Watch this lesson to find out how marketers can use predictions about our behavior to create a strategy that helps them reach out to us and influence our decisions to buy.
Predicting Consumer Behavior
Did you know that marketers are able to predict the future? Well, maybe not really, but by studying our habits as consumers, over time they can begin to predict our behavior and even anticipate things like seemingly random shopping trips induced by late-night cravings for our favorite food.
Once marketers have enough data about our shopping habits and preferences, they can use that information to help them make predictions about our shopping behavior. Then, once they've made predictions about how, when or why we might buy, they take it a step further and attempt to influence our buying behavior through marketing strategy.
For example, have you ever noticed how baking supplies like sugar, flour or butter all seem to go on sale around the holidays? Through many years of research, stores have come to understand that November and December bring the urge to make Grandma's gingerbread or Aunt Mabel's maple-pecan bars. To sweeten the deal, marketers put these items on sale and even distribute coupons to reinforce our decision to buy.
What Is Consumer Behavior?
Before we get into more detail about how consumer behavior can affect marketing strategy, let's step back and define exactly what consumer behavior is. Simply put, consumer behavior is the study of all consumers and the process they go through to satisfy needs.
A few points about this definition: one, consumers can be individuals, groups or even organizations. Two, consumers may be able to satisfy their needs in a number of ways - through the acquisition of goods or services, by discovering ideas or experiences or something else entirely. These all count as consumer behavior. Finally, the process goes beyond just buying something. It involves the search for, acquisition of, use of and disposal of whatever was found to fulfill the need.
For example, let's say after watching Lady and the Tramp late one night, you have a sudden craving for spaghetti. You run to the nearest grocery store that's still open, grab spaghetti noodles and a jar of sauce, along with some ground beef and an onion to doctor it up. When you get home, you snip some basil and oregano from your herb garden and get to work in the kitchen.
This is all consumer behavior, from the movie that triggered your sudden 'need' for spaghetti, to your choice of store, to the idea that you decided to fix up the sauce with other ingredients - even whether or not you decide to recycle the jar your sauce came in. As you can see, consumer behavior is a very involved process including much more than the moment you make a purchase decision.
Marketing Strategy and the Four Ps
Okay, so now that you see what consumer behavior is all about, let's talk about how it impacts marketing strategy. A company's marketing strategy is driven by their ability to fulfill consumer needs. By anticipating and reacting to needs faster and better than competitors, they provide a greater overall value for the consumer.
You may recall that the company's marketing strategy is fulfilled through the four P's: product, price, promotion and place. Once marketers understand their target market's behavior, they can use that knowledge to help them develop a more effective strategy using the four P's. Let's go back to our spaghetti example to see how this works.
You may not have realized, but during the movie, a commercial for your favorite pasta sauce, Luigi's, came on - right after the scene where Lady and the Tramp share their romantic moonlit meal. That commercial counts as part of the promotion 'P' of the marketing mix.
By having Luigi's at your nearest grocery store, place comes into play.
Then, you might have thought it was just a cool idea that Luigi's came out with a basic marinara, made specifically to allow the home chef to incorporate his or her own special ingredients. But no, this is part of the product aspect of the four P's. The Luigi's marketing team was targeting home cooks just like you.
But it doesn't end there; because you are a discerning foodie, you never buy the cheapest sauce because you assume it's of lower quality. Because of this, Luigi's prices their sauce in the mid-range, (above the lowest, but not the most expensive) because after all, you are planning to buy other ingredients to fix up the sauce yourself. See how the four P's helped Luigi's create a marketing strategy that made a purchase of their pasta sauce nearly 'meant to be' for you, their target consumer?
There are other ways the four P's were guided by consumer behavior, too. In the store, you saw a coupon for a dollar off ground beef with purchase of Luigi's - another part of the promotion 'P.' Oh, and that display with a basket of onions next to the meat counter? Another part of the place aspect.
As you can see, once marketers understand how their target consumer behaves, they are able to hone in and create a marketing strategy that seems almost perfectly tailored to the customer.
To review, consumer behavior is a rather extensive concept, including all the parts of the process consumers go through to satisfy their needs, from the product search, to purchase and post-purchase behavior. By studying consumer behavior, marketers are able to align the four Ps of their marketing strategy to their target market's habits, making their efforts much more effective.
After watching this lesson, you should be able:
- Define consumer behavior and how it affects marketing strategy
- Apply the four P's to any purchasing decision made by a consumer