Environmental and Consumer Influences Analysis

Environmental and Consumer Influences Analysis

Hilary Sievers

PSY/322

May 20, 2013

Morgan Cloward

Environmental and Consumer Influences

Believe it or not, there is a science behind consumer behavior. Specifically in the financial industry, there are various factors within the environment that drive the behavior and psychology of investors. In fact, whether the consumers consciously know it or not, many companies take these factors into significant consideration when planning and executing the marketing strategy for a brand or product. Factors such as motives, perception, attitudes, personality, family, and social class are the mold for psychological considerations in marketing; while external factors, such as social, political, and ecological also have a fundamental impact on consumer decisions as well. In the financial industry, consumers have historically had a tight grip on the direction of the market based on the trends in the environment around them.

Psychological Variables

The primary motive for investors is easy; to secure the foundation of a financially sound future for either themselves and/or their family likewise. In some situations, affluent investors are also looking to multiply their millions. The abstract of all situations, however, is driven by the human need for financial gain. Or, is it? Maybe the feeling of “need” is realistically a “want”.

Let’s consider some of the other psychological factor of investors, who are essentially, for all intents and purposes of this conversation, the consumer in the world of finance. The cognitive process, attitudes, and emotions that the investor experiences are what lead them to action within their account. Throughout the course of business with a Firm or individual Financial Advisor, clients identify goals and adjust their portfolio according to their financial goals. As stated by Bagozzi, Gürhan-Canli, and Priester et al. (2002), “if the goal is to be...