Consumer behavior—or how people buy and use goods and services—is a rich field of psychological research, particularly for companies trying to sell products to as many potential customers as possible. Since what people buy—and why they buy it—impacts many different facets of their lives, research into consumer behavior ties together several key psychological issues. These include communication (How do different people respond to advertising and marketing?), identity (Do our purchases reveal our personality?), social status, decision-making, and mental and physical health.
Why Consumer Behavior Matters
Corporations, political campaigns, and nonprofit organizations all consult findings about consumer behavior to determine how best to market products, candidates, or issues. In some cases, they accomplish this by manipulating people's fears, their least-healthy habits, or their worst tendencies. And consumers themselves can be their own worst enemy, making rash purchasing decisions based on anxiety, faulty logic, or a fleeting desire for social status. But consumers aren’t powerless: Learning more about the different strategies companies employ, as well as the explanations for people's often confusing purchasing decisions, can help individuals more consciously decide what, why, and whether to buy.
Why do marketers study consumer behavior?
In developed countries, people spend only a portion of their money on things they need to survive, and the rest on non-essentials. Purchasing decisions based on want, rather than need, aren’t always rational; instead, they are influenced by personality, emotion, and trends. To keep up, marketers continuously investigate how individuals and groups make buying choices and respond to marketing techniques.
How do politicians use marketing research in campaigns?
Political marketing is, in many ways, similar to product marketing: it plays on emotions and people’s desire for compelling stories, rather than pure rationality, and aims to condense complex issues into short, memorable soundbites. Smart politicians use marketing research to tailor their messages, connect with voters who share their values, and counter their opponents’ narrative.
Why are people drawn to fads?
Humans are social animals. We rely on a group to survive and are evolutionarily driven to follow the crowd. To learn what is “correct,” we look to other people—a heuristic known as the principle of social proof. Fads are born because a product’s popularity is assumed to signal value, which further bolsters its popularity.
How is consumer behavior affected by natural disasters?
Natural or man-made disasters can trigger panic buying or hoarding behaviors, either before the disaster or after it has passed, usually of products deemed necessary for survival. In the weeks and months after a disaster, some evidence suggests that “hedonic purchases”—such as alcohol or unhealthy foods—rise as victims of the disaster attempt to cope.
How does consumer behavior change during a recession?
After large-scale recessions, such as the Great Recession of 2007 to 2009, consumers typically become more frugal and sensitive to price. These changes become permanent for some consumers, especially for those who were particularly hard-hit; for others, behaviors revert back to baseline once the economy has stabilized and any personal financial challenges have been overcome.
Will the COVID-19 pandemic change consumer behavior?
It already has. Consumers are buying less, shifting more purchasing online, and spending less on travel and in-person events. Whether those changes will endure, though, is unclear. Some experts predict that most people will revert back to old habits post-COVID; a small few, it’s predicted, will become more frugal and less materialistic in the long term.
The Psychology of Buying and Spending
Much of what people purchase—like food, shelter, or medical care—is necessary for their health and security. But what compels someone to buy things that aren’t necessary, like the latest iPhone or an impractical pair of high-heeled shoes? The study of why people make such purchases—which are often irrational—is closely related to the field of behavioral economics, which examines why people deviate from the most rational choice available.
Behavioral economists, marketing professionals, and psychologists have concluded that extraneous purchases may be driven by a need to display one’s social status, or in response to an emotion like sadness or boredom. In other instances, retailers may successfully manipulate the desire for a “good deal” by making an unneeded item seem especially affordable or portraying it as being in limited supply.
Learning how to recognize common manipulation tactics may help individuals and families save money—and stress—in the long term.
Why does buying things feel good?
Many human behaviors are driven by reward. Purchasing a new gadget or item of clothing triggers a surge of dopamine, which creates pleasurable feelings. Though the glow of a new purchase may not last long, the desire to once again be rewarded with a burst of dopamine drives us to buy more.
Does buying more things make you happy in the long run?
It depends. Some research suggests that experiential purchases like vacations bring more happiness than material goods, in both the short- and long-term. However, this rule may not apply universally. For lower-income people, spending on material goods that meet basic needs is often more conducive to happiness, especially if the items remain useful over time.
Why do I buy things I don’t need?
Consumers are often irrational. Instead of only buying things they need, they also buy unnecessary items—often because the purchase makes them feel good, soothes negative emotions, or boosts social status. A consumer may also buy something that has been framed by a marketer as especially attractive; “buy one get one free” offers, for instance, are hard to resist and encourage people to buy things they don’t need.
Why do I buy things that are bad for me?
Certain buying impulses can ultimately be harmful, but they often serve a psychological purpose. Purchasing unhealthy foods or excessive alcohol, for instance, can temporarily offer comfort from painful emotions; buying a new pair of designer jeans might break the bank, but can also help the purchaser prominently display their social status.
How can I stop buying things that are bad for me?
Dissonant buying impulses—or purchases that conflict with one’s resources, needs, and goals—can be difficult to manage, especially when they’re driven by negative emotions. Learning emotional regulation skills—such as naming any negative feelings, redirecting attention to productive activities, or practicing mindfulness—or creating physical “barriers” (such as freezing credit cards so they can’t be used impulsively) can help.
How does anxiety affect what we buy?
Anxiety is known to spur impulsive purchases—in part because buying things offers a sense of control and can be used to self-soothe. Anxiety can also lead someone to prioritize products that promote safety or a sense of security—such as toilet paper, hand sanitizer, or canned goods.
What causes panic buying?
In a word, panic. Anxiety and fear make the world appear frightening and senseless; stocking up on certain items like toilet paper is one way to restore a feeling of control. Panic buying is also driven in part by herd mentality; if people see that others are hoarding hand sanitizer, they assume they should too.
What motivates impulse purchases?
Impulse buying may be motivated by negative emotions, as purchasing something often temporarily boosts mood. It may also be driven by personality—the naturally more impulsive or less conscientious may be driven to more frequently purchase items on a whim. Marketing strategies, like advertising products as “limited time offers,” can increase the tendency to impulse buy.
How Advertising and Marketing Work
Two vast, interrelated industries—advertising and marketing—are dedicated to introducing people to products and convincing them to make purchases.
Since the public’s desires tend to change over time, however, what works in one product’s campaign won’t necessarily work in another’s. To adapt messages for a fickle audience, advertisers employ focus groups, market research, and psychological studies to better understand what compels people to commit to purchases or become loyal to brands.
Everyone has heard the advertising maxim “sex sells,” for instance—but exactly what, when, and why sex can be used to successfully market a product is the subject of much debate among ad makers and behavioral researchers. Recently, some evidence has suggested that pitches to the perceived “lowest common denominator” may actually inspire consumer backlash.
How does marketing influence what we buy?
Marketers regularly use psychology to convince consumers to buy. Some common strategies include classical conditioning—training consumers to associate a product with certain cues through repeated exposure—creating a scarcity mindset (suggesting that a product only exists in limited quantities), or employing the principle of social proof to imply that everyone is buying a product—so you should, too.
Do marketers take advantage of how the human brain works?
Marketers often exploit cognitive shortcuts, known as heuristics, to convince consumers to make purchases. One example of this is the anchoring bias, or the brain’s tendency to rely heavily on the first piece of information it learns. A savvy marketer may say, for instance, that a car costs $20,000, then quickly offer to take $1,000 off. Since the consumer “anchored” on to the initial $20,000 price tag, a $1,000 discount seems substantial and the consumer may leap at the offer. But if the car was truly worth $15,000, it would still be overpriced, even with the supposed discount factored in.
Why do some ads succeed while others fail?
Renowned marketing researcher Robert Cialdini found that advertisements are perceived very differently depending on consumers’ state of mind. Fearful consumers, for instance, are more likely to respond negatively to ads that promote standing out from the crowd. However, consumers in a positive state of mind respond well to ads encouraging uniqueness; thus, timing and context are often critical to an ad’s success.
Why are “limited time offers” so appealing?
Limited time offers trigger a sense of urgency and force consumers to make quick decisions. A product only being available “for a limited time” (either at all or at a lower price) creates a sense of scarcity. Scarcity—whether real or manufactured—increases a product’s perceived value, heightening the chance of an impulsive purchase.
Why are so many ads sexual?
Because the majority of humans desire and seek out sex, sexual stimuli naturally capture attention; thus, marketers often make use of attractive models or erotic imagery simply to make consumers take notice. Being “primed” with erotic content can change behavior, too; research has found that sexual priming can lead consumers to make riskier financial choices.
Do sexual ads really work?
The effectiveness of sex in advertising likely depends on several factors, including gender and context. Women appear to respond more negatively to sexual ads than men, research finds. When the product is unrelated to sex, using erotic imagery in ads can trigger dissonance and trigger negative feelings about the brand.
How to Appeal to Consumers
In a crowded marketplace, anyone hoping to sell a product or service will need to stand out. To succeed at this, marketers often turn to psychological research to identify and target their most likely consumers, grab their attention, and convince them that a product will fill a specific need or otherwise better their life. Aiming to inform and persuade consumers—rather than manipulate them—is widely considered to be the most ethical approach, and is likely to help build brand loyalty more than cheap marketing tricks.
How can I persuade people to buy my product?
Both the message and the messenger matter for persuasion. Marketing researcher Robert Cialdini has found that first impressions matter greatly—a company (or individual) that appears trustworthy and warm is more likely to gain their audience’s trust. Cialdini also coined the term “pre-suasion” to argue that marketers must grab consumers’ attention before making an appeal—by offering free samples, for instance, or couching a product pitch in an amusing commercial.
How can I make my marketing campaign more effective?
Turning to psychology can help. Appealing to consumers’ emotions and desire for connection with others are often powerful marketing strategies, as long as they’re not interpreted by consumers as manipulative. Introducing novelty, too, can be effective—research shows that consumers respond to surprising ads, humorous ads, or even “experiential” ads (such as parties or events designed to promote a product). Repeating an ad enough times so that a consumer remembers it—but not so much that they become frustrated—is also a critical part of any effective ad campaign.
How can I introduce a new product or idea?
Humans are creatures of habit and slow to adapt to change. To spread a new message or idea, advertisers have learned that simplicity is key; overcomplicated appeals can be frustrating or confusing for consumers. Summarizing the benefits of a new product, service, or political campaign in pithy, memorable phrases or images—and then repeating the message as often as possible—is more likely to grab consumers' attention and convince them to take a chance on a new object or idea.
How can marketers sell products ethically?
Customers trust businesses that are honest with them, sharing accurate information about everything from the benefits of using their products to how they run their business. Other guidelines for ethical marketing include clearly distinguishing ads from other types of content (news, entertainment, etc.), prioritizing the interests of children or other vulnerable groups (by not marketing unhealthy products to children, for example), avoiding negative stereotypes, and respecting consumers’ intelligence and privacy.