This essay discusses the micro and macro aspects of understanding customers, including the concept of understanding customers, its importance, and examples of industry practice from different organizations.
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Table of Contents INTRODUCTION...........................................................................................................................1
Topic: The micro and macro aspects of Understanding Customers. INTRODUCTION The concept of understanding customers is related with analysing and reviewing the needs and set expectation level of customers that they desire and wants to achieve from an organisation. Further, understanding customers is vital and essential for all business organisation as it tend to support higher business intend and productivity through attracting and catering larger number of customers (Kim and Krishna, 2021). The current essay is based on the topic of micro and macro aspects of Understanding Customers. Further, it includes a decision about the Concept of understanding customers and its importance, Understanding the micro and macro aspect of the consumer behaviour along with 1xamples of industry practice from different organisation. Concept of understanding customers and its importance It has been analsysed and seen that the understanding the customers is the key for success for any business organisation as it sets out a base and framework for providing and delivering suitable product and good services. Along with this, knowledge and understanding the customers is also vital and significant as it helps an organisation to get more lead and have higher sales and improved business productivity (Mateu Mateu, 2020). Along with this, it has been also seen that an organisation need to be attentive to effectively understand the behaviour and purchasing intend of its customers. Further, there are many potential rewards and benefits that are great and tend to support improved performance for a business as it helps and supports the increase customer loyalty and bring in new business through positive word-of-mouth recommendation (Bravo, Catalán and Pina, 2021). Further,understandingcustomerscomprisesofdevelopingbetterknowledgeand underdoing about the consumer behaviour that tend to comprises of the study of individuals and groups to understand all the activities which are tend to be associated with the purchase, use and disposal of goods and services. Further, the Consumer behaviour consists of how the consumer's emotions, attitudes and preferences affect buying behaviour. Thus, reviewing and analysing consumer behaviour for understanding the customers’ needs and preference required a better analysis and review of the various micro as well as macro aspects that tend to influence the buying pattern and overall needs of consumer (Kim, Yoo and Yang, 2020). Along with this, understanding customers and Consumer behaviour comprises of analysis and determining all the 1
factors that tend to influences individuals to purchase certain products and support certain brand based on the six principles of persuasion are reciprocity, commitment, pack mentality, authority, liking and scarcity. Understanding the micro aspect of the consumer behaviour The micro aspects of the consumer behaviour tend to comprises and include the internal factors that affects the behaviour and choice of an individual customer. Thus, implication and use of the consumer behavioural theory has been made Created by Martin Fishbein and Icek Ajzen in the late 1960s, the Theory of Reasoned Action centres its analysis on the importance of pre- existing attitudes in the decision-making process (Choi and et. al., 2021). The application and use of the consumer behaviour theory posits that consumers act on behaviour based on their intention to create or receive a particular outcome. Further, it has been also seen and reviewed that there are many micro factors that tend to have impact on the consumer behaviour (Chaudhary, Singh and Sharma, 2021). The main micro aspects of consumer behaviour on the basis of consumer behaviour theory comprises of the cultural, social and demographic aspects of an individual that tend to affect their decision making and buying intent. It has been analysed that the tourist belongs to a variety of culture and belongs to different society that is directly reflected in there buying. Thus, analysing the cultural needs and social aspects are vital micro factors for every organisation to effectively understand and implicate about the consumer behaviour and there taste and preference level. Further, other demographic factors such as income and education level also effects the buying habits of the tourist (Agarwal and Mehrotra, 2018). It has been seen and evaluated that the higher income level tourist is more attracted towards luxury and exclusive products while the low level income tourist seemed to fulfil their needs and accommodation wants through buying and catering affordable products and services. Thus, the consumer behaviour theory supports better customer underdoing through determining that how people decide to spend their money based on their individual preferences and budget constraints. Beside this, as a branch of microeconomics, consumer theory shows how individuals make choices, subject to how much income they have available to spend and the prices of goods and service therefore facilitates better understanding of the micro aspects of consumer behaviour (Löbler and Wloka, 2019). 2
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Understanding the macro aspects of the consumer behaviour Consumer behaviour is defined as a study of individual and organisational along with the manner in which they utilise services and products. In addition to this it has been identified that it ismainlyassociatedwithmotivationspsychologyandbehaviour.Itisessentialforan organisation to identify consumer behaviour before developing products and services in order to serve consumers as per their requirement (Ahn, 2021). Furthermore it has been evaluated that the macro aspect of consumer behaviour is inclusive of external factors which have tendency to impact upon behaviour of consumers manner. In this use of the consumption theory is been done in order to evaluate the impact of macro environmental forces on the behaviour of consumers and upon their decision making process. With help of this theory manner in which consumer behaviour get influenced due to the impact of external factors can be evaluated the theory of consumption identifies that consumer base their expenditure on informed and rational assessment of the future and current economic circumstances. It has been underlined that macroeconomics tend to utilise specified version of the optimisation framework which is known as permanent income hypothesis. The theory of the consumption function identifies that consumer behaviour get influenced due to various factors such as interest rate, income, wealth and more. Macro aspects of consumer behaviour as per theory of consumption function states that different type of elements like income level wealth interest rate affect consumer decision making and there decision to buy a product or service (Ahn and Thomas, 2020). It has been evaluated that consumers belongs from different geographical location and income level which reflects their buying decision. In this it is essential for organisation to evaluate the income level of consumers in order to provide them services and facilities as per their income this will effectively help in attracting number of consumers. It has been identified that the theory of the consumption function effectively supports to determine the manner in which consumers spend their money accordingtotheirbudgetconstraint.Alongwithithasbeenidentifiedthatconsumer consumption is mainly depend upon the income which reflects gradual adaptation of new circumstances with the help of evaluating income level of consumers and providing services and facilities accordingly their behaviour can be easily influenced. 3
Furthermore it has been evaluated that this theory states an economic formula which duly represents the functional relationship between gross national income and total consumption. This theory was coin by British economistJohn Maynard Keynesstate that with the help of taking use of tracking and predicting total aggregate consumption expenditure behavioral aspects of consumers can be influenced.Thus, with the help of emphasizing upon this theory but a form of understanding can be identified which helps in determining consumer income level which assists organisation to evaluate their spending and buying habits. This, helps in understanding macro aspects of consumer behaviour in a well defined and effective manner. Examples of industry practice from different organisation Analysis and study of consumer behavior is essential for the organisation in every industrial sector whether it is manufacturing, retail, automation, etc as it helps marketers for business owners to have a proper understanding of consumer expectations (Cheng, 2020). There is number of organization in different industries such as Tesco, Tesla, General Motors, Hilton Hotelthosewhoundertakeadvantageofevaluationofconsumerbehaviourinorderto understand needs and demands to provide the wide range of products and services as per their need. With the help of consumer behaviour, all these organisation are influencing their mind set and enhancing their satisfaction level in a well-defined and effective manner. Furthermore, it has been evaluated that analysis of consumer behaviour assist organisations in different industrial sector to maintain leaves and enhance overall sales and profitability. It also helps organizations to long term sustainability in the industry. CONCLUSION As per the viewpoint of it has been concluded that it is essential for an organization in every industrial sector of different sizes and scope to understand consumer behaviour in order to determine the actual needs demand and expectations. This will significantly assist the company to fulfill them ineffective manner and enhance their satisfaction level towards organizational offerings. This report identifies that micro and macro environmental analysis helps organisations to understand the needs and demands of consumers along with the factors which influence them. It has been identified that with the help of having a proper understanding of consumer behaviour 4
organisation can set a framework and can devise strategies to provide them a better form of products and services which help the organisation to generate higher lead and sales in the industrial sector. REFERENCES Books and journal Kim, S. and Krishna, A., 2021. ‘I’ll stand by you:’understanding customers’ moral decoupling processes and supportive behavioral intentions in cases of corporate misconduct.Journal of Marketing Communications, pp.1-23. Mateu, J., 2020.A Bayesian implementationfor predictingand understanding customers’ purchase behavior(Master's thesis, Universitat Politècnica de Catalunya). Bravo, R., Catalán, S. and Pina, J.M., 2021. Understanding how customers engage with social tourism websites.Journal of Hospitality and Tourism Technology. Kim, B., Yoo, M. and Yang, W., 2020. Online engagement among restaurant customers: The importance of enhancing flow for social media users.Journal of Hospitality & Tourism Research,44(2), pp.252-277. Chaudhary, P., Singh, A. and Sharma, S., 2021. Understanding the antecedents of omni-channel shopping by customers with reference to fashion category: the Indian millennials’ perspective.Young Consumers. 5
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