Consumer Behavior

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.

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.

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.

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.

Fig. 2. Workplace subculture

Consumer behavior: Social factors

These factors comprise reference groups and family.

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.

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.

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.