Behaviors of customers and Environment Influence on Marketing - Essay Example

Running head: Running head: BEHAVIORS S AND ENVIRONMENT INFLUENCE ON MARKETING Behaviors s and Environment Influence on Marketing Insert name Insert Course Title Insert Instructor’s Name 22 November 2010 Behaviors of customers and Environment Influence on Marketing Marketing is defined as the management process that identifies, foresees and satisfies customers, with the aim of increasing profitability of a company. Generally, marketing requires understanding of customers and competitors in order to establish how the strategies of the firm will be formulated and implemented. Attracting customers is an integral part of marketing, but retaining them is even more important. This can be achieved through several means including understanding the behavior of current and future customers and the environment. In addition, recognizing changes in the market environment allows the firms to capitalize on marketing opportunities or prepare for threats in the market. Understanding of the market environment requires the firms to be conversant with current market trends, technology developments and competitors’ strategies. Therefore, this paper seeks to analyze customers’ current and potential behaviors and the market environment, as well as they affect marketing strategies. In order to successfully market their products firms need to understand both the behavior of current and potential customers and the influence of the marketing environment. In understanding the current customers’ behavior, marketers are able to do an analysis of their buying trends. This also helps to recognize the prevailing needs of the customer and hence produce products that satisfy target customers’ needs. It is also very important to be aware of the consumer buying process so as to influence the choice of the consumer. In doing so, it is paramount to understand that the buying process consists of several stages, all of which are of great interest to marketers (Thomas, 1995, p.248). The topography of buying i.e. what, where, how many, how often information aids the marketers on which of their products need more aggressive marketing or what period this may be done. In addition, the evaluations of consequences of consumer consumption of products gives incite on further buying patterns and repurchase, as this can help evaluate the effectiveness of present marketing strategies. According to Pedersen, Parks, Quaterman & Thibault (2010, p.334), a good understanding of current and potential customers enables a “firm to develop products and services that meet the needs of customers and develop marketing strategies that attract and retain customers.” This understanding also helps in distribution of products to the consumer at the right time, place and in correct quantity (Kurtz, MacKenzie, Snow, 2009, p. 61). Marketers also need to identify uncommitted customers, who use different brands and establish strategies aimed at capturing them as new target customers; indeed, having awareness of their needs, buying trends and choices can result to success in capturing them. Moreover, understanding the customers will avoid the risk of wasting resources in an attempt to bring satisfaction to those who either do not require the product or have different perception of satisfaction (Verma, 2008, p.213). Consumer buying behavior is classified as either psychographic or demographic (Bennett, 2009, p.123). Psychographics has three segments, timing of product adoption, shopping attitude and lifestyles while demographic primarily include income age and ethnicity. Basically, the understanding of psychographics informs marketers on how to present their products so as they are acceptable to customers. On the other hand, demographic helps marketers to learn about their current and potential customers and their needs. For a product to be successfully marketed, the influence of the market environment should be taken into account. In this case, “the marketing environment consists of external forces that directly or indirectly influence an organization’s acquisition of inputs and creation of output” (Pride, Ferrell, 2007 p.52). Some forces in the marketing environment are competition, economic trends, political, legal and regulatory, technology and sociocultural. These factors affect how a company’s products are received in the market. In addition, threat of substitute products, products from rival companies, pricing and income of the target group will determine the accomplishment of marketing. For instance, the prices of complementary products will determine whether a product gets established in the market or not and how long will this be achieved; an example is the drastic decline in purchase of diesel engines as prices of diesel rise, since customers would go for other sources of power whose running cost is cheaper. Firms that decline to update their products regularly are quickly being kicked out of the market. It is so with firms that produced vinyl long-playing records, typewriters, cassette tapes and pagers (Ferrelle, Hartline, 2008, p.104). This is also the case with motorcycles, which were largely used for transportation in the past but with new development of faster and more convenient means of transport, production of motorcycles is mainly for sporting purposes. In addition, the use of technology can be used by firms to market their products at a relatively lower cost. With superior technology, firms are able to market their products and services effectively since they are able to communicate with their customers who evaluate their products and give feedback. The economy determines the consumers buying power, the willingness to spent money and the pricing of products. Primarily, sources of buying power are income, credit and wealth, while the willingness to buy is influenced by expected satisfaction from the product and the financial ability of buying. A commodity price and value affect the willingness of buying, for example, some customers are willing to buy expensive Rolex watches even though there are cheaper ones (Pride, Ferrell, 2007 p.55). Fluctuation of the economy (prosperity, recession, depression and recovery) affects marketing of products. One case in point is that, during prosperity season, the ability of purchasing is high since unemployment rate is low and total income is high compared to recession and depression seasons when there is high unemployment. During recession and depression seasons, customers tend to buy only basic and utility good, hence advertising should emphasize on utility and value. In addition, firms should not cut down on marketing during recession, as it reduces their ability to compete. For instance, Pride, Ferrell (2007 p.55) observe that “during the Mexico recession, the coca-cola company continued marketing its products and they increased the Mexican share market by 4 to 6 percent.” Political influences in the nation where a company is operating affects the success of marketing their products. Generally, political influences may come from legislations and laws of the land. For instance, Google had to temporally withdraw their products from mainland China due government policies on censorship. Normally, most political forces are beyond the control marketers but some seek to influence the political forces. In addition, regulatory bodies govern marketing activities like advertising, packaging, selling and distribution and product development, marketers should be aware of these laws and comply. The demographics of a community, age, marital status, gender, race, ethnic and education determine customer behaviors. Primarily, there are gradual changes in social and cultural values hence change in consumers’ needs; studying these changes can assist marketers to predict customers’ needs in the future. As an illustration, the choice of peoples’ food and drinks has changed to more healthy products, organic, low fat and natural foods, thus marketers have to make their products in line with this development. A firm’s understanding of this diversity of its consumers enables it to alter its marketing strategies to align with the needs of the people. One case that is worth noting according to Ferrelle, Hartline, (2008, p.107) is that of cosmetics companies, which previously did not consider women of color in their product range; however, with increased number of women of color, cosmetic firms are now producing products suited for them. Although the above discussion advocates for the need of firms to understand the current and potential customer behavior and the influences of the market environment in order for their products to be effectively marketed, there are arguments that this is not required. To begin with, if a company is a monopoly in the market, it does not have to consider market factors like competition from other companies; for instance, a national power grid in some countries is the only source of power. Understanding the buying behavior of potential customers might not translate to proper marketing strategies which will result to convincing the potential consumers to use a firm’s product. There are other factors that determine whether a product will get established in the market other than customers’ behavior and market environment factors; example pricing of the product and financial capability of a firm of marketing. Customer behavior involves both the physical and mental behavior of individuals in the marketplace (Crane, 2009, p.58). The market is segmented, and understanding the needs and behavior of each of these sub-groups would not lead to products that can satisfy each. In addition, internal factors like the organization structure affect how the firm produces, markets and distributes its product, hence determining if their products are successfully marketed. Factors like government regulations are uncontrollable and difficult to shape or influence; therefore, understanding them cannot result to growth in the market share. In addition, the behavior and influence of the market environment are very unstable and the rate change is unpredictable, hence they are unreliable means of basing ones strategies. By understanding current and potential customers’ behavior, the marketers are able to predict how customers will respond to their marketing strategies, as well as how to select their target market. Conclusion In order for firms to establish their products in the market, a clear understanding of the current and potential customers’ behavior is important. Some of the behaviors that marketers should seek to know are why, when, how do the customers use or buy their products. Understanding of consumer behavior helps marketers to develop products, identify their target group, lay out strategies of reaching the target market and know how to position themselves in the market. Some environmental factors that affect marketing are economic growth, government regulations, technology advancement, sociocultural factors, and competition. However, prosperity, recession or a depression season determines the buying power of consumers and the pricing of goods. In addition, the level of competition influences the marketing strategies of firms. Prosperity, recession or a depression season determines the buying power of consumers and the pricing of goods. The level of competition influences the marketing strategies of firms. By understanding customer behavior, marketers are able to predict how customers will respond to their marketing strategies, how to select their target market, how to position their products to the target market, and developing products and services. However, in some situations, it may be unnecessary to understand the behavior of potential customers and the factors that influence the market environment since some strategies employed can not result to an increased market share. Works Cited Bennett, Anthony. The Big Book of Marketing. NJ: McGraw-Hill Professional. 2009. Crane, Frederick. Marketing for Entrepreneurs: Concepts and Applications for New Ventures. NY: SAGE. 2009. Ferrelle, O. & Hartline, Michael. Marketing Strategy. OH: Cengage Learning. 2008. Kurtz, David, MacKenzie, H., Snow, Kim. Contemporary Marketing. OH: Cengage Learning. 2009. Pedersen, Paul et al. Contemporary Sport management. NY: Human Kinetics. 2010. Pride, William & Ferrell, O. Foundations of marketing. OH: Cengage Learning. 2007. Thomas, Michael. Gower handbook of marketing. Aldershot: Gower publishing. 1995. Verma. Service Marketing: Text and Cases. New Delhi: Pearson Education. 2008. Read More