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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