Download - Buyer Behaviour Assignment
[ ] September 28, 2009
Done By : Lahiru Dilip Jayampathie (CB003121)
Assignment Title: Individual Assignment
Subject : Buyer Behaviour
Subject Code : ABUS007-3-2-BBEH
Intake Code : DF0931
Supervised By : Mr. Rajitha Silva
Date Assigned : 24 August 2009
Date Due : 28 September 2009
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Acknowledgement
In the completion of this report, I’m deeply indebted to Mr. Rajitha Silva
the lecturer of Buyer Behaviour of our batch with a reputed love for the teaching of the
subject, in Colombo APIIT branch, for his continued assistance and encouragement. He
has indeed my ‘guru’ who’s penetrating criticisms and enlightening directions have
greatly improved my work.
I must acknowledge my obligations to my loving parents for giving their
fullest corporation to make this a success by providing me lot of equipments which
helped me a lot to complete our work in a pleasant way.
I’m grateful to all my class members for giving their support in a great way
by providing us much information which were very essential to complete my work with a
lot of information and for dedicating their valuable time for me.
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Table of Content
Contents
Acknowledgement...............................................................................................................2
Table of Content..................................................................................................................3
Introduction..........................................................................................................................4
Q.01) Analyze the identified product in terms of the total product concept to determine a
complete picture of the benefits consumer seeks and experience.......................................5
Total Product Concept.....................................................................................................7
Q.02) Use segment bounding, segment viability and segment strategies for the identified
product...............................................................................................................................16
Segment bounding..........................................................................................................17
Segment Viability..........................................................................................................20
Segmentation Strategies.................................................................................................22
Q.03) Apply “positioning” for the identified product to its target segment(s)..................24
References..........................................................................................................................28
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Introduction
This report would comprise with the buying behavior of the consumers and the factors
that would have a clear influence on the decision making process. Further it will be
concentrating on a particular product, Nokia N810 and will be providing an analytical
report in terms of total product concept, market segmentation and positioning relating to a
set of questions that have need of answers.
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Q.01) Analyze the identified product in terms of the total product
concept to determine a complete picture of the benefits consumer seeks
and experience.
A consumer purchase is a response to a problem which can be further explained as a
consumer as a person identifies a need or a desire and simply makes a purchasing
decision depending on various factors. According to Michael R. Soloman (P7, 2007) the
behavior of the consumers can be detailed as “the study of the processes involved when
individuals or groups select, purchase, use or dispose of products, services, ideas or
experiences to satisfy needs and desires.” The marketers have realized that consumer
behavior is an ongoing process which does not simply ends when the transferring of
money in turn to a good or a service takes place.
Making a purchase involves a decision making process made up of five stages and it’s
not always needed to go through the same procedure in order to purchase something. In
today’s context of buyer behavior, customers do not simply buy products or services but
benefits. Consequently people don’t tend to buy products themselves, nevertheless
benefits or the opportunities they offer. For case in point if the person is always late in
work a watch can be an answer for the problem. The person may be purchasing a watch
which also has the stop watch facility which offers an added benefit as he uses it for
clocking his timing in daily jogging.
The perceived benefits a customer seeks could diversify for different individuals. One
may be seeking for a bundle of benefits and at the same time another may be satisfied
with very little. The benefits which customers seek can be classified in to two categories.
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Tangible Benefits:
Tangible benefits can be measured and gained by consuming the product. Some
tangible benefits related with Nokia N810 tablet computer can be mentioned as
fast internet surfing, sensitive touch screen, GPS facility, full screen finger
keyboard, task navigator etc.
Intangible Benefits:
These benefits are immeasurable and may take time to attain. Those are created
and developed in the minds of the consumers as feelings by using a particular
product. It can be mentioned as reputation, reliability, brand image, popularity of
the brand and the image of the users of Nokia N810 may fall in to this category.
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Benifits
IntangibleTangible
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Total Product Concept
Total product concept can be defined as the sum of the benefits offered by a product or a
service. [Lascu, Lindquist, Sirgy 2003, p.04]. It comprises with four levels and both
tangible and intangible benefits can be explained further with the help of this concept.
Basic Core:
The basic core of the product refers to the bundle of utilitarian benefits obtained.
[Lascu, Lindquist, Sirgy 2003, p.04]. Mean time it can be worded as the bundle of
functional benefits customers obtain as a result of their purchase of goods or
services and may include features, design, etc…
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Time
Psychological Ring
Accessory Ring
Basic Core
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The core benefits that can only be experienced through purchasing a Nokia N810
would be:
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Accessory Ring :
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Accessory ring would comprise of the value added benefits which the customer
will be getting for the purchase he or she makes without any additional cost.
These benefits are freely awarded to the customers and from those some of the
thing can be identified as convenient location, manufacturer prestige, reputation
of both manufacturer and the available store, after sales service, etc... Nokia N810
is rich in that aspect and will be offering various tangible and intangible added
benefits exclusive of any superfluous.
Some of the in plain sight elements of the N810 value added benefits
Convenient location
Nokia Corporation is blessed with a well defined and structured supply base as
well as service locations allowing customers purchasing and device repair
service if required a worry free event. They have authorized dealers located in
every territory. Also purchasing is much easier as never before with the Nokia
online purchasing system as you can make Nokia 810 your own in just seconds.
You can supplement your requirement in Sri Lanka through Soft Logic
Corporation. The device is available in different regions as America, Asia-
Pacific, Europe, and Middle East.
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Manufacturer Prestige
What makes N810 even more convincing is that it is invented by one of the
leading in telecommunication devices producers Nokia which has a reputation of
producing high tech, high quality products for many years. It isn’t a doubtful
operation to purchase a Nokia as the company has guaranteed reliability and
created faith in its products. It also makes sure to keep up with the promises made
related with the guarantees and warrantees in any troublesome circumstances
which make customers feel safe.
Reputation
Nokia 810 is known as a device which provides the cutting edge in connecting to
the internet in milliseconds. It also comes across as a device which enables you to
locate your position no matter where you are and live up to the expectations of all
possible modern communicating and entertaining facilities in a single device. This
device is a respect to have and the grater utilization of the device would help you
to make that complicated routines to become attainable and stand alone from the
society.
Technical Support and Software Updates
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Once you become a valued user of N810 you are exposed and eligible to many
services offered by Nokia. You can download latest updated software,
applications, get tech support, contests and various other services are offered free
at Nokia.
Psychological Ring
Intangible benefits which are associated with the product or service the customer
purchases would come under psychological ring and according to Lascu, Lindquist,
Sirgy( 2003, p.04) it can be described as the ”benefits result from the consumer’s
feelings associated with the possession and/or use of the product”.
Belongingness, youthfulness and powerfulness can be pointed out as some of the
likely features that are like injected to the consumer simply only through the use of
the particular device. Those can be socially related factors which increase customer
satisfaction and make the person prestigious about using the product. Individuals who
use Nokia as well as N810 are accepted socially as reputed people and it makes the
person using the product feeling belonging to a specific group of people which helps
to increase his or her status in the society.
Time
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Time is a critical factor engaged in acquiring a product or a service as it gives a
positive as well as a negative impression to the customer and can be giving or taking
time. The easiness of acquiring the product/service will have a positive impact while
the excess time taken may result in dissatisfaction. In point of view of Lascu,
Lindquist and, Sirgy (2003 p.04)”when the consumers purchase a product or a service
they either spend or save time and may create positive or negative outcomes” The
customers can select the best suited method for them to purchase the N810 as it is
available online and widely in outlets as well.
.
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Q.02) Use segment bounding, segment viability and segment strategies
for the identified product.
As it is rightly mentioned marketers do not create market segments they just find it.
Market segmentation refers to the identification of like-minded clusters of consumers
who can be expected to behave in similar ways, making similar decisions in the
marketplace in similar situations [Lascu, Lindquist, Sirgy 2003, p.05]. It is a study of the
marketplace in order to find out economically feasible and identical customers who
already exist in the market place.
(Source: blog.themarketinganalysts.com)
Market segmentation may involve four steps
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1. Identification of product related need sets
2. Group customers who have similar needs
3. Describe each group
4. Select an attractive segment to cater to
It is likely that people on the go, young people who demands cutting edge in technology,
professionals and industrialists may be fascinated by Nokia’s N810. The demand for this
device may be high in this group and thus it can be varied accordance with their needs
and what the device is offering to them.
Market segmentation can be classified in to three categories.
1. Segment bounding
2. Segment Viability
3. Segment Strategies
Segment bounding
It’s the initial step in market segmentation and “Segment Bounding is the method of
differentiating consumers and market segments” [Lascu, Lindquist, Sirgy 2003, p.06].
It can be explained further as the marketers differentiating among consumers and
market segments. This process can be exercised though three steps and is essential to
Nokia to determine their intended group of customers in order to become flourishing.
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i) Determine the descriptors consumer in the segment
It is essential to determine likely descriptors before coming up with the product and
demographics, psychographics, behavioral aspects can become some of them.
When it comes to demographic segmentation variables such as age, family size,
family life cycle, gender, income, occupation, education, religion, race, generation,
nationality, and social class are taken in to account (Kotler 2003’p6) It will be a
important factor for Nokia to consider these aspects as it will determine the success or
may take some pounding. It is likely that young people, professionals, industrialists,
high income people, upper class people may be demanding N810 a lot as it is suiting
their requirements and needs to be concentrating on these people as it requires some
purchasing power than a normal cellular phone.
Psychographic is the science of using psychology and demographics to better
understanding the consumers. (Kotler. 2003,p7) It is important identify the benefits
that the customers sought as it can help better serve the segment. In today’s context
many customers are quality conscious and it will be beneficial to Nokia as they are
well known for producing quality products more importantly at reasonable prices.
In behavioral factors buyers are divided into groups on the basis of their knowledge
of, attitude toward, use of, or response to a product." (Kotler et al, 2003). It will be
further including product usage rate, consumption pattern, user satisfaction and the
customer loyalty toward the product.
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ii) Determine specific geographic location
It is helpful to recognize the typical users of the Nokia N810 and the hawk eye of
Nokia would be on people who live in highly developed regions as well as the cities.
The importance it has on that is N810 is mainly an internet tablet computer which
mainly concentrates on providing the internet facility as well as the some of the
capabilities of a computer for the people who may be on the go. Hence it isn’t highly
theoretical for Nokia to concentrate on above mentioned type of people as those
services are required and can be acquired only by people who have the availability of
the wireless connections and who are exposed to handle high tech devices. Once the
locations are identified it is useful to concentrate more on that segment and carry out
their exercises focusing on it.
iii) Bound Segments in Time
Requirement of a research is priceless to identify the perfect segment before
marketing any product. Hence it is needed to collect data and gather relevant
information and the most important aspect of it is that it should be ensured that all the
data that is collected is relevant and up to date and when the time of use for the
decision making. It will be the decider between a perfect and a false plan.
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Segment Viability
Segment bounding doesn’t simply end the segmentation process as it is also important
to figure out the viability of the segment. Four steps are taken in to account in
assessing the viability.
(Source: www.niblettes.com)
Measurable
Marketers should take measurability in to account in many aspects of the
selected segment before the production. It is essential to take the approximate
amount of the population relating to income, target customers, social class,
nationality etc…It can be achieved both through analytical assessments which
will help Nokia to meet the demand and supply equalities. It is also better to look
at the qualitative data like behavioral factors as well.
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Differentiated
It is a useful marketing strategy in which the firm decides cater to different target
market segments by offering different offers. It helps the organization to attract
several segments with a unique product. In the case of Nokia some customers
may be seeking a built in radio facility as some are looking at a built in television
option and Nokia can serve both categories by making their dream a reality.
Accessible
It refers to the ability of the firm to deliver the product to its target customers
which will be most important in business world. The availability of the product
without any shortages is very important as well as the limited difficulties if it
isn’t zero in purchasing. One strategy would be to make available the product
online as it will reduce access time a lot. People who use to buy via internet
dearly love it even though it is also essential to have conventional outlets to serve
the customers who value spending time on purchasing through outlets.
Sufficient size
What is important in maintaining substantial consumers is that if there isn’t much
of a demand it’s no point of producing such devices. It’s only worth Nokia
produce N810 if there is sufficient demand to bare up its costs as well as gain
expected profits.
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Segmentation Strategies
After the viable segments are identified marketers need to look for the
segmentation strategies for the recognized segment. It can be done using three
strategies known as mass marketing, concentrated marketing and differentiated
marketing.
Mass Marketing
Mass Marketing is also identified as differentiated marketing where there
isn’t any concentration to a specific group as the as the marketer offer the
same product to the entire population.
Concentrated Marketing
It’s also known as focused or niche marketing in which marketers
concentrate on selecting one market segment to the serving even though it
may suite to others as well.
Differentiated Marketing
It is known as catering to two or more different segments.
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Micro Marketing
It is about individual marketing in which the marketers concentrate more
on individuals.
(Source: www.fastfacility.com)
After analyzing the all possible strategies it can be rest assured that Nokia is better
off using the concentrated marketing for its N810. Many reasons can be pointed
out as to why Nokia should go with this strategy.
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One reason is that it is relatively expensive than the normal products which
comes under Nokia and every one would not be interested in it other than the
people like professionals, young generation, high income earners, industrialists
and also the upper class people who value the innovations of new technology.
Mean time a preferable demand can be derived mainly through this set of people
as some competency level in technology and the requirement is needed to manage
and have such a device.
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Q.03) Apply “positioning” for the identified product to its target
segment(s).
(Source: www.sobevent.com)
Product positioning can be explained as the placement of a product or service in the
minds of the consumer. According to Kotler (2006, p.216) “positioning is the way the
product is defined by consumers on important attributes”. It’s all about creating a strong,
unique and more recognized image in consumers’ minds. Nokia first needs to identify the
requirement of product positioning in order to achieve their objective. The following
aspects can be worth of having a look for Nokia.
I. To strengthen the power of messages directed at customers.
II. To target a particular segment.
III. To ensure that the product differentiated in the minds of customers.
IV. To decide on the ground on which to compete.
V. To analyse repositioning possibilities.
(Source: http://tutor2u.net)
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Meantime there is five possible ways Nokia can be able to locate the N810 in the minds
of the customers.
On perceived benefits
Positioning can be done through meeting the minds of the consumers what seems to
carrying a lot of weightage for the customer satisfaction. Reputation, reliability,
brand image, quality may be some of the respected benefits that the customers
inquire. Mean time Nokia can concentrate on highlighting its product through its
features, after sales service and ease of use which is the cornerstone of Nokia for
many decades that is coming up products which gives total satisfaction to the user
and has become the secret of success for Nokia.
On image
It can be the most significant factor in product positioning of Nokia since it has a
reputation of being a demanding brand for many years which makes life easy for
Nokia to position its new N810 in the minds of the customers. Parenthetically it is
regarded as a known way of product differentiation.
On attributes
Nokia can count on it in a big way which is associating with the brand in a largely
manner. It can be done through defining the benefits that the product would offer
such as quality, design, features and style and the user friendliness what Nokia is
known for a lot.
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Against competitors
The key word is to differentiate the product from the competitors which will give
you the cutting-edge. It can be done through price, features, design, etc…and. For
Nokia to be successful in this event it should set apart their product from its strong
competitors like apple I-phone, Blackberry, Sony Ericsson. These strong competitors
also having come up with likely devices may make life difficult for Nokia. Even
though the situation is like that Nokia can take advantage of the discussions which
are going on about some of the competitors like apple and blackberry which are not
renowned for ease of use. On the other hand user friendliness is one of the success
stories of Nokia and it can be used to good effect by Nokia against its rivals.
Combination of two or more of the above
Nokia can go with one or with the company of all methods mentioned above. It’s
important to Nokia to select the best way to reach the minds of the customers by
picking the most effective plan.
It seems that Nokia is better off using all possible methods for positioning of its new
product N810. They can use their reputation, brand image as successful tools along with
user friendliness, features to good effect to go deep in to the minds of the customers.
There is an additional technique which can be supportive in coming up with product
positioning that can be done by answering a set of questions regarding the positioning
statement.
1. For whom the product is designed?
2. What kind of product it is?
3. What is the single most benefit it offers?
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4. What is its most important competitor?
5. How is your product differentiating from the competitor?
6. What is the significant customer benefit of that difference?
(Source: www.jpec.org)
“Positioning maps help you to visualize your products in the market place, relative to
competitive products, customer needs and even the other products in your product
line”(www.smartdraw.com). This statement clearly indicates it’s better for the Nokia to
come up with a positioning map which will give them a clear indication as to where they
stand.
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Nokia N810 Blackberry
Apple I-Phone
Sony Ericsson
[ ] September 28, 2009
References
Books
Lindquist, J. D & Sirgy, M. J (2003), Shopper, Buyer, and Consumer
Behaviour, 2nd Edition, Biztantra Publications, an Imprint of Atomic
Dog Publishing, India.
Solomon, M. R (2007), Consumer Behaviour, Prentice-Hall
Publications, India
Kotler, P & Keller, K. L (2006), Marketing Management, Pearson
Education, India.
Kotler, P & Armstrong, G (2006), Principles of Marketing, Prentice-
Hall Publications, India.
Websites
Nokia Corporation [Online] Available: http://europe.nokia.com/ [Accessed 13h
September 2009]
Anon. (2007). Product Positioning diagram matrix. Available:
www.smartdraw.com/.../Working-Smarter-with-Positioning-Matrix.pdf. Last
accessed 20 September 2009.
Anon. (2008). Segment Bounding. Available:
homepages.wmich.edu/~lindquis/.../cbch1.ppt. Last accessed 21 September 2009.
Anon. (2009). Market Segmentation. Available:
http://blog.themarketinganalysts.com/wp-content/uploads/2009/06/market-
segmentation1.jpg. Last accessed 21 September 2009.
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niblets.com. (2009). segment viability. Available:
http://www.niblettes.com/blog/wp-images/inline/inpd_niblettes.gif. Last accessed
22 September 2009.
fastfacility.com. (2007). concentrated marketing. Available:
http://www.fastfacility.com/images/postcard_collage_smaller_1.jpg(concentrated)
. Last accessed 23 September 2009.
sobevent.com. (2009). positioning. Available: http://www.sobevent.com/wp-
content/uploads/2008/10/positioning.jpg. Last accessed 24 September 2009.
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