How do consumers make purchasing decisions?

Follow us on Google News:
 How do consumers make purchasing decisions?


  • The modern consumer is well-informed and well-equipped with technological tools that help form decisions.
  • As online consumer activity has picked up the pace, individuals have left behind a large trail of data for marketing firms to analyse.
  • Personal, situational, and psychological factors influence consumers’ decisions to a great extent.

The increasing range of products available for the modern consumer has greatly changed the way purchasing decisions are made in the contemporary era. Additionally, abundant information over the internet has helped the modern consumer wield the weapon of superior knowledge about a product and its alternatives. In this dynamic world, companies should constantly evolve to move in line with changing consumer preferences.

Image description: Rising demand for consumer goods

While consumers may not pay as much attention to why they choose what they choose, finding out an answer to this question is extremely important for marketing companies for the sustenance of their businesses. In a way, discovering the trends in consumer behaviour has become a profession, with companies taking sample sets of consumers’ purchasing habits to establish a pattern.

ALSO READ: What is Behavioural Economics?

Let us understand the consumer’s decision-making process in some detail below:

Consumer’s decision-making process

The decision-making process allows a consumer to become aware of his needs. For any rational human, making a decision is not an immediate action. Instead, it is a slow and steady procedure that is driven by various forces along the course of its execution.

Certain external factors may sometimes urge consumers to make moment decisions that might be heavily influenced by temporary factors. However, marketing firms do not tend to focus on these areas, as their priority lies in understanding which purchasing patterns arise out of large-scale or macroeconomic policy changes.

ALSO READ: Planning to invest? Keep track of these economic indicators

Amid the growth of e-commerce platforms for consumers to choose from, the study of consumer behaviour has taken an interesting turn. As a consumer glides through various product categories in an online atmosphere, he leaves behind a trail of data. Companies can segregate this data based on the location, age, and gender of the customer to get a better understanding of how certain groups behave.

Image Description: Rise of online shopping across the world

Factors influencing consumer choices

Consumers usually base their purchasing decisions on different factors, which can broadly be classified into personal, situational, and psychological.

Personal factors

Each consumer has his/her own set of wants or preferences that may not be profoundly affected by external reasons. Additionally, buying habits are largely dependent on the demographic group that the consumer belongs to. For instance, young, unmarried customers would have a relatively lower demand for healthcare products compared to the elderly population.

In addition, the cultural differences among the population also affect people’s lifestyles, which in turn give rise to different purchasing habits. As an example, a working mother living in a suburban area might prefer ordering groceries online, while a farmer living on the outskirts of town would prefer choosing his own produce over store-bought groceries. Meanwhile, the farmer’s buying needs might include seeds, manure, and other farming materials that he might prefer buying from a brick-and-mortar setup.

Situational factors

On many occasions, newer products launched into the market influence consumers’ buying needs. Firms continuously evolve their pre-existing products and come up with new enhancements such as a higher dimension camera on a smartphone or a more fuel-efficient version of a car. These types of upgrades might urge consumers to switch to the newer version even when there is not an urgent need for the same.

Image Description: Increase in buying and selling activity with the launch of new products

Meanwhile, consumers sometimes get attracted to a particular brand and buy its products even if there is a more efficient deal available elsewhere. This is known as customer loyalty, which makes the decision-making process much simpler for the customer.

Psychological factors

An individual may derive the motivation to buy a product from various sources, which may not be same for every customer. Moreover, the intensity of motivation can differ depending on the urgency or the degree of the customer’s interest in the product.

At times, it may also happen that the motivation is not strong enough to prompt the purchase. For instance, an individual who wishes to switch to a healthier diet might be urged to cheat on his diet when he sees a fast-food joint. This means that his degree of motivation was not strong enough to cause a change in his eating habits. However, such drastic changes take time and may even become a long-term consumer choice.

GOOD READ: 10 personal finance hacks that can change your life


The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK