Consumer behavior in marketing is the study of and understanding of individuals, groups or organizations and their interests for particular products and services. Consumer behavior is also about the psychology of consumers which is translated into what is the basic need of the consumer, how does a consumer feel about a product, what the factors that affect the process of selection between various other alternatives and the external market factors that influence the perception of a particular product or service.
The knowledge of how consumers buy various products or services can play a great role in designing a new product or service by a business organization. A good product designed with keeping most of the features that consumers prefer in mind, can be a great success in the market. This can trigger a chain reaction by the consumers who’ve used the product, advice it to many other consumers. On the other hand, if a product with inferior features or irrelevant features or inferior quality can ‘bad-mouth’ about the product, thus decreasing the sales.
Factors influencing consumer behavior
Consumer behavior can be influenced by various external and internal factors. While external factors deal with the firm’s marketing efforts about the product, its promotion, its price, etc and the consumer’s culture which include religion, ethnicity, social class, etc.
A firm’s overall image plays a great role in influencing a consumer. An organization which is known to manufacture cheap products with cheap materials can more often get negative reviews from consumers, but an organization which is known for making quality products is bound to get positive reviews from most consumers. Apart from this, the organization’s marketing effort which include the quality of the product, the presentation of the product and the price of the product, etc can play a great role in shaping the perception of the product.
Price of a product plays a major role today in buying a product. As the disposable money at hand can be limited for most consumers, a general rule of thumb is that the higher the price of a product, the lower will be sales. But, there can be exceptions in this case. For example, when Apple launched its iPhone in the year 2007, initially the price was between $499 -$599, but about 170,000 phones were sold in the first 2 months. In the 3rd month, the price of the iPhone was dropped to about $200 and this caused an outrage among the consumers and Apple had to give a store credit of $100 for free for those who bought the iPhone initially between $499 -$599.
Consumer’s culture and ethnicity can also be a great influencing factor in product perception. Many chains of restaurants are very careful not to sell beef and ham in some Asian countries because of cultural or religious ban on eating either beef or ham or both. Fast-food restaurant giants like McDonalds and Burger King have had a difficult time in India initially with beef and ham burgers.
The internal factors that influence a consumer’s behavior include psychological processes such as motivation, perception, attitudes and knowledge.
Motivation is perhaps one of the biggest factors that influence a consumer towards buying a certain product or service. Motivation can come from the aggressive advertisements of the product which can create a need for the product.
Perception: Perception is how one sees a product or a service. A product with good features can create a positive perception about the product. Also, the advertizing can play a major role in creating perception about a product.
Knowledge: Knowledge is also an important factor which can play a major role in consumer behavior. Knowledge about a particular product and its features can make a consumer realize whether or not the product is superior or inferior. By knowing this, the consumer may or may not choose to buy the product.
These are the various internal and external factors that influence the consumer behavior in many market conditions.
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