Swarovski’s Consumer Decision-Making Process & 4Ps strategies

By | April 20, 2014

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  1.      Introduction……………………………………………………………………………………………… 2
  2. Swarovski’s Marketing Environment……………………………………………………………. 3
  3. Consumer Decision-Making Process…………………………………………………………….. 4

3.1      Need recognition……………………………………………………………………………… 5

3.2      Information search……………………………………………………………………………. 6

3.3      Evaluation of alternatives and purchase………………………………………………. 7

  1. Swarovski’s 4Ps strategies………………………………………………………………………….. 7

4.1      Product…………………………………………………………………………………………… 8

4.2      Price……………………………………………………………………………………………….. 9

4.3      Place…………………………………………………………………………………………….. 10

4.4      Promotion……………………………………………………………………………………… 10

  1. Conclusion………………………………………………………………………………………………. 11

Reference list………………………………………………………………………………………………… 13

1.        Introduction

 

In any large-scale socialized production and the commodity economy, on the one hand, producers who cannot be fully aware of what products, where needed, when needed, where the price consumers are willing and able to accept the other; the other hand, the majority of consumer What cannot be fully aware of who who supply goods, where supply, when supply and price level and so on. Because of the presence of such an objective between producers and consumers, “Information separation” and “production” to “eliminate” contradictions, companies must communicate activities, using advertising, publicity reports, personal selling and other promotional means of production, products, etc. information to consumers and users to enhance their understanding, trust and buy the enterprise product, to expand sales. As the business competition and product increases, the increase in consumer income and living standards, in a buyer’s market for goods on the more demanding consumers, a choice is greater and therefore the communication between businesses and consumers More importantly, enterprises need to strengthen the promotion, use of promotions to consumers and users to enhance awareness of their products to make consumers willing to spend money to buy their products.

 

Swarovski was founded in 1895 by Daniel Swarovski I. It has since developed into an international entity with numerous subsidiaries and is currently in the process of reorganizing its North American activities, as well as preparing to increase its presence on the Internet. In addition, Swarovski is also adding their own retail stores throughout the United States and Canada.

The Swarovski logo can be identified by the famous swan but the original was an edelweiss flower. The appearance is a crystal that creates a rainbow spectrum by allowing light to refract by coating with metallic chemicals such as aurora and crystal transmission.

The Swarovski Group even have their own television channel called Swarovski Sparkles TV Swarovski Crystal Palace is dedicated to specialized designs and furniture that can be custom made, or one off pieces and have attracted a lot of media attention this year.  It’s not difficult to understand why these crystals are used by the rich and famous in the most spectacular shows and costumes as well as the most unique designs and collector’s items. World-renowned Swarovski crystal “products of precision” in many different forms, sizes and shapes, attention to detail, in an effort to best cut, clarity, and brilliance of crystal products. Swarovski attribute their success of the “relentless pursuit of perfection” in their production process.

 

2.        Swarovski’s Marketing Environment

 

Multi-faceted is a word that constantly related to Swarovski, not only to the properties of their cut crystal but also to the diversity of their business. Thanks to their facets, Swarovski’s target consumer is “virtually every female” from 17 to 71 in terms either of buying or gift receiving, by bringing considered and diverse offering to such a broad range of people. Even though each cohort group (tweens, generations X,Yand Baby Boomers) has its own needs and values, Swarovski meets most of them.

Demographic factor is very important in marketing. The study of people’s vital statistics, such as their age, race and ethnicity, and location helps to define behaviour in the marketplace. Swarovski Jewellery bases most of its market on women of age 25 and above by creating bridal, business, classical and sophisticated collections. It also includes men accessories such as bracelets and watches, and of course children over 6 years old.

One of the biggest Swarovski’s market target today is fashion industry. A fifth-generation Swarovski — she is the daughter of the company’s current CEO, Helmut Swarovski -Nadja Swarovski saw the potential of affixing the company name to something much more valuable than miniature crystal dolls. The infrastructure was already in place, all it needed was somebody to point it out. Nadja Swarovski looked to the company’s underside, the history most consumers did not know about. She created a new public-relations strategy – with the help of professional muse Isabella Blow, the doyenne of the British-fashion set, Swarovski called upon some of the fashion names the company had already been doing business with for years, as well as some new names, and made them offers they could not refuse. Designers would be supplied with free crystal to be integrated into their work as they saw fit. All the designers had to do was say that these crystals were Swarovski crystals, and say it often. Established offices in some of the world’s fashion centres — London, Paris, Wattens, New York, Milan, New Delhi, Sao Paolo and Dubai. Today, designers from several creative realms (interior, jewellery, lighting, home and fashion) are brought in to meet with consultants and are provided with access to a range of Swarovski materials. This is how the costume designer for Moulin Rouge came to decorate Nicole Kidman, head to toe, in Swarovski stones. Understanding market and fashion, Nadja Swarovski united their brand name with the best designers of the world.

New York—Swarovski plans to open more of its own retail stores as it glams up its image this year with a new, high-drama ad campaign.

But the crystal manufacturing company, known as much for its beloved crystal Christmas figurines as for its jewellery, will also cut the number of retailers selling its jewellery and accessories.

“Our plan is to have less points-of-sale worldwide, but higher quality points-of-sale,” Robert Buchbauer, head of Swarovski’s consumer good business, said at a May 3 press conference in New York. “This is the only way to really control our image. We’re moving away from retailers who are not willing to trade up with us.”

 

3.        Consumer Decision-Making Process

 

As the preference of product and services of consumers is changing all the time which increase the possibility of the failure of marketing plan enacted by marketer especially when there is a time lag between the design of the marketing plan and the implementation of it. So it is important for managers to understand and observe any changes of the consumer behaviors before initiating a marketing mix. Consumer behavior could be defined as the study of why people buy the product they do, and how they make their decisions (Horner & Swarbrooke 1996). Another definition of consumer behaviors by Blackwell and Miniard (2001) describes the concept as the activities involved in obtaining, consuming, and disposing of products and services including the decision processes that proceeds and follows these actions. And the consumer behavior process refers to the process by which a consumer chooses to purchase or use a product or service (Swarbrooke & Horner 2007). And a whole consumer decision-making process include five major sessions as illustrated in the figure below: Need recognition, Information search, Evaluation of alternatives, Purchase and Post purchase behavior. Below this study will be focusing on the first three stages of the consumer decision-making process which attract marketers’ most attention.

Figure 1.0  Consumer Decision-Making Process

Source: Lamb, Hair & McDaniel 2009

 

3.1    Need recognition

 

Need recognition occurs when consumers realized that there is a discrepancy between current status and the hoped and desired status (Ferrell & Hartline 2008) and the realization of such unmet need is the first stage of the consumer decision-making process. And in the perspective of a marketer, it is important to help the consumers to recognize such unmet needs. One of the most used way to provide the stimulus to consumers for them to get them into the need recognition is through advertising and sales promotion. But the advertising or sale promotion should be based on comprehensive information about the consumer needs which usually could be obtain by market surveys.

 

3.2    Information search

 

After the identification of the need, customers will try to access to information regarding the products and services that could meet the needs. According to a well known academic study the information search before purchasing behavior is common but vary according to different products and service as demonstrated in the figure below.

 

Figure 2.0 Academic study about information search

 

The information search take place in two ways: internal and external way. An internal information search is the process the consumers recall the information stored in the memory (Summers & Morgan 2005, p320). And in term of external information search, there are two ways by which consumers seeks needed information in the outside environment: market controlled and nonmarketing controlled information search. While a non-marketing controlled information search happened without the marketers’ influence in term of promotion for instance, markets would focus on the market controlled information search which is biased toward a particular product and service. The marketing channels through which the market controlled information flows include: mass media advertising, sales promotion, salespeople, product lables and packaging and the Internet.

 

3.3    Evaluation of alternatives and purchase

 

The evaluation of the alternatives occurs when consumers consider the relative merits of different products which is usually in term of different brands to meet the needs indentified (Dahlén, Lange & Smith 2010). The criteria of choosing the desired products will be formed based on the information that the consumers have through the information search step, and these criteria will be guiding the consumers to choose the final preferred products and services. One of the methods to finalized a best needed product is to identify a set of needed attributes that a product may have while others could not meet all the requirements. And in the marketers’ perspective, the complete understanding of the needed attributes of a certain products would be of great importance for the targeted consumers to pick up their products by providing the desired products.

 

4.        Swarovski’s 4Ps strategies

 

No business can be successful without the use of marketing mix strategy. 4Ps of marketing mix including product, price, place and promotion. For the luxury goods industry, the main purpose of using this strategy is to provide good service and affordable products, in order to facilitate the economic base of different consumer groups have more choices. By using this strategy, companies can easily clarify the organization’s mission, to attract customers to more consumers in order to obtain groups.

 

4.1    Product

 

In order to attract more consumer groups, Swarovski designers have chosen outstanding women of different consumer groups according to the design of crystal ornaments. Swarovski Zodiac was introduced to the concept of a range of products, people can choose according to their own favourite. At the same time, more slowly to the designer Swarovski crystal adds a bold design and watches in the clothing design.

 

The human body and the magnetic energy with rich, sometimes problems arise not because of the energy imbalance, as long as the increase or promote the power that the body’s energy back to normal, will be able to grasp the key to health. Crystal itself is a pure high energy theory can be used to change the oscillation frequency of the body. The crystal has a different colour at the same time the different colour also got the different meaning. The different colors of crystal, on the energy match of the human body, it will cause the energy integration, promote its role in removing the discomfort. Crystal display at home, you can front house, evil, changing magnetic field, it is Hong Kong called “Feng Shui Stone”, the Japanese called “energy stone.”

For example:

  • White crystal: pure and transparent, Kennedy really unwavering, fierce drive can be evil, strengthen the body magnetic field, and for self-cultivation, the raising of gas to purify the surrounding negative energy.
  • Yellow crystals: the main side wealth, the combination of the strongest energy windfall, corresponding to the sun gear, helps the stomach, liver and digestive system.
  • Rose Quartz: Also known as Crystal Lotus (love crystal), can be developed and help the pursuit of love, the heart chakra, improve interpersonal relations and many friends, develop contacts, so a good mood.

 

  • Red Rabbit Crystal: Crystal Venus, also known as adjustable female physical, emotional comfort, beauty, and promote blood circulation and endocrine, and strengthen sea round.
  • Huang Fajing: wealth has both, both communication and reconciliation of the characteristics, conditioning the digestive system.
  • black crystal: Eliminate karma, evil, prayer; eliminate symptoms of illness, all the characteristics of stable and practical.

 

4.2    Price

 

Second, the price of the product. Price is the sum of the value of the consumer or used products or services (Kotler. P & G Armstrong. Grams, 2010) the exchange of interests. There are several factors in setting prices. Value of worth the price? That customers can afford? The company should refer to their business target market. For example, the company’s target market of consumer’s monthly income is less than RM1000, consumers may not buy expensive crystal jewelry, any one of the crystal has its own value of the goods, so consumers will buy jewelry in crystal many angles to think about its value and utility scale.

Crystal purity and design styles are determined by its market value. Under the high market value, Swarovski also launched a suit. For example: necklaces, earrings, and bracelets. Suite of products available to consumers can easily mix later in life. Swarovski also offers activities in all major holidays, to allow more through promotions like the crystal with the lowest price consumers can buy their products desirable.

 

4.3    Place

 

The third element in 4Ps is Place. In the text Principle of marketing by Kotler.P & Armstrong.G, Place is where company activities that make the product available to target consumer. Location of the business is a very important when launching a business. Is the location suitable for the business? Is the location convenience to target consumers and logistic transportation?

 

Swarovski selection in the large department store for sales. First, because of the large shopping centres have a strong consumer groups. Second, the choice of shopping malls as more consumers can better ensures product quality. The third point, usually in large shopping mall consumers will notice the unique crystal products. Because the texture of sparkling crystal, plus interior decoration, Swarovski store there will be a service so that consumers feel at home.

 

4.4    Promotion

 

Cut file is passed to a consumer marketing company and products relating to the kinds of information, to persuade or attract consumers to buy their products in order to achieve the purpose of expanding sales.

Such enterprises are engaged in marketing activities is called “promotion.” Business promotions and other marketing activities such as product policy, pricing strategy selected different distribution strategies. Some of these marketing activities are mainly in-house or in between marketers and marketing for. At the promotional time activities, to the consumer advocacy or their products, to persuade and attract customers to buy their products, so the two sides involved in promotional activities, marketers and buyers or potential buyers.

The last element I of 4Ps is Promotion. Promotion is the activities that communicate the merits of the product and persuade target customers to buy it (Kotler. P & Armstrong. G,2010). Promotion is not only the products sales promotion; it was also including advertising and public relation. Product sales promotion always is an effective way to in attract customers. In the annual celebration of Swarovski, the company will be to repay the majority of consumers show some promotional crystal products. At the promotion times, you also can get the present which is depend on your how many you purchase at the shop.

For example: In China, every product sold in a Pink Hope, Swarovski will also donate RMB50 to the “China Social Work Association of breast cancer prevention special fund.” Add up, bit by bit into the river, every purchase of Pink Hope Series customers will automatically participate in the donor’s charitable activities in breast cancer patients, patients with breast cancer gave the poor a source of strength.

 

Whether used in daily wear, or give a gift your loved ones, may express their concern and support of breast cancer movement, is stylish woman’s best choice not to be missed

 

5.        Conclusion

 

Nowadays the technology developing is very fast, and more luxury goods to the general consumer base in the acceptance. Swarovski, It is in pursuit of the perfect crystal products only in accordance with market demand to satisfy the consumer demand for crystal. Man-made Swarovski crystal is the most prominent representative of the Swarovski with market research to meet the needs of women of different ages.

With the rapid development of an emergency, people are more oriented to enjoy. Consumers spend more money spent on the material life, to recover to a comfortable environment and high quality jewelry on. Swarovski focus on high quality products, on their own time in the production of crystal ornaments before the stringent requirements laid a famous high quality products today. So, until today there are still many consumers appreciate the high quality of Swarovski products without the expensive price to buy flower lovers

 

Total words: 3005

 

 

 

 

Reference list

 

Blackwell, R. D., Miniard, P. W. & Engel, J. F. 2001, Consumer Behavior, International Edition, 9th edition, New York: Dryden Press

 

Bearden, Ingram & Laforge. 2007 Marketing Priciples and Perspectives. New York, McGraw-Hill.

 

Dahlén, M., Lange, F. & Smith, T. 2010, Marketing Communications: A Brand Narrative Approach, West Sussex: John Wiley & Sons

 

Ferrell, O. C. & Hartline, M. D., 2008, Marketing Strategy, 4th edition, Mason: Thomson South-Western

 

Horner, S. & Swarbrooke, J. 1996, Marketing Tourism, Hospitality, and Leisure in Europe, London: International Thomson Business Press

 

Kotler.P & Armstrong. G, 2010. Principle of Marketing. New Jersey, Pearson Prentice Hall.

 

Lamb, C. W. , Hair, J. F. & McDaniel, C. 2009, Essentials of Marketing, Mason: South-Western Cengage Learning

 

Swarbrooke, J. & Horner, S., 2007, Consumer behaviour in touris, 2nd edition, Oxford: Elsevier

 

Swarovski.com, Swarovski Crystal, accessed on 14th Dec 2010, [online] available: http://www.swarovski.com

 

Summers, J. & Morgan, M. J. J, 2005, Sports Marketing, Melbourne: Cengage Learning, p320