Consumer Behavior Case Study Assignment
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- Topic : Consumer behaviour
- Pages/Words : 10 Page/2500 Words
- Message : ABC Electronic ltd, A wrong analysis of consumer behaviour. Case solving
- Deadline : 2020-12-10
ABC Electronics Ltd. – A Wrong Analysis of Consumer Behavior
ABC Electronics Ltd. was a company established in 1983 by Mr. Sajid Khan and over the years had emerged as one of the leaders in the growing segment ofthe electronics and home appliances market in Bangladesh. Currently it has a market share of 30% of the home appliances market. Its product strategy has been to offer a wide range, right from mono stereo, two in ones and sophisticated music systems to televisions, refrigerators, washing machines, ovens and microwave ovens. ABC’s marketing strategy also included offering the above products so as to match the needs and budget of the middle and upper middle classes.
In 1991, Kabir, son of Mr. Sajid Khan, took over as the Managing Director of the company. Seeing the intense competition in the post liberalization scenario, Kabir was keen to follow the principle that once you have decided on your target customer, you follow him/her relentlessly with attractive offerings. In 2020, he developed a well-focused promotion and distribution strategy. The promotion strategy involved an advertising budget of TK. 50 crores, a special training program for the sales force and offering freebies and various other sales promotion techniques. In terms of distribution, Kabir selected exclusive showrooms and franchisees to display their wide range of products. The location of the exclusive retail outlets was also selected so as to match the perceptions of the consumers as an “exclusive showroom” for them.
However, even after two years of implementing the new promotion and distribution strategy, the sales of ABC Electronics did not pick up to the extent that the company thought it would. Kabir then directed the marketing manager to conduct a study of other retail outlets to know the trend. The results revealed that there was a change in consumers’ perceptions regarding purchasing consumer durables. There seemed to be a preference for purchasing goods from multi brand, rather than from single brand outlets.
- Where do you think Kabir went wrong in his analysis of consumer behavior?
- Discuss the change in the role of the consumer today, as compared to the consumer five years ago.
A Consumer’s Buying Decision Process
Rahim is a stores manager and head of the distribution center in an Indian company that’s located in one of the developing cities. His family includes his parents who have retired from their respective banking professions, his wife who is working as a librarian in a college, his twin sons who are now eligible for primary school admissions and an unemployed younger sister whose marriage is fixed. Rahim belongs to a middle class segment but more or less, the income level and family saving is good.
Rahim’s parents are conservative in nature. They prefer to spend on the basic necessities and those essential things that make up a living. However, Rahim likes to have a comfortable lifestyle and spends most of his earnings on furnishings and interior decor. Recently, Rahim had bought two air-conditioners but his parents didn’t let him install it in their room. So, he had to put the second one in the children’s room. Rahim often ignores his parent’s advices and does what he feels like doing. He is also planning to purchase a car within a year. His wife doesn’t mind Rahim’s spending habits but she is very particular to ensure that her salary is spent only on the household expenses and the rest goes to the Fixed Deposit of her Bank.
Now, since Rahim’s sister is getting married soon, his parents have insisted on Rahim to spend less and save more so that the marriage ceremony takes place in a splendid way. Rahim’s marriage was a small event because most of the relatives and friends had already informed that they could not attend the occasion for personal reasons. And so, Rahim’s parents wanted to invite all the relatives and friends for their daughter’s wedding and make the occasion a grand success. Due to this reason, there are small fights happening in the house and Rahim feels that his income is not enough to meet the requirements. He is getting irritated over small things and he has lost concentration on his work.
Then, one particular working day when Rahim was carrying out his usual routine work at the warehouse he gets a sudden call from the Vice-President (VP) of the company asking him to meet within the next half an hour. He is surprised and at the same time nervous about the meeting wondering what was the meeting about. He delegates some work to his assistant and then hurries to the adjacent building block. The top authorities of the company had their offices in this block. No sooner he enters the building he is called inside the VP’s chamber and after some time when Rahim comes out of the room he realizes that he has received a cash reward for a record work he had accomplished a long time back. The top management even presented him a Certificate of Excellence and a personal letter asking him to lead by example. When he comes back to his office he also realizes that a copy of his certificate was put across the company’s internal e-mails and notice boards. He is very happy with the recognition he deserved especially with the Cash amount he received and commits himself to solving more complicated tasks at the workplace.
Realizing the need for a car before his sister’s marriage, he even decides to purchase a car without wasting much time. He takes a friend along when selecting the type of car, the brand, the features and other attributes. Rahim is not particular about the brand but he prefers to have a big, spacious car which also is convenient for long distance traveling. He has an unclear budget above which he is not willing to pay for the car. His friend tells him that while deciding the features, color and other aspects, he may have to spend additional amount as well. At the end, he and his friend list down the three suitable brands that meets Rahim’s considerations.
After thinking for about a week, regarding the three car choices, Rahim finally selects one among them. In the next two days, he completes all the formalities and payments with respect to the purchase. He also tells the showroom executives to deliver the car to his home. He already has a driving license but then he decides to keep a driver till he gets the confidence to drive a big car. 2 His parents are also happy seeing that Rahim, his wife and kids are excited about owning a car. Rahim manages to convince his conservative parents that savings are important but spending on finer things in life is not bad as well especially when you are in a position to do so. His sister’s marriage takes place with grandeur and Rahim gets the opportunity to display his big car in front of the guests.
After recognizing Rahim’s family background, status and situation,
1) What do you think are the factors that influence Rahim’s buying behavior in general? According to Maslow’s need hierarchy theory, what are the needs of Rahim as a consumer and as an individual?
2) Identify and analyze Rahim’s decision-making stages when he purchased the car.