One "official" definition of 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."
Consumer Behavior: The Psychology of Marketing
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What is Consumer Behavior?
How many times throughout the day do people make product decisions? If you stop to think about it, many product decisions are made every day, some without much thought. What should I wear? What should I eat? What am I going to do today? Many product decisions are answered routinely every day and they help move the economy of cities, countries and ultimately the world.
- Provide value and customer satisfaction.
- Effectively target customers.
- Enhance the value of the company.
- Improve products and services.
- Create a competitive advantage
Understand how customers view their products versus their competitors’ products.
Expand the knowledge base in the field of marketing,
Apply marketing strategies toward a positive affect on society (encourage people to support charities, promote healthy habits, reduce drug use etc.)
Product decisions also shape life for the consumer. How can simple decisions be so important? Why do marketers spend millions of dollars to uncover the reasons behind these decisions?
To define consumer behavior: it is the study of consumers and the processes they use to choose, use (consume), and dispose of products and services. A more in depth definition will also include how that process impacts the world. Consumer behavior incorporates ideas from several sciences including psychology, biology, chemistry and economics.
"All marketing decisions are based on assumptions and knowledge of consumer behavior," (Hawkins and Mothersbaugh, 2007). Researching consumer behavior is a complex process, but understanding consumer behavior is critical to marketers-they can use it to:
What is marketing?
A detailed explanation of what marketing is, it's practical uses and it's history.
| Updated Aug 23, 2017 | Published Nov 14, 2014
Marketing is a managerial aspect that deals with the application of ideas and procedures employed to analyse and predict consumer requirements and preferences, to gauge the feasibility of promotional strategies and modify these to comply with the requirements of maximum consumer satisfaction. Resultantly, marketing contributes towards increasing sales, revenues and profits, through providing insights into consumer behaviour.
Related: Marketing mix defined
Marketing as an analytical tool
Marketing methodologies and procedures provide the businesses with an assessment scale to obtain qualitative and quantitative data concerning consumer behaviour and demographics and make it the basis of their promotional strategies. Eventually, the term marketing may be broadly explained as the directive force behind a company’s buying and selling decisions and endeavours.
Marketing is more than promotion
In various circles, marketing is wrongly considered as a substitute term used to explain promotion and advertising. Though promotion and advertising are two of the most dominant aspects of marketing, the complete definition of marketing includes several other aspects and factors. Marketing includes the thorough study and implementation of innovative ideas to help businesses in the creation of brand identity and communication.
In fact, in essence, marketing is based on the principles of effective communication, which includes the effective conveyance of brand values to consumers to convince them to avail a service or a product. It includes a comprehensive study and analysis of consumer, as well as, product and service metrics that form the foundation of market research, laying down the basis for the creation of an effective marketing strategy. The derived conclusions, as a result of the systematic analysis of collected data, are used to anticipate consumer behaviour and provide an insight into consumer psychology.
Thorough understanding of consumer behaviour and consumer psychology increases the chances of accurately predicting the worth and value of a product or service for the target consumers, which leads to the establishment and maintenance of long-term consumer relationships.
4 Ps of marketing
Primarily, marketing may be classified into two broad categories, namely the identification of consumer needs and implementation of strategies for meeting consumer needs and preferences. Where the first category generally deals with the study of consumer behaviour and devising of an effective marketing strategy, the second category outlines the processes of product placement, packaging, pricing and promotion. These four Ps of marketing are the success factors behind every marketing strategy.
Accurate placement and product distribution, attractive package design, allocation of a competent yet reasonable cost and effective and compelling advertising are the major factors that contribute towards the creation and implementation of a successful marketing strategy.
Marketing has undergone gradual, but considerable change since its birth. It is one of the fields that enjoy the advantage of categorically documented history, and marketing history can be broadly classified into seven distinct phases or eras.
The advent of modern media and technology is one of the major factors that have influenced the growth of marketing overtime, and businesses have realised the importance of familiarising with evolving marketing definitions and mechanisms to attain a competitive edge over others.
Trade era marks the birth of marketing, which extended to the mid-19th century, since the beginning. Marketing principles were not separately identified, and significant sales and trade operations focused on local barter economies. There was no concept of distinct marketing endeavours, and marketing was limited to willful exploration.
Production orientation era
With the emergence and spread of industrial revolution, mass production became the dominant sales dynamic and principles of supply and demand found a new meaning. Mass production and abundant supply of goods formed the basis for meeting consumer needs.