(BMB MK01) Unit 2: Psychological factors

Psychological Factors 

Psychological factors are the internal mental processes that affect how a consumer thinks, feels, and makes buying decisions. In simple words: “It’s what’s happening inside the mind of a buyer.”

The main psychological factors are:

Perception

Perception is how a person sees, interprets, and understands information about a product or service.

Different people can perceive the same product differently. Example: Two people see an ad for a luxury car: Person A sees it as status and prestige. Person B sees it as expensive and unnecessary.

Marketing Use: Marketers try to create positive perceptions through ads, packaging, and branding. Example: Apple creates perception of innovation and premium quality.

Learning

Learning is the change in a person’s behavior caused by experience, practice, or information. Example :A person buys a brand of toothpaste and likes it → keeps buying it → develops a habit. Trying a new app or software → learns to use it → becomes loyal.

Marketing Use: Marketers use trial offers, samples, loyalty programs to help customers learn and adopt their product.

Motivation

Motivation is the inner drive that pushes a person to fulfill a need or goal. It answers the question: “Why do people buy something?” Example: A hungry person buys food → need for hunger. A fashion-conscious person buys branded clothes → need for status and recognition.

Marketing Use: Marketers design products and ads that appeal to people’s motives. Example: Gym ads target the need for fitness and health, luxury cars target the need for prestige.

Attitude Formation and Change

Attitude = A person’s learned tendency to respond positively or negatively toward a product, brand, or idea. It is formed through experience, family influence, friends, and ads. Attitude Change: Sometimes marketers try to change people’s attitudes toward a brand or product. Example: Initially, a person may dislike electric cars → after seeing ads and benefits → starts liking them. A student may dislike reading books → after peer influence and motivation → develops a positive attitude.

Marketing Use: Marketers use persuasive advertising, influencer endorsements, and product education to shape or chan ge attitudes.

Summary Table

Factor	Meaning (Simple)	Example	Marketing Use
Perception	How a person interprets information	Luxury car seen as status vs expensive	Positive ads, packaging
Learning	Change in behavior through experience	Liking a toothpaste brand after use	Free samples, loyalty programs
Motivation	Inner drive to satisfy needs	Buying gym membership for fitness	Ads targeting specific motives
Attitude Formation & Change	Learned tendency to like/dislike	Disliking electric cars → liking them	Persuasive advertising, influencer marketing

Personality 

Personality means the set of characteristics or qualities that make a person different from others. It includes the way a person thinks, behaves, and reacts in different situations. Example: Some people are calm and introverted (like to stay quiet), While others are energetic and extroverted (like to talk and meet people). 

In Marketing: Marketers study personality to design products that fit customer types. Example:A sporty personality person may prefer Nike or Adidas. A luxury-loving personality person may prefer Rolex or Mercedes.

Lifestyle

Lifestyle refers to how a person lives his or her life — including habits, interests, opinions, and daily activities. In simple terms: It shows what a person does in his free time, what he values, and what things he considers important. Example: A person who lives a healthy lifestyle may spend money on gym memberships, yoga mats, and organic food. A tech-savvy lifestyle person may buy gadgets, smartwatches, and mobile accessories.

In Marketing: Marketers divide people based on lifestyle to target them better.

Example: "Fit India" campaigns target people who value fitness. "Luxury travel packages" target people who value comfort and status.

Personal Factors

These are individual characteristics that influence buying behavior.

Demographics

Demographics are the basic statistical details about people such as: Age, Gender, Education, Family size, Religion, Location Example: Kids like chocolates and toys, Teenagers prefer fashionable clothes, Older people prefer comfort-based products like health supplements or reading glasses.

In Marketing: Marketers use demographic data to identify their target audience. Example: A baby product company targets new parents aged 25–35.

Life Cycle Stage

A person’s needs and wants change at different stages of life. This is called the Family Life Cycle or Life Stage.

Common stages

• Bachelor (Single): spends on fun, fashion, gadgets.
• Married without children: spends on travel, household setup.
• Married with children: spends on school fees, groceries, family needs.
• Older couples: focus on health care, savings, and leisure.

In Marketing: Companies design products for each stage. Example: Insurance companies target new parents for child plans.

Occupation

A person’s job or profession affects what they buy and how they spend money. Example: A teacher might buy books and formal clothes.,A business executive might buy laptops, suits, and business-class travel, A laborer might focus on basic needs and durable goods.

In Marketing: Marketers segment customers by occupation to offer relevant products. Example: Banks design different loan schemes for salaried employees and self-employed people.

Income

Income means how much money a person earns — it decides their purchasing power (how much they can afford to buy).

Example:

• A low-income group person may buy value-for-money products.
• A high-income group person may prefer branded or luxury products.

In Marketing: Companies divide markets into income segments like low, middle, and high class. Example: Tata Nano targets low-income families. Audi and BMW target high-income professionals.

Factor	Meaning	Example	Marketing Use
Personality	Individual traits and behavior	Calm, energetic, ambitious	Helps design brand image (e.g., sporty brands)
Lifestyle	Way of living – habits, interests, opinions	Fitness lover, traveler	Target ads by lifestyle group
Demographics	Basic details like age, gender, education	Teen, adult, senior citizen	Identify target market
Life Cycle	Different family stages	Bachelor, married, parents	Product offerings by life stage
Occupation	Type of work or profession	Teacher, business owner	Custom marketing by job
Income	Level of earnings	Low, middle, high	Product pricing and brand positioning

Social Factors

Social factors are the people and groups around an individual that influence his or her buying decisions.

In simple words — “We don’t buy things alone; our family, friends, and society affect what we choose.”

There are mainly four key social factors: Family, Reference Groups, Roles, Status.

Family

Family is the most important social group that strongly influences a person’s behavior, values, and buying habits. Family members affect what we buy, how much we spend, and what brands we prefer. Example: Parents influence children’s education and food choices. Children influence family decisions like buying a smartphone or a car. A wife may decide on household products, while a husband may decide on financial products.

In Marketing: Marketers study who makes the decision in the family (Decision-Making Unit or DMU). Example: Ads for toys target both parents and children. Grocery brands show mothers as the key decision-makers.

Reference Groups

A reference group is any group of people that influences an individual’s attitudes or behavior — directly or indirectly. It gives a person a sense of belonging or comparison.

Types of Reference Groups

• Primary Group: Close and regular contact — e.g., friends, family, classmates, colleagues.
• Secondary Group: Less personal and more formal — e.g., professional associations, clubs.
• Aspirational Group: A group a person wishes to join — e.g., celebrities, influencers.
• Dissociative Group: A group a person does not want to be like — e.g., opposite lifestyle group.

Example: A teenager may buy branded shoes because his friends wear them (peer pressure). A person may follow influencers on Instagram to choose fashion styles (aspirational group).

In Marketing: Marketers use social proof and influencer marketing to affect purchase decisions. Example: Showing celebrities or influencers using a product creates trust and aspiration.

Roles

A role refers to the expected behavior a person has in a particular position or situation. Every person plays different roles in life — student, employee, parent, friend, etc. Each role has certain responsibilities and behaviors that influence what they buy. Example: A student buys books, stationery, and budget gadgets. An employee buys formal clothes and professional accessories. A parent buys household items and children’s products.

In Marketing: Marketers design different products for people playing different roles. Example: Banks offer student accounts, salary accounts, and retirement accounts for different roles.

Status

Status refers to the social position or rank a person holds in society, often based on income, education, or occupation. People often buy products that reflect or enhance their social status. Example: A person may buy a Rolex watch or Mercedes car to show prestige. Wearing branded clothes or using iPhones can signal higher social status.

In Marketing:Marketers use status appeal or prestige marketing to attract customers.Example: 

Luxury brands like Gucci, Rolex, and BMW market their products as symbols of success and respect.

Summary Table

Social Factor	Meaning (Simple)	Example	Marketing Use
Family	Members influencing buying habits	Parents buying education items for kids	Target family decision-makers
Reference Groups	People or groups we follow or compare with	Friends, influencers, celebs	Use influencer or peer marketing
Roles	Expected behavior in life positions	Student, parent, manager	Offer products based on life roles
Status	Social position or prestige level	Buying luxury car for recognition	Promote status-symbol brands

Cultural Factors

Cultural factors are the most basic and broad influences on consumer behaviour. They shape a person’s values, beliefs, habits, and lifestyle from childhood.

a. Culture

Culture means the shared values, customs, traditions, and beliefs of a group of people or society. It tells us what is right or wrong, acceptable or not, and what people prefer to buy or avoid. Example: In India, people prefer vegetarian food and buy items suitable for festivals like Diwali or Holi. In western countries, people prefer fast food and buy Christmas gifts.

In Marketing: Marketers adapt their products and advertisements to fit cultural values. Example: McDonald’s serves McAloo Tikki in India but Beef Burger in the USA.

b. Sub-Culture

A sub-culture is a smaller group within a culture that shares specific values or lifestyles. It can be based on region, religion, language, caste, or age group. Example: India has sub-cultures like Punjabi, Gujarati, Bengali, South Indian, etc. Youth sub-culture prefers trendy clothes and gadgets.

In Marketing: Marketers design region-specific campaigns. Example: Clothing brands make ethnic wear ads during regional festivals.

c. Cross-Cultural Consumer Behaviour

This means comparing consumer behaviour across different countries or cultures. Companies study how people in various nations think, shop, and use products. Example: In Japan, people value quality and compact size. In India, people value price and family-oriented products. In the USA, people value convenience and innovation.

In Marketing: Global brands like Coca-Cola or Samsung modify their marketing strategies based on local culture and consumer behaviour.

Consumer Involvement and Buying Decision Process

Consumer involvement means how much time, effort, and interest a buyer gives while choosing a product.

Types of Consumer Buying Decisions

Type	Meaning (in simple words)	Example	Involvement Level
Complex Buying Behaviour	Happens when the product is expensive or risky; buyer does deep research before buying.	Buying a car, house, or laptop	High involvement
Habitual Buying Behaviour	Buying same products regularly out of habit, not much thought involved.	Buying toothpaste, soap, milk	Low involvement
Variety-Seeking Buying Behaviour	Buyer switches brands for change or fun, not due to dissatisfaction.	Trying different chips or cold drinks	Low involvement but many brand changes

Buying Decision Process 

• Need Recognition: Realizing a need (e.g., “I need a new phone”).
• Information Search: Looking for options online, asking friends.
• Evaluation of Alternatives: Comparing brands, prices, features.
• Purchase Decision: Selecting and buying the product.
• Post-Purchase Behaviour: Feeling satisfied or regretting the decision.

Organizational Buying vs Individual Buying Behaviour

Basis	Individual Buying Behaviour	Organizational Buying Behaviour
Who Buys	Individual or family	Companies, institutions, government
Purpose	Personal or household use	Production, resale, or business use
Decision Process	Simple and emotional	Complex and logical
Quantity	Small	Large or bulk purchase
Decision Makers	One or few people	Buying committee or department
Brand Loyalty	Based on personal preference	Based on product quality, service, and relationship
Negotiation	Rare	Common and professional
Example	Buying a laptop for personal use	A company buying 100 laptops for employees

Summary Table

Concept	Meaning	Example
Culture	Shared values and traditions of society	Indian preference for vegetarian food
Sub-Culture	Smaller cultural group within a main culture	South Indian or Punjabi culture
Cross-Cultural Behaviour	Comparing consumer habits across countries	Americans prefer fast food, Indians prefer spicy meals
Complex Buying	Expensive purchase, deep research	Buying a car
Habitual Buying	Routine, low involvement	Buying toothpaste
Variety-Seeking Buying	Switch brands for change	Trying different chips
Organizational Buying	Businesses purchasing for work	Company buying raw materials
Individual Buying	Personal or family use	Buying clothes or mobile phone