Understanding consumer behaviour is pivotal in crafting effective marketing strategies. It involves studying how individuals or entities make decisions regarding purchases, usage, and disposal of goods/services. Delving into psychological, social, and personal factors influencing choices, this knowledge helps tailor campaigns for specific audiences. Discovering why consumers act the way they do provides an edge in delivering products/services that truly resonate. Explore more to optimise your marketing initiatives.
The most crucial element in successful marketing strategies is knowledge of the customer, meaning, how and why they make a decision to buy.
Businesses spend a lot of resources to segment customers and create customer journey maps so that they become the best option for their target audience. Such marketing activities are based on understanding consumer behaviour.
Without any insight into how a consumer responds to marketing communication and the external variables that determine their buying decisions, it is impossible to develop a product that has a competitive advantage.
To highlight the importance of consumer behaviour, today’s blog is set to cover the following topics.
What is Consumer Behaviour?
Consumer behaviour is an investigative study of how individuals or companies make the decision to purchase, use and/or dispose of the products.
Let’s look at a broader perspective on this definition.
According to Frank Kardes et al. in their book, Consumer Behavior (2008)
“Consumer behavior entails all consumer activities associated with the purchase, use, and disposal of goods and services, including the consumer’s emotional, mental, and behavioral responses that precede, determine, or follow these activities”
In the book, the authors go on to describe types of consumers and their activities in the context of consumer behaviour in marketing.
Types of Consumers
Now there are two types of consumers
- Individuals – Those who buy products or services for their personal needs
- Companies/organisations – Those who buy base products to develop their own products, and those who buy products to run an organisation
Activities of the Consumer
There are three types of activities or ‘consumer responses’ that help understand consumer behaviour better.
All these activities go through the marketing funnel. That is, from researching the product online or offline to finally making a decision to purchase it.
These activities cover how the product is being consumed and the location. Marketers ask general questions to know whether the product is used right after the purchase, if the product was bought and never used by the consumer, and so on.
These are the ways how consumers discard the product. They can be disposed of after the product is used thoroughly or used less. Some products can also be recycled, while others are sold to flea markets.
Responses of the Consumer
There are three types of consumer responses to know in consumer behaviour.
These are also known as affective responses. They show how the consumer responds or connects with the product.
Also referred to as cognitive responses, they are about how the consumer thinks about the product. The consumer may want to figure out the advantages or disadvantages of the product, for instance.
These are the responses that directly determine what drives the consumer to come to a decision to purchase what is advertised. It can be targeted Google Ads showing up on Google SERP, an affiliate link, etc.
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See how top brands like Amazon and Flipkart have affiliate programs to help affiliates reach out to the right customers in our in-depth guide to affiliate marketing too!
History of Consumer Behaviour in Marketing
Frank Kardes in the Consumer Behavior book details the history of marketers who studied and researched consumer behaviour, before and after 1960.
Consumer behaviour was understood in terms of motivation. It was Ernest Dichter, an American psychologist, who coined the term ‘motivational research’.
With in-depth interviews with customers, he would often resort to the psychoanalytic theory of Sigmund Freud as a base for his conclusions on the consumer’s behaviour.
This kind of research was also criticised on the behalf of its methodology, as Freudian psychoanalytic theory was getting debunked due to its non-empirical nature. But still, it is even used today together with other forms of empirical frameworks to understand what drives the need of the customer. The blog will cover some of them later.
Enter Behavioural Science…
Behavioural science was a step up in understanding the consumer objectively. Marketers used it to study the consumer from an empirical perspective. They would use quantitative research methods, which made conclusions more scientific and accurate.
Usually, they would follow these steps in studying consumer behavior systematically.
- Making observations and formulating questions to know what needs to be solved for the customer
- Creating hypotheses as answers to the questions and forecast if one or more answers are correct
- Testing the hypotheses under the appropriate environment and seeking the correct answers
- Generating a theory that is completely objective
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Factors Influencing Consumer Behaviour
Now that you have a grasp of the types of consumers, different areas of consumer responses, and some contextual history, let’s explore the most important factors that influence such behaviour.
These include factors such as beliefs, attitudes, lifestyle choices, motivation, and perception of products in general. If all of these factors are taken into account, it becomes easier to create efficient marketing campaigns for an audience group that collectively has a similar mindset.
To understand consumer behaviour better, it is impossible to leave out the social environment. It can be as simple as peer pressure to buy a movie ticket, or about maintaining social status. Cultural and subcultural differences, too, determine which products the consumers from these groups are willing to spend their money on.
Age, gender, income, and occupation of individuals are also important to study buying behaviour.
Theories of Consumer Behaviour
No one theory of consumer behaviour fits all industries. Let’s look into some more theories of consumer behaviour.
Engel Kollat Blackwell Model
Also known as the EKB model, this theory of consumer behaviour explores four stages
- Input – This can be described as the awareness stage of the marketing funnel when they are introduced to all the advertising efforts of a brand.
- Information Processing – After they know about the product through blogs, billboards, radio, email marketing, social media marketing, and others, they process that information to decide if they want to purchase the product or service.
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- Decision Process – In this consumer behaviour framework, there are five decision stages in the consumer buying process. They are: recognising the need to solve the pain point; searching for information online and offline; assessing substitutes; choosing one from the options available; and, performing outcome analysis post-purchase.
- Variables – These are external factors (as discussed above) that determine the nature of buying behaviour. They can be about the lifestyle of the customer, income and more.
The EKB model is widely used in industries with many competitors. For example, the lifestyle industry is primarily based on this consumer behaviour framework.
Howard Sheth Model
One of the most objective frameworks of consumer buying behaviour is the Howard Sheth model. This framework covers three levels of decision-making from the consumer’s perspective
- Extensive Problem-Solving: The consumer is at the phase of finding the right solution to the problem they have.
- Limited Problem-Solving: After finding similar products, the consumers narrow down their searches.
- Habitual Response Behaviour: Here the consumer chooses one brand over another.
Now, there are different variables to consider as well.
- Inputs – These are sources from where the consumer finds the product. For digital marketers, it is incredibly important to focus on a strategic and situation-based content marketing strategy with SEO. They generally focus on keyword research, creating a buyer persona, and so on, so that the interested customer is able to find the product with a simple search without any hassle.
- Perpetual and Learning Constructs – These are mainly the psychological inclinations of the consumer.
- Outputs – These are a result of the constructs and how the consumer perceives the brand. From the marketing perspective, this is why branding is important. Do check out the Free brand management courses
- External – These are generally the social and cultural factors that can affect the consumer’s purchase decision.
It is also important to note that consumer buying behaviour keeps changing with technological and social trends.
Just think of the pandemic that led consumers to shop online more and the rise of eCommerce sites, for instance. For offline businesses, their entire target audience (if not all) shifted to the online buying medium.
So it is safe to say that a one-size-fits-all approach to understanding consumer behaviour generally does not work for every industry. In fact, it is the customer in your specific niche who will shape your marketing strategy.
And as a marketer or business owner, you have several options to satisfy your consumer better in the dynamic market. You can learn from industry experts by taking up courses such as Consumer Behaviour by IIM Bangalore, Consumer Buying Behaviour on NPTEL, Buyer Behaviour and Analysis on edX. There are also plenty of marketing courses that come with industry-standard certifications for faster professional development. Also, don’t forget to check out the free digital marketing courses!
What is consumer behaviour in marketing?
Consumer behaviour in marketing refers to the study of how individuals or entities make decisions regarding the purchase, usage, and disposal of goods and services. It encompasses emotional, mental, and behavioural responses that precede, influence, or follow these activities.
What factors influence consumer behaviour?
Consumer behaviour is influenced by various factors, including psychological, social, and personal elements. Psychological factors such as beliefs, attitudes, and perception, social factors like peer pressure and cultural differences, and personal factors such as age, gender, income, and occupation significantly shape consumer behaviour.
What are the types of consumer responses in consumer behaviour?
Consumer responses in consumer behaviour can be categorised into three types.
- Emotional Responses: Reflect how consumers emotionally connect with a product.
- Mental Responses: Represent cognitive evaluations and thoughts about a product.
- Behavioural Responses: Directly influence consumers’ decisions to purchase, driven by marketing stimuli like ads or promotions.
What are some key theories of consumer behaviour?
Notable theories include:
- Engel Kollat Blackwell (EKB) Model: Focuses on four stages - Input, Information Processing, Decision Process, and Variables influencing buying behaviour.
- Howard Sheth Model: Explores three levels of decision-making - Extensive Problem-Solving, Limited Problem-Solving, and Habitual Response Behaviour.
How does consumer behaviour impact marketing strategies?
Understanding consumer behaviour is pivotal for crafting effective marketing strategies. By comprehending how consumers perceive, decide, and act, businesses can tailor their campaigns, product offerings, and communication to resonate better with their target audience, thus enhancing competitiveness and brand success.