Definition of Consumer Behavior and Marketing Action

Introduction

Consumer behavior is comparatively a new field of study which evolved just after the Second World War. The seller’s market has disappeared and buyers market has come up. This has led to paradigm shift of the manufacturer’s attention from product to consumer and specially focused on the consumer behavior. The evaluation of marketing concept from mere selling concept to consumer-oriented marketing has resulted in buyer behavior becoming an independent discipline. The growth of consumerism and consumer legislation emphasizes the importance that is given to the consumer. Consumer behavior is a study of how individuals make decision to spend their available resources (time, money and effort) or consumption related aspects (What they buy? When they buy?, How they buy? etc.).

The heterogeneity among people makes understanding consumer behavior a challenging task to marketers. Hence marketers felt the need to obtain an in-depth knowledge of consumers buying behavior. Finally this knowledge acted as an imperative tool in the hands of marketers to forecast the future buying behavior of customers and devise four marketing strategies in order to create long term customer relationship.

Consumer Behavior: Definition

It is broadly the study of individuals, or organizations and the processes consumers use to search, select, use and dispose of products, services, experience, or ideas to satisfy needs and study of its impact on the consumer and society.

Customers versus Consumers

The term ‘customer’ is specific in terms of brand, company, or shop. It refers to person who customarily or regularly purchases particular brand, purchases particular company’s product, or purchases from particular shop. Thus a person who shops at Bata Stores or who uses Raymond’s clothing is a customer of these firms. Whereas the ‘consumer’ is a person who generally engages in the activities - search, select, use and dispose of products, services, experience, or ideas.

Need for Study of Consumer Behavior

The study of consumer behavior helps everybody as all are consumers. It is essential for marketers to understand consumers to survive and succeed in this competitive marketing environment. The following reasons highlight the importance of studying consumer behavior as a discipline.

Importance in Day to Day Life

The purpose of studying a discipline is to help oneself to better appreciate its contributions. The reason to study consumer behavior is because of the role it plays in the lives of humans. Most of the free time is spent in the market place, shopping or engaging in other activities. The extra time is usually passed in knowing and thinking about products and services, discussing with friends about them, and watching advertisements related to them. The usage of them significantly reveals our life styles. All these reasons suggest the need for study. However, the purpose may be to attend immediate and tangible reasons.

Pertinence to Decision Making

Consumer behavior is said to be an applied discipline as some decisions are significantly affected by their behavior or expected actions. The two perspectives that seek application of its knowledge are micro and societal perspectives.

The micro perspectives involve understanding consumer for the purpose of helping a firm or organization to achieve its objectives. The people involved in this field try to understand consumers in order to be more effective at their tasks.

Whereas the societal or macro perspective applies knowledge of consumers to aggregate- level faced by mass or society as a whole. The behavior of consumer has significant influence on the quality and level of the standard of living.

Organizational Buyer versus Individual Buyer

The obvious difference between industrial or institutional markets and consumer markets is that, instead of purchases being made for individual consumption industrial markets are made for business use. There are several factors that differentiate consumer markets and their buying behavior from organizational market and their buying behavior. The key factors of differentiation are:

Market Structure and Demand

Buyer Characteristics

Decision Process and Buying Patterns

Market Structure and Demand The distinguishing factors of market structure and demand are as follows:

In organizations, buyers are more geographically concentrated than consumer markets.

Organizational buyers are fewer in number but they are bulk buyers compared to individual buyers.

Organizational buyer markets are either vertical or horizontal. In vertical structures they cater only one or two industries, whereas in horizontal structure the buyer base is too broad.

Organizational demand is derived from consumer demand. The nature of the demand is fluctuating and inelastic.

Buyer Characteristics The distinguishing factors of buyer characteristics are as follows:

Many individuals or group involvement is seen in decision making process.

Organizational buyers are quite knowledgeable and professional.

The buying motive is mostly rational than individual buyer.

Decision Process and Buying Patterns The major differences are as follows:

In organizational buying lot of formalities like proposals, quotations, procedures are to be followed unlike consumer buying.

Decision process is much complex with high financial risk, technical aspects, multiple influencing factors etc.

Organizational buying requires more extensive negotiation over larger time period than consumer buying.