There are five stages in the process of buying a product or service (Rani 53). At the first stage, Problem Recognition, the client recognizes the need to purchase a product or service, either due to an internal (hunger, thirst, etc.) or external (advertisement, word-of-mouth, etc.) need. The second stage, Information Search, involves looking for the best product or service to satisfy the unmet need. The third stage, Evaluation of Alternatives, involves assessing various brands and alternatives that can be chosen from; the thoroughness of the evaluation depends on client involvement. At the fourth stage, Purchase Decision, the customer conducts the purchase itself; however, it can still be disrupted by adverse feedback from others or due to unpredicted circumstances. Finally, the fifth stage is the Post-Purchase Behavior, when clients compare their purchase with their expectations and decide whether they are satisfied or not; satisfaction is pivotal for client retention.
A retailer can take several steps to increase customer satisfaction after the purchase. For example:
- It is possible to provide clients with high-quality customer support service, for instance, by supplying them with a warranty on products they purchase. This is important to ensure that e.g. if clients purchase something that is faulty, they can still be satisfied with the product in the end;
- It is crucial not to set the customers’ expectations too high when they purchase a product or service. If the shop consultants advertise products as ridiculously high-quality, clients may be disappointed when they find out that not all the promises of the consultants were true. Because of this, it is important not to over-advertise products so that clients would be satisfied.
- Clients should be treated politely and genuinely, so that their purchasing experience remains pleasant. This is important because individuals tend to remember the quality of service at shops.
Some of the social factors that may affect consumer purchasing behavior are: a) reference groups, i.e. groups of people that one compares themselves with and wants to look like; b) one’s social status (including their economic status), that is, the stratum of the society that one belongs to (upper, middle, or lower class); and c) family, i.e. people who live together with the consumer (due to a marriage or a blood relationship) and interact with them on a daily basis.
When I purchase a laptop in the future, my decision will be impacted by all the three named social factors. I will look up to the people from my reference group to see what kind of laptops they use and why; I will consult with my family about the best brand and model of the laptop which I can purchase, given my options; and I will have to take into account my social status and economic capacities when deciding which laptop to buy.
There are numerous factors which stimulate globalization. One of the most important of these is the need for companies to seek external markets. Due to the desire to enhance profits, companies wish to increase the volume of production. Eventually this results in market saturation, which drives companies to seek external markets to expand to.
Another factor is the growth of transport and information technologies. Modern transport permits for simple and quick transportation of goods and services, which was impossible in the past, whereas IT allows for instant communication. This virtually “reduces the distance” between different points in the world, significantly facilitating globalization.
The ownership and partnership options that firms have for entering a new global market are:
- Exporting: the company sells the products which it produces in one country to other countries. This is the least risky type of an international expansion.
- Franchising: a type of expansion in which partially independent business owners (franchisees) pay fees to the mother company (the franchiser) in order to obtain the right to use that company’s trademark, sell its services and products, and utilize its general format of organization.
- Strategic Alliance: a cooperative agreement between a number of companies with the purpose of gaining mutual benefits, such as shared knowledge and expertise, entry to a new market, and so on.
- Joint Venture: a mode of entry in which several companies create a new business organization that is a separate legal entity, but has a shared ownership (belongs to its “parents”), shared risks and returns, and is governed by its “parent” businesses.
- Direct Investment: the most risky foreign market entry mode, in which an organization either acquires facilities in the target country (acquisition), or builds completely new facilities to start production of goods or services (greenfield investment).
Ethical issues may have an impact on global marketing practices due to the fact that some ethical norms differ from culture to culture, and while something is considered ethical in one country, it may be viewed as unacceptable in another. For instance, while the relationships between employees and their managers might not always be very formal in the U.S., the organizations in some Asian countries have a much more strict hierarchy.
A non-U.S. company that wishes to do business in the USA might encounter a problem if it is considered acceptable in its home country to give presents or favors to officials so as to gain business advantages. In the U.S., this would pose an ethical problem, and would even be viewed as bribery, which is illegal.
The five steps in the STP (Segmentation, Targeting and Positioning) analysis are:
- Determining Strategy/Objectives: the organization needs to formulate its strategy and determine particular objectives to be pursued;
- Segmentation: the basis for segmentation should be considered, and the critical characteristics of each segment should be identified;
- Evaluating Segment Attractiveness: on the basis of the identified characteristics, the attractiveness of various segments should be evaluated;
- Selecting Target Market: having performed segment evaluation, the company needs to choose the most commercially attractive segments;
- Identifying and Positioning Strategy: the firm needs to develop the positioning of its products for the identified segments of the market, creating a marketing mix for every segment which was chosen.
The positioning of a brand denotes the place which this brand occupies in the perceptions of the clients, as well as the features of this brand which distinguish it from those of its rival brands (Singh et al. 145-148). It should be pointed out that positioning allows for creating an identity of a brand, and placing it in a particular niche of the market. For instance, McDonald’s is positioned as a fast food restaurant which sells food that always tastes the same and is relatively cheap, this restaurant is known as always clean, hospitable, and friendly to its clients.
Firms position by stressing the distinguishing features that their brand has, or creating a particular image of the brand. It is also possible to utilize marketing tools such as the Marketing Mix for positioning one’s brand.
Primary data is the research data which is collected specifically by the researcher (or by someone hired for the purpose of primary data collection) from respondents via interviews, surveys, and so on. This raw data is collected and analyzed to produce answers particularly for one’s current needs. It might be recommended to collect and use primary data when it is needed to obtain answers to very specific questions of a local scale, which cannot be answered using general information (for instance, “How many cashiers should work in a given shop during particular periods of time?”).
On the other hand, secondary data is the data which was collected by someone else for different purposes. For example, data obtained from articles, existing research reports, and so on, is secondary data. This data should be used when it is needed to answer more general questions (for example, “What kind of products should be placed near the cash desk?”)
In their report of a poll (which was an opinion poll, and was dated July 20, 2017), Newport and Bird state that 48% of Americans consider abortions to be morally wrong, but only 20% of Americans believe that abortions should be illegal. The authors note that there exists a contradiction in opinions of many Americans, because a large percentage of Americans believe abortions to be morally wrong but do not think they should be illegal (Newport and Bird).
However, another interpretation of this result is that there is no contradiction in such opinions, for not everything that is morally wrong should be made illegal and, consequently, punished by the government. For instance, lying may be morally wrong, but making it illegal would probably be viewed as ridiculous by most people.
Works Cited
Newport, Frank, and Robert Bird. “On Abortion, Americans Discern Between Immoral and Illegal.” Gallup, 2017, Web.
Rani, Pinki. “Factors Influencing Consumer Behaviour.” International Journal of Current Research and Academic Review, vol. 2, no. 9, 2014, pp. 52-61.
Singh, Jaywant, et al. “Consumer Perceptions of Cobrands: The Role of Brand Positioning Strategies.” Marketing Intelligence & Planning, vol. 32, no. 2, 2014, pp. 145-159.