Consumer behavior covers a broad variety of consumers based on diversity in age, sex, culture, taste, preference, educational level, income level, etc. Consumer behavior can be defined as “the decision process and physical activity engaged in evaluating, acquiring, using or disposing of goods and services.”
With all of the diversity to the surplus of goods and services offered to us, and the freedom of choices, one may speculate how individual marketers actually reach us with their highly definite marketing messages. Understanding consumer behavior helps in identifying whom to target, how to target, when to reach them, and what message is to be given to them to reach the target audience to buy the product.
The study of Consumer Behavior helps in understanding how individuals make decisions to spend their available resources like time, money, and effort while purchasing goods and services. It is a subject that explains the basic questions that a normal consumer faces − what to buy, why to buy, when to buy, where to buy from, how often to buy, and how they use it.
Marketing strategies and tactics are normally based on explicit and implicit beliefs about consumer behavior. Decisions based on explicit assumptions and sound theory and research are more likely to be successful than the decisions based solely on implicit intuition.
Knowledge of consumer behavior can be an important competitive advantage while formulating marketing strategies. It can greatly reduce the odds of bad decisions and market failures. The principles of consumer behavior are useful in many areas of marketing, some of which are listed below:
Analyzing Market Opportunity
Consumer behavior helps in identifying the unfulfilled needs and wants of consumers. This requires scanning the trends and conditions operating in the market area, customer’s lifestyles, income levels and growing influences.
Selecting Target Market
The scanning and evaluating of market opportunities helps in identifying different consumer segments with different and exceptional wants and needs. Identifying these groups, learning how to make buying decisions enables the marketer to design products or services as per the requirements.
Example − Consumer studies show that many existing and potential shampoo users did not want to buy shampoo packs priced at Rs 100 or more. They would rather prefer a low price packet/sPouch containing sufficient quantity for one or two washes. This resulted in companies introducing shampoo sachets at a minimal price which has provided unbelievable returns and the trick paid off wonderfully well.