Consumer behavior refers to the process that includes the decision to select, purchase, use and dispose of products and services to meet the wishes or needs of individuals or groups, and all their activities.
Purchasing behavior forms the basis of consumer behavior. All studies on actions that encourage the consumer to buy or use certain products are within the scope of consumer behavior.
When it comes to marketing, reviews of consumer behavior are of great importance because, thanks to these researches, you have an insight into consumer expectations and you can understand that the factors that push a consumer to buy or to deter any decision – internal or external. This means that when you focus on data on consumer behavior, you can always launch the consumer’s favorite products or services as a business/brand. Marketing experts are aware of consumer trends and, thanks to their awareness, can design marketing efforts in the light of these findings.
All studies on consumer behavior seek answers to many questions about what, why, when, how often, and for what purpose consumers buy.
Let’s explain the situation with an example: Suppose a consumer behavior analysis is made regarding the tendency of women to buy moisturizers. Marketing experts why consumers buy moisturizers (to reduce skin problems), which is the most preferred brand (Olay, L’Oréal), how often they use moisturizers (two or three times a day), where they buy the product (supermarkets, cycle platforms) or how many times (weekly, monthly) they research. In this way, a general opinion regarding the product (humidifier) is reached and finally a much higher quality product/service is offered to the customer.
- 1 What is the Importance of Consumer Behavior for Businesses?
- 2 What Is Consumer Behavior Used For Marketing?
- 2.1 1) Creates Customer Segments.
- 2.2 2) Allows You To Retain The Customer.
- 2.3 3) Marketing Programs Compatible with Consumer Behavior are Designed.
- 2.4 4) There are Forecasts for the Market.
- 2.5 5) Offers Competitive Advantage.
- 2.6 6) Encourages the Design of New / Innovative Products.
- 2.7 7) It helps to establish a strong bond with the target market.
- 2.8 8) Allows You To Provide A Quality Customer Service.
- 2.9 Result
What is the Importance of Consumer Behavior for Businesses?
Understanding consumer behavior is critical for businesses. In order for an enterprise to be successful with both the new products to be launched and the existing product range, it is imperative that it makes sense of consumer behavior well. Because every consumer has a different mindset and therefore a completely different attitude in the purchasing process. If you cannot predict or understand the consumer’s reaction to the product/service you will sell, you are more likely to fail.
In today’s world, where things can change in the blink of an eye, consumer behavior also changes due to fashion, technology, trend, lifestyle, disposable income and many other factors. Anyone who is an expert in marketing should notice this change, and should be able to understand it in depth. It is imperative that businesses adapt all of their marketing efforts to such changes.
As you can see, consumer behavior is very important for the future of businesses.
In our article, we will talk about the importance of focusing on consumer behavior, how to do this and the ultimate benefit to businesses.
What Is Consumer Behavior Used For Marketing?
1) Creates Customer Segments.
Creating customer segments is the most effective way to separate a group of consumers from others. This also helps you create a target consumer group with the same or similar trends.
Even if you have found your target customers as a business, there may be individual differences between your customers. Each consumer group is different, so the needs and wants of each group will be different from the others. When marketing experts have sufficient knowledge of customer segments, they can design a separate marketing program for each.
This differentiation in customers / consumers will also help you organize your strategies according to this difference. In this way, you can further expand your service range and offer effective services for a wide audience.
2) Allows You To Retain The Customer.
Businesses must focus on consumer behavior, as their main goal is to attract or retain existing customers.
Moreover, consumer behavior not only brings new customers to your business, but also helps you protect the existing customer. When a customer is satisfied with a particular product, it is inevitable to repeat the purchase. Therefore, marketing activities related to the product should be designed to convince customers to buy the product over and over again.
Therefore, retaining existing customers is as important as reaching new ones. The only way to do this is to understand and consider consumer behavior.
3) Marketing Programs Compatible with Consumer Behavior are Designed.
Understanding consumer behavior allows you to create effective marketing campaigns. Each campaign you create addresses consumer groups with different behavioral tendencies.
For example, if your goal is to enter the children’s market, you can use your marketing activities such as TV ads, school programs and blogs targeting young mothers, etc. to the vehicles. In message delivery, a different approach should be used for each consumer group.
Extensive research on consumer behavior will enable businesses to understand what is driving them to buy. It can also be determined what advertising and marketing tools will reveal the consumer’s desire to purchase. In addition, the decisions of the brand / business regarding the logo, coupons, packaging and gifts should be taken within the framework of consumer behavior.
4) There are Forecasts for the Market.
Analyzes of consumer behavior will also herald any changes in the market trend. For example, today’s consumers show a serious trend towards environmentally friendly, healthy foods. The changing market trend has been noticed by many food brands, including McDonalds. So much so that even a fast food business like McDonald’s, which is based on consumer behavior, has added healthy food options to its menu.
Enterprises add tons of lira to be spent for the sake of a product that will not be sold otherwise to the company vault with every work they do regarding consumer behavior. This saves a considerable amount of money.
For example, in the summer period, no brand chooses to spend their available resources for the sake of a product that will not be sold in the summer. Therefore, they try to determine a production strategy that will save on warehouse or marketing costs by adhering to the results of analysis on consumer behavior.
5) Offers Competitive Advantage.
Another benefit of examining consumer behavior is that it allows you to find answers to many questions in your mind:
- Do Customers / Consumers prefer competitors, not you?
- Why does the consumer buy the product from your competitors, not from you?
- What are the determining factors that push the consumer towards competing products?
- What deficiencies does your product have compared to your competitors?
Examining consumer behavior makes it easier to understand competition and tackle rival companies. Setting consumer expectations means that your business/brand can gain competitive advantage.
6) Encourages the Design of New / Innovative Products.
Unfortunately, most of the latest design new products or ingenious ideas released today fail – which is 33 to 90% depending on the type of industry.
From now on, businesses are constantly striving to increase the success rate of new products or ideas. The most effective and easiest way to achieve this is to do a solid consumer behavior analysis.
For example, Nike, which focused on consumer behavior, realized that its main target group is not professional athletes, but rather it appeals to people who care for them. Nike launched an athletics campaign called ‘Find Your Greatness’ during the 2012 Olympics in London. The company aimed to involve not only high-performance athletes, but also all people regardless of their physical abilities. The campaign was the product of a data-driven analysis, and was very well planned. The brand’s message has inspired many consumers and has had such a big impact that it drives them to the brand.
7) It helps to establish a strong bond with the target market.
The biggest challenge of trying to keep up with the changing world is to keep the bond with the target market strong or to follow it closely. So, what do you think these fast changes around the world are behind the scenes? Of course, constantly changing consumer behavior!
Today’s consumers have more options/opportunities than before, which means they can easily leave the current business and switch to those who have the capacity to offer much better products/services.
Therefore, the superior feature required to make progress in the twenty-first century is a keen vision and adaptability.
Behind the market trends and losing all the relevance and bond with the market will cost your business’s market share. After all, haven’t we all witnessed how far Sony Walkmans are from the digital music era or the taxi industry is not ready to fight the unavoidable rise of the UBER?
8) Allows You To Provide A Quality Customer Service.
Different consumer behaviors require different levels of customer service. Understanding the differences in your customer base will help you provide the service that best suits your individual needs.
For example, do you have an electronics store? So, you know that high school or college students who buy a new laptop will better identify what they’re looking for than the first person who bought a computer. For the first demographic group, your goal should be to provide information about the latest trends in technology, and for the second group to train the customer, find out what their special needs are, and even spend time to provide key information on the subject, etc. you will need to focus on the goals – you may even have to teach the customer how to use the electronic device he / she will purchase.
Coca-Cola etc. large companies focus on improving their existing products and adding new ones to their product lines at all times. Coca-Cola Company has conducted market research to define consumer behavior, and has harmonized its corporate strategy of ‘refreshing everyone affected by the business’ with its marketing results.
As you can understand, focusing on consumer behavior can be an important marketing tool to help you understand customers better. Businesses that dominate consumer psychology and know the factors behind purchasing behavior can create new products, create creative marketing campaigns and increase profit rates.
For this reason, businesses should always listen to their consumers, focus on the problematic points in their lives, and most importantly, determine the needs and expectations of the consumer clearly.