Meaning of Consumer Behaviour
Consumer behaviour simply means how consumers behave in the market. It defines the way in which consumers purchase products & services for satisfying their wants. It basically consists of likes & dislikes of customers which influence his decision while purchasing products.
It is a concept which consists of many stages starting from arising of a need till purchase of a product for end-use. Different consumers respond differently to the market. It is an important concept for every business to understand its customers. This helps in better fulfilling of demands of the customers.
Businesses use customer relationship management technology to understand their consumers properly. It is a database which collects & store different information about their customers. This information helps in understanding the behaviour of the customers. Nature of Consumer behaviour is discussed below.
Nature of Consumer Behaviour
Complex in Nature
Consumer behaviour is complex in nature as all persons differ in their needs and wants. Each individual has their own unique needs and accordingly, they behave differently in the market.
It is a very difficult task for marketers to recognise the needs and patterns of each individual. Therefore, it becomes an overall complex job for the business to identify each consumer’s behaviour and targets them accordingly.
Consumer behaviour is a systematic process consisting of a series of steps involved in buying decisions of consumers. It is related to how consumers make their buying decision. The buying decision of consumers involves different steps which are: Need identification to buy product, searching for information related with the product, making list and evaluating different options available, finally making a purchase decision and at last post-purchase evaluation done by the marketer.
Keeps on Changing
Consumer behaviour is always changing concept and does not remain constant. It keeps on changing with the time which is due to the following changing factors: age, income level, education level of consumer.
Same products may be liked by the same consumer who once hated them. For example, Kids have more interest in toys during their childhood but as they grow up as teenagers they lose all their interest.
The manner in which the consumer spends and makes buying decision reflects his status. Not only the behaviour of the consumer is influenced by its status but his behaviour also reflects his status in society.
People who spend more and buy luxury items are considered rich and high-status people by society. These high priced goods adds pride to their personality.
Varies from Region to Region
Consumer behaviour is different for different region, states and countries. It differs from place to place. Rural population tends to spend less and are basically conservative in nature. They do not like to spend on luxury items despite having enough funds due to their psychological factors.
They have a different approach from an urban population related to buying decision. However, the rural population tends to spend more and buy luxury items. They even take loans to fulfil their needs for luxuries if are short of funds.
Differs from Product to Product
Consumer behaviour varies from product to product. Same product may be attractive for one group of consumers but not for another group. A consumer may have more interest and buys more quantity of one product and buys less or even no quantity of another product. Teenagers like to spend heavily on bikes, cars, cell phones and branded clothes to look attractive, but they would not spend much on their academics.
Vital for Marketers
Consumer behaviour is crucial for marketers to perform their duties effectively. Marketers should have perfect knowledge of their target customers buying behaviour. It will help them in understanding their likes and dislikes and also the factors influencing their buying decisions.
Marketer can take appropriate actions accordingly to attract customers. It helps the companies in developing the products as per peoples demand by providing information collected by them.
Improves Standards of living
Consumer behaviour has an important role in improving the standards of living of people. When consumers spend more on buying different products and services, their standard of living is improved.
Higher is the spending of a person, higher is the standard of living of a person. On the other hand, despite having enough funds if a person spends less than his standard of living is low. Therefore, the level of spending directly influences a person’s living standards.
Importance of Consumer Behaviour
Consumer behaviour study helps the businesses in understanding their customers. They have full information about their customer’s likes & dislikes. This helps in satisfying the wants of their customers properly & efficiently.
Business will offer the right product to its customers. Customers will become loyal if getting the right product. This will increase sales & revenue for business.
Setting prices is one of the important & difficult task for any business. It directly influences the demand for its products in the market. By understanding consumer behaviour, it becomes easy to determine whether the customer is price concerned or quality concerned.
There are some customers in the market who buys products only because they are cheaper. Understanding their behaviour will help companies to produce as per their price limit.
Designing Sales Promotion Methods
Sales promotion activities are the different methods used for inducing customers to buy a product. Promotion activities are effective if they present clearly the features of the product as per customer needs.
These activities should affect the psychology of customers directly & inducing them in buying. Understanding their behaviour will help in easy understanding of factors affecting customers buying decisions.
Helps In Competitive Analysis
Facing competition in today’s market is a very tough job for every business. There is a large number of competitors available in the market offering the same products. It becomes difficult to attract customers towards your products.
Understanding their behaviour helps in analysing the reasons for which they are going for competitors’ products. It helps in understanding the advantages that competitors are possessing. This help in facing the competition in a better way.
Helps In Forecasting
Forecasting helps in taking competitive advantages from the businesses. If the business is able to forecast about the future it can easily take several advantages. Consumer behaviour enables the businesses in easy forecasting of sales & demand forecasting.
It helps companies in saving their resources, time & cost. They can easily predict future demands & focus on their operations.
Helps In Targeting & Segmentation
Segmentation & Targeting helps in serving customers properly. It segments the customers according to their taste & class. Segmentation helps in serving the customer better. It helps businesses to focus on customers as per their needs.
After understanding consumer behaviour, it becomes easy to segment different customers into different classes.
Helps In Designing Product Portfolio
Product portfolio refers to a set of different products offered by businesses. Every business product portfolio must consist of all class of products. It should have products for all class of peoples in the market.
Understanding customer behaviour helps the businesses in easy understanding demand of market. This will help in proper designing of product portfolio for the businesses.