CuriousOwl

The consumer decision-making process involves thinking, feeling, and acting in response to various internal and external cues that can create an impression or opinion about a brand or product. What is consumer behaviour? Consumer behaviour refers to the consumers’ actions and how they respond to marketing stimuli, such as television commercials, billboards, and packaging. Consumer behaviour has been defined in many ways because it depends on factors such as environment, demography, culture, and heredity and varies from country to country. Consumer knowledge also varies between consumers. For example, parents’ understanding of their child’s purchase decision may not be the same as their child’s knowledge of their parent’s purchase decision.

Let us understand why marketing managers must understand consumer behaviour to ensure their marketing campaigns have the desired effects.

What is Consumer Knowledge? 

Building consumer knowledge in consumer behaviour is essential to winning customers and succeeding in the market. Every consumer is different, so understanding their buying behaviour is vital. So consumer knowledge or the analysis of consumer behaviour helps understand certain critical factors about consumer behaviour like:

• The perception of the consumers about different products and brands
• The factors that influence consumers to choose between other options
• The influence of media and the internet on consumers’ behaviour
• The effect of the consumers’ social structure on their choices
• Identification of products required by the consumers

Why is Consumer Knowledge Important, and How Does It Help Marketers?

Understanding consumer knowledge is critical for any business because of multiple reasons. The most important aspects of which are:

• Strategising marketing approach to maximise the impact of the company on the consumers
• Maximising conversion of pitches to purchases
• Enhancing customer experience

Consumer knowledge is categorised into two types: 

• Product familiarity: It tells consumers about the existence of a product in the market. Additionally, it is the consumer’s experience with the product. 
• Product knowledge: It is knowledge provided to make the consumer aware of the characteristics and usage of the product. 

These consumer knowledge dimensions are explored by employing different media sources.

How to Build on the Company’s Consumer knowledge?

The most impactful steps to gaining an insight into a company’s consumer knowledge are as follows:

• Implementing customer relationship management software: CRM software can help understand the needs and buying patterns of the different consumers efficiently. Nykaa is a perfect example of the best utilisation of CRM software and gathering of data about the needs of its different consumers. Nykaa’s marketing strategies are sorted for its various categories of consumers: budget buyers and luxe buyers.
• Observing recent transactions: Consumer attitudes and buying patterns change with time. The drop in sales made Coca-Cola understand that it needed to rejuvenate itself with healthier options since consumers are more health-conscious. Thus began Coca-Cola’s journey of non-carbonated beverages.
• Understanding the potential consumers: Like every business, every consumer it caters to is unique. Understanding key aspects of the target market and the potential consumers, including their buying behaviour and factors influencing their buying patterns, is crucial for the growth of the business.

How to Improve Consumer Knowledge?

• Understanding the Different Categories of Consumer Buying Behaviours – Consumer behaviour is an integral part of consumer knowledge. The different types of consumer buying behaviours are as follows:
  • Complex buying behaviour is observed when consumers purchase expensive and occasionally bought products such as expensive mobile phones, luxury cars, or houses. A lot of thought and research goes into the process before the actual investment happens. Therefore, marketers selling such products must be willing to assist the consumers with all sorts of information about their products.
  • Habitual buying behaviour: These products are characterised by no brand loyalty since consumers have little or no attachment to a brand or category. Consumers do not think much before buying the products. Television and print commercials build a positive consumer attitude toward such products.
  • Dissonance reducing buying behaviour: This is seen when consumers continue buying products they are used to instead of trying newer brands or products because they cannot decide between the different options available or fear regretting the new choice.
  • Variety-seeking behaviour: Consumers often buy different versions of the same product since they want options. Market leaders and challengers alike pursue such buyers through different sets of strategies. Promotions, including discounts and free samples, are often employed to increase sales.

• Understanding the Factors that Affect Consumer Decisions – Consumer knowledge requires research on why consumers opt for some products over others. The primary factors that affect consumer behaviour are: 
  • Cultural factors: Beliefs and traditions play an essential role in consumer decision-making. Dominos fared better than any other pizza brand in India because it catered to the Indian food palette.
  • Social factors: Social factors such as family, reference group, and status impact consumer behaviour strongly. They influence an individual’s buying decisions as factors such as food habits, and dresses are often carried through generations.
  • Personal factors: The buying behaviour of consumers changes with their age, occupation, and economic situation. This behaviour can be classified into five life-cycle stages: the youth segment, getting started segment, builders segment, accumulators segment, and preservers segment.
  • Psychological factors: Consumer decisions are also influenced by different psychological factors, including perception, learning, and attitudes.

• Putting Customers in Different Segmentings – Customer segmentation is crucial since each customer is different. Some consumers are impulsive buyers. Some buy only on special occasions, while others wait for the sale. Many online selling platforms, including Amazon and Flipkart, have sales around the festivals to personalise the customer experience and eventually sell the product. There are six categories of behavioural segmentation.

• Benefits sought 
• The occasion of purchase—universal occasion, recurring-personal occasions, and rare-personal occasion
• Usage rate
• Brand loyalty status
• User status
• Customer journey stage
• Building Knowledge about Buying Patterns – The consumer knowledge about buying patterns, which typically refers to how and why the consumers decide on their purchase, is vital to gain insights and identify techniques to make consumers’ experiences delightful and reap higher sales. These patterns are grouped based on:

• Place of purchase 
• Item purchased
• Time and frequency of purchase 
• Method of purchase

What is The Role of Consumer Knowledge in Purchasing a Product?

Consumer knowledge of consumer behaviour can play a significant role in the purchase of a product in the following ways: 

• Understanding how consumers choose products and services 
• Understanding consumers’ emotions and thought processes behind any decision 
• Understanding the personal and environmental factors affecting buying decisions
• Understanding the motivation for choosing one product over the other
• Conducting market research to understand consumer attitudes and behaviour
• Developing personalised marketing strategies 

Conclusion

Leading companies, including Amazon, Apple, and Netflix, emphasise improving their marketing strategies by understanding consumer knowledge of consumer behaviour. This is one of the reasons Amazon was named the brand loyalty leader in the US for the fifth consecutive year. Consumer behaviour analysis is a crucial tool for understanding the customers. Consumer psychology and the factors influencing consumers’ buying behaviour are vital to creating pleasant consumer experiences and increasing the company’s profits.