great marketers in 2022 – understand the factors driving consumer behaviour

When identifying the target markets for a product or brand, it is important to know what factors influence the behaviour of potential markets. It would be folly to target any market without first understanding potential influencers of people’s behaviour within that market. For example, there is little point in trying to market premium cuts of pork in the middle east.

When developing a strategy to fully leverage the potential of the primary and secondary target markets, it is essential to understand the range of influencers that impact consumer decision making. These factors include those which can and those which the brand can’t influence.

FIVE INFLUENCERS

Five types of drivers of consumer behaviour have been identified in research. They are:

  • Psychological
  • Social
  • Cultural
  • Economic
  • Personal

PSYCHOLOGICAL

A range of psychological factors significantly impacts consumer decision making.

Motivation is a critical factor. Consumers are motivated by different outcomes at different times and at different stages of their lives. Maslow talked about five levels of human needs. Herzberg talked about two categories of consumer needs.

What motivates your consumers to make a purchase?

Perception -is a second critical psychological factor driving behaviour. Consumers purchase based on perception, not reality. Perceptions are, in turn, impacted by the information available and how they interpret that information. It is essential to understand how marketing messaging is perceived.

How do your consumers perceive your brand and customer experience?

Learning is a critical outcome of the marketing process and input from a range of secondary sources, including referrals, reviews and recommendations. All that has been learned by a potential customer in their interaction with a business impacts purchase behaviour.

What has your primary target market learned from interactions with your brand?

Attitudes and beliefs are also significant determinates of consumer behaviour. These things are formed by external influences beyond the control of consumers. The curious thing about beliefs and attitudes is that no one chooses what they believe or their attitude.

What do your consumers believe about your brand, and how does this impact purchasing.

SOCIAL

Human beings are social beings. Consumer behaviour is impacted by group thinking and other social factors.

Family is an important influencer of consumer behaviour. Consumers care what family members think. Families create behaviour patterns.

Reference groups are an important influencer of consumer behaviour. Consumers are also influenced by groups they identify with, including religions, sporting, and workgroups.

Roles and status also impact consumer behaviour. All people are informed by their role and place in the community. People of higher status can impact the behaviour of others significantly.

Consider:

  • 28%of millennials say they won’t try a product if their friends don’t approve of it.
  • Word of mouth is the primary factor behind 20-50%of purchasing decisions.
  • 92%of consumers believe referrals from somebody they know.
  • Social media posts posted by friends influence the buying decisions of 83%of online shoppers.

How are social influencers impacting your consumer’s behaviour?

CULTURAL

The cultural background of consumers can have a significant impact on consumer behaviour.

Culture determines many basic requirements, values, needs, wants and preferences. Further, the cultural drivers of behaviour are perhaps the hardest to change. They are what they are.

Sub-cultural factors also influence consumer behaviour. Each cultural group has within it sub-cultures that also influence behaviour. These include nationality, religion, caste and geography.

While less talked about in Australia, social class also impacts significantly on consumer behaviour. An individual’s perception of their social class impacts purchase behaviour every day.

How are cultural factors determining the purchase behaviour of your target market?

PERSONAL 

There are, of course, a range of personal factors that impact consumer behaviour, especially consumer purchase behaviour. The relevant personal factors include:

  • Age – some products and brands are attractive to specific age groups.
  • Occupation – what a person does with their time can impact behaviour.
  • Lifestyle – tree changers often have very different needs than city dwellers.

Increasingly, brands focus on lifestyle – drawing a link between the brand and a particular lifestyle. There can be significant merit in linking a brand with a lifestyle. 

How would you define your target market in terms of personal factors?

ECONOMIC

The economic factors impacting consumer behaviour include:

  • Personal income.
  • Family income.
  • Credit availability.
  • Asset liquidity.
  • Savings

All five of these factors relate to the capacity to pay.

Have you established the capacity of your target market to pay?

MARKET SEGMENTATION

Traditionally market segmentation has focused on demographic factors, including the following:

  • Personal
  • Economic

Both of these influencer categories are important – especially in terms of the capacity to pay. In many cases, the capacity to pay must be the first influencer considered in determining the primary and secondary target markets. There is no point in targeting a market segment that is in a position to pay the price.

If you survey 100 white-collar workers about the brand of mobile phone they own – about 60% will say an Apple I-phone. However, if you survey 100 blue-collar workers, only 30 – 40% will report owning an Apple iPhone. The high price i=of the I-phone is a critical factor here.

That said, smart marketers (and there are few smarter) like Apple, while paying attention to the capacity to pay, are increasingly segmenting the market based on factors:

  • Psychological
  • Social
  • Cultural

One study defined the I-phone market as – a ‘high-end, tech-savvy consumer, who is often a business user’ There is, here, no mention of demographic factors like the personal and economic influencers listed above. Indeed, in 2022, most branding by highly successful brands, like Apple, focuses on psychographic characteristics – including psychological, social, and cultural.

Increasingly, brands identify markets psycho-graphically, intending to shape the brand to address psychological, social, and cultural influencers. Focusing on such factors is much more effective in identifying the primary and secondary target markets – and in developing strategies that can ensure the brand is consistent with parameters determined attractive by consumers.

GREAT MARKETERS

  • Great marketers in 2022 understand the factors influencing purchase behaviour.
  • Great marketers in 2022 identify their target markets based on psychographic characteristics.
  • Great marketers in 2022 will develop brands that address psychographic influencers.

ANOTHER INSIGHT

RECOMMENDED READING

ACTION

  • To maximise sales – they must understand the psychological influencers of buying.
  • To maximise margins – they must understand the impact of social factors on buying.
  • To maximise sales and margins – they must target culturally appropriate markets.
  • To maximise the lifetime value of a customer – they must understand the personal drivers.
  • To maximise profitability – they must understand the economic influences on behaviour. 

QUESTIONS

  • Research highlights the impact is psychological influencers on purchase behaviour. How are psychological influencers impacting the behaviour of your target consumer?
  • Research highlights the importance of social influencers on purchase behaviour. What social factors influence your consumer – and what are the implications?
  • Research highlights the importance of culture on purchase behaviour. What are the cultural considerations in your market, and how are you addressing them?
  • Research highlights the impact on purchase behaviour of a range of personal factors. What are the personal factors impacting the purchase behaviour of your target market?
  • Research highlights the impact on purchase behaviour of key economic factors. How well do you understand the range of economic factors impacting your market’s purchase behaviour?
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