What is Consumer Behavior?

Consumer behavior is the study of the factors that influence people in the choices they make when purchasing products or services. This analysis lists all procurement, consumption and disposal activities, including the decision process that follows these actions. For many companies this is a way to be followed to maximize their sales and profits, increasing the audience of consumers.

Factors that influence consumer behavior

To target the best strategies, when offering products or services, it is possible to analyze the behavior of potential customers.

The customer’s behavior is characteristic of his decisions when choosing to consume, and this involves all mental and emotional exercises, as well as the experiences and evaluations in what is offered.

To increase the amount of sales, there are factors of analysis that help managers to walk the path towards consumers, creating motivation and even, customer loyalty to products.

Cultural Factor

Culture has a set of values ??that make sense of people’s consumption habits. It contains meanings, rituals, norms and traditions.

They also include the different groups, each with its own values ??and behaviors. This factor helps in the perception of how much the product will be accepted by different cultures, and this factor tends to be the most rigid and to be followed by entrepreneurs.

Social Factor

The study of consumer behavior also involves how customers interact with others. Certain groups have an influence on consumption choices, for example families, friends, among others.

Likewise, social position also becomes a variable to be analyzed and, based on this, the groups that consumers can join are determined, as they choose products that represent their role and status in society.

Personal Factor

Although consumption under influences is a major determinant, personal consumption can take different measures, because even consumers inserted in their cultures or common social groups, can have different lifestyles.

It is important for marketers to note how many customer styles the company can reach. The variables range from occupation, as well as age and economic condition.

Psychological Factor

The psychological factor is who intensifies the need for a consumer to purchase a product. Among its variables we have:

Motivation : the desire that leads to consumption;

Perception : it happens when consumers select their choices by the information received or feeling of need;

Knowledge : selection of what to consume through your acquired experiences;

Beliefs and attitudes : positioning before the available options.

There are several factors that can influence consumers in their choices and the right motivations for what they want to acquire.

Behavior analysis by the entrepreneur or marketers is to observe their customers and measure how much can be achieved.

Business competitiveness

Competitiveness takes place in an environment where two or more companies compete for the best sales volumes, or services, among consumers.

This scenario is known for providing more innovation and growth for the economy, unlike markets where there are few companies, or just one, in the case of a monopoly.

The companies that stand out have the so-called Competitive Advantage, which happens when a company manages to differentiate itself and obtain more demand by consumers.

Competitiveness in the Economy

In Economics, the concept of competitiveness is linked to studies on markets where there are different levels of competition, based on the idea of ??perfect competition, where the market is completely free and competitive.

Perfect or pure competition and monopoly form the two extreme scenarios in which a good or service can exist in the market. Among these, there is also the oligopoly, when few companies offer the same product.

Due to the idea of ??high competitiveness, companies are known as ” price-takers “, that is, they accept the price that the market sells a certain product. Changes in prices can happen due to several factors, among them the increase or decrease in demand.

This concept is what develops the Law of Supply and Demand, where the price is formed when the quantity demanded by consumers and the supply of all producers is formed.

How to improve a company’s competitiveness

However competitive a market may be, there is always the possibility of implementing improvements, aiming at competitive advantage among competitors.

The first factor is differentiation, that is, it is necessary to analyze in which aspects the product may present an advantage for the consumer utility that differs from others.

At this stage, the company must do market research and get to know in depth the work of competitors and understand the competitive forces that make the business stand out. This process is known as “Porter’s 5 Forces”.

Another factor is to improve the capabilities that the product offers through the Value Proposition, in ways that the product can create and deliver value to its users.

The Value Proposition is one of the components of the “Business Model Framework” (Business Model Canvas in English), which can be used to reshape the main characteristics of a business.

In addition to differentiating or adding more value to a product, it is possible to evaluate the possibility of expanding the business through new activities, such as:

  • Launch new products, diversifying the company’s operations in different markets;
  • Adapt the product to the needs of other customer segments;
  • Operate in other locations with existing products, either in other regions or over the internet;
  • Invest in new types of advertising.