In making a final decision, and indeed throughout the whole decision-making process, consumers are influenced by a wide range of factors, not just those relating to the obvious features of the product.
Some of these factors exert a direct, measurable influence on buying decisions, whereas others are less tangible and may only suggest patterns of buying behavior.
In many cases intangible factors, such as the perception of the product or the relationship between supplier and consumer, may be important.
A good understanding of the different factors that influence consumer behavior is crucial to marketers and is therefore the subject of much market research. Comprehension of these factors is instrumental in segmenting and positioning products and in motivating consumers to buy.
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A: The factors influencing consumer behaviour are- 1. Culture 2. Sub-Culture 3. Social Class.
B: A consumer’s behaviour is influenced by the following social factors. These are – 1. Reference Group 2. Family 3. Roles and Statuses.
C: Personal characteristics also influences buyer’s decision. They are – 1. Age and Stage in the Life Cycle 2. Occupation and Economic Circumstances 3. Lifestyle 4. Personality and Self-Concept.
D: Psychological factors that influence consumer behaviour are – 1. Motivation 2. Beliefs and Attitudes 3. Learning 4. Perception.
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E: The nine main factors influencing consumer behaviour are – 1. Economic Factors 2. Age and Life Cycle 3. Geography 4. Social Class 5. Culture 6. Peer Pressure 7. Lifestyle and Values 8. Diffusion of Innovation 9. Psychological Factors.
Factors Influencing Consumer Behaviour: Social Factors, Personal Factors, Psychological Factors and Economic Factors
Factors Influencing Consumer Behaviour – Important Factors: Culture, Sub-Culture and Social Class
Culture, Sub-culture and social class are particularly important in buying behaviour.
They are discussed below:
Factor # 1. Culture:
The most fundamental determinant of a person’s wants and behaviour is the culture. It comprises of the norms, learned values, rituals, and symbols of society, that are transmitted by the means of both the language and symbolic features of the society. The growing child acquires a set of values, perceptions, preferences, and behaviours through his or her family and other key institutions.
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A child growing up in the United States is exposed to the following values- achievement and success, activity, efficiency and practicality, progress, material comfort, individualism, freedom, external comfort, humanitarianism and youthfulness.
Factor # 2. Sub-Culture:
Each culture comprises of smaller sub-cultures that gives more specific identification and socialisation for their members. Sub-cultures have nationalities, religions, racial groups, and geographic regions. Many sub-cultures make up significant market segments, and marketers often design products and marketing programs tailored to their needs.
Factor # 3. Social Class:
Social stratification in exhibited by all humans virtually. At times, stratification takes the form of a caste system where the members of different castes are reared for certain roles and cannot change their caste membership. Quite frequently, stratification takes the form of social classes.
Social classes are relatively homogenous and enduring divisions in a society, which are hierarchically ordered and whose members share same values, interests, and behaviour.
Factors influencing Consumer’s Behaviour in the Market – Social Factors: Reference Group, Family, Roles and Statuses
A consumer’s behaviour is influenced by the following social factors:
1. Reference Group:
In general parlance, a reference group can designate to a person or a group that serves as a point of comparison (or reference) for an individual informing either general or specific values, attitudes or behaviour. Every human being because of his sociable nature prefers to evaluate his abilities and opinion based on the comparison of others abilities and opinions.
Philip Kotler defines it as, “A person’s reference groups consist of all the groups that have a direct (face-to-face) or indirect influence on the person’s attitudes or behaviour.”
2. Family:
Family members plays an important role in determining social behaviour. The family is the most important consumer buying organisation in society, and it has been researched extensively.
Family is of two types:
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(i) Family of Procreation – A direct influence on every buying behaviour it comprises one’s spouse and children. Marketers are interested in the roles and influence of the husband, wife and children on the purchase of different products and services.
(ii) Family of Orientation – From parents a person acquires an orientation towards religion, politics, self-worth etc. In countries where parents live with their grown children, their influence can be substantial.
Husband-wife involvement varies widely by product category and by stage in the buying process. With evolving consumer lifestyles buying roles changes.
3. Roles and Statuses:
In various groups an individual participates-family, clubs, and organisations. The person’s position in each group can be defined in terms of role and status. A role carries activities that a person is expected to perform. Each role carries a status. A Court Justice has more status than a manager, and a manager has more status than an office clerk.
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People choose products that communicate their role and status in society. It is evident as the company presidents often drive Mercedes, wear expensive suits, and drink Chivas Regal scotch. Marketers are aware of the status symbol potential of products and brands.
Factors Influencing Consumer’s Behaviour in the Market – Personal Factors: Age and Stage in the Life Cycle, Occupation and Economic Circumstances and Lifestyle
Personal characteristics also influences buyer’s decision including the buyer’s age and stage in the life cycle, occupation, economic circumstances, lifestyle, and personality and self-concept.
Personal Factor # 1. Age and Stage in the Life Cycle:
Needs of a person changes with age and at different stages of his life. Not only this, but his tastes and habits change with age for clothes, food, furniture, recreation etc. The family life cycle influences consumption levels and patterns. They eat baby food in the early years, most foods in the growing and mature years, and special diets in the later years.
Some recent work has identified psychological life cycle stages. Marketers pay close attention to changing life circumstances -divorce, widowhood, remarriage and their effect on consumption behaviour.
Personal Factor # 2. Occupation and Economic Circumstances:
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A company president will buy expensive suits, air travel, country club membership, and large sailboat etc. Occupation also influences a person’s consumption pattern. A blue-collar worker will buy clothes, work shoes, and lunchboxes. Marketers try to identify the occupational groups that have above-average interest in their products and services.
Product choice is greatly affected by economic circumstances; spendable income (level, stability, and time pattern), savings and assets (including the percentage that is liquid), debts, borrowing power, and attitude towards spending versus saving.
Marketers of income-sensitive goods pay constant attention to trends in personal income, savings, and interest rates. In case economic indicators point to a recession, marketers can take steps to redesign, reposition, and re-price their products so they continue to offer value to target customers.
Personal Factor # 3. Lifestyle:
A lifestyle is the person’s pattern of living in the world as expressed in activities, interests, and opinions. Lifestyle portrays the “whole person” interacting with his or her environment. People from the same sub-culture, social class, and occupation may lead quite different lifestyles.
Marketers search for relationships between their products and lifestyle groups. For instance, a computer manufacturer might find that most computer buyers are achievement-oriented. The marketer may then aim the brand more clearly at the achiever lifestyle.
Personal Factor # 4. Personality and Self-Concept:
Personality is usually described in terms of self-confidence, dominance, autonomy, deference, sociability, defensiveness, and adaptability. Each person has a distinct personality that determines its buying behaviour. By personality, we mean distinguishing psychological characters that lead to relatively consistent and enduring responses to environment.
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Personality can be a useful variable in analysing consumer behaviour, provided that personality types can be classified accurately and that strong correlations exist between certain personality types and product or brand choices. For instance, a computer company might discover that many prospects show high self-confidence, dominance, and autonomy.
Self-concept is related to personality the totality of person’s thoughts and feelings with reference to himself or herself as the object. Marketers try to device brand images that match the target market’s self-image. It is possible that a person’s actual self-concept (how he views himself) differs from his ideal self-concept (how he would like to view himself) and from his others-self-concept (how he thinks others see his).
Factors that Influence Consumer Behaviour – Psychological Factors: Motivation, Beliefs and Attitudes, Learning and Perception
Psychological factors that influence consumer behaviour are described below:
Psychological Factor # 1. Motivation:
An individual have a number of needs some of them are needs are biogenic as they arise from physiological states of tension such as hunger, thirst, discomfort. Other needs are psychogenic; they arise from psychological states of tension such as the need for recognition, esteem, or belonging. A need becomes a motive when it is aroused to a sufficient level of intensity. A motive is a need that is sufficiently pressing to drive the person to act.
Psychological Factor # 2. Beliefs and Attitudes:
Beliefs and attitudes are acquired by people determines their buying behaviour. A belief is a descriptive thought that a person holds about something. Beliefs maybe based on knowledge, opinion, or faith. They may or may not carry an emotional charge. Manufacturers are very interested in the beliefs people carry in their heads about their products and services.
An attitude is a person’s enduring favourable or unfavourable evaluations, emotional feelings, and action tendencies toward some object or idea. People have different attitude for religion, politics, clothes, music, and food. Attitudes put them into a frame of mind of liking or disliking an object, moving toward or away from it. Attitudes lead people to behave in a fairly consistent way toward similar objects.
Psychological Factor # 3. Learning:
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When people act, they learn. Learning includes changes in an individual’s behaviour arising from experience. Most human behaviour is learned or acquired. Learning theorists that learning is produced through the interplay of drives, stimuli, cues, responses, and reinforcement. A drive is a strong internal stimulus impelling action. Cues are minor stimuli that determine when, where, and how a person responds.
Psychological Factor # 4. Perception:
A motivated person is ready to act. How the motivated person actually acts is determined by his or her perception of the situation. Perception is the process by which an individual selects, organises, and interprets information inputs to create a meaningful picture of the world. Perception depends not only on the physical stimuli but also on the stimuli’s relation to the surrounding field and on conditions within the individual.
Factors Influencing Consumer Behaviour – Top 9 Factors with Suitable Examples
In making a final decision, and indeed throughout the whole decision-making process, consumers are influenced by a wide range of factors, not just those relating to the obvious features of the product. Some of these factors exert a direct, measurable influence on buying decisions, whereas others are less tangible and may only suggest patterns of buying behavior.
In many cases intangible factors, such as the perception of the product or the relationship between supplier and consumer, may be important. A good understanding of the different factors that influence consumer behavior is crucial to marketers and is therefore the subject of much market research. Comprehension of these factors is instrumental in segmenting and positioning products and in motivating consumers to buy.
1. Economic Factors:
To many theorists, economic factors constitute the main influence on purchasers. One primary consideration is the economic well-being of the consumers. Put simply, if consumers have more money, they are likely to spend more. One of the methods of categorizing consumers, therefore, is by income group. Income alone, however, provides insufficient information because the behavior of different income groups is modified by the overall economic climate.
If an economic boom is under way, the consumer is likely to spend more money and will sometimes borrow in order to spend even more than he or she earns. The industrialist will also spend more, investing in new capacity to take advantage of the favorable economic climate.
2. Age and Life Cycle:
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The activities of individuals and families vary over time. Age and family status are likely to influence the needs of consumers and the time and resources available to fulfill these needs. Traditionally, for example, young singles are interested mostly in entertainment, and childless professional couples demand many luxury goods. Couples with children tend to be less able to spend money on nonessentials, while older couples without children at home may again be able to afford luxuries.
Many of these traditional life cycle implications remain valid. For example, couples who marry and have children early tend to display behavioral patterns consistent with the above description. However, new groupings are emerging, based on nontraditional or delayed life cycles. For example, many couples today may postpone marriage and parenthood in order to pursue dual careers. A life cycle grouping developed by Gilly and Enis takes new societal developments into account and focuses only on current household composition.
The model explicitly incorporates such nontraditional paths as delayed marriage and parenthood, childlessness, and remarriage, and includes middle-aged or older singles, never-married or widowed single parents, cohabiting couples, and mature families. Research has shown this categorization to outperform other models in its ability to differentiate groups. Of course, because different societies have varying family patterns, the marketer is well advised to ensure that the assumptions used regarding such patterns are based on facts from the specific society that will be exposed to the marketing effort.
Much work has also been conducted on individual age subcategories. In many countries, for example, a longer life span has resulted in a larger proportion of mature consumers. The implications of age effects such as increased ear length, expanded nose breadth, and diminishing height may be profound for marketers catering to older groups, such as garment manufacturers and designers of eyeglasses and hats.
By better understanding the connection between age and life cycle and by analyzing the simultaneous occurrence of consumer needs, the marketer can improve the servicing of these needs and increase sales. For example, management at a large warehouse club noticed a correlation between the sales of disposable diapers and beer. When investigating the matter, they found that young fathers coming to the store after work to buy diapers would also pick up a six- pack of beer on the same trip. The store decided to move a beer display next to the diapers, and sales jumped by 10 percent.
3. Geography:
For some goods or services, geographical variations may be quite important. In the United States, for example, distinctly different taste preferences for food exist when comparing the North and the South or the East Coast and the West Coast, ranging from what to eat for breakfast to what to drink with dinner. These geographic differences are even greater around the world.
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For example, in the United Kingdom, northerners prefer white pickled onions, whereas southerners prefer brown ones. Few people drink orange juice for breakfast in France, but many does so during the day as refreshment. In Japan, soup is consumed mainly for breakfast.
To better understand existing consumer differences based on geography, marketers go to great lengths to research and analyze behavioral patterns. In the United States, Claritas has developed a segmentation database named PRIZM that classifies every U.S. zip code into one of 40 categories ranging from “Blue Blood Estates” to “Public Assistance.” Each of these categories is defined by detailed demographic, lifestyle, and consumption information and often includes data on specific brands.
For example, the “Shotguns and Pickups” cluster is partly defined by high usage of chain saws, snuff, canning jars, frozen potato products, and whipped toppings. Its members are very unlikely to use car rental services, belong to country clubs, read Gourmet magazine, or drink Irish whiskey.
In contrast, members of the “Furs and Station Wagons” cluster are much more likely than the average U.S. consumer to have a second mortgage, buy wine by the case, read Architectural Digest, drive BMW 5-series cars, and eat natural cold cereal and pumpernickel bread. They are unlikely to chew tobacco, hunt, drive a Chevette, use nondairy creamers, eat canned stews, or watch “Wheel of Fortune.”
The availability of such geographic information can help the marketer target mailings, advertisements, or personal sales pitches that will be most effective and efficient. Geographic clustering can also be done by region. For example, it has been suggested that Europe can be subdivided into nine super regions and a financial district that offer a better framework for analyzing and anticipating trends in the continent than the current national borders of Europe.
The regions suggested are as follows:
(i) Latin Crescent – most of Spain, southern Portugal, southern France, and most of Italy
(ii) Baltic League – Sweden, Finland, the Baltic republics, Russia down to St. Petersburg, the coastal regions of Poland and Germany, the eastern half of Denmark, and a corner of Norway
(iii) Atlantic Coast – Great Britain, Ireland, and virtually the entire western coast of Europe, running from northern Portugal through Oslo and along the Norwegian Swedish border
(iv) Mitteleuropa – Germany, most of Belgium, the Netherlands, Luxembourg, northern and central France, the northwestern corner of Switzerland, the Czech Republic, and western Poland
(v) Capital District – the triangle formed by Brussels, Paris, and Strasbourg, including Luxembourg City
(vi) Financial District – London
(vii) Alpine Arc – Alpine regions of France, most of Switzerland, western Austria, parts of Italy down to Milan, and Germany up to Munich
(viii) Danube Basin – from Bavaria east of Munich through eastern Austria, including Slovakia, all of Hungary and Romania, the former Soviet republic of Moldova, the northern half of Bulgaria, the new republics of Slovenia and Croatia, and the Adriatic coast of northern Italy as far west as Milan
(ix) Balkan Peninsula – Serbia, Bosnia, Montenegro, Macedonia, Albania, Greece, southern Bulgaria, and the European part of Turkey
(x) Slavic Federation – Ukraine, Belarus, Russia west of the Ural Mountains, and parts of Poland east of Warsaw
Not all observers agree with these groupings. For example, some claim that the city of Frankfurt, with the seat of the European Central Bank (ECB), will either join with or fiercely compete against London to form a broader financial district. Similarly, the war in Serbia has been a setback to the emergence of a Slavic Federation. Nonetheless, if, as the researcher claims, these divisions indeed reflect cohesive groupings of people and economies, the marketer can use the super regions to develop products, devise marketing campaigns, and make location decisions.
4. Social Class:
One traditional differentiation used by marketers has been that of social class. Depending on the society under consideration, the role and importance of social class may very significantly. In some countries, social class is a position inherited, assigned by birth or by tradition. In others, the level of social standing is closely linked with an individual’s occupation or the income level attained.
It used to be assumed that the upper classes were the first to try new products, which then trickled down to the lower classes. Historically, there may have been some justification for this. The refrigerator, the washing machine, the car, and the telephone were all adopted first by the higher social classes. Recently, however, as affluence has become more widespread, the process has become much less clear. It is now argued that rather than a trickle-down effect from classes above, the new opinion leadership comes from persons within the same social class.
Nevertheless, the occupation of the individual, or the head of the household, can significantly affect his or her way of life. A manager in a high-tech industry may have a different set of values from those of a worker on a production line in a declining industry or from those of a university professor. When comparing data sets on occupation across countries, the marketer is well advised to exercise caution in ensuring that the categories used are indeed comparable.
For example, a blue-collar occupation in one nation may well be a white-collar occupation in another. Even occupational titles may vary in their meaning: An “engineer” in one nation may have a different education, social position, and income than in another, because the term can either designate a degree or a supervisory role.in the production process.
5. Culture:
Culture is another important factor affecting consumer behavior, and one most noticeable in terms of nations. The culture of the United Kingdom, with its persisting class consciousness, differs in many ways from that of the United States. The way of life under the Mediterranean sun is quite different from Nordic life in the cold. Even within the overall culture of a nation there are smaller subcultural groupings with their own distinctive values. These are perhaps most obvious in ethnic or religious groupings, which attract their own specialist suppliers.
The Asian American community in the United States may serve as an example. Only recently have marketers begun to understand that a special focus on this community may be worthwhile. However, lumping everybody into one basket may be a mistake, according to one researcher. Vietnamese Americans, for example, desire a great deal of information about products to help them make a decision. They are “label readers,” expecting an advertiser to persuade them by explaining how a product will benefit them.
Korean Americans tend to be extremely brand-loyal and are interested in quality and well-established brand names. Many speak exclusively Korean at home and are best reached by Korean TV and other Korean language media. Recent Chinese American immigrants from Hong Kong and Taiwan read and watch Chinese media, even though they speak and understand English. Indian Americans, particularly recent immigrants, miss service the most. They are used to cheap labor and are drawn to products that promise to make life easier and more convenient.
The marketer must take such differences into account when targeting consumer groups. Moreover, great care must be taken when communication appeals are being adapted to a subculture.
A simple translation may not only be insufficient, it may be downright dangerous. For example, when a U.S. chicken supplier’s slogan, “It takes a tough man to make a tender chicken,” was translated to advertise to Hispanics, it was understood by the offended target group to say, “It takes a sexually excited man to make a chick sensual.” Even if the language part is working, the projected environmental setting must also be synchronized with the targeted subculture.
For example, a promotion will not be successful if it characterizes the average Hispanic in the United States as playing golf at a country club with $400 clubs or fly-fishing in the high mountain countryside of Colorado while drinking beer. One promotion fizzled when a radio station offered two tickets to Disneyland to Hispanics as a prize. Two tickets were considered far too few for the family-oriented Hispanic.
6. Peer Pressure:
Within cultures and subcultures, there is a powerful force at work requiring members to conform to the overall values of their group. There are membership groups in which the individual is formally a member (for example, of a political party or trade union). Individuals may also have reference groups (social cliques, such as yuppies) to which they would like to belong. They may also recognize groups with which they would not wish to associate.
Typical group behavior results in pressure on an individual to conform. Such peer pressure can sometimes be used to great effect by marketers. If they can sway the few opinion leaders in the reference group, they may capture a large portion of the group.
Perhaps the most influential peer group is the family. Since family structure can vary widely between countries, cultures, and subcultures, an analysis of the target consumer’s family structure can be crucial. For example, in nuclear families, the number of immediate family members and their importance to the individual is limited, whereas in extended families, there are numerous important family members available to exercise an influence on the individual’s decision making.
Consequently, the influence of peers and referents other than family members is relatively less powerful in extended families, so the use of a nonfamily peer in a promotion may not be successful.
Family relations are dynamic as the interplay between generation’s changes. For example, it has been found in the United States that members of Generation X (usually referring to people born in the 1970s) tend to continue to live at home through their late 20s. As a result, many “Xers” have become designated decision makers for their parents or other relatives, particularly in areas where young adults have expertise, such as electronic equipment, computers, or automobiles. Marketers ignore this influence at their own peril when designing communication strategies for their target groups.
7. Lifestyle and Values:
Although many firms still use class and age as the main discriminators, increasing affluence has resulted in spending patterns that now vary considerably, even within the same age and class groups; they now reflect individual lifestyles. Marketers wish to appeal to such lifestyles and therefore increasingly develop lifestyle classification methods that link different dimensions of consumers, such as activities, interests, and opinions, with their spending or product use patterns.
For example, in order to better understand the behavior of consumers who use high technology information and communication methods, the market research company Odyssey conducted 4,000 consumer interviews and 28 focus groups in 14 cities. The result was the development of six technology consumer lifestyle segments – New Enthusiasts, Hopefuls, Faithfuls, Oldtimers, Independents, and Surfers.
Perhaps best known is the Values and Lifestyles (VALS™) system developed by SRI International. Unlike many other segmentation systems, VALS divides consumers into groups based on psychological characteristics (such as status-seeking and excitement-seeking) and several key demographics found to be predictive of consumer behavior. VALS yields insights into why people act as they do and the ways enduring internal psychological traits are expressed in external buying patterns and lifestyles.
VALS classifies U.S. adults into eight consumer groups based on their answers to 35 attitudinal and four demographic questions. The VALS classification battery is integrated into several large national syndicated consumer surveys. It is also integrated into clients’ custom questionnaires so that their respondents can be VALS-typed.
The major tendencies of the four VALS groups with greater resources (for example, education, income, self-confidence, health, and eagerness to buy) are:
(i) Actualizers – successful, sophisticated, active, “take-charge” people. Purchases often reflect cultivated tastes for relatively upscale, niche-oriented products.
(ii) Fulfilleds – mature, satisfied, comfortable, and reflective. Favor durability, functionality, and value in products.
(iii) Achievers – successful, career and work-oriented. Favor established, prestige products that demonstrate success to their peers.
(iv) Experiences – young, vital, enthusiastic, impulsive, and rebellious. Spend a comparatively high proportion of their income on clothing, fast food, music, movies, and video.
The major tendencies of the four VALS groups with fewer resources are:
(i) Believers – conservative, conventional, and traditional. Favor familiar products and established brands.
(ii) Strivers – uncertain, insecure, approval-seeking, resource-constrained. Favor stylish products that emulate the purchases of those with greater material wealth.
(iii) Makers – practical, self-sufficient, traditional, family-oriented. Favor only products with a practical or functional purpose such as tools, utility vehicles, and fishing equipment.
(iv) Strugglers – elderly, resigned, passive, concerned, resource-constrained. Cautious consumers who are loyal to favorite brands.
Getting the lifestyles of consumer’s right can make a big difference to the satisfaction of consumers and the profitability of marketing undertakings. For example, Marriott Corporation has developed several time-share locations, where clients buy the right to occupy a property for one week during a specified season. To be successful, Marriott must market the same vacation place to different prospects.
A location in Vail, Colorado, can be sold to some during the winter season for skiing but also to others for a summer season of hiking, fishing, and horseback riding. By being able to match the marketing approach, the season, and the type of home to the right individual, the company can save large amounts of promotion expenditures and achieve high rates of closings.
Lifestyles can also be used by nonprofit organizations. One Wisconsin blood donation center reportedly turned a deficit of 7,000 donors into a surplus of 7,000 by concentrating its attention on people who were affluent, busy, and had close- knit families. Clearly, lifestyles depend on the environment in which the consumer lives, so socioeconomic variables can play an important role.
8. Diffusion of Innovation:
One aspect of consumer behavior that is closely related to lifestyles and has attracted considerable interest relates to the way new products or new ideas are adapted. Gatignon and Robertson suggest that the so-called diffusion process can be characterized in terms of three dimensions – the rate of diffusion, the pattern of diffusion, and the potential penetration level. The rate of diffusion reflects the speed at which sales occur over time. The pattern of diffusion refers to how a new idea or product spreads to different groups.
The potential penetration level is a separate dimension indicating the size of the potential market, that is, the maximum cumulative sales (or adoption) over time. Marketing actions are important in influencing the speed of diffusion as well as the process of diffusion by segment. Indeed, in most cases marketing actions are designed to achieve faster penetration, to block competition, and to establish a market franchise.
This is just what ambitious new product managers look for in their launches. But one complication of the consumer decision-making process is the fact that the adoption of new products is not necessarily uniform throughout the population. Everett Rogers, for example, concluded that there are five separate groups of consumers, each one of which shows a different rate of new product adoption.
Proceeding from the quickest to the slowest adopters, they are innovators (2.5 percent), early adopters (13.5 percent), early majority (34 percent), later majority (34 percent), and laggards (16 percent). A careful look at these categories will indicate that they are following a normal (or bell) distribution curve. The early and later majorities are captured by one standard deviation, the early adopters and most of the laggards by the second standard deviation, and the innovators by the third.
The innovators are adventurous and willing to take risks, whereas the early adopters are the main opinion leaders in their community. This classification suggests that the marketer should take a particular interest in these two leading groups when contemplating a product launch. But innovations may have consequences or costs for the consumption system in which they are placed.
For instance, the adoption of an innovation might require other changes in the consumption system or the adoption of ancillary services, which raise the total cost of innovating. One crucial aspect of the adoption process is the changing importance of external influence (mass media) relative to internal influence (word of mouth) over time.
It should also be observed that research finds the rates of innovation and diffusion vary not only between customers but also between countries. A comparison within the European Union determined that innovativeness tends to decrease with higher ethnocentrism. Consumers in more individualistic countries tended to be more innovative. Innovativeness was found to be lower in national cultures that emphasize uncertainty avoidance.
In an analogy to the diffusion proposition that consumers who innovate go beyond their social system boundaries, cosmopolitanism has also been shown to be positively related to the population’s propensity to innovate. Marketers with innovative products that require the enthusiasm of early adopters should therefore pay close attention to the propensity to innovate in the countries that they are considering for entry.
9. Psychological Factors:
A number of psychological factors also influence buyer behavior, ranging from the teachings of Freud to Herzberg’s discussion of dissatisfiers (characteristics that prevent a product’s purchase by a given customer) and satisfiers (characteristics that will positively persuade the customer to choose that brand). In the context of marketing, perhaps the most widely quoted psychological approach is that of Abraham Maslow.
He developed a hierarchy of needs, shaped like a pyramid, which ranges from the most essential immediate physical needs such as hunger, thirst, and shelter to the most luxurious nonessentials. It was Maslow’s contention that the individual addresses the most urgent needs first, starting with the physiological. But as each need is satisfied, and the lower-level physical needs are satiated, attention switches to the next higher level, resulting ultimately in the level of self-actualization or fulfillment.
It has been argued that marketers in industrialized nations should increasingly focus their attention on the two highest levels for the citizens of their countries. However, it appears that even in relatively rich countries, the elementary needs of many remain unfulfilled. An interesting phenomenon—the foreign concern— emerges as an additional post-Maslowian level. Many who themselves have achieved high levels of needs fulfillment begin to focus on individuals in other countries.
Seeing that they are comparatively worse off, these poorer individuals and countries are encouraged to seek and offer self-actualization, without addressing their own often unfulfilled basic needs such as nourishment and housing. Such approaches can lead to disagreement and even conflict, particularly in the international trade and policy areas, without necessarily improving the quality of life.