MBA 640 Project 1: Researching Consumer Buying Behavior Step 5: Complete Your Value Proposition

Business Finance

MBA 640 Innovation through Marketing and Technology

University of Maryland Global Campus

Question Description

Step 5: Complete Your Value Proposition

Early in Week 2, submit a one-page value proposition to Erik.

INBOX: 1 New Message

From: Erik Knops, CEO, ACME

To: You

Just a quick note,

I wanted to clarify that a customer-focused value proposition explains the reason why a customer purchases a product or uses a service (i.e., the value that a company delivers to its customers).

Deliverable: Based on your research of consumer needs in our main markets, describe your value proposition, or the benefits that ACME and its potential new product would provide to customers. Remember, a value proposition is essentially the promise that is made to the customer. Also provide a half-page recommendation to ACME on whether or not to manufacture that product.

Support your work with the course readings, scholarly sources, and reliable nonscholarly sources, such as Reuters, Bloomberg, Yahoo! Finance, Barrons.com, Morningstar.com, Money, Forbes, Fortune, the Financial Times, the Wall Street Journal, and the Harvard Business Review, as well as the UMUC Library databases, such as Hoover’s. All sources need to be cited using APA formatting, both within the text and in the reference list. The value proposition should be organized using headings and subheadings to improve its readability.

I know these are tight turnarounds, but I have no doubt you'll knock this out,

Erik

Email signature with ACME corporate logo, Erik Knops, Chiefe Executire Officer, and contact info

Unformatted Attachment Preview

1 Researching Consumer Buying Behavior Student’s Name Institutional Affiliation Course Title Professor’s Name Date 2 Researching Consumer Buying Behavior The most crucial and significant function that businesses undertake in marketing is the analysis of consumers’ behavior. The consumer decision-making process involves five steps, including information search, need recognition, alternatives evaluation, post-purchase, and purchase behavior (Consumer Buying Behavior, n.d.). The analysis of consumers’ behavior helps businesses understand the consumers and predict the buying trend and behaviors in the market. This report focuses on ACME's washing machine customers in the United States, Germany, and the United Kingdom. For these three markets, the report delves into establishing the features that customers prefer in their washing machines. Thus, the report encompasses what customers purchase, why they buy it, where they buy it, and how they purchase it. Washing machines are among the most purchased products by a large market population globally. Washing machines are often used for commercial purposes and in households. However, for ACME to be successful, it will need to undertake a value proposition that focuses on each market’s uniqueness. For example, studies show that consumers from Western Europe use small automatic front-loading washers while those from North America usually use huge top-loading automatic washing machines. Due to the wide range of established brands, ACME is likely to face competition from companies such as Whirlpool, Electrolux, and Haier, which develop innovative and efficient washing machines (ACME Meeting, n.d.). The washing machines from these competitors also use less power and electricity, have attractive designs colors, and are durable. However, marketers can help in reducing the competition, although they face challenges. The toughest challenge that marketers face is the challenge of differentiation and compiling the diverse demographic data that includes geography, occupation, age, gender, race, culture, sex, marital status, level of education, level of income, and lifestyles as a strategy to 3 understand these consumers’ purchasing behavior as one of the most important factors that marketers differentiate. Consumer Buyer Behavior Typically, consumer behavior circumnavigates the studying and analyzing consumers’ decision-making approach or process. Consumer buying behavior blends basics, such as cultural, social, and personal factors. These are the key elements and influencers to customers buying behaviors (Consumer Buying Behavior, n.d.). However, various sub-cultures include other factors such as gender, economic status, age, and consumer’s personality, psychological, and educational factors. The main reason why researchers and marketers research consumers' behavior is to answer two main questions. The first question concerns factors that influence customers’ preferences, selection, and as well as their final will to purchase. The second question relates to the methods and approaches that marketers use to increase the product’s sales. The customers’ personal, social, and cultural factors are necessary since the company can produce products that align with the customers’ preferences. Personal The personal factors involve the unique aspects and factors that affect and influence a customer’s preference. These factors include age, sex, occupation, education, attitude, race, and salary. Additionally, the person who monitors a consumer’s spending rate can influence what the customer purchases. The younger generation purchase laundry pods since its compact, simple, and its design is convenient. Moreover, it contains a fabric softener and a cleaner enclosed in one item. Another factor for the new property is the storage; customers prefer compact pod boxes to bulky liquid containers since it is better and convenient. However, the powder products are mostly preferred by the older population because they like to separate the softener part of the 4 machine when doing the laundry. It is easier for manufacturers to produce suitable products for different ages and different people’s lifestyles when the consumers’ attributes are well understood. Social Typically, the prevalent factors in consumers’ lives are social factors. These factors include the place where the customer resides, how the customer is living, the work, plays, and the people that the consumer interacts with. Such factors can affect attitude and consumers’ buying behavior. Additionally, the association that pertains to the consumer’s economic wellbeing is a social factor that influences the buying behavior. Generally, family, social class, leaders, and culture influence the consumer’s wants, learning, and character. The buying behaviors affect the customers’ preferences when deciding on the products to purchase. Eventually, customers perform activities recognized by society. Marketers should research the next movement to be taken by society before it becomes a movement; this will help organizations determine customers’ needs for the products and services. In a society that focuses on busy activities throughout the day, many consumers purchase laundry machines to make their work easier. Cultural Culture could be described as the beliefs, values, behaviors, experiences, and attributes developed and accepted in society. These attributes drive our actions and influence consumers’ decisions, and hence, they affect consumers purchasing behavior. For instance, a consumer can purchase a laundry machine not because it is a must but because they have been raised in families using the machine. These customers may buy the machines from their nearest retail shops or supermarket to show their support to their local culture and contribution to society. 5 Automatic Washing Machine Market Numerous types and brands of washing machines have been developed, and competition in the market is concentrated due to the various competitors who develop competitive products. Fortunately, an untapped source of new customers still exists and can be utilized by the industry. This is because consumers' needs and their buying behavior vary from water usage, value, garment protection and preservation, cleaning time for certain garments, and enhanced sanitation. This part will delve into three washing machine markets that include the United States, the United Kingdom, and Germany. The US Market Needs/Benefits Typically, the reload function is among the essential new washing machine features that are intended to trigger American consumers or buyers. American customers would prefer buying a machine that can be easily operated. Introducing a machine that can be operated by pressing a button and automatically pause or commence the cleaning process will have addressed the American market's needs. Moreover, American consumers need to invest in purchasing washing machines that allow users to add more clothes without waiting until the subsequent load. Moreover, consumers in the US markets want a washing machine that has air drying features. Therefore, for ACME to capture the US market, it has to introduce a washing machine that can remove as much moisture from the clothes as possible. This is because when excess moisture is removed, the users will require minimal drying after laundry. Another essential need that ACME should seek to address in the American market is the incorporation of the smart rinse feature. With this feature, the user has more control over the washing cycle. Moreover, the feature allows 6 the washing machine user to specify the quantity of water to be used during the cloth rinsing cycle. Purchasing The consumers from the United States market anticipate purchasing a product that saves their time as well as resources. Nowadays, people have must businesses that require their attendance. Therefore, spending hours while doing laundry is considered a wastage of time. However, the primary consideration is how quickly and efficiently the machine performs, and the time it saves. Typically, users anticipate getting a machine that will not require them to sit and monitor the laundry process since they have many other tasks to accomplish. The purchasing decisions of the US consumers are highly influenced by various motives that prompt them to buy a product. In this case, the psychological motives are considered essential since they inter-linked with the satisfaction that a consumer gets due to the product's performance and service. A consumer is usually prompted to purchase a product if it satisfies his or her laundry needs adequately (Panitapu, 2015). If the automatic washing machine is satisfactory, the primary buying motives of the US customers will be provoked, causing an escalation in demand for the commodity. Therefore, although consumer motives may vary, ACME should strive to introduce a washing machine that meets these motives diversely. Where Sold Typically, a vast number of US citizens would prefer purchasing home appliances such as washing machines from local stores and organized outlets such as Home Depot. Moreover, due to technological advancements that have facilitated the establishment of online stores, most consumers in the United States can also purchase appliances from online stores such as Amazon and Walmart. Additionally, as much as the US consumers are willing to spend more capital on a 7 washing machine that has suitable features, they also compare the prices of competing brands. Since American consumers like warranted products and promotional schemes such as gift cards, ACME should utilize such schemes in their marketing strategy. Seasonality/Rate of Purchasing Like other electronic gadgets that consumers purchase, users of washing machines expect that if they purchase a washing machine, it will serve them for a reasonable time and give back the value of their capital (Tangel, 2017). Therefore, customers in the US market expect to use the washing machine for some years before purchasing another. Therefore, the company should expect seasonality since if customers buy the product, the frequency of purchasing will reduce until the need to purchase another washing machine arises. However, it is also expected that new buyers will gain interest in the product, and thus, the sales will still be high. Furthermore, purchasing levels are likely to escalate in the US when a new washing machine is introduced into the market. For instance, during trade shows, American consumers will be searching for the newest and innovative washing machines that are available in the market, and this is likely to optimize ACME's sales for the new product. U.K Market Needs/Benefits Customers in the United Kingdom would like to know if the washing machine that ACME intends to introduce into the market is a huge time saver because the users do not want to buy machines that will waste their time. They anticipate to purchase automatic machines that will allow them to load their clothes, initiate the washing cycle, and engage in other personal activities while the machine performs the task. Moreover, buyers from the UK want to purchase a machine that would eliminate the efforts they need to utilize during the laundry process. Unlike 8 the physical cleaning process where the washer needs to remove stains by scrubbing them vigorously, the new washing machine should allow the person who is washing to pretreat the stains using a washing detergent; then the agitator performs the rest of the work (Milne, 2016). Apart from the fast wash, child locks, and noise, European customers will also consider the machine’s spin speed while buying the new product (Panitapu, 2015). This is because a faster spin speed will ensure that the laundry process is faster and consume less cleaning cycle time. Purchasing The UK customers purchase products according to their preferences, like the size of the machine, since a majority of them reside in small houses. Europeans put operate their machines in the kitchen, unlike the Americans who have a washing room. The difference is remarkable for the company because the tastes and preferences of the three targeted markets are different. The most crucial factor that UK customers consider when buying the washing machine is satisfaction. Humans are rational, and their decisions are likely to be influenced by the product's information available in the market. Marketers should focus on understanding how customers make their decisions. Where Sold Among the washing machine's target market, Europe is the leading; the demand for the product is growing further due to technological advancement, and they prefer buying the machine from retail shops or from the company store. Therefore, the company must sell through the distribution channel, like the salesmen (Panitapu, 2015). The company can also sell its products through E-commerce; this will enable the company to make inventory predictions in advance. Additionally, UK customers use their brands to build loyalty; therefore, they prefer purchasing products through specific outlets such as Argos and Appliance City. 9 Seasonality/Rate of Purchasing The probability of purchasing depends on the research conducted concerning the product and its remarkable quality features. European customers prefer evaluating a product online using stores like Amazon, where they have an opportunity to strike a bargain; price is a factor they consider when purchasing products. This interprets the higher sales during promotion campaigns for the washing machines and when the prices are slashed during trade shows. German Market Needs/Benefits German market consists of unique consumers who commonly weigh the technological advancement of a product before they purchase. Therefore, as a factor of consideration in their teste and preferences in purchasing the machine, they believe that a machines’ high technologized features can extend their lifespan and efficiency in operation (Danziger, 2019). Hence, the new device should be formulated with the latest technological features to suit consumer preferences in the market. Besides, the types of garments that Germans clean can influence the type of machine desired to cater to consumer needs in the market. Germans have different garments they would like to clean, both soft and plump, and large loads. Thus, the machine should be desirably made to handle the heavy and soft garments by improvising a delicate cycle for each type of garment the consumer will be having (Levitt, 2020). This will ensure the right cycle for specific garments hence protecting consumers’ clothes from any damage. Purchasing Customers are always unique in their purchasing decisions since they would consider a wide variety before reaching into the purchasing decisions, including evaluating their needs and 10 benefits. In German, most purchasing decisions seem to be influenced by friends’ recommendations or reviews from other buyers who have experienced the product’s services. Therefore, ACME marketers should be the key influencers to these machines in the German market. First, the marketing department should ensure that they incredibly familiarize the potential buyers with the machine and the brand identity and persuade their opinion on buying the product. The information about the machine’s feature and how perfect it is will be a strategy that will drive consumer understanding of the product. Germans like to hear the credibility and efficiency of a product from the owners since they know how it functions (Attreya, 2018). Lastly, the serving and customer care should ensure perfect after-sales services to please buyers’ attention to spreading significant insights on how the company’s customer handling is smooth. Hence, this will weave the company’s brand and image and make promotions authentic to the market’s target consumers. Where Sold Perfect selling outlets in the market influence potential customers for certain products sold in the market. The ACME’s German target market requires stationery products at home; hence, perfect distribution channels should be selected to ensure that the machines are readily available locally. Therefore, whole-selling, retailing agents, consultancies, and reselling distribution channels should be established to ensure the final consumer’s flow and build a healthy relationship in the local market (Tangel, 2017). These distribution channels will be perfect in German because the consumers are very loyal to their local and specific electronic outlets; hence the retailers and wholesalers will entirely sell the washing machine using their outlets than the company itself. Seasonality/Rate of Purchasing 11 ACME’s product does not have a perfect season where it can be said to be at its peak or low season because most consumers seem to buy a new product when they have evaluated their needs. Besides, Germans prefer buying another machine when they are old or have experienced mechanical problems and damage. Thus, consumers without the machine can decide to purchase when the machine suits their needs, although only a few can purchase it during the promotional days and marketing. ACME’s Value Proposition The value proposition of ACME will entail the value that the company will attach to the new product in case the consumers from the different market segments decide to purchase the product. The value proposition is important since it highlights the declaration that the company is introducing a new product and tell the buyers what the brand entails, how it operates, and why consumers should buy the product from the company (Tankersley, 2019). Therefore, the value proposition is like a business marketing statement since they highlight why customers should purchase from that company. The value proposition should be aimed at convincing present and potential clients to buy the product from the company rather than its competitors. ACME's washing machine delivers safe, affordable, and clean results with minimal effort and time. The company's value proposition also addresses the needs and wants of the consumers who buy the washing machine (Value Proposition, n.d). Customer Market The customer base is comprised of low-to-high class customers in both rural and urban markets. These areas depict the availability of a market share in three markets where ACME is interested in selling its products that include the US, the UK, and German. Benefits 12 Typically, the uniqueness that customers from the US will get after using the new product will be vital in determining the company's market position. Therefore, ACME will incorporate unique features such as low noise, low energy consumption, technology, and high spin speed in the new product, which will be beneficial to the US consumers (Kraaijenbrink, 2020). These features will play a significant role in attracting numerous customers despite the tough market forces. On the other hand, German consumers will derive various benefits from the new product that include ease of use, child safety, and affordability. However, it will be essential for the company's marketing team to enlighten the clients on the potential benefits of using the product. Finally, the UK clients will purchase the product based on the unique features it displays as well as its efficiency of use. This is because the unique features of the new product communicate its strengths and how perfectly it can serve the consumers. Recommendations and Conclusion Based on the analysis information provided in the report, numerous significant opportunities are available in the industry segment of the washing machine. For instance, in the US the market is anticipated to experience an average growth of 1.3% within the next five years. Therefore, ACME should launch its new product and utilize or take advantage of the opportunity. On the other hand, t ...
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