Buyer behavior refers to the systematic approach that the consumers follow when entering the purchase process and making key buying decisions. The respective steps involved in the consumer buying process as well as the common modes of decision making are essential for companies in the development of marketing strategies. Therefore the organizations should understand how consumers interact with the marketing mix as the psychology of each consumer considers the product or service on offer in terms of their own culture, experience, attitude, and personal perception. There are several aspects relating to buyer behavior that should be considered which include segmentation, targeting, positioning, repositioning, consumer attitude, lifestyles, personal influences, social class and culture.
Segmentation
Segmentation refers to subdividing the market along some commonality or similarity. General motors pioneered segmentation with a stair-step offering from the famous Chevrolet, Oldsmobile, Buick and Cadillac. The company produced the various car segments in order to meet the needs of the specific consumer segments in terms of pricing (Ketan, 2015). The Chevrolet was the cheapest while the Cadillac was the most expensive. However, General motors began to produce several models within the segments which impacted negatively on the performance of the car segments. However it is important to note that consumer’s demand for the various segments changes with time depending on the prevailing conditions in the market. Therefore, there is need for companies to respond proactively to the market changes as well as emerging customer needs. Currently, General Motors has several segments which include Chevrolet, Cadillac, Baojun, Buick, GMC, Holden, Jiefang and Opel. This has been as a result of the changing consumer preferences as well as emerging markets like China which have necessitated the introduction of new cars unique to the particular market segment.
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Apart from pricing segmentation, General Motors practice geographical segmentation. The geographical segments identified include North America, South America, India, China and Europe. China is the most important market for General Motors because it contributes a large proportion of the company sales. The SUV segment is performing well in China. The company sold over 2.5 million units of Baojun brand in the SUV segment. This is because there is a huge local demand for SUV vehicles in China. India produces mainly the Sedan segment which is exported around the world. North America accounted for 70% of General Motor’s total revenues in 2015 due to the high demand of pick-ups and trucks in the region. In North America, General Motors delivers brands such as Buick, Cadillac, Chevrolet and GMC whereas it delivers vehicles under brands such as Holden, Opel, Vauxhall along with Cadillac and Chevrolet. The European market contributed around 12% of the company’s total revenues in 2015.
Targeting
Targeting refers to selecting a particular market to sell the products to. The selection is based on the unique characteristics of the market. In order to design a good product, the company must identify the unique needs of a particular market. The market is always divided into groups with common identifiable characteristics. The market group that is most likely to buy the company’s product is the target market. a target market is characterized by the following factors: demographics, geography, benefits, lifestyles and loyalty.
General Motors targets the truck and pick up market in North America where there are a lot of industries that require transport facilities. The company has focused on producing high quality and cost effective trucks and pick-ups to meet the demand of the North American market. The ease of distributing the vehicles in the region makes it an ideal destination market for the pick-ups and trucks.
The world’s third largest automaker, General Motors, is currently investing $5 billion dollars in a new family of vehicles that are meant to target many of the world’s fastest growing emerging markets. The objective of the move is to facilitate growth of the firm (John, 2016). The vehicles ranging from compact cars to small crossover utility vehicles will be manufactured and sold to the four developing markets of Brazil, China, India and Mexico. The first new models will be Chevrolet brand with the initial ones planned for the 2019 model years. The move was inspired by closure of production in Russia and Australia. The production of the vehicles will be subject to the customer requirements as well as identifying the value points that will ensure return on investment.
The company therefore plans to consider the demands of the different markets as well as the different requirements for the vehicle safety, fuel efficiency, in order to effectively meet the needs of the market. General Motors is marketing Chevrolets to entry level car buyers especially in Eastern and Central Europe. The Opels and Vauxhalls are manufactured for the middle-market consumers. The Cadillacs target the rich as they are popular among the wealthy auto buyers world-wide. Moreover, General Motors has considerably targeted the Middle East market where it hopes to increase sales.
Positioning
Positioning is a marketing strategy that aims to make a brand occupy a distinct position in the consumer’s mind in relative to other competing brands. General motor has positioned itself as a world leader in the car manufacture industry. The company has emphasized this position by ensuring that it has a global presence. This has been achieved through opening up of manufacturing divisions in different places around the word. General Motors has manufacturing plants in America, Europe, Africa, India, and Japan among other regions of the world. The company has also developed effective distribution channels to ensure that its cars are accessible by the global market. The company is currently focusing on the global emerging markets like Brazil, China and the Middle East. The automaker has launched creative agency review of one of its core brands in an effort to secure its position both in the local and the global market. In order to position themselves in the minds of the buyers as a world leading auto manufacturer, General Motors continues to intensify advertising of its brands as well as expanding its production.
However, the loss of market focus across the many different portfolio levels in the company has hindered the effectiveness of its positioning in the world market (Treffis, 2015). The portfolio of all divisions, the brands within divisions, the physical and cosmetic variations among models, the models within brands and the variations in dealers and suppliers have made it difficult for consumers to identify the General Motors brands effectively. The net effect of the wide portfolio makes the company to lose market focus hence decrease in sales. Unlike other competing brands like Mercedes which is identified with engineering, BMW which is identified with drivability, Toyota identified with reliability, General Motors brands lacks a simple differentiating idea in order to stick in the minds of consumers.
Repositioning
Repositioning refers to the marketing strategy involved in changing the marketing mix in response to changes in the market place. The company has had to reposition the Buick segment in order to be perceived as more superior than the Chevrolet segment under the tagline “quality without paying for status”. The move was aimed at making the model look more appealing to the prospective customers.
Consumer Attitudes
Consumer attitudes refer to the consumer’s feelings about a product or company, consumer’s beliefs about a product or company and the consumer’s behavioral intentions towards a product or company in the market place. The consumer attitudes changed positively towards General Motors Company when it began using social media platform to address consumer issues in 2005. The gesture by the company improved the customer trust and loyalty as the customer issues were handled easily by its techno-savvy staff. The popularity of the company increased as more customers shared experiences in the online platform provided by the company.
The consumers’ attitude towards General Motor’s trucks and Pick-ups has been positive in North America given the reliability and the efficiency of the vehicles. This is due to the advanced technology used in the manufacturing of the trucks and pick-ups. The increased use of the vehicles in the region has improved the brand equity of the General Motor’s brands making it easier for the customers to identify themselves with the features of the brand. The increased advertising has also influenced the attitudes of the prospective buyers towards the product.
However, the cash-flow challenges that have been affecting the company may have had some negative influence on the attitudes of the customers in terms of reliability and stability. The company should ensure that it identifies ways and means of improving its cash-flows as well as strengthening its capital base in order to avoid negative publicity which may affect the image of the company. The company has produced electric cars in a bid to contribute to the global initiative of reducing emission of greenhouse gases in the atmosphere. The company has therefore appealed to the global community and it will be perceived as an agent of environmental conservation. Moreover, the gesture has improved the public image of the company in terms of creativity and innovation as well as social responsibility.
Lifestyles
Lifestyles refer to individual opinions, interests and behavioral orientations. General Motors has consistently manufactured cars for specific lifestyles. The company has been producing cars for the middle class like Buick that is common among the working population. The cars have the features and fuel consumption patterns relevant to the particular lifestyle of the working population (Eric, 2016). The Chevrolet brand has been specifically developed for the economical car users like the low income who do not use the cars intensively. Moreover, the company also manufactures car for those consumers who enjoy hiking. The brand manufactured specifically manufactured for the adventurous consumers is the GMC which is suitable for rough terrains which are popular among adventure seekers. The GMC vehicles are specifically designed to offer excellent services in terrains.
The company also manufactures sports utility vehicles like Baojun that are popular in China. The cars are specifically designed to offer comfort for sport loves in China and around the world. In this way the company has effectively addressed the needs of specific lifestyles of consumers. The company has also manufactured electric cars that are suitable for people who like conserving the environment. The cars use green energy to move around. The innovation has really addressed the challenge of global warming. The company has also appealed to the sporting community as the SUVs will be associated with the various sporting activities.
The pick-ups are associated with farming in the Northern American region. Therefore, the vehicles produced have met the needs of people who practice agriculture as an economic activity. Therefore, the upcountry living style is well facilitated by the pick-up trucks. Therefore, the pick-ups have served to enhance the lifestyles of the people practicing agriculture in the upcountry settings.
Personal Influence
Personal influence refers to the power of individuals to control the purchasing decisions of others. General Motors has significantly employed the effect of personal influence in driving the demand for its Chevrolet brand. In September 2016, General Motors enlisted the cognitive capabilities of IBMs Watson Platform to develop the Chevrolet Global Positivity System. This was a mobile and desktop platform that evaluates a user’s social media presence to determine their positive impact. Therefore, a positive never give up attitude has been a driving force behind the General Motor’s Chevrolet brand and has motivated the users to turn the seemingly impossible possible. The Chevrolet brand team uses the platform to influence the consumers around the world to develop a positive attitude towards the Chevrolet brand because it is associated with positivity; something every consumer longs for. By partnering with IBM to develop an effective platform, the Chevrolet brand has been able to positively influence buyers. Furthermore, the platform provides an opportunity for consumers to share positive sentiments regarding the Chevrolet brand therefore increasing the brand awareness and loyalty.
One of the key pillars of the online platform is that it facilitates cognitive computing essential for obtaining valuable insights. The company can use it to engage with the customer and influence him to make a purchasing decision or even reveal a hidden value. The initiative has enhanced personal engagement and has helped customers to identify the value they are delivering to fellow customers through positivity (Parul, 2016). Therefore, the Chevrolet brand utilizes personal influence in encouraging customers to make buying decisions through positivity. The technology has been effectively used to amplify the human attributes in the personal engagements. Therefore, personal influence is a great tool in terms of influencing the buying behavior of consumers as blending human attributes in the promotion process appeals to the emotions of buyers.
Social Class
Social class refers to a group of people with similar levels of wealth, influence as well as status. General Motors has effectively targeted the respective social classes with unique vehicle offerings. The company has identified the differences in the financial ability of the different social classes and crafted a car that is specific to each social class. The company’s tagline ‘we produce cars for every purse and purpose’ clearly demonstrate how it has targeted the respective social segments (Roger, 2015). The company has Chevrolet brand that is meant for the low income earners in the society who probably got their first jobs. The car is designed for the basic purpose of driving people around. The cars are appealing to low income earners as well as they are reliable.
The company has manufactured Opel and Vauxhall brand that are meant for the middleclass. The cars are well designed and the features and the prices have been tailored to match the financial capabilities of the middle class in the society. This demonstrates that the social segmentation employed by the company is appropriate and effective.
The company manufactures Cadillac and Hummer brands which are specifically meant for the wealthy individuals in the market. The features, design and the quality of the brands are high class. The cars have features that are easily identifiable with the wealthy and powerful in the society (Phil, 2015). Therefore, General Motors recognized the effect of the social classes in the demand of the cars they produced and went ahead to address the need by tailoring a product specific to each social segment.
Culture
Culture refers to the identifying norms of a certain group of people. Culture has influence the General Motors conducts its business in a number of ways. The culture of buyers involving online shopping made General Motors to launch and online store in order to meet the needs of the increasing global population accustomed to online shopping. The initiative has transformed the way the company does business significantly.
Conclusion
In conclusion, consumer buying behavior is a vital aspect in organizations that are consumer-centric. Knowledge about the tastes, preferences, cultures, personalities among other factors assist in the development of appropriate and relevant product that can meet the needs of a particular market segment or individuals. This in turn translates to customer satisfaction and loyalty.
References
Parul, D., (2016). Online advertising and its impact on consumer behavior, International Journal of Applied Research , 2(2), 200-204
Roger, M., (June 2015). How General Motors lost its focus and its way, Ivey Business Journal http://www.iveybusinessjournal.com/2015/6/how-general-motors-lost-it-focus-and-way/html.
Phil, L., (July 28, 2015). GM targets emerging markets with new line-up, CNBC http://www.cnbc.com/2015/7/28/gm-targets-emerging-markets-with-new-line-up/html.
Treffis, T., (November 18, 2015), How China is key for General Motors growth, Forbes Magazine http://www.forbes.com/sites/greatspeculations/2015/11/18/how-china-is-key-for-general-motors-growth/#7885a2285580
Ketan, K., (December 10, 2015). GM’s new strategy focuses on exports and new segments to boost sales, Economic Times. http://economictimes.indiatimes.com/passenger-vehicle/cars/gms-new-strategy-focuses-on-exports-new-segments-to-boost-sales/articleshow/45444009.cms
Eric, P., (February 4, 2016). GM’s global strategy: a brand for every place, The New York Times http://www.ny.com/2016/2/4/gm-global-strategy/html.
John, P., (March 15, 2016), Key geographical markets for general motors, Market Realist httpp://www.marketrealist.com/key-geographical-markets-for-general-motors/html.
General Motors, (September 14, 2016). Discover your positive influence with the help of the Chevey and IBM Watson. http://www.gm.com/mol/m-2016-sept-0914-positivity/html.
