MARKETING STRATEGY AND CONSUMER BEHAVIOR
MARKET OPPORTUNITY ANALYSIS
This activity involves identifying consumer’s needs, organisation’s strengths competitive scenario and the other market conditions. The analysis of the unfulfilled needs and wants of the consumer is done by examining trends and conditions in the market place. This is done by assessing income-levels and life styles etc. of the consumers. The trend towards rising income levels, increasing number of working wives and greater emphasis on leisure and convenience have fuelled the need for household gadgets like washing machines, vacuum cleaners, dish washers etc.
On the other hand, greater health cautiousness amongst the people has resulted in a number of water purifiers, health drinks, health clubs and gymnasiums which are doing good business. Their rising sales graph is an apt indication of how well these health drinks and gymnasiums have been able to meet and satisfy the customer’s need. The market analysis is mainly based on following factors:
(a) The Consumer: It is very important for an organisation to understand the consumer. Many firms send questionnaires to customers to ask about their satisfaction, future needs and ideas for a new product. On the basis of the response received, changes in the marketing mix are made and advertising is also restructured.
(b) The Company: The analysis of the company is also a very significant part of market opportunity analysis. The strengths and weaknesses of the company are thoroughly observed. The firm’s financial position, market share, size and quality of sales force are properly analysed.
(c) The Competition: While analysing of the market, an insight into the strengths and weaknesses of the competitors and their strategies is done thoroughly. After getting this information, the company responds accordingly and changes its marketing mix in order to out do the competitor. This is very difficult process and it is easier said than done.
(d) The Conditions: The Conditions required to be seriously studied are the economy, the physical environment, the government regulations, the technological developments, etc. these factors effect the consumer needs and leads to the formulation of different marketing strategies.
MARKET SEGMENTATION AND TARGET-MARKET SELECTION
(a) Segmenting the Market: Own society consists of a vast number of individuals of different age groups and belonging to different social, economic and religious backgrounds. The study of consumer behaviour trends would reveal distinct groups of consumers with distinct needs. Knowledge of who these groups are and segmenting the market accordingly after understanding, how a particular group would behave in a particular situation, how, what, where and how much they buy, helps the marketer to tailor his products or services according to segments. This may be done by approaching each market segment with unique marketing offering or by selecting a few target markets only and concentrating company efforts on such identified markets only.
(b) Finding the Target Customer: A target customer start with the Target Marketing involves breaking a market into segments and then concentrating your marketing efforts on one or a few key segments.
Target marketing can be the key to a small business’s success.
The beauty of target marketing is that it makes the promotion, pricing and distribution of your products and/or services easier and more cost-effective. Target marketing provides a focus to all of your marketing activities.
When the study is done thoroughly about the consumer’s behaviour, these things help in concluding that according to the available resource of the organisation what kind of customers would be best served by the company and then accordingly the product is developed?
(C) Selecting the Niche Market: A niche market is a focused, targetable portion of a market.
By definition, then, a business that focuses on a niche market is addressing a need for a product or service that is not being addressed by mainstream providers. You can think of a niche market as a narrowly defined group of potential customers.
For instance, instead of offering cleaning services, a business might establish a niche market by specializing in blind cleaning
Why should you bother to establish a niche market? Because of the great advantage of being along there; other small businesses may not be aware of your particular niche market, and large businesses would not want to bother with it.
The trick to capitalising on a niche market is to find or develop a market niche the has customers who are accessible, that is growing fast enough, and that is not owned by one established vendor already.
After the study is done a company has selected that it would be producing cosmetic products, hence now the company would see whether it is having enough resources and technology to be a high-level entry or whether it has to be one of the new entrants in the market.
After having identified an unfulfilled need of the consumer, next step is to determine right mix of product, price, place or distribution network and product promotion. A thorough knowledge of Consumer Behaviour is extremely helpful in decision making in these areas.
(a) Product: A marketer is concerned about the physical attributes and service features of the product. Consumer behaviour helps to figure out a number of features desired in the final product like:
- size, shape and features of the product;
- nature of packaging;
- different models of a product;
- warranties and after sales services;
- any accessories and associated products and services to be offered alongside.
Every company designs its products on the basis of likings and dislikings of the consumers. Thus, consumer behaviour gives an insight into various factors which prompt consumers to purchase goods and services offered by the company. Different consumers will need goods in different sizes. So, a marketer should offer his products in different sizes to cater to the need all his consumers. Similarly, for few consumers, packaging of the product may be of prime importance. So, in that case the marketer has to pay special attention to the packaging.
The mobile penetration in states like Bihar was very low till 2005. Most part of Bihar had no electricity then and the mobile phone batteries used to die out in four to eight hours. In the absence of electricity, consumers were required to travel long distances to the city. This prompted companies like Micromax to design and develop such handsets whose battery lasted for upto 3 days and which were highly affordable as well. Other companies also had to follow them to save their market share.
(b) Price: The knowledge of consumer behaviour is essential for making decision regarding pricing of the product. These decisions will determine the revenue and profitability of an organisation. A few factors involving consumer’s behaviour are:
- How much is the price awareness amongst the customers for the given product category?
- How much are the customers sensitive to price difference amongst competitive brands?
- How much price discount is needed to encourage sale?
- What customers prefer: high, quality at a price or cheap goods of a lower quality?
If the customer is sensitive to the price, the price of the product can not be fixed higher than that of the competitive product. On the other hand, there is a group of customers, who are more sensitive to the quality and brand value of the product irrespective of the price. So, in this case, a marketer may fix the price as high as the market warrants irrespective of the competition.
(c) Place: After having decided about size, shape, packaging, and price of the final product, the next decision that a marketer has to take is regarding place i.e. where and how to offer products and services for sale and what mechanism has to be adopted transfer goods and their ownership to consumers. Decisions influenced by consumer behaviour are:
- What type of retail outlets should sell the products?
- Whether the product be sold in all retail outlets or only through a selected few in an area?
- Where should these retail outlets be located?
- Whether the product is sold through exclusive retail outlets or competing brands are also sold in the same outlet.
(d) Promotion: Product promotion plays a very important role in total sale activity of a marketer. A study of consumer behaviour helps the marketers select the most effective method of promotion from amongst various options available so that his product stands out above all of the competitive products. This will help in achieving the sales objective besides increasing revenue and profit of the organisation.
For this, the marketer has to take the following decisions:
- What message is to be conveyed to the consumers during promotions?
- What are the most attractive ways for enticing the consumer’s attention?
- Which medium of promotion is best suited for attracting the target consumers?
- When should the intended message be conveyed to the consumers?
- How frequently should a given advertisement be repeated?
- Whether one or more mediums be used for promotion?
In order to effectively convey the intended message to the target consumers, a marketer must know who the target consumer is and what motives prompt him to make a purchase. He must keep in mind where his consumers are located, what media do they access and how frequently and at what time, do they access the media and what role does advertising play in influencing their purchase decisions?
Television has been the most powerful and effective medium for advertising in our country since its inception. Many top selling brands spend a major part of their advertising budget on TV media. In recent years, with the increasing penetration of internet and mobile, internet is emerging as a more effective and cheaper medium for advertisement. We can see a number of advertisements appear in various social networking sites.
A marketer has to decide on the suitability of any specific medium keeping in mind nature and use of his products and who his prospective consumers are. For instance, a FMCG product like tooth paste or soap can be effectively advertised on Television & Internet, on the other hand, a product to be used by an industry like machinery, raw material or consumables is advertised through distributions of brochures or pamphlets containing detailed product specifications and other information to the select consumers only.
CONSUMER DECISION PROCESS
The decision-making process consists of a sequence of steps which the consumer experience. Initially, the decision is made to solve a problem of any kind. This may be the dilemma of buying a television in your home. For this, information search is carried out. This leads to the evaluation of alternatives and a cost benefit-analysis is made to decide which product and brand image will be suitable, and can take care of the problem suitably and adequately. Thereafter the purchase is made and the product is used by the consumer.
The constant use of the product leads to the satisfaction or dissatisfaction of the consumer, which leads to repeat purchases, or to the rejection of the product this is called post purchase behaviour. The marketing strategy is successful if consumers can see a need which a company’s product can solve and, offers the best solution to the problem. Satisfaction of the consumer, after the sales have been effected, is important for repeat purchase. It is more profitable to retain existing customers, rather than looking for new ones.