Key Factors Affecting Consumer Decisions

Introduction

• All consumers have individual wants. Therefore, what people buy varies from one person to another. For example, if you asked each class member what she or he wants, the responses would reveal a wide variety of goods and services. One or more of the following factors will influence spending decisions in some way: finance, price, marketing, age, gender, convenience and service. Environmental factors should also be considered when making decisions. Let us look at each of these factors.

Convience

• Many consumers do not have a lot of time to shop.They want shopping to be hassle-free, or convenient. Convenience has many meanings for consumers, such as travelling time to a retail outlet, the number of stores located within one shopping complex or suitable shopping hours. These factors will influence when, where and what consumers buy.
• In our current society people want things instantaneously.
• Convenience plays a major in the consumer’s decision making. Not all consumers the time to shop. Thus consumers would want to shop at a retail store or a shopping complex/mall that requires, less time and effort to travel to and suitable trading hours. Retails stores like ALDI have long trading hours; opening from 8:30pm and closing at 8pm. ALDI is located in many local areas which means, consumers will less time to travel. These qualities make ALDI one of the most frequently visited retail stores. Therefore convenience is an important key factor in affecting a consumer’s decision making.

Service

• Good pre-sales and after-sales service makes you feel you are a valued customer and, consequently, you will keep buying that product going back to a particular store. Poor service can have the opposite effect.
• Good service both before the sale and the after sale can greatly affect a Consumer’s decision as to where to shop and buy. Good services such as a polite and helpful sales representatives can greatly influence a consumer’s decision. Poor service such as a lack of trained or helpful sales people can turn people off from shopping a particular store. Therefore customer service is vital in many consumer decision as where they shop and buy their goods and services.

Price

• How much is it?This is usually one of the first things you want to know. If the price of a good is more than you can afford, you will probably not buy it. Consumers want the best value for their money: that is, they want to pay the lowest price for the best quality. Price is one of the main factors affecting consumer decisions.
• Can I afford it?’, ‘Is there something better?’,’ Do I really need it?’, are the usual questions that a consumer ask themselves before they a purchase a good. Consumers want to buy a good for the lowest price but with good quality. With this shops will offer discounts and sales to increases the chance of a consumer buying their goods and them gaining a profit. However shops will look at their competitors prices and will reduce their prices. Shops like Bunnings will quote in their advertise that they will beat their competitor’s price by 10%.Therefore the price plays a significant in the consumer’s decision making.

Marketing

• This plays an extremely important role in influencing our consumer decisions. As consumers, we are constantly exposed to all aspects of marketing.The average consumer is exposed to an estimated 500 marketing strategies (mainly some form of advertising) every day. New products are released onto the market and advertised. If the marketing campaign is successful, consumers will be influenced into thinking they need this product.
• Marketing plays a very significant role in consumer decisions. Businesses use this factors to create a sense of need and awareness to the consumer. There are two types of marketing used; Aspirational and Information-based. Aspirational marketing aims to appeal a certain group of consumers. With this the targeted consumer we will feel the need to the purchase the product to join the group of people who purchased the product. Nike uses aspirational marketing to attract their audience and using celebrities. Information-based marketing involves stating facts, news and a brief information about a product. Companies like Oral-B give brief but informative information about their tooth brushes.This lets the consumer know that the company’s product is legitimate. With that being so marketing plays the most important role in consumer decision making, for this convinces the consumer that they really need this product.

Gender

• Males and females have a number of common wants, such as entertainment, music and a car. However, a person’s gender influences some types of purchase. For example, female consumers spend more on cosmetics than males. The influence of gender on consumer decisions is best displayed by the products advertised in catalogues for Mother ’s Day and Father’s Day: mum gets the iron and dad gets the cordless drill!
• Males and females have common some commons wants. Such as entertainment, music and a car. But they both have their differences. Females like beauty, cosmetics and fashion. However males prefer fashion, technology and hardware,

Environmental

• With increasing community awareness of environmental pollution, many consumers are becoming more aware of the problems caused by throwaway packaging. You therefore may be influenced to purchase a product that has minimal packaging or packaging that can be recycled.

Finance

• There will be times when the price of a good is more than the amount of cash you have available, such as when you purchase a home or car. After careful consideration you might decide to take out a loan — organise finance — to purchase the good. The cost of the borrowed money, the interest rate, and the ease with which the finance can be arranged will influence your spending decisions.
• The cost of the good or service significantly influence a consumer's decision making.

Age

• As a baby, you most probably wanted a toy or rattle. Now you are a teenager, you may want a mobile phone. By the time you are 18, a car becomes an important want. Later on, you might wish to buy a place to live in and when you are older and have retired, you may want to go on a world trip. Our wants change over time.
• Age of a consumer and his life cycle are two most important sub factors under personal factors. With the age and the life cycle the consumers purchase options and the motive of purchase changes, with his decisions of buying products change. Hence this stage does affect consumer behaviour.