Individual and group influences which affect consumer behavior

INTRODUCTION

Consumer behavior reflects how consumers, individuals and collectively, make decisions to spend their available resources on consumption- related items. Marketers need to understand the individual and group influences which affect consumer behavior. Marketers also need to understand how key consumer decisions are made in an environment of ever-changing and fragmenting markets and media.

Product: Chocolate

Place: UK

Target Consumers: Upper lower class and Upper Middle class

Dilemma: Decline in sales in past two years.

TASK: 1

INDUSTRY PROFILE

The UK has the seventh highest consumption of chocolate in the world. The average Brit eats 17.49lbs of chocolate per year (The world Atlas of Chocolate). Switzerland takes the top spot and 40% of the chocolate eaten in the world is consumed in Europe. Sales of ethically sourced chocolate have boomed over the course of the year, as consumers and industry similarly start to take greater in quantity relate to over where their favorable sugary treat comes from. The 2007 ethical chocolate’s general direction and tendency has not only been about sourcing however, as the industry has invested in new products and innovative marketing techniques over the year.

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One of the majorities of innovative marketing organized course of action was launched by the Dubble Fairtrade brand, which originate a competition to preliminary plan or sketch for making an online chocolate computer game. The DubbleClick games not only occupy agreeably in children, it also helped extend the chocolate word in the younger generation.

(Confectionarynews, 2007)

This industry is booming also because of different advantages of chocolates which attract consumers. Scientists give an account of preparatory available facts recently that cocoa and other chocolates possibly keep high blood pressure down, your blood flowing and your heart healthy. Flavonol-rich cocoa and chocolate act alike to low-dose aspirin in promoting healthy blood flow. Reducing the blood’s capacity to clot also become smaller the risk of stroke and heart attacks.

The UK chocolate industry is worth 3.6billion and sales of chocolate right in amount have continuously growing and increasing in size, with an estimated 17% more numerous in sales over the next five years. And the clear and highly promising winner of the sector is dark chocolate. (Divinechocolate, 2007)

The chocolate market was a little down for past few years because of the market saturation, birth rate and prolonged consumer trends in the direction of low-fat diets and increasing nutritional concerns. Industry sources estimate that world chocolate consumption will increase with growth in mature market and emerging markets at a healthy 4%.

While considering the families and the households, they are now attracted in the consumption of chocolate due to its health benefits and by knowing the fact that its smell may increase theta brain waves, resulting in relaxation. Chocolate also help in increasing antioxidant levels in blood.

UK Chocolate Market

The UK chocolate market is the boastful in all European market. People in United Kingdom use up greater in quantity chocolate than in any other country. In Britain, older people use up more chocolate and confectionery than children. A report find out of certain that people over 55 years of age in the United Kingdom consume chocolate of a value equivalent to 700 pounds every year. Twenty one per cent of the complete chocolate and confectionery sold in Britain is use up by people higher than the age of 55.

Since, the luxury brands of chocolates have been introduced in the chocolate market, aged people has become the exerted to the full target in the chocolate market. The overall permeation of chocolate is also in a high degree, with chocolate bars being made obtainable everywhere. Both consumption and spending logical form of people in UK end in the intensive promotion of chocolate in the market.

(Blurtit, 2008)

Market Analysis

Market analysis can be done through SWOT analysis and PEST analysis.

SWOT ANALYSIS

Strength

The momentous strength of the company is that it could avail the existing advantage and benefits of chocolate consumption. Not only the children but the old age group in UK is also the consumers. The companies also have strength of online selling and personal selling. The company has a healthy brand name that could attract the consumers and attack the competitors it faces in the market.

Weakness

Chocolate market is reflecting a come down freely in demand due to the gloomy economic position. The chocolate market was a little down for past few years because of the market saturation, and lengthy consumer trends in the direction of low-fat diets and more and more nutritional concerns.

Opportunities

The cultural tradition in UK is celebrating with chocolates. A great number of populations in UK are from India also. Mostly Indians celebrate cultural events with chocolates. This could increase the use up of chocolates. Also UK chocolate market is the biggest in European chocolate market. Benefits of chocolates like diverse taste, several flavors and health benefits like keeping high blood pressure down, keep the blood flowing and your heart healthy. Reducing the blood’s capacity to clot and smaller the risk of stroke and heart attacks. (Markets and markets, 2008)

(Divinechocolate, 2008)

Threats

Slowdown in UK economy is a threat to the company. Also the lack of power to supply promptly during high demand and changes in consumer taste to non-chocolaty candy bars.

PEST ANALYSIS

Political:

Acquisition rules in UK, reduces its dependence on the UK market and for that reason diversifies its market specific risks. The science of government in UK has many strict rules regarding the safety. The general product safety regulations 2005 say that “no producer shall place a product on the market unless the product is a safe product”. The General Product Safety Regulations 2005 is all about meant for the safety of the person in general. Since chocolate is a food its safety rules are really stringent.

Economical:

The UK consumers by a considerable amount are affected by the decline in the economic activity. Labor conditions, competition, seasonality etc are some economic factors which affect the business. Other economic factors include exchange rates, inflation levels, income growth, savings level etc. Only when the income level increase persons in general will buy expensive or luxury chocolates. So these factors affect the sales of chocolates in market. (Marketing intelligence, 2008)

Social:

Social factors effect people’s choices and include the firm opinion value and value of thinking of society. Some changes can impact purchasing behavior. Those changes are consumer’s opinion to the product and industry, environmental issues, the role of women in society- attitude to health-attitude to wealth-attitude to age etc.

(Marketing intelligence, 2008)

Technological:

Advance technology can have a relatively great in size impact on a business’s favorable outcome. Technological change impacts sociocultural attitudes. Media coverage depends a lot on technology. It improves things like instant reply, photo finishes, split times and timings. One of the greater number of innovative marketing ideas organized course of action which cause to begin a competition to introductory plan or sketch for online chocolate computer game. The DubbleClick games not only occupy agreeably in children, it also helped extend the chocolate word in the younger generation. Online shopping also is advancement in technology which increases luxury chocolate sales. (Confectionarynews, 2007), (Chocolate trading Co., 2007)

Factors influencing Consumer Buying Behavior

Buying behavior is the decision course of action and acts of people cause in buying and using products. A consumer’s buying behavior is influenced by four major factors; cultural, social, personal, and psychological. Personal factors are like age, life cycle stage, occupation, economic circumstances, life style, family, friends, neighbors etc. Psychological factors are like wants, motivation, learning, beliefs etc and functional factors, cultural factor the accumulation of values, knowledge, beliefs, customs, objects and concepts that a society uses to cope with its environment and subcultures- groups of individuals who have similar value and behavior patterns within the group but differ from those in other groups.

buying_decision_process

(Direct essays, 2008)

The buying process starts with need recognition. At this point the buyer identifies a difficult matter or need. If the need is strong and there is a product or service that meet the need close to hand. Customers obtain information from personal sources- family and friends. Commercial sources- advertising, salespeople, retailers, dealers, point of sales displays etc; public sources- news papers, radio, television, consumer organization, specialist magazines etc; and experiential sources- handling, examining, using the product.

The usefulness and influence of these sources of information will vary by product and by customer. In the evaluation stage, the consumer must choose between the alternative brands, products and services.

consumerbuyingprocess

To perceive the meaning consumer buyer behaviors to understand how the person act on each other with the marketing mix. The psychology of each individual contemplates mentally the product or service on offer in relation to their own culture, attitude, previous learning, and personal perception.

(Making teacher, 2008)

The important motives, influencing The Ultimate Buying Behavior of Consumers.

The consumers may purchase products when the price falls down; it is because of the desire for money. Some times consumers make an effort with a view to success to get costly items to be admired by others. Possessing luxury items for great extent position in the society is now common. When a consumer purchases some toys, chocolates, dresses for family or friends it may be out of love and affections. Purchasing equipments like refrigerators, pressure cookers, fan, mixy etc are purchased to get comfort and for convenience.

Personal Income: Disposal personal income represents potential purchasing power that a buyer has. The change in income has a direct relation on buying habits.

Income Expectations: The expected income to receive in future has a direct relation with the buying behavior. The expectation of higher or lower income has a direct effect on spending plans.

Consumer Credit:

Buy now pay later plays its roles effectively in the rapid growth of markets for car, scooter, radio, furniture and the like.

(Articles base, 2008)

Global Culture

The culture of the UK make an appeal to the logical form of human activity and ideas connect mentally with the United Kingdom and the British people. It is described by the character of social standard like Diversity, tolerance, creativity and freedom. There is a broad combination of cultures and people are free to represent themselves and wear what they desire. They give confidence to individual plans, ideas and creativity. United Kingdom is a independent consumer society to what place people be apt to give momentousness to self identities like occupation and material symbols. Such cultural characteristics like independent working women who desire to be not identical at their work place can be targeted. The cultural characteristics connected to creativity can be turn to account by the treat in a specified matter of well known researchers for the chocolate product which will be easily regarded favorably.

(Wikipedia, 2007)

Subculture

There are distinct groups having a common national or cultural tradition present in UK. They are by a considerable amount influenced by existing cultures. One of the major groups having a common culture is Indians in UK those who celebrate cultural events with sweets and also with luxury chocolates.

Teenagers, young adults, children, old people are influenced by subcultures. Teenagers are greatly influenced by social media like Television, social networking sites and celebrities. Young adults are influenced by latest fashion trends. In order to attract this category the company should concentrate and keep up with the innovative tastes and flavors and extra ingredients in chocolates. They want to enjoy life, tend to spend more and tend to promote many types of new chocolates for special occasions to attract them. Children are always the lovers of chocolate, so company should concentrate in creating online chocolate games to attract them. (BBC, 2008)

Family and Household Influence

Family is one of the greatest in quantity of influencing group for the consumer. The family members can healthily affect buyer behavior. It can be eminent between families in the buyer’s life. One is buyer’s parents who create the family of relative position. The other is the family of produce naturally; the buyer’s spouse and children- use a more direct influence on every day buying behavior. Marketers are interested in the roles and proportioned to influence of the husband, wife and children on the purchase of a large variety of products and services. Three main elements directly effect the family consumption. They are family life cycle, the structure of the family and family decision making process.

(Example essays, 2008)

Opinion Leaders and reference groups

Opinion leaders are in a high degree influential as they give out product information and advice which may be positive or negative from their experience. Reference groups serves as a point of comparison for an individual in the formation of specific values, attitude or behaviors.

Income and social class

The social class originates status and it is usually seen that upper class and the upper lower class are the ones that pay out more money on high priced luxuries and more image conscious.

TASK: 2

COMPANY PFOFILE

Enamour Chocolate is an international brand which is in the chocolate business in UK. The core product of the brand involves Dark chocolate, milk chocolate, white chocolate, chocolate truffles, special occasion chocolate like wedding and party chocolates and gifts chocolates. Enamour chocolate strategy to sustain in market and to attract consumers are cross promotion between website and retail stores and differentiation. The company is making an effort to acquire market by distinguishing it from other competitor by introducing new tastes and flavors and ingredients in chocolate to the market. The main portion of consumers of the company is old age groups. So different strategies are used to attract them.

(Chief marketer, 2008)

Current Consumer Behavior Concepts

Perception: People receive and interpret message differently. When an add is shown customers may perceive it in different ways. There are mainly three types of perception, i.e.; selective exposure, selective perception and selective retention.

Attitude: There may be favorable and unfavorable feelings about an idea or product. Advertising message should occur at the same time with the more usual attitudes held by the target market. Trying to become different in an attitude is charging much and involving risk.

Reference Groups: It is a group, class, or division of people to which individuals accept as true they belong, whether or not they actually do.

Family: Members in the family influence greatly in buying decisions. The becoming different roles of family members have become unclear the lines of responsibility between men and women. New managerial freedom and portion of whole allotted decision making power has cause to go with double targeting.

Identifying and Selecting target market: The capacity or power of a customer is based on the general notion of market segmentation. It means break up a large market into smaller homogenous markets based on common needs or similar lifestyles.

Identifying and selecting market segmentation: First identify the market segments and select the segments with high potential and then position product to appeal to target. In chocolate based company positioning is very important.

Psychographic Segmentation: Examination of each individual by life style is to be done. The individual’s interest, activities, and opinion etc must take into consideration. Its consideration shows by what means individuals who examine demographically shaped alike people, behave unlike.

Geographic Segmentation: In this segmentation the division of geographically expansive market into smaller geographical units is done.

Direct Segmentation: Companies will always try to target their targeted customers individually. It is now capable of existing to design having no like products and communication strategies for present and prospective customers.

Behavior or response Segmentation: This means the company should divide the buyers into different groups according to their occasion for use, benefits sought, their loyalty and response and frequency of use. Frequent consumers will be attracted with some compliments and recognition. The core customers of the company – the old age groups can be attracted through the same.

Importance of Segmentation: Knowing consumers intimately is a key to developing successful promoting strategies. This knowledge furnishes input for a sound positioning strategy. Positioning strategy is of two kinds they are creative strategy and media strategy. Through media strategy children will get attracted to chocolates more numerously.

Market positioning concepts: Positioning is the selling abstract idea that motivates purchase. It can be a tangible helpful factor or an image that a company wants to introduce in the minds of customers. It is of great effect that the positioning statement suitably describe a primary benefits and an image that is important to the target market.

Positioning and marketing communications: Advertising can communicate the positioning strategy many different ways like brand leadership, product differentiation, innovation, and life style.

Repositioning: Changing the place a brand occupies in the customer’s mind in relation to competitive products. Repositioning is considered if customers attitudes becoming different or if the marketing activity of a direct competitor changes.

Segmentation and Positioning

Demographic variables: target market is pursued on the basis of age, gender, income, occupation, education, cultural mix etc. The consumers who buy more chocolate are mostly old age groups. Key demographic trends are population is getting older; this would increase the company’s target audience. Economic power of women is also increasing. The formation of households is changing and the ethnic diversity continues.

Socio-economic variables: Social class is of great effect standard of judgment for segmentation.

Psychological variables: The consideration of psychographic segmentation reveals how individuals who look similar demographically, behave differently when not the same as factors are known. Marketers position brands according to certain life styles. Factors like life style and socially attractive qualities associated with respect or reputation and power are used to segment the consumers. Consumers brand loyalty, purchase behavior, perception about products they buy and their beliefs are used along with people who like to have a prestige and beautiful look are targeted. (The University of Winnipeg, 2009)

Positioning

Enamour chocolate is having the capacity to share with market capacity of understanding hidden truth based upon unparalleled breath of chocolate experience. The company has grown from being strong to strong with new technologies being introduced to make the chocolate business, one of the most productive with minimum waste in the world. The company is stepping to new mediums such as gifting, child connectivity and value for money offering to be the key growth drives. The company is also planning for one new major product launches every year.

A long term plan to influence perception of consumers:

Positioning is the image or identity in the minds of the target audience on the company’s product on certain attributes as compared to the competitors. Consumers make buying decisions based on their individual perceptions of underlies appearance, rather than on expert’s distinctness in outline of that reality. Therefore it is requiring to be done to create images and companionship for the chocolate products to give them a special consideration in the consumer’s seat of consciousness.

Consumer psychology – and decision making process

Consumer psychology make an appeal to the study of how people narrate to goods and services they use in their every day lives. Also known as the acquisition of knowledge of consumer behavior, consumer psychology furnish opportunities to inquire into the nature of issues such as what factors are greatest in quantity of great effect when people decide firmly after consideration to purchase a particular item, how customers find out the value of a service, and whether or not television and magazine advertisements can convince a unwilling consumer to try a new product for the firs time. Consumer psychology inquires to describe and make clear consumer behavior, although some consumer psychologist will try to do to foretell or influence a customer’s decision. It is a complex task to know the consumer psychology and its effect in making decision for buying a product.

(Wise Geek, 2008)

Consumer’s beliefs about brands are fickle

The beliefs and attitudes that customers keep fast on the subject of the brand of company’s are not stable. It is a little known thing that is known to be true that individuals very frequently give different reply to the same questions on different surveys, and that they do this in a predictable manner. The company has to give up their range of vision of customer holding deeply- held beliefs and attitudes about brands. It is firm and solid to form a mental image or concept someone holding extending far down in firm opinion that they sometimes make known or represent about one brand and then sometimes about other. A occurring in a great quantity more sensible and not likely to move approach would be to segment using other greater degree firmly established behavioral variables, such as usage rate or do over again or repeat purchase as the dependent variable. (Byronsharp, 2008)

Strategies for changing consumers attitude

Ego defensive function: One function available facts consistently in attitude studies is the ego defensive function. Attitudes serving ego defensive function keep safe one’s self general notion from counter attitudinal messages about the self.

(Informaworld, 2007)

Strategies to influence self statue of consumers

The marketer of the company should use of energy with self esteem and high regard concept whereby giving social illustration where in the customers themselves to prosperous and beautiful personality like celebrities eating Enamour chocolate.

Current developments in Consumer Behavior

There are some recent stages of growth or advancement in marketing and consumer behavior. The developments belong to as a part to price communication, consumer information processing and attitude change, brand loyalty, remembrance for radio advertisements, and the impact of sales promotion on store choice.

Market environment focus

The company is focusing on some strength out side of marketing that produce an effect marketing management’s capacity or power to create and maintain successful with relationships with target customers. The company is concentrating in micro environment forces like its suppliers, marketing intermediaries, customer market, competitors and public which are close to the company and affect its ability to serve its customers.

Attracting consumers

Since the core consumers of the company are old age groups, it should depend up on differentiation and cross promotion strategy and should bring more variety of chocolates. The fact behind the chocolate is that there are 400 varieties of smell. So the company should bring out a different chocolate combination every year to attract those consumers. Some of the pictures of products in the company are:

c cho

ch white

Apprehend Risk:

The company should try to make smaller the various financial risk, social risk and psychological risk by focusing on marketing efforts to become more numerous the brand of Emorous chocolate worth terms of financial risk, ability to do and prestige in terms of psychological risks.

TASK: 3

Censorious reflection in learning results

The favorable outcome of each single business is controlled on the competitive advantage they have and how well they cause to act this advantage to position them in the market. This beneficial feature can only be attained by effort if the firms perceive the meaning how the consumers act or react and how these consumers are influenced by the out side environment. This can be understood only by studying consumer behavior that is reason behind the choice of this module.

From the consumer decision making model, I laid hold of the several external forces that affect a consumer and make an effort with a view to success to find out how they affect the consumers while buying chocolate products. At the period of time when the consumer decision making model I learned from the classroom, my chief thing intended was to make due preparation to link this theory with the given case postulated sequence of future events.

From the total process I learned that by what means global culture has effect in making a new segment in chocolate market consisting of all age groups. The most momentous for me was the influence of subculture on different segments. There are a number of separate cultures from distinct cultural tradition to whom chocolates should be marketed distinctively. Before making this study I thought that, understanding consumer behavior is unproblematic to assign to a category; however it now appear that it is a complicated process and is an result of act of perceiving, attitude, self image and the effect of external and internal circumstances of living.

Apart from this range of information, I become matted that the several theories and models are connected to one another. This study modified my view point that consumer behavior is standardized and now be fully aware of that what influences one individual may not influence the separate individual