There are several reasons for understanding buyer behavior. Buyer behavior analysis helps an organization in efficient use of marketing resources, location of new marketing opportunities, selection of market segments, product positioning, market research, and improvement of marketing strategy.
Importance or significance of buyer behavior analysis can be described as follows:
Importance or significance of buyer behavior analysis can be described as follows:
1. Efficient Use Of Marketing Resources
The main objective of understanding buyer behavior is to develop efficient use of marketing resources. The goal of marketing is to understand, meet and satisfy target customers' needs and wants. It is important for the marketing executives to find answers to such questions such as why customers buy a product and how they respond to marketing inputs such as price, quality, service, availability, styles, images etc. buyer behavior analysis helps the marketing executive to find answers to those questions.
2. Location Of New Marketing Opportunities
The study of buyer behavior helps the business organizations to locate customer groups with unmet and unsatisfied needs and desires. An organization can effectively and profitably meet new buyer needs arising in the market due to a change in per capita income, geographic, social and psychological mobility of people and cross cultural exchanges.
3. Selection Of Market Segments
Buyer behavior analysis helps to identify and categorize the need and desire clusters in the market in terms of geographic, demographic, psychographic, and behavioral variables thus giving and organization well-demarcated market segments. The organization can select the market segments based on their size, growth and profit factors.
4. Product positioning
Product positioning is the process of presenting the product to buyers in such a manner that they would perceive meaningful differences between a brand and competing brands. The differentiated brand has higher competitive advantage because it is recognized by buyers as different from other brands. Buyer behavior analysis helps an organization to study how buyers perceive different brands of products sold in the market. Once buyers' images of the brands are studied and profiled, the organization can select an appropriate position for its brand.
5. Market Research
Market research analyzes buyers and marketers; and provides information feed-back to the marketing decision makers. Market research is also used for predicting the behavior of customers. Market research cannot be conducted without the knowledge of buyer behavior principles. Therefore, buyer behavior analysis is important for market research.
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6. Improving The Marketing Strategy
Buyer behavior analysis places the organization in a good position in the competitive market. It gives valuable information feedback to the firm on the changes in consumer needs, preferences and buying power. This information can be effectively utilized by the firm to design a marketing strategy to deal effectively with the changes.