Onsumer behaviour and decision making Essay Example | Topics and Well Written Essays - 2500 words

Onsumer behaviour and decision making - Essay Example It is only a few decades back that consumer behavior emerged as a highly specialized area under marketing. â€Å"Consumer Behaviour is a branch which deals with the various stages a consumer goes through before purchasing products or services for his end use.† (Management Study Guide, 2012) There wasn’t the concept of consumer behavior when Ford started making their cars on assembly line. The only color that the customers could get then on the car was black. But as and when industrialization happened and more and more products came into the market, companies started focusing on the desire and need of the customers. This became more important with the beginning of globalization and when companies started cross border business. The concepts that the marketers were focusing on was market segmentation, targeting and positioning. But in the recent years, the marketing practitioners are puzzled about these concepts. They are doubtful whether these traditional concepts are val id for current marketing environment. The objective of this essay is to analyse the situation in the light of these concepts in the current environment and advise the marketers for the best way to approach customers. Traditional Marketing Practices Segmentation, targeting and positioning are three core concepts of traditional marketing practices. Marketers have been focusing on these concepts to the core of understanding the consumer behaviour and introducing products that the customers want. Segmentation: Market segmentation is the process of identifying and targeting the right customers. â€Å"It is about identifying the specific needs and wants of customer groups and then using those insights into providing products and services which meet customer needs.† (Riley, 2010) Marketers segment the market because the needs and wants differ from one customer to the other. But there definitely can be a group with common characteristics which is in other words called a segment. The most common kinds of segmentation are geographic, demographic, behavioural and psychographic. Geographic segmentation groups customers based on customer location and region. Demographic segmentation does it based on age, gender, occupation, and other demographic factors. Behavioural segmentation divides customers based on the customer behaviours and psychographic segmentation does it based on the personality and lifestyle of the customers. Debates have emerged recently regarding the relevance of market segmentation in the modern marketing environment. The behavioral aspects of customers are changing in such a way that they are not limited by the demographic, lifestyle, or other segmentation factors. An example for this is the initial failure of the world’s cheapest car Tata Nano. Tata segmented the market and targeted the Nano car to the common man. Least importance was given to value of the product. But when the car was actually launched in the market, it made terrible low s ales. When the company made a post launch market study, it was understood that the customers does not want a car that is of least value and the one that is tagged as a cheapest car. The company now revamped the car and entirely changed its marketing strategy and experienced success. (Cleveland, 2011) Targeting: Targeting is the activity that follows segmentation. Targeting is the process of aiming the market that has been identified through the segmentation process. â€Å"Target Marketing refers to a concept in marketing which