1.c Application of Consumer Behavior¶
Applications of consumer behavior:
1) Analyzing market opportunity: Consumer behavior study help in identifying the unfulfilled needs and wants of consumers. This requires examining the friends and conditions operating in the Marketplace, consumer’s lifestyle, income levels and energy influences. This may reveal unsatisfied needs and wants. Mosquito repellents have been marketed in response to a genuine and unfulfilled consumer need.
2) Selecting target market: Review of market opportunities often helps in identifying district consumer segments with very distinct and unique wants and needs. Identifying these groups, behave and how they make purchase decisions enable the marketer to design and market products or services particularly suited to their wants and needs. For example, please sleep revealed that many existing and potential shampoo users did not want to buy shampoo fax price at rate 60 for more and would rather prefer a low price package containing enough quantity for one or two washers. This finding LED companies to introduce the shampoos sachet, which become a good seller.
3) Marketing-mix decisions: Once unsatisfied needs and wants are identified, the marketer has to determine the right mix of product, price, distribution and promotion. Where too, consumer behavior study is very helpful in finding answers too many perplexing questions. The factors of marketing mix decisions are: i) product ii) price iii) promotion iv) distribution
4) Use in social and non-profits marketing: Consumer behavior studies are useful to design marketing strategies by social, governmental and not for profit organizations to make their programs more effective such as family planning, awareness about AIDS.
MORE APPLICATIONS
1. Product Development¶
Consumer behavior plays a crucial role in product development by helping companies understand what features, designs, and functionalities resonate with their target audience. Through market research, businesses can identify gaps in the market and develop products that address unmet needs or improve upon existing solutions.
- Example: A tech company might study consumer behavior to identify the most desired features in a smartphone, such as battery life, camera quality, and user interface. This insight guides the design and engineering teams to create a product that meets or exceeds consumer expectations.
2. Market Segmentation¶
Market segmentation involves dividing a broad consumer or business market into sub-groups of consumers based on shared characteristics such as demographics, psychographics, or behavior. Understanding consumer behavior allows businesses to segment their markets more effectively, enabling them to tailor their marketing efforts to specific groups.
- Example: A fashion brand might use consumer behavior data to segment its market into groups such as teenagers, young professionals, and retirees, each of which has different fashion preferences and purchasing behaviors. The brand can then create targeted marketing campaigns for each segment, increasing the relevance and effectiveness of its messaging.
3. Pricing Strategy¶
Consumer behavior insights are essential for determining how much consumers are willing to pay for a product or service. By understanding price sensitivity and perceived value, companies can set prices that maximize profitability while remaining attractive to consumers.
- Example: A luxury brand might price its products higher based on the understanding that its target consumers perceive higher prices as a sign of exclusivity and superior quality. Conversely, a company targeting price-sensitive consumers might adopt a competitive pricing strategy to attract budget-conscious buyers.
4. Promotion and Advertising¶
Effective promotion and advertising rely heavily on understanding what motivates consumers, how they process information, and what channels they use. By studying consumer behavior, businesses can create compelling messages that resonate with their audience and choose the most effective platforms to deliver those messages.
- Example: A company launching a new health supplement might learn through consumer behavior analysis that its target audience is health-conscious and spends a lot of time on social media. As a result, the company might focus its promotional efforts on social media platforms, using influencers and content that highlight the supplement’s health benefits.
5. Customer Relationship Management (CRM)¶
CRM involves managing a company’s interactions with current and potential customers to build long-term relationships and loyalty. Understanding consumer behavior allows businesses to personalize their interactions, offer relevant recommendations, and create experiences that foster loyalty.
- Example: An e-commerce platform might use data on past purchases and browsing behavior to recommend products to customers, send personalized offers, and follow up with post-purchase communication that enhances the customer’s experience and encourages repeat business.
6. Retail Strategy¶
Consumer behavior insights are critical in shaping retail strategies, including store layout, product placement, and in-store marketing. Understanding how consumers navigate a store, what attracts their attention, and how they make purchasing decisions can help retailers optimize the shopping experience to boost sales.
- Example: A grocery store might place popular items like bread and milk at the back of the store to encourage consumers to walk through aisles with other products, increasing the chances of impulse purchases. Additionally, understanding consumer behavior might lead to strategic placement of seasonal items at the entrance to capitalize on current trends.
7. Public Policy and Social Marketing¶
Governments and non-profit organizations use consumer behavior insights to design public policies and social marketing campaigns that promote positive behaviors, such as healthy eating, recycling, or safe driving. Understanding how people make decisions and what influences their behavior is crucial for crafting effective messages and interventions.
- Example: A public health campaign aimed at reducing smoking might use consumer behavior research to identify the most effective messages (e.g., highlighting health risks or promoting benefits of quitting) and the best channels (e.g., social media, TV, or community programs) to reach the target audience. By aligning the campaign with consumer behavior insights, the likelihood of influencing behavior change is increased.
Conclusion¶
Understanding consumer behavior is fundamental to virtually every aspect of business and marketing. It enables companies to develop products that meet consumer needs, segment markets more effectively, set optimal prices, craft compelling promotional messages, build strong customer relationships, optimize retail strategies, and design impactful public policies. By leveraging consumer behavior insights, businesses can enhance their competitive edge, improve customer satisfaction, and ultimately drive growth and profitability.
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