you’re lucky, at some point, you will realize Maslow’s state of self-actualization. You will believe you have become the person in life that you feel you were meant to be.

Following the economic crisis that began in 2008, the sales of new automobiles dropped sharply virtually everywhere around the world—except the sales of Hyundai vehicles. Hyundai understood that people needed to feel secure and safe and ran an ad campaign that assured car buyers they could return their vehicles if they couldn’t make the payments on them without damaging their credit. Seeing Hyundai’s success, other carmakers began offering similar programs. Likewise, banks began offering “worry-free” mortgages to ease the minds of would-be homebuyers. For a fee of about $500, First Mortgage Corp., a Texas-based bank, offered to make a homeowner’s mortgage payment for six months if he or she got laid off (Jares, 2010).

While achieving self-actualization may be a goal for many individuals in the United States, consumers in Eastern cultures may focus more on belongingness and group needs. Marketers look at cultural differences in addition to individual needs. The importance of groups affects advertising (using groups versus individuals) and product decisions.

Perception

Perception is how you interpret the world around you and make sense of it in your brain. You do so via stimuli that affect your different senses—sight, hearing, touch, smell, and taste. How you combine these senses also makes a difference. For example, in one study, consumers were blindfolded and asked to drink a new brand of clear beer. Most of them said the product tasted like regular beer. However, when the blindfolds came off, and they drank the beer, many of them described it as “watery” tasting (Ries, 2009).

Consumers are bombarded with messages on television, radio, magazines, the Internet, and even bathroom walls. The average consumer is exposed to about three thousand advertisements per day (Lasn, 1999). Consumers are surfing the Internet, watching television, and checking their cell phones for text messages simultaneously. Some, but not all, information makes it into our brains. Selecting information we see or hear (e.g., television shows or magazines) is called selective exposure.

Have you ever read or thought about something and then started noticing ads and information about it popping up everywhere? Many people are more perceptive to advertisements for products they need. Selective attention is the process of filtering out information based on how relevant it is to you. It’s been described as a “suit of armour” that helps you filter out information you don’t need. At other times, people forget information, even if it’s quite relevant to them, which is called selective retention. Often, the information contradicts the person’s belief. A longtime chain smoker who forgets much of the information communicated during an anti-smoking commercial is an example. To be sure their advertising messages get through to you and you remember them, companies use repetition. How tired of iPhone commercials were you before they tapered off? How often do you see the same commercial aired during a single television show?

Another potential problem that advertisers (or your friends) may experience is selective distortion or misinterpretation of the intended message. Promotions for weight loss products show models that look slim and trim after using their products, and consumers may believe they will look like the model if they use the product. They misinterpret other factors, such as how the model looked before or how long it will take to achieve the results. Similarly, have you ever told someone a story about a friend, and that person told another person who told someone else? By the time the story gets back to you, it is completely different. The same thing can happen with many types of messages.

A social class is a group of people who have the same social, economic, or educational status in society (Princeton University, n.d.). While income helps define social class, the primary variable determining social class is occupation. Consumers in the same social class exhibit similar purchasing behaviour to some degree. In many countries, people are expected to marry within their own social class. When asked, people tend to say they are middle class, which is not always correct. Have you ever been surprised to find out that someone you knew who was wealthy drove a beat-up old car or wore old clothes and shoes or that someone who isn’t wealthy owns a Mercedes or other upscale vehicle? While some products may appeal to people in a social class, you can’t assume a person is in a certain social class because they either have or don’t have certain products or brands.

Table 7.1.1 shows seven classes of American consumers, along with the types of car brands they might buy. Keep in mind that the U.S. market is just a fraction of the world market. The rise of the middle class in India and China is creating opportunities for many companies to successfully sustain their products. For example, China has begun to overtake the United States as the world’s largest auto market (France24, 2009).

In a recession when luxury buyers are harder to come by, the makers of upscale brands may want their customer bases to be as large as possible. However, companies don’t want to risk “cheapening” their brands. That’s why, for example, Smart Cars, which are made by BMW, don’t have the BMW label on them. For a time, Tiffany’s sold a cheaper line of silver jewellery to a lot of customers. However, the company later worried that its reputation was being tarnished by the line. Keep in mind that a product’s price is, to some extent, determined by supply and demand. Luxury brands, therefore, try to keep the supply of their products in check so their prices remain high.

Some companies, such as Johnnie Walker, have managed to capture market share by introducing “lower echelon” brands without damaging their luxury brands. The company’s whiskeys come in bottles with red, green, blue, black, and gold labels. The blue label is the company’s best product. Every blue-label bottle has a serial number and is sold in a silk-lined box, accompanied by a certificate of authenticity.

Reference Groups and Opinion Leaders

Reference groups are groups (social groups, workgroups, family, or close friends) a consumer identifies with and may want to join. They influence consumers’ attitudes and behaviour. If you have ever dreamed of being a professional player of basketball or another sport, you have an aspirational reference group. That’s why, for example, Nike hires celebrities such as Michael Jordan to pitch the company’s products. There may also be dissociative groups or groups where a consumer does not want to be associated.

Opinion leaders are people with expertise in certain areas. Consumers respect these people and often ask their opinions before they buy goods and services. An information technology (IT) specialist with a great deal of knowledge about computer brands is an example. These people’s purchases often lie at the forefront of leading trends. The IT specialist is probably a person who has the latest and greatest tech products, and his opinion of them is likely to carry more weight with you than any sort of advertisement.

Today’s companies are using different techniques to reach opinion leaders. Network analysis using special software is one way of doing so. Orgnet.com has developed software for this purpose. Orgnet’s software doesn’t mine sites like Facebook and LinkedIn, though. Instead, it’s based on sophisticated techniques that unearthed the links between Al Qaeda terrorists. Explains Valdis Krebs, the company’s founder: “Pharmaceutical firms want to identify who the key opinion leaders are. They don’t want to sell a new drug to everyone. They want to sell to the 60 key oncologists” (Campbell, 2009, para. 7).

Family

Most market researchers consider a person’s family to be one of the most important influences on their buying behaviour. Like it or not, you are more like your parents than you think, at least in terms of your consumption patterns. Many of the things you buy and don’t buy are a result of what your parents bought when you were growing up. Products such as the brand of soap and toothpaste your parents bought and used and even the “brand” of politics they leaned toward (Democratic or Republican) are examples of the products you may favour as an adult.

Companies are interested in which family members have the most influence over certain purchases. Children have a great deal of influence over many household purchases. For example, in 2003, nearly half (47 percent) of nine- to seventeen-year-olds were asked by parents to go online to find out about products or services, compared to 37 percent in 2001. IKEA uses this knowledge to design its showrooms. The children’s bedrooms feature fun beds with appealing comforters, so children will be prompted to identify and ask for what they want (Mediamark Research, 2003).

Marketing to children has come under increasing scrutiny. Some critics accuse companies of deliberately manipulating children to nag their parents for certain products. For example, even though tickets for Hannah Montana concerts ranged from hundreds to thousands of dollars, the concerts often still sold out. However, as one writer put it, exploiting “pester power” is not always ultimately in the long-term interests of advertisers if it alienates kids’ parents (Waddell, 2009).