Consumer Decision Making & Market Positioning

Posted on Nov 18, 2024 in Other subjects

Consumer Decision Making

Consumer decision making is the process of analyzing problems, finding solutions, evaluating options, making choices, and assessing outcomes.

Influencing Factors

a) Firm’s Marketing Efforts

Marketers influence decisions through: product aspects, promotion (advertising/marketing), price strategies, and channel of distribution.

b) Socio-Cultural Environment

Elements like family role, informal sources, social class, and subcultures impact decisions.

Role of Involvement

Consumer decisions vary based on high or low involvement.

Note: The 5-stage model is often criticized as consumers are unaware of these processes.

CDMP Stages

  1. Problem/Need Recognition: Perceiving a gap between current and desired states.
  2. Information Search: Using internal (memory) and external sources.
  3. Evaluation of Alternatives: Assessing brands based on attributes and credibility.
  4. Purchase Behavior/Decision: Trial, repeat, or long-term commitment purchases.
  5. Post-Purchase Evaluation: Assessing performance against expectations.

Data Collection

Secondary Data

Utilize existing data before primary collection. Advantages include speed and cost-effectiveness, but relevance may be an issue.

Primary Data

Collect new data through qualitative (focus groups, interviews) and quantitative (surveys, experiments) research.

Positioning

Positioning designs a company’s offering to occupy a distinct place in customers’ minds.

Keys to Successful Positioning (4 C’s)

  • Clarity
  • Consistency
  • Credibility
  • Competitiveness

Positioning Bases

  • Product Features: Emphasize unique attributes.
  • Benefit Positioning: Focus on perceived advantages.
  • Usage Occasion: Highlight specific use contexts.
  • Type of User: Target specific user groups.
  • Competitive Positioning: Show advantages over rivals.

Repositioning

Repositioning changes target markets or differential advantages due to evolving tastes or poor sales.

New Product Pricing Strategy

Price Skimming

Set high initial prices and gradually lower them.

Price Penetration

Set low initial prices to gain market share and reduce costs over time.