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The Influence of Socio-Economic Factors on Consumer Behavior: A Theoretical

Explanation of Reasoned Action

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The Influence of Socio-Economic Factors on Consumer Behavior: A Theoretical
Explanation of Reasoned Action

Alade Olarenwaju. E

2023

Electronic copy available at: https://ssrn.com/abstract=4503703

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Abstract
There is an unending demand and consumption for products and services by consumers in many
societies including the United States. The demand and consumption for such products or services
are aimed to satisfy and meet certain consumers' needs at any given time. Such demands for
products and services are influenced by some socio-economic factors the consumers consider
before taking any action. The theory of reasoned action explains that consumer behavior toward
purchasing or demanding products or services is based on some tendencies which a consumer
considers before acting. The theory opines that such tendencies could be associated with socio-
economic factors that dictate the decisions of consumers toward a product purchase at a given
time. These factors could be related to income, education, employment, gender differences, and
group affiliation among others. The article examines the theory of reasoned action in explaining
the influence of socio-economic factors on consumer behavior at a given time toward purchase or
demand for products. The paper employs a descriptive theoretical method in the discourse of the
topic. The article argues that consumers' behavior is influenced by certain socio-economic factors
in taking any decision to purchase or demand products going by the theory of reasoned action.

Keywords: Reasoned action, consumer behavior, socio-economic factors, Influence on consumer

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Introduction
Consumers are one of the major players that determine how products are to be produced at a given
time or period in any country by manufacturers and producers. Producing products at a given
period are not enough but also considering the quantity of products that will meet the demands of
consumers at that time. Just producing a particular product at such a period by producers is not
enough but one must also consider the quantity of products to be produced to meet the demands
of consumers at that time. All these processes depend on the attitude and behavior shown by
consumers towards such products or goods.
There is no doubt about the fact that consumers' needs and wants in any country are insatiable
which must always occur. And the institutions or organizations that are established to meet these
needs and wants must be ready to produce or provide their services at such a given time.
Irrespective of the situation or condition of things in society, the producers must also avail
themselves to the reality that every product or manufacturer must consider the state of consumer
behavior which is primarily influenced by socio-economic factors. This gives room for producers
and manufacturers to produce products that aim to satisfy consumers' needs and wants(Mirzaei &
Ruzdar, 2010; Gajjar, 2013). Mirzaei&Ruzdar (2010) affirmed that social factors play some
significant roles in determining how consumers show willingness in consuming a particular
product or demanding for a service. All over the world, consumer behavior has determined the
reason for certain products and goods to be purchased. They are aimed at satisfying the needs and
wants of consumers towards certain products. In the United States, for instance, consumer behavior
in buying a property, purchasing a car, and getting some home luxuries are determined by the
extent of the socio-economic factors such a consumer examines before taking any action whether
to purchase, order a product, or not to do so. A consumer that resides in New York will show a
different behavior from a consumer that lives in California, in purchasing a product or property by
reason that bothers on education, income, gender, employment, social class, environment,
economic status, and several others. While this applies to consumers in the US, it is also witnessed
in many countries and societies.
The theory of reasoned action by Fishbein & Ajzen (1975) had explained that there are tendencies
that initiate a consumer, for instance, in the United States, to buy a product or demand for services.
The theory is one of the theories employed to explain the position of consumer behavior toward
purchasing a product or buying goods. The theory believes that a consumer in the US does not
wish to buy goods or purchase products if certain necessities about the products are not meant. The
fact that sensitization and marketing principles play a role in influencing consumer behavior,
socio-economic factors are clear indications that determine when, how, and what a consumer
should buy or purchase products at a particular time. Jisana(2014) opined that the issue of how,
when, where, and why a consumer purchasing products and services must be examined in line with
social factors. Another submission by Solomon et al(2012), revealed that consumer behavior can
be described beyond purchasing personal things but also how people feel when they either have

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what they want or not. It begins with the consumer playing some vital roles as the user, payer, and
buyer (Gajjar, 2013).
The unexpected change in consumer behavior toward any product has resulted in the production
and duplication of other products in satisfying consumer needs over time. This is to state that when
consumers' behavior toward a particular product has changed or is influenced over time, producers
would want to make or produce alternatives as a way of satisfying the needs of such consumers.
The sudden change in consumer behavior over time that statistically goes up, comes down, or
remains stagnant is liable for excess production of products, wastages, loss to producers and
distributors, and even a shortfall in the generation of the country's revenue. Consumer behavior is
one important factor that must be considered in any line of production, business strategy, and
organizational policy and goal.
The objective of the article is to employ the explanation of the theory of reasoned action in
determining the influence of socio-economic factors on consumer behavior in the US. The article
will also examine the components of the theory, the criticisms against the theory, and the overview
position of the theory in explaining the influence of socio-economic consumer behavior in
purchasing products.

Theory Of Reasoned Action: Giving the Definition

The theory of reasoned action has its root in the work of Mark Fishbein & Icek Ajzen in 1975. The
theory aims at explaining the tendencies that emerge when consumers are faced with the instant
decision of whether to purchase a particular product or demand goods at any given time and period.
The theory aligns its explanation to determining the kind of processes and actions a consumer
admits through their behavior when challenged with purchasing products or buying goods. It is a
theory that explains consumer behavior, actions, and attitudes in the determination of buying
certain products at a particular period. The theory of reasoned action opines that there are
tendencies that initiate a consumer to ruminate over a product before taking a decision or action
about the product. The theory likewise submitted that there are attitudinal considerations that a
consumer makes before deciding to consume or purchase a product. They substantiated the theory
that by rational thinking, and examination, a consumer will only decide to buy and consume a
product or service at a given period. The decision processes are based on some assumptions which
the consumer will always want to take cognizance of. They presented the three assumptions that
guide consumers' actions in this regard. The three assumptions are beliefs, attitudes, and intentions.
The theory of reasoned action opines that rational thinking and defined examination as employed
by the consumers would follow some internal assumptions before they effectively take place to
the external. Consumers' act of reasoning about a product or good is meant to meet certain needs
and wants for their well-being. Even though a consumer's beliefs about a product are anchored
based on how, when, and what to use the product, the tendencies are vital in determining consumer
behavior in buying such goods.

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THE ASSUMPTIONS OF THE THEORY OF REASONED ACTION

In the continuation of discourse about the theory, Fishbein & Ajzen (1975) presented some
assumptions guiding the theory as an underlying consideration of consumer behavior. The
assumptions are beliefs, attitudes, and intentions that guide consumer behavior in deciding on a
product that is influenced by certain external factors.

Beliefs: According to the theory, it is an initial stage whereby a consumer aims to take a proposed
action whether to buy a product or not. The beliefs of the consumer are centered on a given
probability surrounding such products and services.

Attitudes: By attitude, it was posited that consumers are liable to show an attitude towards such
products if the outcome of actions to be taken is good or not, concerning the desired products.

Intentions: Also, by intention, the consumer will act on the initial assumptions of beliefs, and
attitudes around the product before purchase.

The overview of the theory

The theory of reasoned action as applied in explaining consumer behavior towards a decision about
certain products or goods, exhibits the importance of social-economic factors that influence the
behavior of the consumer in the purchase of goods and services. The consumer is bound to reason
and consume needed products since there are some generated socio-economic factors influencing
the final decision about the products and services. Being rational in this regard allows such
consumers to consider the social and economic factors that influence the will of such consumers
about a product. The process of rational thinking about a decision is built by what the consumer
believes about the product, the attitude, and the intention of the consumer towards such products.
The theory gave us an understanding that consumers do not eventually purchase products based
on mere coincidence but on intended actions that are influenced by some socio-economic factors.
Consumers on many occasions will either put up an attitude or not if there is cause to believe in a
particular product before the intended actions are taken. All these processes and actions do not just
evolve. They are embedded in the external socio-economic factors that influence their beliefs,
attitudes, and actions. A category of consumers that already have many domestic financial
responsibilities will not consider other financial burdens because of the income that has placed
some impending limitations on the consumers to act or proceed.
The theory of reasoned action believes that when socio-economic factors are identified, consumers
have different options and opinions either to purchase a particular product or suspend the purchase.
The processing of reasoning along with what would be the next action is built up on the internal
considerations that address their beliefs, attitudes, and intentions. Every consumer would want to
deliberate on a proposed product before taking further action even if the product does not meet up

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with it's desire or expectation. The eventual bulk of responsibility lies with consumers who will
have to use, pay, and buy(Gajjar, 2013) the product. The essence of the theory is to reveal the
position consumers occupy in taking individual decisions about a described or known product.
Although the roles of marketing and acts of business strategies may play out in the decision-
making, the reasoning abilities are still subjected to tendencies and factors that would give such
consumers a greenlight.

Consumer behavior and socio-economic factors influence: The United States perspective.
In the US, consumer behavior has been greatly influenced by certain socio-economic factors which
allow an individual or a person to demand, consume or decline products or any services at a given
period. Consumer behavior is viewed as an action taken by an individual in whether to purchase a
given product or engage in certain services which are necessitated by some influences (Blackwell,
2006, Blythe, and. 2013; Gajjar, 2013; Jisana, 2014; Peck, 2022) that is beyond the control
of the consumer. Mourinho (2000) submitted that consumer behavior is a process that deals with
the acquisition and organization centered on purchasing, using, and evaluating products and
services. According to Wilki (1986) consumer behavior is not only involved in the consumption
of goods, but it also considers the psychological and behavioral state of the consumer after the
consumption of products and services. Blythe (2013) revealed that everybody is a consumer
because people demand goods and services every day to satisfy their needs. Jisana(2014) agreed
with Blythe(2013) that a consumer is a person that engages in processes that lead to consuming
products or demanding services. As a consumer, certain processes and actions are taken before
consuming products. The processes and actions are a chain of influences occasioned by attitude,
and ways an individual responds to the products. Even though marketing is believed to play some
vital roles in the sensitization, knowledge, and awareness of available products to consumers, the
endpoint of purchase, and consumption centers on socio-economic factors. For instance,
consumer's behavior response to products begins with friends' or family members' evidence about
a particular product, or personal inquiry about such products by the consumer. Other influences
such as social media, radio jingles, and promotional adverts also have some impact on determining
a consumer's choice and decision to consume certain products. In the US, many consumers choose
to purchase products through social media and online sales that address their wants and desires
(Pasquali, 2023). They were better positioned to make decisions based on personal factors. Betts
(2016) opined that social factors are necessary considerations that have an impact on people's way
of life. Differently, Fallah et al( 2014) posited that there is a relationship between reference group,
family, price, and purchasing decisions made by the consumer. In a discourse presented by Gazzafi
(2020), it was revealed that consumer buying behavior is affected by personal, psychological,
social, and economic factors. Ramya & Ali (2016) on their part, believed that culture, subculture,
social class, membership groups, family, personality, and psychological factors affect consumers
buying a product. Socio- economic factors are believed to be among other factors that affect

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consumer behavior toward buying or purchasing goods and services (Furaiyi et al, 2012; Sata,
2013; Abdu, 2013; Sangroya&Nayak, 2017) by a consumer. Alldredge et al (2022) revealed that
there were differences in the kinds of purchase of products made between the younger and the
older consumers in the US. Such demands for products cannot be excluded from the socio-
economic considerations by both gender groups. The social factors include educational level,
religious affiliation, sex, age, income status, and social class (Peck, 2022; La Salle University,
2021; Nagarketi, 2014). On different occasions, socio-economic factors have determined
consumer behavior toward products, brands(Alldredge et al., 2022), and services in the country.
Sanchez et al (2022) posited that there were differences in product information between consumers
in the US and Spain. They were centered on the socio-economic and other factors such as gender,
age, and educational level which influence consumers behavior evaluation for products.

Income level as a factor

The economic status of an individual will determine his or her income level and the decision to
take action by consuming a product or not. Blythe (2013) admitted that status plays a role in the
attitudinal change of a person to buy and consume products or services. The submission made by
Blythe was refuted in the study carried out by Murniady et al, (2014). They believed that there was
no relationship between the economic situation and what influenced consumer behavior among
university students in Malaysia. However, determining the income level will admit to evidence
about the location, the economic situation of the country as well as the propensity of an individual
about his or her income level toward any product. By and large, income level serves as an influence
on consumer behavior in certain societies.

Educational and literacy level

Education and literacy level influence consumer behavior about a product and service in a different
way. Being educated in some areas may not necessarily translate into being literate about a product.
An educated person may be influenced by local marketing toward consuming a product and
employing any other services. Peck (2022) believed that education would act to influence
consumer behavior toward purchasing and consuming products. Literacy in the same vein
determines and influences consumer behavior toward consuming products. A non-literate person
about a product will not give a second thought to the product even when such a product is
essentially good and useful. Literacy, like being educated, influences consumer behavior during a
particular period.

Group affiliation or reference group

In as much as consumer behavior is believed to follow certain processes and actions, group
affiliations or reference groups determine how people in such groups are influenced in consuming
a product. La Salle University (2021) agreed that reference groups determine the attitude and

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behavior of a member or individual to consume goods or products at a particular time. Mahmoud

et al (2014) revealed the relationship that existed between reference groups and decisions made by
consumers in purchasing an item in the Jordan study area. But according to Durmaz & Durmaz
(2014), the reference group did not show any form of determinant in consumer behavior. It means
that no relationship was discovered between the two variables. Group affiliation or reference group
cannot be underestimated in influencing customer behavior in consuming products and services.

Social class/Status
Social class or status is the characteristics or attributes of a certain group of people or an individual
in a particular society which may be a result of inheritance or achievement at a particular period.
Social class influences consumer behavior by subjecting individual desires or wants as secondary
while the social class to which the person belongs takes center stage of reference. Irrespective of
the marketing initiative done on a product of $500, a lower-class status person will only admit to
the goods or products as mere awareness and may consider purchasing it in the future if he so
desires it. Consumer behavior plays well into how people consider their state of status.

Age-related factor
One of the influences on consumer behavior is age. While people engage themselves in purchasing,
consuming, and disposing of (Blythe, 2013) products, they do so according to the dictates of their
age at that particular period. A marketing campaign on menstrual pain drugs will fall on the deaf
hear of a 65-year-old woman who has attained a menopause stage. Such a campaign, though good
for such gender-related people, the age factor has influenced her decision and behavior to decline
any possible purchase of the product. Age-related factor talks much about how the consumer buys
and consumes products within the stipulated period to allow for another purchase.

Gender-based influence
A unified product targets the populace irrespective of the age-related factor whereby positive
turnover can be achieved on such products. It gives room for marketing initiatives to influence
consumers in buying the product. However, gender-related products limit the influence on
consumer behavior which results in low patronage and sale. People respond in behavior to products
that address their gender attributes. A male-related product will attract men and boys of their age
level. This applies to the female folk who will only be interested in products that address their
gender and have an impact on their behavioral processes in consuming such products.

Employment Status
Employment status of an individual will determine his/her behavior to purchase certain products
at a particular time or not. Employment opportunities ensure survival and financial freedom for
consumers to decide and take actions on products consumers desire to purchase. But in a situation
where an individual consumer is unemployed and has no dependable means of livelihood, taking

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decisions and actions about products would always be difficult to do. In the absence of no source
of livelihood, consumer behavior to product purchase will be influenced greatly which will also
affect the production line of products at a period.

Divergent Opinions on the theory

The theory of reasoned action might have explained the influence of socio-economic factors on
consumer behavior towards buying goods, a few other theories have taken a different perspective
and opinion about different factors that could influence consumer behavior at a given period.
The theory of buyer behavior according to Engel Kellet Blackwell believed that consumers'
decisions to buy goods are based on some processes that work in four phases. The four phases
according to the theory are the input, the processing information, decision stage and the variables
stage. The theory argues that consumer behavior is influenced by the frequent marketing
promotions that catch the consumer's attention at a given time such as online advertisements,
billboards advertisement among others. Abraham Maslow's hierarchy of needs through
motivation-need theory opined that consumers' behavior is fashioned after the need to satisfy and
fulfil certain prioritized needs in their lives. The theory believes that an individual consumer will
want to fulfil its physiological needs, ensuring more safety, love, esteem and the self-actualization
needs. The two above theories are different from what the theory of impulse buying behavior
argues for. In its argument, as presented by Hawkins Stern, the theory opined that consumers'
behavior are influenced by the sudden internal impulse to purchase products. The impulse
processes take place in four ways of purchase. The various ways are quick impulse, reminded
impulse, suggested impulse and the planned impulse on which consumers' behavior are influenced
to buy goods. On another different opinion, the theory of buyer behavior believes that consumers
will be influenced by the informed motives of the available brand of products at that time.
Consumers have options to make choices among the available brands of products if the prefered
product is unavailable.
These theories of course hold different views about what could influence consumers behavior in
purchasing products at any given time. Despite their submissions about consumer behavior and
the possibilities of certain factors that could influence them, the theory of reasoned action has
found it necessary to argue that consumer behavior could be influenced by some socio-economic
factors that make consumers act in purchasing a particular product.

Merits of the theory

In explaining the influence of socio-economic factors on consumer behavior toward purchasing
products at a given period, the theory of reasoned action is relevant in these ways.

*The theory is helpful in explaining the processes that ensued when a consumer is faced with a
challenge of making decision about a product

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*The theory also unveils the possibility of rationalization consumers pass through in their decision
making

*Producers, manufacturers, and marketers can always apply the theory in knowing the quantity of
goods to be produced or promoted at a given time and the category of people.

The Conclusion
Socio-economic factors such as income level, education, group affiliation, social class, age, and
gender seemingly influence consumer behavior by determining when, how, what, and why to buy
a particular product at a given time. These factors are also applicable to consumers in the US.
Marketing may be a strategy in influencing a consumer to consume a product or brand, factors that
socially and economically dictate the processes and actions are naturally in existence to guide and
direct such an individual. This is true in many societies where people must consider their socio-
economic factors in determining their behavior toward consuming a product.

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