Consumer Behaviour And Its Significance For Organisations

Consumer Behaviour and Its Importance

Discuss about the Consumer behaviour in terms of evaluating effective marketing strategy of an organisation.

Consumer behaviour is a study, which helps an organisation to be familiar with consumers’ interest, needs, expectation, culture and purchasing behaviour. In order to achieve success in business an organisation needs to satisfy their customers. Understanding consumer behaviour is priority to take decision in terms of product innovation. In addition, consumer behaviour plays an important role in determining business strategies and efficient tactics in terms of winning consumer satisfaction. This Assignment sheds light on consumer behaviour from different aspects of marketing. The purpose of this assignment is to evaluate consumer behaviour in terms of detecting problem or opportunity within an organisation. In this context, consumer behaviour of McDonalds is mainly focused in order to analyse the reason behind their recent sales decline in the market of UK. Initially, this assignment defines consumer behaviour and the importance of consumer behaviour for an organisation. After that, consumer profile of McDonald will be discussed in two segments in terms of their primary and secondary market. Consumer profile of McDonald has been developed in this report based on four factors – geographic, demographic, psychographic, and behavioural. The analysis of consumer profile will help to identify the issues of current market environment of McDonald in UK. Thus, the problems and opportunities of McDonald Corporation can be predicted in terms of developing sales rate.

As stated by Solomon, Russell-Bennett and Previte (2012), particular community of consumers has different attitudes in terms of purchasing product. Psychology of consumers is necessary to take into account in this context. The study of consumer behaviour encompasses the decision-making factors of the consumers in terms of making product choice. Consumer behaviour varies based on the differences of geography, economy and culture. A number of cultural people reside in a particular territory. Hence, cross-cultural diversity is essential to consume in investigating consumer behaviour in terms of market globalisation. An organisation needs to develop a team in order to collect data and information about cross culture of their target territories. It is because for developing sales growth, an organisation requires to fulfil material needs of their target consumers. In this case, product innovation and price determination are the two primary factors to take decision for an organisation in favour of target customers. Solomon (2014) opined that cross culture of target consumer is the primary issue of studying consumer behaviour. An organisation needs to concentrate on incorporating the study of consumer behaviour. The study of consumer behaviour needs to be constant in order to identify the changes in the market. In order to sustain in the competitive market it is essential in order to cope up with the changes in the market.

Consumer Profile of McDonald’s

In order to launch a new product in the market, it is essential to study the consumer behaviour of the target audience. Otherwise, an organisation is not able to predict how the target customers will respond in buying a particular product. Product innovation is one of the premium needs of an organisation in order to promote business. Understanding of consumer behaviour let an organisation to focus on product innovation in following the insights of the consumers. In terms of accomplishing sales objectives of an organisation, study of consumer behaviour is important. Consumer behaviour affects business in many ways. If an organisation fails to satisfy the needs of the consumers, sales of an organisation will decline (Wilson et al., 2012). In that case, an organisation will not be able to make the desired business revenue. Business growth and development of an organisation will be restricted in that case. Hence, it is claimed that consumer behaviour is considered as the tool of success in fulfilling sales objectives (Mihart, 2012). Constant study of consumer behaviour is essential for the marketers in terms of taking organisational decision for promoting product in the continuous way. In order to sustain in the business, it is necessary to provide consumer friendly customer care service. In addition, in order to keep business continuously update, constant study of consumer behaviour is considered as reliable and reasonable. Otherwise, the marketers will not be able to cope up with the market variables in terms of sustaining for the longer terms. The study of consumer behaviour is important to take into concern in terms of retaining customers. Old customers are considered as the base of securing new consumers. Hence, in order to increase the number of customers also, the study of consumer behaviour is important. In order to take the market advantage it is vital to keep the customer satisfied (Parsa et al., 2012). Product development is constant need of an organisation in terms of sustainable business expansion (French & Smith, 2013). Hence, In order to evaluate product development, three questions are necessary to take into account in this context.

• Who are the target consumers?
• Where do they live?
• What are the basic requirements of the target consumers?

From the above discussion, it is understood that consumer behaviour is important to the marketers for the following reasons.

• To design the most innovative product in order to satisfy customers fully
• To take decision in the way product can be made easily accessible to the consumers.
• To take decision in order to offer the most affordable price of the consumers.
• To identify the most successful method of product promotion
• To know the other factors which are regarded in terms of influencing purchasing decision of the consumers (Schmitt, 2012)

In the year 2016, a survey over McDonald showed that it had lost nearly 500 million orders (Mcdonalds.com, 2018). Therefore, in the UK, McDonald is facing a downward trend in terms of securing market share. Primary and secondary market segment of McDonald is necessary to take into account in order to investigate the problem behind the sales decline.

Geographic	·         Region: McDonald is one of the most recognised fast food chains in the World. McDonald Corporation has started his journey since 1940 from California, United States (Wilson et al., 2012). In the United States, McDonald has 14,267 numbers of restaurants. McDonald has one of the largest fast food chains throughout the United Kingdom. It operates in UK at more than 3000 locations (Mcdonalds.com, 2018). However, the company has received constant drop of sales in the United Kingdom. McDonald deals with more than 115 countries in order to operate business (Parsa et al., 2012). After US and UK, McDonald has primary market in which countries are – Australia, New Zealand, Canada, Japan, Hong Kong, Singapore, Denmark, Sweden (Onwezen, Bartels, & Antonides, 2014). Subway and Starbucks are the two key competitors of McDonald in terms of securing consumers (French & Smith, 2013). ·         Density: McDonald’s targets consumers from the urban people. McDonald’s has hardly any outlet in rural area in any country. From a survey report, it is found that in springtime of 2016, exceeding 106.5 million consumers have been visited McDonald’s (Mihart, 2012). A survey reported that McDonald’s serves 325 consumers at UK stores (Corporate.mcdonalds.com, 2018).
Demographic	·         Age: McDonald’s targets children with their parents. Primary consumers of McDonald’s are students. Primary consumers of McDonald’s belong to the age group within 8 to 27 (Parsa et al., 2012). ·         Gender: McDonald’s welcomes both male and female crowd at their stores. ·         Life-Cycle stage: Most of the primary consumers of McDonald’s are found at the bachelor stage of life (Hakala, Svensson & Vincze, 2012). In the crowd of McDonald, school students, college students and university students are  found in main. ·         Income: McDonald’s targets people from low and middle class population (Paasovaara et al., 2012). ·         Occupation: Status of maximum McDonald’s consumers is students. A large percentage of young employees and professionals from generation X and Y is also found in the crowd at McDonald’s stores (Onwezen, Bartels & Antonides, 2014).
Psychographic	·         Social class: McDonald’s aims people from lower, working and middle classes. The people who visit McDonald’s store are educated (Cherian & Jacob, 2012). ·         Lifestyle:  Tech savvy children, adult students and youths are the primary consumers of McDonald’s. Hence, lifestyle of them is necessary to take into consideration in this context. Children and youths drive their lifestyle from their pocket money (Schmitt, 2012). Children and youths are obsessed in consuming fast food. This tendency leads the children and youths of this generation towards obesity. On the other hand, some children and youths are also found who are health conscious, but do not want to compromise in consuming cheesy burger. In order to visit restaurants these people prefer to have a trendy, stylish and fun type of environment. On the other hand, the cartoons pictures, dummy and burgers attract children. However, the parents are concerned in leading their children to eat healthy food.
Behavioural	·         Degree of loyalty: Consumers of McDonald are fond of Mac Burgers. People love Mac Burgers due to its leafy, cheesy and healthy stuffs (Paasovaara, 2012). In addition, primary consumers of McDonald are loyal to consume hamburgers, salads, desserts, chicken, milkshake, soft drinks, coffee and French fries of McDonald.  It is necessary to note hereby that the consumers of McDonald’s cannot be considered as “Hard core loyal” (Mcdonalds.com, 2018). It is because many of the McDonald’s consumers leave to visit McDonald’s, either minimises the frequency of visiting McDonald’s stores. ·         Benefits sought: McDonald’s takes online order to serve home delivery within three miles (Lee & Carter, 2012). On the other hand, the products of McDonald are cost effective. It is necessary to note hereby that the priority of McDonald’s consumers are cost benefits and time efficiency (C?t?lin & Andreea, 2014). ·         Personality: McDonald’s consumers are careless and easy going in terms of leading life. ·         User status: McDonald’s intends to target potential and daily fast food consumers (Hakala, Svensson & Vincze, 2012).

Geographic	·         Region: Parents are considered as the secondary customers of McDonald’s. In the context of most McDonald’s restaurants per capita, the top five countries are – United States, New Zealand, Canada Australia, Japan respectively (Corporate.mcdonalds.com, 2018). ·         Density: McDonald’s is considered as the family restaurants. Parents frequently visit McDonald with their children in terms of having snacks. In the regular crowd of McDonald, a larger percentage of people are parents.
Demographic	·         Age:  The age of secondary consumers of McDonald’s are within 28 to 42 (Cherian & Jacob, 2012). ·         Gender: Male and Female both kinds of consumers of every age are able to enjoy the environment of McDonald’s. ·         Life-cycle stage: In the crowd of secondary consumers, newly married couples, parents, bachelors are found (Lee & Carter, 2012). ·         Income: Secondary consumers of McDonald’s belong to the lower middle class (Parsa et al., 2012). ·         Occupation: Most of the secondary consumers of McDonald’s are working and house wives (Onwezen, Bartels & Antonides, 2014).
Psychographic	·         Social class: Socially secondary consumers of McDonald’s are from middle class and lower middle class. ·         Lifestyle: McDonald’s targets tech savvy consumers from cross-cultural background (C?t?lin & Andreea, 2014). The people, who are fond of trendy lifestyle, are the target of McDonald’s.
Behavioural	·         Degree of loyalty: Secondary consumers of McDonald’s are considered as “Switchers” from the aspect of consumer loyalty (Hakala, Svensson, & Vincze, 2012). ·         Benefits sought: Reasonable price and time efficient customer care service are considered as the most sought benefits (Onwezen, Bartels & Antonides, 2014). ·         Personality: Family oriented consumers are found in the crowd of secondary consumers of McDonald’s. ·         User status: Secondary consumers of McDonald’s are considered as ‘Foodie’ (C?t?lin & Andreea, 2014).

Problems and Opportunities for McDonald’s

From the analysis of consumer profile, which needs of the consumers are identified are noted below.

• Consumers of McDonald’s love McBurgers.
• They are fond of trendy lifestyle.
• They expect to be offered the cheapest price.
• Their priority is to receive time efficient customer care service.

McDonald’s has received a downfall of market share in the United Kingdom, as they cannot recognise the need of the consumers properly (Schmitt, 2012). McDonald’s was supposed to think that their consumers are health food fanatic. Therefore, they have adopted a trend of healthy food in addition of salads and healthier wraps. On the other hand, Subway fast food chain also offers healthy breakfast, snacks and food items with leafy vegetables. Starbucks is also focused to offer healthy food trend to the consumers. Hence, a larger number of consumers of McDonald’s switched to Subway and Starbucks. McDonald’s was unable to recognise the change variables in the market. In order to sustain in the competitive market, to McDonald’s it is the most important to set the right trend of food in considering the change variables in the market. The menu of McDonald’s UK is remained same for the last 50 years long (Cherian, & Jacob, 2012). Hence, Lack of food innovation is also necessary to take into account for sales decline of McDonald’s in the United Kingdom. At the present, UK government highlighted obesity as a major issue in terms of conserving public health. It leaves a direct impact on the sales of McDonald’s. Negative promotion is also responsible behind sales decline of McDonald’s.

Conclusion

From the above discussion, it is extracted that an organisation requires to identify consumer needs and behaviour in terms of fulfilling business mission, vision and objectives. In addition, for an organisation it is also a priority to recognise its true competitors in terms of drawing attention of the target consumers. An organisation needs to consider culture, lifestyle, income, social status of the consumers. In terms of meeting sales objectives, an organisation also requires to pay attention on easy accessibility of products to the consumers. In the report, it is seen that McDonald’s cannot consider the needs and behaviour of their consumers properly. Now in order to win back the lost consumers, McDonald’s has to concentrate on product innovation and consumer marketing strategy. McDonald’s also needs to recognise its true competitors in terms of taking marketing advantage. The consumers of McDonald’s are tech savvy. Hence, McDonald’s also needs to focus on digital communication in order to interact with the consumers.

References

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