How do consumers make purchasing decisions?

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 How do consumers make purchasing decisions?

Highlights 

  • 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.

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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.

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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.

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