Zappo Company: Consumer and Buyer Behaviour

Introduction

Marketing constitutes a fundamental organisational management aspect that firms should adopt. One of the marketing management elements that organisational managers should consider is consumer behaviour. Buyer behaviour is subject to diverse factors, which include personal, social, cultural, and psychological factors. Understanding the buyer and business-buying behaviour contributes to the organisations’ strategic planning process. Thus, an organisation is in a position to exploit the opportunities and deal with market targeting through effective market identification, targeting, and determination of the most effective positioning strategy to adopt. Jaakkola (2007) affirms that gaining such understanding transforms firms into customer-oriented entities. Subsequently, the firms gain an edge in formulating marketing mix strategies, hence making them adequately customer focused.

To understand the customers’ behaviour, firms must integrate effective marketing management tools and techniques such as market research. Moreover, understanding consumer behaviour contributes to the implementation of different marketing management tools and techniques such as customer segmentation. According to Farrell (2000), effective of customer segmentation technique enables organisations to nurture and sustain unique customer experience, which is attained through effective augmentation of relationship marketing, hence promoting repeat purchasing behaviour. Understanding consumer behaviour is critical in undertaking process re-engineering on different marketing strategies, which is only possible if the marketing manager understands the prevailing market conditions sufficiently.

One of the areas in which marketing managers should consider in re-engineering their marketing activities relates to marketing communication. The emergence of different digital technologies such as the Internet and social media platforms present business entities with an opportunity to maximise the benefits associated with Integrated Marketing Communication and online shopping. This paper assesses the concept of consumer and buyer behaviour by evaluating the case study titled Zappos: Happiness in a Box. The paper takes into account different theories and models on consumer behaviour.

Consumer and business-buyer behaviour theories

Different theories have been formulated to understand consumer behaviour. The theories assist marketing managers in understanding the consumers’ decision-making process. Some of the most renowned categories of consumer behaviour theories include economic and psychological theories.

The utility theory is one of the economic consumer theories. The theory argues that the consumers’ purchasing intention is to maximise their level of satisfaction within their budget. Moreover, the theory argues that consumers have absolute knowledge of the available alternatives that can lead to optimal satisfaction of their wants (Sarangapani 2009). The psychological theories are comprised of the learning theory, psychoanalytic theory, and the sociological theory. The learning theory emphasises that the consumers’ decision-making process is a function of experiences learned from the past. The theory argues that consumers consider different product features such as product quality, packaging, price, and the brand. Thus, marketers must influence consumers’ decision-making through market communication. Accordingly, undertaking sufficient market communication can reinforce repeat purchasing behaviour. The relevance of the psychoanalytic theory in marketing is based on the view that consumer behaviour is subject to the tension that arises from the existence of unsatisfied needs. Conversely, Sarangapani (2009, p. 22) posits that buyer behaviour ‘is influenced by social forces such as social class, reference group, culture, and lifestyle’. Marketers should understand the social forces that influence consumers’ demands.

Zappos appreciates the importance of understanding consumer behaviour in its marketing process. Moreover, the firm has taken into account business-buying behaviour theories. One of the theories that the firm has integrated entails the generic theory of consumer buying behaviour. The theory asserts that consumers’ buying process is comprised of five main steps, viz. need recognition, searching for product information, evaluating available alternatives, purchasing decision, and post-purchase evaluation (Sarangapani 2009).

In addition to the generic buying behaviour theory, Zappos has integrated the marketing issues underscored by consumer theories. For example, Zappos has leveraged on different consumer theories, which has led to a remarkable improvement in the firm’s performance. One of the theories that the firm has taken into account in its marketing process entails the utility theory, as evidenced by its commitment to delivering optimal happiness to all its customers. The firm recognises the fact that creating a high level of customer satisfaction is a multi-dimensional aspect. Thus, the firm does not only focus on offering customers quality products but also on creating a unique experience. For example, Zappos ensures that customers’ orders are delivered effectively and efficiently. The firm offers its customers’ free overnight shipping on all orders irrespective of their location. Over the years, Zappos has been committed to upgrading its product delivery.

The overnight shipping policy adopted by Zappos has addressed the time and place dimensions of the consumer utility theory successfully. Moreover, the overnight shipping policy has played a fundamental role in assisting the firm in exceeding its customers’ expectations regarding product delivery. Consequently, the firm has been in a position to increase the level of customer satisfaction.

Zappos is focused on the importance of nurturing repeat purchasing behaviour. Therefore, the firm has incorporated learning and psychological theories. The firm exploits the learning theory by leveraging on different product features. Some of the product features that the firm has taken into account to promote repeat purchasing behaviour related to shopping and shipping include making the consumers’ shopping process easy and enjoyable by integrating online shopping, which has improved the convenience of the shopping process.

To influence its customers’ opinion, Zappos has progressively focused on promoting customer happiness. Consequently, Zappos has successfully exploited the cognitive consumer theory, which emphasises that the consumers’ buying decisions are influenced by their perception, attitude, knowledge, and beliefs (Jaakkola 2007). By focusing on the cognitive aspect, Zappos has optimally addressed the cognitive dissonance encountered in the purchasing process. Szmigin and Piacentini (2014, p. 205) emphasise that cognitive dissonance ‘is the state of having inconsistent beliefs and attitudes’. Moreover, consumers feel unease if the consumption situation is inconsistent with their knowledge regarding a product or service. The firm estimates that over 75% of all the firm’s sales are derived from customers who have developed repeat purchasing behaviour (Gaviser & Aaker 2010).

Moreover, Gaviser and Aaker (2010, p. 19) affirm that repeat customers ‘order at least 2.5 more times over the next 12 months’. The above evaluation shows that Zappos has taken into account the precepts emphasised by consumer behaviour and business-buying behaviour theories in its marketing practices. By following these theories, Zappos has successfully attained an optimal market position. Moreover, the firm has been in a position to nurture a strong level of customer loyalty, which is evidenced by the repeat purchasing behaviour.

Strengths and weaknesses of customer and buyer behaviour

The above analysis shows that consumer behaviour is critical in undertaking diverse marketing activities. First, customer behaviour enables an organisation to apply different marketing techniques and tools such as strategic marketing planning. Moreover, an organisation is in a position to adjust its marketing processes effectively, hence improving the likelihood of exploiting marketing opportunities and dealing with the threats. On the flipside, customer behaviours are subjective, which means that they change periodically. Thus, organisations are required to assess the market changes continuously by conducting market research, which can be costly, especially to start-ups.

Contribution of marketing to Zappos

Marketing is a fundamental component in organisations’ long-term performance. Singh (2008) argues that marketing is not only about generating sales. On the contrary, it should be aimed at creating and delivering unique experiences and value to customers. Thus, organisational leaders should not ignore the importance of developing and implementing optimal marketing practices. One of the greatest contributions of marketing to organisation entails transforming business organisations into market-oriented entities (Fodness 2005).

According to Farrell (2000), market orientation involves generating market intelligence from the market by taking into consideration the customers’ needs and disseminating the intelligence gained throughout an organisation’s operation. Farrell (2000) further argues that market orientation is multi-dimension, which means that it focuses on the customers, competitors, and ensuring effective coordination of the exogenous factors. By focusing on these dimensions, an organisation is in a position to enhance the probability of offering clients superior value.

Szmigin and Piacentini (2014) assert the likelihood of market-oriented entity in attaining and sustaining positive performance is considerably high. For example, by positioning itself into a market-oriented entity, an organisation develops adequate market intelligence hence improving its competitive edge. Szmigin and Piacentini (2014) corroborate that market orientation enables organisations to undertake effective marketing practices such as product development, promotion, pricing, and distribution. Singh (2008) further contends that market-oriented firms formulate marketing strategies that are beneficial to their financial performance. Consequently, the likelihood of attaining financial sustainability is remarkably improved. Moreover, the degree of customer-focus in market-oriented firms is relatively higher as compared to firms that have not adopted the concept of market orientation. Consequently, market orientation enables an organisation to upgrade its marketing practices continuously, hence aligning its operations with the changing customers’ needs.

Zappos is conscious of the contribution of marketing in achieving long-term performance. For example, the firm adheres to its policy, which emphasises the importance of developing a personal emotional connection with clients. Subsequently, over the years, the firm has been focused on ensuring that its employees develop adequate skills that would lead to the development of a strong level of customer loyalty. The firm trains all its employees on issues related to establishing customer loyalty. Some of the areas that the firm focuses on in its training process relate to delivering happiness and science of happiness (Gaviser & Aaker 2010).

Due to its commitment to marketing, Zappos has been in a position to integrate an effective organisational culture in its marketing practices. For example, the firm has consistently been in a position to offer and deliver a unique customer experience by focusing on creating a ‘wow’ experience amongst the target customers. Additionally, Zappos has been in a position to deliver the intended brand promise through continuous adjustments of its operations, hence enhancing the degree of personal emotional connection with clients.

Marketing contribution to Apple and Google

Since their inception, Apple Incorporation and Google Incorporation have been focused on attaining global recognition. According to The Harris Poll Reputation Quotient, Apple and Google have a relatively high score at 85.62 and 82.82, respectively (Tode 2012). One of the aspects that have promoted the firms’ market dominance relates to their focus on continuous product innovation. Furthermore, the two companies are keen on nurturing a high level of customer trust regarding their technology products. Thus, Apple and Google have entrenched a strong emotional appeal amongst customers, which has culminated in the development of strong brand recognition.

Tools and techniques in marketing

The extent to which organisations develop competitive advantage through marketing is determined by the marketing tools and techniques adopted. Consequently, organisations’ marketing managers must develop an ample understanding of the most relevant business practices. This approach enhances the organisation’s ability to developing and sustaining a high competitive edge as opposed to its competitors. Some of the most important marketing tools and techniques include market research, developing an effective marketing mix, and evaluating the effectiveness of the marketing performance.

Market research comprises a critical element in the modern marketing paradigm (Stone, Bond & Foss 2004). By conducting market research, an organisation is in a position to reduce the business risk involved in its operation. Hague (2004) argues that market research aids in managing business risk by developing adequate market intelligence. The research aids in gathering relevant information that enhances the effectiveness with which an organisation formulates different marketing strategies such as branding, distribution, and pricing strategies. Consequently, the strategies formulated to align with the customers’ needs (Hague 2004).

Marketing managers can adopt different tools in conducting market research. However, marketing managers need to ensure that the information gathered from the market research is relevant in enhancing an organisation’s long-term performance, which emphasises the significance of integrating effective market research techniques. Forsyth (2009) cites face-to-face and telephone interview as some of the most effective market research techniques that marketers can adapt.

To develop a highly competitive edge, Zappos has integrated the concept of market research. One of the market research techniques that the firm has taken into account entails telephone interviewing. However, the effectiveness of telephone interview depends on the skill and expertise of the interviewer to gather relevant and sufficient information. Through this technique, Zappos has been in a position to develop a strong relationship with its customers (Gaviser & Aaker 2010).

Zappos considers market research as a continuous marketing practice as opposed to a scheduled activity. Thus, the firm has trained its employees on how to seek information from customers by sustaining considerably long telephone conversations. The firm has trained employees on how to personalise telephone conversation with clients, hence nurturing a strong personal emotional connection. This approach has led to a remarkable development of the Zappos brand.

The second most effective technique that organisations should consider in their marketing practices entails developing an effective marketing mix. The marketing mix adopted by an organisation influences the effectiveness with which an organisation develops and sustains strong customer loyalty. The marketing mix is comprised of four main dimensions regarding products. These dimensions include product, pricing, promotion, and distribution. Since its inception, Zappos has focused on giving high-quality shoes to its customers. Moreover, the firm ensures that customers receive their products within the shortest duration, which has been attained by adopting the concept of overnight shipping. This approach has greatly enhanced the firm’s ability to develop a high level of customer satisfaction, thus nurturing a strong level of customer loyalty (Fodness 2005).

In addition to the above elements, Zappos appreciates the significance of creating effective market awareness. Baker (2001) affirms that market awareness constitutes a basic component in organisations’ quest to influence the target customers. Zappos has adopted different marketing communication techniques and tools. One of the marketing communication techniques within the firm entails personal selling, which is undertaken through telephone. Zappos aims at creating a strong connection with its customers through a telephone conversation with clients. Moreover, the firm has integrated emerging technologies in its marketing communication process, which is evidenced by the integration of different social media platforms such as Twitter and Blogs in its marketing communication process (Gaviser & Aaker 2010).

The final marketing technique that an organisation should take into account entails evaluating the effectiveness of the marketing techniques adopted. This aspect plays a fundamental role in providing organisations’ marketing manager with information on the existing gaps, hence undertaking the necessary adjustments. Subsequently, an organisation is in a position to improve its marketing practices. Zappos reviews the implemented marketing tools and techniques continuously by assessing several elements, such as the consumers’ repeat purchasing behaviour.

Changing the nature of marketing

The marketing function has experienced a notable transformation over the past decade. One of the areas that have been characterised by rapid change relates to marketing communication, which highlights the importance of firms adjusting their marketing practices. Baker (2001) affirms that marketing communication is one of the critical components in businesses’ quest to influence the consumers’ purchasing decision-making process. Change in marketing communication has been fostered by the emergence of digital marketing communication mediums. Organisations are progressively incorporating different digital technologies in their quest to create awareness effectively and efficiently. Some of the common digital technologies that firms are adopting include social networks such as YouTube, Twitter, Facebook, and Blogs. Zappos has integrated the above social media technologies in its marketing practices. The firms’ motivation to adopt digital technologies in creating market awareness has been spurred by the need to develop an interactive marketing communication process. Hudson, Roth, and Madden (2012, p. 9) affirm that many ‘companies have embraced social media due to its potential for engagement and collaboration with consumers’.

Consumers are a considerable source of information that firms should seek to exploit. Over 65% of online adults have integrated social networking sites in their decision-making process. The Internet has become a convenient source of information that consumers are increasingly considering in their purchasing decision-making process (Hudson, Roth & Madden 2012).

The digital platforms have enabled Zappos to appreciate the customer’s voice by assessing their opinion on different aspects regarding the firm’s operations. Currently, consumers are adopting social networks in interacting with their colleagues. This aspect has given consumers’ significant control of the organisation’s marketing processes (Hudson, Roth & Madden 2012). Zappos has exploited this market trend by using digital platforms such as Twitter, which has led to the development of an intimate relationship with its customers. The firm has successfully cultivated a culture of consumer-brand intimacy and openness amongst its employees. Through its official Twitter account, Zappos has been in a position to improve its financial performance by attracting new customers.

In addition to improving the effectiveness and efficiency with which organisations create market awareness, electronic marketing platforms have enabled organisations to develop unique consumer experience through online shopping. Adopting e-marketing has enabled Zappos to develop a strong global brand community. Therefore, the firm is in a position to market its products to the global market, hence fostering its financial sustainability. Moreover, e-marketing has improved the consumers’ experience by providing them with an opportunity to shop online. Zappos has integrated the concept of online shopping in its quest to deliver a unique experience to customers.

Conclusion

This case study underscores the importance of developing effective marketing practices to achieve financial sustainability, which is one of the core responsibilities that marketing managers are required to undertake. However, this goal is only achievable if effective marketing practices are implemented. One of the aspects that marketing managers should focus on entails developing and sustaining strong customer experience. In a bid to achieve this goal, marketing managers should influence the consumers’ purchasing decision-making process. Thus, marketing managers should appreciate the aspects proposed by consumer behaviour and business-buyer behaviour theories such as the economic and psychological theories. Gaining such knowledge will enable marketing managers to formulate and implement effective marketing strategies.

Marketing managers should adopt a market-oriented approach to ensure that the marketing practices formulated to align with the prevailing market trends and change in consumer behaviour. Furthermore, marketing managers should implement effective marketing techniques and tools to develop a highly competitive edge. Market research, process re-engineering and the marketing mix are some of the market techniques that marketing managers should take into consideration in their marketing processes. Moreover, marketing managers need to consider emerging trends such as digital mediums in their marketing practices to establish and sustain a collaborative environment with their clients. Subsequently, the likelihood of developing a strong level of customer loyalty; hence the level of financial sustainability will improve considerably.