It might be hard to believe for some, but the cup noodles you always end up buying, the extra books that you haven’t read yet, or the chocolates that you throw in your cart moments before checking out, all tell a story – the story of your customer behavior.
Consumer behavior is such an important aspect of marketing that companies have started making dedicated teams to analyze it for their business. Customer behavior, aka buyer behavior, refers to the buying habits of an individual based on the influences from their personal belief, place in society, and their thought process while making a purchase.
Let’s dig deeper into what consumer behavior is and some of the consumer behavior models.
What is Consumer Behavior?
Marketing is not just about creating catchy phrases anymore. Today’s world demands businesses to be more analytical and thoughtful about the decisions they make. And important that these businesses are giving to consumer behavior as a result of that thoughtful process.
Simply put, consumer behavior is a study of how people make decisions about what they have to buy, need to buy, and should buy in regards to the products and services offered by the company. Understanding customer behavior allows businesses to predict how their target audience will respond to a new product or service. Not only this, it even helps them in identifying the demands and opportunities that are not met yet.
Consumer behavior is always part of one of the 5 Ps of your marketing mix, i.e, People. Out of all the P’s of marketing (People, Product, Place, Price, and Promotion), people are always taken for granted. It is essential for business to understand that every customer’s thought process and attitude towards buying any product or service is unique. And if the company fails to address the uniqueness of their target group, then the chances of product failure increases.
5 Consumer Behavior Models
After various researches and studies, few models are developed that further explain why consumers make the decisions they make, and how they affect businesses. Here we are going to discuss five customer behavior models, and how they can be used to make customer centric experiences. These models are divided into two categories – traditional and contemporary.
Traditional Behavior Models
The desire to understand the economic systems made economists develop some traditional consumer behavior models. Economists believe that through economics it can be easily understood how limited resources are allocated among unlimited wants, needs, and demands. The following traditional behavior models focus on the purchasing behavior based on the emotions of the buyer.
No matter who the customer is, all of them have elementary needs such as clothes, food, shelter, etc. and according to the learning model, the consumer behavior responds to the desire to fulfill these needs. Whether customers will buy a particular product or not is determined by whether they need that product or not. To an extent, this model is influenced by Abraham Maslow’s Hierarchy of Needs.
This hierarchy by Maslow shows that humans should satisfy low-level deficit needs (bottom of the hierarchy, i.e., basic needs) before progressing on to meet higher level growth needs. As we move upward in the hierarchy, we get a feeling of self-fulfillment.
In simple terms, the learning model says that no customer would move on to meet the learned needs if they have not satisfied their basic needs yet. For example, if you are a customer who is very hungry, your goal will always be to grab some food before a learned need to get some trendy accessories.
Learning model can be applied in any business, but it’s most effective in online businesses. Online businesses can easily develop AI to recommend the right product at the right time, customers would be more likely to buy it. Moreover, online stores can also use SEO report software to see its impact on the customer experience, after all, customer experience and behavior are interrelated. Though there are many tools available in the market for this purpose, most of them are complicated to use. However, businesses can use Whatagraph to create visual SEO reports easily.
Sigmund Freud is the father of Psychoanalysis, and when something comes from, one should take it seriously. Freud’s psychoanalytical model is based on the fact that consumer behavior is affected by both the conscious and unconscious mind.
This theory explains three major concepts- ID, ego, and superego. ID here can be understood as the submarine of an iceberg, as it is the unconscious mind of an individual to ignore stress and look for happiness and pleasure. Ego, on the other hand, is part of the conscious mind that is operating the reality principle. And lastly, the superego is the ethical and moral part of the human mind that limits the desires of ID. In the psychoanalytical model, because the subconscious mind is also at work, sometimes even customers don’t know why a particular product pleases them.
In terms of application, this model is a little unique from others. It is most effective for the businesses that are out there selling a certain image of society. For example, let’s say your product is spectacles. Now, we know that because of the environment it is mostly used in, glasses are a symbol of intelligence. So you can ask your advertising team to use pictures of people wearing glasses in an educational or office setting. This way, you’ll be able to appeal to the desires of the customers.
According to this model, every buyer is part of an institution or community called society, which plays an important role in the development path of an individual. Customers have to play various formal and informal roles in their life like as a family member, as an employee of a firm, as a member of a professional forum, and as an active member of an informal cultural organization. All the interactions that happen in all these roles influence the buying behavior of the customer.
Each individual customer is recognized depending on their occupation, income, place of residence, etc. These factors put them in a bracket of social class. Members of different classes enjoy certain status and prestige. Moreover, these classes have set their standard of living, as a result of which customers find an urge to fit in. So, it eventually affects the buying behavior of the customers as they are going to purchase the things that make them look like a part of that specific class.
Contemporary Behavior Models
Unlike traditional models, contemporary models focus on deliberate and rational decision-making rather than emotions and unconscious desires. Let’s look at three of the contemporary behavior models.
Hawkins Stern Impulse Buying
The impulse buying theory, like the learning model, claims that it’s not necessary that there are rational thoughts involved in the purchase of a product. Talking about impulse buying, the first thing that comes to mind of many is picking candy bars moments before billing or adding an additional product to the cart before checking out on the eCommerce website. This certainly is an impulse purchase. Hawking Stern, however, categorizes impulse buying into four different types.
Escape Purchase: It’s also called pure impulse purchase. Here consumers purchase the items that are not even on their list. Appealing visuals make them buy extra products.
Reminder Purchase: Consumers never plan to buy these products, but they do so once they are reminded that this product exists. E.g., strategically placed ice cream scoop in the store’s transparent refrigerator.
Suggested Purchase: These purchases occur when a consumer is made aware of a product after a recommendation or suggestion from online algorithms or an in-store salesperson.
Planned Purchase: Though these are the opposite of impulse purchases as customers know that they have to buy a particular product. But, they don’t do so unless they find offers on that product.
Engel-Kollat-Blackwell (EKB) Model
The main reason behind the construction of this model was to solve problems related to the understanding of consumer behavior. It mainly considers two factors to come to a conclusion about consumer behavior, i.e., information collected from the market and facts about the customers. This model outlines a five-stage decision-making process before consumers make a purchase. They are awareness, information processing, evaluation, purchasing decision, and outcome analysis. This model is most effective for businesses that have a lot of competitors with similar products/services.
Challenges With Consumer Behavior Modeling
For all the benefits it can provide, there’s just one challenging part- it is not easy to build customer behavior models, and it’s quite expensive too. One of the major reasons behind this is customer analytics experts, as there are not many people who can do the job for you because there are so many complex and risky mathematical formulas involved.
Moreover, even if you have somehow managed to build a customer behavior model, it is still not easy to manipulate it for the purposes of a marketer. And their purpose is to determine what are the best possible actions they can take for each group of customers. Nevertheless, if developed correctly, customer behavior models can make targeting customers quite easy.
Consumer behavior is the response of the customer towards a particular product. It might be a single person who decides the response, or a group of individuals, or even society for that matter. The buying behavior does not necessarily depend on the needs of the customers. It is an important aspect of marketing, and these models are quite evident for that. We hope that now you understand what the consumer behavior model is, and how it affects marketing decisions.