What is consumer behavior and why is it so important?
Do you know what the top successful companies have in common?
All of them aim to satisfy the needs, desires and aspirations of the target audience. This cannot be done without a thorough analysis of consumer behavior. This is why some of the world's most valuable brands such as Apple, Microsoft, Samsung, etc. are investing millions in consumer research.
But what is consumer behavior and why does it matter to businesses?
Consumer behavior is the actions that occur in choosing or using goods and services. It is a complex phenomenon, including economic, psychological and emotional reasons that lead to a particular decision of the consumer.
When buying a product or service, consumers go through various stages. The study of consumer behavior allows companies to understand how the customer found the desired product. This information helps companies identify reasons for purchasing or declining a product or service. Understanding customer behavior is a constant and ongoing effort as customer preferences and needs are constantly changing and evolving.
There are various factors that influence consumer behavior, but four of them are more important - cultural, social, personal and psychological factors. Let's consider each of them in more detail.
Cultural factors. Culture plays a huge role in shaping consumer behavior. Even if two different countries have a lot in common, there are probably enough differences to look out for.
In North America, individualism is a fundamental cultural value. In the West, we are taught from early childhood that we should focus on our own needs and interests and that it is okay to put ourselves first.
On the other hand, in many Asian countries, collectivism is the main cultural value. This means that it is important to consider the needs of family members and listen to their opinions when making purchasing decisions.
Social factors are factors that are prevalent in society. Society is made up of people with different preferences and behaviors. These different behaviors affect the personal preferences of another group of people.
A person is influenced by the role he occupies in society. If a person holds a high position, his purchasing behavior will be greatly influenced by his status.
Personal factors are factors that are individual for each consumer and influence their purchasing behavior. Age is the main factor influencing the choice of goods or services. The purchasing choice of young people is different from that of middle-aged people. Older people have very different purchasing behavior. The next important factor is income. When a consumer has a higher income, it gives him more opportunity to buy luxury goods.
Purchasing behavior is also influenced by lifestyle. For example, if a consumer leads an active lifestyle, he will spend more money on fitness classes or sports equipment than a person who prefers passive recreation.
Psychological factors. Such factors are difficult to measure, but they are powerful enough to influence a purchase decision. When a customer sees advertisements, promotions, and customer reviews related to a product, he gets an impression of the product. Thus, consumer perception influences the purchase decision.
Motivation, perception and persuasion determine the conscious and subconscious thought processes a consumer goes through before making a purchase. Understanding these factors will help uncover consumer behavior for successful interactions with consumers.
In today's competitive business environment, every company strives to remain successful. Efforts must focus on identifying and meeting customer needs. Understanding customer behavior is a process that can be managed by obtaining customer feedback through surveys and other means. It helps companies improve their products, innovate and create a product based on customer wants and needs.