The Importance of Understanding Consumer Behaviour

Subject: Marketing
Pages: 2
Words: 662
Reading time:
3 min
Study level: College

Commercial activities of the 21st century are characterized by an increasing emphasis on customers and their demands. Globalization contributes to the overall competitiveness across industries, and, in such circumstances, it is the final purchasing decision of consumers that determines the success of a business. Accordingly, organizations engage in the pursuit of customers’ attention and preferences. For this process to be effective, it is vital to understand the target audience’s consumer behavior. Thus, it becomes possible to adjust the marketing and production operations to meet the public’s requirements in the best way. This paper aims to explore the concept of consumer behavior while providing evidence in support of the importance of understanding it.

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Providing quality service for customers in exchange for their money is the end goal of most business enterprises. However, in pursuit of profits, some organizations may lack a clear understanding of the exact factors motivating people to purchase a particular product. Each individual is driven by a specific set of values, which play a crucial role in determining the final buying decision. According to the general understanding, the concept of consumer behavior refers to how customers select and use goods and services (Solomon, 1998). It is possible to assume that consumer behavior patterns vary depending on social, geographical, and other factors. In other words, it is essential to understand the motivation behind the target audience’s preferences to tailor a company’s offer and meet those needs.

Attaining the objective described above is a crucial component of an organization’s general success, which is why management should remain aware of the factors forming one’s consumer behavior. First of all, a product’s perception is an integral component of a purchasing decision (Solomon, 1998). Each market exists in a particular context, which may alter the perception, and it is important to ensure that the product does not acquire a negative image in a new environment. Secondly, memory plays a role of paramount importance in this scenario, as previous consumers retain particular impressions of a product (Solomon, 1998). If the memories are positive, they will be more likely to use them again and recommend them to others. The second point is particularly important in the 21st century when the Internet’s development allows for electronic word-of-mouth (Huete-Alcocer, 2017). Therefore, understanding what can prompt one customer to share their positive perception with others can positively affect a product’s reputation on the market.

In addition, there are personal factors influencing the decision-making process. Mandel et al. (2017) state that “goods and services have a psychological value that can equal or exceed their functional value” (p. 133). This idea suggests that some people purchase products with the sole motivation of alleviating their stress. If a company can identify the most common types and origins of distress on the market, it will be able to offer a product, which accurately helps consumers reduce the tension. Customers’ traits exist in a complex system interacting with their set of values determined by the self (Solomon, 1998). Mental and physical features, gender, culture, and background are equally important factors, which shape one’s personality and attitude. Accordingly, a realistic understanding of these aspects and their influence on consumer behavior can help organizations enhance the efficiency of their operations (Morales et al., 2017). Hamilton et al. (2018) discuss the importance of financial constraints and socioeconomic status in the context of consumer behavior, stating that their effect can be counterintuitive. Therefore, it is through understanding the multifaceted nature of consumer behavior that a company can succeed in meeting the demand of the public.

In conclusion, each purchasing decision is based on a complex process of decision-making, comprising the effect of profound psychological processes. They result in specific patterns, according to which clients buy and utilize the goods. Such patterns are called consumer behavior, and they vary across markets and their segments. Understanding the consumer behavior of a particular audience can help companies organize their marketing efforts effectively while positively contributing to an organization’s image and financial performance.

References

Hamilton, R. W., Mittal, C., Shah, A., Thompson, D. V., & Griskevicius, V. (2018). How financial constraints influence consumer behavior: An integrative framework. Journal of Consumer Psychology, 29(2), 285–305. Web.

Huete-Alcocer, N. (2017). A literature review of word of mouth and electronic word of mouth: Implications for consumer behavior. Frontiers in Psychology, 8. Web.

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Mandel, N., Rucker, D. D., Levav, J., & Galinsky, A. D. (2017). The compensatory consumer behavior model: How self-discrepancies drive consumer behavior. Journal of Consumer Psychology, 27(1), 133–146. Web.

Morales, A. C., Amir, O., & Lee, L. (2017). Keeping it real in experimental research—Understanding when, where, and how to enhance realism and measure consumer behavior. Journal of Consumer Research, 44(2), 465–476. Web.

Solomon, M. R. (1998). Consumer behavior: Buying, having, and being (4th ed.). Pearson.