Influence: Factors affecting consumer choice - psychological, sociocultural, economic, and government

Question 1

Why do marketers examine consumer choice

Answer 1

Marketers closely examine the behaviour of consumers to understand what motivates an individual to
purchase a particular product (customer choice, buying behaviour) and attempt to influence customer choice by modifying their strategies to appeal to customers’ motives.
If businesses are aware of the factors that influence customer choice, they can predict customer trends and how they may react to particular marketing strategies.

Question 2

Psychological

Answer 2

Psychological factors are influences within an individual that affect his or her buying behaviour. Even though these psychological factors operate internally, they are also very much affected by sociocultural forces outside the individual. The five main psychological factors include-

Perception
different views on sports car (elitist or an achievement)
The process by which people select, organise, and interpret to create meaning
Range of perceptions across individuals
Our perception influences our purchasing choices

Motive
A motive is the reason that makes an individual do something
The main motives that influence customer choice include comfort, health, safety ambition, taste, pleasure, cleanliness and the approval of others
Advertising attempts to encourage people to buy the product

Attitude
A overall feeling about an object or activity. Customer attitude to a business is influenced the success or failure of a business strategies. Negative attires to a business or products often force business to change strategies

Personality and self image
An individuals personality is the collection of all the behaviours and characteristics that make up that persons and will to some extent influence the types of and brand a person buys
Self image is how a person views themselves and is a major determinant in what products we buy, as we are attempting to reinforce self image through our purchase

Learning
Changes in behaviour from new experience
Either positive or negative
e.g. poor customer service after support may change attitude
Business must assist customers to learn about them

Question 3

Sociocultural

Answer 3

Whereas psychological influences are internal forces, sociocultural influences are forces exerted by other people and groups that affect customer behaviour. There are four main sociocultural factors-

Social class
The factors generally used to determine a person’s social class (or socioeconomic status) are education, occupation and income. 

Social class influences the type, quality and quantity of products a customer buys. 

E.g., higher income earners may seek out luxury cars as they are perceived to be prestigious.

Culture and sub-culture
Culture is learned value, belief and behaviors. culture influences buying behaviour it infiltrates what we do in everyday lift. It determines what people wear what they eat, and where they lives. e.g. companies are making nutritional food because its what people wants

Family & roles
All of us occupy different roles within the family and community groups.
- E.g., market research shows that most women still make buying
decisions related to healthcare products, food and laundry supplies.

Peer group
- a group of individuals whom a person has close connections with, adopting their attitudes, values and beliefs. A customer buying behaviour may change to match the rest of the group belief and attitude e.g a close friend

Question 4

Economic

Answer 4


Economic forces influence a business’s capacity to compete and a customer’s willingness and ability to spend. Level of economic activity fluctuates from boom to recession. Each of these two distinct phases influences the marketing environment in the following ways:

Boom -
high levels of employment
rising incomes
customers optimistic about the future
increase in consumer spending

Recession or ‘bust’
unemployment levels rise
income falls
customers pessimistic about the future
decreased in consumer spending

Question 5

Government

Answer 5

Governments use a number of economic policy measures to influence the level of economic activity. Depending on the prevailing economic conditions, the government will put in place policies that expand or contract the level of economic activity. These policies directly or indirectly influence business activity and customers’ spending habits, and therefore will influence the marketing plan.

→ The Competition and Consumer Act 2010 (Cth) (CCA) (formerly the Trade Practices Act 1974) is a single national law that influences marketing decisions.

Question 6

Apply the IKEA case study

Answer 6

Psychological
IKEA continues to grow in a challenging business environment - IKEA Global
- economic performance
- influenced by covid

Socio-cultural
After 12 long years of planning, IKEA opened its first store in India in August 2018. Despite the hugely popular opening of IKEA’s maiden store, there was caution as to how things would proceed for IKEA in this new market as it was entering into a distinct socio-cultural zone. Indian consumers depicted substantial variations in their consumption patterns from their Western counterparts due to various social and cultural factors. With the growing Indian middle-class population, the Indian market for IKEA was a very lucrative, but tough market to crack. Though IKEA had taken many steps to adjust its offerings to the requirements of the Indian market, sceptics were still not convinced that IKEA has done enough to understand and cater to the socio-cultural dilemma which it would face in the Indian market.

Economic
IKEA appeals to price and quality perceptions by offering a wide range of products at different price levels and different colours, finishes and styles to also appeal to different personalities.

Government
IKEA spotlights support needed for domestic violence