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Understanding Consumer Behavior

22 Feb
Close up man hand hold mobile cell phone device while shopping online.

Consumer behavior involves the why, what, and how of consumer purchasing decisions. In 2023, Apple’s iPhone 14 Max Pro boasted 26.5 million units sold and landed at the top of Forbes’ list of Top 10 Selling Smartphones for the year. Why do people continue to choose Apple over other brands?1 Ever since Apple’s “Think Different” campaign, the iPhone’s appeal has been the ‘cool’ factor—innovation, status, and a sleek design.2 In the meantime, Apple’s competitor, Samsung, has become the most trusted brand among Millennials because it focuses on affordability and sustainability.2

Top-selling brands, large and small, strive to understand why people choose their products and services over their competitors’. You can do the same by leveraging the right e-commerce platforms and analytics tools to learn about your customers’ buying behavior throughout your product lifecycle—from discovery to purchase to use. Whether you’re a local coffee shop or a global clothing brand, these valuable insights can help your marketing team craft winning strategies and marketing campaigns to increase sales and build customer loyalty.3

This post explores consumer buying behavior, including the decision-making journey, cultural and social influences on consumer choices, and the role of ethics in today’s digital landscape.

The Consumer Decision-Making Process

As a marketer, the more you understand about consumer choices, the better you’re able to tailor marketing messages and tactics to match needs and preferences. Studies show that multiple factors play a role in the decision journey, including the customer’s lifestyle, social and cultural influences, and psychological factors as well as brand perception. 3,4

You might not be able to get into the minds of consumers during their purchasing journey, but a decision-making model, such as Engel-Kollat-Blackwell (EKB), give you the next best thing.3 It offers a framework for understanding consumer needs and the factors influencing their decisions at key touch-points. As one example, access to an online review or a free gift promotion at the right time can convince those on the fence to go ahead and make a purchase.

To get a better return on your marketing efforts, identify ways to engage existing and potential customers at each of these five stages of the EKB model:3

  • Problem recognition: A potential customer identifies a need or problem, often triggered by internal or external factors
  • Information search: The potential customer conducts online research, browsing websites, reading reviews, and seeking information from various digital sources
  • Evaluation of alternatives: The potential customer compares products or services based on digital content, reviews, and online feedback
  • Purchase decision: The customer completes the transaction, which is influenced by the information gathered during the previous stages
  • Post-purchase evaluation: Do customers love or hate the product? Customers can share product opinions through reviews, ratings, and social media

Cultural and Social Influences

Cultural elements include language, religion, beliefs, and values, while social factors include family and reference groups. Family, friends, and even strangers’ recommendations on social media can influence how individuals make buying decisions.

A marketing campaign that works for McDonald’s in the U.S. may not work so well in India and vice versa. If your company plans to open sites in Asia or Latin America, identify cultural and social factors and potential conflicts with your current marketing strategies. Then, find innovative ways to make your product relevant to local consumers.

When these brands expanded into new markets, they didn’t achieve global success overnight but learned from their missteps and successes.

McDonald’s in India

The company created menu options to appeal to the country’s vegetarian population. 4 The positive response to items like the McAloo Tikki burger, which is made with potatoes, peas, and Indian spices, shows the marketing strategy paid off.5 The fast-food giant now boasts 300 restaurants in 52 cities across India.5

Coca-Cola in China

The company’s efforts to name the soft drink with a Chinese phrase that phonetically sounded like “Coca-Cola” bombed because the phrase they used translated to “Bite the wax tadpole.” 6 Their “Share a Coke” campaign landed much better with the target market, as it evoked strong cultural associations with Chinese values of happiness, luck, and prosperity. 4

Nike in Brazil

The brand’s 2023 FIFA Women’s World Cup campaign aligned with the country’s passion for soccer. 6 One ad featured player Ary Borges soaring over a conference table that’s surrounded by bewildered men in suits.7 By playfully celebrating breaking barriers, a diverse sports culture, and the sheer joy of the game, Nike’s approach resonated strongly with Brazilian values.7

Psychological Factors in Consumer Behavior

The psychological aspects of consumer behavior include attitudes, perception, motivations, and learning and can be powerful drivers of purchasing decisions. Psychologist Abraham Maslow’s hierarchy of needs sheds light on how some of these factors influence our decisions. At the top of this hierarchy are basic needs, such as food, shelter, and rest.3 But we also have psychological needs, such as belonging and love, that we seek to fulfill through friendships, romantic relationships, and even community connections.3

For hungry and busy potential buyers, the immediate need might be food, so their buying decision may be heavily influenced by proximity or fast delivery. For others, it could be replacing worn-out athletic shoes to train for a marathon; these customers are more concerned with brand quality.

As a marketer, it’s important to keep these factors in mind when designing campaigns:8

  • Motivation: Align marketing with Maslow’s hierarchy for targeted campaigns catering to specific consumer needs
  • Learning: Offer learning opportunities through campaigns for informed consumer choices; make case studies and reviews from other customers accessible on your product pages
  • Reinforcement: Ensure that customer experiences align with expectations to foster brand loyalty
  • Socialization: Understand socialization patterns to connect with consumers organically and design campaigns to create a sense of belonging

Personal Factors and Consumer Behavior

Personal demographic factors—such as age, lifestyle, education, and income—affect purchasing decisions and preferences. 9 Individuals with purchasing power might favor luxury brands, ranging from fine wines to watches, while a college student will be more likely to prioritize budget-friendly brands. In addition, consumers with an active lifestyle may gravitate toward fitness and adventure brands, while those focused on sustainability may opt for eco-friendly products and services. Know your audience, then create targeted campaigns based on their personal preferences; these efforts can draw in new customers and build brand loyalty.9

Application of Consumer Behavior Insights

Once consumers have purchased your products, it’s time to learn more about their interaction with the brand. Use surveys, social listening, market research, and analytics to collect data about your customers' needs and wants. Apply these insights to align your marketing strategies with customer expectations for better results.10 This data could also lead your company to launch innovative products or new features without market testing.10

Ethical and Sustainable Consumer Behavior

In a more socially conscious world, ethics plays a bigger role in consumer decisions, especially among millennials who want to engage with brands that care about people and the planet. According to a recent Nielsen report, 73% of consumers in this group are willing to pay more for sustainable products.11 That’s why it is more important than ever for companies to practice what they preach.

Practicing good ethics means aligning your company’s policies with its values. When that happens, you emerge as a leader and get to shape cultural conversations on topics such as sustainability, in the way that Patagonia and TOMS shoe brands have done.11,12 In contrast, bad ethics could cause serious harm to your company’s reputation, leading to loss of customers and even legal action.

To help your company build and maintain consumer trust and improve customer retention, it’s important to identify gaps in your ethical brand strategy before your customers do. Use this checklist as a guide to developing a stronger ethical brand:13

  • Have you outlined a clear ethical purpose? Is that purpose linked to specific social and environmental causes?
  • Do your supply chains and production methods meet sustainability standards?
  • Have you committed to transparent and honest marketing practices?
  • Are you supporting charities and community groups through volunteering?
  • Has your company established policies on fair pay, diversity and inclusion, and positive company culture?

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  1. Retrieved on January 19, 2024, from forbes.com/sites/johnkoetsier/2023/08/29/top-10-selling-smartphones-all-from-2-companies-apple-and-samsung/?sh=4066538c57d1
  2. Retrieved on January 19, 2024, from industryleadersmagazine.com/is-samsung-a-trusted-brand/
  3. Retrieved on January 19, 2024, from blog.hubspot.com/service/consumer-behavior-model
  4. Retrieved on January 19, 2024, from medium.com/@mhalemohamad/the-influence-of-culture-on-consumer-behavior-understanding-the-impact-of-cultural-factors-on-5f533408a3b8
  5. Retrieved on January 19, 2024, from thetravel.com/mcdonalds-india-menu-items/
  6. Retrieved on January 19, 2024, from smallbusiness.chron.com/examples-company-failure-due-cultural-mistakes-70712.html
  7. Retrieved on January 19, 2024, from reel360.com/article/nike-pays-tribute-to-womens-world-cup-and-fans/
  8. Retrieved on January 19, 2024, from ca.indeed.com/career-advice/career-development/psychological-factors-in-marketing
  9. Retrieved on January 19, 2024, from linkedin.com/pulse/understanding-variables-influence-consumer-buying-behavior-yousaf/
  10. Retrieved on January 19, 2024, from surveymonkey.com/mp/consumer-insights/
  11. Retrieved on January 19, 2024, from forbes.com/sites/theyec/2019/08/30/how-to-use-ethical-marketing-to-attract-the-right-audience/?sh=327efc0e3e04
  12. Retrieved on January 19, 2024, from mckinsey.com/industries/agriculture/our-insights/patagonia-shows-how-turning-a-profit-doesnt-have-to-cost-the-earth
  13. Retrieved on January 19, 2024, from brandthechange.com/strategy/ethical-branding-how-to-stand-out-in-a-socially-conscious-world/