FACTORS THAT

INFLUENCE

CONSUMER

BEHAVIOR

External Influences on
Consumer Behavior

CULTURE. Culture is defined as the patterns of behavior and social relations that characterize a
society and separate it from others. Culture conveys values, ideals, and attitudes that help
individuals communicate with each other and evaluate situations. It is important in viewing
culture to draw legitimate generalizations about a given culture or subculture without resorting
to stereotyping. An individuals culture provides a frame of reference concerning acceptable
behaviors, and as such, culture is a learned set of arbitrary values.

SOCIOECONOMIC LEVEL

Socioeconomic level has a large influence in consumer decision-making. Marketing managers

have a long attempted to correlate socioeconomic level with dining-out habits and travel
patterns. Hospitality managers must identify the relative socioeconomic levels to which the
operation appeals and targets those groups directly with a customized marketing mix.

REFERENCE GROUPS

A reference group is a group with whom an individual identifies to the point where the group
dictates a standard of behavior. Reference groups exert tremendous influence on consumers
hospitality and tourism purchase decisions. Every individual is influenced directly and indirectly.
Marketing research has identified three types of reference groups: comparative, status, and
normative. The two most common types of reference groups are comparative and normative.

*Opinion Leaders* - These leaders include both formal and / or informal leaders of reference groups, and
their opinions normally influence opinion formation in others.

HOUSEHOLD

A household is defined as those individuals who occupy a single living unit. There are more than
80 million households in the United States, and within every household certain characteristics,
leadership, and norms exist. Leadership is normally rotated among members of the household.

Internal Influences on
Consumer Behavior

Internal Influences. These influences consist of personal needs and motives, experience,
personality and self-image. They are not as observable and therefore are not as well
documented and understood as external influences.

Personal Needs and Motives

A need is a lack of something or the difference between someones desired and actual states.

A motive is a persons inner state that directs the individual toward satisfying a felt need.

Physiological Needs

Physiological Needs are primary needs for food, shelter, and clothing, which one must have
before thinking about higher order needs. Nearly all products and services offered to consumers
by hospitality and tourism firms address these needs.

Safety Needs

These second-level needs include personal security and protection from physical harm.

Social and Belonging Needs

Once needs at the lower two levels are satisfied, consumers look toward achieving social acceptance by
others.

Esteem Needs

Once consumers feel accepted, they seek to enhance their self-esteem. Hospitality and tourism
companies cater to these individuals by providing a higher level of personal service.

Self-Actualization Needs

The highest-level need within Maslows hierarchy focus on an individuals need to reach his or
her full potential. For the most part, these needs are often beyond the scope of what hospitality
and tourism marketers can expect to fulfill. However, there are examples from within the
hospitality and tourism industry regarding the consumers attempt to satisfy self-actualization
needs.

Experience

Experience is also a major internal influence on consumer behavior. As individuals encounter

new situations, such as dining in a particular restaurant for the first time, they integrate their
perceptions into an experience framework that influences future decisions. The old adage, First
impressions are important, applies directly to the hospitality and tourism industry.

Hospitality managers must remember that people (consumers) are products of their
environments. Each new experience is integrated into a frame of reference includes each
individuals beliefs, values, norms and assumptions.

Personality and Self-image

Each individual consumer develops a unique personality and self-image over a period of time.
For marketing purposes, individual personality type can be grouped into various classification
such as swingers, conservatives, leaders, and followers.

*Personality*- an individuals distinctive psychological characteristics that lead to relatively consistent

responses to his or her environment.

Perception and Attitude

Each day, consumers are exposed to thousands of stimuli. Some of these stimuli are consciously
received, resulting in a thought process, while others are simply ignored.

*Perception is the process by which stimuli are recognized, received, and interpreted. Each individual
consumer perceives the world differently.

CONSUMER

DECISION

MAKING

*Consumer makes decisions concerning the purchase of good and services, a very complex decision
making process.
EXTERNAL
Culture

Problem Recognition

INTERNAL

Information search

Socioeconomic
Level
Reference Group

Needs

Evaluation of

Experience

alternatives
Purchase

Personality

Decision
Household

Post Purchase
Evaluation

Self- Image
Perceptual
attitude

PROBLEM RECOGNITION- Occurs when the consumer realizes a difference between her actual state and
her desired state.
INFROMATION SEARCH- once the need is raised to a conscious level, the model holds that the
consumers seek to retrieve information.
INFORMATION
SOURCE

EFFORT

CREDIBILITY
REQUIRED

Internal

Low

High

(past experience)
External
Personal

Low

High

Marketing
(advertising,
Promotions , salespeople) High

Low

Public(consumer
Information, internet)

High

High

EVALUATION ALTERNATIVES
Consumers who ask to , at which one of several possible restaurant should I dine tonight? go through
cognitive process in answering this question, whereby they weight the positive and negative aspects of
each alternatives .
PURCHASE DECISION- at this point that the individual actually makes the decision. External & Internal
variables come together to produce a decision.
POSTPURCHASE EVALUATION- post consumption feelings are based on two factors: the consumers
expectation and the actual performance by the hospitality operation.
CONSUMER PROBLEM- SOLVING PROCESSES
-

Consumer , either consciously or subconsciously, employ processes to integrate the information

that they have obtained over time to evaluate and choose among the various alternatives.
These formal integration can be termed compensatory, non compensatory or combination of
the two.

COMPENSATORY STRATEGIES- use a products strengths in one or more areas to compensate for
deficiencies in other areas. In other words, consumers view product and services as bundles of
attributes.
NON COMPENSATORY STRATEGIES- dont allow product strengths in one area to compensate for
deficiencies or weaknesses in another area. Instead, consumers place more emphasis on one individual
attributes and some cases develop minimum threshold to use in evaluating products and services.
Three main non compensatory strategies that are used by consumer: conjunctive, disjunctive, and
lexicographic.

CONJUNCTIVE- involves setting minimum thresholds for each attribute and eliminating brands that do
not surpass threshold on any one salient attribute. Consumer determines w/c attributes will be
important in choosing between brands.
DISJUNCTIVE- consumer still establish minimum threshold for their salient attributes. However, a brand
will be acceptable if it exceeds the minimum standard on at least one attribute. Consumers apply this
approach tend to have only one or two salient attributes, the product or services tend to be very similar
and they are not highly involved in decision- making process.
LEXICOGRAPHIC- it falls somewhere between conjunctive and disjunctive choice processes in terms of
complexity.
COMBINATION STRATEGIES- attempt to adapt to the purchase situation and simplify the decision
processes.
CONSUMER PROBLEM SOLVING TECHNIQUES
- Decision making differs in the length of time and effort expended on each stage based on the
consumers level of involvement and experience with a product category. Also, the level of involvement
may change depending on the purchase situation. The comparison of the three levels of problem
solving: routine behavior, limited problem solving, and extended problem solving.
ROUTINE RESPONSE BEHAVIOR- or habitual response involves very little information search or cognitive
processing because the decision is almost automatic. This is typical for low price, frequently purchased
products where consumer involvement is low. Amount of effort that the consumers exert in the
problem solving tends to decrease over time as they learn more about a product strategy and gain
experience through consumption.
LIMITED PROBLEM SOLVING- consumer have low involvement. consumer willing to exert some time
and effort to ensure a good choice.
EXTENDED PROBLEM SOLVING- most associated with high priced products that are purchased
infrequently. Consumer s are highly involved because of the price and the risk of making a bad choice,
and they exert a good ideal time and effort.
ORGANIZATIONAL BUYER BEHAVIOR
- This is much more structured and formal in comparison to the individual buying process.
CHARACTERISTIC OF ORGANIZATIONAL BUYING
-LARGER VOLUME PURCHASE- organizational buyers usually purchase in large volumes.
-DERIVED DEMAND- the demand for the organization is derived from the demand for consumer
products.

-MORE EMPHASIS ON SPECIFICATIONS AND SERVICES- the products in organization markets tend to be
more technical in nature, and buyers are more concerned about specifications and service after sale.
-PROFESSIONAL BUYERS AND MORE NEGOTIATION- organization buyers tend to be professionals with
extensive knowledge of the product.
-

REPEAT BUSINESS- one of the benefits of selling organizations is that they tend to become more
repeat purchasers.

MULTIPLE BUYERS- often, more one individual is involved in the buying process and making the
ultimate purchase decision for organizations. A buying center or buying unit is a group of people
that influences buying decisions for organization.

MEMBERS OF THE BUYING UNIT

USERS- people in firm who are actually use the product.
INFLUENCERS- people who have some expertise in the product area and help defined the necessary
specifications.
BUYERS- people who have formal authority and responsibility for making the purchase decision.
DECIDERS- people who have the authority to select or approve a supplier. They are often top executives
within the organization who have the formal power to make decisions.
GATEKEEPERS- the individual control the flow of information that is relevant to a purchase decision.
FACTORS THAT INFLUENCE ORGANIZATIONAL BUYING
Most of the factors that affect consumers buying behavior are also relevant to organizational buying
behavior. This includes external influences such as environmental factors, reference group and cultural
differences.