Marketing Doc file

1. Source: http://www.enotesmba.com/2013/01/marketing-challenges.html
Introduction
Well said by Heraclitus - "The only thing that is constant is change." We are experiencing
change in our daily life and at marketplace too. Customer needs, wants, expectations are
changing more rapidly; customers are increasingly demanding better quality and reliability in
products and services; new products and services are coming to market more quickly,
competition is getting intense and global rather than just domestic; technology is changing
rapidly; and e-commerce and Internet is having a great impact on marketing practices.
In such a rapidly changing marketing environment it is really difficult for business organizations
to make quick and sound decisions, and facing various marketing challenges. So, today we are
here to let you know what marketing challenges the business organizations are facing, and how
to overcome these challenges.
Marketing Challenges The Business Organizations Facing Today
Rapidly changing customer needs, wants, and expectations;
Increasing domestic and global competition;
Heterogeneous and fragmented market
Increasing popularity of Internet;
Rapid technological changes;
Challenge of selecting among too many options; and
Challenge of generating leads.
Rapidly Changing Customer Needs, Wants, and Expectations
Today, the needs, wants, and expectations of customer is changing rapidly. It is a great challenge
not only for small marketers but for big players too. It requires extensive study of market trends
and consumer behavior while developing new product or updating existing product.

2. Increasing Global and Domestic Competition
Competition today is global rather than just domestic. Marketers have to compete not only with
domestic players but with global players too. The intense and global competition is a great
challenge for marketers to deal with.
Increasing Popularity of Internet
With the increase in popularity of Internet a new spectrum of marketing channel is emerged. The
worldwide increase in number of Internet users brought a shift from traditional print-based media
to new online platforms. It presents a new set of marketing challenges - challenge of deciding
how much to allocate to digital v/s print-based media; challenge of using social
media marketing largely because of regulatory issues and concerns over its measurability; and
challenge of doing more with less money as the rise of Internet made communication cheaper
and efficient .
Challenge of Selecting Among Too Many Options
The greatest challenge the marketers facing today is simply too many options. Too many
potential customer segments. Too many product or service options. Too many communication
tools. It is really difficult and challenging for marketers to choose among too many options.
The marketers today doesn't suffer from lack of opportunities or options. The picture is totally
opposite today. Now they suffer from too many opportunities or options.
Ways to Overcome These Challenges
For the success of any business overall performance is required to be taken care of. Not only
financial performance but also marketing performance. Marketing performance includes - sales
volume, market share, and, customer satisfaction. Various marketing challenges makes it
difficult for marketing managers to achieve the targeted marketing performance. But, there are
ways to overcome such challenges. We are here to share the best possible ways to
overcome marketing challenges the business organizations facing today.
Create a Learning Organization

3. Business organizations must include learning as a key to improvement in their organizational
values. Proper training must be given to marketing employees and it should be considered as an
investment rather than as a cost. Marketing managers are required to continually question their
own views of the market place. Learning is not an one time activity its a continuous process,
ability to learn can be a key competitive advantage for any business.
Market Research
Marketing organizations must invest in market research and they are required to make extensive
use of it. Organizations are required to be good at using information about markets, customers,
and competitors. Market research must be focused on understanding customer needs, wants, and
expectations.
Reevaluate the Old Mix - Four Ps to Four Cs
With the increasing globalization, competition, and popularity of Internet the old marketing mix
is facing many new challenges; and to tackle these challenges marketing management must
reevaluate the old marketing mix to new mix by converting four Ps to four Cs.
Product/Customer Needs
Price/Cost to the Users
Place Convenience
Promotion / Communication
Marketing management philosophies:
1. Production Concept:
Production concept lays emphasis on availability and affordability of products. If these two
elements are present in marketing, the enterprise will succeed. Accordingly, marketing should
aim at the reduction in the cost of production and concentrate on mass production and
distribution. This concept holds that potential exchange would be realized when the products are
inexpensive and are widely available.

4. However, this concept is not entirely true. Sometimes customers don’t always buy products
which are inexpensive and easily available. For example, fleet shoes.
2. Product Concept:
Product concept lays emphasis on ‘quality of production’ rather than ‘quantity of production’.
Accordingly, the enterprise should concentrate on product and its continuous improvement over
time because customers favour high quality products and are ready to pay higher prices for them.
The enterprises following this concept direct their maximum efforts into creating superior
products and improving the existing products. However, the main drawback of this concept is
that customers will buy the product only if they require the same. For example, a firm may be
dealing in very spacious, luxurious and expensive cars but the customers will demand same only
when they really need them and can afford their price.
3. Sales Concept:
This concept stresses on attracting and persuading customers to buy the product by making
aggressive selling and promotional efforts. Thus, the focus of business firms is to ensure the sale
of products through aggressive selling techniques such as advertising, personal selling and sales
promotion without giving any consideration to customers’ satisfaction.
The main aim of selling is to convert the goods into cash by using fair or unfair means. But the
buyers cannot be manipulated every time; hence selling can be successful only for short period
but not during long period.
4. Marketing Concept:
According to this concept, customer satisfaction is the key to organisational success. It assumes
that a firm can achieve its objective of maximizing profit in the long run only by identifying and
satisfying the need of present and prospective buyers in an effective way. Business firms don’t
sell what they can make; rather they make and sell what customers want.
This concept is based on the following pillars:
(i) To identify the market or customers who are selected as the target of marketing effort.
(ii) To understand the needs and wants of customers in the target market.
(iii) Developing products or services for satisfying the needs of the target customers.
(iv) To ensure better satisfaction of needs of the target market as compared to competitors.
(v) To do all this at a profit.
5. The Social Marketing Concept:

5. The marketing concept has been criticized by some of the people because of the challenges
posed by social problems like environmental pollution, deforestation, population explosion,
inflation etc.
This is because any activity which results in customer satisfaction but is harmful for the interest
of the society at large cannot be justified. Therefore, the firms must perform the functions of
marketing keeping in view the social welfare. For example. No to plastic bags, recycled paper.
Source: http://www.businessmanagementideas.com/marketing/marketing-management-philosophies-5-
concepts/2286
Services marketing:
Services marketing is a sub-field of marketing, which can be split into the two main areas of
goods marketing (which includes the marketing of fast moving consumer goods (FMCG) and
durables) and services marketing. Services marketing typically refers to both business to
consumer (B2C) and business to business (B2B) services, and includes marketing of services
such as telecommunications services, financial services, all types of hospitality services, car
rental services, air travel, health care services and professional services.
Services are (usually) intangible economic activities offered by one party to another. Often time-
based, services performed bring about desired results to recipients, objects, or other assets for
which purchasers have responsibility. In exchange for money, time, and effort, service customers
expect value from access to goods, labor, professional skills, facilities, networks, and systems;
but they do not normally take ownership of any of the physical elements involved.[1]
There has been a long academic debate on what makes services different from goods. The
historical perspective in the late-eighteen and early-nineteenth centuries focused on creation and
possession of wealth. Classical economists contended that goods were objects of value over
which ownership rights could be established and exchanged. Ownership implied tangible
possession of an object that had been acquired through purchase, barter or gift from the producer
or previous owner and was legally identifiable as the property of the current owner.
More recently, scholars have found that services are different than goods and that there are
distinct models to understand the marketing of services to customers.[2][3]
In particular, scholars
have developed the concept of service-profit-chain to understand how customers and firms
interact with each other in service settings,[4][5]
Adam Smith’s famous book, The Wealth of Nations,
published in Great Britain in 1776, distinguished between the outputs of what he termed
"productive" and "unproductive" labor. The former, he stated, produced goods that could be
stored after production and subsequently exchanged for money or other items of value. But
unproductive labor, however" honorable,...useful, or... necessary" created services that perished

6. at the time of production and therefore didn’t contribute to wealth. Building on this theme,
French economist Jean-Baptiste Say argued that production and consumption were inseparable in
services, coining the term "immaterial products" to describe them.
What Are the Functions ofa Marketing Manager
by Paul Merchant, Demand Media
Marketing managers or officers are focused mainly on the practical application and management
of an organization's marketing operations. For marketing managers to be efficient and effective
in performing their functions, they should have excellent communication and analytical skills. In
small organizations, the marketing manager is in charge of the organization's entire marketing
activities and therefore handles formulating, directing and coordinating marketing activities so as
to influence customers to choose the organization's products over those of competitors.
Conducting Market Research
Marketing managers carry out market research to gain a clear understanding of what an
organization's customers really want. Marketing research enables these managers to identify new
market opportunities, helping the organization create a market niche for its products or services.
Market research also involves studying the organization's competitors so as to develop superior
products and employ efficient marketing techniques. Companies conduct market research using
questionnaires, face-to-face interviews or analyzing the buying habits of consumers.
Developing the Marketing Strategy
Marketing managers are responsible for developing marketing strategies for their organizations.
These strategies outline clearly how an organization will promote its products and services to its
target market with an aim of increasing its sales volumes and maintaining a competitive edge
over its competitors.
RelatedReading: Functions of Marketing in Business
Customer Relationship Management
The marketing manager performs the function of championing customer relationship
management in the organization. The marketing manager collects this information from the
organization's customer database to help create a customer satisfaction survey. Marketing
managers then share this information with other employees to ensure they offer excellent
customer service to their clients in order to build lasting relationships.

7. Employee Management
Marketing managers are in charge of the marketing department and therefore are responsible for
employees within their department. They assign duties and set targets for departmental staff. It is
also the function of marketing managers to perform periodic performance evaluations of the staff
working for them.
Identifying New Business Opportunities
Marketing managers analyze market trends with an aim of identifying unexploited or new
markets for the organization's products and services. Through studying the purchasing patterns of
consumers, they can identify the peak and off-peak demand periods for their products. By
employing sales forecasting, they can estimate future performance of the organization's products.
Also through market analysis and forecasting, they can develop strategies to ensure the
organization remains competitive.
Brand Development
Perhaps the most important duty performed by a marketing manager is the development of her
employer’s brand. Consisting of visuals, such as a logo, and sometimes sounds, such as music
used in a television or radio advertisement, a brand is the image that comes to mind when
customers think of company. Although each of a firm’s products and services may be branded,
there is typically a corporate brand that encompasses the entire organization. Partnering with
senior management, a marketing manage creates a brand that aligns with the organization’s
mission statement. She then directs internal or external media relations and advertising
professionals in the implementation of that brand, producing press releases, commercials and
other promotional material.
Competitive Intelligence
In an effort to assist his employer in remaining competitive in the marketplace, a marketing
manager performs a multitude of research aimed at ensuring the firm’s foothold in the industry.
He may perform customer research by implementing surveys and hosting focus groups. He may
also analyze the advertising activities and sales performance of competitors. In addition, he may
assess the state of the economy as it relates to the firm’s industry. Once this research has been
compiled, a marketing manager creates various reports based upon his findings. These
documents are then presented to senior management. Reports based upon the research of the
marketing manager are considered by management when making business critical decisions,
such as the development of new product lines or the discontinuation of a poorly performing
advertising campaign.

8. Public Relations
In many environments, a marketing manager represents his employer in the media. He grants
interviews in an effort to promote new products, services or initiatives. He represents the firm at
charitable events and other happenings taking place throughout the community. In times of
crisis, he may also perform damage control, courting the press for the purpose of changing a
negative opinion of his company. While some marketing managers perform this duty
autonomously, others work in partnership with internal or external public relations professionals.
Source: http://smallbusiness.chron.com/functions-marketing-manager-officer-15574.html
Strategic Planning:Strategic planning is an organization's process ofdefining its strategy,or direction,
and making decisions on allocating its resources to pursue this strategy.It may also extend to control mechanisms for
guiding the implementation ofthe strategy. Strategic planning became prominentin corporations during the 1960s
and remains an importantaspectof strategic management.It is executed by strategic planners or strategists,who
involve manyparties and research sources in their analysis ofthe organization and its relationship to the environment
in which it competes.[1]
Strategy has manydefinitions,butgenerallyinvolves setting goals,determining actions to achieve the goal s,and
mobilizing resources to execute the actions.A strategy describes how the ends (goals) will be achieved by the means
(resources).The senior leadership ofan organization is generallytasked with determining strategy.Strategy can be
planned (intended) or can be observed as a pattern of activity (emergent) as the organization adapts to its
environmentor competes.
Strategy includes processes offormulation and implementation;strategic planning helps coordinate both.However,
strategic planning is analytical in nature (i.e., it involves "finding the dots");strategy formation itselfinvolves synthesis
(i.e., "connecting the dots") via strategic thinking.As such,strategic planning occurs around the strategyformation
activity.[1]
Small Business Strategic Planning:a ProcessforSuccessand Survival
The small business strategic planning process has two essential elements: devising a strategy and
changing it when necessary.
Charles W. Hofer, Professor of Management and Entrepreneurship at Kennesaw State University,
spoke to IB Times about this process.
Hofer first stated that while some successful small businesses have a formal strategic planning
sessions, others, run by savvy, intuitive entrepreneurs who really know their markets, do not.
The importance, therefore, is about having the right strategy and not so much about how one
achieves that.

9. Strategic Plans for Small Businesses
Small businesses have limited resources, so in most cases it
does not make sense to compete in broad market segments dominated by big players.
Instead, they should focus on smaller, niche markets they have a better chance of winning.
By winning, Hofer means dominating. Multiple studies have shown that a company's profitability is
highly-correlated with its market share; the differences in profitability between the market leader and
other players are usually huge.
Therefore, it is better to dominate a few small niches rather than having a small market share in many
broad markets, said Hofer.
Moreover, a common path for small businesses to get big is when the small niche market they
dominate becomes big.
Once a specific niche market is identified, a small business should focus its energy on satisfying the
specific needs of the customers in that market, said Hofer.
When to Change the Strategic Plan
A sound strategic plan, however, does not remain relevant
forever. In mature markets, a strategic plan can be valid for as long as a decade or more. In more
dynamic markets, which is the case for many small businesses, a strategic plan's shelf life is usually a
lot shorter, said Hofer.
There are several warning signs that potentially spell the need to change one's strategic plan.
Declining sales from a small business' core customers is one. A change in market position by
competitors, entry of new competitors and the evolution of the market are others.
Hofer used the car industry to illustrate these points.
In the beginning, the American automobile industry was mostly marketed to the affluent. But Henry
Ford changed the industry by building cars that had qualities that attracted the masses.

10. For a while, Ford dominated the industry until General Motors (GM) offered consumers more variety
and choices with its annual model changes. Ford was slow to react to this new reality and nearly went
bankrupt because of it, said Hofer.
In the beginning stages of most markets, the needs of the consumers are simply having the product.
As markets mature, however, so do expectations, he said.
In the 1960s, U.S. carmakers operated under the annual changes model and were focused on
horsepower. The big two, Ford and GM, were mostly worried about each other and Chrysler; they
paid very little attention to Japanese carmakers.
However, starting from the 1970s, consumers began to appreciate smaller, more fuel-efficient and
more reliable Japanese cars. U.S. carmakers were slow to react to this change and lost tremendous
market share to their Japanese counterparts as a result.
To illustrate the point of dominating a niche market, Hofer pointed to Peterbilt and Kenworth, which,
by focusing on heavy-duty trucks, were able to prosper and carve out a space for themselves for
decades alongside behemoths Ford and GM.
Source: http://www.ibtimes.com/small-business-strategic-planning-process-success-
survival-400610
DESIGNING THE BUSINESS PORTFOLIO:PORTFOLIO ANALYSIS –
BOSTONMATRIX
TFOLIO:PORTFOLIO ANALYSIS– BOSTONMATRIX
The business portfolio is one of the most crucial factorsfor any organization.Why? Because it is about what the
organization plans,sells,and stops to sell. The business portfolio must be based on the company’s mission,objectives
and strategy,in order to fit the company’s strengths and weaknesses,philosophy and competencies to opportunities in
the market environment.Designing the business portfolio involves analyzing the company’s current portfolio,before
strategies for growth and downsizing can be developed.The Boston Growth-Share Matrix,developed by the Boston
Consulting Group,is a very helpful tool for analyzing the company’s current portfolio.
The business portfolio is the complete collection of products and businesses that make up a company.Designing and
maintaining a healthy portfolio involves thorough understanding of the firm’s objectives and the markets it wants to
serve.Business portfolio planning consistsof two steps, in which the Boston Matrix provides a great aid. Firstly,the
business must analyze its current business portfolio to determine which businesses (SBUs,see below) should receive

11. more,less,or no investment.This is significantly influenced by the life cycle stage the products are in.Does the
product reach the end of its life cycle end soon? Then,it should not receive too much attention anymore.Secondly,the
firm must shape its future portfolio,based on the analysis of the current portfolio,by developing strategies for growth
and downsizing.
To analyze the current portfolio,the Boston Growth-Share Matrix should be applied. It assists in evaluating the
businesses that make up the company and the attention they should receive.The idea behind this is that management
will want to put more resourcesinto its more profitable products and businesses and on the contrary,less resources
into weaker products and businesses.
The first step that needs to be taken is to identify the key businesses that make up the company:The Strategic Business
Units (SBUs).Strategic Business Units may be a division of the company,a product line,a brand or even a single
product.Then,the company is able to assess the attractiveness of each SBU in order to decide how much attention,or
support,it should receive.Why should the firm do so? Clearly because it helps to find the way in which it should best
use its strengths and competencies in order to take advantage of attractive opportunities in the market environment.
Therefore,each SBU should be analyzed with regard to the attractiveness of its market or industry and the strength of
its position in that market or industry.
The Boston Growth-Share Matrix addresses this.It was developed by the Boston Consulting Group (BCG),which is a
leading management consulting group,and is today the best-known and most popular portfolio-planning method.The
Boston Matrix classifies all the companies SBUs according to the attractiveness of the SBUs industry or market,which is
measured in terms or market growth rate,and the SBUs position in that industry or market,measured in terms of
relative market share the company has.On the vertical axis,market growth rate provides a measure for the
attractiveness of the SBUs market. On the horizontal axis,relative market share measures the company’s strength in
that market.

12. The market growth and relative market share of each SBU leads to a classification into one of four categories:
1. Stars are high-growth,high-share products or businesses.Those often require heavy investments to finance
their rapid growth.Once their growth slows down, which will eventually be the case, Stars will turn into Cash
Cows.
2. Cash Cows.Cash Cows are low-growth,but high-share productsor businesses.They need less investment to
hold their market share,being well-established and successful SBUs.Therefore,Cash Cows produce a lot of
cash which the company can use to invest in and support other SBUs that need investments to finance their
growth,namely Question Marks and Stars.
3. Question Marks.Question Marks are low-share Strategic Business Units,but in high-growth markets.To hold
their share,not mentioning increasing it which would be desirable,Question Marks require a lot of cash. If
Question Marks become a success,they will turn into Stars one day.However, the likelihood that they fail must
not be neglected.For that reason,management has to decide carefully which Question Marks will receive
attention and investment in order to build them into stars,and which other,less promising ones will be
phased out.

13. 4. Dogs are low-growth,low-share businesses and products.In other words,Dogs are the least desirable SBUs of
a company.They may generate enough cash still to maintain themselves.However,Dogs will not be large
sources of cash,and should be phased out as soon as they become unprofitable or as soon as the firm can
make better use of its resourcesto support other SBUs.
Usually,products or businessesof a company always start as a Question Mark. If they succeed,they will move on and
market share will grow, turning them into Stars.As the market is satisfied and market growth falls, Stars become Cas h
Cows,a major source of cash for the firm.Finally, even the best Cash Cows become dogs when the end of their life
cycle is reached.
As said before,the classification into Stars,Cash Cows,Question Marks and Dogs is strongly linked to the Product Life
Cycle stage the Strategic Business Unit is in. Question Marks are new, innovative products,which may become a large
success in the future,but still carry the risk that they will not be a hit. Stars are still growing,while Cash Cows are in the
maturity stage when the market is satisfied and does not growmuch anymore.Finally,when decline is reached,SBUs
can be called Dogs.
When the firm has classified the SBUs, it can determine the roles each SBU will play in the future,in order to shape the
future business portfolio.The company can choose from four strategiesfor each business unit.Firstly,it can invest
m ore in the SBU in order to build and grow its market share.This will apply particularly well to Question Marks and
Stars.Secondly,it can invest just enough to hold the market share of the SBU at its current level,which applies to Cash
Cows.Or, thirdly,it can harvest the SBU,which means milking its short-term cash flows,but regardless of the long-
term effect. Finally,the firm can choose to divest the SBU,either by selling it or by phasing it out, in order to make
better use of valuable resources elsewhere.This would be done with a Dog on the business portfolio.

14. After having evaluated the current business portfolio,the company should look at the future.In rapidly changing times,
constant innovation is critical to survival in the market. Therefore,the second part of designing the business portfolio
involves finding productsand businesses the company should considerin the future, by developing strategies for
growth and downsizing.
Consumer behavior:
Consumer behaviour is the study of individuals,groups,or organizations and the processes theyuse to select,
secure,use,and dispose ofproducts,services,experiences,or ideas to satisfy needs and the impacts thatthese
processes have on the consumer and society.[1]
It blends elements from psychology,sociology,social anthropology,
marketing and economics.Itattempts to understand the decision-making processes ofbuyers,both individuallyand
in groups such as how emotions affectbuying behaviour. It studies characteristics ofindividual consumers such
as demographics and behavioural variables in an attemptto understand people's wants.It also tries to assess
influences on the consumer from groups such as family,friends,sports,reference groups,and societyin general.[2][3]
Customer behavior studyis based on consumer buying behavior,with the customer playing the three distinctroles of
user,payer and buyer. Research has shown thatconsumer behavior is difficultto predict,even for experts in the
field.[4]
Relationship marketing is an influential assetfor customer behaviour analysis as ithas a keen interestin the
re-discovery of the true meaning ofmarketing through the re-affirmation ofthe importance ofthe customer or buyer. A
greater importance is also placed on consumer retention,customer relationship management,personalisation,
customisation and one-to-one marketing.Social functions can be categorized into social choice and welfare
functions.
Each method for vote counting is assumed as social function butif Arrow’s possibilitytheorem is used for a social
function, social welfare function is achieved.Some specifications ofthe social functions are
decisiveness, neutrality,anonymity, monotonicity,unanimity,homogeneityand weak and strong Pareto optimality.No
social choice function meets these requirements in an ordinal scale simultaneously.The mostimportantcharacteristic
of a social function is identification ofthe interactive effect of alternatives and creating a logical relation with the ranks.
Marketing provides services in order to satisfycustomers.With that in mind the productive system is considered from
its beginning atthe production level, to the end of the cycle, the consumer (Kioumarsi etal., 2009).
Factors affecting consumer behaviours:
There are 4 main types of factors influencing consumer behavior: cultural
factors, social factors, personal factors and psychological factors.

15. I. Cultural factors
Cultural factors are coming from the different components related to culture or
cultural environment from which the consumer belongs.
Culture and societal environment:
Culture is crucial when it comes to understanding the needs and behaviors of
an individual.
Throughout his existence, an individual will be influenced by his family, his
friends, his cultural environment or society that will “teach” him values,
preferences as well as common behaviors to their own culture.
For a brand, it is important to understand and take into account the cultural
factors inherent to each market or to each situation in order to adapt its
product and its marketing strategy. As these will play a role in the perception,
habits, behavior or expectations of consumers.
For example, in the West, it is common to invite colleagues or friends at home
for a drink or dinner. In Japan, on the contrary, invite someone home does not
usually fit into the local customs. It is preferable to do that this kind of outing
with friends or colleagues in restaurant.
A significant specificity to take into account for the brands in markets such as
savory snacking or sodas and alcoholic beverages. Usage and consumption
moments are not the same in all regions of the world.
While if a Japanese offer you a gift, the courtesy is to offer him an equivalent
gift in return.
McDonald’s is a brilliant example of adaptation to the specificities of each
culture and each market. Well aware of the importance to have an offer with
specific products to meet the needs and tastes of consumers from different
cultures, the fast-food giant has for example: a McBaguette in France (with
french baguette and Dijon mustard), a Chicken Maharaja Mac and a Masala
Grill Chicken in India (with Indian spices) as well as a Mega Teriyaki Burger
(with teriyaki sauce) or Gurakoro (with macaroni gratin and croquettes) in
Japan.

16. While all the ingredients used by McDonald’s in arabic and muslim countries
are certified halal. The fast food chain not offering, of course, any product with
bacon or pork.
Sub-cultures :
A society is composed of several sub-cultures in which people can identify.
Subcultures are groups of people who share the same values based on a
common experience or a similar lifestyle in general.
Subcultures are the nationalities, religions, ethnic groups, age groups, gender
of the individual, etc..
The subcultures are often considered by the brands for the segmentation of a
market in order to adapt a product or a communication strategy to the values
or the specific needs of this segment.
For example in recent years, the segment of “ethnic” cosmetics has greatly
expanded. These are products more suited to non-Caucasian populations and
to types of skin pigmentation for african, arab or indian populations for
example.
It’s a real brand positioning with a well-defined target in a sector that only
offered makeup products to a caucasian target until now (with the exception of
niche brands) and was then receiving critics from consumers of different
origin.
Brands often communicate in different ways, sometimes even create specific
products (sometimes without significant intrinsic difference) for the same type
of product in order to specifically target an age group, a gender or a specific
sub-culture.
Consumers are usually more receptive to products and marketing strategies
that specifically target them.
Social classes:
Social classes are defined as groups more or less homogenous and ranked
against each other according to a form of social hierarchy. Even if it’s very
large groups, we usually find similar values, lifestyles, interests and behaviors
in individuals belonging to the same social class.

17. We often assume three general categories among social classes : lower
class, middle class and upper class.
People from different social classes tend to have different desires and
consumption patterns. Disparities resulting from the difference in their
purchasing power, but not only. According to some researchers, behavior and
buying habits would also be a way of identification and belonging to its social
class.
Beyond a common foundation to the whole population and taking into account
that many counterexample naturally exist, they usually do not always buy the
same products, do not choose the same kind of vacation, do not always watch
the same TV shows, do not always read the same magazines, do not have
the same hobbies and do not always go in the same types of retailers and
stores.
For example, consumers from the middle class and upper class generally
consume more balanced and healthy food products than those from the lower
class.
They don’t go in the same stores either. If some retailers are, of course,
patronized by everyone, some are more specifically targeted to upper classes
such as The Fresh Market, Whole Foods Market, Barneys New York or
Nordstrom. While others, such as discount supermarkets, attract more
consumers from the lower class.
Some studies have also suggested that the social perception of a brand or a
retailer is playing a role in the behavior and purchasing decisions of
consumers.
In addition, the consumer buying behavior may also change according to
social class. A consumer from the lower class will be more focused on price.
While a shopper from the upper class will be more attracted to elements such
as quality, innovation, features, or even the “social benefit” that he can obtain
from the product.
Cultural trends:
Cultural trends or “Bandwagon effect” are defined as trends widely followed by
people and which are amplified by their mere popularity and by conformity or
compliance with social pressure. The more people follow a trend, the more
others will want to follow it.

18. They affect behavior and shopping habits of consumers and may be related to
the release of new products or become a source of innovation for brands.
By social pressure, desire to conformity or belonging to a group, desire to
“follow fashion trends” or simply due to the high visibility provided by media,
consumers will be influenced, consciously or unconsciously, by these trends.
For example, Facebook has become a cultural trend. The social network has
widely grew to the point of becoming a must have, especially among young
people.
It is the same with the growth of the tablet market. Tablets such as iPad or
Galaxy Tab have become a global cultural trend leading many consumers to
buy one. Even if they had never specially felt the need before.
For a brand, create a new cultural trend from scratch is not easy. Apple did it
with the tablets with its iPad. But this is an exception. However, brands must
remain attentive to the new trends and “bandwagon effects”. Whether to
accompany it (create a page on Facebook) or to take part in the newly created
market (create its own tablet).
II. Social factors
Social factors are among the factors influencing consumer behavior
significantly. They fall into three categories: reference groups, family and
social roles and status.
Reference groups and membership groups :
The membership groups of an individual are social groups to which he
belongs and which will influence him. The membership groups are usually
related to its social origin, age, place of residence, work, hobbies, leisure, etc..
The influence level may vary depending on individuals and groups. But is
generally observed common consumption trends among the members of a
same group.
The understanding of the specific features (mindset, values, lifestyle, etc..) of
each group allows brands to better target their advertising message.
More generally, reference groups are defined as those that provide to the
individual some points of comparison more or less direct about his behavior,

19. lifestyle, desires or consumer habits. They influence the image that the
individual has of himself as well as his behavior. Whether it is a membership
group or a non-membership group.
Because the individual can also be influenced by a group to which he doesn’t
belong yet but wishes to be part of. This is called an aspirational group. This
group will have a direct influence on the consumer who, wishing to belong to
this group and look like its members, will try to buy the same products.
For example, even if he doesn’t need it yet, a surfing beginner may want to
buy “advanced” brands or products used by experienced surfers (aspirational
group) in order to get closer to this group. While a teen may want the shoe
model or smartphone used by the group of “popular guys” from his high
school (aspirational group) in order to be accepted by this group.
Some brands have understood this very well and communicate, implicitly or
not, on the “social benefit” provided by their products.
Within a reference group that influence the consumer buying behavior, several
roles have been identified:
 The initiator: the person who suggests buying a product or service
 The influencer: the person whose point of view or advice will influence
the buying decision. It may be a person outside the group (singer,
athlete, actor, etc..) but on which group members rely on.
 The decision-maker: the person who will choose which product to buy.
In general, it’s the consumer but in some cases it may be another
person. For example, the “leader” of a soccer supporters’ group
(membership group) that will define, for the whole group, which
supporter’s scarf buy and bear during the next game.
 The buyer: the person who will buy the product. Generally, this will be
the final consumer.
Many brands look to target opinion leaders (initiator or influencer) to spread
the use and purchase of their product in a social group. Either through an
internal person of the group when it comes to a small social group. Or through
a sponsorship or a partnership with a reference leader (celebrity, actor,
musician, athlete, etc..) for larger groups.
Family:

20. The family is maybe the most influencing factor for an individual. It forms an
environment of socialization in which an individual will evolve, shape his
personality, acquire values. But also develop attitudes and opinions on
various subjects such as politics, society, social relations or himself and his
desires.
But also on his consumer habits, his perception of brands and the products he
buys.
We all kept, for many of us and for some products and brands, the same
buying habits and consumption patterns that the ones we had known in our
family.
Perceptions and family habits generally have a strong influence on the
consumer buying behavior. People will tend to keep the same as those
acquired with their families.
For example, if you have never drunk Coke during your childhood and your
parents have described it as a product “full of sugar and not good for health”.
There is far less chance that you are going to buy it when you will grow up
that someone who drinks Coke since childhood.
For brands – especially for Fast-Moving Consumer Goods (FMCG) or
Consumer Packaged Goods (CPG) – successfully “integrate” the family is
both a real challenge and an opportunity to develop a strong consumer loyalty
among all the family members.
That’s why it’s important for brands to be seen as a family brand in order to
become a consumer habit for parents and children when they will become
adults.
Social roles and status:
The position of an individual within his family, his work, his country club, his
group of friends, etc.. – All this can be defined in terms of role and social
status.
A social role is a set of attitudes and activities that an individual is supposed to
have and do according to his profession and his position at work, his position
in the family, his gender, etc.. – and expectations of the people around him.

21. Social status meanwhile reflects the rank and the importance of this role in
society or in social groups. Some are more valued than others.
The social role and status profoundly influences the consumer behavior and
his purchasing decisions. Especially for all the “visible” products from other
people.
For example, a consumer may buy a Ferrari or a Porsche for the quality of the
car but also for the external signs of social success that this kind of cars
represents. Moreover, it is likely that a CEO driving a small car like a Ford
Fiesta or a Volkswagen Golf would be taken less seriously by its customers
and business partners than if he is driving a german luxury car.
And this kind of behaviors and influences can be found at every level and for
every role and social status.
Again, many brands have understood it by creating an image associated with
their products reflecting an important social role or status.
III. Personal factors:
Decisions and buying behavior are obviously also influenced by the
characteristics of each consumer.
Age and way of life:
A consumer does not buy the same products or services at 20 or 70 years.
His lifestyle, values, environment, activities, hobbies and consumer habits
evolve throughout his life.
For example, during his life, a consumer could change his diet from unhealthy
products (fast food, ready meals, etc..) to a healthier diet, during mid-life with
family before needing to follow a little later a low cholesterol diet to avoid
health problems.
The factors influencing the buying decision process may also change. For
example, the “social value” of a brand generally play a more important role in
the decision for a consumer at 25 than at 65 years.
The family life cycle of the individual will also have an influence on his values,
lifestyles and buying behavior depending whether he’s single, in a
relationship, in a relationship with kids, etc.. As well as the region of the

22. country and the kind of city where he lives (large city, small town, countryside,
etc..).
For a brand or a retailer, it may be interesting to identify, understand, measure
and analyze what are the criteria and personal factors that influence the
shopping behavior of their customers in order to adapt.
For example, it is more than possible that consumers living in New York do
not have the same behavior and purchasing habits than the ones in Nebraska.
For a retailer, have a deep understanding and adapt to these differences will
be a real asset to increase sales.
Purchasing power and revenue:
The purchasing power of an individual will have, of course, a decisive
influence on his behavior and purchasing decisions based on his income and
his capital.
This obviously affects what he can afford, his perspective on money and the
level of importance of price in his purchasing decisions. But it also plays a role
in the kind of retailers where he goes or the kind of brands he buys.
As for social status, some consumers may also look for the “social value” of
products they buy in order to show “external indications” of their incomes and
their level of purchasing power..
Lifestyle:
The lifestyle of an individual includes all of its activities, interests, values and
opinions.
The lifestyle of a consumer will influence on his behavior and purchasing
decisions. For example, a consumer with a healthy and balanced lifestyle will
prefer to eat organic products and go to specific grocery stores, will do some
jogging regularly (and therefore will buy shoes, clothes and specific products),
etc..
Personality and self-concept:
Personality is the set of traits and specific characteristics of each individual. It
is the product of the interaction of psychological and physiological
characteristics of the individual and results in constant behaviors.

23. It materializes into some traits such as confidence, sociability, autonomy,
charisma, ambition, openness to others, shyness, curiosity, adaptability, etc..
While the self-concept is the image that the individual has – or would like to
have – of him and he conveys to his entourage. These two concepts greatly
influence the individual in his choices and his way of being in everyday life.
And therefore also his shopping behavior and purchasing habits as consumer.
In order to attract more customers, many brands are trying to develop an
image and a personality that conveys the traits and values - real or desired –
of consumers they are targeting.
For example, since its launch, Apple cultivates an image of innovation,
creativity, boldness and singularity which is able to attract consumers who
identify to these values and who feel valued – in their self-concept – by buying
a product from Apple.
Because consumers do not just buy products based on their needs or for their
intrinsic features but they are also looking for products that are consistent and
reinforce the image they have of themselves or they would like to have.
The more a product or brand can convey a positive and favorable self-image
to the consumer, the more it will be appreciated and regularly purchased.
IV. Psychological factors
Among the factors factors influencing consumer behavior, psychological
factors can be divided into 4 categories: motivation, perception, learning as
well as beliefs and attitudes.
Motivation:
Motivation is what will drive consumers to develop a purchasing behavior. It is
the expression of a need is which became pressing enough to lead the
consumer to want to satisfy it. It is usually working at a subconscious level
and is often difficult to measure.
Motivation is directly related to the need and is expressed in the same type of
classification as defined in the stages of the consumer buying decision
process.

24. To increase sales and encourage consumers to purchase, brands should try
to create, make conscious or reinforce a need in the consumer’s mind so that
he develops a purchase motivation. He will be much more interested in
considering and buy their products.
They must also, according to research, the type of product they sell and the
consumers they target, pick out the motivation and the need to which their
product respond in order to make them appear as the solution to the
consumers’ need.
Perception:
Perception is the process through which an individual selects, organizes and
interprets the information he receives in order to do something that makes
sense. The perception of a situation at a given time may decide if and how the
person will act.
Depending to his experiences, beliefs and personal characteristics, an
individual will have a different perception from another.
Each person faces every day tens of thousands of sensory stimuli (visual,
auditory, kinesthetic, olfactory and gustatory). It would be impossible for the
brain to process all consciously. That is why it focuses only on some of them.
The perception mechanism of an individual is organized around three
processes:
 Selective Attention: The individual focuses only on a few details or
stimulus to which he is subjected. The type of information or stimuli to
which an individual is more sensitive depends on the person.
For brands and advertisers successfully capture and retain the attention of
consumers is increasingly difficult. For example, many users no longer pay
any attention, unconsciously, to banner ads on the Internet. This kind of
process is called Banner Blindness.
The attention level also varies depending on the activity of the individual and
the number of other stimuli in the environment. For example, an individual
who is bored during a subway trip will be much more attentive to a new ad
displayed in the tube. It is a new stimuli that breaks the trip routine for him.

25. Consumers will also be much more attentive to stimuli related to a need. For
example, a consumer who wishes to buy a new car will pay more attention to
car manufacturers’ ads. While neglecting those for computers.
Lastly, people are more likely to be attentive to stimuli that are new or out of
the ordinary. For example, an innovative advertising or a marketing message
(Unique Value Proposition) widely different from its competitors is more likely
to be remembered by consumers.
 Selective Distortion: In many situations, two people are not going to
interpret an information or a stimulus in the same way. Each individual
will have a different perception based on his experience, state of mind,
beliefs and attitudes. Selective distortion leads people to interpret
situations in order to make them consistent with their beliefs and values.
For brands, it means that the message they communicate will never be
perceived exactly in the same way by consumers. And that everyone may
have a different perception of it. That’s why it’s important to regularly ask
consumers in order to know their actual brand perception.
Selective distortion often benefits to strong and popular brands. Studies have
shown that the perception and brand image plays a key role in the way
consumers perceived and judged the product.
Several experiments have shown that even if we give them the same product,
consumers find that the product is or tastes better when they’ve been told that
it’s from a brand they like than when they’ve been told it’s a generic brand.
While it is exactly the same product!
Similarly, consumers will tend to appreciate even less a product if it comes
from a brand for which they have a negative perception.
 Selective Retention: People do not retain all the information and
stimuli they have been exposed to. Selective retention means what the
individual will store and retain from a given situation or a particular
stimulus. As for selective distortion, individuals tend to memorize
information that will fit with their existing beliefs and perceptions.
For example, consumers will remember especially the benefits of a brand or
product they like and will “forget” the drawbacks or competing products’
advantages.

26. Selective retention is also what explains why brands and advertisers use so
much repetition in their advertising campaigns and why they are so
broadcasted. So that the selective retention can help the brand to become a
“top of mind” brand in the consumer’s mind.
Learning:
Learning is through action. When we act, we learn. It implies a change in the
behavior resulting from the experience. The learning changes the behavior of
an individual as he acquires information and experience.
For example, if you are sick after drinking milk, you had a negative
experience, you associate the milk with this state of discomfort and you “learn”
that you should not drink milk. Therefore, you don’t buy milk anymore.
Rather, if you had a good experience with the product, you will have much
more desire to buy it again next time.
The learning theories can be used in marketing by brands. As the theory of
operant conditioning which states that you can build a good image and high
demand for a product by associating it with a positive reinforcement (or rather
a bad image with a negative reinforcement).
Beliefs and attitudes:
A belief is a conviction that an individual has on something. Through the
experience he acquires, his learning and his external influences (family,
friends, etc..), he will develop beliefs that will influence his buying behavior.
While an attitude can be defined as a feeling, an assessment of an object or
idea and the predisposition to act in a certain way toward that object. Attitudes
allow the individual to develop a coherent behavior against a class of similar
objects or ideas.
Beliefs as well as attitudes are generally well-anchored in the individual’s mind
and are difficult to change. For many people, their beliefs and attitudes are
part of their personality and of who they are.
However, it is important to understand, identify and analyze the positive
attitudes and beliefs but also the negative ones that consumers can have on a
brand or product. To change the brand’s marketing message or adjust its
positioning in order to get consumers to change their brand perception.

27. Many factors influencing consumer behavior
As we have just seen, many factors, specificities and characteristics influence
the individual in what he is and the consumer in his decision making process,
shopping habits, purchasing behavior, the brands he buys or the retailers he
goes.
A purchase decision is the result of each and every one of these factors. An
individual and a consumer is led by his culture, his subculture, his social class,
his membership groups, his family, his personality, his psychological factors,
etc.. And is influenced by cultural trends as well as his social and societal
environment.
By identifying and understanding the factors that influence their customers,
brands have the opportunity to develop a strategy, a marketing message
(Unique Value Proposition) and advertising campaigns more efficient and
more in line with the needs and ways of thinking of their target consumers. A
real asset to better meet the needs of its customers and increase sales.