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Meaning, Importance and Types of Consumer Behaviour

Updated on November 19, 2021
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Helna is a postgraduate in commerce who is working as a manager. She loves sharing informative information with her readers.

Consumer Behaviour

Human beings differ in terms of social status, nationality, age, sex, income, occupation, religion, family set-up, education, and the culture of the society. We have different needs because of these differences.
Human beings differ in terms of social status, nationality, age, sex, income, occupation, religion, family set-up, education, and the culture of the society. We have different needs because of these differences.

Consumer Behavior

A market is designed for buying and selling products and services. It is a human activity to satisfy human needs and wants through the exchange process. This means the aim of marketing is to satisfy the potential needs and wants of the products and services of the consumer. To do marketing effectively, first, we need to understand the likes, dislikes, preferences, tastes, the process of purchase, consumption patterns, buying power, buying-place, quantity, etc. of the buyers of that product. Here comes the importance for us to learn about consumer behavior. Let us look at the meaning, importance, types, and factors affecting consumer behavior.

Meaning of Consumer Behaviour.

We all are consumers. In fact, everybody in this world is a consumer. We buy and consume a variety of services and goods in our daily life. But we all possess different tastes. We adopt different behavior patterns while making purchase decisions. We have different likes and dislikes. You may prefer to use a Nokia Mobile phone with an Airtel connection while your spouse may prefer a Samsung Mobile phone with a Vodaphone connection. Your colleague may be using a Sony Ericsson Mobile phone with an MTNL connection. Your neighbor may be carrying a Motorola Mobile with a Reliance connection. You may prefer Close-up toothpaste, Lux toilet soap, and Sunsilk shampoo while your spouse may prefer Colgate toothpaste, Dove toilet soap, and Sunsilk Shampoo.

Similarly, you may have a certain preference in selecting your magazines, books, brands, clothing, food, recreational activities, mode of investing, the brand of the vehicle you use, forms of savings, stores from where you prefer to shop, the people you associate with, etc. While you'll find that your spouse, your colleagues, and your neighbors are holding different preferences in selecting their food, vehicle, books, magazines, clothes, investments, mode of savings, etc. While buying vehicles people hold different choices like brand, size, and capacity, milage, etc.

The economically weaker section buys a car which would help them to commute with less cost. So the preference of such people is altogether different from the preference of rich people. Wealthy people who can shell out a lot of money, look for safety, comfort, and latest models of the vehicles. Price or running cost is the least concern for such people.

Again within each category also diverse people prefer different brands. Thus, each consumer is unique. This uniqueness is reflected in the consumption behavior, and pattern as well as the process of purchase. The knowledge of consumer behavior provides us reasons as to why consumers differ from one another in buying and using products and services.

What products and services do we buy, how often do we buy, why do we buy, from where do we buy, etc. are the issues which come under the subject of consumer behavior. It blends the elements from economics, psychology, sociology, and social anthropology. It tries to understand both the individual and group decision-making processes of consumers.

Consumer behavior can be defined as those acts of consumers (individuals) directly involved in using, obtaining, and disposing of economic goods and services, including decision processes that precede and determine these acts.

Importance of Understanding The Consumer Behaviour

The importance of understanding consumer behavior is to know and understand the preferences of different consumers which will enable the marketers to form the marketing strategies accordingly. Human beings differ in terms of social status, nationality, age, sex, income, occupation, religion, family set-up, education, and the culture of the society. We have different needs because of these differences. We buy only those products which we think will satisfy our needs. We can find out or classify the different market segments by analyzing the consumer behavior of the same product or variation of the same basic product. A better understanding of the market segment is necessary for a marketing manager to design strategies for different segments. Knowledge of consumer behavior and the taste are an important factor that plays a vital role in the creation of marketing strategies.

Consumer tastes are also changing as fast as technology changes. In today's world technology changes are taking place rapidly. The changes in technology change the taste of consumers. To accommodate the need of rapidly changing consumer trends, a firm has to constantly understand the latest consumer trends and tastes. Consumer behavior provides invaluable clues and guidelines to marketers on new technological frontiers which they should explore. For example, let us consider the 4G enabled mobile phones in India. When the 4G technology introduced and the service providers started 4G services at the end of 2014, the consumers exhibited a desire to purchase 4G enabled mobile phones than ordinary mobile phones. In the early eighties when the color transmission started, consumers exhibited a desire to purchase color Television for closer-to-life color picture viewing.

To identify and understand the prospective customers and their buying behavior management which beliefs in the philosophy of marketing concepts will take necessary steps to constantly in touch with the customers to know their likes and dislikes or requirement and expectation of the product. The customer relationship department is a two-way communicating agency between the management and the customers. To understand the customer means to understand the goals of customers, which may be long-term or short-term in nature. Once the goals are identified, the firm can decide and design the products accordingly to match the goal of the consumer. The next step is to make the customer aware of the product or services. An advertisement message explaining how the product or services can help the customer to reach his goal will fulfill that part of the work.

There are many difficulties in finding out the goal of the prospective customers. People rarely ever give their goals any conscious thought or express them in a way that can be understood easily. Many times the consumers fail to express the goals in the order of importance. Sometimes expressed goals are of short term in nature and seek immediate satisfaction which lacks long-term significance. These difficulties can fail you to understand the true picture of consumer behavior.

To select the appropriate message and medium of advertisement, the firm must understand the specific goals with a fair level of accuracy of the targeted groups.

Some of the areas that provide valuable insight into consumer behavior are psychology, sociology, social psychology, economics, and cultural anthropology. Special markets, which consist of government agencies and other non-profit organizations need to be studied carefully to understand the unique consumer behavior. To capitalize on the potentials of the market, we need to analyze the market in depth.


Types of Consumers

The types of consumers can be classified into two. They are:

  1. Personal Consumers.
  2. Organizational Consumers.

Personal Consumers

When you buy a watch for your use, you are buying in your capacity as a personal consumer. Whenever you buy goods and services for your own or your family use, you are considered as a personal consumer. All individuals, therefore, fall into the category of personal consumers. Buying decisions of a personal consumer mostly depend on his taste, availability, and affordability of the goods and services.

Organizational Consumer

When you buy a printer for your use in the office, you are making the purchase in your capacity as an organizational consumer. All business firms, government agencies, and bodies, non-business organizations such as temples, truest, hospitals, etc. are organizational consumers who purchase goods and services for running the organizations. Even in the organization, buying decisions are taken by individuals only. Therefore, the behavior pattern of the organizational consumer is marginally different from personal consumers.

Factors Influencing Consumer Behaviour

Consumer behavior is affected by a host of different factors ranging from personality characteristics, needs, attitudes, values, economic and cultural background like age, sex, professional status to social influences of various kinds like forces from family, friends, colleagues, and society as a whole. The combined effect of these various factors influences the purchasing decision and behavior of the consumer.

Consumer behavior results from environmental and individual influences. To achieve an ideal self-image and to project the self-image they want others to accept, consumers often adjust their purchases of goods and services. The influence of others and the psychological makeup of individuals control consumer behavior.

All the factors that influence consumer behavior can be classified into four broad groups:

  1. Psychological Factors
  2. Personal Factors
  3. Social Factors
  4. Cultural Factors

Psychological Factors

A felt need for something useful is the starting point of a purchase decision process. We all have needs. We hope to fulfil those needs will improve and satisfy our life. Sufficiently pressing needs will direct the person to seek satisfaction. We call this urgency of the need motive. Therefore, motives are inner states that direct people towards the goal of satisfying a felt need. People take steps or actions to reduce the tension created by the want or need.

Mr. Abraham Maslow (1908 - 1970) has developed a useful theory of the hierarchy of needs based on two important assumptions.

People are wanting animals whose needs depend on what they already possess. Only these needs that have not been fulfilled can influence human behavior. A satisfied need is not a motivator.

In order of importance, all needs can be ranked from the low biological needs to the higher-level psychological needs. An unfulfilled level of need is the motivator behind the individual's behavior. As soon as one level of need is fulfilled, he moves on to the next higher level of needs.

Maslow has classified the needs into five categories. They are:

  1. Physiological Needs.
  2. Safety Needs.
  3. Social Needs.
  4. Esteem Needs.
  5. Self-actualization Needs.

Since no need is ever totally satisfied, there is always overlap among the different levels of needs. Also, there is always scope for further fulfillment.

Physiological Needs

The basic needs or primary needs are food, shelter, and clothing. It is the common and basic need of a human being. He sees to fulfill this need before he goes for higher needs. Once hungry, a person ignores all other needs until he gets food to satisfy his hunger. Once his Physiological needs are met, he looks for other higher levels of needs and tries to fulfill such needs. He tries to fulfill his basic needs of food, water, air, shelter, and sex at this stage.

Safety Needs

The second important need is safety, security, and protection from physical, unexpected harm which may come in the way as life progress. To protect oneself from such unexpected harm, he takes the necessary steps to face such situations. Saving account, medical insurance, life insurance, health club membership are some of the tools he uses to protect himself. Security of: body, employment, resources, morality, health, family health are some of the desires he tries to fulfill at this stage.

Social Needs

The desire to be accepted by the family, individuals and society (group) comes after fulfilling the physiological and safety needs. To be accepted in society, he starts behaving in such a way that is acceptable to the society in which he lives. He changes his dress code. Use gadgets to match the status of the group he belongs to. He would be interested in obtaining status among the group to which he belongs. Friendship, belongingness, family, sexual intimacy are some of the needs that one desires at this stage.

Esteem Needs

A sense of accomplishment, achievement, and receiving respect from others is the next higher level of need a person desire to fulfill. Status, prestige, success, self-respect, confidence, respect by others, and respect of others are some of the desires one looks for at this stage. Esteem needs are present in all human beings. But very few works towards achieving the same in a big way. At this level, he not only desires to get acceptance but also has a desire for respect and recognition. He wanted to be an outstanding individual in the crowd.

Self-actualization Needs

Maslow defines self-actualization as "The healthy man is primarily motivated by his needs to develop and actualize his fullest potentialities and capacities. What man can be, he must be." He tries to achieve the fullest potential of his capabilities and talents at this stage. Morality, creativity, spontaneity, problem solving, lack of prejudice, acceptance of facts are some of the needs of this stage one seeks for.

This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.

© 2011 Helna


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