3/29/2020 Consumer behavior in marketing - patterns, types, segmentation - Omniconvert Blog

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Consumer
behavior in

marketing –
patterns,
types,
segmentation
BY VALENTIN RADU  10 MIN READ
 NOVEMBER 26, 2019

How many times throughout the day do you make decisions? What
should I wear today? What perfume should I put on? What am I going
to have for lunch? If you think about it, we take many buying
decisions every day without giving them much thought. And these
decisions, however insignificant they may seem, keep marketers up
at night. Because decoding the processes behind them means that
we can use that info to boost revenue.

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Table of Contents 
1. What is the meaning of consumer behavior
2. Why is consumer behavior important
3. Types of consumer behavior
4. What affects consumer behavior?
5. Customer behavior patterns
6. Customer behavior segmentation

What is the meaning of consumer

behavior
Consumer behavior is the study of consumers and the processes they
use to choose, use (consume), and dispose of products and services,
including consumers’ emotional, mental, and behavioral responses.
Consumer behavior incorporates ideas from several sciences
including psychology, biology, chemistry, and economics.

Why is consumer behavior important

Studying consumer behavior is important because this way marketers
can understand what influences consumers’ buying decisions. By
understanding how consumers decide on a product they can fill in the
gap in the market and identify the products that are needed and the
products that are obsolete. Studying consumer behaviour also helps
marketers decide how to present their products in a way that
generates maximum impact on consumers. Understanding consumer

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buying behaviour is the key secret to reaching and engaging your

clients, and convert them to purchase from you.

A consumer behavior analysis should reveal:

 What consumers think and how they feel about various

alternatives (brands, products, etc.);

 What influences consumers to choose between various options;

 Consumers’ behavior while researching and shopping;

 How consumers’ environment (friends, family, media, etc.)

influences their behavior.

Consumer behavior is often influenced by different factors. Marketers

should study consumer purchase patterns and figure out buyer
trends. In most cases, brands influence consumer behavior only with
the things they can control; like how IKEA seems to compel you to
spend more than what you intended to every time you walk into the
store.

So what are the factors that influence consumers to say yes? There
are three categories of factors that influence consumer behavior:

1. Personal factors: an individual’s interests and opinions that can be

influenced by demographics (age, gender, culture, etc.).

2. Psychological factors: an individual’s response to a marketing

message will depend on their perceptions and attitudes.

3. Social factors: family, friends, education level, social media,

income, they all influence consumers’ behavior.
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Types of consumer behavior

There are four main types of consumer behavior:

1. Complex buying behavior

This type of behavior is encountered when consumers are buying an
expensive, infrequently bought product. They are highly involved in
the purchase process and consumers’ research before committing to
invest. Imagine buying a house or a car; these are an example of a
complex buying behavior.

2. Dissonance-reducing buying behavior

The consumer is highly involved in the purchase process but has
difficulties determining the differences between brands. ‘Dissonance’
can occur when the consumer worries that they will regret their
choice.

Imagine you are buying a lawnmower. You will choose one based on
price and convenience, but after the purchase you will seek
confirmation that you’ve made the right choice.

3. Habitual buying behavior

Habitual purchases are characterized by the fact that the consumer
has very little involvement in the product or brand category. Imagine
grocery shopping: you go to the store and buy your preferred type of
bread. You are exhibiting a habitual pattern, not strong brand loyalty.

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4. Variety seeking behavior

In this situation, a consumer purchases a different product not
because they weren’t satisfied with the previous one, but because
they seek variety. Like when you are trying out new shower gel
scents.

What affects consumer behavior?

Many things can affect consumer behavior, but the most frequent
factors influencing consumer behavior are:

1. Marketing campaigns
Marketing campaigns influence purchasing decisions a lot. If done
right and regularly, with the right marketing message, they can even
persuade consumers to change brands or opt for more expensive
alternatives. Marketing campaigns can even be used as reminders for
products/services that need to be bought regularly but are not
necessarily on customers’ top of mind (like insurance for example). A
good marketing message can influence impulse purchases.

2. Economic conditions
For expensive products especially (like houses or cars) economic
conditions play a big part. A positive economic environment is known
to make consumers more confident and willing to indulge in
purchases irrespective of their personal financial liabilities.
Consumers make decisions in a longer time period for expensive
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purchases and the buying process can be influenced by more

personal factors at the same time.

3. Personal preferences
Consumer behavior can also be influenced by personal factors, likes,
dislikes, priorities, morals, and values. In industries like fashion or
food personal opinions are especially powerful. Advertisement can, of
course, help but at the end of the day consumers’ choices are greatly
influenced by their preferences. If you’re vegan, it doesn’t matter how
many burger joint ads you see, you’re probably not gonna start eating
meat because of that.

4. Group influence
Peer pressure also influences consumer behavior. What our family
members, classmates, immediate relatives, neighbors, and
acquaintances think or do can play a significant role in our decisions.
Social psychology impacts consumer behaviour. Choosing fast food
over home-cooked meals, for example, is just one of such situations.
Education levels and social factors can have an impact.

5. Purchasing power
Last but not least, our purchasing power plays a significant role in
influencing our behavior. Unless you are a billionaire, you will take
your budget into consideration before making a purchase decision.
The product may be excellent, the marketing could be on point, but if

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you don’t have the money for it, you won’t buy it. Segmenting
consumers based on their buying capacity will help marketers
determine eligible consumers and achieve better results.

Customer behavior patterns

Buying behavior patterns are not synonymous with buying habits.
Habits are developed as tendencies towards an action and they
become spontaneous over time, while patterns show a predictable
mental design. Each customer has his unique buying habits, while
buying behavior patterns are collective and offer marketers a unique
characterization. Customer behavior patterns can be grouped into:

1. Place of purchase
Most of the time customers will divide their purchases in several
stores even if all items are available in the same store. Think of your
favorite hypermarket: although you can find clothes and shoes there
as well, you’re probably buying those from actual clothing brands.

When a customer has the capability and the access to purchase the
same products in different stores, they are not permanently loyal to
any store, unless that’s the only store they have access to. Studying
customer behavior in terms of choice of place will help marketers
identify key store locations.

2. Items purchased

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Things to consider: the items that were purchased and how much of
each item was purchased. Necessity items can be bought in bulk
while luxury items are more likely to be purchased less frequently and
in small quantities. The amount of each item purchased is influenced
by the perishability of the item, the purchasing power of the buyer,
unit of sale, price, number of consumers for whom the item is
intended, etc. Analyzing a shopping cart can give marketers lots of
consumer insights.

3. Time and frequency of purchase

Customers will go shopping according to their feasibility and will
expect service even during the oddest hours; especially now in the
era of e-commerce where everything is only a few clicks away. It’s the
shop’s responsibility to meet these demands by identifying a purchase
pattern and match its service according to the time and frequency of
purchases. One thing to keep in mind: seasonal variations and
regional differences must also be accounted for.

4. Method of purchase
A customer can either walk into a store and buy an item right then
and there, or order online and pay online via credit card or on delivery.
The method of purchase can also induce more spending from the
customer (for online shopping, you might also be charged a shipping
fee for example). The way a customer chooses to purchase an item
also says a lot about the type of customer he is.

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Customer behavior segmentation

Only 33% of the companies that use customer segmentation say
they find it significantly impactful. Customer segmentation, types
of buyers, has always been important, but now that personalization
and customer experience are factors that determine a business’
success, effective segmentation is even more important.

Traditionally, most marketers use six primary types of behavioral

segmentation.

1. Benefits sought
A customer who buys toothpaste can look for four different reasons:
whitening, sensitive teeth, flavor, or price.

When customers research a product or service, their behavior can

reveal valuable insights into which benefits, features, values, use
cases, or problems are the most important motivating factors
influencing their purchase decision. When a customer places a much
higher value on one or more benefits over the others, these primary
benefits sought are the defining motivating factors driving the
purchase decision for that customer.

2. Occasion or timing-based
Occasion and timing-based behavioral segments refer to both
universal and personal occasions.

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 Universal occasions apply to the majority of customers or target

audience. For example holidays and seasonal events when
consumers are more likely to make certain purchases.

 Recurring-personal occasions are purchasing patterns for an

individual customer that consistently repeat over a period of time.
For example birthdays, anniversaries or vacations, monthly
purchases, or even daily rituals such as stopping for a cup of
coffee on the way to work every morning.

 Rare-personal occasions are also related to individual

customers, but are more irregular and spontaneous, and thus
more difficult to predict. For example attending a friend’s wedding.

3. Usage rate
Product or service usage is another common way to segment
customers by behavior, based on the frequency at which a customer
purchases from or interacts with a product or service. Usage behavior
can be a strong predictive indicator of loyalty or churn and, therefore,
lifetime value.

4. Brand loyalty status

Loyal customers are a business’ most valuable assets. They are
cheaper to retain, usually have the highest lifetime value, and can
become brand advocates. By analyzing behavioral data, customers
can be segmented by their level of loyalty so marketers can

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understand their needs and make sure they are satisfying them. Loyal
customers are the ones who should receive special treatment and
privileges such as exclusive rewards programs to nurture and
strengthen the customer relationship and incentivize continued future
business.

5. User status
There are many different possible user statuses you might have
depending on your business. A few examples are:

 Non-users

 Prospects

 First-time buyers

 Regular users

 Defectors (ex-customers who have switched to a competitor).

6. Customer journey stage

Segmenting the audience base on buyer readiness allows marketers
to align communications and personalize experiences to increase
conversion at every stage. Moreover, it helps them discover stages
where customers are not progressing so they can identify the biggest
obstacles and opportunities for improvement, even on postpurchase
behaviours.

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Besides these traditional ways, another type of segmentation is the

RFM model.

RFM comes from Recency, Frequency and Monetary Value.

 Recency = how recent a customer placed the last order on your

website

 Frequency = how many times a customer purchased something

from your website in the analyzed period of time

 Monetary Value = how much each customer spent on your

website since the first order

The RFM model analysis can be executed in 2 ways:

 Manually – exporting your database in a spreadsheet and analyse

your customers following the rules for RFM analysis

 Automatically – through certain tools that are creating RFM

dashboards (example: https://www.omniconvert.com/reveal/)
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From the RFM segmentation and analysis you can not only reveal
what are your most loyal and profitable customers or less profitable
customers but also:

 Reveal what brands and products are dragging your business

down

 Build custom recommendations for your customers

 Solve certain Customer Experience problems

Before making decisions based on gut feeling regarding your

customers and your audience, observe their behavior, listen to them
and build a relationship before your competitors do.

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