Changing Consumer Behavior - Coursework Example

Changing Consumer Behavior Introduction There have been several literatures concerning the changing consumer behavior. The literatures have offered diverse and dissimilar opinions concerning the way consumers react to what is offered in the market. What has further compounded the issue is the increasing globalization and competition emanating from diverse areas, which has resulted to the complications in predicting the buying habits of consumers, which result to better satisfaction. In order to understand diverse influencing factors on consumer purchasing, and the way such can be utilized by organizations to benefit, I studied diverse literatures, journals and publications. The literatures impacted immensely on my understanding of what actually constitutes consumer behavior. Initially, my understanding was a narrow definition, where understanding that purchasing conduct of a customer. However, with the readings, I appreciate that consumer behavior is rather a process than an occurrence. Consumer behavior in my understanding is therefore a series of steps which works together and makes the customer decide his purchasing habits. Moreover, consumer behavior is also viewed as the study of the intricate processes involving an individual or a group of persons ascribe to in selecting, purchasing, using or disposing of ideas, services, experiences or products in the quest of satisfying the needs and desires. From the organizations’ perspective, consumer behavior involves the manipulation of the market mix with the objective of encouraging the consumers to purchase the organization’s brand. However consumer behavior is more complex, than can be defined by a simple definition, since it further encompasses several fields such as being an art or a science, while predicting consumer behaviors’ is further complicate by other factors such as the fact that understanding consumer behavior demands looking and thinking deeply, people differ and there exists massive range influencing consumer behavior at any given time. The readings have been instrumental in changing my perception on the purchasing behavior if the customers, initially, my thinking was that price is the most influential factor on the purchases made by customers. However, I have appreciated that the purchasing habits of consumers is influences by diverse factors which marketers have to understand order to develop a marketing strategy that satisfies the customer, to enable them seek for the service and product again. It is from understanding various theories, such as utility theory and customer value, where the customer considers the products value as the summation of the price component and the befit of the product. There is also the relatively new behaviorist approach where thoughts and feelings are taken to be the effects not causes, offering that majority of the customer purchases are highly repetitive, low involvement decisions. An influential reading on repetitive, is Byron, Malcolm & Gerald (2002) which offers a different school of thought concerning repeat purchases, arguing that that competitive repeat purchase markets are polarized into two fundamentally dissimilar structures, namely the repertoire e markets, whit few uniquely loyal customers, where a great percentage of buyers allocate their category requirements across numerous brands in a steady fashion. In the subscription markets, there are several exclusively loyal buyers, where most customers assign category requirements totally to one brand. The aforementioned line of argument may suffice in capturing that loyalty may be a behavior, and may be an attitude; however it not sufficiently explains the consumer behavior in new markets. In reading the texts, in defense of repertoire markets, there are various empirical generalizations, which underlie the marketing practices. Whereas, there are diverse literature to explain repeat purchases and loyalty, it is generally accepted that differences in market share is a consequence of differences in penetration, such that brands categorized as higher share have more clients than lower share brands, these generalization is supported by various literatures. Another important generalization is the Duplication of Purchase Law, where brands share their clients with other brands following each brands penetration; moreover solely loyal customers are lighter buyers of the overall category, and are comparatively rare and reduce over time, while heavy buyers tend to exhibit diversified brand purchasing. Purchasers of a given brand also more frequently buy other brands, while consideration of loyal buyers follow the double jeopardy pattern, where small brands have less loyal following and have fewer customers. From the literature read, I also learned on the Subscription Market Patterns, which is a wide class of markets, which differ from the some of the conventional repeat purchase generalizations, where the Dirichlet model fails to hold for these different markets, since the values for the primary parameters largely deviate from the expected generalizations, when observed from the taxonomical and empirical point of view. In the market arrangement, customers tend to subscribe for some periods of time to a single provider, hence having a brand with a large proportion of the buyers being the loyalists. The diversity presence of subscription based markets and repertoire purchasing has several applications, such as being utilized by managers in benchmarking rates of sole brand loyalty and share of classification requirements, where the managers have to clearly understand the type of markets they are dealing with, in order to have viable strategies depending on the market. Moreover, understanding the variations enables development of diverse approaches to marketing programs, while permitting the development of metrics to measure the loss of customers and development of customer relationship management programs. Conventionally, it is believed that having the right product at the right time with the right price in the market, shall definitely result to increased sales, however, it is from understanding consumer behavior such that facts can be separate from the perceptions which may not actually hold in the market. From the readings, I therefore appreciated the importance of understanding the consumer behavior, which has gained prominence with time, such that more organizations have appreciated and implemented consumer behavior conscious strategies. This is driven by research findings which affirm that marketers which are able to understand the consumer behavior are able to develop products matching the customer requirements which helps to create a positive impact on the financial figures and helps the business to grow, hence have strategic competitive advantage over their competitors. From the initial assignment, I got to appreciate that increased competition has resulted to and made it mandatory for businesses to appreciate consumer behavior and at the same time design loyalty programs in such a manner that it helps to retain customers and ensures that the business is able to sustain in the long run. It is therefore of significant importance that a business has the needs and desires of its clients met, such that in developing loyalty programs, the business has an upper hand, in meeting customers’ requirements. The publication by Sharp, Riebe and Dawes, (2002) however presents a different picture. The authors present while supporting the conventional economies of scale, further presents that big firms suffer from lower “churn” rates than do smaller firms, and it treats such as an economy of scale. In the explanation, big firms have less client turnover, which is a function of lack of partitioning and market stationary, with the consequence being that larger brands have relatively lower customer acquisition costs than smaller ones. The argument however, may not be satisfactory to me, since in retrospect fails to appreciate other factors, which may severely influence the cost, apart from the brand such as the exogenous factors. The authors support the concept of repertoire and subscription markets, adding that loosing brands have higher defection than acquisition rate, while defection rate may serve as a function highlighting the market share that the brand is trending towards. The publication is influential in enabling the managers to set realistic objectives in customer retention. Rothschild and Gaidis, (1981), offer diverse information, which significantly alters the way I would work as a marketing specialist in the future. The research explains the incentive scheme in the behavioral learning, through utilizing two dimensions for incentives, namely the timing of reinforcement, (immediate vs. delayed) and the types of reinforcers (primary vs. secondary) and furthermore offers insight into incentive-purchase behavior relationship considering the shaping paradigm. The study further offers insightful opinion that the ultimate destination of all incentive programs is the delayed-secondary reward, considering that the ultimate products should not be overshadowed by promotional tools and incentives. The study further offered that secondary reinforcers do not have intrinsic utility, while primary reinforcers intrinsic utility. The reading changes the way; I will work, since I could elicit clients ’repeat purchase behavior through a well-designed reinforcement program, which begins from the primary-immediate reinforcement to the secondary-delayed reinforcement. Explanation The first stage is the issue identification, in this stage, the potential seeker identifies that there is need for a house. This is caused by diverse happenings and circumstances such as rise in social status, family growth and need for bigger space. This stage involves that highlighting of the problem. In the analysis stage, the persons concerned perform informed scrutiny and examination of the current state. This includes considering the past, the present and potentially the future, as well as desired personal and family objectives and expectations. Analysis includes examining the current family size and social/financial capability. Development of alternatives involves utilizing the outcome of the analysis and developing diverse strategies and alternatives, which may be pursued to achieve the desired objective. This includes visiting several real estate agent websites, reading adverts and physical searching. Evaluation of alternatives is a stage involving considering the offerings in terms of advantages, disadvantages and challenges of the presented alternatives. Recommendation is offering for consideration, the alternative house, which seems to be most appropriate, when all the facts have been considered. Decision is taking action towards acquiring the house, while implementation is the actual purchase and transfer of requisite documentations to the purchaser. Different people play diverse and complementary roles in the housing purchase process. All the roles are obstinately aimed at purchasing the best house depending on the individuals’ judgment and way of thinking. In every role or responsibility performed, the consumer behavior is imperative towards determining the ultimate decision. The roles played by persons are influenced by their gender. Women are more likely to play expressive roles, which involve the emotional needs of the family and the aesthetic constructs, hence play the role of influential decision makers in terms of the requirements of the children, flow of the house, color and design. The males are more likely to play instrumental roles, hence make influential decisions in terms economic and functional aspects of the house, encompassing location, maintenance and finance. It is important for the real estate agent to know the roles people play and their preferences so that they can utilize diverse marketing strategies to attain maximum sales, through offering potential buyers customized services tailored to suit their needs and preferences. According to the marketing theory, outlined by the Motivation Theory and Marketing Strategy customers are more interested with purchasing the problem solutions or buying motive satisfaction rather than the product. The real estate agent should therefore understand the roles people play, such that they ensure that the buildings they offer are suited towards meeting motive satisfactions or being problem solutions. The agents should discover the motives that their buildings can satisfy and base marketing mixes around these motives and preferences. Types of strategies used to influence family decisions A family decision is more of a communal decision where diverse competing interests are converged together to make a single decision. A common strategy is the persuasion strategy of presenting the advantages and disadvantages of each option. A partner well conversant with the alternatives on offer may point out the pros and cons to convince other family members to decide according to what they person desires. Other strategies include Satisficing which engages the using the first acceptable option found. Simple Prioritization is a strategy involving choosing the alternative with the highest probability-weighted utility, while acquiesce is also a strategy where other family members may make their decisions based on authoritative instructions. From the perspective of Elaboration Likelihood Model, Nestle has been focusing on the peripheral route of persuasion, which is an emotional involvement. The company has not aggressively used the central route alternative, which is more of cognitive. The approach utilized by Nestle is a suitable for several reasons since it provides successful results when the delivered messages have low receiver involvement, or in some instances low receiver motivation. The approach is also appropriate considering that the adverts used by Nestle are aimed at persuading the consumers who may not understand the details on a message at length, by using factors that may not be directly related with what is contained as the content of the message itself. The bright colors in the adverts and packaging as well as celebrity endorsements, captures attention of the consumers and creates familiarity between item such as the celebrity and the Nestle product, hence creating positive perceptions about the product. The emotional focused approach is easier to develop, but it has some challenges. The impression created to the consumer by the emotional approach is short lived, not strong and momentary when compared with central persuasion, since the adverts have to be repeated for a long period severally, for the messages to be instilled on the consumers. Nestlé’s advertising and innovative packaging will therefore allow the company to emotionally connect with consumers, since it fosters peripheral persuasion. Reference Sharp, Byron, Riebe Erica and Dawes John, 2002, Read More