Significance of consumer psychology

Consumer behaviour binds together marketing issues like communication, identity, social status, decision-making, mental, and physical health. Study of how consumers behave plays a very critical role, as consumers are human being who finally spend money and keep the businesses going.
The convergence of economic, demographic, and technological forces together are bring about unprecedented changes in internet powered consumer s’ behaviour. The line between local and foreign consumers is fading fast and we are poised to see a rebalancing in the global economy purely on the bases of how consumers spend money over the coming years. Businesses need to base their predictions on original economic, psychological and academic research on the subject.
Corporate web pages and ecommerce started in 1995, and got a right ticking-off only six years later when the dot com bubble burst in 2001. The current evolutionary trends in consumer behaviour can therefore be seen as a progression right from the internet’s roots, since it re-transforms the World Wide Web to what it was initially created for — a medium for exchange of information between users. In addition to information exchange, factors such as demographics, technology, literacy, experience level and affordability also influence these changes. One thing is certain. Knowing how consumers behave can improve the profitability.
At present, the global marketplace is characterised by diversity among consumers, manufacturers, marketers, merchants, media channels, cultures, and customers, and of course the very unpredictable human psychological behaviour. On the other hand, customers are more informed, more knowledgeable, more demanding, more discerning. It is in this milieu that the study of consumer behaviour provides the conceptual and technical framework for enabling marketers to apply findings to marketing practices.
Deeper knowledge of consumer behaviour enables them to understand and predict patterns in buying behaviour. It is concerned not only with what consumers buy, but also with questions that are more complex. How consumers think, feel, reason, and select between different choices they have? How do environment, culture or media influence consumers? What are the limitations in consumers’ knowledge or abilities that inhibit their decision-making? How consumers’ motivation and decision strategies differ between products that vary in their level of importance or interest? How can marketers adapt and improve their campaigns and strategies to reach consumers more effectively?
During the start of ecommerce boom, not long ago, only few businesses in the more connected world had the tools to understand customer-behaviour. These tools are now within the reach of even the smallest e-commerce concerns. What is more, these tools are free, features are abundant and installation time has never been faster. Perceptive businesses who know their customers already are taking advantages by creating and keeping customers through marketing strategies. Anyone can analyse customer-behaviour; customer intent, their needs and wants, and may be take a peek into their hearts and minds.
Pakistan is witnessing a multitude of foreign retailers doing consumer behaviour research in its market. One does not see too many local brands researching to understand consumers and their perceptions toward brands. Pakistani businesses and brands need basic research on how consumers behave in markets of interest. Economists, psychologists, academia and the industry need to join and find answers to these obvious questions. How else can corporate Pakistan take advantage of the all-pervasive exposure of e-commerce worldwide and satisfy consumers’ needs’ at home? The gap between the corporate world and academic research should be bridged on priority. Generalisations, stereotypes, old staples and assumptions do not work anymore.

The writer is Deputy Controller of Examination at Lahore School of Economics. He blogs at http://logicisvariable.blogspot.com and can be reached at [email protected]