Tuesday, 26 May 2015

Commercial Aspects - Blog 2

Consumer buyer behaviour can be divided into four influence categories; culture, social, personal, and psychological (Armstrong & Kotler, 2014).  Individually, these categories appear distinct, but in practise there tends to be an overlap between them.  For example both culture and personal include the influence of social class; where culture approaches the influence from a nationality and subculture perspective, personal includes economic background and occupation and therefore spending power and lifestyle.  In turn, social takes account of aspirational groups.  This method of broadly aligning consumers by their demographics becomes problematic as consumers are inherently individual.  Psychological profiling - analysing consumer’s motivation and beliefs about brands and products - is a newer technique, but is only applicable to westernised cultures where self-development is key (Drummond, et al., 2008)

As a marketer, it is extremely valuable to be able to assess consumer’s beliefs and attitudes towards a product, and to establish whether it is through conditioning, social or cognitive learning that brand awareness occurs.  Information about the consumer’s motivation can be attained through qualitative market research.  A successful marketing plan utilises Marketing Information Systems (MkISs) to marry buyer behaviour, market trends and decision models.  Unfortunately, issues can arise when developing MkISs if due care is not taken to ensure they are unbiased, ethically collected and analysed correctly.  During the recent 2015 General Election in the UK, many news websites harvested opinion poll style data from Twitter, leading to bias in their analysis methods (Bright, 2015).  This is because certain demographics are far more likely to use twitter than others, so it does not give a full cross-section of the country’s opinions.

Though external market data is less likely to be biased, a considerable amount of trust has to be put into the bodies publishing the data.  The accounts of larger UK companies tend to be published through Companies House, but if an emerging market is being analysed, marketers may encounter problems finding quantitative data on smaller companies and potential new entrants.  It is therefore important to consider other analysis tools such as Porter’s 5 Forces (Porter, 1980), which takes the macro-external environment into account, as well as perceptual mapping and positioning to analyse the competition in a more qualitative manner.

The Resource Based View (RBV) considers the core competencies of a company in order to conceive a marketing plan looking from the inside out.  Analysing the strengths and weaknesses of the company using SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis allows the business to adapt its objectives to complement the opportunities available in the target market, outlined in the PESTLE (Political, Economic, Social, Technological, Legal, Environmental) analysis.  This gives the most thorough situation analysis and allows the business to play on its strengths and turn weaknesses and threats into potential opportunities.

Within the marketing plan I developed, market cannibalisation could have become a major threat.  The app market, though not direct competition, could be seen as a more convenient alternative to the product I was trying to place and so could encroach on the target market.  Having isolated this potential threat to the product, I was able to adjust my plan to introduce a partnering scheme – partnering with popular mindfulness app developer, Headspace.  This would be mutually beneficial to both companies – allowing Headspace a physical product to promote, and inhibiting any rivalry from the products main competitor.

Armstrong, G. & Kotler, P., 2014. Principles of Marketing. 15th ed. Essex: Pearson Education Limited.
Bright, J., 2015. Elections and the Internet: Could Social Media Forcast Political Movements?. [Online]
Available at: http://elections.oii.ox.ac.uk/could-social-media-forecast-political-movements/
[Accessed 10 05 2015].
Drummond, G., Ensor, J. & Ashford, R., 2008. Strategic Marketing: Planning and Control. 3rd ed. Burlington, MA, USA: Elsevier.
Porter, M. E., 1980. Competitive Strategy. New York: Free Press.