Post #3: Understanding Consumer Behavior

Hello again!

Two blog postings back to back; it must your lucky day! That or I just have so much new knowledge to share that I cannot manage to contain it all in one post. I would like to focus this post on “Understanding Consumer Behavior”, a highly significant aspect of marketing that allows marketers to discover why consumers choose one product or brand over another, how consumers make these choices, and how exactly companies can use this information when creating value for consumers.

To begin, we must define consumer behavior. It is the actions a person takes in purchasing and using products and services, including the mental and social processes that come before and after these actions. Consumer behavior is more straightforwardly defined with yet another business term known as the consumer purchase decision process (PDP), the stages a buyer passes through in making choices about which products and services to buy. This process contains FIVE STAGES which I will elaborate on.

Stage 1: Problem Recognition: Perceiving a Need

This is the first step in the PDP, when a person realizes they must purchase something due to their current situation, i.e. realizing something as simple as a need for eggs, or something as important as needing a new washing machine.

Stage 2: Information Search: Seeking Value

The second step involves the consumer searching for information. Initially, one will scan their memory for a product to fulfill their need, known as internal search. They will then proceed to execute an external search by accessing any of these three sources:

      1.       Personal sources (relatives and friends)

      2.       Public sources (product rating organizations such as Consumer Reports, government agencies, TV “consumer programs”)

      3.       Marketer-dominated sources (information from sellers including ads, company websites, salespeople, and point-of-purchase displays in stores)

Stage 3: Alternative Evaluation: Assessing Value

Now that you, the consumer, have researched the market for a product that will suit your needs, you have clarified what it is that you are looking for in a product by compiling a list of criteria for your purchase, in addition to seeking out brands within the product class that meet this criteria (consideration set), all the while leading you to develop value perceptions about certain products. This criterion is known as evaluative criteria, which represents both the objective attributes of a brand (such as display) and the subjective ones (such as prestige) you use to compare different products and brands. It is through advertisements that companies subliminally shape our perception of “what we need”. Take restaurant chains, for example. Often times, they advertise their menu items as necessary for the consumer, sometimes claiming that they will "make you stronger". This Subway commercial certainly convinced me...

Stage 4: Purchase Decision: Buying Value

Depending on the price of the product/service, by this stage you have narrowed down your search to a few alternatives within the consideration set. It now comes down to two decisions: (1) where to buy from, and (2) when to buy. For a washing machine or a car, you have likely considered TV ads, visited retail stores/automotive dealers, and viewed many sellers’ websites. It will all come down to such factors as terms of sale, previous experiences from the seller by either yourself or others, and warranties and return policies.

Stage 5: Post-Purchase Behavior: Value in Consumption or Use

Finally: the moment of truth. You have purchased your product or service. You are either satisfied or dissatisfied with what you have paid for. Perhaps that washing machine you bought was supposed to easily steam out the worst of grass-stains with ease; instead, it merely faded them into those white pants of yours, ruining them permanently. If the consumer is dissatisfied, marketers must identify why; typically, this is due to a deficiency of the product or the marketers overselling of a product’s features and benefits, leading to high consumer expectations, and thus, disappointed customers. If the consumer is satisfied, however, the company may have acquired a repeat-purchaser, and perhaps a brand loyal customer (brand loyalty: a favorable attitude toward and consistent purchase of a single brand over time).

Large firms such as Coca-Cola, Verizon, and General Electric use post-purchase consumer behavior to maximize customer satisfaction in the future. If these companies fail to satisfy the consumer with one product, they strive to make up for their failures with their “next big thing”. Coca-Cola did just that after their flop in the mid-1980s with the release of “New Coke” which received major negative attention by the American public, recovering with the reintroduction of “Coca-Cola Classic”.

At this time, you should have a general understanding of consumer behavior, and recognize its significance in relation to marketing. Perceiving why consumers choose one product or brand over competitive brands, how consumers make these choices, and what companies can do in terms of creating value for the consumer when they obtain such information are all characteristics of consumer behavior that prove highly important.

I hope that this discussion has enlightened you with yet another essential marketing concept for you to take away and implement in your own lives and careers.

Thank you, and see you next week!

Adam Geffken

Post #2: The Importance of Environmental Scanning

So we return!

This week I’d like to discuss the significance of environmental scanning, the process marketers use to continually acquire information on events that occur outside of the organization so as to identify and interpret potential trends. Marketers follow five environmental forces that heavily influence these trends: Competitive, Regulatory, Economic, Social, and Technological, or CREST, as I like to remember them. Acronyms are an effective method used by professionals to evoke important phrases through memorable lingo. I became familiar with a few well-known acronyms this past summer within the marketing world through my internship in the Sales & Advertising department at Vermont’s own news station, WCAX. Here are just a few of the acronyms we used regularly:

·         POS = Point of Sale

·         ROI = Return on Investment

·         CTR = Click-Thru Rate

·         SEO = Search Engine Optimization

·         SEM = Search Engine Market

Now, to effectively market to the consumer, marketing specialists must carefully study these forces in order to explain past trends and predict future ones. Recently, Coca-Cola’s marketing analysts asked, “Why has the percentage of Coca-Cola drinkers slowly declined in the past five years?” One explanation for the decline existed in the fact that their competition, the alternative firms that can provide a product to satisfy a specific market’s needs, had risen to an all-time high. With more soft drinks in the market than ever before, the consumer had the highest breadth of beverages to choose from, thus reducing the amount of Coca-Cola consumers. In order to solve this problem, Coca-Cola’s marketing team has been hitting the global market hard with impressively new and innovative campaigns that have proven to be just as good as the “delicious crisp taste” of Diet Coke.

This past Super Bowl XLVIII, Coca-Cola played the ‘multicultural card’ to reach every demographic (describing a population according to selected characteristics such as age, gender, ethnicity, income, and occupation) of the market with its “America Is Beautiful” commercial. The company compiled various lines of the patriotic song sung in several different languages put to relatable images of Americans doing what they love, be that camping, dancing, surfing, or eating with family and friends. By appealing to the many ethnicities that make up our populace, Coca-Cola hoped to effectively entice everyone to buy into their product, connecting Americanism to their brand. The company almost guild-trips the consumer into buying their product, essentially stating that it is un-American to NOT buy Coca-Cola. This form of advertisement is known to marketers as multicultural marketing, or the combinations of the marketing mix that reflect the unique attitudes, ancestry, communication preferences, and lifestyles of different races. View this remarkable ad below:

If we put ourselves in the shoes of Coca-Cola’s marketing team upon realizing the decline in Coca-Cola sales, and we utilized the environmental scanning approach, we would recognize some benefits and detriments due to the environmental forces. First, the detriments: Competitive forces have infringed on Coke’s sales due to a record-high number of competitive soft drink companies. Regulatory forces, that being American’s increasingly health-conscious mindset have led consumers to purchase less soda. The benefits: the rising amount of global media consumption and use of social media as a dominant form of communication for consumers has proven highly valuable for marketers who can likewise communicate their company’s message to consumers. Lastly, and similarly, the Technological forces (smartphones, tablets, etc.) have allowed for increasingly effective means of advertising. In terms of generational cohorts, today’s widespread use of such technology by people from the baby boomer generations (born between 1946 to 1964) to today’s millennials (1994 to the present) has made marketers jobs much easier.

Consequently, after scanning the environment, the Coca-Cola marketing team developed a marketing breakthrough, a revolutionary idea to connect with the consumer, on a personal basis. This beautiful brainchild was none other than the ‘Share a Coke’ campaign this past summer. With over a 1000 names on their 20 ounce bottles of Classic Coca-Cola, Diet Coke, and Coke Zero, the company personally appealed to a majority of the American and United Kingdom populations, attracting soda drinkers and non-soda drinkers’ alike, readjusting Coke sales to a steady incline once again. 

Personally, as a Coca-Cola merchandiser, hence my insight on this campaign and Coca-Cola’s history, I witnessed people’s fascination and joy in stores across Vermont as they searched for their name, many times being asked, “Have you seen the name ___ today?” On certain occasions, I had just put that name in the cooler, and--much like a commercial--I would gladly pull out a cold bottle of Coke for the customer, the personal relationship between supplier and consumer that Coke hopes to portray to its target market.

To conclude this post, I want to stress the importance of Environmental Scanning within the business world. Coca-Cola exists as merely one example of a company which has effectively utilized it in order to strengthen their company’s consumer basis through the analysis of the environmental forces and following their corresponding trends. In order to reinforce their brand, they focused not on market segmentation, but instead, through the establishment of marketing strategies with goals of attracting every potential consumer, or demographic, within the market, regardless of age, ethnicity, gender, or social status. These all-encompassing campaigns are crucial for any marketer that hopes to achieve great success for his or her business. Therefore, as a marketer, one should focus on enthralling as many consumers as possible, whether that includes youth or the elderly (i.e. Facebook). Remember: so long as the customer is able and willing, a product or service for everyone is one that will succeed.

Thanks for taking the time to read my blog, I hope you enjoyed it. Now get out there and use what you’ve learned to promote your product, service, or idea!

Enjoy your week!

Adam Geffken

Post #1: The Essence of Marketing

Hello!

My name is Adam Geffken, a senior at Saint Michael’s College, and an International Relations major with a concentration in Marketing.  As the semester continues, I will post on a weekly basis for my business class, BU-215-B, Marketing, as I log my progress through this course. These segments will provide my readers with accounts that both enlighten and entertain, regarding the material which has been touched upon in class. My primary aim in writing this blog is to educate the reader on the significance of marketing, how one can add value to their product, whether in the business world or through one’s own social experience. Every week, I hope you find yourselves walking away with a greater understanding of this business field, and perhaps even a few morsels of practical information to apply to your lives and your careers.

Now, allow me to disclose some of the terminology that I personally find most applicable to everyday life and the professional world. Let us begin with the marketing mix, also known as the Four Ps, each “P” representing one of the four controllable marketing factors—Product, Price, Promotion, and Place—which the company, represented by the marketing manager, will use to solve their marketing problems. To define each of the Ps, Product is a good, service, or idea to satisfy consumer needs, Price is the value of that product, Promotion represents how the seller entices the consumer to buy his product, and Place exists as the distribution method that delivers the product to the consumer. If properly executed by a marketing team, a company could achieve massive growth rates.

First, the company has to assign a marketing team. It then begins development of a marketing strategy, thus establishing the Four Ps. In order to effectively market toward the consumer, a company must identify its target market—one or more specific groups of potential consumers. If an existing company hopes to produce business growth, it will use a technique to generate such growth in current and new markets via the development of current and new products, known as diversification analysis. Such companies as Ben & Jerry’s have utilized this strategy; the international ice cream organization has recently branched out into the apparel market, branding clothing with their insignia and selling it to potential customers worldwide as they intend expand their target market.

The final term that I would like to discuss is the most relevant term within this course: marketing, the activity for creating, communicating, delivering, and exchanging offerings that benefit its customers. It is not simply advertising a product to the consumer; rather, marketers aim to develop a strong relationship with customers through the delivering of goods with genuine benefits, thus allowing all parties (the organization marketing the product, the stakeholders, and society) to benefit. The essence of successful marketing is to gain loyal customers by providing them with unique value. Loyal customers build the foundations of successful businesses, establishing for such firms a basis future growth. Eventually, such loyalty will actually prove as another outlet of marketing in that this customer loyalty will influence potential customers to become actual customers as they invest in the firm. Companies that have developed such strong, loyalty-based relationships with their customers include Walmart, Costco, or Southwest Airlines, due to providing their customers with the best price.

I hope that within this first blog post you have learned a little something about marketing, and enjoyed yourself in the process. This field of business proves highly significant within the business world, but also provides teachings that can be applied to our personal lives. In other words, one does not simply need to learn to add value to their company’s product, but instead, one can learn to build strong personal relationships and add value to themselves in addition to their cohorts. Such is the essence of networking, a term which may be touched on again later in this course. For now, thank you for taking the time to enjoy this blog, and begin to educate yourself on the discipline of marketing. See you next week!

-Adam