Executive summary
Consumer behaviour entails studying when, why, where, what and how consumers buy or do not buy a product or use a service. It mixes aspects from sociology, psychology, anthropology as well as economics. As Schiffman and Kanuk (2007) explain, consumer behaviour tries to comprehend the consumer decision making processes, as an individual and also as a group. The study involves analyzing characters of individual consumers like demographics as well as behavioural variables in attempting to comprehend the needs of consumers. At the same time, it attempts to examine the influences that consumers’ gets from other groups like family, relatives, friends and the society as a whole. Consumer behaviour is cantered on consumer purchasing behaviour, whereby the consumer plays three main functions of consumer, payer and purchaser. Blythe (2008) explains that relationship marketing is a very important asset when it comes for customer behaviour assessment since it has a great interest in re-examining the correct meaning of marketing by re-affirming the significance of consumer or the buyer.
A high importance is as well put in customer attraction and retention, management of customer relationship, personalisation of services and goods, customization as well as personal marketing. According to Solomon (1994) consumer behaviour is the process as well as the activities that people are engaged in when they are looking. Selecting , buying, using , assessing, and disposing of good as well as services so that their satisfy their wants and desires. The following research paper will examine consumer behaviour of fast cars as Foxall (2005) clearly explains, for companies that want to retain or even increase their sales, understanding consumer behaviour is the fundamental aspect. The key elements of consumer behaviour include factors that influence buying behaviour, the role of motivation and consumer behaviour theories and models.
An Introduction to your chosen brand/product
This paper is going to examine purchasing sports cars, which are one of luxury goods continue to attract high sales all over the world. Mainly people buy sports cars for luxury at a high premium price. The question that many others ask is: why spend millions on such cars? As Nagel(2002) notes, demand by consumers for these cars remains hard to explain, nevertheless, in the recent past the market has witnessed tremendous increase in these products. These cars are normally supported by high and extensive market promotion and advertising by manufactures of these cars, creating a “status symbol” for wealthy individuals
The main users and the profile of these customers
The main users of these cars are young adults who are economical well off or old rich who still prefer looking young and modern. Many sports personalities and all type of entertainers such as musicians and actors/actress are known to like these kinds of cars. However, this reports apart from targeting these groups of customers it as well targets those middle class people who aspire to own a sports car one day.
The key factors influencing consumer behaviour for this product / brand
In general the decision of buying a sport car depends on material need to satisfy the individual and also on social prestige need of the individual. In recognizing such needs, companies emphasize the exclusivity of the product. For example, in 2002 Ferrari promised to produce only 4,300 cars despite the fact that there was a waiting list of the cars of over 2 years (Nagel, 2002). This method of limiting the number of products is also applied in other industries such as watches and jewellery. Sometimes, companies limit the number of sports cars through use of exclusive distribution channels and at times use of legal actions. These marketing strategies by companies are undertaken with a belief that the product value will diminish if the customers find the product widely available thus, question the justification of highly pricing the product.
Characteristics of consumer shopping behaviour
Today, the market is being driven by consumers who are more informed and have more money spend than previous. Customers currently are shopping for quality and luxuries so that they can enhance their quality of life. With improved purchasing power consumers are turning way from purchasing material things to experimental consumerism. Thus, customers will purchase a product because of one or more reasons underlined below.
Experimenting marketing behaviour
Currently the society has become more affluent, many consumers have got all the material products and goods they really need (O’Cass and McEwen, 2004). Due to this many consumers who go to shop in the store are hardly ever motivated by the need to buy anything in the shop. On the contra, the consumers are purchasing products based on desire to have an experience with the product or a feeling of the product.
Satisfy need and desire
Consumers have different needs and desires that they wish to satisfy when buying a product. Many people have different anticipations and dreams when they buy a product. Thus, a person will buy a sports car so that the product can satisfy his/her needs and wants. However, the market offers a lot of different but similar products to the consumer who ends up not knowing exactly what is perfect for his/her specific needs, it is this availability of varieties that as seen many consumers buying products that at fail to satisfy their needs and desires.
Purchasing to acquire
Basically, a person may want to acquire or own a sports car, thus some consumers buy sports car because their want to acquire and own such a car. Many studies reveal that many people purchase products so that their can own them, this gives them a sense of power and achievement. Even though the product may not be that important or useful to the consumer but having it becomes a priority.
Major factors that a marketing manager would consider when targeting customers
Type of the sport car (product): In relation to the marketing implication that is being witnessed due purchasing of sports cars, automobile companies are coming up with high quality sports cars that can be premium priced. The characteristics a company’s sports cars should be well defined to meet the needs of the consumers.
Customers tend to believe quality of a product, this quality is what gives them a sense of uniqueness. Today, automobile companies are ensuring that the quality of their sports cars is perfect and safe, that is, it is the quality that matches with the prescription of the product in the market so that it can maintain its consumers who are not misled with the misrepresentation of the qualities with its competitors.
Marketing of the sports car (promotion): Promotion: Promotion includes all communications that a company uses in marketing its products. We have four different elements in promotion; this includes advertising, point of sale, word of mouth and public relations (O’Cass, and McEwen, H2004). If a marketing manager incorporates all the four elements then a certain level of crossover do occur. Companies have greatly used this marketing mix to its full advantage. Companies have incorporated all the four aspects of promotion which as seen the many companies capture and retain a big share of their market especially in the motor industry. Many companies continue to sell their sports cars through using captivating adverts that entices consumers to buy these cars. It should be noted that advertisement is a very powerful marketing tool that is used to create more market for the company (Solomon, 1994).
Premium pricing; use of high price which indicates uniqueness of a product, this approach is applicable where a substantial competitive advantage is in existence such as for luxuries. Premium pricing normally positions a company higher than its competitors and makes its customer to belief that the company’s products are superior. Thus many companies such as BMW are using premium pricing to give their sports cars a better sense of luxury and quality.
Analyse, evaluate and interpret consumer behaviour models and theories
Rational behaviour: According to this theory the consumer is seen as a rational person who attempts to spend his/her money to get the greatest level of satisfaction or value from it. A Consumer wants to obtain “the greatest value of their money” or to fully exploit their total value. At the same time rational behaviour as well requires that consumer do not spend a lot of money irrationally through buying lots of goods and merely stocking them up for future use, or go without food just because they are saving the money. Consumers it assumed are engaged in rational behaviour.
Preference: Every consumer has got his/her preferences for particular products and services which are obtainable in the market. At the same time, consumers as well have a good understanding of how much varied values they will obtain from different types of products that they may buy. Nonetheless the amount of value and the net difference from these products will differ from each individual since every person has got varied taste as well as preferences.
Budget constraint: According to this consumer behaviour theory, a consumer has got a certain limited earning. Because every consumer offers a finite amount of human as well as property resources to the society, it is assumed that such a consumer get only certain income. Therefore, every consumer encounters budget constraint, and each consumer has an infinite demand, but a limited earning.
Prices: this model stipulates that products become scarce due to the demand they have, each consumer purchase is seen as a part of the net demand within the market. Nonetheless, since consumers have got a limited earning, they have to decide on the most satisfying mix of goods depending on their partly on the prices of these goods. For instance a reduced price is required so as to induce consumers to purchase a lot of products.
Theory that best explains why people by fast cars
Veblen (1899) provided an explanation of conspicuous buying, where fast cars can be grouped in his prominent concept of “the leisure class”. He notes that in order for people to show their wealth or power their have to put it into evidence, since self esteem can only be rewarded through evidence. Thus, one way of an individual showing off his wealth is through buying a fast car In this context “Veblen effect” will refer to conspicuous consumption, which is seen as an action of consciously displaying and consuming a product that is bought at a higher price that its marginal cost.
It is assumed that a person’s value is directly enhanced by purchasing higher priced products (Nagel, 2002). Unfortunately, this approach does not explain why individuals will prefer premium pricing. Nagel (2002) explains that people prefer expensive products such as fast cars because of monopolistic goods. However, other scholars are in view that individuals use expensive goods as means of evaluating their social status in the society.
Provide recommendations for developing effective marketing strategies
The company should undertake the following:
Motivate employees: The employees have to be well trained and highly motivated to leave the right impression on the customers. Thus, a company should;
Ensure that employees who come in contact with the customers are the right ones and have proper training
Give a high level of after sale service and support as one way of adding value to the product and giving the company an advantage over its competitors. To many customers this is more important than the price of the product.
Employees should be highly trained well looked after to display a better company image. These employees thus easily attract customers to buy fast cars.
The company should continue to use high technology to improve their products (fast cars) and the process in which the products are manufactured. The quality and safety of cars should continue to be improved tremendously in order to attract more customers who are willing to pay a lot of money for better and safer fast cars.
We conclude that Customers currently are shopping for quality and luxuries so that they can enhance their quality of life. Many companies have thus taken up to offer high premium products to consumers who value quality and value than price.
Reference
Blythe, J. (2008): Consumer Behaviour. Thomson Learning, 1ed
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Foxall, G. (2005): Understanding Consumer Choice. Baingstoke: Palgrave Macmillian.
Nagel, T., R. H. (2002): The Strategy and Tactics of Pricing; Prentice Hall; Upper Saddle River, NJ.
O’Cass, A. and McEwen, H (2004): Exploring Consumer Status and Conspicuous Consumption; Journal of Consumer Behaviour, 4(1):
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Schiffman, L. & Kanuk, L. (2007): 9th ed. Consumer Behaviour; Prentice Hall
Solomon, M (1994): Consumer Behavior: Allyn & Bacon, London.
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