Consumers Behaviour for Longchamp free essay sample

Table of Content 1 Situational Analysis Pg 3 2 Segmentation Method Pg 4 3. 1 Demographic Pg 4 3. 2 Geographic Pg 4 3. Psychographic Pg 5 3. 4 Behaviouristic Pg 5 3 Target and Positioning Pg 6 4. 5 Target and Positioning 4. 6 Perception Map 4 Psychological Factors 5. 7 Motivation Pg 7 5. Customer Perception Pg 8 5. 9 Learning Pg 8 5. 10 Customers Attitude Pg 9 5 Sociological Factors 6. 11 Social Class Pg 10 6. 12 Family Pg 10 6. 3 References Group Pg 11 6 Conclusion Pg 12 7 Reference list Pg 13 1. Situation Analysis Longchamp is family owned brand that has been around for almost 70 years. This brand began in 1948 when Jean Cassegrain, the father of todays President, founded the company. The milestone of the business started off from tobacco business, followed by concentrating in leather coating for cigarette cases. When the smokers’ market is declining, this is when he decides to display leather wallets for men in his shop window. Little by little, bags replaced smokers’ items in the company’s sales outlets. Currently with only 3 boutiques located in Singapore, it competes in the saturated fashion market with other well known fashion brands such as Chanel and Hermes. Due to the fact of being a privately owned firm which will inevitably affect its financial position when compared with other brands with regard to advertising efforts. Looking further into the employment status, Longchamp has 35% male and 65% female employees which indicate a strong emphasis in hiring female employees which might assist in strengthening its position in the female handbags market in terms of understanding the needs and design of ladies handbags. 2. Market Segmentation Longchamp’s have segmented their customers by geographic, demographic, psychographic and behaviouristic: 2. 1 Geographic Longchamp has been a luxury brand in 102 countries. In Singapore, Longchamp is only available in Orchard Road, like ION Orchard, Takashimaya and Paragon. As Orchard is well known for offering a dazzling array of international names suited to all tastes and budgets. By locating at Orchard, it can increase their chances to attract the targeted consumers which include the tourists that are more willingly to spend on higher quality and priced products as compare to the heartland malls. 2. 2 Demographic Longchamp target baby boomers, mainly females, age: 46 to 64 years old, the largest segment of consumers. As these groups of consumers are confident and living well, who have the higher incomes and are first to buy a new product and services. With the sophisticated lifestyle and technology nowadays, Longchamp also need to target both genders that are in the age range of 16 to 26 years old. As Generation Y cohort is in internet generation, they are open to changes and are more interested in purchase product that is more personalize. Therefore, Longchamp see this as an opportunity and started to implement online customized bags. 2. 3 Psychographic Considering Longchamp consumer’s AIO (Activities, Interests, Opinions), Baby Boomers has interest in fashion, seeking for a high status quo and they would prefer to select brands that is durable and trendy. Longchamp ensured high quality selection of leather source, consistently creating new designs and good after sales service (e. g. replacement of product due to manufacturing’s fault) to retain consumers and promote brand loyalty. Pertaining to the second group of consumers which of targeted consumers have been earlier identified to be Generation Y consumers which are IT savvy personnel. By allowing consumers to customize their own bags online which help invoke the need for self uniqueness which is evident in the current modern society where there is a strong appeal for individual identity especially for the Generation Y cohort. . 4 Behaviouristic With reference to the aforementioned, frequent online usage of websites such as Facebook is common among the population coupled with a strong sense of self uniqueness, as nowadays consumers are variety seeking and like attention. Longchamp has been seen to place emphasis on behaviouristic segmentation of their consumer base. With Long champ’s online design and purchase mode and promulgation through websites such as Facebook hence satisfying the need for convenience and product uniqueness required by consumers in the current market. 3. Target and Positioning 3. Target Longchamp target baby boomers and Generation Y cohort as they are a reasonable size of consumers that is easily accessible and allow Longchamp to have a reasonable amount of profit to be sustainable in the fashion industry. They target to have long term relationship with their consumers by having relationship pricing. 3. 2 Positioning Expensive 3. 2 (a) Perception map in Fashion Industry They maintain their products in high quality and priced it in a lower range as compare to its competitors as shown: High Quality Affordable Mango Zara Louis Vutton Bottega Gucci DKNY St Louis Perlini Long Champ Loewe Hermes Prada Kate Spade Chanel Coach Elle FCUK Marc Jacob Dior Charles and Keith Low Quality 4. Psychological Factors 4. 1 Motivation Longchamp focused on driving customers to buy their products by attending their acquired needs. Longchamp using applications like instance communicationsadvertising, public relations, personal selling to create the desire and build up the tension to motivate customers. (E. g. When Kate Moss and Madonna are seen publicly with their bags, this can be one of the emotion causing stimuli that will motivate consumer to buy). This creates the drive to want to purchase their products and when they have purchase, the needs or goals are fulfilled. However, they also realise that everyone needs or goals is ever changing, as old needs is satisfy, new needs emerges. Therefore, they consistently come up with two designs every year to re-build the tension and create the drive to encourage current customer to purchase their bags again. Unfulfilled Needs, Wants and Desires Tension Drive Behaviors Goal or Need fulfilled Previous Learning Cognitive Processes Tension Reduction 4. 1(a) Model of Motivational Process Model of Motivation Process Source: From Jeffrey F. Dugree et al. , â€Å"Observations: Translating Values onto Product Wants,† Journal of Advertising Research, 36, 6 (November 1996). 4. 2 Consumer’s Perception Consumer’s perception is developed from the 5 stimuli like the sight, smell, sound, taste and touch. Longchamp have done a good job by designing and sell bags that come in a whole range of sizes, in different designs and colours that can be carried in an equally wide variety of ways. This is creating a differential threshold or the just noticeable difference (J. N. D). They make product improvements consistently is to allow consumers readily perceived that they have make improvement to the original products. Therefore, when it comes to price increase, less then J. N. D is desirable because their consumers are unlikely to notice it. However, Longchamp have overlooked their decorations and display in their shops as they are too dull and might not seems to be appealing to consumers. They should consistently change their display, re-designing their shop, adding scents so that they could to attract and encourage consumers to patronize their shop and purchase their products even in a higher price. . 3 Learning For instrumental conditioning learning, Longchamp believe that when their consumers are engage in extensive problem solving behavior, it will lead into a strong brand preference. They ensure their products meet the consumers’ satisfaction for their quality, design and colours which in result of the repeated purchase. Brands Awareness Purchas e Loyalty Learning Knowledge Repetition Longchamp also use medium like word of mouth from the consumers’ family and friends, internets (E. g. facebook and blogs), magazine advertisement (E. g. Females, Her World) to allow consumers to learn about their products, events and promotions. Using this classical conditioning, it encourages repetition of exposure and allows Longchamp to be known by people. However, in order for their brands and products to be sunk into consumers’ long term memories, they should associate refreshed information in different type of medium. 4. 4 Consumer’s Attitude Longchamp also emphasize on their customer service and after sales services. They believe that allowing their consumers to have a good personal experience will be the starting point of their attitude formation. They had after sales department to take care of any consumers’ complains or feedback. With this, their consumers will spread the information and share their good testimonials by the words of mouth to influence the attitude of their family and friends towards this brand through internet as one of the media. Though Longchamp have associated their brands with some celebrities like Kate Moss, however, they should also look into other admired groups or even sponsor events that involve mass media to build up their brand name and change beliefs about their competitors. Formation of Attitudes Influence of Family ; Friends Personal Experience Promotional Activities Internet Mass Media 5. Sociological Factors 5. 1 Social Class Longchamp consumers are from the middle to the upper income class group which stand 90% of the population in Singapore. The highest increase in consumption will be the middle income group which like to show their status in the society. In order for Longchamp to attract upper and upper middle class, they should hold more private exclusive closed door sales. This will encourage the upper income class to patronise their shop more often as they like to be treated differently. of population| Income Class| Monthly income S$| Type of Housing | 10| Upper | ;13,800| Condo and landed| 30| Upper Middle| ; 7,800| EC,EA,EM ; Condo| 50| Middle| ; 3,800| 3-5 Room HDB| 10| Lower | ; 1,500| 1-3 Room HDB| *Above Statistic is reported by the Board of Statistic in Singapore for Year 2009 5. 2 Family Longchamp target 3 stages in the family lifecycle. They are the bachelor stage when much freedom for decision-making is apparent. Secondly, newly married couples where there’s dual income in the family, they are able to spend on more luxury products especially the females. Lastly will be the empty nest, where the children are no longer living together, this is the stage where they have more disposable income and that they are shifting from a materialistic to a more experiential phase of their life and prefer to buy things that are stylish, and technologically oriented. 5. 3 Reference Group For consumers under Generation Y, they are highly influenced by the power of media as well as indirect reference group. As such, we should get celebrity endorsements both local and international to appeal to them. By having celebrity credibility, the consumer perception of both the celebrity expertise and trustworthiness will increase. Longchamp also aim and direct their attention towards the contractual group (existing consumers that satisfy with their products) and the aspirational groups and in at all time they should not target at the disclaimers and avoidance group as it could result in negative influence on consumption behaviours as we can see from the diagram 5. 3(a). 5. 3 (a) 4 Types of Reference group 1) Contractual Group 4) Avoidance Group 2) Disclaimers group 3) Aspirational Group Positive Respone Negative Membership Group Non Membership Group 6. Conclusion Having considered available marketing segmentation for Longchamp, it is clear this exclusive and luxury brand need to understand more about their consumers’ constant changes in psychological and sociological aspects. Especially in fashion industry these consumers can support the business lifecycle and they are also the main source of bright new ideas that can strengthen the businesses and consumer relationship. The main challenge is to discover the best way to attract these consumers consistently and create a long-lasting consumer loyalty. Many patronize these brands for their good quality, despite their expensive prices. Some people also buy these brands to enhance their style and fashion statements, which can be provided by using these brands. Furthermore, many patronize these popular brands to uplift their reputation in the society for many believe that people who have branded products are well off and educated. With these, it can be observed that the brand image of a certain product or products determines the loyalty of its consumers and its success in the market. (1,764 Words Count)