Consumer Behavior Essay

1) How can understanding consumers’ behavior help companies sell products or services in today’s market? Please cite an example from our text or from our YouTube videos and use a personal example. As Steve Jobs states in the YouTube video, all marketing decisions revolve around your customer. Marketing is all about building profitable customer relationships by creating value for customers and capturing value in return in the form of profits. To effectively sell a product/service, understanding how your customers buy your products and services will help you determine when, how and where you should market your products/services and in turn help you grow your business by responding to their needs. Also, if you know what customers buy and how they go about buying particular products, you can more easily spot a need that has not yet been satisfied. For example, if you run a technology company and notice that many of your customers buy educational software from college bookstores, you may recognize that your customers could use a place to buy and automatically download educational software online. Steve Jobs states in the YouTube video â€Å"Give her not what she wants but give her something that she has never dreamt of, and when she gets it she recognizes it as something she wanted all the time†. A very simple example is that of ITunes, which was discovered 10 years ago. Steve Jobs noticed that music fans clearly wanted to download songs they liked in an affordable and easy way rather than driving to Best Buy or some record store to buy them on $15-to-$18 CDs. Jobs took advantage of this opportunity and came out with the iTunes Music Store, which is today the top most online music retailer, and synced it perfectly with a piece of hardware: the iPod. This eliminated the use of Walkman’s, MP3 Players and CD players. Thus, it is important to understand people’s motives (what drives them to buy), and their attitudes (how they feel about a product/service). Knowledge about these psychological characteristics helps companies design and provide products and services that their customers want and need. The book states an example of McDonalds that first started with providing low priced burgers, fries and shakes. But today, with people becoming more health conscious, McDonalds has a reworked menu that provides more choice and variety such as Chicken Nuggets made with white meat, low fat milk jugs, and a line of premium salads. When people think of McDonalds, people think of value – whether it’s a college student buying a burger for a couple of bucks r a working women at the drive through grabbing a breakfast latte that’s a dollar cheaper than Starbucks. I would like to give a personal example of me shopping at the department store called Safeway. I was a frequent shopper at Safeway and every day I would receive emails regarding the deals and discounts on the products I purchase the most. I would also get emails with recommended products to buy and Safeway was able to do this by keeping track of my shopping history. I would actually get lured by reading these emails and go to the store to buy the recommended discounted products. Marketers can benefit from an understanding of consumer behavior so that they can better predict what consumers want and how best to offer it to them. The importance of understanding the consumer behavior is that to know and understand the preferences of different consumers which will enable the marketers to form the marketing strategies accordingly. Businesses that cannot understand how a consumer’s mind operates will have a more challenging time figuring out how to target a campaign that will attract or catch attention. In order to make the right decision, marketing managers must know how their consumers will react. Before introducing/repositioning any product/service, you must first ask questions like, do people want it? Are there enough people who want it so that it will be profitable to produce that product? Do the people who want it have the economical ability to pay for it? Another important point is that when you know how customers behave in relation to the products you’re selling, you have a better understanding of how to provide good service to them, increasing the chance that you’ll have repeat customers. For example, if you know that customers tend to come to your restaurant because they can get healthy food without waiting for a long time, you could continue training your staff to be as efficient as possible. Identifying the buying behavior of the target market and catering to those behaviors is integral in today’s complex society. 2) How can connecting with a culture help influence consumer behavior? Can you give us an example from your personal experience? A people’s culture includes their beliefs, rules of behavior, rituals, style of dressing, religion, etc. Culture is an external factor influencing consumer behavior. Since people with different cultures have different values, they will have different buying habits. A particular company’s marketing strategies should reflect the culture that is being targeted. Failing to do so can result in lost sales/profits/opportunities. Before advertising or introducing any product/service, it is very important to understand the local culture of the population of a particular area, city, or country. For example, the You Tube Video shows that Thailand and Malaysia have a family oriented culture and so the elderly and tradition play a huge part in the commercials as compared to Australia having a very individualistic culture focusing the advert on youngsters. Another example would be if a given country discourages the use of tobacco or alcohol, the potential pool of consumers for these products would be small. Therefore, companies which distribute these types of products should limit advertising in such areas, and focus on other countries where there are no restrictions on the use of such products. A personal example would be that of McDonalds. In India, meat consumption is prohibited in Hinduism. McDonalds did spend time developing a food menu targeted towards no meat eaters. They now offer a lot of vegetarian options, making it a happy place for both: meat and no meat eaters. Another example would be comparing North India and South India. I have to been to both, and have noticed a vast difference in the culture. People in North India prefer breads over rice which is a favorite with people in South India and East India. So many restaurants in South India have 99% rice based dishes. If a restaurant in South India serves more bread based food options, it would likely make less business as compared to restaurants serving rice based dishes. As part of their efforts to convince customers to purchase their products, marketers often use cultural representations, especially in promotional appeals. The objective is to connect to consumers using cultural references that are easily understood and often embraced by the consumer. By doing so the marketer hopes the consumer feels more comfortable with or can relate better to the product since it corresponds with their cultural values.