Answers to W5 weekly exercise
PartI How does Ikea generate customer loyalty?
The facts are amazing that in 2008, 500 million visitors walked through IKEA store globally and 6000 people visited London store before it opened in 2005. All these achievement are thanks to the unique value proposition to consumers offered by IKEA which is a strategy of leading-edge Scandinavian design at extremely low prices. To look deeper, the reason why the prices are quite cheap is mainly because most items come boxed and the customers need to install by themselves at home which follows cheaper and easier transportation for IKEA as well as more efficient use of store shelf room.
Meanwhile, the version and mission of IKEA enables it runs operation according to customer-orientated purpose which adhere to the annually price reduction policy. Furthermore, its price cut benefits are partly due to the variety of supplies, namely, 1300 supplier from 53 countries rather than merely reply on handful business partners. This allows IKEA enjoy 10% margins and transfer the price saving to its consumers. Also, the remote locations from most city centres help IKEA to maintain a low land costs and reasonable tax expenses.
Moreover, IKEA values customers’ special tastes so much that the IKEA executives visited many customers for first-hand information and try the best to cater for their demands. Examples can be found in many countries. One is in China where IKEA design “Year of Rooster” theme placemats and they are sold in the blink of eyes during the holidays. Similar example like IKEA managers visited US and Europe and found out their different styles of storing cloths which gave nice chances for different wardrobes which suit various tastes. Other cases can be observed via US’s larger glass cups, more comfortable dinning environment in California, etc.
... even 24 –hour stores. IKEA focus on meet customers required from all over the world by provides a lowest price. Customer loyalty can be achieved ... can visit the whole warehouse and pick up their goods at last. IKEA provides customers a convenient and different shopping experience. The lowest price ...
To conclude, IKEA utilize various methods and strategies which involve consumer interactions, reward program and close bonds to build consumer loyalty, its aim is to satisfy the unique needs of consumers and meanwhile enjoy a good margin on doing so.
PartII How does a company evaluate the influences on customer behaviour?
In general, there are three factors which can make influence on consumer behaviour, namely, cultural, social and personal factors. A company will benefit more if it takes a deep research and conduct a well-organized analyse in terms of consumer behaviour. With regard to cultural factor, it conveys values, ideals, and attitudes that help individuals communicate with each other and evaluate situations. By grasping a good understand on different cultures, a company are more likely to design customer-oriented products and services which fit the local tastes properly. For example, culture in the United States today stresses equality, materialism, individualism, and youth to a great extent while in China where family, youth generations, the wish to live healthily (wish for the safety of food and water, clean air and easier access to medical treatments) have been put great emphases on.
Social influences like family, friends or reference groups also make great influence on customer behaviour. Taking reference groups for instance, it exerts tremendous influence on consumers’ purchase decisions. Every individual is influenced directly and indirectly. Three types of reference groups are commonly identified: comparative, status, and normative. First, individual consumers use reference groups to compare their own feelings and thoughts with those of others. Second, reference groups also serve a status function. Third, reference groups establish norms and values that regulate the behaviour of individuals.
... related to many household items. Another group that can influence the consumer are reference groups. A group becomes a reference group when a person identifies with it so ... company should try to influence the customer´s attitude. Personality Every person is unique, because of internal traits and behaviours. Marketing managers suspect ...
Other psychological theories like Sigmund Freud’s, Maslow’s human needs hierarchy and Herzberg’s all function as factors to influence consumer behaviour.
After understanding the influence factors, conducting consumer behaviour research is an appropriate method for a company to evaluate the influences on consumer behaviour. The details of such research are shown below:
* Visit your clients or customers. Ask simple questions to get quick answers, including topics such as customer satisfaction and desired product or service changes, and use the feedback to better serve your customers.
* Analysing online activity on website to learn what customers are looking for or revisiting. Use the information to develop a more appealing, user-friendly website, which can boost efforts.
* Offer a free sample of a product. Whether it’s a new type of conditioner or an online marketing platform, consumers who are able to try a product will give honest feedback, offering an invaluable device for bettering a company business.