Predicting Consumer Behavior for E-Bicycles - Case Study Example

The Use of Values, Attitudes and Lifestyle Systems (VALS) Typology and List of Values (LOV) Typology in Creating a Market Research Tool for Predicting Consumer Behaviour for Electric Bicycles Author’s Name Authors School The Use of Values, Attitudes and Lifestyle Systems (VALS) Typology and List of Values (LOV) Typology in Creating a Market Research Tool for Predicting Consumer Behaviour for Electric Bicycles Electric bicycles or e-bikes are the rage today in terms of being the most promoted means of transportation, especially in urban cities. Aside from the health benefits that cycling can give to the city’s population, using an e-bike can also contribute in lessening the carbon fingerprint of the whole city and also greatly reduce their need for fossil fuels (Jamerson and Benjamin, 2009 and Lamy, 2001). Many enterprises jumped in on this opportunity and took on local manufacturing of e-bikes, importation and selling of e-bikes and other related industries. The challenge for these businesses is how they will stay afloat as the number of competition rises. In venturing into a business, one must first do a strategic planning and come up with a feasibility study or business plan so as to guide the direction of the business and so that the proprietor can easily remove or dodge certain barricades that may impede in the establishment and growth of the business. One major component of the business plan is to get to know your target market and that can only be accomplished through the analysis of consumer behaviour (Gundlach, 2007). For a business to grow and rise above its competition it needs to occupy a unique niche in the hierarchy of consumer needs that only they can provide – may it be the quality, quantity, or kind of service, quality, quantity, or kind of products or both. Figuring out what exactly the customers need can be determined by analysing the consumer behaviour of those that purchase their products while maintaining a good image for the company and product that they endorse (Chun and Liu, 2013). There are a lot of typographies or models that help quantify consumer behaviour by identifying all the variables that determine purchasing habits. The two that we’ll be comparing and contrasting for the e-bike industry, and that is VALS and LOV. In the rest of this paper, we will be evaluating the two typologies so as to ascertain which among the two models is better to use in creating a market research tool for e-bike consumer behaviour. I. The Values, Attitudes, and Lifestyle Systems Typology (VALS) With today’s ever increasing product standardization, it gets harder and harder for companies to create unique products that are essentially different from the competition’s products. In this case, the difference only lies on how the company markets their products and the psychological differences the consumer associates with their product compared to the rest. (Evans, Jamal, and Foxall, 2009) The VALS typology is a psychographic means of segmenting the whole consumer populace in to different classes based on AIOD – Activities, Interests, Opinions and Demographics, the factors that for this model shapes how the consumers choose to spend. Being a psychographic consumer segmentation system, it classifies the consumers into 8 basic lifestyle groups on the basis of resources and self-orientation which is the determinants of how the consumer may be able to see the product when it is marketed (Businessdictionary.com, 2013). The resources that are taken into consideration in creating the different lifestyle classes include but are not limited to education, income, intelligence, health, energy level and eagerness to purchase resources that in general, increase from youth to middle age then decrease afterwards (Values and Lifestyles, 2013). On the other hand, the components for determining self-orientation are divided into 3 parts: (1) Principle Oriented: keeping a permanent value system, (2) Status Oriented: influenced by other’s perception of one’s self, and (3) Action Oriented: the propensity to lean towards action, adventure, and diversity. Putting these two concepts together should in theory allow the market researcher access to how the consumer might perceive the product which translates to Identification of customer values, a more streamlined New Product Development (PND) strategy, and a more economic market targeting that does not compromise on brand value, an easier marketing strategy formulation and longer customer retention. II. List of Values (LOV) LOV is also a segmentation system like VALS but instead of differentiating the consumers in terms of resources and self-orientation, it views the consumer as a deciding entity that chooses products based on certain dominant personality traits derived from a questionnaire that quantifies 8 pre-determined values: Self-respect, Security, Warm relationship with others, sense of accomplishment, self-fulfilment, Being well respected, sense of belonging, and fun-enjoyment-excitement. According to a person’s score on the questionnaire, the market researcher can somehow know how a particular consumer would react if a product is marketed to him in a certain way. LOV can also be a source of indirect information from the consumers that can still be used for marketing e.g. a person who takes security, warm relationship with others, and being well respected can be a sign that that person has his/her own family and that these values are the ones that he/she would like to instil in their own family. Since the consumer respondent will only rank the values given, the anonymity and the privacy of the consumer remains intact. The questionnaire is also relatively shorter for less information is needed from the consumer responded which is good for busy or pre-occupied professionals that are still part of the sample population. Using LOV expresses the high degree of confidence that the market researcher has with the consumers and this can be a sign of courtesy to the consumers. The responses to LOV can change depending on the demographics, resent past and background of the consumer and if a market researcher is careful enough, the information that can be taken from LOV questionnaires will rival that of any other ways of segmentation. III. VALS vs. LOV in E-Bike Consumer Behaviour Research There have been many test runs and promotions for the use of e-bikes in different countries and in different cities across the globe. These tests were conducted so as to promote the use of e-bikes as well as to see the impact and future problems that may arise with the use of this new mode of transportation. But most of the parameters tested are directed towards measuring the impact on CO2 emissions, additional legislation on the importation, selling, and use of the new vehicle, and the general reception of the residents on the use of the e-bikes. These trials have proven that e-bikes might as well be the answer to the pollution and sedentary life style of most urban dwellers (Drane, Drane, and Farrow, 2009). These data can also be utilized in marketing however, to get the largest impact out of your marketing strategy, you first need to categorize the e-bike customers into their own group based on their purchasing behaviour so that it would be easier to cater to their needs. VALS and LOV can both be used to psychographically divide the population and though both have been models used and proven in a lot of situations, we should still examine them so as to pick which among the two is the better model for establishing consumer behavioural patterns in the population. The classification given by VALS somehow portrays the usual hierarchy present in an urban community setting. Innovators occupy the highest rank, survivors occupy the lowest rank and the thinkers, achievers, experiencers, believers, strivers and makers go somewhere in between. Since the resources of the consumers are also taken into consideration, many aspects of the life of the consumer comes to light and these will help companies cater better to their customers’ needs. Also, since the demographics of the customers are taken into account, many adjustments can be made to accommodate the changes that happen to the customers even before these changes take place. The only disadvantage seen in using VALS for e-bike consumers in the cities is that gathering such in-depth information is hard and time consuming. Many people who live in the cities can hardly spare time for themselves let alone to answer a very personal and quite long questionnaire. Therefore it will be hard to exact good quality data from the consumers which can affect your market in the long run. LOV on the other hand is very short compared to the VALS questionnaire which makes it ideal for people on the go. All the respondent needs to do is to fill up the form and the market researcher will be the one to extract the necessary data. Comparing it to VALS, LOV is more secure and will not require a lot of private information from the participating consumers. The parameters considered is relatively small that’s why analysis of data will comparatively be easier than when the preferred mode is VALS (Ardilly and Tille, 2006). However, LOV really only considers a few parameters unlike VALS. The customer in VALS are taken as complex individuals with a lot of facets that influence their purchasing behaviour whereas LOV postulates that the consumer’s behaviours and thoughts all come from the value system that he subscribes in. The best model to use is really dependent upon the market researcher. It depends on what data you need in formulating your business plan and what you need to get started. Since the electric bike is more advocated in the cities, a market researcher should first see how the whole community acts – what kinds of people are most likely to buy the product and for what use they will be using it? (Ardilly and Tille, 2006) The e-bikes are actually promoted to persons who are already cyclists in their respective cities (Jamerson and Benjamin, 2004). The marketers should consider that these cyclists have their own bikes at home and they need to convince these people to buy another bike or repurpose their bikes and make them run on batteries (Graham and McGowan, 2008). The marketing specialist of these companies also has to figure out a way to market the e-bikes to the rest of the city population, not the seasoned cyclists only. The widening of the market for e-bikes will ensure stable profit for the companies that have ventured in the e-bikes business. The best psychographic tool to use in segmenting the initial trial population for e-bikes is the VALS for the information gathered will be a more direct look into the individual consumer’s wants, needs, and motivations. And since all information is first-hand, you can re-analyse and repurpose some of the trends seen in the questionnaire for determining the age and gender strata wherein a marketing strategy will boost the sales and acceptance of e-bikes (Bell, 2010). Among the two, the better tool is VALS even though it is harder to implement. When infusing a new product into the market, you really need brand/ product loyalty and that can very well be established using VALS instead of LOV. Everything lies on how the market researcher would maximize the information gathered in with the research tool and how he/she would design the marketing plan around the information given by the psychographic tool. References Ardilly, P. & Tillé, Y. (2006) Sampling methods, New York, Springer Science Business Media, Inc. Bell, J. (2010) Doing your research project, Maidenhead, McGraw-Hill Education. Businessdictionary.com (2013) definition for VALS and LOV. WebFinance, Inc. Chu, S.C. & Lin, J.S. (2013) ‘Consumers Perception of Corporate Social Responsibility in the United States and China: A Study of Female Cosmetics Consumers’ International Journal of Strategic Communication, vol. 7, no. 1, pp. 43-64. Drane, P., Drane, M., Farrow, N., World Wide Entertainment (Firm), Pipeline Media (Firm), & Edit Shop (Firm. (2009) Green matters: Disc 5, Episodes 17 to 20 East Melbourne: Pipeline Media [distributor]. Evans, M., Jamal, A. & Foxall, G., (2009) Consumer behaviour, Chichester, John Wiley and Sons Ltd. Graham, B. & McGowan, K. (2008) Bike, scooter, and chopper projects for the evil genius, New York, McGraw-Hill. Gundlach, G. T. (2007) ‘The American Marketing Associations 2004 Definition of Marketing: Perspectives on Its Implications for Scholarship and the Role and Responsibility of Marketing in Society’ Jpp & M : an Annual Publication of the Division of Research, Graduate School of Business Administration, the University of Michigan, Journal of Public Policy & Marketing, vol. 26, no. 2, p. 243. Jamerson, F.E. & Benjamin, E. (2004) Electric bikes worldwide reports: 10,000,000 light electric vehicles in 2004 Naples, Fla: Electric Battery Bicycle Co. Jamerson, F.E. & Benjamin, E. (2009) Electric bikes worldwide reports: Light electric vehicles, Naples, Fla, Electric Battery Bicycle Co. Lamy, V. (2001) Electric Bike 2000 Project, Montréal: Transportation Development Centre, Transport Canada. Values and Lifestyles (2013) 02 Lecture 06 powerpoint slides, University of Derby. www.derby.ac.uk Read More