Discuss consumer behavior and how it applies to decision making in business and marketing.
If you’re in business or marketing, then you’ve probably heard the term “consumer behavior.” But what does it mean? And how can we use this information to make better decisions? In this blog post, I’ll explain why consumer behavior matters and show you how to use it in your own business and marketing strategy.
Consumer behavior is the study of how people act, think and feel when making decisions. It’s defined by the type of decision-making process individuals go through when they’re trying to decide what product or service (or brand) to purchase (Trudel, 2019). This can include a conscious decision to acquire something, as well as an unconscious or reflexive response that happens before we even know it ourselves—like when you look down at your cell phone and realize you’ve been scrolling through social media all day!
Consumer behavior has been studied for decades now because it has such a huge impact on marketing efforts—both online and off—and businesses worldwide are constantly looking for new ways to connect with their customers more effectively than ever before (Trudel, 2019).
Business and Marketing Strategy
- Understanding consumer behavior can help you make better business and marketing decisions.
- In order to understand consumer behavior, it’s important to study the way consumers spend their time. For example, if you have a product that is targeted toward children or seniors, then that information will be helpful when developing your product strategy (Olson et at., 2018).
Psychographics are the “who” and “what” of a consumer, not just the “what”. They refer to lifestyle, attitudes, opinions and values that influence how consumers make decisions.
Psychographic information can be used to segment markets by collecting data from a sample of customers who have been selected based on their psychographic profiles (or characteristics). This will help you understand who your target market is and where they live so that you can develop marketing strategies tailored specifically for them (Olson et at., 2018).
The economic factors are the most important in determining your customers’ buying habits. These include:
- Age, education and purchasing power (the ability to buy)
- Economic trends and conditions such as inflation, unemployment and interest rates
Social factors are the attitudes, beliefs and behaviors of people in a society. Social factors influence consumer behavior and can be influenced by cultural influences (e.g., religion), economic influences (e.g., price) or personal influences (e.g., age).
Social media has become an important tool for marketers to reach their target audiences with relevant content that resonates with them on an emotional level; however, it’s important to understand how social media users interact with each other as well as their behavior when using these platforms so you can tailor your marketing strategy accordingly!
Cultural influences on consumer behavior are at play in every decision you make. You may not realize it, but your choice of brand, product or service is influenced by factors such as:
- The culture of your country and its people.
- How that culture has evolved over time. For example, today’s American culture is very different from what it was during our grandparents’ time (or even before). As a result, we have different wants and needs than they did at any point in history! Even though something may seem like an obvious choice for someone born here—like Oreos—it may not be so appealing to someone who grew up eating only French fries and steak every day (and never had any experience with cookies).
- The economic climate outside of our homes (and inside them). If there’s no money around because everyone else has lost theirs too many times now…well then maybe it doesn’t matter how much fun you had last night either!
Personal influences are a person’s internal and external motivators, perception of the product or service, attitude towards it and personality. Personal influences can be conscious or unconscious.
Personal influences can be positive or negative in nature, long term (e.g., motivation) or short term (e.g., lifestyle).
Product features are the tangible benefits of a product. Features can be functional, emotional or symbolic in nature (Olson et at., 2018). A feature is considered “tangible” when it has something tangible to offer—for example, if you buy an umbrella that comes with an umbrella holder on the handle that allows you to hang it up when not in use (which would be considered a functional feature).
Features can also be intangible; for example, if someone buys your product because they like the way it looks or feels (emotional), then this would be considered an economic benefit for them and not so much of a physical benefit as with other products. Finally, some features have no price tag associated with them at all—such as using social media platforms like Facebook or Twitter—and instead rely on word-of-mouth advertising instead of traditional marketing channels such as television commercials or print ads.
Price and Value
Price is a function of value. If you are selling something for more than it’s worth, you have to sell more units in order to make up the difference. If you want to decrease your sales volume and increase price, all you need to do is reduce the perceived value of your product or service so that people don’t see as much value in buying it at full price (Olson et at., 2018).
Price and Value
Let’s look at an example: You’re selling a $300 pair of shoes on Amazon Prime Day (which happens every year). You set up an ad saying “The best deal ever!” and give away free shipping if customers spend over $100 with your brand—but nobody buys anything! Why? Because even though they might think they’re getting a great deal with free shipping, no one wants their money back after seeing all these other brands offering similar products for cheaper prices elsewhere online! So instead of doing what people expect from Amazon Prime Day deals (selling out), why not drop prices? This will increase demand but also keep them happy because now there are plenty more options available without having to pay too much extra money for shipping charges; therefore decreasing competition between sellers within each category (i)#2
Understand consumer behavior so you can make better business and marketing decisions.
Consumer behavior is the study of how individuals, groups and societies choose, buy, use and dispose of products, services and ideas. It can be defined as “the way people act in response to choices or opportunities presented in a market place environment”. Understanding consumer behavior helps you make better business and marketing decisions because it explains why consumers do what they do (Olson et at., 2018).
The idea of consumer behavior and how it applies to decision making in business and marketing is an interesting one. It is easy to get lost in the minutia of data and trends but if you take a step back and look at the bigger picture, it can help you make better decisions when working with your customers.
Trudel, R. (2019). Sustainable consumer behavior. Consumer psychology review, 2(1), 85-96. https://myscp.onlinelibrary.wiley.com/doi/abs/10.1002/arcp.1045
Olson, E. M., Slater, S. F., Hult, G. T. M., & Olson, K. M. (2018). The application of human resource management policies within the marketing organization: The impact on business and marketing strategy implementation. Industrial Marketing Management, 69, 62-73. https://www.sciencedirect.com/science/article/abs/pii/S0019850118300440