Consumer Behaviour: Meaning, Nature, Type and Importance

Consumer Behaviour

What is Consumer Behaviour? I know you are here for this. But first, tell me, do you love listening to music through headphones? Even I do. However, last week my 3 years old brother, broke my headphones. I searched on Google to buy my new headphones, selected the headphone and make the payment. Now, once again, music is sinking in my minds through my ears. 

Hey, did you notice something? We make buying decisions many times. But what is important here is how we reached to that decision. This is consumer behaviour that you are going to learn here along with its nature, types and importance.

What is Consumer Behaviour? 

It is the study of how customers choose, buy, use and dispose of goods and services to satisfy their needs and wants. Businesses need to know

  • Why customers are buying their product?
  • How they are using it?
  • How did they find about your product?
  • When do they buy?
  • How do they buy?
  • Which factors did they consider before buying?

READ MORE: Factors affecting Consumer Behaviour

These are some of the questions whose answers will help in making a better move next time. It can be a better product, better marketing strategies, different product positioning, etc.

The business organization uses CRM (Customer Relationship Management) technology to collect and store various information about its customers. This helps them in understanding the customers and their behaviour properly. 

Nature of Consumer Behaviour

1. Constantly Changing

The mentality and behaviour of the customers are constantly evolving with time. While growing up, our choices also change. As a kid, we want cartoon clothes but, as a teenager, we want trendy clothes and as a middle-aged person, we generally prefer simple clothes. Thus, the nature of consumer behaviour is always changing.

2. Varies from Consumer to Consumer

As a consumer, we all behave differently. Our decisions and choices are largely affected by our lifestyle, culture, society, purpose, income level, etc. for instance, a graphic designer will buy an iMac for professional purpose, but, a rich kid will buy it for just showing off. 

3. Varies from Region to Region 

Consumer behaviour also varies across regions, states and countries. For instance, people living in urban areas will spend more on technology than people living in rural areas. If we talk about agricultural machines, then the USA has more consumers of them than India. 

4. Systematic Process

Consumer buying behaviour is a systematic process. This buying process involves:

  • Identifying the need to buy a product/service.
  • Searching for the related information.
  • Evaluating the alternatives for the product or brand.
  • Deciding to purchase.
  • After purchase experience.

In general, we all follow this process while buying a product most of the times. Next time, you buy a product; observe how you decided to purchase that product.

For regular products like grocery items, we already decided what, why and how to buy. Therefore, we don’t follow this process every time. 

5. Important for Marketers

Understanding how consumers behave enables marketers to make more relevant, personalize and better marketing strategies. They use CRM tools to store all the data of different types of customers in one place. Then, marketers use this data for making buyer personas, better marketing campaigns, deciding product positioning, etc. 

6. Brand Loyalty

There is a famous quote, “people don’t buy products, they buy brands”. Customers tend to buy product/services from the brand that they like or which gives them a high-quality product and better experiences. If we buy a product from a particular brand and we have a great experience, then next time, we’ll also buy from this brand. In this case, we’ll not look for alternatives as we became loyal customers od this brand. 

7. Different for Different Products

For different products, consumers also behave differently. For an expensive and non-frequent product like tv; we’ll research more, consider alternatives, talk to others, read reviews and do so many things. But for a low-price and frequent product like biscuits, we’ll buy it without researching or thinking much. 

Importance of Consumer Behaviour

1. Innovate New Product

Using consumer behaviour data, businesses can find what, why and how consumers decide on a product? This way they can identify and innovate the product that is needed to fill the gap. They can also analyze which products are becoming obsolete and need to be stopped.

2. Product Positioning

Studying consumer behaviour helps marketers to decide how to present their product in the market. For instance, if a product X has 3 different types of buyers, then a marketer can make 3 different and personalized campaigns to target them. This way they can increase the reach to potential buyers and also the chances of converting them to purchase.

3. Consumer Differentiation

It is the way to differentiate a certain type of consumers from several other consumers. This can help in making a group of consumers having the same behaviour. By differentiating consumers into groups having similarities, marketers can create more relevant and personalized campaigns for each of them. Hence, marketers can serve a wider group audience with more efficiency.  

4. Retention of Customers

Along with attracting new customers, businesses also focus on retaining their old customers. A happy customer will come again and bring some other customers with him. But, the customer having a bad experience will even stop others from purchasing a product from your business. This can only be done by understanding customer’s buying behaviour and their experience.

5. Predicting the Market Trend

Consumer behaviour analysis can indicate a shift in the market trend. This way companies can save its lot of resources on producing irrelevant and soon to be an outdated product. Rather, it can reallocate its resources for producing the products that are in demand or to innovate the new product. 

Types of Consumer Behaviour

1. Complex Buying Behaviour

In this type of behaviour, a consumer is involved in buying an expensive and in-frequent product. Therefore, they are too much involved in product research and the purchase process. You can experience this behaviour while buying a car, phone, tv, etc. generally, the consumers don’t have much knowledge about the product and they have to go through the learning process. Marketers, here, have a great opportunity to assist consumers in the learning process and pitch their product. Thay can make content strategies to differentiate their product from others and accordingly display the benefits of using their products.  

2. Dissonance Reducing Buying Behaviour

In this type of behaviour, a consumer is so involved in the purchase process that he sees very little difference between brands. Dissonance arises when a customer feels that he/she might regret their purchasing decision. It generally occurs when a buyer wants to buy an expensive and in-frequent product. Hence to retain these type of buyers, the marketing, sales and customer services team plays an important role. After the buyer buys the product, they had to deliver the message in such a way that makes customers feel good and satisfied with their purchase.

3. Habitual Buying Behaviour

In this type of behaviour, consumer involvement in the purchasing process is very less. It is because this time they want to buy a low-cost and frequently purchased product. In this type of products, it is generally noticed that brand loyalty is also very low. Passive learning plays an important role in influencing buyers to buy their product. Marketers prefer television ads to instil their brand name in the mind of customers. Some great examples of these are Maggie, dairy milk, fevicol, etc. 

4. Variety Seeking Behaviour

In this type of behaviour, consumers buy different products just to seek more variety and not because they don’t like the previous product. This happens in low-cost and frequently purchased products. We all do brand switching in these type of products. This is done because of boredom, want to try something new, the convenience of buying, prices and discounts, etc. in this case, retaining a consumer can be a lot more challenging.