Consumer Behavior and Marketing Development Strategy - Literature review Example

Consumer Behavior and Marketing Development Strategy Name Course Tutor Date “The study of Consumer Behavior is Essential for the Successful Development and Implementation of Marketing Strategy” Introduction In the recent years, Globalization has increased tremendously increasing competition in many sectors of the economy. The consumers are finding alternatives due to the entry of many companies making the same products in the markets (Hansen, Risborg & Steen, 2012, p.477). Some of the perception of the consumer is that products from global countries are superior. On the other hand, the economy is fluctuating quite often making it difficult to have the same trend of shopping. For that reason, satisfying consumer needs is becoming difficult. When consumers realize a company cannot meet their demands as they purport, these consumers will turn to competitors (Paasovaara et al, 2012, p.12). This prompts marketers to carry out comprehensive research to understand, perceptions and anticipations of the customers. The consumer behavior normally changes according to income, occupation, level of education and family backgrounds. Based on the information, this paper argues that the study of Consumer Behavior is essential for the successful development and implementation of marketing strategy. Importance of understanding Consumer Behavior American Marketing Association defines consumer behavior the active relations of cognition, environmental and behavior by which human beings carry out the exchange elements of their lives (Quester et al, 2014). This is discipline deals with why and how consumers purchase or do not purchase products and services. Experts claim that consumer behavior blends well with disciplines like marketing, economics psychology, social anthropology and sociology (Quester et al, 2014). In an attempt to understand that market, marketers consider consumer behavior so as to make about buyers, and understand how emotions influence buying behavior. Dennis et al (2009, p.1124) argues that to sustain competition in the marketplace, an organization has to be continuously innovative and know the latest consumer demands. For instance, Samsung understands that some consumers do not like the bigger laptops; hence they make the mini laptops which are light and easier to carry for such customers. It will be greatly useful in capitalizing on the marketing opportunities and facing the challenges which the market offers. Marketing processes and consumer behavior can be considered to be intrinsically related (Dennis et al, 2009, p.1127). Without getting a degree of understanding what influences customers, marketers can have a difficult time determining the correct market segments and developing marketing strategies which will draw attention. Blackwell et al. (2006) claim that Studying consumer behaviors enable marketers to enhance their strategies since it offer them insight into understanding what influence buying decisions. Marketers would want to attempt and get what makes customers tick as they consider their taste and learn what the forms of choices results to their final decision (Tinson et al, 2013, p.438). This manner in which the, marketers can align their market and products to remain competitive and hopefully be preferred by the consumer. Cai & Shannon (2012, p.38) posit that Organizations require understanding their target audience, where they are, what they need and how they will respond to product marketing. Market development and strategies Market development process is an improvement strategy which determines and creates new market segments for the existing products (Blackwell et al, 2006). This is done because the sales have gone down due to changes in consumer behavior. With rapid developments in technologies, life cycle of products has become shorter than before (Dennis et al, 2009, .p1131). Yoona, Catherine & Michelle (2009, p.7) contends that for a company to remain a top competitor in a market, the manager requires to constantly enhance current products and develop the new ones. With a look at the Iphones, it is very clear how this product have developed by Apple Inc. since 2004. Since then there have 8 iphones that have been released; from original iPhone to iPhone 5S which was released in 2013. On the other hand, market development strategy is an approach which targets consumers who may have just stopped buying or who have never purchased from you. Knowing the consumer can help the marketing manager to develop the products, diversify and penetrate the market. Before developing the market, understanding customer value is very important (Yoona, Catherine & Michelle, 2009, p.5). Value is a perceived importance of a product or service to a customer. This comes as experience, attitudes, and situation. It is the consumer’s general conclusion concerning the given marketing mix such as product, price, promotion and distribution which the mix it provides (Paasovaara et al, 2012, p.15). Providing customer value is an objective every producer or business desires to attain. Given that with a higher perceived value on a company’s products or service, the company will be capable of easily holding on to its clients and these clients might bring more consumers to the company (Cai & Shannon, 2012, p.38). According to Cai Y & Shannon (2012, p.41) in an aim of creating value, the organization must understand the market and the needs of the customers, design the market strategy, formulate an integrated approach marketing mix, create good relationships with consumers and capture the value. This is what Apple Inc has been doing since the time of Steve. The company could study the market and come up with products which is not only superior. One such product is iphone 5S which a fingerprint recognition application which enhances security. Marketing development also incorporates market segmentation. Hansen, Risborg & Steen (2012, p.479) claim that After understanding the consumer behavior and their needs the marketing manager can segment its marketing according to age, income, occupation, attitude, economic conditions, culture, lifestyle and purchasing habits among others. Consumer needs normally change with changes in age. Therefore, various organizations employ age segmentation to target their consumers. Income segmentation is frequently applied by different organizations which make cars, luxury furniture, clothing and jewelry (Paasovaara et al, 2012, .p17). Income changes can directly influence consumers’ want and the patterns of spending. Consumers with high income will purchase expensive products compared to consumers with low income (Pickett-Baker & Ozaki, 2008, p.291). Consumers have different buying habits and what they look for in a product. The appeal in product plus the income level forms their decision in settling for the product (Canniford & Shankar, 2013, p.1053). However, create customer loyalty positioning make a good strategy for marketers. The majority of present owners of the luxury cars tend to buy the car he previously had; the customer has prospectively built an attitude towards it (Canniford & Shankar, 2013. p.1055). For instance, individuals who have had appositive experience with Audi cars will definitely buy the same in future. In this aspect, an attitude turns out to be an assessment judgment that is desired or not desired on the basis of prior or current experience like the previous liking from products or services (warranty), experience from driving, and socio-economic class of consumers (Tinson et al, 2013, p.439). According to Tinson et al (2013, p.441), there is also a possibility that attitude could be developed on the basis of previous information with no experience, as when the consumers build up preferences or misconception for brands founded in the image of the brand in the market. This situation lies mostly on individual customers’ purchasing power. Customers could have a positive attitude on some producers’ luxury automobiles, but might lack the capability due to inadequate purchasing power or readiness to make the buying decision (Canniford & Shankar, 2013, p.1057). Some of the activities by the markets could help consumer make buying decision. One such activity is the Consumerism. This is a set of activities in which the organization’s top management formulates to safeguard consumer from unethical conduct in the market. Such activities include honest advertising and packaging, enhanced safety standards and product guarantees (Hansen, Risborg & Steen, 2012, p.483). Health concerns have increased a great deal that consumers are now keen of how companies deal with such situations. In the past, Coca Cola have experienced Boycott and ban on its products because of health related concerns. The EU member countries ban coca cola production because of the accusation that it used wrong carbon II oxide in its manufacturing of Coke, an action which poisoned one hundred children in Belgium (Canniford & Shankar, 2013), p.1063). Another issue that is of challenge in the business environment is the ethics in marketing. Every consumer normally has their interpretation concerning and advert (Canniford & Shankar, 201, p.1067). On one spectrum the consumer thinks that certain ad is an ethical, and on the other spectrum, the marketer believes that is the best ad for their company. To resolve consumer behavior aspect, the market needs to spend time on the ground understanding consumer perception and views before creating an advert. Pickett-Baker & Ozaki (2008, p.91) affirm that for marketers, ethical marketing is a must, lest the ad be used against them by the competitors and even the consumers to desert its products. When the company has strong brands, outstanding marketing, and the consumer will go extra mile to sacrifice his time and income to buy such brands. In several significant perspectives, consumerism is employed to explain the tendency of individuals to identify themselves strongly brands they use, particularly those with the business brand names and perceived status appeal, for instance, designer clothing, luxury car, expensive jewelry etc (Paasovaara et al, 2012, p.16). With many challenges affecting human kind such as calamities, consumers are now concerned how the business community help in such situations. Cai & Shannon (2012, p.44) claim that the consumers believe that when a company operates within a society they business should not just be paged on making profits since what affects people are beyond the exchange of money. Consumer influences and marketing decisions On a daily basis people normally shop what they believe can satisfy their needs. However, before making such decisions, consumers are often influenced by some factors that play an important part in their lives. Such factors are external influences, internal influences, situational influences and decision-process influences (Hansen, Risborg & Steen, 2012, p.484). Based on understanding those mentioned factors the business stand a chance of making good marketing decisions. External factors are key influencers of consumers’ behavior. The management of these factors, mainly in the consumer decision-making process, is significant for the accomplishment of any potential business objectives. The marketers can study the factors and can employ the existing tools to them to control the social environment. Some of the elements that are important in marketing strategy are culture and values, demographics, social income and class, references groups and marketing activities (Hansen, Risborg & Steen, 2012, p.462). Initially, Coca-Cola had cultural differences issues in China because the company name sounded ‘Kooke Koula’ which in Chinese is translated as ‘A thirsty mouthful of candle wax’. However, they were able to discover an innovative pronunciation ‘Kee Kou Keele’ meaning ‘joyful tastes and happiness’ (Canniford & Shankar 2013, p. 1067). Social factors also influence how consumers behave in their respective settings. People normally shop according their social class, income and age. Social class is divided into three segments, including upper class, middle class and lowest level. Income is not stagnate and changes quite often; people move from a lower class or middle to upper. In the society, social class determines where people reside. After studying the social class, businesses can decide to target the upper, middle or lower class (Yoona, Catherine & Michelle, 2009, p.7). However, businesses that are doing well have developed products for each of these classes. On the contrary, every consumer normally has a unique personality. It is this uniqueness which is internal that drives ones needs. Quester et al (2014) state that some of the internal influences that drive marketing decisions include needs, motives and emotions, perception and memory, personality and lifestyle and attitude. Each purchasing decision entails a particular process which happens in the customers minds. The first phase in the process is recognition of the need. The need is stimulated by the internal stimuli (Quester, et al, 2014). When the consumer’s need is satisfied they become motivated and loyal to the company. Perception is greatly determined by marketers influence through activities like advertising or from a friend’s narration about the product. Markets must create outstanding ads which relate well with the products they are offering (Paasovaara et al, 2012, p.14). Consumers are known to get disappointed if the company cannot satisfy their perceived needs. Another factor which determines consumer behavior is the situational influences. Situational factors which impacts consumers’ buying behavior considerably vary from personal to product factors (Blackwell et al, 2006). These factors range from physical, time, social, task to antecedent. According to Blackwell et al. (2006) consumer will decide to go buy a product depending on the physical location of a place, weather, and store design among other factors. Similarly time is always a factor for consumers bearing in mind that the world has become a global village. In this aspect, the question they ask is; how fast can they buy or get their delivery? Last the consumers normally go some decision process before settling on a product. This decision is a two-traffic situation. The decision is informed by the internal influence and also the market’s influence. Quester et al (2014) maintains that the decision-process influence involves need recognition, information, alternative evaluation, outlet selection, purchase and post-purchase processes. As mentioned earlier, need recognition is stimulated by a stimulus which is internal or external. For instance, Coca Cola consumers their need recognition is determined by feeling thirsty. This is followed by searching for a product he or she feels can satisfy this need. Conclusion From this research, it is concluded that in order for organizations to be successful in their development and implementation of market strategy they must engage in a comprehensive research of consumer behavior. This research will ensure that their strategies are tailored in within the factors that influence consumer’s behavior including external and internal influences, situational influence and decision-process influences. As a result, they will be able to fall within most of these influences even if they keep on changing. References Blackwell, R. et al. (2006).Consumer Behavior, an Asia Pacific Approach, Cengage Learning, Australia Canniford, R & Shankar, A. (2013). Purifying Practices: How Consumers Assemble Romantic Experiences of Nature. Journal of Consumer Research, Vol. 39, pp. 1051-1069. Cai, Y & Shannon, R. (2012). Personal values and mall shopping behavior: The mediating role of attitude and intention among Chinese and Thai consumers. Australasian Marketing Journal (AMJ), Vol. 20, p.37-47 Dennis et al (2009). E-consumer behaviour. European Journal of Marketing, Vol. 43, pp.1121 – 1139 Hansen,T., Risborg, M.S & Steen, C.D. (2012).Understanding consumer purchase of free-of cosmetics: A value-driven TRA approach. Journal of Consumer Behaviour, Vol.11, pp 477– 486 Paasovaara et al. (2012).Understanding consumers' brand-induced food taste perception: A comparison of ‘brand familiarity’ – and ‘consumer value – brand symbolism (in) congruity’ – accounts. Journal of Consumer Behaviour ,Vol. 11, pp. 11–20 Pickett-Baker,J & Ozaki, R. (2008). Pro-environmental products: marketing influence on consumer purchase decision. Journal of Consumer Marketing, Vol. 25 Iss: 5, pp.281 – 293 Quester, P, Pettigrew, S, Kopanidis, F, Hill, S & Hawkins, D. (2014). Consumer Behavior 7th ed. McGraw-Hill Australia. Tinson,J et al (2013). Attitudinal and behavioral resistance: A marketing perspective. Journal of Consumer Behaviour, Vol. 12, pp 436–448 Yoona, C., Catherine A.C & Michelle P. L. (2009). Consumer decision making and aging: Current knowledge and future directions. Journal of Consumer Psychology, Vol. 19, p. 2– 16. Read More