Understanding Consumer’s Behavior is Crucial to Become Successful Entrepreneur

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Understanding consumer behavior is a vital aspect of marketing. Consumer behavior is the study of how people make decisions about what they buy, want, need, or act in regards to a product, service, or company. It is critical to understand consumer behavior to know how potential customers will respond to a new product or service. It also helps companies identify opportunities that are not currently met.

A recent example of a change in consumer behavior is the eating habits of consumers that dramatically increased the demand for gluten-free (GF) products. The companies that monitored the change in eating patterns of consumers created GF products to fill a void in the marketplace. However, many companies did not monitor consumer behavior and were left behind in releasing GF products. Understanding consumer behavior allowed the pro-active companies to increase their market share by anticipating the shift in consumer wants.

Consumer behaviour

The Three Factors

To fully understand how consumer behavior affects marketing, it’s vital to understand the three factors that affect consumer behavior: psychological, personal, and social.

Psychological Factors

In daily life, consumers are being affected by many issues that are unique to their thought process. Psychological factors can include perception of a need or situation, the person’s ability to learn or understand information, and an individual’s attitude. Each person will respond to a marketing message based on their perceptions and attitudes. Therefore, marketers must take these psychological factors into account when creating campaigns, ensuring that their campaign will appeal to their target audience.

Personal Factors

Personal factors are characteristics that are specific to a person and may not relate to other people within the same group. These characteristics may include how a person makes decisions, their unique habits and interests, and opinions. When considering personal factors, decisions are also influenced by age, gender, background, culture, and other personal issues.

For example, an older person will likely exhibit different consumer behaviors than a younger person, meaning they will choose products differently and spend their money on items that may not interest a younger generation

Social Factors

The third factor that has a significant impact on consumer behavior is social characteristics. Social influencers are quite diverse and can include a person’s family, social interaction, work or school communities, or any group of people a person affiliates with. It can also include a person’s social class, which involves income, living conditions, and education level. The social factors are very diverse and can be difficult to analyze when developing marketing plans.

However, it is critical to consider the social factors in consumer behavior, as they greatly influence how people respond to marketing messages and make purchasing decisions. For example, how using a famous spokesperson can influence buyers.

Consumer Behavior Models

Through research and observation, several models have been developed that help further explain why consumers make decisions, including the black box, personal variables and complex models.

The black-box model is based on external stimulus-response, meaning something triggers the consumer to make buying decisions that are influenced by many factors, including marketing messages, sampling, product availability, promotions, and price.

When influenced by the personal-variable model, consumers make decisions based on internal factors. These internal factors may include personal opinions, belief systems, values, traditions, goals, or any other internal motivator.

The third consumer behavior model is the complex model. The complex model considers both internal and external variables.

 How It’s Studied

The term “consumer behavior” refers to actions and decisions that factor into a customer’s purchase. Researchers, businesses and marketers study consumer behavior to understand what influences a consumer’s shopping preferences and selection of products and services. Multiple factors affect consumer behavior, among them economic status, beliefs and values, culture, personality, age and education. Findings on consumer behavior are used to develop methods and products that will boost company sales.

Establish a method for studying consumer behavior. Common study methods include taking surveys, hosting focus groups, tracking point-of-sale data and observation. Measuring physiological responses to certain products and advertising is another common practice used by university research departments.

Attract customers to participate. Offer incentives, such as monetary payments, free products or raffle entries, to motivate customers to participate in consumer behavior studies.

Conduct a survey of customers. Surveys can be taken online, in person or by phone. Limit the number of questions to five. Ask customers multiple-choice questions, open-answer questions and questions that only need a “yes” or “no” answer. Customers taking paper or online surveys often skip open-answer questions, so limit those to one or two.

Establish a focus group. Host a meeting of several different types of costumers to discuss a product type and the reasons customers buy certain brands of that product. Ask open-ended questions to encourage discussions. Allow participants to try a brand they’ve never used before, then request them to write down the pros and cons of the brand.

Obtain permission from a store with high customer traffic to observe customer selections in a specific product section or department. Write down the types of products purchased. Note if anyone picked up a product but then returned it to get a different brand, or if a customer walked away without selecting an item. Indicate possible reasons why shoppers choose one product over another, such as price, fragrance or packaging.

Request point-of-sale statistics from stores or corporate headquarter sales departments. Focus on a specific product type. Note whether one brand was purchased more often than another over a set time period. Compare these statistics with other time periods. Research possible reasons why one brand was chosen over another. Increased commercial marketing, coupon and discount offerings, aisle-end displays, and seasonal sales are all possible reasons. Product quality and perceived product quality are other factors that influence consumer purchasing decisions.

Conduct testing of consumer physiological responses to images, smells, tastes and other selling factors of certain products. An example of this research method includes asking consumers to wear a pair of glasses with a tiny camera hooked into the center. This allows researchers to note what commercial holds customer attention the longest.

Written By

Diwakkar Kukretii

Veteran social worker with more than 20 years of in-depth hands-on experience in developing ample social development & livelihood programme strategies. Proven success in leadership, managed team in enhancing capacities to achieve social development & livelihood goals.

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