Consumer marketing research is market research in which the preferences, motivations, and buying behavior of the targeted customer are identified through direct observation, mail surveys, telephone or face to face interviews, and from published sources (such as demographic data). It is the systematic collection of data regarding customers’ preferences for actual and potential products / services. It establishes questions about your intended market and finds relevant answers. Consumer marketing research is needed to ensure that we produce what customers really want and not what we think they want.
The consumer market in the United States is the largest consumer market in the world, and is made up of approximately 300 million consumers and these consumers spend more money than any other country. In South Africa the consumer market constituted R1857 815 Million in the second quarter of 2016.
Consumer marketing is all about creating and selling products, goods and services to individual buyers. These items are usually used for personal use and household consumption. Consumer markets today are experiencing rapid changes and are flooded with new opportunities and new challenges. The significant changes in the consumers’ buying behavior, urbanized lifestyle and growth of service sector are the main reasons behind the importance of conducting consumer marketing research. Markets are dominated by products and services designed for the general consumer and industries in the consumer markets often have to deal with shifting brand loyalties and uncertainty about the future popularity of products and services.
The ultimate goal of consumer research is to serve as the voice of the consumer. Marketing research focuses on understanding the consumer as a person by focusing on exploring his or her attitudes, needs, motivations, and behaviour as it relates to a product or service. More broadly, consumer research helps to provide a company with relevant, reliable, valid, and current information on their target buyer. Consumer market research aims to identify, understand, and analyze customers and their needs. It is also important to note that consumer market research is not directly synonymous with marketing research. Marketing research is actually comprised of both consumer and business-to-business research and examines all aspects of a business environment, whereas consumer research is solely focused on the consumer.
The purpose of consumer research:
- To help companies make better business decisions and gain advantages against their competitors.
- To help marketing managers or executives make numerous strategic and tactical decisions in the process of identifying and satisfying customer needs.
- To remove some of the uncertainty by providing relevant information about the marketing variables, environment, and consumers. In the absence of relevant information, the consumer response to marketing programs cannot be predicted reliably or accurately
- To provide insights that help guide the creation of a business plan, launch a new product or service, optimize existing products and services, and guide expansion into new markets
- To determine which portion of the population will be most likely to purchase a product or service, based on variables such as age, gender, location, and income level
- To reveal characteristics of a target market
- To understand how consumers talk about the products in the market
- To identify which consumer needs are important and whether these needs are being met by current products
- With effective market research, your company can gain invaluable information about your competitors, economic shifts, demographics, the current market trends and the spending traits of your customers.
With the economy becoming more and more competitive, having appropriate knowledge about the concerns and preferences of your customers has become integral for any business to succeed. Research is the best way to increase customer satisfaction, understand the factors that affect your business and to elevate your performance. Consumer research not only helps in serving your current customers better, it identifies new business opportunities, helps designs marketing campaigns that will target the interest of your potential consumers and helps increase your sales. Consumer research provides valuable information about the potential of a particular market segment, specific time and age group. To better understand where you are going, you need to understand who you are competing against, consumer research helps you keep an eye on your competitors and helps you devise business strategies that will keep you ahead of your business. It also helps you reduce your chances of loss, by launching products that your customers actually want and also helps to find loopholes and areas for improvement in your product.
The Relevance in African Markets
For many years Procter and Gambles “The First moment of truth marketing” has led the way for brands all over the world in their decision-making process around consumer packaged goods on shop shelves.
The First Moment of Truth is by definition the first few seconds (considered 3-7 seconds) in which the consumer encounters a product for the first time. This is usually at the shelf when the consumer is shopping at her local retail outlet. This leaves an extremely small window in which brands have to convert a shopper into a buyer. On shelf, marketing needs to appeal to shoppers needs, values and emotions in this short time frame in order to receive their endorsement and then sale.
The First Moment of Truth was then expanded into a second and third moment, which are respectively, when a customer makes a product purchase again based on brand experience, and when the consumer becomes a brand advocate.
In-store product placement has long being considered the most important marketing opportunity for a brand and largely it still is. This includes the various points of purchase, be they in the run, at a gondola end or secondary display point, or at the till point. Cross merchandising is also a good opportunity to create brand awareness and sales at a purchase point e.g. displaying an ice cream scoop spoon in the frozen food section, where ice cream is sold.
The age of technology has witnessed the birth of the Zero Moment of Truth, a term coined by Google, where consumers are potentially making shopping choices by what they have seen online. This new trend is yet to be quantified but it is one to watch for the future.
Understanding what drives unplanned spending in stores and what converts into a purchase is vital the more our world becomes connected. Everyday consumers receive extensive amounts of information whether in-store or online and are becoming increasingly adept at filtering out unwanted communication. Winning over consumers at the point of purchase has never been so critical.
In the massively competitive consumer market hitting the triple thread of availability, visibility and overall brand impression in the form of packaging etc. has become even more challenging.
So what are the key trends for the African market that could help brands to stay ahead of the game?
- Choose your audience and speak to them
According to Memeburn, in 2015 one of the biggest macro trends set to influence consumer marketing was population size. By 2050, the African continent is expected to reach a population of 2 billion people, and will be largely youth, middle class and urbanized. The impression of your brand will have to speak to more and more people and it is key – to figuring out exactly who this audience is – you can’t speak to everyone.
- Communicate via technology
This combined with increasingly discerning buyers; technological innovations in communication and a need for convenience will challenge brands even more to make the most of the First Moment of Truth.
In Africa and South Africa, in particular, there is a growing demand for homegrown or locally made products that are tailored to relevant local needs or support local markets.
||Winning at the First Moment Of Truth
||Winning at the Zero Moment of Truth
||Availability and attractiveness (packaging)
||Great content marketing on owned media (e.g. website and blog, social media)
Good SEO ranking
The consumer should be able to find out about your brand easily and quickly.
||Eye Level in category – brand blocking if possible and with visual enhancement e.g. shelf strips, wings and lighting
Secondary display at Gondola Ends and on Free Standing Units
|Great content marketing on owned media (e.g. website and blog, social media)
Good PR via bloggers, online publications and reviews.
Mentions on various relevant sites by way of conversations of key users.
Value Adds (e.g. gift with purchase)
|Giveaways on owned media and bought media.
Regular co-promotions with partners and affiliates
Value adds for data (e.g. sign up to our newsletter and get a discount)
- Google Ads
- Facebook Ads
- Web Banners
||Visible and on point for the product based on the category (special price points where relevant)
||Price awareness through communication (price comparisons are good!)
More visibility both online and offline, and more activity, both online and offline, creates interest. The idea is not to be screaming so loudly that you annoy the consumer, but certainly to create an interruption point, in a way that adds value to their busy life, and busy day.
Broadly defined, “A shopper is the person that buys the product or service but does not always make the decision to purchase”.
We need to understand the science behind the decision to purchase and the purchase in order to engage in a meaningful way, and ultimately drive brand growth.
As J.B Wood said, “Want to fight commoditization and fly over the Margin Wall? Let’s start to innovate not just on what our products can do, but how we can get users to fully use them!”
The universe of shopper’s can be clustered into segments for each category. Each segment will determine the value its shoppers add to manufacturers and retailers. There are also differences in shopping missions amongst the segments. A shopping mission is led by the interpretation of a consumption need with consideration for a shopper need. In unpacking shopping missions, we should look at the following:
- Reason for outlet selection
- Basket size
- Profile of shopper
- Length of trip
- Time in month, week, day
- Economic health
This is not an exhaustive list, but rather my view of the broad factors to consider. Outlet selection probably tells us the most. Shoppers consider outlets based on the range it offers, convenience of navigating through the store, location and ease of accessibility, traffic on route to reach the outlet, outlet reputation and customer experience, promotions, alternative outlets, look and feel of the store, time availability, and cleanliness….the list goes on. The priority of these factors also change as shoppers mature into life stages. Store congestion might go unnoticed to a 20 something while it’s a strong consideration factor for a 50 something who does not want to be bumped by trolleys or stand in long ques.
Basket size goes beyond basket, double basket, trolley; to the contents in the basket, its category and price. For example, the basket size at a Quick Shop is likely to average out at around R60 while a supermarket is probably R 250 and an electronics store is at R3000. A shopper in each format needs to be marketed to differently and although the same person might go to all 3 outlets on the same day, what influences her to purchase will be very different because her shopping mission is different on each occasion. To add to the complexity, shopper behaviour changes in different channels and store formats.
Profile of a shopper includes demographic and behavioural attributes, like age/fitness levels, wealth, social status, inquiring, spontaneous… An elderly shopper might not be keen to go to a large wholesaler, due to the long walk needed to move around in the store. A wealthy person might reject the idea of shopping at a wholesaler because he does not want to be seen there. So the shopper profile influences outlet selection strongly and firmly, making it a barrier to influence as it is tough to change these particular factors.
Length of trip is determined by a trade-off between urgency of purchase and time available to shop. The mind-set of the shopper will decide on the potential to browse verses impulse buy.
Similar influence can be seen with time in month, week and day, providing insight into affordability, household needs and time available to shop.
Economic downswing or upswing, inflation, interest rates and employment rates are key determinants to disposable income for the average population, by income group cluster. Disposable income and credit accessibility directly impacts shopping patterns and consumption trends.
In order to communicate to your shopper in a way that is relevant enough for the message to reach her, we need to understand the shopping missions and drivers or influencers to her choices. This is a complex model built on insight into her shopping mission, path to purchase, consumption requirements, household demands and the economic environment.
Knowledge of above and understanding how each factor is relevant to shoppers in the category and target market will ensure the brand is the preferred choice. This is because the brand will be relevant on all consideration factors.
Understanding Lifestyles has increased importance in the last decade with the boom of online channels. Shoppers want more that the traditional engagement. They need to feel connected to the brand and understood by the brand to listen before being influenced to purchase.
The next step is to effectively communicate. Brands should seek to adopt trends quickly and understand how to leverage the channels. The landscape of communication forms has evolved and is currently a choice of many. Optimising an approach that carefully selects the channels and successfully integrates these channels would result in a louder message with broad reach. Because of the amount of noise, brand communication needs repetition.