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Customer's Purchasing Behavior is changing frequently at the present time and one of the reasons is the Competitive Market. The retail market in particular has become so competitive with the current situation that new companies are entering the market every day, and as a result, it is becoming more and more difficult for older companies to keep their position stable in the market. Unilever is currently focusing on developing multiple retail products as well as advancing cosmetic products. This study will look at how changes in Customer Purchasing Behavior are affecting the cosmetic sector. The study will also provide detailed information on how this issue is affecting Unilever's business model in a critical analysis.
Activity 1
i. Model of consumer decision making
Figure 1: Consumer buying behavior model
(Source: Meenakshy and Srivastava, 2022)
Need recognition
Before buying a product, customers try to understand the importance of buying that product, and in this case, if the customer really thinks that they need to buy that product, then the customer decides to buy that product (Meenakshy and Srivastava, 2022).
Search for information
Customers do a lot of research on a particular product before buying it. The big challenge for Unilever Competitive Market is that the customers in the cosmetic industry do a thorough research before buying the product (unilever, 2021).
Evaluation of alternatives
Within a specific budget and quality, customers compare multiple companies' products with each other. Multiple cosmetic companies in the market say the product is on the market, which is a big problem for Unilever.
Purchase decision
Decides to buy any product after understanding and comparing the quality, and in this case marketing and product position is very important (Al-Hasan et al., 2022).
Post-purchase decision
In this case, after purchasing the product, if the customer's experience is good using it, then the product is bought again from that company.
ii. The consumer decision journey
Customers usually face a number of important journeys before purchasing a product, such as
Pre-purchase journey
In this case customers try to understand their demand before buying any product. As mentioned by Lawes (2022), at present, multiple companies are creating demand in the market to increase the sales of their products, and in this case, the company's brand value and market strategy are given much importance.
Purchase journey
In this case the customer tries to understand all the details, quality and price of the product before buying any product. This is why Unilever maintains transparency in product delivery (unilever, 2021).
Receipt and post-purchase
In this case, if the customer chooses to use the company's product, the customer can buy the company's product again.
iii. The economic man theory
Figure 2: Adam Smith’s The Economic Man theory
(Source: Liu and Henninger, 2022)
According to economic man theory, maintaining a balance between the three aspects (such as land, labor, and capital) of a company increases the company's chances of success (Liu and Henninger, 2022). These factors are much more effective for production companies and make them more stable decision makers.
Unilever's management team is currently focusing on these three factors because the internal infrastructure of the company has to be much tighter to compete in the market, and in this case these factors are greatly helping (unilever, 2021).
In addition to Labor, Land and Capital, the company also focuses on a number of other issues, such as manufacturing, distribution, and circulation. As opined by Ogiemwonyi (2022), all of these factors contribute to the improvement of supply chain management, and depend on the supply chain for Customer's Purchasing Behavior.
iv. Black box model
Figure 3: Black box model
(Source: Khan et al., 2022)
In the case of the black box model, three things are given more importance, such as input, optimize, and output (Khan et al., 2022). Unilever's management team seeks to understand market demand for input activity, and at the same time the appropriate strategy is developed by understanding the customer's attraction towards other companies' cosmetic products (unilever, 2021).
Developing a strategy through input activity means that the product is manufactured according to those strategies and plans. Based on the information obtained from the product and market analysis, the product is manufactured on behalf of the company. Finally the output method is used to deliver the product to the market through the advanced supply chain, and he tries to reach the customer at the same time (unilever, 2021).
Activity 2
i. Individual and organizational buying behavior
Individual and Organizational Purchasing Behavior is influenced by multiple factors, such as
Environmental forces
In this case organizational buying behavior is affected by the economy and business environment of different countries. For example, in this case organizational buying behavior is affected by the economy and business environment of different countries, and there is also support from customers to improve the economic factor (unilever, 2021).
Organizational forces
In many cases the company’s developed objectives and mission standings are also influenced by organizational and customer behavior (Clark et al., 2022). For example, Unilever's management team is using artificial intelligence to maintain product quality, and because of this the company's product sales have increased.
Group forces
The work culture of the company and the behavior of the employees greatly affects the production process of the company, and the effect on the final product is then changed to the Purchasing Decision of the Customer (Danner and Thøgersen, 2022).
Individual forces
In many cases the emphasis is on the specific company based on customer experience, demand and budget, and as a result, the market and other companies are facing a lot of problems.
ii. The individual and organizational buying process
From the above discussion it is understood that in the case of the five step buying process some special issues are given importance, such as problem identification, research on product, alternative evaluation, purchase decision, and post-purchase decision evaluation. In the case of eight-step purging behavior, some more special approaches are emphasized, such as
Figure 4: Eight steps for purchasing decision
(Source: Tulensalo, 2022)
In this Purchasing Behavior, the General Needs of the customers are given much importance. This eight step behavior model is especially targeted at middle class and lower class customers because they do not cost too much, and so they are well-checked to buy a product (Tulensalo, 2022). Therefore, through General Demand, customers try to understand how long the demand can be met without buying the product. Moreover in this case the product supplier is thoroughly verified by the company to try to understand the quality of the product.
iii. The characteristics of organizational buying behavior
Several characteristics of Organizational Buying Behavior have been identified, such as
Timing complexity
Organizational factors are greatly affected when it comes to buying or selling products at the right price at the right time (Rutitis et al., 2022). For example, as the market becomes more competitive, Unilever's production team has to buy more expensive raw materials from suppliers. As the price of the final product rises, so does the need for Unilever to compete in a competitive market.
Technical complexity
Technology implementation is important for product manufacturing as well as developing them well and in large numbers. All the companies in the market have used technology to stay ahead in the competitive market, and to stay ahead of these companies, Unilever has to spend a lot more on technology implementation (unilever, 2021). The issue of technology implementation greatly increases the cost of the company and affects the capacity of the organization.
Organizational complexity
Demand for this specialty has grown significantly as a result of recent corporate scandals, especially in the cosmetic industry. Depending on the market demand, the company is one of the most flexible companies in delivering products, and the risk factor is one of the most important problems for maintaining flexibility (Woods et al., 2022).
iv. Unique factors influencing B2B buying behavior
The B2B or Business-to-Business model usually involves the delivery of products from one company to another, and there are some special influencing factors at work in this regard, such as
Individual factors
In many cases different companies change their policies for the sake of their own business, and this has a profound effect on the B2B business model (Slazus, 2022). For example, in the United Kingdom market, Unilever supplies many products to third party retailers to target more customers. However, in this case, the retailers are trying to sell Unilever's products at a higher price in order to make more profit, and as a result, Unilever's sales potential is greatly reduced.
Organizational factors
This has a negative impact on the B2B model due to multiple problems in the company. For example, Unilever relies on a number of third party companies for the supply chain. Due to poor supply capacity of some of these suppliers, they could not be utilized properly in pandemic situations, and as a result, Unilever has suffered a lot, which is not a good thing (unilever, 2021).
Business environment
In this case, the business model is much affected due to the financial environment and business environment of different countries (Sternberg and Shoham, 2022). For example, in addition to the United Kingdom, Unilever's stakeholders have higher profit margins from markets in the US, India and China (unilever, 2021). In addition to these countries, Unilever's business has more than one country, but its business environment is very favorable, and in those countries, Unilever's growth margins are much lower.
v. Market research in the context of B2B and B2C
Due to pandemic problems in developing this research, the help of secondary research has been used instead of primary source. In order to find out more about the factors that affect B2B and B2K business, take the help of an article written by an expert, such as
Situational factors
Many experts believe that depending on the market situation and the customer's income, the Purchasing Decision changes (Fujak et al., 2022). For example, due to pandemic problems people lost a lot of income and because of this people bought less cosmetic products, and that's a loss for Unilever.
Personal factors
Many customers also find that Purchasing Decisions change for personal issues and other attitudes (Meenakshy and Srivastava, 2022). For example, customers who are satisfied using Unilever's products are more likely to buy Unilever's other products.
Psychological factors
Many customers try to buy the product by understanding the name and brand value of the company, and in this case the products of the companies whose brand value is higher are sold more (Al-Hasan et al., 2022). For example, Unilever's brand value is so high that the company's products sell well without much advertising.
Social factors
In some cases, the company prefers to buy products based on the recommendations of others, and as a result, consumers have less freedom to choose their brand, and this can lead to more problems for multiple companies (Lawes, 2022). This is a very important issue for Unilever as it is more important in cosmetic products.
Activity 3
i. Individual approaches to consumer learning
Consumer learning depends on a number of factors, such as
Behavioral skill
In the case of behavioral skills, customers are influenced by a number of factors, such as customer’s income, customer-r buying behavior, customer;s brand, and market availability (Liu and Henninger, 2022). Depending on all of these factors, the customer will try to make the right decision when purchasing a product.
Cognitive skill
When it comes to cognitive buying skills, customers are influenced by a number of factors, such as “Different or unique products”, “Experience on products”, and “Experience changing method” (Ogiemwonyi, 2022). This is why Unilever is trying to develop new cosmetic products to attract customers, such as luxury perfumes, soaps, and many more (unilever, 2021).
ii. Influence of culture and subculture on consumer behavior
Many experts feel that it is important to understand the customer's culture in order to understand the customer's buying behavior (Khan et al., 2022). When developing cosmetic products, Unilever selects two types of custom, such as celebrities, and general publics (unilever, 2021). Unilever has delivered a number of luxury cosmetic products to the market, recognizing the culture of celebrities.
In this case, the social life of the customer is also given importance by Unilever. It is much easier to understand the actual demand of the customer by making decisions based on the social culture, and it is important to take this decision seriously and increase the chances of success for the company (Danner and Thøgersen, 2022).
iii. Patterns of buyer behavior
Figure 5: Patterns of customer buying behaviors
(Source: Tulensalo, 2022)
Complex buying behavior
In this case the buying behavior of the customer changes frequently and this problem is more prevalent in the competitive market (Tulensalo, 2022). Due to the frequent change in customer demand, the company has many problems in making stable decisions.
Variety seeking buying behavior
In many cases, customers make decisions only after looking at multiple products in order to purchase a particular product (Rutitis et al., 2022). For example, many customers compare any Unilever product with other company's products, and in this case, unlike Unilever, the customer prefers to buy the product if the price and quality are appropriate.
Dissonance reducing buying behavior
In this case, the customer tries to understand the demand for the product before buying it. and in this case, if the customer suddenly feels that there is no need to buy this product for the time being, then the customer's buying behavior changes.
Habitual buying behavior
In many cases, Shustamer emphasizes the importance of buying a product by targeting a specific brand. This is especially true of cosmetic products because all people have different skin types, and in this case, using the wrong product can cause customers problems.
iv. Understanding buying behavior in B2B and B2C context
Understanding Buying Behavior in the Context of Business-to-Business and Business-to-Customer needs to communicate with the customer, and at the same time, feedback from various retail companies needs to be given more importance (Woods et al., 2020). There is a need to collect data from all these sources and take appropriate steps for product development.
v. Use of digital audience to understand customer behavior
Digital technology allows Unilever's management team to talk directly to customers and develop products on demand. Unilever's side has long been concerned about this, and that's why the company doesn't have to worry too much about making decisions in a competitive market. The company is at the forefront of product development with an online platform for customer surveys.
Conclusion
After discussing the above entire study, it can be concluded that before buying a product, customers try to understand the importance of buying that product, and in this case, if the customer really thinks that they need to buy that product, then the customer decides to buy that product. It is also known that all the companies in the market have used technology to stay ahead in the competitive market, and to stay ahead of these companies, Unilever has to spend a lot more on technology implementation. Digital technology allows Unilever's management team to talk directly to customers and develop products on demand.
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