There are many markets in the world, but one of the most interesting ones is the consumer market. This has been a hot topic for years now and it's not going to be cooling down anytime soon. The purpose of this post is to give you an overview of what a consumer market really entails so that you can have some understanding as new trends in marketing develop over time.
Definition of consumer market
What is a consumer market?
A consumer market is a market in which customers (buyers) are also final consumers. These customers make their purchase for consumption, which is different from organizational customers who make their purchase for production.
The word "consumer market" refers to B2C (Business to Consumer model)
Examples of consumer market:
US smartphone market
Global gaming console market
Asian Beverage market
US restaurant & hospitality market
Fashionable clothing market
Distinctive characteristics of consumer markets
Consumer markets have some distinctive characteristics, which make them different from business market:
- Consumer markets usually have an increasingly growing scale.
- Customers in a consumer market have changeably diverse needs, which are formed and affected by their age, gender, occupation, characteristics, perception... and law, culture, education, technology... in their living environment.
- Customer insights in consumer markets are often easy to be reached by marketers.
- Firms usually make a lot of sales in a consumer market, but the number of purchased items per sale is low.
- Firms in a consumer market make sales by retailing.
Demographic characteristics of consumer markets
Responses of customers to a firm's marketing offerings in a consumer market are different by its demographic including age, gender, occupation, income, social class, culture, religion, generation, ethnicity... For example, in The US automobile market, high-class consumers usually prefer prestige brands such as Bently, Rolls-Royce, Maybach, Mercedes-Benz, Lexus, Audi, BMW... while low-class consumers prefer economic brands such as Toyota, Honda, Huyndai, KIA...
Marketers usually categorize (segment) consumers by a certain range of a demographic characteristic. The categorizing helps them to build better marketing programs in order to satisfy customer needs well. For example, Clothing companies can identify the age of their consumers in the 18 to 24, 25 to 34, 35 to 54, 55 to 65, and 65+ age groups. Credit companies can divide their consumers into many groups based on their income: Below $25,000/month, $25,000 - $50,000/month, above $50,000/month....
Psychographic characteristics of consumer markets
Responses of customers to a firm's marketing offerings in a consumer market are also controlled by their psychographic characteristics. These characteristics include perception, learning, interests, opinions, values, attitudes, lifestyle, personality... For example, after reading some information about the coronavirus outbreak on the media, many people have rushed into supermarkets to buy food because they fear the shortage of food supply.
Marketers in consumer markets exploit psychographic characteristics of their target customer to increase the effect of their marketing programs. For example, Rolex - a luxurious brand, is not only successful because of their precise watches but also their marketing message. For a decade, Rolex have tried to build their brand as the image of success through many famous athletes and championships. Therefore, consumers who want to be successful in life also prefer Rolex.
Firms can also segment their market by customers' psychographic characteristics.
Behaviorism characteristics of consumer markets
Sometimes, instead of researching demographic or psychographic characteristics of consumers, firms choose to exploit behaviorism characteristics of consumers. These characteristics are shopping occasions, usage rate, brand loyalty, benefits sought... which can be easier to be found.
By getting deep in consumer behaviors, marketers can know how to bring better marketing programs. For example, Campbell’s spends the most heavy budget on advertising for its soups in the cold winter months. And for more than a dozen years, Starbucks only offer "pumpkin spice latte" in autumn to maximize the profits.
Similarly, behaviorism characteristics can be used in market segmentation
Geographic Characteristics of Consumer Markets
Most international firms are always aware of geographic characteristics in a consumer market. These characteristics can be population, region, location, climate, local law, local culture... For example, despite the bad relation between the United States and China, Apple still wants to maintain its business in China because of the population size of this country.
Facebook now has to face difficulties when Australia is working on their new bill, which forces Facebook to pay for Australian publishers when their news is shared on this Social Network.
A small firm may exploit geographic characteristics of a consumer market to find their market niches where big dogs haven't run yet. For example, "Vegemite" is a national brand. Their products are made by australians and for australians.
The consumer market is a place where marketers can find different ways to increase their product sales. Through understanding the behavioral, psychographic, and geographic characteristics of your customer base you will be able to create more successful marketing campaigns for both long-term success as well as short term gains. In this blog post we have discussed some of these important aspects that need to be considered when trying to understand how consumers think in order to make better decisions about what products they are going purchase .