Getting inside the consumer’s mind: Specialty examines range of human behavior

Dawn Sime, Ph.D, assistant professor/co-chair, Southern New Hampshire University’s School of Business, Global Business, and Leadership Department

Consumer psychology can be defined as the examination of why people buy things, which involves cognitive processes, and response to the influence of marketing, according to study.com. The discipline looks at a wide range of human behavior and refers not only to shopping for tangible goods, but also pertains to the consumption of entertainment and experiences as well as attitudes and motivation underlying purchasing decisions.

Several industries employ consumer psychologists, from universities and financial institutions to high-tech companies and manufacturing operations, each with its own unique area of concentration.

According to Erin Percival Carter, Ph.D, assistant professor of marketing at the University of Maine, consumer psychology covers a much broader scope than most people think.

“The most useful definition is trying to understand the psychology of human behavior when it comes to acquisition/purchase, use, and disposition of goods,” she said.

Acquisition can be tied to credit card usage; consumer psychology examines how people process rewards and cost. Carter explained that using a credit card offers an immediate reward, while payment becomes a concern for the future.

“Consumers think of what makes them feel better now,” she said.

Carter pointed out that a portion of the population does not have good knowledge of financial instruments and compound interest that comes with spreading credit card payments over time.

“They are not connected to financial repercussions,” she said.

Furthermore, part of what we do when acquiring goods is showing others what we have, according to Carter. When you buy a nice house or drive a BMW it sends a message to others who never see your credit card debt, she said.

The concept of use in relation to consumption has evolved over time, according to Carter. Initially, studies looked at the sales approach and what was needed to encourage consumers to buy. Businesses came to realize that if you con someone into buying, you’ll do this only once and will develop a negative reputation, she said.

Companies have shifted their focus from buying to use. “It’s better to have a satisfied consumer. Companies need to understand why customer satisfaction has become so important. They want to continue to do business over time,” Carter said.

Disposition of goods is the least studied factor, although has been receiving more attention lately, Carter reported. The recent trend to discard items no longer used or wanted taps into the psychology of “letting go,” Carter explained.

“Why do so many people still have hard bound encyclopedias or collect old books? Why hang onto heirlooms?” Consumers are becoming savvier in recent years and are driven by “volume simplicity.”

According to Dawn Sime, Ph.D, consumer behavior reflects a personalized process. Sime is assistant professor/co-chair, Southern New Hampshire University’s School of Business, Global Business, and Leadership Department.

“When you look at consumer behavior, you have to look at the whole person, not just one or two aspects. You have to understand what motivates the decision to buy or not to buy,” she said.

In addition to product research, comparison pricing and an evaluation process, consumers make decisions based on internal factors, such as the need or desire for a product, and external factors, which are subject to influence from family, friends, peers, and marketing efforts from companies.

In today’s marketplace, consumers have a wide variety of choices. “Consumers are fickle. If we don’t get what we need, we will go to other companies,” Sime said. So, companies utilize clever ways that tap into emotions to get their message out to consumers.
“The more a product appeals to us, the more involved we are in buying the product,” she added.

Culture also plays a role in making purchasing decisions, according to Sime. Ethnic background and geographic location can influence the choice of product or service.

Sime said that generational differences also influence decisions regarding purchasing habits. She pointed out that a baby boomer would exhibit buying habits that differ from her parents’.

Millennials and Gen-Zers would also make different choices, because of their age, lifestyle, and peer influence.

Savvy marketing professionals are well aware of these differences and gear advertising efforts to the interests and preferences of these particular markets and groups.

Purchasing decisions also fall into two categories. Situational buying is a temporary situation in which there is an immediate need for a product or service.

Enduring involvement has more to do with personal involvement of time, finances and interest, Sime said. For example, if a person is an active bike racer, he will invest time and money in the sport.

Research into consumer psychology is dependent upon the particular industry or niche. As an academic researcher, Carter engages in activities that lead to publication of her findings in academic journals to build collective knowledge. Her research focuses on “what people think is important for well-being.”

For instance, Carter has examined the benefits individuals can derive from participating in “hyped” media events, like the Super Bowl. The theory is that the buildup causes people to deviate from other activities they would normally engage in, she said.

Specifically, if Sunday is typically laundry day but the individual watches the game, what effect might the change in routine have? “The findings depend on how you define well-being,” Carter said. “It’s an abstract concept but it could have a negative effect.”

On the other hand, Carter has found that participating in a hyped event could actually have positive social implications. “It can strengthen social ties, particularly when the person watches alone. When you watch communal events by yourself, it gives you a sense of being part of a group,” she said.

Together with a fellow professor at the University of Maine, Carter is participating in another research project for the agricultural industry, focusing on artisanal cheese producers and consumers’ attitudes toward locally created products versus those found in large grocery stores.

While more research is needed, Carter indicated that people view the local version completely different from the one available in the big market. People have a unique relationship to products produced locally,” said Carter. “People are very aware of spending money locally, which can have downstream effects.”

Carter pointed out that consumer psychologists who work in industry study matters related to increasing revenue. “They identify profitable segments of the business,” she said.

Also, large technology companies, such as Facebook, Microsoft and Xbox, employ consumer psychologists to ensure they are exerting effective marketing efforts targeted to a specific audience.