Consumer Behaviour Scope and Importance

Consumer Behaviour, in simple words, means how consumers behave in the market. It defines the process by which consumers make a purchase decision to satisfy their needs and wants. It consists of the likes and dislikes of consumers and which influences their buying decision. It is a concept which involves many stages, from arising needs to the purchase decision. The scope of consumer behaviour may describe the decision process and individual engagement in evaluating, acquiring, and using goods and services.

Table of Contents

• Scope of Consumer Behaviour
• What is Consumer Behaviour?
• Nature of Consumer Behaviour
• Importance of Consumer Behaviour

Scope of Consumer Behaviour

Words such as consumer behaviour, individual buyer behaviour, and buying behaviour of the consumer are all the same. Consumer behaviour is defined as the study of individuals, groups, and organizations performance in selecting, buying, using the goods and services, ideas, or experiences to fulfil the buyer's needs and wants.

The information given below will help you to understand the behaviour of the customers. Companies conduct various research programs to collect information about their target customers.

The scope of consumer behaviour is as follows.

• Demand Forecasting
• Marketing Management
• Non-profit and Social Marketing
• Selecting Target Market
• Market Mix
• Educating Customers
• Assists in Designing Product Portfolio

Demand Forecasting

Consumer behaviour helps in the forecasting of the demands for the business. Every business identifies the needs and wants of the customers by understanding their behaviour. Forecasting helps them to find out the unfulfilled demands in the market easily. If the company knows what their consumer wants, they can design and produce the product accordingly.

The behaviour of the consumer plays an important role in forecasting the demand for the products. In addition, it helps the company to identify the market opportunity available to them.

Marketing Management

Effective business managers know the importance of marketing towards the success of the business. Understanding consumer behaviour is essential for the long-running success of any marketing program. A better understanding of consumer needs and wants to help the business to plan and execute their marketing strategies accordingly.

Proper understanding of the behaviour of the consumer makes the company know its customers in a better way. That ultimately helps businesses to strategize and implement marketing in a better way.

Non-profit and Social Marketing

In today's world, every non-profit business-like government sector, religious sector, university, the charitable institution runs the business's overall activity by implementing proper marketing plans for the business. Also, they contribute to solving the problems of society. Thus, a transparent consumer behaviour process and decision-making contributed efforts towards the success of the business.

Select Target Market

Consumer behaviour helps the organisation to select its target group from the market. Studying and identifying consumer behaviour helps them to know the consumer segments with distinct features and wants. It helps in segmenting the overall market into different groups.

Market Mix

Proper development and designing all-important elements like product, price, place, and promotion are essential for every business. It helps them to identify the likes and dislikes of the customers. This allows marketers to design optimum marketing mix plans and improve the effectiveness of marketing strategies. The proper implementation of a marketing mix helps organisations to attract more customers, thereby increasing profit.

Educating Customers

Consumer behaviour helps the marketer to know how consumers spend their buying decisions. By understanding the customer's behaviour, a marketer can easily get an idea of how they can improve their buying decision. The market can guide and suggest a way to save their money and give them better options. Customers become aware of the opportunities available to them as per their behaviour.

Assists in Designing Product Portfolio

Designing a product portfolio is a challenging part of every business. Every business should design a portfolio that consists of all classes of the product. Consumer behaviour helps in identifying the class and needs of the customers. It helps companies to design the product which fulfils the requirements of their customers. In this way, a business can design the optimum portfolio and serve its customers better.

What is Consumer Behaviour?

Consumer behaviour is the process or way products and services are consumed, including consumers' emotional, mental, and behavioural responses. Because the customers' mindset is not the same; and it varies from each other. Thus, every business needs to understand its customers. It helps the organisation to fulfil consumer's demands and desires. Organisations use customer relationship management to know their customers properly.

The Consumer Behaviour study is a database that collects more information about its customers. The study involves individual quality like demographics and other elements. Marketers expect that by understanding what makes a consumer buy particular goods and services, they will determine what product is demanded by the consumer and what is old-fashioned. The consumer's role may vary in different situations; for example, a mother plays the role of an influencer in a child's purchase process.

Given below are the popular definitions of consumer behaviour.

• As per the definition given by Engel, Blackwell, Mansard,

"Consumer behaviour is the process of decision making and action while consumer goods or services for personal use."

• Another definition is given by Louden and Bitta,

"Consumer behaviour is the process and physical activity, which individuals engage in evaluating, using or disposing of product or services."

• According to Blech,

"Consumer behaviour is the process and activity that involves people when searching for, selecting, using, evaluating, and disposing various products or services to satisfy their needs and desires."

Nature of Consumer Behaviour

Consumer behaviour can be referred to as a systematic process describing and comparing the customers buying decisions.

The nature of consumer behaviour are as follows.

• Complex and Dynamic Nature

The nature of customers' behaviour is always complex. The critical analysis marketers need is to find the pattern of every individual. However, the consumer's behaviour and mentality evolve with time. So, it is also essential to identify the potential customer for their products and services.

• Nature Varies for Different Consumers

Consumers have different desires and needs, making it impossible for marketers to identify the target consumer.

• Consumer Behaviour Vary Across Regions

The behaviour varies across countries, states, and regions. For example, consumers' behaviour in the city differs from that of rural consumers because of the traditional attire.

• Behaviour Influenced by Different Factors

Another nature of behaviour analyzed is that consumers are influenced by different factors like family, culture, friends, lifestyle, and many more.

• Loyalty of Brand

Most consumers tend to buy products or services from a particular brand they may like for specific reasons. In this case, it develops brand loyalty towards these organisations.

Importance of Consumer Behaviour

It is very important to understand the behaviour of the customers to achieve the goal of the business. Therefore, there are various importance of consumer behaviour.

Some of them are given below.

• Production Policies
• Price Policy
• Decision Regarding the Channel of Distribution
• Decision Regarding Sales Promotion
• Exploiting Marketing Opportunities
• Consumer do not Always Act or React Predictably
• Highly Diversified Consumer Preferences
• Implementing Marketing Concepts

Production Policies

The study of consumer behaviour affects the production policies of the business. Consumer behaviour discovers, needs, tastes, choices of consumers, and such discovery enables the business to plan and implement products according to these specifications. Therefore, every business needs to be in constant touch with the change in consumer behaviour to make necessary changes in outcomes on time.

Price Policy

Consumer behaviour is equally important in having a price policy. The buyer only purchases your product, which is cheaper or has distinctive features than your competitor's.

Decision Regarding the Channel of Distribution

The goods and services sold solely based on the low prices must have an economical distribution channel. In the case of such products like T.V. sets, Air Conditioner, etc., must have different distribution channels. Thus, decision-related to the channel of distribution is taken based on consumer behaviour.

Decision Regarding Sales Promotion

Consumer behaviour plays a vital role in deciding the sales promotion. It enables the producer to motivate and encourage the consumer to make a purchase decision. The same is used in promotional campaigns to awaken the desire to purchase the product.

Exploiting Marketing Opportunities

The study of consumer behaviour helps a marketer identify the needs, wants, desires and problems, etc., of the consumer. This information and knowledge help the marketer exploit market opportunities and meet the challenges in the market.

Consumer do not Always Act or React Predictably

The consumers compare the past to react to price levels as if price and quality had positive relations. Today, the consumer gives less value for money but gives more attention to superior features.

Highly Diversified Consumer Preferences

Consumers can shift from one product to another due to the unavailability of choices. Thus, a proper understanding of consumer behaviour will help you identify changes in consumers' preferences. It also helps in retaining and sustaining the customer for a long time.

Implementing Marketing Concepts

All customers need to be given equal importance; therefore, implementing and identifying the target market before production is important to deliver the desired customer satisfaction.