What Is Consumer Behavior and Why Is It Important - Clootrack
What Is Consumer Behavior and Why Is It Important - Clootrack
What Is Consumer Behavior and Why Is It Important - Clootrack
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Consumer buying behavior refers to the study of customers and how they behave while
deciding to buy a product that satisfies their needs. It is a study of the actions of the
consumers that drive them to buy and use certain products.
Study of consumer buying behavior is most important for marketers as they can
understand the expectation of the consumers. It helps to understand what makes a
consumer to buy a product. It is important to assess the kind of products liked by
consumers so that they can release it to the market. Marketers can understand the likes
and dislikes of consumers and design base their marketing efforts based on the findings.
Consumer buying behavior studies about the various situations such as what do
consumers buy, why do they buy, when do they buy, how often do consumers buy, for
what reason do they buy, and much more.
For example, consumer buying behavior is studied by consumer researchers and their
aim is to know why women buy moisturizers (to reduce skin problems), the most
preferred brand (Olay, L’Oréal), how often do they apply it (twice a day, thrice a day),
where do the women prefer to buy it (supermarkets, online) and how many times do
they buy it (weekly, monthly).
It’s insightful to listen to some of the first cut opinions on Vocalley from consumers on
how they think about various brands and their expectations, when it comes to electronic
products and gadgets.
Due to the changing fashion, technology, trends, living style, disposable income, and
similar other factors, consumer behavior also changes. A marketer has to understand the
factors that are changing so that the marketing efforts can be aligned accordingly.
What is the importance of consumer buying behavior? This article outlines several of
them.
1. Consumer Differentiation:
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 behavior.
Though you have a targeted customer demographic in your business, you can still have
variations between individual customers. Each group of consumers are different and
their needs and wants differ from other groups. When a marketer is knowledgeable
about differentiation of each group of consumers, he can design separate marketing
programes.
Consumer differentiation will help to tailor your strategies to the needs of varying
customer groups. When consumer differentiation is done, you can expand the width and
breadth of your services. You will be able to effectively serve a wider group of people.
2. Retention of Consumers:
“Consumer behavior is of most importance to marketers in business studies as the main
aim is to create and retain customers” says Professor Theodore Levitt (Kumar, 2004).
Consumer behavior 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.
Thus, it is very evident that creating customer and retaining them is very important.
This can be done only by understanding and paying attention towards the consumer’s
buying behavior.
For example, while targeting kids market, you may have to look out for venues such as
TV ads, school programes and blogs targeting young mothers. You will need to take
different messaging approaches for different consumer groups.
By conducting consumer behavior study, a company saves a lot of resources that might
otherwise be allocated to produce a product that will not be sold in the market. For
example, in summer a brand will not waste its resources for producing a product that
will not sell in summer. Based on consumer behavior the company decides on
production strategy which will save on warehouse costs and marketing costs.
5. Competition:
One of the most important reasons to study consumer behavior is to find out answers to
some of the questions:
The sad truth is that most new products and new ideas end up in failure. There is an
estimate of new product failures – they range from 33% to 90% based on the kind of
industry.
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 sound and thoughtful
consumer behavior study.
With the help of consumer behavior analysis, Nike realized that most of its target
audience is not professional athletes, but many of them were striving to be more like
them. So at the 2012 Olympics in London, Nike introduced a campaign to encourage
athletics called ‘Find Your Greatness’. It aimed to promote the aspirations of being an
athlete, not just with highperforming athletes, but wanted to include all people
regardless of their physical capability. The campaign was well planned and was data
driven, of course, carefully analyzed before taking any action. This message inspired
many consumers and had enormous appeal for target consumers.
Today’s consumers have greater choices and opportunities, which means they can easily
switch to a company that offers better products and services.
“The preeminent skill required to shift ahead in the twentyfirst century is the ability to
see and seize.” Adamson and Steckel, authors of Shift Ahead.
Losing relevance will only cost the company its market share. Haven’t we seen Sony
Walkman failing to stay relevant in the digital music era, and the taxi industry doom
with no preparedness to battle the UBER uprise!!
For example, if you own an electronics store, high school or college students who buy a
new laptop 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 him how to use the features of his new
electronic device.
Conclusion
Leading companies such as The CocaCola Company and Barclays, have constantly
improved its existing products and focused on developing new products. The CocaCola
Company aligns its corporate strategy of ‘refreshing everyone who is touched by our
business’, by conducting market research to identify consumer behavior. Similarly,
Barclays conducted consumer behavior study to better understand the needs of this
target market.
Companies should talk to consumers, watch out for frustrations, and most importantly,
identify their needs and expectations!
Contents
What Is Consumer Behavior?
Importance of Consumer Behavior
1. Consumer Differentiation:
2. Retention of Consumers:
3. Design Relevant Marketing Programe:
4. Predicting Market Trend:
5. Competition:
6. Innovate New Products:
7. Stay Relevant in the Market
8. Improve Customer Service
Conclusion
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