Wednesday, April 05, 2017

Personal and Psychological Factors of Consumer Behaviour

Unit-IV: Personal and Psychological Factors of Consumer Behaviour

Psychological Factors affecting consumer behaviour
An individual’s buying decisions are further influenced by psychological factors: perception, motivation, learning and attitudes. These factors are what consumers use to interact with their world. They are the tools consumers use to recognize their feelings, gather and analyze information, formulate thoughts and opinions and take action.

A. Perception: The term “perception” can be defined as the ability to derive meaning. Derived from the word “perceive”, it refers to the ability of giving meaning to whatever is sensed by our sense organs. It is the process through which an individual interprets ones’ sensory impressions to give meaning to them. Schiffman defines it as “the process by which an individual selects, organizes, and interprets stimuli into a meaningful and coherent picture of the world.”
Perception is the process of selecting, organizing and interpreting information inputs to produce meaning. A person receives information through the senses: sight, taste, hearing, smell and touch. How and what consumers perceive strongly affect their behaviour toward products, prices, package designs, salespeople, stores, advertisements and manufacturers.

B. Motivation: Motivation involves the positive or negative needs, goals and desires that impel a person to or away from certain actions, objects or situations. By identifying and appealing to people’s motives – the reasons for behaviour – a firm can produce positive motivation. Each person has distinct motives for purchases, and these change by situation and over time. Consumers often combine economic and emotional motives when making purchases.

There can be of types of needs:

1. Biogenic needs: They arise from physiological states of tension such as thirst, hunger
2. Psychogenic needs: They arise from psychological states of tension such as needs for recognition, esteem
In the words of William J Stanton, “A motive can be defined as a drive or an urge for which an individual seeks satisfaction. It becomes a buying motive when the individual seeks satisfaction through the purchase of something”. A motive is an inner urge (or need) that moves a person to take purchase action to satisfy two kinds of wants viz.

C. Learning: Learning consists of changes in a person’s behaviour that is caused by information and experience. Variations in behaviour that result from psychological conditions such as hunger, fatigue, physical growth, or deterioration are not considered learning. Learning refers to the effects of direct and indirect experiences on future behaviour. Consumers learn about products directly by experiencing them.

D. Beliefs and Attitudes: The process of learning results in beliefs and attitudes and they influence buying behaviour. A belief is a descriptive thought that a person holds about something. Advertising seeks to increase people’s beliefs in the product knowing fully well that it is beliefs that constitute product and brand images. For instance, the beliefs in imported goods have given them competitive edge over their made- in-Nigeria counterparts. The ongoing efforts by the Federal Government towards changing these beliefs are designed to encourage local manufacturing.

Government needs to provide the infrastructure- electric power roads, water and transportation- that will enable rapid industrialization. On the other hand, an attitude is a learned predisposition to respond in a consistently favourable or unfavourable manner with respect to a given object.
The attitude people have towards such things as religion, politics, goods and services put them into a frame of mind of liking or disliking these things. Attitude tends to be enduring because once an attitude is formed it is consistent and difficult to change.
Attitude has three components namely cognitive, affective and conative. Cognitive is concerned with the person’s knowledge of a situation; an affective deal with the overall feelings about an object; while conative has to do with the resultant behaviour or actions.

Personal Factors affecting consumer behaviour
A person’s buying decisions are also influenced by personal characteristics that are unique to each individual, such as age, gender, education, economic condition, life-cycle stage, personality, self concept, and life-style. Individual characteristics are generally stable over the course of one’s life. The personal factors include:
1)      Age and Family cycle stage: The age and family life cycle stage of a consumer can have a significant impact on consumer behaviour. How old a consumer is generally indicates what products he or she may be interested in purchasing. Consumer tastes in food, clothing, cars, furniture and recreation are often age related. Judith Waldrop found marketers are interested in understanding what products will sell well in the youth market. Moreover, it is important to appreciate the influence may be more significant to most marketers than is youth’s role as primary purchaser of certain items.

2)      Gender: Physiological differences between men and women result in different needs, such as health and beauty products. Just as important are the distinct cultural, social and economic roles played by men and women and the effects that these have on their decision-making processes.

3)      Education: Education has been associated with the purchase of books, healthier foods, and entertainment. Education also influences how decisions are made. Educated consumers seek more information and demand better quality products. Those with a limited education are generally at a disadvantage not only in earning money but also in spending it wisely.

4)      Economic Condition: The buying tendency of an individual is directly proportional to his income/earnings per month. How much an individual brings home decides how much he spends and on which products? Individuals with high income would buy expensive and premium products as compared to individuals from middle and lower income group who would spend mostly on necessary items. You would hardly find an individual from a low income group spending money on designer clothes and watches. He would be more interested in buying grocery items or products necessary for his survival.

5)      Occupation: The occupation of an individual plays a significant role in influencing his/her buying decision. An individual’s nature of job has a direct influence on the products and brands he picks for himself/herself. An individual’s designation and his nature of work influence his buying decisions. You would never find a low level worker purchasing business suits, ties for himself. An individual working on the shop floor can’t afford to wear premium brands everyday to work. College goers and students would prefer casuals as compared to professionals who would be more interested in buying formal shirts and trousers.

6)      Personality and Self concept: Personality of an individual also influences his / her buying behaviour. Personality refers to the unique psychological characteristics of an individual. It is usually described in terms of distinguishing character traits, attitudes and habits - dominance, sociability, autonomy, authoritative, aggressiveness, adaptability and the like. Marketers must have in-depth knowledge of different human personalities.

7)      Life Style: Lifestyle involves classifying people according to their values, beliefs, opinions, and interests. There is no one standardized lifestyle segmentation model, instead market research firms, and advertising agencies are constantly devising new categories, which will best help target possible consumers of their clients products.

8)      Status’ in the Society: Persons enjoying higher status in the society do spend a good amount of money on luxury items such as luxury cars, luxury watches, premium brands of clothing, jewellery, perfumes, etc.

Meaning of Perception
The term “perception” can be defined as the ability to derive meaning. Derived from the word “perceive”, it refers to the ability of giving meaning to whatever is sensed by our sense organs. It is the process through which an individual interprets ones’ sensory impressions to give meaning to them. Schiffman defines it as “the process by which an individual selects, organizes, and interprets stimuli into a meaningful and coherent picture of the world.”
Perception is the process of selecting, organizing and interpreting information inputs to produce meaning. A person receives information through the senses: sight, taste, hearing, smell and touch. How and what consumers perceive strongly affect their behaviour toward products, prices, package designs, salespeople, stores, advertisements and manufacturers.

Nature of perception:
1. Perception is a complex process. After a stimulus is detected by the sense organs, the perception process comes into play and involves the interplay of three processes, viz., selection, organization and interpretation. It is a dynamic process.
2. It is also an intellectual process; it involves a lot of cognitive effort. Once sensation takes place, the perception process involves the selection, organization and interpretation of data.
3. Perception is broad in nature; it includes a physiological component (through sensation), as well as sociological and psychological components.
4. Perception is a subjective process as two people may perceive the same stimuli differently. While two persons may be exposed to the same stimuli, the manner in which they select them, organize and interpret them is different. This is because the two are impacted by their background, learning and experiences, motivation, personality, cultures, values and lifestyles, social class effects etc which may be different from each other.

Factors affecting the perception of consumers
Perception of a consumer is affected by the following factors
1.       Motives and needs: Our motives and needs will definitely influence our perception. For example, a hungry person is motivated to recognise only the food items among other articles. His attention cannot be directed towards other things until his motive is satisfied.
2.       Cognitive styles: People are said to differ in the ways they characteristically process the information. Every individual will have his or her own way of understanding the situation. It is said that the people who are flexible will have good attention and they are less affected by interfering influences and to be less dominated by internal needs and motives than or people at the constricted end.
3.       Mental set: Set refers to preparedness or readiness to receive some sensory input. Such expectancy keeps the individual prepared with good attention and concentration. For example, when we are expecting the arrival of a train, we listen to its horn or sound even if there is a lot of noise disturbance.
4.       Selectivity: This is the degree to which the brain is selecting from the environment. It is a function of how much is going on around the individual, and also of how selective (concentrated) the individual is on the current task. Selectivity is also subjective. Some people are a great deal more selective than others.
5.       Expectation: Expectations affect the perception of a person. Expectations are related with the state of anticipation of particular behaviour from a person. For example, a technical manager will expect that the non- technical people will be ignorant about the technical features of the product.
6.       Situation: Elements in the environment surrounding an individual like time, location, light, heat etc., influence his perception. The context in which a person sees the objects or events is very important.
7.       Cultural Upbringing: A person’s ethics, values and his cultural upbringing also play an important role in his perception about others. It is difficult to perceive the personality of a person raised in another culture because our judgement is based upon our own values.
8.       Past experience: This leads us to interpret later experience in the light of what we already know. Psychologists call this the law of primacy, Sometimes sights, smells or sounds from our past will trigger off inappropriate responses: the smell of bread baking may recall a village bakery from twenty years ago, but in fact the smell could have been artificially generated by an aerosol spray near the supermarket bread counter.

Perceptual process/ mechanisms
The perceptual process starts when a person is exposed to a stimulus and the sensory receptors report the same to the human body. While the senses may be exposed to various stimuli, the human senses select only some of these at a point of time. This is because the sense organs have a limited capacity at a particular point of time. After the sense organs, report a few stimuli, the perceptual process takes over. Of the stimuli that have been detected, few are selected, organized and interpreted for meaning. This is known as perception.
Although we may differ in perceptual processes, universally speaking, the perceptual process comprises four components, viz., input, perceptual mechanism, output and behaviour. Let us have a discussion on these.
i. Input: The input to the perceptual process refers to the various stimuli that surround an individual and exist in his environment. It could assume various forms, for example, it could be another person, object, thing, or situation. The perceptual process begins when the sensory receptors detect a stimulus in the environment, which acts as an input to the perceptual mechanism.
ii. Perceptual mechanism: The perceptual mechanism consists of three sub-processes, viz., selection, organization and interpretation. Once the sense organs detect a stimulus in the environment, a person selects, organizes and interprets it through perceptual selectivity, perceptual organization and perceptual interpretation. Put together, these are known as perceptual mechanisms.

1. Perceptual selection or perceptual selectivity refers to a tendency within a person to select one or a few out of the many stimuli present in the environment; this selectivity is based on one’s demographic, socio-cultural and psychographic factors. A person would tend to select those stimuli that appear relevant and attractive to him.
2. Perceptual organization refers to the process of organizing the various stimuli with other cues around so that a whole picture can be created. In other words, the various stimuli are organized and given a form. It is the process of organizing inputs into a definite and interpretable structure.
3. Perceptual interpretation refers to the process of drawing in inferences out of the organized whole (of stimuli), and giving meaning to it.

iii. Output: Once the input has been interpreted, it results in an output. This output towards the stimuli assumes various forms, for example, in the formation of emotions and moods, feelings and opinions, as well as attitudes and beliefs.
iv. Behaviour: The resultant behaviour is an outcome of the output. Based on his emotions and moods, feelings and opinions, as well as attitudes and beliefs, a person would enact out behaviour. This behaviour is a function of and will be reflective of such emotions and moods, feelings and opinions, as well as attitudes and belief.

Elements of Perception
Elements of Perception are given below
1)      Sensation: Sensation is the immediate and direct response of the sensory organs to stimuli. A stimulus may be any unit of input to any of these senses. Examples of stimuli include products, packages, brand names, advertisements and commercials. Sensory receptors are the human organs that receive sensory inputs. Their sensory functions are to see, hear, smell, taste and feel. All of these functions are called into play, either singly or in combinations, in the evaluation and use of most consumer products.
2)      The Absolute Threshold - The lowest level at which an individual can experience a sensation is called the absolute threshold. The point at which a person can detect the difference between “something” and “nothing” is that person’s absolute threshold for the stimulus. Sensory adaptation is a problem that causes many advertisers to change their advertising campaigns regularly. Marketers try to increase sensory input in order to cut through the daily clutter consumers experience in the consumption of advertising. Some increase sensory input in an effort to cut through the advertising “clutter.” Other advertisers try to attract attention by decreasing sensory input.
3)      The Differential Threshold The minimal difference that can be detected between two stimuli is called the difference threshold or the JND (just noticeable difference). A 19th century German scientist named Ernst Weber discovered that the JND between two stimuli was not an absolute amount, but an amount relative to the intensity of the first stimulus. Weber’s law states that the stronger the initial stimulus, the greater the additional intensity needed for the second stimulus to be perceived as different.

Lifestyle affecting Consumer Behaviour
Lifestyle involves classifying people according to their values, beliefs, opinions, and interests. There is no one standardized lifestyle segmentation model, instead market research firms, and advertising agencies are constantly devising new categories, which will best help target possible consumers of their clients products. Lifestyle is an important aspect when looking at consumer choices. Just because there may be two women with similar age and income, does not mean they’re likely to purchase the same products. Below will be some examples of why lifestyle is an important aspect to consider:
1)      Status in the Society: Social status is one of the key elements to how and why people buy certain products and services. It affects the quality and quantity of what people buy. Persons enjoying higher status in the society do spend a good amount of money on luxury items such as luxury cars, luxury watches, premium brands of clothing, jewellery, perfumes, etc.
2)      Product involvement: People’s lifestyle comes into play especially when they come to high involvement products. These products carry high risk, are complex or have high price tags. They may be a car, home or insurance policy lifestyle comes into play here. Take for example buying a home. Some people might be outdoorsy, love gardening and want quiet. Whereas another couple may love fresh air, need a medium sized home and love the beach.
3)      Activities: The activities people undertake vitally determine how their money will be spent. For example: if a person is dedicated to the gym and works in a gym, then they’re likely to spend most of their money on gym clothes, weights, exercise machines and healthy food.
4)      Self-image: Self-image is a strong aspect when thinking about how lifestyle affects purchases. The way someone feels they should look will strongly affect what they buy.

Impact of Personality and Self concept on Consumer Behaviour
Meaning: The term ‘personality’ is derived from the Latin word ‘persona’ which means a mask. According to K. Young, “Personality is a patterned body of habits, traits, attitudes and ideas of an individual, as these are organised externally into roles and statuses, and as they relate internally to motivation, goals, and various aspects of selfhood.” G. W. Allport defined it as “a person’s pattern of habits, attitudes, and traits which determine his adjustment to his environment.”
Personality of an individual also influences his / her buying behaviour. Personality refers to the unique psychological characteristics of an individual. It is usually described in terms of distinguishing character traits, attitudes and habits - dominance, sociability, autonomy, authoritative, aggressiveness, adaptability and the like. Marketers must have in-depth knowledge of different human personalities.

Theories on Personality
1)      Psychoanalytic Theory
2)      Neo-Freudian Theory and 
3)      Trait Theory

1)      Freud’s psychoanalytic theory provides the foundation for the study of motivational research, which operates on the premise that human drives are largely unconscious in nature and serve to motivate many consumer actions.

2)      Non- Freudian theory tends to emphasize the fundamental role of social relationships in the formation and development of the personality.
Ø  Alfred Adler viewed human beings as seeking to overcome feelings of inferiority.
Ø  Harry Stack Sullivan believed  that people attempt to establish significant and rewarding relationships with others.
Ø  Karen Horney saw individuals as trying to overcome feelings of anxiety and categorized them as compliant, aggressive or detached.

3)      Trait Theory is a major departure from the qualitative or subjective approach to personality measurement. It postulates that individuals possess innate psychological traits to a greater or lesser degree, and that traits can be measured by specifically designed scales or inventories. Because they are simple to use and to score and  can be self-administered, personality inventories are the preferred method for many researchers in the assessment of consumer personality.

"The 5 Personality Traits”
These traits are extroversion, conscientiousness, agreeableness, openness, and neuroticism or sometimes referred to as emotional intelligence.
1)      Extraversion is characterized by outgoing, talkative, sociable and assertive behavior. Extraverts often engage in "actions [that are] directed toward obtaining power and dominance" 
2)      Conscientiousness: The personality trait of conscientiousness is characterized by diligence and organization. Conscientiousness is described by words like "precise," "efficient," "orderly," and "persistent." Conscientious individuals generally do not like the idea of spending a lot of time in waiting lines, since it is perceived to be inefficient. 
3)      Agreeableness: The personality trait of agreeableness is related to the need for pleasant, cooperative and harmonious relations. Agreeable people are courteous, flexible, tolerant and forgiving. By contrast, people who display low levels of agreeableness tend to be more competitive in their day-to-day activities.
4)      Openness: Openness of a consumer is also key for marketers to take into consideration. If someone is open to things that means they are willing and able to try new ideas and products. This is important when introducing a new product because there are going to be those consumers who are afraid to venture off from the product they are used to, but marketers can use research and find what it takes to get to the closed off consumers and make them willing to try new things and be a bit more open. Consumers who are open-minded on the other hand, don't necessarily have to stay with the clear cut product, but they are willing to try new things and be adventurous.
5)      Neuroticism: Neuroticism is a trait where individuals are prone to negative thoughts such as anxiety, anger, envy, guilt and so on. Such individuals are often in a state of depression and do not how to enjoy life. They always look at the negative sides of life and find extremely difficult to cope up with stress.
All "The 5 Personality Traits" are very important to take into consideration when developing new products or even just trying to recreate an already existing product. 

Determinants of Personality
Personality does not evolved by a single factor. It is a mixture of a lot of things. Some of those factors are psychological, some are physical, some are biological and some are even hereditary. Some of the basic factors that affects personality are:
1. Brain: Brain is one of the most important factors of personality determinant. It is generally believed that the father and the child adopt almost the same type of brain stimulation and the later differences are the result of the environment in which the child has been grown up. Electrical Stimulation of the Brain (ESB) and Split Brain Psychology (SBP) and the outcomes of genetic transmissions and are the tools that are used by the management of any organization to mould and amend the employee’s behavior to a more positive and proper one.

2. Physical Factors: One of the most important factors in determining personality is the ‘Physical Characteristics’ of an individual. It is believed that this factor plays a vital role in determining one’s behavior in any organization. Physical features may involve the height of a person (short or tall), his color (white or black), his health status (fat or skinny) and his beauty (handsome or ugly). These factors are involved when interacting with any other person and thus contribute in the personality development in many ways.

3. Social Factors: Social factors also play a vital role in determining one’s personality. The things that revolve and evolve around us on a regular basis determine our personality. The society that we live in, the cultural environment that we face daily, the community we get interacted to, all are included in this factor. Relationships, co-ordination, co-operation, interaction, environment in the family, organizations, workplaces, communities, societies all contribute in way or another as personality determinants.

4. Cultural and Religious Factors: The culture in which one lives in, that may involve traditional practices, norms, customs, procedures, rules and regulations, precedents and values, all are important determinants of personality. Moreover, the creed, religion and believes are also very important factors of personality determinants.

5. Heredity: Heredity is another factor determining human personality. Some of the similarities in man’s personality are said to be due to his common heredity. Every human group inherits the same general set of biological needs and capacities. These common needs and capacities explain some of our similarities in personality. Man originates from the union of male and female germ cells into a single cell which is formed at the moment of conception.

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