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BUSI 520 - MMIP Part 3
International Business (Liberty
University)
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MMIP Part Three
MMIP – Consumer Analysis, Market Segmentation, and Market Coverage
John Harrington
School of Business, Liberty University
Author Note
John Harrington
I have no known conflict of interest to disclose.
Correspondence concerning this article should be addressed to
John Harrington
Email: [email protected]
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MMIP – Consumer Analysis, Market Segmentation, and Market Coverage
Q1. Describe and discuss the cultural, social, personal, and psychological factors that
influence the purchase of the product/service.
Consumer’s buying behavior is influenced by cultural, social, personal and psychological
factors. It is important for the marketer to understand how people think and behave before,
during and after the buying process. Everyone has their own unique needs and wants when
considering purchases. The purchasing decision is affected by an individual’s habits and
choices, which are heavily influenced by psychological and social drivers. This information type
of information is vitally important. It can be used to identify, and predict change in consumer
trends, providing organizations with the opportunity to be ahead of them.
Cultural factors include the beliefs, values, traditions and language of a community and has the
deepest influence on consumer behavior. Social factors are defined as the groups that have an
influence on buying decisions. The family constitutes the most influential group. Personal factors
are characterized by the following, age, lifestyle, occupation, and personality to name a few.
The psychological factors include motivation, perception, learning and motivation. The concept
for understanding consumer behavior is based on a stimulus response model. This process seeks
to understand what happens from the starting point of the stimulus and ending with the purchase
decision.
The Buying decision process can be broken down in to a five-stage model which begins
with problem recognition, information search, evaluation of alternatives, purchase decision,
and post purchase behavior.
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The target population of LL Bean is college educated men and women between the ages of 35-55
with an interest in an active and outdoor lifestyle. However, change is inevitable, and this
population has trended toward more sophisticated products and services.
Many of the products are well known for their quality and design and have been in the
product line for several decades. A new apparel collection was launched in 2010 inspired by the
company’s heritage. The collection is modernized with updated styles while still including many
of the classic items LL Bean is known for.
The company spends a significant amount of time in the research, development and
testing of new and innovative products. The company uses extensive customer interviews in
order to ensure that the new and innovative products are designed to meet the specific customer
needs for outdoor clothing and gear.
This verse reminds me of the conflicts Christians face when we put our cultural values
above the teachings of Scripture. “All Scripture is God-breathed and is useful for teaching,
rebuking, correcting and training in righteousness.” – Timothy 3:16 (ESV) While the bible is
not anti-culture it does call each of us to a new way of thinking and living. The question then
becomes will we embrace God’s revealed values or our cultural values. God’s way of thinking
is different from ours and in order to follow Jesus we must change our way of thinking and
acting. Paul says, “For the foolishness of God is wiser than human wisdom, and the weakness of
God is stronger than men.” Corinthians 1:25(ESV)
Q2. Explain the needs that are met for each of the firm’s target markets.
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The target population of LL Bean is college educated men and women between the
ages of 35-55 with an interest in an active and outdoor lifestyle. However, change is inevitable,
and this population has trended toward more sophisticated products and services. LL Bean
responded to this change by transforming itself in order to meet the new customer needs. The
organization maintained their core values and principles while identifying orderly changes in
their strategy, processes, and technology. In order to build a closer relationship with its
customers, they increased their commitment to value by providing a one stop shop for their
customer’s outdoor and active lifestyles. LL Bean also relies on its guarantee and customer
service but found a breakdown in this process. While employees were trained for delivering
quality service, they did not have the power to execute it. As a result, they began a quality
initiative on employee development. The goal here was to maximize customer satisfaction by
improving the way the work was done. They chose to focus on employee development rather
than process improvement. This quality initiative also triggered changes on employee roles and
organizational structure. Lastly, new technology had to be used to provide the customer with
more and better information and services. An important point was the focus on information
offerings complementing Bean's products.
IT technology has also allowed LL Bean to enhance it position with its customers. Their
web page has been designed to attract customers and to provide a first-class customer
experience. In addition to that they have a strong presence on social media sites.
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Q3. Explain how potential global markets will be evaluated for potential entry. Discuss the
most likely mode or modes of global market entry.
While there are significant opportunities to compete in international markets, the risks
can be high. Once a company has decided to target a specific country it must then choose the
best method of entry with its brand. There are five modes of entry into a foreign market which
include, indirect exporting, direct exporting, licensing, joint ventures and direct investment. The
indirect/direct method allows the organization to test the waters before committing to building a
plant and manufacturing overseas. Using the indirect method, the organization works with
intermediaries who sell the product abroad. The advantage here is that there is less risk and an
export department does not have to be developed. Once the company decides to take on their
own exports it becomes direct exporting. Licensing is a relatively simple method that provides
entry into a market. A license is issued to a foreign company to use a manufacturing process, or
other item of value for a fee. There is very little risk for the licensor and the licensee gains
product expertise or a well-known brand name. A joint venture is described two investors, one
local and one foreign who share ownership and control. Joint ventures are typically seen in
emerging markets. While it may provide benefits for economic and or political reasons, it is not
without its drawbacks. Direct investment is best described as direct ownership. The foreign
company can by full or part interest in a local company or choose to build its own manufacturing
or service facilities.
Before deciding whether to ab L.L. Bean opened its first retail store in Tokyo, Japan in
1992. There are currently over twenty retail stores operating in Japan. LL Bean opened its first
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store in China in September 2008 and currently has 62 stores operating in China. The story
opened as part of the company’s China-based joint venture.
“LL Bean is a trusted and authentic brand that inspires and enables individuals and families to
enjoy the outdoors,” said Chris McCormick, president and CEO of LL Bean. “Throughout China
there is a growing interest in participating in outdoor and recreational activities. LL Bean is a
natural fit within this market. This is an area we have been studying for some time as we’ve
considered ways to expand our International presence and diversify our business. China provides
many opportunities with their growing marketplace.”
Q4. Describe the variables (demographic, psychographic, and behavioral) used to segment
the firm’s target markets. Explain how the firm evaluates the attractiveness of each
identified market segment.
Market segmentation can build a strong brand that will grow and stand the test of time.
It includes a group of customers who share similar needs and wants. The challenge is to
correctly identify the appropriate number of and nature of market segments and then which one
to target. The major variables include demographic, psychographic and behavioral.
Demographic variables are very often indicative of the needs and wants of a consumer. They
include specifics such as age, family size, gender, income, education, race and social class to list
a few. This variable allows us to measure the specific characteristics and trends. For example, in
looking at gender it is safe to assume that men and women have different attitudes base in part
on their genetics and socialization. Traditionally women tend to be more communal minded
while men are more self-expressive and goal oriented. Psychographics divides buyers into
groups based on psychological/personality traits, lifestyle or values. This type of segmentation
is used to
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determine what motivates a buyer. For example, a consumer whose motivation is self-
expression desire social or physical activity, variety and risk. Behavioral segmentation divides
the consumer into groups based on knowledge of, attitude toward, use of or response to a
product. The needs and wants of a consumer can identify a distinct market segment. Not all
consumers have the same needs and wants so it is important to understand the variables related
to the usage of a product. Things like occasions, user status, usage rate and loyalty status are
good starts in identifying a market segment.
Effective marketing segmentation is based on five criteria, measurable, sustainable,
accessible, differentiable and actionable. When a firm is evaluating a market segment it must
look at the overall attractiveness of the segment and the organization’s objectives and resources.
It is possible that an attractive market may not align with the organizations long term objectives
or maybe the company does not have the competencies needed to offer superior value.
LL Bean does an excellent job at segmenting its customers within its email sales channel.
They understand that a female buying boots in Vermont is looking for warm weather clothes. As
a result, they will not send that same warm weather clothing catalog to a man in Florida whose
primary purchases have been cargo shorts. This is an example of the catalog targeting used by
LL Bean in order to control the cost and expense associated with paper and catalog mailing.
LL Bean has been using psychographics to attract consumers with a passion for enjoying
the outdoors. They have reassessed their target market based on an aging customer file. Their
findings were described by Kathryn Pratt, director/brand engagement, “And the findings
revealed that gender, age, location and household income were not a unifying factor. What
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matters most is your connection to the outdoors, Pratt said. “That’s the link that connects all of
the people within this target audience.
Q5. Should the firm pursue full market coverage, multiple segment specialization, single-
segment concentration, or individual marketing? (Choose one and omit the others)
In my opinion the firm should pursue single-segment concentration. Using this method,
the firm markets to one segment. The benefits of using this method are the deep knowledge and
strong market presence that is gained through concentrated marketing. In addition to that the
firm has the opportunity to capture segment leadership and earn a high return on its investment.
LL Bean has launched its “Be an outsider campaign”. The campaign is targeting the
outdoor enthusiast. In regard to the consumer the messaging is that whether you are an extreme
skier or backyard camper, the outdoors and an outdoor lifestyle is accessible to anyone who is
interested.
“With a “sheer joy of the outdoors” brand positioning, the retailer started sending the message,
“Outside is Inside Everything We Make.”
When discussing the topic of marketing strategies, the consumer or target market
becomes the concentration. Companies have benefitted for years from low interest rates and
inexpensive labor to drive profits. However, since the financial crisis companies are now
expected to achieve their financial goals in an ethically and socially responsible approach. In
Leviticus, it is written, “when we make a sale or buy from our neighbor, you shall not wrong
one another.” – Leviticus 25:14(ESV) This verse illustrates the importance of incorporating the
principles of dealing fairly and serving others will build consumer confidence and lead the way
for growth and further spending.
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References
Pulido, I. (n.d.). Retrieved May 30, 2020, from
http://ccs.mit.edu/15939/papers/assignment1/LLBEAN.HTM
Answers Ltd. (2019, March 18). Cultural Social Personal Psychological Factors Affect
Buying Behaviour Marketing Essay. Retrieved May 30, 2020, from
https://www.ukessays.com/essays/marketing/cultural-social-personal-psychological-factors-
affect-buying-behaviour-marketing-essay.php
L.L. Bean, Inc. (2020, May 24). Retrieved May 30, 2020, from
https://www.encyclopedia.com/social-sciences-and-law/economics-business-and-
labor/businesses-and-occupations/ll-bean
Company Information. (n.d.). Retrieved May 30, 2020, from
https://www.llbean.com/llb/shop/516920?page=company-info
First L.L. Bean Store to Open in China. (2008, September 17). Retrieved May 30, 2020, from
https://sgbonline.com/first-ll-bean-store-to-open-in-china/
What Amazon and L.L.Bean Can Teach You About Marketing. (2016, January 26). Retrieved
May 30, 2020, from https://businesscollective.com/what-amazon-and-llbean-can-
teach- you-about-marketing/index.html
L.L.Bean taps consumer psychographics. (n.d.). Retrieved May 30, 2020, from
https://www.warc.com/newsandopinion/news/llbean-taps-consumer-psychographics/42573
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L.L. Bean + Qualtrics. (2019, October 10). Retrieved May 30, 2020, from
https://www.qualtrics.com/customers/llbean/
