What is Consumer Behavior?
- Consumer behavior is the study of individuals, groups, or organizations and all the activities associated with the purchase, use and disposal of products, services, ideas or experiences to satisfy their needs and desires.
- A Need is a basic goal or requirement
- A Want is a desire that helps achieve a Need
“Organizations must understand why customers choose some options over others”
Role of Consumer Behavior in Marketing:
It is critical in understanding consumer behavior to know how potential customers will respond to a new product or service. It also helps companies identify opportunities that are not currently met.
Importance of Consumer behavior:
Understanding consumer behavior is important because it helps marketers understand what influences consumers’ buying decisions. By understanding how consumers decide on a product, they can fill in the gap in the market and identify the products that are needed and the products that are obsolete.
Factors that affect Consumer Behavior:
- In daily life, consumers are being affected by many issues that are unique to their thought process. Psychological factors can include perception of a need or situation, the 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 must take these psychological factors into account when creating campaigns, ensuring that their campaign will appeal to their target audience.
- Personal factors are characteristics that are specific to a person and may not relate to other people within the same group. These characteristics may include how a person makes decisions, their unique habits and 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 will likely exhibit different consumer behaviors than a younger person, meaning they will choose products differently and spend their money on items that may not interest a younger generation.
- The third factor that has a significant impact 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 a person affiliate with. It can also include a person’s social class, which involves income, living conditions, and education level. The social factors are very diverse and can be difficult to analyze when developing marketing plans.
- However, it is critical to consider the social factors in consumer behavior, as they greatly influence how people respond to marketing messages and make purchasing decisions. For example, how using a famous spokesperson can influence buyers.
Understanding Consumer Behavior:
1) The consumer in the Marketplace:
How to study Consumer Behavior?
- Probe for deep answers
- Small sample size
- Can’t be generalized
Focus groups: For example) age, gender group, ethnography
- Assign numerical value
- Large sample size
- Surveys (Phone, email, door to door, online)
“Ethical business is a Good business”
Organization should encourage people to complain so they can resolve problem quickly.
Enhancing Customer satisfaction:
- Corporate Social responsibility (CSR)
- Cause Marketing (For example Charity, environment care)
Triple bottom line:
2) Internal Influences on consumer behavior:
- Colors, Shapes and Sounds: How our brain makes sense of it all
- Sensation: The immediate response of our sensory receptors to basic stimuli
- Light, color, sound, smell and texture.
- Perception: How we give sensations meaning
Using senses to relate with customers on an emotional level.
- A permanent change in behavior caused by experience.
- Feedback on previous experiences
- Rewarding customers with good products
Why people want stuff?
Involving your customer:
- Use novel stimuli (In commercials)
- Use prominent stimuli (Larger ads, colored pics)
- Include celebrity endorsers
- Create spectacles
- Self-concept: How we think about ourself
- Self-esteem: The positivity of the self-concept
- Impression management: Managing what others think of us
For Example) Fashion, Furniture
Gender, Identity typed products
- Men for Mars
- Women for Venus
- For example) Men – Meat, Women – Fruits, Color – Pink for women
Androgyny: A combination of masculine and feminine characteristics
Personality & brand image:
- Products represents consumer goal.
- Brand personality: Human characteristics attributed to a brand name.
- Brand story telling – Approach
- Anthropomorphism: Human characteristics attributed to objects or animals
Lifestyle & Values:
- How they spend time & money?
- Lifestyle Marketing: Identifying the set of products and services that consumers associate with a specific lifestyle.
Segmenting a market by psychological, sociological and anthropological factors.
Demographics – Who buys
Helps to reach new customers
- Heart – Love owner shows on car (Product)
- Head – Benefits
- Wallet – Financial details
- Problem recognition
- Information search
- Evaluation of alternative
- Product choice
- Past purchase evolution
3) External Influences on Consumer behavior:
B2B and Families: Decision making in groups
- Group decision
“All of us are smarter than each of us”
The purchase situation: Creative, fancy, innovative
“When shoppers linger longer, they buy more”
Purchase Environment – Product placement, Atmosphere, Design
- Red- Tense
- Blue – Calm
Word of mouth and opinion leadership: (WOM)
Product information that individuals transmit to one another
WOM – influences 50% of all consumer sale
- Active social media
- Engage influential bloggers
- Recruit brand ambassadors
- Offer incentives
- Deal with negative comments & complaint
- Companies must proactively develop products for growing subcultures. For example) age, ethnic group
- Consumers of different ages value different messages
Myths – Stories with symbolic elements that represent a culture’s ideals
“Brand story telling”
Ritual – Multiple symbolic behaviors that occurs in a fixed sequence
Business supply ritual artifacts to consumers, wedding cakes, ceremony wines, trophy, etc.
The fashion system: how ideas spread through the market
- True innovation takes fashion risk
- Consumers have to see good & new
4) Influencing Consumer behavior
- The role emotions play in purchase decisions
- Inspirational stories
- Greeting cards
- Consumers buy more when they are in good mood.
- Sentiment analysis track how customers describe a product or company
- Psychological words which influence
- Source: Credible, Expert, socially attractive – Celebrity
- The medium: Passive – TV, Active – Print
- The message – Unique Selling Proposition (Humor, Fear, gender)
- The receiver – Motivation, knowledge, media
From inertia to cult brand – How product involvement influences marketing strategies:
Cult products for example) Apple
Increasing consumer engagement
- Celebrity endorsement
- New media
FAQs about Consumer Behavior
What are the 4 types of consumer behavior?
- Complex buying behavior. This type of behavior is encountered when consumers are buying an expensive, infrequently bought product.
- Dissonance-reducing buying behavior
- Habitual buying behavior
- Variety seeking behavior
What are the main principles of consumer Behavior?
Consumer behavior is the study of what influences individuals and organizations to purchase certain products and support certain brands. The six universal principles of persuasion are reciprocity, commitment, pack mentality, authority, liking and scarcity.
What is the 5 types of consumers?
Consumers can be grouped into the following 5 categories: Suspects, Prospects, First time buyers, Repeat buyers and Non-buyers, based upon where they are in the buying process.
What are the advantages of consumer behavior?
The benefits of understanding consumer behavior
- Catering to a Need.
- Allows you to Understand the Process.
- The Value of Comparing Choices.
- Sway Purchase Decisions to Your Favor.
- Ensure Customer Satisfaction.
- Utilize Customer Feedback for Future Development.
Who is the father of consumer behavior?
Ernest Dichter – An American psychologist and marketing expert known as the “father of motivational research.” Dichter pioneered the application of Freudian psychoanalytic concepts and techniques to business – in particular to the study of consumer behavior in the marketplace.
What is the methodology used to study consumer behavior?
The basic methods are observations, interview, questionnaire survey, focus group interview, and case study
What are the challenges of consumer behavior?
The main difficulties involved in the conduct of consumer behavior research are: A consumer may have multiple buying motives and is unable to express his main motive. This poses a challenge to the researcher in the identification of the basic buying motive.
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