Why Measuring Consumer Behavior Is Important

Why Measuring Consumer Behavior is Important

Feb. 24, 2005

Ryan Brophy

Management 480

(408) 390-0941

Introduction

Insight into consumer decision-making and buyer behavior is at the heart of the marketing concept (Arndt 1968). To date, researchers in the field have had little success in developing substantial scientific theory to describe stable laws in marketing. Most of the progress over the past few centuries has focused on understanding and identifying observable similarities consumers share. Michael H. Halbert (1964) said: "From the viewpoint of the established sciences, marketing has no theory that is defensible on the grounds of its logical consistency, philosophic adequacy, or experimental foundation." Developing a theory in this field has been a grueling process, and no consistent law has yet been discovered. The research and measurement of buyer behavior is vitally important to the field of marketing because it can provide insight into a possible future scientific law in this field.

Before the question "Why measure buyer behavior?" can be addressed, the applicable terms, "buyer behavior" and "measurement" should be identified. The American marketing Association defines buyer behavior (AMA refers to this as "consumer behavior") as: "The dynamic interaction of affect and cognition, behavior, and the environment by which human beings conduct the exchange aspects of their lives" (http://www.marketingpower.com/live/mg-dictionary.php?Searched=1&SearchFor=consumer%20behavior). To understand the importance of the application of this term, marketers ask questions such as; "Why do consumers make certain purchases?", "What factors are involved in the influence of these purchases?", and "Do changes in society have an effect on these decisions?" Marketers value the knowledge gained by examining buyer behavior because a consumer's needs cannot be met unless they have been identified clearly.

No two people have exactly identical preferences, beliefs, and behaviors. Ideally, a marketer would like to understand each person as thoroughly as possible. Traveling door to door, speaking to each member of the household and spending the time to learn about their likes and dislikes would be impossible. Fortunately, buyers tend to have consistent behavior patterns and habits in the market place. This consistency provides marketers with the opportunity to measure similarities among buyers, predict their future behavior, and apply that knowledge to encompass groups of people with parallel behaviors. Once again, I will rely on the American Marketing Association to provide a definition for the term "measurement". Measurement is "A rule for assigning numbers to objects to represent quantities of attributes" (http://www.marketingpower.com/live/mg-dictionary-view1932.php). Measuring buyer behavior is a practice used by marketers to gain information that can help prescribe effective approaches for strengthening customer relationships and increasing product satisfaction.

Now that these terms have been recognized, the question at hand may be examined. Why is measuring buyer behavior important? To understand the significance of this question in the field of marketing, the value of measurement knowledge to consumer behaviorists and practitioners must be appraised. If measuring buyer behavior is important then this information must aid in the development of more proficient marketing activities. Is this knowledge truly valuable? Measurement should provide marketers with useful information. Can this knowledge provide a marketer with useful information in the market place? Marketing activities, if successfully improved, should provide companies with positive results. Is there supporting evidence to prove that companies are actually using this knowledge?

Value of Measurement Knowledge to Consumer Behaviorists and Practitioners

Marketers utilize models to describe similarities between consumers. The buyer behavior decision-making model is used to recognize the progressive process of a consumer when making decisions to purchase a product or service. This process has been investigated and accepted as a current and acceptable theory. These steps are considered the fundamental progression a buyer travels through.

Problem Recognition occurs once a person recognizes a difference between his current condition and an ideal state. When the perceived ideal state becomes significant, it will trigger a response which initiates the decision-making process. Problem recognition can be triggered simply by seeing an empty bottle of juice or by advertisements.

After the process has been initiated, a person will search for more information. This step is named Information Seeking. This stage helps to clarify possible options available and will begin with an internal search. This consists of any past memory or knowledge concerning the purchase. The internal search can be quick and easy but only sufficient for frequently purchased products. If internal information is inadequate, past knowledge will not suffice, and risk of making a wrong decision is high, an external information search will be necessary. The principal sources for gaining information are through friends and family, public resources, and marketing sources such as advertisements and sales people. Seeking information aids in the clarification of a given problem. Once this is accomplished, one must evaluate the information.

The next stage, Evaluation, leads a buyer through a process of comparing individual product features. He compares these attributes against his personal performance expectations. Each product will be ranked, based on the buyer's perceived value of acceptable choices. Once expectations are met, the buyer may decide purchase the product with the greatest perceived value.

The buyer has now arrived at the Purchase Decision stage. There may be a time dimension between the decision and the actual purchase. The buyer may need time to decide from whom he would like to do business, and when he would like to make the purchase. Past experiences, atmosphere of the store, added benefits such as warranties, and many other factors may have influence during the decision. After a decision has been made and a transaction occurs, the buyer will reflect back on the overall