The manner in which consumers behaves in the market is termed as consumer behaviour. Consumer behaviour studies on what basis customers make buying decisions. Different consumers react differently in the markets because of the difference in their behaviours.
It specifies different likes & dislikes influencing the decisions of the customer while making purchases. The study of consumer behaviour is important for every business to serve their customers better. It gives a clear picture of what consumers want. Nowadays, businesses are using customer relationship management technology to understand their customer properly.
Nature of consumer behaviour
- Consumer Behavior of a consumer is influenced by different factors. These factors include cultural & social factors, various economic, psychological & personal factors.
- Consumer Behavior is a process consisting of several stages. This process starts from arising of need, then searching & evaluating different products & finally making purchases. It also includes after purchase evaluation of product.
- It differs from person to person. Different persons react differently in the market & make purchases on the basis of different factors. This is due to the difference in psychology & nature of different peoples.
- Consumer behaviour is always a changing concept. It is not constant & always undergoes a change. Over a period of time, it continuously keeps on changing due to change in factors like education, income level & age of the person.
- Information available in the market affects consumer behaviour directly. Unless sufficient information is not available to customers, they are hesitant to make purchases.
- It is important for businesses in making their marketing strategies. After understanding the behaviour of their consumers, business gets full information regarding them. This will help them in satisfying there wants in a more suitable way.
Theories of Consumer Behavior
Consumer Behavior theories can be classified into four broad categories i.e. Psychological theories, Socio-cultural theories, Psycho-analytical theories and Economic theories.
Psychological theory is one of the important theory of consumer behaviour. According to this, consumer behaviour is influenced by his experience. This experience is acquired by the consumer through repetitive buying & post-purchase experience. He is attracted through the consumer awareness schemes & various advertisement in the market.
He learns through these two techniques & takes his decisions. Most interesting & frequent advertisements have great effects on consumer buying behaviour. Income of consumer also has great influence over consumer behaviour. Consumer experience & knowledge are two main factors affecting consumer behaviour.
Social cultural Theories
Social cultural theory states society culture, fashion & trend have great influence over consumer behaviour. According to this, consumers behaves according to his group in society. Consumers do not behave according to their personal choices & preferences. Businesses acquire information from society for attracting customers efficiently.
According to this, personality is main factor behind consumer behavior. There are there 3 main components that make up individual personality: ego, id & superego.
Interaction between these 3 makes up & influence consumer behaviour. It is the one that provides pleasure. Moral issues are covered under superego & ego is go between. This eventually helps consumers in deciding buying decisions.
Economic theory of consumer behaviour
Economic theory states that consumer behaviour explains the distribution of consumer income. There are 2 theories included under the economic theory i.e. Indifference preference theory & Utility theory of demand. As per Utility theory, customer satisfaction is main point attracting consumer behaviour.
Here the utility of the product directly induces consumers to buy it. More is a utility, more is consumer attracted towards making purchase decisions. Under indifference preference theory, consumer preference towards particular goods & services attracts his behaviour. Here the nature of goods is the influencing factor rather than satisfaction level.