Why Companies Need to Track Consumer Behavior
When a person buys something, they are usually influenced by a particular force. The study of how consumers make these purchasing decisions is called consumer behavior. The field includes areas such as marketing, advertising, public relations, product differentiation, and pricing. These areas are studied together to increase the chances for success in the marketing effort. Many facets go into this complex process which changes over time and place.
Some of the factors that affect consumer behavior include:
- Marketing FactorsHow a product is presented to the consumer will determine whether or not they will buy it. If, for example, the design team has put attractive aesthetic features on a product, consumers may buy it based on this factor. Others may purchase it based on how it was advertised or who endorsed it.
- Personal FactorsAge, gender, education, and income level affect consumer behavior. For instance, a person may fail to buy a product because they cannot afford it or they think they’re too old for it.
- Cultural FactorsIssues like religion can affect a consumer’s purchasing decisions. People may prefer to purchase certain clothes because they belong to a particular religion.
Importance of Consumer Behavior
Companies need to keep abreast of consumer trends if they are to remain relevant in the market. Also, they need to invest in consumer research. Here are several reasons why brands need consumer behavior:
- Understand Consumer NeedsConsumers keep evolving. Hairstyles that used to be popular 20 years ago are not as popular today. If companies do not keep up with the changes in consumer demands, they will keep making irrelevant products that no one will buy. It is thus vital to study consumers to understand what they need. Companies also need to always think in terms of what the customer needs.
- Customer attraction and RetentionBy understanding why customers buy a particular product, companies can attract and retain existing ones. When a company learns why a customer may purchase a product, it will ensure they maintain the same quality standards. Also, if customers raise concerns about the product, they will rectify the problem, which will help enhance customer loyalty. Loyal customers are also likely to attract others.
- CompetitionAs a brand, one of the goals is to stay ahead of the competition. Thus, it is crucial to understand why customers prefer your brand and not your competitors. If customers like a company’s packaging, for example, it will ensure that it does not change its packaging methods. Also, a company may learn that customers prefer a competitor’s product for a particular reason. They can use this knowledge to improve their product.
- Designing Marketing programs is vital to understand how a consumer learns about a product. For instance, a consumer may know about a product through a friend or a Facebook post. If many people learn through these advertising methods, it means they are effective. The company will thus design a marketing program focusing on social media and word-of-mouth advertising.
- Creating New products to remain profitable, companies must keep developing innovative new products. Some of the most successful mobile phone companies are where they are because of innovation. It is, however, essential to conduct market research before introducing a new product. Before creating a new product, a company should understand what feature, if any, customers would like to see. Doing this will ensure they create something suitable to customers’ needs. Once companies realize consumers prefer a particular product, they will seize the opportunity and introduce it in the market.
- Evaluate the Effect of PricePrice has different effects on how customers perceive a product. For instance, some people may buy a product because it is cheap, and others may not buy it for the same reason. The latter believe that a cheap product cannot be of high quality. Also, if a company decides to increase prices, it may lose customers. Understanding the effect of the cost will help them adjust accordingly.
Understanding the behavioral patterns of consumers is crucial for any company that wants to thrive. There is a need to invest as many resources as possible in studying consumers’ buying habits. These studies will go a long way in assisting the company to remain afloat even during challenging economic times.