Download revision_marketing

Running head: CONSUMER BEHAVIOR/MARKET ANALYSIS REPORT
Consumer Behavior/Market Analysis Report
Magic Toothpaste
Name
Institutional Affiliation
1
CONSUMER BEHAVIOR/MARKET ANALYSIS REPORT
2
Introduction
This paper presents a report on consumer behavior/market analysis of Magic toothpaste.
Specifically, the paper examines the target market of the product and explains the consumers’
emotional appeal for that product. The paper examines some of the American values that can be
used when selling the product to the target market, and the ethical considerations that need to be
taken when doing this. This paper draws attention to the current state of consumer spending with
reference to the Magic toothpaste and explains how this may affect the sale of this product. The
paper also discusses the potential of Magic toothpaste in relation to its appeal in different
cultures, and provides an analysis of the different US subcultures that may be interested in
buying the product. The paper concludes by examining Magic Toothpaste’s competition and
describes what should be done differently to gain market share and promote a positive consumer
behavior with relation to Magic Toothpaste.
Current research studies define consumer behavior as a potential customer’s physical,
psychological, or social behavior as he or she gains awareness of a particular product, evaluates
the product, consume the product, and provide recommendations of the product or service that
they purchased (Harish, 2009). Accordingly, the scope of consumer buying behavior does not
only involve the buyer of product, but also the influence of other individuals in the buyer’s
decision-making process. For that reason, consumer behavior involves a myriad of processes and
activities including searching, choosing, buying, using, assessing, and disposing of products and
services that are offered to them with the aim of satisfying their desires (Holbrook, 2002).
Understanding consumer buying behavior allows marketers to step into the customers shoe and
comprehend how each customer think and feel when purchasing a product. Figure 1 illustrates
the consumer decision making process with relation to the purchase of a product or service.
CONSUMER BEHAVIOR/MARKET ANALYSIS REPORT
3
Figure 1: Consumer Decision Making Process
Need
Information
Alternative
Purchase
Post purchase
recognition
search
evaluation
decision
evaluation
Motivation
Perception
Attitude
integration
Satisfaction
formation
Product
In the last decades, the toothpaste industry has progressed immensely dues to several
factors including government policies, increase in cost of raw materials, as well as, issues related
to the environment and the impacts of some toothpaste products on the environment.
Accordingly, technological changes and emerging trends in innovative technology have pushed
companies to using the most cost effective production methods to create their products or
services. For that reason, most of the toothpaste manufacturers today are looking into the most
competitive ways in which they can capture their target markets while keeping up with the
technological changes and trends in business.
Magic toothpaste is toothpaste that is different from other toothpastes in the market. This
toothpaste has a medicinal value, and on top of cleaning one’s teeth, the toothpaste helps in
whitening teeth, and in the prevention of tooth decay. The toothpaste also acts as a mouthwash,
for people who experience problems with bad breath and suffer incidences of oral thrush. Magic
tooth paste is different from other toothpastes in the market and its key ingredient is a bacteria
killer which allows the toothpaste to have the medicinal value associated with it. The vision of
the magic toothpaste manufacturers is the creation of products that are “fit for life” and the magic
toothpaste fits this description well. When creating this product, Beauty and Health Company
CONSUMER BEHAVIOR/MARKET ANALYSIS REPORT
4
considered each individual tastes and preferences, and this has allowed the toothpaste to be
created in various flavors, due to varying degrees of tastes. The Magic Toothpaste by beauty and
health organization is a global product that has been accepted by various consumers from
different regions and demographics globally. For that reason, the product faces stiff competition
from other multinational companies who are dominating the market. Additionally, the toothpaste
also faces threats from new entrants and this implies future imitation of the product. The
company is currently looking into ways in which they can expand their market share and create a
wider market segment for their product.
Target Market
Products by Beauty and Health are purchased various customers of different cultural
backgrounds. However, it is the cosmopolitan cities that provide the largest customer base for
beauty and health products. Discount supermarkets like Wal-Mart are the main retailers of the
Magic toothpaste, but the product can also be found in beauty shops and health clinics.
Accordingly, the target market for the magic toothpaste is young people between 18-35 years of
age residing in the USA. The reason why this segment was chosen for the Magic toothpaste
brand is because people who fall under this age bracket illustrate a level of hygiene
consciousness. Women are expected to make up the largest percentage of this market and are
considered as the key drivers of the Magic Toothpaste sales.
A market analysis of this potential market illustrates that individuals in this group
understand the need for proper mouth hygiene, healthy teeth, as well as, the negative effect that
tooth diseases can cause. The selected target segment is projected to result in the highest number
of sales for the Magic toothpaste and individuals placed in this group are expected to have a
CONSUMER BEHAVIOR/MARKET ANALYSIS REPORT
5
number of qualities including, educated, first consumers, sufficient income, premium buyers, and
consumers who are looking to purchase products that are stylish and trendy. Additionally,
families in the US are also considered as future buyers of the Magic toothpaste (House &
Saranavel, 2002). US families provide market clusters that in the last few years have been buyers
of other Beauty and Health products. For that reason, US families distributed in various areas in
the US can be considered as potential target markets for the Magic toothpaste. Figure 2
illustrates the demographic characteristics of the target market for magic toothpaste. The figure
shows the usage of the product based on different demographic variables, and the usage of the
product for each demographic variable in terms of percentage.
Figure 2: Demographic Characteristics
Demographic variables
Percentage
Age (years)
7-18
20
18-25
30
25-30
20
30& above
30
Gender
Male
60
Female
40
Education qualification
Up to 10+2
25
Up to graduation
35
Pg/higher education
40
Status
CONSUMER BEHAVIOR/MARKET ANALYSIS REPORT
Student
10
Professional
30
House wife
10
Businessman
20
6
Monthly income
Below $5000
10
$5000-$9000
20
$9000- $11000
40
Above $11000
30
Emotional appeal in marketing defines product promotion activities that are designed to
appeal to the emotional side of consumer, as opposed to, the practicability or functionality of the
product for the customer (Harish, 2009). In essence, marketers of a particular product or service
manipulate the emotions of their consumers to make them buy products of services. The
emotional appeal will be more effective in selling the Magic toothpaste to the selected target
market. Emotional appeal marketing technique will be used to show customers how buying the
magic toothpaste will improve their image and status in society.
Marketing activities will imply dental hygiene as the best image for their buyers. The
selected target market will then associate proper dental health with every purchase they make of
the magic toothpaste. The customer decision-making process is influenced by a number of
issues, and the target segment for the magic toothpaste will consider individual benefits when
they buy the product. The assumption here is that buyers of the product will have a history of
dental problems, and this will be the reason why they will make the decision to buy the magic
toothpaste. For individuals aged between 18-35 years, the emotional appeal will work on them
CONSUMER BEHAVIOR/MARKET ANALYSIS REPORT
7
because they place dental hygiene in high regard. For that reason, factors such as whiter teeth,
fresh breath, and the herbal attribute of the magic toothpaste is what will determine whether
consumers in this group will purchase the product.
Accordingly, the emotional appeal will also work when selling to families because most
families are concerned about the possibility of their children getting cavities at the age in which
they indulge themselves in sweets. Research studies indicate that US families purchase fluoride
toothpaste because of the cavity factor. Families are also highly concerned about their dental
health and the probability of having whiter teeth will be a key consideration when they purchase
the magic toothpaste.
American Values
When marketing and selling the magic toothpaste in the US market the two American
values that will be targeted are materialism and self-improvement. Although materialism is not
considered positively in the society, marketers can use this to their advantage and us this to
improve the sale of their products and services. Actually, most marketers use materialism in their
product marketing activities. As an American value, materialism simply defines the desire to
acquire products or services that will make one’s life easier and better. Materialism has
stimulated the American economy as most consumers rush to purchase products or services that
they perceive will make their lives better. Therefore, magic toothpaste marketing campaigns will
appeal to the consumers’ materialistic nature and the magic toothpaste will be marketed as being
a desirable product that will provide a level of status for consumers who buy it.
Self-improvement is also another American value that will be targeted when selling the
Magic toothpaste. Most Americans are always looking into ways in which they can improve
CONSUMER BEHAVIOR/MARKET ANALYSIS REPORT
8
themselves or their lifestyle. Therefore, when marketing and selling the magic toothpaste,
consumers will be of the belief that the product will help in improving themselves or their image.
Consumers will buy the product because they believe it will help in solving their dental
problems.
Ethical consideration is defined as the art of maintaining and upholding high standards of
integrity in product research and marketing. The ethical considerations to be considered when
targeting these values include, ensuring anonymity during the market research process and
ensuring that the marketing activities promote truth and objective of the product (Slater et al.,
2007). In relation to materialism and self-improvement, the ethical consideration would be to
ensure that the marketers do not get carried away during their marketing campaign and falsify
the benefits of using the Magic toothpaste. In addition, marketing activities should be carried out
in a business and professional manner for the integrity of the company, and all the necessary
product information should be provided for the consumers. The rationale behind adherence to
ethical considerations when appealing to American values is, so as to, ensure the company
promotes truth and objective of their product, and to avoid any future problems with relation to
their products and services. Consumers may sue the company if they do not get the benefits that
are stated regarding the magic toothpaste.
Consumer Spending
Consumer spending refers to the amount of money that individuals spend on the purchase
of goods and services, so as to, satisfy their needs. When introducing a product to a market, it is
important to examine the current economy of the particular market, as well as, the health of that
specific economy. Consumer spending in the US is similar to other global markets and the
CONSUMER BEHAVIOR/MARKET ANALYSIS REPORT
9
average American will spend a large percentage of their money on housing, food, health care,
education, and transport. Low-income families spend more of their money for purchase of
practical items such as food, shelter, and education, and this group spends less on luxury items
and entertainment. High-income families, on the other hand, spend most of their money on
acquiring luxury items but they do not neglect the practical items. Figure 3 illustrates the current
consumer spending in the US.
Figure 3: Current Consumer Spending in the US
Based on the above information, it is clear that the magic toothpaste is not dependent on
the economy and is an item that can be purchased by consumers regardless of issues such as
interest rates. Employment, or the lack of it might slightly affect the sales of the magic
CONSUMER BEHAVIOR/MARKET ANALYSIS REPORT
10
toothpaste, but the numbers are not significant enough to influence the overall profitability of the
product in the US market. A recent survey on the use of toothpaste in the US market revealed
that over 80% of Americans use toothpaste. The survey also showed that most Americans brush
their teeth one a day, and very few of them adhere to the rule of brushing their teeth three times
in a day. Figures 4 and 5 illustrate toothpaste usage and the frequency in America.
Figure 4: Toothpaste usage
Usage rate
Number of respondents
Percentage
Yes
281
80
No
19
20
Figure 5: Frequency of Brushing Teeth
The fact that consumers will purchase the magic toothpaste regardless of the current
economy is a great advantage for the company because it ensures annual sales without any
interruptions. It also allows the company to make accurate sales projections for the future
without having to consider factors such as inflation that may affect the sales of other products
and services. The only disadvantage to this trend is the issue of taxation whereby when taxes are
CONSUMER BEHAVIOR/MARKET ANALYSIS REPORT
11
increased on products and services consumer products such as toothpaste are not affected and
this may impact the manufacturing processes of the product.
Potential in Different Cultures
The magic toothpaste’s potential for future growth is apparent and the sales of the
product are bound to be high in the cosmopolitan cities of the world. The product may not be
popular in Africa as a whole but countries such as Egypt and South Africa show a lot of potential
with relation to purchase of the magic toothpaste. The reason for this is because the African
market does not regard dental hygiene as a primary concern, and for that reason will have no
reason to buy the magic toothpaste. However, the recent years have seen a change in the African
consumer buying behavior and this may be the game changer for the economy.
Figure 6 below illustrates the leading cultures for the magic toothpaste based on
consumer buying behavior of oral care products in different regions in the world. China
Germany and Japan show the highest potential after the US and manufacturers of the Magic
toothpaste can use this information to gauge whether the product will succeed in the different
cultures. Manufacturers of the Magic toothpaste can also use this information to shape their
product in such a way that it meets the needs of the different consumers in these cultures.
Examples include using the language of a particular culture on the product so that they can
understand the contents and value of purchasing the product. Marketing activities in these
countries can also be considered as a possible way of increasing the sales of the magic
toothpaste.
CONSUMER BEHAVIOR/MARKET ANALYSIS REPORT
12
Figure 6: Leading Markets in Oral care Products
Analysis of US Sub Cultures
With relation to ethnicity, all the ethnic groups in the US show potential for the purchase
of the magic toothpaste. However, Asian communities and Caucasian communities show a
higher potential than other ethnic communities with regards to the purchase of the magic
toothpaste. Men are more likely than women to purchase the magic toothpaste and this is because
surveys have shown that men are two times more likely to take care of their dental health than
women. Write an analysis of the U.S. subcultures that will desire your product and those that
CONSUMER BEHAVIOR/MARKET ANALYSIS REPORT
13
might not. As previously mentioned, people aged between 18 years and 35 years are most likely
to purchase the magic toothpaste. People in this group may purchase for themselves or for
another person e.g. a child. The Hindu religion will be more accepting of the magic toothpaste
owing to the herbal element of the toothpaste and the ingredients of the toothpaste.
Competition
To gain market share and attract consumer behavior decisions toward greater purchasing
of your product over competitors, a media strategy will be used (Slater et al, 2007). Media
strategy is a term used to define a marketing process that involves the identification of target
audience, and the classification of the different types of media to be used in the marketing
process. This concept is centered on influencing the behavior of the target markets towards the
purchase of products or services. Three media strategies have been identified for the promotion
of the magic toothpaste including advertising, direct response media and public relations.
Advertising has been identified as the first media strategy that will incorporate both print
and online media for the persuasion of audience to purchase the magic toothpaste. Advertising
activities that can be employed may include posters, online advertisements, as well as, print
media advertisements. Direct response media for the promotion of the magic toothpaste will
incorporate marketing for an immediate response from the target audience. This strategy will not
only create awareness of the product, it will also engage the audience in various activities during
the promotion of the product. Conclusively, public relations as a media strategy will incorporate
the promotion of goodwill between the production company and the target market.
CONSUMER BEHAVIOR/MARKET ANALYSIS REPORT
14
References
Harish, K. S. (2009): Consumer Motivation Perception. Marketing Mastermind, 9(12): 47-48.
Holbrook, M. B. (Ed.). (2002). Consumer value: a framework for analysis and research.
Routledge.
House Sumathi, S., & Saranavel, P. (2003): Marketing Research &Consumer Behavior, Vikas
publishing house: New Delhi The history of teeth cleaning. Retrieved from:
http://www.bbc.co.uk/dna/h2g2/A2818686
Slater, S. F., Hult, G. T. M., & Olson, E. M. (2007). On the importance of matching strategic
behavior and target market selection to business strategy in high-tech markets. Journal of
the Academy of Marketing Science, 35(1), 5-17.
Gallup Daily (2014). US Consumer Spending. Retrieved From:
http://www.gallup.com/poll/112723/gallup-daily-us-consumer-spending.aspx