How to Analyse Consumer Behaviour

Android or iOS, online or traditional shopping, luxury or necessity commodities? Every consumer has different opinions on purchasing products.

So, how do consumers make these decisions, and what is the reasoning behind them? Read on to find out!

What is Consumer Behaviour?

Consumer behaviour refers to the study of how individuals, groups or organisations select, purchase and use products or services to satisfy their needs and desires. It encompasses the psychological, social and emotional factors influencing buying behaviour, helping businesses understand what drives customers' decisions. By analysing customer buying behaviour, companies can tailor their marketing strategies, improve product offerings and enhance customer satisfaction. Understanding consumer behaviour is essential for businesses to predict trends, meet customer expectations and ultimately drive sales growth. This knowledge allows organisations to create more effective marketing campaigns and foster stronger customer relationships.

What is Consumer Behaviour Analysis?

Before diving into the deep end of consumer behaviour analysis, it is important to understand its meaning. Consumer behaviour analysis is the study of how people make purchase decisions regarding a product, service or organisation. Studying consumer behaviour would allow you to answer several questions, such as:

• How consumers feel about alternatives to their preferred brands;
• How consumers choose between the alternatives;
• How consumers behave while shopping;
• How their surrounding environment sways consumer behaviour;
• How marketing campaigns can be improved to more effectively influence customer behaviour.

Factors that Affect Consumer Behaviour

Several key factors influence consumer behaviour, shaping how and why individuals make purchasing decisions. These factors can be broadly categorised into psychological, personal and social influences, each playing a distinct role in determining consumer buying patterns.

• Psychological: This is considered the most important factor affecting consumer behaviour. Traits like perception, motivation, personality, beliefs and attitude are important in deciding why a consumer would buy a product.

• Personal: These characteristics apply to individuals and may not relate to other people in a group. These factors can include age, occupation, financial situation and lifestyle.

• Social: Social characteristics play an important role in consumer behaviour, including family, communities and social interaction. These factors take time to assess while preparing marketing plans.

• Geographical: Consumers' locations also affect how they purchase products. For example, a person living in warmer weather is less likely to purchase winter clothing than someone living in temperate climates.

Importance of Consumer Behaviour Analysis

Consumer behaviour analysis is crucial for businesses aiming to understand and anticipate customer needs. By examining customer behaviour, companies can gain valuable insights into the motivations, preferences and decision-making processes that drive purchases. This deep understanding of consumer psychology allows businesses to tailor their products, services and marketing strategies to better align with customer demands. Through detailed analysis in marketing, companies can identify patterns and trends that inform product development, pricing strategies and promotional efforts.

Additionally, customer behaviour analysis plays a vital role in enhancing customer satisfaction and loyalty. Businesses can build stronger connections with their customers by offering personalised experiences that resonate with individual preferences. This approach not only improves marketing effectiveness but also contributes to long-term business success by driving more informed, data-driven decisions that foster lasting customer relationships.

Types of Consumer Behaviour

Understanding the different types of consumer behaviour is essential for effective marketing analysis. Consumer buying behaviour varies depending on factors such as the level of involvement in the purchase decision, the perceived differences between brands and the significance of the purchase to the consumer.

• Complex Buying Behaviour: This occurs when consumers are highly involved in a purchase and perceive significant differences among brands. It often involves extensive research and decision-making, particularly for expensive or infrequently purchased items.

• Dissonance-Reducing Buying Behaviour: Consumers are highly involved in this type of behaviour but see little difference between brands. After purchasing, they may seek reassurance to avoid post-purchase dissonance, especially for products with similar options.

• Habitual Buying Behaviour: This occurs when consumers have low involvement in the purchase and perceive minimal differences between brands. Purchases are made out of habit rather than brand loyalty or extensive evaluation.

• Variety-Seeking Buying Behaviour: Here, consumers show low involvement but perceive significant differences between brands. They may switch brands frequently, often for the sake of variety rather than dissatisfaction.

By conducting thorough consumer behaviour analysis, businesses can tailor their strategies to match these behavioural patterns, improving their ability to meet consumer needs and drive successful marketing campaigns.

Analysing Consumer Behaviour

Analysing consumer behaviour can be a difficult task at times, but it can get easier if you answer the following questions:

• Who purchases your products and services? It would help if you first conducted market research to understand who your target audience is.

• Who makes the decision to purchase your products and services? You should ascertain who is actually making the decisions to purchase your products or services. For example, an organisation may purchase furniture for its office, but the hired interior designer could have made the decision to purchase that particular furniture.

• Who influences the decision to purchase the products? Children are a great example of influencers. Parents may buy a particular toy or game, but the influencers behind these purchases are usually the children. Hence, you might have noticed toy companies advertising their products on cartoon channels.

• How is the purchase decision made? Using the above example of the toy purchase, children go to their parents and ask for the toy. Thus, in this scenario, the influencer sways the decision-maker to purchase a product. It is important that marketers are aware of this process.

• Why does the consumer buy a product? You should attempt to understand the reasoning behind the consumer’s purchase, which will vary from one person to another. For example, parents can purchase toys as gifts for their children, and an organisation can buy furniture for its office to make it more modern and comfortable.

• Why does a consumer prefer one brand over another? Many factors can influence a consumer's preference for one brand over another. These factors can include quality, quantity, cost and the product's branding.

• Where do customers purchase the product? In today’s time, consumers can purchase products either online or from shops. The way they shop provides an insight into their purchasing behaviour.

• When do consumers buy a product? There are several occasions in which a consumer might want to purchase a product or service. For example, parents may purchase a toy for their child’s birthday, and an organisation can buy new furniture when it relocates to new premises.

• What is the consumer’s opinion about the product? Do consumers view the product as expensive, valuable for money or cheap? What do they think of the product’s quality? The perception of a product plays a big role in generating positive word-of-mouth reviews.

• What is the role of consumers’ lifestyles in their buying behaviour? People who are fond of adventure would buy hiking shoes or travelling backpacks. On the other hand, people who enjoy reading would buy books or electronic devices for reading. 

Benefits of Studying Consumer Behaviour

Consumer behaviour has a significant bearing on decisions related to public relations and marketing; and studying it provides you with vital information regarding the thought process of consumers. It can also help you understand several factors:

• Attitudes: Consumer attitudes often affect their beliefs regarding specific products. Understanding customer attitudes using consumer behaviour models helps marketers tune their campaigns to strike a chord with the consumers, resulting in a greater market reach.

• Cultures: Constantly evolving cultures impact the designing of marketing campaigns. Studying consumer psychology can help you understand cultural nuances and determine the target market for your product.

• Perceptions: Studying consumer perceptions about your brand might help you uncover negative opinions, which you can work on to improve your offering.

• Lifestyle: Comprehending consumer lifestyles would allow you to tune your products to meet their specific requirements.

If you are interested in learning more about consumer behaviour analysis, consumer marketing, consumer behaviour theory and marketing psychology, London School of Business and Finance (LSBF) offers a continuing professional development course in Consumer Behaviour Analysis and an Master of Science (MSc) Strategic Marketing.

This article was written by Varun Mehta and edited by Luna Campos.