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Factors Influencing Consumer Behavior

Mr. Ash advised Martin Incorporation, a cosmetics and perfume company, to modernize its products based on changing consumer tastes and preferences. However, after six months, sales growth remained ineffective. The product manager and assistant manager felt key consumer behavior factors were ignored. Specifically, Mr. Ash focused only on existing customers rather than exploring new markets. He also failed to properly segment the cosmetics market or consider important personal factors like age, occupation, and lifestyle that influence consumer choices. Additionally, no efforts were made to develop new products, advertise to targeted audiences, or implement sales promotions to boost sales.

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Vaishnavi Baviskar
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41 views6 pages

Factors Influencing Consumer Behavior

Mr. Ash advised Martin Incorporation, a cosmetics and perfume company, to modernize its products based on changing consumer tastes and preferences. However, after six months, sales growth remained ineffective. The product manager and assistant manager felt key consumer behavior factors were ignored. Specifically, Mr. Ash focused only on existing customers rather than exploring new markets. He also failed to properly segment the cosmetics market or consider important personal factors like age, occupation, and lifestyle that influence consumer choices. Additionally, no efforts were made to develop new products, advertise to targeted audiences, or implement sales promotions to boost sales.

Uploaded by

Vaishnavi Baviskar
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Assignment no.

1. What is consumer behavior? Explain briefly the various factors influencing


behaviour taking example of any consumer durable of your choice.
Ans. Consumer behavior is the study of how people make decisions about what they buy, want,
need, or act in regards to a product ,service or company ,It is critical to understand consumer

behavior to know how potential customers will respond to a new product or service .it also helps

companies identify opportunities that are not currently met.

 Factors influencing Consumer Behaviour-

Psychological Factors:
In daily life, consumers are being affected by many issues that are unique to their thought process.
Psychological factors can include perception of a need or situation, the person's ability to learn or understand
information, and an individual's attitude. Each person will respond to a marketing message based on their
perceptions and attitudes. Therefore, marketers must take these psychological factors into account when
creating campaigns, ensuring that their campaign will appeal to their target audience.

Personal Factors:

Personal factors are characteristics that are specific to a person and may not relate to other people within the
same group. These characteristics may include how a person makes decisions, their unique habits and interests,
and opinions. When considering personal factors, decisions are also influenced by age, gender, background,
culture, and other personal issues.
For example,
an older person will likely exhibit different consumer behaviors than a younger person, meaning they will
choose products differently and spend their money on items that may not interest a younger generation.

Social Factors :
The third factor that has a significant impact on consumer behavior is social characteristics. Social influencers
are quite diverse and can include a person's family, social interaction, work or school communities, or any
group of people a person affiliates with. It can also include a person's social class, which involves income,
living conditions, and education level. The social factors are very diverse and can be difficult to analyze when
developing marketing plans.
For example
CEO of a company would prefer to buy branded products from big stores, while a worker in the same
company may prefer value for money products from nearby stores.

[Link] the following case.


Explanation of the case:
Martin Incorporation was involved in the cosmetics and perfume
business. The company was following the product concept of
marketing and catered only to their existing customers, while paying no
attention to the changing needs and demands of the consumers.
A marketing graduate, named Ash, joined the company and advised the
company about necessary changes that must be made in the product
on the basis of changing taste andpreferences of consumers to
successfully sell the company`s [Link] Ash modernised the
products and spent about 30 lakhs on packaging etc. on the basis of
relevant income and social factors that affect the consumers. The
product manager and assistant manager were not happy with the
efforts made by Mr Ash as even after 6 months of implementation of
suggested changes the company was not able to achieve effective
growth in [Link] product manager and Assistant manager were of
the opinion that although some progress was made by Mr Ash, yet
many important factors affecting consumer behaviour were also
neglected by him.
Solution:
Focus: New Product Development to increase sales of cosmetics and
perfume products
Yes, I agree with the product manager and assistant manager that
efforts were made in the right direction, but many factors affecting
consumer behaviour were ignored. The reasons being the following:
[Link] company was using the product concept of marketing which is out
dated in today`s era as now producers manufacture products that
match consumer`s demand,
tastes and preferences. Therefore, Mr Ash should have focused on the
Marketing
concept to produce and market products accordingly.
II.
The target audience was limited to the existing customers of the
company. Various
new markets must be explored to increase sales. Effective target
marketing is essential
to promote and position the product effectively in the market. For
example:
Grooming products for men
Safe and chemical free cosmetics for babies
Organic and herbal cosmetics for women
III.
The market for cosmetics was not effectively segmented by Mr Ash.
Cosmetics
market can be segmented effectively by dividing the market into groups
which are
homogenous within and heterogeneous among themselves on the basis
of their age,
gender, occupation etc. For e.g. Market can be segmented into:
Working women, Housewife, Teenage girls
Daily consumers, Beauty Parlours, Film Industry
Rich people, Middle class people, Low income group
IV.
While attention was paid to income and social factors many personal
factors such as
Age, Occupation, Lifestyle, personality of a consumer were neglected.
For e.g.
Age: Working women, elderly women, Teenage girls all have different
needs.
Income: The rich pay more attention to how they look than people with
less
income.
Occupation: A Housewife has simple beauty needs as she stays at home
most
of the time while a working lady has more intensive beauty needs as
she goes
out of the home every day and has to look presentable in the office.
Personality: Traditional women and Modern women both have
different
needs. Some prefer expensive perfumes while some use natural
fragrances like
‘itra’.
Attitude: People have different attitude towards chemicals in beauty
products.
Some prefer it while some dislike it and prefer herbal and organic
products.
Lifestyle: While urban people make use of deodorants and perfumes to
smell
good, rural population prefers use of soaps, sandalwood and itr to smell
good.
V.
Keeping the income factors in mind no changes were made in product
quantities i.e.
small units of previous products. Keeping in mind the social factors no
efforts were
made to use opinion leaders like celebrities or doctors which would
have been more
effective in influencing sales than change in product packaging.
VI.
Existing products were modernised while no attention was paid to new
product
development for new potential markets in cosmetics industries. For e.g.
Grooming
products for men
VII.
No efforts were made to advertise the products to targeted audience or
reposition the
brand according to the changing customer taste and preferences. No
offers, discounts
or sales promotion activities were carried out by Mr Ash to boost sales.

Common questions

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When shifting to a marketing concept, businesses like Martin Incorporation should prioritize understanding and meeting consumer demands, preferences, and satisfaction. This includes market research to identify trends, segmenting the market effectively, and tailoring products and promotions to specific needs. Additionally, active engagement with customers through advertising and brand positioning, and using feedback to continuously adapt products and services, are essential for aligning product offerings with consumer expectations .

Advertising and sales promotions are crucial in repositioning a brand as they communicate the new brand message and reach new and existing audiences effectively. Through targeted campaigns, a company can introduce new features, convey quality improvements, or rebrand its image to align better with current trends. Sales promotions such as offers and discounts can create immediate consumer interest and trial, fostering quicker acceptance and spreading awareness in competitive markets like cosmetics .

Exploring new markets is crucial for Martin Incorporation as it allows the company to expand its customer base beyond existing clientele, thus increasing sales potential. By identifying new target audiences like men for grooming products or niche markets interested in organic cosmetics, the company can diversify its offerings and capitalize on unmet demands. This strategy supports sustainable growth and mitigates risks associated with reliance on a limited customer pool .

Despite changes in packaging and modernization, ineffective sales growth was likely due to several factors: ignoring comprehensive market segmentation, lack of exploration into new target markets, insufficient promotion and advertising efforts, and limited consideration of varying consumer factors such as age and lifestyle. These omissions imply a gap in aligning product strategies with comprehensive consumer behavior study, which is necessary for translating product changes into sales growth .

Opinion leaders, such as influencers or celebrities, can enhance marketing by leveraging their credibility and large followings to increase brand awareness and trust. This strategy can be particularly effective in consumer goods industries where personal recommendations significantly influence purchasing behavior. By aligning the brand with respected figures in the target market's space, a company can more effectively reach potential consumers and sway their purchase decisions .

Martin Incorporation could have improved sales by effectively segmenting the market based on demographic factors such as age, gender, and income. For instance, targeting distinct groups like working women, housewives, and teenage girls with tailored marketing strategies could address their unique needs and preferences. This approach helps create homogenous groups that can be targeted with specific products—such as safe cosmetics for babies or organic products for women—aligned with each segment's characteristics .

The criticism underscores the need for a consumer-centric approach in product development, which involves understanding and anticipating consumer preferences rather than solely modernizing existing products. It highlights the importance of comprehensive market research, segmentation, and targeting to develop new products that meet identified consumer demands. Additionally, it points out the necessity of leveraging promotional strategies, product differentiation, and reshaping brand perception to align with evolving market trends .

Mr. Ash's efforts were limited by several oversights. He focused on income and social factors but neglected personal factors like age and lifestyle, which are vital in understanding consumer needs. Additionally, he did not explore new product development or effective market segmentation, and he failed to implement promotional activities like using opinion leaders or offering discounts, which could have significantly boosted brand appeal and sales .

Focusing on existing customers offers benefits such as a better understanding of customer needs and potentially higher loyalty, which can lead to increased sales of upgraded products. However, this strategy limits growth opportunities and market share expansion. Exploring new markets brings the potential for diversification and the ability to tap into unmet needs, thus fostering revenue growth and reducing dependency on a single customer base. Balancing both strategies is often essential for long-term success .

Psychological factors include perception, learning, and attitude, which influence how consumers interpret information and make buying decisions. Companies should tailor their marketing messages to align with these psychological factors to appeal to their target audience. For instance, understanding consumer attitudes can help create positive associations with a brand, while leveraging perceptions can develop campaigns that highlight unique product benefits .

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