Consumer behaviour
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Abstract
Understanding consumer behaviours is very important when planning to market or sell a firm’s products or services. It is vital to understand the factors that influence consumers’ decision-making processes in the target market, based on the nature of the product and other factors surrounding consumer’s decision making. This paper evaluates factors influencing decision-making processes of consumers of Sony Company. The paper examines the following aspect; product positioning, market segmentation, pricing as well as distribution and promotion. The paper indicates that Sony has gone an extra mile in understanding the decision-making processes for their consumers and has used information that it has acquired in devising innovative brands and marketing strategies that have enabled the organization to achieve a remarkable success in its industry.
Introduction
Consumer behaviour is the study of individuals, organisation or groups and the psychological, sociological processes that consumers go through in purchase decision making. The actions that consumers take in purchasing various goods and services is an ongoing process since taste and needs change overtime. Companies are always evaluating the success of current efforts by implementing changes when necessary to attain maximum profitability or success. Consumer interest to purchase products and services is usually as per their taste need and money. The study of consumers helps firms and organisations improve their marketing strategies by understanding issues such as environmental factors, buyer characteristics’, and decision process and buyers response. This study deals with the marketing stimuli or the four P’s of marketing, product, price, position and promotion. Consumer behaviour explores on why people purchase things what motivates them and the decisions they make following their actions. The Consumers prefer distinguished products because they feel the products reveal their unique personality, needs and lifestyles.
Selection of the target Market
There are various factors that influence target markets and are all involved in the product or market mix. One of the most recognized consumer electronic brands in the market or world today, Sony Corporation. The need for segmentation tends to be a major issue because people vary from one another. This is as a result of needs, motivation, and perception, decision making process and buying behavior (Noel, 2009). The attractiveness of a market segment should consider the following factors size, growth rate, competition, brand loyalty, Attainable market share sales and required market share. Sony invested in India and opened its operation where the main focus was sales and marketing. They targeted the second largest city they targeted a market that they could own a higher market share and competition would be minimal. Consumers are usually focused on the adoption of new technology. Buying behavior is changing to adapting to new technological advances so fast and this makes markets and consumer based enterprises sometimes not keep pace.
There is various target market strategies that organizations should seek to enter a market and should attract segments that match its capabilities. One market company is served with one market mix, different market mixes are served in different segments and full market coverage involving mass market strategy in which a single undifferentiated market mix is offered to entire market. This is done because target selection of the market needs essential dedication and effort to employ a suitable and targeted market mix. Important factors such as climate, geographical locations are important in deciding the target market (S. Ramesh Kumar, 2009).
Segmentation, Targeting, positioning (STP)
Segmentation is a tool in marketing that assist marketers differentiate and pull towards growing consumer base. This is done by geographical, demographic, psychological, psychographic, socio-graphical, hybrid and used related segmentation. The process that organizations segregate the market into different groups to be reached with a distinctive market mix is segmentation. Marketers focus on customer behavior and develop marketing mix for specific target markets. Sony Corporation is a good example when it began selling electronic products in developing countries such as India where population growth is high. The market also had a need for new technology which Sony delightedly offered. After market is segmented consumers are classified and targeted and relevant product price can be developed (Khan, 2007).
Targeting as defined and indicated above is where organizations target products amongst various segments. Targeting involves evaluating the attractiveness of markets, size growth and market power. Sony offers electronic gadgets for various marketing segments. They understand audience and each electronic device fulfills needs and expectations of the target market.
Positioning is actually the last stage that involves implementing your target .Marketers try to create image or identity and values in target market mind for products, brand or organization. Sony as a whole entity diversified there electronic brands to venture into the American entertainment industry where they were involved in making movies. They segregated the American love for films and they decided that was their target market .They launched an advertisement campaign after their Companies Co Founder died. The company increase total resources devoted to hot areas for instance digital products.
Determination of product positioning
Product position is ideal in an organisations profits and growth. A company will position a product or create an image in the consumers or target market minds. This is an important step for long-term success of a company. The desired position helps to identify the competition. Positioning of product is essential and challenging because the product message should consistent, reliable and simple. This entails defining market segmentation and then understanding the target market. Once consumer perceptions are understood it’s to select the best product position. The position can be defined by understanding process and goals of market segmentation. Some include quality, reliability and unique features benefits. Sony Company developed a product and a market plan that would appeal to selected market segment. To maintain the pace of consumers for advanced technologies and cutting edge digital product that have enriched and promoted peoples lifestyles. It introduced the gaming consoles of play station where they targeted the young and made an impact in the gaming industry .Sony was almost certain to be the frontrunner in broadening consumer electronics and related platform services. Sony created what they want their market to think about the product. The business segment become more familiar with the product and through this Sony created a brands image (S. Ramesh Kumar, 2009).
Structuring the elements Marketing Mix
Markets have to be effective in coordinating and integrating appeal to the appropriate group of customers in a marketing strategy which require the element of marketing mix. The marketing mix involves the main 4 P’s of marketing which help in decision making process .Product, price, place, and a promotion are some of them and is mainly of two types, product market mix and service marketing mix. Marketing plan was essential in putting Sony as the second runner in electronic brand distribution. They have invested in India and have used this for variables in maintaining the leadership role of almost every product in India. The importance of marketing mix is essential in consumer behaviour. High quality products will satisfy most consumers as marketers will advise product through certain channels.
Products are Goods and services offered by a company to target market. It usually revolves around the product life cycle and the customer life cycle. PLC centers on development of a product while CLC centers on the formation and delivery of lifetime value to the consumer. This is the physical qualities that vary from competitors and the benefits they give. Product is the first thing an organization considers before setting up business (Khan, 2007). A company takes note of the niche in the market and ceases the market by securing the product. Sony has been developing products over the year’s .This electronic gadgets such as, walkman; CD play station is what has made the company become more relevant. The products and services were also seen after Sony acquired Columbia pictures in 1989 making it a giant in the entertainment industry. Product position is essential for the success of a company to be desired by consumers. Product positioning is done to create an image in the consumers mind set. Product position is very important in the marketing world as indicated above under product position (S. Ramesh Kumar, 2009).
Price; Amount of money that customer pay to obtain goods and includes, selling price, time payments and deductions. This is amount of price a product should be used to remain relevant to the consumer. Factors considered in price are ,perceived value of product by consumers, market share of the business, competition, tax regulation and distribution, logistics cost. Pricing considers profit margins and probability of competitors pricing response. The price sensitivity of consumers determines how many goods and services will be sold. The product being purchased should be of greater value than perceived by consumer regardless of sum of costs. Consumers can compare the stated price and the price range they are thinking in mind. This is referred to as the internal reference price where consumers will think they have a cheaper price. This is generally a guide to study where the stated price is acceptable. The role of pricing is a role that influences consumer’s ability to purchase product. Reducing price of a product when entering the market is an important strategy that will ensure ones pricing is competitive. Pricing should also be done by comparing the price of competitors. Competitive advantage is a factor that helps one define the price.
Place: This is where a company sells its product and services and how it gets them to the customer. The distribution channel has an effect on profitability, firms have to have a logistics and supply chain that is effective and efficient. Lack of attention to the distribution channel will be disastrous in the market as distribution is important in having a competitive advantage. This activity involves, goods distribution channels, supply locations, inventory and transportation. Sony has footprint across major states in the United States of America and they can be used for effective distribution of their products. Distribution has a great effect on firm’s profitability and supply chains and logistics decisions are considered as very important in a firms cost decision process.
Promotion: All activities available to inform consumers about product. They include advertising, sales, personal selling, sales promotion and direct marketing. There are other P’s that fall under the Customer Lifecycle Cycle they include, people, process and physical evidence. Advertising influences consumer’s attitudes, knowledge and image concerning brands. It is relevant to promote a product that exposes a consumer, and captures their attention .Selection of the best media to use will be critical in reaching the target audience. All companies have referred their marketing to online social media sites as more consumers are logged in the internet around 90% time. Consumers are usually subject to buying behaviors such as impulse buying, routine response and extensive and limited decision making this would be a relevant platform to advertise. Promotions require a huge budget and thus it is a marketing expense and should be considered while deciding the costing of the product. It is advisable to select an appropriate distribution channel, with high quality products, desired and priced appropriately need to reach the consumers
Conclusion
Evaluating consumer behaviour is a priority since consumers tastes and needs change overtime. By considering what may impact buying habits a business can create products that may appeal larger consumers. There are factors that influence consumer behaviour and it’s necessary to understand these factors and utilize those behaviours in a manner that motivates consumers to make purchases (Khan, 2007). Sony sought diversification in US entertainment companies and it gained access to 20% of Japanese market after buying Apples Computer Hard disk technology operations, this helped increase sales derived from institutional customers.
The importance of marketing mix is essential in consumer behaviour. Marketing mix helps to characterize the marketing aspect in terms of product, price, place and promotion. This assists new entrants who will have to make a huge impact in the target market. Understanding consumers mind helps researchers and marketers know consumers from a different perspective to improve marketing strategies .Understanding of the issues helps marketers gain knowledge of public policy and how to develop campaigns.
Marketing deals with consumers since decisions on product development and pricing strategy mainly depend on them, The reason we study about consumers behaviour is because factors for the sale of a product is consumers responsibility. This helps marketers take great decisions on marketing strategies for launching new products. Consumer behaviour assists a company develop products as per specifications that meet consumer’s habits taste and preference. A good example is Sony Company the directors found that it was difficult to distribute movies with tapes so he enquired with consumers, The CD was then created and movies could now be distributed efficiently this then introduced the VCD and all this were products of Sony.
Consumer behaviour influences the marketing mix policies such as production policies, price policies, decision regarding channels of distribution and decisions regarding sales promotion (Noel, 2009). There are reasons consumer behaviour is essential in that we can understand the social factors that are influenced by preference. Factors such as, Personal, psychological factors make a marketer understand how to motivate consumers to buy products. Understanding consumer behaviour and marketing improve business efficiency in general. Marketers also consider how consumers use existing products and this will assist in spotting unsatisfied needs in serving profitability
Consumer behaviour helps us understand the customer and understanding why the consumer purchases the product. It helps marketers research about clients attitude toward certain products. Product appeal to lifestyle, culture and experience will make marketers promote consumption and gain competitive advantage over other competitors. Consumers usually look for ways in which a product will make them happier, improve lived or give them pleasure.
Referencing
Noel, (2009) Basics marketing 01: Consumer behavior volume 1 of basics marketing. (Vol. 1, pp. 56-126) Switzerland: AVA Publishing.
Khan, M, (2007) Consumer behavior (pp. 1-15) London: New Age International
S. Ramesh Kumar, S. R. (2009). Consumer behavior and branding: Concepts, readings and cases-the Indian context. (p. 75). New Delhi: Pearson Education India.