What factors influence changes in consumer behavior?

Answer 1

CONSUMER BEHAVIOR AND FACTOR AFFECTING

Consumer behavior refers to the selection, purchase and consumption of goods and services for the satisfaction of their wants:

• Initially the consumer tries to find what commodities he would like to consume.
• Then he selects only those commodities that promise greater utility.
• Then consumer makes an estimate of the available money which he can spend.
• Lastly, the consumer analyzes the prevailing prices of commodities and takes the decision about the commodities he should consume.

Meanwhile, there are various other factors influencing the purchases of consumer such as:

• Social
• Cultural
• Personal
• Psychological

Answer 2

Personal needs, economics, marketing/branding/advertising, climate/weather, culture/society, peer pressure, aspirations, opportunity i.e. choice and availability of consumer goods/services, leisure time, commitments, personal taste, ethics/morality/religion, disposable income and discretionary spending , age, sex of consumer, family responsibilities, awareness of health issues. There are overlapping and 'counter' factors. The consumer may be severely constrained by some, and/or strongly influenced by others. Desire is infinite, resources are finite. Need is the first and fundamental factor, knowledge/awareness is perhaps a close second, availablity could be the third, and susceptability to motivators of desire might be a fourth yet significant key factor!

Answer 3

Objective factors

(1) Income:-

Income is the most important factor which determines the consumption expenditure in a society. The greater the level of disposable income, the higher is the consumption expenditure with a fall in income, the consumption demand of household goes down.

(2) Distribution of income:

Consumption function depends on the way in which the income is distributed. Greater the inequality-in income distribution, lower will be the propensity to consume, greater the equality in income distribution, higher will be the propensity to consume. An equal distribution of income will raise consumption function because the poor people will increase their consumption expenditure more than the expenditure of the rich.

(3) Wage level:

If the wage rate arises, the consumption function shifts upward. If the rise in price level is more in proportionate to the rise in wage, the real wage will fall and consumption function will shift downward.

(4) Rate of interest:

A significant rise in interest rate will induce people to consume less and save more in order to gain from the higher rate interest. On the contrary, an increase in tin- interest rate may diminish investment and reduce income. Will the fall in income saving falls even at a higher rate of interest.

(5) Holding of liquid assets:

The consumption function also influenced by the holding of liquid assets, (Govt, bond, cash) When people have more liquid assets, they will spend more out of their current income and that their propensity to consume will increase. An increase in the real value of there assets will raise consumption expenditure.

(6) Changes in expectation:

Changes in future expectation also affect the consumption function. Expectation of emergency and fear of shortage of essential goods will induce people to purchase the goods much in excess of their current needs. This will shift the consumption upward.

(7) Wind fall gains and losses:

Windfall gains tend to arise the propensity to consume while widespread losses will shift the consumption function downward.

(8) Fiscal policy:

Heavy indirect taxation, rationing and price control adversely affect the propensity to consume. Progressive tax shifts the consumption function upward by bringing about more equitable distribution of income.

Subjective factors:

Subjective factors are indigenous or internal to economic system subjective factors determine the form of consumption function.

(i) People save to face the unforeseen contingencies such as Illness, unemployed, accidents etc.

(ii) People are induced to save because they want to provide for the future needs, i.e. education of the children, marriages of the children etc.

(iii) To possess power or to get higher social or political status.

(iv) People are motivated to save so that they can accumulate large wealth which will increase their social states.

(v) To enjoy an enlarged future income by investing funds of current income.

Answer 4

personal motives, attitudes, and decision-making abilities guide our consumption behavior. At the same time, our families, cultural background, the ads we see on television, and the sites we visit on the internet

Answer 5

1)Culture

2)Religion

3)Economic consideration

4)Education

5)Personal view

6)Family influence

Answer 6

Factors that influence changes in consumer behavior include economic conditions, social influences, cultural factors, marketing strategies, and technological advancements. Additionally, personal preferences, lifestyle changes, and Demographics can also play a significant role in shaping consumer behavior.

Answer 7

Culture

Social

Personal

Psychological