Consumers Behavior in the Dynamic Nature of the Marketing Environment - Essay Example

Consumers Behavior In the Dynamic Nature of the Marketing Environment The marketing environment is never static and looking at its dynamic nature, company adopts its marketing strategies understanding various factors that determine consumers’ behaviour. Victory of any company in the market rests on the way it understands changing needs of the consumers and the way it adopts its various approaches toward these needs. In this highly competitive environment, the success of any firm and business venture depends on the firm’s approach towards its customers and understanding their behaviour including trying to find the answers to the questions why, where, what, and when they buy? Understanding consumers is the most crucial task on part of every marketing manager as he tries to solve the basic problems of consumers in the area of consumption and in devising his plans and various propositions. While understanding the consumer behaviour, the first step is the need to understand the buying process. Several models have been developed to understand this concept of the buying process, which is made up of three stages namely: input-process-output. It is a process that begins well before a product is bought and extends well beyond that and moves along the five steps namely need recognition, information search, evaluation and intension, purchase decision and post purchase reaction. (Cooper & Channon 1998: 109) The starting point of his buying process is his need recognition arising out of the awareness of the want or desire or without whose satisfaction, the consumer feels restless and tension charged. These needs or wants arise either due to the internal or external stimulus. For the marketing experts, this stimulus is a sign or a cue for them to understand the desire of customer but this need will be only aroused when the product is available because the interest of the consumer is indicated in his willingness to seek further information about product and satisfaction he can get from that product. This information he can attain from his friends, relatives, neighbours, dealers and advertisers etc., which helps him further in formulating his decisions. Further it is the consumers’ deep interest in the product or services that paves the way for his evaluation and intention. This evaluation stage is his mental trial for these products and services whereby he assigns values and weightings to different products and services based on the accumulated information and judges the relative worth of the alternative products and services from the angle of want satisfying potential. After the evaluation only, he formulates the intention to either accept or reject a given product or service. Once he has made his intention clear, he formulates his decision to buy the product. His decision to buy the product implies his commitment for the same. Practically it is the last stage of the buying process because of it, the exchange process has been completed. (Sontakki 2008: 128) Thus purchase could be a trial or adoption. Consumer gives trial to the product when he is buying the same for the first time but the consumer’s behavior does not end here as his reaction is seen and judged even after the purchase has been made. This process is known as post purchase reaction. If the products satisfy consumers, they will make more purchases and will also recommend the same to the others else they would buy alternate products. The buying patterns discussed above are influenced by many other factors in turn changing the whole concept of marketing. These factors are changes in fashion, demographic changes, changes in consumption pattern and above all development and political changes stimulated by micro as well as macro environment. (Jesselyn 2007: 121) The microenvironment is further divided into internal as well as external environment. The internal environment constitutes the management structure of the firm, its strategies and the objectives the firm needs to fulfill. These concepts along with the characteristics of the firm affect the way firm gives services to its customers. On the other hand, external environment constitutes suppliers, intermediaries, customers, competitors as well changes in the trend etc. The demographic environment is in turn based on the changes in the mix of the age groups in the population for e.g. products used by the older people will be different than the products used by the younger generation and if the older people are more this would create more demand for the products relevant to their needs and aspirations. Hereby mention can also be made about the ethnic mix group of consumers on account of large number of immigrant population creating effect on the tastes and preferences of the host nations leading to the change in the demands. Furthermore tastes of immigrants themselves are changed as they come in close proximity to the culture of the host nations leading to the increase in the variegated markets catering to the demands of different religions, castes, ethnic races etc. Lifestyle of the people also has an impact on the changing face of the market creating marketers to spearhead this change for e.g. in Western nations, there has been growth in the single ownership households whose demands are more for the products that can give them easy and convenient life. There are also various couples that are staying away from their children as they have more of the income at their disposal to spend on holidays, luxuries and for renovation of their houses. Marketers also have an impact on the economic aspect, as it affects amount of money people could spend on products and services. These economic determinants among others are personal income, family income and income expectation level of consumer credit and level of standard of living. Personal income is the reward for the one’s economic efforts, which means purchasing power of the people. When we talk of the income in the marketing scene, we generally talk about the disposable income and discretionary income. Disposal income is the amount of money consumers have at their disposal for spending and saving or for both and any change in the disposable income will turn have an impact on the change in consumers buying decisions. Decline in the disposable income reduces spending behaviour of consumers and increase in the same will increase not only the overall demand but also more demand for luxury products. Similarly discretionary income is the income available after meeting the basic needs for living. The changes in the discretionary income have their own implication on the changes in the behaviour pattern resulting in the increased spending by consumers on those items that give boost to their standard of living. In many situations, future income expectations of the consumer too influence consumer behavior. If there are bleak prospects for the future expected income, he will spend less now else will save more and vice versa. If we see overall market scenario, we will find economies across the world not only differ in their level of wealth but also in the way they distribute wealth within the population. For e.g. in the poor nations there would be inequality in the way wealth is distributed because overall it creates an overall effect on the amount of money people could spend on their products and services. Moreover consumers also differ on the saving patterns they display and also make use of the credit facilities. As people save more and more, their consumption pattern will become lower and could have an effect on the macro economy. In a nation where people have more tendency to save, they have lower interest rates that could have an affect on the borrowing costs and simultaneous only the demand of the products. The next most important determinant factor is nature as this is a basic criterion that influences the demand. Upheavals in nature create specific changes in the demand of the products for e.g. during winters people prefer woolen clothing and hot food etc. This makes firms to change their production strategy for more of the woolen clothing. Moreover increase in the cost of raw materials will also shift the whole production pattern and an economic set-up coaxing consumers to change their demand. The increase in prices of raw materials also means increase in the recycling of many materials like aluminum, which is more economical than the previous one. There is also rise in the pressure of people from many sectors to reduce production of products having deterrent impact on the nature. Moreover the increase in the cost of the energy will also make people decide upon their purchasing behaviour in favour of energy saving products or devices. For e.g. many of the European nations make use of the catalytic converters in their cars to reduce to the maximum impact the level of poisonous gases that are emitted into the atmosphere. Globalization and continuous changes in technological developments also present before the marketers several challenges in the form of threats from competitors and changing demography as well as opportunities to tap the market in their stride. Though a firm can produce in front of the customer vast majority of products yet it could also mean that it could have more technical solution to satisfy customers. When a market moves towards one technological standard, there can be more problems for marketers who have shown promotion for alternative standards. Marketers have to look at various means to keep on developing their technology to keep themselves ahead of the others in the market. Any effort by the marketer or a company or firm revolves around the consumer and his behaviour pattern towards the specific product. Behaviour is a mirror through which every one can show his or her image and is a process of responding to a stimulus. Through understanding of consumer behaviour is not only a specific market device yet also a strategy to make decisions to give competitive edge to the firm over others. Consumers are the arbiters of fortune in business therefore in today’s marketing scenario, no marketer can afford to succeed without understanding the knowledge of consumer and his needs. Reference List Cooper, C.L. & Channon, D.F. 1998. The Concise Blackwell Encyclopedia of Management. Blackwell Publishing. Foxall, G.R., Goldsmith, R.E. & Brown, S. 1998. Consumer Psychology for Marketing London: Thomson Learning. Jesselyn, M. 2007. Entrepreneurship. Cape Town: Pearson Education. Kotler, P. and G. Armstrong. 2004. Principles of Marketing. Upper Saddle River, NJ: Prentice Hall. Peter, J.P. & Olson, J. 2004. Consumer Behavior and Marketing Strategy New York: McGraw-Hill Education. Sontakki, C.M. 2008. Marketing Management. New Delhi: Kalyani Publishers. Read More