How important is it for businesses to understand “Consumer behaviour”?

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Why people want what they want and why do they buy what they buy? Consumer behaviour allows such insights into consumers’ psychology. Businesses need to understand what motivates people to behave a certain way before designing their marketing plans and strategies. Your product could be unique and breakthrough in solving a problem and your consumer might want the product but do they actually purchase the product because it is the sale that affects the bottom line of your business.

Consumer behaviour goes beyond the cost and profit analysis. The focus is on individual consumer to understand the following:

What are the values, beliefs and attitudes of our target market? How do they perceive our product and identify themselves with the product? Is it a means for them to seek social validation, a status symbol, something that makes them feel good about themselves and flatter their ego, something that makes their family and children happier or just that all their friends have it and they think it is cool to have it too. What is the cultural background of our consumers? For instance self-enhancement is prevalent in individualistic Western society as compared to Japanese culture that values Collectivism.

Successful companies like Nestle understand the importance of Consumer Behaviour. Say they want to launch their coffee in Japan. They would first spend resources on understanding the Japanese values, cultures and motivations to carve a marketing and advertising communication plan: Tea time is almost a ceremony in Japan and how music, traditional clothing form an integral part of people's life.

Great features and benefits are not enough to make that sale. If you share that relationship with the consumers they would want to make your product an irresistible part of their life.This allows companies to become brands that can earn customer loyalty and a premium. Building this relationship is just like personal relationships where a couple puts in their best effort to understand each other. Therefore it is recommended that businesses allocate resources in conducting focus groups, in depth interviewing, observing consumers in different settings etc, to understand the underlying motivations of consumers.

There is Nothing like an INSTANT CEO - The Art & Science of Leadership as told by a C-Level Executive

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There is nothing like an Instant CEO and there is no better way of learning the Leadership Mantras but from a highly successful leader sharing his real life experiences.

Recently Sauder School of Business at UBC had the honour of welcoming Mr. Martin Glynn who was the Chief Executive Officer of HSBC Bank USA, the Chairman of HSBC Bank Canada and a Board of Director at various organizations. He shared an experience of how he dared to take a career risk which others almost saw as a demotion but which happened to be the biggest milestone in his career.

RECIPE OF TRUE LEADERSHIP as told by Mr. Glynn to the MBA students is:

1. See the end game - Have a clear vision and paint a simple picture for the employees
2. All about Motivation
3. Emotion and Passion - believe in what you do
4. Focus
5. Recognition of others and paying attention to people
6. Get Hands-on experience so you can relate to the employees
7. Study successful leaders and emulate them
8. Create a culture in the organization
9. Offer Non-financial rewards and recognition to the employees
10. Challenge people - Mr. Glynn shared a story of how his style is to often take the opposite view and be a skeptic
11. Stay on top of the no.s
12. Keep it simple and logical for the common man - not too technical
13. Continuously measure people, set targets and finally..Pick your employers wisely

And there is more..............

1. Activate your leadership by constantly acquiring tools and skill sets
2. Do not stay in a silo, explore different roles to learn and become well rounded
3. Read newspapers, be aware of the world issues and build your knowledge
4. Gain the experience - there is nothing such as an instant CEO
5. Build your credibility
6. Meritocracy - Be known and recognized for your merits and not as the niece of the President or so
7. Beat your own targets
8. Work hard and gain respect
9. Relationship Building - network, participate as a community member, show loyalty
10. Develop a personality of your own
11. Character and Integrity
12. Communication skills

Great insights and years and years of experience in these few bullet points. It's like the whole Universe of Leadership squeezed into a formula that should be practiced and inculcated day in day out by ambitious, future leaders like us.

Your comments are most welcome.

Branding - Part I - Analyzing it from a customers perspective

Retweet this button on every post blogger Companies spend millions of dollars to develop their BRAND. They try to do so by creating strong associations about the product in the minds of the customers, building that emotional connection and exceeding customer expectations unlike the competitors. However what many companies forget is that all their efforts pertaining to brand building can go in vain if they fail at service recovery at any customer contact point.

When customers give access to brands to enter their lives, they are honoring the brands by giving them a place in their space. Thus customers in return of their loyalty also expect a level of respect and consistency from the brand. And companies trying to brand themselves need to understand this human psychology of being acknowledged.

For e.g. my friend's bank was after her to get a credit card or invest her savings through them when she was making a handsome income. However when my same friend went back to school for her graduate studies (hardly for a year) and had little cash in her account, she was treated indifferently and the level of service provided to her by the bank took a nosedive. At one instance when there was a certain complication with her credit card account, she felt that the representative at the bank almost politely insulted her even though my friend was making the payment in full and had missed it just by a few days. This one incident has affected my friend so much that she has decided that once her graduate studies are over, she will never bank with her current institution. Her bank spent 5 years building that Brand and level of trust and one unfriendly interaction with the bank shattered the experience.

So Brands or companies aspiring to be brands should be careful that service recovery in an effective manner is crucial to build that bond with the customers, else it is very easy to lose not just one loyal customer and make the relationships sour but negative word of mouth can be exceedingly harmful for the brand.

Entrepreneurship - Climbing the golden steps!!

Retweet this button on every post blogger An Entrepreneur has the fire, the passion, the desire!! For an entrepreneur "there are no ifs and buts but its all about guts", yet to become a successful entrepreneur and to make the business plan successful, it is very helpful to understand the golden steps. My professor Thomas Hellman at the Sauder School of Business in the University of British Columbia has been the motivation behind these golden steps:

1. Find a problem, a PhD can find the answer for you - Best way to start is to find a problem that needs a solution. Identify gaps in the market. You might not know the solutions yet and you can get a smart PhD to figure that out but identify a problem first. The existing problem is an indicator of an existing demand that needs to be fulfilled. Spot the areas where there is high willingness to pay. They say that MBAs find problems and PhDs have solutions.
2. Finding the people - Just because Jack is my best friend, I want to make him my business partner. NO!! Business and friendship can not be mixed. Chilling out, getting along and drinking beers together are good but to succeed in business partnerships, partners need to have a common goal and a clear vision. Focus should be on finding people with different skill sets and strengths who will complement you and yet have a common goal as yours.
3. Brainstorming & Market Research - Strategy and research are the most important stages of a business plan. Action is secondary as implementing the wrong strategies will only make it worse. Get out there and ask people about their opinions on your business idea. You want as much primary market research as possible to get new ideas. Now it is time to develop your plan as you have enough data.
4. Seeking a Venture Capitalist?? - Why would a VC commit their dollars to you? Well, VCs want to see that the entrepreneur has committed his/her career to the business idea and is passionate about it. Indeed VCs love meat in the business plan but they are also investing in the entrepreneur. They should be convinced of your overall business skills and your passion and commitment. If you feel part-time about your plan then how do you expect the VCs to feel?? I think you know the answer :)
5. Start Selling - An Entrepreneur waiting to make the big sales the very first day is doing nothing but day-dreaming. Start selling and get better at it! I recently had an opportunity to talk to Roger Hardy, the founder and CEO of Coastal Contacts, a giant online retailer of contact lenses and other vision care products. His story was such an inspiration. First day his business went online, he started with just over 20 orders and now in about 9 years time his company has a market capitalization of $71 million.

To make it short and sweet - Envision, Find the right partners, Brainstorm and research, Find the right source of financing and Just Start!!!! Don't wait too long...

Please drop a line in the comments field telling me what you think about it..