Marketing: Buying Behavior and Product Success

Consumer Behavior and Marketing Activities

The consumer’s identity, beliefs, specific needs, attitudes and the kind of product and brands available in the market for that product category, influences his buying behavior. The marketing efforts have a profound impact on the buying decisions of customers. Hence, marketers attempt to obtain an in-depth knowledge of customers’ buying behavior to help them introduce a product to the market. The success or failure of a product or service depends on how one company understands the consumers’ behavior. However, I should note at this point that consumer behavior is affected by various factors that determine the product and brand preference of consumers. According to Jobber and Fahy (2006) a few such factors are cultural factors, social class, social factors like reference groups, family, personal factors like age and lifecycle stage, occupation and financial status, psychological factors like superstitions, beliefs and attitude etc.

We will write a custom Marketing: Buying Behavior and Product Success specifically for you
for only $14.00 $11,90/page
308 certified writers online
Learn More

The product chosen is medical products and the consumption is influenced by many factors not only the cost access and supply. Other factors that affect the demand of a medical service and product include social factors, demand factors which can be subdivided into advertising, change in population, change in real disposable income, Change in wealth distribution, changes in the prices of competitors’ productions, inflation rates in the market and government policy.

Medical products are a necessity they can only be affected by the availability of substitutes in the market and it is this substitute that will affect the demand. Medical services are always relatively inelastic because people must fall sick at any time. It is only the will swift to the alternative but they will not abandon the product wholesomely. Therefore the changes in price of the product will produce a less than proportionate change in the quantity demand of medications. The following chart shows how demand for this product is relatively inelastic.

Consumer Behavior and Marketing Activities

From the chart above, I can comfortably say that when the price for the medical services changes, the quantity demanded is changed positively or negatively depending on changes in the price.

The following factors are said to have impact on the consumer behavior:

Changes in disposable income – this product will be affected if there is a change in disposable income of the consumer. If disposable income for consumers decreases especially this period of economic downtown we mean that the consumers will have less to spend and thus they will buy the medics that are cheap. In this case, they will move to those products or those products that are cheaper. This will mean that the demand will fall, as well as the quantity demanded. However, if the price is changed downward, to the level of substitutes then the demand will remain with little effect.

Get your
100% original paper on any topic done
in as little as 3 hours
Learn More

Price of substitutes – another factor that will affect the consumer behavior toward medications is the demand for substitutes. If substitutes are cheaper than product in question then they will be purchased and leave the product to themselves.

Diseases – unlike ordinary products as medical products will be affected by the diseases if there will be no disease then the product will not be demanded. However the disease plays an important role in ensuring that the product is purchased. Consumer behavior, such as the needs of the consumer as well as what the consumer wants from the medication will ensure that the product will be highly purchased. If the consumer creates a negative attitude towards the product the consumer will move to the substitute product and this will ensure that the demand curve takes the following format.

Medications

The quantity will continue coming down if the price remains the same. Assume the income came down and quantity demanded reduced from Q to Q1. And the price remained the same. It is a clear show that the changes in the demand were not due to price changes but were due to income levels changes.

Coming back to demand factors I can distinguish between:- Individual modifying demand factors, such as the physical characteristics of the individual customer, individual consumer, individual reactions to sensory perceptions, individuals ethical and moral values and conceptions, intellectual capacities and general individual motivations.

Social demand factors derive from the fact that consumer units live in a particular social environment and react to influences and stimuli emanating from the actions of other persons or groups, irrespective of whether they are members of a family, a particular group, a wider community or even the nation as a whole. The economic position of consumers as well as the legal socio-cultural factors can influence consumer behavior. Interpersonal and group influences in turn mainly derive from the following phenomena: the basis need of human beings for achievement; the need to feel equal and the need to show off and demonstrate.

Economic demand factors include disposable income relative prices at any point in time; the influence of advertising on consumer behavior consumer credit facilities and certain technological and economic developments. Amongst these factors purchasing power is of primary importance. The conscious concrete needs of consumer units can regardless of the variety of factors which create and modify such needs can only be converted into effective demand when they are supported by this factor, namely purchasing power. Purchasing power is a conditioning and provisory factor in effective consumption and business success. The causative factors in a specific expenditure pattern must however be sought elsewhere, namely in the dynamics of the community and especially in the group context of both the consumer and the entrepreneur.

We will write a custom
Marketing: Buying Behavior and Product Success
specifically for you!
Get your first paper with 15% OFF
Learn More

Having discussed the variables that impact consumer demand for the medical product, it is important to look at access and supply. When the supply for the medical product is changed the demand also changes. Supply maybe due to increased in production and access of the product to the people involved.

Digital Marketing

Digital marketing relies heavily on the consumer’s approval of using their personal information to build up a sustainable marketing relationship. By the word ‘digital’ we strongly mean the use of Internet services by the organization to keep the communications going with the consumers. Internet has become a bigger medium of communication as it has changed the overall structure of the organization and the way it functions in maintaining the relationships with the consumers. General public are shifting more towards the satellite transmission as it is becoming more and more prevalent. It is observed by the marketing firms that consumers should be approached in a different way than before. Digital forms of marketing are quite different from the traditional forms of marketing as it is highly target oriented and specific to the niche audience of demography. Digital services have allowed the information to flow freely from the buyers to the sellers. The costs have been reduced and the consumers are benefited with the increase in their options to choose from. The first phase of the online services has reaped off the required profits and now it is the next phase of Internet’s development where both organization and general public will use their current habits and practices to make more use of the online services. New opportunities and new approaches are being worked out by the companies, which will enhance their overall profitability. The reasons which attributes to the downfall of the traditional marketing are described briefly:

  • It is not greatly applied to the international, industrial and services marketing.
  • The concept of exchange in case of traditional marketing was developed using the experiences drawn from the huge US markets for consumer goods.
  • The traditional paradigm is based on the marketing mix concept.
  • Traditional marketing focuses a bit too much on the short term transaction
  • Failing to create a long term relationship with the consumers is another detrimental issue that creates a barrier for this kind of marketing.
  • Traditional marketing often focuses on the individual functions at the expense of the whole business and consumer.
  • Lack of coordination across functions, departments and consumers have also proved to be fatal for such kind of marketing.
  • Low levels of corporate performance and even lower levels of consumer satisfaction is another reason for the fading out of traditional marketing.

For example TiVo is a technology which is used by the viewers to record programs and which helps them to remove commercials from them. It has become a great advantage for the viewers. On the contrary marketing executives are facing the nightmares due to the invention of such technology. The beginning of “TiVo” has been very humble as it has been a hit at some places while at other places the technology has got off to a slow start. A research report has shown that in the coming 5 years “TiVo” would help consumers to delete all advertisements. Now how will the marketing side of a company survive if such technology picks up speed? The answer is they have to rethink their strategies especially on and offline so that the target consumers can be attracted towards their product. Since the consumers are focusing more on “TiVo” they are gaining more control over the medium they are using. It needs to be understood that due to introduction of such technology the market will have to give the consumers an interesting fare. The consumers will want to get more out of the exchange that takes place between “TiVo” and the marketing thinking of a company as it is economically beneficially for them.

According to Jobber et al (2006) when any marketing team thinks of putting up an online advertising campaign then it indicates the benefits of such online campaign. In case of internet it is considered as the most flexible and versatile advertising medium. It helps the marketing team to change the ads as and when required without incurring any extra cost. Information can be easily accessible to all the people across the globe without wasting any further time. This is a necessary step for companies as it helps them to make immediate changes in this dynamic field. This information will help in adjusting the campaign. The reason is it will increase the conversion rate. Pop up ads are very well related to the medium of online advertising and they are done for various reasons. We need to highlight on the necessities of these pop-up ads in respect to the marketing side of the organization. In case of promoting an event implementing a banner ad campaign is advertising method. The focus of such banners is to hook up the visitor’s attention.

Personalized Data and Marketing

According to Jobber et al (2006) personalized data plays an important role to consumer and a market. Through this data the company is able to understand the customers buying behavior thus they will be able to provide information that is required by the customer. This means that for a company to successfully develop and market a product both existing and new products, the company shall engage in market research activities through surveys and focus group discussions. The surveys shall involve professional market researchers who will interview a sample population of the target market in strategic high traffic areas. The surveys aim to generate consumer data in terms of their perceptions and preferences on the product, as well as their views on other brands. The FGD will be used to determine such factors as product features, pricing, packaging design, taste preferences, and other relevant customer information.

Once a company is able to have personalized data a product strategy is implemented and a product development action is taken. This program shall contain the following activities to be accomplished by the company’s product development team:

  • Implement product and customer surveys and FGD;
  • Determine taste and health attributes of the product;
  • Develop and finalize the new product formula;
  • Develop and finalize packaging design;

The consumer data will help the organization understand the involvement and they will be able to create brand differences to avoid consumers brand switching. The consumer has some beliefs and chooses a brand of cake and evaluates it during consumption, hence if the brand wasn’t good or tasty, the consumer might change to another brand. The marketer will encourage the buyers by offering lower prices, deals, coupons, free samples and advertising that features reasons for trying something ne

Not sure if you can write
Marketing: Buying Behavior and Product Success by yourself?
We can help you
for only $14.00 $11,90/page
Learn More

From the analysis of various data, company will know the consumer’s growing needs and thus create a more positive outlook at wanting the best for the consumer instead of making profits. Through its vital for every company especially those in managerial positions i.e. leadership positions to be committed in setting and formulating companies policies and guidelines which can be achieved through workshop training of organizations personnel, hence establishing departments for example the consumer affairs/public affairs, which will spend more time ensuring the products i.e. Ingredients, safety features, packaging labeling and advertising etc. Follow the codes of consumerism. Through this a resourceful and assertive manager will look for the good and positive aspects about consumerism and steer the company towards the goal of having a win-win environment between the companies goals and mission and the protection of the consumers.

Marketing Environment and Competitive Advantage

In the area of marketing, much of the information required is outside the firm e.g., information on why people buy only certain products and not other products. The variables involved in the marketing decisions being external to the firm make the study of external environment very important in market planning. The marketer will have will have to take special care to find out which of the environmental factors –social, political, cultural, economic, legal, technological-are the most important for the products he is selling in the market, at the present time and which ones could be the most important in the coming days. The marketer should also concentrate on external agents such as competitors, suppliers, customers, trade unions, governments, shareholders, local communities which are affecting the company most.

According to Jobber et al (2006) when the environment is known, the strategies are formulated and used in the two directions that are product differentiation and diversification. In pursuing a benefit more than its rivals, a firm can decide on several competitive moves. But here they have pursued product differentiation product differentiation is based on the quality, reliability, the technology leadership, and the image of the product and the firm thus remaining a market leader.

According to Jobber et al (2006) in formulating strategies that are used by the organization various internal and external factors are taken into consideration which includes functional competitive and corporate factors. Functional factors consider business objectives of maximizing resource productivity. At this point the company’s competency is taken into consideration. Corporate factors give a direction which the organization will take. This considers and summarizes economic social cultural demographic environmental, political technological, governmental and competitiveness factors. And this enables the organization identify and evaluate organizational characteristics such as resources capabilities and competencies.

According to Jobber et al (2006) the major contributory factor for sustainable competitive advantage of an organization is its positional advantage. The positional advantage of a firm is decided by the assets, skills, and resources possessed by the firm. Differentiation is based on the quality, reliability, the technology leadership, and the image of the product and the firm. The formation of marketing mix and promotion policies are to be decided basing the above discussed environmental factors. The main factor need to be focused is the severe competition from the equally strong rivals. Advertising and other sales promotion policies such as offering discounts, special offers are recommended based on the environmental analysis. Thus a proper analysis of the environment, especially the analysis of the external environment will enable the company to locate its strengths and opportunities.

According to Jobber et al (2006) with growing competition at the marketplace and need to realize full benefits of promotion methods, it is required that the management should realize it’s strengths, weaknesses, opportunities, and threats. The first step is to assess and analyze the present situation of the brand in terms of market share, major competitors, and brand performance of brand users, non-users and lapsed users. This benchmark should then be related to the market size and the potential estimated. It will now pave the way for determining the role of sales promotion in effecting the desired change in the market share of the brand. The outcome of this exercise will be the availability of desired information to set measurable and attainable goals. The second step deals with the identification of the alternative schemes, and the selection of the most appropriate sales promotion scheme(s), capable of accomplishing the goal set, within the available budget. The third step relates to incorporating creativity into the scheme to be offered. This is making the scheme novel, attractive, and challenging from the viewpoint of its target group i.e. consumer, trade or sales force. The fourth step relates to legal validity of the sales promotion scheme to be offered. The fifth step covers primary decisions relating to timing and duration of the schemes to be offered, location-wise selection of dealers, and convection of the trade and sales force about the appropriateness of the scheme. A firm has to restrict the scope of its search business opportunities as well as safeguard against threats present in a relevant environment. It should, however, be kept in mind that environmental changes are frequent and unpredictable. No firm or organization can ever assume the environment to remain static throughout its life.

References

Jobber, D & Fahy, J 2006, Foundations of marketing. McGraw-Hill Higher Education, New York

Check the price of your paper