Discuss about the Report On The Topic – Consumers As Social Beings.
This report has been prepared on the topic “Consumers as social beings” in which discussion will be conducted on the impact of the social influence on the buying behaviour of the customers. Social influences create an impact on the purchase decision process of the customers on different stages. Products or services are being designed by keeping the focus on the needs and expectations of the customers. This report will discuss the influence of reference groups on the decision-making process of the consumers, analysis of the competitive market of the company, growth prospects, use of social influences for improving the performance of the company and recommendations for recommending specific marking strategy
Reference group can be defined as the group of individuals which create an impact on the views, opinion, attitude, beliefs and behaviour of the others. Reference group acts as a role model or inspiration which creates an impact on the buying behaviour of the customers. Companies are using reference groups as a marketing approach for influencing the decision-making process of the consumers. In this competitive business environment, various innovative approaches are being used by the companies for the purpose of grabbing the attention of the customers. The impact of the reference group on the purchase making a decision of the customer is dependent on the information and experience, trustworthiness, social approval and creditability. The influence of the reference group on the decision-making process of the consumer is dependent on the nature of the product which is being considered by the consumer (McFerran, et. al., 2010).
Consumers may get influenced by the reference group as the consumer may consider the individual as role model or inspiration which motivates the consumer to make a favourable decision. There are various factors which affect the decision-making process of the consumers and the most important factor is reference group. The television advertisement is the form of reference group as famous personalities promote the product or service. This attracts the consumers and affects the decision-making process of the consumer. The role and importance of reference group in the marketing function is increasing due to the increasing impact on the decision-making process of the consumer. The focus of the companies in on identification of the reference group of the consumers so as to grab the attention of the consumers and expanding the consumer base (Carneiro, et. al., 2017).
Reference groups can be primary or secondary which may be further divided into formal and informal groups. Reference group affects the decision making the process of the consumer by the creation of socialization of the individuals. For example, people prefer products which are being referred by their family or friends. Self-concept is being developed with the use of reference groups. Reference groups are widely used by the companies so as to help in the expansion of the customer base. Powershop can use the concept of reference group for the purpose of attracting the customers and ensuring that the consumers are consuming the products offered by it. This approach will help Powershop by influencing the choice of the consumer to consume the product or service (Chiu, et. al., 2018).
Reference groups can be of three types and these three types of reference groups include associative, aspirational and dissociative. Associative reference groups are the groups from which an individual belongs to. Aspirational reference groups are the groups with which one compares itself with. Dissociative reference groups are those groups from which one wants to disassociate with. Reference groups will be helpful in the electricity field as these reference groups influence the manner in which consumers interpret the information and make decisions regarding the purchase of the product. Reference group is the method used for defining the marketing strategy by developing better knowledge of the audience (Brick, 2014).
According to the social comparison theory, individual wished to get associated with those groups who have similar abilities and opinions. Powershop can use this theory for attracting the customers by disclosing similar abilities and opinions. Powershop can influence the consumer behaviour by using three ways. These three ways include informational influence, utilitarian influence and value-expressive influence. Motivational need theory can be used by Powershop by creating artificial needs for the consumers. Powershop can disclose the safe, secured and beneficial features of the products so as to create the artificial needs for the consumers. Another theory which can be used by Powershop is Hawkins Stern Impulse Buying. Hawkins Stern Impulse Buying is based on the idea of impulse behaviour. Another theory which can be used by Powershop is Theory of Reasoned Action. According to this theory, specificity plays a vital role in the process of decision making. This theory states that a customer only initiates a specific action when it is getting the specific expected outcome. Powershop has to attach a specific positive result to the product. Focus of this theory is on explaining the moving consumers through the pipeline of sales. (Li, et. al., 2013).
Powershop is an online electricity retailer which is operating in electricity retailing industry of Australia, UK and New Zealand. Powershop was founded in the year 2012 by Ari Sargent in Australia. Headquarter of Powershop is located in Melbourne, Australia. According to the survey conducted in the year 2011 by Consumer’s Institute of New Zealand, Powershop was named as the best company in electric companies. Majority of the customers have mentioned that they are satisfied with the services offered by Powershop. Meridian Energy Limited is the parent company which has owned Powershop. Office of Powershop is situated in Melbourne along with the support team for assisting the customers (Powershop, 2018).
Powershop is the only electricity retail company which has been certified 100 % by the government of Australia as carbon neutral company. Powershop has developed an application for the purpose of enhancing the satisfaction level of the customers. Employee base of Powershop is of 50 employees who are focusing on maintaining the quality of the services offered to the customers. Powershop has been ranked as the greenest power company for the three years i.e. in the years 2014, 2015 and 2018. It is focusing on providing quality products which cater the need of the customers (Lawton, 2016).
Powershop is offering electricity as the product to the customers. The product range offered by Powershop includes Top up, future packs and specials. The top-up can be used by the customers immediately and can be sold without any discount to the customers. Future packs are the discounted packs which can be used by the customers for a future period or later month. Specials are available in the limited quantity which can be offered in discounted form. Powershop is offering services to the people of Australia so as to fulfil their electricity needs. Beneficiaries of the product offered by Powershop are the residential and commercial individuals (Canster Blue, 2018).
Competition in every industry is increasing. In the electricity retail industry of Australia competition is rising. Powershop is operating in the online electricity retail industry of Australia and is focusing on delivering quality products or services to the customers. Powershop is one of the leading power companies which is offering business and residential electricity in Melbourne VIC 3000, Melbourne, Australia. Competitors of Powershop in Melbourne VIC 3000 are Vectren Corporation, Tokyo Electric Power, Algonquin Power and Utilities Corporation, Energy future holdings and E.ON UK Plc. These competitors are focusing on providing quality products for gaining a competitive advantage over Powershop (Devlin, 2015).
Powershop is an “Online electricity supermarket” which is offering products as per the need of the customers. This has provided a competitive advantage to Powershop over the others in the industry. Five-star reviews have been provided by the customers for the products offered by Powershop. There are various factors which have contributed to the competitiveness of Powershop. These factors include the cost of the products, service to the customers, advice, support and tools, environmental sustainability and satisfaction level among the customers. Powershop is considering these factors for grabbing the opportunity available in the business environment and coping with the competition (Gibson, 2013).
Rapid growth has been seen in the performance of Powershop in the Australian market. The numbers of customers are increasing which has resulted in a rise in the growth rate of the company. With the growth in the Australian market, Powershop has expanded the area of operation by entering into the United Kingdom and Europe market. In the year 2015, the customer base of Powershop was approximately 46,000 customers in Australia. This expansion of the customer base has resulted in the expansion of the employee base of the company as with the rise in the number of customers, need to be increased for the employees. 50 Employees were hired in the year 2015 for the IT department in Australia (Essential Services Commission, 2016).
It has been analysed that Powershop will continue growing as it is the only Australian company which has been certified as 100 % Carbon Neutral. This certification was given by the government of Australia. Investment in Powershop is increasing due to the quality of the products offered by it and its performance in the market. Powershop is fulfilling the responsibility towards the society by working with the Environment Victoria which is a leading group of Australia working for the safety of the environment (Australian Government, 2012).
The motive of every business is to enhance the growth chances of the business by enhancing the performance and reputation of the company in the market. Growth and reputation are crucial aspects which determine the success chances of the business. The concept of social influences has gained much importance in the fast-changing business environment. Different roles are being played by the consumers for purchasing the products or services. Social influence takes place when the emotions or choice of the individual gets affected by the others due to their influence. There are various factors which create an impact on the purchasing decision of the business. Success chances and performance of the business are dependent on the sales of the business. For the purpose of establishing a reputation in the market, business needs to influence the consumers (Olson, et. al., 2018).
Social aspects are the aspects which are present in the society where a consumer is living in. buying decision making of the consumer may get affected due to the family, reference group and role and status. While taking a decision regarding the purchase of a product or service, an individual considers or take suggestions from the others. These suggestions of the others create a huge impact on the decision-making process and are considered as social influence affecting the consumer decision making. Powershop has to use the concept of social influence so as to motivate the consumers to make decisions for consuming the products offered by it. Powershop is having a reputation in the market, as well as the customers of Powershop, are satisfied with the products offered by Powershop. Social influence is the impact of the judgement of others on the choice of the individual (Parkinson, 2018).
Social influence has helped in yielding the changes which business is planning to implement in the purchase decision-making process of the consumers. Powershop is focusing on the enhancement of the customer base by promoting the products offered. It has established a reputation in the market which has provided a competitive advantage over the others in the industry. Performance of the company can be enhanced with the help of social influence. It is essential to develop effective social influence on the customers so as to motivate them to promote the product by suggesting it to others. Motivation is the key source in the process of social influence which is responsible for changing the customer purchase making decision (Wang, et. al., 2013).
A decision making process is followed by the consumers for making a decision regarding the purchase of the product. This decision making process include five steps and these five steps include stating the objectives and goals, defining the problem, identification of the possible alternative solutions, evaluation of the alternative course of action and implementation of the decision. According to the first step of the decision making process, Powershop has to define the objective of the business. In the next step, Powershop has to define the problems of the business. In the third step of the decision making process, Powershop has to identify the alternatives available for solving the problems. In the next step, Powershop has to identify the suitability of the alternatives discussed in the previous step. In the last step, Powershop has to make a decision on the basis of the decision making process (Sipilä, et. al., 2017).
Few recommendations have been made so as to recommend specific marking strategies for Powershop. These recommendations are listed below:
Conclusion
Thus, from the above discussion, it can be stated that reference group and social influence are crucial aspects which are creating impact on the buying behaviour or purchase making decision of the consumers. Powershop is operating effectively in the electricity industry of Australia and is focusing on enhancing the market share by attracting large number of customers. Analysis of the competitive environment of the Australia has been done for the analysis of the performance of Powershop in the industry. Specific marking strategies have been recommended to Powershop so as to enhance the performance of the company.
References
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