Factors affecting customer decision making

1. Demographic

• Gender, Income, Age, Marital status etc.
• Identification of who is responsible for the decision making or buying and who is the ultimate consumer.

1. Psychological Factors – Intrinsic or inner aspect of an individual
   • Motives – Retailers are required to determine the need level of the consumers to have a sound understanding of what motivates consumer preference to a particular retail format or store. Maslow’s need hierarchy relates to this aspect.
   • Perception – The process of selecting, organizing and interpreting information inputs to produce meaning. Recognition, selection, organization and interpretation of a particular stimuli is a highly individual process subject to individual needs, values and expectations. The same stimulus maybe perceived differently by different set of customers based on their unique personal and situational context.
   • Learning – The process through which a relatively permanent change in behaviour results from the consequences of past behaviour. There are various theories regarding the process involved in causing such a permanent change in behaviour. Some of these theories are:
     • Classical Conditioning results from the association of two stimuli in the environment that work together to create an unconditioned response. The two stimuli are referred to as conditioned and unconditioned stimuli. The repeated association of conditioned and unconditioned stimuli may lead the conditioned stimulus to produce the unconditioned response. Eg. Self Service (Conditioned stimulus) lead to Low price and fast service (Unconditioned stimulus).
     • Operant conditioning occurs when a person learns to associate its behaviour with the consequences or results of the behaviour. There are positive and negative type of operant conditioning. Eg. A person may shop from a reputed branded store and receives appreciation from his peers.
     • Vicarious Learning is defined as change in behaviour due to experience of others which could be a model, celebrity or member of family or peer group. Eg. Using celebrity for brand advertisements
     • Mere exposure effect, in case of retailing may occur in case of development of an emotional preference for previously unfamiliar retail outlet because of frequent exposure to that store from personal or impersonal source. Eg. Name of a shop heard frequently through radio or TV broadcasts.

According to all these theories, a permanent change in behaviour is caused by information and experience. To change customers’ shopping behaviour, retailers need to provide them with new or modified information and experience about nature of store, product profile, shopping environment etc.

• Attitude – Attitude is consumers’ predisposition to respond favourably or unfavourably to an element of retail mix or the retail mix in its entirety. It comprise of knowledge and positive and negative aspect about an object or activity. Individual learns attitude through experience and interaction with others. Consumers’ personality and lifestyle influence their attitude and attitude changes.
• Personality – Refers to internal traits and behaviour that make a person unique. Uniqueness is derived from heredity and personal experience. Traits affect the way people behave. Marketers try to match the store image with perceived image of customers.

1. Environmental Factors - It covers all physical objects ( goods and outlets), spatial relationships (location of the shop) and social factors (peer group, social class etc). Environment can be analysed at Micro and Macro level.

1. Social Class – Classification of members of society into hierarchy by variables such as education, occupation, wealth etc. Upper Elite Class, Lower Upper Class, Upper Middle Class, Middle Class, Working Class, Lower Class.
2. Culture and Sub-Culture – Set of values, ideas and attitudes that are acceptable by a homogeneous group of people and transmitted to the next generation. Culture decides what people wear, eat, where to travel, to shop etc.
3. Lifestyle – Refers to an individual’s mode of living as identified by his or her activities interest or opinions. 

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