Prediction of Customer Behavior
Questions:
1.Consider the three key forces driving the new marketing realities. How are they likely to change in the future? What other major trends or forces might affect marketing?
2.What brands and products do you feel successfully speak to you and effectively target your age group? Why? Which ones do not? What could they do better?
The marketing realities refer to any factor that instills a change in the area of marketing. These factors may even prove to be governing factors for the realm of marketing activities. The marketing strategies of a certain company may change based on the circumstances that the concerned organization may go through during the tenure of its operation in the market. The three main factors that drive the new market realities are the factors related to the prediction of customer behavior, the budgets of marketing and the technological factors and the challenges pertaining to the competition among the rival organizations in the market.
The prediction of the customer behavior is one of the main responsibilities of most of the marketers that exist in the industry. The customer behavior can be predicted with the help of market research. The market research may assist in the revelation of the intentions of the customers (Czinkota and Ronkainen 2013). In the modern times, big data has a huge impact on the analytical and the predictive tools that are required by the organizations to predict the behavior of the clients of the concerned company.
The budgets required for marketing consist of a huge amount of expenditure in a particular business strategy. The allocation of the financial amounts that are needed for the purpose of the business project, but on the other hand it may be difficult to make an assessment of the correct investment area (East et al. 2016). According to the latest Gartner Research, the average budget of marketing in the global scenario has been increasing at a regular pace of 1% per year since the year 2015. The research further involves the explanation that is needed in lieu of the prominence that the expenditure according to the budget is necessary in order to reach out to the people concerned (Gartner.com 2017).
Competition has been a constant factor that affects every business concern. The competitive environment may prove to be advantageous from the point of view of the clients. It may prove to be an area of disadvantage for the business organizations. The competitive environment of the industry has a huge impact on the decision making areas. Thus, competition in the industry can be avoided on no levels, not under any circumstances (West, Ford and Ibrahim 2015). The impact of completion has led to the overlapping of the ideas in various fields like the field of apparels, media entertainment and that of electronics.
Competition affects all the factors that are related to an organization. The most affected factor is the pricing factor. The control level of a company on the competitive pricing depends on the price environment of the concerned company. The price environments of the company are generally controlled by the market, the company and the government. The products of a company are also affected by the competition in the market (Solomon, Russell-Bennett and Previte, 2012). The companies tend to classify their products based on the competition that they face on the basis of the lasting distinctiveness of the product, the perishable distinctiveness of the product and the low cost elasticity of the product. The products that stand out of the millennia of products in the market are referred to as the products with a lasting distinctiveness. The products that tend to maintain their uniqueness during the initial days but fail to maintain it and thus degrade to the medium levels of distinctiveness are referred to as the products having perishable distinctiveness. The low cross elasticity of a product refers to the products that experience a rise in the demands of the same (Rosenbloom 2012).
Budgets for Marketing
Other major trends or forces that might affect marketing
The other major factors that affect the marketing of the products refer to the factors stemming from the issues of globalization, marketing channels, convergence, information technology, deregulation, loyalty and delivery of the products of the companies. The business concerns must select the marketing channels in a tactful manner alongside the allocation of the correct manner of budgeting. One of the key motivating factors for the emergent business houses and the sellers is the pursuit towards the clearance of the limitations of the territorial boundaries. The factors related to the areas of information technology may result in the toppling of the market sentiment at any given point of time. The existent realities in the market may be hugely affected by the condition wherein two or more of the companies merge to form a bigger institution. The performance of the business activities with a certain amount ease is necessary to cope up with the effects of globalization. Loyalty is another factor that might affect the marketing of the concerned business firm. There are numerous programs that help to identify the possibilities of retaining the client base of the companie
Australia is a rapidly growing market in the international arena and top global brands are targeting this market to expand their business. In the fashion industry in particular, Australia is increasingly becoming the first choice for top brands (Okonkwo 2016). These brands specifically target age group between 19 to 30 years and are successful in generating revenue. The German company Adidas, one of world’s most renowned sports fashion brand has also paved way into the Australian market. Another fashion brand that has dominated the Australian fashion scene is the H & M group based in Sweden. In the following sections, the appeal and popularity of these two brands among Australian youth shall be discussed.
Adidas in Australia
To Australian youth, fashion has a vital role to play for identity and image building. Adidas and H & M both have a strong presence in the Australian market although they represent different styles- one sells sporting goods and apparels while the other markets clothing wear (Craik 2015). However, from the Australian perspective, sports do hold an important place for the youngsters as they represent the country in almost all sporting events from Olympic to cricket and soccer. Stylish sporting wears, wristwatches, shoes, bags and other such items manage to attract a large group of youngsters belonging especially to the age group of 19 to 30 years.
Strategy implemented by Adidas
In its recent announcement, Adidas declared its strategy for the next five years that focuses on ‘Creating the new’ (Adidas-group.com 2017). Within this strategy, the company mentions three choices- speed, cities and open sources. This strategy is likely to appeal to the younger generation that craves for new and unique things every day. Adidas has an added advantage of having Reebok as the partner brand. While Adidas caters to the needs of athletes worldwide, Reebok appeals to consumers who prefer fitness. Australians between the specified age group are more health conscious and a sport plays an important role in maintaining good health. Adidas stands as a symbol of fitness and health through its focus on sports. This strategy has succeeded largely in appealing young Australia as fitness in today’s world has acquired the top position in the lifestyle chart.
Competition in the Industry
Adidas follows a simple promotional strategy that looks to grab attention quickly and keep it further as well. In one of its recent announcements, Adidas stated that it aims to focus more on digital promotion through smart phones as the younger population uses the digital platform predominantly than television, another aspect that is likely to attract the specified age group in Australia.
H & M in Australia
The H & M brand on the other hand is entirely a fashion brand selling only attires for women, children, teenagers and men. The company boasts of many other brands under its umbrella that include COS, & Other Stories, Weekday, Cheap Monday, Monki and ARKET amongst others (About.hm.com 2017). This allows the company to reach out to maximum number of customers especially the specified age group. Another feature of H & M is its stress on sustainability that is mentioned in almost all its statements. Sustainable fashion is what the company wants to convey to its target customers as its core value. This aspect of the company manages to draw customer attraction and huge revenues as well. However, sustainability is a topic that has limited appeal amongst youth. The Australian youth is no different. In a study conducted by Jegethesan, Sneddon and Soutar (2012), it was revealed that majority of Australian youth prefer product attributes rather than sustainable or ethical attributes. Fashion apparels are more likely to attract them based on the price, style and the brand. Sustainability takes a back seat in this regard.
H & M Strategy
H & M has generated revenues over the years with its uniqueness and stress on sustainability but it has also faced losses owing to its poor management and limited focus on young Australians (Heraldsun.com.au 2017). This aspect must be looked at by the company in order to ensure effective engagement with the customers between 19 to 30 years of age. In addition, the company must ensure smart promotional strategies that targets platforms used mostly by Australian youngsters. Adidas planned to shift its focus from television advertisements to digital platforms mostly to attract the younger generation. H & M can also apply similar strategies to attract teens and young adults that fall in the above-mentioned age group.
Thus, it can be safely said that Adidas has a more effective approach towards brand endorsement and marketing that draws youth attention in Australia than H & M.
About.hm.com 2017. The H&M group’s sales development for the full-year 2017 including the fourth quarter 2017. [online] About.hm.com. Available at: https://about.hm.com/en/media/news/financial-reports/2017/12/2765961.html [Accessed 21 Dec. 2017].
Adidas-group.com 2017. [online] Available at: https://www.adidas-group.com/en/group/strategy-overview/ [Accessed 21 Dec. 2017].
Craik, J., 2015. Challenges for Australian fashion. Journal of Fashion Marketing and Management, 19(1), pp.56-68.
Czinkota, M.R. and Ronkainen, I.A., 2013. International marketing. Cengage Learning.
East, R., Singh, J., Wright, M. and Vanhuele, M., 2016. Consumer behaviour: applications in marketing. Sage.
Gartner.com 2017. Technology Research | Gartner Inc.. [online] Gartner.com. Available at: https://www.gartner.com/technology/home.jsp [Accessed 21 Dec. 2017].
Heraldsun.com.au 2017. Great strides for H&M Down Under. [online] Heraldsun.com.au. Available at: https://www.heraldsun.com.au/business/hm-making-great-strides-down-under/news-story/03e3913f8355b2687baccc90a2bb29ad [Accessed 21 Dec. 2017].
Jegethesan, K., Sneddon, J.N. and Soutar, G.N., 2012. Young Australian consumers’ preferences for fashion apparel attributes. Journal of Fashion Marketing and Management: An International Journal, 16(3), pp.275-289.
Okonkwo, U., 2016. Luxury fashion branding: trends, tactics, techniques. Springer.
Rosenbloom, B., 2012. Marketing channels. Cengage Learning.
Solomon, M., Russell-Bennett, R. and Previte, J., 2012. Consumer behaviour. Pearson Higher Education AU.
West, D.C., Ford, J. and Ibrahim, E., 2015. Strategic marketing: creating competitive advantage. Oxford University Press, USA.
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