How understanding consumer behavior can uplift your sales
Javier Ramirez
Liberty University
BUSI 520: Strategic Marketing Management
Muriel Wilson
January 4, 2022
How understanding consumer behavior can uplift your sales
Every business revolves around consumers, yet many of us overlook the need of
understanding consumer behavior. By observing consumer psychology and the forces
behind customer purchases, companies can develop popular new products, market
more effectively, and eventually increase revenue.
Consumer behavior refers to the factors that influence a person’s buying decisions, such as:
Social trends
Lifestyle
Working patterns
Motivation to buy something
Companies study consumer behavior in order to understand the people who are most likely
to buy from them. They also use it to develop more attractive advertising campaigns
and sales strategies.
If you’re passionate about knowing how consumer behavior works, keep reading to see how
it can uplift your sales.
It’s important to understand the learning model of consumer behavior to get to the root of
why people decide to buy your product. You can use this knowledge to dramatically
increase your product’s impact in the market and meet yMaking decisions based on the
consumer’s behavior will greatly benefit any company that is trying to build a customer
base or retain their consumers. If marketers create campaigns that address their
audience’s underlying concerns and desires, they can surely win over others.
A look into “Maslow’s Hierarchy of Needs” theory
Maslow’s hierarchy of needs is a theory based on human psychology that informs us about
why we do what we do.
The theory says that people try to satisfy their needs in a sequence.
our sales goals. How is this theory used in business practices?
Maslow’s hierarchy of needs is often mentioned in business classes in terms of
organizational behavior and human resources.
Maslow’s hierarchy of needs gives a framework to think about where your products or
services fit into consumers’ lives.
This study increases the overall performance of the business.
The first and foremost priority of a consumer is to fulfill his basic needs which include food,
house, and security. A person will always act accordingly, which is why understanding
consumer behavior matters.
For instance, someone who is in need of food does not look to get a Wi-Fi connection first.
The top 5 factors that influence consumer buying decisions
When you look at this hierarchy in the context of what a consumer needs to thrive and
engage with enthusiasm, some interesting ideas emerge. Let’s review them below.
1. Psychological factors
Let’s delve into the ‘psychological factors’ of consumer behavior below.
Motivation
When someone is motivated enough, it affects their buying behavior. As stated in Maslow’s
hierarchy theory, a person has many needs, such as:
Basic needs
Belonging needs
Security needs
Esteem needs
Self-actualization needs
Of all these needs, basic and security needs take precedence over the others. These often
relate to products or services based around food, clothing and shelter.
The brand, Grofers, is a great example here because they answer a common need for
people looking for grocery items at their doorstep.
One might argue it is easier to motivate consumers to purchase their products because
Grofers fulfills a primary need.
Perception
When a customer sees ads, testimonials, or social media comments about your product or
service, they develop a certain impression of it.
Consumers buy based on their opinion of a particular product or service.
A product can be extremely good, but if the consumer does not think it is necessary — or if
they think it is not for people like them — they will never buy it.
2. Social factors
A customer’s social group influences how they shop and often stem from factors like:
Social class
Education level
Peer groups
Family and friends
We can say that social factors reflect a steady and dynamic influx through which people
learn different meanings of consumption.
Certain products or services will only be considered by the wealthy, for example. They
satisfy needs so high on Maslow’s hierarchy that only they can afford them.
3. Cultural factors
The influence of culture on buying behavior varies from country to country, so retailers need
to be very careful when analyzing the culture of different groups, regions, or even
countries.
Whether it’s family, friends, or the environment, a person’s cultural background plays an
important role in their purchasing behavior.
Each culture contains different subcultures such as:
Religions
Geographic regions
Racial groups and more
Smart business owners segment their customers into several small sections. For example,
retailers can design products that meet the needs of a specific geographic group and
promote it exclusively to that group.
Therefore, you must be aware of the buying public’s culture and how it affects their
behaviors. Knowing this will allow you to tailor your marketing strategy or specific ad
campaign to succeed.
4. Economic factors
Understanding consumer behavior also requires taking economic factors into account.
Sometimes consumer behavior can be shaped by the level of wealth or age of a
particular audience.
For example, young people in India (aged 18 to 25) spend less money than their older
peers.
This could be because they simply haven’t been working as long as older buyers. Key
economic factors that influence spending power include:
Level of savings
Assets
Debts
Creditworthiness
Attitudes toward savings versus spending
People buy products with these economic factors in mind, so it’s important to research your
target audience in detail. Consider:
Where they work
How they splurge
Family size
Knowing these things will help you determine the right pricing for your products and
services — possibly even leading you to create different versions of your product at
different prices for various segments.
5. Personal factor
Personal factors are very broad and often speak to the likes, dislikes, and interests of a
particular audience.
Certain age groups could favor digital products, like e-books, while others may enjoy
physical books. There are also many lifestyle choices that range from comfort to
fashion. Some brands even target audiences by male or female for niche products like
beauty oils and shaving creams.
