Human psychology has been at the core of marketing since the Age of Consumerism began to define modern industrialized society a century ago. Here are some of the ways in which psychology and marketing affect each other in business.
How Psychology is Tied to Marketing
The connection between marketing and psychology encompasses the principles of human behavior. Since marketing deals with persuading consumers to make purchasing decisions it naturally has an impact on human decision-making. Large companies spend millions of dollars on human behavior research to learn about the decision-making process.
Value of Consumer Research
Market research is necessary for a company to analyze its buyers and industry trends. Research tells an enterprise if it is reaching its target audience and how people perceive the business. By determining levels of customer loyalty, a company can work on improving its relationship with individual customers using customer relationship management software. The platform allows a company to review a customer history and connect with them instantly through phone or email.
Consumer Behavior Studies
One theme that has recurred in consumer behavior studies is when consumers aren’t sure what product to choose, they follow the crowd. That’s how popular brands become more popular. Although not all people are swayed by the bandwagon effect, a majority of consumers tend to be followers more than leaders. Studies conducted by David Wooten from the University of Florida’s Department of Marketing in 1998 confirm that consumers are influenced by others when evaluating a product.
Reading online reviews has become a major factor that affects purchasing in the 21st century. A study of various research by Econsultancy has found that over 60 percent of consumers make purchasing decisions after reading the reviews. A TripAdvisor survey provides further evidence that consumers care what others think, finding that 77 percent of travelers read reviews before booking a hotel room.
Reviews are shaping online buying habits, so it’s important for businesses to know what customers are saying about them online. More than ever, reviews have become an important trigger for success through review sites like Yelp, email and social media.
Another important theme to be learned from consumer behavior studies is that consumers are bombarded with so many choices, they often resort to the easiest choice. Research also shows that even the most loyal customers consider irresistible offers from competing brands. Consumers can further be swayed by what authority figures acting as brand ambassadors say about a brand.