Statement: "Businesses can analyze how consumers make choices and can use this to create successful marketing strategies for the goods they want to sell.”
Marketing is used to create, maintain and satisfy customers by delivering valuable offerings to consumers, partners and society. Marketing strategy is the key to success of business for enterprises. In order to satisfy the needs, business should predict the needs of consumers and satisfy these needs more effectively than their competitors. This comes to the statement that “Businesses can analyze how consumers make choices and can use this to create successful marketing strategies for the goods they want to sell”. However, whether this statement is completely reasonable has been argued by researchers. When they make consumer analysis, there are some issues that may occur, such as the risks, the consumerism. Nowadays, technology has been applied as an advanced way to analyze consumers. In this process, it may involve leak of personal information and information safety related problems. Therefore, this topic is worth studying from these perspectives.
Argument based on consumerism perspectives
Customer analysis and marketing encourages the consumerism, but there are negative effects. Consumerism is a term with diverse definitions. It normally believes that consumption of goods with an ever expanding scale is advantageous to the economy development. So the purpose of consumerism is to increase consumptions. The assessment of Kotler said that consumerism will be enduring, beneficial, premarketing and ultimately profitable (Kotler, 1971). Some definitions of the item is in a negative way (Miles, 1998). For example, consumerism also mean that people consume resources in an unlimited way and think of consumerism as the highest consumption value. With such attitude to consumption, they will continuously apply and use the natural resources and energies, and produce products that are of damage to the environment. They use consumption behavior to show their identity, and yet it pollutes the environment and bring lots of burdens. Therefore, resources will be consumed if they are not well controlled. For example, the luxury products made by leather of animals is popular among rich people, as it is a symbol of social identify and wealth (Husic and Cicic, 2009). Many of the luxury brands lay emphasis on these effects of their products, as they know that marketing based on these selling points could be very helpful to improve sales. Consumers want to buy them, but the products are not sustainable and not consisting with the ethical rules. Consumers, particularly certain population of consumers who like to buy luxury products, they will keep the consumption behavior, which is just what the consumerism want. The well known US TV series, sex and the city just described how the consumerism drive consumers to buy luxury products. The sellers in Manhattan have deep understanding of their targeted consumers, and thus apply relevant marketing strategies to attract the young ladies in city who like to seek for brand effects, a large number of Carrie Bradshaw like people. Consumerism help the sellers to improve market performance, and yet it makes consumers lose control. At last, Carrie Bradshaw realized how consumption should be made and controlled, based on a certain period of hard times and lots of misunderstandings. Consumption behavior like this are not rational, or even health any more, because the desire to buy has become so intense, which is just what the consumerism want. For marketers, it is a challenge to develop products and marketing strategies that could combine the consumer values in short and long run together (Kotler, 1971).
The consumer analysis of business only focuses on how to provide them with more opportunities to improve consumption behavior, and yet they do not care about the negative effects of expanding consumption behavior. Through successful analysis of what they want and how they make purchase decisions, businesses make the proper decisions about marketing, and satisfy their needs. So the consumerism is well supported with customer analysis.
In recent years, the concept of ethical consumerism has been quite popular among companies. According to the review, a large number of campaigners have understood the needs for corporate ethical. And more consumers have applied an ethical conception when making consumption behaviors. A very typical trend in the ethical consumerism is that, most consumers are looking to manufactures and supplier fir information about the products they need to make purchase decisions, which has been in a lack state for now. so not only businesses are analyzing the consumers, the consumers on the other hand are also analyzing the businesses (Irving et al., 2002).
Argument based on technology perspectives
Technology has been improved to achieve customer analysis. A typical example is the big data. Based on specialized analysis software and system, big data analysis is able to make data statistic and prediction based on a large volume of data and obtain a more accurate result. The application of technology to handle customer needs and services have many benefits. It is effective and efficient. The item of precision marketing is a typical example about how technology can be applied for marketing analysis. The business collects the data of customers and related factors, and use these data to make management, such as self service optimization. When they decide to deliver specialized goods to customers, they use technology and data to find out how the decision making process proceeds, and get involved into it to encourage consumption behaviors with marketing (Zabin and Brebach, 2004). Without technology, the customer analysis is in a qualitative way, mainly by using experience and predictions. However, the technology could help to achieve it in a quantitative way and make self service optimization. The cutting edge customer analytic software could predict the impacts of different marketing actions on individual customers, and achieve deep customer analysis.
However, at the same time there are many issues when using big data or other technological approaches. Businesses need to gather as much information as possible from the consumers. For personalized marketing, they need the information of each individual, such as their identity, their contact information, their daily life and so on. The information could help businesses to understand better about the customer behavior and adapt more effective marketing, but the way to get access to the information may not follow the ethical rules. Customers should be willing to provide the information to the business they trust. And yet currently, many businesses obtain the information through informal ways. They will send marketing information to consumers without permission. In this process, the personal information of customers is possibly improperly leaked to businesses, which is not right (Louis Columbus, 2016).
The application of technology and big data is very popular in e-business (Louis Columbus, 2016). For example, the china’s largest C2C online transition platform has made good use of the technology to analysis purchase behavior of consumers and make marketing strategies. Consumers use taobao to search for products, save the products they like or want to buy, or add them into the shopping cart. Each consumer has their own account with a real name authentication. Their every activity on the taobao website through computer or mobile devices will be recorded and transferred to the background, where the big data analysis techniques will then be used to analyze the preference of each consumer, their purchase decision making paths and products they may need. Based on these results, it will make recommendations to consumers through a specialized column in the webpage or the apps (Xiang, 2013). For example, when consumers search for makeups for several times, the system will automatically recommend makeups products that other consumers pay attention to. It will also make recommendations about different types of makeup products. In some cases, the recommendation will be very helpful to consumers, as they do not need to search by themselves. However, the recommendation based on the prediction of the platform is not always reliable because consumers may just want to buy certain product for one time. If the system continuously recommends the products they do not need, negative influences may be caused.
Customer analysis based on technology and big data also helps the allocation of resources. Allocation of resources is to study how the scare resources, including goods and service, should be distributed to consumers. To make better allocation of resources, the businesses should consider accounting costs, economic cost, opportunity cost and so on to improve economic efficiency and maximize the utility. All of these activities need data. For example, for startup business, the location is a kind of resource. Businesses need to decide which location they should go. To achieve that, they need to analyze the marketing environment related secondary data, and use the data to allocate the location. Another example is the arrangement of products in supermarket. These are many similar patterns of arrangement in different supermarkets. The makeups stores are often in lower floors while sports wearing are in high ones. The decisions about these are all related to science and technology (McFetridge et al., 2005).
Argument based on risk perspectives
As mentioned above, the customer analysis has risks about leaking personal information due to the application of technology. This is due to the risks of internet technology itself. The lack of supervision and control is always a problem during application of internet (Davis, 2012). When businesses apply this tool, the risks of internet itself will be transferred to them. In addition, when businesses use customer analysis to make marketing strategies, the reliability of the analysis results is very important. To ensure that, businesses must make comprehensive analysis based on sufficient amount of data.
Customer purchase decisions process is influenced by both external and internal factors. For different types of products, the process is also not the same. Therefore, it is possible that some unexpected factors will influence this process. To be first, the economy conditions in the macro environment could influence purchase decisions. Taking the large scale based financial crisis as an example, a serious financial crisis could make consumers to reduce purchasing of goods that are not essential. The marketing strategies will not be useful any more. Secondly, even the individual factors could also influence the purchase decisions. Risks based on personalized marketing are more likely to occur if the information of the individual is not enough. At last, even the businesses have the ability to master the needs and decision making characteristics of consumers, the way of delivering marketing strategies on basis of communication between two sides will also influence the decision making process (Adjei et al., 2010). Also taking the online shop of taobao as an example, every taobao sellers have at least one workforce who is in charge of communication with consumers on the internet, using alitalk. Some of the customer service workforce response to the consumers very slowly. It sometimes takes several days, while the consumers need answers now. If they cannot get reliable information, consumers will turn to another stores. In this process, if the consumer service workforce provide instant and excellent service, consumers may be more likely to buy.
Conclusions and recommendations
In summary, this study discussed the customer analysis and related marketing in businesses based on the perspectives of consumerism, technology and risks. Businesses analyze the way consumer make purchase decisions, and use it to create successful marketing strategies for potential consumers. This is consisting with the value of consumerism, which aims to encourage consumers to make more purchase activities. Consumerism is an enduring process. There are negative effects of consumerism, including waste of resources and damage to environment. The contradiction of consumerism and sustainability is serious, and yet businesses do not often combine the short term and long term values together. This is a kind of effort businesses should make in future.
When analyzing the consumer behavior, application of technology has become an effective approach, of which a typical example is the development of big data. More reliable analysis and understanding of consumers need to apply a large amount of data, while technology is required to handle these data. At the same time, risks occur. For businesses, it is important for them to make right use of technology and database, and also to improve the reliability of their understanding.
Louis Columbus (2016). Ten Ways Big Data Is Revolutionizing Marketing and Sales. [Online] (Updated MAY 9, 2016). Available at: https://www.forbes.com/sites/louiscolumbus/2016/05/09/ten-ways-big-data-is-revolutionizing-marketing-and-sales/#40047f521cff (Accessed 25 June 2017)
Tracy Xiang (2013). How Does Taobao Use User Data? [Online] (Updated 14 June, 2013). Available at: http://technode.com/2013/06/14/how-does-taobao-uses-user-data/ (Accessed 25 June 2017)
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