Consumers’ resources Essay
Survival through continuous acquisition of consumers’ resources is the most vital achievement and most appropriate orientation of a retail firm. In the increasingly competitive retail industry, in every corner of the globe, companies are trying to identify and satisfy target customers’ needs and wants. Their efforts are focused on how individuals, groups, and organisations select, buy, use, and dispose of goods, services, ideas, or experiences to suit their needs and desires. (Kotler, 2003).
The aim of the assignment is to identify and analyse all the factors that influence consumer’s buying behaviour within the retail industry, to identify and adopt the most appropriate positioning for a specific retail company, which requires careful appraisal of existing competition, possible gaps, and customer needs within the target market and finally, to suggest some recommendations that could help a hypothetical company named as “Marks and Smith” to regain the crown of the retail industry, both nationally and globally by adopting changes in the use of atmospherics. Given the theory that appropriate atmospheric factors could produce: specific emotional effects in the buyer that enhance his purchase probability, affect the degree of well-being felt by the staff working in the store environment and finally, affect the image the
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2. The importance of understanding Consumer’s Behaviour Understanding consumer behaviour and knowing what customers want, is not a simple task. According to Kotler, (2003) consumers may say one thing but do another. They may not be in touch with their deeper motivations and they even may respond to influences that change their minds at the last minute. Therefore, everyone in the retail industry is standing to profit from understanding how and why their customers buy.
When ‘Marks and Smith’ was founded at the beginning of the 20th century; the owners could understand consumers well through the daily experience of selling to them. But nowadays, as company and market have grown in size, their marketing decision makers have lost direct contact with their customers and must now turn to consumer research. (Gilbert, 2003) Since the specific company has lost its tracks to profitability gain and success, the central question for the marketers is to identify how consumers respond to various marketing stimuli that the company uses. It is clear from the results, that the last few years the company has adopted a mistaken marketing strategy which led to the biggest fall profit of the decade. (Ruche, 1998) The company did not understood how customers responded to different product features and prices and finally advertising appeals that did not had finally the prospected advantage over the competitors.
Therefore, ‘Marks and Smith’ should research heavily the relationship between marketing stimuli and consumer behaviour in order to understand better the Macro-marketing problems that is the way with which each society satisfies the needs of its members as a group, and also the Micro-marketing level, in which it identifies the way the product are bought and can drives to more focused marketing activities (Kotler, 2003). Their starting point is by analysing some factors that influence consumer’s buying behaviour. The next figure is presenting three of the major factors which should be taken into account.
The Cultural and the Social influences are of prior importance in consumer behaviour. According to Kotler (2003), culture is fundamental determinant of a person’s wants and behaviour. Especially now, because of the acquisitions and globalisation, retail companies can attract customers with different cultural background. Therefore, they must develop specialist marketing plans in order to well serve the non-identical members. Most require at least some adaptation to local expectations, shopping habits, customs, and competition.
Moreover, what is also to be considered by the marketers of the company in order to understand their consumer’s buying behaviour is the psychological factors. According to research, people are exposed to over 1500 ads a day. (Kotler, 2003) Therefore, the company must work hard to attract customer’s attention. They have to be able to motivate more the purchaser by promoting their offers intrusively to bypass selective attention filters. The use of the in-store atmospherics is a way that will be analysed further on which can help in motivating people to purchase more.
3. Segmentation, Targeting and Positioning As Kotler (2000, p.85) points out ‘the marketing staff must segment the market, select the appropriate market target, and develop the offer’s value positioning. The formula “segmentation, targeting, positioning (STP)” is the essence of strategic marketing’. For the purpose of the study, ‘the attractiveness’ of the different segments in terms of profit and growth has to be analysed and those offering the company the best potential need to be chosen.
Arising from the SWOT analysis (appendix 1), the objective would be to target specific markets, which consist of group of people sharing same characteristics towards which the retail company will direct its product and services. ‘Marks and Smith’ should not keep on going chasing after more favourable demographics the way like smaller companies do (such as Inditex), but they should address the new market by creating stores within stores, something it is beginning to try.
Positioning must be understood here in terms that can distinguish ‘Marks and Smith’ from its rivals, in the eyes of its customers. Pricing, product range, fashion ability, customer service and store location are typically used by customers to position stores. Since the time being the specific company adopted position was being increasingly shunned by buyers who whom the high price position was not matched by other aspects of its positioning (McGoldrick, 1998). The retail sector has typically placed a lot of emphasis on merchandising rather than marketing. For many years, the specific company’s merchandisers were evidently in touch with the needs of customers, who continued buying its products.
Arguably this was fairly product led and might have worked in a relatively stable environment. But the increasing turbulence of fashion markets towards the end of the 1990s called for a more focused approach to the needs of customers. There is no guarantee that a marketing department will be able to deliver this customer focus unless they will take into consideration customer’s emotional and social values. The use of space, colour, walls, lighting and music when combined by the retailer on a proper way can enhance the shopping experience and also affect the emotional response of customer. The combination of these planned ‘physical messages’ is known as atmospherics and when combined properly they can improve the image, the profit and create a better status quo for any retail company.