Psychological Factors Affecting Consumer Behavior

It has been stated that â€Å"marketing management rests upon some conception or other of how consumers behave (Foxall 2001).† I will proceed to demonstrate, beginning with an overview of consumer behavior as it relates to the psychological factors that cause one to comply with a given request, through to an examination of the various trends in marketing which are reflective of consumers changing demands as they respond to world events and societal evolution, why it is vital that marketers understand and evaluate consumer behavior. I will also demonstrate, through the use of examples, how various organizations are employing specific strategies based upon their understanding of consumer behavior to produce record growth and profitability in the marketplace. Psychological Factors Affecting Consumer Behavior As one social psychologist has termed the â€Å"weapons of influence,† there appear to be certain driving forces in human nature, or automatic psychological triggers, that propel individuals to respond in predictable ways to given requests (Cialdini 1993, p.3). One such force is the principle of Reciprocation, whereby one feels obligated to return a favor that has been provided him (Cialdini 1993, p.17). This principle is most clearly evidenced by the consumer's natural tendency to buy a product from someone after he has been extended a kindness or favor from him. It has been demonstrated that this psychological principle of the pressure to return a favor with a favor is so strong, that it even surpasses the need to like the individual extending the favor (Cialdini 1993, p.21). One example of the rule of reciprocation at work has been evidenced by the wildly successful marketing strategy of the Hare Krishna Society, an eastern religious sect known for its solicitation of funds from passersby in public places (Cialdini 1993, p.22). Having been mostly unsuccessful at raising funds through traditional methods of chanting on the streets while begging for donations, the group devised a brilliant strategy that essentially invoked the principles of reciprocation (Cialdini 1993, p.22). As an individual would pass by, a Society member, rather than ask for a donation initially, would hand the unsuspecting person a flower, offering it as a free gift from the Society and not accepting its return under any circumstances. Only then would the Society member ask for a donation (Cialdini 1993, p.22). The response was overwhelming, and a testament to the extraordinary power of reciprocation. The individual, aware that he had been given a gift and feeling the pressure to reciprocate, was often compelled to respond with a donation (Cialdini 1993, p.24). Another powerful psychological principle in a marketer's arsenal of tools is the commitment and consistency factor (Cialdini 1993, p. 37). It has been discovered that people feel a very powerful drive to be consistent once they have committed themselves to something (Cialdini 1993, p. 37). An example of this principle at play is witnessed through the offering of testimonial contests by such big-name companies as Proctor & Gamble and General Foods (Cialdini 1993, p.39). In these contests, the companies ask participants to write short essays, often for large prizes, which include praise for the companies' products. Usually no purchase is required; what is more important is that by forcing potential customers to record, in writing, praise for the company's product, the company relies on the psychological drive of the individual to believe what he has written (Cialdini 1993, p 40). Apart from the psychological triggers that persuade individuals to comply with given requests, marketers must seek to understand the equally intriguing psychological processes at work in the unconscious mind that cause consumers to choose one particular course of action, or product, over another (Zaltman 2003, p.53). One example of such an unconscious process can be seen in the overwhelming tendency of customers to choose a product offered for $9.99 over an identical one offered for $10.00 (Zaltman 2003, p64). Consumer Need: Practicality Or Emotionality? It has been stated that, contrary to popular belief, people do not so much buy things they don't need, but that the need is often based more upon emotions and feelings than it is upon concrete physical necessity (Danziger 2004, p.1). Though the gross domestic product in the United States has largely been generated by consumer spending since 1929-a full 60 to 70 percent of it- â€Å"the way consumers [generally] spend their money has changed significantly over the past 70 years (Danziger 2004, p.3).† It is claimed that, â€Å"today, over 40 percent of consumer spending is discretionary†¦ based on wants, not needs (Danziger 2004, p.4).† Changing Trends And Their Affect On The Marketplace Another important factor in predicting consumer behavior involves changing trends in the marketplace. Marketers must be ever vigilant to customers' changing needs as society evolves and new events cause consumers' wants and needs to adjust accordingly. A clear example of this is witnessed by the fairly recent change in menu selections offered by fast-food chains such as McDonald's and Burger King. Responding to a concern over the rising tide of obesity in the U.S. and around the world and consumers' increasing desire to maintain healthier lifestyles, such fast-food conglomerates have been adding healthier choices to their menu selections which includes salads, apple slices instead of French fries, and so on (Plunkett Research 2005). Another example of a change in consumer behavior was reflected in consumers' response to the tragic events of September 11, 2001. The airline industry, facing huge setbacks as a result of consumers' new reluctance to travel by air for fear of another terrorist attack, was forced to undergo massive restructurings to accommodate the new environment imposed upon them (Plunkett Research 2005). Consumers, wishing to reconcile their fears and need to reduce expenditures with the desire to continue enjoying and experiencing life as usual, were searching for ways-and bargains- to enable them to do this. Hence, there began a shift in the airline industry away from luxury to economy, as discount airlines began setting the new standard for air travel by luring passengers with price, not perks (Plunkett Research 2005). With Southwest Airlines and JetBlue leading the pack, these airlines have achieved success and profitability responding to consumers' changed needs, mainly by cutting maintenance, operating and labor costs, such as by offering a single-plane platform and an open-seating policy (Plunkett Research 2005). In the meantime, of course, as full-service airlines have struggled to compete with the burgeoning success of the discount model, some, like Delta, have begun developing their own low-cost models, which manage to keep costs down by hiring younger flight crews. Another shining example of marketers' need to understand and predict consumer behavior comes in the form of the relatively recent phenomenon of online delivery and piracy-or theft-of copyrighted music and video files ((Plunkett Research 2005). Forced to adapt to this trend following a 2002-2003 decline in music revenues, music companies have been seeking ways to safeguard their files â€Å"from illegal download and distribution,† as well as to capitalize on the internet craze by finding methods by which to distribute their files through legal means via the internet (Plunkett Research 2005).† Responding to this need, iTunes Music Store, a digital service provided by Apple Computer, Inc.,was launched in 2003, and it offers music files for download over the internet (Plunkett Research 2005). On a different front, automobile manufacturers have been responding to consumers' rising concern over escalating gas prices, which reached a record-high in September 2005 of $3.01 per gallon (Plunkett Research 2005). After suffering huge losses on their lines of minivans, pickups and sport utility vehicles (SUVs), the â€Å"big three† U.S. manufacturers, Ford, GM and Chrysler, are focusing on raising fuel efficiency for these bigger models (Plunkett Research 2005). In addition, as foreign car companies like Toyota, Honda, and BMW have continued to steal sales away from U.S. automobile manufacturers, partially due to a reputation for producing higher quality cars, these American manufacturers have been responding by designing new product lines, such as the hugely successful Chysler 300C, with its â€Å"eye-catching grill and boxy, elegant design (Plunkett Research 2005).† In sum, whether responding to a consumer's instinctual drives, which dictate that he or she will likely react in a certain way to a given stimulus, or evaluating the marketplace and consumer behavior based on world events and changing needs, marketing management does indeed rest on a conception of how consumers will behave, now and in the future.