This report is aimed at developing a market segmentation that profiles different groups of consumers for lounge suites which are commonly known as sofas in Malaysia. Sofas come in a variety of styles and can be made of fabric or leather. Furthermore, there are numerous types of fabrics and patterns that lounge suites can be designed in. Some lounge suites can also be multi-purpose and double as a bed. This essay will be covering the profiling of market segments, identification of a primary target audience and influences on consumer decision making.
A lounge suite could fulfil the need of completing one’s home as an object to sit on in the living space and so is classified as an acquired need and can go on to fulfil one’s social, ego and self-actualisation needs (Maslow, 1943). There are certain influences that determine a consumer’s decision to purchase. These influences include internal influences like income and their level of involvement, and external influences like family, social class as well as culture and subculture (Shiffman, et al., 2011; Wind, 1978).
Demographics - Income
Cicarelli (1974) found that people’s consumption increased with their income. The amount of money consumers are willing to pay for a particular product depends largely on their household income. The more affluent would be able to buy sofas that satisfy their whims and fancy whereas a lower-income person will have to choose a sofa that does not exceed his or her budget. However, it was found that the lower income group did not mind paying for an expensive item as long as they can pay in instalments (Liebermann and Silber, 1993). Many furniture retailers practice this tactic in order to allow lower income groups to purchase expensive furniture. The smaller amount that they are required to pay each month allows them to purchase items that they otherwise will not be able to afford. Although these instalments would add up to a price beyond their means, materialism blinds them and lures them to purchase (Ponchio and Aranha, 2008).
The procurement of a lounge suite would require high involvement from the consumer due to the cost and ego needs involved. Lounge suites are one of the most important investments made when purchasing home furniture because this is where family and friends gather to enjoy each other’s company. Furthermore, the owner of the lounge suite is judged based on his or her choice of lounge suite. The fabric and style of the lounge suite indicates the owner’s taste, individuality and even wealth (Eger, 2006).
According to Corfman (1991), many decisions made by a family are the reflection of the influence of more than one member of the family. Families act as the most important reference group consumers look up to. Schiffman, O’Cass, Paladino, D’Alessandro, and Bednall (2011), a reference group is a person or group that is used as the point of reference in forming the values, attitudes or behaviour of an individual. An individual is able to better identify with family members than outsiders, hence influencing an individuaal’s consumption behaviour (Childers and Rao, 1992). Besides that, the family life cycle also greatly influences a consumer’s purchase of a sofa set. According to Beatty and Talpade (1994) teenagers have very little influence on the decision to purchase lounge suites because of their perceived lack of knowledge of furniture unlike electronic equipment where they become very influential. On the other hand, single working adults are less influenced by their family because they are financially independent. Moreover they usually require a lounge suite for their own residence and might find the choices of their older family members to be old-fashioned.
Social class is defined as the division of members of a society into a hierarchy of different classes where members of each class have either higher...