Marketing Strategy Assessment of the Research Proposal
- Length: 13 pages
- Sources: 4
- Subject: Business
- Type: Research Proposal
- Paper: #62473460
Excerpt from Research Proposal :
There is also the need to concentrate on the interaction of these personal demographic factors as the foundation for group factors analysis.
Group Factors Analysis
The accumulated effects of the personal factors defined in the first section of this paper are put into relevance when the social factors are quantified and measured specifically relating to the retail home furnishings industry. One of the most commonly used is the VALS2 methodology (Piirto, 1996) which has its basis in the following set of metrics as shown in Figure 2, Lifestyle Orientation Definitions.
Table 2: Lifestyle Orientation Definitions
Source: (Piirto, 1996)
I am successful and deeply committed to work, family, and community.
A like predictability and consistency over risk.
My work affords me material rewards and prestige that shows success to my friends.
Strivers like to be trendy want to be stylish and admire people who are well-known for their success and wealth
Although difficult at times, making money is a goal in my life
I am mature, self-assured, well-educated professional
I am content with my career, family, and doing leisure activities around the house buy durable, functional products with value for the money
My activities center around home, family and community prefer American-made products
I am not wealthy, but meet my needs sufficiently
I am young, impulsive and rebellious at times seek variety, and excitement through new, offbeat and often risk activities and new products and experiences
Exercise, sports, outdoor recreation, and social activities are important to me
I am "old fashioned" and focus all interest on family and hard work
I'd rather buy items that have a practical purpose
When I want something done right I do it myself
In defining each of these segments and their role in the purchasing process in the retail home furnishings industry it is first critical to consider how shared values-based segmentation is created using psychographics (Liu, Wang, 2008, 283). The fundamentals of defining market segments by the values that customers have had been first defined during initial retail-based research that sought to define segmentation through shared attitudes or psychographics. This lead to the development of social science research that has since served as the foundation for the development of research methodologies that turned the study of values, perceptions, and intentions into quantified research over mere observations revolutionized the concept of values-based segmentation in the retail home furnishings industry.
The cultural perspective on market orientation, meanwhile, emphasizes inter-organizational norms and values in the defining of key buying criteria and group-based affiliation needs of (Deshpande, Farley, Webster, 1993, 23). Organizational values and norms relate to this team's latency function and are exemplified by the strength of integration points throughout the Dynamic Structural Coupling of Firm-Customer Relations Model constructed based on their insights and accumulated research. Figure 1 shows an interpretation of the Dynamic Structural Coupling of Firm-Customer Relations Model specifically applied to the retail home furnishings industry, which specific focus on the quantification of shared trust across the retail channel on the one hand and with customers on the other. The Dynamic Structural Coupling of Firm-Customer Relations Model specifically shows that in the retail home furnishings industry there is a specific concentration on transparency of brand values and their corresponding impact on delivering exceptional customer value and service while still maintaining a strong level of consistency and equilibrium throughout the entire ecosystem of home furnishings retailers.
In effect this model creates a balance between the expectations of the broader lifestyle and referent group attributes of retail home furnishings consumers (Piirto, 1996) and the ability of retailers to specifically define, execute and reinforce loyalty through the execution of their unique services. What emerges then is an egalitarian-based model of home furnishing retailer to psychographic group interaction that places emphasis on the experiential aspects of the shopping, buying and customer loyalty experience. In this regard the Dynamic Structural Coupling of Firm-Customer Relations Model shown in Figure 1 specifically addresses how retail home furnishings companies can attain trust, over time, with each of the dominant psychographic customer groups.
Figure 1: Dynamic Structural Coupling of Firm-Customer Relations Model
The Dynamic Structural Coupling of Firm-Customer Relations Model then specifically defines how all social factors that contribute to retail home furnishings retailers gaining the trust of their specific target markets and audiences of consumers. It is important to note that these groups are more appropriately defined through social factors encompasses by psychographics first, demographics segment. Psychographics specifically centers on how groups define themselves and also define their interrelationship to other groups as well. The aspirational aspects of group dynamics also are prevalent in the definition of psychographic-based segments in the retail home furnishings industry.
In analyzing the interaction of retail home furnishings retailers relative to the specific psychographic segments (Englis & Solomon, 1997, 25-44) defined trust and transparency as the single most critical attribute in successfully gaining loyalty of each distinct and different demographic group a given retail home furnishings retailer interacts with. Trust then emerges as a key factor in values-based segmentation.
In Values-Based Segments in Retail Home Furnishings, Trusted Advisors Dominate - the case of IKEA and Egalitarianism
IKEA's approach globally to the development of their brand has concentrated on values-based messaging and branding (Reynolds, 2008), concentrating specifically on how to become a trusted advisor to the Believers and Experiencers, two psychographic segments that specifically attuned to these two psychographic segments. Research IKEA has completed shows that these two segments have an above-average level of pragmatism and focus on attaining mastery of specific projects around their homes. Concentrating on Believers and Experiencers, specifically the latter group, has also been a very successful strategy from a psychographic perspective for IKEA. The economic constraints of Experiencers, many of which are in the under 25 and 25 to 35-year-old age segments, are also evident in advertising and branding messaging IKEA and their competitors rely on.
One of the core values of both the Believers and Experiencers is the need for egalitarianism as the basis for trusting any retailer or company they purchase from. The need for egalitarianism is so strong that is a prerequisite for these two psychographic groups to trust any retailer (Reimer, Leslie, 2008, 144). As a result of this, IKEAs' specific approach to defining a more egalitarian view of their contribution to their customers' lifestyles is unique in the retailing industry and counter to the heavy dose of consumerism upscale retailers attempt to connote their brands stand for including Henredon Furniture and others that compete in the same markets IKEA does. IKEA has been aggressive in fact about promoting the design-oriented concepts of their products while making higher-end brands the subject of ridicule in their advertisements (Roncha, 2008). IKEA's marketing approach to concentrating on innovative designs of their furnishings and accessories while using self-deprecating humor and poking a little fun at competitors who may take themselves too seriously as "uber-design" retailers is working. As a result of this unique messaging and branding, and the emphasis on egalitarian-based values including giving customers the opportunity to share in the workmanship (many products in IKEA are assembled by the customer), handling and delivery and customer service. This continues to be a very effective strategy of mixing self-deprecating humor and a strong message of egalitarianism at the same time. The net result is that the Believers and Experiencers see the immediate value and trustworthiness of the IKEA brand. IKEA has successfully defined itself as the unpretentious and pragmatic retailer of choice for multiple furniture-buying customer segments.
The initial success IKEA had in Sweden was in large part to the company's concentration on middle-income families and working professionals who had a high level of education and also moved around more often than the majority of the population. Due to these three factors of their first customer base the company realized that pragmatic, unpretentious furniture designs that were still appealing to look at and relatively easy to put together at home would be a success. In expanding into the U.S. IKEA added in another product design goal to further support its marketing strategy of being aligned with U.S. consumers' lifecycle purchasing habits. This design goal was to provide built-it-yourself furniture that could be added to as families grew over time. For young families on a tight budget for example, this was a major concern as these consumers did not want to purchase new furniture every three to six years as their children grew. IKEA quickly won a large number of American consumers over with this approach to modularity in their product design, allowing them to extend investments in existing furniture as their children grew. Today as a result IKEA generates 82% of sales in Europe, 15% in North America and 3% in Asia and Australia generating €21.2B (Euros) their marketing strategy of first concentrating on the needs of middle-income families and working professionals with…