CHAPTER ONE

INTRODUCTION

1.1. Background to the study

Nowadays fierce competition creates challenges for companies in attracting customers and convincing them into buying their products instead of the competitors’ products. To be able to attract customers there is a need to understand the consumer buying process (Pelau, 2011). It is no longer possible for companies only to rely on keeping a low-cost production and aiming for a high volume of sales to stay in business; customers’ needs are now the main focus and companies need to be able to achieve customer satisfaction to remain competitive (Ji& Wang, 2010). In order to create a suitable marketing strategy, companies need to have an understanding of customer needs and the consumer buying process (Pelau, 2011).

With the increasing competition, most of companies are searching for creative ways to stay ahead of the market (Pingjun&Rosenbloom 2005). A study by Chatura, McDougall and Bansal in (2005), has argued that there are different ways to keep ahead of the competition, nevertheless knowing your customer needs should always be priority, because the customer needs or demand can change dramatically due to the high development in different market areas.

According to Solomon, Michael R., et al. (2018), in today’s highly competitive market companies don’t have many options to survive. Traditionally most of the companies were focusing on lowering the cost in order to be able to compete with low price, however this option may not be available for all the companies and it cannot be the only solution, therefore, a study by Vilasini&Khanna (2016) concluded that it is very important for business to focus on the customer needs and a customer behavior in the buying process. According to Ilyoo B (2015) it is very important for the enterprises to understand the cycle of buying process, because only through the buying process models’ companies can understand their customer needs.

Nikolaos (2016) has argued that knowing your customer needs is one of the key solutions, but it is not enough to solve all the problems. Companies need to consider the certain environment of information regarding its product. Also, companies need to know the strategies to use to penetrate the market. Market penetration strategy is one of the four business growth strategies identified in the Ansoff Matrix, the other three being market development strategy, product development strategy, and diversification strategy. Market penetration strategy refers to when the company attempts to grow using existing products in existing markets, as shown in the bottom left quadrant of the Ansoff matrix

Companies must be competitive to serve chosen segments effectively by developing suitable marketing strategies in a meaningful and sustainable way. Marketing strategy has become a helpful tool in the competitive market environment for any organization in the world to remain and become stronger (Burke &Litwin, 2012). Ambler, Kokkinaki, and Puntoni (2014) argue that a good marketing strategy needs informing an organization where it wants to be on a long-term basis, so marketing strategy is often said to be a constant method.

The strategy regarding expansion of markets entails a method used by the organization to attract new and more customers or enhancing usage of the already existing product and service (Kotler& Keller, 2017). Gado (2013) observe that sustained presence of businesses requires on-going consideration of how market growth approach affects performance behaviours of their businesses. How coherent their market growth with the performance of such businesses is anticipated to have consequences for their survival.

According to Slater and Narver (2016) market penetration strategy involves organizations products and services are sold in existing markets. Therefore, the goal of the strategy for market penetration is to concentrate on increasing the current product or service market share on the existing market. According to Levay, Drossinos and Thiel (2017) organizations adopt market penetration strategy to increase income from sales without altering the products or services. Therefore, it is argued that the after assessing the multiple alternatives and their intrinsic hazards, the selection of penetration mode is made at company level and is therefore a strategic decision for the company.

1.2 Statement of the Problem

The bakery industry in Buea(Njieforbi), Cameroon, has been in constant flux as a result of economic liberalization; competition has been fierce, compelling all businesses in the sector to adapt to the changing climate.

Njieforbi has faced various hurdles in implementing market expansion strategies as a result of the large number of bakery companies operating in the same market. At the same time, several firms have become more competitive by launching initiatives; nevertheless, given the current crisis in the subsector, many organizations are confronting the same issues. Managers of Njieforbi will need to adopt appropriate strategies to help them improve the organization’s performance in such an unpredictable environment.

Market penetration techniques, according to the World Economic Forum, are critical in influencing consumer purchasing behavior. For a long time, there has been minimal competition in Cameroon bakeries, and lots of space for expansion. Furthermore, high-end and middle-class customers had few options: either make multiple journeys to the mutengne area or visit one of the large bakeries where everything was available. However, the transition of Cameroon bakeries in Buea has been expedited by years of growing purchasing power and changing consumer demands.

Some Buea stores still purchase bakery products such as bread from adjacent towns such as Muntengne and Ekona. Along with retail stores and supermarkets, the popularity and penetration of shopping malls has increased in the country (Cytonn, 2018) As a result, bakeries face a difficulty in attracting and retaining customers who will stick to their products. This necessitates an understanding of how these clients behave. This knowledge could help bakeries improve their competitiveness and ensure their long-term viability.

Consumer behavior refers to how people behave while they are looking for, buying, using, assessing, and discarding things and services that they believe will meet their requirements. Individual preferences, choices, and tastes all influence consumer purchase behaviour. Other aspects, including as cultural, social, personal, and psychological considerations, influence consumer behaviour, some of which marketers have no control over (Hanaysha, 2018).

1.3 Research Questions

1.3.1 Main Question

The main Research Question of this study is “what is the effect of Market Penetration strategies on consumer buying Behavior”.

1.3.2 Specific Questions

The specific Research Questions are;

1. What is the effect of pricing strategy on consumer buying behaviour?
2. What is the effect of the distribution channel on consumer buying behaviour?

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