Why is consumer behavior important for a business firm?

Expert Answers
laurniko eNotes educator| Certified Educator

Consumer behavior is important for businesses because it helps them anticipate what customers want, learn how to attract customers, and understand how to best present their products and services.

When a business understands how customers choose a product or what influences them to select one option over another, they have the advantage of being able to present themselves appropriately. It's all about selling to market and being able to target the segment of a population that will be interested in what a business has to offer.

Consumer behavior also helps businesses understand exactly what information their customers have -- and where there are gaps in their understanding of products, features, or services. For example, a software company might be targeting either web designers or users with virtually no computer experience. The resulting advertisements, manuals, and sales tactics will be more effective if the marketers understand the behavior of the clients. 

To understand consumer behavior, a business can use market research or read secondary research that's already been performed. Surveys, focus groups, and observation of customer behavior are all powerful tools that can help a business better understand its customer base. 

Customers are a major factor that decides whether a business succeeds or fails. Being able to connect with them is absolutely essential. Understanding consumer behavior -- essentially the psychology of marketing -- is one way for a business to anticipate and meet the needs of its current and future customers. 

pohnpei397 eNotes educator| Certified Educator

Consumer behavior is extremely important to businesses because consumers are the lifeblood of any business.

The study of consumer behavior is interested in every aspect of consumers' interaction with a product.  It wants to know who buys a product, why they buy it, how often they would buy it and how they use it.  Firms need to know these kinds of things so that they can better understand how to make their products attractive and useful to consumers.  By doing so, the firms can improve their chances of surviving and prospering.

Since businesses cannot live without consumers, it is vital that they understand how consumers behave with regard to the product(s) the firms are selling.

jesseldridge | Student

As we know that the business whatever kind of it revolves around the consumer. So while operating as a business firm, it is important for the firm to get a better understanding of its target market. It means that as a business firm, you should have to understand the needs and wants of your customers. So you can successfully fulfill their demands and requirements and thus it can be beneficial to achieve your organizational objectives.

udayanga | Student

Consumer behaviour means the how ,when,why,where consumers buy goods and services n the market place.Simply it refers the way consumers behave in the market.following importances are there in the study of consumer behaviour.

  • Current and future expectations of consumers can be known
  • The preference to thier own products can be known.
  • Their behaviour can express critics on our products
  • Consumer behaviour can help to marketing planning process.
  • It can help to future business planning