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Understanding Consumer Behaviour

GoCardless
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Last editedDec 20212 min read

Understanding consumer behaviour theory is all about recognising the patterns of buying behaviour that different types of consumer exhibit. By understanding why certain consumers behave in a certain way when making purchases, it is easier for businesses to market their products at their target audience in the manner that best suits their behavioural buying patterns.

Consumer behaviour theory is the study of these buying behaviours. It means working out why people make decisions when they purchase. This then helps a business and their marketing department capitalise on the predicted behaviours by knowing how and when their target demographic is most likely to be open to purchasing their product.

By identifying the influences consumers experience that determine their decisions, businesses can develop strategies that take advantage of the natural inclinations of consumers, or even outright manipulate their behaviour.

Behaviour manipulation might sound sinister out of context, but it is ultimately about knowing what your ideal customer wants and when they want it, and then simply providing it for them exactly as they prefer.

Examples of consumer behaviour

One well-known example of consumer behaviour theory happens every December when there is a huge rise in parents buying toys and other items aimed at children. For businesses making or selling these items, it is clear that this is the time to step-up their promotional marketing campaigns and let parents know what they should be buying to make their kids happy.

Another type of consumer is the one that always wants the latest version of a device as soon as it is released, so creating pre-release hype for a new version of a device is crucial for the appeal of that device’s brand to this type of consumer.

Some consumers are also loyal to one particular brand and won’t change their mind no matter how enticing a rival brand is. Some only ever buy online, while others only buy from brick-and-mortar premises. Others still are all about making savings and won’t splash out on a big purchase until the sales season begins or the original price comes down over time.

There is also a growing number of consumers whose primary concern is that their purchases are environmentally friendly. Depending on the product a business offers, this could be the most crucial factor of all.

All of our buying behaviours are influenced by our surroundings and circumstances, including where we live, our age, gender and disposable income. Consumer behaviour theory is the study of all these buying habits and influential circumstances, which can be broken down into three categories as described below.

Consumer behaviour factors

While it might sound complicated on the surface, once we divide the theory of consumer behaviour into three categories, it becomes a much simpler subject to approach. The three categories we can split consumer behaviour theory into are:

  • Personal characteristics

  • Individual perceptions

  • Social influences.

We know that older people shop differently to younger people, as do men from women. There are also differences in the way an inner-city office worker shops compared to a manual labourer from the suburbs or a farmer in the countryside. There are then the additional factors to consider, as explained below.

Personal characteristics

Our personal characteristics play a very important role in our consumer behaviour. It is often the likes of age, gender, culture, occupation and financial situation that is used to identify a target audience, even before getting deep into understanding consumer behaviour theory any further.

Individual perceptions

There are numerous psychological factors to consider, such as political perceptions, environmental awareness and general motivations.

Social influences

Our social influences include the communities we live in and our culture. This includes our living conditions and level of education, and especially the trends and fashions prevalent among such consumers.

We can help

If you’re interested in finding out more about consumer behaviour theory, or any other aspect of your business finances, then get in touch with our financial experts at GoCardless. Find out how GoCardless can help you with ad hoc payments or recurring payments.

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