1) Provides insights into consumption related decisions .Consumer behaviour affects our daily lives (every individual - people from all walks of life are directly or indirectly involved in consumption activities i.e. direct purchase, decision making and use) . The study provides insight into our own consumption related decisions (i.e. what we buy, why we buy, how we buy and promotional influences that persuade us to buy ). This enables us to become better or wiser consumers.
2) Marketing decisions:- the study helps marketers to recognize why and how individuals make their consumption decisions so that they can make better strategic decisions. They will be able to predict how consumers are likely to react to various informational and environmental cues and are able to shape their marketing strategies accordingly i.e. will enable a firm to have a competitive advantage in the market place.
3) Meeting organizational objectives :Knowledge of consumer behaviour can help organizations (both profit and non-profit) to accomplish their objectives. For instance , business organizations rely on the knowledge in order to be effective in product design, pricing , promotion and distribution
4) Influences society’s socioeconomic decisions. The collective behaviour of consumers influence economic and social condition of society. Individual consumers influences what is produced, and the allocation of resources, and consequently affect the quality and level of standards of living.
5) Satisfying consumer needs :Marketing’s main purpose is to satisfy the needs and wants of consumers through the provision of goods an services i.e. firms exist to satisfy needs of consumers .Thus , marketers have to understand the people or organizations that will use their products so as to do it better than the competitors.
6) Market opportunity analysis : Satisfying consumer needs requires opportunity analysis of trends and conditions in the market place to identify those needs and wants that need to be satisfied. This involves analysis of consumers’ lifestyles and income levels which may suggest unsatisfied needs and wants. Thus , data on consumers helps organizations to define the market and identify threats and opportunities to a brand.
7) Target-market selection (market/consumer segmentation) : The process of reviewing market opportunities often results in identifying distinct groupings of consumers on the basis of certain variables or similarities and differences who have unique needs and wants. This may result in approaching each market segment with a unique marketing offering / marketing programs for each segment. (specific products and or promotional programs). Thus , the knowledge of consumers helps to group them into distinctive/ unique groups and then devising marketing strategies that appeal to each group or segment.
8) Product-positioning : the knowledge of consumer behaviour helps in using promotional techniques to vary the image of their products so that they would be perceived as better fulfilling the specific needs of certain target market segments-than competitors
9) Basis of Marketing Mix strategies/Marketing mix determination:- It helps in developing and implementing a strategy for delivering an effective satisfaction of consumer needs and wants . Decisions have to be made on each of the 4Ps based on consumer behaviour:-
• Product : the nature of the physical product and service features are influenced by consumer behaviour e.g. size, shape, features, packaging, service and after sale services. The knowledge ensures that the product continues to appeal to the core market.
• Price : consumer behaviour influences decisions on price to charge and any changes or modifications of those prices . Understanding of consumer awareness of prices, price sensitivity among brands, promotional pricing, sales promotional, introductory pricing etc. is very important in any pricing decisions.
• Place(distribution): Involves decisions on where and how to offer products( goods and services) for sale, plus mechanisms for transferring product from the seller to the consumer . Decisions influenced by consumer behaviour include : retail outlets, their location, distribution arrangements control of channels etc
• Promotion:- Involves decisions on the goals of the firm and its offering to the target consumer. Consumer-related decisions include best methods of promotion for each market segment, campaigns decision (message content structure, media etc, how often the message can be repeated )
9 . Consumer Behaviour and social marketing by non-profit organizations: Understanding of consumer decision-processes can assist non-profit organizations to market their ideas, services and/or causes to their “consumers” or “constituents” e.g. governmental institutions , educational institutions such as universities and charitable organizations. These groups satisfy certain needs or wants in society (campaign against AIDS, against smoking, planning (family) etc. These groups or organizations often have to appeal for public support in addition to trying to satisfy some needs and wants in society.
10 Governmental decisions : principles of consumer ehavior influence governmental decision making through policies that provide services (e.g. transportation) to the public or result in decisions that influence consumer ehavior and the design of legislation to protect consumers or to assist them in evaluating products and services e.g. use of safety belts, speed governors to discourage speeding, programs against drug abuse, regulatory agencies e.g. against competition, advertisements (services and consumer protection services)
11. Consumer education :- Knowledge of consumer behaviour can serve as the source of information for the development of educational programs designed to improve consumers’ decision making regarding goods and services.
12 Demarketing : Knowledge of consumers can assist in efforts to encourage consumers to reduce consumptions of certain products e.g. tobacco and alcoholic products .
13 Relationship marketing: the knowledge of consumer behaviour helps to build bonds between the firm and its consumers. It helps in the development of customized offerings by marketing organizations. This has been facilitated by database marketing that helps to track down consumers’ buying habits very closely and then using that to design tailored offerings in terms of product , price , promotion and distribution.
Lellah answered the question on November 5, 2021 at 06:11