Consumer behavior has achieved great importance in customer-oriented marketing planning and management. A marketing manager must understand the social and psychological determinants of consumer behavior to enable him to plan his marketing strategy. As a matter of fact, consumer behavior is dynamic.
Therefore, it is necessary to continue to study, analysis and understood it and monitor this understanding for the marketing management so that effective decisions can be taken in respect of production, pricing, channels of distribution, etc.
All activities of the business must be focused on the consumer. This is an essential viewpoint in the firm that operates under the marketing management concept.
Consumers judge business performance by how they exercise their purchasing power.
Modern marketing is customer-oriented. Therefore, the study of customer behavior is vital in framing production policies, price policies, decisions regarding channels of distribution, and above all decisions regarding sales promotion.
Importance of Studying Consumer Behaviour in Marketing
The Importance of consumer behavior can be studied with the help of their following points:
1. To Operationalize the Marketing Concept
In its fullest sense, the marketing concept is a philosophy of business that states that the satisfaction of the consumers is the economic and social justification for a firm’s existence.
To operate consumer-oriented marketing, it is relevant and important to understand consumer behavior to identify their needs, desires, and expectations.
2. Production Policies
The consumer behavior gives an insight into the various factors, which prompted him to purchase and like a particular product.
If it is known that it is the packing that attracts the buyer then the producer will pay special attention to the packing of his products.
Thus, consumer behavior helps a great deal in formulating production policies.
3. Shorter Product Life Cycle
Because of the fast pace of new products, introduction the lifespan of many existing products has become shorter.
Faced with the much shorter Product life cycle, companies need a constant in the introduction of new product ideas to satisfy the names of their target markets.
Consumer research into the present and evolving consumer lifestyles and unsatisfied power may provide the basis for a steady stream of new product concepts.
4. Effective Market Segmentation
Under this strategy, the marketing company divides its potential market into smaller and homogeneous segments for which it can design a specific product and promotional campaign.
Market segmentation strategy requires a great deal of insight into the consumption habits of selected market segments.
It requires a close and detailed study of specific needs, personality, and left styles of a particular consumer segment.
5. Price Policies
The buyer behavior is equally important in having price policies.
The buyers of some products purchase only because particular articles are cheaper than the competitive articles available in the market.
In such a case, the price of such products cannot be raised.
On the other hand, some other articles are purchased because it enhances the prestige and social status of persons.
The price of such things can easily be raised. Effect of Price on Consumer Buying Behavior.
Some articles are purchased under particular attitudes and emotions. Prices of articles purchased under emotional motives can also be raised.
Related: What is the basic factors that affect price in any market?
6. To Avoid Product Failure Chances
The technological explosion is resulting in Rapid instruction of new products in markets.
Many of these new products prove to be a market disaster.
Some experts estimate it is to be over 80%.
To increase the likelihood of successful new product introductions, marketing companies need comprehensive and correct information regarding various aspects of their consumers.
7. Helpful in the Understanding of Buying Behaviour
The study of consumer behavior helps understand the purchase behavior and preference of different consumers.
Consumers differ in terms of sex, age, occupation, social status, religion, nationality, income, education, and family setup.
These differences may be identified and their effects on buying behavior may be evaluated effectively.
8. Adjustment with Change
Consumer behavior is dynamic, consumer behavior may change over a long time due to changes in age, experiences, lifestyles, income, and other similar factors.
Therefore, it is necessary to continuously study, analyze, and understood changes so that effective decisions may be taken in respect of the product, price, promotion, and distribution of products.
Thus, through the study of consumer behavior, the marketing company may adjust to the changed situation.
9. Decisions Regarding Sales Promotion
A study of consumer behavior is also vital in marketing decisions regarding sales promotion.
It enables the producers to know what motives prompt buyers to make purchases and the same is utilized in advertising media to awaken the desire to purchases.
The marketers make decisions regarding the brand, packing, discount, gifts, etc.
Based on consumer behavior for promoting the sales of his products.
10. Environmental Concern
Increased public concern regarding environmental deterioration, resource shortage, and population explosion has made marketing companies aware of the potentially negative impact of such products as high suds detergents, aerosol sprays, products using CFC pesticides, chemical, dye, and chemical fertilizers.
Research into consumer interests and practices enables the marketing company to develop and effectively promote environmentally sound products for socially concerned consumers.
11. Effective Marketing Decisions
The study of consumer behavior also contributes to effective marketing decisions.
For effective marketing decisions executives, must develop and understand their consumers’ behavior, the buying process, and the factors influencing their process.
12. Increased Interest in Consumer Protection
The growth of the consumer protection movement has created an urgent need to understand how consumers make their buying decisions.
For example, to identify the source to understand how consumers, perceive and interpret various marketing and promotional information such as promotional appeals, packages, labels, warranties, etc.
Consumer research has provided the basis for the number of recommendations concerning consumer protection legislation.
13. Exploitation of Marketing Opportunities
The market offers enormous opportunities for marketers.
Study of consumer behavior may be extremely useful in exploiting marketing opportunities and in meeting with challenges and that the market offers.
14. Decisions Regarding Channels of Distribution
The goods which are sold and purchased solely based on the low price must have cheap and economical distribution channels.
In case of those articles which requires service after such as TV sets must have different channels of distribution.
Thus, the decision regarding channels of distribution is taken based on consumer behavior.
Thus, In short, it may be said that in the interest of effective and fruitful marketing decisions, marketers must develop an understanding of their consumers’ behavior, the buying process, and the variables influencing consumer behavior.
Hence, it is the duty of the marketing manager to ascertain the behavior of the consumers.
Simply, consumer behavior covers a tremendously wide range of issues.
From the consumers’ first recognition of a need, through the external influences of people, information, and products, to the decision to purchase (or not), and its subsequent effects all these activities and processes come under the heading of consumer behavior.
The profit position of a product hinges on the kind of predisposition positive/negative that a consumer has developed towards that product.
It is essential to study and analyze it to understand why he/she has developed such a predisposition.
What is the need to study consumer Behaviour?
Without understanding the behavior of consumers, it is difficult for marketing managers to determine marketing strategies. It is a fact that marketers cannot share the buying power of the consumers unless they understand the behavior of the consumers which is influenced by many social and psychological factors.
why do companies study consumer behaviour
In other words, consumer reactions to the market offering decide the success or failure of the firm, which is influenced by various factors. Therefore marketing companies must understand the complexities of consumer behavior and give weight to what they believe to be more important forces acting on the consumer. The marketing company needs to recognize why and how individuals make their consumption decisions to achieve better marketing planning.
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