Introducing Customer Behaviour Framework
In marketing terms, consumer behavior is consumption behavior. It is not only to consume goods and services. Consumer behavior includes related aspects. These aspects include before, during and after consumption. These aspects include:
- Search for products
- Buy a product
- Using products
- Discard the product
These aspects also include the decision-making process before and after the above.
Consumer behavior includes cognitive aspects (knowledge and views), affection (feelings) and conation (physical behavior). Behavior is not only visible behavior but also includes invisible things such as how they evaluate, their preferences and views about possible conditions.
Consumer behavior can be defined as the decision-making process and physical activity involved in acquiring, evaluating, using and disposing of goods and services.
Why Learn Consumer Behaviour
For a salesman, understanding consumer behavior helps in formulating messages and offers that are easily accepted. Furthermore, awareness about consumer behavior helps design services that satisfy customers.
Consumer Behaviour: Economic Perspective
The beginning of economic thought saw humans as economic beings (homo economicus). Economic beings are selfish rational beings.
Adam Smith (1723 -1790) describes economic rationality in the following words:
“It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.”
[Smith, Adam. “On the Division of Labor,” The Wealth of Nations, Books I-III. New York: Penguin Classics, 1986, p. 119]
“We don’t expect dinner because of the kindness of the butcher, brewer, bread maker. We expect dinner to be available because they care about their own interests (Adam Smith). The term personal interest (self-interest) which is meant by Smith does not mean sacrificing others for themselves.
As rational beings, they look for the most optimal way to achieve their goals. The most optimal is a minimal sacrifice, maximum profit. If he acts as a seller, he wants to get the maximum profit. The cost of production/sales is low and the selling price is high.
Consumer as Rational Beings
Consumer behavior according to economics is rational. As a buyer, he wants low prices and useful goods and services. That is the principle of maximum utility. Utility in the economy is satisfaction or happiness. The utility of an object tends to decrease as soon as people consume it, up to a negative level that is willing to spend to throw it away. The lower the utility, the lower the price they want to pay for goods. That’s the economic idea about humans that is related to consumer behavior.
Furthermore, according to the economic outlook, there are several factors that influence consumer behavior.
Law of Utility
If consumers view products as able to provide satisfaction, then demand will tend to increase.
Price effect. The cheaper, the more demand. The degree of effect of price changes on changes in demand is certainly different for each item. Luxury goods tend to be elastic, meaning that fluctuations in prices have a huge effect on the ups and downs of demand. While primary needs goods tend to be less elastic. This means that up and down prices have little effect on the ups and downs of demand.
Substitution effect. The cheaper substitute goods, or substitutes that function the same, the lower the demand for the original goods.
Income. The greater the income of the people or someone, the more demand for an item.
Until now, marketing reviewers still use an economic approach. In the marketing mix, the price and product elements reflect the influence of the approach.
Then, people develop thoughts about the symptoms of buying and selling. The economic approach ignores the possibility that demand can rise if brand associations are built. Apart from that functional benefits are not the only human consideration. Social psychology, sociology and management approaches take part in contributing to marketing studies about consumer behavior.