What are the factors that influence spending behavior? | 5 Answers from Research papers (2024)

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What are the factors that influence spending behavior? | 5 Answers from Research papers? ›

Factors that influence spending habits include beliefs about the link between spending and wealth , product usage and purchasing power, social status, promotional approaches, and prestige , access to credit, familiarity with debt and financial education

In conclusion, understanding the five major factors influencing consumer buying behavior—psychological, social, cultural, personal, and economic—is essential for businesses aiming to connect with their target audience effectively.

Spending behavior is influenced by a complex interplay of personal and external factors, including income, wealth, financial goals, the economy, cultural norms, and marketing. Understanding these factors can help individuals make more informed decisions about their spending and help them achieve their financial goals.

Internal /External Influences on Consumer Behaviour

Internal influences: Internal influences are also known as personal influences and it includes perceptions, attitude, motivation, lifestyle, learning and roles.

The key factor that determines consumer spending is income and employment. Those who have steady wages have the ability to make discretionary purhcases, thereby generating demand. Other factors include prices, interest, and general consumer confidence.

The main factors include psychological, social, cultural, personal, and economic influences that affect consumers' purchase decisions and behaviors.

Sometimes referred to as OCEAN, CANOE, or the five-factor model, the big 5 model encompasses five key attributes of a consumer's personality. Those five traits are openness, conscientiousness, extraversion, agreeableness, and neuroticism.

This system includes five broad traits that can be remembered with the acronym “OCEAN”: Openness, Conscientiousness, Extraversion, Agreeableness, and Neuroticism. Each of the major traits from the Big Five can be divided into facets to give a more fine-grained analysis of someone's personality.

What is the biggest factor affecting consumer spending? ›

The economic factors that most affect the demand for consumer goods are employment, wages, prices/inflation, interest rates, and consumer confidence. Below we discuss each in turn.

This is because many factors affect consumer purchases including consumer sentiment, the job market, household net worth, inflation, housing prices, the stock market and more.

Consumer s buyer behaviour is influenced by four major factors: 1) Cultural, 2) Social, 3) Personal, 4) Psychological. These factors cause consumers to develop product and brand preferences.

What factors influence consumer behavior while purchasing? Consumer behavior is influenced by many external factors and internal factors such as situational, psychological, environmental, and marketing factors, personal factors, family, and culture.