Why study consumer Behavior?

Understanding the reasons for studying a discipline enables one to better appreciate its contribution; therefore, this article presents a justification for the time and effort that the reader will expand in learning about consumers.

Significance in daily lives:

In a general sense, the most important reason for studying consumer behavior is the significant role it plays in our lives. Much of our time is spent directly in the market place, shopping or engaging in other activities. A large amount of additional time is spent thinking about products and services, talking to friends about them, and seeing or hearing advertisements about them. In addition, the goods we purchase and the manner in which we use them significantly influence how we live our daily lives. These general concerns alone are enough to justify our study. However, many seek to understand the behavior of consumers for what are thought to be more immediate and tangible reasons.

Application to decision making:

Consumers are often studied because certain decisions are significantly affected by their behavior or expected actions. For this reason, consumer behavior is said to be an applied discipline. Such applications can exist at two different levels of analysis.

The micro perspective seeks application of this knowledge to problems faced by the individual firm or organization. The societal perspective applies knowledge of consumers to aggregate level problems faced by large groups or by society as a whole.

Micro Perspective:

The micro perspective involves understanding consumers for the purpose of helping a firm or organization accomplish its objectives. Advertising managers, product designer, and many others in profit oriented businesses are interested in understanding consumers in order to be more effective at their tasks. In addition, managers of various nonprofit organizations have benefited from the same knowledge. For example, the United Way and the American Red Cross have been effective in applying an understanding of consumer behavior concepts tot heir activities.

Societal Perspective:

On the macro, or aggregate, level we know that consumers collectively influence economic and social conditions within an entire society. In market systems based on individual choice, consumers strongly influence what will be produced, for whom it will be produced, and what resources will be used to produce it. Consequently, the collective behavior of consumers has a significant influence on the quality and level of our standard of living. Consider the overall impact of consumers’ strong desire for private automobile transportation. Vast amounts of resources have been used to produce cars, highway systems, and petroleum products used in their operation. It has also strongly influenced where many of us live (for example, suburbs) and how we run our daily lives (for example what we eat, where we shop, and how are entertained). Furthermore, this collective desire not only has led to the development of a string transportation network but also has significantly contributed to our pollution problems, energy needs and international relations.

As this illustrates, understanding consumer behavior from a macro perspective can provide insight into aggregate economic and social trends and can perhaps even predict such trends. In addition, this understanding may suggest ways to increase the efficiency of the market system ad improve the well being of people in society.

Applying Consumer behavior knowledge:

The following selections have been made from a variety of practical applications in the field of consumer behavior. Some involve a societal perspective while others illustrate a micro viewpoint. Together they underscore the importance of understanding consumers for solving a variety of contemporary problems.

Consumer Behavior and Marketing Management:

Effective business managers realize the importance of marketing into the success of their firm. Marketing may be defined as:

The process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational objectives.

Notice that the definition encompasses services and ideas as well as products.

A sound understanding of consumer behavior is essential to the long run success of any marketing program. In fact, it is seen as a cornerstone of the marketing concept, an important orientation of philosophy of many marketing managers. The essence of the marketing concept is captured in here interrelated orientations:

Consumers’ wants and needs: When the focus is on identifying ad satisfying the wants and needs of consumers, the intention of the firm is not seen as merely providing goods and services. Instead, want and need satisfaction is viewed as the purpose, and providing products and services is the means to achieve that end. The advertisement for AT &T illustrates this.

Company objectives: Consumers’ wants and needs are numerous. Therefore, a firm that concentrates on satisfying a small proportion of desires will most effectively utilize its resources. Company objective and any of the firm’s special advantages are used as criteria to select the specific wants and needs to be addressed.