After discussing the market segmentation of these two companies, the Ochs of this paper is to tell the different inner characteristics of the companion’s consumers relating to their needs, motivation, personality, perception, learning and attitude, etc. Key words: internal characteristic, LAG, Samsung, market segmentation. LAG and Samsung are both Korean companies. LAG was founded in 1958, combined other two Korean companies named Lucky and Goldwater. Nowadays, the name of LAG does not mean the combination only, but also means Life good..
LAG Electronics has become one of the leaders of technology in the world, and it focuses on consumer electronics, mobile communications and home appliances (2010). Samsung was founded by Lee Bung-Chula in 1938 as a trading company. Following Lee’s death in 1987, Samsung was separated into four business groups – Samsung Group, Signage Group, CO Group and Hanson Group. Since the asses Samsung has increasingly globalizes its activities, and electronics, particularly mobile phones and semiconductors, has become its most important source of income (2012).
And nowadays, Samsung is one of the biggest companies in the home appliances market. Market segmentation is an important element which a company need to use for targeting its products at the right customers. It is about identifying the needs and wants of the company’s customers, and then providing the goods and services which meet the customer needs. There are several methods for segmenting customer markets, including geographic segmentation, cryptographic segmentation, behavioral segmentation, segmentation by occasions, and segmentation by benefits (2009).
Segmentation, targeting, and positioning together comprise a three stage process. Normally, companies first determine which kinds of customers exist, then select which ones they are best off trying to serve and, finally implement the segmentation In the home appliance market, LAG is a well known brand. It provides kitchen appliances like refrigerators, cookers, and ovens, and washer dryers include washing machines, dryers and dishwashers, also vacuum cleaners. LAG Home Appliance Company announced that it provides leading-edge technology with stylish designs.
LAG is committed to preserving its natural environment and creating consumer-optimized products. LAG has long been a top brand in washing machines, delivering innovation, durability and exceptional performance to customers. Through their enhanced connectivity, Lag’s smart appliances gives the customers with the ultimate benefits of empowerment and convenience, delivering a fully integrated smart solution today (2013). LAG pays attention to upper and upper middle classes and provides products for those consumers.
High quality and good service of LAG products are so progressive that products are output to developed countries (Pakistan & Gulf Economist, 2005). The pricing strategy of LAG is “cost plus fixed mark up”. Following the pricing policy, Lag’s formula is “import cost + reasonable gross profit”. Samsung produces refrigerators, ranges, washers and dryers, microwaves, shearers for home appliances. Samsung is more focusing on design of their products than LAG. And in the recent few years, Samsung seems like attract more and more young people because of the fashion design of the products.
The price level of Samsung is a little bit higher than LAG. For example, there are two refrigerator produced by LAG and Samsung, which are RAT-PBS 2 door fridge (Samsung) and GAR-GAGGLE 2 door fridge (LAG). These two are similar in their functions, and the price of Samsung is $1089, while for LAG is $999. The inner characteristics including needs and motivation, personality, perception, earning, and attitudes, etc, all have obvious impact on customer behaviors. They decide whether the consumer is going to select brand A or brand B.
The psychology of each individual considers the product or service on offer in relation to their own culture, attitude, previous learning, and personal perception. The consumer then decides whether or not to purchase, where to purchase, the – Needs and Motivation In the mainstream of Darwinian evolutionary theory, certain behavioral tendencies are built into organisms for survival of the individual and thus the species. Murray(1937) made a classification of human needs.
Murray distinguished a directional aspect and an arousal component that actually kicks the behavior off and that can be motivated in a number of ways. Needs, in Mural’s concepts, are hypothetical constructs directing behavior toward certain goals, or end states. And human motivation was introduced by Moscow of the hierarchy of needs: the hierarchy is triangle. This is because as you move up it, fewer and fewer people satisfy higher level needs. To understand consumer buyer behavior is to understand how the person interacts tit the marketing mix.
As described by Cohen (1991), the marketing mix inputs (or the four Up’s of price, place, promotion, and product) are adapted and focused upon the consumer. For example, when people are going to buy the refrigerator, the customers choose LAG will mostly consider the practicality of the product, like its energy saving and environmental-friendly. While people who choose Samsung may motivated by their functional needs and their pursuit on the appearance. – Personality Personality is the inner psychological characteristics that both determine and reflect owe a person responds to his or her environment.
Personality traits may be reflected on several factors, such as a person’s style of dress, manner of speaking, also his/her buying behavior as well. Market researchers have been always interested in understanding and attempting to answer how personality affects a people’s buying behavior. For companies, this will help them to understand customers and then target those customers who would respond favorably to the product and serviced offered. People who are simple and honest, introverted, conservation, thrifty, shy, prefers mime alone may choose Lag’s products.
While people who are lively, passionate, active, fashion pursuer, easily bored, ambitious may choose product and services of Samsung. – Perception Our perception is an approximation of reality. Our brain attempts to make sense out of the stimuli to which we are exposed. This works well, for example, when we “see” a friend three hundred feet away at his or her correct height; however, our perception Perception in marketing is described as a process by which a consumer identifies, organizes, and interprets to create meaning.
In simple words, perception is how one sews under the influence of his or her past experience, others’ opinions and comments, and advertisements of the brand. For example, in the recent years, Samsung gives us a feeling of passion, innovation, creation, designed and fashion. That was the perception it gives to its customers. While, LAG is always showing value in use, durability, and its good price. After comparing those factors into consideration, customers can then make their buying decisions. Learning Learning is the process by which individuals acquire the purchase and consumption knowledge and experience that they apply to future related behavior. For that reason, companies and marketer need to teach customers where to but, how to use, how to maintain, and how to dispose of products. Motivation, cues, response, and reinforcement are the basic characteristics of learning. Brand loyalty can be considered as the conscious or unconscious decision of a consumer that is reflected in his or her expressed intent or behavior to purchase and repurchase a product on a continuous basis.
The amount of additional income expected from a branded product over and above what might be expected from an identical, but unbranded product is called brand equity. Product positioning can be considered as a technique that marketers use to create an identity and image for their products. When marketers leverage on the brand equity by using the existing brand name for new products, it is called brand leverage. Therefore, customers who choose a Samsung refrigerator may more likely having another products or services by Samsung such as a Samsung hand phone or laptop.
When he or she has already built the brand loyalty of the brand, he or she may choose another product and services from the company again. Same as the customers who choose LAG. – Attitude Consumer attitudes are a composite of a consumer’s (1) beliefs about, (2) feelings about, (3) and behavioral intentions toward some object–within the context of marketing, usually a brand or retail store. These components are viewed together since they are highly interdependent and together represent forces that influence how the consumer will react to the object. The first component is beliefs.
A consumer may hold both positive beliefs toward an of its fashion design but also may do not choose it because of the higher price compared to LAG. In addition, some beliefs may be neutral, and some may be differ in lance depending on the person or the situation. Note also that the beliefs that consumers hold need not be accurate, and some beliefs may, upon closer examination, be contradictory. Consumers also hold certain feelings toward brands or other objects. Sometimes these feelings are based on the beliefs, but there may also be feelings which are relatively independent of beliefs.
For example, customers of moderate consumption levels mostly would like to choose the low price product like LAG rather than Samsung, however sometimes they will wonder whether the lower prices means the lower quality. The behavioral intention is what the consumer plans to do with respect to the object (e. G. , buy or not buy the brand). As with affect, this is sometimes a logical consequence of beliefs, but may sometimes reflect other circumstances, although a consumer does not really like LAG, he or she would buy a LAG oven which is lower priced than Samsung because of the budget.
Consumers often do not behave consistently with their attitudes for several reasons: ; Ability. He or she may be unable to do so. Although Junior high school student likes pick-up trucks and would like to buy one, she may lack a driver’s license. Competing demands for resources. Although the above student would like to buy a pickup truck on her sixteenth birthday, she would rather have a computer, and has money for only one of the two. ; Social influence.
A student thinks that smoking is really cool, but since his friends think it’s disgusting, he does not smoke. Measurement problems. Measuring attitudes is difficult. In many situations, consumers do not consciously set out to enumerate how positively or negatively they feel about mopeds, and when a market researcher asks them about their beliefs about mopeds, how important these beliefs are, and their evaluation of the reference of mopeds with respect to these beliefs, consumers often do not give very reliable answers.
Thus, the consumers may act consistently with their true attitudes, which were never uncovered because an erroneous measurement was made. Attitude research has shown that consumers often tend to react more favorably to advertisements which either (1) admit something negative about the sponsoring brand (e. G. , the Volvo is a clumsy car, but very safe) or (2) admits something positive about a competing brand (e. G. , a competing supermarket has slightly lower prices, but offers less service and selection).
