Running a successful business in Australia requires more than financial acumen and industry knowledge. To effectively navigate the complexities of the market and foster sustainable growth, it also requires an understanding of consumer behaviour.

While consumer behaviour isn’t the only element driving business success, it is a key puzzle piece that supports informed decision-making and enables the creation of marketing strategies aligned with consumer needs and preferences.

From fledgling startups to major corporations, decoding consumer habits helps companies facilitate tailored product and service development, stay competitive and drive repeat business. In this article, we explore the importance of consumer behaviour and how studying an MBA can prepare you to meet the evolving needs of buyers across the globe.

What is consumer behaviour?

Consumer behaviour examines the process people go through when selecting, buying, using and disposing of products, services or ideas. It delves into the psychological journey consumers embark on in the marketplace, uncovering the motivations and factors that drive their choices and loyalty to brands.

Natascha Turner, co-founder of Inspike Technology Ventures, says consumer behaviour is “like a roadmap to your customers’ minds. It’s the study of how individuals, groups and businesses decide what to buy, why they buy it and what happens after the purchase.”

Why does this matter? Because knowing how your target market thinks and behaves allows you to tailor products, services and messaging to meet their needs while building loyalty and preparing your business for market shifts.

Types of consumer behaviour

Turner says that, generally speaking, consumer behaviour falls into four primary types:

  • Complex buying behaviour: Typically associated with significant investments like cars and software, this behaviour urges consumers to seek extensive information and reassurance. As a marketer, you should aim to meet this buyer need as an expert rather than a salesperson.
  • Dissonance-reducing buying behaviour: This occurs when options are alike and consumers are worried they’ll make the wrong choice. Shoppers in the market for products such as home appliances or smartphones, where there are numerous options with similar features, will often display dissonance-reducing buying behaviour. To win them over, highlight your unique selling points and ease any post-purchase doubts with ample information about pricing, options, returns and replacement.
  • Habitual buying behaviour: This style is associated with people who have high product loyalty and don’t put a lot of thought, effort or research into choosing a product or service because they make repeated purchases of it out of habit. This type of buying behaviour occurs most often with routine, low-cost and everyday consumables like bread and shampoo.
  • Variety-seeking buying behaviour: This relates to those consumers who are seeking something new. This desire for change might involve switching brands or flavours of a product they often buy. These consumers will often try new restaurants, shop at a clothing store they’ve never been to before or change up their interior decor frequently. This buying behaviour calls for free trials and samples, and easy switching to win them over.

“Not all customers shop the same way, so understanding these four buying styles is vital,” explains Turner. Being familiar with each type of buying behaviour can help companies segment their marketing strategy, foster stronger customer relationships and refine their distribution channels.

Consumer behaviour theories and models

To truly grasp the complexities of consumer behaviour, it’s also important to explore the theories that shed light on what drives buying choices and preferences. Here are some of the more classic theories:

The psychological model

“What’s going on in the customer’s mind?” asks Turner. “Perception, attitude and even their memory can influence purchases. Appeal to these elements for effective messaging.”

The sociological model

“Never underestimate the power of groups!” Turner advises. “Family, friends and social circles can heavily sway consumer decisions.”

The economic model

“Even in a complex world, the bottom line matters,” says Turner. “Consumers weigh price, quality and overall value when choosing between options.”

The behavioural model

Turner’s advice? “External factors and learned responses drive action, so target those triggers through smart marketing and product design.”

Beyond these models, several well-known theories offer helpful frameworks for understanding and aligning strategies with consumer expectations and behaviours. These include:

Maslow’s hierarchy of needs:

Maslow’s theory suggests that individuals have a hierarchy of needs they seek to fulfil, starting with basic physiological needs and progressing to higher-order needs. The hierarchy consists of five levels:

  • Physiological needs: These are the most fundamental needs for survival, such as food, water and shelter. For example, a person experiencing hunger will prioritise finding food over other concerns.
  • Safety needs: Once physiological needs are met, people seek safety and security. This includes physical safety as well as financial and health security. An example would be a person investing in home security systems to protect their property.
  • Love and belongingness needs: People need love, affection and belonging, both in personal relationships and within social groups. Joining clubs or taking part in community events can satisfy these needs.
  • Esteem needs: This level involves the desire for self-esteem and the esteem of others. Achievements, recognition and respect from others contribute to fulfilling esteem needs. For instance, a promotion at work can fulfil the need for recognition.
  • Self-actualisation: At the highest level of the hierarchy, individuals seek to realise their full potential and pursue personal growth and fulfilment. This might involve pursuing creative endeavours or personal development, or contributing to society in meaningful ways.

Cultural model:

The cultural model explores how societal and cultural factors influence consumer behaviour. It considers the impact of cultural norms, values, beliefs and traditions on individuals’ preferences and purchasing decisions. Here are some key elements of the cultural model:

  • Cultural norms: These are shared expectations and behaviours within a society. For example, in some cultures, modesty is highly valued, affecting clothing choices and advertising approaches.
  • Values and beliefs: These shape a person’s perceptions of products and brands. For instance, a company that values environmental sustainability will appeal more to consumers who prioritise eco-consciousness.
  • Social class and status: Cultural models also consider social class and status hierarchies, which influence consumer preferences and buying behaviours. Luxury brands, for example, cater to consumers seeking status symbols to display their social standing.
  • Cultural symbols: Certain symbols and meanings hold significance in different cultures and can influence consumer preferences. For example, colours may have different cultural associations that affect branding and packaging choices in international markets.
  • Cultural subcultures: Subcultures in larger societies have their own values, norms and behaviours. Understanding these subcultures allows marketers to tailor products and messaging to specific consumer segments. For instance, marketing strategies for teenagers might be very different from those aimed at seniors because of unique subcultural norms and preferences.

By exploring these theories, marketers can gain profound insights into the underlying factors influencing consumer behaviour. That’s marketing gold.

Australian consumer behaviour trends for 2024

Turner says several pivotal trends are shaping the Australian consumer landscape:

  • Purpose-driven purchasing: The increasing focus on sustainability, ethical production and social responsibility mirrors a national shift towards value-aligned buying. In fact, 61 per cent of people globally say they are willing to pay more to a company that is seen as being ethical or giving back to society.
  • The omnichannel experience: Today’s consumers increasingly expect a seamless blend of digital and physical purchasing avenues. Companies need to be investing in fluid, cross-platform experiences.
  • Wellness as a status symbol: The rising wellness movement influences consumer preferences, with a marked tilt towards products and services promoting health and wellbeing.
  • Supporting local: A growing preference for Australian-made goods showcases the importance of local sourcing and community ties in branding strategies.

Enhance your understanding of consumer behaviour with an MBA

Are you a CMO or considering a career in marketing? In an age where consumer expectations are rapidly changing, pursuing an MBA can offer strategic benefits and a competitive edge for results-focused marketers. By undertaking an MBA with consumer behaviour-related units, you can acquire the skills to analyse and capitalise on consumer behaviour models, theories and trends.

Discover how our partner university MBA courses can develop your marketing skills:

Your journey to marketing mastery begins here

Understanding consumer behaviour is essential for success in an era where strategic customer engagement matters. Whether you’re refining your marketing skills or exploring consumer psychology, an MBA can give you the edge to excel in a customer-focused business. Speak with a Student Enrolment Advisor to learn more about enhancing your marketing expertise with an MBA.

Speak to a Student Enrolment Advisor

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