Understanding consumer behaviour basics is an essential element in the development of customer relations management (Huju J, Dammrich T, 2021) PART 1/3

Part 3/3

Kindly read Part 2 from last week before continuing with part 3

Some General Notes

Today’s consumer behaviour research recognises that without thorough knowledge about the consumers’ behaviour, marketing cannot be successful. From a producer’s point of view, marketing can be deemed successful if it results in a positive decision of the consumer.  In a company’s marketing plan, consumers have to be segmented according to the demographic and psychographic aspects.  The marketer needs to define consumer segmentation according to various variables. The variables contain e.g. similar product needs, the size of the segment and accessibility to the segment. The demographic segments would contain age, gender, family structure, income, ethnicity and geography. The psychographic aspects consist of things like personality and taste.

The rapid globalization has brought big changes especially in the behaviour of the urban middle class. In general terms, the number of internationally operating marketers has grown exponentially. Their challenge is to apply their international marketing into local circumstances.  In many cases this has proven to be challenging.  Environmental issues such as re-cycling and sustainability have become a major topic.  By purchasing environmentally friendly products a consumer wants to make a statement.  Some companies or products are boycotted because of varying values.  There are critics who divide the postmodern consumer in those being critical and creative and those who are passive and entertainment-seeking.

Key findings

Individual purchase can add value to a consumer’s life and value-based thinking is important. Consumers can get committed to products or brands through their own values or needs and also through effective loyalty programs. Beliefs and intentions form a consumer’s attitude and the consistency between the elements is important. The role of personality cannot be underestimated. In drafting the marketing plans the issues of personality variables are crucial. There is ample evidence that groups have an influence on an individual’s buying behaviour. Cultures and sub-cultures are considered to be the most important single factor in understanding consumer behaviour. One has to note though that having certain cultural background does not necessarily mean unified behavioural patterns.

The buying process is affected by a multitude of stimuli. Mood, time, senses, available information and whole process, which can be rather complex play an important role. The provided information (=communication) plays a vital role in the attempt of affecting the consumer.

The rapid globalization has brought many new challenges to marketers. Consumer segmentation needs to take local circumstances into account.  Additionally, new consumer segments with individual needs and habits keep popping up.  To follow up this rapid development marketers need to engage highly developed and large databases and knowledge of the methods to effectively use them.

  1. The Real Life

A boat dealer in a coastal city in western Finland has just sold a new aluminium boat to a new customer.  A very typical boat in this country.  5,1 m in length, center console and with a 50 hp outboard engine.  With some goodies, like a plotter and a trailer the package price totalled 25.300 €.

This customer has a summer house, one of some 30.000 summer houses in the archipelago of the area.  He needs 45 minutes to get to the summer house from the boat club in the city where he has a berth. He works in an IT company, has a wife and a 13-yearold son.  The recently bought boat is his second boat.  When the boat leaves the dealer’s premises, the dealer would typically know the customer’s name and address (and that for warranty purposes) and maybe has an idea where the boat will be used.

Now this dealership has a clever owner who knows marketing.  He wants to turn his two sales guys into sherlockholmes-types with some basic instincts for knowledge gathering. He does not equip the sales guys with a magnifying glass, pipe and macintosh but simply with a laptop and a smartphone.  In the winter months in this country the traffic in the boat showrooms is really not all that high so there is ample time for research.

So, the guys get to work. They search the Internet, Facebook, Instagram, LinkedIn, TikTok and all other available social media. They also look into Google Search and other search engines.  Within a couple of hours, the guys know where the customer works, that he plays golf, is member of a Rotary Club and also know the island where he has his summer house.

This information is publicly available but because of the EU General Data Protection Regulation they have be careful how this information is stored and used.

So, come early spring the guys set up a half-a-day presentation in the boat club. They bring 3 boats of various types. The boat club gets a small compensation.  A few people show up but the seed is already planted because the “jetty parliament” as we call it, has already discussed this new boat. This is one of the social groups the original customer belongs to.  The boat owner in this case will also be an opinion leader.  As a result, the dealer gets a few good leads.

The same is repeated at his golf club. This time just when the season starts, the three boats are trailered to the club for an afternoon. The club again gets a small compensation, maybe the dealer sponsors coffee and advertises the event so the club gets more traffic in their restaurant. Golfers are often boaters in this country too so they can get motivated when seeing the boats in their other social group. Also, the learning process of this product has started.

This all leads to, that the dealer is invited one Tuesday evening to talk about boating in the original customer’s Rotary Club. The Rotary Clubs always have someone to talk about various themes.  He may again sponsor a few drinks but the club members are being subjected to attitudes through the marketing messages and the commitment process can also slowly start.

For Christmas the original boat buyer, his wife and his son will get floating key rings.  Not a big thing but this is carefully stored in their memories. 

These are just a couple of everyday life examples on how the psychological processes work and how we need to be able to penetrate into the surroundings of the potential customers.  The extra work for any boat dealer may feel like too much in the beginning.  At the end of the day this can turn into routine and through that increase the input-output result by order of magnitude.

And come the boat show time the promising leads will visit you and more deals are to be expected.

Authors:
Dr Jouko Huju DBA, GMBA Finland
Dr Thomas Dammrich DBA, GMBA USA

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Disclaimer: Global Marine Business Advisors and its associated website www.gmba.blue are not registered legal entities. GMBA is a network of independent marine industry advisors. In all articles the opinions expressed are those of the author and does not necessarily reflect those of GMBA