Applications of Consumer Behaviour in Marketing
Consumer behavior principles are applied in many areas of marketing as discussed below:
Analyzing Market Opportunity
Consumer behavior study helps in identifying the unfulfilled needs and wants of consumers. This requires examining the trends and conditions operating in the marketplace, consumers’ lifestyles, income levels, and emerging influences.
This may reveal unsatisfied needs and wants. The trend towards an increasing number of dual-income households and greater emphasis on convenience and leisure has led to emerging needs for household gadgets such as washing machines, mixer grinders, vacuum cleaners, childcare centers, etc. Mosquito repellents have been marketed in response to a genuine and unfulfilled consumer need.
Table of Contents
Selecting Target Market
A review of market opportunities often helps in identifying distinct consumer segments with very distinct and unique wants and needs. Identifying these groups, learning how they behave, and how they make purchase decisions enables the marketer to design and market products or services particularly suited to their wants and needs.
For example, consumer studies revealed that many existing and potential shampoo users did not want to buy shampoo packs priced at ` 60 or more and would rather prefer a low-priced sachet containing enough quantity for one or two washes. This finding led companies to introduce the shampoo sachet, which became a good seller.
Once unsatisfied needs and wants are identified, the marketer has to determine the right mix of product, price, distribution, and promotion. Here too, consumer behavior study is very helpful in finding answers to many perplexing questions.
The marketer designs the product or service that would satisfy unfulfilled needs or wants. Further decisions regarding the product concern the size, shape, and features. The marketer also has to decide about packaging, important aspects of service, warranties, accessories, etc.
Nestle first introduced Maggi noodles in masala and capsicum flavors. Subsequently, keeping in view the consumer preferences in some regions, the company introduced garlic, Sambar, Mixed Vegetables, Dal Atta Noodles, etc.
The second important component of the marketing mix is price. Marketers must decide what price to charge for the product or service. These decisions will influence the flow of revenue to the company. Should the marketer charge the same, higher, or lower price in comparison to the competition?
Is the consumer price sensitive and would a lower price stimulate sales? Should there be any price with discounts? Do consumers perceive lower prices as indicative of poor quality?
To answer such questions, the marketer must understand the way the company’s product is perceived by consumers, the importance of price as a purchase decision variable and how different price levels would affect sales. It is only through consumer behavior study in actual buying situations that the marketer can hope to find answers to these important issues.
Promotion is concerned with marketing communications to consumers. The more important promotion methods are advertising, personal selling, sales promotion, publicity, and direct marketing. The marketer has to decide which method would be most suitable to effectively reach the consumers.
Should it be advertising alone or should it be combined with sales promotion? The company has to know the target consumers, their location, what media they have access to and what are their media preferences, etc.
In most cases of industrial products, there is very little or no advertising. Brochures containing technical specifications are often posted to clients and the salespeople make follow-up visits. Consumer products get the maximum share of advertising. The pharmaceutical industry exclusively uses personal selling for prescription drugs. Insurance companies use both advertising and personal selling.
The next decision relates to the distribution channel, that is, where and how to offer products and services for sale. Should the products be sold through all the retail outlets or only through selected ones?
Should the marketer use only the existing outlets, which also sell competing brands, or should new exclusive outlets selling only the marketer’s brands be created? Is the location of retail outlets important from consumers’ point of view? Should the company think of direct marketing?
The answers to these questions are furnished by consumer behavior research. For example, when Eureka Forbes introduced its vacuum cleaners many years ago, few stores knew anything about this product and many were not willing to buy it.
Consumer awareness about the product was also low and no retail shops carried the product. Under these circumstances, the company decided to sell the product only through personal selling, with salespeople calling directly on the consumer at her/his home.
These salespeople had enough time to explain and demonstrate the vacuum cleaner and convince prospects about its usefulness. Retail outlets would not have been suitable for this sales approach. This strategy was based on an understanding of consumer behavior and yielded good results.
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, a crime against women, safe driving, environmental concerns, and others.
UNICEF (greeting cards), Red Cross, CRY, etc. make use of consumer behavior understanding to sell their services and products and also try to motivate people to support these institutions.