Consumer Behavior Critical Analysis
What does the purchase of a product like Nike mean to Sunder Singh? Sunder Sing, just escaping homelessness is clearly proud that he was able to save and buy a pair of Nikes.He could undoubtedly have purchase a different brand that would have met his physical needs as well for much less money which he does not say why he bought the more expensive Nikes, a reasonable interpretation is that they serve as a visible symbol that Sunder Singh is back as a successful.Sunder Singh is not Unique among low-income consumer in wanting and buying items such as Nike shoes.As one expert says.
“The low income consumer wants the same product and services other consumer want”.
He suggests that marketing efforts reflect those desires. Another expert state. There’s this stereotype that they don’t have enough money for toothpaste and that’s just not true. There has been some significance to them being called lower income, but they do buy things. The working poor are forced to spend a disproportionate present of theirs income on housing, utilities and medical care due to lack of insurance.They generally relay on public transportation, they spend a smaller portion of their relatively small income on meals away from home and all forms of entertainment such as admission, pets and toys; they spend very little on their own financial security.
However Sunder Singh illustrated they spend the same percent of their income though a smaller amount on apparel and accessories. 2. What does the story say about our society and the impact of marketing on consumer behavior? “Society can exist without Marketing, but Marketing cannot exist without Society”Marketing is the management process of anticipating, identifying and satisfying customer’s requirements. The various conventional marketing tools- advertising, branding, direct marketing, sales promotion, publicity & public relations. Effect of marketing on society, in particular on Vulnerable Groups Marketing and society, the commensuration of the two words raises a few eyebrows, as it is highly debatable. On the one hand, Society thrives on the marketing efforts of the Companies, while another school of thought argues that marketing makes the society more materialistic.Today, striking a balance between the two is the challenge faced by the Marketers.
The society expects the business to be ethical and desires corporate executives, at all levels to apply ethical principles in other words, guidelines as to what is right and wrong, fair and unfair, and morally correct, when they make business decisions. Advertisers are traditionally use techniques to which children and adolescents are more susceptible, such as product placement in TV shows, tie in between movies and fast food restaurants, to mention a few.Therefore there exist many marketing evils that lure people to buy even when not required. Case III Star Airways 1. What is likely to be the decision process in case of choosing an airline? Buyer decision processes are the decesion making processes undertaken by consumers in regard to a potential market transaction before, during, and after the purchase of a product or service. More generally, decision making is the cognitive process of selecting a course of action from among multiple alternatives. Decision making is said to be a psychological construct.
This means that although we can never “see” a decision, we can infer from observable behaviour that a decision has been made. Therefore we conclude that a psychological event that we call “decision making” has occurred. It is a construction that imputes commitment to action. That is, based on observable actions, we assume that people have made a commitment to effect the action. In general there are three ways of analysing consumer buying decisions. They are: * Economic models – These models are largely quantitative and are based on the assumptions of rationality and near perfect knowledge.The consumer is seen to maximize their utility * Psychological models – These models concentrate on psychological and cognitive processes such as motivation and need recognition.
They are qualitative rather than quantitative and build on sociological factors like cultural influences and family influences. * Consumer behaviour models – These are practical models used by marketers. They typically blend both economic and psychological models. Consumer decision making is best summarised in the following diagramProblem recognition: The need for new airlines Consumers of India received a problem with the product that is offered by other similar airlines. The consumer choose product because of their quality and service. Information Search: Surfs the internet to learn about airlines. View TV ad, hear from family members or friends.
May read certain magazine when at home or outside Evaluation of Alternative and selection compares several airlines in terms of reputation and available features, Price point and discount offered free gifts.Purchase decision: Choose on airline it has a feature that really appeals to him and buys it Purchase Behavior dissonance and complex evaluation. 2. Would this plan suggested by the vice president help in convincing the customers to use Star Airways? Give your reasons. Consumer decision making process is a list of steps that are carried out by consumers concerning to a potential market transaction, before, during and after the purchase of a product or service. The process includes identifying the problem, collecting information, evaluating the alternatives, making the purchase decision and evaluating post purchase.Information search when a consumer discovers a problem or a need, he or she is likely to search for more information on how to solve it.
The information search stage involves gathering information from various sources in order to make a better-informed decision, it helps clarifies the options open to the consumer which may involve internal search Understanding customer needs is the keystone to Star Airways success. The most successful companies understand the value of their customers as they measure success through the amount of customers they serve each year.Increasing customer base is a goal and a challenge that every company must face. Listening to customers and researching the market will provide a company with opportunities to become an industry leader. Finding cost effective ways to meet customer demands are at the root of the challenge.Star Airways must face this challenge head-on while keeping the customer in the forefront of any action the company takes. They must develop products that will appeal to customers and draw in new business.
This problem solution will discuss opportunities and well as analyze an optimal solution.That will assist Star Airways in achieving their goals. The variety of successful strategies in use today was in full display at the ATW Winning Strategies conference in Washington, where some of the airline industry’s keenest minds shared their wisdom. Dr. Adam Pilarski, senior VP at consultancy Avitas, opened the conference with a controversial statement, “the myth of overcapacity is an urban legend,” pointing out that historically high load factors should push fares up. “If airlines don’t make money when they have the highest load factors ever, there is something wrong with their business model. He implied that airline managers over think their strategies and fail to follow what he called “Adam’s Rule: Revenue greater than cost equals good.
” The first thing to do is “Don’t be stupid,” he said, adding a list of “stupid” strategies: Don’t insult customers. No extreme yield management. No bad airline names. No adversary relations with employees. Do not have stupid business plans. “Please remember you are in a service industry,” he said, and try to avoid what former Continental CEO Gordon Bethune referred to as “sky nazi” cabin service.He criticized “nickel-and-dime” attitudes toward cutting amenities, scoffing at airlines’ publicized moves to remove olives and pillows.
You must cut costs in ways that make sense, related to productivity. ” Cost control “has to fit the business model, and must be related to productivity. ” The plan suggested by the VP Marketing, Anil Saxena, felt that the company needed to advertise its dedication to quality and rebuild an image of being discussions with the advertising agency to launch a campaign in the near future.Advertising: Convincing the Consumer when a company wants their product to sell to consumers, they give them a reason why their product is better than others. Advertising sells to consumers wants not just to their needs. People need a car but want a Cadillac. They need clothes, but they want Ralph-Lauren.
When most people flip though ads the go fairly fast, therefore it must grab their attention. A good ad allows the reader to instantly recognize the concept being communicated. It sends a simple and easy message to the reader of the benefits they will get if they use their product.Cigar, cigarette, and alcohol ads in the mid 1900’s persuade the reader that their products provide a beneficial and pleasurable experience. Case IV Mouse-Rid 1. Has Shobha identified the best target market for Mouse-Rid? Why or why not? Shobha has targeted women for the product. She feels that women are the best group to target because they don’t like the mess or the risks created by traditional mouse traps.
This is a good marketing segment to start off with but there are a couple of things that Shobha could have improved on.First off, she should have probably segmented women into a couple different groups. In today’s world all women don’t’ stay at home and take care of kids. In fact the population of women that do that is rapidly shrinking and being replaced by independent professionals. In effect, by targeting women that stay at home, Shobha is targeting a shrinking market. She could probably segment women into a couple different categories. For example: working women, single women, house wives, etc.
There are also other markets which Shobha could target.Some other market segments that hold large potential for the Trap-Ease are market like environmentalist, animal lovers, corporate business and families. The Trap-Ease mouse trap is re-useable and therefore creates less of a strain on the environment which would make it very attractive things for environmentalists and people who care about the earth. The environmentalist market is also growing as people became more aware of global warming and other problems such as deforestation. Animal lovers would love the Trap-Ease mouse trap because it doesn’t require poison or pose the risk of snapping closed on a paw or tongue of a pet.Corporate Business would probably like the Trap-Ease mouse trap because of its high qualitymore futuristic image and the fact that it would create as much of a mess. They wouldprobably be less hesitant to have them sitting around the office.
Families with kidsshould be the primary market segment of Trap-Ease seeing as it will probably be their largest. Mouse traps and poison pose a very large risk to infants and toddlers and caringmothers and fathers would probably happily buy a product which would better protecttheir children.It seems that the Trap-Ease mouse trap has positioned itself in the market as being a veryinnovative and well engineered product. It has done this by winning awards from tradeshows and magazines. If it is better able to connect these features of the mouse traps withthe needs and wants of their target consumers then they should be able to generate alarger demand. They could also try to change it’s position a little bit. Trap-Ease could also position the product as causing less waist because it is re-useable o rthey could lower it’s cost and make it more affordable.
By making it “the mostaffordable, innovative mouse trap” on the market they could probably gain some moredemand. Another way in which they could position their product would be by having an incredibly good customer service team that could deliver services to their customers thatwere having problems using the product. By having a good customer service team theycould build better relationships with their customers and increase their customer equity The marketing mix of a company consists of the four P’s: Product, Price, Place andPromotion.Currently Trap-Ease only has one product, their mouse trap. They probably could create a couple different versions of their mouse trap in order to offer more variety. The higher price of their mouse trap seems to be consistent with a quality differentiationstrategy but they probably could offer a wider range of prices on the different models oftheir trap if they chose to widen their product range. Right now they are trying todistribute their product through stores like Kmart and Safeway.
A really good market tohit would probably be the internet.People on in the internet are often times into quality,ease of use, and innovativeness and don’t mind spending a little more money to get whatthey want. It is also a high profit market because it reduces transportation costs and thereare no middle man costs. The promotion of the Trap-Ease mouse trap seems to be one oftheir largest problems. They should promote over the internet for certain on sites thatthey think their target market will be visiting and they should also think about putting outads on TV. In this changing high tech environment magazine ads aren’t enough anymore.Trap-Ease America’s competition is any company that creates mouse traps.
They face amarket in which large volume of low quality low cost mouse traps are sold. There arealso poisons that are sold which are a danger to pets and animals as well as the mice theyare supposed to kill. There are also other versions of live catch mouse traps out there. An example of one of Trap-Ease’s competition is d-CON who offers both baits and traps. They actually also offer a version of a no touch mouse trap in which you don’t have totouch the mouse after you have trapped it.They are selling this for 150 which is higher then the suggested retail price for the Trap-Ease mouse trap which is 1:0 six times more expensive. This would suggest that Trap-Ease has priced lower then some of its competitors which will give it apricing advantage.
Companies such as Havahart offer traps which humanely catcheverything from mice to voles and shrews and are competition for the humane factors ofthe Trap-Ease trap. Other competitors include: Victor, JT Eaton and Riddex. The first thing I would do to change Trap-Ease’s marketing strategy would be to increasethe amount of people in their marketing team.Although Martha was probably trying tokeep down costs by not hiring anyone for her marketing team she made one importantmistake. One of the most important things when coming out with a new product is themarketing because until you’ve communicated the benefits of your product to the consumer there will not be sufficient demand for it. Her entry into the market was toosmall scale and chances are that with such an innovative product that the company willdo better in the long run with a larger scale entry. She should have asked for a largerbudget and hired more people for the marketing team.
She should have then put muchmore work into the Analysis of her target markets and perhaps expanded her scope oftarget markets while increasing the segmentation. This would allow her to betterdifferentiate her product. I would put in operating controls and strategic controls in order to monitor the marketingteam’s progress and make sure that what they are doing is consistent with the company’sgoals and strategy. These controls would very important for gathering the informationthat would form the strategies in the coming years.It would also probably help to do amarket audit at some point during the first year just to make sure that things are runningsmoothly and it shouldn’t cost that much to do one at such an early stage in thecompanies development because of the smaller volume of papers to audit. Summary Targeting: The targeting should have been done within a broader demographic area. Slums, warehouses, go downs, docks, kirana shops, retail stores, restaurant, canteens and cold storages must be targeted for potential customers.
The segmenting must avail wholesalers and the intermediaries too part from the retailers. Marketing channels like Toll-free numbers, newspaper, television, radio and mobile marketing must be used effectively to target MEN. Pest control companies must be primarily targeted and a joint venture can be planned if necessary. We should target to environmentalists, animal lovers and corporate business. 2. Does Shobha have enough needed data on consumer behavior? What type of consumer research should Shobha conduct? Shobha have no enough needed data on consumer behaviour. She should adopt the following data collection methods • DATA COLLECTION METHODS DESK RESEARCH OR SECONDARY DATA “Secondary data consists of information that already exists somewhere, having been collected for another purpose”.
In other words, secondary data are those which have been collected by someone else and which have already been passed through statistical process, there are two sources of this data: Internal sources – this is data which is available within the company, although companies do not make full enough use of the information that is routinely collected. External sources – this is data which has been published for commercial reasons.A key source of secondary data is the library service and most good libraries have a wide range of sources. Some government data is available free, other secondary data can be very expensive. It is important in a research project to know what data is available since this will guide the structure and format of the fieldwork in the primary data collection stage. It is possible that secondary data sources can provide the complete answer to the problem under scrutiny. The least it will do is save time and money in directing the scope of the field work.
It can also influence the choice of data collection methods used in the field ork. Primary Data – Kotler and Armstrong say that “primary data consists of information collected for the specific purpose at hand”. In other words, primary data are those, which are collected afresh and for first time and thus happen to be original in character. Once the desk research is complete the researcher will have a much clearer idea of: • The up-to-date and relevant data • What data still needs to be collected to find a solution to the problem under scrutiny. • To achieve the data and information the research teams need to answer certain questions: What is it necessary to know?Who will have the information which is sought? What is the best method (quick and efficient) to use to collect this data? • It is important to streamline the answers to these questions to avoid collecting a mass of irrelevant data by inappropriate or inefficient methods. The two types of data are: Quantitative Data – As the term implies this is data which is expressed in numbers. Quantitative data is quite easy to collect, and a large amount of reliable and valid data can be collected largely by questionnaire in quite a short period of time.
It is a fairly formal approach.This data arises from what is termed “closed questions” because the respondent is restricted in the choice of answer the respondent can give. Qualitative data – Qualitative data is obtained from group discussions or in-depth interviews and its findings are based on content rather than numeric analysis. Qualitative data is said to be much more subjective than its counterpart. Questions are open-ended and can lead to a free ranging and in-depth discussion on a specific point which provides a variety of rich data. There are no numbers or digits in this data and it is not subject to statistical interpretation.TYPES OF PRIMARY DATA COLLECTION 1) OBSERVATION : Observation becomes a scientific tool and the method of data collection for the researcher when it serves a formulated research purpose is systematically planned and recorded and is subjected to checks and controls on validity and reliability.
Under the observation method the information is sought by way of investigators own direct observation without asking from respondent. 2) SURVEYS: Surveys are concerned with describing, recording, analyzing and interpreting conditions that exist or existed.The researcher does not manipulate the variable or arrange for events to happen Surveys are only concerned with conditions or relationships that exist, opinions that are held, processes that are going on, effects that are evident or trends that are developing. They are primarily concerned with present but at times do consider past events and influences as they relate to current conditions. 3) Experiment: Experiment may be conducted in lab or in the field. The researcher can test the relative sales appeals for package, designs, price, promotional offers and copy themes etc. , by designing suitable experiments to identify cause and effect.
The first thing I would do to change is marketing strategy would be to increasethe amount of people in their marketing team. Although Shobha was probably trying to keep down costs by not hiring anyone for her marketing team she made one important mistake. One of the most important things when coming out with a new product is the marketing because until you’ve communicated the benefits of your product to the consumer there will not be sufficient demand for it. Her entry into the market was too small scale and chances are that with such an innovative product that the company will do better in the long run with a larger scale entry.She should have asked for a larger budget and hired more people for the marketing team. She should have then put much more work into the Analysis of her target markets and perhaps expanded her scope of target markets while increasing the segmentation. This would allow her to better differentiate her product.
I would put in operating controls and strategic controls in order to monitor the marketing team’s progress and make sure that what they are doing is consistent with the company’s goals and strategy. These controls would very important for gathering the information that would form the strategies in the coming years.It would also probably help to do amarket audit at some point during the first year just to make sure that things are runningsmoothly and it shouldn’t cost that much to do one at such an early stage in thecompanies development because of the smaller volume of papers to audit. 3. What type of advertising can influence consumers for this type of product? . The low cost of posters and handbills encouraged a numberof publishers to experiment with other methods. Method were useful fo rinforming and reminding and reminding, they could not do the whole promotional job.
Theywere used only to reach each consumer personally. The merchant still used personal persuasiononce the customers were attracted to his store. The invention of hand press increased the potentialities of advertising. times, posters had made their appearance, and assumed the function of fostering demand for the product. CASE VI Impact of Retail Promotions on Consumers 1 Why would some consumers have high-involvement levels in learning about this sales promotion? A good definition of sales promotion would be as follows: “An activity designed to boost the sales of a product or service.It may include an advertising campaign, increased PR activity, a free-sample campaign, offering free gifts or trading stamps, arranging demonstrations or exhibitions, setting up competitions with attractive prizes, temporary price reductions, door-to-door calling, telemarketing, personal letters on other methods”. More than any other element of the promotional mix, sales promotion is about “action”.
It is about stimulating customers to buy a product. It is not designed to be informative – a role which advertising is much better suited to. Sales promotion is commonly referred to as “Below the Line” promotion.Sales promotion can be directed at: • The ultimate consumer (a “pull strategy” encouraging purchase) • The distribution channel (a “push strategy” encouraging the channels to stock the product). This is usually known as “selling into the trade” Some customers show high level of involvement in sales promotion is to know about the features product, competitor’s product which replace the same product, price and discount offered for the product. Additional kit or benefit for the product, and to know what the new arrivals in the market are. Customers will also learn about he stores and its goodwill by such type of sales promotions.
Is a level of 75 per cent comprehension realistic among those who become aware of an ad? Why or why not? Results of the study showed that ad exposure was 75 per cent and ad awareness level was 68 per cent and was considered as high. Only 43 percent respondents exposed to and aware of the ad copy could accurately recall important details, such as the name of the store promoting the retail sale. Just 43 per cent correct interpretation was considered as low. Of those who could accurately interpret the ad copy, 32 per cent said they intended to respond by purchasing the advertised· products ‘ and 68per cent sad they had no intention to buy.This yields an overall intention to buy of 7 per cent. The largest area of lost opportunity was due to those who did not accurately interpret the ad copy. The post-promotion survey indicated that only 4.
2 per cent of the target market customers made purchases of the promoted products during the promotion period. In terms of how the buyers learned of the promotion, 46 per cent mentioned newspaper A (Hindi), 27 per cent newspaper B (Hindi), 8 per cent newspaper (English), and 15 per cent learned about sale through word-of mouth communication. Do you think such promotions are likely to influence the quality image of the retail store? Explain. Basically, promotion is first introduced in the 4Ps of marketing. The four Ps represents the marketing mix (Product, Price, Place ; Promotion) and the promotional mix is the important term used to explain the set of tools of the business. This is applied to achieve benefit of its products and services from its consumer and the followings are (Advertising, Public relation, Direct Marketing, Personal selling and Sales promotion) On the other hand consumer behaviour is another important aspect in the retail business sector.Consumers are not always normal/simple buyer.
There are many aspects involved in buying decision process. They hold strategic shopping manner at the time of buying a product or services from a company. The main aim and objective of this research is such promotions are likey to influence the qulity immage of the retials store. Such Sales promotion has a great impact and influence on consumer buying behaviour in the retails stores – based on Tesco retail store. Such sales promotion role has a great impact on consumer buying behaviour.It has a great and strong significance role on retail industry sector. Basically sales promotions strategies used as a short-term technique tool which principal objective is to influence the ultimate buyers to try a brand or change their mind to another brand.
Sales promotion represent to discount a brand, it can be directly or indirectly, directly price reduction or indirectly through coupons ; premiums. But when the retail stores withdraw the sales promotion, then the normal price should have had a inferior value and the result of this should have had a negative impact on consumer buying behavior.The study focuses the significant attitude, perception of the consumer behaviour and it reflects the consumer loyalty on the basis of customer relationship management. Here the findings and analysis have discovered the vital reason that impacts positively on consumer buying behaviour and in the sales volume. ———————– Need and Problem recognition Information Search Evaluation and Selection Decision Implementation Post Purchase Processes