Consumer Behavior and Marketing Action: Clarks Market Segment - Assignment Example

08-05-2007 Clarks-case a) A business firm, segments its market so it can respond more effectively to the wants of groups of potential buyersand thus increase its sales and profits. People have different needs and wants. Market segmentation involves aggregating prospective buyers into groups that 1) have common need and 2) will respond similarly to a marketing action. Market segment are relatively homogeneous groups of prospective buyers that result from the market segmentation process. Market segment can be built up in many ways. One common method is to identify preference segment and they are: i) Homogeneous preferences ii) Diffused preference and iii) Clustered preference. Clustered market might reveal distinct preference clusters, called natural market segments. Clark's market segment could easily be identified as: Active air and Springer shoes for men and woman who required sporty looking comfortable shoes. Fashion conscious consumers of age group 18 to 30. Comfort oriented footwear for older customer. Own brand with fashionable and price sensitive consumer who looks for more modern looking footwear but price conscious because short duration of styles, actively targeting people between age group of 35 to 45 years. (b). Marketers advocates a need based market segmentation approach. Robert J. Best (2000) proposed seven step process and these are i. needs-based segmentation ii. Segment identification iii. Segment attractiveness iv. Segment profitability v. segment positioning vi. Segment 'Acid test' vii. Marketing mix strategy. For effective segmentation process, the market segment must be i. Measurable ii. Substantial iii. Accessible iv. Differentiable v. Actionable. Now on the basis of above 5 parameters we would discuss Clark's segmentation process. Clark's market segment could be measurable. As we know that consumer expenditure on footwear is increasing by 3.5% producing an additional GBP 166 million. Clark's brand is controlling 10% of consumer expenditure on footwear and over 30% of children shoe market. Targeted market segment of Clark's is comparatively and young affluent generation between age group of 18 to 30. This generation is fashion driven, ready to spend money and have earning. They are looking for more modern designed, trendy, easy to wear, comfortable and stylish foot wears. This age group has the potential to buy as well as influence the other segments also. So Clark's segments are measurable. This market segment is substantial also. A large number of persons belong to this age group. They have similar kind of needs. They want to wear exclusive designs that have brand name also. Clark is known for its quality as well as for its brand name so when Clark has launched the specific products, which fulfilled the needs of, the new market segment, people tend to buy those products. This segment has been easily accessible and Clark has reached to them effectively through advertising with catchy slogan via modern communication media i.e. through T.V and terrestrial and satellite channels. This young people between age 18 to 30 are easily distinguishable through their attitudes. The second segment, which Clark is targeting, is between age group of 35 to 45 who are fashion oriented but more prices sensitive as well as also make decision while buying shoes for their children. So they are decision-makers also. They have the purchasing power and they are looking for style as well as comfort. These segments have different needs and requirements than any other segment. So no two segments could be mixed up. Finally Clark has formulated an effective integrated flexi communication strategy to attract its newly targeted segment, which is predominantly fashion oriented. This fashion oriented affluent segment of younger people creates a major market potential in terms of buying practices and tendency to do expanses on fashion oriented objects like footwear. So if we evaluate keeping in mind the different segments of Clark we could easily find that Clark's segmentation process is good but needs a little modification. Its active air spring shoes needs more emphasis on the market segment of people between the group of 18 to 30 because more and more people of younger generation now looking for sporty look, unconventionally designed modern looking shoes and if this segment has to be targeted, the products like Active air spring shoes has to be promoted. 2. Marketers have to go beyond the various influences on buyers and develop an understanding of how consumers actually make their buying decisions specially, marketers must identify who makes the buying decision, the types of buying decisions and the stages in the buying process. Consumer decision-making varies with the type of buying decisions. Assael (1987) distinguished four type of consumer buying behavior based on the degree of buyer involvement and the degree of difference among brands: Complex buying behavior, Dissonance reducing buyer behavior, Habitual buying and Variety seeking buying behavior. Smart companies will immerse themselves in trying to understand the customers overall experience in learning about a product making a brand choice, using the products and even disposing of it. A five-stage model has been device to represent an elaborate customer buying process. Starting with problem recognition, the consumer passes through the stages of information search, valuation of alternatives, purchased decision and post purchase behavior. Clearly the consumer buying process starts long before the actual purchase and consequences long afterwards (Engel et al. 1994) Problem recognition: The buying process starts when the buyer recognizes a problem or need. Marketers develop marketing strategies the trigger consumer interest and lead to the second stage in the buying process. Information search: An aroused consumer will be inclined to search for more information. Through gathering information, the consumer learns about competing brands and their features. So company must strategize o get its brand into the prospects awareness set consideration set and choice set. Evaluation of alternatives: Consumer after gathering all information about products evaluates cognitively oriented, meaning that consumers form judgment largely on a conscious and rational basis. The consumer sees each product as a bundle of attributes with varying abilities of delivering the benefits to satisfy this need. Consumers develop attitudes towards various brand alternatives through an attributes evaluation procedure (Green & wind, 1973). Purchase decision: In the fourth stage, the consumer forms preferences among the brands in the choice set and may also form an intention to buy the most preferred brand. Post purchase behavior: After purchasing the product the consumer will experience some level of satisfaction or dissatisfaction. Thus marketers job does not end when the product is bought. The importance of post purchase satisfaction suggests that product claim must truthfully represent the products likely performance. Now on the basis of this 5-stage model we will evaluate Clark's consumers behavior and evaluate their brand loyalties. The changing needs of the customers and changing dynamics in the clothing market result into rapid changes in the market of footwear. As shoes are sought to match differing outfits and occasions and therefore potential for sales exists. Market is growing and the trends in the market, made footwear not as product but an accessory that has been included into fashion. Clark, after carefully researching the market, identified that its brand is still popular with 10% of total expenditure on footwear has been done by the customers on its products and have 30% market share in children shoes. But the changing needs and buyers' requirements of especially young created the need for Clark to focus on different segments.To rouse the costumer interest especially young, Clark device an strategy to advertise its products with the slogan the 'life's one long catwalk.' through different communication medium from newspaper to satellite channels & TV. After seeing the advertisement, people started searching the products and trying to gather information. They compare the different products and trying to put together the information. They compare the different products based on different attributes. Now after careful study of the competitors' brands available in the market, Clark started updating its products. It has done qualitative research to know the attitude and lifestyle of those customers buying shoes. It included distinctive younger flavors with comfort and quality in its products. Due to revamp in the product, company immediately moved into choice set of the customer. Now customer of Clark is evaluating its product with others. Due to the companies' effort to make its product according to latest trends and style with its old value of its brand of quality and cost effective prices. Longevity of brands depends upon consistent high quality, equal to or better than competitors, adapts to changes in customer taste and developed through changes in product formulation, packaging or positioning (Randall, 1997). It also revamped its sores completely where customer feel good buying. Through modification of its stores and its products demonstrations Clark's uplifts its overall images as modern, fashionable and forward looking brand which believes in improving with customer's needs and requirement. This new image and old brand name provided the customer's of Clark, a good value of money as well as developed loyalty to the brand. This immediately provided them best alternatives for buying Clark's product. Finally Clark customer arrives at a decision to buy Clark shoes after evaluating various attributes. After purchasing, Clark has to perform after purchase satisfaction surveys so that it must know the customers' problems and could amend accordingly. By doing so Clark can enhance its customer's loyalty as well as could continuously innovate and remain sustainable in the market. This complete strategy results in Clark's customer's reintegration with the brand. 3. Today customers increasingly expect higher quality and services and some customization. They perceive fewer real products differences and show less brand loyalty. They can obtain extensive product information from the Internet and other sources, permitting them to shop more intelligently. So marketers also are rethinking their philosophies, concepts and tools. They are focusing on transactions long-term profitable customer relationships. Today's customers are more lifestyle driven rather then depends on attributes. Today people want to consume products that fulfill their values and lifestyle aspirations. So companies have to understand customers' attitude and needs to match with their innovative products range. We know that companies generally depends upon unique selling proposition (USP) which emphasizes on its products uniqueness in various attributes like price, shape, quality etc. Customers were targeted on the basis of products uniqueness and this whole process is called unique selling proposition but the present marketing trends and customer needs have changed considerably. Customer wants more personalized services. This personalized services provides them more satisfaction, better experience and exclusiveness. This way companies establishes a relationship with the customer and this is termed as Emotional selling proposition (ESP). Now if we look at Clark's different method of selling proposition we find that initially Clark depends on its uniqueness of the products. It has provided its customer's individual design, comfort, premium quality and expert services. This uniqueness of products made Clark's marketing strategy successful but as it is a changing industry where customer style, needs, preferences change with time and being a fashion oriented industry footwear market has changed fast. Clarks has not changed its products with matching speed and results in failure. So its unique selling proposition practice fails in the later stages. After revamping the strategy Clark initially advertised its new range and values with slogan like "Life's one long Catwalk" which emphasizes predominantly on fashion. This ad campaign at different channels proved successful. Its advertisement of performing mundane tasks on the catwalk while wearing Clark's shoes has aroused enthusiasm within customer. Advertisement like walking the dog, having a barbecue, trying to balance a handful of drinks and cracking open a beer while sitting in front of Television with Clarks shoes relates customers with their daily life and link with their values and lifestyle aspiration. By emotional selling proposition, Clarks has been able to reach its customers effectively with long-term relationship. Now Clarks has repositioned itself with newer products. Basically positioning is the act of designing the company's offering and image to occupy a distinctive place in the target markets mind. The end result of positioning is the successful creation of a market focused value proposition, a consent reason why the target market should buy the product. Effective positioning extends well beyond advertising and promotion. Marketers should consider how the customer perceives the interaction and what the customer expects at each contact point. The next step is to formulate a strategy for managing the position at every contact point, including complaints handling. Marketers' needs to implement this strategy with training and guidelines to keep managers and employees focused on the communication and services requirements that support the desired position as perceived by customers. Firms must carefully monitor customer reaction and competitive activities for signs that the positioning or the way it is translated into day to day activities should be changed further when Clark position its products in the UK market it has to look into the present scenario of UK footwear market. UK's footwear market is expanding rapidly and consumer expenditure on footwear will increase by 3.5% in 2003 producing an additional GBP 166 m spend. Footwear market growth has been healthiest due to fashion orientation in recent years. So positioning into expanding market is easier than shrinking market. Clarks can place its products in various segments. As far as the competition in the footwear market is concerned, it is very fierce, specialist organizations of footwear market has already been to post stiff competition to Clark but non-specialists retailers are also keen to enter into the market. Apart from it supermarkets such as Asda and clothing retailers are already into the market and launching their products. So the numbers of competitors are increasing in the footwear market. If Clark has to position its product then it has to be effectively communicate with customers understand their requirement and needs to develop device the products according to their descriptions and requirements with style and current trend. These steps help Clark tremendously to position properly its products in the competitive market. 4. Modern marketing calls for more than developing a good product, pricing it effectively and making it accessible. Companies must also communicate with present and potential stakeholders as well as general public. The marketing communication mix consists of advertising, sales promotion, public relations and publicity, personal selling and direct marketing (Kotler, 1997). Marketing and Marketing communication mix is changing. New insights, new tools, new opportunities and new challenges are emerging as 21st century progresses. P. R. Smith and J. Taylor (2004) devised marketing communication plan called SOSTAC, which stands for Situational analysis, Objectives, Strategy, Tactics, Action and Control. Today communications is seen as an interactive dialogue between he company and its costumer that takes place during the preselling, selling, consuming and post consuming stages. There are 8 steps to follow in developing an effective marketing communication program: i. identifies the target audience ii. Determine the communication objectives iii. Design the message iv. Select the communication channel v. establish the communication budget vi. Decide on the media mix vii. Measure the results and viii. Manage the integrated marketing communication process. The 3 main marketing strategies adopted by Clark is: Selecting the target audience (Youth). Putting message according to their needs/emotions. Using various mediums/ channels to propagate message effectively. Now if we analyze the whole media campaign of Clark we find that its around changing the clerk's image of old fashioned, premium quality and individual designed products to fashion oriented, cost effective, casual and connected with day-to-day life style products. Its target audience is the persons between age group of 18-30 and 35-45. They are influencers and deciders and create a larger segment. Clarks revamp its stores with more modern structure and design and product displays help them to change the image of the organization. Now according to the needs of the Clark and to target specific younger fashion oriented segment, Clark's ad agency designed a message "Life's one long Catwalk". This message with visuals like models wearing Clark's shoes and performing every day tasks immediately connects people to Clark message. So message is attention seeking hold interest, arouse desire and elicit action. The message content is highly relevant and has rational appeal. Message structure is short and crispy and effective in all segments. Message with visuals of day-to-day work and people could correlate themselves with the products. Clark has selected various communication channels to carryout he message. It advertises the products (footwear) as fashionable, casual, stylish and above all fit for daily life. It uses various mediums to communicate with customers. It advertises through print media, posters, TV and national and satellite channels to reach out to maximum number of possible customers. It also revamps its showrooms and looks and display of products in it also communicates with customer the inherent meaning that Clark has changed its approach and tries to move with customer needs and demands. It has appointed a professional ad agency to carry out advertising campaign so that its message could reach the intended people effectively. Clark basically used advertising to reach geographically dispersed buyers through various mass mediums like banners, posters, newspapers and TV and satellite channels. Clarks has not used right marketing communication mix i.e. mix of 5 promotional tools. Clarks has not used tools like sales promotion, public relation, direct marketing, and personal selling. Clark's marketing communication strategy is unidirectional and only depends on advertising through various mediums. It is not using other marketing tools to reach out effectively to its customers. It has not devised any mechanism to measure the effect of its communication strategy on customers and therefore lacks feedback and scope for future improvements. The fragmented nature of mass marketing, the proliferation of new media and the growing sophistication of consumers, Clarks need to use wider range of tools and message through integrated marketing communication (IMC). Though Clarks marketing communication strategies uses only advertisement and implemented with well coordinated plan but lacks integrated marketing communication strategy for not using other marketing communication mix such as direct response, sales promotion and PR. Basically combining these disciplines are providing clarity, consistency and maximum communications impact through the seamless integration of discrete messages. Integrated marketing communication produces stronger message consistency and greater sales impact; it also gives someone responsibility to unify the company's various brand images and messages. Properly implemented. ICM improves the firms' ability to reach the right customers with right messages at the right time and in the right place (Shultz et al., 1992; Roman, 1995). References: 1. Assael, H. (1987) Consumer behavior and marketing action, Boston: Kent, Ch. 4. 2. Best, J. Robert (2000) Market-Based Management Upper Saddle River, NJ: Prentice Hall. 3. Engel, F. James, Blackwell, D. Roger and Miniard, W. Paul (1994) Consumer behavior, 8th ed., Fort Worth, TX: Dryden. 4. Green, E. Paul and Wind, Yoram (1973) Multiattribute Decisions in Marketing: A Measurement Approach, Hinsdale, IL: Dryden. 5. Kolter, P. (1997) Marketing Management: Analysis, Planning, Implementation And Control, 9th Ed., Upper Saddle River, NJ: Prentice Hall. 6. Randall, G. (1997) Branding, Kogan Page. 7. Roman, E. (1995) Integrated Direct Marketing: The cutting-edge strategy for synchronizing advertisement, Direct Mail, Telemarketing, and field sales, Lincolnwood, IL: NTC Business Books. 8. Schultz, D.E., Tannenbaum, S. I. and Lauterborn, R.F. (1992) Integrated marketing communications, Lincolnwood, IL: NTC Business Books. 9. Smith, Paul Russell and Taylor, Jonathan (2004) Marketing Communications: An Integrated Approach, Kogan Page. Total no. of words: 3055.(excluding references). Read More