Topics under chapter 1:
Understanding why Consumers shop in the first place by Marycruz
Businesses look at understanding consumer behavior and trends so they can create goods and services that consumers will want. Home Depot is a great example of why consumers continuously buy home goods and why they visit the store. Home Depot offers products such as home appliances, hardware, and offer installation services. Mainly everything a consumer who owns a home or lives in an apartment might need.
Once they are there they go through the process of making decisions on whether to buy the product or not. Let’s visualize a consumer going in to shop and how they process making decisions. The first reason a consumer might want to visit Home Depot is that they need something for home improvement. They recognize their problem which could be that they need a new refrigerator because they know that the one they currently have is not keeping their food cold and fresh as before. Next, they will do some research to see how much they will spend on a new refrigerator and look into the speculations on acquiring the new refrigerator. Then they will make their decision based on how much they need the product and if all the information about the refrigerator fits into what they are looking for. Lastly, they will go through a postpurchase evaluation, in which they think about what they enjoyed or did not about the refrigerator and if they would be willing to do it again.
How Homedepot developed and implemented a customer-oriented strategy
Consumer Ability and Opportunity
Understanding why Consumers shop in the first place by Marycruz
Businesses look at understanding consumer behavior and trends so they can create goods and services that consumers will want. Home Depot is a great example of why consumers continuously buy home goods and why they visit the store. Home Depot offers products such as home appliances, hardware, and offer installation services. Mainly everything a consumer who owns a home or lives in an apartment might need.
Once they are there they go through the process of making decisions on whether to buy the product or not. Let’s visualize a consumer going in to shop and how they process making decisions. The first reason a consumer might want to visit Home Depot is that they need something for home improvement. They recognize their problem which could be that they need a new refrigerator because they know that the one they currently have is not keeping their food cold and fresh as before. Next, they will do some research to see how much they will spend on a new refrigerator and look into the speculations on acquiring the new refrigerator. Then they will make their decision based on how much they need the product and if all the information about the refrigerator fits into what they are looking for. Lastly, they will go through a postpurchase evaluation, in which they think about what they enjoyed or did not about the refrigerator and if they would be willing to do it again.
How Homedepot developed and implemented a customer-oriented strategy
by Dean De Dios
Homedepot is the world’s largest home improvement retailer in the world with last year’s revenue of $110,225,000,000 and even with the current pandemic they’re sales continue to trend up with a gross margin of 34% and net profit margin of 10%. The reason being is that they know how to select their target demographic and serve them well.
Source:https://www.macrotrends.net/stocks/charts/HD/home-depot/revenue
How the market is segmented?
Homedepot is the world’s largest home improvement retailer in the world with last year’s revenue of $110,225,000,000 and even with the current pandemic they’re sales continue to trend up with a gross margin of 34% and net profit margin of 10%. The reason being is that they know how to select their target demographic and serve them well.
How the market is segmented?
Home depot categorized their customers by:
- Do-it-yourself
- Do-it-for-me customers
- Professional customers
DIY customers typically are the people who want to improve their properties by buying parts to assemble and install it by themselves.
DIFM customers are the ones who buy the stuff and pay someone to do the work for them.
Professional customers fall on the commercial side such as contractors, repairmen, and small business owners.
Source:https://ir.homedepot.com/~/media/Files/H/HomeDepot-IR/2020/2019_THD_AnnualReport_vf.pdf
Are Customers Satisfied with Existing Offerings?
The execution is phenomenal. Home Depot is innovating by the “customer-back” approach where they focus on the customer’s experience.
DIFM customers are the ones who buy the stuff and pay someone to do the work for them.
Professional customers fall on the commercial side such as contractors, repairmen, and small business owners.
Source:https://ir.homedepot.com/~/media/Files/H/HomeDepot-IR/2020/2019_THD_AnnualReport_vf.pdf
Are Customers Satisfied with Existing Offerings?
The execution is phenomenal. Home Depot is innovating by the “customer-back” approach where they focus on the customer’s experience.
Their strategy involves 5 processes.
- Connect associates to customer needs
- Interconnected experience: connect stores to online, and online to stores
- Connect products and services to customer needs
- Connect the product to shelf, site, and customers
- Innovate our business model and value chain
One of the home depots key values is “excellent customer service” they’re doing their best to always provide the customers with products, services, and knowledge by 2014 the company achieved its goal of 60% customer-facing activities to make sure that it’s customers are getting the help that they need
View their values here:https://corporate.homedepot.com/about/values
As I finish this part of the chapter’s post, we can come to the conclusion that businesses can use consumer behavior insights to help them find market segments that can help them become profitable.
Topics under chapter 2:
Motivation, Ability, and Opportunity
Consumer Motivation and Its Effects
By Alejandra
Motivation is defined as “an inner state of activation,” with the activated energy directed to achieving a goal” (Hoyer, 2017, p. 45). When new products come out, consumers who are interested in these products find motivation to have the product before it's even released. For example, if Home Depot were to announce a newly designed Weber grill were to be available this upcoming season, a consumer highly interested in this grill would be motivated to either get rid of their old grill or even make a space in their home for the Weber grill. Motivation also has effects on how we take in information as well as how we make decisions. When a consumer is motivated to buy a certain item, they will search and search for the best deals out there. There is a case of having low motivation and in this situation you might not have the energy to look for the “best” version instead will get the first one you see. Location and convenience also plays a part in motivation, if the consumer is closer to a Lowe’s and needs a drill, they won’t bother to drive further to a Home Depot to get a drill since Lowe’s is closer and any drill will do.
Types of Involvement
There are four types of involvement that exist for motivation, enduring, situational, cognitive, and affective. The enduring involvement occurs when someone is interested in a certain activity. For example, if a consumer is interested in gardening they will more than likely visit multiple Home Depots in search of different plants and garden tools. Situational involvement happens when a consumer doesn’t enjoy or consider gardening a hobby but still wants to buy plants for their empty backyard. Once the plants are planted, the consumer doesn't show interest in purchasing more. Cognitive involvement means they are interested in his or her goal and processes information relating to the goal. Affective involvement is when someone has feelings about an activity such as watching videos on YouTube about a DIY cabinet, they are showing strong involvement.
What Determines Motivation?
In order for Home Depot to succeed, the marketers must determine what affects motivation. When marketers know this it's easier to know what the consumer could be motivated to buy at Home Depot. Motivation can also come when a consumer feels the desire to fulfill a need. Needs are different depending on the characteristic. For example, a personal need is based on yourself and not what others think. A functional need is one where you might need something to fix a problem, such as going to Home Depot to buy a new door knob for your broken door. A symbolic need is different since this ties into the need for status, achievement, and affiliation. One might want to buy a popular tool kit at Home Depot instead of buying the generic tool kit. Marketers must know the needs of the consumers that way when new products come out they will know how to reach these specific consumers.
View their values here:https://corporate.homedepot.com/about/values
As I finish this part of the chapter’s post, we can come to the conclusion that businesses can use consumer behavior insights to help them find market segments that can help them become profitable.
Topics under chapter 2:
Motivation, Ability, and Opportunity
Consumer Motivation and Its Effects
By Alejandra
Motivation is defined as “an inner state of activation,” with the activated energy directed to achieving a goal” (Hoyer, 2017, p. 45). When new products come out, consumers who are interested in these products find motivation to have the product before it's even released. For example, if Home Depot were to announce a newly designed Weber grill were to be available this upcoming season, a consumer highly interested in this grill would be motivated to either get rid of their old grill or even make a space in their home for the Weber grill. Motivation also has effects on how we take in information as well as how we make decisions. When a consumer is motivated to buy a certain item, they will search and search for the best deals out there. There is a case of having low motivation and in this situation you might not have the energy to look for the “best” version instead will get the first one you see. Location and convenience also plays a part in motivation, if the consumer is closer to a Lowe’s and needs a drill, they won’t bother to drive further to a Home Depot to get a drill since Lowe’s is closer and any drill will do.
Types of Involvement
There are four types of involvement that exist for motivation, enduring, situational, cognitive, and affective. The enduring involvement occurs when someone is interested in a certain activity. For example, if a consumer is interested in gardening they will more than likely visit multiple Home Depots in search of different plants and garden tools. Situational involvement happens when a consumer doesn’t enjoy or consider gardening a hobby but still wants to buy plants for their empty backyard. Once the plants are planted, the consumer doesn't show interest in purchasing more. Cognitive involvement means they are interested in his or her goal and processes information relating to the goal. Affective involvement is when someone has feelings about an activity such as watching videos on YouTube about a DIY cabinet, they are showing strong involvement.
What Determines Motivation?
In order for Home Depot to succeed, the marketers must determine what affects motivation. When marketers know this it's easier to know what the consumer could be motivated to buy at Home Depot. Motivation can also come when a consumer feels the desire to fulfill a need. Needs are different depending on the characteristic. For example, a personal need is based on yourself and not what others think. A functional need is one where you might need something to fix a problem, such as going to Home Depot to buy a new door knob for your broken door. A symbolic need is different since this ties into the need for status, achievement, and affiliation. One might want to buy a popular tool kit at Home Depot instead of buying the generic tool kit. Marketers must know the needs of the consumers that way when new products come out they will know how to reach these specific consumers.
Consumer Ability and Opportunity
By Nouisha
Factors that affect consumers’ ability to process information and make decisions are financial, cognitive, emotional, physical, social, cultural resources, education, and age. These demographics can individually or collectively affect the buying decisions of the consumer. Understanding consumer buying behavior is important to comprehend as it shows insight into the decision-making process and dynamics that surround and influence purchases. Key influences in consumer opportunities are lack of time, distraction, and the amount, complexity, repetition, and control of information. By knowing what factors influence purchase decisions, it makes it easier for Home Depot to determine what to supply in their stores and at what price points.
The home improvement retailer has seen its stock outperform through the coronavirus crisis, rising by almost 14% year-to-date (compared to a 3% decline in S&P), benefiting from the stay-at-home bump. Home Depot’s stock is already about 40% higher than it was at the end of 2017, a little over 2 years ago. Home Depot has remained open as an essential retailer during the pandemic restrictions and has benefited from home improvement projects as well as people stocking up on cleaning supplies and safety-related products. By the look of things, people have focused their time and money on fixing up their houses and spring clean-up, now that they have more spare time due to Covid-19. Many of these consumers went online to order the items they needed for their projects, boosting Home Depot’s e-commerce sales by 80%. Thus, financial factors have influenced the increase in consumer purchases and decisions, as well as physical factors such as wanting to stay inside more.
Factors that affect consumers’ ability to process information and make decisions are financial, cognitive, emotional, physical, social, cultural resources, education, and age. These demographics can individually or collectively affect the buying decisions of the consumer. Understanding consumer buying behavior is important to comprehend as it shows insight into the decision-making process and dynamics that surround and influence purchases. Key influences in consumer opportunities are lack of time, distraction, and the amount, complexity, repetition, and control of information. By knowing what factors influence purchase decisions, it makes it easier for Home Depot to determine what to supply in their stores and at what price points.
The home improvement retailer has seen its stock outperform through the coronavirus crisis, rising by almost 14% year-to-date (compared to a 3% decline in S&P), benefiting from the stay-at-home bump. Home Depot’s stock is already about 40% higher than it was at the end of 2017, a little over 2 years ago. Home Depot has remained open as an essential retailer during the pandemic restrictions and has benefited from home improvement projects as well as people stocking up on cleaning supplies and safety-related products. By the look of things, people have focused their time and money on fixing up their houses and spring clean-up, now that they have more spare time due to Covid-19. Many of these consumers went online to order the items they needed for their projects, boosting Home Depot’s e-commerce sales by 80%. Thus, financial factors have influenced the increase in consumer purchases and decisions, as well as physical factors such as wanting to stay inside more.
Comments
Post a Comment