Consumer behaviour is the study of individuals, groups, or organizations and all the activities associated with the purchase, use, and disposal of goods and services. Consumer behaviour consists of how the consumer’s emotions, attitudes, and preferences affect buying behaviour Psychologists try to find the underlying cognitive processes that explain consumers’ choices and how they respond to the influence of marketing, as well as the external stimuli that convince people to purchase certain items. Marketing executives are very keen to know the findings from studies in consumer psychology since these findings can help them figure out how to sell a product. Understanding consumer behaviour is essential for a company to succeed in its current products and new product launches. Consumers have different thought processes and attitudes toward buying a particular product. If a company fails to understand the reaction of a consumer towards a product, there are high chances of product failure.
Due to the changing fashion, technology, trends, living style, disposable income, and similar other factors, consumer behaviour also changes. A marketer has to understand the factors that are changing so that marketing efforts can be aligned accordingly.
Why do people buy things?
People are motivated to buy things by a number of factors. First, we are motivated by biological needs. Consumers are also influenced by broader factors, such as the wider economic context. For example, during economic decline, people often shop less or only shop for necessities. Other sources of influence can be social, like family or friends. People’s buying decisions can be influenced by a desire to be social or remain connected to people. For example, seeing an advertisement for greeting cards might remind you of friends and family and a desire to remain in touch with them. Consumers are also influenced by cultural factors. For example, it’s not common in the United States to bargain at a vegetable stall at a farmer’s market – most people either buy the product or, if it’s too expensive, pass it up. In other countries, however, where bargaining is commonplace, a shopper might not buy something without going through that process.
Importance of Consumer Psychology
Understanding psychological factors affecting consumer behaviour is a key challenge for marketers and business owners. Research on consumer behaviour is concerned with understanding how purchase decisions are made, who buys certain products, and how products or services are consumed or experienced. Understanding consumer behaviour is essential for a company to succeed in its current products and new product launches. Consumers have different thought processes and attitudes toward buying a particular product. If a company fails to understand the reaction of a consumer towards a product, there are high chances of product failure. Due to the changing fashion, technology, trends, living style, disposable income, and similar other factors, consumer behaviour also changes. A marketer has to understand the factors that are changing so that marketing efforts can be aligned accordingly.
In marketing, consumer differentiation is a way to distinguish a consumer from several other consumers. This helps to make a target group of consumers with the same or similar behaviour.
Retention of Consumers
Consumer behaviour is not just important to attract new customers, but it is very important to retain existing customers as well. When a customer is happy about a particular product, he/she will repeat the purchase. Therefore, marketing the product should be done in such a way that it will convince customers to buy the product again and again.
Design Relevant Marketing Program
Understanding consumer behaviour allows you to create effective marketing strategies. Each campaign can speak specifically to a separate group by conducting a consumer behaviour study, a company saves a lot of resources that might otherwise be issued to produce a product that will not be sold in the market of consumers based on their behaviour. Based on consumer behaviour, the company decides on a production strategy that will save on warehouse costs and marketing costs.
Competition in marketing is the rivalry between existing companies, services, or products that exists within a specific market. In marketing, competition is a consideration that marketing professionals include in their marketing campaigns to help specific companies differentiate themselves from the other market competitors. This rivalry can have a positive effect in that it can influence positive industry changes, better products and services, and increased innovation, but it can also create unfavourable conditions for businesses that can’t remain competitive. It’s important to understand competition in marketing so you can help your company be more competitive in its industry.
Innovate New Products
We all know some of the names, such as New Coke, Nestle Dasani Water, Colgate Lasagna, etc. Can you see the similarities between these products? Yes, they all failed!!
The sad truth is that most new products and new ideas end up in failure. Companies consistently strive hard to improve the success rate of their new products or new ideas. One of the most important ways is to conduct a sound and thoughtful consumer behaviour study.
Stay Relevant in the Market
When the world is changing as rapidly as it is happening today, the biggest challenge we all face is staying relevant to our target market. And do you know what the main reason behind the rapid changes is? It is the ever-changing behaviour of our customers.
Today’s consumers have greater choices and opportunities, which means they can easily switch to a company that offers better products and services.
Improve Customer Service
Consumers require different levels of customer service, and understanding the differences within your customer base is quite essential. For example:
if you own an electronics store, high school or college students who buy a new laptop or smartphone are more likely to understand the features they’re looking for than a person buying his first computer. With the first demographic, your service goal will be to provide information about the latest trends in technology, while with the second demographic, you’ll need to spend more time educating the customer, finding out what his specific needs are, and even teaching them how to use the features of his new electronic device, is most appropriate service for individual needs.
Consumer behaviour analysis has emerged as an important tool for understanding your customers. By looking into consumer psychology and the forces behind customer buying behaviour, companies can craft new products and marketing campaigns and increase profitability.
Companies should talk to consumers, watch out for frustrations, and, most importantly, identify their needs and expectations!
(The author is Psychology student MIER , Jammu)