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Module 3

1) Consumer behavior is defined as the actions and decision-making processes of individuals when purchasing goods and services for personal use. 2) Understanding consumer behavior is important for differentiating consumers, retaining existing customers, designing effective marketing programs, predicting market trends, understanding competition, innovating new products, and staying relevant in changing markets. 3) There are four main types of consumer buying behavior: complex buying behavior for expensive purchases, dissonance-reducing behavior for high involvement purchases, habitual buying behavior for low involvement repeat purchases, and variety-seeking behavior where consumers switch between brands seeking novelty.

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Chin Keanna Buizon
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36 views

Module 3

1) Consumer behavior is defined as the actions and decision-making processes of individuals when purchasing goods and services for personal use. 2) Understanding consumer behavior is important for differentiating consumers, retaining existing customers, designing effective marketing programs, predicting market trends, understanding competition, innovating new products, and staying relevant in changing markets. 3) There are four main types of consumer buying behavior: complex buying behavior for expensive purchases, dissonance-reducing behavior for high involvement purchases, habitual buying behavior for low involvement repeat purchases, and variety-seeking behavior where consumers switch between brands seeking novelty.

Uploaded by

Chin Keanna Buizon
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Module 3

Consumer Behavior

“Consumer behavior is the actions and the decision processes of


people who purchase goods and services for personal consumption”

Importance of Consumer Behavior


1. Consumer Differentiation:
Consumer differentiation is a way to distinguish a consumer from
several other consumers. Though you have a targeted customer
demographic in your business, you can still have variations between
individual customers.

2. Retention of Consumers:
Consumer behavior is not just important to attract new customers, but
it is very important to retain existing customers as well. When a
customer is happy about a particular product, he/she will repeat the
purchase. 

3. Design Relevant Marketing Program:

Understanding consumer behavior allows you to create effective


marketing campaigns. For example, while targeting the kid's market,
you may have to look out for venues such as TV ads, school programs,
and blogs targeting young mothers.

4. Predicting Market Trend


Consumer behavior analysis will be the first to indicate a shift in
market trends. For example,  the recent trend of consumers is toward
environment-friendliness and healthy food. 
5. Competition

One of the most important reasons to study consumer behavior is to


find out answers to some of the questions:

● Is the customer buying from your competitor?


● Why is a consumer buying from your competitor?
● What features attract a consumer to your competitor's products?
● What gaps are your consumers identifying in your products when
compared to your competitors? 

Studying consumer behavior facilitates understanding and facing


competition. Based on consumers’ expectations, your brand can offer
competitive advantages. 
6. Innovate New Products

 Most new products and new ideas end up in failure. There is an


estimate of new product failures – they range from 33% to 90% based
on the kind of industry.
Companies consistently strive hard to improve the success rate of their
new products or new ideas.

7. Stay Relevant in the Market


When the world is changing as rapidly as it is happening today, the
biggest challenge we all face is staying relevant to our target market.
And do you know what is the main reason behind the rapid changes? It
is the ever-changing behavior of our customers.

There are four types of consumer buying behavior: 

1. Complex buying behavior

Complex buying behavior is encountered particularly when consumers


are buying an expensive product. Consumer behaves very differently
when buying an expensive product or a product that is unfamiliar to
them.
2. Dissonance-reducing buying behavior
In dissonance-reducing buying behavior, consumer involvement is very
high. This might be due to high prices and infrequent purchases. In
addition, there is low availability of choices with fewer significant
differences among brands. In this type, a consumer buys a product
that is easily available. 
3. Habitual buying behavior
Habitual Buying Behavior is depicted when a consumer has low
involvement in a purchase decision. In this case, the consumer is
perceiving only a few significant differences between brands. 
4. Variety seeking buying behavior
In variety-seeking consumer behavior, consumer involvement is low.
There are significant differences between brands. Here consumers
often do a lot of brand switching. Consumers here, generally buy
different products not because of dissatisfaction but mainly with an
urge to seek variety.

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