Key factors affecting consumer and financial decisions - ASAP Flashcards
Key factors affecting consumer and financial
decisions:
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- Customer service
- Price
- Convenience
- Marketing and advertising
- Gender
- Age
- Disposable income
- Environmental considerations
- Social media
- Cultural factors
Customer service:
Good pre-sales and after-sales service makes you feel you are a valued customer. Consequently you will
keep buying products from that store. Poor service can have the opposite effect.
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.
Convenience:
Many consumers do not have a lot of time to shop. They want shopping to be hassle-free, or convenient. These factors will influence when, where and what consumers buy. Nowadays, convenience also relates to being able to shop online or to have access to an app.
Marketing and advertising:
This plays an extremely important role in influencing our consumer decisions. 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.
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 may 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!
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.
Disposable income:
A consumer’s level of income determines what kind of products they regularly purchase. Disposable
income refers to the amount of money that households have available for spending and saving after income
taxes have been accounted for. A buyer with higher disposable income will spend more on luxury or
lifestyle items. People with higher disposable income also spend more on vacations and tours.
Environmental considerations:
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.
Social media:
Social media includes websites and applications that enable users to create and share content or to
participate in social networking. It incudes programs such as Facebook and Instagram. Social influencers
are people with a large audience who post regularly on social media promoting products. The content they
post often influences their followers’ purchasing decisions.
Cultural factors:
Cultural factors are the set of basic values, perceptions, wants and behaviours of a particular community or
group of individuals. The culture of an individual influences the way they behave. What an individual learns from their parents and relatives as a child becomes their culture. Cultural factors have a significant effect on an individual’s buying decisions. Every individual has different sets of habits, beliefs and principles that they develop from their family status and background.
