Consumer Choice Factors

Introduction

Understanding the factors that influence customer choices is essential for businesses aiming to effectively target their markets. These factors include psychological, sociocultural, economic, and governmental influences, each significantly shaping consumer behaviour and decisions.

Psychological Influences

These factors explore how consumers rationalise their choices based on perceptions, motives, attitudes, personality traits, and learning from past experiences.

Perception

• Perception: Refers to how consumers interpret brand signals, influencing their decisions.
  • Significance: It plays a vital role in swaying consumer decisions.

• Historical Contexts:
  • Marketing strategies have evolved to harness consumer perception through visual elements and endorsements.

Motives

• Maslow's Hierarchy of Needs:
  • Basic needs focus on essentials.
  • Safety needs relate to products providing security.
  • Social connection advertisements promote belonging.
  • Luxury brands appeal to esteem needs.
  • Development products support self-actualisation.
• Example: Luxury cars signify status and achievement.
• Emotional Appeal:
  • Emotional drivers are crucial for marketing strategies.
  • Example: Coca-Cola's personalised campaigns foster connections.

Attitudes

• Formation & Transformation:
  • Arise from personal experiences and social influences.

Strategy	Description	Effectiveness
Reinforcement	Positive messaging	Enhances existing associations
Contradiction	New campaigns	Alters previous perceptions
Conformance	Aligning with prevailing trends	Boosts relatability

Personality and Self-image

• Traits & Choices:
  • Traits such as extraversion and openness impact preferences.
  • Case Study: Nike appeals to achievers and athletes.

Learning

• Impact of Past Experiences:
  • Previous interactions influence current decisions.
  • Advertisements are vital in consumer learning for brand recall.

Sociocultural Influences

These factors emphasise the influence of collective societal elements on individual behaviours, including cultural norms, social classes, and family roles.

Culture and Subculture

• Influence:
  • Shapes consumer preferences with examples such as shopping patterns driven by cultural events.

Social Class

• Understanding:
  • Impacts consumer spending priorities.
• Strategy:
  • Tailor products and services to different social classes.

Family and Roles

• Family Cycle:
  • Influences purchasing decisions based on life stages, like singlehood versus family dynamics.
• Roles:
  • Decision-makers and influencers within the purchasing process.

Reference Groups

• Influence:
  • Groups, such as peers, significantly affect opinions and purchasing decisions.

Economic Influences

These factors are linked to financial elements that affect consumer spending and saving patterns.

Consumer Income

• Types:
  • Disposable and Discretionary Income determine consumer purchasing power.

Economic Cycles

• Stages:
  • Vary from prosperity to depression, affecting spending habits.

Price Elasticity

• Elasticity: Evaluates how price fluctuations influence purchasing behaviour.

• Examples:

  Worked Example: Calculating Price Elasticity

  If the price of a luxury handbag increases from £1000 to £1200 (20% increase) and sales decrease from 100 to 70 units (30% decrease), the price elasticity is:

  $\text{Price Elasticity} = \frac{\text{Percentage change in quantity}}{\text{Percentage change in price}} = \frac{-30\%}{20\%} = -1.5$

  Since the absolute value is greater than 1, this product is price elastic, meaning consumers are sensitive to price changes.

Employment Levels

• Influence:
  • A relationship exists between job security and consumer confidence.

Economic Stability

Governmental Influences

Governments affect markets through regulations, taxation, and policies that mould customer choices.

Regulation and Legislation

• Regulation:
  • Ensures fair practices, such as consumer protection laws.

Taxation and Subsidies

• Impact on Pricing:
  • Taxes and subsidies adjust consumer cost perceptions.

Economic Policies

Promotional Strategies

• Campaigns:
  • Government initiatives promote ethical consumption.

Government Role

• Crisis Interventions:
  • Demonstrate market influence, such as the UK's furlough scheme during COVID-19.

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Understanding these factors enables the development of marketing strategies that are well-aligned with consumer needs, enhancing competitive positioning in the market.