Consumer behavior is the actions and decisions people make when they choose, buy, use, and dispose of a product or service. It's 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. Understanding consumer behavior is a valuable tool for product and service providers. It enables them to increase sales by identifying their target market, determining the needs of that market, and developing products and services that meet those needs.
Four factors determine the characteristics of consumer behavior: personal, psychological, social, and cultural. These factors have a major impact on a consumer's behavior and the characteristics that define a customer will change as their life changes.
Some examples of consumer behavior include: Brand loyalty: A customer develops over a period of time by repeated use of a particular brand, product or service. Impulse buying: An important source of revenue for retailers and 30 to 40 percent of retail purchases can be classified as impulse purchase. Ethical consumption: An activism based on the premise that purchasers in markets consume not only goods but also, implicitly, the process used to produce them and how they affect the society as well as their impact on the environment.
Research has shown that consumer behaviour is difficult to predict, even for experts in the field; however, new research methods, such as ethnography, consumer neuroscience, and machine learning[1] are shedding new light on how consumers make decisions.
In addition, customer relationship management (CRM) databases have become an asset for the analysis of customer behaviour. The extensive data produced by these databases enables detailed examination of behavioural factors that contribute to customer re-purchase intentions, consumer retention, loyalty, and other behavioural intentions such as the willingness to provide positive referrals, become brand advocates, or engage in customer citizenship activities. Databases also assist in market segmentation, especially behavioural segmentation such as developing loyalty segments, which can be used to develop tightly targeted customised marketing strategies on a one-to-one basis.
(Source: Wikipedia)
Related Topics:
Marketing Management 101
Management 101
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