Case Study
An Analysis of the Consumer Behaviours


This report is presented to investigate the buyer behaviors for PSYCHE. The report is presented as follow. Firstly, the external environment factors facing the firm are analyzed. Two popular theoretical frameworks are used for this purpose. Both PESTEL and SWOT analysis are performed to understand the various external factors can threaten or offer opportunities to the company. Apart from that, the strengths and weaknesses of the firm are also being analyzed. In the section part, the profile of the target market segment of PSYCHE is analyzed. Subsequently, the decision making process of these people are investigated. Last but not least, in the last section, the existing marketing activities of the firm is being analyzed, with various theories regarding consumer buying behaviors such as self-concept, motivation, perception and interpretation. The discussion will focus on the manner on how the firm can capitalize on the market opportunities while at the same time to dilute any market threats according to the company’s strengths and weaknesses.


Macro-Environment Analysis

PESTEL Analysis for PSYCHE

PESTEL Analysis Model is originated from the famous PEST (Political, Economic, Social and Technological) Analysis Model. It is often regarded as the improved version of PEST model because PESTEL model incorporate and consider another two factors in the environmental analysis, namely, the Ecological as well as the Legal factors. The figure below illustrates how the six factors can exert influence on an organization.

Political factors. The government has the political power or potential influence to intervene the organization with some policies, such as tax policy, business laws, inter-country relationships, governmental leadership and political stability. However, the political factors play a minor part in affecting PSYCHE business model and industry.

Economic factors. Economic factors include growth of gross domestic product (GDP), home economic situation and overseas economies and trends, interest rate, exchange rate, unemployment rate and the inflation rate. The recent slowdown of economic growth in many parts of the world is a negative threat to the firm – as the company is primarily selling luxury and fashionable apparels – which is highly volatile and cyclical in nature. However, the depreciation of sterling recently may be positive news for the company, as the orders and revenue from foreign countries – through the online web portal may increase. Overall, economic factors in the near term are negative. It is fortunate that the firm’s business can be considered as the semi-defensive industry – since people will still buy shirts and apparels to wear in gloomy economy environment.

     Social factors. The relevant social factors include education level, lifestyle change, health conscious, the gap of income, career attitude, population growth rate, personal value, consumer preference and emphasis on safety. Several social trends can be observed. Firstly, the rise and popularization of e-Commerce is positive for PSYCHE. Under this trend, the emergence of social media marketing is one of the crucial trends capitalized by PSYCHE to reach greater prospect. Secondly, the demand for lifestyle and emphasis on personal images is increasing – which is generally a good point for PSYCHE. Thirdly, the emphasis on environmental friendly products – but this has less concern with PSYCHE.

     Technological factors. Some important issues here include technology development, replacement technology, automation, R&D activities and the rate of technology change. The relevant technological change which may affect PSYCHE is the proliferation of internet around the world. This means the company may be able to capitalize on such a trend to reach a wider pool of market at foreign countries. Successfully handling market penetration strategy with the usage of internet technology may offer huge growth opportunities for the firm.


SWOT Analysis for PSYCHE

At the company level, a famous analysis model is the SWOT Model. SWOT is the acronyms for strengths, weaknesses, opportunities and threats. The origins of SWOT analysis was make popular by Albert S Humphrey. It is a practical and commonly used technique for understanding the Strengths and Weaknesses of a firm, while suggesting the Opportunities and Threats facing the particular firm. The analysis tool considers both the internal and external factors into the analysis (Strengths and Weaknesses are internal factors of a companies, while Opportunities and Threats are external factors of the market). The SWOT Analysis framework is shown in figure below, and the discussion of each of these factors will be presented in the following paragraph.


Strengths. Strengths are the ability of the firm beyond its competitors or the specifications of the firm to improve its competency. Such as strong brand and reputation of the firm, premium and innovative product or services, tangible assets advantages, personnel and financial resources. The main competency of the company is that it is award winning designer clothing department store where fashions sold are contemporary and fashionable. Besides, the company also stands out as the one-stop solution – offering all attractively designed clothing to an entire family (i.e., almost all famous and luxury international branded apparel products are sold there). Not only that, the fashion are always up to date, where the firm is highly sensitive to the changes in fashion trend in the company. Besides, the usage and setting of online web portal to sell the company products is also encouraging.

Weaknesses. Weaknesses are what the firm lacks of or which could impact on organization’s objectives badly, which may include lower quality products or services, bad brand image, undifferentiated products or services compared with the competitors, manufacturing capacities and so on. The main weakness of the company is that it lacks the size to achieve substantial economies of scale. Besides, the firm is situated in a highly competitive industry, where many people can compete in selling apparel to the end users. The barriers to entry for the firm is also low – even a single internet marketer may be able to do so in selling clothes to customers online. Not only that, the company is sourcing its products from various supplier, and thus, the firm has less bargaining power against these suppliers.

Opportunities. Opportunities are the potential chances of the firm growth and development. Various opportunities exist. The rise of e-Commerce, the globalization process, the rise of middle class and affluent class in emerging countries, and the increasing importance of social media can deliver huge opportunities for the company to growth.

Threats. Threats are the dangerous factors brought forward by the competitors or outside marketplace, which are substitutes from competitors, new rivalry, and innovative technology, which would reduce the market share of a company. The popularization of internet technology is a double edge sword. The barrier to entry to the industry is lowered. Apart from that, the shortening of product life cycle, due to the fast changes in the fashion industry; can be unfavorable to the firm.


Profiling the Target Market

The identification and profiling of the target segment market is a very crucial process in formulating an effective and successful marketing program or communication strategies. With a definite market segment (from effective and accurate profiling of the customers), the marketing activities can be executed to yield the maximum sales and profits. In contrast, without an accurate profiling of the customers, or without a targeted market segment, the business risks wasting marketing dollars on uninterested people. Generally, the process of profiling customers is carried out from four dimensions – geographic, demographic, psychographic and behavioral.

Geographic dimension. Under this dimension, the customers can be profiled by country, state, region, and city. Currently, most of the PSYCHE customers are from Europe and US – relatively less than Asia or emerging countries.

Demographic dimension. Under the demographic dimension, the various factors to be considered include age, sex, income, marital status, family life cycle, education, occupation and ethnicity. The age of the company’s customers are ranging from teen to working adults. The customers can be female or male, married or single. The key important variables in defining the customers should be the income status and the education or occupation condition. As the products sold by the firm is trendy, contemporary and luxury in nature, the customers must have a certain degree of financial or economic ability to purchase these item. Higher income groups, high education level, with stable and high-paying job customers are the target market segment for the company. The customers may range from office executive to managerial posts – but the key point is that they are fashion conscious or simply required to wear good-looking clothes for impression management purposes in their job or lifestyle. The particular customers must have a desire for better lifestyle and quality of life – and having the ability to purchase various clothes design; with a relatively strong earning power.

Psychographic dimension. In this dimensions, customer can be profiled according to the psychological differences, such as activities, interests, opinions, personality, and aspiration. Profiling customers from this perspective can be complicated, as these variables are hardly quantify.

Behavioral dimension. Under this dimension, the customers can be profiled by their observable purchase behaviors. The various elements to be considered include usage, purchase occasion, brand loyalty, and responsiveness to price and promotion. Of this, brand loyalty is an important factor that the customers continue to purchase from the firm. In apparel particularly, certain customers have certain tendency and belief in certain brand or products, and will repurchase the similar brand as the brands are representative of their respective identify and style. The buyers are often people seeking the best design and the newest cutting edge clothing fashions. All of these customers may have one common theme, they are style-savvy and fashion conscious. Besides, some portion of customers may enjoy buying discounted branded product from the website as well, as they are used to purchase the clothing with a simple click – and the goods will be delivered directly to their house.


Customer’s Decision Making Process

The consumer purchase decision making process is a complicated one. Typically, the buying decision process consists of five main steps – need recognition; information search; evaluation of choices; making purchase decision and lastly, engage in post-purchase behavior. There are various model of consumer buying decision making process suggested by researchers. A more common one will be presented graphically as follow.




According to the framework presented above, there are various factors possibly influencing the customers buying decision making process. At the external environment level, the customers may be influenced by either a particular company’s program or the social-cultural setting. Specifically, the company’s marketing program, which can be characterized sufficiently using the marketing mix or the 4P framework, can be influential. An effective marketing mix program will invoke the customers’ buying desires or needs and may also successfully change the customers’ perception on a particular product or services. Other the other hand, the social cultural external environment will be affecting the customers’ buying decision as well. This is a much influential factor in affecting the buying behaviors of consumers. To explain, the opinions and the pressure from a person family members and close friends are highly impactful. A person may buy just to conform to the social mirror or be accepted in a society.

At the internal level, the psychology of the customer is modeled. Simply, the entire buying decision process from need recognition, to pre-purchase search, evaluation of choices as well as the post-purchase behavior are illustrated. It is important to realize that the internal psychological factors of consumers such as motivation, perception, learning, memories, and attitudes do have significant impacts against any buying decision. Besides, the post-purchase experience of a customer with a product will determine if the customers continue buying the similar product in the future.

Adopting this framework, the consumer buying decision from the online store of PSYCHE can be analyzed. Firstly, the external environment of social cultural influences will have significant influences towards any customers. These possible influences include the society attitudes towards e-Commerce, the society internet literacy and exposure, the trends and tastes of consumers in fashion, and the social influences towards someone’s apparel. This is not hard to understand, as we can often see the changes in trends and consumers’ tastes regarding fashion – particularly among the youngster and fashion-conscious consumers. From another perspective, the customer buying decision will also be affected by the people around – the family members and the close groups of friends. For example, some parents may not allow the children to wear some seemingly over-exposed or modern shirts, and this may cause the children to not buying the shirt under great pressure from parents. However, particularly for youth, the influence from friends can be much greater. To avoid from being excluded in a group, a teen or even youth may follow the friends’ opinion in dressing matters. The information communicated by friends is also assumed as more trustworthy, as compared to the sales person or advertisement from the promoting companies. For the case of PSYCHE, if the customers found the online website himself, he may reluctant to buy or trust the quality of products offered by the PSYCHE. However, if it is his friend that introduces him to the online selling portal, with good comment, then it is very likely that the customer will make purchase from the website.

For PSYCHE, the marketing mix communicated to the target customers are also playing important roles in attracting or appealing to the target customers. The marketing mix can be analyzed by studying the shop layout, the design of the website, the use of social media marketing vehicles such as Facebook, Twitter and Blog to reach the marketplace. For a potential customer who wants to buy discounted branded shirt online, the customer may be searching information from the internet. Besides, by using the Facebook and Twitter, the company effectively able to promote the company’s product to a larger pool of potential customers, riding with the opportunities offered by the emergence of internet social media recently. Once the potential buyers are introduced to the online web portal, he will make several judgments to compare the several choices available on how to purchase the products he wants. Throughout this process, his decision making process will be affected by personal psychological factors, such as motivation, perception, learning, personality and experience (which will be further analyzed in details in the following section). After the purchase is made, the customers will experience the products and services offered by PSYCHE – from the perspective of timely delivery, convenience of navigation of PSYCHE website, the end products delivered to the customers, family and friends’ comment on the newly bought apparel, the reliability of the services and products, and if the products meet the customers’ initial expectations. All these factors will be sum up unconsciously by the customers, and will determine if the customers will continue to buy from PSYCHE in the future.


Analyzing the Marketing Activities for PSYCHE


Theoretically speaking, every person buy products to highlight or hide some aspects related to their self or identity. Self-concept is the beliefs a person holds about his/ her own attributes. It is generally agreed by researchers that consumer has both actual self-concept and ideal self-concept. The product should be targeted to people moving towards an ideal self-concept, who are charming and slim. The emergence of the beauty and fitness industry indicates that there is a huge market for people who want to get slimmer, more attractive and healthier. The marketing of the product should play to a similar theme as well. Instead of selling a healthy food, the product sells a sense of hope, and the accomplishment and resemblance of one to his ideal self-concept. This is the essence of intelligent marketing, where we draw people attention to pulling them to our company products, instead of pushing the products to them with hard selling.

The marketing of PSYCHE is positioned correctly in appealing to the target customers. The brand name and the choices of clothing are attractive, and the often participation of PSYCHE in the fashion event further elaborate this point. The entire design of the website and marketing campaign is to induce people to built up or follow a stylish, good lifestyle and handsome/ pretty self concept. The clothes are marketed to show a sense of professionalism. Particularly with the organizing of fashion events, it is a good social pressure to urge youngster or teenage to follow the new trend in the shows or exhibitions. People assumed that they will become trendy and good looking after wearing these cutting edge designs. They move forward to an ideal self-concept of charming and nice with every purchase of products from the company.



Personality is often defined as a set of distinguishing human psychological traits that lead to relatively consistent and enduring responses to environmental stimuli. Personality is often defined in terms of human traits such as self-confidence, dominance, autonomy, deference, sociability, defensiveness and adaptability. In consumer behavior analysis, personality is useful in analyzing consumer brand choice.

All the products are targeted towards people with high self-confidence, unique and sociability. The price of following the changes in fashion is not cheap – but ability to keep in the frontier of fashion design and cutting edge clothing is an indication of success and self-confidence. Besides, all the branded products are marketed to communicate a sense of uniqueness among the users. It is often observable that these branded products advertise to induce people to believe that the users of their products are of prestige, noble and attractive. Thus, the products sold by PSYCHE are targeted toward people with such personality, or to those people in the path of building such kind of personality (in order to be accepted or cherish by the society – at least they believe in it).



There are variety motivation theories applicable and relevant in understanding consumers’ behaviors. For example, Drive Theory asserts that biological needs of the consumers can produce unpleasant states of arousal that urge him to move forward something, such as to buy food when he is hungry. The Expectancy Theory however, argues that a person’s behavior is pulled by expectations of achieving desirable outcomes, such as to buy a movie ticket when someone feels he wants to enjoy a show.

The marketing activities of PSYCHE are purely concentrating on motivating people to move towards a better and more attractive self. The constant participation of fashion event, the published of nicely design clothing, through social media networks and internet, are to shows the teenagers or fashion conscious people on how they can be looking like to perceived as by the society with the cutting edge clothing design. Thus, customers will be induced to purchase from the firm if they are motivated to look sociable, noble and trendy. Besides, the deep discount from buying online is also utilizing other promotion methods to motivate the customers to purchase the desired products from the internet or the firm.



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