Strategic implications of buyer behaviour - Marketing Management

Whatever definition of marketing is selected, consumer orientation is central. Implicit in a marketing oriented company is the assumption that the wish is to satisfy customers. We now look at aspects of the strategic marketing process and discuss applications of buyer behaviour at each stage, starting with the business mission.

Business mission

Production and sales-oriented companies usually have ‘company’ based missions rather than ‘customer’-based missions. A customer-based mission necessarily aligns the company with the marketing concept and affirms the importance of consumer behaviour to the firm.

SWOT analysis

Strengths and weaknesses that are internal to the organization are assessed to ascertain its capability and resources. Opportunities and threats are external to the organization and are evaluated to determine the broad environmental and competitive trends that have an impact on it. Companies that can diagnose threats and turn them into opportunities have an added advantage in the marketplace. This includes trends in consumer behaviour e.g. a change in lifestyle may have implications for the company; over recent years more people have been concerned with healthy eating, so food producers who monitored this trend and anticipated such changes were in a better position than competitors. Such companies changed their product offerings, e.g. Walkers put less salt into their potato crisps, or communicated existing healthy attributes about their products to consumers. Consumer behaviour can also be used in the strengths and weaknesses analysis to discover attitudes and awareness about their brands as well as those of competitors.

Market opportunity analysis

From an analysis of consumer behaviour it can be seen how existing products are perceived in comparison to those of competitors. Market opportunity analysis also shows whether or not there are any gaps in the market that your company can meet profitably with new products e.g. the shampoo brand ‘Empathy’ was launched to cater for the specific needs of older female consumers, a segment that was previously ignored. The theme of segmentation targeting and positioning as it has a strong link with the study of buyer behaviour. Suffice to say here that markets can be segmented into homogeneous groupings of consumers in a number of ways. Some of these ways are included, for example: demographics, lifestyle and social class.

Therefore, consumer behaviour itself is used as a segmentation variable. When groupings of consumers are identified, companies decide which ones to target. Positioning strategies then aim to take the product offering and ‘position’ it in the mind of consumers to reflect consumer behavior of targeted customers.

Design of marketing strategies

Marketing strategies that companies decide to implement should be consistent with the consumer behaviour associated with the product or service. Schiffman and Kanuk show how knowledge of consumer behaviour can aid the development of successful marketing strategies. First, the variables affecting purchase behaviour must be analysed and understood. This allows for the prediction of behaviour using the most important variables. Strategies based on controllable variables i.e. marketing mix variables of product, price, place and promotion, are designed and implemented which should influence the desired outcome of making a purchase.

Product

The study of consumer behaviour should indicate the types of product or service that will be successful. This can be extended into detailed product attributes and packaging decisions, including after-sales service. For example, a car manufacturer, to be successful, should look at consumer behaviour to see:

  1. the preferred types of cars for certain groups of customers;
  2. what product attribute/features are required, e.g. large boot, four doors, speed or fuel consumption;
  3. warranties required after the sale.

Knowledge of consumer behaviour facilitates development of successful marketing strategies

Knowledge of consumer behaviour facilitates development of successful marketing strategies

In organizational markets we have already seen that with regard to the product, what is particularly crucial is control of the quality of the product or service being supplied, and the need to look at quality and its attributes from the perspective of the decision-making unit.

Price

Research into the relationship between price and consumer behaviour is important to the marketer. Consumers may not be aware of the prices of certain goods they purchase. This is especially true in fast-moving consumer goods (FMCG) markets. Consumers may be sensitive to price differentials between competing brands; in this case the marketer will have to monitor competitors’ pricing strategies and either compete on price or try to add value to the product in another way. For many products, there is a relationship between price and perceived quality. An appropriate marketing strategy should therefore take into account consumer attitudes toward price for the product category in question.

In marketing to organizational buyers it is important not to make the mistake of believing and acting on the notion that organizational buyers buy only on price and will always select the lowest priced supplier. In both consumer and organizational markets it is overall value that is most important. Organizational buyers recognize that the lowest priced supplier does not necessarily equate with the lowest cost solution, particularly where this means lower quality.

Place

These decisions concern channels of distribution from the producer to the consumer. Different consumer groups have preferences for different retail outlets for certain products e.g. in ladies fashion some customers prefer to shop in department stores or in independent retail outlets, market stalls, mail order or chain stores. Consumer behaviour research can indicate how many outlets there should be, and where they should be located. A study of consumer behaviour can indicate to a company whether to provide out-of-town shopping facilities or to locate in a city centre. Where and how products are sold is also linked to store design. The layout of the shop is important as are ‘atmospherics’ within the store.

Research has shown that consumers like the convenience of supermarket shopping but also want good quality fresh food. Fresh fruit and vegetables are usually displayed as a consumer enters a supermarket to indicate freshness and quality. In-store bakers are not simply there to provide fresh bread, but also to provide the smell of baking bread, and consumer behaviour research allows marketers to make decisions about enhancing ‘atmospherics’ in retail outlets.

The widespread adoption of JIT purchasing has meant that in organizational markets, reliable delivery and the design of distribution and logistics systems are crucial.

Promotion

Different consumer groups respond positively or negatively to marketing communications. Research into consumer behaviour will indicate to which promotional tools the target market will respond favourably. This can be used for general media planning e.g. when marketing a skin cream to teenage girls, research may help in deciding to conduct press advertising; further research may then indicate more specific media e.g. a monthly teenage magazine with further research indicating how often the advertisement should be inserted and the type of advertising copy and images to use. Promotion can also be used to try to change a poor consumer image. In the UK, many companies have attempted to change their images by positive promotional campaigns. As with price, there are some misconceptions about the role and value of promotion when marketing to organizational buyers. Many companies have a belief that the ‘rationality’ and ‘hardheadedness’ of organizational buyers has meant that the promotional element of the mix is less effective and important in forming attitudes of buyers. However, organizational buyers are individuals and in this context might be swayed by effective advertising and imagery provided as part of the marketing mix. Evidence suggests that advertising in organizational markets can help to substantially reduce costs of selling.

Control of marketing effort

By observing and analysing consumer behaviour we can evaluate the success of marketing programmes. Marketing strategies can then be refined to fit customer needs more closely.


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