Discuss about the:-
Based on the scenario below, you are required to write. In this report you must demonstrate an understanding and application of various consumer behaviour concepts and theories by analysing the facts gathered from the video and the survey, and present strategic recommendations. You will be required to incorporate recent peer reviewed literature in order to justify your proposed recommendations.
Imagine that you have just been employed by the company you analysed in your earlier assessments. You have recently learnt that the company’s customer loyalty has declined over the last year and that repeat purchases are at a historic low. You have now been asked to prepare a report outlining the issues you identified in your previous analyses, issues related to current marketing communications, and to provide at least three strategic recommendations to the board of directors, along with reasons for recommending further improvements, all of which must be based on scholarly sources.
Vodafone is a mobile product that is used across the world. The product was first made in the UK in 1985, and since then it has developed in other countries and continents. The headquarters for this product is in London. The product mainly operates in Europe, Africa, the Middle East and Asia Pacific. The good thing about the product is the equal opportunities are given to everyone regardless of the race, culture, disability, age, gender, nationality or religious belief (Purnell & Woo, 2017).
In Australia, the product is managed by a company called Vodafone Hutchison Australia (VHA). It was ranked 18th top company in Australia. The company deals with mobile telecommunications, mobile broadband, tablets, smartphones, mobile application development, mobile content development and mobile advertising. It is one of the largest cell phone service providers in Australia. It has more than 5.3 million customers. The product is used to provide mobile voice, text and data services (Saylor, 2012).
Vodafone has made communication easier especially in business settings as one can easily communicate with another person and get a response without meeting face to face. Whether one is using a tablet or a smartphone, one can transfer in the email to someone else without inconveniences (Purnell & Woo, 2017). One can use it to record information about a business contract instead of writing for easy retrieval. Therefore it has been able to save a lot in business.
Understanding what goes through the consumer's mind before they settle on their products s key in marketing. Getting to understand this process can help one develop effective marketing strategies that target the consumer. There are five steps involved in the decision-making process, and they include; customers identifying their needs, collecting information, evaluating alternatives, purchasing a product and post purchase evaluation. This decision is highly affected by demographic factors (Blythe, 2008).
Need identification:. This can also be called problem identification. The main thing that makes a consumer to buy a product is because something is missing that they need for satisfaction. People want to buy products as a solution to their problems. It is the marketer's responsibility to make sure the product is enticing to the consumers. The Vodafone customer loyalty has declined because the need or problem has not been made active to the customers (Haleblian et al., 2012, pp. 1037-1052).
Collecting information:. This comes in after a consumer has recognized the need for the product. A customer looks for more details about a product, and this can be externally or internally. Internally can be their experience with the product, while externally can be public sources like newspapers and internet advertisements. Vodafone has not done a lot of advertising and putting information about it to the public. Hence the customers reduce as time goes by.
Critical analysis of consumer behavior
Evaluating alternatives:. This comes after a consumer has gathered enough information about a product. The consumer now settles on a product according to their pocket, need or taste. The user looks for other available products with the same function. Vodafone unlike other phones like Samsung and iPhone has not developed new exciting features to keep itself on the top, for a consumer to know it is the best (Zhang, 2013).
Purchasing:. This goes hand-in-hand with the outlet selection. The customer might buy the product but where will the customer be buying the product when they need them. Can the customers be able to order the products online or do they have to visit a retailer physically? Vodafone has not considered these issues. Vodafone mobile phones are not readily available even on the internet (Dewey, 2007).
Post purchasing evaluation:. This is usually is a stage where the customer's analyses whether the product has fully satisfied their need. Most marketers do not remember to follow up the consumers and know how they perceive their products. The marketers should do this to build a robust and long-lasting relationship with the consumers something that Vodafone does not do for their customers.
Personal factors significantly affect consumers. Many variables affect different factors, and they include; occupation, economic status, age, lifestyle, and personality. Someone's occupation greatly influences their buying decisions because it is the nature of one's job that influences them to purchase an item. Occupation goes together with the economic condition because how much one earns from their position influences the buying tendency. People like different things according to their age. Lifestyle is how people like to maintain their status and image as some people like to associate with classy items while others it does not matter which item they have (Chacon & Mason, 2011, pp. 271-290). Finally, an individual personality trait and characteristics influence their buying behavior for what they love. Therefore, VHA has not captured all these factors to excite different kinds of consumers to by Vodafone.
The buyer behavior is influenced by motivation, perception, learning, beliefs, and attitudes. The marketer needs to identify their customers and the psychological factors affecting them. Motivation comes in when someone has a pressing need for something. That drive that someone has to purchase a product. Perception is how a customer thinks or perceives your product. Customers may need the same item but go for different brands. Learning is the experience one gets after using a product. Beliefs and attitude are the images and opinions consumers form towards a particular product. Vodafone customers have reduced because the company has not considered fully the psychological factors affecting customers buying (Yang & Carmon, 2010).
Factors affecting consumer behavior
Every individual has values they acquire from society and family that affects their purchase of items. In cultures, some subcultures determine how people buy their products. Religion, status, and gender highly influence buying. There are things that male sex cannot buy in certain cultures. State of people and religion makes them buy certain items and leave others out. Vodafone has not considered all these factors like gender where female like certain colors.
Customers have people they interact with, and they mostly ask them about a product. There are also laws and regulations of the society that they follow. Customers consider reference groups which can be primary or secondary before purchasing an item. Primary are those people that are close while secondary are people they rarely meet. Also, one's role in the society and the social status determine their purchasing of items. Vodafone has not carried out research on social factors hence affecting purchasing (Lynn & Pierre, 2012).
It is also known as Marcom, and it is how a company gets out its messages about a product to the customers. They are also all communications via the marketing mix. The Vodafone currently uses sponsorships, branding, direct marketing, and PR activities. This way, information gets to fewer people and therefore decline in customer loyalty. The Vodafone Company should, therefore, understand that the primary objective of marketing communication is to promote, inform, persuade and remind the customers of their product (Belch, 2012).
A marketing strategy is important for the business to continue running. Marketing strategies help attract customers and therefore effective competition in the market. The primary objective and aim of the marketing strategy are to ensure the products meet the customers' needs and the company can keep long-term relationships with the customers. The current marketing strategy of VHA is not flexible to respond to changes in customer's perceptions and demand. The VHA is not monitoring the implemented policy therefore not making any adjustments required maintain success. The company is not working efficiently to identify and communicate benefits of its Vodafone Mobile (Kotler et al., 2009).
The VHA should try their best to establish contact with their clients. Customers tend to remain committed to the brand if they feel the product suppliers or the company cares about them. The Vodafone Company should take advantage of the opportunities available to understand their customers personally so that they may know what they prefer and what they do not. For example, it should designate some representatives for individual clients. This way a good rapport will be created, and even the company can find out other opportunities for itself (Edelman & Singer, 2015, pp. 88-100).
VHA can implement other payment options to entice its customers. Instead of customers paying the whole amount at ones, there may be those willing to get a particular type of phone, but they cannot afford at ones. The company may decide to come up with a plan where the costs can be split for some months. This mostly will make people perceive it as cheap therefore attracting customers. More phones will be bought, and the customers will be happy. This will also lead to effective competition with other mobile companies like Samsung that do not have this type of option.
Having a quality product and making it better every time can help one have loyal customers. Vodafone products should be added more features that the competitors like Samsung and Apple do not have for it to earn more customer loyalty. The VHA can begin by targeting those using tablets by making other exclusive features then late come to other phones. This will not only increase the customer loyalty but will also make them be ahead of their competitors (Fill, 2013).
Vodafone should take advantage of social media to know their fans. These are people who talk about the positive part of Vodafone. When someone mentions Vodafone to their followers, they get to know that the product exists and therefore they should be appreciated by being acknowledged. This will motivate them knowing that the company appreciates what they do for it. These can be done through Facebook pages, and Twitter handles. The VHA can organize online contests and make people know the customer that won (Doyle, 2011).
The VHA should try to figure out what their customers want to have next. These keeps customers loyal to the product because of their will be improvements. The company can take the ideas it has to the social media platform for fans to make suggestions or comment, blogs and even emails (Baker, 2008, pp. 27). When it is done, the company can credit the ones that participated in the suggestions and comments. A customer's idea can make a company find a great opportunity. The company can offer phones, first access to the new features to motivate the customers.
It is important for a company to know the factors affecting their customer loyalty. The company should dig deep to how customers come up with their decision and factors influencing their choice and work on them. For clients to be loyal, the business should also be able to provide the quality products they are paying for. Customers need to know that the producer of the goods substantially values them and puts them first. Customer loyalty is a major factor that should not be ignored by any company as it can lead to growth or fall of the business.
Baker, Michael (2008). The Strategic Marketing Plan Audit. pp. 27. ISBN 1-902433-99-8.
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Chacon & Mason (2011). An Analysis of the Relationship between Passenger Loyalty and Consumer Buying Behavior for Network and Low-Cost Carriers. Transportation Journal, 50(3), pp. 271-290.
Dewey, John (2007). How we think. New York: Cosimo. ISBN 9781605200996.
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Edelman D. & Singer M. (2015). Competing on Customer Journeys. Harvard Business Review, 93(11), pp. 88-100
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Purnell, Newley & Woo, Stu (January 30, 2017). Vodafone in Talks to Merge Indian Unit With Idea Cellular, New York City: Wall Street Journal, https://www.wsj.com/articles/vodafone-in-talks-to-merge-indian-unit-with-idea-cellular-1485767434 retrieved on June 06, 2017
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Zhang, Dongli (2013). "The Revival of Vertical Integration: Strategic Choice and Performance Influences". Journal of Management and Strategy. 4 (1).
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