Introduction
Consumer behavior refers to reactions by consumers to either purchasing or failing to buy a commodity. The reaction is subject to a number of factors such as time, place, need for the product and the process of purchasing the product. This paper seeks to discuss consumer behavior with respect to BRL Hardy Company. The paper will summarize a case study of the company’s marketing position, answer questions about the case study, and offer a recommendation to the company.
BRL Hardy was a creation of a merger between two already established wine manufacturers. ‘Berry Renmano’ and ‘Thomas Hardy & sons’ came together in the year 1992 to establish the company. After the 1992 merger, the company made a series of acquisitions in Australia and France as well as partnerships in European countries. It has since managed to increase its volume of sales in the Australian market and internationally. Its market segmentation strategy has in particular enhanced the company’s capacity to penetrate its market with a twenty percent command of the Australian wine market. Another factor to the company’s success in market control has been its highly-rated sales and marketing professionals that have been successful in Europe
One of BRL Hardy’s major export zones is in Germany whose market availability is attributable to a variety of factors that range from economic to demographic. One of the essential elements of the German economy that initiates demand for BRL’s product is its high level of disposable income that contributes to consumers’ capacity to purchase. The country has also liberalized its regulatory measures with respect to international trade. Germany also has a high population that has equivalently resulted in high levels of wine consumption.
The establishment of BRL as a major marketer in Germany is also due to the high esteem of its mother country, Australia, as a prime producer of quality wines. Consumers’ choices and preferences in Germany are based on the manufacturer’s country of origin besides the identity of the product and its manufacturer. This has established BRL as a competent competitor among wine exporters from other countries.
The company has over time developed to improve its capacity and identity in the German market. Secondary research initiatives, facilitated by its representatives in Germany, as well as reliance on data from recognized institutions, played a major role in the identification of the country as a potential export zone. One of the major findings was the fact that wines consumption in the country was a culturally acceptable practice. Price segmentation has also been a tool to BRL’s penetration of the market. Its brand image marketing and quality products have allowed it to capture the luxurious social classes while the relatively lower production cost in Australia allows for cheap prices to lower social classes. Marketing has also been facilitated by the fact that most Germans understand English, hence facilitating communication between the two entities, the manufacturer and consumers. There is however the task of improving customer utility through ensuring timely delivery. This is particularly important as the company intends to expand its market control in Germany.
Consumer behavior: analysis and discussion. Segmentation of wine market and social class
Market segmentation, according to Moore (2008), is the identification and separation of subgroups of consumers with similar utility needs. This allows for segmentation of the wine market in Germany if a marketer is able to identify such subgroups of consumers within its market. Two major factors, demographic factors and derived utility, play a major role in determining whether a product can be segmented or not. Groups of consumers with different needs and capacities to purchase, for example, form the basis of segmenting the market into the groups. While some individuals may consume a product for social utility such as prestige, another group’s utility might be the content of the product. Demographic factors such as “age, marital status, gender, occupation and income” also dictate the capacity of a supplier to segment a market (Moore, 2008 193). Occupation can for instance dictate an individual’s social class hence utility while income has a direct impact on the consumers’ capacity to buy commodities. Consideration of an entire wine market accommodates these factors into segmentation (Moore, 2008).
In addition to derived benefits and demographic factors, market segmentation also depends on “geographic, psychographic, and behavioral” factors (Reid, Bojanic, 2009, p. 130). A market with a wider geographic scope for example entails differences in consumer choice and perception and a consequent difference in utility. Psychographic factors such as the “lifestyle, attitudes and personality” of consumers also dictate their utility while consumer’s behavior to market structures may call for segmentation to accommodate different wants. Wine being a universally consumed product is subject to these factors and its market can therefore be segmented (Reid & Bojanic, 2009).
How BRL Hardy might use the social class as a basis for developing its marketing strategy
Social stratification is a direct indicator of differences among subgroups of people in a society. The resultant difference in behavior and attitude affects communication, an instrumental tool in marketing (Onkvisit & Shaw, 2008). A business should therefore ensure an understanding of its market population for effective marketing. One of the applications of social class as a marketing strategy, which BRL can employ, is product differentiation with respect to customer needs. Understanding social classes can also help the company in directing its marketing efforts to the right target groups. The company can also use social class to identify products for brand imaging within different social classes (Lake, 2009).
Other market research to facilitate social class as a marketing strategy
Apart from using social class in market segmentation, the company can adopt a tactical approach to market research. This would involve developing means of strengthening the organization’s strategies. Technical research approaches such as determining best products, opportunities, packaging, advertising and promotional approaches would reinforce the use of social class into better market positioning (Kaden, 2006).
Recommendation for the company. Though the company has made significant advances in penetrating its market, its marketing strategies have not been the major factor. BRL Hardy should therefore reinforce its strategic marketing approach with tactical strategies. This will strengthen the company’s marketing into competitiveness.
Conclusion
BRL Hardy, a product of a 1992 merger, has since expanded into a recognized wines company in Australia and abroad. Its marketing strategy, as witnessed in Germany depends on market segmentation through social classes. Though the company has made significant success in market penetration, this is majorly attributable to German policy and economic environment as well as consumers’ attitudes towards Australia as a wine exporter. The company should therefore adopt more tactical marketing research approaches to strengthen its positioning in the dynamic and competitive market.
References
Kaden, R. (2006). Guerrilla marketing research: marketing research techniques that can help any business make more money. Philadelphia, PA: Kogan Page Publishers
Lake, L. (2009). Consumer Behavior for Dummies. New York, NY: John Wiley & Sons.
Moore, C. (2009). Managing Small Business. Australia: Cengage Learning EMEA.
Onkvisit,S. & Shaw, J. (2008). International marketing: strategy and theory. New York, NY: Taylor & Francis.
Reid, R. & Bojanic, D. (2009). Hospitality Marketing Management. New Jersey, NJ: John Wiley and Sons.