This article is related to consumer behaviour scope, need, and importance. A candidate who learns consumer behaviour should go through this article.
Consumer Behaviour, in simple words, it means how consumers behave in the market. It defines the process by which consumers make a purchase decision to satisfy their needs and wants. It consists of likes and dislikes of consumers and which influences their buying decision. It is a concept which involves many stages from arising needs to the purchase decision.
Every customer mindset is not the same; they all vary from each other. Thus, every business needs to understand its customers. It helps the organisation to fulfil consumer's demand and desire. Organizations use customer relationship management to know their customers properly. It is a database which collects more information about their customers.
Consumer behaviour may describe the decision process and individual engagement in evaluating, acquiring, using goods and services.
What is Consumer Behaviour?
Consumer behaviour is the process or way by which products and services are consumed, it includes the consumer's emotional, mental, and behavioural responses.
The study of consumer behaviour involves individual quality, such as demographics and other elements. Marketers expect that by understanding what makes a consumer buy particular goods and services, they will be able to determine what product is demanded by the consumer and what is old-fashioned. The consumer's role may vary in different situations; for example, a mother plays the role of an influencer in a child's purchase process.
Given below are the popular definitions of consumer behaviour.
As per the definition given by Engel, Blackwell, Mansard, "A consumer behaviour is the process of decision making and action while consumer goods or services for personal use."
Another definition is given by Louden and Bitta, "Consumer behaviour is the process and physical activity, which individuals engage in evaluating, using or disposing of product or services."
According to Blech and Blech, "Consumer behaviour is the process and activity which involves people when searching for, selecting, evaluating, using, and disposing of product or services to satisfy their needs and desire.”
Scope of Consumer Behaviour
The words such as consumer behaviour, individual buyer behaviour, and buying behaviour of the consumer are all the same. Consumer behaviour is the study of how individuals, groups, and organizations select, buy, use the goods and services, ideas, or experiences to fulfil the buyer's needs and wants.
The information given below will help you to understand the behaviour of the customers. Companies conduct various research programs to collect information about their target customers. The scope of consumer behaviour is as follows.
- Demand Forecasting
- Marketing Management
- Non-profit and Social Marketing
- Selecting Target Market
- Market Mix
- Educating Customers
- Assists in Designing Product Portfolio
Consumer behaviour helps in the forecasting of the demands for the business. Every business identifies the needs and wants of the customers by understanding their behaviour. Forecasting helps them to find out the unfulfilled demands in the market easily. If the company knows what their consumer wants, they can design and produce the product accordingly.
The behaviour of the consumer plays an important role in forecasting the demand for the products. It helps the company to identify the market opportunity available to them.
Effective business managers know the importance of marketing towards the success of the business. Understanding consumer behaviour is essential for the long-run success of any marketing program. A better understanding of consumer needs and wants help the business to plan and execute the marketing strategies accordingly.
Proper understanding of the behaviour of the consumer makes the company know its customers in a better way. That ultimately helps businesses to strategize and implement marketing in a better way.
Non-profit and Social Marketing
In today's world, every non-profit business-like government sector, religious sector, universities, charitable institution, runs the business's overall activity by implementing proper marketing plans for the business. Also, they contribute to solving the problems of society. Thus, a clear consumer behaviour process and decision-making contributed efforts towards the success of the business.
Selecting Target Market
Consumer behaviour helps the organization to select its target group from the market. Studying and identifying consumer behaviour helps them to know the consumer segments with distinct features and wants. It helps in segmenting the overall market into different groups.
Proper development and designing of all-important elements like product, price, place, and promotion are essential for every business. It helps them to identify the likes and dislikes of the customers. This helps marketers to design optimum marketing mix plans and improve the effectiveness of marketing strategies. The proper implementation of a marketing mix helps organizations to attract more customers, thereby increase profit.
Consumer behaviour helps the marketer to know how consumers spend on buying decisions. By understanding the customer's behaviour, a marketer can easily get an idea of how they can improve their buying decision. The market can guide and suggest a way to save their money and give them better options. Customers get aware of the opportunities available to them as per their behaviour.
Assists in Designing Product Portfolio
Designing the right product portfolio is a challenging task for every business. Every business should design a portfolio that consists of all classes of the product. Consumer behaviour helps in identifying the class and needs of the customers. It helps businesses to design the product which fulfils the requirements of their customers. In this way, a business can design the optimum portfolio and serve its customers better.
Importance of Consumer Behaviour
It is very important to understand the behaviour of the customers to achieve the goal of the business. There is various importance of consumer behaviour; some of them are given below.
The study of consumer behaviour affects the production policies of the business. Consumer behaviour discovers, needs, tastes, choices of consumers, and such discovery enables the business to plan and implement products according to these specifications. Every business needs to be in constant touch with the change in consumer behaviour so that necessary changes in products are made on time.
Consumer behaviour is equally important in having price policy. The buyer only purchases your product, which is cheaper or has distinctive features than your competitor's.
Decision regarding the channel of distribution
The goods and services which are sold solely based on the low prices must have an economical distribution channel. In the case of such products like T.V. sets, Air Conditioner, etc., must have different distribution channels. Thus, decision-related to the channel of distribution is taken based on consumer behaviour.
Decision regarding sales promotion
Consumer behaviour plays a vital role in deciding the sales promotion. It enables the producer to motivate and encourage the consumer to make a purchase decision, and the same is used in the promotional campaigns to awaken the desire to purchase the product.
Exploiting marketing opportunities
The study of consumer behaviour helps a marketer identify the needs, wants, desires and problems, etc. of the consumer. This information and knowledge help the marketer exploit market opportunities and meet the challenges in the market.
Consumer do not always act or react predictably
The consumers compare the past to react to price levels as if price and quality had positive relations. Today, the consumer gives less value for money but gives more attention to superior features.
Highly diversifies consumer preferences
The consumer can shift from your product to another due to the unavailability of choices. Thus, a proper understanding of consumer behaviour will help you identify changes in consumers' preferences. It also helps in retaining and sustaining the customer for a long time.
Implementing marketing concepts
All customers need to be given equal importance; therefore, implementing and identifying the target market before production is important to deliver the desired customer satisfaction.