Consumer Behavior: Definition, Types and Strategies
Updated June 24, 2022
When consumers buy products, they make choices that favor some brands over others. Learning why they make those choices is something professionals can find out by studying consumer behavior. Studying and understanding consumer behavior can help businesses appeal to a broader range of consumers while maintaining their existing consumer base. In this article, we discuss consumer behavior, explain why it's important to understand it, examine the types of consumer behavior and look at ways in which you can use consumer behavior in marketing.
What is consumer behavior?
Consumer behavior is how people feel and think when they are deciding whether to buy a product. In the study of consumer behavior, researchers might examine what people buy, when and how often they buy it, where they usually buy it, why they buy it and more.
For example, in analyzing antiperspirant sales, researchers may notice that people usually buy this product more frequently in the summer, typically in pharmacies and grocery stores, and that this is because consumers are likely more concerned about managing their perspiration when the weather is hot. Knowing the what, where and why can inform retailers and companies on how to adjust their marketing to emphasize deodorant sales at certain times of the year. Strategies like this that are based on consumer behavior analytics have the potential to increase sales.
Why is it important to understand consumer behavior?
Studying consumer behavior helps marketers see what consumers want and their reasons choosing certain products over others. By understanding consumers' reactions to goods and marketing, they can analyze their audience's needs and expectations and thus work toward meeting them.
It's also important for retailers and companies to keep up to date with shifting trends in taste, needs and economics, as these factors can affect consumer behavior and require further adjustments in both marketing and production .
There are several other ways in which understanding consumer behavior can benefit marketers, companies and other businesses. They are:
Knowing the competition
If consumers are purchasing from a business's competitors, the business can improve its performance by studying consumer behavior. It can ask, "Which demands do competitors satisfy that we don't?" When it knows the answer to that question, the business can address their gap and give consumers a reason to consider their goods rather than those of competitors.
In marketing, differentiation refers to the act of distinguishing consumer types and grouping them by common characteristics. Each group is part of a business's target audience but has needs or exhibits behaviors that differ from those of other groups. Understanding these different needs and behaviors can help businesses create multiple strategies to appeal to the various differentiated groups and also provide tailored customer service to each consumer type.
For example, a store that specializes in smartphones might have a broad target audience of consumers likely to have disposable income, which could be anyone from age 25 and up. However, younger consumers are more likely to understand what features to expect in a phone and which are useful to them, whereas older consumers may be unfamiliar with the functions and specifications considered desirable.
Having differentiated these consumer types, a salesperson at this store may understand that their strategy for younger consumers is promoting the most state-of-the-art features, while for older consumers, it is explaining what certain features do.
Allowing for trend forecasting
Because consumer behavior studies examine what consumers buy and why they buy it, researchers can see when their buying behaviors change. These changes in behavior can signal a change in buying trends, which is information that can help businesses predict the kinds of goods that consumers may buy in the future.
For example, a clothing manufacturer may notice that a specific style of jeans is selling more than other styles. They might predict a greater increase in sales of these jeans in the next quarter, manufacture a greater quantity of them and adjust marketing to promote them further.
Promoting retention and innovation
Knowing what consumers like can help a business decide what to keep the same and what to change. If a product has a consistently large market share among consumers, that's a sign that the product is satisfying a demand and should remain unchanged. Likewise, this data can also show the consumer types who dislike the product and what products they prefer.
For example, if a soft-drink company produces a popular beverage but then alters the recipe and the taste, it risks alienating millions of people who loved the way it tasted before. However, if the company instead uses its resources to develop a new beverage that appeals to a different audience, it stands to gain market share.
Types of consumer behavior
There are four types of consumer behavior that marketers recognize. They are:
Habitual buying behavior
Habitual buying behavior refers to purchases made with low conscious or emotional involvement and without significant thought about differences between product types. It often involves products that consumers use regularly, even every day. An example of a habitually bought product might be dental floss. When buying dental floss, many consumers may not care to consider any qualities of the product other than cost. In these cases, factors that influence purchases are familiarity and visual appeal. A consumer may be more likely to select the dental floss with the well-known brand name or the one whose packaging appears most vibrant to them.
Variety-seeking buying behavior
Variety-seeking behavior, another low-involvement behavior, is prevalent when the differences between products are noticeable, motivating consumers to make frequent switches between brands. The motivating factor for switching is not dissatisfaction with previously purchased goods, but curiosity about other products.
For example, a shopper at a grocery store might buy a pint of their favorite ice cream flavor from one brand on one shopping trip, then the same flavor from another brand on a different shopping trip because it is offered at a similar price point. The shopper may have liked the first brand, but there's no risk in switching, and they want to try something new.
As with habitual buying behavior, familiarity and visual appeal can influence variety-seeking buyers to select one brand over others. A brand might display a large variety of items within a product type so that consumers are more curious about the brand's many offerings than about similar offerings from other brands.
Also known as complex buying behavior, extended decision-making is a high-involvement process, or one that involves great conscious and emotional involvement. It occurs when consumers are considering buying a type of good that they rarely, if ever, purchase. Usually, this item is expensive, so the financial risk in choosing one brand over others is higher. Therefore, the consumer spends an extended amount of time researching the differences between brands and types before making their decision.
For example, someone who wishes to buy a high-end fountain pen might spend a significant amount of time reading reviews and watching demonstration videos of well-regarded pens online to understand the differences fully.
Businesses can influence consumers in extended decision-making by providing as much detailed information about their products as they can. They can achieve this by maintaining a social media presence that allows purchasers to express their firsthand experiences with the product, encouraging customer reviews and producing their own promotional material that outlines their product's features in relation to similar products. These measures can help make potential consumers feel confident about their purchase.
Limited decision-making, also known as dissonance-reducing buying behavior, applies to people looking to buy goods among which there is limited variety. For example, at a sporting goods store, there might be only three types of coolers. They all perform the same function, have identical capacities and look similar. The only discernible difference is price. One cooler might be $100, whereas the other coolers might be around $40. In limited decision-making behavior, the customer is likely to exclude the more expensive brand and instead make a high-involvement decision between the two lower-cost products.
Besides reducing prices, companies can influence limited decision-making by offering incentives to purchase their product over others. In the example of the coolers, the maker of the $100 cooler could market its product as more durable and longer-lasting, capable of being a one-time, lifelong purchase and guaranteed with a lifetime warranty. This quality could appeal to those who appreciate well-constructed goods who wish to reduce how much they throw away.
How to use consumer behavior in marketing
Studying consumer behavior can reveal the visual stimuli that consumers often react to, the qualities they desire in certain product types and the kinds of information they value in their decision-making process. Knowing these factors can help companies develop advertisements that appeal to consumers' preferences. The following are a few techniques to help you use consumer behavior to inform your marketing:
1. Develop trust
Consumers often purchase brands they consider trustworthy. Consumer behavior research may show what consumers consider trustworthy characteristics, such as product quality, company ethics or ingredient sourcing. Knowing this, you can use consumer behavior research to target your marketing strategies to appeal to those values. Offer information about your values and business practices on your website to give customers a sense of the business's integrity. You could allow trial uses or provide lifetime warranties to ensure customers of the quality of your products.
2. Be repetitive
Consumer behavior research can also reveal the efficacy of advertisements by showing how well or poorly consumers react to ad frequency. If an ad appears too infrequently, consumers may not recall it when shopping. If it appears too often, consumers may not respond positively. By analyzing consumer behavior data, you can gather information about the ideal number of ad repetitions for different channels and allocate your marketing strategies and resources accordingly.
3. Reconsider packaging
In all consumer behavior types, including extended decision-making, packaging can play a vital role in a consumer's decision. Consumer behavior research might reveal that an increasing number of people prefer simple package designs that minimize plastic waste, so a product with packaging that reflects these preferences is more likely to influence consumers to choose it.
When redesigning packing, consider all aspects of the design, including the logo, colors and material. Make adjustments according to consumer behavior findings, but ensure the product remains familiar enough for consumers to recognize it after the changes.
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