Behavioural and Cultural Factors
Before we get into the behavioural and cultural factors in market opportunities and sales performance, let’s remind ourselves of the typical buyer decision making process. We start with the recognition of a need, your customer has a problem that needs a solution. The solution is then sough by searching for information, part of that search might be a better understanding of the problem in order to be sure that any solutions found are worth considering.
Quite often there will be a number of potential solutions found and your customer must now evaluate them to decide which is for them, that that neatly leads to the next stage; the purchase decision. Once the purchase is make the customer has completed that stage of their experience with you and your product and enters the much overlooked post-purchase where opportunities for amplification, evangelism and repeat purchases can exist.
To summarise:
- Need Recognition
- Information search
- Evaluation of alternatives
- Purchase decision
- Post-purchase behaviour
Economic and Buyer Behavioural Factors
Let’s focus on the economic and buyer behavioural factors that should be taken into account when assessing new market opportunities. There are many that exist but we will concentrate on the top 5: seasonal, recession, taxation, employment levels and cost of living.
Seasonal
Buying behaviours can change dramatically change with the seasons. Think about the weather; during long warm summer days customers are generally not thinking about winter clothes, warm woolly hats or waterproof boots. They are heavily influenced by their immediate needs, and when it comes to weather it is usually what the season requires.
Fashion is another consideration to buying behaviour. Fashion can change very quickly and if you’re not on top of what’s in you may lose out. Holiday periods can have unique traditional requirements can also influence buying behaviours.
Recession
The state of the economy can have a dramatic effect on buying behaviour. Your customers will still need to buy clothes, food and shelter in times of affluence and recession alike but how they spend their money will generally change. Recession will change what people spend their money on, and how much they are willing to spend. For many value becomes a more important factor when making buying decisions.
Taxation
Taxation levels rarely change significantly within the same geographic market but when the do it can focus the minds on your customers buying behaviour if there is a sudden drop or increase in disposable income. Another factor worth considering is that taxation levels can change between markets and this can significantly affect your price and profit margins.
Employment levels
High level unemployment can promote a sense of general financial insecurity within communities which can affect buying behaviours.
Cost of living
A very high cost of living can mean low disposable income which can have a limiting effect on a new market opportunity you may have identified.
Cultural Factors
Cultural factors are sets of ideas and attitudes that are passed down through generations and can determine what people wear or eat. These cultural norms can heavily influence what customers are likely and unlikely to buy and are therefore very likely to affect your customers’ perception of your products or services and therefore your sales performance.
In the late 1970s, Wang, the American computer company could not understand why its British branches were refusing to use its latest motto “Wang Cares”
There may also be subculture factors that affect customers perceptions
In Stamford Hill, North London, there is a very large ultra-orthodox Jewish population where the car of choice is understandably anything non-German, the district has been dubbed Volvo City
What’s Next
Up next we will discuss how you can identify opportunities and threats in new markets. We will pay particular attention to new products in existing markets.