Consumer Behaviour and Retail Marketing Strategy - Essay Example

CONSUMER BEHAVIOUR AND RETAIL MARKETING STRATEGY This research paper aimed at describing the buyingbehaviour of consumers in the market. It first starts by explaining the factors that determine the buying behaviour of consumers ranging from economic, social, psychological, behavioural and individual factors. These factors are the ones that create the need that the marketer must satisfy. Then, the research managed to explore on the best retail marketing strategy based on the standard consumer buying behaviour model. The data consisted of a thorough review of the literature from credible authors and relevant journal articles that assisted in making personal judgments concerning the mater on discussion. 1.1 Introduction Consumer behaviour refers to the overall attitude, preference, intention as well as the decision made by a consumer concerning the purchase of products or services in the market. The study of consumer behaviour aims at establishing the path that consumers follow in arriving at the decision to buy or not to buy a particular product from a range of similar products available in the market (Strack, Werth & Deutsch 2006). This knowledge is very important for any marketer in formulating the marketing strategy of his products and be able to predict what will happen in the future especially in a market environment chareacterised by stiff competition. This research will first demonstrate a clear understanding of consumer buying process and then propose a retail marketing strategy based on the theories of consumer behaviour. 1.2 Determinants of Consumer Behaviour There are various factors that influence the decision making process of consumers ranging from internal, external, individual as well as environmental. However, these factors generally fall into three major classes; sociological, behavioural and economic factors (Strack, Werth & Deutsch 2006). It is very vital for any marketer to have a good knowledge of all these determinants to be able to predict the performance of his products in the market before introduction. Therefore, the best marketing strategy will come after a good understanding of the factors that influence consumers to buy, since the marketer will then know whether his products possess the characteristics that will influence consumers to buy his products or not. 1.2.1 Sociological factors This refers to the influence of the members of the family, influence from group references and leaders opinions, influence from the social class as well as the culture of the people on the buying behaviour of consumers (Moutinho 1987). It is common knowledge that in every family there is the idea of specialisation and every family member has an important role to play in making purchases for the family. It is very possible that a particular consumer may receive influence from other family members to buy a particular product. A marketer therefore has the responsibility of identifying these influential family members in the family. The influence of each member in the decision making process vary from one society to another depending on the culture of the people and other factors. The reference group describes the type of group that a consumers uses as the foundation for his decision and behaviour. The reference group will affect the decision and buying behaviour by creating an ordinary pattern of spending personal income (Moutinho 1987). This knowledge is very important for a marketer designing a marketing strategy for the products of the company. More important is when the marketer wants to target a specific group or geographical area with the aim of gaining a competitive advantage over other players in the industry. On the part of opinion leaders, consumers usually make a buying decision that is compatible with buying behaviour of the leader. The marketer has the role of identifying these leaders and formulates the marketing program based on their behaviour and preferences. Culture refers to a set of fundamental values, beliefs, perceptions, needs as well as behaviours acquired by a member of the society from close relatives and various significant institutions. These factors have a very significant role in determining what an individual is likely going to buy and consume (Mohr, Webb & Harris 2001). A marketer must always ensure that both the product as well as the product promotional strategy agrees with the culture of the population of consumers on target. The social class also influences the decision made by an individual regarding the purchase of a particular product. The individuals in the same social class share parallel values and behaviours. The determinants of the social class are the income, level of education, occupation and other factors. A marketer can design a strategy to reach a particular class of consumers because of the similarity of the buying behaviour of members. The personal characteristics of an individual also influence the buying patterns of the individual (Eastman, Goldsmith & Flynn, 1999). The marketer does not have the capability of changing these characters but can design the marketing strategy to align with them. These characters include the age, occupation, life style, economic situation, perception, education, belief, motivation among others. The buying habits of consumers change as they grow. For example, the taste in clothes or fashion relate to the age. The family status also develops as time goes that result to changes in buying patterns. This idea is specifically very important in understanding future market trends. The marketer has to design his marketing strategy based on the various segments of consumers. Lifestyle of a consumer refers to the consumer living pattern according to the manner psycho graphically expressed in him. The life style of a consumer expresses the manner he decides to use his time and the income and the manner his values and preferences reflect to the buying decisions (Eastman, Goldsmith & Flynn, 1999). The knowledge on the life style of consumers is significant in understanding the social consumption preferences and the positioning of special products or services to the various segments of consumers. This knowledge will also assist the marketer in identifying regional variations in product choices and establish a different marketing strategy for each region. 1.2.2 Psychological factors The buying behaviour of a consumer also depends on the psychological factors such as motivation and beliefs (McGuire 1976). The marketer has no direct control over these factors but can design the marketing strategy to suit them. First, the motivation of consumers to buy a product increases if consumers see the product to be most relevant to them. However, the decision to buy upon gaining motivation depends on the economic status and other factors. The perception refers to the manner people choose, arrange and interpret the information received to derive a meaning out of it. The product promotional strategy should therefore be precise and efficient in conveying the intended information. Learning, beliefs and attitudes are all psychological factors that influence the buying pattern of consumers that a marketer must consider when designing his marketing strategy. 1.2.3 Economic factors Economists suggest that an increase in the income of consumers produces great changes in the buying behaviour. For example, since the consumers have more cash to spend, they tend to move from low price inferior products to higher quality, prestigious or luxurious products (Sheth, Newman & Gross 1991). The marketer has the responsibility of designing the marketing strategy based on both the current economic status of consumers as well as the future expectations. Not all the time that lowering the price can influence the buying pattern in favour of the product. This is because a decrease in price that goes together with increase in consumers’ income can prompt consumers to act against the product. This is because many consumers believe that the price of a commodity conveys some important meaning concerning the quality of the product or service. 1.3 Standard behavioral model The facts presented above concerning the determinants of consumer buying behaviour cover the entire basis upon the construction of the theories explaining the consumer buying behaviour. However, it is convenient to have an insight of the general buying behaviour of consumers presented by the standard behavioural model that provides an overall answer concerning the consumers’ decision making process. According to this model, the consumer undergoes various steps to come up with the overall conclusion concerning the product. The first step concerns the recognition of the problem or need (Bearden, Netemeyer & Teel 1989). In this step the consumer understands that he has a need that requires fulfillment. The marketer as well must start from this step of identifying the needs of consumers. In some cases, the marketer can identify a totally, new need and educate consumers about the effectiveness of his product in fulfilling the need. This is the first and most crucial step in the design of a marketing strategy of a particular product. The second step involves the search for information. In this step, according to Kiel & Layton (1981) consumers will be seeking the knowledge concerning the products available in the market and the capability of each product in addressing their needs. The marketer must therefore ensure that the strategy he uses to convey the message to consumers about the functionality of the product is easier for consumers to access. For example, the marketer has to ask himself the mode of communication that can easily pass information to consumers within the shortest time. Is it through the social media, the television or through the print media? This is dependent on the type of product and the nature of the target group of consumers he wishes to reach. Consumers begin interpreting the information that first reaches them and therefore the other information that comes later receives judgment based on the previous information received (Punj & Staelin 1983). The next step involves the evaluation of the information received to draw a meaning out of it. The evaluation of the information by the consumer will base on his needs, preferences, wants as well as the income available to affect the purchase. The quality of the advert presented by the marketer dictates the meaning derived by the consumer concerning the ability of the product to satisfy their needs Layton (1981). Sometimes, the advert can fail to convey the exact information to influence the consumer to make the wrong meaning. Sometimes, the advert can convey less meaning that undermines the product. However, proper design of the advert can influence the consumer to expect more from the product and make an attempt to buy to see taste the product. This is also a very crucial stage that can determine success or failure of the marketing strategy for the product. The next stage involves the purchase of the product. The consumer will make this decision after a critical examination of the facts presented to him by the marketer and gained some reasonable degree of trust in the product (Deaton 1980). In this step, the marketer has no influence but to wait for the outcome of his work. The reaction of the consumer upon consuming the product is largely dependent on the actual characteristics of the product. During consumption, the consumer will try to look at the characteristics of the product conveyed to him by the marketer to ascertain the credibility of the information presented before. This is the very significant stage that will dictate whether the market share of the product will shrink, remain constant or grow. The last step is the evaluation of the consumer after consuming the product. During this time, the consumer will decide whether he will continue buying the product or he will shift to another similar product. This decision will base on the level of satisfaction that the consumer has drawn from the product as well as the match between the information conveyed by the marketer and the actual characteristics of the product (Grubb & Grathwohl 1967). The satisfaction may fall in one of the three categories, first the consumer can get less than his expectation. This will influence him to abandon the product and look for a substitute that will adequately satisfy his need. This in turn leads to a reduction in the market share for the product. Secondly, the satisfaction can be exactly equal to the consumer’s satisfaction. This will prompt the consumer to continue buying the product and in turn the product will maintain its share of the market. Lastly, the consumer may get more than his expectation. This will prompt the consumer to speak to others concerning the suitability of the product is satisfying the particular need and encourage them to taste the product. This in turn will lead to a growth in the market share of the product. This therefore provides a good guidance for the marketer when coming up with the marketing strategy of the product. Correct use of the model step by step may greatly assist a business organisation to gain a very perfect competitive advantage over other players in the industry. 2.0 Retail Marketing Strategy A retail marketing strategy refers to a plan that describes the manner a particular retailer aims at offering its products or services to the consumers and influences their buying behaviour in favour for the product or service (Jain 1989). A good retail strategy may provide an illustration in the best manner of placing and displaying the products of the company in the retail outlets and the means of attracting the interests of consumers in the various locations. This section will provide a description of the principles of a retail marketing strategy and the steps to follow in creating the best retail marketing strategy for a business. 2.1 Principles of retail marketing For any retail business, there are five major principles that a marketer must adhere to for successful business operation. First, the marketer must understand that the customer is the most important individual in the business. Every operation undertaken must therefore focus to the customer’s needs and preferences (Alexander & Doherty 2009). This is because a retailer directly interacts with the final consumer and therefore the decision made by the consumer impacts directly on the performance of the business. By considering the customer as the most important person means that the marketer is going to be capable of meeting his needs adequately that in turn will influence him in favour of the product. The operations of the business must help in conveying the message to the consumer to assist in winning his loyalty. The other principle is that the marketer must acknowledge the fact that retailing is very detailed (Alexander & Doherty 2009). The great problem comes when the marketer thinks in the means he can apply to become detailed. The marketer must always work to improve his understanding concerning the customer. Simple mistakes can occur but these mistakes should not be too many to make consumers shy away from the products. The marketer must therefore keep in touch with the changing behaviour of consumers to be at the right position at all the time. The marketing strategy may need revision from time to time to comply with the rapid changes in the behaviour of consumers. The third principle is the idea of understanding the four Ps that affect the operations of the business. Despite being an old principle, its validity remains until today and helps in understanding the entire foundation of the retail marketing strategy required for a business enterprise. The four Ps are the product, the price, the place and the promotion. These make up the foundation for any successful retail marketing strategy for any particular business. The product should be one that consumers need and directly focuses on the needs and preferences of consumers (Alexander & Doherty 2009). This consideration will guarantee the marketer that the product is going to capture the attention of consumers once introduced to the market. The price of the product must be compatible with the income of the consumers on target. It should not be higher than that offered by the close rivals nor should it be too low to discourage profits. Setting the correct price is very important since consumers always go for what satisfies their needs adequately but at the lowest costs possible. However, the price is also a reflection from the overall cost of running the business. The other consideration is the place or location of the business. The business should locate where the customers are readily available and the products to be offered comply with their choices and preferences to attract their attention and influence them in favour for the product. The marketer must also come up with an efficient product promotional approach to pass information to consumers and explain to them about the availability and functionality of the product (Alexander & Doherty 2009). The quality of the information availed to consumers will determine the level of understanding concerning the product and thus the influence to buy. The advert must therefore use the appropriate language and expressions that will help easier understanding. The fourth dimension is that the marketer must move an extra mile into ensuring that his services are unique and completely different from the services offered by the rivals. This comes after thorough marketing research coupled with high culture of invention and innovation in the operations of the business (Merrilees & Miller 2008). This is a very important factor in the retail business characterised by similarity in the products and mode of service delivery by different marketers. This means that if one manages to come up with a unique form of operation will obviously succeed in persuading buyers to develop favourable habits for the products. Lastly, the location of the business is very important in shaping the effectiveness of the marketing strategy adopted by the marketer. The brand and the product strategies dictate the location of the enterprise (Merrilees & Miller 2008). For example, a store that aims at supplying high fashion products has to locate in a high fashion region to be able to win the attention of a large number of consumers. However, the location may be less significance with the development of good transportation network and use of the internet. The use of the internet to market the products by reaching a large number of consumers will reduce the influence of the location depending on the nature of the products. However, the location will ever remain a significant factor since some consumers always prefer visiting the store physically rather than through the internet. 2.2 Steps to a Successful Marketing Strategy A retail marketer must recognise that as a means of enhancing brand equity, it is necessary to direct the buyers to not only purchasing the product but also advocate for the brand. An integrated marketing strategy will play a significant role in delivering the correct information concerning the brand and to the right group of consumers and at the right time while utilising the right channel to influence the buying behaviour in favour of the product (Samli 1989). The strategy requires strict evaluation as well as investment in various channels that includes social, traditional and e-commerce. The following considerations are significant in building a suitable marketing strategy; First, the marketer has to define the target group of consumers. A good strategy starts with proper segmentation of the market. Every brand of the products goes together with the specific segment of consumers. The marketer thus has to start by defining the list of targets, defining the channels for the strategy, specified offers or treatment and means of evaluating the performance of each campaign. Failure to define the target group of consumers may lead to a failure of the strategy (Rust, Lemon & Zeithaml 2004). This argument clearly defines that each and every brand availed for sale has to be meaningful and aim at reaching a particular group of consumers. The other consideration is the definition of the objectives of the strategy. Without a clear definition of the objectives of the strategy it will be difficult to predict the benefit of the strategy (Kunkel & Berry 1968). The marketer must be careful not to get stuck about the content as well as the creative of the strategy and lose focus in the original objectives of the strategy and the execution of the priorities. Defining and communicating the objectives is very important as it will establish an understanding right from the earlier strategies and assist in planning for the future. Another consideration is the creation of consistent, compelling and clear content. This is because it can require several impressions for a consumer to gain a reasonable degree of recognition for a given brand or a particular message (Lilien, Kotler & Moorthy 1992). The marketing message must therefore follow the three Cs, which means that the communication process must be consistent, clear and compelling. To begin with, the marketer must evaluate the extent that the content is compatible with the buying behaviour as well as the attitudes of the consumers he targets. In addition, the marketer has to review the content of the close rivals to see if there are gaps between his content and the standard content required to make a brand that is credible to the consumers. The other step is the idea of channeling the message to be conveyed to consumers. There are various types of consumers with various preferences with some preferring to buy through the internet using the social media while others preferring the ordinary method of visiting the store physically (Chen & Barnes 2007). Others prefer buying the products through a third party that directly deliver the products to their premises. A perfect marketing strategy will therefore consider all the consumer choices to be able to reach all of them and attract a large group of consumers. In addition, enhanced insight and analysis of the tools provides inter brand views of buyer behaviour as well as activity and hence enabling improved and dynamic decisions for marketing while at the same time providing a consistent experience of the brand for buyers. Finally, the last step is the consideration of consumer loyalty during the formulation of the strategy. The marketing strategy must include features that will help the consumers to remain loyal to the brands offered by the business (Bucklin, L. P. 1963). It can achieve these by assuring consumers the necessity of continuing to buy the brand and what they will not get if they buy from the rivals. With this consideration, the strategy becomes successful. 3.0 Conclusion There are numerous factors that influence the behaviour of consumers in buying products in the market from a wide range of products in the market. The determinants of the consumer buying behaviour are social, economic, psychological, individual and environmental. An understanding of these factors is very important for a retail marketer when formulating his marketing strategy. This is because; his strategy must align with the consumer buying behaviour to be able to influence them to accept the product upon introduction into the market. The identification of the needs of consumers is very important when formulating a retail marketing strategy. The theory of consumer behaviour assists in identifying the needs of consumers since the determinants of consumer buying behaviour are the ones that create the needs. The consumer marketing strategy must consider all the important factors that influence the choice of consumers.   4.0 Bibliography Alexander, N., & Doherty, A. M. 2009, International retailing, Oxford University Press, Oxford. Bearden, W. O., Netemeyer, R. G., & Teel, J. E. 1989, ‘Measurement of consumer susceptibility to interpersonal influence’, Journal of consumer research, Vol. 15, no. 4, pp. 473-481. Bucklin, L. P. 1963, ‘Retail strategy and the classification of consumer goods’, The Journal of Marketing, vol. 27, no. 1, pp. 50-55. Chen, Y. H., & Barnes, S. 2007, ‘Initial trust and online buyer behaviour’, Industrial Management & Data Systems, Vol. 107, No. 1, pp. 21-36. Deaton, A. 1980, Economics and consumer behavior, Cambridge university press, Cambrige. Eastman, J. K., Goldsmith, R. E., & Flynn, L. R. 1999, ‘Status consumption in consumer behavior: Scale development and validation’, Journal of Marketing Theory and Practice, vol. 7, no. 3, pp. 41-52. Grubb, E. L., & Grathwohl, H. L. 1967, ‘Consumer self-concept, symbolism and market behavior: a theoretical approach’, The Journal of Marketing, vol. 31, no. 4, pp. 22-27. Kiel, G. C., & Layton, R. A. 1981, ‘Dimensions of consumer information seeking behavior’, Journal of marketing Research, vol. 18, no. 4, pp. 233-239. Jain, S. C. 1989, ‘Standardization of international marketing strategy: some research hypotheses’, The Journal of Marketing, vol. 53, no. 1, pp. 70-79. Kunkel, J. H., & Berry, L. L. 1968, ‘A behavioral conception of retail image’, The Journal of Marketing, vol. 32, no. 4, pp. 21-27. Lilien, G. L., Kotler, P., & Moorthy, K. S. 1992, Marketing models, pp. 385-397, Englewood Cliffs, NJ: Prentice-Hall. McGuire, W. J. 1976, ‘Some internal psychological factors influencing consumer choice’, Journal of Consumer research, pp. 302-319. Merrilees, B., & Miller, D. 2008, ‘Principles of corporate rebranding’, european Journal of Marketing, Vol. 42, No. 6, pp. 537-552. Mohr, L. A., Webb, D. J., & Harris, K. E. 2001, ‘Do consumers expect companies to be socially responsible? The impact of corporate social responsibility on buying behavior’, Journal of Consumer Affairs, Vol. 35, No. 1, pp. 45-72. Moutinho, L. 1987, ‘Consumer behaviour in tourism’, European journal of marketing, Vol. 21, No.10, pp. 5-44. Punj, G. N., & Staelin, R. 1983, ‘A model of consumer information searches behavior for new automobiles’, Journal of Consumer Research, pp. 366-380. Rust, R. T., Lemon, K. N., & Zeithaml, V. A. 2004, ‘Return on marketing: using customer equity to focus marketing strategy’, Journal of marketing, Vol. 68, No.1, pp. 109-127. Samli, A. C. 1989, Retail marketing strategy: Planning, implementation, and control, Quorum Books, New York. Sheth, J. N., Newman, B. I., & Gross, B. L. 1991, ‘Why we buy what we buy: a theory of consumption values’, Journal of business research, Vol. 22, No. 2, pp. 159-170. Strack, F., Werth, L., & Deutsch, R. 2006, ‘Reflective and impulsive determinants of consumer behavior’, Journal of Consumer Psychology, Vol. 16, No.3, pp. 205-216. Read More