Nowadays, the consumer/producer relationship is arranged in a way that the consumer is in the centre of manufacturer’s interest, his primary purpose and object of deliberate action. That is why, for the manufacturer, it is important to study consumer’s psychological, economic, sociological and cultural point of view. Recently formed discipline “consumer behaviour” includes these approaches and explores consumers from different perspectives. Specificity of the consumer market is that it is divided into multiple segments, with certain categories of customers with their requirements, tastes, demands, traditions, cultural characteristics, and boundaries of effective demand. In practical marketing, consumers are divided into two groups: ultimate customers and corporate consumers. It is the consumer who decides what and where to buy, determines what products to produce and what business will be successful. The buyer’s freedom of choice of goods is especially intensified because of his/her mobility and greater awareness through advertising, the media, and the Internet. Market researchers are studying the impact of many factors on buyer’s behaviour when making their purchasing decisions.
Factors Influencing Consumer Behaviour
Consumer behaviour is a deliberate activity aimed at choice, purchase and use of products. The activity is aimed at meeting the needs and is subjected to various influences from the environment and consumers with individual differences.
All factors that influence the behaviour of consumers can be divided into two groups: internal and external. Factors of external influence on consumer behaviour include culture, demographics, values and norms, social status, reference groups, family, household, climatic, economic and political factors. In most cases, marketers cannot control these factors, but they need to know and consider them. Internal factors include the representation of a person about himself/herself, personal values, personality characteristics, cognitive processes, etc. Next, I will list the most important factors and try to uncover the meaning of every one of them.
In today’s marketing strategies, values of consumers are the criteria by which consumers are divided into homogeneous groups with similar values; the type of treatment in advertising, design, and pricing are selected. Value orientation is influenced at the stage of evaluation criteria by consumers and at the stage of making a purchasing decision. Consumers have a tendency to choose brands that have a high value because it is easier to understand what benefits the goods have; they feel more confidence and get more satisfaction from using such brands. In order to determine how the value determines the market demand, a multi-stage analysis is used to demonstrate the correlation between product quality and consumer’s personal values. The process of relationship between life values and product characteristics is called laddering.
A consumer perceives a huge amount of information on a daily basis. Its impact is manifested in processing this information, emotions, thoughts, possible solutions that lead to consumer behaviour. Psychological studies prove that the behaviour is determined by cognitive, emotional and behavioural factors. The cognitive processes are those of perception and information processing: sensation, perception, thinking, opinions, beliefs, learning experiences, and others. Understanding the laws according to which consumer processes the information allows people to understand what guided them in making purchasing decisions. Moreover, emotions play an important role in the regulation of consumer behaviour. Emotions form the motivational system of the person that controls and directs ones behaviour.
Motivation is a series of personal considerations, ideas, interests and motives that guide the consumer when making the purchase while in the store. Motivation may be both external and internal. Internal motivation takes place when people do something without the incentives and motives and often find it difficult to clearly express the reasons for such motives; it is the motivation which exists at the level of the subconscious mind of men. External motivation occurs during encouraging individuals for committed actions.
Social classes have certain features lying in clothing purchase, home and leisure arrangements. Different social classes have distinctive properties of information processing. Lower social classes have limited sources of information. To compensate for this lack, consumers often rely on opinions and experiences of their relatives or close friends. Middle-class consumers rely more on the media and on the activities of external search for information: on the opinion of scientists and specialists. Advertising messages can be specifically directed to specific social classes. For example, lower-class consumers are more receptive to advertising with a strong visual character, showing activity, continuing work or life or the solution of practical problems of everyday life. Consumers of upper class, on the contrary, are more open to thin symbolism, more selective and individual approach, types of objects and symbols, significant for the purposes of self-expression. Language samples of consumers are closely related to their social class. Using the language of social class is significant in advertising messages. For example, advertising products for upper class use longer words and more abstract language of visual materials. Advertising products for middle and lower classes have more physical attributes and visual accents than words do.
The purchase process is also different for different social classes. Social status affects the way people think about where and how they buy. People of lower status prefer the local outlets with the possibility of face-to-face interaction, where they will receive friendly service. Upper class is more confident in their purchasing ability to analyze, make the right choices, and pay reasonable prices. People of upper class want a pleasant atmosphere with beautiful storefronts and excellent service and are willing to pay for it. Families of the upper class are shopping with the help of catalogues and video-text offerings. Lower classes consider the purchase of household items and clothing as an attractive part of purchasing activities. The highest probability of a joint trip to the store by family members is for the lower classes.
Effective positioning requires a good knowledge of the target market characteristics, as well as product attributes desired by social classes. One should remember that the number of consumers willing and aspiring to be in the upper classes is much more than those who belong there. Many middle-class consumers can buy products with the symbols of higher social classes. Procurement of such items from time to time improves self-representation, and increases these people’s self-esteem.
Family is the primary informal group. It is a basic social institution, whose main objective is the socialization of individual in a society. It has a direct impact on the formation of a human life attitudes, beliefs, and habits. Family is the most important unit in the society, participating in the process of consumer purchases. It is subjected to constant study, trying to catch any meaningful moments that influence purchase decisions in this institute. Manufacturers, marketers and economists are interested in how the family influences the consuming of goods, as they are interested in the role of spouses, children and the impact that each of them has during the purchase of various goods.
The ratio of influence of two spouses on the purchase of any goods is wide and depends on the product category. Wives, as homemakers, traditionally act as the purchasers of products, home furnishings, consumer electronics, etc. Husbands, however, are usually responsible for major purchases, or purchases that are socially distant from the woman, for example, a set of tools. However, during making a decision about buying expensive goods, services, the decision is made jointly. There is a balance between the influence of the husband and wife. Examples of such purchases can be real estate, auto, motorcycle equipment, and trips.
The Impact of Situation
Consumer behaviour is influenced by five major situational factors:
- physical environment (geographical location, layout, sounds, smells, lighting, appearance)
- social environment (the presence or absence of other people in this situation)
- time (temporal characteristics associated with the moment of purchase)
- task of the consumer (what a person must accomplish in this situation)
- previous state (mood or condition to which the user enters into the situation: anxiety, pleasant mood, amount of money, fatigue).
Culture has a major impact on one’s needs and behaviour. Human behaviour in society, as well as consumer behaviour, largely depends on the environment and education of a person. Culture influences human consciousness, helping them understand what behavioural postulates are perceived by society as acceptable and what is unacceptable in a specific cultural environment.
Culture affects the following important characteristics of society:
- Clothing, appearance, architecture
- Faith, traditions, stereotypes
- Norms and values
- Living habits.
These characteristics can be used to determine cultures, cultural differentiations and the establishment of cultural similarities. Marketers use cultural characteristics in the market segmentation from a global perspective or in the development of advertising strategies and sales of goods in different markets.
Adapting the Product Portfolio of the Company on the Example of Coca-Cola
Coca-Cola has become a household name in many languages. Millions of people around the world associate the word ‘Coca-Cola’ with a refreshing drink, the taste of which is familiar to them from childhood. Coca-Cola Company is the world’s largest producer of soft drinks, which offers 450 brands of carbonated and non-carbonated beverages. Along with the brand Coca-Cola, which is recognized as the most expensive in the world, the company’s portfolio includes 12 other brands. Employees of Coca-Cola Company maintain certain corporate culture and values. Company values serve as a guide for action and describe how it behaves in the world:
- To act responsibly and to fulfil their obligations;
- To achieve excellence in everything the company does;
- To act as a team and win the competition;
- To train employees and develop their potential;
- To treat everyone openly, honestly and with respect.
Cultural Characteristics on the Example of Coca-Cola
Faced with the local culture, brands are using the product localization strategy, taking into account not only regional linguistic, but social and gastronomic features. Travelling around the world, one can find many familiar brands, but with an unusual flavour. Famous brands adapt their products to the preferences of people in different countries.
Amazing flavours are presented in New Zealand – “Coca-Cola Raspberry” and “Coca-Cola Citrus;” in Bosnia-Herzegovina, there are “Coca-Cola Blak”, “Coca-Cola M5”, the French can enjoy “Coca-Cola Light Sango”, and the British – “Coca-Cola Orange”. Currently, the world produces about 70 different types of beverages, Fanta: in Serbia, Montenegro and Croatia “Fanta-Shokata” with elderberry is sold, Armenia sells “Fanta Exotic”, Switzerland and the Netherlands sell blackcurrant flavoured Fanta. Thus, the company takes into account the local consumers who quickly “became selective in their tastes,” and choose to not consume soft drinks, considering them harmful.
In those markets, where traditions, cultural and geographical features play an important role, there are specific technical regulations for products’ corporation. Their goal is to increase yields and the attractiveness of the parent brand. Therefore, along with the global brand corporations, the local brand still retain established strong ties with customers. For example, after the purchase of Indian Thumb’s Up brand (№1 brand among soft drinks in India) by Coca-Cola Company, it was decided to keep the brand name ‘Thumb’s Up’, only mentioning that it belongs to Coca-Cola.
Impact of American Values on the Example of Coca-Cola
The strategy of minimal use of elements’ culture of the recipient (local culture) can be implemented in several ways; it depends on goals of the campaign. If the main task of the whole campaign is to promote values of any culture, and lifestyle of its representatives, the creators of the original advertising use powerful symbols of culture of the donor (in this case, American culture). However, the absence of elements of culture of the recipient is much more difficult for the perception and understanding of advertising, so elements of culture of the recipient are used to transmit the least important information to ensure understanding and preferred interpretation of tailored advertising. A striking example in this case is the product advertising by Coca-Cola campaign, which is based on the propaganda of American culture and American way of life, an integral part of which is the use of this product.
Coca-Cola brand is clearly identified. Elements of local culture never distract from the advertised product, they either are not used or enhance the value of the implicit messages by comparing the recipient culture with American culture. Coca-Cola Company sells a lifestyle, a way of seeing the world, which one can join, using the advertised product. The basic approach in this case is the introduction of the advertised product in the community in order to transform it in accordance with the values of American culture, the benefits of which are not even questioned.
Advertising of Coca-Cola products exploit human imagination and dreams of youth, friendship, the sense of belonging to a certain social community, as well as ideas about the desired behaviour in the social community. Television commercials are quite dynamic; characters are active and full of energy. In the commercials, the focus is not on the individual but on the group of people involved in any activity that seems to be extremely significant, useful and even pleasant.
The main feature of the Coca-Cola products is colours - bright red and white. Red is the colour, having strong impact on human emotions, whereas white is neutral and contrasts sharply with the red. Red attracts attention and stands out from all the other colours. In the minds of people, it has connotations associated with such strong emotions as the feeling of danger, excitement, love, passion. White is the colour associated with purity, chastity, and virtue. The selection of these colours was made due to the age of the audience - these are children and young people; they are pure and virtuous and capable of strong feelings.
Culture is a set of values, ideas, objects of human labour and other significant characters that help people to communicate, interpret and evaluate the situation. Culture, as one of the strongest factors of external pressure, influences consumer behaviour, the buying decision, and use of a particular product by a consumer. Manufacturers need to produce and sell their products in accordance with the cultural characteristics of users in a particular country.
In order for a certain product to be successful, manufacturers have to understand different consumers with their needs and comprehend the key factors that influence the buying behaviour. Understanding the above mentioned factors allows the market leaders to create meaningful and effective marketing program. A consumer is the end point of the movement of all material values. One way or another, especially in a market economy, the consumer becomes an unofficial “leader” of the company, affecting the process of managing their preferences and behaviours.