Consumer Behavior Analysis

Question One

Customers are the core for any business success. Once a company is able to define its customers’ needs and preferences and device the right way to satisfy them, the customers will remain loyal and not switch to the competitor (Elizabeth & Lynn, 2014). Companies have realized this and are aggressively undertaking marketing initiatives that will ensure that they satisfy their customers’ needs and make them remain loyal to them. Companies like Pandora and Amazon use behavioral targeting to attain these two goals. They do this by collecting all the relevant customer data at every touch-point to form a database that will be useful for their marketing strategies. They then use the information to develop customer profiles for all the digital users. By so doing, these companies are able to customize every consumer’s buying experience throughout their time with the organization. Such information includes websites, e-mails, customer service interactions, and offers. This information is personalized and constantly updated (Elizabeth & Lynn, 2014).

Question Two

Branding enables a business to position itself in the minds of its customers. General Electric does what is known as umbrella positioning. This involves the use of one brand for the entire line of a company’s products. This type of branding emphasizes the brand and uses similar visual elements as well as the brand message. General Electric has successfully used the corporate umbrella strategy. The company operates different lines including aviation, electrical and financial businesses which are all connected to General Electric brand. The company has 4 branding policies from which its managers can choose. The first one is a monolithic one in which the company signs a product or a company as a single brand. The second one is the endorsement type, entailing GE signing next to a product or company name. The holding type is one in which GE is discreetly used. This way, the company has been able to bring several lines of products under one brand (Hayes, 2008). 

Question Three

Twitter, Inc. is a US based company that is headquartered in Francisco, California. Initially, the company was only operated in the United States but later, it expanded overseas and is now a global entity with more than 25 offices globally. Twitter as an online company is not restricted by national boundaries. It offers news and social networking services which provide a platform for users to post and interact with “tweets”, which are short messages. Since its creation in March 2006, the company gained global popularity through its services. The company’s user base has been increasing internationally, surpassing its growth in the US. Users across the globe access the company’s services through its Short Message Service (SMS), website interface, or the mobile device application software. Even in countries where the company does not have offices, users still access its services. Therefore, the company is a global company regardless of its offices (Hayes, 2008).

Question Four

With the right branding, a business will be able to generate profits for a long time (Winchester & Bogomolova, 2008). To come up with the right brand, there are guidelines that a small business can follow. Firstly, know your customer. You need to understand the needs, wants as well as their habits in order to device the best way to serve them. Secondly, use the available knowledge carefully by communicating the right message to the right people in order to have effective customer responses. Thirdly, embrace failure as this provides a critical element in the brand-building process and through this, you will know how to avoid failures. Fourthly, think like a big business that is operating within a large market because this is a constructive dream. Fifthly, use the right color as well as design, as they define your visual identity. Since this is the first encounter that the customer has with your business, it should create the right impression. Sixthly, understand that your brand goes beyond your logo. Lastly, carefully choose your brand name to effectively create brand awareness (Winchester & Bogomolova, 2008).

Question Five

The least clear point is on creating long-term loyalty relationships. A company can satisfy its customers and even surpass their expectations through the product and service offerings (Lynn & Angeline, 2011). Customer loyalty may depend on several factors. A customer may desire a product or service better than the competitors and is thus natural for such a customer to remain loyal to that particular brand. However, other factors may lead a customer to be disloyal. For instance, the customer may be forced to go for a competitor’s product because it is available, or it is cheaper or does so for other reasons. Do companies have total control over customer loyalty in ensuring that they can still retain them even when the competitor’s products have a better offering? In a marketplace where product and service offerings have very little differentiation, a customer may still get the same satisfaction even without being loyal to a particular brand. In such a case, what can a company do to stand out?

Question Six

Differences exist in consumer and organizational buying behaviors based on the buying purpose, quantity purchased, the decision process, the knowledge of the market, the types of goods, the effects as well as the buying process. Consumers buy goods as the end users, but organizations buy goods to resell them for profit. Consumers buy goods in small quantities but organizations buy in bulk in order to maintain inventories and also to get economies of scale. The consumer undertakes the buying decision by themselves but organizations’ decisions are guided by objective factors that are concerned with production and distribution. Most consumers do not have the full information about the market (Rositter & Bellman, 2005). However, organizations analyze the available information in the market before making a purchase decision. Consumers buy a variety of goods for consumption while organizations buy limited lines of products for their business needs. The consumer’s buying process is simple as it does not require any formalities, unlike organizations which need many formalities and need to have extensive contacts. 

Question Seven

The market consists of both individual buyers as well as organizations. To operate their businesses, organizations also need to buy goods and services in order to run their businesses and create other products and services to sell to other companies and individual customers. Organizational buying behaviors are unique to individual buyer behavior. Buyer to buyer purchasing decisions are characterized by complexity and are determined by the operating environment. They have technical, timing as well as organizational complexities. Decisions take long periods of time, involving many technical dimensions and vary according to the organization. Business to consumer buying behavior is based on transactions that occur between businesses and consumers. The business to consumer buying behavior is focused on the end user as the customer and thus concerned with retail transactions (Rositter & Bellman, 2005). Firms are focused on building long-term relationships with their customers and engage in special efforts to satisfy them.

Question Eight

Post-purchase processes happen after the customer has already bought a product. The process involves post-purchase dissonance, product use and non-use, disposal, purchase evaluation, customer satisfaction, repeat purchase and customer loyalty. It thus deals with existing consumers rather than potential ones. Consumer satisfaction is the degree to which a product meets or surpasses the expectation of the customer regarding its attributes (Lynn & Angeline, 2011).   It is important for an organization as it provides an indication of the customer’s intention to purchase, as well as their loyalty. Customer loyalty is difficult to measure because the proof of loyalty can only be ascertained after the occurrence of an action to indicate the person’s loyalty. Some of the metrics used include the repurchase ratio, customer loyalty index, customer engagement numbers, Net Promoter Score, and the upselling ratio.

Question Nine

The first step in consumer buying process is need recognition. In this case, the customer acknowledges an existing need and requires a product that can satisfy it. Organizations capitalize on this by advertising how their products can meet these needs. The second step is information search (Hayes, 2008). After the person recognizes a need, they start to search for information on how this need can be satisfied. Companies intervene in this stage by engaging in thorough campaigns and promotions to ensure that their products are known everywhere so that wherever the person is, they can easily see their products. The third step is the evaluation of alternatives. After the prospective consumer has information about the different competing products, he/she evaluates them to see which one has the best offer. The fourth step involves the purchase decision, whereby the consumer actually buys the product. The final stage involves the post-purchase behavior. Here the customer may be satisfied or dissatisfied by the product and thus gives a negative or positive feedback. 

References

 Elizabeth A. M & Lynn R. K. (2014).  Belief Systems, Religion, and Behavioral Economics. New York: Business Expert Press LLC.   

Hayes, B, E. (2008). Measuring customer satisfaction and loyalty: Survey design, Use and Statistical Analysis Methods . ASQ Quality Press. 

 Lynn R, K & Angeline G, C. (2011).  Consumer Behavior Knowledge for Effective Sports and Event Marketing. New York: Routledge. 

 Rossiter, J & Bellman, S. (2005).  Marketing Communications: Theory and Applications . Pearson. 

Winchester, J. R. & Bogomolova, S. (2008). Positive and negative brand beliefs and brand Defection/uptake,  European Journal of Marketing, 42 (5).