CONSUMER VALUES, INTERESTS AND ATTITUDES

External Assessment

CONSUMER VALUES, INTERESTS AND ATTITUDES

It is important that consumer values, interests and attitudes are analyzed in order to have a clear understanding of the industry's market thus enterprise is able to predict and anticipate the market wants, needs and peculiarities. The following data and information need to be known:

A. Principal Customers

Who your principal customers are, or if you are launching into new areas, who they are likely to be. Determine in as much detail as you think appropriate the income, age, sex, education, interests, occupation, and marital status of your potential customers, and name names if at all possible.

B. Customer Purchasing Considerations

What factors are important in the customer's decision to buy or not to buy your product and/or service, how much they should buy, and how frequently?

Many factors probably have an influence, and it is often not easy to identify all of them. These are some of the common ones that you should consider investigating:

C. Product Considerations

· Price

· Quality

· Appearance (color, texture, shape, materials, etc.)

· Packaging

· Size

· Fragility, ease of handling, transportability

· Servicing, warranty, durability

· Operating characteristics (efficiency, economy, adaptability, etc.)

D. Business Considerations

· Location and facilities

· Reputation

· Method(s) of selling

· Opening hours, delivery times, etc.

· Credit terms

· Advertising and promotion

· Variety of goods and/or services being offered

· Appearance of company's property and/or employees

· Capability and attitude of employees

E. Other Considerations

· Weather, seasonality, cyclicality

· Changes in the economy (recession, depression, boom)

Since many of these factors relate to the attitudes and opinions of the potential customers, it is likely that answers to these questions will only be found through interviews with customers. It is also important to note that many factors that affect buying are not easily researched and are even less easy to act upon. For example, the amount of light in a store or the position of a product on the shelves can influence buying decisions.

You could perhaps best use the above list to rate what potential customers see as your strengths and weaknesses. Then see if you can use that information to make your offering more appealing to them.

F. Market Research Data

In addition to knowing something of the characteristics of the likely buyers of your product or service, you also need to know how many of them there are and whether their ranks are swelling or contracting. Overall market size, history, and forecasts are important market research data that you need to assemble—particularly data that refer to your chosen market segments, rather than just to the market as a whole.

Satisfying customers' needs or solving customers' problems must be the primary focus of any new or growing business. Customers change, and companies must adapt to these changes; recent research has revealed that the major reason for companies losing customers was indifference to customer complaints—not price, not quality, but indifference! You should try to view each of your customers as a potentially valuable asset; for example, if they spend P100 a week with you for the next 10 years, that would make each one an asset worth P50,000.

WHAT DO CUSTOMERS NEED?

Business people usually define their business in physical terms. Customers, on the other hand, see businesses as satisfying their needs. Compare a quartz watch with a Rolex . Basically they are very similar: they both give you accurate time. One costs P700.00, the other perhaps P200,000. Customers pay the extra P199,300.00 for largely intangible benefits, such as status or the pleasure the watch will bring as a gift. The makers of each watch both have successful businesses, but the needs they satisfy are poles apart.

Until you have clearly defined the needs of your potential customers, you cannot begin to assemble a product to satisfy them.

American psychologist Abraham Maslow says that "all customers are goal seekers who gratify their needs by purchase and consumption." He classifies consumer needs in a five-stage pyramid, called the hierarchy of needs (Maslow's Theory of Needs):

· Self-realization (highest)

· Self-esteem

· Social needs

· Safety

· Physiological needs (lowest)

Every product or service is bought to satisfy one or more of these needs. So, for example, as people's hunger and thirst needs are satisfied, they move up the hierarchy to satisfy other needs.

Try interesting someone who is starving and cold in "higher" things, or see how much more food you buy if you shop when you are hungry than when you have just consumed a large meal.

Where are your customers on the needs hierarchy, and how can your product or service help them to achieve their goals?

It may also help to shape your business to distinguish between the needs of consumers of your product (for example, children who eat the candy) and the needs of customers who make the buying decision (for example, parents who pay for the candy).

MARKET SEGMENTATION

Market segmentation is the name given to the process whereby customers and potential customers are organized into clusters or groups of similar types. For example, a store or restaurant has regular customers and passing sales. The balance between the two is a fundamental issue that affects everything the business does. Also, each of these customer groups is motivated to buy for different reasons, and the selling message has to be modified accordingly. These are some of the ways that markets can be segmented:

A. Demographic Segmentation

This groups customers together by such variables as age, sex, education, and income. One owner of a corner store identified two particular groups of customers: children and local adult residents who had run out of products they would normally buy from a supermarket. For the former, the products offered are candy, comics, pencils, and cheap games. For the latter, small sizes of such items as butter, cereal, and detergent.

B. Benefit Segmentation

This recognizes that different people get different satisfaction from the same product or service. Most toothpaste manufacturers stress the benefit of decay protection, such as the claim, "Look mom, no cavities." However, others reach a quite different market with their "whitening" message. White teeth, with the implied attractiveness to the opposite sex, is a more important benefit to some customers.

C. Geographic Segments

These arise when customer preferences vary by location. For example, the photocopy center and the bicycle courier service are very much products of a city environment.

The owners of a dried flower shop segmented the market in two ways:

1. By type of sales outlet, for example flower shops, farm suppliers, garden centers, supermarkets, garages, airports, and street markets

2. By type of end use, for example commercial displays (restaurants, hotels), shop window decoration, exhibition, display, and educational courses at colleges

Such segmentation enabled the shop to focus its selling efforts on specific outlets and users that could be located and quantified, enabling the owners to set realistic sales goals.

Industrial markets can be similarly segmented by size and location of company (number of employees, sales volume, geographic concentration), by category of merchandise (furniture, glass, ceramics), or by level of technology and production process (types of buyer, service requirement).

There are useful rules to help you decide on whether a market segment is worth trying to sell to.· Measurability. Can you estimate how many customers are in the segment?

· Accessibility. Can you communicate with these customers? Just knowing they are out there somewhere is not much help.

· Size. A segment has to have a large number of customers, although exactly what constitutes "large" will be relative to your business.

· Open to Practical Development. Just being a large segment is not enough. The customer must have money to spend and be able to spend it. Some government departments, for example, are restricted to buying from approved suppliers only. So they may be large but are of no interest at all if you cannot sell to them.



One example of a market segment that has gone undeveloped for a long time is the sale of goods and services to retired people. Several factors made this a particularly difficult segment to develop. Firstly, retired people were perceived as less adventurous. Secondly, they were considered less likely to make expensive purchases at their stage in life. And finally, they were thought to have less money. In recent years, all those perceptions have changed; people retire earlier, live longer, and many have relatively large pensions. The result is that travel agencies, contractors, magazine publishers, and insurance companies have rushed out a stream of products and services aimed particularly at this market segment.

Segmentation is an important marketing process because it helps to bring customers more sharply into focus, and it classifies them into manageable groups. It has wide-ranging implications for other marketing decisions. For example, the same product can be priced differently according to the intensity of customers' needs. Peak-season travel and off-season travel is an example. Segmentation is also a continuous process that needs to be carried out periodically, for example when strategies are being reviewed.