Application Nature and Scope of consumer behaviour
The term consumer behavior, individual buyer behavior, end-user behavior, and consumer buying behavior all stand for the same. Consumer behavior is the study of how individuals, groups, and organizations select buy, use, and dispose of goods and services, ideas, or experiences to satisfy their needs and wants.
Consumer behavior may be defined as the decision process and physical activity individuals engage in when evaluating, acquiring, using, or disposing of goods and services.
According to Belch and Belch “consumer behavior is the process and activities people engage in when searching for, selecting, purchasing, using, evaluating and disposing of products and services so as to satisfy their needs and desires”.
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Nature of Consumer Behaviour:
Systematic process: Consumer behavior is a systematic process relating to the buying decisions of the customers. The buying process consists of the following steps :
- Need identification to buy the product
- Information search relating to the product
- Listening and evaluating the alternative
- Purchase decision
- Post-purchase evaluation by the marketer
Influenced by various factors: Consumer behavior is influenced by a number of factors the factors that influence consumers include marketing, personal, psychological, situational, social and cultural, etc.Different for different customers: All consumers do not behave in the same manner.
Different consumers behave differently. The difference in consumer behavior is due to individual factors such as the nature of the consumer’s lifestyle, culture, etc.
Different for different products: Consumer behavior is different for different products there are some consumers who may buy more quantity of certain items and a very low quantity of some other items.
Vary across regions: Consumer behavior varies across States, regions, and countries. For instance, the behavior of urban consumers is different from that of rural consumers. normally rural consumers are conservative (traditional) in their buying behavior.
Vital for marketers: Marketers need to have a good knowledge of consumer behavior they need to study the various factors that influence consumer behavior of the target customers. The knowledge of consumer behavior enables marketers to take appropriate marketing decisions.
Reflect status: Consumer buying behavior is not only influenced by the status of a consumer coma but it also reflects it. Those consumers who owned luxury cars, watches, and other items are considered by others as persons of higher status.
Result in spread effect: Consumer behavior as a spread effect. The buying behavior of one person may influence the buying behavior of another person. For instance, a customer may always prefer to buy premium brands of clothing, watches and other items, etc. This may influence some of his friends, neighbors, and colleagues. This is one of the reasons why marketers use celebrities like Shahrukh Khan, Sachin to endorse their brands.
Undergoes a change: The consumer behavior undergoes a change over a period of time depending upon changes in age, education and income level, etc, for example, kids may prefer colorful dresses but as they grow up as teenagers and young adults, they may prefer trendy clothes.
Information search: Search for information is common consumer behavior. Consumers cannot purchase goods and services if they are unaware that a good or service exists. When a consumer decides to buy a certain item, his decision must be based on the information he has gathered about what products our services are available to fulfill his needs. There might be a product available that would be better suited to the consumer’s needs, but if he is an awareness of the product, he will not buy it.
Brand loyalty: Brand loyalty is another characteristic of consumer behavior. Brand loyalty is the tendency of a consumer to buy product products or services from a certain company that one likes or equates with having high-quality goods and services.
For example, if Naina’s first car was a Honda as a teenager and the car lasted 200,000 miles, she might have a tendency to buy hondas again in the future due to her previous positive experience. This brand loyalty may be so strong that she forgoes the information search all together when considering for next vehicle.
Scope of Consumer Behaviour:
1) Consumer behavior and marketing management: Effective business managers realize the importance of marketing to the success of their firm. A sound understanding of consumer behavior is essential to the long-run success of any marketing program.
In fact, it is seen as a cornerstone of the Marketing concept, an important orientation of philosophy of many marketing managers. The essence of the Marketing concept is captured in three interrelated orientations consumers’ needs and wants company integrated strategy.
2) Consumer behavior and non-profit and social marketing: In today’s world even non-profit organizations like government agencies, religious sects, universities, and charitable institutions have to market their services for ideas to the “target group of consumers or institution.”
At other times these groups are required to appeal to the general public for support of certain causes or ideas. Also, they make their contribution towards eradication the problems of society. Thus a clear understanding of the consumer behavior and decision-making process will assist these efforts.
3) Consumer behavior and government decision making: In recent years the relevance of consumer behavior principles to government decision making. Two major areas of activities have been affected:
i) Government services: It is increasingly and that government provision of public services can benefit significantly from an understanding of the consumers, or users, of these services.
- ii) consumer protection: Many Agencies at all levels of government are involved with regulating business practices for the purpose of protecting consumers’ welfare.
4) Consumer behavior and demarketing: It has become increasingly clear that consumers are entering an era of scarcity in terms of some natural gas and water. These scarcities have led to promotions stressing conservation rather than consumption.
In other circumstances, consumers have been encouraged to decrease or stop their use of particular goods believed to have harmful effects. Programs designed to reduce drug abuse, gambling, and similar types of conception examples.
These actions have been undertaken by government agencies non-profit organizations, and other private groups. The term “demarketing” refers to all such efforts to encourage consumers to reduce their consumption of a particular product or service.
5) Consumer behavior and consumer education: Consumer also stands to benefit directly from orderly investigations of their own behavior. This can occur on an individual basis or as part of more formal educational programs.
For example, when consumers learn that a large proportion of the billions spend annually on grocery products is used for impulse purchases and not spend according to a pre-planned shopping list, consumers may be more willing to plan an effort to save money.
In general, as marketers that can influence consumers’ purchases, consumers have the opportunity to understand better how they affect their own behavior.
Importance of consumer behavior:
1) production policies: The study of consumer behavior affects the production policies of the enterprise. Consumer behavior discovers the habits, tastes, and preferences of consumers and such discovery enables and enterprise to plan and develop its products according to these specifications. It is necessary for an enterprise to be in continuous touch with the changes in consumer behavior so that necessary changes in products may be made.
2) Price policies: Buyer behavior is equally important in having price policies. The buyers of some products purchase only because particular articles are cheaper than the competitive articles available in the market.
3) The decision regarding channels of distribution: The goods, which are sold and solely on the basis of low price mast and economical distribution channels. In the case of those articles, which week T.V. sets, refrigerators, etc. Must have different channels of distribution. Thus, decisions regarding channels of distribution are taken on the basis of consumer behavior.
4) A decision regarding sales promotion: Study of consumer behavior is also vital in making decisions regarding sales promotion. It enables the producer to know what motive prompt consumers to make purchases and the same are utilized in promotional campaigns to awaken a desire to purchase.
5) Exploiting marketing opportunities: Study of consumer behavior helps the marketers to understand the consumer’s needs, aspirations, expectations, problems, etc. This knowledge will be useful to marketers in exploiting marketing opportunities and meeting the challenges of the market.
6) Consumers do not always act or react predictably: The consumers of the past used to react to price levels as if price and quality had positive relations. Today, week value for money, lesser price but with superior features. The consumer’s response indicates that the shift had occurred.
7) Highly diversified consumer preferences: This shift has occurred due to the availability of more choice now. Thus the study of consumer behavior is important to understand the changes.
8) Rapid introduction of new products: Rapid introduction of new products with technological advancement has made the job of studying consumer behavior more imperative. For example, information technologies are changing very fast in the personal computer industry.
9) Implementing the “Marketing concept: This calls for studying consumer behavior, all customers need have to be given priority. Thus identification of target market before production becomes essential to deliver the desired customer satisfaction and delight.
Applications of consumer behavior:
1) Analyzing market opportunity: Consumer behavior study help in identifying the unfulfilled needs and wants of consumers. This requires examining the friends and conditions operating in the Marketplace, consumer’s lifestyle, income levels, and energy influences. This may reveal unsatisfied needs and wants. Mosquito repellents have been marketed in response to a genuine and unfulfilled consumer need.
2) Selecting the target market: Review of market opportunities often helps in identifying district consumer segments with very distinct and unique wants and needs. Identifying these groups, behave and how they make purchase decisions enable the marketer to design and market products or services particularly suited to their wants and needs. For example, please sleep revealed that many existing and potential shampoo users did not want to buy shampoo fax price at rate 60 for more and would rather prefer a low price package containing enough quantity for one or two washers. This finding LED companies to introduce the shampoos sachet, which become a good seller.
3) Marketing-mix decisions: Once unsatisfied needs and wants are identified, the marketer has to determine the right mix of product, price, distribution, and promotion. Where too, consumer behavior study is very helpful in finding answers to too many perplexing questions. The factors of marketing mix decisions are:i) product ii) price iii) promotion iv) distribution
4) Use in social and nonprofits marketing: Consumer behavior studies are useful to design marketing strategies by social, governmental, and not for profit organizations to make their programs more effective such as family planning, awareness about AIDS.
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