Jose, on the other hand, lives alone and will not be entertaining his friends anytime soon. If he has one chocolate bar and decides to buy four more, he exceeds his consumption capacity, which may mean zero marginal utility.
8 advantages of consumer behavior theories
We have already seen the definition of consumer theory, the main propositions throughout the centuries and some important concepts, such as consumer equilibrium and marginal utility.
Whatever line of thinking appeals to you, understanding and analyzing the psychology behind consumer decision-making is critical to your business’s success.
Below we select the main advantages of being aware of these theories of consumerism.
1. Understand the motivations behind each decision
The main appeal of consumer theory is to reveal the factors that influence a potential customer’s decision . Understanding the rules that draw people closer or further away from your company is the first step to staying relevant in the market.
In fact, a Statista survey revealed that 5 out of 10 customers have higher expectations than they did a few years ago. While this is a common trend, which dataset accompanies people’s changing values and preferences over time, it is essential to know how to satisfy increasingly volatile desires.
In this sense, consumer behavior theories indicate relatively stable behaviors over time, which allow us to create patterns to interpret motivations when making a purchase.
2. Offer better products and services
According to a study by McKinsey & Company , 84% of companies consider innovation to be essential to their growth strategy . However, turning good ideas into products and services can be a challenge if you don’t know exactly what people want.
Consumer theory provides an excellent knowledge base for structuring the creation of customer-centric innovation strategies . By taking into account eligibility for the youtube shorts fund: the principles that motivate or restrict a purchase, offerings can be created based on what the customer is willing to pay or consume.
That is, they are a safe route to taking calculated risks.
3. Discover your competitive advantages
According to a Crayon Competitive be numbers Intelligence Report , 9 out of 10 companies believe their industry has become more competitive in recent years.
To differentiate themselves in the market, companies can make changes in more concrete aspects (such as product price) or more subjective ones (such as brand experience ).