What is consumer behavior

consumer behavior

In consumer behavior, the aim is to find out what influences the buying decisions of consumers based on their emotional, mental, and behavioral responses.

In simple terms, consumer behavior refers to people’s decisions and actions to meet their wants and needs through purchasing goods and services.

Adapted from the American Marketing Association, consumer behavior occurs dynamically, fosters interaction, and involves transactions.

  • Dynamic: Consumer groups, targeted consumers, and society has dynamic thought processes, emotions, and behaviors.
  • Involves Interaction: During this process, thoughts, emotions, and actions of the individual have interacted with the external environment.
  • Involves Exchanges: An exchange of goods or services between two or more parties. People give up money and other valuable items in exchange for the goods, services, and products they want or need.

Understanding the difference between ‘customers’ and ‘consumers.’

  • When we say ‘consumer,’ who are we talking about?
  • Also, What is the difference between this term and ‘customer’?

The terms are synonymous, but there are some significant differences between them.

Customers are individuals or organizations who purchase products, goods, or services from a seller.

By contrast, a consumer is a person who uses this merchandise, product, or service.

Even though the customer purchases, they are not always the purchaser since they may have been intended as a gift or resold.

The parent who buys their child lunch is a good example. Their child is the one who gets to eat the goods, not them. They purchase the goods, but their child is the one who gets to eat them.

Also, it is essential to mention that the customer may sometimes also be the consumer. End-users of the purchased items are entitled to this. The clothing, food, or book is worn, eaten, or read by the individual.

Consumer behavior is beneficial to marketing

Why is a study of consumer behavior valuable to marketers? Check out the details of each of these goals below.

#1. Determine which products are necessary and which ones are obsolete

The last thing any business wants to do is invest a lot of money producing something that won’t sell. By knowing consumer behavior, you can determine whether your product can meet a specific need, provides something better than its competitors, or fills an entirely new – but essential – market niche.

#2. In a competitive market, to figure out the price at which a product or service will be offered

Businesses would experience constant headaches if they did not analyze consumer behavior. Ultimately, you don’t want to be too cheap when pricing your product to make a minimal profit. Still, you also don’t want to be too expensive when pricing your product, causing consumers to look at your competitors’ more affordable products instead.

#3. Determine which distribution channel is best for your product

Essentially, distribution channels refer to the places and means through which individuals and companies will access products and services. It is essential to take multiple factors into account when planning your distribution strategy, such as the quantity needed, the convenience of online or offline channels, what competitors do already, and more.

#4. In the interest of marketing

Consumer behavior should provide valuable insights into which channels will produce the best results since different types of consumers respond differently to each marketing method. What are the consumer’s preferences? Does the target audience prefer reading a magazine or browsing Instagram? An expensive marketing campaign can ruin a business’s marketing efforts, so no one wants to waste resources.

#5. The purpose of boosting revenue

Knowing how consumers behave allows you to identify valuable insights that drive valuable outcomes. Studying consumer behaviors and their decisions can help you understand how, when, where, why, and for whom people buy certain products. To boost sales and revenue, we need to ensure we implement the correct methods to make our products, goods, and services in demand.

#6. To personalize content

The importance of content personalization might be surprising for you if you thought it wasn’t a priority. Research has found that 41% of customers switched companies because of poor personalization in 2019. Technological advances, as well as the desire for highly personalized, unique content, are growing. When you collect consumer behavior data, you can tailor your content successfully to the needs and wants of each consumer.

#7. The value of customers

Identifying the ideal customer characteristics is feasible when you can correctly predict the customer’s overall value. Using this method, you can identify specific customer personas, and you can target them to engage brand-loyal customers before they discover your competitors.

#8. Optimization of content

As we have discussed, it is possible to customize the content, but how can it also be optimized to succeed? In addition to providing you with data to optimize your marketing campaigns, your consumer behavior analysis should also help you narrow down your focus on the most valuable customers, engage them via their preferred channels, or deliver content at the best time.

#9. Maintaining a customer base

What if you knew the difference between increasing customer retention by 5% and increasing profits by 25%? Retaining existing customers is also 6-to-7 times cheaper than acquiring new ones. In other words, loyalty to a business is essential, but maintaining them is even more critical. Identifying ‘good customers’ that are willing to be rewarded can be accomplished by understanding consumer behavior.


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