Basics of consumer behavior: Definition and importance of consumer behavior and consumer buying process.
Consumer behavior is the study of consumers and their various methods of choosing a particular product.
Consumer is always considered as the “KING OF MARKET” and hence it is very important to understand the behavior of consumers towards a product or service.
This article will let you know the basics of consumer behavior to make it easy for you to understand .This article is divided in 3 categories:
1. Definition of consumer behavior
2. Importance of consumer behavior
3. Consumer buying process
To start with the basics of consumer behavior, these 3 topics are the most crucial ones
We all have read in junior classes that planets revolve around the sun, just like that our market revolves around the customers. We cannot imagine the market without them. Therefore, if consumers play such a crucial role, it is important to understand the preferences of consumers, the processes which they choose to use the product and services, to know various attributes that affect the choices of consumers, the ethics which they follow etc. All this come under consumer behavior.
“Author definition- According to Loudon and Della bitta, consumer behavior is the “The decision process and physical activity individuals engage in when evaluating, acquiring, using or disposing of goods and services”
FOR EXAMPLE- Price factor
Let suppose there is a shop named XYZ. Aleena is a customer who belongs to a highly rich family, besides her Madhuri is sitting and she belongs to a lower middle class family. They both are willing to purchase a saree.
Raghu, a salesman of that shop displays saree one by one to both of them. A saree of peach color attracts both of them and they both look interested to buy that.
Madhuri ask for the price of that saree .It costs Rs. 15000. Madhuri was shocked hearing the price as 15000 was a huge amount for her to spend on a saree but on the other hand Aleena was happy and she purchased that saree.
This incident made Madhuri very upset and she left the shop with embarrassment and never turned to that shop again.
If Raghu would have learnt about the basics of consumer behavior and would have focused on the strategies, then he would have not faced such kind of situation.
Instead of showing the same saree to both of them, Raghu would have asked for their budget first and then according to that budget he would have displayed the saree to them individually. This strategy would have helped him in customer retention.
This is an example indicating only the price factor, there are many such factors that influences the behavior of customers and need to be studied thoroughly.
IMPORTANCE OF CONSUMER BEHAVIOR
On our way to understand the basics of consumer behavior, we first need to know that why is it important?
Here are few points that will elaborate the importance of consumer behavior;
- 1. Explore market opportunities
- 2. Ensure customer satisfaction
- 3. Understand and predict various roles played by customers
- 4. Increase sales
- 5. Targeting and segmentation
EXPLORE MARKET OPPORTUNITIES- It is the integral part of marketing. Whenever we think to start a business, we focus on the opportunities that are prevailing in the market and then we build strategies to grab those opportunities to survive in the market for the long run. We will be able to assess our business opportunity to fulfill the desires of our customers.
ENSURE CUSTOMER SATISFACTION- The ultimate goal for every marketer is to ensure that his or her customers are completely satisfied with the product and services offered to them. If any customer is having any query or complaints regarding the product it should be heard and be taken care of. The nicely you will treat the customers, the happier and satisfied they will be.
UNDERSTAND AND
PREDICT VARIOUS ROLES PLAYED BY CUSTOMERS- This is a dynamic environment
and the trends changes very quickly. In this fast scenario understanding and
predicting the roles played by customers is a challenging yet important task to
complete. Customers help in the generation of profits. Every company wants to
earn more and more profit to strengthen their business and grow it to the
larger extent, for this understanding customer is very important.
INCREASE SALES- Whenever a customer purchase any product from a shop and feel satisfied with the product and service of that shop, it is quite obvious that customer will rely on that shop for any further purchases as well because that company has build trust and healthy relationship with that customer. This relation will further help in the customer retention and hence will increase sales of the company.
TARGETING AND
SEGMENTATION- Segmentation is a process of breaking the market in small
segments as per the choices of buyers .This will help he marketers to know
about the most valuable customers and the kind of products they prefer. After
that the most attractive and valuable segment is targeted to increase the
profitability of the business. PEST analysis is conducted to understand that political,
technological, social, economic factors should not the target market for the
long run.
CONSUMER BUYING PROCESS
Whatever we do in our lives, we do it step by step. We plan, search for various alternatives, choose resources, work accordingly and then get the result.
Just like that before any purchase, a consumer also undergoes various steps to make sure that they will purchase the product as per their preferences.
The objective of consumer buying process is to know how a consumer makes his/her decision regarding buying or not buying any of the commodities.
We’ll discuss the buying process of consumer:
1. 1. Need recognition
2. 2. Information search / Product awareness
3. 3. Interest
4. 4. Evaluation and intention
5. 5. Purchase decision
6. 6. Post purchase decision
7. 7. Purchase
NEED RECOGNITION- This is always said that need cannot be generated, the reason is that need is a subjective phenomenon.
For example- If a person is going to purchase a music system i.e. she cannot be transferred to mobile phone whether the prices of phone are being charged very less than the original price because need of entertainment at that particular time cannot be changed.
Significance of need
1. The marketer must identify the drive that might actually or potentially connect to the product class or brand that make the buyer feel that product can satisfy his needs.
2. It also recognizes that need levels for the product fluctuate over time.
INFORMATION SEARCH/ PRODUCT AWARENESS- Once the need Is recognized, the customer tries to gather the information about that product.Depending upon the intensity of need, it produces 2 states in an individual:
- Heightened attention means when a customer become more alert to gather information about the particular product.
- Active information search means when a customer tries to collect more information about the product, its key attributes, qualities and outlets that are available.
INTEREST- Interest may be viewed as a state of mind that exists when a consumer perceived need and/ is aware of alternative products capable of satisfying the need. Consumers’ interest is indicated in the consumers’ willingness to seek further information.
EVALUATION AND INTENTION- Once interest in the product is aroused; a consumer enters the subsequent stages of evaluation and intention.
The evaluation stage represents the stage of mental trial of the product.
After evaluation, consumer develops intention either to purchase or reject the product. The final purchase will, however depend on the strength of positive intention (Intention to buy).
PURCHASE DECISION- There are 3 most important considerations for taking a buying decision:
1. Attitude of others- Our family members, relatives, and friends influences our buying decision several times. So attitude of others can affect the purchasing decision of a consumer.
2. Anticipated situational factors- Family income can also have an impact on the purchasing decision of a consumer. If the income is low, the price of a commodity will affect the pocket of consumer but if the income is high, the price did not have a huge impact.
3. Unanticipated situational factors- Accidents, sudden demise, illness can affect the purchasing decision of the consumer. So these factors should also be taken care of to avoid any mishappenings.
POST PURCHASE DECISION- There are 3 types of situations that arises in during post purchase decision:
- 1. If the product matches the expectations, the customer is satisfied.
- 2. If the expectations for the product exceeds, the consumer is highly satisfied.
- 3. If the expectations fall short, the customer is dissatisfied.
PURCHASE- Purchase is the consumers’ commitment towards the product.
It is the terminal stage in the buying decision process that completes the transaction.
To learn the strategies for understanding consumer behavior, it is important to have an understanding of basics of consumer behavior. Starting with basics is very helpful to grab the concept easily in less time.