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What is consumer behavior?

Consumer behavior is the actions and decisions that people or households
make when they choose, buy, use, and dispose of a product or service. Many
psychological, sociological, and cultural elements play a role in how
consumers engage with the market.

It is a multi-stage process that involves identifying problems, collecting data,

exploring options, making a decision to buy, and evaluating the experience
afterward. Consumers may be impacted during these stages by things
including personal views and values, social conventions, marketing
campaigns, product features, and environmental conditions.

Understanding consumer behavior is essential for businesses to create

marketing plans that work and to supply goods and services that satisfy
customers’ wants and needs. To see trends and patterns, forecast demand,
and make wise choices regarding product design, price, promotion, and
distribution, marketers must analyze and understand data on customer
behavior

Consumer behavior in marketing

Consumer behavior is important in marketing because it explains how
consumers make decisions about what products to buy when to buy them,
and from whom to buy them.
 Marketers can develop effective marketing strategies that target the right
consumers with the right message at the right time by understanding
consumer behavior.

Here are some examples of how consumer behavior affects marketing:

 Segmentation
Consumer behavior research helps marketers behavioral
segment markets. Marketers can modify their marketing messages and
strategies to better appeal to each demographic by recognizing these
segments.

 Product design
Understanding consumer behavior can also aid in product development.
Marketers can create products that better meet consumer needs and
preferences by analyzing customer requirements and tastes, leading to
increased sales and customer satisfaction.

 Pricing Strategies
Marketers can use consumer behavior data to determine the price
points at which customers are willing to pay for a product, as well as the
pricing strategies most likely to appeal to each market segment.

 Branding
Consumer behavior research helps in the development of branding
strategies. Marketers can create brand messages and strategies that
resonate with consumers and build brand loyalty by understanding
consumer attitudes and perceptions of brands.

Why is consumer behavior so important?

Businesses invest a lot of time and resources in their product or service.
Hence, it is absolutely essential that their offerings cater to the needs of their
customers. Or they will incur huge amounts of losses.
So, in order to make sure that the products, as well as the brand, are well-
accepted by the consumers, it is important to first know what consumers want
and are likely to buy.

 Better marketing and communications

As living standards, trends, and technology keep changing, consumers’
choices also keep varying. Understanding how these factors affect
customers’ buying habits helps organizations design their messaging
accordingly. Thus, having insights into consumers’ purchase behavior
can help marketers in meeting their objectives.

 Improve customer retention

It is far more beneficial to retain an existing customer than to gain new
customers. It’s easier to sell new products and services to your existing
customers than to find new ones.

Entrepreneurs who are able to retain their customers and create strong
relationships manage to create strong new brand loyalty for their
businesses. Customer loyalty can prove to be a promoter of your
business and spread positive word of mouth. Satisfied customers share
their happy experiences with their friends and family.

So, retaining as many customers as possible should be the goal of

entrepreneurs interested in growing their companies.

 Increase customer loyalty

Understanding customer behavior helps in finding out ways to
boost customer loyalty, which in turn, will lead to higher sales and a
strong brand. Analyzing trends in sales can aid in offering discounts as
well as suggesting the best products and services to them.

 Better plan inventory

Researching customer attitudes helps companies plan inventory and
stock raw materials. In the case of a service-based business, the
management team can better plan their human resources. If businesses
 see a trend in demand for specific products, they are likely to send more
purchase orders to their suppliers. Consumer behavior data can help
them to balance demand and supply.

 Increase sales
A company always aims to satisfy specific market niches. Even if the
company operates in different sectors, it should target potential buyers
in each segment. If you know your customers well, you can have better
conversations with a high probability of closing the deal.

Knowing who you are selling to makes it possible to clearly define your
objectives in the market. Learning more about consumer behaviors
helps to define the main customers that come directly to the company.
Your inventory should be stocked with products that meet the
requirements of your potential buyers.

Instead of taking random shots and trying to sell to anyone, having

knowledge about your customers’ likes and dislikes helps in making
smarter decisions. Such a strategy has a higher chance of generating
sales.

 Research competition
Studying consumer buying behavior helps in understanding the
competitive market. You can plan on how to position your products and
services to offer competitive advantages. Find out answers to questions
like:

o Is the customer already using a competitor brand?

o What drives a consumer to buy from your competitor?
o Are potential customers happy with the competitor brands?
o What are the gaps between your products and that of
competitors?

Explore further: Consumer research: Examples, process, and scope

4 Types of Consumer Behavior for effective

marketing strategies
Marketers must understand several types of consumer behavior to create
effective marketing strategies and meet customer needs. This section will look
at the four types of customer behavior and how they affect businesses.

1. Complex buying behavior

When customers are actively involved in the purchasing decision
process and are aware of the significant differences between the
various brands, this happens. Before making purchasing decisions,
consumers conduct extensive research, gather information, and
evaluate alternatives.

2. Dissonance-reducing buying behavior

This type of behavior happens when people make expensive or risky
purchases and then feel uncomfortable or confused about their
decision. Consumers may seek reassurance, information, or feedback
from others to reduce confusion.

3. Habitual buying behavior

This happens when customers make purchases with minimal decision-
making and marketing efforts or information search. Based on prior
experiences, they have developed brand and customer loyalty also
buying habits, and they may buy things out of habit, convenience, or
familiarity.

4. 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.

What factors influence consumer behavior while

purchasing?
Consumer behavior is influenced by many external factors and internal factors
such as situational, psychological, environmental, and marketing factors,
personal factors, family, and culture.
Businesses try to collect data so that they can make decisions on how they
can reach their target audience in the most efficient way. While some
influences may be temporary and others can be long-lasting, these factors
can influence a person to buy or not buy. Let’s now look at some of these
factors in detail.
  Situational factors
They are temporary in nature and include physical factors such as a
store’s location, layout, colors, music, lighting, and even scent.
Companies try to make these factors as favorable as possible. Other
situational factors include holidays, time, and moods of the consumer.

 Personal factors
These factors include demographic factors such as age, gender,
income, occupation, etc. It also depends on one’s interests and
opinions. To further understand consumers, companies also look more
closely at their lifestyles – their daily routine, leisure activities, etc.

 Social factors
This factor also includes social class, level of education, religious and
ethnic background, sexual orientation, and people around you – family,
friends, or social network. Different cultures have varying customs and
rituals that influence how people live their lives and what products they
purchase.

Generally, consumers in the same social class exhibit similar buying

behavior. Most market researchers believe a person’s family is one of
the biggest determinants of buying behavior.

 Psychological factor
A person’s ability to understand information, perception of needs, and
mindset influence consumer behavior. One’s reaction to a marketing
campaign will depend on one’s beliefs and state of mind.

How to collect data on consumer behavior?

To understand consumer buying behavior, you need to know how consumers
think and feel about the different alternatives available in the market, how they
reason, and how they choose between different options.

The motivations that influence consumer behavior are so broad that the most
effective way to study them is to use different market research methods.
These methods should collect both qualitative and quantitative data. Some of
the common data collection methods are:

Surveys
Surveys are a popular method for collecting data about customer behavior.
Online, phone or in-person surveys can provide quantitative information about
customer opinions, preferences, and behavior.

Focus groups
Small, moderated consumer discussions about a specific good or service are
called focus groups. Focus groups provide qualitative information on
consumer opinions and views and also insights into how customers interact
with products and services.

Interviews
Consumer interviews can provide detailed data on customer behavior,
attitudes, and preferences. Interviews can be conducted in person or over the
phone, and they can provide qualitative data to boost quantitative data.

Observations
Observational research entails watching and recording consumers in their
natural surroundings. This method can aid in identifying patterns of behavior
and offer insights into how consumers engage with products and services.

Experiments
Experiments involve changing one or more variables to see what effect it has
on customer behavior. It can be carried out in a controlled environmental
analysis or in the field, and it can provide information about the connections
between variables and consumer behavior.

Data analysis
Data from sources such as sales data, web analytics, and social media can be
analyzed to gain an understanding of customer behavior. This method entails
recognizing patterns and trends in data in order to determine consumer
behavior and preferences.

Online surveys are the most efficient method of conducting consumer

behavior studies. You can create a survey using survey software and send it
to your target audience. You can also customize the survey flow to ask only
relevant questions to respondents.

It lets you analyze data and generate reports to make better decisions. You
can also filter data, compare results and identify trends over time. Based on
the results, you can predict demand and formulate your sales and marketing
strategy.

It also helps in designing pricing models, and the maximum amount

customers can pay for a specific bundle of features.

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 collect data using QuestionPro through a variety of
channels, including email, SMS, social media, and websites. The
platform also supports offline data collection via a mobile app.

 Analyzing data
QuestionPro offers a variety of data analysis tools to assist researchers
in making sense of the information gathered. Data visualization, text
analytics, sentiment analysis, and statistical analysis are among the
tools available.

 Reporting insights
Finally, QuestionPro enables researchers to present data insights in a
range of ways, such as charts, tables, and reports. The platform also
allows team members and stakeholders to share insights.

QuestionPro can be an extremely useful tool for researchers conducting

consumer behavior research. It can help researchers learn about consumer
behavior in a reliable and actionable way by giving them a complete solution
for survey research.

QuestionPro can help you learn more about your potential customers and
conduct research studies. If you need any help with designing a survey and
collecting data, connect with us. We’d be happy to help!

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About the author

Adi Bhat
View all posts by Adi Bhat

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