Preliminary Consumer Buying Behavior – MBA 640 Innovation Through Marketing
United States Market
Whirlpool Corporation [WHL] “the leading producer of appliances worldwide” (UMGC, 2020) – is an American multinational manufacturer and marketer. The company is headquartered in Benton Charter Township, Michigan and “markets and distributes its p It sells its products to retailers, distributors, dealers, builders, and other manufacturers” (finance.yahoo, 2020).roducts primarily under the Whirlpool, Maytag, KitchenAid, JennAir, Amana,….etc.
Question One
What needs are being met by the product purchase?
Automatic washing machines first featured in the United States market in the late 1930s. These types of machines featured a spin cycle, which was advancement from the predecessors, the electric agitator-type washing machine and the pioneering manual washing machine which was a rotary-type. The need for the washing machine arose from the tiresome work that came along with doing cleaning, which was not only a highly draining and labor-intensive chore, but also time consuming (U.S. Census Bureau, 2016). With the increasingly busy lifestyles of the American population today, automatic washing machines have become a necessity in every household, which caters for the laundry cleaning needs.
What are the benefits to the consumers?
Automatic washing machines come with a variety of benefits to the U.S. consumer. Due to the busy lifestyles of the average working household in the country, buyers look at appliances that relieve most of the workload needed to complete a task or household chores (“Washing machines – United States,” n.d.). The automatic washing machine relieves this workload by encompassing technology such as soap and steam releasing sensors and connectivity to tablets and smartphones. This reduces the time that consumers have to spend on doing their laundry, by say, monitoring the detergent amount for each load, water, and so forth. In addition, the costs of hiring domestic workers in the U.S. are relatively high and thus the automatic washing machines remove the need of having one. In summary, the benefits of the automatic washing machine to the U.S. buyer include time saving, cost-saving, and efficiency in doing laundry.
Question Two
Who is involved in the purchase process? Who are the influencers? Who are the buyers? Who are the end users?
During the purchase process, several actors are involved. In the U.S., the manufacturers who have a stake in the markets share such as Whirlpool with the largest market share, Electrolux, and Haier in that order are the first actors who are involved in the purchase process since they are the ones supplying the products (Kunst, 2019). The households or consumers are then involved in the purchase process when they are choosing the brand of their choice. These households are now the buyers of the automatic washing machines and also happen to be the end users. The U.S. government is the major influencer when it comes to purchasing decisions of the automatic washing machines as it encourages manufacturers and consumers alike to transition to more energy efficient appliances that have the ability of utilizing smart grids (Grand View Research, 2016). The essence is to curb the high energy consumption, reduce carbon footprint, and minimize energy dependence. In addition, the 20% import tariffs on automatic washing machines imposed by the Trump administration increased the prices of appliances from manufacturers such as Electrolux and Haier, making the demand for local appliances such as Whirlpool increase (Adroit Market Research, 2018).
Question Three
Where are the products sold, and what are the distribution channels?
The products sold are automatic washing machines. In the U.S., most of the distribution occurs offline as major brands such as Whirlpool have their own vending shops or showrooms which they use to reach their target market. These manufacturers (Whirlpool, Electrolux, and Haier) use large retail companies such as Walmart to showcase and sell their products in dedicated spaces in supermarkets, hypermarkets and other types of retail stores. In addition, e-commerce platforms such as Amazon also take a sizeable share when it comes to the distribution of these appliances as numerous vendors including multinational retailers also advertise these products on these platforms.
Question Four
How often are the products purchased? Is there seasonality to sales?
Washing machines are a pricier home appliance, therefore Americans tend to wait for large shopping holidays to make these purchases. Shops like Home Depot, Lowes and other smaller local shops typically hold sales on the weekends or day of major U.S holidays. Memorial Day, Fourth of July, Black Friday and Veterans Day (Lee, 2019) are events that most Americans are off work and looking for bargains/sales.
In the U.S., increased migrations experienced in 2017 to 2018 led to a surge in housing markets as well as the purchasing power of the buyers (“Washing machines – United States,” n.d.). This means that an increase in housing units continues to create a demand for automatic washing machines in the country. Factors such as an increase in technological advancements, increasingly busy lifestyles, and an increase in household size also creates a positive demand for these appliances in the future. The U.S. automatic washing machine market is dominated by front load type of washing machines since they use less water, energy, and detergents and thus efficient that top loading types. As such, their demand continues to grow. Seasonality of sales is mostly affected by economic situations. For example, the financial depression experienced in the years 2008-09 affected the purchasing power of the consumers which led to reduced growth of sales in the automatic washing machines market between 2009 to 2012 (Liu, 2018).
United Kingdom (UK)
Question One
What needs are being met by the product purchase?
Just like in the U.S., washing machines entered the market in the late 1930s. Due to technological advancements thanks to rapid urbanization and globalization, the residents of the UK have a busy lifestyle. Thus, laundry being a major household chore that is labor intensive when done manually, there is a growing need for these automatic washing machines which ease the burden of doing laundry amid the decreasing personal time due to tight schedules. Holst (2020) notes that the ownership of washing machines in the UK is nearing 100%, with just 2% of the households lacking the appliance. However, the 2% is mainly lower income earners that include dependants of state pension, elderly, and single adult families.
What are the benefits to the consumers?
The benefits to consumers are mostly in terms of energy and water saving. Notably, consumers in Western European countries such as the UK are more environmentally conscious and so make buying decisions based on these factors. Thus, it is critical for consumers in the UK to make purchasing decisions that minimize energy and water costs (Holst, 2020).
Question Two
Who is involved in the purchase process? Who are the influencers? Who are the buyers? Who are the end users?
The purchase process of automatic washing machines in the UK is still very much inclined to brick and mortar stores such as supermarkets and hypermarkets. Thus, larger manufacturers such as Whirlpool have their own stores where consumers can find their appliances and make purchases from there. In addition, retail stores are most preferred, while shopping for the automatic washing machines in the country. Online platforms such as Amazon are starting to develop a foothold in the country as a preferred platform where consumers are provided with a variety of options to choose from including market and consumer reviews that help make the best purchasing decisions. However, most consumers in the country still prefer to make their purchases offline. Thus, the actors involved in the purchase process include the suppliers, retailers, and the consumers, who are the ultimate end-users. In the UK, consumers are the influencers as they are inclined to certain aspects such as low energy consumption, water saving, environmental sustainability, and preference for green-labeled products (Jo & Shin, 2017). Thus, manufacturers have to design and manufacture products that meet these consumer preferences.
Question Three
Where are the products sold, and what are the distribution channels?
The products sold in the UK market are the automatic washing machines. Unlike the U.S., UK consumers show a preference to offline distribution channels as opposed to online channels. Thus, discount retail stores, supermarkets, and hypermarkets take the largest share of the distribution channels as regards to the automatic washing machines. Geetha & Tyagi (2016) acknowledge that the online sector in the country is struggling to catch up with offline distribution channels, which is a sharp contrast to the situation in the United States.
Question Four
How often are the products purchased? Is there seasonality to sales?
Similarly, to Americans, consumers in the UK also prefer to use the internet to research products and compare prices/specifications. Price is important and UK consumers will wait for large sales or holidays when prices are lower. Washing machines are not an impulse purchase, UK consumers take price into consideration as well as brand recognition for the lifespan of their appliance. Apart from physical stores like Appliance City, Argos and Appliances Direct some UK consumers are purchasing appliances online through Amazon.
The market for washing machines is saturated with an ownership of over 98%. However, that does not mean that the market for automatic washing machines is non-existent, as consumers are more inclined to environmentally friendly appliances, which is what the technology in automatic washing machine provide. Statista (2018) article notes that the market for these appliances is projected to grow by 2.7% annually between the periods 2020 to 2025. However, seasonality of sales is affected by factors such as the global epidemic of Covid-19, which has caused a decline in sales and is projected to remain like that until the end of the year (Statista, 2018).
Germany
Question One
What needs are being met by the product purchase?
Germany is one of the countries that are known for preference for high-quality standards in manufacturing (Kruschwitz et al., 2014). Thus, the consumer’s preferences match the national culture, creating a need for high-tech products. The automatic washing machines encompass an array of technologies that make it more efficient to suit the preferences of consumers seeking products that feature sophisticated technologies. Another need being met by the appliances for the consumers in this country is the need to have more environmentally friendly products (Kruschwitz et al., 2014). The proposed automatic washing machines will effectively meet these needs as they will be low on energy, water, and detergents.
What are the benefits to the consumers?
The benefits that consumers derive from these products are that they are able to offer convenience and high-level sophistication in terms of the design and technological capabilities. Notably, the ownership of washing machines in most Western European countries, of which Germany falls in this category, is close to 100% (Kruschwitz et al., 2014). However, the preference to high-technological appliances means that the projected growth of the proposed new automatic washing machines is expected to grow.
Question Two
Who is involved in the purchase process? Who are the influencers? Who are the buyers? Who are the end users?
The purchase process in Western European countries such as Germany is much more inclined offline rather than online. Thus, manufacturers act as suppliers and have their own stores or showrooms where they can showcase and sell their wares. In addition, many consumers in Germany prefer to make their purchases for the washing machines in various retailer supermarkets and hypermarkets, which act as vendors for these products. The consumers are the buyers, the end-users, and the main influencers. The preference to high sophistication in technology and design, environmental awareness, and efficiency are the main drivers of what the manufacturers present to these consumers.
Question Three
Where are the products sold, and what are the distribution channels?
The automatic washing machines are largely sold in supermarkets and hypermarkets through offline distribution channels as they are more preferable to consumers in Western European countries such as Germany.
Question Four
How often are the products purchased? Is there seasonality to sales?
Just like American and UK consumers, Germans are also not likely to purchase a washer as an impulse, very few Germans will buy during holidays or special occasions unless the occasions coincide with their need to purchase a new washer.
The purchase of automatic washing machines in Germany has been on an upward trend since 2014, and the trend is projected to continue upwards by 3.2% annually up to 2025 (Statista, n.d.). However, the global pandemic, such as the recent Covid-19 has seen sales drop as he purchasing power of consumers dropped due to economic turmoil cause as a result. The proposed next-generation automatic washing machines that incorporate the efficient use of water and energy along with improvements in design will likely propel the sales of these products over the next couple of years.
Influencers/Buyers and End Users
Influencers are experts and are highly knowledgeable with social media platforms and the know how to get the attention of consumers. Usually people that fall into these categories have huge number of followers on social medial platforms which can aid in boosting sales. The company therefore takes advantage of their fame to market the particular products. The list of influencers in a high-end, luxury washing machines purchase might extend from a spouse or partner, who looks for practicality, to other household members, such as children, who are usually generally excited about new widget purchases. Neighbors and friends could also serve as influencers, offering impartial advice from their own research or past experiences. Lastly, sales representatives play a significant part as a crucial influencer. Their job is to alleviate concerns, generate appeal and convince prospective buyers why a high-end purchase is the right move. Ultimately, whether in progressive regions such as the United States or Unite Kingdom, or whether in more traditional areas like Germany, the pool of influencers would remain wide and varied for most high-end appliance purchases. The influencers can also purchase the products for their own use. Influencers can be celebrities or people in entertainment to everyday working families. These are different types of consumers who have influence in their own way therefore, the company can market the product by using the influencers’ platform to market. Technology plays a big role in influencing consumers on what and where to purchase products. For example, Facebook, Goolge and Angie’s List has consumer reviews on different products. Consumers can interact with each and compare products which can sway the decision making process for potential customers.
Other than the rare, special occasion gifting opportunity, (wedding, home purchases) the end user demographics for the high-end washer machine typically remains synonymous with the buyer population. Notwithstanding regional, social norms, the typical buyer/end user population incorporates a segment of potential purchasers who are usually upper middle to upper class homeowners. They are more environmental and energy conscience and hold a strong appreciation for amenities and technology. Buyers are the people who constitute the market, those who purchase the products for their own use or purchasing on behalf of the other people. Product users are in a category of people who actually use the products, they can buy the products themselves or the products may be given to them by other people who did the actual purchase the products. Supply Chain Management is the process of the flow of goods and services from the beginning components to the delivering the final product to the customer (IBM, 2020). In today’s competitive global economy it is beneficial to an organizations operations to have collaborative efforts in distributing its products to consumers. The appliances industry has various options for distribution which enhances the consumers buying experience by increasing efficiency of shipping the product. There are retail stores, direct from manufacturer, third party distribution, all options that benefit the consumer by increasing their chances of getting the product sooner (Habib, 2016). Essentially the distribution is either direct or indirect distribution channels.
Environmental Concerns
As we know Ozone layer forms a big problem with the depletion of the layer, still this problem is only one of many others which are affecting the environment which people live in. As a result, consumers are becoming more interested in purchasing environmentally friendly products, and marketers are delivering more “green” products (Chan, 1996).
A November 2009 McKinsey survey found that 84 percent of the respondents preferred to buy environmentally friendly everyday consumer products, and that preference is translating directly into business success (Salsberg, 2010).
References
Geetha, D., & Tyagi, R. (2016). Consumer Behavior and Fascinating Challenges on Household Laundry and Dishwashing. Tenside Surfactants Detergents, 53(6), 568-575. doi:10.3139/113.110449
Holst, A. (2020, May 8). Washing machine ownership in the UK 1970-2018. Statista. https://www.statista.com/statistics/289017/washing-machine-ownership-in-the-uk/
Jo, M., & Shin, J. (2017). Market strategy for promoting green consumption: Consumer preference and policy implications for laundry detergent. International Journal of Consumer Studies, 41(3), 283-290. doi:10.1111/ijcs.12339
Kruschwitz, A., Karle, A., Schmitz, A., & Stamminger, R. (2014). Consumer laundry practices in Germany. International Journal of Consumer Studies, 38(3), 265-277. https://doi.org/10.1111/ijcs.12091
Kunst, A. (2019, September 3). Market share of washing machine brands among consumers in the United States, as of May 2017. Statista. https://www.statista.com/statistics/712023/united-states-statista-survey-washing-machine-brands-us-consumers-have-at-home/
Statista. (2018). Washing machines – United Kingdom. https://www.statista.com/outlook/16010400/156/washing-machines/united-kingdom
Statista. (n.d.). Washing machines – Germany. https://www.statista.com/outlook/16010400/137/washing-machines/germany
U.S. Census Bureau. (2016, October 26). U.S. Census Bureau daily feature for October 26: Washing machines. https://www.census.gov/newsroom/tip-sheets/2015/tp15-21.html
Washing machines – United States. (n.d.). Statista. https://www.statista.com/outlook/16010400/109/washing-machines/united-states#market-volume
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