Consumer Psychology as a Social Psychological Sphere of Action - Term Paper Example

SERVICE DEVELOPMENT PROJECT Introduction When a company decided to produce new service that will be introduced in the marketplace, the management should consider the concept of strategic planning. It is important to not that before the service should be initiated, the management should create comprehensive and completive marketing and service development plan to be able to know the capabilities and the weaknesses of the new service that would be provided in the marketplace. In this manner, the service that will be developed is a car care service which is a rent-a-bike provided by a new market entrant in this kind of business. The company that would provide such service is OYBike. The company is considered as a new market entrant in this kind of business. Being able to realise the needs of the rent-a-bike, the company had decided to offer their services. The main goal of the company is to provide bikes for rent in France that will satisfy their target market and be known in the marketplace as a company that provide effective and efficient bike services. Market background Marking value It is important that the company will consider a good value proposition to its customers if it wishes to gain a competitive advantage over its competitors and be known in the marketplace. According to Piercy (2002) describes value for a customer, not only in terms of lower prices and higher quality, but more as a perception of one service overall benefits compared to the total cost of the service. These costs not only include price, but also the time, effort, and difficulties that may arise during the whole purchase decision and post purchase evaluation. Piercy (2002) states, those customers have become more 'sophisticated' as awareness of marketing activity has increased. The expectations of the customer have increased so much that traditional marketing perspective where the customer is easily satisfied has all but disappeared. Customers now want, and expect not only the core benefits of rent-a-bike services, but also secondary benefits such as, design, reliability, brand names, and various colours. Customers also now demand what has been referred to as, the augmented service. This would include, low energy usage, extended warranties, free delivery after purchase, or interest free credit. These secondary and augmented aspects of the service, amount to the overall superior value proposition given by the company to the customer. Treacy and Wiersema (1995) had categorized the buying motives of the customers in three different types on how to mark value. These include service leadership, customer intimacy and operational excellence. In this service, the company may use the customer intimacy value proposition for its customers. In this manner, the company will try to focus on the quality of their relationships with target market and provide complete solutions as their value proposition. The marking value that the company used is "PROVIDING EFFECTIVE AND EFFICIENT SERVICE THAT WILL SATISFY OUR TARGET MARKET." In order to create value, the company will consider service testing within the area of France. Key competitors Competitor's analysis is very important when a company will be considered as a new entrant within the market place. It is essential so that the company will be able to know their competitors and the possible strategy that they may use to outgrow such competitors and know the needs of the target market. However, it can be said that these industries do not solely focus on providing rent-a-bike in a specific target market. Hence, it can be said that OYbikes can have bigger opportunity to be recognised in the marketplace. Marketing segmentation Primarily, the context of the market segmentation for this company will be the Psychographics. Psychographics includes social class, lifestyle, and personality variables (Chiagouris & Kahle, 1997). The end result of using these variables is a psychological profile of each market segment. Issues also examined the customers' loyalties, habits and self-concept. Social class describes the level of enthusiasm of the customers in terms of taking good care of their cars, what they consider important about their immediate surroundings, their opinions on various issues, and their interests. For this particular service, OYbikes considers 7-45 years old men and women as their target market. This type of market segment has been chosen because the company believed that men within this age bracket provide more attention in taking renting bikes. In addition, the company also perceived that choosing a specific segment will help them adhere to their value proposition approach which is to have a customer intimacy. Advertisement, selling and distribution In the marketplace, different industries, especially those who provide car care services usually used the concept of advertising to promote their services. In this manner, the use of video and print advertisement is always considered in the marketplace. In addition, because of the emergence of the internet, different industries that offer bike rental services also uses online marketing strategy by having their own website to promote their business. These promotion and communication strategy will tend to meet the consumers form different places everywhere, especially the target market of the company (Appendix 1). In terms of selling and distribution the companies that offer the same services in the marketplace has bee able to use distinctive distribution methods. The competitors in the market use their website to distribute their services. Since, OYbikes is a new company; The company will use direct distribution channel through it sales representatives. Pest analysis The analysis of the marketing environment where Rent-a-bike will be introduced will be achieved using PEST Analysis. The Business environment is generally divided into four sections, these include the political, economic and social technological environment in which national and international organisation operate at a specific level. The four different environments are often referred to as PEST and allow a PEST analysis to be conducted this allows the organisation to review and consider the environment in which it operates. The four PEST factors have had a big influence and pressure on different organisation, especially for those who are considered as a new entrant in the market. Political Firstly the political environment concerns the role of the government and its affects in an organisation it also includes the extent to which the government intervenes in the economy. The political condition in France can be considered as an open market. In this manner, the government of France is willing to accept new investors or company that will operate within France. In addition, the government of France also provides their own version of corporate policies which should be followed by different organisation. In this manner, the pressure is on OYbikes in terms of ensuring that they always have legal actions in their business operations. Economical The FRANCE market is the target of OYbikes. In this manner, it is important that the economy of FRANCE must be analysed. FRANCE has the 5th largest economy in the world in line with market exchange rates, it is also considered to be the 6th largest in terms of purchasing power parity exchange rates, illustrating a high mark of income inequality and highest poverty rates than other large economies. Hence it can be said that there is a bigger opportunity for a new company to become successful in operating in FRANCE. The continuously growing market economy of FRANCE has been a good indicator that the new company will be known in the marketplace. Social In terms of social condition, it can be said that the FRANCE market is now maturing. The social condition of FRANCE is known to have consumers who are willing to accept new entrants as long as it meets their needs for a certain service or service. The social condition of FRANCE is also considered to be multicultural affecting the behavior of each target market. Technological In terms of technological aspect, FRANCE has been able to utilise advance technology. This includes their acceptance of information technology especially for business operations. This aspect will give a new company like OYbikes to grow in the market and make use of state of the art technological facilities to enhance their service. Buyer's behaviour In today's business world, the value and importance of customers is not something that should be set aside by companies. Marketing plans and strategies would be incomplete without paying much consideration to the customers. Customers will and should always be a part of the agenda in any marketing plan of any company. Because of the implications for profitability and growth, customer retention is potentially one of the most powerful weapons that companies can employ in their fight to gain a strategic advantage and survive in today's ever increasing competitive environment (Lindenmann, 1999). Consumer behaviour has been defined as the "acquisition, consumption and disposition of services, services, time and the concepts by decision making units" (Jacoby 1975, 1976). It can be said that the consumer of rent-a-bike in FRANCE market has increased since it was introduced in the market by the existing company. More and more people who want to have cars which will still look new in the future are willing to purchase this kind of services in the market. In this manner, rent-a-bike services can be considered as marketable because of the willingness of the target market to avail the service. Marketing Strategy The marketing concept has been defined as 'the key to achieving organizational goals' and the marketing concept rests on 'market focus, customer orientation, coordinated marketing and profitability'. In a profit making business the firm obviously has to try and achieve this level of customer satisfaction as a way of staying ahead of the competition and making a profit. In doing so, a company must be able to identify an effective and efficient marketing strategy for the service. In the case of OYbikes, the marketing strategy that can be used by the company position their service in the market place will include the use of advertising. To be able to let the target of the company know the service that has been developed, the company will use television advertisement in which bike renters are there to endorse the service. Herein, it will show that the service can be used not only as a rent-a-bike but for wheels and interior as well. In addition, testimonials of the customers who already avail the services will be included. Showing that the versatility and efficiency of the computer. The company will also use Print Advertisement by allowing the consumer to avail rent-a-bike services in discounted. And lastly, the company will strategically make a deal for different large retailers to sell the service for a smaller selling price than its competitors alike. Marketing plans Traditionally, marketing has been utilized by the private sector in decisively increasing the capabilities of an organization. Marketing can be considered as one of the most important element underpinning successful business creation (Hills, 1994). Perhaps because of its complex applications, marketing has been defined in a variety of ways (Sheth, Gardner, & Garrett 1988). The marketing concept was first promulgated in the late 1950's (Elliot, 1990). The importance of marketing concept incorporates oft-repeated elements such as: customer orientation; integrated marketing efforts; and resultant profitability (Elliot, 1990). Part of a marketing strategy is the utilization of the marketing mix. The marketing mix principles is controllable variable that is why it can be adjusted on a frequent basis to meet the changing needs of the target market and other dynamics of marketing environment (McCarthy, 2004). In relation to marketing plan, marketing mix includes both short term and long term strategies makes for a more profitable marketing mix. Long term strategies build brand/company awareness and give sales revenue a permanent, gradual boost. Short term strategies create a temporary, immediate revenue boost by giving buyers an incentive to purchase. By implementing both long and short term strategies, you can attend to immediate sales goals while building your business reputation and goodwill (Kyle, 2004). (See Appendix 2) 1. Services The main service that will be developed and introduce is OYbikes. The service will be different in other competition in a way that the company will maximize quality but minimize the cost to be affordable for all types of consumers. Through the use of demographics and psychographics, all needs and demands of target market will be known by the company in order to provide the customers their needs in the utmost time. The services will be available at the store located at the central market place for consumers. 2. Placement/Distribution To be known in the market place, the service will be distributed directly to its clients and consumers through its main branch/store and through the on-line marketing at the company's website. And to be known internationally, one of the strategies that the service will utilize is going on a joint venture with distinguished rent-a-bike services. The company will also find a rent-a-bike Industry Alliance in the FRANCE other parts of Europe. The website will be available anytime so that the consumer will avail their needs the soonest possible time. 2. Price Pricing Strategy One of the advantages of the OYbikes is when it comes to its pricing technique. In order to be known into the marketplace and as a new entrant, the company will provide its target market with an affordable cost while providing them with high quality services. The company will be given the customers and clients a price that is lesser than its competitors so that the consumer will be encourage buying Super Rent-a-bike. Although, the company will provide lower cost, the company will ensure that the cost tagged to all its services is enough to give profit to the whole company. The following table will show the pricing strategy to be utilized by the company as it first enters into the marketing arena. Table 2 Pricing Strategy Services Cost Super Rent-a-bike/hour 8.95 Super Rent-a-bike/12 hours 32.95 3. Promotion/Communication To promote the company and its service, the company will use video advertisements, print advertisements and the concept of e-marketing. These promotion and communication strategy will tend to meet the consumers form different places everywhere, especially those target markets. Moreover, since the trend in the market place today is the usage of e-marketing, the company will provide a website that any client can access. E-marketing is also known to be the online marketing strategy utilized by different company whose objective is to be the best company in their field. Thus, the OYbikes will create its own website (www.OYbikes.com). The main objective of utilizing e-marketing strategy is to keep in touch to different internet users to be able to attract more clients and consumers. All in all, through the website, whether the user is a customer, employee, stockholders, vendors, retailers or end customers, the true strength of e-marketing is acceleration of the business portfolio. Swot analysis A. Strengths Management The main strengths of OYBike are the ability of the management to foresee the possible demands of the target markets in terms of car care services. Employees/Sales Staff The employees including the engineering department are exemplary when it comes to designing new car care service. As can be seen by the features of its service (Super Rent-a-bike), it has a tough competitive advantage in its engineering skills and capabilities. The knowledgeable employees are a leap against its competitors. In this manner, the company will gain loyalty from the consumer and the whole organization will have a good reputation. Further, the sales staffs of the company have the ability to think o of the best ways in marketing the services of the company. B. Weaknesses Financial While after the planned fund raising to rise the capital needed to make the company starts its operation, the OYbikes will be considerably less well capitalized than some of the existing competitors. With this, the company will have a difficulty in financing the advertisement and promotion campaign which is essential if the OYbikes will attempt to have a space at car care distributors and retailers in the local or global market place. Lack of Service Continuity Due to law capital, the company could not have the assurance of service continuity to the market place due to the existence of other tough competitors. In addition, C. Opportunities Target Markets Since there are many male car owners in FRANCE whose age ranges from 18-25 years, the company's rent-a-bike will be highly demanded in the market place. The affordable costs and quality service that would be provided in the target market will gain respect from its consumers and attract more consumers and clients. Possible Merges and Ventures and International Shift The company will have a chance in terms of merges and acquisitions of other retailers and resellers of its rent-a-bike service. Further, the company might also have the opportunity to provide its services and services to the target market in the international arena together with its acquisitions. C. Threats Price Wars Competitors Since rent-a-bike service is not new in the market place there would be a possibility that the emerging and the existing companies will have a price wars which may affect the operation of the business and may lead to its major downturn. Placement/ Channel Distribution Not only the continuity of the services but also the Placement or Channel distribution will also be a threat to the company, since there are times that the companies who first came to emerge in the market place have a greater access to distribution channel which would serve as a threat to new emerging business. Conclusion The above discussion has evaluated the marketing entry plan of the new service developed by a new company (OYbikes) as an emerging car care company in FRANCE. Through this analysis, the company has utilised some marketing concept to be able to be competitive in the business world and to make their service be marketable. It can be concluded that the new service developed has a big opportunity to conquer the marketplace if the strategy discussed above will be used effectively and efficiently. Bibliography Chiagouris, L and Kahle, L 1997, Values, Lifestyles and Psychographics, Lawrence Erlbaum Associates: Mahwah, New Jersey: Elliot, GR 1990, The Marketing Concept - Necessary, but Sufficient An Environmental View. Graduate School of Australia, University of Melbourne, Australia. Hills, GE 1994, Marketing and Entrepreneurship: Research Ideas and Opportunities. Quorum Books, Westport, CT. Jacoby, J 1975, Consumer psychology as a social psychological sphere of action. American Psychology 30(10):977-87 Jacoby J 1976, Consumer psychology: an octennium. Annual Review Psychology 27:331-58 Kyle, B 2004, Guide to a profitable marketing Mix. Marketing Plan. Lindenmann, W 1999, Measuring relationships is key to successful public relations. Public Relations Quarterly, 43, (4) 18+. McCarthy, 2004, Marketing Mix 4 P's Model. Value Based Management Piercy, N 2002, Market-led strategic change. 3rd Edition. Heinemann: Oxford, Butterworth. Sheth JN, Gardner, DM and Garrett, DE 1988, Marketing Theory: Evolution And Evaluation. John Wiley & Sons: New York: Treacy, M and Wiersema, F 1995. The Discipline of Market Leaders. 3rd Edition. Rocco, Rio De Janeiro. Appendices Appendix 1 Figure 2: Marketing Communication Process Source: Borden, 1965. Appendix 3 Marketing Mix Figure 3: The Concept of Marketing Mix Read More