The report provides a comprehensive exploration of the multifaceted realm of marketing, delving into its essence and significance within the dynamic landscape of business. It begins by shedding light on the fundamental concept of marketing, demystifying its core purpose and pivotal role in driving organizational success. In a world where consumer needs and preferences constantly evolve, understanding the essence of marketing becomes imperative for any business seeking to thrive in competitive markets.
What is Marketing?
Marketing is a study of the market and compliance of production with it. It is a concept and management approach, according to which the entire production process in a company follows the requirements and the state of the market. Marketing is market-oriented and market-oriented company management.
What are the marketing phases?
There are three main phases of marketing:
- Market research (supply and demand study).
- Creation of a product following the requirements and the market situation.
- Realization of the product through appropriate marketing approaches (advertising, setting appropriate prices, etc.).
What is Market research?
Market research is the systematic planning, collecting, and analysis of data that are related to a specific marketing situation facing the company.
Market research is not a real marketing tool. Gathering information about the state of the market, the interests of consumers, and the state of one's own company only create a basis for making marketing decisions and for determining a marketing strategy.
The marketing environment is very dynamic today. It is characterized by an extremely rapid change of factors influencing the activity of the enterprise. Therefore, the need for real-time marketing information is greater than at any time in the past.
The purpose of marketing research
The purpose of marketing research is to provide the necessary information for company and marketing decisions.
The successful operation of any company depends largely on its provision of the necessary information, based on which management makes decisions about the implementation of the company's activities.
Marketing deals with identifying and meeting the needs of man and society. One of the shortest definitions of marketing is "profitable satisfaction of needs." In some Western European countries, as well as in the US, marketing is one step ahead. There, organizations must take into account not only the needs of their specific customers in the narrow sense of the word but also the requirements of different groups in society and society as a whole. We are entering an era of social responsibility, where organizations must take into account the need to build a good image of themselves in society and also the results of their activities on society as a whole.
Modern marketing is a battle
Modern marketing is a battle that relies on the possession of information rather than other resources. Competitors may borrow equipment, products, and activities, but may not copy company information and intellectual capital. The main competitive advantage of a company is its information resource.
The science that studies the psychological characteristics of consumption and consumer behavior officially took its place in the American Psychological Association in 1960, when a section on consumer psychology was established.
There is a special scientific journal, the Journal of Consumer Behavior, which covers research on consumer behavior and motivation. The rich empirical material and numerous experiments concentrate their efforts on one main goal - to understand what the person thinks and how he acts as a consumer. Determining exactly how the consumer relationship is formed is extremely important, as in this way it will be possible to use different ways to influence it.
The influence of the social environment on consumer behavior is sometimes stronger than the personal attitude toward the product. A person often under the influence of various factors takes actions that contradict his attitudes and desires.
The influence of social factors and consumer attitudes is most fully reflected in the theory of the rational behavior of Ajzen & Fishbein. According to her, attitudes towards the product and social influence determine the trends in consumer behavior. Sometimes intentions are formed only under the influence of social factors, sometimes personal attitudes dominate, and in other cases, the influences are influenced by both attitudes and the social environment.
Eight styles of consumer behavior
Eight styles of consumer behavior can be distinguished according to the different social roles and statuses of the individual consumer:
- Demanding high quality;
- Oriented in the brands and observing the principle price-quality; attitude to acquiring famous and expensive brands;
- Focused on innovation and fashion - likes new products, with an attitude based on practical observation;
- A user who receives pleasant emotions from visiting stores. For him, this is rest and entertainment. This type of behavior is typical of young people gaining life and user experience;
- Economical, with thought for the price. The consumer reacts quickly to sales and seasonal discounts;
- Impulsive and frivolous style of behavior in which a person tends to make purchases under the influence of the moment and is not interested in wasting time and money;
- Embarrassed by the rich choice. The consumer experiences information overload in the market and tries to understand something more about the offered brands and goods.
- Habitual actions, attachment to a certain brand. With this style of behavior, the consumer again chooses the already liked stores, goods, and brands for which he seeks information because of his positive experience from past purchases.
Attitudes and decisions of consumers
Value orientations are also an important factor in explaining the different attitudes and decisions of consumers. The values reflect the goals that the person sets for himself and the ways for their realization. Lifestyle plays an important role here, as it not only reflects the activities of people, their interests, and opinions but also through it a person interprets, comprehends, and predicts all his life events, aligning them with their values. Lifestyle is constantly changing and this is necessary to match both the value system and the attitudes of the individual. There are three main categories and consumer lifestyles:
The first category covers consumers who spend their money solely on meeting their primary needs, from which they are guided. Most often they have a minimum income, are on the brink of poverty, unemployed. Their interests are related to necessities and only the price is important;
Consumers who shape their behavior from external factors
The second category is consumers who shape their behavior from external factors and they are the main consumer group in the market. When they make purchases, they tend to get influenced by others. They are divided into three subtypes: belonging to others, imitating, and successful. The first two types try to gain the approval of others. They are prone to imitation and follow fashion trends, while at the same time, their attitudes are in line with the opinion of influential people. The successful have a very high income and the goods they buy must show their high position. They focus on the latest models, and love luxury and ostentation; such are the goods they buy;
The smallest group of consumers are those who are guided by their specific attitudes in their behavior, individualists, determined and impulsive, for whom the opinion of others is not important and do not comply with it. They like to experiment. For them, it is not the product itself that is important, but the process of consumption.
Sets of expectations for each person's behavior
Each of us occupies a place in groups, organizations, and institutions. Each place is associated with a certain role - a set of actions and activities that the person in a certain position is expected to perform, based on the expectations of both the individual and those around him. Because people hold multiple positions, they also have many roles. So there are several sets of expectations for each person's behavior. The roles of the individual influence both general behavior and buying behavior. The requirements of the different roles a person has can be inconsistent and confusing.
The term role is occupied by the theater. It refers to a set of behaviors that have socially conditioned functions and comply with generally accepted norms.
Ralph Linton in 1936 defines social roles as a dynamic aspect of the social status of the individual, ie. the social role is understood as the realization of the implementation of the rules and obligations, according to the social status.
The position occupied by the individual in social relations
Another popular definition of the role was formulated by Beadle and Thomas in 1966. and states that it is a position occupied by the individual in social relations. Roles require and build behavior related to a specific role, knowledge, and values needed to perform them, as well as the appropriate rank that the individual occupies in society. A similar approach to the concept of social role defines it as a normatively defined way of behavior expected by anyone who occupies a position in society.
Each role is played from a certain position in society. This position is determined by the role status. In itself, it does not depend on the role and personality it occupies. Social status determines a person's place in society and the set of rights and obligations that he performs, occupying a given status.
Status and role
The effect of role performance on the formation of the individual is indisputable and significant. The role places the individual not only in the social network among others but also builds a generalized image in his own eyes. Status and role determine a person's social identity. A social role is an expression of the status occupied, it is a sign of certain opportunities, social functions, and power. Thus it gives a social essence to the individual. Both statuses and roles have a corresponding social value. They are values with which the individual identifies, evaluations that relate not just to the role, but to himself.
Regarding the connection between the social role and status and the consumer behavior of the individual, there is a specific connection between the occupied public position and the consumer basket of the individual.
Each role is tied to specific attributes that it presupposes - symbols of the position.
A concrete example is the result of a study conducted in England and commissioned by a recruitment agency, according to which an office employee who maintains his good business image must have an iPod and two mobile phones.
About 1,500 people took part in the survey, 67% of whom said that portable devices such as laptops, flash drives, and small phones are the most important symbols of their social status. Almost half of the respondents believe that a person should have two mobile phones - one with which to conduct business conversations and one personal. As a symbol of social status, food is already considered - certain restaurants visited during lunch breaks and even the preferred varieties of coffee.
Each society is a puzzle of different social strata and groups. They have different habits, their behavior, specific interests, and preferences - from the way they dress, eat, work and rest, even party affiliations. Of particular importance are those needs, preferences, requirements, ways of making purchasing decisions that will determine their behavior in the market. Culture is a factor that marketing takes into account specifically, and in its broadest sense - one of the fundamental principles of international marketing is related to cultural differences and the adaptation of the company's marketing mix to these differences.
Sectors of the social system
People are located in specific sectors of the social system. This disposition predetermines and predetermines almost everything the individual does.
Marketers need to know how roles affect buying behavior. To develop a marketing mix that exactly matches the target market, marketers need not only to know who is making the actual purchase but also which other roles are influencing the purchase.
In their role as consumers, individuals mutually influence each other in their purchase decision. These influences can be from friends, family, from one or another group.
The effect of group influence on human behavior was developed by Professor Elton Mayo (Harvard).
Within the individual groups, its members define and perform different roles. The role is a prescribed pattern of behavior that the individual must follow in a given situation because of his position in that situation.
The personality of the individual does not determine the role of the determinant. Role behavior is determined by many characteristics - role style, role parameters, role load and overload, role conflict. Role style expresses individual differences in the performance of a role. Role parameters are a set of different types of behavior acceptable for a role.
The role load is the result of the simultaneous performance of multiple roles by the individual. When he tries to play more roles than his abilities (time, energy, money, etc.), role overload is observed. If a situation requires the performance of two different (incompatible in time) roles by the individual, he is faced with role conflict.
The application of role theory in marketing practice is mainly associated with the creation of a role-oriented product group. It is a set of products recognized as necessary for the proper performance of a role. Role-oriented product groups are important in determining both appropriate and inappropriate products for a given role. Product groups must be consistent with all parameters of role behavior.
Much of the information in the user decision-making process is obtained as a result of intra-group communications. The information is processed by one or more members of the group.: The performers of such a role are called opinion leaders. They interpret, filter, and disseminate information to other members of the group. An important situational feature for informed leaders is dissatisfaction with the product. Identifying the leaders in my opinion is the first step on the way to developing a marketing strategy. Opinion leaders cannot be easily identified because of their similar characteristics to others.
A family is a social group that plays an important role in building people's values and relationships. It is a basic functional unit in the study of consumer behavior.
Roles in the family
Sociologists distinguish three types of roles in the family, which also influence the decision to buy.
Traditional roles. In them, the woman is supposed to perform the functions of housewife and educator of the children, and the man - to create economic security, exercise family power, and make the main decisions in the family.
Friendly roles. Maintaining such a role requires mutual moral support from both spouses. Building social contacts in this structure is a function of family values, common interests, and views.
Role of partners. Such a role attitude requires both partners to have their economic contribution to the family and to share the responsibility for the children and family responsibilities. Such a model presupposes the full participation of each of the partners in decision-making in the family. The decision-making process for buying and using products in a family is extremely complex.
Participation of individual members in the purchase scenario
The participation of individual members in the purchase scenario can be characterized by the following seven roles:
- Buyers - members making the purchase; they may be different from the decision-makers
- Users - supporting
Many decisions of varying importance are made in families. The main task in the study of consumer behavior is which family member has a decisive influence on different types of decisions.
The classical theory distinguishes four models of buying in the family:
- Decisions with the domination of the spouse
- Decisions with the domination of the wife
- Syncretic decisions - the husband and wife make the decision together
- Autonomous decisions
Higher and lower social positions
In any society, people classify others into higher and lower social positions. The social class is an open group of individuals who have a similar social status. The class is "open" because people can go in and out of it. The criteria used to group people into classes vary from society to society. In our society, we use many factors, including employment, education, income, wealth, religion, race, and ethnic group.
A person who classifies someone does not need to apply all the criteria of society. The number and importance of the factors chosen depend on the personal qualities of the individual being classified and the values of the person making the classification.
Individuals in a social group develop and adopt common patterns of behavior
To some extent, individuals in a social group develop and adopt common patterns of behavior. They can have similar relationships, values, the same patterns, and properties. Social class affects many aspects of our lives. Social class determines the type, quality, and quantity of the purchased and used products, and influences the individual way of purchase, and the visited shops.
The population itself does not make the market. People must have the willingness, desire, and ability to buy.
The hidden buttons for the influence of the consumer
The main task of marketers is to find hidden buttons for the influence of the consumer. Psychological motives are perhaps the strongest mechanism for promoting consumption.
Adam Galinsky and Derek Rucker (professors at a school of management) conducted several experiments to establish the link between a sense of power and control and consumer behavior. The main conclusion is the desire of consumers with a lower power position to spend more on products that are associated with power and authority.
Consumers compensate for the feeling of helplessness and lack of strength by buying products that are perceived as signs of power. Interestingly, if the same product is not given high social status, its value in the eyes of the consumer decreases dramatically. This mechanism works only when consumers have low self-esteem in their power capabilities and when the product is presented as a sign of certain social status.
Lower social circles
Another result of the research shows that the representatives of lower social circles prefer the “explicit” consumption of luxury products - that is, they need to have the logo/brand visible.
According to the authors of the study, the lower position in the social pyramid makes people more influential than the opinions of others and therefore they want to strengthen their social status through explicit consumption of luxury products.
On the other hand, the representatives of the prestigious social strata are mainly interested in their own opinion due to their higher self-esteem. Therefore, they are not so much influenced by appeals to the authorities, but rather by the functionality of the products. Therefore, when attracting customers with high social status, the emphasis should be on the objective qualities of the product and not on its essence as a sign of power and strength.
Differentiated attitudes toward the different consumer groups
The companies have a differentiated attitude towards the different consumer groups with high, medium, and low incomes. Some companies, such as Coca-Cola, serve all three groups and their products are inexpensive and popular. But most companies focus on one of the groups or offer different products for different groups.
In almost every society there are different social classes, which are defined as relatively stable groups within society, which are arranged in a hierarchical order and are characterized by the presence of similar values, interests, and behavior of their members.
There are several characteristics of social classes:
- People belonging to the same class tend to behave almost equally;
- Depending on belonging to one or another class, people occupy a higher or lower position in society;
- The social class is determined not based on one variable, but based on the position, income, wealth, education, value orientation, and other similar characteristics of the people belonging to it;
- Individuals can move to a higher or lower class.
The social classes are characterized by preferences for goods and brands
The social classes are characterized by clear preferences for goods and brands of clothing, household items, leisure activities, and cars. That's why some marketers focus their efforts on a particular social class. The target social class presupposes a certain type of store in which the goods are to be sold, a choice of certain means of disseminating information about its advertising, and a certain type of advertising message.
The six main social classes
According to a sociological study, for example, there are six main social classes in the United States:
Upper upper class (less than 1% of the population) - the elite of society, coming from famous families and living from inherited wealth. They donate their money to charity, own more than one home, and send their children to private schools. Serve as a reference group for the other classes. The market of jewels, homes, and services for the organization of recreation and travel.
Lower upper class (about 2%) - people with free professions or businessmen receiving high incomes because of their abilities. Active in public and civil affairs, they crave recognition of their social status and demonstratively spend. They strive to move to the upper class. The market for expensive houses, yachts, swimming pools, and cars.
Upper middle class (12%) - career people with free professions, managers, and businessmen. They are concerned about spiritual life, culture, and civic life. The market for nice homes, furniture, clothing, and household utensils.
Lower middle class (30%) - employees, small entrepreneurs "working aristocracy" (plumbers, middle engineering, and technical staff of factories). They are concerned with the observance of the norms and rules of culture. Do-it-yourself market, home accessories, strict style clothing.
Upper lower class (35%) - small employees, skilled and semi-skilled workers. They are concerned about the problems of a clear division of gender roles, and about strengthening their position in society. The market for sporting goods, beer, and household goods.
Lower lower class (20%) - unskilled workers, people living on benefits. Food market, TVs, and used cars.
Many social groups
The individual is a member of many social groups. Their position in each of them can be characterized in terms of role and status. The role is a set of actions that the people around him expect from the individual. Each role has a certain status, reflecting the degree of a positive evaluation by society. One often stops one's choice of goods that speak of one's status in society. Marketers are aware of the potential for turning goods into status symbols. Such symbols turn out to be different in different social classes.
People with the same income can have completely different lifestyles. The symbols in the everyday life of a rich man could be a Ferrari car, a Rolex watch, or a Valentino suit. Another rich man could have a more conservative style, characterized by a lot of work, big savings, and reasonable expenses.
The way of life is manifested in the activities, interests, and opinions of people.
Questions and Answers
What is Marketing?
Marketing is a fundamental business function that involves identifying, anticipating, and satisfying customers' needs and wants through the creation, communication, and delivery of products or services. It encompasses various strategies and techniques aimed at promoting and selling offerings to target audiences, with the ultimate goal of achieving organizational objectives and fostering customer loyalty.
Why is Marketing essential for businesses?
Marketing plays a crucial role in the success of businesses for several reasons:
Customer Understanding: Through marketing research, businesses gain insights into their target market's preferences, behaviors, and pain points, allowing them to tailor their offerings accordingly.
Brand Awareness: Effective marketing efforts build brand awareness and recognition, ensuring that the brand remains at the forefront of consumers' minds when making purchasing decisions.
Market Differentiation: Marketing helps businesses showcase unique selling propositions, setting them apart from competitors and highlighting their value to consumers.
Customer Engagement: Engaging marketing campaigns foster connections with customers, encouraging loyalty and repeat business.
Revenue Generation: Ultimately, marketing efforts drive sales and revenue, contributing to the financial growth of the organization.
Types of Social Groups' Research
Social groups' research, within the context of marketing, involves understanding the behavior, attitudes, and preferences of specific groups of consumers based on shared characteristics. This research helps businesses target their marketing efforts more effectively and create tailored campaigns. Some common types of social groups' research include:
Demographic Research: This type of research focuses on characteristics such as age, gender, income, education, ethnicity, and marital status. Demographic segmentation helps businesses target specific groups based on their shared demographics.
Psychographic Research: Psychographic research delves into consumers' lifestyles, personalities, interests, and values. It allows businesses to understand the psychological and emotional drivers behind consumer behavior.
Geographic Research: Geographic research looks at consumers' locations, including country, region, city, or even neighborhood. It helps businesses customize marketing messages to suit different geographical areas.
Behavioral Research: Behavioral research analyzes consumers' actual purchase behaviors, brand loyalty, and usage patterns. This type of research assists in predicting future consumer actions and tailoring marketing strategies accordingly.
Generational Research: Generational research focuses on understanding the preferences and behaviors of different age groups, such as Baby Boomers, Generation X, Millennials, and Generation Z. This segmentation enables businesses to target each generation effectively.
Social Class Research: Social class research examines consumers' social standing, income levels, and lifestyle choices. It helps in crafting marketing messages that resonate with specific social classes.
How is Social Groups' Research conducted?
Social groups' research is conducted through various methods, including:
Surveys and Questionnaires: Businesses collect data through structured surveys and questionnaires, either online or in-person, to gather insights from target groups.
Focus Groups: Focus groups involve in-depth discussions with a small group of participants to gain qualitative insights into their attitudes and opinions.
Observation: Observational research involves observing consumer behavior in natural settings, providing real-time data on their actions and choices.
Secondary Data Analysis: Researchers also analyze existing data and reports from reputable sources to extract relevant information about social groups.
How can businesses utilize Social Groups' Research in Marketing Strategies?
Businesses can leverage social groups' research in marketing strategies in several ways:
Segmentation: By understanding different social groups' characteristics and preferences, businesses can segment their target audience and tailor marketing messages to each segment.
Product Development: Research insights help in developing products or services that cater to specific social group needs and preferences.
Advertising and Communication: Marketing messages can be customized to resonate with different social groups, increasing the relevance and effectiveness of advertising campaigns.
Brand Positioning: Social groups' research aids in positioning the brand in a way that aligns with the values and aspirations of the target audience.
Social Media Marketing: Understanding social group preferences on various social media platforms enables businesses to engage with their audience more effectively.
How does Digital Marketing leverage Social Groups' Research?
Digital marketing utilizes social groups' research to precisely target specific audiences through online channels. By analyzing user data, social media behavior, and online interactions, digital marketers can tailor content and advertisements to resonate with different social groups. This personalized approach enhances engagement and conversion rates, maximizing the effectiveness of digital marketing campaigns.
What are the Ethical Considerations in Social Groups' Research for Marketing?
Social groups' research in marketing raises ethical considerations, such as ensuring the privacy and confidentiality of participants' data. Researchers must obtain informed consent and avoid any form of manipulation or harm to participants. Transparent communication and ethical data handling practices are essential to maintain trust with consumers and protect their rights.
How can Cultural Differences Impact Marketing Strategies based on Social Groups' Research?
Cultural differences significantly impact marketing strategies when using social groups' research. What resonates with one social group in a particular culture may not appeal to another. Cultural sensitivity and awareness are crucial in crafting marketing messages that align with diverse cultural values, beliefs, and norms.
Why is Longitudinal Social Groups' Research Valuable for Marketing?
Longitudinal social groups' research involves studying social groups over an extended period. This approach provides deeper insights into evolving consumer behaviors, preferences, and attitudes. For marketing, longitudinal research helps identify trends and changes within social groups, enabling businesses to adapt their strategies for long-term success.
How can Businesses Leverage Social Groups' Research for Brand Loyalty Programs?
Social groups' research informs the design of effective brand loyalty programs. By understanding the motivations and preferences of different social groups, businesses can create personalized loyalty rewards and incentives that resonate with specific customer segments. This fosters brand loyalty, encourages repeat purchases, and strengthens customer relationships.
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