MKT MOD 2

MKT MOD 2

Module One: Case Study

Distribution Channel

Getting the product or service to the consumers is a very critical task in the supply chain. The management of the business chose the direct over the indirect distribution channel based on the pros and cons espoused by the medium. This decision was informed by the pros and cons of both direct and indirect channels, as discussed. Direct distribution channels allow the consumer to access goods directly from the manufacturer. Firms that use direct distribution channels must have their logistics and transport teams. The advantages of direct distribution channels include: Allowing the consumers to buy goods from the producer, thus cutting off the middleman (Ross, 2019). Mainly, this enables the manufacturer to control the consumer experience. Besides, since the direct distribution channel assumes a relationship-driven model, the manufacturer can control the brand image and the overall customer process. Some of the identified disadvantages include; high risks associated with significant control of the distribution process and added responsibility to the producer.

Indirect distribution channels harness the firm’s competitive advantage by gaining a broad consumer base without the challenge of acquiring a customer through the door. The firm can focus on production and increasing the range of the target market (Ross, 2019). On the flip side, despite the benefits of using third-party logistics, using wholesalers and retailers has the price; for example, the firm’s inability to set the price, commissions, bank fees, and broker fees significantly affect the firm bottom-line.

Needs of the Target Market

The target market of the scented perfume is between 34 years and 50 years. Consumers in the identified target market espouse similar characteristics in terms of grooming since most of them are in t employment and social other social engagements. From the demographic point of view, the majority of the fragrance buyers fall between 35-49 years; therefore, to achieve the firm’s strategic goals, the focus will be on the buyers between 34-55 years segment. The identified buyers and users within the target segment consume an average of two fragrances per year. Considerably, the target market wants consistency, style, and class, and therefore, the outlet will be able to sell and offer refill services to regular customers. Such an initiative will align with the needs of the market. Thus, the distribution channel must provide shorter lead times to high-frequency buyers.

Digital Commerce

The entire fashion industry has an extensive presence in the digital distribution. The majority of the competitors operate online shops that are supported by the e-commerce technology. Priscill and Anandhavalli (2018) note that the live shopping experience can be provided by the smell technology that facilitates the acquisition of perfume and flowers from exotic places. Therefore, the distribution of scented fragrance is conducive to digital deliveries. Ideally, this can be achieved through online sales through the website, social networking sites, and online retailers such as eBay, Amazon, and Alibaba. Competitors such as Calvin Klein and Dior have a substantial online presence, thus making them formidable competitors. However, market activation can begin with moderate efforts in the social media posts that are linked to the company website where potential buyers can find the catalog. Buyers and users can also share their experiences on social media, for example, Facebook, thus solidifying the firm’s digital distribution capabilities.

Module Two: SLP

The consumer behavior model outlines the decision-making process of the customer. Examining consumer behavior is one of the significant tasks of the marketing teams because they help the planners to understand the dynamic nature of consumer behavior and buying patterns (Yadav, 2015). In this case, the Engel-Kollat-Blackwell conceptual model of consumer behavior is represented below show consumer behavior as a decision-making process displayed in five steps.

In the model above, the first task of the consumer needs recognition. In particular, the consumer will identify the need based on urgency and importance. For example, needs are categorized in terms of self-actualization, esteem, social, safety, and security needs, and finally, the physiological needs (Jisana, 2014). Notably, this implies that consumers fulfill the basic (physiological) requirements before focusing on the needs higher in the hierarchy. After identifying the need, they must satisfy, then consumers focus on information searching. At this step, marketing campaigns play a significant role in shaping the consumer buying decision. For example, promotional messages or advertisements may prompt the customer to shift to an expensive commodity. Further, advertisements and promotional messages provide the consumer with the necessary information to make an informed purchase decision. In particular, this means engaging in market research and analysis to identify the best product to satisfy their need at a reasonable cost. This activity is influenced by the motivation of the consumer, culture, family influences, and social class, among other variables.

The third step is an alternative evaluation. Consumer behavior is influenced by myriad factors such as economic conditions; for example, a robust economic environment gives consumers the confidence to indulge in buying despite having personal financial difficulties. Besides, marketing campaigns also influence consumer behavior as they evaluate the alternatives; for example, the advertisement may prompt the consumer to change their preferences, change the brand, or go for more expensive commodities. Jisana(2014) notes that evaluation criteria are influenced by factors such as accessibility of the product, the familiarity of the product, experience, quality, the reputation of the manufacturer, and offers.

Multiple factors further influence the purchasing decision. Illustratively, since purchasing involves the monetary exchange of value, the consumer decision is influenced by economic factors such as personal disposable income, prevailing market conditions, and purchasing power parity within the target group. Personal preferences also play a significant role in influencing consumer behavior (Yadav, 2015). For example, no matter how many adverts a vegan sees about burger joints, they will never purchase a burger. Morals, perceived value, and priorities also shape consumer behavior during purchase decision making. Besides, Danu (2019) notes that budgetary constraints also influence the purchase decision. The product may be excellent, the promotional and marketing on point, but if there is a fiscal constraint, then the purchase cannot take place.

The post purchasing step involves the conversion of the buyer into a repeat customer. Again, this s influenced by the quality of service provided by the seller, the after-sale service, and the follow-up initiatives by the marketing team. The perfume market will be segmented on the buying power of the consumers. Mainly, this is because some may be able to buy assorted and customized scents while others will buy the ordinary brands. Finally, examining the buying patterns of consumers; for example, splitting their purchase into several stores even though all items are in one store will inform the marketing strategy team decisions.

Module Three: Discussion

Perfume, also known as colognes, are scented liquids products typically extracted from various alcohol and fragrant oils. Different perfumes have different fragrances depending on the extract used to give the product a differentiated scent. Therefore, the Perfumix brand will target the middle and mature generation aged between 34-50 years. Also, the product will be produced in different varieties as well as provide refill options for the target market. The rationale of the decision is underpinned by the fact that the target market comprises buyers who have active employments and socially engaged. Therefore, the target consumers often need to gloom before going to work or attending social events to exude class, style, and glamour.

The buying power of the target market in the United States depicts the potential for market activation and growth. For example, the projected purchasing power per ethnic group by 2023 is $17,194.80 (Emarketer, 2020). The contemporary and projected buying power of the United States population per ethnic group is presented below.

The above table shows that the white majority have a high purchasing power, followed by African Americans. In particular, this implies that focusing the fine female fragrance and subtle male fragrance to the middle and mature segments of the population will lead to productivity growth and achievement of competitive advantage. The projection for the purchasing power parity depicts excellent potential across all ethnic groups in the United States market. Mainly, this implies that promotional and branding activities can be targeted to the entire population while the digital advertisements target the working middle and mature class in the population. Ideally, the demographics show that the perfume business has excellent potential. Further, exploiting online shopping platforms will harness the business competitiveness in the currently tech-savvy population.

References

Emarketer. (2020). Buying power by ethnicity. Retrieved from https://www.emarketer.com/chart/227611/us-buying-power-by-raceethnicity-2000-2023-billions

Jisana, T.K. (2014). Consumer behavior models: an overview. Sai Om Journal of Commerce & Management, 1(5), 34-43.

Nicolou, J.L. (n.d). Direct vs. Indirect channels: differentiated loss aversion in a high-involvement, non-frequently purchased hedonic product. Faculty of Economics: University of Alicante.

Priscill, B.J., & Adandhavalli, M. (2018). Digital smell technology. International Journal of Emerging Technology in Computer Science & Electronics, 25(5), 451-454.

Ross, S. (2019). Direct vs. indirect distribution channel: what’s the difference?. Retrieved from: https://www.investopedia.com/ask/answers/052115/what-difference-between-direct-and-indirect-distribution-channel.asp

Yadav, R. (2015). Consumer behavior & its model. International journal of science technology and management, 4(1), 670-677.