Comparison of the characteristics of consumer’s buying behavior of BMW and KIA

Posted: August 22, 2011 in Marketing

MARKETING

by me.

According to the current environment the marketing world has become more complex and highly developed due to the increasing number of competitors and alternative products for an organization (Levine & Benjamin, 2010). Due to this complexity every organization spends more and more money on advertising and promotions of their product/s. As a result consumers’ exposed into hundreds of thousands of advertisements every day. “Will those consumers get what is saying in each and every advertisement?” The definite answer would be “no, they won’t”. People absorb only the advertisements which are relevant to them. That is called “selective Perception”.  For example, consumers who are looking at a car advertisement are more likely to be the consumers who are willing to buy a car in the near future and the consumers who are recently bought a new car will never get anything from a car advertisement.  Moreover, even the organization produced a highly attractive advertisement the consumer might remember only the attractive part (for example the funny part of a funny advertisement) of that advertisement and forget the brand or the product. Organizations have to identify the group of consumers who are willing to buy or who can be persuaded to buy a particular product in order to make their marketing campaigns to be efficient and effective.  Customers are different from each other (Cahill, 1997). In terms of their needs, wants, values, attitudes, perceptions, education level, social background etc. Marketers choose the relevant marketing mix (product, place, price, promotion) and adjust the content for their marketing campaigns according to the perception of the target market about the nature of that offer (Simkin, 1998). Therefore, profiling the target market and determining the characteristics of consumer’s buying decision are vital for deciding appropriate strategies used in their marketing plan. The purpose of this critical essay is to profile the target markets and identify the consumer behavior of two car manufacturing companies BMW and KIA, where those two companies have to market their product for two distinct types of consumers’ based on the quality and the price of their product.

The consumers of both BMW and KIA can be segmented using the characteristics which were common for a group of people. Green and Stager (Cited in Musyoka et.al, 2007) defined market segmentation as “the process by which a market is divided into segments based on the homogeneity of responses of customers to marketing-mix strategies”. The primary objectives of segmentation includes it is easier to locate and address the small group of consumers or potential buyers who have common characteristics rather than considering the whole population around the country (Musyoka et.al, 2007). After the segmentation it will identify the most potential segment or segments out of all the segments and focus the marketing plan only on those selected segment or segments. Those selected segments are called target markets. Cahill (1997) defines target market as “the most basic, simply the market or submarket (such as a segment) at which the firm aims its marketing message(s)”. Target markets of those car manufacturing companies can be profiled using demographic, psychological, and behavioral factors. After identifying the target market it will position the product using the characteristics of target market and carries out the marketing campaign by promoting the position of the product.

The demographic factors for BMW and KIA include consumers’ age, income, and occupation and it helps to identify what kind of consumers are more likely to buy a BMW or KIA. Since BMW cars are very expensive they would definitely consider the age of the customers. For example, buying a Beemer can be an expensive purchase, so they would target ‘baby boomers’ since most of them might have good savings to afford for a highly expensive car. In contrast the KIA’s target market might consists of bachelors who just started their careers and the low income earners in other word they are targeting price sensitive consumers and the consumers who are trying to save more money than spend their money. For example in most of the KIA ads they put the price of their cars but in BMW ads they are unlikely to put the price of their cars. That is because BMW is targeting less or no price sensitive consumers. Also the phrases which express extra ordinary features such as “soccer momma”, “Heavyweight Power” and “Racecars shouldn’t be confined to racetracks” attract young people. In contrast KIA just put the basic features that are expecting young people to buy such as air conditioning and CD players to attract them. The income and occupation factors are very important to profile the target market for BMW. For example Melbourne agent for the BMW is more likely to have a big showroom in Toorak and/or surrounding suburbs since it is considered as the highest income suburb in Victoria (Wikipedia, 2010) and it will target higher income earners mainly the entrepreneurs and the people who do white collar jobs like finance managers, executive officers or company directors while the dealer of KIA would consider to open more car sales in the suburbs like Dandenong where the most of the lower income or the people who do blue collar jobs resides.

The psychographics factors helps to identify why a consumer choose a BMW instead of KIA or vice versa. That would include socioeconomic standing, personality characteristics and lifestyles. BMW would focus on upper and upper middle class peoples since they are the people who can afford for such an expensive car while KIA mainly target middle or average class people. Also the person who goes for BMW actually might not have any interest on buying it. May be he just want to show off his spending power or he might think it as a necessary for his prestige. Motivation is the key factor for this. We can explain this using Maslow’s hierarchy of needs theory. People are trying to satisfy their physiological, safety, social, esteem and self-actualization needs respectively. For example People who have satisfied up to their social needs motivated to satisfy their esteem needs. For that they need recognition, status and prestige. Most people think that a car is a status symbol. So those people were motivated to buy an expensive car like Beemer while the people who are still satisfying their safety needs or social needs were not motivated to buy such a car since they have many other things to buy to be fully satisfied within current stage. So they are happy to buy a KIA. Grouping the people according to their personality types is another very important factor for profiling a target market. For example car manufactures can offer test drives for the people who are more sensible than the people who are intuitive. Another example is the dealers need to give more detailed information about the car to the people who are more introverted than for the people who are more extroverted. Lifestyle factor is also very important to profile target markets. For instance BMW cars mainly target for the people who are seeking luxurious lives, for the people who are not just buying a car for transportation needs. According to the value segments introduced by Levine & Benjamin (2010) the most suitable segment to market BMWs are ‘visible achievement’ and ‘Conventional family’ groups. They are the people who always care about the rich look, quality, extraordinary features and value for money rather than the price of the car (Levine & Benjamin, 2010). So the advertisements of BMW should convince the quality of their cars and its extraordinary features (BMWad1, 2010) and most importantly safety (BMWad2, 2010) of their cars to get the attention of conventional families (BMWad2, 2010). On the other hand KIA’s target market is ordinary people and ordinary families. They need a car just as a means of transportation. They are just looking for a fancy looking car with some basic options or features such as good music players. That’s why KIA uses ordinary families and peoples who are singing inside their cars with noisy music on their CD players in their advertisements (KIAad1, 2010). According to another theory called VALs typology, consumer behaviors are influenced by eight different set of psychological traits. Those eight types are innovators, thinkers, believers, achievers, strivers, experiencers, makers and survivors. BMW would target ‘innovators’ and ‘thinker’ since they have lots of resources and use innovative advertisements to attract them. KIA might target ‘strivers’ since they consider about their financial ability before purchase a product and advertise by presenting the price to attract them. Also they are likely to target ‘experiencers’. Since experiencers like good looking cool stuffs KIA use cute animations and fancy music to attract them (Strategic Business Insights, 2010).

The behavioral segmentation factors show the relationship of the people’s behavior and the product. This includes attitudes, benefits and loyalty. Attitude segmentation involves the dividing of consumers using their attitude towards the product. Consumers might be “enthusiastic, positive, indifferent, negative or hostile towards a product” (Adam & Armstrong, 2009, p.238). For example there may be people who had a bad experience with KIA cars in the past. So they might have hostile attitude towards the KIA cars. Consumers of BMW cars can customize their own cars before purchasing it. So they can add or remove color, design, options and features of their wish. This enables to reduce the post purchase negative feelings towards the product since they can remove all the things that they don’t like and include everything they like. So the people who had had a BMW in the past are more likely to have a positive attitude toward the brand in the present. “An attitude describes a person’s relatively consistent evaluations, feelings and tendencies towards and object or an idea.” (Adam & Armstrong, 2009, p.168) Tri-component attitude model suggest three components of an attitude namely cognitive, affective and conative. Cognitive is the thoughts or beliefs about the product, affective is feeling about the product and conative is the action or the purchase of the product. For example generally people believe BMW cars are high quality luxury cars where KIA cars are less quality cheap cars. So the people who need a quality product might believe that BMWs are perfect for them to buy while price sensitive buyers believe KIA is a good car to buy. “Benefit segmentation is a technique to differentiate and group customers on the basis of the benefits they desire or seek.” (Koh et.al., 2010). Lewis (Cited in Koh et.al. 2010) found that benefits can be sensory, rational or emotional. It can be evaluate by looking whether there is a desirable change in condition of the group, maintain a desirable condition or realization of such a condition of the group. For example BMW would identify the benefits of buying its car as luxurious feeling and safe drive while the benefits for KIA customers might be just saves their time and ease of transportation. Customer loyalty is a prominent factor for any successful business. They are less price-sensitive.Theyalways stay with the brand or increase the number of purchases and also they persuade people around them to purchase a particular brand (Rowley & Dawes, 2000).

Stanton et. al. (1994) defined product positioning as the “image that the product projects in relation to competitive products as well as to other products marketed by the same company.” For example BMW series 1 would position it as compact, fuel efficient, agile and versatile car which will target for singles or bachelors or even old peoples since they are easy to park and handle while series 6 or series M would position as sport cars and target the people who think them as sport loving cool peoples. KIA would position its Soul model as small fuel efficient cute car and Carnival as a family car.

In conclusion, generally people cannot remember each and every advertisement they see. So it is important to identify the consumers and potential consumers of a particular product in order to carry out an effective and efficient marketing campaign. The method of choosing the potential consumers starts with segmentation. Segmentation is dividing the population using a common characteristic among group of people which might be demographic, psychological or behavioral. Then choose the most appropriate segment or segments out of all the segments and those segments will then be called target markets. Also it is important to identify the characteristics which influence the consumer’s buying decision. The theories like Maslow’s hierarchy of needs, Tri-component attitude model and VALs typology are some of the important concepts which used to identify such characteristics which influence consumers buying decisions. After profiling the target market the next step is to position the product based on the target markets. If the company has variety of products they can position each and every product based on its main features or characteristics. Or even a company which makes only one product can position that individual product for different target markets using different benefits or features of that product.

REFERENCE LIST
BIBLIOGRAPHY
  • BMW  2010, The international BMW website, viewed 1 September 2010, <http://www.bmw.com/com/en/index.html>
  • Gosnay, R. and Richardson N., 2008, Develop your Marketing Skills, Replika Press Pvt Ltd, India.
  • KIA, 2010, KIA Motors, viewed 1 September 2010<http://www.kia.com.au/>
  • Rix, P., 2007, Marketing a Practical Approach, 6thedn, McGraw-Hill Australia Pty Ltd, NSW.
  • Rose, P., 1991, Basic Marketing, 3rdedn, The Dunmore Press Ltd, New Zealand.
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