Marketing Management & Research for Price and Specification

Question: Discuss about theMarketing Management Research for Price and Specification. Answer: Introduction As stated by East et al., (2016), the modern business organizations have become more and more consumer oriented. The behaviour of the consumers is changing regularly so it is essential for the organizations to evaluate the needs and wants of the consumers. However, the initial focus of the study has to be on basic human behaviour as consumer behaviour is a subset of the overall behaviour of human beings. Horner and Swarbrooke, (2016) defines consumer buying behaviour is the process of deciding product, place, time, price and specification before making a purchase decision. On the other hand, Frederiks, Stenner and Hobman, (2015) defines consumer behaviour as the behaviour where the consumer goes through different phases such as searching, buying, using, examining and disposing of services, ideas and products. This definition can be elaborated by stating that consumer behaviour is the study of evaluating the behaviour of the consumers spending their resources on making purchase decisions. Consumers can be distinguished in two types, one is organizational and other is personal consumer. Personal consumers purchase the products for household purposes and organizational consumers purchase products for their respective organizations. However, this study will strictly focus on the personal consumers and their respective buying behaviours. Consumer behaviour is one of the recent topics of discussion when compared to the other aspect of marketing. As stated by Foxall, (2014), the concepts of consumer behaviour are borrowed from scientific disciplines of different subjects such as sociology, psychology, anthropology, economics and social psychology. The development of marketing concept increased the significance of consumer behaviour in the modern theories of marketing. Marketing concept stated that it is essential for the organization to identify the needs and wants of the consumers in order to support their marketing plan which should be based on the emerging needs of the consumers. The market was focused on production in the initial phases of the 19th century which led the orientation to be towards the production. However, with the advent of marketing orientation, the concept of consumer behaviour was widely to gain competitive advantage in the market. Frederiks, Stenner and Hobman, (2015) stated that the sales and pr ofit of any firm is dependent on the buying behaviour of the consumers. Therefore, different models of human behaviour were developed to predict the buying behaviour of the consumers. Different models of consumer buying behaviour According to Siegel, (2016), identification of the different aspects of consumer behaviour is quite tough as the consumers are influenced by varying factors. The human beings are greatly affected by their psyche so purchase decision are driven by psyche of a person. However, the modern scenario has changed where big data can be used to identify the pattern in the buying behaviour and can be used to predict the possible behaviour of different consumers. As stated by Parment, (2013), the models of consumer behaviour are perceived as portrayal of incomplete human beings and these models are appropriate of different situations in the market. The models of consumer behaviour provide knowledge about the different aspect of purchasing decision. The four models of identifying the behaviour are Pavlovian learning model, Marshallian economic Model, Veblenian social-psychological model and Freudian psychoanalytical model. However, in this present study, the contrasting nature of Pavlovian learning model and Marshallian economic Model. The Marshallian economic model The Marshallian model states that the customers will buy the products that will provide them with maximum amount of satisfaction based on the relative price of the products and personal preferences. As stated by Boland, (2014), self-interest is the motivating factor for defining the respective actions of human beings. On the other hand, Sunley and Martin, (2017) states, that all actions taken by consumers are contemplated as they are taken by evaluating the pain and pleasure of making each of the decisions. Alfred Marshall was the pioneer of this economic model; he consolidated the neo classical and classical tradition which was aimed at realism in economics. This examined the impact of change on a single variable by keeping the other variables constant such as price. The assumptions made in such methods are simplified. In order to reach the highest level of realism, the provisional assumptions are examined to identify the consequences and made modifications to the assumptions. The m odern utility theory has been used to modify the assumptions and methods of the Marshallian theory. The theory states that utility is maximized by evaluating the felicific impact of the purchases. This theory is developed based on the economic aspect of the study but its implication in marketing applications is path breaking. There are different points of views in analyzing the rationale of behavioural science in identifying the value of the model. One of the views of this model is that the model is tautological which means that it is neither false nor true (Thrift Amin, 2017). This model is not informative as it only portrays the behaviour of the buyer acting in their self interest. Another view of the model provides the consumers with the logical norms necessary to be rational. The inference drawn from this is that the model is a normative model rather than being a descriptive model. The consumers will not perform economic analysis for their respective purchases and consumers are selective in choosing the economic theory. Therefore, the consumers will not use the principles of economics in choosing between different products having low cost. However, the consumers are expec ted to make an economic analysis to make a choice of high price products such as a car and a house. The next view suggest that complete description of consumer buying behaviour should include economic factors as economic factor operates in smaller or greater extent in all the sectors. The Marshallian model has proposed a few hypotheses which state that the sales of a product will be greater if the price of the product is low (Cahuc, Carcillo Zylberberg, 2014). The second hypothesis states that if the price of the substitute product is less than the price of the actual product then this will result in increase of the sales of the substitute product. The next hypothesis states that if the product is not inferior to the other products in the market, the sales will be higher considering the fact that the real income of the consumers are higher. The final hypothesis states that with increase in cost of promotion, there will be significant increase in the sales volumes. The above-mentioned hypothesis describes the average effect of the economic factor on the consumers and it has not made any attempt to classify all the individuals in order by calculating the economic influence on the purchase decision (Bs, 2014). Therefore, it can be seen from the theories of this model that the buying behaviour of the consumers cannot be explained by the economic factor as there are variations in purchasing behaviour due to contrasting situations and market conditions. Moreover, the fundamentals of the developing brand preferences and product preferences are ignored in this theory. This model can be used for evaluating the small portion of the psyche of the consumers. The Pavlovian learning model This is a psychological theory which was developed by a Russian psychologist and then named as the Pavlovian theory of learning. The initial experiment was conducted by ringing a bell every time before providing the dog with the food (Dayan Berridge, 2014). The outcome of the experiment was that the Pavlov was able to induce salivation within the dog just by ringing the bell without any food. Therefore, Pavlov was able to infer that the process of association is responsible of developing learning and the majority of the human behaviour has been similarly conditioned. Similar experiments were carried out by other experimental psychologists which used animals as a subject for the study. The experimental objective was exploration of different phenomenon such as forgetting, ability to discriminate and learning. This led to the development of the stimulus-response model in human behaviour which constitutes four central concepts such as cue, namely drive, reinforcements and response (Craske et al., 2014). According to the Pavlovian theory or it can be also called as classical conditioning; there is a deep connection between a true reflex reaction and stimulus. The central concepts of the Pavlovian theory are described below: Drive: In the learning model of Pavlov, the drive can also be represented as the motives or needs. This implies that human are driven by strong stimuli and it is responsible for activating actions within an individual. The psychologists have distinguished the different types of drives and they are learned and primary psychological drives. The basic individual factors are represented by the primary psychological drives. This will include factors such as thirst, hunger, pain, sex and cold. The learning factors are derived by using social factors such as cooperation, acquisitiveness and fear. Cue: The model states that a drive is general and specific configuration of cues impels the particular response in the study. The weaker stimuli within an individual and the environment are known as Cue. This will determine the place, time and cause of the response from the subject such an advertisement for Soft drink may stimulate a drive of thirst within an individual. The response of the individual will not only depend on the particular cue but will be affected by other cues depending upon the time of day and availability of substitute products suitable for quenching thirst. Response: The configuration to the cues results in reaction known as response and it has to be noted that same configuration of cues will not generate same drive or response within a different individual. The degree of rewarding experience is the reason for gaining same response from the same cues. Reinforcements: A response will be reinforced when the previous experience has been a rewarding experience for the consumer. Therefore, it can be assumed that same sets of response will be developed when cues having same configuration appears. However, this is a learned habit and if it is not reinforced, then there may be chances of extinguishing this habit. This is due to the fact that the strength of the habit decreases due to lack of reinforcements. However, there is basic difference between extinction and forgetting where learned associations become weak due to non use and not due to the deficiency of the reinforcements. The Pavlovian model cannot be considered as the complete representation of the consumer behaviour. This is due to the fact that there is omission of perception, subconscious influences and interpersonal influences. This model contributes to marketing by providing valid insights regarding advertising strategy and consumer behaviour. The model can be useful for the marketer when they are introducing a new brand into a highly competitive sector. The organizations will able to develop new attributes for the new brand by extinguishing the existing brand habits (Rescorla, 2014). However, the major challenge that the organizations will face is pursuing the consumers to try out the new brand by choosing between using weak and strong cues. A strong cue will consist of providing sample products to the loyal consumers which is an expensive option. However, it is the most effective and desired approach to target consumers that are loyal to the organization. The reinforcement components in the mo del will have to be acknowledged so that sufficient quality can be put into the brand to invoke positive experience. Moreover, it is essential to evaluate the most effective cues used by the leading brand in the global market. Advertising strategy is the second area where the Pavlovian Model can be used to gain insights and guidance. The model puts emphasis on using repetitive advertising strategy as single exposure will prove to be a weak cue. This will be unable to arouse sufficient consciousness within an individual to inspire their internal drive to make the purchase (Li McNally, 2014). There are two desirable effects to repetitive advertising where repetition is used to combat with forgetting and providing reinforcements due to the selective exposure of the consumers to advertisements after the product purchase. The model values provide guidance in marketing and advertising by highlighting valid insights about the various driving factors for the consumers. According to this theory, the organizations should identify the effective driving factors for the consumers so that they can pursue to the consumers to make purchase. Contrast between two different models As stated by Baumeister et al., (2017), the economic model and the learning model have been developed based different principles and none of the models have been able to completely describe the buying behaviour of the consumers. The economic model is based on the concept of marginal utility where the consumer will buy a product having certain sum of money if the product will yield maximum amount of benefit. On the other hand, the learning model is based on the ability of the consumers to forget, learn and discriminate where the organization can invoke a drive within them by using driving factors that will have different response on the stimuli of the consumers. Mandel et al., (2017) opined that economic model has examined and explained the buying behaviour of the consumers form the economic perspective where the consumers are judged based on their value seeking ability. Therefore, according to the economic model the economic trends will have a deep impact on the buying behaviour of the consumers. Moreover, the buying pattern of the consumers are affected by the surrounding environment. However, this model has not taken into account the irrationality of the consumers. The consumers are not rational all the time and thats why the consumers do not always go for the products with the maximum value. There are multiple occasions where the consumers defy the economic model and its principles. The learning model comes into play at such conditions, the learning is a psychological model which is based on the psyche of the consumers. Therefore, consumers can be made to learn behaviours which will drive them to buy particular product (Rezvani, Jansson Bengtsson, 2017). Reinforcing the consumers with driving factors is an effective way of driving the sales of an organization. However, this model is incomplete where learning is not the only condition in the buying process. Therefore, the decision making of the consumers are other determinants. The model has taken into consideration other determinants such as personality, perception, attitudes and group influences. Therefore, both these models explained in the study are incomplete and none of them can completely describe the buying behaviour of the consumers. These two models are contrasting as one assumes that consumers are rational where the other model assumes that consumers learn from themselves and others. Therefore, according to the economic model, the consumers should be provided with value propositions. Moreover, the different promotional and sales schemes will have a deep impact on the buying behaviour of the consumers based on this model (Lang Rettenmeier, 2017). On the contrary, the consumers will buy rewarding products and the products should have positive reinforcements. Therefore, strategies like product demonstration, free trails, sales and testing of the products will have a different impact on the buying behaviour of the consumers. however, when we analyse the suggested strategies it can be seen that these strategies have been used by different companies in different sectors. Therefore, it can be said that the industry characteristics and the product specifications are also important factors in deciding the accurate model to be used. The marketing measures are used by different companies based on their strategic goal so it can be said that these models are still very much effective. Therefore, there are companies that choose competitive pricing as a strategy to gain competitive advantage in the market. These strategies are effectively used by the companies in a saturated market for example, the companies in the United Kingdom retail industry. The companies in the retail sector in the United Kingdom compete by developing competitive pricing due to the intense competition and the consumers have extremely sensitive to price. Therefore, the organizations use sales promotions and discounts to increase their short-term sales. However, this strategy cannot be used on along term basis as it is impossible for companies to provide discounts and sales throughout the year. On the other hand, the psychological model is more suitable for the companies in the automobile industry. This is because of the fact that the companies f ocus on the usage of the product and the level of satisfaction of the consumers. This can also be applicable to the fashion industry where testing and trails are common phenomenon for the consumers. This is because of the reinforcements can be easily done by providing trails of the latest products. These will enable to create a learning with the consumers. Therefore, this enable to influence the driving factors within the customers. Therefore, the companies trying to gain loyal consumers use price sensitive strategies and develop value propositions among consumers that are more rational. On the other hand, the companies will be focusing on personal experience to consumers in such markets where the satisfaction level of the consumers are the main factor for retaining the consumers. In the context of the modern business scenario, with the advent of big data and statistical tools it is easier to identify the behaviour of the consumers. The trends in the buying behaviour of the consumers can be used by the companies to develop effective strategy based on the model they have developed. Therefore, differentiating between rational consumers and the consumers looking for personal experience will have to be evaluated and identified in order to maintain sustainability and gain competitive advantage in the market. Conclusion Thus, it can be concluded from the report that the two models of consumer behaviour are incomplete models but they have a practical implication in marketing where the companies in the market can analyse the consumers to develop effective marketing strategies which will be able to grab the attention of the majority of the target consumers in the market. Moreover, economic model focuses on utility while the learning model focuses on reinforcements. However, both these models are significantly important if used effectively by the companies. References Baumeister, R. F., Clark, C. J., Kim, J., Lau, S. 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