It is best to begin by pointing out that Purchase behavior involves studying and analyzing the decision making and actions of the consumer when purchasing and consuming goods and services. Fundamentally, purchase behavior refers to the consumers’ preferences, attitudes, intentions and the consumers’ entire mental, behavioral and emotional reactions before and after buying goods and services. Purchase behavior enables organizations to understand factors influencing consumers to purchase as well as the reasons behind consumers’ purchases. Therefore in order to evaluate the purchase behavior of adolescents in Latvia, it is worth indicating that the process will involve conducting research studies.
The analysis will involve the use of primary research as well as secondary research respectively. Primary research refers to the collection or gathering and compiling of information directly from the (potential) customers as opposed to relying on published sources. In essence, primary research is searching for new information through direct contact with the people (participants). Primary research takes the form of making direct observations, face to face interviews, focus groups, online or postal surveys and telephone interviews respectively.
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On the other hand, secondary research also called “desk research” refers to the process of gathering or collecting of already existing information that is published and available in the public domain. Secondary research involves the use of published journals, information from online or internet platforms, or existing data from organizations (Bradley, 2007). The sources of secondary data also include blogs, newspaper, magazines, peer review journals, even sales figures and employee staff cards qualify as sources of secondary data.
The key significance of using secondary research is that it facilitates a better initial understanding of the market. Equally important, secondary research is quick and affordable. On the other end, while primary research may be costly and time-consuming, its main benefit is that it gives the researcher control to ask the specific questions under study and thus control the quality of the research. By combining both primary and secondary the research finding will be qualitative and quantitative respectively.
Market segmentation refers to the process of splitting up or sub-dividing the consumers or markets into distinct and identifiable segments on the basis of their needs and commonly shared characteristics. As such, homogeneity and distinction characterize market segmentation. The main objective and purpose of market segmentation is to enable organizations to personalize their operational and marketing activities to relevantly target the customers and sustain a competitive advantage (Kale & Sudharshan, 2012). Equally important, market segmentation is aimed at grouping together consumers have share a common buying behavior pattern. From a broader perspective markets can be split up or divide into macro- segmentation and micro-segmentation respectively.
The bases of macro-segmentation include geographic, distribution, price, and demographic segmentation. Segmentation on the basis of geographical location arises from the fact that organizations located in the same location or area share a common environment and culture. As such, for instance an organization can choose not to market, advertise or promote their organization in a given location due to factors such as sharply conflicting cultural values. Due to the contrasting consumer preferences organizations are left with no option but to segment the market.
Markets can as well be segmented on the basis of their rate of product or service usage. Therefore organizations can deploy the strategy of segmentation by dividing the consumers into categories various groups on the basis of their rate or levels of consumption. For instance the consumers of a given region on the can be segmented into frequent buyers and occasional buyers, thus enabling the organization to know how to market their product better to the segment that buys occasionally.
The basis of micro-segmentation is include purchasing strategies, importance of purchase, attitude towards vendors and the framework of the decision making unit. On the basis of purchasing strategy the company deploys two distinct strategies. The first is to group the vendors as those with known purchasing criteria and frequency. The second strategy entails soliciting for bids, then selecting the most appropriate package. Segmentation strategies can be devised on the basis of the degree of importance.
Organizations broadening their operations and expanding their market to the global market utilize five distinct modes of entry gain access into the foreign market. The modes of entry are namely: joint venture, licensing, exporting, strategic partnering and alliance and establishing a wholly owned subsidiary. To begin with, exporting refers to the sale or transfer of goods and services that are available or sourced from a home country to a foreign country. In other word exporting is concerned with transfer of products or services across the spheres of national boundaries. Exporting is characterized with the benefits of low risk. It is also the most appropriate and easiest way of penetrating into the global markets since it eliminates the costs of setting up operations in the foreign country. Disadvantages of exporting include tariff barriers from host nations, poor knowledge of the host nation’s domestic market, and the possibilities of high transportation costs.
Licensing refers to a form of arrangement in which n multinational organization provides another entity with the patent rights, trademarks copyrights or any other intellectual property rights for use in commercial purposes. The advantages of licensing include quick entry, low entry costs and low financial risk. Licenses instantly transfers local knowledge in addition to creating a firm presence in new foreign markets. The disadvantages of licenses include high probability of losing the business control, inadequate control over quality and the risk of the license being dishonored. On the other hand, franchising is an agreement that facilitates the sale of rights by the domestic franchisor to the foreign franchisee, thus allowing its use for commercial purposes (Durmaz & Taşdemir, 2014). The advantages of franchising include low cost of entry and high chances of rapid expansion. Disadvantages include the probability of disloyalty, needs one to follow a strict assessment before qualifying and challenge of maintaining quality standards.
Joint ventures and strategic partnering and alliance are somewhat similar in the sense that the latter is a weaker version of the former. These modes of entry refer to an arrangement involving two or more organizations combine forces to achieve a competitive advantage. Benefits include a combination of knowledge and expertise between the local and foreign partners, shared risk, and reduced political risk. The disadvantages include high risk of losing control to partners, tensions and disagreements due to conflicting interests, complicated registration procedures and unequal sharing of burdens. Lastly. Wholly owned subsidiary are established subsidiaries that are 100 percent owned by the parent company. Benefits include full control, potential of high profitability and the benefit of global strategic coordination. The disadvantages include high cost of entry, complicated registration procedures and high operational risks.
