MM/U5 Topic 4 Consumer Behavior: Concept and Importance
According to Engel, Blackwell, and Mansard
‘Consumer behavior is the actions and decision processes of people who purchase goods and services for personal consumption’.
According to Louden and Bitta
‘Consumer behavior is the decision process and physical activity, which individuals engage in when evaluating, acquiring, using or disposing of goods and services’.
Introduction to Consumer behavior in Marketing
The study of consumer behavior (CB) is very important to the marketers because it enables them to understand and predict buying behavior of consumers in the marketplace; it is concerned not only with what consumers buy, but also with why they buy it, when and where and how they buy it, and how often they buy it, and also how they consume it & dispose it. According to Professor Theodore Levitt of the Harvard Business School, the study of Consumer Behavior is one of the most important in business education, because the purpose of a business is to create and keep customers.
Customers are created and maintained through marketing strategies. And the quality of marketing strategies depends on knowing, serving, and influencing consumers. In other words, the success of a business is to achieve organizational objectives, which can be done by the above two methods. This suggests that the knowledge & information about consumers is critical for developing successful marketing strategies because it challenges the marketers to think about and analyse the relationship between the consumers & marketers, and the consumer behavior & the marketing strategy.
The term consumer behavior is defined as the behavior that consumer display in searching for purchasing, using, evaluating and disposing of product and services that they expect will satisfy their needs. Consumer behavior focuses on how individuals make decisions to spend their available resources (time, money, effort) on consumption related items. This includes what they buy, why they buy it, when they buy it, where they buy it, how often they buy it, how often they use it, how they evaluate it after the purchase and the impact of such evaluation on future, and how they dispose of it.
- To design production policies
This is the first importance of consumer behavior and it means that all the production policies have designed taking into consideration the consumer preference so that product can be successful in the market.
In every business, the main motive is to enhance the production and as well as sales of the company and to do all these, any company or business has to win the trust of its customers and studying about their tastes, likings, and preferences.
- Know the effect of price on buying
This is the second consumer behavior importance and it means that consumer behavior can help in understanding the effect of price on buying. Whenever the price is moderate on cheap more and more customer will buy the product.
After the time of production, there comes a time in which the company has to decide what the price of our product will be because it helps to divide the categories of the customer and also helps to attain more sales.
- Exploit the market opportunities
This is the third importance or significance of consumer behaviour and it means that the change in consumer preference can be a good opportunity for the mark to bring something which cannot as a revaluation in the market. For Example– When palm pops introduced in the market, it was successful due to the stylish and sleek design.
- Design marketing mix
This is the fourth importance of consumer behavior and it means that consumer behavior is very much vital in designing and approaching marketing mix to be chosen (product, price, place, and promotion).
The product should be valuable, the price should be moderate, place distribution should be intensive and an appropriate. Promotion mechanism should be there.
- Implement STP Strategies
This is the fifth importance of consumer behavior and it means that the segmentation, targeting, and positioning strategies are implemented by understanding the behavior of consumers towards the various brands.
The products are targeted grouping the customers having common taste and preference and finally positioned in the market. Thus, building a positive image of the product of a company related to the competitors and as well as help to beat them also.
- Helps in understanding diversified preferences
This is the sixth importance of consumer behavior and it means that the consumer preferences are diversified in nature and their keep on changing over a particular period of time. Nowadays consumers are more value conscious and they want to extract the maximum benefits from a particular product of a brand.
- Understanding of various roles played by consumers
This is the seventh importance and it means that there are various roles played by the consumers in the consumer decision-making process. These roles are initiators, influencers, decider, users, buyers, and gatekeeper. The steps of the consumer decision-making process can be described are as follows:-
- Need Recognition,
- Information Search,
- Evaluation of Alternatives,
- Purchase Decisions,
- Post Purchase Behavior.
- Results in customers satisfaction
This is the eighth importance of consumer behavior and it means when the designed product is matching the expectations of the customer than they result in customer satisfaction. In case the product is exceeding the expectations of the customer then its result in customer delight.
In an organization, there are various departments like purchase, personnel, finance, production, marketing and all departments have a motive to satisfy the customer needs and wants.