Consumer Behavior and Market Segmentation
Consumer behaviour refers to the study of how individuals or groups select, purchase,
use, and dispose of goods and services to satisfy their needs and wants. It also looks at
the different factors that affect their decisions, such as their thinking and feelings
(psychological), influence of family and friends (social), traditions and culture, and
personal choices.
Nature of Consumer Behaviour
1. Changing in nature: Consumer behaviour is not fixed. It keeps changing with
time due to new trends, technology, income, and lifestyle changes.
2. Influenced by many factors: A consumer’s decision is affected by psychological
factors (thoughts and feelings), social factors (family and friends), cultural
values, and personal preferences.
3. Complex process: Buying behaviour is not simple. It involves many steps like
identifying a need, searching for information, comparing options, purchasing, and
using the product.
4. Goal-oriented: Consumers always try to satisfy their needs and wants through
their buying decisions.
5. Different for every person: Every consumer is unique. Different people may
behave differently even in the same situation.
6. Interdisciplinary in nature: Consumer behaviour is connected to different
subjects like psychology, sociology, economics, and marketing.
7. Involves both thinking and emotions: Consumers use logic as well as emotions
while making purchase decisions.
Scope of Consumer Behaviour
The scope of consumer behaviour involves studying how consumers make decisions,
beginning from recognizing a need, searching for information, evaluating alternatives,
making the purchase, and their behaviour after buying. It includes understanding
consumer needs, wants, motivation, perception, learning, attitudes, and beliefs, which
influence their choices. It also examines the impact of social and cultural factors such
as family, reference groups, and society on consumer behaviour. Additionally, it helps
businesses in market segmentation by identifying different groups of consumers based
on their preferences and behaviour. The scope further covers post-purchase behaviour
like satisfaction, dissatisfaction, and feedback, and also includes online consumer
behaviour, focusing on how consumers interact, search, and purchase products in the
digital environment.
Significance of Consumer Behaviour
The study of consumer behaviour is highly important for businesses as it helps them
understand the needs, preferences, and buying patterns of customers. By knowing
how consumers think and make decisions, companies can design better products and
services that match their expectations. It also helps marketers develop effective
advertising, pricing, and promotional strategies to attract and retain customers.
Understanding consumer behaviour leads to higher customer satisfaction and helps in
building long-term relationships with consumers. Moreover, it gives firms a
competitive advantage by allowing them to adapt to changing market trends and
consumer preferences. It also plays a key role in market segmentation and target
marketing, enabling businesses to focus on the right group of customers. Additionally,
it helps in forecasting demand and making better business decisions, reducing risks
and improving overall performance.