Improving and Change Gyms Users through Consumer Behavior - Assignment Example

? Marketing: Consumer Behavior By Table of Contents 0 Introduction Understanding of consumers is an important step towards improving marketing strategies of an organization. Psychology of consumer thoughts, reasoning, feeling, and choosing coupled with influence of environment on buying decisions are amongst the important aspect that business organizations need to understand in order to develop efficiently and effective marketing strategies. Many definitions attempt to clarify the concept of consumer behavior. A more direct definition is that consumer behavior is process associated with individuals, organizations, teams, or even groups towards selection, securing, usage, and disposal of goods and services. According to Hoyer and Macinnis (2009, p. 1), consumer culture that explains consumer behavior includes amongst other things consumer diversity, social class and household influences, psychographics entailing lifestyle, personalities, and values as well as social influences. Businesses and organizations should strive to understand consumer’s behavior in order to tap the positive attitudes and change the negative attitudes to suit their products. Bill is a proud owner of a chain of GYM centers meant for enhancing users’ fitness. These chains of gym centers focus on market (Hoyer & Macinnis, 2010, p 10). Bill is interested in building user loyalty hence be sure of their registration annually. In addition, the business the business would wish to apply the created loyalty into initiating customer relationship marketing. What’s more, this chain of gym centers have been experiencing high number of customers that register but fail to come, those that attend irregularly, as well as those that do not renew their registration (Kardes, Cronley & Cline, 2010, p. 15). The following is a document that will help solving Bill’s problems through outlining various ways of enhancing users’ loyalty, improving and changing gyms’ users through consumer behavior, developing better ways to reduce customer defections, initiating customer relationship marketing from developed loyalty, and benefits the business will obtain resulting from focusing on changing users-consumers behavior. 2.0 Consumer Behavior Hoyer and Macinnis (2009, p. 3) defines consumer behavior as the holistic decisions that consumer makes regarding acquiring, consuming, and disposing of goods, services, time, as well as ideas over a time. Consumer behavior is an important aspect for Bill and his chain of gym centers to understand thereby providing services that conform to users’ needs and wants. Provision of such services is the only secrete of attracting more users as well as reducing defection and irregularity of attendance. Bill needs to understand reasons as to why there is irregularity in attendance, defections, and the fact that most users do not re-register after the expiry of their sessions (Kardes, Cronley & Cline, 2010, p. 15). There is need also to identify various factors that influence such behaviors as well as the changing factors within the society for instance, increase in lifestyle diseases hence the need to regularly engage in exercises to reduce weight and other bodily aspects attributable to such lifestyle diseases. The following describes how Bill and his chain of gym centers will improve and change users’ attitudes and perceptions through consumer behavior in order to tap more sales and profitability. 2.1 Improving and Change Gym’s Users through Consumer Behavior Improving and changing of gym users is effectively attainable through consumer behavior. One of the ways of improving and changing users’ of the gym through consumer behavior is by creating and developing marketing mix that satisfies users. Bill’s chain of gym centers is market oriented hence the need to have an effective and efficient marketing mix that provides satisfaction to the users. However, it should be noted that developing a marketing mix that fully provides user satisfaction is cumbersome and challenging. Bill should therefore analyze what, where, when, and how users enjoy the gym facilities (Hoyer & Macinnis, 2010, p 10). In this regards, Bill will be able to predict effectively users’ response to their marketing strategies. Marketing strategies or mix developed by Bill towards the chain of gym centers should focus on personal, psychological, and social aspects of consumer behavior. Personal aspects of consumer behavior are directly congruent to unique personality traits. Some of these personality traits include demographic factors such as sex, race, and age. Other personality aspects of consumer behavior that Bill needs to focus on are members responsible for making purchasing decision. In this regards, there is need for Bill to identify the composition of users in terms of sex, race, and age (Hoyer & Macinnis, 2010, p 10). Identification of users’ composition will be a vital step in identify persons responsible for making purchasing decisions. For instance, if the composition were made of adults then it means that users are responsible for making buying decisions whereas when users are composed of children this would mean that buying decisions is entirely from parents. Identifying group or persons responsible for buying decision will be the first step in enhancing marketing mix and strategies that will result into user satisfaction (Kardes, Cronley & Cline, 2010, p. 15). In most case, business organizations need to identify various groups involved in making decisions in order to address their concern. With respect to psychological aspects of users, Bill’s chain of gym centers management should embark on a mission identifying utilities derived from the gym by the users. Utility derived also known as the motives of using gym facilities is a better way of enhancing provision of services to users conforming to their needs and wants. Developing a marketing mix follows the Maslow’s hierarchy of needs in relation to users (Foundation of the Hospitality...). In this connection, it is important to identify different needs that users of the gym centers would wish to satisfy hence providing resources and facilities conforming to the same. For instance, some of the users may be using gym centers for bodybuilding while others are for aerobics (Kardes, Cronley & Cline, 2010, p. 15). Bill should therefore provide facilities that will help bodybuilders attain their objectives as well as aerobics to fulfill their desires. Consequently, there will be effective and efficient marketing mix or strategies that entirely rely on consumer behavior to provide positive services. Lastly, Bill and his chain of gym centers may employ the idea of social aspects affecting consumer behavior in order to provide customized services. Social aspects may include factors such as opinions from different individuals and organizations, effects of social class, roles and family influences, reference groups, and culture. Bill should identify how users are affected by social class and family influences in order to have a deeper understanding on the kinds of services to provide (Hollmann, 2008). May be there are some users who feel that gym facilities are below standards as per their social class. Others may defect to other centers providing the same services due to influence from families and their peer groups (Hoyer & Macinnis, 2010, p 10). It is therefore vital for Bill to identify the factors that affect consumer behavior hence develop a more inclusive and conclusive marketing mix and strategies applicable in reducing experienced problems. Following the above overview of personal, psychological, and social aspects of consumer behavior, Bill and his chain of gym centers may develop proper, efficient, and effective marketing mix that satisfy all users. With such satisfaction, the chain of gym centers owned by Bill will experience little or no problems regarding user defection and irregular attendance. 2.2 Changing Users’ Attitude towards Purchase Attitude is one of the factors that define consumer behavior towards given products. Consumers having positive attitudes towards a given product will make buying decisions that favors such products while those with negative attitude make buying decisions against the product. According to Reichheld (1996, p. 58), attitude is defined as lasting general evaluation that is done by individuals towards a particular product or activity. In most cases, attitudes involve knowledge, liking, and disliking of a particular aspect or product coupled with strong feelings. Notably, attitudes are lasting but changeable after an insight into an individual’s behavior. Attitudes direct behavior of consumers towards or away from various products (Foundation of the Hospitality...). In this case, Bill’s customers may be experiencing negative attitude toward the business hence the need to change attitude to encouraging making buying decisions corresponding to gym centers’ products and services. The main cognitive component of consumer attitude that Bill should work on in order to reduce various problems facing his chains of gym centers is beliefs. A consumer belief is a psychological relationship between a product or service and its attributes of that of producer. Once a stronger relationship between product and its features is established then Bill will enjoy benefits of increased number of uses hence increase in sales and profitability (Hollmann, 2008). The main question is how to change weak relationships between products and their features to stronger ones. Bill can employ different strategies in attempt to changing consumer beliefs and by extension their attitude to suit his products and services. Some of these strategies include the following: Positioning of the products and services regarding the product attributes and consumer beliefs, intangible attributes and prices, and applications as well, Engaging users in defining various aspects of applications, products, services, and facilitations that enhance positive response from users, and Applying Fishbein Model in functional attitude that states, effective responsible to a given product is a function of strengths or weaknesses of consumer’s beliefs as well as his or her evaluation of or various features of product in question. Moreover, Bill should also focus on enhancing the emotive component of attitude; affect. Most users will defect to other facilities due to affective response. Affect refers to different ways that users of gym centers will feel in response to their services and products. Affect comprises stimuli knowledge and evaluations. Affect component can also be enhanced through Fishbein Model of reforming attitudes towards purchase and not away from the same (Hoyer & Macinnis, 2010, p 10). Following Fishbein Model, Bill may be make adjustments in service provision that develops users’ affective response while enhancing ego and expressing value. 2.3 Customer Defections and Customer Recovery Customers’ defection is one of the main problems faced by Bill and his chain of gym centers. According to Jones and Sasser (1996, p. 25), customer defection posses great challenges to various business organizations due to lack of insights into reasons and cures for customer exodus. In any case, most management teams do not have time to measure customer defection and even make little effort in preventing customer exodus or even use defections as a guideline and direction for improvement (Reichheld, 1996, p. 111). One users defect from Bill’s gym centers it is a clear indication that quality of services within such facilities is deteriorating hence reducing cash flow from users even when there is replacement new users. Since user defection is a problem within Bill’s gym centers, there is need to engage in user recovery methods and strategies. Some of those methods, techniques, and strategies employable by Bill in order to recover his users include the following (Jones & Sasser, 1996, p. 39): a. Bill should tract the users who defect, attend irregularly, or do not register subsequently after the first registration. This is a way of finding some of the reasons behind such behavior hence develop proper measures of dealing with the same. b. After finding out users with such behavior, Bill should analyze reasons obtained whilst looking for common denominators, patterns, and trends within such groups. Through this, Bill will be able to know source of dissatisfaction hence make appropriate adjustments. c. In addition, Bill may identify early warning signs that lead to user defection, irregularity of attendance, and failure to register subsequently. d. There is need to identify some of the defected users who for some time had been loyal and win them back through various lucrative and influential packages. e. Winning back ‘campaigns’ should be regular to ensure that defecting customers are not left to have a taste of services of other facilities lest they be lost forever and this may also lead to poor branding and imaging of the firm for poor quality services. f. Bill will then have to follow up with won users to help in winning other defected users. 3.0 Loyalty and CRM Customer relationship marketing is directly congruent to loyalty of consumers. Customer relationship marketing according to Brink and Berndt (2010, p. 25) refers to the process or practice where businesses and organizations use marketing activities in order to establish, develop, as well as maintain a fruitful relationship with customers. Loyalty on the other hand refers to devotion of customers to a particular brand or product (Foundation of the Hospitality...). Therefore, through CRM a firm may enhance loyalty of customers hence attaining high sales and profitability. The following diagram describes various aspects of CRM. Figure 1: A Diagram describing various aspects of CRM Courtesy of 3.1 Progressing from Loyalty to CRM Bill in a bid to enhance customer loyalty may engage CRM aspects. As described in the above diagram, CRM’s main aspects are sales, marketing, support, and orders. When Bill receives orders regarding specific sessions in the gym centers, there is need to deliver the right product or services. From loyal users of the gym centers, there is need for Bill to increase management of cases that may arise, conducting of trainings amongst users, and providing appropriate services (Brink & Berndt, 2010). In addition, there should be running of campaigns and accessing of leads from loyal users. Through these services, there will be an extensive, inclusive, and conclusive CRM within Bill’s chain of gym centers and this is likely to create opportunity for more customers. According to Brown (1952) there are four main categories of loyalty; undivided, divided, unstable, and no loyalty. Undivided loyalty refers to situations where customers focus on one particular brand or product while in divided loyalty customers have options for a given product. Unstable loyalty on the other hand is easily changeable by promotional services such as advertising. Therefore, by identifying the category of users’ loyalty, Bill will be able to provide effective customer marketing relationships hence achieve the merits of increased number of users and profitability growth (Brink & Berndt, 2010). For instance, amongst users with divided loyalty, Bill may engage in conducting trainings for them under the umbrella of support as one of the aspects of CRM. 3.2 Similarities between Loyalty and CRM There is a significant correlation and similarity between loyalty and CRM. Firstly, both loyalty and CRM are customer-based hence may be used to influence their buying behavior. CRM concentrates in creating fruitful relationships that will make consumers to be involved in using the gym services whereas loyalty defines that such users will only use the facility and not any other (Foundation of the Hospitality...). The second similarity between CRM and loyalty is the fact that they are both involved in either attracting and/or retaining customers. Most organizations will build customers’ loyalty with sole reason of retaining them in the business. In addition, some organizations provide customized services through CRM in order to either attract or retain customers or achieve both objectives. 3.3 Differences between Loyalty and CRM Despite the fact that loyalty and CRM are directly related hence the discussed similarities, there are differences that exist amongst them though very narrow since they are more connected and related than unrelated. The following discussion provides behavioral and psychological differences between loyalty and CRM. 3.3.1 Behavioral Differences On behavioral differences, loyalty portrays users of Bill’s chain of gym centers who will always use the facility despite the claims that there has been reduction on quality. CRM on the other hand CRM is a process and practice meant to initiate of develop loyalty further. In this case, CRM is a process of practice whereas loyalty is a trait developed in customers that influence and determine their buying behaviors (Brink & Berndt, 2010). Whereas CRM is from the business side that attempts to entice consumers, loyalty emanates from consumer side hence the behavioral difference existing between these two concepts. 3.3.2 Psychological Differences Psychological, loyalty involves the idea of customers employing their cognitive needs and requirements that accrue from a product to make a buying decision. CRM on the other hand is a practice meant to play around with consumer’s psychology through provision of customized services in order to enhance their usage of a given facility in this case, Bill’s chain of gym centers (Foundation of the Hospitality...). Another psychological difference between loyalty and CRM stems from the fact that the former is planted after the use of a commodity while the latter can take place during the course of usage or convincing an individual to use the gym centers’ facilities. In this case, the former has its cognitive behavior already defined while in CRM businesses are struggling to influence and define cognitive behavior on consumers. 4.0 Changing Users’ Needs The contemporary business environment is highly characterized by dynamisms hence the high possibility of changing users’ needs and wants. Consequently, Bill and his gym centers must always be up dated regarding changing needs and wants of users as explained in the following discussions. 4.1 Mutual Benefits gained from focusing on Changing Users’ Needs With dynamic business and general environment, there is no doubt that mutual benefits gained from focusing on changing users’ needs are enormous and non-regrettable. General environment dictates health requirements as well as consumers’ purchasing power. For instance, with increased lifestyle diseases many customers go to gym centers for purposes of either reducing their weight or keeping fit physically to avoid such infections. On a different perspective, changes in economic status due to economic recession are likely to influence consumers’ purchasing power (Foundation of the Hospitality...). Consequently, Bill should concentrate in identifying various aspects of changes in users’ needs hence developing effective and efficient products to meet the same. Bill will benefit enormously when focus is on changing users’ needs. 4.2 Gym’s Centers Benefits During the process of providing services to users, Bill expects to obtain some return in terms of increased sales and profitability. In any case, Kardes, Cronley and Cline (2010, p. 35) confirm that business unless non-profit making organizations have the sole reason of making profits. Microeconomic principle states that a business or an organization engaged in provision of different services should minimize its costs in order to maximize its profits through improved and enhanced sales volume. In this regards, Bill should ensure that costs incurred in providing various services to users are significantly low in order to enhance profitability of the firm. Through increased profitability, it becomes easy for Bill to engage in growth and expansion. 4.3 User’s Benefits Gym centers have benefits that users derive hence satisfying their needs, wants, and objectives. It will be vital for Bill to identify various benefits derived from his chain of gym centers hence provide avenues for enhancing such services even more. Increasing users’ satisfaction by providing relevant facilities and services, which satisfy their needs, wants, and objectives will be beneficial not only to users but also to Bill. Moreover, businesses that cannot enhance the quality of their services are better off closed than remain in operation. The main reason that motivated Bill to put up such facilities was to provide some specific health benefits. In this regards, it will be useful for the management to concentrate in providing and enhancing various services that meet the need of users. 5.0 Conclusion Consumer behavior is an important aspect that business organization should understand. Buying decisions of consumers’ hence sales volume and profitability are directly affected by consumer behavior. There are emotive and cognitive factors that affect consumer behavior. Some of these emotive and cognitive factors include attitude, affect, and loyalty. These factors are useful in conducting a proper analysis of how an organization can develop effective and efficient marketing mix and strategies to enhance sales volume and profitability. In any case, such marketing mix and strategies are influential in reducing different organizational problems such as defections. Though loyalty amongst consumers is a tricky aspect of consumer behavior, it can be developed and used to develop customer relationship marketing. CRM is as important as consumers’ loyalty hence should be given due considerations while developing marketing mix and strategies. Lastly, there is serious need for organizations such as Bill’s chains of gym centers to consider users’ needs and the dynamism surrounding the same. Bibliography Brink, A., & Berndt, A, 2010, Relationship Marketing and Customer Relationship Management, Brown, George H. (1952). Brand loyalty – fact or fiction? Advertising Age, 23 (June 9), 53–55. Foundation of the Hospitality Sales and Marketing Association International, 2006, Customer Relationship Marketing (CRM) and customer loyalty: Technology, process, and the human touch best practices initiative, viewed 20 November 2010, http://www.hsmai.org/MarketReview/MR_Fall_06%20CRM%20insert.pdf Hollmann, T., 2008, A process theory of customer defection in business-to-business relationships, Proquest, Arizona State University. Hoyer, W., & Macinnis, D., 2010. Consumer Behavior, South Western Cengage, Mason, Ohio. Jones, T., & Sasser, E., 1996, Why satisfied Costumers Defect, Harward Busines Rewiev, Vol. 73, Issue 6, pp. 88–99. Kardes, F., Cronley, M. & Cline, T, 2010, Consumer Behavior, South Western Cengage, Mason, Ohio. Reichheld, F., 1996, The Loyalty Effect, Harvard Business School Press, Boston, Massachusetts. Read More