Analysis of Modern Consumer Behavior: Is it Rational or Irrational?
Consumers purchase things they probably already have or engage with something they don’t need. Does it mean it is irrational? Probably not, as they must have made the purchase based on past experiences. Let’s understand what drives consumers to decide.
The common notion that most businesses believe is that if they know their customers’ past preferences in the purchase, they can customize and offer their products/ services that meet their demand, thus creating an increased demand for the business’s products/ services. Most companies have this approach believing that their customers spend time understanding the product in-depth and that they only make logic-backed decisions.
However, that is just the tip of the iceberg of consumerism that any business can crack the code of. Consumerism is mainly driven by complex human behavior. This may not be linked to the consumer’s core issue, and the business is providing the solution. While most marketers understand the phenomenon of complexity, their marketing approach seldom sees any change, given that each consumer has their own story of consumerism from the past. And, tracking and customizing the product to their individualistic needs every time is seemingly undoable for most businesses.
So, what exactly is the complexity of human behavior, and how does it impact consumerism? Let’s dive deeper to analyze modern-day consumers’ behavior and whether it’s rational or irrational?
A consumer’s mind constantly has something or another running up their mind while purchasing. These can be multiple factors. For example, if a consumer is out at a shopping center and comes across a sports sipper that looks attractive and draws their attention to see it. While they pick it up to examine, they have various thoughts in their mind. They can be this looks so amazing; I need to buy this; Do I even hit the gym to have such a fancy bottle; I’ll make good smoothies and carry them to work; I already have two ergonomically designed bottles shelved for long at home, etc. This complexity may lead them to either splurge or move away.
Hence, to decode a consumer’s buying pattern, one must know that the information about the product and their experience are together filtered through their belief system. Data that are not aligned with those beliefs are likely overlooked. Also, in some instances, experiences can be wholly overturned and fabricated to make a spot decision. Like, if one has a bicycle, they still buy indoor cycling equipment, etc.
A business can thrive by understanding the consumer’s pulse instead of just knowing what features they see in a product/ service. Let’s consider the frozen foods segment and its market capitalization. Frozen foods are tagged with all types of beliefs by consumers. They are unhealthy, made using discarded parts of vegetables and meat, high in preservatives; they cannot second cooking from scratch, etc. However, frozen food is now preferred because of its fantastic taste and a wide variety of healthy snacks like high protein, low-fat products, baked, not fried products, and ease of convenience for self-consumption or serving the guests. It can also be an instance of availability wherein they are traveling and cannot find anything else to cook but these packets at the nearby store.
Hence, the product needs to be up to the mark, but most consumption is overdriven by the notion that the consumer has at the very instance while deciding which is influenced by an array of thoughts from the past. Hence, the sequence and timing of the information revelation are necessary to convert a prospective client into a customer. In these frozen food cases, it would be ideal to provide the consumers with trials of the product and then maybe talk about the characteristics like how the product is emulsifier-free, doesn’t engage in animal cruelty, or is vegan and an ideal fit as mock meat, etc. Yet another approach that one can put forth is to look into the placement of the information on the packaging. Adding lines like – Choicest Scottish Salmon Fillets; Peri-Peri seasoned Potato Fries, etc., make the consumers decide while thinking about their taste buds.
What makes one think a consumer’s irrational decision has its pre-emptive notions. Consumers often are burdened with time-bound purchase pressure, which can lead to decision fatigue. It is quite often seen in the case of the Realty market. Here, the developers often showcase dreams to the buyer, who then purchases while overriding their budget. The buyer only later realizes later, say in 4-5 years, how the decision was not a rational one then.
In a nutshell, behavioral economics has penetrated modern times to help marketers infer consumers’ decision-making patterns. Marketers need to deeply study behavioral economics to understand consumer behavior and how their decisions are not irrational but impacted by several experiences. That can be achieved by seeking feedback about real products from a target group comprising real customers in real scenarios. Though this approach can be expensive and complicated to draw results out of, it gives a detailed overview of how different consumers react to the product, which helps improvise the product and its marketing more streamlined.
About the author:
Divya Batra, Marketing Head, Haldiram Snacks Pvt.Ltd