Consumer Behavior Theory: Definition, Factors and Applications in Business

Consumer Behavior Theory Definition, Factors and Applications in Business – Recognizing consumer behavior is one of the most effective ways to develop a marketing strategy for the products you are going to offer. The reason is, by understanding consumer behavior, you can determine exactly the steps you must take so that your product is accepted by the market. this time we will talk about the theory of consumer behavior. For those of you who want to know more about the world of marketing, this material is mandatory for you to master.

Understanding Consumer Behavior

Consumer Behavior Theory Definition, Factors and Applications in Business

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In summary, a consumer is a person or group of people who use goods and/or services for the purposes of themselves, their families, communities, or other creatures and not for resale. That is, consumers are people who take the value of the benefits of these goods and/or services.

Before consuming these goods and/or services, consumers go through several stages. Between these stages, we need to know the definition of consumer behavior. As the definition of other terms, consumer behavior gets a lot of attention from experts in the field. To understand objectively, here are the opinions of several experts regarding the definition of consumer behavior:

1. Leon Schiffman and Leslie Kanuk

According to them both consumer behavior is how a consumer makes a decision until they are willing to spend the resources they have to get what they want to consume. These resources include time, money, and energy.

2. Philip Kotler and Kevin Keller

Consumer behavior is how a person, individually or in groups, considers, chooses, buys, uses, and evaluates a product in order to meet their needs.

3. John C. Mowen and Michael Minor

These two figures state that consumer behavior describes a consumer’s process of making decisions about a product, starting from receiving, buying, utilizing, and determining the goods and/or services used.

Thus, consumer behavior theory is a theory in the form of a study that studies how a consumer searches for, selects, buys, uses, and evaluates products and services to meet their needs and desires. Consumer behavior is the basis for consumers to make purchasing decisions for a product.

The length of the process that consumers go through in their behavior depends on the type of goods and/or services that will be selected. Products that have a low selling value, of course, go through a relatively easier decision-making process compared to products with a higher selling value.

Factors Affecting Consumer Behavior

If it may be assumed, every consumer always wants satisfaction or utility in every consumption activity carried out. Utility means that the product has a helpful, useful, and beneficial function.

From an economic point of view, utility can be interpreted as the use of a product when it is consumed. In other words, satisfaction can be said to be satisfied if consumers feel helped by the products you provide. Therefore, consumers have certain behaviors so that they can take maximum benefit from the buying and selling transactions carried out.

There are several things that can influence consumer behavior, including the following:

1. Culture

Cultural factors are said to have the most extensive influence compared to other factors. As we receive in character education in schools, discipline can form habits. Habits can shape character. Traits can shape character. And cultured character can shape one’s destiny.

From this we can understand that the role of culture greatly influences a person’s behavior, desires, instincts, ways of thinking, perceptions, values, and preferences. An example of Eastern culture which teaches to dress closed makes many consumers who like to buy closed clothes, Javanese people who are used to eating with their hands without a spoon make the sambal penyetan-style food in demand.

2. Social

Social groups consist of family, neighborhood, friends, and society. This factor has a considerable influence in shaping consumer behavior because a person is raised in what kind of environment. This affects the way they consume a product.

For example, someone who grew up in a family that is conscientious in terms of finances will tend to prioritize priorities so that they can reduce expenses that are deemed less necessary. Meanwhile, someone who grew up in an environment that likes culinary, tends to enjoy a variety of culinary delights to satisfy his curiosity.

3. Private

Consumer behavior can be determined from the person’s personality. For example, the factors of age, psychology, health, personality, lifestyle, economic conditions, position, and self-concept of the consumer.

The psychological stages of a person in consuming a product may be influenced by the maturity of one’s thinking and maturity, the position indicates the level of well-being and a person’s lifestyle, health affects what one can and cannot eat or drink.

4. Psychology

This factor is influenced by one’s desire to be recognized, considered to exist, and accepted by the environment. Some psychological things that influence consumer behavior are motivation, self-confidence, self-esteem, learning processes, and others.

Consumer Behavior Model

To explain the theory of consumer behavior, a model of consumer behavior is needed so that the theory can be understood thoroughly. Usually consumer behavior models are used to simplify the description of consumer activities. At least the consumer behavior model should have the following functions:

  1. Descriptive, describes the steps that consumers go through to make a purchase decision.
  2. Prediction, able to predict consumer activities in the future related to buying and selling activities.
  3. Explanation, explaining the reasons consumers buy the product.
  4. Control, directing the activities of consumers in the future in order to make a purchase.

The following is an explanation of several models of consumer behavior:

1. Plavovian Model

The Plavovian model, which was initiated by Ivan Plavov, consists of three indicators, namely drives, drives, and reinforcement. Drive is a stimulant that is expected to provoke an effect. Drives are psychological needs such as pain, pleasure, happiness, sadness. While reinforcement is an impulse that arises as a result of a psychological need that has previously been raised by the stimulus.

2. Input, Process, Output Model

This model also consists of three indicators, namely input, process, and output. What is meant by input is the marketing strategy carried out by the company. This strategy includes four points, namely product, price, place, and promotion. While the process relates to how a consumer processes transactions. And the last output is the response given by consumers to the product.

3. Sociological Model

This model is somewhat different from the two previous models. This model tries to link between consumer behavior and environment. The environment is divided into primary and secondary society.

People like friends and family are people who are in the primary society. While close people who have similarities in personality are secondary society. This model emphasizes more on the lifestyle that is run by consumers.

Applications of Consumer Behavior in Business

The ultimate goal of the formulation of the theory of consumer behavior is that it can be applied in business. The application of this theory will be realized in a marketing strategy so that the product launched can be accepted by the market. All these consumer behaviors are studied so that producers or product marketing parties can invite consumers to buy goods and/or services with certain approaches.

Consumers have diverse characters and that makes them have different values and characters. Understanding the consumer’s character can be done with a neat concept. Some things that can be applied from the theory of consumer behavior in business activities are as follows:

1. Designing a good marketing strategy

At this point, will understand that a good marketing strategy adapts to the behavior of consumers who will be used as a market. Thus, the marketing carried out is able to get maximum results.

Consumer behavior theory allows companies to identify the right consumers for their products. Starting from demographic grouping, socio-economic conditions, where they gather, their hobbies, circle of friends, when is the right time to hold a discount, and so on.

From this data, companies will be able to see a map of consumer behavior that is suitable for their products so that marketing is not misdirected. For example, the current sweet drink product, of course, is not appropriate if it is offered to diabetics or people who are elderly. Or baby clothes, of course it’s not appropriate to offer it to teenagers or young adults.

2. To know consumer needs

By carefully identifying consumer behavior, companies don’t just know who is a good fit for their market. Even companies can create new markets and new products.

The consumer behavior that has been mapped is very possible for the company to find out what is the problem in society. By knowing the problem, the company innovates and creates new products. If the product is in accordance with the needs of the community, it is not impossible that the new product will explode in the market.

3. To assist in loading public policy

The easiest example is that people need a mode of transportation ahead of Eid al-Fitr. The reason was that at that time, the majority of Indonesians carried out the homecoming tradition and of course required modes of transportation, either land, sea, and air.

When people start going home, when do people start to return, how many transportation fleets are needed for certain routes, even how to get these services, are needed by many people. Therefore, understanding the theory of consumer behavior is absolutely necessary.

4. Setting up consumer protection

the guarantee of consumer protection certainly provides peace and comfort for consumers to consume goods and/or services. Understanding consumer behavior helps companies or policy makers to prepare what protections are provided to consumers. Thus, economic activities can run in a healthy manner.

Purchasing Decision Making Process

By understanding consumer behavior, we can understand how consumers think. Not only that, we can also find out the values, preferences, and needs of consumers by understanding consumer behavior. However, purchasing decisions by consumers do not just come. The decision requires a process.

Below are the stages that describe the decision-making process by consumers.

1. Problem introduction

Basically, consumers will only buy products that provide benefits in their lives. These benefits can be known by recognizing the problems they face. Without realizing that they are “problematic”, consumers will not make a purchase.

2. Information search

After realizing that there are “problems to be solved” in their lives, consumers are motivated to find solutions. Consumers are actively looking for information that can help them to get out of the problem. This information can be obtained from memory (internal) and the experience of others (external).

3. Evaluating alternatives

During the search for information, consumers can get a variety of information. Not infrequently the information obtained contradicts each other. Therefore, consumers need to evaluate the various alternatives. Thus, consumers can choose the best alternative according to their needs.

4. Decided to buy

After evaluating, consumers will decide to buy the product they need. The time it takes for consumers to determine the purchase until they actually make a transaction is sometimes difficult to predict because it is based on various considerations.

5. Evaluation after purchase

After making a purchase, consumers will evaluate whether the product purchased can provide the benefits as expected or not. The level of satisfaction is the main factor in this session. If in the evaluation the consumer gets satisfaction, then the possibility that consumers will make repeat orders is greater. Not only that, satisfied consumers tend to invite others to buy similar products. However, if the evaluation shows a negative result, the consumer will feel disappointed.

Approach in Researching Consumer Behavior

Jerry Olson and Paul Peter in Consumer Behavior & Marketing Strategy stated that there are three approaches that can be taken in researching consumer behavior. Below we will briefly discuss these approaches.

1. Interpretive Approach

This approach is carried out by exploring in depth the consumption behavior shown by consumers and what is underlying it. In general, this approach is carried out with in-depth discussions through lengthy interviews, even if necessary, by holding focus group discussions.

All that is done to understand what the meaning for the product that has been used by consumers. Not only that, this approach can indicate how consumers feel when using the product.

2. Traditional Approach

This approach is carried out using the basics of cognitive, social, and behavioral psychology and sociology. This approach is carried out with the aim of developing theories and methods to explain consumer behavior and the basis for making decisions. The traditional approach is carried out by conducting experiments and surveys.

3. Marketing Science Approach

knows the hierarchy of needs theory proposed by Abraham Maslow? Yes, a theory that explains that some needs should take precedence over others. This approach is done by testing Maslow’s theory to get a prediction of the effect of marketing strategy.

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