Customer Behavior
Customer or consumer behavior is the study of people or
organization. It is also the study of process they use to select or
purchase products or services. It includes elements of
psychology, sociology and economics. It is an attempt to
understand customer’s decision making process. It also focuses
on customer’s individual characteristics and behavioral
approaches. It attempts to understand what people want so that
they can deliver accordingly. Research has shown that consumer
behavior is difficult to predict. Relationship marketing which is a
form of marketing that emphasizes on customer satisfaction and
retention is an important part of customer behavior analysis.
Consumer behavior can be defined as the behavior that
consumer displays in searching for, purchasing, using, evaluating
and disposing the products, services and ideas that they expect
to satisfy their needs.
What is the need of studying customer behavior?
In earlier days the importance of studying customer behavior
was not realized because it was seller driven market. But modern
marketing is customer driven. This essentially makes the
customer the king of marketing. That’s why consumer behavior
as a subject has been explored and it helps an organization or a
company to frame production policies, channel decisions, price
policies, promotion and advertising policies and above all sales
promotion policies.
Customer decision making varies with the type of buying
decisions. The decision to buy toothpaste, tennis racket, personal
computer and a new car are very different. Complex and
expensive purchase involves more buyer deliberation and more
participants.
Production policies: The consumer behavior gives an insight
into the various factors which prompt them to purchase a
particular product. Identifying the taste or choice of the
consumer can help the organization change the product
accordingly.
Price policies: Some customers purchase product only
because a particular thing is cheaper than the competitive
articles available in the market. In such competitive scenario,
it is wiser not to raise the price the price of the commodities.
Channel decision: Convenience goods should be available in
the nearest shop, while special and shopping goods should be
available in the very special store through selective
distribution system.
Promotional and advertising policies: All the promotional
policies including advertising policies should be derived from
the consumer behavior.
Sales promotion policies: A study of consumer behavior is
also an important factor to decide on sales promotion scheme
and duration of such schemes.
1.1.5 What influences customer/ buyer
behavior?
What influences customer or buyer behavior is a million dollar
question. If an organization aspires to grow, it should always
examine its customers and what are the factors that can have
considerable impact on them. There are several factors
influencing the customers’ behavior which directly influences the
market.
Cultural factors
Cultural factors are the deepest influence on consumer behavior.
Therefore marketers need to understand customers’ culture,
subculture and social class before planning an advertising
strategy.
Culture is the main cause of consumer’s desire and purchasing
behavior. Every group or society has a culture and cultural
influences on buying behavior vary greatly. Culture operates at
various levels of society: nation, industry, occupation, corporate
and organization. Culture is comprehensive, learnt and also
manifested within boundaries or acceptable behavior.
Social factors
Every society stands on a social structure. Kotler and Armstrong
define social class from the eyes of marketing as “society’s
relatively permanent and ordered divisions whose member share
similar values, interests and behaviors.” Consumer behavior is
also said to be influenced by social factors categorized as
consumer groups, family, social roles and status.
Personal factors
Personal factors also influence consumer purchasing decisions.
Age – Preferences and liking of people vary with their age.
Tastes in food, clothes and furniture are mostly age –related.
For all age group, marketing and advertising strategy vary.
Let us consider an example. Mr. Mehta is a successful
businessman. He wants to buy a new car. His father who is
around 80 wants to buy some old classic movies. But his son
wants a play station. These three consumers belong to three
different generations and naturally their demand and choice
vary greatly from one another. Therefore, for the success of
the advertising campaign, it is important to determine who is
meant to consume the product.
Marital status
The other important variable that influences customer /
consumer behavior is marital status because consumption habits
of people change with marriage.
For example, a bachelor cannot be approached with an
advertisement of saree. Similarly, it would be meaningless to
approach a housewife with an advertisement of bike. But
approaching a married couple with an advertisement of
household electronic gadgets can be very useful.
Occupation
Occupation is an important indicator of the purchasing behavior
of a customer. A person’s occupation may decide the kind of
goods and services he wants to avail. Some goods or services
can be quite a necessity to a person of a certain occupation.
For example, an executive working in the information technology
field almost always would need a computer or a good internet
services provider. Similarly, skilled laborers like carpenters,
electricians and mechanics would almost certainly need to buy
appropriate tools for their trade.
Marketers should try to identify the occupational groups such as
blue collar, white collar professionals and offer them products
accordingly.
Life style
Life style can be defined as a person’s way of living as expressed
in the person’s activities, interests, and opinions. A person’s
buying behavior largely depends on his lifestyle. So, it is another
notable point for the supplier/ marketers.
For example, a brand or business organization dealing with high-tech cars can never target a middle class or lower middle class
consumer. The target of such an organization will always be the
well-to-do class who can avail these products. So, it is very
important to identify the life style of the consumer and find out if
a particular product or service can cater to his needs and
demands.