Internal and external buying behaviour influencing factors

INTRODUCTION

This literature review is for assessment purposes and in partial fulfilment of the interdisciplinary project which includes the courses of Data Analysis, Marketing Research, Strategic Marketing and Consumer Behaviour. All information gathered for the purpose of this literature review was through scientific articles, scholarly book, empirical studies and websites.

The current literature review is targeted to the discussion of consumer behavior concepts along with internal and external factors that might influence this same matter. We will address some consumer behavior subjects and explore the beer market on the surface and further deepen our literature review by first analyzing internal factors that affect consumer behavior, followed by external factors which leads to a conclusion and reference page.

Consumer behavior is the study of several factors that might affect the decision-making process a consumer goes through in order to purchase a product or service. These are consisted by internal and external factors. Internal factors are the influence of psychographic aspects consumers obtain in the process of their human development. Furthermore, external factors are rather outside forces that affect and influence how consumers implement their logic.

Consumer behavior can be defined as the totality of consumers’ decisions with respect to the acquisition, consumption, and disposition of goods, services, time, and ideas by human decision-making units as mentioned by Hoyer and MacInnis (2010)

When speaking about consumer behavior, one automatically relates the subject with the actions and attitudes of a person, and perhaps even what drives them to consume a product/service.

The beer industry has contributed to markets worldwide and is known as the oldest recorded recipe in the world. Portugal is amongst the 11 largest beer producers in Europe and is the 7^th largest European exporter of the product which actively demonstrates that it is the ideal place for people who enjoy very palatable beer as seen in (Visitor, 2021).

CONSUMER BEHAVIOR

Taking into consideration the three consumer purchase stages:

Pre-purchase: being the experience consumer have before buying a product and what reasons lead for them to execute the purchasing action.

Purchase: being the actual purchasing actions consumers take in order to fulfill the need and want experienced in the prepurchase phase.

Post-purchase: being the experience the consumer has after acquiring the product and using it. This relates to ‘if the product satisfied consumer expectation,’ which all three stages are mentioned in Solomon et al (2013).

The consumer is perceived as a pivot point since he/she is the one to decide whether to consume or not and why as noted in Solomon et al (2013). This decision involves various factors such as demographics, lifestyle and/or cultural values.

When we speak about consumers, we speak of billions of people worldwide that have different opinions, preferences, needs and wants, and so factors that might affect their consumption are critical to analyze as marketeers and is crucial that marketeers are conscious of these differences.

It is now well known by marketeers that consumers do not purchase a good or service for only tangible attribute but in fact values and principles are significant driving forces that affect consumer preference and consumption, this of which is cited in Solomon et al (2013).

This realization does not invalidate the literal function each product has, as they are essential in their individual ways – but there is more to consumer preferences than just the literal function of a product. Preferring a specific brand because they simply follow in accordance with one’s alignments and values is the reason why consumer preferences go beyond the surface of tangible attributes and literal functions said by Solomon et al.

Some of the reasons that explain our relationships with brands and products are essentially, identity establishment, a link with own timeline, dependence, and passion. This also influences the way marketeers choose to target their public through advertisement.

As consumers need reassurance of the quality and safety of products and services, a more scientific approach (backed with factual information) would be one of the necessary routes but other times we see a more emotional approach (emotive cues) make a substantial impact that, in turn would make the consumer feel warmth, passion, and a strong emotion in connection to the brand or product as noted in Solomon et al (2013). For example, in regards to the beer market, Craft beer has an artisanal brewing method which not only gives it a unique selling point but also allows the consumer to have more than just the tangible product, it allows the consumer to indulge in an experience as mentioned by Williams & Barretta, (2018).

As we note, through the consuming process there are various factors that influence our decisions namely internal factors and external factors

INTERNAL FACTORS

Internal factors are factors that lie within a consumer that plays a role in the decision making of purchasing a product or service. The internal factors that play a role in consumer decision making are:

• Perception

• Learning

• Memory

• Motives

• Personality

• Emotions

• Attitudes

All of which relate mostly to the psychological aspects in each and every consumer as mentioned in Solomon et al.

It is widely known that consumers will be more inclined to buy a product that they can relate to in regards to their norms in some way which motivates marketers to target products to internal factors of consumers such as family and attitudes, to name a few as said by Tiwari, (2021).

In regards to consumers perception, it is a significant factor in which they absorb the environment around them. A consumers perception can possibly be made up of the response from the consumer in regards to the stimuli that marketeers expose them to, cited in in Solomon et al (2013).

Being exposed to content such as advertisements and products are constant in the day to day of each and every consumer and thus has become such a normality that consumers don’t even note it anymore, as cited in in Solomon et al (2013). However, as stated by Solomon et al, the truth is that there is in fact a constant influence and somewhat pressure towards consumers regarding their consumption of a targeted product.

Our sensation, known as sight, sound, smell, tastes and textures, is the immediate response we have to this type of information, but perception is how that information is organized in our heads, such that consumers have different priorities and points of view, cited in in Solomon et al (2013).

As stated by Kim and Chintagunta (2012), consumers expect to feel relaxed when consuming beer. With this in mind, we can’t forget that in Portugal, the social interaction is of a significant level and beer is also consumed in these social contexts, being it mainly friends, family or to simply socialize and celebrate as McCluskey and Shreay, (2011), mentioned.

This relates to the perception of the consumer and learning as they grew up in the given culture, this is familiar to Portuguese beer consumers.

However, we can imagine that in this scenario, drinking, and the amount consumers drink can be influenced by their company to a certain extent. This happens as there is usually approval seeking or intentions of impressing from the part of consumers which is said by Melo et al., (2010), which as a whole can be referred to as social pressure, that could be caused by the emotion of being afraid and left out of a circle of friends.

When producing beer, there is a segmentation almost automatically done, namely:

• Product loyalty

• Familiarity

• Product image

• Perceived quality

• Value for money

• Purchase intention and

• Willingness to pay, stated by Calvo-Porral et al (2018).

As the existence of there being a similar way of perceiving the product is present, this additionally implies morals and aesthetic principles are also shared. This is one of the factors that contributes to the significance of packaging. An example of this is Super Bock

Additionally, these factorial segmentations relate to the involvement from the parts of the consumer. This means there is a variation regarding where consumption is preferred that range from consumers who are more likely to get involved in the consumption of beer to those who don’t even think about doing so or with minimal involvement. Consequently, the assumption we make is that consumers with high involvement will seek the product more and show more interest for it in comparison to the consumers with low involvement. The inovolvement of consumers is dependent on the perception regarding different beer brands and formats.

A prior research was made in the brewing sector and it concluded that industrial beer has become very common in society and actually shows low involvement from the part of consumers and that it could be considered a commodity beverage category according to Gómez-Corona et al., (2016)., which links to the increase in market that craft beer has come to have.

One of the reasons for this is because craft beer focuses on the sensory attributes and provide the consumer with different flavors which eventually compensates the high prices when compared to conventional and mainstream beers which could eventually be considered by marketers as cited in Calvo-Porral et al., (2018), in which they don’t consider beer one single item, and yes diversify the options they provide consumers with.

As beer in consumed in social contexts, it symbolizes joy and good moments for the most part and according to Tierney-Jones (2011). “Beer unites people, inspires sociability and awakens a whole new dimension of sensory contemplation,” and with this statement Kleban and Nickerson (2012), argued that the "flavor revolution" is the main reason for craft beer consumption.

Being familiar with products and the ingredients is a deal maker for consumers, and with craft beer this information is made available and is a differentiator for beer consumers as a diversification of ingredients are used to tease consumer palate.

The amount of alcohol in beer concerns some consumers that have become more aware of the health benefits and consequences that come from drinking beer, this is according to Wright et al., (2008) which has led to the creation of beer with low alcohol content or none at all.

This information, usually incorporated in the packaging portrays the significance yet discrete importance packaging and labelling has on consumers as claimed by Peter Ayeni, Peter Ball, (2010).

One of the reasons for this is the hedonic behavior from the part of consumers that attribute this impact on their choices and preferences. This can also be influenced by how appealing the product is and what expectations consumers have in relation to the product which was mentioned by Sester et al., (2013). Alongside this, glass packaging is preferred among consumers as stated by Peter Ayeni, Peter Ball, (2010). This is because glass contributes to the good taste of beer.

Furthermore, there is an increasingly growing concern for the environment and glass is a re-usable material, which stimulates this preference as consumers relate this to their emotions, values and motives especially when relating to brands that stand for the same principles.

In regard to craft beer, this segmentation of the market has gained popularity as it benefited from the innovation, creativity, typicality and authenticity that marketeers have included in the manufacturing process. Consequently, this balances with adherence and acceptance since consumers don’t usually step out of their comfort zone to try new drinks as mentioned by Donadini & Porretta, (2017).

EXTERNAL FACTORS

External factors refer to shared values that can be culturally influenced or shared by smaller groups, subcultures (ethnic groups, teens and people from different parts of the country ) according to Solomon et al., (2013) which are not psychological as the internal factors, however the consumer is still affected by it.

Some external factors include:

• Culture

• Subculture

• Demographics

• Social status

• Reference Groups

• Family

• Marketing activities

Reference groups are defined as groups which a consumer refer to during the process of making a decision as mentioned by Sheu et al (2017). Reference groups are used in the consumer process because consumers compare themselves and want to match with their reference group where similar opinions are shared.

Situations in which fan bases are created, there is an undoubted comparison with the person being idolizes and therefore leads for consumers to want to do the same. This could be by dressing in the same style, having a similar haircut or even developing substance abuse related to alcohol because they refer back to it.

Demographics also affects the consumption with factors such as age, sex, income, marital status, etc. and this is according to to Solomon et al., (2013)– The age groups consumers are situated in impact how much beer they consume, and this applies to the other demographic factors aswell. Income is another vivid example as it affects the purchase power of consumers, which consequently affects the amount of beer they consume and purchase. When it comes to marital status, the title consumers hold of single, married, divorced or widowed have a significant impact on consumption as habits and behavior changes.

For example, when thinking of beer, there is usually an automatic assumption that it is targeted for a man, but nowadays this shows to be untrue.

Women are a sensitive target in the beer consumption, and it is stereotypical differentiation that has triggered an increase in consumption This is an opportunity for breweries, most of them in the craft beer segment to adapt the industry to females, especially if the sales are stagnant as this would work in favor of a blue ocean canvas which goes according to Donadini & Porretta, (2017) thoughts.

In regards to culture, it is not considered a static factor as it is constantly changing, evolving, and synthesizing old ideas into new ones as new generations are integrating new ideologies into culture as Solomon et al., (2013) mentions.

The cultural system consists of three functional areas according to Solomon et al., (2013), namely;

Ecology is known as the adaptation to habitat as Solomon et al. claims.

Social structure is known as the way in which orderly social life is maintained. As Solomon et al., has mentioned.

Ideology is known as the mental characteristics of a people and the way in which they relate to their environment and social groups as cited in Solomon et al., (2013). As mentioned above, subcultures are one of the external factors. Subcultures are formed by factors such as ethnicities, religion, geographic location, age and gender. This means that consumers preferences, feelings and purchasing decisions are influenced by the subgroups they belong to as they have a specific set of values and beliefs they live by. as said in Solomon et al., (2013

The brands in the beer industry must be aware of these subcultures in order to target them respectfully and consequently not lose any percentage of the market share due to a mistake. However, in no means does this means not taking a risk.

Family is where consumers are born into and learn principles and values from them – and so without a doubt the influence of consumption is automatic. Furthermore, marketeers are constantly influencing consumers by discretely exposing them to product content such as advertisements. This is also turned into reality since they tend to consumer needs and expectations and ensure their satisfaction. This allows them to hook the consumer when the consumer is blind to that fact since they think its willingly when it was in fact influenced as said in Solomon et al., (2013).

CONCLUSION

Consumer experiences make a permanent impact on them and may affect their purchasing decisions. As noted, information provided, and peer groups can also have this impact.

With this, marketeers must aim to increases the level of informational factors, trust gained from relational relationships, and identity influences, for example, by obtaining celebrity endorsements such there can be a positive influence on consumers that support them, developing a brand profile, and emphasizing in advertising that the product improves confidence and provides a feeling of success and satisfaction since consumers also buy because of the feeling that comes with the experience and this is according to Sheu et al., (2017).

There is an increase in demand for information such as nutritional aspects beer has as they are concerned more about health factors – and is one of the main reasons for why gen zers and millennials currently drink less beer than other generations.

The information provided activates the ‘learning’ internal factor that affects consumer behavior and will consequently make them more confident in what to do.

The relation between product participation and knowledge quest is well-established, and we may infer that it also holds true for the unique case of alcoholic beverage ingredient and nutrition information as Grunert et al., (2018), states.

Involvement usually entails a willingness to put in some effort in order to achieve the desired material. A multi-channel approach is also recommended in delivering dietary and ingredient information on alcoholic beverages to customers as they will feel more included in the process and consequently develop satisfaction and loyalty as mentioned by Grunert et al., (2018).

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