Every single day we make hundreds of decisions which we don’t put much time thinking about them. The perfume we use. The music we listen to. The shoes we wear and the Cafe we go to. Maybe these are just some simple daily decisions in our minds, but Marketers think differently. Unlocking the secrets behind every purchase decision is a science which can boost any startup in revenue and market share. This research field is called consumer behavior, and analyzing consumer behavior in marketing can be the primary objective of any marketer.
Major companies, from Amazon to Tesla and McDonalds, have spent billions of dollars analyzing consumer behavior in marketing. They want to know how consumers make buying decisions and what influences those decisions.
What is Consumer Behavior in Marketing?
Consumer behavior is a series of practices or patterns that consumers follow before making a purchase. It starts when the consumer becomes aware of a need or desire for a product, then concludes with the purchase.
Consumer behavior is the knowledge of how people make decisions about what they buy, want, need, or act in regards to a product, service, or company. It is crucial to understand consumer behavior to know how potential customers will respond to a new product or service or why they’ve stopped purchasing a specific product or service. It also helps companies identify opportunities that are not currently met. Before beginning marketing processes for any product or service, we must answer a few questions about our consumer’s behaviors:
- How consumers behave separately and in groups
- How a customer feels directly before purchasing our product
- How that customer feels directly following the purchase
- Which questions or problems contribute to the buying decisions
- The number of touchpoints a customer makes with a brand, company or product before buying
Consumer Behavior is changing all the time
There are many examples of changing consumer behaviors all around us. A recent example of a change in consumer behavior is the eating habits of consumers that suddenly increased the demand for gluten-free (GF) products. The companies that observed the shift in eating patterns of consumers created GF products to fill a gap in the marketplace. However, many companies did not realize these changes in consumer behavior and left behind in releasing GF products. Understanding consumer behavior allowed the pioneer companies to increase their market share by anticipating the shift in consumer wants.
Even well-known companies can make mistakes in understanding consumer behavior, as the one Apple did in 2014. When U2 stated that they would be giving away half a billion free copies of its new album, Songs of Innocence, it sounded like a great idea – for U2 fans. Instead of Apple allowing people interested in the record to download it of their own volition, they just installed it on people’s devices without their permission. Then lots and lots of people got annoyed, And not everyone was excited about this. “#DeleteU2” took off as a trending topic on Twitter nearly instantaneously. People never gave U2 and Apple the permission to market to them, but they did it anyway. Moreover, both of these famous brands ended up with a huge PR disaster in the process.
Even I can’t delete this frigging U2 album from My cloud.
— God (@TheTweetOfGod) September 16, 2014
Undoubtfully, in our modern societies, consumer behavior and shopping habits are affected more and more by the digitization. These changes are the causes that The mother in São Paulo chooses a particular brand of paper products for her family because they were produced with sustainable methods or influencers who shape directly specific mindsets through social media.
Factors Influencing Consumer Behavior in Marketing
Culture plays an essential role in determining consumer behavior.
Culture is our way of life. It includes our values, beliefs, customs, languages, and traditions. Culture is reflected in our history, in our heritage, and in how we express ideas and creativity. [source]
The way of life, customs, and ideas of a particular group of people within a society, which are different from the rest of that society. [Cambridge Dictionary]
Society possesses social class. Income is one of the elements of Social class, and there are many other elements like education which play a role in this.
Social factors define the role of the consumer in society.
Who does consumer belong more on making purchasing decisions? Which group of people are affecting him/her more?
Family is standing alone on this and not merged with reference groups. Because of its importance in creating shared mindsets.
Role and status
People who belong to different organizations, groups, or club members, families play roles and have a status to maintain. These roles and states that they have to keep also influence consumer behavior as they decide to spend accordingly.
These are among the factors which can influence customer behavior the most.
At the moment we are born, our requirements are usually fundamental (food, care, etc.). As we reach adulthood and enter into it, our life becomes more complex, and with it, our needs become more complex. In recent years, however, old age brings us back to more fundamental demands, such as those of our childhood.
Occupation of a consumer affects the goods and services a consumer buys.
Financial or economic situations
It is undoubtedly the most challenging factor to differentiate. The nature of a human being is influenced by factors such as those we have already seen (age, culture, socio-economic level, etc.), but also by many others. Education or life experiences are crucial. However, even genetic and biological conditioning factors. It is challenging to know in depth the personality of human beings.
In daily life, consumers are being affected by many issues that are unique to their thought process. Psychological factors can include perception of a need or situation, the person’s capacity to learn or understand information, and an individual’s character. Each person will respond to a marketing message based on their perceptions and beliefs.
It can also be described as the goals and needs of the consumers. Motivation arouses and directs consumers toward individual goals.
Perception is sensing the world and the situations around and then take a decision accordingly.
Learning and experience
Learning is the research of products and services before the consumer decides on buying a product.
Attitude is a consumer’s favorable and unfavorable emotional condition or emotional feeling, also its tendency of reaction to specific actions and behaviors.
As the motivations that influence consumer behavior are so broad, a research mix including a variety of data will be the most robust. Some are more cost-effective than others. Customer Reviews, Q&A sites, Surveys, Focus groups, Keyword research, Google Analytics, Blog comments, Government, Social media, etc.
The Crucial Role of Attitude in Consumer Behavior
Attitudes are one of the most heavily studied concepts in consumer behavior. According to Gordon Allport’s classic definition, “attitudes are learned predispositions to respond to an object.” More recent perspectives view attitudes as a summary construct that represents an individual’s overall feelings toward or evaluation of an object. Consumers hold attitudes toward a variety of objects that are important to marketers, including individuals (celebrity endorsers such as Tiger Woods or Andre Agassi), brands (Cheerios, Kix), companies (Intel, Microsoft), product categories (beef, pork, tuna), retail stores (Kmart, Sears), or even advertisements (Nike ads).
Attitudes are important to marketers because they theoretically summarize a consumer’s evaluation of an object (or brand or company) and represent positive or negative feelings and behavioral tendencies. Marketers’ keen interest in attitudes is based on the assumption that they are related to consumers’ purchase behavior. Considerable evidence supports the underlying hypothesis of a relationship between attitudes and behavior. The attitude-behavior link does not always hold; many other factors can affect behavior. However, attitudes are critical to marketers. Advertising and promotion are used to create favorable attitudes toward new products/services or brands, reinforce existing favorable attitudes, and/or change negative attitudes. An approach to studying and measuring attitudes that are particularly relevant to advertising is multiattribute attitude models. [Source]
What are the Four Main types of Consumer Behavior?
1. Complex buying behavior
In this situation, the buyer is trying to buy something precious at a high price, so she searches for the information all the time and won’t decide quickly.
2. Dissonance-reducing buying behavior
The consumer is highly involved in the buying process but has challenges determining the differences between brands and usually looks for confirmation by others after purchasing the product.
3. Habitual buying behavior
Habitual buying is in a situation where the consumer is not too much involved with the buying process. Imagine grocery shopping: you go to the market and buy your preferred type of fruits.
4. Variety seeking behavior
The consumer looks for a range of products not because she is not satisfied but just because she is aiming for something different than before.
If you’ve just begun to run a startup, it’s essential to know your consumer’s behaviors. As you’ve seen, analyzing consumer behavior in marketing can have significant effects on any businesses success. Especially in startups, where they face a lack of budget, it’s vital to analyze their customer’s behavior and make decisions based on that.