Consumer behavior involves the purchasing and other consumer-related activities of people engaging in the exchange process. Bagozzi and Zaltman defined consumer behavior as ” acts, processes, and social relationships exhibited by individuals, groups, and organizations in the obtainment, use of, and consequent experience with the product, services, and other resources”.
The behavior of consumers is motivated or purposive. This behavior is directed toward the goal of obtaining products or other resources. They are obtained for use in their own right or as a medium for future exchange. The three important aspects of this definition, such as acts, processes, and social relationships, include diverse consumer activities.
Some of the activities include experiencing a need, window shopping, comparison shopping, simply thinking about the available information concerning a product’s relative benefits and dis-benefits, seeking a friend’s advice about a new product, etc. Consumer behavior also involves experiences, which are the consequences of using products and services.
If we analyze the above definition, we can identify the following three phenomena involving consumer behavior:
- Activities such as acts, processes, and social relationships.
- People, such as individuals, groups, and organizations.
- Experiences such as obtaining, using, and consequences.
Engel, Blackwell, and Miniard defined consumer behavior as “those acts of individuals, directly involved in obtaining, using, and disposing of economic goods and services, including the decision processes that precede and determine these acts”.
This definition includes some of the features of the other definition given and discussed above. Besides, it includes one of the critical aspects of buyer behavior, “the decision process.” This aspect is dealt with in the discussion of the stages of the buying process.
The definition of consumer behavior given by Harold W. Berkman and Christopher C. Gilson is more exciting.
To them, consumer behavior is “the activities of people engaged in the actual or potential use of market items – whether products, services, retail environments, or ideas.” This definition considers both individuals and organizations as consumers.
Moreover, it considers the acts of potential buyers as consumer behavior. The question may come to your mind “why the acts of potential/future customers are considered as the behavior of consumers?” The reason is obvious. Suppose you are planning to buy an apartment next year.
What will you do until next year comes? You will probably look at the advertisements of different apartment sellers, visit a few of them, inquire about prices and terms and conditions of payments, compare locations, designs, and fittings.
Why do you undertake these activities? You probably undergo this process to arrive at the most logical decision. These activities help you to make your future purchase. Thus activities of potential customers are also considered consumer behavior.
Marketers consider potential consumers’ activities so that they can prepare themselves well in advance to capture this group and make the sale to them.
Scope of Consumer Behavior Field
The field of consumer behavior tries to find out the answers to the following questions:
- What are the products people buy?
- Why they buy them?
- How they buy them?
- When they buy them?
- Where they buy them?
- How often they buy them?
- How is the decision process of the consumer?
For instance, if you intend to produce a new variety of toothpaste, you should analyze the nature of individual consumption behavior as to why consumer uses toothpaste (to whiten teeth/prevent tooth decay); which brand of toothpaste he buys (say Close-up or Aromatic); why he buys it (because he believes that it will whiten his teeth better than competing brands); how he buys it (cash/credit); when he buys it (monthly/weekly); where he buys it (from retail or supermarket); how often he buys it (frequency of buying, say every fortnight) and how much he buys it (100 gram/200 gram).
It must also be noted that the behavior is likely to show variation from individual to individual, from product to product, and from an individual of one region to individual of another region.
Thus analyzing consumer behavior is a prerequisite though the process is highly complicated. At the same time, a firm’s ability to establish and maintain satisfying exchange relationships depends on understanding buying behavior. The consumer behavior field explores the decision process and acts of people involved in buying and using products.
In examining and focusing on various aspects of consumer behavior, this discipline borrows findings from many disciplines. That is why this discipline is termed as a multidisciplinary field of study.
It liberally borrows from Anthropology, Sociology and Social Psychology, Psychology, Marketing Research, and Economics.
The reason for borrowing from Anthropology is that it helps us understand the cultural and sub-cultural settings in which our behaviors occur. In the beginning, we have already mentioned how culture affects consumer behavior.
Consumers are social beings, and as a result, their behaviors occur due to their interactions with different social groups such as family, social class, etc. Sociology and Social Psychology help us to understand the influence of different social groups on consumer decision making.
Also, every individual is a unique identity. As a result, his behavior is very much affected by his personal characteristics, such as learning, perception, motivation, personality, beliefs, values, images, attitudes, etc.
Psychology deals with them for which consumer behavior borrows from psychology. How consumers respond to different marketing activities, including activities and so on, are identified by Marketing Research.
If marketers do not know consumers’ response tendencies to their activities, it becomes challenging for them to formulate strategies. Keeping this in mind, consumer behavior takes help from Marketing Research in identifying consumer behavior patterns.
Finally, consumer behavior occurs in the context of his economic condition. Economics helps us understand this greater consumer behavior context for which consumer behavior discipline borrows findings from economics.
Few Consumer Terminology
Many of us have a misunderstanding of some of the widespread consumer-related terms. To reduce this ambiguity, the following section will highlight the differences among a few important terms.
Consumer versus Buyer
Buyers carry out formal arrangements for purchase, service, delivery, and financial terms. Buyers are not always deciders.
Consumers are those people who actually put a purchased product to work or who use it to satisfy his physical or social/psychological need(s). These two terms are also used synonymously. The synonymous use leads to developing two other concepts – the ultimate and industrial/institutional consumers.
Ultimate Consumer versus Industrial/Institutional Consumer
The ultimate consumer is he who gets the products from marketing intermediaries for household use. The industrial/institutional consumer, on the other hand, gets the product for use in the production process of other marketable items or resale.
Consuming versus Purchasing
Purchasing refers to obtaining any market item from the channel of distribution (the marketing intermediaries constitute the channel of distribution), and it is only one aspect of the consumer decision process. On the other hand, consuming means utilizing the product for satisfying motive(s) arises out of either biological or secondary need(s).
Customer versus Consumer
Customer refers to the consumer who uses or might use a product, and a consumer is everyone who buys and uses any item.
Why Study Consumer Behavior?
The better the firm understands its consumers, the more likely it becomes successful in the marketplace.
The management of famous US company Procter and Gamble stated: “Our business is based on understanding the consumer and providing the products that the consumer wants. We place enormous emphasis on our product development area and our marketing area, and our people knowing the consumer.
Knowledge of consumer behavior would render immense help for planning and implementing marketing strategies. For example, buyers’ reactions to a firm’s marketing strategy greatly impact the firm’s success.
Second, establishing consumer orientation in the firm’s marketing concept depends on how the marketing mix adopted satisfies consumers. This is known only when the marketing mix is developed to include positive answers to the questions listed in the discussion of the consumer behavior field’s scope.
Third, by understanding the factors that affect consumer behavior, marketers are in a better position to predict how consumers will respond to marketing strategies. Besides, the study of consumer behavior helps in developing the strategies mentioned below:
Selection and segmentation of target markets; devising appropriate marketing strategies most relevant to the target market segment; evaluating marketing programs, strategies, and tactics; assessing the trends of change and preparing the marketing plans to suit the future changes.
Finally, the consumer is the principal priority of the business. The efficiency with which a free market system enterprise operates depends upon the extent of consumer understanding possessed by the business community.
A business community ignorant of consumer preferences cannot fulfill its obligations in a meaningful and responsive manner.
This is exactly the reason why consumer behavior is given importance in modern marketing. Moreover, this is the era of marketing orientation. Under this concept, consumers are treated like kings and queens (prince/princess).
To survive in the face of today’s extreme competition, you must serve and satisfy your consumers in a way better than your competitors do.
To do this successfully, you must know who your consumers are and how they behave. By studying consumer behavior, you can easily get the answers to these questions and act accordingly.
Perspective of Consumer Behavior Field
Consumer behavior is more diverse, complicated, and socially significant than many other areas of human behavior. Consumer behavior study involves an examination of everyday life and even more. This field is probably one of the most intriguing and important fields in the social sciences.
The consumer behavior field is interdisciplinary in nature. Consumer behavior, in most cases, is a complex process. The decision process that the consumers undergo is shaped by broad social or cultural forces, close interactions with different people and organizations, and the personal characteristics of the individuals.
To describe consumer behavior effectively, considerations of all perspectives, including cultural, social, and individual influences, are prerequisites.
Certainly, the most pervasive force on an individual is the cultural environment, which is the complex set of values, ideas, attitudes, and other meaningful symbols created by people to shape human behavior.
It also includes the artifacts (society’s material features) and the transmission of these values, ideas, attitudes, and the artifacts from one generation to the next. How people work and play, what they buy, how they buy them are affected by their cultures.
Human beings work and live with each other and are generally influenced by some of them. In particular, consumers are affected by their social class standing, reference group, and family. Their buying decisions are, as a result, influenced by these social influences.
Although the cultural, social, and other influences can be powerful, so are those within the individual.
Needs and motives, learning processes, perceptions, personalities, self-concepts, and attitudes significantly impact what, how, why, and when people buy.
The emergence of Consumer Behavior Field/Consumer Behavior as a Field of Study
Consumer behavior is a relatively new field of study. This has emerged as a legitimate field (academic) of study during the 1960s. Marketers have begun to develop expertise in the behavioral sciences during this period. “Even the earliest formal studies may be traced back no further than the late 1940s”.
Though it is a relatively new field of academic study, it has developed to such an extent that it amazes us. One may ask ‘why it has developed to such a great extent or what contributed to the dazzling development rate of this field? The answers are quite a few.
This is the era of marketing orientation. Marketers both in developed as well as in developing countries pursue their activities based on marketing concepts. Under the marketing concept, consumers are at the focal point of every company activity.
As consumers are treated like kings and queens, they receive the utmost importance, and companies try to make their customers happy in a way better than their competitors do. To satisfy customers better, one has to know what customers want, when they want, how they want, the frequency with which they want, and the other aspects of consumers.
To know these marketers are constantly studying their consumers’ minds, are identifying newer and fascinating aspects of consumer behavior every day, which contribute to the development of the field at such an accelerating rate.
In the earlier discussion, we have mentioned consumer behavior as an interdisciplinary field of study, which is constantly borrowing from many other social sciences, including some older ones as anthropology.
Marketers indiscriminately borrow from sociology, anthropology, social psychology, psychology, economics, and other related fields to know how they are related to people’s behaviors. This borrowing has enabled the subject to reach this level of development.
The research on consumer behavior in contemporary marketing practices is another reason for developing this infant field of knowledge to such a higher rate. Research enables marketers to minimize their gaps of knowledge on different aspects of consumer behavior.
You all are aware of the state of development of information technology, including computers. Marketers are also not lagging in this.
They use computers heavily to reveal buyers’ hidden motives and their reactions to different attributes of the firms and their products. The simulation of behavior using computers is another reason for the exciting development of the consumer behavior field.
Researchers from diverse backgrounds are united nowadays to study consumer behavior aspects and publish books, articles, journals, and periodicals. The outcome is that consumer behavior is now an important field of study.
Use of Newer Approaches in Explaining What Makes People as They Do
The consumer behavior field is studied using two theories – the traditional and the newer or contemporary/modern theories. The older or traditional theories were developed based on the opinions or intuitions of marketers.
While developing theories they depended heavily on different economic principles.
According to economic principles, most consumers behave purely based on rationality or logic. Economists compare human behavior with that of machines. A machine always behaves in the same fashion against a particular stimulus.
Economists and the advocates of traditional theories believe that human behaviors are comparable with that of machines’ behaviors.
The present-day marketers use modern scientific theories in explaining what makes consumers behave as they do. Contemporary marketers also use models in explaining the unpredictable behavior of consumers. The newer approaches are so precise that they have overshadowed, the older traditional approaches of buyer behavior.
The modern theories are interdisciplinary in nature since the subject of consumer behavior itself is a multidisciplinary subject. These theories are developed, taking liberal help from the findings of different behavioral sciences disciplines, which was mentioned earlier.
The contemporary approaches are also accompanied by models to help marketers understand behavior more accurately. Model is a representation of something on a smaller scale, and in this context, the model represents some behavioral system used to explain behavior in that system.
To understand how models explain a behavioral system, we need to know a simple consumer behavior model developed by Gordon W. Allport.
Applications of Consumer Behavior
Consumer Behavior is a diverse, complicated, socially significant social science. Studying consumer behavior involves examining the day-to-day life activities of people, which involves both serious and minor social problems and various behaviors on the part of people and organizations.
An adequate understanding of consumer behavior and its theories is essential for the prosperity of any marketing or even non-marketing enterprise, whether it is selling soap, a political candidate, or pursuing a social policy.
Consumer behavior is a social activity. Improvements in our understanding of this area of social activity can lead to public and private organizations and individual consumers, which will enhance the quality of consumption-related behavior.
Consumer behavior knowledge and theories may be applied both by public and private agencies that undertake programs in response to the question, ‘how should consumers buy?
Today, national and local legislation and regulations, and the programs of consumer interest groups, have taken on a prescriptive character, conforming to their respective notions of what consumers should do.
Such knowledge can lead to consumer protection efforts and a better understanding of the impacts these efforts have on consumers.
Consumer behavior knowledge and theories are also important from an intellectual standpoint. This discipline is a relatively unexplored field in the social sciences. This is an excellent context to develop and test theories from virtually every scientific area concerned with human behavior.
It is now evident that the study of consumer behavior has a lot of potential for application to real-world problem solving – both micro and macro marketing problems. Successful marketing decisions by commercial firms, nonprofit organizations, and regulatory agencies require extensive consumer behavior information.
The researchers in other disciplines of social sciences may also be benefited from the knowledge of consumer behavior.
We see the application of consumer behavior in;
- solving microÂ-marketing problems such as managerial problems, research-oriented problems, and
- solving macroÂ-marketing problems such as public policy decisions.
Application of Consumer Behavior Theories in Solving MicroÂ-Marketing Problems
The micro marketing problems are directly related to the job of marketing managers. A marketing manager needs to manage marketing operations effectively. He needs to research to identify/reveal his customers’ hidden motives and make some creative decisions.
He, therefore, faces (a) managerial, (b)research-oriented, as well as (c) creative problems in doing his job. These are directly related to his basic activities, and they are discussed as micro-marketing areas.
Marketing managers, therefore, face three microÂmarketing problems, and he may apply consumer behavior knowledge and theories in solving these micro marketing problems.
Let’s discuss how consumer behavior theories may be applied in managerial, research-oriented, and creative problems (micro-marketing problems) faced by marketers.
Application of Consumer Behavior Theories in Solving Managerial Problems
Societies are changing very rapidly. With such changes, people’s expectations, desires, and needs are also changing, keeping pace with the social and technological changes. Whatever you produce and sell well today may not be desired tomorrow, even by the same group of people.
Needs to change every day. How one anticipates the changes and react to them determine his success in the marketplace. Marketers face a real challenge in this area.
As customers get more educated and affluent, they become more aware, demanding, and skeptical of advertising claims. This has created a new class of customers who should be dealt with and managed differently. The affluence of consumers also creates demand for different and new types of products.
A marketer who can anticipate these changes well ahead of his competitors succeeds in the face of acute competition. For example, in our country’s urban areas, increased education and affluence of people have created a demand for sliced bread, prepackaged, and instant products and the product like apartments.
Increased health consciousness of the present generation has created a demand for mineral water, which our previous generation could not even think of. Marketers, who anticipated these, came up with such products before others and benefited from exploiting the opportunity.
But the question remains, ‘how do you anticipate new markets?’ The answer lies in the knowledge that you acquire about consumer behavior theories.
Consumer behavior theory provides the manager with a proper question to ask and the proper solution to take. It is impossible to be an effective marketing manager in the long run without a usable understanding of consumer behavior.
Application of Consumer Behavior Theories in Solving Research-Oriented Problems
Consumer research is an indispensable input to marketing decisions. A particular company’s product can’t meet all consumers’ demands in a particular product category. Since consumers vary in many dimensions, they need products with different features.
How do marketers know these variations, and what should they do knowing them? Marketers face a lot of problems in knowing the answers to these questions.
Research in the consumer behavior can reveal the differences among consumers and helps marketers segmenting markets and offering different types of products that best suit the differences. Consumer research can also provide the clues for turning a product failure into a success.
Marketers need to conduct continuous research on consumers. Knowledge of consumer behavior and the theories explaining those behaviors can significantly help marketers research their true perspective.
Application of Consumer Behavior Theories in Solving Creative Problems
This is the age of extreme competition. Everyone tries to satisfy their customers better than their competitors do. Excelling competitors can guarantee your long-term existence. To excel competitors, you need to pursue your activities based on strategies. What strategy means in this regard? The strategy is a plan or scheme for deceiving an opponent.
Contemporary marketers need to move strategically in every aspect of marketing operations to combat competitors successfully. And the areas range from product development to pricing to promotion and distribution.
Why does a marketer need to formulate strategies and pursue his activities based on those strategies? The reasons are numerous.
First, the marketplace is flooded with products. If you want your product to be recognized from among the numerous products, you must present it quite differently for the product to be recognized. How do you do that? By strategically positioning your product in the minds of present and potential customers.
Second, the majority of the products available in the marketplace are indeed similar. The only difference may be the brand name or the difference in packaging.
For your brand to take place in the minds of the buyers, it should be presented outstandingly. If you fail to do this, customers may buy your competitors’ brands. Paracetamol, for example, is a generic product. Different brands of paracetamol contain the same ingredients, and they are probably equally effective.
But, why paracetamol of certain companies sells well. The reason is that they are successful in giving consumers/prescribes the idea that theirs are better. This is also done through the strategic move.
Third, the development of mass media has made it possible for every company to transmit its message to the consumers, resulting in commercial clutter.
Remember how many advertisements/ commercials you see spending one hour time in front of a television set. Also, remember how many of them you can recall. You can probably only recall those advertisements that seemed creative or outstanding to you.
An individual is continuously bombarded with numerous advertisements by different media. He attends to only those that can attract his notice. Advertising materials, therefore, should be very creative and outstandingly prepared for the audience to remember and recall them.
If you know consumer behavior and the theories that explain their behaviors, you will decide how to prepare your message for consumers to discriminate it from other messages given by your competitors.
Marketers also suffer from pricing problems. Products should be priced in a way that is considered attractive to customers and affordable to them. Prices should also be set considering the prices of competitors.
Here again, you need to be creative. Understanding consumers’ profile helps you set appropriate prices, which can be done effectively using consumer behavior knowledge and theories.
To minimize the risk of faulty distribution decisions, you also need knowledge of consumer behavior theories and their applications. Products should be available to locations where consumers want them.
This is a serious problem for marketers to set and maintain a proper distribution network. This problem can again be minimized to a great extent by applying consumer behavior knowledge any by researching your consumers’ minds.
Application of Consumer Behavior Theories in Solving MacroÂ-Marketing Problems
In addition to solving micro-marketing problems, consumer behavior knowledge and theories may also be applied in other macro marketing areas.
Nonprofit marketers, public policymakers, economic planners, and researchers in other areas of social sciences may also be benefited through the use of consumer behavior knowledge, new findings in this field, as well as the theories. The discussion here may be taken under the following headings:
Application of Consumer Behavior Theories by Nonprofit Marketers
Nonprofit organizations such as charities, religious organizations, relief and welfare agencies, museums, and various public services are adopting marketing concepts to perform their activities better.
Such organizations deal with two types of markets viz. service users and financiers. They need to keep both of the markets happy. Proper knowledge of consumer behavior provides them with useful clues for formulating strategies appropriate for each group.
Application of Consumer Behavior Theories in Public Policy Decisions
To curve abuse in the form of outright deception of consumers by marketers, government agencies undertake regulatory decisions in many countries. Consumers are deceived through imitated products, deceptive advertising, and many other forms.
Moreover, certain marketing activities are causing threats to the environment. The chemical waste, littering of non-biodegradable containers, production, and marketing of certain unethical products should not be allowed to continue for long.
Governments have taken and are taking activist roles against such acts for the sake of consumers. Consumers are potential beneficiaries of different public policies.
But, before taking actions against such activities, the minds of the consumers must be well researched. Whether they favor these actions of government regulatory agencies or not should be known for the actions to sustain.
Otherwise, they will go in vain. For example, the government may decide to put an embargo on the production of plastic considering its impacts on the environment. And this is taken to protect consumers from environmental hazards.
But what happens if consumers do not favor such an act of the government. Therefore, public policy planners must know the consumers’ behavioral patterns before taking and implementing it.
Thus, consumer behavior knowledge may help public policymakers understand the minds of people and their reaction patterns against different public policies.
Application of Consumer Behavior Theories in Other Disciplines of Social Sciences as well as Their General Application
From an intellectual standpoint, even the knowledge of consumer behavior and its theories are important. Consumer behavior, we know, is a relatively unexplored field.
It is an excellent context in which to develop and test theories from virtually every scientific area concerned with humans’ behavior.
Anthropologists, sociologists, psychologists, economists, political scientists, and geographers may also benefit from consumer behavior theories to better perform their jobs. Since they deal with human beings, they should understand their behaviors properly, and consumer behavior theories may help them immensely in this regard.
Therefore, consumer behavior has great potential for those engaged in the marketing profession and other professions to contribute to the general inventory of knowledge about human beings’ behavior.