Meaning of Consumer Behaviour
The study of consumer behavior pertains to how individuals, groups and organizations select, purchase, use, and dispose of goods, ideas, or experiences to satisfy their needs and wants. When evaluating, acquiring, using, or disposing of goods or services, consumers engage in a decision process and physical activity.
Data collected from Consumer Behaviour studies provides an in-depth look at these clients. The study includes demographic information and other elements. By understanding why consumers purchase particular goods and services, marketers can determine which products are hot and which are dated.
Scope of Consumer Behaviour
A) Demand Forecasting
Consumer behavior can be used to forecast business demand. By understanding customer behavior, businesses can identify their needs and wants. This allows them to discover their unfulfilled needs and demands.
A business can design products that meet customer needs if they understand what they need. By analyzing their behavior, they will be able to forecast demand for products. Identifying their market opportunities will be easier.Forecasting demand for products requires an understanding of consumer behavior. Furthermore, it can help the company identify the market opportunity available to them.
B) Selecting The Target Market
Understanding consumer behavior can help identify target customers. A study of customer behavior identifies all customer segments with unique and distinct needs.
The study can help segment the total market into various groups. In order to better serve customers, businesses should group customers and identify their needs. This will allow the business to design their products better in accordance with the needs and wants of their customers. Businesses will be able to see who their target customers are and what they want.
C) Market Mix
Every business needs to design an accurate mix of factors such as product, price, location, and promotion. Customers can use it to find out what they dislike and what they don’t get.
The purpose of this is to help marketers design an optimum marketing mix to improve the effectiveness of their marketing strategies. By creating the proper marketing mix, marketers can attract more and more customers, leading to increased profits.
D) Assists In Designing Product Portfolio
A business’s product portfolio is one of its most challenging components. Each business should design a portfolio that includes all classes of products.
Consumer behavior helps identify the type of product and the requirements of individuals. It is therefore possible to design products according to people’s needs and include them in the product portfolio of a company. By developing an optimum product portfolio, businesses can serve their customers better and design the best product portfolio.
E) Marketing Management
Marketing plays a crucial role in the successful operation of every business. The business will be able to formulate effective marketing strategies with a better understanding of customer needs, problems, and expectations.
It is possible for a company to attract more and more customers if it is able to do marketing effectively. Businesses can gain better insight into their customers if they are able to understand their behavior. Businesses will be able to conduct their marketing more effectively as a result.
Managers who are effective understand the importance of marketing for their firm’s success. The success of any marketing program depends on an understanding of consumer behavior. The Marketing concept serves as a cornerstone of many marketing managers’ philosophy of business. The Marketing concept involves three interrelated orientations: the needs and wants of consumers, company integration, and brand positioning.
F) Non-profit and Social Marketing
It is not uncommon for even non-profit organizations such as government agencies, churches, universities, and charitable organizations to market their products and services to the target audience of consumers or institutions.
These groups are sometimes required to appeal to the public for public support of particular causes or ideas. These groups also work towards eradicating the social problems in society. In order to be successful, it is important to understand consumer behavior and decision-making processes.
G) Government Decision Making
The relevance of consumer behavior principles to government decision making has increased in recent years. The two main spheres of activity affected include:
- Government services: Government provision of public services can benefit significantly from an understanding of their consumers, or users.
- Consumer protection: There are many agencies at all levels of government involved with regulating business practices for the purpose of protecting the welfare of consumers.
Consumers have increasingly come to understand that some natural resources, such as gas and water, are becoming scarce. Promotions have emphasized conservation over consumption in response to this scarcity.
Consumers have also been encouraged to decrease or stop using particular goods that are believed to have harmful effects in some situations. Drug abuse, gambling, and other types of conception can be reduced by such programs. Government agencies, non-profit organizations, and other private groups have taken these actions. “Demarketing” is an effort to encourage consumers to use less of a particular product or service.
I) Consumer Education
Directly benefitting from an investigation of their own behavior is the consumer as well. This can take place on an individual basis or as part of a more formal education program.
Consumers may be more willing to plan an effort to save money if they learn that a large percentage of the billions spent annually on grocery products is spent on impulse purchases rather than according to a pre-planned shopping list. Marketers have the ability to influence consumers’ purchases, so consumers can comprehend how their behavior impacts their own.
Marketers can identify how customers spend on their buying decisions by studying consumer behavior. Marketers can easily help their customers improve their buying decisions by understanding their behaviour. They can direct them to better options available on the market and suggest ways to save money. Based on their behavior, they are made aware of different opportunities.
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