CHAPTER TWO

Customer Taste and

Preference

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 Marketing
 Marketing is the process by which companies create value for customers and
 build strong customer relationships in order to capture value from customers
in return
 Simply: managing profitable customer relationships
The American Marketing Association (AMA) defined Marketing Research as:

 The function which links the consumer, the customer, and public to the
marketer through INFORMATION

 It is the process of getting right product to the right place in the

right quantity at the right price and right time.
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 Marketing Planning

Marketing Planning is a systematic, structured process. It

includes:
I. Researching and analyzing the current situation.
II. Developing and documenting the firm’s objectives, strategies
and programs,
III. Implementing, evaluating and controlling marketing
activities. 04/24/2021 3
The Marketing Planning Process
 Step 1: External Analysis

External analysis involves the understanding of trends

that may impact marketing strategy:
 Demographic
 Economic Marketers also assess the firm’s capabilities and
 Technological the strategies of competitors in order to:
 Build on strengths
 Political-Legal
 Exploit competitors’ weaknesses
 Ecological
 Social-Cultural
Other Analyses
Other areas that are analyzed for their impact on
marketing strategy include:
 Customers
 Suppliers

 Distributors

 Partners, and

 Other Stakeholders
Step 2: Understand Markets and Customers

 Can be consumers or businesses

 A comprehensive understanding of the customer is

desired:
 Buying habits, needs, wants, attitudes and behaviors.
 Who?, What?, Where?, When?, Why?, How?
 Are buying patterns changing? Why?
 Step 3: Segmentation, Targeting and Positioning

 The purpose of segmentation: To group customers with similar

needs, wants, behavior or attitudes.
 Targeting: The selection of specific segments for marketing.
Can be to one segment, multiple segments, or the entire
market.
 Positioning: Using marketing to create a competitively
distinctive place (position) for the brand or product in the
mind of the targeted customers.
 Step 4: Plan Direction, Objectives, and Marketing Support

 Goals: Long-term performance targets.

 Objectives: Shorter-term targets that support the
achievement of goals.
Sustainable Marketing:
 Balancing long-term goals with short-term objectives and
budget realities.
 Balancing goals and objectives with an eye toward being
responsible to the larger society.
 Six Approaches to Growth
Based upon permutations of markets and products.

CURRENT MODIFIED INNOVATED

Market Penetration Product Development
EXISTING

EXPANDED
(Geographic)

ENTIRELY NEW

Market Development Diversification

 Step 5: Develop Marketing Strategies and Programs

 Utilizing the tools of the “marketing mix”.

 Consistent with the firm’s overall direction, goals and
strategies.
 Includes the development of strategic alliances.
 Primary Marketing Tools

The primary tools for marketing, referred to as the

“Marketing Mix” are:
 Product
 Price
 Promotion, and
 Channels
Alliance Provides Value
 Product Pricing

Based upon a number of

 Tangible good or an intangible
factors:
service.  How customers perceive the
value of the offering.
 Must be considered in a holistic  Positioning.
fashion.  Product costs.
 Competitive forces.
 Branding must also be considered.  Objectives of the
organization.
04/24/2021 15
 Cont.…
 Market research can provide managers with the information they need to answer a

wide range of questions, including:-

 Who are my customers?

Where are they located?

How can I reach them?

How much and how often will they buy?

What product attributes do they prefer?

Who are my competitors?

What are their strengths and weaknesses?

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What are the opportunities and threats in the market?

 Marketing Research Components

Market Size - number or value of units sold to a market in a

given period.

Market Share - a specific company’s share of the market size.

Market Penetration - the percent of customers won by the

company

Brand Equity Research - how favorably do consumers view the

brand? 04/24/2021 17
 Cont.…

 Buyer Decision Processes Research - to determine what motivates

people to buy and what decision-making process they use.

 Customer Satisfaction Research – to determine the level of

customer satisfaction.

 Distribution Channel Audits - to assess distributors’ and retailers’

attitudes toward a product, brand, or company

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 Cont.….

 Positioning Research - how does the target market see the brand
relative to competitors?

 Price Elasticity Testing - to determine how sensitive customers

are to price changes.

 Sales Forecasting - to determine the expected level of sales

based on a given level of demand.

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 Cont.…

Segmentation Research - to determine the demographic,

psychographic, and behavioral characteristics of potential
buyers.

Test Marketing Research - a research on a small-scale

product launch to determine the likely acceptance of
the product when it is introduced into a wider market.
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Marketing research process

The marketing research process consists of four

steps:
A. Defining the problem and research objectives;

B. Developing the research plan;

C. Implementing the research plan; and

D. Interpreting and reporting the findings,

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 Cont.….

A. Defining the problem and research objectives;

 Defining the problem and research objectives is often the hardest
step in the research process.

A manager may know that some thing is wrong, without knowing

the specific cause; e.g. Poor product quality caused. falling sales

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Cont.….

The following are some points the researcher should

diagnose to define the problem:
Where do potential customers buy the product?
Why they purchase there?
What is the size of the market? how much of it can your
business capture?
How does your business compare with competitors?
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Cont.….

 The impact of promotion on customers?

 What type of products is desired by potential customers?
A marketing research project have one of three types of
objective
1. The objective of exploratory research is to gather preliminary
information that will help to define the problem and suggest
hypotheses.

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Cont.….

2. The objective of descriptive research is to describe things such

as the market potential for a product or the demographics and
attitudes of consumers who buy the product.

3. The objective of causal research is to test hypotheses about

cause and effect relationships. E.g. 10 per cent cut in T-shirt prices
increase sales sufficiently to offset the lost margin.

 market researches often start with exploratory research and

later follow with descriptive or causal research.
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 Cont.….
A. Defining the problem and research objectives;

B. Developing the research plan;

C. Implementing the research plan; and
B) Developing the research plan D. Interpreting and reporting the findings,

 Research plan is blueprint for conducting the research.

The research plan outlines:-

 Sources of existing data.

 Explains the specific research approaches and Contact methods.

 Sampling plans and instruments that researchers will use to gather

new data. 04/24/2021 26
Cont.…..

 Primary Data: Information collected for the specific purpose at

hand.

Primary data collection could be:-

 Through qualitative research that measures a small sample of
customers' views, or

 Quantitative research that provides statistics from a large

sample of consumers. 04/24/2021 27
Cont.….
primary data collection needs a number of decisions on research
approaches, contact methods, sampling plan and research
instruments.

Research Approaches
1. Observational research is gathering of primary data by
observing relevant people, actions and situations.
 It is an exploratory research.

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 Cont.….
Determining Information Needs
 Translating research objectives into specific information needs.
Secondary data: Information that already exists somewhere,
having been collected for another purpose.

Sources of secondary data:

Internal sources - company profit and loss statements, balance
sheets, sales figures, sales call reports, invoices, inventory records
and prior research reports. 04/24/2021 29
 Cont.….

 Published and unpublished documents, marketing journals.

 Business Statistics, Census of Manufacturers, Census of Population,
Census of Retail Trade, Wholesale Trade etc.
 The researcher should evaluate secondary information carefully for
its relevance with his current research title.
 The information should be accurate, current impartial.

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 Cont.….

E.g. A bank evaluates possible new branch locations by checking

traffic patterns, neighbourhood conditions and the locations of
competing branches.

2. Experimental Research – gathering primary data by selecting

matched groups of subjects, giving them different treatments,
controlling related factors and checking for differences in group
responses.

 Explains cause and effect relationships – causal research

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Cont.….

3. Survey Research - Asking individuals about attitudes,

preferences or buying behaviors.
 It is a descriptive research
Contact Methods:-
 Mail, telephone, personal interviews and the Internet

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Sampling Plans
 Sample is a segment of the population selected for marketing
research to represent the population as a whole.
Sampling needs three decisions:
Who is to be surveyed - what sampling unit?
How many people are to be surveyed - what sample
size?
how are the people in the sample to be chosen - what
sampling procedure? Probability or non-probability
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 Cont.….

 Research instruments - mechanical devices and questionnaire.

 People meter attached to television sets in selected homes to record

who watches which programmes.

 Closed-end questions - questions that include all the possible answers

and allow subjects to make choices among them.

 open-end questions - questions that allow respondents to answer in their

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own words.
 A. Defining the problem
C) Implementing the research plan
and research
objectives;
 Collection of Data – primary or/and secondary B. Developing the
research plan;
data
C. Implementing the
 Processing of Data – entering, editing, coding, research plan; and
D. Interpreting and
transcription, and verification of data. reporting the findings,

 Analyzing the Data - giving meaning to the

data that have been collected and processed.

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 A. Defining the problem and research objectives;
D) Interpreting and B. Developing the research plan;

reporting the findings C. Implementing the research plan; and

D. Interpreting and reporting the findings,

Interpret the Findings
 Interpretation is an important phase of the marketing process.
 Best research will be meaningless if the manager blindly accepts

wrong interpretations from the researcher, or

 If managers have biased interpretations - tend to accept
research results that show what they expected and to reject
those that they did not expect or hope for. 04/24/2021 36
 Cont.….

Draw Conclusions – summary of the implications of the major

findings with respect to the objective of the research.
Report to Management
Report includes:-
Statement of the problem
The specific research questions and
objectives identified

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 Consumer tastes and preferences

 To be competitive in the global market in textile and apparel

sectors, now a days
 It is essential to know consumer tastes and preferences
/customer needs
 Customer requires quality products with low price and shortest
delivery time.
 In textile, apparel and fashion industry, customer needs are much
flexible.
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 Cont.…

 product life cycle must be very short to stay competitive in

market.

 Companies can not survive in the market unless they really

research consumer tastes and preferences

 Investigate customer tastes/needs and prioritize these needs.

 An increase in cotton blend may provide a higher level of utility

from the purchase of khaki trousers, 04/24/2021 39
Cont.…
 For goods such as shirts, consumers may seek other attributes such as
wrinkle-free, which require lower cotton blends.
 For the same product, say a shirt, a higher cotton blend is preferred to
lower cotton blend.
(i.e., wrinkle-free) in hot weather conditions, which may not be the case
during cold weather.
 New products are developed to meet changing consumer preferences/choice.
 Market research is a vital tool to understand customer tastes and
preferences. 04/24/2021 40
Understanding Consumer Adoption Of New Products

 It is Important to understand consumer behaviour about new

products when targeting a niche segment.
 New Product - a good, service or idea that is perceived by some
potential customers as new.
 Adoption Process - the mental process through -which an
individual passes from first hearing about an innovation to final
adoption.
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Cont.…

 Adoption - the decision by an individual to become a regular user of

the product.

Stages in the Adoption Process

 Consumers go through five stages in the process of adopting a new
product:

1. Awareness - the consumer becomes aware of the new product, but

lacks information about it.

2. Interest - the consumer seeks information about the new product.

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 Cont.…

3. Evaluation - the consumer considers whether trying the new

product makes sense.
4. Trial - the consumer tries the new product on a small scale to
improve his or her estimate of its value.
5. Adoption - the consumer decides to make full and regular use of
the new product.
o This model suggests that the new-product marketer should think
about how to help consumers move through these stages.
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 Cont.…..

 People differ greatly in their readiness to try new products.

 In each product area, there are 'consumption pioneers‘ - early

adopters and late adopters.

 After a slow start, an increasing number of people adopt the new

product.

 The number of adopters reaches a peak and then drops off as

fewer non-adopters remain.
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Adopter Categories
Innovator – are adventurous - very eager to try new ideas and
 take risks that products may fail

 account for 2.5% of consumers

Early Adopter
 Leaders who have a reputation for choosing successful ideas
carefully – are opinion leaders in their community

 see strategic advantage in adopting an innovation

 accounts for 13.5% 04/24/2021 45

 Cont.…

Early Majority
 Follow in adopting an innovation,
 But make a deliberate decision to adopt
 Adopt new products before the average person
 accounts for 34%

Late Majority
 Sceptics who adopt after innovation becomes norm,
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 Innovating firm should, therefore, research the characteristics of
innovators and early adopters and should direct marketing efforts
to them.

 Manufacturers of products and brands subject to strong group

influence must find out how to reach the opinion leaders in the
relevant reference groups.

 Opinion leaders are people within a reference group who, because

of special skills, knowledge, personality or other characteristics,
exert influence on others. 04/24/2021 47
 Cont.……
 Opinion leaders are found in all strata of society and one person
may be an opinion leader in certain product areas and an opinion
follower in others.

 Marketers should try to identify the personal characteristics of

opinion leaders for their products.

 determine what media they use and direct messages at them.

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Cont.……

 Influence of Product Characteristics on Rate of Adoption

 The characteristics of the new product affect its rate of

adoption.

 Some products catch on almost overnight.

 whereas others take a long time to gain acceptance.

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  Five characteristics are especially important in influencing an
innovation's rate of adoption.

1. Relative advantage: the degree to which the innovation appears

superior to existing products.

 The greater the perceived relative advantage of using the new

product - the sooner it will be adopted.

2. Compatibility: the degree to which the innovation fits the values

and experiences of potential consumers.

3. Complexity: the degree to which the innovation is difficult to

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understand or use.
Cont.….

4. Divisibility: the degree to which the innovation may be tried on a

limited basis – unless it is divisible to test it on one segment, it may
require big investment.

5. Communicability: the degree to which the results of using the

innovation can be observed or described to others.

 Other characteristics influence the rate of adoption, such as initial

and on-going costs, risk and uncertainty, social approval and the
efforts of opinion leaders. 04/24/2021 51
Use of resources to satisfy the needs of consumer in the textile
sector

 In textile sector product design team can go for a variety of

strategies to satisfy the needs of customers through new product
development.

 Based on the need of customers, the design team can make use of
different available resources.

 The use of different color combinations is one of the available

ways to satisfy customer needs. 04/24/2021 52
 Different people have different choices of color/color combinations.
 This can be applied during printing or dyeing of the textile materials
(fiber, yarn or fabric).
 The use of different fabric weaves (twill, satin, plain, …) is also another
way to develop new products to satisfy customer needs.

 If a factory initially producing plain fabrics started the production of twill

fabrics according to the need of its customers, then we can say that the factory
has produced new products.

 In general, to go for new products, factories can also vary the size of their
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products.
 If a factory which is producing a 120cm wide bed sheet changes the
size of its product to 150cm, then we can say that the later one is a
new product. Thus, varying product dimension is also one of the
available means for a textile producing company to satisfy their
customers.
There are different types of fibers that a textile factory can use as
a raw material. In general fibers can be divided natural and manmade
fibers.

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 There are lots of manmade fibers with different physical and
chemical properties. There are also different natural fibers with
different characteristics.
 Changing raw material type (or their mixing proportions) can also
be used to produce new products.
 Changing the properties of yarns by varying the different
production parameters, fiber characteristics and types can lead
to the production of new products.
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 A garment factory producing fashion garments for men can go for

women fashions, widen the age groups, income levels, locations of

consumers it target, can continuously reduce the cycle time of new

fashions so that consumers can not get a product in market for

second time, it can cut costs of production via continuous process

redesign, mass production to exploit benefit of economies of scale

etc.
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 Production of Variety of Textile Products at Economical Costs

 
 

Reading Assignment – 1

production of textile materials involves many sequential processes:- spinning,

weaving, knitting and wet processing and finishing being the major ones. select
one of the processes and develop new products employing cost reduction.
Assume any intermediate product or process designed at a reduced cost but
giving same service as its ancestor product or process is new. Work
individually, on time submission is compulsory. (Sub. Date: two weeks later)
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k y
h a n
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