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Basics of Marketing - Kotler Philip

Chapter 5. Consumer markets and consumer buying behavior

Objectives

After reading this chapter, you should be able to:

1. Talk about the relationship between incentive marketing techniques and consumer response.

2. To name four basic factors influencing consumer behavior of consumers.

3. List the stages of the process of consumer acceptance of the purchase decision.

4. Describe the process of consumer perception of new products.

"Corfam" firm "DuPont" - an expensive commodity failure

The giant DuPont corporation, headquartered in Wilmington, Delaware, was confident that its new artificial leather "corf" for men's and women's shoes would be a success. "DuPont" began searching for a substitute back in the 30s, realizing that one day the natural skin would become scarce. In 1955, scientists of the firm successfully synthesized the material, called "korfam" and possessed the necessary properties of leather raw materials: permeability, strength, elasticity and durability. In 1958 a special pilot plant was built to produce this material in order to assess its consumers. Novelty was greeted by an enthusiastic reception from consumers, and in 1959, DuPont built a more powerful plant that began the production of Korfama in 1961. In total, the corporation contributed $ 25 million to the project.

17 leading women's footwear enterprises and 15 leading men's footwear enterprises were selected, who agreed to buy new material from Dupont and use it to produce elegant style shoes. Realizing that the "corf" has certain advantages over natural leather, such as higher durability and ease of care, DuPont has set a novelty for a high price. The material was to be used in the manufacture of expensive shoes, so that consumers would gain confidence in its high quality. In the market of inexpensive shoes, "DuPont" intended to go out with "korfam" later.

Products from the "Korfama" were first presented at the National Shoe Fair in 1963, and many retail shoe dealers gave orders to them. "DuPont" formed a special trade assistance team. Members of the brigade had to visit large shoe stores and teach sellers to sell footwear from "korfama". At the same time, the company created materials for advertising at points of sale, window dressing and conducted nationwide advertising for "korfama," which costed, at the initial stage, $ 2 million.

"DuPont" was very pleased with the results. In 1964, consumers purchased 1 million pairs of shoes from the "Corfam", in 1965 - 5 million, and in 1966 - 15 million pairs. But in 1967, the sale of footwear from the "Corfam" began to fall. What happened?

The level of repeat purchases was alarmingly low. "DuPont" did not analyze the consumer market of footwear and the behavior of the people buying shoes, and did not take into account a number of nuances in due time. For example:

1. Footwear from "Corfam" was advertised as products very durable and not requiring special care. But for buyers of expensive shoes, these two factors are not at all primary motives for choosing shoes or shoes.

2. "Corfam" was advertised as a material that - like natural skin - "breathes". But many of those who bought shoes from the "Korfama" considered it unusually warm.

3. "Corfam" was advertised as a material that does not stretch, which means that the shoes from it will always sit on the foot in the same way as it was sitting at the first fitting. However, many consumers still bought slightly shaking shoes in the hope that it is carried.

4. Consumers chose primarily a style, not material. They never so awakened an interest in "korfam", sharp enough to ask the seller to show shoes made of this material.

5. "Corfam" could have achieved much more success if it were used to make cheap home shoes. Buyers of high-quality footwear are increasingly inclined to purchase fashionable leather shoes and shoes imported from Italy and a number of other countries. In 1971, "DuPont" recognized the situation as hopeless and decided to stop the production of shoe material "korfam." This one of the most expensive in the history of commodity failures brought "Dupont" losses of $ 100 million.1

The history of DuPont's "corfam" suggests the existence of many factors that influence people's decision-making about what to buy. Buyer behavior is never simple. And nevertheless, to understand it is an extremely important task for the management of the marketing service within the framework of the marketing concept.

In this chapter, the dynamics of the consumer market will be examined in detail.

Consumer market - individuals and households that buy or otherwise acquire goods and services for personal consumption.

In 1981, the US consumer market included 230 million people, who annually consumed goods and services for a total of about 1.8 trillion. Dollars, i.е. On 7826 dollars in calculation on each man, each woman and each child. Each year this market increases its number by several million people, and the turnover by more than 100 billion dollars. This is one of the most profitable consumer markets in the world2.

Consumers differ greatly in age, level of income and education, a tendency to move and tastes. Market operators considered it expedient to separate different groups of consumers and create goods and services specifically designed to meet the needs of these groups. If the market segment turns out to be quite large, some firms may develop separate marketing programs for servicing this segment. Here are just two examples of isolated consumer groups.

Negro consumers. Twenty-eight million black Americans with a combined personal income of over $ 100 billion are an important group of consumers. According to a number of researchers, Negroes spend proportionally more white on clothes, personal care, household items, spirits and tobacco products and proportionally less - on medical care, food, transportation, education and utilities. To a lesser degree, the Negroes are less likely than the Whites to "seek out" purchases and are more likely to be regular buyers of lower-priced stores and stores closest to their homes.

Blacks more white listen to the radio, although less likely to listen to stations in the VHF band. Some companies develop special marketing programs for these consumers. They give advertising in the magazines "Ebony" and "Jet", attract black-haired performers to the commercials, create distinctly excellent products (for example, black cosmetics), packaging, and develop a special argument. At the same time, these firms recognize the presence in the black market of several sub-segments, each of which may require the development of a separate marketing approach3.

Adult young consumers. The structure of this market includes 30 million people aged 18 to 24 years. The market of adult young consumers is divided into three subgroups: college students, young single women, newlyweds. Adult young consumers spend a disproportionate amount on books, records, stereo equipment, cameras, fashionable clothes, hair dryers, personal hygiene products and toiletries. They are characterized by a weak degree of adherence to brands and an increased interest in new products. Young adults are an attractive market for several reasons: 1) they are receptive to the idea of ​​testing new products; 2) are more inclined to spend than to save money; 3) will be longer in the role of buyers4.

Similarly, other submarkets - older people5, women6, Americans of Spanish descent - can be explored to find out whether it would make sense (in terms of competitive struggle) to develop targeted marketing programs for each of them.