Satisfaction: A Behavioral Perspective on the Consumer - Essay Example

Introduction With the advent of globalization, marketers have had the opportunity to market to a global audience from many countries and cultures. Products are no longer the traditional goods and services and instead the emphasis is on brand building and marketing brands as part of a comprehensive marketing effort to reach out to consumers. In this context, consumers consume products not only for their intrinsic value but also as status symbols that are supposed to confer perceived and notional benefits like increased social recognition and to move up the social ladder (O’Boyle, 2011). Hence, the concept of status consumption as a process of consuming goods and services by status conscious consumers has gained traction in recent years. Though status consumption was always a trend, the fact that the advent of the global village with its mass manufactured visions of happiness has meant that brands and products that they represent can have uses other than the basic need gratification for which they are made (O’Cass & McEwen, 2010). The paper looks at the concept of status consumption and how a marketer might be able to use status to market a product type or specific brand. Consumption Motives To start with, there are many definitions of status consumption. For the purposes of this paper the following definition would be relevant: “Status consumption relates to the consumers’ behavior of seeking to purchase goods and services for the status they confer, regardless of that consumer’s objective income or social class” (Eastman et al., 1999; Bourdieu, 1989). It is worth noting that status consumption often involves expensive goods and services and that consumers use these goods and services on special occasions and events rather than on a regular basis. One reason for the proliferation of goods used as status symbols is because of the mass marketing techniques of marketers, many products have become commodities and hence consumers have an innate desire to consume goods and services that are perceived to be superior in value. This is the need that astute marketers tap into when marketing goods that they label as premium or exclusive. To take this point a bit further, recent nomenclature in advertisements and marketing collateral for the so-called status products tends to highlight the “exclusivity” of a particular good or service and to connote that by consuming that good or service, the consumer is being conferred a special status in society (Turunen & Laaksonen, 2011). It has been noted by many researchers that status consumption defies the concept of the rational consumer who buys goods and services for economic reasons alone (O’Cass & McEwen, 2010). Given the fact that consumption of goods and services for status purposes is intrinsically driven by a need to achieve superior status in society, there is no rational basis for the exorbitant premiums that consumers pay for these goods. To take examples, the premium paid on Swatch Watches, Calvin Klein apparel, Johnny Walker Whiskey etc in no way justify the economic value of such goods. It is only in the minds of the consumer that the perceived social status that they confer can be felt. Perceived Values Another aspect of status consumption is that it follows the “trickle down” theory wherein people belonging to higher income levels consume products and services that reaffirm their standing in the society and to which people belonging to lower income levels aspire to. The important point to note here is that the aspirations of the people in the lower income levels are to achieve the status of those in the higher levels and hence each class tends to emulate the ones above leading to a trickle down effect of the product or service on the class consciousness of the consumer. Apart from the use of celebrities, marketers also rely on reference groups which portray an image for consumers to refer to as a benchmark that can be aspired to by consuming the product. Hence, marketers often use ads featuring settings of a particular class to signify that consumers in other classes can achieve this status in society. Continuing in the same vein, it needs to be noted that a good that is perceived as a status good in one country may not be perceived that way in another country(Woersdorfer, 2010). This is the result of income disparities between countries which makes a good like GAP apparel a status good in countries like China and India whereas it is a mass market good in the US. This is one reason why marketers urge governments in the developing countries to open up their markets as they can leverage on the income differential to market more of the goods that may be losing their appeal in their home countries (the developed ones) (Koubaa, Ulvoas, & Chew, 2011). Of course, one cannot extrapolate this trend to all goods since Johnny Walker Whiskey is as much of a premium product in the UK as it is in India (Shukla, 2010). Similar is the case with Cigarettes which have some brands that are premium in all countries. The point here is that a nuanced approach towards status consumption is needed to understand this complex and multifaceted phenomenon that is both fascinating to study and interesting to analyze (Shukla, 2010). It was mentioned in the introduction that status consumption defies the categorization of the consumer as a rational economic actor where rational buying behavior on the basis of economic value alone is the guiding principle. Instead, the consumer of status goods is an individual who has either reached a position in the social hierarchy where economic reasons are not the sole criterion for spending or is someone who aspires to such position and hence spends accordingly. It is this tiered classification of consumers that marketers reach out to with their goods and products and it is common to see status goods being marketed to each level of the marketing food chain. A case in point would be the marketing of sachets of cosmetics in smaller denominations so that women who cannot afford the full size products can avail of the smaller sachets and yet participate in the thrill of status consumption (Roy & Chau, 2011). As mentioned elsewhere, the field of status consumption is fascinating because of the contradictions living together with the commonality which is what human experience in this world is all about. Opportunities and Challenges for the Market The specific brand chosen for analysis is the BMW automobile (Bavarian Motor Works) produced in Germany. The reason for choosing this particular brand over other products is the fact that BMW as a brand is specifically targeted towards the status conscious consumer in ways that few other brands are marketed and this makes the task of analyzing that much more interesting. For instance, some models of the BMW are perceived to be ultra-luxury models and hence are “pushed upward” and the other models that are considered to be lesser in the status scale are “pushed downward” (Anurit & Newman, 2006) . This segmentation helps the marketers of BMW to differentiate between those who buy the car exclusively as status symbols (the customers who do so clearly “want” status symbols) to those who buy the cars for utility as well as status purposes (the customers who “need” cars that would also double up as status symbols) (Oliver, 1997). The difference in these categories is what makes BMW segment its cars according to the variables described in the next paragraph. Research into consumer behavior of luxury cars has found that there are 15 variables at work when customers choose brands like BMW. They are: (1) quality (2) reliability (3) durability (4) security (5) safety (6) performance (7) efficiency (8) technology (9) handling (10) value (11) style (12) prestige (13) comfort (14) status, and (15) visual impact. The first nine variables are in the ‘objective’ category (Anurit& Newman, 2006). The last six variables are in the ‘subjective’ category. The segmentation of cars among the luxury segments depends on how each of these objective and subjective variables influence the consumer when choosing a particular brand of luxury car. Marketers of goods perceived as status ones ought to be aware of the fact that they are marketing brands that are not only to be used as possessions but as wholesome experiences which elevate the consumers’ standing in society. The simple act of consuming a status good goes beyond the traditional emphasis on the act of consumption and instead is an experience that is to be savored and felt (Ardalan, 2009). As research by Anurit and Newman has shown, BMW markets its cars in ways that facilitates the users’ sense of status and highlights the owners’ sense of prestige wherever it travels. The research into the demographics and profiles of the customers who buy BMW indicate that they belong to 20% of the consumer segment who are “achievers” and have arrived in life and hence feel the need for cars that reflect their standing and status in society. These consumers are also helped along by the fact that advertising that targets their segment by featuring prominent achievers and celebrities who are in a similar station in life appeals to them rather than any other forms of advertising concentrated on features of the cars alone. Further, this segment of consumers is likely to be influenced by peer pressure and word of mouth marketing as well as a tendency to “keep up with the Joneses.” Hence, marketers of BMW place their ads in lifestyle magazines and concentrate on promotional strategies in places where this segment frequents (Capelli, 2004). The specific challenges that marketers of BMW would face are centered on the need to elevate their brand from a “me-too” or even premium one to one which is perceived as the ultimate in luxury and comfort and which has strong connotations of being a status brand (Ardalan, 2009).Further, many of the status consumers who buy BMW cars would already own one car or more and hence they would not be buying the luxury car for features alone (Shukla, 2010). So, the “extra” bit that marketers and the makers of BMW can squeeze in to make the car appealing is what makes the difference between a sale and a non-sale. Like with Frequent Flyer programs and Private Banking that target High Net worth Individuals (HNI’s), the BMW marketers must utilize personal relationship marketing rather than mass selling. One would surely not expect a potential status buyer of BMW cars to walk into a showroom and ask for it. Rather, the sale must be done in a personalized manner and with skill and finesse. Finally, the ultra-luxury brands among the status brands must be ready to be personalized if the buyer so wishes and this personalization of the product is what differentiates the truly luxury brand from the other status brands (Hoyer & Brown, 2000). Conclusion Status consumption is increasing with the numbers of people seeking status goods rising exponentially over the years. As the example of the BMW cars and their marketing strategies shows, marketers need to be astute and sensitive to the changing trends of the status consumer market if they are to achieve optimal sales for their products. The report discussed how status consumption has evolved over the years and how specific products like the BMW cars are specially designed to this segment. The close linkage between income levels and status consumption, as well as the aspiration values that the others who are lower down in the hierarchy exhibit, ensure that status consumption as a concept has indeed arrived. 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