Retail spaces are designed to enhance the customer experience and encourage purchases.
Marketing is the business discipline that deals most directly with consumers. Marketers take cues from consumers before making any decision, whether on a product development issue, advertising strategy or pricing plan. Because marketing is inseparably tied to the marketplace, there are a range of different effects consumer behavior has on marketing. Understanding the link between consumer behavior and marketing strategies can boost your business effectiveness overall.
Sales
Since salespeople can approach and communicate with consumers in a number of ways, individual companies craft sales strategies based on how target customers behave in reaction to different techniques. Some customers are completely turned off by hard-sell tactics, for example, while others are especially susceptible to them. Some customers prefer salespeople walk them through purchase decisions, while others prefer to be left alone until they're ready to buy.
Advertising
Every detail of advertisements are put in place to appeal to the company's target customers in some way. Advertisers create messages based on proven reactions in their target audience to similar stimulae, to induce them to behave in a similar way. Certain consumer groups are shown to be influenced by celebrity endorsements, for example, while others are completely unaffected.
Getting people to talk about advertisements is also a factor in advertising strategy. Advertisers carefully study their target audiences to determine exactly what kind of ads induce consumers to start spreading the word about certain products.
Promotions
The area of price promotions is highly influenced by consumer psychology and behavior. Marketers plan promotional strategies based on statistical models that take a range of factors into account. Marketers consider the exact amount of price discounts, because consumers are proven to take advantage of larger discounts more frequently than smaller discounts. Marketers also consider the way in which discounts are to be redeemed, whether as store-wide price markdowns, mail-in rebates, coupons or other mechanisms, since consumers use different promotional methods in different ways and take advantage of certain methods more than others. Lastly, marketers consider the way in which they advertise promotions to consumers, who react differently to messages sent through various media.
Mail-in rebates serve as an ideal example of consumer behavior's influence on promotions. The more valuable a mail-in rebate is, the more likely consumers are to mail it in. If a company offers a relatively small mail-in rebate, a significant portion of customers will not redeem it, even though the rebate persuaded them to buy. This brings in more total revenue than an in-store sale, during which all customers pay the reduced amount by default.
Product Development
Product development no longer takes place in a vacuum. Marketers perform extensive research among their target markets to determine what kind of products and services are missing or underrepresented before beginning to develop product ideas. Marketers consider the way consumers use existing products as a way to spot unmet needs they can serve profitably.
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