What, in terms of marketing, is the importance of consumer behavior for a business firm?
If a firm wants to sell its products (and of course they do), understanding the behavior of their potential consumers is absolutely vital. The company must understand the behavior of the consumers so as to know how to market their product.
Consumer behavior refers to the ways in which consumers decide what they will or will not buy. Companies need to know this because knowing how customers decide allows companies to market their products in ways that will appeal to consumers. For example, if you find out that customers decide what to buy in a store based on what they see first, you would want to market your product by placing it in a display that would be seen when customers enter the store or when they enter a certain department of the store.
The purpose and function of marketing centered completely around its customers. Marketing is concerned with various aspects of customers like what are the types of goods and services they need and would want to buy, how to communicate effectively to them the availability and value of goods and services offered by a business, and how to motivate them to actually buy and use these products and services. Performance of all these functions and tasks requires knowledge of the consumer behavior. Consumer behavior deals with specifically such aspects of behavior of people. The effectiveness of any marketing efforts is, therefore, closely related to the extent to which such actions are based on correct and detailed understanding of the consumer behavior.