Analysis of the Buyer Behavior of Demographics and Lifestyle Element: Mercedes Benz C Clas - Essay Example

Analysis of the buyer behavior of demographics and lifestyle element Brand: Mercedes Benz C Summary: The report is intended study the buyer behavior theory and its application in the marketing strategy of the brand under study. The report clearly describes the buyer behavior theory and how a particular theory applies to a brand of choice. The consumer buying process is a complex matter as many internal and external factors have an impact on the buying decisions of the consumer.” (Consumer Buying Behavior. 2007). The particular behavior of the buyers on the basis of the demographics and lifestyle is analyzed here. As the theory speaks about the lifestyle of the buyers the product chosen should be a brand that very much influences the lifestyle of a person. On this context the brand chosen is the entry level luxury brand Mercedes Benz C Class of Daimler Chrysler. The report speaks in brief about the brand its company and its market position among the other competitors. A luxury car would be the best brand to speak about the lifestyle of a person. It is the aspiration of every common man to own a car. But the aspiration becomes a reality when the person becomes potential enough to own a car of his choice. It also depends on the purchasing power of the person. But at many instances the purchasing power never helps a person to achieve his aspiration. It is by taking into account of this mismatch between the aspiration and purchasing power that many companies started to come up with low cost cars thereby creating a revolution in the automobile market. That strategy could be said as the best one ever to be framed on the basis of lifestyle requirements. Wide accounts of the demographic and lifestyle theory of buyer behavior, its application and the influence of the behavior on the particular brand and on its marketing strategies are dealt with in the coming chapters. The report also analyses whether the brand is in line with the expectations of the prospective buyers. Introduction: Buyer behavior is the most important factor to be considered while formulating the marketing strategies of a product or brand. A product will record only success stories in the market if it is the one that is launched after thorough analysis of the buyer behavior and expectations. Need of the consumer is the prime factor to be considered by a marketer while planning the brand strategy. Abraham Maslow’s need Hierarchy theory is an important and unambiguous theory that states about the need of a consumer and the effect of the need on his purchasing behavior. Marketer should analyze in detail why a purchaser chase a product. The report intends to learn about the influence of the buyer behavior demography and lifestyle on the marketability of Mercedes Benz C Class. The buyer behavior on the luxury products are generally driven by the demographic and lifestyle factors. Mercedes Benz C class being an entry level luxury car, its market movement is strictly based on the demographic and lifestyle factors. The brand is faces stiff competition from other auto majors BMW, Audi of Volkswagen, Lexus, Jaguar, Cadillac, etc. Lifestyle is the most factors that influence the market strategy of these brands. Even though Mercedes Benz is a market leader in the luxury car segment introduction of new models by different companies had given sufficient choice for the consumers to choose from. It is the demographic and lifestyle factors that all the competitors consider while they plan to launch new models. An improper understanding of the buyer behavior leads to marketing myopia. Marketing myopia makes the product fail in the market. Brand Review: The brand selected for the study is Mercedes Benz C Class. C Class is always the first choice of any Mercedes aspirers. It is produced and marketed by Mercedes Benz headquartered in Germany. The C Class is often known as the ‘Baby Benz’. C Class stands out on its looks from other cars. The C Class is almost similar in the styling with other sedans of Mercedes Benz. Its three pointed star is the ultimate mark of luxury. “Invariably, the C-Class is cross-shopped with its countryman rivals, the Audi A4 and BMW 3 Series.” (Mercedes Benz C class review. 2007). C Class equips many safety and comfort features that differentiate it from the other players. The first C Class was launched in the market in 2001. The model is launched in four variants which are C230 sport, C350 sport, C280 Luxury, and C350 Luxury. The sport models generally come in manual gear transmission and the luxury model come only in automatic transmission. C Class was dominating the entry level luxury segment market for four years since its launch as there were not much players to introduce competent models in this segment. C Class has now made a drastic makeover in its looks for the 2008 launch. Overview of the theory: Theory of buyer behavior refers to the aspiration of the consumers about a particular product. The attitude of a consumer towards a product is based on the needs and aspirations of the consumers. “It is important to understand the relevance of human needs to buyer behavior (remember, marketing is about satisfying needs).” (Consumer buying behavior. 2007). All the theories of buyer behavior are based on the needs of a person. Abraham Maslow’s need hierarchy theory states clearly about the different needs of a person. This theory states that the needs of a person can be distributed at five levels in a pyramid. Starting from the lower it can be classified as physiological needs, safety needs, social needs, esteem needs and self actualization needs. The purchasing behavior of a person is strictly influenced by these five needs. A person without being satisfied with the physiological or basic needs of food, water, clothing, shelter and sex will not go for the next level needs of safety, social and esteem. The theory under study in this report is demographic and lifestyle factor. The demographic factor of the behavior includes many factors such as Occupation, age gender, marital status and income level of a person. The lifestyle factor is included in the psycho graphical factor. The lifestyle factor arises as a result of the esteem need of a person as stated in the Maslow’s need hierarchy theory. The study of consumers helps firms and organizations improve their marketing strategies by understanding issues such as how The psychology of how consumers think, feel, reason, and select between different alternatives (e.g., brands, products); The psychology of how the consumer is influenced by his or her environment (e.g., culture, family, signs, media); The behavior of consumers while shopping or making other marketing decisions; Limitations in consumer knowledge or information processing abilities influence decisions and marketing outcome;  How consumer motivation and decision strategies differ between products that differ in their level of importance or interest that they entail for the consumer; and How marketers can adapt and improve their marketing campaigns and marketing strategies to more effectively reach the consumer. (Perner 2007). Demographic factors: The occupation of a person affects his purchasing behavior to a great extend. Occupation may vary from person to person. It may be in the form of own business or an employee in any other organization. The grade of the occupation level is the factor that influences the behavior. The purchasing power of a person is based on the returns that he gets from a particular occupation. There is certain occupation that invites better status for the person among the society. Age is another demographic element in buyer behavior. The needs and aspirations of a 25 year old person vary very differently from that of a 45 year old person. Generally fashion products have more market among the youth than that of the old. The old are more attracted towards the luxury products. Marital status also influences a person’s buyer behavior greatly. The needs and wants of a married person are more among the married person than that of the unmarried. Married persons are more concerned about plans for future. It is because of that the insurance products are sold more among the married. Income level is the factor that directly affects the purchase behavior of a person. More income leads to more purchasing power and thereby to more purchases. A direct relation can be seen in the income level and the buying nature of a person. A high income group person will go for higher priced products than a low income grouped. Lifestyle factors: The life style factor of buyer behavior is a result of the esteem needs of a person. When the physiological, safety and social needs of a person are met he immediately switches to the next level of esteem needs. In this level a person aspires to lead a better lifestyle than others to earn more status in the society. To lead a better lifestyle he goes before the products that satisfy the need. Products that satisfy the esteem needs generally are the luxury products. Air conditioners, expensive laptops, expensive watches, luxury cars, etc. are some of those products. “This influencing factor relates to the way we live through the activities we engage in and interests we express.  In simple terms it is what we value out of life.  Lifestyle is often determined by how we spend our time and money.” (Principles of Marketing. 2007). The lifestyle factor is directly influenced by the demographic element of income. The lifestyle or esteem needs arise as a result of the increase in the income level of the person. The lifestyle need can only be satisfied with sufficient income. Lifestyle need generally have strong base of long term aspiration of a person. The lifestyle factor arises not only as a result of esteem needs but also as a result of the self actualization need of the person. Self actualization is defined as "a process of becoming", "the process of development which does not end.” (John m Kiel 1999. p.167). A person even when he is not satisfied with the safety need will aspire about the higher level need at the current level. It may be the long term goal or the aspiration from the child hood onwards to own a particular luxury product, viz. a luxury car. He can be said to have achieved his self actualization need when he owns a luxury car. So, for many persons achievement of lifestyle need is the satisfaction of long term goal. This shows that the self actualization need is related to the lifestyle need in some instances. Application of the theory: The demographic and lifestyle element of the buyer behavior is seen clearly in the previous chapter. The demographic and the lifestyle factor is the most important element that drives the buyer behavior of the luxury products. In this context the applicability of the theory in the marketability and the market response for Mercedes Benz C Class can be seen. Influence of demographic element: The demographic element as said before includes the occupation, age, gender, marital status and income level. The choice of a buyer for C Class can be attributed to this element. The company can formulate better strategies based on the theory. The occupation factor can be considered at first. The occupation level involves own business and employee of any organization. The person who owns a large and high profitable business generally aims at a luxury product as a short term target. The expectation of such a person may be very higher. Luxury is the primary expectation of a person while he purchases a Mercedes Benz. So, whatever makeover the company makes for the model luxury must not be suppressed. The age factor can also be taken into consideration for improvement. The C Class is looked forward by all groups of potential customers irrespective of their age. Comfort plays an important role in the aspirations of middle aged customers. They also look forward for the luxury element. The company can launch a luxury and comfort focused model for this class of customers. Driving pleasure is the primary factor that the younger generation of the consumers looks for. The sporty feature satisfies them most. Sporty styling appeals them most. A good variant of sporty C Class is a better solution for this. This strategy is also better to help the company compete with the recently launched BMW 3 Series. The gender also applies very well to the marketability of the brand. Basically, C Class and any other luxury cars are aspired by men. The ladies at the same time aspire about luxurious ornaments and other show pieces. So, the advertisement strategy of the company need only be focused on the men. An advertisement portraying a man’s achievement can be very effective in this instance. Marital status, in fact has very less influence on the purchasing attitude for C Class. A direct link between marital status and the marketability of C Class can be less defined. The next element in the demographic factor is the income level. Income level has the greatest influence on the marketability of C Class. The income level can be dealt with the sub divisions of occupation factors which are the employee and business. There is certain person who earns higher pay scale as an employee of other company. He considers the price factor more than the luxury. His choice would be to own a luxury car for the name sake and for status. He would be more satisfied if he is able to buy the car at lower price. A low featured variant of the car can satisfy the needs of such customers. The business owners can be considered next. They can be classified into two groups, those operating a large scale business and those operating a small and medium scale business. The second category of business owners is same as the employee customers. The first category of the business owners buys the car not only for name sake but also to enjoy the product at it’s fullest. They generally go for full option model irrespective of the price. A model equipped with all the luxury and safety feature is a solution for this. Influence of lifestyle element: The theory of the lifestyle element has already been dealt with. Lifestyle need generally involves better living standards. Advertising is the main strategy by which the company can take advantage of the lifestyle need of a person. A market study among the prospective customers can help the company to know more about the requirements of a customer. The company has made a makeover in C Class for 2008 launch. It can be noted that the model has become sportier and the luxury element is lacking. This might reduce the satisfaction level of the customers who want luxury in the looks. Implications for marketing strategy: The analysis of the demographic and the lifestyle elements have shown that the marketability of the product is greatly depended on those factors. So, while formulating a marketing strategy some of the factors must be taken into consideration. The customers who choose luxury as a primary factor looks for luxury in the appearance as well as in the comfort. For this the customers are now left with BMW 3 Series and Volkswagen Pass at which portrays luxury as the primary feature. So more luxury features compared to the other two should be introduced in the model. There are customers who look for sporty features along with luxury. There are more chances for those customers to choose Audi S4 which is the sporty variant of Audi a4 & BMW 3 Series. Compared to C Class more sporty features are equipped in these models both in the appearance and performance. Mercedes should also focus on the launch of a completely sporty variant for the C Class in order to face the competition. A variant with very limited features should also be launched in order to meet the requirements of those who look forward for the name and brand. The company can definitely expand the market share of the brand by following these while framing marketing strategy. Conclusion: The report has very clearly analyzed the demographic and lifestyle factor in the buying behavior of a consumer. The theory is analyzed well with its applicability in the brand positioning of Mercedes Benz C Class. It is seen that how the consumers can be divided on the basis of different behavioral element. By understanding clearly the requirements of different class of consumers a single product can be offered to all of them. It is seen clearly how the C Class could be offered to the sporty and luxury aspirers. The consumers generally purchase a product after several planning process. It actually starts from identifying their exact needs, evaluating the alternative options, etc. Ultimately in purchasing a product like C Class the consumer expects higher quality and good after sales service from the company. There fore a better after sales service must always be a final element in the marketing strategy. Bibliography Consumer Buying Behavior. [online]. Learn Marketing.net. Last accessed 31 October 2007 at: http://www.learnmarketing.net/consumer.htm Consumer buying behavior. (2007). [online]. Marketing Teacher Ltd. Last accessed 2 November 2007 at: http://marketingteacher.com/Lessons/lesson_consumer_buying_behaviour.htm Mercedes Benz C class review. (1995-2007). [online]. Edmunds.com. Last accessed 31 October 2007 at: http://www.edmunds.com/mercedesbenz/cclass/review.html PERNER, Lars (2007). Consumer behavior: the psychology of marketing. Demographic and social stratification. Consumer psychologists. 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