Understanding Local

Customers
VIONA CHARISTA
212019506
• Local Buyer Behavior
• Basics The Consumer Decision Process
• Local Market Research
• Local Products Segmentation
• How New Brands Change Perception
• Three Market Environments Takeaways
LOCAL BUYER BEHAVIOR
LOCAL BUYER BEHAVIOR
•Relative Income hypothesis
•Permanent income
•Conspicuous consumption
BASIC CONSUMER DECISION PROCESS
A problem is when an individual perceives a difference between an
ideal and an actual state of affairs
New products often lead to tension and a recognized
“problem”
• A consumer’s search for alternative ways to solve the problem is closely
related to his or her level of involvement with the product category
• For product with which involvement is high, search tends to be more comprehensive and
time consuming
• For convenience and habit purchases, the decision process is shorter, with little need for
extensive searches or alternative evaluations
• When a new product or service is in the “consideration set”
• A highly involved individual will process the available information matching the pros
and cons of the alternatives against preferences
• Consumers can deal with multi-attribute evaluations in several ways:
• They can use gradually less-important features to successively screen out alternatives
• A “hierarchical” decision rule
• They can consider all features simultaneously:
• A “compensatory” rule (hard to do).
• The final choice of which alternative to select or try is typically influenced
by social norms and by situational factors
• Social Norms
• Where group pressures to comply are strong social norms influence is expected to
override multiattributed evaluation
• The social norms can be usefully analyzed by the extended Fishbein model
• The social norms involve two aspects
• Social forces
• Motivation to comply
Customer satisfaction is particularly important in mature markets where choices are
many and the needs are already well met.
 Satisfaction engenders loyalty to the brand and to the company.
 Buying is typically a risky choice between different brands, the marketer has to make
sure that the customer does not encounter cognitive dissonance, a sense of possibly
making the wrong choice.
 One approach is to get satisfied customers to endorse the product, a common strategy in
advertising.
A Strong Brand Simplifies the Decision
Process
REDUCES INFORMATION SEARCH
REDUCES PERCEIVED RISK
PLACES A BRAND IN THE EVOKED CONSIDERATION SET MORE EASILY
BRAND LOYALTY MEANS DECISIONS GO FAST.

A GLOBAL BRAND CAN FOCUS ON INFLUENCING:

ATTITUDES
SOCIAL NORMS
P-O-P (Point-of-Purchase) BEHAVIOR
 Problem Secondary data
definition
Exploratory Qualitative
research
Research Descriptive Consumer surveys
design

LOCAL MARKET
Causal Trade surveys
Measurement/
scaling

RESEARCH Questionnaire
Observation

construction Experiments

Sampling Causal Models

Data
Fieldwork analysis
LOCAL MARKET RESEARCH

Secondary data

Exploratory Qualitative
research
LOCAL MARKET RESEARCH

Descriptive Consumer surveys

Trade surveys

Observation
 Problem Secondary data
definition
Exploratory Qualitative
research
Research Descriptive Consumer surveys
design

LOCAL MARKET
Causal Trade surveys
Measurement/
scaling

RESEARCH Questionnaire
Observation

construction Experiments

Sampling Causal Models

Data
Fieldwork analysis
LOCAL PRODUCTS SEGMENTATION
The most useful segmentation criteria are those that fulfill three things:
- criteria that help identify factors that influence segment buying
behavior;
- criteria should be reflected in published data so that segment sizes
can be calculated;
- the criteria should facilitate the selection of adequate media in which
marketers can communicate with the segment.
LOCAL PRODUCTS SEGMENTATION
• The most common bases for segmentation are
economy, demographics, values, ethnicity, peer groups, lifestyle, and
benefits.
How New Brands Change Perception
THERE ARE THREE DIFFERENT EFFECTS ON BUYERS WHEN A GLOBALLY
STANDARDIZED PRODUCT OR BRAND IS INTRODUCED ON A LOCAL
MARKET:
• 1. THE NEW BRAND SIMPLY TARGETS ONE UNTAPPED SEGMENT. (A
NEW OPTION FOR AN UNFILLED NEED).
• 2. CONSUMERS CHANGE THEIR PERCEPTIONS, LEARNING ABOUT
FEATURES THAT THEY DID NOT KNOW ABOUT (INTERNET ACCESS ON
CELL PHONES).
• 3. BUYER PREFERENCES ARE CHANGED. (PENT-UP DEMAND FOR A
PREVIOUSLY UNAVAILABLE BRAND).
LOCAL MIS-POSITIONING
IF THE NEW PRODUCT OR BRAND FAILS TO CHANGE THE MARKET
PREFERENCES TO THEIR ADVANTAGE, THERE ARE THREE REASONS
WHY LOCAL CONSUMERS MIGHT CHOOSE IT:
• BRAND IMAGE
• COUNTRY OF ORIGIN
- country of origin effect
- country of origin bias
• LOWER PRICE
THREE LOCAL MARKET
ENVIRONMENTS
EMERGING NEW GROWTH MATURE
 Feature Emerging New growth Mature

Life cycle stage Intro Growth Mature

Tariff barriers High Medium Low

Nontariff barriers High High Medium

Domestic competition Weak Getting stronger Strong
DOMINANT Foreign competitors Weak Strong Strong
MARKET FEATURESFinancial institutions Weak Strong Strong
Consumer markets Embryonic Strong Saturated
Industrial markets Getting stronger Strong Strong
Political risk High Medium Low
Distribution Weak Getting stronger Strong
Media advertising Weak Strong In-store
promotion
DOMINANT MARKET FEATURES
product/market situation
task emerging new growth mature
marketing analysis
research focus feasibility economics segmentation
primary data sources visits middlemen respondents
customer analysis needs aspirations satisfaction
segmentation base income demographics life style
marketing strategy
strategic focus market development participation in growth compete for share
competitive focus lead/follow domestic/foreign strengths/weaknesses
product line low end limited wide
product design basic advanced adapted
new product intro rare selective fast
pricing affordable status value
advertising awareness image value-added
distribution build-up penetrate convenience
promotion awareness trial value
service extra desired required
THANK YOU