Consumer Behaviour: Buying Process & Factors influencing Consumer | UGC NET Commerce Preparation Course PDF Download

What is consumer behavior?

Consumer behavior refers to the actions and decisions that individuals or households make when selecting, purchasing, using, and disposing of products or services. It involves a complex interplay of psychological, sociological, and cultural factors that influence how consumers interact with the market.

Consumer behavior is a multi-step process that includes problem identification, data collection, exploration of options, purchase decision-making, and post-purchase evaluation. Throughout these stages, consumers are influenced by personal beliefs, societal norms, marketing efforts, product attributes, and environmental factors.

Understanding consumer behavior is crucial for businesses to develop effective marketing strategies and offer products and services that meet customer needs and desires. By analyzing and interpreting data on consumer behavior, marketers can identify trends, forecast demand, and make informed decisions regarding product development, pricing, promotion, and distribution.

Consumer behavior in marketing

Consumer behavior is crucial in marketing as it elucidates how consumers decide what products to purchase, when to make their purchases, and from whom to make them. Marketers can craft effective marketing strategies that target the appropriate consumers with the right message at the right time by comprehending consumer behavior.

Understanding consumer behavior affects marketing in various ways:

Segmentation:

• Consumer behavior research assists marketers in segmenting markets based on behavior. By recognizing these segments, marketers can adjust their marketing messages and strategies to better resonate with each demographic.

Product design:

• Marketers use consumer behavior data to set appropriate price points for products and determine effective pricing strategies for different market segments.

Pricing Strategies:

• Consumer behavior research aids in creating branding strategies that resonate with consumers, fostering brand loyalty through understanding consumer perceptions and attitudes towards brands.

Branding:

• Consumer behavior insights assist in crafting brand messages and strategies that connect with consumers, strengthening brand loyalty by aligning with consumer sentiments.

Why Understanding Consumer Behavior is Critical

Businesses invest significant time and resources in developing their products or services. It is vital that these offerings align with consumer needs to prevent substantial losses. Therefore, understanding what consumers desire and are inclined to purchase is paramount to ensure the acceptance of products and brands.

Better Understanding for Marketing Strategies:

• Given the ever-evolving living standards, trends, and technology, consumers' preferences continuously shift. Recognizing how these elements influence buying behaviors enables organizations to tailor their messaging effectively. Insights into consumer purchase patterns empower marketers to achieve their goals.
• Better marketing and communications: As living standards, trends, and technology change, consumers' choices evolve. Understanding these influences on buying habits allows organizations to adapt their messaging. Insights into consumer purchase behavior empower marketers to meet their objectives.

Improving Customer Retention:

• Retaining existing customers is more beneficial than acquiring new ones. Selling new products and services to existing customers is easier than attracting new ones. Building strong relationships with customers fosters brand loyalty and positive word-of-mouth promotion.
• Customer loyalty can significantly benefit a business as satisfied customers tend to share their positive experiences with others. Entrepreneurs aiming to grow their companies should focus on retaining as many customers as possible.

Increase Customer Loyalty:

• Understanding customer behavior is crucial for enhancing customer loyalty, leading to increased sales and a stronger brand presence. Analyzing sales trends can help in offering discounts and recommending the most suitable products and services to customers.

Better Plan Inventory:

• Researching customer attitudes aids in inventory and raw material planning.
• For service-based businesses, it assists in human resource planning.
• Identifying demand trends helps in adjusting purchase orders to suppliers.
• Consumer behavior data aids in balancing demand and supply effectively.

Types of Consumer Behavior for Effective Marketing Strategies

Understanding consumer behavior is crucial for marketers to develop effective strategies and meet customer needs. Let's delve into the four main types of consumer behavior that businesses encounter:

Complex Buying Behavior:

• Complex buying behavior occurs when customers are actively engaged in the decision-making process and are well-informed about the differences between brands. They engage in thorough research, gather information, and evaluate various alternatives before making a purchase.

Dissonance-Reducing Buying Behavior:

• Dissonance-reducing buying behavior is observed when individuals make significant or risky purchases and later experience discomfort or uncertainty about their decision. To alleviate this discomfort, consumers may seek reassurance, additional information, or feedback from others.

Habitual Buying Behavior:

• Habitual buying behavior is characterized by customers making purchases with minimal deliberation or information search. These consumers rely on past experiences, brand loyalty, and buying habits to guide their purchase decisions. They often buy out of habit, convenience, or familiarity.

Variety-seeking buying behavior:

This type of behavior happens when customers are not deeply involved in the purchase decisions but seek variety or uniqueness in their purchases. They may most often change brands or products to satisfy their curiosity or need for variety.

Factors Influencing Consumer Behavior

Consumer behavior is shaped by a variety of external and internal factors, including situational, psychological, environmental, marketing, personal, familial, and cultural influences.

To effectively reach their target audience, businesses gather data to inform their decision-making. While some factors may have a short-term impact and others may be more enduring, they all play a role in determining whether a person will make a purchase.

Situational Factors:

• Situational factors are temporary aspects such as a store's physical environment like its location, layout, colors, music, lighting, and even scent. Companies strive to optimize these factors to be favorable to consumers. Other factors in this category include holidays, time of day, and consumer moods.

Personal Factors:

• Personal factors encompass demographic details like age, gender, income, and occupation. Additionally, they delve into individual interests and opinions. Companies delve deeper into consumer lifestyles to gain a comprehensive understanding, including their daily routines and leisure activities.

Social Factors:

• Social factors encompass aspects such as social class, educational level, religious and ethnic background, sexual orientation, and the influence of family, friends, or social networks. Various cultures have distinct customs and rituals that shape lifestyles and purchasing decisions. Typically, individuals within the same social class show similar buying behaviors, and family is considered one of the most significant influences on consumer choices.

Psychological Factors:

• Psychological factors include an individual's ability to process information, their perception of needs, and their mindset. These elements affect how consumers respond to marketing efforts, with their reactions being influenced by their personal beliefs and mental state.

How to Collect Data on Consumer Behavior?

To comprehend consumer buying behavior, it's essential to grasp how consumers perceive and evaluate the various options in the market, their decision-making processes, and how they select among different choices.

The motivations guiding consumer behavior are diverse, necessitating the use of various market research methods. These approaches should encompass both qualitative and quantitative data. Some common data collection methods include:

Surveys:

• Surveys are widely used for gathering data on customer behavior. Whether conducted online, over the phone, or in person, surveys offer quantitative insights into customer opinions, preferences, and behaviors.

Focus Groups:

• Focus groups consist of small, guided discussions among consumers about a specific product or service. They yield qualitative data on consumer opinions and perspectives, shedding light on how customers interact with offerings.

Interviews:

• Conducting consumer interviews can yield comprehensive data on customer behavior, attitudes, and preferences. These interviews, whether in-person or over the phone, provide qualitative information complementing quantitative data.

Observations:

• Observational research involves observing and documenting consumers in their natural environments. This method helps in identifying behavior patterns and provides insights into consumer interactions with products and services.

How QuestionPro helps in consumer behavior research? 

QuestionPro is an all-in-one survey software platform that can assist researchers in a variety of fields, including consumer behavior research. Here are some ways QuestionPro can help with research on customer behavior:

Designing survey: 

• QuestionPro offers a variety of survey templates and question types for creating surveys that measure various aspects of consumer behavior. The platform allows for survey customization to meet specific research objectives.

Targeting respondent: 

• QuestionPro enables researchers to target specific demographic, behavioral research, and preference groups of consumers. This aids in the collection of a sample group that is more likely to offer useful insights.

Collecting Data:

• Researchers can gather data using QuestionPro across various channels like email, SMS, social media, and websites. Additionally, the platform supports offline data collection through a mobile application.

Analyzing Data:

• QuestionPro offers a range of data analysis tools to aid researchers in interpreting the gathered information. These tools include data visualization, text analytics, sentiment analysis, and statistical analysis.

Reporting Insights:

• QuestionPro empowers researchers to present data insights in diverse formats like charts, tables, and reports. Moreover, the platform facilitates the sharing of insights among team members and stakeholders.

QuestionPro serves as a valuable tool for researchers engaged in consumer behavior studies. It provides a comprehensive solution for survey research, enabling researchers to gain reliable and actionable insights into consumer behavior.