Essay about Consumer Behaviour
Essay about Consumer Behaviour

Essay about Consumer Behaviour

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  • Pages: 14 (3723 words)
  • Published: December 31, 2017
  • Type: Case Study
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1. Introduction

The post world war era has revolutionized the way consumers are been perceived by all most all organizations, so much so they are now universally treated as the King and by certain organization cultures as God such as Japan in particular. During the Fordizem era, Ford maintained the fact that production is the only factor that generates the profit for the organization, thus any customer who wanted a Ford car had to settle with a Black Ford car (Porter,1996). Nevertheless post Fordizm saw the emergent of Japanese automobile industry who was able to identify and anticipate customer needs, and manufactured cars that were more inline with the customers needs.

Since then brands such as Toyota, Honda and Nissan has dominated the world automobile industry outsmarting all great automobile companies includes Ford. This was simply because they were able to recognize that customer is the key for


success. Incidentally this led to the emergent of "Marketing Orientation" and led many business academics to focus on developing marketing concepts. This led to define marketing as a process that "Identifies anticipates customer needs and wants and satisfy them profitably" (Huff, 1990).

Hence it was recognized that "customers" should be the central focus for any organization and marketing concepts such as segmentation, targeting and positioning became the heart of the organization. Marketing recognized the importance of marketing planning process and in the heart of the planning process laid the importance of understanding the consumer behaviour which affects the entire strategy of the marketing process. Hence marketing academics such Dr Philip Kotler and many others gave increase emphasis towards consumer buyer behaviour.

Consumer buying behaviour identifies and studies the psychology of consumer

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buying pattern and behaviour of when, why, how, and where people do or do not buy product (Davidson, 1987). Hence, when studying on consumer buyer behaviour it looks at the theoretical elements such as psychology, sociology and economics. An increase emphasis is given on consumer decision making process and that has led to develop and study many consumer decision making models. Consumer decision making models such as "Black Box model" the" six steps" consumer behaviour model which all gave insights to factors that would affect the consumer decision making (Kotler, 1994).

This particular assignment aims to identify how consumer behaviour models could be used for Omega company to effectively understand its target consumers. To this effect the objective of the assignment is twofold. Firstly to identify the external factors that affect the consumer buyer behaviour and to what extent do that have an impact towards Omega brand. Secondly the assignment intends to examine the most appropriate positioning strategies and finally to recommend the most appropriate positioning strategy for .Omega brand.

2. The brand - OMEGA wrist watches

Omega is a Swiss luxury watchmaker from Switzerland. It is one of the most recognized watch makers that represents prestige in the minds of the majority of the consumers. It represents many sports and worn by many celebrities who are also brand ambassadors of Omega. Omega incidentally was the choice of NASA when astronauts landed the moon in 1969. As with regard to the events Omega had the honour of being the official Time Keepers for world events such as 2010 Vancouver Winter Olympics. Omega was also associated with legendry James Bond movie where the secret British Agent has been wearing

the brand since 1995 movie. With regard to the notable wearers of Omega are late president John F. Kennedy, Prince William, Hollywood actor George Clooney, Nicole Kidman and Cindy Crawford. As with regard to the awareness created by the Omega, the company estimates seven out of ten people have heard about the Omega brand (

3. External Factors affecting the consumer behaviour

This section of the assignment intends to discuss on the external factors which affects the business of Omega and further more it intends to discuss to what extent it would have an impact on Omega business operation. To this effect different models will be used to examine the external environmental factors.


3.1 Black Box model

According Despande, and Webster, (1989.) the Black Box model consists of three phases. First one being the input phase, where all external factors that affects in making a decision for the consumer is considered. The external factors for the consumers according to Vyse (1999). would be either

* The PEST factors

* Marketing Mix elements

These variables would affect consumer buyer behaviour, as it would affect the consumers it would have an impact on the overall performance of the business as well. When considering the consumer buyer behaviour Wolf olins (1995). stated that marketers need to understand the three different groups of decision makers or in another words it is important to understand the decision making unit. According to Urde (2003) the making unit comprises of five key individuals. They are

* Gate keepers - those who regulates information flow

* Financer - those who actually makes the financing

* Influencer - those who influences the decisions

* Purchaser - the actual purchases

* User - the actual person who

consumes the product

3.1.1 Cultural Factors

As Omega is a prestigious brand, culture plays a key role for the success of the brand. As it is a global brand catering to the whole world. For this assignment the specific concentration would be given to the Indian market while focusing on to the global market as well. In a diversified global environment culture plays a prominent role in the consumer behaviour. This section would look at the role played by the culture and the sub-culture.

Culture: according to Schein, (1999). refers to the way we do things. Culture is considered to be learnt. Hence culture is associated with learning the basic set of values, perceptions and preferences they are learnt socializing within the growing up in a society, family and other key institution. Thus an individual growing up in American culture gets exposed to the values such as achievement and success, activity efficiency and practicality, progress, material comfort, individualism, freedom, external comfort, humanitarianism, and youthfulness. With regard to culture and its influence on omega, with globalization as a result of Hollywood and Bollywood which reaches to the wide variety of the cultures, actors wearing Omega would positively influence the behaviour of the consumers.

American culture is slowly but surely is been embraced by many of the global cultures due to McDonaldization and Coca-Colization. Consumer habits on all aspects of the life have been influenced as a result of the Americanization. According to Kotler, and, Armstrong (1991), in (1) the cultural traits such as achievement and success, activity efficiency and practicality, progress, material comfort, individualism, freedom, external comfort are key factor for Indian society and economy to rise to the level

where they are. As Omega is associated with traits typically found in successful person, which are achievement and success, efficiency and as successful personalities would like to associate with Omega brand as it portrays the same brand value that is found with the individual.

3.1.2 Subculture:

According to Stanton (2001), every culture is associated with small sub-cultures. In India within the introvert Indian culture there are groups of individuals who are extravert. They possess the qualities such as entrepreneurship, innovative and risk takers. These individuals who want to be more differentiated form the society would prefer to portray it though the use of prestige brands such as Omega that has the similar brand values. As for Omega the way it impacts to the business is, it helps to understand the different sub cultures and concentrate only on those sub-cultures rather than trying to understand the cultural impact the whole population would have towards the business operation of Omega.

3.1.3 Social Class:

Every human society demonstrates social stratification which they are comfortable of. More often than not, stratification is demonstrated in the form of social classes. According to Maslow's hierarchy of needs every individual once they full fill the basic and safety needs tend to full fill the social needs (Palmer, 2004). The way individuals try to full fill social needs would be by associating themselves with brands that portray their own class.

With the technological advancement wide spreading even to the developing nations such as India and China, it is evident that in the last decade these two powerful countries has even posed greater threat to the developed countries. This has led many firms to establish their ventures in India

and hence transformed the economic and social structure of India. As a result of the rapid development, there is an emerging higher social class segment in India with greater disposable income and with greater global exposure and association. This emerging lucrative segment is an gold mine for many luxury product manufactures in India.

According to Cheong (2003) the market for the luxury brands was traditionally dominated and considered to be associated with age of 30 and 50. But with globalization having greater impact towards the social life, younger generation tend to full fill their aspirations far earlier in their lives. Younger generation tend to get qualified in developed nations such as in United Kingdom and United States and even get their master at the very young age. This has led to change in demographics that define the segment for luxury products. This gives an opportunity for Omega as those younger generations would enter in to the market once they come back to India and would want to associate with Omega brand as it would demonstrate their class in the society (Ind, 2000).

He also mentioned that according to latest research the need for materialism and association of prestige not only limited to the high end consumers but also is been attracted by the less-well off young consumers that is driven by desire for fashion brands. According to Carrol (2007). the latest social trend post .com boom era has seen a boom in the luxury brand and market for luxury brands, and more and more firms are making attempts to attract the younger segment in to this market. One of the factors for Omega to consider the younger

segment is because of the vulnerability in nature. The opportunity to attract them using the mass media advertising is huge. According to Keller, (1998 ) the youth segment has a higher disposable income as well which would have a positive impact towards the growth of Omega brand in India.

However the attitude of the youth towards luxury purchasing is no different than the older adults.

3.1.4 Social Factors:

Apart from the social class consumers for luxury products are also influenced by the family, friends, reference groups and social status.

Reference Group: When considering the luxury products reference group is highly influential factor. If a group has the ability to change an individual's attitude positively or negatively directly or indirectly this is referred to as a reference group. As Omega represents success and achievement, if an individual associates with successful and achievement oriented group, invariably they would be driven to such brands and those who are using Omega would either influence other directly pr by using it projects to other that others should follow the success. The reason Omega being associated with NASA, Olympics and movies such as James Bond would strongly influence with the success oriented reference groups. It follows the notion "Birds with feather - flocks together". For most of the individuals within the reference group it is the question of maintain the social status and prestige and this is an opportunity for Omega to succeed.

Family Group:

Family plays an highly influential role in an individual's decision making and buyer behaviour. Understanding the family life cycle would recognize the level of disposable income one would have at their disposal specially to purchase high end luxury goods (DeChernatony, 2006). The

chances of an individual purchasing a luxury good would affect when he has the responsibility of the family and children. On the other hand if the generation has been associated with certain traits such exclusivity and prestige (such as the Royal family) then that would have an positive influence on the luxury brand perhaps towards Omega brand.

The reason Prince Williams represents the Omega ( is simply because of the prestige he carries from his generation and wearing Omega justifies it. One of the key success factor for Omega is it communicates to the consumers that is a watch for the generation. Therefore family group is key influencing factor for Omega to be successful in the business. If father has been wearing Omega there is a stronger possibility that there children would continue to wear Omega as it is the question of their pride of the family.

According to Bitner (2000). In the event of luxury products, husband and wives both plays a key role in decision making. Husband tends to get the opinion which brand should be brought and which model should be selected. Therefore managers at Omega needs to identify their roles in the decision making process and which member usually has the greater influence in the purchase of a luxury products. Especially in India according to deChernatony, L., and McDonald, M. (2003) men have better influencing power before the marriage and the power changes after marriage. On the other hand Solomon, (1999). stated that India is more of feminine culture where decision making largely depends on women's opinion.

3.1.5 Other Factors

There are other factors that contribute towards the consumer buyer behaviour especially for a luxury

product such as Omega. They are discussed below


a) Economic Factor

Economic factor apart from the social factor is a key considering for Luxury brands. According to DeChernatony (2006) it is the luxury brands that would affect at first during the recession. According to 2009 annual report of Omega SA, there was a slight dip in the sale of Omega watches worldwide. However according to Aaker (1996), luxury brands are economic insensitive and it is more emotional sensitive or drives. Therefore the target market who are prestige driven will not bother of the price of the brand Omega. They are more driven by the association of the brand Omega. TagHuer who is another brand who markets the luxury brand of watches withdrew Tiger Woods from the brand ambassador as it would ruin the brand image (Metro, 2009). Therefore as much economic indicators may affect the overall outcome of the business yet luxury brands do not by and large depend on the economic indicators.

b) Technological Factors

Omega has always been a brand that is always up to date with its technology and this is demonstrated by associating with James Bond, Olympics and NASA. More and more youth and younger segment are influenced by technology. It is evident by the number of Apple I phone purchases made by younger segment and brands such Gucci (

All the above factors would have an impact on the physiological aspect of the consumers; they may affect on the internal influences and decision making process as per the Black Box Model. This in-effect would have an impact on the final out come of the brand Omega being purchased or not. Therefore it is important for

the marketers at Omega to be updated with the consumer behavioural changes.

Figure 3.1 Black box model of consumer buying behaviour (Aker, 1996)

4. Positioning strategy for Omega

According to Kotler (1994) who prescribed that after effectively considering the different segments and selecting target markets the marketers should develop positioning an effective positioning strategy. This would lead to develop an effective marketing mix. Nevertheless, Aaker (1996) suggested that positioning strategy should only develop once the the marketers a clear with the brands value proposition on Omega brand (emotional value or functional value).

According to Aaker (1996) positioning refers to "the way the brand is perceived in the minds of the consumer" DeChernatoney (2006) refers to "the part of the brand identity and value proposition that is to be actively communicated to the target audience and that demonstrates an advantage over competing brands." Kotler (1994) defined it as "the unique selling proposition". In essence the positioning statement is the one that captures the heart and the mind of the consumers and it is very much vital for exclusive brands.

According to Aker (1996) there are range of positioning strategies and positioning means for luxury brands. According to him three key elements neds to be looked at when developing a brand positing strategy.

* the core identity of the brand - This refers to " what the brand stands for". According to Kapfere (2000) it is the central, timeless essence of a brand. As for the Omega it is the prestige that it ultimately stands for.

* Identity structure - According to Aker (1996) identity is revolved around many factors such as relationship, self image. This was even explained by Gronroos (2001) in describing

Kapferer brand identity prism. He stated that in developing a brand identity marketers needs to consider six factors. They are physical facet, brand relationship, brand personality, brand culture, customer reflection and customer self image. In a nut shell it is all about an attribute, sub-brand, special feature, or service that adds value to the customer. The identity structure for Omega should all the above factors when developing a positioning strategy.

* proposition (benefits that drive relationships with target audiences).

Furthermore according to Stanton, (2001), who stated that the positioning strategy should be based on three key components; they are customer targets, competition; that derived as a result of extensive external environment analysis and competitive advantage, that surfaces as a result of environmental scanning. As Palmer, (2004) stated: "positioning is not what you do to the product, but what you do to the mind.".

Therefore it is important to consider the completion, the consumers perception and attitude towards luxury products and to identify the competitive advantage platform for Omega when developing the position strategy.

Consumer perception and attitude

As it was understood that youth segement is becoming more lucrative for luxury product due to many reasons that were discussed above. However it is important to understand that younger generation does not assume all expensive goods to be high prestige as they are well informed about brands due to information technology.

They are more driven by value for money and the reason for them to purchase luxury goods is to enhance the self-identity, tastes and values (Palmer, 2004)

According to Schein, (1999) Luxery brand serves as a means to fulfil the emotional needs as they view luxury as a pleasure to their senses. As

Luxury goods are considered as premium goods with better quality brands, aesthetic and unique design accompanied by excellent service and more importantly used by people of the higher income bracket, the 'luxury' brands was only associated with very rich and a niche segment as they were rare and scarce (Aaker. 1996). Hence it was out of reach for many. Yet today the luxury brands have become a thriving business opportunity especially due to the young and emergent markets in India and China. These are a clear reflection of the desires and fantasies that are as a result of the social environment that has led to seek for well-being, comfort, quality and self image.

It is by no means a surprise that the term luxury depends on the socio - economic class. Omega for the Indian market it is certainly a Luxury brand.

The target segment

As it was discussed above the lucrative and growing segment to market the luxery brand is the youth segment.

The youth always has a positive attitude towards luxury items and even some times a wild effect (Gronroos, 2001). They also purchase to full fill their esteem needs. The way they value Luxury brand is if the brand produces an emotional value to them.

Hence it is important for Omega brand managers to consider emotional aspect when developing a positioning strategy. The way youth defines emotional value is in the way of that the form of pleasure, aesthetic beauty and excitement. According to Stanton, (2001) the youth now a days are driven more towards luxery brand ahead of the family responsibilities.

However the elderly rich segment try to look for balance of both tangible and intangible values

when they purchase a luxury brand such as Omega (Stanton, (2001). Therefore it is important when positioning to consider the segment the brand originally was catering to as well. Hence it is important for Omega to have blend of both emotional value and functional value aspect in its positioning strategy.

According to Palmer (2004)) the youth segment will look to influence, power and wealth by using Omega brand, but the elders would look at developing and fulfilling the seld actualization through the luxury brand. Hence it is important for managers to position appropriately in a way it communicates to both the segments.

Competitive advantage

Country of origin plays a vital role in positioning strategy. In India Swiss watches are considered very luxurious compared to Japan or any other countries specially amongst the younger segments. This too falls in favour of Omega brand positioning strategy. The Swiss brands of watches have significant competitive advantage on three attributes compared to its competition; they are quality, fashion and brand name (Palmer, 2004). The Swiss brands gives a competitive edge in fulfilling the emotional needs of the target market (Stanton, 2001).

Suitable Positioning strategy for Omega

By considering all the above factors this assignment recommends following position strategy.

The above position strategy helps to fulfil the emotional and functional aspect of consumer needs. As it is a luxury brand there is no need to focus on price element for Omega.

5. Conclusion and Reflection

The above examination helped in identifying how a marketer should approach a luxury brand when it needs to be positioned in the minds of the consumer. At the start of the module I intend to learn how consumer behaviour would have an impact

on luxury brands. I was able to learn different factors that would affect the consumer behaviour. This helped the marketing in developing effective mix element. The product itself acts as an influencing factor for consumers to purchase.

The key for luxury brands to succeed according to Blois (1996) is the brand name. Omega has been in four front of the watch industry by investing huge resources to build the brand image. Sponsoring exclusive events such as Olympics and James bond movies, and using exclusive celebrities such as James Bond, Jorge Clooney, Cindy Crawford are all promotional steps towards developing a positive influence in the minds of the consumers. All this factors would be considered when making a purchase decision. As Omega represents exclusivity price becomes immaterial; perhaps it should be priced exclusively. This also helps in identifying the different steps in the consumer buyer behaviour which is described below.

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