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04/22/2012

Consumer Profiling


Consumer Profiling

 

Executive Summary

This paper discusses the profile and market segments of clients of Applebee’s Neighborhood Grill and Bar Restaurant. The discussion illustrates the needs of Applebee to manage and profile their target market. The discussion shows that the needs can be in the form of a need for good food, a need for excellent service and the need for commendable prices. The decision on needs can be affected by alternatives, the purchase process and the evaluation of the purchase process. Given that the goal of a business is to provide a beneficial experience for the customer, businesses and industries alike must make sure that there will always be a positive type of experience for clients. Doing this will ensure that Applebee’s Neighborhood Grill and Bar Restaurant will have a good financial future. In most transactions, clients do not have to divulge all information to a company but in latter transactions people have to do so because of the need for information during the purchase and delivery stages. The information that is given during purchase can affect the purchasing decisions by clients. Not all clients would be thrilled to divulge information to businesses. Usually clients learn from their experiences while they purchase something. Their purchase experiences also hone their decision making skills.  The clients use their experiences to evaluate the results of any purchase they made. Any purchase action that they see as negative thing can lead them to feel dissatisfied and can force them to think over their decision making processes. A customer will buy a product if he or she notices that the purchase will lead to more benefits than problems. Most consumers’ behavior will change on the account of the satisfaction of their interest. Applebee’s Neighborhood Grill and Bar Restaurant make sure that clients can only see the benefits of a product or service than the risks that will be encountered when buying it. The better the firm can highlight a product’s benefit, the more chances they will achieve success.

 

Recap of Part 1

In this assignment, it will be summarize the key results from Part 1. Basically, Part 1 describes and illustrates the profile of clients in the restaurant business. In order to achieve the goal of the paper in Part 10 i.e. to identify the profile of clients, three (3) personalities were interviewed. Actually, the first interviewee was a 30 year old computer programmer. He stated that great food and service was the main reason why he prefers restaurants over fast food and other services. When he was asked to comment on what he felt after availing the restaurant service, the interviewee said that the kind of service and food offered to him endeared him more to the restaurant. Apparently, the second interviewee was a 35 year old bank manager that rarely dines in restaurants, again this patron was also asked to comment on what she felt after availing the restaurant service, and the bank manager said that the she will only come back to the restaurant if the service equals the pricing of their food products. This reflects to the idea that this client was not fully satisfied with the services of the restaurant and doesn’t think that their services equal the pricing of the product. Moreover, the third interviewee was a 28 year old office clerk that occasionally dines in restaurants. In this interview, the office clerk said that the restaurant’s price is at par with the services they provided. She said that she might come back and avail of the restaurant’s services. The needs of each client affect the information that they search and the criteria of the alternatives they might consider. A need for good food will lead to a criterion that centers on food. A need for good service will lead to a criterion that centers on excellent service. Each client’s need is affected not only by the information available but his/her personal experiences. The personal experiences of the client would affect their desire and need, it would change the client’s outlook and focus on information needed. Clients of restaurants have need that centers on a certain process or aspect of the business. The needs can be in the form of a need for good food, a need for excellent service and the need for commendable prices

 

Segmentation of the market

According to (Blackwell et al. 2007, p. 37), segmentation is based on identifying and appealing to consumers with similar behavior, whereby consumer characteristics can be used as proxies for behavior. From the information given in part 1, the context of the market segmentation for this company will be the Psychographics.  Psychographics includes social class, lifestyle, and personality variables that determine the customer profile (Chiagouris & Kahle, 1997). Aside from this, the segmentation for the said business was divided into two categories i.e. internal and external. Internal segments talks more on consumer resources, motivation, knowledge, attitudes, and personality/values/life style. On the other hand, external segments were about cultural, social class, personal and group influences.

Target segment to build consumer profile

The target segment to build the consumer profile is psychographic, this segmentation bases is most suitable to segment the market of a restaurant business. The market can be segmented into three target populations:

·         Local Individuals: people of the area that love to dine in restaurants.

·         Families: a group of people, either friends or a group of nuclear relatives who eating and drinking together.

·         Tourist: people that are not locally from the area but prefer and enjoy eating food delicacies of the area.

The restaurant customers are individuals between the ages of 16 and 64, making up 76.7% of Singapore.  Age is not the most defined demographic of this customer base; all age groups including kids less than 10 years of age can also enjoy Applebee’s Neighborhood Grill and Bar Restaurant since they may also serve burger, pasta, hotdogs and patties.  The most defined characteristic of the target market is income.  Applebee’s Neighborhood Grill and Bar Restaurant have been very successful in high rent, mixed-use urban areas.  These areas have a large day and night population consisting of business people and families who have average household disposable income.

            Combining several key demographic factors, Applebee’s Neighborhood Grill and Bar Restaurant arrives at a profile of the primary customer as follows:

·         Sophisticated families who live nearby.

·         Young professionals who work close to the location.

·         Pasta, burger, Asian delicacies lovers who patronize the excellent food and beverages.

 

Profile the target segment

Consumer profiles can be developed by determining the characteristics and environmental influences that influence consumer decision making (adapted from Radder et al.2006). To build the target segment psychographic have been chosen in the consumer profile. Psychographic is to measure through lifestyle and provide quantitative measures that using large samples in the market segments. Psychographic helps to segment and target consumers for new and existing products. There will be internal and external influences on the decision making. The concepts such as motivation and personality, perception, learning, values, beliefs and attitudes, and lifestyle are useful for interpreting buying processes and directing marketing efforts. The product is almond milk concentrate and its advantage is to firm and smooth our skin.

Internal

Consumer resources - The consumer resources involved in decision making includes the evaluation of purchase process, the availability of information, the comments from other restaurant consumers and the perception of the product. The evaluation of purchase process serves as a clearer consumer resource that depicts what will be the benefit of the product and why should the product be purchased. The availability of information serves as a resource that focuses on understanding the knowledge of the product/service and the number of people that availed such product. The comments of other consumers and its perception give a wider perspective of the product and the views of others towards the products. It gives an idea of why a product should or should not be purchased.

Motivation - Desire has been a taboo word in consumer research. Two legacies of the economic and psychological parentage of the field of consumer research are its slowly disappearing cognitive information processing bias and its rationalization of consumer choice as a process of need fulfillment. The homeostatic tension-reducing model of consumer motivation that underlies this orientation has occasionally been challenged by pleas to consider hedonic pleasure seeking, variety seeking, or experiential consumption. But even in these cases it is more the object of needs rather than the nature of the motivational process itself that is questioned. The difference between needs and desires is not simply their intensity or emotionality, but their basic perceived nature. Need is perceived to originate internally; desire externally. Needs push, desires pull. Needs offer a rational explanation of behavior; desires do not (Huffman, Mick & Ratneshwar, 2000). The motivation to make a decision differs among individuals. Some are motivated by the kind of food a restaurant can offer, some are motivated by the kind of others while others are motivated by the pricing used. The motivations of an individual affect the desire to achieve the need. If a business can properly motivate a person to have an insatiable desire to achieve the need then clients would do everything to achieve the needs. 

Knowledge - Three levels of consumer knowledge are combined to form a simple, hierarchical chain of associations. The chain includes Attributes, Consequences and Values. The set of associations is called a means-end chain because consumers see the product and its attributes as a means to an end. The desired end involves satisfaction of self-relevant consequences and values. The chain is the set of connections or linkages between attributes, consequences, and values. These linkages or associations have a hierarchical quality in that they connect concepts at a more concrete level of meaning to concepts at a more abstract level. The means-end approach implies that product attributes, per se, have little or no importance or relevance to consumers. Instead, attributes have meaning and value for consumers largely in terms of the consequences they are perceived to bring about. The end consequence in a means-end chain is often a personal goal or a life value the consumer is striving to achieve (Reynolds & Olson, 2001). The knowledge of a consumer about a product or service will affect the decision of clients. If the consumer has gain knowledge of a poor service then that will dissuade them of availing of the restaurant’s services. If the consumer has gain knowledge of poor food choices then they will not go to the restaurant. Moreover if the consumer has gain knowledge of bad pricing system then they will avoid going into the restaurant.

Attitudes - The traditional information processing perspective predicts brand attitude would be modified by critically evaluating the attributes of the brand given in the commercial. In order to critically evaluate the information being provided about the brand, the viewer needs to know to what product category this brand belongs. One aim of advertising is to influence consumer preference; it is presumed that changes in preference will involve changes in attitudes, cognitions, and behaviors (Abram & Hawkes, 2003). Consumer preference can be inferred from behavior, but more often preference is assessed through verbal measures of consumer attitudes or of cognitive responses. Consumer attitudes and cognitions have long been accorded central roles as mediators of advertising effects; the persuasive content of advertising influences attitudes and cognitions which in turn influence consumption behavior Research and theory concerning attitude formation and change has tended to emphasize the cognitive aspects of attitudes and has placed little or no emphasis on the emotional components of attitudes (Agres, Dubitsky & Edell, 1990). The attitude of consumers affects the decisions that they make. The attitudes on a service can change the perception of a client and can alter the criteria they have before availing the product.

Personality/values/life style - Personal relevance is the cornerstone to understanding consumer decision-making, and understanding personal relevance is the main advantage of the means-end approach. It seems obvious that consumers' purchase decisions are heavily influenced by the perceived personal relevance of the choice alternatives. That is, consumers are likely to select those choice alternatives that are seen as more useful for their needs. To understand personal relevance, marketing researchers have examined a variety of concepts such as involvement, product importance, attitude, interest, value, commitment, and even brand loyalty, but personal relevance remains an elusive concept. Most marketing research is content to measure the extent of personal relevance by identifying the specific concepts consumers use to evaluate alternative products or brands in a decision choice and having consumer’s rate their importance. Consumer behavior clearly draws on procedural knowledge. The way one reaches to the shelf for obtaining an item that has been bought many times, the route driven and the outlet visited in daily shopping, what one asks for at the butcher's counter may all be aspects of consumer behavior that have, to a large degree, become automated and hence procedural (Holbrook, 1999).  The personality, values and life style of the client affects their decision. A strong personality would require an excellent service thus the client would need to decide on a restaurant that would provide excellent service. A client who values pricing would need a restaurant that makes good use of pricing strategies. Moreover a client who has an easy going life style will need a restaurant that provides great food and great service.

External

Cultural - The net effect of environmental changes has been to spark a paradigmatic transition in the very structure and composition of needs and consumption. This may also have led to the formation of a new, albeit at this stage embryonic, consumer culture; that is, a radical and vital constellation of cultural sensibilities, value systems and behaviors brought about by new cognitive modes in the understanding and articulation of the experiences of everyday life. The new consumer culture cannot be collapsed into the new, ideal-type commodity-form simply as its functional product. Neither can it be held up as representative of late twentieth-century culture as a whole. It exists primarily within certain social formations that may be seen in this respect as pioneers in the development of a new culture of consumption (Lee, 1993). Culture can affect decisions. If a consumer has a culture that likes restaurants which provides excellent service then the consumer’s decision will focus on choosing a restaurant that provides the best service.  Culture can alter the preferences and force the client to lose loyalty towards a company or its product.

Social class - The social class of the clients can force them to change decisions. If a client belongs to the upper bracket in the social class then he/she would rather go to a fine dining restaurant than a fast food business. If a client belongs to the lower bracket in the social class he/she would rather eat in a cheap diner than to a fine dining restaurant.

Personal and group influences - Many behavior are goal-directed and effortful in the sense that goals are first consciously chosen by the decision maker and then attaining the chosen goal is not straightforward, but rather involves substantial effort to pursue after it has been chosen. Studying or weight-control regimens, childrearing tasks, business- or work-related projects, and shopping expeditions are all examples of such effortful goal-directed behaviors. Under such conditions, past experience influences the process by which decisions are reached and enacted by individuals in many ways: through cognitive, motivational, and volitional means. Studying how past experience influences the predictions of temporal construal theory may yield interesting insights. For instance, it is possible that the outcome of the past experience may moderate these main effects of desirability and feasibility (Batch & Haberstroh, 2004). Personal and group influences can affect decisions. The perception of an individual will serve as a personal influence that can dissuade him/her to avail of services of restaurants. The choice of a group or society on where to dine will influence someone to make a decision on whether he/she will dine at the restaurant.

Recommendations

1.         Applebee’s Neighborhood Grill and Bar Restaurant should make sure that its service would be reviewed. The restaurant should make sure that the service they provide is at par with the pricing of their products.

2.         Applebee’s Neighborhood Grill and Bar Restaurant should make sure that its personnel will be properly trained so that they will provide good service.

3.         Applebee’s Neighborhood Grill and Bar Restaurant should make sure that their food products are of good quality. The menu should be of varying themes and should prove the creativity of the members of the organization.

4.         Applebee’s Neighborhood Grill and Bar Restaurant should make sure that they use competitive pricing wherein the goal is to make sure that their prices are in the same league as their competitors. The restaurants need to check their prices and compare it to the prices of the environment. 

5.         The restaurant should make sure that they coordinate and communicate with clients to further improve their services.  All technologies should be used to make sure that they have direct communication with clients.

6.         The restaurant can make use of online reservation system. Online reservation system will give an opportunity for the client to reserve seats. Restaurants need to make sure that the online reservation system would be proofed for errors in information like any change in price range. Restaurants need to make sure that the price stated in the online reservation system is a current one so that the client will not feel that the company cheats on him/her.

7.         The online security system should be secure. The company should make sure that security would one of its primary concerns. The company should check the authorization and activity tracking features of the online reservation system. Authorization features make sure that there would be a limited number of personnel that can view information. Activity tracking components would make sure that any suspicious system related activity would be identified.

8.         Restaurants should make sure that those who maintain their system will always be prepared and ready for any eventual breakdown of the site.  The company should make sure that downtime of the system is minimized. The company should make sure that a specific group of personnel would be given the responsibility of maintaining the website. These personnel should make sure that the website would always be operational. These personnel will be the ones that should fix any problems with the site.

9.         Restaurants need to find out about other technology that can be used to provide service to clients.  Restaurants need to make further use of the internet wherein they can use non competitor’s website to promote the restaurant and its service. Restaurants can also engage in partnerships with dining websites and the like.

References:

Abram, J. & Hawkes, P. (2003). The seven myths of customer management: How to be customer-driven without being customer-led. Hoboken, NJ: John Wiley & Sons.

Agres, S.J., Dubitsky, T.M. & Edell, J.A. (1990). Emotion in advertising: Theoretical and practical explorations. Westport, CT: Quorum Books.

Batch, T. & Haberstroh, S. (Eds.). (2004). The routines of decision making. Mahwah, NJ: Lawrence Erlbaum Associates.

Chiagouris, L. & Kahle, L. (1997). Values, Lifestyles and Psychographics, Lawrence Erlbaum Associates: Mahwah, New Jersey.

Holbrook, M.B. (1999). Consumer value: A framework for analysis and research. London: Routledge.

Huffman, C., Mick, D. & Ratneshwar, S. (2000). The why of consumption: Contemporary perspectives on consumer motives, goals and desires. London: Routledge.

Lee, M.J. (1993). Consumer culture reborn: The cultural politics of consumption. New York: Routledge.

Radder, L., Yeujin, L. & Pietersen, J. (2006), ‘Decision making styles of young Chinese, Botswana and Caucasian consumers in South Africa: An exploratory study’, Journal of Family Ecology and Consumer Sciences, vol. 34, pp. 20-31.

Reynolds, T.J. & Olson, J.C. (2001). Understanding consumer decision making: The means-end approach to marketing and advertising strategy. Lawrence Erlbaum Associates: Mahwah, NJ.

 

 

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