Consumer Behavior Role in Global Business

What is consumer behavior? What is the importance of consumer behavior within the framework of marketing? How have competitive marketing techniques adapted to the increasing sophistication of consumers?

Different marketing scholars have offered diverse definitions to the phrase consumer behavior. However, the most accepted definition according to Schiffman and Kanuk (2007) is that the term consumer behavior refers to the displayed behaviors of consumers which is depicted as they dispose, evaluate, use, purchase and search for services and products which consumers expect would satiate their esteemed needs.

Quite often, the study of consumer behaviours has proved to be an imperative facet of international marketing. Within the marketing framework, consumers’ behaviours play a significant role as they help marketers in relating the services and products that attract them, their responses to diverse kinds of media utilized by organizations and assist in guiding the companies’ efforts towards the provision of commodities that meet the consumers’ demands.

Despite the increased level of consumers’ sophistication, organizations have adopted competitive techniques to adapt to such sophistications. For instance, most of the marketing techniques are geared towards satisfying the consumers’ behaviours.

In reality, the adopted competitive marketing techniques tend to consider consumers as individual entities; they look at the communication strategies, consumers’ attitudes, perceptions, personalities, motivations and consumers as groups that are formed within their respective cultural and social settings. The techniques are directed towards the existing subcultures, culture, social class, family and the customers’ reference groups (Schiffman & Kanuk, 2007).

Meeting the Consumers’ Demands

Basically, the commodity markets are immensely controlled by consumers and not the organizations. From the product and service marketing perspectives, it appears that all sorts of marketers yearn to lure and drive consumers to purchase their organizations products. For example, rather than deciding what to offer in the markets, marketers are forced to study the markets in order to be familiarize themselves with services and products that are of higher demands (Blythe, 2008).

Other than providing products and services that companies would wish to offer to the clients, the consumers dictate the kinds of commodities that they wish to be peddled to them. Organizations are actually unable to bring or force consumers to purchase their commodities. Instead, consumers decide on what organizations must produce in order to remain competitive in the global arena.

Therefore, failure to meet the consumers’ demands through offering commodities that they desire would make an organization to go out of the market. Procter and Gamble Company chief executive once quoted that the consumers have the market powers.

The influence that consumers have in the market requires that organizations have to adopt the grass root or bottom-up marketing tactics and abandon the top-down marketing approaches. However, this materializes to be rather costly as organizations have to incur additional expenses while conducting marketing and market surveys to meet the consumers’ needs (Blythe, 2008).

Consumer Behavior

The three aspect of my lifestyle that are considered to be different from those of my parents lifestyles are nutrition, fashion and social class or reference group. When compared to my parents’ lifestyle, I give much preference to the reference group when making product or service purchases. I always prefer buying commodities that would make me to be associated to celebrities or a distinctive social class.

However, the parents are usually inclined to the cultural and social settings when making their commodity purchases (Schultz & Bailey, 2000). Their tastes for fashion are not up to date and they would always wish to keep their traditions. Besides, my parents’ dietary is mainly comprised of junky foods while my diet is mainly comprised of light but expensive foods.

When products and services are being marketed, most commodities that fall under my category are associated with particular celebrities. Nevertheless, organizations that market my parents products adopt strategies that are meant to lure and drive old people to buy family products.

That is, different organizations tend to adopt marketing strategies that suit particular individuals and groups (Schultz & Bailey, 2000). There are marketing strategies that are intended to market products that would make youngsters like me to buy products and those intended to lure old people.

Internationalization of Businesses

The ways businesses are undertaken around the world are totally different. It is not only the way they are being conducted that is different but also even the way the products are perceived. Therefore, there are several factors that determine the internationalization of a particular business.

Besides meeting the asset threshold that can sustain the business in the international market, the business must also be in a position of producing goods or services that are acceptable and competitive in the international market (Hill, 2008). In most cases the commodities must cut across cultures to successfully compete in the international market.

The business must develop and take advantage of competencies that will enable it have a competitive advantage. Competencies can be achieved through the use of technological knowhow and being innovative. It is now a known fact that organizations that are technologically ahead and innovative have competitive advantage over their competitors (Hill, 2008). Therefore, technological competencies, innovativeness, managerial and financial competencies must be achieved for the firm to be successful in the international market.

Managerial competencies means that the firm must put in place structures that support its internationalization. Moreover, the organization must adopt values that go beyond the country of its origin. In other words, the organization must adopt international practices that will enable it operations in diverse global cultures. A better knowledge of the global culture in connection to business practices is vital for the business to enter and remain competitive in various foreign markets (Hill, 2008).

Moreover, understanding the way different cultures would perceive the business and its products are necessary for its success. Therefore the organization must take cognizant of cultures and their form of ethics and adjust accordingly to the environmental factors to be successful internationally.

Globalization has significantly progressed in the last decade and the frequency with which firms go global is ever increasing. The increasing trend has been facilitated by the modern developments in the information technology, transportation, improved legal infrastructures, wider political scope and open markets to international trade and finance (Stonehouse & Campbell, 2004).

Included in the current wave of globalization are the efforts by most firms to broaden their geographical reach for their products. Multinational enterprises that control or own production or service facilities in other countries are characterized by trans-nationality that would be impossible without the facilitating character of globalization.

Globalization has led to the push for more liberalized trade policies and homogenous business ethics. Businesses around the world are pushing for these trade policies so as to remain relevant and competitive. Contrary to the benefits of globalizations that are being experienced allover, there have been increased uncertainties, demographic changes and a push for diversity that has resulted in business cultures that are less homogenous and increasing being competitive.

Due to increased competitiveness, global markets call for new forms of management and development of competencies such as supply chain management that will enable the firm remain relevant in the global markets (Stonehouse & Campbell, 2004). Proper management of supply chains will enable firms forge long-term relationships through coordinating value added activities that will benefit the global clients. New globalization trends drive firms to develop such kind of competencies that add more value to their products.

References

Blythe, J. (2008). Consumer behavior. London: Thomson Learning.

Hill, C. W. (2008). International business. London, UK: McGraw-Hill/Irwin.

Schiffman, L. G. & Kanuk, L. L. (2007). Consumer behavior. Upper Saddle River, NJ: Pearson Prentice Hall.

Schultz, D. E. & Bailey, S. E. (2000). Customer/brand loyalty in an interactive marketplace. Journal of Advertising Research, 40 (3), 41-52.

Stonehouse, G. & Campbell, D. (2004). Global and transnational business: Strategy and management. Sudbury, MA: John Wiley & Sons.