Bennett (1989 pg. 40) defines consumer behaviour as the “dynamic interaction of affect and cognition, behaviour, and environmental events by which human beings conduct the exchange aspects of their lives”. Evans and Richardson (2007) propose that consumer behaviour is composed mainly of 3 main activities that include obtaining, consuming and disposing. Obtaining referring to all activities encompassing the purchase of the product; Consuming being the circumstances under which the products or services are used; while disposing basically refers to how consumers get rid of products and packaging. The study of consumer behaviour therefore concerns itself with understanding consumer activities (Assael, 2004).
This essay focuses on the understanding of consumer behaviour and how it can lead to the success of any business. It talks about whom consumers are and the vital role they play in the market as a whole and the society. It then moves on to the review of the main argument with the aid of literature work. It also talks about some limitations and the guides for a business on its social responsibility decision. This topic is very relevant in developing marketing strategies and in business generally, because the growth of any business depends largely on its relationship with its consumers. This relationship can only be built when the firm puts into consideration; consumer perception, consumer behaviour, consumer psychology, consumer acceptance, consumer motivation, consumer satisfaction, influence of business on consumer and of course, feedback from consumers. For a successful business to run, it is expected that businesses should be tailored to fit consumers. How well consumers are fitted in business strategy determines the success or failure of the business (Peter and Olson, 2005).
2Decision aid on marketing strategiesBefore we look at the success of any business, it is important to talk about the behaviour of consumers because they inform business success. Inevitably, the end-users or consumers that utilise the product or service influence a business’s success (Assael, 2004). The business must put this into consideration for the entire logistics period. The process goes from the manufacturer to the consumer. Comprehending end-user behaviour enables a business to locate any faults, as well as positives in their structure. This helps marketers to make important decisions regarding the structure of future approaches. Understanding consumer behaviours helps to develop a brand or to create a new product. These behaviours have effects upon the entire social network. It also equips the country with a good or bad image, and aids the organization of events and is related to cultural attribute. Investigating and understanding consumer behaviour allows marketers to locate and identify any fundamental needs of marketing and its structure.
The force that determines what consumers buy, and why they buy it, is determined by two basic functions that lead to decision making: needs of the consumer and to improve their perspective status (Peter and Olson, 2005). For example, a family of five is desperate to find a house that fits their already budget, or someone buys a new car in order to fit in with the typical vehicle driven by others in his or her neighbourhood or by his or her colleagues. This understanding of the reason that drive consumers choice helps in reaching and identifying of your market target because consumers are driven to make purchases based on need and want. Therefore, the approach you take with your marketing should be less about what you are selling and more about what the product or services will do to meet the needs and wants of your target market. When you are trying to reach your target market, spending a great deal of time thinking about the benefits of a product or service without understanding the purpose behind your customer’s desire to make a purchase can cost you a sale.
To be successful in business, it is essential that you stop being a sales person and start being a relationship builder. Listen to your consumers, understand the needs and wants of your target market and identify the ways in which your products and services can help them fulfil those needs and wants. By shifting your approach from high pressure sales tactics to relationship building and understanding, you will not simply make a sales but gain a loyal and committed client who will return to you time and time again for additional products and services, knowing that you are willing to take the time to listen to what they need and want. Sinha (2008) made this contribution.
The above chart shows the relationships between the consumer and the functioning system of the market and how they depend on the consumer and the feedback from the consumer.
3The Impact of Customer Understanding on Business SuccessHaving acknowledged the need for businesses to understand their consumers, let us now examine the benefits of taking this fact into consideration.
Studies have revealed that the majority of arguments on this literature about the understanding of consumers have, over time, to a very large extent proven successful. According to Peter and Olson (2007), understanding of consumer behaviour is important and influences decision making and the dynamics that surround their purchases. Consumers engage in a five step process: problem recognition, information research, and evaluation of alternatives, final purchase decision and post-purchase behaviour. This study was carried out based on repeated purchase by the consumer or from past experiences. However, Rice (2010) also added that this understanding of how these influences impact consumer behaviour is what determines the success of a business. Companies that have used both consumer research and analytics and quickly react to them are successful. Meanwhile, Williams (2008) said that: “Health claims for foods are permitted in most countries, but there are few Studies which show their effect on consumer behaviour and health. Countries have significant differences but, in general, consumers see health claims as useful.” Consumers consider food to be healthy as long as it bears a “health claim” which discourages the consumer from looking at additional nutritional details. This knowledge and understanding of the consumer has made impact in many household around the world, because a consumer purchase is a response to a problem, which they encounter virtually every day of their lives.
The table above shows an illustration of wealthy consumers household and their estimate in the years to come in different countries and how understanding these consumers can influence their purchase power.But the physiological needs are another aspect to be considered. Blackwell, Miniard and Engel (2006) pointed out that, the physiological needs involve more than what we eat and drink. They involve every other aspect of our lives like the mattresses, pillows, sheets we sleep on. Most companies, producers, manufacturer and business owners have used this means of understanding the physiological needs of consumers into turning them from consumers to costumers. He realise that he has to make a purchase and he goes through a series of step in order to make it.
Furthermore, Blackwell, Miniard and Engel (2006) demonstrated that the motivation of consumers is also a factor that has led to business success, in the sense that the more motivation consumers get to fulfil their requirements then they feel more engaged with possible forms of “need satisfaction.” They will be involved with goods seen to be more satisfying than those who are not so motivated. The sense of involvement and motivation intensity is considered to be significant because they influence quantities of effort that the consumers put on as they look to satisfy their needs. This makes them very attentive to relevant information. Since human beings are complex and have numerous needs it is also important to understand the reason behind every consumer’s action and how to motivate them because consumers may not feel comfortable revealing what makes them tick to others.
For instance, Sinha (2008) made it clear that consumer’s attitudes are what influence their attitudes towards purchasing a product. With the understanding of the consumer decision and their usage, firm decides what to produce or whether to discontinue with the production of a particular product based on this understanding, because the consumer behaviour correlates to patterns of the country’s economic growth. Above all, understanding consumers has, to a large extent, informed growth and business success.
4CUSTOMER UNDERSTANDING CASE STUDY: MTN NIGERIA
MTN is a South African multi-national telecommunications network that came into Nigeria at a time when there was no GSM service operator in Nigeria at all. Significantly over the years, it has proven that it understands the Nigerian consumer behavior and has taken advantage of that fact.
The Need… As at May (2001), there was a national yearning by Nigerians for telecommunication via mobile phones. At the wake of democracy in Nigeria, the need for more lucid, secure and advanced communication became more pressing and this led to the government’s decision to conduct a globally lauded GSM auction conducted by the NCC Nigerian Communication Commission with MTN emerging as the only approved Telecoms Company. The company took advantage of the urgency in the need expressed by the Nigerian government.
Understanding the Nigerian People – its consumers
MTN Nigeria became a household name in Nigeria because it succeeded in building the brand in relevant Nigerian cities at first. Identifying Lagos as one of the most populous cities in Nigeria, it launched its services in Lagos in spite Abuja being capital. One unique fact about Lagos is the fact that every family in Nigeria has at least one person resident in Lagos. Technically, when the person of Lagos acquires an MTN SIM card, he automatically awaits MTN to launch service in the city where his family resides. With this understanding, MTN has consumers waiting for them to simply launch. Suffice to say that the service was new and well rendered; the prices were way-beyond the capabilities of an average income earner. It was strictly for the high-classed who could afford a sim for themselves and for family members. MTN made huge profit more than they have ever made anywhere in the world. In a typical Nigerian setting, people appreciate showing off. It therefore became a show of class to have a mobile phone with an MTN SIM in it. While the affluent showed off, the poor strived to own one, MTN market on the rise.
5MTN AND SOCIAL RESPONSIBILTYMTN has also proven beyond reasonable doubt that, they understand the lifestyle of its consumers. Hence, they have indulged comprehensively in social responsibility, which has further endeared it to the hearts of the consumers and command more loyalty from the subscribers.
According to Khanyi (2008), “in February 2008, in a bid to empower Nigerians, MTN South Africa lessened its involvement in MTN Nigeria to 76.08%.” Nigerian people and influential institutions gained a 9.45% interest in MTN Nigeria from MTN. The company said that it had sold 5.96% in MTN Nigeria because of a US $594.5 million (R4.632-billion) private placement. In another press release (2010), the Corporate Service Executive of MTN Nigeria stated that, “the company has completed arrangements to expend the sum of ?2 Billion on corporate social responsibility before the end of 2010.” MTN has invested fortunes in CSR Corporate Social Responsibility but has plans to expand their resources to accommodate more people.
These evidences prove that the company has knowledge of the consumers and intend to retain them. The company will definitely thrive because it has established a bind between itself and the consumers a bond that appears more than just an advertorial media for their products and services, but in the real sense, the relevance and assurance needed for business and generating profit is being secured.
6LIMITATIONS
The argument above shows how the understanding of consumer behaviour informs business success. However, there are some restrictions which emphasised on some aspects of consumer behaviour that cannot be predicted. Louda and Della Bitta (1993) suggest that there are limitations in using demographic patterns in understanding consumer behavior. Demography records human population statistics, such as their size, age, sex, race, location, occupation and personal income. One restriction of demographics regarding investigating consumer attitudes is that, despite being successful in the past, they are now no longer in use because of the decrease in income, education and occupation status. It is also being observed that demographic elements also include sex, age race and religion; these are less likely to be influenced by environmental change. For example, older people usually do not like rock music, but younger people often do. Nevertheless, there is a further argument against utilizing demographics because they have been seen to be unsuccessful towards explaining and anticipating consumer behaviour. Demographics must have been unable to predict brand–choice attitudes, but have succeeded in explaining buying behavior of items like automobiles and appliances.
Thus, Demographic although must have failed in some area of consumer behavior, but should not be discontinued but instead should be used as a factor with numerous other variables towards understanding and explaining consumer behaviour. Consumers on the other hand, have not helped the situation by supplying the relevant information the producer of a product should have in promoting the brand of the product toward the top in market preference. For instance, when a marketer ask consumers what benefits they want in a body cream, which would be for brighter and clearer skin, to keep the skin smooth, repairs of the skin or for a softer skin, they responded with what they have heard through advertisement. Consumers are not highly self-examining when asked and are not likely to provide the right information the producers or manufacturers need. If benefit information is added on with information about consumer problems, however, new insights may be developed.
A “common denominator” of consumer attitudes focuses upon decision-making-process models. When looking to purchase a product, consumers often decide between a selection of products, then apply various decision criteria. More so, a good understanding of consumer’s lifestyle can lead to business success. Consumer’s life styles usually depend on: income, marital status, culture, social group and buying power. A modification in one of these factors will affect the consumer’s attitude. However, Hoyer and Maclnnies (2003) stated that there is deviant behaviour exhibited by consumers. It sometimes starts during the purchase of a product and before consumers get to use it. This could be in the form of compulsive buying, consumer theft and black markets. Therefore, this research is of great significance and importance for marketers, producers, manufacturers and owners of businesses and should make this a priority in achieving business success.
7CONCLUSIONThis essay has offered several potential contributions from previous works, reviewed the main arguments, stated some lapses and other alternative arguments, made suggestions and stated the benefit on how the understanding of consumers informs business success. It has concluded that the evidence given is clearly for the support of the topic reviewed. It is therefore, absolutely important that businesses should be designed to meet with the needs and maybe wants of its consumers. There must be a specific description of consumer attitudes towards their products and services.
The subscriber’s choice to purchase the product is reflected in the relevance the products have on them. A business then selects the product to produce depending on the decision and usage. The positioning of the product is dependent on the consumption of the product. The benefits from such an approach lie in the ability to assist researchers and their comprehension of how consumers perceive their business. According to Blackwell, Miniard and Engel (2006) “It was found out in the study that the purchases made by consumers are mainly to satiate their demands and to solve the underlying problem. If a consumer purchases a product in order to fulfil his basic need, it can be said that the purchase was necessity-driven and it can be analyzed from this aspect as to what motivates or drives a consumer to purchase a product. If a consumer does an impulse purchase, he does it without any preconceived notion or well-thought over buying of a product.
The product in this case seems to be so attractive or beneficial to a consumer that he immediately buys the product. So, this makes us understand that a product should have certain unique attributes to lure the consumer. In some of the product categories, there are a number of options to choose from and it becomes difficult for the customer to reach a certain decision. Also it is difficult for the seller to sell his product as he needs to convince a lot of consumers by paying thrust on his product as against his competitors”. Comprehending consumer behaviour aids the location of faults in a business, as well as any positives. To a very large extent therefore, a business’s success is dependant upon a detailed study of significant reactions and perceptions of the consumers in a business.
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