Understanding Hope and its Implications for Consumer Behavior - Essay Example

MARKETING PRINCIPLES By Location Marketing principles Task 2 A report on the importance of understanding market segmentation Market segmentation refers to the process of subdividing and defining a large market portion into small identifiable portions, which have similar needs. Understanding market segmentation is important since it will enable the marketing department of this company to divide the market into small segments based upon the characteristics and needs of customers (Mcdonald & Dunbar 2012, p. 23). Understanding market segment will enable the marketing department to identify the number of potential customers or users, which they can reach through clever promotions and advertising of the toy products. In order to target the market successfully, the marketing department will have to compare the abilities of the company with those of its competitors, which include Global Toy plc and Fun Kids plc. This report highlights the importance of understanding market segmentation and this will improve the sales volume of Toga Toys Company. In order for Toga Toys to improve its sales volume, it will be necessary to divide the market into two separate segments, which as individual consumers and wholesale purchaser. Individual consumers are the grandparents or parents who are buying the toys for their children while wholesale purchasers may include schools and day-care centres among many other wholesale purchasers such as commercial businesses, which buy the toy products for their customers to use (Barletta 2003, p. 56). It will be good for the company to sell the toys direct to the customers instead of using the traditional methods that involves the system of distributing products to wholesalers who would sell to the retailers. Although this marketing strategy will create more work for Toga Toys, in terms of sales generation, it will yield better margins. In addition, this selling process will make the company incur extra costs in the first few years, but after developing the relationship with individual customers and wholesale purchasers, the cost of marketing per sale will decrease dramatically since the customers will be aware where to get the toys products. Understanding market segmentation is an essential aspect since it will aid in understanding the customers (p. 58). In order to sell to the customer, it will be necessary to understand first why the customers will want to purchase the toys. Market segmentation will allow for the creation of profiles off a number of different customer categories who purchase the toys. Since you are the business entrepreneur, this information will be helpful in creation of better marketing programs for Toga Toys. The marketing department will also use the market segmentation knowledge to develop toy products for target audience and not just products, but products that will enable Toga Toys to stay ahead of its two major competitors. Segmenting the company’s market will help in understanding how the customers makes use of the products (Mcdonald & Dunbar 2012, p. 27). For instance, in the toy industry, it will be beneficial to produce educative and funny toys, which are currently having higher demand and making Toga Toys face stiff competition since the year 2009. The introduction of new toy products by Global Toy plc and Fun Kids plc has posed a stiff competition resulting in steady decrease in sales volume since the year 2009. Understanding market segment can even resulting in coming across of other alternative use of the toys that the competitors are not aware. Understanding market segmentation can also result in discovering new markets for the products. In general, market segmentation results in maximization of product potential. Moreover, understanding market segmentation will aid in improving the company’s distribution network hence increasing sales volume. Improvement of distribution network will also help in competing with the potential competitors. This is because market segmentation helps firms to develop more efficient distribution channels. By studying purchasing behaviours of potential customers’ groups, the marketing department will determine why customers prefer to purchase toys from Global Toy plc and Fun Kids plc. For instance, if a large group of customers prefer doing online shopping, then the idea of creating the company’s website will be highly advantageous. It will be advisable to focus on the company’s website and reduce the products the company distributes to retail stores (Barletta 2003, p. 76). Market segmentation will help in identifying other areas where the demand of the company’s toys can be high. Additionally, it will be beneficial to understand the market segmentation since this will aid in gaining new clients. A comprehensive understand of market segmentation will enable the marketers to identify the reasons why some buyers are preferring to buy toys from either Global Toy plc or Fun Kids plc. By understanding why the customers are diverting to buy toys from Global Toy plc and Fun Kids plc, this will help us alter the company’s marketing or even change the current toys or implement new techniques, which attract new customers (Mcdonald & Dunbar 2012, p. 31). Offering new educative toys will attract many day-care schools hence increasing the company’s sales volume. It will be essential to balance the customers when trying to attract new customers in order not to lose the existing ones. In the modern marketing system, understanding marketing segmentation is among the normal principles of marketing and not an exception thing. This will enable Toga Toys to exploit marketing opportunities to maximum with the available resources such as internet to advertise. This will also enable the company’s marketers to face the market competition with a lot of confidence. Understanding market segmentation will enhance the firm’s marketing efficiency in all selected segments. Failure to understand market segmentation means failure of the company to penetrate in the competitive market or in other new markets (Barletta 2003, p. 78). In summary, market segmentation is an essential aspect of the modern marketing management in the most successful firms. Understanding market segmentation is necessary for Toga Toys’ growth and survival in the current competitive marketing. The company has being facing competition from Global Toy plc and Fun Kids plc with the sales decreasing steadily since the year 2009 after introduction of the new products in the market. Market segmentation will facilitate development of separate marketing programmes, which will aid in meeting the demands of different customers’ groups. The right market for the toys can be identified through understanding market segmentation (Mcdonald & Dunbar 2012, p. 38). In short, market segmentation is essential not only for creation of new customers but also satisfying them. For instance, understanding the needs of customers will enable the company divert the views of customers to stop buying toys from Global Toy plc and Fun Kids plc hence increasing the sales volume and profit margin? Market segmentation will help to match the market opportunities to the company’s resources and enable the company face competition from Global Toy plc and Fun Kids plc effectively (Barletta 2003, p. 89). Understanding marketing segmentation will also help in raising the efficiency of marketing through better marketing mix adjustments for each identified segment. In conclusion, marketing segmentation is one of the vital elements that contribute towards success of various companies in the current competitive world. Market segmentation provides marketers with a precise answer for the question “where should we sell our products?” Marketing segmentation facilitates creation of marketing-mix, thus through understanding the market segmentation, this will highly aid in achieving Toga Toys’ goals and objectives. It will also help the marketing managers to understand fully the needs and behaviours of the potential customers hence standing a chance to attract and retain a large population of customers (Mcdonald & Dunbar 2012, p. 45). Understanding the needs and behaviours of the customers will help the company to come up with new toys’ techniques, which are more attractive than those offered by the competitors are or even alter the current products to fit the needs of the customers. Task 3 “Understanding Customer Behaviour- How it can improve our sales” Understanding a customer’s behaviour entails understanding why a customer searches a good or service, purchases, uses and disposes them. It is a factor that helps business people understand why people choose to purchase a certain item as opposed to another. When any individual or company thinks of starting any business, they target meeting consumers’ needs (Tyagi & Kumar 2004, p. 45). This is because consumers go to the market to seek and purchase products and services that satisfy their needs to the maximum. Although, not all people buy a product because of its reliability; others have emotional reasons as to why they purchase a particular product. Therefore, business operators and companies need to understand why consumers choose to buy a product and why a certain product is what customers feel best for them. Whenever a company understands customers’ behaviours, it comes into a position of giving the customers good service. In other words, giving consumers the best service entails giving them what you promise (Macinnis & Chun 2007, p. 67). This can only be done by understanding the consumers so well such that the company can predict their needs and even perform past the consumers’ expectations. Given that any business’ aim is to make profit, understanding customers will lead to increased sales since customers get the attention they deserve. Understanding customers involves a number of activities, which include; i. Putting yourself in the shoes of the customer Customers have their own way in which they view a business. In order to understand them, marketers ought to consider the points at which the customers view the business. This can be done through arranging for meetings with customers, calling them over the phone or visiting them. This will help businesses to understand how customers feel about their products and services. Putting yourself in the shoes of the customer will also help businesses understand well the customers get served (Tyagi & Kumar 2004, p. 47). For example, issues that deal with customer care can make a great impact on a company’s sales. For instance, when customers meet with unfriendly receptionists, they can feel very disappointed. ii. Understanding customers through the company’s data Companies have systems that manage their relationship with their customers. Data stored in these systems can act as better means of understanding customers’ behaviours, for example, how customers buy products and services helps a company understand the customers’ buying preferences and give the company a hint to improving their services (Macinnis & Chun 2007, p. 68). Through this the company meets the needs of the customer more effectively and demand their trust. iii. Asking customers what they think This can be done through conducting a survey on customer satisfaction. Customer satisfaction survey makes customers feel valued by the business, and once customers understand they are valued, the business gains more insight on how customers take their services. For example, surveys done on customer satisfaction can disclose things about the staff that the business does not know, like staff behaviour, among others (Tyagi & Kumar 2004, p. 49). When businesses fail to satisfy the needs of customers, not all customers complain about the dissatisfaction, but rather tell their bad experiences to their friends, and look for better services elsewhere. Unless a business involves customers in seeking to understand how well their services are, the business may not know where they go wrong. However, the company staff too should be able to explain differences in quality between products from the company to the buyers. This will assist buyers in making the right choice of product for the purpose at which they aim (Macinnis & Chun 2007, p. 72). The business can also establish a customer contact service that ensures that it listens to the customers and keep them updated on any new services. How understanding customers’ behaviour helps in increasing sales The core objective of a business is to make profit as it provides products and services to customers. The reason why many businesses fail to venture in the market is because they fail to understand the reason why customers prefer one product to another. Understanding customers’ buying behaviours helps improve the demand for products the business sells. Consumers need adequate attention from their service providers to increase their purchasing power (Tyagi & Kumar 2004, p. 51). Marketing is in the heart of any business that wishes to be successful. Understanding customers’ behaviour is one aspect of business marketing that helps a business give customers good service and improve its sales. On the contrary, if a marketing strategy does not consider a consumer’s values, it will not be successful. Companies need to be attentive at any given time that they come into contact with consumers, as it increases customer loyalty and enhance more sales. Marketing a business involves promising people that your products meet their expectations, and can satisfy their desires. As pointed out earlier, understanding customer behaviour is one way of marketing a business. For example, when a business puts itself in the shoes of a customer, it considers things services given to consumers as if they were given to them, and gauge their satisfactory ability towards customers (Macinnis & Chun 2007, p. 74). Good services given to customers portray the business positively to the public. For instance, many customers complain of being kept waiting for services promised to be given to them. When business operators put themselves in the shoes of the customers, they will understand how it feels to be kept waiting, and improve their services (Tyagi & Kumar 2004, p. 53). Since losing trust among customers poses a danger of losing customers, maintaining the trustworthiness people had in Toga Toys company since it foundation will help keep its original customers and source for more customers, leading to increase in sales. Since Toga Toys Company was the first to introduce toys, creation of a customer relation management system would be essential. For example, if the company has contact details of its potential customers, it can contact them whenever there are new arrivals or changes in business operations. This makes customers feel valued and treasured, and they tell their friends about the services they receive from the company (Macinnis & Chun 2007, p. 76). Although there is competition from other toy companies founded after Toga Toys, the services provided to the customers will win more sales because it delivers what it promised to the customers. Asking customers what they think about services provided to them also makes them feel honoured and valued. When managers ask customers about the quality of the Toys they produce, they will gather more insights on whether they are of good quality or poor quality. This will help them improve their quality and make more sales (Tyagi & Kumar 2004, p. 76). Unless managers understand customers’ behaviour, they may not understand whenever sales are going down or facing stiff competition from their competitors. Understanding customers’ behaviour through asking what they think about Toga Toys’ products will lead to more sales given that the company will upgrade any low quality services. When managers in Toga Toys comp ensure that their marketing strategies are met through understanding customer behaviour, then they should expect higher profit margins due to successful sales, sustained competitiveness in the market against other toy companies. Understanding customers’ behaviour also equips marketers with knowledge on what their customers need and value most. This knowledge will help increase sales since the company avails products to the target market (Macinnis & Chun 2007, p. 80). In other words, consumers tend to buy products or services, which they have engaged with for a longer time. Consequently, understanding a consumer purchasing behaviour leads to a successful marketing strategy, which is the backbone to increased sales and withstanding the other competing companies offering the same products and services. In conclusion, the more marketers understand customers’ behaviour, the more they are likely to run a successful marketing plan that leads to increased sales. Bibliography Barletta, M 2003, Marketing to women how to understand, reach, and increase your share of the worlds largest market segment, [Chicago?], Dearborn Trade Pub Macinnis, DJ, & Chun, HE 2007, Understanding hope and its implications for consumer behavior: I hope, therefore I consume. Boston, Now. Mcdonald, M, & Dunbar, I 2012, Market segmentation how to do it and how to profit from it, Chichester, John Wiley & Sons. Tyagi, CL, & Kumar, A 2004, Consumer behaviour, New Delhi, Atlantic. Read More