What Is Consumer Behavior in Marketing?: Psychological Factors

The lesson addresses consumer behavior in marketing.
Consumer behavior is explained and the

way companies learn about consumer behavior is discussed. The way that marketing benefits from
understanding consumer behavior is examined.
What is Consumer Behavior in Marketing?

Marketing is so much more than creating a catchy phrase or a jingle people will sing for days.
Understanding consumer behavior is a vital aspect of marketing. Consumer behavior is the study
of how people make decisions about what they buy, want, need, or act in regards to a product,
service, or company. It is critical to understand consumer behavior to know how potential customers
will respond to a new product or service. It also helps companies identify opportunities that are not
currently met.
A recent example of a change in consumer behavior is the eating habits of consumers that
dramatically increased the demand for gluten-free (GF) products. The companies that monitored the
change in eating patterns of consumers created GF products to fill a void in the marketplace.
However, many companies did not monitor consumer behavior and were left behind in releasing GF
products. Understanding consumer behavior allowed the pro-active companies to increase their
market share by anticipating the shift in consumer wants.
The Three Factors

To fully understand how consumer behavior affects marketing, it's vital to understand the three
factors that affect consumer behavior: psychological, personal, and social.
Psychological Factors
In daily life, consumers are being affected by many issues that are unique to their thought process.
Psychological factors can include perception of a need or situation, the person's ability to learn or
understand information, and an individual's attitude. Each person will respond to a marketing
message based on their perceptions and attitudes. Therefore, marketers must take these
psychological factors into account when creating campaigns, ensuring that their campaign will
appeal to their target audience.
Personal Factors
Personal factors are characteristics that are specific to a person and may not relate to other people
within the same group. These characteristics may include how a person makes decisions, their
unique habits and interests, and opinions. When considering personal factors, decisions are also
influenced by age, gender, background, culture, and other personal issues.
For example, an older person will likely exhibit different consumer behaviors than a younger person,
meaning they will choose products differently and spend their money on items that may not interest
a younger generation.
Social Factors
The third factor that has a significant impact on consumer behavior is social characteristics. Social
influencers are quite diverse and can include a person's family, social interaction, work or school
communities, or any group of people a person affiliates with. It can also include a person's social
class, which involves income, living conditions, and education level. The social factors are very
diverse and can be difficult to analyze when developing marketing plans.
However, it is critical to consider the social factors in consumer behavior, as they greatly influence
how people respond to marketing messages and make purchasing decisions. For example, how
using a famous spokesperson can influence buyers.
In this lesson, we will learn the meaning of customer value and discover how consumers use
customer value to make buying decisions. We'll also learn why companies must establish and
maintain a high customer value for their products and services.
Customer Value Defined

You make buying decisions every day. Should you buy the Skinny Caramel Macchiato at Starbucks
or the house blend coffee at the fast food drive through? Is the new iPhone game app worth 99
cents, or can you find a free game app that is basically the same thing?
In every buying decision, a consumer asks the same question: 'is what I am going to receive worth
what I have to give up in order to get it?' The gain the consumer receives for the benefit is weighed
against the cost the consumer must pay to acquire the benefit. The value the individual consumer
places on a product or service becomes the customer value for that offering.
This customer value is weighed against the customer values assigned for similar products and
services that would provide a similar benefit. Consumers will typically purchase the item with the
highest customer value among all offerings in the marketplace. When you are deciding where to go
for lunch, for example, do you consider Subway to have a higher customer value than Burger King?
Every consumer has a unique set of needs and resources, so no two consumers will place the same
customer value on the same product or service. The highest-quality product or service does not
always provide the highest customer value, since the benefit of each item is measured against the
cost. Some consumers are willing to pay a high price for a quality product or a high level of service,
but others will make the decision that the same benefits are not worth the price.
On your next vacation, would you rather stay at the Marriott or the Quality Inn? The Marriott will
provide you with a nicer room, a fancier lobby, and room service, but you might rather spend the
money you save by staying at the Quality Inn on souvenirs.
How Is Customer Value Delivered to the Customer?

There are three ways a company can establish customer value to its customer base:
1. Provide the consumer with the best cost.
Companies can choose to focus their efforts on providing a reliable product at a reasonable price.
The low price helps to increase the value of their offering to the consumers even if it is weighted
against a low benefit. For example, you might place a high customer value in a meal at McDonald's
restaurant because you know you will receive a consistent, satisfactory meal at a low price.
2. Provide the consumer with the best produc

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The lesson addresses consumer behavior in marketing.

Consumer behavior is explained and the

What is Consumer Behavior in Marketing?

The Three Factors

Customer Value Defined

How Is Customer Value Delivered to the Customer?

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