Utilizing Drivers of Consumer Behavior in Effective Marketing of Samsung - Case Study Example

Buyer Behaviour Table of Contents Introduction 4 Segmentation 4 Psychological Drivers of Consumer Behaviour 5 Perception 5 Motivation 6 Maslow’s Hierarchy of Needs Theory 6 Attitudes and Beliefs 6 Sociological Drivers 7 Self Image and Role 7 Reference Groups 8 Means-end Chain Model 8 Marketing Mix 9 Impact of Marketing Mix element on the Decision-Making Process of Consumer 9 Problem Recognition 9 Information Search 10 Evaluation of Alternatives 10 Conclusions 10 Recommendations 11 Reference List 12 Appendices 14 Appendix 1 14 Appendix 2 14 Introduction Consumer behaviour is defined as the learning of how the individual customers, organisations or groups buy, use, select and dispose services, ideas and goods to satisfy or please their wants and needs (Mooij, 2010). It deals with several stages that the customer goes through before purchasing services and products for their end use. The understanding of the consumer behaviour allows companies to take proper marketing decision relating to the design, promotion, pricing, positioning and packaging of product. The organisations are focusing on new and innovative methods in order to manipulate their purchasing behaviour in a better way (Mooij, 2010). The report has been prepared to focus the purchasing behaviour of the user for the Samsung products. Samsung is an international conglomerate company, which was founded in 1938 and is headquartered in Seoul, South Korea. The product portfolio of the company comprise of apparel, medical equipments, electronic components, telecommunications equipment, consumer electronics, ships and semiconductors. Samsung also provides wide range of services such as financial services, advertising, health care and medical services, retail, hospitality, entertainment and construction services (Samsung, 2015). The psychological and sociological drivers of consumer behaviour will be assessed through the marketing analysis of Samsung by using different theories and models. Further, the impact of the marketing mix components on the decision-making process of the consumers will also be taken into consideration for the purpose of this report. Customer Segmentation The customers of Samsung are grouped on the basis of geographic, demographic and psychographic segmentation. According to geographic segmentation, Samsung is targeting the Chinese and Indian market as a priority and then focusing on other regions. According to demographic segmentation, age does not really matter for the Samsung products and it offers its services and goods for all the family sizes. The company targets the customers of middle, upper middle as well as higher class individuals. The company has segmented the customer into three different categories such as teachers and students, self employed and businessman. On the psychographic segmentation basis, Samsung is targeting the users based on their personality as well as lifestyle (Clow and Baack, 2011). Psychological Drivers of Consumer Behaviour Perception The process of perception comprise of four phases such as exposure, interpretation, attention and recall. Exposure: Mainly perception starts with exposure towards stimuli. Exposure occurs when stimuli come within any of the following senses such as touch, smell, vision, taste and hearing. It has been discovered that stores are also designed with locating signs and visible shelves to make the things as simple as possible (Blythe, 2013). In case of Samsung products, sensory stimuli come from ads and the sensory receptors comes from hearing, vision and touch. The stores of Samsung are designed with locating symbols and exceptionally visible shelves to make the items perceptible. Attention: The adjustments in the products and marketing strategies emerge to be beneficial in increasing awareness towards particular product. Generally, larger stimuli collect more attention than the minor ones (Blythe, 2013). Samsung gathers attention through its low cost and differentiation strategy. Interpretation: The interpretation of individuals is based on their own beliefs, experiences and attitudes. It may happen that similar event is observed and heard by several individuals; however, their interpretations about the product or event vary from each other. Hence, the companies rely on symbols to support the exact interpretation (Blythe, 2013). One of the Samsung’s product; the ‘Samsung Video Wall’ is an innovative optical display with thin bezel, expresses or conveys an immersive experience of observing through exceptional picture quality (See Appendix 1) (Samsung, 2014). The customers interpret the service as well as benefit through their personal experience they get from the Samsung’s product. Recall: Generally, the consumers do not remember all information they see, hear or read therefore, the marketers make use of symbols, rhymes and jingles, which help them to learn as well as memorise the products (Blythe, 2013). Samsung launch their products at special events with the help of different celebrities and get promoted through renowned people where products are publicised in the music videos, films and news (Samsung, 2014). Motivation Motivation is defined as a theoretical construct which is used to describe behaviour of human beings. It signifies the causes for people’s needs, desires and actions. To boost sales, the companies should create as well as strengthen a requirement in the minds of people so that they develop the purchase motivation. Motivated customers are more interested in buying the products (Daft, 2014). The customers of Samsung are motivated to purchase its products because of its good battery life, excellent browsing facility, good internet connectivity, navigation facility and because of its compatibility and reliability (Samsung, 2014). Maslow’s Hierarchy of Needs Theory This theory will be explained by means of Samsung Smartphones. Psychological needs: These are the basic requirements without which people cannot survive (McGuire, 2012). The psychological requirement for the customers in terms of Samsung Smartphones will be the compatibility, connectivity and security. Safety needs: It means the necessity for a secure and safe environment (McGuire, 2012). The safety needs will be the reliability, speed, ease of use and battery life of the Samsung Smartphones. Belongingness needs: It refers to the company’s desire that the product would be acknowledged by the users (McGuire, 2012). Therefore, the belongingness needs will be the productivity as well as communication factors, for example, web browsing, better email and SMS facility. Esteem needs: It refers to the requirement for appreciation, self-image and identification from others (McGuire, 2012). For Samsung Smartphones, the esteem needs will be the features offered by its products for everyday life such as camera, calculator, media player, maps, alarm clock and GPRS navigation facility. Self-actualisation needs: It symbolises the want for self accomplishment like growing owns competence (McGuire, 2012). Samsung symbolises itself through an app for jobs, hobbies, studies, fun and entertainment. Attitudes and Beliefs The customer’s attitude refers to whether they think and feel negatively or positively about a brand. Beliefs represent the recognised facts. The beliefs as well as thoughts of customers influence their purchasing decision. The organisation’s effort is driven by how they change the attitude of customer and develop an optimistic attitude for their product (Peter and Olson, 2010). Samsung products are advertised in the ads in between the news or sports or movies and on the billboards. Therefore, it is observed by all the age groups. The belief that purchasing Samsung products can lead to the desired result of getting a number of benefits of new means to watch television and the benefits of apps; and the assessment of these outcomes leads to the growth of customer attitude towards the Samsung brand. Customers plans to buy the products of Samsung because of its low cost benefit and special features. In terms of Smartphone market, the company ranks second and accounts for 28.4% market share (See Appendix 2) (Comscore, 2014). The promotions and advertisements propose the input to build up attitudes, thoughts and beliefs of customers. Sociological Drivers Self Image and Role People generally classify themselves through the products they use. The only method of knowing oneself is through the response from other people. The image which the people form is entirely derived from the feedback or response of other people. When something is purchased by customer, they not just deem how the products purchased suits their own image but also consider other people’s reaction towards them. The self image of the customer plays crucial role in explaining their behaviour. Through the method of reflective review, customers understand how others will perceive them and hence create a common self of them (Sokolowski, 2013). It has been observed that Samsung’s Galaxy Note 4 offers a good feel to the users when they use it. They get the benefit of crystal clear pictures with the help of advanced camera. Through the use of its multi-window, users gain litheness by handling a range of apps at once by making use of basic gestures on the single screen (Samsung, 2014). So, when the customers obtain good response on Galaxy Note 4 from others, they feel that they are having a great image and possessing a good status in the society. Due to its enhanced features as well as affordable price, it generates repeat purchase. Even before the release of Apple Inc.’s iPhone 5, Samsung was selling the Galaxy Note along with much bigger display. So, it is enjoying a good brand image (Nytimes, 2013). Reference Groups Reference group is referred to the group that an individual compare themselves to, with the intention to evaluate their own behaviour. It helps to influence the buying patterns of individuals because it serves as indirect or direct point of judgment as well as shape beliefs, behaviour and attitudes of people. All clusters engage in some sort of consumption like gadgets to use, things to be utilised in the groups, clothes to wear, etc. There are usually two forms of reference groups. The aspiration group comprise of business people and athletes, whereas, the membership reference group comprise of lose referents like family members and peers (Solomon et al, 2006). The marketers of Samsung make use of both membership as well as aspiration referents, for example, businessman, athletes and peers to manipulate or influence the consumer’s buying behaviour. The wireless ear buds ad of Samsung starring LeBron features that he is lifting weights while wearing the wireless ear buds of Samsung (Boudway, 2014). This signifies the simplicity of the wireless ear buds while performing other activities. Thus, the ad of Samsung wireless ear buds put a great emphasis on the customers towards purchasing it. Consumers deem that the celebrities actually support as well as like the brand, which is endorsed by them. Apart from this, the Samsung gadgets are favoured by the youngsters due the accessibility of different apps for their purpose of enjoyment and also by the businessman because it assists them to interact with their colleagues (Samsung, 2014). Means-end Chain Model The means-end chain framework or model is generally a conceptual arrangement which connects a products and a customer. According to this model, the product is categorised in consumers or users mind in terms of sequence of characteristics. It starts from attributes, followed by consequences and ends with instrumental and terminal values. The characteristics of products lead to several benefits, which satisfies the want and values of customers. For marketers, this model appears as a tool which helps them to understand how the products have an effect on the terminal as well as instrumental values of customers. So, a product could be designed to transform in the minds of customers that result in the considerable values (Sirgy, 2001). Attributes: The attributes which are offered by Samsung Smartphone are excellent HD screen, multi window features, clear images with advanced camera, dual sim, front camera, great battery backup, touch screen facility and the benefit of 16 GB of internal storage (Samsung, 2014). Consequences: Consequences are viewed in terms of benefits which are received by customers from the product. The benefits from the Samsung Smartphone are that people get the advantage of good picture quality even in the dark with the assistance of advanced camera, can make use of two networks at a time. Moreover, the adequate internal storage offers the advantage of downloading a range of apps of their choice (Samsung, 2014). Values: The values which the customers receive are the comfortable life, fun and pleasure, good reputation and self respect wisdom (Samsung, 2014). Marketing Mix Product: Samsung’s product portfolio includes a vast range of products such as tablets, camcorders and cameras, microwave ovens, mobile phones, televisions, refrigerators, printers, laptops and accessories. The products of Samsung have performed well in the recent years and therefore are more preferred by the customers (Michell, 2011). Price: The Company make use of skimming price for the Smartphone because it is leading the market in terms of its USP and features. It keeps high price in the beginning and when the model gets old or copied by competitors, it drops its price (Michell, 2011). Place: Samsung’s channel of distribution includes three segments i.e. service and sales dealers, distributors, and retailers. The retailers make the product available to the customers (Michell, 2011). Promotion: The Company uses various types of promotion strategies. It pulls the customers by means of advertising and at the similar time make use of different tactics in order to push their products towards the customers by means of sales promotions (Michell, 2011). Impact of Marketing Mix element on the Decision-Making Process of Consumer Problem Recognition The phase of problem recognition takes place when the customers identify a difference between their current and desired state (Solomon, 2013). In case of Samsung Smartphones, opportunity recognition is understood or realised when customers discovers that they can develop the actual state by making use of more advanced phones and gadgets of this company instead of using the phones of other brands and thus can enhance their life style as well as self image. Information Search Customers search for the information which may aid them to solve the problem which has been recognised. Unser this phase, two types of model exists. One is Heuristic-Systematic Model (HSM) and other is Elaboration Likelihood Model (ELM). HSM processing takes place in terms of low-involvement products like breakfast cereals. As per ELM, the low-involvement processing is linked to minor route to persuasion because the users or customers are not enthused towards considering the marketers’ opinion. They consider the products which are endorsed by celebrities along with its attractive packaging (Solomon, 2013). It has been observed that many a times, Samsung offers discount on their products besides providing superior features. The products of Samsung are endorsed by celebrities and the displays are also very attractive along with the good packaging of products. The information received by the customers about the product’s features aid them to solve their problem of choosing the brand. Evaluation of Alternatives This phase is very important due to the reason that the brand can only be successful if marketers can convince the customers well about the consistency of their product (Solomon, 2013). For Samsung products, customers are motivated by viewing the advertisement when its products are endorsed by celebrity and focus is on the engagement of celebrity making use of Samsung product. So, basically the product is assessed on the basis of celebrity engagement as well as on its superior quality and features which are offered at reasonable price. Conclusions The report has laid emphasis on the buyer behaviour while purchasing a product. Understanding the behaviour of customers is very vital for the companies for making them purchase their products. The report has analysed the sociological and psychological drivers of the user behaviour in terms of Samsung products. Samsung gathers attention through its differentiation as well as low cost strategy. Samsung launch their products at special events with the help of different celebrities and get their products promoted through renowned people. The customers interpret the service as well as benefit through their personal experience they get from the Samsung’s product. Recommendations The Smartphone of Samsung hangs frequently causing problem to the users, so it is recommended that the company should upgrade its software to deal with this problem and to avoid the complaints of customers. Moreover, all the best makers of Smartphone have become creative and are offering same features in a more advanced way, which helps them to make their gadgets and Smartphones more interesting than Samsung Smartphones and tablets. So, Samsung requires a more attractive marketing strategy to increase their market share and to draw more customers. Reference List Blythe, J., 2013. Consumer Behaviour. California: SAGE Publications, Inc. Boudway, I., 2014. Only LeBron can sell Samsung Phones and Apple’s Beats at the Same Time. [online] Available at: < http://www.businessweek.com/articles/2014-10-20/only-lebron-can-sells-samsung-phones-and-apples-beats-at-same-time> [Accessed 18 May 2014]. Clow, K.E. and Baack, D., 2011. Cases in Marketing Management. California: SAGE Publications, Inc. Comscore, 2014. Comscore Reports July 2014 Smartphone Subscriber Market Share. [online] Available at: < http://www.comscore.com/Insights/Market-Rankings/comScore-Reports-July-2014-US-Smartphone-Subscriber-Market-Share> [Accessed 18 May 2014]. Daft, R., 2014. The Leadership Experience. Connecticut: Cengage Learning. McGuire, K.J., 2012. Maslow’s hierarchy of needs: An Introduction. Germany: GRIN Verlag. Michell, A., 2011. Samsung Electronics and the Struggle for Leadership of the Electronics Industry. New Jersey: John Wiley and Sons. Mooij, M., 2010. Consumer behaviour and culture: Consequences for global marketing and advertising. California: SAGE Publications, Inc. Nytimes, 2013. Samsung Emerges as a Potent Rival to Apple’s Cool. [online] Available at: < http://www.nytimes.com/2013/02/11/technology/samsung-challenges-apples-cool-factor.html?pagewanted=all&_r=0> [Accessed 16 May 2014]. Peter, J.P. and Olson, J.C., 2010. Consumer Behaviour and Marketing Strategy. New York: McGraw Hill Publication. Samsung, 2014. Samsung and Retail. [pdf] Available at: [Accessed 16 May 2014]. Samsung, 2015. Samsung – About Us. [online] Available at: < http://www.samsung.com/uk/aboutsamsung/> [Accessed 16 May 2015]. Sirgy, M.J., 2001. Handbook of Quality-of-life Research. Netherlands: Springer Science & Business Media. Sokolowski, O., 2013. Influences and attitudes within consumer behaviour process. Germany: GRIN Verlag. Solomon, M., Bamossy, G., Askegaard, S. and Hogg, M.K., 2006. Consumer Behaviour: A European Perspective. Harlow: Prentice Hall. Solomon, M., 2013. Consumer Behaviour. New Delhi: Pearson Education. Appendices Appendix 1 Samsung Video Wall (Source: Samsung, 2014) Appendix 2 Market Share of Samsung in terms of Smartphone Market Top Smartphone OEMs 3 Month Avg. Ending Jul. 2014 vs. 3 Month Avg. Ending Apr. 2014 Total U.S. Smartphone Subscribers Age 13+ Source: comScore MobiLens   Share (%) of Smartphone Subscribers Apr-14 Jul-14 Point Change Total Smartphone Subscribers 100.0% 100.0% N/A Apple 41.4% 42.4% 1.0 Samsung 27.7% 28.4% 0.7 LG 6.5% 6.4% -0.1 Motorola 6.3% 5.7% -0.6 HTC 5.3% 4.7% -0.6 (Source: Comscore, 2014) Read More