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Examine why understanding consumer behavior is important for an organization.

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lofa | (Level 1) eNoter

Posted August 11, 2013 at 2:14 AM via web

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Examine why understanding consumer behavior is important for an organization.

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Ashley Kannan | Middle School Teacher | (Level 3) Distinguished Educator

Posted August 11, 2013 at 2:27 AM (Answer #1)

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Any organization that is driven by the needs and wants of consumers has to understand consumer behavior.  The billions of consumers worldwide do not say en masse and in unison, "Organization, we want _________."  In many cases, consumers might not even be aware of their motivations or their behaviors. Understanding consumer behavior is essential for the success of any organization.

Organizations must understand consumer behavior in order to generate products that will be embraced and purchased.  For organizations who devote millions in currency to investment in goods and services, knowing about consumer behavior takes a great deal of the guess work out of the equation.  No responsible organization can progress with the idea of "I think that the consumer will like this." Armed with an understanding of consumer behavior, organizations can pinpoint the target audience for their products and services and can be relatively confident that their investment is substantiated by research.  At the same time, understanding consumer behavior can help to chart the future growth and trajectory of organizations.  Organizations are only as good as their potential for future advancement.  No one can read the future.  Yet, understanding consumer behavior can help to develop what products and services can be generated in order to ensure future economic viability.  

I think that understanding consumer behavior is also important for an organization because it studies the basic tenets of the most important element:  The customer.  Consumer behavior decision examines the "processes, especially any particular triggers that compel consumers to buy a certain product."  This is vital for organizations. It provides a window into the reason for an organization's being.  Without understanding consumer behavior, organizations increase the likelihood that they will not be successful.  It is in this light where understanding consumer behavior becomes extremely important for an organization.

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pranav2008 | College Teacher | (Level 1) eNoter

Posted August 13, 2013 at 5:35 AM (Answer #2)

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Consumer Behavior may be understood as the decision process and physical activity individuals engage in evaluating, acquiring, using or dispossing of products. The organizations cannot achieve success in their respective businesses if they fail to meet the requirements of the consumer. People are unique and thier consumtpion habits are unique therefore marketers need to understand the behavior of the consumers in designing and developing right products to the right consumers. The follwowing are the major charactersitics of consumer behavior:

1. Consumer or buyer behavior is the process by which individuals decide what, when, from whom and how much to buy.

2. Consumer behavior studies makes to understand  the physical, psychological and social behavior of consumers.

3. The consumer behavior is highly influenced by psychologicla factors.

4. Marketers cannot change the behavior of the consumers but can manufacture or design products to satisfy the consumers.

5. The consumer behavior behavior changes according to the type of product for example the purchase behavior of consumer towards car highly differs from purchase behavior of cleaning products at home.

Steps in Consumer Decison Making process:

1. Need Recognition

2. Information Search 

3. Evaluation of Alternatives

4. Purcahse Decision

5. Post-Purchase Decision

References

  1. Schiffman & Kanuk, Consumer Behavior, 10th Edition, Prentice Hall, 2010, ISBN: 0135053013.
  2. Loudon, D. L., & Bitta, A. J. (1993). Consumer Behavior: Concepts adn Applications (4 ed.). Singapore: McGraw-Hill Book Co.

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