Consumer Behavior: what is it and why it matters?

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Consumer Behavior is a research area that derives from psychology and social sciences, and subsequently was merged with economical domains (especially marketing). First of all, we must assume that we are always consuming something: could be time, oxygen, food, entertainment, pleasure… you name it.

Of course, it’s also a matter of perspective: if you are watching the sea, you can swear that you are not consuming anything; on the other hand, if you go on vacation to distant shores and contemplates the sea you are consuming something that you have paid – the vacations, the sea is included 🙂

But most of the time that we talk about consumption, we are referring to something economical, that we can buy, a product or a service perhaps. Or an experience. Or a sound. The central point here is “that we can buy”, because companies need consumers to buy their things. And there are lots of things we think we’ll never buy – the air that we breathe, for e.g. but maybe one day we have to do it: every resource gains importance when it is scarce!

Continuing with the “buying idea”, the truth is that we think so much about buying, choose or pay for things that “Buying Behavior” was the main reference some time ago. However, this designation is limited to express consumption patterns, because only takes into account the immediately previous actions before buying, while buying and immediately after buying. It’s like describing a train saying that he as one carriage – when the real train as more carriages and the Buying Behavior is one of the last ones. The buying moment it’s a kind of a result, an end, and don’t make justice to the entire relationship between consumers and the economical environment that surrounds them.

Nowadays, another myth exists: Consumer Behavior is intrinsically related to Market Research, and sometimes they are viewed as the same. If you try to Google some stuff about Consumer Behavior, you’ll find firms that deliver market research results. This is wrong, because market research is a tool to get Consumer Behavior insights; market research reports, for themselves, are of limited value. The real value comes when those reports are related to a Consumer Behavior overall perspective, with the management and the marketing departments watching closely.

 

What is Consumer Behavior?

 Well, like all the definitions, by definition there isn’t a suitable definition of Consumer Behavior for all the purposes and situations 🙂

But we can enlighten the subject. Next I’ll present five powerful definitions and give my personal feedback on each one. You may have the sensation that they are very similar, but each one as the positive gift of bringing something new to the discussion.

 Solomon: “Consumer Behavior include the processes involved when individuals or groups choose, buy, use or dispose of products, services, experiences or ideas to satisfy their needs and wants”

> Quick feelings: a good starting point to define Consumer Behavior, from one of its most important representatives. Two interesting points: (i) referring the “groups of consumers” is a hot issue today, as you can see for the success of Groupon; (ii) talking about “experiences” lead us to some (now) popular forms of marketing, like experience marketing or sensorial marketing.

Jacob Jacoby: “Consumer Behavior reflects the totality of consumer decisions with respect to acquisition, consumption, and disposition of goods, services, activities, experiences, people and ideas by human decision-making units (over time)”

> Quick Feelings: My attention goes to the “over time” sentence, because Consumer Behavior study does not stop after consuming a product or use a service. Insights learned in that phase can be helpful to draw the strategic lines of the next marketing campaign.

 Banwari Mittal: “Consumer Behavior is the mental and physical activities undertaken by consumers to acquire and consume products (in a broadly sense, as any physical or non physical product or service that offer some benefit to the consumer, including a place, a person or an idea offered for exchange) so as to fulfil their needs (discomforting physical and psychological conditions) and wants (a desire for a specific object, product or a service).”

> Quick Feelings: Banwari Mittal (that I have the pleasure to talk with when he came to Portugal 2 years ago) give us a very detailed definition, with special concern for the “mental” and “physical” distinctions activities. Consumers don’t go simply buy your product (physical activity): they need to be persuaded to do that, you must explain why your product worth something for the consumer and the information needs to make sense to him (mental activity).

Hawkins, Best and Coney: “Consumer Behavior is the study of individuals, groups or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences or ideas to satisfy needs and the impacts that these processes have on the consumer and society”

> Quick Feelings: In their great book “Consumer Behavior: building marketing strategy”, the authors contribute with a future perspective to the Consumer Behavior definition, where we can fit social responsibility concerns, green marketing, overconsumption or social causes.

Kardes, Cronley and Cline: “Consumer Behavior entails all consumer activities associated with the purchase, use and disposal of goods and services, including the consumer’s emotional, mental and behavioural responses that precede, determine or follow these activities”

> Quick Feelings: Kardes, Cronley and Cline Consumer Behavior’s book (2010) it’s a good commitment to reach an acceptable definition. What’s new? Two things: separates behavior, cognition and emotion in the Consumer Behavior equation and gives us wide amplitude of time between before and after buying something. In other definitions, this length of time is short. Consumer behavior must be embedded in the management and marketing strategies much sooner than expected by all CEOs and chief departments of a company.

 Why Consumer Behavior matters?

 Let’s take a look in a marketing definition by an authority in the subject.

“Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners and society at large.”

         The American Marketing Association

Everyone would agree that the most crucial part of the Marketing definition is in the sentence “that have value for”. Companies can create, communicate, deliver, exchange offerings of any type… but that don’t mean cash, if they don’t add value to the customers. And to add value to them, they need to be at the center of the table when strategic drafts are born.

 So, Consumer Behavior is important in many ways – and I have some to show you (and try to figure them out in my naive draw!!):

–  It establishes guiding points to the marketing strategy to be followed, based on the consumers perspective and consumer behavior scientific knowledge

–  Gives Marketing and Management a chronological and holistic perspective of the customers over time, unveiling the dynamics of the Client-Company-Competitors relationship and anticipating trends.

–  Staying focused in the consumers allows discovering new needs, products, services or experiences valued by them. Innovation begins with the subtle clues that consumers leave behind.

–  Market Research can be optimized by the presence of a Consumer Behavior specialist: from the design to implementation and analysis to follow up.

–  Escorting the clients enables the creation of more effective loyalty programs and activities.

–  Consumer Behavior is of great importance when segmenting the market, because overall complexity and information overload are changing the current segmentation techniques used by marketeers.

–  Consumer behavior can be very effective (after learn the customers dynamics through sales departments eyes) to share valuable insights to the sales force on how to approach the clients.

–  New digital marketing tools (websites, blogs, SEO, Social Media presence, networks…) can be boosted by Consumer Behavior knowledge, especially in web design and networking activities schemas.

–  Most of RP and advertising/communication are built over psychology and sociology foundations (sorry the lack of modesty) – that makes Consumer Behavior and Advertising Psychology must-have partners in marketing decisions.

–  A Consumer Behavior specialist can be of great help in positioning issues: he understands the perceptual universe of brands and the best position they can occupy in consumers minds.

 Hope this article helps you to understand how Consumer Behavior can play a crucial role in a company and why it is important regarding Marketing strategies.

If you have any doubt, you can post your question or contact me directly on Linkedin.

Francisco Teixeira

Consumer Behavior Specialist

See my Linkedin public profile: http://pt.linkedin.com/in/franciscojteixeira

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The opinions expressed in this blog, despite they are supported by practical and scientific knowledge, are just that: opinions.

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5 thoughts on “Consumer Behavior: what is it and why it matters?

  1. nice post again francisco.

    Yes, the conclusions are broad.
    One of the big challenges in consumer research is getting insights from customers in a cost effective way. Many companies today do consumer survey, but the problem here is why should they spend 15 mins in filling these questions? Anyway, what value do they get when participating in these surveys?

    And the next part I wish to speak about is implementing results/feedback of CB study. How can a company influence the market (consumers) to choose their product?

    Thanks,
    Arjun 🙂

    1. Arjun,

      I saw your website and I’m glad to notice that your company is global one: so you know what is Market Research and “the rest” (you make consulting with the results).
      I believe people like to answer questionnaires – the problem is the way they are presented and the stigma already created around them.
      I’m preparing a post (could be the next one, I would see) with an approach to surveys, and how to make them really enjoyable to complete.
      Regarding the second question, you might want to take a look in Petty & Cacciopo aproaches or Azjen & Fishbein multiatribute model. Hope that’s help!
      Regards,
      Francisco Teixeira

  2. I think the main issue with the definitions that were posted is that they don’t address the complexity by which our behavior is being impacted. Consumerism is a constant state of being which becomes more active the close to the purchase we are.We are continously being seeded with influences whether actual marketing tactics or exposure to a new idea or concept through other people’s behaviors. Consumer behavior is not something that can be neatly segmented into buckets or collapsed into a market research report. Instead, consumer behavior is an ever-evolving analysis of the influcences impacting consumers and the way in which they react or change as a result of the exposure.

    1. Lisa,

      Thanks for your thoughts!! Indeed, I agree 100% with the continuum work that CB demands. Like a website (that needs full time attention with SEO or SMM), a company must watered the consumer behavior seed, to be in the right place in the future.
      Your thoughts were straight to the point.

      Regards,
      Francisco

  3. Hi Francisco,

    Could you contact me at insight europe – I seem to have misplaced your contact info and I require assistance in Porto.

    Thanks!
    Cher

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