Customer And Market Dynamics Marketing Essay

Tea is the UK ‘s favorite drink with 165 million cups consumed on a day-to-day footing ( UK Tea Council, 2013 ) with an off-trade market value in 2011 of GBP 897 million ( Euromonitor International, 2012 ) . Statistically, doing up the population of 63.2 million ( Office for National Statistics, 2011 ) , a Briton consumes about 3 cups a twenty-four hours.

The Marketing Magazine ( 2011 ) suggests that competition in the drink sector is from cold drinks appealing to younger consumers and that the rise of java stores has boosted the ingestion of java. Tea on the other manus has non enjoyed a similar growing.

There is ferocious competition between tea trade names in the market with private label trade names contending for an increased portion ( Mintel, 2012 ) . Changing client attitudes towards types of tea and tea trade names together with differing attitudes between age groups make it of import to understand possible and attractive consumer sections to aim and near. Attitudes towards other drink types such as java and soft drinks besides enable the apprehension of how best tea trade names can be positioned and promoted.

This study takes a expression at consumer behavior and attitudes and how these consumers can be better understood. This will take to the cleavage of consumers and subsequent market research facets will besides be covered.

The Macro Environment

Political Environment

China, India, Kenya and Sri Lanka are the biggest tea exporting states ( FAO, 2013 ) . The British authorities ‘s relationship with authoritiess of these states is polar as it will find how good trade is carried out.

Furthermore, political fortunes within these states besides affect the overall end product of tea. Changing authoritiess or leading as in the instance of Kenya ( Reuters, 2013 ) and possible countenances on Sri Lanka for alleged human rights misdemeanors could hold an consequence on the supply of tea.

Economic Environment

Uncontrolled rising prices has a negative consequence as high monetary values deter purchases and impact gross revenues volumes.

Recessions could do concerns to restrict disbursement and clients could besides alter buying forms through reduced measures and shift of trade names.

Changes in revenue enhancements imposed on imports, exports and net incomes besides affect trade good monetary values and end merchandise monetary values impacting demand and gross revenues.

Social Environment

Changes in client life styles affect attitudes towards merchandises and in the instance of tea, more wellness witting consumers will be given to a have a positive temperament towards tea.

Mintel ( 2012 ) study suggests that more consumers are concerned about their wellness and see tea to be a healthy drink. The study further shows that 31 % of British grownups suffer from emphasis and herbal teas such as Camomile could be consumed for their appeasement features.

Age groups besides affect consumer attitudes as consumers of different ages will hold postponing gustatory sensations and likes.

Technological Environment

Wetherly and Otter ( 2008 ) suggest that engineering transforms the mode in which concerns operate. The cyberspace, societal media and smart phones have made information accessible from practically anyplace enabling consumers to go more knowing.

Promotions have made communicating many-sided and word of oral cavity can be easy dispersed utilizing societal media. Such promotions pose both chances and menaces for concerns.

The Micro Environment

Market Channelss

Mintel ( 2012 ) study suggests that gross revenues were dominated by Grocery Multiples with Discounters and Specialists holding a smaller value portion in 2011 ( Figure 1 ) .

The fiscal strength of these multiples enables them to out monetary value smaller operators. 83 % of British grownups patronise Tesco, Sainsbury ‘s, Asda and Morrisons giving them a 64 % of all nutrient retail merchant ‘s gross revenues.

They may nevertheless miss the specializer cognition possessed by specializers who have the chance to make a niche market section.

Key Competition

Mintel ( 2012 ) study suggests that Cold Drinks dominated the non alcoholic drinks market in 2010 demoing that Tea faces competition from other drink types ( Figure 2 ) .

Mintel ( 2012 ) study shows that 4 trade names enjoyed a 61 % portion of the market value in 2011 while ain label trade names obtained 16 % with the entire value estimated at GBP 655 million ( Figure 3 ) .

Penetrations

The study besides looks into the facet of trade name personalities as portrayed by consumer feedback and attitudes consumers have towards certain trade names. It is prudent to understand such countries as future trade names will be able to deduce valuable penetrations.

Use formats show that over 95 % of respondents use tea bags as opposed to 10 % utilizing loose leaf tea. This brings to light facets such as “ clip hapless ” consumers and few who enjoy a good brew.

While 91 % of respondents have tea at place, the rate beads to 51 % and 49 % at work and at a coffeehouse or eating house severally. Apart from the fact that there will be unemployed consumers, some users may choose for other drinks such as java when in a coffeehouse or eating house ( 27 % of respondents seeing java as a more stylish drink than tea ) .

Key Stakeholders

A Stakeholder is an entity that could impact or be affected by the accomplishment of an administration ‘s aims ( Freeman, 1984 cited by Mitchell et Al, 1997 ) . Stakeholders are entities that an administration depends on for its uninterrupted endurance ( Stanford Research Institute, 1963 cited by Mitchell et Al, 1997 ) .

This can be farther elaborated when stating that stakeholders of an administration are interconnected and that actions of an administration could hold direct and indirect effects ( Bhattacharya and Korschun, 2008 cited by Wilson, 2012 ) .

The simple “ bicycle-wheel ” theoretical account ( Figure 4 ) can non be applied to this context as Mitchell et Al ( 1997 ) suggest that associations between an administration and its stakeholders could hold fluctuating effects and that these associations have multiple linkages and are more frequently than non alliance organizing as opposed to the thought of the “ bicycle-wheel ” theoretical account where such associations are bilateral and independent.

Figure 4 depicts a wide position of stakeholders and Figure 5 presented by Mitchell et Al ( 1997 ) looks at how Power, Legitimacy and Urgency categorize these stakeholders into more distinguished sectors.

Looking at figure 5, it should be noted that different stakeholders can take up of changing places within these countries. Stakeholders with one property may non hold that large an impact on the administration as those with two or three properties.

An antique employee may merely hold urgency but together with the media which has legitimacy if non power, will impact the administration. Customer and stockholders have all three properties and should be core to the determination devising.

Research workers and scientists will hold legitimacy as their findings on wellness benefits of devouring tea will be believable and such studies on media will hold a positive consequence.

Pressure groups buttonholing for the environment will hold an increased consequence when tied up with the authorities which has power and the media which has legitimacy in most instances.

Therefore it is of import to understand that stakeholders will non ever be inactive and altering properties will hold varied impacts on determination devising.

Consumer Behaviour

Valuess, Attitudes and Behaviours of Consumers

Solomon et Al ( 2006: 113 ) define value as “ a belief about some desirable end-state that transcends specific state of affairss and ushers choice of behavior ” and reference that values play an of import function in a individual ‘s ingestion activities.

Tea consumers will be concerned about facets such as moralss and sustainability in peculiar with Mintel ( 2012 ) proposing that consumers aged 16-24 would be willing to pay more for ethical tea trade names. Accreditations such as Rainforest Alliance, Fair Trade enfranchisement and organic green goods will pull more attending from such sections.

Peter & A ; Olson ( 2005: 135 ) define attitude as “ a individual ‘s overall rating of a construct ” and Solomon et Al ( 2006: 138 ) travel on to province that “ an attitude is enduring because it tends to digest over clip ” .

Euromonitor International ( 2012 ) suggests that consumers progressively focus on wellness benefits of tea and that they see flavour and quality as more of import than monetary value.

Mintel ( 2012 ) brings to illume the undermentioned attitudes and behaviors of consumers towards tea:

42 % of respondents believe fruit, herbal and green teas are better for their wellness

22 % of male respondents are of the position that such alternate teas are for adult females

36 % of fruit tea users think that it is merely the olfactory property and non the spirit in the tea

About a two tierce of respondents believe tea is quieting

61 % and 38 % of respondents are willing to pay more for quality and just trade merchandises severally

41 % of respondents province that the quality of ain trade names of tea lucifers that of branded teas

27 % of respondents admit that they think java to be more stylish than tea and this could be the ego defensive map of attitudes

91 % of respondents consume tea at place but the rate beads to 51 % and 49 % for ingestion at work and at a cafe/restaurant severally

Identifying such values, attitudes and behavior enables the proper cleavage of clients and development of appropriate merchandises and advertisement schemes.

Consumer Learning & A ; Understanding Consumers

Solomon et Al ( 2006 ) reference that acquisition is a consequence of stable alteration in behavior derivation from experience and Schiffman & A ; Kanuk ( 2007 ) province that acquisition is a procedure and that it evolves continuously from cognition and experience gathered.

Ambler & A ; Vakratsas ( 1996 ) province that the “ black box ” ( as illustrated in figure 6 ) position merely looks at inputs and ensuing behaviour alterations but does non see thought, feeling and experience.

Figure 6: The consumer as a ‘black box ‘ , Solomon et Al ( 2006 ) , p.62

Response

Stimulation

Consumer

Classical Conditioning can be used to place how consumers react to certain stimulation generated by marketing activity. A Jingle for illustration attach toing a trade name heard overtime will alone remind consumers of the peculiar trade name.

Operant/Instrumental Conditioning can be used to analyze how consumers behave in order to obtain positive results or avoid negative experiences ( Solomon et al, 2006 ) . This helps us to see how consumers react to certain messages from advertizers, media or even remarks from their ain equals.

Hewlett & A ; Wadsworth ( 2010 ) in their findings show that wellness witting consumers are more likely to be aware of devouring drinks incorporating caffeine. This could be an illustration of consumers acting in such a mode to avoid negative results.

Mintel ( 2012 ) references that 27 % of respondents perceive java as more stylish than tea and this could merely be due to peer force per unit area and the demand to experience a sense of belonging. The studies besides suggests that pregnant adult females tend to forbear from devouring drinks with caffeine as recommended by the NHS and while this could halter the gross revenues of standard tea, gross revenues of decaffeinated and caffeine free teas could profit.

Understanding how consumers “ learn ” enable companies to develop effectual messages. Not ever do consumers travel through the Learn-Feel-Do procedure and as discussed by Vakratsas & A ; Ambler ( 1999 ) and Vaughn ( 1980 ; 1986 ) they may follow alternate procedures based on the engagement with the merchandise.

Figure 7 below shows how variable attributes influence this procedure.

Think

HABITUAL

( Responsive )

Do-Learn-Feel

Satisfaction

( Social )

Do-Feel-Learn

AFFECTIVE

( Psychological )

Feel-Learn-Do

INFORMATIVE

( Economic )

Learn-Feel-Do

Low

Engagement

High

Engagement

Feel

Figure 7: FCB Grid, Vaughn ( 1986 ) , p.58

Therefore, understanding the right location of different consumers will enable the correct development and execution of selling attempts.

Decision Making and Information Processing of Consumers

Even though there is high use of tea in the UK, consumers may be unfastened to new offerings and rival messaging as they are continuously unfastened to information.

Personal traits of consumers besides affect single purchase determinations and the same merchandise may be perceived in different ways.

Valuess and attitudes such as being sensitive towards moralss and sustainability may do consumers more susceptible to trade names advancing such features.

Social influences such as equal force per unit area and tendencies persuade consumers to do certain purchases.

Age plays a portion in consumer gustatory sensations and the rating of options could change depending on this factor as even though the demand could be the same, consumers stand foring different age groups may look to different types of options. Personal traits of participants will impact this procedure.

The determination doing unit excessively plays a function in consumer behavior. In the context of tea in a family state of affairs, any household member could be the instigator. This could be supported or deterred by sentiments of household members, friends and media.

Consumers besides need to hold the motive to treat information. They should besides hold the ability to understand messages and be able to do a purchase. They should besides be presented with the chance through handiness and the attending given to the messages is besides important.

The Perception-Experience-Memory theoretical account presented by Hall ( 2002 ) suggests the undermentioned as illustrated by figure 8 below.

Pre-experience

Exposure

Phase

Consequence

Function

1 Expectation

2 Anticipation

3 Interpretation

1 Centripetal Enhancement

2 Social Enhancement

1 Prompting

2 Stigmatization

3 Interpretation

Framing

Percept

Organizing Memory

Enhancing Experience

Post-experience

Exposure

Figure 8: Perception-Experience-Memory Model, Hall ( 2002 ) , p.24

In the pre experience exposure stage, effectual communicating frames the perceptual experience of the consumer by making an outlook and expectancy of the merchandise and enables reading of the message.

It than enhances the experience through sensory and societal sweetening. Post experience exposure besides contributes to this map. Experience is polar as it will either promote or deter a consumer to do a purchase or repetition purchase.

Post experience exposure organises memory so that cues are provided to bring on callback. Branding is besides of import as it distinguishes the merchandise. Thereafter, reading Acts of the Apostless to heighten the memory of the experience.

Consumer Cleavage

Given the fact that tea is omnipresent in the UK, the market does non necessitate to be segmented geographically. However, placing population scattering in countries will enable the better apprehension of local gustatory sensations and tendencies.

Demographic cleavage is required as elements such as age, gender, societal position, income, instruction and employment position affect attitudes towards tea as suggested by Mintel ( 2012 ) . Consumers of different age groups have changing gustatory sensations and attitudes while work forces perceive alternate teas as more for adult females.

Psychological cleavage demands to be carried out as personalities, perceptual experiences, attitudes and larning distinguish consumer sections and accurate penetrations enable effectual targeting.

As found by Hewlett & A ; Wadsworth ( 2010 ) , consumers with differing life styles will hold varied temperaments and they could be alone and this warrants Psychographic cleavage.

Socio-Cultural cleavage can besides be carried out to place cardinal cultural and cultural groups every bit good as societal categories. Consumers in different societal categories have alone features and respond to merchandises otherwise as mentioned in Mintel ( 2012 ) .

Use rates besides enable the better understating of consumers and hence usage related cleavage can besides be carried out. Use enables the apprehension of measures and in the instance of tea ; it could be pack weight, tea bag count and strength.

Mintel ( 2012 ) studies tea imbibing occasions and locations and this helps to understand how, when and where consumers drink tea. Situational cleavage can be used in these instances.

Benefit Segmentation needs to be carried out as tea known for its wellness benefits will strongly appeal to consumers for illustration. Aspects such as convenience besides enable the better apprehension of tea formats. Identifying and categorizing benefits will convey to light alone sections for illustration consumers who look for Value for Money as reported by Euromonitor International ( 2012 ) .

Geo-Demographic cleavage methods such as ACORN can be used to place similar consumer sections.

As stated by Schiffman & A ; Kanuk ( 2007 ) , sections need to Identifiable, Sufficient, Stable and Accessible to enable effectual targeting. Sections besides need to be differentiable.