If you understand your consumer behaver you can change the game. Instead of doing all marketing exercise on price factor and product features to study consumer behavior, that can make your successful in your business. If it is a B2C or B2B business give important to consumer behavior and see the positive changes in your business.
Understanding purchasing and consumption behavior is a key challenge for marketers. Consumer behavior, in its broadest sense, is concerned with understanding both how purchase decisions are made and how products or services are consumed or experienced. Consumers are active decision-makers.
They decide what to purchase, often based on their disposable income or budget. They may change their preferences related to their budget and a range of other factors.
Some purchase decisions involve long, detailed processes that include extensive information search to select between competing alternatives.
Other purchase decisions, such as impulse buys or habitual purchases, are made almost instantaneously with little or no investment of time or effort in information search.
Some purchase decisions are made by groups (such as families, households or businesses) while others are made by individuals.
When a purchase decision is made by a small group, such as a household, different members of the group may become involved at different stages of the decision process and may perform different roles.
For example, one person may suggest the purchase category, another may search for product-related information while yet another may physically go to the store, buy the product and transport it home. It is customary to think about the types of decision roles; such as:
The person who proposes a brand (or product) for consideration (something in return)
Someone who recommends a given brand.
The person who makes the ultimate purchase decision.
The one who orders or physically buys it.
The person who uses or consumes the product.
For most purchase decisions, each of the decision roles must be performed, but not always by the same individual.
For example, in the case of family making a decision about a dining-out venue, the father or mother may initiate the process by intimating that he/she is too tired to cook, the children are important influencers in the overall purchase decision, but both parents may act as joint deciders performing a gate-keeping role by vetoing unacceptable alternatives and encouraging more acceptable alternatives.
The importance of children as influencers in a wide range of purchase contexts should never be underestimated and the phenomenon is known as pester power.
To understand the mental processes used in purchasing decisions, some authors employ the concept of the “black box”; a figurative term used to describe the cognitive and affective processes used by a consumer during a purchase decision.
The decision model situates the black box in a broader environment which shows the interaction of external and internal stimuli (e.g. consumer characteristics, situational factors, marketing influences, and environmental factors) as well as consumer responses.
The black box model is related to the black box theory of behaviorism, where the focus extends beyond processes occurring inside the consumer and also includes the relation between the stimuli and the consumer’s response.
The decision model assumes that purchase decisions do not occur in a vacuum. Rather, they occur in real time and are affected by other stimuli, including external environmental stimuli and the consumer’s momentary situation.
The elements of the model include interpersonal stimuli (between people) or intrapersonal stimuli (within people), environmental stimuli and marketing stimuli.
Marketing stimuli include actions planned and carried out by companies, whereas environmental stimuli include actions or events occurring in the wider operating environment and include social factors, economic, political and cultural dimensions.
In addition, the buyer’s black box includes buyer characteristics and the decision process, which influence the buyer’s responses.
The black box model considers the buyer’s response as a result of a conscious, rational decision process, in which it is assumed that the buyer has recognized a problem, and seeks to solve it through a commercial purchase.
In practice, some purchase decisions, such as those made routinely or habitually, are not driven by a strong sense of problem-solving. Such decisions are termed low-involvement and are characterized by relatively low levels of information search/ evaluation activities.
In contrast, high involvement decisions require a serious investment of time and effort in the search/ evaluation process.
Low involvement products are typically those that carry low levels of economic or psycho-social risk. High involvement products are those that carry higher levels of risk and are often expensive, infrequent purchases.
Regardless of whether the consumer faces a high or low involvement purchase, he or she needs to work through a number of distinct stages of a decision process.
5 common factors Influencing Consumer Behavior
Consumer behavior can be broadly classified as the decisions and actions that influence the purchasing behavior of a consumer. What drives consumers to choose a particular product with respect to others is a question which is often analyzed and studied by marketers. Most of the selection process involved in purchasing is based on emotions and reasoning.
The study of consumer behavior not only helps to understand the past but even predict the future. The below-underlined factors pertaining to the tendencies, attitude, and priorities of people must be given due importance to have a fairly good understanding of the purchasing patterns of consumers
5. Marketing Campaigns
Advertisement plays a greater role in influencing the purchasing decisions made by consumers. They are even known to bring about a great shift in market shares of competitive industries by influencing the purchasing decisions of consumers. The Marketing campaigns done on regular basis can influence the consumer purchasing decision to such an extent that they may opt for one brand over another or indulge in indulgent or frivolous shopping. Marketing campaigns if undertaken at regular intervals even help to remind consumers to shop for not so exciting products such as health products or insurance policies.
4. Economic Conditions
Consumer spending decisions are known to be greatly influenced by the economic situation prevailing in the market. This holds true especially for purchases made of vehicles, houses and other household appliances. A positive economic environment is known to make consumers more confident and willing to indulge in purchases irrespective of their personal financial liabilities.
3. Personal Preferences
At a personal level, consumer behavior is influenced by various shades of likes, dislikes, priorities, morals, and values. In certain dynamic industries such as fashion, food, and personal care, the personal view and opinion of the consumer pertaining to style and fun can become the dominant influencing factor. Though advertisement can help in influencing these factors to some extent, personal consumer likes and dislikes exert greater influence on the end purchase made by a consumer.
2. Group Influence
Group influence is also seen to affect the decisions made by a consumer. The primary influential group consisting of family members, classmates, immediate relatives and the secondary influential group consisting of neighbor’s and acquaintances are seen have a greater influence on the purchasing decisions of a consumer. Say, for instance, the mass liking for fast food over home-cooked food or the craze for the SUV’s against small utility vehicle are glaring examples of the same.
1. Purchasing Power
The purchasing power of a consumer plays an important role in influencing consumer behavior. The consumers generally analyze their purchasing capacity before making a decision to buy any products or services. The product may be excellent, but if it fails to meet the buyers purchasing ability, it will have a high impact on it its sales. Segmenting consumers based on their buying capacity would help in determining eligible consumers to achieve better results.
Understanding, analyzing and keeping track of consumer behavior is very critical for a marketing department to retain their position successfully in the market place. There are various other factors too that influence consumer behavior apart from the four listed above.
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