Why would a consumer choose to spend €350 on a handbag when another comparable handbag could be bought for €28?
Consumer products (goods and services) can be classified as follows:
Products that are purchased frequently with little or no thinking effort.
— for example, milk, bread, a soft drink.
Products that are purchased with a moderate amount of thinking effort.
— for example, a mobile phone, car tyres, home furniture.
Products with unique characteristics that are purchased with a high degree of thinking effort.
— for example, college education, summer vacation, and housing.
Products that consumers do not usually search for without an immediate problem or prompting.
— for example, life insurance, legal services.
Market research is essential for providing information about consumer behaviour regarding purchasing decisions.
Separate consumers into smaller and meaningful groups with similar demographic characteristics (gender, age, income, educational level, family size, and occupation).
Use primary research (e.g. questionnaires, product testing), to analyse each consumer group’s behavioural and lifestyle attitudes (brand loyalty, size of purchase, price preferences, occasion of product use) and explore unfulfilled needs and wants.
Select the one consumer segment which seems more attractive and promising with respect to product needs and wants.
Place a product in the minds of the selected target audience, aiming to create a distinct and differentiated image and value for the brand relative to other brands by formulating an effective promotional mix.