Buying behavior refers to the process of decision making to buy and use products. There are deviations in buying behavior of customers depending upon the level of involvement and price of product. Besides this a number of other factors may influence the purchasing decision (Peter, Olson and Grunert)
In the case of James Baxter’s bakery, customers will be diversified according to the following changes:
Cultural
These factors are embedded in a personality due to his upbringing in a specific society. These include the values, behaviors, attitudes, norms, beliefs, norms, perceptions and values. Customers will purchase in additional quantity if they have a cultural background for a specific product.
Social
These are due to the surroundings within the society. A consumer will buy something according to his social class, reference groups, family background and peer pressure. Due to the social class, a person’s purchases will be highly affected as to what quality and quantity he buys.
Personal
They include the demographical characteristics of the customers such as their age, income levels, gender and role in family. Young teenagers and adults are more attracted towards the bakery products. Customers who have more decision making authority within their family will have a more chance of buying products from James Baxter’s bakery.
Psychological
These are the factors which attract the customer towards the product he wants to buy. They include attitudes, motives, perceptions and knowledge about the product. Customers who perceive that James Baxter offers good quality and tasty products will be more convinced to buy it than others who do not think so. Those customers who have earlier knowledge about the ingredients and tastefulness will be influenced to buy their products (Baker et al.)
Microenvironment Analysis
Microenvironment can be defined as the environment which is directly related to the firm. Such an environment may not have a complete controlling impact upon the firm’s business operations, but it gets affected by it. The impacts of a microenvironment are clearly evident within the business. It includes the impact of suppliers, intermediaries, public, competitors and customers that will decide how the James Baxter Bakery is performing (Ginter and Duncan)
Suppliers and Intermediaries
The suppliers are quite important as they have to fulfill the requirements by providing the essential inputs, services and raw materials to the business. The intermediary suppliers assist the business to market its products. James Baxter Bakery needs baking products, baking equipment and human labor services. They also require some intermediaries to assist these operations such as agents, retailers, and marketing agencies, value added resellers, distribution companies and wholesalers who can help in efficient marketing of their bakery items (Fleisher and Bensoussan)
General Public
The general public will influence the buying decision for James Baxter’s bakery products by customers. Their perceived public image will be due to their own activities and quality of products which they offer. The public reaction to the products will also affect its sales.
Customers
They are the real consumers of the bakery products, so they can easily judge their market performance. They include the individuals and households who purchase the products from James Baxter for their personal consumptions. For this purpose people are spending around 8-9 percent of their weekly income on bakery products (Department of Agriculture, fisheries and forestry
Competitors
These are the other bakeries which are operating nationally in Australia. They consist of the Brumby’s, Pie Face, Michel’s Patisserie, Bakers Delight, the bakery section in Coles and Woolworths and the specialty store of Adriano Zumbo.
Macro environmental Analysis
Macro environment can be explained as the environment which involves some major external and uncontrollable factors which may influence the decision making of an organization. It will affect the strategic planning and performance of their business operations. These factors include the political, legal, social, economic, technological and demographics conditions.
Political
The political factors involve the political environment stability and the opinions of government. If there are some involvements of tax policies or trading agreements, then it will also influence on the rules and regulations of every food restaurant (Orfano)
Socio-Cultural
These are due to the culture that surrounds the restaurant where it is situated. They include the age, incomes, level of education, social class, gender and lifestyles of the customers. It is very important for customers to keep these factors in mind while making purchases (Orfano)
Technological
These factors will involve the latest inventions and technological adaptations, informational needs, internet advancements, e-commerce, mobile commerce and rapid digitalization. Customers want to get knowledge about the products which are being offered at various restaurants (Orfano)
Economic
These are the economic growth rates, employment levels, costs of raw materials, interest rates, exchange rates, monetary policies and inflation rates. Due to these factors, the restaurants may charge a higher price for their products to cover their costs of production (Orfano)
Demographic
The population of Australia is increasing day by day due to immigrations and other natural factors. It consists of a large number of youngsters. They are more likely to eat from fast food restaurants and bakery products.
Competitor Analysis
An analysis is conducted to know about the strengths and weaknesses of other key players in the industry. Besides this, the potential opportunities and risky threats are also identified. It is required for the use of marketing and strategic planning (Porter)
James Baxter will have to face the competition of some national chain stores like Brumby’s, Bakers Delight, Michel’s Patisserie and Pie Face. There are few specialty stores as well like Adriano Zumbo. Some bakery sections of huge stores like Coles and Woolworths will also be considered as their competitors. Some of them are offering an option of getting customized cakes and cupcakes made. But some are only offering ready to pick products. For example, Bakers Delight bakes breads, biscuits and cakes for special dietary requirements. They are making whole-wheat and 100% fiber contents on prior orders. Brumby’s makes gluten-free breads for people who have issue of allergies.
Similarly, there may be a deviation in the pricing strategies and market positioning for their brand. As Adriano Zumbo is an exclusive specialty store, they are offering their items at a market skimming pricing strategy. They are charging high prices so there customers can have the feeling of buying an exclusive and unique product.
References
- Baker, Michael, et al. "Marketing strategy." International encyclopaedia of business and management (1996): 3333-47.
- Brassington, Frances, and Stephen Pettitt. Principles of marketing. FT Prentice Hall, 2005.
- Fleisher, Craig S., and Babette E. Bensoussan. Strategic and competitive analysis: methods and techniques for analyzing business competition. Upper Saddle River, NJ: Prentice Hall, 2003.
- Ginter, Peter M., and W. Jack Duncan. "Macroenvironmental analysis for strategic management." Long Range Planning 23.6 (1990): 91-100.
- Orfano, F. "Components of a PESTLE Analysis." Bright Hub (website). Accessed 23 (2011).
- Porter, Michael E. "How competitive forces shape strategy." Harvard Business Review 57.2 (2007).
- Peter, J. Paul, Jerry Corrie Olson, and Klaus G. Grunert. Consumer behavior and marketing strategy. London: McGraw-Hill, 1999.
