What is the need of studying customer behavior?

In earlier days the importance of studying customer behavior was not realized because it was seller driven market. But modern marketing is customer-driven. This essentially makes the customer the king of marketing. That’s why consumer behavior as a subject has been explored and it helps an organization or a company to frame production policies, channel decisions, price policies, promotion, and advertising policies, and above all sales promotion policies.

Customer decision-making varies with the type of buying decisions. The decision to buy toothpaste, a tennis racket, a personal
computer, and a new car is very different. The complex and expensive purchase involves more buyer deliberation and more

-Production policies: Consumer behavior gives an insight into the various factors which prompt them to purchase a
particular product. Identifying the taste or choice of the consumer can help the organization change the product

-Price policies: Some customers purchase products only because a particular thing is cheaper than the competitive
articles available in the market. In such a competitive scenario, it is wiser not to raise the price of the commodities.

-Channel decision: Convenience goods should be available in the nearest shop, while special and shopping goods should be
available in the very special store through a selective distribution system.

-Promotional and advertising policies: All the promotional policies including advertising policies should be derived from
the consumer behavior.

-Sales promotion policies: A study of consumer behavior is also, an important factor to decide on a sales promotion scheme
and duration of such schemes.