Why do we buy the things we buy? Consumers make dozens of daily purchasing decisions, from necessities like food and clothing to luxury items and technology. However, most of us spend little time thinking about these choices’ underlying psychology and motivations.
In this article, we will explore the fascinating science of consumer behaviour. We will look at how external and internal factors influence consumers, the psychology behind shopping, effective marketing techniques, and, most importantly, how understanding consumer behaviour can help us make smarter and more conscious purchasing choices.
What is Consumer Behavior?
Consumer behaviour examines how people choose what to buy, use, and consume. It involves people’s psychological, social, and physical actions before, during, and after purchasing, using, and disposing of products and services.
In essence, consumer behaviour aims to understand:
- How consumers make purchasing decisions and what prompts them to buy things
- How their attitudes and priorities affect spending habits
- How demographics, cultural values, and social norms shape their preferences
- How emotions, memories, and sensory experiences influence shopping behaviour
- How marketing, advertising, and branding impacts consumer perceptions and choices
Studying consumer behaviour equips companies to develop better marketing strategies, product designs, promotional messages, and shopping experiences. It helps create offerings that resonate better with customer needs and desires.
For consumers, understanding what motivates their purchasing gives them the power to make more conscious, deliberate, and intelligent spending choices. It helps them recognize how external forces seek to manipulate their perceptions and free themselves from excessive consumerism.
Who are Consumers?
Consumers take on three main roles in the marketplace — the shopper, the buyer, and the end user.
The shopper ventures into the marketplace and interacts with products online or in physical stores. They explore, compare, test, and evaluate different purchase options.
The buyer is the one who completes the exchange transaction and purchases the product. They pay the money in return for ownership of the goods.
Finally, the end user is the one who ultimately uses or possesses the product. For example, if you buy a gift for someone, you are the buyer, but they are the end user.
In most cases, the shopper, buyer and end user are the same person. However, in some situations like gift-giving, they may be different. Companies need to understand the distinct psychology of each role that influences shopping behaviour.
Why Do We Buy? The Benefits Sought
What drives consumers to buy things? Most of us assume we buy products for the inherent qualities and functionality of that product. However, consumer behaviour theory reveals that people buy products primarily for the specific benefits that they provide.
For example, a person buying a new smartphone is not after the phone itself but the benefits like connectivity, convenience, status, and so on that owning it provides. The core product is just a means to an end.
There are two main types of benefits that consumers seek:
- Practical/Functional benefite relate directly to the product’s perceived utility and performance. For a phone, it may be features like battery life, camera quality, screen size, and storage space.
- Psychological benefits: These satisfy emotional, social or ego-related needs like pleasure, status, self-esteem, and belongingness. For a phone, it could be the prestige of owning an iPhone or being part of the Apple community.
Effective marketing and product positioning focuses on showcasing the practical and psychological benefits provided by the product rather than just its physical attributes.
The Total Product Concept
To understand exactly how consumers perceive value, marketers must look beyond the physical product itself and consider the complete experience it offers.
The Total Product Concept presents all the benefits consumers see in a product as consisting of three layers:
- Core benefit — The essential, fundamental need fulfilled. For a smartphone, it is the ability to call, text, click photos, etc easily.
- Actual product — The physical item, features, quality level, brand name, styling, etc. The tangible product itself.
- Augmented product — Additional benefits and services like after-sales support, warranty, free delivery, instruction manuals, etc. The intangible extras.
The core benefit is the same across brands, but actual and augmented benefits are where companies can differentiate themselves. Most purchase decisions are strongly affected by augmented product factors that enhance convenience, risk reduction, and user experience.
Where do Consumers Shop? The Marketplace
The marketplace refers to any platform where consumers and products interact. It may be physical stores, shops, digital e-commerce sites, catalogue sellers, direct sales agents, etc.
Today’s omnichannel retail landscape offers consumers multiple shopping channels like web rooming (researching online, buying in-store) and showrooming (checking out in-store, purchasing online).
Different shopping mediums have distinct psychological nuances. Brick-and-mortar stores allow tangible product experiences, personal service, and sensory engagement, while e-commerce offers convenience and a vast selection.
Understanding these mediums and customer psychology within each is vital for retailers. Creating a seamless, consistent experience across channels is also key.
Market Segmentation
Consumers have highly diverse needs, preferences and behaviours. Selling a ‘one-size-fits-all’ product rarely succeeds. Market segmentation tackles this by dividing consumers into groups with similar requirements who will respond similarly to marketing strategies and offerings.
Segmentation enables companies to tailor products and messaging to specific customer profiles instead of scattering efforts through mass marketing. Some common bases for segmenting consumer markets include:
- Demographic factors like age, gender, income level, education, occupation, ethnicity, family size etc.
- Geographic factors like country, city, climate, population density, etc.
- Psychographic factors like social class, lifestyle, personality traits, values, attitudes, interests, etc.
- Behavioral factors like product usage occasions, brand loyalty, channel preferences, price sensitivity, etc.
Data analytics helps uncover what motivates different segments and how to cater to each effectively. The goal is to find substantial, easily identifiable, and reachable segments through marketing programs.
Positioning and Marketing Mix
Once key target segments are determined, companies must design an optimal marketing mix to match each segment. This involves:
- Product strategy — Formulating the right product features, quality, styling, options and extensions for the segment.
- Pricing strategy — Setting appropriate pricing levels considering segment factors like affordability and willingness to pay.
- Place strategy — Getting the product available in locations convenient for the target segment.
- Promotion strategy — Advertising on channels and with messages the segment pays attention to.
- Using the right positioning strategy to occupy a clear, distinct space in the minds of target consumers is also critical. Companies must highlight specific attributes that make their offering better suited for the segment’s needs through well-crafted messaging.
Understanding Consumer Psychology
Demographic or behavioural factors alone cannot fully explain consumer decision processes. To get inside the customer’s mind, marketers must consider psychological influencers like motivation, perception, learning, memory, personality, emotions and attitudes.
Key insights from consumer psychology:
- Buying is often motivated by emotional, impulsive needs rather than calculated logic.
- Consumers develop loyalty to brands that align with their self-image and identity.
- People perceive and value the same product differently based on subjective interpretations.
- Learning shapes future behaviour, as consumers repeat purchases that previously satisfied them.
- Advertising subtly manipulates consumers by creating positive memories and associations for brands.
- Personality affects shopping habits. Extroverts and introverts have very different styles.
- Emotions heavily impact purchases. Shopping is often a form of retail therapy.
- Attitudes and beliefs drive brand preferences and responses to marketing.
Understanding these mental nuances helps marketers create more compelling and influential branding and advertising. Conversely, being aware of psychological tactics prevents consumers from being subconsciously swaying.
The Consumer Decision Journey
The consumer decision-making process consists of several interconnected stages which lead to a final brand choice:
1) Need recognition — An unfulfilled need or want triggers buying. It may be a routine repurchase or an impulse desire.
2) Information search — Consumers seek product data that may satisfy their needs. This includes internal (experience) and external (advertising, reviews) information searches.
3) Evaluation and comparison — Consumers weigh the merits of different alternatives using criteria like features, price, and quality.
4) Purchase — The transaction where payment is made and ownership is transferred.
5) Post-purchase reflection — Consumers evaluate if the selected product met expectations and provided satisfaction.
This cycle is a useful framework for identifying the factors most influential at different stages and how to guide consumers towards your brand. Make it easy and compelling for customers to go from initial interest to final advocacy for your product.
In-Store Shopping Psychology
Physical stores use many psychological tricks to drive sales, often without shoppers consciously realizing it. Some common retail therapy triggers:
- Clever layout and displays that lead shoppers along optimal paths, expose them to hot-selling items and encourage impulse buys.
- Appealing sensory experiences through music, scents, colour schemes, temperature, lighting and more to put shoppers in the buying mood.
- Special pricing and bulk discount offers that tempt people to buy more than they need. Limited-time-only sales build urgency.
- Free samples and product trials that allow experiencing benefits first-hand. This invites taking the next step to purchase.
- Bundling complementary items that appear attractively inexpensive. The combined price seems lower.
- Humanizing the store through friendly, helpful salespeople who build rapport and trust with visitors.
E-Commerce Psychology
Online shopping has its psychology:
- The vast selection and ease of searching/comparing gives more power to the buyer. Impulse buying reduces.
- Virtual interactions are less personal. Building trust through branding and UX design is vital.
- Without sales clerk guidance, user-generated content like reviews gain huge influence.
- There is greater reliance on images, descriptions and data to evaluate products remotely.
- Lack of tactile interaction means augmented reality and videos help replicate in-store touch and feel.’
- Shoppers may use multiple devices while browsing — smaller screens require simplified navigation.
- With no physical sales pressure, optimizing website persuasion factors like copy, testimonials, and layout is critical for conversion.
The Psychology advertising and Promotion
Ads use tactics rooted in human psychology to sway purchasing:
- Attention-grabbing headlines and visuals exploit curiosity. Surprise and novelty elements also catch interest while scrolling.
- Appealing to the target demographic through situations, values and norms they identify with bits of help related to the brand.
- Playing on consumers’ insecurities and social pressures, then positioning the product as the solution.
- Framing the product benefits in line with the audience’s goals, motivations and desired self-image.
- Using influencer testimonials taps into social proof. People follow the crowd.
- Repetition cements messages in memory, and familiarity breeds trust. Jingles also increase mental retention.
- Flattery is powerful — making audiences feel good about themselves makes them reciprocate with purchases.
- Fear appeals and negative emotions prompt action by highlighting how the product helps avoid feared outcomes.
Recognizing these subtle advertising psychology techniques makes people more critical thinkers and empowers them against manipulation.
Neuromarketing: Interpret consumer behavior in the brain
Neuromarketing utilizes brain imaging, biometrics and other advanced equipment to reveal subconscious aspects of consumer behaviour. These hidden insights help marketers better understand and attract target customers. Some neuromarketing approaches:
- Tracking eye movement, gaze patterns and pupil dilation exposure to ads and products to gauge engagement, interest and recall.
- Measuring changes in brain activity, electrical impulses and blood oxygen levels in response to specific branding messages or events.
- Testing skin conductivity, heart rate, respiration and facial expressions to determine emotional reactions to marketing.
- Using thermal imaging to map facial heat patterns signalling pleasure, stress or frustration during shopping.
- Analyzing shoppers’ brain waves via EEG headsets to determine attention, relaxation, irritation and other neuro-metrics.
Neuromarketing provides invaluable insights and raises ethical concerns about subliminally manipulating consumer behaviour versus helping people make better self-directed choices.
Key Takeaways for Conscious Consumers
The field of consumer behaviour sheds light on the hidden psychological forces that drive our spending. Being aware of its key insights helps shoppers make more mindful and beneficial decisions:
- Evaluate if a product satisfies a need or want or is simply tempting through slick marketing. Reflect on your true motivations and goals.
- Don’t equate costly higher-end products with greater happiness. Often, basic functional items provide the most utility.
- Recognize how advertisers play on emotions like status anxiety or the fear of missing out. Reflect on how their messaging truly resonates with your values.
- Remember that your personal preferences matter more than pressure to conform to social standards not aligned with your priorities.
- Be cautious of impulse shopping triggers both online and in stores. Stick to planned buying aligned with needs.
- Consider deeper factors like environmental impact, ethics, usefulness, aesthetics and sentimental value over brand names and trends.
- Seek balance and moderation. Purchasing for short-term gratification often undermines long-term well-being.
Studying consumer behaviour principles creates better marketers and better-informed consumers. Companies can market smarter, while customers can shop smarter. It’s a win-win for both sides.
