Meaning, Importance and Types of Consumer Behaviour

 

Consumer Behavior

Consumer Behavior

A market is designed for buying and selling products and services. It is a human activity aimed at satisfying human needs and wants through the exchange process. This means the goal of marketing is to satisfy the potential needs and wants of consumers for products and services. To effectively carry out marketing, we first need to understand the likes, dislikes, preferences, tastes, purchasing process, consumption patterns, buying power, purchasing location, quantity, and other relevant factors of the buyers of that product. This is where the importance of learning about consumer behavior comes into play. Let's explore the meaning, importance, types, and factors that affect consumer behavior.

Meaning of Consumer Behaviour.

We are all consumers, and in fact, everyone in this world is a consumer. We purchase and consume various goods and services in our daily lives. However, we all have different preferences. We exhibit different behavioral patterns when making purchase decisions, and we have different likes and dislikes.

For example, you may prefer using a Nokia mobile phone with an Airtel connection, while your spouse may prefer a Samsung mobile phone with a Vodafone connection. Your colleague may use a Sony Ericsson mobile phone with an MTNL connection, and your neighbor may carry a Motorola mobile phone with a Reliance connection. Similarly, you may prefer Close-up toothpaste, Lux toilet soap, and Sunsilk shampoo, while your spouse may prefer Colgate toothpaste, Dove toilet soap, and Sunsilk shampoo.

Likewise, you may have specific preferences when it comes to selecting magazines, books, brands, clothing, food, recreational activities, investment methods, the brand of your vehicle, savings options, preferred stores for shopping, and the people you associate with. You'll find that your spouse, colleagues, and neighbors have different preferences when selecting their food, vehicles, books, magazines, clothes, investments, and savings methods. When it comes to buying vehicles, people have varying choices, such as brand, size, capacity, and mileage.

The economically weaker section may purchase a car that helps them commute at a lower cost, so their preferences differ from those of wealthy individuals. Wealthy people who can afford to spend a lot of money prioritize safety, comfort, and the latest models of vehicles, with price or running cost being of least concern to them.

Furthermore, even within each category, diverse people prefer different brands. Each consumer is unique, and this uniqueness is reflected in their consumption behavior, patterns, and the purchasing process. Understanding consumer behavior provides reasons for why consumers differ from one another in their buying and usage of products and services.

The subject of consumer behavior encompasses what products and services we buy, how often we buy them, why we buy them, and where we buy them, among other issues. It draws elements from economics, psychology, sociology, and social anthropology. It seeks to understand both individual and group decision-making processes among consumers.

Consumer behavior can be defined as the actions of consumers (individuals) directly involved in the use, acquisition, and disposal of economic goods and services, including the decision-making processes that precede and determine these actions.

Importance of Understanding The Consumer Behaviour

The Significance of Understanding Consumer Behavior: Tailoring Marketing Strategies to Diverse Preferences

Understanding consumer behavior holds great importance as it allows marketers to comprehend the preferences of different consumers, enabling them to shape their marketing strategies accordingly. Human beings vary in terms of social status, nationality, age, sex, income, occupation, religion, family structure, education, and cultural background. These differences result in diverse needs among individuals. We tend to purchase products that we believe will fulfill our specific needs. By analyzing consumer behavior for a particular product or its variations, we can identify and classify different market segments. This comprehensive understanding of market segments is crucial for marketing managers to develop strategies tailored to different segments. Knowledge of consumer behavior and preferences is a vital factor that plays a significant role in the creation of effective marketing strategies.

Consumer tastes also evolve rapidly, much like the pace of technological advancements in today's world. Technological changes influence consumer preferences. To adapt to the ever-changing consumer trends, firms must continuously comprehend the latest consumer trends and tastes. Consumer behavior provides invaluable insights and guidance to marketers regarding new technological frontiers they should explore. For instance, let's consider the introduction of 4G-enabled mobile phones in India. When 4G technology was introduced and service providers began offering 4G services by the end of 2014, consumers exhibited a strong desire to purchase 4G-enabled mobile phones instead of ordinary ones. Similarly, in the early 1980s, when color television broadcasting started, consumers expressed a desire to purchase color televisions for a more lifelike viewing experience.

To identify and understand prospective customers and their buying behavior, management that embraces marketing concepts must take necessary steps to stay constantly connected with customers in order to understand their preferences, requirements, and expectations. The customer relationship department serves as a two-way communication channel between management and customers. Understanding the customer entails comprehending their short-term and long-term goals. Once the goals are identified, the firm can determine and design products that align with the consumer's objectives. The next step is to raise customer awareness about the product or service. An advertising message that explains how the product or service can help the customer achieve their goals fulfills that aspect of the process.

Identifying the goals of prospective customers can be challenging. People seldom give conscious thought to their goals or express them in a readily understandable manner. Often, consumers fail to prioritize their goals or express short-term goals that provide immediate satisfaction but lack long-term significance. These difficulties can hinder a comprehensive understanding of consumer behavior.

To select the appropriate message and advertising medium, the firm must have a reasonably accurate understanding of the specific goals of the targeted groups.

Numerous fields, such as psychology, sociology, social psychology, economics, and cultural anthropology, offer valuable insights into consumer behavior. Special markets, including government agencies and non-profit organizations, require careful study to understand their unique consumer behavior. To capitalize on the market's potential, a thorough analysis of the market is essential.

Types of Consumers

The types of consumers can be classified into two categories:

1. Personal Consumers: When you purchase a watch for your personal use, you are acting as a personal consumer. Whenever individuals buy goods and services for their own or their family's use, they fall into the category of personal consumers. The buying decisions of personal consumers are primarily influenced by their personal preferences, the availability of the products, and their affordability.

2. Organizational Consumers: When you purchase a printer for office use, you are acting as an organizational consumer. Business firms, government agencies, non-business organizations like temples, trusts, hospitals, etc., are examples of organizational consumers that purchase goods and services for their operations. Even within organizations, buying decisions are made by individuals. Therefore, the behavior patterns of organizational consumers differ slightly from those of personal consumers.

Factors Influencing Consumer Behaviour

Consumer behavior is influenced by a wide range of factors, including personality characteristics, needs, attitudes, values, economic and cultural background (such as age, sex, professional status), and social influences from family, friends, colleagues, and society as a whole. These various factors collectively impact consumer purchasing decisions and behavior.

Consumer behavior is a result of both environmental and individual influences. Consumers often adjust their purchases of goods and services to achieve their ideal self-image and project the image they want others to accept. The influence of others and individuals' psychological makeup play a significant role in controlling consumer behavior.

All the factors that influence consumer behavior can be categorized into four broad groups:

1. Psychological Factors
2. Personal Factors
3. Social Factors
4. Cultural Factors

Psychological Factors:

The starting point of the purchase decision process is a felt need for something useful. We all have needs and seek to fulfill them to improve and satisfy our lives. Urgent needs direct individuals to seek satisfaction, and these needs are referred to as motives. Motives are inner states that guide people towards the goal of satisfying a felt need. Individuals take steps or actions to reduce the tension created by their wants or needs.

Mr. Abraham Maslow (1908 - 1970) developed a valuable theory of the hierarchy of needs based on two important assumptions:

1. People are wanting animals, and their needs depend on what they already possess. Only needs that have not been fulfilled can influence human behavior. Once a need is satisfied, it no longer motivates behavior.

2. All needs can be ranked in order of importance, from low biological needs to higher-level psychological needs. An unfulfilled need at one level serves as the motivator for an individual's behavior, and once that need is fulfilled, the individual moves on to the next higher level of needs.

Maslow classified needs into five categories:

1. Physiological Needs
2. Safety Needs
3. Social Needs
4. Esteem Needs
5. Self-actualization Needs

Since no need is ever completely satisfied, there is always overlap among the different levels of needs, leaving room for further fulfillment.

1. Physiological Needs: These are the basic needs such as food, shelter, and clothing. They are the common and fundamental needs of human beings. Individuals focus on fulfilling these needs before addressing higher-level needs. When hungry, a person disregards all other needs until they obtain food to satisfy their hunger. Once physiological needs are met, individuals seek to fulfill higher-level needs.

2. Safety Needs: The second important need is to feel safe, secure, and protected from physical harm that may arise in life. Individuals take necessary steps to protect themselves from unexpected harm. Saving accounts, medical insurance, life insurance, and health club memberships are some of the tools used for self-protection. Desires for security of the body, employment, resources, morality, health, and family well-being are fulfilled at this stage.

3. Social Needs: The desire to be accepted by family, individuals, and society as a whole comes after fulfilling physiological and safety needs. To gain acceptance in society, individuals adjust their behavior to align with social norms. They change their dress code and use gadgets to match the status of the group they belong to. They seek status among their social group. Friendship, belongingness, family, and sexual intimacy are some of the needs individuals desire at this stage.

4. Esteem Needs: The next higher level of need is the desire for a sense of accomplishment, achievement, and respect from others. Status, prestige, success, self-respect, confidence, and respect from others are some of the desires at this stage. Esteem needs are present in all human beings, but only a few strive to achieve them on a significant scale. At this level, individuals not only desire acceptance but also crave respect and recognition. They aspire to stand out from the crowd.

5. Self-actualization Needs: Maslow defines self-actualization as "The healthy man is primarily motivated by his needs to develop and actualize his fullest potentialities and capacities. What man can be, he must be." Individuals strive to reach the highest potential of their capabilities and talents at this stage. Morality, creativity, spontaneity, problem-solving, lack of prejudice, and acceptance of facts are some of the needs individuals seek during this stage.