For many products, consumers show high concern for prices. As the watch market demonstrates, this certainly is not always directed at saving money. Amazingly, in times of uncertain economic conditions and inflation, Americans have joined many well heeled Europeans in their interest in expensive watches. In fact, many retailers have noticed that the more a watch costs, the better it seems to sell. This market is not composed of people seeking a highly accurate time piece, because such instruments can be obtained for a mere $ 500 or less. Instead, the “expensive” market comprises those who want to tell the world something about themselves and their financial situation. Top Models satisfy such buyers are priced from $1500, and some are in the $5000 to $8000 range. Top models frequently retail at approximately $ 15,000, while a special custom order has been known to sell for $ 4.3 million. For those who believe this expensive watch market is small, it should be noted that one New York dealer sold nearly 50,000 gold Swiss watches in one year alone.
Place: The place variable involves consideration of where and how to offer products and services for sale. It also is concerned with the mechanisms for transferring goods and their ownership to consumers. Decisions influenced by consumer behavior include:
Mowers and Mortgages:
Some retail companies offer a great many products to consumers. In each case the question that must be addressed is whether a given product can appropriately be offered through existing outlets. This certainly was a valid question when Sears decided to form the Sears Financial Network. This network is comprised of All State Insurance, the Dean Witter investment group (stocks, bonds, and so no) and Coldwell Banker, which deals in real estate.
The concept seemed exciting at the Financial Network’s inception in 1983 provide these services as a consolidated set of offerings to consumers through many of Sears’ 850 retail stores. Several advantages seemed to accrue from this offering of services First, Sears is a massive retailer with a vast number of customers. Therefore, placing offices of the Financial Network in Sears stores would put them in close proximity to many potential customers. Also, cross-selling opportunities seemed very encouraging – sharing of customer records between various branches of the Financial Network would allow Sears to, acquaint users of one product with the nature and features of others. For example, a list of recent home buyers obtained from Coldwell Banker could be used by All State to market homeowner’s insurance.
However, the performance of the Financial Network didn’t seem to meet the expectations of Sears or many analysts. Consequently, Sears seemed to withdraw significant marketing support for the concept over the next several years, slashing its advertising budget from $ 15 million to zero. Some claim, that the problems was one of a poor concept – Sears customers really aren’t interested in one stop financial shopping along with their retail purchasing. Psychologically, at least some customers find it difficult to mix shopping for mortgages and mutual funds with shopping for mattresses ad mowers. Another area of concern was whether customers would really be ready to make quite significant financial decisions in any one shopping trip. If not, then locating Financial Network offices in Sears stores would be likely to lose much of its claimed, advantage of convenience for shoppers and could generate disadvantages with respect to attracting customers.
Promotion: Of concern here are the goals and methods of communicating aspects of the firm and its offerings to target consumers. Consumer related decisions include:
1) What methods of promotion are best for each specific situation?
2) What are the most effective means for gaining consumers’ attention?
3) What methods best convey the intended message?
4) How often should a given advertisement be repeated?
Such questions had to be addressed when managers of Sun Cloud decided on a rather novel advertisement for their sunglasses.