CONSUMER BEHAVIOR and The concept of value creation
CONSUMER BEHAVIOR
The concept of value creation has empowered consumers to demand quality products and services that create value for them. Through this, individual businesses have to consider the different behaviors among consumers that renders their products and services superior or ineffective in the market (De Mooij, 2019 p 3). Consumer behavior involves the unique characteristics exhibited by individual consumers, organizations, and different groups that relate to the selection, buying, and usage of products and services while they attempt to satisfy their needs and wants. Similarly, consumer behavior can refer to the underlying motives of different actions assumed by individual consumers that directly impact the effective competition of these products and services in the market. There are some factors that have been identified to heavily influence consumer behavior in a specific market (Mandel, Rucker, Levav and Galinsky, 2017 p 137). These include product characteristics, consumption situation, personal characteristics, and marketing strategy used by an individual firm.
On the same note, there are two forms of consumer behavior that have been identified to significantly impact effective competition of a given product and services in the market. These include the power that consumers have in regards to choosing between two alternatives in the market and activism (Zhang and Benyoucef, 2016 p 99). Activism is largely associated with the need for observation of ethical standards in all systems and procedures within an individual business, choosing between two alternatives is primarily associated with the unique characteristics among individual consumers, organizations and groups that influence their choices in the market (Rana and Paul, 2017 p 163). In consideration of these, the study will concentrate on analyzing these two forms of buyer behavior and how they can impact the marketing operations of an individual company.
Choosing between two alternatives
The unique characteristics among individual consumers as well as existing factors within their external environment always influence the decision-making process of individual consumers. The consumer decision-making process is an essential concept that business must always consider while structuring their marketing strategies given that the process heavily influences the final product or service an individual consumer will opt for in the market to help in satisfying their needs and wants (Khan and Mohsin, 2017 p 67).
The consumer decision-making process involves five stages that buyers always undergo before arriving at the best service or product that can optimally satisfy their needs and wants. The first stage involves problem recognition in which an individual consumer identifies that they have a problem that needs their attention to be eliminated. These problems can be from existing needs from an individual’s daily routines or can be created by the marketing efforts of an organization (Lusk and McCluskey, 2018 p 12). The second step in the consumer decision-making process involves information search. At this stage, individual consumers engage in searching for information that can help them in satisfying managing the problem they had earlier identified. Through this, they will be engaging friends, marketing teams, and internet sources like the social media platforms (André, Carmon, Wertenbroch, Crum, Frank, Goldstein, Huber, Van Boven, Weber, and Yang, 2018 p 32). The presence of an organization in the majority of these sources of information can be essential in directing the consumers to consider their products and services. The third step in this process involves the evaluation of available options and the selection of viable options (Wang and Wang, 2017 p 3450). Both the existing external and internal factors among the consumers will play a key role in their selection of the viable options that they can utilize in managing their problems.
The next step involves store choice and purchase. The store choice heavily depends on the accessibility of these products and services that a consumer had earlier chosen to help in satisfying their needs and wants. Similarly, though the consumer may be having a specific choice but the marketing strategies applied by different organizations at the shelves can further influence their decision and choose another product that they view can better satisfy their needs and wants. The last stage in this process involves the postpurchase activities. These can include activities like repeat buying, referral of a friend, and public acknowledgment of the effectiveness of the product or service they had consumed. Through all these are several factors that impact the decisions of an individual consumer at each stage. These factors can be categorized into external and internal factors.
External factors
External factors that influence the choice of an individual consumer among alternatives are factors that exist within the socio-economic sphere. They include demographic factors like income level and social class, the marketing activities among individual organizations, cultural values, and referencing group an individual consumer is heavily associated with. Demographic structures heavily influence the manner in which a product or a service is perceived within a specific locality (Wang and Wang, 2017 p 3452). A population largely made up of the elderly (to be specific baby boomers, will always ignore heavy utilization of technological products and services while a population with a significant number of the young population (generation Z and generation Y) will always demand products that intensely utilize technology (Rana and Paul, 2017 p 162). Similarly, other factors closely related to demographic structures like the level of income and social class also have the ability to influence a consumer’s choice in the market. Individuals with relatively high income and associated with higher social class in the social structures within the society will always demand high-end products while those of low social classes and with a low level of income will seek relatively cheap goods. These demographic factors are always critical in the third and fourth stages of the consumer decision-making process.
The marketing strategies utilized by individual organizations also play a significant role in the choice an individual consumer will make in the market. These will be critical in helping consumers identify the problem in their daily lives; hence create the need to fill such gaps among them. The marketing strategy can also be critical in helping them evaluate the available products and services, which are easily accessible and then select those that can help them satisfy their needs and wants (De Mooij, 2019 p 5). Similarly, the marketing strategy used on the shelves can also help an individual consumer make a last-minute deviation from the original choice and select another product or service. On the same note, the existing cultural values held by individuals can also influence the choice they make while in the market. Culture plays a significant role in shaping the perception and views of individuals in regard to the existing products in the market (Khan and Mohsin, 2017 p 65). Additionally, the referencing group an individual consumer is heavily associated with also influences their perception and views of the existing products and services in the market; hence shape their behavior in relation to the choices they make in the market.
Internal factors
Internal factors that shape the behavior of individual consumers in relation to the choices they make in the market include attitude, personality, lifestyle, motives, needs, and emotions. The attitudes that an individual has on a product or service in the market can influence their consumption choice hence shape their behaviors (Rana and Paul, 2017 p 161). Similarly, their personality can also influence their view of a product and shape the views of other consumers in the case of a celebrated personality. On the same note, the lifestyle that an individual consumer chooses to live always conforms to specific products and services hence influence their choices while in the market since they will have to choose only the products and services that conform to their individual lifestyle (Wang and Wang, 2017 p 3451). Emotions and needs exhibited by individual consumers also influence the choice of the products and services they make to satisfy their needs and wants. Through all these, the rationality that exists among individual consumers is always shaped by several factors. Some beyond their control while some within their control. It is always up to individual businesses to avail products and services using the right marketing strategy that can effectively influence the choices of individual consumers.
Activism
Consumer activism is primarily concerned with ensuring individual businesses observe the required ethical standards in their systems and procedures and produce morally accepted goods and services. Through this, the underlying moral standards in the society always shape the manner in which individual consumers will collectively behave in regards to a particular product or service offered by an organization (Filimonau and Krivcova, 2017 p 520). As a result of this individual businesses in a specific industry must always ensure they observe the moral standards within the society or risk facing the repercussions of consumer activism. Some of these ethical standards may underline the need for healthy products and services, proper conservation of the available scarce resources through minimum wastage, proper observation of workplace environment in relation to employee rights and safety as well as ensuring environmentally friendly products and services.
Consumer activism can occur in various forms, which can include boycotting, legal cases, media activism, and whistleblowing (Xie and Lin, 2017 p 305). Boycotting majorly involves abstinence for a particular product or service as a result of the use of systems and procedures that breach the existing moral standards in the society. Boycotting actions can be on an individual basis in which businesses involved cannot feel the impact of such actions (Wang, 2018 p 85). Similarly, boycotting can involve a significant number of the population in the society in which individuals businesses can incur a significant loss. If such a mass boycott is directed towards a single product in the market, the business involved will lose a significant portion of its market share to its competitors. However, is such mass action involve several businesses in the same industry a market gap can be created which can encourage new entrants to fill such gap.
On the same note, studies have identified that individuals may feel that their individual participation may not make any difference hence prevent them from participating in boycotts. This is always referred to as the small agent problem (MacKay, 2017 p 16). Similarly, individual consumers can also be tempted to let others participate in the boycott on their behalf, which is always referred to as a free-ride problem. Both the free-ride and small agent problems always influence the level of an individual consumer’s participation in such actions (Hyman and Tohill, 2017 p 4).
Additionally, self-interest also plays an important role in pushing individual consumers to participate in such actions. In most instances, the need for reciprocal behaviors among consumers as a result of self-interest forms the major factor that motivates individuals into boycotting products and services. Naturally, individuals always indebted to good actions and deed and also consider punishing unfriendly actions. An example of boycotting is when the animal rights group conducted a successful long-running boycotting campaign against Burberry Group Plc in 2017 (Carlile, 2020 para 3). The boycotting campaign was against the company’s use of fur in making its garments. Consequently, the company later that year streamlined its systems and procedures to accommodate the consumers’ ethical concerns and abandoned the use of fur.
Apart from boycotting consumer activism can occur in the form of media activism. In this, the various media platforms including social media are used in sensitizing the need for ensuring proper ethical conduct among organizations in ensuring morally acceptable products and services. These media platforms are also used in exposing the unethical procedures and systems used by an individual organization (Page, 2017 p 54). This shapes the perception of individual consumers in regards to the company’s products and services. Consequently, they choose substitute products to help in satisfying their needs and wants. On the same note, legal actions involve lobby groups filing legal cases against the unethical operations utilized by individual companies in generating their products and services. Such cases can also influence the perception of individual consumers (Ahluwalia and Sanan, 2016 p 49). Lastly, whistle-blowing primarily involves raising concerns of unethical operations in an organization’s systems and procedures ( Chen, 2019 p 101). Such actions also influence the behaviors of individual consumers in the market and can make them reconsider their choices. Through all these, activism is primarily concerned about ensuring quality products and services that meet the required ethical standards in the society.
Vodafone Company’s marketing strategies
Vodafone Company is one of the best-performing companies in Britain. The company participates in the highly competitive telecommunication industry. The company primarily engages in mobile connectivity services and provided these services across 25 countries and partners with other networks in 47 countries. The company also has an enterprise service division that provides telecommunication and IT services to corporate clients in 150 countries (Vodafone Company, 2020 p 2). The current company’s market cap is £41 billion (Vodafone Company, 2020 p 7). The company boasts of the best network connection including both broadband and mobile services. The company also heavily utilizes the current innovation in the form of a 5G network connection, which helps it enhance the quality of services it offers to the consumers.
In relation to the company’s marketing strategy, the company heavily utilizes the 4Ps marketing strategy in ensuring effective competition in all its markets. In relation to pricing the company sets its prices at similar levels in the industry but ensures the consumer enjoys a well-enhanced quantity of products and services (Vodafone Company, 2020 p 6). Pricing is always essential in the evaluation and selection stage in the consumer decision-making process. On the same note, in relation to product features the company ensures high-quality products and services with a touch of innovation to create value to individual consumers. This can be seen with the use of a 5G network that some other companies are struggling to implement. The creation of quality goods and services is always essential in creating a consumption problem for individual consumers and initiating the buying decision-making process. This has given the company a competitive edge over other competitors like AT&T, NTT, Deutsche Telekom, and TATA communication (Colli, 2020 p 250).
Additionally, in regards to promotional appeals the company utilizes offers to attract consumers into considering its products and services. This is always essential in influencing the evaluation and choosing the process of an individual consumer. Lastly, in regards to place Vodafone company always ensures its products are strategically placed in a manner that they can be easily accessed by individual consumers. Through this, it has a mobile application in place that encourages constant interaction with individual consumers and facilitates convenient access to its products and services. The ease of accessibility also influences the consumer’s store selection (Lightfoot, 2019 p 262). Through all these strategies the company’s marketing strategy has a significant influence on the buyer decision-making process, which justifies its high performance in the market. The company also ensures appropriate ethical standards in all its systems and procedures which deter any form of consumer activism. All these are essential in ensuring effective competition as seen in Vodafone’s case.
Conclusion
The power of choosing between two alternatives and consumer activism are two forms of consumer behaviors that illustrate the rationality that exists among individual buyers. Both the external and internal factors like demographic factors, cultural values, personality, and lifestyle are essential factors that influence the choices made by individual consumers in their decision-making process. Similarly, the different forms that consumer activism can occur like boycotting and media activism among others also influenced the behaviors of individual consumers towards a specific product. However, as long as an individual ensures the appropriate ethical standards within their systems and procedures they can rarely experience instances of activism. Additionally, as highlighted by the Vodafone Company’s case effective utilization of the four Ps in marketing can help a company in acquiring competitive advantage; hence effectively compete within their environment. Consumers have significant power to an organization’s operation in which individual businesses should utilize evidence-based practices in enhancing their operations and avoiding undesired consumer behaviors.
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