What roles do personal or demographic factors play in consumer/customer decision to purchase product or service?

Rational consumer behavior has been a subject of intensive research and modeling, in academic and industrial circles. It is critical for companies to understand how consumers make their choices. With operational and profit margins forever slimming, for-profit companies are increasingly relying on finding unique compatitive advantages, to stay afloat. Understanding consumer behavior is imperative in succeeding on this path.

There are 5 basic needs believed to be satisfiable by purchasing a product (Arbuckle 2019). Physiological needs, safety needs, love and belonging needs, esteem needs, and self-actualization needs. This idea has been repeated by numerous researchers, who have strived to explain what needs are satisfied, by making purchases (Kaufman 2010). Each of these five is a personal factor.

Additional personal factors are: price sensitivity, cost / benefit analysis on the individual level, and regulations and legality, to name a few. An example of how regulations impact personal buying decisions is: I recently bought a Huawei phone, despite that I’m well aware that Huawei is banned in United States, and support and security patches for its phones may not be available. The regulation has been a consideration, but has not been an influence, in that purchase decision.

Demographic factors affect purchasing decisions. Only specific good and services are available in specific demographic areas – and this (un)availability affects purchasing decisions. Sometimes, a product is priced very differently based on demographics. For example, Brasil imposts more than 100% taxes on imported cars. This definitely affects consumer behavior: fewer people can afford a car in Brasil.

Demographics affect how an individual thinks of social status. This plugs into the “love and belonging needs” as well as “esteem needs,” indirectly. For example, North American consumers are strongly insentivized to buy Apple, not Android cellphones, because of the perception of higher quality by the North American demographic.

In conclusion, both personal and demographic factors contribute to buying decisions, on individual and institutional level, across the entire market.


Arbuckle, Dani (2019) What Are Needs From a Marketing Perspective? Retrieved from https://smallbusiness.chron.com/needs-marketing-perspective-47599.html

Kaufman, Josh. The Personal MBA: Master the Art of Business. New York: Penguin Group

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