What are the Factors Affecting Consumer Behaviour?

What is Consumer Behavior?

Consumer behaviour is the study of how individual customers, groups or organizations select, buy, use, and dispose ideas, goods, and services to satisfy their needs and wants. It refers to the actions of the consumers in the marketplace and the underlying motives for those actions.

Engel, Blackwell, and Mansard define consumer behaviour as “…the actions and decision processes of people who purchase goods and services for personal consumption.”

Factors Affecting Consumer Behavior

Consumer Behaviour is influenced by many different factors. The five major factors that influence consumer behaviour are as follows −

Psychological Factors

Human psychology plays a major role in understanding consumer behaviour. Difficult to measure, but psychological factors are powerful enough to influence a buying decision.

Some of the important psychological factors are as follows −


Motivation to do something often influences the buying behaviour of the person. Individuals have different needs such as social needs, basic needs, security needs, esteem needs, and self-actualization needs. Out of all these, the basic needs and security needs take a position above all other needs, and these motivate a consumer to buy products and services.


Our perception is shaped when we gather information regarding a product and examine it to generate a relevant image regarding a certain product. Whenever we see an advertisement, review, feedback, or promotion regarding a product, we form an image of that item. As a result, our perception plays an integral role in shaping our purchasing decisions.


When a person buys a product, the general tendency is to learn something more about the product. Learning also comes over a period through experience. This learning depends on skills and knowledge. While skill can be gained through practice, knowledge can be acquired only through experience.

Learning can be either conditional or cognitive. In conditional learning, the consumer is exposed to a situation continuously to develop a response towards it. Whereas in cognitive learning, the consumer applies his/her knowledge and skills to find satisfaction from the product that she/he buys.

Attitudes and Beliefs

Consumers’ attitudes and beliefs also influence the buying decision. Based on this attitude, the consumer behaves in a particular way towards a product. This attitude plays a significant role in defining the brand image of a product. Hence, marketers try hard to understand the attitude of a consumer to design their marketing campaigns.

Social Factors

Humans are social beings, and the society or the people they live around influence their buying behaviour. Human beings try to imitate other humans and nurture a desire to be socially accepted. Hence, their buying behaviour is influenced by other people around them. These factors are considered as social factors.

Some of the social factors are as follows −


Family plays a significant role in shaping the buying behaviour of a person. A person builds his/her preferences from his childhood by watching their family buy certain products and continues to buy the same products even when they grow up.

Reference Groups

A reference group is a group of people with whom a person associates himself. Generally, all the people in the reference group have common buying behaviour and influence each other.

Roles and status

A person is influenced by the role that he holds in the society. If a person is in a high position, his buying behaviour will be influenced largely by his status. A person who is a Chief Executive Officer in a company will buy according to his status while a staff or an employee of the same company will have different buying pattern.

Cultural Factors

A group of people is associated with a set of values and ideologies that belong to a particular community. People coming from particular communities have behaviours highly influenced by their culture. Cultural factors also include the concepts of subculture and social class.

Personal Factors

Factors that are personal to the consumers influence their buying behaviour. These personal factors vary from person to person, thereby producing different perceptions and consumer behaviour.

Some of the personal factors include −


The buying choices of individuals depend on which age group they belong to. Elderly people will have totally different buying behaviours as compared teenagers.


Income influences the buying behaviour of a person. Higher income gives higher purchasing power to consumers. When a consumer has higher disposable income, it gives more opportunity for the consumer to spend on luxurious products. Whereas low-income or middle-income group consumers spend most of their income on basic needs such as groceries and clothes.


Occupation of a consumer influences the buying behaviour. A person tends to buy things that are appropriate to this/her profession. For example, a senior corporate professional would tend to buy formal clothing whereas a creative designer would tend to spend on casual wear.


Lifestyle is an attitude, and a way in which an individual stay in the society. The buying behaviour is highly influenced by the lifestyle of a consumer. Someone who leads a healthy lifestyle would spend more or healthy food alternatives.

Economic Factors

Consumer buying habits greatly depend on the economic situation of a country or a market. When a nation’s economy is strong, it leads to a greater money supply in the market and higher purchasing power for consumers. Whereas a weak economy reflects a struggling market that is impacted by unemployment and lower purchasing power.

Some of the important economic factors are as follows −

Personal Income

When a person has a higher disposable income, the purchasing power increases simultaneously. Disposable income refers to the money that is left after spending towards the basic needs of a person. When there is an increase in disposable income, it leads to higher expenditure on various items. But when the disposable income reduces, parallelly the spending on multiple items also reduced.

Family Income

Family income is the total income from all the members of a family. When more people are earning in the family, there is more income available for shopping basic needs and luxuries. Higher family income influences the people in the family to buy more.

Consumer Credit

When a consumer is offered easy credit to purchase goods, it promotes higher spending. Sellers are making it easy for the consumers to avail credit in the form of credit cards, easy instalments, bank loans, hire purchase, and many such other credit options. When there is higher credit available to consumers, the purchase of comfort and luxury items increases.

Liquid Assets

Consumers who have liquid assets tend to spend more on comfort and luxuries. Liquid assets are those assets, which can be converted into cash very easily. Cash in hand, bank savings and securities are some examples of liquid assets. When a consumer has higher liquid assets, it gives him more confidence to buy luxury goods.


A consumer is highly influenced by the amount of savings he/she wishes to set aside from his income. If a consumer decided to save more, then his expenditure on buying reduces. Whereas if a consumer is interested in saving more, then most of his income will go towards buying products.


These are some of the underlying factors that influence the consumer behaviour, and the marketer must keep these in mind, so that appropriate strategic marketing decision is made.