Since companies began selling goods and services, they have worked hard to understand their customers. Market researchers have developed numerous methodologies to study consumer behavior, and the industry is pouring billions of dollars into ads to reach them. Marketing and advertising are both extremely important to the company, and they both carry significant costs. To ensure that you are getting the most out of your marketing budget, you need to study consumer behavior.
Factors that influence consumer behavior
To fully understand how consumer behavior affects marketing, it is essential to understand the three factors that influence consumer behavior: psychological, personality, and social.
· Psychological factors
In everyday life, consumers are affected by many issues that are unique to their thought process. Psychological factors can include perception of a need or situation, a person’s ability to learn or understand information, and an individual’s attitude. Each person will respond to a marketing message based on their perceptions and attitudes. Therefore, marketers should take these psychological factors into consideration when creating campaigns, and ensure that their campaign will appeal to their target audience.
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· Personal factors
Personal factors are characteristics of a person and may not relate to other people within the same group. These characteristics may include how the person makes decisions, their unique habits, interests, and opinions. When considering personal factors, decisions are also influenced by age, gender, background, culture, and other personal issues.
For example, an older person is more likely to exhibit different consuming behaviors than those of younger people, which means that they will choose products differently and spend their money on items that may not be of interest to the younger generation.
· Social factors
The third factor that has a major influence on consumer behavior is social characteristics. Social influencers are quite diverse and can include a person’s family, social interaction, work or school communities, or any group of people the person is affiliated with. It can also include an individual’s social class, which includes income, living conditions, and level of education. Social factors are very diverse and it can be difficult to analyze when developing marketing plans.
However, it is crucial to consider social factors in consumer behavior, as they greatly influence how people respond to marketing messages and make purchasing decisions. For example, how the use of a famous speaker might affect buyers.
How to analyse/ study consumer behavior
Analyzing consumer behavior can be a challenging task at times, but it can get easier if you answer the following questions:
- Who buys your products and services? You must first conduct market research to understand who your target audience is.
- Who makes the decision to purchase your products and services? You have to make sure who is actually making the decisions to buy your products or services. For example, an organization may purchase furniture for its office, but the decision to purchase that particular furniture may be made by the hired interior designer.
- Who influences the product purchase decision? Children are a great example of influencers. Parents may buy a specific toy or game, but the influencers behind these purchases are usually children. Hence, you may have noticed that gaming companies advertise their products on animation channels.
- How is the purchase decision made? Using the example above to purchase the game, the kids go to their parents and order the game. Hence, in this scenario, the influencer urges the decision maker to purchase a product. It is important for marketers to be aware of this process.
- Why would a consumer buy a product? You should try to understand why the consumer is buying, which will differ from person to person. For example, parents can buy toys as gifts for their children, and an organization can buy furniture for its office to make it more modern and comfortable.
- Why does the consumer prefer one brand over another? There are many reasons that can influence a consumer to prefer one brand over another. These factors can include the quality, quantity, cost, and brand of the product.
- Where do customers buy the product? Nowadays, consumers can purchase products either online or in stores. The way they shop provides insight into their buying behavior.
- When do consumers buy a product? There are several occasions when a consumer may wish to purchase a product or service. For example, parents can purchase a toy for their child’s birthday, and the organization can purchase new furniture when it moves to a new place.
- What is the consumer opinion about the product? Do consumers perceive the product as expensive, value for money, or cheap? What do they think of the product quality? Product visualization plays a big role in creating positive reviews around the world.
- What is the role of consumers’ lifestyle in their buying behavior? Adventure people will buy hiking shoes or backpacks for travel. On the other hand, people who enjoy reading buy books or electronic devices for reading.
The importance of consumer behavior for business managers
The main purpose of product marketing is to satisfy the demands and desires of consumers. The study of consumer behavior helps to achieve this purpose. Since consumers are the most important person for a marketer or salesperson, so it is important for them to consider what consumers like and dislike so that they can supply them with goods and services accordingly (Solomon, 2009). More accurate analysis helps in predicting with more accuracy the behavior of consumers for any product or service. Studying consumer behaviors helps a business manager, sales and marketers in the following way.
- To design the best possible product or service that fully meets the needs and requirements of consumers.
- Determine where to provide the service or product for easy access of consumers.
- Determine the price at which consumers will be prepared to purchase this product or service.
- Knowing the best way to promote that proves its effectiveness in attracting customers to buy a product.
- To understand the why, when, how, what and other factors that influence consumers ’purchasing decision.
The importance of consumer behavior for marketers
It is important for marketers to study consumer behavior. It is important for them to know consumers as individuals or groups that choose, buy, consume, or dispose of products and services and how they share their experiences to meet their wants or needs (Solomon, 2009). This helps marketers to investigate and understand the way consumers behave so that they can position their products for a particular group of people or individuals.
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In relation to the marketer’s viewpoint, they assume that the primary purpose of marketing is to sell goods and services to a greater number of people so that more profits can be made. This monetization principle is widely applied by almost all marketers. Earlier, the marketers succeeded in achieving their goal. However, as consumers today become more aware of product use and other product-specific information, it is not easy to sell the product or attract customers to purchase the product (Kumar, 2004). Thus, in order to sell a product or service or persuade consumers to purchase a product, marketers must submit through proper research to win them over.
Below are some of the points discussed that explain the value for marketers to understand and apply concepts and theories of consumer behavior.
- To understand the buying behavior of consumers
- To create and retain customers through online stores
- To understand the factors that affect consumer buying behavior
- To understand the consumer’s decision to get rid of a product or service
- To increase the knowledge of the salesperson the influence on the consumer to buy the product
- To help marketers sell the product and develop focused marketing strategies
1. To understand the buying behavior of consumers
Consumer behavior study helps marketers learn about and predict the buying behavior of consumers while they are buying a product. Studying consumer behavior helps marketers not only understand what the consumer is buying, but it also helps them understand why they are buying. Moreover, other questions like how, where and when to buy are also answered. Consumption and the reasons behind discarding that particular product or service help marketers to be fully aware of the product being marketed. Consumer behavior studies also help marketers understand consumer behavior after a purchase. Thus, marketers become fully aware of every stage of the consumption process i.e. pre-purchase behavior, intra-purchase behavior and post-purchase behavior. Several studies in the past show that every consumer behaves differently for a product, that is, they buy the product for different reasons, pay different prices, use the product differently and have different emotional associations with the product.
2. To create and retain customers through online stores
Professor Theodore Levitt says that consumer behavior is most important to marketers in business studies as the main objective is to create and retain customers. If the consumers are satisfied with the product, they will buy the same product again. Therefore, the product should be marketed by the labels in a manner that persuades the customer to purchase the product. Hence, client formation and retention is important. This can be done by understanding and paying attention to consumer behavior while making a decision to buy or purchase a product in the market. Moreover, the information posted on the websites greatly influences the customer’s purchasing behavior. Such information on published sources provokes the consumer to purchase a product or service. Moreover, updating this information will help the consumer to keep a product or to re-test the product if the product is not satisfied with it.
3. To understand the factors that affect consumer buying behavior
It is important for marketers to consider the factors that influence a consumer’s buying behavior before entering the market. There are many factors that can influence consumers’ purchasing decision such as social influence, cultural influences, psychological factors, and personal factors. Understanding these factors helps marketers to market the product at the right time to the right consumers. Marketers need to pay attention to cultural influences such as religion, values and customs of the target people or communities and the lifestyle of the target consumers. Marketers can suggest various strategies that convince target consumers to buy the marketed products or services.