WHY DO THEY BUY?
Have you ever wondered how entrepreneurs can predict whether their products or services will sell? How can they predict who the customers will be and how much will they buy? Without such predictions you cannot put together a business plan or determine how much money you will need to start your business.
Identifying the types of customers most likely to buy your product comes first. The same products do not always appeal to different groups. Such groups are defined as a specific target market. People in such a target market are defined by their age, location, cultural backgrounds, income, occupations, marital status, and behavior preferences. Census data and other research reports can tell you how many people there are in such target groups.
Understanding why people spend their money in different ways is essential to predicting customer behavior. Psychologists have found that consumer buying behavior is first directed toward satisfying basic needs — such as being hungry, thirsty, tired or in need of a place to live. Those with low income have less money left over from these “basic needs” to spend on more expensive “wants”. Most people live above a basic survival level, and they make many purchases to fulfill needs other than just the basic ones.
Customers may choose to buy a car, for example, for very rational reasons. They may be looking for the lowest cost, the best gas mileage, safety, quality of the materials, or other practical, rational motives. Or they may really base their car-buying decision on more emotional motives such as prestige among your social group, power to attract the opposite sex, and power of the engine. It is likely that the youth target group will be interested in buying a different type of car than a successful business person with a large family. Auto dealers use these differences to reach specific target groups with their advertising and sales messages.
[pic] [pic] [pic]...