Consumer Behavior (Research Paper Sample)

CONSUMER BEHAVIOR
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Introduction
The company chosen for this study is IKEA that is a Swedish-based firm headquartered in the Netherlands. It is operated privately and is concerned with retail business dealing in homeware (home accessories and kitchen appliances) and furniture (that is ready to assemble). With a revenue of more than forty-two billion USD, the company has a strong and diverse workforce scattered in four-hundred-and-sixty-seven branches worldwide in more than sixty markets (Lee, Hu and Lim, 2021, May). IKEA serves several markets across North America, Oceania, Southeast Asia, India, East Asia, North Africa, the Middle East, and Europe. The company operates with the vision to improve everyday life for its clients. The slogan of IKEA denotes how it strives to provide its products and services to many customers around the world by opening up new sub-companies and branches (Suárez-Ruiz, Zhou and Pham, 2018). Team spirit is one of the major attributes of the company business, indicating that the company’s achievements are a result of efforts and collaborations by many people and many minds. This study comprises a brief about IKEA products, an account of the target markets it serves, internal and external factors influencing consumer behaviour, and analysis of the competitors of the company, and an analysis of the market trends associated with customers.
IKEA Products
IKEA is famous for its interior design work that is usually related to simplicity and eco-friendliness. For different types of furniture and appliances, the company has a reputation for versatile modernist designs. The considerably low prices of its products indicate that the company is committed to its vision of enhancing the everyday life of many people around the world (Ozturkcan, 2021). It is done intentionally to enable more people to buy the company's products so that they can facilitate their everyday home tasks to achieve more convenience and comfort. Moreover, the business model of IKEA is unique catering to the needs and wants of its target markets and the value chain includes dales, manufacture, supply, design, and development of the products. Thus, IKEA should be considered more than a retailer. The value chain of the company is characterised by efficient listening to the need and wants of people, but it focuses on people in the first place by acknowledging their worth and addressing issues important to them. The company adopts the policy of developing packaging and carrying out the shipping of unassembled products (Suárez-Ruiz Zhou and Pham, 2018). This strategy reduces the costs, efforts, and waste to a considerable extent. Much of the company’s products including furniture are designed in a way that the client him- or herself has to assemble it. This decision has helped the staff members to carry out products easily and in a time-saving way. Moreover, the company opts for sustainable practices in designing, manufacturing, and distributing products. To ensure mass consumer culture, IKEA has been considered the pioneering entity to apply sustainable approaches. The company implements an integrated approach to the processes related to product design and development and hence the overall process of designing and manufacturing is usually referred to as the democratic design.
Target Market Segments
Target market segmentation can be viewed as a process of splitting a business’s target market into different groups based on similar characteristics, traits, attitudes, behaviours, needs, and wants of the consumers. It also entails considerations related to differences in consumer behaviours to ensure that the strategies developed for product design, development, pricing, distribution, and placement in the market are aligned with the current consumer trends. By segmenting the target market, it becomes feasible for the management to address the varied needs of different groups of target market consumers and provide them with efficient marketing and product solutions subsequently. Communication messages can be developed more easily and precisely by considering unique groups of target markets (Spinoglio, 2020). IKEA carries out target market segmentation based on certain characteristics and backgrounds of the target market customers, including geographic factors, behavioural factors, psychographic factors, and demographic factors. As IKEA operates in several countries across different continents in the world, it faces huge challenges in catering to various types of characteristics and preferences demonstrated by the target market segments. Consumers of IKEA can be broadly categorized into families having lower to middle-class backgrounds, bachelors, employed persons living away from their hometowns to work on remote jobs, and others. The company designs and develops products as per the specific needs and wants of each of its target customer groups, besides making important decisions to customize specific products according to individual customers’ needs (Alves and Luís Reis, 2020, February). The ultimate effort IKEA makes is to influence the purchase behaviours of consumers such that they prefer the company products to those offered by the competitors. IKEA succeeds in achieving this competitive advantage over its competitors by maintaining a culture of innovation, diversity, and integrity in its workplaces and keeping the prices of products as low as possible to attract larger numbers of customers.
External and Internal Influences on Consumer Behaviour
Consumer behaviour is influenced by various factors that may be external or internal and lead to the final customer conversion toward a company or product or vice versa (Szmigin and Piacentini, 2018). External factors that influence consumer buying behaviour include influences of the reference group (family influences and influences of close friends), social class, culture, and sub-culture. IKEA has a large customer base that demonstrates a huge diversity of backgrounds and interactions in society, indicating an immensely wide range of influences on consumer buying decisions. Family and close friends make the primary reference groups as these are the entities that frequently interact with an individual on an almost daily basis and impact strongly on consumer buying behaviour. Then friends can also be categorized as the primary and secondary reference groups. Among friends that fall in the category of secondary reference groups include colleagues, neighbourhood friends, and schoolmates. People do not interact with others to intentionally imitate them and copy their behaviours. Instead, they are unconsciously influenced by those whom they interact with for everyday needs or activities. It usually takes place through observation and individual/personal interpretation of the actions of others. In case the consumption of a product is conspicuous, the influence of the reference groups on consumer buying decisions increases (Persson and Wilhelmsson, 2018). It is because the consumer will consider the fact if the intended product is viable to use before others who share similar beliefs, preferences, and social views as those of the consumer. In certain cases, reference groups include the opinion leaders whose opinions deeply influence the buying decision. It may be the case for an individual influenced strongly by the family head or a group member whose leader influences the buying decisions of others. Second, social class includes the hierarchical organisation of a society into different levels or groups, each having specific standing or status. The social class of a consumer has direct interconnections with the buying decisions as it impacts the consumer's interests, activities, media patterns, lifestyle, and consumption patterns. Usually, social class is identified based on income differences between individuals. However, income differences cannot be the only determinant of the social class of an individual (Alrubah et al., 2020). For instance, two individuals having the same income may differ considerably due to the differences in their lifestyles based on their occupations. One might work as a self-employed person in the dynamic business world in isolation and the other may be a senior executive in a large corporation dealing with significant business issues, attending international seminars, dealing with high-worth clients, and managing complex organisational issues. Consequently, the impact of their respective social classes would change their purchase decisions significantly. The sales of IKEA products are, therefore, influenced by the social classes of the target market consumers. Hence, the company opts to design products that can be purchased easily by individuals with different social class backgrounds. Third, IKEA needs to consider the differences in culture as it operates in different countries where several cultures exist and consumers need to have homeware and other home accessories based on their specific cultures or subcultures (Sergeevna, 2019). Culture impacts an individual’s values, lifestyle, and preferences regarding different pursuits in life. Subsequently, the purchases made by people are mostly following the cultural elements and norms prevailing in their particular geographical area. For instance, Arabian culture is entirely different from those cultures that can be found in Southeast Asian countries such as China, the Philippines, Korea, etc. Therefore, while designing products and marketing them to the specific target markets, IKEA needs to consider the specific cultural values of the region.
Internal influences on the buying behaviour include the personality, learning, and p...