Consumer behavior is the study of how individuals make buying decisions. What motivates them to make a purchase? How does their environment contribute to their decision-making process? As a marketing professional, understanding consumer behavior is key to building a business’s marketing strategy and best understanding all consumer needs. Let’s talk about a few ways that consumer behavior impacts a business’s marketing strategy.
More Accurate Sales Forecasts
A sales forecast is a business’s predictions for future sales based on qualitative and quantitative information. According to Rena Dietrich of Small Business Chron, “Sales forecasts estimate the expected sales for a particular market during a specified time period.” In other words, predictions that are based on past sales numbers and predictions based on expert observations and data. A marketing department can study past sales numbers and consumers’ behaviors to determine better what a sales forecast should look like.
Internet Research and Data
The internet and social media have given businesses and their marketing teams a new way to look into their consumers’ behavior. With the power of data and analytics, marketers can monitor consumers’ web-based behavior and see what exactly motivates their purchases. These web-based findings can help businesses and their marketing teams figure out what products are most appealing to consumers, sales promotions that would likely prompt purchasing, and even what content consumers interact with the most. Internet research gives marketers a better view of consumer behavior, but it is also a cost-effective tool.
Improved Market Sensing
Marketing teams should always understand their business’s external market. This means understanding competitors, their products, and how to obtain a competitive advantage. Market sensing is a form of research that marketers use to gather information and qualitative data to better understand their current market and consumers. The data is typically collected from various channels like interviews, surveys, focus groups, and other questionnaires.
Proper Supply and Demand
Supply and demand is a critical part of any business model and is significantly impacted by consumers’ behavior. By analyzing consumer data, especially on the web, marketers can better understand the business’s supply and demand needs and avoid a situation of little supply and too much demand or vice versa.