This assignment will be addressing the problems faced by the company operating in the highly competitive sportswear market in britain. The issues presented in the assignment will be discussed in relation with the changing nature of consumer behaviour. Firstly, it is essential to analyse the current position of the company the following.
Sole-Run is a company operating in sportswear market in britain specialising in football boots. It is stated that the firm has entered the sportswear market at a quite late stage of the market development which may be assumed to be at a stage where in fact the market was maturing with high competition from the marketplace leaders like Adidas and Nike. However, Sole-Run could capture 12% of the marketplace share despite not having either the production capacity or the financial budgets to contend with such market leaders.
On the other hand, it is stated that fashionable trainers remain as the greatest single part of the sports footwear market. Although it was found that customers valued comfort and didn't want to pay high price research findings also showed that low-to medium priced trainers provided the same levels of comfort as high priced trainers where paying a higher price for trainers didn't ensure a higher quality or an increased comfortableness.
Sole-Run is currently facing difficulties in increasing its sales despite the high potential market for trainers as consumers are buying trainers as a bit of fashionable clothing as well as for sports especially one of the teenagers and older people with high disposable income.
SPORTS CONSUMER BEHAVIOUR
In order to recognize as how Sole-Run can influence the buyer purchase it is vital to understand the consumer behaviour of this particular market.
According to Kotler and Armstrong (2010) consumer buying behaviour is the individual purchasing or consuming decision of a person or household and whoever buys goods and services for personal consumption.
Sports consumer behaviour is the process involved when individuals select, purchase, use, and dispose of sport related products and services to gratify needs and receive benefits (Funk, 2008). This process is created by the desire to get sports consumption experiences that provides benefits and gratify needs (Funk, 2008).
TASK 1- BUYER INFLUENCE AND PURCHASING PROCESS
1. 1 WHAT'S BUYER INFLUENCE?
Buyer influences will affect the amount of motivation in consumers to make purchasing decisions. On the other hand the amount of involvement in sports will also affect the decision making. It's important for Sole-Rune to understand the consumers buying behaviour when designing a online marketing strategy for its sports-fashion wear trainers or any other sports related products.
Involvement involves represent a state of motivation with regard to something, a task, or an object (Rothschild, 1984). This state of motivation reflects the amount of arousal, interest, or drive evoked by a particular sports stimuli or situation that influences consumer behaviour (Mitchelle, 1979).
1. 2. INTERNAL INFLUENCES
Generally consumer behaviour can be influenced by factors such as motivation, learning and perception that happen to be known as internal factors. Also called as personal factors these gives the ability for the consumer to directly benefit from the product.
1. 3. EXTERNAL INFLUENCES
Social norms are a prominent external factor influencing consumer buyer behaviour. As described by Kotler and Armstrong (2010) consumer purchases are influenced by forces such as social, cultural, individual and psychological.
Cultural characteristics consists of the group of basic values, perceptions, wants and behaviours learned by a person from being truly a member of a society. On this context Sole-Run will have to identify the cultural characteristics of the British based consumers who tend to be highly fashion conscious. Social characteristics on the other hand includes social factors such as the targeted consumer's regards to small groups, family and social roles. Individual characteristics can be regarded as the consumers' age, financial situations and occupation. Psychological factors consist of the motivation, perception and beliefs and attitudes of the targeted potential consumers.
Here it is evident that the targeted consumers for the sports-fashion trainers result from social groups which contain individual characters of fashion conscious teenagers and old consumers who have high disposable income.
1. 4. MARKETING ACTIVITIES TO AFFECT THE POTENTIAL BUYER INFLUENCES
According to the Chartered Institute of Marketing (CIM), marketing can be explained as a managerial process whereby you indentify, anticipate and meet customer needs and wants for a profit.
In order to create marketing strategies that will affect potential buyer influences, it is vital that Sole-Run have an improved understanding on the consumers' decision making as this will not only increase consumer demand but will also help sustain its demand. While Sole-Run should identify properly its market segments in order to design targeted marketing activities, it is stated that the teenagers and the elderly with high disposable income will be the highest consumer purchasers in the sports-fashion trainers market. Alternatively, additionally it is found through research that consumers do not wish to pay high charges for trainers while seeking for comfort.
As it is said that Sole-Run will not possess adequate financial budgets, it is evident that Sole-Run cannot invest on large scale nationwide marketing activities by advertising on mass media such as tv and on radio to influence potential buyers.
The starting point of Sole-Run can be to influence the potential consumers by providing information about its sports-fashion wear trainers comprising the marketing mix quite simply, the product, price, host to availability and promotions. These details will lead the potential observable buyers to respond to product choice, brand choice, dealer choice, purchasing timing and amount.
It is said that sports events play a significant role in a community's marketing and branding strategy (Higham & Hinch, 2003). Hence Sole-Run can target more local or regional sports events which can be less expensive in conditions of marketing budget in comparison to national events.
Sole-Run can have special promotions in its outlets for the first time buyers. Also, insurance agencies direct marketing campaigns online which is less expensive and impressive compared to tv set or radio advertisement, the business can simply target the technology savvy teenagers such as by uploading videos on YouTube, and creating pages on popular social networking sites such as Facebook, Twitter encouraging them to comment and give their opinions on the trainers perhaps with special discount codes online which the potential buyers can redeem when purchasing in-store. Alternatively Sole-Run will be encouraging interactive internet marketing where consumers begins conversation online about the Sole-Run trainers creating positive network influence for the company amongst others targeted consumers.
On the other hand, in order to focus on the older consumers who has high disposable income, Sole-Run can advertise on sports related magazines and financial newspapers that happen to be read by these targeted consumers and sponsor events created by sports clubs where these potential consumers can be found.
TASK 2 - ROGER'S DIFFUSION CURVE AND ADOPTION MODEL
2. 1. ROGER'S DIFFUSION CURVE-
Predicting buyer behaviour becomes particularly important with innovations and is particularly important in decisions concerning new product developments. Rogers (1962) attempted differentiate consumers according to their response to ground breaking products and determined five types of consumers based on the idea that certain individuals are inevitably more open to adaptation than others. These consumers were categorised as follows;
1. Innovators- brave consumers pulling the change and are very important communication mechanisms
2. Early adopters - repectable people, judgment leaders, try new ideas however in a careful way than innovators.
3. Early majority - thoughtful people, careful but accept change more quickly than average people do
4. Late majority- sceptic people who'll use new ideas and products only when almost all is using
5. Laggards - traditional people who wish to adhere to the old ways and are critical about new ideas ad is only going to accept it if the new idea has become mainstream or even tradition.
The research focus of diffusion has five elements that are;
1. characteristics of your innovation which may influence its adoption
2. decision making process that occurs when individuals consider to look at a fresh idea, product or practice
3. characteristics of individuals that make them more likely to adopt and innovation
4. consequences for individuals and society for adopting an innovation and
5. communication channels found in the adoption process (Kotler, 2010)
According to this theory, the innovators and early majority comprise around 15% of the population and are thought to be important as view leaders in the diffusion curve. Another important implication which this theory provides is that it's useless of convincing the mass market in one go at the beginning spending heavily on marketing and advertising. Thus the implication this provides for organizations like Sole-Run is to establish the characteristics of the first two types of groups quite simply, the innovators and the early adopters also to focus the marketing communication accordingly as according to the process there's always some consumers who want to take risk and buy the services. This model shows the diffusion of new products as a chain reaction on influence between pioneering consumers and the mass market.
2. 2. ADOPTION PROCESS MODEL -
The adoption model which is also called the AIETA model will help Sole-Run to recognize the new product adoption procedure for consumers within the sports-fashion trainer market. This model suggests on how to help consumers undertake the stages of purchasing especially new products. Adoption normally in this context pertains to the new products. Kotler and Armstrong (2010) defined the adoption process as the mental process though which an individual passes from first learning about an innovation to final adoption.
Consumers before purchasing new products will go through a five stage process which if successful will lead to adoption of products where adoption is the decision by an individual consumer to become regular user of the product.
1. Attention - also known as awareness is where in fact the consumer becomes alert to the new product but lacks information about any of it.
2. Interest - in this stage the buyer will shop around about the new product
3. Evaluation - with the information the consumer received the consumer will consider if to try the product
4. Trial - here the consumer tries the product for the very first time to improve the estimate of its value
5. Adoption - finally the buyer decides to make full and regular use of the new product
According to this model, adoption comes at the end of the process through which an individual consumer may go from initial awareness through to adoption of which point the consumer becomes a regular user of the merchandise. Here, Sole-Run should identify the merchandise characteristics that will affect the readiness of the targeted potential consumers to adopt the product quite simply the initial characteristics of its sports-fashions trainers. The product characteristics would include relative advantage, compatibility, complexity, divisibility, and communicability. On the other hand the product characteristics wouldn't normally include the other aspects of the marketing mix such as price and promotions though these could also affect the rate of consumer adoption.
TASK 3- RAMIFICATIONS OF COMMUNICATION TO INFLUENCE FIRST BUYERS
It is essential that Sole-Run pleases the original buyers of its trainers by providing right information with effective communication that will lead to produce a purchase as they'll in-turn influence many subsequent customers' brand choices. This can be especially true one of the targeted market of teenagers due to network externalities.
3. 1. YOUR CHOICE MAKING PROCESS
Before investing in a product, consumers generally proceed through an activity called the decision making process which must be discovered by Sole-Run to be able to create a better communication strategy especially for the very first time buyers as the decision making process can be influenced by the non-public, social, cultural and psychological factors as well as by the marketing mix variables and situational factors.
1. Need recognition - this is the first stage of the buyer decision process where in fact the consumers recognise a need or identify issues. This is triggered by internal or external stimuli.
2. Seek out information - in this stage the buyer is aroused to search for more information where in fact the consumers will tend to obtain information from various sources such as personal through relatives and buddies, commercial advertisements, media, and experiential sources.
3. Evaluation of alternatives - here the consumers use information gathered to judge between alternative brands in one of the chosen ones.
4. Purchase decision - the consumers decisions about which brand to buy will be made at theis stage. However, two factors can come in-between the purchase intention and the actual purchase decision. The first being the attitude of others such as friends and family, and the other being unexpected situational factors such as sudden monetary downturns.
5. Post purchase evaluation - the ultimate stage of the customer decision process where consumers take further action after purchase based on their satisfaction or dissatisfaction. If the product is not up to the expected standards of the buyer than cognitive dissonance may occur.
The decision making process demonstrates the buying process clearly starts long before the actual purchase and continues long after that where Sole-Run will need to focus on the whole buying process rather than concentrating on just the purchasing decision when coming up with communication strategies to influence first time buyers.
3. 2. THE DECISION MAKING UNIT
On the other hand, many decisions consumers make had been either made for example in the case of youngsters or influenced by one or more parties. This is collectively known as your choice making unit which consist of 5 different roles of people consisting of an initiator, influencer, decider, financier, buyer and user.
Initiators are those who initiate the idea of making the purchasing decision where influencers will be the people who, for their expertise, set the specification of what's to be bought. Alternatively, deciders are those who make the actual buying decision with financiers making the purchase, and buyers processing the purchase orders and users actually using the product bought. While there can be few people playing different roles in the buyer process as well as none among a specific consumer, it is essential that Sole-Run communicate the right information and provides the expected value to the consumers who are first time buyers.
3. 3. INTEGRATED MARKETING COMMUNICATION
As discovered above the various varieties of information that are had a need to influence the very first time buyers as well as the people who will affect the purchasing decision of consumers, Sole-Run can adopt a intergrated marketing communication strategy where through different communication channels the business can effectively target each personnel mixed up in decision making unit while providing the info for the decision making procedure for the targeted consumers. Thus, this marketing communication strategy allows Sole-Run to get individual personalised and tailor made communication among the list of targeted consumer groups.
TASK 4- CUSTOMER ATTRACTION AND CUSTOMER LOYALTY
4. 1. DIFFICULTIES ASSOCIATED WITH CUSTOMERS DEFECTING FROM ANOTHER BRAND TOWARDS THE SOLE-RUN BRAND
Sole-Run should take into account the kind of buying behaviour of its targeted market as this highly influences the marketing mix decisions. On the other hand the buyer behaviour differs greatly for different types of products and services. The psychological theories of buyer behaviour differentiate consumer behaviour emphasising the surroundings which is the behavioural approach and the consumer behaviour emphasising mental processes called as cognitive approach. Mainly, there are four types of shopping for behaviour predicated on a buyer's involvement and the perceived dissimilarities among brands.
1. Complex buying is where in fact the degree of involvement is high with high amount of perceived difference among brands. While this behaviour is tend to be cognitive in nature the involvement comes from uncertainty of product quality, high price, and personal factors such as self image, value and needs.
2. Dissonance buying which saturated in involvement and low in perceived brand difference tends to be cognitive and behavioural in nature mainly associated with risky, infrequent and expensive purchasing.
3. Habitual buying has a minimal consumer involvement with little brand difference and less price sensitive. This is commonly more of behavioural.
4. Variety seeking which is more cognitive has a low involvement purchase but factor in brands. In this example consumers, if curious about a fresh brand or dissatisfied with the merchandise choice, will engage in switching to another brand easily.
The distinctions of buyer behaviour will largely think about the info and communication needs of potential buyers and the best means, in each case, of meeting these needs with respect to communicated messages and media by Sole-Run.
According to the types of buyer behaviour, it could be said that purchases in relation to sports-fashion wear is commonly more variety seeking where customer are highly mounted on a brand's perceived difference. Thus in order to get consumers using brands such as Nike or Adidas to acquire Sole-Run, the company should create a unique selling proposition targeting comfort of the trainers and positioning as a brand which gives the same comfort and ease as the premium brands but for a much good deal. This is done through means of proper marketing communication strategies which can only help consumers differentiate the brand as opposed to competitor brands employing more cognitive methods to its advertising. Hence, Sole-Run should also draw strategies to retain these customers by offering better service for the worthiness.
4. 2. RETRAINING CUSTOMERS THROUGH CUSTOMER LOYALTY
After successfully attracting customers to acquire Sole-Run's sports-fashion trainers, the company also needs to then put efforts for retraining the clients with differentiated marketing strategies.
Sole-Run can develop loyal customers if the business is able to successfully influence the variety seeking consumers on the market to get its brand also to become habitual buyers by positioning itself in the consumers mind through method of effective marketing communication as then your customers will addicted to buy trainers from the brand Sole-Run. This is done through marketing strategies that passively communicates information as they watch television or surf the internet where unconscious advertising repetition will generate familiarity, which often translates into a brandname purchase when the consumer in deciding which brand to buy (Ali & Gomez, 2009). As this is pure behavioural decision making, Sole-Run can focus its advertising on classical conditioning in which the potential buyers can identify the merchandise by an individual symbol repeatedly mounted on it (Ali & Gomez, 2009). Thus, this can not only help Sole-Run to increase sales from its loyal consumers but will also help to gain market share in the major market.
In order to retrain its loyal customers Sole Run should mainly take part in customer relationship marketing as research has discovered that it is five times costlier to attract a new customer than maintaining an existing customer and loyal customers mean repeat purchases. Thus loyal customers are a robust source of marketing the business's brand identity through tips and word of mouth especially within the mark market of teenagers creating positive impact of the brand Sole-Run. Although relationship marketing does not correspond to a particular set of techniques it can emphasise the necessity to create a continuous, strong and mutually beneficial relationship between the buyers and Sole-Run which is maintained even in periods that any purchase is not in the process.
Further, through loyalty marketing, Sole-Run may also greatly increase customers' life time value over time as it is said that especially teenagers purchase trainers to complement their clothing and outfits and if indeed they become habitual buyers of Sole-Run they'll be adhere to the brand throughout their life as somebody.
It was determined that although Sole-Run entered the sportswear market at a later stage, there is a high market potential in the sports-fashion trainers with the increase of purchase by teenagers and consumers with high disposable income. Hence it is recommended that in order to increase its market share in the highly competitive industry, Sole-Run also needs to target the sports-fashion trainers market with a right marketing and communication strategy. Given the study findings that consumers do not desire to pay premium charges for trainers, Sole-Run can position its trainers as providing the same comfort level the consumers expect for a lesser price than of the market leaders. This can in-turn help Sole-Run not only to increase its sales in the trainers but also its overall market share in the industry by capturing the greatest market in sportswear.
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