Consumer Behavior

The success of any marketing campaign depends on how the targeted audience has received it. Marketers are vying to grab consumers' attention and fulfill their needs and wants. The main question here is, how can marketers understand the motivations of consumers behind purchase decisions? The answer lies in the study of consumer behavior. 

Consumer Behavior Consumer Behavior

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Table of contents

    Consumer Behavior Definition

    Marketers are facing fierce competition in the market these days. Every marketer wants to capture consumers' attention and build strong relationships with them. This explains why companies are willing to spend a lot of money on marketing research. Marketing research aims to understand consumer buying choices and the motivation behind those choices. In other words, the study of consumer behavior.

    Consumer behavior is the study of their buying choices, i.e., why they buy or don't buy a specific product or service, the processes of decision-making, and the motivations behind those decisions.

    One of the most critical factors in marketing is understanding consumer behavior. Knowing how consumers make their purchase decisions would make a marketer's life so much easier as they can design marketing campaigns that yield the most favorable results.

    However, it is easier said than done, since many customers do not know how and why they make confident buying decisions. Some even find it challenging to explain their buying process and the motivations behind those decisions.

    Thus, the most challenging task for every marketer is to answer why consumers buy. This is something consumer behavior studies can help.

    Consumer Behavior and Marketing Strategy

    The role of consumer behavior is pivotal in devising the marketing strategy.

    Consumers react to marketing stimuli, i.e., product, price, place, and promotion – the four Ps of marketing. These stimuli prompt responses from the consumers based on each consumer's characteristics and the buying decision processes.

    Here lies the connection between consumer behavior and marketing strategy. If marketers can determine consumers' preferences and buying patterns by examining their behavior, they can also pinpoint the exact factors that influence those decisions. This information can then be used to develop the products/services, set the correct prices, decide on effective distribution channels, and optimize promotional activities to maximize consumer impact.

    Adam airlines conducted marketing research to determine its target audience's preferences. Through this research, they concluded that their customers are price sensitive, i.e., customers view price as a significant factor in their buying choices. Therefore, they would keep this factor while devising their marketing strategy.

    Check out our article about the connection between Marketing and Sales.

    Three roles of Consumer Behavior in Marketing

    Overall, consumer behavior has three main roles in marketing:

    • Effective marketing campaigns - Consumer behavior helps marketers to understand the buying patterns of consumers. To an extent, it helps them to design effective marketing campaigns i.,e, the message is delivered and taken positively by the target audience.
    • Suitable marketing channels - Marketers can select suitable marketing channels for their campaigns through a better understanding of consumer behavior. For instance, online buying is a common practice now, therefore, online marketing could be used to attract the target audience.
    • Exploiting untapped markets - The assessment of consumers helps in exploiting untapped markets. Marketers determine new trends and needs by analyzing consumer behavior. It helps in developing products/services to cater to the new needs and wants.

    Consumer Behavior Principles

    There are certain consumer behavior principles that are significant to understand for businesses to build loyalty amongst their target audiences and increase their brand value. The principles influence the behavior shown by consumers while making purchase decisions.

    • Consumer commitment - Engagement leads to commitment. Once consumer commits to some brand, they are more likely to stick to it in the future. Therefore, businesses need to offer a product/service that consumers can rely on in the long term.
    • Agreement in a wider audience - If a brand is popular amongst a wide audience, more people are likely to join their consumer base.
    • Shared demographic influence - People having the same demographics could influence each other. For instance, people with a certain social class are more likely to be influenced by people belonging to that same class.
    • Authority seeking - People would always seek an expert opinion on a certain product before making the purchase decision.
    • The appeal of exclusivity - An exclusive brand is more appealing to consumers than other brands. It gives them a feeling that they own something that is not easily available in the market.

    Factors Influencing Consumer Buying Behavior

    Many factors could influence consumer buying behavior. From cultural to psychological factors, they reflect not just the buying choices but also the motivation behind those choices. This section will explain each of these factors in detail.

    Consumer behavior: Cultural factors

    Cultural factors are comprised of culture, subcultures, and social class. These factors have a significant impact on consumer behavior.

    Culture is one of the primary sources through which human behaviors are formed.

    For a child, the household and societal values and norms serve as guidelines for developing his values and perceptions. For instance, the term – American dream is often discussed while discussing American culture. It is because this term defines American culture, which is based on equal opportunities for all. It is a culture where people can dream big and turn those dreams into reality.

    The smaller parts of a culture are subcultures.

    A subculture is a small cultural group within a culture, and it is formed by people having similar value systems.

    Subcultures include religions, nationalities, etc. Marketers often use these subcultures to target a specific audience by providing them with customized products/services. A social class represents the division of a society based on income, education, occupation, etc. Marketers study these social classes because the people of a particular social course tend to exhibit similar purchase behavior.

    consumer behavior workplace subculture StudySmarterFig. 2. Workplace subculture

    Consumer behavior: Social factors

    These factors comprise reference groups and family.

    A reference group is a group that a person identifies with and aspires to join. It has a significant influence on a person's attitude and behavior.

    In marketing, social groups are used to influence consumer buying decisions. For instance, adventure sports athletes endorsing Redbull could affect people's perception of that brand.

    The family also has a significant influence on a person buying behavior. For instance, children are more tech-savvy because of easy access to the latest technologies. They are more involved in the buying decisions in a family. From smartphones to cars, they help their parents in their buying decisions. As for marketers, this shift is essential while devising marketing strategies.

    Consumer behavior: Personal factors

    People sharing similar personal characteristics are likely to exhibit the same buying behavior.

    Personal factors include occupation, lifestyle, age, and economic conditions.

    For instance, older people are less likely to experiment with new products/services. They would want to continue buying the effects they have used before. Marketers examine these personal factors to understand consumer buying choices and effectively target the customers.

    Consumer behavior: Psychological factors

    Human needs arise due to biological factors and psychological factors. To fulfill those needs, human seeks satisfaction sometimes by buying a specific product/service.

    Psychological factors include motivation, perception, learning, etc.

    Maslow's hierarchy of needs theory presents the different stages of conditions in a person's life. A person, who does not have money, would first worry about fulfilling basic needs such as hunger before fulfilling other requirements. Another critical factor is perception, i.e., how we perceive information. Two people would have different perceptions about a brand when exposed to the same marketing stimuli.

    Consumer Behavior Examples

    Here are some examples of purchase behaviors that can be categorized into four types based on the extent of buyer involvement:

    • Complex buying – This buying behavior is exhibited when significant variations between brands and a high degree of buyer involvement. It could be because the brand is expensive and new in the market. Consumers will research the brand to make informed purchase decisions.

    • Dissonance-reducing – Consumers show this behavior when there is a high level of involvement and few perceived differences between brands. For instance, a person wants to buy furniture. The degree of participation is high as furniture is costly, but the perceived differences among brands in the same price range would be low.

    • Habitual buying – This behavior is exhibited while purchasing daily products with little perceived differences among brands. Consumers show little involvement in the purchase—for instance, a toothpaste brand.

    • Variety seeking – This purchasing behavior involves low involvement but significant perceived differences among brands. Consumers tend to switch brands because they want to try different brands. Since these choices are not expensive, consumers like to experiment with other brands.

    Consumer behavior: The buying process

    Buyers make purchases after going through a decision-making process. It starts with need identification and ends with post-purchase behavior. In this section, every stage will be discussed in detail.

    • Need identification – The process starts with identifying needs. It is usually prompted because of either internal or external stimuli. For instance, a beverage advertisement could create demand in you for that product.
    • Information search – At this stage, consumers search for information. This happens when the consumer is not confident about a purchase. Data could be gathered from public or personal sources.
    • Checking alternatives – Once the consumer has the information, they would check alternatives to make an informed purchase decision. The extent of this check depends on factors such as the product's price. For instance, if a product is expensive, consumers might run this process more than one time.
    • Purchase decision – At this stage, the consumer finally decides on a brand for purchase.
    • Post-purchase behavior – Consumers exhibit two kinds of post-purchase behavior. They could be satisfied or dissatisfied with the brand. The level of satisfaction depends on consumer expectations and the brand's perceived performance.

    Learn more in our article Buyer Decision Process.

    Consumer Behavior - Key takeaways

    • Consumer behavior is the study of customers' buying choices and the motivation behind those decisions.
    • Marketers can determine consumers' preferences and buying patterns by examining consumer buying behavior.
    • Cultural, social, personal, and psychological factors could influence consumer buying behavior.
    • Need identification, information search, checking alternatives, purchase decision, and post-purchase behavior are the steps in the purchase decision process.
    • Purchase behaviors are categorized into four types based on the extent of buyer involvement and the extent of variations among brands: complex buying, dissonance-reducing, habitual buying, and variety-seeking.
    Frequently Asked Questions about Consumer Behavior

    What is consumer behavior? 

    Consumer behaviour is the study of their buying choices, i.e., why they buy or don't buy a specific product or service, the processes of decision making, and the motivations behind those decisions.  

    What factors influence consumer behavior? 

    Cultural, social, personal, and psychological factors influence consumer behavior. 

    How does consumer behavior affect marketing strategy? 

    If marketers can determine consumers' preferences and buying patterns by examining their behaviour, they can also pinpoint the exact factors that influence those decisions. This information can then be used to develop the products/services, set the correct prices, decide on effective distribution channels, and optimise the promotional activities to maximise consumer impact.  

    How can expectations about the future change consumer behavior? 

    The expectations about the future can change consumer behavior. For instance, If a buyer expects the price of a good to go down in the future, they hold off buying it today, so the demand for that good today decreases. 

    Why is consumer behavior important? 

    Consumer behaviour is important because it helps marketers to design effective marketing campaigns, select suitable marketing channels, and to exploit untapped markets. 

    Test your knowledge with multiple choice flashcards

    Business-to-business (B2B) marketing refers to marketing goods or services to ______ and organisational buyers.

    B2B decision-makers are always rational; therefore, B2B advertisements are boring and emotionless. 

    Are the B2B stereotypes still valid today?

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